File No. 33-44186
811-6485
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 24 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 26 |X|
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SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
(Exact name of registrant as specified in charter)
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100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive office)
Registrant's Telephone Number: 212-850-1864 or Toll Free: 800-221-2450
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THOMAS G. ROSE, Treasurer, 100 Park Avenue, New York, New York 10017
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to paragraph (b)
|_| on (date) pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|_| on (date) pursuant to paragraph (a)(1)
|X| 75 days after filing pursuant to paragraph (a)(2)
|_| on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-1 Notice for
Registrant's most recent fiscal year was filed with the Commission on December
23, 1996.
<PAGE>
File No. 33-44186
811-6485
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
POST-EFFECTIVE AMENDMENT NO. 24
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A)
FORM N-1A PART A-ITEM NO. LOCATION IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Summary of Series Expenses
3. Condensed Financial Information Not applicable
4. General Description of Registrant Cover Page; Organization
and Capitalization
5. Management of Fund Management Services
5a. Manager's Discussion of Fund Performance Management Services
6. Capital Stock and Other Securities Organization and
Capitalization
7. Purchase of Securities Being Offered Alternative Distribution
System; Purchase of Shares;
Administration, Shareholder
Services and Distribution
Plan
8. Redemption or Repurchase Telephone Transactions;
Redemption of Shares;
Exchange Privilege
9. Legal Proceedings Not applicable
PART B-ITEM NO. LOCATION IN STATEMENT OF
ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information;
Appendix B; Appendix C
13. Investment Objectives and Policies Investment Objective,
Policies and Risks;
Investment Limitations
14. Management of the Registrant Management and Expenses
15. Control Persons and Principal Directors and Officers;
Holders of Securities General Information
16. Investment Advisory and Other Services Management and Expenses;
Distribution Services
17. Brokerage Allocation Portfolio Transactions;
Administration, Shareholder
Services and Distribution
Plan
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing of Purchase and Redemption
Securities Being Offered of Fund Shares; Valuation
20. Tax Status Taxes
21. Underwriters Distribution Services
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
<PAGE>
PROSPECTUS
SELIGMAN HENDERSON INTERNATIONAL VALUE FUND
A SERIES OF
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
100 Park Avenue o New York, NY 10017 o New York Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450 -- all continental United States
For Retirement Plan Information -- Toll-Free Telephone: (800) 445-1777
September 26, 1997
Seligman Henderson International Value Fund (the "Fund") is a series of
Seligman Henderson Global Fund Series, Inc. (the "Corporation"), an open-end
diversified management investment company. The Fund seeks to achieve its
objective of long-term capital appreciation by investing at least 80% of its net
assets in equity securities of non-United States companies deemed to be "value"
companies by the Fund's subadviser. There can be no assurance that the Fund's
investment objective will be achieved. For a description of the Fund's
investment objective and policies, and the risk factors associated with an
investment in the Fund, see "Investment Objective, Policies and Risks."
The Fund is managed by J. & W. Seligman & Co. Incorporated (the "Manager").
Seligman Henderson Co. (the "Subadviser") supervises and directs the Fund's
investments.
The Fund offers three classes of shares. Class A shares are sold subject to
an initial sales load of up to 4.75% and an annual service fee currently charged
at a rate of up to .25% of the average daily net asset value of the Class A
shares. Class A shares purchased in an amount of $1,000,000 or more are sold
without an initial sales load but are subject to a contingent deferred sales
load ("CDSL") of 1% on redemptions within eighteen months of purchase. Class B
shares are sold without an initial sales load but are subject to a CDSL of 5% on
redemptions in the first year after purchase of such shares, declining to 1% in
the sixth year and 0% thereafter, an annual distribution fee of .75% and an
annual service fee of up to .25% of the average daily net asset value of the
Class B shares. Class B shares will automatically convert to Class A shares on
the last day of the month that precedes the eighth anniversary of their date of
purchase. Class D shares are sold without an initial sales load but are subject
to a CDSL of 1% imposed on redemptions within one year of purchase, an annual
distribution fee of up to .75% and an annual service fee of up to .25% of the
average daily net asset value of the Class D shares. Any CDSL payable upon
redemption of shares will be assessed on the lesser of the current net asset
value or the original purchase price of the shares redeemed. No CDSL will be
imposed on shares acquired through the reinvestment of dividends or
distributions received from any Class of shares. See "Alternative Distribution
System." Shares of the Fund may be purchased through any authorized investment
dealer.
This Prospectus sets forth concisely the information a prospective investor
should know about the Fund before investing. Please read it carefully before you
invest and keep it for future reference. Additional information about the Fund,
including a Statement of Additional Information, has been filed with the
Securities and Exchange Commission. The Statement of Additional Information is
available upon request without charge by calling or writing the Fund at the
telephone numbers or the address set forth above. The Statement of Additional
Information is dated the same date as this Prospectus and is incorporated herein
by reference in its entirety.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
PAGE
Summary of Fund Expenses................................................. 2
Alternative Distribution System.......................................... 3
Investment Objective, Policies and Risks................................. 4
Management Services...................................................... 9
Purchase of Shares....................................................... 11
Telephone Transactions................................................... 16
Redemption of Shares..................................................... 18
Administration, Shareholder Services
and Distribution Plan................................................... 19
Exchange Privilege....................................................... 20
Further Information about Transactions in the Fund....................... 22
Dividends and Distributions.............................................. 22
Federal Income Taxes..................................................... 23
Shareholder Information.................................................. 24
Advertising the Fund's Performance....................................... 26
Organization and Capitalization.......................................... 26
<PAGE>
SUMMARY OF FUND EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
----------------- ------------------ -----------------
(INITIAL SALES (DEFERRED SALES (DEFERRED SALES
LOAD ALTERNATIVE) LOAD ALTERNATIVE) LOAD ALTERNATIVE)
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) ............... 4.75% None None
Sales Load on Reinvested Dividends................... None None None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds,
whichever is lower)................................ None; 5% in 1st year 1% in 1st year
except 1% 4% in 2nd year None thereafter
in first 18 months 3% in 3rd
if initial sales and 4th years
load was waived 2% in 5th year
in full due to size 1% in 6th year
of purchase None thereafter
Redemption Fees...................................... None None None
Exchange Fees........................................ None None None
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES CLASS A CLASS B CLASS D
------- ------- -------
(as a percentage of average net assets)
<S> <C> <C> <C>
Management Fees...................................... 1.00% 1.00% 1.00%
12b-1 Fees .......................................... .25% 1.00%* 1.00%*
Other Expenses (after expense reimbursement)......... .75% .75% .75%
----- ----- -----
Total Fund Operating Expenses........................ 2.00% 2.75% 2.75%
===== ===== =====
</TABLE>
The purpose of this table is to assist investors in understanding the
various costs and expenses which shareholders of the Fund bear directly or
indirectly. The sales load on Class A shares is a one-time charge paid at the
time of purchase of shares. Reductions in initial sales loads are available in
certain circumstances. Class A shares are not subject to an initial sales load
for purchases of $1,000,000 or more; however, such shares are subject to a CDSL,
a one-time charge, only if the shares are redeemed within eighteen months of
purchase. The CDSLs on Class B and Class D shares are one-time charges paid only
if shares are redeemed within six years or one year of purchase, respectively.
The expense table and example below reflect a voluntary undertaking by the
Manager and the Subadviser to reimburse a portion of "Other Expenses" such that
total operating expenses for the current fiscal year will not exceed annualized
rates of 2.00%, 2.75%, and 2.75% of the average net assets of the Class A, Class
B, and Class D shares, respectively. In the absence of these undertakings, it is
estimated that "Total Fund Operating Expenses" would equal approximately, 2.22%,
2.97%, and 2.97%, respectively. There is no guarantee that these undertakings
will continue past the end of the current fiscal year. For more information
concerning reductions in sales loads and for a more complete description of the
various costs and expenses, including management fees, see "Purchase of Shares,"
"Redemption of Shares" and "Management Services" herein. The Fund's
Administration, Shareholder Services and Distribution Plan, to which the caption
"12b-1 Fees" relates, is discussed under "Administration, Shareholder Services
and Distribution Plan" herein.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
-------- -------
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming (i) a 5% annual return and
(ii) redemption at the end of each time period................. Class A $67 $107
Class B+ $78 $115
Class D $38++ $ 85
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN AND THE 5%
ANNUAL RETURN USED IN THIS EXAMPLE IS A HYPOTHETICAL RATE.
*Includes an annual distribution fee of up to .75% and an annual service fee
of up to .25%. Pursuant to the Rules of the National Association of
Securities Dealers, Inc., the aggregate deferred sales loads and annual
distribution fees on Class B and Class D shares of the Fund may not exceed
6.25% of total gross sales, subject to certain exclusions. The maximum
sales charge rule is applied separately to each class. The 6.25% limitation
is imposed on the Fund rather than on a per shareholder basis. Therefore, a
long-term Class B or Class D shareholder of the Fund may pay more in total
sales loads (including distribution fees) than the economic equivalent of
6.25% of such shareholder's investment in such shares.
+Assuming (i) a 5% annual return and (ii) no redemption at the end of the
period, the expenses on a $1,000 investment would be $28 for 1 year and
$85 for 3 years.
++Assuming (i) a 5% annual return and (ii) no redemption at the end of one
year, the expenses on a $1,000 investment would be $28.
2
<PAGE>
ALTERNATIVE DISTRIBUTION SYSTEM
The Fund offers three classes of shares. Class A shares are sold to
investors who have concluded that they would prefer to pay an initial sales load
and have the benefit of lower continuing fees. Class B shares are sold to
investors choosing to pay no initial sales load, a higher distribution fee and a
CDSL with respect to redemptions within six years of purchase and who desire
shares to convert automatically to Class A shares after eight years. Class D
shares are sold to investors choosing to pay no initial sales load, a higher
distribution fee and, with respect to redemptions within one year of purchase, a
CDSL. The Alternative Distribution System allows investors to choose the method
of purchasing shares that is most beneficial in light of the amount of the
purchase, the length of time the shares are expected to be held and other
relevant circumstances. Investors should determine whether under their
particular circumstances it is more advantageous to incur an initial sales load
and be subject to lower ongoing fees, as discussed below, or to have the entire
initial purchase price invested in the Fund with the investment thereafter being
subject to higher ongoing fees and either a CDSL for a six-year period with
automatic conversion to Class A shares after eight years or a CDSL for a
one-year period with no automatic conversion to Class A shares.
Investors who expect to maintain their investment for an extended period of
time might choose to purchase Class A shares because over time the accumulated
continuing distribution fees of Class B and Class D shares may exceed the
initial sales load and lower distribution fee of Class A shares. This
consideration must be weighed against the fact that the amount invested in the
Fund will be reduced by the amount of the initial sales load on Class A shares
deducted at the time of purchase. Furthermore, the higher distribution fees on
Class B and Class D shares will be offset to the extent any return is realized
on the additional funds initially invested therein that would have been equal to
the amount of the initial sales load on Class A shares.
Investors who qualify for reduced initial sales loads, as described under
"Purchase of Shares" below, might also choose to purchase Class A shares because
the sales load deducted at the time of purchase would be less. However,
investors should consider the effect of the 1% CDSL imposed on shares on which
the initial sales load was waived in full because the amount of Class A shares
purchased reached $1,000,000 or more. In addition, Class B shares will be
converted into Class A shares after a period of approximately eight years, and
thereafter investors will be subject to 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.
Alternatively, some investors might choose to have all of their funds
invested initially in Class B or Class D shares, although remaining subject to a
higher continuing distribution fee and for a six-year or one-year period, a CDSL
as described below. For example, an investor who does not qualify for reduced
sales loads would have to hold Class A shares for more than 6.33 years for the
Class B or Class D distribution fee to exceed the initial sales load plus the
distribution fee on Class A shares. This example does not take into account the
time value of money, which further reduces the impact of the Class B and Class D
shares' 1% distribution fee, fluctuations in net asset value or the effect of
the return on the investment over this period of time.
Investors should bear in mind that total asset based charges (i.e., the
higher continuing distribution fee plus the CDSL) on Class B shares that are
redeemed may exceed the total asset based sales charges that would be payable on
the same amount of Class A or Class D shares, particularly if the Class B shares
are redeemed shortly after purchase or if the investor qualifies for a reduced
sales load on the Class A shares.
Investors should understand that the purpose and function of the initial
sales loads (and deferred sales load, when applicable) with respect to Class A
shares is the same as those of the deferred sales loads and higher distribution
fees with respect to Class B and Class D shares in that the sales loads and
distribution fees applicable to a Class provide for the financing of the
distribution of the shares of the Fund.
Class B and Class D shares are subject to the same ongoing distribution fees
but Class D shares are sub-
3
<PAGE>
ject to a CDSL for a shorter period of time (one year as opposed to six years)
than Class B shares. However, unlike Class D shares, Class B shares
automatically convert to Class A shares after eight years, which are subject to
lower ongoing fees.
The three classes of shares 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, potentially, certain
other class expenses and has exclusive voting rights with respect to any matter
to which a separate vote of any class is required by the Investment Company Act
of 1940, as amended (the "1940 Act"), or Maryland law. The net income
attributable to each class and dividends payable on the shares of each class
will be reduced by the amount of distribution and other expenses to be paid by
each class. Class B and Class D shares bear higher distribution fees, which will
cause Class B and Class D shares to pay lower dividends than the Class A shares.
The three classes also have separate exchange privileges.
The Directors of the Corporation believe that no conflict of interest
currently exists between the Class A, Class B and Class D shares of the Fund. On
an ongoing basis, the Directors, in the exercise of their fiduciary duties
pursuant to the 1940 Act and Maryland law, will seek to ensure that no such
conflict arises. For this purpose, the Directors will monitor the Fund for the
existence of any material conflict among the classes and will take such action
as is reasonably necessary to eliminate any such conflicts that may develop.
DIFFERENCES BETWEEN CLASSES. The primary differences between Class A, Class
B and Class D shares are their sales load structures and ongoing expenses as set
forth below. The primary differences between Class B and Class D shares are that
Class D shares are subject to a shorter CDSL period and a lower CDSL rate but
Class B shares automatically convert to Class A shares after eight years,
resulting in a reduction in ongoing fees. Investors in Class B shares should
take into account whether they intend to redeem their shares within the CDSL
period and, if not, whether they intend to remain invested until the end of the
conversion period and thereby take advantage of the reduction in ongoing fees
resulting from the conversion to Class A shares. Other investors, however, may
elect to purchase Class D shares if they determine that it is advantageous to
have all their assets invested initially and they are uncertain as to the length
of time they intend to hold their assets in the Fund or another Seligman Mutual
Fund for which the exchange privilege is available. Although Class D
shareholders are subject to a shorter CDSL period at a lower rate, they forgo
the Class B automatic conversion feature, making their investment subject to
higher distribution fees for an indefinite period of time. Each class has
advantages and disadvantages for different investors, and investors should
choose the class that best suits their circumstances and their objectives.
ANNUAL 12B-1 FEES
INITIAL (AS A % OF AVERAGE
SALES LOAD DAILY NET ASSETS) OTHER INFORMATION
--------- -------------- ---------------
CLASS A Maximum initial Service fee of up to Initial sales load
sales load of 4.75% .25%. waived or reduced for
of the public certain purchases. CDSL
offering price. of 1% on redemptions
within 18 months of
purchase on shares on
which initial sales load
was waived in full due to
the size of the purchase.
CLASS B None Service fee of up to CDSL of:
.25%; Distribution 5% in 1st year
fee of .75% 4% in 2nd year
until Conversion.* 3% in 3rd and
4th years 2% in 5th year
1% in 6th year 0% after
6th year.
CLASS D None Service fee of up to CDSL of 1% on
.25%; Distribution redemptions within
fee of up to .75%. one year of
purchase.
* Conversion occurs at the end of the month which precedes the 8th anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to
the Class B shares acquired in the exchange will apply, and the holding period
of the shares exchanged will be tacked onto the holding period of the shares
acquired.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund is a series of Seligman Henderson Global Fund Series, Inc., an
open-end investment company incorporated under the laws of the state of Maryland
on November 22, 1991.
4
<PAGE>
The investment objective of the Fund is long-term capital appreciation. The
investment objective is a fundamental policy and may not be changed without
shareholder approval. The Fund seeks to achieve its objective by investing at
least 80% of its net assets in equity securities of non-United States companies
identified by the Subadviser as value companies at the time of purchase. There
can be no assurance that the Fund will achieve its investment objective.
The Subadviser believes there is opportunity to take advantage of pricing
inefficiencies in the international securities markets by utilizing a value
investment approach. The Subadviser will select securities for investment on a
bottom-up basis, i.e., emphasis is on first identifying specific value
attributes of companies, rather than on country allocation.
The factors used by the Subadviser to identify value companies may vary
slightly from country to country. However, one or more of the following key
attributes will typically characterize securities selected for the Fund's
portfolio: low price to book ratio, low price to earnings ratio, low price to
sales ratio, low price to cash flow, and/or above average dividend yield.
Comparisons may be made to companies in similar industries or their respective
local market. The Subadviser will also look for companies believed to possess a
potential catalyst for change (e.g., new management, a proposed restructuring
plan, or share buy back), which are expected by the Subadviser to have a
positive impact on the company's overall business operations and productivity.
The Subadviser may also consider, among other factors, evaluation of a company's
growth prospects, quality of management, and liquidity.
The Subadviser believes that, as in the United States, prices for value
securities and growth securities in the international markets move in different
cycles, independently of each other. Value cycles in different countries also
move independently from each other.
By investing in foreign securities, the Fund will attempt to take advantage
of differences among economic trends and the performance of securities markets
in various countries. To date, the market values of securities of issuers
located in different countries have moved relatively independently of each
other. During certain periods, the return on equity investments in some
countries has exceeded the return on similar investments in the United States.
The Subadviser believes that, in comparison with investment companies investing
solely in domestic securities, it may be possible to obtain significant
appreciation from a portfolio of foreign investments and securities from various
markets that offer different investment opportunities and are affected by
different economic trends. Global diversification reduces the effect events in
any one country will have on the Fund's entire investment portfolio. Of course,
a decline in the value of the Fund's investments in one country may offset
potential gains from investments in another country.
The Fund may invest in securities of issuers domiciled in any country. Under
normal conditions, investments will be made in three principal regions: The
United Kingdom/Continental Europe, the Pacific Basin and Latin America.
Continental European countries include Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, and Switzerland. Pacific Basin countries include
Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand,
Pakistan, the People's Republic of China, the Philippines, Singapore, Taiwan,
and Thailand. Latin American countries include Argentina, Brazil, Chile, Mexico,
and Venezuela.
Under normal conditions it is anticipated that at least five countries will
be represented in the Fund's portfolio. Investments will not normally be made in
securities of issuers organized in the United States and Canada, although under
exceptional conditions a large portion of the Fund's assets may temporarily be
invested in the United States.
Securities may be included in the Fund's portfolio without regard to minimum
capitalization of their issuers. The Fund will generally purchase securities of
medium- to large-sized companies in the principal international markets,
although it may purchase securities of companies that have a lower market
capitalization in smaller regional markets.
5
<PAGE>
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the U.S. dollar. The Fund will normally
invest its assets in equity securities, including common stock, preferred stock,
warrants or rights to subscribe to or purchase such securities, securities
convertible into or exchangeable for such securities, and sponsored or
unsponsored American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs") and Global Depositary Receipts ("GDRs"). The Fund may, however, invest
up to 20% of its assets in debt securities. Dividends or interest income are
considered only when the Subadviser believes that such income will favorably
influence the market value of a security in light of the Fund's objective of
long-term capital appreciation. Equity securities in which the Fund will invest
may be listed on a U.S. or foreign stock exchange or traded in U.S. or foreign
over-the-counter markets.
Debt securities in which the Fund may invest are not required to be rated by
a recognized rating agency. As a matter of policy, the Fund will invest only in
"investment grade" debt securities or, in the case of unrated securities, debt
securities that are, in the opinion of the Subadviser, of equivalent quality to
"investment grade" securities. "Investment grade" debt securities are rated
within the four highest rating categories as determined by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Rating Service ("S&P").
Securities rated within the highest of the four investment grade categories
(i.e., Aaa by Moody's and AAA by S&P) are judged to be of the best quality and
carry the smallest degree of risk. (Appendix A to the Statement of Additional
Information contains a description of these securities ratings.) Debt securities
are interest-rate sensitive; accordingly, their value tends to decrease when
interest rates rise and increase when interest rates fall.
As noted above, the Fund may invest in securities represented by ADRs, EDRs,
and GDRs (collectively, "Depositary Receipts"). ADRs are receipts generally
issued by a domestic bank or trust company that represent the deposit of a
security of a foreign issuer. ADRs may be publicly traded on exchanges or
over-the-counter in the United States and are quoted and settled in dollars at a
price that generally reflects the dollar equivalent of the home country share
price. EDRs and GDRs are receipts similar to ADRs and are typically issued by
foreign banks or trust companies and traded in Europe. Depositary Receipts may
be issued pursuant to sponsored or unsponsored programs. In sponsored programs,
the issuer has made arrangements to have its securities traded in the form of a
Depositary Receipt. In unsponsored programs, the issuer may not be directly
involved in the creation of the program. Although regulatory requirements with
respect to sponsored and unsponsored programs are generally similar, the issuers
of unsponsored Depositary Receipts are not obligated to disclose material
information in the United States and, therefore, the import of such information
may not be reflected in the market value of such securities. For purposes of the
Fund's investment policies, the Fund's investments in Depositary Receipts will
be deemed to be investments in the underlying securities.
RISK FACTORS. Investments in securities of foreign issuers may involve risks
that are not associated with domestic investments, and there can be no assurance
that the Fund's foreign investments will present less risk than a portfolio of
domestic securities. Foreign issuers may lack uniform accounting, auditing and
financial reporting standards, practices and requirements, and there is
generally less publicly available information about foreign issuers than there
is about U.S. issuers. Governmental regulation and supervision of foreign stock
exchanges, brokers and listed companies may be less pervasive than is customary
in the United States. Securities of some foreign issuers are less liquid, and
their prices are more volatile, than securities of comparable domestic issuers.
Foreign securities settlements may in some instances be subject to delays and
related administrative uncertainties which could result in temporary periods
when assets of the Fund are uninvested and no return is earned thereon and may
involve a risk of loss to the Fund. Foreign securities markets may have
substantially less volume, and far fewer traded issues, than U.S. markets. Fixed
brokerage commissions and transaction costs on foreign securities exchanges are
generally higher than in the United States. Income from foreign securities may
be reduced by a withholding tax at the source or other foreign taxes. In some
countries, there may also be the possibility of nationalization, expropriation
or confiscatory taxation (in which the Fund could lose its entire investment in
6
<PAGE>
a certain market), limitations on the removal of moneys or other assets of the
Fund, high rates of inflation, political or social instability or revolution, or
diplomatic developments that could affect investments in those countries. In
addition, it may be difficult to obtain and enforce a judgement in a court
outside the United States.
The Fund may invest in sovereign debt. The actions of governments concerning
their respective economies could have an important effect on their ability or
willingness to service their sovereign debt. Such actions could have significant
effects on market conditions and on the prices of securities and instruments
held by the Fund, including the securities and instruments of foreign private
issuers. Factors which may influence the ability or willingness of a foreign
sovereign to service its debt include, but are not limited to, the availability
of sufficient foreign exchange on the date a payment is due, the relative size
of its debt service burden compared to the economy as a whole, its balance of
payments (including export performance) and cash flow situation, its access to
international credits and investments, fluctuations in interest and currency
rates and reserves, and its government's policies towards the International
Monetary Fund, the World Bank and other international agencies. If a foreign
sovereign defaults on all or a portion of its foreign debt, the Fund may have
limited legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign sovereign debt securities to obtain recourse
will be subject to the political climate in the prevailing country.
Investments in foreign securities will usually be made in foreign
currencies, and the Fund may temporarily hold foreign currencies. The value of
Fund investments that are traded in foreign currencies may be affected,
favorably or unfavorably, by the relative strength of the U.S. dollar, changes
in foreign currency and U.S. dollar exchange rates and exchange control
regulations. The Fund may incur costs in connection with conversions between
various currencies. The Funds's net asset value per share will be affected by
changes in currency exchange rates. Changes in foreign currency exchange rates
may also affect the value of dividends and interest earned, gains and losses
realized on the sale of securities and net investment income and gains, if any,
to be distributed to shareholders by the Fund. The rate of exchange between the
U.S. dollar and other currencies is determined by the forces of supply and
demand in the foreign exchange markets (which in turn are affected by interest
rates, trade flows and numerous other factors) and, in some cases, exchange
controls. Currency hedging techniques may be unavailable in certain emerging
countries and the Fund will engage in only limited hedging activities in any
event. Furthermore, foreign investors are subject to many restrictions in
markets of emerging or developing countries. These restrictions may require,
among other things, governmental approval prior to making investments or
repatriating income or capital, or may impose limits on the amount or type of
securities held by foreigners or on the type of companies in which foreigners
may invest.
DERIVATIVES. The Fund may invest in financial instruments commonly known as
"derivatives" only for hedging or investment purposes. The Fund will not invest
in derivatives for speculative purposes, i.e., where the derivative investment
exposes the Fund to undue risk of loss, such as where the risk of loss is
greater than the cost of the investment.
A derivative is generally defined as an instrument whose value is derived
from, or based upon, some underlying index, reference rate (e.g., interest rates
or currency exchange rates), security, commodity or other asset. The Fund will
not invest in a specific type of derivative without prior approval from the
Corporation's Board of Directors, after consideration of, among other things,
how the derivative instrument serves the Fund's investment objective, and the
risk associated with the investment. The only types of derivatives in which the
Fund is currently permitted to invest are stock purchase rights and warrants,
and, as described more fully below, forward currency exchange contracts and put
options.
FORWARD CURRENCY EXCHANGE CONTRACTS. The Subadviser will consider changes in
exchange rates in making investment decisions. As one way of managing exchange
rate risk, the Fund may enter into forward currency exchange contracts
(agreements to purchase or sell foreign currencies at a future date). The Fund
will usually enter into these contracts to fix the U.S. dollar value of a
7
<PAGE>
security that it has agreed to buy or sell for the period between the date the
date the trade was entered into and the date the security is delivered and paid
for. The Fund may also use these contracts to hedge the U.S. dollar value of
securities it already owns.
Although the Fund will seek to benefit by using forward contracts,
anticipated currency movements may not be accurately predicted and the Fund may
therefore incur a gain or loss on a forward contract. A forward contract may
help reduce the Fund's losses on securities denominated in foreign currency, but
it may also reduce the potential gain on the securities depending on changes in
the currency's value relative to the U.S. dollar or other currencies.
OPTIONS TRANSACTIONS. The Fund may purchase put options on portfolio
securities in an attempt to hedge against a decrease in the price of a security
held by the Fund. The Fund will not purchase options for speculative purposes.
Purchasing a put option gives the Fund the right to sell, and obligates the
writer to buy, the underlying security at the exercise price at any time during
the option period.
When the Fund purchases an option, it is required to pay a premium to the
party writing the option and a commission to the broker selling the option. If
the option is exercised by the Fund, the premium and the commission paid may be
greater than the amount of the brokerage commission charged if the security were
to be purchased or sold directly. See "Investment Objective, Policies and Risks"
in the Statement of Additional Information.
BORROWING. The Fund may from time to time borrow money from banks for
temporary, extraordinary or emergency purposes and may invest the funds in
additional securities. Such borrowing will not exceed 10% of the Fund's total
assets and will be made at prevailing interest rates.
Investment gains realized with additional funds borrowed will generally
cause the net asset value of the Fund's 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 the Fund's shares could decrease
faster than if there had been no borrowings. Borrowing, when used in this
manner, is a speculative practice known as "leveraging."
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
commercial banks or broker/dealers under which the Fund acquires a U.S.
Government or a short-term money market instrument subject to resale at a
mutually agreed-upon price and time. The resale price reflects an agreed upon
interest rate effective for the period the Fund holds the instrument that is
unrelated to the interest rate on the instrument.
The Fund's repurchase agreements will at all times be fully collateralized,
and the Fund will make payment for such securities only upon physical delivery
or evidence of book entry transfer to the account of its custodian. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default of the seller, including possible delays and expenses in liquidating the
underlying security, decline in the value of the underlying security and loss of
interest.
ILLIQUID SECURITIES. The Fund 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, such as
repurchase agreements of more than one week's duration. The Fund may purchase
restricted securities that may be offered and sold only to "qualified
institutional buyers" under Rule 144A of the 1933 Act, and the Subadviser,
acting pursuant to procedures approved by the Corporation'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 Subadviser, 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 Rule 144A securities will further evolve.
This investment practice could have the effect of increasing the level of
illiquidity in the Fund to the extent that qualified institutional buyers become
for a time uninterested in purchasing Rule 144A securities.
8
<PAGE>
SHORT SALES. The Fund may sell securities short "against-the-box." A short
sale "against-the-box" is a short sale in which the Fund owns an equal amount of
the securities sold short or securities convertible into or exchangeable without
payment of further consideration for securities of the same issue as, and equal
in amount to, the securities sold short.
TEMPORARY INVESTMENTS. When the Subadviser believes that market conditions
warrant a temporary defensive position, the Fund may invest up to 100% of its
assets in short-term instruments such as commercial paper, bank certificates of
deposit, bankers' acceptances, or repurchase agreements for such securities and
securities of the U.S. Government and its agencies and instrumentalities, as
well as cash and cash equivalents denominated in foreign currencies. Investments
in domestic bank certificates of deposit and bankers' acceptances will be
limited to banks that have total assets in excess of $500 million and are
subject to regulatory supervision by the U.S. Government or state governments.
The Fund's investments in commercial paper of U.S. issuers will be limited to
(a) obligations rated Prime-1 by Moody's or A-1 by S&P or (b) unrated
obligations issued by companies having an outstanding unsecured debt issue
currently rated A or better by S&P. A description of various commercial paper
ratings and debt securities ratings appears in Appendix A to the Statement of
Additional Information. The Fund's investments in foreign short-term instruments
will be limited to those that, in the opinion of the Subadviser, equate
generally to the standards established for U.S. short-term instruments.
Except as noted above, the foregoing investment policies are not fundamental
and the Board of Directors of the Corporation may change such policies without
the vote of a majority of the Fund's outstanding voting securities. A more
detailed description of the Fund's investment policies, including a list of
those restrictions on the Fund's investment activities which cannot be changed
without such a vote, appears in the Statement of Additional Information. Under
the 1940 Act, a "vote of a majority of the outstanding voting securities" of the
Fund means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund or (2) 67% or more of the shares present at a
shareholders' meeting if more than 50% of the outstanding shares are represented
at the meeting in person or by proxy.
MANAGEMENT SERVICES
THE MANAGER. The Board of Directors provides broad supervision over the
affairs of the Fund. Pursuant to a Management Agreement between J. & W. Seligman
& Co. Incorporated and Seligman Henderson Global Fund Series, Inc., on behalf of
the Fund and the Corporation's other series, the Manager administers the
business and other affairs of the Fund. The address of the Manager is 100 Park
Avenue, New York, NY 10017.
The Manager also serves as manager of seventeen other investment companies
which, together with the Corporation, comprise the "Seligman Group." These
companies are: Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman High
Income Fund Series, Seligman Income Fund, Inc., Seligman Municipal Fund Series,
Inc., Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc.,
Seligman Pennsylvania Municipal Fund Series, Seligman Portfolios, Inc., Seligman
Quality Municipal Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman
Value Fund Series, Inc., and Tri-Continental Corporation. The aggregate assets
of the Seligman Group were approximately $ billion at August 31, 1997. The
Manager also provides investment management or advice to individual and
institutional accounts having an August 31, 1997 value of approximately $
billion.
Mr. William C. Morris is Chairman of the Manager and Chairman of the Board
and Chief Executive Officer of the Corporation. Mr. Morris owns a majority
of the outstanding voting securities of the Manager.
The Manager provides senior management for Seligman Data Corp., a
wholly-owned subsidiary of certain investment companies in the Seligman Group,
which performs, at cost, certain recordkeeping functions for the Fund, maintains
the records of shareholder accounts and furnishes dividend paying, redemption
and related services.
9
<PAGE>
The Manager is entitled to receive a management fee, calculated daily and
payable monthly, equal to an annual rate of 1.00% of the average daily net
assets of the Fund, of which .90% is paid to the Subadviser for services
described below. The management fee is higher than that of most domestic
investment companies but is comparable to that of most international and global
equity funds.
The Fund pays all of its expenses other than those assumed by the Manager or
the Subadviser, including fees for necessary professional and brokerage
services, costs of regulatory compliance, costs associated with maintaining
corporate existence, custody and shareholder service, shareholder relations and
insurance costs and fees and expenses of directors of the Corporation not
employed by (or serving as a Director of) the Manager or its affiliates.
THE SUBADVISER. Seligman Henderson Co. serves as Subadviser to the Fund
pursuant to a Subadvisory Agreement between the Manager and the Subadviser (the
"Subadvisory Agreement"). The Subadvisory Agreement provides that the Subadviser
will supervise and direct the Fund's investments in accordance with the Fund's
investment objective, policies and restrictions. The Subadviser was founded in
1991 as a joint venture between the Manager and Henderson International, Inc., a
controlled affiliate of Henderson plc. The Subadviser was created to provide
international and global investment management services to institutional and
individual investors and investment companies. The Subadviser also serves as
Subadviser to the other series of Seligman Henderson Global Fund Series, Inc.
(Seligman Henderson Emerging Markets Growth Fund, Seligman Henderson Global
Growth Opportunities Fund, Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, and Seligman Henderson Global
Technology Fund), Seligman Capital Fund, Inc., Seligman Common Stock Fund, Inc.,
Seligman Communications and Information Fund, Inc., Seligman Frontier Fund,
Inc., Seligman Growth Fund, Inc., Seligman Income Fund, Inc., the International,
Global Growth Opportunities, Global Smaller Companies and Global Technology
Portfolios of Seligman Portfolios, Inc., Seligman Value Fund Series, Inc., and
Tri-Continental Corporation. The address of the Subadviser is 100 Park Avenue,
New York, NY 10017.
PORTFOLIO MANAGER. Mr. Michael Moule has responsibility for directing and
overseeing the investments of the Fund.
Mr. Moule, a Director of Henderson plc, has 34 years of investment
experience. Mr. Moule has been a portfolio manager with Henderson plc since
1993, and is a member of its Group Strategy Committee. Prior to 1993, he was a
portfolio manager for 23 years with Touche Remnant, which was acquired by
Henderson plc in December 1992. Mr. Moule has been Portfolio Manager of Bankers
Investment Trust, a United Kingdom closed-end global value fund, since 1977.
The Manager's discussion of Fund performance as well as a line graph
illustrating comparative performance information between the Fund and
appropriate broad-based indices will be included in the Fund's next Annual
Report to shareholders.
PORTFOLIO TRANSACTIONS. The Management Agreement and Subadvisory Agreement
each recognize that in the purchase and sale of portfolio securities for the
Fund, 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. The use of brokers who provide investment and market
research and securities and economic analysis may result in a higher brokerage
charges to the Fund than the use of brokers selected on the basis of the most
favorable brokerage commission rates, and research and analysis received may be
useful to the Manager or the Subadviser in connection with its services to other
clients as well as to the Fund. In over-the-counter markets, orders are placed
with primary market makers unless a more favorable execution or price is
believed to be obtainable.
Consistent with the Rules of the National Association of Securities Dealers,
Inc., and subject to seeking the most favorable price and execution available
and such other
10
<PAGE>
policies as the Directors of the Corporation may determine, the Manager and
Subadviser may consider sales of shares of the Fund and, if permitted by
applicable laws, may consider sales of shares of the other Seligman Mutual Funds
as a factor in the selection of brokers or dealers to execute portfolio
transactions for the Fund.
PORTFOLIO TURNOVER. A change in securities held by the Fund is known as
"portfolio turnover" which may result in the payment by the Fund of dealer
spreads or underwriting commissions and other transactions costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
These costs may be higher for the types of securities in which the Fund shall
invest. Although it is the policy of the Fund to hold securities for investment,
changes in the securities held by the Fund will be made from time to time when
the Subadviser believes such changes will strengthen the Fund's portfolio. The
portfolio turnover of the Fund is not expected to exceed 100%.
PURCHASE OF SHARES
Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager,
acts as general distributor of the Fund's shares. Its address is 100 Park
Avenue, New York, NY 10017.
The Fund issues three classes of shares: Class A shares are sold to
investors choosing the initial sales load alternative; Class B shares are sold
to investors choosing to pay no initial sales load, a higher distribution fee
and a CDSL with respect to redemptions within six years of purchase and who
desire shares to convert automatically to Class A shares after eight years; and
Class D shares are sold to investors choosing no initial sales load, a higher
distribution fee and a CDSL on redemptions within one year of purchase. See
"Alternative Distribution System" above.
Shares of the Fund may be purchased through any authorized investment
dealer. All orders will be executed at the net asset value per share next
computed after receipt of the purchase order plus, in the case of Class A
shares, a sales load which, except for shares purchased under one of the reduced
sales load plans, will vary with the size of the purchase as shown in the
schedule under "Class A Shares -- Initial Sales Load" below.
THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE FUND IS $1,000; SUBSEQUENT
INVESTMENTS MUST BE IN THE MINIMUM AMOUNT OF $100 (EXCEPT FOR INVESTMENT OF
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS). THE FUND RESERVES THE RIGHT TO RETURN
INVESTMENTS THAT DO NOT SATISFY THESE MINIMUMS. EXCEPTIONS TO THESE MINIMUMS ARE
AVAILABLE FOR ACCOUNTS BEING ESTABLISHED CONCURRENTLY WITH THE INVEST-A-CHECK(R)
SERVICE. THE MINIMUM AMOUNT FOR INITIAL INVESTMENT IN THE SELIGMAN TIME
HORIZONSM ASSET ALLOCATION PROGRAM IS $10,000. FOR INFORMATION ABOUT THIS
PROGRAM, CONTACT YOUR FINANCIAL ADVISOR.
The minimum amount for initial investment in the Fund is $500 for investors
who purchase shares of the Fund through Merrill Lynch's MFA or MFA Select
programs.
No purchase order may be placed for Class B shares for an amount of $250,000
or more.
Orders received by an authorized dealer before the close of the New York
Stock Exchange ("NYSE") (normally, 4:00 p.m. Eastern time) and accepted by SFSI
before the close of business (5:00 p.m. Eastern time) on the same day will be
executed at the Fund's net asset value determined as of the close of the NYSE on
that day plus, in the case of Class A shares, any applicable sales load. Orders
accepted by dealers after the close of the NYSE, or received by SFSI after the
close of business, will be executed at the Fund's net asset value as next
determined plus, in the case of Class A shares, any applicable sales load. The
authorized dealer through which a shareholder purchases shares is responsible
for forwarding the order to SFSI promptly.
Payment for dealer purchases may be made by check or by wire. To wire
payments, dealer orders must first be placed through SFSI's order desk and
assigned a purchase confirmation number. Funds in payment of the purchase may
then be wired to Mellon Bank, N.A., ABA #043000261, A/C Seligman Henderson
International Value Fund (A, B or D), A/C #107-1011. WIRE TRANSFERS MUST INCLUDE
THE PURCHASE CONFIRMATION NUMBER AND CLIENT ACCOUNT REGISTRATION AND ACCOUNT
NUMBER. Persons other than dealers who wish to wire payment should contact
Seligman Data Corp. for specific wire instructions. Although the Fund
11
<PAGE>
makes no charge for this service, the transmitting bank may impose a wire
service fee.
Current shareholders may purchase additional shares of the Fund at any time
through any authorized dealer or by sending a check payable to "Seligman Group
of Funds," in our postage-paid return envelope or directly to P.O. BOX 3947, NEW
YORK, NY 10008-3947. Checks for investment must be in U.S. dollars drawn on a
domestic bank. Credit card convenience checks and third party checks (i.e.,
checks made payable to someone other than the "Seligman Group of Funds") may not
be used to open a new fund account or purchase additional shares of the Fund.
The check should be accompanied by an investment slip (provided on the bottom of
shareholder account statements or with periodic reports) and include the
shareholder's name, address, account number and class of shares (A, B or D). If
a shareholder does not provide the required information, Seligman Data Corp.
will seek further clarification and may be forced to return the check to the
shareholder. Orders sent directly to Seligman Data Corp. will be executed at the
Fund's net asset value next determined after the order is accepted plus, in the
case of Class A shares, any applicable sales load.
Seligman Data Corp. may charge a $10.00 service fee for checks returned to
it as uncollectable. This fee will be deducted from the shareholder's account.
For the protection of the Fund and its shareholders, no redemption proceeds will
be remitted to a shareholder with respect to shares purchased by check (unless
certified) until Seligman Data Corp. receives notice that the check has cleared,
which may be up to 15 days from the credit of the shares to the shareholder's
account.
VALUATION. The net asset value of the Fund's shares is determined each day,
Monday through Friday, as of the close of trading on the NYSE (normally, 4:00
p.m. Eastern time) on each day that the NYSE is open for business. Net asset
value is calculated separately for each class. Securities traded on a U.S. or
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
Corporation's Board of Directors. Short-term holdings maturing in 60 days or
less are generally valued at amortized cost if their original maturity was 60
days or less. Short-term holdings with more than 60 days remaining to maturity
will be valued at current market value until the 61st day prior to maturity, and
will then be valued on an amortized cost basis based on the value of such date
unless the Board determines that this amortized cost value does not represent
fair market value.
Although the legal rights of Class A, Class B and Class D shares are
substantially identical, the different expenses borne by each class will result
in different net asset values and dividends. The net asset value of Class B and
Class D shares will generally be lower than the net asset value of Class A
shares as a result of the higher distribution fees charged to Class B and Class
D shares. In addition, net asset value per share of the three classes will be
affected to the extent any other expenses differ among classes.
CLASS A SHARES--INITIAL SALES LOAD. Class A shares are subject to an initial
sales load which varies with the size of the purchase as shown in the following
schedule, and an annual service fee of up to .25% of the average daily net asset
value of Class A shares. See "Administration, Shareholder Services and
Distribution Plan" below.
- --------------------------------------------------------------------------------
CLASS A SHARES--SALES LOAD SCHEDULE
SALES LOAD AS A
PERCENTAGE OF REGULAR
------------------------- DEALER
NET AMOUNT DISCOUNT
INVESTED AS A % OF
OFFERING (NET ASSET OFFERING
AMOUNT OF PURCHASE PRICE VALUE) PRICE
----------------------------------------------------------- ----------
Less than $ 50,000 4.75% 4.99% 4.25%
$ 50,000- 99,999 4.00 4.17 3.50
100,000- 249,999 3.50 3.63 3.00
250,000- 499,999 2.50 2.56 2.25
500,000- 999,999 2.00 2.04 1.75
1,000,000- or more* 0 0 0
* Shares acquired at net asset value pursuant to the above schedule will be
subject to a CDSL of 1% if redeemed within 18 months of purchase. See
"Purchase of Shares--Contingent Deferred Sales Load."
- --------------------------------------------------------------------------------
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<PAGE>
There is no initial sales load on purchases of Class A shares of $1,000,000
or more ("NAV sales"); however, such shares are subject to a CDSL of 1% if
redeemed within eighteen months of purchase.
SFSI shall pay broker/dealers, from its own resources, a fee on NAV sales,
calculated as follows; 1.00% of NAV sales up to but not including $2 million;
.80% of NAV sales from $2 million up to but not including $3 million; .50% of
NAV sales from $3 million up to but not including $5 million; and .25% of NAV
sales from $5 million and above. The calculation of the fee will be based on
assets held by a "single person" as defined below.
SFSI shall also pay broker/dealers, from its own resources, a fee on assets
of certain investments in Class A shares of the Seligman Mutual Funds
participating in an "eligible employee benefit plan" (as defined below under
"Special Programs") that are attributable to the particular broker/dealer. The
shares eligible for the fee are those on which an initial sales load was not
paid because either the participating eligible employee benefit plan has at
least (i) $500,000 invested in the Seligman Mutual Funds or (ii) 50 eligible
employees to whom such plan is made available. Class A shares representing only
an initial purchase of Seligman Cash Management Fund are not eligible for the
fee. Such shares will become eligible for the fee once they are exchanged for
shares of another Seligman Mutual Fund. The payment is based on cumulative sales
during a single calendar year, or portion thereof. The payment schedule, for
each calendar year, is as follows: 1.00% of sales up to but not including $2
million; .80% of sales from $2 million up to but not including $3 million; .50%
of sales from $3 million up to but not including $5 million; and .25% of sales
from $5 million and above.
Through November 28, 1997, dealers will receive the full sales load schedule
in accordance with the sales load schedule for Class A shares of the Fund for
sales up to $1,000,000.
REDUCED SALES LOADS. 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 purchasing securities for their own
account, or a trustee or other fiduciary purchasing for a single fiduciary
account or single trust. Purchases made by a trustee or other fiduciary for a
fiduciary account may not be aggregated with purchases made on behalf of any
other fiduciary or individual account.
Shares purchased without an initial sales load in accordance with the sales
load schedule or pursuant to a Volume Discount, Right of Accumulation or Letter
of Intent are subject to a CDSL of 1% on redemptions within eighteen months of
purchase.
o VOLUME DISCOUNTS are provided if the total amount being invested in Class
A shares of the Fund alone, or in any combination of shares of the Seligman
Mutual Funds that are sold with an initial sales load, reaches levels indicated
in the above sales load schedule.
o THE RIGHT OF ACCUMULATION allows an investor to combine the amount being
invested in shares of the other Seligman Mutual Funds sold with an initial sales
load with the total net asset value of shares of those Seligman Mutual Funds
already owned that were sold with an initial sales load and the total net asset
value of shares of Seligman Cash Management Fund that were acquired by the
investor through an exchange of shares of another Seligman Mutual Fund on which
there was an initial sales load to determine reduced sales loads in accordance
with the sales load schedule. An investor or a dealer purchasing shares on
behalf of an investor must indicate whether the investor has existing accounts
when making investments or opening new accounts.
o A LETTER OF INTENT allows an investor to purchase Class A shares over a
13-month period at reduced initial sales loads, based upon the total amount of
shares the investor intends to purchase plus the total net asset value of shares
of the other Seligman Mutual Funds already owned that were sold with an initial
sales load and the total net asset value of shares of Seligman Cash Management
Fund that were acquired through an exchange of shares of another Seligman Mutual
Fund on which there was an initial sales load. An investor or a dealer
purchasing shares on behalf of an investor must indicate whether the investor
has existing accounts when making investments or opening new accounts. For more
information concerning terms of Letters of Intent, see "Terms and Conditions" on
page 28.
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<PAGE>
SPECIAL PROGRAMS. The Fund may sell Class A shares at net asset value to
present and retired directors, trustees, officers, employees and their spouses
(and family members of the foregoing) of the Fund, the other investment
companies in the Seligman Group, the Manager and other companies affiliated with
the Manager. Family members are defined to include lineal descendants and lineal
ancestors, siblings (and their spouses and children) and any company or
organization controlled by any of the forgoing. Such sales also may be made to
employee benefit 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.
Class A shares also may be issued without an initial sales load in
connection with the acquisition of cash and securities owned by other investment
companies and personal holding companies; to any registered unit investment
trust which is the issuer of periodic payment plan certificates, the net
proceeds of which are invested in Fund shares; 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; to shareholders of mutual funds with objectives and policies similar
to the Fund who purchase shares with redemption proceeds of such funds (not to
exceed the dollar value of such redemption proceeds); to financial institution
trust departments; to registered investment advisers exercising discretionary
investment authority with respect to the purchase of Fund shares; to accounts of
financial institutions or broker/dealers that charge account management fees,
provided the Manager or one of its affiliates has entered into an agreement with
respect to such accounts; pursuant to sponsored arrangements with organizations
which make recommendations to or permit group solicitations of, its employees,
members or participants in connection with the purchase of shares of the Fund;
to other investment companies in the Seligman Group in connection with a
deferred fee arrangement for outside directors; and to "eligible employee
benefit plans" which have at least (i) $500,000 invested in the Seligman Mutual
Funds or (ii) 50 eligible employees to whom such plan is made available.
"Eligible employee benefit plan" means any plan or arrangement, whether or not
tax qualified, which provides for the purchase of Fund shares. Sales of shares
to such plans must be made in connection with a payroll deduction system of plan
funding or other system acceptable to Seligman Data Corp.
Section 403(b) plans sponsored by public educational institutions are not
eligible for net asset value purchases based on the aggregate investment made by
the plan or number of eligible employees. Employee benefit plans eligible for
net asset value sales, as described above, will be subject to a CDSL of 1% for
terminations at the plan level only, on redemptions of shares purchased within
eighteen months prior to plan termination. Sales pursuant to a 401(k) alliance
program which has an agreement with SFSI are available at net asset value and
are not subject to a CDSL.
CLASS B SHARES. Class B shares are sold without an initial sales load but
are subject to a CDSL if the shares are redeemed within six years of purchase at
rates set forth in the table below, charged as a percentage of the current net
asset value or the original price, whichever is less.
YEARS SINCE PURCHASE CDSL
- -------------------- ----
less than 1 year ........................................................ 5%
1 year or more but less than 2 years .................................... 4%
2 years or more but less than 3 years ................................... 3%
3 years or more but less than 4 years ................................... 3%
4 years or more but less than 5 years ................................... 2%
5 years or more but less than 6 years ................................... 1%
6 years or more ......................................................... 0%
Class B shares are also subject to an annual distribution fee of .75% and an
annual service fee of up to .25% of the average daily net asset value of the
Class B shares. SFSI will make a 4% payment to dealers in respect of purchases
of Class B shares. Approximately eight years after purchase, Class B shares will
convert automatically to Class A shares, which are subject to an annual service
fee of .25% but no distribution fee. Shares purchased through reinvestment of
dividends and distributions on Class B shares also will convert
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<PAGE>
automatically to Class A shares along with the underlying shares on which they
were earned. Conversion occurs at the end of the month which precedes the eighth
anniversary of the purchase date. If Class B shares of the Fund are exchanged
for Class B shares of another Seligman Mutual Fund, the conversion period
applicable to the Class B shares acquired in the exchange will apply, and the
holding period of the shares exchanged will be tacked onto the holding period of
the shares acquired. Class B shareholders of the Fund exercising the exchange
privilege will continue to be subject to the Fund's CDSL schedule if such
schedule is higher or longer than the CDSL schedule relating to the new Class B
shares. In addition, Class B shares of the Fund acquired by exchange will be
subject to the Fund's CDSL schedule if such schedule is higher or longer than
the CDSL schedule relating to the Class B shares of the fund from which the
exchange has been made.
CLASS D SHARES. Class D shares are sold without an initial sales load but
are subject to a CDSL if the shares are redeemed within one year, an annual
distribution fee of up to .75% and an annual service fee of up to .25%, of the
average daily net asset value of the Class D shares. SFSI will make a 1% payment
to dealers in respect of purchases of Class D shares. Unlike Class B shares,
Class D shares do not automatically convert to Class A shares after eight years.
CONTINGENT DEFERRED SALES LOAD. A CDSL will be imposed on any redemption of
Class B or Class D shares which were purchased during the preceding six years
(for Class B shares) or twelve months (for Class D shares). The amount of any
CDSL will initially be used by SFSI to defray the expense of the payment of 4%
(in the case of Class B shares) or 1% (in the case of Class D shares) made by it
to Service Organizations (as defined under "Administration, Shareholder Services
and Distribution Plan") at the time of sale. Pursuant to an agreement with FEP
Capital, L.P. ("FEP") to fund payments in respect of Class B shares, SFSI has
agreed to sell any Class B CDSL to FEP.
A CDSL of 1% will also be imposed on any redemption of Class A shares
purchased during the preceding eighteen months if such shares were acquired at
net asset value pursuant to the sales load schedule provided under "Class A
Shares--Initial Sales Load." Employee benefit plans eligible for net asset sales
as described above under "Special Programs" may be subject to a CDSL of 1% for
terminations at the plan level only, on redemptions of shares purchased within
eighteen months prior to plan termination.
The 1% CDSL normally imposed on redemptions of certain Class A shares (i.e.,
those purchased during the preceding eighteen months at net asset value pursuant
to the sales load schedule provided under "Class A Shares--Initial Sales Load")
will be waived on shares that were purchased through Dean Witter Reynolds, Inc.
("Dean Witter") by certain Chilean institutional investors (i.e., pension plans,
insurance companies and mutual funds). Upon redemption of such shares within an
eighteen month period, Dean Witter will reimburse SFSI a pro rata portion of the
fee it received from SFSI at the time of sale of such shares.
To minimize the application of a CDSL to a redemption, shares acquired
pursuant to the investment of dividends and distributions (which are not subject
to a CDSL) will be redeemed first; followed by shares held for a period of time
longer than the applicable CDSL period. Shares held for the longest period of
time within the applicable period will then be redeemed. Additionally, for those
shares determined to be subject to a CDSL, the CDSL will be assessed on the
current net asset value or original purchase price, whichever is less. No CDSL
will be imposed on shares acquired through the investment of dividends or
distributions from any Class A, Class B or Class D shares of Seligman Mutual
Funds.
For example, assume an investor purchased 100 Class D shares in January at a
price of $10.00 per share. During the first year, 5 additional Class D shares
were acquired through investment of dividends and distributions. In January of
the following year, an additional 50 Class D shares were purchased at a price of
$12.00 per share. In March of that year, the investor chooses to redeem
$1,500.00 from the account which now holds 155 shares with a total value of
$1,898.75 ($12.25 per share). The CDSL for this transaction would be calculated
as follows:
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Total shares to be redeemed
(122.449 @ $12.25) as follows:................................ $1,500.00
=========
Dividend/Distribution shares (5 @ $12.25)....................... $ 61.25
Shares held more than 1 year
(100 @ $12.25)................................................ 1,225.00
Shares held less than 1 year subject to
CDSL (17.449 @ $12.25)........................................ 213.75
-----------
Gross proceeds of redemption.................................... $1,500.00
Less CDSL (17.449 shares @ $12.00 =
$209.39 x 1% = $2.09)......................................... (2.09)
-----------
Net proceeds of redemption...................................... $1,497.91
=========
For federal income tax purposes, the amount of the CDSL will reduce the gain
or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.
The CDSL will be waived or reduced in the following instances:
(a) on redemption following the death or disability of a shareholder, as
defined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended
(the "Code"); (b) in connection with (i) distributions from retirement plans
qualified under section 401(a) of the Code when such redemptions are necessary
to make distributions to plan participants (such payments include, but are not
limited to death, disability, retirement, or separation of service), (ii)
distributions from a custodial account under section 403(b)(7) of the Code or an
individual retirement account (an "IRA") due to death, disability, or attainment
of age 59 1/2, and (iii) a tax-free return of an excess contribution to an IRA;
(c) in whole or in part, in connection with shares sold to current and retired
Directors of the Fund; (d) in whole or in part, in connection with shares sold
to any state, county, or city or any instrumentality, department, authority, or
agency thereof, which is prohibited by applicable investment laws from paying a
sales load or commission in connection with the purchase of shares of any
registered investment management company; (e) pursuant to an automatic cash
withdrawal service; and (f) in connection with the redemption of shares of the
Fund if the Fund is combined with another mutual fund in the Seligman Group, or
another similar reorganization transaction.
If, with respect to a redemption of any Class A, Class B or Class D shares
sold by a dealer, the CDSL is waived because the redemption qualifies for a
waiver as set forth above, the dealer shall remit to SFSI promptly upon notice
an amount equal to the payment or a portion of the payment made by SFSI at the
time of sale of such shares.
SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the Seligman Mutual Funds. SFSI may from time to time pay a bonus or
other incentive to dealers that sell shares of the Seligman Mutual Funds. In
some instances, these bonuses or incentives may be offered only to certain
dealers which employ registered representatives who have sold or may sell a
significant amount of shares of the Fund and/or certain other mutual Funds
managed by the Manager during a specified period of time. Such bonus or other
incentive may take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered representatives
and members of their families to places within or outside the United States. The
cost to SFSI of such promotional activities and payments shall be consistent
with the Rules of the National Association of Securities Dealers, Inc. as then
in effect.
TELEPHONE TRANSACTIONS
A shareholder with telephone transaction privileges, AND THE SHAREHOLDER'S
BROKER/DEALER REPRESENTATIVE, will have the ability to effect the following
transactions via telephone: (i) redemption of Fund Shares, (ii) exchange of Fund
shares for shares of the same class of another Seligman Mutual Fund, (iii)
change of a dividend and/or capital gain distribution option, and (iv) change of
address. All telephone transactions are effected through Seligman Data Corp. at
(800) 221-2450.
For investors who purchase shares by completing and submitting an Account
Application (except those ac-
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<PAGE>
counts registered as trusts (unless the trustee and sole beneficiary are the
same person), corporations or group retirement plans): Unless an election is
made otherwise on the Account Application, a shareholder and the shareholder's
broker/dealer of record, as designated on the Account Application, will
automatically receive telephone services.
For investors who purchase shares through a broker/dealer: Telephone
services for a shareholder and the shareholder's representative may be elected
by completing a supplemental election application available from the
broker/dealer of record.
For accounts registered as IRAs: Telephone services will include only
exchanges or address changes.
For accounts registered as trusts (unless the trustee and sole beneficiary
are the same person), corporations or group retirement plans: Telephone
redemptions are not permitted. Group retirement plans that may allow plan
participants to place telephone exchanges directly with the Fund must first
provide a letter of authorization signed by the plan custodian or trustee and
provide a telephone services election form signed by each plan participant.
Additionally, group retirement plans are not permitted to change a dividend or
gain distribution option.
All Seligman Mutual Funds with the same account number (i.e., registered
exactly the same) as an existing account, including any new fund in which the
shareholder invests in the future, will automatically include telephone services
if the existing account has telephone services. Telephone services may also be
elected at any time on a supplemental telephone services election form.
For accounts registered jointly (such as joint tenancies, tenants in common
and community property registrations), each owner, by accepting or requesting
telephone services, authorizes each of the other owners to effect telephone
transactions on his or her behalf.
During times of drastic economic or market changes, a shareholder or the
shareholder's representative may experience difficulty in contacting Seligman
Data Corp. to request a redemption or exchange of Fund shares via telephone. In
these circumstances, the shareholder or the shareholder's representative should
consider using other redemption or exchange procedures. (See "Redemption of
Shares" below.) Use of these other redemption or exchange procedures may result
in the request being processed at a later time than if a telephone transaction
had been used, and the Fund's net asset value may fluctuate during such periods.
The Fund and Seligman Data Corp. will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These will
include: recording all telephone calls requesting account activity, requiring
that the caller provide certain requested personal and/or account information at
the time of the call for the purpose of establishing the caller's identity, and
sending a written confirmation of redemptions, exchanges or address changes to
the address of record each time activity is initiated by telephone. As long as
the Fund and Seligman Data Corp. follow instructions communicated by telephone
that were reasonably believed to be genuine at the time of their receipt,
neither they nor any of their affiliates will be liable for any loss to the
shareholder caused by an unauthorized transaction. In any instance where the
Fund or Seligman Data Corp. is not reasonably satisfied that instructions
received by telephone are genuine, the requested transaction will not be
executed, and neither they nor any of their affiliates will be liable for any
losses which may occur due to a delay in implementing the transaction. If the
Fund or Seligman Data Corp. does not follow the procedures described above, the
Fund or Seligman Data Corp. may be liable for any losses due to unauthorized or
fraudulent instructions. Telephone transactions must be effected through a
representative of Seligman Data Corp., i.e., requests may not be communicated
via Seligman Data Corp.'s automated telephone answering system. Shareholders, of
course, may refuse or cancel telephone services. Telephone services may be
terminated by a shareholder at any time by sending a written request to Seligman
Data Corp. TELEPHONE SERVICES MAY NOT BE ESTABLISHED BY A SHAREHOLDER'S
BROKER/DEALER WITHOUT THE WRITTEN AUTHORIZATION OF THE SHAREHOLDER. Written
acknowledgment of the addition of telephone services to an existing account or
termination of telephone services will be sent to the shareholder at the address
of record.
17
<PAGE>
REDEMPTION OF SHARES
A shareholder may redeem shares held in book credit ("uncertificated") form
without charge (except a CDSL, if applicable) at any time by SENDING A WRITTEN
REQUEST to Seligman Data Corp., P.O. Box 3947, New York, NY 10008-3947; or if
request is being sent by overnight delivery service, to 100 Park Avenue, New
York, NY 10017. The redemption request must be signed by all persons in whose
name the shares are registered. A shareholder may redeem shares that are not in
book credit form without charge (except a CDSL, if applicable) by surrendering
certificates in proper form to the same address. Certificates should be sent by
registered mail. Share certificates must be endorsed for transfer or accompanied
by an endorsed stock power signed by all share owners exactly as their name(s)
appear(s) on the account registration. The shareholder's letter of instruction
or endorsed stock power should specify the Fund name, account number, class of
shares (A, B or D) and the number of shares or dollar amount to be redeemed. The
Fund cannot accept conditional redemption requests (i.e., requests to sell
shares at a specific price or on a future date).
If the redemption proceeds are (i) $50,000 or more, (ii) to be paid to
someone other than the shareholder of record (regardless of the amount) or (iii)
to be mailed to other than the address of record, (regardless of the amount),
the signature(s) of the shareholder(s) must be guaranteed by an eligible
financial institution including, but not limited to, the following: banks, trust
companies, credit unions, securities brokers and dealers, savings and loan
associations and participants in the Securities Transfer Association Medallion
Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York
Stock Exchange Medallion Signature Program (MSP). The Fund reserves the right to
reject a signature guarantee where it is believed that the Fund will be placed
at risk by accepting such guarantee. A signature guarantee is also necessary in
order to change the account registration. Notarization by a notary public is not
an acceptable signature guarantee. ADDITIONAL DOCUMENTATION MAY ALSO BE REQUIRED
BY SELIGMAN DATA CORP. IN THE EVENT OF A REDEMPTION BY A CORPORATION, EXECUTOR,
ADMINISTRATOR, TRUSTEE, CUSTODIAN OR RETIREMENT PLAN. FOR FURTHER INFORMATION
WITH RESPECT TO REDEMPTION REQUIREMENTS, PLEASE CONTACT THE SHAREHOLDER SERVICES
DEPARTMENT OF SELIGMAN DATA CORP. FOR ASSISTANCE.
In the case of Class A shares (except for shares purchased without an
initial sales load due to the size of the purchase), and in the case of Class B
shares redeemed after six years and Class D shares redeemed after one year, a
shareholder will receive the net asset value per share next determined after
receipt of a request in good order. If Class A shares which were purchased
without an initial sales load because the purchase amount was $1,000,000 or more
are redeemed within eighteen months of purchase, a shareholder will receive the
net asset value per share next determined after receipt of a request in good
order, less a CDSL of 1% described under "Purchase of Shares--Class A
Shares--Initial Sales Load" above. If Class B shares are redeemed within six
yearS of purchase, a shareholder will receive the net asset value per share next
determined after receipt of a request in good order less the applicable CDSL as
described under "Purchase of Shares--Class B Shares" above. If Class D shares
are redeemed within one year of purchase, a shareholder will receive the net
asset value per share next determined after receipt of a request in good order,
less a CDSL of 1% as described under "Purchase of Shares--Class D Shares" above.
A shareholder also may "sell" shares to the Fund through an investment
dealer and, in that way, be certain, providing the order is timely, of receiving
the net asset value established at the end of the day on which the dealer is
given the repurchase order (less any applicable CDSL). The Fund makes no charge
for this transaction, but the dealer may charge a service fee. "Sell" or
repurchase orders received from an authorized dealer before the close of the
NYSE and received by SFSI, the repurchase agent, before the close of business on
the same day will be executed at the net asset value per share determined as of
the close of the NYSE on that day, less any applicable CDSL. Repurchase orders
received from authorized dealers after the close of the NYSE or not received by
SFSI prior to the close of business, will be executed at the net asset value
determined as of the close of the NYSE on the next trading day, less any
applicable CDSL. Shares held
18
<PAGE>
in a "street name" account with a broker/dealer may be sold to the Fund only
through a broker/dealer.
TELEPHONE REDEMPTIONS. Telephone redemptions of uncertificated shares
payable to the address of record may be made, once per day, in an amount of up
to $50,000 per fund account. Telephone redemption requests received by Seligman
Data Corp. at (800) 221-2450 between 8:30 a.m. and 4:00 p.m. Eastern time on any
business day will be processed as of the close of business on that day.
Redemption requests by telephone will not be accepted within 30 days following
an address change. Qualified Plans, IRAs or other retirement plans are not
eligible for telephone redemptions. The Fund reserves the right to suspend or
terminate its telephone redemption service at any time without notice.
For more information about telephone redemptions, and the circumstances
under which a shareholder may bear the risk of loss for a fraudulent
transaction, see "Telephone Transactions" above.
GENERAL. With respect to shares redeemed, a check for the proceeds will be
sent to the shareholder's address of record within seven calendar days after
acceptance of the redemption order and will be made payable to all of the
registered owners on the account. With respect to shares repurchased by the
Fund, a check for the proceeds will be sent to the investment dealer within
seven calender days after acceptance of the repurchase order and will be made
payable to the investment dealer. Payment of redemption proceeds will be delayed
on redemptions of shares purchased by check (unless certified) until Seligman
Data Corp. receives notice that the check has cleared, which may be up to 15
days from the credit of the shares to the shareholder's account. The proceeds of
a redemption or repurchase may be more or less than the shareholder's cost.
The Fund reserves the right to redeem shares owned by a shareholder whose
investment in the Fund has a value of less than a minimum amount specified by
the Corporation's Board of Directors, which is presently $500. Shareholders
would be sent a notice before such redemption is processed stating that the
value of their investment in the Fund is less than the specified minimum and
that they have sixty days to make an additional investment.
REINSTATEMENT PRIVILEGE. If a shareholder redeems Class A Shares and then
decides to reinvest them, or to shift the investment to one of the other
Seligman Mutual Funds, a shareholder may, within 120 calendar days of the date
of the redemption, use all or any part of the proceeds of the redemption to
reinstate, free of an initial sales load, all or any part of the investment in
Class A shares of the Fund or of any of the other Seligman Mutual Funds. If a
shareholder redeems shares and the redemption was subject to a CDSL, the
shareholder may reinstate all or any part of the investment in shares of the
same class of the Fund or of any of the other Seligman Mutual Funds within 120
calendar days of the date of redemption and receive a credit for the applicable
CDSL paid. Such investment will be reinstated at the net asset value per share
established as of the close of the NYSE on the day the request is received.
Seligman Data Corp. must be informed that the purchase represents a reinstated
investment. REINSTATED SHARES MUST BE REGISTERED EXACTLY AND BE OF THE SAME
CLASS AS THE SHARES PREVIOUSLY REDEEMED; AND THE MINIMUM INITIAL INVESTMENT
AMOUNT MUST BE MET AT THE TIME OF REINSTATEMENT.
Generally, exercise of the Reinstatement Privilege does not alter the
federal income tax status of any capital gain realized on a sale of Fund shares,
but to the extent that any shares are sold at a loss and the proceeds are
reinvested in shares of the same fund, some or all of the loss will not be
allowed as a deduction, depending upon the percentage of the proceeds
reinvested.
ADMINISTRATION, SHAREHOLDER SERVICES
AND DISTRIBUTION PLAN
Under the Fund's Administration, Shareholder Services and Distribution Plan
(the "Plan"), the Fund may pay to SFSI an administration, shareholder services
and distribution fee in respect of the Fund's Class A, Class B and Class D
shares. Payments under the Plan may include, but are not limited to: (i)
compensation to se-
19
<PAGE>
curities dealers and other organizations ("Service Organizations") for providing
distribution assistance with respect to assets invested in the Fund, (ii)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to Fund shareholders, and (iii)
otherwise promoting the sale of shares of the Fund, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying SFSI's costs incurred in connection with its marketing
efforts with respect to shares of the Fund. The Manager, in its sole discretion,
may also make similar payments to SFSI from its own resources, which may include
the management fee that the Manager receives from the Fund.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of Class A shares. It is expected that the proceeds from the fee in
respect of Class A shares will be used primarily to compensate Service
Organizations which enter into agreements with SFSI. Such Service Organizations
will receive from SFSI a continuing fee of up to .25% on an annual basis,
payable quarterly, of the average daily net assets of Class A shares
attributable to the particular Service Organization for providing personal
service and/or the maintenance of shareholder accounts. The fee payable from
time to time is, within such limit, determined by the Directors of the
Corporation.
Under the Plan, the Fund reimburses SFSI for its expenses with respect to
Class B and Class D shares at an annual rate of up to 1% of the respective
average daily net asset value of the Class B and Class D shares. Proceeds from
the Class B distribution fees are used to pay Service Organizations a continuing
fee of up to .25% on an annual basis of the average daily net asset value of
Class B shares attributable to particular Service Organizations for providing
personal service and/or the maintenance of shareholder accounts and will also be
used by SFSI to defray the expense of the payment of 4% made by it to Service
Organizations at the time of the sale of Class B shares. Proceeds from the Class
D distribution fees are used primarily to compensate service organizations for
administration, shareholder services and distribution assistance (including a
continuing fee of up to .25% on an annual basis of the average daily net asset
value of Class D shares attributable to particular service organizations for
providing personal service and/or maintenance of shareholder accounts) and will
initially be used by SFSI to defray the expense of the payment of 1% made by it
to service organizations at the time of sale of Class D shares. The amounts
expended by SFSI in any one year upon the initial purchase of Class B and Class
D shares may exceed the amounts received by it from Plan payments retained.
Expenses of administration, shareholder services and distribution of Class B and
Class D shares in one fiscal year may be paid from Class B and Class D Plan
fees, respectively, received in any other fiscal year. The Plan will be reviewed
by the Directors annually.
Seligman Services, Inc. ("SSI"), an affiliate of the Manager, is a limited
purpose broker/dealer. SSI acts as broker/dealer of record for most shareholder
accounts that do not have a designated broker/dealer of record and will receive
compensation for providing personal service and account maintenance to such
accounts of record.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset value
any part or all of an investment in the Fund for shares of any of the other
Seligman Mutual Funds. Exchanges may be made by mail, or by telephone if the
shareholder has telephone services.
Class A, Class B and Class D shares may be exchanged only for Class A, Class
B and Class D shares, respectively, of another Seligman Mutual Fund on the basis
of relative net asset value.
If shares that are subject to a CDSL are exchanged for shares of another
Seligman Mutual Fund, then for purposes of assessing the CDSL payable upon
disposition of the exchanged shares, the applicable holding period shall be
reduced by the holding period of the original shares.
Class B shareholders of the Fund exercising the exchange privilege will
continue to be subject to the Fund's CDSL schedule if such schedule is higher or
longer than the CDSL schedule relating to the new Class B shares. In addition,
Class B shares of the Fund acquired by
20
<PAGE>
exchange will be subject to the Fund's CDSL schedule if such schedule is higher
or longer than the CDSL schedule relating to the Class B shares of the fund from
which such shares were exchanged.
The Seligman Mutual Funds available under the Exchange Privilege are:
O SELIGMAN CAPITAL FUND, INC. seeks aggressive capital appreciation. Current
income is not an objective.
O SELIGMAN CASH MANAGEMENT FUND, INC. invests in high-quality money market
instruments. Shares are sold at net asset value.
O SELIGMAN COMMON STOCK FUND, INC. seeks favorable current income and
long-term growth of both income and capital value without exposing capital to
undue risk.
O SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC. invests in shares of
companies in the communications, information and related industries to produce
capital gain. Income is not an objective.
O SELIGMAN FRONTIER FUND, INC. seeks to produce growth in capital value;
income may be considered but will only be incidental to the fund's investment
objective.
O SELIGMAN GROWTH FUND, INC. seeks longer-term growth in capital value and
an increase in future income.
O SELIGMAN HENDERSON GLOBAL FUND SERIES, INC. consists of the Fund, the
Seligman Henderson Emerging Markets Growth Fund, the Seligman Henderson Global
Growth Opportunities Fund, the Seligman Henderson Global Smaller Companies Fund,
the Seligman Henderson Global Technology Fund and the Seligman Henderson
International Fund, which seek long-term capital appreciation, primarily by
investing in companies either globally or internationally.
O SELIGMAN HIGH INCOME FUND SERIES seeks high current income by investing in
debt securities. The Fund consists of the Seligman U.S. Government Securities
Series and the Seligman High-Yield Bond Series.
O SELIGMAN INCOME FUND, INC. seeks high current income and the possibility
of improvement of future income and capital value.
O SELIGMAN MUNICIPAL FUND SERIES, INC. consists of several State Series and
a National Series. The National Municipal Series seeks to provide maximum income
exempt from regular Federal income taxes; individual state series, each seeking
to maximize income exempt from regular Federal income taxes and from personal
income taxes in designated states, are available for Colorado, Georgia,
Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New York,
Ohio, Oregon and South Carolina. (Does not currently offer Class B shares.)
O SELIGMAN MUNICIPAL SERIES TRUST includes the Seligman California Municipal
Quality Series, the Seligman California Municipal High-Yield Series, the
Seligman Florida Municipal Series and the Seligman North Carolina Municipal
Series, each of which invests in municipal securities of its designated state.
(Does not currently offer Class B shares.)
O SELIGMAN NEW JERSEY MUNICIPAL FUND, INC. invests in investment grade New
Jersey municipal securities. (Does not currently offer Class B shares.)
O SELIGMAN PENNSYLVANIA MUNICIPAL FUND SERIES invests in investment grade
Pennsylvania municipal securities. (Does not currently offer Class B shares.)
O SELIGMAN VALUE FUND SERIES, INC. consists of the Seligman Large-Cap Value
Fund and the Seligman Small-Cap Value Fund, each of which seeks long-term
capital appreciation by investing in equity securities of value companies
primarily located in the United States.
All permitted exchanges will be based on the net asset values of the
respective funds determined at the close of the NYSE on that day. Telephone
requests for exchanges received between 8:30 a.m. and 4:00 p.m. Eastern time, on
any business day, by Seligman Data Corp. at (800) 221-2450, will be processed as
of the close of business on that day. The registration of an account into which
an exchange is made must be identical to the registration of the account from
which shares are exchanged. When establishing a new account by an exchange of
shares, the shares being exchanged must have a value of at least the minimum
initial investment required by the mutual fund into which the exchange is being
made. The method of receiving
21
<PAGE>
distributions, unless otherwise indicated, will be carried over to the new fund
account, as will telephone services. Account services, such as Invest-A-Check(R)
Service, DirecteD Dividends and Automatic Cash Withdrawal Service will not be
carried over to the new fund account unless specifically requested and permitted
by the new fund. Exchange orders may be placed to effect an exchange of a
specific number of shares, an exchange of shares equal to a specific dollar
amount or an exchange of all shares held. Shares for which certificates have
been issued may not be exchanged via telephone and may be exchanged only upon
receipt of an exchange request together with certificates representing shares to
be exchanged in proper form.
The Exchange Privilege via mail is generally applicable to investments in
group retirement plans, although some restrictions may apply. The terms of the
exchange offer described herein may be modified at any time; and not all of the
mutual funds in the Seligman Group are available to residents of all states.
Before making any exchange, a shareholder should contact an authorized
investment dealer or Seligman Data Corp. to obtain prospectuses of any of the
Seligman Mutual Funds.
A broker/dealer representative of record will be able to effect exchanges on
behalf of a shareholder only if the shareholder has telephone services or the
broker/dealer has entered into a Telephone Exchange Agreement with SFSI wherein
the broker/dealer must agree to indemnify SFSI and the Seligman Mutual Funds
from any loss or liability incurred as a result of the acceptance of telephone
exchange orders.
Written confirmation of all exchanges will be forwarded to the shareholder
to whom the exchanged shares are registered and a duplicate confirmation will be
sent to the broker/dealer of record listed on the account. SFSI reserves the
right to reject any telephone exchange request. Any rejected telephone exchange
order may be processed by mail. For more information about telephone exchange
privileges, which unless objected to, are assigned to most shareholders
automatically, and the circumstances under which shareholders may bear the risk
of loss for a fraudulent transaction, see "Telephone Transactions" above.
Exchanges of shares are sales, and may result in a gain or loss for federal
income tax purposes.
FURTHER INFORMATION ABOUT TRANSACTIONS IN THE FUND
Because excessive trading (including short-term, "market timing" trading)
can hurt the Fund's performance, the Fund may refuse any exchange (1) from any
shareholder account from which there have been two exchanges in the preceding
three month period, or (2) where the exchanged shares equal in value the lesser
of $1,000,000 or 1% of the Fund's net assets. The Fund may also refuse any
exchange or purchase order from any shareholder account if the shareholder or
the shareholder's broker/dealer has been advised that previous patterns of
purchases and redemptions or exchanges have been considered excessive. Accounts
under common ownership or control, including those with the same taxpayer ID
number and those administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered one account for this
purpose. Additionally, the Fund reserves the right to refuse any order for the
purchase of shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends payable from the Fund's net investment income are distributed to
shareholders in December. Payments vary in amount depending on income received
from portfolio securities and the cost of operations. The Fund intends to
distribute substantially all of any taxable net long-term and short-term gain
realized on investments to shareholders at least annually. Such distributions
will generally be taxable to shareholders in the year in which they are declared
by the Fund if paid before February 1 of the following year.
Shareholders may elect (1) to receive both dividends and gain distributions
in shares; (2) to receive dividends in cash and gain distributions in shares; or
(3) to receive both dividends and gain distributions in cash. Cash dividends and
gain distributions are paid by check. In the case of prototype retirement plans,
dividends and gain distributions are reinvested in additional shares.
22
<PAGE>
Unless another election is made, dividends and capital gain distributions will
be credited to shareholder accounts in additional shares. Shares acquired
through a dividend or gain distribution and credited to a shareholder's account
are not subject to an initial sales load or a CDSL. Dividends and gain
distributions paid in shares are invested on the payable date using the net
asset value of the ex-dividend date. Shareholders may elect to change their
dividend and gain distribution options by writing Seligman Data Corp. at the
address listed below. If the shareholder has telephone services, changes may
also be telephoned to Seligman Data Corp. between 8:30 a.m. and 6:00 p.m.
Eastern time, by either the shareholder or the broker/dealer of record on the
account. For information about telephone services, see "Telephone Transactions."
These elections must be received by Seligman Data Corp. before the record date
for the dividend or distribution in order to be effective for such dividend or
distribution.
The per share dividends from net investment income on Class B and Class D
shares will be lower than the per share dividends on Class A shares as a result
of the higher distribution fees applicable with respect to Class B and Class D
shares. Per share dividends of the three classes may also differ as a result of
differing class expenses. Distributions of net capital gains, if any, will be
paid in the same amount for Class A, Class B and Class D shares. See "Purchase
of Shares--Valuation."
Shareholders exchanging shares of one fund for shares of another Seligman
Mutual Fund will continue to receive dividends and gains as elected prior to
such exchange unless otherwise specified. In the event that a shareholder
redeems, transfers, or exchanges all shares in an account between the record
date and the payable date, the value of dividends or gain distributions declared
will be paid in cash regardless of the existing election.
FEDERAL INCOME TAXES
The Fund intends to qualify as a regulated investment company under the
Code. For each year so qualified, the Fund will not be subject to federal income
taxes on its net investment income and capital gains, if any, realized during
any taxable year, which it distributes to its shareholders, provided that at
least 90% of its net investment income and net short-term capital gains are
distributed to shareholders each year.
Dividends from net investment income and distributions from net short-term
capital gains are taxable as ordinary income to the shareholders, whether
received in cash or reinvested in additional shares, and, to the extent
designated as derived from the Fund's dividend income that would be eligible for
the dividends received deduction if the Fund were not a regulated investment
company, they are eligible, subject to certain restrictions, for the 70%
dividends received deduction for corporations.
Distributions of net capital gains, i.e., the excess of net long-term
capital gains over any net short-term losses, are taxable as long-term capital
gain, whether received in cash or invested in additional shares, regardless of
how long shares have been held by the shareholders; such distributions are not
eligible for the dividends received deduction allowed to corporate shareholders.
Any gain or loss realized upon a sale or redemption of shares in the Fund by
a shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. However, if shares on
which a long-term capital gain distribution has been received are subsequently
sold or redeemed and such shares have been held for six months or less, any loss
realized will be treated as long-term capital loss to the extent that it offsets
the long-term capital gain distribution. In addition, no loss will be allowed on
the sale or other disposition of shares of the Fund if, within a period
beginning 30 days before the date of such sale or disposition and ending 30 days
after such date, the holder acquires (such as through dividend reinvestment)
securities that are substantially identical to the shares of the Fund.
In determining gain or loss on shares of the Fund that are sold or exchanged
within 90 days after acquisition, a shareholder generally will not be permitted
to include in the tax basis attributable to such shares the sales load incurred
in acquiring such shares to the extent of any subsequent reduction of the sales
load by reason
23
<PAGE>
of the Exchange or Reinstatement Privilege offered by the Fund. Any sales load
not taken into account in determining the tax basis of shares sold or exchanged
within 90 days after acquisition will be added to the shareholder's tax basis in
the shares acquired pursuant to the Exchange or Reinstatement Privilege.
The Fund will generally be subject to an excise tax of 4% on the amount of
any income or capital gains, above certain permitted levels, distributed to
shareholders on a basis such that such income or gain is not taxable to
shareholders in the calendar year in which it was earned by the Fund.
Furthermore, dividends declared in October, November or December payable to
shareholders of record on a specified date in such a month and paid in the
following January will be treated as having been paid by the Fund and received
by each shareholder in December. Under this rule, therefore, shareholders may be
taxed in one year on dividends or distributions actually received in January of
the following year.
Portions of the Fund's investment income may be subject to foreign income
taxes withheld at source. The Fund intends to operate so as to meet the
requirements of the Code to enable it, subject to certain limitations imposed by
the Code, to "pass through" to its shareholders credit for foreign taxes paid,
but there can be no assurance that the Fund will be able to do so. See "Taxes"
in the Statement of Additional Information.
If the Fund purchases shares in certain foreign investment entities,
referred to as "passive foreign investment companies," the Fund 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
the Fund as a dividend to its shareholders. If the Fund were able and elected to
treat a passive foreign investment company as a "qualified electing fund," in
lieu of the treatment described above, the Fund would be required each year to
include in income, and distribute to shareholders in accordance with the
distribution requirements set forth above, the Fund's pro rata share of the
ordinary earnings and net capital gains of the company, whether or not
distributed to the Fund.
Shareholders are urged to consult their tax advisors concerning the effect
of federal income taxes in their individual circumstances.
UNLESS A SHAREHOLDER INCLUDES A CERTIFIED TAXPAYER IDENTIFICATION NUMBER
(SOCIAL SECURITY NUMBER FOR INDIVIDUALS) ON THE ACCOUNT APPLICATION AND
CERTIFIES THAT THE SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING, THE
CORPORATION IS REQUIRED TO WITHHOLD AND REMIT TO THE U.S. TREASURY A PORTION OF
DISTRIBUTIONS AND OTHER REPORTABLE PAYMENTS TO THE SHAREHOLDER. THE RATE OF
BACKUP WITHHOLDING IS 31%. SHAREHOLDERS SHOULD BE AWARE THAT, UNDER REGULATIONS
PROMULGATED BY THE INTERNAL REVENUE SERVICE, THE CORPORATION MAY BE FINED $50
ANNUALLY FOR EACH ACCOUNT FOR WHICH A CERTIFIED TAXPAYER IDENTIFICATION NUMBER
IS NOT PROVIDED. IN THE EVENT THAT SUCH A FINE IS IMPOSED, THE FUND MAY CHARGE A
SERVICE FEE OF UP TO $50 THAT MAY BE DEDUCTED FROM THE SHAREHOLDER'S ACCOUNT AND
OFFSET AGAINST ANY UNDISTRIBUTED DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. THE
FUND ALSO RESERVES THE RIGHT TO CLOSE ANY ACCOUNT WHICH DOES NOT HAVE A
CERTIFIED TAXPAYER IDENTIFICATION NUMBER.
SHAREHOLDER INFORMATION
Shareholders will be sent reports semi-annually regarding the Fund. General
information about the Fund may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, New York, NY 10017 or by telephoning the
Corporate Communications/Investor Relations Department toll-free at (800)
221-7844 from all continental United States, except New York or (212) 850-1864
in New York State and the Greater New York City area. Information about
shareholder accounts may be requested by writing Shareholder Services, Seligman
Data Corp. at the same address or by toll-free telephone by dialing (800)
221-2450 from all continental United States or (212) 682-7600 outside the
continental United States. Seligman Data Corp. may be telephoned Monday through
Friday (except holidays), between the hours of 8:30 a.m. and 6:00 p.m. Eastern
time, and calls will be answered by a service representative.
24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, YIELD, ACCOUNT BALANCE,
MOST
24
<PAGE>
RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT STATEMENTS, FORM
1099-DIV AND CHECKBOOKS CAN BE ORDERED. TO INSURE PROMPT DELIVERY OF CHECKS,
ACCOUNT STATEMENTS AND OTHER INFORMATION, SELIGMAN DATA CORP. SHOULD BE NOTIFIED
IMMEDIATELY IN WRITING OF ANY ADDRESS CHANGE. ADDRESS CHANGES MAY BE TELEPHONED
TO SELIGMAN DATA CORP. IF THE SHAREHOLDER HAS TELEPHONE SERVICES. FOR MORE
INFORMATION ABOUT TELEPHONE SERVICES, SEE "TELEPHONE TRANSACTIONS" ABOVE.
ACCOUNT SERVICES. Shareholders are sent confirmation of financial
transactions in their account.
Other investor services are available. These include:
O INVEST-A-CHECK(R) SERVICE enables a shareholder to authorize additional
purchases of shares automatically by electronic funds transfer from thE
shareholder's savings or checking account, if the bank that maintains the
account is a member of the Automated Clearing House ("ACH"), or by preauthorized
checks to be drawn on the shareholder's checking account at regular monthly
intervals in fixed amounts of $100 or more per fund, or regular quarterly
intervals in fixed amounts of $250 or more per fund, to purchase shares.
Accounts may be established concurrently with the Invest-A-Check(R) Service only
iF accompanied by a $100 minimum in conjunction with the monthly investment
option, or a $250 minimum in conjunction with the quarterly investment option.
For investments into the Seligman Time Horizon MatrixSM Asset Allocation
Program, the minimum amount is $500 at regular monthly intervals or $1,000 at
regular quarterly intervals (See "Terms and Conditions" on page 28.)
O AUTOMATIC DOLLAR-COST-AVERAGING SERVICE permits a shareholder of Seligman
Cash Management Fund to exchange a specified amount, at regular monthly
intervals in fixed amounts of $100 or more per fund, or regular quarterly
intervals in fixed amounts of $250 or more per fund, from shares of any class of
the Cash Management Fund into shares of the same class of any other Seligman
Mutual Fund registered in the same name. For exchanges into the Seligman Time
Horizon MatrixSM Asset Allocation Program, the minimum amount is $500 at regular
monthly intervals or $1,000 at regular quarterly intervals. The shareholder's
Cash Management Fund account must have a value of at least $5,000 at the
initiation of the service. Exchanges will be made at the public offering price.
O DIVIDENDS FROM OTHER INVESTMENTS permits a shareholder to order dividends
payable on shares of other companies to be paid to and invested in additional
shares of the Fund or another Seligman Mutual Fund. (Dividend checks must meet
or exceed the required minimum purchase amount and include the shareholder's
name, account number, the name of the Fund and the class of shares in which the
investment is to be made.)
o AUTOMATIC CD TRANSFER SERVICE permits a shareholder to instruct a bank to
invest the proceeds of a maturing bank certificate of deposit ("CD") in shares
of any designated Seligman Mutual Fund. Shareholders who wish to use this
service should contact Seligman Data Corp. or a broker to obtain the necessary
documentation. Banks may charge a penalty on CD assets withdrawn prior to
maturity. Accordingly, it will not normally be advisable to liquidate a CD
before its maturity.
O AUTOMATIC CASH WITHDRAWAL SERVICE permits payments at regular intervals to
be made to a shareholder who owns or purchases shares worth $5,000 or more held
as book credits. Holders of Class A shares purchased at net asset value because
the purchase amount was $1,000,000 or more should bear in mind that withdrawals
will be subject to a 1% CDSL if made within eighteen months of purchase of such
shares. Holders of Class B shares may elect to use this service immediately,
although certain withdrawals may be subject to a CDSL. Holders of Class D shares
may elect to use this service with respect to shares that have been held for at
least one year. (See "Terms and Conditions" on page 28.)
O DIRECTED DIVIDENDS allows a shareholder to pay dividends to another person
or to direct the payment of such dividends to another Seligman Mutual Fund for
purchase at net asset value. Dividends on Class A, Class B and Class D shares
may only be directed to shares of the same class of another Seligman Mutual
Fund.
O OVERNIGHT DELIVERY to service shareholder requests is available for a
$15.00 fee which will be deducted from a shareholder's account, if requested.
25
<PAGE>
O COPIES OF ACCOUNT STATEMENTS will be sent to each shareholder free of
charge for the current year and most recent prior year. Copies of year-end
statements for prior years are available for a fee of $10.00 per year, per
account, with a maximum charge of $150 per account. Statement requests should be
forwarded, along with a check, to Seligman Data Corp.
O TAX-DEFERRED RETIREMENT PLANS. Shares of the Fund may be purchased for:
--Individual Retirement Accounts (IRAs);
--Savings Incentive Match Plans for Employees (SIMPLE IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees;
--Section 403(b)(7) Plans for employees of public school systems and certain
non-profit organizations who wish to make deferred compensation arrangements;
and
--Money Purchase Pension and Profit Sharing Plans for sole proprietorships,
corporations and partnerships.
These types of plans may be established only upon receipt of a written
application form. The Fund may register an IRA investment for which an account
application has not been received as an ordinary taxable account.
For more information, write Retirement Plan Services, Seligman Data Corp.,
100 Park Avenue, New York, New York 10017 or telephone toll-free (800) 445-1777
from all continental United States. You also may receive information through an
authorized dealer.
ADVERTISING THE FUND'S PERFORMANCE
From time to time the Fund shall advertise its "total return" and "average
annual total return", each of which are calculated separately for Class A, Class
B and Class D shares. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT
INTENDED TO INDICATE FUTURE PERFORMANCE. The "total return" shows what an
investment in shares of Class A, Class B and Class D of the Fund would have
earned over a specified period of time (for example, one, five and ten year
periods or since inception) assuming the payment of the maximum sales load, if
any (or CDSL upon redemption, if applicable), when the investment was made and
that all distributions and dividends paid by the Fund were reinvested on the
reinvestment dates during the period. The "average annual total return" is the
annual rate required for the initial payment to grow to the amount which would
be received at the end of the specified period (one, five and ten year periods
or since inception), i.e., the average annual compound rate of return. The total
return and average annual total return may also be presented without the effect
of an initial sales load or CDSL, as applicable. The waiver by the Manager and
Subadviser of their fees and reimbursement of certain expenses during certain
periods would positively affect the performance results quoted.
From time to time, reference may be made in advertising or promotional
material to performance information, including mutual fund rankings, prepared by
Lipper Analytical Service, Inc. ("Lipper"), an independent reporting service
which monitors the performance of mutual funds. In calculating the total return
of the Fund's Class A, Class B and Class D shares, the Lipper analysis assumes
investment of all dividends and distributions paid but does not take into
account applicable sales loads. The Fund may also refer in advertisements or in
other promotional material to articles, comments, listings and columns in the
financial press pertaining to the Fund's performance. Examples of such financial
press publications include Barron's, Business Week, CDA/Weisenberger Mutual Fund
Investment Report, Christian Science Monitor, Financial Planning, Financial
Times, Financial World, Forbes, Fortune, Individual Investor, Investment
Advisor, Investors Business Daily, Kiplinger's, Los Angeles Times, MONEY
Magazine, Morningstar, Inc., Pensions and Investments, Smart Money, The New York
Times, U.S.A. Today, U.S. News and World Report, The Wall Street Journal,
Washington Post, Worth Magazine and Your Money.
ORGANIZATION AND CAPITALIZATION
The Fund is a series of Seligman Henderson Global Fund Series, Inc., an
open-end investment company incorporated under the laws of the state of Maryland
on November 22, 1991. The Directors of the Corporation are authorized to issue,
create and classify shares of capital stock in separate series without further
action by shareholders. To date, shares of six series
26
<PAGE>
have been authorized, which shares constitute interests in the Fund, the
Seligman Henderson Emerging Markets Growth Fund, the Seligman Henderson Global
Growth Opportunities Fund, the Seligman Henderson Global Smaller Companies Fund,
the Seligman Henderson Global Technology Fund and the Seligman Henderson
International Fund. Shares of capital stock of each series have a par value
$.001 divided into three classes. Each share of the Fund's Class A, Class B and
Class D common stock is equal as to earnings, assets and voting privileges,
except that each class bears its own separate distribution and, potentially,
certain other class expenses and has exclusive voting rights with respect to any
matter to which a separate vote of any class is required by the 1940 Act or
Maryland law. The Fund has adopted a Plan (the "Multiclass Plan") pursuant to
Rule 18f-3 under the 1940 Act permitting the issuance and sale of multiple
classes of common stock. In accordance with the Articles of Incorporation, the
Board of Directors of the Corporation may authorize the creation of additional
classes of common stock with such characteristics as are permitted by the
Multiclass Plan and Rule 18f-3. The 1940 Act requires that where more than one
class exists, each class must be preferred over all other classes in respect of
assets specifically allocated to such class. All shares have non-cumulative
voting rights for the election of directors. Each outstanding share is fully
paid and non assessable, and each is freely transferable. There are no
liquidation, conversion or preemptive rights. The Corporation acts as its own
transfer agent.
27
<PAGE>
TERMS AND CONDITIONS
GENERAL ACCOUNT INFORMATION
Investments will be made in as many shares, including fractions to the
third decimal place, as can be purchased at the net asset value plus a sales
load, if applicable, at the close of business on the day payment is received. If
a check in payment of a purchase of shares is dishonored for any reason,
Seligman Data Corp. will cancel the purchase and may redeem additional shares,
if any, held in the shareholder's account in an amount sufficient to reimburse
the Fund for any loss it may have incurred and charge a $10.00 return check fee.
Shareholders will receive dividends from investment income and any distributions
from gain realized on investments in shares or in cash according to the option
elected. Dividend and gain options may be changed by notifying Seligman Data
Corp. These option changes must be received by Seligman Data Corp. before the
record date for the dividend or distribution in order to be effective for such
dividend or distribution. Stock certificates will not be issued unless
requested. Replacement stock certificates will be subject to a surety fee.
INVEST-A-CHECK(R) SERVICE
The Invest-A-Check(R) Service is available to all shareholders. The
application is subject to acceptance by the shareholder's bank and Seligman DatA
Corp. The electronic funds transfer ("ACH debit") or preauthorized check in the
amount specified will be drawn automatically on the shareholder's bank on the
fifth day (unless otherwise specified) of each month (or on the prior business
day if such day of the month falls on a weekend or holiday) in which an
investment is scheduled and invested at the close of business on the same date.
After the initial investment, the value of shares held in the shareholder's
account must equal not less than two regularly scheduled investments. If an ACH
debit or preauthorized check is not honored by the shareholder's bank, or if the
value of shares held falls below the required minimum, the Invest-A-Check(R)
Service may be suspended. In the event that A check or ACH debit is returned as
uncollectable, Seligman Data Corp. will cancel the purchase, redeem shares held
in the shareholder's account for an amount sufficient to reimburse the Fund for
any loss it may have incurred as a result, and charge a $10.00 return check fee.
This fee will be deducted from the shareholder's account. The Invest-A-Check(R)
Service may be reinstated upon written request indicating that the cause of
interruption has beeN corrected. The Invest-A-Check(R) Service may be terminated
by the shareholder or Seligman Data Corp. at any time by written notice. The
shareholder agreeS to hold the Fund and its agents free from all liability which
may result from acts done in good faith and pursuant to these terms.
Instructions for establishing Invest-A-Check(R) Service are given on the Account
Application. In the event a shareholder exchanges all of the shares from one
Seligman MutuaL Fund to another, The Invest-A-Check(R) Service will be
terminated in the Seligman Mutual Fund that was closed as a result of the
exchange of all shares anD the shareholder must re-apply for the
Invest-A-Check(R) Service in the Seligman Mutual Fund into which the exchange
was made. In the event of a partiaL exchange, the Invest-A-Check(R) Service will
be continued, subject to the above conditions, in the Seligman Mutual Fund from
which the exchange was made. Accounts established in conjunction with the
Invest-A-Check(R) Service must be accompanied by a minimum initial investment of
at least $100 in connectioN with the monthly investment option or $250 in
connection with the quarterly investment option. If a shareholder uses the
Invest-A-Check(R) Service to makE an IRA investment, the purchase will be
credited as a current year contribution. If a shareholder uses the Invest-
A-Check(R) Service to make an investmenT in a pension or profit sharing plan,
the purchase will be credited as a current year employer contribution.
AUTOMATIC CASH WITHDRAWAL SERVICE
The Automatic Cash Withdrawal Service is available to Class A
shareholders, to Class B shareholders and to Class D shareholders with respect
to Class D shares held for one year or more. A sufficient number of full and
fractional shares will be redeemed to provide the amount required for a
scheduled payment and any applicable CDSL. Redemptions will be made at the net
asset value at the close of business on the specific day designated by the
shareholder of each month (or on the prior business day if the day specified
falls on a weekend or holiday). Automatic withdrawals of Class A shares which
were purchased at net asset value because the purchase amount was $1,000,000 or
more will be subject to a CDSL if made within 18 months of purchase of such
shares. Under this Service, a Class B shareholder who requests both dividends
and distributions in additional shares may withdraw up to 12% of the value of
the shareholder's fund account (at the time of election) per annum, without the
imposition of a CDSL. A shareholder may change the amount of scheduled payments
or may suspend payments by written notice to Seligman Data Corp. at least ten
days prior to the effective date of such a change or suspension. The Service may
be terminated by the shareholder or Seligman Data Corp. at any time by written
notice. It will be terminated upon proper notification of the death or legal
incapacity of the shareholder. This Service is considered terminated in the
event a withdrawal of shares, other than to make scheduled withdrawal payments,
reduces the value of shares remaining on deposit to less than $5,000. Continued
payments in excess of dividend income invested will reduce and ultimately
exhaust capital. Withdrawals, concurrent with purchases of shares of this or any
other investment company, will be disadvantageous because of the payment of
duplicative sales loads, if applicable. For this reason, additional purchases of
Fund shares are discouraged when the Withdrawal Service is in effect.
LETTER OF INTENT -- CLASS A SHARES ONLY
Seligman Financial Services, Inc. will hold in escrow shares equal to 5%
of the minimum purchase amount specified. Dividends and distributions on the
escrowed shares will be paid directly to the shareholder or credited to the
shareholder's account. Upon completion of the specified minimum purchase within
the thirteen-month period, all shares held in escrow will be deposited into the
shareholder's account or delivered to the shareholder. A shareholder may include
toward completion of a Letter of Intent the total asset value of shares of the
Seligman Mutual Funds on which an initial sales load was paid as of the date of
the Letter. If the total amount invested within the thirteen-month period does
not equal or exceed the specified minimum purchase, the shareholder will be
requested to pay the difference between the amount of the sales load paid and
the amount of the sales load applicable to the total purchase made. If, within
20 days following the mailing of a written request, the shareholder has not paid
this additional sales load to Seligman Financial Services, Inc., sufficient
escrowed shares will be redeemed for payment of the additional sales load.
Shares remaining in escrow after this payment will be released to the
shareholder's account. The intended purchase amount may be increased at any time
during the thirteen-month period by filing a revised Agreement for the same
period, provided that the Dealer furnishes evidence that an amount representing
the reduction in sales load under the new Agreement, which becomes applicable on
purchases already made under the original Agreement, will be refunded to the
Fund and that the required additional escrowed shares will be purchased by the
shareholder.
Shares of Seligman Cash Management Fund, Inc. which have been acquired by
an exchange of shares of another Seligman Mutual Fund on which there is an
initial sales load may be taken into account in completing a Letter of Intent,
or for Right of Accumulation. However, shares of the Cash Management Fund which
have been purchased directly may not be used for purposes of determining reduced
sales loads on additional purchases of the other Seligman Mutual Funds.
9/97
28
<PAGE>
SELIGMAN HENDERSON
INTERNATIONAL VALUE
FUND
===============================================================================
100 Park Avenue
New York, New York 10017
Investment Manager
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, New York 10017
Subadviser
Seligman Henderson Co.
100 Park Avenue
New York, New York 10017
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
Custodian
Morgan Stanley Trust Company (NY)
1 Pierrepont Plaza
Brooklyn, New York 11201
General Counsel
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
9/97
===============================================================================
PROSPECTUS
- --------------------------------------------------------------------------------
SELIGMAN
HENDERSON
INTERNATIONAL
VALUE
FUND
- --------------------------------------------------------------------------------
September 26, 1997
[LOGO]
================================================================================
An International Capital Appreciation Fund
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 26, 1997
SELIGMAN HENDERSON INTERNATIONAL VALUE FUND
a 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 of the Seligman Henderson
International Value Fund (the "Fund"), a Series of Seligman Henderson Global
Fund Series, Inc. (the "Corporation"), dated September 26, 1997. It should be
read in conjunction with the 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.
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 A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
load but are subject to a contingent deferred sales load ("CDSL") of 1% (of the
current net asset value or original purchase price, whichever is less) if such
shares are redeemed within eighteen months of purchase. Class B shares may be
purchased at net asset value and are subject to a 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 Class A, Class B and Class D share represents an identical legal
interest in the investment portfolio of the Fund and has the same rights except
for certain class expenses and except that Class B and Class D shares bear
higher distribution fees that generally will cause the Class B and Class D
shares to have higher expense ratios 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 Objective, Policies and Risks.......... 2
Investment Limitations............................ 4
Directors and Officers............................ 5
Management and Expenses........................... 10
Administration, Shareholder Services
and Distribution Plan........................... 11
Portfolio Transactions............................ 12
Purchase and Redemption of Fund Shares............ 12
Distribution Services............................. 14
Valuation......................................... 14
Taxes............................................. 15
Performance....................................... 17
General Information............................... 17
Financial Statements.............................. 17
Appendix A........................................ 18
Appendix B........................................ 20
Appendix C........................................ 22
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund seeks to achieve long-term capital appreciation primarily by
investing at least 80% of its net assets in equity securities of non-United
States companies deemed to be value companies by the Fund's subadviser. There
can be no assurance that the Fund will achieve its investment objective. The
following information regarding the Fund's investment policies supplements the
information contained in the Prospectus.
PURCHASING PUT OPTIONS ON SECURITIES. The Fund 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 the Fund, 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, the Fund 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, the Fund 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. The Fund's maximum financial exposure will be limited to these
costs.
The Fund 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.
The Fund's 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. The Fund 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.
The Fund may enter into a forward contract to sell or buy the amount of
a foreign currency it believes may experience a substantial movement against
another currency (including the U.S. dollar). In this case the contract would
approximate the value of some or all of the Fund's portfolio securities
denominated in such foreign currency. If appropriate, the Fund 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, the Fund 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 the Fund. 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,
the Fund 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 the Fund and its ability to purchase additional
securities.
Except as set forth above and immediately below, the Fund will also not
enter into such forward contracts or maintain a net exposure to such contracts
where the consummation of the contracts would oblige the Fund to deliver an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency. The Fund, in order to
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
-2-
<PAGE>
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 the Fund will be served.
At the maturity of a forward contract, the Fund 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 the Fund to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security is less than the amount of foreign
currency the Fund is obligated to deliver and if a decision is made to sell the
security and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received upon
the sale of the portfolio security if its market value exceeds the amount of
foreign currency the Fund is obligated to deliver. However, the Fund 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 the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the Fund
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 Fund's dealing in forward foreign currency exchange contracts will
generally be limited to the transactions described above. However, the Fund
reserves the right to enter into forward foreign currency contracts for
different purposes and under different circumstances. Of course, the Fund 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 the Fund at one rate, while offering a lesser rate of
exchange should the Fund desire to resell that currency to the dealer.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term. A
repurchase agreement is an agreement under which the Fund acquires a money
market instrument, generally a U.S. Government obligation, subject to resale at
an agreed upon price and date. Such resale price reflects an agreed upon
interest rate effective for the period of time the instrument is held by the
Fund and is unrelated to the interest rate on the instrument. Repurchase
agreements could involve certain risks in the event of bankruptcy or other
default by the seller, including possible delays and expenses in liquidating the
securities underlying the agreement, decline in value and the underlying
securities and loss of interest. Repurchase agreements usually are for short
periods, such as one week or less, but may be for longer periods. However, as a
matter of fundamental policy, the Fund will not enter into repurchase agreements
of more than one week's duration if more than 10% of its net assets would be so
invested. The Fund to date has not entered into any repurchase agreements and
has no present intention of doing so in the future.
BORROWING. The Fund may from time to time borrow money for temporary,
extraordinary or emergency purposes in an amount up to 10% of its total assets
from banks at prevailing interest rates and invest the funds in additional
securities. The Fund's borrowings are limited so that immediately after such
borrowing the value of the Fund's assets (including borrowings) less its
liabilities (not including borrowings) is at least three times the amount of the
borrowings. Should the Fund, for any reason, have borrowings that do not meet
the above test, then within three business days, the Fund must reduce such
borrowings so as to meet the foregoing test. Under these circumstances, the Fund
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
-3-
<PAGE>
asset value of the Fund's 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 the Fund could decrease faster than if there
had been no borrowings.
LENDING OF PORTFOLIO SECURITIES. The Fund 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 the Fund will generally be short-term. Loans are
subject to termination at the option of the Fund or the borrower. The Fund may
pay reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker. The Fund 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. The Fund 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. The Fund does not
currently expect to invest more than 5% of its assets in such securities. The
Fund 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 Corporation'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 the level of liquidity in the market for securities. This investment
practice could have the effect of increasing the level of illiquidity in the
Fund 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 Fund's
investment policies are not fundamental and the Board of Directors of the
Corporation may change such policies without the vote of a majority of the
Fund's outstanding voting securities (as defined below).
PORTFOLIO TURNOVER. The Fund 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. The Fund anticipates that
its annual rate of portfolio turnover will not exceed 100%.
INVESTMENT LIMITATIONS
Under the Fund's fundamental policies, which cannot be changed except
by vote of a majority of the Fund's outstanding voting securities of the Fund,
the Fund 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
the Fund's net assets. For purposes of this restriction, warrants acquired
by the Fund in units or attached to securities may be deemed to have been
purchased without cost.
-4-
<PAGE>
7. Make loans of money or securities other than (a) through the purchase of
securities in accordance with the Fund's investment objective, (b) through
repurchase agreements and (c) by lending portfolio securities in an amount
not to exceed 33 1/3% of the Fund's total assets.
8. Issue senior securities or borrow money except from banks and then in
amounts not in excess of 10% of its total assets, as described in the
Prospectus and on page 4 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 the Fund
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
Fund) if to the Fund's knowledge, those officers and directors of the
Corporation 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.
Under the 1940 Act, a "vote of a majority of the outstanding voting
securities" of the Fund means the affirmative vote of the lesser of (l) more
than 50% of the outstanding shares of the Fund or (2) 67% or more of the shares
present at a shareholders' meeting if more than 50% of the outstanding shares of
the Fund are represented at the meeting in person or by proxy.
DIRECTORS AND OFFICERS
Directors and officers of the Corporation, 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 Corporation, 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 Executive
(59) Officer and Chairman of the Executive Committee
Managing Director and Chairman, 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, President, J. &
W. Seligman & Co. Incorporated; Chairman, Seligman
Securities, Inc., broker/dealer and J. & W. Seligman
Trust Company, trust company; and Director, Daniel
Industries Inc., manufacturer of oil and gas metering
equipment.
-5-
<PAGE>
BRIAN T. ZINO* Director, President and Member of the Executive
(45) Committee
Director and President, J. & W. Seligman & Co.
Incorporated, investment managers and advisers; and
Seligman Advisors, Inc., advisers; President (with the
exception of Seligman Quality Municipal Fund, Inc. and
Seligman Select Municipal Fund, Inc.), and Director or
Trustee, the Seligman Group of Investment Companies;;
Chairman and formerly, President, 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.
RICHARD R. SCHMALTZ* Director and Member of the Executive Committee
(57)
Managing Director, Director of Investments, J. & W.
Seligman & Co. Incorporated; Director of Seligman
Henderson Co.; and Trustee Emeritus of Colby College;
formerly, Director of Research at Neuberger & Berman
from 1993 to 1996 and Executive Vice President of
McGlinn Capital from 1987 to 1993; formerly, Director,
Home State Insurance Company and Quaker State Insurance
Company.
JOHN R. GALVIN Director
(68)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
Investment Companies; Chairman, American Council on
Germany; a Governor of the Center for Creative
Leadership; Director, USLIFE, insurance; National
Committee on U.S.-China Relations, National Defense
University; the Institute for Defense Analysis; and
Raytheon Co., electronics and Consultant, Thomson CSF,
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
(62)
President, Sarah Lawrence College; Director or Trustee,
the Seligman Group of Investment Companies; Chairman,
The Rockefeller Foundation, charitable foundation; and
Director, NYNEX, telephone company; and the Committee
for Economic Development; formerly, Trustee, The Markle
Foundation, philanthropic organization; and Director,
International Research and Exchange Board, intellectual
exchanges. Sarah Lawrence College, Bronxville, New York
10708
FRANK A. McPHERSON Director
(64)
Director, Various Corporations; Director or Trustee,
the Seligman Group of Investment Companies; Director,
Kimberly-Clark Corporation, consumer products, Bank of
Oklahoma Holding Company, 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; formerly, Chairman of the
Board and Chief Executive Officer, Kerr-McGee
Corporation, energy and chemicals. 123 Robert S. Kerr
Avenue, Oklahoma City, OK 73102
-6-
<PAGE>
JOHN E. MEROW* Director
(67)
Retired Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the Seligman
Group of Investment Companies; Municipal Art Society of
New York, Commonwealth Aluminum Corporation, the U.S.
Council for International Business and the U.S.-New
Zealand Council; Chairman, American Australian
Association; Member of the American Law Institute and
Council on Foreign Relations; and Member of the Board
of Governors of Foreign Policy Association and New York
Hospital. 125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(55)
Attorney; Director or Trustee, the Seligman Group of
Investment Companies; Trustee, Geraldine R. Dodge
Foundation, charitable foundation; and Chairman of the
Board of Trustees of St. George's School (Newport, RI);
formerly, Director, the National Association of
Independent Schools (Washington, D.C.), education. St.
Bernard's Road, P.O. Box 449, Gladstone, NJ 07934
JAMES C. PITNEY Director
(71)
Retired 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
(70)
Director, Various Corporations; Director or Trustee,
the Seligman Group of Investment Companies; The Houston
Exploration Company; 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, Tesoro
Petroleum Companies, Inc.; and Director and President,
Bekaert Corporation. 675 Third Avenue, Suite 3004, New
York, NY 10017
ROBERT L. SHAFER Director
(65)
Director, Various Corporations; Director or Trustee,
the Seligman Group of Investment Companies and USLIFE
Corporation, life insurance; formerly, Vice President,
Pfizer Inc., pharmaceuticals. 230 Park Avenue, New
York, NY 10169 - 0079
JAMES N. WHITSON Director
(62)
Executive Vice President, Chief Operating Officer and
Director, Sammons Enterprises, Inc.; Director or
Trustee, the Seligman Group of Investment Companies;
Red Man Pipe and Supply Company, piping and other
materials; and C-SPAN. 300 Crescent Court, Suite 700,
Dallas, TX 75202
MICHAEL MOULE Vice President and Portfolio Manager of the Fund
(51)
Portfolio Manager, Seligman Henderson Co., advisers;
and Henderson plc, investment management; formerly,
Portfolio Manager, Touche Remnant & Co., investment
management.
-7-
<PAGE>
BRIAN ASHFORD-RUSSELL Vice President
(38)
Portfolio Manager, Seligman Henderson Co., advisers;
and Henderson plc, investment management; formerly,
Portfolio Manager, Touche Remnant & Co., investment
management.
PETER BASSETT Vice President
(43)
Portfolio Manager, Seligman Henderson Co., advisers;
and Henderson plc, investment management; formerly,
Portfolio Manager, Touche Remnant & Co., investment
management.
IAIN C. CLARK Vice President
(46)
Managing Director and Chief Investment Officer,
Seligman Henderson Co., advisers; Director and Senior
Portfolio Manager, Henderson plc, investment
management.
NITIN MEHTA Vice President
(37)
Portfolio Manager, Seligman Henderson Co., advisers;
and Henderson plc, investment management; formerly,
Head of Currency Management and Derivatives, Quorum
Capital Management; Investment Officer, International
Finance Corp., investment management; and Director of
Equities, Shearson Lehman Global Asset Management.
ARSEN MRAKOVCIC Vice President
(32)
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.
LORIS D. MUZZATTI Vice President
(40)
Managing Director, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; and Vice President
and Portfolio Manager, two other open-end investment
companies in the Seligman Group of Investment
Companies.
PAUL H. WICK Vice President
(34)
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; formerly, Senior Vice President and Portfolio
Manager, Chuo Trust, JWS Advisors, Inc., advisers.
LAWRENCE P. VOGEL Vice President
(41)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
Seligman Financial Services, Inc., broker/dealer;
Seligman Advisors, Inc., advisers; and Seligman Data
Corp., shareholder service agent; Vice President, the
Seligman Group of Investment Companies; and Seligman
Services, Inc., broker/dealer; and Treasurer, Seligman
Holdings, Inc., holding company; and Seligman Henderson
Co., advisers.
-8-
<PAGE>
FRANK J. NASTA Secretary
(32)
Senior Vice President, Law and Regulation and Corporate
Secretary, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; Corporate Secretary,
the Seligman Group of Investment Companies, Seligman
Advisors, Inc., advisers; Seligman Financial Services,
Inc., broker/dealer; Seligman Henderson Co., advisers;
Seligman Services, Inc., broker/dealer; and Seligman
Data Corp., shareholder service agent; formerly,
attorney, Seward & Kissel, law firm.
THOMAS G. ROSE Treasurer
(39)
Treasurer, the Seligman Group of Investment Companies
and Seligman Data Corp., shareholder service agent;
formerly, Treasurer, American Investors Advisors, Inc.
and the American Investors Family of Funds.
The Executive Committee of the Board of Directors of the Corporation
acts on behalf of the Board between meetings to determine the value of
securities and assets owned by the Fund for which no market valuation is
available and to elect or appoint officers of the Corporation to serve until the
next meeting of the Board.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits from Corporation and
Compensation Accrued as part of Fund Complex Paid
POSITION WITH CORPORATION FROM CORPORATION (1) FUND EXPENSES TO DIRECTORS (1)(2)
------------------------- -------------------- ------------- -------------------
<S> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Richard R. Schmaltz, Director* N/A N/A N/A
Ronald T. Schroeder, Director** N/A N/A N/A
Fred E. Brown, Director*** N/A N/A N/A
John R. Galvin, Director $3,388.71 N/A $65,000.00
Alice S. Ilchman, Director 3,424.43 N/A 66,000.00
Frank A. McPherson, Director 3,424.43 N/A 66,000.00
John E. Merow, Director 3,424.43(d) N/A 66,000.00(d)
Betsy S. Michel, Director 3,424.43 N/A 66,000.00
James C. Pitney, Director 3,388.71 N/A 65,000.00
James Q. Riordan, Director 3,424.43 N/A 66,000.00
Robert L. Shafer, Director 3,424.43 N/A 66,000.00
James N. Whitson, Director 3,424.43(d) N/A 66,000.00(d)
- -----------------------
(1) Based on remunerations received by the Directors of the other five
series of the Corporation for the fiscal year ended October 31, 1996.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of eighteen investment companies.
(d) Deferred.
* Elected by Directors May 15, 1997.
** Retired May 15, 1997.
*** Retired March 20, 1997.
</TABLE>
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<PAGE>
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 Fund's financial
statements. The total amounts of deferred compensation (including interest)
payable in respect of the Corporation to Messrs. Merow and Whitson as of October
31, 1996 were $12,793, and $10,322, respectively. As of January 1, 1997, Mr.
Merow no longer defers current compensation. Mr. Pitney no longer defers current
compensation; however, he has accrued deferred compensation in the amount of
$1,691 as of October 31, 1996. The Corporation has applied for, and expects to
receive, exemptive relief that would permit a director who has elected deferral
of his or her fees to choose a rate of return equal to either (i) the interest
rate on short-term Treasury bills, or (ii) the rate of return on the shares of
any of the investment companies advised by the Manager, as designated by the
director. The Fund may, but is not obligated to, purchase shares of such
investment companies to hedge its obligations in connection with this deferral
arrangement.
Directors and officers of the Corporation are also directors and
officers of some or all of the other investment companies in the Seligman Group.
As of the date of this Prospectus, no directors or officers of the
Corporation owned any shares of the Fund.
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 the Fund. 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 Corporation 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. The Manager receives a fee for its
services, calculated daily and payable monthly, equal to 1.00% per annum of the
average daily net assets of the Fund, and .90% is paid to Seligman Henderson Co.
(the "Subadviser").
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 Fund's 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 Corporation
not employed by (or serving as a Director of) the Manager or its affiliates;
insurance premiums; and extraordinary expenses such as litigation expenses.
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 Corporation 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 Fund 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.
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The Manager is a successor firm to an investment banking business
founded in 1864 which has thereafter provided investment services to
individuals, families, institutions and corporations. On December 29, 1988, a
majority of the outstanding voting securities of the Manager was purchased by
Mr. William C. Morris and a simultaneous recapitalization of the Manager
occurred. See Appendix B for further history of the Manager.
Under a Subadvisory Agreement dated March 19, 1992, the Subadviser
supervises and directs the investment of the assets of the Fund, including
making purchases and sales of portfolio securities consistent with the Fund's
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 Corporation at a meeting held on March 19, 1992
and by shareholders of the Fund on May 20, 1993, and, in respect of the Fund, by
the Board of Directors on July 20, 1997. 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 Fund 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 plc.
Henderson 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, managed approximately $ billion in assets at August 31, 1997.
See Appendix C for further history of the Subadviser.
Officers, directors and employees of the Manager are permitted to
engage in personal securities transactions, subject to the Manager's Code of
Ethics (the "Ethics Code"). The Ethics Code proscribes certain practices with
regard to personal securities transactions and personal dealings, provides a
framework for the reporting and monitoring of personal securities transactions
by the Manager's Director of Compliance, and sets forth a procedure of
identifying, for disciplinary action, those individuals who violate the Ethics
Code. The Ethics Code prohibits each of the officers, directors and employees
(including all portfolio managers) of the Manager from purchasing or selling any
security that the officer, director or employee knows or believes (i) was
recommended by the Manager for purchase or sale by any client, including the
Fund, within the preceding two weeks, (ii) has been reviewed by the Manager for
possible purchase or sale within the preceding two weeks, (iii) is being
purchased or sold by any client, (iv) is being considered by a research analyst,
(v) is being acquired in a private placement, unless prior approval has been
obtained from the Manager's Director of Compliance, or (vi) is being acquired
during an initial or secondary public offering. The Ethics Code also imposes a
strict standard of confidentiality and requires portfolio managers to disclose
any interest they may have in the securities or issuers that they recommend for
purchase by any client.
The Ethics Code also prohibits (i) each portfolio manager or member of
an investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages and (ii) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors and employees are required, except under very
limited circumstances, to engage in personal securities transactions through the
Manager's order desk. 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 PLAN
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 was approved by the Board of Directors on July 17, 1997,
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"). The Plan 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
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approval. The Plan 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 Plan 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 Plan 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
Plan may be made except by a majority of both the Directors and Qualified
Directors.
The Plan requires 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 Plan. 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 Fund, 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.
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.
PURCHASE AND REDEMPTION OF FUND SHARES
The Fund 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 A shares purchased at net asset value without an
initial sales load due to the size of the purchase are subject to a CDSL of 1%
if such shares are redeemed within eighteen months of purchase. 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.
CLASS A SHARES - REDUCED INITIAL SALES LOADS
REDUCTIONS AVAILABLE. Shares of any Seligman Mutual Fund sold with
an initial 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 the Fund alone, or in any combination of Class A shares of the
other mutual funds in the Seligman Group which are sold with an initial 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 the Fund and shares of the other mutual
funds in the Seligman Group sold with an initial sales load with the total net
asset value of shares of those mutual funds already owned that were sold with an
initial 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
Seligman Mutual Fund (as defined in the Prospectus) on which there was an
initial 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
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was an initial 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 initial 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 an initial 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 an initial sales load at the time of purchase. Reduced initial 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.
Class A shares purchased without an initial sales load in accordance
with the sales load schedule in the Fund's prospectus, or pursuant to a Volume
Discount, Right of Accumulation or Letter of Intent are subject to a CDSL of 1%
on redemptions of such shares within eighteen months of purchase.
PERSONS ENTITLED TO REDUCTIONS. Reductions in initial 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 Fund, 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 Fund 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 the Fund may sell shares at net asset value to
"eligible employee benefit plans," which have at least (i) $500,000 invested in
the Seligman Mutual Funds or (ii) 50 eligible employees to whom such plan is
made available. 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.
PAYMENT IN SECURITIES. In addition to cash, the Fund may accept
securities in payment for Fund shares sold at the applicable public offering
price (net asset value plus any applicable sales load), although the Fund does
not presently intend to accept securities in payment for Fund shares. Generally,
the Fund 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
Fund would not accept securities with a value of less than $100,000 per issue in
payment for shares. The Fund 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. The Fund will not accept restricted securities in payment
for shares. The Fund will value accepted securities in the manner provided for
valuing portfolio securities of the Fund. Any securities accepted by the Fund in
payment for Fund shares will have an active and substantial market and have a
value which is readily ascertainable. (See "Valuation.")
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FURTHER TYPES OF REDUCTIONS. Class A shares of the Fund 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
Fund 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 Fund, 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 Fund 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 Fund, 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 Fund 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 Fund and of the other mutual funds in the Seligman Group. The
Corporation and SFSI are parties to a Distributing Agreement dated January 1,
1993. As general distributor of the Fund's capital stock, SFSI allows
commissions 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 on Class D shares.
SFSI has sold its rights to collect any CDSL imposed on redemptions of
Class B shares to FEP Capital, L.P. ("FEP"). SFSI has also sold its rights to
substantially all of the distribution fee with respect to Class B shares
receivable by it pursuant to the Plans to FEP, which provides funding to SFSI to
enable it to pay commissions to dealers at the time of the sale of the related
Class B shares. In connection with the sale of its rights to collect any CDSL
and the distribution fees with respect to Class B shares, SFSI receives payments
from FEP based on the value of Class B shares sold.
Seligman Services, Inc., an affiliate of the Manager, may receive
commissions from certain sales of Fund shares, as well as distribution and
service fees pursuant to the Plan.
VALUATION
The net asset value per share of each class 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,
Martin Luther King 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 the Fund on each day in which there is a
sufficient degree of trading in the Fund's portfolio securities that the net
asset value of Fund shares might be materially affected. Net asset value per
share for a class of the Fund is computed by dividing that class' share of the
value of the net assets of the Fund (i.e., the value of its assets less
liabilities) by the total number of outstanding shares of such class. All
expenses of the Fund, 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 the Fund will generally be lower than the net
asset value of Class A shares of the Fund as a result of the higher distribution
fee with respect to such shares.
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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 Fund 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 the Fund,
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 Fund 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 Fund 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 the Fund's assets to be invested within various
countries is not known.
U.S. FEDERAL INCOME TAXES. The Fund intends for each taxable year to qualify for
tax treatment as a "regulated investment company" under the Code. Qualification
relieves the Fund 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 the
Fund 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 the Fund and assumes that the Fund
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.
The Fund 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. The
Fund 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 Fund 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
the Fund 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 the Fund's dividends or distributions will qualify for
the dividends received deduction for corporations.
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The excess of net long-term capital gains over the net short-term
capital losses realized and distributed by the Fund 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 Fund shares. Any dividend or
distribution received by a shareholder on shares of the Fund 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 the Fund 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 the Fund's common stock.
The Fund generally will be required to withhold tax at the rate of 31%
with respect to a portion of distributions and other reportable payments to a
noncorporate shareholder unless the shareholder certifies on the 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 the Fund from sources within various foreign
countries may be subject to foreign income tax. If more than 50% of the value of
the Fund's total assets at the close of its taxable year consists of the stock
or securities of foreign corporations, the Fund may elect to "pass through" to
its shareholders the amount of foreign income taxes paid by the Fund. 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
the Fund's 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 the Fund
from its foreign source income will be treated as foreign source income. The
Fund's 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 the Fund 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 the Fund.
The Fund 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 the Fund will be able to do so. Each shareholder will
be notified within 60 days after the close of each taxable year of the Fund
whether the foreign taxes paid by the Fund 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) the Fund's 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 the Fund purchases
shares in certain foreign investment entities, referred to as "passive foreign
investment companies," the Fund 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 the Fund as a dividend to
its shareholders. If the Fund were able and elected to treat a passive foreign
investment company as a "qualified electing fund," in lieu of the treatment
described above, the Fund 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 the Fund.
CERTAIN FOREIGN CURRENCY TRANSACTIONS. Gains or losses attributable to foreign
currency contracts, or to fluctuations in exchange rates that occur between the
time the Fund 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
-16-
<PAGE>
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 the Fund's net investment
income available to be distributed to its shareholders as ordinary income.
OPTIONS TRANSACTIONS. A special "marked-to-market" system governs the taxation
of "section 1256 contracts," which include certain listed options. The Fund 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 the Fund 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 the Fund. The Fund can elect to exempt its section 1256 contracts which
are part of a "mixed" straddle from the application of section 1256.
PERFORMANCE
The Fund may from time to time advertise its total return and average
annual total return in advertisements or in information furnished to present or
prospective shareholders. Total return and average annual total return are
computed separately for Class A, Class B and Class D shares. The amounts shall
be computed by deducting the maximum sales load of $47.50 (4.75% of the public
offering price) or CDSL, if applicable, assuming all of the dividends and
distributions paid by the Fund over the relevant time period were reinvested,
and redemption at the end of the applicable periods. The average annual total
return will be determined 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).
GENERAL INFORMATION
CAPITAL STOCK. The Board of Directors is authorized to classify or reclassify
and issue any unissued capital stock of the Corporation into any number of
series or classes without further action by shareholders. To date, shares of six
series have been authorized, which shares constitute interests in the Fund, the
Emerging Markets Growth Fund, the Global Growth Opportunities Fund, the Global
Smaller Companies Fund and the Global Technology Fund and the International
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 Corporation 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 RECORDKEEPING AGENTS. 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 Fund.
AUDITORS:_________________, independent auditors, have been selected as auditors
of the Fund. Their address is__________.
FINANCIAL STATEMENTS
The Annual Report to shareholders for the Corporation's fiscal year
ended October 31, 1996 is incorporated by reference into this Statement of
Additional Information. The Report contains schedules of the investments of the
Corporation's other series as well as certain other financial information.
Annual Reports will be furnished without charge to investors who request copies
of the Fund's Statement of Additional Information.
-17-
<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.
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.
-18-
<PAGE>
STANDARD & POOR'S RATING SERVICE ("S&P")
DEBT SECURITIES
AAA: Debt issues rated AAA are highest grade obligations. Capacity to
pay interest and repay principal is extremely strong.
AA: Debt issues rated AA have a very 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.
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.
-19-
<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
* Helps finance America's fledgling railroads through underwritings.
* 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.
* Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
* Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
* Is appointed U.S. Navy fiscal agent by President Grant.
* Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
* Helps Congress finance the building of the Panama Canal.
...1910s
* Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
* 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.
* Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion in
assets and one of its oldest.
...1930s
* Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
* Establishes Investment Advisory Service.
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<PAGE>
...1940s
* Helps shape the Investment Company Act of 1940.
* Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
* Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
* Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
* Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
* Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.
* Establishes J. & W. Seligman Trust Company and J. & W. Seligman Valuations
Corporation.
* Establishes Seligman Portfolios, Inc., an investment vehicle offered through
variable annuity products.
...1990s
* Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
* In 1991 establishes a joint venture with Henderson plc, of London, known as
Seligman Henderson Co., to offer global and international investment
products.
* Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
* Launches Seligman Henderson Global Fund Series, Inc., which today offers six
separate series: Seligman Henderson International Fund, Seligman Henderson
Global Smaller Companies Fund, Seligman Henderson Global Technology Fund
Seligman Henderson Global Growth Opportunities Fund, Seligman Henderson
Emerging Markets Growth Fund, and Seligman Henderson International Value
Fund.
* Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
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<PAGE>
APPENDIX C
HISTORY OF HENDERSON PLC
Henderson's origins can be traced back to the year 1872, when its founder, Sir
Alexander Henderson, joined the London Stock Exchange. In the years that
followed, Sir Alexander and the Henderson brothers began a long tradition of
global investing.
...Prior to 1900:
* Alexander Henderson joins the London Stock Exchange in 1872.
* Invests in railways in South America and Spain, mining and gold interests in
Mexico, Australia, and Chile, and wheat field developments in Canada and the
United States.
* Invests in the Argentine Transandine Railway in 1887.
* Helps finance the building of Manchester Ship Canal in England in 1887.
* Launches TR Smaller Companies Investment Trust in 1887.
* Launches The Bankers Investment Trust in 1888.
* Launches Electric and General Investment Company in 1890.
* Launches TR City of London Trust in 1891.
* Helps finance the building of the Great Central Railway in England in 1894.
* Alexander Henderson is elected to British Parliament in 1898.
...1900-1910
* Alexander Henderson is knighted in 1902.
* Finances British Central African Company in 1902 to build railways across
* Africa. Launches TR Property Investment Trust in 1905.
* Helps establish the National Bank of Turkey in 1909.
* Establishes Witan Investment Company in 1909.
...1910s
* Alexander Henderson achieves peerage as the first Lord Faringdon in 1916.
* Helps establish The British Trade Corporation in 1917, dedicated to
developing international trade for British companies.
...1920-1989
* Presides over the 1922 merger of the Great Central Railway with the London
and North Eastern Railway.
* Henderson Administration, today Henderson plc, is incorporated in 1934.
* Henderson is one of the first United Kingdom investors in Occidental
Petroleum in 1959.
* Begins managing a series of retail unit trusts in 1974 that are focused on
international markets, including Japan, North America, Europe, and the
Pacific. Today, Henderson manages 22 retail unit trusts, eight exempt unit
trusts, and 20 investment trusts.
* Launches the Luxembourg-based Henderson Horizon Funds in 1983, including
European Smaller Companies Fund and Global Bond Fund. Today, Henderson
offers 12 Henderson Horizon Funds.
* Henderson plc is listed on the London Stock Exchange in 1983.
...1990s
* Establishes a joint venture in 1991 with New York-based J. & W. Seligman &
Co., known as Seligman Henderson Co. Incorporated, to offer global
investment products.
* Launches Seligman Henderson Global Fund Series, Inc., which today offers six
separate series: Seligman Henderson International Fund, Seligman Henderson
Global Smaller Companies Fund, Seligman Henderson Global Technology Fund,
Seligman Henderson Global Growth Opportunities Fund, Seligman Henderson
Emerging Markets Growth Fund, and the Seligman Henderson International Value
Fund.
* Is, today, the largest investment trust manager in the United Kingdom and
one of the largest independent money managers in Europe. Has been the
recipient of Micropal's "Best Investment Trust Manager of the Year" award
for the years 1994, 1995, and 1996.
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<PAGE>
================================================================================
SELIGMAN
SELIGMAN HENDERSON
GLOBAL FUND SERIES, INC.
International Fund
Emerging Markets Growth Fund
Global Growth Opportunities Fund
Global Smaller Companies Fund
Global Technology Fund
================================================================================
Investing Around the World for Capital Appreciation
OCTOBER 31, 1996 o ANNUAL REPORT
<PAGE>
[PHOTO]
SELIGMAN
ESTABLISHED 1864
[PHOTO]
HENDERSON
INVESTING SINCE 1872
SELIGMAN
ESTABLISHED 1864
HENDERSON
INVESTING SINCE 1872
J. & W. SELIGMAN & CO. INCORPORATED
OVER THE LONG TERM
J. & W. Seligman & Co. Incorporated has been providing financial services for
more than 130 years. Since 1864, Seligman has followed a long-term approach to
making money for its clients by managing investment products and providing
services of the highest quality.
SELIGMAN HENDERSON CO.
THE EXPERIENCED GLOBAL MANAGER
The global and international funds in the Seligman Group of Funds are managed by
Seligman Henderson Co., a joint venture established by Seligman of New York and
Henderson plc of London. Together, the two firms have more than 200 years of
investment experience, and manage more than $30 billion in combined assets.
Seligman manages more than 40 investment companies, including Tri-Continental
Corporation, which was established in 1929. Henderson manages more than 60
investment companies, including four portfolios that were launched before 1900.
GLOBAL INVESTMENT CAPABILITIES
Seligman and Henderson combined employ more than 100 investment professionals,
organized into investment teams. Seligman Henderson believes its team approach
to managing global investments ensures a free exchange of ideas and information
from investment professionals, with unique insight into each of the world's
geographic regions. Seligman Henderson is headquartered in New York, and
Henderson has additional offices in London, Singapore, and Tokyo.
<PAGE>
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS
We are pleased to provide you with this Annual Report for Seligman Henderson
Global Fund Series, Inc., which includes Seligman Henderson International Fund,
Seligman Henderson Emerging Markets Growth Fund, Seligman Henderson Global
Growth Opportunities Fund, Seligman Henderson Global Smaller Companies Fund, and
Seligman Henderson Global Technology Fund. The Funds' overall investment results
for the 12 months ended October 31, 1996, were mixed. For your convenience,
Fund-specific information, including comments from the Portfolio Managers,
begins on page 3.
The fundamental economic and market background remained strong in most of the
world's major financial markets for the six months ended October 31, 1996. In
particular, inflation remained stable and, in many countries, short-term
interest rates were flat, or declined.
In the US, the economy remained remarkably stable, and equities continued to
perform well. They were supported by declining long-term interest rates, strong
inflows into mutual funds, and solid corporate earnings. As a result, the US
equity market continued to outpace most international equity markets.
In the UK, the economy continued to grow due to strengthening consumer
spending. This led to some upward pressure on interest rates, but also to a very
strong currency. Overall, conditions proved positive for Continental European
equity markets, although most currencies weakened against the US Dollar, which
reduced returns in Dollar terms. The overall background was one of low interest
rates and tight fiscal policies. There was a concerted effort by several
countries to meet their budget deficit targets (fiscal policy) as required by
the Maastricht Treaty in order to achieve monetary union by the year 1999.
In Japan, the economy slowed somewhat but still progressed, interest rates
reached record low levels, and corporate profits were generally satisfactory.
However, domestic investors cautiously remained on the sidelines while
significant new fund raising and equity sales by life insurance companies kept
the supply of stock high. This supply imbalance left the market trading in a
relatively narrow range.
In the Pacific, the Hong Kong stock market performed exceptionally well, but
both Thailand and South Korea fell sharply. In Thailand, a combination of
political worries, capital outflows, and the banking sector's debts caused
investors to flee the market. In South Korea, a corporate profit collapse was
the overriding factor.
Elsewhere, Latin American economies and stock markets made a reasonable
recovery following a very difficult 1995. Finally, Central European markets all
performed well due to very low stock valuations.
Going forward, we anticipate that the fundamental economic environment will
remain solid, and should reasonably support the equity markets. However, there
are signs of some excesses in the financial markets, including high mutual fund
sales, a large number of initial public offerings (IPOs), and volatile Japanese
money seeking high returns. As always, there could be short-term volatility, but
we remain confident in the long-term outlook.
By order of the Board of Directors,
/s/ William C. Morris /s/ Brian T. Zino /s/ Iain C. Clark
- ---------------------- ------------------- -----------------------
William C. Morris Brian T. Zino Iain C. Clark
Chairman President Chief Investment Officer
Seligman Henderson Co.
December 2, 1996
1
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL FUND SERIES, INC.
<TABLE>
<CAPTION>
EMERGING GLOBAL GROWTH
HIGHLIGHTS INTERNATIONAL MARKETS GROWTH OPPORTUNITIES
October 31, 1996 FUND FUND* FUND*
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS:
<S> <C> <C> <C>
Class A (in millions) $ 51.0 $19.9 $107.5
Class B (in millions) 2.9 10.5 9.3
Class D (in millions) 47.9 13.7 53.5
----------- --------- -----------
Total $101.8 $44.1 $170.3
- --------------------------------------------------------------------------------------------------------------------
DIVIDENDS (Class A)** -- -- --
- --------------------------------------------------------------------------------------------------------------------
CAPITAL GAIN DISTRIBUTIONS
(Class A and Class D)*** $0.916 -- --
- --------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE:
October 31, 1996
Class A $17.17 $6.78 $8.08
Class B 16.74 6.76 8.02
Class D 16.74 6.76 8.02
April 30, 1996
Class A 17.78 n/a 8.16
Class B 17.40 n/a 8.13
Class D 17.40 n/a 8.13
October 31, 1995
Class A 16.71 n/a n/a
Class D 16.43 n/a n/a
- --------------------------------------------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER
SHARE:
October 31, 1996
Class A $18.03 $7.12 $8.48
Class B 16.74 6.76 8.02
Class D 16.74 6.76 8.02
April 30, 1996
Class A 18.67 n/a 8.56
Class B 17.40 n/a 8.13
Class D 17.40 n/a 8.13
October 31, 1995
Class A 17.54 n/a n/a
Class D 16.43 n/a n/a
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SMALLER GLOBAL
HIGHLIGHTS COMPANIES TECHNOLOGY
October 31, 1996 FUND FUND
- -------------------------------------------------------------------------------
NET ASSETS:
<S> <C> <C>
Class A (in millions) $350.3 $499.9
Class B (in millions) 104.0 18.8
Class D (in millions) 285.5 197.4
----------- -----------
Total $739.8 $716.1
- -------------------------------------------------------------------------------
DIVIDENDS (Class A)** -- $0.019
- -------------------------------------------------------------------------------
CAPITAL GAIN DISTRIBUTIONS
(Class A and Class D)*** $0.955 $0.771
- -------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE:
October 31, 1996
Class A $15.14 $11.31
Class B 14.72 11.09
Class D 14.72 11.09
April 30, 1996
Class A 15.15 12.19
Class B 14.78 12.00
Class D 14.78 12.00
October 31, 1995
Class A 13.90 13.05
Class D 13.63 12.89
- -------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER
SHARE:
October 31, 1996
Class A $15.90 $11.87
Class B 14.72 11.09
Class D 14.72 11.09
April 30, 1996
Class A 15.91 12.80
Class B 14.78 12.00
Class D 14.78 12.00
October 31, 1995
Class A 14.59 13.70
Class D 13.63 12.89
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of operations May 28, 1996, and November 1, 1995, for Emerging
Markets Growth Fund and Global Growth Opportunities Fund, respectively.
** Represents per share amount paid on December 27, 1995.
*** Represents per share amount paid on December 27, 1995. On November 22, 1996,
payments of $0.885 and $0.730 were made to Class A, Class B, and Class D
shares of the International and Global Smaller Companies Funds,
respectively.
NOTE: THERE ARE SPECIFIC RISKS ASSOCIATED WITH GLOBAL INVESTING, SUCH AS
CURRENCY FLUCTUATIONS, FOREIGN TAXATION, DIFFERENCES IN FINANCIAL REPORTING
PRACTICES, AND RAPID CHANGES IN POLITICAL AND ECONOMIC CONDITIONS.
2
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
INTERNATIONAL FUND
IAIN C. CLARK,
PORTFOLIO MANAGER
[GROUP PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) TIM STEVENSON, JAMES ROBINSON, IAIN
CLARK, (PORTFOLIO MANAGER), PETER BASSETT, DAVID THORNTON, MISSING FROM PHOTO:
BEN ELWES, KIRSTEEN MORRISON
SELIGMAN HENDERSON INTERNATIONAL FUND, WHICH COMMENCED INVESTMENT OPERATIONS ON
APRIL 7, 1992, SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY IN
THE STOCKS OF LARGER-SIZED COMPANIES OUTSIDE THE U.S. WITH PROSPECTS FOR ABOVE-
AVERAGE GROWTH.
Over the past 12 months, we have seen mixed results in both the
international economies and stock markets. European markets performed
reasonably well, while the Pacific posted poor results.
UNITED KINGDOM
In the UK, the economy was quite healthy, primarily due to strengthened
consumer spending. As a result, the Fund directly benefited from its
significant position in consumer-related issues such as Granada Group, a
television broadcasting and leisure group, and Tesco, a supermarket chain.
Additionally, the UK stock market was up 16.6%, posting the best
performance in the six months ended October 31. Returns were largely
driven by the strength of Sterling, which rose 8.5% against the US Dollar.
Overall, the Fund's weighting in the UK was maintained at approximately
17% throughout the period.
CONTINENTAL EUROPE
Though economic conditions in Continental Europe were unimpressive at
April 30, the last six months brought a turn for the better in most
markets. In particular, Germany benefited from increased new orders,
improved business confidence, and low interest rates. Otherwise,
Continental Europe focused on meeting the Maastricht budget deficit
criteria for entry into the European Monetary Union in 1999. The emphasis
on Maastricht requirements resulted in a number of austerity budgets,
which will limit overall GNP growth. However, it is essential that
Continental European economies grow at 2% or more in order to achieve
these budget targets, which suggests that interest rates could remain low
despite the budget constraints.
Within the portfolio, we continued to increase the overall investment in
Continental Europe to end the period at almost 39%. Specifically, the
Fund's weightings in Spain, Sweden, and Germany were increased, while the
holdings in Switzerland and the Netherlands were reduced. More
specifically, positions in economically-sensitive stocks such as Michelin
(France), Sol Melia (Spain), Electrolux (Sweden), and Volkswagen (Germany)
were increased.
JAPAN
Japan's slow rate of economic recovery did not meet the expectations we
had when we last reported to you. There were doubts about the pace of the
recovery, as evidenced in the most recent Tankan Survey -- a measure of
business confidence -- that suggested a slowdown in manufacturing, which
put pressure on economically-sensitive stocks. Nonetheless, the Fund's
focus on economically-sensitive stocks was maintained, as we continue to
believe that the economy will improve. Companies such as Sankyo, a
manufacturer of pachinko game equipment, and Tsubakimoto Nakishima, a
manufacturer of ball bearings, were purchased, as they should both benefit
from a growing economy.
Further, the Yen continued to weaken sharply. As a result,
export-related holdings provided very strong results, with leading
electronics stocks such as Toshiba and Alps Electric posting solid
returns.
3
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
INTERNATIONAL FUND
PACIFIC/EMERGING MARKETS
The large decline in exports negatively affected the Asian markets,
though performance was very mixed. Hong Kong rose quite significantly,
performing strongly due to a stable economy. In Australia and Taiwan,
where the economies were also reasonably steady, the markets rose only
modestly. Elsewhere, markets in South Korea, Thailand, and Singapore
experienced sharp declines due largely to a considerable slowdown in
their economies and, in Thailand, from worrisome political developments.
These economies were severely affected by the collapse of prices in the
electronics sector. In Singapore, for example, electronics make up more
than 50% of total exports. Overall, the weighting in the Pacific was
reduced to 15.4%. In contrast, the weighting in Latin America and
Emerging Europe was increased with purchases in Peru, Brazil, Hungary,
and the Czech Republic.
OUTLOOK
The fundamental economic background is quite positive, and we expect that
moderate growth and low levels of inflation should continue around the
world. The outlook for corporate profits will be important for future
performance. We anticipate reasonable performance in the UK and
improvements in Continental Europe and Japan, although some of these
expectations may be already reflected in stock market prices. As both the
bond and equity markets were partly fueled by excess Japanese liquidity,
a short-term setback could be provoked when this cash flow dries up.
Nonetheless, we anticipate that the fundamental background will continue
to remain positive, and believe that markets could rise further in the
medium term.
4
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
INTERNATIONAL FUND
PERFORMANCE COMPARISON CHART AND TABLE
The following chart compares a $10,000 hypothetical investment made in
Seligman Henderson International Fund Class A shares, with and without
the maximum initial sales charge of 4.75%, since the commencement of
investment operations on April 7, 1992, through October 31, 1996, to a
$10,000 hypothetical investment made in the Lipper International Funds
Average (Lipper Int'l Average) and the Morgan Stanley Capital
International EAFE (Europe, Australasia, Far East) Index(R) (MSCI EAFE
Index) for the same period. The performances of Seligman Henderson
International Fund Class B and Class D shares are not shown in the chart,
but are included in the table below. It is important to keep in mind that
the Average and Index do not include any fees or sales charges.
<TABLE>
<CAPTION>
[THE FOLLOWING TABLE REPRESENTS A GRAPH]
SELIGMAN HENDERSON INTERNATIONAL FUND
WITH SALES WITHOUT LIPPER INTERNATIONAL
CHARGE SALES CHARGE FUNDS AVERAGE MSCI EAFE INDEX
------ ------------ ------------- ---------------
<S> <C> <C> <C> <C>
4/7/92 .......... 9,523.81 10,000.00 10,000.00 10,000.00
4/30/92 ......... 10,248.00 10,050.00
7/31/92 ......... 9,444.45 9,916.66 10,080.63 9,962.57
10/31/92 ........ 9,436.51 9,908.33 9,652.69 9,843.01
1/31/93 ......... 9,662.00 10,145.09 9,876.17 9,994.60
4/30/93 ......... 11,269.67 11,833.16 11,209.89 12,266.37
7/31/93 ......... 11,444.77 12,017.01 11,553.25 12,770.52
10/31/93 ........ 12,718.18 13,354.09 12,731.44 13,571.23
1/31/94 ......... 14,011.78 14,712.37 14,183.96 14,411.29
4/30/94 ......... 13,646.25 14,328.57 13,595.51 14,344.99
7/31/94 ......... 13,971.16 14,669.73 13,773.03 14,613.25
10/31/94 ........ 14,352.93 15,070.58 14,093.07 14,980.04
1/31/95 ......... 12,724.46 13,360.68 12,610.31 13,808.60
4/30/95 ......... 13,530.34 14,206.86 13,461.92 15,189.46
7/31/95 ......... 14,438.01 15,159.92 14,295.42 15,675.52
10/31/95 ........ 14,175.04 14,883.8 13,941.04 14,970.12
1/31/96 ......... 15,146.16 15,903.46 14,827.84 16,083.90
4/30/96 ......... 15,916.00 16,711.8 15,633.94 16,973.84
7/31/96 ......... 15,173.01 15,931.66 15,124.66 16,277.43
10/31/96 ........ 15,369.95 16,138.44 15,510.41 16,588.33
</TABLE>
TOTAL RETURNS*
FOR PERIODS ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
AVERAGE ANNUAL
--------------------------------------------
SINCE SINCE
INCEPTION ONE INCEPTION SINCE
4/22/96 YEAR 9/21/93 4/7/92
------------ ------- ------------ -------
CLASS A
<S> <C> <C> <C> <C>
With Sales Charge n/a 3.30% n/a 9.86%
Without Sales Charge n/a 8.43 n/a 11.04
CLASS B
With 5% CDSL (8.50)% n/a n/a n/a
Without CDSL (3.68) n/a n/a n/a
CLASS D
With 1% CDSL n/a 6.62 n/a n/a
Without CDSL n/a 7.62 7.08% n/a
LIPPER INT'L AVERAGE** (0.79) 11.26 8.09 10.04
MSCI EAFE INDEX** (2.27) 10.80 7.79 11.67
</TABLE>
* Return figures reflect any change in price per share and assume the
reinvestment of dividend and capital gain distributions. Return figures for
Class A shares are calculated with and without the effect of the initial
4.75% maximum sales charge. No adjustment was made to the performance of
Seligman Henderson International Fund Class A shares for periods prior to
September 21, 1993, the commencement date for the annual Administration,
Shareholder Services and Distribution Plan fee of up to 0.25% of average
daily net assets. Returns for Class B shares are calculated with and
without the effect of the maximum 5% contingent deferred sales load
("CDSL"), charged only on certain redemptions made within one year of the
date of purchase, declining to 1% in the sixth year and 0% thereafter.
Returns for Class D shares are calculated with and without the effect of
the 1% CDSL, charged only on redemptions made within one year of the date
of purchase.
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The
rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment
results.
** The Lipper Int'l Average and the MSCI EAFE Index are unmanaged benchmarks
that assume reinvestment of estimated dividends and do not reflect fees and
expenses. The monthly performance of the Lipper Int'l Average is used in
the performance chart and table. Investors may not invest directly in an
average or an index.
+ From April 30, 1996.
++ From September 30, 1993.
+++ From March 31, 1992.
5
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
INTERNATIONAL FUND
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1996
SHARES
---------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/96
- ------------- ----------- ------------
Accor ...................................... 9,115 9,115
Istituto Nazionale delle
Assicurazioni ........................... 794,477 794,477
Koninklijke Ahold .......................... 20,213 20,213
Mannesmann ................................. 3,127 3,127
Pharmacia & Upjohn ......................... 29,027 29,027
Samsung Electronics ........................ 14,690 14,690
Sandoz ..................................... 947 947
STET Societa' Finanzaria
Telefonica .............................. 461,410 461,410
VEBA ....................................... 21,989 21,989
Volkswagen ................................. 3,078 3,078
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
(1) Includes 23,049 shares received as a result of a 10-for-1 stock split.
SHARES
----------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/96
- -------------- ----------- ------------
Assicurazione Generali .................... 52,795 --
East Japan Railway ........................ 162 339
LaFarge Coppee ............................ 16,979 --
Nestle .................................... 1,222 --
Norsk Hydro ............................... 29,442 --
Perusahaan Otomobil Nasional .............. 115,000 73,000
Roussel Uclaf ............................. 5,979 --
Siemens ................................... 25,610(1) --
Unilever .................................. 43,000 --
YPF Sociedad An--nima (ADRs) .............. 30,000 --
PERCENTAGE OF INVESTMENTS BY COUNTRY
AT OCTOBER 31, 1996
Japan 23.7%
United Kingdom 16.7
France 8.8
Germany 8.3
Sweden 4.8
Switzerland 4.8
Netherlands 4.5
Spain 4.5
Australia 3.5
Hong Kong 2.9
Italy 2.3
Malaysia 2.1
Singapore 1.9
Brazil 1.3
Taiwan 1.2
India 1.1
Mexico 1.1
South Korea 1.1
Thailand 0.9
Denmark 0.8
Indonesia 0.8
Peru 0.7
China 0.5
Philippines 0.5
Croatia 0.4
Czech Republic 0.4
Hungary 0.4
- ---------------------------------------
Total 100.0%
MAJOR PORTFOLIO HOLDINGS
AT OCTOBER 31, 1996
SECURITY VALUE
- ----------- ------------
Pioneer Electronic .................................... $2,428,697
Toshiba ............................................... 2,399,368
Nippon Telegraph & Telephone .......................... 2,393,023
East Japan Railway .................................... 1,555,919
Siebe ................................................. 1,415,637
Granada Group ......................................... 1,381,900
CSK ................................................... 1,352,348
Iberdrola ............................................. 1,351,023
ING Groep ............................................. 1,347,683
Tesco ................................................. 1,347,407
6
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
EMERGING MARKETS GROWTH FUND
[GROUP PHOTO]
INTERNATIONAL TEAM:(FROM LEFT) PETER BASSETT (PORTFOLIO MANAGER), JAMES SYME,
MONICA BALL, NICHOLAS VARDY, ELEANOR DALE. MISSING FROM PHOTO:KIRSTEEN MORRISON
PETER BASSETT,
PORTFOLIO MANAGER
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND, WHICH COMMENCED OPERATIONS ON
MAY 28, 1996, SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY IN
EQUITY SECURITIES OF EMERGING MARKETS AROUND THE WORLD.
Since the commencement of Seligman Henderson Emerging Markets Growth Fund
on May 28, 1996, the International Finance Corporation Composite, a
leading emerging market index, fell 4.8%, due particularly to weakness in
the Pacific region. This decline occurred despite improving fundamentals
in the emerging markets, increasing evidence of a slowdown in the US
economy, and stable US interest rates. However, economic growth in
emerging markets remained strong, with recoveries in Latin America,
Northeast Asia, and Southern Europe offsetting slowdowns in India and
some parts of Southeast Asia.
CENTRAL/SOUTHERN EUROPE
The economies of Central and Southern Europe continued to recover due to
increasing economic growth rates in Central Europe and an economic
recovery in Southern Europe. The markets within these regions showed
strength, with solid gains in Hungary, Russia, the Baltic Republics, and
Croatia. Since inception, the Fund has had significant exposure to
Central/Southern Europe and now has a weighting of 20.4% in the region,
with many profitable investments in companies such as Komercni Banka in
the Czech Republic, a financial institution, EGIS in Hungary, a
pharmaceutical manufacturer, and Gazprom in Russia, a natural gas
producer.
PACIFIC
Within the Pacific, Taiwan was the best-performing larger market. The
Fund's exposure to Taiwan is in companies such as China Steel, one of the
world's leading steel producers. In China, both locally- and Hong
Kong-listed equity securities performed well. As a result, the Fund
benefited from its overweight position of 7.5% in China, and specifically
from Qingling Motors, a Chinese manufacturer of lightweight trucks listed
in Hong Kong. Elsewhere, markets were disappointing, with Thailand
declining the most. As a whole, Pacific markets have fallen 7.7% since
the end of May, and therefore, our overall exposure to the region was
reduced, to end the period at approximately 36%.
INDIAN SUBCONTINENT/AFRICA
The Indian Subcontinent/African markets were largely disappointing in the
period, with declines in South Africa, India, and Pakistan. The Fund's
relatively modest position in the Indian Subcontinent, however, limited
the region's effect on the portfolio. Weakness in the South African Rand
contributed to the South African market's poor performance in US Dollar
terms. Nonetheless, export stocks such as Anglo-American Corporation of
South Africa and Gencor were added as they should benefit from a weaker
Rand. In India, additions were made to solid domestic companies showing
strong profit growth, as they should lead the local equity market when it
rebounds. One such stock is Tata Engineering and Locomotive, the dominant
manufacturer of commercial vehicles in India. Elsewhere, Pakistan became
increasingly unstable during the period, and we therefore avoided
investment in the market.
7
<PAGE>
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SELIGMAN HENDERSON
EMERGING MARKETS GROWTH FUND
LATIN AMERICA
Since the launch of the Fund, Latin American markets were flat overall.
However, particular markets and selected stocks showed strong gains.
Mexico fell due to currency weakness, and Argentina fell as the political
environment worsened. Meanwhile, Brazil, the largest market within the
region, rose 10% as the benefits of the Real Reform Plan continued to
trickle down. The Fund saw solid gains in several Brazilian utility
stocks, including Cemig and Companhia Energetica de Sao Paulo. Despite
the decline of the Argentine market, Disco, a retailer, also performed
well. Further, the Fund saw sizeable returns in Chile from its holdings
in Santa Isabel, a retailer.
OUTLOOK
We believe the outlook for the Fund, and for emerging markets in general,
is positive, as strong growth in most emerging economies is anticipated
in 1997. It is also expected that the combination of growth and reform,
experienced in Central/Southern Europe in 1996, will continue and that
opportunities should present themselves in other markets, with good
prospects in Brazil, India, and China.
8
<PAGE>
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SELIGMAN HENDERSON
EMERGING MARKETS GROWTH FUND
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON CHART AND TABLE
The following chart compares a $10,000 hypothetical investment made in Seligman
Henderson Emerging Markets Growth Fund, with and without the maximum initial
sales charge of 4.75% for Class A shares, with the maximum 5% contingent
deferred sales load ("CDSL") for Class B shares, and with the 1% CDSL for Class
D shares, since the commencement of operations on May 28, 1996, through October
31, 1996, to a $10,000 hypothetical investment made in the Lipper Emerging
Markets Funds Average (Lipper EMF Average) and the Morgan Stanley Capital
International Emerging Markets Free Index (MSCI EMF Index) for the same period.
It is important to keep in mind that the Average and Index do not include any
fees or sales charges.
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
<TABLE>
<CAPTION>
CLASS A WITH CLASS A WITHOUT CLASS B WITH CLASS D WITH
SALES CHARGE SALES CHARGE CDSL CDSL LIPPER EMF AVG MSCI EMFINDEX
---------- ---------- ---- ---- -------------- -------------
<C> <C> <C> <C> <C> <C> <C> <C>
5/28/96 9,538.29 10,014.00 10,014.00 10,014.00 10,000.00 10,000.00
6/30/96 9,498.27 9,971.99 9,985.99 9,985.99 10,126.00 10,062.00
7/31/96 9,018.02 9,467.79 9,453.78 9,453.78 9,523.50 9,374.77
8/31/96 9,404.89 9,873.95 9,859.94 9,859.94 9,794.92 9,614.76
9/30/96 9,404.89 9,873.95 9,859.94 9,859.94 9,854.67 9,697.45
10/31/96 9,044.70 9,495.80 8,994.40 9,373.11 9,590.57 9,438.52
</TABLE>
TOTAL RETURNS*
FOR THE PERIOD ENDED OCTOBER 31, 1996
SINCE
5/28/96
------------
CLASS A
With Sales Charge (9.55)%
Without Sales Charge (5.04)
CLASS B
With 5% CDSL (10.06)
Without CDSL (5.32)
CLASS D
With 1% CDSL (6.27)
Without CDSL (5.32)
LIPPER EMF AVERAGE** (4.09)+
MSCI EMF INDEX** (5.61)+
* Return figures reflect any change in price per share and assume the
reinvestment of dividend and capital gain distributions. Return figures
for Class A shares are calculated with and without the effect of the
initial 4.75% maximum sales charge. Returns for Class B shares are
calculated with and without the effect of the maximum 5% contingent
deferred sales load ("CDSL"), charged only on certain redemptions made
within one year of the date of purchase, declining to 1% in the sixth
year and 0% thereafter. Returns for Class D shares are calculated with
and without the effect of the 1% CDSL, charged only on redemptions made
within one year of the date of purchase.
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The
rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment
results.
** The Lipper EMF Average and the MSCI EMF Index are unmanaged benchmarks
that assume reinvestment of estimated dividends and do not reflect fees
and expenses. The monthly performance of the Lipper EMFAverage is used in
the performance comparison chart and table. Investors may not invest
directly in an average or an index.
+ From May 31, 1996.
9
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
EMERGING MARKETS
GROWTH FUND
PERCENTAGE OF INVESTMENTS BY COUNTRY
AT OCTOBER 31, 1996
Brazil 13.2%
India 7.6
Mexico 7.6
China 7.5
Taiwan 6.4
Malaysia 6.0
South Africa 6.0
South Korea 5.6
Thailand 4.4
Czech Republic 4.2
Philippines 4.2
Hungary 4.1
Croatia 4.0
Argentina 3.9
Portugal 3.1
Chile 2.8
Indonesia 1.8
Russia 1.8
Turkey 1.8
Peru 1.5
Greece 1.4
Egypt 1.1
- ---------------------------------------
Total 100.0%
MAJOR PORTFOLIO HOLDINGS
AT OCTOBER 31, 1996
SECURITY VALUE
- ----------- -----------
Telebras (ADRs) ........................................ $1,457,286
Cemig (ADRs) ........................................... 1,034,111
Samsung Electronics (GDRs) ............................. 1,007,301
Pliva (GDRs) ........................................... 975,000
Gedeon Richter (GDRs) .................................. 864,000
Companhia Vale do Rio Doce (ADRs) ...................... 819,940
Disco (ADRs) ........................................... 810,000
Formosa Fund ........................................... 795,420
EGIS ................................................... 783,459
Hindalco Industries (GDRs) ............................. 781,650
As Seligman Henderson Emerging Markets Growth Fund began operations on May 28,
1996, "Largest Portfolio Changes" are not applicable for this reporting period.
10
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL GROWTH
OPPORTUNITIES FUND
NITIN MEHTA AND
LORIS MUZZATTI,
PORTFOLIO MANAGERS
[GROUP PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) DAVID THORNTON, PETER BASSETT, MICHAEL
WOOD-MARTIN, HEATHER MANNERS, IAIN CLARK, STACEY NAVIN, BEN ELWES, NITIN MEHTA
(PORTFOLIO MANAGER). MISSING FROM PHOTO: KIRSTEEN MORRISON US TEAM:
[GROUP PHOTO]
(FROM LEFT) LOUISE OH, NATALIE BILLON, LOUISE KNIGHT, DAVE LEVY, KEN LONDONER,
(SEATED) LORIS MUZZATTI (PORTFOLIO MANAGER). MISSING FROM PHOTO: MICHELLE BORRE
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND, WHICH COMMENCED OPERATIONS
ON NOVEMBER 1, 1995, SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY
IN THE STOCKS OF COMPANIES THAT HAVE THE POTENTIAL TO BENEFIT FROM GLOBAL
ECONOMIC OR SOCIAL TRENDS.
Growth investing around the world saw mixed results in the last 12
months. In the UK and Continental Europe, growth stocks significantly
outperformed value stocks, while disappointing economic growth in the
Pacific led to much weaker performance. Nonetheless, we have continued to
focus our portfolio strategy on four major global themes: "Consumer is
King;" "Global Trade;" "Productivity;" and "Quality of Life."
UNITED STATES
In the past 12 months, the US financial markets were influenced by
rapidly changing perceptions about the pace of economic growth and the
future path of interest rates, as well as the impending presidential
election, which further increased investor uncertainty. However, these
issues were resolved to the advantage of investors. The economy's growth
remained healthy with inflationary pressures abating, thus allowing the
Federal Reserve Board to leave interest rates unchanged at its September
24 meeting. Meanwhile, the financial markets reacted indifferently to the
presidential election, having already anticipated its outcome. After a
short setback in July, the equity markets began their ascent, climbing to
new highs by October 31.
During the period, the US weighting was increased slightly and it now
stands at 26.3%. Under the Consumer is King theme, Saks Holdings was
purchased, due to its rapid expansion potential, as was Liz Claiborne,
which has positive earnings growth potential. In the Quality of Life
theme, the focus was on tourism, and Sun International Hotels, Sabre
Group Holdings, and Viacom were purchased. The Fund's exposure to
technology was also increased after the brief market reversal in July,
with the purchase of Intel and increases in Microsoft and Sterling
Software.
The stable economic environment in the US should provide a positive
backdrop for the ongoing performance of select growth stocks. The Fund's
portfolio holdings in the US are attractively valued and have good
long-term prospects.
CONTINENTAL EUROPE
As foreseen in our April 30, 1996, Mid-Year Report, the outlook for the
economies in Continental Europe changed significantly in the last six
months as continued declines in interest rates finally yielded evidence
of an economic recovery. In addition, weaker exchange rates against the
US Dollar improved the prospects for exports.
We believe that economic growth will accelerate and spread throughout
Continental Europe. Therefore, the Fund's Continental European weighting
was substantially increased to approximately 26% with the addition of
several economically-sensitive growth stocks. For example, in the
Consumer is King theme, the Fund invested in three leading brands: SMH
Neuenberg in Switzerland, the maker of Swatch watches; Puma in Germany, a
producer of athletic footwear; and Porsche in Germany, a manufacturer of
luxury sports cars. In the Quality of Life theme, two hotel companies
were added: Accor in France and Sol Melia in Spain. Finally, under the
Productivity theme, two French securities were purchased: SGS-Thomson
Microelectronics and Valeo, which are, respectively, a specialized
semiconductor maker, and an auto components manufacturer benefiting from
the consolidation among auto suppliers.
11
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL GROWTH
OPPORTUNITIES FUND
JAPAN
Japan held great promise for economic growth six months ago, but
ultimately failed to meet our expectations. Despite very low interest
rates, falling bond yields, and the stimulating effects of a weaker
currency, domestic and foreign equity investors remained on the
sidelines. The resulting stock market performance was among the poorest
in the world. Although we believe that Japan's economic recovery will
eventually gain momentum, it may take longer than originally expected.
Consequently, the Fund's exposure to the market was reduced, to end the
period at 16.9%.
PACIFIC
Overall, the Pacific markets experienced mixed fortunes. While Hong Kong
rose significantly due to improving property prices and the receding
likelihood of a US interest rate increase, other markets fared poorly.
The decline in semiconductor prices and other commodity electronic
products caused a sharp slowdown in exports, notably in Singapore,
impeding economic growth. As a result, corporate profit forecasts were
downgraded. Furthermore, political problems, particularly in Thailand and
Indonesia, added to a deteriorating investment environment. While we
believe that the setback in the overall region's export growth is largely
a cyclical phenomenon, and therefore temporary, the recovery may take
some time. Therefore, the Fund's weighting in the Pacific markets was
reduced, to end the period at approximately 11.5%.
EMERGING MARKETS
Performance in the emerging markets also varied widely. The Fund's
investments in Central Europe and Latin America enjoyed handsome returns,
while those in South Africa suffered from currency depreciation.
Additionally, the gains made in India in the first quarter of 1996 were
significantly reduced.
Recently, the Fund made its first investment in Russia, purchasing
Gazprom, the world's leading provider of natural gas. With ownership of a
quarter of the world's gas reserves, and rising demand from Western
Europe, we believe that Gazprom could enjoy growing profitability.
OUTLOOK
We believe that a combination of higher global economic growth, subdued
inflation, and widespread corporate restructuring supports a positive
investment environment in which the current equity bull market can
continue. Just as the US market enjoyed the rewards of a long business
expansion in the last few years, we believe international markets are now
poised to benefit from similar conditions. In particular, we favor the
outlook for Continental Europe. A cyclical economic recovery, together
with structural improvements, should allow corporate profits to grow
substantially over the next few years. We are therefore optimistic for
the Fund's investments for the next fiscal year and continue to see ample
opportunities for growth investing around the world.
12
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL GROWTH
OPPORTUNITIES FUND
PERFORMANCE COMPARISON CHART AND TABLE
The following chart compares a $10,000 hypothetical investment made in Seligman
Henderson Global Growth Opportunities Fund, with and without the maximum initial
sales charge of 4.75% for Class A shares, and with the 1% contingent deferred
sales load ("CDSL") for Class D shares, since the commencement of operations on
November 1, 1995, through October 31, 1996, to a $10,000 hypothetical investment
made in the Lipper Global Funds Average (Lipper Global Average) and the Morgan
Stanley Capital International World Index (MSCI World Index) for the same
period. The performance of Seligman Henderson Global Growth Opportunities Fund
Class B shares is not shown in the chart but is included in the table below. It
is important to keep in mind that the Average and Index do not include any fees
or sales charges.
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS D LIPPER MSCI WORLD
WITH WITHOUT WITH GLOBAL MSCI WORLD
SALES CHARGE SALES CHARGE CDSL AVERAGE INDEX
------------ ------------ ---- ------- -----
<S> <C> <C> <C> <C> <C>
11/1/95 9,520.00 10,000.00 10,000.00 10,000.00 10,000.00
11/30/95 9,560.00 10,042.02 10,028.01 10,187.00 10,349.00
12/31/95 9,840.00 10,336.13 10,322.13 10,371.38 10,653.26
1/31/96 10,106.66 10,616.24 10,602.24 10,674.23 10,848.22
2/29/96 10,293.33 10,812.32 10,784.31 10,804.45 10,916.56
3/31/96 10,560.00 11,092.44 11,064.42 10,977.33 11,099.96
4/30/96 10,880.00 11,428.57 11,386.55 11,376.90 11,363.03
5/31/96 11,066.66 11,624.65 11,568.63 11,523.66 11,374.39
6/30/96 11,093.33 11,652.66 11,596.64 11,483.33 11,433.54
7/31/96 10,626.66 11,162.46 11,106.44 10,951.65 11,031.08
8/31/96 10,826.66 11,372.55 11,302.52 11,250.63 11,160.14
9/30/96 10,986.66 11,540.61 11,456.58 11,583.65 11,598.73
10/31/96 10,773.33 11,316.52 11,132.49 11,568.59 11,682.24
</TABLE>
TOTAL RETURNS*
FOR PERIODS ENDED OCTOBER 31, 1996
SINCE ONE YEAR
INCEPTION AND SINCE
4/22/96 11/1/95
------------ ------------
CLASS A
With Sales Charge n/a 7.73%
Without Sales Charge n/a 13.17
CLASS B
With 5% CDSL (5.24)% n/a
Without CDSL (0.25) n/a
CLASS D
With 1% CDSL n/a 11.33
Without CDSL n/a 12.33
LIPPER GLOBAL AVERAGE** 1.68 15.69++
MSCI WORLD INDEX** 2.81 16.82++
* Return figures reflect any change in price per share and assume the
reinvestment of dividend and capital gain distributions. Return figures for
Class A shares are calculated with and without the effect of the initial
4.75% maximum sales charge. Returns for Class B shares are calculated with
and without the effect of the maximum 5% contingent deferred sales load
("CDSL"), charged only on certain redemptions made within one year of the
date of purchase, declining to 1% in the sixth year and 0% thereafter.
Returns for Class D shares are calculated with and without the effect of the
1% CDSL, charged only on redemptions made within one year of the date of
purchase.
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The
rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment
results.
** The Lipper Global Average and the MSCI World Index are unmanaged benchmarks
that assume reinvestment of estimated dividends and do not reflect fees and
expenses. The monthly performance of the Lipper Global Average is used in
the performance comparison chart and table. Investors may not invest
directly in an average or an index.
+ From April 30, 1996.
++ From October 31, 1995.
13
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL GROWTH
OPPORTUNITIES FUND
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1996
SHARES
----------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/96
- ------------- ----------- ------------
Accor ......................................... 16,763 16,763
Intel ......................................... 17,000 17,000
Liz Claiborne ................................. 43,000 43,000
Porsche ....................................... 2,480 2,480
SGS-Thomson
Microelectronics ........................... 51,770 51,770
Saks Holdings ................................. 50,000 50,000
Sol Melia ..................................... 77,226 77,226
Sun International Hotels ...................... 42,000 42,000
Tabacalera .................................... 48,400 48,400
Valeo ......................................... 38,460 38,460
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
(1) Includes 26,400 shares received as a result of a 2-for-1 stock split.
SHARES
----------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/96
- -------------- ----------- ------------
Amgen .................................... 19,000 7,500
BSES (GDRs) .............................. 75,000 --
Boeing ................................... 12,000 6,900
Disney, Walt ............................. 19,700 --
Lojas Americanas (ADRs) .................. 48,000 --
LVMH (Louis Vuitton
Moet-Hennessy) ........................ 6,310 --
Nippon Television Network ................ 6,200 --
PepsiCo .................................. 31,900(1) 20,000
H.M. Sampoerna ........................... 142,000 --
STIC ..................................... 663,000 --
PERCENTAGE OF INVESTMENTS BY COUNTRY
AT OCTOBER 31, 1996
United States 26.3%
Japan 16.9
United Kingdom 10.5
Sweden 6.9
France 6.2
Germany 4.7
Hong Kong 3.7
India 2.9
Spain 2.3
Australia 2.2
Thailand 1.8
Hungary 1.7
Singapore 1.5
South Africa 1.4
Switzerland 1.4
Denmark 1.2
Netherlands 1.2
Brazil 1.0
Malaysia 1.0
Finland 0.9
Norway 0.8
Russia 0.8
South Korea 0.8
Italy 0.7
Peru 0.7
China 0.4
Indonesia 0.1
- ---------------------------------------
Total 100.0%
MAJOR PORTFOLIO HOLDINGS
AT OCTOBER 31, 1996
SECURITY VALUE
- ----------- -----------
Serm Suk ................................................ $2,956,375
Gedeon Richter .......................................... 2,862,000
SGS-Thomson Microelectronics ............................ 2,738,383
L.M. Ericsson Telefon (Series B) ........................ 2,649,288
Kyocera ................................................. 2,504,432
Secom ................................................... 2,439,491
Sanyo Shinpan Finance ................................... 2,368,407
Shimachu ................................................ 2,334,796
Microsoft ............................................... 2,320,581
Valeo ................................................... 2,303,943
14
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL SMALLER
COMPANIES FUND
IAIN C. CLARK AND
ARSEN MRAKOVCIC,
PORTFOLIO MANAGERS
[CAPTION OF GROUP PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) HEATHER MANNERS, ANDREW STACK, WILLIAM GARNETT,
STEPHEN PEAK. MISSING FROM PHOTO: IAIN CLARK (PORTFOLIO MANAGER), MIRANDA
RICHARDS
US TEAM: (FROM LEFT) LARRY ROSSO, STORM BOSWICK, CAROLYN ROGERS, GUS SCACCO, TED
HILLENMEYER, (SEATED) ARSEN MRAKOVCIC (PORTFOLIO MANAGER), PAUL WICK, BRUCE
ZIRMAN. MISSING FROM PHOTO:PAUL KRIEGER
[PHOTO]
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND, WHICH COMMENCED INVESTMENT
OPERATIONS ON SEPTEMBER 9, 1992, SEEKS LONG-TERM CAPITAL APPRECIATION BY
INVESTING IN SMALLER-COMPANY STOCKS IN THE US AND AROUND THE WORLD.
Overall, with most regions experiencing a rally in the first half of 1996
and then a sharp correction in July, smaller companies around the world
had a turbulent 12 months. Performance worldwide was less consistent
following July. While smaller companies in Hong Kong and Malaysia reached
new highs, they were still below their July levels elsewhere.
UNITED STATES
In the US, the initial public offering market that supported
smaller-company performance earlier in the year began to taper off in
May. It slowed dramatically in July and the US smaller-company market
fell more than 7%. Earlier this year we reduced our weighting in the US
to 31.1%, from a weighting of approximately 37% in November 1995. This
reduction limited the impact of the July drop on the Fund's performance.
We also took the decline of smaller-company stocks as a buying
opportunity, using available cash to purchase companies such as Watson
Pharmaceuticals, a manufacturer of off-patent drugs, Maxim Integrated
Products, a manufacturer of integrated circuits, and Drilex
International, a provider of precision drilling products, which were very
attractive following the setback.
Within three months of the July correction, larger-company indices marked
new highs due to changing perceptions of economic growth and the future
direction of interest rates. Smaller companies, however, did not match
the surge of larger companies. The smaller-company indices remained below
their previous highs despite evidence of better earnings growth and more
reasonable valuation levels. However, current US smaller-company
valuations could provide support for stronger future performance.
UNITED KINGDOM
The last six months were much stronger for the UK than the November 1995
to April 1996 period. In US Dollar terms, the UK was the best performing
market for the six months ended October 31. However, in absolute terms,
smaller-company indices were still short of the levels previous to the
July setback, and smaller companies underperformed larger companies.
Nonetheless, there is little doubt that the economic background in the UK
has improved. This year was marked by the end of the property slump,
falling unemployment, and strong consumer spending. Indeed, interest
rates were raised in order to dampen strong consumption. In addition,
Sterling strengthened over the period, climbing almost 9% against the US
Dollar since May.
Throughout the period, the Fund's overall UK weighting remained unchanged
at approximately 15%. However, we shifted the portfolio to increase the
Fund's exposure to the outsourcing/technology sectors, with the purchase
of CRT Group, a provider of training and recruitment services, and Kewill
Systems, a computer systems and services company. Four biotechnology
stocks were also added: Chiroscience Group; Peptide Therapeutics; Shire
Pharmaceuticals; and Vanguard Medica Group.
CONTINENTAL EUROPE
Overall, Continental European markets also showed improved performance.
In US Dollar terms, Continental European smaller companies rose almost 6%
in the six months prior to July. Thereafter, the pattern of performance
matched global trends -- an equity market setback in July followed by
underperformance compared to larger companies. As the summer progressed
and clearer evidence of economic recovery emerged, particularly from June
onwards,
15
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL SMALLER
COMPANIES FUND
Continental European governments shifted their attention to fiscal policy
and meeting the Maastricht criteria for entry into the European Monetary
Union by 1999.
Continental Europe remains our favored area for the longer term. We
anticipate that economic growth should strengthen in the coming months
and consumer spending should continue to improve. In light of this
forecast, our exposure to Continental Europe was slightly increased in
June, and at this time the portfolio's weighting stands at 27.5%.
Existing holdings were added to, and new stocks were purchased: Rauma
Group (Finland), a manufacturer of forestry-related machinery; Assystem
(France), an industrial consultant; La Doria (Italy), a food producer;
L'Europeenne d'Extincteurs (France), a distributor of fire extinguishers;
and Hucke (Germany), a manufacturer of textiles and clothing.
JAPAN
Japan seemed to hold great promise at April 30, but failed to meet our
expectations and reward our increased weighting. The poor market
performance was due to the slow pace of economic recovery in the second
quarter of 1996, moribund consumer spending, and the recent Tankan Survey
-- a measure of business confidence -- that suggested a slowdown in
manufacturing. The weakness of the Yen, which benefits larger exporters
more than domestically-oriented smaller companies, also contributed to
the disappointing performance of smaller companies.
Despite recent underperformance, we still like this region for its
long-term potential. Historically, smaller-company stocks have
outperformed as the economy recovered. Though economic growth has taken
longer and has been more tentative than initially anticipated, we do not
doubt that the recovery will come, and that smaller companies should
benefit when it does. The Fund's Japanese weighting is focused on
cyclical stocks such as Namura Shipbuilding, a shipbuilder, Tsubakimoto
Nakishima, a manufacturer of ball bearings, and Sanyo Special Steel, a
steel manufacturer.
PACIFIC
After delivering strong market performance up to April 30, 1996, smaller
companies in the Pacific were weak in the past six months due to
collapsing markets in Thailand, South Korea, and Indonesia. It became
clear that growth in the Pacific region was slowing, albeit from high
levels, partly as a result of a decrease in exports. This raised concerns
about currencies and the balance of payments. The Fund's weighting in the
Pacific was decreased in the period to 7.3%, though exposure in Malaysia
was increased with the purchases of Southern Bank, a commercial bank, and
Sime UEP Properties, a property company, and in Hong Kong with the
purchases of Mandarin Oriental, a manager of hotels, and Guangnan
Holdings, a food distributor.
OUTLOOK
Going forward, it is anticipated that the global economy will experience
the strongest growth seen in a decade, and that any resulting increase in
inflation or interest rates is likely to be muted. Such an environment
should provide a constructive backdrop for the performance of smaller
companies around the world.
We believe Continental Europe offers strong potential for the coming
year, and we will maintain our weighting there. Japanese smaller
companies will require firm evidence of the economic recovery taking hold
in order to perform well, but there are strong possibilities for 1997.
Elsewhere, select smaller companies in the US and UK offer attractive
opportunities, with strong long-term prospects.
16
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN
HENDERSON
GLOBAL SMALLER
COMPANIES
FUND
PERFORMANCE COMPARISON CHART AND TABLE
The following chart compares a $10,000 hypothetical investment made in Seligman
Henderson Global Smaller Companies Fund Class A shares, with and without the
maximum initial sales charge of 4.75%, since the commencement of investment
operations on September 9, 1992, through October 31, 1996, to a $10,000
hypothetical investment made in the Lipper Global Small Company Funds Average
(Lipper GSC Average) and the Morgan Stanley Capital International World Index
(MSCI World Index) for the same period. The performances of Seligman Henderson
Global Smaller Companies Fund Class B and Class D shares are not shown in the
chart, but are included in the table below. It is important to keep in mind that
the Average and Index do not include any fees or sales charges.
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
CLASS A CLASS A LIPPER
WITH WITHOUT GSC MSCI WORLD
SALES CHARGE SALES CHARGE AVERAGE INDEX
------------ ------------ ------- -----
8/31/92 9,520.00 10,000.00 10,000.00 10,000.00
10/31/92 9533.33 10,014.00 10,080.67 9,644.
10,527.99 11,058.82 11,016.17 9,934.28
11,342.97 11,914.89 11,574.32 11,263.49
12,224.76 12,841.14 12,258.93 11,667.85
10/31/93 13,333.67 14,005.96 13,839.31 12,313.08
15,149.91 15,913.78 14,979.59 12,995.23
14,894.5 15,645.49 14,210.16 12,659.95
14,262.69 14,981.83 13,814.77 12,904.29
10/31/94 16,037.13 16,845.73 14,590.18 13,318.52
14,756.97 15,501.03 13,353.59 12,677.9
16,461.30 17,291.29 14,182.38 13,960.9
18,567.46 19,503.65 15,926.7 14,788.78
10/31/95 19,260.27 20,231.39 15,830.86 14,654.2
19,921.84 20,926.32 16,567.49 15,896.88
22,540.4 23,676.9 18,455.92 16,650.39
21,930.39 23,036.14 17,539.05 16,165.86
10/31/96 22,525.52 23,661.28 18,238.36 17,119.65
TOTAL RETURNS*
FOR PERIODS ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
AVERAGE ANNUAL
--------------------------------------------------
SINCE SINCE
INCEPTION ONE INCEPTION SINCE
4/22/96 YEAR 5/3/93 9/9/92
------------ -------- ------------ ------------
CLASS A
<S> <C> <C> <C> <C>
With Sales Charge n/a 11.42% n/a 21.64%
Without Sales Charge n/a 16.95 n/a 23.09
CLASS B
With 5% CDSL (3.06)% n/a n/a n/a
Without CDSL 1.94 n/a n/a n/a
CLASS D
With 1% CDSL n/a 15.14 n/a n/a
Without CDSL n/a 16.14 20.63% n/a
LIPPER GSC AVERAGE** (1.18)+ 15.21 13.85++ 15.50+++
MSCI WORLD INDEX** 2.81+ 16.82 12.69++ 13.77+++
</TABLE>
* Return figures reflect any change in price per share and assume the
reinvestment of dividend and capital gain distributions. Return figures for
Class A shares are calculated with and without the effect of the initial
4.75% maximum sales charge. Returns for Class B shares are calculated with
and without the effect of the maximum 5% contingent deferred sales load
("CDSL"), charged only on certain redemptions made within one year of the
date of purchase, declining to 1% in the sixth year and 0% thereafter.
Returns for Class D shares are calculated with and without the effect of
the 1% CDSL, charged only on redemptions made within one year of the date
of purchase. Performance data quoted represent changes in prices and assume
that all distributions within the periods are invested in additional
shares. The rates of return will vary and the principal value of an
investment will fluctuate. Shares, if redeemed, may be worth more or less
than their original cost. Past performance is not indicative of future
investment results.
** The Lipper GSC Average and the MSCI World Index are unmanaged benchmarks
that assume reinvestment of estimated dividends and do not reflect fees and
expenses. The monthly performance of the Lipper GSCAverage is used in the
performance comparison chart and table. Investors may not invest directly
in an average or an index.
+ From April 30, 1996.
++ From April 30, 1993.
+++ From August 31, 1992.
17
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL SMALLER
COMPANIES FUND
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1996
SHARES
---------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/96
- ------------- ----------- ------------
AmeriSource Health (Class A) .............. 150,000 150,000
Assystem .................................. 78,780 78,780
Berg Electronics .......................... 300,000 350,000
CalEnergy ................................. 275,000 425,000
L'Europeenne d'Extincteurs ................ 131,660 131,660
Memtec (ADRs) ............................. 150,000 150,000
Rauma Group ............................... 431,500 431,500
Roosevelt Financial Group ................. 300,000 360,000
Universal Outdoor Holdings ................ 255,000 255,000
Waters .................................... 244,000 244,000
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
(1) Includes 10,000 shares received as a result of a 3-for-2 stock split.
SHARES
---------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/96
- -------------- ----------- ------------
Anchor Gaming ............................. 39,000 --
Applied Extrusion
Technologies ........................... 200,000 --
Chesapeake Energy ......................... 40,000(1) --
D'Ieteren Trading ......................... 30,815 --
Hoganas (Series B) ........................ 95,900 --
Marieberg Tidnings (Series A) ............. 82,700 --
Oakley .................................... 86,000 --
Outdoor Systems ........................... 59,700 --
StrataCom ................................. 55,000 --
Sumitomo Sitix ............................ 85,000 --
PERCENTAGE OF INVESTMENTS BY COUNTRY
AT OCTOBER 31, 1996
United States 31.1%
Japan 18.4
United Kingdom 14.8
France 5.0
Sweden 4.8
Germany 4.7
Finland 4.2
Hong Kong 2.1
Netherlands 1.9
Switzerland 1.8
Australia 1.7
Norway 1.7
Denmark 1.6
Malaysia 1.5
Austria 0.9
Italy 0.9
Singapore 0.9
Canada 0.5
Indonesia 0.5
India 0.2
South Korea 0.2
Taiwan 0.2
Thailand 0.2
Argentina 0.1
Brazil 0.1
- ---------------------------------------
Total 100.0%
MAJOR PORTFOLIO HOLDINGS
AT OCTOBER 31, 1996
SECURITY VALUE
- ----------- ------------
CalEnergy .............................................. $12,325,000
Berg Electronics ....................................... 9,887,500
Rauma Group ............................................ 7,882,233
L'Europeenne d'Extincteurs ............................. 7,737,977
Waters ................................................. 7,564,000
Universal Outdoor Holdings ............................. 7,442,813
Dendrite International ................................. 7,321,875
Assystem ............................................... 6,799,004
EKORNES ................................................ 6,562,089
Moebel Walther ......................................... 6,477,509
18
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL TECHNOLOGY FUND
BRIAN ASHFORD-RUSSELL
AND PAUL H. WICK,
PORTFOLIO MANAGERS
[CAPTION GROUP PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) TIM WOOLEY, EMMA PARKINSON, NICKI BARKER, BRIAN
ASHFORD-RUSSELL (PORTFOLIO MANAGER)
[PHOTO]
US TEAM: (FROM LEFT) LARRY ROSSO, STORM BOSWICK, CAROLYN ROGERS, GUS SCACCO, TED
HILLENMEYER, (SEATED) ARSEN MRAKOVCIC, PAUL WICK (PORTFOLIO MANAGER), BRUCE
ZIRMAN. MISSING FROM PHOTO:PAUL KRIEGER
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND, WHICH COMMENCED OPERATIONS ON MAY 23,
1994, SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING IN SECURITIES OF
COMPANIES AROUND THE WORLD THAT OPERATE IN THE TECHNOLOGY AND TECHNOLOGY-RELATED
INDUSTRIES.
In the last 12 months, modest economic growth and subdued inflationary
pressures provided a healthy backdrop for the equity markets worldwide.
Though Japan and a few countries in the Pacific were notable exceptions,
equity share prices generally increased. The global technology market, on
the other hand, gave its investors quite an exciting ride. Volatility was
most pronounced in the US, where the first half of 1996 brought a
significant inventory correction in the personal computer (PC) and
components markets.
WORLDWIDE TECHNOLOGY MARKETS
Indeed, US technology shares suffered a dramatic correction in July, and,
at their lows, had fallen more than 20% in little more than six weeks'
time. More important, individual shares fell far more dramatically, none
so much as the many initial public offerings that came to market in late
Spring. In Asia, technology shares also suffered from the sharp falls in
component prices that accompanied the liquidation of surplus inventory.
European shares, however, provided a stabilizing influence in the global
technology market, and, although returns in the period were decidedly
mixed, individual companies performed well.
Since July, there has been a recovery in the technology market. In
October, the conditions that had undermined technology stocks seemed to
have finally ended. The inventory correction that adversely affected the
technology market for much of the last 12 months, though painful while it
lasted, seemed to have drawn to a close. PC demand appeared to be
stronger going into the fourth quarter, and was particularly robust
within the corporate market. Consequently, at October 31, technology
shares around the world looked far healthier than they had for quite some
time.
INVESTMENT STRATEGY
With regard to country and industry allocation, the Fund's weighting in
the US was increased in August to almost 57%, and the industry mix was
changed significantly from a year ago. Early in 1996, we de-emphasized
the portfolio's exposure to semiconductors, which was a large portion of
the Fund's US assets in 1995, in view of the deteriorating supply and
demand conditions. These assets were redeployed into
networking/communications, with purchases of Cisco Systems, 3Com, U.S.
Robotics, and Cabletron Systems. The networking/communications industry
remains extremely buoyant as the leading companies continue to deliver
exceptional earnings growth. Outside the US, a significant weighting in
the outsourcing industry was maintained, which improved the performance
of the Fund. In Europe, the combination of rapid changes in technology,
the approaching new millennium, and the shift to a common currency is
generating a tremendous increase in orders for information technology
consultancy companies. More recently, we increased our exposure to
companies that should benefit from the strength of PC demand in
anticipation of strong earnings in the fourth quarter of 1996.
OUTLOOK
Following 12 difficult months, the technology sector's valuations now
look far more attractive. Earnings growth has been strong, and
consequently price-to-earnings ratios have come down sharply. It is
expected that strong earnings growth will continue into 1997, and we
believe that technology stocks will provide stronger earnings than the
equity markets in general.
19
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN
HENDERSON
GLOBAL
TECHNOLOGY
FUND
PERFORMANCE COMPARISON CHART AND TABLE
The following chart compares a $10,000 hypothetical investment made in Seligman
Henderson Global Technology Fund, with and without the maximum initial sales
charge of 4.75% for Class A shares, and without the 1% contingent deferred sales
load ("CDSL") for Class D shares, since the commencement of operations on May
23, 1994, through October 31, 1996, to a $10,000 hypothetical investment made in
the Lipper Global Funds Average (Lipper Global Average) and the Morgan Stanley
Capital International World Index (MSCI World Index) for the same period. The
performance of Seligman Henderson Global Technology Fund Class B shares is not
shown in the chart, but is included in the table below. It is important to keep
in mind that the Average and Index do not include any fees or sales charges.
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS D LIPPER
WITH WITHOUT WITH GLOBAL MSCI WORLD
SALES CHARGE SALES CHARGE CDSL AVERAGE INDEX
------------ ------------ ---- ------- -----
<S> <C> <C> <C> <C> <C>
5/31/94 $9,520.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00
7/31/94 $9,613.33 $10,098.04 $10,084.03 $10,086.16 $10,165.00
10/31/94 $11,160.00 $11,722.69 $11,680.67 $10,447.58 $10,491.30
1/31/95 $10,694.90 $11,234.15 $11,149.86 $9,558.11 $9,986.67
4/30/95 $13,264.37 $13,933.17 $13,820.73 $10,254.09 $10,997.32
7/31/95 $16,856.25 $17,706.14 $17,523.22 $11,224.31 $11,649.46
10/31/95 $17,555.79 $18,440.96 $18,215.67 $11,061.83 $11,543.45
1/31/96 $15,895.38 $16,696.83 $16,458.19 $11,807.65 $12,522.33
4/30/96 $17,535.27 $18,419.39 $18,119.11 $12,584.94 $13,115.89
7/31/96 $15,003.51 $15,759.99 $15,476.74 $12,114.53 $12,734.22
10/31/96 $16,269.39 $17,089.69 $16,745.08 $12,796.98 $13,485.54
</TABLE>
TOTAL RETURNS*
FOR PERIODS ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------
SINCE
INCEPTION ONE SINCE
4/22/96 YEAR 5/23/94
------------ ------ ------------
CLASS A
<S> <C> <C>
With Sales Charge n/a (11.72)% 22.04%
Without Sales Charge n/a (7.33) 24.52
CLASS B
With 5% CDSL (8.15)% n/a n/a
Without CDSL (3.31) n/a n/a
CLASS D
With 1% CDSL n/a (8.93) n/a
Without CDSL n/a (8.07) 23.48
LIPPER GLOBAL AVERAGE** 1.68+ 15.69 10.72++
MSCI WORLD INDEX** 2.81+ 16.82 13.15++
</TABLE>
* Return figures reflect any change in price per share and assume the
reinvestment of dividend and capital gain distributions. Return figures
for Class A shares are calculated with and without the effect of the
initial 4.75% maximum sales charge. Returns for Class B shares are
calculated with and without the effect of the maximum 5% contingent
deferred sales load ("CDSL"), charged only on certain redemptions made
within one year of the date of purchase, declining to 1% in the sixth year
and 0% thereafter. Returns for Class D shares are calculated with and
without the effect of the 1% CDSL, charged only on redemptions made within
one year of the date of purchase.
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested in additional shares. The
rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment
results.
** The Lipper Global Average and the MSCI World Index are unmanaged
benchmarks that assume reinvestment of estimated dividends and do not
reflect fees and expenses. The monthly performance of the Lipper Global
Average is used in the performance comparison chart and table. Investors
may not invest directly in an average or an index.
+ From April 30, 1996.
++ From May 31, 1994.
20
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
GLOBAL TECHNOLOGY FUND
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1996
SHARES
----------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/96
- ------------- ----------- ------------
ADE ........................................ 400,000 400,000
America Online ............................. 400,000 400,000
Azlan ...................................... 640,000 640,000
C-Cube Microsystems ........................ 150,000 150,000
Cabletron Systems .......................... 130,000 130,000
Gateway 2000 ............................... 200,000 200,000
HADCO ...................................... 550,000 550,000
Intel ...................................... 80,000 200,000
Storage Technology ......................... 250,000 250,000
Structural Dynamics Research ............... 350,000 350,000
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
SHARES
----------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/96
- -------------- ----------- ------------
Altera ..................................... 150,000 --
Dell Computer .............................. 150,000 --
Electronics for Imaging .................... 150,000 --
KLA Instruments ............................ 350,000 --
Lam Research ............................... 200,000 --
LSI Logic .................................. 300,000 --
Olivetti ................................... 13,000,000 --
Speedfam International ..................... 400,000 --
Tektronix .................................. 160,000 --
Unitech .................................... 462,200 --
PERCENTAGE OF INVESTMENTS BY COUNTRY
AT OCTOBER 31, 1996
United States 56.9%
United Kingdom 15.2
Japan 10.2
Netherlands 2.4
South Korea 2.1
Sweden 1.9
France 1.7
Israel 1.5
Italy 1.3
Taiwan 1.2
Canada 0.9
Germany 0.9
Singapore 0.8
Finland 0.7
Australia 0.6
Denmark 0.6
Hong Kong 0.3
Luxembourg 0.3
Belgium 0.2
Norway 0.2
Brazil 0.1
- ---------------------------------------
Total 100.0%
MAJOR PORTFOLIO HOLDINGS
AT OCTOBER 31, 1996
SECURITY VALUE
- ----------- -------------
Intel ............................................... $21,962,500
Cisco Systems ....................................... 18,543,750
HADCO ............................................... 16,671,875
Logica .............................................. 13,223,031
EMC ................................................. 13,125,000
3Com ................................................ 12,183,750
Glenayre Technologies ............................... 11,559,375
Synopsys ............................................ 11,312,500
America Online ...................................... 10,850,000
Microchip Technology ................................ 10,837,500
21
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- --------------------------------------------------------------------------------
INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1996
SHARES VALUE
------ -----
COMMON STOCKS 98.3%
BANKING 11.0%
BANCO DE SANTANDER (SPAIN)
Worldwide banking operation 22,284 $ 1,142,546
CS HOLDINGS (SWITZERLAND)
Banking group 11,215 1,116,635
DEUTSCHE BANK (GERMANY)
Worldwide banking operation 23,950 1,110,484
HSBC HOLDINGS (UK)
Provider of banking services 56,800 1,156,965
MALAYAN BANKING (MALAYSIA)
Provider of banking services 69,000 682,628
ROYAL BANK OF SCOTLAND (UK)
Provider of banking services 122,000 1,011,607
SIAM COMMERCIAL BANK (THAILAND)
Provider of banking services 53,300 484,678
SOCIETE GENERALE (FRANCE)
Provider of full banking and
financial services 10,303 1,108,466
SUMITOMO TRUST AND BANKING (JAPAN)
Trust bank 106,000 1,172,093
UTD OVERSEAS BANK (SINGAPORE)
Comprehensive banking
operation with substantial
interests in Malaysia 85,660 833,186
WESTPAC BANKING (AUSTRALIA)
Provider of banking services 235,400 1,341,752
-----------
11,161,040
-----------
BUILDING MATERIALS 1.5%
CARADON (UK)
Supplier of building products 242,000 951,131
GUJURAT AMBUJA CEMENT (GDSS)
(INDIA)
Cement producer 67,200 571,200
-----------
1,522,331
-----------
BUSINESS SERVICES 3.0%
CSK (JAPAN)
Information services company 46,000 1,352,348
RENTOKIL (UK)
Provider of commercial services such
as pest control and office maintenance 160,400 1,076,802
S.I.T.A. (FRANCE)
Collection, cleaning, and waste
recycling services 3,286 675,621
-----------
3,104,771
-----------
CHEMICALS 4.1%
BAYER (GERMANY)
Producer of specialty chemicals,
pharmaceuticals, and plastics 32,101 1,210,201
DSM (NETHERLANDS)
Manufacturer of commodity chemicals 8,973 857,738
SANDOZ (SWITZERLAND)
Global research-based pharmaceutical
and nutrition group 947 1,091,141
SKW TROSTBERG (GERMANY)
Conglomerate involved in
construction materials, chemicals,
and agrochemicals 23,971 702,265
TOYO INK MANUFACTURING (JAPAN)
Ink manufacturer 68,000 342,536
-----------
4,203,881
-----------
CONSTRUCTION AND
PROPERTY 4.7%
DBS LAND (SINGAPORE)
Property developer 196,000 617,849
EMPRESAS ICA SOCIEDAD
CONTROLADORA (ADRS)* (MEXICO)
Construction company 40,000 520,000
LAND AND HOUSE (THAILAND)
Residential property developer 44,700 371,434
SUN HUNG KAI PROPERTIES (HONG KONG)
Property developer 99,000 1,126,702
SWIRE PACIFIC (HONG KONG)
Conglomerate with major
interests in property
development and aviation 94,000 829,701
UNITED ENGINEERS (MALAYSIA)
Construction, principally
managing expressways 117,000 925,999
UNITED INDUSTRIAL (SINGAPORE)
Property company, mainly in
commercial rentals 523,000 434,441
-----------
4,826,126
-----------
CONSUMER PRODUCTS 2.4%
ELECTROLUX (SERIES B) (SWEDEN)
Manufacturer of appliances and
outdoor and industrial products 12,586 699,961
KAO (JAPAN)
Manufacturer of cosmetics and
personal care products 62,000 729,092
MATTHEW CLARK (UK)
Manufacturer and wholesaler of
alcoholic beverages 80,000 408,815
SANKYO (JAPAN)
Manufacturer of pachinko game
equipment 16,000 556,033
---------
2,393,901
---------
ELECTRONICS 6.7%
ALPS ELECTRIC (JAPAN)
Manufacturer of electrical equipment 66,000 816,674
PIONEER ELECTRONIC (JAPAN)
Manufacturer of audio equipment,
including laser disks 123,000 2,428,697
SAMSUNG ELECTRONICS (GDSS) (SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 14,690 1,032,967
- ----------
See footnotes on page 42.
22
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 1996
SHARES VALUE
------ -----
ELECTRONICS (CONTINUED)
SAMSUNG ELECTRONICS (GDRS)*+
(SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 4,219 $ 75,942
SAMSUNG ELECTRONICS (GDRS) (VOTING)*+
(SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 126 4,836
SAMSUNG ELECTRONICS (GDSS) (VOTING)*+
(SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 420 19,173
TOSHIBA (JAPAN)
Diversified manufacturer of
consumer and industrial
electronics 384,000 2,399,368
----------
6,777,657
----------
FINANCIAL SERVICES 1.2%
GUANGDONG INVESTMENTS (CHINA)
Diversified investment company
investing in China 690,000 495,260
NOMURA SECURITIES (JAPAN)
Securities firm 43,000 709,434
----------
1,204,694
----------
HEALTH AND HOUSEHOLD 3.9%
British Biotech (UK)
Biotechnology company 170,000 626,650
EGIS (HUNGARY)
Manufacturer of pharmaceutical
products 7,000 421,862
NOVO NORDISK (CLASS B) (DENMARK)
Producer and supplier of insulin and
industrial enzymes 4,520 750,716
PHARMACIA & UPJOHN (SWEDEN)
Global pharmaceutical and
biotechnology company 29,027 1,012,254
PLIVA (GDRS) (CROATIA)
Manufacturer of pharmaceutical
products 7,500 365,625
ROCHE HOLDINGS (SWITZERLAND)
European pharmaceutical
company and chemicals producer 102 769,022
----------
3,946,129
----------
INDUSTRIAL GOODS AND
SERVICES 4.7%
ABB (SWEDEN)
Manufacturer of heavy equipment
for electric power generation and
distribution 938 1,155,486
CIE GENERALE DES EAUX (FRANCE)
Water purification and distribution;
energy production 10,944 1,305,643
CITIC PACIFIC* (HONG KONG)
Holding company with interests in
Cathay Pacific Airlines, telecom-
munications, and power stations 185,000 899,603
INDUSTRIAL GOODS AND
SERVICES (CONTINUED)
SIEBE (UK)
Designer and manufacturer of
control devices and process
control technology 90,000 $1,415,637
----------
4,776,369
----------
INSURANCE 5.9%
AXA (FRANCE)
Provider of insurance and
financial services 20,534 1,280,205
ING GROEP (NETHERLANDS)
Worldwide underwriter of
reinsurance; provider of
financial and consumer credit 43,308 1,347,683
ISTITUTO NAZIONALE DELLE
ASSICURAZIONI (ITALY)
Second largest domestic insurer 794,477 1,096,693
MITSUI MARINE & FIRE (JAPAN)
Provider of non-life insurance 168,000 1,091,005
ZURICH VERSICHERUNG (SWITZERLAND)
Provider of insurance services 4,255 1,161,065
----------
5,976,651
----------
LEISURE AND HOTELS 3.2%
ACCOR (FRANCE)
Hotel operator and provider of
related services 9,115 1,142,612
GRANADA GROUP (UK)
Television group with additional
leisure interests 96,000 1,381,900
SOL MELIA (SPAIN)
Hotel manager and
franchise company 26,451 702,944
---------
3,227,456
---------
MANUFACTURING 8.0%
FKI BABCOCK (UK)
Electrical engineering company 300,000 1,025,294
HOKKAI CAN (JAPAN)
Manufacturer of cans for
the food industry 32,000 212,304
MANNESMANN (GERMANY)
Plant and machinery construction;
automotive technology 3,127 1,215,970
MICHELIN (FRANCE)
Manufacturer of all-purpose tires 19,467 936,964
PERUSAHAAN OTOMOBIL NASIONAL (MALAYSIA)
Manufacturer of automobiles 73,000 462,208
ROLLS ROYCE (UK)
Aerospace; power generation,
transmission, and distribution
systems 241,000 996,227
SMH NEUENBERG (SWITZERLAND)
Watch manufacturer of brands
including Swatch and Omega 4,741 663,665
TOKYO STEEL MANUFACTURING (JAPAN)
Producer of H beams 23,000 355,243
23
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 1996
SHARES VALUE
------ -----
MANUFACTURING (CONTINUED)
VOLKSWAGEN (GERMANY)
Manufacturer of economy and
luxury cars and trucks 3,078 $1,216,188
YAMAHA (JAPAN)
Manufacturer of musical instruments
and audio equipment 70,000 1,062,747
----------
8,146,810
----------
MEDIA 4.9%
ELSEVIER (NETHERLANDS)
Global printer and publisher of
professional trade journals and
magazines 69,899 1,159,535
NEWS CORP. (AUSTRALIA)
Global printer and publisher of
professional trade journals
and magazines 162,946 926,193
NIPPON TELEVISION NETWORK (JAPAN)
Japanese television broadcasters 2,630 761,650
REUTERS HOLDINGS (UK)
Holding company for the Reuters
news organization 69,000 858,488
WPP GROUP (UK)
Provider of worldwide marketing
services, including advertising,
public relations, and market research 340,000 1,261,599
----------
4,967,465
----------
METALS 3.8%
COMPANHIA VALE DO RIO DOCE (ADRS) (BRAZIL)
Producer of iron ore and gold;
transport operator 30,000 630,723
HINDALCO INDUSTRIES (GDRS)+ (INDIA)
Major aluminum producer 30,000 521,100
MITSUBISHI MATERIALS (JAPAN)
Non-ferrous smelter
and cement producer 273,000 1,212,269
SUMITOMO METAL INDUSTRIES (JAPAN)
Blast furnace and steel producer 444,000 1,219,587
TSUBAKIMOTO NAKISHIMA (JAPAN)
Manufacturer of ball bearings 32,000 314,524
----------
3,898,203
----------
PAPER AND PRINTING 0.7%
STORA KOPPARBERGS (SWEDEN)
Manufacturer of forestry products 53,937 692,545
----------
RESOURCES 4.4%
BRITISH PETROLEUM (UK)
Oil producer, refiner, and
distributor 103,000 1,108,017
BROKEN HILL PROPRIETARY (AUSTRALIA)
Resources company with interests
in steel, oil, and minerals 48,046 637,097
ELF AQUITAINE (FRANCE)
Oil and gas exploration;
manufacturer of chemical compounds 14,956 1,193,805
GAS NATURAL (SPAIN)
Producer of natural gas 3,463 605,042
RESOURCES (CONTINUED)
NIPPON OIL (JAPAN)
Oil distributor 60,000 $ 342,255
WMC (AUSTRALIA)
Mineral and petroleum producer 94,000 590,112
----------
4,476,328
----------
RESTAURANTS 0.4%
DENNY'S (JAPAN)
Restaurant operator 14,000 443,528
----------
RETAILING 6.4%
ADIDAS (GERMANY)
Sporting goods 7,427 624,118
AOYAMA TRADING (JAPAN)
Retailer of suits and clothing 14,800 377,955
CARREFOUR SUPERMARCHE (FRANCE)
Supermarket operator in Europe,
the Americas, and Taiwan 2,088 1,156,636
CENTROS COMERCIALES PRYCA (SPAIN)
Owner and operator of
hypermarkets 29,430 674,989
JOSHIN DENKI (JAPAN)
Budget electrical appliance retailer 34,000 417,727
KONINKLIJKE AHOLD (NETHERLANDS)
International retailing organization,
focusing on distributing and selling
food products 20,213 1,177,145
SM PRIME HOLDINGS (PHILIPPINES)
Operator of shopping malls 2,352,000 501,187
TESCO (UK)
Supermarket chain 249,000 1,347,407
TSUTSUMI JEWELRY (JAPAN)
Manufacturer and retailer
of jewelry 7,000 220,535
---------
6,497,699
---------
TELECOMMUNICATIONS 7.9%
GRUPO CARSO (ADRS)*+ (MEXICO)
Holding company with a substantial
stake in Telmex and a number
of industrial subsidiaries 65,000 584,675
L.M. ERICSSON TELEFON (SERIES B) (SWEDEN)
Manufacturer of telecommunications
equipment 46,462 1,256,674
NIPPON TELEGRAPH & TELEPHONE (JAPAN)
Telecommunications company 343 2,393,023
SPT TELECOM (CZECH REPUBLIC)
Provider of telecommunications
services 3,500 373,591
STET SOCIETA' FINANZARIA TELEFONICA (ITALY)
Holding company for a number of
telecommunications businesses 461,410 1,228,254
TELEBRAS (ADRS) (BRAZIL)
Provider of telecommunications
services 9,686 716,511
TELEFONICA DEL PERU (ADRS) (PERU)
Provider of telecommunications
services 33,500 690,938
- ----------
See footnotes on page 42.
24
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 1996
SHARES VALUE
------ -----
TELECOMMUNICATIONS (CONTINUED)
Telekommunikasi (Indonesia)
Domestic telecommunications
monopoly 16,000 $ 23,956
TELEKOMMUNIKASI (ADRS) (INDONESIA)
Domestic telecommunications
monopoly 27,000 810,000
------------
8,077,622
------------
TOBACCO 1.1%
B.A.T. INDUSTRIES (UK)
Manufacturer of tobacco products;
financial services company 168,000 1,170,202
------------
TRANSPORTATION 4.7%
BAA (UK)
One of the world's largest owners
and operators of airports, including
Heathrow and Gatwick 116,000 939,201
EAST JAPAN RAILWAY (JAPAN)
Provider of railway services 339 1,555,919
LUFTHANSA (GERMANY)
Airline services worldwide;
operator of Penta hotels 82,380 1,075,053
MITSUI O.S.K. LINES (JAPAN)
Shipping company 435,000 1,213,954
------------
4,784,127
------------
UTILITIES 2.5%
IBERDROLA (SPAIN)
Provider of electric utility services 127,375 $ 1,351,023
VEBA (GERMANY)
Provider of electric energy 21,989 1,171,442
------------
2,522,465
------------
MISCELLANEOUS 1.2%
TAIWAN AMERICAN FUND (TAIWAN)
Fund investing in Taiwan25,500 332,520
TAIWAN FUND (TAIWAN)
Mainstream closed-end fund 90,000 877,500
------------
1,210,020
------------
TOTAL INVESTMENTS 98.3%
(Cost $94,249,303) 100,008,020
OTHER ASSETS LESS LIABILITIES 1.7% 1,749,985
------------
NET ASSETS 100.0% $101,758,005
============
- ----------
See footnotes on page 42.
25
<PAGE>
- --------------------------------------------------------------------------------
EMERGING MARKETS GROWTH FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1996
SHARES VALUE
------ -----
COMMON STOCKS 91.7%
AUTOMOTIVE MANUFACTURING 3.3%
QINGLING MOTORS*(CHINA)
Manufacturer of lightweight trucks 1,800,000 $ 756,567
Tata Engineering and Locomotive
(GDRS) (INDIA)
Manufacturer of commercial
automotive vehicles 53,000 715,500
---------
1 ,472,067
---------
CONSTRUCTION AND PROPERTY 3.9%
CITIC PACIFIC (CHINA)
Holding company with interests in
Cathay Pacific Airlines, telecom-
munications, and power stations 147,000 714,820
GRUPO ARA (MEXICO)
Provider of construction and
engineering services 137,000 292,049
GRUPO TRIBASA (ADRS) (MEXICO)
Provider of construction and
engineering services 61,300 283,512
IJM (MALAYSIA)
Provider of construction
and property services 200,000 435,299
---------
1 ,725,680
---------
CONSUMER GOODS AND SERVICES 7.2%
COMPANHIA CERVEJARA BRAHMA (BRAZIL)
Producer of beer and
other beverages 59,500 766,063
HELLENIC BOTTLING (GREECE)
Producer of Coca-Cola and
other beverages 17,600 565,764
PANAMERICAN BEVERAGES (ADRS) (MEXICO)
Producer of Coca-Cola and
other beverages 13,600 593,300
SAN MIGUEL (CLASS B) (PHILIPPINES)
Producer of beer and
other beverages 176,000 636,225
SOUTH AFRICAN BREWERIES (SOUTH AFRICA)
Producer of beer and
other beverages 23,100 600,064
---------
3,161,416
---------
DRUGS AND HEALTH CARE 6.0%
EGIS (HUNGARY)
Manufacturer of pharmaceutical
products 13,000 783,459
GEDEON RICHTER (GDRS) (HUNGARY)
Manufacturer of pharmaceuticals;
cosmetics; and pesticides 16,000 864,000
PLIVA (GDRS) (CROATIA)
Manufacturer of pharmaceutical
products 20,000 975,000
---------
2,622,459
---------
ELECTRIC UTILITIES 6.9%
BSES (GDRS)*+ (INDIA)
Provider of electrical utility services 31,000 589,000
ELECTRIC UTILITIES (CONTINUED)
CEMIG (ADRS) (BRAZIL)
Provider of electrical utility services 32,600 $1,034,111
COMPANHIA ENERGETICA DE SAO PAULO
(ADRS) (BRAZIL)
Provider of electrical utility services 38,700 392,124
ELECTRICITY GENERATING PUBLIC COMPANY
(THAILAND)
Provider of electrical utility services 150,000 435,072
HUANENG POWER INTERNATIONAL (ADRS)*
(CHINA)
Developer and manufacturer of
coal-fired power plants 18,000 274,500
KOREA ELECTRIC POWER (ADRS) (SOUTH KOREA)
Provider of electrical utility services 17,000 306,000
---------
3,030,807
---------
FINANCIAL SERVICES 13.8%
BANGKOK BANK (THAILAND)
Provider of banking services 55,000 586,368
BANK INTERNASIONAL (INDONESIA)
Provider of banking services 424,000 682,609
COMMERCIAL INTERNATIONAL BANK+ (EGYPT)
Provider of banking services 30,000 431,400
FINANCE ONE PUBLIC COMPANY (THAILAND)
Provider of financial services 50,200 141,669
GRUPO FINANCIERO BANAMEX ACCIVAL
(CLASS B) (MEXICO)
Provider of banking services 131,000 278,437
GUANGDONG INVESTMENTS (CHINA)
Diversified company investing
in China 940,000 674,702
KOMERCNI BANKA (GDRS) (CZECH REPUBLIC)
Provider of banking services 23,000 572,125
KOREA EXCHANGE BANK (SOUTH KOREA)
Provider of banking services 47,000 461,325
MALAYAN BANKING (MALAYSIA)
Provider of banking services 64,000 633,162
METROPOLITAN BANK & TRUST (PHILIPPINES)
Provider of banking services 25,000 551,750
STATE BANK OF INDIA (GDRS) (INDIA)
Provider of banking services 29,600 436,600
ZAGREBACKA BANKA (GDRS)*+ (CROATIA)
Provider of banking services 35,000 651,875
---------
6,102,022
---------
INDUSTRIAL GOODS AND SERVICES 4.4%
ALFA (MEXICO)
Producer of steel, chemicals, and
food products 154,300 640,819
SKODA PLZEN (CZECH REPUBLIC)
Manufacturer of engineering
equipment 19,000 603,700
UNITED ENGINEERS (MALAYSIA)
Construction, principally
managing expressways 88,000 696,478
---------
1 ,940,997
---------
- ----------
See footnotes on page 42.
26
<PAGE>
- --------------------------------------------------------------------------------
EMERGING MARKETS GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 1996
SHARES VALUE
------ -----
LEISURE AND HOTELS 2.5%
GRUPO TELEVISA (GDRS)* (MEXICO)
Provider of television and other
media services 19,300 $ 506,625
SHANGRI-LA ASIA (CHINA)
Developer of hotels and associated
properties 420,000 600,210
----------
1,106,835
----------
MANUFACTURING 5.0%
CROMPTON GREAVES (GDRS)+ (INDIA)
Manufacturer of power generation
equipment 130,000 560,300
FRASER & NEAVE HOLDINGS (MALAYSIA)
Manufacturer of glass bottles and
glass products 126,000 638,227
SAMSUNG ELECTRONICS (GDRS)+
(SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 14,325 1,007,301
----------
2,205,828
----------
METALS 7.1%
CHINA STEEL (GDRS) (TAIWAN)
Producer of steel and steel products 24,500 468,440
Companhia Vale do Rio Doce (ADRs) (Brazil)
Producer of iron ore and gold;
transport operator 39,000 819,940
HINDALCO INDUSTRIES (GDRS)+ (INDIA)
Producer of aluminum and
aluminum products 45,000 781,650
POHANG IRON & STEEL (ADRS) (SOUTH KOREA)
Producer of steel and steel
products 24,000 498,000
USINAS SIDERURGICAS DE MINAS GERAIS
(ADRS)+ (BRAZIL)
Producer of steel and steel products 51,600 537,398
----------
3,105,428
----------
RESOURCES 8.7%
ANGLO-AMERICAN CORPORATION OF SOUTH AFRICA
(SOUTH AFRICA)
Producer of a wide variety of
minerals 10,000 600,979
EXPLORATION & PRODUCTION (THAILAND)
Producer of oil and gas 43,000 616,862
GAZPROM (ADRS)*+ (RUSSIA)
Producer of natural gas 41,750 730,625
GENCOR (SOUTH AFRICA)
Holding company with interests in
gold, platinum, and coal mining 172,500 598,691
PEREZ (ADRS) (ARGENTINA)
Producer of oil and gas, and
provider of energy services 61,600 776,252
QUIMICA MINERA CHILE (ADRS) (CHILE)
Producer of fertilizer and iodine;
manufacturer of industrial chemicals 8,500 488,750
----------
3,812,159
----------
RETAILING 10.8%
BOMPRECO SUPERMERCADOS NORDE
(GDRS)* (BRAZIL)
Large retailer of food and
consumer products 19,900 $ 328,350
CIFRA (ADRS)* (MEXICO)
Retailer of food and consumer
products 364,250 464,564
DISCO (ADRS)* (ARGENTINA)
Retailer of food and consumer
products 36,000 810,000
JERONIMO MARTINS (PORTUGAL)
Retailer of food and consumer
products 7,000 636,612
MATAHARI PUTRA PRIMA RIGHTS* (INDONESIA)
Retailer of consumer products 136,000 59,116
METRO CASH & CARRY (SOUTH AFRICA)
Retailer of food and consumer
products 202,000 602,150
MIGROS TURK (TURKEY)
Retailer of food and consumer
products 725,000 729,740
SANTA ISABEL (ADRS) (CHILE)
Retailer of food and consumer
products 22,500 632,813
SM PRIME HOLDINGS (PHILIPPINES)
Developer and operator of
retail properties 2,400,000 511,416
-----------
4,774,761
-----------
TELECOMMUNICATIONS 7.3%
PORTUGAL TELECOM (PORTUGAL)
Provider of telecommunications
services 6,000 155,570
PORTUGAL TELECOM (ADRS) (PORTUGAL)
Provider of telecommunications
services 18,000 465,750
SPT TELECOM* (CZECH REPUBLIC)
Provider of telecommunications
services 4,900 523,028
TELEBRAS (ADRS) (BRAZIL)
Provider of telecommunications
services 19,700 1,457,286
TELEFONICA DEL PERU (PERU)
Provider of telecommunications
services 30,000 618,750
-----------
3,220,384
-----------
MISCELLANEOUS 4.8%
FORMOSA FUND* (TAIWAN)
Closed-end fund investing in Taiwan 90 795,420
TAIPEI FUND* (TAIWAN)
Closed-end fund investing in Taiwan 90 756,000
TAIWAN OPPORTUNITIES FUND* (TAIWAN)
Closed-end fund investing in Taiwan 53,000 557,560
-----------
2,108,980
-----------
TOTAL INVESTMENTS 91.7% 40,389,823
(Cost $41,301,272 )
OTHER ASSETS LESS LIABILITIES 8.3% 3,679,635
-----------
NET ASSETS 100.0% $44,069,458
===========
- -----------
See footnotes on page 42.
27
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL GROWTH OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
SHARES VALUE
------ -----
COMMON STOCKS 98.1%
AEROSPACE 1.5%
BOEING (US)
Aerospace manufacturer 6,900 $ 658,088
ROLLS ROYCE (UK)
Aerospace; power generation,
transmission, and distribution
systems 450,000 1,860,175
-----------
2,518,263
-----------
AUTOMOTIVE AND RELATED 4.1%
AUTOLIV (SWEDEN)
Manufacturer and worldwide retailer
of automobile airbags and other
safety equipment 46,550 1,973,462
PORSCHE* (GERMANY)
Manufacturer of luxury sportscars 2,480 1,683,572
Tata Engineering and Locomotive
(GDRS) (INDIA)
Manufacturer of commercial
automotive vehicles 80,000 1,080,000
VALEO (FRANCE)
Manufacturer of automotive
components 38,460 2,303,943
-----------
7,040,977
-----------
BUSINESS GOODS AND SERVICES 3.8%
FIRST DATA (US)
Information processing 20,200 1,610,950
INTERPUBLIC GROUP OF COMPANIES (US)
Global advertising through
three agencies in various countries 36,900 1,789,650
TOMRA SYSTEMS (NORWAY)
Provider of recycling systems,
mainly for beverage cans 90,000 1,273,850
WPP GROUP (UK)
Provider of worldwide marketing
services, including advertising,
public relations, and market research 500,000 1,855,293
-----------
6,529,743
-----------
COMPUTER AND
TECHNOLOGY RELATED 5.2%
ELECTRONIC DATA SYSTEMS (US)
Computer systems and services 15,000 675,000
INFORMIX* (US)
Designer, manufacturer, and supporter
of database management systems 51,300 1,138,219
MICROSOFT* (US)
Producer of microcomputer software 16,900 2,320,581
PARITY (UK)
Software and consultancy 300,000 1,628,264
STERLING COMMERCE* (US)
Developer of electronic data
interchange software 41,248 1,160,109
STERLING SOFTWARE* (US)
Computer software; management
of data processing software 25,900 841,750
COMPUTER AND
TECHNOLOGY RELATED (CONTINUED)
3COM* (US)
Supplier of adapter cards, hubs, and
routers for local area computer
networks 15,000 $ 1,015,312
-----------
8,779,235
-----------
CONSUMER GOODS AND
SERVICES 13.4%
ADIDAS (GERMANY)
Manufacturer of sporting goods 27,080 2,275,630
APCOA PARKING* (GERMANY)
Operator of parking garages
throughout Europe 11,000 1,109,244
ASSA ABLOY (SERIES B) (SWEDEN)
Developer, manufacturer, and
marketer of mechanical locks for
doors and windows 120,000 1,841,651
COCA-COLA AMATIL (AUSTRALIA)
Manufacturer and marketer of
Coca-Cola products for Australia,
the Pacific, and Eastern Europe 156,000 2,142,680
GUANGNAN HOLDINGS (HONG KONG)
Distributor of live and fresh
food products 1,250,000 848,712
LIZ CLAIBORNE (US)
Designer and distributor of
women's apparel 43,000 1,816,750
MODERN PHOTO FILM (INDONESIA)
Producer and distributor of Fuji
photo film and other photographic
materials 84,000 224,037
OAKLEY* (US)
Manufacturer of designer sunglasses
and goggles 88,800 1,320,900
PEPSICO (US)
Soft drinks, snack foods, and
restaurants 20,000 592,500
PROCTER & GAMBLE (US)
Manufacturer of household products 17,800 1,762,200
PUMA* (GERMANY)
Manufacturer and marketer of footwear
and other sporting goods 21,340 629,405
RAISION TEHTAAT (FINLAND)
Processor and marketer of
agricultural products 24,000 1,431,433
SERM SUK (THAILAND)
Manufacturer and distributor of
Pepsi-Cola drinks under franchise 96,700 2,956,375
SMH NEUENBERG (SWITZERLAND)
Watch manufacturer of brands
including Swatch and Omega 13,000 1,819,795
SOUTH AFRICAN BREWERIES (SOUTH AFRICA)
Investor in the beverage, retail, and
hotel industries 39,149 1,016,965
WANT WANT HOLDINGS* (SINGAPORE)
Manufacturer of rice crackers 418,000 1,028,280
-----------
22,816,557
-----------
- ----------
See footnotes on page 42.
28
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL GROWTH OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
SHARES VALUE
------ -----
DISTRIBUTORS 1.2%
Ryoyo Electro (Japan)
Distributor of electronic goods 118,000 $ 2,091,795
-----------
DIVERSIFIED 1.2%
CITIC PACIFIC* (HONG KONG)
Holding company with interests
in Cathay Pacific Airlines,
telecommunications, and
power stations 432,000 2,100,694
-----------
DRUGS AND HEALTH CARE 9.4%
AMGEN* (US)
Biotechnology company 7,500 459,844
ARTERIAL VASCULAR ENGINEERING* (US)
Manufacturer of coronary
care equipment 54,000 833,625
BRITISH BIOTECH* (UK)
Biotechnology company 300,000 1,105,852
COLUMBIA/HCA HEALTHCARE (US)
Provider of medical services in
several specialty hospitals 43,650 1,560,487
GEDEON RICHTER (HUNGARY)
Manufacturer of pharmaceuticals;
cosmetics; and pesticides 53,000 2,862,000
GUIDANT (US)
Health care products, cardiac rhythm
management, and catheters 38,000 1,752,750
HOGY MEDICAL (JAPAN)
Largest producer of disposable
surgical gowns and medical supplies 34,600 1,563,756
PFIZER (US)
Ethical drugs; hospital products; and
specialty chemicals 22,200 1,837,050
PHARMACIA & UPJOHN (SWEDEN)
Global pharmaceutical and
biotechnology company 50,600 1,764,566
ROUSSEL UCLAF (FRANCE)
Pharmaceutical, chemical, and
agroveterinary products 4,435 1,171,652
UNITED HEALTHCARE (US)
Owner and manager of HMO and
specialty managed care centers 27,900 1,056,713
-----------
15,968,295
-----------
ELECTRIC AND GAS UTILITIES 1.2%
GAZPROM (ADRS)*+ (RUSSIA)
Producer of natural gas 75,000 1,312,500
HUANENG POWER INTERNATIONAL* (CHINA)
Developer and manufacturer of
coal-fired power plants 45,000 686,250
-----------
1,998,750
-----------
ELECTRONICS 8.2%
ADAPTEC* (US)
Manufacturer of computer
data-flow systems 10,000 608,125
ELECTRONICS (CONTINUED)
DAITEC (JAPAN)
Developer of point-of-sale systems
for Nippon Oil Company 20,900 $ 1,219,702
INTEL (US)
Microprocessors and FLASH
memory circuits 17,000 1,866,813
KEYENCE (JAPAN)
Manufacturer of detection devices
and measuring control equipment 19,500 2,258,885
KYOCERA (JAPAN)
Supplier of semiconductor packaging,
capacitors, and cellular components 38,000 2,504,432
NIHON DEMPA KOGYO (JAPAN)
Manufacturer of quartz electronic
parts in Malaysia and China 65,000 1,357,613
SAMSUNG ELECTRONICS (GDRS)+ (SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 4,700 330,493
SAMSUNG ELECTRONICS (GDRS)* (SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 23,270 1,062,276
SGS-THOMSON MICROELECTRONICS* (FRANCE)
Manufacturer of semiconductor
integrated circuits 51,770 2,738,383
-----------
13,946,722
-----------
ENTERTAINMENT AND LEISURE 10.7%
ACCOR (FRANCE)
Hotel operator and provider
of related services 16,763 2,101,328
CAPITAL RADIO (UK)
Radio broadcasting company 125,000 1,187,021
GRANADA GROUP (UK)
Television group with additional
leisure interests including hotels 128,800 1,854,050
HIS (JAPAN)
Travel agency specializing in
overseas and package tours 34,100 1,807,495
INDIAN HOTELS (GDRS)* (INDIA)
Owner, operator, and manager of
luxury hotels 70,000 1,636,250
INTERNATIONAL GAME TECHNOLOGY (US)
Designer and manufacturer of
video games 60,000 1,267,500
SABRE GROUP HOLDINGS* (US)
Travel reservations system provider 51,200 1,561,600
SOL MELIA* (SPAIN)
Hotel manager and franchise
company 77,226 2,052,307
SUN INTERNATIONAL HOTELS* (US)
Operator of resort and
casino hotels 42,000 1,984,500
TELEVISION BROADCASTING (HONG KONG)
Television broadcasting,
production, and licensing group 444,000 1,556,122
VIACOM (CLASS B) (US)
Diversified entertainment
communications company 39,300 1,282,163
-----------
18,290,336
-----------
- ----------
See footnotes on page 42.
29
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL GROWTH OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
FINANCIAL SERVICES 7.2%
AMERICAN INTERNATIONAL GROUP (US)
Commercial and industrial insurer 16,500 $ 1,792,313
DONALDSON, LUFKIN & JENRETTE (US)
Investment and merchant bank 48,100 1,545,213
MALAYSIA ASSURANCE (MALAYSIA)
Provider of life and general
insurance 33,000 161,931
MANHATTAN CARD (HONG KONG)
Operator of credit card business 3,530,000 1,746,214
MBNA (US)
Issuers of credit cards; deposit,
loan, and transaction processing 60,100 2,268,775
MEDIOLANUM* (ITALY)
Life insurer; provider of a wide
range of financial services 124,000 1,228,414
SANYO SHINPAN FINANCE (JAPAN)
Consumer finance company 39,000 2,368,407
STATE BANK OF INDIA (GDRS)* (INDIA)
Provider of banking services 73,800 1,088,550
-----------
12,199,817
-----------
INDUSTRIAL GOODS AND
SERVICES 1.2%
ABB (SWEDEN)
Manufacturer of heavy equipment
for electric power generation and
distribution 1,626 2,003,006
-----------
MANUFACTURING AND
INDUSTRIAL EQUIPMENT 4.5%
ASAHI DIAMOND INDUSTRIES (JAPAN)
Manufacturer of
diamond-tipped tools 200,000 2,071,084
DOMNICK HUNTER GROUP (UK)
Manufacturer of filtration,
purification, and separation
products 200,000 1,298,705
KALMAR INDUSTRIES (SWEDEN)
Manufacturer of forklifts and
special lift trucks 83,600 1,295,721
LARSEN & TOUBRO (GDRS) (INDIA)
Producer of engineering
equipment 76,000 1,102,000
SIEBE (UK)
Designer and manufacturer of
control devices and process
control technology 115,000 1,808,870
-----------
7,576,380
-----------
PAPER AND PACKAGING 0.3%
BOBST (SWITZERLAND)
Manufacturer of machinery for the
paper and package industries 410 529,314
-----------
PUBLISHING 2.1%
ELSEVIER (NETHERLANDS)
Global printer and publisher of
professional trade journals and
magazines 122,250 $ 2,027,971
SINGAPORE PRESS HOLDING (SINGAPORE)
Newspaper publisher, printer, and
distributor 93,000 1,545,048
-----------
3,573,019
-----------
RESOURCES 1.6%
GENCOR (SOUTH AFRICA)
Holding company with interests in
gold, platinum, and coal mining 367,000 1,273,736
WMC (AUSTRALIA)
Mineral and petroleum producer 232,500 1,459,585
-----------
2,733,321
-----------
RESTAURANTS 1.2%
PIZZA EXPRESS (UK)
Restaurant operator in the UK 245,000 2,055,429
-----------
RETAIL TRADE 5.8%
HOME DEPOT (US)
Retailer of home improvement
products and building materials 33,800 1,850,550
JOSHIN DENKI (JAPAN)
Budget electrical appliance retailer 178,000 2,186,924
SAKS HOLDINGS* (US)
Worldwide fashion retailer 50,000 1,750,000
SHIMACHU (JAPAN)
Furniture retailer 85,000 2,334,796
TSUTSUMI JEWELRY (JAPAN)
Manufacturer and retailer of jewelry 56,000 1,764,283
-----------
9,886,553
-----------
SUPPORT SERVICES 4.3%
CRT GROUP (UK)
Provider of training and recruitment
services; publisher of multimedia
products 250,000 1,055,808
RENTOKIL (UK)
Provider of commercial services
such as pest control and office
maintenance 265,000 1,779,006
SECOM (JAPAN)
Security services pioneer 41,000 2,439,491
S.I.T.A. (FRANCE)
Collection, cleaning, and waste
recycling services 9,800 2,014,937
-----------
7,289,242
-----------
- ----------
See footnotes on page 42.
30
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL GROWTH OPPORTUNITIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
TELECOMMUNICATIONS 5.7%
DDI (JAPAN)
Long distance and mobile
telecommunications services 295 $ 2,213,471
L.M. ERICSSON TELEFON (SERIES B) (SWEDEN)
Global telecommunications
equipment and systems, wired
and mobile 97,950 2,649,288
TELEBRAS (ADRS) (BRAZIL)
Provider of telecommunications
services 22,000 1,627,426
TELEFONICA DEL PERU (PERU)
Provider of telecommunications
services 60,000 1,237,500
WORLDCOM* (US)
Provider of interstate long distance
telecommunications services 81,200 1,984,325
-----------
9,712,010
-----------
TOBACCO 1.0%
TABACALERA (SPAIN)
Manufacturer and marketer of
tobacco products 48,400 $ 1,769,299
-----------
TRANSPORTATION 3.3%
KOBENHAVNS LUFTHAVNE (DENMARK)
Operator of Copenhagen airport 20,100 2,086,475
LUFTHANSA (GERMANY)
Airline services worldwide;
operator of Penta hotels 164,000 2,140,188
METACORP (MALAYSIA)
Constructor and operator
of toll roads 470,000 1,432,133
-----------
5,658,796
-----------
TOTAL INVESTMENTS 98.1%
(Cost $152,918,544) 167,067,553
OTHER ASSETS LESS LIABILITIES 1.9% 3,239,011
-----------
NET ASSETS 100.0% $170,306,564
===========
- ----------
See footnotes on page 42.
31
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
SHARES VALUE
------ -----
COMMON STOCKS 96.2%
ADVERTISING 2.0%
ASATSU (JAPAN)
Advertising agency 99,100 $ 3,661,351
HERITAGE MEDIA (CLASS A)* (US)
Broadcasting and in-store advertising 110,000 1,677,500
KATZ MEDIA GROUP* (US)
Advertising broker 90,000 753,750
SNYDER COMMUNICATIONS (US)
Provider of marketing services 50,700 988,650
UNIVERSAL OUTDOOR HOLDINGS* (US)
Outdoor advertising such as billboards 255,000 7,442,813
-----------
14,524,064
-----------
AUTOMOTIVE PARTS
MANUFACTURING 3.1%
DURA AUTOMOTIVE SYSTEMS (CLASS A)* (US)
Designer and manufacturer
of assembly systems and
automotive parts 53,500 1,263,938
ECIA (FRANCE)
Manufacturer of automobile
components 5,301 714,190
FUTURIS (AUSTRALIA)
Mini-conglomerate with interests in
building materials, automobile
components, and financial services 1,908,282 2,417,106
KOITO MANUFACTURING (JAPAN)
Maker of automotive lighting
equipment 102,000 689,250
MONTUPET (FRANCE)
Manufacturer of automobile
components 19,592 2,517,165
NIPPON SEIKI (JAPAN)
Manufacturer of automobile
components 205,700 2,599,456
NOKIAN TYRES* (FINLAND)
Manufacturer of tires 323,340 6,184,001
SYLEA (FRANCE)
Manufacturer of automobile
components 56,020 6,464,540
-----------
22,849,646
-----------
BUILDING MATERIALS 2.6%
APOGEE ENTERPRISES (US)
Manufacturer and distributor of
energy-efficient aluminum
window systems 150,000 5,756,250
DANTO (JAPAN)
Manufacturer of wall and floor tiles 334,000 3,693,199
GUJURAT AMBUJA CEMENT (GDSS) (INDIA)
Cement producer 200,000 1,700,000
MALAYAN CEMENT (MALAYSIA)
Cement producer 975,000 2,179,957
MULIA INDUSTRINDO (INDONESIA)
Manufacturer of ceramic tiles
and glass 2,080,100 1,964,633
POLYPIPE (UK)
Manufacturer of plastic piping and
molded plastic products 1,300,000 4,284,262
-----------
19,578,301
-----------
BUSINESS SERVICES 3.9%
BISYS GROUP* (US)
Data processing service for banks 50,000 $ 1,865,625
CORT BUSINESS SERVICES* (US)
Rentor of furniture 140,000 2,940,000
FACTSET RESEARCH SYSTEMS* (US)
Provider of on-line database services
to the financial community 250,000 6,000,000
IBC GROUP (UK)
Business communications 770,000 3,696,753
ISA INTERNATIONAL (UK)
Distributor of computer
consumables 1,201,803 4,077,998
LASON* (US)
Provider of record management
services 40,000 695,000
NU-KOTE HOLDINGS (CLASS A)* (US)
Manufacturer of products for
printing equipment 100,000 956,250
SERVICE EXPERTS* (US)
Provider of air-conditioning
equipment and services 120,000 3,150,000
SITEL* (US)
Telemarketer 100,000 1,968,750
SKILLED ENGINEERING (AUSTRALIA)
Provider of personnel placement
and outsourcing services 652,000 2,064,623
SOURCE SERVICES* (US)
Specialty staffing services 75,000 1,256,250
-----------
28,671,249
-----------
CAPITAL GOODS 2.5%
BT INDUSTRIES (SWEDEN)
Manufacturer of forklifts 239,800 4,117,489
FUSION SYSTEMS* (US)
Manufacturer of ultraviolet
curing systems 70,000 1,268,750
INDUSTRIA MACCHINE AUTOMATION (ITALY)
Packaging machinery 525,000 2,082,455
IRO* (SWEDEN)
Manufacturer of textile machinery 278,730 3,176,507
KALMAR INDUSTRIES* (SWEDEN)
Manufacturer of forklifts and
special lift trucks 119,900 1,858,336
KCI KONECRANES INTERNATIONAL* (FINLAND)
Manufacturer of cranes and other
heavy-duty lifting equipment 150,000 4,126,593
NAMURA SHIPBUILDING (JAPAN)
Shipbuilder 229,000 852,093
PHOTON DYNAMICS* (US)
Semiconductor test equipment 100,000 675,000
-----------
18,157,223
-----------
CHEMICALS 0.6%
CHEMICAL COMPANY OF MALAYSIA (MALAYSIA)
Producer of industrial chemicals
and pharmaceuticals 425,000 1,303,423
CHEMICAL COMPANY OF MALAYSIA
WARRANTS* (MALAYSIA)
Producer of industrial chemicals
and pharmaceuticals 53,250 60,478
- ----------
See footnotes on page 42.
32
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
CHEMICALS (CONTINUED)
TOSHIBA CHEMICAL (JAPAN)
Producer of synthetic resin molded
products and insulating materials 14,000 $ 98,412
TOYO INK MANUFACTURING (JAPAN)
Ink manufacturer 655,000 3,299,430
-----------
4,761,743
-----------
COMPUTER SOFTWARE 4.2%
DENDRITE INTERNATIONAL* (US)
Sales management and software 275,000 7,321,875
F.I. GROUP* (UK)
Designer and builder of
software applications 425,100 2,916,059
FUJITSU BUSINESS SYSTEMS (JAPAN)
Distributor of computer equipment 133,000 3,361,474
HITACHI INFORMATION SYSTEMS (JAPAN)
Leading data processing firm 38,000 486,880
KEWILL SYSTEMS (UK)
Computer systems and services
company 235,000 1,807,080
MENTOR GRAPHICS* (US)
Computer-aided engineering
systems 200,000 1,687,500
NATIONAL PROCESSING* (US)
Provider of low-cost transaction
processing services 46,500 883,500
PARITY (UK)
Software and consultancy 890,800 4,834,858
POMEROY COMPUTER RESOURCES* (US)
Provider of professional
computer services 138,000 3,156,750
SOFTWARE 2000* (US)
Developer and marketer of
business software applications 182,800 1,302,450
SYNOPSYS* (US)
Integrated circuit design software 70,000 3,167,500
-----------
30,925,926
-----------
CONSTRUCTION AND
PROPERTY 7.5%
ASAS DUNIA (MALAYSIA)
Property developer 68,000 244,875
ASHTEAD GROUP (UK)
Equipment rentor for the
construction sector 1,355,000 5,149,130
BAU HOLDINGS (AUSTRIA)
Construction and civil engineering 22,276 1,398,185
BAU HOLDINGS (VOTING PREFERENCE SHARES)
(AUSTRIA)
Construction and civil engineering 103,250 4,884,655
BUKIT SEMBAWANG ESTATES (SINGAPORE)
Property developer 62,000 1,448,207
DANSKE TRAELASTKOMPAGNI (DENMARK)
Timber supply company 75,670 6,296,907
HIGASHI NIHON HOUSE (JAPAN)
House builder 253,000 3,641,246
CONSTRUCTION AND
PROPERTY (CONTINUED)
KAMPA-HAUS (GERMANY)
Residential construction 160,832 $ 5,618,122
MITSUI HOME (JAPAN)
House builder 214,000 2,854,585
NEW ASIA REALTY (HONG KONG)
Holding company with interests in
property and real estate 821,000 3,344,606
NISHIO RENT ALL (JAPAN)
Rentor of construction equipment 104,800 1,940,570
PLETTAC (GERMANY)
Manufacturer of scaffolding,
lightweight construction sheds,
and related products 19,290 3,896,777
SIME UEP PROPERTIES (MALAYSIA)
Property company involved in both
investment and development 403,000 1,108,370
STO* (GERMANY)
Producer and marketer of
building materials 7,000 3,400,231
THORKILD KRISTENSE (DENMARK)
Property development 67,250 4,788,530
TILBURY DOUGLAS (UK)
Small contractor 448,100 3,675,472
TIPCO ASPHALT (THAILAND)
Manufacturer and distributor of
asphalt emulsion 272,000 1,471,250
-----------
55,161,718
-----------
CONSUMER GOODS AND
SERVICES 4.9%
AMERICAN DISPOSAL SERVICES* (US)
Provider of pollution control
equipment 175,000 2,800,000
CANANDAIGUA WINE (CLASS A)* (US)
Wine, imported beer, and
distilled spirits 150,000 3,431,250
CHILDTIME LEARNING CENTERS* (US)
Provider of childcare services 225,000 2,671,875
EKORNES (NORWAY)
Manufacturer of home furnishings 299,700 6,562,089
FINE HOST* (US)
Provider of catering services 196,000 2,793,000
LA DORIA (ITALY)
Producer of food, specializing in
canned tomatoes, fruits,
and fruit juices 857,766 3,159,370
OPTA FOOD INGREDIENTS* (US)
Manufacturer of food additives 215,000 1,773,750
ST. JOHN KNITS (US)
Apparel manufacturer 70,000 3,202,500
SORINI (INDONESIA)
Manufacturer of Sorbitol and
Maltodextrin, etc. 675,000 347,744
STEINWAY MUSICAL INSTRUMENTS* (US)
Manufacturer of musical equipment 90,000 1,597,500
TARKETT (GERMANY)
Manufacturer and distributor of
hardwood flooring 98,650 2,129,371
TEAM RENTAL GROUP* (US)
Owner and operator of Budget
Rent-a-Car franchises 203,000 3,857,000
- ----------
See footnotes on page 42.
33
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
CONSUMER GOODS AND
SERVICES (continued)
WANT WANT HOLDINGS (SINGAPORE)
Manufacturer of rice crackers 766,000 $ 1,884,360
-----------
36,209,809
-----------
DRUGS AND HEALTH CARE 6.3%
AMERICAN ONCOLOGY RESOURCES* (US)
Provider of management services
to oncology practices 100,000 793,750
AMERISOURCE HEALTH (CLASS A)* (US)
Wholesale distributor of
pharmaceuticals 150,000 6,356,250
CARDIOVASCULAR DYNAMICS* (US)
Designer, developer, and
manufacturer of catheters
used for vascular diseases 61,500 799,500
CHIROSCIENCE GROUP (UK)
Pharmaceutical company specializing
in pharmaceuticals for cancer, pain,
and inflammatory disorders 80,000 463,498
COLLABORATIVE CLINICAL RESEARCH* (US)
Manager of clinical research network 52,000 721,500
DARYA VARIA LAB (INDONESIA)
Manufacturer of generic
pharmaceuticals 752,560 1,122,718
FPA MEDICAL MANAGEMENT* (US)
Provider of regional health care
management services 200,000 3,762,500
GENERAL SURGICAL INNOVATIONS* (US)
Developer of surgical devices 22,000 156,750
HORIZON MENTAL HEALTH
MANAGEMENT* (US)
Psychiatric care provider 150,000 3,956,250
INTENSIVA HEALTHCARE* (US)
Provider of acute long-term care
for the critically ill 225,000 1,603,125
MEDICIS PHARMACEUTICAL (CLASS A)* (US)
Developer of skin care products 100,000 5,025,000
PEPTIDE THERAPEUTICS (UK)
Biopharmaceutical development
company 130,000 400,922
SHIRE PHARMACEUTICALS* (UK)
Biotechnology company specializing
in metabolic bone diseases and
Alzheimer's diseases 175,000 562,487
TAMRO (FINLAND)
Health care wholesaler for
Scandinavia and the Baltic states 748,500 5,436,208
TOTAL RENAL CARE HOLDINGS* (US)
Provider of dialysis services 55,000 2,145,000
TOWA PHARMACEUTICAL (JAPAN)
Large generic drug wholesaler 58,000 951,821
VANGUARD MEDICA GROUP (UK)
Emerging biopharmaceutical
company planning to develop and
commercialize new drugs 61,500 495,437
DRUGS AND HEALTH CARE (CONTINUED)
WATERS* (US)
Manufacturer of liquid
chromatography instruments 244,000 $ 7,564,000
WATSON PHARMACEUTICALS* (US)
Manufacturer of off-patent
medications 125,000 4,156,250
-----------
46,472,966
-----------
ELECTRIC UTILITIES 1.9%
CALENERGY* (US)
Developer of geothermal
energy power 425,000 12,325,000
CENTRAL COSTANERA (ADSS)+ (ARGENTINA)
Electrical power generation
company 20,000 630,000
OKINAWA ELECTRIC POWER (JAPAN)
Supplier of electricity to
Okinawa Island 54,500 1,353,532
-----------
14,308,532
-----------
ELECTRICAL DISTRIBUTION 0.9%
ABACUS POLAR (UK)
Distributor of electronic components 717,500 1,798,251
REXEL (FRANCE)
European electrical distributor 7,155 2,116,554
TRIFAST (UK)
Manufacturer and distributor of
fasteners for the electronics
industry 349,000 2,405,395
-----------
6,320,200
-----------
ELECTRONICS 5.1%
BERG ELECTRONICS* (US)
Manufacturer of electronic
connectors 350,000 9,887,500
BMC INDUSTRIES (US)
Television aperture masks 200,000 5,925,000
ELECTRO SCIENTIFIC INDUSTRIES* (US)
Laser trimming systems, memory
repair systems, and test and
production equipment 120,000 2,430,000
ENPLAS (JAPAN)
Manufacturer of electronic
components and engineering plastics 39,000 759,807
FAIREY GROUP (UK)
Electrical and electronic engineering 250,000 2,780,905
FOSTER ELECTRIC (JAPAN)
Speaker manufacturer with
worldwide production 122,000 572,795
HORIBA INSTRUMENTS (JAPAN)
Manufacturer of instruments
and analyzers 322,000 3,560,509
LOJACK* (US)
Manufacturer of stolen vehicle
tracking devices 400,000 4,200,000
OTRA (NETHERLANDS)
Holding company for various technical
product wholesale companies 217,930 4,076,693
- ----------
See footnotes on page 42.
34
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
ELECTRONICS (continued)
RYOYO ELECTRO (JAPAN)
Distributor of electronic goods 191,000 $ 3,385,871
-----------
37,579,080
-----------
FINANCIAL SERVICES 6.1%
CENTRALE POUR L'INDUSTRIE (FRANCE)
Diversified holding company with
interests in financial services
and insurance 5,743 361,079
FINNVEDEN (SERIES B)* (SWEDEN)
Industrial conglomerate 357,550 5,161,372
FOKUS BANK (NORWAY)
Provider of banking services 647,000 3,764,216
FUJI FIRE AND MARINE INSURANCE (JAPAN)
Non-life insurance firm 687,000 3,116,972
HAMBRECHT & QUIST GROUP* (US)
Investment bank 100,000 1,987,500
ICHIYOSHI SECURITIES (JAPAN)
Kansai-based securities business 602,000 2,932,075
JAYHAWK ACCEPTANCE* (US)
Consumer finance company 125,000 1,757,813
MANHATTAN CARD (HONG KONG)
Operator of credit card business 4,815,000 2,381,875
MUTUAL RISK MANAGEMENT (US)
Provider of risk management
services to insurance brokers 85,066 2,722,112
NEWCOURT CREDIT GROUP (CANADA)
Financial services company 60,000 1,863,591
NISSHIN FIRE & MARINE INSURANCE (JAPAN)
Non-life insurance company 404,000 1,786,889
T. ROWE PRICE (US)
Investment advisor to the
T. Rowe Price mutual funds and
institutional money managers 60,000 2,040,000
PROTECTOR FORSIKRING* (NORWAY)
Provider of non-life insurance
policies 44,800 1,572,975
ROOSEVELT FINANCIAL GROUP (US)
Largest St. Louis-based savings
institution 360,000 6,232,500
SOUTHERN BANK (MALAYSIA)
Commercial bank 480,000 1,548,081
SSANGYONG INVESTMENT (SOUTH KOREA)
Securities firm 80,000 1,219,970
UNIONAMERICA HOLDINGS (ADRS) (UK)
Provider of property and casualty
reinsurance 200,000 3,725,000
WORLD ACCEPTANCE* (US)
Small-loan consumer financier 90,000 585,000
-----------
44,759,020
-----------
INDUSTRIAL GOODS AND
SERVICES 6.1%
ANGPANNEFORENINGEN (CLASS B) (SWEDEN)
Engineering consultancy 165,750 2,669,711
ASSYSTEM (FRANCE)
Global industrial consultant for the
nuclear, steel, oil, automobile,
space, and transportation industries 78,780 6,799,004
INDUSTRIAL GOODS
AND SERVICES (CONTINUED)
BACOU USA* (US)
Designer and manufacturer of
personal protective gear 125,000 $ 2,085,938
DRILEX INTERNATIONAL (US)
Provider of precision drilling
products and services 150,000 2,493,750
DRUCK HOLDINGS (UK)
Worldwide engineering group 300,000 1,611,176
FINNING (CANADA)
Lessor of construction equipment 80,000 1,597,790
FORSHEDA (SWEDEN)
Manufacturer of automobile
components 187,896 6,452,541
KARDEX (SWITZERLAND)
Manufacturer and distributor of
industrial storage and retrieval
systems 1,839 532,266
KOMORI (JAPAN)
Top maker of offset
printing machines 157,000 3,527,161
MAXIM INTEGRATED PRODUCTS* (US)
Manufacturer of linear and
mixed-signal integrated circuits 50,000 1,759,375
MEMTEC (ADRS) (AUSTRALIA)
Researcher, developer, and
producer of filtration and
separation products 150,000 5,146,875
MITSUBISHI CABLE INDUSTRIES (JAPAN)
Maker of electrical wires and cables 332,000 1,823,888
NATIONAL OILWELL (US)
Designer and manufacturer of
oil and gas drilling equipment 60,000 1,395,000
PRINTRAK INTERNATIONAL* (US)
Designer, developer, and
manufacturer of automated
fingerprint identification systems 195,000 1,986,562
TECHNIP* (FRANCE)
Engineering contractors 33,390 2,913,626
THERMO FIBERGEN* (US)
Developer of equipment that
recovers materials from pulp
mill residue 39,000 492,375
VISUAL ACTION HOLDINGS (UK)
Rentor of cameras and related
equipment 565,000 2,110,274
-----------
45,397,312
-----------
LEISURE AND HOTELS 2.5%
ALLIED LEISURE (UK)
UK's largest bowling alley operator 4,100,000 3,569,812
CAPSTAR HOTEL* (US)
Owner and renovator of hotels 49,000 882,000
GTECH HOLDINGS* (US)
Operator of state and local
lottery systems 150,000 4,425,000
MANDARIN ORIENTAL* (HONG KONG)
Operator and manager of
hotels in the Pacific 1,200,000 1,620,000
- ----------
See footnotes on page 42.
35
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
LEISURE AND HOTELS (CONTINUED)
SANKYO (JAPAN)
Manufacturer of pachinko
game equipment 98,000 $ 3,405,704
SUN INTERNATIONAL HOTELS* (US)
Operator of resort and casino hotels 100,000 4,725,000
-----------
18,627,516
-----------
MANUFACTURING 12.8%
AGCO (US)
Manufacturer of farm equipment 66,000 1,674,750
ASAHI DIAMOND INDUSTRIES (JAPAN)
Manufacturer of
diamond-tipped tools 337,000 3,489,776
BRITISH POLYTHENE INDUSTRIES (UK)
Manufacturer and converter of
polythene 250,000 2,974,165
COBHAM (UK)
High-integrity engineering 330,000 3,187,442
DAVID BROWN GROUP (UK)
Diversified engineering company;
manufacturer of transmission
equipment and pumps 1,097,332 4,366,410
DOMNICK HUNTER (UK)
Manufacturer of filtration,
purification, and separation products 575,700 3,738,323
L'EUROPEENNE D'EXTINCTEURS (FRANCE)
Seller and distributor of fire
extinguishers 131,660 7,737,977
GERRY WEBER INTERNATIONAL* (GERMANY)
Designer and manufacturer of
ladies' apparel 2,854 109,100
GLORY KOGYO (JAPAN)
Manufacturer and major exporter
of currency-handling machines 132,000 3,394,120
HOKKAI CAN (JAPAN)
Manufacturer of cans for
the food industry 402,000 2,667,065
HOKUSHIN (JAPAN)
Producer of fiber board 287,000 2,669,767
HUCKE (GERMANY)
Manufacturer of textiles
and clothing 231,850 4,446,752
INDUSTRIE NATUZZI (ADRS)*+ (ITALY)
Manufacturer of leather furniture 33,240 1,508,265
KOMATSU SEIREN (JAPAN)
Printer of long-staple fabrics 224,000 1,985,432
LASSILA & TIKANOJA (FINLAND)
Industrial conglomerate 27,800 1,645,839
LINTEC (JAPAN)
Largest maker of gum
and adhesive tapes 112,000 1,700,395
NICHICON (JAPAN)
Manufacturer of electrical equipment 297,000 3,701,097
PLM (SWEDEN)
Manufacturer of food packaging 416,100 6,417,540
RAUMA GROUP (FINLAND)
Manufacturer of forestry-related
machinery 431,500 7,882,233
MANUFACTURING (continued)
ROCKSHOX (US)
Designer and manufacturer of
high-performance bicycle
suspension products 63,500 $ 809,625
SAMAS GROEP (NETHERLANDS)
Manufacturer of office furniture 154,750 5,279,861
SIG SCHWEIZERISCHE INDUSTRIE-GESELLSCHAFT*
(SWITZERLAND)
Industrial conglomerate 3,866 4,695,300
SODICK (JAPAN)
Manufacturer of electrodischargers 399,000 3,921,720
STOVES* (UK)
Manufacturer of ovens 432,500 1,918,052
TSUBAKIMOTO NAKISHIMA (JAPAN)
Manufacturer of ball bearings 355,000 3,489,250
TSUDAKOMA (JAPAN)
Manufacturer of air-jet looms 583,000 3,233,488
VALMET (FINLAND)
Manufacturer of paper and pulp
machinery 299,710 4,564,547
WELLINGTON HOLDINGS (UK)
Producer of sealing systems and
rubber compounds 440,000 1,843,901
-----------
95,052,192
-----------
MEDIA 2.5%
AAMULEHTI YHTYMAE (FINLAND)
Publisher 14,050 411,262
AUDIOFINA (LUXEMBOURG)
Radio and television broadcasting 310 13,351
CAPITAL RADIO (UK)
Commercial radio station in
London 465,200 4,417,619
GWR GROUP (UK)
Local radio operator 875,000 2,933,479
SOUTH CHINA MORNING POST (HONG KONG)
English language newspaper 3,875,000 3,307,554
TOEI (JAPAN)
Producer of movies, particularly of
animated movies 258,000 1,895,094
TRINITY INTERNATIONAL HOLDINGS (UK)
Publisher of regional newspapers
in the UK, US, and Canada 552,600 3,817,651
UNITED VIDEO SATELLITE GROUP
(CLASS A)* (US)
Satellite-delivered program services 102,500 1,819,375
-----------
18,615,385
-----------
MEDICAL PRODUCTS AND
TECHNOLOGY 1.9%
HITACHI MEDICAL (JAPAN)
Manufacturer of medical equipment 201,000 3,139,798
IDX SYSTEMS* (US)
Health care information systems 150,000 4,387,500
IMNET SYSTEMS* (US)
Electronic information and document
management systems 200,000 2,750,000
NCS HEALTHCARE (CLASS A)* (US)
Health care facility and pharmacy
services 130,000 3,948,750
-----------
14,226,048
-----------
- ----------
See footnotes on page 42.
36
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
METALS 0.9%
NAKAYAMA STEEL WORKS (JAPAN)
Small blast furnace company,
mainly for the housing industry 647,000 $ 3,486,248
SANYO SPECIAL STEEL (JAPAN)
Steel manufacturer 1,026,000 3,529,548
-----------
7,015,796
-----------
PAPER AND PRINTING 1.9%
APPLIED GRAPHICS TECHNOLOGIES* (US)
Provider of digital pre-press services 53,000 824,813
BOBST (SWITZERLAND)
Manufacturer of machinery for the
paper and package industries 1,969 2,541,998
MUNSKJO (SWEDEN)
Producer of specialty paper 400,000 3,950,737
NISSHA PRINTING (JAPAN)
Integrated printing firm 180,000 2,148,311
RENGO (JAPAN)
Manufacturer of paper board 548,000 3,496,235
ROTTNEROS (SWEDEN)
Manufacturer of pulp, wooden
boards, and other forest products 143,000 165,141
WACE GROUP (UK)
Provider of pre-press and printing
services 687,500 777,616
-----------
13,904,851
-----------
RESOURCES 0.8%
NITTETSU MINING (JAPAN)
Open cast coal miner 435,000 3,722,027
QNI (AUSTRALIA)
Producer of nickel and cobalt 1,229,000 2,471,262
-----------
6,193,289
-----------
RESTAURANTS 2.1%
AIYA (JAPAN)
Operator of restaurant chain 156,000 2,231,505
KENTUCKY FRIED CHICKEN (JAPAN)
Fast food restaurants 194,000 3,268,802
KFC HOLDINGS (MALAYSIA)
Fast food restaurants 430,000 1,701,622
KFC HOLDINGS (RIGHTS)* (MALAYSIA)
Fast food restaurants 86,000 104,139
PIZZA EXPRESS (UK)
Operator of restaurant chain 675,000 5,662,916
SAGAMI CHAIN (JAPAN)
Noodle restaurant chain 155,000 2,897,323
-----------
15,866,307
-----------
RETAILING 6.3%
AOYAMA TRADING (JAPAN)
Retailer of suits and clothing 131,000 3,345,415
CLINTON CARDS (UK)
Retailer of greeting cards 736,043 1,730,927
COURTS (SINGAPORE)
Retailer of household furniture 1,076,000 1,428,555
RETAILING (CONTINUED)
DESIGNER HOLDINGS* (US)
Developer and marketer of
designer sportswear 210,000 $ 4,016,250
D'IETEREN TRADING (BELGIUM)
Rentor of automobiles 7,550 725
FOTOLABO CLUB (SWITZERLAND)
Film processor 7,945 3,095,292
FROST GROUP (UK)
Gas station chain 355,633 795,816
GUANGNAN HOLDINGS (HONG KONG)
Distributor of live and fresh food
products 3,336,000 2,265,044
HAMLEY'S (UK)
Toy store 209,700 1,348,041
HORNBACH BAUMARKT (GERMANY)
Large home improvement and
garden center retailer 118,090 3,891,580
JARDINE INTERNATIONAL MOTOR HOLDINGS
(HONG KONG)
Holding company for Jardine
Matheson Group 1,846,000 2,315,766
JEAN PASCALE (GERMANY)
Clothing retailer 45,656 541,643
JOSHIN DENKI (JAPAN)
Budget electrical appliance retailer 141,000 1,732,339
LOJAS ARAPUA (GDRS)*+ (BRAZIL)
Specialist electrical appliance
retailers 50,000 949,490
MOEBEL WALTHER (GERMANY)
Retailer of furniture and related
products 105,000 6,477,509
PET CITY HOLDINGS (UK)
Retailer of pet products 275,000 2,271,310
PRODEGA (SWITZERLAND)
Food retailer 4,450 1,302,011
SHIMACHU (JAPAN)
Furniture retailer 63,000 1,730,496
TAG HEUER (ADRS)* (SWITZERLAND)
Designer and producer of
sports watches 58,800 940,800
TSUTSUMI JEWELRY (JAPAN)
Manufacturer and retailer of jewelry 96,400 3,037,086
XEBIO (JAPAN)
Retailer of outdoor clothing 98,000 3,182,097
-----------
46,398,192
-----------
SUPPORT SERVICES 0.9%
CMG (UK)
Information technology
consulting 467,900 5,733,973
CRT Group (UK)
Provider of training and recruitment
services; publisher of multimedia
products 250,000 1,055,808
-----------
6,789,781
-----------
- ----------
See footnotes on page 42.
37
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
TECHNOLOGY 1.4%
ASYST TECHNOLOGIES* (US)
Miniature clean-room environment
devices for the manufacture of
silicon wafers 125,000 $ 2,046,875
BTG (UK)
Technology transfer company
assisting in the commercialization
of technological innovations 44,600 1,732,949
CREDENCE SYSTEMS* (US)
Manufacturer of automated
semiconductor test equipment 90,000 1,231,875
GETRONICS (NETHERLANDS)
Computer systems integration
house and consultant 160,416 3,935,026
OPAL* (US)
Semiconductor inspection
equipment 150,000 1,275,000
-----------
10,221,725
-----------
TELECOMMUNICATIONS 1.2%
AMERICAN PORTABLE TELECOM* (US)
Provider of cellular telephone
services 300,000 2,325,000
ARCH COMMUNICATIONS GROUP* (US)
Provider of nationwide paging
services 300,000 3,468,750
BOSTON COMMUNICATIONS* (US)
Wireless telephone support services 80,600 669,988
ICT GROUP* (US)
Call center teleservices 140,000 770,000
KVH INDUSTRIES* (US)
Digital navigation systems and
satellite communications 175,000 1,312,500
------------
8,546,238
------------
TRANSPORTATION 2.6%
COMFORT (SINGAPORE)
Taxi operator 2,078,000 1,844,160
DAWSON GROUP (UK)
Rentor of commercial vehicles 1,018,400 2,593,823
TRANSPORTATION (CONTINUED)
HUB GROUP (CLASS A)* (US)
Freight transportation services 150,000 $ 3,309,375
IINO KAIUN* (JAPAN)
Shipping company 799,000 3,295,568
METACORP (MALAYSIA)
Constructor and operator of toll roads 760,000 2,315,789
NATIONAL EXPRESS GROUP (UK)
Long distance coach services
operating in the UK and Europe 335,000 2,576,050
RUBIS (FRANCE)
Chemical storage and distribution
company 78,810 2,386,713
TONAMI TRANSPORT (JAPAN)
Regional transport company 117,000 665,344
------------
18,986,822
------------
VETERINARY PRODUCTS 0.5%
VIRBAC (FRANCE)
Manufacturer of animal drugs
and veterinary products 33,972 3,893,734
------------
MISCELLANEOUS 0.2%
TAIWAN AMERICAN FUND (TAIWAN)
Fund investing in Taiwan 111,000 1,447,440
------------
TOTAL COMMON STOCKS
(Cost $682,871,564) 711,462,105
------------
PREFERRED STOCKS 0.4%
(Cost $3,217,925)
MANUFACTURING 0.4%
GERRY WEBER INTERNATIONAL (GERMANY)
Designer and manufacturer
of ladies' apparel 76,934 2,854,760
-----------
TOTAL INVESTMENTS 96.6%
(Cost $686,089,489) 714,316,865
OTHER ASSETS LESS LIABILITIES 3.4% 25,487,145
------------
NET ASSETS 100.0% $739,804,010
============
- ----------
See footnotes on page 42.
38
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
SHARES VALUE
------ -----
COMMON STOCKS 97.6%
BROADCASTING 0.4%
BELL CABLEMEDIA (ADRS)* (UK)
Cable television operator 170,000 $ 2,762,500
-----------
COMPUTER AND BUSINESS
SERVICES 11.4%
ADMIRAL (UK)
Computer software and services 950,000 4,916,526
ALTRAN TECHNOLOGIES (FRANCE)
Computer services 9,693 2,895,721
AZLAN (UK)
Integrator of networking
equipment 640,000 7,603,446
BTG (UK)
Technology transfer company
assisting in the commercialization
of technological inventions 135,000 5,245,475
CEGEDIM (FRANCE)
Consulting services 16,700 1,311,492
CMG (NETHERLANDS)
Information technology consulting 845,700 10,363,799
CRT GROUP (UK)
Provider of training and recruitment
services; publisher of multimedia
products 805,000 3,399,702
CSK (JAPAN)
Information services company 255,000 7,496,709
ENATOR* (SWEDEN)
Supplier of computer services 71,000 1,575,129
LOGICA (UK)
Supplier of computer services 1,000,000 13,223,031
MERKANTILDATA (NORWAY)
Systems integrator and distributor 78,500 1,203,159
PERSONA (UK)
Networking distribution 1,669,914 8,560,760
SECOM (JAPAN)
Security services pioneer 109,000 6,485,476
SLIGOS (FRANCE)
Supplier of computer services 50,912 5,477,455
UNILOG (FRANCE)
Computer consultants 17,241 1,817,872
-----------
81,575,752
-----------
COMPUTER HARDWARE/
PERIPHERALS 14.7%
ACORN COMPUTER* (UK)
Supplier to the educational
computer market 695,000 2,256,500
ASTEC (UK)
Designer and manufacturer of
power conversion products and
electronic components 3,650,000 9,088,494
CANON (JAPAN)
Manufacturer of printers and
photocopiers 370,000 7,078,543
COMPUTER HARDWARE/
PERIPHERALS (CONTINUED)
CHUNG HO COMPUTER (SOUTH KOREA)
Manufacturer of ATMs and cash
dispensers 35,100 $ 1,690,747
EMC* (US)
Manufacturer of enterprise
storage devices 500,000 13,125,000
GATEWAY 2000* (US)
Marketer of personal computers 200,000 9,412,500
KOMAG* (US)
Manufacturer of thin film
magnetic media for hard-disk drives 330,000 9,116,250
LEXMARK INTERNATIONAL GROUP
(CLASS A)* (US)
Manufacturer of laser and
ink jet printers 400,000 9,450,000
PSION (UK)
Manufacturer of hand-held
computers 914,900 6,290,831
RASTER GRAPHICS (US)
Manufacturer of high performance
printing systems 223,900 1,875,163
READ-RITE* (US)
Manufacturer of recording heads
for disk drives 250,000 4,406,250
SAMSUNG DISPLAY DEVICES (GDSS)
(SOUTH KOREA)
Manufacturer of computer monitors 65,000 4,090,772
SEAGATE TECHNOLOGY* (US)
Global hard-disk drive supplier 160,000 10,680,000
STORAGE TECHNOLOGY* (US)
Tape and disk-based data
storage equipment 250,000 10,656,250
TDK (JAPAN)
Magnetic tapes
and heads for disk drives 74,000 4,338,043
VARITRONIX INTERNATIONAL (HONG KONG)
Manufacturer of color printers,
digital video storage, and
editing systems 1,070,000 1,951,166
-----------
105,506,509
-----------
COMPUTER SOFTWARE 13.8%
AMERICA ONLINE (US)
Interactive/Internet services 400,000 10,850,000
CADENCE DESIGN SYSTEMS* (US)
Software for computer-aided
engineering 200,000 7,300,000
CODA GROUP (UK)
Developer of financial accounting
software 670,000 1,417,509
EIDOS* (UK)
Developer of entertainment software 242,000 2,880,961
HUMMINGBIRD COMMUNICATIONS (CANADA)
X-Windows networking software 150,000 4,312,500
INFORMIX* (US)
Developer of database management
systems 200,000 4,437,500
- ----------
See footnotes on page 42.
39
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
COMPUTER SOFTWARE (continued)
LEARMONTH & BURCHETT MANAGEMENT
SYSTEMS* (UK)
Supplier of computer-aided
software and engineering tools 600,000 $ 703,058
LERNOUT & HAUSPIE SPEECH PRODUCTS*
(BELGIUM)
Developer of advanced speech
technologies 83,500 1,398,625
MENTOR GRAPHICS* (US)
Computer-aided engineering systems 500,000 4,218,750
MICROSOFT* (US)
Producer of microcomputer software 60,000 8,238,750
MISYS (UK)
Provider of software products and
services for the financial services
industry 300,100 4,432,210
NETWORK GENERAL* (US)
Local area network management
software 300,000 7,181,250
ORACLE SYSTEMS* (US)
Database management software
systems 100,000 4,231,250
PARAMETRIC TECHNOLOGY* (US)
Developer of mechanical
design software 200,000 9,762,500
PC DOCS GROUP INTERNATIONAL* (CANADA)
Document software products 200,000 1,662,500
SAPIENT* (US)
Designer and developer of enterprise
application software 75,000 3,431,250
STRUCTURAL DYNAMICS RESEARCH (US)
Developer of mechanical design
software 350,000 6,190,625
SYNOPSYS* (US)
Integrated circuit design software 250,000 11,312,500
3DO* (US)
Developer of video game software
and game platforms 700,000 3,981,250
VIRTUALITY GROUP* (UK)
Designer of virtual reality systems
and related software 600,000 1,284,058
-----------
99,227,046
-----------
DISTRIBUTORS 1.2%
ABACUS POLAR (UK)
Distributor of electronic
components 1,240,000 3,107,778
ELECTROCOMPONENTS (UK)
Distributor of electronic
components 800,000 5,383,605
-----------
8,491,383
-----------
ELECTRONICS 12.2%
ADAPTEC* (US)
Manufacturer of computer
input-output systems 100,000 6,081,250
ADE* (US)
Manufacturer of semiconductor
inspection systems 400,000 3,675,000
ELECTRONICS (CONTINUED)
ADFLEX SOLUTIONS (US)
Flexible circuit boards 150,000 $ 1,331,250
ELECTRO SCIENTIFIC INDUSTRIES* (US)
Manufacturer of memory
circuit repair systems 200,000 4,050,000
ELECTROSTAR (US)
Manufacturer of memory
circuit repair systems 625,000 7,695,313
GENERAL ELECTRIC (UK)
Supplier of diversified electronics 1,250,000 7,720,216
HADCO* (US)
Printed circuit boards 550,000 16,671,875
HIROSE ELECTRONICS (JAPAN)
Manufacturer of specialized
connectors 91,200 5,410,373
HITACHI (JAPAN)
Manufacturer of
diversified electronics 600,000 5,318,122
MERIX* (US)
Electronic circuit boards 150,000 3,131,250
MURATA MANUFACTURING (JAPAN)
Manufacturer of capacitors 167,000 5,363,931
PHILIPS ELECTRONICS (NETHERLANDS)
Consumer and industrial
electronics 49,000 1,723,698
RACAL ELECTRONICS (UK)
Data communications 1,000,000 4,508,036
VENTURE MANUFACTURING (SINGAPORE)
Contract manufacturer 3,140,000 5,707,064
VICOR* (US)
Manufacturer of modular
power converters 290,000 5,256,250
YAGEO (GDRS)*+ (TAIWAN)
Manufacturer of passive
components 387,487 3,834,029
-----------
87,477,657
-----------
MEDIA 0.3%
AUSTRALIS MEDIA* (AUSTRALIA)
Satellite broadcasting 300,000 43,936
TV FILME* (BRAZIL)
Owner and operator of subscription
TV systems in Brazil 120,000 1,770,000
-----------
1,813,936
-----------
MEDICAL PRODUCTS AND
TECHNOLOGY 2.2%
COCHLEAR (AUSTRALIA)
Developer of hearing aids 1,650,000 4,310,534
FRESENIUS (GERMANY)
Dialysis equipment 29,700 6,332,477
PHARMACIA & UPJOHN (SWEDEN)
Global pharmaceutical and
biotechnology company 147,800 5,154,208
-----------
15,797,219
-----------
- ----------
See footnotes on page 42.
40
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
NETWORKING/COMMUNICATIONS
INFRASTRUCTURE 13.6%
ANITE GROUP* (UK)
Supplier of data communications
and software products 2,450,000 $ 1,275,921
CABLETRON SYSTEMS* (US)
Manufacturer of computer
interconnection equipment 130,000 8,108,750
CIDCO* (US)
Manufacturer of telephone call
identifiers 200,000 3,825,000
CISCO SYSTEMS* (US)
Computer network routers and
switches 300,000 18,543,750
COLONIAL DATA TECHNOLOGIES* (US)
Manufacturer of caller identification
devices 200,000 1,912,500
ECI TELECOMMUNICATIONS (ISRAEL)
Telecommunications equipment
supplier 400,000 8,025,000
L.M. ERICSSON TELEFON (SERIES B) (SWEDEN)
Manufacturer of telecommunications
equipment 256,700 6,943,056
FILTRONIC COMTEC (UK)
Designer and manufacturer of
sophisticated devices for mobile
telecommunications systems 250,000 819,828
GEMSTAR INTERNATIONAL* (US)
Television and video recording
products 250,000 5,484,375
GLENAYRE TECHNOLOGIES* (US)
Manufacturer of paging
infrastructure equipment 450,000 11,559,375
NEC (JAPAN)
Manufacturer of diversified
electronics 413,000 4,494,252
NOKIA (FINLAND)
Manufacturer and developer of
telecommunications systems and
equipment 103,900 4,788,313
TELEMETRIX (UK)
Networking components 180,000 183,088
3COM* (US)
Supplier of adapter cards, hubs,
and routers for local area
computer networks 180,000 12,183,750
U.S. ROBOTICS* (US)
Modems and remote access
concentrators 150,000 9,440,625
-----------
97,587,583
-----------
SEMICONDUCTORS 14.6%
ATMEL* (US)
Non-volatile memory circuits 300,000 7,631,250
C-CUBE MICROSYSTEMS* (US)
Video compression circuits 150,000 5,831,250
ESS TECHNOLOGY* (US)
Mixed-signal semiconductor audio
solutions 300,000 4,762,500
SEMICONDUCTORS (CONTINUED)
INTEL (US)
Microprocessors and FLASH
memory circuits 200,000 $ 21,962,500
INTERNATIONAL RECTIFIER* (US)
Power semiconductors 450,000 5,568,750
KYOCERA (JAPAN)
Supplier of semiconductor packaging,
capacitors, and cellular components 65,000 4,283,896
LATTICE SEMICONDUCTOR* (US)
Programmable logic devices 200,000 6,825,000
MAXIM INTEGRATED PRODUCTS* (US)
Manufacturer of linear and
mixed-signal integrated circuits 300,000 10,556,250
MICROCHIP TECHNOLOGY* (US)
Field programmable
microcontrollers 300,000 10,837,500
ROHM (JAPAN)
Producer of custom linear
integrated circuits 97,000 5,745,941
SAMSUNG ELECTRONICS (GDRS)
((CENT) NON-VOTING)*+ (SOUTH KOREA)
Manufacturer of consumer
electronics and semiconductors 187,430 4,029,745
S3* (US)
Supplier of multimedia acceleration
solutions for PCs 400,000 7,500,000
TOWER SEMICONDUCTOR* (ISRAEL)
Semiconductor foundry services 350,000 2,428,125
XILINX* (US)
Field programmable gate arrays 200,000 6,537,500
-----------
104,500,207
-----------
SEMICONDUCTOR CAPITAL
EQUIPMENT 7.3%
ASM LITHOGRAPHY (NETHERLANDS)
Manufacturer of semiconductor
production equipment 126,000 4,520,250
ASYST TECHNOLOGIES* (US)
Miniature clean-room environment
devices for the manufacture of
silicon wafers 300,000 4,912,500
AVAL DATA (JAPAN)
Manufacturer of computer
peripherals 200,000 1,878,017
BROOKS AUTOMATION* (US)
Systems and modules for
semiconductor manufacturing 250,000 2,515,625
CREDENCE SYSTEMS* (US)
Manufacturer of automated
semiconductor test equipment 250,000 3,421,875
DUPONT PHOTOMASKS* (US)
Designer and manufacturer of
photomasks used in the production of
semiconductors 95,000 3,449,688
MIMASU SEMICONDUCTOR (JAPAN)
Wafer inspection devices 180,000 2,764,370
NOVELLUS SYSTEMS* (US)
Chemical vapor deposition
equipment 150,000 6,187,500
- ----------
See footnotes on page 42.
41
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) October 31, 1996
SHARES VALUE
------ -----
SEMICONDUCTOR CAPITAL
EQUIPMENT (CONTINUED)
OPAL* (US)
Semiconductor inspection equipment 85,000 $ 722,500
SHINKAWA (JAPAN)
Producer of wire bonders 28,000 503,730
SILICONWARE PRECISION INDUSTRIES
(GDRS)* (TAIWAN)
IC packaging 284,800 2,314,000
TENCOR INSTRUMENTS* (US)
Wafer inspection devices 500,000 9,500,000
ULTRATECH STEPPER* (US)
Photolithography systems 300,000 5,062,500
VEECO INSTRUMENTS* (US)
Ion beam etching and surface
measurement systems 400,000 4,850,000
-----------
52,602,555
-----------
TELECOMMUNICATIONS 4.4%
DDI (JAPAN)
Long distance and cellular services
operator 800 6,002,633
KOREA MOBILE TELECOM (GDSS)
(SOUTH KOREA)
Cellular services operator 375,000 4,687,500
MILLICOM INTERNATIONAL CELLULAR*
(LUXEMBOURG)
Cellular services operator 50,000 2,000,000
TELEBRAS (ADRS) (BRAZIL)
Provider of telecommunications
services 8,000 591,791
TELECOM ITALIA (ITALY)
Provider of telecommunications
services 2,700,000 6,013,125
TELECOM ITALIA MOBILE* (ITALY)
Cellular services operator 1,600,000 3,305,045
TELE DANMARK (SERIES B) (DENMARK)
Provider of telecommunications
services 80,000 4,021,790
VODAFONE (UK)
Cellular services operator 1,200,000 4,638,233
-----------
31,260,117
-----------
MISCELLANEOUS 1.5%
CELSIUS INDUSTRIES (SERIES B) (SWEDEN)
Producer of defense and
technology products 71,000shs. $ 922,421
GLORY KOGYO (JAPAN)
Manufacturer and major exporter
of currency-handling machines 175,000 4,499,781
ISOTRON (UK)
Irradiation services 475,000 2,744,287
LINX PRINTING TECHNOLOGY (UK)
Manufacturer of specialized
printers 820,000 1,514,668
TRAFFIC MASTER* (UK)
Supplier of traffic information
services 168,750 920,018
-----------
10,601,175
-----------
TOTAL COMMON STOCKS
(Cost $680,319,551) 699,203,639
-----------
CONVERTIBLE BONDS 0.4%
(Cost $3,562,130)
SEMICONDUCTORS 0.4%
UNITED MICRO ELECTRONICS
(TAIWAN) 11/4%, 6/8/2004
Manufacturer of
semiconductors $2,120,000 2,602,300
-----------
TOTAL INVESTMENTS 98.0%
(Cost $683,881,681) 701,805,939
OTHER ASSETS LESS LIABILITIES 2.0% 14,303,935
-----------
NET ASSETS 100.0% $716,109,874
===========
- ----------
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
42
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 1996
<TABLE>
<CAPTION>
EMERGING MARKETS GLOBAL GROWTH GLOBAL SMALLER GLOBAL
INTERNATIONAL GROWTH OPPORTUNITIES COMPANIES TECHNOLOGY
FUND FUND* FUND FUND FUND
--------------- --------------- -------------- ------------- ------------
ASSETS:
Investments, at value (see portfolios of investments):
<S> <C> <C> <C> <C> <C>
Common stocks ....................... $ 100,008,020 $ 40,389,823 $ 167,067,553 $ 711,462,105 $ 699,203,639
Convertible bonds ................... -- -- -- -- 2,602,300
Preferred stocks .................... -- -- -- 2,854,760 --
------------- ------------ ------------- ------------- -------------
Total investments ....................... 100,008,020 40,389,823 167,067,553 714,316,865 701,805,939
Cash .................................... 1,557,767 3,568,132 6,399,532 22,481,634 6,093,293
Receivable for dividends and interest ... 537,437 9,978 239,610 1,267,735 991,849
Unrealized appreciation on
forward currency contracts .......... 426,975 57 403,944 1,246,933 111,303
Receivable for securities sold .......... 268,168 496,869 1,147,183 -- 13,026,388
Receivable for Capital Stock sold ....... 166,124 615,558 312,617 9,516,202 1,530,978
Expenses prepaid to shareholder
service agent ....................... 48,916 66,544 106,529 372,684 477,856
Deferred organizational expenses ........ 2,448 -- -- 5,577 --
Other ................................... 2,712 36,478 25,338 15,045 21,685
------------- ------------ ------------- ------------- -------------
Total Assets ............................ 103,018,567 45,183,439 175,702,306 749,222,675 724,059,291
------------- ------------ ------------- ------------- -------------
LIABILITIES:
Payable for securities purchased ........ 403,030 862,571 4,136,236 4,181,176 3,178,045
Payable for Capital Stock repurchased ... 358,922 129,640 538,378 3,045,785 3,418,413
Unrealized depreciation on forward
currency contracts .................. 242,849 38 310,458 771,300 2
Accrued expenses, taxes, and other ...... 255,761 121,732 410,670 1,420,404 1,352,957
------------- ------------ ------------- ------------- -------------
Total Liabilities ....................... 1,260,562 1,113,981 5,395,742 9,418,665 7,949,417
------------- ------------ ------------- ------------- -------------
Net Assets .............................. $ 101,758,005 $ 44,069,458 $ 170,306,564 $ 739,804,010 $ 716,109,874
============= ============ ============= ============= =============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ............................. $ 2,970 $ 2,931 $ 13,306 $ 23,142 $ 44,189
Class B ............................. 170 1,560 1,154 7,065 1,698
Class D ............................. 2,863 2,021 6,679 19,400 17,794
Additional paid-in capital .............. 91,886,622 45,879,438 156,336,183 675,429,358 714,591,581
Accumulated net investment loss ......... (10,972) (492) (1,657) (7,397) (4,288)
Undistributed/accumulated net
realized gain (loss) on investments . 3,944,227 (909,789) (265,641) 35,627,544 (16,564,040)
Net unrealized appreciation
(depreciation) of investments ....... 8,542,689 (501,007) 17,026,140 32,107,233 23,782,902
Net unrealized depreciation on
translation of assets and liabilities
denominated in foreign currencies
and forward currency contracts ...... (2,610,564) (405,204) (2,809,600) (3,402,335) (5,759,962)
------------- ------------ ------------- ------------- -------------
Net Assets .............................. $ 101,758,005 $ 44,069,458 $ 170,306,564 $ 739,804,010 $ 716,109,874
============= ============ ============= ============= =============
NET ASSETS:
Class A ............................. $ 50,998,137 $ 19,863,816 $ 107,509,360 $ 350,358,490 $ 499,858,181
Class B ............................. $ 2,842,580 $ 10,541,066 $ 9,257,369 $ 103,968,103 $ 18,839,423
Class D ............................. $ 47,917,288 $ 13,664,576 $ 53,539,835 $ 285,477,417 $ 197,412,270
SHARES OF CAPITAL STOCK
OUTSTANDING:
Class A ............................. 2,969,647 2,931,300 13,305,688 23,142,058 44,189,238
Class B ............................. 169,850 1,559,487 1,154,340 7,065,169 1,698,083
Class D ............................. 2,862,966 2,021,447 6,678,535 19,399,748 17,793,727
NET ASSET VALUE PER SHARE:
Class A ............................. $17.17 $6.78 $8.08 $15.14 $11.31
Class B ............................. $16.74 $6.76 $8.02 $14.72 $11.09
Class D ............................. $16.74 $6.76 $8.02 $14.72 $11.09
</TABLE>
- ----------
See Notes to Financial Statements.
43
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1996
<TABLE>
<CAPTION>
EMERGING MARKETS GLOBAL GROWTH GLOBAL SMALLER GLOBAL
INTERNATIONAL GROWTH OPPORTUNITIES COMPANIES TECHNOLOGY
FUND FUND* FUND FUND FUND
------------- --------------- -------------- ------------- ------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C>
Dividends ................................ $ 1,852,697 $ 131,091 $ 1,550,279 $ 6,246,889 $ 3,314,208
Interest ................................. 199,144 96,637 286,534 1,285,796 3,840,628
----------- ----------- ------------ ------------ ------------
Total investment income** ................ 2,051,841 227,728 1,836,813 7,532,685 7,154,836
----------- ----------- ------------ ------------ ------------
EXPENSES:
Management fees .......................... 963,308 66,785 1,318,826 4,279,964 7,054,213
Distribution and service fees ............ 527,357 94,471 628,050 2,600,618 3,185,685
Shareholder account services ............. 232,136 101,900 414,699 1,308,931 2,573,587
Custody and related services ............. 131,646 34,892 156,947 412,697 434,334
Registration ............................. 88,503 29,748 140,962 249,624 313,721
Shareholder reports and
communications ....................... 79,116 30,772 78,120 111,386 236,880
Auditing and legal fees .................. 63,756 30,584 72,309 63,756 63,757
Directors' fees and expenses ............. 8,559 2,452 7,896 8,400 8,415
Amortization of organizational
expenses ............................. 7,343 -- -- 6,083 --
Miscellaneous ............................ 8,471 1,252 4,127 12,763 16,566
----------- ----------- ------------ ------------ ------------
Total expenses ........................... 2,110,195 392,856 2,821,936 9,054,222 13,887,158
----------- ----------- ------------ ------------ ------------
Net investment loss ...................... (58,354) (165,128) (985,123) (1,521,537) (6,732,322)
----------- ----------- ------------ ------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain (loss) on
investments .............................. 3,110,034 (904,503) (572,959) 36,490,841 (19,588,016)
Net realized gain (loss) from foreign
currency transactions ................ 2,141,677 (48,331) 280,999 1,559,761 5,689,533
Net change in unrealized
appreciation of investments .......... 6,001,037 (501,007) 17,026,140 14,883,512 (26,884,293)
Net change in unrealized appreciation/
depreciation on translation of assets
and liabilities denominated in foreign
currencies and forward currency
contracts ............................ (4,614,858) (405,204) (2,809,600) (6,531,471) (2,377,802)
----------- ----------- ------------ ------------ ------------
Net gain (loss) on investments and
foreign currency transactions ........ 6,637,890 (1,859,045) 13,924,580 46,402,643 (43,160,578)
----------- ----------- ------------ ------------ ------------
Increase (decrease) in net assets
from operations ...................... $ 6,579,536 $(2,024,173) $ 12,939,457 $ 44,881,106 $(49,892,900)
=========== =========== ============ ============ ============
- ----------------------
* The Series began operations on May 28, 1996.
** Net of foreign taxes withheld as follows: $217,108 $5,762 $145,774 $811,644 $459,248
See Notes to Financial Statements.
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
EMERGING GLOBAL
MARKETS GROWTH
INTERNATIONAL FUND GROWTH OPPORTUNITIES
------------------ FUND FUND
YEAR ENDED OCTOBER 31, ---- ----
---------------------------- 5/28/96* 11/1/95*
1996 1995 TO 10/31/96 TO 10/31/96
------------ ------------- ------------- ------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) .................... $ (58,354) $ 91,680 $ (165,128) $ (985,123)
Net realized gain (loss) on
investments .................................. 3,110,034 107,795 (904,503) (572,959)
Net realized gain (loss) from
foreign currency
transactions ................................. 2,141,677 2,665,639 (48,331) 280,999
Net change in unrealized
appreciation/depreciation
of investments ............................... 6,001,037 (1,749,894) (501,007) 17,026,140
Net change in unrealized
appreciation/depreciation
on translation of assets and
liabilities denominated in
foreign currencies and
forward currency contracts ................... (4,614,858) (2,193,540) (405,204) (2,809,600)
------------- ------------ ------------ -------------
Increase (decrease) in net
assets from operations ....................... 6,579,536 (1,078,320) (2,024,173) 12,939,457
------------- ------------ ------------ -------------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income--
Class A ...................................... -- -- -- --
Net realized gain on investments:
Class A ...................................... (2,689,619) (2,535,690) -- --
Class D ...................................... (1,872,543) (858,276) -- --
------------- ------------ ------------ -------------
Decrease in net assets from
distributions ................................ (4,562,162) (3,393,966) -- --
------------- ------------ ------------ -------------
CAPITAL SHARE
TRANSACTIONS:** Net proceeds from sale of shares:
Class A ...................................... 12,139,764 14,368,837 19,208,602 106,023,483
Class B ...................................... 2,847,268 -- 11,237,933 9,447,410
Class D ...................................... 18,419,176 15,310,748 12,152,846 48,762,322
Shares issued in payment of
dividends--Class A ........................... -- -- -- --
Exchanged from associated Funds:
Class A ...................................... 18,336,472 9,722,723 3,554,578 13,737,482
Class B ...................................... 52,151 -- 20,098 147,370
Class D ...................................... 6,116,903 2,556,052 2,931,518 8,540,034
Shares issued in payment of gain distributions:
Class A ...................................... 1,773,043 2,386,633 -- --
Class D ...................................... 1,649,485 815,096 -- --
------------- ------------ ------------ -------------
Total ........................................... 61,334,262 45,160,089 49,105,575 186,658,101
------------- ------------ ------------ -------------
Cost of shares repurchased:
Class A ......................................... (15,705,367) (26,669,397) (997,418) (15,204,795)
Class B ...................................... (5,615) -- (133,610) (34,193)
Class D ...................................... (4,688,461) (2,728,512) (404,805) (3,136,356)
Exchanged into associated Funds:
Class A ...................................... (15,800,882) (10,430,952) (993,426) (7,098,155)
Class B ...................................... (1,437) -- (96,640) (169,376)
Class D ...................................... (5,428,114) (3,647,337) (386,045) (3,648,119)
------------- ------------ ------------ -------------
Total ........................................... (41,629,876) (43,476,198) (3,011,944) (29,290,994)
------------- ------------ ------------ -------------
Increase in net assets from
capital share transactions ................... 19,704,386 1,683,891 46,093,631 157,367,107
------------- ------------ ------------ -------------
Increase (decrease) in net assets ............... 21,721,760 (2,788,395) 44,069,458 170,306,564
NET ASSETS:
Beginning of period ............................. 80,036,245 82,824,640 -- --
------------- ------------ ------------ -------------
End of period ................................... $ 101,758,005 $ 80,036,245 $ 44,069,458 $ 170,306,564
============= ============ ============ =============
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SMALLER GLOBAL
COMPANIES FUND TECHNOLOGY FUND
-------------- ---------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
----------------------------- --------------------------------
1996 1995 1996 1995
------------- ------------ ------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) .................... $ (1,521,537) $ (636,807) $ (6,732,322) $ (2,259,466)
Net realized gain (loss) on
investments .................................. 36,490,841 13,624,396 (19,588,016) 37,630,540
Net realized gain (loss) from
foreign currency
transactions ................................. 1,559,761 612,519 5,689,533 3,115,205
Net change in unrealized
appreciation/depreciation
of investments ............................... 14,883,512 9,286,138 (26,884,293) 45,696,354
Net change in unrealized
appreciation/depreciation
on translation of assets and
liabilities denominated in
foreign currencies and
forward currency contracts ................... (6,531,471) 122,958 (2,377,802) (4,035,567)
------------- ------------- ------------- -------------
Increase (decrease) in net
assets from operations ....................... 44,881,106 23,009,204 (49,892,900) 80,147,066
------------- ------------- ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income--
Class A ...................................... -- -- (734,205) --
Net realized gain on investments:
Class A ...................................... (7,753,041) (1,358,384) (29,793,277) (506,847)
Class D ...................................... (6,615,915) (1,134,039) (10,861,462) (84,094)
------------- ------------- ------------- -------------
Decrease in net assets from
distributions ................................ (14,368,956) (2,492,423) (41,388,944) (590,941)
------------- ------------- ------------- -------------
CAPITAL SHARE
TRANSACTIONS:** Net proceeds from sale of shares:
Class A ...................................... 216,788,438 49,499,681 202,973,417 360,662,688
Class B ...................................... 105,243,040 -- 19,512,733 --
Class D ...................................... 177,428,825 40,513,236 93,281,519 141,486,971
Shares issued in payment of
dividends--Class A ........................... -- -- 530,711 --
Exchanged from associated Funds:
Class A ...................................... 71,523,117 15,768,458 49,024,078 27,074,750
Class B ...................................... 576,794 -- 119,863 --
Class D ...................................... 32,459,050 5,514,387 36,228,561 19,697,655
Shares issued in payment of gain distributions:
Class A ...................................... 7,033,698 1,265,938 27,593,949 470,951
Class D ...................................... 6,106,235 1,065,232 10,345,726 81,693
------------- ------------- ------------- -------------
Total ........................................... 617,159,197 113,626,932 439,610,557 549,474,708
------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ......................................... (30,945,950) (8,956,953) (88,142,523) (33,194,965)
Class B ...................................... (900,770) -- (232,986) --
Class D ...................................... (17,014,912) (4,830,211) (27,805,782) (6,863,194)
Exchanged into associated Funds:
Class A ...................................... (34,854,479) (12,541,162) (74,146,717) (19,854,654)
Class B ...................................... (326,119) -- (142,667) --
Class D ...................................... (11,852,034) (4,374,915) (51,102,325) (16,982,122)
------------- ------------- ------------- -------------
Total ........................................... (95,894,264) (30,703,241) (241,573,000) (76,894,935)
------------- ------------- ------------- -------------
Increase in net assets from
capital share transactions ................... 521,264,933 82,923,691 198,037,557 472,579,773
------------- ------------- ------------- -------------
Increase (decrease) in net assets ............... 551,777,083 103,440,472 106,755,713
552,135,898
NET ASSETS:
Beginning of period ............................. 188,026,927 84,586,455 609,354,161 57,218,263
------------- ------------- ------------- -------------
End of period ................................... $ 739,804,010 $ 188,026,927 $ 716,109,874 $ 609,354,161
============= ============= ============= =============
</TABLE>
- -------------
* Commencement of operations.
** The then existing Series began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Seligman Henderson Global Fund Series, Inc. (the "Fund") consists of five
separate Series: Seligman Henderson International Fund (the "International
Fund"), Seligman Henderson Emerging Markets Growth Fund (the "Emerging Markets
Growth Fund"), Seligman Henderson Global Growth Opportunities Fund (the "Global
Growth Opportunities Fund"), Seligman Henderson Global Smaller Companies Fund
(the "Global Smaller Companies Fund"), and Seligman Henderson Global Technology
Fund (the "Global Technology Fund"). The Global Growth Opportunities Fund and
the Emerging Markets Growth Fund had no operations prior to their commencement
on November 1, 1995 and May 28, 1996, respectively, other than those relating to
organizational matters. Each Series of the Fund offers three classes of shares.
All shares existing prior to the commencement of Class D shares (May 3, 1993, in
the case of the Global Smaller Companies Fund, and September 21, 1993, in the
case of the International Fund) were classified as Class A shares. The Fund
began offering Class B shares on April 22, 1996, for the then existing Series.
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 A shares
purchased in an amount of $1,000,000 or more are sold without an initial sales
charge but are subject to a contingent deferred sales load ("CDSL") of 1% on
redemptions within 18 months of purchase. Class B 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 a CDSL, if applicable, of 5%
on redemptions in the first year after purchase, declining to 1% in the sixth
year and 0% thereafter. Class B shares will automatically convert to Class A
shares on the last day of the month that precedes the eighth anniversary of
their date of purchase. 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 CDSL of 1% imposed on certain redemptions made
within one year of purchase. The three classes of shares for each 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 other 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 principally traded in
foreign currencies, and each Series may temporarily hold funds in foreign
currencies. The books and records of the Fund are maintained in US dollars.
Foreign currency amounts are translated into US dollars on the following
basis:
(i) market value of investment securities, other assets, and
liabilities, at the closing daily rate of exchange as reported by
a pricing service;
(ii) purchases and sales of investment securities, income, and
expenses, at the rate of exchange prevailing on the respective
dates of such transactions.
The Fund's 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, which are to
be distributed to shareholders of the Fund. The rate of exchange between the US
dollar and other currencies is determined by the forces of supply and demand in
the foreign exchange markets.
Net realized foreign exchange gains 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 Fund's books,
and the US dollar equivalents 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 Fund 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 Fund
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 Fund 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.
46
<PAGE>
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. Each Series has
elected or 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 Fund's 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 gains 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
Fund.
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.
g. Deferred organizational expenses are being amortized on a straight-line
basis over a five-year period, beginning with the commencement of operations
of the International Fund and the Global Smaller Companies Fund.
h. 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. Class-specific
expenses, which include distribution and service fees and any other items
that are specifically attributed to a particular class, are charged directly
to such class. For the year/period ended October 31, 1996, distribution and
service fees were the only class-specific expenses.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year/period ended October 31, 1996, were as follows:
SERIES PURCHASES SALES
------ ---------- -----
International Fund $ 69,643,562 $ 50,836,064
Emerging Markets Growth
Fund 45,700,203 3,489,142
Global Growth
Opportunities Fund 195,637,900 41,744,084
Global Smaller
Companies Fund 677,107,236 183,809,901
Global Technology Fund 676,636,882 462,613,676
At October 31, 1996, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities, including the effects of foreign currency translations,
were as follows:
TOTAL TOTAL
UNREALIZED UNREALIZED
SERIES APPRECIATION DEPRECIATION
------ ------------ -----------
International Fund $ 11,056,102 $ 5,297,385
Emerging Markets Growth
Fund 2,161,699 3,073,148
Global Growth
Opportunities Fund 23,014,538 8,865,529
Global Smaller
Companies Fund 86,279,564 58,052,188
Global Technology Fund 110,839,125 92,914,867
4. J. &W. Seligman &Co. Incorporated (the "Manager") manages the affairs of the
Fund and provides or arranges for the necessary personnel and facilities.
Seligman Henderson Co. (the "Subadviser"), an entity owned 50% each by the
Manager and Henderson plc, supervises and directs the Fund's global investments.
Compensation of all officers of the Fund, all directors of the Fund who are
employees or consultants of the Manager, and all personnel of the Fund and
Manager, is paid by the Manager or by Henderson plc. The Manager receives a fee,
calculated daily and payable monthly, equal to 1.25% per annum of the average
daily net assets of Emerging Markets Growth Fund and 1.00% per annum of the
other Series' average daily net assets, of which 1.15% and 0.90%, respectively,
are paid to the Subadviser. During the period ended October 31, 1996, the
Manager and Subadviser, at their discretion, waived a portion of their fees for
the Emerging Markets GrowthFund equal to $119,524. The management fee reflected
in the statements of operations represents 0.45% per annum of that Series'
average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of each Series' shares and an affiliate of the Manager, received
concessions after commissions were paid to dealers for sale of Class A shares as
follows:
DISTRIBUTOR DEALER
SERIES CONCESSIONS COMMISSIONS
------ ------------ -----------
International Fund $ 42,719 $ 331,586
Emerging Markets Growth
Fund 31,761 749,016
Global Growth
Opportunities Fund 201,990 4,179,489
Global Smaller
Companies Fund 810,616 6,498,877
Global Technology Fund 930,729 7,535,643
47
<PAGE>
- --------------------------------------------------------------------------------
NOTES OT FINANCIAL STATEMENTS (CONTINUED)
The Fund 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 Fund pursuant to
the Plan. For the year/period ended October 31, 1996, fees incurred by the
International Fund, the Emerging Markets Growth Fund, the Global Growth
Opportunities Fund, the Global Smaller Companies Fund, and the Global Technology
Fund, aggregated $90,323, $15,432, $220,454, $534,241, and $1,192,495,
respectively, or 0.17%, 0.22%, 0.24%, 0.24%, and 0.23%, respectively, per annum
of the average daily net assets of Class A shares.
The Fund has a Plan with respect to Class B and 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 B and Class D shares for which the organizations are
responsible; and, for Class D shares only, 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 Fund to the Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of up to 0.75% on an
annual basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially all
of this fee to a third party (the "Purchaser") which provided funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
For the year/period ended October 31, 1996, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, were as follows:
SERIES CLASS B CLASS D
------ -------- --------
International Fund $ 7,987 $ 429,047
Emerging Markets Growth
Fund 34,000 45,039
Global Growth
Opportunities Fund 29,251 378,345
Global Smaller
Companies Fund 270,075 1,796,302
Global Technology Fund 52,605 1,940,585
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year of purchase. For the year/period ended
October 31, 1996, such charges were as follows:
SERIES AMOUNT
------ --------
International Fund $ 11,127
Emerging Markets Growth
Fund 1,677
Global Growth
Opportunities Fund 21,849
Global Smaller
Companies Fund 62,753
Global Technology Fund 173,702
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate amounts of such
payments and the Class B share distribution fees retained by the Distributor for
the year/period ended October 31, 1996 were as follows:
SERIES AMOUNT
------ ---------
International Fund $ 7,499
Emerging Markets Growth
Fund 29,634
Global Growth
Opportunities Fund 24,532
Global Smaller
Companies Fund 269,847
Global Technology Fund 50,272
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of Fund shares, as well as distribution and
service fees pursuant to the Plan. For the year/period ended October 31, 1996,
Seligman Services, Inc. received commissions from sales of Fund shares and
distribution and service fees, pursuant to the Plan, as follows:
DISTRIBUTION AND
SERIES COMMISSIONS SERVICE FEES
------ ------------ --------------
International Fund $ 3,204 $15,809
Emerging Markets Growth
Fund 2,722 568
Global Growth
Opportunities Fund 9,362 3,281
Global Smaller
Companies Fund 137,567 25,474
Global Technology Fund 190,014 36,015
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost for shareholder account services the following
amounts:
SERIES AMOUNT
------ ---------
International Fund $ 230,137
Emerging Markets Growth Fund 101,900
Global Growth Opportunities Fund 412,700
Global Smaller Companies Fund 1,306,931
Global Technology Fund 2,571,588
48
<PAGE>
- --------------------------------------------------------------------------------
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 incurred for the legal services of Sullivan & Cromwell, a member of
which firm is a director of the Fund, were as follows:
SERIES AMOUNT
------ --------
International Fund $15,750
Emerging Markets GrowthFund 7,000
Global Growth Opportunities Fund 15,750
Global Smaller Companies Fund 15,750
Global Technology Fund 15,750
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. Deferred fees and the related accrued interest are not deductible for
federal income tax purposes until such amounts are paid. The annual cost of such
fees and interest is included in directors' fees and expenses, and the following
accumulated balances thereof at October 31, 1996, are included in other
liabilities:
SERIES AMOUNT
------ --------
International Fund $10,972
Emerging Markets GrowthFund 492
Global Growth Opportunities Fund 1,657
Global Smaller Companies Fund 7,397
Global Technology Fund 4,288
5. Effective July 31, 1996, the Fund entered into an $80 million committed line
of credit facility with a group of banks. Borrowings pursuant to the credit
facility are subject to interest at a rate equal to the federal funds rate plus
0.75% per annum. The Fund incurs a commitment fee of 0.10% per annum on the
unused portion of the credit facility. The credit facility may be drawn upon
only for temporary purposes and is subject to certain other customary
restrictions. The credit facility commitment expires one year from the date of
the agreement but is renewable with the consent of the participating banks. The
Fund made no borrowings during the period ended October 31, 1996.
6. In accordance with current federal income tax law, each of the Series' net
realized capital gains and losses are considered separately for purposes of
determining taxable capital gains. At October 31, 1996, the net loss
carryforwards for the Emerging Markets Growth Fund, the Global Growth
Opportunities Fund, and the Global Technology Fund amounted to $909,789,
$174,512 and $16,489,188, respectively, which are available for offset against
future taxable net gains, expiring in 2004. Accordingly, no capital gain
distributions are expected to be paid to shareholders of the Emerging Markets
Growth Fund, the Global Growth Opportunities Fund, and the Global Technology
Fund until net capital gains have been realized in excess of the available
capital loss carryforwards.
49
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. The Fund has 2,000,000,000 shares of Capital Stock authorized. The Board of
Directors, at its discretion, may classify any unissued shares of Capital Stock
among any Series of the Fund. As of October 31, 1996, the Board of Directors had
classified 400,000,000 shares for the International Fund, 100,000,000 shares for
the Emerging Markets Growth Fund, and 500,000,000 shares each for the Global
Growth Opportunities Fund, the Global Smaller Companies Fund and the Global
Technology Fund, all at a par value of $.001 per share.
<TABLE>
<CAPTION>
EMERGING GLOBAL
MARKETS GROWTH
GROWTH OPPORTUNITIES
INTERNATIONAL FUND FUND FUND
------------------------------ ------------- -------------
YEAR ENDED OCTOBER 31, 5/28/96* 11/1/95
------------------------------
1996 1995 TO 10/31/96 TO 10/31/96
------------ ------------- ------------- ------------
Sale of shares:
<S> <C> <C> <C> <C>
Class A .................................... 707,786 883,953 2,715,379 14,315,714
Class B .................................... 167,160 -- 1,589,508 1,161,258
Class D .................................... 1,095,491 957,943 1,719,727 6,425,478
Shares issued in payment
of dividends--Class A ...................... -- -- -- --
Exchanged from associated
Funds:
Class A .................................... 1,076,633 582,898 501,328 1,797,362
Class B .................................... 3,104 -- 2,904 18,033
Class D .................................... 365,666 156,168 415,187 1,108,493
Shares issued in payment of gain distributions:
Class A .................................... 106,939 152,467 -- --
Class D .................................... 101,382 52,587 -- --
---------- ---------- ---------- -----------
Total ......................................... 3,624,161 2,786,016 6,944,033 24,826,338
---------- ---------- ---------- -----------
Shares repurchased:
Class A .................................... (918,125) (1,626,181) (143,005) (1,897,331)
Class B .................................... (327) -- (19,141) (4,203)
Class D .................................... (278,839) (172,007) (58,321) (393,805)
Exchanged into associated
Funds:
Class A .................................... (922,041) (635,170) (142,402) (910,057)
Class B .................................... (87) -- (13,784) (20,748)
Class D .................................... (323,609) (227,011) (55,146) (461,631)
---------- ---------- ---------- -----------
Total ......................................... (2,443,028) (2,660,369) (431,799) (3,687,775)
---------- ---------- ---------- -----------
Increase in shares ............................ 1,181,133 125,647 6,512,234 21,138,563
========== ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SMALLER GLOBAL
COMPANIES FUND TECHNOLOGY FUND
------------------------ -----------------------------
*YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
-------------------------- ----------------------------
1996 1995 1996 1995
------------- ------------ ------------- -------------
Sale of shares:
<S> <C> <C> <C> <C>
Class A ...................................14,815,923 3,891,326 17,384,851 30,447,088
Class B ................................... 7,109,733 -- 1,722,202 --
Class D ...................................12,391,966 3,258,190 8,129,479 12,061,813
Shares issued in payment
of dividends--Class A ..................... -- -- 46,553 --
Exchanged from associated
Funds:
Class A ................................... 4,872,301 1,207,701 4,299,624 2,337,457
Class B ................................... 38,810 -- 10,746 --
Class D ................................... 2,260,491 425,098 3,216,569 1,690,219
Shares issued in payment of gain distributions
Class A ................................... 543,143 117,325 2,420,521 59,388
Class D ................................... 481,944 99,928 918,803 10,354
---------- ---------- ----------- -----------
Total ........................................42,514,311 8,999,568 38,149,348 46,606,319
---------- ---------- ----------- -----------
Shares repurchased:
Class A ...................................(2,088,149) (732,207) (7,730,984) (2,851,418)
Class B ................................... (60,958) -- (21,522) --
Class D ...................................(1,186,520) (398,296) (2,466,759) (578,504)
Exchanged into associated
Funds:
Class A ...................................(2,373,469) (989,792) (6,549,438) (1,731,922)
Class B ................................... (22,416) -- (13,343) --
Class D ................................... (822,351) (357,856) (4,547,765) (1,419,748)
----------- ---------- ----------- -----------
Total ........................................(6,553,863) (2,478,151) (21,329,811) (6,581,592)
----------- ---------- ----------- -----------
Increase in shares .......................... 35,960,448 6,521,417 16,819,537 40,024,727
=========== ========== =========== ===========
</TABLE>
50
<PAGE>
- --------------------------------------------------------------------------------
8. At October 31, 1996, the Fund had outstanding forward exchange currency
contracts to purchase or sell foreign currencies as follows:
<TABLE>
<CAPTION>
UNREALIZED
FOREIGN IN EXCHANGE SETTLEMENT APPRECIATION
CONTRACT CURRENCY FOR US $ DATE VALUE US $ (DEPRECIATION)
----------- ------------- ------------- ------------- ------------- ---------------
International Fund
Purchases:
<S> <C> <C> <C> <C> <C>
British Pounds 224,769 366,103 11/04/96 365,800 $ (303)
Japanese Yen 533,765,000 4,928,806 11/13/96 4,686,260 (242,546)
-----------
(242,849)
-----------
Sales:
Swiss Francs 1,343,184 1,068,648 11/01/96 1,059,293 9,355
French Francs 14,087,640 2,800,000 11/08/96 2,749,398 50,602
GermanDeutschemarks 3,105,900 2,100,000 11/08/96 2,046,722 53,278
Japanese Yen 533,765,000 5,000,000 11/13/96 4,686,260 313,740
-----------
426,975
-----------
$ 184,126
===========
EMERGING MARKETS GROWTH FUND
Sales:
IndonesianRupiahs 1,037,255,129 445,365 11/04/96 445,308 $ 57
Thai Bahts 12,229,065 429,289 11/04/96 429,327 (38)
-----------
$ 19
-----------
GLOBAL GROWTH OPPORTUNITIES FUND
Purchases:
MalaysianRinggits 360,669 142,613 11/01/96 142,726 $ 113
Japanese Yen 683,219,200 6,308,871 11/13/96 5,998,413 (310,458)
-----------
(310,345)
-----------
SALES:
French Francs 4,716,755 923,224 11/05/96 920,980 2,244
Japanese Yen 683,219,200 6,400,000 11/13/96 5,998,413 401,587
-----------
403,831
-----------
$ 93,486
===========
GLOBAL SMALLER COMPANIES FUND
Purchases:
British Pounds 676,272 1,095,898 11/01/96 1,100,598 $ 4,700
Malaysian Ringgits 691,826 273,557 11/01/96 273,774 217
Malaysian Ringgits 53,707 21,257 11/04/96 21,253 (4)
Japanese Yen 1,697,372,700 15,673,602 11/13/96 14,902,306 (771,296)
-----------
(766,383)
-----------
SALES:
French Francs 32,703,450 6,500,000 11/08/96 6,382,531 117,469
German Deutschemarks 7,395,000 5,000,000 11/08/96 4,873,147 126,853
Japanese Yen 1,697,372,700 15,900,000 11/13/96 14,902,306 997,694
-----------
1,242,016
-----------
$ 475,633
===========
GLOBAL TECHNOLOGY FUND
Purchases:
Japanese Yen 21,330 189 10/28/96 187 $ (2)
-----------
Sales:
Japanese Yen 4,650,605,000 41,387,641 01/31/97 41,276,338 111,303
-----------
$ 111,301
===========
</TABLE>
- ----------
* Commencement of operations.
51
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from each Class' beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements
to their equivalent per share amounts, based on average shares outstanding.
The total return based on net asset value measures each Class' performance
assuming investors purchased Fund 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 each Series. The total
returns for periods of less than one year are not annualized.
Average commission rate paid represents the average commissions paid by the
Series to purchase or sell portfolio securities. It is determined by dividing
the total commission dollars paid by the number of shares purchased and sold
during the period for which commissions were paid. This rate is provided for the
fiscal periods beginning November 1, 1995.
<TABLE>
<CAPTION>
INTERNATIONAL FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------- ----------
YEAR ENDED OCTOBER 31, 4/7/92* 4/22/96**
----------------------------------------- TO TO
PER SHARE OPERATING PERFORMANCE: 1996 1995 1994 1993 10/31/92 10/31/96
----- ----- ----- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.71 $17.67 $15.98 $11.89 $12.00 $17.38
------ ------ ------ ------ ------ ------
Net investment income (loss)***......................... 0.05 0.06 0.04 0.04 0.08 (0.03)
Net realized and unrealized
investment gain (loss)................................ 1.77 (0.42) 0.91 4.25 (0.23) (0.54)
Net realized and unrealized gain (loss) on
foreign currency transactions......................... (0.44) 0.09 1.08 (0.17) 0.04 (0.07)
------ ------ ------ ------ ------ ------
Increase (decrease) from investment operations.......... 1.38 (0.27) 2.03 4.12 (0.11) (0.64)
Dividends paid.......................................... -- -- (0.01) (0.03) -- --
Distributions from net gain realized.................... (0.92) (0.69) (0.33) -- -- --
------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset value.............. 0.46 (0.96) 1.69 4.09 (0.11) (0.64)
------ ------ ------ ------ ------ ------
Net asset value, end of period.......................... $17.17 $16.71 $17.67 $15.98 $11.89 $16.74
====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: 8.43% (1.24)% 12.85% 34.78% (0.92)% (3.68)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.......................... 1.81% 1.69% 1.63% 1.75% 1.75%+ 2.66%+
Net investment income (loss) to average
net assets............................................ 0.28% 0.35% 0.27% 0.27% 1.25%+ (0.35)%+
Portfolio turnover...................................... 55.71% 60.70% 39.59% 46.17% 12.77% 55.71%+++
Average commission rate paid............................ $0.0180 $0.0180+++
Net assets, end of period (000s omitted)................ $50,998 $48,763 $62,922 $33,134 $14,680 $2,843
Without management fee waiver and expense
reimbursement***
Net investment income (loss) per share.................. $(0.04) --
Ratios:
Expenses to average net assets........................ 2.30% 2.92%+
Net investment income (loss) to
average net assets.................................. (0.28)% 0.08%+
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS D
----------------------------------------
YEAR ENDED OCTOBER 31, 9/21/93**
----------------------------- TO
PER SHARE OPERATING PERFORMANCE: 1996 1995 1994 10/31/93
----- ----- ----- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.43 $17.53 $15.96 $15.23
------ ------ ------ ------
Net investment income (loss)***......................... (0.08) (0.07) (0.09) (0.03)
Net realized and unrealized
investment gain (loss)................................ 1.75 (0.43) 0.91 1.17
Net realized and unrealized gain (loss) on
foreign currency transactions......................... (0.44) 0.09 1.08 (0.41)
------ ------ ------ ------
Increase (decrease) from investment operations.......... 1.23 (0.41) 1.90 0.73
Dividends paid.......................................... -- -- -- --
Distributions from net gain realized.................... (0.92) (0.69) (0.33) --
------ ------ ------ ------
Net increase (decrease) in net asset value.............. 0.31 (1.10) 1.57 0.73
------ ------ ------ ------
Net asset value, end of period.......................... $16.74 $16.43 17.53 15.96
====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: 7.62% (2.08)% 12.03 4.79%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.......................... 2.64% 2.50% 2.50% 2.50%+
Net investment income (loss) to average
net assets............................................ 0.47% (0.44)% (0.53)% (1.86)%+
Portfolio turnover...................................... 55.71% 60.70% 39.59% 46.17%++
Average commission rate paid............................ $0.0180
Net assets, end of period (000s omitted)................ $47,917 $31,273 $19,903 $1,648
Without management fee waiver and expense
reimbursement***
Net investment income (loss) per share.................. $(0.09) $(0.11) $(0.11)
Ratios:
Expenses to average net assets........................ 2.62% 2.67% 8.49%+
Net investment income (loss) to
average net assets.................................. (0.56)% (0.70)% (7.84)%+
</TABLE>
- ----------
* Commencement of investment operations.
** Commencement of operations.
*** The Manager and Subadviser, at their discretion, waived a portion of their
fees and, in some cases, the Subadviser reimbursed certain expenses for
the periods presented.
+ Annualized.
++ For the year ended October 31, 1993.
+++ For the year ended October 31, 1996.
See Notes to Financial Statements.
52
<PAGE>
<TABLE>
<CAPTION>
EMERGING MARKETS GROWTH FUND
--------------------------------------------
CLASS A CLASS B CLASS D
---------- ---------- ----------
5/28/96** 5/28/96** 5/28/96**
PER SHARE OPERATING PERFORMANCE: TO 10/31/96 TO 10/31/96 TO 10/31/96
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period...................... $7.14 $7.14 $7.14
------ ------ ------
Net investment income (loss)***........................... (0.02) (0.04) (0.04)
Net realized and unrealized investment gain (loss)........ (0.25) (0.25) (0.25)
Net realized and unrealized gain (loss) on
foreign currency transactions........................... (0.09) (0.09) (0.09)
------ ------ ------
Increase (decrease) from investment operations............ (0.36) (0.38) (0.38)
Dividends paid............................................ -- -- --
Distributions from net gain realized...................... -- -- --
------ ------ ------
Net increase (decrease) in net asset value................ (0.36) (0.38) (0.38)
------ ------ ------
Net asset value, end of period............................ $6.78 $6.76 $6.76
====== ====== ======
TOTAL RETURN BASED ON NET ASSET VALUE: (5.04)% (5.32)% (5.32)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................ 2.22%+ 3.00%+ 3.00%+
Net investment income (loss) to average
net assets.............................................. (0.69)%+ (1.47)%+ (1.47)%+
Portfolio turnover........................................ 12.24% 12.24% 12.24%
Average commission rate paid.............................. $0.0156 $0.0156 $0.0156
Net assets, end of period (000s omitted).................. $19,864 $10,541 $13,664
Without management fee waiver and expense
reimbursement***
Net investment loss per share............................. $(0.05) $(0.07) $(0.07)
Ratios:
Expenses to average net assets.......................... 3.02%+ 3.80%+ 3.80%+
Net investment loss to average net assets............... (1.49)%+ (2.27)%+ (2.27)%+
</TABLE>
<TABLE>
<CAPTION>
GLOBAL GROWTH OPPORTUNITIES FUND
--------------------------------------------
CLASS A CLASS B CLASS D
---------- ---------- ----------
11/1/95** 4/22/96** 11/1/95**
PER SHARE OPERATING PERFORMANCE: TO 10/31/96 TO 10/31/96 TO 10/31/96
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period...................... $7.14 $8.04 $7.14
------ ------ ------
Net investment income (loss)***........................... (0.03) (0.04) (0.09)
Net realized and unrealized investment gain (loss)........ 1.12 0.06 1.12
Net realized and unrealized gain (loss) on
foreign currency transactions........................... (0.15) (0.04) (0.15)
------ ------ ------
Increase (decrease) from investment operations............ 0.94 (0.02) 0.88
Dividends paid............................................ -- -- --
Distributions from net gain realized...................... -- -- --
------ ------ ------
Net increase (decrease) in net asset value................ 0.94 (0.02) 0.88
------ ------ ------
Net asset value, end of period............................ $8.08 $8.02 $8.02
====== ====== ======
TOTAL RETURN BASED ON NET ASSET VALUE: 13.17% (0.25)% 12.33%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................ 1.91% 2.53%+ 2.67%
Net investment income (loss) to average
net assets.............................................. (0.53)% (1.13)%+ (1.25)%
Portfolio turnover........................................ 31.44% 31.44%+++ 31.44%
Average commission rate paid.............................. $0.0160 $0.0160+++ $0.0160
Net assets, end of period (000s omitted).................. $107,509 $9,257 $53,540
Without management fee waiver and expense
reimbursement***
Net investment loss per share.............................
Ratios:
Expenses to average net assets..........................
Net investment loss to average net assets...............
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SMALLER COMPANIES FUND
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------------------- ----------
YEAR ENDED OCTOBER 31, 9/9/92* 4/22/96**
----------------------------------------- TO TO
PER SHARE OPERATING PERFORMANCE: 1996 1995 1994 1993 10/31/92 10/31/96
----- ----- ----- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.90 $11.93 $9.98 $7.15 $7.14 $14.44
------ ------ ------ ------ ------ ------
Net investment income (loss)***......................... -- (0.02) (0.08) (0.02) -- (0.06)
Net realized and unrealized investment gain............. 2.38 2.24 1.57 3.07 0.02 0.33
Net realized and unrealized investment gain on
foreign currency transactions......................... (0.18) 0.08 0.52 (0.20) (0.01) 0.01
------ ------ ------ ------ ------ ------
Increase from investment operations..................... 2.20 2.30 2.01 2.85 0.01 0.28
Dividends paid.......................................... -- -- -- (0.02) -- --
Distributions from net gain realized.................... (0.96) (0.33) (0.06) -- -- --
------ ------ ------ ------ ------ ------
Net increase in net asset value......................... 1.24 1.97 1.95 2.83 0.01 0.28
------ ------ ------ ------ ------ ------
Net asset value, end of period.......................... $15.14 $13.90 $11.93 $9.98 $7.15 $14.72
====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: 16.95% 20.10% 20.28% 39.86% 0.14% 1.94%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.......................... 1.75% 1.83% 1.92% 1.98% 1.75%+ 2.54%
Net investment income (loss) to average
net assets............................................ 0.01% (0.20)% (0.77)% (0.29)% 0.13%+ (0.80)%
Portfolio turnover...................................... 45.38% 63.05% 62.47% 60.03% -- 45.38%+++
Average commission rate paid............................ $0.0211 $0.0211+++
Net assets, end of period (000s omitted)................ $350,359 $102,479 $46,269 $20,703 $1,562 $103,968
Without management fee waiver and expense
reimbursement***
Net investment loss per share........................... $(0.18) $(0.07)
Ratios:
Expenses to average net assets........................ 3.90% 12.28%+
Net investment income (loss) to
average net assets.................................. 2.21% (10.44)%+
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SMALLER COMPANIES FUND
- ----------------------------------------------------------------------------------------------------
CLASS D
-----------------------------------------
YEAR ENDED OCTOBER 31, 5/3/93**
----------------------------- TO
PER SHARE OPERATING PERFORMANCE: 1996 1995 1994 10/31/93
----- ----- ----- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.63 $11.80 $9.94 $8.52
------ ------ ------ ------
Net investment income (loss)***......................... (0.11) (0.12) (0.16) (0.05)
Net realized and unrealized investment gain............. 2.34 2.20 1.57 1.60
Net realized and unrealized investment gain on
foreign currency transactions......................... (0.18) 0.08 0.51 (0.13)
------ ------ ------ ------
Increase from investment operations..................... 2.05 2.16 1.92 1.42
Dividends paid.......................................... -- -- -- --
Distributions from net gain realized.................... (0.96) (0.33) (0.06) --
------ ------ ------ ------
Net increase in net asset value......................... 1.09 1.83 1.86 1.42
------ ------ ------ ------
Net asset value, end of period.......................... $14.72 $13.63 $11.80 $9.94
====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: 16.14% 19.11% 19.45% 16.67%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.......................... 2.51% 2.61% 2.70% 2.75%+
Net investment income (loss) to average
net assets............................................ (0.75)% (0.97)% (1.53)% (1.35)%+
Portfolio turnover...................................... 45.38% 63.05% 62.47% 60.03%++
Average commission rate paid............................ $0.0211
Net assets, end of period (000s omitted)................ $285,477 $85,548 $38,317 $10,344
Without management fee waiver and expense
reimbursement***
Net investment loss per share........................... $(0.11)
Ratios:
Expenses to average net assets........................ 4.25%+
Net investment income (loss) to
average net assets.................................. (2.85)%+
</TABLE>
- ----------
* Commencement of investment operations.
** Commencement of operations.
*** The Manager and Subadviser, at their discretion, waived a portion of their
fees and, in some cases, the Subadviser reimbursed certain expenses for
the periods presented.
+ Annualized.
++ For the year ended October 31, 1993.
+++ For the year ended October 31, 1996.
See Notes to Financial Statements.
53
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GLOBAL TECHNOLOGY FUND
---------------------------------------------------------
CLASS A CLASS B
------------------------------------------ ----------
YEAR ENDED OCTOBER 31, 5/23/94** 4/22/96**
--------------------------- TO TO
PER SHARE OPERATING PERFORMANCE: 1996 1995 10/31/94 10/31/96
------ ------ -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.05 $8.37 $7.14 $11.47
------ ------ ------ ------
Net investment loss***.................................... (0.08) (0.10) (0.01) (0.08)
Net realized and unrealized investment gain (loss)........ (0.92) 4.90 1.08 (0.39)
Net realized and unrealized gain (loss) on
foreign currency transactions........................... 0.05 (0.05) 0.16 0.09
------ ------ ------ ------
Increase (decrease) from investment operations............ (0.95) 4.75 1.23 (0.38)
Dividends paid............................................ (0.02) -- -- --
Distributions from net gain realized...................... (0.77) (0.07) -- --
------ ------ ------ ------
Net increase (decrease) in net asset value................ (1.74) 4.68 1.23 (0.38)
------ ------ ------ ------
Net asset value, end of period $11.31 $13.05 $8.37 $11.09
====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: (7.33)% 57.31% 17.23% (3.31)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................ 1.75% 1.91% 2.00%+ 2.51%+
Net investment income (loss) to average
net assets.............................................. (0.74)% (0.89)% (0.45)%+ (1.40)%+
Portfolio turnover........................................ 73.00% 87.42% 29.20% 73.00%+++
Average commission rate paid $0.0182 $0.0182+++
Net assets, end of period (000s omitted).................. $499,858 $447,732 $50,719 $18,840
Without management fee waiver and expense
reimbursement***
Net investment loss per share............................. $(0.02)
Ratios:
Expenses to average net assets.......................... 2.18%+
Net investment loss to average net assets............... (0.63)%+
</TABLE>
<TABLE>
<CAPTION>
GLOBAL TECHNOLOGY FUND
- ----------------------------------------------------------------------------------------------------
CLASS D
---------------------------------------
YEAR ENDED OCTOBER 31, 5/23/94**
-------------------------- TO
PER SHARE OPERATING PERFORMANCE: 1996 1995 10/31/94
----- ----- -------
<S> <C> <C> <C>
Net asset value, beginning of period $12.89 $8.34 $7.14
------ ------ ------
Net investment loss***.................................... (0.17) (0.18) (0.04)
Net realized and unrealized investment gain (loss)........ (0.91) 4.85 1.08
Net realized and unrealized gain (loss) on
foreign currency transactions........................... 0.05 (0.05) 0.16
------ ------ ------
Increase (decrease) from investment operations............ (1.03) 4.62 1.20
Dividends paid............................................ -- -- --
Distributions from net gain realized...................... (0.77) (0.07) --
------ ------ ------
Net increase (decrease) in net asset value................ (1.80) 4.55 1.20
------ ------ ------
Net asset value, end of period $11.09 $12.89 $8.34
====== ====== ======
TOTAL RETURN BASED ON NET ASSET
VALUE: (8.07)% 55.95% 16.81%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets............................ 2.52% 2.66% 2.75%+
Net investment income (loss) to average
net assets.............................................. (1.50)% (1.63)% (1.22)%+
Portfolio turnover........................................ 73.00% 87.42% 29.20%
Average commission rate paid $0.0182
Net assets, end of period (000s omitted).................. $197,412 $161,622 $6,499
Without management fee waiver and expense
reimbursement***
Net investment loss per share............................. $(0.06)
Ratios:
Expenses to average net assets.......................... 3.36%+
Net investment loss to average net assets............... (1.83)%+
</TABLE>
- ----------
** Commencement of operations.
*** The Manager and Subadviser, at their discretion, waived a portion of their
fees and, in some cases, the Subadviser reimbursed certain expenses for
the periods presented.
+ Annualized.
+++ For the year ended October 31, 1996.
See Notes to Financial Statements.
54
<PAGE>
REPORT OF INDEPENDENT
AUDITORS
================================================================================
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the International Fund, the Emerging Markets
Growth Fund, the Global Growth Opportunities Fund, the Global Smaller Companies
Fund, and the Global Technology Fund Series of Seligman Henderson Global Fund
Series, Inc. as of October 31, 1996, the related statements of operations for
the year/period then ended and of changes in net assets (1) for each of the
years in the two-year period then ended, for the International Fund, the Global
Smaller Companies Fund, and the Global Technology Fund, (2) for the year then
ended for the Global Growth Opportunities Fund, and (3) for the period May 28,
1996 (commencement of operations) to October 31, 1996, for the Emerging Markets
Growth Fund and the financial highlights for each of the periods presented.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1996, by correspondence with the Fund's custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each Series of
Seligman Henderson Global Fund Series, Inc. as of October 31, 1996, the results
of their operations, the changes in their net assets, and the financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
December 2, 1996
================================================================================
55
<PAGE>
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
================================================================================
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and
Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE,
Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
CHAIRMAN AND CEO,
Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR,
Commonwealth Aluminum Corporation
BETSY S. MICHEL 2
DIRECTOR OR TRUSTEE,
Various Organizations
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
JAMES Q. RIORDAN 3
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE,
Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
RONALD T. SCHROEDER 1
MANAGING DIRECTOR,
J. & W. Seligman & Co. Incorporated
ROBERT L. SHAFER 3
DIRECTOR OR TRUSTEE,
Various Organizations
JAMES N. WHITSON 2
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT AND MANAGING DIRECTOR,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
- ----------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
================================================================================
56
<PAGE>
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS
================================================================================
William C. Morris
CHAIRMAN
Brian T. Zino
PRESIDENT
Brian Ashford-Russell
VICE PRESIDENT
Peter Bassett
VICE PRESIDENT
Iain C. Clark
VICE PRESIDENT
Nitin Mehta
VICE PRESIDENT
Arsen Mrakovcic
VICE PRESIDENT
Loris D. Muzzatti
VICE PRESIDENT
Lawrence P. Vogel
VICE PRESIDENT
Paul H. Wick
VICE PRESIDENT
Thomas G. Rose
TREASURER
Frank J. Nasta
SECRETARY
- --------------------------------------------------------------------------------
MANAGER
J.& W. Seligman &Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan &Cromwell
INDEPENDENT AUDITORS
Deloitte &Touche LLP
SUBADVISER
Seligman Henderson Co.
100 Park Avenue
New York, NY 10017
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access
Service
================================================================================
SELIGMAN FINANCIAL SERVICES, INC.
AN AFFILIATE OF
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
THIS REPORT IS INTENDED FOR THE INFORMATION OF SHAREHOLDERS OR THOSE WHO HAVE
RECEIVED THE OFFERING PROSPECTUS COVERING SHARES OF CAPITAL STOCK OF SELIGMAN
HENDERSON GLOBAL FUND SERIES, INC., WHICH CONTAINS INFORMATION ABOUT SALES
CHARGES, MANAGEMENT FEES, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY
BEFORE INVESTING OR SENDING MONEY.
<PAGE>
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
Part A - None.
Part B - Financial statements for the other Series of the
Registrant are included in the Registrant's Annual Report to
Shareholders, dated October 31, 1996, which is incorporated
by reference in the Statement of Additional Information.
These financial statements are: Portfolios of Investments as
of October 31, 1996; Statements of Assets and Liabilities as
of October 31, 1996; Statements of Operations for the year
ended October 31, 1996; Statements of Changes in Net Assets
for the years ended October 31, 1996 and 1995 for the
Seligman Henderson International Fund, the Seligman
Henderson Global Smaller Companies Fund and the Seligman
Henderson Global Technology Fund; for the year ended October
31, 1996 for the Seligman Henderson Global Growth
Opportunities Fund; for the period May 28, 1996
(commencement of operations) to October 31, 1996 for the
Seligman Emerging Markets Growth Fund; Notes to Financial
Statements; Financial Highlights from commencement of
operations of each of these five Series through October 31,
1996; Report of Independent Auditors.
(b) Exhibits: Exhibits listed below have been previously filed
and are incorporated by reference herein, except Exhibits
marked with an asterisk (*) which will be filed by
amendment.
(1) Form of Articles of Amendment and Restatement of Articles of
Incorporation of Registrant.*
(2) Amended and Restated By-Laws of Registrant. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 23, filed on
February 27, 1997.)
(3) Not applicable.
(4) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson International Fund are incorporated by
reference to Exhibit 4 of the Registrant's Post-Effective Amendment
No. 6, filed on April 23, 1993 and Post-Effective Amendment No. 8,
filed on September 21, 1993. Specimen Stock Certificate for Class B
Shares with respect to Seligman Henderson International Fund is
incorporated by reference to Form SE filed on April 16, 1996.
(4a) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson Global Smaller Companies Fund
(formerly, Seligman Henderson Global Emerging Companies Fund) are
incorporated by reference to Exhibit 4a to the Registrant's
Post-Effective Amendment No. 10, filed on August 10, 1992. Specimen
Stock Certificate for Class B Shares with respect to Seligman
Henderson Global Emerging Companies Fund is incorporated by reference
to Form SE filed on April 16, 1996.
(4b) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson Global Technology Fund are incorporated
by reference to Exhibit 4b of the Registrant's Post-Effective
Amendment No. 11, filed on May 10, 1994. Specimen Stock Certificate
for Class B Shares with respect to Seligman Henderson Global
Technology Fund is incorporated by reference to Form SE filed on
April 16, 1996.
(4c) Specimen Stock Certificates for Class A and Class D Shares with
respect to Seligman Henderson Global Growth Opportunities Fund are
incorporated by reference to Form SE, filed on behalf of the
Registrant on October 30, 1995. Specimen Stock Certificate for Class
B Shares with respect to Seligman Henderson Global Growth
Opportunities Fund is incorporated by reference to Form SE filed on
April 16, 1996.
(4d) Specimen Stock Certificates for Class A, Class B and Class D Shares
with respect to Seligman Henderson Emerging Markets Growth Fund are
incorporated by reference to Form SE, filed on behalf of the
Registrant on May 15, 1996.
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
(4e) Additional rights of security holders are set forth in Article FIFTH
and SEVENTH of the Registrant's Articles of Incorporation and
Articles I and IV of Registrant's By-Laws which are filed as Exhibit
1 and Exhibit 2, respectively, of this Post-Effective Amendment No.
23 to the Registrant's Registration Statement on Form N-1A.
(5a) Revised Management Agreement between the Registrant and J. & W.
Seligman & Co. Incorporated.*
(5b) Subadvisory Agreement between the Manager and the Subadviser with
respect to the Fund, the Seligman Henderson International Fund, the
Seligman Henderson Global Smaller Companies Fund, the Seligman
Henderson Global Technology Fund and the Seligman Henderson Global
Growth Opportunities Fund is incorporated by reference to the
Registrant's Post-Effective Amendment No. 17, filed on October 27,
1995.
(5c) Subadvisory Agreement between the Manager and the Subadviser with
respect to the Seligman Henderson Emerging Markets Growth Fund is
incorporated by reference to Registrant's Post-Effective Amendment
No. 21, filed on May 20, 1996.
(6) Distributing Agreement between the Registrant and Seligman Financial
Services, Inc. is incorporated by reference to Exhibit 6 of the
Registrant's Post-Effective Amendment No. 17, filed October 27, 1995.
(6a) Sales Agreement between Seligman Financial Services, Inc. and Dealers
is incorporated by reference to the Registrant's Post-Effective
Amendment No. 20, filed on April 19, 1996.
(7) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated is
incorporated by reference to Exhibit 7 of Registration Statement No.
2-92487, Post-Effective Amendment No. 21, filed on January 29, 1997.
(7a) Deferred Compensation Plan for Directors of Seligman Group of Funds
is incorporated by reference to Exhibit 7a of Registration Statement
No. 2-92487, Post-Effective Amendment No. 21, filed on January 29,
1997.
(8) Custody Agreement, dated May 1, 1996, between Registrant and Morgan
Stanley Trust Company is incorporated by reference to Exhibit 8 of
the Registrant's Post-Effective Amendment No. 22 filed on November
20, 1996.
(9) Recordkeeping Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 23, filed on February 27, 1997.)
(10) Opinion and Consent of Counsel.*
(11) Consent of Independent Auditors.*
(12) Not applicable.
(13) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson International Fund's Class A and Class D Shares
and J. & W. Seligman & Co. Incorporated.* Form of Purchase Agreement
for Initial Capital between Registrant's Seligman Henderson
International Fund's Class B shares and J. & W. Seligman & Co.
Incorporated is incorporated by reference to Exhibit 13a of the
Registrant's Post-Effective Amendment No. 20, filed on April 19,
1996.
(13a) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Smaller Companies Fund's Class D Shares and
J. & W. Seligman & Co. Incorporated.* Form of Purchase Agreement for
Initial Capital between Registrant's Seligman Henderson Global
Smaller Companies Fund's Class B shares and J. & W. Seligman & Co.
Incorporated is incorporated by reference to Exhibit 13b of the
Registrant's Post-Effective Amendment No. 20, filed on April 19,
1996.
(13b) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Technology Fund's Class A and D Shares and
J. & W. Seligman & Co. Incorporated.* Form of Purchase Agreement for
Initial Capital between Registrant's Seligman Henderson Global
Technology Fund's Class B shares and J. & W. Seligman & Co.
Incorporated is incorporated by reference to Exhibit 13c of the
Registrant's Post-Effective Amendment No. 20, filed on April 19,
1996.
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
(13c) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Growth Opportunities Fund's Class B shares
and J. & W. Seligman & Co. Incorporated is incorporated by reference
to Exhibit 13d of the Registrant's Post-Effective Amendment No. 20,
filed April 19, 1996.
(13d) Copy of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Emerging Markets Growth Fund Class A, Class B and
Class D Shares and J. & W. Seligman & Co. Incorporated is
incorporated by reference to Registrant's Post-Effective Amendment
No. 21, filed on May 20, 1996.
(14) The Seligman IRA Plan Agreement. (Incorporated by reference to
Exhibit 14 of Registration Statement No. 333-20621, Pre-Effective
Amendment No. 2, filed on April 17, 1997.)
(14a) The Seligman Simple IRA Plan Set-Up Kit. (Incorporated by reference
to Exhibit 14 of Registration Statement No. 333-20621, Pre-Effective
Amendment No. 2, filed on April 17, 1997.)
(14b) The Seligman Simple IRA Plan Agreement. (Incorporated by reference to
Exhibit 14 of Registration Statement No. 333-20621, Pre-Effective
Amendment No. 2, filed on April 17, 1997.)
(15) Administration, Shareholder Services and Distribution Plans for each
of the Seligman Henderson International Fund, the Seligman Henderson
Global Smaller Companies Fund, the Seligman Henderson Global
Technology Fund and the Seligman Henderson Global Growth
Opportunities Fund and amended form of Administration, Shareholder
Services and Distribution Agreement of the Registrant is incorporated
by reference to Exhibit 15 of the Registrant's Post-Effective
Amendment No. 20, filed April 19, 1996.
(15a) Administration, Shareholder Services and Distribution Plan of
Seligman Henderson Emerging Markets Growth Fund is incorporated by
reference to Registrant's Post-Effective Amendment No. 21, filed on
May 20, 1996.
(15b) Administration, Shareholder Services and Distribution Plan of
Seligman Henderson International Value Fund.*
(16) Schedule for Computation of each Performance Quotation provided in
Registration Statement in response to Item 22. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 23, filed on
February 27, 1997.)
(17) Financial Data Schedules meeting the requirements of Rule 483 under
the Securities Act of 1933: Not applicable
(18) Copy of Multiclass Plan entered into by Registrant pursuant to Rule
18f-3 under the Investment Company Act of 1940 is incorporated by
reference to Exhibit 18 of Registrant's Post-Effective Amendment No.
19 filed on March 5, 1996.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT - None
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
(1) (2)
Number of Record
TITLE OF CLASS HOLDERS AS OF JUNE 25, 1997
-------------- ---------------------------
<S> <C> <C>
Seligman Henderson Class A Common Stock (Par Value $.001) 2,756
International Fund Class B Common Stock (Par Value $.001) 412
Class D Common Stock (Par Value $.001) 2,529
Seligman Henderson Class A Common Stock (Par Value $.001) 3,495
Emerging Markets Growth Fund Class B Common Stock (Par Value $.001) 1,591
Class D Common Stock (Par Value $.001) 1,844
</TABLE>
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
(1) (2)
Number of Record
TITLE OF CLASS HOLDERS AS OF JUNE 25, 1997
-------------- ---------------------------
<S> <C> <C>
Seligman Henderson Global Class A Common Stock (Par Value $.001) 6,926
Growth Opportunities Fund Class B Common Stock (Par Value $.001) 901
Class D Common Stock (Par Value $.001) 2,900
Seligman Henderson Global Class A Common Stock (Par Value $.001) 30,172
Smaller Companies Fund Class B Common Stock (Par Value $.001) 14,454
Class D Common Stock (Par Value $.001) 17,435
Seligman Henderson Global Class A Common Stock (Par Value $.001) 51,347
Technology Fund Class B Common Stock (Par Value $.001) 2,884
Class D Common Stock (Par Value $.001) 16,754
Seligman Henderson Class A Common Stock (Par Value $.001) 0
International Value Fund Class B Common Stock (Par Value $.001) 0
Class D Common Stock (Par Value $.001) 0
</TABLE>
ITEM 27. INDEMNIFICATION -
Reference is made to the provisions of Articles Twelfth and
Thirteenth of Registrant's Amended and Restated Articles of
Incorporation filed as Exhibit 24(b)(1) and Article VII of
Registrant's Amended and Restated By-laws filed as Exhibit 24(b)(2)
to this Post-Effective Amendment No. 23 to the Registration
Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised by the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER - The
Manager also serves as investment manager to seventeen other
associated investment companies. They are Seligman Capital Fund,
Inc., Seligman Cash Management Fund, Inc., Seligman Common Stock
Fund, Inc., Seligman Communications and Information Fund, Inc.,
Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
High Income Fund Series, Seligman Income Fund, Inc., Seligman
Municipal Fund Series, Inc., Seligman Municipal Series Trust,
Seligman New Jersey Municipal Fund, Inc., Seligman Pennsylvania
Municipal Fund Series, Seligman Portfolios, Inc., Seligman Quality
Municipal Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman
Value Fund Series, Inc. and Tri-Continental Corporation.
The Subadviser also serves as subadviser to nine other associated
investment companies. They are Seligman Capital Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information
Fund, Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc.,
Seligman Income Fund, Inc., the International Portfolio, the Global
Smaller Companies Portfolio, the Global Technology Portfolio and the
Global Growth Opportunities Portfolio of Seligman Portfolios, Inc.,
Seligman Value Fund Series, Inc. and Tri-Continental Corporation.
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
The Manager and Subadviser each have an investment advisory service
division which provides investment management or advice to private
clients. The list required by this Item 28 of officers and directors
of the Manager and the Subadviser, respectively, together with
information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by the Manager and the
Subadviser, respectively, pursuant to the Investment Advisers Act of
1940 (SEC File No. 801-15798 and SEC File No. 801-40670, on June 3,
1997).
ITEM 29. PRINCIPAL UNDERWRITERS
(a) The names of each investment company (other than the Registrant)
for which Registrant's principal underwriter currently
distributing securities of the Registrant also acts as a
principal underwriter, depositor or investment adviser follow:
Seligman Capital Fund, Inc., Seligman Cash Management Fund,
Inc., Seligman Common Stock Fund, Inc., Seligman Communications
and Information Fund, Inc., Seligman Frontier Fund, Inc.,
Seligman Growth Fund, Inc., Seligman High Income Fund Series,
Seligman Income Fund, Inc., Seligman Municipal Fund Series,
Inc., Seligman Municipal Series Trust, Seligman New Jersey
Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund
Series and Seligman Portfolios, Inc. and Seligman Value Fund
Series, Inc.
(b) Name of each director, officer or partner of Registrant's
principal underwriter named in response to Item 21:
SELIGMAN FINANCIAL SERVICES, INC.
AS OF JUNE 19, 1997
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C>
WILLIAM C. MORRIS* Director Chairman of the Board
and Chief Executive
Officer
BRIAN T. ZINO* Director Director and President
RONALD T. SCHROEDER* Director Director
FRED E. BROWN* Director Director
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
DAVID F. STEIN* Director None
STEPHEN J. HODGDON* President None
CHARLES W. KADLEC* Chief Investment Strategist None
LAWRENCE P. VOGEL* Senior Vice President, Finance Vice President
ED LYNCH* Senior Vice President, Director None
of Marketing
MARK R. GORDON* Senior Vice President, National None
Sales Manager
GERALD I. CETRULO, III Senior Vice President of Sales None
140 West Parkway
Pompton Plains, NJ 07444
BRADLEY W. LARSON Senior Vice President of Sales None
367 Bryan Drive
Danville, CA 94526
D. IAN VALENTINE Senior Vice President of Sales None
307 Braehead Drive
Fredericksburg, VA 22401
HELEN SIMON* Vice President, Sales None
Administration Manager
KAREN J. BULLOT* Vice President, Retirement Plans None
MICHELLE L. MCCANN* Vice President, Product Management None
MICHAEL R. SANDERS* Vice President, Product Manager None
Managed Money Services
</TABLE>
<PAGE>
PART C. OTHER INFORMATION (continued)
SELIGMAN FINANCIAL SERVICES, INC.
AS OF JUNE 19, 1997
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C>
MARSHA E. JACOBY* Vice President, National Accounts None
Manager
WILLIAM W. JOHNSON* Vice President, Order Desk None
JAMES R. BESHER Regional Vice President None
14000 Margaux Lane
Town & Country, MO 63017
RICHARD B. CALLAGHAN Regional Vice President None
7821 Dakota Lane
Orland Park. IL 60462
BRADFORD C. DAVIS Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
CHRISTOPHER J. DERRY Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
ANDREW DRALUCK Regional Vice President None
4032 E. Williams Drive
Phoenix, AZ 85024
JONATHAN G. EVANS Regional Vice President None
222 Fairmont Way
Ft. Lauderdale, FL 33326
MICHAEL C. FORGEA Regional Vice President None
32 W. Anapamu Street #186
Santa Barbara, CA 93101
ALEXANDER FORSTER Regional Vice President None
10740 NW 1st Street
Plantation, FL 33324
DAVID GARDNER Regional Vice President None
2403 Cayenne Drive
McKinney, TX 75070
CARLA A. GOEHRING Regional Vice President None
11426 Long Pine
Houston, TX 77077
MARK LIEN Regional Vice President None
5570 Beechwood Terrace
West Des Moines, IA 50266-6620
JUDITH L. LYON Regional Vice President None
163 Haynes Bridge Road, Ste 205
Alpharetta, CA 30201
DAVID L. MEYNCKE Regional Vice President None
4957 Cross Pointe Drive
Oldsmar, FL 34677-5212
TIMOTHY O'CONNELL Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
THOMAS PARNELL Regional Vice President None
5250 Greystone Drive #107
Inver Grove Heights, MN 55077
JULIANA PERKINS Regional Vice President None
2348 Adrian Street
Newbury Park, CA 91320
</TABLE>
<PAGE>
PART C. OTHER INFORMATION (continued)
SELIGMAN FINANCIAL SERVICES, INC.
AS OF JUNE 19, 1997
<TABLE>
<CAPTION>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C>
DAVID PETZKE Regional Vice President None
2714 Winding Trail Place
Boulder, CO 80303
ROBERT H. RUHM Regional Vice President None
44 Conrad Road
Melrose, MA 02176
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
BRUCE M. TUCKEY Regional Vice President None
41644 Chathman Drive
Novi, MI 48375
ANDREW S. VEASEY Regional Vice President None
14 Woodside Drive
Rumson, NJ 07760
KELLI A. WIRTH-DUMSER Regional Vice President None
7121 Jardiniere Court
Charlotte, NC 28226
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
GAIL S. CUSHING* Assistant Vice President, National None
Accounts Manager
JEFFREY S. DEAN* Assistant Vice President, None
Annuity Product Manager
SANDRA FLORIS* Assistant Vice President, Order Desk None
KEITH LANDRY* Assistant Vice President, Order Desk None
FRANK P. MARINO* Assistant Vice President, Mutual
Fund Product Manager None
JOSEPH M. MCGILL* Assistant Vice President and None
Compliance Officer
JOYCE PERESS* Assistant Secretary None
</TABLE>
* The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, NY 10017.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
(1) Morgan Stanley Trust Company
1 Pierrepont Plaza
Brooklyn New York 11201;
(2) Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105; and
(3) Seligman Data Corp.
100 Park Avenue
New York, NY 10017
<PAGE>
PART C. OTHER INFORMATION (continued)
ITEM 31. MANAGEMENT SERVICES - Seligman Data Corp., the Registrant's
shareholder service agent, has an agreement with First Data
Investor Services Group ("FDISG") pursuant to which FDISG
provides a data processing system for certain shareholder
accounting and recordkeeping functions performed by Seligman
Data Corp. For the fiscal periods ended October 31, 1996, 1995
and 1994, the approximate cost of these services was:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Seligman Henderson International Fund $27,000 $ 17,800 $ 6,738
Seligman Henderson Emerging Markets Growth Fund* 6,600 -- --
Seligman Henderson Global Growth Opportunities Fund 38,700 6,000 --
Seligman Henderson Global Smaller Companies Fund 140,600 37,800 12,389
Seligman Henderson Global Technology Fund** 346,700 108,100 476
</TABLE>
* For the period May 28, 1996 (commencement of operations) to
October 31, 1996.
** For the period May 23, 1994 (commencement of operations) to
October 31, 1994.
ITEM 32. UNDERTAKINGS - The Registrant undertakes (1) to file a
post-effective amendment, using financial statements which
need not be certified within four to six months from the
effective date of its Registration Statement under the
Securities Act of 1933 and (2) if requested to do so by the
holders of at least ten percent of its outstanding shares, to
call a meeting of shareholders for the purpose of voting upon
the removal of a director or directors and to assist in
communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 24 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 27th day of June, 1997.
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
By: /S/ WILLIAM C. MORRIS
---------------------
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Post-Effective Amendment No. 24 to its
Registration Statement has been signed below by the following persons in the
capacities indicated on June 27, 1997.
SIGNATURE TITLE
--------- -----
/S/ WILLIAM C. MORRIS Chairman of the Board (Principal
- ------------------------- executive officer) and Director
William C. Morris*
/S/ BRIAN T. ZINO President and Director
- -------------------------
Brian T. Zino
/S/ THOMAS G. ROSE Treasurer (Principal financial and
- ------------------------- and accounting officer)
Thomas G. Rose
Alice S. Ilchman, Director )
John E. Merow, Director ) /S/ BRIAN T. ZINO
-----------------
Betsy S. Michel, Director ) Brian T. Zino, Attorney-in-fact*
James C. Pitney, Director )
James Q. Riordan, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
