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SELIGMAN
[GRAPHIC]
SELIGMAN HENDERSON
GLOBAL FUND SERIES, INC.
INTERNATIONAL FUND
EMERGING MARKETS GROWTH FUND
GLOBAL GROWTH OPPORTUNITIES FUND
GLOBAL SMALLER COMPANIES FUND
GLOBAL TECHNOLOGY FUND
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INVESTING AROUND THE WORLD FOR CAPITAL APPRECIATION
OCTOBER 31, 1997 o ANNUAL REPORT
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OVER THE LONG TERM -- J. & W. SELIGMAN & CO. INCORPORATED
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TIME IS THE TEST -------------
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. [GRAPHIC]
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 Seligman
plc of London. Together, the two firms have more than 200 Established
years of investment experience, and manage more than $45 1864
billion in combined assets.
Seligman offers more than 50 investment options, -------------
including Tri-Continental Corporation, which was established
in 1929. Henderson manages more than 60 investment options,
including four portfolios that were launched before 1900.
GLOBAL INVESTMENT CAPABILITIES [GRAPHIC]
Seligman and Henderson combined employ more than 100
investment professionals, organized into specialized
investment teams. Seligman Henderson believes its team
approach to managing global investments ensures a free -------------
exchange of ideas and information among its investment Henderson
professionals, with unique insight into each of the world's Investing
geographic regions. Seligman Henderson is headquartered in Since 1872
New York, and Henderson has additional offices in London,
Singapore, and Tokyo.
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TABLE OF CONTENTS
To the Shareholders ....................................................... 1
Market and Economic Overview .............................................. 2
SELIGMAN HENDERSON INTERNATIONAL FUND:
Investment Report ..................................................... 3
Performance and Portfolio Overview .................................... 5
Portfolio of Investments .............................................. 8
SELIGMAN HENDERSON EMERGING MARKETS
GROWTH FUND:
Investment Report ..................................................... 13
Performance and Portfolio Overview .................................... 15
Portfolio of Investments .............................................. 18
SELIGMAN HENDERSON GLOBAL GROWTH
OPPORTUNITIES FUND:
Investment Report ..................................................... 22
Performance and Portfolio Overview .................................... 24
Portfolio of Investments .............................................. 27
SELIGMAN HENDERSON GLOBAL SMALLER
COMPANIES FUND:
Investment Report ..................................................... 32
Performance and Portfolio Overview .................................... 34
Portfolio of Investments .............................................. 37
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND:
Investment Report ..................................................... 49
Performance and Portfolio Overview .................................... 51
Portfolio of Investments .............................................. 54
Statements of Assets and Liabilities ...................................... 60
Statements of Operations .................................................. 61
Statements of Changes in Net Assets ....................................... 62
Notes to Financial Statements ............................................. 64
Financial Highlights ...................................................... 70
Report of Independent Auditors ............................................ 76
Board of Directors ........................................................ 77
Executive Officers and For More Information ............................... 78
Glossary of Financial Terms ............................................... 79
Benchmarks ................................................................ 80
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TO THE SHAREHOLDERS
We are pleased to provide you with the 1997 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 had varied investment results for the fiscal year ended October
31, 1997, reflecting the differences in each Fund's investment objective and
regional weightings. Fund-specific information, including investment reports
from the Portfolio Managers, begins on page 3.
The last 12 months have been challenging. Through October 31, 1997, market
performance was differentiated according to geographic region. Overall, while
the fundamental economic and financial background remained generally supportive
in the Western Hemisphere, the Pacific markets experienced increasing
difficulties. Steady growth continued in the US and the UK, and the core
Continental European economies showed stronger signs of economic recovery.
On the other hand, Japan continued to experience both economic stagnation
and a weakened equity market, despite a historically low interest rate
environment. A wave of currency devaluations swept through the Southeast Asian
nations, causing sharp corrections in the regional equity markets. While Latin
American markets remained unscathed for a period, the spillover of the
corrections had begun to affect these markets toward the end of the Funds'
fiscal year. A more detailed discussion of economic and market conditions in the
last 12 months appears on page 2.
Even though the recent volatility in the global equity markets has been
disconcerting, we remain positive on the long-term prospects. The US and the
European stock markets were able to endure a correction and recover in a timely
fashion because of supportive underlying fundamentals. In contrast, the dangers
of excessive growth -- such as what occurred in Southeast Asia -- have become
more clear. Nonetheless, the recent events in Southeast Asia may, over time,
help these governments lay more robust foundations for continued prosperity
based on solid financial, monetary, and fiscal practices.
Investments in the international markets still play an important part in a
long-term investment strategy and in a diversified portfolio. We do not expect
the current turmoil to reduce the long-term importance of emerging markets, nor
the contributions these nations are projected to make to the global economy in
the next century. We also believe that Seligman Henderson Global Fund Series is
well positioned to benefit from the future growth of the global equity markets.
This Shareholder Report has been redesigned in conjunction with a corporate
effort to enhance the overall clarity and quality of all communications to our
Shareholders. We hope you find the additional information contained herein
helpful.
Thank you for your continued support of Seligman Henderson Global Fund
Series. We look forward to serving your global investment needs for many years
to come.
By order of the Board of Directors,
/s/ William C. Morris
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William C. Morris
Chairman
/s/ Brian T. Zino
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Brian T. Zino
President
December 5, 1997
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1
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MARKET AND ECONOMIC OVERVIEW
OVERVIEW
The past 12 months brought exceptionally divergent performances among
regional economies and markets. Generally speaking, economies and stock markets
in the Americas and Europe performed well. In contrast, economies and stock
markets performed poorly in Japan and the broader Pacific region.
UNITED STATES
In the United States, the generally benign backdrop of steady economic
growth and low inflation continued. Declining bond yields, combined with
satisfactory corporate profit growth, allowed the stock market to continue
pushing ahead despite a correction in October. The US dollar was generally
strong, rising markedly against most major European currencies and the Japanese
yen.
UNITED KINGDOM
The United Kingdom's economy continued to grow rapidly. Growth was strong
enough to prompt four short-term interest rate increases in attempts to slow the
pace of economic expansion. Inflation remained reasonably low, although it was
not as subdued as in the US. This background led to a strong sterling, which had
some damaging effects on corporate profitability but generally helped improve
returns in US dollar terms.
CONTINENTAL EUROPE
In Continental Europe, there were growing signs of recovery in the core
economies such as France and Germany. The recovery was led by strong exports,
due to the significant weakness of Continental European currencies against the
US dollar. The domestic corporate consumer, however, has been a bit slower to
recover confidence. European businesses, particularly in Germany, have made
major efforts to restructure, as evidenced by strongly positive corporate profit
figures.
Progress towards the European Monetary Union (EMU) continued at a rapid
pace, and it now looks likely to begin, as scheduled, in January 1999 with 11
countries participating. The major beneficiaries of EMU have been Italy and
Spain, which have both seen sharp declines in bond market yields. There have
also been some impressive returns in local currency terms, although these were
somewhat dissipated when converted to the US dollar. The best performing markets
were in Spain and Italy, but Switzerland and the Netherlands also provided solid
returns. The French market lagged other Continental European markets, due to
concerns regarding new political and economic reforms.
JAPAN
The Japanese economy, which looked as though it might be recovering in the
early part of 1997, faltered following the rise in consumption taxes in April.
Economic growth is now virtually non-existent. The authorities have had
difficulties trying to alleviate this problem. The Japanese budget deficit rose
rapidly, and there was political pressure to keep the yen from devaluing too
quickly. Corporate profits, however, continued to do reasonably well, as the
export sector was supported by the weakness of the yen. The banking sector
continued to be hard hit and recently suffered from the problems spilling over
from Southeast Asia. While the stock market rallied in the early part of 1997,
it fell sharply in the third calendar quarter and remains depressed.
PACIFIC REGION
In the Pacific region, the problems that started in Thailand in the early
part of 1997 gradually spread. Currencies devalued rapidly in Indonesia,
Malaysia, and the Philippines, and more recently, similar problems have spread
to the North with mounting fears in Hong Kong and South Korea. These problems
resulted from a legacy of accelerated growth and rising current account
deficits. Thus far, the reaction of authorities has been ineffective and
difficulties seem likely to persist in the region. In US dollar terms, the
region's stock markets collapsed, with many markets trading 50% below their peak
levels.
EMERGING MARKETS
It has been a much better period for emerging markets outside the Pacific
region, as stock markets in Latin America and emerging Europe generally
performed well. However, there have been fears recently that the problems seen
in the Pacific region could spread to some of these countries. However, the
economic backgrounds are generally fundamentally stronger than those in the
Pacific region, and we believe these markets should not be as negatively
impacted.
SUMMARY
In Western markets, economic growth is likely to remain satisfactory and
inflation will probably remain low. However, the problems of the Pacific region,
if allowed to spread, could have more serious consequences for Western markets
than has been the case thus far. The major risk is that continued competitive
devaluations could negatively impact Japan. Many Southeast Asian countries are
seeking to export their way out of trouble, and Western exports could suffer in
comparison. There may already be deflation in the traded goods sector in
Southeast Asia, and there are some risks that this could spread to the West.
For now, we do not expect the situation to worsen, but it needs to be
carefully monitored. The volatility seen in the global stock markets recently
could well continue in the short term. While market volatility could provide
attractive buying opportunities from time to time, investors should remain
cautious until the problems of the Pacific region and Japan can be more fully
assessed and properly addressed.
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2
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INVESTMENT REPORT
SELIGMAN HENDERSON INTERNATIONAL FUND
PERFORMANCE REVIEW
For the 12 months ended October 31, 1997, Seligman Henderson International Fund
posted a total return of 9.83% based on the net asset value of Class A shares,
versus the 10.28% total return of its peers, as measured by the Lipper
International Funds Average, and the 4.92% total return of stocks in the
international markets, as represented by the Morgan Stanley Capital
International EAFE (Europe, Australasia, Far East) Index (MSCI EAFE Index).
Throughout the fiscal year, there was a fair amount of volatility and divergence
in performance across regional markets. Continental Europe enjoyed a
continuation of a strong bull market, with stocks rising nearly 26%. In
contrast, certain markets in the Pacific region declined more than 20%.
PORTFOLIO STRATEGY
UNITED KINGDOM
o In the United Kingdom, the market was boosted by a stronger sterling, rising
28.6% for the 12 months ended October 31, 1997. Economic growth has been
running at an annualized rate of 3.5% to 4.0%, well above trend, and booming
consumer and service sectors have more than compensated for a struggling
manufacturing sector.
DURING THE FISCAL YEAR, WE INCREASED OUR WEIGHTING IN THE UK TO 21.7% FROM
16.4% 12 MONTHS AGO, AS WE BELIEVED ITS MARKET LOOKED MORE REASONABLY VALUED
THAN MANY OTHERS IN THE WORLD. OUR STRATEGY HAS BEEN TO FAVOR
DOMESTIC-ORIENTED STOCKS, SUCH AS Railtrack Group, THE MONOPOLY PROVIDER OF
RAIL SERVICES.
CONTINENTAL EUROPE
o In Continental Europe, rising economic growth and low inflation have created
a favorable backdrop for equity markets. Italy, Spain, and Switzerland
posted the greatest gains, each rising more than 30% for the 12 months ended
October 31, 1997. Continental Europe is in an early stage of an economic
cycle and could see several more years of economic growth and rising
corporate profits. We believe that the growing popularity of equity
investing in Continental Europe will also continue to fuel strong cash flows
into the markets.
THE FUND'S WEIGHTING IN CONTINENTAL EUROPE, EXCLUDING THE EMERGING EUROPEAN
MARKETS, WAS INCREASED TO 45.2%, FROM 38.0% 12 MONTHS AGO, AS WE BELIEVE
THERE IS STILL GOOD LONG-TERM POTENTIAL. WE SEE THE GREATEST PROSPECTS FOR
FUTURE EARNINGS GROWTH IN CYCLICAL COMPANIES AND CORPORATE RESTRUCTURING
STORIES, SUCH AS Thyssen IN GERMANY, A MANUFACTURER OF STEEL PRODUCTS.
JAPAN
o For the 12 months ended October 31, 1997, the Japanese equity market fell
18.7%. The Japanese economy, which had looked as though it might be
recovering at the beginning of the calendar year, has been struggling from
the effects of the consumption tax hike. In addition, while corporate
profits have held up thus far, the anticipated fall in Japanese exports to
the Pacific region does not bode well.
DUE TO THE POOR ECONOMIC AND FINANCIAL BACKGROUND, THE FUND'S WEIGHTING IN
JAPAN WAS REDUCED TO 15.6% FROM 23.3%
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[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) JAMES ROBINSON, BEN ELWES, IAIN C. CLARK
(PORTFOLIO MANAGER), DAVID THORNTON, PETER BASSETT, (SEATED) STACEY NAVIN,
KIRSTEEN MORRISON
FUND OBJECTIVE
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 US.
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3
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INVESTMENT REPORT
SELIGMAN HENDERSON INTERNATIONAL FUND
12 MONTHS AGO. WE EXPECT THE MARKET TO REMAIN IN ITS CURRENT TRADING RANGE
UNTIL ECONOMIC RECOVERY BECOMES MORE CERTAIN. ADDITIONAL FUND ASSETS WILL
NOT BE COMMITTED TO JAPAN UNTIL THE ECONOMIC ENVIRONMENT IMPROVES MARKEDLY.
PACIFIC REGION
o Southeast Asian markets have been battered by currency crises. The Thai baht
was the first currency to experience a devaluation, which then spread
throughout the Pacific region, provoking an upset in the global equity
markets. Malaysia, Thailand, and the Philippines were hardest hit, each
falling more than 50%.
GIVEN THE ECONOMIC RISKS, WE SUBSTANTIALLY REDUCED THE FUND'S WEIGHTING IN
THE REGION TO 2.2%, DOWN FROM 15.2% 12 MONTHS AGO. IT MAY TAKE SOME TIME FOR
GOVERNMENTS TO IMPLEMENT POLICIES THAT WILL RESTORE CONFIDENCE IN THESE
MARKETS AND ECONOMIES. UNTIL SUCH TIME, WE WILL AVOID ADDITIONAL INVESTMENTS
IN THIS REGION.
EMERGING MARKETS
o As for the emerging markets, stock markets generally performed very well.
Emerging European markets demonstrated the greatest gains, led by Russia,
which finished up 139.1% for the 12-month period ended October 31, 1997.
Latin America also posted strong results and, until the global weakness in
October, contained some of the best-performing markets.
WE INCREASED THE FUND'S WEIGHTING IN THE EMERGING MARKETS TO 11.8% FROM 5.4%
AT OCTOBER 31, 1996, AS WE DO NOT EXPECT THE PROBLEMS OF THE PACIFIC REGION
TO SPREAD TO THESE COUNTRIES BECAUSE THEIR ECONOMIC CLIMATES ARE HEALTHIER.
SUMMARY
Looking forward, the near-term outlook for equity markets remains mixed. The
turmoil in the Pacific region has heightened investors' awareness of the high
valuation levels found in many regions. Furthermore, if the problems seen in the
Pacific region were to spread, this could potentially hinder Continental
Europe's economic recovery and reduce corporate profitability elsewhere in the
world. However, we believe that the problems seen in the Pacific region will be
contained and that the global economy should continue its expansion, with an
eventual recovery in the Pacific region and Japan.
Note: All figures are in US dollar terms. All specific market performance
information included in the Investment Report is taken from the MSCI country
index for the 12-month period ended October 31, 1997, unless otherwise stated.
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4
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PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON INTERNATIONAL FUND
COUNTRY ALLOCATION
AT OCTOBER 31, 1997
MSCI EAFE
FUND INDEX
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CONTINENTAL EUROPE .............................. 48.99% 42.43%
Austria ..................................... -- 0.42
Belgium ..................................... 1.32 1.24
Croatia ..................................... 0.34 --
Czech Republic .............................. 0.38 --
Denmark ..................................... 0.66 1.05
Finland ..................................... -- 0.84
France ...................................... 11.28 7.11
Germany ..................................... 9.53 9.21
Hungary ..................................... 1.33 --
Italy ....................................... 3.77 3.65
Ireland ..................................... -- 0.39
Netherlands ................................. 5.42 5.56
Norway ...................................... -- 0.58
Portugal .................................... 1.70 --
Spain ....................................... 4.33 2.48
Sweden ...................................... 3.43 2.64
Switzerland ................................. 5.50 7.26
JAPAN ........................................... 15.58 28.70
LATIN AMERICA ................................... 4.73 --
Argentina ................................... 0.03 --
Brazil ...................................... 2.85 --
Mexico ...................................... 1.85 --
PACIFIC ......................................... 2.15 7.74
Australia ................................... 1.19 2.59
Hong Kong ................................... 0.72 2.84
Malaysia .................................... -- 1.06
New Zealand ................................. -- 0.34
Singapore ................................... -- 0.91
Taiwan ...................................... 0.24 --
UNITED KINGDOM .................................. 21.74 21.13
OTHER ........................................... 3.31 --
India ....................................... 1.66 --
Russia ...................................... 1.65 --
OTHER ASSETS LESS LIABILITIES ................... 3.50 --
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TOTAL ........................................... 100.00% 100.00%
REGIONAL ALLOCATION
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Continental Europe .................... 48.99%
United Kingdom ........................ 21.74%
Japan ................................. 15.58%
Latin America ......................... 4.73%
Pacific ............................... 2.15%
Other ................................. 3.31%
Other Assets Less Liabilities ......... 3.50%
LARGEST INDUSTRIES
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Telecommunications .................... 9.0% $8,380,122
Resources ............................. 8.8% $8,218,804
Banking ............................... 7.5% $7,004,955
Retailing ............................. 6.6% $6,137,463
Industrial Goods and Services ......... 6.5% $6,113,981
LARGEST PORTFOLIO HOLDINGS
AT OCTOBER 31, 1997
SECURITY VALUE
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Tesco (UK) ............................... $1,841,617
WPP Group (UK) ........................... 1,717,529
Telecom Italia (Italy) ................... 1,636,141
Railtrack Group (UK) ..................... 1,619,131
B.A.T. Industries (UK) ................... 1,578,777
Tatneft (ADRs)(Russia) ................... 1,542,440
Granada Group (UK) ....................... 1,524,995
L.M. Ericsson Telefon (Series B)
(Sweden) ............................. 1,502,498
ELF Aquitaine (France) ................... 1,497,716
British Petroleum (UK) ................... 1,468,532
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5
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PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON INTERNATIONAL FUND
INVESTMENT RESULTS PER SHARE
<TABLE>
<CAPTION>
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1997
AVERAGE ANNUAL
-----------------------------------------------------------------------------------
CLASS A CLASS B CLASS D
SINCE SINCE SINCE
SIX ONE FIVE INCEPTION INCEPTION INCEPTION
MONTHS* YEAR YEARS 4/7/92 4/22/96 9/21/93
---------- ---------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge ....... (1.21)% 4.59% 11.25% 9.86% n/a n/a
Without Sales Charge .... 3.70 9.83 12.34 10.82 n/a n/a
CLASS B**
With CDSL+ .............. (1.72) 3.90 n/a n/a 0.60% n/a
Without CDSL ............ 3.28 8.90 n/a n/a 3.18 n/a
CLASS D**
With 1% CDSL ............ 2.28 7.90 n/a n/a n/a n/a
Without CDSL ............ 3.28 8.90 n/a n/a n/a 7.52%
LIPPER INTERNATIONAL
FUNDS AVERAGE*** ........ 3.79 10.28 12.10 10.09++ 6.20+++ 8.65#
MSCI EAFE INDEX*** ...... 3.15 4.92 12.07 10.42++ 1.68+++ 7.07#
NET ASSET VALUE
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1997 APRIL 30, 1997 OCTOBER 31, 1996
------------------- -------------- -------------------
<S> <C> <C> <C>
CLASS A ................. $17.92 $17.28 $17.17
CLASS B ................. 17.30 16.75 16.74
CLASS D ................. 17.30 16.75 16.74
</TABLE>
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1997
PAID .................... $0.885
REALIZED ................ 1.246##
UNREALIZED .............. 1.784###
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.
- ----------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume the investment of
dividends and capital gain distributions. Returns for Class A shares are
calculated with and without the effect of the initial 4.75% maximum sales
charge. Returns for Class A shares also reflect the effect of the service
fee of up to 0.25% under the Administration, Shareholder Services and
Distribution Plan after September 21, 1993, only. Returns of Class B
shares are calculated with and without the effect of the maximum 5%
contingent deferred sales load ("CDSL"), charged on 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 on redemptions made within one
year of the date of purchase.
*** The Lipper International Funds Average and the Morgan Stanley Capital
International EAFE (Europe, Australasia, Far East) Index (MSCI EAFE Index)
are unmanaged benchmarks that assume reinvestment of dividends. The Lipper
International Funds Average excludes the effect of sales charges and the
MSCI EAFE Index excludes the effect of fees and sales charges. The monthly
performance of the Lipper International Funds Average is used in the
Performance and Portfolio Overview. Investors cannot invest directly in an
average or an index.
+ The CDSL is 5% for periods of one year or less, and 4% since inception.
++ From March 31, 1992.
+++ From April 30, 1996.
# From September 30, 1993.
## On November 21, 1997, a capital gain of $1.222 per share was paid to
shareholders.
### Represents the per share amount of net unrealized appreciation of
portfolio securities as of October 31, 1997.
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6
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PERFORMANCE AND PORTFOLIO OVERVIEW October 31, 1997
SELIGMAN HENDERSON INTERNATIONAL FUND
This chart compares a $10,000 hypothetical investment made in Seligman
Henderson International Fund Class A shares, with and without the initial 4.75%
maximum sales charge, since the commencement of investment operations on April
7, 1992, through October 31, 1997, to a $10,000 hypothetical investment made in
the Lipper International Funds Average and the Morgan Stanley Capital
International EAFE (Europe, Australasia, Far East) Index (MSCIEAFE Index) for
the same period. It is important to keep in mind that the Index excludes the
effect of fees or sales charges, and the Average excludes the effect of sales
charges.
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
International Fund Class A
Lipper
With Without MSCI International
Sales Sales EAFE Fund
Charge Charge Index Average
--------- -------- -------- --------------
4/7/92 9,524 10,000 10,000 10,000
9,635 10,117 10,050 10,245
9,444 9,917 9,962 10,094
10/31/92 9,437 9,908 9,843 9,666
9,662 10,145 9,995 9,879
11,270 11,833 12,267 11,209
11,445 12,017 12,771 11,560
10/31/93 12,718 13,354 13,572 12,716
14,012 14,712 14,412 14,159
13,646 14,329 14,346 13,560
13,971 14,670 14,613 13,744
10/31/94 14,353 15,071 14,981 14,060
12,724 13,361 13,809 12,589
13,530 14,207 15,190 13,438
14,438 15,160 15,676 14,277
10/31/95 14,175 14,884 14,970 13,929
15,146 15,903 16,085 14,830
15,916 16,712 16,973 15,631
15,173 15,932 16,277 15,119
10/31/96 15,370 16,138 16,587 15,516
15,845 16,637 16,441 16,188
16,278 17,092 16,872 16,486
18,605 19,535 19,280 18,790
10/31/97 16,881 17,725 17,403 17,111
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.
As shown on page 6, the performances of Class B and D shares will be greater
than or less than the performance shown for Class A shares, based on the
differences in sales charges and fees paid by shareholders. Past performance is
not indicative of future investment results.
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1997
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/97
- ------------ ----------- ---------
Astra (Sweden) ................................. 54,322 54,322
Banque Nationale de Paris
(France) ................................... 23,800 23,800
Bayerische Vereinsbank
(Germany) .................................. 19,124 19,124
Bunzl (UK) ..................................... 295,000 295,000
Companhia Energetica de Minas
Gerais "CEMIG" (ADRs)
(Brazil) ................................... 20,700 20,700
Endesa (Spain) ................................. 71,784 71,784
Lafarge (France) ............................... 13,528 13,528
Railtrack Group (UK) ........................... 102,101 102,101
Reuters Holdings (UK) .......................... 90,000 90,000
Sumitomo Bank (Japan) .......................... 59,000 59,000
SHARES
--------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/97
- -------------- ----------- ---------
ABB (Switzerland) .............................. 888 --
Empresas ICA Sociedad
Controladora (Mexico) ...................... 47,000 --
Iberdrola (Spain) .............................. 92,528 --
Koninklijke Ahold (Netherlands) ................ 17,354 --
Michelin (France) .............................. 19,942 --
Nippon Telegraph &Telephone
(Japan) .................................... 231 --
Pioneer Electronic (Japan) ..................... 72,000 36,000
Telefonica del Peru (ADRs)
(Peru) ..................................... 43,500 --
Toshiba (Japan) ................................ 201,000 154,000
VEBA(Germany) .................................. 19,219 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
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PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON INTERNATIONAL FUND
SHARES VALUE
--------- --------
COMMON STOCKS 96.50%
ARGENTINA 0.03%
SIDERCA (CLASS A)
Manufacturer and producer
of steel (Metals) ........................... 11,274 $ 27,637
-----------
AUSTRALIA 1.19%
AUSTRALIAN GAS LIGHT
Natural oil and gas distributor
and transporter (Resources) ................. 25,000 166,642
BRAMBLES INDUSTRIES
Operator of diversified
transportation and commercial
services (Industrial Goods
and Services) ............................... 5,400 103,589
BROKEN HILL PROPRIETARY
Resource company with interests
in steel, oil, and minerals
(Resources) ................................. 13,305 131,630
ICI AUSTRALIA
Diversified manufacturer of
products such as paints,
explosives, and pharmaceuticals
(Manufacturing) ............................. 20,900 156,910
LEND LEASE
Construction company
(Construction and Property) ................. 7,400 151,197
SANTOS
Independent producer and
explorer of oil and natural gas
(Resources) ................................. 10,600 48,641
WESTPAC BANKING
Provider of banking
services (Banking) .......................... 34,400 199,852
WOODSIDE PETROLEUM
Oil and gas explorer and
producer (Resources) ........................ 18,000 151,683
-----------
1,110,144
-----------
BELGIUM 1.32%
CREDIT COMMUNAL HOLDING/DEXIA*
Special-purpose banking
(Financial Services) ........................ 11,302 1,230,132
-----------
BRAZIL 2.85%
COMPANHIA ENERGETICA DE MINAS
GERAIS "CEMIG" (ADRS)
Provider of electrical utility
services (Utilities) ........................ 20,700 807,300
PETROLEO BRASILEIRO "PETROBRAS"
Oil and gas producer and
distributor (Resources) ..................... 46,200 917,754
TELECOMUNICACOES BRASILEIRAS
"TELEBRAS" (ADRS)
Provider of telecommunications
services (Telecommunications) ............... 9,286 940,207
-----------
2,665,261
-----------
CROATIA 0.34%
PLIVA (GDRS)*
Manufacturer of pharmaceutical
products (Health and Household) ............. 22,000 320,100
-----------
CZECH REPUBLIC 0.38%
SPT TELECOM
Provider of telecommunications
services (Telecommunications) ............... 3,100 355,988
-----------
DENMARK 0.66%
NOVO NORDISK (CLASS B)
Producer and supplier of
insulin and industrial enzymes
(Health and Household) ...................... 5,701 615,621
-----------
FRANCE 11.28%
ACCOR
Hotel operator and provider
of related services
(Leisure and Hotels) ........................ 6,780 1,258,191
AXA-UAP
Provider of insurance and
financial services (Insurance) .............. 19,642 1,340,589
BANQUE NATIONALE DE PARIS
Provider of commercial,
investment, and private
banking services (Banking) .................. 23,800 1,048,648
CARREFOUR SUPERMARCHE
Supermarket operator in
Europe, the Americas, and
Taiwan (Retailing) .......................... 1,736 902,878
CIE GENERALE DES EAUX
Water purification and
distribution; energy production
(Industrial Goods and Services) ............. 9,780 1,137,278
ELF AQUITAINE
Oil and gas exploration;
manufacturer of chemical
compounds (Resources) ....................... 12,140 1,497,716
FRANCE TELECOM*
Provider of telecommunications
services (Telecommunications) ............... 16,028 604,569
LAFARGE
Producer and seller of
building materials
(Construction and Property) ................. 13,528 842,425
- ---------
See footnotes on page 12.
- -----
8
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON INTERNATIONAL FUND
SHARES VALUE
--------- --------
FRANCE (CONTINUED)
SGS-THOMSON MICROELECTRONICS*
Manufacturer of semiconductor
integrated circuits (Electronics) ........... 12,726 $ 902,647
USINOR SACILOR
Producer of steel products
(Metals) .................................... 61,070 1,007,730
-----------
10,542,671
-----------
GERMANY 9.53%
ADIDAS
Manufacturer of sporting
goods (Retailing) ........................... 7,572 1,099,900
BAYER
Producer of specialty chemicals,
pharmaceuticals, and plastics
(Chemicals) ................................. 29,208 1,048,003
BAYERISCHE VEREINSBANK*
Provider of universal banking
services (Banking) .......................... 19,124 1,105,638
LUFTHANSA
Airline services worldwide;
operator of Penta hotels
(Transportation) ............................ 63,416 1,112,014
MANNESMANN
Plant and machinery construction;
automotive technology
(Industrial Goods and Services) ............. 3,352 1,416,106
METRO
Department store
operator (Retailing) ........................ 713 31,360
SKW TROSTBERG
Conglomerate involved in
construction materials, chemicals,
and agrochemicals (Chemicals) ............... 27,023 930,506
THYSSEN
Manufacturer of steel
products (Metals) ........................... 5,536 1,222,248
VOLKSWAGEN
Manufacturer of economy
and luxury cars and trucks
(Automotive and Related) .................... 1,580 935,409
-----------
8,901,184
-----------
HONG KONG 0.72%
CHEUNG KONG
Real estate investment
and development
(Construction and Property) ................. 7,000 48,674
HANG SENG BANK
Provider of commercial
banking and related financial
services (Banking) .......................... 7,900 68,729
HUTCHISON WHAMPOA
Holding company with major
interests in finance and property
investment (Industrial Goods
and Services) ............................... 17,000 117,659
NEW WORLD DEVELOPMENT
Property investor and developer
(Construction and Property) ................. 14,000 49,263
NEW WORLD INFRASTRUCTURE*
Developer and operator
of infrastructure projects
(Construction and Property) ................. 50,000 98,965
SUN HUNG KAI PROPERTIES
Property developer
(Construction and Property) ................. 6,000 44,243
SWIRE PACIFIC
Conglomerate with major
interests in property
development and aviation
(Construction and Property) ................. 17,000 90,828
TELEVISION BROADCASTS
Television broadcasting,
program production, and licensing
(Media) ..................................... 34,000 94,567
WHARF HOLDINGS
Real estate investment manager
(Construction and Property) ................. 31,000 63,363
-----------
676,291
-----------
HUNGARY 1.33%
MOL MAGYAR OLAJ-ES GAZIPARI (GDRS)
Oil and gas producer and
distributor (Resources) ..................... 28,300 614,110
MOL MAGYAR OLAJ-ES
GAZIPARI (GDRS)+
Oil and gas producer and
distributor (Resources) ..................... 29,000 623,500
-----------
1,237,610
-----------
INDIA 1.66%
GUJURAT AMBUJA CEMENT (GDRS)
Cement producer
(Building Materials) ........................ 60,300 508,027
- ---------
See footnotes on page 12.
-----
9
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON INTERNATIONAL FUND
SHARES VALUE
--------- --------
INDIA (CONTINUED)
HINDALCO INDUSTRIES (GDRS)+
Producer of aluminum and
aluminum products (Metals) .................. 18,200 $ 525,980
VIDESH SANCHAR NIGAM (GDRS)+
Provider of international
communications services
(Telecommunications) ........................ 39,000 511,875
-----------
1,545,882
-----------
ITALY 3.77%
ENI
Refiner and marketer of oil
and gas (Resources) ......................... 188,211 1,056,156
ISTITUTO NAZIONALE DELLE ASSICURAZIONI
Provider of life and non-life
insurance products (Insurance) .............. 37,120 828,171
TELECOM ITALIA
Provider of telecommunications
services (Telecommunications) ............... 405,806 1,636,141
-----------
3,520,468
-----------
JAPAN 15.58%
AOYAMA TRADING
Retailer of clothing
(Retailing) ................................. 7,500 201,422
AUTOBACS SEVEN
Manufacturer and retailer of
automobile and truck parts
(Retailing) ................................. 10,000 521,327
BANK OF TOKYO MITSUBISHI
Provider of a broad range
of financial services
(Financial Services) ........................ 48,000 626,590
BENESSE
Provider of educational
services (Business Services) ................ 7,000 208,947
CSK
Information services company
(Business Services) ......................... 21,000 660,015
DAI NIPPON PRINTING
Provider of printing services for
commercial and industrial uses
(Industrial Goods and Services) ............. 25,000 498,877
DENNY'S
Restaurant operator (Restaurants) ........... 9,000 234,223
EAST JAPAN RAILWAY
Provider of railway services
(Transportation) ............................ 114 554,502
FUJITSU BUSINESS SYSTEMS
Electronic and communications
equipment dealer
(Business Services) ......................... 8,000 163,632
HOKKAI CAN
Manufacturer of cans for the
food industry (Manufacturing) ............... 46,000 139,603
ISHIKAWAJIMA-HARIMA
Manufacturer of industrial heavy
machinery and equipment
(Industrial Goods and Services) ............. 232,000 526,615
JAPAN AIRPORT TERMINAL
Provider of management and
maintenance services for Haneda
airport terminal (Transportation) ........... 22,000 215,848
JAPAN TOBACCO
Tobacco producer (Tobacco) .................. 63 517,012
KAO
Manufacturer of cosmetics
and personal care products
(Consumer Products) ......................... 36,000 502,869
MITSUBISHI MATERIALS
Non-ferrous smelter and
cement producer (Metals) .................... 263,000 743,494
MITSUI CHEMICALS
Producer of petrochemical
products (Chemicals) ........................ 254,400 812,252
MITSUI MARINE & FIRE
Provider of non-life insurance
(Insurance) ................................. 73,000 429,733
MITSUI O.S.K. LINES
Shipping company
(Transportation) ............................ 308,000 494,255
NITTO DENKO
Producer of industrial materials
(Industrial Goods and Services) ............. 27,000 487,154
NOMURA SECURITIES
Securities firm
(Financial Services) ........................ 58,000 675,148
PIONEER ELECTRONIC+
Manufacturer of audio
equipment, including
laser disks (Electronics) ................... 36,000 592,666
SECOM
Security services pioneer
(Retailing) ................................. 7,000 452,814
- ---------
See footnotes on page 12.
- -----
10
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON INTERNATIONAL FUND
SHARES VALUE
--------- --------
JAPAN (CONTINUED)
SUMITOMO BANK
Provider of commercial
banking services (Banking) .................. 59,000 $ 627,920
SUMITOMO METAL INDUSTRIES
Blast furnace and steel
producer (Metals) ........................... 349,000 699,335
SUMITOMO REALTY & DEVELOPMENT
Real estate developer
(Construction and Property) ................. 96,000 701,621
SUMITOMO TRUST AND BANKING
Trust bank with commercial
banking operations (Banking) ................ 48,000 365,977
TOHO
Producer and distributor of movies,
TV dramas, and videos (Media) ............... 2,000 262,742
TOSHIBA
Diversified manufacturer of
consumer and industrial
electronics (Electronics) ................... 154,000 697,847
TSUBAKI NAKASHIMA
Manufacturer of ball bearings
(Manufacturing) ............................. 36,000 246,944
YAMAHA
Manufacturer of musical
instruments and audio
equipment (Manufacturing) ................... 35,000 453,979
YORK-BENIMARU
Supermarket chain operator
(Retailing) ................................. 13,000 236,717
-----------
14,552,080
-----------
MEXICO 1.85%
DESC (ADRS)
Diversified product manufacturer;
financial services provider
(Manufacturing) ............................. 34,894 1,182,034
GRUPO IUSACELL (ADRS)*
Provider of wireless
telecommunications services
(Telecommunications) ........................ 30,400 547,200
-----------
1,729,234
-----------
NETHERLANDS 5.42%
AKZO NOBEL
Manufacturer of diversified
chemicals (Chemicals) ....................... 8,277 1,453,201
ELSEVIER
Global printer and publisher
of professional trade journals
and magazines (Media) ....................... 49,587 776,189
ING GROEP
Worldwide underwriter of
reinsurance; provider of financial
and consumer credit (Insurance) ............. 32,884 1,375,440
PHILIPS ELECTRONICS
Consumer and industrial
electronics (Electronics) ................... 18,757 1,463,210
-----------
5,068,040
-----------
PORTUGAL 1.70%
ELECTRICIDADE DE PORTUGAL
Generator and distributor
of electricity (Utilities) .................. 30,378 531,679
PORTUGAL TELECOM
Provider of telecommunications
services (Telecommunications) ............... 12,300 507,375
TELECEL-COMUNICACAOES PESSOAIS*
Cellular communications
operator (Telecommunications) ............... 6,100 549,363
-----------
1,588,417
-----------
RUSSIA 1.65%
TATNEFT (ADRS)+
Oil and gas explorer and
producer (Resources) ........................ 10,240 1,472,000
TATNEFT (ADRS)
Oil and gas explorer and
producer (Resources) ........................ 480 70,440
-----------
1,542,440
-----------
SPAIN 4.33%
BANCO BILBAO VIZCAYA
Provider of banking services
(Banking) ................................... 41,889 1,116,007
ENDESA
Producer, transmitter, and
distributor of electricity
to other utilities (Utilities) .............. 71,784 1,347,087
SOL MELIA
Hotel manager and franchise
company (Leisure and Hotels) ................ 11,862 357,054
TELEFONICA DE ESPANA
Provider of telecommunications
services (Telecommunications) ............... 45,050 1,224,906
-----------
4,045,054
-----------
SWEDEN 3.43%
ASTRA
Developer, manufacturer, and
marketer of pharmaceuticals
(Health and Household) ...................... 54,322 875,695
- ---------
See footnotes on page 12.
-----
11
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON INTERNATIONAL FUND
SHARES VALUE
--------- --------
SWEDEN (CONTINUED)
ELECTROLUX (SERIES B)
Manufacturer of appliances
and outdoor and industrial
products (Consumer Products) ................ 9,989 $ 825,097
L.M. ERICSSON TELEFON (SERIES B)
Manufacturer of
telecommunications equip-
ment (Telecommunications) ................... 34,175 1,502,498
-----------
3,203,290
-----------
SWITZERLAND 5.50%
CS HOLDINGS
Banking group (Banking) ..................... 8,497 1,192,609
NOVARTIS
Manufacturer of pharmaceuticals
(Health and Household) ...................... 903 1,409,100
ROCHE HOLDINGS
European pharmaceutical
company and chemical producer
(Health and Household) ...................... 143 1,252,083
ZURICH VERSICHERUNGS
Provider of insurance services
(Insurance) ................................. 3,134 1,288,969
-----------
5,142,761
-----------
TAIWAN 0.24%
THE ROC TAIWAN FUND
Closed-end fund investing
in Taiwan (Miscellaneous) ................... 26,000 225,875
-----------
UNITED KINGDOM 21.74%
B.A.T. INDUSTRIES
Manufacturer of tobacco
products; financial services
company (Tobacco) ........................... 180,000 1,578,777
BRITISH BIOTECH
Biotechnology company
(Health and Household) ...................... 215,000 365,625
BRITISH PETROLEUM
Oil producer, refiner, and
distributor (Resources) ..................... 100,000 1,468,532
BUNZL
Distributor and manufacturer
of paper and plastic products
(Manufacturing) ............................. 295,000 1,225,759
CARADON
Supplier of building products
(Building Materials) ........................ 180,000 573,004
DIXONS GROUP
Consumer electronics retailer
(Retailing) ................................. 73,000 849,428
FKI BABCOCK
Electrical engineering company
(Industrial Goods and Services) ............. 290,000 949,896
GRANADA GROUP
Television group with additional
leisure interests, including
hotels (Leisure and Hotels) ................. 111,000 1,524,995
LAPORTE
Producer and seller of
specialty chemicals (Chemicals) ............. 70,000 775,817
NATIONAL POWER
Electric power generation
(Utilities) ................................. 140,000 1,162,260
RAILTRACK GROUP
Monopoly provider of rail
services (Transportation) ................... 102,101 1,619,131
RENTOKIL
Provider of commercial services
such as pest control and office
maintenance (Business Services) ............. 109,200 437,272
REUTERS HOLDINGS
International news and
information organization (Media) ............ 90,000 974,861
ROLLS ROYCE
Aerospace; power generation,
transmission, and distribution
systems (Industrial Goods
and Services) ............................... 249,500 876,807
ROYAL BANK OF SCOTLAND
Provider of banking services
(Banking) ................................... 122,000 1,279,575
TESCO
Supermarket chain (Retailing) ............... 233,000 1,841,617
UNITED UTILITIES
Provider of water utility
services (Utilities) ........................ 90,000 1,093,231
WPP GROUP
Provider of worldwide marketing
services, including advertising,
public relations, and market
research (Media) ............................ 375,500 1,717,529
-----------
20,314,116
-----------
TOTAL INVESTMENTS 96.50%
(Cost $80,689,715) ............................. 90,160,296
OTHER ASSETS
LESS LIABILITIES 3.50% ........................ 3,273,737
-----------
NET ASSETS 100.00% ............................ $93,434,033
===========
- ----------
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
- -----
12
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
PERFORMANCE REVIEW
The 12 months ended October 31, 1997, was an extremely volatile period for the
emerging markets, with the most notable event being the currency crisis among
the members of the Association of South East Asian Nations (ASEAN). In the
12-month period, Seligman Henderson Emerging Markets Growth Fund performed
comparatively well, posting a total return of 8.26% based on the net asset value
of Class A shares, against the 3.93% total return of the Lipper Emerging Markets
Funds Average and the -9.74% total return of the Morgan Stanley Capital
International Emerging Markets Free Index (MSCI EMF Index).
Overall, the Fund largely avoided the difficulties of the currency crisis in the
ASEAN markets and made significant advances during the early part of 1997, as
non-ASEAN markets rallied. The Fund, however, was affected by general declines
in the emerging markets during the October weakness in the global equity
markets. Cash levels were gradually increased beginning in September 1997 as
global market uncertainty grew.
PORTFOLIO STRATEGY
PACIFIC REGION
o The ASEAN currency crisis was caused by a combination of over-valued
exchange rates, high levels of foreign indebtedness, over-investment in
property and other unproductive assets, and poor economic management. The
problems began in Thailand and spread to the other ASEAN economies. Over the
last 12 months, poor market performance, combined with currency
devaluations, led to some very large losses in these markets. Thailand fell
68.9%, Malaysia fell 57.8%, and the Philippines and Indonesia fell 54.8% and
43.4%, respectively.
AT OCTOBER 31, 1996, THE FUND HAD A WEIGHTING OF 14.9% IN THE ASEAN MARKETS.
THIS WEIGHTING WAS REDUCED TO A VERY LOW LEVEL IN JULY 1997, AS THE SEVERITY
OF THE CRISIS BECAME APPARENT. THE FUND ENDED ITS FISCAL YEAR AT A WEIGHTING
OF 2.0% IN ASEAN MARKETS, SUBSTANTIALLY LESS THAN THE 13.6% WEIGHTING OF THE
MSCI EMF INDEX.
o The Northeast Asian markets generally avoided the problems of the ASEAN
markets until July 1997, and China and Taiwan provided solid gains. However,
South Korea's stock market was weak, burdened by poor domestic liquidity.
The Northeast Asian markets started showing significant weakness in August.
In October, markets fell sharply as first the Hong Kong dollar, and then the
South Korean won, were subject to attack. In the 12 months ended October 31,
1997, the Chinese market gained 20.6%, but the Taiwanese market fell 3.4%
and South Korea's market fell 46.5%.
THE FUND'S EXPOSURE TO THE NORTHEAST ASIAN MARKETS OF CHINA, TAIWAN, AND
SOUTH KOREA WAS REDUCED IN SEPTEMBER AND OCTOBER AND ENDED THE 12-MONTH
PERIOD AT 14.2%. NONETHELESS, KEY "RED CHIPS" SUCH AS Qingling Motors,
Huaneng Power International, AND China Everbright, AND TAIWANESE TECHNOLOGY
STOCKS SUCH AS Synnex Technology International AND Siliconware Precision
Industries REMAIN IN THE PORTFOLIO. HOWEVER, AFTER OCTOBER 31, 1997, THE
FUND'S EXPOSURE TO SOUTH KOREA WAS ELIMINATED BEFORE THE CURRENCY
DEVALUATION AND THE SUBSEQUENT INTERNATIONAL MONETARY FUND PACKAGE.
- --------------------------------------------------------------------------------
[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) NICHOLAS VARDY, MONICA BALL, PETER BASSETT
(PORTFOLIO MANAGER), KIRSTEEN MORRISON
FUND OBJECTIVE
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.
- --------------------------------------------------------------------------------
-----
13
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
LATIN AMERICA
o Latin American equity markets continued to benefit from the economic
recovery that began when the Mexican crisis ended in early 1995. Until the
world-wide weakness in October 1997, the region contained some of the best
performing emerging markets. The Brazilian stock market had a strong rally
in the early part of 1997, due to optimism regarding the country's economic
reforms. However, this market subsequently experienced sharp declines as
doubts emerged over the sustainability of the government's currency policy.
Overall, Brazil was up 14.5% for the 12-month period ended October 31, 1997.
Mexico and Argentina continued to benefit from economic recovery, following
the 1994 crisis, and their markets finished the 12-month period ended
October 31, 1997, up 34.2% and 20.5%, respectively. The Chilean market
remained pressured by worries over inflation and the currency, and ended the
period marginally lower.
THE FUND MAINTAINED ITS YEAR-LONG OVERWEIGHTING IN LATIN AMERICA, WHICH
IMPROVED THE PORTFOLIO'S OVERALL RESULTS AS THESE MARKETS WERE SOMEWHAT LESS
IMPACTED BY THE RECENT VOLATILITY IN THE PACIFIC REGION. AT OCTOBER 31,
1997, THE FUND'S INVESTMENTS WERE FOCUSED IN MEXICO AT 10.3% AND BRAZIL AT
9.6%, AS THESE ARE BY FAR THE LARGEST MARKETS IN THE REGION. OVERALL, THE
FUND HAD A WEIGHTING OF 28.7% IN LATIN AMERICA, HAVING STOOD AT 26.7% AT
OCTOBER 31, 1996. WE PLAN TO MAINTAIN THE FUND'S SUBSTANTIAL INVESTMENT IN
THIS REGION GOING FORWARD WITH AN ADDITIONAL EMPHASIS ON MEXICO, AS ITS
ECONOMIC RECOVERY SEEMS ENTRENCHED.
WITHIN MEXICO, THE PORTFOLIO HAS BEEN INCREASINGLY FOCUSED ON CONSUMER
STOCKS SUCH AS Grupo Televisa, Femsa, Panamerican Beverages, AND Grupo
Iusacell, TOGETHER WITH INDUSTRIAL AND EXPORT STOCKS SUCH AS Desc AND ALFA.
THE BRAZILIAN PORTFOLIO HAS BECOME INCREASINGLY FOCUSED ON PRIVATIZATION
STOCKS IN THE UTILITIES SECTOR SUCH AS Telebras, CEMIG, AND SABESP.
CENTRAL/SOUTHERN EUROPE
o Performance in Central/Southern Europe was diverse, reflecting the differing
outlooks for the economies within the region. The Russian market continued
to power ahead, bolstered by increasing domestic and foreign investor
confidence, and finished 139.1% higher for the 12-month period ended October
31, 1997. The market in Turkey rose 89.1% during the 12-month period on the
expectation of currency reforms. The Hungarian market improved 84.3%, fueled
by earlier economic reforms and good domestic liquidity. The Portuguese and
Greek markets produced more modest returns of 42.8% and 32.2%, respectively.
In contrast, the Czech market lost 12.6% after a banking crisis, and the
Polish market fell 11.0% on fears of a currency crisis.
THE FUND HAD A WEIGHTING OF 18.7% IN CENTRAL/SOUTHERN EUROPE AS OF OCTOBER
31, 1996, AND HELD A SUBSTANTIAL POSITION IN THE REGION FOR THE LAST 12
MONTHS. THE FUND HAD A WEIGHTING OF 20.4% IN THE REGION AT OCTOBER 31, 1997,
AND WILL LIKELY MAINTAIN THIS INVESTMENT LEVEL GOING FORWARD. THE FUND'S
INVESTMENTS WERE PRINCIPALLY IN MARKETS THAT BENEFITED FROM CONTINUING
ECONOMIC RECOVERY AND IMPROVING LIQUIDITY, SUCH AS RUSSIA AT 8.6%, PORTUGAL
AT 4.2%, AND HUNGARY AT 3.0%.
THE RUSSIAN PORTFOLIO WAS FOCUSED ON OIL AND GAS STOCKS AND FEATURED A LARGE
HOLDING IN Tatneft, TOGETHER WITH HOLDINGS IN Lukoil Holding AND
Surgutneftegaz. BOTH THE PORTUGUESE AND HUNGARIAN PORTFOLIOS CONTAINED
PROMINENT STOCKS, SUCH AS Portugal Telecom IN PORTUGAL, A PROVIDER OF
TELECOMMUNICATIONS SERVICES, AND MOL Magyar Olaj-es Gazipari IN HUNGARY, AN
OIL AND GAS PRODUCER AND DISTRIBUTOR.
INDIAN SUBCONTINENT/AFRICA
o Within the Indian Subcontinent/Africa, market moves were more modest.
Although Indian interest rates fell and domestic liquidity improved, lack
of domestic confidence and the absence of an economic upturn limited the
market's rise to 16.9% in the 12-month period ended October 31, 1997. Among
the more significant markets, Egypt was the best performer, due to optimism
over economic reforms. Its market was up 69.3% for the 12 months ended
October 31, 1997. In contrast, the South African market slid 8.3%, affected
by high domestic interest rates.
AT OCTOBER 31, 1997, THE FUND'S WEIGHTING IN THE INDIAN SUBCONTINENT/AFRICA
STOOD AT 17.4%, PRIMARILY SPLIT BETWEEN INDIA AND SOUTH AFRICA. THIS WAS A
SLIGHT INCREASE FROM A WEIGHTING OF 13.5% AT OCTOBER 31, 1996. THE INDIAN
PORTFOLIO WAS DIVERSIFIED WITH THE ADDITION OF Videsh Sanchar Nigam, A
PROVIDER OF INTERNATIONAL TELECOMMUNICATIONS SERVICES. WITHIN THE SOUTH
AFRICAN PORTFOLIO, THE FOCUS HAS BEEN ON INDUSTRIAL AND COMMERCIAL STOCKS,
SUCH AS Metro Cash & Carry, RATHER THAN ON MINERAL PRODUCERS.
SUMMARY
The global equity markets have been exceptionally volatile as the Fund begins
its new fiscal year, due to the possibility of further currency problems. The
recent declines in the markets have created significant opportunities in certain
emerging markets, although recovery in some ASEAN countries may take an extended
period of time. At October 31, 1997, cash levels stood at a defensively high
level of 17.4%. As global markets stabilize, the cash within the Fund will be
invested in markets whose economies have more positive outlooks.
Note: All figures are in US dollar terms. All specific market performance
information included in the Investment Report is taken from the MSCI country
index for the 12-month period ended October 31, 1997, unless otherwise stated.
- -----
14
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
COUNTRY ALLOCATION
AT OCTOBER 31, 1997
MSCI
EMF
FUND INDEX
------- ---------
CENTRAL/SOUTHERN EUROPE ............................. 20.37% 10.35%
Czech Republic .................................. -- 0.95
Estonia ......................................... 0.81 --
Greece .......................................... 1.13 2.50
Hungary ......................................... 2.95 0.63
Lithuania ....................................... 0.83 --
Poland .......................................... 0.32 0.56
Portugal ........................................ 4.21 3.28
Russia .......................................... 8.59 --
Slovenia ........................................ 0.25 --
Turkey .......................................... 1.28 2.43
INDIAN SUBCONTINENT/AFRICA .......................... 17.42 19.98
Egypt ........................................... 3.65 --
India ........................................... 5.13 6.30
Israel .......................................... -- 2.36
Jordan .......................................... -- 0.12
Lebanon ......................................... 1.25 --
Pakistan ........................................ -- 0.79
Saudi Arabia .................................... 1.39 --
South Africa .................................... 6.00 10.32
Sri Lanka ....................................... -- 0.09
LATIN AMERICA ....................................... 28.69 34.37
Argentina ....................................... 3.11 3.57
Brazil .......................................... 9.59 13.16
Chile ........................................... 5.73 3.91
Columbia ........................................ -- 0.94
Mexico .......................................... 10.26 10.20
Peru ............................................ -- 1.08
Venezuela ....................................... -- 1.51
PACIFIC ............................................. 16.10 35.30
China ........................................... 5.10 0.54
Indonesia ....................................... 0.29 3.17
Malaysia ........................................ 0.08 6.76
Philippines ..................................... 1.24 1.73
South Korea ..................................... 0.49 5.32
Taiwan .......................................... 8.56 15.87
Thailand ........................................ 0.34 1.91
OTHER ASSETS LESS LIABILITIES ....................... 17.42 --
- --------------------------------------------------------------------------------
TOTAL ............................................... 100.00% 100.00%
REGIONAL ALLOCATION
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Latin America ........................... 28.69%
Central/Southern Europe ................. 20.37%
Indian Subcontinent/Africa .............. 7.42%
Pacific ................................. 16.10%
Other Assets Less Liabilities ........... 17.42%
LARGEST INDUSTRIES
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Telecommunications ...................... 12.1% $12,603,695
Financial Services ...................... 12.7% $11,759,279
Electric Utilities ...................... 10.8% $11,251,847
Resources ............................... 9.9% $10,272,318
Consumer Goods and Services ............. 7.2% $ 7,497,824
LARGEST PORTFOLIO HOLDINGS
AT OCTOBER 31, 1997
SECURITY VALUE
- ---------- ----------
Tatneft (ADRs) (Russia) ..................................... $2,932,500
Telecomunicacoes Brasileiras
"Telebras" (ADRs) (Brazil) .............................. 2,602,125
Companhia Energetica de Minas Gerais
"CEMIG" (ADRs) (Brazil) ................................. 2,515,500
Huaneng Power International (ADRs)
(China) ................................................. 2,266,000
Companhia de Saneamento Basico do
Estado Sao Paulo "SABESP" (Brazil) ...................... 2,208,218
Nizhny Novgorod Telephone (RDCs)
(Russia) ................................................ 2,145,000
Fomento Economico Mexicano "Femsa"
(Series B) (Mexico) ..................................... 2,099,373
Desc (ADRs) (Mexico) ........................................ 2,031,653
Petroleo Brasileiro "Petrobras" (Brazil) .................... 1,944,399
Panamerican Beverages (ADRs)
(Mexico) ................................................ 1,925,100
-----
15
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1997
AVERAGE ANNUAL
--------------------------
SINCE
SIX ONE INCEPTION
MONTHS* YEAR 5/28/96
---------- ------- ------------
CLASS A**
With Sales Charge ......... (12.51)% 3.09% (1.50)%
Without Sales Charge ...... (8.14) 8.26 1.95
CLASS B**
With CDSL+ ................ (12.91) 2.54 (1.53)
Without CDSL .............. (8.32) 7.54 1.27
CLASS D**
With 1% CDSL .............. (9.24) 6.54 n/a
Without CDSL .............. (8.32) 7.54 1.27
LIPPER EMERGING MARKETS
FUNDS AVERAGE*** .......... (9.37) 3.93 (0.69)++
MSCI EMF INDEX*** ......... (18.60) (9.74) (10.54)++
NET ASSET VALUE
OCTOBER 31, 1997 APRIL 30, 1997 OCTOBER 31, 1996
------------------- -------------- -------------------
CLASS A $7.34 $7.99 $6.78
CLASS B 7.27 7.93 6.76
CLASS D 7.27 7.93 6.76
CAPITAL LOSS INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1997
REALIZED .................. $(0.190)
UNREALIZED ................ (0.011)#
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.
- ----------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume the investment of
dividends and capital gain distributions. Returns for Class A shares are
calculated with and without the effect of the initial 4.75% maximum sales
charge. Returns of Class B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales load ("CDSL"), charged
on 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 on
redemptions made within one year of the date of purchase.
*** The Lipper Emerging Markets Funds Average and the Morgan Stanley Capital
International Emerging Markets Free Index (MSCI EMF Index) are unmanaged
benchmarks that assume reinvestment of dividends. The Lipper Emerging
Markets Funds Average excludes the effect of sales charges and the MSCI
EMF Index excludes the effect of fees and sales charges. The monthly
performance of the Lipper Emerging Markets Funds Average is used in the
Performance and Portfolio Overview. Investors cannot invest directly in an
average or an index.
+ The CDSL is 5% for periods of one year or less, and 4% since inception.
++ From May 31, 1996.
# Represents the per share amount of net unrealized depreciation of
portfolio securities as of October 31, 1997.
- -----
16
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW October 31, 1997
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
This chart compares a $10,000 hypothetical investment made in Seligman
Henderson Emerging Markets Growth Fund, with and without the initial 4.75%
maximum sales charge for Class A shares, with the 4% contingent deferred sales
load ("CDSL") for Class B shares, and without the 1% CDSL for Class D shares,
since the commencement of operations on May 28, 1996, through October 31, 1997,
to a $10,000 hypothetical investment made in the Lipper Emerging Markets Funds
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
Index excludes the effect of fees or sales charges, and the Average excludes the
effect of sales charges.
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
<TABLE>
<CAPTION>
EMERGING MARKETS GROWTH FUND
Lipper
Class A Class A Class B Class D Emerging Markets
With Sales Without Sales With Without Funds MSCI
Charge Charge CDSL CDSL Average EMF Index
---------- ------------- ------- ------- --------------- ---------
<C> <C> <C> <C> <C> <C> <C>
5/28/96 .............. 9,520 10,000 10,000 10,000 10,000 10,000
5/31/96 .............. 9,533 10,014 10,014 10,014 10,000 10,000
6/30/96 .............. 9,493 9,972 9,986 9,986 10,054 10,131
7/31/96 .............. 9,013 9,468 9,454 9,454 9,459 9,444
8/31/96 .............. 9,400 9,874 9,860 9,860 9,715 9,652
9/30/96 .............. 9,400 9,874 9,860 9,860 9,778 9,735
10/31/96 ............. 9,040 9,496 9,468 9,468 9,527 9,460
11/30/96 ............. 9,240 9,706 9,664 9,664 9,738 9,630
12/31/96 ............. 9,453 9,930 9,888 9,888 9,906 9,636
1/31/97 .............. 10,173 10,686 10,630 10,644 10,700 10,264
2/28/97 .............. 10,520 11,050 10,994 10,994 11,095 10,678
3/31/97 .............. 10,400 10,924 10,868 10,868 10,861 10,416
4/30/97 .............. 10,653 11,190 11,106 11,106 10,925 10,490
5/31/97 .............. 11,093 11,653 11,569 11,569 11,366 10,750
6/30/97 .............. 12,160 12,773 12,675 12,675 11,991 11,371
7/31/97 .............. 12,453 13,081 12,969 12,969 12,348 11,578
8/31/97 .............. 11,413 11,989 11,877 11,891 11,232 10,242
9/30/97 .............. 11,720 12,311 12,199 12,199 11,682 10,319
10/31/97 ............. 9,787 10,280 9,782 10,182 9,902 8,539
</TABLE>
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. Past performance is not
indicative of future investment results.
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1997
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/97
- ------------ ----------- ---------
Companhia de Saneamento
Basico do Estado Sao Paulo
"SABESP" (Brazil) ........................ 10,144,000 10,144,000
Compania de
Telecomunicaciones de Chile
"CTC" (ADRs) (Chile) ..................... 66,000 66,000
Companhia Energetica de
Minas Gerais "CEMIG"
(ADRs) (Brazil) .......................... 46,200 64,500
Distribucion y Servicio (ADRs)
(Chile) .................................. 77,000 77,000
Fomento Economico Mexicano
"Femsa" (Series B) (Mexico) .............. 297,500 297,500
Formosa Growth Fund (Taiwan) ................. 102,000 102,000
Grupo Iusacell (ADRs) (Mexico) ............... 95,600 95,600
Huaneng Power International
(ADRs) (China) ........................... 65,000 103,000
Saudi Arabia Investment Fund
(Saudi Arabia) ........................... 158,400 158,400
Sonae Investimentos (Portugal) ............... 32,000 32,000
SHARES
--------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/97
- -------------- ----------- ---------
Bufete Industrial (ADRs)
(Mexico) ................................. 50,200 --
Companhia Vale do Rio Doce
(ADRs) (Brazil) .......................... 43,900 --
Empresas ICA Sociedad
Controladora (ADRs) (Mexico) ............. 72,500 --
Gencor (South Africa) ........................ 258,500 --
Grupo Financiero Banamex
Accival (Class B) (Mexico) ............... 496,000 --
Guangdong Investments (China) ................ 940,000 --
Pliva (GDRs) (Croatia) ....................... 74,000 --
The ROC Taiwan Fund
(Taiwan) ................................. 87,000 --
Telefonica del Peru (ADRs) (Peru) ............ 46,300 --
Zagrebacka Banka (GDRs)
(Croatia) ................................ 35,000 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
-----
17
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
SHARES VALUE
--------- --------
COMMON STOCKS 82.58%
ARGENTINA 3.11%
BANCO RIO DE LA PLATA (ADRS)*
Provider of commercial and
investment banking services
(Financial Services) ........................ 45,300 $ 475,650
IRSA INVERSIONES Y REPRESENTACIONES
(GDRS)
Real estate developer
(Construction and Property) ................. 39,300 1,326,375
PEREZ (ADRS)
Producer of oil and gas, and
provider of energy services
(Resources) ................................. 111,810 1,396,216
SIDERCA
Manufacturer and
producer of steel (Metals) .................. 15,637 38,333
-----------
3,236,574
-----------
BRAZIL 9.59%
COMPANHIA DE SANEAMENTO
BASICO DO ESTADO SAO PAULO "SABESP"
Provider of water treatment
and distribution services
(Electric Utilities) ........................ 10,144,000 2,208,218
COMPANHIA ENERGETICA DE
MINAS GERAIS "CEMIG" (ADRS)
Provider of electrical utility
services (Electric Utilities) ............... 64,500 2,515,500
COMPANHIA PARANAENSE DE
ENERGIA "COPEL" (ADRS)
Provider of electrical utility
services (Electric Utilities) ............... 39,800 475,112
ERICSSON TELECOMUNICACOES*
Manufacturer of
telecommunications equipment
(Telecommunications) ........................ 7,700,000 239,556
PETROLEO BRASILEIRO "PETROBRAS"
Oil and gas producer and
distributor (Resources) ..................... 9,700,000 1,944,399
TELECOMUNICACOES BRASILEIRAS
"TELEBRAS" (ADRS)
Provider of telecommunications
services (Telecommunications) ............... 25,700 2,602,125
-----------
9,984,910
-----------
CHILE 5.73%
BANCO SANTANDER CHILE (ADRS)
Provider of banking services
(Financial Services) ........................ 74,600 969,800
COMPANIA DE TELECOMUNICACIONES
DE CHILE "CTC" (ADRS)
Provider of telecommunications
services (Telecommunications) ............... 66,000 1,831,500
DISTRIBUCION Y SERVICIO (ADRS)*
Supermarket operator
(Consumer Goods and Services) ............... 77,000 1,352,312
ENERSIS (ADRS)
Provider of electric utility
services (Electric Utilities) ............... 54,800 1,808,400
-----------
5,962,012
-----------
CHINA 5.10%
CHINA EVERBRIGHT*
Department store and
supermarket operator;
property investor and
developer (Diversified) ..................... 920,000 987,840
CNPC HONG KONG*
Explorer and producer
of crude oil (Resources) .................... 1,900,000 792,691
HUANENG POWER INTERNATIONAL
(ADRS)*
Developer and manufacturer
of coal-fired power plants
(Electric Utilities) ........................ 103,000 2,266,000
QINGLING MOTORS*
Manufacturer of
lightweight trucks
(Automotive Manufacturing) .................. 1,930,000 1,260,867
-----------
5,307,398
-----------
EGYPT 3.65%
COMMERCIAL INTERNATIONAL BANK+
Provider of banking services
(Financial Services) ........................ 54,000 1,188,000
MIBANK (GDSS)+
Diversified banking services
provider (Financial Services) ............... 62,000 988,900
MIBANK (GDSS)
Diversified banking services
provider (Financial Services) ............... 18,000 281,250
SUEZ CEMENT (GDRS)*+
Cement manufacturer
(Construction and Property) ................. 58,000 1,342,700
-----------
3,800,850
-----------
ESTONIA 0.81%
SOCIETIE GENERAL BALTIC REPUBLICS FUND
Investor in the Baltic
Republics (Financial Services) .............. 3,200 848,000
-----------
- ---------
See footnotes on page 21.
- -----
18
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
SHARES VALUE
--------- --------
GREECE 1.13%
ALPHA CREDIT BANK
Provider of banking services
(Financial Services) ........................ 6,000 $ 395,379
MAILLIS
Producer of packaging
and packaging systems
(Manufacturing) ............................. 54,000 779,112
-----------
1,174,491
-----------
HUNGARY 2.95%
MOL MAGYAR OLAJ-ES GAZIPARI
(GDRS)+
Oil and gas producer and
distributor (Resources) ..................... 45,000 967,500
OTP BANK (GDRS)+
Provider of commercial banking
services (Financial Services) ............... 19,620 591,151
RICHTER GEDEON (GDRS)
Manufacturer of pharmaceuticals
and cosmetics (Drugs and
Health Care) ................................ 16,300 1,515,900
-----------
3,074,551
-----------
INDIA 5.13%
BSES (GDRS)*
Provider of electric utility
services (Electric Utilities) ............... 41,000 662,150
HINDALCO INDUSTRIES (GDRS)
Producer of aluminum and
aluminum products (Metals) .................. 45,000 1,300,500
MAHINDRA & MAHINDRA (GDRS)
Manufacturer of automobiles,
automobile components, and
farm equipment (Manufacturing) .............. 71,000 745,500
RELIANCE INDUSTRIES (GDRS)
Manufacturer of synthetic
fibers and petrochemicals
(Diversified) ............................... 50,000 1,050,000
STATE BANK OF INDIA (GDRS)
Provider of banking services
(Financial Services) ........................ 20,400 388,110
STATE BANK OF INDIA (GDRS)+
Provider of banking services
(Financial Services) ........................ 29,600 529,100
VIDESH SANCHAR NIGAM (GDRS)+
Provider of international
telecommunications services
(Telecommunications) ........................ 51,000 669,375
-----------
5,344,735
-----------
INDONESIA 0.29%
BANK DAGANG NASIONAL INDONESIA
Provider of commercial banking
services (Financial Services) ............... 354,000 47,871
KAWASAN INDUSTRI JABABEKA
Developer of industrial estates
and facilities (Construction
and Property) ............................... 580,000 255,409
-----------
303,280
-----------
LEBANON 1.25%
BANQUE AUDI (GDRS)+
Commercial bank
(Financial Services) ........................ 47,200 1,298,000
-----------
LITHUANIA 0.83%
HERMIS BANK (GDRS)
Provider of commercial and
retail banking services
(Financial Services) ........................ 75,000 862,500
-----------
MALAYSIA 0.08%
FRASER & NEAVE HOLDINGS
Manufacturer of glass bottles and
glass products (Manufacturing) .............. 32,900 80,793
-----------
MEXICO 10.26%
ALFA
Producer of steel, chemicals,
and food products (Industrial
Goods and Services) ......................... 207,900 1,526,669
DESC (ADRS)
Diversified product
manufacturer; financial
services provider (Diversified) ............. 59,975 2,031,653
FOMENTO ECONOMICO MEXICANO "FEMSA"
(SERIES B)*
Beverage and packaging
producer; retail store operator
(Consumer Goods and Services) ............... 297,500 2,099,373
GRUPO IUSACELL (ADRS)*
Provider of wireless
telecommunications services
(Telecommunications) ........................ 95,600 1,720,800
GRUPO TELEVISA (GDRS)*
Provider of television and
other media services
(Leisure and Hotels) ........................ 44,700 1,385,700
- ---------
See footnotes on page 21.
-----
19
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
SHARES VALUE
--------- --------
MEXICO (CONTINUED)
PANAMERICAN BEVERAGES (ADRS)
Producer of Coca-Cola and
other beverages (Consumer
Goods and Services) ......................... 62,100 $ 1,925,100
-----------
10,689,295
-----------
PHILIPPINES 1.24%
PHILIPPINE LONG DISTANCE TELEPHONE
Telephone utility
(Telecommunications) ........................ 30,000 742,574
SM PRIME HOLDINGS
Developer and operator
of retail properties
(Construction and Property) ................. 3,150,000 552,475
-----------
1,295,049
-----------
POLAND 0.32%
KGHM POLSKA MIEDZ*
Producer of copper, silver,
and related products (Metals) ............... 34,000 336,600
-----------
PORTUGAL 4.21%
JERONIMO MARTINS
Retailer of food and
consumer products (Retailing) ............... 19,333 1,259,300
PORTUGAL TELECOM
Provider of telecommunications
services (Telecommunications) ............... 6,000 245,200
PORTUGAL TELECOM (ADRS)
Provider of telecommunications
services (Telecommunications) ............... 18,000 742,500
SONAE INVESTIMENTOS
Hypermarket operator (Retailing) ............ 32,000 1,190,824
TELECEL-COMUNICACAOES PESSOAIS*
Cellular communications
operator (Telecommunications) ............... 10,550 950,128
-----------
4,387,952
-----------
RUSSIA 8.59%
LUKOIL HOLDING (ADRS)
Prospector, extractor, and
transporter of oil and gas
(Resources) ................................. 10,800 943,615
MOSENERGO (ADRS)
Producer and distributor of
electric and thermal energy
(Electric Utilities) ........................ 29,500 1,316,467
NIZHNY NOVGOROD TELEPHONE (RDCS)*
Telephone utility
(Telecommunications) ........................ 13 2,145,000
ROSTELKOM (RDCS)*
Provider of long distance and
international telecommunications
services (Telecommunications) ............... 22 671,000
SURGUTNEFTEGAZ (ADRS)
Oil and natural gas provider
(Resources) ................................. 101,500 938,875
TATNEFT (ADRS)+
Oil and gas explorer and
producer (Resources) ........................ 20,400 2,932,500
-----------
8,947,457
-----------
SAUDI ARABIA 1.39%
SAUDI ARABIA INVESTMENT FUND*
Closed-end fund investing in
Saudi Arabia (Miscellaneous) ................ 158,400 1,445,400
-----------
SLOVENIA 0.25%
SKB BANKA (GDRS)+
Provider of commercial,
savings, and investment
banking services
(Financial Services) ........................ 14,000 255,500
-----------
SOUTH AFRICA 6.00%
BARLOW
Producer and distributor of
products used in building
and construction and other
industries (Construction
and Property) ............................... 100,000 1,007,374
LIBERTY LIFE ASSOCIATION OF AFRICA
Provider of life and health
insurance (Financial Services) .............. 43,000 1,071,762
METRO CASH & CARRY
Retailer of food and consumer
products (Retailing) ........................ 1,280,000 1,153,848
SASOL
Fuel and chemical producer
(Diversified) ............................... 76,000 915,567
- ---------
See footnotes on page 21.
- -----
20
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
SHARES VALUE
--------- --------
SOUTH AFRICA (CONTINUED)
SOUTH AFRICAN BREWERIES
Producer of beer and other
beverages (Consumer Goods
and Services) ............................... 42,500 $ 1,126,389
STANDARD BANK INVESTMENT
Provider of commercial banking
services (Financial Services) ............... 23,000 974,556
-----------
6,249,496
-----------
SOUTH KOREA 0.49%
SAMSUNG ELECTRONICS
Manufacturer of consumer
electronics and semiconductors
(Manufacturing) ............................. 10,491 469,062
SK TELECOM
Provider of mobile
telecommunications
and paging services
(Telecommunications) ........................ 130 43,937
-----------
512,999
-----------
TAIWAN 8.56%
CHINA STEEL (GDRS)
Producer of steel and steel
products (Metals) ........................... 60,475 887,471
FORMOSA FUND*
Closed-end fund investing
in Taiwan (Miscellaneous) ................... 90 824,130
FORMOSA GROWTH FUND*
Closed-end fund investing
in Taiwan (Miscellaneous) ................... 102,000 1,811,520
HOTUNG INVESTMENT HOLDINGS*
Investor in unlisted
technology-related companies
(Financial Services) ........................ 2,500,000 593,750
SILICONWARE PRECISION INDUSTRIES
(GDRS)
Integrated circuit packaging
(Industrial Goods and Services) ............. 112,000 1,078,000
SYNNEX TECHNOLOGY INTERNATIONAL
(GDRS)
Manufacturer of PCs and
peripherals (Consumer Goods
and Services) ............................... 57,000 994,650
TAIPEI FUND*
Closed-end fund investing
in Taiwan (Miscellaneous) ................... 90 907,740
TAIWAN OPPORTUNITIES FUND*
Closed-end fund investing
in Taiwan (Miscellaneous) ................... 140,000 1,813,000
-----------
8,910,261
-----------
THAILAND 0.34%
EXPLORATION & PRODUCTION
Producer of natural gas
(Resources) ................................. 35,000 356,522
-----------
TURKEY 1.28%
MIGROS TURK
Retailer of food and consumer
products (Retailing) ........................ 1,268,750 1,330,253
-----------
TOTAL INVESTMENTS 82.58%
(Cost $86,155,869) ............................. 85,994,878
OTHER ASSETS
LESS LIABILITIES 17.42% ....................... 18,143,965
------------
NET ASSETS 100.00% ............................ $104,138,843
============
- ----------
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
-----
21
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
PERFORMANCE REVIEW
For the 12 months ended October 31, 1997, Seligman Henderson Global Growth
Opportunities Fund posted a total return of 13.86% based on the net asset value
of Class A shares, compared to the 16.45% total return of its peers, as measured
by the Lipper Global Funds Average. Stocks around the world, as measured by the
Morgan Stanley Capital International World Index (MSCI World Index), posted a
total return of 17.25% for the period. Given its growth objective, the Fund was
substantially invested in the Pacific region and Latin America, where stocks
with strong earnings growth rates were found. Many of these stocks saw their
valuations reduced in the currency crisis, which contributed to the Fund's
relative underperformance.
The past 12 months offered strikingly differentiated economic and market
performance around the world. While the Americas prospered with continuing
benign surprises regarding growth and inflation, the Pacific region suffered a
significant economic deterioration that culminated in widespread currency
crises. Meanwhile, Continental Europe enjoyed the best increase in economic and
earnings growth as a result of currency devaluation. In each case, stock market
performance reflected these regional developments.
PORTFOLIO STRATEGY
Throughout its fiscal year, the Fund maintained fairly balanced investments
among its four major themes: 32% was invested in PRODUCTIVITY, 30% in QUALITY OF
LIFE, 23% in CONSUMER IS KING; and the smallest portion of the Fund's
investments was in GLOBAL TRADE, which accounted for 15% of the Fund's total
assets.
PRODUCTIVITY
o A key focus for corporate management around the world continued to be the
search for improved productivity and reduced costs. Greater investment in
technology and an acceleration in outsourcing were two popular methods for
achieving those goals.
AS A RESULT, SOME OF THE MOST SUCCESSFUL INVESTMENTS IN THE FUND WERE
RELATED TO THE PRODUCTIVITY THEME, SPECIFICALLY STOCKS IN THE Technology AND
Outsourcing SUB-THEMES. FOR EXAMPLE, ALL THE FOLLOWING PROVED TO BE STRONG
PERFORMERS: Microsoft IN THE UNITED STATES, A PRODUCER OF MICROCOMPUTER
SOFTWARE; L.M. Ericsson Telefon IN SWEDEN, A MANUFACTURER OF
TELECOMMUNICATIONS EQUIPMENT; AND Parity IN THE UNITED KINGDOM, A PROVIDER
OF SOFTWARE ENGINEERING AND CONSULTING SERVICES.
QUALITY OF LIFE
o This area provided some of the most exciting sub-themes for finding growth
stocks, particularly in the Health Care and Tourism sub-themes.
IN Health Care, TWO OF THE BIGGEST WINNERS IN THE PAST 12 MONTHS INCLUDED
Pfizer IN THE US AND Richter Gedeon IN HUNGARY. BOTH PHARMACEUTICAL STOCKS
PRODUCED BETTER-THAN-EXPECTED EARNINGS GROWTH. WE ALSO PURCHASED Genset, A
LEADING BIOMEDICAL RESEARCH COMPANY BASED IN FRANCE. Genset IS MAPPING THE
- --------------------------------------------------------------------------------
[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) BEN ELWES, DAVID THORNTON, MICHAEL WOOD-MARTIN,
PETER BASSETT, (SEATED) STACEY NAVIN, NITIN MEHTA (PORTFOLIO MANAGER), KIRSTEEN
MORRISON
[PHOTO]
US TEAM: (FROM LEFT) MICHELLE BORRE, LOUISE KNIGHT (ADMINISTRATIVE ASSISTANT),
DAVE LEVY, LOUISE OH, (SEATED) LORIS MUZZATTI (PORTFOLIO MANAGER)
FUND OBJECTIVE
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.
- --------------------------------------------------------------------------------
- -----
22
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
HUMAN GENE WITH THE OBJECTIVE OF USING THE GENOMIC DATABASE TO IMPROVE THE
EFFICIENCY OF CLINICAL TRIALS FOR NEW DRUGS.
IN Tourism, CHEAPER CURRENCIES AND GREATER ECONOMIC ACTIVITY HAVE BEEN THE
MAJOR FACTORS SUPPORTING THE INDUSTRY. RISING TRAFFIC AND HIGHER OCCUPANCY
RATES ARE RAISING THE EARNINGS PROFILE OF THESE COMPANIES. THROUGHOUT THE
FISCAL YEAR, WE CONTINUED TO ADD STOCKS RELATED TO EUROPEAN TOURISM, SUCH AS
Airtours IN THE UK, A TOUR OPERATOR.
CONSUMER IS KING
o While consumption was strong in the US and the UK during the past 12 months,
it was disappointing elsewhere. However, improving consumer confidence in
Continental Europe held promise for the future. Despite a mixed background,
there were many pockets of buoyant consumption.
IN PARTICULAR, THE FUND'S Global Brand Power SUB-THEME WAS MOST REWARDING.
TWO GERMAN COMPANIES -- Adidas, A MANUFACTURER OF SPORTING GOODS, AND
Porsche, A MANUFACTURER OF LUXURY SPORTS CARS -- ENJOYED RAPIDLY GROWING
DEMAND, THE RESULT OF AGGRESSIVE PRODUCT STRATEGIES AND IMPRESSIVE
EXECUTION.
GLOBAL TRADE
o Although GLOBAL TRADE continued to grow at a faster pace than global
economic growth, we found few obvious direct beneficiaries. Instead, we
concentrated on the Telecommunications and Natural Resources sub-themes,
which led us mostly to the emerging markets. While in developed markets such
businesses are normally mature, with slow earnings growth, in many
developing countries both sectors can enjoy rapid growth. For example, as
these countries become wired, telephone traffic should soar. Similarly, more
efficient use of Latin America's and Eastern Europe's vast natural resources
should result in rapid earnings growth.
WITH THIS IN MIND, WE INVESTED IN TELECOMMUNICATIONS COMPANIES IN INDIA,
BRAZIL, AND MEXICO. WE WERE ALSO LED TO OIL AND GAS COMPANIES IN BRAZIL,
HUNGARY, AND RUSSIA. OVER THE 12-MONTH PERIOD, THE FUND'S WEIGHTING IN THE
EMERGING MARKETS INCREASED SLIGHTLY FROM 8.5% TO 10.0% AT OCTOBER 31, 1997.
JAPAN AND THE PACIFIC REGION
o The Fund's biggest disappointments during the past 12 months were in Japan
and the Pacific region. In Japan, the Fund's emphasis on attractively valued
mid-capitalization growth stocks was not particularly rewarding, as nervous
investors continued to seek safety in large-capitalization stocks despite
their lofty valuations. In the Pacific region, we de-emphasized property and
bank stocks in favor of technology and consumer staples. However, in the
recent turmoil, even these sectors saw indiscriminate reductions in
valuations.
OVERALL, THE FUND'S EXPOSURE TO JAPAN WAS REDUCED TO 9.6% FROM 16.6% 12
MONTHS AGO. WITH LITTLE IMPROVEMENT IN SIGHT, WE SIGNIFICANTLY REDUCED THE
FUND'S EXPOSURE TO THE PACIFIC REGION OVER THE PAST 12 MONTHS, FROM 11.2% TO
4.6% AT OCTOBER 31, 1997.
SUMMARY
The near-term outlook for global equity markets remains uncertain. Recent market
volatility is a result of the heightened economic and valuation risks perceived
to exist around the world. The economic shocks emanating from the Pacific region
could reduce the outlook for economic and earnings growth worldwide.
However, the slowdown in the Pacific region could prove disinflationary for the
US, the UK, and Continental Europe. Therefore, we do not believe that the US
Federal Reserve Board or the German Bundesbank will need to raise interest rates
in the very near term. Looking forward, we continue to believe that Continental
Europe has the strongest future growth prospects. Accordingly, the Fund's
largest weighting is in this region with 32.8% at October 31, 1997, (excluding
Hungary which is an emerging market), significantly higher than the 25.7%
weighting at October 31, 1996.
We believe that the current environment of worldwide excess capacity and low
pricing power could make profit margins more vulnerable and earnings expansion
more prized. Growth stocks should then command a higher premium. Our thematic
investment approach is designed to find such rewarding growth opportunities, and
we will continue to apply this discipline in the year ahead.
Note: All figures are in US dollar terms. All specific market performance
information included in the Investment Report is taken from the MSCI country
index for the 12-month period ended October 31, 1997, unless otherwise stated.
-----
23
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
INVESTMENT RESULTS PER SHARE
<TABLE>
<CAPTION>
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1997
AVERAGE ANNUAL
--------------------------------------------
CLASS B
SINCE SINCE
SIX ONE INCEPTION INCEPTION
MONTHS* YEAR 4/22/96 11/1/95
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
CLASS A**
With Sales Charge ....... 3.02% 8.49% n/a 10.75%
Without Sales Charge .... 8.11 13.86 n/a 13.51
CLASS B**
With CDSL+ .............. 2.60 7.97 5.61% n/a
Without CDSL ............ 7.60 12.97 8.14 n/a
CLASS D**
With 1% CDSL ............ 6.60 11.97 n/a n/a
Without CDSL ............ 7.60 12.97 n/a 12.65
LIPPER GLOBAL
FUNDS AVERAGE*** ........ 8.89 16.45 12.09++ 16.12+++
MSCI WORLD INDEX*** ..... 8.78 17.25 13.24++ 17.03+++
</TABLE>
NET ASSET VALUE
OCTOBER 31, 1997 APRIL 30, 1997 OCTOBER 31, 1996
------------------- -------------- -------------------
CLASS A $9.20 $8.51 $8.08
CLASS B 9.06 8.42 8.02
CLASS D 9.06 8.42 8.02
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1997
REALIZED ................ $0.448#
UNREALIZED .............. 1.420##
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.
- ----------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume the investment of
dividends and capital gain distributions. Returns for Class A shares are
calculated with and without the effect of the initial 4.75% maximum sales
charge. Returns of Class B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales load ("CDSL"), charged
on 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 on
redemptions made within one year of the date of purchase.
*** The Lipper Global Funds Average and the Morgan Stanley Capital
International World Index (MSCI World Index) are unmanaged benchmarks that
assume reinvestment of dividends. The Lipper Global Funds Average excludes
the effect of sales charges and the MSCIWorld Index excludes the effect of
fees and sales charges. The monthly performance of the Lipper Global Funds
Average is used in the Performance and Portfolio Overview. Investors
cannot invest directly in an average or an index.
+ The CDSL is 5% for periods of one year or less, and 4% since inception.
++ From April 30, 1996.
+++ From October 31, 1995.
# On November 21, 1997, a capital gain of $0.370 per share was paid to
shareholders.
## Represents the per share amount of net unrealized appreciation of
portfolio securities as of October 31, 1997.
- -----
24
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW October 31, 1997
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
This chart compares a $10,000 hypothetical investment made in Seligman
Henderson Global Growth Opportunities Fund, with and without the initial 4.75%
maximum sales charge for Class A shares, and without the 1% contingent deferred
sales load ("CDSL") for Class D shares, since the commencement of investment
operations on November 1, 1995, through October 31, 1997, to a $10,000
hypothetical investment made in the Lipper Global Funds Average and the Morgan
Stanley Capital International World Index (MSCI World Index) for the same
period. It is important to keep in mind that the Index excludes the effect of
fees or sales charges, and the Average excludes the effect of sales charges.
GLOBAL GROWTH OPPORTUNITIES FUND
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
<TABLE>
<CAPTION>
Class A Class A Lipper
With Without Class D MSCI Global
Sales Sales Without Global Fund
Load Load CDSL Index Average
-------- -------- -------- ------- --------
<C> <C> <C> <C> <C> <C>
10/31/95 ......... 9,520 10,000 10,000 10,000 10,000
11/30/95 ......... 9,560 10,042 10,028 10,349 10,175
12/31/95 ......... 9,840 10,336 10,322 10,654 10,367
1/31/96 .......... 10,107 10,616 10,602 10,848 10,649
2/29/96 .......... 10,293 10,812 10,784 10,916 10,786
3/31/96 .......... 10,560 11,092 11,064 11,100 10,974
4/30/96 .......... 10,880 11,429 11,387 11,363 11,361
5/31/96 .......... 11,067 11,625 11,569 11,375 11,503
6/30/96 .......... 11,093 11,653 11,597 11,434 11,474
7/31/96 .......... 10,627 11,162 11,106 11,032 10,959
8/31/96 .......... 10,827 11,373 11,303 11,161 11,250
9/30/96 .......... 10,987 11,541 11,457 11,600 11,591
10/31/96 ......... 10,773 11,317 11,233 11,683 11,583
11/30/96 ......... 11,173 11,737 11,639 12,340 12,138
12/31/96 ......... 11,120 11,681 11,583 12,145 12,145
1/31/97 .......... 11,307 11,877 11,751 12,293 12,415
2/28/97 .......... 11,347 11,919 11,793 12,437 12,456
3/31/97 .......... 11,227 11,793 11,667 12,193 12,231
4/30/97 .......... 11,347 11,919 11,793 12,593 12,387
5/31/97 .......... 12,120 12,731 12,577 13,373 13,155
6/30/97 .......... 12,720 13,361 13,193 14,042 13,693
7/31/97 .......... 13,253 13,922 13,740 14,691 14,368
8/31/97 .......... 12,507 13,137 12,955 13,710 13,599
9/30/97 .......... 13,173 13,838 13,642 14,457 14,414
10/31/97 ......... 12,267 12,885 12,689 13,699 13,488
</TABLE>
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.
As shown on page 24, the performance of Class B shares will be greater than
or less than the performances shown for Class A shares and Class D shares, based
on the differences in sales charges and fees paid by shareholders. Past
performance is not indicative of future investment results.
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1997
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/97
- ------------ ---------- ---------
Cardinal Health (US) ........................... 32,500 32,500
Compaq Computers (US) .......................... 41,200 41,200
General Electric (US) .......................... 41,500 41,500
Heineken (Netherlands) ......................... 11,885 11,885
Hewlett-Packard (US) ........................... 35,300 35,300
Nokia (Finland) ................................ 29,055 29,055
PepsiCo (US) ................................... 74,500 74,500
Petroleo Brasileiro "Petrobras"
(Brazil) ................................... 81,000 81,000
Travelers (US) ................................. 40,900 40,900
Xerox (US) ..................................... 30,500 30,500
SHARES
--------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/97
- -------------- ---------- ---------
ABB (Switzerland) .............................. 1,626 --
Boston Scientific (US) ......................... 26,600 13,400
Empresas ICASociedad
Controladora (ADRs) (Mexico) ............... 134,000 --
First Data (US) ................................ 40,400 --
HFS (US) ....................................... 25,000 --
MGMGrand (US) .................................. 45,000 --
Rentokil (UK) .................................. 530,000(1) --
Telecomunicacoes Brasileiras
"Telebras" (ADRs) (Brazil) ................. 14,450 23,550
Telefonica del Peru (ADRs) (Peru) .............. 70,000 --
Television Broadcasting
(Hong Kong) ................................ 378,000 --
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 265,000 shares received as a result of a 2-for-1 stock split.
-----
25
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
COUNTRY ALLOCATION
AT OCTOBER 31, 1997
MSCI
WORLD
FUND INDEX
------- ------------
CONTINENTAL EUROPE 35.60% 20.78%
Austria ....................... -- 0.21
Belgium ....................... -- 0.61
Denmark ....................... -- 0.51
Finland ....................... 3.15 0.41
France ........................ 5.27 3.48
Germany ....................... 5.84 4.51
Hungary ....................... 2.78 --
Ireland ....................... 0.83 0.19
Italy ......................... 1.73 1.79
Netherlands ................... 5.58 2.72
Norway ........................ 1.53 0.29
Spain ......................... 3.19 1.21
Sweden ........................ 4.16 1.29
Switzerland ................... 1.54 3.56
JAPAN ............................. 9.62 14.06
LATIN AMERICA ..................... 5.30 --
Brazil ........................ 2.44 --
Mexico ........................ 2.86 --
PACIFIC ........................... 4.56 3.80
Australia ..................... 0.35 1.27
China ......................... 0.51 --
HongKong ...................... 0.77 1.39
Indonesia ..................... 0.35 --
Malaysia ...................... -- 0.52
New Zealand ................... -- 0.17
Singapore ..................... 1.43 0.45
South Korea ................... 0.22 --
Taiwan ........................ 0.55 --
Thailand ...................... 0.38 --
UNITED KINGDOM .................... 11.40 10.35
UNITED STATES ..................... 27.91 48.45
OTHER ............................. 1.91 2.56
India ......................... 1.07 --
Russia ........................ 0.84 --
Canada ........................ -- 2.56
OTHER ASSETS LESS LIABILITIES ..... 3.70 --
- ----------------------------------------------------------------
TOTAL 100.00% 100.00%
REGIONAL ALLOCATION
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Continental Europe .......................... 35.60%
United States ............................... 27.91%
United Kingdom .............................. 11.40%
Japan ....................................... 9.62%
Latin America ............................... 5.30%
Pacific ..................................... 4.56%
Other ....................................... 1.91%
Other Assets Less Liabilities ............... 3.70%
LARGEST INDUSTRIES
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Computer and Technology Related ............. 11.3% $21,707,434
Drugs and Health Care ....................... 10.1% $19,544,890
Consumer Goods and Services ................. 9.4% $18,019,699
Financial Services .......................... 8.5% $16,405,924
Telecommunications .......................... 8.5% $16,376,248
LARGEST PORTFOLIO HOLDINGS
At October 31, 1997
SECURITY VALUE
- ---------- ----------
Pfizer (US) ............................. $4,556,300
Microsoft (US) .......................... 4,391,887
L.M. Ericsson Telefon (Series B)
(Sweden) ............................ 4,306,355
Desc (ADRs) (Mexico) .................... 4,175,907
Adidas (Germany) ........................ 3,933,609
MBNA (US) ............................... 3,558,108
Porsche (Germany) ....................... 3,115,064
Pizza Express (UK) ...................... 3,054,010
Richter Gedeon (GDRs) (Hungary) ......... 2,976,000
Swissair (Switzerland) .................. 2,966,391
- -----
26
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
SHARES VALUE
--------- --------
COMMON STOCKS 96.30%
AUSTRALIA 0.35%
PACIFICA GROUP
Manufacturer of industrial
products, mainly automobile
components (Automotive
and Related) ................................ 215,300 $ 679,643
-----------
BRAZIL 2.44%
COMPANHIA ENERGETICA DE MINAS
GERAIS "CEMIG" (ADRS)
Provider of electrical utility services
(Electric and Gas Utilities) ................ 18,100 705,900
PETROLEO BRASILEIRO"PETROBRAS"
Oil and gas producer and
distributor (Resources) ..................... 81,000 1,609,049
TELECOMUNICACOES BRASILEIRAS
"TELEBRAS" (ADRS)
Provider of telecommunications
services (Telecommunications) ............... 23,550 2,384,437
-----------
4,699,386
-----------
CHINA 0.51%
HUANENG POWER INTERNATIONAL (ADRS)*
Developer and manufacturer
of coal-fired power plants
(Electric and Gas Utilities) ................ 45,000 990,000
-----------
FINLAND 3.15%
NOKIA
Developer and manufacturer
of mobile phones and networks
(Telecommunications) ........................ 29,055 2,531,684
OUTOKUMPU
Manufacturer of diversified
metal products (Industrial
Goods and Services) ......................... 90,770 1,347,359
RAISION TEHTAAT
Processor and marketer
of agricultural products
(Consumer Goods and Services) ............... 20,300 2,191,464
-----------
6,070,507
-----------
FRANCE 5.27%
ACCOR
Hotel operator and
provider of related services
(Entertainment and Leisure) ................. 13,558 2,516,012
CAP GEMINI
Provider of computer
consulting services (Computer
and Technology Related) ..................... 29,080 2,301,297
GENSET*
Biomedical research company
(Drugs and Health Care) ..................... 36,000 672,750
SGS-THOMSON MICROELECTRONICS*
Manufacturer of semiconductor
integrated circuits (Electronics) ........... 36,070 2,558,421
VALEO
Manufacturer of automobile
components (Automotive
and Related) ................................ 31,698 2,107,011
-----------
10,155,491
-----------
GERMANY 5.84%
ADIDAS
Manufacturer of sporting goods
(Consumer Goods and Services) ............... 27,080 3,933,609
LUFTHANSA
Airline services worldwide;
operator of Penta hotels
(Transportation) ............................ 128,000 2,244,509
METRO
Department store operator
(Retailing) ................................. 44,400 1,952,834
PORSCHE*
Manufacturer of luxury sports cars
(Automotive and Related) .................... 2,115 3,115,064
-----------
11,246,016
-----------
HONG KONG 0.77%
KWOON CHUNG BUS HOLDINGS
Provider of bus services
(Transportation) ............................ 1,800,000 541,397
NG FUNG HONG
Food wholesaler and distributor
(Consumer Goods and Services) ............... 1,000,000 937,904
-----------
1,479,301
-----------
HUNGARY 2.78%
MOL MAGYAR OLAJ-ES GAZIPARI
(GDRS)
Oil and gas producer and
distributor (Resources) ..................... 110,000 2,387,000
RICHTER GEDEON (GDRS)
Manufacturer of
pharmaceuticals and cosmetics
(Drugs and Health Care) ..................... 32,000 2,976,000
-----------
5,363,000
-----------
- ------------
See footnotes on page 31.
-----
27
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
SHARES VALUE
--------- --------
INDIA 1.07%
STATE BANK OF INDIA (GDRS)+
Provider of banking services
(Financial Services) ........................ 42,300 $ 756,113
VIDESH SANCHAR NIGAM (GDRS)+
Provider of international
telecommunications services
(Telecommunications) ........................ 100,000 1,312,500
-----------
2,068,613
-----------
INDONESIA 0.35%
GULF INDONESIA RESOURCES*
Developer and producer of
oil and natural gas (Resources) ............. 32,000 672,000
-----------
IRELAND 0.83%
ELAN (ADRS)*
Developer, manufacturer,
and marketer of drug
delivery systems (Drugs
and Health Care) ............................ 32,000 1,596,000
-----------
ITALY 1.73%
AEROPORTI DI ROMA
Manager, operator, and
developer of airfields and
terminals (Transportation) .................. 139,600 1,263,518
MEDIOLANUM*
Life insurer; provider of
a wide range of financial
services (Financial Services) ............... 124,000 2,075,803
-----------
3,339,321
-----------
JAPAN 9.62%
ASAHI DIAMOND INDUSTRIES
Manufacturer of diamond-tipped
tools (Manufacturing and
Industrial Equipment) ....................... 100 582
BELLSYSTEM 24
Telemarketer (Business Goods
and Services) ............................... 8,400 1,159,391
DAITEC
Developer of point-of-sale
systems for Nippon Oil Company
(Business Goods and Services) ............... 38,700 611,374
DDI
Provider of long distance and mobile
telecommunications services
(Telecommunications) ........................ 250 835,620
DIAMOND COMPUTER SERVICE
Provider of data processing
and software development
services (Computer and
Technology Related) ......................... 59,000 1,005,654
HIS
Travel agency specializing
in overseas and package tours
(Entertainment and Leisure) ................. 46,200 1,501,971
HOGY MEDICAL
Producer of disposable surgical
gowns and medical supplies
(Drugs and Health Care) ..................... 37,300 1,221,934
KEYENCE
Manufacturer of detection
devices and measuring control
equipment (Electronics) ..................... 9,500 1,421,801
KYOCERA
Supplier of semiconductor
packaging, capacitors, and
cellular components (Electronics) ........... 25,000 1,432,194
MEITEC
Provider of software engineering
services (Computer and
Technology Related) ......................... 59,100 1,744,450
NOMURA SECURITIES
Securities firm
(Financial Services) ........................ 140,000 1,629,667
ORIENTAL LAND
Operator of Tokyo Disneyland
(Entertainment and Leisure) ................. 17,000 883,429
SANYO SHINPAN FINANCE
Consumer finance company
(Financial Services) ........................ 29,000 1,584,186
SECOM
Security services pioneer
(Support Services) .......................... 23,000 1,487,819
SHIMACHU
Furniture retailer (Retailing) .............. 28,500 606,635
SOFTBANK
PC wholesaler (Computer
and Technology Related) ..................... 22,400 720,778
TSUTSUMI JEWELRY
Manufacturer and retailer
of jewelry (Retailing) ...................... 49,500 691,444
-----------
18,538,929
-----------
MEXICO 2.86%
DESC (ADRS)
Diversified product
manufacturer; financial
services provider (Diversified) ............. 123,274 4,175,907
- ------------
See footnotes on page 31.
- -----
28
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
SHARES VALUE
--------- --------
MEXICO (CONTINUED)
GRUPO IUSACELL (ADRS)*
Provider of wireless
telecommunications services
(Telecommunications) ........................ 73,600 $ 1,324,800
-----------
5,500,707
-----------
NETHERLANDS 5.58%
ELSEVIER
Global printer and publisher
of professional trade journals
and magazines (Publishing) .................. 117,615 1,841,035
GUCCI GROUP
Manufacturer and marketer
of apparel (Consumer Goods
and Services) ............................... 27,405 996,857
HEINEKEN
Brewery and soft drink producer
(Consumer Goods and Services) ............... 11,885 1,926,242
KONINKLIJKE KNP BT
Producer of paper and plastic
packaging products (Business
Goods and Services) ......................... 55,530 1,259,649
KONINKLIJKE VAN OMMEREN
Provider of logistic services
to marine transport industry
(Transportation) ............................ 49,615 1,769,691
PHILIPS ELECTRONICS
Consumer and industrial
electronics (Electronics) ................... 37,900 2,956,531
-----------
10,750,005
-----------
NORWAY 1.53%
TOMRA SYSTEMS
Provider of recycling systems
used mainly for beverage cans
(Business Goods and Services) ............... 115,000 2,944,356
-----------
RUSSIA 0.84%
TATNEFT (ADRS)
Oil and gas explorer and
producer (Resources) ........................ 11,000 1,614,258
-----------
SINGAPORE 1.43%
ADVANCED SYSTEMS AUTOMATION
Manufacturer of machines for
packaging integrated circuits
(Manufacturing and Industrial
Equipment) .................................. 340,000 660,362
DATACRAFT ASIA
Researcher, designer, and
producer of communications
hardware and software
(Telecommunications) ........................ 418,000 953,040
ELECTRONIC RESOURCES
Distributor of electronic
components and computer
peripherals (Electronics) ................... 500,000 552,206
WANT WANT HOLDINGS (CLASS A)*
Manufacturer of rice crackers
(Consumer Goods and Services) ............... 210,400 420,800
WANT WANT HOLDINGS*
Manufacturer of rice crackers
(Consumer Goods and Services) ............... 83,600 162,184
-----------
2,748,592
-----------
SOUTH KOREA 0.22%
SAMSUNG ELECTRONICS
Manufacturer of consumer
electronics and semiconductors
(Electronics) ............................... 11,382 214,835
SAMSUNG ELECTRONICS+
Manufacturer of consumer
electronics and semiconductors
(Electronics) ............................... 4,777 213,584
-----------
428,419
-----------
SPAIN 3.19%
AGUAS DE BARCELONA
Drinking water supplier; liquid
and solid waste management
(Consumer Goods and Services) ............... 38,875 1,549,569
SOL MELIA*
Hotel manager and franchise
company (Entertainment
and Leisure) ................................ 62,376 1,877,560
TABACALERA (CLASS A)
Manufacturer and marketer
of tobacco products (Tobacco) ............... 37,990 2,726,767
-----------
6,153,896
-----------
SWEDEN 4.16%
AUTOLIV (ADRS)
Manufacturer and worldwide
retailer of automobile airbags
and other safety equipment
(Automotive and Related) .................... 54,950 2,166,679
KALMAR INDUSTRIES
Manufacturer of forklifts and
special lift trucks (Manufacturing
and Industrial Equipment) ................... 83,600 1,459,046
- ------------
See footnotes on page 31.
-----
29
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
SHARES VALUE
--------- --------
SWEDEN (CONTINUED)
KALMAR INDUSTRIES (RIGHTS)*
Manufacturer of forklifts and
special lift trucks (Manufacturing
and Industrial Equipment) ................... 83,600 $ 73,509
L.M. ERICSSON TELEFON (SERIES B)
Manufacturer of telecommu-
nications equipment
(Telecommunications) ........................ 97,950 4,306,355
-----------
8,005,589
-----------
SWITZERLAND 1.54%
SWISSAIR
International airline operator
(Transportation) ............................ 2,221 2,966,391
-----------
TAIWAN 0.55%
HOTUNG INVESTMENT HOLDINGS*
Investor in unlisted
technology-related
companies (Financial Services) .............. 2,400,000 570,000
SYNNEX TECHNOLOGY INTERNATIONAL (GDRS)*
Manufacturer of PCs and
peripherals (Computer and
Technology Related) ......................... 28,400 495,580
-----------
1,065,580
-----------
THAILAND 0.38%
SERM SUK
Manufacturer and distributor
of Pepsi-Cola drinks under
franchise (Consumer Goods
and Services) ............................... 50,500 737,739
-----------
UNITED KINGDOM 11.40%
AIRTOURS
Tour operator (Entertainment
and Leisure) ................................ 40,000 792,488
BODYCOTE INTERNATIONAL
Diversified manufacturer and
distributor (Industrial Goods
and Services) ............................... 100,000 1,721,525
BRITISH BIOTECH
Biotechnology company
(Drugs and Health Care) ..................... 300,000 510,175
CAPITAL RADIO
Radio broadcasting company
(Entertainment and Leisure) ................. 150,000 1,181,192
CRT GROUP
Provider of training and
recruitment services; publisher
of multimedia products
(Support Services) .......................... 350,000 1,888,232
DIXONS GROUP
Consumer electronics retailer
(Retailing) ................................. 90,000 1,047,240
GRANADA GROUP
Television group with additional
leisure interests including hotels
(Entertainment and Leisure) ................. 128,800 1,769,543
HALMA
Producer of fire detection and
security equipment (Electronics) ............ 503,066 1,003,006
LADBROKE GROUP
Leisure group with interests
in hotels and gaming
(Entertainment and Leisure) ................. 500,000 2,232,537
PARITY
Provider of software engineering
and consulting services
(Computer and
Technology Related) ......................... 300,000 2,885,125
PIZZA EXPRESS
Operator of restaurant
chain (Restaurants) ......................... 245,000 3,054,010
ROLLS ROYCE
Aerospace; power generation,
transmission, and distribution
systems (Aerospace) ......................... 450,000 1,581,415
WPP GROUP
Provider of worldwide
marketing services, including
advertising, public relations,
and market research (Business
Goods and Services) ......................... 500,000 2,286,989
-----------
21,953,477
-----------
UNITED STATES 27.91%
ADAPTEC*
Manufacturer of computer
input-output systems (Computer
and Technology Related) ..................... 20,000 970,625
AMERICAN INTERNATIONAL GROUP
Commercial and industrial
insurer (Financial Services) ................ 24,750 2,526,047
BIOGEN*
Developer of genetically
engineered drugs (Drugs and
Health Care) ................................ 28,000 934,500
BOSTON SCIENTIFIC*
Developer, producer, and
marketer of medical devices
(Drugs and Health Care) ..................... 13,400 609,700
- ------------
See footnotes on page 31.
- -----
30
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
SHARES VALUE
--------- --------
UNITED STATES (CONTINUED)
CARDINAL HEALTH
Distributor of pharmaceutical
products (Drugs and Health Care) ............ 32,500 $ 2,413,125
COMPAQ COMPUTERS
Global PC manufacturer
(Computer and Technology
Related) .................................... 41,200 2,626,500
DAYTON HUDSON
General merchandise retailer,
specializing in large stores
(Retailing) ................................. 19,000 1,193,437
DISNEY, WALT
Theme parks and hotel operator;
film production (Entertainment
and Leisure) ................................ 25,000 2,056,250
DONALDSON, LUFKIN & JENRETTE
Integrated investment and
merchant banker and broker
(Financial Services) ........................ 12,000 843,000
GENERAL ELECTRIC
Supplier of electrical equipment
and other industrial and
consumer products (Diversified) ............. 41,500 2,679,344
HEWLETT-PACKARD
Manufacturer of computers
and peripherals (Computer
and Technology Related) ..................... 35,300 2,177,569
INTEL
Manufacturer of microprocessors
and FLASH memory circuits
(Computer and Technology
Related) .................................... 31,000 2,387,969
INTERPUBLIC GROUP OF COMPANIES
Global advertising through
agencies in various countries
(Business Goods and Services) ............... 55,350 2,629,125
MBNA
Issuer of credit cards; deposit,
loan, and transaction processing
(Financial Services) ........................ 135,225 3,558,108
MERCK
Developer and manufacturer
of pharmaceuticals (Drugs
and Health Care) 18,600 1,660,050
MICROSOFT*
Producer of microcomputer
software (Computer and
Technology Related) ......................... 33,800 4,391,887
PEPSICO
Manufacturer and marketer
of soft drinks and consumer
products (Consumer Goods
and Services) ............................... 74,500 2,742,531
PFIZER
Ethical drugs; hospital products;
and specialty chemicals
(Drugs and Health Care) 64,400 4,556,300
PROCTER & GAMBLE
Manufacturer and distributor
of household and personal
care products (Consumer Goods
and Services) ............................... 35,600 2,420,800
TRAVELERS
Provider of broad-based financial
services (Financial Services) ............... 40,900 2,863,000
UNITED HEALTHCARE
Owner and manager of HMO
and specialty managed care
centers (Drugs and Health Care) ............. 51,700 2,394,356
WORLDCOM*
Provider of interstate long distance
telecommunications services
(Telecommunications) ........................ 81,200 2,727,812
XEROX
Developer, manufacturer, and
marketer of office automation
products (Business Goods
and Services) ............................... 30,500 2,419,031
-----------
53,781,066
-----------
TOTAL INVESTMENTS 96.30%
(Cost $155,631,405) ............................ 185,548,282
OTHER ASSETS
LESS LIABILITIES 3.70% ........................ 7,122,961
-----------
NET ASSETS 100.00% ............................ $192,671,243
============
- ----------
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
-----
31
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
PERFORMANCE REVIEW
Seligman Henderson Global Smaller Companies Fund posted a total return of 8.28%
based on the net asset value of Class A shares for the 12 months ended October
31, 1997. In the same period, the Fund's peers, as measured by the Lipper Global
Small Cap Funds Average, had a total return of 11.43%. This compares to a total
return of 13.36% for small-capitalization stocks as a group, as represented by
the Salomon Brothers World Extended Market Index (Salomon Brothers World EM
Index).
The relative underperformance of the Fund was a result of its underweighted
position in the United States, its larger exposure to Japan, and its policy of
focusing investments in developed rather than emerging markets.
Throughout the fiscal year, investors were focused on liquid issues, which tend
to be large-capitalization stocks. As a result, small-cap stocks underperformed
relative to large-cap stocks. Nonetheless, there were periods of regional
small-cap outperformance -- the first calendar quarter of 1997 in the United
Kingdom and the second and third calendar quarters of 1997 in the United States.
October proved to be the most volatile month for world equities in a decade, as
equity markets everywhere experienced important declines as a result of the
currency crisis in the Pacific region.
PORTFOLIO STRATEGY
UNITED STATES
o In the US, the stock market was fueled by higher-than-expected economic
growth and corporate earnings, with lower-than-expected inflation. This
environment favored large-cap stocks. However, beginning in May, small-cap
stocks' favorable earnings reports began to be noticed. This, combined with
their lower valuations, shifted the spotlight onto the small-cap arena.
Small-caps began to outperform large-caps, with sustained outperformance
beginning in August.
THE FUND'S WEIGHTING IN THE US INCREASED FROM 30.0% 12 MONTHS AGO TO A
CURRENT WEIGHTING OF 42.7%. OVER THE FISCAL YEAR, WE CONTINUED TO EMPHASIZE
THE BUSINESS SERVICES INDUSTRY, DUE TO CORPORATE AMERICA'S GROWING RELIANCE
ON OUTSOURCING. AS THE ECONOMIC EXPANSION CREATED NEW JOB OPPORTUNITIES, WE
ALSO INCREASED OUR POSITIONS IN COMPANIES THAT PROVIDE TEMPORARY STAFFING
SERVICES, ADDING TO AccuStaff AND INVESTING IN Alternative Resources.
UNITED KINGDOM
o In the UK, the equity market had much to digest in the last 12 months: the
first change in government in 18 years; a strong currency; and rising
interest rates. Sterling's strength in the first calendar quarter of 1997
dampened the performance of large-cap stocks more than that of
domestically-oriented small-cap issues. From April through the end of
October 1997, however, the performance of small-cap stocks was
disappointing.
HAVING INCREASED THE FUND'S EXPOSURE TO THE UK AT THE END OF 1996, THE FUND
BENEFITED FROM THE RALLY THAT TOOK PLACE AT THE BEGINNING OF 1997. WE
CONTINUED TO EMPHASIZE COMPANIES WITH ABOVE-MARKET EARNINGS GROWTH, ADDING
Games Workshop Group, A MANUFACTURER AND RETAILER OF SPECIALTY GAMES, AND
Electronics Boutique, A RETAILER OF ELECTRONIC GAMES. AT OCTOBER 31, 1997,
THE FUND'S WEIGHTING IN THE UK STOOD AT 18.2%, COMPARED TO 14.3% 12 MONTHS
AGO.
- --------------------------------------------------------------------------------
[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) ANDREW MCNALLY, WILLIAM GARNETT, HEATHER
MANNERS, ANDREW STACK, (SEATED) MIRANDA RICHARDS, IAIN C. CLARK (PORTFOLIO
MANAGER)
[PHOTO]
US TEAM: (FROM LEFT) RICK RUVKUN, SONIA THOMAS (ADMINISTRATIVE ASSISTANT), BRUCE
ZIRMAN, HILARY SHANE, TED HILLENMEYER, (SEATED) ARSEN MRAKOVCIC (PORTFOLIO
MANAGER)
FUND OBJECTIVE
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.
- --------------------------------------------------------------------------------
- -----
32
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
CONTINENTAL EUROPE
o In Continental Europe, investors focused on large, multinational companies,
which consequently outperformed small companies during the Fund's fiscal
year. Even so, small-cap stocks in this region have offered attractive
returns, gaining 18.0% in the 12 months ended October 31, 1997.
AS ECONOMIC MOMENTUM MOVES FROM THE EXPORT SECTORS TO THE DOMESTIC SECTORS
OF THESE ECONOMIES, THE LOWER VALUATIONS AND HIGHER EARNINGS POTENTIAL OF
SMALL-CAPS SHOULD BEGIN TO ATTRACT MORE INVESTOR ATTENTION. CONCERNS ABOUT
THE IMPACT OF THE PROBLEMS IN THE PACIFIC REGION ON THE EXPORT EARNINGS OF
LARGE COMPANIES SHOULD ALSO SUPPORT SMALLER COMPANIES. AT OCTOBER 31, 1997,
THE FUND HAD A WEIGHTING OF 25.7% IN CONTINENTAL EUROPE, VIRTUALLY
UNCHANGED FROM 26.5% ON OCTOBER 31, 1996. WE PLAN TO CONTINUE EMPHASIZING
THIS REGION IN THE YEAR AHEAD.
JAPAN
o The index for smaller companies in Japan fell 34.0% in the past 12 months.
This compares to a decline in the main market index, the Nikkei, of 24.0%.
Confidence in Japan's economic recovery evaporated as the year progressed
and was further hindered by the imposition of a higher consumption tax.
This particularly affected the more domestically-oriented small-cap stocks.
THE FUND'S WEIGHTING IN JAPAN, WHICH WAS 17.8% AT OCTOBER 31, 1996,
DECLINED TO 8.2% BY OCTOBER 31, 1997. NEW PURCHASES FOCUSED ON THE MORE
DEFENSIVE SECTORS OF THE MARKET SUCH AS HEALTH CARE AND FOOD-RELATED
STOCKS, AND INCLUDED Fujicco, Hogy Medical, Sundrug, AND Yokohama Reito.
PACIFIC REGION
o In the Pacific region, equity markets rose during the first six months of
the Fund's fiscal year. However, the devaluation of the Thai baht
precipitated a crisis that spread throughout the region in the second half
of the Fund's fiscal year, resulting in substantial reductions in the
prices of large and small companies alike.
WE BEGAN TO SIGNIFICANTLY REDUCE THE FUND'S WEIGHTING IN THE PACIFIC REGION
IN JUNE 1997, AND IT NOW STANDS AT 2.4% FROM 7.1% 12 MONTHS AGO.
SUMMARY
Globally, smaller companies have lower valuations and stronger projected
earnings growth than larger companies. The unpopularity of small companies in
the last 12 months reflected investors' preoccupation with liquidity and concern
that, in an era of low inflation, large companies would tend to have more
pricing power. However, we believe that the fundamentals of smaller companies
will eventually attract investor attention. This certainly happened in the US,
where smaller companies outperformed in May, August, and September. Further, in
the market turmoil of October, smaller companies did not decline as much as
large companies. While it is doubtful that this outperformance represents a
sentiment change toward smaller companies, we continue to believe that the
attractive valuations of smaller companies will eventually be recognized.
Note: All figures are in US dollar terms. All specific market performance
information included in the Investment Report is taken from the Salomon Brothers
World EM country index for the 12-month period ended October 31, 1997, unless
otherwise stated.
-----
33
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------------
CLASS A CLASS B CLASS D
SINCE SINCE SINCE
SIX ONE FIVE INCEPTION INCEPTION INCEPTION
MONTHS* YEAR YEARS 9/9/92 4/22/96 5/3/93
---------- ---------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge 5.40% 3.11% 19.49% 18.92% n/a n/a
Without Sales Charge 10.62 8.28 20.67 20.07 n/a n/a
CLASS B**
With CDSL+ 5.18 2.39 n/a n/a 3.56% n/a
Without CDSL 10.18 7.39 n/a n/a 6.11 n/a
CLASS D**
With 1% CDSL 9.26 6.47 n/a n/a n/a n/a
Without CDSL 10.26 7.47 n/a n/a n/a 17.57%
LIPPER GLOBAL SMALL CAP
FUNDS AVERAGE*** 10.85 11.43 15.98 15.53++ 6.66+++ 13.87#
MSCI WORLD INDEX*** 8.78 17.25 15.79 14.44++ 13.24+++ 13.69#
SALOMON BROTHERS
WORLD EM INDEX*** 13.69 13.36 14.12 13.16++ 7.98+++ 11.39#
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
OCTOBER 31, 1997 APRIL 30, 1997 OCTOBER 31, 1996
------------------- -------------- -------------------
<S> <C> <C> <C>
CLASS A $15.62 $14.12 $15.14
CLASS B 15.04 13.65 14.72
CLASS D 15.05 13.65 14.72
</TABLE>
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1997
PAID $0.730
REALIZED 0.611##
UNREALIZED 0.861###
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.
- --------------------------------------------------------------------------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume the investment of
dividends and capital gain distributions. Returns for Class A shares are
calculated with and without the effect of the initial 4.75% maximum sales
charge. Returns of Class B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales load ("CDSL"), charged
only on 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.
*** The Lipper Global Small Cap Funds Average, the Morgan Stanley Capital
International World Index (MSCI World Index), and the Salomon Brothers
World Extended Market Index (Salomon Brothers World EM Index) are
unmanaged benchmarks that assume reinvestment of dividends. The Lipper
Global Small Cap Funds Average excludes the effect of sales charges, and
the MSCI World Index and the Salomon Brothers World EM Index exclude the
effect of fees and sales charges. The monthly performance of the Lipper
Global Small Cap Funds Average is used in the Performance and Portfolio
Overview. Investors cannot invest directly in an average or an index.
+ The CDSL is 5% for periods of one year or less, and 4% since inception.
++ From August 31, 1992.
+++ From April 30, 1996.
# From April 30, 1993.
## On November 21, 1997, a capital gain of $0.627 per share was paid to
shareholders.
### Represents the per share amount of net unrealized appreciation of
portfolio securities as of October 31, 1997.
- -----
34
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
This chart compares a $10,000 hypothetical investment made in Seligman
Henderson Global Smaller Companies Fund Class A shares, with and without the
initial 4.75% maximum sales charge, since the commencement of investment
operations on September 9, 1992, through October 31, 1997, to a $10,000
hypothetical investment made in the Lipper Global Small Cap Funds Average, the
Morgan Stanley Capital International World Index (MSCI World Index), and the
Salomon Brothers World Extended Market Index (Salomon Brothers World EM Index)
for the same period. It is important to keep in mind that the Indices exclude
the effect of fees or sales charges, and the Average excludes the effect of
sales charges.
Seligman Henderson Global Smaller Companies Fund will no longer be compared
to the MSCI World Index after October 31, 1997, as this index measures the
performance of more than 1,460 securities around the world, with capitalizations
of all sizes. Your Fund invests primarily in smaller companies and the Manager
believes that the Salomon Brothers World EM Index is a more appropriate
benchmark for your Fund, as it reflects the performance of small-capitalization
stocks. The Salomon Brothers World EM Index reflects the performance of the
bottom 20% capitalizations within the Salomon Brothers World Broad Market Index,
which represents the universe of global securities with market capitalizations
greater than US $100 million. Therefore, your Fund will continue to be compared
to the Salomon Brothers World EM Index and the Lipper Global Small Cap Funds
Average.
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Lipper
Salomon Global
Bros. Small
With Without MSCI EMI Company
Sales Sales World World Funds
Charge Charge Index Index Average
------ ------ ----- ----- -------
9/9/92 ....... 9520 10000 10000 10000 10000
10/31/92 ..... 9533 10014 9644 9787 10053
1/31/93 ...... 10528 11059 9934 10523 10999
4/30/93 ...... 11343 11915 11263 11655 11746
7/31/93 ...... 12225 12841 11667 12252 12443
10/31/93 ..... 13334 14006 12313 12822 14028
1/31/94 ...... 15150 15914 12994 13511 15209
4/30/94 ...... 14895 15645 12659 13346 14588
7/31/94 ...... 14263 14982 12904 13383 14270
10/31/94 ..... 16037 16846 13318 13609 15072
1/31/95 ...... 14757 15501 12678 12860 13817
4/30/95 ...... 16461 17291 13961 13807 14713
7/31/95 ...... 18567 19504 14789 14831 16557
10/31/95 ..... 19260 20231 14654 14546 16461
1/31/96 ...... 19922 20926 15897 15482 17240
4/30/96 ...... 22540 23677 16652 16879 19143
7/31/96 ...... 21930 23036 16167 15879 18209
10/31/96 ..... 22526 23661 17121 16710 18929
1/31/97 ...... 23205 24375 18015 17258 19911
4/30/97 ...... 22049 23161 18455 16662 19028
7/31/97 ...... 25016 26277 21529 19110 21750
10/31/97 ..... 24391 25621 20074 18943 21092
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.
As shown on page 34, the performances of Class B and D shares will be
greater than or less than the performance shown for Class A shares, based on the
differences in sales charges and fees paid by shareholders. Past performance is
not indicative of future investment results.
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1997
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/97
- ------------ ---------- ---------
Ceridian (US) .............................. 129,700 354,700
Cognex (US) ................................ 266,700 266,700
Jacor Communications (US) .................. 147,400 147,400
Kemet (US) ................................. 311,700 311,700
Lattice Semiconductor (US) ................. 104,800 104,800
Medallion Financial (US) ................... 300,000 300,000
Selecta Group (Switzerland) ................ 47,255 47,255
Sydbank (Denmark) .......................... 109,700 109,700
Tag Heuer (ADRs)(Switzerland) .............. 36,870 36,870
Telinfo (Belgium) .......................... 119,040 119,040
SHARES
--------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/97
- -------------- ---------- ---------
Berg Electronics (US) ...................... 290,400(1) 175,200
CalEnergy (US) ............................. 192,400 207,600
Electro Scientific Industries (US) ......... 120,000 --
Fokus Bank (Norway) ........................ 552,100 --
LoJack (US) ................................ 500,000 --
Maxim Integrated Products (US) ............. 175,000 --
Memtec (ADRs) (Australia) .................. 410,000 --
Mutual Risk Management (US) ................ 222,132(2) --
Waters (US) ................................ 161,100 107,900
Watson Pharmaceuticals (US) ................ 345,400 129,200(3)
Largest portfolio changes from the previous period to current period are based
on cost of purchases and proceeds from sales of securities.
(1) Includes 215,600 shares received as a result of a 2-for-1 stock split.
(2) Includes 87,066 shares received as a result of a 2-for-1 stock split.
(3) Includes 64,600 shares received as a result of a 2-for-1 stock split.
-----
35
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
COUNTRY ALLOCATION
AT OCTOBER 31, 1997
SALOMON
BROTHERS
WORLD
FUND EM INDEX
------- ------------
CONTINENTAL EUROPE .................... 25.65% 15.90%
Austria ........................... 0.71 0.11
Belgium ........................... 0.60 0.45
Denmark ........................... 1.98 0.32
Finland ........................... 2.97 0.39
France ............................ 4.34 2.36
Germany ........................... 3.65 2.98
Ireland ........................... -- 0.23
Italy ............................. 0.91 1.13
Netherlands ....................... 3.18 2.25
Norway ............................ 0.87 0.32
Spain ............................. -- 0.86
Sweden ............................ 3.54 1.24
Switzerland ....................... 2.90 3.26
JAPAN ................................. 8.19 9.32
PACIFIC ............................... 2.42 3.40
Australia ......................... 0.88 1.36
China ............................. 0.08 --
Hong Kong ......................... 0.72 1.32
Indonesia ......................... 0.03 --
Malaysia .......................... 0.08 0.37
New Zealand ....................... -- 0.11
Singapore ......................... 0.33 0.24
Taiwan ............................ 0.20 --
Thailand .......................... 0.10 --
UNITED KINGDOM ........................ 18.15 11.34
UNITED STATES ......................... 42.71 57.43
OTHER ................................. 1.24 2.61
Canada ............................ 0.71 2.61
Chile ............................. 0.10 --
India ............................. 0.21 --
Israel ............................ 0.22 --
OTHER ASSETS LESS LIABILITIES ......... 1.64 --
- --------------------------------------------------------------------------------
TOTAL ................................. 100.00% 100.00%
REGIONAL ALLOCATION
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
United States .............................. 42.71%
Continental Europe ......................... 25.65%
United Kingdom ............................. 18.15%
Japan ...................................... 8.19%
Pacific .................................... 2.42%
Other ...................................... 1.24%
Other Assets Less Liabilities .............. 1.64%
LARGEST INDUSTRIES
AT OCTOBER 31, 1997
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Percent
of Net
Assets
--------
Manufacturing ........................... 11.1% $117,075,585
Business ................................ 10.2% $107,057,131
Retailing ............................... 6.9% $ 72,061,609
Consumer Goods and Services ............. 6.8% $ 71,833,010
Construction and Property ............... 6.6% $ 69,089,312
LARGEST PORTFOLIO HOLDINGS
AT OCTOBER 31, 1997
SECURITY VALUE
- ---------- ------------
Ashtead Group (UK) ........................................ $15,035,802
Ceridian (US) ............................................. 13,855,469
FactSet Research Systems (US) ............................. 13,343,750
AccuStaff (US) ............................................ 13,287,275
Budget Group (US) ......................................... 12,250,000
Parity (UK) ............................................... 11,820,357
Pizza Express (UK) ........................................ 11,434,464
CMG (Netherlands) ......................................... 11,354,198
Tarkett (Germany) ......................................... 11,227,693
Trinity International Holdings (UK) ....................... 9,955,792
- -----
36
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
COMMON STOCKS 97.70%
AUSTRALIA 0.88%
AUSTRALIA NATIONAL INDUSTRIES
Manufacturer and distributor
of castings and forgings, and
specialty steels (Industrial
Goods and Services) ......................... 1,173,000 $ 1,176,941
BRISTILE*
Manufacturer of building
and construction products
(Construction and Property) ................. 243,280 241,537
CSL
Developer, manufacturer,
and marketer of human and
veterinary pharmaceutical and
diagnostic products (Medical
Products and Technology) .................... 110,620 699,092
FUTURIS
Mini-conglomerate with interests
in automobile components, building
materials, and financial services
(Automotive Parts
Manufacturing) .............................. 1,049,822 1,222,769
HIH WINTERTHUR INTERNATIONAL HOLDINGS
General insurance provider
(Financial Services) ........................ 599,800 1,115,252
JUPITERS
Casino hotel operator
(Leisure and Hotels) ........................ 610,000 1,121,377
SAVAGE RESOURCES
Explorer and producer of
diversified minerals (Resources) ............ 1,559,000 896,975
SIMSMETAL
Processor and resaler of scrap
metal (Metals) .............................. 203,000 1,139,480
SKILLED ENGINEERING
Provider of personnel
placement and outsourcing
services (Business Services) ................ 627,734 585,798
HENRY WALKER GROUP
Provider of civil engineering
and mining services
(Support Services) .......................... 738,500 1,114,062
-----------
9,313,283
-----------
AUSTRIA 0.71%
BAU HOLDINGS (VOTING PREFERENCE SHARES)
Construction and civil engineering
(Construction and Property) ................. 103,250 5,114,630
BAU HOLDINGS
Construction and civil engineering
(Construction and Property) ................. 37,894 2,355,003
-----------
7,469,633
-----------
BELGIUM 0.60%
TELINFO
Developer of telecommunications
networks for business
(Telecommunications) 119,040 6,361,400
TELINFO (RIGHTS)*
Developer of telecommunications
networks for business
(Telecommunications) 18,900 1,060
-----------
6,362,460
-----------
CANADA 0.71%
FINNING INTERNATIONAL
Lessor of construction
equipment (Construction and
Property) ................................... 250,000 3,351,658
TARRAGON OIL AND GAS*
Explorer, developer, and producer
of oil and gas (Resources) .................. 370,000 4,120,589
-----------
7,472,247
-----------
CHILE 0.10%
DISTRIBUCION Y SERVICIO (ADRS)*
Supermarket operator (Retailing) ............ 58,000 1,018,625
-----------
CHINA 0.08%
QINGLING MOTORS
Manufacturer of lightweight
trucks (Automotive Parts
Manufacturing) ................................. 1,363,000 890,446
-----------
DENMARK 1.98%
DANSKE TRAELASTKOMPAGNI
Timber supply company
(Construction and Property) ................. 85,981 7,859,252
SYDBANK
Commercial financial services
provider (Financial Services) ............... 109,700 5,672,699
THORKILD KRISTENSEN
Property development
(Construction and Property) ................. 72,983 5,938,541
THORKILD KRISTENSEN*
Property development
(Construction and Property) ................. 17,328 1,409,959
-----------
20,880,451
-----------
- -------------------
See footnotes on page 48.
-----
37
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
FINLAND 2.97%
KCI KONECRANES INTERNATIONAL
Manufacturer of cranes and
other heavy-duty lifting
equipment (Capital Goods) ................... 91,900 $ 3,454,621
NOKIAN TYRES*
Manufacturer of tires
(Automotive Parts Manufacturing) ............ 119,506 3,363,511
RAUMA
Manufacturer of forestry-related
machinery (Capital Goods) ................... 453,550 8,481,002
TAMRO
Pharmaceutical distributor for
Scandinavia and the Baltics
(Drugs and Health Care) ..................... 1,487,230 9,174,415
VALMET
Manufacturer of paper and
pulp machinery (Capital Goods) .............. 433,290 6,765,719
-----------
31,239,268
-----------
FRANCE 4.34%
ASSYSTEM
Global industrial consultant for
the nuclear, steel, oil, automobile,
space, and transportation industries
(Industrial Goods and Services) ............. 112,657 3,270,244
CENTRALE POUR L'INDUSTRIE
Diversified holding company with
interests in financial services and
insurance (Financial Services) .............. 5,743 319,527
ECIA
Manufacturer of automobile
components (Automotive Parts
Manufacturing) .............................. 43,848 7,235,456
L'EUROPEENNE D'EXTINCTEURS++
Manufacturer and distributor of
fire extinguishers (Manufacturing) .......... 142,402 9,497,650
IMS INTERNATIONAL METAL SERVICE
Distributor and broker of specialized
metal products (Metals) ..................... 124,070 1,811,491
MONTUPET
Manufacturer of automobile
components (Automotive Parts
Manufacturing) .............................. 32,068 3,629,326
REXEL
European electrical distributor
(Electrical Distribution) ................... 6,900 1,824,119
RUBIS
Chemical storage and distribution
company (Transportation) .................... 79,799 1,813,159
SYLEA
Manufacturer of automobile
components (Automotive Parts
Manufacturing) .............................. 86,233 7,599,000
TECHNIP
Engineering contractor
(Construction and Property) ................. 33,090 3,487,702
VIRBAC
Manufacturer of veterinary
drugs and products
(Veterinary Products) ....................... 66,532 5,159,364
-----------
45,647,038
-----------
GERMANY 2.99%
GERRY WEBER INTERNATIONAL*
Designer and manufacturer
of ladies' apparel (Manufacturing) .......... 4,281 132,546
HORNBACH BAUMARKT
Large home improvement and
garden center retailer (Retailing) .......... 118,090 3,485,396
HUCKE
Manufacturer of textiles and
clothing (Manufacturing) .................... 256,805 5,944,732
MOEBEL WALTHER
Retailer of furniture and related
products (Retailing) ........................ 109,770 4,446,830
PLETTAC
Manufacturer of scaffolding,
lightweight construction
sheds, and related products
(Construction and Property) ................. 33,913 6,172,423
PLETTAC (RIGHTS)*
Manufacturer of scaffolding,
lightweight construction
sheds, and related products
(Construction and Property) ................. 33,863 29,396
TARKETT
Manufacturer and distributor
of hardwood flooring
(Consumer Goods and Services) ............... 455,420 11,227,693
-----------
31,439,016
-----------
HONG KONG 0.72%
BEIJING DATANG POWER GENERATION*
Generator and distributor of
electric power (Electric Utilities) ......... 1,347,000 679,599
ESPRIT HOLDINGS
Retail and wholesale distributor
of high-quality fashion products
(Retailing) ................................. 1,511,000 537,548
- -------------------
See footnotes on page 48.
- -----
38
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
HONG KONG (CONTINUED)
JARDINE INTERNATIONAL MOTOR HOLDINGS
Seller and servicer of cars with
operations in many countries
(Retailing) ................................. 1,903,000 $ 1,378,629
JOHNSON ELECTRIC HOLDINGS
Designer, manufacturer, and
marketer of micromotors
(Electronics) ............................... 272,000 742,458
KWOON CHUNG BUS HOLDINGS
Provider of bus services
(Transportation) ............................ 1,472,000 442,743
LI & FUNG
Export trader and wholesale
distributor of consumer products
(Consumer Goods and Services) ............... 1,571,000 1,575,065
SOUTH CHINA MORNING POST
English language newspaper
(Media) ..................................... 2,569,000 2,226,688
-----------
7,582,730
-----------
INDIA 0.21%
GUJURAT AMBUJA CEMENT (GDRS)
Cement producer
(Building Materials) ........................ 260,000 2,190,500
-----------
INDONESIA 0.03%
KAWASAN INDUSTRI JABABEKA
Developer of industrial estates
and facilities (Construction
and Property) ............................... 830,000 365,499
---------
ISRAEL 0.22%
ZAG INDUSTRIES*
Designer, developer, and
manufacturer of plastic consumer
products (Manufacturing) .................... 220,000 2,268,750
---------
ITALY 0.91%
LA DORIA++
Producer of food, specializing
in fruits, fruit juices, and canned
tomatoes (Consumer Goods
and Services) ............................... 2,252,166 6,478,379
INDUSTRIE NATUZZI (ADRS)+
Manufacturer of leather
furniture (Manufacturing) ................... 127,380 2,850,128
INSTRUMENTATION LABORATORIES (ADRS)*
Developer, manufacturer and
distributor of in vitro diagnostic
instruments (Medical Products
and Technology) ............................. 95,500 250,687
-----------
9,579,194
-----------
JAPAN 8.19%
AIYA
Operator of restaurant chain
(Restaurants) ............................... 121,000 1,146,919
AOYAMA TRADING
Retailer of clothing (Retailing) ............ 84,000 2,255,924
ASAHI DIAMOND INDUSTRIES
Manufacturer of diamond-tipped
tools (Manufacturing) ....................... 166,670 970,059
ASATSU
Advertising agency (Advertising) ............ 90,100 1,872,869
DANTO
Manufacturer of wall and floor
tiles (Building Materials) .................. 132,000 987,778
ENPLAS
Manufacturer of electronic
components and engineering
plastics (Electronics) ...................... 39,000 518,833
FORVAL
Seller of telephones
(Telecommunications) ........................ 77,000 1,235,636
FUJI FIRE AND MARINE INSURANCE
Non-life insurance firm
(Financial Services) ........................ 832,000 2,656,423
FUJICCO
Food manufacturer (Consumer
Goods and Services) ......................... 131,300 1,179,047
FUJITSU BUSINESS SYSTEMS
Distributor of computer
equipment (Business Services) ............... 105,000 2,147,668
GLORY KOGYO
Manufacturer and major exporter
of currency-handling machines
(Manufacturing) ............................. 153,000 2,506,111
HIS
Travel agency specializing in
overseas and package tours
(Leisure and Hotels) ........................ 40,700 1,323,165
HIGASHI NIHON HOUSE
Home builder (Construction
and Property) ............................... 252,000 1,885,757
HITACHI INFORMATION SYSTEMS
Leading data processing firm
(Computer Software) ......................... 134,000 1,325,850
HITACHI MEDICAL
Manufacturer of medical
equipment (Medical Products
and Technology) ............................. 171,000 1,734,597
- -------------------
See footnotes on page 48.
-----
39
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
JAPAN (CONTINUED)
HOGY MEDICAL
Producer of disposable surgical
gowns and medical supplies
(Medical Products and
Technology) ................................. 20,000 $ 655,192
HOKKAI CAN
Manufacturer of cans for the
food industry (Manufacturing) ............... 366,000 1,110,751
HOKUSHIN
Producer of fiber board
(Manufacturing) ............................. 264,000 932,901
HORIBA INSTRUMENTS
Manufacturer of instruments
and analyzers (Electronics) ................. 178,000 2,012,805
ICHIYOSHI SECURITIES
Kansai-based securities
business (Financial Services) ............... 740,000 1,433,608
IINO KAIUN*
Shipping company
(Transportation) ............................ 825,000 1,852,083
JAPAN INFORMATION PROCESSING SERVICE
Computer software developer
(Computer Software) ......................... 74,450 804,731
JOSHIN DENKI
Budget electrical appliance
retailer (Retailing) ........................ 196,000 855,575
KENTUCKY FRIED CHICKEN
Fast food restaurants
(Restaurants) ............................... 102,000 1,094,038
KISSEI PHARMACEUTICAL
Manufacturer, seller, importer,
and exporter of medical products
(Drugs and Health Care) ..................... 62,000 1,010,393
KOMATSU SEIREN
Printer of long-staple fabrics
(Manufacturing) ............................. 194,000 1,572,711
KOMORI
Manufacturer of offset printing
machines (Capital Goods) .................... 133,000 2,432,859
MASPRO DENKOH
Manufacturer of reception-related
telecommunications equipment
(Telecommunications) ........................ 123,100 1,248,707
MITSUBISHI CABLE INDUSTRIES
Manufacturer of wire and cable
products (Manufacturing) .................... 332,000 952,357
MITSUI HOME
Home builder (Construction
and Property) ............................... 320,000 2,064,688
NAKAYAMA STEEL WORKS
Small blast furnace company,
mainly for the housing industry
(Metals) .................................... 709,000 1,685,990
NAMURA SHIPBUILDING
Shipbuilder (Capital Goods) ................. 229,000 704,498
NICHICON
Manufacturer of electrical
equipment (Manufacturing) ................... 162,000 2,006,984
NIPPON SEIKI
Manufacturer of automobile
components (Automotive Parts
Manufacturing) .............................. 159,700 1,327,846
NISHIO RENT ALL
Rentor of construction equipment
(Construction and Property) ................. 114,000 1,080,569
NISSHA PRINTING
Integrated printing firm
(Paper and Printing) ........................ 126,000 1,058,119
NISSHIN FIRE & MARINE INSURANCE
Non-life insurance company
(Financial Services) ........................ 404,000 1,135,379
NITTETSU MINING
Open cast coal miner (Resources) ............ 396,000 2,219,207
NOVA
Provider of language instruction
courses (Consumer Goods
and Services) ............................... 132,000 867,049
OKINAWA ELECTRIC POWER
Supplier of electricity to Okinawa
Island (Electric Utilities) ................. 69,800 1,096,882
RENGO
Manufacturer of paper board
(Paper and Printing) ........................ 260,000 1,026,856
RYOYO ELECTRO
Distributor of electronic goods
(Electronics) ............................... 151,000 1,983,704
SAGAMI CHAIN
Noodle restaurant chain
(Restaurants) ............................... 133,000 1,481,833
SANKYO
Manufacturer of pachinko game
equipment (Manufacturing) ................... 102,000 2,179,596
SANYO SPECIAL STEEL
Steel manufacturer (Metals) ................. 1,179,000 2,009,603
- -------------------
See footnotes on page 48.
- -----
40
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
JAPAN (CONTINUED)
SHIMACHU
Furniture retailer (Retailing) .............. 60,000 $ 1,277,127
SHOHKOH FUND
Finance company
(Financial Services) ........................ 3,800 1,105,845
SODICK
Manufacturer of electrodischargers
(Manufacturing) ............................. 348,000 1,678,224
SUNDRUG
Operator of outlet drug stores
(Retailing) ................................. 95,800 1,632,909
TAKASAGO
Specialty chemicals producer,
including fragrances, flavorings,
and aromatic chemicals
(Chemicals) ................................. 111,000 525,144
TOEI
Producer of movies, particularly
of animated movies (Media) .................. 228,000 1,080,569
TOKYO STYLE
Manufacturer of women's
ready-to-wear apparel
(Manufacturing) ............................. 96,000 1,013,719
TOWA PHARMACEUTICAL
Large generic drug wholesaler
(Drugs and Health Care) ..................... 187,000 1,819,157
TOYO INK MANUFACTURING
Ink manufacturer (Chemicals) ................ 305,000 907,874
TSUBAKI NAKASHIMA
Manufacturer of ball bearings
(Manufacturing) ............................. 359,900 2,468,758
TSUDAKOMA
Manufacturer of air-jet looms
(Manufacturing) ............................. 625,000 2,078,656
TSUTSUMI JEWELRY
Manufacturer and retailer of
jewelry (Retailing) ......................... 118,400 1,653,879
XEBIO
Retailer of outdoor clothing
(Retailing) ................................. 131,800 2,125,983
YOKOHAMA REITO
Cold storage, freezing, and loading
services (Distribution) ..................... 140,000 1,175,688
-----------
86,187,682
-----------
MALAYSIA 0.08%
CHEMICAL COMPANY OF MALAYSIA
Producer of industrial chemicals
and pharmaceuticals (Chemicals) ............. 231,000 276,416
CHEMICAL COMPANY OF MALAYSIA (WARRANTS)*
Producer of industrial chemicals
and pharmaceuticals (Chemicals) ............. 53,250 15,217
KFC HOLDINGS
Fast food restaurants
(Restaurants) ............................... 271,000 540,467
-----------
832,100
-----------
NETHERLANDS 3.18%
CMG
Information technology
consulting (Support Services) ............... 489,300 11,354,198
GETRONICS
Computer systems integration
consultant (Support Services) ............... 164,226 5,402,559
GUCCI GROUP
Designer, producer, and
distributor of luxury accessories
and apparel (Consumer Goods
and Services) ............................... 39,700 1,444,087
OTRA
Holding company for various
technical product wholesale
companies (Electronics) ..................... 479,803 7,633,509
SAMAS GROEP
Manufacturer of office
furniture (Manufacturing) ................... 168,812 7,667,366
-----------
33,501,719
-----------
NORWAY 0.87%
EKORNES
Manufacturer of home
furnishings (Manufacturing) ................. 1,007,000 9,167,046
-----------
SINGAPORE 0.33%
BUKIT SEMBAWANG ESTATES
Property developer
(Construction and Property) ................. 54,200 412,821
EXCEL MACHINE TOOLS*
Manufacturer of computerized
numerical-controlled machine
tools (Manufacturing) ....................... 2,039,000 899,464
INFORMATICS HOLDINGS
Operator of computer training
schools (Business Services) ................. 1,893,000 780,990
VENTURE MANUFACTURING
Contract manufacturer for the
electronics industry (Electronics) .......... 98,000 335,893
WANT WANT HOLDINGS (CLASS A)*
Manufacturer of rice crackers
(Consumer Goods and Services) ............... 393,400 786,800
- -------------------
See footnotes on page 48.
-----
41
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
SINGAPORE (CONTINUED)
WANT WANT HOLDINGS*
Manufacturer of rice crackers
(Consumer Goods and Services) ............... 159,400 $ 309,236
-----------
3,525,204
-----------
SWEDEN 3.54%
ANGPANNEFORENINGEN (CLASS B)
Engineering consultancy
(Business Services) ......................... 161,250 2,449,041
BT INDUSTRIES
Manufacturer of forklifts
(Capital Goods) ............................. 268,694 5,727,557
BURE INVESTMENT AKTIEBOLAGET
Investment company
(Financial Services) ........................ 287,527 3,505,025
FINNVEDEN (SERIES B)
Industrial conglomerate
(Manufacturing) ............................. 392,510 8,628,317
IRO
Manufacturer of textile
machinery (Capital Goods) ................... 130,120 1,785,553
KALMAR INDUSTRIES
Manufacturer of forklifts and
special lift trucks (Capital Goods) ......... 235,700 4,113,603
KALMAR INDUSTRIES (RIGHTS)*
Manufacturer of forklifts and
special lift trucks (Capital Goods) ......... 235,700 207,250
MUNSKJO
Producer of specialty paper
(Paper and Printing) ........................ 387,800 3,771,569
PLM
Manufacturer of food packaging
(Manufacturing) ............................. 443,130 7,025,376
-----------
37,213,291
-----------
SWITZERLAND 2.90%
FOTOLABO CLUB
Film processor (Retailing) .................. 13,314 3,221,091
HERO
Producer and exporter of
food and beverages (Consumer
Goods and Services) ......................... 7,340 3,864,945
KARDEX
Manufacturer and distributor
of industrial storage and
retrieval systems (Industrial
Goods and Services) ......................... 2,022 535,948
PRODEGA++
Food retailer (Retailing) ................... 12,353 6,460,636
SELECTA GROUP*
Owner and operator of food
and beverage vending machines
(Consumer Goods and Services) ............... 47,255 6,590,515
SIG SCHWEIZERISCHE INDUSTRIE-GESELLSCHAFT*
Industrial conglomerate
(Manufacturing) ............................. 4,293 5,681,844
TAG HEUER (ADRS)*
Designer and producer of
sports watches (Retailing) .................. 36,870 4,197,673
-----------
30,552,652
-----------
TAIWAN 0.20%
HOTUNG INVESTMENT HOLDINGS*
Investor in unlisted technology-
related companies
(Financial Services) ........................ 1,922,000 456,475
TAIWAN AMERICAN FUND*
Closed-end fund investing
in Taiwan (Miscellaneous) ................... 104,000 1,646,320
-----------
2,102,795
-----------
THAILAND 0.10%
HANA MICROELECTRONICS
Circuit board manufacturer
(Electronics) ............................... 288,000 493,714
HANA MICROELECTRONICS (RFD LINE)
Circuit board manufacturer
(Electronics) ............................... 288,000 522,336
-----------
1,016,050
-----------
UNITED KINGDOM 18.15%
ABACUS POLAR
Distributor of electronic
components (Electrical
Distribution) ............................... 1,167,500 3,716,567
AEA TECHNOLOGY
Provider of engineering and
research and development services
(Industrial Goods and Services) ............. 380,000 2,966,887
ALLIED LEISURE
Bowling alley operator
(Leisure and Hotels) ........................ 4,525,000 2,653,494
ASHTEAD GROUP
Rentor of equipment for
the construction industry
(Construction and Property) ................. 2,582,500 15,035,802
BRITISH POLYTHENE INDUSTRIES
Manufacturer and converter
of polythene (Manufacturing) ................ 270,000 2,103,527
- -------------------
See footnotes on page 48.
- -----
42
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
UNITED KINGDOM (CONTINUED)
BTG
Technology transfer company
assisting in the commercialization
of technological innovations
(Technology) ................................ 258,000 $ 2,943,732
CAPITAL RADIO
Commercial radio station
(Media) ..................................... 1,050,200 8,269,921
CHIROSCIENCE GROUP
Pharmaceutical company
specializing in pharmaceuticals
for cancer, pain, and
inflammatory disorders
(Drugs and Health Care) ..................... 185,000 798,142
CLINTON CARDS
Retailer of greeting cards
(Retailing) ................................. 2,650,000 4,883,937
COBHAM
High-integrity engineering
(Manufacturing) ............................. 470,000 6,618,614
CRT GROUP
Provider of training and
recruitment services; publisher
of multimedia products
(Support Services) .......................... 1,474,400 7,954,313
DAVID BROWN GROUP
Diversified engineering company;
manufacturer of transmission
equipment and pumps
(Manufacturing) ............................. 1,781,232 6,177,636
DAWSON GROUP
Rentor of commercial vehicles
(Transportation) ............................ 1,389,600 4,819,385
DOMNICK HUNTER GROUP
Manufacturer of filtration,
purification, and separation
products (Manufacturing) .................... 860,700 4,881,372
DRUCK HOLDINGS
Worldwide engineering group
(Industrial Goods and Services) ............. 421,200 1,975,959
ELECTRONICS BOUTIQUE*
Electronic games retailer
(Retailing) ................................. 7,250,000 5,041,010
F.I. GROUP
Designer and builder of
software applications
(Computer Software) ......................... 617,200 6,938,729
FAIREY GROUP
Electrical and electronic
engineering (Electronics) ................... 738,600 7,610,547
GAMES WORKSHOP GROUP
Manufacturer and retailer
of specialty games (Retailing) .............. 542,600 6,159,147
GWR GROUP
Local commercial radio
station operator (Media) .................... 1,733,700 5,184,939
HAMLEY'S
Toy store (Retailing) ....................... 359,700 2,064,108
IBC GROUP
Business communications
(Business Services) ......................... 1,180,000 8,056,401
ISA INTERNATIONAL
Distributor of computer
consumables (Business Services) ............. 1,902,589 4,000,555
NATIONAL EXPRESS GROUP
Long distance coach services
operating in the UK and
Europe (Transportation) ..................... 700,000 6,514,987
PARITY
Provider of software engineering
and consulting services
(Computer Software) ......................... 1,229,100 11,820,357
PEPTIDE THERAPEUTICS
Biopharmaceuticals
development company
(Drugs and Health Care) ..................... 135,000 696,652
PIZZA EXPRESS
Operator of restaurant chain
(Restaurants) ............................... 917,300 11,434,464
POLYPIPE
Manufacturer of plastic piping
and molded plastic products
(Building Materials) ........................ 2,439,600 8,869,718
SAVE GROUP
Gas station chain (Retailing) ............... 455,633 847,363
SHIRE PHARMACEUTICALS*
Biotechnology company
specializing in metabolic bone
and Alzheimer's diseases
(Drugs and Health Care) ..................... 247,500 1,078,152
STOVES
Manufacturer of ovens
(Manufacturing) ............................. 477,500 2,100,072
TILBURY DOUGLAS
Building contractor
(Construction and Property) ................. 736,300 7,833,575
- -------------------
See footnotes on page 48.
-----
43
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
UNITED KINGDOM (CONTINUED)
TRIFAST
Manufacturer and distributor
of fasteners for the
electronics industry
(Electrical Distribution) ................... 417,000 $ 3,678,459
TRINITY INTERNATIONAL HOLDINGS
Publisher of regional
newspapers in the UK, US,
and Canada (Media) .......................... 1,257,600 9,955,792
UNIONAMERICA HOLDINGS (ADRS)
Provider of property and
casualty reinsurance
(Financial Services) ........................ 150,000 2,981,250
VANGUARD MEDICA GROUP
Emerging biopharmaceutical
company planning to develop
and commercialize new drugs
(Drugs and Health Care) ..................... 145,000 1,102,949
WELLINGTON HOLDINGS
Producer of sealing systems
and rubber compounds
(Manufacturing) ............................. 440,000 1,245,865
-----------
191,014,379
-----------
UNITED STATES 42.71%
ACCUSTAFF*
Provider of temporary
personnel services
(Business Services) ......................... 465,200 13,287,275
ACUSON*
Designer, producer, and
retailer of medical diagnostic
ultrasound imaging systems
(Medical Products and
Technology) ................................. 125,000 2,343,750
ACXIOM*
Provider of data processing
services (Computer Software) ................ 200,000 3,287,500
ADVO*
Direct mail advertising services
(Business Services) ......................... 195,600 4,388,775
AERIAL COMMUNICATIONS*
Provider of cellular telephone
services (Telecommunications) ............... 300,000 2,568,750
AFFILIATED COMPUTER SERVICES*
Provider of information
technology services and
electronic funds transfer
processing (Business Services) .............. 113,800 2,859,225
ALLIED WASTE INDUSTRIES
Provider of integrated waste
disposal services (Industrial
Goods and Services) ......................... 400,000 8,125,000
ALTERNATIVE RESOURCES*
Provider of technical
human resource services
(Business Services) ......................... 50,000 1,218,750
AMERICAN CAPITAL STRATEGIES*
Provider of commercial financing
(Financial Services) ........................ 113,200 2,016,375
AMERICAN HOMEPATIENT*
Provider of home health
care services (Drugs and
Health Care) ................................ 220,000 5,637,500
AMERICAN HOMESTAR*
Retailer and producer of
manufactured homes
(Manufacturing) ............................. 300,000 6,825,000
AMERICAN MANAGEMENT SYSTEMS*
Provider of information
technology consulting services
(Business Services) ......................... 50,000 1,075,000
AMERISOURCE HEALTH (CLASS A)*
Wholesale distributor of
pharmaceuticals (Drugs and
Health Care) ................................ 151,600 9,001,250
ANALYSTS INTERNATIONAL
Provider of diversified
computer software services
(Business Services) ......................... 50,000 2,250,000
ANCHOR GAMING*
Installer and operator
of gaming machines
(Leisure and Hotels) ........................ 3,700 290,450
ANTEC*
Developer and supplier of fiber
optic transmission, construction,
and maintenance equipment
for the cable television industry
(Telecommunications) ........................ 149,100 2,357,644
ARCH COMMUNICATIONS GROUP*
Provider of nationwide paging
services (Telecommunications) ............... 273,600 2,120,400
ASYST TECHNOLOGIES*
Miniature clean-room
environment devices for
the manufacture of silicon
wafers (Technology) ......................... 250,000 7,273,438
- -------------------
See footnotes on page 48.
- -----
44
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
UNITED STATES (CONTINUED)
AVANT!*
Developer and marketer
of software products that
assist design engineers
(Computer Software) ......................... 87,100 $ 2,275,488
BA MERCHANT SERVICES (CLASS A)*
Provider of payment processing
services (Business Services) ................ 250,400 3,740,350
BACOU USA*
Designer and manufacturer of
personal protective gear
(Industrial Goods and Services) ............. 205,000 3,549,063
BDM INTERNATIONAL*
Information technology company,
providing systems and services
to public sector and commercial
customers (Business Services) ............... 175,000 3,860,938
BERG ELECTRONICS*
Manufacturer of electronic
connectors (Electronics) .................... 175,200 4,095,300
BISYS GROUP*
Provider of data processing services
for banks (Business Services) ............... 150,400 4,671,800
BLACK BOX*
Provider of communications
and networking solutions
(Electrical Distribution) ................... 100,000 4,075,000
BUDGET GROUP*
Owner and operator of
Budget Rent-a-Car franchises
(Consumer Goods and Services) ............... 350,000 12,250,000
BURR-BROWN*
Manufacturer of microelectric
data devices for business
end-users (Technology) ...................... 110,000 3,306,875
CABOT OIL & GAS
Explorer, developer, and producer
of oil and gas (Technology) ................. 36,400 873,600
CALENERGY*
Developer of geothermal energy
power (Electric Utilities) .................. 207,600 7,110,300
CALPINE*
Developer of power generation
facilities (Electric Utilities) ............. 500,000 7,937,500
CANANDAIGUA BRANDS (CLASS A)*
Wine, imported beer, and
distilled spirits (Consumer
Goods and Services) ......................... 150,000 7,471,875
CARRIAGE SERVICES*
Provider of funeral services
and products (Consumer Goods
and Services) ............................... 139,800 2,341,650
CELADON GROUP*
Provider of transportation and
international freight services
(Transportation) ............................ 300,000 4,331,250
CERIDIAN*
Provider of data processing
services (Business Services) ................ 354,700 13,855,469
CHART INDUSTRIES
Designer and producer of
standard and custom-built
industrial process equipment
(Industrial Goods and Services) ............. 46,000 989,000
CMP MEDIA (CLASS A)*
Magazine and newspaper
publisher (Media) ........................... 54,700 1,008,531
COGNEX*
Manufacturer of machine vision
systems (Electronics) ....................... 266,700 7,092,553
COINMACH LAUNDRY*
Provider of coin-operated
laundry equipment and services
(Consumer Goods and Services) ............... 13,100 275,100
COLLABORATIVE CLINICAL RESEARCH*
Manager of a clinical research
network (Drugs and Health Care) ............. 150,000 900,000
COMPDENT*
Provider of managed care
dental services (Medical
Products and Technology) .................... 300,000 6,215,625
CONTINENTAL NATURAL GAS*
Independent owner and
operator of natural gas pipelines
(Resources) ................................. 210,000 2,401,875
CORPORATE EXPRESS*
Office products supplier
(Retailing) ................................. 518,900 7,621,344
COX RADIO (CLASS A)*
Operator of radio stations
(Media) ..................................... 285,000 9,707,813
CREDENCE SYSTEMS*
Manufacturer of automated
semiconductor test equipment
(Technology) ................................ 158,800 4,674,675
DOMINICK'S SUPERMARKETS*
Supermarket operator (Retailing) ............ 150,000 5,475,000
- -------------------
See footnotes on page 48.
-----
45
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
UNITED STATES (CONTINUED)
EAGLE GEOPHYSICAL*
Company specializing in
seismic data collection
(Energy Services) ........................... 100,000 $ 1,762,500
EQUITY INTERNATIONAL*
Funeral services provider
(Consumer Goods and Services) ............... 158,500 3,229,437
FACTSET RESEARCH SYSTEMS*++
Provider of on-line database
services to the financial
community (Business Services) ............... 500,000 13,343,750
FLANDERS*
Designer, manufacturer, and
marketer of a range of air
filtration products (Consumer
Goods and Services) ......................... 194,500 1,543,844
FRONTIER INSURANCE GROUP
Provider of specialty insurance
products (Financial Services) ............... 115,800 3,901,012
GENERAL SEMICONDUCTOR*
Designer and manufacturer
of power semiconductors
(Technology) ................................ 304,700 3,465,962
GLENAYRE TECHNOLOGIES*
Manufacturer of paging
infrastructure equipment
(Telecommunications) ........................ 211,700 2,738,869
GTECH HOLDINGS*
Operator of state and local
lottery systems (Leisure
and Hotels) ................................. 100,000 3,225,000
GULF SOUTH MEDICAL SUPPLY*
Distributor of medical
supplies (Medical Products
and Technology) ............................. 137,300 4,496,575
HA-LO INDUSTRIES*
Distributor of specialty
advertising products (Advertising) .......... 115,000 3,220,000
IMNET SYSTEMS*
Developer, marketer, and
installer of electronic
information and document
management systems
(Computer Software) ......................... 75,800 1,383,350
IMPERIAL CREDIT*
Mortgage banking operations
(Financial Services) ........................ 101,300 2,538,831
INSIGNIA FINANCIAL*
Real estate management
services (Financial Services) ............... 215,700 4,664,512
INSO*
Marketer and developer of
textual information software
(Computer Software) ......................... 81,600 974,100
INTEGRATED DEVICE TECHNOLOGY*
Designer, manufacturer, and
marketer of integrated circuits
and modules (Technology) .................... 75,700 872,916
INTEGRATED HEALTH SERVICES
Operator of geriatric medical
facilities (Drugs and Health Care) .......... 70,000 2,222,500
INTERSTATE HOTELS*
Hotel management company
(Leisure and Hotels) ........................ 81,300 2,499,975
IVEX PACKAGING*
Manufacturer of specialty
packages (Consumer Goods
and Services) ............................... 151,700 3,204,663
JACOR COMMUNICATIONS*
Radio broadcasting (Media) .................. 147,400 6,153,950
JOURNAL REGISTER*
Newspaper publisher (Media) ................. 200,000 3,487,500
JP FOODSERVICE*
Distributor to food service
industry (Business Services) ................ 127,200 4,062,450
KEMET*
Manufacturer and supplier
of ceramic capacitors
(Technology) ................................ 311,700 6,818,438
KENDLE INTERNATIONAL*
Provider of a variety of
clinical research services
(Drugs and Health Care) ..................... 100,000 1,506,250
LATTICE SEMICONDUCTOR*
Designer and developer of
programmable logic devices
(Technology) ................................ 104,800 5,230,175
MAPICS
Supplier of applications software, including
solutions for business planning, production,
logistics, and asset management needs
(Computer Software) ......................... 722,500 8,173,281
- -------------------
See footnotes on page 48.
- -----
46
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
UNITED STATES (CONTINUED)
MARCAM SOLUTIONS*
Supplier of business planning
applications and services
(Computer Software) ......................... 185,000 $ 1,884,687
MEDALLION FINANCIAL
Provider of loan financing
for the purchase of taxicab
medallions and related assets
(Financial Services) ........................ 300,000 6,281,250
METALS USA*
Metals processor (Metals) ................... 60,000 885,000
NCS HEALTHCARE (CLASS A)*
Health care facility and
pharmacy services (Drugs and
Health Care) ................................ 320,000 7,460,000
OCULAR SCIENCES*
Manufacturer and marketer
of soft contact lenses (Medical
Products and Technology) .................... 150,000 3,281,250
OCWEN FINANCIAL*
Specializes in savings and loans
(Financial Services) ........................ 57,400 3,153,412
OM GROUP
Producer of specialty chemicals
(Chemicals) ................................. 200,000 7,550,000
OMNICARE
Provider of pharmacy services
to long-term care institutions
(Drugs and Health Care) ..................... 116,700 3,245,719
PERSONNEL GROUP OF AMERICA*
Personnel staffing services
(Business Services) ......................... 111,000 3,850,312
PETERSEN COMPANIES*
Special-interest magazine
publisher (Media) ........................... 140,000 2,765,000
PHYCOR*
Operator of multi-specialty
medical clinics (Drugs and
Health Care) ................................ 82,300 1,895,472
PHYSICIAN SALES & SERVICES*
Distributor of medical
supplies, equipment, and
pharmaceuticals
(Drugs and Health Care) ..................... 71,300 1,729,025
PIERCE LEAHY*
Archive records management
services (Business Services) ................ 105,500 2,954,000
PMC-SIERRA*
Provider of high-speed
networking circuits (Technology) ............ 190,300 5,007,269
PMT SERVICES*
Marketer of electronic credit
card authorization and payment
services (Business Services) ................ 227,700 3,636,084
POLYMER GROUP*
Manufacturer and marketer
of polyolefin products
(Manufacturing) ............................. 100,000 968,750
PRIDE INTERNATIONAL*
Provider of oil and gas well
services (Industrial Goods
and Services) ............................... 68,300 2,253,900
PRISON REALTY TRUST
Real estate investment trust
investing in prisons
(Construction and Property) ................. 129,000 4,450,500
PSW TECHNOLOGIES*
Provider of high-value
solutions to technology vendors
and business end-users
(Business Services) ......................... 160,000 2,470,000
QUORUM HEALTH GROUP*
Owner and operator of
acute-care hospitals
(Drugs and Health Care) ..................... 64,100 1,552,422
RDO EQUIPMENT (CLASS A)*
Owner and operator of
John Deere stores (Retailing) ............... 250,000 5,421,875
ROSLYN BANCORP
Savings bank (Financial Services) ........... 97,700 2,094,444
SANTA FE ENERGY RESOURCES*
Explorer, producer, and
developer of oil and gas
(Resources) ................................. 252,200 3,294,362
SIMON TRANSPORTATION SERVICES*++
Provider of temperature-
controlled transportation
services (Transportation) ................... 270,000 6,108,750
SITEL*
Telemarketer
(Business Services) ......................... 200,000 1,775,000
SOLA INTERNATIONAL*
Designer and manufacturer
of optical supplies (Consumer
Goods and Services) ......................... 73,000 2,491,125
- -------------------
See footnotes on page 48.
-----
47
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SHARES VALUE
------ -----
UNITED STATES (CONTINUED)
SOURCE SERVICES*
Specialty staffing services
(Business Services) ......................... 200,000 $ 5,737,500
STANFORD TELECOMMUNICATIONS*
Designer, manufacturer,
and marketer of digital
telecommunications
products and systems
(Telecommunications) ........................ 42,700 1,032,806
STEINWAY MUSICAL INSTRUMENTS*
Manufacturer of musical
equipment (Consumer
Goods and Services) ......................... 198,000 4,702,500
SYNOPSYS*
Supplier of integrated
circuit design software
(Computer Software) ......................... 124,100 4,824,387
TOTAL RENAL CARE HOLDINGS*
Provider of dialysis services
(Drugs and Health Care) ..................... 270,999 8,350,157
UNITED VIDEO SATELLITE GROUP
(CLASS A)*
Satellite-delivered
program services (Media) .................... 12,200 327,875
UNIVERSAL OUTDOOR HOLDINGS*
Outdoor advertising, such as
billboards (Advertising) .................... 196,400 8,273,350
VALLEY NATIONAL GASES*
Packager and distributor of
gases (Chemicals) ........................... 350,000 3,762,500
VISHAY INTERTECHNOLOGY*
Developer and manufacturer
of electronic resistive
systems (Electronics) ....................... 178,300 4,268,056
WATERS*
Manufacturer of liquid
chromatography instruments
(Medical Products
and Technology) ............................. 107,900 4,747,600
WATSON PHARMACEUTICALS*
Manufacturer of off-patent
medications (Medical Products
and Technology) ............................. 129,200 4,102,100
WISCONSIN CENTRAL TRANSPORTATION*
Operator of regional railroad
systems (Transportation) .................... 135,600 4,195,125
YOUTH SERVICES*
Operator of residential and
community-based programs
for at-risk youths
(Support Services) .......................... 215,700 3,060,244
--------------
449,597,704
--------------
TOTAL COMMON STOCKS
(Cost $968,154,390) ............................ 1,028,429,762
PREFERRED STOCKS 0.66%
(Cost $7,870,811)
GERMANY 0.66%
GERRY WEBER INTERNATIONAL*
Designer and manufacturer
of ladies' apparel
(Manufacturing) ............................. 274,911 6,920,703
-----------
TOTAL INVESTMENTS 98.36%
(Cost $976,025,200) ............................ 1,035,350,465
OTHER ASSETS
LESS LIABILITIES 1.64% ........................ 17,271,229
--------------
NET ASSETS 100.00% ............................ $1,052,621,694
==============
- ------------------
* Non-income producing security.
+ Rule 144A security.
++ Affiliated issuers (a Series' holdings representing 5% or more of the
outstanding voting securities).
Descriptions of companies have not been audited by Deloitte &
Touche LLP.
See Notes to Financial Statements.
- -----
48
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
PERFORMANCE REVIEW
For the 12 months ended October 31, 1997, Seligman Henderson Global Technology
Fund performed strongly, posting a total return of 33.86% based on the net asset
value of Class A shares, compared to the 16.45% total return of its peers, as
measured by the Lipper Global Funds Average. Stocks around the world, as
measured by the Morgan Stanley Capital International World Index (MSCI World
Index), posted a total return of 17.25% for the period.
Overall, healthy rates of economic growth and benign inflationary pressures
provided a supportive framework for equity markets during the Fund's fiscal
year. Although market volatility increased markedly in the last six months,
stock prices continued to appreciate until October, when markets, including
technology stocks, fell sharply.
In general, the past 12 months were distinguished by a polarization in the
performance of the United States and European markets versus those in the
Pacific region. While the former produced outstanding returns, the latter fell
sharply. With the exception of the United Kingdom, technology stocks generally
outperformed in the equity markets.
PORTFOLIO STRATEGY
COMPUTING AND SEMICONDUCTORS
o Perhaps the most notable feature of the technology sector's performance was
a sharp recovery in the semiconductor industry. Following a difficult period
in 1996, semiconductor stocks soared, with semiconductor production
equipment makers leading the way. The personal computer industry showed
continued strong growth with the top producers gaining significant market
share.
THE US PORTION OF THE FUND'S PORTFOLIO PERFORMED STRONGLY, BENEFITING FROM
ITS HEAVY WEIGHTING IN THE SEMICONDUCTOR PRODUCTION EQUIPMENT AND DATA
STORAGE AREAS. THE FUND HAD A US WEIGHTING OF 56.5% AT OCTOBER 31, 1997,
HAVING STOOD AT 55.7% ON OCTOBER 31, 1996.
COMMUNICATIONS
o The wireless communications industry benefited from both the increased
demand for infrastructure and the end of the inventory adjustment phase that
had plagued the industry in 1995 and 1996. The "Year 2000" problem ensured a
very strong market for both software products and consulting companies,
while producing growing demand for enterprise storage suppliers. In
contrast, networking companies saw a slowdown in growth from the dizzying
levels achieved in previous years. As a result, related sub-sectors, such as
networking distribution, posted very mixed results.
THE FUND ENJOYED EXCELLENT PERFORMANCE FROM ITS HEAVY WEIGHTING IN
INFORMATION TECHNOLOGY CONSULTING STOCKS, AND FROM A WELL-TIMED EXIT FROM
THE US NETWORKING SECTOR EARLY IN 1997. HOWEVER, THESE GAINS WERE PARTLY
COUNTERED BY WEAKNESS IN UK AND CONTINENTAL EUROPEAN NETWORKING STOCKS.
PACIFIC REGION
o The Fund's weighting in the Pacific region remained modest throughout the
fiscal year, reflecting our concerns about the economic fundamentals and
outlook, and the valuations of companies.
- --------------------------------------------------------------------------------
[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) EMMA PARKINSON, TIM WOOLLEY, DAVID MAGLIOCCO,
BRIAN ASHFORD-RUSSELL (PORTFOLIO MANAGER)
[PHOTO]
US TEAM: (STANDING) PAUL KRIEGER, SHANEAN AUSTIN (ADMINISTRATIVE ASSISTANT),
PATRICK RENDA, LAWRENCE ROSSO, STORM BOSWICK, CAROLYN ROGERS, (SEATED) PAUL
WICK (PORTFOLIO MANAGER)
FUND OBJECTIVE
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.
- --------------------------------------------------------------------------------
-----
49
<PAGE>
================================================================================
INVESTMENT REPORT
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
THE FUND NEVERTHELESS ACHIEVED GOOD RETURNS FROM ITS PORTFOLIO OF JAPANESE
COMPANIES AND OUTSTANDING PERFORMANCE FROM ITS HOLDINGS IN TAIWAN, BEFORE
THE WEIGHTING WAS SHARPLY REDUCED DURING THE SUMMER. THE FUND'S JAPAN
WEIGHTING STOOD AT 8.2% ON OCTOBER 31, 1997, DOWN FROM 10.0% 12 MONTHS AGO.
THE FUND'S WEIGHTING IN THE PACIFIC REGION WAS 6.7% ON OCTOBER 31, 1997,
SLIGHTLY HIGHER THAN THE 4.9% ON OCTOBER 31, 1996.
SUMMARY
It is not yet clear how serious the impact of the problems in the Pacific region
will be on demand for technology-based products. However, it is likely that
demand for PCs, peripherals, components, and wireless equipment will be
impacted. Over the next few quarters, companies' future earnings will be harder
to predict.
Nevertheless, many areas of the technology industry should be unaffected by the
problems in the Pacific region. Within the Fund, we plan to emphasize
sub-sectors, such as software, storage, computer and business services, and
medical products and technology. The Fund's exposure to the Pacific region is
not likely to be increased, despite the substantial price declines in those
markets. Instead, the Fund's portfolio will be focused on domestically-oriented
technology companies based in the US, the UK, and Continental Europe.
We expect the recent pattern of market volatility to continue, but believe that
any slowdown in the overall rate of corporate profit growth will highlight the
superior growth potential of the technology sector. In a deflationary
environment, companies could be obliged to sustain profit growth by reducing
costs through the implementation of technology. Technology spending should
therefore remain buoyant, and we anticipate strong relative share price
performance from select stocks.
Note: All figures are in US dollar terms. The following indices were used to
evaluate regional performance for the 12-month period ended October 31, 1997:
Datastream US Pacific Stock Exchange Index, Datastream UK Electronics Index,
Datastream Europe ex-UK Electronics Index (does not include the UK), Datastream
Japan Electronics Index, Datastream Asian Electronics Index, and Datastream
Pacific Basin Electronics Index.
- -----
50
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
COUNTRY ALLOCATION
AT OCTOBER 31, 1997
MSCI
WORLD
FUND INDEX
--------- ---------
CONTINENTAL EUROPE ............................. 10.68% 20.78%
Austria .................................... -- 0.21
Belgium .................................... -- 0.61
Denmark .................................... -- 0.51
Finland .................................... 0.77 0.41
France ..................................... 1.73 3.48
Germany .................................... 0.65 4.51
Hungary .................................... 0.42 --
Ireland .................................... -- 0.19
Italy ...................................... 0.96 1.79
Luxembourg ................................. 1.45 --
Netherlands ................................ 3.17 2.72
Norway ..................................... -- 0.29
Spain ...................................... 0.30 1.21
Sweden ..................................... 1.23 1.29
Switzerland ................................ -- 3.56
JAPAN .......................................... 8.19 14.06
PACIFIC ........................................ 6.74 3.80
Australia .................................. 0.59 1.27
Hong Kong .................................. 0.44 1.39
Malaysia ................................... -- 0.52
New Zealand ................................ -- 0.17
Singapore .................................. 0.88 0.45
South Korea ................................ 0.61 --
Taiwan ..................................... 4.22 --
UNITED KINGDOM ................................. 11.16 10.35
UNITED STATES .................................. 56.52 48.45
OTHER .......................................... 3.59 2.56
Bermuda .................................... 1.26 --
Brazil ..................................... 0.44 --
Canada ..................................... -- 2.56
India ...................................... 0.15 --
Israel ..................................... 1.74 --
OTHER ASSETS LESS LIABILITIES .................. 3.12 --
- --------------------------------------------------------------------------------
TOTAL 100.00% 100.00%
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
REGIONAL ALLOCATION
AT OCTOBER 31, 1997
United States ................................ 56.52%
United Kingdom ............................... 11.16%
Continental Europe ........................... 10.68%
Japan ........................................ 8.19%
Pacific ...................................... 6.74%
Other ........................................ 3.59%
Other Assets Less Liabilities ................ 3.12%
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
LARGEST INDUSTRIES
AT OCTOBER 31, 1997
Computer Hardware/Peripherals ................ 16.0% $139,384,550
Electronics .................................. 15.2% $132,386,534
Electronics Capital Equipment ................ 12.9% $112,109,608
Computer Software ............................ 11.6% $100,801,113
Computer and Business Services ............... 8.8% $ 76,808,074
LARGEST PORTFOLIO HOLDINGS
ATOCTOBER 31, 1997
SECURITY VALUE
- ---------- -------------
Storage Technology (US) ........................ $20,540,625
Creative Technology (US) ....................... 20,350,000
Taiwan Semiconductor Manufacturing
(ADRs) (Taiwan) ............................ 19,941,875
EMC (US) ....................................... 19,600,000
Electronics for Imaging (US) ................... 18,675,000
Kulicke & Soffa Industries (US) ................ 17,937,500
Novellus Systems (US) .......................... 17,775,000
Parametric Technology (US) ..................... 17,625,000
Maxim Integrated Products (US) ................. 16,554,687
ECI Telecommunications (Israel) ................ 15,159,375
-----
51
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1997
AVERAGE ANNUAL
----------------------------------------
CLASS B
SINCE SINCE
SIX ONE INCEPTION INCEPTION
MONTHS* YEAR 5/23/94 4/22/96
---------- ------- ------------ ------------
CLASS A**
With Sales Charge ... 11.73% 27.55% 25.36% n/a
Without Sales Charge 17.27 33.86 27.16 n/a
CLASS B**
With CDSL+ .......... 11.72 27.82 n/a 15.39%
Without CDSL ........ 16.72 32.82 n/a 17.81
CLASS D**
With 1% CDSL ........ 15.72 31.82 n/a n/a
Without CDSL ........ 16.72 32.82 26.12 n/a
LIPPER GLOBAL
FUNDS AVERAGE*** .... 8.89 16.45 12.68++ 12.09+++
MSCI WORLD INDEX*** . 8.78 17.25 14.34++ 13.24+++
NET ASSET VALUE
OCTOBER 31, 1997 APRIL 30, 1997 OCTOBER 31, 1996
---------------- -------------- ----------------
CLASS A ............. $15.14 $12.91 $11.31
CLASS B ............. 14.73 12.62 11.09
CLASS D ............. 14.73 12.62 11.09
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1997
REALIZED ............... $2.744#
UNREALIZED ............. 1.716##
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.
- --------------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price and assume the investment of
dividends and capital gain distributions. Returns for Class A shares are
calculated with and without the effect of the initial 4.75% maximum sales
charge. Returns of Class B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales load ("CDSL"), charged
on 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 on
redemptions made within one year of the date of purchase.
*** The Lipper Global Funds Average and the Morgan Stanley Capital
International World Index (MSCI World Index) are unmanaged benchmarks that
assume reinvestment of dividends. The Lipper Global Funds Average excludes
the effect of sales charges and the MSCIWorld Index excludes the effect of
fees and sales charges. The monthly performance of the Lipper Global Funds
Average is used in the Performance and Portfolio Overview. Investors
cannot invest directly in an average or an index.
+ The CDSL is 5% for periods of one year or less, and 4% since inception.
++ From May 31, 1994.
+++ From April 30, 1996.
# On November 21, 1997, a capital gain of $2.322 per share was paid to
shareholders.
## Represents the per share amount of net unrealized appreciation of
portfolio securities as of October 3l, 1997.
- -----
52
<PAGE>
================================================================================
PERFORMANCE AND PORTFOLIO OVERVIEW October 31, 1997
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
This chart compares a $10,000 hypothetical investment made in Seligman
Henderson Global Technology Fund, with and without the initial 4.75% maximum
sales charge 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, 1997, to a $10,000 hypothetical investment made in
the Lipper Global Funds Average and the Morgan Stanley Capital International
World Index (MSCI World Index) for the same period. It is important to keep in
mind that the Index excludes the effect of fees or sales charges, and the
Average excludes the effect of sales charges.
GLOBAL TECHNOLOGY FUND
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE]
Class A Class A Class D Lipper
With Without Without MSCI Global
Sales Sales World World Funds
Charge Charge Index Index Average
------ ------ ----- ----- -------
9,520 10,000 10,000 10,000 10,000
9,613 10,098 10,084 10,165 10,100
10/31/94 11,160 11,723 11,681 10,492 10,433
10,695 11,234 11,150 9,987 9,605
13,264 13,933 13,821 10,998 10,330
16,856 17,706 17,523 11,650 11,305
10/31/95 17,556 18,441 18,216 11,544 11,154
15,895 16,697 16,458 12,524 11,878
17,535 18,419 18,119 13,118 12,671
15,004 15,760 15,477 12,736 12,223
10/31/96 16,269 17,090 16,745 13,488 12,919
19,981 20,988 20,535 14,192 13,847
18,571 19,507 19,055 14,538 13,816
23,634 24,826 24,204 16,960 16,026
10/31/97 21,779 22,877 22,241 15,814 15,045
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.
As shown on page 52, the performance of Class B shares will be greater than or
less than the performances shown for Class A shares and Class D shares, based
on the differences in sales charges and fees paid by shareholders. Past
performance is not indicative of future investment results.
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED OCTOBER 31, 1997
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/97
- --------- -------- --------
3Com(US) ........................................ 200,000 200,000
American Power
Conversion (US) ............................. 500,000 500,000
Cisco Systems (US) .............................. 150,000 150,000
CMPMedia (Class A) (US) ......................... 700,000 700,000
Cognex (US) ..................................... 350,000 350,000
Creative Technology (US) ........................ 800,000 800,000
Electronics for Imaging (US) .................... 400,000 400,000
Flextronics International (US) .................. 200,000 200,000
Kulicke &Soffa Industries (US) .................. 700,000 700,000
Taiwan Semiconductor
Manufacturing (ADRs) (Taiwan) ............... 1,007,500 1,007,500
SHARES
-------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/97
- ---------- -------- --------
ADE (US) .................................. 400,000 --
Applied Materials (US) .................... 165,000 230,000(1)
Asyst Technologies (US) ................... 450,000(2) --
Burr-Brown (US) ........................... 375,000 --
Gateway 2000 (US) ......................... 175,000 --
Komag (US) ................................ 425,000 --
Quantum (US) .............................. 500,000(3) --
Seagate Technology (US) ................... 350,000 --
Tecnomatix Technologies
(Israel) .............................. 350,000 --
Veeco Instruments (US) .................... 350,000 200,000
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 115,000 shares received as a result of a 2-for-1 stock split.
(2) Includes 150,000 shares received as a result of a 2-for 1 stock split.
(3) Includes 250,000 shares received as a result of a 2-for-1 stock split.
-----
53
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
SHARES VALUE
------ -----
COMMON STOCKS 96.88%
AUSTRALIA 0.59%
COCHLEAR
Developer and marketer
of hearing aids (Medical
Products and Technology) .................... 1,650,000 $ 5,093,979
-----------
BERMUDA 1.26%
GEMSTAR INTERNATIONAL*
Developer and marketer of
television and video
recording products (Media) .................. 500,000 10,968,750
-----------
BRAZIL 0.44%
TELECOMUNICACOESBRASILEIRAS
"TELEBRAS" (ADRS)
Provider of telecommunications
services (Telecommunications) ............... 38,000 3,847,500
-----------
FINLAND 0.77%
NOKIA
Manufacturer and developer
of telecommunications
systems and equipment
(Telecommunications) ........................ 77,000 6,709,334
-----------
FRANCE 1.73%
ALCATEL ALSTHOM
Developer of equipment
and systems for public
telecommunications
(Telecommunications) ........................ 45,000 5,411,710
ALTRAN TECHNOLOGIES
Computer services provider
(Computer and Business Services) ........... 9,500 2,527,884
ATOS*
Computer services provider
and systems integrator
(Computer and Business
Services) ................................... 42,816 4,793,954
UNILOG
Computer consultants
(Computer and
Business Services) .......................... 17,241 2,308,750
-----------
15,042,298
-----------
GERMANY 0.65%
FRESENIUS
Dialysis equipment and services
(Medical Products and Technology) .............. 33,000 5,652,941
-----------
HONG KONG 0.44%
ELEC & ELTEK INTERNATIONAL HOLDINGS
Manufacturer of printed
circuit boards (Electronics) ................ 10,502,500 3,872,202
-----------
HUNGARY 0.42%
RICHTER GEDEON (GDRS)
Manufacturer of pharmaceuticals
and cosmetics (Medical Products
and Technology) ............................. 39,000 3,627,000
-----------
INDIA 0.15%
VIDESH SANCHAR NIGAM (GDRS)+
Provider of international
telecommunications services
(Telecommunications) ........................ 102,500 1,345,313
-----------
ISRAEL 1.74%
ECI TELECOMMUNICATIONS
Provider of digital
telecommunications and
data transmissions systems
(Networking/Communications
Infrastructure) ............................. 550,000 15,159,375
-----------
ITALY 0.96%
TELECOM ITALIA
Provider of telecommunications
services (Telecommunications) ............... 1,333,333 8,338,735
-----------
JAPAN 8.19%
ADVANTEST
Producer of measuring
instruments and semiconductor
testing devices (Electronics
Capital Equipment) .......................... 74,000 6,122,059
AVAL DATA
Manufacturer of computer
peripherals (Computer
Hardware/Peripherals) ....................... 200,000 1,496,633
CANON
Manufacturer of printers
and photocopiers (Computer
Hardware/Peripherals) ....................... 316,000 7,672,071
CSK
Information services
company (Computer and
Business Services) .......................... 255,000 8,014,467
GLORY KOGYO
Manufacturer and major
exporter of currency-handling
machines (Miscellaneous) .................... 122,000 1,998,337
HIROSE ELECTRONICS
Manufacturer of specialized
connectors (Electronics) .................... 81,100 5,293,382
HITACHI
Manufacturer of diversified
electronics (Electronics) ................... 600,000 4,614,617
- ---------------
See footnotes on page 59.
- -----
54
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
SHARES VALUE
------ -----
JAPAN (CONTINUED)
MIMASU SEMICONDUCTOR
Wafer inspection devices
(Electronics Capital Equipment) ............. 180,000 $ 3,367,423
MURATA MANUFACTURING
Manufacturer of capacitors
(Electronics) ............................... 167,000 6,776,087
NEC
Manufacturer and marketer
of computers and
telecommunications devices
(Networking/Communications
Infrastructure) ............................. 413,000 4,532,801
ROHM
Producer of custom
linear integrated circuits
(Semiconductors) ............................ 81,000 8,014,467
SECOM
Security services pioneer
(Computer and
Business Services) .......................... 109,000 7,050,969
TDK
Magnetic tapes and heads
for disk drives (Computer
Hardware/Peripherals) ....................... 75,000 6,223,497
-----------
71,176,810
-----------
LUXEMBOURG 1.45%
MILLICOM INTERNATIONAL CELLULAR*
Cellular services operator
(Telecommunications) ........................ 300,000 12,581,250
-----------
NETHERLANDS 3.17%
ASM LITHOGRAPHY HOLDING*
Manufacturer of semiconductor
production equipment
(Electronics Capital Equipment) ............. 110,000 8,085,000
ASM LITHOGRAPHY HOLDING*
Manufacturer of semiconductor
production equipment
(Electronics Capital Equipment) ............. 16,000 1,157,814
CMG
Information technology
consulting (Computer and
Business Services) .......................... 376,540 8,737,604
PHILIPS ELECTRONICS
Manufacturer of consumer
and industrial electronics
(Electronics) ............................... 123,300 9,618,476
-----------
27,598,894
-----------
SINGAPORE 0.88%
VENTURE MANUFACTURING
Contract manufacturer
for the electronics industry
(Electronics) ............................... 2,224,000 7,622,723
-----------
SOUTH KOREA 0.61%
CHUNG HO COMPUTER
Manufacturer of ATMs and
cash dispensers (Computer
Hardware/Peripherals) ....................... 35,200 572,684
SAMSUNG ELECTRONICS (GDRS)
(1/2 NON-VOTING)*+
Manufacturer of consumer
electronics and semiconductors
(Semiconductors) ............................ 253,130 2,578,129
SK TELECOMMUNICATIONS (ADRS)
Provider of mobile
telecommunications and
paging services
(Telecommunications) ........................ 386,250 2,124,375
-----------
5,275,188
-----------
SPAIN 0.30%
TELEFONICA DE ESPANA
Provider of telecommunications
services (Telecommunications) ............... 96,000 2,610,232
-----------
SWEDEN 1.23%
L.M. ERICSSON TELEFON (SERIES B)
Manufacturer of
telecommunications
equipment (Networking/
Communications Infrastructure) .............. 137,000 6,023,181
PHARMACIA & UPJOHN
Global pharmaceutical and
biotechnology company
(Medical Products and
Technology) ................................. 147,800 4,696,283
-----------
10,719,464
-----------
TAIWAN 4.22%
ACCTON TECHNOLOGY (GDRS)
Distributor of electronic
components (Distribution) ................... 465,750 1,723,275
- ---------------
See footnotes on page 59.
-----
55
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
SHARES VALUE
------ -----
TAIWAN (CONTINUED)
SILICONWARE PRECISION INDUSTRIES (GDRS)*
Integrated circuit packaging
(Electronics Capital Equipment) ............. 308,000 $ 2,964,500
SYNNEX TECHNOLOGY INTERNATIONAL (GDRS)*
Manufacturer of PCs and
peripherals (Distribution) .................. 178,000 3,106,100
TAIWAN SEMICONDUCTOR
MANUFACTURING (ADRS)*
Manufacturer of integrated
circuits (Semiconductors) ................... 1,007,500 19,941,875
UNITED MICRO ELECTRONICS*
Manufacturer of integrated
circuits (Semiconductors) ................... 2,492,026 4,670,033
UNITED TELECOMMUNICATIONS+
Provider of telecommunications
services (Telecommunications) ............... 7,600 1,998,800
YAGEO (GDRS)*
Manufacturer of passive
components (Electronics) .................... 208,020 2,185,292
YAGEO (GDRS)*+
Manufacturer of passive
components (Electronics) .................... 5,980 62,821
-----------
36,652,696
-----------
UNITED KINGDOM 11.16%
ABACUS POLAR
Distributor of electronic
components (Distribution) ................... 1,240,000 3,947,360
ACORN COMPUTER*
Supplier to the educational
computer market (Computer
Hardware/Peripherals) ....................... 695,000 1,630,213
ADMIRAL
Computer software and
services (Computer and
Business Services) .......................... 950,000 9,311,313
ANITE GROUP*
Supplier of data communications
and software products
(Networking/Communications
Infrastructure) ............................. 1,950,000 1,404,865
ASTEC
Designer and manufacturer
of power conversion products
and electronic components
(Computer Hardware/
Peripherals) ................................ 3,650,000 7,766,548
AZLAN
Networking equipment
distributor (Distribution) .................. 857,900 934,290
AZLAN (RIGHTS)*
Networking equipment
distributor (Distribution) .................. 1,715,800 689,937
BTG
Technology transfer
company assisting in the
commercialization of
technological inventions
(Computer and
Business Services) .......................... 585,000 6,674,741
CODA GROUP
Developer of financial
accounting software
(Computer Software) ......................... 370,000 1,087,953
COLT TELECOMMUNICATIONS*
Telecommunications
services provider
(Telecommunications) ........................ 598,800 5,131,672
CRT GROUP
Provider of training and
recruitment services;
publisher of multimedia
products (Computer and
Business Services) .......................... 900,000 4,855,454
EIDOS*
Developer of entertainment
software (Computer Software) ................ 242,000 2,838,212
FILTRONIC COMTEK
Designer and manufacturer
of sophisticated devices for
mobile telecommunications
systems (Networking/
Communications Infrastructure) .............. 175,000 1,385,388
FREEPAGES GROUP
Provider of classified
information by telephone
and the Internet
(Telecommunications) ........................ 4,000,000 2,412,648
GENERAL ELECTRIC
Supplier of diversified
electronics (Electronics) ................... 1,250,000 7,947,916
- ---------------
See footnotes on page 59.
- -----
56
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
SHARES VALUE
------ -----
UNITED KINGDOM (CONTINUED)
ILION GROUP++
Networking equipment
distributor (Distribution) .................. 1,616,914 $ 7,368,639
LINX PRINTING TECHNOLOGY++
Manufacturer of specialized
printers (Miscellaneous) .................... 570,000 1,456,385
LOGICA
Supplier of computer
services (Computer and
Business Services) .......................... 611,542 8,657,938
MISYS
Provider of computer services
and software and hardware
solutions (Computer Software) ............... 231,428 5,825,884
PREMIER FARNELL
Distributor of electronic
components (Distribution) ................... 350,000 2,720,931
PSION
Manufacturer of hand-held
computers (Computer
Hardware/Peripherals) ....................... 490,500 3,677,592
SHIRE PHARMACEUTICALS*
Biotechnology company
specializing in metabolic bone
and Alzheimer's diseases
(Medical Products and
Technology) ................................. 611,551 2,664,020
VODAFONE
Cellular services operator
(Telecommunications) ........................ 1,200,000 6,589,545
-----------
96,979,444
-----------
UNITED STATES 56.52%
3COM*
Supplier of adapter cards,
hubs, and routers for local
area computer networks
(Networking/Communications
Infrastructure) ............................. 200,000 8,293,750
3DO*
Developer of video game
software and game platforms
(Computer Software) ......................... 750,000 2,578,125
ACTIVISION*
Developer of entertainment
software (Computer Software) ................ 300,000 4,350,000
ADAPTEC*
Manufacturer of computer
input-output systems
(Electronics) ............................... 225,000 10,919,531
ADFLEX SOLUTIONS*
Flexible circuit boards
(Electronics) ............................... 175,100 3,917,863
AMERICAN POWER CONVERSION*
Manufacturer of constant-power
supply products (Computer
Hardware/Peripherals) ....................... 500,000 13,531,250
APPLIED MATERIALS*
Manufacturer of semiconductor
fabrication equipment
(Electronics Capital Equipment) ............. 230,000 7,669,063
ASPECT TELECOMMUNICATIONS*
Developer and manufacturer of
automated call distribution
equipment (Networking/
Communications Infrastructure) .............. 200,000 4,750,000
BMC SOFTWARE*
Developer of mainframe
and Unix utility software
(Computer Software) ......................... 200,000 12,050,000
CADENCE DESIGN SYSTEM*
Electronic design automation
software (Computer Software) ................ 200,000 10,650,000
CIDCO*
Manufacturer of telephone
caller identification systems
(Networking/Communications
Infrastructure) ............................. 200,000 3,737,500
CISCO SYSTEMS*
Manufacturer of computer
network routers and switches
(Networking/Communications
infrastructure) ............................. 150,000 12,304,688
CMP MEDIA (CLASS A)*
Publisher of technology
industry trade magazines (Media) ............ 700,000 12,906,250
COGNEX*
Manufacturer of machine
vision systems (Electronics) ................ 350,000 9,307,813
CREATIVE TECHNOLOGY*
Producer of PC audio
products (Computer
Hardware/Peripherals) ....................... 800,000 20,350,000
- ---------------
See footnotes on page 59.
-----
57
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
SHARES VALUE
------ -----
UNITED STATES (CONTINUED)
CREDENCE SYSTEMS*
Manufacturer of automated
semiconductor test equipment
(Electronics Capital Equipment) ............. 350,000 $10,303,125
ELECTRO SCIENTIFIC INDUSTRIES*
Manufacturer of memory circuit
repair systems (Electronics
Capital Equipment) .......................... 200,000 9,650,000
ELECTRONICS FOR IMAGING*
Peripherals for color
copiers (Electronics) ....................... 400,000 18,675,000
EMC*
Manufacturer of enterprise
storage devices (Computer
Hardware/Peripherals) ....................... 350,000 19,600,000
ETEC SYSTEMS*
Photomask manufacturing
systems (Electronics Capital
Equipment) .................................. 200,000 8,962,500
FLEXTRONICS INTERNATIONAL*
Contract manufacturer of
electronic components
(Electronics) ............................... 200,000 7,600,000
GARTNER GROUP (CLASS A)*
Provider of information
technology consulting and
training services (Computer
and Business Services) ...................... 300,000 8,456,250
GASONICS INTERNATIONAL*
Developer and supplier
of photoresist removal
equipment (Electronics) ..................... 485,000 7,547,812
GENRAD*
Manufacturer and seller of
computer-controlled test and
development equipment
(Electronics) ............................... 100,000 2,950,000
HADCO*
Manufacturer of complex
printed circuit boards
(Electronics) ............................... 100,000 5,537,500
IN FOCUS SYSTEMS*
Manufacturer of portable
projection systems (Computer
Hardware/Peripherals) ....................... 300,000 9,862,500
INTERNATIONAL RECTIFIER*
Designer and manufacturer of
power semiconductors
(Semiconductors) ............................ 300,000 4,106,250
UNITED STATES (CONTINUED)
KLA-TENCOR*
Manufacturer of wafer
and metrology equipment
(Electronics Capital
Equipment) .................................. 300,000 13,153,125
KULICKE & SOFFA INDUSTRIES*
Manufacturer of semiconductor
packaging equipment
(Electronics) ............................... 700,000 17,937,500
LATTICE SEMICONDUCTOR*
Designer and manufacturer of
programmable logic devices
(Semiconductors) ............................ 200,000 9,981,250
LEXMARK INTERNATIONAL GROUP
(CLASS A)*
Manufacturer of laser and
inkjet printers and cartridges
(Computer Hardware/
Peripherals) ................................ 475,000 14,517,187
MAXIM INTEGRATED PRODUCTS*
Manufacturer of linear and
mixed-signal integrated
circuits (Semiconductors) ................... 250,000 16,554,687
MICROCHIP TECHNOLOGY*
Supplier of field programmable
microcontrollers
(Semiconductors) ............................ 364,600 14,470,063
NETWORK APPLIANCES*
Designer, manufacturer,
and marketer of network
data storage devices
(Networking/Communications
Infrastructure) ............................. 80,000 4,000,000
NETWORK GENERAL*
Local area network
management software
(Computer Software) ......................... 495,000 9,992,812
NOVELLUS SYSTEMS*
Designer and manufacturer of
chemical vapor deposition
equipment (Electronics
Capital Equipment) .......................... 400,000 17,775,000
PARAMETRIC TECHNOLOGY*
Developer of mechanical
design software
(Computer Software) ......................... 400,000 17,625,000
PMC-SIERRA*
Provider of high-speed
networking circuits
(Semiconductors) ............................ 300,000 7,893,750
- ---------------
See footnotes on page 59.
- -----
58
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS October 31, 1997
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
SHARES VALUE
------ -----
UNITED STATES (CONTINUED)
READ-RITE*
Manufacturer of recording heads
for disk drives (Computer
Hardware/Peripherals) ....................... 600,000 $11,943,750
STORAGE TECHNOLOGY*
Designer and manufacturer of
tape- and disk-based
data storage equipment
(Computer Hardware/Peripherals) ............. 350,000 20,540,625
STRUCTURAL DYNAMICS RESEARCH*
Developer of mechanical design
software (Computer Software) ................ 650,000 12,390,625
SYNOPSYS*
Developer of integrated circuit
design software (Computer
Software) ................................... 300,000 11,662,500
TELEGROUP
Alternative provider of
international telecommunications
services (Telecommunications) ............... 197,200 2,156,875
TERADYNE*
Manufacturer of semiconductor
test equipment (Electronics
Capital Equipment) .......................... 400,000 14,975,000
VEECO INSTRUMENTS++
Ion beam etching and surface
measurement systems
(Electronics Capital Equipment) ............. 200,000 7,925,000
VESTCOM INTERNATIONAL
Provider of computer output and
document management
services (Computer and
Business Services) .......................... 300,000 5,418,750
VIEWLOGIC SYSTEMS*
Developer of electronic
design automation software
(Computer Software) ......................... 400,000 9,750,000
-----------
491,230,269
-----------
TOTAL INVESTMENTS 96.88%
(Cost $742,710,990) ............................ 842,104,397
OTHER ASSETS
LESS LIABILITIES 3.12% ......................... 27,080,674
------------
NET ASSETS 100.00% ............................ $869,185,071
============
- ----------
* Non-income producing security.
+ Rule 144A security.
++ Affiliated issuers (a Series' holdings representing 5% or more of the
outstanding voting securities).
Descriptions of companies have not been audited by Deloitte &
Touche LLP.
See Notes to Financial Statements.
-----
59
<PAGE>
================================================================================
STATEMENTS OF ASSETS AND LIABILITIES October 31, 1997
<TABLE>
<CAPTION>
EMERGING GLOBAL GLOBAL
MARKETS GROWTH SMALLER GLOBAL
INTERNATIONAL GROWTH OPPORTUNITIES COMPANIES TECHNOLOGY
FUND FUND FUND FUND FUND
------------- ------------ --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Common stocks* .................. $ 90,160,296 $ 85,994,878 $ 185,548,282 $ 1,028,429,762 $ 842,104,397
Preferred stocks ................ -- -- -- 6,920,703 --
------------ ------------- ------------- --------------- -------------
Total investments .................. 90,160,296 85,994,878 185,548,282 1,035,350,465 842,104,397
Cash ............................... 1,554,950 14,791,110 7,390,541 21,883,789 35,847,573
Receivable for
securities sold ................... 1,341,635 4,481,690 4,886,287 3,815,689 2,102,550
Receivable for
Capital Stock sold ................ 720,842 1,308,258 533,256 4,933,899 4,243,109
Receivable for
dividends and interest ............ 325,097 4,852 324,080 2,742,496 456,477
Unrealized appreciation
on forward
currency contracts ................ 143,198 -- 198,152 737,580 10,386
Expenses prepaid
to shareholder
service agent ..................... 50,154 89,923 106,013 594,399 550,335
Other .............................. 8,360 8,716 11,860 30,322 16,419
------------ ------------- ------------- --------------- -------------
TOTAL ASSETS ....................... 94,304,532 106,679,427 198,998,471 1,070,088,639 885,331,246
------------ ------------- ------------- --------------- -------------
LIABILITIES:
Payable for
securities purchased .............. 404,935 1,519,648 5,159,626 11,319,025 11,539,519
Payable for Capital
Stock repurchased ................. 206,179 685,121 697,143 3,861,731 2,965,367
Unrealized depreciation
on forward
currency contracts ................ 12,292 5,095 77,181 162,883 604
Accrued expenses,
taxes, and other .................. 247,093 330,720 393,278 2,123,306 1,640,685
------------ ------------- ------------- --------------- -------------
TOTAL LIABILITIES .................. 870,499 2,540,584 6,327,228 17,466,945 16,146,175
------------ ------------- ------------- --------------- -------------
NET ASSETS ......................... $ 93,434,033 $ 104,138,843 $ 192,671,243 $ 1,052,621,694 $ 869,185,071
============ ============= ============= =============== =============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A ......................... $ 2,572 $ 6,002 $ 11,847 $ 27,801 $ 38,526
Class B ......................... 367 3,966 2,131 16,468 3,600
Class D ......................... 2,368 4,302 7,093 24,624 15,805
Additional
paid-in capital ................... 79,537,136 107,971,639 155,546,926 955,660,047 639,534,986
Accumulated net
investment loss ................... (11,851) (1,128) (2,528) (9,902) (6,536)
Undistributed/accumulated
net realized gain
(loss) on investments ............. 4,297,539 (3,622,200) 7,209,733 36,840,429 130,196,451
Net unrealized
appreciation of
investments ....................... 10,288,435 2,039,703 33,877,264 81,741,299 107,030,541
Net unrealized
depreciation on
translation of
assets and liabilities
denominated in foreign
currencies and
forward currency
contracts ......................... (682,533) (2,263,441) (3,981,223) (21,679,072) (7,628,302)
------------ ------------- ------------- --------------- -------------
NET ASSETS ......................... $ 93,434,033 $ 104,138,843 $ 192,671,243 $ 1,052,621,694 $ 869,185,071
============ ============= ============= =============== =============
NET ASSETS:
Class A ......................... $ 46,107,207 $ 44,061,005 $ 109,059,872 $ 434,397,158 $ 583,256,963
Class B ......................... $ 6,350,018 $ 28,819,063 $ 19,310,861 $ 247,599,456 $ 53,046,347
Class D ......................... $ 40,976,808 $ 31,258,775 $ 64,300,510 $ 370,625,080 $ 232,881,761
SHARES OF CAPITAL
STOCK OUTSTANDING:
Class A ......................... 2,572,397 6,001,798 11,847,437 27,801,385 38,526,473
Class B ......................... 366,981 3,966,125 2,130,485 16,467,994 3,600,055
Class D ......................... 2,367,991 4,301,925 7,093,440 24,624,081 15,804,927
NET ASSET VALUE
PER SHARE:
CLASS A ............................ $17.92 $7.34 $9.20 $15.62 $15.14
CLASS B ............................ $17.30 $7.27 $9.06 $15.04 $14.73
CLASS D ............................ $17.30 $7.27 $9.06 $15.05 $14.73
</TABLE>
- ----------
* Includes affiliated issuers (a Series' holdings representing 5% or more of
the outstanding voting securities) with cost of $33,161,555 and $18,766,668,
and value of $41,889,165 and $16,750,024, respectively, for the Global
Smaller Companies Fund and the Global Technology Fund.
See Notes to Financial Statements.
- -----
60
<PAGE>
================================================================================
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
EMERGING GLOBAL GLOBAL
MARKETS GROWTH SMALLER GLOBAL
INTERNATIONAL GROWTH OPPORTUNITIES COMPANIES TECHNOLOGY
FUND FUND FUND FUND FUND
------------- ------------ --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends* ......................... $ 1,434,361 $ 1,103,505 $ 1,837,111 $ 14,523,587 $ 2,806,192
Interest ........................... 104,229 417,283 262,461 1,605,052 2,035,983
------------ ----------- ------------ ------------ -------------
TOTAL INVESTMENT INCOME** .......... 1,538,590 1,520,788 2,099,572 16,128,639 4,842,175
------------ ----------- ------------ ------------ -------------
EXPENSES:
Management fees .................... 993,229 1,110,307 1,903,374 9,494,033 8,488,410
Distribution and service fees ...... 601,623 590,104 1,045,286 6,396,967 4,126,955
Shareholder account services ....... 223,102 270,481 473,913 2,610,379 2,355,588
Custody and related services ....... 141,092 142,960 139,586 694,600 441,993
Registration ....................... 71,477 142,330 89,436 372,146 228,705
Shareholder reports
and communications ................ 71,016 75,730 88,324 342,336 404,769
Auditing and legal fees ............ 53,973 57,973 53,973 53,973 53,972
Directors' fees and expenses ....... 8,653 8,194 9,537 17,174 15,253
Miscellaneous ...................... 9,147 4,933 8,556 31,392 41,174
------------ ----------- ------------ ------------ -------------
TOTAL EXPENSES ..................... 2,173,312 2,403,012 3,811,985 20,013,000 16,156,819
------------ ----------- ------------ ------------ -------------
NET INVESTMENT LOSS ................ (634,722) (882,224) (1,712,413) (3,884,361) (11,314,644)
------------ ----------- ------------ ------------ -------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain (loss)
on investments*** ................. 12,612,987 (148,704) 14,475,563 48,603,936 160,468,225
Net realized loss from
foreign currency
transactions*** ................... (6,357,450) (2,880,868) (5,288,647) (7,015,314) (2,395,338)
Net change in unrealized
appreciation/depreciation
of investments ..................... 1,745,746 2,540,710 16,851,124 49,634,066 83,247,639
Net change in unrealized
depreciation on translation
of assets and liabilities
denominated in foreign
currencies and forward
currency contracts ................ 1,928,031 (1,858,237) (1,171,623) (18,276,737) (1,868,340)
------------ ----------- ------------ ------------ -------------
NET GAIN (LOSS) ON
INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS ............. 9,929,314 (2,347,099) 24,866,417 72,945,951 239,452,186
------------ ----------- ------------ ------------ -------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS .................... $ 9,294,592 $(3,229,323) $ 23,154,004 $ 69,061,590 $ 228,137,542
============ =========== ============ ============ =============
- ----------
* Includes dividend income
from affiliated
issuers as follows: ........... -- -- -- $ 288,652 $ 150,923
** Net of foreign taxes
withheld as follows: .......... $165,480 $82,248 $197,366 2,104,238 525,966
*** Includes net realized gain
(including effect of foreign
currency transactions) from
affiliated issuers as follows: . -- -- -- 393,071 29,759,731
See Notes to Financial Statements
</TABLE>
-----
61
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING MARKETS GLOBAL GROWTH
FUND GROWTH FUND OPPORTUNITIES FUND
---------------------------- ---------------------------- ---------------------------
YEAR ENDED OCTOBER 31, YEAR 5/28/96* YEAR 11/1/95*
____________________________ ENDED TO ENDED TO
1997 1996 10/31/97 10/31/96 10/31/97 10/31/96
---------- ---------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment loss ........... $ (634,722) $ (58,354) $ (882,224) $ (165,128) $ (1,712,413) $ (985,123)
Net realized gain
(loss) on investments ........ 12,612,987 3,110,034 (148,704) (904,503) 14,475,563 (572,959)
Net realized gain
(loss) from foreign
currency transactions ......... (6,357,450) 2,141,677 (2,880,868) (48,331) (5,288,647) 280,999
Net change in unrealized
appreciation/depreciation
of investments ............... 1,745,746 6,001,037 2,540,710 (501,007) 16,851,124 17,026,140
Net change in
unrealized
appreciation/depreciation
on translation of assets and
liabilities denominated in
foreign currencies and
forward currency contracts ... 1,928,031 (4,614,858) (1,858,237) (405,204) (1,171,623) (2,809,600)
------------- ------------- ------------- ------------ ------------- -------------
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS .............. 9,294,592 6,579,536 (3,229,323) (2,024,173) 23,154,004 12,939,457
------------- ------------- ------------- ------------ ------------- -------------
DISTRIBUTIONS
TO SHAREHOLDERS:
Net realized gain
on investments:
Class A .................... (2,600,409) (2,689,619) -- -- -- --
Class B .................... (155,283) -- -- -- -- --
Class D .................... (2,512,690) (1,872,543) -- -- -- --
------------- ------------- ------------- ------------ ------------- -------------
DECREASE IN NET
ASSETS FROM
DISTRIBUTIONS ................ (5,268,382) (4,562,162) -- -- -- --
------------- ------------- ------------- ------------ ------------- -------------
CAPITAL SHARE TRANSACTIONS:**
Net proceeds from
sale of shares:
Class A .................... 8,433,918 12,139,764 24,772,191 19,208,602 12,893,684 106,023,483
Class B .................... 3,830,342 2,847,268 21,632,060 11,237,933 9,863,991 9,447,410
Class D .................... 7,260,659 18,419,176 16,452,673 12,152,846 11,847,943 48,762,322
Exchanged from
associated Funds:
Class A .................... 42,509,534 18,336,472 32,454,783 3,554,578 4,188,658 13,737,482
Class B .................... 546,088 52,151 3,193,456 20,098 1,014,306 147,370
Class D .................... 17,279,201 6,116,903 18,323,632 2,931,518 5,672,140 8,540,034
Shares issued in
payment of gain
distributions:
Class A .................... 1,907,643 1,773,043 -- -- -- --
Class B .................... 145,807 -- -- -- -- --
Class D .................... 2,266,472 1,649,485 -- -- -- --
------------- ------------- ------------- ------------ ------------- -------------
Total ......................... 84,179,664 61,334,262 116,828,795 49,105,575 45,480,722 186,658,101
------------- ------------- ------------- ------------ ------------- -------------
Cost of
shares repurchased:
Class A .................... (16,889,634) (15,705,367) (12,525,580) (997,418) (24,937,167) (15,204,795)
Class B .................... (285,808) (5,615) (2,633,033) (133,610) (1,352,960) (34,193)
Class D .................... (13,972,244) (4,688,461) (4,107,703) (404,805) (8,496,389) (3,136,356)
Exchanged into
associated Funds:
Class A .................... (43,254,302) (15,800,882) (19,719,002) (993,426) (5,055,701) (7,098,155)
Class B .................... (811,812) (1,437) (2,336,033) (96,640) (980,251) (169,376)
Class D .................... (21,316,046) (5,428,114) (12,208,736) (386,045) (5,447,579) (3,648,119)
------------- ------------- ------------- ------------ ------------- -------------
Total ......................... (96,529,846) (41,629,876) (53,530,087) (3,011,944) (46,270,047) (29,290,994)
------------- ------------- ------------- ------------ ------------- -------------
INCREASE (DECREASE)
IN NET ASSETS FROM
CAPITAL SHARE
TRANSACTIONS ............... (12,350,182) 19,704,386 63,298,708 46,093,631 (789,325) 157,367,107
------------- ------------- ------------- ------------ ------------- -------------
INCREASE (DECREASE)
IN NET ASSETS ................ (8,323,972) 21,721,760 60,069,385 44,069,458 22,364,679 170,306,564
NET ASSETS:
Beginning of period ........... 101,758,005 80,036,245 44,069,458 -- 170,306,564 --
------------- ------------- ------------- ------------ ------------- -------------
END OF PERIOD ................. $ 93,434,033 $ 101,758,005 $ 104,138,843 $ 44,069,458 $ 192,671,243 $ 170,306,564
============= ============= ============= ============ ============= =============
</TABLE>
- ----------
See footnotes on page 63.
- -----
62
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL SMALLER GLOBAL TECHNOLOGY
COMPANIES FUND FUND
------------------------------- -----------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
------------------------------- -----------------------------
1997 1996 1997 1996
-------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment loss ....................................... $ (3,884,361) $ (1,521,537) $ (11,314,644) $ (6,732,322)
Net realized gain (loss) on investments ................... 48,603,936 36,490,841 160,468,225 (19,588,016)
Net realized gain (loss) from foreign
currency transactions ..................................... (7,015,314) 1,559,761 (2,395,338) 5,689,533
Net change in unrealized appreciation/depreciation
of investments ............................................ 49,634,066 14,883,512 83,247,639 (26,884,293)
Net change in unrealized appreciation/depreciation
on translation of assets and liabilities denominated in
foreign currencies and forward currency contracts ......... (18,276,737) (6,531,471) (1,868,340) (2,377,802)
--------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ......... 69,061,590 44,881,106 228,137,542 (49,892,900)
--------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income-- Class A ........................... -- -- -- (734,205)
Net realized gain on investments:
Class A ................................................ (16,938,227) (7,753,041) -- (29,793,277)
Class B ................................................ (5,226,787) -- -- --
Class D ................................................ (14,328,867) (6,615,915) -- (10,861,462)
--------------- ------------- ------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ................. (36,493,881) (14,368,956) -- (41,388,944)
--------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:**
Net proceeds from sale of shares:
Class A ................................................ 161,210,830 216,788,438 53,544,965 202,973,417
Class B ................................................ 160,923,469 105,243,040 30,651,040 19,512,733
Class D ................................................ 129,977,455 177,428,825 27,634,257 93,281,519
Shares issued in payment of dividends-- Class A ........... -- -- -- 530,711
Exchanged from associated Funds:
Class A ................................................ 38,707,367 71,523,117 131,077,214 49,024,078
Class B ................................................ 8,353,794 576,794 7,378,122 119,863
Class D ................................................ 22,459,122 32,459,050 31,456,056 36,228,561
Shares issued in payment of gain distributions:
Class A ................................................ 15,752,220 7,033,698 -- 27,593,949
Class B ................................................ 4,800,702 -- -- --
Class D ................................................ 13,378,106 6,106,235 -- 10,345,726
--------------- ------------- ------------- -------------
Total ..................................................... 555,563,065 617,159,197 281,741,654 439,610,557
--------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ................................................ (100,080,081) (30,945,950) (119,817,104) (88,142,523)
Class B ................................................ (19,743,793) (900,770) (4,478,196) (232,986)
Class D ................................................ (61,956,065) (17,014,912) (46,935,136) (27,805,782)
Exchanged into associated Funds:
Class A ................................................ (46,909,181) (34,854,479) (141,838,011) (74,146,717)
Class B ................................................ (17,273,307) (326,119) (6,449,635) (142,667)
Class D ................................................ (29,350,663) (11,852,034) (37,285,917) (51,102,325)
--------------- ------------- ------------- -------------
Total ..................................................... (275,313,090) (95,894,264) (356,803,999) (241,573,000)
--------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ................................ 280,249,975 521,264,933 (75,062,345) 198,037,557
--------------- ------------- ------------- -------------
INCREASE IN NET ASSETS .................................... 312,817,684 551,777,083 153,075,197 106,755,713
NET ASSETS:
Beginning of year ......................................... 739,804,010 188,026,927 716,109,874 609,354,161
--------------- ------------- ------------- -------------
END OF YEAR ............................................... $ 1,052,621,694 $ 739,804,010 $ 869,185,071 $ 716,109,874
=============== ============= ============= =============
</TABLE>
- ----------
* Commencement of operations.
** The Fund began offering Class B shares on April 22, 1996, for the then
existing Series.
See Notes to Financial Statements.
------
63
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- 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 commencements 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 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 of 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 a CDSL, if applicable, of 1% imposed on 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 on which a separate vote of any class is
required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. SECURITY VALUATION -- 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. Other
securities not listed on an exchange or security market, or securities in
which there were no transactions, are valued at the mean of the most recent
bid and asked prices. 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. FOREIGN SECURITIES -- Investments in foreign securities will primarily be
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 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
- ------
64
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
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. FORWARD CURRENCY CONTRACTS -- 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. 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. FEDERAL TAXES -- There is no provision for federal income tax. Each Series
has elected 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. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME 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, except that
certain dividends from foreign securities where the ex-dividend dates may
have passed are recorded as soon as the Fund is informed of the dividends.
Interest income is recorded on an accrual basis.
f. MULTIPLE CLASS ALLOCATIONS -- 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 ended
October 31, 1997, distribution and service fees were the only class-specific
expenses.
g. DISTRIBUTIONS TO SHAREHOLDERS -- The treatment for financial statement
purposes of distributions made to shareholders 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 realized 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.
3. PURCHASES AND SALES OF SECURITIES-- Purchases and sales of portfolio
securities, excluding short-term investments, for the year ended October, 31,
1997, were as follows:
SERIES PURCHASES SALES
- ---------------- ----------- -----------
International Fund .................. $ 79,865,255 $ 99,302,267
Emerging Markets
Growth Fund ..................... 112,355,044 64,788,036
Global Growth
Opportunities Fund .............. 145,135,570 151,477,122
Global Smaller
Companies Fund .................. 774,347,865 522,198,426
Global Technology Fund .............. 756,086,666 852,872,407
At October 31, 1997, 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 .................. $ 14,200,412 $ 4,729,831
Emerging Markets
Growth Fund ..................... 9,004,036 9,321,675
Global Growth
Opportunities Fund .............. 45,822,004 15,905,127
Global Smaller
Companies Fund .................. 172,405,198 113,079,933
Global Technology Fund .............. 185,026,748 85,633,341
4. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- 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 the Emerging Markets Growth Fund and 1.00% per annum of each
of the
-----
65
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
other Series' average daily net assets, of which 1.15% and 0.90%, respectively,
are paid to the Subadviser.
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 .................. $ 17,927 $ 134,739
Emerging Markets
Growth Fund ..................... 69,894 552,204
Global Growth
Opportunities Fund .............. 44,965 358,779
Global Smaller
Companies Fund .................. 400,220 3,231,906
Global Technology Fund .............. 210,590 1,713,143
Each Series of the Fund has an Administration, Shareholder Services and
Distribution Plan (the "Plan") with respect to distribution of its shares. Under
the Plan, with respect to Class A shares, 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
ended October 31, 1997, 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 $101,145, $88,081,
$270,908, $997,468, and $1,450,470, respectively, or 0.20%, 0.23%, 0.24%, 0.24%,
and 0.25%, respectively, per annum of the average daily net assets of Class A
shares.
Under the Plan, with respect to Class B and Class D shares, 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 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 provides 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 ended October 31, 1997, 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 .................. $ 48,895 $ 451,583
Emerging Markets Growth Fund ........ 229,582 272,441
Global Growth
Opportunities Fund .............. 152,725 621,653
Global Smaller
Companies Fund .................. 1,899,699 3,499,800
Global Technology Fund .............. 377,706 2,298,779
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year of purchase and on certain redemptions
of Class Ashares occurring within 18 months of purchase. For the year ended
October 31, 1997, such charges were as follows:
SERIES AMOUNT
- ---------------- ---------
International Fund ....................... $ 13,490
Emerging Markets Growth Fund ............. 13,185
Global Growth Opportunities Fund ......... 14,175
Global Smaller Companies Fund ............ 172,825
Global Technology Fund ................... 52,154
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 shares distribution fees retained by the Distributor
for the year ended October 31, 1997, were as follows:
SERIES AMOUNT
- ---------------- ---------
International Fund ....................... $ 10,837
Emerging Markets Growth Fund ............. 59,915
Global Growth Opportunities Fund ......... 28,585
Global Smaller Companies Fund ............ 446,351
Global Technology Fund ................... 86,256
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 ended October 31, 1997, Seligman
Services, Inc. received commissions from the sale of Fund shares and
distribution and service fees, pursuant to the Plan, as follows:
DISTRIBUTION
SERIES COMMISSIONS AND SERVICE FEES
- ----------------- ------------ -----------------
International Fund ............. $ 1,009 $18,553
Emerging Markets
Growth Fund ................ 7,957 5,900
Global Growth
Opportunities Fund ......... 1,921 6,876
Global Smaller
Companies Fund ............. 35,359 45,222
Global Technology Fund ......... 38,720 86,328
- -----
66
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
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 $ 223,102
Emerging Markets Growth Fund 270,481
Global Growth Opportunities Fund 473,913
Global Smaller Companies Fund 2,610,379
Global Technology Fund 2,355,588
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.
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, 1997 are included in other
liabilities:
SERIES AMOUNT
- ---------------- --------
International Fund $11,851
Emerging Markets GrowthFund 1,128
Global Growth Opportunities Fund 2,528
Global Smaller Companies Fund 9,902
Global Technology Fund 6,536
5. COMMITTED LINE OF CREDIT -- The Fund has a $100 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
0.50% 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. To
date, the Fund has not borrowed from the credit facility.
6. LOSS CARRYFORWARD -- 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, 1997, the
Emerging Markets Growth Fund had a net capital loss carryforward for federal
income tax purposes of $3,465,552, which is available for offset against future
taxable capital gains, expiring in various amounts through 2005. Accordingly, no
capital gain distributions are expected to be paid to shareholders until net
capital gains have been realized in excess of the available capital loss
carryforward.
7. AFFILIATED ISSUERS -- As defined under the Investment Company Act of 1940, as
amended, affiliated issuers are those issuers in which a Series' holdings
represent 5% or more of the outstanding voting securities. A summary of the
Fund's transactions in the securities of these issuers during the year ended
October 31, 1997 is as follows:
<TABLE>
<CAPTION>
GROSS
PURCHASES GROSS SALES
BEGINNING AND AND ENDING REALIZED DIVIDEND ENDING
AFFILIATE SHARES ADDITIONS REDUCTIONS SHARES GAIN INCOME VALUE
- --------- ------ ---------- ----------- ------ -------- ------- ---------
GLOBAL SMALLER
COMPANIES FUND
<S> <C> <C> <C> <C> <C> <C> <C>
La Doria ................... 857,766 1,394,400 -- 2,252,166 $ -- $163,926 $ 6,478,379
L'Europeenne
d'Extincteurs ............ 131,660 32,282 21,540 142,402 393,071 82,617 9,497,650
FactSet Research
Systems ................. -- 500,000 -- 500,000 -- -- 13,343,750
Prodega .................... 4,450 7,903 -- 12,353 -- 42,109 6,460,636
Simon Transportation
Services ................. -- 270,000 -- 270,000 -- -- 6,108,750
----------- -------- -----------
$ 393,071* $288,652 $41,889,165
=========== ======== ===========
GLOBAL TECHNOLOGY
FUND
Asyst Technologies ......... 300,000 150,000 450,000 -- $14,740,041 $ -- $ --
Linx Printing
Technology ............... 820,000 -- 250,000 570,000 281,287 42,459 1,456,385
IlionGroup ................. 1,669,914 -- 53,000 1,616,914 54,767 108,464 7,368,639
Veeco Instruments .......... 400,000 400,000 600,000 200,000 14,683,636 -- 7,925,000
----------- -------- -----------
$29,759,731* $150,923 $16,750,024
=========== ======== ===========
</TABLE>
- ----------
* Includes net realized gain (loss) from foreign currency transactions of
$(141,739) and $20,294, for the Global Smaller Companies Fund and the Global
Technology Fund, respectively.
-----
67
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
8. CAPITAL STOCK SHARE TRANSACTIONS -- 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, 1997, 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>
INTERNATIONAL EMERGING MARKETS GLOBAL GROWTH
FUND GROWTH FUND OPPORTUNITIES FUND
-------------------------- -------------------------- --------------------------
YEAR 5/28/96* YEAR 11/1/95*
YEAR ENDED OCTOBER 31, ENDED TO ENDED TO
--------------------------
1997 1996 10/31/97 10/31/96 10/31/97 10/31/96
------------ ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares:
Class A 469,762 707,786 2,993,423 2,715,379 1,449,286 14,315,714
Class B 219,118 167,160 2,612,415 1,589,508 1,123,386 1,161,258
Class D 418,939 1,095,491 2,012,007 1,719,727 1,356,808 6,425,478
Exchanged from
associated Funds:
Class A 2,324,501 1,076,633 4,057,896 501,328 476,273 1,797,362
Class B 30,506 3,104 391,346 2,904 110,609 18,033
Class D 987,349 365,666 2,226,146 415,187 649,300 1,108,493
Shares issued
in payment
of gain
distributions:
Class A 112,811 106,939 -- -- -- --
Class B 8,858 -- -- -- -- --
Class D 137,696 101,382 -- -- -- --
--------- --------- --------- --------- --------- ---------
Total 4,709,540 3,624,161 14,293,233 6,944,033 5,165,662 24,826,338
--------- --------- --------- --------- --------- ---------
Shares repurchased:
Class A (966,373) (918,125) (1,498,674) (143,005) (2,814,964) (1,897,331)
Class B (15,472) (327) (312,134) (19,141) (147,394) (4,203)
Class D (822,399) (278,839) (502,678) (58,321) (965,125) (393,805)
Exchanged into
associated Funds:
Class A (2,337,951) (922,041) (2,482,147) (142,402) (568,846) (910,057)
Class B (45,879) (87) (284,989) (13,784) (110,456) (20,748)
Class D (1,216,560) (323,609) (1,454,997) (55,146) (626,078) (461,631)
--------- --------- --------- --------- --------- ---------
Total (5,404,634) (2,443,028) (6,535,619) (431,799) (5,232,863) (3,687,775)
--------- --------- --------- --------- --------- ---------
Increase
(decrease) in shares (695,094) 1,181,133 7,757,614 6,512,234 (67,201) 21,138,563
========= ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SMALLER GLOBAL TECHNOLOGY
COMPANIES FUND FUND
-------------------------- --------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Sale of shares:
<S> <C> <C> <C> <C>
Class A 10,709,397 14,815,923 3,700,869 17,384,851
Class B 11,006,362 7,109,733 2,147,619 1,722,202
Class D 8,914,612 12,391,966 1,953,820 8,129,479
Shares issued in payment
of dividends-- Class A -- -- -- 46,553
Exchanged from
associated Funds:
Class A 2,567,331 4,872,301 9,603,055 4,299,624
Class B 578,628 38,810 599,186 10,746
Class D 1,545,821 2,260,491 2,118,807 3,216,569
Shares issued
in payment of
gain distributions:
Class A 1,069,396 543,143 -- 2,420,521
Class B 335,948 -- -- --
Class D 936,187 481,944 -- 918,803
--------- --------- --------- ---------
Total 37,663,682 42,514,311 20,123,356 38,149,348
--------- --------- --------- ---------
Shares repurchased:
Class A (6,615,043) (2,088,149) (8,669,868) (7,730,984)
Class B (1,358,539) (60,958) (325,415) (21,522)
Class D (4,192,374) (1,186,520) (3,500,176) (2,466,759)
Exchanged into
associated Funds:
Class A (3,071,754) (2,373,469) (10,296,821) (6,549,438)
Class B (1,159,574) (22,416) (519,418) (13,343)
Class D (1,979,913) (822,351) (2,561,251) (4,547,765)
--------- --------- --------- ---------
Total (18,377,197) (6,553,863) (25,872,949) (21,329,811)
--------- --------- --------- ---------
Increase
(decrease) in shares 19,286,485 35,960,448 (5,749,593) 16,819,537
========== ========== ========== ==========
</TABLE>
- ----------------
* Commencement of operations.
- ------
68
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
9. OUTSTANDING FORWARD EXCHANGE CURRENCY CONTRACTS-- At October 31, 1997, 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 DATE VALUE US $ (DEPRECIATION)
- ----------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INTERNATIONAL FUND
Purchases:
German deutschemarks ......................... 166,181 96,757 11/03/97 96,172 $ (585)
Swedish kronor ............................... 480,790 64,246 11/03/97 64,054 (192)
Hong Kong dollars ............................ 932,460 120,000 11/21/97 120,300 300
---------
(477)
---------
Sales:
Netherland guilders .......................... 382,720 197,584 11/03/97 196,418 1,166
Swiss francs ................................. 706,505 504,574 11/03/97 502,725 1,849
Australian dollars ........................... 174,218 122,162 11/05/97 122,240 (78)
Japanese yen ................................. 25,705,417 213,660 11/05/97 213,731 (71)
Japanese yen ................................. 944,000,000 8,000,000 11/20/97 7,860,117 139,883
Hong Kong dollars ............................ 4,583,740 580,000 11/21/97 591,366 (11,366)
---------
131,383
---------
$ 130,906
=========
EMERGING MARKETS GROWTH FUND
Sales:
Hong Kong dollars ............................ 2,054,780 260,000 11/21/97 265,095 $ (5,095)
=========
GLOBAL GROWTH OPPORTUNITIES FUND
Purchases:
Singapore dollars ............................ 1,115,458 708,227 11/03/97 708,002 $ (225)
Netherland guilders .......................... 1,197,587 615,789 11/04/97 614,620 (1,169)
Swiss francs ................................. 1,109,521 791,723 11/04/97 789,498 (2,225)
Japanese yen ................................. 1,180,000,000 9,868,036 11/20/97 9,825,146 (42,890)
Hong Kong dollars ............................ 4,446,855 569,964 11/21/97 573,706 3,742
---------
(42,767)
---------
Sales:
Japanese yen ................................. 178,156,208 1,480,809 11/04/97 1,481,302 (493)
Japanese yen ................................. 1,180,000,000 10,000,000 11/20/97 9,825,146 174,854
Hong Kong dollars ............................ 12,170,620 1,540,000 11/21/97 1,570,179 (30,179)
Japanese yen ................................. 1,199,350,000 10,000,000 11/21/97 9,980,444 19,556
---------
163,738
---------
$ 120,971
=========
GLOBAL SMALLER COMPANIES FUND
Purchases:
German deutschemarks ......................... 2,099,320 1,222,312 11/03/97 1,214,920 $ (7,392)
Swiss francs ................................. 732,782 523,341 11/03/97 521,423 (1,918)
French francs ................................ 588,808 101,870 11/04/97 101,739 (131)
British pounds ............................... 262,780 439,710 11/05/97 440,275 565
Hong Kong dollars ............................ 7,770,500 1,000,000 11/21/97 1,002,503 2,503
---------
(6,373)
---------
Sales:
S. Korean wons ............................... 696,832,112 721,657 11/03/97 721,657 --
Swedish kronor ............................... 307,299 41,064 11/03/97 40,940 124
Malaysia ringgits ............................ 333,649 97,644 11/04/97 99,315 (1,671)
Singapore dollars ............................ 2,202,084 1,395,048 11/04/97 1,397,705 (2,657)
Japanese yen ................................. 63,088,294 524,381 11/05/97 524,556 (175)
Japanese yen ................................. 4,956,000,000 42,000,000 11/20/97 41,265,612 734,388
Hong Kong dollars ............................ 60,062,800 7,600,000 11/21/97 7,748,939 (148,939)
---------
581,070
---------
$ 574,697
=========
GLOBAL TECHNOLOGY FUND
Purchases:
French francs ................................ 131,319 22,814 11/03/97 22,690 $ (124)
British pounds ............................... 83,464 139,668 11/04/97 139,839 171
French francs ................................ 2,154,393 372,732 11/04/97 372,252 (480)
---------
(433)
---------
Sales:
Japanese yen ................................. 2,350,605,000 19,605,121 11/28/97 19,594,906 10,215
---------
$ 9,782
=========
</TABLE>
-----
69
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors 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.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased Fund shares at net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value, and then sold their shares at the net asset value 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. Total returns for
periods of less than one year are not annualized.
"Average commission rate paid" represents the average commissions paid by
each 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 the commissions were paid. This rate is
provided for the periods beginning November 1, 1995.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
INTERNATIONAL FUND YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ................ $17.17 $16.71 $17.67 $15.98 $11.89
------ ------ ------ ------ ------
Net investment income (loss) ...................... (0.04) 0.05 0.06 0.04 0.04
Net realized and unrealized
investment gain (loss) ........................... 2.47 1.77 (0.42) 0.91 4.25
Net realized and unrealized
gain (loss) on foreign
currency transactions ............................. (0.79) (0.44) 0.09 1.08 (0.17)
------ ------ ------ ------ ------
INCREASE (DECREASE)
FROM INVESTMENT OPERATIONS ....................... 1.64 1.38 (0.27) 2.03 4.12
Dividends paid -- -- -- (0.01) (0.03)
Distributions from
net gain realized ................................ (0.89) (0.92) (0.69) (0.33) --
------ ------ ------ ------ ------
NET INCREASE
(DECREASE)
IN NET ASSET VALUE ............................... 0.75 0.46 (0.96) 1.69 4.09
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR ...................... $17.92 $17.17 $16.71 $17.67 $15.98
====== ====== ====== ====== ======
TOTAL RETURN
BASED ON NET ASSET VALUE: ........................ 9.83% 8.43% (1.24)% 12.85% 34.78%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .................... 1.78% 1.81% 1.69% 1.63% 1.75%
Net investment income
(loss) to average net assets ..................... (0.23)% 0.28% 0.35% 0.27% 0.27%
Portfolio turnover ................................ 83.11% 55.71% 60.70% 39.59% 46.17%
Average commission rate paid ...................... $0.0201 $0.0180
NET ASSETS, END OF YEAR
(000s omitted) ................................... $46,107 $50,998 $48,763 $62,922 $33,134
Without expense reimbursement
and/or management fee waiver:**
Net investment loss per share ................... $(0.04)
Ratios:
Expenses to average net assets .................. 2.30%
Net investment
loss to average net assets ..................... (0.28)%
</TABLE>
- ----------
See footnotes on page 75.
- -----
70
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS D
---------------------- ---------------------------------------------------------
YEAR 4/22/96* YEAR ENDED OCTOBER 31, 9/21/93*
INTERNATIONAL FUND (CONTINUED) ENDED TO ----------------------------------------------- TO
PER SHARE OPERATING PERFORMANCE: 10/31/97 10/31/96 1997 1996 1995 1994 10/31/93
-------- -------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................... $16.74 $17.38 $16.74 $16.43 $17.53 $15.96 $15.23
------ ------ ------ ------ ------ ------ ------
Net investment loss ..................... (0.18) (0.03) (0.18) (0.08) (0.07) (0.09) (0.03)
Net realized and unrealized
investment gain (loss) ................. 2.42 (0.54) 2.42 1.75 (0.43) 0.91 1.17
Net realized and unrealized
gain (loss) on foreign
currency transactions ................... (0.79) (0.07) (0.79) (0.44) 0.09 1.08 (0.41)
------ ------ ------ ------ ------ ------ ------
INCREASE (DECREASE)
FROM INVESTMENT
OPERATIONS ............................. 1.45 (0.64) 1.45 1.23 (0.41) 1.90 0.73
Dividends paid .......................... -- -- -- -- -- -- --
Distributions from net
gain realized .......................... (0.89) -- (0.89) (0.92) (0.69) (0.33) --
------ ------ ------ ------ ------ ------ ------
NET INCREASE
(DECREASE) IN
NET ASSET VALUE ........................ 0.56 (0.64) 0.56 0.31 (1.10) 1.57 0.73
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE,
END OF PERIOD .......................... $17.30 $16.74 $17.30 $16.74 $16.43 $17.53 $15.96
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSETVALUE: ..................... 8.90% (3.68)% 8.90% 7.62% (2.08)% 12.03% 4.79%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .......... 2.58% 2.66%+ 2.58% 2.64% 2.50% 2.50% 2.50%+
Net investment loss
to average net assets .................. (1.03)% (0.35)%+ (1.03)% (0.47)% (0.44)% (0.53)% (1.86)%+
Portfolio turnover ...................... 83.11% 55.71%+++ 83.11% 55.71% 60.70% 39.59% 46.17%++
Average commission
rate paid .............................. $0.0201 $0.0180+++ $0.0201 $0.0180
NET ASSETS, END OF
PERIOD (000s omitted) .................. $6,350 $2,843 $40,977 $47,917 $31,273 $19,903 $1,648
Without expense
reimbursement and/or
management fee waiver:**
Net investment loss per share ......... $(0.09) $(0.11) $(0.11)
Ratios:
Expenses to average net assets ........ 2.62% 2.67% 8.49%+
Net investment loss to
average net assets (0.56)% (0.70)% (7.84)%+
</TABLE>
- ----------
See footnotes on page 75.
-----
71
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
----------------------- ----------------------
YEAR 5/28/96* YEAR 5/28/96*
EMERGING MARKETS GROWTH FUND ENDED TO ENDED TO
PER SHARE OPERATING PERFORMANCE: 10/31/97 10/31/96 10/31/97 10/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............................ $6.78 $7.14 $6.76 $7.14
----- ----- ----- -----
Net investment loss ............................................. (0.05) (0.02) (0.11) (0.04)
Net realized and unrealized
investment gain (loss) ......................................... 1.05 (0.25) 1.06 (0.25)
Net realized and unrealized
loss on foreign currency transactions .......................... (0.44) (0.09) (0.44) (0.09)
----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS .................. 0.56 (0.36) 0.51 (0.38)
Dividends paid .................................................. -- -- -- --
Distributions from net gain realized ............................ -- -- -- --
----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ...................... 0.56 (0.36) 0.51 (0.38)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD .................................. $7.34 $6.78 $7.27 $6.76
===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: .......................... 8.26% (5.04)% 7.54% (5.32)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .................................. 2.27% 2.22%+ 3.04% 3.00%+
Net investment loss to average net assets ....................... (0.56)% (0.69)%+ (1.33)% (1.47)%+
Portfolio turnover .............................................. 84.09% 12.24% 84.09% 12.24%
Average commission rate paid .................................... $0.0013 $0.0156 $0.0013 $0.0156
NET ASSETS, END OF PERIOD (000s omitted) ........................ $44,061 $19,864 $28,819 $10,541
Without expense reimbursement
and/or management fee waiver:**
Net investment loss per share ................................. $(0.05) $(0.07)
Ratios:
Expenses to average net assets ................................ 3.02%+ 3.80%+
Net investment loss to average net assets ..................... (1.49)%+ (2.27)%+
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------
YEAR 5/28/96*
EMERGING MARKETS GROWTH FUND ENDED TO
PER SHARE OPERATING PERFORMANCE: 10/31/97 10/31/96
-------- --------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............................ $6.76 $7.14
----- -----
Net investment loss ............................................. (0.11) (0.04)
Net realized and unrealized
investment gain (loss) ......................................... 1.06 (0.25)
Net realized and unrealized
loss on foreign currency transactions .......................... (0.44) (0.09)
----- -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS .................. 0.51 (0.38)
Dividends paid .................................................. -- --
Distributions from net gain realized ............................ -- --
----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ...................... 0.51 (0.38)
----- -----
NET ASSET VALUE, END OF PERIOD .................................. $7.27 $6.76
===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: .......................... 7.54% (5.32)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .................................. 3.04% 3.00%+
Net investment loss to average net assets ....................... (1.33)% (1.47)%+
Portfolio turnover .............................................. 84.09% 12.24%
Average commission rate paid .................................... $0.0013 $0.0156
NET ASSETS, END OF PERIOD (000s omitted) ........................ $31,259 $13,664
Without expense reimbursement and/or management fee waiver:**
Net investment loss per share ................................. $(0.07)
Ratios: .......................................................
Expenses to average net assets ................................ 3.80%+
Net investment loss to average net assets ..................... (2.27)%+
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------ ------------------------
YEAR 11/1/95* YEAR 4/22/96*
GLOBAL GROWTH OPPORTUNITIES FUND ENDED TO ENDED TO
PER SHARE OPERATING PERFORMANCE: 10/31/97 10/31/96 10/31/97 10/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ...................... $8.08 $7.14 $8.02 $8.04
----- ----- ----- -----
Net investment loss ....................................... (0.05) (0.03) (0.12) (0.04)
Net realized and
unrealized investment gain ............................... 1.47 1.12 1.46 0.06
Net realized and
unrealized loss on
foreign currency transactions ............................ (0.30) (0.15) (0.30) (0.04)
----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ............ 1.12 0.94 1.04 (0.02)
Dividends paid ............................................ -- -- -- --
Distributions from net gain realized ...................... -- -- -- --
----- ----- ----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ................ 1.12 0.94 1.04 (0.02)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ............................ $9.20 $8.08 $9.06 $8.02
===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: .................... 13.86% 13.17% 12.97% (0.25)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ............................ 1.69% 1.91% 2.45% 2.53%+
Net investment loss to average net assets ................. (0.59)% (0.53)% (1.35)% (1.13)%+
Portfolio turnover ........................................ 79.32% 31.44% 79.32% 31.44%+++
Average commission rate paid .............................. $0.0251 $0.0160 $0.0251 $0.0160+++
NET ASSETS, END OF PERIOD (000s omitted) .................. $109,060 $107,509 $19,311 $ 9,257
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------
YEAR 11/1/95*
GLOBAL GROWTH OPPORTUNITIES FUND ENDED TO
PER SHARE OPERATING PERFORMANCE: 10/31/97 10/31/96
-------- --------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ...................... $8.02 $7.14
----- -----
Net investment loss ....................................... (0.12) (0.09)
Net realized and unrealized investment gain ............... 1.46 1.12
Net realized and unrealized loss on
foreign currency transactions ............................ (0.30) (0.15)
----- -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ............ 1.04 0.88
Dividends paid ............................................ -- --
Distributions from net gain realized ...................... -- --
----- -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ................ 1.04 0.88
----- -----
NET ASSET VALUE, END OF PERIOD ............................ $9.06 $8.02
===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: .................... 12.97% 12.33%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ............................ 2.45% 2.67%
Net investment loss to average net assets ................. (1.35)% (1.25)%
Portfolio turnover ........................................ 79.32% 31.44%
Average commission rate paid .............................. $0.0251 $0.0160
NET ASSETS, END OF PERIOD (000s omitted) .................. $64,300 $53,540
</TABLE>
- ----------
See footnotes on page 75.
- -----
72
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
--------- --------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR .............. $15.14 $13.90 $11.93 $ 9.98 $7.15
------ ------ ------ ------ -----
Net investment income (loss) .................... -- -- (0.02) (0.08) (0.02)
Net realized and unrealized
investment gain ................................ 1.61 2.38 2.24 1.57 3.07
Net realized and unrealized
gain (loss) on foreign
currency transactions .......................... (0.40) (0.18) 0.08 0.52 (0.20)
------ ------ ------ ------ -----
INCREASE FROM INVESTMENT OPERATIONS ............. 1.21 2.20 2.30 2.01 2.85
Dividends paid -- -- -- -- (0.02)
Distributions from net gain realized ............ (0.73) (0.96) (0.33) (0.06) --
------ ------ ------ ------ -----
NET INCREASE IN NET ASSET VALUE ................. 0.48 1.24 1.97 1.95 2.83
------ ------ ------ ------ -----
NET ASSET VALUE, END OF YEAR .................... $15.62 $15.14 $13.90 $11.93 $9.98
====== ====== ====== ====== =====
TOTAL RETURN BASED ON NET ASSET VALUE: .......... 8.28% 16.95% 20.10% 20.28% 39.86%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .................. 1.67% 1.75% 1.83% 1.92% 1.98%
Net investment income (loss)
to average net assets .......................... 0.02% 0.01% (0.20)% (0.77)% (0.29)%
Portfolio turnover .............................. 57.24% 45.38% 63.05% 62.47% 60.03%
Average commission rate paid .................... $0.0166 $0.0211
NET ASSETS, END OF YEAR (000s omitted) .......... $434,397 $350,359 $102,479 $46,269 $20,703
Without management fee waiver and
expense reimbursement:**
Net investment loss per share ................. $(0.18)
Ratios:
Expenses to average net assets ................ 3.90%
Net investment loss to average net assets ..... (2.21)%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------
YEAR 4/22/96*
ENDED TO
PER SHARE OPERATING PERFORMANCE: 10/31/97 10/31/96
-------- --------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ......................... $14.72 $14.44
------ ------
Net investment loss .......................................... (0.11) (0.06)
Net realized and unrealized investment gain .................. 1.56 0.33
Net realized and unrealized gain (loss) on foreign
currency transactions ........................................ (0.40) 0.01
------ ------
INCREASE FROM INVESTMENT OPERATIONS .......................... 1.05 0.28
Dividends paid -- --
Distributions from net gain realized ......................... (0.73) --
------ ------
NET INCREASE IN NET ASSET VALUE .............................. 0.32 0.28
------ ------
NET ASSET VALUE, END OF PERIOD ............................... $15.04 $14.72
====== ======
TOTAL RETURN BASED ON NET ASSET VALUE: ....................... 7.39% 1.94%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ............................... 2.43% 2.54%+
Net investment loss to average net assets .................... (0.74)% (0.80)%+
Portfolio turnover ........................................... 57.24% 45.38%+++
Average commission rate paid ................................. $0.0166 $0.0211+++
NET ASSETS, END OF PERIOD (000s omitted) ..................... $247,600 $103,968
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>
CLASS D
----------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 5/3/93*
----------------------------------------------------------- TO
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 10/31/93
-------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............ $14.72 $13.63 $11.80 $ 9.94 $8.52
------ ------ ------ ------ ------
Net investment loss ............................. (0.11) (0.11) (0.12) (0.16) (0.05)
Net realized and unrealized
investment gain ................................ 1.57 2.34 2.20 1.57 1.60
Net realized and unrealized
gain (loss) on foreign
currency transactions .......................... (0.40) (0.18) 0.08 0.51 (0.13)
------ ------ ------ ------ ------
INCREASE FROM INVESTMENT OPERATIONS ............. 1.06 2.05 2.16 1.92 1.42
Dividends paid -- -- -- -- --
Distributions from net gain realized ............ (0.73) (0.96) (0.33) (0.06) --
------ ------ ------ ------ ------
NET INCREASE IN NET ASSET VALUE ................. 0.33 1.09 1.83 1.86 1.42
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .................. $15.05 $14.72 $13.63 $11.80 $9.94
====== ====== ====== ====== =====
TOTAL RETURN BASED ON NET ASSET VALUE: .......... 7.47% 16.14% 19.11% 19.45% 16.67%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .................. 2.43% 2.51% 2.61% 2.70% 2.75%+
Net investment loss to average net assets ....... (0.74)% (0.75)% (0.97)% (1.53)% (1.35)%+
Portfolio turnover .............................. 57.24% 45.38% 63.05% 62.47% 60.03%++
Average commission rate paid .................... $0.0166 $0.0211
NET ASSETS, END OF PERIOD (000s omitted) ........ $370,625 $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 loss
to average net assets ......................... (2.85)%+
</TABLE>
- ----------
See footnotes on page 75.
-----
73
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------
YEAR ENDED OCTOBER 31, 5/23/94*
GLOBAL TECHNOLOGY FUND ------------------------------------------ TO
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 10/31/94
--------- -------- -------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $11.31 $13.05 $ 8.37 $7.14
------ ------ ------ -----
Net investment loss ............................................ (0.16) (0.08) (0.10) (0.01)
Net realized and unrealized
investment gain (loss) ........................................ 4.06 (0.92) 4.90 1.08
Net realized and unrealized gain
(loss) on foreign currency transactions ....................... (0.07) 0.05 (0.05) 0.16
------ ------ ------ -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ................. 3.83 (0.95) 4.75 1.23
Dividends paid ................................................. -- (0.02) -- --
Distributions from net gain realized ........................... -- (0.77) (0.07) --
------ ------ ------ -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ..................... 3.83 (1.74) 4.68 1.23
------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD ................................. $15.14 $11.31 $13.05 $8.37
====== ====== ====== =====
TOTAL RETURN BASED ON NET ASSETVALUE: .......................... 33.86% (7.33)% 57.31% 17.23%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................................. 1.67% 1.75% 1.91% 2.00%+
Net investment loss to average net assets ...................... (1.10)% (0.74)% (0.89)% (0.45)%+
Portfolio turnover ............................................. 94.06% 73.00% 87.42% 29.20%
Average commission rate paid ................................... $0.0226 $0.0182
NET ASSETS, END OF PERIOD (000s omitted) ....................... $583,257 $499,858 $447,732 $50,719
Without expense reimbursement
and/or management fee waiver:**
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>
- ----------
See footnotes on page 75.
- -----
74
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
------------------------
YEAR 4/22/96*
GLOBAL TECHNOLOGY FUND (CONTINUED) ENDED TO
PER SHARE OPERATING PERFORMANCE: 10/31/97 10/31/96
--------- ---------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ....................................... $11.09 $11.47
------ ------
Net investment loss ........................................................ (0.26) (0.08)
Net realized and unrealized investment gain (loss) ......................... 3.97 (0.39)
Net realized and unrealized gain (loss) on foreign
currency transactions .................................................... (0.07) 0.09
------ ------
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ............................. 3.64 (0.38)
Dividends paid ............................................................. -- --
Distributions from net gain realized ....................................... -- --
------ ------
NET INCREASE (DECREASE) IN NET ASSET VALUE ................................. 3.64 (0.38)
------ ------
NET ASSET VALUE, END OF PERIOD ............................................. $14.73 $11.09
====== ======
TOTAL RETURN BASED ON NET ASSETVALUE: ...................................... 32.82% (3.31)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ............................................. 2.42% 2.51%+
Net investment loss to average net assets .................................. (1.85)% (1.40)%+
Portfolio turnover ......................................................... 94.06% 73.00%+++
Average commission rate paid ............................................... $0.0226 $0.0182+++
NET ASSETS, END OF PERIOD (000s omitted) ................................... $53,046 $18,840
Without expense reimbursement and/or management fee waiver:**
Net investment loss per share ............................................
Ratios:
Expenses to average net assets ...........................................
Net investment loss to average net assets ................................
</TABLE>
<TABLE>
<CAPTION>
CLASS D
-----------------------------------------------------------
YEAR ENDED OCTOBER 31, 5/23/94*
GLOBAL TECHNOLOGY FUND (CONTINUED) ------------------------------------------- TO
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 10/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ...................... $11.09 $12.89 $ 8.34 $7.14
------ ------ ------ -----
Net investment loss ....................................... (0.26) (0.17) (0.18) (0.04)
Net realized and unrealized investment gain (loss) ........ 3.97 (0.91) 4.85 1.08
Net realized and unrealized gain (loss) on foreign
currency transactions ................................... (0.07) 0.05 (0.05) 0.16
------ ------ ------ -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ............ 3.64 (1.03) 4.62 1.20
Dividends paid ............................................ -- -- -- --
Distributions from net gain realized ...................... -- (0.77) (0.07) --
------ ------ ------ -----
NET INCREASE (DECREASE) IN NET ASSET VALUE ................ 3.64 (1.80) 4.55 1.20
------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD ............................ $14.73 $11.09 $12.89 $8.34
====== ====== ====== =====
TOTAL RETURN BASED ON NET ASSETVALUE: ..................... 32.82% (8.07)% 55.95% 16.81%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ............................ 2.42% 2.52% 2.66% 2.75%+
Net investment loss to average net assets ................. (1.85)% (1.50)% (1.63)% (1.22)%+
Portfolio turnover ........................................ 94.06% 73.00% 87.42% 29.20%
Average commission rate paid .............................. $0.0226 $0.0182
NET ASSETS, END OF PERIOD (000s omitted) .................. $232,882 $197,412 $161,622 $6,499
Without expense reimbursement
and/or management fee waiver:**
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, 1993.
+++ For the year ended October 31, 1996.
See Notes to Financial Statements.
-----
75
<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, 1997, the related statements of operations for
the year then ended and of changes in net assets (1) for the year then ended,
(2) for the year ended October 31, 1996 for the International Fund, the Global
Growth Opportunities Fund, the Global Smaller Companies Fund, and the Global
Technology 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, 1997, 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, 1997, 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 5, 1997
- --------------------------------------------------------------------------------
- -----
76
<PAGE>
================================================================================
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
FRED E. BROWN
DIRECTOR EMERITUS
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2
TRUSTEE, Geraldine P. Dodge Foundation
CHAIRMAN OF THE BOARD OF TRUSTEES, St. George's School
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
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3
RETIRED VICE PRESIDENT, Pfizer Inc.
DIRECTOR, USLIFECorporation
JAMES N. WHITSON 2
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- --------------------------------------------------------------------------------
-----
77
<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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
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
Services Plan
(800) 622-4597 24-Hour Automated
Telephone Access
Service
- --------------------------------------------------------------------------------
- -----
78
<PAGE>
================================================================================
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in the fund's portfolio. For tax purposes,
these profits may be considered short-, mid-, or long-term capital gains and may
be taxed at different rates.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES LOAD (CDSL) -- Depending on the class of shares owned,
a fee charged by a mutual fund when shares are sold back to the fund (the CDSL
expires after a fixed time period).
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE (OP) -- The price at which a mutual fund's share can be
purchased. The offering price per share is the current net asset value plus any
sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- Document that contains updated or more
detailed information about a mutual fund and supplements the prospectus. It is
available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The AVERAGE ANNUAL TOTAL
RETURN represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
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Adapted from the Investment Company Institute's 1997 MUTUAL FUND FACT BOOK.
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BENCHMARKS
LIPPER EMERGING MARKETS FUNDS AVERAGE:*
This average is comprised of mutual funds which seek long-term capital
appreciation by investing at least 65% of total assets in emerging market equity
securities, where "emerging market" is defined by a country's GNP per capita or
other economic measures. This average was comprised of 129 mutual funds at
October 31, 1997.
LIPPER INTERNATIONAL FUNDS AVERAGE:*
This average is comprised of mutual funds which invest their assets in equity
securities whose primary trading markets are outside the US. This average was
comprised of 424 mutual funds at October 31, 1997.
LIPPER GLOBAL FUNDS AVERAGE:*
This average is comprised of mutual funds which invest at least 25% of their
portfolios in equity securities traded outside the US, and may own US securities
as well. This average was comprised of 191 mutual funds at October 31, 1997.
LIPPER GLOBAL SMALL CAP FUNDS AVERAGE:*
This average is comprised of mutual funds which invest at least 25% of their
portfolios in equity securities whose primary trading markets are outside the
US, and which limit at least 65% of their investments to companies with market
capitalizations less than US $1 billion at the time of purchase. This average
was comprised of 32 mutual funds at October 31, 1997.
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE (EUROPE, AUSTRALASIA, FAR EAST) INDEX
(MSCIEAFE INDEX): This is a market-capitalization-weighted equity index
comprised of 20 countries and representing the developed stock markets outside
North America.
MSCI WORLD INDEX:
This is a market-capitalization-weighted equity index comprised of 22 countries
and representing the world's developed stock markets.
MSCI EMERGING MARKETS FREE INDEX:
This is a market-capitalization-weighted equity index comprised of 26 countries
and representing the investment opportunities in the developing world available
to foreign investors.
SALOMON BROTHERS WORLD EXTENDED MARKET INDEX:
This index represents the small-capitalization stock universe. It comprises the
bottom 20% of the available capital of each country included in the Salomon
Brothers World Broad Market Index (BMI), and includes 75% of the BMI issues. The
BMI universe covers 22 countries and includes listed shares of companies with a
total available market capitalization of at least the local equivalent of US
$100 million.
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* Lipper Analytical Services Inc. calculates the Averages monthly. These monthly
results are used to determine each Average's performance versus the total
returns for each fund.
Adapted from materials from LIPPER ANALYTICAL SERVICES INC., MORGAN STANLEY
CAPITAL INTERNATIONAL, and SALOMON BROTHERS INCORPORATED.
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SELIGMAN FINANCIAL SERVICES
AN AFFILIATE OF
[LOGO]
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.
[LOGO]
EQSH2 10/97 Printed on Recycled Paper
