J. & W. Seligman & Co.
Incorporated
May 27, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Attention: File Desk
Re: Seligman Henderson Global Fund Series, Inc. (the "Fund")
Post-Effective Amendment No. 28
File No. 33-44186 and 811-6485
Dear Sirs:
Following is the Edgarized filing of Post-Effective Amendment No. 28 to
the Registration Statement on Form N-1A of the Fund, filed pursuant to a request
granted under Rule 485(b)(I)(vii) of the Securities Act of 1933 ("1933 Act"),
and Amendment No. 30 under the Investment Company Act of 1940. The filing has
been marked to show changes from Post-Effective Amendment No. 27, filed on March
1, 1999.
This post-effective amendment is being filed for the purpose of adding
a new class of shares (Class C shares) and contains substantially identical
revisions to those contained in Post-Effective Amendment No. 27 to the
Registration Statement of Seligman Frontier Fund, Inc. (File No. 2-92487), which
was filed with the Securities and Exchange Commission under Rule 485(a)(1) on
April 1, 1999 (Accession Number: 0000930413-99-000490).
Certain other non-material changes have also been made as the Fund
deemed appropriate. As such, this Post-Effective Amendment contains no
disclosure that would render it ineligible to become effective pursuant to Rule
485(b) of the 1933 Act.
If there are any questions or comments, please call the undersigned at
(212) 850-1426.
Very truly yours,
/s/ Maureen A. Coleman
----------------------
Maureen A. Coleman
Vice President,
Law & Regulation
Mac/mc
100 Park Avenue New York, NY 10017 (212) 850-1864
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
PRE-EFFECTIVE AMENDMENT NO. __ |_|
POST-EFFECTIVE AMENDMENT NO. 28 |X|
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
AMENDMENT NO. 30 |X|
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
- --------------------------------------------------------------------------------
100 PARK AVENUE, NEW YORK, NEW YORK 10017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
- --------------------------------------------------------------------------------
REGISTRANT'S TELEPHONE NUMBER: 212-850-1864 OR
TOLL FREE: 800-221-2450
- --------------------------------------------------------------------------------
THOMAS G. ROSE, TREASURER
100 PARK AVENUE
NEW YORK, NEW YORK 10017
(NAME AND ADDRESS OF AGENT FOR SERVICE)
- --------------------------------------------------------------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
|_| IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)
|X| ON MAY 28,, 1999 PURSUANT TO PARAGRAPH (B)
|_| 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1)
|_| ON (DATE) PURSUANT TO PARAGRAPH (A)(1)
|_| 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)
|_| ON (DATE) PURSUANT TO PARAGRAPH (A)(2) OF
RULE 485.
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
|_| THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
<PAGE>
SELIGMAN
============================================
HENDERSON
GLOBAL FUND
SERIES, INC.
INTERNATIONAL FUND
EMERGING MARKETS
GROWTH FUND
GLOBAL GROWTH
OPPORTUNITIES FUND
GLOBAL SMALLER
COMPANIES FUND
GLOBAL TECHNOLOGY FUND
The Securities and Exchange Commission has
neither approved nor disapproved these Funds,
and it has not determined the prospectus to be
accurate oradequate. Any representation to the
contrary is a criminal offense.
An investment in these Funds or any other fund
cannot provide a complete investment program. The
suitability of an investment in a Fund should be
evaluated based on the investment objective, strate-
gies and risks described herein, considered in light of
all of the other investments in your portfolio, as
well as your risk tolerance, financial goals, and time
horizons. We recommend that you consult your
financial advisor to determine if one or more of
these Funds is suitable for you.
EQSH1 6/99
[GRAPHIC OMITTED]
PROSPECTUS
JUNE 1, 1999
----------
INVESTING
AROUND THE WORLD
FOR CAPITAL
APPRECIATION
MANAGED BY
[LOGO OMITTED]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
TABLE OF CONTENTS
THIS PROSPECTUS CONTAINS INFORMATION ABOUT SELIGMAN HENDERSON GLOBAL FUND
SERIES, INC., WHICH CONSISTS OF FIVE SEPARATE AND DISTINCT FUNDS.
THE FUNDS
A DISCUSSION OF THE INVESTMENT STRATEGIES, RISKS, PERFORMANCE AND EXPENSES OF
THE FUNDS.
SELIGMAN HENDERSON INTERNATIONAL FUND 2
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND 6
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND 10
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND 14
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND 18
MANAGEMENT OF THE FUNDS 22
YEAR 2000 24
EURO CONVERSION 25
SHAREHOLDER INFORMATION
DECIDING WHICH CLASS OF SHARES TO BUY 26
PRICING OF FUND SHARES 28
OPENING YOUR ACCOUNT 28
HOW TO BUY ADDITIONAL SHARES 29
HOW TO EXCHANGE SHARES AMONG
THE SELIGMAN MUTUAL FUNDS 30
HOW TO SELL SHARES 30
IMPORTANT POLICIES THAT MAY AFFECT YOUR ACCOUNT 31
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS 32
TAXES 32
THE SELIGMAN MUTUAL FUNDS 33
FINANCIAL HIGHLIGHTS 34
HOW TO CONTACT US 41
FOR MORE INFORMATION BACK COVER
TIMES CHANGE ... VALUES ENDURE
<PAGE>
THE FUNDS
SELIGMAN HENDERSON INTERNATIONAL FUND
INVESTMENT OBJECTIVE/PRINCIPAL STRATEGIES
The International Fund's objective is long-term capital appreciation.
The Fund uses the following principal strategies to seek its objective:
The Fund invests primarily in equity securities of non-US issuers. The Fund may
invest in any country; however, it typically will not invest in the US. It
generally invests in several countries in different geographic regions.
The Fund generally invests in the common stock of medium- to large-sized
companies in the principal international markets. However, it may also invest in
companies with a lower market capitalization or in smaller regional or emerging
markets.
The Fund uses a top-down investment style. This means the investment manager
concentrates first on regional and country allocations, then on industry
sectors, followed by fundamental analysis of individual companies. The Fund's
investments are allocated among geographic regions or countries based on such
factors as:
o Relative economic growth potential of the various economies and
securities markets
o Political, financial, and social conditions influencing investment
opportunities
o Investor sentiment
o Prevailing interest rates and expected levels of inflation
o Market prices relative to historic averages
In selecting individual securities, the investment manager looks to identify
companies that it believes display one or more of the following:
o Attractive valuations relative to earnings forecasts or other
valuation criteria (e.g., return on equity)
o Quality management and equity ownership by executives
o Unique competitive advantages (e.g., market share, proprietary
products)
o Market liquidity o Potential for improvement in overall operations
The Fund generally sells a stock if the investment manager believes its target
price has been reached, its earnings are disappointing, its revenue growth has
slowed, or its underlying fundamentals have deteriorated. The Fund may also sell
a stock if the investment manager believes that negative country or regional
factors may affect a company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The securities may be listed
on a US or foreign stock exchange or traded in US or foreign over-the-counter
markets. The Fund normally concentrates its investments in common stocks;
however, it may invest in other types of equity securities, including securities
convertible into or exchangeable for common stock, depositary receipts, and
rights and warrants to purchase common stock. The Fund also may invest up to 25%
of its assets in preferred stock and investment grade or comparable quality debt
securities.
2
<PAGE>
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options (which
gives the Fund the right to sell an underlying security at a particular price
during a fixed period) in an attempt to hedge against a decline in the price of
securities it holds in its portfolio. Foreign currency forward contracts and put
options on securities may not be available to the Fund on reasonable terms in
many situations and the Fund may frequently choose not to enter into such
contracts or purchase such options even when they are available. The Fund may,
from time to time, take temporary defensive positions that are inconsistent with
its principal strategies in seeking to minimize extreme volatility caused by
adverse market, economic, or other conditions. This could prevent the Fund from
achieving its objective.
The Fund may change its principal strategies if the Board of Directors believes
doing so is consistent with the Fund's objective. The Fund's objective may be
changed only with the approval of shareholders.
As with any mutual fund, there is no guarantee the Fund will achieve its
objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the value
of your investment and you could lose money if you sell your shares at a price
lower than you paid for them.
Investing in securities of foreign issuers involves risks not associated with US
investments, including settlement risks, currency fluctuation, local withholding
and other taxes, different financial reporting practices and regulatory
standards, high costs of trading, changes in political conditions,
expropriation, investment and repatriation restrictions and settlement and
custody risks.
The Fund seeks to limit the risk of investing in foreign securities by
diversifying its investments among different regions and countries.
Diversification reduces the effect events in any one country will have on the
Fund's entire investment portfolio. However, a decline in the value of the
Fund's investments in one country may offset potential gains from investments in
another country.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. There may also be
adverse tax consequences for investors in the Fund due to an increase in
short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
3
<PAGE>
SELIGMAN HENDERSON INTERNATIONAL FUND
PAST PERFORMANCE
The Fund offers four Classes of shares. The information below provides some
indication of the risks of investing in the Fund by showing how the performance
of Class A shares has varied year to year, as well as how the performance of
each Class (except Class C) compares to two widely-used measures of performance.
Class C is a new class of shares, effective June 1, 1999, so no performance
information is available. Although the Fund's fiscal year ends on October 31,
the performance is provided on a calendar year basis to assist you in comparing
the returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past, however, is not necessarily an indication of how the Fund
will perform in the future. Total returns will vary between each Class of shares
due to the different fees and expenses of each Class. The Class A annual total
returns presented in the bar chart do not reflect the effect of any sales
charges. If these charges were included, the returns would be less. The average
annual total returns presented in the table below the chart do reflect the
effect of the applicable sales charges. Both the bar chart and table assume that
all dividends and capital gain distributions were reinvested.
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[THIS TABLE REPRESENTS CHART IN THE PRINTED PIECE]
1993 37.35% 0.3735
1994 2.63% 0.0263
1995 9.96% 0.0996
1996 7.77% 0.0777
1997 7.65% 0.0765
1998 13.73% 0.1373
Best calendar quarter return: 17.38% - quarter ended 12/31/98
Worst calendar quarter return: -17.53% - quarter ended 9/30/98
Class A annual total return for the quarter ended 3/31/99 was -0.83%.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/98
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
ONE FIVE SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION
YEAR YEARS 4/7/92 4/22/96 9/21/93
------- ------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Class A 8.33% 7.24% 10.53% n/a n/a
Class B 7.64 n/a n/a 6.21% n/a
Class D 11.64 7.37 n/a n/a 8.65%
MSCIEAFEIndex 20.33 9.50 11.55(1) 8.15(2) 9.22(3)
Lipper International Funds Average 12.80 7.78 10.66(1) 8.31(2) 9.22(3)
The Morgan Stanley Capital International EAFE(Europe, Australasia, Far East) Index (MSCIEAFEIndex) and the Lipper International
Funds Average are unmanaged benchmarks that assume reinvestment of dividends. The Lipper International Funds Average excludes the
effect of sales charges and the MSCIEAFEIndex excludes the effect of fees and sales charges. The MSCI EAFE Index measures the
performance of stocks in 20 developed markets in Europe, Australasia, and the Far East. The Lipper International Funds Average
measures the performance of mutual funds which invest in equity securities of companies whose primary trading markets are outside
the US.
(1) From 3/31/92.
(2) From 4/30/96.
(3) From 9/30/93.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to you. Annual fund operating expenses are deducted from Fund assets
and are therefore paid indirectly by you and other shareholders of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES Class A Class B Class C Class D
- ----------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) on Purchases
(as a % of offering price) ............................................. 4.75%(1) none 1% none
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value,
whichever is less) ..................................................... none(1) 5% 1% 1%
ANNUAL FUND OPERATING EXPENSES FOR FISCAL 1998
- ------------------------------------------------
(as a percentage of average net assets)
Management Fees .......................................................... 1.00% 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees ................................. .21% 1.00% 1.00% 1.00%
Other Expenses ........................................................... .55% .55% .55% .55%
----- ----- ----- -----
Total Annual Fund Operating Expenses ..................................... 1.76%(2) 2.55% 2.55% 2.55%
===== ===== ===== =====
</TABLE>
(1) If you buy Class A shares for $1,000,000 or more, you do not pay an initial
sales charge, but your shares will be subject to a 1% CDSC if sold within 18
months.
(2) This amount reflects total annual fund operating expenses paid by the Fund
for fiscal 1998, absent a one-time reimbursement to the Fund of expenses
paid in prior years. This reimbursement had the effect of decreasing the
Fund's actual total operating expenses to 1.69% for fiscal 1998.
Example
- -------
This example is intended to help you compare the expenses of investing in the
Fund with the expenses of investing in other mutual funds. It assumes (1) you
invest $10,000 in the Fund for each period and then sell all of your shares at
the end of that period, (2) your investment has a 5% return each year, and (3)
the Fund's operating expenses remain the same. Although your actual expenses may
be higher or lower, based on these assumptions your expenses would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $645 $1,003 $1,384 $2,450
Class B 758 1,093 1,555 2,692+
Class C 456 886 1,442 2,956
Class D 358 793 1,355 2,885
If you did not sell your shares at the end of each period, your expenses would
be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $645 $1,003 $1,384 $2,450
Class B 258 793 1,355 2,692+
Class C 356 886 1,442 2,956
Class D 258 793 1,355 2,885
+ Class B shares will automatically convert to Class A shares after eight years.
5
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
INVESTMENT OBJECTIVE/PRINCIPAL STRATEGIES
The Emerging Markets Growth Fund's objective is long-term capital appreciation.
- --------------------------------------------
EMERGING MARKET:
A MARKET IN A DEVELOPING COUNTRY.
DEVELOPING COUNTRIES ARE THOSE
CLASSIFIED BY THE WORLD BANK AS
LOWER INCOME ECONOMIES, REGARDLESS
OF THEIR PARTICULAR STAGE OF DEVELOPMENT.
LOWER INCOME ECONOMIES ARE CURRENTLY
DEFINED AS THOSE WITH 1996 PER CAPITA
GROSS NATIONAL PRODUCT (GNP) OF US $9,385
OR LESS.
- --------------------------------------------
The Fund uses the following principal strategies to seek its objective:
The Fund generally invests at least 65% of its assets in equity securities of
companies that conduct their principal business activities in emerging markets.
The Fund will focus its investments in those developing countries in which the
investment manager believes the economies are developing strongly and markets
are becoming more liquid. The Fund seeks to benefit from policies of economic
development being adopted in many developing countries. These policies include
domestic price reform, reducing internal budget deficits, privatization,
encouraging foreign investments, and developing capital markets.
The Fund uses a top-down investment style. This means the investment manager
concentrates first on regional and country allocations, then on industry
sectors, followed by fundamental analysis of individual companies.
The Fund's investments are allocated among geographic regions or countries based
on such factors as:
o Relative economic growth potential of the various economies and
securities markets
o Political, financial, and social conditions influencing investment
opportunities
o Investor sentiment
o Prevailing interest rates and expected levels of inflation
o Market prices relative to historic averages
In selecting individual securities, the investment manager looks to identify
companies that it believes display one or more of the following:
o Attractive valuations relative to earnings forecasts or other
valuation criteria (e.g., return on equity)
o Quality management and equity ownership by executives
o Unique competitive advantages (e.g., market share, proprietary
products)
o Market liquidity
o Potential for improvement in overall operations
The Fund generally sells a stock if the investment manager believes its target
price has been reached, its earnings are disappointing, its revenue growth has
slowed, or its underlying fundamentals have deteriorated. The Fund may also sell
a stock if the investment manager believes that negative country or regional
factors may affect a company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The securities may be listed
on a US or foreign stock exchange or traded in US or foreign over-the-counter
markets. The Fund normally concentrates its investments in common stocks;
however, it may invest in other types of equity securities, including securities
convertible into or exchangeable for common stock, depositary receipts, and
rights and warrants to purchase common stock. The Fund also may invest up to 25%
of its assets in preferred stock and investment grade or comparable quality debt
securities.
6
<PAGE>
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options (which
gives the Fund the right to sell an underlying security at a particular price
during a fixed period) in an attempt to hedge against a decline in the price of
securities it holds in its portfolio. Foreign currency forward contracts and put
options on securities may not be available to the Fund on reasonable terms in
many situations and the Fund may frequently choose not to enter into such
contracts or purchase such options even when they are available.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, or other conditions. This could
prevent the Fund from achieving its objective.
The Fund may change its principal strategies if the Board of Directors believes
doing so is consistent with the Fund's objective. The Fund's objective may be
changed only with the approval of shareholders.
As with any mutual fund, there is no guarantee the Fund will achieve its
objective.
PRINCIPAL RISKS
The Fund's net asset value may fluctuate more than other equity funds or other
global equity funds that do not invest heavily in emerging markets. You may
experience a decline in the value of your investment and you could lose money if
you sell your shares at a price lower than you paid for them. Emerging countries
may have relatively unstable governments, economies based on less diversified
industrial bases, and securities markets that trade a smaller number of
securities. Companies in emerging markets are often smaller, less seasoned, and
more recently organized than many US companies.
Investing in securities of foreign issuers involves risks not associated with US
investments, including settlement risks, currency fluctuation, local withholding
and other taxes, different financial reporting practices and regulatory
standards, high costs of trading, changes in political conditions,
expropriation, investment and repatriation restrictions and settlement and
custody risks. Investing in emerging markets involves a greater degree of risk,
and an investment in the Fund should be considered speculative.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
To the extent the Fund invests some of its assets in other higher-risk
securities, such as illiquid securities, it may be subject to higher price
volatility.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. There may also be
adverse tax consequences for investors in the Fund due to an increase in
short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
7
<PAGE>
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
PAST PERFORMANCE
The Fund offers your Classes of shares. The information below provides some
indication of the risks of investing in the Fund by showing how the performance
of Class A shares has varied year to year, as well as how the performance of
each Class (except Class C) compares to two widely-used measures of performance.
Class C is a new class of shares, effective June 1, 1999, so no performance
information is available. Although the Fund's fiscal year ends on October 31,
the performance is provided on a calendar year basis to assist you in comparing
the returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past, however, is not necessarily an indication of how the Fund
will perform in the future. Total returns will vary between each Class of shares
due to the different fees and expenses of each Class.
The Class A annual total returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be less. The average annual total returns presented in the table below the chart
do reflect the effect of the applicable sales charges. Both the bar chart and
table assume that all dividends and capital gain distributions were reinvested.
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[THIS TABLE REPRESENTS CHART IN THE PRINTED PIECE.
1997 6.35% 0.0635
1998 -27.45% -0.2745
Best calendar quarter return: 16.92% - quarter ended 6/30/97
Worst calendar quarter return: -25.67% - quarter ended 9/30/98
Class A annual total return for the quarter ended 3/31/99 was 3.66%.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/98
SINCE
ONE INCEPTION
YEAR 5/28/96
------- ------------
Class A -30.93% -11.45%
Class B -31.65 -11.51
Class D -28.64 -10.40
MSCI EMF Index -25.33 -16.05(1)
Lipper Emerging Markets Funds Average -26.85 -13.57(1)
The Morgan Stanley Capital International Emerging Markets Free Index
(MSCIEMFIndex) and the Lipper Emerging Markets Funds Average are unmanaged
benchmarks that assume the reinvestment of dividends. The Lipper Emerging
Markets Funds Average excludes the effect of sales charges and the MSCIEMFIndex
excludes the effect of fees and sales charges. The MSCI EMF Index measures the
performance of stocks in 26 emerging market countries in Europe, Latin America,
and the Pacific Basin which are available to foreign investors. The Lipper
Emerging Markets Funds Average measures the performance of mutual funds which
invest at least 65% of total assets in equity securities of companies in
emerging markets.
(1) From 5/31/96.
- --------------------------------------------------------------------------------
8
<PAGE>
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to you. Annual fund operating expenses are deducted from Fund assets
and are therefore paid indirectly by you and other shareholders of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES Class A Class B Class C Class D
- ----------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) on Purchases
(as a % of offering price) ........................................ 4.75%(1) none 1% none
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value,
whichever is less) ................................................ none(1) 5% 1% 1%
ANNUAL FUND OPERATING EXPENSES FOR FISCAL 1998
- ------------------------------------------------
(as a percentage of average net assets)
Management Fees ..................................................... 1.25% 1.25% 1.25% 1.25%
Distribution and/or Service (12b-1) Fees ............................ .23% 1.00% 1.00% 1.00%
Other Expenses ...................................................... .74% .74% .74% .74%
----- ----- ----- -----
Total Annual Fund Operating Expenses ................................ 2.22% 2.99% 2.99% 2.99%
===== ===== ===== =====
</TABLE>
(1)If you buy Class A shares for $1,000,000 or more, you do not pay an initial
sales charge, but your shares will be subject to a 1% CDSC if sold within 18
months.
Example
- -------
This example is intended to help you compare the expenses of investing in the
Fund with the expenses of investing in other mutual funds. It assumes (1) you
invest $10,000 in the Fund for each period and then sell all of your shares at
the end of that period, (2) your investment has a 5% return each year, and (3)
the Fund's operating expenses remain the same. Although your actual expenses may
be higher or lower, based on these assumptions your expenses would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $689 $1,136 $1,608 $2,908
Class B 802 1,224 1,772 3,128+
Class C 499 1,015 1,656 3,375
Class D 402 924 1,572 3,308
If you did not sell your shares at the end of each period, your expenses would
be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $689 $1,136 $1,608 $2,908
Class B 302 924 1,572 3,128+
Class C 399 1,015 1,656 3,375
Class D 302 924 1,572 3,308
+ Class B shares will automatically convert to Class A shares after eight years.
9
<PAGE>
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
INVESTMENT OBJECTIVE/PRINCIPAL STRATEGIES
The Global Growth Opportunities Fund's objective is long-term capital
appreciation.
The Fund uses the following principal strategies to seek its objective:
The Fund invests primarily in equity securities of non-US and US growth
companies that have the potential to benefit from global economic or social
trends. The Fund may invest in companies of any size, domiciled in any country.
Typically, the Fund will invest in several countries in different geographic
regions.
The Fund uses an investment style that combines macro analysis of global trends
with in-depth research of individual companies. This means that the investment
managers analyze the rapidly changing world to identify investment themes that
they believe will have the greatest impact on global markets, and use in-depth
research to identify attractive companies around the world. The Fund focuses on
the following macro trends:
o Economic liberalization and the flow of capital through global trade
and investment;
o Globalization of the world's economy.
o The expansion of technology as an increasingly important influence
on society;
o Increased awareness of the importance of protecting the environment;
and
o The increase in life expectancy leading to changes in consumer
demographics and a greater need for healthcare, personal security,
and leisure.
In selecting individual securities, the investment managers look to identify
companies that they believe display one or more of the following:
o Attractive valuations relative to earnings forecasts or other
valuation criteria (e.g., return on equity)
o Quality management and equity ownership by executives
o Unique competitive advantages (e.g., market share, proprietary
products)
o Potential for improvement in overall operations
The Fund generally sells a stock if the investment managers believe its target
price has been reached, its earnings are disappointing, its revenue growth has
slowed, or its underlying fundamentals have deteriorated. The Fund may also sell
a stock if the investment managers believe that negative country or regional
factors or a shifting in global trends may negatively affect a company's
outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable for common stock, depositary receipts, and rights and warrants to
purchase common stock. The Fund also may invest up to 25% of its assets in
preferred stock and investment grade or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options (which
gives the Fund the right to sell an underlying security at a particular price
during a fixed period) in an attempt to hedge against a decline in the price of
securities it holds in its portfolio. Foreign currency forward contracts and put
options on securities may not be available to the Fund on reasonable terms in
many situations and the Fund may frequently choose not to enter into such
contracts or purchase such options even when they are available.
10
<PAGE>
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, or other conditions. This could
prevent the Fund from achieving its objective.
The Fund may change its principal strategies if the Board of Directors believes
doing so is consistent with the Fund's objective. The Fund's objective may be
changed only with the approval of shareholders.
As with any mutual fund, the Fund may not achieve its objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the value
of your investment and you could lose money if you sell your shares at a price
lower than you paid for them.
Investing in securities of foreign issuers involves risks not associated with US
investments, including settlement risks, currency fluctuation, local withholding
and other taxes, different financial reporting practices and regulatory
standards, high costs of trading, changes in political conditions,
expropriation, investment and repatriation restrictions and settlement and
custody risks.
The Fund seeks to limit the risk of investing in foreign securities by
diversifying its investments among different countries, as well as among
different themes. Diversification reduces the effect events in any one country
will have on the Fund's entire investment portfolio. However, a decline in the
value of the Fund's investments in one country may offset potential gains from
investments in another country.
If global trends do not develop as the manager expects, the Fund's performance
could be negatively affected.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. There may also be
adverse tax consequences for investors in the Fund due to an increase in
short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
11
<PAGE>
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
PAST PERFORMANCE
The Fund offers four Classes of shares. The information below provides some
indication of the risks of investing in the Fund by showing how the performance
of Class A shares has varied year to year, as well as how the performance of
each Class (except Class C) compares to two widely-used measures of performance.
Class C is a new class of shares, effective June 1, 1999, so no performance
information is available. Although the Fund's fiscal year ends on October 31,
the performance is provided on a calendar year basis to assist you in comparing
the returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past, however, is not necessarily an indication of how the Fund
will perform in the future. Total returns will vary between each Class of shares
due to the different fees and expenses of each Class.
The Class A annual total returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be less. The average annual total returns presented in the table below the chart
do reflect the effect of the applicable sales charges. Both the bar chart and
table assume that all dividends and capital gain distributions were reinvested.
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[THIS TABLE REPRESENTS CHART IN THE PRINTED PIECE]
1996 13.01% 13.0%
1997 11.52% 11.5%
1998 22.75% 22.75%
Best calendar quarter return: 19.65% - quarter ended 12/31/98
Worst calendar quarter return: -14.62% - quarter ended 9/30/98
Class A annual total return for the quarter ended 3/31/99 was 4.86%.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/98
CLASS B
ONE SINCE INCEPTION SINCE INCEPTION
YEAR 4/22/96 11/1/95
------- --------------- ---------------
Class A 16.98% n/a 14.19%
Class B 16.91 11.50% n/a
Class D 20.91 n/a 15.09
MSCIWorldIndex 24.80 17.87(1) 19.58(2)
Lipper Global Funds Average 14.06 12.98(1) 15.24(2)
The Morgan Stanley Capital International World Index (MSCIWorldIndex) and the
Lipper Global Funds Average are unmanaged benchmarks that assume reinvestment of
dividends. The Lipper Global Funds Average excludes the effect of sales charges
and the MSCIWorldIndex excludes the effect of fees and sales charges. The MSCI
World Index measures the performance of stocks in 22 developed markets in North
America, Europe, and the Asia/Pacific region. The Lipper Global Funds average
measures the performance of mutual funds which invest at least 25% of total
assets in equity securities traded outside the US, and which may own US
securities.
(1) From 4/30/96.
(2) From 10/31/95.
- --------------------------------------------------------------------------------
12
<PAGE>
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to you. Annual fund operating expenses are deducted from Fund assets
and are therefore paid indirectly by you and other shareholders of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES Class A Class B Class C Class D
- ---------------- ------- ------ ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) on Purchases
(as a % of offering price) ........................................... 4.75%(1) none 1% none
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value,
whichever is less) ................................................... none(1) 5% 1% 1%
ANNUAL FUND OPERATING EXPENSES FOR FISCAL 1998
- ------------------------------------------------
(as a percentage of average net assets)
Management Fees ........................................................ 1.00% 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees ............................... .24% 1.00% 1.00% 1.00%
Other Expenses ......................................................... .44% .44% .44% .44%
----- ----- ----- -----
Total Annual Fund Operating Expenses ................................... 1.68% 2.44% 2.44% 2.44%
===== ===== ===== =====
</TABLE>
(1) If you buy Class A shares for $1,000,000 or more, you do not pay an initial
sales charge, but your shares will be subject to a 1% CDSC if sold within 18
months.
Example
- -------
This example is intended to help you compare the expenses of investing in the
Fund with the expenses of investing in other mutual funds. It assumes (1) you
invest $10,000 in the Fund for each period and then sell all of your shares at
the end of that period, (2) your investment has a 5% return each year, and (3)
the Fund's operating expenses remain the same. Although your actual expenses may
be higher or lower, based on these assumptions your expenses would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $638 $ 979 $1,344 $2,368
Class B 747 1,061 1,501 2,589+
Class C 445 853 1,388 2,848
Class D 347 761 1,301 2,776
If you did not sell your shares at the end of each period, your expenses would
be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $638 $979 $1,344 $2,368
Class B 247 761 1,301 2,589+
Class C 345 853 1,388 2,848
Class D 247 761 1,301 2,776
+ Class B shares will automatically convert to Class A shares after eight years.
13
<PAGE>
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
INVESTMENT OBJECTIVE/PRINCIPAL STRATEGIES
The Global Smaller Companies Fund's objective is long-term capital appreciation.
- ----------------------------
SMALLER COMPANIES:
COMPANIES WITH MARKET
CAPITALIZATION (AT THE TIME
OF PURCHASE BY THE FUND)
EQUIVALENT TO US $1 BILLION
OR LESS.
- ----------------------------
The Fund uses the following principal strategies to seek its objective:
The Fund generally invests at least 65% of its assets in equity securities of
smaller US and non-US companies. The Fund may invest in companies domiciled in
any country, although it typically invests in developed countries. The Fund will
generally invest in several countries in different geographic regions.
The Fund uses an investment style that combines top-down macro-economic analysis
with bottom-up fundamental research into individual company attractiveness. This
means that the investment managers identify countries that they believe offer
good investment opportunities, and use extensive in-depth research to identify
attractive smaller companies around the world. The investment managers look at
one or more of the following factors when making country allocation decisions
o Relative economic growth potential of the various economies and
securities markets
o Political, financial, and social conditions influencing investment
opportunities
o Investor sentiment
o Prevailing interest rates and expected levels of inflation
o Market prices relative to historic averages
In selecting individual securities, the investment managers look for companies
that they believe display one or more of the following:
o Attractive valuations relative to earnings forecasts or other
valuation criteria (e.g., return on equity)
o Quality management and equity ownership by executives
o Unique competitive advantages (e.g., market share, proprietary
products)
o Market liquidity
o Potential for improvement in overall operations
The Fund generally sells a stock if the investment managers believe its target
price has been reached, its earnings are disappointing, its revenue growth has
slowed, or its underlying fundamentals have deteriorated. The Fund may also sell
a stock if the investment managers believe that negative country or regional
factors may affect a company's outlook, or to meet cash requirements. The Fund
anticipates that it will continue to hold securities of companies that grow or
expand so long as the investment managers believe the securities continue to
offer prospects of long-term growth.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable for common stock, depositary receipts, and rights and warrants to
purchase common stock. The Fund also may invest up to 25% of its assets in
preferred stock and investment grade or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options (which
gives the Fund the right to sell an underlying security at a particular price
during a fixed period) in an attempt to hedge against a decline in the price of
securities it holds in its portfolio. Foreign currency forward contracts and put
options on securities may not be available to the Fund on reasonable terms in
many situations and the Fund may frequently choose not to enter into such
contracts or purchase such options even when they are available.
14
<PAGE>
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, or other conditions. This could
prevent the Fund from achieving its objective.
The Fund may change its principal strategies if the Board of Directors believes
doing so is consistent with the Fund's objective. The Board of Directors may
change the definition of "smaller companies" if they conclude that such a change
is appropriate. The Fund's objective may be changed only with the approval of
shareholders.
As with any mutual fund, there is no guarantee the Fund will achieve its
objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the value
of your investment and you could lose money if you sell your shares at a price
lower than you paid for them.
Investing in securities of foreign issuers involves risks not associated with US
investments, including settlement risks, currency fluctuation, local withholding
and other taxes, different financial reporting practices and regulatory
standards, high costs of trading, changes in political conditions,
expropriation, investment and repatriation restrictions and settlement and
custody risks.
Investments in smaller companies typically involve greater risks than
investments in larger companies. Small company stocks, as a whole, may
experience larger price fluctuations than large-company stocks or other types of
investments. Some small companies may have shorter operating histories, less
experienced management and limited product lines, markets, and financial or
managerial resources.
The Fund may be affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. There may also be
adverse tax consequences for investors in the Fund due to an increase in
short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
15
<PAGE>
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
PAST PERFORMANCE
The Fund offers four Classes of shares. The information below provides some
indication of the risks of investing in the Fund by showing how the performance
of Class A shares has varied year to year, as well as how the performance of
each Class (except Class C) compares to two widely-used measures of performance.
Class C is a new class of shares, effective June 1, 1999, so no performance
information is available. Although the Fund's fiscal year ends on October 31,
the performance is provided on a calendar year basis to assist you in comparing
the returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past, however, is not necessarily an indication of how the Fund
will perform in the future. Total returns will vary between each Class of shares
due to the different fees and expenses of each Class.
The Class A annual total returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be less. The average annual total returns presented in the table below the chart
do reflect the effect of the applicable sales charges. Both the bar chart and
table assume that all dividends and capital gain distributions were reinvested.
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[THIS TABLE REPRESENTS CHART IN THE PRINTED PIECE]
1993 40.06% 0.4006
1994 10.14% 0.1014
1995 25.83% 0.2583
1996 16.84% 0.1684
1997 3.55% 0.0355
1898 5.71% 0.0571
Best calendar quarter return: 16.36% - quarter ended 3/31/98
Worst calendar quarter return: -17.21% - quarter ended 9/30/98
Class A annual total return for the quarter ended 3/31/99 was -9.62%.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/98
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
ONE FIVE SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION
YEAR YEARS 9/9/92 4/22/96 5/3/93
------- ------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Class A 0.65% 11.05% 15.65% n/a n/a
Class B -0.13 n/a n/a 3.03 n/a
Class D 3.94 11.25 n/a n/a 14.06%
Salomon Smith Barney EMIndex World 5.93 9.25 11.36(1) 6.09(2) 9.77(3)
Lipper Global Small Cap Funds Average 0.75 8.02 12.34(1) 2.32(2) 10.94(3)
The Salomon Smith Barney Extended Market Index World (Salomon Smith Barney EMIndex World) and the Lipper Global Small
Cap Funds Average are unmanaged benchmarks that assume reinvestment of dividends. The Lipper Global Small Cap Funds
Average excludes the effect of sales charges and the Salomon Smith Barney EMIndex World excludes the effect of fees
and sales charges. The Salomon Smith Barney EM Index World measures the performance of small-cap stocks around the
world. The Lipper Global Small Cap Funds Average measure the performance of mutual funds which invest at least 25% of
their total assets in equity securities of companies whose primary trading markets are outside the US, and which invest
at least 65% of total assets in companies with market capitalizations of less than US $1 billion at the time of
purchase.
(1) From 8/31/92.
(2) From 4/30/96.
(3) From 4/30/93.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to you. Annual fund operating expenses are deducted from Fund assets
and are therefore paid indirectly by you and other shareholders of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES Class A Class B Class C Class D
- ----------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) on Purchases
(as a % of offering price) .......................................... 4.75%(1) none 1% none
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value,
whichever is less) .................................................. none(1) 5% 1% 1%
ANNUAL FUND OPERATING EXPENSES FOR FISCAL 1998
- ------------------------------------------------
(as a percentage of average net assets)
Management Fees ....................................................... 1.00% 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees .............................. .24% 1.00% 1.00% 1.00%
Other Expenses ........................................................ .41% .41% .41% .41%
----- ----- ----- -----
Total Annual Fund Operating Expenses .................................. 1.65% 2.41% 2.41% 2.41%
===== ===== ===== =====
</TABLE>
(1)If you buy Class A shares for $1,000,000 or more, you do not pay an initial
sales charge, but your shares will be subject to a 1% CDSC if sold within 18
months.
Example
- -------
This example is intended to help you compare the expenses of investing in the
Fund with the expenses of investing in other mutual funds. It assumes (1) you
invest $10,000 in the Fund for each period and then sell all of your shares at
the end of that period, (2) your investment has a 5% return each year, and (3)
the Fund's operating expenses remain the same. Although your actual expenses may
be higher or lower, based on these assumptions your expenses would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $635 $ 971 $1,329 $2,337
Class B 744 1,051 1,485 2,558+
Class C 442 844 1,373 2,819
Class D 344 751 1,285 2,746
If you did not sell your shares at the end of each period, your expenses would
be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $635 $971 $1,329 $2,337
Class B 244 751 1,285 2,558+
Class C 342 844 1,373 2,819
Class D 244 751 1,285 2,746
+ Class B shares will automatically convert to Class A shares after eight years.
17
<PAGE>
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
INVESTMENT OBJECTIVE/PRINCIPAL STRATEGIES
The Global Technology Fund's objective is long-term capital appreciation.
- -------------------------------------
TECHNOLOGY:
THE USE OF SCIENCE TO CREATE NEW
PRODUCTS AND SERVICES. THE INDUSTRY
COMPRISES INFORMATION TECHNOLOGY AND
COMMUNICATIONS, AS WELL AS MEDICAL-,
ENVIRONMENTAL- AND BIO-TECHNOLOGY.
- -------------------------------------
The Fund uses the following principal strategies to seek its objective:
The Fund generally invests at least 65% of its assets in equity securities of US
and non-US companies with business operations in technology and
technology-related industries. Technology-related companies are those companies
that use technology extensively to improve their business processes and
applications. The Fund may invest in companies domiciled in any country which
the investment managers believe to be appropriate to the Fund's objective. The
Fund generally invests in several countries in different geographic regions.
The Fund may invest in companies of any size. Securities of large companies that
are well established in the world technology market can be expected to grow with
the market and will frequently be held by the Fund. However, rapidly changing
technologies and expansion of technology and technology-related industries often
provide a favorable environment for companies of small-to-medium size, and the
Fund may invest in these companies as well.
The investment managers seek to identify those technology companies that they
believe have the greatest prospects for future growth, regardless of their
country of origin. The Fund uses an investment style that combines research into
individual company attractiveness with macro analysis. This means that the
investment managers use extensive in-depth research to identify attractive
technology companies around the world, while seeking to identify particularly
strong technology sectors and/or factors within regions or specific countries
that may affect investment opportunities. In selecting individual securities,
the investment managers look for companies that they believe display one or more
of the following:
o Above-average growth prospects
o High profit margins
o Attractive valuations relative to earnings forecasts or other
valuation criteria (e.g., return on equity)
o Quality management and equity ownership by executives
o Unique competitive advantages (e.g., market share, proprietary
products)
o Potential for improvement in overall operations
The Fund generally sells a stock if the investment managers believe its target
price has been reached, its earnings are disappointing, its revenue growth has
slowed, or its underlying fundamentals have deteriorated. The Fund may also sell
a stock if the investment managers believe that negative country or regional
factors may affect a company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable for common stock, depositary receipts, and rights and warrants to
purchase common stock. The Fund also may invest up to 25% of its assets in
preferred stock and investment grade or comparable quality debt securities. The
Fund may also invest in depositary receipts, which are publicly traded
instruments generally issued by US or foreign banks or trust companies that
represent securities of foreign issuers.
18
<PAGE>
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options (which
gives the Fund the right to sell an underlying security at a particular price
during a fixed period) in an attempt to hedge against a decline in the price of
securities it holds in its portfolio. Foreign currency forward contracts and put
options on securities may not be available to the Fund on reasonable terms in
many situations and the Fund may frequently choose not to enter into such
contracts or purchase such options even when they are available.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, or other conditions. This could
prevent the Fund from achieving its objective.
The Fund may change its principal strategies if the Board of Directors believes
doing so is consistent with the Fund's objective. The Fund's objective may be
changed only with the approval of shareholders.
As with any mutual fund, there is no guarantee the Fund will achieve its
objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the value
of your investment and you could lose money if you sell your shares at a price
lower than you paid for them.
Investing in securities of foreign issuers involves risks not associated with US
investments, including settlement risks, currency fluctuation, local withholding
and other taxes, different financial reporting practices and regulatory
standards, high costs of trading, changes in political conditions,
expropriation, investment and repatriation restrictions and settlement and
custody risks.
The Fund may be susceptible to factors affecting technology and
technology-related industries and the Fund's net asset value may fluctuate more
than a fund that invests in a wider range of industries. Technology companies
are often smaller and less experienced companies and may be subject to greater
risks than larger companies, such as limited product lines, markets, and
financial or managerial resources. These risks may be heightened for technology
companies in foreign markets.
The Fund seeks to limit risk by diversifying its investments among different
sectors within the technology industry, as well as among different countries.
Diversification reduces the effect the performance of any one sector or events
in any one country will have on the Fund's entire investment portfolio. However,
a decline in the value of one of the Fund's investments may offset potential
gains from other investments.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. There may also be
adverse tax consequences for investors in the Fund due to an increase in
short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
19
<PAGE>
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
PAST PERFORMANCE
The Fund offers four Classes of shares. The information below provides some
indication of the risks of investing in the Fund by showing how the performance
of Class A shares has varied year to year, as well as how the performance of
each Class (except Class C) compares to four widely-used measures of
performance. Class C is a new class of shares, effective June 1, 1999, so no
performance information is available. Although the Fund's fiscal year ends on
October 31, the performance is provided on a calendar year basis to assist you
in comparing the returns of the Fund with the returns of other mutual funds. How
the Fund has performed in the past, however, is not necessarily an indication of
how the Fund will perform in the future. Total returns will vary between each
Class of shares due to the different fees and expenses of each Class.
The Class A annual total returns presented in the bar chart do not reflect the
effect of any sales charges. If these charges were included, the returns would
be less. The average annual total returns presented in the table below the chart
do reflect the effect of the applicable sales charges. Both the bar chart and
table assume that all dividends and capital gain distributions were reinvested.
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[THIS TABLE REPRESENTS CHART IN THE PRINTED PIECE]
1995 45.06% 45.06%
1996 14.30% 14.30%
1997 11.75% 11.75%
1998 30.73% 30.73%
Best calendar quarter return: 35.50% - quarter ended 12/31/98
Worst calendar quarter return: -16.69% - quarter ended 9/30/98
Class A annual total return for the quarter ended 3/31/99 was 6.15%.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/98
<TABLE>
<CAPTION>
CLASS B
ONE SINCE INCEPTION SINCE INCEPTION
YEAR 5/23/94 4/22/96
------- --------------- ---------------
<S> <C> <C> <C>
Class A 24.50% 24.08% n/a
Class B 24.84 n/a 17.71%
Class D 28.89 24.39 n/a
MSCIWorldIndex 24.80 16.75(1) 17.87(2)
H&Q Index 55.40 35.13(1) 28.32(2)
Lipper Global Funds Average 14.06 12.73(1) 12.98(2)
Lipper Science &Technology Funds Average 52.55 27.02(1) 25.95(2)
The Morgan Stanley Capital International World Index (MSCIWorldIndex), the Hambrecht and Quist
Technology Stock Index (H&Q Index), and the Lipper Funds Averages are unmanaged benchmarks that
assume reinvestment of dividends. The Lipper Funds Averages exclude the effect of sales charges
and the MSCIWorldIndex and the H&Q Index exclude the effect of fees and sales charges. The MSCI
World Index measures the performance of stocks in 22 developed markets in North America, Europe,
and the Asia/Pacific region. The H & Q Index measures the performance of US technology stocks.
The Lipper Global Funds average measures the performance of mutual funds which invest at least
25% of total assets in equity securities traded outside the US, and which may own US securities.
The Lipper Science and Technology Funds Average measures the performance of mutual funds which
invest at least 65% of total assets in science and technology stocks.
(1) From 5/31/94.
(2) From 4/30/96.
- ---------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to you. Annual fund operating expenses are deducted from Fund assets
and are therefore paid indirectly by you and other shareholders of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES Class A Class B Class C Class D
- ----------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) on Purchases
(as a % of offering price) 4.75%(1) none 1% none
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value,
whichever is less) none(1) 5% 1% 1%
ANNUAL FUND OPERATING EXPENSES FOR FISCAL 1998
- ------------------------------------------------
(as a percentage of average net assets)
Management Fees 1.00% 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees .24% 1.00% 1.00% 1.00%
Other Expenses .43% .43% .43% .43%
----- ----- ----- -----
Total Annual Fund Operating Expenses 1.67% 2.43% 2.43% 2.43%
===== ===== ===== =====
</TABLE>
(1)If you buy Class A shares for $1,000,000 or more, you do not pay an initial
sales charge, but your shares will be subject to a 1% CDSC if sold within 18
months.
Example
- -------
This example is intended to help you compare the expenses of investing in the
Fund with the expenses of investing in other mutual funds. It assumes (1) you
invest $10,000 in the Fund for each period and then sell all of your shares at
the end of that period, (2) your investment has a 5% return each year, and (3)
the Fund's operating expenses remain the same. Although your actual expenses may
be higher or lower, based on these assumptions your expenses would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Class A $637 $ 976 $1,339 $2,357
Class B 746 1,058 1,496 2,578+
Class C 444 850 1,383 2,839
Class D 346 758 1,296 2,766
If you did not sell your shares at the end of each period, your expenses would
be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----- ------- ------- --------
Class A $637 $976 $1,339 $2,357
Class B 246 758 1,296 2,578+
Class C 344 850 1,383 2,839
Class D 246 758 1,296 2,766
+ Class B shares will automatically convert to Class A shares after eight years.
21
<PAGE>
MANAGEMENT OF THE FUNDS
The Board of Directors provides broad supervision over the affairs of each Fund.
- -------------------------------------------------
AFFILIATES OF SELIGMAN:
SELIGMAN ADVISORS, INC.:
EACH FUND'S GENERAL DISTRIBUTOR; RESPONSIBLE FOR
ACCEPTING ORDERS FOR PURCHASES AND SALES OF
FUND SHARES.
SELIGMAN SERVICES, INC.:
A LIMITED PURPOSE BROKER/DEALER; ACTS AS THE
BROKER/DEALER OF RECORD FOR SHAREHOLDER
ACCOUNTS THAT DO NOT HAVE A DESIGNATED
BROKER OR FINANCIAL ADVISOR.
SELIGMAN DATA CORP. (SDC):
EACH FUND'S SHAREHOLDER SERVICE AGENT;
PROVIDES SHAREHOLDER ACCOUNT SERVICES TO
THE FUND AT COST.
- -------------------------------------------------
J. & W. Seligman & Co. Incorporated (Seligman), 100 Park Avenue,
New York, New York 10017, is the manager of each Fund. Seligman is responsible
for each Fund's investments and administers each Fund's business and other
affairs.
Established in 1864, Seligman currently serves as manager to 18 US registered
investment companies, which offer more than 50 investment portfolios with
approximately $21.5 billion in assets as of April 30, 1999. Seligman also
provides investment management or advice to institutional or other accounts
having an aggregate value at April 30, 1999, of approximately $10.2 billion.
Each Fund pays Seligman a fee for its management services. The fee is equal to
an annual rate of 1.25% of the average daily net assets of the Emerging Markets
Growth Fund and 1.00% of the average daily net assets of each other Fund.
THE FUNDS' SUBADVISER
Each Fund's subadviser is Henderson Investment Management Limited (HIML) whose
address is 3 Finsbury Avenue, London EC2M 2PA. HIML, established in 1984, is a
wholly owned subsidiary of Henderson plc, a United Kingdom corporation.
Henderson plc is a subsidiary of AMP Limited, an Australian life insurance and
financial services company. HIML provides investment advice, research and
assistance with respect to the Funds' non-US investments.
Seligman pays HIML a fee for its services in respect of each Fund. This fee does
not increase the fee payable by any Fund.
Prior to July 1, 1998, Seligman Henderson Co. served as subadviser to the Funds.
Seligman Henderson Co. was founded in 1991 as a general partnership between
Seligman and Henderson International, Inc., a wholly owned subsidiary of
Henderson plc. Each partner owns an equal 50% interest in Seligman Henderson Co.
Seligman paid Seligman Henderson Co. for its services in respect of each Fund,
which did not increase the fee payable by any Fund.
PORTFOLIO MANAGEMENT
The INTERNATIONAL FUND is managed by HIML's International Team, headed by Mr.
Iain C. Clark, Chief Investment Officer of HIML. Mr. Clark has been Vice
President of Seligman Henderson Global Fund Series, Inc. and Portfolio Manager
of the International Fund since April 1992 and Co-Portfolio Manager of the
Global Smaller Companies Fund since September 1992. Mr. Clark is also Vice
President of Seligman Portfolios, Inc. and Portfolio Manager of its Seligman
Henderson International Portfolio and Co-Portfolio Manager of its Seligman
Henderson Global Smaller Companies Portfolio. He is a Director of Henderson
International Limited and Vice President, Secretary and Treasurer of Henderson
International, Inc. Mr. Clark has been a Director and Senior Portfolio Manager
of Henderson plc since 1985.
The EMERGING MARKETS GROWTH FUND is managed by HIML's International Team, which
in respect of the Emerging Markets Growth Fund, is headed by Mr. Peter Bassett,
a portfolio manager of HIML. Mr. Bassett has been Vice President of Seligman
Henderson Global Fund Series, Inc. and Portfolio Manager of the Fund since May
1996. Mr. Bassett has been a portfolio manager with Henderson plc since December
1992.
22
<PAGE>
The GLOBAL GROWTH OPPORTUNITIES FUND is co-managed by Seligman's Growth Team and
HIML's International Team. The Growth Team is headed by Marion S. Schultheis,
Vice President of Seligman Henderson Global Fund Series, Inc. and Co-Portfolio
Manager of the Fund since May 13, 1998. Ms. Schultheis, who joined Seligman as a
Managing Director in May 1998, is also Vice President and Portfolio Manager of
Seligman Capital Fund, Inc. and Seligman Growth Fund, Inc. She is a Vice
President of Seligman Portfolios, Inc. and Portfolio Manager of its Seligman
Capital Portfolio and Co-Portfolio Manager of its Seligman Henderson Global
Growth Opportunities Portfolio. From October 1997 until May 1998, Ms. Schultheis
was a Managing Director at Chancellor LGT; and from August 1987 until October
1997, she was Senior Portfolio Manager at IDS Advisory Group Inc.
HIML's International Team in respect of the Global Growth Opportunities Fund is
headed by Nitin Mehta, Vice President of Seligman Henderson Global Fund Series,
Inc. and Co-Portfolio Manager of the Fund since May 1996. Mr. Mehta has been a
portfolio manager with Henderson plc since September 1994. Mr. Mehta is also
Vice President of Seligman Portfolios, Inc. and Co-Portfolio Manager of its
Seligman Henderson Global Growth Opportunities Portfolio. From May 1993 to
September 1994, Mr. Mehta was Head of Currency Management and Derivatives at
Quorum Capital Management.
The GLOBAL SMALLER COMPANIES FUND is co-managed by Seligman's Small Company Team
and HIML's International Team. The Small Company Team is headed by Arsen
Mrakovcic. Mr. Mrakovcic, a Managing Director of Seligman, has been Vice
President of Seligman Henderson Global Fund Series, Inc. and Portfolio Manager
of the Fund since October 1, 1995. Mr. Mrakovcic joined Seligman in June 1992 as
a Portfolio Assistant. He was named Vice President, Investment Officer on
January 1, 1995, and Managing Director on January 1, 1996. Mr. Mrakovcic is also
Vice President and Portfolio Manager of Seligman Frontier Fund, Inc. and Vice
President of Seligman Portfolios, Inc. and Portfolio Manager of its Seligman
Frontier Portfolio and Co-Portfolio Manager of its Seligman Henderson Global
Smaller Companies Portfolio.
HIML's International Team in respect of the Global Smaller Companies Fund is
headed by Mr. Iain C. Clark. Mr. Clark's business experience is discussed above
under "International Fund."
The GLOBAL TECHNOLOGY FUND is co-managed by Seligman's Technology Team and
HIML's International Team. The Technology Team is headed by Mr. Paul H. Wick,
Vice President of Seligman Henderson Global Fund Series, Inc. and Co-Portfolio
Manager of the Global Technology Fund since May 1994. Mr. Wick has been a
Managing Director of Seligman since January 1995 and a Director of Seligman
since November 1997. He joined Seligman in 1987 as an Associate, Investment
Research. Mr. Wick has been Vice President and Portfolio Manager of Seligman
Communications and Information Fund, Inc. since January 1990 and December 1989,
respectively. He is also Vice President of Seligman Portfolios, Inc. and
Portfolio Manager of its Seligman Communications and Information Portfolio and
Co-Portfolio Manager of its Seligman Henderson Global Technology Portfolio.
HIML's International Team in respect of the Global Technology Fund is headed by
Mr. Brian Ashford-Russell, Vice President of Seligman Henderson Global Fund
Series, Inc. and Co-Portfolio Manager of the Global Technology Fund. Mr.
Ashford-Russell is also Vice President of Seligman Portfolios, Inc. and
Co-Portfolio Manager of its Seligman Henderson Global Technology Portfolio. He
has been a portfolio manager with Henderson plc since February 1993.
23
<PAGE>
YEAR 2000
As the millennium approaches, mutual funds, financial and business
organizations, and individuals could be adversely affected if their computer
systems do not properly process and calculate date-related information and data
on and after January 1, 2000. Like other mutual funds, the Funds rely upon
service providers and their computer systems for their day-to-day operations.
Many of the Funds' service providers in turn depend upon computer systems of
their vendors. Seligman and SDC have established a year 2000 project team. The
team's purpose is to assess the state of readiness of Seligman and SDC and the
Funds' other service providers and vendors. The team is comprised of several
information technology and business professionals as well as outside
consultants. The Project Manager of the team reports directly to the
Administrative Committee of Seligman. The Project Manager and other members of
the team also report to the Funds' Board of Directors and its Audit Committee.
The team has identified the service providers and vendors who furnish critical
services or software systems to the Funds, including securities firms that
execute portfolio transactions for the Funds and firms responsible for
shareholder account recordkeeping. The team is working with these critical
service providers and vendors to evaluate the impact year 2000 issues may have
on their ability to provide uninterrupted services to the Funds. The team will
assess the feasibility of their year 2000 plans. The team has made progress on
its year 2000 contingency plans - recovery efforts the team will employ in the
event that year 2000 issues adversely affect the Funds. The team anticipates
finalizing these plans in the near future.
The Funds anticipate the team will implement all significant components of the
team's year 2000 plans by mid-1999, including appropriate testing of critical
systems and receipt of satisfactory assurances from critical service providers
and vendors regarding their year 2000 compliance. The Funds believe that the
critical systems on which they rely will function properly on and after the year
2000, but this is not guaranteed. If these systems do not function properly, or
the Funds' critical service providers are not successful in implementing their
year 2000 plans, the Funds' operations may be adversely affected, including
pricing and securities trading and settlement, and the provision of shareholder
services.
In addition, the Funds may hold securities of issuers whose underlying business
leaves them susceptible to year 2000 issues. The Funds may also hold securities
issued by governmental or quasi-governmental issuers, which, like other
organizations, are also susceptible to year 2000 concerns. Year 2000 issues may
affect an issuer's operations, creditworthiness, and ability to make timely
payment on any indebtedness and could have an adverse impact on the value of its
securities. If the Funds hold these securities, the Funds' performance could be
negatively affected. Seligman seeks to identify an issuer's state of year 2000
readiness as part of the research it employs. However, the perception of an
issuer's year 2000 preparedness is only one of the many factors considered in
determining whether to buy, sell, or continue to hold a security. Information
provided by issuers concerning their state of readiness may or may not be
accurate or readily available. Further, the Fund may be adversely affected if
the domestic or foreign exchanges, markets, depositories, clearing agencies, or
governments or third parties responsible for infrastructure needs do not address
their year 2000 issues in a satisfactory manner.
SDC has informed the Funds that it does not expect the cost of its services to
increase materially as a result of the modifications to its computer systems
necessary to prepare for the year 2000. The Funds will not pay to remediate the
systems of Seligman or bear directly the costs to remediate the systems of any
other service providers or vendors, other than SDC.
24
<PAGE>
EURO CONVERSION
On January 1, 1999, 11 of the 15 member countries in the European Union adopted
the "euro" as a common legal currency. For European issuers, and other entities
with significant markets or operations in Europe (whether or not in the
participating countries), the euro conversion may create strategic challenges as
these entities adapt to a single transnational currency.
The Funds, Seligman, and HIML are monitoring the changing marketplace in Europe
to seek to identify investment opportunities created by the euro and avoid
investments that may adversely affect the performance of any Fund. Despite these
efforts, a Fund's performance may be adversely affected if the issuers of
securities that are purchased, held, or sold by a Fund do not adapt to the
potential changes in the European marketplace as a result of the euro. For
example, the euro will likely result in greater price transparency (making it
more difficult for businesses to charge different prices for the same products
on a country-by-country basis), thereby creating a more competitive marketplace
in Europe. As a result, European issuers and other issuers with significant
markets or operations in Europe (whether or not in the participating countries),
may be adversely affected if they do not adapt to this new competitive
marketplace by cutting costs and streamlining operations. Further, any
participating country may opt out of the euro within the first three years. A
participating country may decide to opt out of the euro for several reasons,
including high unemployment, lack of economic growth, or frustration with the
lack of unity in the participating countries' economies. The risk of one or more
participating countries opting out of the euro is enhanced by the participating
countries' lack of control over their own monetary policies as they have
delegated this function to the European Central Bank. Issuers in a participating
country, as well as other issuers globally, may be adversely impacted in the
event that a participating country terminates its participation in the euro or
the euro itself collapses due to disagreements among the governments of the
participating countries.
25
<PAGE>
SHAREHOLDER INFORMATION
DECIDING WHICH CLASS OF SHARES TO BUY
Each of the Fund's Classes represents an interest in the same portfolio of
investments. However, each Class has its own sales charge schedule, and its
ongoing 12b-1 fees may differ from other Classes. When deciding which Class of
shares to buy, you should consider, among other things:
o The amount you plan to invest.
o How long you intend to remain invested in that Fund, or another Seligman
mutual fund.
o If you would prefer to pay an initial sales charge and lower ongoing 12b-1
fees, or be subject to a CDSC and pay higher ongoing 12b-1 fees.
o Whether you may be eligible for reduced or no sales charges when you buy or
sell shares.
Your financial advisor will be able to help you decide which Class
of shares best meets your needs.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
o Initial sales charge on Fund purchases, as set forth below:
SALES CHARGE REGULAR DEALER
SALES CHARGE AS A % DISCOUNT
AS A % OF NET AS A % OF
AMOUNT OF YOUR INVESTMENT OF OFFERING PRICE(1) AMOUNT INVESTED OFFERING PRICE
-------------------------- ---------------- ---------------- --------------
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.25%
$50,000 - $ 99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and over(2) 0.00 0.00 0.00
(1)"Offering Price" is the amount that you actually pay for Fund shares; it includes the initial sales charge.
(2)You will not pay a sales charge on purchases of $1 million or more, but you will be subject to a 1% CDSC if you sell your
shares within 18 months.
o Annual 12b-1 fee (for shareholder services) of up to 0.25%.
o No sales charge on reinvested dividends or capital gain distributions.
o Certain employer-sponsored defined contribution-type plans can purchase
shares with no initial sales charge.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
CLASS B
o No initial sales charge on purchases.
o A declining CDSC on shares sold within 6 years of purchase:
- ------------------------------------------------
YOUR PURCHASE OF CLASS B SHARES
MUST BE FOR LESS THAN $250,000, BECAUSE
IF YOU ARE INVESTING $250,000 OR MORE YOU
WILL PAY LESS IN FEES AND CHARGES IF YOU BUY
ANOTHER CLASS OF SHARES.
- ------------------------------------------------
YEARS SINCE PURCHASE CDSC
-------------------- ----
Less than 1 year 5%
1 year or more but less than 2 years 4
2 years or more but less than 3 years 3
3 years or more but less than 4 years 3
4 years or more but less than 5 years 2
5 years or more but less than 6 years 1
6 years or more 0
o Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
o Automatic conversion to Class A shares after eight years, resulting in
lower ongoing 12b-1 fees.
o No CDSC when you sell shares purchased with reinvested dividends or capital
gain distributions.
- --------------------------------------------------------------------------------
26
<PAGE>
- --------------------------------------------------------------------------------
CLASS C
o Initial sales charge on Fund purchases, as set forth below:
<TABLE>
<CAPTION>
REGULAR DEALER
SALES CHARGE SALES CHARGE DISCOUNT
AS A % AS A % OF NET AS A % OF
AMOUNT OF YOUR INVESTMENT OF OFFERING PRICE(1) AMOUNT INVESTED OFFERING PRICE
-------------------------- ----------------- ---------------- -------------
<S> <C> <C> <C>
Less than $100,000 1.00% 1.01% 1.00%
$100,000 - $249,999 0.50 0.50 0.50
$250,000 - $1,000,000(2) 0.00 0.00 0.00
</TABLE>
(1) "Offering Price" is the amount that you actually pay for Fund shares; it
includes the initial sales charge.
(2) Your purchase of Class C shares must be for less than $1,000,000 because
if you invest $1,000,000 or more you will pay less in fees and charges
if you buy Class A shares.
o A 1% CDSC on shares sold within eighteen months of purchase.
o Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
o No automatic conversion to Class A shares, so you will be subject to higher
ongoing 12b-1 fees indefinitely.
o No CDSC when you sell shares purchased with reinvested dividends or capital
gain distributions.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS D*
o No initial sales charge on purchases.
o A 1% CDSC on shares sold within one year of purchase.
o Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
o No automatic conversion to Class A shares, so you will be subject to higher
ongoing 12b-1 fees indefinitely.
o No CDSC when you sell shares purchased with reinvested dividends or
capital gain distributions.
* Class D shares are not available to all investors. Beginning June 1,
1999, you may purchase Class D shares only if (1) you already own Class D
shares of the Fund or another Seligman mutual fund, (2) if your financial
advisor of record maintains an omnibus account at SDC, or (3) pursuant
to a 401(k) or other retirement plan program for which Class D shares are
already available or for which the sponsor requests Class D shares because
the sales charge structure of Class D shares is comparable to the sales
charge structure of the other funds offered under the program.
- --------------------------------------------------------------------------------
Each Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of
1940 that allows each Class to pay 12b-1 fees for the sale and distribution of
its shares and/or for providing services to shareholders.
Because each Fund's 12b-1 fees are paid out of each Class's assets on an ongoing
basis, over time these fees will increase your investment expenses and may cost
you more than other types of sales charges.
The Funds' Board of Directors believes that no conflict of interest currently
exists between each Fund's Class A, Class B, Class C and Class D shares. On an
ongoing basis, the Directors, in the exercise of their fiduciary duties under
the Investment Company Act of 1940 and Maryland law, will seek to ensure that no
such conflict arises.
HOW CDSCS ARE CALCULATED
To minimize the amount of the CDSC you may pay when you sell your shares, each
Fund assumes that shares acquired through reinvested dividends and capital gain
distributions (which are not subject to a CDSC) are sold first. Shares that have
been in your account long enough so they are not subject to a CDSC are sold
next. After these shares are exhausted, shares will be sold in the order they
were purchased (oldest to youngest). The amount of any CDSC that you pay will be
based on the shares' original purchase price or current net asset value,
whichever is less.
You will not pay a CDSC when you exchange shares of any Fund to buy the same
class of shares of any other Seligman mutual fund. For the purpose of
calculating the CDSC when you sell shares that you acquired by exchanging shares
of any Fund, it will be assumed that you held the shares since the date you
purchased the shares of that Fund.
27
<PAGE>
PRICING OF FUND SHARES
When you buy or sell shares, you do so at the Class's net asset value (NAV) next
calculated after Seligman Advisors accepts your request. Any applicable sales
charge will be added to the purchase price for Class A shares and Class C
shares. Purchase or sale orders received by an authorized dealer or financial
advisor by the close of regular trading on the New York Stock Exchange (NYSE)
(normally 4:00 p.m. Eastern time) and accepted by Seligman Advisors before the
close of business (5:00 p.m. Eastern time) on the same day will be executed at
the Class's NAV calculated as of the close of regular trading on the NYSE on
that day. Your broker/dealer or financial advisor is responsible for forwarding
your order to Seligman Advisors before the close of business.
- --------------------------------------
NAV:
COMPUTED SEPARATELY FOR EACH
CLASS BY DIVIDING THAT CLASS'S
SHARE OF THE NET ASSETS OF THE
FUND (I.E., ITS ASSETS LESS
LIABILITIES) BY THE TOTAL NUMBER
OF OUTSTANDING SHARES OF THE CLASS.
- -------------------------------------
If your buy or sell order is received by your broker/dealer or financial advisor
after the close of regular trading on the NYSE, or is accepted by Seligman
Advisors after the close of business, the order will be executed at the Class's
NAV calculated as of the close of regular trading on the next NYSE trading day.
When you sell shares, you receive the Class's per share NAV, less any applicable
CDSC.
The NAV of each Fund's shares is determined each day, Monday through Friday, on
days that the NYSE is open for trading. Because the Funds have portfolio
securities that are primarily listed on foreign exchanges that may trade on
weekends or other days when the Funds do not price their shares, the value of a
Fund's portfolio securities may change on days when you may not be able to buy
or sell Fund shares. Because of their higher 12b-1 fees, the NAV of Class B and
Class D shares will generally be lower than the NAV of Class A shares of the
same Fund.
Securities owned by a Fund are valued at current market prices. If reliable
market prices are unavailable, securities are valued in accordance with
procedures approved by the Board of Directors.
OPENING YOUR ACCOUNT
The Funds' shares are sold through authorized broker/dealers or financial
advisors who have sales agreements with Seligman Advisors. There are several
programs under which you may be eligible for reduced sales charges or lower
minimum investments. Ask your financial advisor if any of these programs apply
to you. Class D shares are not available to all investors. For more information,
see "Deciding Which Class of Share to Buy - Class D."
To make your initial investment in a Fund, contact your financial advisor or
complete an account application and send it with your check directly to SDC at
the address provided on the account application. If you do not choose a Class,
your investment will automatically be made in Class A shares.
- -----------------------------------------
YOU MAY BUY SHARES OF ANY FUND FOR ALL
TYPES OF TAX-DEFERRED RETIREMENT PLANS.
CONTACT RETIREMENT PLAN SERVICES AT
THE ADDRESS OR PHONE NUMBER LISTED ON
THE INSIDE BACK COVER OF THIS PROSPECTUS
FOR INFORMATION AND TO RECEIVE THE
PROPER FORMS.
- -----------------------------------------
The required minimum initial investments are:
o Regular (non-retirement) accounts: $1,000
o For accounts opened concurrently with Invest-A-Check(R):
$100 to open if you will be making monthly investments
$250 to open if you will be making quarterly investments
If you buy shares by check and subsequently sell the shares, SDC will not send
your proceeds until your check clears which could take up to 15 calendar days
from the date of your purchase.
You will be sent a statement confirming your purchase, and any subsequent
transactions in your account. You will also be sent quarterly and annual
statements detailing your transactions in that Fund and the other Seligman funds
you own under the same account number. Duplicate account statements will be sent
to you free of charge for the current year and most recent prior year. Copies of
year-end statements for prior years are available for a fee of $10 per year, per
account, with a maximum charge of $150 per account. Send your request and a
check for the fee to SDC.
IF YOU WANT TO BE ABLE TO BUY, SELL, OR EXCHANGE SHARES BY TELEPHONE, YOU
SHOULD COMPLETE AN APPLICATION WHEN YOU OPEN YOUR ACCOUNT. THIS WILL PREVENT
YOU FROM HAVING TO COMPLETE A SUPPLEMENTAL ELECTION FORM (WHICH MAY REQUIRE A
SIGNATURE GUARANTEE) AT A LATER DATE.
28
<PAGE>
HOW TO BUY ADDITIONAL SHARES
After you have made your initial investment, there are many options available to
make additional purchases of Fund shares. Subsequent investments must be for
$100 or more. Shares may be purchased through your authorized financial advisor,
or you may send a check directly to SDC. Please provide either an investment
slip or a note that provides your name(s), Fund name, and account number. Unless
you indicate otherwise, your investment will be made in the Class you already
own. Send investment checks to:
Seligman Data Corp.
P.O. Box 9766
Providence, RI 02940-9766
Your check must be in US dollars and be drawn on a US bank. You may not use
third party or credit card convenience checks for investment.
You may also use the following account services to make additional investments:
INVEST-A-CHECK(R). You may buy Fund shares electronically from a savings or
checking account of an Automated Clearing House (ACH) member bank. If your bank
is not a member of ACH, the Fund will debit your checking account by
preauthorized checks. You may buy Fund shares at regular monthly intervals in
fixed amounts of $100 or more, or regular quarterly intervals in fixed amounts
of $250 or more. If you use Invest-A-Check(R), you must continue to make
automatic investments until the Fund's minimum initial investment of $1,000 is
met or your account may be closed.
AUTOMATIC DOLLAR-COST-AVERAGING. If you have at least $5,000 in Seligman Cash
Management Fund, you may exchange uncertificated shares of that fund to buy
shares of the same class of another Seligman mutual fund at regular monthly
intervals in fixed amounts of $100 or more or regular quarterly intervals in
fixed amounts of $250 or more. If you exchange Class A shares, or Class C
shares, you may pay an initial sales charge to buy Fund shares.
AUTOMATIC CD TRANSFER. You may instruct your bank to invest the proceeds of a
maturing bank certificate of deposit (CD) in shares of the Fund. If you wish to
use this service, contact SDC or your financial advisor to obtain the necessary
forms. Because your bank may charge you a penalty, it is not normally advisable
to withdraw CD assets before maturity.
DIVIDENDS FROM OTHER INVESTMENTS. You may have your dividends from other
companies paid to the Fund. (Dividend checks must include your name, account
number, Fund name, and Class of shares.)
DIRECT DEPOSIT. You may buy Fund shares electronically with funds from your
employer, the IRS, or any other institution that provides direct deposit. Call
SDC for more information.
SELIGMAN TIME HORIZON MATRIX(SM). (Requires an initial total investment of
$10,000.) This is a needs-based investment process, designed to help you and
your financial advisor plan to seek your long-term financial goals. It considers
your financial needs, and helps frame a personalized asset allocation strategy
around the cost of your future commitments and the time you have to meet them.
Contact your financial advisor for more information.
SELIGMAN HARVESTER. If you are a retiree or nearing retirement, this program is
designed to help you establish an investment strategy that seeks to meet your
needs throughout your retirement. The strategy is customized to your personal
financial situation by allocating your assets to seek to address your income
requirements, prioritizing your expenses, and establishing a prudent withdrawal
schedule. Contact your financial advisor for more information.
29
<PAGE>
HOW TO EXCHANGE SHARES AMONG THE SELIGMAN MUTUAL FUNDS
You may sell Fund shares to buy shares of the same Class of another Seligman
mutual fund, or you may sell shares of another Seligman mutual fund to buy
shares of any Fund. Exchanges will be made at each fund's respective NAV. You
will not pay an initial sales charge when you exchange, unless you exchange
Class A shares or Class C shares of Seligman Cash Management Fund to buy shares
of the same class of a Fund or another Seligman mutual fund.
Only your dividend and capital gain distribution options and telephone services
will be automatically carried over to any new fund account. If you wish to carry
over any other account options (for example, Invest-A-Check(R) or Systematic
Withdrawals) to the new fund, you must specifically request so at the time of
your exchange.
If you exchange into a new fund, you must exchange enough to meet the new fund's
minimum initial investment. See "The Seligman Mutual Funds" for a list of the
funds available for exchange. Before making an exchange, contact your financial
advisor or SDC to obtain the applicable fund prospectus(es). You should read and
understand a fund's prospectus before investing. Some funds may not offer all
Classes of shares.
HOW TO SELL SHARES
The easiest way to sell Fund shares is by phone. If you have telephone services,
you may be able use this service to sell Fund shares. Restrictions apply to
certain types of accounts. Please see "Important Policies That May Affect Your
Account."
When you sell Fund shares by phone, a check for the proceeds is sent to your
address of record. If you have current ACH bank information on file, you may
have the proceeds of the sale of your Fund shares directly deposited into your
bank account (typically, 3-4 business days after your shares are sold).
You may sell shares to the Fund through a broker/dealer or your financial
advisor. The Fund does not charge any fees or expenses, other than any
applicable CDSC, for this transaction; however the dealer or financial advisor
may charge a service fee. Contact your financial advisor for more information.
You may always send a written request to sell Fund shares. It may take longer to
get your money if you send your request by mail.
As an additional measure to protect you and the Fund, SDC may confirm written
redemption requests that are (1) for $25,000 or more, or (2) directed to be paid
to an alternate payee or sent to an address other than the address of record,
with you or your financial advisor by telephone before sending you your money.
This will not affect the date on which your redemption request is actually
processed.
You will need to guarantee your signature(s) if the proceeds are:
(1) $50,000 or more;
(2) to be paid to someone other than all account owners, or
(3) mailed to other than your address of record.
- -------------------------------------------------------------------
SIGNATURE GUARANTEE:
PROTECTS YOU AND THE FUNDS FROM FRAUD. IT GUARANTEES THAT
A SIGNATURE IS GENUINE. A GUARANTEE MUST BE
OBTAINED FROM AN ELIGIBLE FINANCIAL INSTITUTION. NOTARIZATION BY A
NOTARY PUBLIC IS not AN ACCEPTABLE GUARANTEE.
- -------------------------------------------------------------------
You may need to provide additional documents to sell Fund shares if you are:
o a corporation;
o an executor or administrator;
o a trustee or custodian; or
o in a retirement plan.
If your Fund shares are represented by certificates, you will need to surrender
the certificates to SDC before you sell your shares.
Contact your financial advisor or SDC's Shareholder Services Department for
information on selling your shares under any of the above circumstances.
You may also use the following account service to sell Fund shares:
SYSTEMATIC WITHDRAWAL PLAN. If you have at least $5,000 in a Fund, you may
withdraw (sell) a fixed dollar amount (minimum of $50) of uncertificated shares
at regular intervals. A check will be sent to you at your address of record or,
if you have current ACH bank information on file, you may have your payments
directly deposited to your predesignated bank account in 3-4 business days after
your shares are sold. If you bought $1,000,000 or more of Class A shares without
an initial sales charge, your withdrawals may be subject to a 1% CDSC if they
occur within 18 months of purchase. If you own Class B, Class C or Class D
shares and reinvest your dividends and capital gain distributions, you may
withdraw 12%, 10%, or 10%, respectively, of the value of your Fund account (at
the time of election) annually without a CDSC.
30
<PAGE>
IMPORTANT POLICIES THAT MAY AFFECT YOUR ACCOUNT
To protect you and other shareholders, each Fund reserves the right to:
o Refuse an exchange request if:
1. you have exchanged twice from the same fund in any three-month period;
2. the amount you wish to exchange equals the lesser of $1,000,000 or 1%
of the Fund's net assets; or 3. you or your financial advisor have
been advised that previous patterns of purchases and sales or
exchanges have been considered excessive.
o Refuse any request to buy Fund shares.
o Reject any request received by telephone.
o Suspend or terminate telephone services.
o Reject a signature guarantee that SDC believes may be fraudulent.
o Close your fund account if its value falls below $500.
o Close your account if it does not have a certified taxpayer identification
number.
TELEPHONE SERVICES
You and your broker/dealer or financial advisor will be able to place the
following requests by telephone, unless you indicate on your account application
that you do not want telephone services:
o Sell uncertificated shares (up to $50,000 per day, payable to account
owner(s) and mailed to address of record).
o Exchange shares between funds.
o Change dividend and/or capital gain distribution options.
o Change your address.
o Establish systematic withdrawals to address of record.
If you do not complete an account application when you open your account,
telephone services must be elected on a supplemental election form (which may
require a signature guarantee).
Restrictions apply to certain types of accounts:
o Trust accounts on which the current trustee is not listed may not sell
Fund shares by phone.
o Corporations may not sell Fund shares by phone.
o IRAs may only exchange Fund shares or request address changes by phone.
o Group retirement plans may not sell Fund shares by phone; plans that allow
participants to exchange by phone must provide a letter of authorization
signed by the plan custodian or trustee and provide a supplemental
election form signed by all plan participants.
Unless you have current ACH bank information on file, you will not be able to
sell Fund shares by phone within thirty days following an address change.
Your request must be communicated to an SDC representative. You may not request
any phone transactions via the automated access line.
You may cancel telephone services at any time by sending a written request to
SDC. Each account owner, by accepting or adding telephone services, authorizes
each of the other owners to make requests by phone. Your broker/dealer or
financial advisor representative may not establish telephone services without
your written authorization. SDC will send written confirmation to the address of
record when telephone services are added or terminated.
During times of heavy call volume, you may not be able to get through to SDC by
phone to request a sale or exchange of Fund shares. In this case, you may need
to write, and it may take longer for your request to be processed. A Fund's NAV
may fluctuate during this time.
The Funds and SDC will not be liable for processing requests received by phone
as long as it was reasonable to believe that the request was genuine.
REINSTATEMENT PRIVILEGE
If you sell Fund shares, you may, within 120 calendar days, use part or all of
the proceeds to buy shares of the same Fund or any other Seligman mutual fund
(reinstate your investment) without paying an initial sales charge or, if you
paid a CDSC when you sold your shares, receiving a credit for the applicable
CDSC paid. This privilege is available only once each calendar year. Contact
your financial advisor for more information. You should consult your tax advisor
concerning possible tax consequences of exercising this privilege.
31
<PAGE>
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Each Fund generally pays any dividends from its net investment income and
distributes net capital gains realized on investments annually. It is expected
that each Fund's distributions will be primarily capital gains.
- --------------------------------
DIVIDEND:
A PAYMENT BY A MUTUAL
FUND, USUALLY DERIVED
FROM THE FUND'S NET INVESTMENT
INCOME (DIVIDENDS AND
INTEREST EARNED ON PORTFOLIO
SECURITIES LESS EXPENSES).
CAPITAL GAIN DISTRIBUTION:
A PAYMENT TO MUTUAL FUND
SHAREHOLDERS WHICH
REPRESENTS PROFITS REALIZED
ON THE SALE OF SECURITIES IN
A FUND'S PORTFOLIO.
EX-DIVIDEND DATE:
THE DAY ON WHICH ANY
DECLARED DISTRIBUTIONS
(DIVIDENDS OR CAPITAL GAINS)
ARE DEDUCTED FROM A FUND'S
ASSETS BEFORE IT CALCULATES
ITS NAV.
- --------------------------------
You may elect to:
(1) reinvest both dividends and capital gain distributions;
(2) receive dividends in cash and reinvest capital gain distributions; or
(3) receive both dividends and capital gain distributions in cash.
Your dividends and capital gain distributions will be reinvested if you do not
instruct otherwise or if you own Fund shares in a Seligman tax-deferred
retirement plan.
If you want to change your election, you may write SDC at the address listed on
the back cover of this prospectus, or, if you have telephone services, you or
your financial advisor may call SDC. Your request must be received by SDC before
the record date to be effective for that dividend or capital gain distribution.
Cash dividends or capital gain distributions will be sent by check to your
address of record or, if you have current ACH bank information on file, directly
deposited into your predesignated bank account within 3-4 business days from the
payable date.
Dividends and capital gain distributions are reinvested to buy additional Fund
shares on the payable date using the NAV of the ex-dividend date.
Dividends on Class B, Class C, and Class D shares will be lower than the
dividends on Class A shares as a result of their higher 12b-1 fees. Capital gain
distributions will be paid in the same amount for each Class.
TAXES
The tax treatment of dividends and capital gain distributions is the same
whether you take them in cash or reinvest them to buy additional Fund shares.
Tax-deferred retirement plans are not taxed currently on dividends or capital
gain distributions or on exchanges.
Dividends paid by the Fund are taxable to you as ordinary income. You may be
taxed at different rates on capital gains distributed by the Fund depending on
the length of time the Fund holds its assets.
When you sell Fund shares, any gain or loss you realize will generally be
treated as a long-term capital gain or loss if you held your shares for more
than one year, or as a short-term capital gain or loss if you held your shares
for one year or less. However, if you sell Fund shares on which a long-term
capital gain distribution has been received and you held the shares for six
months or less, any loss you realize will be treated as a long-term capital loss
to the extent that it offsets the long-term capital gain distribution.
An exchange of Fund shares is a sale and may result in a gain or loss for
federal income tax purposes.
Each January, you will be sent information on the tax status of any
distributions made during the previous calendar year. Because each shareholder's
situation is unique, you should always consult your tax advisor concerning the
effect income taxes may have on your individual investment.
32
<PAGE>
THE SELIGMAN MUTUAL FUNDS
EQUITY
SPECIALTY
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND
SEEKS CAPITAL APPRECIATION BY INVESTING IN COMPANIES OPERATING IN ALL ASPECTS OF
THE COMMUNICATIONS, INFORMATION, AND RELATED INDUSTRIES.
SELIGMAN HENDERSON GLOBAL TECHNOLOGY FUND
SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING
PRIMARILY IN GLOBAL SECURITIES (US AND NON-US) OF COMPANIES IN THE TECHNOLOGY
AND TECHNOLOGY-RELATED INDUSTRIES.
SELIGMAN HENDERSON EMERGING MARKETS GROWTH FUND
SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY IN EQUITY SECURITIES
OF COMPANIES IN EMERGING MARKETS.
SMALL COMPANY
- --------------------------------------------------------------------------------
SELIGMAN FRONTIER FUND
SEEKS GROWTH OF CAPITAL BY INVESTING PRIMARILY IN SMALL COMPANY GROWTH STOCKS.
SELIGMAN SMALL-CAP VALUE FUND
SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING IN EQUITIES OF SMALL
COMPANIES, DEEMED TO BE "VALUE" COMPANIES BY THE INVESTMENT MANAGER.
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING IN SECURITIES OF SMALLER
COMPANIES AROUND THE WORLD, INCLUDING THE US.
MEDIUM COMPANY
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL FUND
SEEKS CAPITAL APPRECIATION BY INVESTING IN THE COMMON STOCKS OF COMPANIES WITH
SIGNIFICANT POTENTIAL FOR GROWTH.
LARGE COMPANY
- --------------------------------------------------------------------------------
SELIGMAN GROWTH FUND
SEEKS LONG-TERM GROWTH OF CAPITAL VALUE AND AN INCREASE IN FUTURE INCOME.
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES FUND
SEEKS CAPITAL APPRECIATION BY INVESTING PRIMARILY IN EQUITY SECURITIES OF
COMPANIES THAT HAVE THE POTENTIAL TO BENEFIT FROM GLOBAL ECONOMIC OR SOCIAL
TRENDS.
SELIGMAN LARGE-CAP VALUE FUND
SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING IN EQUITIES OF LARGE
COMPANIES, DEEMED TO BE "VALUE" COMPANIES BY THE INVESTMENT MANAGER.
SELIGMAN COMMON STOCK FUND
SEEKS FAVORABLE, BUT NOT THE HIGHEST, CURRENT INCOME AND LONG-TERM GROWTH OF
BOTH INCOME AND CAPITAL, WITHOUT EXPOSING CAPITAL TO UNDUE RISK.
SELIGMAN HENDERSON INTERNATIONAL FUND
SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING IN SECURITIES OF MEDIUM- TO
LARGE-SIZED COMPANIES, PRIMARILY IN THE DEVELOPED MARKETS OUTSIDE THE US.
BALANCED
- --------------------------------------------------------------------------------
SELIGMAN INCOME FUND
SEEKS HIGH CURRENT INCOME AND IMPROVEMENT IN CAPITAL VALUE OVER THE LONG TERM,
CONSISTENT WITH PRUDENT RISK OF CAPITAL.
FIXED-INCOME
INCOME
- --------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND FUND
SEEKS TO MAXIMIZE CURRENT INCOME BY INVESTING IN A DIVERSIFIED PORTFOLIO OF
HIGH-YIELDING, HIGH-RISK CORPORATE BONDS, COMMONLY REFERRED TO AS "JUNK BONDS."
SELIGMAN U.S. GOVERNMENT SECURITIES FUND
SEEKS HIGH CURRENT INCOME PRIMARILY BY INVESTING IN A DIVERSIFIED PORTFOLIO OF
SECURITIES GUARANTEED BY THE US GOVERNMENT, ITS AGENCIES, OR INSTRUMENTALITIES,
WHICH HAVE MATURITIES GREATER THAN ONE YEAR.
MUNICIPAL
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS:
NATIONAL FUND
SEEKS MAXIMUM INCOME, EXEMPT FROM REGULAR FEDERAL INCOME TAXES.
STATE-SPECIFIC FUNDS:*
SEEK TO MAXIMIZE INCOME EXEMPT FROM REGULAR FEDERAL INCOME TAXES AND FROM
REGULAR INCOME TAXES IN THE DESIGNATED STATE.
California Louisiana New Jersey
o High-Yield Maryland New York
o Quality Massachusetts North Carolina
Colorado Michigan Ohio
Florida Minnesota Oregon
Georgia Missouri Pennsylvania
South Carolina
* A small portion of income may be subject to state taxes.
MONEY MARKET
- --------------------------------------------------------------------------------
SELIGMAN CASH MANAGEMENT FUND
SEEKS TO PRESERVE CAPITAL AND TO MAXIMIZE LIQUIDITY AND CURRENT INCOME, BY
INVESTING ONLY IN HIGH-QUALITY MONEY MARKET SECURITIES HAVING A MATURITY OF 90
DAYS OR LESS. THE FUND SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE.
33
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand the financial performance
of each Fund's Classes for the past five years or, if less than five years, the
period of the Class's operations. Class C is a new Class, effective June 1,
1999, so financial highlights are not available. Certain information reflects
financial results for a single share of a Class that was held throughout the
periods shown. "Total return" shows the rate that you would have earned (or
lost) on an investment in the Fund, assuming you reinvested all your dividends
and capital gain distributions. Total returns do not reflect any sales charges.
Deloitte & Touche LLP, independent auditors, have audited this information.
Their report, along with each Fund's financial statements, is included in the
Funds' annual report, which is available upon request.
<TABLE>
<CAPTION>
INTERNATIONAL FUND
CLASS A CLASS B
--------------------------------------- -------------------------
YEAR ENDED
YEAR ENDED OCTOBER 31, OCTOBER 31, *4/22/96*
--------------------------------------- -------------- TO
1998 1997 1996 1995 1994 1998 1997 10/31/96
---- ---- ---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:(1)
Net asset value, beginning of period ................ $17.92 $17.17 $16.71 $17.67 $15.98 $17.30 $16.74 $17.38
----- ----- ----- ----- ----- ----- ----- -----
Income from investment operations:
Net investment income ............................. 0.03 (0.04) 0.05 0.06 0.04 (0.12) (0.18) (0.03)
Net gains or losses on securities
(both realized and unrealized) .................. 0.62 2.47 1.77 (0.42) 0.91 0.57 2.42 (0.54)
Net gains or losses on foreign currency
transactions (both realized and unrealized)(2) .. 0.40 (0.79) (0.44) 0.09 1.08 0.40 (0.79) (0.07)
----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations .................... 1.05 1.64 1.38 (0.27) 2.03 0.85 1.45 (0.64)
----- ----- ----- ----- ----- ----- ----- -----
Less distributions:
Dividends (from net income) ....................... -- -- -- -- (0.01) -- -- --
Distributions (from capital gains) ................ (1.22) (0.89) (0.92) (0.69) (0.33) (1.22) (0.89) --
----- ----- ----- ----- ----- ----- ----- -----
Total distributions ................................. (1.22) (0.89) (0.92) (0.69) (0.34) (1.22) (0.89) --
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period ...................... $17.75 $17.92 $17.17 $16.71 $17.67 $16.93 $17.30 $16.74
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN: 6.51% 9.83% 8.43% (1.24)% 12.85% 5.51% 8.90% (3.68)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............$44,122 $46,107 $50,998 $48,763 $62,922 $9,835 $6,350 $2,843
Ratio of expenses to average net assets ............. 1.69% 1.78% 1.81% 1.69% 1.63% 2.55% 2.58% 2.66%+
Ratio of net income to average net assets ........... 0.16% (0.23)% 0.28% 0.35% 0.27% (0.70)% (1.03)% (0.35)%+
Portfolio turnover rate ............................. 81.37% 83.11% 55.71% 60.70% 39.59% 81.37% 83.11% 55.71%++
</TABLE>
- -------------------------
See footnotes on page 40.
34
<PAGE>
INTERNATIONAL FUND
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:(1)
Net asset value, beginning of period .............. $17.30 $16.74 $16.43 $17.53 $15.96
----- ----- ----- ----- -----
Income from investment operations:
Net investment income ........................... (0.12) (0.18) (0.08) (0.07) (0.09)
Net gains or losses on securities
(both realized and unrealized) ................ 0.57 2.42 1.75 (0.43) 0.91
Net gains or losses on foreign currency
transactions (both realized and unrealized)(2). 0.40 (0.79) (0.44) 0.09 1.08
----- ----- ----- ----- -----
Total from investment operations .................. 0.85 1.45 1.23 (0.41) 1.90
----- ----- ----- ----- -----
Less Distributions:
Dividends (from net income) ..................... -- -- -- -- --
Distributions (from capital gains) .............. (1.22) (0.89) (0.92) (0.69) (0.33)
----- ----- ----- ----- -----
Total distributions ............................... (1.22) (0.89) (0.92) (0.69) (0.33)
----- ----- ----- ----- -----
Net asset value, end of period .................... $16.93 $17.30 $16.74 $16.43 $17.53
===== ===== ===== ===== =====
TOTAL RETURN: 5.51% 8.90% 7.62% (2.08)% 12.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .......... $37,485 $40,977 $47,917 $31,273 $19,903
Ratio of expenses to average net assets ........... 2.55% 2.58% 2.64% 2.50% 2.50%
Ratio of net income to average net assets ......... (0.70)% (1.03)% (0.47)% (0.44)% (0.53)%
Portfolio turnover rate ........................... 81.37% 83.11% 55.71% 60.70% 39.59%
Without expense reimbursement and/or
management fee waiver:(3)
Ratios:
Expenses to average net assets .................. 2.62% 2.67%
Net investment income to average net assets ..... (0.56)% (0.70)%
</TABLE>
- ------------------------
See footnotes on page 40.
35
<PAGE>
EMERGING MARKETS GROWTH FUND
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------- -------------------------------
YEAR ENDED 5/28/96* YEAR ENDED *5/28/96*
OCTOBER 31, TO OCTOBER 31, TO
-------------- --------------
1998 1997 10/31/96 1998 1997 10/31/96
----- ----- -------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:(1)
Net asset value, beginning of period ............... $ 7.34 $ 6.78 $ 7.14 $7.27 $ 6.76 $ 7.14
----- ----- ----- ----- ----- -----
Income from investment operations:
Net investment income ............................ (0.01) (0.05) (0.02) (0.06) (0.11) (0.04)
Net gains or losses on securities
(both realized and unrealized) ................. (2.00) 1.05 (0.25) (1.97) 1.06 (0.25)
Net gains or losses on foreign currency
transactions (both realized and unrealized)(2) . (0.15) (0.44) (0.09) (0.15) (0.44) (0.09)
----- ----- ----- ----- ----- -----
Total from investment operations ................... (2.16) 0.56 (0.36) (2.18) 0.51 (0.38)
----- ----- ----- ----- ----- -----
Less distributions:
Distributions .................................... -- -- -- -- -- --
----- ----- ----- ----- ----- -----
Total distributions ................................ -- -- -- -- -- --
----- ----- ----- ----- ----- -----
Net asset value, end of period ..................... $ 5.18 $ 7.34 $ 6.78 $ 5.09 $ 7.27 $ 6.76
===== ===== ===== ===== ===== =====
TOTAL RETURN: (29.43)% 8.26% (5.04)% (29.99)% 7.54% (5.32)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ........... $24,294 $44,061 $19,864 $16,031 $28,819 $10,541
Ratio of expenses to average net assets ............ 2.22% 2.27% 2.22%+ 2.99% 3.04% 3.00%+
Ratio of net income to average net assets .......... (0.12)% (0.56)% (0.69)%+ (0.89)% (1.33)% (1.47)%+
Portfolio turnover rate ............................ 94.09% 84.09% 12.24% 94.09% 84.09% 12.24%
Without expense reimbursement and/or
management fee waiver:(3)
Ratios:
Expenses to average net assets ................... 3.02%+ 3.80%+
Net investment income to average net assets ...... (1.49)%+ (2.27)%+
CLASS D
------------------------------
YEAR ENDED *5/28/96*
OCTOBER 31, TO
--------------
1998 1997 10/31/96
----- ----- --------
PER SHARE DATA:(1)
Net asset value, beginning of period ............... $ 7.27 $ 6.76 $ 7.14
----- ----- -----
Income from investment operations:
Net investment income ............................ (0.06) (0.11) (0.04)
Net gains or losses on securities
(both realized and unrealized) ................. (1.97) 1.06 (0.25)
Net gains or losses on foreign currency
transactions (both realized and unrealized)(2) . (0.15) (0.44) (0.09)
----- ----- -----
Total from investment operations ................... (2.18) 0.51 (0.38)
----- ----- -----
Less Distributions:
Distributions .................................... -- -- --
----- ----- -----
Total distributions ................................ -- -- --
----- ----- -----
Net asset value, end of period ..................... $ 5.09 $ 7.27 $ 6.76
===== ===== =====
TOTAL RETURN: (29.99)% 7.54% (5.32)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ........... $13,667 $31,259 $13,664
Ratio of expenses to average net assets ............ 2.99% 3.04% 3.00%+
Ratio of net income to average net assets .......... (0.89%) (1.33)% (1.47)%+
Portfolio turnover rate ............................ 94.09% 84.09% 12.24%
Without expense reimbursement and/or
management fee waiver:(3)
Ratios:
Expenses to average net assets ................... 3.80%+
Net investment income to average net assets ...... (2.27)%+
</TABLE>
- -------------------------
See footnotes on page 40.
36
<PAGE>
<TABLE>
<CAPTION>
GLOBAL GROWTH OPPORTUNITIES FUND
CLASS A CLASS B
------------------------------- -------------------------------
YEAR ENDED 11/1/95* YEAR ENDED *4/22/96*
OCTOBER 31, TO OCTOBER 31, TO
--------------- --------------
1998 1997 10/31/96 1998 1997 10/31/96
----- ----- -------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:(1)
Net asset value, beginning of period ............... $9.20 $ 8.08 $ 7.14 $9.06 $ 8.02 $ 8.04
----- ----- ----- ----- ----- -----
Income from investment operations:
Net investment income ............................ (0.05) (0.05) (0.03) (0.12) (0.12) (0.04)
Net gains or losses on securities
(both realized and unrealized) ................. 0.81 1.47 1.12 0.80 1.46 0.06
Net gains or losses on foreign currency
transactions (both realized and unrealized)(2) . 0.08 (0.30) (0.15) 0.08 (0.30) (0.04)
----- ----- ----- ----- ----- -----
Total from investment operations ................... 0.84 1.12 0.94 0.76 1.04 (0.02)
----- ----- ----- ----- ----- -----
Less distributions:
Distributions (from capital gains) ............... (0.42) -- -- (0.42) -- --
----- ----- ----- ----- ----- -----
Total distributions ................................ (0.42) -- -- (0.42) -- --
----- ----- ----- ----- ----- -----
Net asset value, end of period ..................... $9.62 $ 9.20 $ 8.08 $9.40 $ 9.06 $ 8.02
===== ===== ===== ===== ===== =====
TOTAL RETURN: 9.52% 13.86% 13.17% 8.76% 12.97% (0.25)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ........... $97,947 $109,060 $107,509 $21,930 $19,311 $9,257
Ratio of expenses to average net assets ............ 1.68% 1.69% 1.91% 2.44% 2.45% 2.53%+
Ratio of net income to average net assets .......... (0.48)% (0.59)% (0.53)% (1.24)% (1.35)% (1.13)%+
Portfolio turnover rate ............................ 45.43% 79.32% 31.44% 45.43% 79.32% 31.44%++
CLASS D
-------------------------------
YEAR ENDED *11/1/95*
OCTOBER 31, TO
-----------------
1998 1997 10/31/96
----- ----- --------
PER SHARE DATA:(1)
Net asset value, beginning of period ............... $9.06 $ 8.02 $ 7.14
----- ----- -----
Income from investment operations:
Net investment income ............................ (0.12) (0.12) (0.09)
Net gains or losses on securities
(both realized and unrealized) ................. 0.80 1.46 1.12
Net gains or losses on foreign currency
transactions (both realized and unrealized)(2) . 0.08 (0.30) (0.15)
----- ----- -----
Total from investment operations ................... 0.76 1.04 0.88
----- ----- -----
Less Distributions:
Distributions (from capital gains) ............... (0.42) -- --
----- ----- -----
Total distributions ................................ (0.42) -- --
----- ----- -----
Net asset value, end of period ..................... $9.40 $ 9.06 $ 8.02
===== ===== =====
TOTAL RETURN: 8.76% 12.97% 12.33%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ........... $64,443 $64,300 $53,540
Ratio of expenses to average net assets ............ 2.44% 2.45% 2.67%
Ratio of net income to average net assets .......... (1.24)% (1.35)% (1.25)%
Portfolio turnover rate ............................ 45.43% 79.32% 31.44%
</TABLE>
- -------------------------
See footnotes on page 40.
37
<PAGE>
<TABLE>
<CAPTION>
GLOBAL SMALLER COMPANIES FUND
CLASS A CLASS B
---------------------------------------- ------------------------
YEAR ENDED *4/22/96*
YEAR ENDED OCTOBER 31, OCTOBER 31, TO
---------------------------------------- --------------
1998 1997 1996 1995 1994 1998 1997 10/31/96
---- ---- ---- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:(1)
Net asset value,
beginning of period ..................... $15.62 $15.14 $13.90 $11.93 $ 9.98 $15.04 $14.72 $14.44
----- ----- ----- ----- ----- ----- ----- -----
Income from investment operations:
Net investment income ................... (0.07) -- -- (0.02) (0.08) (0.18) (0.11) (0.06)
Net gains or losses on securities
(both realized and unrealized) ........ (0.85) 1.61 2.38 2.24 1.57 (0.81) 1.56 0.33
Net gains or losses on foreign
currency transactions (both
realized and unrealized)(2) ........... 0.04 (0.40) (0.18) 0.08 0.52 0.04 (0.40) 0.01
----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations .......... (0.88) 1.21 2.20 2.30 2.01 (0.95) 1.05 0.28
----- ----- ----- ----- ----- ----- ----- -----
Less distributions:
Distributions (from capital gains) ...... (0.63) (0.73) (0.96) (0.33) (0.06) (0.63) (0.73) --
----- ----- ----- ----- ----- ----- ----- -----
Total distributions ....................... (0.63) (0.73) (0.96) (0.33) (0.06) (0.63) (0.73) --
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period ............ $14.11 $15.62 $15.14 $13.90 $11.93 $13.46 $15.04 $14.72
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN: (5.82)% 8.28% 16.95% 20.10% 20.28% (6.54)% 7.39% 1.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) .......................... $374,890 $434,397 $350,359 $102,479 $46,269 $222,496 $247,600 $103,968
Ratio of expenses to
average net assets ...................... 1.65% 1.67% 1.75% 1.83% 1.92% 2,41% 2.43% 2.54%+
Ratio of net income to
average net assets ...................... (0.45)% 0.02% 0.01% (0.20)% (0.77)% (1.21)% (0.74)% (0.80)%+
Portfolio turnover rate ................... 50.81% 57.24% 45.38% 63.05% 62.47% 50.81% 57.24% 45.38%++
CLASS D
----------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
PER SHARE DATA:(1)
Net asset value,
beginning of period ..................... $15.05 $14.72 $13.63 $11.80 $ 9.94
----- ----- ----- ----- -----
Income from investment operations:
Net investment income ................... (0.18) (0.11) (0.11) (0.12) (0.16)
Net gains or losses on securities
(both realized and unrealized) ........ (0.81) 1.57 2.34 2.20 1.57
Net gains or losses on foreign
currency transactions (both
realized and unrealized)(2) ........... 0.04 (0.40) (0.18) 0.08 0.51
----- ----- ----- ----- -----
Total from investment operations .......... (0.95) 1.06 2.05 2.16 1.92
----- ----- ----- ----- -----
Less Distributions:
Distributions (from capital gains) ...... (0.63) (0.73) (0.96) (0.33) (0.06)
----- ----- ----- ----- -----
Total distributions ....................... (0.63) (0.73) (0.96) (0.33) (0.06)
----- ----- ----- ----- -----
Net asset value, end of period ............ $13.47 $15.05 $14.72 $13.63 $11.80
===== ===== ===== ===== =====
TOTAL RETURN: (6.53)% 7.47% 16.14% 19.11% 19.45%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) .......................... $272,992 $370,625 $285,477 $85,548 $38,317
Ratio of expenses to
average net assets ...................... 2.41% 2.43% 2.51% 2.61% 2.70%
Ratio of net income to
average net assets ...................... (1.21)% (0.74)% (0.75)% (0.97)% (1.53)%
Portfolio turnover rate ................... 50.81% 57.24% 45.38% 63.05% 62.47%
</TABLE>
- ----------
See footnotes on page 40.
38
<PAGE>
<TABLE>
<CAPTION>
GLOBAL TECHNOLOGY FUND
CLASS A CLASS B
------------------------------------------ ------------------------
**5/23/94* YEAR ENDED *4/22/96*
YEAR ENDED OCTOBER 31, TO OCTOBER 31, TO
------------------------------- --------------
1998 1997 1996 1995 10/31/94 1998 1997 10/31/96
---- ---- ---- ---- ------- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:(1)
Net asset value,
beginning of period ..................... $15.14 $11.31 $13.05 $ 8.37 $ 7.14 $14.73 $11.09 $11.47
----- ----- ----- ----- ----- ----- ----- -----
Income from investment operations:
Net investment income ................... (0.14) (0.16) (0.08) (0.10) (0.01) (0.23) (0.26) (0.08)
Net gains or losses on securities
(both realized and unrealized) ........ 0.01 4.06 (0.92) 4.90 1.08 0.01 3.97 (0.39)
Net gains or losses on foreign
currency transactions (both
realized and unrealized)(2) ........... 0.06 (0.07) 0.05 (0.05) 0.16 0.06 (0.07) 0.09
----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations .......... (0.07) 3.83 (0.95) 4.75 1.23 (0.16) 3.64 (0.38)
----- ----- ----- ----- ----- ----- ----- -----
Less distributions:
Dividends (from net income) ............. -- -- (0.02) -- -- -- -- --
Distributions (from capital gains) ...... (2.59) -- (0.77) (0.07) -- (2.59) -- --
----- ----- ----- ----- ----- ----- ----- -----
Total distributions ....................... (2.59) -- (0.79) (0.07) -- (2.59) -- --
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period ............ $12.48 $15.14 $11.31 $13.05 $ 8.37 $11.98 $14.73 $11.09
===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN: (0.79)% 33.86% (7.33)% 57.31% 17.23% (1.55)% 32.82% (3.31)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) .......................... $475,951 $583,257 $499,858 $447,732 $50,719 $58,575 $53,046 $18,840
Ratio of expenses to
average net assets ...................... 1.67% 1.67% 1.75% 1.91% 2.00%+ 2.43% 2.42% 2.51%+
Ratio of net income to
average net assets ...................... (1.04)% (1.10)% (0.74)% (0.89)% (0.45)%+ (1.80)% (1.85)% (1.40)%+
Portfolio turnover rate ................... 87.55% 94.06% 73.00% 87.42 29.20% 87.55% 94.06% 73.00%++
Without expense reimbursement
and/or management fee waiver:(3)
Ratios:
Expenses to average net assets .......... 2.18%+
Net investment income to
average net assets .................... (0.63)%+
</TABLE>
- ------------------------
See footnotes on page 40.
39
<PAGE>
<TABLE>
<CAPTION>
GLOBAL TECHNOLOGY FUND
CLASS D
------------------------------------------
**5/23/94*
YEAR ENDED OCTOBER 31, TO
-------------------------------
1998 1997 1996 1995 10/31/94
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:(1)
Net asset value,
beginning of period ..................... $14.73 $11.09 $12.89 $ 8.34 $ 7.14
----- ----- ----- ----- -----
Income from investment operations:
Net investment income ................... (0.23) (0.26) (0.17) (0.18) (0.04)
Net gains or losses on securities
(both realized and unrealized) ........ (0.01) 3.97 (0.91) 4.85 1.08
Net gains or losses on foreign
currency transactions (both
realized and unrealized)(2) ........... 0.06 (0.07) 0.05 (0.05) 0.16
----- ----- ----- ----- -----
Total from investment operations .......... (0.18) 3.64 (1.03) 4.62 1.20
----- ----- ----- ----- -----
Less Distributions:
Distributions (from capital gains) ...... (2.59) -- (0.77) (0.07) --
----- ----- ----- ----- -----
Total distributions ....................... (2.59) -- (0.77) (0.07) --
----- ----- ----- ----- -----
Net asset value, end of period ............ $11.96 $14.73 $11.09 $12.89 $ 8.34
===== ===== ===== ===== =====
TOTAL RETURN: (1.70)% 32.82% (8.07)% 55.95% 16.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) .......................... $184,032 $232,882 $197,412 $161,622 $6,499
Ratio of expenses to
average net assets ...................... 2.43% 2.42% 2.52% 2.66% 2.75%+
Ratio of net income to
average net assets ...................... (1.80)% (1.85)% (1.50)% (1.63)% (1.22)%+
Portfolio turnover rate ................... 87.55% 94.06% 73.00% 87.42% 29.20%
Without expense reimbursement
and/or management fee waiver:(3)
Ratios:
Expenses to average net assets .......... 3.36%+
Net investment income to
average net assets .................... (1.83)%+
</TABLE>
- --------------------------------
(1) Per share amounts are calculated based on average shares outstanding.
(2) The Fund separates the portion of its investment operations that resulted
from changes in foreign exchange rates from the portion that resulted from
changes in the market price of securities held and/or sold by the Fund.
(3) Seligman and Seligman Henderson Co., at their discretion, waived a portion
of their fees and, in some cases, Seligman Henderson Co. reimbursed certain
expenses for the periods presented.
* Commencement of offering of shares.
+ Annualized.
++ For the year ended October 31, 1996.
40
<PAGE>
HOW TO CONTACT US
THE FUND Write: Corporate Communications/
Investor Relations Department
J. & W. Seligman & Co. Incorporated
100 Park Avenue, New York, NY 10017
Phone: Toll-Free (800) 221-7844 in the US or
(212) 850-1864 outside the US
Website: http://www.seligman.com
YOUR REGULAR
(NON-RETIREMENT)
ACCOUNT Write: Shareholder Services Department
Seligman Data Corp.
100 Park Avenue, New York, NY 10017
Phone: Toll-Free (800) 221-2450 in the US or
(212) 682-7600 outside the US
Website: http://www.seligman.com
YOUR RETIREMENT
ACCOUNT Write: Retirement Plan Services
Seligman Data Corp.
100 Park Avenue, New York, NY 10017
Phone: Toll-Free (800) 445-1777
- --------------------------------------------------------------------------------
24-hour telephone access is available by dialing (800) 622-4597 on a touchtone
telephone. You will have instant access to price, yield, account balance, most
recent transaction, and other information.
- --------------------------------------------------------------------------------
41
<PAGE>
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
THE FOLLOWING INFORMATION IS AVAILABLE WITHOUT CHARGE UPON REQUEST: CALL
TOLL-FREE (800) 221-2450 IN THE US OR (212) 682-7600 OUTSIDE THE US.
STATEMENT OF ADDITIONAL INFORMATION (SAI) CONTAINS ADDITIONAL INFORMATION ABOUT
THE FUNDS. IT IS ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC) AND
IS INCORPORATED BY REFERENCE INTO (IS LEGALLY PART OF) THIS PROSPECTUS.
ANNUAL/SEMI-ANNUAL REPORTS CONTAIN ADDITIONAL INFORMATION ABOUT EACH FUND'S
INVESTMENTS. IN THE FUNDS' ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE
MARKET CONDITIONS AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED EACH
FUND'S PERFORMANCE DURING ITS LAST FISCAL YEAR.
- --------------------------------------------------------------------------------
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[LOGO OMITTED]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
Information about the Funds, including the SAI, can be viewed and copied at the
SEC's Public Reference Room in Washington, DC. For information about the
operation of the Public Reference Room, call (800) SEC-0330. The SAI,
Annual/Semi-Annual reports and other information about the Funds are also
available on the SEC's Internet site: http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by writing: Public Reference Section of the SEC, Washington, DC 20549-6009.
SEC FILE NUMBER: 811-6485
<PAGE>
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
Seligman Henderson International Fund
Seligman Henderson Emerging Markets Growth Fund
Seligman Henderson Global Growth Opportunities Fund
Seligman Henderson Global Smaller Companies Fund
Seligman Henderson Global Technology Fund
Statement of Additional Information
June 1, 1999
100 Park Avenue
New York, New York 10017
(212) 850-1864
Toll Free Telephone: (800) 221-2450
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information (SAI) expands upon and supplements the
information contained in the current Prospectus of Seligman Henderson Global
Fund Series, Inc., dated June 1, 1999. This SAI, although not in itself a
prospectus, is incorporated by reference into the Prospectus in its entirety. It
should be read in conjunction with the Prospectus, which you may obtain by
writing or calling the Funds at the above address or telephone numbers.
The financial statements and notes included in the Funds' Annual Report, and the
Independent Auditors' Report thereon, are incorporated herein by reference. The
Annual Report will be furnished to you without charge if you request a copy of
this SAI.
Table of Contents
Fund History ............................................................... 2
Description of the Funds and Their Investments and Risks ................... 2
Management of the Funds .................................................... 10
Control Persons and Principal Holders of Securities......................... 16
Investment Advisory and Other Services ..................................... 17
Brokerage Allocation and Other Practices ................................... 25
Capital Stock and Other Securities ......................................... 26
Purchase, Redemption, and Pricing of Shares ................................ 26
Taxation of the Funds ...................................................... 32
Underwriters................................................................ 34
Calculation of Performance Data ............................................ 37
Financial Statements........................................................ 42
General Information......................................................... 42
Appendix A ................................................................. 43
Appendix B.................................................................. 46
Appendix C.................................................................. 48
<PAGE>
Fund History
Seligman Henderson Global Fund Series, Inc. was incorporated in Maryland on
November 22, 1991 under the name Seligman International Fund Series, Inc. It
changed its name to its present name on May 25, 1993.
Description of the Funds and Their Investments and Risks
Classification
Seligman Henderson Global Fund Series, Inc. is a diversified, open-end
management investment company, or mutual fund. It consists of five separate and
distinct series, or funds:
Seligman Henderson International Fund (International Fund) Seligman Henderson
Emerging Markets Growth Fund (Emerging Markets Growth Fund) Seligman Henderson
Global Growth Opportunities Fund (Global Growth Opportunities Fund) Seligman
Henderson Global Smaller Companies Fund (Global Smaller Companies Fund) Seligman
Henderson Global Technology Fund (Global Technology Fund)
Investment Strategies and Risks
The following information regarding the Funds' investments and risks supplements
the information contained in the Prospectus.
General. In allocating each Fund's investments among geographic regions and
individual countries, the investment manager will consider such factors as the
relative economic growth potential of the various economies and securities
markets; expected levels of inflation; financial, social and political
conditions influencing investment opportunities; and the outlook for currency
relationships.
Each Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. Each Fund will normally
invest its assets in equity securities, including common stock, securities
convertible into or exchangeable for common stock, depositary receipts, and
warrants. A Fund may, however, invest up to 25% of its assets in preferred stock
and debt securities. A Fund that invests "primarily" in a certain type of
security invests at least 65% of its total assets in that type of security.
Dividends or interest income are considered only when the investment manager
believes that such income will favorably influence the market value of a
security in light of each Fund's objective of capital appreciation. Equity
securities in which each Fund invests may be listed on a US or foreign stock
exchange or traded in US or foreign over-the-counter markets.
Debt securities in which each Fund may invest are not required to be rated by a
recognized rating agency. As a matter of policy, each Fund, with the exception
of the Emerging Markets Growth Fund, will invest only in "investment grade" debt
securities or, in the case of unrated securities, debt securities that are, in
the opinion of the investment manager, of equivalent quality to "investment
grade" securities. "Investment grade" debt securities are rated within the four
highest rating categories as determined by Moody's Investors Service, Inc.
(Moody's) or Standard & Poor's Rating Service (S&P). Securities rated within the
highest of the four investment grade categories (i.e., Aaa by Moody's and AAA by
S&P) are judged to be of the best quality and carry the smallest degree of risk.
For capital appreciation, the Emerging Markets Growth Fund may invest up to 5%
of its assets in governmental and corporate debt securities that, at the time of
purchase by the Fund, are rated Baa or lower by Moody's and BBB or lower by S&P
or, if unrated, deemed by the investment manager to be of comparable quality.
The Emerging Markets Growth Fund will not invest in debt securities rated lower
than C by Moody's or C by S&P or, if unrated, deemed by the investment manager
to be of comparable quality. Securities rated Baa/BBB or lower lack high quality
investment characteristics and may also have speculative characteristics.
(Appendix A to the Statement of Additional Information contains a description of
these rating categories.) Debt securities are interest-rate sensitive, so their
value tends to decrease when interest rates rise and increase when interest
rates fall.
2
<PAGE>
Each Fund may invest in securities represented by European Depositary Receipts
(EDRs), American Depositary Receipts (ADRs) and Global Depositary Receipts
(GDRs) (collectively, Depositary Receipts). ADRs are receipts generally issued
by a domestic bank or trust company that represent the deposit of a security of
a foreign issuer. ADRs may be publicly traded on exchanges or over-the-counter
in the United States and are quoted and settled in US dollars at a price that
generally reflects the US dollar equivalent of the home country share price.
EDRs and GDRs are receipts similar to ADRs and are typically issued by foreign
banks or trust companies and traded in Europe. Depositary Receipts may be issued
as sponsored or unsponsored programs. In sponsored programs, the issuer has made
arrangements to have its securities traded in the form of a Depositary Receipt.
In unsponsored programs, the issuer may not be directly involved in the creation
of the program. Although regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, the issuers of unsponsored
Depositary Receipts are not obligated to disclose material information in the
United States and, therefore, the import of such information may not be
reflected in the market value of such securities. For purposes of a Fund's
investment policies, an investment in Depositary Receipts will be deemed to be
an investment in the underlying security.
By investing in foreign securities, a Fund will attempt to take advantage of
differences among economic trends and the performance of securities markets in
various countries. To date, the market values of securities of issuers located
in different countries have moved relatively independently of each other,
although markets in certain regions tend to move in the same direction. During
certain periods, the return on equity investments in some countries has exceeded
the return on similar investments in the United States. The investment manager
believes that, in comparison with investment companies investing solely in
domestic securities, it may be possible to obtain significant appreciation from
a portfolio of foreign investments and securities from various markets that
offer different investment opportunities and are affected by different economic
trends. International and global diversification reduces the effect events in
any one country will have on a Fund's entire investment portfolio. Of course, a
decline in the value of a Fund's investments in one country may offset potential
gains from investments in another country.
Foreign Investment Risk Factors. Investments in securities of foreign issuers
may involve risks that are not associated with domestic investments, and there
can be no assurance that a Fund's foreign investments will present less risk
than a portfolio of domestic securities. Foreign issuers may lack uniform
accounting, auditing and financial reporting standards, practices and
requirements, and there is generally less publicly available information about
foreign issuers than there is about US issuers. Governmental regulation and
supervision of foreign stock exchanges, brokers and listed companies may be less
pervasive than is customary in the United States. Securities of some foreign
issuers are less liquid, and their prices are more volatile, than securities of
comparable domestic issuers. Foreign securities settlement practices may in some
instances be subject to delays and related administrative uncertainties which
could result in temporary periods when assets of a Fund are uninvested and no
return is earned thereon and may involve a risk of loss to a Fund. Foreign
securities markets may have substantially less trading volume than US markets
and far fewer traded issues. Fixed brokerage commissions on foreign securities
exchanges are generally higher than in the United States and transaction costs
with respect to smaller capitalization companies may be higher than those of
larger capitalization companies. Income from foreign securities may be reduced
by a withholding tax at the source or other foreign taxes. In some countries,
there may also be the possibility of expropriation or confiscatory taxation (in
which case a Fund could lose its entire investment in a certain market);
limitations on the removal of moneys or other assets of a Fund; political or
social instability or revolution; or diplomatic developments that could affect
investments in those countries. In addition, it may be difficult to obtain and
enforce a judgment in a court outside the United States.
Each Fund may invest in sovereign debt. The actions of governments concerning
their respective economies could have an important effect on their ability or
willingness to service their sovereign debt. Such actions could have significant
effects on market conditions and on the prices of securities and instruments
held by a Fund, including the securities and instruments of foreign private
issuers. Factors which may influence the ability or willingness of foreign
sovereigns to service debt include, but are not limited to: the availability of
sufficient foreign exchange on the date payment is due; the relative size of its
debt service burden to the economy as a whole; its balance of payments
(including export performance) and cash flow situation; its access to
international credits and investments; fluctuations in interest and
3
<PAGE>
currency rates and reserves; and its government's policies towards the
International Monetary Fund, the World Bank and other international agencies. If
a foreign sovereign defaults on all or a portion of its foreign debt, a Fund may
have limited legal recourse against the issuer and/or guarantor. In some cases,
remedies must be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign sovereign debt securities to obtain recourse
may be subject to the political climate in the prevailing country.
Foreign Currency Risk Factors. Investments in foreign securities will usually be
denominated in foreign currency, and each Fund may be affected, favorably or
unfavorably, by the relative strength of the US dollar, changes in foreign
currency and US dollar exchange rates, and exchange control regulations. A Fund
may incur costs in connection with conversions between various currencies. A
Fund's net asset value per share will be affected by changes in currency
exchange rates. Changes in foreign currency exchange rates may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities, and net investment income and gains, if any, to be distributed to
shareholders by a Fund. The rate of exchange between the US dollar and other
currencies is generally determined by the forces of supply and demand in the
foreign exchange markets (which in turn are affected by interest rates, trade
flow, and numerous other factors, including, in some countries, local
governmental intervention), but can sometimes be affected by the imposition of
fixed exchange rates that may overvalue a foreign currency, to the detriment of
foreign investors.
Emerging Market Investment Risk Factors. Some of the risks described in the
preceding paragraphs may be more severe for investments in emerging countries.
By comparison with the United States and other developed countries, emerging
countries may have relatively unstable governments, economies based on a less
diversified industrial base and securities markets that trade a smaller number
of securities. Companies in emerging markets may generally be smaller, less
seasoned and more recently organized than many domestic companies. Prices of
securities traded in the securities markets of emerging countries tend to be
volatile. Furthermore, foreign investors are subject to many restrictions in
emerging countries. These restrictions may require, among other things,
governmental approval prior to making investments or repatriating income or
capital or the payment of special levies and taxes, or may impose limits on the
amount or type of securities held by foreigners or on the companies in which the
foreigners may invest.
The economies of individual emerging countries may differ favorably or
unfavorably from the US economy in such respects as growth of gross domestic
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency, and balance of payment position and may be based on a
substantially less diversified industrial base. Further, the economies of
emerging countries generally are heavily dependent upon international trade and,
accordingly, have been, and may continue to be, adversely affected by trade
barriers, exchange controls, managed adjustments in relative currency values,
and other protectionist measures imposed or negotiated by the countries with
which they trade. These economies also have been, and may continue to be,
adversely affected by economic conditions in the countries with which they
trade. Smaller Company Investment Risk Factors. The investment manager believes
that smaller companies generally have greater earnings and sales growth
potential than larger companies. However, investments in such companies may
involve greater risks, such as limited product lines, limited markets and
limited financial or managerial resources. Less frequently traded securities may
be subject to more abrupt price movements than securities of larger companies.
Technology Investment Risk Factors. The value of Global Technology Fund shares
may be susceptible to factors affecting technology and technology-related
industries and to greater risk and market fluctuation than an investment in a
fund that invests in a broader range of portfolio securities. Technology and
technology-related industries may be subject to greater governmental regulation
than many other industries in certain countries, as well as changes in
governmental policies, and the need for regulatory approvals may have a material
adverse effect on these industries. Additionally, these companies may be subject
to risks of developing technologies, competitive pressures, and other factors
and are dependent upon consumer and business acceptance as new technologies
evolve. Securities of smaller, less experienced companies also may involve
greater risks, such as limited product lines, limited markets and limited
4
<PAGE>
financial or managerial resources, and trading in such securities may be subject
to more abrupt price movements than trading in the securities of larger
companies.
Derivatives. Each Fund may invest in financial instruments commonly known as
"derivatives" only for hedging or investment purposes. A Fund will not invest in
derivatives for speculative purposes, which means where the derivative
investment exposes the Fund to undue risk of loss, such as where the risk of
loss is greater than the cost of the investment.
A derivative is generally defined as an instrument whose value is derived from,
or based upon, some underlying index, reference rate (e.g., interest rates or
currency exchange rates), security, commodity, or other asset. A Fund will not
invest in a specific type of derivative without prior approval from the Funds'
Board of Directors after consideration of, among other things, how the
derivative instrument serves the Fund's investment objective, and the risks
associated with the investment. The only types of derivatives in which each Fund
is currently permitted to invest are forward foreign currency exchange
contracts, stock purchase rights and warrants, and put options.
Forward Foreign Currency Exchange Contracts. The investment manager will
consider changes in exchange rates in making investment decisions. As one way of
managing exchange rate risk, each Fund may enter into forward currency exchange
contracts. A forward foreign currency exchange contract is an agreement to
purchase or sell a specific currency at a future date and at a price set at the
time the contract is entered into. A Fund will usually enter into these
contracts to fix the US dollar value of a security that it has agreed to buy or
sell for the period between the date the trade was entered into and the date the
security is delivered and paid for. A Fund may also use these contracts to hedge
the US dollar value of securities it already owns. A Fund may be required to
cover certain forward currency contract positions by establishing a segregated
account with its custodian that will contain only liquid assets, such as US
Government securities or other liquid high-grade debt obligations.
A Fund may enter into a forward contract to sell or buy the amount of a foreign
currency it believes may experience a substantial movement against another
currency (including the US dollar). In this case the contract would approximate
the value of some or all of a Fund's portfolio securities denominated in such
foreign currency. If appropriate, a Fund may hedge all or part of its foreign
currency exposure through the use of a basket of currencies or a proxy currency
where such currencies or proxy currency act as an effective proxy for other
currencies. In these circumstances, a Fund may enter into a forward contract
where the amount of the foreign currency to be sold exceeds the value of the
securities denominated in such currency. The use of this basket hedging
technique may be more efficient and economical than entering into separate
forward contracts for each currency held in a Fund. The precise matching of the
forward contract amounts and the value of the securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movement in the value of those
securities between the date the forward contract is entered into and the date it
matures. The projection of short-term currency market movement is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. Under certain circumstances, a Fund may commit a substantial
portion or the entire value of its assets to the consummation of these
contracts. The investment manager will consider the effect a substantial
commitment of its assets to forward contracts would have on the investment
program of each Fund and its ability to purchase additional securities.
Except as set forth above and immediately below, a Fund will also not enter into
such forward contracts or maintain a net exposure to such contracts where the
consummation of the contracts would oblige a Fund to deliver an amount of
foreign currency in excess of the value of such Fund's portfolio securities or
other assets denominated in that currency. A Fund, in order to avoid excess
transactions and transaction costs, may nonetheless maintain a net exposure to
forward contracts in excess of the value of its portfolio securities or other
assets denominated in that currency provided the excess amount is "covered" by
cash or liquid, high-grade debt securities, denominated in any currency, having
a value at least equal at all times to the amount of such excess. Under normal
circumstances, consideration of the prospect for currency parities will be
incorporated into the longer-term investment decisions made with regard to
overall diversification strategies. However, the investment manager believes
that it is important to have the flexibility to enter into such forward
contracts when it determines that the best interests of a Fund will be served.
5
<PAGE>
At the maturity of a forward contract, a Fund may either sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute precision the
market value of portfolio securities at the expiration of the forward contract.
Accordingly, it may be necessary for a Fund to purchase additional foreign
currency on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency such
Fund is obligated to deliver and if a decision is made to sell the security and
make delivery of the foreign currency. Conversely, it may be necessary to sell
on the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency a
Fund is obligated to deliver. However, a Fund may use liquid, high-grade debt
securities, denominated in any currency, to cover the amount by which the value
of a forward contract exceeds the value of the securities to which it relates.
If a Fund retains the portfolio security and engages in an offsetting
transaction, such Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If a Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between a Fund's entering into a forward contract for the sale
of a foreign currency and the date it enters into an offsetting contract for the
purchase of the foreign currency, such Fund will realize a gain to the extent
the price of the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, a Fund will
suffer a loss to the extent the price of the currency it has agreed to purchase
exceeds the price of the currency it has agreed to sell.
The Fund's dealing in forward foreign currency exchange contracts will generally
be limited to the transactions described above. However, each Fund reserves the
right to enter into forward foreign currency contracts for different purposes
and under different circumstances. Of course, a Fund is not required to enter
into forward contracts with regard to its foreign currency-denominated
securities and will not do so unless deemed appropriate by the investment
manager.
Although a Fund will seek to benefit by using forward contracts, anticipated
currency movements may not be accurately predicted and the Fund may therefore
incur a gain or loss on a forward contract. A forward contract may help reduce a
Fund's losses on securities denominated in foreign currency, but it may also
reduce the potential gain on the securities depending on changes in the
currency's value relative to the US dollar or other currencies. Additionally,
this method of hedging against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange at a future date. Foreign currency forward
contracts may not be available to a Fund on reasonable terms in many situations
and a Fund may frequently choose not to enter into such contracts even when they
are available.
Investors should be aware of the costs of currency conversion. Although foreign
exchange dealers do not charge a fee for conversion, they do realize a profit or
"spread" based on the difference between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to a Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.
Rights and Warrants. Each Fund may invest in common stock rights and warrants
believed by the investment manager to provide capital appreciation
opportunities. Common stock rights and warrants received as part of a unit or
attached to securities purchased (i.e., not separately purchased) are not
included in a Fund's investment restrictions regarding such securities.
A Fund may not invest in rights and warrants if, at the time of acquisition, the
investment in rights and warrants would exceed 5% of the Fund's net assets
(valued at the lower of cost or market). In addition, no more than 2% of net
assets of a Fund may be invested in warrants not listed on the New York or
American
6
<PAGE>
Stock Exchanges. For purposes of this restriction, rights and warrants acquired
by the Fund in units or attached to securities may be deemed to have been
purchased without cost.
Put Options. Each Fund may purchase put options on portfolio securities in an
attempt to provide a hedge against a decrease in the market price of an
underlying security held by the Fund. A Fund will not purchase options for
speculative purposes.
Purchasing a put option gives a Fund the right to sell, and obligates the writer
to buy, the underlying security at the exercise price at any time during the
option period. This hedge protection is provided during the life of the put
option since the Fund, as holder of the put option, can sell the underlying
security at the put exercise price regardless of any decline in the underlying
security's market price.
In order for a put option to be profitable, the market price of the underlying
security must decline sufficiently below the exercise price to cover the premium
and transaction costs. By using put options in this manner, a Fund will reduce
any profit it might otherwise have realized in the underlying security by the
premium paid for the put option and by transaction costs.
Because a purchased put option gives the purchaser a right and not an
obligation, the purchaser is not required to exercise the option. If the
underlying position incurs a gain, a Fund would let the put option expire
resulting in a reduced profit on the underlying security equal to the cost of
the put option.
When the Fund purchases an option, it is required to pay a premium to the party
writing the option and a commission to the broker selling the option. If the
option is exercised by the Fund, the premium and the commission paid may be
greater than the amount of the brokerage commission charged if the security were
to be purchased or sold directly. The cost of the put option is limited to the
premium plus commission paid. The Fund's maximum financial exposure will be
limited to these costs.
A Fund may purchase both listed and over-the-counter put options. The Fund will
be exposed to the risk of counterparty nonperformance in the case of
over-the-counter put options.
Put options on securities may not be available to a Fund on reasonable terms in
many situations and a Fund may frequently choose not to purchase options even
when they are available. A Fund's ability to engage in option transactions may
be limited by tax considerations.
Other Investment Companies. Certain emerging markets have restrictions that
preclude or limit direct foreign investment in the securities of their
companies. However, indirect foreign investment is permitted in certain emerging
markets through governmentally authorized investment vehicles or companies,
including closed-end investment companies, which may be acquired at prices in
excess of their net asset values. In accordance with the 1940 Act, each Fund may
invest up to 10% of its assets in shares of other investment companies. If a
Fund invests in other investment companies, shareholders would bear not only
their proportionate share of that Fund's expenses (including operating expenses
and advisory fees), but also similar expenses of the underlying investment
companies.
Short Sales. Each Fund may sell securities short "against-the-box." A short sale
"against-the-box" is a short sale in which a Fund owns an equal amount of the
securities sold short or securities convertible into or exchangeable without
payment of further consideration for securities of the same issuer as, and equal
in amount to, the securities sold short.
Repurchase Agreements. Each Fund may enter into repurchase agreements with
commercial banks and broker/dealers as a short-term cash management tool. A
repurchase agreement is an agreement under which a Fund acquires a security,
generally a US Government obligation, subject to resale at a mutually
agreed-upon price and time. The resale price reflects an agreed upon interest
rate effective for the period of time a Fund holds the security and is unrelated
to the interest rate on the security. A Fund's repurchase agreement will at all
times be fully collateralized.
7
<PAGE>
Repurchase agreements could involve certain risks in the event of bankruptcy or
other default by the seller, including possible delays and expenses in
liquidating securities underlying the agreement, a decline in the value of the
underlying securities and a loss of interest. Repurchase agreements are
typically entered into for periods of one week or less. As a matter of
fundamental policy, a Fund will not enter into repurchase agreements of more
than one week's duration if more than 10% of its net assets would be invested in
such agreements and other illiquid securities.
Illiquid Securities. Each Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933 (1933
Act)) and other securities that are not readily marketable. Each Fund does not
currently expect to invest more than 5% of its assets in such securities. A Fund
may purchase restricted securities that can be offered and sold to "qualified
institutional buyers" under Rule 144A of the 1933 Act, and, the Funds' Board of
Directors, may determine, when appropriate, that specific Rule 144A securities
are liquid and not subject to the 15% limitation on illiquid securities. Should
the Board of Directors make this determination, it will carefully monitor the
security (focusing on such factors, among others as trading activity and
availability of information) to determine that the Rule 144A security continues
to be liquid. It is not possible to predict with assurance exactly how the
market for Rule 144A securities will further evolve. This investment practice
could have the effect of increasing the level of illiquidity in a Fund, if and
to the extent that qualified institutional buyers become for a time uninterested
in purchasing Rule 144A securities.
Borrowing. Each Fund may borrow money only from banks and only for temporary or
emergency purposes (but not for the purchase of portfolio securities) in an
amount not in excess of 5% of each Fund's total assets (except the Emerging
Markets Growth Fund, where such borrowings will not exceed 10% of the Fund's
total assets) and will be made at prevailing interest rates. Each Fund's
borrowings are limited so that immediately after such borrowing the value of its
assets (including borrowings) less its liabilities (not including borrowings) is
at least three times the amount of the borrowings. Should a Fund, for any
reason, have borrowings that do not meet the above test, that Fund must reduce
its borrowings so as to meet the foregoing test within three business days.
Under these circumstances, a Fund may have to liquidate portfolio securities at
a time when it is disadvantageous to do so. Gains made with additional funds
borrowed will generally cause the net asset value of a Fund's shares to rise
faster than could be the case without borrowings. Conversely, if investment
results fail to cover the cost of borrowings, the net asset value of a Fund
could decrease faster than if there had been no borrowings.
Lending of Portfolio Securities. Each Fund may lend portfolio securities to
broker/dealers or other institutions, if the investment manager believes such
loans will be beneficial to a Fund. The borrower must maintain with the Fund
cash or equivalent collateral equal to at least 100% of the market value of the
securities loaned. During the time portfolio securities are on loan, the
borrower pays the Fund any dividend or interest paid on the securities. The Fund
may invest the collateral and earn additional income or receive an agreed upon
amount of interest income from the borrower. Loans made by a Fund will generally
be short-term. Loans are subject to termination at the option of the Fund or the
borrower. The Fund may pay reasonable administrative and custodial fees in
connection with a loan and may pay a negotiated portion of the interest earned
on the collateral to the borrower or placing broker. The Fund does not have the
right to vote securities on loan, but would terminate the loan and regain the
right to vote if it were considered important with respect to the investment.
The Fund may lose money if a borrower defaults on its obligation to return
securities and the value of the collateral held by the Fund is insufficient to
replace the loaned securities. In addition, the Fund is responsible for any loss
that might result from its investment of the borrower's collateral.
Except as otherwise specifically noted above, a Fund's investment strategies are
not fundamental and the Funds, with the approval of the Board of Directors, may
change such strategies without the vote of shareholders.
8
<PAGE>
Fund Policies
Each Fund is subject to fundamental policies that place restrictions on certain
types of investments. These policies cannot be changed except by vote of a
majority of the Fund's outstanding voting securities. Under these policies, each
Fund may not:
1. As to 75% of the value of its total assets, invest more than 5% of its
total assets, at market value, in the securities of any one issuer (except
securities issued or guaranteed by the US Government, its agencies or
instrumentalities).
2. Invest more than 25% of its total assets, at market value, in the
securities of issuers principally engaged in the same industry (except
securities issued or guaranteed by the US Government, its agencies or
instrumentalities).
3. Own more than 10% of the outstanding voting securities of any issuer, or
more than 10% of any class of securities of one issuer.
4. Invest more than 5% of the value of its total assets, at market value, in
the securities of issuers which, with their predecessors, have been in
business less than three years; provided, however, that securities
guaranteed by a company that (including predecessors) has been in operation
at least three continuous years shall be excluded from this limitation.
5. Purchase securities of open-end or closed-end investment companies, except
as permitted by the Investment Company Act of 1940, as amended, and other
applicable law or for the purpose of hedging the Fund's obligations under
the Deferred Compensation Plan for Directors.
6. Invest in warrants if, at the time of acquisition, the investment in
warrants, valued at the lower of cost or market value, would exceed 5% of
the Fund's net assets. For purposes of this restriction, warrants acquired
by a Fund in units or attached to securities may be deemed to have been
purchased without cost.
7. Make loans of money or securities other than (a) through the purchase of
securities in accordance with a Fund's investment objective, (b) through
repurchase agreements and (c) by lending portfolio securities in an amount
not to exceed 33 1/3% of its total assets.
8. Issue senior securities or borrow money except from banks and then in
amounts not in excess of 5% (10% for Emerging Markets Growth Fund) of its
total assets, as described above.
9. Buy any securities or other property on margin (except for such short-term
credits as are necessary for the clearance of transactions).
10. Invest in companies for the purpose of exercising control or management.
11. Underwrite securities of other issuers except to the extent that a Fund may
be deemed an underwriter when purchasing or selling portfolio securities.
12. Purchase or retain securities of any issuer (other than the shares of the
Fund) if to the Fund's knowledge, those officers and directors of the Fund
and the officers and directors of the investment manager or subadviser, who
individually own beneficially more than 1/2 of 1% of the outstanding
securities of such issuer, together own beneficially more than 5% of such
outstanding securities.
13. Purchase or sell real estate (although it may purchase securities secured
by real estate or interests therein, or issued by companies or investment
trusts that invest in real estate or interests therein).
14. Make short sales except short sales against-the-box.
9
<PAGE>
Each Fund also may not change its investment objective without shareholder
approval.
Under the Investment Company Act of 1940, as amended (1940 Act), a "vote of a
majority of the outstanding voting securities" of a Fund means the affirmative
vote of the lesser of (l) more than 50% of the outstanding shares of the Fund;
or (2) 67% or more of the shares present at a shareholders' meeting if more than
50% of the outstanding shares are represented at the meeting in person or by
proxy.
Temporary Defensive Position
In an attempt to respond to adverse market, economic, political, or other
conditions, the Fund may invest up to 100% of its assets in cash or cash
equivalents, including, but not limited to, prime commercial paper, bank
certificates of deposit, bankers' acceptances, or repurchase agreements for such
securities, and securities of the US Government and its agencies and
instrumentalities, as well as cash and cash equivalents denominated in foreign
currencies. The Fund's investments in foreign cash equivalents will be limited
to those that, in the opinion of the investment manager, equate generally to the
standards established for US cash equivalents. Investments in bank obligations
will be limited at the time of investment to the obligations of the 100 largest
domestic banks in terms of assets which are subject to regulatory supervision by
the US Government or state governments, and the obligations of the 100 largest
foreign banks in terms of assets with branches or agencies in the United States.
Portfolio Turnover
A Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the fiscal year by the monthly
average of the value of the portfolio securities owned during the fiscal year.
Securities whose maturity or expiration date at the time of acquisition were one
year or less are excluded from the calculation. The Funds' portfolio turnover
rates for the fiscal years ended October 31, 1998 and 1997 were:
Fund 1998 1997
---- ---- ----
International Fund 81.37% 83.11%
Emerging Markets Growth Fund 94.09 84.09
Global Growth Opportunities Fund 45.43 79.32
Global Smaller Companies Fund 50.81 57.24
Global Technology Fund 87.55 94.06
Management of the Funds
Board of Directors
The Board of Directors provides broad supervision over the affairs of the Funds.
Management Information
Directors and officers of the Funds, together with information as to their
principal business occupations during the past five years are shown below. Each
Director who is an "interested person" of the Funds, as defined in the 1940 Act,
is indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.
10
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
William C. Morris* Director, Chairman of the Chairman, J. & W. Seligman & Co. Incorporated,
(61) Board, Chief Executive Chairman and Chief Executive Officer, the Seligman
Officer and Chairman of the Group of investment companies; Chairman, Seligman
Executive Committee Advisors, Inc, Seligman Services, Inc., and Carbo
Ceramics Inc., ceramic proppants for oil and gas
industry; and Director, Seligman Data Corp.,
Kerr-McGee Corporation, diversified energy company.
Formerly, Director, Daniel Industries Inc.,
manufacturer of oil and gas metering equipment.
Brian T. Zino* Director, President and Director and President, J. & W. Seligman & Co.
(46) Member of the Executive Incorporated; President (with the exception of
Committee Seligman Quality Municipal Fund, Inc. and Seligman
Select Municipal Fund, Inc.) and Director or Trustee,
the Seligman Group of investment companies; Chairman,
Seligman Data Corp.; Member of the Board of Governors
of the Investment Company Institute and Director, ICI
Mutual Insurance Company; Seligman Advisors, Inc.,
and Seligman Services, Inc.
Richard R. Schmaltz* Director and Member of the Director and Managing Director, Director of
(58) Executive Committee Investments, J. & W. Seligman & Co. Incorporated;
Director or Trustee, the Seligman Group of investment
companies (except Seligman Cash Management Fund, Inc.);
Director, Seligman Henderson Co., and Trustee Emeritus of
Colby College. Formerly, Director, Investment Research at
Neuberger & Berman from May 1993 to September 1996.
John R. Galvin Director Dean, Fletcher School of Law and Diplomacy at Tufts
(69) University; Director or Trustee, the Seligman Group
Tufts University of investment companies; Chairman Emeritus, American
Packard Avenue, Council on Germany; Governor of the Center for
Medford, MA 02155 Creative Leadership; Director; Raytheon Co.,
electronics; National Defense University; and the
Institute for Defense Analysis. Formerly, Director,
USLIFE Corporation, life insurance; Ambassador, U.S.
State Department for negotiations in Bosnia;
Distinguished Policy Analyst at Ohio State University
and Olin Distinguished Professor of National Security
Studies at the United States Military Academy. From
June 1987 to June 1992, he was the Supreme Allied
Commander, Europe and the Commander-in-Chief, United
States European Command.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
Alice S. Ilchman Director Retired President, Sarah Lawrence College; Director
(64) or Trustee, the Seligman Group of investment
18 Highland Circle companies; Trustee, the Committee for Economic
Bronxville, NY 10708 Development; and Chairman, The Rockefeller
Foundation, charitable foundation. Formerly,
Trustee, The Markle Foundation, philanthropic organization;
and Director, New York Telephone Company and International
Research and Exchange Board, intellectual exchanges.
Frank A. McPherson Director Retired Chairman and Chief Executive Officer of
(66) Kerr-McGee Corporation; Director or Trustee, the
123 Robert S. Kerr Ave. Seligman Group of investment companies; Director,
Oklahoma City, OK 73112 Kimberly-Clark Corporation, consumer products; Bank
of Oklahoma Holding Company; Baptist Medical Center;
Oklahoma Chapter of the Nature Conservancy; Oklahoma Medical
Research Foundation; and National Boys and Girls Clubs of
America; and Member of the Business Roundtable and National
Petroleum Council. Formerly, Chairman, Oklahoma City Public
Schools Foundation; and Director, Federal Reserve System's
Kansas City Reserve Bank and the Oklahoma City Chamber of
Commerce.
John E. Merow Director Retired Chairman and Senior Partner, Sullivan &
(69) Cromwell, law firm; Director or Trustee, the Seligman
125 Broad Street, Group of investment companies; Director, Commonwealth
New York, NY 10004 Industries, Inc., manufacturers of aluminum sheet
products; the Foreign Policy Association; Municipal Art
Society of New York; the U.S. Council for International
Business; and New York Presbyterian Hospital; Chairman,
American Australian Association; and New York Presbyterian
Healthcare Network, Inc.; Vice-Chairman, the U.S.-New
Zealand Council; and Member of the American Law Institute
and Council on Foreign Relations.
Betsy S. Michel Director Attorney; Director or Trustee, the Seligman Group of
(56) investment companies; Trustee, The Geraldine R. Dodge
P.O. Box 449 Foundation, charitable foundation; and Chairman of
Gladstone, NJ 07934 the Board of Trustees of St. George's School
(Newport, RI). Formerly, Director, the National
Association of Independent Schools (Washington, DC).
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address With Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
James C. Pitney Director Retired Partner, Pitney, Hardin, Kipp & Szuch, law
(72) firm; Director or Trustee, the Seligman Group of
Park Avenue at Morris investment companies. Formerly, Director, Public
County, P.O. Box 1945, Service Enterprise Group, public utility.
Morristown, NJ 07962
James Q. Riordan Director Director or Trustee, the Seligman Group of investment
(71) companies; Director, The Houston Exploration Company;
675 Third Avenue, The Brooklyn Museum, KeySpan Energy Corporation; and
Suite 3004 Public Broadcasting Service; and Trustee, the
New York, NY 10017 Committee for Economic Development. Formerly,
Co-Chairman of the Policy Council of the Tax
Foundation; Director, Tesoro Petroleum Companies,
Inc. and Dow Jones & Company, Inc.; Director and
President, Bekaert Corporation; and Co-Chairman,
Mobil Corporation.
Robert L. Shafer Director Retired Vice President, Pfizer Inc.; Director or
(66) Trustee, the Seligman Group of investment companies.
96 Evergreen Avenue, Formerly, Director, USLIFE Corporation.
Rye, NY 10580
James N. Whitson Director Director and Consultant, Sammons Enterprises, Inc.;
(64) Director or Trustee, the Seligman Group of investment
6606 Forestshire Drive companies; Director, C-SPAN and CommScope, Inc.,
Dallas, TX 75230 manufacturer of coaxial cables. Formerly, Executive
Vice President, Chief Operating Officer, Sammons
Enterprises, Inc.; and Director, Red Man Pipe and Supply
Company, piping and other materials.
Peter Bassett Vice President and Portfolio Portfolio Manager, Henderson Investment Management
(43) Manager Limited. He has been a portfolio manager at
Henderson plc since December 1992.
Iain C. Clark Vice President and Portfolio Chief Investment Officer, Henderson Investment
(48) Manager Management Limited since April 1992. He has been a
Director at Henderson International Limited and Senior
Portfolio Manager at Henderson plc, respectively, since
April 1985.
Nitin Mehta Vice President and Portfolio Portfolio Manager, Henderson Investment Management
(38) Manager Limited. He has been a portfolio manager at
Henderson plc since September 1994. From May 1993 to
September 1994, he was Head of Currency Management
and Derivatives at Quorum Capital Management.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
Arsen Mrakovcic Vice President and Portfolio Managing Director, J. & W. Seligman & Co.
(33) Manager Incorporated; Vice President and Portfolio Manager,
two other open-end investment companies in the
Seligman Group of investment companies. Formerly,
Vice President, Investment Officer,
J. & W. Seligman & Co. Incorporated from
January 1995 to January 1996 and Portfolio Assistant,
J. & W. Seligman & Co. Incorporated from June 1992 to
January 1995.
Brian Ashford-Russell Vice President and Portfolio Portfolio Manager, Henderson Investment Management
(40) Manager Limited. He has been a portfolio manager at
Henderson plc since February 1993.
Marion S. Schultheis Vice President and Portfolio Managing Director, J. & W. Seligman & Co.
(45) Manager Incorporated since May 1998; Vice President and
Portfolio Manager, two other open-end investment companies
in the Seligman Group of investment companies. Formerly,
Managing Director at Chancellor LGT from October 1997 until
May 1998; and Senior Portfolio Manager at IDS Advisory Group
Inc. from August 1987 until October 1997.
Paul H. Wick Vice President and Portfolio Managing Director and Director, J. & W. Seligman &
(36) Manager Co. Incorporated since January 1995 and November
1997, respectively; Vice President and Portfolio Manager,
two other open-end investment companies in the Seligman
Group of investment companies; Portfolio Manager, Henderson
Investment Management Limited. He joined J. & W. Seligman &
Co. Incorporated in 1987 as an Associate, Investment
Research. Formerly, Vice President, Investment Officer, J. &
W. Seligman & Co. Incorporated from April 1993 to November
1997.
Lawrence P. Vogel Vice President Senior Vice President, Finance, J. & W. Seligman &
(42) Co. Incorporated, Seligman Advisors, Inc., and
Seligman Data Corp.; Vice President, the Seligman
Group of investment companies and Seligman Services,
Inc.; and Vice President and Treasurer, Seligman
International, Inc.; and Treasurer, Seligman
Henderson Co.
Frank J. Nasta Secretary General Counsel, Senior Vice President, Law and
(34) Regulation and Corporate Secretary, J. & W. Seligman
& Co. Incorporated; Secretary, the Seligman Group of
investment companies, Seligman Advisors, Inc.,
Seligman Henderson Co., Seligman Services, Inc.,
Seligman International, Inc. and Seligman Data Corp.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Name, Principal
(Age) and Position(s) Held Occupation(s) During
Address with Fund Past 5 Years
--------- ---------------- --------------------
<S> <C> <C>
Thomas G. Rose Treasurer Treasurer, the Seligman Group of investment companies
(41) and Seligman Data Corp.
</TABLE>
The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Funds for
which no market valuation is available, and to elect or appoint officers of the
Funds to serve until the next meeting of the Board.
Directors and officers of the Funds are also directors and officers of some or
all of the other investment companies in the Seligman Group.
Compensation
<TABLE>
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits From Funds and
Name and Compensation Accrued as Part of Fund Complex Paid
Position with Fund From Funds (1) Fund Expenses to Directors (1)(2)
------------------ -------------- ------------- -------------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Richard R. Schmaltz, Director N/A N/A N/A
John R. Galvin, Director $6,265.18 N/A $77,000
Alice S. Ilchman, Director 5,905.83 N/A 70,000
Frank A. McPherson, Director 6,158.78 N/A 75,000
John E. Merow, Director 6,109.93 N/A 74,000
Betsy S. Michel, Director 6,265.18 N/A 77,000
James C. Pitney, Director 6,007.88 N/A 72,000
James Q. Riordan, Director 6,007.88 N/A 72,000
Robert L. Shafer, Director 6,007.88 N/A 72,000
James N. Whitson, Director 6,265.18 (d) N/A 77,000 (d)
</TABLE>
- -----------------------------
(1) For the Fund's fiscal year ended October 31, 1998. Effective January 16,
1998, the per meeting fee for Directors was increased by $1,000, which is
allocated among all Funds in the Fund Complex.
(2) The Seligman Group of investment companies consists of eighteen investment
companies.
(d) Deferred.
Seligman Henderson Global Fund Series, Inc. has a compensation arrangement under
which outside directors may elect to defer receiving their fees. Seligman
Henderson Global Fund Series, Inc. has adopted a Deferred Compensation Plan
under which a director who has elected deferral of his or her fees may choose a
rate of return equal to either (1) the interest rate on short-term Treasury
bills, or (2) the rate of return on the shares of any of the investment
companies advised by J. & W. Seligman & Co. Incorporated, as designated by the
director. The cost of such fees and earnings is included in directors' fees and
expenses, and the accumulated balance thereof is included in other liabilities
in the Funds' financial statements. The total amount of deferred compensation
(including earnings) payable in respect of the Funds to Mr. Whitson as of
October 31, 1998 was $22,159.
Messrs. Merow and Pitney no longer defer current compensation; however, they
have accrued deferred compensation in the amounts of $12,364 and $1,501,
respectively, as of October 31, 1998.
The Funds may, but are not obligated to, purchase shares of the Seligman Group
of investment companies to hedge their obligations in connection with the
Deferred Compensation Plan.
15
<PAGE>
Sales Charges
Class A shares of each Fund may be issued without a sales charge to present and
retired directors, trustees, officers, employees (and their family members) of
the Funds, the other investment companies in the Seligman Group, and J. & W.
Seligman & Co. Incorporated and its affiliates. Family members are defined to
include lineal descendants and lineal ancestors, siblings (and their spouses and
children) and any company or organization controlled by any of the foregoing.
Such sales may also be made to employee benefit plans and thrift plans for such
persons and to any investment advisory, custodial, trust or other fiduciary
account managed or advised by J. & W. Seligman & Co. Incorporated or any
affiliate. The sales may be made for investment purposes only, and shares may be
resold only to a Fund.
Class A shares may be sold at net asset value to these persons since such sales
require less sales effort and lower sales related expenses as compared with
sales to the general public.
Control Persons and Principal Holders of Securities
Control Persons
As of May 14, 1999, there was no person or persons who controlled any of the
Funds, either through a significant ownership of shares or any other means of
control.
Principal Holders
As of May 14, 1999, MLPF&S for the Sole Benefit of Its Customers, Attn Fund
Administration, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL 32246,
owned of record more than 5% of the outstanding shares of a class of the
following Funds:
Percentage of Total
Outstanding Shares of
Fund Class the Class of the Fund
---- ----- ---------------------
International Fund A 12.83%
B 33.41%
D 32.42%
Emerging Markets Growth Fund A 11%
B 33.75%
D 30.99%
Global Growth Opportunities Fund A 34.88%
B 38.98%
D 45.07%
Global Smaller Companies Fund A 19.55%
B 32.03%
D 44.64%
Global Technology Fund A 18%
B 32.57%
D 28.37%
Management Ownership
As of May 14, 1999, Directors and officers of the Funds as a group owned 3.22%
of the Class A shares of the International Fund; 1.73% of the Class A
shares of the Emerging Markets Growth Fund; 1.25% of the Class A shares of the
Global Growth Opportunities Fund; and less than 1% of the Class A shares of
16
<PAGE>
each of the Global Smaller Companies Fund and the Global Technology Fund. As of
the same date, no Directors or officers of the Funds owned any Class B or Class
D capital stock of any Fund.
Investment Advisory and Other Services
Investment Manager
J. & W. Seligman & Co. Incorporated (Seligman) manages the Funds. Seligman is a
successor firm to an investment banking business founded in 1864 which has
thereafter provided investment services to individuals, families, institutions,
and corporations. On December 29, 1988, a majority of the outstanding voting
securities of Seligman was purchased by Mr. William C. Morris and a simultaneous
recapitalization of Seligman occurred. See Appendix B for further history of
Seligman.
All of the officers of the Funds listed above are officers or employees of
Seligman. Their affiliations with the Funds and with Seligman are provided under
their principal business occupations.
Each Fund pays Seligman a management fee for its services, calculated daily and
payable monthly. The management fee is equal to 1.00% per annum of the Fund's
average daily net assets for each of the International Fund, the Global Growth
Opportunities Fund, the Global Smaller Companies Fund and the Global Technology
Fund. The management fee is equal to 1.25% per annum of the Fund's average daily
net assets for the Emerging Markets Growth Fund. The following chart indicates
the management fees paid by each Fund as well as the percentage such fees
represents of each Fund's average daily net assets for the fiscal years ended
October 31, 1998, 1997, and 1996.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal % of
Year/Period Management Average Daily
Fund Ended Fee Paid ($) Net Assets (%)
---- ----------- ------------ --------------
International Fund 10/31/98 1.00%
$954,634
10/31/97 993,229 1.00
10/31/96 963,308 1.00
Emerging Markets Growth Fund 10/31/98 $1,034,015 1.25%
10/31/97 1,110,307 1.25
10/31/96* 66,785** .45**
Global Growth Opportunities Fund 10/31/98 $1,982,193 1.00%
10/31/97 1,903,374 1.00
10/31/96 1,318,826 1.00
Global Smaller Companies Fund 10/31/98 $9,995,944 1.00%
10/31/97 9,494,033 1.00
10/31/96 4,279,964 1.00
Global Technology Fund 10/31/98 $8,247,297 1.00%
10/31/97 8,488,410 1.00
10/31/96 7,054,213 1.00
</TABLE>
* For the period 5/28/96 (commencement of operations) to 10/31/96.
** During the period, Seligman and/or Seligman Henderson Co., the prior
subadviser, at their discretion, elected to waive a portion of their
fees.
Under a Subadvisory Agreement dated July 1, 1998, Henderson Investment
Management Limited (HIML) furnishes investment advice, research and assistance
with respect to each Fund's non-US investments.
HIML, headquartered in the United Kingdom, was incorporated in 1984 and is a
registered investment adviser under the Investment Advisers Act of 1940. HIML is
a wholly owned subsidiary of Henderson plc. Henderson plc is a subsidiary of AMP
Limited, an Australian life insurance and financial services
17
<PAGE>
company. Henderson plc, headquartered in London, is one of the largest money
managers in Europe. See Appendix C for further history of Henderson plc.
HIML receives a fee from Seligman, in respect of each Fund, based on the
"applicable percentage" of the average monthly assets of such Fund under its
supervision. The "applicable percentage" is an annual rate of 0.90% for the
period July 1, 1998 to June 30, 1999; 0.70% for the period July 1, 1999 to June
30, 2000; and 0.50% thereafter. The Subadvisory Agreement provides that it will
continue until December 31, 1999; and, thereafter, is subject to the annual
approval of the Funds' Board of Directors.
Each Fund pays all of its expenses, other than those assumed by Seligman or
HIML, including brokerage commissions, administration, shareholder services and
distribution fees, fees and expenses of independent attorneys and auditors,
taxes and governmental fees, including fees and expenses of qualifying the Funds
and their shares under federal and state securities laws, cost of stock
certificates and expenses of repurchase or redemption of shares, expenses of
printing and distributing reports, notices and proxy materials to shareholders,
expenses of printing and filing reports and other documents with governmental
agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder record keeping and shareholder
account services, fees and disbursements of transfer agents and custodians,
expenses of disbursing dividends and distributions, fees and expenses of
directors of the Funds not employed by or serving as a director of Seligman or
its affiliates, insurance premiums and extraordinary expenses such as litigation
expenses. These expenses are allocated between each Fund and between the classes
of each Fund in a manner determined by the Board of Directors to be fair and
equitable.
The Management Agreement provides that Seligman will not be liable to the Funds
for any error of judgment or mistake of law, or for any loss arising out of any
investment, or for any act or omission in performing its duties under the
Agreement, except for willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties under the Agreements.
The Management Agreement was initially approved by the Board of Directors at a
meeting held on March 19, 1992 and by the shareholders on May 20, 1993. The
Management Agreement will continue in effect until December 31 of each year if
(1) such continuance is approved in the manner required by the 1940 Act (i.e.,
by a vote of a majority of the Board of Directors or of the outstanding voting
securities of each Fund and by a vote of a majority of the Directors who are not
parties to the Management Agreement or interested persons of any such party) and
(2) Seligman has not notified the Funds at least 60 days prior to December 31 of
any year that it does not desire such continuance. The Management Agreement may
be terminated by a Fund, without penalty, on 60 days' written notice to Seligman
and will terminate automatically in the event of its assignment. Seligman
Henderson Global Fund Series, Inc. has agreed to change its name upon
termination of the Management Agreement if continued use of the name would cause
confusion in the context of Seligman's business.
Officers, directors and employees of Seligman are permitted to engage in
personal securities transactions, subject to Seligman's Code of Ethics. The Code
of Ethics proscribes certain practices with regard to personal securities
transactions and personal dealings, provides a framework for the reporting and
monitoring of personal securities transactions by Seligman's Compliance Officer,
and sets forth a procedure of identifying, for disciplinary action, those
individuals who violate the Code of Ethics. The Code of Ethics prohibits each of
the officers, directors and employees (including all portfolio managers) of
Seligman from purchasing or selling any security that the officer, director, or
employee knows or believes (1) was recommended by Seligman for purchase or sale
by any client, including the Fund, within the preceding two weeks, (2) has been
reviewed by Seligman for possible purchase or sale within the preceding two
weeks, (3) is being purchased or sold by any client, (4) is being considered by
a research analyst, (5) is being acquired in a private placement, unless prior
approval has been obtained from Seligman's Compliance Officer, or (6) is being
acquired during an initial or secondary public offering. The Code of Ethics also
imposes a strict standard of confidentiality and requires portfolio managers to
disclose any interest they may have in the securities or issuers that they
recommend for purchase by any client.
18
<PAGE>
The Code of Ethics also prohibits (1) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) for which the portfolio manager or investment team
manages; and (2) each employee from engaging in short-term trading (a purchase
and sale or vice-versa within 60 days). Any profit realized pursuant to either
of these prohibitions must be disgorged.
Officers, directors, and employees are required, except under very limited
circumstances, to engage in personal securities transactions through Seligman's
order desk. The order desk maintains a list of securities that may not be
purchased due to a possible conflict with clients. All officers, directors and
employees are also required to disclose all securities beneficially owned by
them on December 31 of each year.
Principal Underwriter
Seligman Advisors, Inc. (Seligman Advisors), an affiliate of Seligman, 100 Park
Avenue, New York, New York 10017, acts as general distributor of the shares of
each Fund and of the other mutual funds in the Seligman Group. Seligman Advisors
is an "affiliated person" (as defined in the 1940 Act) of Seligman, which is
itself an affiliated person of the Funds. Those individuals identified above
under "Management Information" as directors or officers of both the Funds and
Seligman Advisors are affiliated persons of both entities.
Services Provided by the Investment Manager
Under the Management Agreement, dated March 19, 1992, subject to the control of
the Board of Directors, Seligman manages the investment of the assets of each
Fund, including making purchases and sales of portfolio securities consistent
with each Fund's investment objectives and policies, and administers its
business and other affairs. Seligman provides the Fund with such office space,
administrative and other services and executive and other personnel as are
necessary for Fund operations. Seligman pays all of the compensation of
directors of the Fund who are employees or consultants of Seligman and of the
officers and employees of the Fund. Seligman also provides senior management for
Seligman Data Corp., the Fund's shareholder service agent.
Service Agreements
There are no other management-related service contracts under which services are
provided to the Funds.
Other Investment Advice
No person or persons, other than directors, officers, or employees of Seligman
or HIML, regularly advise the Funds with respect to their investments.
Dealer Reallowances
Dealers and financial advisors receive a percentage of the initial sales charge
on sales of Class A shares and Class C shares of the Funds, as set forth below:
19
<PAGE>
Class A shares:
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Reallowance
As a % of as a % of Net As a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
- ------------------ ----------------- --------------- --------------
<S> <C> <C> <C>
Less than $ 50,000 4.75% 4.99% 4.25%
$50,000 - $ 99,999 4.00 4.17 3.50
$100,000 - $249,999 3.50 3.63 3.00
$250,000 - $499,999 2.50 2.56 2.25
$500,000 - $999,999 2.00 2.04 1.75
$1,000,000 and over(2) 0 0 0
</TABLE>
(1) "Offering Price" is the amount that you actually pay for Fund shares; it
includes the initial sales charge.
(2) You will not pay a sales charge on purchases of $1 million or more, but you
will be subject to a 1% CDSC if you sell your shares within eighteen
months.
Class C shares:
<TABLE>
<CAPTION>
Regular Dealer
Sales Charge Sales Charge Reallowance
as a % of as a % of Net As a % of
Amount of Purchase Offering Price(1) Amount Invested Offering Price
- ------------------ ----------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000 1.00% 1.01% 1.00%
$100,000 - $249,999 0.50 0.50 0.50
$250,000 - $1,000,000(2) 0 0 0
</TABLE>
(1) "Offering Price" is the amount that you actually pay for Fund shares; it
includes the initial sales charge.
(2) Your purchase of Class C shares must be for less than $1,000,000 because if
you invest $1,000,000 or more, you will pay less in fees and charges if you
buy Class A shares.
Seligman Services, Inc. (Seligman Services), an affiliate of Seligman, is a
limited purpose broker/dealer. Seligman Services is eligible to receive
commissions from certain sales of Fund shares. For fiscal years ended October
31, 1998, 1997, and 1996, Seligman Services received commissions in the
following amounts:
Fund 1998 1997 1996
- ---- ---- ---- ----
International Fund $ 8,971 $ 1,009 $ 3,204
Emerging Markets Growth Fund 647 7,957 2,722*
Global Growth Opportunities Fund 10,047 1,921 9,362
Global Smaller Companies Fund 45,438 35,359 137,567
Global Technology Fund 90,491 38,720 190,014
* For the period 5/28/96 (commencement of operations) to 10/31/96.
Rule 12b-1 Plans
Each Fund has adopted an Administration, Shareholder Services and Distribution
Plan (12b-1 Plan) in accordance with Section 12(b) of the 1940 Act and Rule
12b-1 thereunder.
Under its 12b-1 Plan, each Fund may pay to Seligman Advisors an administration,
shareholder services and distribution fee in respect of the Fund's Class A,
Class B, Class C, and Class D shares. Payments under the 12b-1 Plan may include,
but are not limited to: (1) compensation to securities dealers and other
organizations (Service Organizations) for providing distribution assistance with
respect to assets invested in the Fund; (2) compensation to Service
Organizations for providing administration, accounting and other shareholder
services with respect to Fund shareholders; and (3) otherwise promoting the sale
of shares of the Fund, including paying for the preparation of advertising and
sales literature and the printing and distribution of such promotional materials
and prospectuses to prospective investors and defraying
20
<PAGE>
Seligman Advisors' costs incurred in connection with its marketing efforts with
respect to shares of the Fund. Seligman, in its sole discretion, may also make
similar payments to Seligman Advisors from its own resources, which may include
the management fee that Seligman receives from each Fund. Payments made by each
Fund under its Rule 12b-1 Plan are intended to be used to encourage sales of
such Fund, as well as to discourage redemptions.
Fees paid by each Fund under its 12b-1 Plan with respect to any class of shares
may not be used to pay expenses incurred solely in respect of any other class or
any other Seligman fund. Expenses attributable to more than one class of a Fund
are allocated between the classes in accordance with a methodology approved by
the Funds' Board of Directors. Each Fund may participate in joint distribution
activities with other Seligman funds, and the expenses of such activities will
be allocated among the applicable funds based on relative sales, in accordance
with a methodology approved by the Board.
Class A
Under its 12b-1 Plan, each Fund, with respect to Class A shares, pays quarterly
to Seligman Advisors a service fee at an annual rate of up to .25% of the
average daily net asset value of the Class A shares. These fees are used by
Seligman Advisors exclusively to make payments to Service Organizations which
have entered into agreements with Seligman Advisors. Such Service Organizations
receive from Seligman Advisors a continuing service fee of up to .25% on an
annual basis, payable quarterly, of the average daily net assets of Class A
shares attributable to the particular Service Organization for providing
personal service and/or maintenance of shareholder accounts. The fee payable to
Service Organizations from time to time shall, within such limits, be determined
by the Directors. The Funds are not obligated to pay Seligman Advisors for any
such costs it incurs in excess of the fee described above. No expenses incurred
in one fiscal year by Seligman Advisors with respect to Class A shares of a Fund
may be paid from Class A 12b-1 fees received from that Fund in any other fiscal
year. If a Fund's 12b-1 Plan is terminated in respect of Class A shares, no
amounts (other than amounts accrued but not yet paid) would be owed by that Fund
to Seligman Advisors with respect to Class A shares. The total amount paid by
each Fund to Seligman Advisors in respect of Class A shares for the fiscal year
ended October 31, 1998 was as follows:
Total % of Average
Fund Fees Paid Net Assets
---- --------- ------------
International Fund $ 97,702 .21%
Emerging Markets Growth Fund 80,916 .23
Global Growth Opportunities Fund 261,123 .24
Global Smaller Companies Fund 982,147 .24
Global Technology Fund 1,334,768 .24
Class B
Under its 12b-1 Plan, each Fund, with respect to Class B shares, pays monthly a
12b-1 fee at an annual rate of up to 1% of the average daily net asset value of
the Class B shares. The fee is comprised of (1) a distribution fee equal to .75%
per annum, which is paid directly to a third party, FEP Capital, L.P., to
compensate it for having funded, at the time of sale of Class B shares (i) a 4%
sales commission to Service Organizations and (ii) a payment of up to .25% of
sales to Seligman Advisors to help defray its costs of distributing Class B
shares; and (2) a service fee of up to .25% per annum which is paid to Seligman
Advisors. The service fee is used by Seligman Advisors exclusively to make
payments to Service Organizations which have entered into agreements with
Seligman Advisors. Such Service Organizations receive from Seligman Advisors a
continuing service fee of up to .25% on an annual basis, payable quarterly, of
the average daily net assets of Class B shares attributable to the particular
Service Organization for providing personal service and/or maintenance of
shareholder accounts. The amounts expended by Seligman Advisors or FEP Capital,
L.P. in any one year upon the initial purchase of Class B shares of a Fund may
exceed the 12b-1 fees paid by that Fund in that year. Each Fund's 12b-1 Plan
permits expenses incurred in respect of Class B shares in one fiscal year to be
paid from Class B 12b-1 fees received from the Fund in any other fiscal year;
however, in any fiscal year the Funds are not obligated to pay any 12b-1 fees in
excess of the fees described above. Seligman Advisors and FEP Capital, L.P. are
not reimbursed for expenses which exceed such fees. If a Fund's 12b-1 Plan is
terminated
21
<PAGE>
in respect of Class B shares, no amounts (other than amounts accrued but not yet
paid) would be owed by that Fund to Seligman Advisors or FEP Capital, L.P. with
respect to Class B shares. The total amount paid by each Fund in respect of
Class B shares for the fiscal year ended October 31, 1998, was equal to 1% per
annum of the average daily net assets of Class B shares, as follows:
Fund Total Fees Paid
---- ---------------
International Fund $ 84,989
Emerging Markets Growth Fund 242,231
Global Growth Opportunities Fund 214,020
Global Smaller Companies Fund 2,534,097
Global Technology Fund 599,016
Class C
Under the 12b-1 Plan, each Fund, with respect to Class C shares, pays monthly to
Seligman Advisors a 12b-1 fee at an annual rate of up to 1% of the average daily
net asset value of the Class C shares. The fee is used by Seligman Advisors as
follows: During the first year following the sale of Class C shares, a
distribution fee of .75% of the average daily net assets attributable to Class C
shares is used, along with any CDSC proceeds during the first eighteen months,
to (1) reimburse Seligman Advisors for its payment at the time of sale of Class
C shares of a 1.25% sales commission to Service Organizations, and (2) pay for
other distribution expenses, including paying for the preparation of advertising
and sales literature and the printing and distribution of such promotional
materials and prospectuses to prospective investors and other marketing costs of
Seligman Advisors. In addition, during the first year following the sale of
Class C shares, a service fee of up to .25% of the average daily net assets
attributable to such Class C shares is used to reimburse Seligman Advisors for
its prepayment to Service Organizations at the time of sale of Class C shares of
a service fee of .25% of the net asset value of the Class C shares sold (for
shareholder services to be provided to Class C shareholders over the course of
the one year immediately following the sale). The payment of service fees to
Seligman Advisors is limited to amounts Seligman Advisors actually paid to
Service Organizations at the time of sale as service fees. After the initial
one-year period following a sale of Class C shares, the entire 12b-1 fee
attributable to such Class C shares is paid to Service Organizations for
providing continuing shareholder services and distribution assistance in respect
of the Funds. The Funds do not pay any 12b-1 fees in respect of Class C shares
for the fiscal year ended September 30, 1998 because no Class C shares were
issued or outstanding during such period.
Class D
Under its 12b-1 Plan, each Fund, with respect to Class D shares, pays monthly to
Seligman Advisors a 12b-1 fee at an annual rate of up to 1% of the average daily
net asset value of Class D shares. This fee is used by Seligman Advisors, as
follows: During the first year following the sale of Class D shares, a
distribution fee of .75% of the average daily net assets attributable to such
Class D shares is used, along with any CDSC proceeds, to (1) reimburse Seligman
Advisors for its payment at the time of sale of Class D shares of a .75% sales
commission to Service Organizations, and (2) pay for other distribution
expenses, including paying for the preparation of advertising and sales
literature and the printing and distribution of such promotional materials and
prospectuses to prospective investors and other marketing costs of Seligman
Advisors. In addition, during the first year following the sale of Class D
shares, a service fee of up to .25% of the average daily net assets attributable
to such Class D shares is used to reimburse Seligman Advisors for its prepayment
to Service Organizations at the time of sale of Class D shares of a service fee
of .25% of the net asset value of the Class D shares sold (for shareholder
services to be provided to Class D shareholders over the course of the one year
immediately following the sale). The payment of service fees to Seligman
Advisors is limited to amounts Seligman Advisors actually paid to Service
Organizations at the time of sale as service fees. After the initial one-year
period following a sale of Class D shares, the entire 12b-1 fee attributable to
such Class D shares is paid to Service Organizations for providing continuing
shareholder services and distribution assistance in respect of each Fund. The
total amount paid by each Fund in respect of Class D shares for the fiscal year
ended October 31, 1998 was equal to 1% per annum of the average daily net assets
of Class D shares, as follows:
22
<PAGE>
Fund Total Fees Paid
---- ---------------
International Fund $ 408,081
Emerging Markets Growth Fund 230,636
Global Growth Opportunities Fund 675,874
Global Smaller Companies Fund 3,401,501
Global Technology Fund 2,183,150
The amounts expended by Seligman Advisors in any one year with respect to Class
D shares of a Fund may exceed 12b-1 fees paid by the Fund in that year. Each
Fund's 12b-1 Plan permits expenses incurred by Seligman Advisors in respect of
Class D shares in one fiscal year to be paid from Class D 12b-1 fees received
from the Fund in any other fiscal year; however, in any fiscal year the Funds
are not obligated to pay any 12b-1 fees in excess of the fees described above.
As of September 30, 1998 (the most recent calendar quarter for which such
information was reported), Seligman Advisors has incurred the following amounts
of unreimbursed expenses in respect of each Fund's Class D shares:
<TABLE>
<CAPTION>
Amount of Unreimbursed
Expenses Incurred with % of the Net Assets of
Respect to Class D Class D at
Fund Shares October 31, 1998
---- ------ ----------------
<S> <C> <C>
International Fund $ 41,767 .11%
Emerging Markets Growth Fund 16,429 .12
Global Growth Opportunities Fund -- --
Global Smaller Companies Fund 714,746 .26
Global Technology Fund 21,862 .01
</TABLE>
If a Fund's 12b-1 Plan is terminated in respect of Class D shares, no amounts
(other than amounts accrued but not yet paid) would be owed by that Fund to
Seligman Advisors with respect to Class D shares.
Payments made by each Fund under its 12b-1 Plan for the fiscal year ended
October 31, 1998, were spent on the following activities in the following
amounts (no Class C shares were outstanding during such fiscal year):
<TABLE>
<CAPTION>
Fund/Class Compensation Compensation
to to Other
Underwriters Broker/Dealers Compensation*
------------ -------------- -------------
<S> <C> <C> <C>
International Fund/Class A -- $ 97,702 --
International Fund/Class B $ 16,882 4,649 $ 63,458
International Fund/Class D 60,430 347,651 --
Emerging Markets Growth Fund/Class A -- $ 80,916 --
Emerging Markets Growth Fund/Class B $ 46,877 15,014 $ 180,340
Emerging Markets Growth Fund/Class D 77,013 153,623 --
Global Growth Opportunities Fund/Class A -- $ 261,123 --
Global Growth Opportunities Fund/Class B $ 42,110 12,271 $ 159,639
Global Growth Opportunities Fund/Class D 84,005 591,869 --
Global Smaller Companies Fund/Class A -- $ 982,147 --
Global Smaller Companies Fund/Class B $498,374 145,280 $1,890,443
Global Smaller Companies Fund/Class D 709,878 2,691,623 --
</TABLE>
* Payment is made to FEP Capital, L. P. to compensate it for having funded at
the time of sale, payments to broker/dealers and underwriters.
23
<PAGE>
<TABLE>
<CAPTION>
Compensation Compensation
to to Other
Fund/Class Underwriters Broker/Dealers Compensation*
- ---------- ------------ -------------- -------------
<S> <C> <C> <C>
Global Technology Fund/Class A -- $1,334,768 --
Global Technology Fund/Class B $ 119,146 32,898 $ 446,972
Global Technology Fund/Class D 147,575 2,035,575 --
</TABLE>
* Payment is made to FEP Capital, L. P. to compensate it for having funded at
the time of sale, payments to broker/dealers and underwriters.
The 12b-1 Plan with respect to the International Fund was originally approved on
July 15, 1993 by the Board of Directors, including a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of the Fund (Qualified
Directors) and by the shareholders of such Fund on September 21, 1993. The 12b-1
Plan with respect to the Emerging Markets Growth Fund was originally approved on
March 21, 1996 by the Board of Directors, including a majority of the Qualified
Directors, and by the sole shareholder of each Class of shares of the Fund on
May 10, 1996. The 12b-1 Plan with respect to the Global Growth Opportunities
Fund was originally approved on September 21, 1995 by the Board of Directors,
including a majority of the Qualified Directors, and by the sole shareholder of
such Fund on October 30, 1995. The 12b-1 Plan with respect to the Global Smaller
Companies Fund was originally approved on July 16, 1992 by the Board of
Directors, including a majority of the Qualified Directors. Amendments to the
12b-1 Plan in respect of Class D shares of the Global Smaller Companies Fund
were approved by the Board of Directors of the Fund, including a majority of the
Qualified Directors, on March 18, 1993 and the amended 12b-1 Plan was approved
by the shareholders of the Global Smaller Companies Fund on May 20, 1993. The
12b-1 Plan with respect to the Global Technology Fund was originally approved on
March 17, 1994 by the Board of Directors, including a majority of the Qualified
Directors, and by the sole shareholder of such Fund on that date. The 12b-1
Plans were approved in respect of the Class B shares of each Fund other than the
Emerging Markets Growth Fund on March 21, 1996 by the Board of Directors,
including a majority of the Qualified Directors, and by the sole shareholder of
each such Fund's Class B shares on that date, and became effective in respect of
such Class B shares on April 22, 1996. In addition, the 12b-1 Plans were
approved with respect of Class C shares of each Fund on May 20, 1999 by the
Directors, including a majority of the Qualified Directors, and became effective
in respect of each Fund's Class C shares on June 1, 1999.
The 12b-1 Plans will continue in effect through December 31 of each year so long
as such continuance is approved annually by a majority vote of both the
Directors and the Qualified Directors, cast in person at a meeting called for
the purpose of voting on such approval. No material amendment to the 12b-1 Plans
may be made except by a majority of both the Directors and Qualified Directors.
The 12b-1 Plans may not be amended to increase materially the amounts payable to
Service Organizations with respect to a Class without the approval of a majority
of the outstanding voting securities of such Class. If the amount payable in
respect of Class A shares under a Fund's 12b-1 Plan is proposed to be increased
materially, the Fund will either (i) permit holders of Class B shares to vote as
a separate class on the proposed increase or (ii) establish a new class of
shares subject to the same payment under the 12b-1 Plan as existing Class A
shares, in which case Class B shares will thereafter convert into the new class
instead of into Class A shares.
The 12b-1 Plans require that the Treasurer of the Funds shall provide to the
Directors and the Directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the 12b-1 Plans. Rule
12b-1 also requires that the selection and nomination of Directors who are not
"interested persons" of the Funds be made by such disinterested Directors. The
12b-1 Plans are reviewed by the Directors annually.
Seligman Services acts as a broker/dealer of record for shareholder accounts
that do not have a designated financial advisor. As such, it receives
compensation from each Fund pursuant to its 12b-1 Plan for providing personal
services and account maintenance to such accounts and other distribution
services. For
24
<PAGE>
the fiscal years ended October 31, 1998, 1997, and 1996, Seligman Services
received distribution and service fees from each Fund pursuant to its 12b-1 Plan
as follows:
Fund 1998 1997 1996
---- ---- ---- ----
International Fund $ 20,727 $ 18,533 $ 15,809
Emerging Markets Growth Fund 6,219 5,900 568*
Global Growth Opportunities Fund 2,295 6,876 3,281
Global Smaller Companies Fund 11,939 45,222 25,474
Global Technology Fund 26,484 86,328 36,015
* For the period 5/28/96 (commencement of operations) to 10/31/96.
Brokerage Allocation and Other Practices
Brokerage Transactions
Seligman and HIML will seek the most favorable price and execution in the
purchase and sale of portfolio securities of each Fund. When two or more of the
investment companies in the Seligman Group or other investment advisory clients
of Seligman or HIML desire to buy or sell the same security at the same time,
the securities purchased or sold are allocated by Seligman or HIML in a manner
believed to be equitable to each. There may be possible advantages or
disadvantages of such transactions with respect to price or the size of
positions readily obtainable or saleable.
In over-the-counter markets, the Funds deal with responsible primary market
makers unless a more favorable execution or price is believed to be obtainable.
Each Fund may buy securities from or sell securities to dealers acting as
principal, except dealers with which its directors and/or officers are
affiliated.
For the fiscal years ended October 31, 1998, 1997, and 1996, the Funds paid
total brokerage commissions to others for execution, research and statistical
services in the following amounts:
<TABLE>
<CAPTION>
Total Brokerage Commissions Paid
Fund 1998 1997 1996
- ---- ---- ---- ----
<S> <C> <C> <C>
International Fund $ 344,771 $ 409,545 $ 337,391
Emerging Markets Growth Fund 392,683 419,950 151,798*
Global Growth Opportunities Fund 378,349 585,985 635,930
Global Smaller Companies Fund 1,801,953 1,910,979 1,558,525
Global Technology Fund 1,234,913 936,431 1,072,773
</TABLE>
* For the period 5/28/96 (commencement of operations) to 10/31/96.
Commissions
For the fiscal years ended October 31, 1998, 1997, and 1996, the Funds did not
execute any portfolio transactions with, and therefore did not pay any
commissions to, any broker affiliated with the Funds, Seligman, HIML, or
Seligman Advisors.
Brokerage Selection
Consistent with seeking the most favorable price and execution when buying or
selling portfolio securities, Seligman may give consideration to the research,
statistical, and other services furnished by brokers or dealers to Seligman for
its use, as well as the general attitude toward and support of investment
companies demonstrated by such brokers or dealers. Such services include
supplemental investment research, analysis, and reports concerning issuers,
industries, and securities deemed by Seligman to be beneficial to the Funds. In
addition, Seligman is authorized to place orders with brokers who provide
supplemental investment and market research and security and economic analysis
although the use of such brokers may result in a higher brokerage charge to a
Fund than the use of brokers selected solely on the basis of seeking
25
<PAGE>
the most favorable price and execution and although such research and analysis
may be useful to Seligman in connection with its services to clients other than
the Funds.
Directed Brokerage
During the Funds' fiscal year ended October 31, 1998, neither the Funds,
Seligman, nor HIML directed any of the Funds' brokerage transactions to a broker
because of research services provided.
Regular Broker-Dealers
During the Funds' fiscal year ended October 31, 1998, the Funds did not acquire
securities of any of its regular brokers or dealers (as defined in Rule 10b-1
under the 1940 Act) or of their parents.
Capital Stock and Other Securities
Capital Stock
Seligman Henderson Global Fund Series, Inc. is authorized to issue 2,000,000,000
shares of common stock, each with a par value of $.001 each, divided into five
different series (which represent each of the Funds). Each Fund has four
classes, designated Class A common stock, Class B common stock, Class C common
stock, and Class D common stock. Each share of a Fund's Class A, Class B, Class
C, and Class D common stock is equal as to earnings, assets, and voting
privileges, except that each class bears its own separate distribution and,
potentially, certain other class expenses and has exclusive voting rights with
respect to any matter to which a separate vote of any class is required by the
1940 Act or Maryland law. Seligman Henderson Global Fund Series, Inc. has
adopted a multiclass plan pursuant to Rule 18f-3 under the 1940 Act permitting
the issuance and sale of multiple classes of common stock. In accordance with
the Articles of Incorporation, the Board of Directors may authorize the creation
of additional classes of common stock with such characteristics as are permitted
by the multiclass plan and Rule 18f-3. The 1940 Act requires that where more
than one class exists, each class must be preferred over all other classes in
respect of assets specifically allocated to such class. All shares have
noncumulative voting rights for the election of directors. Each outstanding
share is fully paid and non-assessable, and each is freely transferable. There
are no liquidation, conversion, or preemptive rights.
Other Securities
Seligman Henderson Global Fund Series, Inc. has no authorized securities other
than common stock.
Purchase, Redemption, and Pricing of Shares
Purchase of Shares
Class A
Class A shares may be purchased at a price equal to the next determined net
asset value per share, plus an initial sales charge.
Purchases of Class A shares by a "single person" (as defined belowunder "Persons
Entitled to Reductions") may be eligible for the following reductions in initial
sales charges:
Volume Discounts are provided if the total amount being invested in Class A
shares of a Fund alone, or in any combination of shares of the other mutual
funds in the Seligman Group which are sold with an initial sales charge, reaches
levels indicated in the sales charge schedule set forth in the Prospectus.
The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of a Fund and shares of the other Seligman mutual
funds sold with an initial sales charge with the total net asset value of shares
of those mutual funds already owned that were sold with an initial sales charge
and the total net asset value of shares of Seligman Cash Management Fund which
were acquired through an
26
<PAGE>
exchange of shares of another Seligman mutual fund on which there was an initial
sales charge at the time of purchase to determine reduced sales charges in
accordance with the schedule in the prospectus. The value of the shares owned,
including the value of shares of Seligman Cash Management Fund acquired in an
exchange of shares of another Seligman mutual fund on which there was an initial
sales charge at the time of purchase will be taken into account in orders placed
through a dealer, however, only if Seligman Advisors is notified by an investor
or a dealer of the amount owned by the investor at the time the purchase is made
and is furnished sufficient information to permit confirmation.
A Letter of Intent allows an investor to purchase Class A shares over a 13-month
period at reduced initial sales charges in accordance with the schedule in the
Prospectus, based on the total amount of Class A shares of the Fund that the
letter states the investor intends to purchase plus the total net asset value of
shares that were sold with an initial sales charge of the other Seligman mutual
funds already owned and the total net asset value of shares of Seligman Cash
Management Fund which were acquired through an exchange of shares of another
Seligman mutual fund on which there was an initial sales charge at the time of
purchase. Reduced sales charges also may apply to purchases made within a
13-month period starting up to 90 days before the date of execution of a letter
of intent.
Persons Entitled To Reductions. Reductions in initial sales charges apply to
purchases of Class A shares by a "single person," including an individual;
members of a family unit comprising husband, wife and minor children; or a
trustee or other fiduciary purchasing for a single fiduciary account. Employee
benefit plans qualified under Section 401 of the Internal Revenue Code of 1986,
as amended, organizations tax exempt under Section 501(c)(3) or (13) of the
Internal Revenue Code, and non-qualified employee benefit plans that satisfy
uniform criteria are considered "single persons" for this purpose. The uniform
criteria are as follows:
1. Employees must authorize the employer, if requested by a Fund, to
receive in bulk and to distribute to each participant on a timely basis the Fund
prospectus, reports, and other shareholder communications.
2. Employees participating in a plan will be expected to make regular
periodic investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12 months
and 30 days after the last regular investment in his account. In such event, the
dropped participant would lose the discount on share purchases to which the plan
might then be entitled.
3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.
Eligible Employee Benefit Plans. The table of sales charges in the Prospectus
applies to sales to "eligible employee benefit plans," except that the Fund may
sell shares at net asset value to "eligible employee benefit plans" which have
at least (1) $500,000 invested in the Seligman Group of mutual funds or (2) 50
eligible employees to whom such plan is made available. Such sales must be made
in connection with a payroll deduction system of plan funding or other systems
acceptable to Seligman Data Corp., the Funds' shareholder service agent.
"Eligible employee benefit plan" means any plan or arrangement, whether or not
tax qualified, which provides for the purchase of Fund shares. Sales of shares
to such plans must be made in connection with a payroll deduction system of plan
funding or other system acceptable to Seligman Data Corp. Section 403(b) Plans
sponsored by public educational institutions are not eligible for net asset
value purchases based on the aggregate investment made by the plan or member of
eligible employees.
Such sales are believed to require limited sales effort and sales-related
expenses and therefore are made at net asset value. Contributions or account
information for plan participation also should be transmitted to Seligman Data
Corp. by methods which it accepts. Additional information about "eligible
employee benefit plans" is available from financial advisors or Seligman
Advisors.
27
<PAGE>
Further Types of Reductions. Class A shares may also be issued without an
initial sales charge in the following instances:
(1) to any registered unit investment trust which is the issuer of periodic
payment plan certificates, the net proceeds of which are invested in Fund
shares;
(2) to separate accounts established and maintained by an insurance company
which are exempt from registration under Section 3(c)(11) of the 1940 Act;
(3) to registered representatives and employees (and their spouses and minor
children) of any dealer that has a sales agreement with Seligman Advisors;
(4) to financial institution trust departments;
(5) to registered investment advisers exercising discretionary investment
authority with respect to the purchase of Fund shares;
(6) to accounts of financial institutions or broker/dealers that charge account
management fees, provided Seligman or one of its affiliates has entered
into an agreement with respect to such accounts;
(7) pursuant to sponsored arrangements with organizations which make
recommendations to, or permit group solicitations of, its employees,
members or participants in connection with the purchase of shares of the
Fund;
(8) to other investment companies in the Seligman Group in connection with a
deferred fee arrangement for outside directors;
(9) to certain "eligible employee benefit plans" as discussed above;
(10) to those partners and employees of outside counsel to the Fund or its
directors or trustees who regularly provide advice and services to the
Fund, to other funds managed by Seligman, or to their directors or
trustees; and
(11) in connection with sales pursuant to a 401(k) alliance program which has an
agreement with Seligman Advisors.
CDSC Applicable to Class A Shares. Class A shares purchased without an initial
sales charge in accordance with the sales charge schedule in the Funds'
Prospectus, or pursuant to a Volume Discount, Right of Accumulation, or Letter
of Intent are subject to a CDSC of 1% on redemptions of such shares within
eighteen months of purchase. Employee benefit plans eligible for net asset value
sales (as described below) may be subject to a CDSC of 1% for terminations at
the plan level only, on redemptions of shares purchased within eighteen months
prior to plan termination. The 1% CDSC will be waived on shares that were
purchased through Morgan Stanley Dean Witter & Co. by certain Chilean
institutional investors (i.e. pension plans, insurance companies, and mutual
funds). Upon redemption of such shares within an eighteen month period, Morgan
Stanley Dean Witter will reimburse Seligman Advisors a pro rata portion of the
fee it received from Seligman Advisors at the time of sale of such shares.
See "CDSC Waivers" below for other waivers which may be applicable to Class A
shares.
Class B
Class B shares may be purchased at a price equal to the next determined net
asset value, without an initial sales charge. However, Class B shares are
subject to a CDSC if the shares are redeemed within six years of purchase at
rates set forth in the table below, charged as a percentage of the current net
asset value or the original purchase price, whichever is less.
28
<PAGE>
Years Since Purchase CDSC
Less than 1 year .......................................... 5%
1 year or more but less than 2 years ...................... 4%
2 years or more but less than 3 years ..................... 3%
3 years or more but less than 4 years ..................... 3%
4 years or more but less than 5 years ..................... 2%
5 years or more but less than 6 years ..................... 1%
6 years or more ........................................... 0%
Approximately eight years after purchase, Class B shares will convert
automatically to Class A shares. Shares purchased through reinvestment of
dividends and distributions on Class B shares also will convert automatically to
Class A shares along with the underlying shares on which they were earned.
Conversion occurs at the end of the month which precedes the eighth anniversary
of the purchase date. If Class B shares of the Fund are exchanged for Class B
shares of another Seligman Mutual Fund, the conversion period applicable to the
Class B shares acquired in the exchange will apply, and the holding period of
the shares exchanged will be tacked onto the holding period of the shares
acquired. Class B shareholders of the Fund exercising the exchange privilege
will continue to be subject to the Fund's CDSC schedule if such schedule is
higher or longer than the CDSC schedule relating to the new Class B shares. In
addition, Class B shares of the Fund acquired by exchange will be subject to the
Fund's CDSC schedule if such schedule is higher or longer than the CDSC schedule
relating to the Class B shares of the Seligman mutual fund from which the
exchange has been made.
Class C
Class C shares may be purchased at a price equal to the next determined net
asset value, plus an initial sales charge. Purchases of Class C shares by a
"single person" may be eligible for the reductions in initial sales charges
described above for Class A shares. Class C shares are subject to a CDSC of 1%
if the shares are redeemed within eighteen months of purchase, charged as a
percentage of the current net asset value or the original purchase price,
whichever is less.
Class D
Class D shares may be purchased at a price equal to the next determined net
asset value, without an initial sales charge. However, Class D shares are
subject to a CDSC of 1% if the shares are redeemed within one year of purchase,
charged as a percentage of the current net asset value or the original purchase
price, whichever is less. Unlike Class B shares, Class D shares do not
automatically convert to Class A shares after eight years.
Systematic Withdrawals. Class B, Class C, and Class D shareholders who reinvest
both their dividends and capital gain distributions to purchase additional
shares of a Fund, may use the Systematic Withdrawal Plan to withdraw up to 12%,
10%, and 10%, respectively, of the value of their accounts per year without the
imposition of a CDSC. Account value is determined as of the date the systematic
withdrawals begin.
CDSC Waivers. The CDSC on Class B, Class C, and Class D shares (and certain
Class A shares, as discussed above) will be waived or reduced in the following
instances:
(1) on redemptions following the death or disability (as defined in Section
72(m)(7) of the Internal Revenue Code) of a shareholder or beneficial
owner;
(2) in connection with (1) distributions from retirement plans qualified under
Section 401(a) of the Internal Revenue Code when such redemptions are
necessary to make distributions to plan participants (such payments
include, but are not limited to, death, disability, retirement, or
separation of service), (2) distributions from a custodial account under
Section 403(b)(7) of the Internal Revenue Code or an IRA due to death,
disability, minimum distribution requirements after attainment of age 70
1/2 or, for
29
<PAGE>
accounts established prior to January 1, 1998, attainment of age 59 1/2,
and (3) a tax-free return of an excess contribution to an IRA;
(3) in whole or in part, in connection with shares sold to current and retired
Directors of the Funds;
(4) in whole or in part, in connection with shares sold to any state, county,
or city or any instrumentality, department, authority, or agency thereof,
which is prohibited by applicable investment laws from paying a sales load
or commission in connection with the purchase of any registered investment
management company;
(5) in whole or in part, in connection with systematic withdrawals;
(6) in connection with participation in the Merrill Lynch Small Market 401(k)
Program.
If, with respect to a redemption of any Class A, Class B, Class C or Class D
shares sold by a dealer, the CDSC is waived because the redemption qualifies for
a waiver as set forth above, the dealer shall remit to Seligman Advisors
promptly upon notice, an amount equal to the payment or a portion of the payment
made by Seligman Advisors at the time of sale of such shares.
Payment in Securities. In addition to cash, the Funds may accept securities in
payment for Fund shares sold at the applicable public offering price (net asset
value and, if applicable, any sales charge), although the Funds do not presently
intend to accept securities in payment for Fund shares. Generally, a Fund will
only consider accepting securities (l) to increase its holdings in a portfolio
security, or (2) if Seligman determines that the offered securities are a
suitable investment for the Fund and in a sufficient amount for efficient
management. Although no minimum has been established, it is expected that a Fund
would not accept securities with a value of less than $100,000 per issue in
payment for shares. A Fund may reject in whole or in part offers to pay for Fund
shares with securities, may require partial payment in cash for applicable sales
charges, and may discontinue accepting securities as payment for Fund shares at
any time without notice. The Funds will not accept restricted securities in
payment for shares. The Funds will value accepted securities in the manner
provided for valuing portfolio securities.
Fund Reorganizations
Class A shares and Class C shares may be issued without an initial sales charge
in connection with the acquisition of cash and securities owned by other
investment companies. Any CDSC will be waived in connection with the redemption
of shares of a Fund if the Fund is combined with another Seligman mutual fund,
or in connection with a similar reorganization transaction.
Offering Price
When you buy or sell Fund shares, you do so at the Class's net asset value (NAV)
next calculated after Seligman Advisors accepts your request. Any applicable
sales charge will be added to the purchase price for Class A shares and Class C
shares.
NAV per share of each class of a Fund is determined as of the close of regular
trading on the New York Stock Exchange (normally, 4:00 p.m. Eastern time), on
each day that the NYSE is open for business. The NYSE is currently closed on New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. A Fund
will also determine NAV for each class on each day in which there is a
sufficient degree of trading in the Fund's portfolio securities that the NAV of
Fund shares might be materially affected. NAV per share for a class is computed
by dividing such class's share of the value of the net assets of the Fund (i.e.,
the value of its assets less liabilities) by the total number of outstanding
shares of such class. All expenses of the Fund, including the management fee,
are accrued daily and taken into account for the purpose of determining NAV. The
NAV of Class B, Class C, and Class D shares will generally be lower than the NAV
of Class A shares as a result of the higher 12b-1 fees with respect to such
shares.
30
<PAGE>
Portfolio securities, including open short positions and options written, are
valued at the last sale price on the securities exchange or securities market on
which such securities primarily are traded. Securities traded on a foreign
exchange or over-the-counter market are valued at the last sales price on the
primary exchange or market on which they are traded. United Kingdom securities
and securities for which there are not recent sales transactions are valued
based on quotations provided by primary market maker in such securities. Other
securities not listed on an exchange or securities market, or securities in
which there were no transactions, are valued at the average of the most recent
bid and asked price, except in the case of open short positions where the asked
price is available. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as determined in
accordance with procedures approved by the Board of Directors. Short-term
obligations with less than sixty days remaining to maturity are generally valued
at amortized cost. Short-term obligations with more than sixty days remaining to
maturity will be valued at current market value until the sixtieth day prior to
maturity, and will then be valued on an amortized cost basis based on the value
on such date unless the Board determines that this amortized cost value does not
represent fair market value.
Generally, trading in foreign securities, as well as US Government securities,
money market instruments and repurchase agreements, is substantially completed
each day at various times prior to the close of regular trading on the NYSE. The
values of such securities used in computing the net asset value of the shares of
each Fund are determined as of such times. Foreign currency exchange rates are
also generally determined prior to the close of regular trading on the NYSE.
For purposes of determining the net asset value per share of a Fund, all assets
and liabilities initially expressed in foreign currencies will be converted into
US dollars at the mean between the bid and offer prices of such currencies
against US dollars quoted by a major bank that is a regular participant in the
foreign exchange market or on the basis of a pricing service that takes into
account the quotes provided by a number of such major banks.
Specimen Price Make-Up
Under the current distribution arrangements between the Funds and Seligman
Advisors, Class A shares and Class C shares are sold with a maximum initial
sales charge of 4.75% and 1.00%(1), respectively, and Class B and Class D shares
are sold at NAV(2). Using each Class's NAV at October 31, 1998, (except Class C,
which commences operations effective June 1, 1999) the maximum offering price of
each Fund's shares is as follows:
Class A
<TABLE>
<CAPTION>
Global Global
Emerging Growth Smaller Global
International Markets Opportunities Companies Technology
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value per share........... $17.75 $5.18 $ 9.62 $14.11 $12.48
Maximum sales charge
(4.75% of offering price)......... 0.89 0.26 0.48 0.70 0.62
------ ----- ------ ------ ------
Offering price to public............ $18.64 $5.44 $10.10 $14.81 $13.10
====== ===== ====== ====== ======
</TABLE>
Class B
<TABLE>
<CAPTION>
Global Global
Emerging Growth Smaller Global
International Markets Opportunities Companies Technology
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value and
Offering price per share(2)....... $16.93 $5.09 $ 9.40 $13.46 $11.98
====== ===== ====== ====== ======
</TABLE>
31
<PAGE>
Class D
<TABLE>
<CAPTION>
Global Global
Emerging Growth Smaller Global
International Markets Opportunities Companies Technology
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value and
Offering price per share(2)....... $16.93 $5.09 $ 9.40 $13.47 $11.96
====== ===== ====== ====== ======
</TABLE>
- ------------------------
(1) In addition to the front-end sales charge of 1.00%, Class C shares are
subject to a 1% CDSC if you redeem your shares within eighteen months of
purchase.
(2) Class B shares are subject to a CDSC, declining from 5% in the first year
after purchase to 0% after six years. Class D shares are also subject to a
1% CDSC if you redeem your shares within one year of purchase.
Redemption in Kind
The procedures for selling Fund shares under ordinary circumstances are set
forth in the Prospectus. In unusual circumstances, payment may be postponed, or
the right of redemption postponed for more than seven days, if the orderly
liquidation of portfolio securities is prevented by the closing of, or
restricted trading on, the NYSE during periods of emergency, or such other
periods as ordered by the Securities and Exchange Commission. Under these
circumstances, redemption proceeds may be made in securities. If payment is made
in securities, a shareholder may incur brokerage expenses in converting these
securities to cash.
Taxation of the Funds
Foreign Income Taxes. Investment income received by the Fund from sources within
foreign countries may be subject to foreign income taxes withheld at source. The
United States has entered into tax treaties with many foreign countries which
entitle the Fund to a reduced rate of such taxes or exemption from taxes on such
income. It is impossible to determine the effective rate of foreign tax in
advance since the amount of each Fund's assets to be invested within various
countries is not known.
US Federal Income Taxes. Each Fund is qualified and intends to continue to
qualify for each taxable year for tax treatment as a "regulated investment
company" under the Internal Revenue Code. Qualification relieves a Fund of
Federal income tax liability on that part of its net ordinary income and net
realized capital gains which it pays out to its shareholders. Such qualification
does not, of course, involve governmental supervision of management or
investment practices or policies. Investors should consult their own counsel for
a complete understanding of the requirements a Fund must meet to qualify for
such treatment. The information set forth in the Prospectus and the following
discussion relate solely to the US Federal income taxes on dividends and
distributions by a Fund and assumes that each Fund qualifies as a regulated
investment company. Investors should consult their own counsel for further
details, including their possible entitlement to foreign tax credits that might
be "passed through" to them under the rules described below, and the application
of state and local tax laws to his or her particular situation.
Each Fund intends to declare and distribute dividends in the amounts and at the
times necessary to avoid the application of the 4% Federal excise tax imposed on
certain undistributed income of regulated investment companies. Each Fund will
be required to pay the 4% excise tax to the extent it does not distribute to its
shareholders during any calendar year at least 98% of its ordinary income for
the calendar year plus 98% of its capital gain net income for the twelve months
ended October 31 of such year. Certain distributions of the Fund which are paid
in January of a given year but are declared in the prior October, November or
December to shareholders of record as of a specified date during such a month
will be treated as having been distributed to shareholders and will be taxable
to shareholders as if received in December.
32
<PAGE>
Dividends of net ordinary income and distributions of any net realized
short-term capital gain are taxable to shareholders as ordinary income. Since
each Fund expects to derive a substantial portion of its gross income (exclusive
of capital gains) from sources other than qualifying dividends, it is expected
that only a portion of each Fund's dividends or distributions will qualify for
the dividends received deduction for corporations.
The excess of net long-term capital gains over the net short-term capital losses
realized and distributed by each Fund to its shareholders will be taxable to the
shareholders as long-term capital gains, irrespective of the length of time a
shareholder may have held Fund shares. Individual shareholders will be subject
to federal income tax on net capital gain at a maximum rate of 20% in respect of
shares held for more than one year. Net capital gain of a corporate shareholder
is taxed at the same rate as ordinary income. Any dividend or distribution
received by a shareholder on shares of a Fund shortly after the purchase of such
shares will have the effect of reducing the net asset value of such shares by
the amount of such dividend or distribution. Furthermore, such dividend or
distribution, although in effect a return of capital, would be taxable to the
shareholder as described above. If a shareholder has held shares in a Fund for
six months or less and during that period has received a distribution taxable to
the shareholder as a long-term capital gain, any loss recognized by the
shareholder on the sale of those shares during that period will be treated as a
long-term capital loss to the extent of the distribution.
Dividends and distributions are taxable in the manner discussed regardless of
whether they are paid to the shareholder in cash or are reinvested in additional
shares of a Fund's common stock.
Income received by a Fund from sources within various foreign countries may be
subject to foreign income tax. If more than 50% of the value of a Fund's total
assets at the close of its taxable year consists of the stock or securities of
foreign corporations, such Fund may elect to "pass through" to its shareholders
the amount of foreign income taxes paid by such Fund. Pursuant to such election,
shareholders would be required: (i) to include in gross income, even though not
actually received, their respective pro-rata shares of a Fund's gross income
from foreign sources; and (ii) either to deduct their pro-rata share of foreign
taxes in computing their taxable income, or to use such share as a foreign tax
credit against Federal income tax (but not both). No deduction for foreign taxes
could be claimed by a shareholder who does not itemize deductions.
Shareholders who choose to utilize a credit (rather than a deduction) for
foreign taxes will be subject to the limitation that the credit may not exceed
the shareholder's US tax (determined without regard to the availability of the
credit) attributable to his or her total foreign source taxable income. For this
purpose, the portion of dividends and distributions paid by a Fund from its
foreign source income will be treated as foreign source income. Each Fund's
gains from the sale of securities will generally be treated as derived from US
sources, however, and certain foreign currency gains and losses likewise will be
treated as derived from US sources. The limitation on the foreign tax credit is
applied separately to foreign source "passive income," such as the portion of
dividends received from a Fund which qualifies as foreign source income. In
addition, the foreign tax credit is allowed to offset only 90% of the
alternative minimum tax imposed on corporations and individuals. Because of
these limitations, shareholders may be unable to claim a credit for the full
amount of their proportionate shares of the foreign income taxes paid by a Fund.
Each Fund intends for each taxable year to meet the requirements of the Code to
"pass through" to its shareholders foreign income taxes paid, but there can be
no assurance that a Fund will be able to do so. Each shareholder will be
notified within 60 days after the close of each taxable year of each Fund
whether the foreign taxes paid by such Fund will "pass through" for that year,
and, if so, the amount of each shareholder's pro-rata share (by country) of (i)
the foreign taxes paid, and (ii) such Fund's gross income from foreign sources.
Of course, shareholders who are not liable for Federal income taxes, such as
retirement plans qualified under Section 401 of the Code, will not be affected
by any such "pass through" of foreign tax credits.
33
<PAGE>
Investments in Passive Foreign Investment Companies. If a Fund purchases shares
in certain foreign investment entities, referred to as "passive foreign
investment companies," the Fund itself may be subject to US Federal income tax,
and an additional charge in the nature of interest, on a portion of any "excess
distribution" from such company or gain from the disposition of such shares,
even if the distribution or gain is paid by such Fund as a dividend to its
shareholders. If a Fund were able and elected to treat a passive foreign
investment company as a "qualified electing fund," in lieu of the treatment
described above, such Fund would be required each year to include in income, and
distribute to shareholders in accordance with the distribution requirements set
forth above, its pro rata share of the ordinary earnings and net capital gains
of the company, whether or not distributed to such Fund.
Certain Foreign Currency Transactions. Gains or losses attributable to foreign
currency contracts, or to fluctuations in exchange rates that occur between the
time a Fund accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund actually
collects such receivables or pays such liabilities are treated as ordinary
income or ordinary loss. Similarly, gains or losses on disposition of debt
securities denominated in a foreign currency attributable to fluctuations in the
value of the foreign currency between the date of acquisition of the security
and the date of disposition also are treated as ordinary gain or loss. These
gains or losses increase or decrease the amount of a Fund's net investment
income available to be distributed to its shareholders as ordinary income.
Options Transactions. A special "marked-to-market" system governs the taxation
of "section 1256 contracts," which include certain listed options. Each Fund may
invest in such section 1256 contracts. In general, gain or loss on section 1256
contracts will be taken into account for tax purposes when actually realized. In
addition, any section 1256 contracts held at the end of a taxable year will be
treated as sold at fair market value (that is, marked-to-market), and the
resulting gain or loss will be recognized for tax purposes. In general, gain or
loss recognized by a Fund on the actual or deemed disposition of a section 1256
contract will be treated as 60% long-term and 40% short-term capital gain or
loss, regardless of the period of time the section 1256 contract is actually
held by such Fund. Each Fund can elect to exempt its section 1256 contracts
which are part of a "mixed" straddle from the application of section 1256.
Shareholders are urged to consult their tax advisors concerning the effect of
federal income taxes in their individual circumstances.
Unless a shareholder includes a certified taxpayer identification number (social
security number for individuals) on the account application and certifies that
the shareholder is not subject to backup withholding, the Funds are required to
withhold and remit to the US Treasury a portion of distributions and other
reportable payments to the shareholder. The rate of backup withholding is 31%.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, a Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed, the Fund may charge a service fee of up to $50 that may be
deducted from the shareholder's account and offset against any undistributed
dividends and capital gain distributions. The Funds also reserve the right to
close any account which does not have a certified taxpayer identification
number.
Underwriters
Distribution of Securities
Seligman Henderson Global Fund Series, Inc. and Seligman Advisors are parties to
a Distributing Agreement dated January 1, 1993, under which Seligman Advisors
acts as the exclusive agent for distribution of shares of the Funds. Seligman
Advisors accepts orders for the purchase of Fund shares, which are offered
continuously. As general distributor of the Fund's capital stock, Seligman
Advisors allows reallowances to all dealers on sales of Class A shares, as set
forth above under "Dealer Reallowances." Seligman Advisors retains the balance
of sales charges and any CDSC paid by investors.
34
<PAGE>
Total sales charges paid by shareholders of Class A shares of the Funds for the
fiscal years ended October 31, 1998, 1997, and 1996 are shown below, as well as
the amounts of Class A sales charges that were retained by Seligman Advisors. No
Class C shares of any Fund were issued or outstanding during such fiscal years:
<TABLE>
<CAPTION>
1998
----
Amount of Class A
Total Sales Charges Sales Charges Retained
Paid by Shareholders by
Fund On Class A Shares Seligman Advisors
---- ----------------- -----------------
<S> <C> <C>
International Fund $ 117,729 $ 13,622
Emerging Markets Growth Fund 101,075 11,459
Global Growth Opportunities Fund 176,957 19,994
Global Smaller Companies Fund 848,066 94,085
Global Technology Fund 1,099,378 121,127
1997
----
<CAPTION>
Amount of Class A
Total Sales Charges Sales Charges
Paid by Shareholders Retained by
Fund On Class A Shares Seligman Advisors
---- ----------------- -----------------
<S> <C> <C>
International Fund $ 152,666 $ 17,927
Emerging Markets Growth Fund 622,098 69,894
Global Growth Opportunities Fund 403,744 44,965
Global Smaller Companies Fund 3,632,126 400,220
Global Technology Fund 1,923,733 210,590
1996
----
<CAPTION>
Amount of Class A
Total Sales Charges Sales Charges
Paid by Shareholders Retained by
Fund On Class A Shares Seligman Advisors
---- ----------------- -----------------
<S> <C> <C>
International Fund $ 374,305 $ 42,719
Emerging Markets Growth Fund* 780,777 31,761
Global Growth Opportunities Fund 4,381,479 201,990
Global Smaller Companies Fund 7,309,493 810,616
Global Technology Fund 8,466,372 930,729
</TABLE>
* For the period 5/28/96 (commencement of operations) to 10/31/96.
Compensation
Seligman Advisors, which is an affiliated person of Seligman, which is an
affiliated person of the Funds, received the following commissions and other
compensation from the Funds during fiscal year ended October 31, 1998:
35
<PAGE>
<TABLE>
<CAPTION>
Net Underwriting Compensation on
Discounts and Redemptions and
Commissions Repurchases
(Class A Sales (CDSC on Class A and Brokerage Other
Fund Charge Retained) Class D Retained) Commissions Compensation(1)
- ---- ---------------- -------------------- ----------- ---------------
<S> <C> <C> <C> <C>
International Fund $ 13,622 $ 7,109 $ -- $7,600
Emerging Markets Growth Fund 11,459 16,136 -- 8,034
Global Growth Opportunities Fund
19,994 15,178 -- 8,743
Global Smaller Companies Fund 94,085 118,278 -- 82,534
Global Technology Fund 121,127 42,732 -- 28,886
</TABLE>
(1) Seligman Advisors has sold its rights to collect the distribution fees paid
by each Fund in respect of Class B shares and any CDSC imposed on
redemptions of Class B shares to FEP Capital, L.P., in connection with an
arrangement with FEP Capital, L.P. as discussed above under "12b-1 Plans."
In connection with this arrangement, Seligman Advisors receives payments
from FEP Capital, L.P. based on the value of Class B shares sold. Such
payments received for fiscal year 1998 are reflected in the table.
Other Payments
Seligman Advisors shall pay broker/dealers, from its own resources, a fee on
purchases of Class A shares of $1,000,000 or more (NAV sales), calculated as
follows: 1.00% of NAV sales up to but not including $2 million; .80% of NAV
sales from $2 million up to but not including $3 million; .50% of NAV sales from
$3 million up to but not including $5 million; and .25% of NAV sales from $5
million and above. The calculation of the fee will be based on assets held by a
"single person," including an individual, members of a family unit comprising
husband, wife and minor children purchasing securities for their own account, or
a trustee or other fiduciary purchasing for a single fiduciary account or single
trust. Purchases made by a trustee or other fiduciary for a fiduciary account
may not be aggregated purchases made on behalf of any other fiduciary or
individual account.
Seligman Advisors shall also pay broker/dealers, from its own resources, a fee
on assets of certain investments in Class A shares of the Seligman mutual funds
participating in an "eligible employee benefit plan" that are attributable to
the particular broker/dealer. The shares eligible for the fee are those on which
an initial sales charge was not paid because either the participating eligible
employee benefit plan has at least (1) $500,000 invested in the Seligman mutual
funds or (2) 50 eligible employees to whom such plan is made available. Class A
shares representing only an initial purchase of Seligman Cash Management Fund
are not eligible for the fee. Such shares will become eligible for the fee once
they are exchanged for shares of another Seligman mutual fund. The payment is
based on cumulative sales for each Plan during a single calendar year, or
portion thereof. The payment schedule, for each calendar year, is as follows:
1.00% of sales up to but not including $2 million; .80% of sales from $2 million
up to but not including $3 million; .50% of sales from $3 million up to but not
including $5 million; and .25% of sales from $5 million and above.
Seligman Advisors may from time to time assist dealers by, among other things,
providing sales literature to, and holding informational programs for the
benefit of, dealers' registered representatives. Dealers may limit the
participation of registered representatives in such informational programs by
means of sales incentive programs which may require the sale of minimum dollar
amounts of shares of Seligman mutual funds. Seligman Advisors may from time to
time pay a bonus or other incentive to dealers that sell shares of the Seligman
mutual funds. In some instances, these bonuses or incentives may be offered only
to certain dealers which employ registered representatives who have sold or may
sell a significant amount of shares of the Fund and/or certain other mutual
funds managed by the Manager during a specified period of time. Such bonus or
other incentive may take the form of payment for travel expenses, including
lodging, incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or outside the
United States. The cost to Seligman Advisors of such promotional activities and
payments shall be consistent with the rules of the National Association of
Securities Dealers, Inc., as then in effect.
36
<PAGE>
Calculation of Performance Data
Class A
The average annual total returns for the one-year and five-year periods ended
October 31, 1998 and for the period April 7, 1992 (inception) through October
31, 1998 for the Class A shares of the International Fund were 1.46%, 6.12% and
9.34%, respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period May 28, 1996 (inception) through October 31, 1998 for the
Class A shares of the Emerging Markets Growth Fund were (32.81%) and (14.14%),
respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period November 1, 1995 (inception) through October 31, 1998 for the
Class A shares of the Global Growth Opportunities Fund were 4.31% and 10.34%,
respectively.
The average annual total returns for the one-year and five-year periods ended
October 31, 1998 and for the period September 9, 1992 (inception) through
October 31, 1998 for the Class A shares of the Global Smaller Companies Fund
were (10.30)%, 10.41% and 14.49%, respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period May 23, 1994 (inception) through October 31, 1998 for the
Class A shares of the Global Technology Fund were (5.53)% and 18.93%,
respectively.
The average annual total returns for each Fund's Class A shares were computed by
assuming a hypothetical initial investment of $1,000 in Class A shares of the
Fund, subtracting the maximum sales charge of 4.75% of public offering price,
and assuming that all dividends and distributions paid by the Fund's Class A
shares, if any, were reinvested over the relevant time period. It was then
assumed that at the end of each period, the entire amount was redeemed. The
average annual total return was then calculated by calculating the annual rate
required for the initial payment to grow to the amount which would have been
received upon such redemption (i.e., the average annual compound rate of
return).
Class B
The average annual total returns for the one-year period ended October 31, 1998
and for the period April 22, 1996 (inception) to October 31, 1998 for the Class
B shares of the International Fund were 0.62% and 3.00%, respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period May 28, 1996 (inception) to October 31, 1998 for the Class B
shares of the Emerging Markets Growth Fund were (33.49)% and (14.10)%,
respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period April 22, 1996 (inception) to October 31, 1998 for the Class
B shares of the Global Growth Opportunities Fund were 3.76% and 7.33%,
respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period April 22, 1996 (inception) to October 31, 1998 for the Class
B shares of the Global Smaller Companies Fund were (11.01)% and (0.19)%,
respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period April 22, 1996 (inception) to October 31, 1998 for the Class
B shares of the Global Technology Fund were (5.62)% and 8.69%, respectively.
The average annual total returns for each Fund's Class B shares were computed by
assuming a hypothetical initial investment of $1,000 in Class B shares of the
Fund, and assuming that all dividends and
37
<PAGE>
distributions paid by the Fund's Class B shares, if any, were reinvested over
the relevant time period. It was then assumed that at the end of each period,
the entire amount was redeemed, subtracting the applicable CDSC.
Class D
The average annual total returns for the one-year and five-year periods ended
October 31, 1998 and for the period September 21, 1993 (inception) through
October 31, 1998 for the Class D shares of the International Fund were 4.53%,
6.29%, and 7.12%, respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period May 28, 1996 (inception) through October 31, 1998 for the
Class D shares of the Emerging Markets Growth Fund were (30.69)% and (13.02)%,
respectively.
The average annual total returns for the one-year period ended October 31, 1998
and the period November 1, 1995 (inception) through October 31, 1998 for the
Class D shares of the Global Growth Opportunities Fund were 7.76% and 11.33%,
respectively.
The average annual total returns for the one-year and five-year periods ended
October 31, 1998 and for the period May 3, 1993 (inception) through October 31,
1998 for Class D shares of the Global Smaller Companies Fund were (7.43)%,
10.66% and 12.77%, respectively.
The average annual total returns for the one-year period ended October 31, 1998
and for the period May 23, 1994 (inception) through October 31, 1998 for the
Class D shares of the Global Technology Fund were (2.51)% and 19.25%,
respectively.
The average annual total returns for each Fund's Class D shares were computed by
assuming a hypothetical initial investment of $1,000 in Class D shares of the
Fund, and assuming that all dividends and distributions paid by the Fund's Class
D shares, if any, were reinvested over the relevant time period. It was then
assumed that at the end of each period, the entire amount was redeemed,
subtracting for the one-year period the 1% CDSC, if applicable.
The tables below illustrate the total returns on a $1,000 investment in each of
the Fund's Class A, Class B and Class D shares from the commencement of a Fund's
operations through October 31, 1998, assuming investment of all dividends and
capital gain distributions and deduction of any applicable sales charges or
CDSC. Average annual total returns are determined by calculating the annual rate
of return required for the initial $1,000 investment to grow to the amount which
would have been received upon redemption. (i.e., the average annual compound
rate of return).
Class C shares is a new class, effective June 1, 1999, so no performance data is
presented.
The results shown should not be considered a representation of the dividend
income or gain or loss in capital value which may be realized from an investment
made in a class of shares of any Fund today.
38
<PAGE>
<TABLE>
<CAPTION>
Class A
Value of Value of Total Value
Fund/Year Initial Capital Gain Value of of Total
Ended (1) Investment (2) Distributions Dividends Investment (2) Return (1)(3)
- --------- -------------- ------------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
International Fund
10/31/92 $ 944 $ -- $ -- $ 944
10/31/93 1,268 -- 4 1,272
10/31/94 1,402 28 5 1,435
10/31/95 1,326 87 5 1,418
10/31/96 1,363 169 5 1,537
10/31/97 1,422 261 5 1,688
10/31/98 1,409 384 5 1,798 79.79%
Emerging Markets Growth
Fund
10/31/96 $ 904 $ -- $ -- $ 904
10/31/97 979 -- -- 979
10/31/98 691 -- -- 691 (30.93)%
Global Growth
Opportunities Fund
10/31/96 $ 1,077 $ -- $ -- $ 1,077
10/31/97 1,227 -- -- 1,227
10/31/98 1,282 61 -- 1,343 34.35%
Global Smaller Companies
Fund
10/31/92 $ 953 $ -- $ -- $ 953
10/31/93 1,330 -- 3 1,333
10/31/94 1,591 10 3 1,604
10/31/95 1,853 69 4 1,926
10/31/96 2,019 230 4 2,253
10/31/97 2,083 352 4 2,439
10/31/98 1,881 412 4 2,297 129.72%
Global Technology Fund
10/31/94 $ 1,116 $ -- $ -- $ 1,116
10/31/95 1,740 16 -- 1,756
10/31/96 1,508 116 3 1,627
10/31/97 2,019 156 3 2,178
10/31/98 1,664 494 3 2,161 116.06%
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
Class B
-------
Value of Value of Total Value
Fund/Year Initial Capital Gain Value of of Total
Ended (1) Investment (2) Distributions Dividends Investment (2) Return (1)(3)
- --------- -------------- ------------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
International Fund
10/31/96 $ 963 $ -- $ -- $ 963
10/31/97 995 54 -- 1,049
10/31/98 945 133 -- 1,078 7.75%
Emerging Markets Growth
Fund
10/31/96 $ 947 $ -- $ -- $ 947
10/31/97 1,018 -- -- 1,018
10/31/98 692 -- -- 692 (30.85)%
Global Growth
Opportunities Fund
10/31/96 $ 998 $ -- $ -- $ 998
10/31/97 1,127 -- -- 1,127
10/31/98 1,140 56 -- 1,196
19.55%
Global Smaller Companies
Fund
10/31/96 $ 1,019 $ -- $ -- $ 1,019
10/31/97 1,042 -- 53 1,095
10/31/98 904 43 48 995 (0.48)%
Global Technology Fund
10/31/96 $ 967 $ -- $ -- $ 967
10/31/97 1,284 -- -- 1,284
10/31/98 1,014 220 -- 1,234 23.43%
</TABLE>
Class D
-------
<TABLE>
<CAPTION>
Value of Value of Total Value
Fund/Year Initial Capital Gain Value of of Total
Ended (1) Investment (2) Distributions Dividends Investment (2) Return (1)(3)
- --------- -------------- ------------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
International Fund
10/31/93 $ 1,048 $ -- $ -- $ 1,048
10/31/94 1,151 23 -- 1,174
10/31/95 1,079 71 -- 1,150
10/31/96 1,099 138 -- 1,237
10/31/97 1,136 211 -- 1,347
10/31/98 1,112 310 -- 1,422 42.16%
Emerging Markets Growth
Fund
10/31/96 $ 947 $ -- $ -- $ 947
10/31/97 1,018 -- -- 1,018
10/31/98 713 -- -- 713
(28.71)%
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Value of Value of Total Value
Fund/Year Initial Capital Gain Value of of Total
Ended (1) Investment (2) Distributions Dividends Investment (2) Return (1)(3)
- --------- -------------- ------------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Global Growth
Opportunities Fund
10/31/96 $ 1,123 $ -- $ -- $ 1,123
10/31/97 1,269 -- -- 1,269
10/31/98 1,317 63 -- 1,350 38.00%
Global Smaller Companies
Fund
10/31/93 $ 1,167 $ -- $ -- $ 1,167
10/31/94 1,385 9 -- 1,394
10/31/95 1,600 60 -- 1,660
10/31/96 1,728 200 -- 1,928
10/31/97 1,767 305 -- 2,072
10/31/98 1,581 355 -- 1,936 93.62%
Global Technology Fund
10/31/94 $ 1,164 $ -- $ -- $ 1,168
10/31/95 1,806 16 -- 1,822
10/31/96 1,554 121 -- 1,675
10/31/97 2,063 161 -- 2,224
10/31/98 1,675 511 -- 2,186 118.63%
</TABLE>
- ---------------
(1) From commencement of operations on:
<TABLE>
<CAPTION>
Fund Class A Shares Class B Shares Class D Shares
---- -------------- -------------- --------------
<S> <C> <C> <C>
International Fund 4/7/92 4/22/96 9/21/93
Emerging Markets Growth Fund 5/28/96 5/28/96 5/28/96
Global Growth Opportunities Fund 11/1/95 4/22/96 11/1/95
Global Smaller Companies Fund 9/9/92 4/22/96 5/3/93
Global Technology Fund 5/23/94 4/22/96 5/23/94
</TABLE>
(2) The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load or CDSC, if applicable, assumes that all
dividends and capital gain distributions were taken in cash and reflects
changes in the net asset value of the shares purchased with the
hypothetical initial investment. "Total Value of Investment" reflects the
effect of the CDSC, if applicable, and assumes investment of all dividends
and capital gain distributions.
(3) "Total Return" for each class of shares of a Fund is calculated by assuming
a hypothetical initial investment of $1,000 at the beginning of the period
specified; subtracting the maximum sales load for Class A shares;
determining total value of all dividends and capital gain distributions
that would have been paid during the period on such shares assuming that
each dividend or capital gain distribution was invested in additional
shares at net asset value; calculating the total value of the investment at
the end of the period; subtracting the CDSC on Class B and Class D shares,
if applicable; and finally, by dividing the difference between the amount
of the hypothetical initial investment at the beginning of the period and
its total value at the end of the period by the amount of the hypothetical
initial investment. The International Fund's total return and average
annual total return quoted from time to time through September 21, 1993 for
Class A shares does not reflect the deduction of the administration,
shareholder services and distribution fee effective on that date, which fee
if reflected would reduce the performance quoted.
No adjustments have been made for any income taxes payable by investors on
dividends invested or gain distributions taken in shares.
Seligman and/or the prior subadviser waived its fees and reimbursed certain
expenses during some of the periods above, which positively affected the
performance results presented.
From time to time, reference may be made in advertising or promotional material
to performance information, including mutual fund rankings, prepared by Lipper
Analytical Services, Inc., an independent reporting service which monitors the
performance of mutual funds. In calculating the total return of the
41
<PAGE>
Fund's Class A, Class B, Class C, and Class D shares, the Lipper analysis
assumes investment of all dividends and distributions paid but does not take
into account applicable sales charges. Each Fund may also refer in
advertisements in other promotional material to articles, comments, listings and
columns in the financial press pertaining to the Fund's performance. Examples of
such financial and other press publications include BARRON'S, BUSINESS WEEK,
CDA/WIESENBERGER MUTUAL FUNDS INVESTMENT REPORT, CHRISTIAN SCIENCE MONITOR,
FINANCIAL PLANNING, FINANCIAL TIMES, FINANCIAL WORLD, FORBES, FORTUNE,
INDIVIDUAL INVESTOR, INVESTMENT ADVISOR, INVESTORS BUSINESS DAILY, KIPLINGER'S,
LOS ANGELES TIMES, MONEY MAGAZINE, MORNINGSTAR, INC., PENSION AND INVESTMENTS,
SMART MONEY, THE NEW YORK TIMES, THE WALL STREET JOURNAL, USA TODAY, U.S. NEWS
AND WORLD REPORT, WORTH MAGAZINE, WASHINGTON POST AND YOUR MONEY.
A Fund's advertising or promotional material may make reference to the Fund's
"Beta," "Standard Deviation," or "Alpha." Beta measures the volatility of the
Fund, as compared to that of the overall market. Standard deviation measures how
widely the Fund's performance has varied from its average performance, and is an
indicator of the Fund's potential for volatility. Alpha measures the difference
between the returns of the Fund and the returns of the market, adjusted for
volatility.
Financial Statements
The Annual Report to shareholders for the fiscal year ended October 31, 1998
contains a schedule of the investments of the Funds as of October 31, 1998, as
well as certain other financial information as of that date. The financial
statements and notes included in the Annual Report, and the Independent
Auditors' Report thereon, are incorporated herein by reference. The Annual
Report will be furnished without charge to investors who request copies of this
SAI.
General Information
Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
by the provisions of the 1940 Act or applicable state law, or otherwise, to the
holders of the outstanding voting securities of an investment company such as
the Fund shall not be deemed to have been effectively acted upon unless approved
by the holders of a majority of the outstanding shares of each class or Fund
affected by such matter. Rule 18f-2 further provides that a class or Fund shall
be deemed to be affected by a matter unless it is clear that the interests of
each class or Fund in the matter are substantially identical or that the matter
does not affect any interest of such class or Fund. However, the Rule exempts
the selection of independent public accountants, the approval of principal
distributing contracts and the election of directors from the separate voting
requirements of the Rule.
Custodian and Recordkeeping Agents. Chase Manhattan Bank, One Pierrepont Plaza,
Brooklyn, New York 11201, serves as custodian for the Fund. Investors Fiduciary
Trust Company, 801 Pennsylvania, Kansas City, Missouri 64105, maintains, under
the general supervision of Seligman, certain accounting records and determines
the net asset value for the each Fund.
Accountants. Deloitte & Touche LLP, independent auditors, have been selected as
auditors of the Funds. Their address is Two World Financial Center, New York, NY
10281.
42
<PAGE>
Appendix A
Moody's Investors Service, Inc. ("Moody's")
Debt Securities
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than Aaa bonds because margins of protection may not
be as large or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be characteristically lacking or may be unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact may have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in high
degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers (1, 2 and 3) in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; modifier 2 indicates a mid-range ranking; and modifier 3
indicates that the issuer ranks in the lower end of its generic rating category.
Commercial Paper
Moody's Commercial Paper Ratings are opinions of the ability of issuers to repay
punctually promissory senior debt obligations not having an original maturity in
excess of one year. Issuers rated "Prime-1" or "P-1" indicate the highest
quality repayment ability of the rated issue.
43
<PAGE>
The designation "Prime-2" or "P-2" indicates that the issuer has a strong
ability for repayment of senior short-term promissory obligations. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.
The designation "Prime-3" or "P-3" indicates that the issuer has an acceptable
capacity for repayment of short-term promissory obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
Issues rated "Not Prime" do not fall within any of the Prime rating categories.
Standard & Poor's Rating Service ("S&P")
Debt Securities
AAA: Debt issues rated AAA are highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt issues rated AA have a very high degree of safety and very strong
capacity to pay interest and repay principal and differ from the highest rated
issues only in small degree.
A: Debt issues rated A are regarded as upper medium grade. They have a strong
degree of safety and capacity to pay interest and repay principal although it is
somewhat more susceptible in the long term to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB: Debt issues rated BBB are regarded as having a satisfactory degree of
safety and capacity to pay interest and re-pay principal. Whereas they normally
exhibit adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
re-pay principal for bonds in this category than for bonds in higher rated
categories.
BB, B, CCC, CC: Debt issues rated BB, B, CCC and CC are regarded on balance, as
predominantly speculative with respect to capacity to pay interest and pre-pay
principal in accordance with the terms of the bond. BB indicates the lowest
degree of speculation and CC the highest degree of speculation. While such bonds
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposure to adverse conditions.
C: The rating C is reserved for income bonds on which no interest is being paid.
D: Debt issues rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.
Commercial Paper
S&P Commercial Paper ratings are current assessments of the likelihood of timely
payment of debts having an original maturity of no more than 365 days.
A-1: The A-1 designation indicates that the degree of safety regarding timely
payment is very strong.
A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
44
<PAGE>
A-3: Issues carrying this designation have adequate capacity for timely payment.
They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B: Issues rated "B" are regarded as having only a speculative capacity for
timely payment.
C: This rating is assigned to short-term debt obligations with a doubtful
capacity of payment.
D: Debt rated "D" is in payment default.
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.
The ratings assigned by S&P may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within its major rating categories.
45
<PAGE>
Appendix B
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest of
eight brothers, arrived in the United States from Germany. He earned his living
as a pack peddler in Pennsylvania, and began sending for his brothers. The
Seligmans became successful merchants, establishing businesses in the South and
East.
Backed by nearly thirty years of business success - culminating in the sale of
government securities to help finance the Civil War - Joseph Seligman, with his
brothers, established the international banking and investment firm of J. & W.
Seligman & Co. In the years that followed, the Seligman Complex played a major
role in the geographical expansion and industrial development of the United
States.
The Seligman Complex:
...Prior to 1900
o Helps finance America's fledgling railroads through underwritings.
o Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
o Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
o Participates in hundreds of successful underwritings including those for
some of the Country's largest companies: Briggs Manufacturing, Dodge
Brothers, General Motors, Minneapolis-Honeywell Regulatory Company, Maytag
Company United Artists Theater Circuit and Victor Talking Machine Company.
o Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $3 billion in
assets, and one of its oldest.
...1930s
o Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund, Inc.
o Establishes Investment Advisory Service.
46
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
o Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.
o Establishes J. & W. Seligman Trust Company and J. & W. Seligman Valuations
Corporation.
o Establishes Seligman Portfolios, Inc., an investment vehicle offered
through variable annuity products.
...1990s
o Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality
Municipal Fund, Inc. two closed-end funds that invest in high quality
municipal bonds.
o In 1991 establishes a joint venture with Henderson plc, of London, known as
Seligman Henderson Co., to offer global and international investment
products.
o Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
o Launches Seligman Henderson Global Fund Series, Inc., which today offers
five separate Funds: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund Seligman Henderson Global Growth Opportunities Fund and
Seligman Henderson Emerging Markets Growth Fund.
o Launches Seligman Value Fund, Inc., which currently offers two separate
Fund: Seligman Large-Cap Value Fund and Seligman Small-Cap Value Fund.
47
<PAGE>
Appendix C
HISTORY OF HENDERSON PLC
Henderson plc's origins can be traced back to the year 1872, when its founder,
Sir Alexander Henderson, joined the London Stock Exchange. In the years that
followed, Sir Alexander and the Henderson brothers began a long tradition of
global investing.
...Prior to 1900
o Alexander Henderson joins the London Stock Exchange in 1872.
o Invests in railways in South America and Spain, mining and gold interests
in Mexico, Australia, and Chile, and wheat field developments in Canada and
the United States.
o Invests in the Argentine Transandine Railway in 1887.
o Helps finance the building of Manchester Ship Canal in England in 1887.
o Launches TR Smaller Companies Investment Trust in 1887.
o Launches The Bankers Investment Trust in 1888.
o Launches Electric and General Investment Company in 1890.
o Launches TR City of London Trust in 1891.
o Helps finance the building of the Great Central Railway in England in 1894.
o Alexander Henderson is elected to British Parliament in 1898.
...1900-1910
o Alexander Henderson is knighted in 1902.
o Finances British Central African Company in 1902 to build railways across
Africa.
o Launches TR Property Investment Trust in 1905.
o Helps establish the National Bank of Turkey in 1909.
o Establishes Witan Investment Company in 1909.
...1910s
o Alexander Henderson achieves peerage as the first Lord Faringdon in 1916.
o Helps establish The British Trade Corporation in 1917, dedicated to
developing international trade for English companies.
...1920-1989
o Presides over the 1922 merger of the Great Central Railway with the London
and North Eastern Railway.
o Henderson Administration, today Henderson plc, is formally incorporated in
1934.
o Henderson is one of the first United Kingdom investors in Occidental
Petroleum in 1959.
o Begins managing a Fund of retail unit trusts in 1974 that are focused on
international markets, including Japan, North America, Europe, and the
Pacific. Today, Henderson manages 22 retail unit trusts, eight exempt unit
trusts, and 20 investment trusts.
o Launches the Luxembourg-based Henderson Horizon Funds in 1983, including
European Smaller Companies Fund and Global Bond Fund. Today, Henderson
offers 12 Henderson Horizon Funds.
o Henderson is listed on the London Stock Exchange in 1983.
48
<PAGE>
...1990s
o Establishes a joint venture in 1991 with New York-based J. & W. Seligman &
Co., known as Seligman Henderson Co., to offer global investment products.
o Launches Seligman Henderson Global Fund Series, Inc., which today offers
five separate Funds: Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund, Seligman Henderson Global Growth Opportunities Fund, and
Seligman Henderson Emerging Markets Growth Fund.
o Has been the recipient of Micropal's "Best Investment Trust Manager of the
Year" award for the years 1994, 1995, and 1996. o In 1998, Henderson plc
was acquired by AMP Limited, an Australian life insurance and financial
services company.
49
<PAGE>
SELIGMAN
---------------------------
SELIGMAN HENDERSON
GLOBAL FUND SERIES, INC.
INTERNATIONAL FUND
EMERGING MARKETS
GROWTH FUND
GLOBAL GROWTH
OPPORTUNITIES FUND
GLOBAL SMALLER
COMPANIES FUND
GLOBAL TECHNOLOGY FUND
ANNUAL REPORT
OCTOBER 31, 1998
INVESTING
AROUND THE WORLD
FOR CAPITAL
APPRECIATION
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
TIMES CHANGE...
Established in 1864, Seligman's history of providing financial services has been
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 134 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including funds that focus on technology stocks, municipal
bonds, and international securities.
...VALUES ENDURE Seligman is proud of its distinctive past and of the
traditional values that continue to shape the firm's business decisions and
investment judgment. While much has changed over the years, the firm's
commitment to providing prudent investment management that seeks to build wealth
for clients over time is an enduring value that will guide Seligman into the new
millennium.
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
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 23
Performance and Portfolio Overview 25
Portfolio of Investments 28
Seligman Henderson Global Smaller Companies Fund:
Investment Report 33
Performance and Portfolio Overview 35
Portfolio of Investments 38
Seligman Henderson Global Technology Fund:
Investment Report 51
Performance and Portfolio Overview 53
Portfolio of Investments 56
Statements of Assets and Liabilities 63
Statements of Operations 64
Statements of Changes in Net Assets 65
Notes to Financial Statements 67
Financial Highlights 75
Report of Independent Auditors 80
Board of Directors 81
Proxy Results 82
Executive Officers AND For More Information 83
Glossary of Financial Terms 84
Benchmarks 85
<PAGE>
TO THE SHAREHOLDERS
We are pleased to provide you with the October 31, 1998, Annual Report for
Seligman Henderson Global Fund Series, Inc., which includes the International
Fund, the Emerging Markets Growth Fund, the Global Growth Opportunities Fund,
the Global Smaller Companies Fund, and the Global Technology Fund. Troubled
markets around the world led to losses for all Seligman Henderson Global Funds
in the six months ended October 31. These losses caused several Funds to end the
fiscal year in negative territory.
While the 1998 fiscal year proved a difficult one for the Funds, the rebound
that started in October continued to gain steam in November and into December.
Some of the hardest hit asset classes this past summer -- technology and
small-company stocks -- recovered the most ground. In turn, the Global
Technology Fund and the Global Smaller Companies Fund, both in negative
territory as the fiscal year ended, posted substantial gains in recent weeks.
The International Fund and the Global Growth Opportunities Fund finished the
year with modest gains, despite losses in the second half of the fiscal year,
and have also posted gains since October. The Emerging Markets Growth Fund,
which had a significant loss for the year, continues to struggle along with
emerging markets in general.
Recent market activity indicates that the magnitude of the global financial
problems has been recognized and authorities are working to find solutions.
Several of the Asian markets first hit by turmoil last year have put stabilizing
policies in place; Japan has taken steps toward bank reform; the International
Monetary Fund, with the backing of the G7, has made a priority of avoiding a
destructive Brazilian devaluation; and interest rates have been lowered in the
US and around the world.
Looking ahead, the combination of lower valuations and positive fiscal action
have increased the attractiveness of stocks and bonds around the world. While
much still needs to be done globally to repair the damage -- especially in the
emerging markets of Asia, Brazil, and Russia -- we believe that significant
longer-term investment opportunities currently exist, and your investment
manager remains committed to the sound principles of long-term investing and
global diversification that have successfully stood the test of time.
Currently, virtually all companies are modifying their computer systems to
recognize dates of January 1, 2000, and beyond. This is often referred to as the
"Y2K" problem. Unless systems are updated, many applications may interpret the
last two digits of the year to mean 1900 instead of 2000. The Seligman
investment teams are well aware of the potential ramifications that the Year
2000 issue may have on companies whose securities are held in investment
portfolios. As part of each Team's investment process, members seek to identify
the preparedness of those firms whose underlying business models leave them
susceptible to Y2K problems. The evaluation of a company's Year 2000 readiness
has become an increasingly important factor which is considered by our
investment teams prior to investing in, disposing of, or continuing to hold, any
security.
In addition to monitoring the potential Y2K impact on our investments, we are
making sure our firm is in order. J. & W. Seligman & Co. Incorporated has
established a team to ensure that your investment and related services are not
disrupted. This team is supported by consulting firms specializing in Y2K
solutions. We are confident that when our plans are finalized and all systems
are tested, there will be no disruption in the services provided by your Fund.
Thank you for your continued support of Seligman Henderson Global Fund Series.
We look forward to serving your investment needs in the many years to come.
By order of the Board of Directors,
/s/WILLIAM C. MORRIS
William C. Morris
Chairman
/s/BRIAN T. ZINO
Brian T. Zino
President
December 4, 1998
1
<PAGE>
MARKET AND ECONOMIC OVERVIEW
OVERVIEW
The year ended October 31, 1998, was marked by volatility and a significant
divergence between the stock markets and economies of the East and the West. In
general, Western stock markets performed well for the year, before falling
sharply in mid-July. By contrast, most Asian stock markets fell throughout the
year before showing recent signs of a tentative recovery. The economic
background has been one of steadily deteriorating conditions as a financial
crisis initially limited to a few Asian countries spread throughout other
regions, culminating in the collapse of the Russian economy. Few countries were
left unscathed.
UNITED STATES
During the economic and market turmoil elsewhere, the US economy continued to
make good progress, although there has been some recent evidence of a slowing.
Corporate profits in the US initially held up well, but expectations declined
steadily throughout the year. For the third quarter of 1998, corporate profits
actually fell. Against this background, bond yields continued to hit new lows,
with the 30-year bond at one point yielding below 5%. The subsequent turmoil in
credit markets has been a major catalyst for the Federal Reserve's three
interest-rate cuts since September.
UNITED KINGDOM
The UK economy has recently begun to contract. The problems in the manufacturing
sector have now appeared in the consumer sector. Growth expectations for this
year and next have been significantly reduced, and corporate profits have come
under increasing pressure. More recently, the Monetary Policy Committee has cut
short-term interest rates, leading to a much needed decline in sterling. In this
negative environment, the UK market has generally underperformed other Western
markets.
CONTINENTAL EUROPE
In general, the performance of Continental European economies has been positive.
In particular, some of the peripheral economies have seen strong growth.
However, there are increasing signs that the problems in Asia are starting to
have a negative impact. Monetary policy has generally been on hold in the core
economies in advance of the introduction of the European Central Bank (ECB).
However, in the peripheral markets, interest rates are converging at the lower
levels of the core economies.
In the early part of 1998, European markets were booming. A favorable economic
background, positive earnings surprises, and abundant liquidity all helped to
generate strong returns. However, stock markets corrected sharply in July and
have since been slow to recover. As elsewhere, European growth expectations for
next year have been declining, but less so compared to other regions.
JAPAN
The economic background in Japan continued to deteriorate throughout the year.
The economy itself is clearly in recession. The government continues to announce
fiscal spending measures, thus far with little impact. During the year, the
financial crisis continued to worsen, with the government having to nationalize
one of the leading banks, although the authorities have promised to provide
enough cash to support the banking system. The Japanese market generally
declined over the period. Recently, however, it has shown signs of stabilizing.
PACIFIC REGION
The situation in the Pacific Region remained dreadful for most of the year, with
recessions in virtually all major economies. Lately, there have been signs that
conditions are at least not getting any worse, and the Chinese economy has
continued to move forward, helping to support the rest of the region.
Considerable problems still remain, but it may be that the worst is now behind
us. In recent months, stock markets have recovered quite strongly, particularly
in Thailand and South Korea. There have also been signs of stabilization in
currency markets.
EMERGING MARKETS (EX-PACIFIC)
In the early part of the year, both Latin America and emerging European markets
held up reasonably well, but as the depth of the Russian crisis became apparent,
most of these markets fell sharply. Growth everywhere is slowing down,
particularly in Latin America.
SUMMARY
Overall, world economic growth has slowed steadily throughout the year and
forecasts for next year suggest growth in the Organization for Economic
Cooperation and Development (OECD) is likely to be the weakest in many years.
This will negatively impact profits at a time when stock market valuations are
still high. It does appear that Western authorities have realized the
seriousness of the situation. There has been a significant lowering of interest
rates almost everywhere in the last three months. However, inflation continues
to decline virtually everywhere and the worry now is that lower inflation may
turn into deflation.
Cuts in interest rates should keep the world economy out of global recession
next year, but there remain considerable risks on the downside. Stock markets
have recovered from their worst position, but confidence remains fragile.
Provided the authorities stay vigilant, stock markets can make some progress
next year, but the route may be challenging. Please note, all stock market
returns quoted in the following Investment Reports are in US dollar terms.
2
<PAGE>
INVESTMENT REPORT
SELIGMAN HENDERSON INTERNATIONAL FUND
PERFORMANCE REVIEW
The year ended October 31, 1998, was characterized by great volatility. In the
first half of the year, international equity markets went from strength to
strength, reaching record highs during the month of July. It then became evident
that the effects of the Asian economic crisis were finally beginning to be felt
around the world, and equities sold off on fears of a global crisis. However,
this setback did not last long, and stock markets around the globe rallied
sharply from their low point on October 5, 1998, as world leaders worked quickly
to avert the crisis and restore confidence by lowering interest rates.
Within this context, the Fund posted a 6.51% total return for the year based on
the net asset value of Class A shares, outpacing the 3.99% total return of its
peer group, as measured by the Lipper International Funds Average. The return of
the Fund's benchmark, the Morgan Stanley Capital International Europe,
Australasia, Far East (MSCI EAFE) Index, was 9.95% for the same period.
PORTFOLIO STRATEGY
UNITED KINGDOM
o The UK followed the fortunes of the rest of world markets over the period,
falling dramatically following July highs, but ending the Fund's fiscal year
on a better note. As in other regions, banks were negatively impacted and
concerns about exposure to emerging market debt arose over the sector as a
whole. There has been a period of earnings downgrades and profit warnings
across the board. Economic data reported in October added to the gloomy
picture, indicating that the UK economy is slowing.
THROUGHOUT THE YEAR, THE FUND MAINTAINED A BENCHMARK-NEUTRAL WEIGHTING IN THE
UK AS WE VIEWED THE UK AS A DEFENSIVE ALTERNATIVE COMPARED TO THE REST OF THE
WORLD. THIS MARKET HAS HELD UP RELATIVELY WELL, CONSIDERING THE TURMOIL AND
VOLATILITY IN WORLD MARKETS. WHILE THE ECONOMY HAS RECENTLY BEGUN TO SLOW,
THERE HAS BEEN A CUT IN INTEREST RATES, WITH FURTHER RATE CUTS EXPECTED. THIS
FITS IN WITH THE PREDICTED "SOFT LANDING" SCENARIO, RATHER THAN A HARSH FALL
INTO RECESSION.
CONTINENTAL EUROPE
o In Continental Europe, markets have fallen from previous highs, but still
ended the year up an impressive 27%. Economic growth for the region, though
dented, should still prove the most resilient in the world. Although
expectations for earnings have been revised lower, the many positive trends
that have made Continental Europe an attractive equity environment are still
intact and should produce strong gains over the next twelve months. European
Monetary Union (EMU) will begin in January 1999 and will result in lower
interest rates and low inflation. In addition, the pace of corporate
restructuring should not slow as companies strive to boost profitability and
shareholder returns.
THE FUND WAS OVERWEIGHTED IN THE CONTINENTAL EUROPEAN EQUITY MARKETS DURING THE
PAST YEAR. LOWER INTEREST RATES, CORPORATE RESTRUCTURING, THE ANTICIPATION OF
[PHOTO OMITTED]
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.
3
<PAGE>
EMU, AND STRONG FORECASTED EARNINGS GROWTH HELPED TO LIFT STOCK PRICES HIGHER
IN THE FIRST HALF OF 1998, OUTPERFORMING MOST OTHER REGIONAL MARKETS.
DESPITE THE RECENT GLOBAL EQUITY MARKET CORRECTION, THE FUND WILL LIKELY
MAINTAIN ITS REGIONAL OVERWEIGHTING AS WE ANTICIPATE FURTHER STRONG GAINS IN
TELECOMMUNICATIONS, FINANCIALS (ESPECIALLY INSURERS), UTILITIES, AND
RETAILING.
JAPAN
o The Japanese market finished the year down 14.3% in US dollar terms, due
mainly to fears about the economy and the ailing banking system. Economic
data provided supporting evidence that the economy is in fact in a period of
recession. Following the resignation of Prime Minister Hashimoto in July,
there was a period of optimism that the new premier, Mr. Obuchi, would
implement the necessary changes to stimulate the economy and to restructure
the ailing financial system. However, this enthusiasm proved short lived as
the government has failed thus far to deliver any positive policy changes.
THE FUND MAINTAINED A LOW WEIGHTING IN JAPAN THROUGHOUT THE YEAR AS WE DID
NOT ANTICIPATE ANY ECONOMIC RECOVERY IN THE NEAR TERM. WE DO NOT EXPECT A
SPEEDY SOLUTION TO THE BANKING CRISIS NOR SUFFICIENT FISCAL STIMULUS TO BOOST
THE ECONOMY, AND BELIEVE THAT SIGNIFICANT RISKS FOR THE JAPANESE STOCK MARKET
REMAIN. UNTIL CLEARER EVIDENCE THAT THE CONDITION OF THE JAPANESE ECONOMY IS
IMPROVING, WE WILL REMAIN CAUTIOUS.
PACIFIC
o The Pacific Basin ended the year down, with markets across the region
declining 13.7% on average. However, the region had a reversal of fortunes in
the last few months due to the Hong Kong government's decision to intervene
in its stock market, which had the effect of artificially inflating prices.
Other countries such as Malaysia and Indonesia have continued to underperform
dramatically and remain extremely unstable. The protectionism that started in
Malaysia threatens the region with potential isolation. The continuing
recession in Japan is also preventing the region from exporting its way out
of trouble.
SINCE JUNE 1997, THE FUND HAS BEEN SIGNIFICANTLY UNDERWEIGHT IN THE PACIFIC
REGION. THE ECONOMIC CRISIS EXACERBATED THE PRESSURES TO DEVALUE CURRENCIES
THROUGHOUT THE REGION, ULTIMATELY HAVING AN IMPACT ON THE EQUITY MARKETS OF
DEVELOPED COUNTRIES BEGINNING IN JULY 1997. WITH LESS RISKY INVESTMENT
OPPORTUNITIES AVAILABLE IN RELATIVELY MORE STABLE AREAS OF THE WORLD, WE
MAINTAINED A MINIMAL EXPOSURE LEVEL TO PACIFIC MARKETS THROUGHOUT THE PAST
YEAR, AND EXPECT TO REMAIN UNDERWEIGHT IN THE NEAR TERM.
EMERGING MARKETS
o Emerging markets suffered badly from a background of sliding commodity prices
and slowing global economic growth. In addition, Russia's devaluation and
credit default have weighed heavily on investor sentiment. Elsewhere, there
was a loss of confidence in the Brazilian government's ability to solve its
fiscal problems. This led to capital outflows and fear of devaluation. Our
view is that the international assistance package for Brazil should begin to
restore investor confidence, allowing for a recovery. We have, therefore,
decided to maintain a modest exposure to the most established companies in
selected emerging markets where valuations are attractive and at historic
lows.
DURING THE COURSE OF THE YEAR, THE FUND'S HOLDINGS IN EMERGING MARKETS
TYPICALLY RANGED BETWEEN 5% AND 10% OF TOTAL ASSETS. THE FUND'S EXPOSURE WAS
PRIMARILY IN EASTERN/CENTRAL EUROPEAN AND LATIN AMERICAN COUNTRIES.
INVESTMENTS IN EMERGING MARKETS WERE FOCUSED ON HIGHER-QUALITY, MORE LIQUID
NAMES, RATHER THAN LESS LIQUID SMALLER-CAP ISSUES AND INVESTMENTS IN THE
"FRONTIER"COUNTRY MARKETS.
OUTLOOK
The outlook for global stock markets continues to be positive as interest-rate
reductions and efforts to prevent any further spreading of the financial crises
to Latin America have boosted investor sentiment. But despite these
improvements, risks remain and markets must anticipate slower economic and
corporate profit growth. Within this context, we expect that Continental Europe,
the UK, and select emerging markets may offer attractive return potential, as we
believe that corporate earnings growth has the potential to be greatest in these
regions. While we expect the economies of Japan and the Pacific region to remain
depressed over the next few months, we believe both regions could improve
significantly over the longer term.
4
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON INTERNATIONAL FUND
COUNTRY ALLOCATION
OCTOBER 31, 1998
MSCI
EAFE
FUND INDEX
------- -------
CONTINENTAL EUROPE ....................... 61.03% 50.55%
Austria .............................. -- 0.35
Belgium .............................. -- 1.87
Denmark .............................. 1.34 0.94
Finland .............................. -- 1.16
France ............................... 12.75 9.46
Germany .............................. 7.98 10.45
Greece ............................... 1.34 --
Hungary .............................. 2.14 --
Ireland .............................. 1.41 0.48
Italy ................................ 6.86 4.80
Netherlands .......................... 6.45 5.41
Norway ............................... -- 0.48
Portugal ............................. 1.47 0.74
Spain ................................ 6.81 3.38
Sweden ............................... 3.02 2.76
Switzerland .......................... 9.46 8.27
JAPAN .................................... 8.45 21.53
LATIN AMERICA ............................ 1.28 --
Brazil ............................... 0.33 --
Mexico ............................... 0.95 --
PACIFIC .................................. 1.23 5.94
Australia ............................ 1.14 2.71
Hong Kong ............................ -- 2.36
New Zealand .......................... -- 0.19
Singapore ............................ -- 0.68
South Korea .......................... 0.09 --
UNITED KINGDOM ........................... 20.55 21.98
OTHER ASSETS LESS LIABILITIES ............ 7.46 --
--------- ---------
TOTAL 100.00% 100.00%
========= =========
LARGEST INDUSTRIES
OCTOBER 31, 1998
[The following represents a bar chart in the original]
BANKING 12.6 $11,533,271
TELECOMMUNICATIONS 11.5 10,486,347
RETAILING 8.7 7,926,082
INSURANCE 7.5 6,891,915
CONSUMER PRODUCTS 7.5 6,872,722
REGIONAL ALLOCATION
OCTOBER 31, 1998
[The following represents a pie chart in the original]
Continental Europe .............. 61.03%
United Kingdom .................. 20.55%
Japan ........................... 8.45%
Latin America ................... 1.28%
Pacific ......................... 1.23%
Other Assets Less Liabilities ... 7.46%
LARGEST PORTFOLIO HOLDINGS
OCTOBER 31, 1998
SECURITY VALUE
- ---------- --------------
Magyar Tavkozlesi "Matav"
(ADRs) (Hungary) ................... $1,956,500
Vivendi (France) ...................... 1,837,397
Novartis (Switzerland) ................ 1,735,248
Railtrack Group
(United Kingdom) ................... 1,713,150
Zurich Allied (Switzerland) ........... 1,712,629
Lafarge (France) ...................... 1,662,229
Roche Holding (Switzerland) ........... 1,636,942
Benckiser (Series B) (Netherlands) .... 1,636,255
AXA-UAP (France) ...................... 1,619,239
Nestle (Switzerland) .................. 1,562,229
5
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON INTERNATIONAL FUND
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
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 (15.15)% 1.46% 6.12% 9.34% n/a n/a
Without Sales Charge (10.94) 6.51 7.16 10.15 n/a n/a
CLASS B**
With CDSC+ (15.75) 0.62 n/a n/a 3.00% n/a
Without CDSC (11.32) 5.51 n/a n/a 4.10 n/a
CLASS D**
With 1% CDSC (12.20) 4.53 n/a n/a n/a n/a
Without CDSC (11.32) 5.51 6.29 n/a n/a 7.12%
LIPPER INTERNATIONAL
FUNDS AVERAGE*** (10.47) 3.99 7.02 10.11++ 5.440 7.8400
MSCI EAFE INDEX*** (4.88) 9.95 7.11 10.36+++ 4.910 7.6400
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE
OCTOBER 31, 1998 APRIL 30, 1998 OCTOBER 31, 1997
------------------ --------------- ------------------
<S> <C> <C> <C>
CLASS A $17.75 $19.93 $17.92
CLASS B 16.93 19.09 17.30
CLASS D 16.93 19.09 17.30
</TABLE>
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1998
PAID $1.222
REALIZED 0.316
UNREALIZED 2.764000
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 lessthan 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 for Class B
shares are calculated with and without the effect of the maximum 5%
contingent deferred sales charge ("CDSC"), 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% CDSC, 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 CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 9, 1992.
+++ From March 31, 1992.
0 From April 30, 1996.
00 From September 30, 1993.
000 Represents the per share amount of net unrealized appreciation of portfolio
securities as of October 31, 1998.
6
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
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, and assumes that all distributions within the period are
invested in additional shares, since the commencement of investment operations
on April 7, 1992, through October 31, 1998, 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 (MSCI EAFE Index) for
the same period. It is important to keep in mind that indices and averages
exclude the effect of fees and/or sales charges.
Class Class
A A Lipper
With Without MSCI Intl
Sales Sales EAF Fds
Load Load Index Avg.
----- ----- ----- -----
4/7/92 9524 10000 10000 10000
4/30/92 9635 10117 10050 10483
3/31/92 9524 10000 10000 10000
4/30/92 9635 10117 10050 10483
7/31/92 9444 9917 9962 10328
10/31/92 9437 9908 9843 9875
1/31/93 9662 10145 9995 10099
4/30/93 11270 11833 12267 11459
7/31/93 11445 12017 12771 11826
10/31/93 12718 13354 13572 12995
1/31/94 14012 14712 14412 14473
4/30/94 13646 14329 14346 13874
7/31/94 13971 14670 14613 14063
10/31/94 14353 15071 14980 14388
1/31/95 12724 13361 13808 12890
4/30/95 13530 14207 15189 13765
7/31/95 14438 15160 15675 14632
10/31/95 14175 14884 14970 14286
1/31/96 15146 15903 16084 15205
4/30/96 15916 16712 16973 16025
7/31/96 15173 15932 16277 15506
10/31/96 15370 16138 16588 15929
1/31/97 15845 16637 16442 16635
4/30/97 16278 17092 16873 16952
7/31/97 18605 19535 19281 19325
10/31/97 16881 17725 17403 17593
1/31/98 17331 18197 18183 17996
4/30/98 20187 21196 20110 20444
7/31/98 20785 21824 20381 20608
10/31/98 17979 18878 19128 18299
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, 1998
Shares
----------------------------
HOLdings
Additions Increase 10/31/98
- ----------- ----------- -----------
Castorama Dubois
Investissements (France) 6,000 6,000
Corporacion Bancaria
de Espana (Spain) 60,570 60,570
DaimlerChrysler (Germany) 14,494 14,494
Lloyds TSB Group
(United Kingdom) 71,000 71,000
Nestle (Switzerland) 523 733
Roche Holding
(Switzerland) 140 140
RWE (Germany) 24,583 24,583
Suez Lyonnaise
des Eaux (France) 7,272 7,272
Total (France) 10,965 10,965
Unilever (Netherlands) 17,330 17,330
Shares
----------------------------
Holdings
REDUCTIONS Decrease 10/31/98
- ------------- ----------- -----------
Akzo Nobel
(Netherlands) 22,372(1) --
Astra (Class A) (Sweden) 66,829 --
Banco Bilbao Vizcaya
(Spain) 83,133(2) --
Bayer (Germany) 25,418 --
Carrefour Supermarche
(France) 1,924 --
Credit Communal Holding/
Dexia (Belgium) 7,245 --
CS Holdings (Switzerland) 8,503 --
Lufthansa (Germany) 56,466 --
Mol Magyar Olaj-es Gazipari
(GDRs) (Hungary) 58,600 --
Petroleo Brasileiro
"Petrobras" (ADRs) (Brazil) 55,770 --
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 16,779 shares received as a result of a 4-for-1 stock split.
(2) Includes 55,422 shares received as a result of a 3-for-1 stock split.
7
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson International Fund
SHARES VALUE
------ -----
COMMON STOCKS 92.26%
AUSTRALIA 1.14%
COLONIAL
Provider of financial services in
banking, retail insurance, and
investments (Financial Services) 68,000 $ 549,970
RIO TINTO
International mining company
(Metals) 4,000 50,002
TELSTRA
Provider of telecommunication
services (Telecommunications) 25,500 72,537
WESTPAC BANKING
Provider of banking services
(Banking) 60,700 368,837
-----------
1,041,346
-----------
BRAZIL 0.33%
TELECOMUNICACOES BRASILEIRAS
"TELEBRAS" (ADRS)
Provider of telecommunication
services (Telecommunications) 4,000 303,750
-----------
DENMARK 1.34%
TELE DANMARK
Provider of telecommunication
services and equipment
(Telecommunications) 11,228 1,224,081
-----------
FRANCE 12.75%
ACCOR
Hotel operator and provider
of related services
(Entertainment and Leisure) 5,029 1,057,830
AXA-UAP
Provider of insurance and
financial services (Insurance) 14,305 1,619,239
CASTORAMA DUBOIS INVESTISSEMENTS
Operator of do-it-yourself
retail stores (Retailing) 6,000 1,071,738
ELF AQUITAINE
Oil and gas exploration;
manufacturer of chemical
compounds (Resources) 11,990 1,389,612
ETAM DEVELOPPEMENT
Retailer of women's clothing
and intimate apparel (Retailing) 8,869 447,606
LAFARGE
Producer and seller of
building materials
(Construction and Property) 16,236 $ 1,662,229
SUEZ LYONNAISE DES EAUX
Financial group which supports
the communication, electric,
waste management, and
water industries (Construction
and Property) 7,272 1,304,189
TOTAL
Worldwide operator of gas
and oil (Resources) 10,965 1,266,865
VIVENDI
Water purification and
distribution; energy production
(Industrial Goods and Services) 8,033 1,837,397
-----------
11,656,705
-----------
GERMANY 7.98%
ADIDAS-SALOMON
Manufacturer and marketer of
sporting goods (Retailing) 8,695 1,056,648
BAYERISCHE HYPO-UND VEREINSBANK
Provider of universal banking
services (Banking) 17,331 1,383,127
DAIMLERCHRYSLER*
International designer,
manufacturer, and marketer
of luxury automobiles, trucks,
and other vehicles; provider of
telecommunication, aerospace,
and financial services
(Automotive and Related) 14,494 1,140,942
MANNESMANN
Plant and machinery
construction; automotive
technology (Industrial Goods
and Services) 15,332 1,486,852
RWE
Worldwide operator of services
in the chemicals, construction
and civil engineering, energy,
mechanical and plant engineering,
mining, petroleum, raw materials,
and waste disposal sectors
(Resources) 24,583 1,322,785
8
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson International Fund
SHARES VALUE
------ -----
SIEMENS
International provider of
automotive and computer
products (Manufacturing) 14,904 $ 906,495
----------
7,296,849
----------
GREECE 1.34%
HELLENIC TELECOMMUNICATION
ORGANIZATION
Provider of telecommunication
services (Telecommunications) 24,500 557,372
NATIONAL BANK OF GREECE (GDRS)+
Provider of banking and
financial services (Banking) 23,780 671,785
----------
1,229,157
----------
HUNGARY 2.14%
MAGYAR TAVKOZLESI "MATAV" (ADRS)
Provider of telecommunication
services (Telecommunications) 72,800 1,956,500
----------
IRELAND 1.41%
BANK OF IRELAND
Provider of banking
services (Banking) 70,000 1,289,766
----------
ITALY 6.86%
BANCA POPOLARE DI BRESCI
Provider of commercial banking
and financial services (Banking) 52,578 1,239,774
ENI
Refiner and marketer of oil
and gas (Resources) 195,910 1,166,843
ISTITUTO NAZIONALE DELLE
ASSICURAZIONI
Provider of life and non-life
insurance products (Insurance) 566,314 1,561,947
TELECOM ITALIA
PROVIDER OF TELECOMMUNICATION
services (Telecommunications) 289,001 1,458,246
UNICREDITO ITALIANO
Provider of banking services
(Banking) 156,950 843,714
----------
6,270,524
----------
SHARES VALUE
------ -----
JAPAN 8.17%
BENESSE
Provider of educational
services (Business Services) 4,300 $ 197,765
BRIDGESTONE
Retailer of automobile
tires (Automotive and Related) 14,000 308,704
CANON
Manufacturer of printers and
photocopiers (Business Services) 15,000 284,333
CREDIT SAISON
Provider of
financial services
(Financial Services) 12,000 283,172
DENNY'S JAPAN
Restaurant operator (Restaurants) 6,000 138,491
EAST JAPAN RAILWAY
Provider of railway services
(Transportation) 61 362,355
FUJI MACHINE MANUFACTURING
Manufacturer of assembly
machines and chips for the
electronic industry
(Industrial Goods and
Services) 10,000 294,864
FUJITSU SUPPORT AND SERVICE
Electronic and communication
equipment dealer
(Business Services) 8,000 402,321
HONDA MOTOR
International operator of
motorcycles, automobiles, and
power products (Automotive and Related) 10,000 300,881
JAPAN TOBACCO
Tobacco producer (Tobacco) 38 319,158
KAO
Manufacturer of cosmetics
and personal care products
(Consumer Products) 22,000 446,336
KAWASAKI HEAVY INDUSTRIES
Producer of transport
equipment and heavy
machinery for the military
(Industrial Goods and Services) 111,000 243,327
MITSUBISHI GAS CHEMICAL
Chemical producer
(Chemicals) 112,000 293,660
- -------------------------
See footnotes on page 12.
9
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson International Fund
JAPAN (continued)
SHARES VALUE
------ -----
MITSUI
Trading company active in
the chemical, food, gas, metals,
steel, and textiles industries
(Industrial Goods and Services) 39,000 $ 208,536
MITSUI CHEMICALS
Producer of petrochemical
products (Chemicals) 84,000 261,406
MITSUI FUDOSAN
Provider of real estate, and
operator of fitness centers
and leisure facilities
(Construction and Property) 36,000 239,536
NEC
Manufacturer and marketer
of computers and
telecommunication devices
(Consumer Products) 48,000 356,106
NIPPON TELEGRAPH & TELEPHONE
Provider of telecommunication
services (Telecommunications) 3,900 305,764
NTT DATA
Provider of data communication
and system development services
(Telecommunications) 64 271,240
NTT Mobile Communication Network
"NTTDoCoMo"
Provider of telecommunication
services (Telecommunications) 1,100 398,109
ROHM
Producer of custom linear
integrated circuits (Electronics) 2,000 177,090
SECOM
Security services pioneer
(Retailing) 3,000 223,082
SHOHKOH FUND
Provider of loans to small-
and mid-sized companies
(Financial Services) 1,100 335,225
SONY
Developer and manufacturer of
audio and video equipment
(Consumer Products) 4,800 305,351
TAKEFUJI
Provider of consumer financial
services (Financial Services) 6,000 $ 320,309
YORK-BENIMARU
Supermarket chain operator
(Retailing) 6,600 190,638
-----------
7,467,759
-----------
MEXICO 0.95%
FOMENTO ECONOMICO MEXICANO
(ADRS)
Beverage and packaging
producer; retail store operator
(Consumer Products) 21,000 547,313
GRUPO TELEVISA (GDRS)*
Provider of television and
other media services
(Entertainment and Leisure) 11,700 317,363
-----------
864,676
-----------
NETHERLANDS 6.45%
BENCKISER (SERIES B)
Producer and supplier of
household cleaning products
(Consumer Products) 28,833 1,636,255
ING Groep
Worldwide underwriter of
reinsurance; provider of
financial and consumer
credit (Insurance) 23,539 1,140,306
KONINKLIJKE AHOLD
Distributor and marketer of
food products (Retailing) 31,894 1,061,367
KONINKLIJKE (ROYAL) PHILIPS
ELECTRONICS
Consumer and industrial
electronics (Electronics) 14,486 771,614
UNILEVER
International manufacturer of
personal care products
(Consumer Products) 17,330 1,287,143
-----------
5,896,685
-----------
PORTUGAL 1.47%
BANCO PORTUGUES DO ATLANTICO*
Commercial bank services
provider (Banking) 2,671 53,309
- -------------------------
See footnotes on page 12.
10
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson International Fund
PORTUGAL (continued)
SHARES VALUE
------ -----
ELECTRICIDADE DE PORTUGAL
Generator and distributor
of electricity (Utilities) 51,688 $ 1,293,980
-----------
1,347,289
-----------
SOUTH KOREA 0.09%
SAMSUNG ELECTRONICS
Manufacturer of consumer
and industrial electronics and
semiconductors (Electronics) 2,014 82,422
-----------
SPAIN 6.81%
ACTIVIDADES DE CONSTRUCCION
Y SERVICIOS
Designer and builder of public
works projects, residential
homes, and other buildings
(Construction and Property) 37,174 1,188,373
CENTROS COMERCIALES
CONTINENTE
Hypermarket chain selling
groceries, kitchen appliances,
auto accessories, and clothing
(Retailing) 38,203 1,141,118
CORPORACION BANCARIA DE ESPANA
Provider of commercial
banking services in
Europe (Banking) 60,570 1,320,298
ENDESA
Producer, transmitter, and
distributor of electricity
to other utilities
(Utilities) 40,589 1,024,756
TELEFONICA DE ESPANA
Provider of telecommunication
services (Telecommunications) 34,295 1,551,214
-----------
6,225,759
-----------
SWEDEN 3.02%
L.M. ERICSSON TELEFON (SERIES B)
Manufacturer of
telecommunication equip-
ment (Telecommunications) 59,795 1,350,173
NORDBANKEN HOLDING
Provider of banking, financial,
loan, and insurance services
(Banking) 234,937 1,410,617
-----------
2,760,790
-----------
SWITZERLAND 9.46%
NESTLE
Producer of consumer packaged
goods (Consumer Products) 733 $ 1,562,229
NOVARTIS
Manufacturer of pharmaceuticals
(Health and Household) 961 1,735,248
ROCHE HOLDING
Pharmaceutical
company and chemical
producer (Health and Household) 140 1,636,942
SWISSCOM*
Provider of telecommunication
networks and services
(Telecommunications) 3,054 1,037,361
UBS
Global provider of institutional
asset management and private
banking services (Banking) 3,530 970,469
ZURICH ALLIED
Holding company active in
life insurance and asset
management (Insurance) 2,812 1,712,629
-----------
8,654,878
-----------
UNITED KINGDOM 20.55%
ALLIED ZURICH*
Holding company active in life
insurance and asset management
(Insurance) 72,500 857,794
BBA GROUP
International manufacturer of
textiles and aviation
equipment (Diversified) 80,000 494,687
BOOTS
Retailer of pharmaceuticals
and beauty products
(Retailing) 50,000 754,749
BRITISH AMERICAN TOBACCO
Producer and marketer of
tobacco products (Tobacco) 72,500 647,289
BRITISH PETROLEUM
Oil producer, refiner, and
distributor (Resources) 90,734 1,338,499
- -------------------------
See footnotes on page 12.
11
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson International Fund
SHARES VALUE
------ -----
UNITED KINGDOM (CONTINUED)
BRITISH VITA
Holding company for worldwide
companies which manufacture
fabrics for the furnishing,
transportation, clothing,
packaging, and engineering
industries (Chemicals) 170,000 $ 674,253
BUNZL
Distributor and manufacturer of
paper and plastic products
(Manufacturing) 225,000 1,039,244
GRANADA GROUP
Television group with additional
leisure interests, including
hotels (Entertainment and
Leisure) 94,000 1,430,725
KINGFISHER
Producer and retailer of consumer
goods and merchandise (Retailing) 87,400 762,035
LLOYDS TSB GROUP
Provider of banking and financial
services (Banking) 71,000 878,069
MERSEY DOCKS & HARBOUR
Operator of facilities on the
Mersey River (Transportation) 90,000 670,237
NATIONAL POWER
Electric power generation
(Utilities) 110,000 953,560
RAILTRACK GROUP
Provider of rail services
(Transportation) 64,101 1,713,150
ROLLS ROYCE
Aerospace; power generation,
transmission, and distribution
systems (Industrial Goods and
Services) 170,600 633,808
ROYAL BANK OF SCOTLAND
Provider of banking services
(Banking) 84,000 1,103,506
UNITED KINGDOM (continued)
SCOTTISH & NEWCASTLE
Brewery operator (Consumer
Products) 60,000 shs.$ 731,989
SMITHKLINE BEECHAM
Manufacturer and marketer of
pharmaceutical products; provider
of health care products and
services (Health and Household) 50,000 616,266
TESCO
Supermarket chain (Retailing) 445,500 1,217,101
UNITED UTILITIES
Provider of water utility
services (Utilities) 90,000 1,315,622
WPP GROUP
Provider of worldwide marketing
services, including advertising,
public relations, and market
research (Media) 195,500 958,606
--------------
18,791,189
--------------
TOTAL COMMON STOCKS
(Cost $69,802,205) 84,360,125
CONVERTIBLE BONDS 0.28%
(Cost $221,126)
JAPAN 0.28%
SANWA INTERNATIONAL
11 1/4%, 7/31/2005
(Financial Services) 39,000,000** 258,994
--------------
TOTAL INVESTMENTS 92.54%
(Cost $70,023,331) 84,619,119
OTHER ASSETS
LESS LIABILITIES 7.46% 6,822,213
--------------
NET ASSETS 100.00% $91,441,332
==============
- -------------------------
* Non-income producing security.
** Principal amount reported in Japanese yen.
+ 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
Emerging markets suffered from the effects of a series of currency crises and
associated global contagion. Over the year as a whole, the Fund had a total
return of -29.43% based on the net asset value of Class A shares. This compares
to a -30.98% total return posted by the Morgan Stanley Capital International
Emerging Markets Free Index and to the -31.48% total return posted by the Lipper
Emerging Markets Funds Average.
Fund management was more challenging than usual. The strategy consisted of
trying to avoid investments in markets with weak currencies, while increasing
cash levels during periods of global uncertainty, particularly in November -
December 1997, and August - September 1998. High levels of cash held during the
attack on the Brazilian real were reinvested in the markets in October after
confidence was, to some extent, restored through US interest-rate cuts, the
strengthening of the yen, and supportive statements from the leadership of the
G7 group of industrialized countries.
PORTFOLIO STRATEGY
In regional terms, there were a number of significant trends. The Fund's
overweight position in Emerging Europe was maintained throughout the year,
although exposure to Russia was greatly reduced. Exposure to Far Eastern markets
was increased over the year, but exposure to Latin America was reduced largely
due to economic uncertainty in Brazil.
PACIFIC REGION
o The devaluation of the Thai baht in July 1997 greatly affected the markets of
the South Pacific region (Thailand, the Philippines, Malaysia, and
Indonesia). Sentiment in the markets remained weak during the latter months
of 1997 as currency instability moved to North Pacific markets. The
Indonesian currency came under attack in January 1998. There was a brief
rally in currencies and markets in the first quarter of 1998, but the
Malaysian government was forced to introduce currency controls in September.
Other than in the Malaysian ringit, there was a rally in currencies toward
the end of the Fund's year. Market performances ranged between a fall of 8.7%
in the Philippine index to a fall of 76.8% in the Indonesian index.
THE FUND RETAINED HOLDINGS IN THAILAND AND THE PHILIPPINES THROUGHOUT THE
PERIOD. A SMALL NUMBER OF HOLDINGS WERE HELD IN MALAYSIA DURING THE FIRST
QUARTER OF THE YEAR BUT THESE WERE SOLD BEFORE THE IMPOSITION OF CURRENCY
CONTROLS. TOWARD THE END OF THE FUND'S YEAR, THE FUND ESTABLISHED HOLDINGS IN
Thai Farmers Bank AND Bangkok Bank AS THE OUTLOOK FOR THAILAND IMPROVED.
o In the North Pacific region, the direction of the markets was dictated by
currency moves. The attack on the Hong Kong dollar in November 1997 was
followed by the South Korean currency crisis later in December. The Taiwanese
market, following the effective floating of the currency in October, remained
relatively untouched by the crisis. The Taiwanese index fell 14.9%, the South
Korean index fell 24.5%, and the China (non-domestic) index fell 52.8%.
THE FUND HELD FEW POSITIONS IN THE REGION UNTIL SEPTEMBER, WHEN THERE WERE
SIGNIFICANT ADDITIONS TO THE PORTFOLIO. IN CHINA, THE PORTFOLIO REMAINS
FOCUSED ON INFRASTRUCTURE. WE HAVE PURCHASED China Telecom, Cheung Kong
Infrastructure, AND China Resources Enterprise. IN SOUTH KOREA, WE SOLD OUR
HOLDING IN Samsung Electronics AND PURCHASED SK Telecom Group AND Korea
Electric Power. IN TAIWAN, OUR HOLDINGS REMAINED FOCUSED ON BROADLY BASED
CLOSED-END FUNDS.
INTERNATIONAL TEAM: MONICA BALL, PETER BASSETT (PORTFOLIO MANAGER), ELEANOR
DALE, CHRISTOPHER EDWARDS, DIVYA MATHUR, KIRSTEEN MORRISON, LOUISE O'SULLIVAN,
SHEILA SPARKS (ADMINISTRATIVE ASSISTANT)
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 markets remained volatile with attacks on the Brazilian real
in November - December 1997, and September 1998. However, both the Brazilian
real and Argentine peso were successfully defended. The region's markets
rebounded after the mid-September promise of G7 and IMF support for the
defense of the real. Throughout the year, the Mexican currency also suffered
periods of instability, and domestic interest rates were put up in its
defense. The performances for the indices of the major markets were as
follows: Argentina fell 12.1%, Mexico fell 21.0%, and Brazil fell 34.1%.
OUR CORE EXPOSURE IN LATIN AMERICA REMAINS MEXICO, WHERE THE DEFENSIVELY
POSITIONED HOLDINGS FOCUS ON BREWERIES (Femsa), BOTTLERS (Pepsi-Gemex AND
Panamerican Beverages), AND TELECOMMUNICATIONS (Telemex AND Grupo Iusacell).
HOLDINGS IN BRAZIL AND ARGENTINA WERE ADJUSTED FOR THE OUTLOOK FOR THEIR
CURRENCIES. IN PARTICULAR, WE SOLD BRAZILIAN COMPANIES WITH US DOLLAR
EXPOSURE SUCH AS CEMIG AND Sabesp. HOWEVER, WE RETAINED OUR CORE HOLDINGS OF
Telebras AND Petrobras.
EMERGING EUROPE
o The Emerging European region produced significantly diverse performances,
largely dependent on the currency and interest-rate events for the year.
Greece, which joined the European monetary system during the year in
preparation to joining European Monetary Union (EMU), benefited from currency
stability and falling interest rates. The Greek market rose 33.8%. Portugal,
which joins EMU on January 1, 1999, experienced similar beneficial effects,
rising 35.4%.
By contrast, the Russian market was hit by a severe internal budget deficit
which led to the collapse of the rouble and the replacement of a reformist
government with a government led by former communists. The Russian index fell
by 85.2%. The overall negative sentiment toward emerging markets caused other
emerging European markets to suffer in varying degrees. Hungary fell 7.5%,
the Czech Republic fell 10.2%, and Poland fell 16.2%. Turkey, affected by
high interest rates and political uncertainty, fell 50.7%.
THE KEY PORTFOLIO MOVE IN THE REGION WAS AN INCREASE TO THE GREEK WEIGHTING
THROUGH THE PURCHASE OF Alpha Credit Bank, Hellenic Telecommunication (OTE),
AND Sarantis. MOST HOLDINGS IN RUSSIA WERE SOLD FOLLOWING THE MARKED
DETERIORATION OF THE ECONOMIC AND POLITICAL OUTLOOK AND THE REMAINDER WERE
SOLD AFTER THE FUND'S YEAR END. ALL HOLDINGS IN PORTUGAL WILL BE SOLD BEFORE
THE COUNTRY JOINS EMU. OF NOTE DURING THE YEAR WAS THE INCREASED WEIGHTING OF
THE FUND INTO BOTH POLAND AND HUNGARY WITH THE PURCHASE OF Elektrim, Matav,
Powszechny Bank, AND Prokom Software, AND THE RE-ENTRY INTO THE CZECH
REPUBLIC WITH THE PURCHASE OF Ceske Radiokomunikace.
OTHER MARKETS
o Other markets in which the Fund has been invested were affected by the
general pressures on emerging markets. The Indian market fell 34.2% and the
South African market fell 25.4%. Within the markets of the Middle East and
North Africa, the Israeli (domestic) index fell 18.7% and the Egyptian index
fell 37.4%.
WE MAINTAINED LOW WEIGHTINGS IN INDIA DURING THE PERIOD, FOCUSING ON THE
SECULAR GROWTH STOCKS OF Mahangar Telephone Nigam (THE BOMBAY AND DELHI
TELEPHONE SYSTEM) AND THE Indian Tobacco Company (ITC). THE SOUTH AFRICAN
WEIGHTING WAS REDUCED BEFORE THE WEAKNESS IN SEPTEMBER BUT INCREASED IN
OCTOBER WHEN INTEREST RATES BEGAN TO EASE, WITH PURCHASES OF Nedcor (A BANK)
AND Pepkor (A RETAILER). OUR ISRAELI EXPOSURE WAS SWITCHED FROM TECHNOLOGY
SECTOR HOLDINGS TO Bank Hapoalim AND Blue Square (A SUPERMARKET). WITHIN THE
EGYPTIAN PORTFOLIO, WE ADDED Al-ahram Beverages (A BREWERY AND BOTTLING
COMPANY).
OUTLOOK
Following the supportive statements of the leaders of the G7 and recent policy
actions of the US and Japan on various issues, the outlook for emerging markets
is more optimistic. Moreover, there are positive developments in each of the
major regions within the Pacific, with trade surpluses likely to boost liquidity
in domestic markets and provide some stability to the currencies. In Emerging
Europe, convergence and integration is likely to continue to positively affect
Greek and Central European markets. Although economic growth will be lackluster,
Latin America is likely to benefit from lower real interest rates. Overall, the
emerging markets are likely to show some recovery in the year ahead; although
market performance will differ widely and progress is likely to be volatile.
14
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
Seligman Henderson Emerging Markets Growth Fund
COUNTRY ALLOCATION
OCTOBER 31, 1998
MSCI
EMF
FUND INDEX
------- -------
CENTRAL/SOUTHERN EUROPE 29.56% 12.12%
Czech Republic 1.68 1.17
Estonia 0.38 --
Greece 7.56 5.47
Hungary 6.46 1.40
Poland 4.15 0.98
Portugal 6.80 --
Russia -- 1.24
Turkey 2.53 1.86
INDIAN SUBCONTINENT/AFRICA 18.64 24.03
Egypt 3.53 --
India 4.03 7.58
Israel 2.26 3.15
Jordan -- 0.18
Lebanon 1.23 --
Pakistan -- 0.36
South Africa 7.59 12.69
Sri Lanka -- 0.07
LATIN AMERICA 27.22 36.55
Argentina 4.82 5.26
Brazil 7.78 12.80
Chile 1.35 4.40
Columbia -- 0.56
Mexico 13.27 11.75
Peru -- 0.98
Venezuela -- 0.80
PACIFIC 18.88 27.30
China 4.80 0.76
Indonesia -- 1.15
Malaysia -- 3.65
Philippines 3.21 1.93
South Korea 2.68 6.63
Taiwan 3.64 10.67
Thailand 4.55 2.51
OTHER ASSETS LESS LIABILITIES 5.70 --
------ ------
TOTAL 100.00% 100.00%
====== ======
LARGEST INDUSTRIES
OCTOBER 31, 1998
[The table below represents a bar chart]
Percent of
Net Assets
----------
TELECOMMUNICATIONS 21.4% $11,542,415
FINANCIAL SERVICES 17.8% $9,589,521
RESOURCES 11.8% $6,378,038
RETAILING 11.1% $5,983,517
CONSUMER GOODS AND SERVICES 8.3% $4,467,970
REGIONAL ALLOCATION
OCTOBER 31, 1998
[The table below represents a pie chart]
Central/Southern Europe 29.56%
Latin America 27.22%
Pacific 18.88%
Indian Subcontinent/Africa 18.64%
Other Assets Less Liabilities 5.70%
LARGEST PORTFOLIO HOLDINGS
OCTOBER 31, 1998
SECURITY VALUE
- ---------- ------------
Telecel-Comunicacaoes Pessoais
(Portugal) $1,660,356
Magyar Tavkozlesi "Matav" (ADRs)
(Hungary) 1,478,125
Fomento Economico Mexicano "Femsa"
(ADRs) (Mexico) 1,433,437
Jeronimo Martins (Portugal) 1,347,367
Korea Electric Power (South Korea) 1,175,445
Kimberly-Clark de Mexico
(ADRs) (Mexico) 1,074,315
YPF Sociedad Anonima (ADRs)
(Argentina) 1,070,688
Petroleo Brasileiro "Petrobras"
(Brazil) 1,019,365
Panamerican Beverages
(Class A) (Mexico) 1,014,525
National Bank of Greece
(GDRs) (Greece) 1,003,440
15
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
Seligman Henderson Emerging Markets Growth Fund
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1998
AVERAGE ANNUAL
--------------------
SINCE
SIX ONE INCEPTION
MONTHS* YEAR 5/28/96
------- ------- ---------
CLASS A**
With Sales Charge (37.96)% (32.81)% (14.14)%
Without Sales Charge (34.84) (29.43) (12.39)
CLASS B**
With CDSC+ (38.32) (33.49) (14.10)
Without CDSC (35.08) (29.99) (13.02)
CLASS D**
With 1% CDSC (35.64) (30.69) n/a
Without CDSC (34.99) (29.99) (13.02)
LIPPER EMERGING MARKETS
FUNDS AVERAGE*** (34.11) (31.48) (14.67)++
MSCI EMF INDEX*** (33.41) (30.98) (19.25)+++
NET ASSET VALUE
OCTOBER 31, 1998 APRIL 30, 1998 OCTOBER 31, 1997
------------------ -------------- ----------------
CLASS A $5.18 $7.95 $7.34
CLASS B 5.09 7.84 7.27
CLASS D 5.09 7.83 7.27
CAPITAL LOSS INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1998
REALIZED $(1.831)
UNREALIZED (0.465)0
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 B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales charge ("CDSC"), 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% CDSC, 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 CDSC is 5% for periods of one year or less, and 3% since inception.
++ From May 30, 1996.
+++ From May 31, 1996.
0 Represents the per share amount of net unrealized depreciation of portfolio
securities as of October 31, 1998.
16
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
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 3% contingent deferred sales
charge ("CDSC") for Class B shares, and without the 1% CDSC for Class D shares,
and assumes that all distributions within the period are invested in additional
shares, since the commencement of operations on May 28, 1996, through October
31, 1998, 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 indices and averages exclude the effect of fees and/or sales
charges.
[The table below represents a line chart]
EMERGING MARKETS GROWTH FUND
LIPPER
Class A Class B EMERGING
With Without Class B Class D MARKET MSCI
Sales Sales With Without FUNDS EMF
Charge Charge CDSL CDSL AVERAGE INDEX
5/28/96 9520 10000 10000 10000 10000 10000
7/31/96 9013 9468 9454 9454 9483 9375
10/31/96 9040 9496 9468 9468 9557 9439
1/31/97 10173 10686 10630 10644 10736 10299
4/30/97 10653 11190 11106 11106 10963 10476
7/31/97 12453 13081 12969 12969 12378 11522
10/31/97 9787 10280 10182 10182 9939 8639
1/31/98 9173 9636 9524 9524 9057 7855
4/30/98 10600 11135 10980 10966 10336 8953
7/31/98 9000 9455 9300 9300 8486 7135
10/31/98 6907 7255 6915 7129 6810 5962
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, 1998
SHARES
----------------------
HOLDINGS
ADDITIONS INCREASE 10/31/98
- --------- -------- --------
Bank Hapoalim (Israel) 245,000 245,000
Blue Square Chain Investments
and Properties (Israel) 61,100 61,100
Coca-Cola Beverages (Poland) 342,600 342,600
Companhia Vale do Rio
Doce (ADRs) (Brazil) 60,000 60,000
Elektrim Spolka Akcyjna
(Poland) 60,000 60,000
Kimberly-Clark de Mexico
(ADRs) (Mexico) 75,000 75,000
National Bank of Greece
(GDRs) (Greece) 29,600 35,520(1)
Telesp Participacoes
(Brazil) 38,000,000 38,000,000
Turkiye Is Bankasi "Isbank"
(GDRs) (Turkey) 182,500 182,500
YPF Sociedad Anonima
(ADRs) (Argentina) 37,000 37,000
SHARES
----------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/98
- ---------- -------- --------
Distribucion y Servicio
(ADRs) (Chile) 60,700 --
Formosa Growth Fund
(Taiwan) 51,000 --
IRSA Inversiones y
Representaciones
(GDRs) (Argentina) 62,000 --
Maillis (Greece) 71,360(2) 36,640
Portugal Telecom (ADRs)
(Portugal) 24,000 --
Richter Gedeon (GDRs)
(Hungary) 13,900 4,900
Sonae Investimentos
(Portugal) 19,000 13,000
Synnex Technology
International
(GDRs) (Taiwan) 57,000 --
Telefonica de Argentina (ADRs)
(Argentina) 39,000 --
Telefonica del Peru
(ADRs) (Peru) 78,300 --
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 5,920 shares received in a 20% bonus issue.
(2) Includes 54,000 shares received in a 100% bonus issue.
17
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Emerging Markets Growth Fund
SHARES VALUE
--------- -----------
COMMON STOCKS 94.09%
ARGENTINA 4.82%
BANCO RIO DE LA PLATA (ADRS)
Provider of commercial and
investment banking services
(Financial Services) 110,000 $ 990,000
PEREZ COMPANC (ADRS)
Worldwide producer of oil
and gas (Resources) 55,000 539,159
YPF SOCIEDAD ANONIMA (ADRS)
Worldwide producer of oil
and gas (Resources) 37,000 1,070,688
-----------
2,599,847
-----------
BRAZIL 7.78%
COMPANHIA BRASILEIRO DE
DISTRIBUICAO GRUPO PAO
DE ACUCAR (ADRS)
Operator of supermarkets,
consumer electronics, and
appliance stores (Retailing) 35,000 564,375
COMPANHIA VALE DO
RIO DOCE (ADRS)
Mining and transportation
company (Resources) 60,000 905,376
PETROLEO BRASILEIRO "PETROBRAS"
Oil and gas producer and
distributor (Resources) 8,000,000 1,019,365
TELECOMUNICACOES BRASILEIRAS
"TELEBRAS" (ADRS)
Provider of telecommunication
services (Telecommunications) 11,000 835,312
TELESP PARTICIPACOES*
Provider of telecommunication
services
(Telecommunications) 38,000,000 876,016
-----------
4,200,444
-----------
CHILE 1.35%
ENERSIS (ADRS)
Provider of electric services
(Electric Utilities) 35,000 730,625
-----------
- -------------
See footnotes on page 22.
CHINA 4.80%)
CHEUNG KONG INFRASTRUCTURE
HOLDINGS
Real estate investment and
development (Construction
and Property) 240,000 $ 610,498
CHINA RESOURCES ENTERPRISE
Real estate investment
holding company
(Construction and Property) 450,000 601,395
CHINA TELECOM (HONG KONG)*
Provider of cellular
telecommunication services
(Telecommunications) 420,000 789,076
HUANENG POWER
INTERNATIONAL (ADRS)*
Developer and manufacturer
of coal-fired power plants
(Electric Utilities) 43,000 591,250
-----------
2,592,219
-----------
CZECH REPUBLIC 1.68%
CESKE RADIOKOMUNIKACE
(GDRS)*+
Provider of telecommunication
services (Telecommunications) 30,000 907,500
-----------
EGYPT 3.53%
AL-AHRAM BEVERAGES (GDRS)
Producer of beer and soft drinks
(Consumer Goods and Services) 16,400 537,098
PAINTS AND CHEMICAL INDUSTRIES
Manufacturer of industrial and
architectural paints and
printing inks (Manufacturing) 52,200 476,586
SUEZ CEMENT (GDRS)+
Cement manufacturer
(Construction and Property) 58,000 891,831
-----------
1,905,515
-----------
ESTONIA 0.38%
SOCIETIE GENERAL BALTIC
REPUBLICS FUND
Investor in the Baltic
Republics (Financial Services) 3,200 204,800
-----------
18
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Emerging Markets Growth Fund
SHARES VALUE
--------- -----------
GREECE 7.56%
ALPHA CREDIT BANK
Provider of banking services
(Financial Services) 8,000 $ 639,699
HELLENIC TELECOMMUNICATION
ORGANIZATION
Provider of telecommunication
services (Telecommunications) 30,555 695,123
MAILLIS
Producer of plastics
and packaging materials
(Manufacturing) 36,640 621,260
NATIONAL BANK OF GREECE (GDRS)+
Provider of banking services
(Financial Services) 35,520 1,003,440
SARANTIS
Manufacturer and distributor
of cosmetics
(Drugs and Health Care) 63,000 725,579
STET HELLAS TELECOMMUNICATIONS
(ADRS)+
Provider of mobile
telecommunication services
(Telecommunications) 15,000 394,688
-----------
4,079,789
-----------
HUNGARY 6.46%
MAGYAR TAVKOZLESI
"MATAV" (ADRS)
Provider of telecommunication
services (Telecommunications) 55,000 1,478,125
MOL MAGYAR OLAJ-ES
GAZIPARI (GDRS)+
Oil and gas producer and
distributor (Resources) 15,000 341,625
MOL MAGYAR OLAJ-ES
GAZIPARI (GDRS)
Oil and gas producer and
distributor (Resources) 25,000 554,375
OTP BANK (GDRS)+
Provider of commercial banking
services (Financial Services) 11,220 406,725
OTP BANK (GDRS)
Provider of commercial banking
services (Financial Services) 15,000 543,750
- -------------
See footnotes on page 22.
HUNGARY (CONTINUED)
RICHTER GEDEON (GDRS)
Manufacturer of pharmaceuticals
and cosmetics (Drugs and
Health Care) 4,900 $ 164,150
-----------
3,488,750
-----------
INDIA 4.03%
ITC (GDRS)+
Holding company with operations
in tobacco, hotels, financial
services, paper, packaging and
printing, real estate, and
international export
(Diversified) 44,000 880,000
MAHANGAR TELEPHONE
NIGAM (GDRS)+
Provider of telecommunication
services (Telecommunications) 60,000 658,500
MAHANGAR TELEPHONE
NIGAM (GDRS)
Provider of telecommunication
services (Telecommunications) 10,000 109,750
VIDESH SANCHAR NIGAM (GDRS)+
Provider of international
telecommunication services
(Telecommunications) 51,000 525,300
-----------
2,173,550
-----------
ISRAEL 2.26%
BANK HAPOALIM
Provider of banking services
(Financial Services) 245,000 441,550
BLUE SQUARE CHAIN INVESTMENTS
AND PROPERTIES*
Operator of supermarkets
(Retailing) 61,100 778,389
-----------
1,219,939
-----------
LEBANON 1.23%
BANQUE AUDI (GDRS)+
Commercial bank
(Financial Services) 24,600 664,815
-----------
MEXICO 13.27%
FOMENTO ECONOMICO
MEXICANO "FEMSA" (ADRS)
Beverage and packaging
producer; retail store operator
(Consumer Goods and Services) 55,000 1,433,437
19
<PAGE>
MEXICO (CONTINUED)
GRUPO FINANCIERO BANAMEX
ACCIVAL "BANACCI" (SERIES B)*
Provider of banking services
(Financial Services) 655,000 $ 660,711
GRUPO IUSACELL (ADRS)*
Provider of wireless
telecommunication services
(Telecommunications) 32,700 224,813
GRUPO TELEVISA (GDRS)*
Provider of television and
other media services
(Leisure and Hotels) 36,700 995,488
KIMBERLY-CLARK DE MEXICO (ADRS)
Manufacturer and retailer of
consumer and industrial paper
products (Retailing) 75,000 1,074,315
PANAMERICAN BEVERAGES
(CLASS A)
Producer of Coca-Cola and
other beverages (Consumer
Goods and Services) 50,100 1,014,525
PEPSI-GEMEX (GDRS)
Vendor of Pepsi soft
drink products (Consumer
Goods and Services) 117,000 760,500
TELEFONOS DE MEXICO "TELEMEX"
(CLASS L ADRS)
Provider of telecommunication
services (Telecommunications) 19,000 1,003,438
-----------
7,167,227
-----------
PHILIPPINES 3.21%
PHILIPPINE LONG DISTANCE
TELEPHONE
Telephone utility
(Telecommunications) 30,000 717,472
PHILIPPINE LONG DISTANCE
TELEPHONE (ADRS)
Telephone utility
(Telecommunications) 20,000 487,500
SM PRIME HOLDINGS
Developer and operator
of retail properties
(Construction and Property) 3,150,000 530,855
-----------
1,735,827
-----------
- -------------
See footnotes on page 22.
POLAND 4.15%
COCA-COLA BEVERAGES*
Worldwide manufacturer and
distributor of carbonated
flavored soft drinks
(Consumer Goods
and Services) 342,600 $ 722,410
ELEKTRIM SPOLKA AKCYJNA
Exporter/importer active in the
power equipment, electrical
machinery, telecommunication,
cable, and lighting technology
industries (Electronics) 60,000 718,143
POWSZECHNY BANK KREDYTOWY
Provider of financial services
(Financial Services) 20,000 420,377
PROKOM SOFTWARE (GDRS)
Provider of information
technology solutions
(Computer and Technology
Related) 19,100 379,612
-----------
2,240,542
-----------
PORTUGAL 6.59%
JERONIMO MARTINS
Retailer of food and
consumer products (retailing) 31,232 1,347,367
SONAE INVESTIMENTOS
Hypermarket operator
(Retailing) 13,000 548,636
TELECEL-COMUNICACAOES PESSOAIS*
Cellular communication
operator (Telecommunications) 9,050 1,660,356
-----------
3,556,359
-----------
SOUTH AFRICA 7.59%
ANGLO-AMERICAN CORPORATION
OF SOUTH AFRICA
International provider of
financial services to the
mining industry (Resources) 19,200 624,941
20
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Emerging Markets Growth Fund
SHARES VALUE
--------- -----------
SOUTH AFRICA (CONTINUED)
DIMENSION DATA HOLDINGS*
Investment holding company of
technology groupings including
communications, distribution,
software, services, interactive
technologies, and the Internet
(Computer and
Technology Related) 184,000 $ 842,923
LIBERTY LIFE ASSOCIATION OF AFRICA
Provider of life and health
insurance (Financial Services) 43,000 735,829
NEDCOR
International provider of
personal and corporate
financial services
(Financial Services) 37,500 748,663
PEPKOR
Holding company for operators
of clothing and department
stores, supermarkets, and
jewelry retailers (Retailing) 155,000 690,731
SASOL
Fuel and chemical producer
(Diversified) 93,000 455,053
-----------
4,098,140
-----------
SOUTH KOREA 2.68%
KOREA ELECTRIC POWER
Electric power generator and
supplier (Electric Utilities) 66,000 1,175,445
SAMSUNG ELECTRONICS
Manufacturer of consumer
and industrial electronics
and semiconductors
(Manufacturing) 2,191 89,666
SK TELECOM GROUP (ADRS)
Provider of mobile
telecommunication and
paging services
(Telecommunications) 17,400 179,446
-----------
1,444,557
-----------
- -------------
See footnotes on page 22.
TAIWAN 3.64%
CHINA STEEL (GDRS)
Producer of steel and steel
products (Resources) 36,000 $ 495,900
THE ROC TAIWAN FUND
Closed-end fund investing
in Taiwan (Miscellaneous) 80,000 530,000
TAIWAN OPPORTUNITIES FUND*
Closed-end fund investing
in Taiwan (Miscellaneous) 74,000 941,280
-----------
1,967,180
-----------
THAILAND 4.55%
BANGKOK BANK
Provider of retail, commercial,
and corporate banking services
(Financial Services) 440,000 669,020
PTT EXPLORATION AND PRODUCTION
PUBLIC COMPANY
Producer of natural gas
(Resources) 86,000 826,609
THAI FARMERS BANK
PUBLIC COMPANY*
Provider of banking services
(Financial Services) 760,000 959,544
-----------
2,455,173
-----------
TURKEY 2.53%
MIGROS TURK
Retailer of food and consumer
products (Retailing) 1,018,750 866,449
TURKIYE IS BANKASI
"ISBANK" (GDRS)+
Provider of banking services
(Financial Services) 182,500 500,598
-----------
1,367,047
-----------
TOTAL COMMON STOCKS
(Cost $55,711,798) 50,799,845
-----------
21
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Emerging Markets Growth Fund
PRINCIPAL
AMOUNT VALUE
--------- -----------
CORPORATE BONDS 0.21%
(Cost $92,712)
PORTUGAL 0.21%
JERONIMO MARTINS
0%, 12/30/2004
(Retailing) 16,875** $ 113,255
-----------
TOTAL INVESTMENTS 94.30%
(Cost $55,804,510) 50,913,100
OTHER ASSETS
LESS LIABILITIES 5.70% 3,079,165
-----------
NET ASSETS 100.00% $53,992,265
===========
- ----------------
* Non-income producing security.
** Principal amount reported in units of 1,000 Portuguese escudos.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
22
<PAGE>
INVESTMENT REPORT
Seligman Henderson Global Growth Opportunities Fund
PERFORMANCE REVIEW
For the twelve months ended October 31, 1998, Seligman Henderson Global Growth
Opportunities Fund posted a total return of 9.52% based on the net asset value
of Class A shares, compared to the 5.31% 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 15.69% for the same period.
The past calendar year was characterized by several distinct phases of global
market activity. From mid-January to mid-July, world markets rose strongly by
approximately 25%, led by Continental Europe and fueled by expectations of lower
inflation and interest rates. After mid-July, the combination of Russian debt
default, speculative attacks against emerging market currencies, and a
worse-than-expected economic impact from Asia upon the rest of the world led to
sharp market corrections. During October, in response to the deflationary
threats facing global economic activity, interest rates were cut in many parts
of the world and a coordinated program of support for the world's financial
system was implemented. As a result, many markets recovered confidence.
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.
[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) BEN ELWES, DAVID THORNTON, MICHAEL WOOD-MARTIN,
PETER BASSETT, (SEATED) STACEY NAVIN, NITIN MEHTA (PORTFOLIO MANAGER), KIRSTEEN
MORRISON
During the year, the Fund's bias for stocks with higher earnings growth and a
preference for Continental Europe proved to be the major positive factors. In
contrast, the investments in Asia and other emerging markets negatively impacted
performance. However, the exposure to these markets was reduced significantly
through the year.
PORTFOLIO STRATEGY
The Fund remained broadly invested in the four major growth themes : QUALITY OF
LIFE (36%), PRODUCTIVITY (23%), CONSUMPTION (24%) and GLOBAL TRADE (12%). During
the year, we reduced exposure to the Productivity theme -- in particular, by
reducing investments in Asian technology stocks -- and at the same time we
increased investment in the more stable Quality of Life theme with its emphasis
on health care stocks. Within each theme, we shifted the Fund's investments
toward those with greater earnings reliability.
[PHOTO]
US TEAM: (FROM LEFT) MICHELLE BORRE, DAVE LEVY, SHELIA GRAYSON (ADMINISTRATIVE
ASSISTANT), (SEATED) MARION S. SCHULTHEIS (PORTFOLIO MANAGER); (NOT PICTURED)
CRAIG CHODASH
23
<PAGE>
QUALITY OF LIFE
o As earnings growth became more uncertain around the world, we added to the
Quality of Life sub-themes of health care and savings. During the recent
market turmoil, a "flight to quality" benefited the stocks in this theme.
DURING THE PAST YEAR, WE ADDED SEVERAL DRUG STOCKS, NAMELY Lilly (Eli) IN THE
US, SmithKline Beecham IN THE UK, AND Astra IN SWEDEN. WHILE THE GLOBAL DRUG
STOCKS' VALUATIONS REFLECT THEIR BETTER GROWTH PROSPECTS, WE THINK THEY WILL
PROVIDE GREATER EARNINGS SAFETY IN VOLATILE TIMES. IN ADDITION, WITH RISING
INFLOWS INTO MUTUAL FUNDS IN EUROPE, WE ADDED Skandia IN SWEDEN AND Helvetia
Patria IN SWITZERLAND, BOTH BENEFICIARIES OF THE RISING DEMAND FOR SAVINGS
PRODUCTS AND FALLING INTEREST RATES.
PRODUCTIVITY
o The deterioration in economic activity, first in Asia and then around the
world, reduced the prospects for many technology stocks. In particular,
semiconductor and PC businesses faced a difficult environment. In response, we
reduced the Fund's exposure to technology stocks.
SOUTHEAST ASIA'S FINANCIAL CRISIS, WHICH BEGAN LAST YEAR, SIGNIFICANTLY
REDUCED THE OUTLAYS FOR CAPITAL EXPENDITURE, INCLUDING TECHNOLOGY UPGRADES.
AS A RESULT, WE SOLD ALMOST ALL OF OUR RELATED INVESTMENTS IN THAT REGION,
INCLUDING Silicon Precisionware, Advanced Systems, Hotung, Synnex, Electronic
Resources, AND Datacraft. IN EUROPE, WHERE THE PREPARATION FOR EUROPEAN
MONETARY UNION AND THE NEW MILLENNIUM PUSHED UP THE DEMAND FOR SOFTWARE AND
REGIONAL COMMUNICATION, WE ADDED Cap Gemini, EUROPE'S LARGEST SOFTWARE HOUSE,
AND Equant, A PROVIDER OF DATA NETWORKS TO MULTINATIONAL BUSINESSES.
CONSUMPTION
o Although the aggregate exposure to the Consumption theme hardly changed during
the year, there was a significant shift in exposure from Asia and Emerging
Markets toward Europe. The economic malaise in Asia has severely dented
consumer confidence, while in Europe, rising employment and falling interest
rates had the opposite effect.
WE SOLD A NUMBER OF STOCKS IN JAPAN, HONG KONG, AND SINGAPORE, ALL RELATED TO
CONSUMPTION. AT THE SAME TIME, WE INVESTED IN TWO RETAILERS IN SPAIN WHERE
CONSUMPTION GROWTH HAS BEEN EXCEPTIONALLY STRONG: Centros Comerciales
CONTINENTE, WHICH OPERATES A NATIONWIDE CHAIN OF SUPERMARKETS, AND
Superdiplo, WHICH ALSO OPERATES SUPERMARKETS, BUT MAINLY IN THE SPANISH
ISLANDS. IN THE SAME TREND, WE ADDED ANOTHER SUPERMARKET CHAIN, Kroger, IN
THE US.
GLOBAL TRADE
o The major emphasis is in the telecommunications sub-theme. This sector has
performed well in the past year, with many companies providing either
stability or growth in earnings fueled by more communication traffic and/or
cost-cutting.
OF NOTE, WE ADDED Matav IN HUNGARY AND Hellenic Telecommunication
Organization IN GREECE. BOTH SHOULD BENEFIT FROM AN EXPANSION IN THEIR
NETWORKS AND THE APPLICATION OF NEW TECHNOLOGY TO OFFER VALUE-ADDED SERVICES.
OUTLOOK
World stock markets have been reflecting the global economy's synchronization
toward slower growth. At times like these, profit growth becomes more scarce and
uncertain. Such concern has raised market volatility everywhere. However, we
believe a global economic recession accompanied by prolonged deflation is
unlikely, since appropriate action by the major central banks would be a remedy.
Therefore, excessive pessimism does not seem warranted either. In our opinion,
the current cyclical downturn in economic activity and corporate profitability
around the world should dissipate as we approach the end of the millennium.
The world has an excess of industrial capacity. Until demand rises sufficiently
to meet it, pricing power will be scarce in industrial goods markets. Businesses
in the service sectors are likely to fare better in such an environment.
Fortunately, the Fund's investments are largely in these sectors.
Also, during times of subdued profit advance, high quality growth stocks tend to
perform well. When there is much near-term uncertainty, it is appropriate to
look at the secular trends which are most likely to powerfully drive wealth
creation. In accordance with this philosophy, we will continue to use a thematic
approach to identify superior growth opportunities in which to invest.
24
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
Seligman Henderson Global Growth Opportunities Fund
COUNTRY ALLOCATION
OCTOBER 31, 1998
MSCI
WORLD
FUND INDEX
------- -------
CONTINENTAL EUROPE 41.89% 23.99%
Austria -- 0.16
Belgium -- 0.89
Denmark -- 0.45
Finland 3.61 0.55
France 8.94 4.49
Germany 4.42 4.96
Greece 1.37 --
Hungary 1.27 --
Ireland 1.87 0.22
Italy 2.05 2.28
Netherlands 4.31 2.57
Norway 1.76 0.23
Portugal -- 0.35
Spain 7.98 1.60
Sweden 3.35 1.31
Switzerland 0.96 3.93
JAPAN 5.58 10.22
LATIN AMERICA 0.98 --
Brazil 0.25 --
Mexico 0.73 --
PACIFIC 1.02 2.82
Australia 0.41 1.29
China 0.59 --
HongKong -- 1.12
New Zealand -- 0.09
Singapore -- 0.32
South Korea 0.02 --
UNITED KINGDOM 10.35 10.43
UNITED STATES 32.61 50.61
OTHER -- 1.93
Canada -- 1.93
OTHER ASSETS LESS LIABILITIES 7.57 --
-------- --------
TOTAL 100.00% 100.00%
======== ========
LARGEST INDUSTRIES
OCTOBER 31, 1998
[The table below represents a bar chart]
Drugs and Health Care 13.0% $23,951,447
Telecommunication 9.4 $17,397,898
Financial Services 8.8 $16,161,471
Retailing 8.3 $15,373,465
Consumer Goods and Services 7.7 $14,180,265
REGIONAL ALLOCATION
OCTOBER 31, 1998
Continental Europe 41.89%
United States 32.61
United Kingdom 10.35
Japan 5.58
Pacific 1.02
Latin America 0.98
Other Assets Less Liabilities 7.57
[The table below represents a pie chart]
LARGEST PORTFOLIO HOLDINGS
OCTOBER 31, 1998
SECURITY VALUE
- ---------- -------------
Nokia (Series A) (Finland) $5,372,029
Cap Gemini (France) 4,862,957
L.M. Ericsson Telefon (Series B)
(Sweden) 3,799,089
Bristol-Myers Squibb (US) 3,637,506
Microsoft (US) 3,505,497
Merck (US) 3,502,975
Elan (ARs) (Ireland) 3,452,330
Centros Comerciales
Continente (Spain) 3,405,163
Philip Morris (US) 3,379,363
CNP Assurances (France) 3,336,734
25
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
Seligman Henderson Global Growth Opportunities Fund
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
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 (14.86)% 4.31% n/a 10.34%
Without Sales Charge (10.60) 9.52 n/a 12.17
CLASS B**
With CDSC+ (15.26) 3.76 7.33% n/a
Without CDSC (10.82) 8.76 8.38 n/a
CLASS D**
With 1% CDSC (11.71) 7.76 n/a n/a
Without CDSC (10.82) 8.76 n/a 11.33
LIPPER GLOBAL FUNDS AVERAGE*** (9.83) 5.31 9.62 12.48?
MSCI WORLD INDEX*** (2.85) 15.69 14.23++ 16.590
</TABLE>
NET ASSET VALUE
OCTOBER 31, 1998 APRIL 30, 1998 OCTOBER 31, 1997
------------------ --------------- ------------------
CLASS A $9.62 $10.81 $9.20
CLASS B 9.40 10.59 9.06
CLASS D 9.40 10.59 9.06
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1998
PAID $0.418
REALIZED 0.020
UNREALIZED 2.492(00)
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 B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales charge ("CDSC"), 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% CDSC, 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 CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1996.
0 From October 31, 1995.
00 Represents the per share amount of net unrealized appreciation of portfolio
securities as of October 31, 1998.
26
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
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 charge ("CDSC") for Class D shares, and assumes that all distributions
within the period are invested in additional shares, since the commencement of
investment operations on November 1, 1995, through October 31, 1998, to a
$10,000 hypothetical investment made in the Lipper Global Funds Average and the
Morgan Stanley Capital International World Index (MSCIWorld Index) for the same
period. It is important to keep in mind that indices and averages exclude the
effect of fees and/or sales charges.
[The table below represents a Line chart]
Class A With Class A Without Class D MSCI World Lipper Global
Sales Load Sales Load Without CDSL Index Fds. Avg.
------------ --------------- ------------ ---------- -------------
11/1/95 9520 10000 10000 10000 10000
1/31/96 10107 10616 10602 10848 10646
4/30/96 10880 11429 11387 11362 11311
7/31/96 10627 11162 11106 11032 10934
10/31/96 10773 11317 11233 11682 11559
1/31/97 11307 11877 11751 12292 12401
4/30/97 11347 11919 11793 12592 12392
7/31/97 13253 13922 13740 14690 14370
10/31/97 12267 12885 12689 13698 13523
1/31/98 12748 13391 13152 14511 13859
4/30/98 15028 15786 15475 16312 15776
7/31/98 15069 15829 15503 16470 15535
10/31/98 13435 14112 13800 15847 14235
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 26, 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, 1998
SHARES
----------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/98
- ----------- ----------- -----------
AES (US) 27,900 27,900
ASM Lithography Holding
(Netherlands) 74,000 74,000
CNP Assurances (France) 98,000 98,000
ConAgra (US) 65,400 103,700
Equant (Netherlands) 40,600 40,600
NTT Mobile Communication
Network "NTTDoCoMo"
(Japan) 34 34
Philip Morris (US) 66,100 66,100
Superdiplo (Spain) 105,980 105,980
Thomson Travel Group (UK) 500,000 500,000
Tyco International (US) 40,800 40,800
SHARES
----------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/98
- ------------- ----------- -----------
Coca-Cola Enterprises (US) 57,300 --
Elsevier (Netherlands) 117,615 --
Hewlett-Packard (US) 35,300 --
Intel (US) 31,000 --
Koninklijke KNP BT
(Netherlands) 73,060 --
Lufthansa (Germany) 128,000 --
Meitec (Japan) 59,100 --
PepsiCo (US) 64,500 --
Pfizer (US) 19,200 19,200
Sairgroup (Switzerland) 11,105(1) --
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 8,884 shares received as a result of a 5-for-1 stock split.
27
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Growth Opportunities Fund
SHARES VALUE
----------- -----------
COMMON STOCKS 92.35%
AUSTRALIA 0.41%
CSL
Manufacturer and marketer of
human and veterinary
pharmaceutical products
(Drugs and Health Care) 74,000 $ 538,381
TELSTRA*
Provider of telecommunication
services (Telecommunications) 75,000 213,345
----------
751,726
----------
BRAZIL 0.25%
TELECOMUNICACOES BRASILEIRAS
"TELEBRAS" (ADRS)
Provider of telecommunication
services (Telecommunications) 6,000 455,625
----------
CHINA 0.59%
CHINA TELECOM (HONG KONG)*
Provider of cellular
telecommunication services
(Telecommunications) 250,000 469,688
HUANENG POWER INTERNATIONAL (ADRS)*
Developer and manufacturer
of coal-fired power plants
(Electric and Gas Utilities) 45,000 618,750
----------
1,088,438
----------
FINLAND 3.61%
NOKIA (SERIES A)
Developer and manufacturer
of cellular systems and equipment
(Telecommunications) 58,940 5,372,029
RAISION TEHTAAT
Processor and marketer
of agricultural products
(Consumer Goods and Services) 95,000 1,284,166
----------
6,656,195
----------
FRANCE 8.94%
ACCOR
Hotel operator and
provider of related services
(Entertainment and Leisure) 14,583 3,067,477
CAP GEMINI
Provider of computer
consulting services (Computer
and Technology Related) 32,311 4,862,957
- ---------------------
See footnotes on page 32.
SHARES VALUE
----------- ----------
FRANCE (CONTINUED)
CNP ASSURANCES*
Insurance company
(Financial Services) 98,000 $ 3,336,734
GENSET (ADRS)*
Biomedical research company
(Drugs and Health Care) 36,000 1,068,750
HACHETTE FILIPACCHI MEDIAS
Printer and publisher of magazines
and newspapers; online content
provider; distributor of cable radio
(Media) 7,300 1,401,316
VALEO
Manufacturer of automobile
components (Automotive
and Related) 31,698 2,748,150
----------
16,485,384
----------
GERMANY 4.34%
ADIDAS-SALOMON
Manufacturer and marketer of
sporting goods (Retailing) 22,330 2,713,621
METRO
Department store operator
(Retailing) 44,400 2,778,355
PORSCHE
Manufacturer of luxury sports cars
(Automotive and Related) 1,401 2,498,760
----------
7,990,736
----------
GREECE 1.37%
HELLENIC TELECOMMUNICATION
ORGANIZATION
Provider of telecommunication
services (Telecommunications) 78,544 1,786,868
NATIONAL BANK OF GREECE (GDRS)+
Provider of banking services
(Financial Services) 25,800 728,850
----------
2,515,718
----------
HUNGARY 1.27%
MAGYAR TAVKOZLESI "MATAV" (ADRS)
Provider of telecommunication
services (Telecommunications) 47,700 1,281,936
MOL MAGYAR OLAJ-ES GAZIPARI
(GDRS)+
Oil and gas producer and
distributor (Resources) 46,500 1,059,037
----------
2,340,973
----------
28
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Growth Opportunities Fund
SHARES VALUE
----------- ---------
IRELAND 1.87%
ELAN (ADRS)*
Developer, manufacturer,
and marketer of pharmaceutical
delivery systems (Drugs
and Health Care) 49,275 $ 3,452,330
----------
ITALY 2.05%
AEROPORTI DI ROMA
Manager, operator, and
developer of airfields and
terminals (Transportation) 217,890 1,364,308
MEDIOLANUM
Life insurer; provider of
a wide range of financial
services (Financial Services) 97,000 2,417,593
----------
3,781,901
----------
JAPAN 5.58%
BELLSYSTEM 24
Telemarketer (Business Goods
and Services) 7,000 1,347,947
DAITEC
Developer of point-of-sale
systems for Nippon Oil
(Business Goods and Services) 24,300 432,418
DIAMOND COMPUTER SERVICE
Provider of data processing
and software development
services (Computer and
Technology Related) 59,000 864,775
FUJITSU SUPPORT AND SERVICE
Electronic and communication
equipment dealer (Business
Goods and Services) 4,000 201,161
H.I.S.
Travel agency specializing
in overseas and package tours
(Entertainment and Leisure) 69,000 1,304,965
KEYENCE
Manufacturer of detection
devices and measuring control
equipment (Electronics) 12,400 1,245,063
NICHII GAKKAN
Provider of hospital
administrative services
(Drugs and Health Care) 21,100 752,762
- ---------------------
See footnotes on page 32.
SHARES VALUE
----------- -----------
JAPAN (CONTINUED)
NTT MOBILE COMMUNICATION
NETWORK "NTT DOCOMO"
Provider of telecommunication
services (Telecommunications) 34 $ 1,230,518
SECOM
Security services pioneer
(Support Services) 25,000 1,859,016
SOFTBANK
PC wholesaler (Computer
and Technology Related) 14,600 637,593
SUNDRUG
Operator of outlet drug stores
(Retailing) 31,200 407,685
----------
10,283,903
----------
MEXICO 0.73%
FOMENTO ECONOMICO MEXICANO
"FEMSA" (ADRS)
Beverage and packaging
producer; retail store operator
(Consumer Goods and Services) 33,500 873,094
GRUPO TELEVISA (GDRS)*
Provider of television and other
media services (Entertainment
and Leisure) 17,500 474,688
----------
1,347,782
----------
NETHERLANDS 4.31%
ASM LITHOGRAPHY HOLDING*
Manufacturer of semiconductor
production equipment
(Electronics Capital Equipment) 74,000 1,879,642
EQUANT*
Provider of data network services
to multinational corporations
(Business Goods and Services) 40,600 1,762,163
PHILIPS ELECTRONICS
Consumer and industrial
electronics (Electronics) 40,080 2,134,908
POLYGRAM
Producer, marketer, and
distributor of recorded music,
film, television, and video
programming (Entertainment
and Leisure) 36,840 2,173,562
----------
7,950,275
----------
29
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Growth Opportunities Fund
SHARES VALUE
----------- ---------
NORWAY 1.76%
TOMRA SYSTEMS
Provider of recycling systems
used mainly for beverage
containers and crates
(Business Goods and Services) 115,000 $ 3,239,701
----------
SOUTH KOREA 0.02%
SAMSUNG ELECTRONICS (GDRS)*
Manufacturer of
consumer electronics and
semiconductors (Electronics) 1,704 35,656
----------
SPAIN 7.98%
ACTIVIDADES DE CONSTRUCCION
Y SERVICIOS
Designer and builder of public
works projects, residential homes,
and other buildings
(Construction and Property) 76,100 2,432,754
CENTROS COMERCIALES CONTINENTE
Hypermarket chain selling
groceries, kitchen appliances,
auto accessories, and clothing
(Retailing) 114,000 3,405,163
SOCIEDAD GENERAL DE AGUAS
DE BARCELONA
Drinking water supplier; waste
management (Consumer Goods
and Services) 53,930 2,880,409
SOCIEDAD GENERAL DE AGUAS
DE BARCELONA* (RIGHTS)
Drinking water supplier; waste
management (Consumer Goods
and Services) 53,930 26,464
SUPERDIPLO*
Operator of supermarkets,
shopping clubs, boutiques,
and outlets (Retailing) 105,980 2,747,295
TABACALERA (CLASS A)
Manufacturer and marketer
of tobacco products (Tobacco) 133,300 3,223,242
----------
14,715,327
----------
SWEDEN 3.35%
ASTRA (CLASS A)
Developer, manufacturer, and
marketer of pharmaceuticals
(Drugs and Health Care) 129,415 2,100,327
- ---------------------
See footnotes on page 32.
SHARES VALUE
----------- ----------
SWEDEN (CONTINUED)
AUTOLIV (SDRS)
Manufacturer and worldwide
retailer of automobile airbags
and other safety equipment
(Automotive and Related) 8,400 $ 280,198
L.M. ERICSSON TELEFON (SERIES B)
Manufacturer of telecom-
munication equipment
(Telecommunications) 168,250 3,799,089
----------
6,179,614
----------
SWITZERLAND 0.96%
HELVETIA PATRIA HOLDING
Provider of life, property, and
casualty insurance (Financial
Services) 1,945 1,763,210
----------
UNITED KINGDOM 10.35%
BODYCOTE INTERNATIONAL
Diversified manufacturer and
distributor (Industrial Goods
and Services) 148,000 2,136,223
CRT GROUP
Provider of training and
recruitment services; publisher
of multimedia products
(Support Services) 350,000 1,004,518
GAMES WORKSHOP GROUP
Manufacturer and retailer
of specialty games (Retailing) 134,800 1,240,733
GRANADA GROUP
Television group with additional
leisure interests including hotels
(Entertainment and Leisure) 128,800 1,960,398
HALMA
Producer of fire detection and
security equipment
(Electronics) 768,066 1,613,125
LADBROKE GROUP
Leisure group with interests
in hotels and gaming
(Entertainment and Leisure) 375,000 1,369,655
30
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Growth Opportunities Fund
SHARES VALUE
----------- -----------
UNITED KINGDOM (CONTINUED)
PARITY
Provider of software engineering
and consulting services
(Computer and
Technology Related) 225,000 $ 1,703,832
PIZZA EXPRESS
Operator of restaurant
chain (Restaurants) 245,000 3,116,057
ROLLS ROYCE
Aerospace; power generation,
transmission; and distribution
systems (Aerospace) 313,500 1,164,706
SMITHKLINE BEECHAM
Manufacturer and marketer of
pharmaceutical products;
provider of health care
products and services
(Drugs and Health Care) 50,000 616,266
THOMSON TRAVEL GROUP
International vacation and
leisure company
(Entertainment and Leisure) 500,000 1,196,553
WPP GROUP
Provider of worldwide
marketing services, including
advertising, public relations,
and market research (Business
Goods and Services) 400,000 1,961,342
----------
19,083,408
----------
UNITED STATES 32.61%
AES*
Electrical supplier
(Electric and Gas Utilities) 27,900 1,142,156
AMERICAN INTERNATIONAL GROUP
Commercial and industrial
insurer; financial services
(Financial Services) 29,775 2,538,319
AMERICAN TELEPHONE &TELEGRAPH
Provider of communication
services and products
(Telecommunications) 44,800 2,788,800
BRISTOL-MYERS SQUIBB
Developer and manufacturer of
health and personal care
products (Drugs and Health
Care) 32,900 3,637,506
- ---------------------
See footnotes on page 32.
SHARES VALUE
----------- ----------
UNITED STATES (CONTINUED)
CARDINAL HEALTH
Distributor of pharmaceutical
products (Drugs and
Health Care) 32,500 $ 3,073,281
CITIGROUP
Provider of investment
services and life insurance
(Financial Services) 61,350 2,887,284
CONAGRA
Developer and manufacturer
of prepared foods and
agricultural products (Consumer
Goods and Services) 103,700 3,156,369
DAYTON HUDSON
General merchandise retailer,
specializing in large stores
(Retailing) 49,100 2,080,613
DISNEY, WALT
Theme parks and hotel operator;
film production (Entertainment
and Leisure) 40,500 1,090,969
GENERAL DYNAMICS
Manufacturer of defense
products (Capital Goods) 19,500 1,154,156
GENERAL ELECTRIC
Supplier of electrical equipment
and other industrial and
consumer products (Diversified) 36,700 3,211,250
INTERPUBLIC GROUP OF COMPANIES
Global advertising through
agencies in various countries
(Business Goods and Services) 55,350 3,237,975
KROGER*
Operator of supermarkets and
convenience stores (Consumer
Goods and Services) 56,300 3,124,650
LILLY (ELI)
Developer and manufacturer
of pharmaceuticals (Drugs and
Health Care) 38,900 3,148,469
MBNA
Issuer of credit cards; deposit,
loan, and transaction processing
(Financial Services) 102,488 2,337,996
31
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Growth Opportunities Fund
SHARES VALUE
----------- -----------
UNITED STATES (CONTINUED)
MERCK
Developer and manufacturer
of pharmaceuticals (Drugs
and Health Care) 25,900 $ 3,502,975
MICROSOFT*
Provider of computer
software products (Computer
and Technology Related) 33,100 3,505,497
MOTOROLA
Provider of wireless
communications and equipment
(Electronics) 13,900 722,800
PFIZER
Ethical drugs; hospital products;
and specialty chemicals
(Drugs and Health Care) 19,200 2,060,400
PHILIP MORRIS
Tobacco company (Tobacco) 66,100 3,379,363
PROCTER & GAMBLE
Manufacturer and distributor
of household and personal
care products (Consumer
Goods and Services) 31,900 2,835,113
TYCO INTERNATIONAL Worldwide provider
of fire protection devices, electronic
security services, and underwater
telecommunication systems
(Diversified) 40,800 2,527,050
XEROX
Developer, manufacturer, and
marketer of office automation
products (Business Goods
and Services) 30,500 2,954,688
----------
60,097,679
----------
TOTAL COMMON STOCKS
(Cost $121,960,029) 170,215,581
-----------
PRINCIPAL
AMOUNT VALUE
----------- ----------
CORPORATE BONDS 0.08%
(Cost $136,121)
GERMANY 0.08%
METRO FINANCE
0%, 9/7/2013
(Financial Services) 249,000** $ 151,485
----------
TOTAL INVESTMENTS 92.43%
(Cost $122,096,150) 170,367,066
OTHER ASSETS
LESS LIABILITIES 7.57% 13,953,306
----------
NET ASSETS 100.00% $184,320,372
============
- --------------------------------
* Non-income producing security.
** Principal amount reported in German deutschemarks.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte &Touche LLP.
See Notes to Financial Statements.
32
<PAGE>
INVESTMENT REPORT
Seligman Henderson Global Smaller Companies Fund
PERFORMANCE REVIEW
For the 12 months ended October 31, 1998, Seligman Henderson Global Smaller
Companies Fund declined 5.82% based on net asset value of Class A shares. In the
same period, the Fund's peer group, as measured by the Lipper Global Small Cap
Funds Average, fell 10.59%, and the Salomon Smith Barney Extended Market Index
World fell 4.49%.
The performance of world markets during the period under review was sharply
divided -- while markets in the Far East were falling, Western markets were
scaling new heights. July saw the peak in these markets, before concerns about
the impact of Asian economic weakness began to gather pace. The growing sense of
crisis swept emerging markets, leading to a devaluation of the Russian rouble,
and fears that Brazil would be forced to devalue. Equity markets collapsed as
concerns about a global financial meltdown spread. As investors became more risk
averse, government bond markets rose to new highs. The rescue of a US hedge fund
and the subsequent reduction in interest rates in the US marked the turning
point for equities, as investors became more confident that the global financial
crisis would be averted. The last two weeks of October saw markets rally
strongly.
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.
[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) ANDREW MCNALLY, WILLIAM GARNETT, HEATHER
MANNERS, ANDREW STOCK, (SEATED) MIRANDA RICHARDS, IAIN C. CLARK (PORTFOLIO
MANAGER)
PORTFOLIO STRATEGY
UNITED STATES
o For much of the period, smaller companies in the US were disappointing,
lagging both their larger counterparts and smaller companies in other regions
of the world. Smaller companies in the US peaked in April, then declined
gradually until the summer, when they took a lurch downward. Their
underperformance in the first phase came as investors concentrated on a few
large-cap names and drove the index higher. The poor performance of small
caps in the summer can be attributed to risk aversion, as investors fled to
the safety of bonds or cash from the perceived risk of smaller companies.
However, in October, smaller companies began to stage a recovery, rallying by
almost 22%, as measured by the Salomon Smith Barney Extended Market Index
World. Nevertheless, for the year as a whole, smaller companies fell almost
13%.
EXPOSURE TO THE US ROSE MARGINALLY FROM THE BEGINNING OF THE YEAR. LOOKING
FORWARD, WE WILL LIKELY INCREASE THE ALLOCATION TO THE US TO 50%. FOLLOWING
THEIR CORRECTION, US SMALL CAPS ARE BEGINNING TO ATTRACT INVESTOR ATTENTION,
AS THEY OFFER AN ATTRACTIVE COMBINATION OF GROWTH AT REASONABLE VALUATIONS.
UNITED KINGDOM
o In the UK, smaller companies fared poorly over the year to October, rising
only 3.2%, compared to a rise of 16.3% in larger companies. These figures,
however, ignore a strong outperforming period in the second quarter of 1998.
Following this period, smaller companies fell in line with other markets.
[PHOTO]
US TEAM: (FROM LEFT) TED HILLENMEYER, MIKE SULLIVAN, SONIA THOMAS
(ADMINISTRATIVE ASSISTANT), BRUCE SIRMAN, (SEATED) RICK RUVKUN, ARSEN MRAKOVCIC
(PORTFOLIO MANAGER)
33
<PAGE>
INVESTMENT REPORT
Seligman Henderson Global Smaller Companies Fund
THE UK ECONOMY IS SLOWING AND INTEREST RATES REMAIN HIGH -- NOT AN IDEAL
ENVIRONMENT FOR SMALLER COMPANIES. HOWEVER, THE FUND CONTINUES TO EMPHASIZE
COMPANIES IN THE SERVICE SECTOR WHICH HAVE VISIBLE EARNINGS GROWTH AND
PRICING POWER. THE ALLOCATION TO THE UK WAS OVERWEIGHT THROUGHOUT THE PERIOD,
VARYING BETWEEN 19% AND 25%.
THE ALLOCATION TO THE UK WILL LIKELY BE REDUCED OVER THE COMING MONTHS. WHILE
THE OVERWEIGHT POSITION HAS BEEN POSITIVE FOR PERFORMANCE, CONCERN ABOUT THE
ECONOMIC OUTLOOK AND THE SPEED OF INTEREST-RATE CUTS MAY LEAVE SMALLER
UK-BASED COMPANIES ON THE SIDELINES FOR SOME TIME.
CONTINENTAL EUROPE
o Continental Europe was the best-performing region for smaller companies over
the last 12 months. Total returns were 16.2% compared with 25.9% for larger
companies. The stock markets of Italy and Spain offered the best returns at
48.35% and 35.2%, respectively. Overall, the strong growth in the European
economy, lower interest rates, low valuations, and reasonable earnings growth
rates offered many attractive investment opportunities.
The portfolio has maintained a neutral to slightly overweight position in
Continental Europe throughout the period, peaking at approximately 25% in
November 1997 and ending the period at approximately 23%. Toward the end of
the period, concern has grown about the future growth prospects for Europe.
The Fund has been reducing exposure to more cyclical sectors of the market,
but will maintain a neutral weighting for the next few months.
JAPAN
o For much of the year, the economic background in Japan continued to
deteriorate. The market appeared to be in the grip of deflation, a banking
crisis, and policy paralysis. The government announced fiscal stimulus
packages which failed to meet investor expectations, and the market fell.
Indeed, for the period as a whole, smaller companies fell 17.5%, compared to
a fall of 15% for larger companies. A change in government during the summer
did little to improve investor sentiment, and plans for a resolution of the
banking crisis were met with skepticism among investors. Indeed, concern
about the impact of Japan's problems on the rest of the world was a partial
trigger for the collapse in world markets in the summer.
THE FUND HAD BEEN SIGNIFICANTLY UNDERWEIGHTED IN JAPANESE SMALLER COMPANIES
THROUGHOUT THE PERIOD. HOWEVER, THE ALLOCATION WAS INCREASED TOWARD THE END
OF THE YEAR, AS TENTATIVE SIGNS OF SOME IMPROVEMENT IN THE JAPANESE SITUATION
EMERGED. THE MOVE TO GRADUALLY INCREASE THE POSITION CLOSER TO THE FUND'S
BENCHMARK WILL LIKELY CONTINUE OVER THE NEXT FEW MONTHS.
PACIFIC BASIN
o Given the economic background, it was not surprising that the Pacific Basin
was the worst performer for the 12-month period ending on October 31, falling
27.6%. There was no respite to the worsening news in the region, although
during the drop in global markets in August and particularly in September,
the Pacific Basin performed relatively well. As US interest rates and the
dollar fell, interest rates in the region also declined, providing a stimulus
to equity markets.
The Fund began the year with an underweighted position which remained in
place throughout the period. Looking ahead, we are likely to increase the
allocation. While the underperformance from smaller companies has been
severe, there are tentative signs of improvements at the corporate level
which may lead to selective opportunities in the region.
SUMMARY
The past year has seen a fundamental change in most equity markets. All-time
highs were followed by sharp corrections, which were then followed by sharp
rallies. As volatility increased, investors avoided the perceived risks of
smaller companies. As a result, smaller companies, as measured by the Salomon
Smith Barney Extended Market Index World, underperformed large companies by
20.2% for the year.
Clearly, continued volatility will not favor small caps. However, there are
signs of renewed investor interest in US small caps which could spread to other
regions. Certainly the growth and valuation combination of small caps looks more
attractive than those for large caps in the US, Europe, and the UK, while there
is plenty of scope for positive surprise in Asia.
34
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
Seligman Henderson Global Smaller Companies Fund
COUNTRY ALLOCATION
OCTOBER 31, 1998
SALOMON
BROTHERS
WORLD
FUND EM Index
------------------
CONTINENTAL EUROPE 22.83% 19.70%
Austria 0.72 0.13
Belgium 0.30 0.58
Denmark 2.44 0.37
Finland -- 0.41
France 5.90 3.36
Germany 1.88 3.89
Ireland 0.27 0.24
Italy 0.68 1.95
Netherlands 3.36 2.69
Norway 2.18 0.19
Portugal -- 0.17
Spain -- 1.36
Sweden 2.15 1.20
Switzerland 2.95 3.16
JAPAN 5.79 8.52
PACIFIC 1.96 2.68
Australia 1.03 1.50
Hong Kong 0.42 0.90
New Zealand 0.10 0.09
Singapore 0.21 0.19
Taiwan 0.15 --
Thailand 0.05 --
UNITED KINGDOM 18.06 10.61
UNITED STATES 40.31 56.45
OTHER 1.48 2.04
Bermuda 0.18 --
Canada 1.30 2.04
OTHER ASSETS LESS LIABILITIES 9.57 --
-------- --------
TOTAL 100.00% 100.00%
-------- --------
-------- --------
LARGEST INDUSTRIES
OCTOBER 31, 1998
[The table below represents a bar chart]
BUSINESS SERVICES 11.9% $103,555,264
RETAILING 7.1% $ 61,628,676
CONSUMER GOODS AND SERVICES 6.8% $ 59,249,735
DRUGS AND HEALTH CARE 6.5% $ 56,154,196
CONSTRUCTION AND PROPERTY 6.4% $ 55,436,874
REGIONAL ALLOCATION
OCTOBER 31, 1998
[The table below represents a pie chart]
United\rStates\r40.31% 40.31%
Continental\rEurope\r22.83% 22.83%
United\rKingdom\r18.06% 18.06%
Japan\r5.79% 5.79%
Pacific\r1.96% 1.96%
Other\r1.48% 1.48%
Other Assets\rLess
Liabilities\r9.57% 9.57%
LARGEST PORTFOLIO HOLDINGS
October 31, 1998
SECURITY VALUE
- ---------- ---------------
CMG (Netherlands) $17,422,976
F.I. Group (UK) 16,065,600
Ashtead Group (UK) 13,085,933
Pizza Express (UK) 12,718,600
PSSWorld Medical (US) 11,174,250
Tandberg Television (Norway) 10,920,127
National Express Group (UK) 10,616,266
Modis Professional Services (US) 10,296,525
Tilbury Douglas (UK) 10,041,000
Total Renal Care Holdings (US) 9,856,326
35
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES FUND
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1998
<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 (22.56)% (10.30)% 10.41% 14.49% n/a n/a
Without Sales Charge (18.67) (5.82) 11.49 15.41 n/a n/a
CLASS B**
With CDSC+ (23.06) (11.01) n/a n/a (0.19)% n/a
Without CDSC (19.01) (6.54) n/a n/a 0.91 n/a
CLASS D**
With 1% CDSC (19.76) (7.43) n/a n/a n/a n/a
Without CDSC (18.95) (6.53) 10.66 n/a n/a 12.77%
LIPPER GLOBAL SMALL CAP FUNDS AVERAGE*** (20.67) (10.59) 5.97 10.70++ (0.58)0 8.8600
SALOMON SMITH BARNEY EM INDEX WORLD*** (14.80) (4.49) 7.13 10.09+++ 4.110 8.9400
NET ASSET VALUE
OCTOBER 31, 1998 APRIL 30, 1998 OCTOBER 31, 1997
------------------ --------------- ------------------
CLASS A $14.11 $17.35 $15.62
CLASS B 13.46 16.62 15.04
CLASS D 13.47 16.62 15.05
CAPITAL GAIN (LOSS) INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1998
PAID $0.627
REALIZED (0.257)
UNREALIZED 0.559 000
</TABLE>
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 B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales charge ("CDSC"), 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% CDSC, charged on
redemptions made within one year of the date of purchase.
*** The Lipper Global Small Cap Funds Average and the Salomon Smith Barney
Extended Market Index World (Salomon Smith Barney EM Index World) are
unmanaged benchmarks that assume reinvestment of dividends. The Lipper
Global Small Cap Funds Average excludes the effect of sales charges, and
the Salomon Smith Barney EM Index World excludes 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 CDSC is 5% for periods of one year or less, and 3% since inception.
++ From September 10, 1992.
+++ From August 31, 1992.
0 From April 30, 1996.
00 From April 30, 1993.
000 Represents the per share amount of net unrealized appreciation of portfolio
securities as of October 31, 1998.
36
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
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, and assumes that all distributions are
invested in additional shares, since the commencement of investment operations
on September 9, 1992, through October 31, 1998, to a $10,000 hypothetical
investment made in the Lipper Global Small Cap Funds Average and the Salomon
Smith Barney Extended Market Index World (Salomon Smith Barney EM Index World)
for the same period. It is important to keep in mind that indices and averages
exclude the effect of fees and/or sales charges.
[The table below represents a line chart]
Date Class A Class A Salomon Bros. Lipper Global
With Sales Without Sales World EM Small Cap
Load Load Index Fds. Avg.
9/9/92 9520 10000 10000 10000
10/31/92 9533 10014 9787 10015
1/31/93 10528 11059 10523 10958
4/30/93 11343 11915 11655 11702
7/31/93 12225 12841 12252 12396
10/31/93 13334 14006 12822 13974
1/31/94 15150 15914 13511 15151
4/30/94 14895 15645 13346 14533
7/31/94 14263 14982 13383 14215
10/31/94 16037 16846 13609 15015
1/31/95 14757 15501 12860 13764
4/30/95 16461 17291 13807 14657
7/31/95 18567 19504 14831 16494
10/31/95 19260 20231 14546 16398
1/31/96 19922 20926 15482 17161
4/30/96 22540 23677 16879 18945
7/31/96 21930 23036 15879 18069
10/31/96 22526 23661 16710 18759
1/31/97 23205 24375 17258 19714
4/30/97 22049 23161 16662 18880
7/31/97 25016 26277 19110 21639
10/31/97 24391 25621 18942 20883
1/31/98 23981 25191 18782 20265
4/30/98 28247 29671 21234 23538
7/31/98 26928 28286 19759 21799
10/31/98 22972 24130 18091 18672
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 36, 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, 1998
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/98
- ----------- ----------- -----------
ICON (ADRs) (UK) 205,000 205,000
Kaba Holding
(Switzerland) 15,000 15,000
Nobel Biocare (Sweden) 513,484 513,484
Personnel Group
of America (US) 307,300 529,300
Premier Parks (US) 286,300 365,700(1)
Primark (US) 190,100 190,100
PSSWorld Medical (US) 349,600 507,200
Superior Services (US) 197,700 197,700
Tandberg Television
(Norway) 1,180,000 1,180,000
Vlasic Foods International
(US) 254,100 254,100
SHARES
-------------------------
HOLDINGS
ADDITIONS DECREASE 10/31/98
- ----------- ----------- -----------
Ceridian (US) 107,100 79,800
COLT Telecom Group (UK) 800,000(2) --
David Brown Group (UK) 1,831,232 --
FactSet Research
Systems (US) 271,000 --
Jacor Communications (US) 138,500 8,900
MAPICS(US) 626,300 --
Montupet (France) 156,347 159,354(3)
Otra (Netherlands) 448,803 --
Scherer (R.P.)(US) 122,300 --
Telinfo (Belgium) 94,200 24,840
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 39,700 shares received as a result of a 2-for-1 stock split.
(2) Includes 600,000 shares received as a result of a 4-for-1 stock split.
(3) Includes shares received as a result of a 10-for-1 stock split.
37
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
COMMON STOCKS 89.58%
AUSTRALIA 1.03%
BRL HARDY
Owner and operator of
vineyards; producer and
distributor of wines (Consumer
Goods and Services) 259,000 $ 857,251
COCHLEAR
Developer and marketer of
hearing aids (Medical
Products and Technology) 166,000 840,325
CSL
Developer, manufacturer,
and marketer of human and
veterinary pharmaceutical and
diagnostic products (Medical
Products and Technology) 183,500 1,335,041
FUTURIS
Mini-conglomerate with
interests in automobile
components, building
materials, and financial
services (Automotive Parts
Manufacturing) 804,822 824,283
NATIONAL FOODS
Marketer of dairy products;
fruit juice processor; producer
of food packaging (Consumer
Goods and Services) 566,000 1,046,262
NATIONAL MUTUAL PROPERTY TRUST
Operator of commercial office
and industrial real estate
properties (Construction
and Property) 423,900 354,732
PASMINCO
Explorer, producer, and
developer of lead, zinc,
and silver mines (Metals) 1,320,000 1,079,885
STOCKLAND TRUST GROUP
Real estate developer and
marketer (Construction
and Property) 437,300 1,009,628
TAB*
Gaming company which
markets wagers on horse
racing and sporting events
(Leisure and Hotels) 510,000 971,410
HENRY WALKER GROUP
Provider of civil engineering
and mining services
(Support Services) 550,500 615,379
----------------
8,934,196
----------------
AUSTRIA 0.72%
BAU HOLDINGS
(VOTING PREFERENCE SHARES)
Construction and civil
engineering (Construction
and Property) 94,250 4,187,449
BAU HOLDINGS
Construction and civil
engineering (Construction
and Property) 37,894 2,100,428
----------------
6,287,877
----------------
BELGIUM 0.30%
TELINFO
Developer of
telecommunication
networks for businesses
(Telecommunications) 24,840 2,643,017
----------------
BERMUDA 0.18%
DAIRY FARM INTERNATIONAL
HOLDINGS
International food retailer,
manufacturer, and wholesaler
(Retailing) 657,500 808,725
STIRLING COOKE BROWN HOLDINGS
Provider of risk management
services and products
(Financial Services) 44,200 792,837
----------------
1,601,562
----------------
CANADA 1.30%
FINNING INTERNATIONAL
Lessor of construction
equipment (Construction and
Property) 210,000 1,613,813
- ----------------
See footnotes on page 50.
38
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
CANADA (CONTINUED)
FIRSTSERVICE*
Provider of property
management and
business services
(Business Services) 196,900 $ 2,288,962
PMC-SIERRA*
Provider of high-speed
networking circuits
(Technology) 57,300 2,574,919
TELEGLOBE
Owner and operator of a
worldwide telecommunication
network (Telecommunications) 110,000 3,010,376
TROJAN TECHNOLOGIES*
Worldwide environmental
company which specializes
in the disinfection of drinking
water via ultraviolet light
(Support Services) 100,000 1,828,794
----------------
11,316,864
----------------
DENMARK 2.44%
DANSKE TRAELASTKOMPAGNI
Timber supply company
(Construction and Property) 87,130 6,646,494
NEUROSEARCH*
Researcher and developer
of disease remedies
(Drugs and Health Care) 15,000 1,084,642
SONDAGSAVISEN
Operator and distributor of
companies in the media
industry (Media) 30,500 1,502,606
SYDBANK
Commercial financial services
provider (Financial Services) 98,784 4,442,800
THORKILD KRISTENSEN
Property development
(Construction and Property) 84,796 7,546,526
----------------
21,223,068
----------------
FINLAND
TAMRO (SERIES A)
Pharmaceutical distributor for
Scandinavia and the Baltics
(Drugs and Health Care) 230 1,234
----------------
FRANCE 5.69%
COMPAGNIE FRANCAISE D'FTUDES
ET DE CONSTRUCTION TECHNIP
"TECHNIP"
Engineering contractor
(Construction and Property) 49,000 $ 4,990,086
DU PAREIL AU MEME
Manufacturer and
distributor of clothing
for children (Retailing) 22,555 1,573,321
ECIA
Manufacturer of automobile
components (Automotive Parts
Manufacturing) 51,048 9,707,217
ETAM DEVELOPPEMENT
Retailer of women's clothing
and intimate apparel (Retailing) 109,663 5,534,542
L'EUROPENNE D'EXTINCTEURS++
Manufacturer and distributor of
fire extinguishers
(Manufacturing) 132,225 6,887,712
GENSET (ADRS)*
DNA technology firm seeking
to identify and patent genes
and regulatory regions related
to specific diseases (Drugs and
Health Care) 137,000 4,067,188
INTERNATIONAL METAL SERVICE
Distributor and broker of
specialized metal
products (Metals) 100,570 942,617
MONTUPET
Manufacturer of automobile
components (Automotive Parts
Manufacturing) 159,354 7,088,783
SYLEA
Manufacturer of automobile
components (Automotive Parts
Manufacturing) 52,337 3,197,953
VIRBAC
Manufacturer of veterinary
drugs and products
(Veterinary Products) 83,053 5,540,360
----------------
49,529,779
----------------
- ----------------
See footnotes on page 50.
39
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
GERMANY 1.24%
BERU
Developer, manufacturer, and
marketer of diesel engine
systems and automotive products
(Automotive Parts
Manufacturing) 33,600 643,966
BIEN-HAUS
Provider of residential and
multi-family homes
(Construction and Property) 2,615 845,844
GERRY WEBER INTERNATIONAL
Designer and manufacturer
of women's apparel
(Manufacturing) 4,281 98,354
HAWESKO HOLDING
Provider of telecommunication
services (Telecommunications) 96,000 4,817,412
MOEBEL WALTHER
Retailer of furniture and related
products (Retailing) 134,821 4,401,653
----------------
10,807,229
----------------
HONG KONG 0.42%
BEIJING DATANG POWER
GENERATION
Generator and distributor
of electric power
(Electric Utilities) 2,306,000 714,623
ESPRIT HOLDINGS
Retail and wholesale distributor
of high-quality fashion
products (Retailing) 873,000 324,085
JOHNSON ELECTRIC HOLDINGS
Designer, manufacturer, and
marketer of micromotors
(Electronics) 222,000 515,979
KERRY PROPERTIES
Investor and developer in
the real estate industry
(Construction and Property) 205,000 126,396
LI & FUNG
Export trader and wholesale
distributor of consumer
products (Consumer Goods
and Services) 356,200 556,527
SHENZHEN EXPRESSWAY
Developer and operator of
highways (Transportation) 3,512,000 793,595
SOUTH CHINA MORNING POST
English language
newspaper (Media) 300,000 160,759
YANZHOU COAL MINING
(SERIES H)*
Mining company producing
prime-quality, low-sulphur
coal (Resources) 2,134,000 418,837
----------------
3,610,801
----------------
IRELAND 0.27%
ESAT TELECOM GROUP (ADRS)*
Provider of telecommunication
services (Telecommunications) 77,700 2,379,563
----------------
ITALY 0.68%
LA DORIA++
Producer of foods, specializing
in fruits, fruit juices, and canned
tomatoes (Consumer Goods
and Services) 1,686,091 5,922,433
----------------
JAPAN 5.79%
AIYA
Operator of restaurant chain
(Restaurants) 84,600 756,364
ASAHI DIAMOND INDUSTRIES
Manufacturer of diamond-tipped
tools (Manufacturing) 108,000 474,429
ASATSU
Advertising agency (Advertising) 77,500 1,439,072
BENESSE
Provider of educational services
(Business Services) 41,400 1,904,062
ENPLAS
Manufacturer of electronic
components and engineering
plastics (Electronics) 53,000 1,038,814
FORVAL
Producer of telephone systems
(Telecommunications) 40,000 230,389
FUJI FIRE AND MARINE INSURANCE
Non-life insurance firm
(Financial Services) 344,000 656,505
- ----------------
See footnotes on page 50.
40
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
JAPAN (CONTINUED)
FUJICCO
Food manufacturer (Consumer
Goods and Services) 83,300 $ 1,314,038
FUJITSU BUSINESS SYSTEMS
Distributor of computer
equipment (Business Services) 107,900 1,127,929
GLORY KOGYO
Manufacturer and major exporter
of currency-handling machines
(Manufacturing) 108,000 1,309,091
H.I.S.
Travel agency specializing in
overseas and package tours
(Leisure and Hotels) 56,000 1,059,102
HIGASHI NIHON HOUSE
Home builder (Construction
and Property) 206,000 655,233
HITACHI INFORMATION SYSTEMS
Leading data processing firm
(Computer Software) 84,000 758,220
HITACHI MEDICAL
Manufacturer of medical
equipment (Medical Products
and Technology) 76,800 725,581
HOGY MEDICAL
Producer of disposable surgical
gowns and medical supplies
(Medical Products and
Technology) 28,000 655,921
HORIBA INSTRUMENTS
Manufacturer of instruments
and analyzers (Electronics) 147,000 1,353,424
IINO KAIUN KAISHA
Shipping company
(Transportation) 643,000 1,044,720
JAPAN INFORMATION PROCESSING SERVICE
Computer software developer
(Computer Software) 86,100 680,954
JOSHIN DENKI
Budget electrical appliance
retailer (Retailing) 124,000 261,165
KENTUCKY FRIED CHICKEN
Fast food restaurants
(Restaurants) 134,000 1,128,906
KISSEI PHARMACEUTICAL
Manufacturer, seller, importer,
and exporter of medical products
(Drugs and Health Care) 57,000 842,321
KOMATSU SEIREN
Printer of long-staple fabrics
(Manufacturing) 160,000 481,410
KOMORI
Manufacturer of offset printing
machines (Capital Goods) 101,000 1,858,070
MASPRO DENKOH
Manufacturer of reception-related
telecommunication equipment
(Telecommunications) 108,600 774,881
MITSUBISHI CABLE INDUSTRIES
Manufacturer of wire and cable
products (Manufacturing) 280,000 426,048
MITSUBISHI GAS CHEMICAL
Chemical producer
(Chemicals) 137,000 359, 209
MITSUI HOME
Home builder (Construction
and Property) 325,000 1,570,170
NAMURA SHIPBUILDING
Shipbuilder (Capital Goods) 241,000 414,356
NICHICON
Manufacturer of electrical
equipment (Manufacturing) 66,000 717,730
NIPPON BROADCASTING SYSTEM
Vendor of time slots of radio
broadcasting; producer and
marketer of radio programs
(Media) 17,000 577,262
NIPPON SEIKI
Manufacturer of automobile
components (Automotive Parts
Manufacturing) 126,000 834,043
NISHIO RENT ALL
Rentor of construction equipment
(Construction and Property) 101,500 663,142
NISSHA PRINTING
Integrated printing firm
(Paper and Printing) 125,000 730,711
- ----------------
See footnotes on page 50.
41
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
JAPAN (CONTINUED)
NISSHIN FIRE & MARINE INSURANCE
Non-life insurance company
(Financial Services) 288,000 740,271
NITTETSU MINING
Open cast coal miner
(Resources) 102,000 256,918
NOVA
Provider of language instruction
courses (Consumer Goods
and Services) 132,000 397,163
OKINAWA ELECTRIC POWER
Supplier of electricity to Okinawa
Island (Electric Utilities) 55,300 941,277
OLYMPUS OPTICAL
Manufacturer of optoelectronic
and other products (Electronics) 186,000 1,918,762
OTSUKA KAGU
Furniture retailer (Retailing) 19,200 1,056,351
RYOYO ELECTRO
Distributor of electronic goods
(Electronics) 152,000 1,021,827
SAGAMI CHAIN
Noodle restaurant chain
(Restaurants) 94,000 832,323
SANKYO
Manufacturer of pachinko game
equipment (Manufacturing) 117,100 2,003,258
SANYO SPECIAL STEEL
Steel manufacturer (Metals) 681,000 538,594
SHIMACHU
Furniture retailer (Retailing) 61,600 1,043,215
SODICK
Manufacturer of
electrodischargers
(Manufacturing) 273,000 528,046
SUNDRUG
Operator of outlet drug stores
(Retailing) 82,600 1,079,321
TAKASAGO INTERNATIONAL
Specialty chemicals producer,
including fragrances, flavorings,
and aromatic chemicals
(Chemicals) 146,000 739,256
TOKYO STYLE
Manufacturer of women's
ready-to-wear apparel
(Manufacturing) 82,000 820,529
TOWA PHARMACEUTICAL
Generic drug wholesaler
(Drugs and Health Care) 123,000 719,020
TOYO INK MANUFACTURING
Ink manufacturer (Chemicals) 224,000 456,377
TSUBAKI NAKASHIMA
Manufacturer of ball bearings
(Manufacturing) 290,900 1,517,957
TSUDAKOMA
Manufacturer of air-jet looms
(Manufacturing) 674,000 1,013,969
TSUTSUMI JEWELRY
Manufacturer and retailer of
jewelry (Retailing) 107,200 1,336,256
XEBIO
Retailer of outdoor clothing
(Retailing) 110,400 2,021,509
YOKOHAMA REITO
Cold storage, freezing, and
loading services (Distribution) 118,000 587,337
----------------
50,392,808
----------------
NETHERLANDS 3.36%
ATHLON GROEP
Automotive service supplier
(Consumer Goods and Services) 62,680 1,780,205
BENCKISER (SERIES B)
Producer and supplier of
household cleaning
products (Consumer
Goods and Services) 75,134 4,263,807
CMG
Information technology
consulting (Support Services) 749,000 17,422,976
SAMAS GROEP
Manufacturer of office
furniture (Manufacturing) 344,057 5,733,976
----------------
29,200,964
----------------
NEW ZEALAND 0.10%
AUCKLAND INTERNATIONAL AIRPORT*
Owner and operator of the
Auckland International
Airport (Transportation) 395,000 409,978
- ----------------
See footnotes on page 50.
42
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
NEW ZEALAND (CONTINUED)
SKY NETWORK TELEVISION*
Operator of pay television
(Media) 352,100 $ 447,491
----------------
857,469
----------------
NORWAY 2.18%
EKORNES
Manufacturer of home
furnishings (Manufacturing) 855,577 7,859,585
MERKANTILDATA
Distributor and supplier
of information technology
(Computer Software) 18,200 183,291
TANDBERG TELEVISION*
Developer of products and
systems used for television
signals which transfer programs
from channel sources to
viewers (Media) 1,180,000 10,920,127
----------------
18,963,003
----------------
SINGAPORE 0.21%
KEPPEL FELS
Builder of offshore drilling
rigs, production platforms,
and related specialized vessels
(Industrial Goods and Services) 336,000 608,463
VENTURE MANUFACTURING
Contract manufacturer for
the electronics industry
(Electronics) 205,000 681,860
WANT WANT HOLDINGS
Manufacturer of rice crackers
(Consumer Goods and Services) 462,360 550,209
----------------
1,840,532
----------------
SWEDEN 2.15%
ANGPANNEFORENINGEN (SERIES B)
Engineering consultancy
(Business Services) 130,481 1,992,076
BURE INVESTMENT AKTIEBOLAGET
Investment company
(Financial Services) 448,995 5,962,022
SWEDEN (CONTINUED)
FINNVEDEN (SERIES B)
Industrial conglomerate
(Manufacturing) 133,246 2,282,166
MUNSKJO
Producer of specialty paper
(Paper and Printing) 284,800 2,192,315
NOBEL BIOCARE
Developer of titanium implants,
hearing aids, and facial
prostheses (Medical Products
and Technology) 513,484 6,258,385
----------------
18,686,964
----------------
SWITZERLAND 2.95%
BON APPETIT HOLDING++
Food retailer (Retailing) 7,996 4,420,197
BON APPETIT HOLDING (WARRANTS)
Food retailer (Retailing) 9,653 5,358
HERO
Producer and exporter of
food and beverages (Consumer
Goods and Services) 7,340 4,644,194
KABA HOLDING
Provider of electronic and
mechanical security systems
(Business Services) 15,000 7,270,776
SELECTA GROUP
Owner and operator of food
and beverage vending machines
(Consumer Goods and Services) 42,178 9,301,446
----------------
25,641,971
----------------
TAIWAN 0.15%
TAIWAN AMERICAN FUND*
Closed-end fund investing
in Taiwan (Miscellaneous) 86,600 1,337,970
----------------
THAILAND 0.05%
HANA MICROELECTRONICS
Circuit board manufacturer
(Electronics) 171,500 458,668
----------------
UNITED KINGDOM 18.06%
AEA TECHNOLOGY
Provider of engineering and
research and development
services (Industrial Goods
and Services) 300,000 3,664,965
- ----------------
See footnotes on page 50.
43
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
UNITED KINGDOM (CONTINUED)
ALLIED LEISURE
Bowling alley operator
(Leisure and Hotels) 4,625,000 $ 1,934,984
ASHTEAD GROUP
Rentor of equipment for
the construction industry
(Construction and Property) 4,010,000 13,085,933
BTG
Technology transfer company
assisting in the commercialization
of technological innovations
(Technology) 328,000 1,825,119
CAPITAL RADIO
Commercial radio station
(Media) 680,200 5,691,574
CHIROSCIENCE GROUP
Pharmaceutical company
specializing in pharmaceuticals
for cancer, pain, and
inflammatory disorders
(Drugs and Health Care) 255,000 1,194,879
CLINTON CARDS
Retailer of greeting cards
(Retailing) 3,107,527 7,098,609
COBHAM
High-integrity engineering
(Manufacturing) 600,000 7,470,504
DAWSON GROUP
Rentor of commercial vehicles
(Transportation) 1,324,600 4,322,600
DIAGONAL
Provider of information
technology services
(Business Services) 105,000 1,546,314
DRUCK HOLDINGS
Worldwide engineering group
(Industrial Goods and Services) 421,200 1,973,659
ELECTRONICS BOUTIQUE
Electronic games retailer
(Retailing) 6,240,000 8,562,965
F.I. GROUP
Designer and builder of
software applications
(Computer Software) 4,000,000 16,065,600
FITNESS FIRST*
Owner and operator
of health and
fitness facilities
(Drugs and Health Care) 172,083 $ 691,154
GAMES WORKSHOP GROUP
Manufacturer and retailer
of specialty games (Retailing) 350,000 3,221,488
GWR GROUP
Local commercial radio
station operator (Media) 1,733,700 5,556,079
HOLMES PLACE
Owner and operator of health
clubs (Leisure and Hotels) 550,000 1,376,035
IBC GROUP
Business information
and education group
(Business Services) 1,695,000 9,460,003
ICON (ADRS)*
Provider of clinical research
and development services to
the pharmaceutical and
biotechnology industries
(Business Services) 205,000 5,752,813
NATIONAL EXPRESS GROUP
Long distance coach services
operating in the UK and
Europe (Transportation) 625,000 10,616,266
PARITY
Provider of software engineering
and consulting services
(Computer Software) 1,105,000 8,367,709
PEPTIDE THERAPEUTICS
Biopharmaceuticals
development company
(Drugs and Health Care) 150,000 200,820
PIZZA EXPRESS
Operator of restaurant chain
(Restaurants) 1,000,000 12,718,600
SHIRE PHARMACEUTICALS*
Biotechnology company
specializing in metabolic bone
and Alzheimer's diseases
(Drugs and Health Care) 362,500 2,581,269
TILBURY DOUGLAS
Building contractor
(Construction and Property) 2,500,000 10,041,000
- ----------------
See footnotes on page 50.
44
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
UNITED KINGDOM (CONTINUED)
TOROTRAK*
Designer and developer of
automobile transmission
systems (Automotive Parts
Manufacturing) 328,000 557,142
TRIFAST
Manufacturer and distributor
of fasteners for the
electronics industry
(Electrical Distribution) 463,800 3,997,272
TRINITY INTERNATIONAL HOLDINGS
Publisher of regional
newspapers in the UK, US,
and Canada (Media) 935,100 7,034,180
VANGUARD MEDICA GROUP
Emerging biopharmaceutical
company planning to develop
and commercialize new drugs
(Drugs and Health Care) 184,543 599,135
VANGUARD MEDICA GROUP
(WARRANTS)*
Emerging biopharmaceutical
company planning to develop
and commercialize new drugs
(Drugs and Health Care) 26,362 1,324
----------------
157,209,994
----------------
UNITED STATES 40.31%
ACXIOM*
Provider of data processing
services (Computer Software) 186,300 4,692,431
AFFILIATED COMPUTER SERVICES
(CLASS A)*
Provider of information
technology services and
electronic funds transfer
processing (Business Services) 150,500 5,568,500
ALLIED WASTE INDUSTRIES
Provider of integrated waste
disposal services (Industrial
Goods and Services) 282,600 6,084,731
AMERICAN CAPITAL STRATEGIES
Provider of commercial
financing (Financial Services) 97,200 1,281,825
AMERICAN HOMEPATIENT*
Provider of home health
care services (Drugs and
Health Care) 76,100 $ 197,384
AMERICAN HOMESTAR*
Retailer and producer of
manufactured homes
(Manufacturing) 295,700 4,805,125
AMERICAN MANAGEMENT SYSTEMS*
Provider of information
technology consulting services
(Business Services) 50,000 1,540,625
ANALOG DEVICES*
International manufacturer
and marketer of linear and
digital integrated circuits
(Semiconductors) 100,700 2,001,413
ANTEC*
Developer and supplier of fiber
optic transmission, construction,
and maintenance equipment
for the cable television industry
(Telecommunications) 205,900 3,403,784
AURORA FOODS*
Producer and marketer of
brand name food products
(Consumer Goods and Services) 113,000 1,977,500
AVANT!*
Developer and marketer
of software products that
assist design engineers
(Computer Software) 205,300 3,496,516
AVX
Manufacturer and supplier of
passive electronic components
and related products
(Electronics) 291,600 5,175,900
BA MERCHANT SERVICES (CLASS A)*
Provider of payment processing
services (Business Services) 188,200 3,058,250
BACOU USA*
Designer and manufacturer of
personal protective gear
(Industrial Goods and Services) 205,000 3,574,687
- ----------------
See footnotes on page 50.
45
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
UNITED STATES (CONTINUED)
BARNES AND NOBLE*
Owner and operator of retail
book stores and superstores
(Retailing) 132,300 $ 4,316,288
BARR LABORATORIES*
Developer, manufacturer, and
marketer of generic prescription
drugs (Drugs and Health Care) 115,300 3,941,819
BISYS GROUP*
Provider of data processing
services for banks (Business
Services) 105,700 4,637,588
BUDGET GROUP*
Owner and operator of
Budget Rent-a-Car franchises
(Consumer Goods and Services) 65,200 1,169,525
BURR-BROWN*
Manufacturer of microelectric
data devices for business
end-users (Technology) 285,600 5,310,375
CABOT OIL & GAS (CLASS A)
Explorer, developer, and producer
of oil and gas (Energy) 114,200 1,941,400
CALENERGY*
Developer of geothermal energy
power (Electric Utilities) 203,300 5,565,338
CALPINE*
Developer of power generation
facilities (Electric Utilities) 397,900 8,853,275
CARRIAGE SERVICES*
Provider of funeral services
and products (Consumer Goods
and Services) 148,600 3,473,525
CASELLA WASTE SYSTEMS*
Provider of non-hazardous solid
waste collection, disposal,
and recycling services
(Capital Goods) 140,400 4,115,475
CCA PRISON REALTY TRUST
Real estate investment trust
investing in prisons
(Financial Services) 196,800 4,624,800
CERIDIAN*
Provider of data processing
services (Business Services) 79,800 4,578,525
COGNEX*
Manufacturer of machine vision
systems (Electronics) 254,300 $ 3,949,597
COMPDENT*
Provider of managed-care
dental services (Medical
Products and Technology) 281,800 3,399,213
COPART*
Auctioneer of damaged
vehicles for insurance
companies (Retailing) 129,200 2,907,000
CORPORATE EXPRESS*
Supplier of office products
(Retailing) 518,900 6,048,428
COX RADIO (CLASS A)*
Operator of radio stations
(Media) 196,800 7,367,700
CRUSADER HOLDING*
Provider of community
banking services, including
residential mortgages and
commercial leases (Financial
Services) 35,910 426,431
DUANE READE*
Retail drugstore chain
(Retailing) 106,400 4,109,700
EDUTREK INTERNATIONAL*
Operator of post-secondary
educational colleges in three
countries (Technology) 187,700 1,378,422
FUSION SYSTEMS (RIGHTS)*
Supplier of ultraviolet curing
systems, photostabilizers, and
single-wafer ashers used in
semiconductor device
manufacturing (Capital Goods) 70,000 1,094
GENERAL CABLE
Designer, developer, manufacturer,
marketer, and distributor of wire
and cable products for the
communications and
electrical markets
(Manufacturing) 78,000 1,540,500
GENERAL SEMICONDUCTORS*
Designer and manufacturer
of power semiconductors
(Technology) 191,200 1,517,650
- ----------------
See footnotes on page 50.
46
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
UNITED STATES (CONTINUED)
GLENAYRE TECHNOLOGIES*
Manufacturer of paging
infrastructure equipment
(Telecommunications) 338,300 $ 2,040,372
HA-LO INDUSTRIES*
Distributor of specialty
advertising products
(Advertising) 208,300 5,884,475
HANGER ORTHOPEDIC GROUP*
Provider of orthopedic and
prosthetic rehabilitation services
(Medical Products
and Technology) 261,600 5,166,600
HEARST-ARGYLE TELEVISION (CLASS A)*
Television broadcaster
(Media) 42,000 1,165,500
HENRY SCHEIN*
International marketer of health
care products and services
to medical providers (Medical
Products and Technology) 91,800 3,551,513
HMT TECHNOLOGY*
Supplier of high-performance
thin-film disks for high-end,
high-capacity, hard disk drives
(Technology) 180,200 1,548,594
INDUS INTERNATIONAL*
Worldwide developer and
marketer of management
software and implementation
services (Business Services) 199,700 1,073,388
INSIGNIA/ESG HOLDINGS*
Provider of real estate services
(Financial Services) 143,799 1,833,437
INSO*
Marketer and developer of
textual information software
(Computer Software) 111,900 2,115,609
INTEGRATED ELECTRICAL SERVICES*
Provider of electrical contracting
and maintenance services to
the commercial, industrial,
and residential markets
(Electronics) 111,400 1,886,838
IVEX PACKAGING*
Manufacturer of specialty
packages (Consumer Goods
and Services) 151,700 2,683,194
JACOR COMMUNICATIONS*
Radio broadcaster (Media) 8,900 490,056
JOURNAL REGISTER*
Newspaper publisher (Media) 341,000 5,477,313
KEYSTONE AUTOMOTIVE INDUSTRIES*
Distributor of aftermarket
collision replacement parts for
automobiles and light trucks
(Distribution) 139,600 2,600,050
LANDCARE USA*
Provider of landscape and tree
services in the commercial and
institutional markets (Business
Services) 251,900 2,015,200
MARCAM SOLUTIONS*
Supplier of business planning
applications and services
(Computer Software) 133,600 918,500
MARKET FACTS*
Compiler of information for
the optimization of the
marketing decision process
(Business Services) 109,900 2,644,469
MCDERMOTT INTERNATIONAL
Manufacturer of steam-
generating and environmental
equipment and products;
provider of engineering
and construction services
(Industrial Goods and Services) 121,800 3,570,263
MEMBERWORKS*
Provider of membership service
programs for various industries
(Consumer Goods
and Services) 135,400 3,122,663
METAMOR WORLDWIDE*
International provider of
information technology
and staffing services
(Business Services) 100,000 2,584,375
- ----------------
See footnotes on page 50.
47
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
UNITED STATES (CONTINUED)
MICROCHIP TECHNOLOGY*
Supplier of microcontrollers
and related specialty
memory products (Technology) 190,100 $ 5,156,463
MICROGRAFX*
Developer and marketer of
graphics applications
and software (Business Services) 30,900 281,962
MMI COMPANIES
International health care risk
management company
(Financial Services) 125,400 2,014,237
MODIS PROFESSIONAL SERVICES*
Provider of temporary
personnel services
(Business Services) 584,200 10,296,525
NATIONAL INSTRUMENTS*
Provider of instrumentation
hardware and software products
for the engineering and
scientific industries (Technology) 55,800 1,529,269
NEW AMERICAN HEALTHCARE*
Operator of acute-care hospitals
(Drugs and Health Care) 96,000 1,020,000
NOVA*
Producer and marketer of
petrochemicals and plastics;
natural gas pipeline operator
(Business Services) 172,672 4,985,904
OAK INDUSTRIES*
Manufacturer of cable television
connectors and fiber optic
components (Electronics) 29,000 784,812
OM GROUP
Producer of specialty chemicals
(Chemicals) 183,900 5,999,737
OMNICARE
Provider of pharmaceutical
services to long-term care
institutions (Drugs and
Health Care) 95,700 3,307,631
PERSONNEL GROUP OF AMERICA*
Provider of personnel
staffing services
(Business Services) 529,300 8,204,150
PETERSEN COMPANIES (CLASS A)*
Special-interest magazine
publisher (Media) 159,700 $ 4,242,031
PHARMACEUTICAL PRODUCT
DEVELOPMENT*
Provider of consulting services in
the discovery, environmental, and
life sciences (Medical Products
and Technology) 74,300 2,015,387
PHYSICIANS' SPECIALTY*
Provider of practice management
services to physicians
(Drugs and Health Care) 200,000 1,450,000
PIER 1 IMPORTS
Retailer specializing in
decorative home furnishings,
gifts, and related items
(Retailing) 162,000 1,498,500
PRE-PAID LEGAL SERVICES*
Underwriter and marketer
of legal service plans
(Business Services) 122,300 2,927,556
PREMIER PARKS*
Owner and operator of
regional theme parks
(Leisure and Hotels) 365,700 8,113,969
PRIMARK*
Provider of information
through software and
databases (Consumer Goods
and Services) 190,100 5,132,700
PROFESSIONAL DETAILING*
Provider of consulting services
to the pharmaceutical industry
(Business Services) 159,200 3,781,000
PROVANT*
Provider of training and
development services
(Business Services) 161,200 1,884,025
PROVINCE HEALTHCARE*
Provider of health care services
in non-urban markets (Drugs
and Health Care) 187,900 4,914,759
- ----------------
See footnotes on page 50.
48
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
UNITED STATES (CONTINUED)
PSS WORLD MEDICAL*
Distributor of medical
supplies, equipment, and
pharmaceuticals (Drugs
and Health Care) 507,200 $ 11,174,250
QUORUM HEALTH GROUP*
Owner and operator of
acute-care hospitals
(Drugs and Health Care) 77,000 1,114,094
RENAL CARE GROUP*
Provider of dialysis services
(Medical Products
and Technology) 16,400 477,137
RENEX*
Provider of dialysis and
ancillary services (Drugs and
Health Care) 189,300 845,934
SANMINA*
Provider of services for
equipment manufacturers
in the electronic industry
(Industrial Goods
and Services) 121,800 5,009,025
SANTA FE ENERGY RESOURCES*
Explorer, producer, and
developer of oil and gas
(Resources) 289,800 2,354,625
SCHEIN PHARMACEUTICAL*
Developer, manufacturer, and
vendor of generic
pharmaceuticals (Drugs and
Health Care) 72,400 769,250
SINCLAIR BROADCAST GROUP (CLASS A)*
Diversified broadcasting
company that owns
and services television and
radio stations (Media) 132,000 1,707,750
SOLA INTERNATIONAL*
Designer and manufacturer
of optical supplies (Consumer
Goods and Services) 41,000 786,687
STEINWAY MUSICAL INSTRUMENTS*
Manufacturer of musical
equipment (Consumer
Goods and Services) 90,600 1,998,862
STRUCTURAL DYNAMICS RESEARCH*
Developer of mechanical design
software (Computer Software) 138,200 $ 2,003,900
SUNGARD DATA SYSTEMS*
Provider of computer disaster
recovery services, as well as
health care information and
investment support systems
(Computer Software) 62,300 2,102,625
SUPERIOR SERVICES*
Provider of solid waste collection,
disposal, and recycling
services (Business Services) 197,700 4,126,987
TOTAL RENAL CARE HOLDINGS*
Provider of dialysis services
(Drugs and Health Care) 402,299 9,856,326
TRANSACTION SYSTEMS ARCHITECTS*
Producer of software products
for the global electronic funds
transfer market (Technology) 125,100 4,515,328
TRIANGLE PHARMACEUTICALS*
Developer of new drugs,
primarily in the antiviral area
(Drugs and Health Care) 127,500 1,490,156
UCAR INTERNATIONAL*
Manufacturer of graphite
and carbon electrodes
(Capital Goods) 278,600 5,014,800
UNIGRAPHICS SOLUTIONS (Class A)*
International provider of services
used for virtual product develop-
ment (Business Services) 192,300 1,634,550
UNIVERSAL HEALTH SERVICES*
Owner and operator of health
care institutions (Drugs
and Health Care) 79,700 4,089,606
U.S. FOODSERVICE*
Distributor of food and
related products (Business
Services) 134,500 6,388,750
VALLEY NATIONAL GASES*
Packager and distributor of
gases (Chemicals) 282,300 1,940,812
- ----------------
See footnotes on page 50.
49
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Smaller Companies Fund
SHARES VALUE
------- -------
UNITED STATES (CONTINUED)
VLASIC FOODS INTERNATIONAL*
Manufacturer and marketer
of branded convenience
food products (Consumer
Goods and Services) 254,100 $ 4,748,494
WATERS*
Manufacturer of liquid
chromatography instruments
(Medical Products
and Technology) 29,500 2,168,250
WATSON PHARMACEUTICALS*
Manufacturer of off-patent
medications (Medical Products
and Technology) 73,900 4,110,688
WILMAR INDUSTRIES*
Marketer and distributor of
repair and maintenance
products to the apartment
housing market (Consumer
Goods and Services) 145,000 3,516,250
XILINX*
Supplier of field-programmable
gate arrays (Technology) 48,500 2,165,828
YOUTH SERVICES*
Operator of residential and
community-based programs
for at-risk youths
(Support Services) 214,200 833,372
-------------------
350,889,701
-------------------
TOTAL COMMON STOCKS
(Cost $742,359,162) 779,737,667
-------------------
PREFERRED STOCKS 0.64%
(Cost $7,883,115)
GERMANY 0.64%
GERRY WEBER INTERNATIONAL
Designer and manufacturer
of ladies' apparel
(Manufacturing) 275,472shs. $ 5,579,390
-----------------
CONVERTIBLE BONDS 0.21%
(Cost $1,698,581)
FRANCE 0.21%
L'EUROPENNE D'EXTINCTEURS
41/4%, 1/1/2005
(Manufacturing) $2,190,800 1,796,709
-----------------
SHORT-TERM HOLDINGS 1.15%
(Cost $10,000,000) 10,000,000
-----------------
TOTAL INVESTMENTS 91.58%
(Cost $761,940,858) 797,113,766
OTHER ASSETS
LESS LIABILITIES 8.42% 73,264,088
----------------
NET ASSETS 100.00% $870,377,854
- ----------------
*Non-income producing 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.
50
<PAGE>
INVESTMENT REPORT
Seligman Henderson Global Technology Fund
PERFORMANCE REVIEW
Seligman Henderson Global Technology Fund posted a return of -0.79% based on the
net asset value of Class A shares for the year ended October 31, 1998. This
compares to the 5.31% and 11.10% total returns of its peers, as measured by the
Lipper Global Funds Average and the Lipper Science and Technology Funds Average,
respectively. The Morgan Stanley Capital International World Index posted a
total return of 15.69% for the same period.
The caution that we expressed in our report of April 30, 1998, proved
appropriate, although our forecast did not extend to anticipating the scale of
the collapse in technology share prices from August through October. Without the
sharp rebound that we enjoyed over the last three weeks of October, we would
have been obliged to report on one of the most disappointing half years since
the Fund's launch.
US technology shares fared least poorly over the period although, at one stage,
the Pacific Stock Exchange Technology Index had fallen more than 25% from its
late July high. Smaller companies in the sector declined throughout the summer,
and by early October, had fallen more than 40% from their April peak. In
contrast, European technology shares proved resilient for most of the period
before collapsing in September. Meanwhile, Asian technology companies continued
their long period of underperformance.
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.
[PHOTO]
INTERNATIONAL TEAM: (FROM LEFT) EMMA PARKINSON, TIM WOOLLEY, DAVID MAGLIOCCO,
BRIAN ASHFORD-RUSSELL (PORTFOLIO MANAGER)
PORTFOLIO STRATEGY
WE RAISED SUBSTANTIAL LIQUIDITY DURING THE SUMMER, TAKING PROFITS IN A BROAD
RANGE OF EUROPEAN STOCKS. A SIGNIFICANT PROPORTION OF THAT LIQUIDITY WAS LATER
REINVESTED IN THE US, ESPECIALLY JUST AFTER THE END OF THE FUND'S OCTOBER FISCAL
YEAR.
WE BELIEVE THAT THE EARLY OCTOBER LOW FOR THE SECTOR HAD ALL THE
CHARACTERISTICS OF A MAJOR BOTTOM -- ONE WHICH SEEMs LIKELY, AT LEAST IN THE
SHORT TERM, TO BE MARKED BY AN END TO THE EXTRAORDINARY UNDERPERFORMANCE OF
SMALL-CAP US TECHNOLOGY SHARES. WE THEREFORE ADDED TO OUR POSITIONS IN A NUMBER
OF SMALL- AND MID-CAP COMPANIES SUCH AS Amkor Technology, DII Group, AND
Ziff-Davis. WE HAVE ALSO ADDED TO OUR CYCLICAL TECHNOLOGY WEIGHTING IN THE US.
THIS REFLECTS OUR BELIEF THAT CONDITIONS IN THE SEMICONDUCTOR MARKET ARE NO
LONGER DETERIORATING, AND THAT A HEALTHY PC MARKET SHOULD ALLOW A BETTER BALANCE
BETWEEN COMPONENT SUPPLY AND DEMAND.
[PHOTO]
US TEAM: (FROM LEFT) PAUL KRIEGER, PATRICK RENDA, LAWRENCE ROSSO,STORM BOSWICK,
(SEATED) PAUL WICK (PORTFOLIO MANAGER); (NOT PICTURED) KEI YAMAMOTO
51
<PAGE>
THE IMPROVEMENT IN THESE AREAS SHOULD ALSO PROVIDE THE CONDITIONS NECESSARY
FOR BETTER RELATIVE PERFORMANCE FROM ASIAN TECHNOLOGY SHARES. CONSEQUENTLY, WE
HAVE NOT REDUCED OUR ASIAN WEIGHTING TO FINANCE OUR INCREASED US EXPOSURE, BUT
HAVE INSTEAD CUT BACK ON OUR EUROPEAN POSITIONS. IN SO DOING WE HAVE TAKEN
PROFITS IN SOME OF OUR MOST SUCCESSFUL HOLDINGS SUCH AS COLT Telecom Group,
Vodafone, CMG, AND Logica.
SUMMARY
The recent spectacular rise in both markets and technology shares has taken us
back into more neutral territory. However, we expect that the sector will enjoy
another upward leg over the next several months, even if a pause occurs in the
very short term. Confidence is slowly rebuilding; demand in the PC and
networking markets remains robust, and at the margin, is improving in the
components, communications, and wireless areas. Year 2000 issues may have the
effect of concentrating corporate information technology (IT) demand into the
first half of next year, thereby encouraging investors to chase (what may prove
to be unsustainable) earnings momentum in the sector. European demand is proving
resilient in the face of the global economic slowdown, a reflection of the far
lower rates of IT penetration in Europe as compared to the US. Asian demand,
although depressed, should be improving by the second half of 1999.
Consequently, we anticipate further strength in the technology sector and do not
expect any significant setbacks in early 1999, and if setbacks should occur
then, they will be from considerably higher levels than at the end of October
1998.
52
<PAGE>
Performance and Portfolio Overview
Seligman Henderson Global Technology Fund
COUNTRY ALLOCATION
OCTOBER 31, 1998
MSCI
WoRLD
fund INDEX
------- -------
CONTINENTAL EUROPE 14.54% 23.99%
Austria -- 0.16
Belgium -- 0.89
Denmark -- 0.45
Finland 1.09 0.55
France 3.85 4.49
Germany 1.56 4.96
Ireland -- 0.22
Italy 1.10 2.28
Luxembourg 1.18 --
Netherlands 1.86 2.57
Norway -- 0.23
Portugal -- 0.35
Spain -- 1.60
Sweden 2.39 1.31
Switzerland 1.51 3.93
JAPAN 4.56 10.22
PACIFIC 5.66 2.82
Australia 1.16 1.29
Hong Kong -- 1.12
New Zealand -- 0.09
Singapore 2.44 0.32
South Korea 0.14 --
Taiwan 1.92 --
UNITED KINGDOM 10.87 10.43
UNITED STATES 52.46 50.61
OTHER 5.86 1.93
Canada 0.30 1.93
Israel 5.56 --
OTHER ASSETS LESS LIABILITIES 6.05 --
-------- --------
TOTAL 100.00% 100.00%
======== =======
LARGEST INDUSTRIES
October 31, 1998
COMPUTER SOFTWARE 22.5% $161,513,880
COMPUTER HARDWARE/PERIPHERALS 12.9% $ 92,587,856
COMPUTER AND BUSINESS SERVICES 9.7% $ 69,739,884
SEMI-CONDUCTORS 8.8% $ 63,305,565
ELECTRONICS 8.0% $ 58,683,716
REGIONAL ALLOCATION
OCTOBER 31, 1998
United States 52.46% 52.46%
Continental Europe 14.54% 14.54%
United Kingdom 10.87% 10.87%
Other 5.86% 5.86%
Pacific 5.66% 5.66%
Japan 4.56% 4.56%
Other Assets Less
Liabilities 6.05% 6.05%
LARGEST PORTFOLIO HOLDINGS
October 31, 1998
SECURITY VALUE
- ---------- ---------------
EMC (US) $32,187,500
Synopsys (US) 17,610,937
Lexmark International Group
(Class A) (US) 17,484,375
Maxim Integrated Products (US) 17,293,281
Network Associates (US) 17,046,993
ECI Telecommunications (Israel) 16,625,000
Microsoft (US) 15,885,938
The Learning Company (US) 15,487,500
Electronic Arts (US) 14,350,000
VeecoInstruments (US) 11,912,500
53
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
Seligman Henderson Global Technology Fund
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------
CLASS B
SINCE SINCE
SIX ONE INCEPTION INCEPTION
MONTHS* YEAR 5/23/94 4/22/96
---------- ------- ------------ ------------
CLASS A**
<S> <C> <C> <C>
With Sales Charge (18.24)% (5.53)% 18.93% n/a
Without Sales Charge (14.16) (0.79) 20.25 n/a
CLASS B**
With CDSC+ (18.72) (5.62) n/a 8.69%
Without CDSC (14.54) (1.55) n/a 9.73
CLASS D**
With 1% CDSC (15.40) (2.51) n/a n/a
Without CDSC (14.56) (1.70) 19.25 n/a
Lipper Global Funds Average*** (9.83) 5.31 10.74++ 9.680
LIPPER SCIENCE &
TECHNOLOGY FUNDS AVERAGE*** (4.74) 11.10 24.02++ 14.640
MSCI WORLD INDEX*** (2.85) 15.69 14.65+++ 14.230
NET ASSET VALUE
</TABLE>
OCTOBER 31, 1998 APRIL 30, 1998 OCTOBER 31, 1997
------------------ --------------- ------------------
CLASS A $12.48 $14.83 $15.14
CLASS B 11.98 14.31 14.73
CLASS D 11.96 14.29 14.73
CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1998
PAID $2.586
REALIZED 0.802
UNREALIZED 1.07000
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 B shares are calculated with and without the
effect of the maximum 5% contingent deferred sales charge ("CDSC"),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% CDSC, charged on
redemptions made within one year of the date of purchase.
*** The Lipper Global Funds Average, the Lipper Science & Technology 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 and the Lipper Science &
Technology Funds Average exclude the effect of sales charges and the MSCI
World Index excludes the effect of fees and sales charges. The monthly
performances of the Lipper Global Funds Average and the Lipper Science &
Technology Funds Average are used in the Performance and Portfolio
Overview. Investors cannot invest directly in an average or an index.
+ The CDSC is 5% for periods of one year or less, and 3% since inception.
++ From May 26, 1994.
+++ From May 31, 1994.
0 From April 30, 1996.
00 Represents the per share amount of net unrealized appreciation of
portfolio securities as of October 31, 1998.
54
<PAGE>
PERFORMANCE AND PORTFOLIO OVERVIEW
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
charge ("CDSC") for Class D shares, and assumes that all distributions are
invested in additional shares, since the commencement of operations on May 23,
1994, through October 31, 1998, to a $10,000 hypothetical investment made in the
Lipper Global Funds Average, the Lipper Science &Technology 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 indices and averages exclude
the effect of fees and/or sales charges.
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 54, 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.
Class A With Sales Load
Class A Without Sales Load
Class D Without CDSL
MSCI World Index
Lipper Global Funds Avg.
Lipper Sci. & Tech Fds. Avg.
5/23/94 9520 10000 10000 10000 10000 10000
7/31/94 9613 10098 10084 10165 10089 9874
10/31/94 11160 11723 11681 10491 10425 11759
1/31/95 10695 11234 11150 9987 9604 11377
4/30/95 13264 13933 13821 10997 10332 13185
7/31/95 16856 17706 17523 11649 11303 16641
10/31/95 17556 18441 18216 11543 11158 17245
1/31/96 15895 16697 16458 12522 11880 16436
4/30/96 17535 18419 18119 13116 12621 18456
7/31/96 15004 15760 15477 12734 12200 16172
10/31/96 16269 17090 16745 13486 12898 18920
1/31/97 19981 20988 20535 14189 13838 21533
4/30/97 18571 19507 19055 14536 13827 18908
7/31/97 23634 24826 24204 16957 16031 24437
10/31/97 21779 22877 22241 15813 15089 23391
1/31/98 21113 22178 21506 16750 15464 23009
4/30/98 25170 26439 25588 18829 17603 27281
7/31/98 23753 24951 24093 19012 17334 26628
10/31/98 21606 22696 21863 18293 15884 25987
LARGEST PORTFOLIO CHANGES
During the Six Months Ended October 31, 1998
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 10/31/98
- ----------- ----------- -----------
Autodesk (US) .................. 200,000 300,000
Canon (Japan) .................. 300,000 300,000
DIIGroup (US) .................. 400,000 400,000
Koninklijke (Royal) Philips
Electronics (Netherlands) ... 100,000 100,000
The Learning Company
(US) ........................ 600,000 600,000
Microsoft (US) ................. 150,000 150,000
Novartis (Switzerland) ......... 6,000 6,000
Platinum Technology
(US) ........................ 400,000 400,000
SCISystems (US) ................ 200,000 200,000
WM-Data (Series B)
(Sweden) .................... 176,900 176,900
SHARES
-------------------------
HOLDINGS
REDUCTIONS DECREASE 10/31/98
- ------------- ----------- -----------
AlcatelAlsthom (France) 63,000 --
America Online (US) 190,000 --
American Power
Conversion (US) 275,000 --
COLT Telecom
Group (UK) 1,558,200(1) 480,000
Kulicke &Soffa
Industries (US) 600,000 --
LHS Group (Germany) 135,000(2) --
Logica (UK) 349,000 201,000
Novellus Systems (US) 450,000 --
Storage Technology (US) 100,000 300,000(3)
Vodafone (UK) 700,000 500,000
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 1,367,400 shares received as a result of a 4-for-1 stock split.
(2) Includes 50,000 shares received as a result of a 2-for-1 stock split.
(3) Includes 150,000 shares received as a result of a 2-for-1 stock split.
55
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Technology Fund
SHARES VALUE
----------- ------------
COMMON STOCKS 93.95%
AUSTRALIA 1.16%
COCHLEAR
Developer and marketer
of hearing aids (Medical
Products and Technology) 1,650,000 $ 8,352,625
----------------
CANADA 0.30%
PMC-SIERRA*
Provider of high-speed
networking circuits
(Semiconductors) 48,400 2,174,975
----------------
FINLAND 1.09%
NOKIA (SERIES A)
Developer and manufacturer
of cellular systems
and equipment
(Telecommunications) 86,000 7,838,386
----------------
FRANCE 3.85%
ALTRAN TECHNOLOGIES
Provider of computer services
(Computer and
Business Services) 33,000 6,465,573
AXIME
Provider of banking and financial
services, emphasizing database
development, communication
networks, and integrated
trading systems (Computer and
Business Services) 24,500 4,627,974
RH(TM)NE-POULENC (SERIES A)
Manufacturer of chemicals,
polymers, fibers, pharmaceuticals,
and agricultural chemicals
(Medical Products and
Technology) 210,000 9,614,275
STMICROELECTRONICS*
Manufacturer of semiconductor
circuits for the automotive,
computer, and
telecommunication industries
(Electronics) 25,000 1,520,306
UNILOG
Computer consultants
(Computer and
Business Services) 15,300 5,432,769
----------------
27,660,897
----------------
Germany 1.56%
MANNESMANN
Manufacturer of plant and
machinery equipment;
automotive optical inspection
systems (Machinery and
Equipment) 115,400 $ 11,191,149
SIEMENS
Worldwide manufacturer of
automotive electronics,
locomotives, electrical power
plants, and traffic control systems
(Machinery and Equipment) 445 27,066
----------------
11,218,215
----------------
ISRAEL 5.56%
CHECK POINT SOFTWARE TECHNOLOGIES*
Provider of network "firewall"
security systems
(Computer Software) 200,000 4,556,250
ECI TELECOMMUNICATIONS
Provider of digital
telecommunication and
data transmission systems
(Networking/Communications
Infrastructure) 500,000 16,625,000
ORBOTECH*
Manufacturer of automated
optical inspection systems
for circuit boards and
flat panel displays
(Electronics) 330,000 11,488,125
TECNOMATIX TECHNOLOGIES*++
Developer and retailer of
computer-aided production
engineering software
(Computer Software) 500,000 7,250,000
----------------
39,919,375
----------------
ITALY 1.10%
TELECOM ITALIA
Provider of telecom-
munication services
(Telecommunications) 1,092,933 7,911,580
----------------
- ----------------
See footnotes on page 62.
56
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Technology Fund
SHARES VALUE
----------- ------------
JAPAN 4.56%
CANON
Manufacturer of printers and
photocopiers (Electronics) 300,000 $ 5,686,654
HIROSE ELECTRONICS
Manufacturer of specialized
connectors (Electronics) 60,800 3,528,046
MIMASU SEMICONDUCTOR
Wafer inspection devices
(Electronics Capital Equipment) 180,000 2,011,605
MURATA MANUFACTURING
MANUFACTURER OF CAPACITORS
(ELECTRONICS) 125,000 4,223,082
RICOH
Manufacturer of office
equipment (Machinery and
Equipment) 310,000 2,624,973
ROHM
Producer of custom
linear integrated circuits
(Semiconductors) 37,000 3,276,166
SECOM
Security services pioneer
(Computer and
Business Services) 109,000 8,105,308
SHARP
Manufacturer of electronics
(Electronics) 435,000 3,290,780
----------------
32,746,614
----------------
LUXEMBOURG 1.18%
MILLICOM INTERNATIONAL CELLULAR*
Cellular services operator
(Telecommunications) 50,000 1,662,500
SCANDINAVIAN BROADCASTING SYSTEM*
Radio and television
broadcasting company
(Media) 240,000 5,550,000
UNITED CUSTOMER MANAGEMENT
SOLUTIONS
Provider of services for the
telecommunication industry
(Telecommunications) 7,600 1,238,800
----------------
8,451,300
----------------
NETHERLANDS 1.86%
CMG
Information technology
consulting (Computer and
Business Services) 346,100 $ 8,050,857
KONINKLIJKE (ROYAL)
PHILIPS ELECTRONICS
Manufacturer of consumer
and industrial electronics
(Electronics) 100,000 5,326,617
----------------
13,377,474
----------------
SINGAPORE 2.44%
CREATIVE TECHNOLOGIES
Provider of PCaudio products
(Computer Hardware/
Peripherals) 500,000 7,046,876
VENTURE MANUFACTURING
Contract manufacturer
for the electronics industry
(Electronics) 3,143,000 10,454,081
----------------
17,500,957
----------------
SOUTH KOREA 0.14%
SAMSUNG ELECTRONICS (GDRS)
(1U2 NON-VOTING)*+
Manufacturer of consumer
electronics and semiconductors
(Semiconductors) 60,000 528,000
SK TELECOM GROUP (ADRS)
Provider of mobile
telecommunication and
paging services
(Telecommunications) 50,000 515,625
----------------
1,043,625
----------------
SWEDEN 2.39%
L.M. ERICSSON TELEFON (ADRS)
Manufacturer of
telecommunication
equipment (Networking/
Communications Infrastructure) 100,000 2,239,844
L.M. ERICSSON TELEFON (SERIES B)
Manufacturer of
telecommunication
equipment (Networking/
Communications
Infrastructure) 148,950 3,363,295
- ----------------
See footnotes on page 62.
57
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Technology Fund
SHARES VALUE
----------- ------------
SWEDEN (CONTINUED)
PHARMACIA & UPJOHN
Global pharmaceutical and
biotechnology company
(Medical Products and
Technology) 100,000 $ 5,118,994
WM-DATA (SERIES B)
Provider of systems design and
development services for the
computer industry (Computers
and Business Services) 176,900 6,445,519
----------------
17,167,652
----------------
SWITZERLAND 1.51%
NOVARTIS
Manufacturer of
pharmaceuticals (Medical
Products and Technology) 6,000 10,834,012
----------------
TAIWAN 1.92%
ACCTON TECHNOLOGY (GDRS)
Distributor of electronic
components (Distribution) 599,109 1,725,434
SILICONWARE PRECISION
INDUSTRIES (GDRS)*
Integrated circuit packaging
(Electronics Capital
Equipment) 542,780 5,753,468
SYNNEX TECHNOLOGY
INTERNATIONAL (GDRS)*
Manufacturer of PCs and
peripherals (Computer
Hardware/Peripherals) 287,968 4,356,956
YAGEO (GDRS)*
Manufacturer of passive
components (Electronics) 291,228 1,915,319
YAGEO (GDRS)*+
Manufacturer of passive
components (Electronics) 8,372 55,060
----------------
13,806,237
----------------
UNITED KINGDOM 10.87%
ACORN GROUP*
Supplier of information
technology (Computer
Hardware/Peripherals) 535,800 596,280
UNITED KINGDOM (CONTINUED)
ADMIRAL
Computer software and
services (Computer and
Business Services) 530,100 $ 8,560,731
ANITE GROUP*
Supplier of data communication
and software products
(Networking/Communications
Infrastructure) 400,000 354,782
BTG
Technology transfer
company assisting in the
commercialization of
technological inventions
(Computer and
Business Services) 585,000 3,255,167
CABLE & WIRELESS
Provider of telecommunication
services (Telecommunications) 424,000 4,778,914
CELLTECH*
Pharmaceutical company
active in the development
and research of new
therapeutic products
(Medical Products and
Technology) 176,600 1,078,721
COLT TELECOM GROUP*
Provider of telecommunication
services (Telecommunications) 480,000 6,072,797
CRT GROUP
Provider of training and
recruitment services;
publisher of multimedia
products (Computer and
Business Services) 900,000 2,583,047
DRUID
Provider of consulting services
for information technology
management (Computer and
Business Services) 237,500 3,885,135
EIDOS*
Developer of entertainment
software (Computer Software) 242,000 3,361,392
GENERAL ELECTRIC
Supplier of diversified
electronics (Electronics) 1,035,000 8,270,646
- ----------------
See footnotes on page 62.
58
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Technology Fund
SHARES VALUE
----------- ------------
UNITED KINGDOM (CONTINUED)
ILION GROUP++
Networking equipment
distributor (Distribution) 1,616,914 $ 1,447,659
LINX PRINTING TECHNOLOGIES++
Manufacturer of specialized
printers (Miscellaneous) 570,000 1,096,979
LOGICA
Supplier of computer
services (Computer
and Business Services) 201,000 6,786,335
MISYS
Provider of computer
services, and software
and hardware solutions
(Computer Software) 601,700 4,198,960
PREMIER FARNELL
Distributor of electronic
components (Distribution) 475,000 1,331,478
PSION
Manufacturer of hand-held
computers (Computer
Hardware/Peripherals) 527,900 4,408,369
RM
Supplier of integrated
information technology
solutions to educational
markets (Networking/
Communication
Infrastructure) 1,400,000 8,375,868
TOROTRAK*
Designer and developer of
automobile transmission
systems (Machinery and
Equipment) 585,000 993,682
VODAFONE
Cellular services operator
(Telecommunications) 500,000 6,673,081
----------------
78,110,023
----------------
UNITED STATES 52.46%
3DO*
Developer of entertainment
software (Computer Software) 400,000 1,262,500
ACTIVISION*
Developer of entertainment
software (Computer Software) 253,400 2,700,294
UNITED STATES (CONTINUED)
AMDOCS*
Provider of software solutions
for the telecommunication
industry (Computer Software) 200,000 $ 2,600,000
AMKOR TECHNOLOGY*
Provider of semiconductor
packaging and test services
(Semiconductors) 1,000,000 4,890,625
APEX PC SOLUTIONS*
Developer and marketer of
switching systems for computer
network administrators
(Computer Hardware/
Peripherals) 250,000 6,515,625
AUTODESK
Developer of software for
architectural and mechanical
design, data management,
and mapping (Computer
Software) 300,000 9,403,125
C-CUBE MICROSYSTEMS*
Provider of digital video
compression and
decompression circuits and
systems (Semiconductors) 278,100 5,005,800
CADENCE DESIGN SYSTEM*
Manufacturer of electronic
design automation software
(Computer Software) 400,000 8,550,000
CHS ELECTRONICS*
Distributor of personal
computers, networking
products, and software
(Electronics) 300,000 2,925,000
CMP MEDIA (CLASS A)*++
Technology-oriented magazine
and newspaper publisher
(Media) 800,000 7,800,000
COGNEX*
Manufacturer of machine
vision systems (Electronics
Capital Equipment) 300,000 4,659,375
CREDENCE SYSTEMS*
Manufacturer of automated
semiconductor test
equipment (Electronics
Capital Equipment) 215,000 3,211,562
- ----------------
See footnotes on page 62.
59
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Technology Fund
SHARES VALUE
----------- ------------
UNITED STATES (CONTINUED)
DALLAS SEMICONDUCTOR
Manufacturer of mixed signal
integrated circuits
(Semiconductors) 150,000 $ 5,550,000
DATA GENERAL*
Provider of computer systems
such as servers and storage
devices (Computer
Hardware/Peripherals) 60,000 1,020,000
DII GROUP*
Provider of contract
manufacturing services
(Contract Manufacturing/
Circuit Boards) 400,000 5,875,000
DSP COMMUNICATIONS
Developer of chipsets used in
wireless communication
handsets (Networking/
Communications Infrastructure) 300,000 2,943,750
ECHELON*
Provider of software products
and services used in the design
of computer networks
(Computer Software) 600,000 1,556,250
ELECTRO SCIENTIFIC INDUSTRIES*
MANUFACTURER OF MEMORY CIRCUIT
REPAIR SYSTEMS (ELECTRONICS
CAPITAL EQUIPMENT) 100,000 2,506,250
ELECTRONIC ARTS*
Developer of entertainment
software (Computer Software) 350,000 14,350,000
ELECTRONICS FOR IMAGING*
Manufacturer of peripherals for
color printers and copiers
(Computer Hardware/
Peripherals) 300,000 7,228,125
EMC*
Manufacturer of enterprise
storage devices (Computer
Hardware/Peripherals) 500,000 32,187,500
UNITED STATES (CONTINUED)
FIRST DATA
Information processor of credit
and debit card, check, wire, and
Internet transactions (Computer
and Business Services) 150,000 $ 3,975,000
FLEXTRONICS INTERNATIONAL*
Contract manufacturer of
electronic components
(Contract Manufacturing/
Circuit Boards) 100,000 5,196,875
GENESYS TELECOMMUNICATIONS
LABORATORIES*
Provider of software for
integrating computer resources
with telephony and
telecommunication media
(Computer Software) 250,000 6,593,750
HADCO*
Manufacturer of complex
printed circuit boards
(Contract Manufacturing/
Circuit Boards) 89,700 2,808,731
HNC SOFTWARE*
Developer and vendor of
software for mission-critical
decision applications
(Computer Software) 300,000 10,087,500
JABIL CIRCUIT*
Contract manufacturer of
electronic components
(Contract Manufacturing/
Circuit Boards) 100,000 4,631,250
KLA-TENCOR*
Manufacturer of wafer inspection
and metrology equipment
(Electronics Capital
Equipment) 240,600 8,879,644
LATTICE SEMICONDUCTOR*
Designer and manufacturer of
programmable logic devices
(Semiconductors) 150,000 5,109,375
- ----------------
See footnotes on page 62.
60
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Technology Fund
SHARES VALUE
----------- ------------
UNITED STATES (CONTINUED)
THE LEARNING COMPANY*
Developer of education and
reference software for
the PC (Computer Software) 600,000 $ 15,487,500
LEVEL ONE COMMUNICATIONS*
Developer of silicon
connectivity solutions used in
high-speed communication
applications (Semiconductors) 175,000 4,610,156
LEXMARK INTERNATIONAL GROUP
(CLASS A)*
Manufacturer of laser and
inkjet printers and cartridges
(Computer Hardware/
Peripherals) 250,000 17,484,375
MAXIM INTEGRATED PRODUCTS*
MANUFACTURER OF LINEAR AND
MIXED-SIGNAL INTEGRATED
CIRCUITS (SEMICONDUCTORS) 485,000 17,293,281
MICROCHIP TECHNOLOGY*
Supplier of field programmable
microcontrollers
(Semiconductors) 362,500 9,832,812
MICROSOFT*
Provider of computer software
products (Computer Software) 150,000 15,885,938
NEOMAGIC*
Developer of graphics circuits
for notebook computers
(Semiconductors) 300,000 5,034,375
NETWORK ASSOCIATES*
Supplier of network security
and anti-virus utilities
(Computer Software) 400,811 17,046,993
NTL*
Provider of cable television,
Internet access, and telephone
services (Telecommunications) 45,000 2,157,188
PACIFIC GATEWAY EXCHANGE*
International telecommunication
carrier (Telecommunications) 75,000 2,175,000
PARAMETRIC TECHNOLOGY*
Developer of mechanical
design software
(Computer Software) 400,000 6,662,500
UNITED STATES (CONTINUED)
PLATINUM TECHNOLOGY*
Provider of systems
management software
(Computer Software) 400,000 $ 6,550,000
RENAISSANCE WORLDWIDE*
Provider of information
technology consulting and
services (Computer and
Business Services) 58,000 546,469
SCI SYSTEMS*
Manufacturer of electronic
components (Contract
Manufacturing/Circuit Boards) 200,000 7,900,000
SMART MODULAR TECHNOLOGY*
Assembler of memory modules
(Contract Manufacturing/
Circuit Boards) 211,700 4,425,853
SPLASH TECHNOLOGY*
Manufacturer of peripherals
for color printers and
copiers (Computer
Hardware/Peripherals) 200,000 1,712,500
STORAGE TECHNOLOGY*
Designer and manufacturer
of tape- and disk-based
data storage equipment
(Computer Hardware/
Peripherals) 300,000 10,031,250
STRUCTURAL DYNAMICS RESEARCH*
Developer of mechanical
design software
(Computer Software) 400,000 5,800,000
SYNOPSYS*
Developer of integrated
circuit design software
(Computer Software) 390,000 17,610,937
TELE-COMMUNICATIONS*
INVESTMENT COMPANY
WHICH HAS STAKES IN
INTERNATIONAL CABLE, INTERNET,
AND TELEPHONE VENTURES
(TELECOMMUNICATIONS) 100,000 4,206,250
- ----------------
See footnotes on page 62.
61
<PAGE>
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1998
Seligman Henderson Global Technology Fund
SHARES VALUE
----------- ------------
UNITED STATES (CONTINUED)
TELE-COMMUNICATIONS (SERIES A)
TCI VENTURES GROUP*
Investment company
which has stakes in
international cable, Internet,
and telephone ventures
(Telecommunications) 200,000 $ 3,718,750
TERADYNE*
Manufacturer of semiconductor
test equipment (Electronics
Capital Equipment) 150,000 4,875,000
VEECO INSTRUMENTS*
Ion beam etching and surface
measurement systems for disk
drive heads (Electronics
Capital Equipment) 400,000 11,912,500
UNITED STATES (CONTINUED)
ZIFF-DAVIS*
Integrated media and
marketing company focused
on computer and
Internet-related technology
(Media) 600,000 $ 3,975,000
----------------
376,957,533
----------------
TOTAL INVESTMENTS 93.95%
(Cost $612,547,701) 675,071,480
OTHER ASSETS
LESS LIABILITIES 6.05% 43,486,986
----------------
NET ASSETS 100.00% $718,558,466
================
- ---------------------
* 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.
62
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<CAPTION>
EMERGING GLOBAL GLOBAL
MARKETS GROWTH SMALLER GLOBAL
INTERNATIONAL GROWTH OPPORTUNITIES COMPANIES TECHNOLOGY
FUND FUND FUND FUND FUND
------------- --------- ------------- --------- ----------
ASSETS:
Investments, at value (see portfolios of investments):
<S> <C> <C> <C> <C> <C>
Common stocks* $84,360,125 $50,799,845 $170,215,581 $779,737,667 $675,071,480
Preferred stocks -- -- -- 5,579,390 --
Bonds 258,994 113,255 151,485 1,796,709 --
Short-Term Holdings -- -- -- 10,000,000 --
------------ ------------ ------------- ------------ ------------
Total investments 84,619,119 50,913,100 170,367,066 797,113,766 675,071,480
Cash 10,246,667 5,058,919 12,228,659 51,709,455 99,703,592
Receivable for securities sold 3,888,299 950,839 4,922,023 9,213,807 123,892,223
Receivable for dividends and interest 221,478 83,462 414,492 2,976,010 638,928
Unrealized appreciation on forward
currency contracts 169,261 227 511,396 1,516,570 2,699
Receivable for Capital Stock sold 106,422 194,064 200,548 36,843,752 461,053
Expenses prepaid to shareholder service agent 41,369 46,146 81,755 390,098 340,556
Other 8,337 1,360 11,487 13,951 11,946
------------ ------------ ------------- ------------ ------------
TOTAL ASSETS 99,300,952 57,248,117 188,737,426 899,777,409 900,122,477
------------ ------------ ------------- ------------ ------------
LIABILITIES:
Payable for securities purchased 6,199,043 2,881,200 1,494,232 15,364,349 172,405,446
Unrealized depreciation on forward
currency contracts 1,095,511 229 1,938,502 8,607,015 3,024,358
Payable for Capital Stock repurchased 337,880 212,650 620,470 3,720,961 4,782,592
Accrued expenses, taxes, and other 227,186 161,773 363,850 1,707,230 1,351,615
------------ ------------ ------------- ------------ ------------
TOTAL LIABILITIES 7,859,620 3,255,852 4,417,054 29,399,555 181,564,011
------------ ------------ ------------- ------------ ------------
NET ASSETS $91,441,332 $53,992,265 $184,320,372 $870,377,854 $718,558,466
============ ============ ============= ============ ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par:
Class A $ 2,485 $ 4,689 $ 10,177 $ 26,572 $ 38,147
Class B 581 3,151 2,334 16,531 4,889
Class D 2,215 2,683 6,857 20,273 15,383
Additional paid-in capital 76,821,391 81,760,173 137,061,431 860,146,972 658,974,176
Accumulated net investment loss (12,108) (1,573) (3,088) (11,300) (7,955)
Undistributed/accumulated net realized gain
(loss) on investments 955,012 (22,888,498) 387,169 (18,059,913) --
Net unrealized appreciation (depreciation)
of investments 11,559,751 (2,995,488) 46,926,669 30,703,189 62,135,589
Net unrealized appreciation (depreciation) on
translation of assets and liabilities denominated in
foreign currencies and forward currency contracts 2,112,005 (1,892,872) (71,177) (2,464,470) (2,601,763)
------------ ------------ ------------- ------------ ------------
Net Assets $91,441,332 $53,992,265 $184,320,372 $870,377,854 $718,558,466
============ ============ ============= ============ ============
NET ASSETS:
Class A $44,121,550 $24,293,781 $ 97,947,090 $374,889,859 $475,951,535
Class B $ 9,834,634 $16,031,000 $ 21,930,546 $222,495,651 $ 58,575,177
Class D $37,485,148 $13,667,484 $ 64,442,736 $272,992,344 $184,031,754
SHARES OF CAPITAL STOCK OUTSTANDING:
Class A 2,485,160 4,688,726 10,177,460 26,572,416 38,147,171
Class B 580,881 3,150,752 2,333,634 16,530,974 4,889,211
Class D 2,214,767 2,683,562 6,856,670 20,272,979 15,382,625
NET ASSET VALUE PER SHARE:
Class A $17.75 $5.18 $9.62 $14.11 $12.48
Class B $16.93 $5.09 $9.40 $13.46 $11.98
Class D $16.93 $5.09 $9.40 $13.47 $11.96
</TABLE>
- ---------------
* Includes affiliated issuers (issuers in which a Series' holdings representing
5% or more of the outstanding voting securities) with cost of $14,649,952 and
$32,880,883, and value of $17,230,342 and $17,594,638, respectively, for the
Global Smaller Companies Fund and the Global Technology Fund. See Notes to
Financial Statements.
63
<PAGE>
STATEMENTS OF OPERATIONS
For the Year Ended October 31, 1998
<TABLE>
<CAPTION>
EMERGING GLOBAL GLOBAL
MARKETS GROWTH SMALLER GLOBAL
INTERNATIONAL GROWTH OPPORTUNITIES COMPANIES TECHNOLOGY
FUND FUND FUND FUND FUND
------------- --------- ------------- --------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C>
Dividends* $1,617,890 $ 1,293,774 $ 2,110,427 $10,598,335 $3,025,877
Interest 189,181 440,815 266,884 1,327,988 2,171,660
------------ ------------ ----------- ------------ ------------
Total Investment Income** 1,807,071 1,734,589 2,377,311 11,926,323 5,197,537
------------ ------------ ----------- ------------ ------------
EXPENSES:
Management fees 954,634 1,034,015 1,982,193 9,995,944 8,247,297
Distribution and service fees 590,772 553,783 1,151,017 6,917,745 4,116,934
Shareholder account services 226,490 311,815 501,782 2,563,167 2,184,002
Custody and related services 121,639 118,489 147,188 687,842 452,718
Registration 67,351 59,269 58,836 115,240 126,018
Auditing and legal fees 53,425 56,583 53,654 55,432 55,023
Shareholder reports and communications 40,295 39,960 85,258 526,267 611,333
Directors' fees and expenses 16,325 17,801 21,713 79,122 53,855
Miscellaneous 6,270 5,996 10,647 37,152 30,873
------------ ------------ ----------- ------------ ------------
Total Expenses 2,077,201 2,197,711 4,012,288 20,977,911 15,878,053
------------ ------------ ----------- ------------ ------------
Net Investment Loss (270,130) (463,122) (1,634,977) (9,051,588) (10,680,516)
------------ ------------ ----------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments*** 2,327,950 (17,519,924) 2,512,281 142,339 47,415,066
Net realized loss from foreign currency
transactions*** (700,001) (2,152,860) (2,270,172) (16,429,116) (858,280)
Net change in unrealized appreciation
of investments 1,271,316 (5,035,191) 13,049,405 (51,038,110) (44,894,952)
Net change in unrealized depreciation on
translation of assets and liabilities denominated
in foreign currencies and forward
currency contracts 2,794,538 370,569 3,910,046 19,214,602 5,026,539
------------ ------------ ----------- ------------ ------------
Net Gain (Loss) on Investments and Foreign
Currency Transactions 5,693,803 (24,337,406) 17,201,560 (48,110,285) 6,688,373
------------ ------------ ----------- ------------ ------------
Increase (Decrease) in Net Assets
from Operations $5,423,673 $(24,800,528) $15,566,583 $(57,161,873) $(3,992,143)
============ ============ =========== ============ ===========
- ----------------
* Includes dividend income from affiliated issuers
as follows: -- -- -- -- $ 79,847
** Net of foreign taxes withheld as follows: $169,723 $105,168 $165,219 $1,184,791 443,373
*** Includes net realized gain (loss) (including effect
of foreign currency transactions) from affiliated
issuers as follows: -- -- -- 4,380,273 (683,067)
See Notes to Financial Statements.
</TABLE>
Statements of Changes in Net Assets
64
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING MARKETS
FUND GROWTH FUND
------------------------------ --------------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
------------------------------ --------------------------------
1998 1997 1998 1997
-------------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment loss ................................. $ (270,130) $ (634,722) $ (463,122) $ (882,224)
Net realized gain (loss) on investments ............. 2,327,950 12,612,987 (17,519,924) (148,704)
Net realized loss from foreign currency transactions (700,001) (6,357,450) (2,152,860) (2,880,868)
Net change in unrealized appreciation/depreciation
of investments ................................. 1,271,316 1,745,746 (5,035,191) 2,540,710
Net change in unrealized depreciation on translation
of assets and liabilities denominated in foreign
currencies and forward currency contracts ...... 2,794,538 1,928,031 370,569 (1,858,237)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ... 5,423,673 9,294,592 (24,800,528) (3,229,323)
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A ........................................... (3,073,832) (2,600,409) -- --
Class B ........................................... (442,506) (155,283 -- --
Class D ........................................... (2,927,252) (2,512,690) -- --
------------- ------------- ------- ----- -------------
Decrease in Net Assets from Distributions ........... (6,443,590) (5,268,382) -- --
------------- ------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ........................................... 20,944,419 8,433,918 9,097,908 24,772,191
Class B ........................................... 4,648,002 3,830,342 3,958,564 21,632,060
Class D ........................................... 6,404,661 7,260,659 3,323,782 16,452,673
Exchanged from associated Funds:
Class A ........................................... 51,542,834 42,509,534 19,937,244 32,454,783
Class B ........................................... 5,569,000 546,088 477,703 3,193,456
Class D ........................................... 31,181,338 17,279,201 2,593,655 18,323,632
Shares issued in payment of gain distributions:
Class A ........................................... 2,644,650 1,907,643 -- --
Class B ........................................... 416,868 145,807 -- --
Class D ........................................... 2,517,142 2,266,472 -- --
------------- ------------- ------------- -------------
Total ............................................... 125,868,914 84,179,664 39,388,856 116,828,795
------------- ------------- ------------- -------------
Cost of shares repurchased:
Class A ........................................... (24,740,448) (16,889,634) (12,803,905) (12,525,580)
Class B ........................................... (999,582) (285,808) (4,804,465) (2,633,033)
Class D ........................................... (9,945,313) (13,972,244) (6,863,680) (4,107,703)
Exchanged into associated Funds:
Class A ........................................... (52,470,373) (43,254,302) (25,474,706) (19,719,002)
Class B ........................................... (5,611,693) (811,812) (4,852,353) (2,336,033)
Class D ........................................... (33,074,289) (21,316,046) (9,935,797) (12,208,736)
------------- ------------- ------------- -------------
Total ............................................... (126,841,698) (96,529,846) (64,734,906) (53,530,087)
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ..................... (972,784) (12,350,182) (25,346,050) 63,298,708
------------- -------------
INCREASE (DECREASE) IN NET ASSETS ................... (1,992,701) (8,323,972) (50,146,578) 60,069,385
NET ASSETS:
Beginning of year ................................... 93,434,033 101,758,005 104,138,843 44,069,458
------------- ------------- ------------- -------------
END OF YEAR ......................................... $ 91,441,332 $ 93,434,033 $ 53,992,265 $ 104,138,843
============== ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
GLOBAL GROWTH
OPPORTUNITIES FUND
-----------------------------
YEAR ENDED OCTOBER 31,
------------------------------
1998 1997
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment loss ................................. $ (1,634,977) $ (1,712,413)
Net realized gain (loss) on investments ............. 2,512,281 14,475,563
Net realized loss from foreign currency transactions (2,270,172) (5,288,647)
Net change in unrealized appreciation/depreciation
of investments ................................. 13,049,405 16,851,124
Net change in unrealized depreciation on translation
of assets and liabilities denominated in foreign
currencies and forward currency contracts ...... 3,910,046 (1,171,623)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ... 15,566,583 23,154,004
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A ........................................... (4,861,075) --
Class B ........................................... (875,292) --
Class D ........................................... (2,900,851) --
------------- -------------
Decrease in Net Assets from Distributions ........... (8,637,218) --
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ........................................... 7,080,116 12,893,684
Class B ........................................... 4,937,582 9,863,991
Class D ........................................... 6,765,527 11,847,943
Exchanged from associated Funds:
Class A ........................................... 29,284,180 4,188,658
Class B ........................................... 3,543,331 1,014,306
Class D ........................................... 12,674,214 5,672,140
Shares issued in payment of gain distributions:
Class A ........................................... 4,427,520 --
Class B ........................................... 752,541 --
Class D ........................................... 2,635,591 --
------------- -------------
Total ............................................... 72,100,602 45,480,722
------------- -------------
Cost of shares repurchased:
Class A ........................................... (26,372,863) (24,937,167)
Class B ........................................... (3,664,340) (1,352,960)
Class D ........................................... (15,267,156) (8,496,389)
Exchanged into associated Funds:
Class A ........................................... (30,358,305) (5,055,701)
Class B ........................................... (3,263,092) (980,251)
Class D ........................................... (8,455,082) (5,447,579)
------------- -------------
Total ............................................... (87,380,838) (46,270,047)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ..................... (15,280,236) (789,325)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS ................... (8,350,871) 22,364,679
NET ASSETS:
Beginning of year ................................... 192,671,243 170,306,564
------------- -------------
END OF YEAR ......................................... $ 184,320,372 $ 192,671,243
============= =============
</TABLE>
- --------------
See Notes to Financial Statements.
65
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL SMALLER GLOBAL TECHNOLOGY
COMPANIES FUND FUND
------------------------------------ --------------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
------------------------------------ --------------------------------
1998 1997 1998 1997
---------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment loss ................................. $ (9,051,588) $ (3,884,361) $ (10,680,516) $ (11,314,644)
Net realized gain on investments .................... 142,339 48,603,936 47,415,066 160,468,225
Net realized loss from foreign
currency transactions .......................... (16,429,116) (7,015,314) (858,280) (2,395,338)
Net change in unrealized appreciation/depreciation
of investments ................................. (51,038,110) 49,634,066 (44,894,952) 83,247,639
Net change in unrealized depreciation on translation
of assets and liabilities denominated in foreign
currencies and forward currency contracts ...... 19,214,602 (18,276,737) 5,026,539 (1,868,340)
--------------- --------------- --------------- ---------------
Increase (Decrease) in Net Assets from
Operations ......................................... (57,161,873) 69,061,590 (3,992,143) 228,137,542
--------------- --------------- --------------- ---------------
Distributions to Shareholders:
Net realized gain on investments:
Class A ........................................... (17,124,087) (16,938,227) (99,536,281) --
Class B ........................................... (10,275,288) (5,226,787) (9,666,516) --
Class D ........................................... (15,357,547) (14,328,867) (41,021,514) --
--------------- --------------- --------------- ---------------
Decrease in Net Assets from Distributions ........... (42,756,922) (36,493,881) (150,224,311) --
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A ........................................... 152,853,507 161,210,830 56,563,795 53,544,965
Class B ........................................... 43,401,281 160,923,469 15,204,426 30,651,040
Class D ........................................... 39,263,963 129,977,455 15,269,385 27,634,257
Exchanged from associated Funds:
Class A ........................................ 230,629,818 38,707,367 198,014,893 131,077,214
Class B ........................................... 5,918,063 8,353,794 4,387,134 7,378,122
Class D ........................................... 42,068,010 22,459,122 121,982,389 31,456,056
Shares issued in payment of gain distributions:
Class A ........................................... 15,984,486 15,752,220 93,006,394 --
Class B ........................................... 9,575,151 4,800,702 8,897,918 --
Class D ........................................... 14,283,328 13,378,106 38,405,363 --
--------------- --------------- --------------- ---------------
Total ............................................... 553, 977,607 555,563,065 551,731,697 281,741,654
--------------- --------------- --------------- ---------------
Cost of shares repurchased:
Class A ........................................... (175,015,238) (100,080,081) (137,745,943) (119,817,104)
Class B ........................................... (29,719,894) (19,743,793) (6,421,499) (4,478,196)
Class D ........................................... (89,449,184) (61,956,065) (47,125,132) (46,935,136)
Exchanged into associated Funds:
Class A ........................................... (247,200,113) (46,909,181) (216,262,283) (141,838,011)
Class B ........................................... (26,278,385) (17,273,307) (5,472,802) (6,449,635)
Class D ........................................... (68,639,834) (29,350,663) (135,114,189) (37,285,917)
--------------- --------------- --------------- ---------------
Total ............................................... (636,302,648) (275,313,090) (548,141,848) (356,803,999)
--------------- --------------- --------------- ---------------
Increase (Decrease) in Net Assets from
Capital Share Transactions ........................ (82,325,041) 280,249,975 3,589,849
--------------- --------------- --------------- ---------------
Increase (Decrease) in Net Assets ................... (182,243,836) 312,817,684 (150,626,605) 153,075,197
NET ASSETS:
Beginning of year ................................... 1,052,621,694 739,804,010 869,185,071 716,109,874
--------------- --------------- --------------- ---------------
End of Year ......................................... $ 870,377,858 $ 1,052,621,694 $ 718,558,466 $ 869,185,071
=============== =============== =============== ===============
</TABLE>
- -----------
See Notes to Financial Statements.
66
<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"). Each
Series of the Fund offers three classes of shares.
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 charge ("CDSC") 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 CDSC, 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 CDSC, 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 an exchange 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 for which there is no last sales price, 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.
67
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Fund separates that portion of the results of operations resulting from
changes in the foreign exchange rates from the fluctuations arising from changes
in the market prices of securities held in the portfolio. Similarly, the Fund
separates the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of portfolio securities sold during
the period.
c. 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.
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.
For the year ended October 31, 1998, the Global Technology Fund redeemed
42,108,514 of its shares from shareholders aggregating $548,141,848 of which
approximately $22,600,000 represents capital gain distributions. This
information is provided for federal income tax purposes only.
On November 18, 1998, a distribution of $0.158 per share, aggregating
$9,093,102, was declared from net realized long-term gains from investment
transactions for the Global Technology Fund. The capital gain was paid on
November 23, 1998, to shareholders of record on November 18, 1998.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding short-term investments, for the year ended October 31,
1998, were as follows:
SERIES PURCHASES SALES
- -------------------- ------------- --------------
International Fund $ 74,353,775 $ 85,421,336
Emerging Markets
Growth Fund 69,700,870 80,785,932
Global Growth
Opportunities Fund 86,868,064 118,986,574
Global Smaller
Companies Fund 492,779,712 693,548,503
Global Technology Fund 688,465,629 862,522,906
68
<PAGE>
NOTES TO FINANCIAL STATEMENTS
At October 31, 1998, 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 $ 16,433,547 $ 1,837,759
Emerging Markets
Growth Fund 6,137,469 11,028,879
Global Growth
Opportunities Fund 51,939,755 3,668,839
Global Smaller
Companies Fund 135,382,787 102,987,503
Global Technology Fund 135,065,742 85,736,896
4. MANAGEMENT FEE, DISTRIBUTION 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. 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 other Series' average daily net assets. Prior to July
1, 1998, Seligman Henderson Co., an entity owned 50% each by the Manager and
Henderson International, Inc., a subsidiary of Henderson plc, supervised and
directed the Fund's global investments pursuant to subadvisory agreements with
the Manager. Under the subadvisory agreements, the Manager paid Seligman
Henderson Co. 1.15% per annum of the average daily net assets of the Emerging
Markets Growth Fund and 0.90% per annum of each of the other Series' average
daily net assets.
On March 30, 1998, AMP Limited, an Australian life insurance and financial
services company, completed an acquisition of Henderson plc, which resulted in
the termination of the Fund's subadvisory agreements. The Fund's Board of
Directors approved interim subadvisory agreements pursuant to which Seligman
Henderson Co. continued to supervise and direct the Fund's global investments.
The Fund's directors also approved a proposed new subadvisory agreement pursuant
to which Henderson Investment Management Limited (the "Subadviser"), a
wholly-owned subsidiary of Henderson plc, would replace Seligman Henderson Co.
as subadviser to theFund and be responsible for furnishing investment advice,
research and assistance with respect to the Fund's international investments.
Under the new agreement, the Manager is responsible for the Fund's US
investments and has overall responsibility for management of the Fund. Both the
interim and the new subadvisory agreements were approved by vote of the
shareholders of the Fund on June 30, 1998. Under the new subadvisory agreement,
the Manager pays the Subadviser a subadvisory fee for each Series at a rate of
0.90% per annum of the average monthly assets under the Subadviser's
supervision.
Compensation of all officers of the Fund, all directors of the Fund who are
employees or consultants of the Manager, and all personnel of the Fund and the
Manager is paid by the Manager or by Henderson plc.
Seligman Advisors, Inc. (the "Distributor") (formerly Seligman Financial
Services, Inc.), agent for the distribution of each Series' shares, and an
affiliate of the Manager, received concessions after commissions were paid to
dealers for sales of Class A shares as follows:
DISTRIBUTOR DEALER
SERIES CONCESSIONS COMMISSIONS
- ----------------------- --------------- ---------------
International Fund $13,622 $104,107
Emerging Markets
Growth Fund 11,459 89,616
Global Growth
Opportunities Fund 19,994 156,963
Global Smaller
Companies Fund 94,085 753,981
Global Technology Fund 121,127 978,251
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, 1998, 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 $97,702, $80,916,
$261,123, $982,147, and $1,334,768, respectively, or 0.21%, 0.23%, 0.24%, 0.24%,
and 0.24%, 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
69
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 1998, 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 $ 84,989 $ 408,081
Emerging Markets
Growth Fund 242,231 230,636
Global Growth
Opportunities Fund 214,020 675,874
Global Smaller
Companies Fund 2,534,097 3,401,501
Global Technology Fund 599,016 2,183,150
The Distributor is entitled to retain any CDSC 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, 1998, such charges were as follows:
Series Amount
- ------------- --------
International Fund $ 7,109
Emerging Markets Growth Fund 16,136
Global Growth Opportunities Fund 15,178
Global Smaller
Companies Fund 118,278
Global Technology Fund 42,732
The Distributor has sold its rights to collect any CDSC imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSC 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, 1998, were as follows:
Series Amount
------------- --------
International Fund $ 7,600
Emerging Markets Growth Fund 8,034
Global Growth Opportunities Fund 8,743
Global Smaller Companies Fund 2,534
Global Technology Fund 28,886
Seligman Services, Inc., an affiliate of the Manager, is eligible to
receive commissions from certain sales of shares of the Fund, as well as
distribution and service fees pursuant to the Plan. For the year ended October
31, 1998, Seligman Services, Inc. received commissions from the sale of shares
of each Series and distribution and service fees, pursuant to the Plan, as
follows:
Distribution
Series Commissions and service fees
-------- --------- -------------------
nternational Fund $ 8,971 $20,727
Emerging Markets
Growth Fund 647 6,219
Global Growth
Opportunities Fund 10,047 2,295
Global Smaller
Companies Fund 45,438 11,939
Global Technology Fund 90,491 26,484
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 $ 226,490
Emerging Markets Growth Fund 311,815
Global Growth Opportunities Fund 501,782
Global Smaller Companies Fund 2,563,167
Global Technology Fund 2,184,002
Certain officers and directors of the Fund are officers or directors of the
Manager, Seligman Henderson Co., 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. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. Deferred fees
and related accrued earnings are not deductible by the Fund for federal income
tax purposes until such amounts are paid. The annual cost of such fees and
earnings accrued thereon is included in directors' fees and
70
<PAGE>
expenses, and the accumulated balances thereof at October 31, 1998, are
included in other liabilities, as follows:
SERIES AMOUNT
- ------------------ ----------
International Fund $12,108
Emerging Markets GrowthFund 1,573
Global Growth Opportunities Fund 3,088
Global Smaller Companies Fund 11,300
Global Technology Fund 7,955
5. COMMITTED LINE OF CREDIT -- Effective July 1, 1998,the F und terminated its
$100 million committed line of credit and entered into a joint $800 million
committed line of credit that is shared by substantially all funds in the
Seligman Group of Investment Companies. The Fund's borrowings are limited to 5%
of its net assets. Borrowings pursuant to the credit facility are subject to
interest at a rate equal to the overnight federal funds rate plus 0.50% on an
overnight basis. The Fund incurs a commitment fee of 0.80% per annum on its
share of 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 on an annual basis. At October
31, 1998, the Emerging Markets Growth Fund, the Global Growth Opportunities
Fund, and the Global Smaller Companies Fund had net capital loss carryforwards
for federal income tax purposes of $23,269,538, $1,139,976, and $22,271,988,
respectively, which are available for offsets against future taxable capital
gains, expiring in various amounts through 2006. 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 carryforwards.
7. AFFILIATED ISSUERS -- As defined under the Investment Company Act of 1940, as
amended, affiliated issuers are those issuers in which a Series' holdings of an
issuer represent 5% or more of the outstanding voting securities of the issuer.
A summary of the Fund's transactions in the securities of these issuers during
the year ended October 31, 1998, is as follows:
<TABLE>
<CAPTION>
GROSS GROSS SALES
Beginning PURCHASES AND Ending Realized Dividend Ending
Affiliate Shares AND ADDITIONS REDUCTIONS Shares Gain (LOSS) Income Value
- ----------- ------------ -------------- ----------- ----------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
GLOBAL SMALLER
COMPANIES FUND
Bon Appetit Holding .. 12,353 -- 4,357 7,996 $ 793,929 -- $ 4,420,197
La Doria ............. 2,252,166 41,925 608,000 1,686,091 (422,782) -- 5,922,433
L'Europeenne
d'Extincteurs ...... 142,402 -- 10,177 132,225 67,359 -- 6,887,712
FactSet Research
Systems ........... 500,000 -- 500,000 -- 5,467,036 -- --
Simon Transportation
Services ........... 270,000 -- 270,000 -- (1,525,269) -- --
----------- ----------- -----------
$ 4,380,273* -- $17,230,342
=========== =========== ===========
GLOBAL TECHNOLOGY FUND
CMP Media (Class A) .. 700,000 187,400 87,400 800,000 $ (683,067) -- $ 7,800,000
IlionGroup ........... 1,616,914 -- -- 1,616,914 -- $ 63,699 1,447,659
Linx Printing
Technologies .... 570,000 -- -- 570,000 -- 16,148 1,096,979
Tecnomatix
Technologies .... -- 500,000 -- 500,000 -- -- 7,250,000
----------- ----------- -----------
$ (683,067) $ 79,847 $17,594,638
=========== =========== ===========
</TABLE>
- ---------------
*Includes net realized loss from foreign currency transactions of $348,058.
71
<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. At
October 31, 1998, 400,000,000 shares were authorized for each Series of the
Fund, all at a par value of $.001 per share.
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING MARKETS GLOBAL GROWTH
FUND GROWTH FUND OPPORTUNITIES FUND
------------------------ ------------------------- ---------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
------------------------ ------------------------- ---------------------------
1998 1997 1998 1997 1998 1997
----------- ----------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares:
Class A ..................................... 1,132,123 469,762 1,325,518 2,993,423 701,595 1,449,286
Class B ..................................... 250,816 219,118 570,569 2,612,415 498,253 1,123,386
Class D ..................................... 355,632 418,939 486,492 2,012,007 682,270 1,356,808
Exchanged from associated Funds:
Class A ..................................... 2,810,206 2,324,501 3,141,179 4,057,896 2,882,396 476,273
Class B ..................................... 297,215 30,506 72,054 391,346 358,767 110,609
Class D ..................................... 1,774,064 987,349 406,998 2,226,146 1,270,285 649,300
Shares issued in payment of gain distributions:
Class A ..................................... 162,848 112,811 -- -- 500,843 --
Class B ..................................... 26,671 8,858 -- -- 86,294 --
Class D ..................................... 161,046 137,696 -- -- 302,772 --
----------- ----------- ----------- ----------- ----------- -----------
Total ......................................... 6,970,621 4,709,540 6,002,810 14,293,233 7,283,475 5,165,662
----------- ----------- ----------- ----------- ----------- -----------
Shares repurchased:
Class A ..................................... (1,349,489) (966,373) (1,916,244) (1,498,674) (2,727,222) (2,814,964)
Class B ..................................... (58,028) (15,472) (720,647) (312,134) (387,874) (147,394)
Class D ..................................... (568,487) (822,399) (1,033,695) (502,678) (1,596,162) (965,125)
Exchanged into associated Funds:
Class A ..................................... (2,842,925) (2,337,951) (3,863,525) (2,482,147) (3,027,589) (568,846)
Class B ..................................... (302,774) (45,879) (737,349) (284,989) (352,291) (110,456)
Class D ..................................... (1,875,479) (1,216,560) (1,478,158) (1,454,997) (895,935) (626,078)
----------- ----------- ----------- ----------- ----------- -----------
Total ......................................... (6,997,182) (5,404,634) (9,749,618) (6,535,619) (8,987,073) (5,232,863)
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in shares ................. (26,561) (695,094) (3,746,808) 7,757,614 (1,703,598) (67,201)
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SMALLER GLOBAL TECHNOLOGY
COMPANIES FUND FUND
-------------------------- --------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
-------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Sale of shares:
Class A ..................................... 10,022,623 10,709,397 4,176,254 3,700,869
Class B ..................................... 2,848,299 11,006,362 1,176,951 2,147,619
Class D ..................................... 2,596,605 8,914,612 1,189,506 1,953,820
Exchanged from associated Funds:
Class A ..................................... 14,424,445 2,567,331 15,149,055 9,603,055
Class B ..................................... 401,071 578,628 357,448 599,186
Class D ..................................... 2,673,250 1,545,821 9,576,218 2,118,807
Shares issued in payment of gain distributions:
Class A ..................................... 1,085,903 1,069,396 7,189,429 --
Class B ..................................... 677,168 335,948 710,545 --
Class D ..................................... 1,009,423 936,187 3,070,660 --
----------- ----------- ----------- -----------
Total ......................................... 35,738,787 37,663,682 42,596,066 20,123,356
----------- ----------- ----------- -----------
Shares repurchased:
Class A ..................................... (11,356,046) (6,615,043) (10,448,450) (8,669,868)
Class B ..................................... (2,026,859) (1,358,539) (513,317) (325,415)
Class D ..................................... (6,095,959) (4,192,374) (3,753,667) (3,500,176)
Exchanged into associated Funds:
Class A ..................................... (15,405,894) (3,071,754) (16,445,590) (10,296,821)
Class B ..................................... (1,836,699) (1,159,574) (442,471) (519,418)
Class D ..................................... (4,534,421) (1,979,913) (2,561,251) (2,561,251)
----------- ----------- ----------- -----------
Total ......................................... (41,255,878) (18,377,197) (42,108,514) (25,872,949)
----------- ----------- ----------- -----------
Increase (decrease) in shares ................. (5,517,091) 19,286,485 487,552 (5,749,593)
=========== =========== =========== ===========
</TABLE>
72
<PAGE>
9. Outstanding Forward Exchange Currency Contracts--At October 31, 1998, the
Fund had outstanding forward exchange currency contracts to purchase or sell
foreign currencies as follows:
<TABLE>
<CAPTION>
UNREALIZED
FOREIGN IN EXCHANGE SETTLEMENT APPRECIATION
CONTRACT CURRENCY FOR US $ DATE VALUE US $ (depreciation)
- ----------- ----------- ------------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
INTERNATIONAL FUND
Purchases:
Germandeutschemarks 451,329 272,937 11/3/98 272,871 $ (66)
Spanish pesetas 13,278,322 94,440 11/3/98 94,434 (6)
Swiss francs 191,433 141,540 11/3/98 141,665 125
Swiss francs 156,781 115,365 11/4/98 116,023 658
Japanese yen 146,652,000 1,100,000 11/18/98 1,265,441 165,441
-------------
$ 166,152
=============
SALES:
Italianlira 513,322,300 313,479 11/3/98 313,575 $ (96)
Portuguese escudos 102,869,933 606,008 11/3/98 602,971 3,037
Japanese yen 517,644,000 3,600,000 11/18/98 4,466,684 (866,684)
Japanese yen 246,690,300 1,900,000 11/18/98 2,128,659 (228,659)
-------------
$ (1,092,402)
=============
EMERGING MARKETS GROWTH FUND
Purchases:
Hong Kong dollars 4,547,179 586,922 11/2/98 587,149 $ 227
=============
Sales:
Greek drachma 58,901,869 209,243 11/3/98 209,377 $ (134)
SouthAfrican rand 1,201,681 214,108 11/3/98 214,203 (95)
-------------
$ (229)
=============
GLOBAL GROWTH OPPORTUNITIES FUND
Purchases:
Japanese yen 399,960,000 3,000,000 11/18/98 3,451,204 $ 451,204
Japanese yen 354,636,000 3,000,000 11/18/98 3,060,108 60,108
-------------
$ 511,312
=============
SALES:
Singapore dollars 6,990 4,313 11/2/98 4,305 $ 8
Swiss francs 12,358 9,221 11/2/98 9,145 76
Italian lira 3,169,129,710 1,935,346 11/3/98 1,935,937 (591)
Japanese yen 905,877,000 6,300,000 11/18/98 7,816,697 (1,516,697)
Japanese yen 454,429,500 3,500,000 11/18/98 3,921,214 (421,214)
-------------
$ (1,938,418)
=============
</TABLE>
73
<PAGE>
<TABLE>
<CAPTION>
UNREALIZED
FOREIGN IN EXCHANGE SETTLEMENT APPRECIATION
CONTRACT CURRENCY FOR US $ DATE VALUE US $ (depreciation)
- ----------- ----------- ------------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
GLOBAL SMALLER COMPANIES FUND
Purchases:
Netherland guilders 318,954 171,683 11/2/98 170,920 $ (763)
Hong Kong dollars 2,124,426 274,314 11/3/98 274,314 --
Japanese yen 1,333,200,000 10,000,000 11/18/98 11,504,012 1,504,012
Japanese yen 585,000,000 5,036,157 11/18/98 5,047,890 11,733
-----------
$ 1,514,982
===========
Sales:
Austrian schillings 420,384 36,255 11/2/98 36,126 $ 129
Japanese yen 27,201,624 234,093 11/2/98 233,841 252
Swiss francs 72,474 54,077 11/2/98 53,633 444
Japanese yen 4,026,120,000 28,000,000 11/18/98 34,740,875 (6,740,875)
Japanese yen 2,012,473,500 15,500,000 11/18/98 17,365,377 (1,865,377)
-----------
$(8,605,427)
===========
GLOBAL TECHNOLOGY FUND
Purchases:
British pounds 54,313 91,154 11/2/98 90,893 $ (261)
Netherland guilders 5,413,181 2,903,288 11/3/98 2,900,799 (2,489)
Swedish kronor 27,347,198 3,505,826 11/3/98 3,508,525 2,699
-----------
$ (51)
===========
Sales:
Japanese yen 2,663,600,000 20,000,000 11/30/98 23,021,608 $(3,021,608)
===========
</TABLE>
74
<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.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------
INTERNATIONAL FUND YEAR ENDED OCTOBER 31,
------------------------------------------------------
Per Share Operating Performance: 1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ................. $17.92 $17.17 $16.71 $17.67 $15.98
------ ------ ------ ------ ------
Net investment income (loss) ....................... 0.03 (0.04) 0.05 0.06 0.04
Net realized and unrealized investment gain (loss) . 0.62 2.47 1.77 (0.42) 0.91
Net realized and unrealized gain (loss) from foreign
currency transactions ............................ 0.40 (0.79) (0.44) 0.09 1.08
------ ------ ----- ------ ------
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ..... 1.05 1.64 1.38 (0.27) 2.03
Dividends paid ..................................... -- -- -- -- (0.01)
Distributions from net gain realized ............... (1.22) (0.89) (0.92) (0.69) (0.33)
------ ------ ----- ------ ------
NET INCREASE (DECREASE) IN NET ASSET VALUE ......... (0.17) 0.75 0.46 (0.96) 1.69
------ ------ ----- ------ ------
NET ASSET VALUE, END OF YEAR ....................... $17.75 $17.92 $17.17 $16.71 $17.67
====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET VALUE: ............. 6.51% 9.83% 8.43% (1.24)% 12.85
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ..................... 1.69% 1.78% 1.81% 1.69% 1.63%
Net investment income (loss) to average net assets . 0.16% (0.23)% 0.28% 0.35% 0.27%
Portfolio turnover ................................. 81.37% 83.11% 55.71% 60.70% 39.59%
NET ASSETS, END OF YEAR (000s omitted) ............. $44,122 $46,107 $50,998 $48,763 $62,922
</TABLE>
- --------------
See footnotes on page 79.
75
<PAGE>
FINANCIAL HIGHLIGHTS
CLASS B
-------------------------------
INTERNATIONAL FUND (CONTINUED) YEAR ENDED
OCTOBER 31, 4/22/96*
------------------- TO
PER SHARE OPERATING PERFORMANCE: 1998 1997 10/31/96
------- ------- ---------
NET ASSET VALUE, BEGINNING OF PERIOD .... $17.30 $16.74 $17.38
------ ------ -------
Net investment loss ..................... (0.12) (0.18) (0.03)
Net realized and unrealized investment
gain (loss) ............................ 0.57 2.42 (0.54)
Net realized and unrealized loss from
foreign currency transactions ......... 0.40 (0.79) (0.07)
------ ------ ------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ............................ 0.85 1.45 (0.64)
Dividends paid .......................... -- -- --
Distributions from net gain realized .... (1.22) (0.89) --
------ ------ ------
NET INCREASE (DECREASE) IN
NET ASSET VALUE ....................... (0.37) 0.56 (0.64)
------ ------ -------
NET ASSET VALUE, END OF PERIOD .......... $16.93 $17.30 $16.74
====== ====== ======
Total Return Based on Net AssetValue: ... 5.51% 8.90% (3.68)%
Ratios/Supplemental Data:
Expenses to average net assets .......... 2.55% 2.58% 2.66%+
Net investment loss to average net assets (0.70)% (1.03)% (0.35)%+
Portfolio turnover ...................... 81.37% 83.11% 55.71%++
Net Assets, End of Period (000s omitted) $9,835 $6,350 $2,843
<TABLE>
<CAPTION>
CLASS D
--------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR .......... $17.30 $16.74 $16.43 $17.53 $15.96
------ ------ ------ ------ ------
Net investment loss ......................... (0.12) (0.18) (0.08) (0.07) (0.09)
Net realized and unrealized investment
gain (loss) ........................... 0.57 2.42 1.75 (0.43) 0.91
Net realized and unrealized gain (loss)
from foreign currency transactions .... 0.40 (0.79) (0.44) 0.09 1.08
------ ------ ------ ------ ------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................ 0.85 1.45 1.23 (0.41) 1.90
Dividends paid .............................. -- -- -- -- --
Distributions from net gain realized ........ (1.22) (0.89) (0.92) (0.69) (0.33)
------ ------ ------ ------ ------
NET INCREASE (DECREASE) IN
NET ASSET VALUE ........................... (0.37) 0.56 0.31 (1.10) 1.57
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR ................ $16.93 $17.30 $16.74 $16.43 $17.53
====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSE VALUE: ....... 5.51% 8.90% 7.62% (2.08)% 12.03%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .............. 2.55% 2.58% 2.64% 2.50% 2.50%
Net investment loss to average net assets ... (0.70)% (1.03)% (0.47)% (0.44)% (0.53)%
Portfolio turnover .......................... 81.37% 83.11% 55.71% 60.70% 39.59%
NET ASSETS, END OF YEAR (000s omitted) ...... $37,485 $40,977 $47,917 $31,273 $19,903
Without expense reimbursement and/or
management fee waiver:**
Net investment loss per share ............. $(0.09) $(0.11)
Ratios:
Expenses to average net assets ............ 2.62% 2.67%
Net investment loss to average net assets.. (0.56)% (0.70)%
</TABLE>
- -------------
See footnotes on page 79.
76
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
---------------------------- --------------------------- ----------------------------
EMERGING MARKETS YEAR ENDED YEAR ENDED YEAR ENDED
GROWTH FUND OCTOBER 31, 5/28/96* OCTOBER 31, 5/28/96* OCTOBER 31, 5/28/96*
--------------- TO ----------------- TO ---------------- TO
PER SHARE OPERATING PERFORMANCE: 1998 1997 10/31/96 1998 1997 10/31/96 1998 1997 10/31/96
------ ------ --------- ------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ... $7.34 $6.78 $7.14 $7.27 $6.76 $7.14 $7.27 $6.76 $7.14
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment loss .................... (0.01) (0.05) (0.02) (0.06) (0.11) (0.04) (0.06) (0.11) (0.04)
Net realized and unrealized investment
gain (loss) .......................... (2.00) 1.05 (0.25) (1.97) 1.06 (0.25) (1.97) 1.06 (0.25)
Net realized and unrealized loss from
foreign currency transactions ........ (0.15) (0.44) (0.09) (0.15) (0.44) (0.09) (0.15) (0.44) (0.09)
----- ----- ----- ----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ........................... (2.16) 0.56 (0.36) (2.18) 0.51 (0.38) (2.18) 0.51 (0.38)
Dividends paid ......................... -- -- -- -- -- -- -- -- --
Distributions from net gain realized ... -- -- -- -- -- -- -- -- --
----- ----- ----- ----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN
NET ASSET VALUE ...................... (2.16) 0.56 (0.36) (2.18) 0.51 (0.38) (2.18) 0.51 (0.38)
----- ----- ----- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ......... $5.18 $7.34 $6.78 $5.09 $7.27 $6.76 $5.09 $7.27 $6.76
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: . (29.43)% 8.26% (5.04)% (29.99)% 7.54% (5.32)% (29.99)% 7.54% (5.32)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ......... 2.22% 2.27% 2.22%+ 2.99% 3.04% 3.00%+ 2.99% 3.04% 3.00%+
Net investment loss to average
net assets ........................... (0.12)% (0.56)% (0.69)%+ (0.89)% (1.33)% (1.47)%+ (0.89)% (1.33)% (1.47)%+
Portfolio turnover ..................... 94.09% 84.09% 12.24% 94.09% 84.09% 12.24% 94.09% 84.09% 12.24%
Net Assets, End of Period (000s omitted) $24,294 $44,061 $19,864 $16,031 $28,819 $10,541 $13,667 $31,259 $13,664
Without expense reimbursement and/or
management fee waiver:**
Net investment loss per share ........ $(0.05) $(0.07) $(0.07)
Ratios:
Expenses to average net assets ....... 3.02%+ 3.80%+ 3.80%+
Net investment loss to average
net assets .......................... (1.49)%+ (2.27)%+ (2.27)%+
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
--------------------------- --------------------------- ----------------------------
GLOBAL GROWTH YEAR ENDED 11/1/95* YEAR ENDED 4/22/96* YEAR ENDED 11/1/95*
OPPORTUNITIES FUND OCTOBER 31, TO OCTOBER 31, TO OCTOBER 31, TO
----------------- ----------------- -----------------
PER SHARE OPERATING PERFORMANCE: 1998 1997 10/31/96 1998 1997 10/31/96 1998 1997 10/31/96
------ ------ --------- ------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD .... $9.20 $8.08 $7.14 $9.06 $8.02 $8.04 $9.06 $8.02 $7.14
----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment loss ..................... (0.05) (0.05) (0.03) (0.12) (0.12) (0.04) (0.12) (0.12) (0.09)
Net realized and unrealized
investment gain ....................... 0.81 1.47 1.12 0.80 1.46 0.06 0.80 1.46 1.12
Net realized and unrealized
gain (loss) from
foreign currency transactions ......... 0.08 (0.30) (0.15) 0.08 (0.30) (0.04) 0.08 (0.30) (0.15)
----- ----- ----- ----- ----- ----- ----- ----- -----
INCREASE (DECREASE) FROM
INVESTMENT OPERATIONS ................. 0.84 1.12 0.94 0.76 1.04 (0.02) 0.76 1.04 0.88
Dividends paid .......................... -- -- -- -- -- -- -- -- --
Distributions from net gain realized .... (0.42) -- -- (0.42) -- -- (0.42)
----- ----- ----- ----- ----- ----- ----- ----- -----
NET INCREASE (DECREASE) IN NET
ASSET VALUE ........................... 0.42 1.12 0.94 0.34 1.04 (0.02 )0.34 1.04 0.88
----- ----- ----- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD .......... $9.62 $9.20 $8.08 $9.40 $9.06 $8.02 $9.40 $9.06 $8.02
===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL RETURN BASED ON NET ASSET VALUE: .. 9.52% 13.86% 13.17% 8.76% 12.97% (0.25)% 8.76% 12.97% 12.33%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .......... 1.68% 1.69% 1.91% 2.44% 2.45% 2.53%+ 2.44% 2.45% 2.67%
Net investment loss to average net assets (0.48)% (0.59)% (0.53)% (1.24)% (1.35)% (1.13)%+ (1.24)% (1.35)% (1.25)%
Portfolio turnover ...................... 45.43% 79.32% 31.44% 45.43% 79.32% 31.44%++ 45.43% 79.32% 31.44%
NET ASSETS, END OF YEAR (000s omitted) .. $97,947 $109,060 $107,509 $21,930 $19,311 $9,257 $64,443 $64,300 $53,540
</TABLE>
- ------------------
See footnotes on page 79.
77
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND YEAR ENDED OCTOBER 31,
---------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ............ $15.62 $15.14 $13.90 $11.93 $ 9.98
------ ------ ------ ------ ------
Net investment income (loss) .................. (0.07) -- -- (0.02) (0.08)
Net realized and unrealized investment
gain (loss) ............................... (0.85) 1.61 2.38 2.24 1.57
Net realized and unrealized gain (loss)
from foreign currency transactions ......... 0.04 (0.40) (0.18) 0.08 0.52
------ ------ ------ ------ ------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................. (0.88) 1.21 2.20 2.30 2.01
Dividends paid ................................ -- -- -- -- --
Distributions from net gain realized .......... (0.63) (0.73) (0.96) (0.33) (0.06)
------ ------ ------ ------ ------
NET INCREASE (DECREASE) IN NET ASSET VALUE .... (1.51) 0.48 1.24 1.97 1.95
------ ------ ------ ------ ------
Net Asset Value, End of Year .................. $14.11 $15.62 $15.14 $13.90 $11.93
====== ====== ====== ====== ======
Total Return Based on Net Asset Value: ........ (5.82)% 8.28% 16.95% 20.10% 20.28%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................ 1.65% 1.67% 1.75% 1.83% 1.92%
Net investment income (loss) to average
net assets ................................ (0.45)% 0.02% 0.01% (0.20)% (0.77)%
Portfolio turnover ............................ 50.81% 57.24% 45.38% 63.05% 62.47%
NET ASSETS, END OF YEAR (000S OMITTED) ........ $374,890 $434,397 $350,359 $102,479 $46,269
</TABLE>
<TABLE>
<CAPTION>
CLASS B CLASS D
-----------------------------------------------------------------------
YEAR ENDED
OCTOBER 31, 4/22/96* YEAR ENDED OCTOBER 31,
----------------- TO -----------------------------------------
PER SHARE OPERATING PERFORMANCE: 1998 1997 10/31/96 1998 1997 1996 1995 1994
------- -------- --------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........ $15.04 $14.72 $14.44 $15.05 $14.72 $13.63 $11.80 $ 9.94
------ ------ ------ ------ ------ ------ ------ -------
Net investment loss ......................... (0.18) (0.11) (0.06) (0.18) (0.11) (0.11) (0.12) (0.16)
Net realized and unrealized investment
gain (loss) ................................ (0.81) 1.56 0.33 (0.81) 1.57 2.34 2.20 1.57
Net realized and unrealized gain (loss)
from foreign currency transactions ......... 0.04 (0.40) 0.01 0.04 (0.40) (0.18) 0.08 0.51
------ ------ ------ ------ ------ ------ ------ -------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ................................. (0.95) 1.05 0.28 (0.95) 1.06 2.05 2.16 1.92
Dividends paid .............................. -- -- -- -- -- -- -- --
Distributions from net gain realized ........ (0.63) (0.73) -- (0.63) (0.73) (0.96) (0.33) (0.06)
------ ------ ------ ------ ------ ------ ------ -------
NET INCREASE (DECREASE) IN NET ASSET VALUE .. (1.58) 0.32 0.28 (1.58) 0.33 1.09 1.83 1.86
------ ------ ------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD .............. $13.46 $15.04 $14.72 $13.47 $15.05 $14.72 $13.63 $11.80
====== ====== ====== ====== ====== ====== ====== =======
TOTAL RETURN BASED ON NET ASSET VALUE: ...... (6.54)% 7.39% 1.94% (6.53)% 7.47% 16.14% 19.11% 19.45%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .............. 2.41% 2.43% 2.54%+ 2.41% 2.43% 2.51% 2.61% 2.70%
Net investment loss to average net assets ... (1.21)% (0.74)% (0.80)%+ (1.21)% (0.74)% (0.75)% (0.97)% (1.53)%
Portfolio turnover ......................... 50.81% 57.24% 45.38%++ 50.81% 57.24% 45.38% 63.05% 62.47%
Net Assets, End of Period (000s omitted) .... $222,496 $247,600 $103,968 $272,992 $370,625 $285,477 $85,548 $38,317
</TABLE>
- ---------------
See footnotes on page 79.
78
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------
GLOBAL TECHNOLOGY FUND YEAR ENDED OCTOBER 31, 5/23/94*
---------------------------------------------- TO
PER SHARE OPERATING PERFORMANCE: 1998 1997 1996 1995 10/31/94
------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........................ $15.14 $11.31 $13.05 $ 8.37 $7.14
------ ------ ------ ------- ------
Net investment loss ......................................... (0.14) (0.16) (0.08) (0.10) (0.01)
Net realized and unrealized investment gain (loss) .......... 0.01 4.06 (0.92) 4.90 1.08
Net realized and unrealized gain (loss) from foreign
currency transactions ..................................... 0.06 (0.07) 0.05 (0.05) 0.16
------ ------ ------ ------ -----
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS .............. (0.07) 3.83 (0.95) 4.75 1.23
Dividends paid .............................................. -- -- (0.02) -- --
Distributions from net gain realized ........................ (2.59) -- (0.77) (0.07) --
------ ------ ------ ------ -----
NET INCREASE (DECREASE) IN NET ASSET VALUE .................. (2.66) 3.83 (1.74) 4.68 1.23
------ ------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD .............................. $12.48 $15.14 $11.31 $13.05 $8.37
====== ====== ====== ====== =====
TOTAL RETURN BASED ON NET ASSET VALUE: ...................... (0.79)% 33.86% (7.33)% 57.31% 17.23%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets .............................. 1.67% 1.67% 1.75% 1.91% 2.00%+
Net investment loss to average net assets ................... (1.04)% (1.10)% (0.74)% (0.89)% (0.45)%+
Portfolio turnover .......................................... 87.55% 94.06% 73.00% 87.42% 29.20%
NET ASSETS, END OF PERIOD (000S OMITTED) .................... $475,951 $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>
<TABLE>
<CAPTION>
CLASS B CLASS D
------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED OCTOBER 31,
OCTOBER 31, 4/22/96* ------------------------------------- 5/23/94*
------------------- TO TO
PER SHARE OPERATING PERFORMANCE: 1998 1997 10/31/96 1998 1997 1996 1995 10/31/94
------ ------ -------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.73 $11.09 $11.47 $14.73 $11.09 $12.89 $ 8.34 $7.14
------ ------ ------ ------ ------ ------ ------ ------
Net investment loss (0.23) (0.26) (0.08) (0.23) (0.26) (0.17) (0.18) (0.04)
Net realized and unrealized investment
gain (loss) 0.01 3.97 (0.39) (0.01) 3.97 (0.91) 4.85 1.08
Net realized and unrealized gain (loss)
from foreign currency transactions 0.06 (0.07) 0.09 0.06 (0.07) 0.05 (0.05) 0.16
------ ------ ------ ------ ------ ------ ------ ------
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS (0.16) 3.64 (0.38) (0.18) 3.64 (1.03) 4.62 1.20
Dividends paid -- -- -- -- -- -- -- --
Distributions from net gain realized (2.59) -- -- (2.59) -- (0.77) (0.07) --
------ ------ ------ ------ ------ ------ ------ ------
NET INCREASE (DECREASE) IN NET ASSET VALUE (2.75) 3.64 (0.38) (2.77) 3.64 (1.80) 4.55 1.20
------ ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.98 $14.73 $11.09 $11.96 $14.73 $11.09 $12.89 $8.34
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET VALUE: (1.55)% 32.82% (3.31)% (1.70)% 32.82% (8.07)% 55.95% 16.81%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 2.43% 2.42% 2.51%+ 2.43% 2.42% 2.52% 2.66% 2.75%+
Net investment loss to average net assets (1.80)% (1.85)% (1.40)%+ (1.80)% (1.85)% (1.50)% (1.63)% (1.22)%+
Portfolio turnover 87.55% 94.06% 73.00%++ 87.55% 94.06% 73.00% 87.42% 29.20%
NET ASSETS, END OF PERIOD (000S OMITTED) $58,575 $53,046 $18,840 $184,032 $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, 1996.
See Notes to Financial Statements.
79
<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, 1998, the related statements of operations for
the year then ended and of changes in net assets for each of the years in the
two-year period then ended, 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, 1998, 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, 1998, 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 4, 1998
80
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW 2, 4
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
TRUSTEE, The Geraldine R. 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, 4
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
DIRECTOR, KeySpan Energy Corporation
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICIMutual Insurance Company
DIRECTOR EMERITUS
Fred E. Brown
Director and Consultant, J. & W. SELIGMAN & CO.
Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
81
<PAGE>
PROXY RESULTS
Shareholders of each Series voted on the following proposals at a Special
Meeting of Shareholders held on June 30, 1998, in New York, New York. The
description of each proposal and number of shares voted are stated below. The
shareholders of all five Series voted collectively in respect of the election of
Directors and the ratification of the selection of independent auditors. In
respect of the proposals relating to the interim and new subadvisory agreements,
the shareholders of each Series voted separately. Each Director was elected, the
selection of Deloitte & Touche LLP as auditors was ratified, and the interim and
new subadvisory agreements were approved.
ELECTION OF DIRECTORS:
For Withheld
---- -----------
John R. Galvin 105,497,129 1,987,168
Alice S. Ilchman 105,505,135 1,979,161
Frank A. McPherson 105,505,057 1,979,239
John E. Merow 105,504,427 1,979,869
Betsy S. Michel 105,501,319 1,982,977
William C. Morris 105,508,287 1,976,009
James C. Pitney 105,493,493 1,990,804
James Q. Riordan 105,498,612 1,985,684
Richard R. Schmaltz 105,505,948 1,978,349
Robert L. Shafer 105,504,103 1,980,194
James N. Whitson 105,508,491 1,975,806
Brian T. Zino 105,505,870 1,978,427
RATIFICATION OF DELOITTE & TOUCHE LLP AS AUDITORS:
<TABLE>
<CAPTION>
For Against Abstain
---- ----------- ---------
<S> <C> <C> <C>
103,834,744 828,074 2,821,124
APPROVAL OF INTERIM SUBADVISORY AGREEMENTS
BETWEEN J. & W. SELIGMAN & CO. INCORPORATED
AND SELIGMAN HENDERSON CO.:
Seligman Henderson International Fund 2,592,848 8,037 129,431
Seligman Henderson Emerging Markets Growth Fund 6,848,574 106,520 246,368
Seligman Henderson Global Growth Opportunites Fund 13,627,795 126,041 551,941
Seligman Henderson Global Smaller Companies Fund 42,166,124 466,464 1,501,383
Seligman Henderson Global Technology Fund 36,921,480 535,865 1,655,339
APPROVAL OF NEW SUBADVISORY AGREEMENT
BETWEEN J. & W. SELIGMAN & CO. INCORPORATED
AND HENDERSON INVESTMENT MANAGEMENT LIMITED,
EFFECTIVE JULY 1, 1998:
Seligman Henderson International Fund 2,591,707 9,988 128,623
Seligman Henderson Emerging Markets Growth Fund 6,848,518 104,254 248,682
Seligman Henderson Global Growth Opportunites Fund 13,624,535 139,654 541,561
Seligman Henderson Global Smaller Companies Fund 42,320,799 466,271 1,346,898
Seligman Henderson Global Technology Fund 36,895,609 551,029 1,666,034
</TABLE>
82
<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
MARION S. SCHULTHEIS
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
Henderson Investment
Management Limited
3 Finsbury Avenue
London, EC2M 2PA
England
GENERAL DISTRIBUTOR
Seligman Advisors, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement
Plan Services
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio. For tax purposes,
these profits may be taxed at different rates, primarily depending upon the
length of time the securities were owned by the fund.
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 CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund (the
CDSC 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 -- Adocument that contains updated or more
detailed information about an investment company and that 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.
- -----------------
Adapted from the Investment Company Institute's 1998 MUTUAL FUND FACT BOOK.
84
<PAGE>
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 184 mutual funds at
October 31, 1998.
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 574 mutual funds at October 31, 1998.
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 248 mutual funds at October 31, 1998.
LIPPER SCIENCE & TECHNOLOGY FUNDS AVERAGE:*
This average is comprised of mutual funds which invest 65% of their equity
portfolios in science and technology stocks. This average was comprised of 82
mutual funds at October 31, 1998.
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 42 mutual funds at October 31, 1998.
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 SMITH BARNEY EXTENDED MARKET INDEX WORLD:
This index represents the small-capitalization stock universe. It comprises the
bottom 20% of the available capital of each country included in the Salomon
Smith Barney 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.
- -------------------
* 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 SMITH BARNEY INCORPORATED.
<PAGE>
THIS REPORT IS INTENDED ONLY 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 THE SALES CHARGES, MANAGMENT FEES, AND OTHER COSTS. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING OR SENDING MONEY.
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[LOGO]
J.&W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
EQSH2 10/98 [RECYCLE LOGO] Printed on Recycled Paper
<PAGE>
PART C. OTHER INFORMATION
- ------ -----------------
Item 23. Exhibits.
- -------- ---------
All Exhibits have been previously filed and are incorporated by
reference herein, except Exhibits marked with an asterisk (*) which are filed
herewith.
(a) *Articles Supplementary dated May 24, 1999.
(a)(1) Articles of Amendment and Restatement of Articles of Incorporation of
Registrant. (Incorporated by reference to Registrant's Post-Effective
Amendment No. filed on March 1999.)
(b) Amended and Restated By-Laws. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 23, filed on February 27,
1997.)
(c) Specimen Stock Certificates for Class A and Class D Shares with respect
to Seligman Henderson International Fund. (Incorporated by reference to
Exhibit 4 of Registrant's Post-Effective Amendment No. 6 filed on April
23, 1993 and Registrant's Post-Effective Amendment No. 8 filed on
September 21, 1993.) Specimen Stock Certificate for Class B Shares with
respect to Seligman Henderson International Fund. (Incorporated by
reference to Registrant's Form SE filed on April 16, 1996.)
(c)(1) Specimen Stock Certificates for Class A and Class D Shares with respect
to Seligman Henderson Global Smaller Companies Fund (formerly, Seligman
Henderson Global Emerging Companies Fund). (Incorporated by reference
to Exhibit 4a to Registrant's Post-Effective Amendment No. 10 filed on
August 10, 1992.) Specimen Stock Certificate for Class B Shares with
respect to Seligman Henderson Global Smaller Companies Fund.
(Incorporated by reference to Registrant's Form SE filed on April 16,
1996.)
(c)(2) Specimen Stock Certificates for Class A and Class D Shares with respect
to Seligman Henderson Global Technology Fund. (Incorporated by
reference to Exhibit 4b of Registrant's Post-Effective Amendment No.
11, filed on May 10, 1994.) Specimen Stock Certificate for Class B
Shares with respect to Seligman Henderson Global Technology Fund.
(Incorporated by reference to Registrant's Form SE filed on April 16,
1996.)
(c)(3) Specimen Stock Certificates for Class A and Class D Shares with respect
to Seligman Henderson Global Growth Opportunities Fund. (Incorporated
by reference to Registrant's Form SE filed on October 30, 1995.)
Specimen Stock Certificate for Class B Shares with respect to Seligman
Henderson Global Growth Opportunities Fund. (Incorporated by reference
to Registrant's Form SE filed on April 16, 1996.)
(c)(4) Specimen Stock Certificates for Class A, Class B and Class D Shares
with respect to Seligman Henderson Emerging Markets Growth Fund.
(Incorporated by reference to Registrant's Form SE, filed on May 15,
1996.)
(c)(5) Additional rights of security holders are set forth in Article FIFTH
and SEVENTH of the Registrant's Articles of Incorporation and Articles
I and IV of Registrant's By-Laws. (Incorporated by reference to
Exhibits 1 and 2, respectively, to Registrant's Post-Effective
Amendment No. 23, filed on February 27, 1997.)
(d) Revised Management Agreement between the Registrant and J. & W.
Seligman & Co. Incorporated. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 21, filed on May 20, 1996.)
C-1
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
- ------- ----------------------------
(d)(1) Subadvisory Agreement between the Manager and Henderson Investment
Management Limited. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 25 filed on February 26, 1998.)
(e) *Addendum to Sales/Bank Agreement. (Incorporated by reference to
Post-Effective Amendment No. 57 to the Registration Statement of
Seligman Capital Fund, Inc. (File #811-1886) filed on May 28, 1999.)
(e)(1) *Form of Bank Agreement between Seligman Advisors, Inc. and Banks.
(Incorporated by reference to Post-Effective Amendment No. 57 to the
Registration Statement of Seligman Capital Fund, Inc. (File #811-1886)
filed on May 28, 1999.)
(e)(2) Distributing Agreement between the Registran and Seligman Advisors,
Inc. (Incorporated by reference to Exhibit 6 of Registrant's
Post-Effective Amendment No. 17, filed on October 27, 1995.)
(e)(3) Sales Agreement between Seligman Advisors, Inc. and Dealers.
(Incorporated by reference to Registrant's Post-Effective Amendment No.
20, filed on April 19, 1996.)
(e)(4) Form of Sales Agreement between Seligman Advisors, Inc. and Dean
Witter Reynolds, Inc. (Incorporated by reference to Exhibit 6b of
Registrant's Post-Effective Amendment No. 53 (Registration Statement
No. 2-33566) filed on April 28, 1997.)
(e)(5) Form of Sales Agreement between Seligman Advisors, Inc. and Dean Witter
Reynolds, Inc. with respect to certain Chilean institutional investors.
(Incorporated by reference to Exhibit 6c of Registrant's Post-Effective
Amendment No. 53 (Registration Statement No. 2-33566), filed on April
28, 1997.)
(e)(6) Form of Dealer Agreement between Seligman Advisors, Inc. and Smith
Barney Inc. (Incorporated by reference to Exhibit 6d of Registrant's
Post-Effective Amendment No. 53 (Registration Statement No. 2-33566)
filed on April 28, 1997.)
(f) Matched Accumulation Plan of J. & W. Seligman & Co. Incorporated.
(Incorporated by reference to Exhibit 7 of Registrant's Post-Effective
Amendment No. 21 (Registration Statement No. 2-92487) filed on January
29, 1997.)
(f) Amended Deferred Compensation Plan for Directors. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 27 filed on
February 26, 1999.)
(f)(1) Deferred Compensation Plan for Directors. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 21 (Registration Statement
No. 2-92487) filed on January 29, 1997.)
(g) Custody Agreement, dated May 1, 1996, between Registrant and Chase
Manhattan Bank. (Incorporated by reference to Exhibit 8 of Registrant's
Post-Effective Amendment No. 22 filed on November 20, 1996.)
(h) Recordkeeping Agreement between Registrant and Investors Fiduciary
Trust Company. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 23, filed on February 27, 1997.)
(i) *Opinion and Consent of Counsel on behalf of each of the Series Class C
shares.
(i)(1) Opinion and Consent of Counsel on behalf of Registrant's Seligman
Henderson International Fund. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 23, filed on February 27,
1997.)
C-2
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
(i)(2) Opinon and Consent of Counsel on behalf of Registrant's Seligman
Henderson Emerging Markets Growth Fund. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 21 filed on May 20, 1996.)
(i)(3) Opinion and Consent of Counsel on behalf of Registrant's Seligman
Henderson Global Growth Opportunities Fund. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 17 filed on October 27,
1995.)
(i)(4) Opinion and Consent of Counsel on behalf of Registrant's Seligman
Henderson Global Technology Fund. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 27 filed February 26, 1999.)
(j) *Consent of Independent Auditors.
(k) Not applicable.
(l) *Form of Purchase Agreement for Initial Capital between Registrant's
Class C shares and J. & W. Seligman & Co. Incorporated.
(l)(1) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson International Fund's Class A and Class D Shares and
J. & W. Seligman & Co. Incorporated. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 23 filed on February 27,
1997.) Form of Purchase Agreement for Initial Capital between
Registrant's Seligman Henderson International Fund's Class B shares and
J. & W. Seligman & Co. Incorporated. (Incorporated by reference to
Exhibit 13a of Registrant's Post-Effective Amendment No. 20 filed on
April 19, 1996.)
(l)(2) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Smaller Companies Fund's Class D Shares and
J. & W. Seligman & Co. Incorporated. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 23 filed on February 27,
1997.) Form of Purchase Agreement for Initial Capital between
Registrant's Seligman Henderson Global Smaller Companies Fund's Class B
shares and J. & W. Seligman & Co. Incorporated. (Incorporated by
reference to Exhibit 13b of Registrant's Post-Effective Amendment No.
20 filed on April 19, 1996.)
(l)(3) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Technology Fund's Class A and D Shares and J.
& W. Seligman & Co. Incorporated. (Incorporated by reference to
Registrant's Post-Effective Amendment No. 23, filed on February 27,
1997.) Form of Purchase Agreement for Initial Capital between
Registrant's Seligman Henderson Global Technology Fund's Class B shares
and J. & W. Seligman & Co. Incorporated. (Incorporated by reference to
Exhibit 13c of Registrant's Post-Effective Amendment No. 20, filed on
April 19, 1996.)
(l)(4) Form of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Global Growth Opportunities Fund's Class B shares
and J. & W. Seligman & Co. Incorporated. (Incorporated by reference to
Exhibit 13d of Registrant's Post-Effective Amendment No. 20 filed April
19, 1996.)
(l)(5) Copy of Purchase Agreement for Initial Capital between Registrant's
Seligman Henderson Emerging Markets Growth Fund's Class A, Class B and
Class D Shares and J. & W. Seligman & Co. Incorporated. (Incorporated
by reference to Registrant's Post-Effective Amendment No. 21, filed on
May 20, 1996.)
C-3
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
- ------ -----------------------------
(m) *Amended Administration, Shareholder Services and Distribution Plans
for each of the Seligman Henderson International Fund, Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global
Technology Fund, Seligman Henderson Growth Opportunities Fund and
Seligman Emerging Markets Growth Fund (the "Funds"), and Amended
Administration, Shareholder Services and Distribution Agreements for
each of the .Funds. (Incorporated by reference to Post-Effective
Amendment No. 57 to the Registration Statement of Seligman Capital
Fund, Inc. (File No. *11-1886) filed on May , 1999.)
(m)(1) Administration, Shareholder Services and Distribution Plans for each of
Seligman Henderson International Fund, Seligman Henderson Global
Smaller Companies Fund, Seligman Henderson Global Technology Fund and
Seligman Henderson Global Growth Opportunities Fund and Amended Form of
Administration, Shareholder Services and Distribution Agreement of
Registrant. (Incorporated by reference to Exhibit 15 of Registrant's
Post-Effective Amendment No. 20 filed April 19, 1996.)
(m)(2) Administration, Shareholder Services and Distribution Plan with
respect to Registrant's Seligman Henderson Emerging Markets Growth
Fund. (Incorporated by reference to Registrant's Post-Effective
Amendment No. 21 filed on May 20, 1996.)
(n) Financial Data Schedules. (Incorporate by reference to Registrant's
Post-Effective Amendment No. 27 filed on February 26, 1999
(o) *Plan of Multiple Classes of Shares (four Classes) pursuant to Rule
18f-3 under the Investment Company Act of 1940. (Incorporated by
reference to Post-Effective Amendment No. 57 to the Registration
Statement of Seligman Capital Fund, Inc. (File #811-1886) filed on May
28, 1999.)-
Other Exhibits: Powers of Attorney. (Incorporated by reference to Registrant's
- -------------- Post-Effective Amendment No. 25 filed on February 26, 1998.)
Item 24. Persons Controlled by or Under Common Control with Registrant. None.
- ------- -------------------------------------------------------------
Item 25. Indemnification. Reference is made to the provisions of Articles
- -------- ---------------
Twelfth and Thirteenth of Registrant's Amended and Restated Articles
of Incorporation filed as Exhibit 24(b)(1) and Article VII of
Registrant's Amended and Restated By-laws filed as Exhibit 24(b)(2)
to Registrant's Post-Effective Amendment No. 23 to the Registration
Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised by the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
C-4
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
- ------ -----------------------------
Item 26. Business and Other Connections of Investment Adviser. J. & W.
- -------- ----------------------------------------------------------
Seligman & Co. Incorporated (the "Manager") also serves as investment
manager to eighteen other associated investment companies. They are
Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and
Information Fund, Inc., Seligman Frontier Fund, Inc., Seligman Growth
Fund, Inc., Seligman High Income Fund Series, Seligman Income Fund,
Inc., Seligman Municipal Fund Series, Inc., Seligman Municipal Series
Trust, Seligman New Jersey Municipal Fund, Inc., Seligman
Pennsylvania Municipal Fund Series, Seligman Portfolios, Inc.,
Seligman Quality Municipal Fund, Inc., Seligman Select Municipal
Fund, Inc., Seligman Value Fund Series, Inc. and Tri-Continental
Corporation.
Henderson Investment Management Limited (the "Subadviser") also
serves as Subadviser to Seligman Portfolios, Inc. with respect to its
Global Portfolio, Global Smaller Companies Portfolio, Global
Technology Portfolio and Global Growth Opportunities Portfolio.
The Manager and Subadviser each have an investment advisory service
division which provides investment management or advice to private
clients. The list required by this Item 26 of officers and directors
of the Manager and the Subadviser, respectively, together with
information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D of Form ADV, filed by the Manager and the
Subadviser, respectively, pursuant to the Investment Advisers Act of
1940 (SEC File Nos. 801-15798 and 801-55577) filed on March 31, 1999
and October 15, 1998, respectively.
Item 27. Principal Underwriters.
- -------- -----------------------
(a) The names of each investment company (other than the Registrant) for
which Registrant's principal underwriter currently distributing
securities of the Registrant also acts as a principal underwriter,
depositor or investment adviser follow: Seligman Capital Fund, Inc.,
Seligman Cash Management Fund, Inc., Seligman Common Stock Fund,
Inc., Seligman Communications and Information Fund, Inc., Seligman
Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman High Income
Fund Series, Seligman Income Fund, Inc., Seligman Municipal Fund
Series, Inc., Seligman Municipal Series Trust, Seligman New Jersey
Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund Series,
Seligman Portfolios, Inc. and Seligman Value Fund Series, Inc.
C-5
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
- ------ -----------------------------
(b) Name of each director, officer or partner of Registrant's principal
underwriter named in response to Item 20:
<TABLE>
<CAPTION>
Seligman Advisors, Inc.
-----------------------
As of April 30, 1999
--------------------
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
WILLIAM C. MORRIS* Director Chairman of the Board and Chief
Executive Officer
BRIAN T. ZINO* Director President and Director
RONALD T. SCHROEDER* Director None
FRED E. BROWN* Director Director Emeritus
WILLIAM H. HAZEN* Director None
THOMAS G. MOLES* Director None
DAVID F. STEIN* Director None
STEPHEN J. HODGDON* President and Director None
CHARLES W. KADLEC* Chief Investment Strategist None
LAWRENCE P. VOGEL* Senior Vice President, Finance Vice President
EDWARD F. LYNCH* Senior Vice President, National None
Sales Director
JAMES R. BESHER Senior Vice President, Division None
14000 Margaux Lane Sales Director
Town & Country, MO 63017
GERALD I. CETRULO, III Senior Vice President, Sales None
140 West Parkway
Pompton Plains, NJ 07444
MATTHEW A. DIGAN* Senior Vice President, None
Domestic Funds
JONATHAN G. EVANS Senior Vice President, Sales None
222 Fairmont Way
Ft. Lauderdale, FL 33326
ROBERT T. HAUSLER* Senior Vice President, International None
Funds
T. WAYNE KNOWLES Senior Vice President, None
104 Morninghills Court Division Sales Director
Cary, NC 27511
JOSEPH LAM Senior Vice President, Regional None
Seligman International Inc. Director, Asia
Suite 1133, Central Building
One Pedder Street
Central Hong Kong
BRADLEY W. LARSON Senior Vice President, Sales None
367 Bryan Drive
Alamo, CA 94526
MICHELLE L. MCCANN-RAPPA* Senior Vice President, None
Retirement Plans
SCOTT H. NOVAK* Senior Vice President, Insurance None
RICHARD M. POTOCKI Senior Vice President, Regional None
Seligman International UK Limited Director, Europe and the Middle East
Berkeley Square House 2nd Floor
Berkeley Square
London, United Kingdom W1X 6EA
</TABLE>
C-6
<PAGE>
<TABLE>
<CAPTION>
PART C. OTHER INFORMATION (CONTINUED)
Seligman Advisors, Inc.
As of April 30, 1999
--------------------
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
BRUCE M. TUCKEY Senior Vice President, Sales None
41644 Chathman Drive
Novi, MI 48375
ANDREW S. VEASEY Senior Vice President, Sales None
14 Woodside Drive
Rumson, NJ 07760
CHARLES L. VON BREITENBACH, II* Senior Vice President, None
Managed Money
J. BRERETON YOUNG* Senior Vice President, Director None
of Sales Development
JEFFREY S. DEAN* Vice President, Business Analysis None
MASON S. FLINN Vice President, Regional Retirement None
159 Varennes Plans Manager
San Francisco, CA 94133
MARSHA E. JACOBY* Vice President, Offshore Business None
Manager
WILLIAM W. JOHNSON* Vice President, Order Desk None
JOAN M. O'CONNELL Vice President, Regional Retirement None
3707 Fifth Avenue #136 Plans Manager
San Diego, CA 92103
RONALD W. POND* Vice President, Portfolio Advisor None
JEFFERY C. PLEET* Vice President, Regional Retirement None
Plans Manager
TRACY A. SALOMON* Vice President, Retirement Marketing None
HELEN SIMON* Vice President, Sales Administration None
GARY A. TERPENING* Vice President, Director of Business None
Development
CHARLES E. WENZEL Vice President, Regional Retirement None
703 Greenwood Road Plans Manager
Wilmington, DE 19807
JEFF BOTWINICK Regional Vice President None
11508 Foster Road
Overland Park, KS 66210
KEVIN CASEY Regional Vice President None
19 Bayview Avenue
Babylon, NY 11702
RICHARD B. CALLAGHAN Regional Vice President None
7821 Dakota Lane
Orland Park, IL 60462
</TABLE>
C-7
<PAGE>
<TABLE>
<CAPTION>
PART C. OTHER INFORMATION (CONTINUED)
-----------------------------
Seligman Advisors, Inc.
As of April 30, 1999
--------------------
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- Regional Vice President ---------------
BRADFORD C. DAVIS None
241 110th Avenue SE
Bellevue, WA 98004
CHRISTOPHER J. DERRY Regional Vice President None
2380 Mt. Lebanon Church Road
Alvaton, KY 42122
KENNETH DOUGHERTY Regional Vice President None
8640 Finlarig Drive
Dublin, OH 43017
KELLI A. WIRTH DUMSER Regional Vice President None
7121 Jardiniere Court
Charlotte, NC 28226
EDWARD S. FINOCCHIARO Regional Vice President None
120 Screenhouse Lane
Duxbury, MA 02332
MICHAEL C. FORGEA Regional Vice President None
32 W. Anapamu Street # 186
Santa Barbara, CA 93101
CARLA A. GOEHRING Regional Vice President None
11426 Long Pine
Houston, TX 77077
CATHY DES JARDINS Regional Vice President None
PMB 152
1705 14th Street
Boulder, CO 80302
MICHAEL K. LEWALLEN Regional Vice President None
908 Tulip Poplar Lane
Birmingham, AL 35244
JUDITH L. LYON Regional Vice President None
7105 Harbour Landing
Alpharetta, GA 30005
TIM O'CONNELL Regional Vice President None
11908 Acacia Glen Court
San Diego, CA 92128
GEORGE M. PALMER, JR. Regional Vice President None
1805 Richardson Place
Tampa, FL 33606
THOMAS PARNELL Regional Vice President None
1575 Edgecomb Road
St. Paul, MN 55116
CRAIG PRICHARD Regional Vice President None
300 Spyglass Drive
Fairlawn, OH 44333
C-8
<PAGE>
PART C. OTHER INFORMATION (CONTINUED)
-----------------------------
Seligman Advisors, Inc.
As of April 30, 1999
--------------------
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------
NICHOLAS ROBERTS Regional Vice President None
200 Broad Street, Apt. 2225
Stamford, CT 06901
DIANE H. SNOWDEN Regional Vice President None
11 Thackery Lane
Cherry Hill, NJ 08003
EUGENE P. SULLIVAN Regional Vice President None
4858 Battery Lane Bethesda, MD 21814
JAMES TAYLOR Regional Vice President None
1145 Kenilworth Circle
Naperville, IL 60540
STEVE WILSON Regional Vice President None
83 Kaydeross Park Road
Saratoga Springs, NY 12866
FRANK J. NASTA* Secretary Secretary
AURELIA LACSAMANA* Treasurer None
GAIL S. CUSHING* Assistant Vice President, National None
Accounts Manager
SANDRA G. FLORIS* Assistant Vice President, Order Desk None
KEITH LANDRY* Assistant Vice President, Order Desk None
ALBERT A. PISANO* Assistant Vice President and None
Compliance Officer
JOYCE PERESS* Assistant Secretary Assistant Secretary
* The principal business address of each of these directors and/or officers is 100 Park Avenue, New York, NY 10017.
</TABLE>
(c) Not applicable.
Item 28. Location of Accounts and Records. The accounts, books and other
documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules (17 CFR 270.31(a)-1 to
31(a)-3 promulgated thereunder are maintained by J. & W. Seligman &
Co. Incorporated located at 100 Park Avenue, New York, NY 10017 and
at the following locations: (1) Custodian for the Funds: Chase
Manhattan Bank, 1 Pierrepont Plaza, Brooklyn, New York 11201; (2)
Recordkeeping Agent for the Funds: Investors Fiduciary Trust Company,
801 Pennsylvania, Kansas City, Missouri 64105; and, (3) Transfer,
Redemption and Other Shareholder Account Services for the Funds:
Agent Seligman Data Corp., 100 Park Avenue, New York, NY 10017.
Item 29. Management Services. Not Applicable.
Item 30. Undertakings. Registrant undertakes: (1) to furnish a copy of
Registrant's latest annual report, upon request and without charge,
to every person to whom a prospectus is delivered, and (2) if
requested to do so by the holders of at least 10% of its outstanding
shares, to call a meeting of shareholders for the purpose of voting
upon the removal of a director or directors and to assist in
communications with other shareholders as required by Section 16(c)
of the Investment Company Act of 1940, as amended.
C-9
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has certifies that it meets all
of the requirements for effectiveness of this Post-Effective Amendment No. 28
pursuant to Rule 485(b) under the Securities Act of 1933 and duly caused this
Post-Effective Amendment No. 28 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the th day of May 27, 1999.
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
By: /s/ William C. Morris
---------------------------
William C. Morris, Chairman
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Post-Effective Amendment No. 28 to its
Registration Statement has been signed below by the following persons in the
capacities indicated on May 27, 1999.
Signature Title
/s/William C. Morris Chairman of the Board (Principal
- ---------------- executive officer) and Director
William C. Morris*
/s/ Brian T. Zino President and Director
- -----------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer (Principal financial and
- ------------------ and accounting officer)
Thomas G. Rose
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director ) /s/ Brian T. Zino
Betsy S. Michel, Director ) ---------------------------------------
James C. Pitney, Director ) Brian T. Zino, Attorney-in-fact*
James Q. Riordan, Director )
Richard R. Schmaltz, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
C-10
<PAGE>
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
POST-EFFECTIVE AMENDMENT NO. 28 TO THE
REGISTRATION STATEMENT ON FORM N-1A
EXHIBIT INDEX
Form N-1A Item No. Description
Item 23(a) Articles Supplementary
Item 23(i) Opinion and Consent of Counsel
Item 23(j) Consent of Independent Auditors
Item 23(l) Form of Purchase Agreement for Initial Capital
for Seligman Henderson Global Fund Series, Inc.
Item 23(m) Amended Administration, Shareholder Services
And Distribution Plan on behalf of each Series
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
------------------------------------------
ARTICLES SUPPLEMENTARY
Seligman Henderson Global Fund Series, Inc., a Maryland corporation
having its principal office in Baltimore City, Maryland (hereinafter called the
"Corporation") and registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: (a) The total number of shares of capital stock of all
sub-classes of the Seligman Henderson Emerging Markets Growth Fund Class of the
Corporation (the "Emerging Markets Growth Series") which the Corporation has
authority to issue is 400,000,000 shares, which were previously classified by
the Board of Directors of the Corporation into three classes designated as Class
A Common Stock, Class B Common Stock and Class D Common Stock of the Emerging
Markets Growth Series. The number of authorized shares of Class A Common Stock,
Class B Common Stock and Class D Common Stock of the Emerging Markets Growth
Series each consisted of the sum of x and y, where x equaled the issued and
outstanding shares of such sub-class and y equaled one-third of the authorized
but unissued shares of Common Stock of all sub-classes; PROVIDED that at all
times the aggregate authorized, issued and outstanding shares of Class A, Class
B and Class D Common Stock of the Emerging Markets Growth Series shall not
exceed the authorized number of shares of Common Stock of the Emerging Markets
Growth Series; and, in the event application of the formula above would have
resulted, at any time, in fractional shares, the applicable number of authorized
shares of each class was to have been rounded down to the nearest whole number
of shares of such sub-class.
(b): Pursuant to the authority of the Board of Directors to classify
and reclassify unissued shares of capital stock of the Corporation, the Board of
Directors has reclassified the unissued shares of Class A Common Stock, Class B
Common Stock and Class D Common Stock of the Emerging Markets Growth Series into
the following subclasses, has provided for the issuance of shares of such
subclasses and has set the following terms of such subclasses:
(1) The total number of shares of all classes of stock which the
Emerging Markets Growth Series has authority to issue is 400,000,000 shares
of common stock ("Shares") of the par value of $.001 each having an
aggregate par value of $400,000. The Common Stock of the Emerging Markets
Growth Series shall have four subclasses of shares, which shall be
designated Class A Common Stock, Class B Common Stock, Class C Common Stock
and Class D Common Stock. The number of authorized shares of Class A Common
Stock, of Class B Common Stock, of Class C Common Stock and of Class D
Common Stock of the Emerging Markets Growth Series shall each consist of
the sum of x and y, where x equals the issued and outstanding shares of
such subclass and y equals one-fourth of the authorized but unissued shares
of Common Stock of all subclasses; PROVIDED that at all times the aggregate
authorized, issued and outstanding shares of Class A, Class B, Class C and
Class D Common Stock of the Emerging Markets Growth Series shall not exceed
the authorized number of shares of Common Stock of the Emerging Markets
Growth Series
- 1 -
<PAGE>
(I.E., 400,000,000 shares of Common Stock until changed by further action
of the Board of Directors in accordance with Section 2-208.1 of the
Maryland General Corporation Law, or any successor provision); and, in the
event application of the formula above would result, at any time, in
fractional shares, the applicable number of authorized shares of each class
shall be rounded down to the nearest whole number of shares of such class.
Any subclass of Common Stock of the Emerging Markets Growth Series shall be
referred to herein individually as a "Emerging Markets Growth Class" and
collectively, together with any further subclass or sub classes from time
to time established, as the "Emerging Markets Growth Classes".
(2) All Emerging Markets Growth Classes shall represent the same
interest in the Corporation and have identical voting, dividend, liquidation,
and other rights; PROVIDED, HOWEVER, that notwithstanding anything in the
charter of the Corporation to the contrary:
(A) Class A shares may be subject to such front-end sales loads as may
be established by the Board of Directors from time to time in accordance
with the Investment Company Act and applicable rules and regulations of the
National Association of Securities Dealers, Inc. (the "NASD").
(B) Class B shares may be subject to such contingent deferred sales
charges as may be established from time to time by the Board of Directors
in accordance with the Investment Company Act and applicable rules and
regulations of the NASD. Subject to subsection (F) below, each Emerging
Markets Growth Class B share shall convert automatically into Emerging
Markets Growth Class A shares on the last business day of the month that
precedes the eighth anniversary of the date of issuance of such Emerging
Markets Growth Class B share; such conversion shall be effected on the
basis of the relative net asset values of Emerging Markets Growth Class B
shares and Emerging Markets Growth Class A shares as determined by the
Corporation on the date of conversion.
(C) Class C shares may be subject to such front-end sales loads and
such contingent deferred sales charges as may be established from time to
time by the Board of Directors in accordance with the Investment Company
Act and applicable rules and regulations of the NASD.
(D) Class D shares may be subject to such contingent deferred sales
charges as may be established from time to time by the Board of Directors
in accordance with the Investment Company Act and applicable rules and
regulations of the NASD.
(E) Expenses related solely to a particular Emerging Markets Growth
Class (including, without limitation, distribution expenses under a Rule
12b-1 plan and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated, which may differ
between the Emerging Markets Growth Classes) shall be borne by that
Emerging Markets Growth Class and shall
- 2 -
<PAGE>
be appropriately reflected (in the manner determined by the Board of
Directors) in the net asset value, dividends, distribution and liquidation
rights of the shares of that Emerging Markets Growth Class.
(F) At such time as shall be permitted under the Investment Company
Act, any applicable rules and regulations thereunder and the provisions of
any exemptive order applicable to the Corporation, and as may be determined
by the Board of Directors and disclosed in the then current prospectus of
the Emerging Markets Growth Series, shares of a particular Emerging Markets
Growth Class may be automatically converted into shares of another Emerging
Markets Growth Class; PROVIDED, HOWEVER, that such conversion shall be
subject to the continuing availability of an opinion of counsel to the
effect that such conversion does not constitute a taxable event under
Federal income tax law. The Board of Directors, in its sole discretion, may
suspend any conversion rights if such opinion is no longer available.
(G) As to any matter with respect to which a separate vote of any
Emerging Markets Growth Class is required by the Investment Company Act or
by the Maryland General Corporation Law (including, without limitation,
approval of any plan, agreement or other arrangement referred to in
subsection (E) above), such requirement as to a separate vote by the
Emerging Markets Growth Class shall apply in lieu of single Emerging
Markets Growth Class voting, and, if permitted by the Investment Company
Act or any rules, regulations or orders thereunder and the Maryland General
Corporation Law, the Emerging Markets Growth Classes shall vote together as
a single Emerging Markets Growth Class on any such matter that shall have
the same effect on each such Emerging Markets Growth Class. As to any
matter that does not affect the interest of a particular Emerging Markets
Growth Class, only the holders of shares of the affected Emerging Markets
Growth Class shall be entitled to vote.
SECOND: (a) The total number of shares of capital stock of all
sub-classes of the Seligman Henderson Global Growth Opportunities Fund Class of
the Corporation (the "Global Growth Series") which the Corporation has authority
to issue is 400,000,000 shares, which were previously classified by the Board of
Directors of the Corporation into three classes designated as Class A Common
Stock, Class B Common Stock and Class D Common Stock of the Global Growth
Series. The number of authorized shares of Class A Common Stock, Class B Common
Stock and Class D Common Stock of the Global Growth Series each consisted of the
sum of x and y, where x equaled the issued and outstanding shares of such
sub-class and y equaled one-third of the authorized but unissued shares of
Common Stock of all sub-classes; PROVIDED that at all times the aggregate
authorized, issued and outstanding shares of Class A, Class B and Class D Common
Stock of the Global Growth Series shall not exceed the authorized number of
shares of Common Stock of the Global Growth Series; and, in the event
application of the formula above would have resulted, at any time, in fractional
shares, the applicable number of authorized shares of each class was to have
been rounded down to the nearest whole number of shares of such sub-class.
- 3 -
<PAGE>
(b): Pursuant to the authority of the Board of Directors to classify
and reclassify unissued shares of capital stock of the Corporation, the Board of
Directors has reclassified the unissued shares of Class A Common Stock, Class B
Common Stock and Class D Common Stock of the Global Growth Series into the
following subclasses, has provided for the issuance of shares of such subclasses
and has set the following terms of such subclasses:
(1) The total number of shares of all classes of stock which the
Global Growth Series has authority to issue is 400,000,000 shares of common
stock ("Shares") of the par value of $.001 each having an aggregate par
value of $400,000. The Common Stock of the Global Growth Series shall have
four subclasses of shares, which shall be designated Class A Common Stock,
Class B Common Stock, Class C Common Stock and Class D Common Stock. The
number of authorized shares of Class A Common Stock, of Class B Common
Stock, of Class C Common Stock and of Class D Common Stock of the Global
Growth Series shall each consist of the sum of x and y, where x equals the
issued and outstanding shares of such subclass and y equals one-fourth of
the authorized but unissued shares of Common Stock of all subclasses;
PROVIDED that at all times the aggregate authorized, issued and outstanding
shares of Class A, Class B, Class C and Class D Common Stock of the Global
Growth Series shall not exceed the authorized number of shares of Common
Stock of the Global Growth Series (I.E., 400,000,000 shares of Common Stock
until changed by further action of the Board of Directors in accordance
with Section 2-208.1 of the Maryland General Corporation Law, or any
successor provision); and, in the event application of the formula above
would result, at any time, in fractional shares, the applicable number of
authorized shares of each class shall be rounded down to the nearest whole
number of shares of such class. Any subclass of Common Stock of the Global
Growth Series shall be referred to herein individually as a "Global Growth
Class" and collectively, together with any further subclass or sub classes
from time to time established, as the "Global Growth Classes".
(2) All Global Growth Classes shall represent the same interest in the
Corporation and have identical voting, dividend, liquidation, and other
rights; PROVIDED, HOWEVER, that notwithstanding anything in the charter of
the Corporation to the contrary:
(A) Class A shares may be subject to such front-end sales loads
as may be established by the Board of Directors from time to time in
accordance with the Investment Company Act and applicable rules and
regulations of the National Association of Securities Dealers, Inc.
(the "NASD").
(B) Class B shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD. Subject to subsection (F) below,
each Global Growth Class B share shall convert automatically into
Global Growth Class A shares on the last business day of the month
that precedes the eighth anniversary of the date of issuance of such
Global Growth Class B share; such conversion shall be effected on the
basis of the
- 4 -
<PAGE>
relative net asset values of Global Growth Class B shares and Global
Growth Class A shares as determined by the Corporation on the date of
conversion.
(C) Class C shares may be subject to such front-end sales loads
and such contingent deferred sales charges as may be established from
time to time by the Board of Directors in accordance with the
Investment Company Act and applicable rules and regulations of the
NASD.
(D) Class D shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD.
(E) Expenses related solely to a particular Global Growth Class
(including, without limitation, distribution expenses under a Rule
12b-1 plan and administrative expenses under an administration or
service agreement, plan or other arrangement, however designated,
which may differ between the Global Growth Classes) shall be borne by
that Global Growth Class and shall be appropriately reflected (in the
manner determined by the Board of Directors) in the net asset value,
dividends, distribution and liquidation rights of the shares of that
Global Growth Class.
(F) At such time as shall be permitted under the Investment
Company Act, any applicable rules and regulations thereunder and the
provisions of any exemptive order applicable to the Corporation, and
as may be determined by the Board of Directors and disclosed in the
then current prospectus of the Global Growth Series, shares of a
particular Global Growth Class may be automatically converted into
shares of another Global Growth Class; PROVIDED, HOWEVER, that such
conversion shall be subject to the continuing availability of an
opinion of counsel to the effect that such conversion does not
constitute a taxable event under Federal income tax law. The Board of
Directors, in its sole discretion, may suspend any conversion rights
if such opinion is no longer available.
(G) As to any matter with respect to which a separate vote of any
Global Growth Class is required by the Investment Company Act or by
the Maryland General Corporation Law (including, without limitation,
approval of any plan, agreement or other arrangement referred to in
subsection (E) above), such requirement as to a separate vote by the
Global Growth Class shall apply in lieu of single Global Growth Class
voting, and, if permitted by the Investment Company Act or any rules,
regulations or orders thereunder and the Maryland General Corporation
Law, the Global Growth Classes shall vote together as a single Global
Growth Class on any such matter that shall have the same effect on
each such Global Growth Class. As to any matter that does not affect
the interest of a particular Global Growth Class, only the holders of
shares of the affected Global Growth Class shall be entitled to vote.
- 5 -
<PAGE>
THIRD: (a) The total number of shares of capital stock of all subclasses of
the Seligman Henderson Global Smaller companies Fund Class of the Corporation
(the "Global Smaller Companies Series") which the Corporation has authority to
issue is 400,000,000 shares, which were previously classified by the Board of
Directors of the Corporation into three classes designated as Class A Common
Stock, Class B Common Stock and Class D Common Stock of the Global Smaller
Companies Series. The number of authorized shares of Class A Common Stock, Class
B Common Stock and Class D Common Stock of the Global Smaller Companies Series
each consisted of the sum of x and y, where x equaled the issued and outstanding
shares of such subclass and y equaled one-third of the authorized but unissued
shares of Common Stock of all classes of the Global Smaller Companies Series;
PROVIDED that at all times the aggregate authorized, issued and outstanding
shares of Class A, Class B and Class D Common Stock of the Global Smaller
Companies Series shall not exceed the authorized number of shares of Common
Stock of the Global Smaller Companies Series; and, in the event application of
the formula above would have resulted, at any time, in fractional shares, the
applicable number of authorized shares of each subclass was to have been rounded
down to the nearest whole number of shares of such subclass.
(b): Pursuant to the authority of the Board of Directors to classify and
reclassify unissued shares of capital stock of the Corporation, the Board of
Directors has reclassified the unissued shares of Class A Common Stock, Class B
Common Stock and Class D Common Stock of the Global Smaller Companies Series
into the following subclasses, has provided for the issuance of shares of such
subclasses and has set the following terms of such sub-classes.
(1) The total number of shares of all classes of stock which the
Global Smaller Companies Series has authority to issue is 400,000,000
shares of common stock ("Shares") of the par value of $.001 each having an
aggregate par value of $400,000. The Common Stock of the Global Smaller
Companies Series shall have four subclasses of shares, which shall be
designated Class A Common Stock, Class B Common Stock, Class C Common Stock
and Class D Common Stock. The number of authorized shares of Class A Common
Stock, of Class B Common Stock, of Class C Common Stock and of Class D
Common Stock of the Global Smaller Companies Series shall each consist of
the sum of x and y, where x equals the issued and outstanding shares of
such subclass and y equals one-fourth of the authorized but unissued shares
of Common Stock of all subclasses of the Global Smaller Companies Series;
PROVIDED that at all times the aggregate authorized, issued and outstanding
shares of Class A, Class B, Class C and Class D Common Stock of the Global
Smaller Companies Series shall not exceed the authorized number of shares
of Common Stock of the Global Smaller Companies Series (I.E., 400,000,000
shares of Common Stock until changed by further action of the Board of
Directors in accordance with Section 2-208.1 of the Maryland General
Corporation Law, or any successor provision); and, in the event application
of the formula above would result, at any time, in fractional shares, the
applicable number of authorized shares of each subclass shall be rounded
down to the nearest whole number of shares of such subclass. Any subclass
of Common Stock of the Global Smaller Companies Series shall be referred to
herein individually as a "Global Smaller Companies Class" and collectively,
together with any further subclass or subclasses from time to time
established, as the "Global Smaller Companies Classes".
- 6 -
<PAGE>
(2) All Global Smaller Companies Classes shall represent the same interest
in the Corporation and have identical voting, dividend, liquidation, and other
rights; PROVIDED, HOWEVER, that notwithstanding anything in the charter of the
Corporation to the contrary:
(A) Class A shares may be subject to such front-end sales loads as may
be established by the Board of Directors from time to time in accordance
with the Investment Company Act and applicable rules and regulations of the
National Association of Securities Dealers, Inc. (the "NASD").
(B) Class B shares may be subject to such contingent deferred sales
charges as may be established from time to time by the Board of Directors
in accordance with the Investment Company Act and applicable rules and
regulations of the NASD. Subject to subsection (F) below, each Global
Smaller Companies Class B share shall convert automatically into Global
Smaller Companies Class A shares on the last business day of the month that
precedes the eighth anniversary of the date of issuance of such Global
Smaller Companies Class B share; such conversion shall be effected on the
basis of the relative net asset values of Global Smaller Companies Class B
shares and Global Smaller Companies Class A shares as determined by the
Corporation on the date of conversion.
(C) Class C shares may be subject to such front-end sales loads and
such contingent deferred sales charges as may be established from time to
time by the Board of Directors in accordance with the Investment Company
Act and applicable rules and regulations of the NASD.
(D) Class D shares may be subject to such contingent deferred sales
charges as may be established from time to time by the Board of Directors
in accordance with the Investment Company Act and applicable rules and
regulations of the NASD.
(E) Expenses related solely to a particular Global Smaller Companies
Class (including, without limitation, distribution expenses under a Rule
12b-1 plan and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated, which may differ
between the Global Smaller Companies Classes) shall be borne by that Global
Smaller Companies Class and shall be appropriately reflected (in the manner
determined by the Board of Directors) in the net asset value, dividends,
distribution and liquidation rights of the shares of that Global Smaller
Companies Class.
(F) At such time as shall be permitted under the Investment Company
Act, any applicable rules and regulations thereunder and the provisions of
any exemptive order applicable to the Corporation, and as may be determined
by the Board of Directors and disclosed in the then current prospectus of
the Global Smaller Companies Series, shares of a particular Global Smaller
Companies Class may be automatically converted into shares of another
Global Smaller Companies Class;
- 7 -
<PAGE>
PROVIDED, HOWEVER, that such conversion shall be subject to the continuing
availability of an opinion of counsel to the effect that such conversion
does not constitute a taxable event under Federal income tax law. The Board
of Directors, in its sole discretion, may suspend any conversion rights if
such opinion is no longer available.
(G) As to any matter with respect to which a separate vote of any
Global Smaller Companies Class is required by the Investment Company Act or
by the Maryland General Corporation Law (including, without limitation,
approval of any plan, agreement or other arrangement referred to in
subsection (E) above), such requirement as to a separate vote by that
Global Smaller Companies Class shall apply in lieu of single Global Smaller
Companies Class voting, and, if permitted by the Investment Company Act or
any rules, regulations or orders thereunder and the Maryland General
Corporation Law, the Global Smaller Companies Classes shall vote together
as a single Global Smaller Companies Class on any such matter that shall
have the same effect on each such Global Smaller Companies Class. As to any
matter that does not affect the interest of a particular Global Smaller
Companies Class, only the holders of shares of the affected Global Smaller
Companies Class shall be entitled to vote.
FOURTH: (a) The total number of shares of capital stock of all subclasses
of the Seligman Henderson Global Technology Fund Class of the Corporation (the
"Global Technology Series") which the Corporation has authority to issue is
400,000,000 shares, which were previously classified by the Board of Directors
of the Corporation into three classes designated as Class A Common Stock, Class
B Common Stock and Class D Common Stock of the Global Technology Series. The
number of authorized shares of Class A Common Stock, Class B Common Stock and
Class D Common Stock of the Global Technology Series each consisted of the sum
of x and y, where x equaled the issued and outstanding shares of such subclass
and y equaled one-third of the authorized but unissued shares of Common Stock of
all subclasses of the Global Technology Series; PROVIDED that at all times the
aggregate authorized, issued and outstanding shares of Class A, Class B and
Class D Common Stock of the Global Technology Series shall not exceed the
authorized number of shares of Common Stock of the Global Technology Series;
and, in the event application of the formula above would have resulted, at any
time, in fractional shares, the applicable number of authorized shares of each
subclass was to have been rounded down to the nearest whole number of shares of
such subclass.
(b): Pursuant to the authority of the Board of Directors to classify and
reclassify unissued shares of capital stock of the Corporation, the Board of
Directors has reclassified the unissued shares of Class A Common Stock, Class B
Common Stock and Class D Common Stock into the following subclasses, has
provided for the issuance of shares of such subclasses and have set the
following terms of such subclasses:
(1) The total number of shares of all classes of stock which the
Global Technology Series has authority to issue is 400,000,000 shares of
common stock ("Shares") of the par value of $.001 each having an aggregate
par value of $400,000. The
- 8 -
<PAGE>
Common Stock of the Global Technology Series shall have four subclasses of
shares, which shall be designated Class A Common Stock, Class B Common
Stock, Class C Common Stock and Class D Common Stock. The number of
authorized shares of Class A Common Stock, of Class B Common Stock, of
Class C Common Stock and of Class D Common Stock shall each consist of the
sum of x and y, where x equals the issued and outstanding shares of such
subclass and y equals one-fourth of the authorized but unissued shares of
Common Stock of all subclasses; PROVIDED that at all times the aggregate
authorized, issued and outstanding shares of Class A, Class B, Class C and
Class D Common Stock of the Global Technology Series shall not exceed the
authorized number of shares of Common Stock (I.E., 400,000,000 shares of
Common Stock of the Global Technology Series until changed by further
action of the Board of Directors in accordance with Section 2-208.1 of the
Maryland General Corporation Law, or any successor provision); and, in the
event application of the formula above would result, at any time, in
fractional shares, the applicable number of authorized shares of each class
shall be rounded down to the nearest whole number of shares of such
subclass. Any subclass of Common Stock of the Global Technology Series
shall be referred to herein individually as a "Global Technology Class" and
collectively, together with any further subclass or subclasses from time to
time established, as the "Global Technology Classes".
(2) All Global Technology Classes shall represent the same interest in the
Corporation and have identical voting, dividend, liquidation, and other rights;
PROVIDED, HOWEVER, that notwithstanding anything in the charter of the
Corporation to the contrary:
(A) Class A shares may be subject to such front-end sales loads as may
be established by the Board of Directors from time to time in accordance
with the Investment Company Act and applicable rules and regulations of the
National Association of Securities Dealers, Inc. (the "NASD").
(B) Class B shares may be subject to such contingent deferred sales
charges as may be established from time to time by the Board of Directors
in accordance with the Investment Company Act and applicable rules and
regulations of the NASD. Subject to subsection (F) below, each Global
Technology Class B share shall convert automatically into Global Technology
Class A shares on the last business day of the month that precedes the
eighth anniversary of the date of issuance of such Global Technology Class
B share; such conversion shall be effected on the basis of the relative net
asset values of Global Technology Class B shares and Global Technology
Class A shares as determined by the Corporation on the date of conversion.
(C) Class C shares may be subject to such front-end sales loads and
such contingent deferred sales charges as may be established from time to
time by the Board of Directors in accordance with the Investment Company
Act and applicable rules and regulations of the NASD.
- 9 -
<PAGE>
(D) Class D shares may be subject to such contingent deferred sales
charges as may be established from time to time by the Board of Directors
in accordance with the Investment Company Act and applicable rules and
regulations of the NASD.
(E) Expenses related solely to a particular Global Technology Class
(including, without limitation, distribution expenses under a Rule 12b-1
plan and administrative expenses under an administration or service
agreement, plan or other arrangement, however designated, which may differ
between the Global Technology Classes) shall be borne by that Global
Technology Class and shall be appropriately reflected (in the manner
determined by the Board of Directors) in the net asset value, dividends,
distribution and liquidation rights of the shares of that Global Technology
Class.
(F) At such time as shall be permitted under the Investment Company
Act, any applicable rules and regulations thereunder and the provisions of
any exemptive order applicable to the Corporation, and as may be determined
by the Board of Directors and disclosed in the then current prospectus of
the Global Technology Series, shares of a particular Global Technology
Class may be automatically converted into shares of another Global
Technology Class; PROVIDED, HOWEVER, that such conversion shall be subject
to the continuing availability of an opinion of counsel to the effect that
such conversion does not constitute a taxable event under Federal income
tax law. The Board of Directors, in its sole discretion, may suspend any
conversion rights if such opinion is no longer available.
(G) As to any matter with respect to which a separate vote of any
Global Technology Class is required by the Investment Company Act or by the
Maryland General Corporation Law (including, without limitation, approval
of any plan, agreement or other arrangement referred to in subsection (E)
above), such requirement as to a separate vote by that Global Technology
Class shall apply in lieu of single Global Technology Class voting, and, if
permitted by the Investment Company Act or any rules, regulations or orders
thereunder and the Maryland General Corporation Law, the Global Technology
Classes shall vote together as a single Global Technology Class on any such
matter that shall have the same effect on each such Class. As to any matter
that does not affect the interest of a particular Global Technology Class,
only the holders of shares of the affected Global Technology Class shall be
entitled to vote.
FIFTH: (a) The total number of shares of capital stock of all subclasses of
the Seligman Henderson International Fund Class of the Corporation (the
"International Series") which the Corporation has authority to issue is
400,000,000 shares, which were previously classified by the Board of Directors
of the Corporation into three subclasses designated as Class A Common Stock,
Class B Common Stock and Class D Common Stock of the International Series. The
number of authorized shares of Class A Common Stock, Class B Common Stock and
Class D Common Stock of the International Series each consisted of the sum of x
and y, where x equaled
- 10 -
<PAGE>
the issued and outstanding shares of such subclass and y equaled one-third of
the authorized but unissued shares of Common Stock of all subclasses of the
International Series; PROVIDED that at all times the aggregate authorized,
issued and outstanding shares of Class A, Class B and Class D Common Stock of
the International Series shall not exceed the authorized number of shares of
Common Stock of the International Series; and, in the event application of the
formula above would have resulted, at any time, in fractional shares, the
applicable number of authorized shares of each subclass was to have been rounded
down to the nearest whole number of shares of such subclass.
(b) Pursuant to the authority of the Board of Directors to classify and
reclassify unissued shares of capital stock of the Corporation, the Board of
Directors has reclassified the unissued shares of Class A Common Stock, Class B
Common Stock and Class D of the International Series into the following
subclasses, has provided for the issuance of shares of such subclasses and has
set the following terms of such subclasses:.
(1) The total number of shares of all classes of stock which the
International Series has authority to issue is 400,000,000 shares of common
stock ("Shares") of the par value of $.001 each having an aggregate par
value of $400,000. The Common Stock of the International Series shall have
four subclasses of shares, which shall be designated Class A Common Stock,
Class B Common Stock, Class C Common Stock and Class D Common Stock. The
number of authorized shares of Class A Common Stock, of Class B Common
Stock, of Class C Common Stock and of Class D Common Stock shall each
consist of the sum of x and y, where x equals the issued and outstanding
shares of such subclass and y equals one-fourth of the authorized but
unissued shares of Common Stock of all subclasses of the International
Series; PROVIDED that at all times the aggregate authorized, issued and
outstanding shares of Class A, Class B, Class C and Class D Common Stock of
the International Series shall not exceed the authorized number of shares
of Common Stock of the International Series (I.E., 400,000 shares of Common
Stock until changed by further action of the Board of Directors in
accordance with Section 2-208.1 of the Maryland General Corporation Law, or
any successor provision); and, in the event application of the formula
above would result, at any time, in fractional shares, the applicable
number of authorized shares of each subclass shall be rounded down to the
nearest whole number of shares of such subclass. Any subclass of Common
Stock of the International Series shall be referred to herein individually
as an "International Class" and collectively, together with any further
subclass or subclasses from time to time established, as the "International
Classes".
(2) All International Classes shall represent the same interest in the
Corporation and have identical voting, dividend, liquidation, and other
rights; PROVIDED, HOWEVER, that notwithstanding anything in the charter of
the Corporation to the contrary:
(A) Class A shares may be subject to such front-end sales loads
as may be established by the Board of Directors from time to time in
accordance with the Investment Company Act and applicable rules and
regulations of the National Association of Securities Dealers, Inc.
(the "NASD").
- 11 -
<PAGE>
(B) Class B shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD. Subject to subsection (F) below,
each Class B share shall convert automatically into International
Class A shares on the last business day of the month that precedes the
eighth anniversary of the date of issuance of such International Class
B share; such conversion shall be effected on the basis of the
relative net asset values of International Class B shares and
International Class A shares as determined by the Corporation on the
date of conversion.
(C) Class C shares may be subject to such front-end sales loads
and such contingent deferred sales charges as may be established from
time to time by the Board of Directors in accordance with the
Investment Company Act and applicable rules and regulations of the
NASD.
(D) Class D shares may be subject to such contingent deferred
sales charges as may be established from time to time by the Board of
Directors in accordance with the Investment Company Act and applicable
rules and regulations of the NASD.
(E) Expenses related solely to a particular International Class
(including, without limitation, distribution expenses under a Rule
12b-1 plan and administrative expenses under an administration or
service agreement, plan or other arrangement, however designated,
which may differ between the International Classes) shall be borne by
that International Class and shall be appropriately reflected (in the
manner determined by the Board of Directors) in the net asset value,
dividends, distribution and liquidation rights of the shares of that
International Class.
(F) At such time as shall be permitted under the Investment
Company Act, any applicable rules and regulations thereunder and the
provisions of any exemptive order applicable to the Corporation, and
as may be determined by the Board of Directors and disclosed in the
then current prospectus of the International Series shares of a
particular International Class may be automatically converted into
shares of another International Class; PROVIDED, HOWEVER, that such
conversion shall be subject to the continuing availability of an
opinion of counsel to the effect that such conversion does not
constitute a taxable event under Federal income tax law. The Board of
Directors, in its sole discretion, may suspend any conversion rights
if such opinion is no longer available.
(G) As to any matter with respect to which a separate vote of any
International Class is required by the Investment Company Act or by
the Maryland General Corporation Law (including, without limitation,
approval of any plan, agreement or other arrangement referred to in
subsection (E) above), such requirement as to a separate vote by that
International Class shall apply in lieu of
- 12 -
<PAGE>
single International Class voting, and, if permitted by the Investment
Company Act or any rules, regulations or orders thereunder and the
Maryland General Corporation Law, the International Classes shall vote
together as a single International Class on any such matter that shall
have the same effect on each such International Class. As to any
matter that does not affect the interest of a particular International
Class, only the holders of shares of the affected International Class
shall be entitled to vote.
SIXTH: These Articles Supplementary do not change the total number of
authorized shares of the Corporation.
IN WITNESS WHEREOF, SELIGMAN HENDERSON GLOBAL FUND SERIES, INC. has caused
these Articles Supplementary to be signed in its name and on its behalf by its
President and witnessed by its Secretary, and each of said officers of the
Corporation has also acknowledged these Articles Supplementary to be the
corporate act of the Corporation and has stated under penalties of perjury that
to the best of his knowledge, information and belief that the matters and facts
set forth with respect to approval are true in all material respects, all on May
24, 1999.
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
By: /s/ Brian T. Zino
--------------------------------------------
Brian T. Zino, President
Witness:
/s/ Frank J. Nasta
- ----------------------------
Frank J. Nasta, Secretary
- 13 -
SULLIVAN & CROMWELL
May 27, 1999
Seligman Henderson Global Fund Series, Inc.,
100 Park Avenue,
New York, N.Y. 10017.
Dear Sirs:
In connection with Post-Effective Amendment No.28 to the Registration
Statement on Form N-1A (File No. 33-44186) of Seligman Henderson Global Fund
Series, Inc., a Maryland corporation (the "Fund"), which you expect to file
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to an indefinite number of shares of capital stock, par value $0.001 per
share, of the class designated as Class C shares (the "Shares") of the series of
the Fund designated as 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 (collectively, the "Series"), we, as your counsel, have
examined such corporate records, certificates and other documents, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion.
The number of shares of each class of capital stock that each Series is
authorized to issue at any time is determined by adding to the number of shares
of such class then outstanding additional authorized shares in an amount
determined according to a formula set forth in the Fund's charter. The formula
allocates to each class an equal portion of the number of shares representing
the difference between the number of shares that the Series is authorized to
issue and the total number of shares of all classes of such Series outstanding
at such time.
<PAGE>
Upon the basis of such examination, we advise you that, in our opinion, the
Fund is authorized to issue the number of Shares of each Series determined in
accordance with the charter of the Fund as described above and, when the
Post-Effective Amendment referred to above has become effective under the
Securities Act and the Shares have been issued (a) for at least the par value
thereof in accordance with the Registration Statement referred to above, (b) so
as not to exceed the then authorized number of Shares of such Series and (c) in
accordance with the authorization of the Board of Directors, the Shares will be
duly and validly issued, fully paid and non-assessable.
The foregoing opinion is limited to the Federal laws of the United States
and the General Corporation Law of the State of Maryland, and we are expressing
no opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment referred to above. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act.
Very truly yours,
SULLIVAN & CROMWELL
-2-
CONSENT OF INDEPENDENT AUDITORS
Seligman Henderson Global Fund Series, Inc.:
We consent to the use in Post-Effective Amendment No. 28 to Registration
Statement No. 33-44186 of our report dated December 4, 1998, appearing in the
Annual Report to Shareholders for the year ended October 31, 1998, incorporated
by reference in the Statement of Additional Information, and to the reference to
us under the caption "Financial Highlights" in the Prospectus, which is also
part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
May 26, 1999
INVESTMENT LETTER
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
Seligman Henderson Global Fund Series, Inc. (the "Fund"), an open-end
diversified management investment company, and the undersigned ("Purchaser"),
intending to be legally bound, hereby agree as follows:
1. The Fund hereby sells to Purchaser and Purchaser purchases 1 Class C share
of Capital Stock (par value $.001) of the Seligman Henderson International
Series of the Fund (the "International Series") at a price equivalent to
the net asset value of one Class D share of the International Series as of
the close of business on May 27, 1999, 1 Class C share of Capital Stock
(par value $.001) of the Seligman Henderson Emerging Markets Growth Series
of the Fund (the "Emerging Markets Growth Series") at a price equivalent to
the net asset value of one Class D share of the Emerging Markets Growth
Series as of the close of business on May 27, 1999, 1 Class C share of
Capital Stock (par value $.001) of the Seligman Henderson Global Growth
Opportunities Series of the Fund (the "Global Growth Opportunities Series")
at a price equivalent to the net asset value of one Class D share of the
Global Growth Opportunities Series as of the close of business on May 27,
1999, 1 Class C share of Capital Stock (par value $.001) of the Seligman
Henderson Global Smaller Companies Series of the Fund (the "Global Smaller
Companies Series") at a price equivalent to the net asset value of one
Class D share of the Global Smaller Companies Series as of the close of
business on May 27, 1999, and 1 Class C share of Capital Stock (par value
$.001) of the Seligman Henderson Global Technology Series of the Fund (the
"Global Technology Series") at a price equivalent to the net asset value of
one Class D share of the Global Technology Series as of the close of
business on May 27, 1999 (collectively, the "Shares"). The Fund hereby
acknowledges receipt from Purchaser of funds in such amount in full payment
for the Shares
2. Purchaser represents and warrants to the Fund that the Shares are being
acquired for investment and not with a view to distribution thereof, and
that Purchaser has no present intention to redeem or dispose of the Share.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
28th day of May, 1999 ("Purchase Date").
SELIGMAN HENDERSON GLOBAL FUND SERIES, INC.
By: _______________________________
Name: Lawrence P. Vogel
Title: Vice President
J. & W. SELIGMAN & CO. INCORPORATED
By: ________________________________
Name: Brian T. Zino
Title: President
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
----------------------------------------------------------
As amended and restated through June 1, 1999
SECTION 1. Seligman Henderson International Fund (the
"Series"), a series of Seligman Henderson Global Fund Series, Inc. (the "Fund")
will pay fees to Seligman Advisors, Inc., the principal underwriter of its
shares (the "Distributor"), for administration, shareholder services and
distribution assistance for the Class A, Class B, Class C and Class D shares of
the Series. As a result, the Series is adopting this Administration, Shareholder
Services and Distribution Plan (the "Plan") pursuant to Section 12(b) of the
Investment Company Act of 1940, as amended (the "Act") and Rule 12b-1
thereunder.
SECTION 2. Pursuant to this Plan, the Series may pay to the
Distributor a shareholder servicing fee of up to .25% on an annual basis of the
average daily net assets of the Series (payable quarterly with respect to Class
A and monthly with respect to Class B, Class C and Class D) and a distribution
fee of .75% on an annual basis, payable monthly, of the average daily net assets
of the Series attributable to the Class B Shares and a distribution fee of up to
.75% on an annual basis, payable monthly, of the average daily net assets of the
Series attributable to Class C and Class D shares. Such fees will be used in
their entirety by the Distributor to make payments for administration,
shareholder services and distribution assistance, including, but not limited to
(i) compensation to securities dealers and other organizations (each, a "Service
Organization" and collectively, the "Service Organizations"), for providing
distribution assistance with respect to assets invested in the Series, (ii)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to Series shareholders, and (iii)
otherwise promoting the sale of shares of the Series, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying the Distributor's costs incurred in connection with its
marketing efforts with respect to shares of the Series. To the extent a Service
Organization provides administration, accounting and other shareholder services,
payment for which is not required to be made pursuant to a plan meeting the
requirements of Rule 12b-1, a portion of the fee paid by the Series shall be
deemed to include compensation for such services. The fees received from the
Series hereunder in respect of the Class A shares may not be used to pay any
interest expense, carrying charges or other financing costs, and fees received
hereunder may not be used to pay any allocation of overhead of the Distributor.
The fees of any particular class of the Series may not be used to subsidize the
sale of shares of any other class. The fees payable to Service Organizations
from time to time shall, within such limits, be determined by the Directors of
the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's
investment manager (the "Manager"), in its sole discretion, may make payments to
the Distributor for similar purposes. These payments will be made by the Manager
from its own resources, which may include the management fee that the Manager
receives from the Series.
SECTION 4. This Plan shall continue in effect through December
31 of each year so long as such continuance is specifically approved at least
annually by vote of a majority of both
1
<PAGE>
(a) the Directors of the Fund and (b) the Qualified Directors, cast in person
at a meeting called for the purpose of voting on such approval.
SECTION 5. The Distributor shall provide to the Fund's
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made.
SECTION 6. This Plan may be terminated by the Series with
respect to any class at any time by vote of a majority of the Qualified
Directors, or by vote of a majority of the outstanding voting securities of such
class. If this Plan is terminated in respect of a class, no amounts (other than
amounts accrued but not yet paid) would be owed by the Series to the Distributor
with respect to such class.
SECTION 7. All agreements related to this Plan shall be in
writing, and shall be approved by vote of a majority of both (a) the Directors
of the Fund and (b) the Qualified Directors, cast in person at a meeting called
for the purpose of voting on such approval, provided, however, that the identity
of a particular Service Organization executing any such agreement may be
ratified by such a vote within 90 days of such execution. Any agreement related
to this Plan shall provide:
A. That such agreement may be terminated in respect of any class
of the Series at any time, without payment of any penalty, by
vote of a majority of the Qualified Directors or by vote of a
majority of the outstanding voting securities of the class, on
not more than 60 days' written notice to any other party to
the agreement; and
B. That such agreement shall terminate automatically in the event of
its assignment.
SECTION 8. This Plan may not be amended to increase materially
the amount of fees permitted pursuant to Section 2 hereof without the approval
of a majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
SECTION 9. The Series is not obligated to pay any
administration, shareholder services or distribution expense in excess of the
fee described in Section 2 hereof, and, in the case of Class A shares, any
expenses of administration, shareholder services and distribution of Class A
2
<PAGE>
shares of the Series accrued in one fiscal year of the Series may not be paid
from administration, shareholder services and distribution fees received from
the Series in respect of Class A shares in any other fiscal year.
SECTION 10. As used in this Plan, (a) the terms "assignment",
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission and (b) the term "Qualified Directors"
shall mean the Directors of the Fund who are not "interested persons" of the
Fund and have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to this Plan.
3
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
----------------------------------------------------------
SECTION 1. Seligman Henderson Emerging Markets Growth Fund
(the "Series"), a series of Seligman Henderson Global Fund Series, Inc. (the
"Fund") will pay fees to Seligman Advisors, Inc., the principal underwriter of
its shares (the "Distributor"), for administration, shareholder services and
distribution assistance for the Class A, Class B, Class C and Class D shares of
the Series. As a result, the Series is adopting this Administration, Shareholder
Services and Distribution Plan (the "Plan") pursuant to Section 12(b) of the
Investment Company Act of 1940, as amended (the "Act") and Rule 12b-1
thereunder.
SECTION 2. Pursuant to this Plan, the Series may pay to the
Distributor a shareholder servicing fee of up to .25% on an annual basis of the
average daily net assets of the Series (payable quarterly with respect to Class
A and monthly with respect to Class B, Class C and Class D) and a distribution
fee of .75% on an annual basis, payable monthly, of the average daily net assets
of the Series attributable to the Class B Shares and a distribution fee of up to
.75% on an annual basis, payable monthly, of the average daily net assets of the
Series attributable to Class C and Class D shares. Such fees will be used in
their entirety by the Distributor to make payments for administration,
shareholder services and distribution assistance, including, but not limited to
(i) compensation to securities dealers and other organizations (each, a "Service
Organization" and collectively, the "Service Organizations"), for providing
distribution assistance with respect to assets invested in the Series, (ii)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to Series shareholders, and (iii)
otherwise promoting the sale of shares of the Series, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying the Distributor's costs incurred in connection with its
marketing efforts with respect to shares of the Series. To the extent a Service
Organization provides administration, accounting and other shareholder services,
payment for which is not required to be made pursuant to a plan meeting the
requirements of Rule 12b-1, a portion of the fee paid by the Series shall be
deemed to include compensation for such services. The fees received from the
Series hereunder in respect of the Class A shares may not be used to pay any
interest expense, carrying charges or other financing costs, and fees received
hereunder may not be used to pay any allocation of overhead of the Distributor.
The fees of any particular class of the Series may not be used to subsidize the
sale of shares of any other class. The fees payable to Service Organizations
from time to time shall, within such limits, be determined by the Directors of
the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's
investment manager (the "Manager"), in its sole discretion, may make payments to
the Distributor for similar purposes. These payments will be made by the Manager
from its own resources, which may include the management fee that the Manager
receives from the Series.
1
<PAGE>
SECTION 4. This Plan shall continue in effect through December
31 of each year so long as such continuance is specifically approved at least
annually by vote of a majority of both (a) the Directors of the Fund and (b) the
Qualified Directors, cast in person at a meeting called for the purpose of
voting on such approval.
SECTION 5. The Distributor shall provide to the Fund's
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made.
SECTION 6. This Plan may be terminated by the Series with
respect to any class at any time by vote of a majority of the Qualified
Directors, or by vote of a majority of the outstanding voting securities of such
class. If this Plan is terminated in respect of a class, no amounts (other than
amounts accrued but not yet paid) would be owed by the Series to the Distributor
with respect to such class.
SECTION 7. All agreements related to this Plan shall be in
writing, and shall be approved by vote of a majority of both (a) the Directors
of the Fund and (b) the Qualified Directors, cast in person at a meeting called
for the purpose of voting on such approval, provided, however, that the identity
of a particular Service Organization executing any such agreement may be
ratified by such a vote within 90 days of such execution. Any agreement related
to this Plan shall provide:
A. That such agreement may be terminated in respect of any class
of the Series at any time, without payment of any penalty, by
vote of a majority of the Qualified Directors or by vote of a
majority of the outstanding voting securities of the class, on
not more than 60 days' written notice to any other party to
the agreement; and
B. That such agreement shall terminate automatically in the event of
its assignment.
SECTION 8. This Plan may not be amended to increase materially
the amount of fees permitted pursuant to Section 2 hereof without the approval
of a majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
SECTION 9. The Series is not obligated to pay any
administration, shareholder services or distribution expense in excess of the
fee described in Section 2 hereof, and, in the case of Class A shares, any
2
<PAGE>
expenses of administration, shareholder services and distribution of Class A
shares of the Series accrued in one fiscal year of the Series may not be paid
from administration, shareholder services and distribution fees received from
the Series in respect of Class A shares in any other fiscal year.
SECTION 10. As used in this Plan, (a) the terms "assignment",
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission and (b) the term "Qualified Directors"
shall mean the Directors of the Fund who are not "interested persons" of the
Fund and have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to this Plan.
3
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
----------------------------------------------------------
As amended and restated through June 1, 1999
SECTION 1. Seligman Henderson Global Growth Opportunities Fund
(the "Series"), a series of Seligman Henderson Global Fund Series, Inc. (the
"Fund") will pay fees to Seligman Advisors, Inc., the principal underwriter of
its shares (the "Distributor"), for administration, shareholder services and
distribution assistance for the Class A, Class B, Class C and Class D shares of
the Series. As a result, the Series is adopting this Administration, Shareholder
Services and Distribution Plan (the "Plan") pursuant to Section 12(b) of the
Investment Company Act of 1940, as amended (the "Act") and Rule 12b-1
thereunder.
SECTION 2. Pursuant to this Plan, the Series may pay to the
Distributor a shareholder servicing fee of up to .25% on an annual basis of the
average daily net assets of the Series (payable quarterly with respect to Class
A and monthly with respect to Class B, Class C and Class D) and a distribution
fee of .75% on an annual basis, payable monthly, of the average daily net assets
of the Series attributable to the Class B Shares and a distribution fee of up to
.75% on an annual basis, payable monthly, of the average daily net assets of the
Series attributable to Class C and Class D shares. Such fees will be used in
their entirety by the Distributor to make payments for administration,
shareholder services and distribution assistance, including, but not limited to
(i) compensation to securities dealers and other organizations (each, a "Service
Organization" and collectively, the "Service Organizations"), for providing
distribution assistance with respect to assets invested in the Series, (ii)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to Series shareholders, and (iii)
otherwise promoting the sale of shares of the Series, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying the Distributor's costs incurred in connection with its
marketing efforts with respect to shares of the Series. To the extent a Service
Organization provides administration, accounting and other shareholder services,
payment for which is not required to be made pursuant to a plan meeting the
requirements of Rule 12b-1, a portion of the fee paid by the Series shall be
deemed to include compensation for such services. The fees received from the
Series hereunder in respect of the Class A shares may not be used to pay any
interest expense, carrying charges or other financing costs, and fees received
hereunder may not be used to pay any allocation of overhead of the Distributor.
The fees of any particular class of the Series may not be used to subsidize the
sale of shares of any other class. The fees payable to Service Organizations
from time to time shall, within such limits, be determined by the Directors of
the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's
investment manager (the "Manager"), in its sole discretion, may make payments to
the Distributor for similar purposes. These payments will be made by the Manager
from its own resources, which may include the management fee that the Manager
receives from the Series.
SECTION 4. This Plan shall continue in effect through December
31 of each year so long as such continuance is specifically approved at least
annually by vote of a majority of both (a) the Directors of the Fund and (b) the
Qualified Directors, cast in person at a meeting called for the purpose of
voting on such approval.
1
<PAGE>
SECTION 5. The Distributor shall provide to the Fund's
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made.
SECTION 6. This Plan may be terminated by the Series with
respect to any class at any time by vote of a majority of the Qualified
Directors, or by vote of a majority of the outstanding voting securities of such
class. If this Plan is terminated in respect of a class, no amounts (other than
amounts accrued but not yet paid) would be owed by the Series to the Distributor
with respect to such class.
SECTION 7. All agreements related to this Plan shall be in
writing, and shall be approved by vote of a majority of both (a) the Directors
of the Fund and (b) the Qualified Directors, cast in person at a meeting called
for the purpose of voting on such approval, provided, however, that the identity
of a particular Service Organization executing any such agreement may be
ratified by such a vote within 90 days of such execution. Any agreement related
to this Plan shall provide:
A. That such agreement may be terminated in respect of any class
of the Series at any time, without payment of any penalty, by
vote of a majority of the Qualified Directors or by vote of a
majority of the outstanding voting securities of the class, on
not more than 60 days' written notice to any other party to
the agreement; and
B. That such agreement shall terminate automatically in the event of
its assignment.
SECTION 8. This Plan may not be amended to increase materially
the amount of fees permitted pursuant to Section 2 hereof without the approval
of a majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
SECTION 9. The Series is not obligated to pay any
administration, shareholder services or distribution expense in excess of the
fee described in Section 2 hereof, and, in the case of Class A shares, any
expenses of administration, shareholder services and distribution of Class A
shares of the Series accrued in one fiscal year of the Series may not be paid
from administration, shareholder services and distribution fees received from
the Series in respect of Class A shares in any other fiscal year.
2
<PAGE>
SECTION 10. As used in this Plan, (a) the terms "assignment",
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission and (b) the term "Qualified Directors"
shall mean the Directors of the Fund who are not "interested persons" of the
Fund and have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to this Plan.
3
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
----------------------------------------------------------
As amended and restated through June 1, 1999
SECTION 1. Seligman Henderson Global Smaller Companies Fund
(the "Series"), a series of Seligman Henderson Global Fund Series, Inc. (the
"Fund") will pay fees to Seligman Advisors, Inc., the principal underwriter of
its shares (the "Distributor"), for administration, shareholder services and
distribution assistance for the Class A, Class B, Class C and Class D shares of
the Series. As a result, the Series is adopting this Administration, Shareholder
Services and Distribution Plan (the "Plan") pursuant to Section 12(b) of the
Investment Company Act of 1940, as amended (the "Act") and Rule 12b-1
thereunder.
SECTION 2. Pursuant to this Plan, the Series may pay to the
Distributor a shareholder servicing fee of up to .25% on an annual basis of the
average daily net assets of the Series (payable quarterly with respect to Class
A and monthly with respect to Class B, Class C and Class D) and a distribution
fee of .75% on an annual basis, payable monthly, of the average daily net assets
of the Series attributable to the Class B Shares and a distribution fee of up to
.75% on an annual basis, payable monthly, of the average daily net assets of the
Series attributable to Class C and Class D shares. Such fees will be used in
their entirety by the Distributor to make payments for administration,
shareholder services and distribution assistance, including, but not limited to
(i) compensation to securities dealers and other organizations (each, a "Service
Organization" and collectively, the "Service Organizations"), for providing
distribution assistance with respect to assets invested in the Series, (ii)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to Series shareholders, and (iii)
otherwise promoting the sale of shares of the Series, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying the Distributor's costs incurred in connection with its
marketing efforts with respect to shares of the Series. To the extent a Service
Organization provides administration, accounting and other shareholder services,
payment for which is not required to be made pursuant to a plan meeting the
requirements of Rule 12b-1, a portion of the fee paid by the Series shall be
deemed to include compensation for such services. The fees received from the
Series hereunder in respect of the Class A shares may not be used to pay any
interest expense, carrying charges or other financing costs, and fees received
hereunder may not be used to pay any allocation of overhead of the Distributor.
The fees of any particular class of the Series may not be used to subsidize the
sale of shares of any other class. The fees payable to Service Organizations
from time to time shall, within such limits, be determined by the Directors of
the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's
investment manager (the "Manager"), in its sole discretion, may make payments to
the Distributor for similar purposes. These payments will be made by the Manager
from its own resources, which may include the management fee that the Manager
receives from the Series.
1
<PAGE>
SECTION 4. This Plan shall continue in effect through December
31 of each year so long as such continuance is specifically approved at least
annually by vote of a majority of both (a) the Directors of the Fund and (b) the
Qualified Directors, cast in person at a meeting called for the purpose of
voting on such approval.
SECTION 5. The Distributor shall provide to the Fund's
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made.
SECTION 6. This Plan may be terminated by the Series with
respect to any class at any time by vote of a majority of the Qualified
Directors, or by vote of a majority of the outstanding voting securities of such
class. If this Plan is terminated in respect of a class, no amounts (other than
amounts accrued but not yet paid) would be owed by the Series to the Distributor
with respect to such class.
SECTION 7. All agreements related to this Plan shall be in
writing, and shall be approved by vote of a majority of both (a) the Directors
of the Fund and (b) the Qualified Directors, cast in person at a meeting called
for the purpose of voting on such approval, provided, however, that the identity
of a particular Service Organization executing any such agreement may be
ratified by such a vote within 90 days of such execution. Any agreement related
to this Plan shall provide:
A. That such agreement may be terminated in respect of any class
of the Series at any time, without payment of any penalty, by
vote of a majority of the Qualified Directors or by vote of a
majority of the outstanding voting securities of the class, on
not more than 60 days' written notice to any other party to
the agreement; and
B. That such agreement shall terminate automatically in the event of
its assignment.
SECTION 8. This Plan may not be amended to increase materially
the amount of fees permitted pursuant to Section 2 hereof without the approval
of a majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
SECTION 9. The Series is not obligated to pay any
administration, shareholder services or distribution expense in excess of the
fee described in Section 2 hereof, and, in the case of Class A shares, any
2
<PAGE>
expenses of administration, shareholder services and distribution of Class A
shares of the Series accrued in one fiscal year of the Series may not be paid
from administration, shareholder services and distribution fees received from
the Series in respect of Class A shares in any other fiscal year.
SECTION 10. As used in this Plan, (a) the terms "assignment",
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission and (b) the term "Qualified Directors"
shall mean the Directors of the Fund who are not "interested persons" of the
Fund and have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to this Plan.
3
<PAGE>
ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN
----------------------------------------------------------
SECTION 1. Seligman Henderson Global Technology Fund (the
"Series"), a series of Seligman Henderson Global Fund Series, Inc. (the "Fund")
will pay fees to Seligman Advisors, Inc., the principal underwriter of its
shares (the "Distributor"), for administration, shareholder services and
distribution assistance for the Class A, Class B, Class C and Class D shares of
the Series. As a result, the Series is adopting this Administration, Shareholder
Services and Distribution Plan (the "Plan") pursuant to Section 12(b) of the
Investment Company Act of 1940, as amended (the "Act") and Rule 12b-1
thereunder.
SECTION 2. Pursuant to this Plan, the Series may pay to the
Distributor a shareholder servicing fee of up to .25% on an annual basis of the
average daily net assets of the Series (payable quarterly with respect to Class
A and monthly with respect to Class B, Class C and Class D) and a distribution
fee of .75% on an annual basis, payable monthly, of the average daily net assets
of the Series attributable to the Class B Shares and a distribution fee of up to
.75% on an annual basis, payable monthly, of the average daily net assets of the
Series attributable to Class C and Class D shares. Such fees will be used in
their entirety by the Distributor to make payments for administration,
shareholder services and distribution assistance, including, but not limited to
(i) compensation to securities dealers and other organizations (each, a "Service
Organization" and collectively, the "Service Organizations"), for providing
distribution assistance with respect to assets invested in the Series, (ii)
compensation to Service Organizations for providing administration, accounting
and other shareholder services with respect to Series shareholders, and (iii)
otherwise promoting the sale of shares of the Series, including paying for the
preparation of advertising and sales literature and the printing and
distribution of such promotional materials and prospectuses to prospective
investors and defraying the Distributor's costs incurred in connection with its
marketing efforts with respect to shares of the Series. To the extent a Service
Organization provides administration, accounting and other shareholder services,
payment for which is not required to be made pursuant to a plan meeting the
requirements of Rule 12b-1, a portion of the fee paid by the Series shall be
deemed to include compensation for such services. The fees received from the
Series hereunder in respect of the Class A shares may not be used to pay any
interest expense, carrying charges or other financing costs, and fees received
hereunder may not be used to pay any allocation of overhead of the Distributor.
The fees of any particular class of the Series may not be used to subsidize the
sale of shares of any other class. The fees payable to Service Organizations
from time to time shall, within such limits, be determined by the Directors of
the Fund.
SECTION 3. J. & W. Seligman & Co. Incorporated, the Fund's
investment manager (the "Manager"), in its sole discretion, may make payments to
the Distributor for similar purposes. These payments will be made by the Manager
from its own resources, which may include the management fee that the Manager
receives from the Series.
SECTION 4. This Plan shall continue in effect through December
31 of each year so long as such continuance is specifically approved at least
annually by vote of a majority of both (a) the Directors of the Fund and (b) the
Qualified Directors, cast in person at a meeting called for the purpose of
voting on such approval.
1
<PAGE>
SECTION 5. The Distributor shall provide to the Fund's
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made.
SECTION 6. This Plan may be terminated by the Series with
respect to any class at any time by vote of a majority of the Qualified
Directors, or by vote of a majority of the outstanding voting securities of such
class. If this Plan is terminated in respect of a class, no amounts (other than
amounts accrued but not yet paid) would be owed by the Series to the Distributor
with respect to such class.
SECTION 7. All agreements related to this Plan shall be in
writing, and shall be approved by vote of a majority of both (a) the Directors
of the Fund and (b) the Qualified Directors, cast in person at a meeting called
for the purpose of voting on such approval, provided, however, that the identity
of a particular Service Organization executing any such agreement may be
ratified by such a vote within 90 days of such execution. Any agreement related
to this Plan shall provide:
A. That such agreement may be terminated in respect of any class
of the Series at any time, without payment of any penalty, by
vote of a majority of the Qualified Directors or by vote of a
majority of the outstanding voting securities of the class, on
not more than 60 days' written notice to any other party to
the agreement; and
B. That such agreement shall terminate automatically in the event of
its assignment.
SECTION 8. This Plan may not be amended to increase materially
the amount of fees permitted pursuant to Section 2 hereof without the approval
of a majority of the outstanding voting securities of the relevant class and no
material amendment to this Plan shall be approved other than by vote of a
majority of both (a) the Directors of the Fund and (b) the Qualified Directors,
cast in person at a meeting called for the purpose of voting on such approval.
This Plan shall not be amended to reduce the distribution fee payable to the
Distributor pursuant to Section 2 hereof in respect of Class B shares, unless
the shareholder servicing fee payable pursuant to Section 2 hereof for
compensation to Service Organizations for providing administration, accounting
and other shareholder services has been eliminated, provided, however that the
distribution fee in respect of Class B shares may be reduced without change to
the shareholder servicing fee, if and to the extent required in order to comply
with any applicable laws or regulations, including applicable rules of the
National Association of Securities Dealers, Inc. regulating maximum sales
charges.
SECTION 9. The Series is not obligated to pay any
administration, shareholder services or distribution expense in excess of the
fee described in Section 2 hereof, and, in the case of Class A shares, any
expenses of administration, shareholder services and distribution of Class A
shares of the Series accrued in one fiscal year of the Series may not be paid
from administration, shareholder services and distribution fees received from
the Series in respect of Class A shares in any other fiscal year.
2
<PAGE>
SECTION 10. As used in this Plan, (a) the terms "assignment",
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission and (b) the term "Qualified Directors"
shall mean the Directors of the Fund who are not "interested persons" of the
Fund and have no direct or indirect financial interest in the operation of this
Plan or in any agreement related to this Plan.
3
