UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4250
Seligman Municipal Series Trust
(Exact name of Registrant as specified in charter)
100 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
Lawrence P. Vogel
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant’s telephone number, including area code: (212) 850-1864
Date of fiscal year end: 9/30
Date of reporting period: 3/31/08
FORM N-CSR
ITEM 1. | REPORTS TO STOCKHOLDERS. |
The semi-annual report of Seligman Municipal Series Trust is included in the following combined semi-annual report of Seligman Municipal Funds.
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| Seligman Municipal Funds |
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| Seligman Municipal Series Trust |
| • | California High-Yield Fund |
| • | California Quality Fund |
| • | Florida Fund |
| • | North Carolina Fund |
| Seligman New Jersey Municipal Fund, Inc. |
| Seligman Pennsylvania Municipal Fund Series |
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| Mid-Year Report |
| March 31, 2008 |
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| Seeking Income Exempt |
| From Regular Income Tax |
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| J. & W. SELIGMAN & CO. |
| INCORPORATED |
| ESTABLISHED 1864 |
| 100 Park Avenue, New York, NY 10017 |
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Experience |
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Seligman has been in business for more than 140 years, at times playing a central role in the financial development of the country and its markets. Over that time, the firm has managed clients’ wealth through dramatic market changes and has remained a consistent, reliable presence on Wall Street. Today, Seligman is drawing on its long history and long-term perspective as we focus on the future and on developing investment solutions that help clients arrive at their goals. |
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Insight |
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Asset management is driven by insight — into the direction of the economy, how companies will perform, how markets will behave, and how investors will respond. Portfolio managers at the firm have been in the investment business, on average, for more than 20 years. Over that time, they have refined their ability to assess a company’s prospects, management, and products, while also weighing the impact of economic and market cycles, new trends, and developing technologies. |
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Solutions |
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Seligman’s commitment to the development of innovative investment products — including the nation’s first growth mutual fund, pioneering single-state municipal funds, and one of the country’s premier technology funds — defines our past and informs our future. Our ongoing research into the nature of investment risk — begun in the early 1990s — has resulted in the Seligman Time Horizon Matrix® asset allocation strategy that redefines the relationship between risk and reward over time. The strategy offers investors a variety of investment solutions for goals ranging from college savings to retirement planning. Whether you select Seligman for one investment product, or as a comprehensive asset manager, we believe we can help you reach your goals. |
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We are pleased to present your mid-year shareholder report for Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc., and Seligman Pennsylvania Municipal Fund Series for the six months ended March 31, 2008. The report contains each Fund’s investment results, portfolio of investments, and financial statements. |
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Please note that, on May 16, 2008, Class D shares of the Funds were converted to Class C shares at their respective net asset values. The conversion did not affect individual shareholder account values. Effective at the close of business on May 16, 2008, Class D shares are no longer offered by the Funds. |
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Thank you for your continued support of the Seligman Municipal Funds. We look forward to many more years of providing you with the investment experience, insight, and solutions you need to seek your financial goals. |
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By order of the Boards of Directors and Trustees, |
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William C. Morris Chairman |
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Brian T. Zino President |
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May 20, 2008 |
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Manager | Shareholder Service Agent | Important Telephone Numbers |
J. & W. Seligman & Co. | Seligman Data Corp. | (800) 221-2450 Shareholder Services |
Incorporated | 100 Park Avenue | (800) 445-1777 Retirement Plan Services |
100 Park Avenue | New York, NY 10017 | (212) 682-7600 Outside the United States |
New York, NY 10017 | | (800) 622-4597 24-Hour Automated |
| Mail Inquiries To: | Telephone Access Service |
General Distributor | P.O. Box 9759 | |
Seligman Advisors, Inc. | Providence, RI 02940-9759 | |
100 Park Avenue | | |
New York, NY 10017 | General Counsel | |
| Sullivan & Cromwell LLP | |
1
Performance and Portfolio Overview |
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This section of the report is intended to help you understand the performance of each of the four Funds of Seligman Municipal Series Trust (which consists of the California High-Yield Fund, California Quality Fund, Florida Fund, and North Carolina Fund), Seligman New Jersey Municipal Fund, Inc. (the “New Jersey Fund”) and Seligman Pennsylvania Municipal Fund Series (the “Pennsylvania Fund”) and to provide a summary of the portfolio characteristics of each Fund. |
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Performance data quoted in this report represents past performance and does not guarantee or indicate future investment results. 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. Current performance may be lower or higher than the performance data quoted. Total returns of each of the Funds as of the most recent month end will be available at www.seligman.com1 by the seventh business day following that month end. Calculations assume reinvestment of distributions. Performance data quoted does not reflect the deduction of taxes that an investor may pay on distributions or the redemption of shares. A portion of each Fund’s income may be subject to applicable state and local taxes, and any amount may be subject to the federal alternative minimum tax. Capital gain distributions are subject to federal, state and local taxes. |
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J. & W. Seligman & Co. Incorporated (the “Manager”), at its discretion, waived a portion of its management fees for the California High-Yield and Florida Funds. Such waivers may be discontinued at any time. Absent such waivers, returns and yields for those Funds would have been lower. |
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Returns for Class A shares are calculated with and without the effect of the initial 4.5% maximum sales charge. Although for all periods presented, returns for the Funds’ Class A shares reflect the 4.5% maximum sales charge, the actual returns for periods prior to January 7, 2008 would have been lower if the 4.75% maximum sales charge then in effect was incurred. Returns for Class C and Class D shares are calculated with and without the effect of the 1% contingent deferred sales charge (“CDSC”), charged on redemptions made within one year of purchase. Effective June 4, 2007, there is no initial sales charge on investments in Class C shares. Returns for Class C shares are presented without an initial sales charge, and such returns would have been lower for periods prior to June 4, 2007 if the 1% initial sales charge then in effect was incurred. On May 16, 2008, Class D shares of the Funds were converted to Class C shares at their respective net asset values. Effective at the close of business on May 16, 2008, Class D shares are no longer offered by the Funds. |
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An investment in a 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. |
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Investment Results |
California High-Yield Fund |
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Total Returns For Periods Ended March 31, 2008 | | | | |
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| Six Months* | | One Year | | Five Years | | Ten Years | | Class C Since Inception 5/27/99 | |
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Class A | | | | | | | | | | | | | | | | | | | |
With Sales Charge | | (3.83 | )% | | | (2.85 | )% | | | 3.04 | % | | | 4.08 | % | | n/a | | |
Without Sales Charge | | 0.72 | | | | 1.70 | | | | 4.00 | | | | 4.55 | | | n/a | | |
Class C | | | | | | | | | | | | | | | | | | | |
With 1% CDSC | | (0.71 | ) | | | (0.18 | ) | | | 3.09 | | | | n/a | | | n/a | | |
Without CDSC | | 0.27 | | | | 0.79 | | | | 3.09 | | | | n/a | | | 3.62 | % | |
Class D | | | | | | | | | | | | | | | | | | | |
With 1% CDSC | | (0.71 | ) | | | (0.18 | ) | | | n/a | | | | n/a | | | n/a | | |
Without CDSC | | 0.27 | | | | 0.79 | | | | 3.09 | | | | 3.61 | | | n/a | | |
Benchmarks** | | | | | | | | | | | | | | | | | | | |
Lehman Brothers Municipal Bond Index | | 0.75 | | | | 1.90 | | | | 3.92 | | | | 4.99 | | | 4.98 | # | |
Lipper California Municipal Debt Funds Average | | (2.14 | ) | | | (2.46 | ) | | | 3.41 | | | | 4.11 | | | 3.92 | | |
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Net Asset Value Per Share |
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| 3/31/08 | | 9/30/07 | | 3/31/07 | |
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Class A | $ | 6.45 | | $ | 6.55 | | $ | 6.62 | |
Class C | | 6.46 | | | 6.56 | | | 6.63 | |
Class D | | 6.46 | | | 6.56 | | | 6.63 | |
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Holdings By Market Sectorø |
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Revenue Bonds | 70% | |
Pre-refunded/Escrowed-to-Maturity Bonds | 30 | |
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Weighted Average Maturity3 | 18.6 years | |
Option-Adjusted Duration3 | 6.8 years | |
Dividend and Capital Gain Per Share, and Yield Information For Periods Ended March 31, 2008 |
| Dividend† | | Capital Gain† | | SEC 30-Day Yield†† | |
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Class A | $ | 0.134 | | $ | 0.014 | | | 3.42 | % | |
Class C | | 0.104 | | �� | 0.014 | | | 2.68 | | |
Class D | | 0.104 | | | 0.014 | | | 2.68 | | |
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Holdings by Credit Quality2ø |
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AAA | 20% | |
AA | 20 | |
A | 45 | |
BBB | 5 | |
Non-rated | 10 | |
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_________ |
See footnotes on page 5. |
2
Performance and Portfolio Overview |
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Investment Results |
California Quality Fund |
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Total Returns For Periods Ended March 31, 2008 | | | | |
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| Six Months* | | One Year | | Five Years | | Ten Years | | Class C Since Inception 5/27/99 | |
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Class A | | | | | | | | | | | | | | | | | | | |
With Sales Charge | | (3.93 | )% | | | (2.80 | )% | | | 2.23 | % | | | 3.78 | % | | n/a | | |
Without Sales Charge | | 0.60 | | | | 1.75 | | | | 3.19 | | | | 4.26 | | | n/a | | |
Class C | | | | | | | | | | | | | | | | | | | |
With 1% CDSC | | (0.67 | ) | | | 0.03 | | | | n/a | | | | n/a | | | n/a | | |
Without CDSC | | 0.31 | | | | 1.00 | | | | 2.28 | | | | n/a | | | 3.35 | % | |
Class D | | | | | | | | | | | | | | | | | | | |
With 1% CDSC | | (0.67 | ) | | | 0.03 | | | | n/a | | | | n/a | | | n/a | | |
Without CDSC | | 0.31 | | | | 1.00 | | | | 2.28 | | | | 3.34 | | | n/a | | |
Benchmarks** | | | | | | | | | | | | | | | | | | | |
Lehman Brothers Municipal Bond Index | | 0.75 | | | | 1.90 | | | | 3.92 | | | | 4.99 | | | 4.98 | # | |
Lipper California Municipal Debt Funds Average | | (2.14 | ) | | | (2.46 | ) | | | 3.41 | | | | 4.11 | | | 3.92 | | |
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Net Asset Value Per Share |
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| 3/31/08 | | 9/30/07 | | 3/31/07 | |
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Class A | $ | 6.43 | | $ | 6.57 | | $ | 6.63 | |
Class C | | 6.41 | | | 6.54 | | | 6.60 | |
Class D | | 6.41 | | | 6.54 | | | 6.60 | |
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Holdings by Market Sectorø |
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Revenue Bonds | 74% | |
Pre-refunded/Escrowed-to-Maturity Bonds | 18 | |
General Obligation Bonds | 8 | |
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Weighted Average Maturity3 | 14.7 years | |
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Dividend and Capital Gain Per Share, and Yield Information For Periods Ended March 31, 2008 |
| Dividend† | | Capital Gain† | | SEC 30-Day Yield†† | |
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Class A | $ | 0.127 | | $ | 0.053 | | | 3.30% | |
Class C | | 0.098 | | | 0.053 | | | 2.56 | |
Class D | | 0.098 | | | 0.053 | | | 2.56 | |
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Holdings by Credit Quality 2ø |
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AAA | 51% | |
AA | 32 | |
A | 17 | |
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Option-Adjusted Duration3 | 6.8 years | |
Total Returns For Periods Ended March 31, 2008 | | | | |
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| | | Average Annual | |
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| Six Months* | | One Year | | Five Years | | Ten Years | | Class C Since Inception 5/27/99 | |
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Class A | | | | | | | | | | | | | | | | | | | |
With Sales Charge | | (3.79 | )% | | | (2.43 | )% | | | 2.11 | % | | | 3.77 | % | | n/a | | |
Without Sales Charge | | 0.73 | | | | 2.13 | | | | 3.06 | | | | 4.24 | | | n/a | | |
Class C | | | | | | | | | | | | | | | | | | | |
With 1% CDSC | | (0.57 | ) | | | 0.45 | | | | n/a | | | | n/a | | | n/a | | |
Without CDSC | | 0.41 | | | | 1.42 | | | | 2.27 | | | | n/a | | | 3.45 | % | |
Class D | | | | | | | | | | | | | | | | | | | |
With 1% CDSC | | (0.57 | ) | | | 0.45 | | | | n/a | | | | n/a | | | n/a | | |
Without CDSC | | 0.41 | | | | 1.42 | | | | 2.27 | | | | 3.47 | | | n/a | | |
Benchmarks** | | | | | | | | | | | | | | | | | | | |
Lehman Brothers Municipal Bond Index | | 0.75 | | | | 1.90 | | | | 3.92 | | | | 4.99 | | | 4.98 | # | |
Lipper Florida Municipal Debt Funds Average | | (1.87 | ) | | | (1.73 | ) | | | 3.39 | | | | 4.17 | | | 3.94 | | |
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Net Asset Value Per Share |
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| 3/31/08 | | 9/30/07 | | 3/31/07 | |
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Class A | $ | 7.48 | | $ | 7.66 | | $ | 7.71 | |
Class C | | 7.50 | | | 7.67 | | | 7.72 | |
Class D | | 7.50 | | | 7.67 | | | 7.72 | |
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Holdings by Market Sectorø |
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Pre-refunded/Escrowed-to-Maturity Bonds | 53% | |
Revenue Bonds | 47 | |
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Weighted Average Maturity3 | 10.1 years | |
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Option-Adjusted Duration3 | 5.9 years | |
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Dividend and Capital Gain Per Share, and Yield Information |
For Periods Ended March 31, 2008 |
| Dividends† | | Capital Gain† | | SEC 30-Day Yield†† | |
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Class A | $ | 0.145 | | $ | 0.091 | | | 2.88% | |
Class C | | 0.111 | | | 0.091 | | | 2.27 | |
Class D | | 0.111 | | | 0.091 | | | 2.27 | |
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Holdings by Credit Quality 2ø |
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AAA | 64% | |
AA | 14 | |
A | 22 | |
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_________ |
See footnotes on page 5. |
3
Performance and Portfolio Overview |
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Investment Results |
North Carolina Fund |
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Total Returns For Periods Ended March 31, 2008 |
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| | Six Months* | | | One Year | | | Five Years | | | Ten Years | | | Class C Since Inception 5/27/99 | |
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Class A |
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With Sales Charge | | (3.28 | )% | | (2.60 | )% | | 1.89 | % | | 3.46 | % | | n/a | |
Without Sales Charge | | 1.25 | | | 2.05 | | | 2.83 | | | 3.94 | | | n/a | |
Class C |
With 1% CDSC | | (0.06 | ) | | 0.36 | | | n/a | | | n/a | | | n/a | |
Without CDSC | | 0.94 | | | 1.35 | | | 2.05 | | | n/a | | | 3.12 | % |
Class D |
With 1% CDSC | | 0.07 | | | 0.36 | | | n/a | | | n/a | | | n/a | |
Without CDSC | | 1.07 | | | 1.35 | | | 2.05 | | | 3.16 | | | n/a | |
Benchmarks** |
Lehman Brothers Municipal Bond Index | | 0.75 | | | 1.90 | | | 3.92 | | | 4.99 | | | 4.98 | # |
Lipper North Carolina Municipal Debt Funds Average | | (1.38 | ) | | (1.22 | ) | | 2.75 | | | 3.81 | | | 3.77 | |
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Net Asset Value Per Share |
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| 3/31/08 | | 9/30/07 | | 3/31/07 | |
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Class A | $ | 7.65 | | $ | 7.68 | | $ | 7.75 | |
Class C | | 7.65 | | | 7.67 | | | 7.74 | |
Class D | | 7.65 | | | 7.66 | | | 7.74 | |
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Holdings By Market Sectorø |
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Pre-refunded/Escrowed-to-Maturity Bonds | 57% | |
Revenue Bonds | 37 | |
General Obligation Bonds | 6 | |
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Weighted Average Maturity3 | 9.3 years | |
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Dividend Per Share, and Yield Information For Periods Ended March 31, 2008 |
| Dividend† | | | | SEC 30-Day Yield†† | |
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Class A | $ | 0.127 | | | | | | 2.21 | % | |
Class C | | 0.092 | | | | | | 1.57 | | |
Class D | | 0.092 | | | | | | 1.57 | | |
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Holdings by Credit Quality2ø |
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AAA | 79% | |
AA | 11 | |
A | 10 | |
Option-Adjusted Duration3 | 6.4 years | |
Total Returns For Periods Ended March 31, 2008 |
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| | Six Months* | | | One Year | | | Five Years | | | Ten Years | | | Class C Since Inception 5/27/99 | |
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Class A |
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With Sales Charge | | (4.07 | )% | | (2.55 | )% | | 2.13 | % | | 3.52 | % | | n/a | |
Without Sales Charge | | 0.41 | | | 1.98 | | | 3.08 | | | 4.00 | | | n/a | |
Class C |
With 1%CDSC | | (0.89 | ) | | 0.27 | | | n/a | | | n/a | | | n/a | |
Without CDSC | | 0.09 | | | 1.24 | | | 2.30 | | | n/a | | | 3.14 | % |
Class D |
With 1% CDSC | | (0.89 | ) | | 0.27 | | | n/a | | | n/a | | | n/a | |
Without CDSC | | 0.09 | | | 1.24 | | | 2.30 | | | 3.20 | | | n/a | |
Benchmarks** |
Lehman Brothers Municipal Bond Index | | 0.75 | | | 1.90 | | | 3.92 | | | 4.99 | | | 4.98 | # |
Lipper New Jersey Municipal Debt Funds Average | | (1.55 | ) | | (1.49 | ) | | 3.57 | | | 4.07 | | | 3.85 | |
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Net Asset Value Per Share |
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| 3/31/08 | | 9/30/07 | | 3/31/07 | |
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Class A | $ | 7.14 | | $ | 7.28 | | $ | 7.31 | |
Class C | | 7.25 | | | 7.38 | | | 7.41 | |
Class D | | 7.25 | | | 7.38 | | | 7.41 | |
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Holdings by Market Sectorø |
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Revenue Bonds | 72% | |
Pre-refunded/Escrowed-to-Maturity Bonds | 28 | |
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Weighted Average Maturity3 | 13.9 years | |
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Option-Adjusted Duration3 | 7.3 years | |
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Dividend and Capital Gain Per Share, and Yield Information For Periods Ended March 31, 2008 |
| Dividend† | | Capital Gain† | | SEC 30-Day Yield†† | |
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Class A | $ | 0.136 | | $ | 0.035 | | | 2.84 | % | |
Class C | | 0.103 | | | 0.035 | | | 2.21 | | |
Class D | | 0.103 | | | 0.035 | | | 2.21 | | |
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Holdings by Credit Quality2ø |
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AAA | 66% | |
AA | 4 | |
A | 16 | |
BBB | 14 | |
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_________ |
See footnotes on page 5. |
4
Performance and Portfolio Overview |
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Investment Results |
Pennsylvania Fund |
Total Returns For Periods Ended March 31, 2008 |
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| Six Months* | One Year | Five Years | Ten Years | Class C Since Inception 5/27/99 |
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Class A | | | | | | | | | | |
With Sales Charge | (3.56 | )% | (2.95 | )% | 1.54 | % | 3.33 | % | n/a | |
Without Sales Charge | 0.94 | | 1.66 | | 2.47 | | 3.81 | | n/a | |
Class C | | | | | | | | | | |
With 1% CDSC | (0.50 | ) | (0.02 | ) | n/a | | n/a | | n/a | |
Without CDSC | 0.49 | | 0.96 | | 1.70 | | n/a | | 2.97 | % |
Class D | | | | | | | | | | |
With 1% CDSC | (0.50 | ) | (0.02 | ) | n/a | | n/a | | n/a | |
Without CDSC | 0.49 | | 0.96 | | 1.70 | | 3.02 | | n/a | |
Benchmarks** | | | | | | | | | | |
Lehman Brothers Municipal Bond Index | 0.75 | | 1.90 | | 3.92 | | 4.99 | | 4.98 | # |
Lipper Pennsylvania Municipal Debt Funds Average | (1.63 | ) | (1.44 | ) | 3.18 | | 3.90 | | 3.85 | |
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Net Asset Value Per Share |
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| 3/31/08 | | 9/30/07 | | 3/31/07 | |
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Class A | $ | 7.66 | | $ | 7.72 | | $ | 7.79 | |
Class C | | 7.64 | | | 7.70 | | | 7.76 | |
Class D | | 7.64 | | | 7.70 | | | 7.76 | |
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Holdings by Market Sectorø | | |
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Revenue Bonds | | 50% | |
Pre-refunded/Escrowed-to-Maturity Bonds | | 38 | |
General Obligation Bonds | | 12 | |
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Weighted Average Maturity3 | | 11.3 years | |
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Option-Adjusted Duration3 | | 6.0 years | |
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Dividend Per Share and Yield Information | | | | |
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For Periods Ended March 31, 2008 |
| Dividend† | | SEC 30-Day Yield†† | |
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Class A | | $0.133 | | | 2.21% | |
Class C | | 0.099 | | | 1.61 | |
Class D | | 0.099 | | | 1.61 | |
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Holdings by Credit Quality2ø |
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AAA | | 65 | % |
AA | | 16 | |
A | | 5 | |
BBB | | 9 | |
Non-rated | | 5 | |
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_____________ |
1 | | The website reference is an inactive textual reference and information contained in or otherwise accessible through the website does not form a part of this report or the Funds’ prospectus or the statements of additional information. |
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2 | | Credit ratings are primarily those issued by Moody’s Investors Service, Inc. (“Moody’s”). Where Moody’s ratings have not been assigned, ratings from Standard & Poor’s Ratings Services (“S&P”) were used. A generic rating designation has been utilized, and therefore, it cannot be inferred solely from the rating category whether ratings reflect those assigned by Moody’s or S&P. Pre-refunded and escrowed-to-maturity securities that have been rerated as AAA or its equivalent by either Moody’s or S&P have been included in the AAA category. Holdings and credit ratings are subject to change. |
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3 | | Excludes variable rate demand notes. Weighted average maturity is the number of years to stated maturity, weighted based upon current market value. Duration is the average amount of time that it takes to receive the interest and principal of a bond or portfolio of bonds. The duration formula is based on a formula that calculates the weighted average of the cash flows (interest and principal payments) of the bond, discounted to present time, taking into account call dates and related call premiums, if any. |
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* | | Returns for periods of less than one year are not annualized. |
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** | | The Lehman Brothers Municipal Bond Index (“Lehman Index”) and the Lipper Single-State Municipal Debt Funds Averages (“Lipper Averages”) are unmanaged benchmarks that assume reinvestment of all distributions and exclude the effect of fees, taxes, and sales charges. The Lehman Index also excludes the effect of expenses. The Lehman Index is an unmanaged index of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market and is composed of approximately 60% revenue bonds and 40% state government obligations. The Lipper Single-State Municipal Debt Funds Averages measure the performance of funds that limit their assets to those securities exempt from taxation in a specified state (double tax-exempt) or city (triple tax-exempt). Investors cannot invest directly in an index or average. |
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# | | From 5/28/99. |
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ø | | Percentages based on current market values of long-term holdings at March 31, 2008. |
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† | | Represents per share amount paid or declared for the six months ended March 31, 2008. |
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†† | | Current yield, representing the annualized yield for the 30-day period ended March 31, 2008, has been computed in accordance with SEC regulations and will vary. During the period, the Manager, at its discretion, waived a portion of its management fee for the California High-Yield and Florida Funds. Such waivers may be discontinued at any time. Without these waivers the yields would be as follows: |
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| Class A | | Class C | | Class D | |
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California High-Yield Fund | 3.32 | % | 2.58 | % | 2.58 | % |
Florida Fund | 2.73 | | 2.12 | | 2.12 | |
5
Understanding and Comparing Your Fund’s Expenses |
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As a shareholder of a Fund, you incur ongoing expenses, such as management fees, distribution and service (12b-1) fees, and other fund expenses. The information below is intended to help you understand your ongoing expenses (in dollars) of investing in a Fund and to compare them with the ongoing expenses of investing in other mutual funds. Please note that the expenses shown in the tables are meant to highlight your ongoing expenses only and do not reflect any transactional costs, such as sales charges (also known as loads) on certain purchases or redemptions. Therefore, the tables are useful in comparing ongoing expenses only, and will not help you to determine the relative total expenses of owning different funds. In addition, if transactional costs were included, your total expenses would have been higher. |
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The tables are based on an investment of $1,000 invested at the beginning of October 1, 2007 and held for the entire six-month period ended March 31, 2008. |
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Actual Expenses |
|
The following tables provide information about actual expenses and actual account values. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at the beginning of the period by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” for the share class of the Fund that you own to estimate the expenses that you paid on your account during the period. |
|
Hypothetical Example for Comparison Purposes |
|
The tables also provide information about hypothetical expenses and hypothetical account values based on the actual expense ratios of each Fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of any Fund. The hypothetical expenses and account values may not be used to estimate the ending account value or the actual expenses you paid for the period. You may use this information to compare the ongoing expenses of investing in a Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds. |
|
| | | | | Actual | | Hypothetical | |
---|
| Beginning Account Value 10/1/07 | | Annualized Expense Ratio* | | Ending Account Value 3/31/08 | | Expenses Paid During Period** 10/1/07 to 3/31/08 | | Ending Account Value 3/31/08 | | Expenses Paid During Period** 10/1/07 to 3/31/08 | |
---|
California High-Yield Fund | | | | | | | | | | | | | | | | | | |
Class A | $ | 1,000.00 | | | 0.91 | % | $ | 1,007.20 | | $ | 4.57 | | $ | 1,020.45 | | $ | 4.60 | |
Class C | | 1,000.00 | | | 1.81 | | | 1,002.70 | | | 9.06 | | | 1,015.95 | | | 9.12 | |
Class D | | 1,000.00 | | | 1.81 | | | 1,002.70 | | | 9.06 | | | 1,015.95 | | | 9.12 | |
California Quality Fund |
Class A | | 1,000.00 | | | 0.97 | | | 1,006.00 | | | 4.86 | | | 1,020.15 | | | 4.90 | |
Class C | | 1,000.00 | | | 1.87 | | | 1,003.10 | | | 9.36 | | | 1,015.65 | | | 9.42 | |
Class D | | 1,000.00 | | | 1.87 | | | 1,003.10 | | | 9.36 | | | 1,015.65 | | | 9.42 | |
Florida Fund |
Class A | | 1,000.00 | | | 1.05 | | | 1,007.30 | | | 5.27 | | | 1,019.75 | | | 5.30 | |
Class C | | 1,000.00 | | | 1.80 | | | 1,004.10 | | | 9.02 | | | 1,016.00 | | | 9.07 | |
Class D | | 1,000.00 | | | 1.80 | | | 1,004.10 | | | 9.02 | | | 1,016.00 | | | 9.07 | |
North Carolina Fund |
Class A | | 1,000.00 | | | 1.38 | | | 1,012.50 | | | 6.94 | | | 1,018.10 | | | 6.96 | |
Class C | | 1,000.00 | | | 2.13 | | | 1,009.40 | | | 10.70 | | | 1,014.35 | | | 10.73 | |
Class D | | 1,000.00 | | | 2.13 | | | 1,010.70 | | | 10.71 | | | 1,014.35 | | | 10.73 | |
New Jersey Fund |
Class A | | 1,000.00 | | | 1.23 | | | 1,004.10 | | | 6.16 | | | 1,018.85 | | | 6.21 | |
Class C | | 1,000.00 | | | 1.98 | | | 1,000.90 | | | 9.90 | | | 1,015.10 | | | 9.97 | |
Class D | | 1,000.00 | | | 1.98 | | | 1,000.90 | | | 9.90 | | | 1,015.10 | | | 9.97 | |
Pennsylvania Fund |
Class A | | 1,000.00 | | | 1.48 | | | 1,009.40 | | | 7.43 | | | 1,017.60 | | | 7.47 | |
Class C | | 1,000.00 | | | 2.24 | | | 1,004.90 | | | 11.23 | | | 1,013.80 | | | 11.28 | |
Class D | | 1,000.00 | | | 2.24 | | | 1,004.90 | | | 11.23 | | | 1,013.80 | | | 11.28 | |
| | | | | | |
|
____________ |
* | | Expenses of Class C and Class D shares differ from the expenses of Class A shares due to the difference in 12b-1 fees paid by each share class. See the Funds’ prospectus for a description of each share class and its fees, expenses and sales charges. J. & W. Seligman & Co. Incorporated, the Manager, at its discretion, waived 0.10% and 0.15% per annum of its fees for the California High-Yield Fund and Florida Fund, respectively. Absent such waivers, the expense ratios and expenses paid for the period would have been higher. |
| | |
** | | Expenses are equal to the Funds’ annualized expense ratios based on actual expenses for the period October 1, 2007 to March 31, 2008, multiplied by the average account value over the period, multiplied by 183/366 (number of days in the period). |
6
Portfolios of Investments (unaudited) |
March 31, 2008 |
|
California High-Yield Fund |
|
Face Amount | | Municipal Bonds | Rating† | | Value | |
---|
$ | 1,000,000 | | California Department of Veterans Affairs (Home Purchase Rev.), 5.50% due 12/1/2018* | Aa2 | | $ | 1,010,740 | |
| 2,000,000 | | California Educational Facilities Authority Rev. (Scripps College), 5% due 8/1/2031 | A1 | | | 1,962,060 | |
| 1,485,000 | | California Educational Facilities Authority Rev. (University of the Pacific), 5% due 11/1/2025 | A2 | | | 1,467,833 | |
| 750,000 | | California Health Facilities Financing Authority Rev. (Cedars-Sinai Medical Center), 5% due 11/15/2027 | A2 | | | 727,163 | |
| 3,000,000 | | California Health Facilities Financing Authority Rev. (Cedars-Sinai Medical Center), 6.25% due 12/1/2034Ø | NR | | | 3,234,090 | |
| 2,750,000 | | California Health Facilities Financing Authority Rev. (Kaiser Permanente), 5.40% due 5/1/2028†† | AAA‡ | | | 2,794,495 | |
| 2,280,000 | | California Housing Finance Agency (Multi-Family Housing Rev.), 5.375% due 2/1/2036* | Aa3 | | | 2,166,342 | |
| 595,000 | | California Housing Finance Agency (Single Family Mortgage), 5.40% due 8/1/2028* | Aa3 | | | 607,834 | |
| 2,500,000 | | California Infrastructure and Economic Development Bank Rev. (The J. David Gladstone Institutes Project), 5.25% due 10/1/2034 | A-‡ | | | 2,461,325 | |
| 2,500,000 | | California Statewide Communities Development Authority Rev. (Sutter Health), 5.625% due 8/15/2042 | Aa3 | | | 2,525,350 | |
| 1,500,000 | | Foothill/Eastern Transportation Corridor Agency, CA Toll Road Rev., 5.75% due 1/15/2040 | Baa3 | | | 1,452,885 | |
| 2,475,000 | | Modesto, CA Irrigation District Certificates of Participation, 5.30% due 7/1/2022 | A2 | | | 2,506,012 | |
| 3,000,000 | | Puerto Rico Highway & Transportation Authority Rev., 5.50% due 7/1/2036Ø | Aaa | | | 3,431,190 | |
| 3,000,000 | | San Bernardino, CA Joint Powers Financing Authority Rev. (California Dept. of Transportation Lease), 5.50% due 12/1/2020 | A2 | | | 3,002,760 | |
| 2,000,000 | | Washington Township, CA Hospital District Hospital Healthcare System Rev., 5.25% due 7/1/2029 | A3 | | | 1,967,140 | |
| Total Municipal Bonds (Cost $30,520,088) — 94.2% | | | | 31,317,219 | |
| | | Short-Term Holdings | | | | | |
| 400,000 | | Kansas State Development Finance Authority Rev. (Sisters of Charity), VRDN, due 12/1/2019 | VMIG 1 | | | 400,000 | |
| 200,000 | | Massachusetts State Health & Educational Facilities Authority Rev. (Harvard University), VRDN, due 11/1/2049 | VMIG 1 | | | 200,000 | |
| 800,000 | | New York City, NY GOs, VRDN, due 10/1/2023 | VMIG 1 | | | 800,000 | |
| Total Short-Term Holdings (Cost $1,400,000) — 4.2% | | | | 1,400,000 | |
| Total Investments (Cost $31,920,088) — 98.4% | | | | 32,717,219 | |
| Other Assets Less Liabilities — 1.6% | | | | 522,378 | |
| Net Assets — 100.0% | | | $ | 33,239,597 | |
| | | |
|
_____________ |
See footnotes on page 12. |
7
Portfolios of Investments (unaudited) |
March 31, 2008 |
Face Amount | | Municipal Bonds | Rating† | | Value | |
---|
$ | 3,000,000 | | California Educational Facilities Authority Rev. (Pepperdine University), 5% due 11/1/2029 | Aa3 | | $ | 2,995,950 | |
| 1,315,000 | | California Educational Facilities Authority Rev. (Scripps College), 5% due 11/1/2025 | Aaa | | | 1,346,126 | |
| 3,000,000 | | California Educational Facilities Authority Rev. (University of San Diego), 5% due 10/1/2028 | Aaa | | | 3,010,500 | |
| 1,000,000 | | California Infrastructure & Economic Development Bank Rev. (Bay Area Toll Bridge Seismic Retrofit), 5% due 7/1/2023†† | Aaa | | | 1,061,500 | |
| 235,000 | | California State GOs, 5.375% due 10/1/2027ø | AAA‡ | | | 252,162 | |
| 470,000 | | California State GOs, 5.375% due 10/1/2027ø | Aaa | | | 504,324 | |
| 3,295,000 | | California State GOs, 5.375% due 10/1/2027ø | Aaa | | | 3,505,056 | |
| 1,750,000 | | California State University System Rev., 5% due 11/1/2027 | Aaa | | | 1,779,313 | |
| 2,420,000 | | California State Veterans’ GOs, 5.70% due 12/1/2032* | A1 | | | 2,422,009 | |
| 2,000,000 | | California Statewide Communities Development Authority Rev. (Kaiser Permanente), 5.50% due 11/1/2032 | A3 | | | 2,009,540 | |
| 2,500,000 | | Eastern Municipal Water District, CA Water and Sewer Rev., 6.75% due 7/1/2012 | Aa3 | | | 2,729,425 | |
| 2,000,000 | | Los Angeles, CA Department of Water & Power Water System Rev., 5.125% due 7/1/2041 | Aa3 | | | 2,006,060 | |
| 1,500,000 | | Regents of the University of California General Rev., 5% due 5/15/2026 | Aa1 | | | 1,530,765 | |
| 2,000,000 | | Sacramento County, CA Sanitation Districts Financing Authority Rev. (Sacramento Regional County Sanitation District), 5% due 12/1/2027 | Aaa | | | 2,006,240 | |
| 500,000 | | Sacramento, CA Municipal Utility District Electric Rev., 5.25% due 5/15/2024 | A1 | | | 513,655 | |
| 1,530,000 | | San Francisco, CA Bay Area Rapid Transit District (Sales Tax Rev.), 5% due 7/1/2028 | Aaa | | | 1,531,820 | |
| Total Municipal Bonds (Cost $28,538,676) — 74.3% | | | | 29,204,445 | |
| | | Short-Term Holdings | | | | | |
| 915,000 | | Massachusetts State GOs, VRDN, due 3/1/2026 | VMIG 1 | | | 915,000 | |
| 700,000 | | Massachusetts State GOs, VRDN, due 3/1/2026 | VMIG 1 | | | 700,000 | |
| 300,000 | | Massachusetts State Health & Educational Facilities Authority Rev. (Wellesley College), VRDN, due 7/1/2039 | VMIG 1 | | | 300,000 | |
| 600,000 | | Missouri State Health & Educational Facilities Authority Rev. (Washington University), VRDN, due 2/15/2034 | VMIG 1 | | | 600,000 | |
| 500,000 | | Montgomery County, MD GOs, VRDN, due 6/1/2026 | VMIG 1 | | | 500,000 | |
| 3,000,000 | | Orange County, CA Local Transportation Authority (Measure M Sales Tax Rev.), 6% due 2/15/2009 | Aaa | | | 3,108,600 | |
| 600,000 | | Port Authority of New York & New Jersey Special Obligation Rev., VRDN, due 5/1/2019 | VMIG 1 | | | 600,000 | |
| 2,720,000 | | San Francisco, CA Bay Area Rapid Transit District (Sales Tax Rev.), 5% due 7/1/2028ø | Aaa | | | 2,769,368 | |
| Total Short-Term Holdings (Cost $9,259,051) — 24.1% | | | | 9,492,968 | |
| Total Investments (Cost $37,797,727) — 98.4% | | | | 38,697,413 | |
| Other Assets Less Liabilities — 1.6% | | | | 625,628 | |
| Net Assets — 100.0% | | | $ | 39,323,041 | |
| | | |
|
_____________ |
See footnotes on page 12. |
8
Portfolios of Investments (unaudited) |
March 31, 2008 |
| Face Amount | | Municipal Bonds | Rating† | | | Value | |
$ | 2,000,000 | | Broward County, FL Airport System Rev., 5.25% due 10/1/2026* | Aaa | | $ | 1,942,400 | |
| 1,750,000 | | Escambia County, FL Health Facilities Authority Rev. (Ascension Health Credit Group), 6% due 11/15/2031ø | AAA‡ | | | 1,875,195 | |
| 1,000,000 | | Florida Department of Transportation Turnpike Rev., 5% due 7/1/2025 | Aa2 | | | 1,017,590 | |
| 65,000 | | Florida Housing Finance Agency Rev. (General Mortgage), 6.35% due 6/1/2014 | AA‡ | | | 65,111 | |
| 320,000 | | Florida Housing Finance Corporation Rev. (Homeowner Mortgage), 5.95% due 1/1/2032* | Aaa | | | 321,683 | |
| 2,500,000 | | Florida Ports Financing Commission Rev. (State Transportation Trust Fund), 5.375% due 6/1/2027* | Aaa | | | 2,448,575 | |
| 2,000,000 | | Hillsborough County, FL School Board Certificates of Participation, 6% due 7/1/2025ø | Aaa | | | 2,115,140 | |
| 1,000,000 | | Marion County, FL Hospital District Health System Rev. (Munroe Regional Health System), 5% due 10/1/2029 | A2 | | | 938,600 | |
| 10,000 | | Marion County, FL Hospital District Health System Rev. (Munroe Regional Health System), 5.625% due 10/1/2024 | A2 | | | 10,491 | |
| 1,990,000 | | Marion County, FL Hospital District Health System Rev. (Munroe Regional Health System), 5.625% due 10/1/2024ø | A2 | | | 2,115,390 | |
| 1,000,000 | | Ocala, FL Utility Systems Rev., 5% due 10/1/2024ø | Aaa | | | 1,005,260 | |
| 1,750,000 | | Orange County, FL Health Facilities Authority Hospital Rev. (Adventist Health System/Sunbelt Obligation Group), 6.375% due 11/15/2020ø | A1 | | | 1,932,473 | |
| 2,000,000 | | Pinellas County, FL Health Facilities Authority Rev. (Baycare Health System), 5.50% due 11/15/2033ø | Aa3 | | | 2,237,500 | |
| 1,040,000 | | Polk County, FL Constitutional Fuel Tax Rev., 5% due 12/1/2020 | Aaa | | | 1,078,657 | |
| 230,000 | | Reedy Creek, FL Improvement District Utilities Rev., 5.125% due 10/1/2019 | Aaa | | | 231,336 | |
| 600,000 | | South Florida Water Management District Certificates of Participation Rev. (Master Lease Purchase Agreement), 5% due 10/1/2026 | Aaa | | | 604,128 | |
| 1,000,000 | | St. Johns County, FL Transport Improvement Rev., 5% due 10/1/2026 | Aaa | | | 1,007,580 | |
| 1,750,000 | | Tampa Bay, FL Regional Water Supply Utility System Authority Rev., 5.75% due 10/1/2029ø | AAA‡ | | | 1,927,118 | |
Total Municipal Bonds (Cost $22,242,045) — 95.7% | | | | 22,874,227 | |
| | | Short-Term Holdings | | | | | |
| 200,000 | | Lincoln County, WY Pollution Control Rev. (Exxon Project), VRDN, due 11/1/2014 | P-1 | | | 200,000 | |
| 210,000 | | Massachusetts State Development Finance Agency Rev. (Harvard University), VRDN, due 7/15/2036 | VMIG 1 | | | 210,000 | |
Total Short-Term Holdings (Cost $410,000) — 1.7% | | | | 410,000 | |
Total Investments (Cost $22,652,045) — 97.4% | | | | 23,284,227 | |
Other Assets Less Liabilities — 2.6% | | | | 614,039 | |
Net Assets — 100.0% | | | $ | 23,898,266 | |
|
__________ |
See footnotes on page 12. |
9
Portfolios of Investments (unaudited) |
March 31, 2008 |
| Face Amount | | Municipal Bonds | Rating† | | | Value | |
$ | 1,250,000 | | Appalachian State University, NC Housing & Student Center System Rev., 5.60% due 7/15/2020ø | Aaa | | $ | $ 1,352,375 | |
| 685,000 | | Buncombe County, NC Metropolitan Sewer District Sewer System Rev., 5% due 7/1/2020 | Aaa | | | 707,598 | |
| 1,000,000 | | Charlotte, NC Storm Water Fee Rev., 6% due 6/1/2025ø | AAA‡ | | | 1,087,020 | |
| 1,250,000 | | Charlotte, NC Water & Sewer System Rev., 5.25% due 6/1/2025ø | AAA‡ | | | 1,339,088 | |
| 750,000 | | Durham County, NC Public Improvement GOs, 5% due 6/1/2022 | Aaa | | | 787,898 | |
| 750,000 | | Forsyth County, NC Certificates of Participation (Forsyth County School Project), 5% due 2/1/2026 | Aa1 | | | 752,100 | |
| 215,000 | | Greensboro, NC Combined Enterprise System Rev., 5.25% due 6/1/2022ø | AAA‡ | | | 238,583 | |
| 250,000 | | High Point, NC Combined Enterprise System Rev., 5% due 11/1/2023 | A1 | | | 252,083 | |
| 135,000 | | North Carolina Housing Finance Agency Rev. (Home Ownership), 6.40% due 7/1/2028* | Aa2 | | | 140,748 | |
| 500,000 | | North Carolina Infrastructure Finance Corporation Certificates of Participation (State of North Carolina Repair and Renovation Projects), 5% due 6/1/2017 | Aaa | | | 540,630 | |
| 500,000 | | North Carolina Medical Care Commission Hospital Rev. (First Health of the Carolinas Project), 5% due 10/1/2028 | Aa3 | | | 486,870 | |
| 1,750,000 | | North Carolina Municipal Power Agency No. 1 Rev. (Catawba Electric), 5% due 1/1/2020†† | Aaa | | | 1,843,922 | |
| 1,000,000 | | Raleigh, NC Combined Enterprise System Rev., 5% due 3/1/2024ø | AAA‡ | | | 1,101,570 | |
| 1,000,000 | | Wake County, NC Industrial Facilities & Pollution Control Financing Authority Rev. (Carolina Power & Light), 5.375% due 2/1/2017 | A2 | | | 1,038,500 | |
| 750,000 | | Wilmington City, NC Water & Sewer System Rev., 5% due 6/1/2025 | Aaa | | | 765,795 | |
| 250,000 | | Winston-Salem, NC Water & Sewer System Rev., 5.125% due 6/1/2028ø | AAA‡ | | | 271,420 | |
Total Municipal Bonds (Cost $12,014,685) — 94.1% | | | | 12,706,200 | |
| | | Short-Term Holding | | | | | |
| 500,000 | | Massachusetts State Health & Educational Facilities Authority Rev. (Harvard University), VRDN, due 11/1/2049 | VMIG 1 | | | 500,000 | |
Total Short-Term Holding (Cost $500,000) — 3.7% | | | | 500,000 | |
Total Investments (Cost $12,514,685) — 97.8% | | | | 13,206,200 | |
Other Assets Less Liabilities — 2.2% | | | | 297,448 | |
Net Assets — 100.0% | | | $ | 13,503,648 | |
|
__________ |
See footnotes on page 12. |
10
Portfolios of Investments (unaudited) |
March 31, 2008 |
| Face Amount | | Municipal Bonds | Rating† | | | Value | |
$ | 790,000 | | Bergen County, NJ Improvement Authority Governmental Loan Rev., 5% due 9/1/2014 | Aaa | | $ | 872,839 | |
| 2,000,000 | | Delaware River & Bay Authority Rev. (New Jersey and Delaware), 5.75% due 1/1/2029ø | Aaa | | | 2,137,540 | |
| 1,000,000 | | New Jersey Economic Development Authority Rev. (The Seeing Eye, Inc. Project), 5% due 12/1/2024 | Aaa | | | 1,018,620 | |
| 1,500,000 | | New Jersey Economic Development Authority State Lease Rev. (Liberty State Park Project), 5% due 3/1/2027 | Aaa | | | 1,523,595 | |
| 3,000,000 | | New Jersey Economic Development Authority Water Facilities Rev. (New Jersey American Water Co., Inc.), 5.375% due 5/1/2032* | Baa3 | | | 2,880,570 | |
| 1,250,000 | | New Jersey Educational Facilities Authority Rev. (Princeton University), 5% due 7/1/2028 | Aaa | | | 1,286,287 | |
| 1,250,000 | | New Jersey Educational Facilities Authority Rev. (Stevens Institute of Technology), 5.25% due 7/1/2022 | Baa2 | | | 1,230,200 | |
| 1,480,000 | | New Jersey Environmental Infrastructure Trust, 5% due 9/1/2022 | Aaa | | | 1,554,592 | |
| 890,000 | | New Jersey Health Care Facilities Financing Authority Rev. (Atlantic City Medical Center), 5.75% due 7/1/2025ø | A+‡ | | | 988,808 | |
| 1,110,000 | | New Jersey Health Care Facilities Financing Authority Rev. (Atlantic City Medical Center), 5.75% due 7/1/2025 | A2 | | | 1,132,910 | |
| 2,450,000 | | New Jersey Health Care Facilities Financing Authority Rev. (Hackensack University Medical Center), 6% due 1/1/2034 | A3 | | | 2,481,238 | |
| 2,255,000 | | New Jersey Health Care Facilities Financing Authority Rev. (Meridian Health System Obligated Group), 5.375% due 7/1/2024 | Aaa | | | 2,316,810 | |
| 2,500,000 | | New Jersey Highway Authority Rev. (Garden State Parkway), 5.625% due 1/1/2030ø | AAA‡ | | | 2,668,825 | |
| 215,000 | | New Jersey Housing & Mortgage Finance Agency Rev. (Multi-Family Housing), 5.75% due 5/1/2025 | Aaa | | | 218,305 | |
| 1,500,000 | | New Jersey Housing & Mortgage Finance Agency Rev. (Multi-Family Housing), 6.35% due 11/1/2031* | Aaa | | | 1,519,650 | |
| 1,000,000 | | New Jersey Transportation Trust Fund Authority, 5% due 12/15/2021ø | Aaa | | | 1,084,220 | |
| 1,000,000 | | Port Authority of New York and New Jersey Consolidated Bonds, 5% due 10/1/2028 | Aa3 | | | 1,008,270 | |
| 500,000 | | Port Authority of New York and New Jersey Consolidated Bonds, 5% due 8/15/2022 | Aaa | | | 524,770 | |
| 1,000,000 | | Puerto Rico Electric Power Authority Rev., 5% due 7/1/2023 | Aaa | | | 1,022,980 | |
| 1,000,000 | | Puerto Rico Highway & Transportation Authority Rev., 5.50% due 7/1/2036ø | Aaa | | | 1,143,730 | |
Total Municipal Bonds (Cost $27,752,914) — 88.4% | | | | 28,614,759 | |
| | | Short-Term Holdings | | | | | |
| 650,000 | | Massachusetts State Health & Educational Facilities Authority Rev. (Harvard University), VRDN, due 11/1/2049 | VMIG 1 | | | 650,000 | |
| 2,000,000 | | New Jersey Educational Facilities Financing Authority Rev. (Institute for Advanced Study) , 5% due 7/1/2021ø | Aaa | | | 2,016,320 | |
Total Short-Term Holdings (Cost $2,602,687) — 8.3% | | | | 2,666,320 | |
Total Investments (Cost $30,355,601) — 96.7% | | | | 31,281,079 | |
Other Assets Less Liabilities — 3.3% | | | | 1,075,577 | |
Net Assets — 100.0% | | | $ | 32,356,656 | |
|
__________ |
See footnotes on page 12. |
11
Portfolios of Investments (unaudited) |
March 31, 2008 |
| Face Amount | | Municipal Bonds | Rating† | | | Value | |
$ | 1,000,000 | | Berks County, PA Municipal Authority Hospital Rev. (The Reading Hospital and Medical Center Project), 5.70% due 10/1/2014 | Aaa | | $ | 1,078,300 | |
| 1,000,000 | | Berks County, PA Municipal Authority Hospital Rev. (The Reading Hospital and Medical Center Project), 6% due 11/1/2029ø | Aaa | | | 1,081,430 | |
| 1,100,000 | | Butler County, PA GO’s 5.25% due 7/15/2023ø | Baa3 | | | 1,221,814 | |
| 530,000 | | Commonwealth of Pennsylvania GOs, 5.375% due 7/1/2017 | Aa2 | | | 598,306 | |
| 1,000,000 | | Delaware Valley, PA Regional Finance Authority Rev. (Local Government), 7.75% due 7/1/2027 | Aaa | | | 1,310,640 | |
| 1,000,000 | | Northampton County, PA General Purpose Authority Rev., 5.25% due 10/1/2030 | Aaa | | | 1,009,160 | |
| 1,000,000 | | Pennsylvania Economic Development Financing Authority Rev. (The Procter & Gamble Paper Products Company Project), 5.375% due 3/1/2031* | Aa3 | | | 1,016,500 | |
| 1,050,000 | | Pennsylvania Higher Educational Facilities Authority Rev. (Drexel University), 5.75% due 5/1/2022 | Aaa | | | 1,069,478 | |
| 750,000 | | Pennsylvania Intergovernmental Cooperative Authority Special Tax Rev. (Philadelphia Funding Program), 5% due 6/15/2021 | A1 | | | 753,862 | |
| 1,000,000 | | Pennsylvania State Turnpike Commission Rev. (Oil Franchise Tax), 5.25% due 12/1/2016ø | Aaa | | | 1,117,620 | |
| 1,000,000 | | Pennsylvania State Turnpike Commission Rev. (Registration Fee), 5% due 7/15/2041ø | Aaa | | | 1,081,590 | |
| 500,000 | | Pennsylvania State University Rev., 5% due 9/1/2024 | Aa2 | | | 511,165 | |
| 1,000,000 | | Philadelphia, PA Parking Authority Airport Parking Rev., 5.50% due 9/1/2018 | Aaa | | | 1,011,430 | |
| 450,000 | | Philadelphia, PA Redevelopment Authority (Home Mortgage Rev.), 9% due 6/1/2017†† | NR | | | 621,878 | |
Total Municipal Bonds (Cost $12,687,866) — 91.7% | | | | 13,483,173 | |
| | | Short-Term Holdings | | | | | |
| 210,000 | | Lincoln County, WY Pollution Control Rev. (Exxon Project), VRDN, due 11/1/2014 | P-1 | | | 210,000 | |
| 200,000 | | Massachusetts State Development Finance Agency Rev. (Harvard University), VRDN, due 7/15/2036 | VMIG 1 | | | 200,000 | |
Total Short-Term Holdings (Cost $410,000) — 2.8% | | | | 410,000 | |
Total Investments (Cost $13,097,866) — 94.5% | | | | 13,893,173 | |
Other Assets Less Liabilities — 5.5% | | | | 815,096 | |
Net Assets — 100.0% | | | $ | 14,708,269 | |
____________ |
† | | Credit ratings are primarily those issued by Moody’s Investors Service, Inc. (“Moody’s”). Where Moody’s ratings have not been assigned, ratings from Standard & Poor’s Ratings Services (“S&P”) were used (indicated by the symbol ‡). Pre-refunded and escrowed-to-maturity securities that have been rerated as AAA by S&P but have not been rerated by Moody’s have been reported as AAA. |
| | |
†† | | Escrowed-to-maturity security. |
| | |
ø | | Pre-refunded security. Such securities that will be paid off within one year are classified as short-term holdings. |
| | |
* | | Interest income earned from this security is subject to the federal alternative minimum tax. |
| | |
VRDN — Variable Rate Demand Notes (See Note 1d). |
|
See Notes to Financial Statements. |
12
Statements of Assets and Liabilities (unaudited) |
March 31, 2008 |
|
| California High-Yield Fund | | California Quality Fund | | Florida Fund | | North Carolina Fund | | New Jersey Fund | | Pennsylvania Fund | |
Assets: | | | | | | | | | | | | | | | | | | |
Investments, at value (see portfolios of investments): | | | | | | | | | | | | | | | | | | |
Long-term holdings | $ | 31,317,219 | | $ | 29,204,445 | | $ | 22,874,227 | | $ | 12,706,200 | | $ | 28,614,759 | | $ | 13,483,173 | |
Short-term holdings | | 1,400,000 | | | 9,492,968 | | | 410,000 | | | 500,000 | | | 2,666,320 | | | 410,000 | |
Total investments* | | 32,717,219 | | | 38,697,413 | | | 23,284,227 | | | 13,206,200 | | | 31,281,079 | | | 13,893,173 | |
Cash** | | 55,442 | | | 92,185 | | | 194,795 | | | 162,635 | | | 741,773 | | | 208,928 | |
Interest receivable | | 489,516 | | | 618,326 | | | 485,431 | | | 168,200 | | | 454,184 | | | 207,775 | |
Receivable for Shares of Beneficial Interest/Capital Stock sold | | 74,998 | | | 24,069 | | | — | | | — | | | — | | | — | |
Expenses prepaid to shareholder service agent | | 1,775 | | | 1,839 | | | 1,204 | | | 634 | | | 1,585 | | | 761 | |
Receivable for securities sold | | — | | | — | | | — | | | — | | | — | | | 1,041,989 | |
Other | | 3,974 | | | 4,795 | | | 3,546 | | | 7,238 | | | 15,106 | | | 10,777 | |
Total Assets | | 33,342,924 | | | 39,438,627 | | | 23,969,203 | | | 13,544,907 | | | 32,493,727 | | | 15,363,403 | |
|
Liabilities: | | | | | | | | | | | | | | | | | | |
Dividends payable | | 51,038 | | | 55,090 | | | 33,750 | | | 16,367 | | | 44,060 | | | 18,071 | |
Management fee payable | | 11,241 | | | 16,635 | | | 7,202 | | | 5,613 | | | 13,672 | | | 6,229 | |
Payable for Shares of Beneficial Interest/Capital Stock | | | | | | | | | | | | | | | | | | |
repurchased | | 9,863 | | | 12,251 | | | — | | | 50 | | | 45,979 | | | 1,005 | |
Distribution and service (12b-1) fees payable | | 6,451 | | | 4,901 | | | 6,598 | | | 3,182 | | | 7,948 | | | 3,508 | |
Payable for securities purchased | | — | | | — | | | — | | | — | | | — | | | 603,944 | |
Accrued expenses and other | | 24,734 | | | 26,709 | | | 23,387 | | | 16,047 | | | 25,412 | | | 22,377 | |
Total Liabilities | | 103,327 | | | 115,586 | | | 70,937 | | | 41,259 | | | 137,071 | | | 655,134 | |
Net Assets | $ | 33,239,597 | | $ | 39,323,041 | | $ | 23,898,266 | | $ | 13,503,648 | | $ | 32,356,656 | | $ | 14,708,269 | |
|
Composition of Net Assets: | | | | | | | | | | | | | | | | | | |
Shares of Beneficial Interest/Capital Stock, at $0.001 par value: | | | | | | | | | | | | | | | | | | |
Class A | $ | 4,337 | | $ | 5,714 | | $ | 2,800 | | $ | 1,643 | | $ | 4,084 | | $ | 1,790 | |
Class C | | 404 | | | 115 | | | 267 | | | 59 | | | 312 | | | 75 | |
Class D | | 410 | | | 286 | | | 129 | | | 62 | | | 128 | | | 55 | |
Additional paid-in capital | | 32,349,004 | | | 38,316,424 | | | 23,263,242 | | | 12,760,330 | | | 31,321,449 | | | 13,754,418 | |
Undistributed net investment income | | 112,898 | | | 212,874 | | | 73,330 | | | 57,826 | | | 85,895 | | | 95,049 | |
Undistributed/accumulated net realized gain (loss) | | (24,587 | ) | | (112,058 | ) | | (73,684 | ) | | (7,787 | ) | | 19,310 | | | 61,575 | |
Net unrealized appreciation of investments | | 797,131 | | | 899,686 | | | 632,182 | | | 691,515 | | | 925,478 | | | 795,307 | |
Net Assets | $ | 33,239,597 | | $ | 39,323,041 | | $ | 23,898,266 | | $ | 13,503,648 | | $ | 32,356,656 | | $ | 14,708,269 | |
|
Net Assets: |
Class A | $ | 27,980,612 | | $ | 36,751,085 | | $ | 20,930,096 | | $ | 12,577,861 | | $ | 29,167,707 | | $ | 13,712,417 | |
Class C | $ | 2,611,424 | | $ | 736,733 | | $ | 1,999,018 | | $ | 448,327 | | $ | 2,260,542 | | $ | 574,338 | |
Class D | $ | 2,647,561 | | $ | 1,835,223 | | $ | 969,152 | | $ | 477,460 | | $ | 928,407 | | $ | 421,514 | |
Shares of Beneficial Interest/ | | | | | | | | | | | | | | | | | | |
Capital Stock Outstanding: |
Class A | | 4,336,934 | | | 5,713,521 | | | 2,799,796 | | | 1,643,322 | | | 4,084,010 | | | 1,790,376 | |
Class C | | 404,343 | | | 115,002 | | | 266,595 | | | 58,583 | | | 311,646 | | | 75,189 | |
Class D | | 409,862 | | | 286,473 | | | 129,252 | | | 62,440 | | | 127,979 | | | 55,147 | |
|
Net Asset Value per Share: |
Class A | $ | 6.45 | | $ | 6.43 | | $ | 7.48 | | $ | 7.65 | | $ | 7.14 | | $ | 7.66 | |
Class C | $ | 6.46 | | $ | 6.41 | | $ | 7.50 | | $ | 7.65 | | $ | 7.25 | | $ | 7.64 | |
Class D | $ | 6.46 | | $ | 6.41 | | $ | 7.50 | | $ | 7.65 | | $ | 7.25 | | $ | 7.64 | |
|
___________ | | | | | | | | | | | | | | | | | | |
* Cost of total investments | $ | 31,920,088 | | $ | 37,797,727 | | $ | 22,652,045 | | $ | 12,514,685 | | $ | 30,355,601 | | $ | 13,097,866 | |
** Includes restricted cash of | $ | 5,300 | | $ | 6,300 | | $ | 2,000 | | | — | | $ | 5,000 | | $ | 4,000 | |
See Notes to Financial Statements. | | | | | | | | | | | | | | | | | | |
13
Statements of Operations (unaudited) |
For the Six Months Ended March 31, 2008 |
|
| California High-Yield Fund | | California Quality Fund | | Florida Fund | | North Carolina Fund | | New Jersey Fund | | Pennsylvania Fund | |
Investment Income: | | | | | | | | | | | | | | | | | | |
Interest | $ | 867,072 | | $ | 965,258 | | $ | 623,698 | | $ | 320,502 | | $ | 827,460 | | $ | 377,319 | |
Expenses: |
Management fees | | 84,010 | | | 98,192 | | | 62,293 | | | 33,646 | | | 83,139 | | | 38,182 | |
Distribution and service (12b-1) fees | | 40,486 | | | 30,134 | | | 42,246 | | | 20,399 | | | 53,575 | | | 24,053 | |
Shareholder account services | | 27,440 | | | 30,547 | | | 20,179 | | | 11,447 | | | 29,100 | | | 13,587 | |
Auditing fees | | 14,834 | | | 16,406 | | | 12,409 | | | 9,329 | | | 14,395 | | | 13,754 | |
Registration | | 8,635 | | | 8,322 | | | 7,672 | | | 6,626 | | | 9,527 | | | 8,402 | |
Legal fees | | 6,159 | | | 7,148 | | | 6,516 | | | 7,877 | | | 12,927 | | | 11,685 | |
Custody and related services | | 3,028 | | | 1,446 | | | 2,541 | | | 760 | | | 3,723 | | | 796 | |
Directors’/Trustees’ fees and expenses | | 2,971 | | | 3,084 | | | 2,795 | | | 2,563 | | | 2,965 | | | 2,600 | |
Shareholder reports and communications | | 2,632 | | | 3,078 | | | 2,288 | | | 2,004 | | | 3,517 | | | 3,978 | |
Miscellaneous | | 2,460 | | | 2,724 | | | 2,159 | | | 1,757 | | | 2,951 | | | 2,085 | |
Total Expenses Before Management Fee Waiver | | 192,655 | | | 201,081 | | | 161,098 | | | 96,408 | | | 215,819 | | | 119,122 | |
Management fee waiver (Note 3) | | (16,803 | ) | | — | | | (18,687 | ) | | — | | | — | | | — | |
Total Expenses After Management Fee Waiver | | 175,852 | | | 201,081 | | | 142,411 | | | 96,408 | | | 215,819 | | | 119,122 | |
Net Investment Income | | 691,220 | | | 764,177 | | | 481,287 | | | 224,094 | | | 611,641 | | | 258,197 | |
|
Net Realized and Unrealized Gain (Loss) on Investments: |
Net realized gain (loss) on investments | | (21,722 | ) | | 39,352 | | | (26,857 | ) | | — | | | 19,332 | | | 62,648 | |
Net change in unrealized appreciation of investments | | (433,607 | ) | | (558,718 | ) | | (279,614 | ) | | (40,879 | ) | | (465,318 | ) | | (181,952 | ) |
Net Loss on Investments | | (455,329 | ) | | (519,366 | ) | | (306,471 | ) | | (40,879 | ) | | (445,986 | ) | | (119,304 | ) |
Increase in Net Assets from Operations | $ | 235,891 | | $ | 244,811 | | $ | 174,816 | | $ | 183,215 | | $ | 165,655 | | $ | 138,893 | |
|
__________ |
See Notes to Financial Statements. |
14
Statements of Changes in Net Assets (unaudited) |
|
| California High-Yield Fund | | California Quality Fund | |
| Six Months Ended March 31, 2008 | | Year Ended September 30, 2007 | | Six Months Ended March 31, 2008 | | Year Ended September 30, 2007 | |
Operations: |
Net investment income | $ | 691,220 | | $ | 1,437,824 | | $ | 764,177 | | $ | 1,765,529 | |
Net realized gain (loss) on investments | | (21,722 | ) | | 67,521 | | | 39,352 | | | 285,451 | |
Net change in unrealized appreciation of investments | | (433,607 | ) | | (436,813 | ) | | (558,718 | ) | | (992,937 | ) |
Increase in Net Assets from Operations | | 235,891 | | | 1,068,532 | | | 244,811 | | | 1,058,043 | |
|
Distributions to Shareholders: |
Net investment income: |
Class A | | (581,815 | ) | | (1,195,595 | ) | | (720,679 | ) | | (1,646,981 | ) |
Class C | | (38,704 | ) | | (81,924 | ) | | (21,018 | ) | | (55,345 | ) |
Class D | | (44,643 | ) | | (90,377 | ) | | (13,621 | ) | | (30,086 | ) |
Total | | (665,162 | ) | | (1,367,896 | ) | | (755,318 | ) | | (1,732,412 | ) |
Net realized long-term gain on investments: |
Class A | | (61,428 | ) | | — | | | (296,071 | ) | | (81,972 | ) |
Class C | | (4,879 | ) | | — | | | (12,742 | ) | | (3,623 | ) |
Class D | | (5,958 | ) | | — | | | (6,610 | ) | | (2,002 | ) |
Total | | (72,265 | ) | | — | | | (315,423 | ) | | (87,597 | ) |
Decrease in Net Assets from Distributions | | (737,427 | ) | | (1,367,896 | ) | | (1,070,741 | ) | | (1,820,009 | ) |
|
Share Transactions: |
Net proceeds from sales of shares | | 1,557,115 | | | 648,122 | | | 2,466,845 | | | 492,091 | |
Investment of dividends | | 417,313 | | | 840,334 | | | 455,711 | | | 1,027,593 | |
Exchanged from associated funds | | 560,622 | | | 153,320 | | | 637,252 | | | 640,630 | |
Investment of gain distributions | | 51,400 | | | — | | | 228,536 | | | 61,687 | |
Total | | 2,586,450 | | | 1,641,776 | | | 3,788,344 | | | 2,222,001 | |
Cost of shares repurchased | | (2,353,520 | ) | | (3,264,320 | ) | | (3,618,479 | ) | | (6,514,802 | ) |
Exchanged into associated funds | | (190,789 | ) | | (163,874 | ) | | (4,255 | ) | | (414,780 | ) |
Total | | (2,544,309 | ) | | (3,428,194 | ) | | (3,622,734 | ) | | (6,929,582 | ) |
Increase (Decrease) in Net Assets from Share Transactions | | 42,141 | | | (1,786,418 | ) | | 165,610 | | | (4,707,581 | ) |
Decrease in Net Assets | | (459,395 | ) | | (2,085,782 | ) | | (660,320 | ) | | (5,469,547 | ) |
Net Assets: |
Beginning of period | | 33,698,992 | | | 35,784,774 | | | 39,983,361 | | | 45,452,908 | |
End of Period* | $ | 33,239,597 | | $ | 33,698,992 | | $ | 39,323,041 | | $ | 39,983,361 | |
|
_____________ | | | | | |
* Including undistrbuted net investment income | $ | 112,898 | | $ | 86,840 | | $ | 212,874 | | $ | 204,015 | |
|
See Notes to Financial Statements. |
15
Statements of Changes in Net Assets (unaudited) |
|
| Florida Fund | | North Carolina Fund | |
| Six Months Ended March 31, 2008 | | Year Ended September 30, 2007 | | Six Months Ended March 31, 2008 | | Year Ended September 30, 2007 | |
Operations: |
Net investment income | $ | 481,287 | | $ | 1,147,515 | | $ | 224,094 | | $ | 551,387 | |
Net realized gain (loss) on investments | | (26,857 | ) | | 194,266 | | | — | | | (21,778 | ) |
Net change in unrealized appreciation of investments | | (279,614 | ) | | (596,682 | ) | | (40,879 | ) | | (273,495 | ) |
Increase in Net Assets from Operations | | 174,816 | | | 745,099 | | | 183,215 | | | 256,114 | |
|
Distributions to Shareholders: |
Net investment income: |
Class A | | (418,530 | ) | | (995,082 | ) | | (205,766 | ) | | (488,700 | ) |
Class C | | (29,818 | ) | | (88,869 | ) | | (5,413 | ) | | (27,226 | ) |
Class D | | (14,559 | ) | | (39,465 | ) | | (5,802 | ) | | (12,527 | ) |
Total | | (462,907 | ) | | (1,123,416 | ) | | (216,981 | ) | | (528,453 | ) |
Net realized long-term gain on investments: |
Class A | | (260,619 | ) | | (32,733 | ) | | — | | | (142,487 | ) |
Class C | | (24,633 | ) | | (3,907 | ) | | — | | | (10,580 | ) |
Class D | | (12,001 | ) | | (1,626 | ) | | — | | | (4,650 | ) |
Total | | (297,253 | ) | | (38,266 | ) | | — | | | (157,717 | ) |
Decrease in Net Assets from Distributions | | (760,160 | ) | | (1,161,682 | ) | | (216,981 | ) | | (686,170 | ) |
|
Share Transactions: |
Net proceeds from sales of shares | | 184,134 | | | 485,516 | | | 535,312 | | | 23,134 | |
Investment of dividends | | 281,330 | | | 665,122 | | | 133,182 | | | 335,669 | |
Exchanged from associated funds | | 56,353 | | | 14,064 | | | 45,023 | | | 67,237 | |
Investment of gain distributions | | 211,383 | | | 26,605 | | | — | | | 118,956 | |
Total | | 733,200 | | | 1,191,307 | | | 713,517 | | | 544,996 | |
Cost of shares repurchased | | (1,524,551 | ) | | (5,257,705 | ) | | (933,292 | ) | | (3,439,972 | ) |
Exchanged into associated funds | | (184,046 | ) | | (143,295 | ) | | — | | | (47,989 | ) |
Total | | (1,708,597 | ) | | (5,401,000 | ) | | (933,292 | ) | | (3,487,961 | ) |
Decrease in Net Assets from Share Transactions | | (975,397 | ) | | (4,209,693 | ) | | (219,775 | ) | | (2,942,965 | ) |
Decrease in Net Assets | | (1,560,741 | ) | | (4,626,276 | ) | | (253,541 | ) | | (3,373,021 | ) |
|
Net Assets: |
Beginning of period | | 25,459,007 | | | 30,085,283 | | | 13,757,189 | | | 17,130,210 | |
End of Period* | $ | 23,898,266 | | $ | 25,459,007 | | $ | 13,503,648 | | $ | 13,757,189 | |
|
___________ | | | | | | | | | | | | |
* Including undistributed net investment income | $ | 73,330 | | $ | 54,950 | | $ | 57,826 | | $ | 50,713 | |
|
See Notes to Financial Statements. |
16
Statements of Changes in Net Assets (unaudited) |
|
| New Jersey Fund | | Pennsylvania Fund | |
| Six Months Ended March 31, 2008 | | Year Ended September 30, 2007 | | Six Months Ended March 31, 2008 | | Year Ended September 30, 2007 | |
Operations: |
Net investment income | $ | 611,641 | | $ | 1,378,404 | | $ | 258,197 | | $ | 567,772 | |
Net realized gain (loss) on investments | | 19,332 | | | 152,732 | | | 62,648 | | | (23,382 | ) |
Net change in unrealized appreciation of investments | | (465,318 | ) | | (510,530 | ) | | (181,952 | ) | | (275,048 | ) |
Increase in Net Assets from Operations | | 165,655 | | | 1,020,606 | | | 138,893 | | | 269,342 | |
|
Distributions to Shareholders: |
Net investment income: |
Class A | | (561,626 | ) | | (1,251,627 | ) | | (245,753 | ) | | (496,120 | ) |
Class C | | (32,116 | ) | | (84,129 | ) | | (7,319 | ) | | (15,022 | ) |
Class D | | (13,816 | ) | | (26,125 | ) | | (5,478 | ) | | (11,213 | ) |
Total | | (607,558 | ) | | (1,361,881 | ) | | (258,550 | ) | | (522,355 | ) |
Net realized long-term gain on investments: |
Class A | | (145,171 | ) | | (87,975 | ) | | — | | | — | |
Class C | | (11,446 | ) | | (8,786 | ) | | — | | | — | |
Class D | | (4,675 | ) | | (2,220 | ) | | — | | | — | |
Total | | (161,292 | ) | | (98,981 | ) | | — | | | — | |
Decrease in Net Assets from Distributions | | (768,850 | ) | | (1,460,862 | ) | | (258,550 | ) | | (522,355 | ) |
|
Share Transactions: |
Net proceeds from sales of shares | | 842,037 | | | 1,626,910 | | | 34,517 | | | 204,074 | |
Investment of dividends | | 433,793 | | | 958,961 | | | 172,294 | | | 354,192 | |
Exchanged from associated funds | | 75,296 | | | 510,335 | | | 36,086 | | | — | |
Investment of gain distributions | | 127,191 | | | 77,261 | | | — | | | — | |
Total | | 1,478,317 | | | 3,173,467 | | | 242,897 | | | 558,266 | |
Cost of shares repurchased | | (2,084,928 | ) | | (4,292,048 | ) | | (794,526 | ) | | (2,843,225 | ) |
Exchanged into associated funds | | (322,585 | ) | | (1,154,399 | ) | | (34,934 | ) | | (199,728 | ) |
Total | | (2,407,513 | ) | | (5,446,447 | ) | | (829,460 | ) | | (3,042,953 | ) |
Decrease in Net Assets from Share Transactions | | (929,196 | ) | | (2,272,980 | ) | | (586,563 | ) | | (2,484,687 | ) |
Decrease in Net Assets | | (1,532,391 | ) | | (2,713,236 | ) | | (706,220 | ) | | (2,737,700 | ) |
|
Net Assets: |
Beginning of period | | 33,889,047 | | | 36,602,283 | | | 15,414,489 | | | 18,152,189 | |
End of Period* | $ | 32,356,656 | | $ | 33,889,047 | | $ | 14,708,269 | | $ | 15,414,489 | |
|
____________ | | | | | | | | | | | | |
* Including undistrbuted net investment income | $ | 85,895 | | $ | 81,812 | | $ | 95,049 | | $ | 95,402 | |
|
See Notes to Financial Statements. |
17
Notes to Financial Statements (unaudited) |
| |
1. | Organization and Multiple Classes of Shares — Seligman Municipal Series Trust (the “Trust”), Seligman New Jersey Municipal Fund, Inc. (the “New Jersey Fund”) and Seligman Pennsylvania Municipal Fund Series (the “Pennsylvania Fund”) are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”), as non-diversified open-end management investment companies. The Trust consists of four separate funds: the “California High-Yield Fund,” the “California Quality Fund,” the “Florida Fund,” and the “North Carolina Fund.” Through May 16, 2008, each Fund of the Trust, as well as the New Jersey Fund and the Pennsylvania Fund (each a “Fund”, collectively, the “Funds”), offered three classes of shares. |
| |
| Class A shares are subject to a continuing service fee of up to 0.25% on an annual basis and, through January 6, 2008, were sold with an initial sales charge of up to 4.75% (4.5% effective January 7, 2008). 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. Effective January 7, 2008, eligible employee benefit plans that have at least $2 million in plan assets may purchase Class A shares at net asset value, but, in the event of plan termination, will be subject to a CDSC of 1% on redemption of shares purchased within 18 months prior to plan termination. |
| |
| Class C shares and 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 Boards of Directors/Trustees of the Funds approved the automatic conversion of all of the Funds’ outstanding Class D shares to Class C shares at their respective net asset values. The conversion was implemented on May 16, 2008. Effective at the close of business on May 16, 2008, the Funds will no longer offer Class D shares. The conversion did not affect individual shareholder account values. |
| |
| All classes of shares for each Fund 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-specific 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 accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results may differ from these estimates. These unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal recurring nature. The following summarizes the significant accounting policies of the Funds: |
| |
| a. | Security Valuation and Risk — Traded securities are valued at the last sales price on the primary market on which they are traded. Securities for which there is no last sales price are valued by independent pricing services based on bid prices which consider such factors as transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities or are valued by J. & W. Seligman & Co. Incorporated (the “Manager”) based on quotations provided by primary market makers in such securities. Securities for which market quotations are not readily available (or are otherwise no longer valid or reliable) are valued at fair value determined in accordance with procedures approved by the Boards of Directors/Trustees. This can occur in the event of, among other things, natural disasters, acts of terrorism, market disruptions, intra-day trading halts, and extreme market volatility. The determination of fair value involves subjective judgments. As a result, using fair value to price a security may result in a price materially different from the prices used by other mutual funds to determine net asset value or the price that may be realized upon the actual sale of the security. Short-term holdings maturing in 60 days or less are valued at current market quotations or amortized cost if the Manager believes it approximates fair value. Short-term holdings maturing in more than 60 days are valued at current market quotations until the 60th day prior to maturity and are then valued as described above for securities maturing in 60 days or less. |
| | |
| | Fixed-income securities owned by the Funds are subject to interest-rate risk, credit risk, prepayment risk, and market risk. To the extent that the Funds concentrate their investments in municipal securities issued by a single state and its municipalities, specific events or factors affecting a particular state may have an impact on the municipal securities of that state without affecting the municipal market in general. |
| | |
| b. | Restricted Cash — Restricted cash represents deposits that are being held by banks as collateral for letters of credit issued in connection with the insurance policies of the Trust, New Jersey Fund and Pennsylvania Fund. |
| | |
| c. | Multiple Class Allocations — Each Fund’s income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares of that Fund based upon the relative value of the shares of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributable to a particular class, are charged directly to such class. For the six months ended March 31, 2008, distribution and service fees were the only class-specific expenses. |
| | |
| d. | Security Transactions and Related Investment Income — Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial reporting and federal income tax purposes. Interest income is recorded on the accrual basis. The Funds amortize discounts and premiums paid on bonds and other debt securities for financial reporting purposes. |
| | |
| | Short-term holdings include securities with stated or effective maturity dates of less than one year. |
| | |
| | Variable rate demand notes purchased by the Funds may be put back to the designated remarketing agent for the issue at par on any day, for settlement within seven days, and, accordingly, are treated as short-term holdings. These notes bear interest at a rate that resets daily or weekly. At March 31, 2008, the interest rates paid on these notes ranged from 0.80% to 1.47%. |
| | |
| e. | Distributions to Shareholders — Dividends are declared daily and paid monthly. Other distributions paid by the Funds are recorded on the ex-dividend date. |
| | |
| f. | Taxes — There is no provision for federal income tax. Each Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all taxable net income and net realized gains. |
| | |
18
Notes to Financial Statements (unaudited) |
| | |
| | On October 1, 2007, the Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109.” FIN 48 requires the Funds to recognize in their financial statements the impact of a tax position taken (or expected to be taken) on an income tax return if such position will more likely than not be sustained upon examination based on the technical merits of the position. Based upon their review of tax positions, the Funds have determined that FIN 48 did not have a material impact on the Funds’ financial statements for the six months ended March 31, 2008. |
| | |
3. | Management Fee, Distribution Services, and Other Transactions —The Manager manages the affairs of the Trust, the New Jersey Fund and the Pennsylvania Fund and provides the necessary personnel and facilities. Compensation of all officers of the Trust, the New Jersey Fund and the Pennsylvania Fund, all directors/trustees of the Trust, the New Jersey Fund and the Pennsylvania Fund who are employees of the Manager, and all personnel of the Trust, the New Jersey Fund and the Pennsylvania Fund and the Manager is paid by the Manager. The Manager’s fee is calculated daily and payable monthly, equal to 0.50% per annum of each Fund’s average daily net assets. The Manager, at its discretion, agreed to waive a portion of its fees for the six months ended March 31, 2008 to limit the per annum fee of California High-Yield Fund and Florida Fund to 0.40% and 0.35%, respectively. For the six months ended March 31, 2008, the amounts of fees waived by the Manager for California High-Yield Fund and Florida Fu nd were $16,803 and $18,687, respectively. |
| |
| For the six months ended March 31, 2008, Seligman Advisors, Inc. (the “Distributor”), agent for the distribution of the Funds’ shares and an affiliate of the Manager, received the following commissions and concessions from sales of Class A shares. The following commissions were also paid to dealers for sales of Class A shares: |
| |
| Fund | Commissions and Concessions Retained by Affiliates | | Dealer Commissions
| |
| California High-Yield | $ | 3,363 | | | $ | 20,039 | | |
| California Quality | | 2,280 | | | | 12,667 | | |
| Florida | | 763 | | | | 5,411 | | |
| North Carolina | | 1,709 | | | | 10,498 | | |
| New Jersey | | 1,741 | | | | 14,311 | | |
| Pennsylvania | | 204 | | | | 1,510 | | |
| |
| Each 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 continuing fees of up to 0.25% on an annual basis 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 Funds monthly pursuant to the Plan. For the six months ended March 31, 2008, for California High-Yield Fund, California Quality Fund, Florida Fund, North Carolina Fund, New Jersey Fund and Pennsylvania Fund, fees incurred under the Plan aggregated to $14,318, $18,599, $26,991, $15,695, $37,078 and $19,026, respectively, or 0.10%, 0.10%, 0.25%, 0.25%, 0.25% and 0.24%, respectively, per annum of average daily net assets of Class A shares. |
| |
| Under the Plan, with respect to Class C shares and Class D shares, service organizations can enter into agreements with the Distributor and receive continuing fees for providing personal services and/or the maintenance of shareholder accounts of up to 0.25% on an annual basis of the average daily net assets of the Class C and Class D shares for which the organizations are responsible, and fees for providing other distribution assistance of up to 0.75% on an annual basis of such average daily net assets. Such fees are paid monthly by the Funds to the Distributor pursuant to the Plan. For the six months ended March 31, 2008, fees incurred under the Plan equivalent to 1% per annum of the average daily net assets of Class C and Class D shares were as follows: |
| |
| Fund | Class C | | Class D | |
| California High-Yield | $ | 12,151 | | | $ | 14,017 | | |
| California Quality | | 6,964 | | | | 4,571 | | |
| Florida | | 10,250 | | | | 5,005 | | |
| North Carolina | | 2,271 | | | | 2,433 | | |
| New Jersey | | 11,534 | | | | 4,963 | | |
| Pennsylvania | | 2,875 | | | | 2,152 | | |
| |
| The Distributor and Seligman Services, Inc., also an affiliate of the Manager, are eligible to receive distribution and service fees pursuant to the Plan. For the six months ended March 31, 2008, the Distributor and Seligman Services, Inc. received distribution and service fees as follows: |
| |
| Fund | Distribution and Service Fees
| | Fund | Distribution and Service Fees
| |
| California High-Yield | $ | 1,673 | | North Carolina | $ | 1,214 | |
| California Quality | | 847 | | New Jersey | | 4,714 | |
| Florida | | 1,501 | | Pennsylvania | | 351 | |
| |
| The Distributor is entitled to retain any CDSC imposed on certain redemptions of shares. For the six months ended March 31, 2008, such charges amounted to $160 for the New Jersey Fund. |
| |
| For the six months ended March 31, 2008, Seligman Data Corp., which is owned by certain associated investment companies, charged each Fund at cost for shareholder account services in accordance with a methodology approved by the Funds’ directors/trustees as follows: |
| |
| Fund | | | Fund | | |
| California High-Yield | $ | 27,440 | | North Carolina | $ | 11,447 | |
| California Quality | | 30,547 | | New Jersey | | 29,100 | |
| Florida | | 20,179 | | Pennsylvania | | 13,587 | |
| |
| Costs of Seligman Data Corp. directly attributable to a Fund were charged to that Fund. The remaining charges were allocated to each Fund by Seligman Data Corp. pursuant to a formula based on each Fund’s net assets, shareholder transaction volume and number of shareholder accounts. |
| |
| The Trust, New Jersey Fund and Pennsylvania Fund and certain other associated investment companies (together, the “Guarantors”) have severally but not jointly guaranteed the performance and observance of all the terms and conditions of two leases entered into by Seligman Data Corp., including the payment of rent by Seligman Data Corp. (the “Guaranties”). The leases and the related Guaranties expire in |
19
Notes to Financial Statements (unaudited) |
|
| September 2008 and January 2019, respectively. The obligation of a Guarantor to pay any amount due under the Guaranties is limited to a specified percentage of the full amount, which generally is based on each Guarantor’s percentage of the expenses billed by Seligman Data Corp. to all Guarantors in the most recent calendar quarter. At March 31, 2008, the potential obligations under the Guaranties were $117,300 for Seligman Municipal Series Trust, $39,900 for the New Jersey Fund and $17,700 for the Pennsylvania Fund. |
| |
| As of March 31, 2008, no event has occurred which would result in the Guarantors becoming liable to make any payment under the Guaranties. Each Fund of the Trust would bear a portion of any payments made by the Trust under the Guaranties. A portion of the rent paid by Seligman Data Corp. is charged to the Funds as part of Seligman Data Corp.’s shareholder account services cost. |
| |
| Certain officers and directors/trustees of the Trust, the New Jersey Fund and the Pennsylvania Fund are officers or directors of the Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp. |
| |
| The Trust, New Jersey Fund, and Pennsylvania Fund have a compensation agreement under which directors/trustees who receive fees may elect to defer receiving such fees. Directors/trustees may elect to have their deferred fees accrue interest or earn a return based on the performance of the Funds or other funds in the Seligman Group of Investment Companies. Deferred fees and related accrued earnings are not deductible by the Funds for federal income tax purposes until such amounts are paid. The cost of such fees and earnings/loss accrued thereon is included in directors’/trustees’ fees and expenses, and the accumulated balances thereof at March 31, 2008, are included in accrued expenses and other liabilities as follows: |
| |
| Fund | | | Fund | | | | |
| California High-Yield | $ | 746 | | North Carolina | $ | 668 | | |
| California Quality | | 771 | | New Jersey | | 746 | | |
| Florida | | 713 | | Pennsylvania | | 672 | | |
|
| |
4. | Committed Line of Credit — The Trust, New Jersey Fund, and Pennsylvania Fund are each participants in a joint $375 million committed line of credit that is shared by substantially all open-end funds in the Seligman Group of Investment Companies. Each Fund’s borrowings are limited to 10% of its net assets. Borrowings pursuant to the credit facility are subject to interest at a per annum rate equal to the overnight federal funds rate plus 0.50%. Each Fund incurs a commitment fee of 0.10% 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 in June 2008, but is renewable annually with the consent of the participating banks. For the six months ended March 31, 2008, the Funds did not borrow from the credit facility. |
| |
5. | Purchases and Sales of Securities — Purchases and sales of portfolio securities, excluding short-term holdings, for the six months ended March 31, 2008, were as follows: |
| |
| Fund | Purchases | | Sales | |
| California High-Yield | $ | — | | $ | 1,104,160 | |
| California Quality | | 2,997,176 | | | 2,020,000 | |
| Florida | | 2,143,560 | | | 3,018,820 | |
| North Carolina | | — | | | 15,000 | |
| New Jersey | | 1,570,857 | | | 1,119,370 | |
| Pennsylvania | | 596,743 | | | 1,591,267 | |
| |
6. | Federal Tax Information — Certain components of income, expense and realized capital gain and loss are recognized at different times or have a different character for federal income tax purposes and for financial reporting purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their 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 Funds. As a result of the differences described above, the treatment for financial reporting purposes of distributions made during the year from net investment income or net realized gains may differ from their ultimate treatment for federal income tax purposes. Further, the cost of investments also can differ for federal income tax purposes. |
| |
| The tax basis information presented is based on operating results for the six months ended March 31, 2008, and will vary from the final tax information as of the Funds’ year end. |
| |
| At March 31, 2008, each Fund’s cost of investments for federal income tax purposes was less than the cost for financial reporting purposes due to the amortization of market discount for financial reporting purposes, offset, in part, for the California Quality Fund by the tax deferral of losses on wash sales of $149,160. The tax basis cost of investments was as follows: |
| Fund | Tax Basis Cost | | Fund | Tax Basis Cost | |
| California High-Yield | $ | 31,831,125 | | North Carolina | $ | 12,454,502 | |
| California Quality | | 37,726,014 | | New Jersey | | 30,256,995 | |
| Florida | | 22,595,210 | | Pennsylvania | | 13,011,894 | |
20
Notes to Financial Statements (unaudited) |
|
| |
| At March 31, 2008, the tax basis components of accumulated earnings were as follows: |
| |
| | California High-Yield
| | California Quality
| | Florida
| | North Carolina
| | New Jersey
| | Pennsylvania
| |
| Gross unrealized appreciation of portfolio securities | $ | 1,174,075 | | $ | 1,176,050 | | $ | 1,046,406 | | $ | 798,890 | | $ | 1,286,270 | | $ | 896,309 | |
| Gross unrealized depreciation of portfolio securities | | (287,981 | ) | | (204,651 | ) | | (357,389 | ) | | (47,192 | ) | | (262,186 | ) | | (15,030 | ) |
| Net unrealized appreciation of portfolio securities | | 886,094 | | | 971,399 | | | 689,017 | | | 751,698 | | | 1,024,084 | | | 881,279 | |
| Undistributed tax-exempt income | | 15,759 | | | — | | | 6,331 | | | — | | | — | | | — | |
| Undistributed/accumulated net realized gain (loss) | | (15,665 | ) | | 41,410 | | | (62,807 | ) | | (7,787 | ) | | 20,493 | | | 78,406 | |
| Capital loss carryforward | | — | | | — | | | — | | | — | | | — | | | (1,073 | ) |
| Total accumulated earnings | $ | 886,188 | | $ | 1,012,809 | | $ | 632,541 | | $ | 743,911 | | $ | 1,044,577 | | $ | 958,612 | |
| |
| At September 30, 2007, the Pennsylvania Fund had a net capital loss carryforward for federal income tax purposes of $1,073, all of which expires in 2015 and is available for offset against future net capital gains. Accordingly, no capital gain distributions are expected to be paid to shareholders of the Pennsylvania Fund until net capital gains have been realized in excess of the available capital loss carryforward. |
| |
| The tax characterization of distributions paid is as follows: |
| |
| | Six Months Ended 3/31/08
| | Year Ended 9/30/07
| | | Six Months Ended 3/31/08
| | Year Ended 9/30/07
| |
| Tax-exempt income: | | | | | | | Long-term capital gains: | | | | | | |
| California High-Yield | $ | 665,162 | | $ | 1,367,896 | | California High-Yield | $ | 72,265 | | | — | |
| California Quality | | 755,318 | | | 1,732,412 | | California Quality | | 315,423 | | $ | 87,597 | |
| Florida | | 462,907 | | | 1,123,416 | | Florida | | 297,253 | | | 38,266 | |
| North Carolina | | 216,981 | | | 528,453 | | North Carolina | | — | | | 157,717 | |
| New Jersey | | 607,558 | | | 1,361,881 | | New Jersey | | 161,292 | | | 98,981 | |
| Pennsylvania | | 258,550 | | | 522,355 | | Pennsylvania | | — | | | — | |
| |
7. | Share Transactions — At March 31, 2008, the Funds (with the exception of New Jersey Fund) had unlimited shares authorized. The New Jersey Fund had 100,000,000 shares authorized. Transactions in Shares of Beneficial Interest (for Funds of the Trust and Pennsylvania Fund) or Capital Stock were as follows: |
| |
| California High-Yield Fund | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class A | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 169,538 | | $ | 1,106,768 | | | 71,761 | | $ | 474,546 | |
| Investment of dividends | | 57,227 | | | 374,170 | | | 113,342 | | | 746,092 | |
| Exchanged from associated funds | | 85,501 | | | 560,622 | | | 23,373 | | | 153,320 | |
| Investment of gain distributions | | 6,725 | | | 43,981 | | | — | | | — | |
| Total | | 318,991 | | | 2,085,541 | | | 208,476 | | | 1,373,958 | |
| Cost of shares repurchased | | (327,229 | ) | | (2,139,654 | ) | | (364,823 | ) | | (2,399,318 | ) |
| Exchanged into associated funds | | (28,453 | ) | | (186,652 | ) | | (24,314 | ) | | (159,903 | ) |
| Total | | (355,682 | ) | | (2,326,306 | ) | | (389,137 | ) | | (2,559,221 | ) |
| Decrease | | (36,691 | ) | $ | (240,765 | ) | | (180,661 | ) | $ | (1,185,263 | ) |
| Class C | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 59,036 | | $ | 388,099 | | | 26,255 | | $ | 173,481 | |
| Investment of dividends | | 4,029 | | | 26,355 | | | 8,598 | | | 56,675 | |
| Investment of gain distributions | | 609 | | | 3,990 | | | — | | | — | |
| Total | | 63,674 | | | 418,444 | | | 34,853 | | | 230,156 | |
| Cost of shares repurchased | | (7,260 | ) | | (47,591 | ) | | (87,624 | ) | | (576,871 | ) |
| Increase (decrease) | | 56,414 | | $ | 370,853 | | | (52,771 | ) | $ | (346,715 | ) |
| | | | | | | | | | | | | |
21
Notes to Financial Statements (unaudited) |
|
| California High-Yield Fund (continued) | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class D | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 9,491 | | $ | 62,248 | | | 14 | | $ | 95 | |
| Investment of dividends | | 2,566 | | | 16,788 | | | 5,697 | | | 37,567 | |
| Investment of gain distributions | | 524 | | | 3,429 | | | — | | | — | |
| Total | | 12,581 | | | 82,465 | | | 5,711 | | | 37,662 | |
| Cost of shares repurchased | | (25,738 | ) | | (166,275 | ) | | (43,634 | ) | | (288,131 | ) |
| Exchanged into associated funds | | (628 | ) | | (4,137 | ) | | (601 | ) | | (3,971 | ) |
| Total | | (26,366 | ) | | (170,412 | ) | | (44,235 | ) | | (292,102 | ) |
| Decrease | | (13,785 | ) | $ | (87,947 | ) | | (38,524 | ) | $ | (254,440 | ) |
| | | | | |
| California Quality Fund | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class A | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 287,580 | | $ | 1,865,568 | | | 67,380 | | $ | 443,678 | |
| Investment of dividends | | 65,946 | | | 429,799 | | | 146,654 | | | 969,178 | |
| Exchanged from associated funds | | 9,714 | | | 63,538 | | | 94,722 | | | 623,731 | |
| Investment of gain distributions | | 32,862 | | | 213,923 | | | 8,598 | | | 57,262 | |
| Total | | 396,102 | | | 2,572,828 | | | 317,354 | | | 2,093,849 | |
| Cost of shares repurchased | | (404,309 | ) | | (2,638,872 | ) | | (902,259 | ) | | (5,955,830 | ) |
| Exchanged into associated funds | | (650 | ) | | (4,255 | ) | | (48,662 | ) | | (321,449 | ) |
| Total | | (404,959 | ) | | (2,643,127 | ) | | (950,921 | ) | | (6,277,279 | ) |
| Decrease | | (8,857 | ) | $ | (70,299 | ) | | (633,567 | ) | $ | (4,183,430 | ) |
| Class C | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 345 | | $ | 2,233 | | | 496 | | $ | 3,286 | |
| Investment of dividends | | 2,806 | | | 18,229 | | | 6,585 | | | 43,369 | |
| Exchanged from associated funds | | — | | | — | | | 2,551 | | | 16,899 | |
| Investment of gain distributions | | 1,758 | | | 11,391 | | | 513 | | | 3,408 | |
| Total | | 4,909 | | | 31,853 | | | 10,145 | | | 66,962 | |
| Cost of shares repurchased | | (129,757 | ) | | (840,042 | ) | | (51,873 | ) | | (342,091 | ) |
| Exchanged into associated funds | | — | | | — | | | (6,809 | ) | | (44,394 | ) |
| Total | | (129,757 | ) | | (840,042 | ) | | (58,682 | ) | | (386,485 | ) |
| Decrease | | (124,848 | ) | $ | (808,189 | ) | | (48,537 | ) | $ | (319,523 | ) |
| Class D | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 93,354 | | $ | 599,044 | | | 6,824 | | $ | 45,127 | |
| Investment of dividends | | 1,187 | | | 7,683 | | | 2,284 | | | 15,046 | |
| Exchanged from associated funds | | 88,400 | | | 573,714 | | | — | | | — | |
| Investment of gain distributions | | 497 | | | 3,222 | | | 153 | | | 1,017 | |
| Total | | 183,438 | | | 1,183,663 | | | 9,261 | | | 61,190 | |
| Cost of shares repurchased | | (21,538 | ) | | (139,565 | ) | | (32,935 | ) | | (216,881 | ) |
| Exchanged into associated funds | | — | | | — | | | (7,426 | ) | | (48,937 | ) |
| Total | | (21,538 | ) | | (139,565 | ) | | (40,361 | ) | | (265,818 | ) |
| Increase (decrease) | | 161,900 | | $ | 1,044,098 | | | (31,100 | ) | $ | (204,628 | ) |
22
Notes to Financial Statements (unaudited) |
|
| Florida Fund | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class A | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 22,084 | | $ | 167,009 | | | 42,311 | | $ | 325,876 | |
| Investment of dividends | | 33,106 | | | 251,256 | | | 75,354 | | | 579,424 | |
| Exchanged from associated funds | | 7,357 | | | 56,353 | | | 1,831 | | | 14,064 | |
| Investment of gain distributions | | 24,187 | | | 182,610 | | | 2,880 | | | 22,322 | |
| Total | | 86,734 | | | 657,228 | | | 122,376 | | | 941,686 | |
| Cost of shares repurchased | | (192,100 | ) | | (1,456,788 | ) | | (496,238 | ) | | (3,819,160 | ) |
| Exchanged into associated funds | | (17,031 | ) | | (127,731 | ) | | (18,570 | ) | | (143,295 | ) |
| Total | | (209,131 | ) | | (1,584,519 | ) | | (514,808 | ) | | (3,962,455 | ) |
| Decrease | | (122,397 | ) | $ | (927,291 | ) | | (392,432 | ) | $ | (3,020,769 | ) |
| Class C | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 2,233 | | $ | 17,125 | | | 1,199 | | $ | 9,267 | |
| Investment of dividends | | 2,911 | | | 22,160 | | | 8,623 | | | 66,489 | |
| Investment of gain distributions | | 2,869 | | | 21,714 | | | 421 | | | 3,271 | |
| Total | | 8,013 | | | 60,999 | | | 10,243 | | | 79,027 | |
| Cost of shares repurchased | | (6,835 | ) | | (51,798 | ) | | (146,963 | ) | | (1,132,446 | ) |
| Exchange into associated funds | | (5,127 | ) | | (38,969 | ) | | — | | | — |
| Total | | (11,962 | ) | | (90,767 | ) | | (146,963 | ) | | (1,132,446 | ) |
| Decrease | | (3,949 | ) | | (29,768 | ) | | (136,720 | ) | $ | (1,053,419 | ) |
| Class D | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | — | | | — | | | 19,364 | | $ | 150,373 | |
| Investment of dividends | | 1,040 | | $ | 7,914 | | | 2,492 | | | 19,209 | |
| Investment of gain distributions | | 932 | | | 7,059 | | | 130 | | | 1,012 | |
| Total | | 1,972 | | | 14,973 | | | 21,986 | | | 170,594 | |
| Cost of shares repurchased | | (2,126 | ) | | (15,965 | ) | | (39,821 | ) | | (306,099 | ) |
| Exchanged into associated funds | | (2,288 | ) | | (17,346 | ) | | — | | | — | |
| Total | | (4,414 | ) | | (33,311 | ) | | (39,821 | ) | | (306,099 | ) |
| Decrease | | (2,442 | ) | $ | (18,338 | ) | | (17,835 | ) | $ | (135,505 | ) |
| North Carolina Fund | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class A | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 69,892 | | $ | 535,312 | | | 2,254 | | $ | 16,966 | |
| Investment of dividends | | 16,495 | | | 127,388 | | | 41,155 | | | 317,627 | |
| Exchanged from associated funds | | 5,885 | | | 45,023 | | | 2,569 | | | 19,792 | |
| Investment of gain distributions | | — | | | — | | | 13,961 | | | 109,034 | |
| Total | | 92,272 | | | 707,723 | | | 59,939 | | | 463,419 | |
| Cost of shares repurchased | | (116,155 | ) | | (896,985 | ) | | (359,985 | ) | | (2,750,774 | ) |
| Exchanged into associated funds | | — | | | — | | | (53 | ) | | (407 | ) |
| Total | | (116,155 | ) | | (896,985 | ) | | (360,038 | ) | | (2,751,181 | ) |
| Decrease | | (23,883 | ) | $ | (189,262 | ) | | (300,099 | ) | $ | (2,287,762 | ) |
23
Notes to Financial Statements (unaudited) |
|
| North Carolina Fund (continued) | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class C | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | — | | | — | | | 787 | | $ | 6,074 | |
| Investment of dividends | | 370 | | $ | 2,859 | | | 1,502 | | | 11,559 | |
| Investment of gain distributions | | — | | | — | | | 949 | | | 7,401 | |
| Total | | 370 | | | 2,859 | | | 3,238 | | | 25,034 | |
| Cost of shares repurchased | | (3,205 | ) | | (24,641 | ) | | (87,120 | ) | | (661,830 | ) |
| Decrease | | (2,835 | ) | $ | (21,782 | ) | | (83,882 | ) | $ | (636,796 | ) |
| | | | | |
| Class D | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | — | | | — | | | 13 | | $ | 94 | |
| Investment of dividends | | 381 | | $ | 2,935 | | | 842 | | | 6,483 | |
| Exchanged from associated funds | | — | | | — | | | 6,106 | | | 47,445 | |
| Investment of gain distributions | | — | | | — | | | 323 | | | 2,521 | |
| Total | | 381 | | | 2,935 | | | 7,284 | | | 56,543 | |
| Cost of shares repurchased | | (1,514 | ) | | (11,666 | ) | | (3,500 | ) | | (27,368 | ) |
| Exchanged into associated funds | | — | | | — | | | (6,077 | | | (47,582 | ) |
| Total | | (1,514 | ) | | (11,666 | ) | | (9,577 | ) | | (74,950 | ) |
| Decrease | | (1,133 | ) | $ | (8,731 | ) | | (2,293 | ) | $ | (18,407 | ) |
| | | | | |
| New Jersey Fund | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class A | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 73,831 | | $ | 533,421 | | | 212,721 | | $ | 1,550,957 | |
| Investment of dividends | | 55,327 | | | 400,811 | | | 120,227 | | | 876,267 | |
| Exchanged from associated funds | | 2,371 | | | 17,035 | | | 69,922 | | | 510,335 | |
| Investment of gain distributions | | 15,966 | | | 115,247 | | | 9,308 | | | 68,323 | |
| Total | | 147,495 | | | 1,066,514 | | | 412,178 | | | 3,005,882 | |
| Cost of shares repurchased | | (227,516 | ) | | (1,647,911 | ) | | (502,010 | ) | | (3,653,723 | ) |
| Exchanged into associated funds | | (44,502 | ) | | (322,585 | ) | | (107,099 | ) | | (784,791 | ) |
| Total | | (272,018 | ) | | (1,970,496 | ) | | (609,109 | ) | | (4,438,514 | ) |
| Decrease | | (124,523 | ) | $ | (903,982 | ) | | (196,931 | ) | $ | (1,432,632 | ) |
| Class C | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 6,512 | | $ | 47,513 | | | 6,316 | | $ | 46,641 | |
| Investment of dividends | | 3,179 | | | 23,377 | | | 7,745 | | | 57,284 | |
| Exchanged from associated funds | | 5,685 | | | 41,551 | | | — | | | — | |
| Investment of gain distributions | | 1,164 | | | 8,529 | | | 918 | | | 6,831 | |
| Total | | 16,540 | | | 120,970 | | | 14,979 | | | 110,756 | |
| Cost of shares repurchased | | (34,767 | ) | | (255,813 | ) | | (75,811 | ) | | (562,277 | ) |
| Exchanged into associated funds | | — | | | — | | | (49,713 | ) | | (369,605 | ) |
| Total | | (34,767 | ) | | (255,813 | ) | | (125,524 | ) | | (931,882 | ) |
| Decrease | | (18,227 | ) | $ | (134,843 | ) | | (110,545 | ) | $ | (821,126 | ) |
24
Notes to Financial Statements (unaudited) |
|
| New Jersey Fund (continued) | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class D | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 35,407 | | $ | 261,103 | | | 3,958 | | $ | 29,312 | |
| Investment of dividends | | 1,306 | | | 9,605 | | | 3,435 | | | 25,410 | |
| Exchanged from associated funds | | 2,255 | | | 16,710 | | | — | | | — | |
| Investment of gain distributions | | 466 | | | 3,415 | | | 283 | | | 2,107 | |
| Total | | 39,434 | | | 290,833 | | | 7,676 | | | 56,829 | |
| Cost of shares repurchased | | (24,652 | ) | | (181,204 | ) | | (10,231 | ) | | (76,048 | ) |
| Exchanged into associated funds | | — | | | — | | | — | | | (3 | ) |
| Total | | (24,652 | ) | | (181,204 | ) | | (10,231 | ) | | (76,051 | ) |
| Increase (decrease) | | 14,782 | | $ | 109,629 | | | (2,555 | ) | $ | (19,222 | ) |
| Pennsylvania Fund | | | | |
| | Six Months Ended 3/31/08 | | Year Ended 9/30/07 | |
| Class A | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | 4,454 | | $ | 34,514 | | | 25,246 | | $ | 196,716 | |
| Investment of dividends | | 21,652 | | | 167,922 | | | 44,478 | | | 344,905 | |
| Exchanged from associated funds | | 2,089 | | | 16,086 | | | — | | | — | |
| Total | | 28,195 | | | 218,522 | | | 69,724 | | | 541,621 | |
| Cost of shares repurchased | | (101,488 | ) | | (786,947 | ) | | (332,316 | ) | | (2,583,615 | ) |
| Exchanged into associated funds | | (4,526 | ) | | (34,934 | ) | | (25,515 | ) | | (199,728 | ) |
| Total | | (106,014 | ) | | (821,881 | ) | | (357,831 | ) | | (2,783,343 | ) |
| Decrease | | (77,819 | ) | $ | (603,359 | ) | | (288,107 | ) | $ | (2,241,722 | ) |
| Class C | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | — | | $ | 3 | | | 935 | | $ | 7,263 | |
| Investment of dividends | | 514 | | | 3,974 | | | 1,021 | | | 7,890 | |
| Exchanged from associated funds | | 2,587 | | | 20,000 | | | — | | | — | |
| Total | | 3,101 | | | 23,977 | | | 1,956 | | | 15,153 | |
| Cost of shares repurchased | | (281 | ) | | (2,174 | ) | | (30,035 | ) | | (234,376 | ) |
| Increase (decrease) | | 2,820 | | $ | 21,803 | | | (28,079 | ) | $ | (219,223 | ) |
| Class D | Shares | | Amount | | Shares | | Amount | |
| Net proceeds from sales of shares | | — | | | — | | | 12 | | $ | 95 | |
| Investment of dividends | | 51 | | $ | 398 | | | 181 | | | 1,397 | |
| Total | | 51 | | | 398 | | | 193 | | | 1,492 | |
| Cost of shares repurchased | | (689 | ) | | (5,405 | ) | | (3,294 | ) | | (25,234 | ) |
| Decrease | | (638 | ) | $ | (5,007 | ) | | (3,101 | ) | $ | (23,742 | ) |
25
Notes to Financial Statements (unaudited) |
|
8. | Other Matters — In late 2003, the Manager conducted an extensive internal review concerning mutual fund trading practices. The Manager’s review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by the Manager (the “Seligman Funds”); this arrangement was in the process of being closed down by the Manager before September 2003. The Manager identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, the Manager, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. The Manager also provided information concerning mutual fund trading practices to the Securities and Exchange Commission (the “SEC”) and the Office of the Attorney General of the State of New York (“NYAG”). |
| |
| In September 2005, the New York staff of the SEC indicated that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against the Manager and the Distributor relating to frequent trading in the Seligman Funds. The Manager responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that the Manager had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. |
| |
| In September 2006, the NYAG commenced a civil action in New York State Supreme Court against the Manager, the Distributor, Seligman Data Corp. and Brian T. Zino (collectively, the “Seligman Parties”), alleging, in substance, that, in addition to the four arrangements noted above, the Seligman Parties permitted other persons to engage in frequent trading and, as a result, the prospectus disclosure used by the registered investment companies managed by the Manager is and has been misleading. The NYAG included other related claims and also claimed that the fees charged by the Manager to the Seligman Funds were excessive. The NYAG is seeking damages of at least $80 million and restitution, disgorgement, penalties and costs and injunctive relief. The Seligman Parties answered the complaint in December 2006 and believe that the claims are without merit. |
| |
| Any resolution of these matters may include the relief noted above or other sanctions or changes in procedures. Any damages would be paid by the Manager and not by the Seligman Funds. If the NYAG obtains injunctive relief, the Manager and its affiliates could, in the absence of the SEC in its discretion granting exemptive relief, be enjoined from providing advisory and underwriting services to the Seligman Funds and other registered investment companies. |
| |
| The Manager does not believe that the foregoing legal action or other possible actions will have a material adverse impact on the Manager or its clients, including the Seligman Funds and other investment companies managed by it; however, there can be no assurance of this or that these matters and any related publicity will not affect demand for shares of the Seligman Funds and such other investment companies or have other adverse consequences. |
| |
9. | Recently Issued Accounting Pronouncement — In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (“SFAS No. 157”), “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value of assets and liabilities and expands disclosure about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Funds are currently evaluating the impact of the adoption of SFAS No. 157 but believe the impact will be limited to expanded disclosures in the Funds’ financial statements. |
26
Financial Highlights (unaudited) |
The tables below are intended to help you understand the financial performance of each Class of each Fund for the periods presented. Certain information reflects financial results for a single share of a Class that was held throughout the periods shown. Per share amounts are calculated using average shares outstanding during the period. Total return shows the rate that you would have earned (or lost) on an investment in each Class, assuming you reinvested all your dividend and capital gain distributions. Total returns do not reflect any transaction cost on your investment or taxes investors may incur on distributions or on the redemption of shares, and are not annualized for periods of less than one year. |
California High-Yield Fund |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 6.55 | | $ | 6.60 | | $ | 6.62 | | $ | 6.65 | | $ | 6.59 | | $ | 6.74 | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | |
Net investment income | | 0.14 | | | 0.28 | | | 0.28 | | | 0.26 | | | 0.28 | | | 0.28 | |
Net realized and unrealized gain (loss) on investments | | (0.10 | ) | | (0.06 | ) | | (0.02 | ) | | 0.04 | | | 0.06 | | | (0.12 | ) |
Total from Investment Operations | | 0.04 | | | 0.22 | | | 0.26 | | | 0.30 | | | 0.34 | | | 0.16 | |
Less Distributions: | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | (0.13 | ) | | (0.27 | ) | | (0.28 | ) | | (0.26 | ) | | (0.27 | ) | | (0.28 | ) |
Distributions from net realized capital gain | | (0.01 | ) | | — | | | — | | | (0.07 | ) | | (0.01 | ) | | (0.03 | ) |
Total Distributions | | (0.14 | ) | | (0.27 | ) | | (0.28 | ) | | (0.33 | ) | | (0.28 | ) | | (0.31 | ) |
Net Asset Value, End of Period | $ | 6.45 | | $ | 6.55 | | $ | 6.60 | | $ | 6.62 | | $ | 6.65 | | $ | 6.59 | |
|
Total Return | | 0.72 | % | | 3.35 | % | | 3.99 | % | | 4.63 | % | | 5.30 | % | | 2.48 | % |
|
Ratios/Supplemental Data: |
Net assets, end of period (000s omitted) | $ | 27,981 | | $ | 28,641 | | $ | 30,079 | | $ | 31,432 | | $ | 34,315 | | $ | 38,798 | |
Ratio of expenses to average net assets | | 0.91 | %† | | 0.85 | % | | 0.90 | % | | 0.92 | % | | 0.90 | % | | 0.88 | % |
Ratio of net investment income to average net assets | | 4.25 | %† | | 4.25 | % | | 4.26 | % | | 3.97 | % | | 4.20 | % | | 4.24 | % |
Portfolio turnover rate | | — | | | 8.03 | % | | — | | | 1.47 | % | | — | | | 4.43 | % |
Without management fee waiver:* | | | | | | | | | | | | | | | | | | |
Ratio of expenses to average net assets | | 1.01 | %† | | 0.95 | % | | 1.00 | % | | 1.02 | % | | 1.00 | % | | 0.98 | % |
Ratio of net investment income to average net assets | | 4.15 | %† | | 4.15 | % | | 4.16 | % | | 3.87 | % | | 4.10 | % | | 4.14 | % |
| | | | | | |
27
Financial Highlights (unaudited) |
California High-Yield Fund (continued) |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 6.56 | | $ | 6.61 | | $ | 6.63 | | $ | 6.66 | | $ | 6.60 | | $ | 6.75 | |
Income from Investment Operations: |
Net investment income | | 0.11 | | | 0.22 | | | 0.22 | | | 0.20 | | | 0.22 | | | 0.22 | |
Net realized and unrealized gain (loss) on investments | | (0.10 | ) | | (0.06 | ) | | (0.02 | ) | | 0.04 | | | 0.06 | | | (0.12 | ) |
Total from Investment Operations | | 0.01 | | | 0.16 | | | 0.20 | | | 0.24 | | | 0.28 | | | 0.10 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.21 | ) | | (0.22 | ) | | (0.20 | ) | | (0.21 | ) | | (0.22 | ) |
Distributions from net realized capital gain | | (0.01 | ) | | — | | | — | | | (0.07 | ) | | (0.01 | ) | | (0.03 | ) |
Total Distributions | | (0.11 | ) | | (0.21 | ) | | (0.22 | ) | | (0.27 | ) | | (0.22 | ) | | (0.25 | ) |
Net Asset Value, End of Period | $ | 6.46 | | $ | 6.56 | | $ | 6.61 | | $ | 6.63 | | $ | 6.66 | | $ | 6.60 | |
|
Total Return | | 0.27 | % | | 2.42 | % | | 3.06 | % | | 3.69 | % | | 4.35 | % | | 1.56 | % |
|
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 2,611 | | $ | 2,281 | | $ | 2,649 | | $ | 2,475 | | $ | 2,964 | | $ | 3,482 | |
Ratio of expenses to average net assets | | 1.81 | %† | | 1.75 | % | | 1.80 | % | | 1.82 | % | | 1.80 | % | | 1.78 | % |
Ratio of net investment income to average net assets | | 3.35 | %† | | 3.35 | % | | 3.35 | % | | 3.07 | % | | 3.30 | % | | 3.34 | % |
Portfolio turnover rate | | — | | | 8.03 | % | | — | | | 1.47 | % | | — | | | 4.43 | % |
Without management fee waiver:* | | | | | | | | | | | | | | | | | | |
Ratio of expenses to average net assets | | 1.91 | %† | | 1.85 | % | | 1.90 | % | | 1.92 | % | | 1.90 | % | | 1.88 | % |
Ratio of net investment income to average net assets | | 3.25 | %† | | 3.25 | % | | 3.25 | % | | 2.97 | % | | 3.20 | % | | 3.24 | % |
| | | | | | |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 6.56 | | $ | 6.61 | | $ | 6.63 | | $ | 6.66 | | $ | 6.60 | | $ | 6.75 | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | |
Net investment income | | 0.11 | | | 0.22 | | | 0.22 | | | 0.20 | | | 0.22 | | | 0.22 | |
Net realized and unrealized gain (loss) on investments | | (0.10 | ) | | (0.06 | ) | | (0.02 | ) | | 0.04 | | | 0.06 | | | (0.12 | ) |
Total from Investment Operations | | 0.01 | | | 0.16 | | | 0.20 | | | 0.24 | | | 0.28 | | | 0.10 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.21 | ) | | (0.22 | ) | | (0.20 | ) | | (0.21 | ) | | (0.22 | ) |
Distributions from net realized capital gain | | (0.01 | ) | | — | | | — | | | (0.07 | ) | | (0.01 | ) | | (0.03 | ) |
Total Distributions | | (0.11 | ) | | (0.21 | ) | | (0.22 | ) | | (0.27 | ) | | (0.22 | ) | | (0.25 | ) |
Net Asset Value, End of Period | $ | 6.46 | | $ | 6.56 | | $ | 6.61 | | $ | 6.63 | | $ | 6.66 | | $ | 6.60 | |
|
Total Return | | 0.27 | % | | 2.42 | % | | 3.06 | % | | 3.69 | % | | 4.35 | % | | 1.56 | % |
|
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 2,648 | | $ | 2,778 | | $ | 3,056 | | $ | 2,988 | | $ | 2,519 | | $ | 4,832 | |
Ratio of expenses to average net assets | | 1.81 | %† | | 1.75 | % | | 1.80 | % | | 1.82 | % | | 1.80 | % | | 1.78 | % |
Ratio of net investment income to average net assets | | 3.35 | %† | | 3.35 | % | | 3.35 | % | | 3.07 | % | | 3.30 | % | | 3.34 | % |
Portfolio turnover rate | | — | | | 8.03 | % | | — | | | 1.47 | % | | — | | | 4.43 | % |
Without management fee waiver:* | | | | | | | | | | | | | | | | | | |
Ratio of expenses to average net assets | | 1.91 | %† | | 1.85 | % | | 1.90 | % | | 1.92 | % | | 1.90 | % | | 1.88 | % |
Ratio of net investment income to average net assets | | 3.25 | %† | | 3.25 | % | | 3.25 | % | | 2.97 | % | | 3.20 | % | | 3.24 | % |
| | | | | | |
| | |
See footnotes on page 36. |
28
Financial Highlights (unaudited) |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 6.57 | | $ | 6.69 | | $ | 6.79 | | $ | 6.89 | | $ | 6.88 | | $ | 7.04 | |
Income from Investment Operations: |
Net investment income | | 0.13 | | | 0.28 | | | 0.28 | | | 0.28 | | | 0.28 | | | 0.27 | |
Net realized and unrealized loss on investments | | (0.09 | ) | | (0.12 | ) | | (0.07 | ) | | (0.02 | ) | | — | | | (0.16 | ) |
Total from Investment Operations | | 0.04 | | | 0.16 | | | 0.21 | | | 0.26 | | | 0.28 | | | 0.11 | |
Less Distributions: |
Dividends from net investment income | | (0.13 | ) | | (0.27 | ) | | (0.28 | ) | | (0.27 | ) | | (0.27 | ) | | (0.27 | ) |
Distributions from net realized capital gain | | (0.05 | ) | | (0.01 | ) | | (0.03 | ) | | (0.09 | ) | | — | | | — | |
Total Distributions | | (0.18 | ) | | (0.28 | ) | | (0.31 | ) | | (0.36 | ) | | (0.27 | ) | | (0.27 | ) |
Net Asset Value, End of Period | $ | 6.43 | | $ | 6.57 | | $ | 6.69 | | $ | 6.79 | | $ | 6.89 | | $ | 6.88 | |
|
Total Return | | 0.60 | % | | 2.51 | % | | 3.14 | % | | 3.90 | % | | 4.23 | % | | 1.63 | % |
|
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 36,751 | | $ | 37,598 | | $ | 42,495 | | $ | 47,186 | | $ | 51,395 | | $ | 61,566 | |
Ratio of expenses to average net assets | | 0.97 | %† | | 0.92 | % | | 0.94 | % | | 0.94 | % | | 0.93 | % | | 0.93 | % |
Ratio of net investment income to average net assets | | 3.94 | %† | | 4.17 | % | | 4.19 | % | | 4.04 | % | | 4.06 | % | | 3.96 | % |
Portfolio turnover rate | | 5.76 | % | | 4.66 | % | | — | | | — | | | 0.86 | % | | 1.43 | % |
| | | | | | |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 6.54 | | $ | 6.66 | | $ | 6.76 | | $ | 6.87 | | $ | 6.85 | | $ | 7.01 | |
Income from Investment Operations: |
Net investment income | | 0.10 | | | 0.22 | | | 0.22 | | | 0.21 | | | 0.22 | | | 0.21 | |
Net realized and unrealized gain (loss) on investments | | (0.08 | ) | | (0.12 | ) | | (0.07 | ) | | (0.02 | ) | | 0.01 | | | (0.16 | ) |
Total from Investment Operations | | 0.02 | | | 0.10 | | | 0.15 | | | 0.19 | | | 0.23 | | | 0.05 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.21 | ) | | (0.22 | ) | | (0.21 | ) | | (0.21 | ) | | (0.21 | ) |
Distributions from net realized capital gain | | (0.05 | ) | | (0.01 | ) | | (0.03 | ) | | (0.09 | ) | | — | | | — | |
Total Distributions | | (0.15 | ) | | (0.22 | ) | | (0.25 | ) | | (0.30 | ) | | (0.21 | ) | | (0.21 | ) |
Net Asset Value, End of Period | $ | 6.41 | | $ | 6.54 | | $ | 6.66 | | $ | 6.76 | | $ | 6.87 | | $ | 6.85 | |
|
Total Return | | 0.31 | % | | 1.60 | % | | 2.23 | % | | 2.84 | % | | 3.46 | % | | 0.72 | % |
|
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 737 | | $ | 1,570 | | $ | 1,921 | | $ | 3,259 | | $ | 4,783 | | $ | 5,772 | |
Ratio of expenses to average net assets | | 1.87 | %† | | 1.82 | % | | 1.84 | % | | 1.84 | % | | 1.83 | % | | 1.83 | % |
Ratio of net investment income to average net assets | | 3.04 | %† | | 3.27 | % | | 3.29 | % | | 3.13 | % | | 3.16 | % | | 3.06 | % |
Portfolio turnover rate | | 5.76 | % | | 4.66 | % | | — | | | — | | | 0.86 | % | | 1.43 | % |
| | | | | | |
| | |
See footnotes on page 36. |
29
Financial Highlights (unaudited) |
California Quality Fund (continued) |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 6.54 | | $ | 6.66 | | $ | 6.76 | | $ | 6.87 | | $ | 6.85 | | $ | 7.01 | |
Income from Investment Operations: |
Net investment income | | 0.10 | | | 0.22 | | | 0.22 | | | 0.21 | | | 0.22 | | | 0.21 | |
Net realized and unrealized gain (loss) on investments | | (0.08 | ) | | (0.12 | ) | | (0.07 | ) | | (0.02 | ) | | 0.01 | | | (0.16 | ) |
Total from Investment Operations | | 0.02 | | | 0.10 | | | 0.15 | | | 0.19 | | | 0.23 | | | 0.05 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.21 | ) | | (0.22 | ) | | (0.21 | ) | | (0.21 | ) | | (0.21 | ) |
Distributions from net realized capital gain | | (0.05 | ) | | (0.01 | ) | | (0.03 | ) | | (0.09 | ) | | — | | | — | |
Total Distributions | | (0.15 | ) | | (0.22 | ) | | (0.25 | ) | | (0.30 | ) | | (0.21 | ) | | (0.21 | ) |
Net Asset Value, End of Period | $ | 6.41 | | $ | 6.54 | | $ | 6.66 | | $ | 6.76 | | $ | 6.87 | | $ | 6.85 | |
|
Total Return | | 0.31 | % | | 1.60 | % | | 2.23 | % | | 2.84 | % | | 3.46 | % | | 0.72 | % |
|
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 1,835 | | $ | 815 | | $ | 1,037 | | $ | 1,022 | | $ | 1,306 | | $ | 1,512 | |
Ratio of expenses to average net assets | | 1.87 | %† | | 1.82 | % | | 1.84 | % | | 1.84 | % | | 1.83 | % | | 1.83 | % |
Ratio of net investment income to average net assets | | 3.04 | %† | | 3.27 | % | | 3.29 | % | | 3.13 | % | | 3.16 | % | | 3.06 | % |
Portfolio turnover rate | | 5.76 | % | | 4.66 | % | | — | | | — | | | 0.86 | % | | 1.43 | % |
| | | | | | |
| | | | | | |
| | | | | | |
Florida Fund | Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.66 | | $ | 7.77 | | $ | 7.92 | | $ | 8.00 | | $ | 8.08 | | $ | 8.08 | |
Income from Investment Operations: |
Net investment income | | 0.15 | | | 0.33 | | | 0.33 | | | 0.33 | | | 0.32 | | | 0.32 | |
Net realized and unrealized gain (loss) on investments | | (0.09 | ) | | (0.11 | ) | | (0.11 | ) | | (0.08 | ) | | (0.06 | ) | | 0.01 | |
Total from Investment Operations | | 0.06 | | | 0.22 | | | 0.22 | | | 0.25 | | | 0.26 | | | 0.33 | |
Less Distributions: | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | (0.15 | ) | | (0.32 | ) | | (0.32 | ) | | (0.32 | ) | | (0.32 | ) | | (0.32 | ) |
Distributions from net realized capital gain | | (0.09 | ) | | (0.01 | ) | | (0.05 | ) | | (0.01 | ) | | (0.02 | ) | | (0.01 | ) |
Total Distributions | | (0.24 | ) | | (0.33 | ) | | (0.37 | ) | | (0.33 | ) | | (0.34 | ) | | (0.33 | ) |
Net Asset Value, End of Period | $ | 7.48 | | $ | 7.66 | | $ | 7.77 | | $ | 7.92 | | $ | 8.00 | | $ | 8.08 | |
|
Total Return | | 0.73 | % | | 2.88 | % | | 2.86 | % | | 3.17 | % | | 3.26 | % | | 4.16 | % |
|
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 20,930 | | $ | 22,372 | | $ | 25,750 | | $ | 29,298 | | $ | 32,470 | | $ | 34,131 | |
Ratio of expenses to average net assets | | 1.05 | %† | | 0.99 | % | | 1.00 | % | | 0.98 | % | | 0.99 | % | | 1.00 | % |
Ratio of net investment income to average net assets | | 3.95 | %† | | 4.23 | % | | 4.20 | % | | 4.11 | % | | 4.05 | % | | 3.98 | % |
Portfolio turnover rate | | 9.20 | % | | 18.37 | % | | 5.12 | % | | — | | | — | | | 12.51 | % |
Without management fee waiver:* | | | | | | | | | | | | | | | | | | |
Ratio of expenses to average net assets | | 1.20 | %† | | 1.14 | % | | 1.15 | % | | 1.13 | % | | 1.14 | % | | 1.15 | % |
Ratio of net investment income to average net assets | | 3.80 | %† | | 4.08 | % | | 4.05 | % | | 3.96 | % | | 3.90 | % | | 3.83 | % |
| | | | | | |
| | |
See footnotes on page 36. |
30
Financial Highlights (unaudited) |
Florida Fund (continued) | Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.67 | | $ | 7.79 | | $ | 7.93 | | $ | 8.02 | | $ | 8.09 | | $ | 8.10 | |
Income from Investment Operations: |
Net investment income | | 0.12 | | | 0.27 | | | 0.27 | | | 0.27 | | | 0.26 | | | 0.26 | |
Net realized and unrealized gain (loss) on investments | | (0.09 | ) | | (0.12 | ) | | (0.09 | ) | | (0.09 | ) | | (0.05 | ) | | — | |
Total from Investment Operations | | 0.03 | | | 0.15 | | | 0.18 | | | 0.18 | | | 0.21 | | | 0.26 | |
Less Distributions: |
Dividends from net investment income | | (0.11 | ) | | (0.26 | ) | | (0.27 | ) | | (0.26 | ) | | (0.26 | ) | | (0.26 | ) |
Distributions from net realized capital gain | | (0.09 | ) | | (0.01 | ) | | (0.05 | ) | | (0.01 | ) | | (0.02 | ) | | (0.01 | ) |
Total Distributions | | (0.20 | ) | | (0.27 | ) | | (0.32 | ) | | (0.27 | ) | | (0.28 | ) | | (0.27 | ) |
Net Asset Value, End of Period | $ | 7.50 | | $ | 7.67 | | $ | 7.79 | | $ | 7.93 | | $ | 8.02 | | $ | 8.09 | |
Total Return | | 0.41 | % | | 1.98 | % | | 2.22 | % | | 2.27 | % | | 2.61 | % | | 3.24 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 1,999 | | $ | 2,076 | | $ | 3,171 | | $ | 3,907 | | $ | 4,683 | | $ | 4,686 | |
Ratio of expenses to average net assets | | 1.80 | %† | | 1.74 | % | | 1.75 | % | | 1.73 | % | | 1.74 | % | | 1.75 | % |
Ratio of net investment income to average net assets | | 3.20 | %† | | 3.48 | % | | 3.45 | % | | 3.36 | % | | 3.30 | % | | 3.23 | % |
Portfolio turnover rate | | 9.20 | % | | 18.37 | % | | 5.12 | % | | — | | | — | | | 12.51 | % |
Without management fee waiver:* | | | | | | | | | | | | | | | | | | |
Ratio of expenses to average net assets | | 1.96 | %† | | 1.89 | % | | 1.90 | % | | 1.88 | % | | 1.89 | % | | 1.90 | % |
Ratio of net investment income to average net assets | | 3.05 | %† | | 3.33 | % | | 3.30 | % | | 3.21 | % | | 3.15 | % | | 3.08 | % |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.67 | | $ | 7.79 | | $ | 7.93 | | $ | 8.02 | | $ | 8.10 | | $ | 8.10 | |
Income from Investment Operations: |
Net investment income | | 0.12 | | | 0.27 | | | 0.27 | | | 0.27 | | | 0.26 | | | 0.26 | |
Net realized and unrealized gain (loss) on investments | | (0.09 | ) | | (0.12 | ) | | (0.09 | ) | | (0.09 | ) | | (0.06 | ) | | 0.01 | |
Total from Investment Operations | | 0.03 | | | 0.15 | | | 0.18 | | | 0.18 | | | 0.20 | | | 0.27 | |
Less Distributions: |
Dividends from net investment income | | (0.11 | ) | | (0.26 | ) | | (0.27 | ) | | (0.26 | ) | | (0.26 | ) | | (0.26 | ) |
Distributions from net realized capital gain | | (0.09 | ) | | (0.01 | ) | | (0.05 | ) | | (0.01 | ) | | (0.02 | ) | | (0.01 | ) |
Total Distributions | | (0.20 | ) | | (0.27 | ) | | (0.32 | ) | | (0.27 | ) | | (0.28 | ) | | (0.27 | ) |
Net Asset Value, End of Period | $ | 7.50 | | $ | 7.67 | | $ | 7.79 | | $ | 7.93 | | $ | 8.02 | | $ | 8.10 | |
Total Return | | 0.41 | % | | 1.98 | % | | 2.22 | % | | 2.27 | % | | 2.48 | % | | 3.37 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 969 | | $ | 1,011 | | $ | 1,164 | | $ | 1,176 | | $ | 1,351 | | $ | 1,567 | |
Ratio of expenses to average net assets | | 1.80 | %† | | 1.74 | % | | 1.75 | % | | 1.73 | % | | 1.74 | % | | 1.75 | % |
Ratio of net investment income to average net assets | | 3.20 | %† | | 3.48 | % | | 3.45 | % | | 3.36 | % | | 3.30 | % | | 3.23 | % |
Portfolio turnover rate | | 9.20 | % | | 18.37 | % | | 5.12 | % | | — | | | — | | | 12.51 | % |
Without management fee waiver:* | | | | | | | | | | | | | | | | | | |
Ratio of expenses to average net assets | | 1.96 | %† | | 1.89 | % | | 1.90 | % | | 1.88 | % | | 1.89 | % | | 1.90 | % |
Ratio of net investment income to average net assets | | 3.05 | %† | | 3.33 | % | | 3.30 | % | | 3.21 | % | | 3.15 | % | | 3.08 | % |
| | |
See footnotes on page 36. |
31
Financial Highlights (unaudited) |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.68 | | $ | 7.86 | | $ | 7.94 | | $ | 8.05 | | $ | 8.14 | | $ | 8.19 | |
Income from Investment Operations: |
Net investment income | | 0.13 | | | 0.27 | | | 0.27 | | | 0.29 | | | 0.29 | | | 0.29 | |
Net realized and unrealized loss on investments | | (0.03 | ) | | (0.12 | ) | | (0.02 | ) | | (0.10 | ) | | (0.07 | ) | | (0.01 | ) |
Total from Investment Operations | | 0.10 | | | 0.15 | | | 0.25 | | | 0.19 | | | 0.22 | | | 0.28 | |
Less Distributions: |
Dividends from net investment income | | (0.13 | ) | | (0.26 | ) | | (0.27 | ) | | (0.28 | ) | | (0.28 | ) | | (0.29 | ) |
Distributions from net realized capital gain | | — | | | (0.07 | ) | | (0.06 | ) | | (0.02 | ) | | (0.03 | ) | | (0.04 | ) |
Total Distributions | | (0.13 | ) | | (0.33 | ) | | (0.33 | ) | | (0.30 | ) | | (0.31 | ) | | (0.33 | ) |
Net Asset Value, End of Period | $ | 7.65 | | $ | 7.68 | | $ | 7.86 | | $ | 7.94 | | $ | 8.05 | | $ | 8.14 | |
Total Return | | 1.25 | % | | 1.95 | % | | 3.14 | % | | 2.45 | % | | 2.82 | % | | 3.51 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 12,578 | | $ | 12,799 | | $ | 15,471 | | $ | 16,781 | | $ | 19,856 | | $ | 22,778 | |
Ratio of expenses to average net assets | | 1.38 | %† | | 1.29 | % | | 1.28 | % | | 1.24 | % | | 1.19 | % | | 1.19 | % |
Ratio of net investment income to average net assets | | 3.38 | %† | | 3.46 | % | | 3.51 | % | | 3.60 | % | | 3.55 | % | | 3.65 | % |
Portfolio turnover rate | | — | | | 5.17 | % | | 29.32 | % | | — | | | 7.93 | % | | 10.00 | % |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.67 | | $ | 7.86 | | $ | 7.94 | | $ | 8.04 | | $ | 8.13 | | $ | 8.18 | |
Income from Investment Operations: |
Net investment income | | 0.10 | | | 0.21 | | | 0.22 | | | 0.23 | | | 0.22 | | | 0.23 | |
Net realized and unrealized loss on investments | | (0.03 | ) | | (0.13 | ) | | (0.03 | ) | | (0.09 | ) | | (0.06 | ) | | (0.01 | ) |
Total from Investment Operations | | 0.07 | | | 0.08 | | | 0.19 | | | 0.14 | | | 0.16 | | | 0.22 | |
Less Distributions: |
Dividends from net investment income | | (0.09 | ) | | (0.20 | ) | | (0.21 | ) | | (0.22 | ) | | (0.22 | ) | | (0.23 | ) |
Distributions from net realized capital gain | | — | | | (0.07 | ) | | (0.06 | ) | | (0.02 | ) | | (0.03 | ) | | (0.04 | ) |
Total Distributions | | (0.09 | ) | | (0.27 | ) | | (0.27 | ) | | (0.24 | ) | | (0.25 | ) | | (0.27 | ) |
Net Asset Value, End of Period | $ | 7.65 | | $ | 7.67 | | $ | 7.86 | | $ | 7.94 | | $ | 8.04 | | $ | 8.13 | |
Total Return | | 0.94 | % | | 1.06 | % | | 2.37 | % | | 1.82 | % | | 2.06 | % | | 2.74 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 448 | | $ | 471 | | $ | 1,142 | | $ | 1,414 | | $ | 3,012 | | $ | 2,778 | |
Ratio of expenses to average net assets | | 2.13 | %† | | 2.04 | % | | 2.03 | % | | 1.99 | % | | 1.94 | % | | 1.94 | % |
Ratio of net investment income to average net assets | | 2.63 | %† | | 2.71 | % | | 2.76 | % | | 2.85 | % | | 2.80 | % | | 2.90 | % |
Portfolio turnover rate | | — | | | 5.17 | % | | 29.32 | % | | — | | | 7.93 | % | | 10.00 | % |
| | |
See footnotes on page 36. |
32
Financial Highlights (unaudited) |
North Carolina Fund (continued) |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.66 | | $ | 7.85 | | $ | 7.93 | | $ | 8.04 | | $ | 8.13 | | $ | 8.18 | |
Income from Investment Operations: |
Net investment income | | 0.10 | | | 0.21 | | | 0.22 | | | 0.23 | | | 0.22 | | | 0.23 | |
Net realized and unrealized loss on investments | | (0.02 | ) | | (0.13 | ) | | (0.03 | ) | | (0.10 | ) | �� | (0.06 | ) | | (0.01 | ) |
Total from Investment Operations | | 0.08 | | | 0.08 | | | 0.19 | | | 0.13 | | | 0.16 | | | 0.22 | |
Less Distributions: |
Dividends from net investment income | | (0.09 | ) | | (0.20 | ) | | (0.21 | ) | | (0.22 | ) | | (0.22 | ) | | (0.23 | ) |
Distributions from net realized capital gain | | — | | | (0.07 | ) | | (0.06 | ) | | (0.02 | ) | | (0.03 | ) | | (0.04 | ) |
Total Distributions | | (0.09 | ) | | (0.27 | ) | | (0.27 | ) | | (0.24 | ) | | (0.25 | ) | | (0.27 | ) |
Net Asset Value, End of Period | $ | 7.65 | | $ | 7.66 | | $ | 7.85 | | $ | 7.93 | | $ | 8.04 | | $ | 8.13 | |
Total Return | | 1.07 | % | | 1.06 | % | | 2.37 | % | | 1.69 | % | | 2.06 | % | | 2.74 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 477 | | $ | 487 | | $ | 517 | | $ | 532 | | $ | 706 | | $ | 824 | |
Ratio of expenses to average net assets | | 2.13 | %† | | 2.04 | % | | 2.03 | % | | 1.99 | % | | 1.94 | % | | 1.94 | % |
Ratio of net investment income to average net assets | | 2.63 | %† | | 2.71 | % | | 2.76 | % | | 2.85 | % | | 2.80 | % | | 2.90 | % |
Portfolio turnover rate | | — | | | 5.17 | % | | 29.32 | % | | — | | | 7.93 | % | | 10.00 | % |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.28 | | $ | 7.37 | | $ | 7.49 | | $ | 7.54 | | $ | 7.60 | | $ | 7.65 | |
Income from Investment Operations: |
Net investment income | | 0.14 | | | 0.29 | | | 0.30 | | | 0.30 | | | 0.29 | | | 0.29 | |
Net realized and unrealized loss on investments | | (0.10 | ) | | (0.07 | ) | | (0.08 | ) | | (0.04 | ) | | (0.05 | ) | | (0.04 | ) |
Total from Investment Operations | | 0.04 | | | 0.22 | | | 0.22 | | | 0.26 | | | 0.24 | | | 0.25 | |
Less Distributions: |
Dividends from net investment income | | (0.14 | ) | | (0.29 | ) | | (0.30 | ) | | (0.30 | ) | | (0.29 | ) | | (0.29 | ) |
Distributions from net realized capital gain | | (0.04 | ) | | (0.02 | ) | | (0.04 | ) | | (0.01 | ) | | (0.01 | ) | | (0.01 | ) |
Total Distributions | | (0.18 | ) | | (0.31 | ) | | (0.34 | ) | | (0.31 | ) | | (0.30 | ) | | (0.30 | ) |
Net Asset Value, End of Period | $ | 7.14 | | $ | 7.28 | | $ | 7.37 | | $ | 7.49 | | $ | 7.54 | | $ | 7.60 | |
Total Return | | 0.41 | % | | 3.04 | % | | 2.99 | % | | 3.40 | % | | 3.28 | % | | 3.34 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 29,168 | | $ | 30,619 | | $ | 32,449 | | $ | 35,209 | | $ | 43,324 | | $ | 46,610 | |
Ratio of expenses to average net assets | | 1.23 | %† | | 1.17 | % | | 1.15 | % | | 1.20 | % | | 1.13 | % | | 1.13 | % |
Ratio of net investment income to average net assets | | 3.74 | %† | | 4.00 | % | | 4.03 | % | | 3.95 | % | | 3.91 | % | | 3.82 | % |
Portfolio turnover rate | | 3.54 | % | | 21.67 | % | | 4.39 | % | | 2.53 | % | | — | | | 4.39 | % |
| | |
See footnotes on page 36. |
33
Financial Highlights (unaudited) |
New Jersey Fund (continued) |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.38 | | $ | 7.47 | | $ | 7.59 | | $ | 7.64 | | $ | 7.69 | | $ | 7.74 | |
Income from Investment Operations: |
Net investment income | | 0.11 | | | 0.24 | | | 0.24 | | | 0.24 | | | 0.24 | | | 0.23 | |
Net realized and unrealized loss on investments | | (0.10 | ) | | (0.08 | ) | | (0.08 | ) | | (0.04 | ) | | (0.04 | ) | | (0.04 | ) |
Total from Investment Operations | | 0.01 | | | 0.16 | | | 0.16 | | | 0.20 | | | 0.20 | | | 0.19 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.23 | ) | | (0.24 | ) | | (0.24 | ) | | (0.24 | ) | | (0.23 | ) |
Distributions from net realized capital gain | | (0.04 | ) | | (0.02 | ) | | (0.04 | ) | | (0.01 | ) | | (0.01 | ) | | (0.01 | ) |
Total Distributions | | (0.14 | ) | | (0.25 | ) | | (0.28 | ) | | (0.25 | ) | | (0.25 | ) | | (0.24 | ) |
Net Asset Value, End of Period | $ | 7.25 | | $ | 7.38 | | $ | 7.47 | | $ | 7.59 | | $ | 7.64 | | $ | 7.69 | |
Total Return | | 0.09 | % | | 2.22 | % | | 2.17 | % | | 2.57 | % | | 2.58 | % | | 2.52 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 2,261 | | $ | 2,435 | | $ | 3,289 | | $ | 3,453 | | $ | 3,659 | | $ | 5,271 | |
Ratio of expenses to average net assets | | 1.98 | %† | | 1.92 | % | | 1.91 | % | | 1.96 | % | | 1.90 | % | | 1.90 | % |
Ratio of net investment income to average net assets | | 2.99 | %† | | 3.25 | % | | 3.28 | % | | 3.19 | % | | 3.14 | % | | 3.05 | % |
Portfolio turnover rate | | 3.54 | % | | 21.67 | % | | 4.39 | % | | 2.53 | % | | — | | | 4.39 | % |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.38 | | $ | 7.47 | | $ | 7.59 | | $ | 7.64 | | $ | 7.69 | | $ | 7.74 | |
Income from Investment Operations: |
Net investment income | | 0.11 | | | 0.24 | | | 0.24 | | | 0.24 | | | 0.24 | | | 0.23 | |
Net realized and unrealized loss on investments | | (0.10 | ) | | (0.08 | ) | | (0.08 | ) | | (0.04 | ) | | (0.04 | ) | | (0.04 | ) |
Total from Investment Operations | | 0.01 | | | 0.16 | | | 0.16 | | | 0.20 | | | 0.20 | | | 0.19 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.23 | ) | | (0.24 | ) | | (0.24 | ) | | (0.24 | ) | | (0.23 | ) |
Distributions from net realized capital gain | | (0.04 | ) | | (0.02 | ) | | (0.04 | ) | | (0.01 | ) | | (0.01 | ) | | (0.01 | ) |
Total Distributions | | (0.14 | ) | | (0.25 | ) | | (0.28 | ) | | (0.25 | ) | | (0.25 | ) | | (0.24 | ) |
Net Asset Value, End of Period | $ | 7.25 | | $ | 7.38 | | $ | 7.47 | | $ | 7.59 | | $ | 7.64 | | $ | 7.69 | |
Total Return | | 0.09 | % | | 2.22 | % | | 2.17 | % | | 2.57 | % | | 2.58 | % | | 2.52 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 928 | | $ | 836 | | $ | 864 | | $ | 920 | | $ | 1,002 | | $ | 1,299 | |
Ratio of expenses to average net assets | | 1.98 | %† | | 1.92 | % | | 1.91 | % | | 1.96 | % | | 1.90 | % | | 1.90 | % |
Ratio of net investment income to average net assets | | 2.99 | %† | | 3.25 | % | | 3.28 | % | | 3.19 | % | | 3.14 | % | | 3.05 | % |
Portfolio turnover rate | | 3.54 | % | | 21.67 | % | | 4.39 | % | | 2.53 | % | | — | | | 4.39 | % |
| | |
See footnotes on page 36. |
34
Financial Highlights (unaudited) |
| Six Months | | Year Ended September 30, | |
---|
Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
---|
Net Asset Value, Beginning of Period | $ | 7.72 | | $ | 7.84 | | $ | 7.93 | | $ | 8.03 | | $ | 8.09 | | $ | 8.26 | |
Income from Investment Operations: |
Net investment income | | 0.13 | | | 0.27 | | | 0.27 | | | 0.28 | | | 0.27 | | | 0.27 | |
Net realized and unrealized loss on investments | | (0.06 | ) | | (0.14 | ) | | (0.04 | ) | | (0.10 | ) | | (0.05 | ) | | (0.08 | ) | |
Total from Investment Operations | | 0.07 | | | 0.13 | | | 0.23 | | | 0.18 | | | 0.22 | | | 0.19 | |
Less Distributions: |
Dividends from net investment income | | (0.13 | ) | | (0.25 | ) | | (0.26 | ) | | (0.27 | ) | | (0.27 | ) | | (0.27 | ) |
Distributions from net realized capital gain | | — | | | — | | | (0.06 | ) | | (0.01 | ) | | (0.01 | ) | | (0.09 | ) |
Total Distributions | | (0.13 | ) | | (0.25 | ) | | (0.32 | ) | | (0.28 | ) | | (0.28 | ) | | (0.36 | ) |
Net Asset Value, End of Period | $ | 7.66 | | $ | 7.72 | | $ | 7.84 | | $ | 7.93 | | $ | 8.03 | | $ | 8.09 | |
Total Return | | 0.94 | % | | 1.69 | % | | 3.02 | % | | 2.34 | % | | 2.72 | % | | 2.37 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 13,712 | | $ | 14,428 | | $ | 16,906 | | $ | 18,548 | | $ | 19,721 | | $ | 22,354 | |
Ratio of expenses to average net assets | | 1.48 | %† | | 1.35 | % | | 1.43 | % | | 1.48 | % | | 1.36 | % | | 1.30 | % |
Ratio of net investment income to average net assets | | 3.45 | %† | | 3.50 | % | | 3.45 | % | | 3.54 | % | | 3.32 | % | | 3.38 | % |
Portfolio turnover rate | | 4.13 | % | | — | | | 2.98 | % | | 18.95 | % | | 5.34 | % | | 8.30 | % |
| Six Months | | Year Ended September 30, | |
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Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
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Net Asset Value, Beginning of Period | $ | 7.70 | | $ | 7.82 | | $ | 7.91 | | $ | 8.01 | | $ | 8.07 | | $ | 8.24 | |
Income from Investment Operations: |
Net investment income | | 0.10 | | | 0.21 | | | 0.21 | | | 0.22 | | | 0.21 | | | 0.21 | |
Net realized and unrealized loss on investments | | (0.06 | ) | | (0.14 | ) | | (0.04 | ) | | (0.10 | ) | | (0.05 | ) | | (0.08 | ) |
Total from Investment Operations | | 0.04 | | | 0.07 | | | 0.17 | | | 0.12 | | | 0.16 | | | 0.13 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.19 | ) | | (0.20 | ) | | (0.21 | ) | | (0.21 | ) | | (0.21 | ) |
Distributions from net realized capital gain | | — | | | — | | | (0.06 | ) | | (0.01 | ) | | (0.01 | ) | | (0.09 | ) |
Total Distributions | | (0.10 | ) | | (0.19 | ) | | (0.26 | ) | | (0.22 | ) | | (0.22 | ) | | (0.30 | ) |
Net Asset Value, End of Period | $ | 7.64 | | $ | 7.70 | | $ | 7.82 | | $ | 7.91 | | $ | 8.01 | | $ | 8.07 | |
Total Return | | 0.49 | % | | 0.94 | % | | 2.26 | % | | 1.58 | % | | 1.96 | % | | 1.60 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 574 | | $ | 557 | | $ | 785 | | $ | 913 | | $ | 1,100 | | $ | 1,133 | |
Ratio of expenses to average net assets | | 2.24 | %† | | 2.11 | % | | 2.18 | % | | 2.23 | % | | 2.11 | % | | 2.05 | % |
Ratio of net investment income to average net assets | | 2.69 | %† | | 2.74 | % | | 2.70 | % | | 2.79 | % | | 2.57 | % | | 2.63 | % |
Portfolio turnover rate | | 4.13 | % | | — | | | 2.98 | % | | 18.95 | % | | 5.34 | % | | 8.30 | % |
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See footnotes on page 36. |
35
Financial Highlights (unaudited) |
Pennsylvania Fund (continued) |
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| Six Months | | Year Ended September 30, | |
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Per Share Data: | Ended 3/31/08 | | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
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Net Asset Value, Beginning of Period | $ | 7.70 | | $ | 7.82 | | $ | 7.91 | | $ | 8.01 | | $ | 8.07 | | $ | 8.24 | |
Income from Investment Operations: |
Net investment income | | 0.10 | | | 0.21 | | | 0.21 | | | 0.22 | | | 0.21 | | | 0.21 | |
Net realized and unrealized loss on investments | | (0.06 | ) | | (0.14 | ) | | (0.04 | ) | | (0.10 | ) | | (0.05 | ) | | (0.08 | ) | |
Total from Investment Operations | | 0.04 | | | 0.07 | | | 0.17 | | | 0.12 | | | 0.16 | | | 0.13 | |
Less Distributions: |
Dividends from net investment income | | (0.10 | ) | | (0.19 | ) | | (0.20 | ) | | (0.21 | ) | | (0.21 | ) | | (0.21 | ) |
Distributions from net realized capital gain | | — | | | — | | | (0.06 | ) | | (0.01 | ) | | (0.01 | ) | | (0.09 | ) |
Total Distributions | | (0.10 | ) | | (0.19 | ) | | (0.26 | ) | | (0.22 | ) | | (0.22 | ) | | (0.30 | ) |
Net Asset Value, End of Period | $ | 7.64 | | $ | 7.70 | | $ | 7.82 | | $ | 7.91 | | $ | 8.01 | | $ | 8.07 | |
Total Return | | 0.49 | % | | 0.94 | % | | 2.26 | % | | 1.58 | % | | 1.96 | % | | 1.60 | % |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000s omitted) | $ | 422 | | $ | 430 | | $ | 460 | | $ | 490 | | $ | 556 | | $ | 624 | |
Ratio of expenses to average net assets | | 2.24 | %† | | 2.11 | % | | 2.18 | % | | 2.23 | % | | 2.11 | % | | 2.05 | % |
Ratio of net investment income to average net assets | | 2.69 | %† | | 2.74 | % | | 2.70 | % | | 2.79 | % | | 2.57 | % | | 2.63 | % |
Portfolio turnover rate | | 4.13 | % | | — | | | 2.98 | % | | 18.95 | % | | 5.34 | % | | 8.30 | % |
† | | Annualized. |
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* | | During the periods stated, the Manager, at its discretion, waived portions of its management fees for California High-Yield Fund and Florida Fund (Note 3). |
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See Notes to Financial Statements. |
36
Matters Relating to the Directors’/Trustees’ Consideration of the Continuance of the Management Agreements |
In the discussion below, the term “Fund” refers to Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc. and Seligman Pennsylvania Municipal Fund Series and the term “Series” refers to Seligman New Jersey Municipal Fund, Inc., Seligman Pennsylvania Municipal Fund Series and the California High-Yield Fund, the California Quality Fund, the Florida Fund, and the North Carolina Fund of Seligman Municipal Series Trust. References to the “directors” includes the directors of Seligman New Jersey Municipal Fund, Inc., the trustees of Seligman Pennsylvania Municipal Fund Series, and the trustees of Seligman Municipal Series Trust. The directors of the Funds unanimously approved the continuance of the applicable Management Agreement between each Fund (and each Series) and the Manager, at a meeting held on November 15, 2007. Prior to their approval of the continuances of the Management Agreements, the directors requested and evaluated extensive materials from the Manager. They reviewed the proposed continuances of the Management Agreements with the Manager and with experienced counsel who advised on the legal standards for their consideration. The independent directors also discussed the proposed continuances in a private session with counsel. The directors considered their knowledge of the nature and quality of the services provided by the Manager to the Series gained from their experience as directors or trustees of each fund in the Seligman Group of Funds, their overall confidence in the Manager’s integrity and competence gained from that experience, the Manager’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Manager’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the Seligman Group of Funds. The directors noted that the Board has six regular meetings each year, at each of which they receive presentations from the Manager on the investment results of the Series and review extensive materials and information presented by the Manager. The directors also considered all other factors they believed relevant, including the specific matters discussed below. In their deliberations, the directors did not identify any particular information that was all-important or controlling, and directors may have attributed different weights to the various factors. The directors determined that the selection of the Manager to manage the Funds (and each Series), and the overall arrangements between each Fund (and each Series) and the Manager as provided in the Management Agreements, including the management fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant. The material factors and conclusions that formed the basis for the directors’ determination included the following: |
Nature, Extent and Quality of Services Provided |
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The directors considered the scope and quality of services provided by the Manager. The directors considered the quality of the investment research capabilities of the Manager and the other resources it has dedicated to performing services for the Funds (and each Series). They also noted the professional experience and qualifications of the Funds’ portfolio management team and other senior personnel of the Manager. The directors also considered the Manager’s selection of dealers for portfolio transactions and noted that they receive regular reports from the Manager concerning such selection. The quality of administrative and other services, including the Manager’s role in coordinating the activities of the Funds’ other service providers, also was considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided to each Fund (and each Series) under the Management Agreements. On an ongoing basis, the Manager reports to the directors on the status of various matters described in the Funds’ prospectus relating to market timing activity, allegations of excessive fees and related matters for certain funds in the Seligman Group of Funds. In connection with the continuance review, the Manager provided an update on those matters. After discussion with the Manager, the Manager’s counsel, the directors’ special counsel and other counsel independent of the Manager, and consideration of the potential consequences of the various matters, the independent directors concluded that they retained confidence in the integrity of the Manager and its ability to provide management services to the Funds (and each Series). |
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Costs of Services Provided and Profitability |
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The directors reviewed information on profitability of the Manager’s investment advisory and investment company activities and its financial condition based on historical information and estimates for the current year, as well as historical and estimated profitability data for the Series. The directors reviewed with the Manager’s Chief Financial Officer the assumptions and methods of allocation used by the Manager in preparing the profitability data. The directors recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors. In reviewing profitability information, the directors considered the effect of fall-out benefits on the Manager’s expenses, as well as the “revenue sharing” arrangements the Manager has entered into with certain entities that distribute shares of the Seligman Group of Funds. The directors focused on profitability of the Manager’s relationships with the Series before taxes and distribution expenses. The directors concluded that they were satisfied that the Manager’s level of profitability from the relationship with each Series was not excessive. Fall-Out Benefits The directors considered that a broker-dealer affiliate of the Manager receives 12b-1 fees from the Series in respect of shares held in certain accounts, and that the Funds’ distributor (another affiliate of the Manager) retains a portion of the 12b-1 fees from the Series and receives a portion of the sales charges on sales or redemptions of certain classes of shares. The directors recognized that the Manager’s profitability would be somewhat lower without these benefits. The directors noted that the Manager may derive reputational and other benefits from its association with the Series. |
37
Matters Relating to the Directors’/Trustees’ Consideration of the Continuance of the Management Agreements Investment Results The directors receive and review detailed performance information on each Series at each regular Board meeting during the year in addition to the information received for the meeting regarding the continuance of the Management Agreements. At the meeting, the directors reviewed performance information for the first nine months of 2007, the preceding seven calendar years and annualized rolling one-, three-, five-, and 10-year periods ending September 30, 2007. For each of those periods, the directors reviewed information comparing each Series to other funds in its Lipper category, and for most of the periods they also reviewed the performance of each Series to a group of competitor funds selected by the Manager. The directors also reviewed information about portfolio turnover rates of each Series compared to other investment companies with similar investment objectives. The Manager explained that the Manager’s decision to defensively position the Series’ portfolios in anticipation of rising interest rates contributed to the recent improvement in performance, although the Manager noted that such position had hurt the Series’ performance in the past. The following factors specific to individual Series also were noted and considered by the directors in deciding to approve the continuation of the Management Agreements: California High-Yield Fund. The directors reviewed information showing the performance of the Series compared to the Lipper California Municipal Debt Funds Average and the Lehman Brothers Municipal Bond Index, as well as performance relative to the other funds in the Lipper California Municipal Debt Funds Average and to a group of competitor funds selected by the Manager. They noted that the Series’ performance ranked above the Lipper median for each of the one-, three-, five- and ten-year periods. The directors also noted that the Series’ results had varyingly exceeded or underperformed its benchmarks for the periods presented, had shown recent improvement and were above each of the Series’ benchmarks for the first nine months of 2007. Taking into account these comparisons and the other factors considered, the directors concluded that the California High-Yield Fund’s investment results were satisfactory. California Quality Fund. The directors reviewed information showing the performance of the Series compared to the Lipper California Municipal Debt Funds Average and the Lehman Brothers Municipal Bond Index, as well as performance relative to the other funds in the Lipper California Municipal Debt Funds Average and to a group of competitor funds selected by the Manager. The directors noted that the Series’ performance ranked above the Lipper median for the one-year period, but lagged the median in the other periods presented. The directors also noted that while the Series’ results had from time to time exceeded certain benchmarks, the Series’ results were generally below its benchmarks by varying degrees for the periods shown. The directors further noted that the Series’ results had shown recent improvement and were above its competitor average and Lipper benchmark for the first nine months of 2007. Taking into account t hese comparisons and the other factors considered, the directors concluded that the California Quality Fund’s investment results were satisfactory. Florida Fund. The directors reviewed information showing the performance of the Series compared to the Lipper Florida Municipal Debt Funds Average and the Lehman Brothers Municipal Bond Index, as well as performance relative to the other funds in the Lipper Florida Municipal Debt Funds Average and to a group of competitor funds selected by the Manager. The directors noted that the Series had shown significant recent improvement, with the Series’ results above each of its benchmarks for the first nine months of 2007 and the Series ranking above the Lipper median in the one-year period presented. The directors also noted that while the Series’ results had from time to time exceeded certain benchmarks, the Series’ results were generally below its benchmarks by varying degrees for the other periods shown. Taking into account these comparisons and the other factors considered, the directors concluded that the Florida Fund’s investment results were satisfactory. New Jersey Fund. The directors reviewed information showing the performance of the Series compared to the Lipper New Jersey Municipal Debt Funds Average and the Lehman Brothers Municipal Bond Index, as well as performance relative to the other funds in the Lipper New Jersey Municipal Debt Funds Average and to a group of competitor funds selected by the Manager. The directors noted that the Series’ results had shown recent improvement and were above each of its benchmarks for the first nine months of 2007 and that the Series’ performance ranked above the Lipper median for the one-year period presented. The directors also noted that while the Series’ results had from time to time exceeded certain benchmarks, the Series’ results were generally below its benchmarks by varying degrees for the periods shown. Taking into account these comparisons and the other factors considered, the directors concluded that the New Jersey Fund’s investment results were satisfactory. North Carolina Fund. The directors reviewed information showing the performance of the Series compared to the Lipper North Carolina Municipal Debt Funds Average and the Lehman Brothers Municipal Bond Index, as well as performance relative to the other funds in the Lipper North Carolina Municipal Debt Funds Average and to a group of competitor funds selected by the Manager. The directors noted that the Series’ results had shown recent improvement and were above its competitor average and Lipper benchmarks for the first nine months of 2007 and that the Series’ performance ranked above the Lipper median for the one-year period presented. The directors also noted that the Series’ results fell varyingly above and below its other benchmarks for the other periods presented. Taking into account these comparisons and the other factors considered, the directors concluded that the North Carolina Fund’s investment results were satisfactory. |
38
Matters Relating to the Directors’/Trustees’ Consideration of the Continuance of the Management Agreements Pennsylvania Fund. The directors reviewed information showing the performance of the Series’ compared to the Lipper Pennsylvania Municipal Debt Funds Average and the Lehman Brothers Municipal Bond Index, as well as performance relative to the other funds in the Lipper Pennsylvania Municipal Debt Funds Average and to a group of competitor funds selected by the Manager. The directors noted that the Series’ results had shown recent improvement and were above its competitor average and Lipper benchmark for the first nine months of 2007. The directors also noted, however, that the Series’ results were generally below its benchmarks by varying degrees for most of the other periods presented. Taking into account these comparisons, the other factors considered and the recent improvement in relative performance, the directors concluded that they retained confidence in the Manager’s capabilities to manage the Pennsylvania Fund. Management Fees and Other Expenses The directors considered the management fee rate paid by each Series to the Manager. The peer group for each Series consisted of all funds in its Lipper category. The directors noted that each Series’ management fee rate was less than or equal to both the average and the median for its peer group, other than the Florida Fund (whose management fee rate was slightly higher than the average and median for its peer group). The directors also reviewed each Series’ total expense ratio for the most recent fiscal year, as compared to the expense ratios for other funds in its peer group. The directors noted that the expense ratios for the California High-Yield Fund and California Quality Fund were slightly or somewhat above the median and average of their respective peer groups. The Manager explained that the higher expense ratios of each of these Series were principally a function of their small sizes relative to the funds in their respective peer group. The directors concluded that the expense ratios of these Series were satisfactory. The comparative information showed that the Florida Fund’s expense ratio was significantly higher than the peer group median and average and was the highest in its peer group. The Manager explained that the Florida Fund’s small size relative to the funds in its peer group contributed to its relatively high expense ratio. All of the peer group funds were significantly larger than the Florida Fund. On the basis of this review, the directors concluded that the Florida Fund’s expense ratio was acceptable. The comparative information showed that the New Jersey Fund’s expense ratio was significantly higher than the peer group median and average and the second highest in its peer group. The Manager explained that the New Jersey Fund’s small size relative to the funds in its peer group contributed to its relatively high expense ratio. All of the peer group funds were larger than the New Jersey Fund. On the basis of this review, the directors concluded that the New Jersey Fund’s expense ratio was acceptable. The comparative information showed that the North Carolina Fund’s expense ratio was significantly higher than the peer group median and average and the highest in its peer group. The Manager explained that the North Carolina Fund’s small size relative to the funds in its peer group contributed to its relatively high expense ratio. All of the peer group funds were larger than the North Carolina Fund. On the basis of this review, the directors concluded that the North Carolina Fund’s expense ratio was acceptable. The comparative information showed that the Pennsylvania Fund’s expense ratio was significantly higher than the peer group median and average and the highest in its peer group, and would have been the highest even if other peer group funds had not benefited from reimbursements by their advisers. The Manager explained that the Pennsylvania Fund’s small size relative to the funds in its peer group contributed to its relatively high expense ratio, and that no fund in the peer group was smaller than the Pennsylvania Fund. The Manager also explained that the Pennsylvania Fund was organized as a Pennsylvania trust and had no other series, as a result of which the Pennsylvania Fund was unable to allocate certain expenses over multiple series as could most of the other municipal funds in the Seligman Group of Funds. On the basis of their review, the directors concluded that the Pennsylvania Fund’s expense ratio was acceptable. Economies of Scale The directors noted that the management fee schedules for the Series do not contain breakpoints that reduce the fee rate on assets above specified levels. The directors recognized that there is no direct relationship between the economies of scale realized by funds and those realized by their investment adviser as assets increase. The directors do not believe that there is a uniform methodology for establishing breakpoints that give effect to fund specific services provided by the Manager. The directors also observed that in the investment company industry as a whole, as well as among funds similar to the Series, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply, and that the advisory agreements for many competitor funds do not have breakpoints at all. The directors noted that the management fee for each Series was at or below that of the applicable Lipper mean and median and that each Series was relatively small and had been so for many years, making the realization of economies of scale unlikely in the near future. Having taken these factors into account, the directors concluded that the absence of breakpoints in each Series’ fee rate schedule was acceptable. |
39
Board of Directors/Trustees |
• | Head of School, The Masters School |
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• | Trustee, New York State Association of Independent Schools and Greens Farms Academy |
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• | Commissioner, Middle States Association |
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• | Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts University |
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• | Chairman Emeritus, American Council on Germany |
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• | Retired President and Chief Executive Officer, and former Director, Great Western Financial Corporation and its principal subsidiary, Great Western Bank |
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• | Retired Chairman of the Board and Chief Executive Officer, Kerr-McGee Corporation |
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• | Director, DCP Midstream GP, LLP, Integris Health, Oklahoma Medical Research Foundation, Oklahoma Foundation for Excellence in Education, National Cowboy and Western Heritage Museum, and Oklahoma City Museum of Art |
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• | Attorney |
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• | Trustee, The Geraldine R. Dodge Foundation and Drew University |
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• | Chairman and Director, J. & W. Seligman & Co. Incorporated, Carbo Ceramics Inc., Seligman Advisors, Inc. and Seligman Services, Inc. |
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• | Director, Seligman Data Corp. |
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• | President and Chief Executive Officer, The Metropolitan Opera Association |
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• | Counsel, Lewis & Munday, P.C. |
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• | Director, Vibration Control Technologies, LLC and OGE Energy Corp. |
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• | Lead Outside Director, Digital Ally Inc. and Infinity, Inc. |
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• | Director and Chairman, Highland Park Michigan Economic Development Corp. |
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• | Chairman, Detroit Public Schools Foundation |
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• | Ambassador and Permanent Observer of the Sovereign Military Order of Malta to the United Nations |
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• | Retired Executive Vice President and Chief Operating Officer, Sammons Enterprises, Inc. |
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• | Director, CommScope, Inc. |
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• | Director and President, J. & W. Seligman & Co. Incorporated |
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• | Chairman, Seligman Data Corp. |
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• | Director, Seligman Advisors, Inc. and Seligman Services, Inc. |
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• | Member of the Board of Governors, Investment Company Institute |
Member: | 1 | Audit Committee |
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| 2 | Director/Trustee Nominating Committee |
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| 3 | Board Operations Committee |
William C. Morris | | Thomas G. Moles |
Chairman | | Vice President |
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Brian T. Zino | | Thomas G. Rose |
President and Chief Executive Officer | | Vice President |
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Eileen A. Comerford | | Lawrence P. Vogel |
Vice President | | Vice President and Treasurer |
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Eleanor T.M. Hoagland | | Frank J. Nasta |
Vice President and Chief Compliance Officer | | Secretary |
40
Additional Fund Information |
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Quarterly Schedule of Investments A complete schedule of portfolio holdings owned by the Funds will be filed with the SEC for the first and third quarters of each fiscal year on Form N-Q, and will be available to shareholders (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US or (ii) on the SEC’s website at www.sec.gov.1 In addition, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Certain of the information contained on the Fund’s Form N-Q is also made available to shareholders on Seligman’s website at www.seligman.com.1 Proxy Voting A description of the policies and procedures used by the Funds to determine how to vote proxies relating to portfolio securities, as well as information regarding how the Funds voted proxies relating to portfolio securities during the 12-month period ended June 30 of each year, will be available (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US and (ii) on the SEC’s website at www.sec.gov.1 Information for each new 12-month period ending June 30 will be available no later than August 31 of that year. |
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1 | | These website references are inactive textual references and information contained in or otherwise accessible through these websites does not form a part of this report or the Funds’ prospectus or statements of additional information. |
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| This report is intended only for the information of shareholders or those who have received the offering prospectus covering shares of Beneficial Interest/ Capital Stock of each fund of Seligman Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc. and Seligman Pennsylvania Municipal Fund Series, which contains information about the investment objectives, risks, charges and expenses of the Funds, each of which should be considered carefully before investing or sending money. | | TEB3 3/08 |
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Not applicable.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
(a) | Schedule I – Investments in securities of unaffiliated issuers. |
Included in Item 1 above.
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
Not applicable.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) The registrant’s principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and that such material
information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.
(b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
| (a)(2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
| (b) | Certifications of chief executive officer and chief financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SELIGMAN MUNICIPAL SERIES TRUST
By: | /S/ BRIAN T. ZINO
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| Brian T. Zino President and Chief Executive Officer | | |
Date: June 4, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /S/ BRIAN T. ZINO
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| Brian T. Zino President and Chief Executive Officer | | |
Date: June 4, 2008
By: | /S/ LAWRENCE P.VOGEL
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| Lawrence P. Vogel Vice President, Treasurer and Chief Financial Officer | | |
Date: June 4, 2008
SELIGMAN MUNICIPAL SERIES TRUST
EXHIBIT INDEX
(a)(2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
(b) | Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940. |