PROSPECTUS
March 2, 2009
Seligman
Global Fund Series, Inc.
Investing Around the World for Capital Appreciation
.. Seligman Emerging Markets Fund
.. Seligman Global Growth Fund
.. Seligman Global Smaller Companies Fund
.. Seligman Global Technology Fund
.. Seligman International Growth Fund
As with all mutual funds, the Securities and Exchange Commission has neither
approved nor disapproved these Funds, and it has not determined this Prospectus
to be accurate or adequate. Any representation to the contrary is a criminal
offense.
An investment in these Funds or any other fund cannot provide a complete
investment program. The suitability of an investment in a Fund should be
evaluated based on the investment objective, strategies and risks described in
this Prospectus, considered in light of all of the other investments in your
portfolio, as well as your risk tolerance, financial goals, and time horizons.
We recommend that you consult an authorized dealer or your financial advisor to
determine if one or more of these Funds is suitable for you.
Not FDIC Insured [_] May Lose Value [_] No Bank Guarantee
EQSGFS1 3/2009
[LOGO]
SELIGMAN
INVESTMENTS
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EXPERIENCE . INSIGHT . SOLUTIONS
Table of Contents
This Prospectus contains information about Seligman Global Fund Series, Inc.
(the "Series"), which consists of five separate funds.
THE FUNDS
A discussion of the investment objectives, strategies, risks, performance and expenses of the Funds.
Seligman Emerging Markets Fund................................................................. 1
Seligman Global Growth Fund.................................................................... 7
Seligman Global Smaller Companies Fund......................................................... 13
Seligman Global Technology Fund................................................................ 19
Seligman International Growth Fund............................................................. 25
Management of the Funds........................................................................ 31
Subadviser..................................................................................... 32
SHAREHOLDER INFORMATION
Deciding Which Class of Shares to Buy.......................................................... 36
Pricing of Fund Shares......................................................................... 41
Opening Your Account........................................................................... 42
How to Buy Additional Shares................................................................... 43
How to Exchange Shares Among the Seligman Mutual Funds......................................... 44
How to Sell Shares............................................................................. 44
Important Policies That May Affect Your Account................................................ 45
Frequent Trading of Fund Shares................................................................ 47
Dividends and Capital Gain Distributions....................................................... 48
Taxes.......................................................................................... 49
The Seligman Mutual Funds...................................................................... 51
Other Information.............................................................................. 54
FINANCIAL HIGHLIGHTS................................................................................. 57
HOW TO CONTACT US.................................................................................... 68
FOR MORE INFORMATION. back cover
The website references in this Prospectus are inactive textual references and
information contained in or otherwise accessible through these websites does
not form a part of this Prospectus.
Effective November 7, 2008, RiverSource Investments, LLC ("RiverSource
Investments"), investment manager to the RiverSource Group of Funds, and a
wholly owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"),
completed its acquisition (the "Acquisition") of J. & W. Seligman & Co.
Incorporated ("Seligman"). With the Acquisition completed and shareholders of
each of the Funds offered herein having previously approved (at a special
meeting held on November 3, 2008) a new investment management services
agreement between RiverSource Investments and the Series (on behalf of each
Fund), RiverSource Investments became the new investment manager of the Funds,
effective November 7, 2008. Shareholders of the Funds (other than Seligman
Global Technology Fund) also approved at the November meeting a subadvisory
agreement between RiverSource Investments and Wellington Management Company,
LLP.
RiverSource Complex of Funds
The RiverSource Group of Funds includes a comprehensive array of funds from
RiverSource Investments, including the Seligman funds. RiverSource Investments
has also partnered with a number of professional investment managers, including
its affiliate, Threadneedle Investments, to expand the array of funds offered
in the RiverSource complex. Although the Seligman funds share the same Board of
Directors/Trustees as the RiverSource funds (the "Board") they do not currently
have the same policies and procedures, and may not be exchanged for shares of
the RiverSource funds, RiverSource Partners funds or Threadneedle funds. For
example, for purposes of calculating the initial sales charge on the purchase
of Class A shares of a Seligman fund, for rights of accumulation purposes, an
investor or financial advisor may not include the market value of any
RiverSource funds, RiverSource Partners funds or Threadneedle funds in this
calculation. Please see the Statement of Additional Information (SAI) for a
complete list of mutual funds included in the RiverSource Group of Funds.
The Funds
Seligman Emerging Markets Fund
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On January 8, 2009, the Series' Board of Directors approved in principle the
merger of Seligman Emerging Markets Fund into Threadneedle Emerging Markets
Fund, a fund that seeks to provide shareholders with long-term capital growth.
More information about Threadneedle Emerging Markets Fund and the proposed
merger will be included in proxy materials.
Completion of the merger is subject to approval by shareholders of Seligman
Emerging Markets Fund. It is currently anticipated that proxy materials
regarding the merger will be distributed to shareholders during the first or
second quarter of 2009, and that a meeting of shareholders to consider the
merger will be scheduled for the second quarter of 2009.
Investment Objective
The Seligman Emerging Markets Fund's investment objective is long-term capital
appreciation.
Principal Investment Strategies
The Fund uses the following principal investment strategies to seek its
investment objective:
The Fund generally invests at least 80% of its net assets in equity securities
of companies that conduct their principal business activities in emerging
markets, are organized under the laws of or maintain their principal place of
business in emerging markets, or whose securities are traded principally on
exchanges in emerging markets.
The Fund will focus its investments in those emerging markets in which the
investment manager believes the economies are developing strongly and markets
are becoming more liquid, or other emerging markets that meet the portfolio
manager's criteria for investability. The Fund seeks to benefit from policies
of economic development being adopted in many emerging markets. These policies
include domestic price reform, reducing internal budget deficits,
privatization, encouraging foreign investments, and developing capital markets.
The Fund combines a bottom-up investment style with top-down analysis of
regions, countries and sectors. This means the portfolio manager incorporates
analysis of individual companies along with analysis of individual sectors,
countries and regions.
EMERGING MARKET:
A market in a developing country or a market represented in the Morgan
Stanley Capital International Emerging Markets Index. Developing countries
are those classified by the World Bank as low-income or middle-income
economies, regardless of their particular stage of development.
In selecting individual securities, the portfolio manager looks to identify
companies that it believes display one or more of the following:
.. Operate in growing markets
.. Attractive valuations relative to cash earnings forecasts or other valuation
criteria
.. Unique sustainable competitive advantages (e.g., market share, proprietary
products)
.. Improving industry or country fundamentals
Following stock selection, the portfolio manager then focuses on portfolio
construction that considers top-down risk control based on such factors as:
.. Relative economic growth potential of the various economies and securities
markets
.. Political, financial, and social conditions influencing investment
opportunities
.. Relative rates of earnings growth
.. Interest rate outlook and expected levels of inflation
.. Market prices relative to historic averages
1
Seligman Emerging Markets Fund
The Fund generally sells a stock if the portfolio manager believes its target
price has been reached, its earnings are disappointing, its revenue growth has
slowed, its underlying fundamentals have deteriorated, or there are
deteriorating industry or country fundamentals. The Fund may also sell or trim
a stock if the portfolio manager believes, from a risk control perspective, the
stock's position size is inappropriate for the portfolio. Also, stocks may be
sold when negative country, currency, or general industry factors affect a
company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The securities may be
listed on a US or foreign stock exchange or traded in US or foreign
over-the-counter markets. The Fund normally concentrates its investments in
common stocks; however, it may invest in other types of equity securities,
including securities convertible into or exchangeable for common stock,
depositary receipts, and rights and warrants to purchase common stock. The Fund
also may invest up to 20% of its assets in preferred stock and investment-grade
or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in the price of securities it holds in its
portfolio. A put option gives the Fund the right to sell an underlying security
at a particular price during a fixed period of time. Forward foreign currency
exchange contracts and put options on securities may not be available to the
Fund on reasonable terms in many situations, and the Fund may frequently choose
not to enter into such contracts or purchase such options even when they are
available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors. Shareholders will be provided with at least 60 days
prior written notice of any change to the "80%" investment policy described in
the second paragraph under "Principal Investment Strategies."
There is no guarantee the Fund will achieve its objective.
Principal Risks
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. The Fund's net asset value may fluctuate
more than other equity funds or other global equity funds that do not invest
heavily in emerging markets. You may experience a decline in the value of your
investment and you could lose money if you sell your
2
Seligman Emerging Markets Fund
shares at a price lower than you paid for them. Emerging countries may have
relatively unstable governments, economies based on less diversified industrial
bases, and securities markets that trade a smaller number of securities.
Companies in emerging markets are often smaller, less seasoned, and more
recently organized than many US companies.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuation, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks. Investing in emerging markets involves a greater
degree of risk, and an investment in the Fund should be considered speculative.
Investments in smaller companies typically involve greater risks than
investments in larger companies.
Small company stocks, as a whole, may experience larger price fluctuations than
large company stocks or other types of investments. Some small companies may
have shorter operating histories, less experienced management and limited
product lines, markets and financial and managerial resources.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. The Fund may, however, invest a substantial
percentage of its assets in certain industries or economic sectors believed by
the portfolio manager to offer good investment opportunities. If an industry or
economic sector in which the Fund is invested falls out of favor, the Fund's
performance may be negatively affected.
To the extent the Fund invests some of its assets in other higher-risk
securities, such as illiquid securities, it may be subject to higher price
volatility. Securities traded in the over-the-counter markets involve risks,
including the risk that the counterparty will be unable or unwilling to meet
its obligations. In addition, since over-the-counter markets are generally less
liquid than exchanges, the Fund may not be able to sell when the portfolio
manager deems it advantageous to do so.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and management fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
3
Seligman Emerging Markets Fund
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Portfolio Holdings
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
Past Performance
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class A shares has
varied from year to year, as well as how the performance of certain of the
Fund's classes compares to two measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis to assist you in comparing the
returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past (before and after taxes), however, is not necessarily an
indication of how the Fund will perform in the future. Total returns will vary
between each Class due to differing fees and expenses.
The Class A annual total returns presented in the bar chart on the following
page do not reflect the effect of any sales charges. If sales charges were
included, the returns would be lower. The Fund's average annual total returns
presented in the table on the following page do reflect the effect of the
applicable sales charges. Effective January 7, 2008, the maximum initial sales
charge on investments in Class A shares of less than $50,000 is 5.75%.
Effective June 4, 2007, there is no initial sales charge on purchases of Class
C shares. Although for all periods presented in the tables the Funds' Class C
share returns do not reflect an initial sales charge, the actual returns for
periods prior to June 4, 2007 would have been lower if a 1.00% maximum initial
sales charge then in effect was incurred. Both the bar chart and table assume
that all dividends and capital gain distributions, if any, were reinvested.
Prior to November 7, 2008, the Fund was managed by J. & W. Seligman & Co.
Incorporated (Seligman). In the past, Seligman contractually waived its
management fee or reimbursed the Fund's expenses (with certain exceptions).
Through at least February 28, 2010, RiverSource Investments, the Fund's new
investment manager, has contractually agreed to waive its management fee and/or
to reimburse the Fund's expenses to the extent that the Fund's "other expenses"
(i.e., those expenses other than management fees, 12b-1 fees, interest on
borrowings, and extraordinary expenses, including litigation expenses) exceed
0.85% per annum of the Fund's average daily net assets. Absent prior management
fee waivers/expense reimbursements, returns presented in the bar chart and
table would have been lower.
After-tax returns presented in the table are for Class A shares only. After-tax
returns for Class B, Class C and Class R shares will vary due to differing fees
and expenses. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown, and after-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts (IRAs).
The returns after taxes on distributions and sale of Fund shares may be greater
than other returns presented for the same periods due to tax benefits from
losses realized on the sale of Fund shares.
4
Seligman Emerging Markets Fund
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[CHART]
Best calendar quarter return: 33.99% - quarter ended 12/31/99.
Worst calendar quarter return: -26.57% - quarter ended 12/31/08.
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
CLASS C CLASS R
SINCE SINCE
ONE FIVE TEN INCEPTION INCEPTION
YEAR YEARS YEARS 5/27/99 4/30/03
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CLASS A
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Return before taxes (54.39)% 6.67% 5.98% n/a n/a
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Return after taxes on distributions (55.20) 4.80 5.05 n/a n/a
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Return after taxes on distributions and sale of Fund shares (34.43) 5.75 5.25 n/a n/a
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CLASS B (54.03) 6.86 5.96/(1)/ n/a n/a
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CLASS C (52.18) 7.26 n/a 4.63% n/a
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CLASS R (51.82) 8.02 n/a n/a 15.54%
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MSCI EMERGING MARKETS (EM) INDEX (53.18) 8.01 9.30 7.14/(2)/ 15.28
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LIPPER EMERGING MARKETS FUNDS AVERAGE (55.41) 6.20 9.38 7.23 13.65
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The Morgan Stanley Capital International Emerging Markets Index ("MSCI Emerging
Markets (EM) Index") and the Lipper Emerging Markets Funds Average are
unmanaged benchmarks that assume the reinvestment of all distributions, if any.
The Lipper Emerging Markets Funds Average excludes the effect of fees, sales
charges and taxes, and the MSCI Emerging Markets (EM) Index excludes the effect
of expenses, fees, sales charges and taxes. The MSCI Emerging Markets (EM)
Index is a free float-adjusted market capitalization index that is designed to
measure equity market performance in the global emerging markets. The Lipper
Emerging Markets Funds Average comprises mutual funds that seek long-term
capital appreciation by investing at least 65% of total assets in emerging
market equity securities, where "emerging market" is defined by a country's
gross national product (GNP) per capita or other economic measures. Investors
cannot invest directly in an average or index.
Prior to March 31, 2000, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain portfolio management
services with respect to the investments of the Fund. From March 31, 2000 until
September 15, 2003, the assets of the Fund were managed exclusively by
Seligman. Since September 15, 2003, Wellington Management Company, LLP has been
employed as subadviser to provide portfolio management services to the Fund.
(1)The ten-year return for Class B shares reflects automatic conversions to
Class A shares approximately eight years after their date of purchase.
(2)From 5/31/99.
5
Seligman Emerging Markets Fund
Fees and Expenses
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to your account. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C CLASS R
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Total Maximum Sales Charge (Load) 5.75% 5% 1% 1%
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Maximum Sales Charge (Load) on Purchases (as a % of offering price) 5.75%/(2)/ none none none
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Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value, whichever is less) none/(2)/ 5% 1% 1%
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ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- --------------------------------------------------------------------------------------------------------------------------
(as a percentage of average net assets)
- --------------------------------------------------------------------------------------------------------------------------
Management Fees 1.25% 1.25% 1.25% 1.25%
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Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50%
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Other Expenses/(3)/ 1.03% 1.04% 1.06% 0.97%
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Total Gross Operating Expenses/(1)/ 2.53% 3.29% 3.31% 2.72%
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(1) Less: Fee Waiver/Expense Reimbursement 0.18% 0.19% 0.21% 0.12%
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Net Operating Expenses (after Fee Waiver/Expense Reimbursement) 2.35% 3.10% 3.10% 2.60%
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(2)Certain investors who do not pay an initial sales charge (e.g., purchases of
$1,000,000 or more, and purchases through certain retirement plans) may be
subject to a 1% CDSC if shares are sold within 18 months of purchase.
(3)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation ("RSC")
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. ("SDC"), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC.
Through at least February 28, 2010, RiverSource Investments has
contractually agreed to waive its management fee and/or to reimburse the
Fund's expenses to the extent that the Fund's "other expenses" (i.e., those
expenses other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85% per
annum of the Fund's average daily net assets. This fee waiver and/or expense
reimbursement is reflected above in footnote (1).
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's net operating expenses shown above
through February 28, 2010 (which reflect the contractual expense
reimbursement/fee waiver arrangement described above) and (ii) after February
28, 2010, the Fund's total gross operating expenses shown above adjusted to
reflect those fees and expenses no longer applicable to the Fund (i.e., the
Non-Recurring Charges and SDC's fees and expenses). Although your actual costs
may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $799 $1,272 $1,770 $3,133
--------------------------------------------------------------------------------
Class B 813 1,265 1,841 3,270+
--------------------------------------------------------------------------------
Class C 413 969 1,649 3,462
--------------------------------------------------------------------------------
Class R 363 800 1,364 2,898
--------------------------------------------------------------------------------
If you did not sell your shares at the end of each period, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $799 $1,272 $1,770 $3,133
--------------------------------------------------------------------------------
Class B 313 965 1,641 3,270+
--------------------------------------------------------------------------------
Class C 313 969 1,649 3,462
--------------------------------------------------------------------------------
Class R 263 800 1,364 2,898
--------------------------------------------------------------------------------
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+ Class B shares will automatically convert to Class A shares approximately
eight years after purchase.
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
12B-1 FEES:
Fees paid out by each Class, pursuant to a plan adopted by the Fund under Rule
12b-1 of the Investment Company Act of 1940. The plan allows each Class to pay
distribution and/or service fees for the sale and distribution of its shares
and for providing services to shareholders.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund, including such things as
shareholder account services, registration, custody, auditing and legal fees.
6
Seligman Global Growth Fund
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On January 8, 2009, the Series' Board of Directors approved in principle the
merger of Seligman Global Growth Fund into Threadneedle Global Equity Fund, a
fund that seeks to provide shareholders with long-term capital growth. More
information about Threadneedle Global Equity Fund and the proposed merger will
be included in proxy materials.
Completion of the merger is subject to approval by shareholders of Seligman
Global Growth Fund. It is currently anticipated that proxy materials regarding
the merger will be distributed to shareholders during the first or second
quarter of 2009, and that a meeting of shareholders to consider the merger will
be scheduled for the second quarter of 2009.
Investment Objective
The Seligman Global Growth Fund's investment objective is long-term capital
appreciation.
Principal Investment Strategies
The Fund uses the following principal investment strategies to seek its
investment objective:
The Fund invests primarily in equity securities of non-US and US growth
companies that have the potential to benefit from global economic or social
trends. The Fund may invest in high-quality, large-and mid-capitalization
companies that are considered leaders in their industries, emphasizing those
industries that are growing on a global basis. Typically, the Fund will invest
in several countries in different geographic regions. Additionally, the Fund
may invest up to 15% in emerging market equities.
Under normal market conditions, the Fund generally will invest at least 40% of
its net assets in companies that maintain their principal place of business or
conduct their principal business activities outside the US, have their
securities traded on non-US exchanges or have been formed under the laws of
non-US countries. The portfolio manager may reduce this 40% minimum investment
amount to 30% if it believes that market conditions for these types of
companies or specific foreign markets are unfavorable. The Fund considers a
company to conduct its principal business activities outside the US if it
derives at least 50% of its revenue from business outside the US or has at
least 50% of its assets outside the US.
The Fund uses an investment process that emphasizes bottom-up research with a
focus on companies with improving fundamentals exemplified by identifiable
catalysts and strong earnings growth.
In selecting individual securities, the portfolio manager looks to identify
companies that it believes display one or more of the following:
.. Accelerating fundamentals or earnings growth with consideration paid to
valuations
.. Quality management
.. Strong possibility of multiple expansion
.. Unique competitive advantages (e.g., market share, proprietary products)
.. Potential for improvement in overall operations
The Fund generally sells a stock if the portfolio manager believes its target
price has been reached, its earnings are disappointing, its revenue or earnings
growth has slowed, or the stock's or industry's underlying fundamentals have
deteriorated. The Fund may also sell a stock if the portfolio manager believes
that negative country or regional factors or shifts in global trends may
negatively affect a company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable
7
Seligman Global Growth Fund
for common stock, depositary receipts, and rights and warrants to purchase
common stock. The Fund also may invest up to 25% of its assets in preferred
stock and investment-grade or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in the price of securities it holds in its
portfolio. A put option gives the Fund the right to sell an underlying security
at a particular price during a fixed period of time. Forward foreign currency
exchange contracts and put options on securities may not be available to the
Fund on reasonable terms in many situations, and the Fund may frequently choose
not to enter into such contracts or purchase such options even when they are
available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies (e.g., investing less than 30% of
its assets in companies outside the US) in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors.
There is no guarantee the Fund will achieve its objective.
Principal Risks
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the
value of your investment and you could lose money if you sell your shares at a
price lower than you paid for them.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuations, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks.
Securities of issuers in emerging markets are subject to additional risks.
Emerging countries may have relatively unstable governments, economies based on
less diversified industrial bases, and securities markets that trade a smaller
number of securities. Companies in emerging markets are often smaller, less
seasoned, and more recently organized than many US companies.
8
Seligman Global Growth Fund
The Fund seeks to limit the risk of investing in foreign securities by
diversifying its investments among different countries, as well as among
different themes. Diversification reduces the effect events in any one country
will have on the Fund's entire investment portfolio. However, a decline in the
value of the Fund's investments in one country may offset potential gains from
investments in another country.
If global markets do not develop or continue to develop, the Fund's performance
could be negatively affected.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. The Fund may, however, invest a substantial
percentage of its assets in certain industries or economic sectors believed by
the portfolio manager to offer good investment opportunities. If an industry or
economic sector in which the Fund is invested falls out of favor, the Fund's
performance may be negatively affected.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and management fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Portfolio Holdings
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
9
Seligman Global Growth Fund
Past Performance
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class A shares has
varied from year to year, as well as how the performance of certain of the
Fund's classes compares to four measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis to assist you in comparing the
returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past (before and after taxes), however, is not necessarily an
indication of how the Fund will perform in the future. Total returns will vary
between each Class due to differing fees and expenses.
The Class A annual total returns presented in the bar chart on the following
page do not reflect the effect of any sales charges. If sales charges were
included, the returns would be lower. The Fund's average annual total returns
presented in the table on the following page do reflect the effect of the
applicable sales charges. Effective January 7, 2008, the maximum initial sales
charge on investments in Class A shares of less than $50,000 is 5.75%.
Effective June 4, 2007, there is no initial sales charge on purchases of Class
C shares. Although for all periods presented in the tables the Funds' Class C
share returns do not reflect an initial sales charge, the actual returns for
periods prior to June 4, 2007 would have been lower if a 1.00% maximum initial
sales charge then in effect was incurred. Both the bar chart and table assume
that all dividends and capital gain distributions, if any, were reinvested.
Prior to November 7, 2008, the Fund was managed by J. & W. Seligman & Co.
Incorporated (Seligman). In the past, Seligman contractually waived its
management fee or reimbursed the Fund's expenses (with certain exceptions). In
the past, Seligman also made payments to the Fund. Through at least February
28, 2010, RiverSource Investments, the Fund's new investment manager, has
contractually agreed to waive its management fee and/or to reimburse the Fund's
expenses to the extent that the Fund's "other expenses" (i.e., those expenses
other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85% per annum
of the Fund's average daily net assets. Absent prior management fee
waivers/expense reimbursements and payments, returns presented in the bar chart
and table would have been lower.
After-tax returns presented in the table are for Class A shares only. After-tax
returns for Class B, Class C and Class R shares will vary due to differing fees
and expenses. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown, and after-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts (IRAs).
The returns after taxes on distributions and sale of Fund shares may be greater
than other returns presented for the same periods due to tax benefits from
losses realized on the sale of Fund shares.
10
Seligman Global Growth Fund
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[CHART]
Best calendar quarter return: 24.43% - quarter ended 12/31/99.
Worst calendar quarter return: -27.07% - quarter ended 12/31/08.
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
CLASS C CLASS R
SINCE SINCE
ONE FIVE TEN INCEPTION INCEPTION
YEAR YEARS YEARS 5/27/99 4/30/03
- -----------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------
Return before taxes (55.82)% (6.01)% (4.82)% n/a n/a
- -----------------------------------------------------------------------------------------------------------------
Return after taxes on distributions (55.82) (6.01) (5.36) n/a n/a
- -----------------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (36.28) (5.01) (3.78) n/a n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS B (55.77) (5.96) (4.81)/(1)/ n/a n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS C (53.91) (5.61) n/a (5.48)% n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS R (53.70) (5.11) n/a n/a (0.70)%
- -----------------------------------------------------------------------------------------------------------------
MSCI WORLD INDEX (40.33) 0.00 (0.19) (0.59)/(2)/ 4.62
- -----------------------------------------------------------------------------------------------------------------
MSCI WORLD GROWTH INDEX (40.90) (0.84) (2.29) (2.32)/(2)/ 3.17
- -----------------------------------------------------------------------------------------------------------------
LIPPER GLOBAL LARGE-CAP GROWTH FUNDS AVERAGE (44.46) (1.73) 0.35 (0.10) 3.01
- -----------------------------------------------------------------------------------------------------------------
LIPPER GLOBAL FUNDS AVERAGE (41.06) (0.49) 0.88 0.51 4.38
- -----------------------------------------------------------------------------------------------------------------
- -------------
The Morgan Stanley Capital International World Index ("MSCI World Index"), the
Morgan Stanley Capital International World Growth Index ("MSCI World Growth
Index"), and the Lipper Global Large-Cap Growth Funds Average and the Lipper
Global Funds Average (the "Lipper Averages") are unmanaged benchmarks that
assume reinvestment of all distributions, if any. The Lipper Averages excludes
the effect of fees, sales charges and taxes, and the MSCI World Index and the
MSCI World Growth Index exclude the effect of expenses, fees, sales charges and
taxes. The MSCI World Index is a free float-adjusted market capitalization
index that is designed to measure global developed market equity performance.
The MSCI World Growth Index is a free float-adjusted market
capitalization-weighted equity index representing "growth" (high price to book
value) securities in the world's developed stock markets. The Lipper Global
Funds Average comprises mutual funds which invest at least 25% of their
portfolio in securities traded outside the US, and that may own US securities
as well. The Lipper Global Large-Cap Growth Funds Average comprises mutual
funds that, by portfolio practice, invest at least 75% of their equity assets
in companies both inside and outside of the US with market capitalizations (on
a three-year weighted basis) above Lipper's global large-cap floor. Global
large-cap growth funds typically have an above-average price-to-cash flow
ratio, price-to-book ratio, and three-year sales-per-share growth value
compared to their large-cap-specific subset of the S&P/Citigroup World BMI.
Lipper currently classifies the Fund as a Global Large-Cap Growth Fund.
Investors cannot invest directly in an average or index.
Prior to March 31, 2000, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain portfolio management
services with respect to the investments of the Fund. From March 31, 2000 until
September 15, 2003, the assets of the Fund were managed exclusively by
Seligman. Since September 15, 2003, Wellington Management Company, LLP has been
employed as subadviser to provide portfolio management services to the Fund.
(1)The ten-year return for Class B shares reflects automatic conversions to
Class A shares approximately eight years after their date of purchase.
(2)From 5/31/99.
11
Seligman Global Growth Fund
Fees and Expenses
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to your account. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C CLASS R
- --------------------------------------------------------------------------------------------------------------------------
Total Maximum Sales Charge (Load) 5.75% 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases (as a % of offering price) 5.75%/(2)/ none none none
- --------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value, whichever is less) none/(2)/ 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- --------------------------------------------------------------------------------------------------------------------------
(as a percentage of average net assets)
- --------------------------------------------------------------------------------------------------------------------------
Management Fees 1.00% 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50%
- --------------------------------------------------------------------------------------------------------------------------
Other Expenses/(3)/ 0.99% 1.00% 0.99% 0.99%
- --------------------------------------------------------------------------------------------------------------------------
Total Gross Operating Expenses/(1)/ 2.24% 3.00% 0.99% 2.49%
- --------------------------------------------------------------------------------------------------------------------------
- -------------
(1) Less: Fee Waiver/Expense Reimbursement 0.14% 0.15% 0.14% 0.14%
- --------------------------------------------------------------------------------------------------------------------------
Net Operating Expenses (after Fee Waiver/Expense Reimbursement) 2.10% 2.85% 2.85% 2.35%
- --------------------------------------------------------------------------------------------------------------------------
(2)Certain investors who do not pay an initial sales charge (e.g., purchases of
$1,000,000 or more, and purchases through certain retirement plans) may be
subject to a 1% CDSC if shares are sold within 18 months of purchase.
(3)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation (RSC)
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. (SDC), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC.
Through at least February 28, 2010, RiverSource Investments has
contractually agreed to waive its management fee and/or to reimburse the
Fund's expenses to the extent that the Fund's "other expenses" (i.e., those
expenses other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85% per
annum of the Fund's average daily net assets. This fee waiver and/or expense
reimbursement is reflected above in footnote (1).
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's net operating expenses shown above
through February 28, 2010 (which reflect the contractual expense
reimbursement/fee waiver arrangement described above) and (ii) after February
28, 2010, the Fund's total gross operating expenses shown above adjusted to
reflect those fees and expenses no longer applicable to the Fund (i.e., the
Non-Recurring Charges and SDC's fees and expenses). Although your actual costs
may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $776 $1,193 $1,635 $2,857
--------------------------------------------------------------------------------
Class B 788 1,183 1,704 2,996+
--------------------------------------------------------------------------------
Class C 388 881 1,500 3,167
--------------------------------------------------------------------------------
Class R 338 731 1,251 2,677
--------------------------------------------------------------------------------
If you did not sell your shares at the end of each period, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $776 $1,193 $1,635 $2,857
--------------------------------------------------------------------------------
Class B 288 883 1,504 2,996+
--------------------------------------------------------------------------------
Class C 288 881 1,500 3,167
--------------------------------------------------------------------------------
Class R 238 731 1,251 2,677
--------------------------------------------------------------------------------
- -------------
+ Class B shares will automatically convert to Class A shares approximately
eight years after purchase.
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
12B-1 FEES:
Fees paid out by each Class, pursuant to a plan adopted by the Fund under Rule
12b-1 of the Investment Company Act of 1940. The plan allows each Class to pay
distribution and/or service fees for the sale and distribution of its shares
and for providing services to shareholders.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund, including such things as
shareholder account services, registration, custody, auditing and legal fees.
12
Seligman Global Smaller Companies Fund
- --------------------------------------------------------------------------------
Investment Objective
The Seligman Global Smaller Companies Fund's investment objective is long-term
capital appreciation.
SMALLER COMPANIES:
Companies with market capitalization, at the time of purchase by the Fund,
equivalent to US $3 billion or less.
Principal Investment Strategies
The Fund uses the following principal investment strategies to seek its
investment objective:
The Fund generally invests at least 80% of its assets in equity securities of
smaller US and non-US companies. The Fund may invest in companies domiciled in
any country, although it typically invests in developed countries. Relative to
its benchmark, the Fund is generally neutrally weighted across the major
geographic regions.
Under normal market conditions, the Fund generally will invest at least 40% of
its net assets in companies that maintain their principal place of business or
conduct their principal business activities outside the US, have their
securities traded on non-US exchanges or have been formed under the laws of
non-US countries. The portfolio manager may reduce this 40% minimum investment
amount to 30% if it believes that market conditions for these types of
companies or specific foreign markets are unfavorable. The Fund considers a
company to conduct its principal business activities outside the US if it
derives at least 50% of its revenue from business outside the US or has at
least 50% of its assets outside the US.
The Fund uses an investment approach that is bottom-up focused, looking for
both extended growth opportunities and special situations (including value
stocks) within each region.
In selecting individual securities, the portfolio managers look for companies
that they believe display the following characteristics:
.. Extended growth opportunities or special situations where there is a
potential for improvement in overall operations
.. A well articulated and believable business model
.. Quality management
.. Sustainable competitive advantage
.. Strong financial characteristics
The Fund generally sells a stock if the portfolio managers believe its target
price has been reached, its earnings are disappointing, its revenue or earnings
growth has slowed, its underlying fundamentals have deteriorated, or the
portfolio managers are finding better opportunities elsewhere. The Fund may
also sell a stock if the portfolio managers believe that negative country or
regional factors may affect a company's outlook, to manage risk in the Fund, or
to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable for common stock, depositary receipts, and rights and warrants to
purchase common stock. The Fund also may invest up to 20% of its assets in
preferred stock and investment-grade or comparable quality debt securities.
13
Seligman Global Smaller Companies Fund
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in the price of securities it holds in its
portfolio. A put option gives the Fund the right to sell an underlying security
at a particular price during a fixed period of time. Forward foreign currency
exchange contracts and put options on securities may not be available to the
Fund on reasonable terms in many situations and the Fund may frequently choose
not to enter into such contracts or purchase such options even when they are
available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies (e.g., investing less than 30% of
its assets in companies outside the US) in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors. Shareholders will be provided with at least 60 days
prior written notice of any change to the "80%" investment policy described in
the second paragraph under "Principal Investment Strategies."
The Board of Directors may change the definition of "smaller companies" if it
concludes that such a change is appropriate.
There is no guarantee the Fund will achieve its objective.
Principal Risks
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the
value of your investment and you could lose money if you sell your shares at a
price lower than you paid for them.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuation, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks.
Investments in smaller companies typically involve greater risks than
investments in larger companies. Small company stocks, as a whole, may
experience larger price fluctuations than large company stocks or other types
of investments. Some small companies may have shorter operating histories, less
experienced management and lim-
14
Seligman Global Smaller Companies Fund
ited product lines, markets and financial and managerial resources.
The Fund may be affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. The Fund may, however, invest a substantial
percentage of its assets in certain industries or economic sectors believed by
the portfolio managers to offer good investment opportunities. If an industry
or economic sector in which the Fund is invested falls out of favor, the Fund's
performance may be negatively affected.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and management fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to the risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Portfolio Holdings
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
Past Performance
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class A shares has
varied from year to year, as well as how the performance of certain of the
Fund's classes compares to two measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided
15
Seligman Global Smaller Companies Fund
on a calendar year basis to assist you in comparing the returns of the Fund
with the returns of other mutual funds. How the Fund has performed in the past
(before and after taxes), however, is not necessarily an indication of how the
Fund will perform in the future. Total returns will vary between each Class due
to differing fees and expenses.
The Class A annual total returns presented in the bar chart on the following
page do not reflect the effect of any sales charges. If sales charges were
included, the returns would be lower. The Fund's average annual total returns
presented in the table on the following page do reflect the effect of the
applicable sales charges. Effective January 7, 2008, the maximum initial sales
charge on investments in Class A shares of less than $50,000 is 5.75%.
Effective June 4, 2007, there is no initial sales charge on purchases of Class
C shares. Although for all periods presented in the tables the Funds' Class C
share returns do not reflect an initial sales charge, the actual returns for
periods prior to June 4, 2007 would have been lower if a 1.00% maximum initial
sales charge then in effect was incurred. Both the bar chart and table assume
that all dividends and capital gain distributions, if any, were reinvested.
Returns presented in the bar chart and table include the effect of a payment
from Seligman (the predecessor investment manager) to the Fund in 2004. Absent
such payment, returns that include 2004 would have been lower.
After-tax returns presented in the table are for Class A shares only. After-tax
returns for Class B, Class C and Class R shares will vary due to differing fees
and expenses. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown, and after-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts (IRAs).
The returns after taxes on distributions and sale of Fund shares may be greater
than other returns presented for the same periods due to tax benefits from
losses realized on the sale of Fund shares.
16
Seligman Global Smaller Companies Fund
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[CHART]
Best calendar quarter return: 18.72% - quarter ended 12/31/99.
Worst calendar quarter return: -26.64% - quarter ended 12/31/08.
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
CLASS C CLASS R
SINCE SINCE
ONE FIVE TEN INCEPTION INCEPTION
YEAR YEARS YEARS 5/27/99 4/30/03
- -------------------------------------------------------------------------------------------------------------
CLASS A
- -------------------------------------------------------------------------------------------------------------
Return before taxes (50.62)% (3.24)% (2.73)% n/a n/a
- -------------------------------------------------------------------------------------------------------------
Return after taxes on distributions (50.75) (4.45) (3.51) n/a n/a
- -------------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (32.84) (2.52) (2.18) n/a n/a
- -------------------------------------------------------------------------------------------------------------
CLASS B (50.63) (3.12) (2.75)/(1)/ n/a n/a
- -------------------------------------------------------------------------------------------------------------
CLASS C (48.47) (2.80) n/a (2.42)% n/a
- -------------------------------------------------------------------------------------------------------------
CLASS R (48.31) (2.32) n/a n/a 3.95%
- -------------------------------------------------------------------------------------------------------------
S&P/CITIGROUP BROAD MARKET LESS THAN US $2 BILLION INDEX (43.02) 0.51 4.83 4.46 7.26
- -------------------------------------------------------------------------------------------------------------
LIPPER GLOBAL SMALL/MID-CAP FUNDS AVERAGE (45.11) (0.72) 3.77 3.12 5.76
- -------------------------------------------------------------------------------------------------------------
- -------------
The Standard & Poor's/Citigroup Broad Market Less Than US $2 Billion Index (the
"S&P/Citigroup Index") and the Lipper Global Small/Mid-Cap Funds Average (the
"Lipper Average") are unmanaged benchmarks that assume reinvestment of all
distributions, if any. The Lipper Average excludes the effect of fees, sales
charges and taxes, and the S&P/Citigroup Index excludes the effect of expenses,
fees, sales charges and taxes. The S&P/Citigroup Index represents the entire
universe of institutionally investable securities with total available market
capitalization of at least the local equivalent of US $100 million and not more
than US $2 billion. The Lipper Average measures the performance of mutual funds
that, by portfolio practice, invest at least 75% of their equity assets in
companies both inside and outside of the US with market capitalizations (on a
three-year weighted basis) below Lipper's global large-cap floor. Lipper
re-classified the Fund as a Global Small/Mid-Cap Fund in June 2008. Investors
cannot invest directly in an average or index.
Prior to January 1, 2003, Seligman (the predecessor investment manager)
employed subadvisers that were responsible for providing certain portfolio
management services with respect to the investments of the Fund. From January
1, 2003 until September 15, 2003, the assets of the Fund were managed
exclusively by Seligman. Since September 15, 2003, Wellington Management
Company, LLP has been employed as subadviser to provide portfolio management
services for the Fund. In June 2004, Wellington Management Company, LLP
delegated a portion of its portfolio management responsibilities in respect of
the Fund to its affiliate, Wellington Management International, Ltd. As of
April 2006, no employee of Wellington Management International Ltd, is
providing portfolio management services to the Fund.
(1)The ten-year return for Class B shares reflects automatic conversions to
Class A shares approximately eight years after their date of purchase.
17
Seligman Global Smaller Companies Fund
Fees and Expenses
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to your account. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C CLASS R
- --------------------------------------------------------------------------------------------------------------------------
Total Maximum Sales Charge (Load) 5.75% 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases (as a % of offering price) 5.75%/(1)/ none none none
- --------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value, whichever is less) none/(1)/ 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- --------------------------------------------------------------------------------------------------------------------------
(as a percentage of average net assets)
- --------------------------------------------------------------------------------------------------------------------------
Management Fees 0.95% 0.95% 0.95% 0.95%
- --------------------------------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50%
- --------------------------------------------------------------------------------------------------------------------------
Other Expenses/(2)/ 0.73% 0.74% 0.73% 0.76%
- --------------------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.93% 2.69% 2.68% 2.21%
- --------------------------------------------------------------------------------------------------------------------------
- -------------
(1)Certain investors who do not pay an initial sales charge (e.g., purchases of
$1,000,000 or more, and purchases through certain retirement plans) may be
subject to a 1% CDSC if shares are sold within 18 months of purchase.
(2)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation (RSC)
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. (SDC), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC. The
Fund's actual expense ratio may be higher than that shown in the table,
which is based on the Fund's average net assets for the fiscal year ended
October 31, 2008.
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's total annual operating expenses
shown above (which reflects the Non-Recurring Charges, SDC's estimated fees and
expenses from March 2, 2009 through on or about May 8, 2009 and RSC's estimated
fees and expenses from on or about May 9, 2009 through February 28, 2010) and
(ii) after February 28, 2010, the Fund's total annual operating expenses shown
above adjusted to reflect those fees and expenses no longer applicable to the
Fund (i.e., the Non-Recurring Charges and SDC's fees and expenses). Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $760 $1,119 $1,501 $2,570
--------------------------------------------------------------------------------
Class B 772 1,107 1,568 2,710+
--------------------------------------------------------------------------------
Class C 371 804 1,363 2,886
--------------------------------------------------------------------------------
Class R 324 662 1,126 2,411
--------------------------------------------------------------------------------
If you did not sell your shares at the end of each period, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $760 $1,119 $1,501 $2,570
--------------------------------------------------------------------------------
Class B 272 807 1,368 2,710+
--------------------------------------------------------------------------------
Class C 271 804 1,363 2,886
--------------------------------------------------------------------------------
Class R 224 662 1,126 2,411
--------------------------------------------------------------------------------
- -------------
+ Class B shares will automatically convert to Class A shares approximately
eight years after purchase.
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
12B-1 FEES:
Fees paid out by each Class, pursuant to a plan adopted by the Fund under Rule
12b-1 of the Investment Company Act of 1940. The plan allows each Class to pay
distribution and/or service fees for the sale and distribution of its shares
and for providing services to shareholders.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund, including such things as
shareholder account services, registration, custody, auditing and legal fees.
18
Seligman Global Technology Fund
- --------------------------------------------------------------------------------
Investment Objective
The Seligman Global Technology Fund's investment objective is long-term capital
appreciation.
TECHNOLOGY:
The use of science to create new products and services. The industry
comprises information technology and communications, as well as medical,
environmental and bio-technology.
Principal Investment Strategies
The Fund uses the following principal investment strategies to seek its
investment objective:
The Fund generally invests at least 80% of its assets in equity securities of
US and non-US companies with business operations in technology and
technology-related industries. Technology-related companies are those companies
that use technology extensively to improve their business processes and
applications. The Fund may invest in companies domiciled in any country which
the investment manager believes to be appropriate to the Fund's objective. The
Fund generally invests in several countries in different geographic regions.
Under normal market conditions, the Fund generally will invest at least 40% of
its net assets in companies that maintain their principal place of business or
conduct their principal business activities outside the US, have their
securities traded on non-US exchanges or have been formed under the laws of
non-US countries. The investment manager may reduce this 40% minimum investment
amount to 30% if it believes that market conditions for these types of
companies or specific foreign markets are unfavorable. The Fund considers a
company to conduct its principal business activities outside the US if it
derives at least 50% of its revenue from business outside the US or has at
least 50% of its assets outside the US.
The Fund may invest in companies of any size. Securities of large companies
that are well established in the world technology market can be expected to
grow with the market and will frequently be held by the Fund. However, rapidly
changing technologies and expansion of technology and technology-related
industries often provide a favorable environment for companies of
small-to-medium size, and the Fund may invest in these companies as well.
The investment manager seeks to identify those technology companies that it
believes have the greatest prospects for future growth, regardless of their
countries of origin. The Fund uses an investment style that combines research
into individual company attractiveness with macro analysis. This means that the
investment manager uses extensive in-depth research to identify attractive
technology companies around the world, while seeking to identify particularly
strong technology sectors and/or factors within regions or specific countries
that may affect investment opportunities. In selecting individual securities,
the investment manager looks for companies that it believes display one or more
of the following:
.. Above-average growth prospects
.. High profit margins
.. Attractive valuations relative to earnings forecasts or other valuation
criteria (e.g., return on equity)
.. Quality management and equity ownership by executives
.. Unique competitive advantages (e.g., market share, proprietary products)
.. Potential for improvement in overall operations
The Fund generally sells a stock if the investment manager believes its target
price has been reached,
19
Seligman Global Technology Fund
its earnings are disappointing, its revenue growth has slowed, or its
underlying fundamentals have deteriorated. The Fund may also sell a stock if
the investment manager believes that negative country or regional factors may
affect a company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable for common stock, depositary receipts, and rights and warrants to
purchase common stock. The Fund also may invest up to 20% of its assets in
preferred stock and investment-grade or comparable quality debt securities. The
Fund may also invest in depositary receipts, which are publicly traded
instruments generally issued by US or foreign banks or trust companies that
represent securities of foreign issuers.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in the price of securities it holds in its
portfolio. A put option gives the Fund the right to sell an underlying security
at a particular price during a fixed period of time. Forward foreign currency
exchange contracts and put options on securities may not be available to the
Fund on reasonable terms in many situations, and the Fund may frequently choose
not to enter into such contracts or purchase such options even when they are
available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies (e.g., investing less than 30% of
its assets in companies outside the US) in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors. Shareholders will be provided with at least 60 days
prior written notice of any change to the "80%" investment policy described in
the second paragraph under "Principal Investment Strategies."
There is no guarantee the Fund will achieve its objective.
Principal Risks
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the
value of your investment and you could lose
20
Seligman Global Technology Fund
money if you sell your shares at a price lower than you paid for them.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuation, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks.
The Fund may be susceptible to factors affecting technology and
technology-related industries, and the Fund's net asset value may fluctuate
more than a fund that invests in a wider range of industries. Technology
companies are often smaller and less experienced companies and may be subject
to greater risks than larger companies, such as limited product lines, markets
and financial and managerial resources. These risks may be heightened for
technology companies in foreign markets.
The Fund seeks to limit risk by diversifying its investments among different
sectors within the technology industry, as well as among different countries.
Diversification reduces the effect the performance of any one sector or events
in any one country will have on the Fund's entire investment portfolio.
However, a decline in the value of one of the Fund's investments may offset
potential gains from other investments.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
There can be no assurances that the Fund will achieve, by investing in initial
public offerings or otherwise, the strong performance that the Fund had
previously experienced, and past performance is no guarantee of future
investment results.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and advisory fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to the risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. Frequent and active
trading may also
21
Seligman Global Technology Fund
cause adverse tax consequences for investors in the Fund due to an increase in
short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Portfolio Holdings
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
Past Performance
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class A shares has
varied from year to year, as well as how the performance of certain of the
Fund's classes compares to four measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis to assist you in comparing the
returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past (before and after taxes), however, is not necessarily an
indication of how the Fund will perform in the future. Total returns will vary
between each Class due to differing fees and expenses.
The Class A annual total returns presented in the bar chart on the following
page do not reflect the effect of any sales charges. If sales charges were
included, the returns would be lower. The Fund's average annual total returns
presented in the table on the following page do reflect the effect of the
applicable sales charges. Effective January 7, 2008, the maximum initial sales
charge on investments in Class A shares of less than $50,000 is 5.75%.
Effective June 4, 2007, there is no initial sales charge on purchases of Class
C shares. Although for all periods presented in the tables the Funds' Class C
share returns do not reflect an initial sales charge, the actual returns for
periods prior to June 4, 2007 would have been lower if a 1.00% maximum initial
sales charge then in effect was incurred. Both the bar chart and table assume
that all dividends and capital gain distributions, if any, were reinvested.
Returns presented in the bar chart and table include the effect of a payment
from Seligman (the predecessor investment manager) to the Fund in 2004. Absent
such payment, returns would have been lower.
After-tax returns presented in the table are for Class A shares only. After-tax
returns for Class B, Class C and Class R shares will vary due to differing fees
and expenses. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown, and after-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts (IRAs).
The returns after taxes on distributions and sale of Fund shares may be greater
than other returns presented for the same periods due to tax benefits from
losses realized on the sale of Fund shares.
22
Seligman Global Technology Fund
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[CHART]
Best calendar quarter return: 55.72% - quarter ended 12/31/99.
Worst calendar quarter return: -32.60% - quarter ended 9/30/01.
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
CLASS C CLASS R
SINCE SINCE
ONE FIVE TEN INCEPTION INCEPTION
YEAR YEARS YEARS 5/27/99 4/30/03
- -----------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------
Return before taxes (43.88)% (2.86)% (0.69)% n/a n/a
- -----------------------------------------------------------------------------------------------------------------
Return after taxes on distributions (43.88) (2.86) (1.30) n/a n/a
- -----------------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (28.52) (2.41) (0.50) n/a n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS B (43.83) (2.84) (0.71)/(1)/ n/a n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS C (41.50) (2.44) n/a (1.83)% n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS R (41.19) (1.93) n/a n/a 3.47%
- -----------------------------------------------------------------------------------------------------------------
MSCI WORLD INDEX (40.33) 0.00 (0.19) (0.59)/(2)/ 4.62
- -----------------------------------------------------------------------------------------------------------------
MSCI WORLD IT INDEX (43.70) (5.18) (5.38) (6.45)/(2)/ 0.95
- -----------------------------------------------------------------------------------------------------------------
LIPPER GLOBAL SCIENCE & TECHNOLOGY FUNDS AVERAGE (43.77) (5.42) (3.60) (5.33) 0.81
- -----------------------------------------------------------------------------------------------------------------
LIPPER GLOBAL FUNDS AVERAGE (41.06) (0.49) 0.88 0.51 4.38
- -----------------------------------------------------------------------------------------------------------------
- -------------
The Morgan Stanley Capital International World Index (the "MSCI World Index")
and the Morgan Stanley Capital International World Information Technology Index
("MSCI World IT Index", collectively, the "MSCI Indices"), and the Lipper
Global Science & Technology Funds Average and the Lipper Global Funds Average
(the "Lipper Averages") are unmanaged benchmarks that assume reinvestment of
all distributions, if any. The Lipper Averages exclude the effect of fees,
sales charges and taxes, and the MSCI Indices exclude the effect of expenses,
fees, sales charges and taxes. The MSCI World Index is a free float-adjusted
market capitalization index that is designed to measure global developed market
equity performance. The MSCI World IT Index is a free float-adjusted market
capitalization index designed to measure information technology stock
performance in the global developed equity market. The Lipper Global Science &
Technology Funds Average measures the performance of mutual funds that invest
primarily in the equity securities of domestic and foreign companies engaged in
science and technology. The Lipper Global Funds Average measures the
performance of mutual funds that invest at least 25% of their portfolio in
securities traded outside the US and that may own US securities as well. Lipper
re-classified the Fund as a Global Science & Technology Fund in May 2008.
Investors cannot invest directly in an average or index.
Prior to March 31, 2000, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain portfolio management
services with regard to the Fund's investments. From March 31, 2000 through
November 6, 2008 the Fund was managed by Seligman. Thereafter, the Fund has
been managed by RiverSource Investments.
(1)The ten-year return for Class B shares reflects automatic conversions to
Class A shares approximately eight years after their date of purchase.
(2)From 5/31/99.
23
Seligman Global Technology Fund
Fees and Expenses
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to your account. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C CLASS R
- --------------------------------------------------------------------------------------------------------------------------
Total Maximum Sales Charge (Load) 5.75% 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases (as a % of offering price) 5.75%/(1)/ none none none
- --------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value, whichever is less) none/(1)/ 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- --------------------------------------------------------------------------------------------------------------------------
(as a percentage of average net assets)
- --------------------------------------------------------------------------------------------------------------------------
Management Fees 1.00% 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50%
- --------------------------------------------------------------------------------------------------------------------------
Other Expenses/(2)/ 0.52% 0.54% 0.53% 0.61%
- --------------------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.77% 2.54% 2.53% 2.11%
- --------------------------------------------------------------------------------------------------------------------------
- -------------
(1)Certain investors who do not pay an initial sales charge (e.g., purchases of
$1,000,000 or more, and purchases through certain retirement plans) may be
subject to a 1% CDSC if shares are sold within 18 months of purchase.
(2)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation (RSC)
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. (SDC), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC. The
Fund's actual expense ratio may be higher than that shown in the table,
which is based on the Fund's average net assets for the fiscal year ended
October 31, 2008.
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's total annual operating expenses
shown above (which reflects the Non-Recurring Charges, SDC's estimated fees and
expenses from March 2, 2009 through on or about May 8, 2009 and RSC's estimated
fees and expenses from on or about May 9, 2009 through February 28, 2010) and
(ii) after February 28, 2010, the Fund's total annual operating expenses shown
above adjusted to reflect those fees and expenses no longer applicable to the
Fund (i.e., the Non-Recurring Charges and SDC's fees and expenses). Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $745 $1,072 $1,423 $2,408
--------------------------------------------------------------------------------
Class B 757 1,062 1,493 2,556+
--------------------------------------------------------------------------------
Class C 356 759 1,288 2,737
--------------------------------------------------------------------------------
Class R 314 634 1,079 2,317
--------------------------------------------------------------------------------
If you did not sell your shares at the end of each period, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $745 $1,072 $1,423 $2,408
--------------------------------------------------------------------------------
Class B 257 762 1,293 2,556+
--------------------------------------------------------------------------------
Class C 256 759 1,288 2,737
--------------------------------------------------------------------------------
Class R 214 634 1,079 2,317
--------------------------------------------------------------------------------
- -------------
+ Class B shares will automatically convert to Class A shares approximately
eight years after purchase.
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
12B-1 FEES:
Fees paid out by each Class, pursuant to a plan adopted by the Fund under Rule
12b-1 of the Investment Company Act of 1940. The plan allows each Class to pay
distribution and/or service fees for the sale and distribution of its shares
and for providing services to shareholders.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund, including such things as
shareholder account services, registration, custody, auditing and legal fees.
24
Seligman International Growth Fund
- --------------------------------------------------------------------------------
On January 8, 2009, the Series' Board of Directors approved in principle the
merger of Seligman International Growth Fund into RiverSource Partners
International Select Growth Fund, a fund that seeks to provide shareholders
with long-term capital growth. More information about RiverSource Partners
International Select Growth Fund and the proposed merger will be included in
proxy materials.
Completion of the merger is subject to approval by shareholders of Seligman
International Growth Fund. It is currently anticipated that proxy materials
regarding the merger will be distributed to shareholders during the first or
second quarter of 2009, and that a meeting of shareholders to consider the
merger will be scheduled for the second quarter of 2009.
Investment Objective
The Seligman International Growth Fund's investment objective is long-term
capital appreciation.
Principal Investment Strategies
The Fund uses the following principal investment strategies to seek its
investment objective: The Fund invests primarily in high-quality, large- and
mid-capitalization growth companies ($1 billion or more at the time of initial
purchase by the Fund) that are considered leaders in their industries,
emphasizing those industries that are growing on a global basis. The Fund may
invest in any country; however, it typically will not invest in the United
States. It generally invests in several countries in different geographic
regions.
The Fund generally invests in the common stock of medium- to large-sized
companies in the principal international markets. However, it may also invest
in companies with a lower market capitalization or in smaller regional or
emerging markets (representation in the emerging markets will generally be less
than 25% of assets).
In selecting individual securities, the portfolio manager looks to identify
companies that it believes display one or more of the following:
.. Attractive valuations relative to earnings and revenue forecasts or other
valuation criteria (e.g., return on equity)
.. Quality management
.. Unique competitive advantages (e.g., market share, proprietary products)
.. Strong possibility of multiple expansion
.. Potential for improvement in overall operations (hidden/unappreciated value)
The Fund generally sells a stock if the portfolio manager believes its target
price has been reached, there is a decelerating trend of earnings growth,
deteriorating industry fundamentals, management change or failure, its revenue
growth has slowed, or its underlying fundamentals have deteriorated.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The securities may be
listed on a US or foreign stock exchange or traded in US or foreign
over-the-counter markets. The Fund normally concentrates its investments in
common stocks; however, it may invest in other types of equity securities,
including securities convertible into or exchangeable for common stock,
depositary receipts, and rights and warrants to purchase common stock. The Fund
also may invest up to 25% of its assets in preferred stock and investment-grade
or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in
25
Seligman International Growth Fund
the price of securities it holds in its portfolio. A put option gives the Fund
the right to sell an underlying security at a particular price during a fixed
period of time. Forward foreign currency exchange contracts and put options on
securities may not be available to the Fund on reasonable terms in many
situations, and the Fund may frequently choose not to enter into such contracts
or purchase such options even when they are available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors.
There is no guarantee the Fund will achieve its objective.
Principal Risks
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the
value of your investment and you could lose money if you sell your shares at a
price lower than you paid for them.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuation, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks.
Securities of issuers in emerging markets are subject to additional risks.
Emerging countries may have relatively unstable governments, economies based on
less diversified industrial bases, and securities markets that trade a smaller
number of securities. Companies in emerging markets are often smaller, less
seasoned, and more recently organized than many US companies.
The Fund seeks to limit the risk of investing in foreign securities by
diversifying its investments among different regions and countries.
Diversification reduces the effect events in any one country will have on the
Fund's entire investment portfolio. However, a decline in the value of the
Fund's investments in one country may offset potential gains from investments
in another country.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one in-
26
Seligman International Growth Fund
dustry. The Fund may, however, invest a substantial percentage of its assets in
certain industries or economic sectors believed by the portfolio manager to
offer good investment opportunities. If an industry or economic sector in which
the Fund is invested falls out of favor, the Fund's performance may be
negatively affected.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
Securities traded in the over-the-counter markets involve risks, including the
risk that the counterparty will be unable or unwilling to meet its obligations.
In addition, since over-the-counter markets are generally less liquid than
exchanges, the Fund may not be able to sell when the portfolio manager deems it
advantageous to do so.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and advisory fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to the risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs, which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Portfolio Holdings
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
Past Performance
The following performance information provides some indication of the risks of
investing in the
Fund by showing how the performance of Class A shares has varied from year to
year, as well as how the performance of certain of the Fund's classes compares
to four measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis to assist you in comparing the
returns of the Fund with the returns of other
27
Seligman International Growth Fund
mutual funds. How the Fund has performed in the past (before and after taxes),
however, is not necessarily an indication of how the Fund will perform in the
future. Total returns will vary between each Class due to differing fees and
expenses.
The Class A annual total returns presented in the bar chart on page 29 do not
reflect the effect of any sales charges. If sales charges were included, the
returns would be lower. The Fund's average annual total returns presented in
the table on page 29 do reflect the effect of the applicable sales charges.
Effective January 7, 2008, the maximum initial sales charge on investments in
Class A shares of less than $50,000 is 5.75%. Effective June 4, 2007, there is
no initial sales charge on purchases of Class C shares. Although for all
periods presented in the tables the Fund's Class C share returns do not reflect
an initial sales charge, the actual returns for periods prior to June 4, 2007
would have been lower if a 1.00% maximum initial sales charge then in effect
was incurred. Both the bar chart and table assume that all dividends and
capital gain distributions were reinvested.
Prior to November 7, 2008, the Fund was managed by J. & W. Seligman & Co.
Incorporated (Seligman). In the past, Seligman contractually waived its
management fee or reimbursed the Fund's expenses (with certain exceptions).
Through at least February 28, 2010, RiverSource Investments, the Fund's new
investment manager, has contractually agreed to waive its management fee and/or
to reimburse the Fund's expenses to the extent that the Fund's "other expenses"
(i.e., those expenses other than management fees, 12b-1 fees, interest on
borrowings, and extraordinary expenses, including litigation expenses) exceed
0.85% per annum of the Fund's average daily net assets. Absent prior management
fee waivers/expense reimbursements, returns presented in the bar chart and
table would have been lower.
After-tax returns presented in the table are for Class A shares only. After-tax
returns for Class B, Class C and Class R shares will vary due to differing fees
and expenses. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates and do not reflect the impact of
state and local taxes. Actual after-tax returns depend on an investor's tax
situation and may differ from those shown, and after-tax returns shown are not
relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts (IRAs).
The returns after taxes on distributions and sale of Fund shares may be greater
than other returns presented for the same periods due to tax benefits from
losses realized on the sale of Fund shares.
28
Seligman International Growth Fund
CLASS A ANNUAL TOTAL RETURNS - CALENDAR YEARS
[CHART]
Best calendar quarter return: 16.96% - quarter ended 12/31/99.
Worst calendar quarter return: -27.75% - quarter ended 9/30/08.
AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
CLASS C CLASS R
SINCE SINCE
ONE FIVE TEN INCEPTION INCEPTION
YEAR YEARS YEARS 5/27/99 4/30/03
- -----------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------
Return before taxes (60.34)% (5.04)% (7.56)% n/a n/a
- -----------------------------------------------------------------------------------------------------------------
Return after taxes on distributions (60.34) (5.70) (8.03) n/a n/a
- -----------------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (39.22) (4.01) (5.86) n/a n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS B (60.37) (4.96) (7.52)/(1)/ n/a n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS C (58.63) (4.60) n/a (7.92)% n/a
- -----------------------------------------------------------------------------------------------------------------
CLASS R (58.47) (4.13) n/a n/a 0.75%
- -----------------------------------------------------------------------------------------------------------------
MSCI EAFE INDEX (43.06) 2.10 1.18 1.21/(2)/ 7.77
- -----------------------------------------------------------------------------------------------------------------
MSCI EAFE GROWTH INDEX (42.46) 1.77 (1.01) (0.56)/(2)/ 6.68
- -----------------------------------------------------------------------------------------------------------------
LIPPER INTERNATIONAL MULTI-CAP GROWTH FUNDS AVERAGE (46.85) 1.14 1.46 0.99 6.69
- -----------------------------------------------------------------------------------------------------------------
LIPPER INTERNATIONAL FUNDS AVERAGE (44.23) 1.27 1.74 1.40 6.62
- -----------------------------------------------------------------------------------------------------------------
- -------------
The Morgan Stanley Capital International EAFE (Europe, Australasia, Far East)
Index ("MSCI EAFE Index") and the Morgan Stanley Capital International EAFE
(Europe, Australasia, Far East) Growth Index ("MSCI EAFE Growth Index",
collectively, the "MSCI EAFE Indices") and the Lipper International Multi-Cap
Growth Funds Average and the Lipper International Funds Average (collectively,
the "Lipper Averages") are unmanaged benchmarks that assume reinvestment of all
distributions, if any. The Lipper Averages exclude the effect of fees, sales
charges and taxes, and the MSCI EAFE Indices exclude the effect of expenses,
fees, sales charges and taxes. The MSCI EAFE Index is a free float-adjusted
market capitalization index that is designed to measure developed market equity
performance, excluding the US and Canada. The MSCI EAFE Growth Index is a free
float-adjusted market capitalization-weighted index that measures stock market
performance of the developed markets in Europe, Australasia, and the Far East
with a greater-than-average growth orientation. The Lipper International
Multi-Cap Growth Funds Average measures the performance of mutual funds that,
by portfolio practice, invest in a variety of market-capitalization ranges
without concentrating 75% of their equity assets in any one
market-capitalization range over an extended period of time. International
multi-cap growth funds typically have an above-average price-to-cash flow
ratio, price-to-book ratio, and three-year sales-per-share growth value
compared to the S&P/Citigroup World ex-US BMI. The Lipper International Funds
Average measures the performance of mutual funds that invest their assets in
securities with primary trading markets outside of the US. Lipper currently
classifies the Fund as an International Multi-Cap Growth Fund. Investors cannot
invest directly in an average or index.
Prior to March 31, 2000, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain portfolio management
services with respect to the investments of the Fund. From March 31, 2000 until
September 15, 2003, the assets of the Fund were managed exclusively by
Seligman. Since September 15, 2003, Wellington Management Company, LLP has been
employed as subadviser to provide portfolio management services to the Fund.
(1)The ten-year return for Class B shares reflects automatic conversions to
Class A shares approximately eight years after their date of purchase.
(2)From 5/31/99.
29
Seligman International Growth Fund
Fees and Expenses
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Each Class of shares has its own sales charge schedule
and is subject to different ongoing 12b-1 fees. Shareholder fees are charged
directly to your account. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C CLASS R
- --------------------------------------------------------------------------------------------------------------------------
Total Maximum Sales Charge (Load) 5.75% 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases (as a % of offering price) 5.75%/(2)/ none none none
- --------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) (CDSC) on Redemptions
(as a % of original purchase price or current net asset value, whichever is less) none/(2)/ 5% 1% 1%
- --------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- --------------------------------------------------------------------------------------------------------------------------
(as a percentage of average net assets)
- --------------------------------------------------------------------------------------------------------------------------
Management Fees 0.98% 0.98% 0.98% 0.98%
- --------------------------------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50%
- --------------------------------------------------------------------------------------------------------------------------
Other Expenses/(3)/ 0.87% 0.88% 0.88% 0.88%
- --------------------------------------------------------------------------------------------------------------------------
Total Gross Operating Expenses 2.10% 2.86% 2.86% 2.36%
- --------------------------------------------------------------------------------------------------------------------------
- -------------
(1) Less: Fee Waiver/Expense Reimbursement 0.04% 0.03% 0.03% 0.03%
- --------------------------------------------------------------------------------------------------------------------------
Net Operating Expenses (after Fee Waiver/Expense Reimbursement) 2.08% 2.83% 2.83% 2.33%
- --------------------------------------------------------------------------------------------------------------------------
(2)Certain investors who do not pay an initial sales charge (e.g., purchases of
$1,000,000 or more and purchases through certain retirement plans) may be
subject to a 1% CDSC if shares are sold within 18 months of purchase.
(3)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation (RSC)
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. (SDC), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC.
Through at least February 28, 2010, RiverSource Investments has
contractually agreed to waive its management fee and/or to reimburse the
Fund's expenses to the extent that the Fund's "other expenses" (i.e., those
expenses other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85% per
annum of the Fund's average daily net assets. This fee waiver and/or expense
reimbursement is reflected above in footnote (1).
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's net operating expenses through
February 28, 2010 (which reflect the contractual management fee waiver and/or
expense reimbursement described above) and (ii) after February 28, 2010, the
Fund's total annual operating expenses shown above adjusted to reflect those
fees and expenses no longer applicable to the Fund (i.e., the Non-Recurring
Charges and SDC's fees and expenses). Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $774 $1,164 $1,578 $2,729
--------------------------------------------------------------------------------
Class B 786 1,153 1,645 2,868+
--------------------------------------------------------------------------------
Class C 386 853 1,445 3,050
--------------------------------------------------------------------------------
Class R 336 703 1,196 2,553
--------------------------------------------------------------------------------
If you did not sell your shares at the end of each period, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------
Class A $774 $1,164 $1,578 $2,729
--------------------------------------------------------------------------------
Class B 286 853 1,445 2,868+
--------------------------------------------------------------------------------
Class C 286 853 1,445 3,050
--------------------------------------------------------------------------------
Class R 236 703 1,196 2,553
--------------------------------------------------------------------------------
- -------------
+ Class B shares will automatically convert to Class A shares approximately
eight years after purchase.
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
12B-1 FEES:
Fees paid out by each Class, pursuant to a plan adopted by the Fund under Rule
12b-1 of the Investment Company Act of 1940. The plan allows each Class to pay
distribution and/or service fees for the sale and distribution of its shares
and for providing services to shareholders.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund, including such things as
shareholder account services, registration, custody, auditing and legal fees.
30
Management of the Funds
The Board of Directors provides broad supervision over the affairs of each Fund.
On November 7, 2008, RiverSource Investments, completed its Acquisition of
Seligman, 100 Park Avenue, New York, New York 10017. With the Acquisition
completed and shareholders having previously approved (at a special meeting
held on November 3, 2008) a new investment management services agreement
between the Series (on behalf of each Fund) and RiverSource Investments (the
"Management Agreement"), RiverSource Investments is the new investment manager
of the Funds effective November 7, 2008. Shareholders of the Funds (other than
Seligman Global Technology Fund) also approved at the November meeting a
subadvisory agreement between RiverSource Investments and Wellington Management
Company, LLP.
RiverSource Investments, 200 Ameriprise Financial Center, Minneapolis,
Minnesota 55474, is also the investment manager of the other funds in the
RiverSource Group of Funds, which includes the "RiverSource" funds,
"RiverSource Partners" funds, "Threadneedle" funds and the "Seligman" funds,
and is a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise
Financial). Ameriprise Financial is a financial planning and financial services
company that has been offering solutions for clients' asset accumulation,
income management and protection needs for more than 110 years. In addition to
managing investments for the RiverSource Group of Funds, RiverSource
Investments manages investments for itself and its affiliates. For
institutional clients, RiverSource Investments and its affiliates provide
investment management and related services, such as separate account asset
management, and institutional trust and custody, as well as other investment
products.
Effective November 7, 2008, the Funds will pay RiverSource Investments a fee
for managing their respective assets (Seligman will no longer receive a
management fee effective November 7, 2008). The fees paid to RiverSource
Investments will be the same annual fee rates that were paid to Seligman prior
to November 7, 2008.
AFFILIATES OF RIVERSOURCE INVESTMENTS:
RiverSource Fund Distributors, Inc., formerly Seligman Advisors, Inc. (the
"distributor"):
A distributor of the Seligman mutual funds and the other funds in the
RiverSource Group of Funds; responsible for accepting orders for purchases
and sales of Fund shares.
RiverSource Services, Inc., formerly Seligman Services, Inc.:
A limited purpose broker/dealer; acts as the broker/dealer of record for
shareholder accounts that do not have a designated broker or financial
advisor.
Seligman Data Corp. (SDC):
Each Fund's shareholder service agent through May 8, 2009; provides
shareholder account services to the Funds at cost.
RiverSource Service Corporation (RSC)
Each Fund's transfer and shareholder service agent effective May 9, 2009;
provides or compensates others to provide transfer agency services to the
other funds in the RiverSource Group of Funds.
Ameriprise Financial:
Provides or compensates others to provide administrative services to the
Seligman funds, as well as the other funds in the RiverSource Group of Funds.
Each Fund pays RiverSource Investments a fee for its management services equal
to a percentage of that Fund's average daily net assets. Each Fund's fee rate
declines as that Fund's net assets increase. The management fee rates are:
.. Seligman Emerging Markets Fund
1.25% on first $1 billion of net assets
31
1.15% on next $1 billion of net assets
1.05% on net assets in excess of $2 billion
.. Seligman Global Growth Fund and Seligman International Growth Fund
1.00% on first $50 million of net assets
0.95% on next $1 billion of net assets
0.90% on net assets in excess of $1,050,000,000
.. Seligman Global Smaller Companies Fund
1.00% on first $100 million of net assets
0.90% on net assets in excess of $100 million
.. Seligman Global Technology Fund
1.00% on first $2 billion of net assets
0.95% on next $2 billion of net assets
0.90% on net assets in excess of $4 billion
For each of Seligman Emerging Markets Fund, Seligman Global Growth Fund and
Seligman International Growth Fund, through at least February 28, 2010,
RiverSource Investments has contractually agreed to waive its respective
management fee and/or to separately reimburse each Fund's expenses to the
extent that a Fund's "other expenses" (i.e., those expenses other than
management fees, 12b-1 fees, interest on borrowings, and extraordinary
expenses, including litigation expenses) exceed 0.85% per annum of that Fund's
average daily net assets.
On July 29, 2008, the Series' Board met to discuss, prior to shareholder
approval, the Management Agreement between the Series (on behalf of each Fund)
and RiverSource Investments, and a subadvisory agreement between RiverSource
Investments and Wellington Management Company, LLP ("Wellington Management")
relating to services provided to the Funds other than Seligman Global
Technology Fund (the "Subadvisory Agreement"). A discussion regarding the basis
for the Board approving the Management Agreement and the Subadvisory Agreement
was included in the proxy statement, dated August 27, 2008, and is available in
the Series' annual shareholder report for the year ended October 31, 2008.
Subadviser
Wellington Management Company, LLP, a Massachusetts limited liability
partnership with principal offices at 75 State Street, Boston, Massachusetts
02109, is the subadviser for Seligman Emerging Markets Fund, Seligman Global
Growth Fund, Seligman International Growth Fund and Seligman Global Smaller
Companies Fund. Wellington Management is a professional investment counseling
firm that provides investment services to investment companies, employee
benefit plans, endowments, foundations, and other institutions. Wellington
Management and its predecessor organizations have provided investment advisory
services for over 70 years. As of January 31, 2009, Wellington Management had
investment management authority with respect to approximately $402 billion in
assets (which does not include agency mortgage-backed security pass-through
accounts managed for the Federal Reserve).
RiverSource Investments pays Wellington Management a fee for the services it
provides. This fee does not increase the fee payable by any Fund.
PORTFOLIO MANAGEMENT
SELIGMAN EMERGING MARKETS FUND
Ms. Vera M. Trojan, CFA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the Fund since 2003.
Ms. Trojan joined Wellington Management as an investment professional in 1989.
SELIGMAN GLOBAL GROWTH FUND
Mr. Matthew D. Hudson, CFA, Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the Fund since
August 1, 2007 and has been involved in portfolio management and securities
analysis for the Fund since 2006. Mr. Hudson joined Wellington Management as an
investment professional in
32
2005. Prior to joining Wellington Management, Mr. Hudson was an investment
professional at American Century Investment Management (2000-2005).
Mr. Andrew S. Offit, CPA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2003. Mr. Offit joined Wellington Management as an
investment professional in 1997.
Mr. Jean-Marc Berteaux, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2003. Mr. Berteaux joined Wellington Management as
an investment professional in 2001.
Mr. Hudson is the lead portfolio manager of the Fund. Messrs. Offit and
Berteaux assist in the research and portfolio construction process. In
Mr. Hudson's absence, Messrs. Offit and Berteaux, individually, may purchase or
sell securities for the Fund.
SELIGMAN INTERNATIONAL GROWTH FUND
Mr. Andrew S. Offit, CPA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the Fund since 2003.
Mr. Offit joined Wellington Management as an investment professional in 1997.
Mr. Jean-Marc Berteaux, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2003. Mr. Berteaux joined Wellington Management as
an investment professional in 2001.
Mr. Matthew D. Hudson, CFA, Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2006. Mr. Hudson joined Wellington Management as an
investment professional in 2005. Prior to joining Wellington Management,
Mr. Hudson was an investment professional at American Century Investment
Management (2000-2005).
Mr. Offit is the lead portfolio manager of the Fund. Messrs. Berteaux and
Hudson assist in the research and portfolio construction process. In
Mr. Offits's absence, Messrs. Berteaux and Hudson, individually, may purchase
or sell securities for the Fund.
SELIGMAN GLOBAL SMALLER COMPANIES FUND
Mr. Jamie A. Rome, CFA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the North American
portion of the Fund since 2003. Mr. Rome joined Wellington Management as an
investment professional in 1994.
Mr. Simon H. Thomas, Vice President and Equity Portfolio Manager of Wellington
Management, has served as portfolio manager of the non-North American portion
of the Fund since 2006. Mr. Thomas joined Wellington Management as an
investment professional in 2002.
Messrs. Rome and Thomas coordinate the allocations among the North American and
non-North American portions of the Fund, which are intended to be regionally
neutral relative to the Fund's benchmark. However, the allocations may vary
from the benchmark from time to time based upon the investment process
described in the Fund's "Principal Investment Strategies."
SELIGMAN GLOBAL TECHNOLOGY FUND
Seligman Global Technology Fund is managed by Seligman's Technology Group.
Mr. Richard M. Parower, who joined Seligman in April 2000 and RiverSource
Investments in November 2008, is Portfolio Manager of Seligman Global
Technology Fund. Mr. Parower is also Portfolio Manager of Seligman Global
Technology Portfolio (a portfolio of Seligman Portfolios, Inc.). Mr. Parower
provides
33
portfolio management services for certain private and offshore funds, including
those with similar investment strategies as the Fund and others using long and
short strategies.
Mr. Paul H. Wick is head of Seligman's Technology Group, and Portfolio Manager
of Seligman Communications and Information Fund, Inc. since January 1990.
Mr. Wick is also Portfolio Manager of Seligman Communications and Information
Portfolio (a portfolio of Seligman Portfolios, Inc.). Mr. Wick provides
portfolio management services for certain private and offshore funds, including
those with similar investment strategies as the Fund and others using long and
short strategies. Mr. Wick joined Seligman (the Fund's predecessor investment
manager) in August 1987 as an Associate, Investment Research, and became Vice
President, Investment Officer in August 1991; he was named Managing Director in
January 1995 and was elected a member of Seligman's Board of Directors in
November 1997. Mr. Wick joined RiverSource Investments in November 2008.
Mr. Wick provides assistance to Mr. Parower in managing the Fund through his
research and contributions to the investment decisions with respect to
companies in the semiconductor and electronics capital equipment sectors.
Ms. Reema D. Shah joined Seligman in November 2000 and RiverSource Investments
in November 2008. Ms. Shah is Co-Portfolio Manager of Seligman Communications
and Information Fund, Inc., and Seligman Communication and Information
Portfolio. Ms. Shah provides portfolio management services for certain private
and offshore funds, including those with similar investment strategies as the
Fund and others using long and short strategies. Ms. Shah provides assistance
to Mr. Parower in managing the Fund through her research and contributions to
the investment decisions with respect to companies in the internet, consumer
and enterprise software, education, and financial exchanges sectors.
Mr. Ajay Diwan joined Seligman in February 2001 and RiverSource Investments in
November 2008. Mr. Diwan is Co-Portfolio Manager of Seligman Communications and
Information Fund, Inc. and Seligman Communication and Information Portfolio.
Mr. Diwan provides portfolio management services for certain private and
offshore funds, including those with similar investment strategies as the Fund
and others using long and short strategies. Mr. Diwan provides assistance to
Mr. Parower in managing the Fund through his research and contributions to the
investment decisions with respect to companies in the communications equipment,
data storage, information technology services, and electronic payment
processing industries.
Mr. Benjamin Lu joined Seligman in April 2005 and RiverSource Investments in
November 2008. Previously, he was an Associate Director for UBS from July 2002
to April 2005, covering the U.S. electronic manufacturing services and
electronic components sectors. Mr. Lu provides assistance to Mr. Parower in
managing the Fund through his research and contributions to the investment
decisions with respect to companies in the Asia technology sector as well as
the U.S. electronic manufacturing services and electronic components sectors.
The Series' Statement of Additional Information provides additional information
about the compensation of the individuals named above (the "Portfolio Team"),
other accounts managed by each member of the Portfolio Team and each member of
the Portfolio Team's ownership of securities of the Fund(s) for which they
provide portfolio management.
34
REGULATORY MATTERS
In late 2003, J. & W. Seligman & Co. Incorporated (Seligman) conducted an
extensive internal review concerning mutual fund trading practices. Seligman's
review, which covered the period 2001-2003, noted one arrangement that
permitted frequent trading in certain open-end registered investment companies
then managed by Seligman (the "Seligman Funds"); this arrangement was in the
process of being closed down by Seligman before September 2003. Seligman
identified three other arrangements that permitted frequent trading, all of
which had been terminated by September 2002. In January 2004, Seligman, on a
voluntary basis, publicly disclosed these four arrangements to its clients and
to shareholders of the Seligman Funds. Seligman 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 Seligman and Seligman Advisors, Inc. (now known as
RiverSource Fund Distributors, Inc.) relating to frequent trading in the
Seligman Funds. Seligman 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 Seligman had previously resolved the
underlying issue with the Independent Directors of the Seligman Funds and made
recompense to the affected Seligman Funds. There have been no further
developments with the SEC on this matter.
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., 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 then managed
by Seligman is and has been misleading. The NYAG included other related claims
and also claimed that the fees charged by Seligman to the Seligman Funds were
excessive.
On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, the Seligman Parties entered into a stipulation of settlement with
the NYAG and settled the claims made by the NYAG. Under the terms of the
settlement, Seligman will pay $11.3 million to four Seligman Funds as follows:
$150,000 to Seligman Global Growth Fund, $550,000 to Seligman Global Smaller
Companies Fund, $7.7 million to Seligman Communications and Information Fund
and $2.9 million to Seligman Global Technology Fund. This settlement resolves
all outstanding matters between the Seligman Parties and the NYAG.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings,
including routine litigation, class actions, and governmental actions,
concerning matters arising in connection with the conduct of their business
activities. Ameriprise Financial believes that the Seligman Funds are not
currently the subject of, and that neither Ameriprise Financial nor any of its
affiliates are the subject of, any pending legal, arbitration or regulatory
proceedings that are likely to have a material adverse effect on the Seligman
Funds or the ability of Ameriprise Financial or its affiliates to perform under
their contracts with the Seligman Funds. Information regarding certain legal
proceedings may be found in the Seligman Funds' shareholder reports and in the
SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as
necessary, 8-K filings with the SEC on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
35
Shareholder Information
Deciding Which Class of Shares to Buy
Each Class of a Fund represents an interest in the same portfolio of
investments. However, each Class has its own sales charge schedule, and its
ongoing 12b-1 fees may differ from other Classes. When deciding which Class of
shares to buy, you should consider, among other things:
.. The amount you plan to invest.
.. How long you intend to remain invested in that Fund, or another Seligman
mutual fund.
.. If you would prefer to pay an initial sales charge and lower ongoing 12b-1
fees, or be subject to a CDSC (i.e., a contingent deferred sales charge) and
pay higher ongoing 12b-1 fees, or in the case of employee benefit plans
eligible to purchase Class R shares, be subject to a CDSC for a shorter
period of time and pay higher ongoing 12b-1 fees.
.. Whether you may be eligible for reduced or no sales charges when you buy or
sell shares.
An authorized dealer or your financial advisor will be able to help you decide
which Class of shares best meets your needs.
In connection with the proposed merger of RiverSource Global Technology Fund
(which is not offered herein) into Seligman Global Technology Fund, the Series
anticipates renaming Seligman Global Technology Fund's current Class R shares
as Class R2 shares and offering four additional classes of shares, which are as
follows: Class I shares, Class R3 shares, Class R4 shares and Class R5 shares.
These share classes, which are described in Appendix A, are expected to be
effective before the end of third quarter 2009.
CLASS A
- --------------------------------------------------------------------------------
.. Initial sales charge on Fund purchases, as set forth below:
SALES CHARGE AS A % OF SALES CHARGE AS A % OF REGULAR DEALER DISCOUNT
AMOUNT OF YOUR INVESTMENT OFFERING PRICE/(1)/ NET AMOUNT INVESTED AS A % OF OFFERING PRICE
- -------------------------------------------------------------------------------------------------
Less than $ 50,000 5.75% 6.10% 5.00%
- -------------------------------------------------------------------------------------------------
$50,000 - $ 99,999 4.50 4.71 4.00
- -------------------------------------------------------------------------------------------------
$100,000 - $ 249,999 3.50 3.63 3.00
- -------------------------------------------------------------------------------------------------
$250,000 - $ 499,999 2.50 2.56 2.25
- -------------------------------------------------------------------------------------------------
$500,000 - $ 999,999 2.00 2.04 1.75
- -------------------------------------------------------------------------------------------------
$1,000,000 and over/(2)/ 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------
- -------------
(1)"Offering Price" is the amount that you actually pay for each Fund's shares;
it includes the initial sales charge.
(2)You will not pay an initial sales charge on purchases of $1 million or more,
but you will be subject to a 1% CDSC if you sell your shares within 18
months.
.. Annual 12b-1 fee (for shareholder services) of up to 0.25%.
.. No initial sales charge on reinvested dividends or capital gain
distributions.
Please consult your financial advisor for assistance in selecting the
appropriate class of shares.
36
INFORMATION REGARDING BREAKPOINT DISCOUNTS FOR CLASS A SHARES
Purchases of Class A shares by a "single person" may be eligible for the
reduced initial sales charges ("Breakpoint Discounts") that are described
above. For the purpose of the Breakpoint Discount thresholds described above,
"single persons" includes individuals and immediate family members (i.e.,
husband, wife, and minor child), as well as designated fiduciaries, certain
employee benefit plans and certain tax-exempt organizations. For more
information about what constitutes a "single person", please consult the
Series' Statement of Additional Information. "Single persons" may be eligible
for Breakpoint Discounts under the following circumstances:
Discounts and Rights of Accumulation. Breakpoint Discounts contemplated above
are also available under a Seligman mutual funds program referred to as "Rights
of Accumulation." Under this program, reduced sales charges will apply if the
sum of (i) the current amount being invested by a "single person" in Class A
shares of a Fund and in Class A shares of other Seligman mutual funds
(excluding Seligman Cash Management Fund), (ii) the current net asset value of
the Class A shares and Class B shares of other Seligman mutual funds already
owned by the "single person" other than Seligman Cash Management Fund (except
as provided in (iii)) and (iii) the current net asset value of Class A shares
of Seligman Cash Management Fund which were acquired by a "single person"
through an exchange of Class A shares of another Seligman mutual fund, exceeds
the Breakpoint Discount thresholds described for Class A shares above.
The value of the shares contemplated by items (ii) and (iii) above
(collectively, the "Prior Owned Shares") will be taken into account only if SDC
or the financial intermediary (if you are purchasing through a financial
intermediary) is notified that there are holdings eligible for aggregation to
meet the applicable Breakpoint Discount thresholds. If you are purchasing
shares through a financial intermediary, you should consult with your
intermediary to determine what information you will need to provide them in
order to receive the Breakpoint Discounts to which you may be entitled. This
information may include account records regarding shares eligible for
aggregation that are held at any financial intermediary, as well as a social
security or tax identification number. You may need to provide this information
each time you purchase shares. In addition, certain financial intermediaries
may prohibit you from aggregating investments in the Seligman mutual funds if
those investments are held in your accounts with a different intermediary or
with SDC.
Discounts and rights of accumulation apply with respect to your investments in
the Seligman mutual funds only. Any investment that you may have in shares of a
RiverSource fund, RiverSource Partners fund or Threadneedle fund will not be
aggregated with your investments in the Seligman mutual funds for the purpose
of determining eligibility for any Breakpoint Discount or reduced sales charge
(this same policy also applies in connection with a letter of intent, as
described below).
If you are dealing directly with SDC, you should provide SDC with account
information for any shares eligible for aggregation. This information includes
account records and a social security or tax identification number. You may
need to provide this information each time you purchase shares.
Letter of Intent. A letter of intent allows you to purchase Class A shares over
a 13-month period with the benefit of the Breakpoint Discounts discussed above,
based on the total amount of Class A shares of a Fund that the letter states
that you intend to purchase plus the current net asset value of the Prior Owned
Shares. Reduced sales charges may be applied to purchases made within a
13-month period starting from the date of receipt from you of a letter of
intent. In connection with such arrangement, a portion of the shares you
initially purchase will be held in escrow to provide for any sales charges that
might result if you fail to purchase the amount of shares contemplated by the
letter of intent assuming your purchases would not
37
otherwise be eligible for Breakpoint Discounts. These shares will be released
upon completion of the purchases contemplated by the letter of intent.
Eligible Employee Benefit Plans. Eligible employee benefit plans which have at
least $2 million in plan assets at the time of investment in the Fund 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 shares purchased within 18
months prior to plan termination.
Ascensus (formerly, BISYS) Plans. Plans that (i) own Class B shares of any
Seligman mutual fund and (ii) participate in Seligman Growth 401(k) through
Ascensus' third-party administration platform may, with new contributions,
purchase Class A shares at net asset value. Class A shares purchased at net
asset value are subject to a CDSC of 1% on shares purchased within 18 months
prior to plan termination.
CDSCs. Purchases of Class A shares of $1 million or more under any of the
programs discussed above are subject to a CDSC of 1% on redemptions made within
18 months of purchase, subject to certain limited exceptions set forth in the
Series' Statement of Additional Information.
Additional Information. For more information regarding Breakpoint Discounts,
please consult the Series' Statement of Additional Information. This
information can also be found at www.seligman.com via a hyperlink that is
designed to facilitate access to the information.
INFORMATION REGARDING SALES OF CLASS A SHARES AT NET ASSET VALUE
Class A shares of a Fund may be issued without a sales charge to present and
former directors, trustees, officers, employees (and their respective family
members) of such Fund, the other Seligman funds, RiverSource Investments, SDC
and RiverSource Investments' affiliates.
Class A shares may also be issued without an initial sales charge to the
following entities as further described in the Series' Statement of Additional
Information: certain registered unit investment trusts; separate accounts
established and maintained by certain insurance companies; registered
representatives and employees (and their spouses and minor children) of any
dealer or bank that has a sales agreement with the Funds' distributor;
financial institution trust departments; certain registered investment
advisers; accounts of certain financial institutions, authorized dealers or
investment advisors that charge account management fees; pursuant to certain
sponsored arrangements with organizations that make recommendations or permit
solicitations of its employees, members or participants; other Seligman funds
in connection with a deferred fee arrangement for outside Directors, or
pursuant to a "fund of funds" arrangement; certain "eligible employee benefit
plans"; those partners and employees of outside counsel to the Series or its
directors or trustees who regularly provide advice and services to the Series,
to other funds managed by RiverSource Investments, or to their directors or
trustees; in connection with sales pursuant to retirement plan alliance
programs that have a written agreement with the Funds' distributor; and to
participants in certain retirement and deferred compensation plans and trusts
for which certain entities act as broker-dealer, trustee, or recordkeeper.
For more information about those who can purchase shares of the Funds without a
sales charge, and other relevant information, please consult the Series'
Statement of Additional Information. In addition, this information can be found
at www.seligman.com via a hyperlink that is designed to facilitate access to
the information.
38
If you are eligible to purchase Class A shares without a sales charge, you
should inform your financial intermediary or SDC of such eligibility and be
prepared to provide proof thereof.
CLASS B
- --------------------------------------------------------------------------------
.. No initial sales charge on purchases.
.. A declining CDSC on shares sold within 6 years of purchase:
YEARS SINCE PURCHASE CDSC
- --------------------------------------------
Less than 1 year 5% Your purchase of Class B shares must be for less
- --------------------------------------------than $250,000, because if you are investing
1 year or more but less than 2 years 4 $250,000 or more, you will pay less in fees and
- --------------------------------------------charges if you buy another Class of shares.
2 years or more but less than 3 years 3 Please consult your financial advisor for
- --------------------------------------------assistance in selecting the appropriate class of
3 years or more but less than 4 years 3 shares.
- --------------------------------------------
4 years or more but less than 5 years 2
- --------------------------------------------
5 years or more but less than 6 years 1
- --------------------------------------------
6 years or more 0
- --------------------------------------------
.. Annual 12b-1 fee (for distribution and shareholder services) of 1.00%.
.. Automatic conversion to Class A shares approximately eight years after
purchase, resulting in lower ongoing 12b-1 fees. If you intend to hold your
Class B shares for less than six years, you should consider purchasing Class
C shares due to the shorter CDSC applicable to Class C. Additionally, if you
are eligible to purchase Class R shares, you should consider purchasing that
class, which has lower ongoing fees and a shorter CDSC.
.. No CDSC when you sell shares purchased with reinvested dividends or capital
gain distributions.
CLASS C
- --------------------------------------------------------------------------------
. No initial sales charge on Your purchase of Class C shares must
purchases. be for less than $1,000,000 because
if you invest $1,000,000 or more you
. A 1% CDSC on shares sold within will pay less in fees and charges if
one year of purchase. you buy Class A shares. Please
consult your financial advisor for
. Annual 12b-1 fee (for distribution assistance in selecting the
and shareholder services) of 1.00%. appropriate class of shares.
.. No automatic conversion to Class A shares, so you will be subject to higher
ongoing 12b-1 fees indefinitely.
.. No CDSC when you sell shares purchased with reinvested dividends or capital
gain distributions.
39
CLASS R*
- --------------------------------------------------------------------------------
.. No initial sales charge on purchases.
.. Annual 12b-1 fee (for distribution and shareholder services) of 0.50%.
.. A 1% CDSC on shares sold within one year of the plan's initial purchase of
Class R shares of a Fund.
.. No automatic conversion to Class A shares, so you will be subject to higher
ongoing 12b-1 fees indefinitely.
.. No CDSC when you sell shares purchased with reinvested dividends or capital
gain distributions.
Please consult your financial advisor for assistance in selecting the
appropriate class of shares.
- -------------
*Class R shares are not available to all investors. You may purchase Class R
shares only if you are a qualified or non-qualified employee benefit plan or
arrangement (other than a Section 403(b) plan sponsored by public educational
institutions) that provides for the purchase of Fund shares and has (1) less
than $20 million in assets (determined at the time of initial investment in
the Seligman Group of mutual funds); and (2) at least (a) $500,000 invested
in the Seligman Group of mutual funds or (b) 50 eligible employees to whom
such plan is made available. The distributor may waive the requirements
described in (2) above in connection with sales pursuant to a retirement plan
alliance program which has a written agreement with the distributor.
The Series has adopted a plan under Rule 12b-1 of the Investment Company Act of
1940 that allows each Class of the Funds to pay 12b-1 fees for the sale and
distribution of its shares and/or for providing services to shareholders.
Because each Fund's 12b-1 fees are paid out of each Class's assets on an
ongoing basis, over time these fees will increase your investment expenses and
may cost you more than other types of charges.
The Board of Directors of the Series believes that no conflict of interest
currently exists between each Fund's Classes of shares. On an ongoing basis,
the Directors, in the exercise of their fiduciary duties under the Investment
Company Act of 1940 and Maryland law, will seek to ensure that no such conflict
arises.
HOW CDSCS ARE CALCULATED
To minimize the amount of the CDSC you may pay when you sell your shares, each
Fund assumes that shares acquired through reinvested dividends and capital gain
distributions (which are not subject to a CDSC) are sold first. Shares that
have been in your account long enough so they are not subject to a CDSC are
sold next. After these shares are exhausted, shares will be sold in the order
they were purchased (earliest to latest). The amount of any CDSC that you pay
will be based on the shares' original purchase price or current net asset
value, whichever is less.
You will not pay a CDSC when you exchange shares of any Fund to buy the same
class of shares of any other Seligman mutual fund or when you exchange shares
of another Seligman mutual fund to buy the same class of shares of a Fund. For
the purpose of calculating the CDSC, when you exchange shares of a Fund for the
same class of another Seligman mutual fund, it will be assumed that you held
the shares of the other Seligman mutual fund since the date you originally
purchased the shares of that Fund. Similarly, when you exchange shares of
another Seligman mutual fund for shares of a Fund, it will be assumed that you
held the shares of a Fund since the date you originally purchased shares of the
other Seligman mutual fund.
40
The CDSC on Class A, Class B, Class C and Class R shares may be waived or
reduced in the following instances: on redemptions following death or
disability; in connection with certain distributions from certain retirement
plans, 403(b) plans, 401(k) plans and IRAs; in connection with shares sold to
current and retired Directors of the Series; in connection with shares sold to
a governmental entity which is prohibited by applicable laws from paying sales
charges and related fees; in connection with systematic withdrawals; in
connection with participation in certain 401(k) and retirement programs; on
incidental redemptions to cover administrative expenses; on redemptions of
shares initially purchased by an eligible employee benefit plan that are not in
connection with a plan-level termination; and in the case of Class A shares
purchased by certain institutional investors. The CDSC may also be waived on
any redemption of Class A shares that are purchased by an eligible employee
benefit plan that is a separate account client of RiverSource Investments at
the time of initial investment (or within the prior 30 days) in a Seligman
mutual fund. For more information, please consult the Series' Statement of
Additional Information or www.seligman.com.
Pricing of Fund Shares
When you buy or sell shares, you do so at the Class's net asset value ("NAV")
next calculated after the distributor or SDC, as the case may be, accepts your
request. However, in some cases, the Funds have authorized certain financial
intermediaries (and other persons designated by such financial intermediaries)
to receive purchase and redemption orders on behalf of a Fund. In such
instances, customer orders will be priced at the Class's NAV next calculated
after the authorized financial intermediary (or other persons designated by
such financial intermediary) receives the request. Any applicable sales charges
will be added to the purchase price for Class A shares. However, the
distributor may reject any request to purchase Fund shares under the
circumstances discussed later in this prospectus under the captions "Important
Policies That May Affect Your Account" and "Frequent Trading of Fund Shares."
Authorized financial intermediaries or their designees are responsible for
forwarding your order in a timely manner.
NAV: Computed separately for each Class by dividing that Class's share of the
net assets of a Fund (i.e., its assets less liabilities) by the total number
of out-standing shares of the Class.
If your buy or sell order is received by an authorized financial intermediary
or its designee after the close of regular trading on the New York Stock
Exchange ("NYSE"), the order will be executed at the Class's NAV calculated as
of the close of regular trading on the next NYSE trading day, subject to any
applicable sales charges. When you sell shares, you receive the Class's per
share NAV, less any applicable CDSC.
The NAV of each Fund's shares is determined each day, Monday through Friday, on
days that the NYSE is open for trading. Because the Funds have portfolio
securities that are primarily listed on foreign exchanges that may trade on
weekends or other days when the Funds do not price their shares, the value of a
Fund's portfolio securities may change on days when you may not be able to buy
or sell Fund shares.
With respect to the Funds, generally, portfolio securities are valued at the
last sale price on the securities exchange or securities market on which such
securities primarily are traded. However, since trading in foreign securities
markets is substantially completed each day at various times prior to the close
of regular trading on the NYSE, the closing prices for such securities may not
fully reflect events that occur after the local markets close but before the
close of the NYSE. The Board of Directors of the Series has approved "fair
value"
41
procedures under which a third party pricing service on a regular basis
recommends adjustments to the local closing prices of certain foreign equity
securities. The adjustments are based on a statistical analysis of the
historical relationships between the price movements of a security and
independent variables such as US market movements, sector movements, movements
in the American Depositary Receipt (ADR) of a security (if any) and movements
in country or regional exchange-traded funds or futures contracts. The factors
used vary with each security, depending on which factors have been most
important historically.
In addition, if RiverSource Investments concludes that the most recently
reported (or closing) price of a security held by a Fund is no longer valid or
reliable, or such price is otherwise unavailable, RiverSource Investments will
value the security at its fair value as determined in accordance with policies
and procedures approved by the Board of Directors of the Series. These fair
value procedures may be used to determine the value of a security held by a
Fund in the event of, among other things, natural disasters, acts of terrorism,
market disruptions, intra-day trading halts or 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 such security.
Opening Your Account
The Funds' shares are sold through authorized dealers or financial advisors who
have sales agreements with the distributor. There are several programs under
which you may be eligible for reduced sales charges. Ask an authorized dealer
or your financial advisor if any of these programs apply to you. Class R shares
are not available to all investors. For more information, see "Deciding Which
Class of Share to Buy--Class R."
YOU MAY BUY SHARES OF ANY FUND FOR ALL TYPES OF TAX-DEFERRED RETIREMENT
PLANS. CONTACT RETIREMENT PLAN SERVICES AT THE ADDRESS OR PHONE NUMBER LISTED
ON THE INSIDE BACK COVER OF THIS PROSPECTUS FOR INFORMATION AND TO RECEIVE
THE PROPER FORMS.
To make your initial investment in a Fund, contact an authorized dealer or your
financial advisor, or complete an account application and send it with your
check made payable to the applicable Fund directly to SDC at the address
provided on the account application. Your check must be in US dollars and be
drawn on a US bank. You may not use cash, checks made payable to cash, third
party checks, traveler's checks or credit card convenience checks for
investment. If you do not choose a Class, your investment will automatically be
made in Class A shares.
The required minimum initial investments per Fund are:
.. Regular (non-retirement) accounts: None (but certain Fund accounts are
subject to a $1,000 minimum Fund account balance; for details, see
"Important Policies That May Affect Your Account")
.. For accounts opened concurrently with Invest-A-Check(R):
. $ 100 to open if you will be making monthly investments
. $ 250 to open if you will be making quarterly investments
If you buy shares by check and subsequently sell the shares, SDC will not send
your proceeds until your check clears, which could take up to 15 calendar days
from the date of your purchase.
You will be sent a statement confirming your purchase and any subsequent
transactions in your account. You will also be sent quarterly and annual
statements detailing your transactions in that Fund and the other Seligman
funds you own under the same account number. Duplicate quarterly
42
account statements for the current year and duplicate annual statements for the
most recent prior calendar year will be sent to you free of charge. Copies of
year-end statements for prior years are available for a fee of $10 per year,
per account, with a maximum charge of $150 per account. Send your request and a
check for the fee to SDC at:
Seligman Data Corp.
P.O. Box 9759
Providence, RI 02940-9759
Share certificates representing shares of a Fund are no longer issued. Any
further purchases of shares (whether by further subscription or in connection
with the exercise of exchange privileges) will be recorded in book-entry form
only. However, if a share certificate has been previously issued to a
shareholder, the shareholder will be required to deliver the share certificate
to SDC, as shareholder servicing agent, before a request for redemption or
exchange of shares evidenced by that share certificate will be processed.
If you want to be able to buy, sell, or exchange shares by telephone, you
should elect telephone services on the account application when you open your
account. This will prevent you from having to complete a supplemental election
form (which may require a medallion signature guarantee) at a later date.
How to Buy Additional Shares
After you have made your initial investment, there are many options available
to make additional purchases of Fund shares.
Shares may be purchased through an authorized dealer or your financial advisor,
or you may send a check directly to SDC. Please provide either an investment
slip or a note that provides your name(s), Fund name and account number. Unless
you indicate otherwise, your investment will be made in the Class you already
own. Send investment checks to:
Seligman Data Corp.
P.O. Box 9766
Providence, RI 02940-9766
Your check must be in US dollars and be drawn on a US bank. You may not use
cash, checks made payable to cash, third party checks, traveler's checks or
credit card convenience checks for investment.
You may also use the following account services to make additional investments:
Invest-A-Check(R). You may buy Fund shares electronically from a savings or
checking account of an Automated Clearing House ("ACH") member bank. If your
bank is not a member of ACH, the Funds will debit your checking account by
preauthorized checks. For accounts opened concurrently with Invest-A-Check(R),
you must buy Fund shares at regular monthly intervals in fixed amounts of $100
or more, or regular quarterly intervals in fixed amounts of $250 or more. If
you use Invest-A-Check(R), you must continue to make automatic investments
until a Fund's minimum account balance $1,000 is met or your account may be
closed. For accounts opened with $1,000 or more, Invest-A-Check(R) investments
may be made for any amount.
Automatic Dollar-Cost-Averaging. If you have at least $5,000 in Seligman Cash
Management Fund, you may exchange uncertificated shares of that fund to buy
shares of the same class of another Seligman mutual fund at regular monthly
intervals in fixed amounts of $100 or more, or regular quarterly intervals in
fixed amounts of $250 or more. If you exchange Class A shares, you may pay an
initial sales charge to buy Fund shares.
Automatic CD Transfer. You may instruct your bank to invest the proceeds of a
maturing bank certificate of deposit in shares of a Fund. If you wish to use
this service, contact SDC, an authorized dealer or your financial advisor to
obtain the necessary forms. Because your bank may charge you a penalty, it is
not normally advisable to withdraw CD assets before maturity.
43
Dividends From Other Investments. You may have your dividends from other
companies invested in a Fund. (Dividend checks must include your name, account
number, Fund name, and class of shares.)
Direct Deposit. You may buy Fund shares electronically with funds from your
employer, the IRS, or any other institution that provides direct deposit. Call
SDC for more information.
How to Exchange Shares Among the Seligman Mutual Funds
The Seligman mutual funds are part of the RiverSource Group of Funds which, in
addition to RiverSource funds, includes RiverSource Partners funds and
Threadneedle funds. Each of the funds in the RiverSource Group of Funds shares
the same Board of Directors/Trustees. However, the Seligman mutual funds do not
share the same policies and procedures, as set forth in the Shareholder
Information section of this prospectus, as the other funds in the RiverSource
Group of Funds and may not be exchanged for shares of RiverSource funds,
RiverSource Partners funds or Threadneedle funds.
You may sell Fund shares to buy shares of the same class of another Seligman
mutual fund, or you may sell shares of another Seligman mutual fund to buy
shares of any Fund. Exchanges will be made at each fund's respective NAV. You
will not pay an initial sales charge when you exchange, unless you exchange
Class A shares of Seligman Cash Management Fund to buy shares of the same class
of a Fund or another Seligman mutual fund. If you are exchanging shares subject
to a CDSC, for purposes of determining CDSC holding periods, such shares will
be exchanged pro rata based on the different times of purchase.
Only your dividend and capital gain distribution options and telephone services
will be automatically carried over to any new fund. If you wish to carry over
any other account options (for example, Invest-A-Check(R) or Systematic
Withdrawals) to the new fund, you must specifically request so at the time of
your exchange.
See "The Seligman Mutual Funds" for a list of the funds available for exchange.
Before making an exchange, contact an authorized dealer, your financial advisor
or SDC to obtain the applicable fund prospectus(es). You should read and
understand a fund's prospectus before investing. Some funds may not offer all
Classes of shares.
How to Sell Shares
The easiest way to sell Fund shares is by phone. If you have telephone
services, you may be able use this service to sell Fund shares. Restrictions
apply to certain types of accounts. Please see "Important Policies That May
Affect Your Account."
When you sell Fund shares by phone, a check for the proceeds is sent to your
address of record. If you have current ACH bank information on file, you may
have the proceeds of the sale of your Fund shares directly deposited into your
bank account (typically within 2 business days after your shares are sold).
You may sell shares to a Fund through an authorized dealer or your financial
advisor. The Fund does not charge any fees or expenses, other than any
applicable CDSC, for this transaction; however, the authorized dealer or
financial advisor may charge a service fee. Contact an authorized dealer or
your financial advisor for more information.
You may always send a written request to sell Fund shares; however, it may take
longer to get your money.
To protect you and each Fund, if your written redemption request is for $25,000
or more, SDC will seek telephone confirmation from you, an authorized dealer or
your financial advisor before sending any money. If the proceeds are:
(1) $50,000 or more; (2) to be paid to someone other than the account owner;
(3) to be mailed to other than your address of record; (4) requested in
connection with an address change; or (5) requested within 30 days of an
address change on the account, then before sending any money, the Fund will
require:
44
.. A signed, written redemption request;
.. Telephone confirmation; and
.. A medallion signature guarantee.
Telephone confirmations will not affect the date on which your redemption
request is actually processed, but may delay the payment of proceeds.
If your Fund shares are represented by certificates, you will need to surrender
the certificates to SDC before you sell your shares.
MEDALLION SIGNATURE GUARANTEE:
Protects you and each Seligman mutual fund from fraud. It is an assurance
that the signature is genuine. A Medallion Signature Guarantee from The New
York Stock Exchange, Inc. Medallion Signature Guarantee Program, The
Securities Transfer Agents Medallion Program or The Stock Exchanges Medallion
Program is acceptable. These guarantees are the leading signature guarantee
programs recognized by most financial services associations throughout the
United States and Canada, and are endorsed by the Securities Transfer
Association. Non-medallion signature guarantees or notarization by a notary
public are not acceptable forms of signature guarantees.
You may need to provide additional documents to sell Fund shares if you are:
.. a corporation;
.. an executor or administrator;
.. a trustee or custodian; or
.. in a retirement plan.
Contact an authorized dealer, your financial advisor or SDC's Shareholder
Services Department for information on selling your shares under any of the
above circumstances.
You may also use the following account service to sell Fund shares:
Systematic Withdrawal Plan. If you have at least $5,000 in a Fund, you may
withdraw (sell) a fixed dollar amount (minimum of $50) of uncertificated shares
at regular intervals. A check will be sent to you at your address of record or,
if you have current ACH bank information on file, you may have your payments
directly deposited to your predesignated bank account, typically within 2
business days after your shares are sold. If you bought $1,000,000 or more of
Class A shares without an initial sales charge, your withdrawals may be subject
to a 1% CDSC if they occur within 18 months of purchase. If you own Class B,
Class C or Class R shares, you may annually withdraw 12%, 10% or 10%,
respectively, of the value of your accounts (at the time of election) without a
CDSC.
Redemption in Kind. Seligman Global Smaller Companies Fund reserves the right
to satisfy redemption requests, in whole or in part, with an inkind transfer of
that Fund's portfolio securities. Shareholders receiving a payment in the form
of securities may incur expenses, including brokerage expenses, in converting
these securities into cash. No shareholder will have the right to require any
distribution of any assets of the Fund (or any other Fund in the Series) in
kind.
Important Policies That May Affect Your Account
To protect you and other shareholders, each Fund reserves the right to:
.. Refuse an exchange request if the amount you wish to exchange equals or
exceeds the lesser of $1,000,000 or 1% of the Fund's net assets;
.. Refuse any request to buy Fund shares;
.. Reject any request received by telephone;
.. Suspend or terminate telephone services;
.. Reject a medallion signature guarantee that SDC believes may be fraudulent;
45
.. Close your Fund account if its value is below $1,000, provided, however,
that this policy does not apply to direct accounts held at SDC that are
retirement accounts (i.e., IRAs), unclaimed property accounts and Fund
shareholder accounts in the process of automatic conversion from the Fund's
Class B shares to Class A shares that aggregate to more than $1,000. The
Fund will notify you in writing at least 30 days before closing your Fund
account and anticipates permitting shareholders owning Fund shares directly
with SDC a period of one year to reach the $1,000 Fund minimum balance. If
you hold your shares through a financial intermediary, you should contact
that financial intermediary for their policies relating to minimum
investment requirements (which could be different from the Fund's
requirements);
.. Close your account if it does not have a certified taxpayer identification
number (this is your social security number for individuals); and
.. Request additional information to close your account to the extent required
or permitted by applicable law or regulations, including those related to
the prevention of money laundering.
Telephone Services
You, an authorized dealer or your financial advisor will be able to place the
following requests by telephone, unless you indicate on your account
application that you do not want telephone services:
.. Sell uncertificated shares (up to $50,000 per day, payable to account
owner(s) and mailed to the address of record or if you have current ACH bank
information on file, you may have your redemption proceeds directly
deposited to your bank account);
.. Exchange shares between Seligman mutual funds;
.. Change dividend and/or capital gain distribution options;
.. Change your address; and
.. Establish systematic withdrawals to address of record.
If you do not elect telephone services on your account application when you
open your account, or opened your account through an authorized dealer or your
financial advisor, telephone services must be elected on a supplemental
election form (which may require a medallion signature guarantee).
Restrictions apply to certain types of accounts:
.. Trust accounts on which the current trustee is not listed may not sell Fund
shares by phone;
.. Corporations may not sell Fund shares by phone;
.. IRAs may only exchange Fund shares or request address changes by phone; and
.. Group retirement plans may not sell Fund shares by phone; plans that allow
participants to exchange by phone must provide a letter of authorization
signed by the plan custodian or trustee and provide a supplemental election
form signed by all plan participants.
Unless you have current ACH bank information on file, you will not be able to
sell Fund shares by phone within 30 days following an address change.
Your telephone request must be communicated to an SDC representative. You may
not request any phone transactions via the automated access line.
You may cancel telephone services at any time by sending a written request to
SDC. Each account owner, by accepting or adding telephone services, authorizes
each of the other owners to make requests by phone. An authorized dealer or
your financial advisor may not establish telephone services without your
written authorization. SDC will send written confirmation to the address of
record when telephone services are added or terminated.
46
During times of heavy call volume, you may not be able to get through to SDC by
phone to request a sale or exchange of Fund shares. In this case, you may need
to send written instructions, and it may take longer for your request to be
processed. A Fund's NAV may fluctuate during this time.
The Funds and SDC will not be liable for processing requests received by phone
as long as it was reasonable to believe that the request was genuine. The Fund
and SDC will employ reasonable procedures to confirm whether instructions
received by telephone are genuine, and, if they do not, they may be liable for
any losses due to unauthorized or fraudulent instructions.
Repurchases. You can change your mind after requesting a sale of shares and use
all or part of the sale proceeds to purchase new shares of a Fund or any other
Seligman mutual fund.
The following applies to shareholders who sold Fund shares on or after
February 4, 2009 and wish to repurchase shares (the "New Repurchase Policy"):
If your original purchase was in Class A or Class B shares, you may use all or
part of the sale proceeds to purchase new Class A shares in any Seligman fund
account linked together for Rights of Accumulation purposes. Your repurchase
will be in Class A shares at net asset value, up to the amount of the sale
proceeds. Repurchases of Class B shares will also be made in Class A shares at
net asset value. Any CDSC paid upon redemption of your Class B shares will not
be reimbursed. If your original purchase was in Class C shares, you will be
allowed to reinvest in the same Class C account and fund you originally
purchased. In a Class C share repurchase, the CDSC you paid will be reinvested
and the shares will be deemed to have the original cost and purchase date for
purposes of applying the CDSC (if any) to subsequent redemptions. Systematic
withdrawals and purchases will be excluded from this policy.
The following applies to shareholders who sold Fund shares on or before
February 3, 2009 and wish to repurchase shares: You have the option of taking
advantage of the New Repurchase Policy described above, or you may use all or
part of the sale proceeds to purchase shares of a Fund or any other Seligman
mutual fund without paying an initial sales charge or, if you paid a CDSC when
you sold your shares, receiving a credit for the applicable CDSC (the "Former
Repurchase Policy").
If you sold Fund shares on or after February 4, 2009 and wish to take advantage
of the New Repurchase Policy, you must notify your financial advisor or SDC
within 90 days of the date your sale request was processed. If you sold Fund
shares on or before February 3, 2009 and wish to take advantage of either the
New Repurchase Policy or the Former Repurchase Policy, you must notify your
financial advisor or SDC within 120 days of the date your sale request was
processed (e.g., if you sold Fund shares on February 3, 2009, you must notify
your financial advisor or SDC by June 3, 2009). Contact your financial advisor
or SDC for information on required documentation. The repurchase privileges may
be modified or discontinued at any time and use of this option may have tax
consequences.
Frequent Trading of Fund Shares
As a matter of policy, each Fund discourages frequent trading of its shares. In
this regard, the Board of Directors of the Series has adopted written policies
and procedures that, subject to the limitations set forth below, are designed
to deter frequent trading that may be disruptive to the management of a Fund's
portfolio. If any Fund, the distributor, or SDC (the Funds' shareholder
servicing agent) (referred to collectively below as the "Seligman Entities")
determine that you have exchanged more than twice to and from the same Fund in
any three-month period, you will not be permitted to engage in further exchange
activity in such Fund for 90 days. The Seligman Entities may under certain
circumstances also refuse initial or additional purchases of a Fund's shares by
any person for any reason, including if that person is believed to be
47
engaging, or suspected of engaging, in trading of fund shares in excess of the
guidelines noted above (excluding purchases via a direct deposit through an
automatic payroll deduction program or purchases by the funds of Seligman Asset
Allocation Series, Inc. in the ordinary course of implementing their asset
allocation strategies). In addition, the Seligman Entities may under certain
circumstances refuse to accept exchange requests for accounts of any person
that has had a previous pattern (even if involving a different Seligman fund)
of trading in excess of the guidelines noted above. Furthermore, if you
purchase shares of a Fund through a financial intermediary, your ability to
purchase or exchange shares of a Fund could be limited if your account is
associated with a person (e.g., broker or financial advisor) previously
identified by the Seligman Entities as engaging in trading activity in excess
of the guidelines noted above. The Funds' policies do not permit exceptions to
be granted, and the policies are, to the extent possible, applied uniformly to
all accounts where beneficial ownership has been ascertained.
Shareholders and their financial intermediaries seeking to engage in excessive
trading practices may deploy a variety of strategies to avoid detection, and,
despite the efforts of the Seligman Entities to prevent excessive trading,
there is no guarantee that the Seligman Entities will be able to identify such
shareholders or curtail their trading practices. The ability of the Seligman
Entities to detect and curtail excessive trading practices may also be limited
by operational systems and technological limitations and hindered by financial
intermediaries purposefully or unwittingly facilitating these practices. In
addition, each Fund receives purchase, exchange and redemption orders through
financial intermediaries, some of whom hold shares through omnibus accounts,
and the Seligman Entities will not, under most circumstances, know of or be
able to reasonably detect excessive trading which may occur through these
financial intermediaries. Omnibus account arrangements and their equivalents
(e.g., bank trust accounts and retirement plans) are a common form of holding
shares of funds by many brokers, banks and retirement plan administrators.
These arrangements often permit the financial intermediary to aggregate many
client transactions and ownership positions and provide each Fund with combined
purchase and redemption orders. In these circumstances, the Seligman Entities
may not know the identity of particular shareholders or beneficial owners or
whether particular purchase or sale orders were placed by the same shareholder
or beneficial owner. A substantial percentage of shares of each Fund may be
held through omnibus accounts and their equivalents.
To the extent that the efforts of the Seligman Entities are unable to eliminate
excessive trading practices in a Fund, these practices may interfere with the
efficient management of such Fund's portfolio, hinder such Fund's ability to
pursue its investment objective and may reduce the returns of long-term
shareholders. Additionally, these practices may result in a Fund engaging in
certain activities to a greater extent than it otherwise would, such as
maintaining higher cash balances, using its line of credit to a greater extent
and engaging in additional portfolio transactions. Increased portfolio
transactions and use of the line of credit could correspondingly increase a
Fund's operating costs and decrease a Fund's investment performance.
Maintenance of a higher level of cash balances necessary to meet frequent
redemptions could likewise result in lower Fund investment performance during
periods of rising markets.
Investors who purchase shares of a Fund that invests in non-U.S. securities
and/or small-cap securities may be more likely to seek to use frequent trading
strategies to take advantage of potential arbitrage opportunities. Such
activity could adversely impact these Funds.
Dividends and Capital Gain Distributions
Each Fund generally pays any dividends from its net investment income and
distributes any net
48
capital gains realized on investments annually. It is expected that each Fund's
distributions will be primarily capital gains. Seligman Global Growth Fund,
Seligman Global Smaller Companies Fund, Seligman Global Technology Fund and
Seligman International Growth Fund have substantial capital loss carryforwards
which are available for offset against future net capital gains, expiring in
varying amounts through 2016. Accordingly, no capital gain distributions are
expected to be paid to shareholders of these Funds until net capital gains have
been realized in excess of the available capital loss carryforwards.
DIVIDEND:
A payment by a mutual fund, usually derived from a fund's net investment
income (dividends and interest earned on portfolio securities less expenses).
CAPITAL GAIN DISTRIBUTION:
A payment to mutual fund shareholders which represents profits realized on
the sale of securities in a fund's portfolio.
EX-DIVIDEND DATE:
The day on which any declared distributions (dividends or capital gains) are
deducted from a fund's assets before it calculates its NAV.
You may elect to:
(1)reinvest both dividends and capital gain distributions;
(2)receive dividends in cash and reinvest capital gain distributions; or
(3)receive both dividends and capital gain distributions in cash.
Your dividends and capital gain distributions will be reinvested if you do not
instruct otherwise or if you own a Fund's shares in a Seligman tax-deferred
retirement plan.
If you want to change your election, you may write to SDC at P.O. Box 9759,
Providence, RI 02940-9759, or, if you have telephone services, you, an
authorized dealer or your financial advisor may call SDC. Your request must be
received by SDC before the record date to be effective for that dividend or
capital gain distribution.
Dividends or capital gain distributions that are not reinvested will be sent by
check to your address of record or, if you have current ACH bank information on
file, directly deposited into your predesignated bank account, typically within
2 business days from the payable date.
Dividends and capital gain distributions are reinvested to buy additional Fund
shares on the payable date using the NAV of the ex-dividend date.
Dividends on Class B, Class C and Class R shares will be lower than the
dividends on Class A shares as a result of their higher 12b-1 fees. Capital
gain distributions will be paid in the same amount for each Class.
Taxes
The tax treatment of dividends and capital gain distributions is the same
whether you take them in cash or reinvest them to buy additional Fund shares.
Dividends paid by a Fund other than "qualified dividend income" are taxable to
you as ordinary income. Tax-deferred retirement plans are not taxed currently
on dividends or capital gain distributions or on gains resulting from the sale
or exchange of Fund shares.
You may be taxed at different rates on capital gains distributed by a Fund
depending on the length of time the Fund holds its assets.
When you sell Fund shares, any gain or loss you realize will generally be
treated as a long-term capital gain or loss if you held your shares for more
than one year, or as a short-term capital gain or loss if you held your shares
for one year or less.
49
However, if you sell Fund shares on which a long-term capital gain distribution
has been received and you held the shares for six months or less, any loss you
realize will be treated as a long-term capital loss to the extent that it
offsets the long-term capital gain distribution.
An exchange of a Fund's shares is a sale and may result in a gain or loss for
federal income tax purposes.
Each January, you will be sent information on the tax status of any
distributions made during the previous calendar year. Because each
shareholder's situation is unique, you should always consult your tax advisor
concerning the effect income taxes may have on your individual investment.
For further information, please see the Series' Statement of Additional
Information under the section entitled "Taxation of the Series."
50
The Seligman Mutual Funds
Shares of the following Seligman mutual funds may be exchanged for one another,
but shares of these Seligman mutual funds may not, at the current time, be
exchanged for shares of the other funds in the RiverSource Group of Funds.
EQUITY
- --------------------------------------------------------------------------------
SPECIALTY
- --------------------------------------------------------------------------------
Seligman Communications and Information Fund
Seeks capital appreciation by investing in companies operating in the
communications, information and related industries.
Seligman Emerging Markets Fund
Seeks long-term capital appreciation by investing primarily in equity
securities of companies in emerging markets.
Seligman Global Technology Fund
Seeks long-term capital appreciation by investing primarily in global
securities (US and non-US) of companies in the technology and technology
related industries.
SMALL COMPANY
- --------------------------------------------------------------------------------
Seligman Frontier Fund
Seeks growth of capital by investing primarily in small company growth stocks.
Seligman Global Smaller Companies Fund
Seeks long-term capital appreciation by investing in securities of smaller
companies around the world, including the US.
Seligman Smaller-Cap Value Fund
Seeks long-term capital appreciation by investing in common stocks of smaller
companies, deemed to be "value" companies by the investment manager.
MEDIUM COMPANY
- --------------------------------------------------------------------------------
Seligman Capital Fund
Seeks capital appreciation by investing in the common stocks of medium-sized
companies.
LARGE COMPANY
- --------------------------------------------------------------------------------
Seligman Common Stock Fund
Seeks total return through a combination of capital appreciation and current
income.
Seligman Global Growth Fund
Seeks capital appreciation by investing primarily in equity securities of
companies that have the potential to benefit from global economic or social
trends.
Seligman Growth Fund
Seeks long-term capital appreciation.
Seligman International Growth Fund
Seeks long-term capital appreciation by generally investing in securities of
large- and mid-capitalization growth companies in international markets.
Seligman Large-Cap Value Fund
Seeks long-term capital appreciation by investing in common stocks of large
companies, deemed to be "value" companies by the investment manager.
BALANCED
- --------------------------------------------------------------------------------
Seligman Income and Growth Fund
Seeks total return through a combination of capital appreciation and income
consistent with what is believed to be a prudent allocation between equity and
fixed-income securities.
REAL ESTATE SECURITIES
- --------------------------------------------------------------------------------
Seligman LaSalle Global Real Estate Fund
Seeks total return through a combination of
51
current income and long-term capital appreciation by investing in equity and
equity-related securities issued by global real estate companies, such as US
real estate investment trusts (REITs) and similar entities outside the US.
Seligman LaSalle Monthly Dividend Real Estate Fund
Seeks to produce a high level of current income with capital appreciation as a
secondary objective by investing in equity and equity-related securities issued
by real estate companies, such as real estate investment trusts (REITs).
FIXED-INCOME
- --------------------------------------------------------------------------------
INCOME
- --------------------------------------------------------------------------------
Seligman High-Yield Fund
Seeks a high level of current income and may also consider the potential for
capital appreciation consistent with prudent investment management. The Fund
invests primarily in non-investment grade, high-yield securities.
Seligman Core Fixed Income Fund
Seeks to produce a high level of current income consistent with prudent
exposure to risk. Capital appreciation is a secondary objective. The Fund
invests a significant portion of its assets in investment grade fixed-income
securities.
Seligman U.S. Government Securities Fund
Seeks a high level of current income consistent with prudent investment risk
primarily by investing in a diversified portfolio of securities issued or
guaranteed by the US government, its agencies or instrumentalities, or
government sponsored enterprises.
MUNICIPAL
- --------------------------------------------------------------------------------
Seligman Municipal Funds:
National Fund
Seeks maximum income, exempt from regular federal income taxes.
State-specific funds:*
Seek to maximize income exempt from regular federal income taxes and from
regular income taxes in the designated state.
California Louisiana New Jersey
.. High-Yield Maryland New York
.. Quality Massachusetts North Carolina
Colorado Michigan Ohio
Florida Minnesota Oregon
Georgia Missouri Pennsylvania
South Carolina
*A small portion of income may be subject to state and local taxes.
MONEY MARKET
- --------------------------------------------------------------------------------
Seligman Cash Management Fund
Seeks to preserve capital and to maximize liquidity and current income by
investing only in high-quality money market securities. The fund seeks to
maintain a constant net asset value of $1.00 per share.
ASSET ALLOCATION
- --------------------------------------------------------------------------------
SELIGMAN ASSET ALLOCATION SERIES, INC. offers four different asset-allocation
funds that pursue their investment objectives by allocating their assets among
other mutual funds in the Seligman Group.
Seligman Asset Allocation Aggressive Growth Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in aggressive growth-oriented domestic and international equity
securities weighted toward small- and medium-capitalization companies.
Seligman Asset Allocation Growth Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in growth-oriented domestic and international equity securities,
with a more even weighting among small-, medium- and large-capitalization
companies than Seligman Asset Allocation Aggressive Growth Fund.
52
Seligman Asset Allocation Moderate Growth Fund
Seeks capital appreciation by creating a portfolio of mutual funds that invests
in small-, medium- and large-capitalization domestic and international equity
securities as well as real estate securities and domestic fixed-income
securities.
Seligman Asset Allocation Balanced Fund
Seeks capital appreciation and preservation of capital with current income and
growth of income by creating a portfolio of mutual funds that invests in
medium- and large-capitalization and dividend-pro-ducing domestic and
international equity securities supplemented by a larger allocation to real
estate securities as well as domestic fixed-income securities, cash and cash
equivalents than Seligman Asset Allocation Moderate Growth Fund.
SELIGMAN TARGETHorizon ETF PORTFOLIOS, INC. offers five asset-allocation mutual
funds that seek to achieve their respective investment objectives by allocating
their assets among exchange-traded funds (ETFs).
Seligman TargETFund 2045
Seeks capital appreciation until migration, and thereafter capital appreciation
consistent with a strategy of steadily decreasing emphasis on capital
appreciation and steadily increasing emphasis on capital preservation and
current income as the year 2045 approaches.
Seligman TargETFund 2035
Seeks capital appreciation until migration, and thereafter capital appreciation
consistent with a strategy of steadily decreasing emphasis on capital
appreciation and steadily increasing emphasis on capital preservation and
current income as 2035 approaches.
Seligman TargETFund 2025
Seeks capital appreciation consistent with a strategy of steadily decreasing
emphasis on capital appreciation and steadily increasing emphasis on capital
preservation and current income as the year 2025 approaches.
Seligman TargETFund 2015
Seeks capital appreciation and current income consistent with a strategy of
steadily decreasing emphasis on capital appreciation and steadily increasing
emphasis on capital preservation and current income as the year 2015 approaches.
Seligman TargETFund Core
Seeks capital appreciation and preservation of capital with current income.
53
Other Information
PAYMENTS TO FINANCIAL INSTITUTIONS. The distributor and its affiliates make or
support additional cash payments out of their own resources (including profits
earned from providing services to the fund) to financial institutions,
including inter-company allocation of resources or payments to affiliated
broker-dealers, in connection with agreements between the distributor and
financial institutions pursuant to which these financial institutions sell fund
shares and provide services to their clients who are shareholders of the fund.
These payments and intercompany allocations (collectively, ''payments'') do not
change the price paid by investors in the fund or fund shareholders for the
purchase or ownership of fund shares of the fund, and these payments are not
reflected in the fees and expenses of the fund, as they are not paid by the
fund.
In exchange for these payments, a financial institution may elevate the
prominence or profile of the fund within the financial institution's
organization, and may provide the distributor and its affiliates with preferred
access to the financial institution's registered representatives or preferred
access to the financial institution's customers. These arrangements are
sometimes referred to as marketing and/or sales support payments, program
and/or shareholder servicing payments, or revenue sharing payments. These
arrangements create potential conflicts of interest between a financial
institution's pecuniary interest and its duties to its customers, for example,
if the financial institution receives higher payments from the sale of a
certain fund than it receives from the sale of other funds, the financial
institution or its representatives may be incented to recommend or sell shares
of the fund where it receives or anticipates receiving the higher payment
instead of other investment options that may be more appropriate for the
customer. Employees of Ameriprise Financial and its affiliates, including
employees of affiliated broker-dealers, may be separately incented to recommend
or sell shares of the fund, as employee compensation and business unit
operating goals at all levels are tied to the company's success. Certain
employees, directly or indirectly, may receive higher compensation and other
benefits as investment in the fund increases. In addition, management, sales
leaders and other employees may spend more of their time and resources
promoting Ameriprise Financial and its subsidiary companies, including
RiverSource Investments and the distributor, and the products they offer,
including the fund.
These payments are typically negotiated based on various factors including, but
not limited to, the scope and quality of the services provided by the financial
institution, its reputation in the industry, its ability to attract and retain
assets, its access to target markets, its customer relationships, the profile
the fund may obtain within the financial institution, and the access the
distributor or other representatives of the fund may have within the financial
institution for advertisement, training or education, including opportunities
to present at or sponsor conferences for the registered representatives of the
financial institution and its customers.
These payments are usually calculated based on a percentage of fund assets
owned through the financial institution and/or as a percentage of fund sales
attributable to the financial institution. Certain financial institutions
require flat fees instead of, or in addition to, these asset-based fees as
compensation for including or maintaining a fund on their platforms, and, in
certain situations, may require the reimbursement of ticket or operational
charges--fees that a financial institution charges its registered
representatives for effecting transactions in the fund. The amount of payment
varies by financial institution (e.g., initial platform set-up fees, ongoing
maintenance or service fees, or asset or sales based fees). The amount of
payments also varies by the type of sale. For instance, purchases of one fund
may warrant a greater or lesser amount of payments than purchases of another
fund. Additionally, sale and maintenance of shares on a stand alone basis may
result in a greater or
54
lesser amount of payments than the sale and maintenance of shares made through
a plan, wrap or other fee-based program. Payments to affiliates may include
payments as compensation to employees of RiverSource Investments who are
licensed by the distributor in respect of certain sales and solicitation
activity on behalf of the fund. These payments may be and often are significant.
Payments to affiliated broker-dealers are within the range of the payments the
distributor pays to similarly-situated third party financial institutions and
the payments such affiliated broker-dealers receive from third party fund
sponsors related to the sale of their sponsored funds. However, because of the
large amount of RiverSource fund assets (in aggregate) currently held in
customer accounts of the affiliated broker-dealers, the distributor and its
affiliates, in the aggregate, pay significantly more in absolute dollars than
other third-party fund sponsors pay to the affiliated broker-dealers for the
sale and servicing of their sponsored funds. This level of payment creates
potential conflicts of interest which the affiliated broker-dealers seek to
mitigate by disclosure and implementation of internal controls, as well as the
rules and regulations of applicable regulators.
From time to time, to the extent permitted by SEC and NASD rules and by other
applicable laws and regulations, the distributor and its affiliates may make
other reimbursements or payments to financial institutions or their registered
representatives, including non-cash compensation, in the form of gifts of
nominal value, occasional meals, tickets, or other entertainment, support for
due diligence trips, training and educational meetings or conference
sponsorships, support for recognition programs, and other forms of non-cash
compensation permissible under regulations to which these financial
institutions and their representatives are subject. To the extent these are
made as payments instead of reimbursement, they may provide profit to the
financial institution to the extent the cost of such services was less than the
actual expense of the service.
The financial institution through which you are purchasing or own shares of the
fund has been authorized directly or indirectly by the distributor to sell the
fund and/or to provide services to you as a shareholder of the fund. Investors
and current shareholders may wish to take such payment arrangements into
account when considering and evaluating any recommendations they receive
relating to fund shares. If you have questions regarding the specific details
regarding the payments your financial institution may receive from the
distributor or its affiliates related to your purchase or ownership of the
fund, please contact your financial institution.
The payments described in this section are in addition to fees paid by the fund
to the distributor under 12b-1 plans, which fees may be used to compensate
financial institutions for the distribution of fund shares and the servicing of
fund shareholders, or paid by the fund to SDC, which fees may be used to
support networking or servicing fees to compensate financial institutions for
supporting shareholder account maintenance, sub-accounting, plan recordkeeping
or other services provided directly by the financial institution to
shareholders or plans and plan participants, including retirement plans, 529
plans, Health Savings Account plans, or other plans, where participants
beneficially own shares of the fund.
ADMINISTRATION SERVICES. Ameriprise Financial, 200 Ameriprise Financial Center,
Minneapolis, Minnesota 55474, provides or compensates others to provide
administrative services to the funds. These services include administrative,
accounting, treasury, and other services. Administrative services are provided
without charge to the Seligman funds by Ameriprise Financial under a separate
administrative services agreement with each such fund, rather than by
RiverSource Investments under a Seligman fund's management agreement. The fees
under the administrative services agreement may be raised without shareholder
approval,
55
although RiverSource Investments expects that any increase would be offset by a
decrease in its management fee paid by a Seligman fund.
AFFILIATED PRODUCTS. RiverSource Investments also serves as investment manager
to Seligman funds and RiverSource funds which are structured to provide
asset-allocation services to shareholders of those funds by investing in shares
of other Seligman funds and RiverSource funds, respectively, (Funds of Funds)
and to discretionary managed accounts that invests exclusively in the funds
(collectively referred to as ''affiliated products''). These affiliated
products, individually or collectively, may own a significant percentage of the
fund's outstanding shares. The fund may experience relatively large purchases
or redemptions from the affiliated products. Although RiverSource Investments
may seek to minimize the impact of these transactions, for example, by
structuring them over a reasonable period of time or through other measures,
the fund may experience increased expenses as it buys and sells securities to
manage transactions for the affiliated products. In addition, because the
affiliated products may own a substantial portion of the fund, a redemption by
one or more affiliated products could cause the fund's expense ratio to
increase as the fund's fixed costs would be spread over a smaller asset base.
RiverSource Investments monitors expense levels and is committed to offering
funds that are competitively priced. RiverSource Investments reports to the
Board on the steps it has taken to manage any potential conflicts.
56
Financial Highlights
The tables below are intended to help you understand the financial performance
of certain of the Funds' classes 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 based on average
shares outstanding during a particular period. "Total return" shows the rate
that you would have earned (or lost) on an investment in each Class of a Fund,
assuming you reinvested all your dividends and capital gain distributions, if
any. Total returns do not reflect any sales charges or transaction costs on
your investment or taxes. If such charges, costs or taxes were included, the
returns presented below would have been lower. Deloitte & Touche LLP,
Independent Registered Public Accounting Firm, has audited this information.
Their report, along with the Series' financial statements, is included in the
Series' Annual Report, which is available upon request.
EMERGING MARKETS FUND
CLASS A
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $19.02 $12.62 $10.19 $ 7.67 $6.47
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss 0.03 (0.10) (0.03) (0.01) (0.04)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (9.07) 7.89 3.18 2.53 1.24
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (9.04) 7.79 3.15 2.52 1.20
- -----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized capital gain (2.58) (1.39) (0.72) -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $7.40 $19.02 $12.62 $10.19 $7.67
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (54.56)% 68.61% 32.80% 32.86% 18.55%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $33,558 $87,269 $55,515 $48,276 $34,066
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.35% 2.35% 2.35% 2.58% 3.03%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets 0.26% (0.74)% (0.29)% (0.08)% (0.53)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 123.49% 106.56% 110.49% 129.33% 106.84%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.54% 2.45% 2.46% 2.78%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets 0.07% (0.84)% (0.40)% (0.28)%
- -----------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
57
EMERGING MARKETS FUND
CLASS B
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $17.13 $11.58 $ 9.47 $7.19 $6.11
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.06) (0.19) (0.11) (0.07) (0.09)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (7.99) 7.13 2.94 2.35 1.17
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (8.05) 6.94 2.83 2.28 1.08
- -----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized capital gain (2.58) (1.39) (0.72) -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $6.50 $17.13 $11.58 $9.47 $7.19
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (54.84)% 67.30% 31.85% 31.71% 17.68%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $2,061 $8,732 $6,908 $6,317 $7,847
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 3.10% 3.10% 3.10% 3.33% 3.78%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.49)% (1.49)% (1.04)% (0.83)% (1.28)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 123.49% 106.56% 110.49% 129.33% 106.84%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 3.29% 3.20% 3.21% 3.53%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.68)% (1.59)% (1.15)% (1.03)%
- -----------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $17.20 $11.62 $ 9.50 $7.20 $6.12
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.06) (0.19) (0.11) (0.07) (0.09)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (8.04) 7.16 2.95 2.37 1.17
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (8.10) 6.97 2.84 2.30 1.08
- -----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized capital gain (2.58) (1.39) (0.72) -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $6.52 $17.20 $11.62 $9.50 $7.20
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (54.92)% 67.33% 31.85% 31.94% 17.65%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $17,209 $10,507 $6,101 $4,053 $2,243
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 3.10% 3.10% 3.10% 3.33% 3.78%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.49)% (1.49)% (1.04)% (0.83)% (1.28)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 123.49% 106.56% 110.49% 129.33% 106.84%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 3.30% 3.20% 3.21% 3.53%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.68)% (1.59)% (1.15)% (1.03)%
- -----------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
58
EMERGING MARKETS FUND
CLASS R
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $18.90 $12.58 $10.17 $ 7.67 $6.47
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss -- (0.14) (0.06) (0.03) (0.06)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (8.96) 7.85 3.19 2.53 1.26
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (8.96) 7.71 3.13 2.50 1.20
- -----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized capital gain (2.58) (1.39) (0.72) -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.36 $18.90 $12.58 $10.17 $7.67
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (54.47)% 68.16% 32.66% 32.59% 18.55%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $6,861 $9,018 $2,377 $708 $174
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.60% 2.60% 2.60% 2.83% 3.27%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets 0.01% (0.99)% (0.54)% (0.33)% (0.78)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 123.49% 106.56% 110.49% 129.33% 106.84%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.79% 2.70% 2.71% 3.03%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.18)% (1.09)% (0.65)% (0.53)%
- -----------------------------------------------------------------------------------------------------------------
GLOBAL GROWTH FUND
CLASS A
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $11.61 $ 8.59 $7.39 $7.31 $6.21
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.07) (0.12) (0.08) (0.03) (0.08)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (6.08) 3.14 1.28 0.11 1.18
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (6.15) 3.02 1.20 0.08 1.10
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $5.46 $11.61 $8.59 $7.39 $7.31
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (52.97)% 35.16% 16.24% 1.09% 17.71%#
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $11,981 $28,330 $25,477 $25,951 $31,668
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.10% 2.10% 2.10% 2.10% 2.30%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.71)% (1.31)% (0.97)% (0.40)% (1.17)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79.25% 86.05% 127.09% 269.07% 270.63%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.25% 2.31% 2.26% 2.31%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.85)% (1.52)% (1.13)% (0.61)%
- -----------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
59
GLOBAL GROWTH FUND
CLASS B
- ---------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------
2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $10.49 $ 7.82 $6.77 $6.75 $5.78
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.13) (0.18) (0.13) (0.08) (0.12)
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign
currency transactions* (5.46) 2.85 1.18 0.10 1.09
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (5.59) 2.67 1.05 0.02 0.97
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of year $4.90 $10.49 $7.82 $6.77 $6.75
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN: (53.29)% 34.14% 15.51% 0.30% 16.78%#
- ---------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $1,057 $3,309 $3,588 $5,800 $9,849
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.85% 2.85% 2.85% 2.85% 3.05%
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.46)% (2.06)% (1.72)% (1.15)% (1.92)%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79.25% 86.05% 127.09% 269.07% 270.63%
- ---------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 3.00% 3.06% 3.01% 3.06%
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.60)% (2.27)% (1.88)% (1.36)%
- ---------------------------------------------------------------------------------------------------------
CLASS C
- ---------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------
2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $10.49 $ 7.83 $6.78 $6.76 $5.79
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.12) (0.18) (0.13) (0.08) (0.12)
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign
currency transactions* (5.47) 2.84 1.18 0.10 1.09
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (5.59) 2.66 1.05 0.02 0.97
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of year $4.90 $10.49 $7.83 $6.78 $6.76
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN: (53.29)% 33.97% 15.49% 0.30% 16.75%#
- ---------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $5,264 $3,924 $3,169 $3,335 $3,208
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.85% 2.85% 2.85% 2.85% 3.05%
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.46)% (2.06)% (1.72)% (1.15)% (1.92)%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79.25% 86.05% 127.09% 269.07% 270.63%
- ---------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 3.00% 3.06% 3.01% 3.06%
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.60)% (2.27)% (1.88)% (1.36)%
- ---------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
60
GLOBAL GROWTH FUND
CLASS R
- ---------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------
2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $11.50 $ 8.53 $7.35 $7.29 $6.21
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.09) (0.14) (0.10) (0.05) (0.10)
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign
currency transactions* (6.01) 3.11 1.28 0.11 1.18
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (6.10) 2.97 1.18 0.06 1.08
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.40 $11.50 $8.53 $7.35 $7.29
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN: (53.04)% 34.82% 16.05% 0.82% 17.39%#
- ---------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $101 $29 $23 $2 $2
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.35% 2.35% 2.35% 2.35% 2.55%
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.96)% (1.56)% (1.22)% (0.65)% (1.42)%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79.25% 86.05% 127.09% 269.07% 270.63%
- ---------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.50% 2.56% 2.51% 2.56%
- ---------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.10)% (1.77)% (1.38)% (0.86)%
- ---------------------------------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
CLASS A
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $19.54 $18.78 $16.63 $13.67 $11.78
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.02) (0.04) (0.08) (0.09) (0.09)
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign
currency transactions* (9.22) 3.11 2.66 3.05 1.98
- ------------------------------------------------------------------------------------------------------------------
Total from investment operations (9.24) 3.07 2.58 2.96 1.89
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized capital gain (2.06) (2.31) (0.43) -- --
- ------------------------------------------------------------------------------------------------------------------
Proceeds from Regulatory Settlement 0.01/(1)/ -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $8.25 $19.54 $18.78 $16.63 $13.67
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (52.47)%/(1)/ 18.59% 20.30% 21.65% 16.04%#
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $50,206 $125,539 $119,268 $111,473 $87,189
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.91% 1.79% 1.82% 1.98% 2.13%
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.13)% (0.19)% (0.43)% (0.57)% (0.69)%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83.70% 72.24% 67.93% 76.40% 94.65%
- ------------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
61
GLOBAL SMALLER COMPANIES FUND
CLASS B
- ---------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $16.85 $16.61 $14.93 $12.38 $10.75
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.11) (0.15) (0.19) (0.18) (0.17)
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign
currency transactions* (7.77) 2.70 2.30 2.73 1.80
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations (7.88) 2.55 2.11 2.55 1.63
- ---------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized capital gain (2.06) (2.31) (0.43) -- --
Proceeds from Regulatory Settlement 0.01/(1)/ -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of year $6.92 $16.85 $16.61 $14.93 $12.38
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (52.82)%/(1)/ 17.77% 19.40% 20.60% 15.16%#
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $1,835 $7,222 $10,074 $16,721 $30,356
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.66% 2.54% 2.57% 2.73% 2.88%
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.88)% (0.94)% (1.18)% (1.32)% (1.44)%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83.70% 72.24% 67.93% 76.40% 94.65%
- ---------------------------------------------------------------------------------------------------------------
CLASS C
- ---------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $16.91 $16.67 $14.98 $12.40 $10.77
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.10) (0.15) (0.19) (0.19) (0.17)
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign
currency transactions* (7.81) 2.70 2.31 2.77 1.80
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations (7.91) 2.55 2.12 2.58 1.63
- ---------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized capital gain (2.06) (2.31) (0.43) -- --
Proceeds from Regulatory Settlement 0.01/(1)/ -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of year $6.95 $16.91 $16.67 $14.98 $12.40
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (52.80)%/(1)/ 17.70% 19.41% 20.81% 15.14%#
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $20,950 $8,402 $7,361 $6,084 $3,035
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.66% 2.54% 2.57% 2.73% 2.88%
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.88)% (0.94)% (1.18)% (1.32)% (1.44)%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83.70% 72.24% 67.93% 76.40% 94.65%
- ---------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
62
GLOBAL SMALLER COMPANIES FUND
CLASS R
- ---------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $19.34 $18.65 $16.56 $13.64 $11.78
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.05) (0.08) (0.12) (0.13) (0.12)
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign
currency transactions* (9.11) 3.08 2.64 3.05 1.98
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations (9.16) 3.00 2.52 2.92 1.86
- ---------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized capital gain (2.06) (2.31) (0.43) -- --
- ---------------------------------------------------------------------------------------------------------------
Proceeds from Regulatory Settlement 0.01/(1)/ -- -- -- --
Net asset value, end of period $8.13 $19.34 $18.65 $16.56 $13.64
- ---------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (52.62)%/(1)/ 18.30% 20.00% 21.41% 15.79%#
- ---------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $4.60 $620 $134 $107 $2
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.16% 2.04% 2.07% 2.23% 2.38%
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.38)% (0.44)% (0.68)% (0.82)% (0.94)%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83.70% 72.24% 67.93% 76.40% 94.65%
- ---------------------------------------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
CLASS A
- ------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $19.82 $15.42 $12.81 $11.51 $11.81
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.21) (0.21) (0.19) (0.10) (0.18)
- ------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions* (7.84) 4.61 2.80 1.40 (0.12)
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (8.05) 4.40 2.61 1.30 (0.30)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of year $11.77 $19.82 $15.42 $12.81 $11.51
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (40.62)% 28.53% 20.37% 11.29% (2.54)%#
- ------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $165,249 $305,156 $247,066 $236,998 $270,154
- ------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.76% 1.75% 1.77% 1.83% 1.83%
- ------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.23)% (1.21)% (1.30)% (0.81)% (1.57)%
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 171.14% 208.35% 195.49% 150.83% 133.51%
- ------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
63
GLOBAL TECHNOLOGY FUND
CLASS B
- --------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $17.38 $13.62 $11.40 $10.33 $10.67
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.29) (0.30) (0.26) (0.17) (0.25)
- --------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions* (6.85) 4.06 2.48 1.24 (0.09)
- --------------------------------------------------------------------------------------------------------
Total from investment operations (7.14) 3.76 2.22 1.07 (0.34)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of year $10.24 $17.38 $13.62 $11.40 $10.33
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN: (41.08)% 27.61% 19.47% 10.36% (3.19)%#
- --------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $7,086 $28,767 $32,534 $40,428 $57,700
- --------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.51% 2.50% 2.52% 2.58% 2.58%
- --------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.98)% (1.96)% (2.05)% (1.56)% (2.32)%
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 171.14% 208.35% 195.49% 150.83% 133.51%
- --------------------------------------------------------------------------------------------------------
CLASS C
- --------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $17.39 $13.63 $11.40 $10.33 $10.67
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.28) (0.30) (0.26) (0.17) (0.25)
- --------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions* (6.86) 4.06 2.49 1.24 (0.09)
- --------------------------------------------------------------------------------------------------------
Total from investment operations (7.14) 3.76 2.23 1.07 (0.34)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of year $10.25 $17.39 $13.63 $11.40 $10.33
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN: (41.06)% 27.59% 19.56% 10.36% (3.19)%#
- --------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $53,538 $27,633 $20,161 $18,001 $22,401
- --------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.51% 2.50% 2.52% 2.58% 2.58%
- --------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.98)% (1.96)% (2.05)% (1.56)% (2.32)%
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 171.14% 208.53% 195.49% 150.83% 133.51%
- --------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
64
GLOBAL TECHNOLOGY FUND
CLASS R
- --------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-----------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $19.62 $15.30 $12.74 $11.49 $11.80
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.24) (0.25) (0.22) (0.13) (0.21)
- --------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions* (7.76) 4.57 2.78 1.38 (0.10)
- --------------------------------------------------------------------------------------------------------
Total from investment operations (8.00) 4.32 2.56 1.25 (0.31)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.62 $19.62 $15.30 $12.74 $11.49
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN: (40.77)% 28.23% 20.09% 10.88% (2.63)%#
- --------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $2,067 $1,282 $492 $287 $197
- --------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.01% 2.00% 2.02% 2.08% 2.08%
- --------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (1.48)% (1.46)% (1.55)% (1.06)% (1.82)%
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 171.14% 208.35% 195.49% 150.83% 133.51%
- --------------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH FUND
CLASS A
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $21.82 $15.58 $12.56 $12.01 $9.90
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss -- (0.11) (0.09) (0.02) (0.15)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (10.95) 6.35 3.11 0.57 2.26
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (10.95) 6.24 3.02 0.55 2.11
- -----------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized capital gain (3.06) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $7.81 $21.82 $15.58 $12.56 $12.01
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (58.06)% 40.05% 24.04% 4.58% 21.31%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $17,997 $59,856 $47,192 $36,963 $30,553
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.08% 2.00% 2.08% 2.08% 2.80%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.01)% (0.62)% (0.61)% (0.13)% (1.39)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 344.77% 235.33% 165.09% 189.17% 241.12%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.12% 2.09% 2.32%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.05)% (0.62)% (0.37)%
- -----------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
65
INTERNATIONAL GROWTH FUND
CLASS B
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $19.43 $13.98 $11.35 $10.93 $9.08
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.10) (0.22) (0.18) (0.10) (0.22)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (9.52) 5.67 2.81 0.52 2.07
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (9.62) 5.45 2.63 0.42 1.85
- -----------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized capital gain (3.06) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $6.75 $19.43 $13.98 $11.35 $10.93
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (58.41)% 38.98% 23.17% 3.84% 20.37%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $2,083 $9,126 $7,852 $7,488 $6,537
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.83% 2.75% 2.83% 2.83% 3.55%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.76)% (1.37)% (1.36)% (0.88)% (2.14)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 344.77% 235.33% 165.09% 189.17% 241.12%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.87% 2.84% 3.07%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.80)% (1.37)% (1.12)%
- -----------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $19.46 $14.00 $11.37 $10.95 $9.09
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.09) (0.22) (0.18) (0.10) (0.22)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (9.54) 5.68 2.81 0.52 2.08
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (9.63) 5.46 2.63 0.42 1.86
- -----------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized capital gain (3.06) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $6.77 $19.46 $14.00 $11.37 $10.95
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (58.37)% 39.00% 23.13% 3.84% 20.46%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $10,403 $9,533 $6,916 $5,233 $2,574
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.83% 2.75% 2.83% 2.83% 3.55%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.76)% (1.37)% (1.36)% (0.88)% (2.14)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 344.77% 235.33% 165.09% 189.17% 241.12%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.87% 2.84% 3.07%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.79)% (1.37)% (1.12)%
- -----------------------------------------------------------------------------------------------------------------
- -------------
Seefootnotes on page 67.
66
INTERNATIONAL GROWTH FUND
CLASS R
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $21.65 $15.50 $12.53 $12.00 $9.90
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.04) (0.16) (0.12) (0.05) (0.18)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions* (10.83) 6.31 3.09 0.58 2.28
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (10.87) 6.15 2.97 0.53 2.10
- -----------------------------------------------------------------------------------------------------------------
Less Distributions:
Distributions from net realized capital gain (3.06) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.72 $21.65 $15.50 $12.53 $12.00
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (58.16)% 39.68% 23.70% 4.42% 21.21%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) $414 $531 $149 $110 $2
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.33% 2.25% 2.33% 2.33% 3.05%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.26)% (0.87)% (0.86)% (0.38)% (1.64)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 344.77% 235.33% 165.09% 189.17% 241.12%
- -----------------------------------------------------------------------------------------------------------------
Without expense reimbursement##:
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to net assets 2.37% 2.34% 2.57%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets (0.30)% (0.87)% (0.62)%
- -----------------------------------------------------------------------------------------------------------------
- -------------
* Certain per share amounts for periods prior to November 1, 2006 were
reclassified to conform to the current period's presentation.
# Excluding the effect of the payments received from Seligman (the predecessor
investment manager), total returns would have been as follows: for Global
Growth Fund Class A, B, C and R 17.56%, 16.63%, 16.60%, and 17.24%,
respectively; for Global Smaller Companies Fund Class A, B, C and R 15.84%,
14.95%, 14.93% and 15.58%, respectively; and for Global Technology Fund
Class A, B, C and R, (2.87)%, (3.52)%, (3.52)% and (2.96)%, respectively.
## Seligman (the predecessor investment manager) contractually agreed to waive
its fees and/or reimburse certain expenses of the Fund.
(1) In June 2008, the Global Smaller Companies Fund received its portion of the
proceeds from a regulatory settlement between an unaffiliated third party
and the SEC, which increased the total return by 0.09%.
67
How to Contact Us
The Funds
Write to Corporate Communications/Investor Relations Department
Ameriprise Financial, Inc.
200 Ameriprise Financial Center
Minneapolis, Minnesota 55474
Phone Toll-free in the US (800) 221-7844
Outside the US (212) 850-1864
Your Regular (Non-Retirement) Account
Write to Shareholder Service Agent/Seligman Group of Funds
Seligman Data Corp.
For investments P.O. Box 9766
into an account Providence, RI 02940-9766
For non-investment P.O. Box 9759
inquiries Providence, RI 02940-9759
For matters requiring 101 Sabin St.
overnight delivery Pawtucket, RI 02860
Phone Toll-free in the US (800) 221-2450
Outside the US (212) 682-7600
Your Retirement Account
Write to Retirement Plan Services
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Phone Toll-free (800) 445-1777
24-hour automated telephone access is available by calling (800) 622-4597 on a
touchtone telephone. You will have instant access to price, yield, account
balance, most recent transaction, and other information.
68
For More Information
The information below is available, without charge, upon request by calling
toll-free 800-221-2450 in the US or collect 212-682-7600 outside the US. You
may also call these numbers to request other information about a Fund or to
make shareholder inquiries.
The Statement of Additional Information ("SAI") contains additional information
about each Fund. It is on file with the Securities and Exchange Commission, or
SEC, and is incorporated by reference into (is legally part of) this Prospectus.
Annual/Semi-Annual Reports contain additional information about each Fund's
investments. In the Annual Report, you will find a discussion of the market
conditions and investment strategies that significantly affected each Fund's
performance during its last fiscal year.
The SAI and most recent Annual/Semi-Annual Reports are also available, free of
charge, at www.seligman.com.
Information about each Fund, including the Prospectus and SAI, can be viewed
and copied at the SEC's Public Reference Room in Washington, DC. For more
information about the operation of the Public Reference Room, call
(202) 551-8090. The Prospectus, SAI, Annual/Semi-Annual Reports and other
information about a Fund are also available on the EDGAR Database on the SEC's
Internet site: www.sec.gov.
The website references in this Prospectus are inactive textual references, and
information contained in or otherwise accessible through these websites does
not form a part of this Prospectus.
Copies of this information may also be obtained, upon payment of a duplicating
fee, by electronic request at the following E-mail address: publicinfo@sec.gov,
or by writing: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102.
SEC File Number: 811-6485
[GRAPHIC]
PROSPECTUS
March 2, 2009
Class I Shares
Seligman
Global Fund Series, Inc.
Investing Around the World for Capital Appreciation
.. Seligman Emerging Markets Fund
.. Seligman Global Growth Fund
.. Seligman Global Smaller Companies Fund
.. Seligman International Growth Fund
As with all mutual funds, the Securities and Exchange Commission has neither
approved nor disapproved these Funds, and it has not determined this Prospectus
to be accurate or adequate. Any representation to the contrary is a criminal
offense.
An investment in these Funds or any other fund cannot provide a complete
investment program. The suitability of an investment in a Fund should be
evaluated based on the investment objective, strategies and risks described in
this Prospectus, considered in light of all of the other investments in your
portfolio, as well as your risk tolerance, financial goals, and time horizons.
We recommend that you consult an authorized dealer or your financial advisor to
determine if one or more of these Funds is suitable for you.
Not FDIC Insured [_] May Lose Value [_] No Bank Guarantee
EQSGFS1 3/2009 CI
[LOGO]
SELIGMAN
INVESTMENTS
- --------------------------------
EXPERIENCE . INSIGHT . SOLUTIONS
Table of Contents
This Prospectus contains information about four of the separate funds within
Seligman Global Fund Series, Inc. (the "Series").
THE FUNDS
A discussion of the investment objectives, strategies, risks, performance and
expenses of the Funds.
Seligman Emerging Markets Fund.............................. 1
Seligman Global Growth Fund................................. 7
Seligman Global Smaller Companies Fund...................... 13
Seligman International Growth Fund.......................... 19
Management of the Funds..................................... 25
Subadviser.................................................. 26
SHAREHOLDER INFORMATION
Pricing of Fund Shares...................................... 30
How to Buy Fund Shares...................................... 31
How to Exchange Shares Among the Seligman Mutual Funds...... 31
How to Sell Shares.......................................... 32
Important Policies That May Affect Your Account............. 32
Frequent Trading of Fund Shares............................. 32
Dividends and Capital Gain Distributions.................... 33
Taxes....................................................... 34
The Seligman Mutual Funds................................... 35
FINANCIAL HIGHLIGHTS.............................................. 41
HOW TO CONTACT US................................................. 44
FOR MORE INFORMATION. back cover
The website references in this Prospectus are inactive textual references and
information contained in or otherwise accessible through these websites does
not form a part of this Prospectus.
Effective November 7, 2008, RiverSource Investments, LLC ("RiverSource
Investments"), investment manager to the RiverSource Group of Funds, and a
wholly owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"),
completed its acquisition (the "Acquisition") of J. & W. Seligman & Co.
Incorporated ("Seligman"). With the Acquisition completed and shareholders of
each of the Funds offered herein having previously approved (at a special
meeting held on November 3, 2008) a new investment management services
agreement between RiverSource Investments and the Series (on behalf of each
Fund), RiverSource Investments became the new investment manager of the Funds
effective November 7, 2008. Shareholders of the Funds also approved at the
November meeting a subadvisory agreement between RiverSource Investments and
Wellington Management Company, LLP.
RiverSource Complex of Funds
The RiverSource Group of Funds includes a comprehensive array of funds from
RiverSource Investments, including the Seligman funds. RiverSource Investments
has also partnered with a number of professional investment managers, including
its affiliate, Threadneedle Investments, to expand the array of funds offered
in the RiverSource Group of Funds. Although the Seligman funds share the same
Board of Directors/Trustees as the RiverSource funds (the "Board") they do not
currently have the same policies and procedures, and may not be exchanged for
shares of the RiverSource funds, RiverSource Partners funds or Threadneedle
funds. Please see the Statement of Additional Information (SAI) for a complete
list of mutual funds included in the RiverSource Group of Funds.
The Funds
Seligman Emerging Markets Fund
- --------------------------------------------------------------------------------
On January 8, 2009, the Series' Board of Directors approved in principle the
merger of Seligman Emerging Markets Fund into Threadneedle Emerging Markets
Fund, a fund that seeks to provide shareholders with long-term capital growth.
More information about Threadneedle Emerging Markets Fund and the proposed
merger will be included in proxy materials.
Completion of the merger is subject to approval by shareholders of Seligman
Emerging Markets Fund. It is currently anticipated that proxy materials
regarding the merger will be distributed to shareholders during the first or
second quarter of 2009, and that a meeting of shareholders to consider the
merger will be scheduled for the second quarter of 2009.
INVESTMENT OBJECTIVE
The Seligman Emerging Markets Fund's investment objective is long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund uses the following principal investment strategies to seek its
investment objective:
The Fund generally invests at least 80% of its assets in equity securities of
companies that conduct their principal business activities in emerging markets,
are organized under the laws of or maintain their principal place of business
in emerging markets, or whose securities are traded principally on exchanges in
emerging markets.
The Fund will focus its investments in those emerg ing markets in which the
investment manager believes the economies are developing strongly and markets
are becoming more liquid, or other emerging markets that meet the portfolio
manager's criteria for investability. The Fund seeks to benefit from policies
of economic development being adopted in many emerging markets. These policies
include domestic price reform, reducing internal budget deficits,
privatization, encouraging foreign investments and developing capital markets.
The Fund combines a bottom-up investment style with top-down analysis of
regions, countries and sectors. This means the portfolio manager incorporates
analysis of individual companies along with analysis of individual sectors,
countries and regions.
EMERGING MARKET:
A market in a developing country or a market represented in the Morgan
Stanley Capital International Emerging Markets Index. Developing countries
are those classified by the World Bank as low-income or middle-income
economies, regardless of their particular stage of development.
In selecting individual securities, the portfolio manager looks to identify
companies that it believes display one or more of the following:
.. Operate in growing markets
.. Attractive valuations relative to cash earnings forecasts or other valuation
criteria
.. Unique sustainable competitive advantages (e.g., market share, proprietary
products)
.. Improving industry or country fundamentals
Following stock selection, the portfolio manager then focuses on portfolio
construction that considers top-down risk control based on such factors as:
.. Relative economic growth potential of the various economies and securities
markets
.. Political, financial, and social conditions influencing investment
opportunities
.. Relative rates of earnings growth
1
Seligman Emerging Markets Fund
.. Interest rate outlook and expected levels of inflation
.. Market prices relative to historic averages
The Fund generally sells a stock if the portfolio manager believes its target
price has been reached, its earnings are disappointing, its revenue growth has
slowed, its underlying fundamentals have deteriorated, or there are
deteriorating industry or country fundamentals. The Fund may also sell or trim
a stock if the portfolio manager believes, from a risk control perspective, the
stock's position size is inappropriate for the portfolio. Also, stocks may be
sold when negative country, currency, or general industry factors affect a
company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The securities may be
listed on a US or foreign stock exchange or traded in US or foreign
over-the-counter markets. The Fund normally concentrates its investments in
common stocks; however, it may invest in other types of equity securities,
including securities convertible into or exchangeable for common stock,
depositary receipts, and rights and warrants to purchase common stock. The Fund
also may invest up to 20% of its assets in preferred stock and investment-grade
or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in the price of securities it holds in its
portfolio. A put option gives the Fund the right to sell an underlying security
at a particular price during a fixed period of time. Forward foreign currency
exchange contracts and put options on securities may not be available to the
Fund on reasonable terms in many situations, and the Fund may frequently choose
not to enter into such contracts or purchase such options even when they are
available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, or other conditions. This could
prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors.
Shareholders will be provided with at least 60 days prior written notice of any
change to the "80%" investment policy described in the second paragraph under
"Principal Investment Strategies."
2
Seligman Emerging Markets Fund
There is no guarantee the Fund will achieve its objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. The Fund's net asset value may fluctuate
more than other equity funds or other global equity funds that do not invest
heavily in emerging markets. You may experience a decline in the value of your
investment and you could lose money if you sell your shares at a price lower
than you paid for them. Emerging countries may have relatively unstable
governments, economies based on less diversified industrial bases, and
securities markets that trade a smaller number of securities. Companies in
emerging markets are often smaller, less seasoned, and more recently organized
than many US companies.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuation, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks. Investing in emerging markets involves a greater
degree of risk, and an investment in the Fund should be considered speculative.
Investments in smaller companies typically involve greater risks than
investments in larger companies. Small company stocks, as a whole, may
experience larger price fluctuations than large company stocks or other types
of investments. Some small companies may have shorter operating histories, less
experienced management and limited product lines, markets and financial and
managerial resources.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. The Fund may, however, invest a substantial
percentage of its assets in certain industries or economic sectors believed by
the portfolio manager to offer good investment opportunities. If an industry or
economic sector in which the Fund is invested falls out of favor, the Fund's
performance may be negatively affected.
To the extent the Fund invests some of its assets in other higher-risk
securities, such as illiquid securities, it may be subject to higher price
volatility. Securities traded in the over-the-counter markets involve risks,
including the risk that the counterparty will be unable or unwilling to meet
its obligations. In addition, since over-the-counter markets are generally less
liquid than exchanges, the Fund may not be able to sell when the portfolio
manager deems it advantageous to do so. If the Fund invests in ETFs,
shareholders would bear not only the Fund's expenses (including operating
expenses and management fees), but also similar expenses of the ETFs, and the
Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the
3
Seligman Emerging Markets Fund
conversion feature, the market value of convertible securities tends to vary
with fluctuations in the market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
PORTFOLIO HOLDINGS
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
PAST PERFORMANCE
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class I shares has
varied from year to year, as well as how the performance compares to two
measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis to assist you in comparing the
returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past (before and after taxes), however, is not necessarily an
indication of how the Fund will perform in the future.
Prior to November 7, 2008, the Fund was managed by J. & W. Seligman & Co.
Incorporated (Seligman). In the past, Seligman contractually waived its
management fee or reimbursed the Fund's expenses (with certain exceptions).
Through at least February 28, 2010, RiverSource Investments, the Fund's new
investment manager, has contractually agreed to waive its management fee and/or
to reimburse the Fund's expenses to the extent that the Fund's "other expenses"
(i.e., those expenses other than management fees, 12b-1 fees, interest on
borrowings, and extraordinary expenses, including litigation expenses) exceed
0.85% per annum of the Fund's average daily net assets. Absent prior management
fee waivers/expense reimbursements, returns presented in the bar chart and
table would have been lower.
Both the bar chart and table below the bar chart assume that all dividends and
capital gain distributions, if any, were reinvested. Class I shares are not
subject to any sales charges.
After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation and
may differ from those shown, and after-tax returns shown are not relevant to
investors who hold their shares through taxdeferred arrangements, such as
401(k) plans or individual retirement accounts (IRAs). The returns after taxes
on distributions and sale of Fund shares may be greater than other returns
presented for the same periods due to tax benefits from losses realized on the
sale of Fund shares.
4
Seligman Emerging Markets Fund
CLASS I ANNUAL TOTAL RETURN - CALENDAR YEARS
[CHART]
Best calendar quarter return: 27.94% - quarter ended 6/30/03.
Worst calendar quarter return: -26.50% - quarter ended 12/31/08.
CLASS I AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
SINCE
ONE FIVE INCEPTION
YEAR YEARS 11/30/01
- --------------------------------------------------------------------------------------
CLASS I
- --------------------------------------------------------------------------------------
Return before taxes (51.42)% 8.69% 13.37%
- --------------------------------------------------------------------------------------
Return after taxes on distributions (52.22) 6.89 12.05
- --------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (32.51) 7.52 11.85
- --------------------------------------------------------------------------------------
MSCI EMERGING MARKETS (EM) INDEX (53.18) 8.01 12.68
- --------------------------------------------------------------------------------------
LIPPER EMERGING MARKETS FUNDS AVERAGE (55.41) 6.20 11.47
- --------------------------------------------------------------------------------------
- -------------
The Morgan Stanley Capital International Emerging Markets Index ("MSCI Emerging
Markets (EM) Index") and the Lipper Emerging Markets Funds Average are
unmanaged benchmarks that assume the reinvestment of all distributions, if any.
The Lipper Emerging Markets Funds Average excludes the effect of fees, sales
charges and taxes, and the MSCI Emerging Markets (EM) Index excludes the effect
of expenses, fees, sales charges and taxes. The MSCI Emerging Markets (EM)
Index is a free float-adjusted market capitalization index that is designed to
measure equity market performance in the global emerging markets. The Lipper
Emerging Markets Funds Average comprises mutual funds that seek long-term
capital appreciation by investing at least 65% of total assets in emerging
market equity securities, where "emerging market" is defined by a country's
gross national product (GNP) per capita or other economic measures. Investors
cannot invest directly in an average or index.
Prior to March 31, 2000, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain portfolio management
services with respect to the investments of the Fund. From March 31, 2000 until
September 15, 2003, the assets of the Fund were managed exclusively by
Seligman. Since September 15, 2003, Wellington Management Company, LLP has been
employed as subadviser to provide portfolio management services to the Fund.
5
Seligman Emerging Markets Fund
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases none
- -----------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge (Load) (CDSC) on Redemptions none
- -----------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- -----------------------------------------------------------------------------------
(as a percentage of average net assets)
- -----------------------------------------------------------------------------------
Management Fees 1.25%
- -----------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees none
- -----------------------------------------------------------------------------------
Other Expenses/(1)/ 0.67%
- -----------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.92%
- -----------------------------------------------------------------------------------
- -------------
(1)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation ("RSC")
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. ("SDC"), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC.
Through at least February 28, 2010, RiverSource Investments has
contractually agreed to waive its management fee and/or to reimburse the
Fund's expenses to the extent that the Fund's "other expenses" (i.e., those
expenses other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85 per annum
of the Fund's average daily net assets. For the fiscal year ended October
31, 2008, no fee waiver or expense reimbursement was required for Class I
shares.
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's total annual operating expenses
shown above (which reflects the Non-Recurring Charges, SDC's estimated fees and
expenses from March 2, 2009 through on or about May 8, 2009 and RSC's estimated
fees and expenses from on or about May 9, 2009 through February 28, 2010) and
(ii) after February 28, 2010, the Fund's total gross operating expenses shown
above adjusted to reflect those fees and expenses no longer applicable to the
Fund (i.e., the Non-Recurring Charges and SDC's fees and expenses). Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------
Class I $195 $580 $990 $2,136
----------------------------------------
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund including such things as shareholder
account services, registration, custody, auditing and legal fees.
6
Seligman Global Growth Fund
- --------------------------------------------------------------------------------
On January 8, 2009, the Series' Board of Directors approved in principle the
merger of Seligman Global Growth Fund into Threadneedle Global Equity Fund, a
fund that seeks to provide shareholders with long-term capital growth. More
information about Threadneedle Global Equity Fund and the proposed merger will
be included in proxy materials.
Completion of the merger is subject to approval by shareholders of Seligman
Global Growth Fund. It is currently anticipated that proxy materials regarding
the merger will be distributed to shareholders during the first or second
quarter of 2009, and that a meeting of shareholders to consider the merger will
be scheduled for the second quarter of 2009.
INVESTMENT OBJECTIVE
The Seligman Global Growth Fund's investment objective is long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund uses the following principal investment strategies to seek its
investment objective:
The Fund invests primarily in equity securities of non-US and US growth
companies that have the potential to benefit from global economic or social
trends. The Fund may invest in high-quality, large-and mid-capitalization
companies that are considered leaders in their industries, emphasizing those
industries that are growing on a global basis. Typically, the Fund will invest
in several countries in different geographic regions. Additionally, the Fund
may invest up to 15% in emerging market equities.
Under normal market conditions, the Fund generally will invest at least 40% of
its net assets in companies that maintain their principal place of business or
conduct their principal business activities outside the US, have their
securities traded on non-US exchanges or have been formed under the laws of
non-US countries. The portfolio manager may reduce this 40% minimum investment
amount to 30% if it believes that market conditions for these types of
companies or specific foreign markets are unfavorable. The Fund considers a
company to conduct its principal business activities outside the US if it
derives at least 50% of its revenue from business outside the US or has at
least 50% of its assets outside the US.
The Fund uses an investment process that emphasizes bottom-up research with a
focus on companies with improving fundamentals exemplified by identifiable
catalysts and strong earnings growth.
In selecting individual securities, the portfolio manager looks to identify
companies that it believes display one or more of the following:
.. Accelerating fundamentals or earnings growth with consideration paid to
valuations
.. Quality management
.. Strong possibility of multiple expansion
.. Unique competitive advantages (e.g., market share, proprietary products)
.. Potential for improvement in overall operations
The Fund generally sells a stock if the portfolio manager believes its target
price has been reached, its earnings are disappointing, its revenue or earnings
growth has slowed, or the stock's or industry's underlying fundamentals have
deteriorated. The Fund may also sell a stock if the portfolio manager believes
that negative country or regional factors or shifts in global trends may
negatively affect a company's outlook, or to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities,
7
Seligman Global Growth Fund
including securities convertible into or exchangeable for common stock,
depositary receipts, and rights and warrants to purchase common stock. The Fund
also may invest up to 25% of its assets in preferred stock and investment-grade
or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in the price of securities it holds in its
portfolio. A put option gives the Fund the right to sell an underlying security
at a particular price during a fixed period of time. Forward foreign currency
exchange contracts and put options on securities may not be available to the
Fund on reasonable terms in many situations, and the Fund may frequently choose
not to enter into such contracts or purchase such options even when they are
available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies (e.g., investing less than 30% of
its assets in companies outside the US) in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors.
There is no guarantee the Fund will achieve its objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the
value of your investment and you could lose money if you sell your shares at a
price lower than you paid for them.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuations, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks.
Securities of issuers in emerging markets are subject to additional risks.
Emerging countries may have relatively unstable governments, economies based on
less diversified industrial bases, and securities markets that trade a smaller
number of securities. Companies in emerging markets are
8
Seligman Global Growth Fund
often smaller, less seasoned, and more recently organized than many US
companies.
The Fund seeks to limit the risk of investing in foreign securities by
diversifying its investments among different countries, as well as among
different themes. Diversification reduces the effect events in any one country
will have on the Fund's entire investment portfolio. However, a decline in the
value of the Fund's investments in one country may offset potential gains from
investments in another country.
If global markets do not develop or continue to develop, the Fund's performance
could be negatively affected.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. The Fund may, however, invest a substantial
percentage of its assets in certain industries or economic sectors believed by
the portfolio manager to offer good investment opportunities. If an industry or
economic sector in which the Fund is invested falls out of favor, the Fund's
performance may be negatively affected.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and management fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
PORTFOLIO HOLDINGS
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
9
Seligman Global Growth Fund
PAST PERFORMANCE
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class I shares has
varied from year to year, as well as how the performance compares to four
measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis to assist you in comparing the
returns of the Fund with the returns of other mutual funds. How the Fund has
performed in the past (before and after taxes), however, is not necessarily an
indication of how the Fund will perform in the future.
Prior to November 7, 2008, the Fund was managed by J. & W. Seligman & Co.
Incorporated (Seligman). In the past, Seligman contractually waived its
management fee or reimbursed the Fund's expenses (with certain exceptions). In
the past, Seligman also made payments to the Fund. Through at least
February 28, 2010, RiverSource Investments, the Funds' new investment manager,
has contractually agreed to waive its management fee and/or to reimburse the
Fund's expenses to the extent that the Fund's "other expenses" (i.e., those
expenses other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85% per annum
of the Fund's average daily net assets. Absent prior management fee
waivers/expense reimbursements and payments, returns presented in the bar chart
and table would have been lower.
Both the bar chart and table below the bar chart assume that all dividends and
capital gain distributions, if any, were reinvested. Class I shares are not
subject to any sales charges.
After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation and
may differ from those shown, and after-tax returns shown are not relevant to
investors who hold their shares through tax deferred arrangements, such as
401(k) plans or individual retirement accounts (IRAs). The returns after taxes
on distributions and sale of Fund shares may be greater than other returns
presented for the same periods due to tax benefits from losses realized on the
sale of Fund shares.
10
Seligman Global Growth Fund
CLASS I ANNUAL TOTAL RETURN - CALENDAR YEARS
[CHART]
Best calendar quarter return: 15.92% - quarter ended 12/31/03.
Worst calendar quarter return: -27.05% - quarter ended 12/31/08.
CLASS I AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
SINCE
ONE FIVE INCEPTION
YEAR YEARS 11/30/01
- ---------------------------------------------------------------------------------------
CLASS I
- ---------------------------------------------------------------------------------------
Return before taxes (52.91)% (4.35)% (4.42)%
- ---------------------------------------------------------------------------------------
Return after taxes on distributions (52.91) (4.35) (4.42)
- ---------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (34.39) (3.65) (3.68)
- ---------------------------------------------------------------------------------------
MSCI WORLD INDEX (40.33) 0.00 1.13
- ---------------------------------------------------------------------------------------
MSCI WORLD GROWTH INDEX (40.90) (0.84) (0.06)
- ---------------------------------------------------------------------------------------
LIPPER GLOBAL LARGE-CAP GROWTH FUNDS AVERAGE (44.46) (1.73) (0.31)
- ---------------------------------------------------------------------------------------
LIPPER GLOBAL FUNDS AVERAGE (41.06) (0.49) (0.97)
- ---------------------------------------------------------------------------------------
- -------------
The Morgan Stanley Capital International World Index ("MSCI World Index"), the
Morgan Stanley Capital International World Growth Index ("MSCI World Growth
Index"), and the Lipper Global Large-Cap Growth Funds Average and the Lipper
Global Funds Average (the "Lipper Averages") are unmanaged benchmarks that
assume reinvestment of all distributions, if any. The Lipper Averages excludes
the effect of fees, sales charges and taxes, and the MSCI World Index and the
MSCI World Growth Index exclude the effect of expenses, fees, sales charges and
taxes. The MSCI World Index is a free float-adjusted market capitalization
index that is designed to measure global developed market equity performance.
The MSCI World Growth Index is a free float-adjusted market
capitalization-weighted equity index representing "growth" (high price to book
value) securities in the world's developed stock markets. The Lipper Global
Funds Average comprises mutual funds which invest at least 25% of their
portfolio in securities traded outside the US, and that may own US securities
as well. The Lipper Global Large-Cap Growth Funds Average comprises mutual
funds that, by portfolio practice, invest at least 75% of their equity assets
in companies both inside and outside of the US with market capitalizations (on
a three-year weighted basis) above Lipper's global large-cap floor. Global
large-cap growth funds typically have an above-average price-to-cash flow
ratio, price-to-book ratio, and three-year sales-per-share growth value
compared to their large-cap-specific subset of the S&P/Citigroup World BMI.
Lipper currently classifies the Fund as a Global Large-Cap Growth Fund.
Investors cannot invest directly in an average or index.
Prior to March 31, 2000, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain portfolio management
services with respect to the investments of the Fund. From March 31, 2000 until
September 15, 2003, the assets of the Fund were managed exclusively by
Seligman. Since September 15, 2003, Wellington Management Company, LLP has been
employed as subadviser to provide portfolio management services to the Fund.
11
Seligman Global Growth Fund
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other shareholders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases none
- -----------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge (Load) (CDSC) on Redemptions none
- -----------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- -----------------------------------------------------------------------------------
(as a percentage of average net assets)
- -----------------------------------------------------------------------------------
Management Fees 1.00%
- -----------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees none
- -----------------------------------------------------------------------------------
Other Expenses/(1)/ 0.69
- -----------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.69
- -----------------------------------------------------------------------------------
- -------------
(1)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation (RSC)
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. (SDC), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC.
Through at least February 28, 2010, RiverSource Investments has
contractually agreed to waive its management fee and/or to reimburse the
Fund's expenses to the extent that the Fund's "other expenses" (i.e., those
expenses other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85% per
annum of the Fund's average daily net assets. For the fiscal year ended
October 31, 2008, no fee waiver and/or expense reimbursement was required
for Class I shares.
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's total annual operating expenses
shown above (which reflects the Non-Recurring Charges, SDC's estimated fees and
expenses from March 2, 2009 through on or about May 8, 2009 and RSC's estimated
fees and expenses from on or about May 9, 2009 through February 28, 2010) and
(ii) after February 28, 2010, the Fund's total gross operating expenses shown
above adjusted to reflect those fees and expenses no longer applicable to the
Fund (i.e., the Non-Recurring Charges and SDC's fees and expenses). Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------
Class I $172 $512 $875 $1,898
----------------------------------------
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund including such things as shareholder
account services, registration, custody, auditing and legal fees.
12
Seligman Global Smaller Companies Fund
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Seligman Global Smaller Companies Fund's investment objective is long-term
capital appreciation.
SMALLER COMPANIES:
Companies with market capitalization, at the time of purchase by the Fund,
equivalent to US $3 billion or less.
PRINCIPAL INVESTMENT STRATEGIES
The Fund uses the following principal investment strategies to seek its
investment objective:
The Fund generally invests at least 80% of its assets in equity securities of
smaller US and non-US companies. The Fund may invest in companies domiciled in
any country, although it typically invests in developed countries. Relative to
its benchmark, the Fund is generally neutrally weighted across the major
geographic regions.
Under normal market conditions, the Fund generally will invest at least 40% of
its net assets in companies that maintain their principal place of business or
conduct their principal business activities outside the US, have their
securities traded on non-US exchanges or have been formed under the laws of
non-US countries. The portfolio manager may reduce this 40% minimum investment
amount to 30% if it believes that market conditions for these types of
companies or specific foreign markets are unfavorable. The Fund considers a
company to conduct its principal business activities outside the US if it
derives at least 50% of its revenue from business outside the US or has at
least 50% of its assets outside the US.
The Fund uses an investment approach that is bottom-up focused, looking for
both extended growth opportunities and special situations (including value
stocks) within each region.
In selecting individual securities, the portfolio managers look for companies
that they believe display the following characteristics:
.. Extended growth opportunities or special situations where there is a
potential for improvement in overall operations
.. A well articulated and believable business model
.. Quality management
.. Sustainable competitive advantage
.. Strong financial characteristics
The Fund generally sells a stock if the portfolio managers believe its target
price has been reached, its earnings are disappointing, its revenue or earnings
growth has slowed, its underlying fundamentals have deteriorated, or the
portfolio managers are finding better opportunities elsewhere. The Fund may
also sell a stock if the portfolio managers believe that negative country or
regional factors may affect a company's outlook, to manage risk in the Fund, or
to meet cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable for common stock, depositary receipts, and rights and warrants to
purchase common stock. The Fund also may invest up to 25% of its assets in
preferred stock and investment-grade or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put
13
Seligman Global Smaller Companies Fund
options in an attempt to hedge against a decline in the price of securities it
holds in its portfolio. A put option gives the Fund the right to sell an
underlying security at a particular price during a fixed period of time.
Forward foreign currency exchange contracts and put options on securities may
not be available to the Fund on reasonable terms in many situations and the
Fund may frequently choose not to enter into such contracts or purchase such
options even when they are available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions, that are
inconsistent with its principal strategies (e.g., investing less than 30% of
its assets in companies outside the US) in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors. Shareholders will be provided with at least 60 days
prior written notice of any change to the "80%" investment policy described in
the second paragraph under "Principal Investment Strategies."
The Board of Directors may change the definition of "smaller companies" if it
concludes that such a change is appropriate.
There is no guarantee the Fund will achieve its objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the
value of your investment and you could lose money if you sell your shares at a
price lower than you paid for them.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuation, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks.
Investments in smaller companies typically involve greater risks than
investments in larger companies. Small company stocks, as a whole, may
experience larger price fluctuations than large company stocks or other types
of investments. Some small companies may have shorter operating histories, less
experienced management and limited product lines, markets and financial and
managerial resources.
The Fund may be affected by the broad investment environment in the
international or US securities
14
Seligman Global Smaller Companies Fund
markets, which is influenced by, among other things, interest rates, inflation,
politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. The Fund may, however, invest a substantial
percentage of its assets in certain industries or economic sectors believed by
the portfolio managers to offer good investment opportunities. If an industry
or economic sector in which the Fund is invested falls out of favor, the Fund's
performance may be negatively affected.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and management fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to the risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions can and futures contracts involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
PORTFOLIO HOLDINGS
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
PAST PERFORMANCE
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class I shares has
varied from year to year, as well as how the performance compares to two
measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided on a calendar year basis. It is designed to assist you
in comparing the returns of the Fund with the returns of other mutual funds.
How the Fund has performed in the past (before and after taxes), however, is
not necessarily an indication of how the Fund will perform in the future.
15
Seligman Global Smaller Companies Fund
In the past, Seligman (the predecessor investment manager) reimbursed certain
expenses of Class I shares, and made payments to the Fund. Absent such
reimbursements and payments, returns presented in the bar chart and table would
have been lower.
Both the bar chart and table below the bar chart assume that all dividends and
capital gain distributions, if any, were reinvested. Class I shares are not
subject to any sales charges.
After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation and
may differ from those shown, and after-tax returns shown are not relevant to
investors who hold their shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts (IRAs). The returns after taxes
on distributions and sale of Fund shares may be greater than other returns
presented for the same periods due to tax benefits from losses realized on the
sale of Fund shares.
16
Seligman Global Smaller Companies Fund
CLASS I ANNUAL TOTAL RETURN - CALENDAR YEARS
[CHART]
Best calendar quarter return: 18.51% - quarter ended 6/30/03.
Worst calendar quarter return: -26.58% - quarter ended 12/31/08.
CLASS I AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
SINCE
ONE FIVE INCEPTION
YEAR YEARS 11/30/01
- ---------------------------------------------------------------------------------------
CLASS I
- ---------------------------------------------------------------------------------------
Return before taxes (47.29)% (1.50)% 0.13%
- ---------------------------------------------------------------------------------------
Return after taxes on distributions (47.43) (2.69) (0.73)
- ---------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (30.68) (1.08) 0.25
- ---------------------------------------------------------------------------------------
S&P/CITIGROUP BROAD MARKET LESS THAN US $2 BILLION INDEX (43.02) 0.51 5.24
- ---------------------------------------------------------------------------------------
LIPPER GLOBAL SMALL/MID-CAP FUNDS AVERAGE (45.11) (0.72) 2.16
- ---------------------------------------------------------------------------------------
- -------------
The Standard & Poor's/Citigroup Broad Market Less Than US $2 Billion Index (the
"S&P/Citigroup Index") and the Lipper Global Small/Mid-Cap Funds Average (the
"Lipper Average") are unmanaged benchmarks that assume reinvestment of all
distributions, if any. The Lipper Average excludes the effect of fees, sales
charges and taxes, and the S&P/Citigroup Index excludes the effect of expenses,
fees, sales charges and taxes. The S&P/Citigroup Index represents the entire
universe of institutionally investable securities with total available market
capitalization of at least the local equivalent of US $100 million and not more
than US $2 billion. The Lipper Average measures the performance of mutual funds
that, by portfolio practice, invest at least 75% of their equity assets in
companies both inside and outside of the US with market capitalizations (on a
three-year weighted basis) below Lipper's global large-cap floor. Lipper
re-classified the Fund as a Global Small/Mid-Cap Fund in June 2008. Investors
cannot invest directly in an average or index.
Prior to January 1, 2003, Seligman (the predecessor investment manager)
employed subadvisers that were responsible for providing certain portfolio
management services with respect to the investments of the Fund. From
January 1, 2003 until September 15, 2003, the assets of the Fund were managed
exclusively by Seligman. Since September 15, 2003, Wellington Management
Company LLP has been employed as subadviser to provide portfolio management
services for the Fund. In June 2004, Wellington Management Company LLP
delegated a portion of its portfolio management responsibilities in respect of
the Fund to its affiliate, Wellington Management International Ltd. As of April
2006, no employee of Wellington Management International Ltd is providing
portfolio management services to the Fund.
17
Seligman Global Smaller Companies Fund
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other share-holders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases none
- -----------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge (Load) (CDSC) on Redemptions none
- -----------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- -----------------------------------------------------------------------------------
(as a percentage of average net assets)
- -----------------------------------------------------------------------------------
Management Fees 0.95%
- -----------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees none
- -----------------------------------------------------------------------------------
Other Expenses/(1)/ 0.48%
- -----------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.43%
- -----------------------------------------------------------------------------------
- -------------
(1)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation (RSC)
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. (SDC), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC.
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's total annual operating expenses
shown above (which reflects the Non-Recurring Charges, SDC's estimated fees and
expenses from March 2, 2009 through on or about May 8, 2009 and RSC's estimated
fees and expenses from on or about May 9, 2009 through February 28, 2010) and
(ii) after February 28, 2010, the Fund's total gross operating expenses shown
above adjusted to reflect those fees and expenses no longer applicable to the
Fund (i.e., the Non-Recurring Charges and SDC's fees and expenses). Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------
Class I $146 $429 $734 $1,600
----------------------------------------
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund including such things as shareholder
account services, registration, custody, auditing and legal fees.
18
Seligman International Growth Fund
- --------------------------------------------------------------------------------
On January 8, 2009, the Series' Board of Directors approved in principle the
merger of Seligman International Growth Fund into RiverSource Partners
International Select Growth Fund, a fund that seeks to provide shareholders
with long-term capital growth. More information about RiverSource Partners
International Select Growth Fund and the proposed merger will be included in
proxy materials.
Completion of the merger is subject to approval by shareholders of Seligman
International Growth Fund. It is currently anticipated that proxy materials
regarding the merger will be distributed to shareholders during the first or
second quarter of 2009, and that a meeting of shareholders to consider the
merger will be scheduled for the second quarter of 2009.
INVESTMENT OBJECTIVE
The Seligman International Growth Fund's investment objective is long-term
capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund uses the following principal investment strategies to seek its
investment objective: The Fund invests primarily in high-quality, large- and
mid-capitalization growth companies ($1 billion or more at the time of initial
purchase by the Fund) that are considered leaders in their industries,
emphasizing those industries that are growing on a global basis. The Fund may
invest in any country; however, it typically will not invest in the United
States. It generally invests in several countries in different geographic
regions.
The Fund generally invests in the common stock of medium- to large-sized
companies in the principal international markets. However, it may also invest
in companies with a lower market capitalization or in smaller regional or
emerging markets (representation in the emerging markets will generally be less
than 25% of assets).
In selecting individual securities, the portfolio manager looks to identify
companies that it believes display one or more of the following:
.. Attractive valuations relative to earnings and revenue forecasts or other
valuation criteria (e.g., return on equity)
.. Quality management
.. Unique competitive advantages (e.g., market share, proprietary products)
.. Strong possibility of multiple expansion
.. Potential for improvement in overall operations (hidden/unappreciated value)
The Fund generally sells a stock if the portfolio manager believes its target
price has been reached, there is a decelerating trend of earnings growth,
deteriorating industry fundamentals, management change or failure, its revenue
growth has slowed, or its underlying fundamentals have deteriorated.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the US dollar. The securities may be
listed on a US or foreign stock exchange or traded in US or foreign
over-the-counter markets. The Fund normally concentrates its investments in
common stocks; however, it may invest in other types of equity securities,
including securities convertible into or exchangeable for common stock,
depositary receipts, and rights and warrants to purchase common stock. The Fund
also may invest up to 25% of its assets in preferred stock and investment-grade
or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
for-ward foreign currency exchange contracts in an attempt to manage the risk
of adverse changes in currencies. The Fund may also purchase put
19
Seligman International Growth Fund
options in an attempt to hedge against a decline in the price of securities it
holds in its portfolio. A put option gives the Fund the right to sell an
underlying security at a particular price during a fixed period of time.
Forward foreign currency exchange contracts and put options on securities may
not be available to the Fund on reasonable terms in many situations, and the
Fund may frequently choose not to enter into such contracts or purchase such
options even when they are available.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a mutual fund is exempt from the definition of a
"commodity pool operator." The Fund, therefore, is not subject to registration
or regulation as a pool operator, meaning that the Fund may invest in futures
contracts without registering with the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
The Fund's investment objective may be changed only with shareholder approval.
The principal investment strategies may be changed without shareholder
approval. Any changes to these strategies, however, must be approved by the
Fund's Board of Directors. There is no guarantee the Fund will achieve its
objective.
PRINCIPAL RISKS
Stock prices fluctuate. Therefore, as with any fund that invests in stocks, the
Fund's net asset value will fluctuate. You may experience a decline in the
value of your investment and you could lose money if you sell your shares at a
price lower than you paid for them.
Foreign securities in the Fund's portfolio involve higher risk and may subject
the Fund to higher price volatility. Investing in securities of foreign issuers
involves risks not associated with US investments, including currency
fluctuation, local withholding and other taxes, different financial reporting
practices and regulatory standards, high costs of trading, changes in political
conditions, expropriation, investment and repatriation restrictions and
settlement and custody risks.
Securities of issuers in emerging markets are subject to additional risks.
Emerging countries may have relatively unstable governments, economies based on
less diversified industrial bases, and securities markets that trade a smaller
number of securities. Companies in emerging markets are often smaller, less
seasoned, and more recently organized than many US companies.
The Fund seeks to limit the risk of investing in foreign securities by
diversifying its investments among different regions and countries.
Diversification reduces the effect events in any one country will have on the
Fund's entire investment portfolio.
However, a decline in the value of the Fund's investments in one country may
offset potential gains from investments in another country.
The Fund may be negatively affected by the broad investment environment in the
international or US securities markets, which is influenced by, among other
things, interest rates, inflation, politics, fiscal policy, and current events.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one
20
Seligman International Growth Fund
industry. The Fund may, however, invest a substantial percentage of its assets
in certain industries or economic sectors believed by the portfolio manager to
offer good investment opportunities. If an industry or economic sector in which
the Fund is invested falls out of favor, the Fund's performance may be
negatively affected.
To the extent the Fund invests some of its assets in higher-risk securities,
such as illiquid securities, it may be subject to higher price volatility.
Securities traded in the over-the-counter markets involve risks, including the
risk that the counterparty will be unable or unwilling to meet its obligations.
In addition, since over-the-counter markets are generally less liquid than
exchanges, the Fund may not be able to sell when the portfolio manager deems it
advantageous to do so.
If the Fund invests in ETFs, shareholders would bear not only the Fund's
expenses (including operating expenses and advisory fees), but also similar
expenses of the ETFs, and the Fund's returns will therefore be lower.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject to,
among other things, deferral of distribution payments, involuntary redemptions,
subordination to bonds and other debt instruments of the issuer, a lack of
liquidity relative to other securities such as common stocks, and limited
voting rights. The market value of securities convertible into common stocks
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which may
be subject to the risks associated with changes in interest rates, the
creditworthiness of the issuers, unanticipated prepayment, and the decline of
the bond market in general.
Derivatives, including option transactions and futures contracts can involve a
high degree of risk, including the possibility of a total loss of the amount
invested or more. When derivatives are purchased in the over-the-counter
markets, there are additional risks, such as counterparty and liquidity risks.
The Fund may actively and frequently trade securities in its portfolio to carry
out its principal strategies. A high portfolio turnover rate increases
transaction costs, which may increase the Fund's expenses. Frequent and active
trading may also cause adverse tax consequences for investors in the Fund due
to an increase in short-term capital gains.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
PORTFOLIO HOLDINGS
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Series'
Statement of Additional Information.
PAST PERFORMANCE
The following performance information provides some indication of the risks of
investing in the Fund by showing how the performance of Class I shares has
varied from year to year, as well as how the performance compares to four
measures of performance.
Although the Fund's fiscal year ends on October 31, the following performance
information is provided
21
Seligman International Growth Fund
on a calendar year basis to assist you in comparing the returns of the Fund
with the returns of other mutual funds. How the Fund has performed in the past
(before and after taxes), however, is not necessarily an indication of how the
Fund will perform in the future.
Prior to November 7, 2008, the Fund was managed by J. & W. Seligman & Co.
Incorporated (Seligman). In the past, Seligman contractually waived its
management fee or reimbursed the Fund's expenses (with certain exceptions).
Through at least February 28, 2010, RiverSource Investments, the Funds' new
investment manager, has contractually agreed to waive its management fee
and/or to reimburse the Fund's expenses to the extent that the Fund's "other
expenses" (i.e., those expenses other than management fees, 12b-1 fees,
interest on borrowings, and extraordinary expenses, including litigation
expenses) exceed 0.85% per annum of the Fund's average daily net assets. Absent
prior management fee waivers/ expense reimbursements, returns presented in the
bar chart and table would have been lower.
Both the bar chart and table below the bar chart assume that all dividends and
capital gain distributions, if any, were reinvested. Class I shares are not
subject to any sales charges.
After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation and
may differ from those shown, and after-tax returns shown are not relevant to
investors who hold their shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts (IRAs). The returns after taxes
on distributions and sale of Fund shares may be greater than other returns
presented for the same periods due to tax benefits from losses realized on the
sale of Fund shares.
22
Seligman International Growth Fund
CLASS I ANNUAL TOTAL RETURN - CALENDAR YEARS
[CHART]
Best calendar quarter return: 16.07% - quarter ended 6/30/03.
Worst calendar quarter return: -27.70% - quarter ended 9/30/08.
CLASS I AVERAGE ANNUAL TOTAL RETURNS - PERIODS ENDED 12/31/08
SINCE
ONE FIVE INCEPTION
YEAR YEARS 11/30/01
- ---------------------------------------------------------------------------------------
CLASS I
- ---------------------------------------------------------------------------------------
Return before taxes (57.62)% (3.19)% (1.34)%
- ---------------------------------------------------------------------------------------
Return after taxes on distributions (57.62) (3.83) (1.80)
- ---------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (37.45) (2.49) (0.98)
- ---------------------------------------------------------------------------------------
MSCI EAFE INDEX (43.06) 2.10 3.89
- ---------------------------------------------------------------------------------------
MSCI EAFE GROWTH INDEX (42.46) 1.77 2.91
- ---------------------------------------------------------------------------------------
LIPPER INTERNATIONAL MULTI-CAP GROWTH FUNDS AVERAGE (46.85) 1.14 2.55
- ---------------------------------------------------------------------------------------
LIPPER INTERNATIONAL FUNDS AVERAGE (44.23) 1.27 3.08
- ---------------------------------------------------------------------------------------
- -------------
The Morgan Stanley Capital International EAFE (Europe, Australasia, Far East)
Index ("MSCI EAFE Index") and the Morgan Stanley Capital International EAFE
(Europe, Australasia, Far East) Growth Index ("MSCI EAFE Growth Index",
collectively, the "MSCI EAFE Indices") and the Lipper International Multi-Cap
Growth Funds Average and the Lipper International Funds Average (collectively,
the "Lipper Averages") are unmanaged benchmarks that assume reinvestment of all
distributions, if any. The Lipper Averages exclude the effect of fees, sales
charges and taxes, and the MSCI EAFE Indices exclude the effect of expenses,
fees, sales charges and taxes. The MSCI EAFE Index is a free float-adjusted
market capitalization index that is designed to measure developed market equity
performance, excluding the US and Canada. The MSCI EAFE Growth Index is a free
float-adjusted market capitalization-weighted index that measures stock market
performance of the developed markets in Europe, Australasia, and the Far East
with a greater-than-average growth orientation. The Lipper International
Multi-Cap Growth Funds Average measures the performance of mutual funds that,
by portfolio practice, invest in a variety of market capitalization ranges
without concentrating 75% of their equity assets in any one
market-capitalization range over an extended period of time. International
multi-cap growth funds typically have an above-average price-to-cash flow
ratio, price-to-book ratio, and three-year sales-per-share growth value
compared to the S&P/Citigroup World ex-US BMI. The Lipper International Funds
Average measures the performance of mutual funds that invest their assets in
securities with primary trading markets outside of the US. Lipper currently
classifies the Fund as an International Multi-Cap Growth Fund. Investors cannot
invest directly in an average or index.
Prior to March 31, 2000, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain management services
with respect to the investments of the Fund. From March 31, 2000 until
September 15, 2003, the assets of the Fund were managed exclusively by
Seligman. Since September 15, 2003, Wellington Management Company, LLP has been
employed as subadviser to provide portfolio management services to the Fund.
23
Seligman International Growth Fund
FEES AND EXPENSES
The table below summarizes the fees and expenses that you may pay as a
shareholder of the Fund. Annual fund operating expenses are deducted from Fund
assets and are therefore paid indirectly by you and other share-holders of the
Fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------
Maximum Sales Charge (Load) on Purchases none
- -----------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge (Load) (CDSC) on Redemptions none
- -----------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- -----------------------------------------------------------------------------------
(as a percentage of average net assets)
- -----------------------------------------------------------------------------------
Management Fees 0.97%
- -----------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees none
- -----------------------------------------------------------------------------------
Other Expenses/(1)/ 0.60%
- -----------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.57%
- -----------------------------------------------------------------------------------
- -------------
(1)"Other expenses" includes transfer and shareholder service agent fees and
expenses. The Series' Board approved RiverSource Service Corporation (RSC)
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp. (SDC), the
current transfer and shareholder service agent for the Fund, effective on or
about May 9, 2009. RSC is an affiliate of RiverSource Investments. "Other
expenses" is based on estimated fees and expenses of SDC from March 2, 2009
through on or about May 8, 2009 and of RSC from on or about May 9, 2009
through February 28, 2010, and includes non-recurring charges to the Fund
resulting from the termination of SDC as transfer and shareholder service
agent for the Fund (the "Non-Recurring Charges"). The fees and expenses
charged to the Fund by RSC are lower than the fees and expenses charged to
the Fund by SDC. The examples of Fund expenses below reflect the change in
expenses resulting from the termination of SDC and the hiring of RSC.
Through at least February 28, 2010, RiverSource Investments has
contractually agreed to waive its management fee and/or to reimburse the
Fund's expenses to the extent that the Fund's "other expenses" (i.e., those
expenses other than management fees, 12b-1 fees, interest on borrowings, and
extraordinary expenses, including litigation expenses) exceed 0.85% per
annum of the Fund's average daily net assets. For the fiscal year ended
October 31, 2008, no fee waiver and/or expense reimbursement was required
for Class I Shares.
EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. It assumes (1) you invest
$10,000 in the Fund for each period and then sell all of your shares at the end
of that period, (2) your investment has a 5% return each year, and (3) the
Fund's operating expenses are (i) the Fund's total annual operating expenses
shown above (which reflects the Non-Recurring Charges, SDC's estimated fees and
expenses from March 2, 2009 through on or about May 8, 2009 and RSC's estimated
fees and expenses from on or about May 9, 2009 through February 28, 2010) and
(ii) after February 28, 2010, the Fund's total gross operating expenses shown
above adjusted to reflect those fees and expenses no longer applicable to the
Fund (i.e., the Non-Recurring Charges and SDC's fees and expenses). Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------
Class I $160 $472 $808 $1,756
----------------------------------------
MANAGEMENT FEES:
Fees paid out of Fund assets to the investment manager to compensate it for
managing the Fund.
OTHER EXPENSES:
Miscellaneous expenses of running the Fund including such things as shareholder
account services, registration, custody, auditing and legal fees.
24
Management of the Funds
The Board of Directors provides broad supervision over the affairs of each Fund.
On November 7, 2008, RiverSource Investments, completed its Acquisition of
Seligman, 100 Park Avenue, New York, New York 10017. With the Acquisition
completed and shareholders having previously approved (at a special meeting
held on November 3, 2008) a new investment management services agreement
between the Series (on behalf of each Fund) and RiverSource Investments (the
"Management Agreement"), RiverSource Investments became the new investment
manager of the Funds effective November 7, 2008. Shareholders of the Funds also
approved at the November meeting a subadvisory agreement between RiverSource
Investments and Wellington Management Company, LLP.
RiverSource Investments, 200 Ameriprise Financial Center, Minneapolis,
Minnesota 55474, is also the investment manager of the other funds in the
RiverSource Group of Funds, which includes the "RiverSource" funds,
"RiverSource Partners" funds, "Threadneedle" funds and the "Seligman" funds,
and is a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise
Financial). Ameriprise Financial is a financial planning and financial services
company that has been offering solutions for clients' asset accumulation,
income management and protection needs for more than 110 years. In addition to
managing investments for the RiverSource Group of Funds, RiverSource
Investments manages investments for itself and its affiliates. For
institutional clients, RiverSource Investments and its affiliates provide
investment management and related services, such as separate account asset
management, and institutional trust and custody, as well as other investment
products.
Effective November 7, 2008, the Funds will pay RiverSource Investments a fee
for managing their respective assets (Seligman will no longer receive a
management fee effective November 7, 2008). The fees paid to RiverSource
Investments will be the same annual fee rates that were paid to Seligman prior
to November 7, 2008.
AFFILIATES OF RIVERSOURCE INVESTMENTS:
RiverSource Fund Distributors, Inc., formerly Seligman Advisors, Inc. (the
"distributor"):
A distributor of the Seligman funds and the other funds in the RiverSource
Group of Funds; responsible for accepting orders for purchases and sales of
Fund shares.
RiverSource Services, Inc., formerly Seligman Services, Inc.:
A limited purpose broker/dealer; acts as the broker/dealer of record for
shareholder accounts that do not have a designated broker or financial
advisor.
Seligman Data Corp. (SDC):
Each Fund's shareholder service agent through May 8, 2009; provides
shareholder account services to the Funds at cost.
RiverSource Service Corporation (RSC)
Each Fund's transfer and shareholder service agent effective May 9, 2009;
provides or compensates others to provide transfer agency services to the
other funds in the RiverSource Group of Funds.
Ameriprise Financial:
Provides or compensates others to provide administrative services to the
Seligman funds, as well as the other funds in the RiverSource Group of Funds.
Each Fund pays RiverSource Investments a management fee for its services equal
to a percentage of that Fund's aver-age daily net assets. Each Fund's
management fee rate declines as that Fund's net assets increase. The management
fee rates are:
.. Seligman Emerging Markets Fund
1.25% on first $1 billion of net assets
25
1.15% on next $1 billion of net assets
1.05% on net assets in excess of $2 billion
.. Seligman Global Growth Fund and Seligman International Growth Fund
1.00% on first $50 million of net assets
0.95% on next $1 billion of net assets
0.90% on net assets in excess of $1,050,000,000
.. Seligman Global Smaller Companies Fund
1.00% on first $100 million of net assets
0.90% on net assets in excess of $100 million
For each of Seligman Emerging Markets Fund, Seligman Global Growth Fund and
Seligman International Growth Fund, through at least February 28, 2010,
RiverSource Investments has contractually agreed to waive its respective
management fee and/or to separately reimburse each Fund's expenses to the
extent that a Fund's "other expenses" (i.e., those expenses other than
management fees, 12b-1 fees, interest on borrowings, and extraordinary
expenses, including litigation expenses) exceed 0.85% per annum of that Fund's
average daily net assets. No reimbursement was required through October 31,
2008 for Class I shares of these Funds.
On July 29, 2008, the Series' Board met to discuss, prior to shareholder
approval, the Management Agreement between the Series (on behalf of each Fund)
and RiverSource Investments, and a subadvisory agreement between RiverSource
Investments and Wellington Management Company, LLP ("Wellington Management")
relating to services provided to the Funds (the "Subadvisory Agreement"). A
discussion regarding the basis for the Board approving the Management Agreement
and the Subadvisory Agreement was included in the proxy statement, dated August
27, 2008, and is available in the Series' annual shareholder report for the
year ended October 31, 2008.
Subadviser
Wellington Management Company, LLP, a Massachusetts limited liability
partnership with principal offices at 75 State Street, Boston, Massachusetts
02109, is the subadviser for Seligman Emerging Markets Fund, Seligman Global
Growth Fund, Seligman International Growth Fund, and Seligman Global Smaller
Companies Fund. Wellington Management is a professional investment counseling
firm that provides investment serv-ices to investment companies, employee
benefit plans, endowments, foundations, and other institutions. Wellington
Management and its predecessor organizations have provided investment advisory
services for over 70 years. As of January 31, 2009, Wellington Management had
investment management authority with respect to approximately $402 billion in
assets (which does not include agency mortgage-backed security pass-through
accounts managed for the Federal Reserve).
RiverSource Investments pays Wellington Management a fee for the services it
provides. This fee does not increase the fee payable by any Fund.
26
PORTFOLIO MANAGEMENT
Seligman Emerging Markets Fund
Ms. Vera M. Trojan, CFA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the Fund since 2003.
Ms. Trojan joined Wellington Management as an investment professional in 1989.
Seligman Global Growth Fund
Mr. Matthew D. Hudson, CFA, Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the Fund since
August 1, 2007 and has been involved in portfolio management and securities
analysis for the Fund since 2006. Mr. Hudson joined Wellington Management as an
investment professional in 2005. Prior to joining Wellington Management,
Mr. Hudson was an investment professional at American Century Investment
Management (2000-2005).
Mr. Andrew S. Offit, CPA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2003. Mr. Offit joined Wellington Management as an
investment professional in 1997.
Mr. Jean-Marc Berteaux, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2003. Mr. Berteaux joined Wellington Management as
an investment professional in 2001.
Mr. Hudson is the lead portfolio manager of the Fund. Messrs. Offit and
Berteaux assist in the research and portfolio construction process. In
Mr. Hudson's absence, Messrs. Offit and Berteaux, individually, may purchase or
sell securities for the Fund.
Seligman International Growth Fund
Mr. Andrew S. Offit, CPA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the Fund since 2003.
Mr. Offit joined Wellington Management as an investment professional in 1997.
Mr. Jean-Marc Berteaux, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2003. Mr. Berteaux joined Wellington Management as
an investment professional in 2001.
Mr. Matthew D. Hudson, CFA, Vice President and Equity Portfolio Manager of
Wellington Management, has been involved in portfolio management and securities
analysis for the Fund since 2006. Mr. Hudson joined Wellington Management as an
investment professional in 2005. Prior to joining Wellington Management,
Mr. Hudson was an investment professional at American Century Investment
Management (2000-2005).
Mr. Offit is the lead portfolio manager of the Fund. Messrs. Berteaux and
Hudson assist in the research and portfolio construction process. In
Mr. Offits's absence, Messrs. Berteaux and Hudson, individually, may purchase
or sell securities for the Fund.
Seligman Global Smaller Companies Fund
Mr. Jamie A. Rome, CFA, Senior Vice President and Equity Portfolio Manager of
Wellington Management, has served as portfolio manager of the North American
portion of the Fund since 2003. Mr. Rome joined Wellington Management as an
investment professional in 1994.
Mr. Simon H. Thomas, Vice President and Equity Portfolio Manager of Wellington
Management, has served as portfolio manager of the non-North American portion
of the Fund since 2006. Mr. Thomas joined Wellington Management as an
investment professional in 2002.
27
Messrs. Rome and Thomas coordinate the allocations among the North American and
non-North American portions of the Fund, which are intended to be regionally
neutral relative to the Fund's benchmark. However, the allocations may vary
from the benchmark from time to time based upon the investment process
described in the Fund's "Principal Investment Strategies."
The Series' Statement of Additional Information provides additional information
about the compensation of the individuals named above (the "Portfolio Team"),
other accounts managed by each member of the Portfolio Team and each member of
the Portfolio Team's ownership of securities of the Fund(s) for which they
provide portfolio management.
28
REGULATORY MATTERS
In late 2003, J. & W. Seligman & Co. Incorporated (Seligman) conducted an
extensive internal review concerning mutual fund trading practices. Seligman's
review, which covered the period 2001-2003, noted one arrangement that
permitted frequent trading in certain open-end registered investment companies
then managed by Seligman (the "Seligman Funds"); this arrangement was in the
process of being closed down by Seligman before September 2003. Seligman
identified three other arrangements that permitted frequent trading, all of
which had been terminated by September 2002. In January 2004, Seligman, on a
voluntary basis, publicly disclosed these four arrangements to its clients and
to shareholders of the Seligman Funds. Seligman 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 Seligman and Seligman Advisors, Inc. (now known as
RiverSource Fund Distributors, Inc.) relating to frequent trading in the
Seligman Funds. Seligman 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 Seligman had previously resolved the
underlying issue with the Independent Directors of the Seligman Funds and made
recompense to the affected Seligman Funds. There have been no further
developments with the SEC on this matter.
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., 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 then managed
by Seligman is and has been misleading. The NYAG included other related claims
and also claimed that the fees charged by Seligman to the Seligman Funds were
excessive.
On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, the Seligman Parties entered into a stipulation of settlement with
the NYAG and settled the claims made by the NYAG. Under the terms of the
settlement, Seligman will pay $11.3 million to four Seligman Funds as follows:
$150,000 to Seligman Global Growth Fund, $550,000 to Seligman Global Smaller
Companies Fund, $7.7 million to Seligman Communications and Information Fund
and $2.9 million to Seligman Global Technology Fund. This settlement resolves
all outstanding matters between the Seligman Parties and the NYAG.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings,
including routine litigation, class actions, and governmental actions,
concerning matters arising in connection with the conduct of their business
activities. Ameriprise Financial believes that the Seligman Funds are not
currently the subject of, and that neither Ameriprise Financial nor any of its
affiliates are the subject of, any pending legal, arbitration or regulatory
proceedings that are likely to have a material adverse effect on the Seligman
Funds or the ability of Ameriprise Financial or its affiliates to perform under
their contracts with the Seligman Funds. Information regarding certain legal
proceedings may be found in the Seligman Funds' shareholder reports and in the
SAI. Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as
necessary, 8-K filings with the SEC on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
29
Shareholder Information
Each Fund offers five Classes of shares. Only Class I shares are offered by
this Prospectus. The Series' Board of Directors believes that no conflict of
interest currently exists among each Fund's Classes of shares. On an ongoing
basis, the Directors, in the exercise of their fiduciary duties under the
Investment Company Act of 1940 and applicable state law, will seek to ensure
that no such conflict arises.
Pricing of Fund Shares
When you buy or sell shares, you do so at the Class's net asset value ("NAV")
next calculated after the distributor or SDC, as the case may be, accepts your
request. However, in some cases, the Funds have authorized certain financial
intermediaries (and other persons designated by such financial intermediaries)
to receive purchase and redemption orders on behalf of each Fund. In such
instances, customer orders will be priced at the Fund's NAV next calculated
after the authorized financial intermediary (or other person designated by such
financial intermediary) receives the request. However, the distributor may
reject any request to purchase shares under the circumstances discussed later
in this Prospectus under the captions "Important Policies That May Affect Your
Account" and "Frequent Trading of Fund Shares." Authorized financial
intermediaries or their designees are responsible for forwarding your order in
a timely manner.
If your buy or sell order is received by an authorized financial intermediary
or its designee after the close of regular trading on the New York Stock
Exchange ("NYSE"), the order will be executed at the Class's NAV calculated as
of the close of regular trading on the next NYSE trading day. When you sell
shares, you receive the Class's per share NAV.
NAV: Computed separately for each Class by dividing that Class's share of the
net assets of the Fund (i.e., its assets less liabilities) by the total
number of outstanding shares of the Class.
The NAV of each Fund's shares is determined each day, Monday through Friday, on
days that the NYSE is open for trading. Because the Funds have portfolio
securities that are primarily listed on foreign exchanges that may trade on
weekends or other days when the Funds do not price their shares, the value of a
Fund's portfolio securities may change on days when you may not be able to buy
or sell Fund shares.
With respect to the Funds, generally, portfolio securities are valued at the
last sale price on the securities exchange or securities market on which such
securities primarily are traded. However, since trading in foreign securities
is substantially completed each day at various times prior to the close of
regular trading on the NYSE, the closing prices for such securities may not
fully reflect events that occur after the local markets close but before the
close of the NYSE. The Board of Directors of the Series has approved "fair
value" procedures under which a third party pricing service on a regular basis
recommends adjustments to the local closing prices of certain foreign equity
securities. The adjustments are based on a statistical analysis of the
historical relationships between the price movements of a security and
independent variables such as US market movements, sector movements, movements
in the American Depositary Receipt (ADR) of a security (if any) and movements
in country or regional exchange-traded funds or futures contracts. The factors
used vary with each security, depending on which factors have been most
important historically.
In addition, if RiverSource Investment concludes that the most recently
reported (or closing) price of a security held by a Fund is no longer valid or
reli-
30
able, or such price is otherwise unavailable, RiverSource Investment will value
the security at its fair value as determined in accordance with policies and
procedures approved by the Board of Directors of the Series. These fair value
procedures may be used to determine the value of a security held by a Fund in
the event of, among other things, natural disasters, acts of terrorism, market
disruptions, intra-day trading halts or 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 such security.
How to Buy Fund Shares
Class I shares are not subject to any initial or contingent deferred sales
charges or distribution expenses. This Class, however, is only offered to
certain types of investors. Class I shares may be purchased only by (i) a
"qualified tuition program" (within the meaning of Section 529 of the Internal
Revenue Code) approved by the distributor, (ii) certain qualified employee
benefit plans offered to employees of RiverSource Investments and its
affiliates and SDC, as available, (iii) any qualified or non-qualified employee
benefit plan or arrangement ("Benefit Plan") with over $200 million in assets
that is approved by the distributor, (iv) with respect to a specific Seligman
fund in the RiverSource Group of Funds, any Benefit Plan or other investor that
makes an initial investment of $3,000,000 or more in Class I shares of that
Seligman fund, (v) any Benefit Plan with at least $25 million in assets
purchasing Class I shares through a financial intermediary that has been
authorized by the distributor to offer Class I shares pursuant to a written
agreement, and (vi) any investor approved by the distributor that makes an
initial, combined investment of at least $5 million in the Class I shares of
two or more Seligman mutual funds. Each eligible investor is required to have a
single account and trade electronically with SDC either through the electronic
trading platform operated by the National Securities Clearing Corporation
(NSCC) or other electronic means acceptable to SDC. Benefit Plans that have the
same sponsor (or sponsors affiliated with one another) ("Affiliated Benefit
Plans") may aggregate their investments for determining eligibility to invest
in Class I shares. However, any Benefit Plan not otherwise eligible on its own
to invest in Class I shares must place orders for shares of a Seligman fund
through a single account maintained for the benefit of its Affiliated Benefit
Plans.
To make your initial investment in a Fund, an account must be established with
SDC.
How to Exchange Shares Among the Seligman Mutual Funds
The Seligman mutual funds are part of the RiverSource Group of Funds which, in
addition to RiverSource funds, includes RiverSource Partners funds and
Threadneedle funds. Each of the funds in the RiverSource Group of Funds shares
the same Board of Directors/Trustees. However, the Seligman mutual funds do not
share the same policies and procedures, as set forth in the Shareholder
Information section of this prospectus, as the other funds in the RiverSource
Group of Funds and may not be exchanged for shares of RiverSource funds,
RiverSource Partners funds or Threadneedle funds.
You may sell Fund shares to buy shares of the same class of another Seligman
mutual fund, or you may sell shares of another Seligman mutual fund to buy
shares of any Fund. Class I shares may not be offered by every Seligman mutual
fund. Please consult the relevant fund's current prospectus to determine if it
offers Class I shares. Exchanges will be made at each fund's respective NAV.
Exchanges generally must be requested in writing and received by the
distributor or SDC by 4:00 p.m. Eastern time to receive that day's NAV.
31
How to Sell Shares
Shares of a Fund can be redeemed in the same manner that shares can be
purchased, as described under the heading "How to Buy Fund Shares." SDC will
send proceeds from a sale by means agreed on between each institutional
shareholder and SDC. Sales handled by an authorized dealer or financial advisor
generally must follow the same procedure. The Funds do not charge any fees or
expenses for a sale handled by an authorized dealer or financial advisor, but
the dealer or financial advisor may charge a service fee. SDC may require
additional documents to sell Fund shares. Under unusual circumstances, the
Funds may suspend redemptions, or postpone payment for more than seven days, as
permitted by federal securities law.
Redemption in Kind. Seligman Global Smaller Companies Fund reserves the right
to satisfy redemption requests, in whole or in part, with an in-kind transfer
of the Fund's portfolio securities. Shareholders receiving a payment in the
form of securities may incur expenses, including brokerage expenses, in
converting these securities into cash. No shareholder will have the right to
require any distribution of any assets of the Fund (or any other Fund in the
Series) in kind.
Important Policies That May Affect Your Account
To protect you and other shareholders, each Fund reserves the right to:
.. Refuse any request to buy Fund shares;
.. Reject any request received by telephone;
.. Close your account if it does not have a certified taxpayer identification
number (this is your social security number for individuals);
.. Request additional information or close your account to the extent required
or permitted by applicable law or regulations, including those relating to
the prevention of money laundering; or
.. Close your account if your account remains below $250,000 for a period of at
least six months.
Frequent Trading of Fund Shares
As a matter of policy, each Fund discourages frequent trading of its shares. In
this regard, the Board of Directors of the Series has adopted written policies
and procedures that, subject to the limitations set forth below, are designed
to deter frequent trading that may be disruptive to the management of a Fund's
portfolio. If any Fund, the distributor, or SDC (the Funds' shareholder
servicing agent) (referred to collectively below as the "Seligman Entities")
determine that you have exchanged more than twice to and from the same Fund in
any three-month period, you will not be permitted to engage in further exchange
activity in such Fund for 90 days. The Seligman Entities may under certain
circumstances also refuse initial or additional purchases of a Fund's shares by
any person for any reason, including if that person is believed to be engaging,
or suspected of engaging, in trading of fund shares in excess of the guidelines
noted above (excluding purchases via a direct deposit through an automatic
payroll deduction program or purchases by the funds of Seligman Asset
Allocation Series, Inc. in the ordinary course of implementing their asset
allocation strategies). In addition, the Seligman Entities may under certain
circumstances refuse to accept exchange requests for accounts of any person
that has had a previous pattern (even if involving a different Seligman fund)
of trading in excess of the guidelines noted above. Furthermore, if you
purchase shares of a Fund through a financial intermediary, your ability to
purchase or exchange shares of a Fund could be limited if your account is
associated with a person (e.g., broker or financial advisor) previously
identified by the Seligman Entities as engaging in trading activity in excess
of the guidelines noted above. The Funds' policies do not permit exceptions to
be granted, and the policies are, to the extent possible, applied uniformly to
all
32
accounts where beneficial ownership has been ascertained. Shareholders and
their financial intermediaries seeking to engage in excessive trading practices
may deploy a variety of strategies to avoid detection, and, despite the efforts
of the Seligman Entities to prevent excessive trading, there is no guarantee
that the Seligman Entities will be able to identify such shareholders or
curtail their trading practices. The ability of the Seligman Entities to detect
and curtail excessive trading practices may also be limited by operational
systems and technological limitations and hindered by financial intermediaries
purposefully or unwittingly facilitating these practices. In addition, each
Fund receives purchase, exchange and redemption orders through financial
intermediaries, some of whom hold shares through omnibus accounts, and the
Seligman Entities will not, under most circumstances, know of or be able to
reasonably detect excessive trading which may occur through these financial
intermediaries. Omnibus account arrangements and their equivalents (e.g., bank
trust accounts and retirement plans) are a common form of holding shares of
funds by many brokers, banks and retirement plan administrators. These
arrangements often permit the financial intermediary to aggregate many client
transactions and ownership positions and provide each Fund with combined
purchase and redemption orders. In these circumstances, the Seligman Entities
may not know the identity of particular shareholders or beneficial owners or
whether particular purchase or sale orders were placed by the same shareholder
or beneficial owner. A substantial percentage of shares of each Fund may be
held through omnibus accounts and their equivalents.
To the extent that the efforts of the Seligman Entities are unable to eliminate
excessive trading practices in a Fund, these practices may interfere with the
efficient management of such Fund's portfolio, hinder such Fund's ability to
pursue its investment objective and may reduce the returns of long-term
shareholders. Additionally, these practices may result in a Fund engaging in
certain activities to a greater extent than it otherwise would, such as
maintaining higher cash balances, using its line of credit to a greater extent
and engaging in additional portfolio transactions. Increased portfolio
transactions and use of the line of credit could correspondingly increase a
Fund's operating costs and decrease a Fund's investment performance.
Maintenance of a higher level of cash balances necessary to meet frequent
redemptions could likewise result in lower Fund investment performance during
periods of rising markets.
DIVIDEND:
A payment by a mutual fund, usually derived from a fund's net investment
income (dividends and interest earned on portfolio securities less expenses).
CAPITAL GAIN DISTRIBUTION:
A payment to mutual fund shareholders which represents profits realized on
the sale of securities in a fund's portfolio.
EX-DIVIDEND DATE:
The day on which any declared distributions (dividends or capital gains) are
deducted from a fund's assets before it calculates its NAV.
Investors who purchase shares of a Fund that invests in non-US securities
and/or small-cap securities may be more likely to seek to use frequent trading
strategies to take advantage of potential arbitrage opportunities. Such
activity could adversely impact these Funds.
Dividends and Capital Gain Distributions
Each Fund generally pays any dividends from its net investment income and
distributes any net capital gains realized on investments annually. It is
expected that each Fund's distributions will be primarily capital gains.
Seligman Global Growth Fund, Seligman Global Smaller Companies Fund and
Seligman International Growth Fund have substantial capital loss carry-forwards
which are available for offset against future net capital gains,
33
expiring in varying amounts through 2016. Accordingly, no capital gain
distributions are expected to be paid to shareholders until net capital gains
have been realized in excess of the available capital loss carry-forwards.
Institutional shareholders such as tax-deferred retirement plans and qualified
tuition programs generally will have dividend and capital gain distributions
reinvested in additional Fund shares. Other institutional shareholders may
elect to:
(1)reinvest both dividends and capital gain distributions;
(2)receive dividends in cash and reinvest capital gain distributions; or
(3)receive both dividends and capital gain distributions in cash.
If you want to change your election, you may write to SDC at P.O. Box 9759,
Providence, RI 02940-9759, or an authorized dealer or your financial advisor
may call SDC. Your request must be received by SDC before the record date to be
effective for that dividend or capital gain distribution.
Dividends or capital gain distributions that are not reinvested will be sent by
means agreed on between SDC and each shareholder. Such distributions can be
sent by check or by wire transfer, or, if you have current ACH bank information
on file, directly deposited into a predesignated bank account, typically within
2 business days from the payable date.
Dividends and capital gain distributions are reinvested to buy additional Fund
shares on the payable date using the NAV of the ex-dividend date.
Taxes
The tax treatment of dividends and capital gain distributions is the same
whether you take them in cash or reinvest them to buy additional Fund shares.
Dividends paid by the Fund (other than "qualified dividend income") are taxable
to you as ordinary income. Tax-deferred retirement plans and qualified tuition
programs are not taxed currently on dividends or capital gain distributions or
on gains resulting from the sale or exchange of Fund shares.
You may be taxed at different rates on capital gains distributed by the Fund
depending on the length of time the Fund holds its assets.
When you sell Fund shares, any gain or loss you realize will generally be
treated as a long-term capital gain or loss if you held your shares for more
than one year, or as a short-term capital gain or loss if you held your shares
for one year or less. However, if you sell Fund shares on which a long-term
capital gain distribution has been received and you held the shares for six
months or less, any loss you realize will be treated as a long-term capital
loss to the extent that it offsets the long-term capital gain distribution.
An exchange of a Fund's shares is a sale and may result in a gain or loss for
federal income tax purposes.
Each January, you will be sent information on the tax status of any
distributions made during the previous calendar year. Because each
shareholder's situation is unique, you should always consult your tax advisor
concerning the effect income taxes may have on your individual investment.
For further information, please see the Series' Statement of Additional
Information under the section entitled "Taxation of the Series".
34
The Seligman Mutual Funds
Shares of the following Seligman mutual funds may be exchanged for one another,
but shares of these Seligman mutual funds may not, at the current time, be
exchanged for shares of the other funds in the RiverSource Group of Funds.
EQUITY
- --------------------------------------------------------------------------------
SPECIALTY
- --------------------------------------------------------------------------------
Seligman Communications and Information Fund+
Seeks capital appreciation by investing in companies operating in aspects of
the communications, information and related industries.
Seligman Emerging Markets Fund+
Seeks long-term capital appreciation by investing primarily in equity
securities of companies in emerging markets.
Seligman Global Technology Fund
Seeks long-term capital appreciation by investing primarily in global
securities (US and non-US) of companies in the technology and
technology-related industries.
SMALL COMPANY
- --------------------------------------------------------------------------------
Seligman Frontier Fund+
Seeks growth of capital by investing primarily in small company growth stocks.
Seligman Global Smaller Companies Fund+
Seeks long-term capital appreciation by investing in securities of smaller
companies around the world, including the US.
Seligman Smaller-Cap Value Fund+
Seeks long-term capital appreciation by investing in common stocks of smaller
companies, deemed to be "value" companies by the investment manager.
MEDIUM COMPANY
- --------------------------------------------------------------------------------
Seligman Capital Fund+
Seeks capital appreciation by investing in the common stocks of medium-sized
companies.
LARGE COMPANY
- --------------------------------------------------------------------------------
Seligman Common Stock Fund+
Seeks total return through a combination of capital appreciation and current
income.
Seligman Global Growth Fund+
Seeks capital appreciation by investing primarily in equity securities of
companies that have the potential to benefit from global economic or social
trends.
Seligman Growth Fund+
Seeks long-term capital appreciation.
Seligman International Growth Fund+
Seeks long-term capital appreciation by generally investing in securities of
large- and mid-capitalization growth companies in international markets.
Seligman Large-Cap Value Fund+
Seeks long-term capital appreciation by investing in common stocks of large
companies, deemed to be "value" companies by the investment manager.
BALANCED
- --------------------------------------------------------------------------------
Seligman Income and Growth Fund+
Seeks total return through a combination of capital appreciation and income
consistent with what is
- -------------
+ Offers Class I shares.
35
believed to be a prudent allocation between equity and fixed-income securities.
REAL ESTATE SECURITIES
- --------------------------------------------------------------------------------
Seligman LaSalle Global Real Estate Fund+
Seeks total return through a combination of current income and long-term
capital appreciation by investing in equity and equity-related securities
issued by global real estate companies, such as US real estate investment
trusts (REITs) and similar entities outside the US.
Seligman LaSalle Monthly Dividend Real Estate Fund+
Seeks to produce a high level of current income with capital appreciation as a
secondary objective by investing in equity and equity-related securities issued
by real estate companies, such as real estate investment trusts (REITs).
FIXED-INCOME
- --------------------------------------------------------------------------------
INCOME
- --------------------------------------------------------------------------------
Seligman High-Yield Fund+
Seeks a high level of current income and may also consider the potential for
capital appreciation consistent with prudent investment management. The Fund
invests primarily in non-investment grade, high-yield securities.
Seligman Core Fixed Income Fund+
Seeks to produce a high level of current income consistent with prudent
exposure to risk. Capital appreciation is a secondary objective. The Fund
invests a significant portion of its assets in investment grade fixed-income
securities.
Seligman U.S. Government Securities Fund
Seeks a high level of current income consistent with prudent investment risk
primarily by investing in a diversified portfolio of securities issued or
guaranteed by the US government, its agencies or instrumentalities, or
government sponsored enterprises.
MUNICIPAL
- --------------------------------------------------------------------------------
Seligman Municipal Funds:
National Fund
Seeks maximum income, exempt from regular federal income taxes.
State-specific funds:*
Seek to maximize income exempt from regular federal income taxes and from
regular income taxes in the designated state.
California Louisiana New Jersey
.. High-Yield Maryland New York
.. Quality Massachusetts North Carolina
Colorado Michigan Ohio
Florida Minnesota Oregon
Georgia Missouri Pennsylvania
South Carolina
* A small portion of income may be subject to state and local taxes.
MONEY MARKET
- --------------------------------------------------------------------------------
Seligman Cash Management Fund+
Seeks to preserve capital and to maximize liquidity and current income by
investing only in high-quality money market securities. The fund seeks to
maintain a constant net asset value of $1.00 per share.
ASSET ALLOCATION
- --------------------------------------------------------------------------------
Seligman Asset Allocation Series, Inc. offers four different asset-allocation
funds that pursue their investment objectives by allocating their assets among
other mutual funds in the Seligman Group.
Seligman Asset Allocation Aggressive Growth Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in aggressive
36
- -------------
+ Offers Class I shares.
growth-oriented domestic and international equity securities weighted toward
small- and medium-capitalization companies.
Seligman Asset Allocation Growth Fund
Seeks long-term capital appreciation by creating a portfolio of mutual funds
that invests in growth-oriented domestic and international equity securities,
with a more even weighting among small-, medium-and large-capitalization
companies than Seligman Asset Allocation Aggressive Growth Fund.
Seligman Asset Allocation Moderate Growth Fund
Seeks capital appreciation by creating a portfolio of mutual funds that invests
in small-, medium- and large-capitalization domestic and international equity
securities as well as real estate securities and domestic fixed-income
securities.
Seligman Asset Allocation Balanced Fund
Seeks capital appreciation and preservation of capital with current income and
growth of income by creating a portfolio of mutual funds that invests in
medium- and large-capitalization and dividend producing domestic and
international equity securities supplemented by a larger allocation to real
estate securities as well as domestic fixed-income securities, cash and cash
equivalents than Seligman Asset Allocation Moderate Growth Fund.
SELIGMAN TARGETHorizon ETF PORTFOLIOS, INC. offers five asset-allocation mutual
funds that seek to achieve their respective investment objectives by allocating
their assets among exchange-traded funds (ETFs).
Seligman TargETFund 2045+
Seeks capital appreciation until migration, and thereafter capital appreciation
consistent with a strategy of steadily decreasing emphasis on capital
appreciation and steadily increasing emphasis on capital preservation and
current income as the year 2045 approaches.
Seligman TargETFund 2035+
Seeks capital appreciation until migration, and thereafter capital appreciation
consistent with a strategy of steadily decreasing emphasis on capital
appreciation and steadily increasing emphasis on capital preservation and
current income as 2035 approaches.
Seligman TargETFund 2025+
Seeks capital appreciation consistent with a strategy of steadily decreasing
emphasis on capital appreciation and steadily increasing emphasis on capital
preservation and current income as the year 2025 approaches.
Seligman TargETFund 2015+
Seeks capital appreciation and current income consistent with a strategy of
steadily decreasing emphasis on capital appreciation and steadily increasing
emphasis on capital preservation and current income as the year 2015 approaches.
Seligman TargETFund Core+
Seeks capital appreciation and preservation of capital with current income.
- -------------
+ Offers Class I shares.
37
Other Information
PAYMENTS TO FINANCIAL INSTITUTIONS. The distributor and its affiliates make or
support additional cash payments out of their own resources (including profits
earned from providing services to the fund) to financial institutions,
including inter-company allocation of resources or payments to affiliated
broker-dealers, in connection with agreements between the distributor and
financial institutions pursuant to which these financial institutions sell fund
shares and provide services to their clients who are shareholders of the fund.
These payments and intercompany allocations (collectively, "payments") do not
change the price paid by investors in the fund or fund shareholders for the
purchase or ownership of fund shares of the fund, and these payments are not
reflected in the fees and expenses of the fund, as they are not paid by the
fund.
In exchange for these payments, a financial institution may elevate the
prominence or profile of the fund within the financial institution's
organization, and may provide the distributor and its affiliates with preferred
access to the financial institution's registered representatives or preferred
access to the financial institution's customers. These arrangements are
sometimes referred to as marketing and/or sales support payments, program
and/or shareholder servicing payments, or revenue sharing payments. These
arrangements create potential conflicts of interest between a financial
institution's pecuniary interest and its duties to its customers, for example,
if the financial institution receives higher payments from the sale of a
certain fund than it receives from the sale of other funds, the financial
institution or its representatives may be incented to recommend or sell shares
of the fund where it receives or anticipates receiving the higher payment
instead of other investment options that may be more appropriate for the
customer. Employees of Ameriprise Financial and its affiliates, including
employees of affiliated broker-dealers, may be separately incented to recommend
or sell shares of the fund, as employee compensation and business unit
operating goals at all levels are tied to the company's success. Certain
employees, directly or indirectly, may receive higher compensation and other
benefits as investment in the fund increases. In addition, management, sales
leaders and other employees may spend more of their time and resources
promoting Ameriprise Financial and its subsidiary companies, including
RiverSource Investments and the distributor, and the products they offer,
including the fund.
These payments are typically negotiated based on various factors including, but
not limited to, the scope and quality of the services provided by the financial
institution, its reputation in the industry, its ability to attract and retain
assets, its access to target markets, its customer relationships, the profile
the fund may obtain within the financial institution, and the access the
distributor or other representatives of the fund may have within the financial
institution for advertisement, training or education, including opportunities
to present at or sponsor conferences for the registered representatives of the
financial institution and its customers.
These payments are usually calculated based on a percentage of fund assets
owned through the financial institution and/or as a percentage of fund sales
attributable to the financial institution. Certain financial institutions
require flat fees instead of, or in addition to, these asset-based fees as
compensation for including or maintaining a fund on their platforms, and, in
certain situations, may require the reimbursement of ticket or operational
charges--fees that a financial institution charges its registered
representatives for effecting transactions in the fund. The amount of payment
varies by financial institution (e.g., initial platform set-up fees, ongoing
maintenance or service fees, or asset or sales based fees). The amount of
payments also varies by the type of sale. For instance, purchases of one fund
may warrant a greater or lesser amount of payments than purchases of another
fund. Additionally, sale and maintenance of shares on a stand alone basis may
result in a greater or
38
lesser amount of payments than the sale and maintenance of shares made through
a plan, wrap or other fee-based program. Payments to affiliates may include
payments as compensation to employees of RiverSource Investments who are
licensed by the distributor in respect of certain sales and solicitation
activity on behalf of the fund. These payments may be and often are significant.
Payments to affiliated broker-dealers are within the range of the payments the
distributor pays to similarly-situated third party financial institutions and
the payments such affiliated broker-dealers receive from third party fund
sponsors related to the sale of their sponsored funds. However, because of the
large amount of RiverSource fund assets (in aggregate) currently held in
customer accounts of the affiliated broker-dealers, the distributor and its
affiliates, in the aggregate, pay significantly more in absolute dollars than
other third-party fund sponsors pay to the affiliated broker-dealers for the
sale and servicing of their sponsored funds. This level of payment creates
potential conflicts of interest which the affiliated broker-dealers seek to
mitigate by disclosure and implementation of internal controls, as well as the
rules and regulations of applicable regulators.
From time to time, to the extent permitted by SEC and NASD rules and by other
applicable laws and regulations, the distributor and its affiliates may make
other reimbursements or payments to financial institutions or their registered
representatives, including non-cash compensation, in the form of gifts of
nominal value, occasional meals, tickets, or other entertainment, support for
due diligence trips, training and educational meetings or conference
sponsorships, support for recognition programs, and other forms of non-cash
compensation permissible under regulations to which these financial
institutions and their representatives are subject. To the extent these are
made as payments instead of reimbursement, they may provide profit to the
financial institution to the extent the cost of such services was less than the
actual expense of the service.
The financial institution through which you are purchasing or own shares of the
fund has been authorized directly or indirectly by the distributor to sell the
fund and/or to provide services to you as a shareholder of the fund. Investors
and current shareholders may wish to take such payment arrangements into
account when considering and evaluating any recommendations they receive
relating to fund shares. If you have questions regarding the specific details
regarding the payments your financial institution may receive from the
distributor or its affiliates related to your purchase or ownership of the
fund, please contact your financial institution.
The payments described in this section are in addition to fees paid by the fund
to the distributor under 12b-1 plans, which fees may be used to compensate
financial institutions for the distribution of fund shares and the servicing of
fund shareholders, or paid by the fund to SDC, which fees may be used to
support networking or servicing fees to compensate financial institutions for
supporting shareholder account maintenance, sub-accounting, plan recordkeeping
or other services provided directly by the financial institution to
shareholders or plans and plan participants, including retirement plans, 529
plans, Health Savings Account plans, or other plans, where participants
beneficially own shares of the fund.
ADMINISTRATION SERVICES. Ameriprise Financial, 200 Ameriprise Financial Center,
Minneapolis, Minnesota 55474, provides or compensates others to provide
administrative services to the funds. These services include administrative,
accounting, treasury, and other services. Administrative services are provided
without charge to the Seligman funds by Ameriprise Financial under a separate
administrative services agreement with each such fund, rather than by
RiverSource Investments under a Seligman fund's management agreement. The fees
under the administrative services agreement may be raised without shareholder
approval, although RiverSource Investments expects that
39
any increase would be offset by a decrease in its management fee paid by a
Seligman fund.
AFFILIATED PRODUCTS. RiverSource Investments also serves as investment manager
to Seligman funds and RiverSource funds which are structured to provide
asset-allocation services to shareholders of those funds by investing in shares
of other Seligman funds and RiverSource funds, respectively, (Funds of Funds)
and to discretionary managed accounts that invests exclusively in the funds
(collectively referred to as "affiliated products"). These affiliated products,
individually or collectively, may own a significant percentage of the fund's
outstanding shares. The fund may experience relatively large purchases or
redemptions from the affiliated products. Although RiverSource Investments may
seek to minimize the impact of these transactions, for example, by structuring
them over a reasonable period of time or through other measures, the fund may
experience increased expenses as it buys and sells securities to manage
transactions for the affiliated products. In addition, because the affiliated
products may own a substantial portion of the fund, a redemption by one or more
affiliated products could cause the fund's expense ratio to increase as the
fund's fixed costs would be spread over a smaller asset base. RiverSource
Investments monitors expense levels and is committed to offering funds that are
competitively priced. RiverSource Investments reports to the Board on the steps
it has taken to manage any potential conflicts.
40
Financial Highlights
The tables below are intended to help you understand the financial performance
of each Fund's Class I shares for the past five years. Certain information
reflects financial results for a single share of Class I shares held throughout
the period shown. Per share amounts are calculated based on average shares
outstanding during a particular period. "Total return" shows the rate that you
would have earned (or lost) on an investment in the Class, assuming you
reinvested all your dividends and capital gain distributions, if any. Total
returns do not reflect any transaction costs on your investment or taxes. If
such costs and taxes were included, the returns presented below would have been
lower, Deloitte & Touche LLP, Independent Registered Public Accounting Firm,
has audited this financial information. Their report, along with the Series'
financial statements, is included in the Series' Annual Report, which is
available upon request.
EMERGING MARKETS FUND
CLASS I
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:*
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $20.20 $13.25 $10.60 $ 7.92 $6.61
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.12 (0.02) 0.04 0.06 0.05
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactionsoo (9.75) 8.36 3.33 2.62 1.26
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (9.63) 8.34 3.37 2.68 1.31
- -----------------------------------------------------------------------------------------------------------------
Less distributions
Distributions from net realized capital gain (2.58) (1.39) (0.72) -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $7.99 $20.20 $13.25 $10.60 $7.92
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (54.25)% 69.61% 33.66% 33.84% 19.82%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $5,335 $12,043 $8,060 $6,470 $4,836
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.77% 1.72% 1.73% 1.89% 1.87%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 0.84% (0.11)% 0.34% 0.62% 0.63%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 123.49% 106.56% 110.49% 129.33% 106.84%
- -----------------------------------------------------------------------------------------------------------------
- -------------
See footnotes on page 43.
41
GLOBAL GROWTH FUND
CLASS I
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------
2008 2007 2006 2005 2004
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE DATA:*
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $12.03 $ 8.86 $7.57 $7.45 $6.29
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.01) (0.07) (0.03) 0.01 (0.03)
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactions/oo/ (6.32) 3.24 1.32 0.11 1.19
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations (6.33) 3.17 1.29 0.12 1.16
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $5.70 $12.03 $8.86 $7.57 $7.45
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (52.62)% 35.78% 17.04% 1.61% 18.44%#
- ----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $904 $1,887 $2,639 $2,207 $2,081
- ----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.50% 1.52% 1.51% 1.59% 1.55%
- ----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (0.11)% (0.73)% (0.38)% 0.11% (0.42)%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 79.25% 86.05% 127.09% 269.07% 270.63%
- ----------------------------------------------------------------------------------------------------------------------
GLOBAL SMALLER COMPANIES FUND
CLASS I
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------
2008 2007 2006 2005 2004
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE DATA:*
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $20.34 $19.36 $17.02 $13.91 $11.91
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.07 0.08 0.03 0.01 --o
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactionsoo (9.68) 3.21 2.74 3.10 2.00
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations (9.61) 3.29 2.77 3.11 2.00
- ----------------------------------------------------------------------------------------------------------------------
Less distributions
Distributions from net realized capital gain (2.06) (2.31) (0.43) -- --
- ----------------------------------------------------------------------------------------------------------------------
Proceeds from Regulatory Settlement 0.01/(1)/ -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $8.68 $20.34 $19.36 $17.02 $13.91
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (52.20)%/(1)/ 19.24% 20.99% 22.36% 16.79%#
- ----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $27,976 $57,048 $11,607 $9,643 $7,979
- ----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.28% 1.21% 1.26% 1.36% 1.45%
- ----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets 0.50% 0.38% 0.13% 0.05% (0.02)%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 83.70% 72.24% 67.93% 76.40% 94.65%
- ----------------------------------------------------------------------------------------------------------------------
- -------------
See footnotes on page 43.
42
INTERNATIONAL GROWTH FUND
CLASS I
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------
2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------
PER SHARE DATA:*
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $23.04 $16.35 $13.09 $12.44 $10.13
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.10 --o 0.01 0.06 (0.02)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency
transactionsoo (11.70) 6.69 3.25 0.59 2.33
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations (11.60) 6.69 3.26 0.65 2.31
- -----------------------------------------------------------------------------------------------------------------
Less Distributions:
- -----------------------------------------------------------------------------------------------------------------
Distributions from net realized capital gain (3.06) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of year $8.38 $23.04 $16.35 $13.09 $12.44
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN: (57.77)% 40.92% 24.90% 5.23% 22.80%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $9,083 $16,332 $11,740 $9,292 $7,911
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.41% 1.36% 1.38% 1.46% 1.59%
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets 0.66% 0.02% 0.09% 0.49% (0.18)%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 344.77% 235.33% 165.09% 189.17% 241.12%
- -----------------------------------------------------------------------------------------------------------------
- -------------
* Per share amounts are calculated based on average shares outstanding.
o Less than $0.01.
# Excluding the effect of payments received from Seligman (the predecessor
investment manager), total returns would have been 18.28% and 16.58% for the
Global Growth Fund and Global Smaller Companies Fund, respectively.
(1) In June 2008, the Global Smaller Companies Fund received its portion of the
proceeds from a regulatory settlement between an unaffiliated third party
and the SEC, which increased the total return by 0.09%.
43
How to Contact Us
The Funds
Write to Corporate Communications/Investor Relations Department
Ameriprise Financial, Inc.
Minneapolis, Minnesota 55474
Phone Toll-free in the US (800) 221-7844
Outside the US (212) 850-1864
Account Services
Write to Shareholder Service Agent/Seligman Group of Funds
Seligman Data Corp.
For investments P.O. Box 9766
into an account Providence, RI 02940-9766
For non-investment P.O. Box 9759
inquiries Providence, RI 02940-9759
For matters requiring 101 Sabin St.
overnight delivery Pawtucket, RI 02860
Phone Non-Retirement Accounts
Toll-free in the US (800) 221-2450
Outside the US (212) 682-7600
Retirement Plan Services
Toll-free (800) 445-1777
24-hour automated telephone access is available by calling (800) 622-4597 on a
touchtone telephone. You will have instant access to price, yield, account
balance, most recent transaction, and other information.
44
For More Information
The information below is available, without charge, upon request by calling
toll-free 800-221-2450 in the US or collect 212-682-7600 outside the US. You
may also call these numbers to request other information about a Fund or to
make shareholder inquiries.
The Statement of Additional Information ("SAI") contains additional information
about each Fund. It is on file with the Securities and Exchange Commission, or
SEC, and is incorporated by reference into (is legally part of) this Prospectus.
Annual/Semi-Annual Reports contain additional information about each Fund's
investments. In the Annual Report, you will find a discussion of the market
conditions and investment strategies that significantly affected each Fund's
performance during its last fiscal year. The Fund's SAI and most recent
Annual/Semi-Annual Reports are also available, free of charge, at
www.seligman.com.
This Prospectus is intended for use in connection with certain tax-deferred
investment programs.
Information about each Fund, including the Prospectus and SAI, can be viewed
and copied at the SEC's Public Reference Room in Washington, DC. For more
information about the operation of the Public Reference Room, call
(202) 551-8090. The Prospectus, SAI, Annual/Semi-Annual Reports and other
information about a Fund are also available on the EDGAR Database on the SEC's
Internet site: www.sec.gov.
The website references in this Prospectus are inactive textual references, and
information contained in or otherwise accessible through these websites does
not form a part of this Prospectus.
Copies of this information may also be obtained, upon payment of a duplicating
fee, by electronic request at the following E-mail address: publicinfo@sec.gov,
or by writing: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102.
SEC File Number: 811-6485