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SQF
LISTED
NYSE
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Seligman
Quality Municipal Fund September 30, 2006
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FUND OBJECTIVE AND STRATEGY
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Seligman Quality Municipal Fund seeks to provide a high level of current income
exempt from federal income taxes, consistent with preservation of capital and
with consideration given to opportunities for capital gain. The Fund invests
only in investment-grade tax-exempt municipal bonds.
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PORTFOLIO MANAGEMENT
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Portfolio Managers:
Thomas G. Moles and Eileen A. Comerford
Investment Team:
Seligman Municipal Team
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TOP FIVE HOLDINGS(1)
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Jefferson County, AL Sewer Rev.
(Capital Improvement Warrants) ......................................... 5.2%
San Diego, CA Public Facilities Financing
Authority Sewer Rev .................................................... 5.2
Chicago, IL GOs ......................................................... 4.8
Triborough Bridge & Tunnel Authority,
NY Rev .................................................................. 4.3
Arizona Agricultural Improvement
and Power District Rev
(Salt River Project) ................................................... 4.3
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Total ................................................................... 23.8
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FUND SNAPSHOT
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Inception 1991
Net Investment Assets $99.9 million
NYSE Symbol SQF
NASDAQ Symbol XSQFX
Average Weighted Maturity 15.1 years
AMT Exposure(2) 9.5%
Option-Adjusted Duration(3) 9.2 years
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QUALITY COMPOSITION(1)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
BBB 5%
AA 12%
AAA 83%
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BOND CALLS(1)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2.4% 7.4% 2.1% 10.8% 4.8%
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2006 2007 2008 2009 2010
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PRICE-PER-SHARE
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Current 52 Week High 52 Week Low
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Market Price $13.16 $13.19 $ 12.25
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Corresponding Net Asset Value $14.05 $13.97 $ 13.94
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Corresponding Premium/(Discount) (6.33)% (5.58)% (12.12)%
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AVERAGE ANNUAL TOTAL RETURNS
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1 Year 5 Years 10 Years
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Neet Asset Value 3.89% 5.39% 6.13%
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Market Value 9.15 7.35 6.20
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IMPORTANT PERFORMANCE INFORMATION
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Performance data quoted herein represents past performance. Past performance
does not guarantee or indicate future results. Investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be higher or lower than the performance data quoted. Total
returns of the Fund as of the most recent month-end will be made available at
www.seligman.com by the seventh business day following that month-end.
Performance data quoted does not reflect the deduction of taxes that investors
may pay on Fund distributions or on the sale of fund shares. Rates reflect
changes in the market price or net asset value, and assume reinvestment of all
distributions. Effective January 1, 2006, the Manager has contractually reduced
its management fee from 0.65% to 0.55%. Absent such waiver, returns would have
been lower.
(1) Top holdings exclude short-term holdings, and are shown as a percentage of
net investment assets. Quality composition ratings are primarily those
issued by Moody's Investors Service, Inc. ("Moody's"). Where Moody's
ratings have not been assigned, ratings from Standard & Poor's Corporation
("S&P") were used. Pre-refunded and escrowed-to-maturity securities that
have been rerated as AAA by S&P but have not been rerated by Moody's have
been reported as AAA. The Fund is actively managed and holdings are
subject to change. Quality composition excludes short-term holdings and is
shown as a percentage of total long-term securities. Bond Calls shows the
percentage of bonds in the Fund's portfolio that are callable during that
year. There can be no assurance that the securities listed above have
remained or will remain in the Fund's portfolio. Information regarding
holdings should not be construed as a recommendation to buy or sell any
security, an indication that any security is suitable for a particular
investor or that any of the securities listed were or will be profitable.
Portfolio holdings information is available at www.seligman.com.
(2) Holdings as of September 30, 2006 with investment income subject to the
federal alternative minimum tax. A portion of income may be subject to
state taxes. Capital gain distributions, if any, are subject to federal,
state, and local taxes.
(3) Bond duration is the average amount of time that it takes to receive the
interest and principal of a bond or portfolio of bonds. The duration
formula is based on a formula that calculates the weighted average of the
cash flows (interest and principal payments) of the bond, discounted to
the present time. Option Adjusted Duration is the modified duration of a
bond after adjusting for any embedded optionality. The Option Adjusted
measure of duration takes into account the fact that yield changes may
change the expected cash flows of the bond because of the presence of an
embedded option, such as a call or put.
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NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
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SQF
LISTED
NYSE
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Seligman
Quality Municipal Fund September 30, 2006
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FOR MORE INFORMATION
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You should consider the investment objectives, risks, charges, and expenses of
the Fund carefully before investing. You can obtain the Fund's most recent
annual, semi-annual and quarterly reports by contacting your financial advisor
or Seligman Services, Inc. at 800-597-6068. These reports and other information
are also available on the Securities and Exchange Commission's EDGAR Database.
The Fund is a closed-end investment company and its common stock is listed on
the New York Stock Exchange.
For more information, please visit our website at www.seligman.com
The website reference contained herein is an inactive textual reference and
information contained in or otherwise accessible through this website does not
form a part of this fact sheet.
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PER COMMON SHARE DATA
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Quarter Ending 9/30/06
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Gross Income $ 0.235
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Expenses 0.056
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Common Dividends 0.123
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Preferred Dividends 0.064
Month Ending 9/30/06
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Current Monthly Dividends $0.0410
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SEC Yield 3.05%
Current SEC yield, representing the annualized yield (after dividends on
Preferred Stock) for the 30-day period ended September 30, 2006, has been
computed in accordance with SEC regulations, and will fluctuate. The Manager
waived a portion of its fees. Absent such waiver, the yield would have been
2.89%.
Of the monthly distributions paid to Common Stockholders in 2006, 4.1% was in
excess of the Fund's net income (i.e. a return of capital), but under applicable
federal law, will be taxed as ordinary income.
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ASSETS
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Common $66,338,367
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Preferred $33,600,000
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Net Investment $99,938,367
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Leverage % of common assets 51%
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Leverage % of net investment assets 34%
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A fund is considered "leveraged" when it borrows money or otherwise issues
senior securities to make additional investments. Closed-end funds may issue
senior securities (preferred stock or debentures) or borrow money to "leverage"
their investment positions. The Fund's assets were leveraged by issuing shares
of Preferred Stock shortly after the issuance of Common Stock. The proceeds of
the Preferred offering were used to purchase additional municipal securities for
the portfolios.
The use of leverage increases risks for holders of Common Stock, including
increasing the volatility of both the net asset value and market price of the
Common Stock. Fluctuations in the dividend rates on the Preferred Stock, or
interest paid on borrowings, will affect the rate of return to holders of Common
Stock. There can be no assurance that the Fund will be able to realize a higher
rate of return on its investment portfolio than the then-current dividend rate
on the Preferred Stock or interest on borrowed money.
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A WORD ABOUT RISK
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The net asset value of shares may not always correspond to the market price of
such shares. Shares of many closed-end funds frequently trade at a discount from
their net asset value. The Fund is subject to stock market risk, which is the
risk that stock prices overall will decline over short or long periods,
adversely affecting the value of an investment in the Fund.
Fixed-income securities owned by the Fund are subject to interest-rate risk,
credit risk, prepayment risk, and market risk. US government bonds that are
guaranteed by the US government, if held to maturity, offer both a fixed rate of
return and fixed principal value. An investment in the Fund is not insured or
guaranteed by the US government.
To the extent that the Fund concentrates its investments in municipal securities
issued by a single state and its municipalities, specific events or factors
affecting a particular state may have an impact on the municipal securities of
that state without affecting the municipal market in general.
There is no guarantee that the Fund's investment goals/objectives will be met,
and you could lose money.
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NOT FDIC INSURED o NOT BANK GUARANTEED o MAY LOSE VALUE
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CEQUAL-0906 SELIGMAN ADVISORS, INC.
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