UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22328
Columbia Seligman Premium Technology Growth Fund, Inc.
(Exact name of registrant as specified in charter)
290 Congress Street, Boston, MA 02210
(Address of principal executive offices) (Zip code)
Daniel J. Beckman
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
Ryan C. Larrenaga, Esq.
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 345-6611
Date of fiscal year end: December 31
Date of reporting period: June 30, 2024
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
Columbia Seligman Premium Technology Growth Fund, Inc.
June 30, 2024 (Unaudited)
|
|
No Financial Institution Guarantee
|
|
Under the managed distribution policy of Columbia Seligman Premium Technology Growth
Fund, Inc. (the Fund) and subject to the approval of the Fund’s Board of Directors (the Board), the Fund expects to make quarterly cash distributions (in February, May, August and November) to holders of common stock (Common Stockholders). The Fund’s most recent distribution under its managed distribution policy (paid on August 27, 2024) amounted to $0.4625 per
share, which is equal to a quarterly rate of 1.3943% (5.58% annualized) of the Fund’s market price of $33.17 per share as of July 31, 2024. You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions or from the terms of the Fund’s managed distribution policy. Historically, the Fund has at times distributed more
than its income and net realized capital gains, which has resulted in Fund distributions substantially consisting of return
of capital or other capital source. A return of capital may occur, for example, when some or all of the money that you invested in
the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income’. The Fund’s Board may determine in the future that the Fund’s managed distribution policy and the amount or timing of the distributions should not be continued in light of changes in the Fund’s portfolio holdings, market or other conditions or factors, including that the distribution rate under such policy may not be dependent upon the amount of the Fund’s earned income or realized capital gains. The Board could also consider amending or terminating
the current managed distribution policy because of potential adverse tax consequences associated with maintaining the
policy. In certain situations, returns of capital could be taxable for federal income tax purposes, and all or a portion of the Fund’s capital loss carryforwards from prior years, if any, could effectively be forfeited. The Board may amend or terminate the Fund’s managed distribution policy at any time without prior notice to Fund stockholders; any such change or termination
may have an adverse effect on the market price of the Fund’s shares.
See Notes to Financial Statements for additional information related to the Fund’s managed distribution policy.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Columbia Seligman Premium Technology Growth Fund, Inc. (the Fund) mails one stockholder
report to each stockholder address. If you would like more than one report, please call shareholder services
at 800.937.5449 and additional reports will be sent to you.
Proxy voting policies and procedures
The policy of the Board is to vote the proxies of the companies in which the Fund
holds investments consistent with the procedures that can be found by visiting columbiathreadneedleus.com/investor/. Information regarding how the Fund voted proxies relating to portfolio securities is filed with the SEC by August 31 for the
most recent 12-month period ending June 30 of that year, and is available without charge by visiting columbiathreadneedleus.com/investor/; or searching the website of the SEC at sec.gov.
Quarterly schedule of investments
The Fund files a complete schedule of portfolio holdings with the SEC for the first
and third quarters of each fiscal year on Form N-PORT. The Fund’s Form N-PORT filings are available on the SEC’s website at sec.gov. The Fund’s complete schedule of portfolio holdings, as filed on Form N-PORT, can also be obtained without charge,
upon request, by calling 800.937.5449.
Additional Fund information
For more information, go online to columbiathreadneedleus.com/investor/; or call Equiniti Trust Company, LLC, the Fund’s Stockholder Servicing and Transfer Agent, at 866.666.1532. Customer Service Representatives
are available to answer your questions Monday through Friday from 8 a.m. to 8 p.m. Eastern time.
Columbia Management Investment Advisers, LLC (the Investment Manager)
290 Congress Street
Boston, MA 02210
Equinity Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Fund at a Glance
(Unaudited)
Distributions Paid Per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The Fund paid this special 2023 fourth quarter distribution beyond its typical
quarterly managed distribution policy to stockholders of record on December 18, 2023.
The net asset value of the Fund’s shares may not always correspond to the market price of such shares. Common stock 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.
2
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Fund at a Glance (continued)
(Unaudited)
The tables below show the investment makeup of the Fund represented as a percentage
of Fund net assets as of June 30, 2024. Derivatives are excluded from the tables unless otherwise noted. The Fund’s portfolio composition is subject to change.
Information Technology Sub-industry Allocation
|
|
|
|
|
|
|
Semiconductor Materials & Equipment
|
|
Technology Hardware, Storage & Peripherals
|
|
|
|
|
|
|
|
Internet Services & Infrastructure
|
|
Electronic Equipment & Instruments
|
|
|
|
|
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
3
Fund Investment Objective, Strategies, Policies and Principal Risks
(Unaudited)
Fund Investment Objective
The Fund’s investment objective is to seek growth of capital and current income. The Fund’s investment objective is non-fundamental and may be changed by the Board without approval of the Fund’s stockholders.
Fund Investment Strategies and Policies
Under normal market conditions, the Fund invests at least 80% of its “Managed Assets” (as defined below) in a portfolio of equity securities of technology and technology-related companies that Columbia Management
Investment Advisers, LLC (the Investment Manager) believes offer attractive opportunities for capital appreciation.
Under normal market conditions, the Fund’s investment program consists primarily of (i) investing in a portfolio of equity securities of technology and technology-related companies that seeks to exceed the total return, before fees and expenses, of the
S&P North American Technology Sector Index and (ii) writing call options on the NASDAQ 100 Index®, an unmanaged index that includes the largest and most active non-financial domestic and international companies listed on the NASDAQ Stock
Market, or its exchange-traded fund equivalent (the NASDAQ 100) on a month-to-month basis, with an aggregate notional
amount typically ranging from 0%-90% of the underlying value of the Fund’s holdings of common stock (the Rules-based Option Strategy, as further described below). The Fund expects to generate current income from premiums received from writing call
options on the NASDAQ 100.
In determining the level (i.e., 0% to 90%) of call options to be written on the NASDAQ 100, the Investment Manager’s Rules-based Option Strategy is based on the CBOE NASDAQ-100 Volatility IndexSM (the VXN Index). The VXN Index measures the market’s expectation of 30-day volatility implicit in the prices of near-term NASDAQ 100 Index options. The VXN Index, which is quoted in percentage points (e.g., 19.36), is a leading barometer of investor
sentiment and market volatility relating to the NASDAQ 100 Index. In general, the Investment Manager intends to write more
call options when market volatility, as represented by the VXN Index, is high (and premiums received for writing the option
are high) and write fewer call options when market volatility, as represented by the VXN Index, is low (and premiums for
writing the option are low).
The Fund’s Rules-based Option Strategy with respect to writing call options is as follows:
|
|
Aggregate Notional Amount of
Written Call Options as a
Percentage of the Fund’s
Holdings in Common Stocks
|
|
|
|
Greater than 17, but less than 18
|
|
At least 18, but less than 33
|
|
At least 33, but less than 34
|
|
At least 34, but less than 55
|
|
|
|
|
In addition to the Rules-based Option Strategy, the Fund may write additional calls
with aggregate notional amounts of up to 25% of the value of the Fund’s holdings in common stock (to a maximum of 90% when aggregated with the call options written pursuant to the Rules-based Option Strategy) when the Investment Manager believes
call premiums are attractive relative to the risk of the price of the NASDAQ 100. The Fund may also close (or buy
back) a written call option if the Investment Manager believes that a substantial amount of the premium (typically, 70%
or more) to be received by the Fund has been captured before exercise, potentially reducing the call position to 0% of
total equity until additional calls are written. The Fund may also buy or write other call and put options on securities, indices,
ETFs and market baskets of securities to generate additional income or return or to provide the portfolio with downside protection.
The Fund’s investment policy of investing at least 80% of its Managed Assets in equity securities of technology and technology-related companies and its policy with respect to the use of the Rules-based
Option Strategy on a month-to-month basis may be changed by the Board without stockholder approval only following the provision of 60 days’ prior written notice to stockholders.
4
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
The Fund is a non-diversified fund. A non-diversified fund is permitted to invest
a greater percentage of its total assets in fewer issuers than a diversified fund. This policy may not be changed without a stockholder
vote.
The Fund has a fundamental policy of investing at least 25% of its total assets in
securities principally engaged in technology and technology-related stocks. This policy may not be changed without a stockholder
vote.
The Fund may also invest: up to 15% of its Managed Assets in illiquid securities (i.e.,
securities that at the time of purchase are not readily marketable); up to 20% of its Managed Assets in debt securities (including
convertible and non-convertible debt securities), such as debt securities issued by technology and technology-related
companies and obligations of the U.S. Government, its agencies and instrumentalities, and government-sponsored enterprises,
as well as below-investment grade securities (i.e., high-yield or junk bonds); and up to 25% of its Managed Assets
in equity securities of companies organized outside of the United States. The Fund may hold foreign securities of issuers
located or doing substantial business in emerging markets. Each of these policies may be changed by the Board without stockholder
approval.
The Fund has other fundamental policies that may not be changed without a stockholder
vote. Under these policies, the Fund may not:
• Purchase or sell commodities or commodity contracts, except to the extent permissible under applicable law and interpretations, as they may be amended from time to time, and except this shall not
prevent the Fund from buying or selling options, futures contracts and foreign currency or from entering into forward currency
contracts or from investing in securities or other instruments backed by, or whose value is derived from, physical commodities;
• Issue senior securities or borrow money, except as permitted by the Investment Company Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be
granted by the SEC;
• Make loans, except as permitted by the Investment Company Act or any rule thereunder, any SEC or SEC staff interpretations thereof or any exemptions therefrom which may be granted by the SEC;
• Underwrite the securities of other issuers, except insofar as the Fund may be deemed an underwriter under the Securities Act of 1933 in disposing of a portfolio security or in connection with investments
in other investment companies;
• Buy or sell real estate, unless acquired as a result of ownership of securities or other instruments, except this shall not prevent the Fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business or real estate investment trusts; and
• Invest 25% or more of its Managed Assets (as defined below), at market value, in the securities of issuers in any particular industry, except that the Fund will invest at least 25% of the value of its Managed
Assets in technology and technology-related stocks (in which the Fund intends to concentrate) and may invest without limit in
securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities, or government-sponsored enterprises, as described in the Fund’s prospectus, which may be amended from time to time.
“Managed Assets” means the net asset value of the Fund’s outstanding common shares plus any liquidation preference of any issued and outstanding Fund preferred stock ("Preferred Shares") and the principal
amount of any borrowings used for leverage.
Certain of the Fund’s fundamental policies set forth above prohibit transactions “except as permitted by the Investment Company Act or any rule thereunder, any SEC or SEC staff interpretations thereof or
any exemptions therefrom which may be granted by the SEC.” The reference to the Investment Company Act, means the Investment Company Act of 1940, as amended, and the reference to the SEC means the Securities and Exchange Commission.
The following discussion summarizes the flexibility that the Fund currently gains from these exceptions. To
the extent the 1940 Act or the rules and regulations thereunder may, in the future, be amended to provide greater flexibility,
or to the extent the SEC may in the future grant exemptive relief providing greater flexibility, the Fund will be able to use
that flexibility without seeking shareholder approval of its fundamental policies.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
5
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
Issuing senior securities — A “senior security” is an obligation with respect to the earnings or assets of a company that takes precedence over the claims of that company’s common stock with respect to the same earnings or assets. The Investment Company Act limits the ability of a closed-end fund to issue senior securities,
but SEC staff interpretations allow a fund to engage in certain types of transactions that otherwise might raise senior
security concerns (such as short sales, buying and selling financial futures contracts and selling put and call options),
provided that the Fund maintains segregated deposits or portfolio securities, or otherwise covers the transaction with offsetting
portfolio securities, in amounts sufficient to offset any liability associated with the transaction. The exception in the fundamental
policy allows the Fund to operate in reliance upon these staff interpretations.
Borrowing money — The Investment Company Act permits the Fund to borrow up to 33 1/3% of its Managed Assets, plus an additional 5% of its Managed Assets for temporary purposes.
Making loans — The Investment Company Act generally prohibits the Fund from making loans to affiliated persons but does not otherwise restrict the Fund’s ability to make loans.
Under the Investment Company Act, the Fund’s fundamental policies may not be changed without the approval of the holders of a “majority of the outstanding” common shares and, if issued, preferred stock voting together as a single class, and of the holders of a “majority of the outstanding” preferred stock voting as a separate class. When used with respect to particular shares of the Fund, a “majority of the outstanding” shares means the lesser of: (i) 67% or more of the shares present at a stockholder meeting, if the holders of more than 50% of the outstanding shares are
present at the meeting or represented by proxy, or (ii) more than 50% of the outstanding shares of the Fund.
An investment in the Fund involves risks. In particular, investors should consider
Market Risk, Information Technology Sector Risk, and Derivatives Risk. Descriptions of these and other principal risks of investing
in the Fund are provided below. There is no assurance that the Fund will achieve its investment objective and you may lose money. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price may go down. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. The significance of any specific risk to an investment in the Fund will vary over time depending on the composition of the Fund’s portfolio, market conditions, and other factors. You should read all of the risk information
below carefully, because any one or more of these risks may result in losses to the Fund. See also the Fund’s "Significant Risks" in the Notes to Financial Statements section.
Active Management Risk. The Fund is actively managed and its performance therefore will reflect, in part,
the ability of the portfolio managers to make investment decisions that seek to achieve the Fund’s investment objective. Due to its active management, the Fund could underperform its benchmark index and/or other funds with
similar investment objectives and/or strategies.
Convertible Securities Risk. Convertible securities are subject to the usual risks associated with debt instruments,
such as interest rate risk (the risk of losses attributable to changes in interest rates)
and credit risk (the risk that the issuer of a debt instrument will default or otherwise become unable, or be perceived to be unable or
unwilling, to honor a financial obligation, such as making payments to the Fund when due). Convertible securities also react to
changes in the value of the common stock into which they convert, and are thus subject to market risk (the risk that
the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or
fail to rise). Because the value of a convertible security can be influenced by both interest rates and the common stock’s market movements, a convertible security generally is not as sensitive to interest rates as a similar debt instrument,
and generally will not vary in value in response to other factors to the same extent as the underlying common stock. In the
event of a liquidation of the issuing company, holders of convertible securities would typically be paid before the company’s common stockholders but after holders of any senior debt obligations of the company. The Fund may be forced to convert
a convertible security before it otherwise would choose to do so, which may decrease the Fund’s return.
6
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
Counterparty Risk. The risk exists that a counterparty to a transaction in a financial instrument held
by the Fund or by a special purpose or structured vehicle in which the Fund invests may become insolvent
or otherwise fail to perform its obligations, including making payments to the Fund, due to financial difficulties.
The Fund may obtain no or limited recovery in a bankruptcy or other reorganizational proceedings, and any recovery may be significantly
delayed. Transactions that the Fund enters into may involve counterparties in the financial services sector and, as a
result, events affecting the financial services sector may cause the Fund’s NAV to fluctuate.
Derivatives Risk. Derivatives may involve significant risks. Derivatives are financial instruments,
traded on an exchange or in the over-the-counter (OTC) markets, with a value in relation to, or derived from,
the value of an underlying asset(s) (such as a security, commodity or currency) or other reference, such as an index, rate or other
economic indicator (each an underlying reference). Derivatives may include those that are privately placed or otherwise exempt
from SEC registration, including certain Rule 144A eligible securities. Derivatives could result in Fund losses if
the underlying reference does not perform as anticipated. Use of derivatives is a highly specialized activity that can involve
investment techniques, risks, and tax planning different from those associated with more traditional investment instruments. The Fund’s derivatives strategy may not be successful and use of certain derivatives could result in substantial, potentially
unlimited, losses to the Fund regardless of the Fund’s actual investment. A relatively small movement in the price, rate or other economic indicator associated with the underlying reference may result in substantial losses for the Fund. Derivatives may
be more volatile than other types of investments. Derivatives can increase the Fund’s risk exposure to underlying references and their attendant risks, including the risk of an adverse credit event associated with the underlying reference (credit
risk), the risk of an adverse movement in the value, price or rate of the underlying reference (market risk), the risk of an
adverse movement in the value of underlying currencies (foreign currency risk) and the risk of an adverse movement in underlying
interest rates (interest rate risk). Derivatives may expose the Fund to additional risks, including the risk of loss due
to a derivative position that is imperfectly correlated with the underlying reference it is intended to hedge or replicate (correlation
risk), the risk that a counterparty will fail to perform as agreed (counterparty risk), the risk that a hedging strategy may
fail to mitigate losses, and may offset gains (hedging risk), the risk that the return on an investment may not keep pace with inflation
(inflation risk), the risk that losses may be greater than the amount invested (leverage risk), the risk that the Fund may
be unable to sell an investment at an advantageous time or price (liquidity risk), the risk that the investment may be difficult
to value (pricing risk), and the risk that the price or value of the investment fluctuates significantly over short periods of
time (volatility risk). The value of derivatives may be influenced by a variety of factors, including national and international political
and economic developments. Potential changes to the regulation of the derivatives markets may make derivatives more costly,
may limit the market for derivatives, or may otherwise adversely affect the value or performance of derivatives.
Derivatives Risk – Options Risk. Options are derivatives that give the purchaser the option to buy (call) or sell
(put) an underlying reference from or to a counterparty at a specified price (the strike price)
on or before an expiration date. The Fund may purchase or write (i.e., sell) put and call options on an underlying reference
it is otherwise permitted to invest in. When writing options, the Fund is exposed to the risk that it may be required to buy or
sell the underlying reference at a disadvantageous price on or before the expiration date. If the Fund sells a put option,
the Fund may be required to buy the underlying reference at a strike price that is above market price, resulting in a
loss. If the Fund sells a call option, the Fund may be required to sell the underlying reference at a strike price that is below market
price, resulting in a loss. If the Fund sells a call option that is not covered (it does not own the underlying reference), the Fund’s losses are potentially unlimited. Options may involve economic leverage, which could result in greater volatility in
price movement. Options may be traded on a securities exchange or in the over-the-counter market. At or prior to maturity of
an options contract, the Fund may enter into an offsetting contract and may incur a loss to the extent there has been adverse movement
in options prices. Options can increase the Fund’s risk exposure to underlying references and their attendant risks such as credit risk, market risk, foreign currency risk and interest rate risk, while also exposing the Fund to correlation
risk, counterparty risk, hedging risk, inflation risk, leverage risk, liquidity risk, pricing risk and volatility risk.
Foreign Securities Risk. Investments in or exposure to securities of foreign companies may involve heightened
risks relative to investments in or exposure to securities of U.S. companies. For example, foreign
markets can be extremely volatile. Foreign securities may also be less liquid, making them more difficult to trade, than
securities of U.S. companies so that the Fund may, at times, be unable to sell foreign securities at desirable times or prices.
Brokerage commissions, custodial costs and other fees are also generally higher for foreign securities. The Fund may have
limited or no legal recourse in the event of
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
7
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
default with respect to certain foreign securities, including those issued by foreign
governments. In addition, foreign governments may impose withholding or other taxes on the Fund’s income, capital gains or proceeds from the disposition of foreign securities, which could reduce the Fund’s return on such securities. In some cases, such withholding or other taxes could potentially be confiscatory. Other risks include: possible delays in the settlement
of transactions or in the payment of income; generally less publicly available information about foreign companies; the
impact of economic, political, social, diplomatic or other conditions or events (including, for example, military confrontations
and actions, war, other conflicts, terrorism and disease/virus outbreaks and epidemics), possible seizure, expropriation
or nationalization of a company or its assets or the assets of a particular investor or category of investors; accounting,
auditing and financial reporting standards that may be less comprehensive and stringent than those applicable to domestic companies;
the imposition of economic and other sanctions against a particular foreign country, its nationals or industries
or businesses within the country; and the generally less stringent standard of care to which local agents may be held in the
local markets. In addition, it may be difficult to obtain reliable information about the securities and business operations of certain
foreign issuers. Governments or trade groups may compel local agents to hold securities in designated depositories that
are not subject to independent evaluation. The less developed a country’s securities market is, the greater the level of risks. Economic sanctions may be, and have been, imposed against certain countries, organizations, companies, entities and/or
individuals. Economic sanctions and other similar governmental actions could, among other things, effectively restrict or eliminate the Fund’s ability to purchase or sell securities, and thus may make the Fund’s investments in such securities less liquid or more difficult to value. In addition, as a result of economic sanctions, the Fund may be forced to sell or otherwise dispose
of investments at inopportune times or prices, which could result in losses to the Fund and increased transaction costs.
These conditions may be in place for a substantial period of time and enacted with limited advance notice to the Fund. The
risks posed by sanctions against a particular foreign country, its nationals or industries or businesses within the country
may be heightened to the extent the Fund invests significantly in the affected country or region or in issuers from the
affected country that depend on global markets. Additionally, investments in certain countries may subject the Fund to a
number of tax rules, the application of which may be uncertain. Countries may amend or revise their existing tax laws, regulations
and/or procedures in the future, possibly with retroactive effect. Changes in or uncertainties regarding the laws,
regulations or procedures of a country could reduce the after-tax profits of the Fund, directly or indirectly, including by reducing
the after-tax profits of companies located in such countries in which the Fund invests, or result in unexpected tax liabilities
for the Fund. The performance of the Fund may also be negatively affected by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly to the extent the Fund invests a significant percentage of its assets
in foreign securities or other assets denominated in currencies other than the U.S. dollar. Currency rates in foreign countries
may fluctuate significantly over short or long periods of time for a number of reasons, including changes in interest rates,
imposition of currency exchange controls and economic or political developments in the U.S. or abroad. The Fund may also incur
currency conversion costs when converting foreign currencies into U.S. dollars and vice versa.
Issuer Risk. An issuer in which the Fund invests or to which it has exposure may perform poorly
or below expectations and the value of its securities may therefore decline, which may negatively affect the Fund’s performance. Underperformance of an issuer may be caused by poor management decisions, competitive pressures, breakthroughs
in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures,
natural disasters, military confrontations and actions, war, other conflicts, terrorism, disease/virus outbreaks,
epidemics or other events, conditions and factors which may impair the value of your investment in the Fund and could result
in a greater premium or discount between the market price and the NAV of the Fund’s shares and wider bid/ask spreads than those experienced by other closed-end funds.
Small- and Mid-Cap Stock Risk. Securities of small- and mid-cap companies can, in certain circumstances, have a
higher potential for gains than securities of larger companies but are more likely to have
more risk than larger companies. For example, small- and mid-cap companies may be more vulnerable to market downturns and
adverse business or economic events than larger companies because they may have more limited financial resources
and business operations. Small- and mid-cap companies are also more likely than larger companies to have more limited
product lines and operating histories and to depend on smaller and generally less experienced management teams. Securities of
small- and mid-cap companies may trade less frequently and in smaller volumes and may be less liquid and fluctuate
more sharply in value than securities of larger companies. When the Fund takes significant positions in small- and mid-cap
companies with limited trading volumes,
8
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
the liquidation of those positions, particularly in a distressed market, could be
prolonged and result in Fund investment losses that would affect the value of your investment in the Fund. In addition, some
small- and mid-cap companies may not be widely followed by the investment community, which can lower the demand for their
stocks.
Large-Cap Stock Risk. Investments in larger, more established companies (larger companies), may involve
certain risks associated with their larger size. For instance, larger companies may be less able
to respond quickly to new competitive challenges, such as changes in consumer tastes or innovation from smaller competitors.
Also, larger companies are sometimes less able to achieve as high growth rates as successful smaller companies,
especially during extended periods of economic expansion.
Market Risk. The Fund may incur losses due to declines in the value of one or more securities in
which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among
other things, political, regulatory, market, economic or social developments affecting the relevant market(s) more generally. In
addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively
affect many issuers, which could adversely affect the Fund’s ability to price or value hard-to-value assets in thinly traded and closed markets and could cause operational challenges. Global economies and financial markets are increasingly interconnected,
and conditions and events in one country, region or financial market may adversely impact issuers in a different country,
region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global
supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional
or global events such as terrorism, war, other conflicts, natural disasters, disease/virus outbreaks and epidemics or
other public health issues, recessions, depressions or other events – or the potential for such events – could have a significant negative impact on global economic and market conditions and could result in a greater premium or discount between
the market price and the NAV of the Fund’s shares and wider bid/ask spreads than those experienced by other closed-end funds.
Non-Diversified Fund Risk. The Fund is non-diversified, which generally means that it may invest a greater percentage
of its total assets in the securities of fewer issuers than a “diversified” fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of the Fund more
than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of a more diversified fund.
Rule 144A and Other Exempted Securities Risk. The Fund may invest in privately placed and other securities or instruments exempt from SEC registration (collectively “private placements”), subject to certain regulatory restrictions. In the U.S. market, private placements are typically sold only to qualified institutional buyers, or qualified
purchasers, as applicable. An insufficient number of buyers interested in purchasing private placements at a particular
time could adversely affect the marketability of such investments and the Fund might be unable to dispose of them
promptly or at reasonable prices, subjecting the Fund to liquidity risk (the risk that it may not be possible for the
Fund to liquidate the instrument at an advantageous time or price). The Fund’s holdings of private placements may increase the level of Fund illiquidity if eligible buyers are unable or unwilling to purchase them at a particular time. The Fund may
also have to bear the expense of registering the securities for resale and the risk of substantial delays in effecting
the registration. Additionally, the purchase price and subsequent valuation of private placements typically reflect a discount,
which may be significant, from the market price of comparable securities for which a more liquid market exists. Issuers of Rule
144A eligible securities are required to furnish information to potential investors upon request. However, the required disclosure
is much less extensive than that required of public companies and is not publicly available since the offering information
is not filed with the SEC. Further, issuers of Rule 144A eligible securities can require recipients of the offering information
(such as the Fund) to agree contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security.
Sector Risk. At times, the Fund may have a significant portion of its assets invested in securities
of companies conducting business in a related group of industries within one or more economic sectors, including
the information technology sector. Companies in the same sector may be similarly affected by economic, regulatory, political
or market events or conditions, which may make the Fund vulnerable to unfavorable developments in that group of industries
or economic sector.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
9
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
Information Technology Sector. The Fund may be vulnerable to the particular risks that may affect companies in the
information technology sector. Companies in the information technology sector are
subject to certain risks, including the risk that new services, equipment or technologies will not be accepted by consumers and
businesses or will become rapidly obsolete. Performance of such companies may be affected by factors including obtaining
and protecting patents (or the failure to do so) and significant competitive pressures, including aggressive pricing
of their products or services, new market entrants, competition for market share and short product cycles due to an accelerated
rate of technological developments. Such competitive pressures may lead to limited earnings and/or falling profit margins.
As a result, the value of their securities may fall or fail to rise. In addition, many information technology sector
companies have limited operating histories and prices of these companies’ securities historically have been more volatile than other securities, especially over the short term. Some companies in the information technology sector are facing increased government
and regulatory scrutiny and may be subject to adverse government or regulatory action, which could negatively impact
the value of their securities.
Semiconductor and Semiconductor Equipment Industry Risk. The Fund’s investment in the semiconductors and semiconductor equipment industry subjects the Fund to the risks of investments in the industry,
including: intense competition, both domestically and internationally, including competition from subsidized foreign competitors
with lower production costs; wide fluctuations in securities prices due to risks of rapid obsolescence of products and
related technology; economic performance of the customers of semiconductor and related companies; their research
costs and the risks that their products may not prove commercially successful; and thin capitalization and limited
product lines, markets, financial resources or quality management and personnel. Semiconductor design and process methodologies
are subject to rapid technological change requiring large expenditures, potentially requiring financing
that may be difficult or impossible to obtain, for research and development in order to improve product performance and increase
manufacturing yields. These companies rely on a combination of patents, trade secret laws and contractual provisions to
protect their technologies. The process of seeking patent protection can be long and expensive. The industry is characterized
by frequent litigation regarding patent and other intellectual property rights, which may require such companies to defend against competitors’ assertions of intellectual property infringement or misappropriation. Some companies are also engaged in other
lines of business unrelated to the semiconductor business, and these companies may experience problems with these lines
of business that could adversely affect their operating results. The international operations of many companies expose
them to the risks associated with instability and changes in economic and political conditions, foreign currency fluctuations,
changes in foreign regulations, tariffs, and trade disputes. Business conditions in this industry can change rapidly
from periods of strong demand to periods of weak demand. Any future downturn in the industry could harm the business and operating
results of these companies. The stock prices of companies in the industry have been and will likely continue to be
volatile relative to the overall market.
Transactions in Derivatives. The Fund may enter into derivative transactions or otherwise have exposure to derivative
transactions through underlying investments. Derivatives are financial contracts whose
values are, for example, based on (or “derived” from) traditional securities (such as a stock or bond), assets (such as a commodity like gold or a foreign currency), reference rates (such as the Secured Overnight Financing Rate (commonly known as SOFR))
or market indices (such as the Standard & Poor’s 500® Index). The use of derivatives is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary portfolio securities transactions.
Derivatives involve special risks and may result in losses or may limit the Fund’s potential gain from favorable market movements. Derivative strategies often involve leverage, which may exaggerate a loss, potentially causing the Fund to lose
more money than it would have lost had it invested in the underlying security or other asset directly. The values of derivatives
may move in unexpected ways, especially in unusual market conditions, and may result in increased volatility in the value of the derivative and/or the Fund’s shares, among other consequences. The use of derivatives may also increase the amount of taxes
payable by shareholders holding shares in a taxable account. Other risks arise from the Fund’s potential inability to terminate or to sell derivative positions. A liquid secondary market may not always exist for the Fund’s derivative positions at times when the Fund might wish to terminate or to sell such positions. Over-the-counter instruments (investments not
traded on an exchange) may be illiquid, and transactions in derivatives traded in the over-the-counter market are subject
to the risk that the other party will not meet its obligations. The use of derivatives also involves the risks of mispricing or improper
valuation and that changes in the value of the derivative may not correlate perfectly with the underlying security,
asset, reference rate or index. The Fund also may not be able to find a suitable derivative transaction counterparty, and thus may
be unable to engage in derivative transactions when it is deemed favorable to do so, or at all. U.S. federal legislation
has been enacted that provides for new
10
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Fund Investment Objective, Strategies, Policies and Principal Risks (continued)
(Unaudited)
clearing, margin, reporting and registration requirements for participants in the
derivatives market. These changes could restrict and/or impose significant costs or other burdens upon the Fund’s participation in derivatives transactions. The U.S. government and the European Union (and some other jurisdictions) have enacted regulations
and similar requirements that prescribe clearing, margin, reporting and registration requirements for participants
in the derivatives market. These requirements are evolving and their ultimate impact on the Fund remains unclear, but
such impact could include restricting and/or imposing significant costs or other burdens upon the Fund’s participation in derivatives transactions. Additionally, in August 2022, regulations governing the use of derivatives by registered investment
companies, such as the Fund, became effective. Rule 18f-4 under the 1940 Act, among other things, requires a fund that
invests in derivative instruments beyond a specified limited amount to apply a value-at-risk-based limit to its portfolio and
establish a comprehensive derivatives risk management program. As of the date of this report, the Fund is required to maintain
a comprehensive derivatives risk management program, which could have an adverse impact on the Fund’s performance and ability to implement its investment strategies as it has historically.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
11
Fees and Expenses and Share Price Data
(Unaudited)
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund’s Common Shares. You may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples below.
Stockholder Transaction Expenses
|
|
|
|
Annual Expenses (as a percentage of net assets attributable to common shares)
|
|
|
|
|
|
|
Acquired fund fees and expenses
|
|
|
|
|
(a)
There are no service or brokerage charges to participants in the dividend investment
plan; however, the Fund reserves the right to amend the plan to include a service
charge payable to the Fund by the participants. The Fund reserves the right to amend the
plan to provide for payment of brokerage fees by the plan participants in the event
the plan is changed to provide for open market purchases of Fund Common Stock on behalf of plan
participants.
(b)
The Fund’s management fee is 1.06% of the Fund’s average daily Managed Assets (which means the net asset value of Fund’s outstanding common stock plus the liquidation preference of any issued and outstanding preferred stock of the Fund and the principal
amount of any borrowing used for leverage). The management fee rate noted in the table
reflects the rate paid by Common Stockholders as a percentage of the Fund’s net assets attributable to Common Stock.
(c)
“Total Annual Expenses" include acquired fund fees and expenses (expenses the Fund incurs indirectly through its investments in other investment companies) and may be higher than “Total gross expenses” shown in the Financial Highlights section of this report because “Total gross expenses” does not include acquired fund fees and expenses.
The following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example illustrates the hypothetical expenses that you would incur over
the time periods indicated, and assumes that:
• you invest $1,000 in the Fund for the periods indicated,
• your investment has a 5% return each year, and
• the Fund’s total annual operating expenses remain the same as shown in the Annual Fund Operating Expenses table above.
Although your actual costs may be higher or lower, based on the assumptions listed
above, your costs would be:
|
|
|
|
|
|
Columbia Seligman Premium Technology Growth Fund, Inc. Common Stock
|
|
|
|
|
The purpose of the tables above is to assist you in understanding the various costs
and expenses you will bear directly or indirectly.
The Fund’s Common Stock is traded primarily on the New York Stock Exchange (the Exchange). The following table shows the high and low closing prices of the Fund’s Common Stock on the Exchange for each calendar quarter since the beginning of 2022, as well as the net asset values and the range of the percentage (discounts)/premiums
to net asset value per share that correspond to such prices.
12
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Fees and Expenses and Share Price Data (continued)
(Unaudited)
|
|
|
|
Corresponding (Discount)/Premium to NAV (%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Fund’s Common Stock has historically fluctuated between trading on the market at a discount to net asset value and at a premium to net asset value. The closing market price, net asset value and percentage
(discount)/premium to net asset value per share of the Fund’s Common Stock on June 30, 2024 were $33.29, $32.61, and 2.09%, respectively.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
13
Portfolio of Investments
June 30, 2024 (Unaudited)
(Percentages represent value of investments compared to net assets)
Investments in securities
|
|
|
|
|
|
Communication Services 13.1%
|
|
|
|
|
|
|
Interactive Media & Services 9.9%
|
Alphabet, Inc., Class A(a)
|
|
|
|
|
|
|
|
|
|
|
Meta Platforms, Inc., Class A
|
|
|
Pinterest, Inc., Class A(b)
|
|
|
|
|
|
|
|
|
|
Movies & Entertainment 1.0%
|
|
|
|
|
Wireless Telecommunication Services 0.9%
|
|
|
|
|
Total Communication Services
|
|
Consumer Discretionary 5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DoorDash, Inc., Class A(b)
|
|
|
Total Consumer Discretionary
|
|
|
|
Transaction & Payment Processing Services 6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Shift4 Payments, Inc., Class A(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Care Technology 0.0%
|
|
|
|
|
|
|
|
Common Stocks (continued)
|
|
|
|
|
|
|
Heavy Electrical Equipment 2.4%
|
Bloom Energy Corp., Class A(b)
|
|
|
Passenger Ground Transportation 0.5%
|
|
|
|
|
|
|
|
Information Technology 66.6%
|
Application Software 6.1%
|
|
|
|
|
Dropbox, Inc., Class A(b)
|
|
|
|
|
|
|
RingCentral, Inc., Class A(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications Equipment 3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Lumentum Holdings, Inc.(b)
|
|
|
|
|
|
Electronic Equipment & Instruments 1.4%
|
Advanced Energy Industries, Inc.
|
|
|
Internet Services & Infrastructure 2.9%
|
GoDaddy, Inc., Class A(b)
|
|
|
IT Consulting & Other Services 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
Semiconductor Materials & Equipment 11.3%
|
Applied Materials, Inc.(a)
|
|
|
Kulicke & Soffa Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes to Financial Statements are an integral part of this statement.
14
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Portfolio of Investments (continued)
June 30, 2024 (Unaudited)
Common Stocks (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ON Semiconductor Corp.(b)
|
|
|
|
|
|
|
Renesas Electronics Corp.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Palo Alto Networks, Inc.(b)
|
|
|
Tenable Holdings, Inc.(b)
|
|
|
|
|
|
Technology Hardware, Storage & Peripherals 8.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Information Technology
|
|
Common Stocks (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stocks
(Cost: $272,753,494)
|
|
|
|
|
|
|
|
|
|
Columbia Short-Term Cash Fund, 5.547%(c),(d)
|
|
|
Total Money Market Funds
(Cost: $22,189,805)
|
|
Total Investments in Securities
(Cost $294,943,299)
|
|
Other Assets & Liabilities, Net
|
|
|
|
|
|
At June 30, 2024, securities and/or cash totaling $144,761,635 were pledged as collateral.
Investments in derivatives
Call option contracts written
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Portfolio of Investments
|
|
This security or a portion of this security has been pledged as collateral in connection
with derivative contracts.
|
|
|
Non-income producing investment.
|
|
|
The rate shown is the seven-day current annualized yield at June 30, 2024.
|
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
15
Portfolio of Investments (continued)
June 30, 2024 (Unaudited)
Notes to Portfolio of Investments (continued)
|
|
As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. The value of
the holdings and transactions in these affiliated companies during the period ended
June 30, 2024 are as follows:
|
|
|
|
|
|
Net change in
unrealized
appreciation
(depreciation)($)
|
|
|
|
|
Columbia Short-Term Cash Fund, 5.547%
|
|
|
|
|
|
|
|
|
|
|
The Fund categorizes its fair value measurements according to a three-level hierarchy
that maximizes the use of observable inputs and minimizes the use of unobservable
inputs by prioritizing that the most observable input be used when available. Observable inputs
are those that market participants would use in pricing an investment based on market
data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset’s or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity
associated with investments at that level. For example, certain U.S. government securities
are generally high quality and liquid, however, they are reflected as Level 2 because
the inputs used to determine fair value may not always be quoted prices in an active
market.
Fair value inputs are summarized in the three broad levels listed below:
■
Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments.
■
Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
■
Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price
information, credit data, volatility statistics, and other factors. These inputs can
be either observable or unobservable. The availability of observable inputs can vary between investments,
and is affected by various factors such as the type of investment, and the volume
and level of activity for that investment or similar investments in the marketplace. The inputs will be
considered by the Investment Manager, along with any other relevant factors in the
calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition
could cause an investment to be reclassified between the various levels within the
hierarchy.
Foreign equity securities actively traded in markets where there is a significant
delay in the local close relative to the New York Stock Exchange are classified as
Level 2. The values of these securities may include an adjustment to reflect the impact of market movements following the close of local trading, as described in Note 2 to the financial statements – Security valuation.
Investments falling into the Level 3 category are primarily supported by quoted prices
from brokers and dealers participating in the market for those investments. However,
these may be classified as Level 3 investments due to lack of market transparency and corroboration
to support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models may rely
on one or more significant unobservable inputs and/or significant assumptions by the
Investment Manager. Inputs used in valuations may include, but are not limited to, financial
statement analysis, capital account balances, discount rates and estimated cash flows,
and comparable company data.
The Fund’s Board of Directors (the Board) has designated the Investment Manager, through its Valuation Committee (the Committee), as valuation designee, responsible for determining the fair value of the assets of the Fund for which market quotations are
not readily available using valuation procedures approved by the Board. The Committee
consists of voting and non-voting members from various groups within the Investment Manager’s organization, including operations and accounting, trading and investments, compliance, risk management and legal.
The Committee meets at least monthly to review and approve valuation matters, which
may include a description of specific valuation determinations, data regarding pricing
information received from approved pricing vendors and brokers and the results of Board-approved
valuation policies and procedures (the Policies). The Policies address, among other
things, instances when market quotations are or are not readily available, including recommendations
of third party pricing vendors and a determination of appropriate pricing methodologies;
events that require specific valuation determinations and assessment of fair value
techniques; securities with a potential for stale pricing, including those that are illiquid,
restricted, or in default; and the effectiveness of third party pricing vendors, including periodic
reviews of vendors. The Committee meets more frequently, as needed, to discuss additional
valuation matters, which may include the need to review back-testing results, review time-sensitive
information or approve related valuation actions. Representatives of Columbia Management
Investment Advisers, LLC report to the Board at each of its regularly scheduled meetings
to discuss valuation matters and actions during the period, similar to those described
earlier.
The accompanying Notes to Financial Statements are an integral part of this statement.
16
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Portfolio of Investments (continued)
June 30, 2024 (Unaudited)
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at June 30, 2024:
|
|
|
|
|
|
Investments in Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in Securities
|
|
|
|
|
Investments in Derivatives
|
|
|
|
|
|
|
|
|
|
|
Call Option Contracts Written
|
|
|
|
|
|
|
|
|
|
|
See the Portfolio of Investments for all investment classifications not indicated
in the table.
The Fund’s assets assigned to the Level 2 input category are generally valued using the market approach, in which a security’s value is determined through reference to prices and information from market transactions for similar or identical assets. These assets
include certain foreign securities for which a third party statistical pricing service
may be employed for purposes of fair market valuation. The model utilized by such third party statistical pricing service takes into account a security’s correlation to available market data including, but not limited to, intraday index, ADR, and exchange-traded fund movements.
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
17
Statement of Assets and Liabilities
June 30, 2024 (Unaudited)
|
|
|
Investments in securities, at value
|
|
Unaffiliated issuers (cost $272,753,494)
|
|
Affiliated issuers (cost $22,189,805)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option contracts written, at value (premiums received $532,771)
|
|
|
|
|
|
|
|
|
|
|
Stockholder servicing and transfer agent fees
|
|
Compensation of chief compliance officer
|
|
Compensation of board members
|
|
|
|
|
Deferred compensation of board members
|
|
|
|
|
Net assets applicable to outstanding Common Stock
|
|
|
|
|
|
|
|
Total distributable earnings (loss)
|
|
Total - representing net assets applicable to outstanding Common Stock
|
|
Shares outstanding applicable to Common Stock
|
|
Net asset value per share of outstanding Common Stock
|
|
Market price per share of Common Stock
|
|
The accompanying Notes to Financial Statements are an integral part of this statement.
18
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Statement of Operations
Six Months Ended June 30, 2024 (Unaudited)
|
|
|
|
|
|
Dividends — unaffiliated issuers
|
|
Dividends — affiliated issuers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder servicing and transfer agent fees
|
|
|
|
|
Printing and postage fees
|
|
Stockholders’ meeting fees
|
|
|
|
|
|
|
|
Compensation of chief compliance officer
|
|
Compensation of board members
|
|
Deferred compensation of board members
|
|
|
|
|
|
|
|
|
|
|
Realized and unrealized gain (loss) — net
|
|
Net realized gain (loss) on:
|
|
Investments — unaffiliated issuers
|
|
Investments — affiliated issuers
|
|
Foreign currency translations
|
|
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on:
|
|
Investments — unaffiliated issuers
|
|
Investments — affiliated issuers
|
|
Foreign currency translations
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
Net realized and unrealized gain
|
|
Net increase in net assets resulting from operations
|
|
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
19
Statement of Changes in Net Assets
|
|
Six Months Ended
June 30, 2024
(Unaudited)
|
Year Ended
December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
|
Net increase in net assets resulting from operations
|
|
|
Distributions to stockholders
|
|
|
Net investment income and net realized gains
|
|
|
Total distributions to stockholders
|
|
|
Increase in net assets from capital stock activity
|
|
|
Total increase in net assets
|
|
|
Net assets at beginning of period
|
|
|
Net assets at end of period
|
|
|
|
|
|
|
|
|
June 30, 2024 (Unaudited)
|
|
|
|
|
|
|
|
|
|
Common Stock issued at market price in distributions
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes to Financial Statements are an integral part of this statement.
20
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
21
The Fund’s financial highlights are presented below. Per share operating performance data is designed to allow investors to trace the operating performance, on a per Common Stock share basis, from the beginning
net asset value to the ending net asset value, so that investors can understand what effect the individual items have
on their investment, assuming it was held throughout the period. Generally, the per share amounts are derived by converting
the actual dollar amounts incurred for each item, as disclosed in the financial statements, to their equivalent per Common
Stock share amounts, using average Common Stock shares outstanding during the period.
Total return measures the Fund’s performance assuming that investors purchased Fund shares at market price or net asset value as of the beginning of the period, reinvested all their distributions, and then
sold their shares at the closing market price or net asset value on the last day of the period. The computations do not reflect
taxes or any sales commissions investors may incur on distributions or on the sale of Fund shares. Total returns
and portfolio turnover are not annualized for periods of less than one year. The ratios of expenses and net investment income are
annualized for periods of less than one year. The portfolio turnover rate is calculated without regard to purchase and sales
transactions of short-term instruments and certain derivatives, if any. If such transactions were included, a Fund’s portfolio turnover rate may be higher.
|
|
Six Months Ended
June 30, 2024
(Unaudited)
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
|
|
|
Income from investment operations:
|
Net investment income (loss)
|
|
|
|
|
Net realized and unrealized gain (loss)
|
|
|
|
|
Total from investment operations
|
|
|
|
|
Less distributions to Stockholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions to Stockholders
|
|
|
|
|
(Dilution) Anti-dilution in net asset value from share purchases (via dividend reinvestment
program)(a)
|
|
|
|
|
Anti-dilution in net asset value from share buy-backs (via stock repurchase program)(a)
|
|
|
|
|
Net asset value, end of period
|
|
|
|
|
Market price, end of period
|
|
|
|
|
|
|
Based upon net asset value
|
|
|
|
|
|
|
|
|
|
|
Ratios to average net assets
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
|
|
|
|
|
|
|
|
|
|
|
Notes to Financial Highlights
|
|
|
Prior to the period ended December 31, 2022, per share amounts were only presented if the net dilution/anti-dilution impact was material relative to the Fund’s average net assets for Common Stock.
|
|
|
|
|
|
In addition to the fees and expenses that the Fund bears directly, the Fund indirectly
bears a pro rata share of the fees and expenses of any other funds in which it invests.
Such indirect expenses are not included in the Fund’s reported expense ratios.
|
The accompanying Notes to Financial Statements are an integral part of this statement.
22
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Financial Highlights (continued)
The accompanying Notes to Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
23
Notes to Financial Statements
June 30, 2024 (Unaudited)
Note 1. Organization
Columbia Seligman Premium Technology Growth Fund, Inc. (the Fund) is a non-diversified
fund. The Fund is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a closed-end management
investment company.
The Fund was incorporated under the laws of the State of Maryland on September 3,
2009, and commenced investment operations on November 30, 2009. The Fund had no investment operations prior to November
30, 2009 other than those relating to organizational matters and the sale to Columbia Management Investment
Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial), of
5,250 shares of Common Stock at a cost of $100,275 on October 14, 2009. As of December 31, 2009, the Fund issued 14,300,000
shares of Common Stock, including 13,100,000 shares of Common Stock in its initial public offering and 1,200,000 shares
of Common Stock purchased by the Fund’s underwriters pursuant to an over-allotment option granted to the underwriters in connection with the initial public offering. On January 13, 2010, the Fund’s underwriters purchased an additional 545,000 shares of Common Stock pursuant to the over-allotment option, resulting in a total of 14,845,000 shares of Common
Stock issued by the Fund in its initial public offering, including shares purchased by the underwriters pursuant to the over-allotment
option. With the closing of this additional purchase of Common Stock, the Fund’s total raise-up in its initial public offering was an aggregate of $296.9 million. The Fund has one billion authorized shares of Common Stock. The issued
and outstanding Common Stock trades on the New York Stock Exchange under the symbol “STK”.
On June 26, 2024, the Fund filed a registration statement on Form N-2 (File No. 333-280485)
with the Securities and Exchange Commission (the SEC), relating to the offer and sale of up to 8,000,000 shares
of Fund common stock (Common Shares), from time to time, through ALPS Distributors, Inc., as agent for the Fund
(the Distributor), in transactions that are deemed to be “at the market” as defined in Rule 415 under the Securities Act of 1933, as amended. The Fund will compensate the Distributor with respect to sales of the Common Shares at a commission
rate of up to 1.0% of the gross proceeds of the sale of Common Shares. The Distributor may enter into sub-placement
agent agreements with one or more selected dealers for the offer and sale of Common Shares. As of August 28, 2024, this
registration statement is not yet effective and will only become effective if granted effectiveness by the SEC.
The Fund currently has outstanding Common Stock. Each outstanding share of Common
Stock entitles the holder thereof to one vote on all matters submitted to a vote of the Common Stockholders, including
the election of directors. Because the Fund has no other classes or series of stock outstanding, Common Stock possesses exclusive
voting power. All of the Fund’s shares of Common Stock have equal dividend, liquidation, voting and other rights. The Fund’s Common Stockholders have no preference, conversion, redemption, exchange, sinking fund, or appraisal rights
and have no preemptive rights to subscribe for any of the Fund’s securities.
Although the Fund has no current intention to do so, the Fund is authorized and reserves
the flexibility to use leverage to increase its investments or for other management activities through the issuance of
Preferred Stock and/or borrowings. The costs of issuing Preferred Stock and/or a borrowing program would be borne by Common
Stockholders and consequently would result in a reduction of net asset value of Common Stock.
Note 2. Summary of significant accounting policies
The Fund is an investment company that applies the accounting and reporting guidance
in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies (ASC 946). The financial statements are prepared in accordance with U.S. generally accepted accounting
principles (GAAP), which requires management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
24
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
Security valuation
Equity securities listed on an exchange are valued at the closing price or last trade
price on their primary exchange at the close of business of the New York Stock Exchange. Securities with a closing price
not readily available or not listed on any exchange are valued at the mean between the closing bid and ask prices. Listed preferred
stocks convertible into common stocks are valued using an evaluated price from a pricing service.
Foreign equity securities are valued based on the closing price or last trade price on
their primary exchange at the close of business of the New York Stock Exchange. If any foreign equity security closing prices
are not readily available, the securities are valued at the mean of the latest quoted bid and ask prices on such exchanges or
markets. Foreign currency exchange rates are determined at the scheduled closing time of the New York Stock Exchange.
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange;
therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that
occur after such close but before the close of the New York Stock Exchange. In those situations, foreign securities will be fair
valued pursuant to a policy approved by the Board of Directors. Under the policy, the Fund may utilize a third-party pricing
service to determine these fair values. The third-party pricing service takes into account multiple factors, including, but not
limited to, movements in the U.S. securities markets, certain depositary receipts, futures contracts and foreign exchange rates
that have occurred subsequent to the close of the foreign exchange or market, to determine a good faith estimate that reasonably
reflects the current market conditions as of the close of the New York Stock Exchange. The fair value of a security
is likely to be different from the quoted or published price, if available.
Investments in open-end investment companies (other than exchange-traded funds (ETFs)),
are valued at the latest net asset value reported by those companies as of the valuation time.
Option contracts are valued at the mean of the latest quoted bid and ask prices on
their primary exchanges. Option contracts, including over-the-counter option contracts, with no readily available
market quotations are valued using mid-market evaluations from independent third-party vendors.
Investments for which market quotations are not readily available, or that have quotations
which management believes are not reflective of market value or reliable, are valued at fair value as determined
in good faith under procedures approved by the Board of Directors. If a security or class of securities (such as foreign securities)
is valued at fair value, such value is likely to be different from the quoted or published price for the security, if available.
The determination of fair value often requires significant judgment. To determine
fair value, management may use assumptions including but not limited to future cash flows and estimated risk premiums.
Multiple inputs from various sources may be used to determine fair value.
GAAP requires disclosure regarding the inputs and valuation techniques used to measure
fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major
category. This information is disclosed following the Fund’s Portfolio of Investments.
Foreign currency transactions and translations
The values of all assets and liabilities denominated in foreign currencies are generally
translated into U.S. dollars at exchange rates determined at the close of regular trading on the New York Stock Exchange.
Net realized and unrealized gains (losses) on foreign currency transactions and translations include gains (losses)
arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses)
arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends,
interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of gains
(losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices
of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments in
the Statement of Operations.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
25
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
Derivative instruments
The Fund may invest in certain derivative instruments, which are transactions whose
values depend on or are derived from (in whole or in part) the value of one or more other assets, such as securities, currencies,
commodities or indices. The Fund uses a rules-based call option writing strategy on the NASDAQ 100 Index®, an unmanaged index that includes the largest and most active nonfinancial domestic and international companies listed on the Nasdaq
Stock Market, or its exchange-traded fund equivalent (NASDAQ 100) on a month-to-month basis.
The Fund may also seek to provide downside protection by purchasing puts on the NASDAQ
100 when premiums on these options are considered by the Investment Manager to be low and, therefore, attractive
relative to the downside protection provided.
The Fund may also buy or write other call and put options on securities, indices,
ETFs and market baskets of securities to generate additional income or return or to provide the portfolio with downside protection.
In this regard, options may include writing “in-” or “out-of-the-money” put options or buying or selling options in connection with closing out positions prior to expiration of any options. However, the Fund does not intend to write “naked” call options on individual stocks (i.e., selling a call option on an individual security not owned by the Fund) other than in connection
with implementing the options strategies with respect to the NASDAQ 100. The put and call options purchased, sold or written
by the Fund may be exchange-listed or over-the-counter.
The notional exposure of a financial instrument is the nominal or face amount that
is used to calculate payments made on that instrument and/or changes in value for the instrument. The notional exposure
is a hypothetical underlying quantity upon which payment obligations are computed. Notional exposures provide a gauge for how
the Fund may behave given changes in individual markets. The notional amounts of derivative instruments, if applicable,
are not recorded in the financial statements. A derivative instrument may suffer a mark to market loss if the value of the contract
decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur
if the counterparty does not perform under the contract. Options written by the Fund do not typically give rise to counterparty
credit risk, as options written generally obligate the Fund and not the counterparty to perform. With exchange-traded purchased
options, there is minimal counterparty credit risk to the Fund since the exchange’s clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller
of the contract; therefore, the counterparty credit risk is limited to failure of the clearinghouse. However, credit
risk still exists in exchange traded option contracts with respect to any collateral that is held in a broker’s customer accounts. While clearing brokers are required to segregate customer collateral from their own assets, in the event that a clearing
broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of collateral
held by the broker for all its clients, U.S. bankruptcy laws will typically allocate that shortfall on a pro-rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.
In order to better define its contractual rights and to secure rights that will help
the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master
Agreement (ISDA Master Agreement) or similar agreement with its derivatives counterparties. An ISDA Master Agreement is
a bilateral agreement between a Fund and a counterparty that governs over-the-counter derivatives and foreign exchange
forward contracts and contains, among other things, collateral posting terms and netting provisions in the event of a default
and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty
certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the
event of default (close-out netting) including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy
or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset
in bankruptcy, insolvency or other events. Collateral (margin) requirements differ by type of derivative. Collateral terms for
most over-the-counter derivatives are subject to regulatory requirements to exchange variation margin with trading counterparties
and may have contract specific margin terms as well. Margin requirements are established by the exchange for exchange traded
options and by the CCP for futures and options on futures. Brokers can ask for margin in excess of the minimum in certain
circumstances. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually
or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund may also pay interest expense
on cash collateral received from the
26
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
broker or receive interest income on cash collateral pledged to the broker. The Fund
attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial
resources to honor their obligations and by monitoring the financial stability of those counterparties.
Investments in derivative instruments may expose the Fund to certain additional risks,
including those detailed below.
Options are contracts which entitle the holder to purchase or sell securities or other
identified assets at a specified price, or in the case of index option contracts, to receive or pay the difference between the
index value and the strike price of the index option contract. Option contracts can be either exchange-traded or over-the-counter.
The Fund has written option contracts to decrease the Fund’s exposure to equity risk and to increase return on investments. These instruments may be used for other purposes in future periods. Completion of transactions for option contracts
traded in the over-the-counter market depends upon the performance of the other party. Collateral may be collected
or posted by the Fund to secure over-the-counter option contract trades. Collateral held or posted by the Fund for
such option contract trades must be returned to the broker or the Fund upon closure, exercise or expiration of the contract.
Options contracts purchased are recorded as investments. When the Fund writes an options
contract, the premium received is recorded as an asset and an amount equivalent to the premium is recorded as a liability
in the Statement of Assets and Liabilities and is subsequently adjusted to reflect the current fair value of the
option written. Changes in the fair value of the written option are recorded as unrealized appreciation or depreciation until the contract
is exercised or has expired. The Fund realizes a gain or loss when the option contract is closed or expires. When option
contracts are exercised, the proceeds on sales for a written call or purchased put option contract, or the purchase cost for
a written put or purchased call option contract, is adjusted by the amount of premium received or paid.
For over-the-counter options purchased, the Fund bears the risk of loss of the amount
of the premiums paid plus the positive change in market values net of any collateral held by the Fund should the counterparty
fail to perform under the contracts. Option contracts written by the Fund do not typically give rise to significant counterparty
credit risk, as options written generally obligate the Fund and not the counterparty to perform. The risk in writing
a call option contract is that the Fund gives up the opportunity for profit if the market price of the security increases
above the strike price and the option contract is exercised. The risk in writing a put option contract is that the Fund may incur
a loss if the market price of the security decreases below the strike price and the option contract is exercised. Exercise of
a written option could result in the Fund purchasing or selling a security or foreign currency when it otherwise would not,
or at a price different from the current market value. In purchasing and writing options, the Fund bears the risk of an unfavorable
change in the value of the underlying instrument or the risk that the Fund may not be able to enter into a closing transaction
due to an illiquid market.
Effects of derivative transactions in the financial statements
The following tables are intended to provide additional information about the effect
of derivatives on the financial statements of the Fund, including: the fair value of derivatives by risk category and the location
of those fair values in the Statement of Assets and Liabilities; and the impact of derivative transactions over the period
in the Statement of Operations, including realized and unrealized gains (losses). The derivative instrument schedules following
the Portfolio of Investments present additional information regarding derivative instruments outstanding at the end of
the period, if any.
The following table is a summary of the fair value of derivative instruments (not
considered to be hedging instruments for accounting disclosure purposes) at June 30, 2024:
|
|
|
|
|
|
Statement
of assets and liabilities
location
|
|
|
|
Option contracts written, at value
|
|
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
27
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
The following table indicates the effect of derivative instruments (not considered
to be hedging instruments for accounting disclosure purposes) in the Statement of Operations for the six months ended June
30, 2024:
Amount of realized gain (loss) on derivatives recognized in income
|
|
|
Option
contracts
written
($)
|
|
|
|
|
|
Change in unrealized appreciation (depreciation) on derivatives recognized in income
|
|
|
Option
contracts
written
($)
|
|
|
|
The following table is a summary of the average daily outstanding volume by derivative
instrument for the six months ended June 30, 2024:
Offsetting of assets and liabilities
The following table presents the Fund’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Fund as
of June 30, 2024:
|
|
|
|
|
|
Call option contracts written
|
|
Total financial and derivative net assets
|
|
Total collateral received (pledged) (a)
|
|
|
|
|
|
|
In some instances, the actual collateral received and/or pledged may be more than
the amount shown due to overcollateralization.
|
|
|
Represents the net amount due from/(to) counterparties in the event of default.
|
Security transactions are accounted for on the trade date. Cost is determined and
gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Corporate actions and dividend income are generally recorded net of any non-reclaimable
tax withholdings, on the ex-dividend date or upon receipt of an ex-dividend notification in the case of certain foreign
securities.
The Fund may receive distributions from holdings in equity securities, business development
companies (BDCs), exchange-traded funds (ETFs), limited partnerships (LPs), other regulated investment
companies (RICs), and real estate investment trusts (REITs), which report information as to the tax character of their
distributions annually. These distributions are allocated to dividend income, capital gain and return of capital based on actual
information reported. Return of capital is recorded as a reduction of the cost basis of securities held. If the Fund no longer
owns the applicable securities, return of capital is recorded as a realized gain. With respect to REITs, to the extent actual
information has not yet been reported, estimates for return of capital are made by Columbia Management Investment Advisers,
LLC (the Investment Manager), a
28
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). The Investment Manager’s estimates are subsequently adjusted when the actual character of the distributions is disclosed
by the REITs, which could result in a proportionate change in return of capital to stockholders.
Awards from class action litigation are recorded as a reduction of cost basis if the
Fund still owns the applicable securities on the payment date. If the Fund no longer owns the applicable securities on the payment
date, the proceeds are recorded as realized gains.
Determination of net asset value
The net asset value per share of the Fund is computed by dividing the value of the
net assets of the Fund by the total number of outstanding shares of the Fund, rounded to the nearest cent, at the close of regular
trading (ordinarily 4:00 p.m. Eastern Time) every day the New York Stock Exchange is open.
Federal income tax status
The Fund intends to qualify each year as a regulated investment company under Subchapter
M of the Internal Revenue Code, as amended, and will distribute substantially all of its investment company taxable
income and net capital gain, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the
Fund intends to distribute in each calendar year substantially all of its ordinary income, capital gain net income and certain
other amounts, if any, such that the Fund should not be subject to federal excise tax. Therefore, no federal income or excise
tax provision is recorded.
The Fund may be subject to foreign taxes on income, gains on investments or currency
repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries, as applicable, based
upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Realized gains in certain countries may be subject to foreign taxes at the Fund level,
based on statutory rates. The Fund accrues for such foreign taxes on realized and unrealized gains at the appropriate
rate for each jurisdiction, as applicable. The amount, if any, is disclosed as a liability in the Statement of Assets and Liabilities.
Dividends to stockholders
In November 2010, the Fund paid its first dividend under the Fund’s managed distribution policy adopted by the Fund’s Board of Directors. Prior to the managed distribution policy, the Fund paid distributions
pursuant to a level rate distribution policy. Under its former distribution policy and consistent with the 1940 Act, the Fund could
not distribute long-term capital gains, as defined in the Internal Revenue Code of 1986, more often than once in any one taxable
year. In October 2010, the Fund received exemptive relief from the Securities and Exchange Commission that permits
the Fund to distribute long-term capital gains more often than once in any one taxable year. After consideration by the Fund’s Board of Directors, the Fund adopted the managed distribution policy which allows the Fund to make periodic distributions
of long-term capital gains. Under its managed distribution policy, the Fund intends to make quarterly distributions to Common
Stockholders at a rate that reflects the past and projected performance of the Fund. The Fund expects to receive all or
some of its current income and gains from the following sources: (i) dividends received by the Fund that are paid on the
equity and equity-related securities in its portfolio; and (ii) capital gains (short-term and long-term) from option premiums
and the sale of portfolio securities. It is possible that the Fund’s distributions will at times exceed the earnings and profits of the Fund and therefore all or a portion of such distributions may constitute a return of capital as described below. A return
of capital is a return of a portion of an investor’s original investment. A return of capital is not taxable, but it reduces a Stockholder’s tax basis in his or her shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition
by the Stockholder of his or her shares. Distributions may vary, and the Fund’s distribution rate will depend on a number of factors, including the net earnings on the Fund’s portfolio investments and the rate at which such net earnings change as a result of changes in the timing of, and rates at which, the Fund receives income from the sources described above. The net
investment income of the Fund consists of all income (other than net short-term and long-term capital gains) less all expenses
of the Fund.
The Board of Directors may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, as the Fund’s portfolio and market conditions change, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
29
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
investment income and net short- and long-term capital gains. Over time, the Fund
will distribute all of its net investment income and net short-term capital gains. In addition, at least annually, the Fund
intends to distribute any net capital gain (which is the excess of net long-term capital gain over net short-term capital loss)
or, alternatively, to retain all or a portion of the year’s net capital gain and pay federal income tax on the retained gain.
Dividends and other distributions to stockholders are recorded on ex-dividend dates.
The Fund has an investment objective to seek growth of capital and current income. In the latter regard, in 2023, the Fund’s managed distribution policy provided stockholders with current income through quarterly
distributions of $0.4625 per share, comprised of $0.0571 in short-term capital gains and $1.7929 in long-term capital
gains. In order to avoid federal excise tax in 2023, the Fund also paid a special fourth quarter capital gain distribution, beyond
its typical quarterly managed distribution policy, in the amount of $0.2669 per share. No portion of the Fund’s 2023 distributions, including such special distribution, consisted of a return of capital. A return of capital may occur, for example, when
some or all of the money that you invested in the Fund is paid back to you. The Fund was fully invested throughout 2023, implementing
its technology and options investing strategies so as to position the Fund to achieve its capital appreciation
investment objective, as evidenced by the Fund’s NAV return of 38.89% in 2023, which underperformed the Fund’s benchmark, the S&P North American Technology Sector Index’s return of 61.13% for the same period.
Guarantees and indemnifications
Under the Fund’s organizational documents and, in some cases, by contract, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, certain of the Fund’s contracts with its service providers contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Fund
cannot be determined, and the Fund has no historical basis for predicting the likelihood of any such claims.
Note 3. Fees and other transactions with affiliates
The Fund has entered into a Management Agreement with Columbia Management Investment
Advisers, LLC (the Investment Manager), a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial).
Under the Management Agreement, the Investment Manager provides the Fund with investment research and advice, as well
as administrative and accounting services. The management services fee is an annual fee that is equal to 1.06% of the Fund’s daily Managed Assets. Effective on the date the SEC declares effective the registration statement filed by the Fund
on June 26, 2024 relating to an "at-the-market" offering of new Fund common shares, the management services fee will
be payable as a percentage of the Fund’s daily Managed Assets that declines based on the following schedule: 1.06% for $0 - $500,000; 1.055% for $500,000 - $1,000,000; 1.050% for $1,000,000 - $3,000,000; 1.010% for $3,000,000 - $4,000,000;
0.960% for $4,000,000 - $6,000,000; 0.910% for $6,000,000 - $12,000,000; 0.900% for $12,000,000 - $20,000,000;
0.890% for $20,000,000 - $24,000,000; 0.880% for $24,000,000 - $50,000,000; and 0.850% for greater than $50,000,000.
As of the date of filing this shareholder report with the SEC, the Fund’s registration statement relating to an "at-the-market" offering has not yet been declared effective. "Managed Assets" means the net asset value of the Fund’s outstanding Common Stock plus the liquidation preference of any issued and outstanding preferred stock of the Fund and
the principal amount of any borrowings used for leverage. To date, the Fund has not issued preferred stock.
Compensation of Board members
Members of the Board of Directors who are not officers or employees of the Investment
Manager or Ameriprise Financial are compensated for their services to the Fund as disclosed in the Statement of Operations.
Under a Deferred Compensation Plan (the Deferred Plan), these members of the Board of Directors may elect to defer
payment of up to 100% of their compensation. Deferred amounts are treated as though equivalent dollar amounts had
been invested in shares of certain funds managed by the Investment Manager. The Fund’s liability for these amounts is adjusted for market value changes and remains in the Fund until distributed in accordance with the Deferred Plan. All amounts
payable under the Deferred Plan constitute a general unsecured obligation of the Fund. The expense for the Deferred Plan, which includes Directors’ fees deferred during the current period as well as any gains or losses on the Directors’ deferred compensation balances as a result of market fluctuations, is included in "Deferred compensation of board members"
in the Statement of Operations.
30
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
Compensation of Chief Compliance Officer
The Board of Directors has appointed a Chief Compliance Officer for the Fund in accordance
with federal securities regulations. As disclosed in the Statement of Operations, a portion of the Chief Compliance Officer’s total compensation is allocated to the Fund, along with other allocations to affiliated registered investment
companies managed by the Investment Manager and its affiliates, based on relative net assets.
Note 4. Federal tax information
The timing and character of income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP because of temporary or permanent book to tax differences.
At June 30, 2024, the approximate cost of all investments for federal income tax purposes
and the aggregate gross approximate unrealized appreciation and depreciation based on that cost was:
|
|
Gross unrealized
appreciation ($)
|
Gross unrealized
(depreciation) ($)
|
Net unrealized
appreciation ($)
|
|
|
|
|
|
Management of the Fund has concluded that there are no significant uncertain tax positions
in the Fund that would require recognition in the financial statements. However, management’s conclusion may be subject to review and adjustment at a later date based on factors including, but not limited to, new tax laws, regulations,
and administrative interpretations (including relevant court decisions). Generally, the Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service.
Note 5. Portfolio information
The cost of purchases and proceeds from sales of securities, excluding short-term
investments and derivatives, if any, aggregated to $101,117,034 and $124,996,243, respectively, for the six months ended
June 30, 2024. The amount of purchase and sale activity impacts the portfolio turnover rate reported in the Financial
Highlights.
Note 6. Dividend investment plan and stock repurchase program
The Fund, in connection with its Dividend Investment Plan (the Plan), issues shares
of its own Common Stock, as needed, to satisfy the Plan requirements. A total of 68,595 shares were issued to the Plan participants
during the six months ended June 30, 2024 for proceeds of $2,046,431, a weighted average discount of (0.54)%
from the net asset value of those shares.
Pursuant to the Plan, unless a Common Stockholder elects otherwise, all cash dividends,
capital gains distributions, and other distributions are automatically reinvested in additional Common Stock. If you
hold your shares in street name or other nominee (i.e., through a broker), you should contact them to determine their policy, as the broker firm’s policy with respect to Fund distributions may be to default to a cash payment. Common Stockholders who elect
not to participate in the Plan (including those whose intermediaries do not permit participation in the Plan by their
customers) will receive all dividends and distributions payable in cash directly to the Common Stockholder of record (or, if
the shares of Common Stock are held in street or other nominee name, then to such nominee). Common Stockholders may elect
not to participate in the Plan and to receive all distributions of dividends and capital gains or other distributions in
cash by sending written instructions to Equiniti Trust Company, LLC (Equiniti), 6201 15th Avenue, Brooklyn, NY 11219. Participation
in the Plan may be terminated or resumed at any time without penalty by written notice if received by Equiniti, prior
to the record date for the next distribution. Otherwise, such termination or resumption will be effective with respect to any subsequently
declared distribution. The income tax consequences of participation in the Plan are the same whether you participate
in the Plan and reinvest your Fund distributions or you elect not to participate in the Plan and receive all your Fund
distributions in cash (i.e., capital gains and income are realized, although cash is not received by the shareholder).
Under the Plan, Common Stockholders receive shares of Common Stock in lieu of cash
distributions unless they have elected otherwise as described above. Common Stock will be issued in lieu of cash
by the Fund from previously authorized but unissued Common Stock. If the market price of a share on the ex-dividend date
of such a distribution is at or above the
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
31
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
Fund’s net asset value per share on such date, the number of shares to be issued by the Fund to each Common Stockholder receiving shares in lieu of cash distributions will be determined by dividing the
amount of the cash distribution to which such Common Stockholder would be entitled by the greater of the net asset value per share
on such date or 95% of the market price of a share on such date. If the market price of a share on such an ex-dividend
date is below the net asset value per share, the number of shares to be issued to such Common Stockholders will be determined
by dividing such amount by the per share market price. The issuance of Common Stock at less than net asset value
per share will dilute the net asset value of all Common Stock outstanding at that time. Market price on any day means the closing
price for the Common Stock at the close of regular trading on the New York Stock Exchange on such day or, if such day
is not a day on which the Common Stock trades, the closing price for the Common Stock at the close of regular trading
on the immediately preceding day on which trading occurs.
The Fund reserves the right to amend or terminate the Plan as applied to any distribution
paid subsequent to written notice of the change sent to participants in the Plan at least 90 days before the record date
for such distribution. There are no service or brokerage charges to participants in the Plan; however, the Fund reserves the right
to amend the Plan to include a service charge payable to the Fund by the participants. The Fund reserves the right to amend
the Plan to provide for payment of brokerage fees by the Plan participants in the event the Plan is changed to provide
for open market purchases of Common Stock on behalf of the Plan participants. All correspondence concerning the Plan should
be directed to Equiniti.
The Fund’s Board re-approved the Fund’s stock repurchase program for 2024, which is identical to the Fund’s 2023 stock repurchase program. The Fund, under its stock repurchase program, currently intends
to make open market purchases of its Common Stock from time to time when the Fund’s Common Stock is trading at a discount to its net asset value, in an amount approximately sufficient to offset the growth in the number of shares of Common
Stock issued as a result of the reinvestment of the portion of its distributions to Common Stockholders that are attributable
to distributions received by the Fund from its underlying portfolio investments less fund expenses. For the six months
ended June 30, 2024, no shares were purchased in the open market.
Note 7. Affiliated money market fund
The Fund invests in Columbia Short-Term Cash Fund, an affiliated money market fund
established for the exclusive use by the Fund and other affiliated funds (the Affiliated MMF). The income earned by the Fund
from such investments is included as Dividends - affiliated issuers in the Statement of Operations. As an investing fund,
the Fund indirectly bears its proportionate share of the expenses of the Affiliated MMF. The Affiliated MMF prices its shares
with a floating net asset value. The Securities and Exchange Commission has adopted amendments to money market fund rules
requiring institutional prime money market funds like the Affiliated MMF to be subject to a discretionary liquidity
fee of up to 2% if the imposition of such a fee is determined to be in the best interest of the Affiliated MMF and, by October
2, 2024, to a mandatory liquidity fee if daily net redemptions exceed 5% of net assets.
Note 8. Interfund Lending
Pursuant to an exemptive order granted by the Securities and Exchange Commission,
the Fund entered into a master interfund lending agreement (the Interfund Program) with certain other funds advised
by the Investment Manager or its affiliates (each a Participating Fund). The Interfund Program allows each Participating
Fund to lend money directly to and, other than closed-end funds (including the Fund) and money market funds, borrow money
directly from other Participating Funds for temporary purposes through the Interfund Program (each an Interfund Loan).
A Participating Fund may make unsecured borrowings under the Interfund Program if
its outstanding borrowings from all sources, including those outside of the Interfund Program, immediately after such
unsecured borrowing under the Interfund Program are equal to or less than 10% of its total assets, provided that if the borrowing
Participating Fund has a secured loan outstanding from any other lender, including but not limited to another Participating Fund, the borrowing Participating Fund’s borrowing under the Interfund Program will be secured on at least an equal priority
basis with at least an equivalent percentage of collateral to loan value as any outstanding loan that requires collateral.
A Participating Fund may not borrow through the Interfund Program or from any other source if its total outstanding borrowings
immediately after a borrowing would be more than 33 1/3% of its total assets or any lower threshold provided for by a Participating Fund’s fundamental or non-fundamental policy restriction.
32
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
No Participating Fund may lend to another Participating Fund through the Interfund
Program if the loan would cause the lending Participating Fund’s aggregate outstanding loans under the Interfund Program to exceed 15% of its current net assets at the time of the loan. A Participating Fund’s Interfund Loans to any one Participating Fund may not exceed 5% of the lending Participating Fund’s net assets at the time of the loan. The duration of Interfund Loans will be limited to the time required to receive payment for securities sold, but in no event more than seven days. Interfund
Loans effected within seven days of each other will be treated as separate loan transactions for purposes of this limitation.
Each Interfund Loan may be called on one business day’s notice by a lending Participating Fund and may be repaid on any day by a borrowing Participating Fund.
Loans under the Interfund Program are subject to the risk that the borrowing Participating
Fund could be unable to repay the loan when due, and a delay in repayment to the lending Participating Fund could result
in a lost opportunity by the lending Participating Fund to invest those loaned assets and additional lending costs. Because
the Investment Manager provides investment management services to both borrowing and lending Participating Funds,
the Investment Manager may have a potential conflict of interest in determining that an Interfund Loan is comparable
in credit quality to other high-quality money market instruments. The Participating Fund has adopted policies and procedures that
are designed to manage potential conflicts of interest, but the administration of the Interfund Program may be subject
to such conflicts.
As noted above, the Fund may only participate in the Interfund Program as a Lending Fund. The Fund’s activity in the Interfund Program during the six months ended June 30, 2024 was as follows:
|
|
|
Weighted average
interest rate (%)
|
Number of days
with outstanding loans
|
|
|
|
|
|
Interest income earned by the Fund is recorded as Interfund lending in the Statement
of Operations. The Fund had no outstanding interfund loans at June 30, 2024.
Note 9. Investments in illiquid investments
The Fund may not acquire any illiquid investment if, immediately after the acquisition,
the Fund would have invested more than 15% of Managed Assets in illiquid investments that are assets. For these purposes, an “illiquid investment” means any investment that the Fund reasonably expects cannot be sold or disposed of in current
market conditions in seven calendar days or less without the sale or disposition significantly changing the market
value of the investment.
Note 10. Significant risks
Information technology sector risk
The Fund invests a substantial portion of its assets in technology and technology-related
companies. The market prices of technology and technology-related stocks tend to exhibit a greater degree of market
risk and price volatility than other types of investments. These stocks may fall in and out of favor with investors rapidly,
which may cause sudden selling and dramatically lower market prices. These stocks also may be affected adversely by changes
in technology, consumer and business purchasing patterns, government regulation and/or obsolete products or services.
In addition, a rising interest rate environment tends to negatively affect technology and technology-related companies.
In such an environment, those companies with high market valuations may appear less attractive to investors, which
may cause sharp decreases in the companies’ market prices. Further, those technology or technology-related companies seeking to finance their expansion would have increased borrowing costs, which may negatively impact their earnings.
As a result, these factors may negatively affect the performance of the Fund. Finally, the Fund may be susceptible to factors
affecting the 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 and technology-related 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. Some companies
in the information technology sector are facing increased government and regulatory scrutiny and may be subject to adverse
government or regulatory action, which could negatively impact the value of their securities.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
33
Notes to Financial Statements (continued)
June 30, 2024 (Unaudited)
Market risk
The Fund may incur losses due to declines in the value of one or more securities in
which it invests. These declines may be due to factors affecting a particular issuer, or the result of, among other things,
political, regulatory, market, economic or social developments affecting the relevant market(s) more generally. In addition,
turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many
issuers, which could adversely affect the Fund’s ability to price or value hard-to-value assets in thinly traded and closed markets and could cause operational challenges. Global economies and financial markets are increasingly interconnected,
and conditions and events in one country, region or financial market may adversely impact issuers in a different country,
region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global
supply chain; in these and other circumstances, such risks might affect companies worldwide. As a result, local, regional
or global events such as terrorism, war, other conflicts, natural disasters, disease/virus outbreaks and epidemics or
other public health issues, recessions, depressions or other events – or the potential for such events – could have a significant negative impact on global economic and market conditions.
A non-diversified fund is permitted to invest a greater percentage of its total assets
in fewer issuers than a diversified fund. This increases the risk that a change in the value of any one investment held by the
Fund could affect the overall value of the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund’s value will likely be more volatile than the value of a more diversified fund.
Note 11. Subsequent events
Management has evaluated the events and transactions that have occurred through the
date the financial statements were issued. Other than as noted in Note 3 above, there were no items requiring adjustment
of the financial statements or additional disclosure.
Note 12. Information regarding pending and settled legal proceedings
Ameriprise Financial and certain of its affiliates are involved in the normal course
of business in legal proceedings which include regulatory inquiries, arbitration and litigation, including class actions
concerning matters arising in connection with the conduct of their activities as part of a diversified financial services firm.
Ameriprise Financial believes that the Fund is 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 Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund. Ameriprise
Financial is required to make quarterly (10-Q), annual (10-K) and, as necessary, 8-K filings with the Securities and Exchange
Commission (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.
Although we believe proceedings are not likely to have a material adverse effect on
the Fund or the ability of Ameriprise Financial or its affiliates to perform under their contracts with the Fund, these
proceedings are subject to uncertainties and, as such, we are unable to estimate the possible loss or range of loss that may result.
An adverse outcome in one or more of these proceedings could result in adverse judgments, settlements, fines, penalties
or other relief that could have a material adverse effect on the consolidated financial condition or results of operations of
Ameriprise Financial or one or more of its affiliates that provide services to the Fund.
34
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Approval of Management Agreement
Columbia Management Investment Advisers, LLC (the Investment Manager, and together
with its domestic and global affiliates, Columbia Threadneedle Investments), a wholly-owned subsidiary of Ameriprise
Financial, Inc. (Ameriprise Financial), serves as the investment manager to Columbia Seligman Premium Technology Growth Fund,
Inc. (the Fund). Under a management agreement (the Management Agreement), the Investment Manager provides investment
advice and other services to the Fund and other funds in the Columbia Fund family (collectively, the
Columbia Funds).
On an annual basis, the Fund’s Board of Trustees (the Board), including the independent Board members (the Independent Trustees), considers renewal of the Management Agreement. The Investment Manager
prepared detailed reports for the Board and its Contracts Committee (including its Contracts Subcommittee) in March,
April, May and June 2024, including reports providing the results of analyses performed by a third-party data provider,
Broadridge Financial Solutions, Inc. (Broadridge), and comprehensive responses by the Investment Manager to written requests
for information by independent legal counsel to the Independent Trustees (Independent Legal Counsel), to assist the
Board in making this determination. In addition, throughout the year, the Board (or its committees or subcommittees) regularly
meets with portfolio management teams and senior management personnel and reviews information prepared by the Investment
Manager addressing the services the Investment Manager provides and Fund performance. The Board also accords
appropriate weight to the work, deliberations and conclusions of the various committees (including their subcommittees),
such as the Contracts Committee, the Investment Review Committee, the Audit Committee and the Compliance Committee
in determining whether to continue the Management Agreement.
The Board, at its June 27, 2024 Board meeting (the June Meeting), considered the renewal
of the Management Agreement for an additional one-year term. At the June Meeting, Independent Legal Counsel reviewed
with the Independent Trustees various factors relevant to the Board’s consideration of advisory agreements and the Board’s legal responsibilities related to such consideration. The Independent Trustees considered such information as they,
their legal counsel or the Investment Manager believed reasonably necessary to evaluate and to approve the continuation
of the Management Agreement. Among other things, the information and factors considered included the following:
•
Information on the investment performance of the Fund relative to the performance
of a group of funds determined to be comparable to the Fund by Broadridge, as well as performance relative to one or more
benchmarks;
•
Information on the Fund’s management fees and total expenses, including information comparing the Fund’s expenses to those of a group of comparable funds, as determined by Broadridge;
•
Terms of the Management Agreement;
•
Descriptions of various services performed by the Investment Manager under the Management
Agreement, including portfolio management and portfolio trading practices;
•
Information regarding the resources of the Investment Manager, including information
regarding senior management, portfolio managers and other personnel;
•
Information regarding the capabilities of the Investment Manager with respect to compliance
monitoring services;
•
The profitability to the Investment Manager and its affiliates from their relationships
with the Fund; and
•
Report provided by the Board’s independent fee consultant, JDL Consultants, LLC (JDL).
Following an analysis and discussion of the foregoing, and the factors identified
below, the Board, including all of the Independent Trustees, approved the renewal of the Management Agreement.
Nature, extent and quality of services provided by the Investment Manager
The Board analyzed various reports and presentations it had received detailing the
services performed by the Investment Manager, as well as its history, expertise, resources and relative capabilities, and
the qualifications of its personnel.
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
35
Approval of Management Agreement (continued)
(Unaudited)
The Board specifically considered the many developments during recent years concerning
the services provided by the Investment Manager. Among other things, the Board noted the organization and depth
of the equity and credit research departments. The Board further observed the enhancements to the investment risk management department’s processes, systems and oversight over the past several years. The Board also took into account
the broad scope of services provided by the Investment Manager to the Fund, including, among other services, investment,
risk and compliance oversight. The Board also took into account the information it received concerning the Investment Manager’s ability to attract and retain key portfolio management personnel and that it has sufficient resources to provide competitive
and adequate compensation to investment personnel.
In connection with the Board’s evaluation of the overall package of services provided by the Investment Manager, the Board also considered the nature, quality and range of administrative services provided
to the Fund by the Investment Manager, as well as the achievements in 2023 in the performance of administrative services, and
noted the various enhancements anticipated for 2024. In evaluating the quality of services provided under the Management
Agreement, the Board also took into account the organization and strength of the Fund’s and its service providers’ compliance programs. The Board also reviewed the financial condition of the Investment Manager and its affiliates and each entity’s ability to carry out its responsibilities under the Management Agreement.
In addition, the Board discussed the acceptability of the terms of the Management
Agreement, noting that no changes were proposed from the form of agreement previously approved. The Board also noted the
wide array of legal and compliance services provided to the Fund under the Management Agreement.
After reviewing these and related factors (including investment performance as discussed
below), the Board concluded, within the context of their overall conclusions, that the nature, extent and quality
of the services provided to the Fund under the Management Agreement supported the continuation of the Management Agreement.
The Board carefully reviewed the investment performance of the Fund, including detailed
reports providing the results of analyses performed by each of the Investment Manager, Broadridge and JDL collectively
showing, for various periods (including since manager inception): (i) the performance of the Fund, (ii) the Fund’s performance relative to peers and benchmarks and (iii) the net assets of the Fund. The Board observed that the Fund’s performance for certain periods ranked above median based on information provided by Broadridge.
The Board also reviewed a description of the third-party data provider’s methodology for identifying the Fund’s peer groups for purposes of performance and expense comparisons.
The Board also considered the Investment Manager’s performance and reputation generally. After reviewing these and related factors, the Board concluded, within the context of their overall conclusions, that
the performance of the Fund and the Investment Manager, in light of other considerations, supported the continuation of
the Management Agreement.
Comparative fees, costs of services provided and the profits realized by the Investment
Manager and its affiliates from their relationships with the Fund
The Board reviewed comparative fees and the costs of services provided under the Management
Agreement. The Board members considered detailed comparative information set forth in an annual report
on fees and expenses, including, among other things, data (based on analyses conducted by Broadridge and JDL) showing a comparison of the Fund’s expenses with median expenses paid by funds in its comparative peer universe, as well as data showing the Fund’s contribution to the Investment Manager’s profitability.
The Board considered the reports of JDL, which assisted in the Board’s analysis of the Funds’ performance and expenses and the reasonableness of the Funds’ fee rates. The Board accorded particular weight to the notion that a primary objective of the level of fees is to achieve a rational pricing model applied consistently across
the various product lines in the Fund family, while assuring that the overall fees for each Columbia Fund (with certain
exceptions) are generally in line with the current “pricing philosophy” such that Fund total expense ratios, in general, approximate or are lower than the median expense ratios of funds in the same Lipper comparison universe. With respect to the
Fund, a closed-end Fund, the Board
36
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
Approval of Management Agreement (continued)
(Unaudited)
observed that although the Fund’s expense ratio was higher than the comparative closed-end fund peer group’s median expense ratio, the Fund is the only technology-focused fund in the universe. The
Board further observed that, unlike many technology-focused open-end funds, the Fund employs a unique options-writing strategy
designed to cushion its downside performance.
After reviewing these and related factors, the Board concluded, within the context
of their overall conclusions, that the levels of management fees and expenses of the Fund, in light of other considerations, supported
the continuation of the Management Agreement.
The Board also considered the profitability of the Investment Manager and its affiliates
in connection with the Investment Manager providing management services to the Fund. With respect to the profitability
of the Investment Manager and its affiliates, the Independent Trustees referred to information discussing the profitability
to the Investment Manager and Ameriprise Financial from managing the Columbia Funds. The Board considered that
the profitability generated by the Investment Manager in 2023 had declined from 2022 levels, due to a variety of factors,
including the decreased assets under management of the Funds. It also took into account the indirect economic benefits
flowing to the Investment Manager or its affiliates in connection with managing the Columbia Funds, such as the enhanced
ability to offer various other financial products to Ameriprise Financial customers, soft dollar benefits and overall reputational
advantages. The Board noted that the fees paid by the Fund should permit the Investment Manager to offer competitive
compensation to its personnel, make necessary investments in its business and earn an appropriate profit. After reviewing
these and related factors, the Board concluded, within the context of their overall conclusions, that the costs of services
provided and the profitability to the Investment Manager and its affiliates from their relationships with the Fund supported
the continuation of the Management Agreement.
The Board considered the economies of scale that might be realized as the Fund’s net asset level grows and took note of the extent to which Fund shareholders might also benefit from such growth. In this regard,
the Board took into account that, upon the effectiveness of the Fund’s registration statement filed with the Securities and Exchange Commission on June 26, 2024, management fees will decline as Fund assets exceed various breakpoints, all of which
have not been surpassed. The Board observed that the Management Agreement will thus provide for breakpoints in the management
fee rate schedule that allow opportunities for shareholders to realize lower fees as Fund assets grow and that
there are additional opportunities through other means for sharing economies of scale with shareholders. The Board observed,
however, that there is limited potential for more significant economies of scale that would inure to the benefit of shareholders,
given the closed-end nature of the Fund.
The Board reviewed all of the above considerations in reaching its decision to approve
the continuation of the Management Agreement. In reaching its conclusions, no single factor was determinative.
On June 27, 2024, the Board, including all of the Independent Trustees, determined
that fees payable under the Management Agreement were fair and reasonable in light of the extent and quality of
services provided and approved the renewal of the Management Agreement.
RESULTS OF MEETING OF STOCKHOLDERS
The 14th Annual Meeting of Stockholders of Columbia Seligman Premium Technology Growth
Fund, Inc. (the Fund) was held on June 25, 2024 at the Elliot Park Hotel, 823 5th Avenue South, Minneapolis, MN 55404.
Stockholders voted in favor of two Board of Directors’ recommended proposals. The description of each proposal and number of shares voted are as follows:
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
37
RESULTS OF MEETING OF STOCKHOLDERS (continued)
(Unaudited)
Proposal 1
To elect four directors to the Fund’s Board of Directors to serve until the 2027 Annual Meeting of Stockholders and until their successors are duly elected and qualified was as follows:
To ratify the selection of PricewaterhouseCoopers LLP as the Fund’s independent registered public accounting firm for 2024:
38
Columbia Seligman Premium Technology Growth Fund, Inc. | 2024
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Seligman Premium Technology Growth Fund, Inc.
Boston, MA 02210
You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. You can obtain the Fund’s most recent periodic reports and other regulatory filings by contacting your financial
advisor or Equiniti Trust Company, LLC at 866.666.1532 or 6201 15th Avenue, Brooklyn, NY 11219. These reports and other filings can also be found on the Securities and Exchange Commission’s EDGAR Database. You should read these reports and other filings carefully before investing.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name
of the Columbia and Threadneedle group of companies. All rights reserved.
© 2024 Columbia Management Investment Advisers, LLC.
columbiathreadneedleus.com/investor/
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
Not applicable.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies
Not Applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies
Not Applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
Not Applicable.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract
Statement regarding basis for approval of Investment Advisory Contract is included in Item 1 of this Form N-CSR.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 13. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
|
|
(1) For the period ended June 30, 2024, under the terms of its stock repurchase program, the registrant did not repurchase any of its shares of common stock.
|
(2a) The registrant's current stock repurchase program, which is reviewed at least annually by the registrant’s Board
of Directors, was first approved by the registrant’s Board of Directors in 2009.
(2b) Provided that the criteria for share repurchases are met under the registrant’s stock repurchase program, there is
no limit to the number of shares the registrant can repurchase.
(2c) The registrant’s stock repurchase program has no expiration date.
(2d) Not Applicable
(2e) Not Applicable
Item 15. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors implemented since the registrant last provided disclosure as to such procedures in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K or Item 15 of Form N-CSR.
Item 16. Controls and Procedures
(a) The registrant’s principal executive officer and principal financial officer, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b) There was no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 18. Recovery of erroneously Awarded Compensation
Not applicable.
Item 19. Exhibits
(a)(1) Not Applicable
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
(registrant) |
Columbia Seligman Premium Technology Growth Fund, Inc |
|
|
|
|
By (Signature and Title) |
/s/ Daniel J. Beckman |
|
|
Daniel J. Beckman, President and Principal Executive Officer |
|
|
|
|
Date |
August 22, 2024 |
|
|
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
By (Signature and Title) |
/s/ Daniel J. Beckman |
|
|
Daniel J. Beckman, President and Principal Executive Officer |
|
|
|
|
Date |
August 22, 2024 |
|
By (Signature and Title) |
/s/ Michael G. Clarke |
|
|
Michael G. Clarke, Chief Financial Officer, |
|
|
Principal Financial Officer and Senior Vice President |
|
|
|
|
Date |
August 22, 2024 |
|
By (Signature and Title) |
/s/ Charles H. Chiesa |
|
|
Charles H. Chiesa, Treasurer, Chief Accounting |
|
|
Officer and Principal Financial Officer |
|
|
|
|
Date |
August 22, 2024 |
I, Daniel J. Beckman, certify that:
1.I have reviewed this report on Form N-CSR of Columbia Seligman Premium Technology Growth Fund, Inc;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 22, 2024 |
/s/ Daniel J. Beckman |
|
|
Daniel J. Beckman, President and Principal |
|
Executive Officer |
I, Michael G. Clarke, certify that:
1.I have reviewed this report on Form N-CSR of Columbia Seligman Premium Technology Growth Fund, Inc;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 22, 2024 |
|
/s/ Michael G. Clarke |
|
|
|
Michael G. Clarke, Chief Financial Officer, |
|
Principal Financial Officer and Senior Vice |
|
President |
I, Charles H. Chiesa, certify that:
1.I have reviewed this report on Form N-CSR of Columbia Seligman Premium Technology Growth Fund, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)designed such internal control over financial reporting, or caused such internal control
|
over financial reporting to be designed under our supervision, to provide reasonable |
|
assurance regarding the reliability of financial reporting and the preparation of financial |
|
statements for external purposes in accordance with generally accepted accounting |
|
principles; |
(c ) |
evaluated the effectiveness of the registrant's disclosure controls and procedures and |
|
presented in this report our conclusions about the effectiveness of the disclosure controls |
|
and procedures, as of a date within 90 days prior to the filing date of this report based on |
|
such evaluation; and |
(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 22, 2024 |
/s/ Charles H. Chiesa |
|
|
Charles H. Chiesa, Treasurer, Chief Accounting |
|
Officer and Principal Financial Officer |
CERTIFICATION PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Certified Shareholder Report of Columbia Seligman Premium Technology Growth Fund, Inc (the “Trust”) on Form N-CSR for the period ending June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (“the Report”), the undersigned hereby certifies that, to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.
|
Date: August 22, 2024 |
/s/ Daniel J. Beckman |
|
|
Daniel J. Beckman, President and Principal Executive Officer |
|
Date: August 22, 2024 |
/s/ Michael G. Clarke |
|
|
Michael G. Clarke, Chief Financial Officer, |
|
|
Principal Financial Officer and Senior Vice President |
|
Date: August 22, 2024 |
/s/ Charles H. Chiesa |
|
|
Charles H. Chiesa, Treasurer, Chief Accounting |
|
|
Officer and Principal Financial Officer |
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission (the “Commission”) or its staff upon request.
This certification is being furnished to the Commission solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Form N-CSR with the Commission.
Dear Stockholder,
On February 27, 2024 (the Payment Date), pursuant to its managed distribution policy, Columbia Seligman Premium Technology Growth Fund, Inc. (NYSE: STK) (the Fund) paid a distribution in the amount of $0.4625 per share of common stock to stockholders of record on February 20, 2024, which is equal to a quarterly rate of 2.3125% (9.25% annualized) of the $20.00 offering price in the Fund’s initial public offering in November 2009. The first-quarter distribution of $0.4625 per share is equal to a quarterly rate of 1.4270% (5.71% annualized) of the Fund’s market price of $32.41 per share as of January 31, 2024.
Prior to the managed distribution policy, the Fund paid distributions pursuant to a level rate distribution policy. Under its former distribution policy and consistent with the Investment Company Act of 1940, as amended, the Fund could not distribute long-term capital gains, as defined in the Internal Revenue Code of 1986, more often than once in any one taxable year.
In October 2010, the Fund received exemptive relief from the Securities and Exchange Commission that permits the Fund to distribute long-term capital gains more often than once in any one taxable year. After consideration by the Fund’s Board, the Fund adopted the current managed distribution policy which allows the Fund to make distributions of long-term capital gains more than once in any taxable year.
The following table sets forth the estimated breakdown of the distribution noted above, on a per share basis, from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
0.00% |
$0.0000 |
|
Net Realized Long-Term Capital Gains |
100.00% |
$0.4625 |
|
Return of Capital or other Capital Source |
0.00% |
$0.0000 |
|
Total |
100.00% |
$0.4625 |
The following table sets forth the estimated breakdown, on a per share basis, of all distributions made by the Fund during the year-to-date period ended on the Payment Date of the above distribution (includes the distribution payment noted in the table above) from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of All Distributions Paid Through
Year-To-Date Period Ended on the Payment Date of the Current Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
0.00% |
$0.0000 |
|
Net Realized Long-Term Capital Gains |
100.00% |
$0.4625 |
|
Return of Capital or other Capital Source |
0.00% |
$0.0000 |
|
Total |
100.00% |
$0.4625 |
In certain years since the Fund’s inception, the Fund has distributed more than its income and net realized capital gains, which has resulted in Fund distributions substantially consisting of return of capital or other capital source. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” As of the payment date of the current distribution, all Fund distributions paid in 2024 (as estimated by the Fund based on current information) are from the earnings and profits of the Fund and not a return of capital. This could change during the remainder of the year, as further described below.
The amounts, sources and percentage breakdown of the distributions reported in this Notice are only estimates and are not being provided for, and should not be used for, tax reporting purposes. The actual amounts, sources and percentage breakdown of the distribution for tax reporting purposes, which may include return of capital, will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations.
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the 5-year period ended January 31, 2024, and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at January 31, 2024.
|
|
|
Average Annual Total NAV Return for the 5-year Period Ended January 31, 2024
|
19.44% |
|
Annualized Distribution Rate as a Percentage of January 31, 2024 NAV Price
(For the 5-year Period ended January 31, 2024) |
7.05%
|
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the period since inception of Fund investment operations through the period noted and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at January 31, 2024. Average annual total return of a share of the Fund’s common stock at NAV for the period since inception of Fund investment operations through the period noted includes the 4.50% sales load assessed to IPO investors.
|
|
|
Average Annual Total NAV Return for the Period Since Inception of Investment
Operations (November 30, 2009) Through January 31, 2024
|
14.30% |
|
Annualized Distribution Rate as a Percentage of January 31, 2024 NAV Price
(For the Period Since Inception of Investment Operations (November 30, 2009) through January 31, 2024)
|
6.70%
|
The following table sets forth (i) the cumulative total return (at NAV) of a share of the Fund’s common stock for the year-to-date period ended January 31, 2024 and (ii) the Fund’s distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at January 31, 2024.
|
|
|
|
Cumulative Total NAV Return for the Year-to-Date Period Ended January 31, 2024
|
0.96% |
|
Distribution Rate as a Percentage of January 31, 2024 NAV Price
(For the Year-to-Date Period Ended January 31, 2024) |
N/A – no distributions made during this period |
Past performance does not guarantee future results.
You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions noted in the tables above or from the terms of the Fund’s distribution policy.
The Fund or your financial professional will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions on your US federal income tax return. For tax purposes, the Fund is required to report unrealized gains or losses on certain non-US investments as ordinary income or loss, respectively. Accordingly, the amount of the Fund’s total distributions that will be taxable as ordinary income may be different than the amount of the distributions from net investment income reported above.
The Board may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net investment income and net short- and long-term capital gains.
Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. You can obtain the Fund's most recent periodic reports and other regulatory filings by contacting your financial advisor or visiting www.columbiathreadneedleus.com. These reports and other filings can also be found on the Securities and Exchange Commission's EDGAR Database. You should read these reports and other filings carefully before investing.
The Fund expects to receive all or some of its current income and gains from the following sources: (i) dividends received by the Fund that are paid on the equity and equity-related securities in its portfolio; and (ii) capital gains (short-term and long-term) from option premiums and the sale of portfolio securities. It is possible that the Fund’s distributions will at times exceed the earnings and profits of the Fund and therefore all or a portion of such distributions may constitute a return of capital as described below. A return of capital is a return of your original investment. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the Fund’s distribution policy.
Distributions that qualify as a return of capital are a return of some or all of your original investment in the Fund. A return of capital reduces a stockholder’s tax basis in his or her shares. Once the tax basis in your shares has been reduced to zero, any further return of capital may be taxable as capital gain. Shareholders should consult their tax advisor or tax attorney for proper treatment.
Distributions may be variable, and the Fund’s distribution rate will depend on a number of factors, including the net earnings on the Fund’s portfolio investments and the rate at which such net earnings change as a result of changes in the timing of, and rates at which, the Fund receives income from the sources noted above. As portfolio and market conditions change, the rate of distributions on the shares and the Fund’s distribution policy could change.
The Fund's use of derivatives introduces risks possibly greater than the risks associated with investing directly in the investments underlying the derivatives. A relatively small price movement in an underlying investment may result in a substantial gain or loss.
The Fund should only be considered as one element of a complete investment program. An investment in the Fund should be considered speculative. The Fund's investment policy of investing in technology and technology-related companies and writing call options involves a high degree of risk.
There is no assurance that the Fund will meet its investment objectives or that distributions will be made. You could lose some or all of your investment. In addition, closed-end funds frequently trade at a discount to their net asset values, which may increase your risk of loss.
The market prices of technology and technology-related stocks tend to exhibit a greater degree of market risk and price volatility than other types of investments. These stocks may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. These stocks also may be affected adversely by changes in technology, consumer and business purchasing patterns, government regulation and/or obsolete products or services. Technology and technology-related 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 is not insured by the FDIC, NCUA or any federal agency, is not a deposit or obligation of, or guaranteed by any financial institution, and involves investment risks including possible loss of principal and fluctuation in value.
Columbia Seligman Premium Technology Growth Fund is managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
All rights reserved.
© 2024 Columbia Management Investment Advisers, LLC
columbiathreadneedleus.com
Adtrax CTNA6384009.1-RUSH
TAX221_12_048_(02/24)
Dear Stockholder,
On May 21, 2024 (the Payment Date), pursuant to its managed distribution policy, Columbia Seligman Premium Technology Growth Fund, Inc. (NYSE: STK) (the Fund) paid a distribution in the amount of $0.4625 per share of common stock to stockholders of record on May 13, 2024, which is equal to a quarterly rate of 2.3125% (9.25% annualized) of the $20.00 offering price in the Fund’s initial public offering in November 2009. The second-quarter distribution of $0.4625 per share is equal to a quarterly rate of 1.4929% (5.97% annualized) of the Fund’s market price of $30.98 per share as of April 30, 2024.
Prior to the managed distribution policy, the Fund paid distributions pursuant to a level rate distribution policy. Under its former distribution policy and consistent with the Investment Company Act of 1940, as amended, the Fund could not distribute long-term capital gains, as defined in the Internal Revenue Code of 1986, more often than once in any one taxable year.
In October 2010, the Fund received exemptive relief from the Securities and Exchange Commission that permits the Fund to distribute long-term capital gains more often than once in any one taxable year. After consideration by the Fund’s Board, the Fund adopted the current managed distribution policy which allows the Fund to make distributions of long-term capital gains more than once in any taxable year.
The following table sets forth the estimated breakdown of the distribution noted above, on a per share basis, from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
0.00% |
$0.0000 |
|
Net Realized Long-Term Capital Gains |
100.00% |
$0.4625 |
|
Return of Capital or other Capital Source |
0.00% |
$0.0000 |
|
Total |
100.00% |
$0.4625 |
The following table sets forth the estimated breakdown, on a per share basis, of all distributions made by the Fund during the year-to-date period ended on the Payment Date of the above distribution (includes the distribution payment noted in the table above) from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.
|
|
|
|
|
Breakdown of All Distributions Paid Through
Year-To-Date Period Ended on the Payment Date of the Current Distribution |
|
Sources |
% |
US Dollar |
|
Net Investment Income |
0.00% |
$0.0000 |
|
Net Realized Short-Term Capital Gains |
0.00% |
$0.0000 |
|
Net Realized Long-Term Capital Gains |
100.00% |
$0.9250 |
|
Return of Capital or other Capital Source |
0.00% |
$0.0000 |
|
Total |
100.00% |
$0.9250 |
In certain years since the Fund’s inception, the Fund has distributed more than its income and net realized capital gains, which has resulted in Fund distributions substantially consisting of return of capital or other capital source. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” As of the payment date of the current distribution, all Fund distributions paid in 2024 (as estimated by the Fund based on current information) are from the earnings and profits of the Fund and not a return of capital. This could change during the remainder of the year, as further described below.
The amounts, sources and percentage breakdown of the distributions reported in this Notice are only estimates and are not being provided for, and should not be used for, tax reporting purposes. The actual amounts, sources and percentage breakdown of the distribution for tax reporting purposes, which may include return of capital, will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations.
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the 5-year period ended April 30, 2024, and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at April 30, 2024.
|
|
|
Average Annual Total NAV Return for the 5-year Period Ended April 30, 2024
|
16.73% |
|
Annualized Distribution Rate as a Percentage of April 30, 2024 NAV Price
(For the 5-year Period ended April 30, 2024) |
6.87%
|
The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the period since inception of Fund investment operations through the period noted and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at April 30, 2024. Average annual total return of a share of the Fund’s common stock at NAV for the period since inception of Fund investment operations through the period noted includes the 4.50% sales load assessed to IPO investors.
|
|
|
Average Annual Total NAV Return for the Period Since Inception of Investment
Operations (November 30, 2009) Through April 30, 2024
|
14.35% |
|
Annualized Distribution Rate as a Percentage of April 30, 2024 NAV Price
(For the Period Since Inception of Investment Operations (November 30, 2009) through April 30, 2024)
|
6.53%
|
The following table sets forth (i) the cumulative total return (at NAV) of a share of the Fund’s common stock for the year-to-date period ended April 30, 2024 and (ii) the Fund’s distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at April 30, 2024.
|
|
|
|
Cumulative Total NAV Return for the Year-to-Date Period Ended April 30, 2024
|
5.06% |
|
Distribution Rate as a Percentage of April 30, 2024 NAV Price
(For the Year-to-Date Period Ended April 30, 2024) |
1.54% |
Past performance does not guarantee future results.
You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions noted in the tables above or from the terms of the Fund’s distribution policy.
The Fund or your financial professional will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions on your US federal income tax return. For tax purposes, the Fund is required to report unrealized gains or losses on certain non-US investments as ordinary income or loss, respectively. Accordingly, the amount of the Fund’s total distributions that will be taxable as ordinary income may be different than the amount of the distributions from net investment income reported above.
The Board may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net investment income and net short- and long-term capital gains.
Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. You can obtain the Fund's most recent periodic reports and other regulatory filings by contacting your financial advisor or visiting www.columbiathreadneedleus.com. These reports and other filings can also be found on the Securities and Exchange Commission's EDGAR Database. You should read these reports and other filings carefully before investing.
The Fund expects to receive all or some of its current income and gains from the following sources: (i) dividends received by the Fund that are paid on the equity and equity-related securities in its portfolio; and (ii) capital gains (short-term and long-term) from option premiums and the sale of portfolio securities. It is possible that the Fund’s distributions will at times exceed the earnings and profits of the Fund and therefore all or a portion of such distributions may constitute a return of capital as described below. A return of capital is a return of your original investment. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the Fund’s distribution policy.
Distributions that qualify as a return of capital are a return of some or all of your original investment in the Fund. A return of capital reduces a stockholder’s tax basis in his or her shares. Once the tax basis in your shares has been reduced to zero, any further return of capital may be taxable as capital gain. Shareholders should consult their tax advisor or tax attorney for proper treatment.
Distributions may be variable, and the Fund’s distribution rate will depend on a number of factors, including the net earnings on the Fund’s portfolio investments and the rate at which such net earnings change as a result of changes in the timing of, and rates at which, the Fund receives income from the sources noted above. As portfolio and market conditions change, the rate of distributions on the shares and the Fund’s distribution policy could change.
The Fund's use of derivatives introduces risks possibly greater than the risks associated with investing directly in the investments underlying the derivatives. A relatively small price movement in an underlying investment may result in a substantial gain or loss.
The Fund should only be considered as one element of a complete investment program. An investment in the Fund should be considered speculative. The Fund's investment policy of investing in technology and technology-related companies and writing call options involves a high degree of risk.
There is no assurance that the Fund will meet its investment objectives or that distributions will be made. You could lose some or all of your investment. In addition, closed-end funds frequently trade at a discount to their net asset values, which may increase your risk of loss.
The market prices of technology and technology-related stocks tend to exhibit a greater degree of market risk and price volatility than other types of investments. These stocks may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. These stocks also may be affected adversely by changes in technology, consumer and business purchasing patterns, government regulation and/or obsolete products or services. Technology and technology-related 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 is not insured by the FDIC, NCUA or any federal agency, is not a deposit or obligation of, or guaranteed by any financial institution, and involves investment risks including possible loss of principal and fluctuation in value.
Columbia Seligman Premium Technology Growth Fund is managed by Columbia Management Investment Advisers, LLC.
Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.
All rights reserved.
© 2024 Columbia Management Investment Advisers, LLC
columbiathreadneedleus.com
Adtrax: CTNA6596171.1-RUSH
TAX221_12_049_(05/24)
Columbia Seligman Premiu... (NYSE:STK)
Historical Stock Chart
From Nov 2024 to Dec 2024
Columbia Seligman Premiu... (NYSE:STK)
Historical Stock Chart
From Dec 2023 to Dec 2024
