UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number811-22328
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: December 31, 2021
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.
Explanatory Note
On March 3, 2022, the undersigned registrant filed its Certified Shareholder Report on Form N-CSR for the annual period ended December 31, 2021. The registrant hereby amends the original filing Item 4.a Principal Accountant Fees and Services – Audit Fees to correct the prior year (2020) audit fee amount.
This amendment does not reflect events occurring after the filing of the original Certified Shareholder Report on Form N-CSR for the annual period ended December 31, 2021, and, other than supplementing Item 4 “Principal Accountant Fees and Services,” as stated above, does not modify or update the disclosures in the original Certified Shareholder Report on Form N-CSR in any way.
Item 1. Reports to Stockholders.
Annual Report
December 31, 2021
Columbia Seligman
Premium Technology Growth Fund, Inc.
Not Federally Insured • No
Financial Institution Guaranteed • May Lose Value
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 February 22, 2022) amounted to $0.4625
per share, which is equal to a quarterly rate of 1.3960% (5.58% annualized) of the Fund’s market price of $33.13 per share as of January 31, 2022. On January 18, 2022, the Fund also paid a special fourth quarter
distribution, beyond its typical quarterly managed distribution policy, in the amount of $1.2869 per share of common stock to stockholders of record on December 13, 2021. 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. | Annual Report 2021
Letter to the Stockholders
Dear Stockholders,
We are pleased to present the
annual stockholder report for Columbia Seligman Premium Technology Growth Fund, Inc. (the Fund). The report includes the Fund’s investment results, a discussion with the Fund’s portfolio managers, the
portfolio of investments and financial statements as of December 31, 2021.
The Fund’s common shares
(Common Stock) returned 39.38%, based on net asset value, and 48.96%, based on market price, for the 12 months ended December 31, 2021. In comparison, the Fund’s benchmark, the S&P North American Technology
Sector Index, returned 26.40% for the same time period.
During 2021, the Fund paid four
distributions in accordance with its managed distribution policy that aggregated to $1.85 per share of Common Stock of the Fund. On January 18, 2022, the Fund also paid a special fourth quarter distribution, beyond
its typical quarterly managed distribution policy, in the amount of $1.2869 per share of Common Stock to stockholders of record on December 13, 2021. The Fund has exemptive relief from the Securities and Exchange
Commission that permits the Fund to make periodic distributions of long-term capital gains more often than once in any one taxable year. Unless you elected otherwise, distributions were paid in additional shares of
the Fund.
The Board appointed Douglas A.
Hacker to the Fund’s Board. His service with the Fund began effective January 1, 2022 for a term expiring at the 2025 Annual Meeting of Stockholders. Mr. Hacker currently serves on the Board of Trustees of
the mutual funds and exchange-traded funds within the Columbia Funds Complex (the Columbia Funds Board) and, effective January 1, 2022, on the board of another Columbia closed-end fund.
Information about the Fund,
including daily pricing, current performance, Fund holdings, stockholder reports, distributions and other information can be found at columbiathreadneedleus.com/investor/ under the Closed-End Funds tab.
On behalf of the Board, I would
like to thank you for your continued support of Columbia Seligman Premium Technology Growth Fund, Inc.
Regards,
Catherine James Paglia
Chair of the BoardFor more information, go online to columbiathreadneedleus.com/investor/; or call American Stock Transfer & Trust Company, LLC, the Fund’s Stockholder Servicing 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 Seligman Premium Technology Growth Fund,
Inc. | Annual Report 2021
| 3
|
| 5
|
| 7
|
| 16
|
| 18
|
| 22
|
| 23
|
| 24
|
| 25
|
| 26
|
| 41
|
| 42
|
| 42
|
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 American Stock Transfer & Trust Company, LLC, the Fund’s Stockholder Servicing 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.
Fund investment manager
Columbia Management Investment Advisers, LLC (the
Investment Manager)
290 Congress Street
Boston, MA 02210
Fund transfer agent
American Stock Transfer & Trust Company,
LLC
6201 15th Avenue
Brooklyn, NY 11219
Columbia Seligman Premium Technology Growth Fund,
Inc. | Annual Report 2021
Investment objective
The Fund
seeks growth of capital and current income.
Portfolio management
Paul Wick
Lead Portfolio Manager
Managed Fund since 2009
Braj Agrawal
Co-Portfolio Manager
Managed Fund since 2010
Christopher Boova
Co-Portfolio Manager
Managed Fund since 2016
Jeetil Patel
Technology Team Member
Managed Fund since 2015
Vimal Patel
Technology Team Member
Managed Fund since 2018
Shekhar Pramanick
Technology Team Member
Managed Fund since 2018
Morningstar style boxTM
The Morningstar Style Box is based on a fund’s portfolio holdings. For equity funds, the vertical axis shows the market capitalization of the stocks owned, and the horizontal axis shows
investment style (value, blend, or growth). Information shown is based on the most recent data provided by Morningstar.
© 2022 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or
distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
| Average annual total returns (%) (for the period ended December 31, 2021)
|
|
|
| Inception
| 1 Year
| 5 Years
| 10 Years
|
| Market Price
| 11/24/09
| 48.96
| 26.97
| 21.39
|
| Net Asset Value
| 11/30/09
| 39.38
| 27.19
| 19.78
|
| S&P North American Technology Sector Index
|
| 26.40
| 29.99
| 23.54
|
The performance information shown
represents past performance and is not a guarantee of future results. The investment return and principal value of your investment will fluctuate so that your shares, when sold, may be worth more or less than their
original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting
columbiathreadneedleus.com/investor/.
Returns reflect changes in market
price or net asset value, as applicable, and assume reinvestment of distributions. Returns do not reflect the deduction of taxes that investors may pay on distributions or the sale of shares.
The S&P North American
Technology Sector Index is an unmanaged modified capitalization-weighted index based on a universe of technology-related stocks.
Indices are not available for
investment, are not professionally managed and do not reflect sales charges, fees, brokerage commissions, taxes or other expenses of investing. Securities in the Fund may not match those in an index.
Fund performance may be significantly
negatively impacted by the economic impact of the COVID-19 pandemic. The COVID-19 pandemic has adversely impacted economies and capital markets around the world in ways that will likely continue and may change in
unforeseen ways for an indeterminate period. The COVID-19 pandemic may exacerbate pre-existing political, social and economic risks in certain countries and globally.
| Price Per Share
|
|
| December 31, 2021
| September 30, 2021
| June 30, 2021
| March 31, 2021
|
| Market Price ($)
| 37.01
| 32.97
| 35.51
| 31.24
|
| Net Asset Value ($)
| 35.42
| 32.43
| 33.74
| 31.12
|
| Distributions Paid Per Common Share
|
| Payable Date
| Per Share Amount ($)
|
| February 23, 2021
| 0.4625
|
| May 25, 2021
| 0.4625
|
| August 24, 2021
| 0.4625
|
| November 23, 2021
| 0.4625
|
| January 18, 2022
| 1.2869(a)
|
(a) The Fund paid this special
2021 fourth quarter distribution beyond its typical quarterly managed distribution policy to stockholders of record on December 13, 2021.
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.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 3
|
Fund at a Glance (continued)
Performance of a hypothetical $10,000 investment (December 31, 2011 — December 31, 2021)
The chart above shows the change in
value of a hypothetical $10,000 investment in Columbia Seligman Premium Technology Growth Fund, Inc. during the stated time period, and does not reflect the deduction of taxes that a shareholder may pay on Fund
distributions or on the sale of Fund shares.
| Portfolio breakdown (%) (at December 31, 2021)
|
| Common Stocks
| 97.9
|
| Money Market Funds
| 2.1
|
| Total
| 100.0
|
Percentages indicated are based
upon total investments excluding investments in derivatives, if any. The Fund’s portfolio composition is subject to change.
| Equity sector breakdown (%) (at December 31, 2021)
|
| Communication Services
| 9.4
|
| Consumer Discretionary
| 2.3
|
| Health Care
| 0.1
|
| Industrials
| 2.1
|
| Information Technology
| 86.1
|
| Total
| 100.0
|
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| Equity sub-industry breakdown (%) (at December 31, 2021)
|
| Information Technology
|
|
| Application Software
| 9.0
|
| Communications Equipment
| 6.1
|
| Data Processing & Outsourced Services
| 4.0
|
| Electronic Equipment & Instruments
| 1.4
|
| Internet Services & Infrastructure
| 1.6
|
| IT Consulting & Other Services
| 0.8
|
| Semiconductor Equipment
| 15.1
|
| Semiconductors
| 23.5
|
| Systems Software
| 12.3
|
| Technology Hardware, Storage & Peripherals
| 12.3
|
| Total
| 86.1
|
Percentages indicated are based
upon total equity investments. The Fund’s portfolio composition is subject to change.
| 4
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Manager Discussion of Fund Performance
For the 12-month period that ended
December 31, 2021, shares of the Fund returned 48.96% at market price and 39.38% at net asset value. The Fund significantly outperformed its benchmark, the S&P North American Technology Sector Index, which
returned 26.40% for the same time period.
Market overview
U.S. equities displayed
remarkable resilience during the year, finishing with a solid gain despite a number of potential headwinds. Investors had to contend with the emergence of the Omicron variant of COVID-19, which was contagious enough
to raise concerns that a new wave of lockdowns could be necessary. The markets also faced a major shift in U.S. Federal Reserve policy. Whereas the Fed had previously viewed rising inflation as a transitory
development, continued price pressures caused the central bank to announce the tapering of its stimulative quantitative easing program. In addition, it began to prepare the financial markets for the likelihood of
multiple interest rate increases in 2022. The failure of the Build Back Better bill removed a source of anticipated fiscal stimulus. Nevertheless, most major U.S. indices closed the year at or near their all-time
highs on the strength of robust investment inflows and the lack of compelling total return potential in bonds.
In a continuation of a
long-standing trend, mega-cap technology-related stocks were the key drivers of market performance. In contrast, smaller companies managed only narrow gains. While the large-cap Russell 1000 Index rose 26.45% in 2021,
the small-cap Russell 2000 Index advanced 14.82%. The ongoing dominance of technology stocks also led to outperformance for the growth style within the large-cap space. The Russell 1000 Growth Index returned 27.60%
for the year, outpacing the 25.16% gain for the Russell 1000 Value Index. However, this trend did not hold with regard to smaller cap stocks, as the value style outperformed growth by a wide margin, with the Russell
2000 Value Index returning 28.27% and the Russell 2000 Growth Index returning 2.83% for the year.
Within the benchmark,
the semiconductors & semiconductor equipment, communications equipment, communication services, interactive media & services and technology hardware storage & peripherals industries outperformed while
the IT services, internet & direct marketing retail and software industries lagged for the reporting period.
The Fund’s notable
contributors during the period
| •
| The Fund’s significant outperformance of the benchmark during the period was driven by strong stock selection, most notably within the semiconductors & semiconductor equipment and software industries.
|
| •
| Top individual contributors included:
|
| ○
| Internet of Things (IoT) chip company Synaptics, Inc. was a top contributor after executing a turnaround over the past two years under the guidance of CEO Michael Hurlston. The company once known for touchpads and
other interface components for PCs and mobile phones jettisoned its smartphone centric fingerprint sensor and LCD touch / display drive IC (integrated circuit) businesses while making strategic acquisitions in video
and wireless connectivity and PC docking station technology which significantly boosted margins and profit growth. In 2021, the company consistently beat earnings expectations and the stock responded in
kind.
|
| ○
| Top holdings in semi-cap equipment companies Lam Research Corp. and Applied Materials, Inc. contributed meaningfully to returns during the period. The global semiconductor shortage highlights the fact that the
industry needs to add capacity to inevitably boost supply. Our investments in semiconductor capital equipment companies have benefited from this pressing need.
|
| ○
| Within software, cybersecurity holdings Fortinet, Inc. and Palo Alto Networks, Inc. benefited from strong demand for protection against hackers and ransomware.
|
| •
| Allocation decisions were also positive. The Fund’s sizable overweight to the semiconductor & semiconductor equipment industry, the strongest performing area of the benchmark, boosted relative results. An
overweight to communications equipment was also additive, as was the Fund’s underweight to the poor-performing IT services industry and the consumer discretionary sector.
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 5
|
Manager Discussion of Fund Performance (continued)
The Fund’s notable
detractors during the period
| •
| The largest area of detraction for the Fund during the period came from the industrials sector. Overall, the sector was one of the bottom performing areas of the benchmark and the Fund’s overweight weighed on
relative performance.
|
| •
| The electronic equipment instruments and components industry was another area of underperformance for the Fund, both on an absolute and relative basis.
|
| •
| Microsoft Corp. continued to perform well due to high demand for its cloud-based offering Azure and strength in the company’s Office360 suite of products. Microsoft represents a large weighting in the
benchmark and the portfolio’s relative underweight detracted from relative returns.
|
| •
| In the industrials sector, an out-of-benchmark holding in Bloom Energy Corp. underperformed, along with other Alternative Energy stocks, despite having signed a multi-year, $4.5 billion contract to supply SK Group
of Korea with fuel cells.
|
| •
| Software holding Cerence Inc. detracted during the period. The company has seen a lull in its business due to the supply shortage induced problems in the auto industry.
|
| •
| Not owning semiconductor company NVIDIA Corp. on valuation concerns hurt relative performance as the stock rallied on strong results from the company’s gaming business as
customers upgraded to its latest graphics cards.
|
Call options contributed to
returns
| •
| Although there were strong results for technology stocks, especially in November 2021, and relatively constant volatility for both technology and technology-related stocks, the Fund’s call option writing
strategy added to returns.
|
The views expressed in this report
reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, so actual outcomes and
results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update
such views. These views may not be relied on as investment advice and, because investment decisions for a Columbia fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf
of any particular Columbia fund. References to specific securities should not be construed as a recommendation or investment advice.
| 6
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
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:
| When the VXN Index is:
| Aggregate Notional Amount of
Written Call Options as a
Percentage of the Fund’s
Holdings in Common Stocks
|
| 17 or less
| 25%
|
| Greater than 17, but less than 18
| Increase up to 50%
|
| At least 18, but less than 33
| 50%
|
| At least 33, but less than 34
| Increase up to 90%
|
| At least 34, but less than 55
| 90%
|
| At 55 or greater
| 0% to 90%
|
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.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 7
|
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.
|
“Managed Assets” means
the net asset value of the Fund’s outstanding common stock plus any liquidation preference of any issued and outstanding Fund preferred stock and the principal amount of any borrowings used for leverage.
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 explains the flexibility that the Fund gains from these exceptions.
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
| 8
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Fund Investment Objective, Strategies,
Policies and Principal Risks (continued)
(Unaudited)
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 stock 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.
Principal Risks
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. 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.
Credit Risk. Credit risk is the risk that the value of debt instruments may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be
unable or unwilling, to honor its financial obligations, such as making payments to the Fund when due. Various factors could affect the actual or perceived willingness or ability of the issuer to make timely interest
or principal payments, including changes in the financial condition of the issuer or in general economic conditions. Credit rating agencies, such as S&P Global Ratings, Moody’s, Fitch, DBRS and KBRA, (as
applicable), assign credit ratings to certain debt instruments to indicate their credit risk. A rating downgrade by such agencies can negatively impact the value of such instruments. Lower rated or unrated instruments
held by the Fund may present increased credit risk as compared to higher-rated instruments. Non-investment grade debt instruments may be subject to greater price fluctuations and are more likely to experience a
default than investment grade debt instruments and therefore may expose the Fund to increased credit risk. If the Fund purchases unrated instruments, or if the ratings of instruments held by the Fund are lowered after
purchase, the Fund will depend on analysis of credit risk more heavily than usual.
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
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 9
|
Fund Investment Objective, Strategies,
Policies and Principal Risks (continued)
(Unaudited)
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.
Emerging Market Securities
Risk. Securities issued by foreign governments or companies in emerging market countries, such as China, Russia and certain countries in Eastern Europe, the Middle East, Asia,
Latin America or Africa, are more likely to have greater exposure to the risks of investing in foreign securities that are described in Foreign Securities Risk. In addition, emerging market countries are more likely
to experience instability resulting, for example, from rapid changes or developments in social, political, economic or other conditions. Their economies are usually less mature and their securities markets are
typically less developed with more limited trading activity (i.e., lower trading volumes and less liquidity) than more developed countries. Emerging market securities tend to be more volatile, and may be more
susceptible to market manipulation, than securities in more developed markets. Many emerging market countries are heavily dependent on international trade and have fewer trading partners, which makes them more
sensitive to world commodity prices and economic downturns in other countries. Some emerging market countries have a higher risk of currency devaluations, and some of these countries may experience periods of high
inflation or rapid changes in inflation rates and may have hostile relations with other countries. Due to the differences in the nature and quality of financial information of issuers of emerging market securities,
including auditing and financial reporting standards, financial information and disclosures about such issuers may be unavailable or, if made available, may be considerably less reliable than publicly available
information about other foreign securities.
Foreign Securities Risk. Investments in or exposure to foreign companies involve certain risks not associated with 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 default
with respect to certain foreign securities, including those issued by foreign governments. In addition, foreign
| 10
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Fund Investment Objective, Strategies,
Policies and Principal Risks (continued)
(Unaudited)
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, war, 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.
High-Yield Investments Risk. Securities and other debt instruments held by the Fund that are rated below investment grade (commonly called “high-yield” or “junk” bonds) and
unrated debt instruments of comparable quality tend to be more sensitive to credit risk than higher-rated debt instruments and may experience greater price fluctuations in response to perceived changes in the ability
of the issuing entity or obligor to pay interest and principal when due than to changes in interest rates. These investments are generally more likely to experience a default than higher-rated debt instruments.
High-yield debt instruments are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal. These debt instruments typically pay a premium – a
higher interest rate or yield – because of the increased risk of loss, including default. High-yield debt instruments may require a greater degree of judgment to establish a price, may be difficult to sell at
the time and price the Fund desires, may carry high transaction costs, and also are generally less liquid than higher-rated debt instruments. The ratings provided by third party rating agencies are based on analyses
by these ratings agencies of the credit quality of the debt instruments and may not take into account every risk related to whether interest or principal will be timely repaid. In adverse economic and other
circumstances, issuers of lower-rated debt instruments are more likely to have difficulty making principal and interest payments than issuers of higher-rated debt instruments.
Interest Rate Risk. Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt instruments tend to
fall, and if interest rates fall, the values of debt instruments tend to rise. Changes in the value of a debt instrument usually will not affect the amount of income the Fund receives from it but will
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 11
|
Fund Investment Objective, Strategies,
Policies and Principal Risks (continued)
(Unaudited)
generally affect the value of your investment in
the Fund. Changes in interest rates may also affect the liquidity of the Fund’s investments in debt instruments. In general, the longer the maturity or duration of a debt instrument, the greater its sensitivity
to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk (the risk that the Fund will have to reinvest the money received
in securities that have lower yields). Very low or negative interest rates may impact the Fund’s yield and may increase the risk that, if followed by rising interest rates, the Fund’s performance will be
negatively impacted. The Fund is subject to the risk that the income generated by its investments may not keep pace with inflation. Actions by governments and central banking authorities can result in increases or
decreases in interest rates. Higher periods of inflation could lead such authorities to raise interest rates. Such actions may negatively affect the value of debt instruments held by the Fund, resulting in a negative
impact on the Fund’s performance and NAV. Any interest rate increases could cause the value of the Fund’s investments in debt instruments to decrease. Rising interest rates may prompt redemptions from the
Fund, which may force the Fund to sell investments at a time when it is not advantageous to do so, which could result in losses.
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, war, terrorism, disease/virus outbreaks, epidemics or other events, conditions and factors which may impair the
value of an investment in the Fund.
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, 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.
Leverage Risk. Leverage occurs when the Fund increases its assets available for investment using borrowing, derivatives, or similar instruments or techniques. Use of leverage can
produce volatility and may exaggerate changes in the NAV of Fund shares and in the return on the Fund’s portfolio, which may increase the risk that the Fund will lose more than it has invested. The use of
leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation or position coverage requirements. Futures
contracts, options, forward contracts and other derivatives can allow the Fund to obtain large investment exposures in return for meeting relatively small margin requirements. As a result, investments in those
transactions may be highly leveraged. If the Fund uses leverage, through the purchase of particular instruments such as derivatives, the Fund may experience capital losses that exceed the net assets of the Fund.
Leverage can create an interest expense that may lower the Fund’s overall returns. Leverage presents the opportunity for increased net income and capital gains, but may also exaggerate the Fund’s
volatility and risk of loss. There can be no guarantee that a leveraging strategy will be successful.
| 12
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Fund Investment Objective, Strategies,
Policies and Principal Risks (continued)
(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, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and
closed markets, significant redemptions and 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, 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.
The coronavirus disease 2019 and
its variants (COVID-19) pandemic has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access, resource availability,
facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions, workforce displacement
and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken by governmental
authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness outbreaks, epidemics and
pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness outbreaks and epidemics in
emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing
political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a timely manner and negatively
impact the Fund’s ability to achieve its investment objective. Any such events could have a significant adverse impact on the value and risk profile of the Fund.
Non-Diversified Fund Risk. The Fund is non-diversified, which generally means that it will 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”). 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 may invest in private placements determined to be liquid as well as those determined to be illiquid. Even if
determined to be liquid, 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.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 13
|
Fund Investment Objective, Strategies,
Policies and Principal Risks (continued)
(Unaudited)
Sector Risk. At times, the Fund may have a significant portion of its assets invested in securities of companies conducting business 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 more vulnerable to unfavorable
developments in that sector than funds that invest more broadly. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Information Technology Sector. The Fund is more susceptible to the particular risks that may affect companies in the information technology sector than if it were invested in a wider variety of
companies in unrelated sectors. 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.
Semiconductors and Semiconductor
Equipment Industry Risk. The Fund has a significant portion of its assets invested in securities of companies conducting business within the semiconductors and semiconductor equipment industry,
which is included within the Information Technology sector. Companies in the same or related industries may be similarly affected by economic, regulatory, political or market events or conditions, which may make the
Fund more vulnerable to unfavorable developments than funds that invest more broadly. Generally, the more broadly a fund invests, the more it spreads risk and potentially reduces the risks of loss and
volatility.
The Fund is sensitive to, and its
performance may depend to a greater extent on, the overall condition of the semiconductor and semiconductor equipment industry. The risks of investments in this industry include: 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.
The industry may also be affected
by risks that affect the broader technology sector, including: government regulation, dramatic and often unpredictable changes in growth rates and competition for qualified personnel, a small number of companies
representing a large portion of the technology semiconductor industry as a whole, cyclical market patterns, significant product price erosion hampering company profits, periods of over-capacity and production
shortages, changing demand, variations in manufacturing costs and yields and significant expenditures for capital equipment and product development.
| 14
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Fund Investment Objective, Strategies,
Policies and Principal Risks (continued)
(Unaudited)
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 the London Interbank Offered Rate (commonly known as LIBOR)) 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 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 October 2020, the SEC adopted new regulations governing the use of derivatives by registered investment companies. Once effective, Rule 18f-4 will, among other things,
require funds that invest in derivative instruments beyond a specified limited amount to apply a value-at-risk-based limit to their use of certain derivative instruments and establish a comprehensive derivatives risk
management program. A fund that uses derivative instruments in a limited amount will not be subject to the full requirements of Rule 18f-4. Compliance with Rule 18f-4 will not be required until August 2022. Rule 18f-4
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. | Annual Report 2021
| 15
|
Fees and Expenses and Share Price Data
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 Stock. 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
|
| Dividend investment plan
| None(a)
|
| Annual Expenses (as a percentage of net asset attributable to common shares)
|
| Management fees(b)
| 1.06%
|
| Other expenses
| 0.07%
|
| Acquired fund fees and expenses
| 0.00%
|
| Total Annual Expenses(c)
| 1.13%
|
| (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.
|
Example
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:
|
| 1 year
| 3 years
| 5 years
| 10 years
|
| Columbia Seligman Premium Technology Growth Fund, Inc. Common Stock
| $115
| $359
| $622
| $1,375
|
The purpose of the tables above is
to assist you in understanding the various costs and expenses you will bear directly or indirectly.
Share Price Data
The Fund’s Common Stock is
traded primarily on the New York Stock Exchange (the Exchange). The following table shows the high and low closing prices of the Fund’s Common Stock on the Exchange for each calendar quarter since the beginning
of 2020, as well as the net asset values and the range of the percentage (discounts)/premiums to net asset value per share that correspond to such prices.
| 16
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Fees and Expenses and Share Price Data (continued)
|
| Market Price ($)
| Corresponding NAV ($)
| Corresponding (Discount)/Premium to NAV (%)
|
|
| High
| Low
| High
| Low
| High
| Low
|
| 2020
|
|
|
|
|
|
|
| 1st Quarter
| 25.25
| 14.44
| 24.69
| 15.42
| 2.27
| (6.36)
|
| 2nd Quarter
| 23.37
| 16.18
| 21.01
| 17.28
| 11.23
| (6.37)
|
| 3rd Quarter
| 23.33
| 21.09
| 22.31
| 21.35
| 4.57
| (1.22)
|
| 4th Quarter
| 27.63
| 21.33
| 27.41
| 21.91
| 0.80
| (2.65)
|
| 2021
|
|
|
|
|
|
|
| 1st Quarter
| 31.45
| 26.67
| 31.75
| 28.10
| (0.94)
| (5.09)
|
| 2nd Quarter
| 35.94
| 31.05
| 33.83
| 29.82
| 6.24
| 4.12
|
| 3rd Quarter
| 35.33
| 32.60
| 33.69
| 32.17
| 4.87
| 1.34
|
| 4th Quarter
| 39.07
| 32.10
| 35.81
| 31.86
| 9.10
| 0.75
|
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 December 31, 2021 were $37.01, $35.42, and 4.49%, respectively.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 17
|
Portfolio of Investments
December 31, 2021
(Percentages represent value of
investments compared to net assets)
Investments in securities
| Common Stocks 102.1%
|
| Issuer
| Shares
| Value ($)
|
| Communication Services 9.6%
|
| Broadcasting 1.8%
|
| Discovery, Inc., Class C(a)
| 147,632
| 3,380,773
|
| Fox Corp., Class A
| 183,200
| 6,760,080
|
| Total Broadcasting
| 10,140,853
|
| Cable & Satellite 0.4%
|
| Comcast Corp., Class A
| 48,825
| 2,457,362
|
| Total Cable & Satellite
| 2,457,362
|
| Interactive Home Entertainment 0.9%
|
| Activision Blizzard, Inc.
| 74,682
| 4,968,593
|
| Total Interactive Home Entertainment
| 4,968,593
|
| Interactive Media & Services 6.4%
|
| Alphabet, Inc., Class A(a)
| 7,341
| 21,267,171
|
| Alphabet, Inc., Class C(a)
| 4,785
| 13,845,828
|
| Twitter, Inc.(a)
| 22,500
| 972,450
|
| Total Interactive Media & Services
| 36,085,449
|
| Wireless Telecommunication Services 0.1%
|
| T-Mobile USA, Inc.(a)
| 3,500
| 405,930
|
| Total Wireless Telecommunication Services
| 405,930
|
| Total Communication Services
| 54,058,187
|
| Consumer Discretionary 2.4%
|
| Education Services 0.1%
|
| Udemy, Inc.(a)
| 19,061
| 372,452
|
| Total Education Services
| 372,452
|
| Internet & Direct Marketing Retail 2.3%
|
| eBay, Inc.
| 195,829
| 13,022,628
|
| Total Internet & Direct Marketing Retail
| 13,022,628
|
| Total Consumer Discretionary
| 13,395,080
|
| Health Care 0.1%
|
| Biotechnology 0.1%
|
| Eiger BioPharmaceuticals, Inc.(a)
| 112,861
| 585,749
|
| Total Biotechnology
| 585,749
|
| Total Health Care
| 585,749
|
| Industrials 2.1%
|
| Heavy Electrical Equipment 1.9%
|
| Bloom Energy Corp., Class A(a)
| 484,201
| 10,618,528
|
| Total Heavy Electrical Equipment
| 10,618,528
|
| Common Stocks (continued)
|
| Issuer
| Shares
| Value ($)
|
| Human Resource & Employment Services 0.2%
|
| HireRight Holdings Corp.(a)
| 76,595
| 1,225,520
|
| Total Human Resource & Employment Services
| 1,225,520
|
| Total Industrials
| 11,844,048
|
| Information Technology 87.9%
|
| Application Software 9.2%
|
| Cerence, Inc.(a)
| 70,392
| 5,394,843
|
| Cognyte Software Ltd.(a)
| 31,024
| 486,146
|
| Dropbox, Inc., Class A(a)
| 443,135
| 10,874,533
|
| Enfusion, Inc., Class A(a)
| 29,471
| 617,123
|
| Intapp, Inc.(a)
| 20,763
| 522,397
|
| Salesforce.com, Inc.(a)
| 19,200
| 4,879,296
|
| Samsara, Inc., Class A(a)
| 182,826
| 5,139,239
|
| Splunk, Inc.(a)
| 7,100
| 821,612
|
| Synopsys, Inc.(a)
| 53,902
| 19,862,887
|
| Verint Systems, Inc.(a)
| 25,368
| 1,332,073
|
| Zendesk, Inc.(a)
| 20,100
| 2,096,229
|
| Total Application Software
| 52,026,378
|
| Communications Equipment 6.2%
|
| Arista Networks, Inc.(a)
| 26,644
| 3,830,075
|
| Cisco Systems, Inc.
| 54,500
| 3,453,665
|
| F5, Inc.(a)
| 37,800
| 9,250,038
|
| Lumentum Holdings, Inc.(a)
| 78,650
| 8,318,811
|
| Plantronics, Inc.(a)
| 213,242
| 6,256,520
|
| Telefonaktiebolaget LM Ericsson, ADR
| 352,600
| 3,832,762
|
| Total Communications Equipment
| 34,941,871
|
| Data Processing & Outsourced Services 4.1%
|
| Fidelity National Information Services, Inc.
| 39,300
| 4,289,595
|
| Fiserv, Inc.(a)
| 47,476
| 4,927,534
|
| Pagseguro Digital Ltd., Class A(a)
| 63,241
| 1,658,179
|
| Visa, Inc., Class A
| 57,625
| 12,487,914
|
| Total Data Processing & Outsourced Services
| 23,363,222
|
| Electronic Equipment & Instruments 1.4%
|
| Advanced Energy Industries, Inc.
| 86,025
| 7,833,437
|
| Total Electronic Equipment & Instruments
| 7,833,437
|
The accompanying Notes to Financial
Statements are an integral part of this statement.
| 18
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Portfolio of Investments (continued)
December 31, 2021
| Common Stocks (continued)
|
| Issuer
| Shares
| Value ($)
|
| Internet Services & Infrastructure 1.6%
|
| GoDaddy, Inc., Class A(a)
| 107,785
| 9,146,635
|
| Total Internet Services & Infrastructure
| 9,146,635
|
| IT Consulting & Other Services 0.8%
|
| DXC Technology Co.(a)
| 66,600
| 2,143,854
|
| Thoughtworks Holding, Inc.(a)
| 93,803
| 2,514,858
|
| Total IT Consulting & Other Services
| 4,658,712
|
| Semiconductor Equipment 15.4%
|
| Applied Materials, Inc.
| 131,586
| 20,706,373
|
| Lam Research Corp.(b)
| 55,172
| 39,676,944
|
| Teradyne, Inc.(b)
| 162,707
| 26,607,476
|
| Total Semiconductor Equipment
| 86,990,793
|
| Semiconductors 24.0%
|
| Analog Devices, Inc.
| 76,494
| 13,445,350
|
| Broadcom, Inc.(b)
| 32,325
| 21,509,378
|
| GlobalFoundries, Inc.(a)
| 77,115
| 5,010,162
|
| Intel Corp.
| 81,416
| 4,192,924
|
| Marvell Technology, Inc.
| 187,522
| 16,406,300
|
| Microchip Technology, Inc.
| 63,800
| 5,554,428
|
| Micron Technology, Inc.
| 143,560
| 13,372,614
|
| NXP Semiconductors NV
| 33,800
| 7,698,964
|
| Qorvo, Inc.(a)
| 54,875
| 8,581,901
|
| Rambus, Inc.(a)
| 107,100
| 3,147,669
|
| Renesas Electronics Corp.(a)
| 433,200
| 5,380,649
|
| SMART Global Holdings, Inc.(a)
| 63,945
| 4,539,456
|
| Synaptics, Inc.(a)
| 92,345
| 26,734,801
|
| Total Semiconductors
| 135,574,596
|
| Systems Software 12.6%
|
| Fortinet, Inc.(a)
| 29,844
| 10,725,934
|
| McAfee Corp., Class A
| 47,675
| 1,229,538
|
| Microsoft Corp.
| 60,200
| 20,246,464
|
| NortonLifeLock, Inc.
| 363,848
| 9,452,771
|
| Common Stocks (continued)
|
| Issuer
| Shares
| Value ($)
|
| Oracle Corp.
| 56,100
| 4,892,481
|
| Palo Alto Networks, Inc.(a)
| 19,061
| 10,612,402
|
| SailPoint Technologies Holdings, Inc.(a)
| 36,319
| 1,755,661
|
| Tenable Holdings, Inc.(a)
| 29,200
| 1,608,044
|
| VMware, Inc., Class A
| 33,573
| 3,890,439
|
| Xperi Holding Corp.
| 345,888
| 6,540,742
|
| Total Systems Software
| 70,954,476
|
| Technology Hardware, Storage & Peripherals 12.6%
|
| Apple, Inc.(b)
| 172,000
| 30,542,040
|
| Dell Technologies, Inc.(a)
| 89,479
| 5,026,036
|
| HP, Inc.
| 272,757
| 10,274,756
|
| NetApp, Inc.
| 110,659
| 10,179,521
|
| Western Digital Corp.(a)
| 226,949
| 14,799,344
|
| Total Technology Hardware, Storage & Peripherals
| 70,821,697
|
| Total Information Technology
| 496,311,817
|
Total Common Stocks
(Cost: $254,517,700)
| 576,194,881
|
|
|
| Money Market Funds 2.2%
|
|
| Shares
| Value ($)
|
| Columbia Short-Term Cash Fund, 0.085%(c),(d)
| 12,270,595
| 12,268,140
|
Total Money Market Funds
(Cost: $12,268,648)
| 12,268,140
|
Total Investments in Securities
(Cost $266,786,348)
| 588,463,021
|
| Other Assets & Liabilities, Net
|
| (24,242,941)
|
| Net Assets
| $564,220,080
|
At December 31, 2021,
securities and/or cash totaling $92,152,850 were pledged as collateral.
Investments in
derivatives
| Call option contracts written
|
| Description
| Counterparty
| Trading
currency
| Notional
amount
| Number of
contracts
| Exercise
price/Rate
| Expiration
date
| Premium
received ($)
| Value ($)
|
| NASDAQ 100 Index
| Morgan Stanley
| USD
| (288,865,416)
| (177)
| 16,450.00
| 1/21/2022
| (1,958,646)
| (3,473,625)
|
The accompanying Notes to Financial Statements are
an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 19
|
Portfolio of Investments (continued)
December 31, 2021
Notes to Portfolio of
Investments
| (a)
| Non-income producing investment.
|
| (b)
| This security or a portion of this security has been pledged as collateral in connection with derivative contracts.
|
| (c)
| The rate shown is the seven-day current annualized yield at December 31, 2021.
|
| (d)
| As defined in the Investment Company Act of 1940, as amended, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a
company which is under common ownership or control with the Fund. The value of the holdings and transactions in these affiliated companies during the year ended December 31, 2021 are as follows:
|
| Affiliated issuers
| Beginning
of period($)
| Purchases($)
| Sales($)
| Net change in
unrealized
appreciation
(depreciation)($)
| End of
period($)
| Realized gain
(loss)($)
| Dividends($)
| End of
period shares
|
| Columbia Short-Term Cash Fund, 0.085%
|
|
| 9,894,909
| 103,477,001
| (101,103,262)
| (508)
| 12,268,140
| (659)
| 5,626
| 12,270,595
|
Abbreviation Legend
| ADR
| American Depositary Receipt
|
Currency Legend
Fair value measurements
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.
Under the direction of the
Fund’s Board of Directors (the Board), the Investment Manager’s Valuation Committee (the Committee) is responsible for overseeing the 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 control 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. The Committee reports to the Board, with members
of the Committee meeting with 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.
| 20
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Portfolio of Investments (continued)
December 31, 2021
Fair value measurements (continued)
The following table is a summary of the inputs used to value the Fund’s investments at December 31, 2021:
|
| Level 1 ($)
| Level 2 ($)
| Level 3 ($)
| Total ($)
|
| Investments in Securities
|
|
|
|
|
| Common Stocks
|
|
|
|
|
| Communication Services
| 54,058,187
| —
| —
| 54,058,187
|
| Consumer Discretionary
| 13,395,080
| —
| —
| 13,395,080
|
| Health Care
| 585,749
| —
| —
| 585,749
|
| Industrials
| 11,844,048
| —
| —
| 11,844,048
|
| Information Technology
| 490,931,168
| 5,380,649
| —
| 496,311,817
|
| Total Common Stocks
| 570,814,232
| 5,380,649
| —
| 576,194,881
|
| Money Market Funds
| 12,268,140
| —
| —
| 12,268,140
|
| Total Investments in Securities
| 583,082,372
| 5,380,649
| —
| 588,463,021
|
| Investments in Derivatives
|
|
|
|
|
| Liability
|
|
|
|
|
| Options Contracts Written
| (3,473,625)
| —
| —
| (3,473,625)
|
| Total
| 579,608,747
| 5,380,649
| —
| 584,989,396
|
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. | Annual Report 2021
| 21
|
Statement of Assets and Liabilities
December 31, 2021
| Assets
|
|
| Investments in securities, at value
|
|
| Unaffiliated issuers (cost $254,517,700)
| $576,194,881
|
| Affiliated issuers (cost $12,268,648)
| 12,268,140
|
| Cash
| 102,500
|
| Receivable for:
|
|
| Investments sold
| 359,141
|
| Dividends
| 182,669
|
| Foreign tax reclaims
| 13,301
|
| Prepaid expenses
| 38,816
|
| Total assets
| 589,159,448
|
| Liabilities
|
|
| Option contracts written, at value (premiums received $1,958,646)
| 3,473,625
|
| Payable for:
|
|
| Investments purchased
| 755,526
|
| Distributions to shareholders
| 20,499,735
|
| Management services fees
| 16,403
|
| Stockholder servicing and transfer agent fees
| 528
|
| Compensation of board members
| 148,413
|
| Stockholders’ meeting fees
| 1,183
|
| Compensation of chief compliance officer
| 98
|
| Other expenses
| 43,857
|
| Total liabilities
| 24,939,368
|
| Net assets applicable to outstanding Common Stock
| $564,220,080
|
| Represented by
|
|
| Paid in capital
| 218,876,827
|
| Total distributable earnings (loss)
| 345,343,253
|
| Total - representing net assets applicable to outstanding Common Stock
| $564,220,080
|
| Shares outstanding applicable to Common Stock
| 15,929,548
|
| Net asset value per share of outstanding Common Stock
| $35.42
|
| Market price per share of Common Stock
| $37.01
|
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 22
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Statement of Operations
Year Ended December 31, 2021
| Net investment income
|
|
| Income:
|
|
| Dividends — unaffiliated issuers
| $4,949,593
|
| Dividends — affiliated issuers
| 5,626
|
| Foreign taxes withheld
| (23,339)
|
| Total income
| 4,931,880
|
| Expenses:
|
|
| Management services fees
| 5,496,087
|
| Stockholder servicing and transfer agent fees
| 17,376
|
| Compensation of board members
| 55,524
|
| Custodian fees
| 18,681
|
| Printing and postage fees
| 63,778
|
| Stockholders’ meeting fees
| 40,393
|
| Audit fees
| 50,280
|
| Legal fees
| 5,727
|
| Compensation of chief compliance officer
| 105
|
| Other
| 114,091
|
| Total expenses
| 5,862,042
|
| Net investment loss
| (930,162)
|
| Realized and unrealized gain (loss) — net
|
|
| Net realized gain (loss) on:
|
|
| Investments — unaffiliated issuers
| 71,903,687
|
| Investments — affiliated issuers
| (659)
|
| Foreign currency translations
| (1,055)
|
| Options purchased
| 131,960
|
| Options contracts written
| 2,241,928
|
| Net realized gain
| 74,275,861
|
| Net change in unrealized appreciation (depreciation) on:
|
|
| Investments — unaffiliated issuers
| 98,720,322
|
| Investments — affiliated issuers
| (508)
|
| Foreign currency translations
| (548)
|
| Options purchased
| (9,434)
|
| Options contracts written
| (1,757,650)
|
| Net change in unrealized appreciation (depreciation)
| 96,952,182
|
| Net realized and unrealized gain
| 171,228,043
|
| Net increase in net assets resulting from operations
| $170,297,881
|
The accompanying Notes to
Financial Statements are an integral part of this statement.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 23
|
Statement of Changes in Net Assets
|
| Year Ended
December 31, 2021
| Year Ended
December 31, 2020
|
| Operations
|
|
|
| Net investment income (loss)
| $(930,162)
| $1,736,081
|
| Net realized gain
| 74,275,861
| 23,224,709
|
| Net change in unrealized appreciation (depreciation)
| 96,952,182
| 74,868,847
|
| Net increase in net assets resulting from operations
| 170,297,881
| 99,829,637
|
| Distributions to stockholders
|
|
|
| Net investment income and net realized gains
| (49,943,197)
| (29,394,307)
|
| Total distributions to stockholders
| (49,943,197)
| (29,394,307)
|
| Increase in net assets from capital stock activity
| 751,802
| 615,471
|
| Total increase in net assets
| 121,106,486
| 71,050,801
|
| Net assets at beginning of year
| 443,113,594
| 372,062,793
|
| Net assets at end of year
| $564,220,080
| $443,113,594
|
|
| Year Ended
| Year Ended
|
|
| December 31, 2021
| December 31, 2020
|
|
| Shares
| Dollars ($)
| Shares
| Dollars ($)
|
| Capital stock activity
|
| Common Stock issued at market price in distributions
| 22,951
| 751,802
| 30,215
| 669,829
|
| Common Stock purchased in the open market
| —
| —
| (2,629)
| (54,358)
|
| Total net increase
| 22,951
| 751,802
| 27,586
| 615,471
|
The accompanying Notes to Financial Statements are
an integral part of this statement.
| 24
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
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 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.
|
| Year ended December 31,
|
| 2021
| 2020
| 2019
| 2018
| 2017
|
| Per share data
|
|
|
|
|
|
| Net asset value, beginning of period
| $27.86
| $23.43
| $16.96
| $20.83
| $17.78
|
| Income from investment operations:
|
|
|
|
|
|
| Net investment income (loss)
| (0.06)
| 0.11
| (0.02)
| (0.01)
| (0.06)
|
| Net realized and unrealized gain (loss)
| 10.76
| 6.17
| 8.34
| (1.36)
| 5.74
|
| Total from investment operations
| 10.70
| 6.28
| 8.32
| (1.37)
| 5.68
|
| Less distributions to Stockholders from:
|
|
|
|
|
|
| Net investment income
| —
| (0.11)
| —
| —
| —
|
| Net realized gains
| (3.14)
| (1.74)
| (1.85)
| (2.50)
| (2.63)
|
| Total distributions to Stockholders
| (3.14)
| (1.85)
| (1.85)
| (2.50)
| (2.63)
|
| Net asset value, end of period
| $35.42
| $27.86
| $23.43
| $16.96
| $20.83
|
| Market price, end of period
| $37.01
| $27.24
| $23.55
| $16.81
| $22.25
|
| Total return
|
|
|
|
|
|
| Based upon net asset value
| 39.38%
| 29.17%
| 51.04%
| (7.77%)
| 32.72%
|
| Based upon market price
| 48.96%
| 25.65%
| 53.17%
| (14.42%)
| 34.51%
|
| Ratios to average net assets
|
|
|
|
|
|
| Total gross expenses(a)
| 1.13%
| 1.15%
| 1.15%
| 1.15%
| 1.16%
|
| Net investment income (loss)
| (0.18%)
| 0.50%
| (0.08%)
| (0.05%)
| (0.28%)
|
| Supplemental data
|
|
|
|
|
|
| Net assets, end of period (in thousands)
| $564,220
| $443,114
| $372,063
| $265,315
| $320,472
|
| Portfolio turnover
| 27%
| 32%
| 43%
| 34%
| 47%
|
| Notes to Financial Highlights
|
| (a)
| 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.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 25
|
Notes to Financial Statements
December 31, 2021
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”.
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
Basis of preparation
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.
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
| 26
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Notes to Financial Statements (continued)
December 31, 2021
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 adopted 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
and under the general supervision of 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.
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.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 27
|
Notes to Financial Statements (continued)
December 31, 2021
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 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. 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 collateral to the broker and/or CCP. Any interest expense paid by
the Fund is shown on the Statement of Operations. 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 contracts
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 purchased and has written option contracts to decrease the Fund’s exposure to equity market 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.
| 28
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Notes to Financial Statements (continued)
December 31, 2021
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 December 31, 2021:
|
| Liability derivatives
|
|
Risk exposure
category
| Statement
of assets and liabilities
location
| Fair value ($)
|
| Equity risk
| Options contracts written, at value
| 3,473,625
|
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 year ended December 31, 2021:
| Amount of realized gain (loss) on derivatives recognized in income
|
| Risk exposure category
| Options
contracts
written
($)
| Options
contracts
purchased
($)
| Total
($)
|
| Equity risk
| 2,241,928
| 131,960
| 2,373,888
|
|
|
| Change in unrealized appreciation (depreciation) on derivatives recognized in income
|
| Risk exposure category
| Options
contracts
written
($)
| Options
contracts
purchased
($)
| Total
($)
|
| Equity risk
| (1,757,650)
| (9,434)
| (1,767,084)
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 29
|
Notes to Financial Statements (continued)
December 31, 2021
The following table is a summary
of the average outstanding volume by derivative instrument for the year ended December 31, 2021:
| Derivative instrument
| Average
value ($)
|
| Options contracts — purchased
| 6,219*
|
| Options contracts — written
| (1,406,855)**
|
| *
| Based on the ending daily outstanding amounts for the year ended December 31, 2021.
|
| **
| Based on the ending quarterly outstanding amounts for the year ended December 31, 2021.
|
Offsetting of assets and
liabilities
The following table presents the
Fund’s gross and net amount of assets and liabilities available for offset under netting arrangements as well as any related collateral received or pledged by the Fund as of December 31, 2021:
|
| Morgan
Stanley ($)
|
| Liabilities
|
|
| Options contracts written
| 3,473,625
|
| Total financial and derivative net assets
| (3,473,625)
|
| Total collateral received (pledged) (a)
| (3,473,625)
|
| Net amount (b)
| -
|
| (a)
| In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization.
|
| (b)
| Represents the net amount due from/(to) counterparties in the event of default.
|
Security transactions
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.
Income recognition
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 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.
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.
| 30
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Notes to Financial Statements (continued)
December 31, 2021
Foreign taxes
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 on 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 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 2021, the Fund’s managed distribution policy provided stockholders with current income through quarterly distributions of $0.4625
per share, comprised of $0.4701 short-term capital gains and $1.3799 long-term capital gains. The Fund also paid a special fourth quarter distribution, beyond its typical quarterly managed distribution policy,
in the amount of $1.2869 per share. No portion of the Fund’s 2021 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 the period, effecting 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 39.38% in 2021, which outperformed the Fund’s benchmark, the S&P North American Technology Sector Index’s
return of 26.40%.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 31
|
Notes to Financial Statements (continued)
December 31, 2021
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
Management services fees
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. "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.
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 December 31, 2021, these
differences were primarily due to differing treatment for deferral/reversal of wash sale losses, Directors’ deferred compensation, derivative investments, post-October capital losses, distributions, net
operating loss reclassification and foreign currency transactions. To the extent these differences were permanent, reclassifications were made among the components of the Fund’s net assets. Temporary differences
do not require reclassifications.
The following reclassifications
were made:
Excess of distributions
over net investment
income ($)
| Accumulated
net realized
gain ($)
| Paid in
capital ($)
|
| 907,637
| (907,637)
| —
|
Net investment income (loss) and
net realized gains (losses), as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.
| 32
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Notes to Financial Statements (continued)
December 31, 2021
The tax character of distributions
paid during the years indicated was as follows:
| Year Ended December 31, 2021
| Year Ended December 31, 2020
|
Ordinary
income ($)
| Long-term
capital gains ($)
| Total ($)
| Ordinary
income ($)
| Long-term
capital gains ($)
| Total ($)
|
| 12,363,181
| 37,580,016
| 49,943,197
| 2,129,850
| 27,264,457
| 29,394,307
|
Short-term capital gain
distributions, if any, are considered ordinary income distributions for tax purposes.
At December 31, 2021, the
components of distributable earnings on a tax basis were as follows:
Undistributed
ordinary income ($)
| Undistributed
long-term
capital gains ($)
| Capital loss
carryforwards ($)
| Net unrealized
appreciation ($)
|
| —
| 26,189,459
| —
| 320,603,575
|
At December 31, 2021, the cost of
all investments for federal income tax purposes along with the aggregate gross unrealized appreciation and depreciation based on that cost was:
Federal
tax cost ($)
| Gross unrealized
appreciation ($)
| Gross unrealized
(depreciation) ($)
| Net unrealized
appreciation ($)
|
| 264,385,821
| 327,831,337
| (7,227,762)
| 320,603,575
|
Tax cost of investments and
unrealized appreciation/(depreciation) may also include timing differences that do not constitute adjustments to tax basis.
Under current tax rules, regulated
investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year.
As of December 31, 2021, the Fund will elect to treat the following late-year ordinary losses and post-October capital losses as arising on January 1, 2022.
Late year
ordinary losses ($)
| Post-October
capital losses ($)
|
| —
| 1,311,470
|
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 $136,551,866 and $166,144,450, respectively, for the year ended December 31, 2021. 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 22,951 shares were issued to the Plan participants during the year ended December 31,
2021 for proceeds of $751,802, a weighted average premium of 0.13% 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
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 33
|
Notes to Financial Statements (continued)
December 31, 2021
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 American Stock Transfer & Trust Company, LLC (AST), 59 Maiden Lane Plaza
Level, New York, New York 10038. Participation in the Plan may be terminated or resumed at any time without penalty by written notice if received by AST, 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 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 AST.
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. No shares were purchased in the open market during the year ended December 31, 2021.
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. In addition, the Board of Trustees of the Affiliated MMF may impose a fee on redemptions (sometimes referred to as a liquidity fee) or temporarily suspend redemptions (sometimes
referred to as imposing a redemption gate) in the event its liquidity falls below regulatory limits.
| 34
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Notes to Financial Statements (continued)
December 31, 2021
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.
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 did not lend money under the Interfund Program during the year ended December 31, 2021.
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
Active management risk
Due to its active management, the
Fund could underperform its benchmark index and/or other funds with similar investment objectives.
Foreign securities risk
Investments in or exposure to
foreign companies involve certain risks not associated with investments in or exposure to securities of U.S. companies. Investing in foreign companies subjects the Fund to the risks associated with issuer’s (and
any of its related companies’) country of organization and places of business operations and exposures, including political,
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 35
|
Notes to Financial Statements (continued)
December 31, 2021
regulatory, economic, social, diplomatic and other
conditions or events (including, for example, military confrontations, war, terrorism, natural disasters and disease pandemics), occurring in the country or region, as well as risks associated with less developed
custody and settlement practices. Foreign securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other
sanctions against a particular foreign country, its nationals or industries or businesses within the country. 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.
Securities issued by foreign
governments or companies in emerging market countries may have greater exposure to the risks of investing in foreign securities. Emerging market countries are more likely to experience instability resulting, for
example, from rapid changes or developments in social, political, economic or other conditions. Their economies are usually less mature and their securities markets are typically less developed with more limited
trading activity (i.e., lower trading volumes and less liquidity) than more developed countries. Emerging market securities tend to be more volatile than securities in more developed markets. Many emerging market
countries are heavily dependent on international trade and have fewer trading partners, which makes them more sensitive to world commodity prices and economic downturns in other countries, and some have a higher risk
of currency devaluations. The financial information and disclosure made available by issuers of emerging market securities may be considerably less reliable than publicly available information about other foreign
securities.
The Public Company Accounting
Oversight Board, which regulates auditors of U.S. public companies, is unable to inspect audit work papers in certain foreign countries. Investors in foreign countries often have limited rights and few practical
remedies to pursue shareholder claims, including class actions or fraud claims, and the ability of the U.S. Securities and Exchange Commission, the U.S. Department of Justice and other authorities to bring and enforce
actions against foreign issuers or foreign persons is limited.
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.
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, war, terrorism, disease/virus outbreaks, epidemics or other events, conditions and factors which may impair the value of an investment in the Fund.
| 36
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Notes to Financial Statements (continued)
December 31, 2021
Large-capitalization risk
Stocks of large-capitalization
companies have at times experienced periods of volatility and negative performance. During such periods, the value of the stocks may decline and the Fund’s performance may be negatively affected.
Leverage risk
Leverage occurs when the Fund
increases its assets available for investment using derivatives, or similar instruments or techniques. Use of leverage can produce volatility and may exaggerate changes in the NAV of Fund shares and in the return on
the Fund’s portfolio, which may increase the risk of loss. If the Fund uses leverage, through the purchase of particular instruments such as derivatives, the Fund may experience capital losses. Leverage presents
the opportunity for increased net income and capital gains, but may also exaggerate the Fund’s volatility and risk of loss. There can be no guarantee that a leveraging strategy will be successful.
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, including causing difficulty in assigning prices to hard-to-value assets in thinly traded and closed markets, significant redemptions and 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, 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.
The coronavirus disease 2019 and
its variants (COVID-19) pandemic has resulted in, and may continue to result in, significant global economic and societal disruption and market volatility due to disruptions in market access, resource availability,
facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. Such disruptions may be caused, or exacerbated by, quarantines and travel restrictions, workforce displacement
and loss in human and other resources. The uncertainty surrounding the magnitude, duration, reach, costs and effects of the global pandemic, as well as actions that have been or could be taken by governmental
authorities or other third parties, present unknowns that are yet to unfold. The impacts, as well as the uncertainty over impacts to come, of COVID-19 – and any other infectious illness outbreaks, epidemics and
pandemics that may arise in the future – could negatively affect global economies and markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illness outbreaks and epidemics in
emerging market countries may be greater due to generally less established healthcare systems, governments and financial markets. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing
political, social and economic risks in certain countries or globally. The disruptions caused by COVID-19 could prevent the Fund from executing advantageous investment decisions in a timely manner and negatively
impact the Fund’s ability to achieve its investment objectives. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.
Non-diversification risk
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.
Options risk
The Fund engages in transactions in
options on securities, indices, exchange traded funds and market baskets of securities on exchanges and in the OTC markets. In general, exchange-traded options have standardized exercise prices and expiration dates
and require the parties to post margin against their obligations, and the performance of the parties’ obligations in
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 37
|
Notes to Financial Statements (continued)
December 31, 2021
connection with such options is guaranteed by the
exchange or a related clearing corporation. OTC options have more flexible terms negotiated between the buyer and the seller, but generally do not require the parties to post margin and are subject to greater credit
risk. OTC options also involve greater liquidity risk.
In addition to writing call options
as described above, the Fund may purchase put options. By buying a put option, the Fund will pay a premium to acquire a right to sell the securities or instruments underlying the put at the exercise price of the
option. The Fund will lose money if the securities or instruments underlying the option do not decline in value below the exercise price of the option by an amount sufficient to offset the premium paid to acquire the
option. To the extent the Fund purchases put options in the OTC market, the Fund will be subject to the credit risk of the seller of the option. The Fund also may write put options on the types of securities or
instruments that may be held by the Fund, provided that such put options are secured by segregated, liquid instruments. The Fund will receive a premium for writing a put option, which increases the Fund’s
return. In exchange for the premium received, the Fund has the obligation to buy the securities or instruments underlying the option at an agreed-upon exercise price if the securities or instruments decrease below the
exercise price of the option.
The Fund will lose money if the
securities or instruments decrease in value so that the amount the Fund is obligated to pay the counterparty to the option to purchase the securities underlying the option upon exercise of the option exceeds the value
of those securities by an amount that is greater than the premium received by the Fund for writing the option.
The Fund may purchase call options
on any of the types of securities or instruments in which it may invest. In exchange for paying the option premium, a purchased call option gives the Fund the right to buy, and obligates the seller to sell, the
underlying security or instrument at the exercise price. The Fund will lose money if the securities or instruments underlying the option do not appreciate in value in an amount sufficient to offset the premium paid by
the Fund to acquire the option.
Small and mid-cap companies risk
The Fund may invest all or a
substantial portion of its Managed Assets in small- and mid-capitalization companies (small- and mid-cap companies). Investments in small- and mid-cap companies often involve greater risks than investments in larger
companies because small- and mid-cap companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies.
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. This means that the Fund
could have greater difficulty selling such securities at the time and price that the Fund would like. During periods of investor uncertainty, investor sentiment may favor large, well-known companies over smaller,
lesser-known companies which may adversely impact the value of the Fund’s investment in small- and mid-cap companies and the value of your investment in the Fund.
Writing call options risk
A principal aspect of the
Fund’s investment strategy involves writing call options on the NASDAQ 100. This part of the Fund’s strategy subjects the Fund to certain additional risks. A decision as to whether, when and how to use
options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. The principal factors affecting the market
value of an option include supply and demand, interest rates, the current market price of the underlying index or security in relation to the exercise price of the option, the actual or perceived volatility of the
underlying index or security and the time remaining until the expiration date.
The Fund intends to write call
options on the NASDAQ 100; however, it does not intend to have a portfolio of securities that mirrors the securities in the NASDAQ 100. As a result, during a period when the Fund has outstanding call options written
on the NASDAQ 100, the NASDAQ 100 may appreciate to a greater extent than the securities in the Fund’s portfolio. If the call options are exercised in these circumstances, the Fund’s loss on the options
will be greater because it will be paying the option holder not only an amount effectively representing appreciation on securities in its own portfolio but also an amount representing the greater appreciation
experienced by the securities in the NASDAQ 100 that the Fund does not own. If, at a time these call options may be exercised, the securities underlying these options have market values above the exercise price, then
these call options will be exercised and the Fund will be obligated to deliver to the option holder either the securities underlying these options or to deliver the cash value of those securities, in exchange for
which the option holder
| 38
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Notes to Financial Statements (continued)
December 31, 2021
will pay the Fund the exercise price. In either
case, the Fund will incur losses to the extent the market value of the underlying securities exceed the sum of the premium the Fund received from writing the call options and the exercise price of the call options,
which loss may be very substantial.
To the extent all or part of the
Fund’s call options are covered, the Fund forgoes, during the option’s life, the opportunity to profit from increases in the market value of the security underlying the call option above the sum of the
option premium received and the exercise price of the call, but has retained the risk of loss should the price of the underlying security decline below the exercise price minus the option premium received. The writer
of an exchange-listed option on a security has no control over when during the exercise period of the option (which may be a single day or multiple days) it may be required to fulfill its obligation as a writer of the
option. Once an option writer has received an exercise notice, it would be obligated to deliver the underlying security at the exercise price. Thus, the writing of call options may require the Fund to sell portfolio
securities at inopportune times or for prices other than current market values and will limit the amount of appreciation the Fund can realize above the exercise price of an option.
The Fund may be required to sell
investments from its portfolio to effect cash settlement (or transfer ownership of a stock or other instrument to physically settle) on any written call options that are exercised. Such sales (or transfers) may occur
at inopportune times, and the Fund may incur transaction costs that increase the costs borne by Common Stockholders. The Fund may sell written call options over an exchange or in the OTC market. The options in the OTC
markets may not be as liquid as exchange-listed options. The Fund may be limited in the number of counterparties willing to take positions opposite the Fund or may find the terms of such counterparties to be less
favorable than the terms available for listed options. The Fund cannot guarantee that its options strategies will be effective. Moreover, OTC options may provide less favorable tax treatment than listed options.
The value of options may be
adversely affected if the market for such options becomes less liquid or smaller. There can be no assurance that a liquid market will exist when the Fund seeks to close out an option position, in the case of a call
option written, by buying the option back. Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii)
restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of
options; (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or the Options Clearing Corporation (OCC) may not at all times be adequate to handle
current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled to discontinue the trading of options (or a particular class or series of options) at some future
date. If trading were discontinued, the secondary market on that exchange (or in that class or series of options) would cease to exist. However, outstanding options on that exchange that had been issued by the OCC as
a result of trades on that exchange would continue to be exercisable in accordance with their terms. The Fund’s ability to terminate OTC options will be more limited than with exchange-traded options and may
involve the risk that broker-dealers participating in such transactions will not fulfill their obligations.
The hours of trading for options
may not conform to the hours during which the underlying securities are traded. To the extent that the options markets close before the markets for the underlying securities, significant price and rate movements can
take place in the underlying markets that would not be reflected concurrently in the options markets. Call options are marked to market daily and their value will be affected by changes in the value of and dividend
rates of the underlying common stocks, changes in interest rates, changes in the actual or perceived volatility of the stock market and the underlying common stocks and the remaining time to the options’
expiration.
Additionally, the exercise price of
an option may be adjusted downward before the option’s expiration as a result of the occurrence of certain corporate events affecting the underlying equity security, such as extraordinary dividends, stock
splits, merger or other extraordinary distributions or events. A reduction in the exercise price of an option would reduce the Fund’s capital appreciation potential on the underlying security.
The Fund’s options
transactions will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities on which such options are traded. These limitations govern the maximum number of options in
each class which may be written or purchased by a single investor or group of investors acting in concert, regardless of whether the options are written or purchased on the same or different exchanges, boards of trade
or other trading facilities or are held or
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 39
|
Notes to Financial Statements (continued)
December 31, 2021
written in one or more accounts or through one or
more brokers. Thus, the number of options which the Fund may write or purchase may be affected by options written or purchased by other investment advisory clients of the Investment Manager. An exchange, board of
trade or other trading facility may order the liquidation of positions found to be in excess of these limits, and may impose certain other sanctions.
Note 11. Subsequent
events
Management has evaluated the
events and transactions that have occurred through the date the financial statements were issued and noted 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 have historically been involved in a number of legal, arbitration and regulatory proceedings, including routine litigation, class actions, and governmental actions, concerning matters arising in
connection with the conduct of their business activities. Ameriprise Financial believes that the 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.
There can be no assurance that
these matters, or the adverse publicity associated with them, will not result in increased Fund redemptions, reduced sale of Fund shares or other adverse consequences to the Fund. Further, 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 provides services to
the Fund.
| 40
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Report of Independent Registered Public
Accounting Firm
To the Board of Directors and
Stockholders of Columbia Seligman Premium Technology Growth Fund, Inc.
Opinion on the Financial
Statements
We have audited the accompanying
statement of assets and liabilities, including the portfolio of investments, of Columbia Seligman Premium Technology Growth Fund, Inc. (the "Fund") as of December 31, 2021, the related statement of operations for the
year ended December 31, 2021, the statement of changes in net assets for each of the two years in the period ended December 31, 2021, including the related notes, and the financial highlights for each of the five
years in the period ended December 31, 2021 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Fund as of December 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2021 and the financial highlights for each
of the five years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these
financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2021 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Minneapolis, Minnesota
February 18, 2022
We have served as the auditor of
one or more investment companies within the Columbia Funds Complex since 1977.
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 41
|
Federal Income Tax
Information
(Unaudited)
The Fund hereby designates the
following tax attributes for the fiscal year ended December 31, 2021.
Qualified
dividend
income
| Dividends
received
deduction
| Capital
gain
dividend
|
| 39.82%
| 38.68%
| $63,890,207
|
Qualified dividend income. For
taxable, non-corporate stockholders, the percentage of ordinary income distributed during the fiscal year that represents qualified dividend income subject to reduced tax rates.
Dividends received deduction. The
percentage of ordinary income distributed during the fiscal year that qualifies for the corporate dividends received deduction.
Capital gain dividend. The Fund
designates as a capital gain dividend the amount reflected above, or if subsequently determined to be different, the net capital gain of such fiscal period.
Directors and
Officers
Stockholders elect the Board that
oversees the Fund’s operations and appoints officers who are responsible for day-to-day business decisions based on policies set by the Board. The following table provides basic biographical information about
the Fund’s Directors as of the printing of this report, including their principal occupations during the past five years, although specific titles for individuals may have varied over the period. The Directors
may have served as a Trustee to other Funds in the Columbia Funds Complex prior to the date set forth in the Position Held with the Fund and Length of Service column. Under current Board policy, Directors may serve a
term of three years, whereupon they may be re-elected to serve another term (the Fund’s Board has three classes, with one class expiring each year at the Fund’s regular stockholder’s meeting), or,
for Directors not affiliated with the Investment Manager, generally may serve through the end of the calendar year in which they reach the mandatory retirement age established by the Board.
Independent directors
Name, Address,
Year of Birth
| Position Held
With the Fund and
Length of Service
| Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
| Number of
Funds in the
Columbia Funds
Complex
Overseen
| Other Directorships
Held by Director
During the Past
Five Years
|
George S. Batejan
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1953
| Director since January 2018
| Executive Vice President, Global Head of Technology and Operations, Janus Capital Group, Inc., 2010-2016
| 176
| Former Chairman of the Board, NICSA (National Investment Company Services Association) (Executive Committee, Nominating
Committee and Governance Committee), 2014-2016; former Director, Intech Investment Management, 2011-2016; former Board Member, Metro Denver Chamber of Commerce, 2015-2016; former Advisory Board Member, University of
Colorado Business School, 2015-2018
|
| 42
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Directors and Officers (continued)
Independent directors (continued)
Name, Address,
Year of Birth
| Position Held
With the Fund and
Length of Service
| Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
| Number of
Funds in the
Columbia Funds
Complex
Overseen
| Other Directorships
Held by Director
During the Past
Five Years
|
Kathleen Blatz
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1954
| Director since October 2009
| Attorney, specializing in arbitration and mediation; Chief Justice, Minnesota Supreme Court, 1998-2006; Associate Justice, Minnesota Supreme
Court, 1996-1998; Fourth Judicial District Court Judge, Hennepin County, 1994-1996; Attorney in private practice and public service, 1984-1993; State Representative, Minnesota House of Representatives, 1979-1993,
which included service on the Tax and Financial Institutions and Insurance Committees; Member and Interim Chair, Minnesota Sports Facilities Authority, January-July 2017; Interim President and Chief Executive Officer,
Blue Cross Blue Shield of Minneota (health care insurance), February-July 2018, April-October 2021
| 176
| Former Trustee, Blue Cross Blue Shield of Minnesota, 2009-2021 (Chair of the Business Development Committee, 2014-2017; Chair of the
Governance Committee, 2017-2019); former Member and Chair of the Board, Minnesota Sports Facilities Authority, January-July 2017; former Director, Robina Foundation, 2009-2020 (Chair, 2014-2020); Director, Schulze
Family Foundation, since 2021
|
Pamela G. Carlton
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1954
| Director since October 2009
| President, Springboard — Partners in Cross Cultural Leadership (consulting company) since 2003; Managing Director of US Equity Research,
JP Morgan Chase, 1999-2003; Director of US Equity Research, Chase Asset Management, 1996-1999; Co-Director Latin America Research, 1993-1996, COO Global Research, 1992-1996, Co-Director of US Research, 1991-1992,
Investment Banker, 1982-1991, Morgan Stanley; Attorney, Cleary Gottlieb Steen & Hamilton LLP, 1980-1982
| 176
| Trustee, New York Presbyterian Hospital Board (Executive Committee and Chair of People Committee) since 1996; Director, DR Bank (Audit
Committee) since 2017; Director, Evercore Inc. (Audit Committee); Director, Apollo Commercial Real Estate Finance, Inc. since 2021; the Governing Council of the Independent Directors Council (IDC), since 2021
|
Patricia M. Flynn
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1950
| Director since October 2009
| Trustee Professor of Economics and Management, Bentley University since 1976 (also teaches and conducts research on corporate governance);
Dean, McCallum Graduate School of Business, Bentley University, 1992-2002
| 176
| Trustee, MA Taxpayers Foundation since 1997; Board of Governors, Innovation Institute, MA Technology Collaborative, 2010-2020; former Board of
Directors, The MA Business Roundtable, 2003-2019
|
Brian J. Gallagher
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1954
| Director since January 2020
| Retired; Partner with Deloitte & Touche LLP and its predecessors, 1977 - 2016
| 176
| Trustee, Catholic Schools Foundation since 2004
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 43
|
Directors and Officers (continued)
Independent directors (continued)
Name, Address,
Year of Birth
| Position Held
With the Fund and
Length of Service
| Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
| Number of
Funds in the
Columbia Funds
Complex
Overseen
| Other Directorships
Held by Director
During the Past
Five Years
|
Douglas A. Hacker
c/o Columbia Management Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1955
| Director since January 2022
| Independent business executive since May 2006; Executive Vice President – Strategy of United Airlines, December 2002-May 2006; President
of UAL Loyalty Services (airline marketing company), September 2001-December 2002; Executive Vice President and Chief Financial Officer of United Airlines, July 1999-September 2001
| 176
| Director, Spartan Nash Company (food distributor); Director, Aircastle Limited (Chair of Audit Committee) (aircraft leasing); former Director,
Nash Finch Company (food distributor), 2005-2013; former Director, SeaCube Container Leasing Ltd. (container leasing), 2010-2013; and former Director, Travelport Worldwide Limited (travel information technology),
2014-2019
|
Catherine James Paglia
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1952
| Director since October 2009; Chair of the Board since January 2020
| Director, Enterprise Asset Management, Inc. (private real estate and asset management company) since September 1998; Managing Director and
Partner, Interlaken Capital, Inc., 1989-1997; Vice President, 1982-1985, Principal, 1985-1987, Managing Director, 1987-1989, Morgan Stanley; Vice President, Investment Banking, 1980-1982, Associate, Investment
Banking, 1976-1980, Dean Witter Reynolds, Inc.
| 176
| Director, Valmont Industries, Inc. irrigation systems manufacturer) since 2012; Trustee, Carleton College (on the Investment Committee);
Trustee, Carnegie Endowment for International Peace (on the Investment Committee)
|
Minor M. Shaw
c/o Columbia Management
Investment Advisers LLC
290 Congress Street
Boston, MA 02210
1947
| Director since April 2016
| President, Micco LLC (private investments) since 2011; President, Micco Corp. (family investment business), 1998-2011
| 176
| Director, Blue Cross Blue Shield of South Carolina (Chair of Compensation Committee) since April 2008; Trustee, Hollingsworth Funds (on the
Investment Committee) since 2016 (previously Board Chair from 2016-2019); Former Advisory Board member, Duke Energy Corp., 2016-2020; Chair of the Duke Endowment; Chair of Greenville – Spartanburg Airport
Commission; former Trustee, BofA Funds Series Trust (11 funds), 2003-2011; former Director, Piedmont Natural Gas, 2004-2016; former Director, National Association of Corporate Directors, Carolinas Chapter, 2013-2018;
Chair, Daniel-Mickel Foundation since 1998
|
Sandra Yeager
c/o Columbia Management
Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1964
| Director since June 2020
| Retired; President and founder, Hanoverian Capital, LLC (SEC registered investment advisor firm), 2008-2016;
Managing Director, DuPont Capital, 2006-2008; Managing Director, Morgan Stanley Investment Management, 2004-2006; Senior Vice President, Alliance Bernstein, 1990-2004
| 176
| Former Director, NAPE Education Foundation, October 2016-October 2020
|
| 44
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
Directors and Officers (continued)
Interested director affiliated with Investment Manager*
Name,
Address,
Year of Birth
| Position Held
With the Fund and
Length of Service
| Principal Occupation(s)
During the Past Five Years
and Other Relevant
Professional Experience
| Number of
Funds in the
Columbia Funds
Complex
Overseen
| Other Directorships Held
by Director During the
Past Five Years
|
Daniel J. Beckman
c/o Columbia Management
Investment Advisers, LLC
290 Congress Street
Boston, MA 02210
1962
| Director since November 2021(a)
| Vice President – Head of North America Product, Columbia Management Investment Advisers, LLC (since
April 2015); officer of Columbia Funds and affiliated funds since 2020
| 176
| Director, Ameriprise Trust Company, since October 2016; Director, Columbia Management Investment Distributors, Inc. since
November 2018; Board of Governors, Columbia Wanger Asset Management, LLC since January 2022
|
| *
| Interested person (as defined under the 1940 Act) by reason of being an officer, director, security holder and/or employee of the Investment Manager or Ameriprise Financial.
|
| (a)
| Mr. Beckman serves as the President and Principal Executive Officer of the Columbia Funds (since 2021).
|
The Board has appointed officers
who are responsible for day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. The following table provides basic information about the Officers of the
Fund as of the printing of this report, including principal occupations during the past five years, although their specific titles may have varied over the period. In addition to Mr. Beckman, who is the President and
Principal Executive Officer, the Fund’s other officers are:
Fund officers
Name,
address and
year of birth
| Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof
| Principal occupation(s) during past five years
|
Michael G. Clarke
290 Congress Street
Boston, MA 02210
1969
| Chief Financial Officer and Principal Financial Officer (2009) and Senior Vice President (2019)
| Vice President and Head of Global Operations & Investor Services, Columbia Management Investment Advisers, LLC, since March 2022
(previously Vice President, Head of North American Operations, and Co-Head of Global Operations, June 2019 to February 2022 and Vice President – Accounting and Tax, May 2010 - May 2019); senior officer of
Columbia Funds and affiliated funds since 2002.
|
Joseph Beranek
5890 Ameriprise
Financial Center
Minneapolis, MN 55474
1965
| Treasurer and Chief Accounting Officer (Principal Accounting Officer) (2019) and Principal Financial Officer (2020)
| Vice President — Mutual Fund Accounting and Financial Reporting, Columbia Management Investment Advisers, LLC, since December 2018 and
March 2017, respectively (previously, Vice President — Pricing and Corporate Actions, May 2010-March 2017).
|
William F. Truscott
290 Congress Street
Boston, MA 02210
1960
| Senior Vice President (2001)
| Formerly, Trustee/Director of Columbia Funds Complex or legacy funds, November 2001-January 1, 2021; Chief Executive Officer, Global Asset
Management, Ameriprise Financial, Inc. since September 2012; Chairman of the Board and President, Columbia Management Investment Advisers, LLC since July 2004 and February 2012, respectively; Chairman of the Board and
Chief Executive Officer, Columbia Management Investment Distributors, Inc. since November 2008 and February 2012, respectively; Chairman of the Board and Director, Threadneedle Asset Management Holdings, Sàrl
since March 2013 and December 2008, respectively; senior executive of various entities affiliated with Columbia Threadneedle.
|
Christopher O. Petersen
5228 Ameriprise Financial Center
Minneapolis, MN 55474
1970
| Senior Vice President and Assistant Secretary (2021)
| Formerly, Trustee/Director of funds within the Columbia Funds Complex, July 1, 2020 - November 22, 2021; Senior Vice President
and Assistant General Counsel, Ameriprise Financial, Inc. since September 2021 (previously Vice President and Lead Chief Counsel, January 2015 - September 2021); President and Principal Executive Officer of the
Columbia Funds 2015 - 2021; officer of Columbia Funds and affiliated funds since 2007.
|
Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
| 45
|
Directors and Officers (continued)
Fund officers (continued)
Name,
address and
year of birth
| Position and year
first appointed to
position for any Fund
in the Columbia
Funds complex or a
predecessor thereof
| Principal occupation(s) during past five years
|
Thomas P. McGuire
290 Congress Street
Boston, MA 02210
1972
| Senior Vice President and Chief Compliance Officer (2012)
| Vice President – Asset Management Compliance, Ameriprise Financial, Inc., since May 2010; Chief Compliance Officer, Columbia
Acorn/Wanger Funds since December 2015; Chief Compliance Officer, Ameriprise Certificate Company, September 2010 – September 2020.
|
Ryan C. Larrenaga
290 Congress Street
Boston, MA 02210
1970
| Senior Vice President (2017), Chief Legal Officer (2017), and Secretary (2015)
| Vice President and Chief Counsel, Ameriprise Financial, Inc. since August 2018 (previously, Vice President and Group Counsel, August 2011
– August 2018); Chief Legal Officer, Columbia Acorn/Wanger Funds, since September 2020; officer of Columbia Funds and affiliated funds since 2005.
|
Michael E. DeFao
290 Congress Street
Boston, MA 02210
1968
| Vice President (2011) and Assistant Secretary (2010)
| Vice President and Chief Counsel, Ameriprise Financial, Inc. since May 2010; Vice President, Chief Legal Officer and Assistant Secretary,
Columbia Management Investment Advisers, LLC since October 2021 (previously Vice President and Assistant Secretary, May 2010 – September 2021).
|
Lyn Kephart-Strong
5228 Ameriprise
Financial Center
Minneapolis, MN 55474
1960
| Vice President (2015)
| President, Columbia Management Investment Services Corp. since October 2014; Vice President & Resolution Officer,
Ameriprise Trust Company since August 2009.
|
| 46
| Columbia Seligman Premium Technology Growth Fund, Inc. | Annual Report 2021
|
[THIS PAGE INTENTIONALLY LEFT
BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
Columbia Seligman Premium Technology Growth Fund,
Inc.
290 Congress Street
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
American Stock Transfer & Trust Company 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. Columbia Management Investment Distributors, Inc., 290 Congress Street, Boston, MA 02210.
© 2022 Columbia Management Investment
Advisers, LLC.
columbiathreadneedleus.com/investor/
Item 2. Code of Ethics.
(a)The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b)During the period covered by this report, there were not any amendments to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item.
(c)During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party that relates to one or more of the items set forth in paragraph (b) of this Item.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that Brian J. Gallagher and Sandra L. Yeager, each of whom are members of the registrant's Board of Trustees and Audit Committee, each qualify as an audit committee financial expert. Mr. Gallagher and Ms. Yeager are each independent trustees, as defined in paragraph (a)(2) of this item's instructions.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the one series of the registrant whose report to stockholders is included in this annual filing.
(a)Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional services rendered during the fiscal years ended December 31, 2021 and December 31,
2020 are approximately as follows:
20212020
$49,500 $39,500
Audit Fees include amounts related to the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b)Audit-Related Fees. Aggregate Audit-Related Fees billed to the registrant by the principal accountant for professional services rendered during the fiscal years ended December 31, 2021 and December 31, 2020 are approximately as follows:
Audit-Related, if any, Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported in Audit Fees above.
During the fiscal years ended December 31, 2021 and December 31, 2020, there were no Audit-Related Fees billed by the registrant's principal accountant to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(c)Tax Fees. Aggregate Tax Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended December 31, 2021 and December 31, 2020 are approximately as follows:
Tax Fees, if any, include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning.
During the fiscal years ended December 31, 2021 and December 31, 2020, there were no Tax Fees billed by the registrant's principal accountant to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant.
(d)All Other Fees. Aggregate All Other Fees billed by the principal accountant to the registrant for professional services rendered during the fiscal years ended December 31,
2021 and December 31, 2020 are approximately as follows:
All Other Fees, if any, include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
Aggregate All Other Fees billed by the registrant's principal accountant to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for an engagement that related directly to the operations and financial reporting of the registrant during the fiscal years ended December 31, 2021 and December 31, 2020 are approximately as follows:
20212020
$520,000 $520,000
In both fiscal years 2021 and 2020, All Other Fees primarily consist of fees billed for internal control examinations of the registrant's transfer agent and investment advisor.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The registrant's Audit Committee is required to pre-approve the engagement of the registrant's independent auditors to provide audit and non-audit services to the registrant and non-audit services to its investment adviser (excluding any sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another investment adviser (the "Adviser") or any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (a "Control Affiliate") if the engagement relates directly to the operations and financial reporting of the registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Auditors for Audit and Non-Audit Services (the "Policy"). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the registrant's independent accountants to provide (i) audit and permissible audit-related, tax and other services to the registrant ("Fund Services"); (ii) non-audit services to the registrant's Adviser and any Control Affiliates, that relates directly to the operations and financial reporting of a Fund ("Fund-related Adviser Services"); and (iii) certain other audit and non-audit services to the registrant's Adviser and its Control Affiliates. A service will require specific pre-approval by the Audit Committee if it is to be provided by the Fund's independent auditor; provided, however, that pre-approval of non-audit services to the Fund, the Adviser or Control Affiliates may be waived if certain de minimis requirements set forth in the SEC's rules are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre- designated member or members who are independent board members. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre- approval decisions to the Audit Committee at its next regular meeting. The Audit Committee's responsibilities with respect to the pre-approval of services performed by the independent auditor may not be delegated to management.
On an annual basis, at a regularly scheduled Audit Committee meeting, the Fund's Treasurer or other Fund officer shall submit to the Audit Committee a schedule of the types of Fund Services and Fund-related Adviser Services that are subject to specific pre- approval. This schedule will provide a description of each type of service that is subject to specific pre-approval, along with total projected fees for each service. The pre- approval will generally cover a one-year period. The Audit Committee will review and approve the types of services and the projected fees for the next one-year period and may add to, or subtract from, the list of pre-approved services from time to time, based on subsequent determinations. This specific approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent auditor will be permitted to perform and the projected fees for each service.
The Fund's Treasurer or other Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services provided since the last such report was rendered, including a description of the services, by category, with forecasted fees for the annual reporting period, proposed changes requiring specific pre-approval and a description of services provided by the independent auditor, by category, with actual fees during the current reporting period.
*****
(e)(2) None, or 0%, of the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund or affiliated entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).
(f)Not applicable.
(g)The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal year ended December 31, 2021 and December 31, 2020 are approximately as follows:
20212020
$520,000 $520,000
(h)The registrant's Audit Committee of the Board of Directors has considered whether the provision of non-audit services that were rendered to the registrant's adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
(a)The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A). Brian J. Gallagher and Sandra L. Yeager are each independent trustees and collectively constitute the entire Audit Committee.
(b)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. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Proxy Voting Policies and Procedures
General. The Funds have delegated to the Investment Manager the responsibility to vote proxies relating to portfolio securities held by the Funds, including Funds managed by subadvisers. In deciding to delegate this responsibility to the Investment Manager, the Board reviewed the policies adopted by the Investment Manager. These included the procedures that the Investment Manager follows when a vote presents a conflict between the interests of the Funds and their shareholders and the Investment Manager and its affiliates.
The Investment Manager's policy is to vote all proxies for Fund securities in a manner considered by the Investment Manager to be in the best economic interests of its clients, including the Funds, without regard to any benefit or detriment to the Investment Manager, its employees or its affiliates. The best economic interests of clients is defined for this purpose as the interest of enhancing or protecting the value of client accounts, considered as a group rather than individually, as the Investment Manager determines in its discretion. The Investment Manager endeavors to vote all proxies of which it becomes aware prior to the vote deadline; provided, however, that in certain circumstances the Investment Manager may refrain from voting securities. For instance, the Investment Manager may refrain from voting foreign securities if it determines that the costs of voting outweigh the expected benefits of voting and typically will not vote securities if voting would impose trading restrictions.
The Board may, in its discretion, vote proxies for the Funds. For instance, the Board may determine to vote on matters that may present a material conflict of interest to the Investment Manager.
Oversight. The operation of the Investment Manager's proxy voting policy and procedures is overseen by a committee (the Proxy Voting Committee) composed of representatives of the Investment Manager's equity investments, equity research, responsible investment, compliance, legal and operations functions. The Proxy Voting Committee has the responsibility to review, at least annually, the Investment Manager's proxy voting policies to ensure consistency with internal policies, regulatory requirements, conflicts of interest and client disclosures. The Board reviews on an annual basis, or more frequently as determined appropriate, the Investment Manager's administration of the proxy voting process.
Corporate Governance and Proxy Voting Principles (the Principles). The Investment Manager has adopted the Principles, which set out the Investment Manager's views on key issues and the broad principles shaping its approach, as well as the types of related voting action the Investment Manager may take. The Principles also provide indicative examples of key guidelines used in any given region, which illustrate the standards against which voting decisions are considered. The Investment Manager has developed voting stances that align with the Principles and will generally vote in accordance with such voting stances. The Proxy Voting Committee or investment professionals may determine to vote differently from the voting stances on particular proposals in the event it determines that doing so is in the clients' best economic interests. The Investment Manager may also consider the voting recommendations of analysts, portfolio managers, subadvisers and information obtained from outside resources, including one or more third party research providers. When proposals are not covered by the voting stances or a voting determination must be made on a case-by-case basis, a portfolio manager, subadviser or analyst will make the voting determination based on his or her determination of the clients' best economic interests. In addition, the Proxy Voting Committee may determine proxy votes when proposals require special consideration.
Addressing Conflicts of Interest. The Investment Manager seeks to address potential material conflicts of interest by voting in accordance with predetermined voting stances. In addition, if the Investment Manager determines that a material conflict of interest exists, the Investment Manager will invoke one or more of the following conflict management practices: (i) causing the proxies to be voted in accordance with the recommendations of an independent third party (which may be the Investment Manager's proxy voting administrator or research provider); (ii) causing the proxies to be delegated to an independent third party (which may be the Investment Manager's proxy voting administrator or research provider); and (iii) in infrequent cases, forwarding the proxies to an Independent Director authorized to vote the proxies for the Funds. A member of the Proxy Voting Committee is prohibited from voting on any proposal for which he or she has a conflict of interest by reason of a direct relationship with the issuer or other party affected by a given proposal. Persons making recommendations to the Proxy Voting Committee or its members are required to disclose to the committee any relationship with a party making a proposal or other matter known to the person that would create a potential conflict of interest.
Voting Proxies of Affiliated Underlying Funds. Certain Funds may invest in shares of other Columbia Funds (referred to in this context as "underlying funds") and may own substantial portions of these underlying funds. If such Funds are in a master-feeder structure, the feeder fund will either seek instructions from its shareholders with regard to the voting of proxies with respect to the master fund's shares and vote such proxies in accordance with such instructions or vote the shares held by it in the same proportion as the vote of all other master fund shareholders. With respect to Funds that hold shares of underlying funds other than in a master-feeder structure, the holding Funds will typically vote proxies of the underlying funds in the same proportion as the vote of all other holders of the underlying fund's shares, unless the Board otherwise instructs.
Proxy Voting Agents. The Investment Manager has retained Institutional Shareholder Services Inc., a third-party vendor, as its proxy voting administrator to implement its proxy voting process and to provide recordkeeping and vote disclosure services. Typically, Institutional Shareholder Services Inc. populates ballots for issuers deemed to present potential material conflicts of interest in accordance with predetermined voting stances, as described above under Addressing Conflicts of Interest. The Investment Manager has retained both Institutional Shareholder Services Inc. and Glass Lewis & Company, LLC to provide proxy research services.
Additional Information. Information regarding how the Columbia Funds (except certain Columbia Funds that do not invest in voting securities) voted proxies relating to portfolio securities during the most recent twelve month period ended June 30 will be available by August 31 of this year free of charge: (i) through the Columbia Funds' website at columbiathreadneedleus.com and/or (ii) on the SEC's website at www.sec.gov. For a copy of the Investment Manager's Principles in effect on the date of this SAI, see Appendix B to this SAI.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Portfolio Managers
|
|
|
|
Managed the
|
|
Portfolio Manager
|
Title
|
Role with the Corporation
|
Corporation Since
|
|
Paul Wick
|
Portfolio Manager
|
Lead Portfolio Manager
|
2009
|
|
Braj Agrawal
|
Portfolio Manager
|
Co-Portfolio Manager
|
2010
|
|
Jeetil Patel
|
Portfolio Manager
|
Technology Team Member
|
2015
|
|
Christopher Boova
|
Portfolio Manager
|
Co-Portfolio Manager
|
2016
|
|
Vimal Patel
|
Portfolio Manager
|
Technology Team Member
|
2018
|
|
Shekhar Pramanick
|
Portfolio Manager
|
Technology Team Member
|
2018
|
Mr. Wick joined one of the Columbia Management legacy firms or acquired business lines in 1987. Mr. Wick is Team Leader and Portfolio Manager for the Columbia Seligman Technology strategies. Mr. Wick began his investment career in 1987 and earned a B.A. from Duke and an M.B.A. from Duke's Fuqua School of Business.
Mr. Agrawal joined the Investment Manager in 2010 as a Managing Trader responsible for derivatives. Mr. Agrawal has been a member of the investment community since 2001 and earned a B.A. in Economics from the University of Illinois at Urbana-Champaign and an M.B.A. from University of Minnesota's Carlson School.
Mr. Jeetil Patel joined the Investment Manager in 2012. Mr. Patel began his investment career in 1998 and earned a B.A. from University of California, Los Angeles.
Mr. Boova joined one of the Columbia Management legacy firms or acquired business lines in 2000. Mr. Boova began his investment career in 1995 and earned two B.S. degrees from Worcester Polytechnic Institute, an M.A. from Georgetown University and an M.B.A. from the Wharton School at the University of Pennsylvania.
Dr. Pramanick joined the Investment Manager in 2012. Dr. Pramanick began his investment career in 1993 and earned a B.S. from the National Institute of Technology, an M.S. from the University of Oregon and a Ph.D. from North Carolina State University.
Mr. Vimal Patel joined the Investment Manager in 2014. Mr. Patel began his investment career in 2001 and earned a B.S. from North Carolina State University, an M.S. from the University of Colorado, Boulder, and an M.B.A. from the Anderson School of Management at the University of California, Los Angeles.
Other Accounts Managed by the Portfolio Managers:
|
|
|
Other Accounts Managed (Excluding the Fund)
|
Ownership
|
|
Fund
|
Portfolio
|
Number
|
Approximate
|
Performance-
|
of Fund
|
|
|
Manager
|
and Type
|
Total Net
|
Based
|
Shares
|
|
|
|
of Account*
|
Assets
|
Accounts**
|
|
|
Columbia
|
Paul Wick
|
3 RICs
|
$14.50 billion
|
2 PIVs -
|
None
|
|
Seligman
|
|
3 PIVs
|
$2.14 billion
|
$1.38 billion
|
|
|
Premium
|
|
6 other accounts
|
$669.77 million
|
1 other account
|
|
|
Technology
|
|
|
|
- $143.92
|
|
|
Growth
|
|
|
|
million
|
|
|
Fund, Inc.
|
Braj Agrawal
|
17 other accounts
|
$8.03 million
|
None
|
None
|
|
|
Shekhar
|
3 RICs
|
$14.50 billion
|
None
|
None
|
|
|
Pramanick
|
6 other accounts
|
$8.33 million
|
|
|
|
|
Jeetil Patel
|
1 RIC
|
$12.05 billion
|
None
|
None
|
|
|
|
8 other accounts
|
$3.37 million
|
|
|
|
|
Christopher
|
2 RICs
|
$2.45 billion
|
None
|
None
|
|
|
Boova
|
7 other accounts
|
$8.06 million
|
|
|
|
|
Vimal Patel
|
3 RICs
|
$14.50 billion
|
None
|
None
|
|
|
|
8 other accounts
|
$6.70 million
|
|
|
*RIC refers to a Registered Investment Company; PIV refers to a Pooled Investment Vehicle.
**Number and type of accounts for which the advisory fee paid is based in part or wholly on performance and the aggregate net assets in those accounts.
Potential Conflicts of Interest:
Columbia Management: Like other investment professionals with multiple clients, a Fund's portfolio manager(s) may face certain potential conflicts of interest in connection with managing both the Fund and other accounts at the same time. The Investment Manager and the Funds have adopted compliance policies and procedures that attempt to address certain of the potential conflicts that portfolio managers face in this regard. Certain of these conflicts of interest are summarized below.
The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance (performance fee accounts), may raise potential conflicts of interest for a portfolio manager by creating an incentive to favor higher fee accounts.
Potential conflicts of interest also may arise when a portfolio manager has personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to the Investment Manager's Code of Ethics and certain limited exceptions, the Investment Manager's investment professionals do not have the opportunity to invest in client accounts, other than the funds.
A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of those Funds and/or accounts. The effects of this potential conflict may be more pronounced where Funds and/or accounts managed by a particular portfolio manager have different investment strategies.
A portfolio manager may be able to select or influence the selection of the broker/dealers that are used to execute securities transactions for the Funds. A portfolio manager's decision as to the selection of broker/dealers could produce disproportionate costs and benefits among the Funds and the other accounts the portfolio manager manages.
A potential conflict of interest may arise when a portfolio manager buys or sells the same
securities for a Fund and other accounts. On occasions when a portfolio manager considers the purchase or sale of a security to be in the best interests of a Fund as well as other accounts, the Investment Manager's trading desk may, to the extent consistent with applicable laws and regulations, aggregate the securities to be sold or bought in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to a Fund or another account if a portfolio manager favors one account over another in allocating the securities bought or sold. The Investment Manager and its Participating Affiliates may coordinate their trading operations for certain types of securities and transactions pursuant to personnel-sharing agreements or similar intercompany arrangements. However, typically the Investment Manager does not coordinate trading activities with a Participating Affiliate with respect to accounts of that Participating Affiliate unless such Participating Affiliate is also providing trading services for accounts managed by the Investment Manager. Similarly, a Participating Affiliate typically does not coordinate trading activities with the Investment Manager with respect to accounts of the Investment Manager unless the Investment Manager is also providing trading services for accounts managed by such Participating Affiliate. As a result, it is possible that the Investment Manager and its Participating Affiliates may trade in the same instruments at the same time, in the same or opposite direction or in different sequence, which could negatively impact the prices paid by the Fund on such instruments. Additionally, in circumstances where trading services are being provided on a coordinated basis for the Investment Manager's accounts (including the Funds) and the accounts of one or more Participating Affiliates in accordance with applicable law, it is possible that the allocation opportunities available to the Funds may be decreased, especially for less actively traded securities, or orders may take longer to execute, which may negatively impact Fund performance.
"Cross trades," in which a portfolio manager sells a particular security held by a Fund to another account (potentially saving transaction costs for both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than an independent third party would pay. The Investment Manager and the Funds have adopted compliance procedures that provide that any transactions between a Fund and another account managed by the Investment Manager are to be made at a current market price, consistent with applicable laws and regulations.
Another potential conflict of interest may arise based on the different investment objectives and strategies of a Fund and other accounts managed by its portfolio manager(s). Depending on another account's objectives and other factors, a portfolio manager may give advice to and make decisions for a Fund that may differ from advice given, or the timing or nature of decisions made, with respect to another account. A portfolio manager's investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a portfolio manager may buy or sell a particular security for certain accounts, and not for a Fund, even though it could have been bought or sold for the Fund at the same time. A portfolio manager also may buy a particular security for one or more accounts when one or more other accounts are selling the security (including short sales). There may be circumstances when a portfolio manager's purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts, including the Funds.
To the extent a Fund invests in underlying funds, a portfolio manager will be subject to additional potential conflicts of interest. Because of the structure of funds-of-funds, the potential conflicts of interest for the portfolio managers may be different than the potential conflicts of interest for portfolio managers who manage other Funds. The Investment Manager and its affiliates may receive higher compensation as a result of allocations to underlying funds with higher fees.
A Fund's portfolio manager(s) also may have other potential conflicts of interest in managing the Fund, and the description above is not a complete description of every conflict that could exist in managing the Fund and other accounts. Many of the potential conflicts of interest to which the Investment Manager's portfolio managers are subject are essentially the same or similar to the potential conflicts of interest related to the investment management activities of the Investment Manager and its affiliates.
Structure of Compensation:
Portfolio manager compensation is typically comprised of (i) a base salary and (ii) an annual cash bonus. The annual cash bonus, and in most instances the base salary, are paid from a team compensation pool that is based on fees and performance of the accounts managed by the portfolio management team, which might include mutual funds, wrap accounts, institutional portfolios and hedge funds.
The percentage of management fees on mutual funds that fund the bonus pool is based on the short term (typically one-year) and long-term (typically three-year and five-year) performance of those accounts in relation to the relevant peer group universe.
The pool is also funded by a percentage of the management fees on long-only institutional separate accounts, that percentage being based on the source of the account in question, and by a fixed percentage of management fees on hedge funds and separately managed accounts that follow a hedge fund mandate.
The percentage of performance fees on hedge funds and separately managed accounts that follow a hedge fund mandate that fund the bonus pool is based on the absolute level of each hedge fund's current year investment return.
For all employees the benefit programs generally are the same and are competitive within the financial services industry. Employees participate in a wide variety of plans, including options in Medical, Dental, Vision, Health Care and Dependent Spending Accounts, Life Insurance, Long Term Disability Insurance, 401(k), and a cash balance pension plan.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
The Fund has a share repurchase plan approved by the Fund's Board of Directors, which authorizes repurchases of the Fund's common stock in the open market at times when shares are trading at a discount from NAV and in an amount approximately sufficient to offset the growth in the number of common shares attributable to the reinvestment of the
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 |
|
April 08, 2022 |
|
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 |
|
April 08, 2022 |
|
By (Signature and Title) |
/s/ Michael G. Clarke |
|
|
Michael G. Clarke, Chief Financial Officer, Principal Financial Officer |
|
|
and Senior Vice President |
Date |
|
April 08, 2022 |
|
By (Signature and Title) |
/s/ Joseph Beranek |
|
|
Joseph Beranek, Treasurer, Chief Accounting Officer and Principal |
|
|
Financial Officer |
Date |
|
April 08, 2022 |
|
Columbia Seligman Premiu... (NYSE:STK)
Gráfica de Acción Histórica
De Dic 2024 a Ene 2025
Columbia Seligman Premiu... (NYSE:STK)
Gráfica de Acción Histórica
De Ene 2024 a Ene 2025
