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8-K - FORM 8-K - Columbia Seligman Premium Technology Growth Fund, Inc. | c64133e8vk.htm |
EX-99.1 - EX-99.1 - Columbia Seligman Premium Technology Growth Fund, Inc. | c64133exv99w1.htm |
Changes to Columbia Seligman Premium Technology Growth Funds rules-based options strategy to
take effect June 17, 2011
In implementing its investment program, Columbia Seligman Premium Technology Growth Fund (the
Fund) uses a rules-based options strategy (the Rules-based Option Strategy) that seeks to cushion
downside volatility and provide current income. The Rules-based Option Strategy is based upon the
research of the Funds investment manager, Columbia Management Investment Advisers, LLC (the
Investment Manager), and, as disclosed by the Fund in its prospectus in connection with its
initial public offering, the Rules-based Option Strategy may change over time based upon the Funds
experience and market factors. In this regard, based on the Investment Managers recommendation,
the Funds Board of Directors has approved modifying the Rules-based Option Strategy as described
below effective on or about June 17, 2011. The revised Rules-based Option Strategy will seek to
provide the Fund with greater investment flexibility in extremely volatile markets.
Background. In addition to the Funds holdings in technology and technology-related companies, the
Fund seeks to cushion downside volatility and produce current income by 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. In determining the
level of call options written on the NASDAQ 100, the Investment Manager uses a Rules-based Option
Strategy based on the CBOE NASDAQ-100 Volatility IndexSM (the VXN Index). The VXN
Index measures the markets 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),
except as described below, and write fewer call options when market volatility, as represented by
the VXN Index, is low (and premiums for writing the option are low).
Changes to Rules-based Option Strategy. Effective on or about June 17, 2011, the Funds Rules-based
Option Strategy with respect to writing call options will be as follows:
Aggregate Notional Amount of Written Call Options | ||
as a Percentage of the | ||
When the VXN Index is: | Funds 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% |
© 2011 Columbia Management Investment Advisers, LLC. All rights reserved. 225 Franklin Street, Boston, MA 02110 columbiamanagement.com |
Not FDIC insured No bank gurantee May lose value |
April 14, 2011
Notice to Stockholders of
Columbia Seligman Premium Technology Growth Fund
Notice to Stockholders of
Columbia Seligman Premium Technology Growth Fund
Important Disclosures:
The Fund should only be considered as one element of a complete investment program. An investment
in the Fund should be considered speculative. The Funds investment policy of investing in
technology and technology-related companies and writing call options involves a high degree of
risk.
There is no assurance that the Fund will meet its investment objectives. You could lose some or
all of your investment. The net asset value of shares of a closed-end fund 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, which may increase your risk of loss. 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.
The market prices of technology and technology-related stocks tend to exhibit a greater degree of
market risk and price volatility than other types of investments. These stocks may fall in and out
of favor with investors rapidly, which may cause sudden selling and dramatically lower market
prices. These stocks also may be affected adversely by changes in technology, consumer and
business purchasing patterns, government regulation and/or obsolete products or services.
Technology and technology-related companies are often smaller and less experienced companies and
may be subject to greater risks than larger companies, such as limited product lines, markets and
financial and managerial resources. These risks may be heightened for technology companies in
foreign markets.
You should consider the investment objectives, risks, charges, and expenses of the Fund
carefully before investing. You can obtain the Funds most recent periodic reports and other
regulatory filings by contacting your financial advisor or American Stock Transfer & Trust Company,
LLC, the Funds stockholder service agent, at 800 937-5449. These reports and other filings can
also be found on the Securities and Exchange Commissions EDGAR database. You should read these
reports and other filings carefully before investing.
© 2011 Columbia Management Investment Advisers, LLC. All rights reserved. 225 Franklin Street, Boston, MA 02110 columbiamanagement.com |
Not FDIC insured No bank gurantee May lose value |