THE SWISS
HELVETIA
FUND, INC.
A Swiss
Investments
Fund
THE SWISS HELVETIA FUND, INC.
Executive Offices
The Swiss Helvetia Fund, Inc.
630 Fifth Avenue
Suite 915
New York, New York 10111-0001
1-888-SWISS-00
(212) 332-2760
http://www.swz.com
Semi-Annual Report
For the Six Months Ended
June 30, 1999
THE SWISS HELVETIA FUND, INC.
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Directors and Officers The Investment Advisor
Paul Hottinguer The Fund is managed by Hottinger Capital
Chairman and Corp., which is 100% owned by the
Chief Executive Officer Hottinger Group.
Eric R. Gabus
Vice Chairman The Hottinger Group dates back to Banque
(Non officer) Hottinguer which was formed in Paris in
Alexandre de Takacsy 1786, and is one of Europe's oldest
Director private banking firms. The Hottinger
Claude Frey Group has remained under the control of
Director the Hottinger family through seven
Baron Hottinger generations. It has offices in New York,
Director Zurich, Luxembourg, Geneva and the
Claude Mosseri-Marlio Bahamas.
Director
Didier Pineau-Valencienne
Director
Stephen K. West, Esq. EXECUTIVE OFFICES
Director The Swiss Helvetia Fund, Inc.
Samuel B. Witt III, Esq. 630 Fifth Avenue
Director Suite 915
Rodolphe Hottinger New York, New York 10111-0001
President and 1-888-SWISS-00 (1-888-794-7700)
Chief Operating Officer (212) 332-2760
Rudolf Millisits
Vice President FOR INQUIRIES AND REPORTS:
Edward J. Veilleux 1-888-SWISS-00 (1-888-794-7700)
Vice President and Treasurer Fax (212)332-7931
Paul R. Brenner, Esq.
Secretary WEBSITE ADDRESS
http://www.swz.com
INVESTMENT ADVISOR
Hottinger Capital Corp. The Fund
630 Fifth Avenue
Suite 915 The Swiss Helvetia Fund, Inc. is a
New York, New York 10111-0001 non-diversified, closed-end investment
(212) 332-7930 company whose objective is to seek
long-term capital appreciation through
ADMINISTRATOR investment in equity and equity-linked
Investment Company Capital Corp. securities of Swiss companies. The Fund,
listed on the New York Stock Exchange
under the symbol "SWZ," is managed by
CUSTODIAN Hottinger Capital Corp.
PFPC Trust Company
Net Asset Value is calculated daily by
TRANSFER AGENT 6:00 P.M. (Eastern Standard Time). The
PFPC,Inc. most recent calculation is available by
(800) 852-4750 calling 1-888-SWISS-00 or by accessing
our Website. Weekly Net Asset Value is
LEGAL COUNSEL also published in BARRON'S, the Monday
Paul R. Brenner, Esq. and edition of THE WALL STREET JOURNAL and
Salans Hertzfeld Heilbronn the Sunday edition of THE NEW YORK
Christy & Viener TIMES.
INDEPENDENT AUDITORS
Deloitte & Touche LLP
For Dividend Reinvestment Information, see page 20.
1
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THE SWISS HELVETIA FUND, INC.
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Letter to Stockholders
Quarter in Review
Economic Environment
The second quarter of 1999 has seen a continuation of the trends in place
since the beginning of the year. Continental European economies suffered on
different fronts with the exception of France and Spain. No major initiatives
were launched to stimulate growth and there is still much to do to stimulate
Western European economies. While overall economic growth was still weak,
consumer confidence remained high and business confidence improved. Unemployment
showed a better picture but at a very moderate pace.
The difficulty in meeting Maastricht criteria, in terms of public deficit
and public debt as a percentage of GDP, showed the structural problem of
Euroland that we mentioned in our last two quarterly reports. All this resulted
in a sharp depreciation of the Euro against the U.S. dollar and Japanese Yen.
The Swiss franc has also depreciated, closely following the trend of the
Euro. One reason is Switzerland's strong economic ties to Euroland.
Impact of Currency Changes on Performance
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(Second (Second (First (First
Quarter Quarter Half Half
1999) 1999) 1999) 1999)
U.S. Swiss U.S. Swiss
Dollar Franc Dollar Franc
- --------------------------------------------------------------------------------
The Swiss Helvetia Fund
Net Asset Value (total return) -5.35% -0.99% -12.47% -0.61%
Swiss Performance Index -5.28% -0.19% -11.27% +0.75%
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The strength of the Anglo-Saxon and Asian countries as reflected in the
solid performance of their stock markets, the weakness of the Euro and a large
amount of equity supply coming to the market created a difficult and very
competitive environment for both the European and the Swiss stock markets.
Swiss Economy and Stock Market
Switzerland's real Gross Domestic Product for the first quarter of 1999
increased at a rate of 0.7% year-over-year. The industrial sector still felt the
effect from last year's Asian crisis. Exports showed a modest increase of 1.4%
after a 2.1% decline in the last quarter of 1998. Inventory reduction also
played a large role in the weak economic growth. On the positive side, Swiss
unemployment continued to decline to 2.7% in May against 3.9% for the entire
year of 1998. Industrial production bounced back, rising by 0.3% in the first
quarter of 1999 compared to a contraction of 0.7% in the last quarter of 1998.
The combination of low unemployment, high consumer confidence and higher
industrial output at a time when stockpiles have been run down, should bode well
for the second half of 1999. In addition, money supply growth (M3) accelerated
in May confirming a recovery in domestic lending.
The performance of the Swiss stock market in the second quarter of the year
was lukewarm, following the trend in the first quarter. Defensive sectors, which
have very large weightings in the Swiss Performance Index, posted negative
returns. The healthcare
2
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THE SWISS HELVETIA FUND, INC.
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sector suffered from concerns about the impact of proposed Medicare reform
in the United States, from a very difficult trading environment in agribusiness
(crop protection, pesticides, seeds), and from competitive pricing in the
vitamin business. The insurance companies saw their stocks fall due to the
occurrence of natural disasters (floods, avalanches) as well as due to the
negative effect which rising interest rates had on their large bond portfolios.
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Sector Performance (12/30/98-6/30/99)
Performance Weighting in SPI
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Swiss Performance Index 0.75% 100.00%
Electronic & Electric Engr 37.24% 6.48%
Misc. Services 25.75% 6.40%
Building mat. & construction 21.36% 1.89%
Banks 16.40% 20.72%
Machinery 16.39% 1.94%
Misc. Industrials 15.03% 2.60%
Retailers 6.95% 0.53%
Utilities 6.40% .67%
Transportation -2.18% 0.75%
Foods & Luxury goods -5.14% 11.96%
Chemicals & pharmaceuticals -8.50% 34.70%
Insurance -13.17% 11.37%
International money allocations shifted out of the European markets because
of the weakness of the currencies (induced by slow economic growth) and into
Southeast Asia and South America where the potential for improvement from a very
depressed situation was perceived to be better.
Small caps (+14.17%) continued to outperform the overall market because of
their higher sensitivity to economic recovery and their cheaper market
valuation. Mid caps (+7.36%) started to outperform the index in the second
quarter. Price-earnings multiples expanded for the small and mid caps while they
contracted somewhat for the blue chips (slight reduction in earnings
expectations).
In the printed version of the document, a line graph appears which depicts the
following plot points.
SPI small cap SPI mid-cap SPI
30-Dec-98 100 100 100
4-Jan-99 100.0005789 101.245816 103.4044
5-Jan-99 100.3574488 101.726891 104.7146
6-Jan-99 100.920684 102.616136 106.3329
7-Jan-99 100.8237242 101.37109 104.8827
8-Jan-99 101.1241549 101.887592 106.0014
11-Jan-99 100.3348731 100.536781 103.9817
12-Jan-99 100.0408099 99.6141643 103.3822
13-Jan-99 98.7713601 97.6677859 99.61664
14-Jan-99 98.62432852 97.6156737 99.18281
15-Jan-99 98.48511161 98.4476722 100.7325
18-Jan-99 98.86542558 98.5159571 101.1879
19-Jan-99 98.70826387 97.9614626 100.704
20-Jan-99 98.83850838 98.2785 101.7854
21-Jan-99 98.35718255 97.5532931 99.80054
22-Jan-99 97.30104427 96.9674799 98.66604
25-Jan-99 97.96644901 96.7985645 99.12411
26-Jan-99 98.00031259 97.3823239 99.17458
27-Jan-99 98.08887886 97.2937589 98.73119
28-Jan-99 98.47469204 97.4678085 99.96198
29-Jan-99 98.46050986 98.1170291 100.7809
1-Feb-99 98.82722052 98.213809 101.8176
2-Feb-99 98.35862971 98.429189 101.1301
3-Feb-99 98.46600908 98.3244512 100.7247
4-Feb-99 98.9840928 98.0120346 100.0812
5-Feb-99 99.76469158 98.1814635 100.0689
8-Feb-99 99.64110401 97.7868996 99.08653
9-Feb-99 99.48538946 96.8614585 97.69141
10-Feb-99 98.69523942 96.3480377 96.99608
11-Feb-99 99.08944614 96.7349003 97.13483
12-Feb-99 98.79769843 97.2506315 97.94846
15-Feb-99 98.45819441 97.4444479 98.24332
16-Feb-99 98.75312587 97.7381246 98.6438
17-Feb-99 98.62867 97.1050767 98.96778
18-Feb-99 98.3539988 96.8283429 98.16371
19-Feb-99 98.42751459 96.602181 97.70498
22-Feb-99 99.10189173 97.41775 99.34847
23-Feb-99 98.98264564 97.7727805 100.2608
24-Feb-99 99.38929795 98.1627236 101.3535
25-Feb-99 98.73604937 97.5710061 99.79409
26-Feb-99 98.8700565 97.8562114 99.40629
1-Mar-99 98.45819441 97.5432814 98.61422
2-Mar-99 98.34155321 96.8208983 98.27201
3-Mar-99 98.89639483 96.3277576 98.4479
4-Mar-99 99.61476568 96.9027889 99.96398
5-Mar-99 100.1377698 97.7057791 101.3526
8-Mar-99 100.6060711 97.7584047 100.9615
9-Mar-99 100.8862415 97.9116608 101.8703
10-Mar-99 101.1701746 98.2785 101.2448
11-Mar-99 101.3235737 99.7920646 102.6882
12-Mar-99 101.6827591 100.437691 102.0249
15-Mar-99 102.2297861 100.502639 101.8721
16-Mar-99 102.7322404 100.114493 101.6604
17-Mar-99 103.4181949 100.474144 101.8574
18-Mar-99 103.4025655 100.780656 101.5194
19-Mar-99 104.6132606 101.803134 101.8639
22-Mar-99 104.9707095 101.262245 101.1843
23-Mar-99 104.5481384 100.143244 99.38227
24-Mar-99 103.4940261 99.4062288 98.53662
25-Mar-99 103.9767991 100.542686 100.239
26-Mar-99 104.227158 100.276991 99.3289
29-Mar-99 105.0731685 100.501612 100.3576
30-Mar-99 105.5947254 100.754472 99.66067
31-Mar-99 106.3067287 101.361335 100.937
1-Apr-99 105.6129596 101.103341 100.8823
6-Apr-99 106.709329 101.64192 101.4127
7-Apr-99 107.7460753 102.443883 102.0731
8-Apr-99 107.4604057 102.767338 103.4137
9-Apr-99 107.9764634 103.670189 104.1151
12-Apr-99 107.7692299 103.760294 103.8442
13-Apr-99 108.3272553 104.178989 104.0288
14-Apr-99 109.814937 104.144846 104.1091
15-Apr-99 110.4247708 103.702021 102.4794
16-Apr-99 110.4291123 103.086943 101.6477
19-Apr-99 110.1778851 103.702534 102.7224
20-Apr-99 107.8852922 102.89518 101.1796
21-Apr-99 108.9347735 102.987852 101.1545
22-Apr-99 109.5466333 103.533876 101.8634
23-Apr-99 109.4855631 103.590609 101.6161
26-Apr-99 109.9341831 104.183353 103.1747
27-Apr-99 110.0528503 105.518504 104.9812
28-Apr-99 110.2288251 105.552133 104.8656
29-Apr-99 110.6146383 105.738761 104.2567
30-Apr-99 111.5414004 106.748917 104.8353
3-May-99 111.7969691 107.037202 106.1046
4-May-99 112.1512341 107.428172 105.1413
5-May-99 111.7492127 106.872394 104.2432
6-May-99 112.3318399 107.112419 103.7024
7-May-99 112.1989905 106.990224 103.4971
10-May-99 112.5486246 107.108055 103.623
11-May-99 113.0342919 107.579632 103.4598
12-May-99 112.9332801 107.424578 102.9563
14-May-99 112.3564416 106.445998 101.7669
17-May-99 111.2644137 105.309028 99.79943
18-May-99 112.3897263 106.260653 101.0233
19-May-99 112.8050616 106.317643 101.2973
20-May-99 113.5289316 107.313166 102.2981
21-May-99 113.4837802 107.026421 101.666
25-May-99 112.4716356 105.590126 99.47188
26-May-99 112.6603455 105.525948 99.6291
27-May-99 112.3318399 104.481394 97.88865
28-May-99 112.2290914 104.771476 98.42544
31-May-99 113.0814694 105.234069 99.93707
1-Jun-99 112.6018802 104.881092 99.48789
2-Jun-99 111.8881402 105.491549 100.638
3-Jun-99 112.1622326 106.348962 101.8848
4-Jun-99 112.713601 107.327542 103.221
7-Jun-99 113.1590372 107.0811 103.9652
8-Jun-99 113.3448527 107.020516 103.6993
9-Jun-99 113.3529568 106.936829 103.8282
10-Jun-99 112.9651176 106.955569 101.9259
11-Jun-99 113.0571571 106.922196 101.766
14-Jun-99 113.4311035 106.897039 101.8094
15-Jun-99 113.2516556 107.170692 102.1925
16-Jun-99 113.5106974 107.204834 102.7942
17-Jun-99 113.7986825 107.491837 103.4973
18-Jun-99 114.1627883 107.639959 104.1213
21-Jun-99 114.8936047 108.363112 105.0824
22-Jun-99 114.5720455 108.018093 103.9021
23-Jun-99 114.1836274 107.630204 102.802
24-Jun-99 113.8594633 107.16145 102.1681
25-Jun-99 114.0464365 106.850574 101.2699
28-Jun-99 114.1237149 106.98201 101.118
29-Jun-99 114.0348592 107.471043 101.8868
30-Jun-99 114.1700241 107.360914 100.75
Quarterly Results
The Swiss Helvetia Fund's performance was consistent with the return of the
Swiss Performance Index.
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Total Return Performance Based on Net Asset Value Per Share*
For the periods ended 6/30/99
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Year to
Date
Through One Three Five Ten Since
6/30/99 Year Years Years Years Inception
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The Swiss
Helvetia Fund -12.47% -12.54% 14.13% 14.88% 14.10% 10.46%
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* These figures assume the reinvestment of dividends and capital gains
distributions. Past performance is not an indicator of future results.
The strategy of the Fund is to continue to take advantage of the
improvement in the fundamentals of the global economy and of
3
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THE SWISS HELVETIA FUND, INC.
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Switzerland specifically by selectively increasing exposure to economically
sensitive stocks and to the small and mid caps in particular. Management expects
these sectors to continue to show strong performance in the absence of any major
financial crisis.
In the printed version of the document, a line graph appears which depicts the
following plot points.
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THE SWISS HELVETIA FUND--PORTFOLIO HOLDINGS PER INDUSTRY
AS OF JUNE 30, 1999
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Life Sciences 18.8%
Pharmaceuticals 15.1
Banks 14.3
Food & Luxury Goods 12.6
Insurance 10.8
Electrical Engineering
and Electronics 6.5
Misc. Services 5.1
Machinery 3.1
Building Contractors
& Materials 2.9
Chemicals 2.6
Cash and Equiv. 2.6
Misc. Industries 2.3
Retailers 1.6
Telecommunications 1.3
Transport 0.4
Corporate Activity
There was very little activity in mergers and acquisitions. Some
interesting initial public offerings and secondary offerings came to the market.
The Fund participated in Geberit's very successful IPO which outperformed the
market. The company is a leader in production and installation of sanitary
systems. The Fund also participated in Charles Voegele's IPO (fashion retailer)
which also outperformed the market.
Outlook
After six-months of consolidation, Management expects the situation to
improve on the Swiss stock market. Earnings should be in line with or better
than expectations. No further earnings downgrades are expected as companies go
into the second part of 1999 with stronger fundamentals and easier comparisons
(the third quarter of 1998 was weak). The strong dollar and strong yen should
also have positive effects on earnings since most Swiss companies have
substantial international exposure. The pick-up in Asian demand will also favor
Switzerland's large industrial sector.
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The Swiss Helvetia Fund--
Ten Issues Having Greatest Appreciation in 1999(1)
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Market Price Market Price
per share per share
in U.S.$ in U.S.$ %
as of as of Appreciation
12/31/98 6/30/99 1998-99
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1. PubliGroupe Ltd. (P) 306 545 78.10%
2. Compagnie Financiere
Richemont AG (B) 1,414 1,917 35.57
3. Swisslog Holding AG (R) 95 121 27.37
4. Adecco SA (B) 456 534 17.11
5. Mikron Holding AG (R) 200 226 13.00
6. Credit Suisse Group (R) 157 172 9.55
7. UBS AG Warrants 16 17 6.25
8. Saia-Burgess (R) 248 258 4.03
9. Bucher Holding Ltd. (B) 801 830 3.62
10. Bon Appetit Holding
AG (R) 545 561 2.94
1 Among issues held for the full six months.
(B)=Bearer Shares
(R)=Registered Shares
(P)=Participation Certificates
4
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THE SWISS HELVETIA FUND, INC.
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The Swiss Helvetia Fund--Ten Largest Holdings (in U.S. dollars)
As of June 30, 1999
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% of Total
Cost Market Value Net Assets
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1. Novartis Ltd. $ 30,098,514 $ 75,676,369 18.8%
2. Roche Holding AG 15,895,280 57,883,703 14.3
3. Nestle AG 17,348,232 48,485,062 12.0
4. Credit Suisse Group 7,207,699 19,315,297 4.8
5. Swiss Reinsurance
Company 5,838,682 18,976,792 4.7
6. UBS AG 5,933,331 18,740,864 4.6
7. Zurich Allied Ltd. 5,196,372 18,422,875 4.6
8. ABB Ltd. 11,749,971 15,224,804 3.8
9. Holderbank Financiere 7,136,284 9,411,463 2.3
Glarus AG
10. Adecco SA 5,142,887 8,010,642 2.0
Total $111,547,252 $290,147,871 71.9%
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Share Buy-Back Update and Discount Development
As mentioned in our First Quarter Report, on February 5, 1999, the Board of
Directors authorized the Fund to repurchase up to 1,000,000 shares of its common
stock in open market purchases to be effected on the New York Stock Exchange
during the balance of 1999. As of June 30, 1999, the Fund had repurchased
382,800 shares at an average price of $14.29 and an average discount of 17.96%.
This had the result of enhancing shareholder value by $1,198,589.
Sincerely,
/s/ Paul Hottinguer
- ------------------------
Paul Hottinguer
Chairman and Chief Executive Officer
/s/ Rodolphe Hottinger
- ------------------------
Rodolphe Hottinger
President and Chief Operating Officer
July 21, 1999
5
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THE SWISS HELVETIA FUND, INC.
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Review of Operations
Trading activity in the first half of 1999 involved changes in the following
positions:
New Investments by the Fund Securities Disposed of
- ---------------------------------- --------------------------------------
Barry Callebaut Ltd. Hero
Charles Voegele Holding AG Straumann Holding Ltd.
Feintool International Holding Swissair Convertible Bond, 0.25%
Forbo Holdings SA Usego-Hofer Curti AG
Geberit AG
Generali (Switzerland) Holding
Gretag-Imaging Holding AG
Logitech International SA
Oz Holding
Tecan AG
The Swatch Group of Switzerland
Vontobel Holding Ltd.
6
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THE SWISS HELVETIA FUND, INC.
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Statement of Net Assets June 30, 1999
(Unaudited)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Common Stocks and Warrants - 97.4%
Banks - 14.3%
3,500 Bank Sarasin & Co.
Registered Shares $ 5,991,153 1.5%
Specializes in
investment advisor
services and
portfolio management
for private and
institutional
customers in Europe.
(cost $4,138,291)
112,000 Credit Suisse Group(1)
Registered Shares 19,315,297 4.8
A global financial
services institution
whose main holding
is Credit Suisse.
(cost $7,207,699)
2,000 Julius Baer Holdings Ltd.
Bearer Shares 5,680,215 1.4
Banking group
specializing in
asset management,
investment
consulting and
securities trading.
(cost $3,660,089)
1,500 Oz Holding
Bearer Shares 1,325,170 0.3
Provides brokerage
and banking
services,
specializing in
Swiss futures and
options. (cost
$1,365,178)
Percent
No. of Value of Net
Shares Security (Note A) Assets
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Banks - (continued)
UBS AG
60,000 Warrants expiring $ 1,000,128 0.3%
6/30/00(2)
(cost $605,422)
63,000 Registered Shares(1) 18,740,864 4.6
Results of the
merger of
Basel-based Swiss
Bank Corp. and
Zurich-based Union
Bank of Switzerland.
Operates globally
with five core
business units:
Private Banking,
Institutional Asset
Management,
Investment Banking,
Private and
Corporate Customers,
and Private Equity.
(cost $5,933,331)
4,000 Valiant Holding AG
Registered Shares 1,851,519 0.5
The largest regional
bank of Switzerland
with activities
focused on mortgage
loans and commercial
business with small
and mid-sized
companies. (cost
$1,916,008)
2,400 Vontobel Holding Ltd.
Bearer Shares 3,762,021 0.9
Provides investment,
banking and
consulting services
to private and
institutional
customers. (cost
$4,429,498)
---------- ----
57,666,367 14.3
Building Contractors & Materials - 2.9%
4,000 Forbo Holdings SA
Registered Shares 1,584,819 0.4
Manufactures
building materials
and decorative home
products. (cost
$1,740,023)
7
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THE SWISS HELVETIA FUND, INC.
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Statement of Net Assets (continued) June 30, 1999
(Unaudited)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Common Stocks and Warrants - (continued)
Building Contractors & Materials - (continued)
2,300 Geberit Ag
Registered Shares(2) $ 522,727 0.2%
Manufactures and
supplies water
supply pipes and
fittings,
installation
systems, drainage
and flushing systems
for the commercial
and residential
construction
markets. (cost
$490,913)
8,000 Holderbank Financiere Glarus AG(1)
Bearer Shares 9,411,463 2.3
Large cement
producer with
worldwide
operations. (cost
$7,136,284)
---------- ----
11,519,009 2.9
Chemicals - 2.6%
16,000 Ciba Specialty Chemicals, Inc.
Registered Shares 1,156,559 0.3
Develops,
manufactures and
markets specialty
chemical products
worldwide. These
products include
additives,
performance
polymers, textile
dyes, consumer care
chemicals and
pigments. (cost
$108,644)
11,000 Clariant AG
Registered Shares 4,513,399 1.1
Specializes in color
chemistry and
manufactures a range
of dyestuffs,
pigments, chemicals,
additives and
masterbatches for
the textile, paper,
leather, plastics,
synthetic fibers and
paint industries.
(cost $2,813,989)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Chemicals - (continued)
200 EMS Chemie Holding, AG
Bearer Shares(2) $ 924,478 0.3%
Produces polymers
and manufactures
high-grade chemical
intermediates and
fine chemicals.
(cost $766,308)
3,000 Gurit-Heberlein AG
Bearer Shares 1,702,141 0.4
European market
leader for wind
screen bonding
systems, ski based
and optically pure
thermoplastic
sheeting for the
auto industry. (cost
$1,328,554)
7,000 Sika Finanz AG
Bearer Shares 2,082,318 0.5
Leading producer of
construction
chemicals. (Cost
$1,877,743)
---------- ----
10,378,895 2.6
Electrical Engineering & Electronics - 6.5%
162,100 ABB Ltd(1) 15,224,804 3.8
ABB Ltd. is the
holding company for
ABB Asea Brown
Boveri Ltd. (ABB
Group) which is one
of the largest
electrical
engineering firms in
the world. (cost
$11,749,971)
3,000 Belimo Automation AG
Registered Shares 910,694 0.2
World market leader
in damper and volume
control actuators
for ventilation and
air conditioning
equipment. (cost
$746,174)
8
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THE SWISS HELVETIA FUND, INC.
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Statement of Net Assets (continued) June 30, 1999
(Unaudited)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Common Stocks and Warrants - (continued)
Electrical Engineering & Electronics - (continued)
12,000 Gretag-Imaging Holding AG
Registered Shares $ 1,155,917 0.3%
Manufactures image
processing equipment
and systems. (cost
$1,100,502)
10,000 Logitech International SA
Registered Shares(2) 1,442,493 0.3
Manufactures
personal computer
input devices, as
well as, producing
trackballs, desktop
publishing programs,
and related
software. (cost
$1,313,833)
4,600 Saia-Burgess Electronics Holding AG
Registered Shares 1,188,486 0.3
Develops and
produces switches,
motors, and
programmable control
devices. Products
are mainly used in
the automobile,
heating & air
conditioning and
telecommunications
industries. (cost
$1,136,053)
7,000 The Swatch Group of Switzerland
Bearer Shares 4,694,192 1.1
Manufactures
watches, watch
components and
microelectronics.
Produces machine
tools for
scientific, medical
and industrial use
and small electric
and alternative fuel
compact cars
worldwide. (cost
$4,341,613)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Electrical Engineering & Electronics - (continued)
9,000 Swisslog Holding, Inc.
Registered Shares $ 1,086,197 0.3%
Provides turnkey
delivery of
automated material
handling systems,
storage, order
picking and
transport systems.
Delivers its systems
to production,
distribution and
service companies
throughout Europe.
(cost $735,745)
2,000 Tecan AG
Registered Shares 679,574 0.2
Manufactures and
distributes
components and
complete solutions
for the automation
of laboratory
processes. (Cost
$671,248)
---------- ----
26,382,357 6.5
Food & Luxury Goods - 12.6%
5,000 Barry Callebaut Ltd.
Registered Shares 762,918 0.2
Produces and markets
raw chocolate and
other cocoa based
products. (cost
$800,593)
60 Lindt & Sprungli AG
Registered Shares 1,461,726 0.4
Major manufacturer
of premium Swiss
chocolates. (cost
$1,196,399)
27,000 Nestle Ltd.(1)
Registered Shares 48,485,062 12.0
Largest food and
beverage processing
company in the
world. (cost
$17,348,232)
---------- ----
50,709,706 12.6
9
<PAGE>
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) June 30, 1999
(Unaudited)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Common Stocks and Warrants - (continued)
Insurance - 10.8%
5,000 Baloise-Holding
Registered Shares $ 4,064,624 1.0%
Medium-sized insurer
active in all
sectors of
insurance. (cost
$1,981,491)
6,000 Generali (Switzerland) Holding
Registered Shares 1,977,177 0.5
An insurance,
financial and real
estate services
company. (Cost
$2,243,128)
10,000 Schweizerische Ruckversicherungs-
Gesellschaft
(Swiss Reinsurance Company)(1)
Registered Shares 18,976,792 4.7
Second largest
reinsurance company
in the world. (cost
$5,838,682)
32,000 Zurich Allied Ltd.(1)
Registered Shares 18,422,875 4.6
A large worldwide
insurance operator.
(cost $5,196,372)
---------- ----
43,441,468 10.8
Life Sciences - 18.8%
52,000 Novartis, Inc.(1)
Registered Shares 75,676,369 18.8
Life science group
created by the
consolidation of
Sandoz and Ciba-
Geigy. Manufactures
health care products
for use in a broad
range of medical
fields, as well as
agricultural
products. The second
largest
pharmaceutical
entity in the world.
(cost $30,098,514)
---------- ----
75,676,369 18.8
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Machinery - 3.1%
1,500 Bucher Holding Ltd.
Bearer Shares $ 1,245,352 0.3%
Manufacturer of
agricultural
machines, special
vehicles, fruit
juice equipment and
plastics machines.
(cost $1,047,724)
5,000 Feintool International Holding
Registered Shares 1,282,216 0.3
Supplier of
integrated systems
for fine-blanking
and forming
technologies. (cost
$1,059,527)
8,000 Georg Fischer AG
Registered Shares 2,600,333 0.6
A mechanical
engineering group
that is a market
leader in vehicle
engineering and
pipeline systems.
(Cost $2,609,553)
7,250 Mikron Holding AG
Registered Shares 1,636,107 0.4
Machine tools and
milling machine
producer.
(cost $1,059,120)
1,700 Rieter Holding AG
Registered Shares 1,017,951 0.3
Leading supplier of
spinning machinery
for the textile
industry. (cost
$569,618)
1,500 Saurer, Inc.
Registered Shares(2) 808,758 0.2
Machinery maker with
dominant market
share. (cost
$665,366)
10
<PAGE>
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) June 30, 1999
(Unaudited)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Common Stocks and Warrants - (continued)
Machinery - (continued)
2,000 Schindler Holding AG
Registered Shares $ 3,051,673 0.8%
One of the world's
largest elevator
companies and a
leading Swiss
machinery
enterprise. (cost
$2,569,092)
1,400 SIG Swiss Industrial Company
Holding Ltd.
Registered Shares 831,132 0.2
Medium-sized
machinery
manufacturer with
interests in
packaging, defense
and railway
industries. (cost
$863,970)
---------- ----
12,473,522 3.1
Miscellaneous Industries - 2.3%
3,800 Alusuisse-Lonza Group Ltd
Registered Shares 4,414,412 1.1
A major aluminum producing
and processing company.
(cost $2,765,161)
3,000 Gretag-Macbeth Holding Ltd.
Registered Shares 903,962 0.2
Offers a spectrum of
benchtop and
portable color
measurement
instrumentation,
color formulation
and color quality
control systems,
densitometers and
visual color
standards. (cost
$957,950)
6,000 Huber & Suhner AG
Registered Shares 1,707,911 0.4
Manufactures a wide
range of products,
extending from
cables for energy
and electrical
transmission to
special products
such as rubber.
(cost $1,904,277)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Miscellaneous Industries - (continued)
2,500 Komax Holding Ltd.
Registered Shares $ 1,105,911 0.3%
World leading
manufacturer of wire
processing machines.
(cost $1,052,561)
2,500 Phoenix Mecano AG
Bearer Shares 1,173,227 0.3
Leading Swiss
packaging
manufacturer for the
mechanical
engineering and
electronics
industry. (cost
$1,179,117)
---------- ----
9,305,423 2.3
Miscellaneous Services - 5.1%
15,000 Adecco SA(1)
Bearer Shares(2) 8,010,642 2.0
Leading personnel
and temporary
employment company.
(cost $5,142,887)
3,500 Compagnie Financiere Richemont AG
Bearer Shares 6,709,193 1.7
Investment company
with principal
interests in luxury
goods and tobacco.
(cost $3,155,503)
700 Kuoni Travel Holding Ltd.
Registered Shares 2,690,409 0.7
Leader in the Swiss
travel and tourism
sector with
subsidiaries in the
United Kingdom,
Germany, France and
Austria. (cost
$1,525,845)
2,400 Moevenpick Holding
Bearer Shares 1,033,979 0.2
Through its
subsidiaries,
invests in the hotel
and restaurant
business worldwide.
The company also
produces food items
under the Moevenpick
name, including ice
cream, coffee,
salmon and jams.
(cost $829,529)
11
<PAGE>
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets (continued) June 30, 1999
(Unaudited)
Percent
No. of Value of Net
Shares Security (Note A) Assets
- --------------------------------------------------------------------------------
Common Stocks and Warrants - (continued)
Miscellaneous Services - (continued)
4,000 PubliGroupe Ltd.
Participation Certificates $ 2,179,767 0.5%
Largest Swiss
advertising
intermediary. (cost
$777,588)
---------- ----
20,623,990 5.1
Pharmaceuticals - 15.1%
2,500 Ares Serono SA
Bearer Shares 3,200,731 0.8
Develops and markets
pharmaceutical and
diagnostic products,
and is the worldwide
market leader in
pharmaceutical
products for the
treatment of
infertility. (cost
$2,944,367)
5,650 Roche Holdings Ltd.(1)
Dividend Rights Certificates 57,883,703 14.3
Worldwide
pharmaceutical
company. (cost
$15,895,280)
---------- ----
61,084,434 15.1
Retailers - 1.6%
2,500 Bon appetit Holding AG
Registered Shares 1,402,423 0.3
Swiss market leader
that operates "Cash
and Carry". (cost
$1,008,766)
10,700 Charles Voegele Holding AG(2) 1,612,066 0.4
Manufactures and
markets a variety of
clothing items for
men, women and
children. Operates
approximately 385
retail stores in
Switzerland,
Germany, Austria and
the Benelux region.
(cost $1,564,861)
Retailers - (continued)
1,500 Jelmoli Holding Ltd.
Bearer Shares $ 1,384,793 0.3%
Operates a network
of retail/service
outlets throughout
Switzerland,
including local dry
cleaners, auto body
shops, opticians,
interior decorators,
travel agencies,
restaurants,
pharmacies and
retailers. (cost
$888,220)
10,000 Valora Holding AG
Registered Shares 2,295,166 0.6
Operates
restaurants, food
vending machines and
specialty retail
stores. (cost
$2,333,483)
---------- ----
6,694,448 1.6
Telecommunications - 1.3%
14,000 Swisscom AG
Registered Shares 5,250,673 1.3
Operates public
telecommunication
networks and offers
network application
services. (cost
$4,700,701)
---------- ----
5,250,673 1.3
Transport - 0.4%
8,500 SAirGroup Holding Ltd.
Registered Shares 1,773,785 0.4
Switzerland's
largest airline
company. (cost
$1,762,430)
---------- ----
1,773,785 0.4
12
<PAGE>
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets (concluded) June 30, 1999
(Unaudited)
Percent
No. of Value of Net
Shares (Note A) Assets
- --------------------------------------------------------------------------------
773,760 Total Common Stocks and Warrants
(Cost $192,849,020)(3) $392,980,446 97.4%
Other Assets In Excess
of Liabilities 10,417,685 2.6
------------ -----
Net Assets Applicable to
24,259,232 Shares of Common
Stock Outstanding $403,398,131 100.0%
============ =====
Net Asset Value Per Share
($403,398,131 divided by
24,259,232) $16.63
======
- --------------------------------------------------------------------------------
(1) One of the ten largest portfolio holdings.
(2) Non-income producing security.
(3) Aggregate cost for federal tax purposes.
See Notes to the Financial Statements.
13
<PAGE>
<TABLE>
THE SWISS HELVETIA FUND, INC.
- ------------------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended June 30, 1999
(Unaudited)
- ------------------------------------------------------------------------------------------
<S> <C>
Investment Income:
Dividends (Less foreign taxes withheld of $811,472) $ 4,598,341
Interest 307
------------
Total income 4,598,648
------------
Expenses:
Investment advisory fee 1,630,260
Administration fee 219,367
Directors' fees and related expenses 124,358
Professional fees 110,324
Custodian fees 69,914
Accounting fee 63,304
Transfer agent fee 51,113
Miscellaneous 46,942
Franchise tax 38,790
Printing and postage 29,516
------------
Total expenses 2,383,888
------------
Net investment income 2,214,760
------------
Net Realized and Unrealized Gain/(Loss) on Investments:
Net realized gain from security transactions 25,097,270
Net realized foreign exchange loss (1,684,722)
Change in unrealized appreciation/depreciation of investments (84,943,042)
Change in unrealized appreciation/depreciation on translation
of assets and liabilities denominated in foreign currency (361,125)
------------
Net loss on investments (61,891,619)
------------
Net Decrease in Net Assets Resulting from Operations $(59,676,859)
============
- -------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
THE SWISS HELVETIA FUND, INC.
- ---------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the For the
Six Months Ended Year Ended
June 30, December 31,
1999(1) 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase/(Decrease) in Net Assets:
Operations:
Net investment income $ 2,214,760 $ 30,371
Net realized gain from security transactions 25,097,270 23,170,402
Net realized foreign exchange gain/(loss) (1,684,722) 2,462,144
Change in unrealized appreciation/depreciation of investments (84,943,042) 63,014,424
Change in unrealized depreciation on translation of
assets and liabilities denominated in foreign currency (361,125) (14,447)
------------ ------------
Net increase/(decrease) in net assets resulting
from operations (59,676,859) 88,662,894
------------ ------------
Dividends to Shareholders from:
Net investment income: (739,261) (1,651,016)
Capital Gains Distribution: (616,051) (23,126,547)
------------ ------------
Total distributions to shareholders (1,355,312) (24,777,563)
------------ ------------
Capital Share Transactions:
Value of shares repurchased through stock buyback (5,485,526) --
------------ ------------
Total decrease from capital share transactions (5,485,526) --
------------ ------------
Total increase/(decrease) in net assets (66,517,697) 63,885,331
Net Assets:
Beginning of period 469,915,828 406,030,497
------------ ------------
End of period $403,398,131 $469,915,828
============ ============
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Unaudited.
See Notes to the Financial Statements.
15
<PAGE>
THE SWISS HELVETIA FUND, INC.
<TABLE>
<S><C>
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Financial Highlights
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data. This information has been derived from information
provided in the financial statements and market price data for the Fund's
shares.
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended December 31,
June 30, --------------------------------------------------------
1999(5) 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance(1):
Net asset value at beginning of year $ 19.07 $ 16.48 $ 12.07 $ 12.28 $ 9.90 $ 10.48
-------- --------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income 0.09 0.00(4) (0.02) 0.05 0.03 0.02
Net realized and unrealized gain/(loss)
on investments(2) (2.48) 3.60 4.86 0.12 3.41 0.06
-------- --------- -------- -------- -------- --------
Total from Investment Operations (2.39) 3.60 4.84 0.17 3.44 0.08
-------- --------- -------- -------- -------- --------
Capital charge resulting from the issuance
of fund shares -- -- -- -- (0.73) (0.03)
-------- --------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income (0.03) (0.07) -- (0.05) (0.03) (0.13)
Distributions from net realized
capital gains (0.02) (0.94) (0.43) (0.33) (0.30) (0.50)
-------- --------- -------- -------- -------- --------
Total distributions (0.05) (1.01) (0.43) (0.38) (0.33) (0.63)
-------- --------- -------- -------- -------- --------
Net asset value at end of period $ 16.63 $ 19.07 $ 16.48 $ 12.07 $ 12.28 $ 9.90
======== ======== ======== ======== ======== ========
Market value per share, end of period $ 13.94 $ 16.00 $ 13.72 $ 9.94 $ 10.63 $ 9.44
======== ======== ======== ======== ======== ========
Total Investment Return(3):
Based on market value per share (11.78)% 22.29% 42.67% (2.93)% 16.30% (10.67)%
Based on net asset value per share (12.47)% 21.37% 41.10% 1.98% 26.28% 1.47%
Ratios to Average Net Assets:
Expenses 1.10%(6) 1.09% 1.17% 1.22% 1.38% 1.57%
Net investment income/(expenses
in excess of income) 1.02%(6) 0.01% (0.14)% 0.25% 0.27% 0.02%
Supplemental Data:
Net assets at end of period (000) $403,398 $469,916 $406,030 $296,008 $301,204 $181,795
Average net assets during period (000) $434,600 $464,967 $354,923 $306,069 $231,234 $184,112
Portfolio turnover rate 12% 13% 13% 19% 10% 28%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Per share amounts for the years ended December 31, 1994 through December
31, 1997 have been restated to reflect 2:1 stock split effective October
16, 1998.
(2) Includes net realized currency gain.
(3) Total investment return based on market value differs from total investment
return based on net asset value due to changes in the relationship between
the Fund's market price and its net asset value per share.
(4) Less than $0.01 per share.
(5) Unaudited.
(6) Annualized.
16
<PAGE>
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements
A. SIGNIFICANT ACCOUNTING POLICIES - The Swiss Helvetia Fund, Inc. (the "Fund")
which was incorporated in Delaware on October 24, 1986 and began operations
August 27, 1987, is registered under the Investment Company Act of 1940, as
amended, as a non-diversified, closed-end Investment Management Company. Its
objective is to seek long-term growth of capital through investment in equity
and equity-linked securities of Swiss companies.
When preparing the Fund's financial statements, management makes estimates
and assumptions in accordance with generally accepted accounting principles.
These estimates affect 1) the assets and liabilities that we report at the
date of the financial statements; 2) the contingent assets and liabilities
that we disclose at the date of the financial statements; and 3) the revenues
and expenses that we report for the period. Our estimates could be different
from the actual results. Under certain circumstances, it is necessary to
reclassify prior year information in order to conform to the current year's
presentation. The Fund's significant accounting policies are:
SECURITY VALUATION - The Fund states its investments at value. The Fund
values a security that is traded on the Swiss stock exchange at the last
sales price on the day of valuation. If there is no sales price available,
the Fund values the security at the mean between the closing bid and asked
prices for that day. A security that is not traded on the Swiss stock
exchange is valued at the mean between the current bid and asked prices. If
bid and asked prices are not available, the Fund uses a fair value that is
determined in good faith by or under the direction of the Fund's Board of
Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME - The Fund uses the trade date
to account for security transactions and the specific identification method
for financial reporting and income tax purposes to determine the cost of
investments sold or redeemed. Interest income is recorded on an accrual
basis. Dividend income is recorded on the ex-dividend date. The Fund records
Swiss withholding tax as an expense, net of an amount receivable from Swiss
tax authorities in accordance with a tax treaty.
FOREIGN CURRENCY TRANSLATION - The Fund's books and records are maintained in
U.S. dollars. The Fund translates Swiss franc amounts into U.S. dollars based
on the following criteria.
o The Fund adjusts asset and liability accounts to reflect the current
exchange rate at the end of the period.
o The Fund includes in the period's net realized foreign exchange gain, the
exchange gain or loss that occurs due to exchange rate changes from the
time an income or expense amount is accrued and the time it is realized.
o The Fund records securities at cost based upon exchange rates at the time
that Swiss francs are purchased or received. Exchange rates are identified
on a first-in, first-out basis.
It is not practical for the Fund to distinguish the portion of its operation
results attributable to exchange rate changes from the portion attributable
to market price changes.
FEDERAL INCOME TAXES - The Fund determines its distributions according to
income tax regulations, which may be different from generally accepted
accounting principles. As a result, the Fund occasionally makes
reclassifications within its capital accounts to reflect income and gains
that are available for distribution under income tax regulations.
The Fund declares and pays dividends from net investment income annually, and
records distributions of capital gains on the ex-dividend date. The Fund is
organized as a regulated investment company. As long as it maintains this
status and distributes to its shareholders all of its taxable net investment
income and net realized capital gains, it will be exempt from most, if not
all, federal income and excise taxes. As a result, the Fund has made no
provisions for federal income taxes.
B. INVESTMENT ADVISORY FEES, TRANSACTIONS WITH AFFILIATES AND OTHER FEES -
Hottinger Capital Corp. ("HCC"), which is owned jointly by Hottinger U.S.,
Inc. and Hottinger & Cie (Zurich), is the Fund's investment advisor. As
compensation for its advisory services, the Fund pays HCC an annual fee based
on the Fund's month-end net assets. This fee is calculated and paid monthly
at the following annual rates. 1.00% of the first $60 million, 0.90% of the
next $40 million, 0.80% of the next $100 million, 0.70% of the next $100
million, 0.65% of the next $100 million, 0.60% of the next $100 million,
0.55% of the next $100 million, and 0.50% of the amount over $600 million.
For the six months ended June 30, 1999, advisory fees were $1,630,260 of
which
17
<PAGE>
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements (concluded)
$263,958 was payable at the end of the period. The Fund paid Hottinger & Cie
$7,394 in brokerage commissions for the six months ended June 30, 1999.
Investment Company Capital Corp. ("ICC"), a subsidiary of Bankers Trust
Corporation, is the Fund's administrator. Bankers Trust Company is a wholly
owned subsidiary of Bankers Trust Corporation which, in turn, is a wholly
owned subsidiary of Deutsche Bank. As compensation for its administrative
services, the Fund pays ICC an annual fee based on the Fund's average monthly
net assets. This fee is calculated weekly and paid monthly at the following
annual rates: 0.20% of the first $75 million, 0.15% of the next $75 million,
0.10% of the next $75 million, 0.05% of the next $275 million, and 0.03% of
the amount over $500 million.
Certain officers and/or directors of the Fund are officers and/or directors
of HCC, Hottinger U.S., Inc., Hottinger & Cie and/or ICC.
PFPC Trust Company is the Fund's custodian and PFPC, Inc. is the Fund's
transfer agent. Both organizations are wholly owned indirect subsidiaries of
PNC Bank Corp. PFPC Trust Company and the Fund have entered into an agreement
with Credit Suisse First Boston that provides for the custody of Swiss
securities that the Fund holds.
C. CAPITAL SHARE TRANSACTIONS - The Fund is authorized to issue up to 50 million
shares of $.001 par value capital stock. HCC owned 48,202 of the 24,259,232
shares outstanding on June 30, 1999.
D. DIRECTORS' FEES - The Fund pays each director who is not affiliated with the
Fund, its investment advisor or administrator approximately $8,200 per annum
in compensation, except for the Chairman of the Audit Committee, who receives
an annual fee of approximately $9,025. In addition, each unaffiliated
director receives $750 for each attended directors' meeting, $750 for each
committee meeting attended, if it is held separately, and reimbursement for
out-of-pocket expenses in conjunction with attendance at meetings. Accrued
directors' fees were $35,969 at June 30, 1999.
E. INVESTMENT TRANSACTIONS - Excluding short-term obligations, purchases of
investment securities aggregated $49,588,805 and sales of investment
securities aggregated $50,691,688 for the six months ended June 30, 1999.
On June 30, 1999, aggregate gross unrealized appreciation for all securities
in which there is an excess of value over tax cost was $201,693,913,
aggregate gross unrealized depreciation of all securities in which there is
an excess of tax cost over value was $1,562,487 and net unrealized
appreciation was $200,131,426.
On February 5, 1999, the Fund's Board of Directors authorized the Fund to
repurchase up to 1,000,000 shares of its Common Stock in open market
purchases. The Board of Directors also declared a long-term capital gains
distribution in the amount of $0.025 per share and an income distribution in
the amount of $0.03 per share for the remainder of the calendar year 1998.
The distributions were paid on February 23, 1999 to shareholders of record on
February 16, 1999. The ex-date was February 11, 1999.
F. FEDERAL INCOME TAX INFORMATION - Generally accepted accounting principles
require that certain components of net assets be reclassified to reflect
permanent differences between financial reporting and tax purposes. These
reclassifications have no effect on net assets or net asset values per share.
G. NET ASSETS - At June 30, 1999, net assets consisted of:
Paid-in capital $178,102,056
Undistributed net investment income 2,214,281
Undistributed net realized gain
from security transactions 23,341,278
Unrealized appreciation of investments 200,131,426
Unrealized currency translation loss (390,910)
------------
$403,398,131
============
1999 Annual Meeting of Stockholders -- Voting Results
At the May 19, 1999 Annual Meeting of Stockholders, Baron Hottinger and
Messrs. Didier Pineau-Valencienne and Samuel B. Witt III were re-elected to
the Board of Directors for three-year terms that expire in 2002. In
addition, the accounting firm Deloitte & Touche LLP was selected as the
Fund's independent auditors for the calendar year ending December 31, 1999.
Deloitte & Touche has served as the Fund's independent auditors since the
Fund's inception in 1987.
18
<PAGE>
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
Additional Information (Unaudited)
This report is sent to the stockholders of The Swiss Helvetia Fund, Inc. for
their information. It is not a prospectus, circular or representation intended
for use in the purchase or sale of shares of the Fund or of any securities
mentioned in this report.
STOCK REPURCHASE PROGRAM
On February 5, 1999, the Fund announced that its Board of Directors had
authorized the Fund to repurchase up to 1,000,000 shares of its common stock in
open market purchases to be effected on the New York Stock Exchange. The Board
of Directors and Management expect to make these purchases from time to time
during 1999. The principal purpose of the repurchases is to enhance stockholder
value by increasing the Fund's net asset value per share without creating a
meaningful adverse effect upon the Fund's expense ratio. This may also have the
effect of temporarily reducing the current discount of approximately 15 percent.
- --------------------------------------------------------------------------------
Notice is hereby given in accordance with section 23(c) of the Investment
Company Act of 1940 that the Fund may, from time to time, purchase shares of its
Common Stock in the open market in addition to the above program.
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CODE OF ETHICS
The Board of Directors of the Fund and the Advisor have adopted Codes of Ethics
pursuant to provisions of the Investment Company Act of 1940. The Codes of
Ethics apply to the personal investing activities of various individuals
including directors and officers of the Fund and designated officers, directors
and employees of the Advisor. The provisions of the Codes place restrictions on
individuals who are involved in managing the Fund's portfolio, who help execute
the portfolio manager's decisions or who come into possession of contemporaneous
information concerning the investment activities of the Fund.
The fundamental principle of the Codes of Ethics is that the individuals covered
by the Codes have a fiduciary responsibility to the Fund and its stockholders.
They are therefore required at all times to place the interests of the Fund and
the stockholders first and to conduct all personal securities transactions in a
manner so as to avoid any actual or potential conflict of interest or abuse of
their position of trust.
Portfolio managers and other individuals with knowledge of Fund investment
activities are prohibited from purchasing or selling a security during a
blackout period of 30 calendar days before and after the date on which the Fund
effects a trade in the same or a similar security. They are also prohibited from
engaging in short term trading of Swiss equity or equity linked securities.
Additionally, the Fund's portfolio managers are prohibited from participating in
any initial public offering or private placement of Swiss equity and equity
linked securities and other covered individuals must obtain prior clearance
before doing so.
Any individual who violates the provisions of the Codes is required to reverse
the transaction and to turn over any resulting profits to the Fund.
The Fund and the Advisor have adopted compliance procedures and have appointed
compliance officers to ensure that all covered individuals comply with the
Codes.
DISTRIBUTIONS
The following information summarizes all distributions declared by the Fund
during the six months ended June 30, 1999.
Domestic Ordinary Income --
Foreign Source Income .03
----
Total Ordinary Income .03
====
Long-Term Capital Gains .025
----
Total Distributions .055
====
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THE SWISS HELVETIA FUND, INC.
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Dividend Reinvestment Plan
THE PLAN
The Swiss Helvetia Fund's (the "Fund") Dividend Reinvestment Plan offers
you a convenient way to invest your income dividends and capital gains
distributions in additional shares of the Fund's common stock thereby increasing
your holdings of the Fund's shares. Participation in the Plan does not alter the
normal federal, state and local income tax consequences associated with income
dividends and capital gains distributions.
The Plan is designed to allow all stockholders an opportunity to
participate. Some of the Plan features are:
1. Dividend reinvestment automatically increases the number of shares you own.
2. Dividends and distributions are in additional shares at the lower of net
asset value or market price.
3. Shares purchased through the Plan are recorded in your account providing
protection against theft or destruction of share certificates.
4. You may terminate your Plan account at any time.
Not all brokerage firms holding shares in brokerage accounts permit
participation in dividend reinvestment plans such as the Plan, and even if your
brokerage firm does permit such participation, you may not be able to transfer
such shares to another broker who does not permit such participation. You are
encouraged to contact your brokerage firm to determine any restrictions upon
participation.
HOW DO I ENROLL IN THE PLAN?
To participate in the Fund's Dividend Reinvestment Plan, please contact
your broker or PFPC, Inc.
To start the Plan with a specific dividend, please forward the form to your
broker or PFPC 10 days prior to the record date for that dividend.
HOW DOES THE PLAN WORK?
When a dividend is declared, non-participants in the Plan will receive
cash. Plan participants will receive the equivalent in shares of the Fund valued
at the lower of the market price or net asset value as described below.
1. Whenever net asset value is equal to or less than market price by no more
than 5% at the time of valuation, you will be issued shares at net asset value.
2. If the net asset value is less than 95% of the market price on the valuation
date, you will be issued shares at 95% of the market price of shares on the
valuation date.
3. If net asset value exceeds the market price of shares on the valuation date,
PFPC, as agent for the participants, will buy shares on the open market on the
New York Stock Exchange or elsewhere, for your account.
If, before PFPC has completed its purchase, the market price exceeds the
net asset value of shares, the average per share purchase price paid by PFPC may
exceed the net asset value of shares, resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the Fund.
WILL THE ENTIRE AMOUNT OF MY DISTRIBUTION BE REINVESTED?
As a Plan participant, the entire amount of your distribution will be
reinvested. For any balance that is insufficient to purchase a whole share, the
amount will be credited to your account in fractional shares.
WILL STOCK CERTIFICATES BE ISSUED FOR TRANSACTIONS IN THE PLAN?
You will be issued a stock certificate upon request.
IS THERE ANY CHARGE TO PARTICIPATE IN THE PLAN?
There is no charge to participants for reinvesting dividends or
distributions. PFPC's fee for handling the reinvestment of dividends and
distributions will be paid by the Fund. There will be no brokerage charge to
stockholders for shares issued directly by the Fund as a result of dividends or
distributions payable either in stock or cash. Each participant, however, will
pay a pro rata share of brokerage commissions incurred with respect to PFPC's
open market purchases in connection with the reinvestment of dividends or
distributions.
HOW CAN I DISCONTINUE MY PARTICIPATION IN THE PLAN?
You may terminate your account under the Plan by notifying PFPC in writing.
Upon termination, you will receive a certificate for the number of shares held
in the Plan.
WHERE CAN I DIRECT MY QUESTIONS AND CORRESPONDENCE?
Questions and correspondence concerning the Plan should be directed to:
PFPC, Inc.
P.O. Box 8950
Wilmington, Delaware, 19899
1-800-852-4750
20
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THE SWISS HELVETIA FUND, INC.
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AMENDMENT TO BY-LAWS
At the Board of Directors Meting held on March 18, 1999, the Board adopted an
amendment to its By-Laws which requires among other things, that all matters,
including the nomination and election of Directors, to be considered and brought
before any annual or special meeting of stockholders of the Fund shall be
limited to only such matters as shall properly be brought before such meeting in
compliance with the provisions of the amendment. The amendment provides, that
any stockholder nominee for director and any other stockholder proposal to be
considered at an annual or special meeting requires a written notice to be
provided to the Secretary of the Fund, in the case of an annual meeting, not
less than 90 nor more than 120 days prior to the first anniversary of the annual
meeting of stockholders for the preceding year and, in the case of a special
meeting, not later than the close of business on the 10th day following the day
on which the date of the special meeting is publicly announced or disclosed by
the Fund. The exact text of the amendment to the By-Laws has been filed with the
Securities and Exchange Commission.
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