SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
Commission Only (as permitted by
[_] Definitive Proxy Statement Rule 14a-6(e) (2))
[X] Definitive Additional Materials
[_] Soliciting Material Under Rule
14a-12
THE SWISS HELVETIA FUND, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
THE SWISS HELVETIA FUND, INC.
o Open-ending will provide some investors with a quick one-time profit at the
expense of long-term shareholders who will likely experience adverse tax
consequences, lower performance, higher expenses, dilution and could lead
to liquidation.
o Open-ending would likely result in significant sales of appreciated
portfolio securities, which in turn would expose stockholders to
significant taxable capital gains distributions.
o If the Fund were to sell only 50% of each of its holdings to raise
cash, then based on March 31, 2000 prices, net undistributed realized
capital gains would amount to $9.62 per remaining share, which amounts
to 55.52% of net asset value.
o The closed-end format has permitted Management to achieve returns that have
exceeded the Fund's benchmark index, the Swiss Performance Index, in each
of the last three years. Moreover, the Fund has outperformed each fund in
its peer group in each of the past two years and achieved returns
comparable to its peer group in 1997.
o Open-ending could cause the Fund to dispose of investments that
Management would like to retain which, even if new investor funds
became available, might not be eligible for repurchase because of U.S.
tax law constraints. Open-ending would also require the Fund to keep a
portion of its assets uninvested and on hand in cash to satisfy
redemptions, thus further reducing returns.
o Increased expenses would result from (i) spreading the Fund's fixed
expenses over a smaller asset base and (ii) new, ongoing expenses
associated with establishing and maintaining a distribution network for the
Fund's shares. Management estimates that a 50% reduction in assets and a
minimum 25 basis point 12b-1 distribution fee would increase expenses over
50% from 1.11% to 1.71%.
o The Fund's expense ratio has for years been among the lowest of
European closed-end funds.
o Even if the Fund open-ends, there is no assurance satisfactory
distribution arrangements could be achieved at rates significantly
greater than 25 basis points.
<PAGE>
o The discount has positive implications for reinvestment of dividends and
distributions, as shareholders can reinvest at the discounted price under a
closed- end structure, whereas reinvestment in shares of the fund under an
open-end structure would be at NAV.
o To enhance stockholder value, the Fund instituted a share buy-back
program in 1999, which continues today. In 1999, buy backs added .67%
or $2.8 million to year-end net asset value.
o If heavy stockholder withdrawals are experienced, the Fund will be forced
to shrink dramatically the portfolio - possibly by 1/4 or more. 29% of the
Fund's portfolio is currently in small and mid-cap stocks. Given the
limited liquidity of the Swiss equity markets generally and, in particular
the Fund's small and mid- cap portfolio, such sales would likely result in
decreased prices and reduce the net asset value for remaining investors.
o If withdrawals are too large, the assets could decrease to a level that
the Fund may find is no longer economically feasible to continue
operation.
o The expense of converting is estimated to be at least $350,000.
-2-
