THE SWISS
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HELVETIA
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FUND, INC.
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www.swz.com
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
QUARTERLY REPORT
FOR THE PERIOD ENDED
SEPTEMBER 30, 2000
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THE SWISS HELVETIA FUND, INC.
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Directors and Officers
Paul Hottinguer
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
Eric R. Gabus
VICE CHAIRMAN (NON OFFICER)
Alexandre de Takacsy
DIRECTOR
Claude Frey
DIRECTOR
Baron Hottinger
DIRECTOR
Claude Mosseri-Marlio
DIRECTOR
Didier Pineau-Valencienne
DIRECTOR
Stephen K. West, Esq.
DIRECTOR
Samuel B. Witt III, Esq.
DIRECTOR
Rodolphe E. Hottinger
PRESIDENT AND
CHIEF OPERATING OFFICER
Rudolf Millisits
SENIOR VICE PRESIDENT
Philippe Comby
VICE PRESIDENT
Sharon Kanovsky
VICE PRESIDENT
Edward J. Veilleux
VICE PRESIDENT AND TREASURER
Paul R. Brenner, Esq.
SECRETARY
The Investment Advisor
The Fund is managed by Hottinger Capital Corp., which is 100% owned by the
Hottinger Group.
The Hottinger Group dates back to Banque Hottinguer which was formed in Paris in
1786, and is one of Europe's oldest private banking firms. The Hottinger Group
has remained under the control of the Hottinger family through seven
generations. It has offices in New York, Zurich, Luxembourg, Geneva and the
Bahamas.
EXECUTIVE OFFICES
The Swiss Helvetia Fund, Inc.
630 Fifth Avenue
Suite 915
New York, New York 10111-0001
1-888-SWISS-00 (1-888-794-7700)
(212) 332-2760
FOR INQUIRIES AND REPORTS:
1-888-SWISS-00 (1-888-794-7700)
Fax (212)332-7931
WEBSITE ADDRESS
http://www.swz.com
The Fund
The Swiss Helvetia Fund, Inc. is a non-diversified, closed-end investment
company whose objective is to seek long-term capital appreciation through
investment in equity and equity-linked securities of Swiss companies. The Fund,
listed on the New York Stock Exchange under the symbol "SWZ," is managed by
Hottinger Capital Corp.
Net Asset Value is calculated daily by 6:00 P.M. (Eastern Standard Time). The
most recent calculation is available by calling 1-888-SWISS-00 or by accessing
our Website. Weekly Net Asset Value is also published in BARRON'S, the Monday
edition of THE WALL STREET JOURNAL and the Sunday edition of THE NEW YORK TIMES.
INVESTMENT ADVISOR
Hottinger Capital Corp.
630 Fifth Avenue
Suite 915
New York, New York 10111-0001
(212) 332-7930
ADMINISTRATOR
Investment Company Capital Corp.
CUSTODIAN
PFPC Trust Company
TRANSFER AGENT
PFPC,Inc.
(800) 331-1710
LEGAL COUNSEL
Paul R. Brenner, Esq. and
Salans Hertzfeld Heilbronn
Christy & Viener
INDEPENDENT AUDITORS
Deloitte & Touche LLP
For Dividend Reinvestment Information, see page 18.
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THE SWISS HELVETIA FUND, INC.
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Letter to Stockholders
ECONOMIC DEVELOPMENTS IN THE THIRD QUARTER OF 2000.
Switzerland's nominal GDP year-on-year growth rate held steady at +3.8%
during the third quarter. As inflation has been picking up slightly throughout
Europe and the U.S., however, real GDP growth rates have ticked downward a bit.
With lower inflation, Switzerland's real GDP growth of +1.5% is a positive
development especially when compared to pan-Europe's meager +0.8% real GDP
growth rate.
[GRAPH OMITTED]
PLOT POINTS FOLLOW
SWITZERLAND NOMINAL, REAL GDP
GROWTH AND CPI (%), QUARTERLY
Nominal GDP Growth CPI Yr/Yr Real GDP Growth
3/31/1996 0.4 0.9 -0.5
6/30/1996 0.5 0.7 -0.2
9/30/1996 0.4 0.6 -0.2
12/31/1996 -0.1 0.8 -0.9
3/31/1997 0 0.5 -0.5
6/30/1997 1.4 0.5 0.9
9/30/1997 2.4 0.4 2
12/31/1997 3 0.4 2.6
3/31/1998 3.4 0 3.4
6/30/1998 2.7 0.1 2.6
9/30/1998 2.2 0.1 2.1
12/31/1998 1.2 -0.2 1.4
3/31/1999 0.6 0.5 0.1
6/30/1999 0.8 0.6 0.2
9/30/1999 1.6 1.2 0.4
12/31/1999 3.1 1.7 1.4
3/31/2000 3.9 1.5 2.4
6/30/2000 3.8 1.9 1.9
9/30/00 3.8 2.3 1.5
The main reasons for the pick-up of inflation, especially in Europe, are
twofold: the steady rise in crude oil prices since 1999 and the weakness of the
euro -- which has also had an effect on the Swiss franc/U.S. dollar exchange
rate over the past two years.
Switzerland's downward trending unemployment rate was about 2%, which was
even lower than the 4% rate for the heated economy of the U.S. Two other demand
side macroeconomic figures for Switzerland -- namely consumer confidence and
retail sales -- also continued to show strength, as the chart below shows.
[GRAPH OMITTED]
PLOT POINTS FOLLOW
SWISS DEMAND INDICATORS
Unemployment Rate Retail Sales
(Left Scale) (Left Scale)
1/31/99 3.5 -2.6
2/28/99 3.4 0.9
3/31/99 3.1 9.2
4/30/99 2.9 -2.7
5/31/99 2.7 -3.3
6/30/99 2.6 4.9
7/31/99 2.5 2
8/31/99 2.4 4.8
9/30/99 2.3 -0.1
10/31/99 2.3 -0.7
11/30/99 2.4 5.5
12/31/99 2.5 3.3
1/31/00 2.6 2.9
2/29/00 2.4 5.4
3/31/00 2.3 -0.6
4/30/99 2.1 3.8
5/31/00 1.9 7.8
6/30/00 1.8 -0.6
7/31/00 1.8 -1.1
8/31/00 1.8 4.4
9/30/00 1.7
Consumer confidence
(Right Scale)
1/31/99 2
2/28/99 2
3/31/99 2
4/30/99 1
5/31/99 0
6/30/99 -2
7/31/99 1
8/31/99 3
9/30/99 4
10/31/99 5
11/30/99 6.5
12/31/99 8
1/31/00 10
2/29/00 14
3/31/00 18
4/30/99 19
5/31/00 20
6/30/00 19
7/31/00 18
8/31/00 19
9/30/00
CURRENCY FLUCTUATION
The euro made new lows against the U.S. dollar despite sustained economic
growth. Flows of capital into the U.S. dollar were supported by a large number
of acquisitions involving European companies bidding up for U.S. assets. High
oil prices were another factor providing support for the U.S. dollar. Since the
U.S. economy continued on its path of high growth and strong productivity, it
was able to reward foreign investors with high rates of return. Any signs of a
slowdown in U.S. economic activity might trigger an outflow of foreign money,
especially given the comparatively higher valuations for U.S. technology stocks.
The problematic U.S. trade deficit does not help matters either.
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THE SWISS HELVETIA FUND, INC.
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On the other side of the Atlantic Ocean, the euro continued to suffer from
a lack of leadership and credibility at the European Central Bank (ECB). The low
visibility of ECB monetary policy is due to a perceived lack of independence by
European political leaders. This growth of uncertainty has resulted in a
build-up in risk premium for the new currency.
The Swiss franc held up better than the euro against the U.S. dollar,
losing only 8.5% versus 12.3% for the euro year-to-date. The Swiss National Bank
does not have the same credibility problem as its European counterpart. Swiss
monetary authorities did not follow the ECB when it lifted its interest rates in
early September, for example. The Swiss franc's three month LIBOR (London Inter
Bank Offered Rate) remained relatively unchanged, trading within the 3-4%
fluctuation band previously established by the Swiss National Bank. Inflationary
pressures also remained subdued in Switzerland because the cost of imported
goods declined in general, except for energy costs, as the Swiss franc
strengthened against the euro (two-thirds of Switzerland's
[GRAPH OMITTED]
PLOT POINTS FOLLOW
SWISS FRANC VS EURO AND U.S.$
CHF/Euro CHF/US$
1/29/99 1.61 1.42
2/26/99 1.6 1.45
3/31/99 1.6 1.48
4/30/99 1.61 1.53
5/31/99 1.59 1.53
6/30/99 1.6 1.55
7/30/99 1.6 1.49
8/31/99 1.6 1.51
9/30/99 1.6 1.5
10/29/99 1.6 1.52
11/30/99 1.6 1.59
12/31/99 1.6 1.59
1/31/00 1.61 1.66
2/29/00 1.61 1.67
3/31/00 1.59 1.67
4/28/00 1.56 1.72
5/31/00 1.58 1.68
6/30/00 1.56 1.63
7/31/00 1.55 1.67
8/31/00 1.55 1.74
9/29/00 1.52 1.72
foreign trade is with euro-zone countries). The Swiss stock market could
continue to benefit from Government bond yields which are lower than the bond
yields of members of the European Monetary Union.
THE SWISS STOCK MARKET IN REVIEW
The currency factor has had a profound impact on dollar-based returns of
European stocks, and Switzerland's equities markets are no exception. Since
January 1999, for example, the cumulative percentage gains of the Swiss
Performance Index in Swiss franc terms (+19.7%) have exceeded the S&P 500 Index
(+12.3%). In U.S. dollar terms, however, the SPI's performance has been less
impressive. Nevertheless, the performance of the Swiss market for the first
three quarters of this year was superior to its European peers in both local and
U.S. dollar terms, and to the Dow Jones Industrial Average in U.S. dollar terms.
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GLOBAL EQUITY INDEX PERFORMANCES
YEAR-TO-DATE (TO 9/30/00)
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U.S.$
INDEX LOCAL TERMS
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DOW JONES INDUSTRIALS -- U.S. -7.4% -7.4%
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S&P 500 -- U.S. -2.2% -2.2%
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NASD COMPOSITE -- U.S. -9.7% -9.7%
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FTSE 100 -- U.K. -9.2% -18.0%
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CAC 40 -- FRANCE 5.2% -7.3%
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DAX INDEX -- GERMANY -2.3% -14.8%
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IBEX INDEX -- SPAIN -5.9% -18.4%
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MIB30 INDEX -- ITALY 5.4% -7.1%
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AEXINDEX -- NETHERLANDS -1.5% -14.0%
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SPI INDEX -- SWISS 8.0% -3.1%
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THE SWISS HELVETIA FUND, INC.
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The Swiss Helvetia Fund benefited from its dual investment strategy of
exposure to fast growing mid- and small-cap companies which tend to be less
liquid than large-cap companies, as well as to allocations to the more defensive
large-cap blue chip sectors (characterized by lower volatility, greater liq-
uidity and higher earnings visibility). The Fund outperformed its benchmark,
Swiss Performance Index, with a year-to-date NAV return of 12.44% versus 7.98%
(in Swiss franc
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SWISS EQUITY INDEX COMPARISONS
YEAR-TO-DATE (TO 9/30/00)
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INDEX LOCAL $ TERMS
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SPI INDEX 8.0% -3.1%
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SPISMC INDEX 27.38% 37.4%
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SWISS HELVETIA NAV 12.4% 3.8%
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SWISS HELVETIA MARKET PRICE 11.6% 3.0%
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SPI PERFORMANCE BY SECTORS IN LOCAL CURRENCY FOR THE THIRD QUARTER.
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SWISS PERFORMANCE INDEX +2.46%
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MISCELLANEOUS INDUSTRIALS +18.13%
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FOOD +9.80%
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INSURANCE +4.80%
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UTILITIES +4.13%
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CHEMICALS AND PHARMACEUTICALS +1.79%
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MACHINERY +1.32%
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ELECTRONICS AND ELECTRICAL ENGINEERING +0.78%
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BANKS +0.30%
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TRANSPORTATION -0.55%
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RETAILING -0.09%
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MISCELLANEOUS SERVICES -5.22%
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BUILDING MATERIAL AND CONSTRUCTION -7.92%
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terms). The price per share return for stockholders of the Fund was 3.04% (in
U.S. dollar terms) which beat the S&P 500 Index return of -2.22% year-to-date.
Swiss machinery companies with a growing exposure to the telecommunication
sector performed the best during the quarter due to strong earnings and
favorable valuations.
The food sector also performed well mainly due to Nestle's high internal
growth rate and operating margins.
The insurance sector benefited from expectations of a less competitive
pricing environment and, like the healthcare sector, from a defensive shift of
allocations away from technology shares in the U.S.
Growth stocks in the mid-cap segment of the market, particularly in the
electronics and electrical engineering sector, lived up to market expectations.
Nevertheless, this sector was penalized by the negative performance of ABB,
still lacking convincing sales growth.
Cyclical stocks under-performed the market during the third quarter.
Specialty chemical stocks and construction & building material stocks were hurt
by rising raw material costs and by expectations of a peak in global economic
growth.
On the other side, the so-called defensive stocks performed especially
well. Novartis, in particular, delivered results at the top end of market
expectations, showing strong performance from its younger products.
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In the miscellaneous services sector, weaker earnings and operating margins
posted by Swisscom and weakness in generously valued shares of Adecco, the
global leader in staffing services, caused the group to under-perform the SPI.
The earnings reports in the banking sector exceeded expectations. Among the
blue chip bank stocks, there were signs of a turnaround in UBS' fiscal
performance. Mid-cap asset management firms, on the other hand, continued to
benefit from the healthy trend in asset accumulation, a development that is
occurring throughout western Europe.
THE SWISS MARKET INDEX (SMI) READJUSTMENTS
The final day of the quarter was especially volatile, as twenty-one of the
twenty-four members of the SMI (the blue chips oriented index) declined prior to
the readjustment of the index weightings for October 1st. The Swiss Exchange
decided to increase the number of companies in the SMI index. This readjustment
was also designed to add technology stocks into the index for the first time.
The new entrants included such technology names as Unaxis Holding AG and
Kudelski SA, as well as bank Julius Baer Holding, luxury goods maker Companie
Financiere Richemont, and the biotechnology firm Serono SA. Big changes in index
weighted portfolios caused the quarter end volatility.
CORPORATE ACTIVITY DURING THE QUARTER
Swiss companies were very active in mergers and acquisitions during the
recent quarter. The primary focus was to secure long-term growth of business
rather than cut costs. The market reaction was positive in the majority of
cases.
The main example was the announced acquisition of Paine Webber by UBS at a
cost of $10.8 billion. The merger is intended to provide the Swiss financial
institution with a strong distribution network in the fast growing market of
management of retirement accounts. Later in the quarter, Credit Suisse agreed to
buy the U.S. investment banking firm, Donaldson Lufkin & Jenrette, for $13.4
billion in cash and stock, strengthening its investment banking arm.
Serono, the largest European biotechnology company, successfully priced its
global share offering on the New York Stock Exchange. $1.8 billion were raised
in the form of bearer shares (Swiss listing) and American Depository Receipts
(ADR). This leaves the door open for acquisitions.
Novartis received clearance from the Federal Trade Commission for its
planned acquisition of Wesley Jessen VisionCare Inc. The company will be
incorporated into the Ciba Vision division. The combined entities had pro-forma
sales of $1.4 billion and employ 8,900 people. In addition, Novartis
5
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THE SWISS HELVETIA FUND, INC.
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and Astra Zeneca received the green light from the European Commission for the
planned merger of their respective agribusiness and agrochemical activities.
The Swiss mid-sized companies were also very active. Phoenix Mecano
expanded its business in the fast growing market of electronic packaging
products for mobile phone infrastructure outfitters. Swisslog, the Swiss supply
chain solution specialist, has also been busy concluding several acquisitions
during the quarter to expand its clients' portfolio and sales force. Unaxis, the
provider of components and surface technology for the semiconductor and data
storage market, acquired a 56% share of Esec, the Swiss semiconductor equipment
manufacturer.
OUTLOOK FOR THE SWISS MARKET
Management of the Fund believes that its investment strategy should capture
much of the future value being created in the Swiss market.
Mid- and small-cap companies should continue to exhibit above-average
earnings growth. Additional gains for some of these companies are also likely
due to the consolidation of many industries throughout Europe as many privately
held companies go up for sale. Management believes that many Swiss growth
companies are well positioned to benefit from foreign investors looking to
diversify outside the United States. Many mid- and small-cap companies in
Switzerland have long operating histories of consistently positive earnings. The
interest they spark stems from their restructuring and their reorientation
towards fast growing businesses. They have been able to leverage their
traditional know-how into new industries and to benefit from experienced
managers with solid international track records. Mid- and small-cap members of
the Swiss market are also highly competitive because they have had to compete
globally early on, in order to capture business opportunities outside a
relatively small domestic market.
The blue chips should continue to benefit from the defensive posture that
pervades the international equities markets, as global growth decelerates
slightly and the volatility of key stock indices increases. In addition, the
managements of these companies have shown that they are actively expanding their
core businesses in order to maintain strong positions in the ever more
competitive international scene.
Overall, the Swiss stock market has a favorable valuation. Due to
relatively low interest rates and moderate price-to-earnings multiples, the
premium offered to investors holding Swiss equities is higher than in the U.S.
and elsewhere in continental Europe.
STOCK REPURCHASE PROGRAM
During this year, your Board of Directors directed several variations in
the rate of purchases under the Fund's Stock Repurchase Program in order to
determine the nature and extent of the effect of the Program on the mar-
6
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THE SWISS HELVETIA FUND, INC.
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ket discount, accretion to net asset value and the expense ratio.
Notwithstanding the inconclusive results, which are summarized below, the Board
has determined to continue the Program through this year so long as, in the
Board's judgment, it would otherwise be beneficial.
YEAR TO DATE SUMMARY. From the beginning of 2000 through September 30 and
thereafter through November 3, 2000, the Fund repurchased 1,331,800 of its
shares out a total of up to 2,000,000 shares authorized for repurchase during
2000 by the Board of Directors under the Fund's Stock Repurchase Program. During
this period, the average repurchase price was $13.86 per share at an average
discount of 20.44% and the Fund purchased an average of 6,626 shares per trading
day. These repurchases increased the Fund's net asset value by $4,514,810
without having had a material adverse effect upon the Fund's expense ratio. The
average discount during 2000 through November 3, 2000 was 20.37%.
TEST PERIODS. Your Board authorized the following test periods during which
the rate of purchases was varied. Throughout each of these periods your Board
paid careful attention to the discount.
<TABLE>
<CAPTION>
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JANUARY 1 - JUNE 6 -- BASE RATE OF PURCHASES (108 TRADING DAYS)
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Discount Average Rate % of Average
Range Discount at of Purchases Average Trading Trading Volume
Shares During Beginning and Per Volume Per Due to Fund
Repurchased the Period End of Period Trading Day Trading Day Repurchases
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
513,900 16.77% to 24.4% 22.49% - 21.31% 4,758 46,754 10.18%
---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
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JUNE 7 - JULY 7 -- AGGRESSIVE RATE OFPURCHASES (22 TRADING DAYS)
---------------------------------------------------------------------------------------------------------------
Discount Average Rate % of Average
Range Discount at of Purchases Average Trading Trading Volume
Shares During Beginning and Per Volume Per Due to Fund
Repurchased the Period End of Period Trading Day Trading Day Repurchases
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
317,800 18.31% to 21.92% 21.66% - 19.14% 14,445 33,736 42.82%
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</TABLE>
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<TABLE>
<CAPTION>
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JULY 10 - SEPTEMBER 22 -- ALL PURCHASES SUSPENDED (54 TRADING DAYS)
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Discount Average Rate % of Average
Range Discount at of Purchases Average Trading Trading Volume
Shares During Beginning and Per Volume Per Due to Fund
Repurchased the Period End of Period Trading Day Trading Day Repurchases
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0 18.36% to 22.44% 19.94% - 22.44% 0 17,007 0%
---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
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SEPTEMBER 25 - OCTOBER 16 -- AGGRESSIVE PURCHASES RESUMED (16 TRADING DAYS)
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Discount Average Rate % of Average
Range Discount at of Purchases Average Trading Trading Volume
Shares During Beginning and Per Volume Per Due to Fund
Repurchased the Period End of Period Trading Day Trading Day Repurchases
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
500,100 17.23% to 22.05% 21.14% - 17.23% 31,256 49,575 63.04%
---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
OCTOBER 17 - NOVEMBER 3 -- ALL PURCHASES SUSPENDED (14 TRADING DAYS)
---------------------------------------------------------------------------------------------------------------
Discount Average Rate % of Average
Range Discount at of Purchases Average Trading Trading Volume
Shares During Beginning and Per Volume Per Due to Fund
Repurchased the Period End of Period Trading Day Trading Day Repurchases
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0 17.13% to 20.71% 18.29% - 20.71% 0 20,800 0%
---------------------------------------------------------------------------------------------------------------
</TABLE>
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AGGREGATE TEST PERIOD -- JANUARY 1 - NOVEMBER 3
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During the period from January 1 through November 3, the Stock Repurchase
Program:
o resulted in an increase in Net Asset Value of $4,514,810, or $0.19 per share
based on the number of shares outstanding on November 3;
o resulted in an increase in the expense ratio of less than $0.01 per share
based upon the January 1, 2000 net asset value and the number of shares
outstanding on November 3, 2000; and
o through the course of the year, SWZ generated more gains than losses due to
the selling of securities for investment purposes.
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THE SWISS HELVETIA FUND, INC.
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CONCLUSION. Notwithstanding the lack of any sustained impact of the Stock
Repurchase Program on the market discount and the inconclusive connection
between the Stock Repurchase Program and the amount of the discount, your Board
of Directors has determined to continue the Program at least through this year
so long as it believes the benefits to stockholders of the accretive effect of
the Program on net asset value outweigh any negative effect the Program may have
on the Fund's expense ratio and of capital gains that may be realized from sales
of portfolio securities to raise cash for repurchases.
Sincerely,
[/S/ SIGNATURE PAUL HOTTINGUER]
Paul Hottinguer
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
[/S/ SIGNATURE RODOLPHE HOTTINGER]
Rodolphe Hottinger
PRESIDENT AND CHIEF OPERATING OFFICER
November 3, 2000
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THE SWISS HELVETIA FUND, INC.
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Statement of Net Assets September 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- 95.7%
BANKS -- 14.9%
2,210 BANK SARASIN & CIE 2
REGISTERED SHARES $ 7,447,783 1.7%
Specializes in investment
advisor services and
portfolio management for
private and institutional
customers in Europe. (cost
$1,858,194)
3,600 BANQUE CANTONALE VAUDOISE 2
BEARER SHARES 1,226,775 0.3
Attracts deposits and offers
real estate mortgages and
commercial loans as well as
investment counseling and
portfolio management.
(cost $1,227,323)
112,000 CREDIT SUISSE GROUP 1,2
REGISTERED SHARES 20,965,517 4.9
A global financial services
institution whose main
holding is Credit Suisse.
(cost $7,207,699)
1,250 JULIUS BAER HOLDINGS LTD.2
BEARER SHARES 6,494,494 1.5
Banking group specializing
in asset management,
investment consulting and
securities trading. (cost
$1,464,794)
1,500 OZ HOLDING AG 2
BEARER SHARES 1,964,648 0.5
Provides brokerage and
banking services,
specializing in Swiss
futures and options. (cost
$1,365,178)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
BANKS -- (CONTINUED)
145,000 UBS AG 1,2
REGISTERED SHARES $ 19,327,731 4.5%
Product of the merger of
Basel-based Swiss Bank Corp.
and Zurich-based Union Bank
of Switzerland. The group
operates globally and has
three core business units:
UBS Switzerland, UBS Asset
management and UBS Warburg.
(cost $8,314,606)
2,400 VONTOBEL HOLDING LTD.2
BEARER SHARES 6,592,872 1.5
Provides investment, banking
and consulting services to
private and institutional
customers. (cost $4,344,991)
---------------------
64,019,820 14.9
BUILDING CONTRACTORS & MATERIALS -- 1.3%
7,000 GEBERIT AG 2
REGISTERED SHARES 2,036,511 0.5
Manufactures and supplies
water supply pipes and
fittings, installation
systems, drainage and
flushing systems for the
commercial and residential
construction markets.
(cost $1,793,713)
3,300 HOLDERBANK FINANCIERE GLARUS AG 2
BEARER SHARES 3,444,393 0.8
Large cement producer with
worldwide operations. (cost
$2,439,493)
---------------------
5,480,904 1.3
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THE SWISS HELVETIA FUND, INC.
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Statement of Net Assets (continued) September 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
CHEMICALS -- 0.8%
1,000 BACHEM AG 2
REGISTERED SHARES $ 1,952,478 0.5%
Produces bulk peptides which
are used in the
manufacturing of drugs and
for research purposes. (cost
$1,980,583)
4,523 SIKA FINANZ AG 2
BEARER SHARES 1,318,498 0.3
Leading producer of
construction chemicals.
(cost $1,132,594)
----------------------
3,270,976 0.8
ELECTRICAL ENGINEERING & ELECTRONICS -- 17.0%
170,500 ABB LTD.1,2
The holding company for ABB 16,600,406 3.8
group which is
one of the largest
electrical engineering firms
in the world. (cost
$12,586,263)
1,270 ASCOM HOLDING AG 2
BEARER SHARES 4,265,227 1.0
Manufactures
telecommunications service
automation equipment and
systems, as well as power
systems. (cost $4,681,819)
2,645 BELIMO AUTOMATION AG 2
REGISTERED SHARES 1,187,989 0.3
World market leader in
damper and volume control
actuators for ventilation
and air conditioning
equipment. (cost $634,557)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
ELECTRICAL ENGINEERING & ELECTRONICS -- (CONTINUED)
4,000 DISETRONIC HOLDING AG
REGISTERED SHARES $ 4,079,977 0.9%
Develops, manufactures and
markets infusion (insulin
pumps) and injection
systems. (cost $3,483,780)
2,400 KUDELSKI SA 2
BEARER SHARES 3,678,934 0.8
Develops, manufactures and
markets conditional access
systems and smartcards for
digital and analog TV. (cost
$2,590,763)
9,200 LEICA GEOSYSTEMS AG 2
REGISTERED SHARES 2,884,497 0.7
Manufactures surveying and
mapping equipment. Produces
devices that capture and
process spatial data. (cost
$2,603,601)
11,845 LOGITECH INTERNATIONAL SA 2
REGISTERED SHARES 3,734,384 0.9
Manufactures personal
computer input devices, as
well as producing
trackballs, desktop
publishing programs, and
related software.
(cost $759,782)
5,700 MICRONAS SEMICONDUCTOR
REGISTERED SHARES 3,039,119 0.7
Develops and manufactures a
wide range of semiconductors
and modules used by the
telecommunications and
automotive industries.
(cost $3,127,679)
11
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THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
ELECTRICAL ENGINEERING & ELECTRONICS -- (CONTINUED)
1,108 PHONAK HOLDING AG
REGISTERED SHARES $ 3,724,370 0.9%
Designs and produces
wireless analog and digital
hearing aids and
miniaturized voice
communications systems.
(cost $3,458,783)
4,000 SAIA-BURGESS ELECTRONICS HOLDING AG
REGISTERED SHARES 1,771,081 0.4
Develops and produces
switches, motors and
programmable control
devices. The company's
products are mainly used in
the automobile, heating &
air conditioning and
telecommunications
industries.
(cost $975,888)
3,300 SCHAFFNER HOLDING AG 2
REGISTERED SHARES 887,395 0.2
Develops, manufactures and
markets electrical
components and test
equipment in the area of EMC
(Electro Magnetic
Compatibility).
(cost $897,050)
22,160 SWISSLOG HOLDING, INC.1,2
REGISTERED SHARES 13,715,955 3.2
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 $6,580,614)
5,068 TECAN AG 2
REGISTERED SHARES 5,404,300 1.3
Manufactures and distributes
components and complete
solutions for the automation
of laboratory processes.
(cost $2,721,991)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
ELECTRICAL ENGINEERING & ELECTRONICS -- (CONTINUED)
5,800 THE SWATCH GROUP OF SWITZERLAND 2
BEARER SHARES $ 8,403,361 1.9%
Manufactures watches, watch
components and
microelectronics. Produces
machine tools for
scientific, medical and
industrial use.
(cost $4,479,569)
----------------------
73,376,995 17.0
FOOD & LUXURY GOODS -- 11.7%
300 LINDT & SPRUNGLI AG 2
REGISTERED SHARES 1,613,445 0.4
Major manufacturer of
premium Swiss chocolates.
(cost $1,196,399)
23,300 NESTLE AG 1,2
REGISTERED SHARES 48,611,997 11.3
Largest food and beverage
processing company in the
world. (cost $15,482,950)
---------------------
50,225,442 11.7
INSURANCE -- 8.6%
3,000 BALOISE HOLDING 2
REGISTERED SHARES 2,920,892 0.7
Medium-sized insurer active
in all sectors of insurance.
(cost $169,640)
12
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
INSURANCE -- (CONTINUED)
11,200 SCHWEIZERISCHE RUCKVERSICHERUNGS-
GESELLSCHAFT (SWISS REINSURANCE
COMPANY)1
REGISTERED SHARES $ 21,419,878 5.0%
Second largest reinsurance
company in the world. (cost
$8,187,475)
27,600 ZURICH ALLIED LTD.1,2
REGISTERED SHARES 12,780,296 2.9
A large worldwide insurance
operator. (cost $4,479,814)
----------------------
37,121,066 8.6
LIFE SCIENCES -- 16.4%
46,000 NOVARTIS LTD.1,2
REGISTERED SHARES 70,646,190 16.4
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 $23,707,722)
---------------------
70,646,190 16.4
MACHINERY -- 2.8%
9,200 MIKRON HOLDING AG 2
REGISTERED SHARES 7,624,457 1.8
Machine tools and milling
machine producer. (cost
$3,231,586)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
MACHINERY -- (CONTINUED)
2,000 SCHINDLER HOLDING AG 2
REGISTERED SHARES $ 3,076,210 0.7%
One of the world's largest
elevator companies and a
leading Swiss machinery
enterprise. (cost
$2,547,610)
2,500 SULZER AG 2
REGISTERED SHARES 1,451,753 0.3
Manufactures and sells
industrial equipment,
machinery, and medical
devices. (cost $1,644,520)
---------------------
12,152,420 2.8
MISCELLANEOUS INDUSTRIES -- 3.6%
12,000 GRETAG-IMAGING HOLDING AG 2
REGISTERED SHARES 2,733,121 0.7
Manufactures image
processing equipment and
systems. (cost $1,100,502)
5,000 HUBER & SUHNER AG 2
REGISTERED SHARES 4,636,337 1.1
Manufactures a wide range of
products, extending from
cables for energy and
electrical transmission to
special products such as
rubber.
(cost $1,381,216)
15,000 KOMAX HOLDING AG 2
REGISTERED SHARES 1,321,356 0.3
Seller of wire processing
machines. Most important
markets are the car
industry, household
appliance industry,
telecommunication industry
as well as the electronics
industry.
(cost $589,052)
13
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Statement of Net Assets (continued) September 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
MISCELLANEOUS INDUSTRIES -- (CONTINUED)
4,800 PHOENIX MECANO AG 2
BEARER SHARES $ 3,199,073 0.7%
Leading Swiss packaging
manufacturer for the
mechanical engineering and
electronics industry. (cost
$2,725,762)
13,000 UNAXIS HOLDINGS 2
REGISTERED SHARES 3,631,411 0.8
Provider of systems and IT
services, including
semiconductors, data storage
and displays, as well as
surface technology and space
applications.
(cost $3,364,408)
---------------------
15,521,298 3.6
MISCELLANEOUS SERVICES -- 4.4%
10,000 ADECCO SA 2
BEARER SHARES 6,490,872 1.5
Leading personnel and
temporary employment
company. (cost $3,281,234)
2,950 COMPAGNIE FINANCIERE RICHEMONT AG 2
BEARER SHARES 8,881,629 2.1
Investment company with
principal interests in
luxury goods and tobacco.
(cost $2,308,734)
1,300 PUBLIGROUPE LTD.2
PARTICIPATION CERTIFICATES 824,978 0.2
Largest Swiss advertising
intermediary. (cost
$248,216)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
MISCELLANEOUS SERVICES -- (CONTINUED)
6,110 THINK TOOLS AG 2
REGISTERED SHARES $ 2,829,261 0.6%
Develops and markets
decision support software.
(cost $2,973,982)
---------------------
19,026,740 4.4
PHARMACEUTICALS -- 13.1%
6,500 ACTELION LTD.2
REGISTERED SHARES 3,070,125 0.7
Develops and markets
synthetic small-molecule
drugs against diseases
related to the endothelium.
(cost $1,529,506)
5,000 ROCHE HOLDINGS LTD.1,2
DIVIDEND RIGHTS CERTIFICATES 44,045,204 10.2
Worldwide pharmaceutical
company. (cost $11,106,076)
7,700 SERONO SA 1,2
BEARER SHARES 9,415,821 2.2
Develops and markets
biotechnology products.
(cost $2,017,543)
---------------------
56,531,150 13.1
14
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Statement of Net Assets (concluded) September 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
RETAILERS -- 1.1%
10,000 CHARLES VOEGELE HOLDING AG 2
BEARER SHARES $ 1,912,489 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 $1,462,733)
1,500 JELMOLI HOLDING LTD.2
BEARER SHARES 2,016,807 0.5
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)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
RETAILERS -- (CONTINUED)
4,000 VALORA HOLDING AG 2
REGISTERED SHARES $ 850,768 0.2%
Operates restaurants, food
vending machines and
specialty retail stores.
(cost $873,534)
----------------------
4,780,064 1.1
TOTAL COMMON STOCKS
(Cost $179,209,741) $412,153,065 95.7%
OTHER ASSETS IN EXCESS OF
LIABILITIES 18,529,004 4.3
---------------------
NET ASSETS APPLICABLE TO 23,757,537
SHARES OF COMMON STOCK
OUTSTANDING $430,682,069 100.0%
=====================
NET ASSET VALUE PER SHARE
($430,682,069 (DIVIDE)
23,757,537) $18.13
======
--------------------------------------------------------------------------------
1 ONE OF THE TEN LARGEST PORTFOLIO HOLDINGS.
2 NON-INCOME PRODUCING SECURITY FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30,
2000.
15
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Proxy Results (Unaudited)
At the Annual Meeting of Stockholders, held on May 19, 2000, the shares voted on
the three proposals presented to the stockholders were as follows:
1. TO ELECT THREE DIRECTORS.
WITHHELD/
FOR ABSTENTIONS
---------- -----------
Paul Hottinguer 19,147,093 2,825,916
Claude Mosseri-Marlio 19,135,550 2,837,459
Stephen K.West, Esq. 19,125,233 2,847,776
The following persons continue as Directors of the Fund: Eric R. Gabus,
Alexandre de Takacsy and Claude W. Frey (Terms expire in 2001); and The Baron
Hottinger, Didier Pineau-Valencienne and Samuel B. Witt, III, Esq. (Terms expire
in 2002).
2. TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT PUBLIC
AUDITORS OF THE FUND.
WITHHELD/ BROKER
FOR AGAINST ABSTENTIONS NO-VOTE
---------- ---------- ------------- ----------
19,353,425 131,669 2,487,913 2
3. TO CONSIDER A STOCKHOLDER ADVISORY PROPOSAL FOR THE BOARD OFDIRECTORS TO TAKE
THE STEPS NECESSARY TO CONVERT THE FUND TO AN OPEN-END FUND.
WITHHELD/ BROKER
FOR AGAINST ABSTENTIONS NO-VOTE
---------- ---------- ------------- ----------
6,526,945 8,202,454 533,589 6,710,021
Amendment to By-Laws
At a Board of Directors Meeting held on October 20, 2000, based upon a
recommendation of the Nominating Committee, the By-Laws of the Fund were amended
to formalize the existing qualification requirements for service on the Board of
Directors. The principle underlying the amendment is that the Fund's interests
are best served when its Directors have experience in matters relevant to the
Fund's investment business. The amendment provides that a nominee have relevant
experience and country-specific knowledge. The nominee must also have no
conflict with the interests of the Fund or its operations. The exact text of the
amendment to the By-Laws has been filed with the Securities and Exchange
Commission.
16
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
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 reinvested 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 required
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.
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 your broker or
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 8030
Boston, MA 02266-8030
1-800-331-7710
17
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