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
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED
JUNE 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
Edward J. Veilleux
VICE PRESIDENT AND TREASURER
Paul R. Brenner, Esq.
SECRETARY
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) 852-4750
LEGAL COUNSEL
Paul R. Brenner, Esq. and
Salans Hertzfeld Heilbronn
Christy & Viener
INDEPENDENT AUDITORS
Deloitte & Touche LLP
For Dividend Reinvestment Information, see page 21.
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.
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THE SWISS HELVETIA FUND, INC.
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Letter to Stockholders
ECONOMIC DEVELOPMENTS
Global growth has continued to improve. Despite six interest rate increases
by the Federal Reserve, the U.S. economy has remained strong. However, recent
signs of a slowdown have been emerging. Consumer debt is taking its toll and
inflation has been on the rise.
In Europe in general and Switzerland, in particular, economic growth
accelerated during the second quarter and Swiss GDP growth reached a level of
3.4%. There has not been such a pace in economic activity since 1990. In
reaction to this acceleration, the Swiss National Bank (SNB) adopted an
aggressive stance in setting its monetary policy. After raising interest rates
25 and then 50 basis points in the first quarter, the SNB increased the three
month LIBOR (LONDON INTER BANK OFFERED RATE) fluctuation band for the Swiss
franc by 50 basis points, to between 3% and 4%, in the month of June. This
action flattened the yield curve. While the 10-year government bond yield stayed
close to 4%, the one-year yield increased to 3.8%. The SNB this year has changed
its policy orientation. When it comes to implementing monetary policy, it will
no longer target the amount of liquidity, but rather, the level of interest
rates.
The Swiss unemployment rate subsided to 1.9% in May, the lowest level since
1992. Wage inflation was modest with a progression of only 0.2% in nominal
terms. Overall inflation remained in check despite higher energy costs. The
Consumer Price Index increase was 1.6% in May.
The strength of the U.S. economy and the interest rate differential between
the U.S. and Switzerland allowed the U.S. dollar to consolidate its early year
advance against the Swiss franc. However, for the quarter the Swiss Franc
appreciated 2% against the dollar reducing its loss against the U.S. currency to
4.5% for the year. The difference in real returns between the Swiss franc and
the U.S. dollar has been reduced by the recent actions of the SNB and by the
pick-up in the U.S. inflation. Real interest rates for the 10 year government
bonds are 1.8% for the Swiss currency against 2.3% for the U.S. currency.
IMPACT ON THE SWISS STOCK MARKET
After two years of weak performance compared to the U.S. and Continental
European markets, the Swiss Performance Index (SPI) came back strongly. This
happened despite the fact that a tighter monetary policy reduced money supply by
1.2% in absolute terms in March. A combination of lower valuations and lower
expectations for Swiss corporate earnings (with a higher potential of possible
earnings surprises) attracted international investors. In addition, portfolio
managers trying to reduce the risk profile of their investments were attracted
to the defensive nature of the Swiss top tier market with its low exposure to
economic slowdown. Year-to-date, the SPI was up 2.91% in U.S. dollar terms and
5.39% in Swiss
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THE SWISS HELVETIA FUND, INC.
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franc terms. The other good news was the resilience of the Swiss mid and small
cap segments in the face of Nasdaq's set back. Favorable valuations compared to
its international peers and a lower high tech component provided some downside
protection to the Swiss Small and Mid Cap Companies1 Index (SPISMC). This Index
has returned 21.94% year-to-date and 0.77% for the quarter in local currency
terms.
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SPI PERFORMANCE BY SECTORS IN LOCAL CURRENCY
PERFORMANCE
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Electronics & Electrical Engineering +17.1%
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Miscellaneous Services +8.0
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Building Materials & Construction -4.4
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Miscellaneous Industrial +15.8
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Machinery +17.6
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Retailers +5.3
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Banks +10.2
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Utilities +3.2
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Chemicals & Pharmaceuticals +1.9
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Foods +13.3
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Transportation -8.6
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Insurance -0.3
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CORPORATE RESULTS
The earnings picture for the Swiss market was very good overall. Positive
surprises came from the mid-sized asset managers which were able to beat the
high market expectations with continuous strength in their businesses. A better
pricing environment helped the insurers (especially with international exposure)
and cyclical industries have rebounded. In the blue chip segment UBS and
Novartis results came out higher than the modest market expectations. The
mid-cap growth stocks (semi-conductor, software, telecommunications
infrastructure and medical technology) justified the high hopes placed in their
earnings potential. Overall, the Fund benefited from its overweighting in the
mid-cap segment of the market. In particular, in the financial sector, holdings
like Vontobel Holdings Ltd., Julius Baer Holdings Ltd., and Bank Sarasin &Cie
outperformed their international peers.
THE SWISS HELVETIA FUND PERFORMANCE
The Fund continued to outperform the Swiss Performance Index. In addition,
Management efforts to create demand for Fund shares have encountered some modest
success with the share price outperforming the Net Asset Value over the period.
The Fund's stock has been a competitive investment vehicle providing a return of
6.5% over the Standard & Poors 500 Index.
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TOTAL RETURN PERFORMANCE* U.S. SWISS
FOR THE SIX MONTHS ENDED 6/30/00 DOLLARS FRANCS
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SWISS PERFORMANCE INDEX 2.91% 5.39%
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THE SWISS HELVETIA FUND BASED ON 4.50% 7.01%
NET ASSET VALUE
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THE SWISS HELVETIA FUND BASED ON 7.13% 9.71%
MARKET PRICE
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* PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that shares, when sold, may be worth more or
less than their original cost. These figures assume the reinvestment of
dividends and capital gain distributions. Returns less than one year are
cumulative.
The Swiss Performance Index is unmanaged.
1 The Swiss Small &Medium Companies Index is a total rate of return index of
stocks issued by Swiss companies whose shares are traded on the Electronic
Bourse System.
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CORPORATE ACTIVITY DURING THE QUARTER
UBS global shares and Novartis ADRs started to trade on the New York Stock
Exchange in May. Besides enlarging their shareholder base, the move should allow
both companies to use their stock for possible acquisitions in the United
States. Nestle reinforced its pharmaceutical division by acquiring Summit
Technology of the U.S. (a maker of medical laser systems). Zurich eliminated the
dual listing of its shares (Zurich Allied in Switzerland and Allied Zurich in
London) thereby improving both its liquidity and its chances to be included in
the European main indices. Roche completed the spin-off of its flavor and
fragrance business, Givaudan, which began trading as an independent company on
the Swiss Stock Exchange in May.
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THE SWISS HELVETIA FUND -- PORTFOLIO HOLDINGS PER INDUSTRY AS OF JUNE 30, 2000
(PERCENTAGES ARE BASED ON NET ASSET VALUE)
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Life Sciences 17.1%
Banks 15.5
Electrical Engineering &Electronics 14.5
Pharmaceuticals 14.0
Food &Luxury Goods 10.6
Insurance 8.6
Miscellaneous Services 5.6
Machinery 3.5
Building Contractors &Materials 2.4
Miscellaneous Industries 2.2
Chemicals 1.8
Retailers 1.6
Telecommunications 1.2
Transportation 0.2
Cash and Equivalents 1.2
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Total 100.0%
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OUTLOOK FOR THE SWISS MARKET
On the currency side, the Swiss franc could benefit from stronger growth in
Euroland, its main trading partner, and a possible soft landing of the U.S.
economy. However, the strong flow of funds out of Europe into U.S. equities,
coming either from the global asset allocation shift by international portfolio
managers or from merger & acquisition activities, should limit the downside
potential for the U.S. dollar. The Swiss economy is expected to show a
progression of 3% for 2000 and 2.5% for 2001. Market participants anticipate the
SNB to increase interest rates by an additional 25 basis point in the short
term.
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THE SWISS HELVETIA FUND -- TEN LARGEST HOLDINGS AS OF JUNE 30, 2000 (PERCENTAGES
ARE BASED ON NET ASSET VALUE)
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COST MARKET VALUE % OF TOTAL
IN U.S.$ IN U.S.$ NET ASSETS
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1. Novartis Ltd. $24,690,092 $ 74,602,427 17.1%
2. Roche Holdings Ltd. 13,091,249 51,590,045 11.8
3. Nestle AG 13,121,037 44,429,938 10.2
4. ABB Ltd. 14,539,020 22,380,624 5.1
5. Credit Suisse Group 7,207,699 22,277,798 5.1
6. Swiss Reinsurance
Company 5,838,682 20,381,268 4.7
7. UBS AG 7,241,045 20,216,992 4.7
8. Zurich Allied Ltd. 4,691,524 14,278,166 3.2
9. Adecco SA 5,142,887 12,743,656 2.9
10. Logitech International
SA 2,577,850 9,607,392 2.2
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Total $98,141,085 $292,508,306 67.0%
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Despite the outlook for higher interest rates, Management expects the Swiss
market to perform well for the rest of the year. We base this outlook on a
decent valuation of Swiss companies (the average price earnings multiples have
not expanded since the Asian crisis)
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THE SWISS HELVETIA FUND, INC.
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THE SWISS HELVETIA FUND --
TEN ISSUES HAVING GREATEST APPRECIATION IN 2000 1
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Market Price Market Price
per share per share
in U.S. $ in U.S. $ %
as of as of Appreciation
12/31/99 6/30/00 1999-2000
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1. Logitech International SA(R) 282 712 152.48%
2. Tecan AG(R) 424 957 125.71
3. Swisslog Holding AG (R) 292 490 67.81
4. Mikron Holding AG(R) 439 736 67.65
5. Huber &Suhner AG(R) 402 616 53.23
6. Feintool International
Holding (R) 328 441 34.45
7. Gretag-Imaging Holding
AG(R) 145 192 32.41
8. Julius Baer Holdings
Ltd. (B) 3,019 3,954 30.97
9. Bank Sarasin &Cie (R) 2,027 2,574 26.99
10. BaloiseHolding (R) 787 993 26.18
1 Among issues held for the full six months.
(B)=Bearer Shares
(R)=Registered Shares
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and a good chance of sustained earnings momentum over the following quarters.
The expectations are for 16% earnings growth in 2000 and 12% in 2001.
THE SHARE BUY-BACK RESULTS
During the second quarter of 2000, the Fund repurchased 512,000 shares.
Through June 30, 2000 the Fund has repurchased 765,000 shares of its stock at an
average price of $13.69 and an average discount of 20.70%. This program has
enhanced stockholder value by $2,699,870.
Sincerely,
/S/ SIGNATURE PAUL HOTTINGUER
Paul Hottinguer
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
/S/ SIGNATURE RODOLPHE HOTTINGER
Rodolphe Hottinger
PRESIDENT AND CHIEF OPERATING OFFICER
August 1, 2000
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THE SWISS HELVETIA FUND, INC.
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Review of Operations
Trading activity in the first half of 2000 involved changes in the following
positions:
NEW INVESTMENTS BY THE FUND
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Actelion Ltd.
Givaudan
Kudelski SA
Unaxis Holdings
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ADDITIONS TO EXISTING INVESTMENTS
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ABB Ltd.
Geberit AG
Logitech International SA
Mikron Holding AG
Saia-Burgess Electronics Holding AG
Sulzer AG
Swisslog Holding, Inc.
Tecan AG
UBS AG
Vontobel Holding Ltd.
SECURITIES DISPOSED OF
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Barry Callabaut Ltd.
Bucher Holding Ltd.
Forbo Holdings SA
Generali Holding
Kuoni Travel Holding Ltd.
Lonza AG
Moevenpick Holding
UBS AG Warrants
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Statement of Net Assets June 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
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COMMON STOCKS -- 98.8%
BANKS -- 15.5%
2,710 BANK SARASIN & CIE
REGISTERED SHARES $ 6,976,830 1.6%
A bank specializing in
investment advisor services and
portfolio management for private
and institutional customers in
Europe. (cost $2,721,612)
112,000 CREDIT SUISSE GROUP1
REGISTERED SHARES 22,277,798 5.1
A global financial services
institution whose main holding
is Credit Suisse.
(cost $7,207,699)
2,000 JULIUS BAER HOLDINGS LTD.
BEARER SHARES 7,907,319 1.8
Banking group specializing in
asset management, investment
consulting and securities
trading. (cost $3,660,089)
1,500 OZ HOLDING AG
BEARER SHARES 1,875,690 0.4
Provides brokerage and banking
services, specializing in Swiss
futures and options.
(cost $1,365,178)
138,000 UBS AG 1
REGISTERED SHARES 20,216,992 4.7
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: UBSSwitzerland,
UBS Asset Management and
UBSWarburg. (cost $7,241,045)
Percent
No. of of Net
Shares Security Value Assets
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BANKS -- (CONTINUED)
4,000 VALIANT HOLDING AG
REGISTERED SHARES $ 1,701,606 0.4%
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)
3,000 VONTOBEL HOLDING LTD.
BEARER SHARES 6,583,303 1.5
Provides investment, banking and
consulting services to private
and institutional customers.
(cost $5,458,768)
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67,539,538 15.5
BUILDING CONTRACTORS & MATERIALS -- 2.4%
11,000 GEBERIT AG
REGISTERED SHARES 2 3,674,758 0.8
Manufactures and supplies water
supply pipes and fittings,
installation systems, drainage
and flushing systems for the
commercial and residential
construction markets.
(cost $3,138,859)
5,500 HOLDERBANK FINANCIERE GLARUS AG
BEARER SHARES 6,742,675 1.6
Large cement producer with
worldwide operations.
(cost $4,368,730)
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10,417,433 2.4
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Statement of Net Assets (continued) June 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
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COMMON STOCKS -- (CONTINUED)
CHEMICALS -- 1.8%
17,000 CIBA SPECIALTY CHEMICALS, INC.
REGISTERED SHARES $ 1,057,681 0.2%
Develops, manufactures and
markets specialty chemical
products worldwide. These
products include additives,
performance polymers, textile
dyes, consumer care chemicals
and pigments.
(cost $185,409)
5,000 CLARIANT AG
REGISTERED SHARES 1,857,300 0.4
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 $851,870)
5,650 GIVAUDAN
REGISTERED SHARES 1,719,520 0.4
Manufactures and markets
fragrance and flavor compounds
with natural and synthetic
ingredients. (cost $482,769)
2,000 GURIT-HEBERLEIN AG
BEARER SHARES 1,348,535 0.3
European market leader for wind
screen bonding systems,
ski-based and optically pure
thermoplastic sheeting for the
auto industry.
(cost $872,456)
6,000 SIKA FINANZ AG
BEARER SHARES 2,008,091 0.5
Leading producer of construction
chemicals. (cost $1,566,863)
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7,991,127 1.8
Percent
No. of of Net
Shares Security Value Assets
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ELECTRICAL ENGINEERING & ELECTRONICS -- 14.5%
187,000 ABB LTD.1$ 22,380,624 5.1%
Asea Brown Boveri Ltd. is the
holding company for ABB Group
which is one of the largest
electrical engineering firms in
the world. (cost $14,539,020)
2,645 BELIMO AUTOMATION AG
REGISTERED SHARES 1,110,595 0.3
World market leader in damper
and volume control actuators for
ventilation and air conditioning
equipment.
(cost $634,557)
12,000 GRETAG-IMAGING HOLDING AG
REGISTERED SHARES 2,309,673 0.5
Manufactures image processing
equipment and systems.
(cost $1,100,502)
430 KUDELSKI SA
BEARER SHARES 2 5,408,606 1.3
Designs, produces and
distributes equipment under the
'Nagra' brand name for
professional data display in
audio and video applications.
(cost $4,801,037)
13,500 LOGITECH INTERNATIONAL SA1
REGISTERED SHARES 2 9,607,392 2.2
Manufactures personal computer
input devices, as well as
producing trackballs, desktop
publishing programs, and related
software.
(cost $2,577,850)
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Statement of Net Assets (continued) June 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
ELECTRICAL ENGINEERING & ELECTRONICS -- (CONTINUED)
5,000 SAIA-BURGESS ELECTRONICS HOLDING AG
REGISTERED SHARES $ 2,068,775 0.5%
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 $1,298,119)
19,460 SWISSLOG HOLDING, INC.
REGISTERED SHARES 9,542,724 2.2
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 $5,070,074)
5,108 TECAN AG
REGISTERED SHARES 4,887,574 1.1
Manufactures and distributes
components and complete
solutions for the automation of
laboratory processes.
(cost $2,755,035)
4,500 THE SWATCH GROUP OF SWITZERLAND
BEARER SHARES 5,720,853 1.3
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 $2,680,890)
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63,036,816 14.5
Percent
No. of of Net
Shares Security Value Assets
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FOOD & LUXURY GOODS -- 10.6%
300 LINDT & SPRUNGLI AG
REGISTERED SHARES $ 1,655,020 0.4%
Major manufacturer of premium
Swiss chocolates.
(cost $1,196,399)
22,200 NESTLE AG1
REGISTERED SHARES 44,429,938 10.2
Largest food and beverage
processing company in the world.
(cost $13,121,037)
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46,084,958 10.6
INSURANCE -- 8.6%
3,000 BALOISE HOLDING
REGISTERED SHARES 2,979,036 0.7
Medium-sized insurer active in
all sectors of insurance.
(cost $169,640)
10,000 SCHWEIZERISCHE RUCKVERSICHERUNGS-
GESELLSCHAFT (SWISS REINSURANCE
COMPANY)1
REGISTERED SHARES 20,381,268 4.7
Second largest reinsurance
company in the world.
(cost $5,838,682)
28,900 ZURICH ALLIED LTD.1
REGISTERED SHARES 14,278,166 3.2
A large worldwide insurance
operator. (cost $4,691,524)
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37,638,470 8.6
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Statement of Net Assets (continued) June 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
LIFE SCIENCES -- 17.1%
47,100 NOVARTIS LTD.1
REGISTERED SHARES $ 74,602,427 17.1%
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 $24,690,092)
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74,602,427 17.1
MACHINERY -- 3.5%
5,000 FEINTOOL INTERNATIONAL HOLDING
REGISTERED SHARES 2,206,694 0.5
Supplier of integrated systems
for fine-blanking and forming
technologies. (cost $1,059,528)
4,500 GEORG FISCHER AG
REGISTERED SHARES 1,398,492 0.3
A mechanical engineering group
that is a market leader in
vehicle engineering and pipeline
systems.
(cost $1,404,488)
7,800 MIKRON HOLDING AG
REGISTERED SHARES 5,742,185 1.3
Machine tools and milling
machine producer.
(cost $2,103,319)
Percent
No. of of Net
Shares Security Value Assets
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MACHINERY -- (CONTINUED)
3,400 RIETER HOLDING AG
REGISTERED SHARES $ 1,146,255 0.3%
Leading supplier of spinning
machinery for the textile
industry. (cost $569,618)
2,000 SCHINDLER HOLDING AG
REGISTERED SHARES 2,991,296 0.7
One of the world's largest
elevator companies and a leading
Swiss machinery enterprise.
(cost $2,569,092)
2,500 SULZER AG
REGISTERED SHARES 2 1,662,682 0.4
Manufactures and sells
industrial equipment, machinery,
and medical devices.
(cost $1,644,520)
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15,147,604 3.5
MISCELLANEOUS INDUSTRIES -- 2.2%
5,000 HUBER & SUHNER AG
REGISTERED SHARES 3,080,177 0.7
Manufactures a wide range of
products, extending from cables
for energy and electrical
transmission to special products
such as rubber.
(cost $1,381,216)
30,000 KOMAX HOLDING AG
REGISTERED SHARES 2,390,585 0.5
Seller of wire processing
machines. Most important markets
are the car industry, household
appliance industry,
telecommunication industry as
well as the electronics
industry.
(cost $1,332,269)
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Statement of Net Assets (continued) June 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
MISCELLANEOUS INDUSTRIES -- (CONTINUED)
2,500 PHOENIX MECANO AG
BEARER SHARES $ 1,425,156 0.4
Leading Swiss packaging
manufacturer for the mechanical
engineering and electronics
industry. (cost $1,179,117)
3,730 SIA ABRASIVES HOLDING AG
REGISTERED SHARES 2 514,435 0.1%
Develops, manufactures and
markets surface treatment,
upgrade and polishing systems
for various materials.
(cost $550,006)
7,500 UNAXIS HOLDINGS
REGISTERED SHARES $ 2,036,594 0.5
Provider of systems and IT
services, including
semiconductors, data storage and
displays, as well as surface
technology and space
applications.
(cost $1,907,755)
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9,446,947 2.2
MISCELLANEOUS SERVICES -- 5.6%
15,000 ADECCO SA1
BEARER SHARES 12,743,656 2.9
Leading personnel and temporary
employment company.
(cost $5,142,887)
3,500 COMPAGNIE FINANCIERE RICHEMONT AG
BEARER SHARES 9,429,018 2.1
Investment company with
principal interests in luxury
goods and tobacco.
(cost $3,155,503)
Percent
No. of of Net
Shares Security Value Assets
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MISCELLANEOUS SERVICES -- (CONTINUED)
3,300 PUBLIGROUPE LTD.
PARTICIPATION CERTIFICATES $ 2,467,819 0.6
Largest Swiss advertising
intermediary. (cost $636,003)
----------- ----
24,640,493 5.6
PHARMACEUTICALS -- 14.0%
5,000 ACTELION LTD.
REGISTERED SHARES 1,630,501 0.4%
Develops and markets synthetic
small-molecule drugs against
diseases related to the
endothelium. (cost $796,032)
5,300 ROCHE HOLDINGS LTD.1
DIVIDEND RIGHTS CERTIFICATES 51,590,045 11.8
Worldwide pharmaceutical
company. (cost $13,091,249)
9,600 SERONO SA
BEARER SHARES 8,002,942 1.8%
Develops and markets
biotechnology products.
(cost $2,779,562)
----------- ----
61,223,488 14.0
RETAILERS -- 1.6%
1,200 BON APPETIT HOLDING AG
REGISTERED SHARES 772,343 0.2
Swiss market leader that
operates "Cash and Carry".
(cost $432,551)
11
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Statement of Net Assets (concluded) June 30, 2000
(Unaudited)
Percent
No. of of Net
Shares Security Value Assets
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONCLUDED)
RETAILERS -- (CONTINUED)
10,000 CHARLES VOEGELE HOLDING AG2 $ 1,967,635 0.5
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.
BEARER SHARES 1,884,884 0.4
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)
8,000 VALORA HOLDING AG
REGISTERED SHARES 2,221,405 0.5
Operates restaurants, food
vending machines and specialty
retail stores. (cost $1,817,759)
------------ ----
6,846,267 1.6
TELECOMMUNICATIONS -- 1.2%
15,000 SWISSCOM AG
REGISTERED SHARES 5,194,925 1.2
Operates public
telecommunication networks and
offers network application
services. (cost $5,049,193)
------------ ----
5,194,925 1.2
TRANSPORTATION -- 0.2%
6,500 SAIRGROUP HOLDING LTD.
REGISTERED SHARES $ 1,083,732 0.2%
Switzerland's largest airline
company. (cost $1,329,343)
------------ ----
1,083,732 0.2
834,333 TOTAL COMMON STOCKS
(Cost $178,483,776) $430,894,225 98.8%
OTHER ASSETS IN EXCESS OF
LIABILITIES 5,079,858 1.2
------------ ----
NET ASSETS APPLICABLE TO
23,876,237 SHARES OF
COMMON STOCK
OUTSTANDING $435,974,083 100.0%
============ =====
NET ASSET VALUE PER SHARE
($435,974,083 (DIVIDE)
23,876,237) $18.26
======
--------------------------------------------------------------------------------
1 ONE OF THE TEN LARGEST PORTFOLIO HOLDINGS.
2 NON-INCOME PRODUCING SECURITY.
SEE NOTES TO THE FINANCIAL STATEMENTS.
12
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended June 30, 2000
(Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (Less foreign taxes withheld of $731,230) ..... $ 4,144,075
------------
EXPENSES:
Investment advisory fee ................................. 1,591,335
Administration fee ...................................... 166,569
Professional fees ....................................... 149,068
Directors' fees and related expenses .................... 117,257
Custodian fees .......................................... 69,648
Accounting fee .......................................... 62,243
Printing and postage fees ............................... 42,248
Franchise tax ........................................... 39,004
Transfer agent fee ...................................... 38,826
Miscellaneous ........................................... 65,108
------------
Total expenses ........................................ 2,341,306
------------
Net investment income ........................................ 1,802,769
------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain from securities transactions .......... 9,930,102
Net realized foreign exchange loss ...................... (97,970)
Change in unrealized appreciation/depreciation of
investments ........................................... 7,284,176
Change in unrealized appreciation/depreciation on
translation of assets and liabilities
denominated in foreign currency ....................... 63,165
------------
Net gain on investments ............................... 17,179,473
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $ 18,982,242
============
--------------------------------------------------------------------------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
13
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
June 30, December 31,
2000 1 1999
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ....................................... $ 1,802,769 $ 217,436
Net realized gain from securities transactions .............. 9,930,102 26,511,278
Net realized foreign exchange loss .......................... (97,970) (1,880,394)
Change in unrealized appreciation/depreciation of investments 7,284,176
(39,948,195)
Change in unrealized appreciation/depreciation on translation
of assets and liabilities denominated in foreign currency . 63,165 (174,500)
------------- -------------
Net Increase/(Decrease) in Net Assets Resulting
from Operations ........................................... 18,982,242 (15,274,375)
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net Investment Income ....................................... -- (739,261)
Capital Gains ............................................... (1,087,202) (25,045,011)
------------- -------------
Total distributions to shareholders ....................... (1,087,202) (25,784,272)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Value of shares issued in reinvestment of dividends ......... 12,126,372 --
Value of shares repurchased through stock buyback ........... (10,645,847) (12,258,663)
------------- -------------
Total increase/(decrease) from capital share transactions ... 1,480,525 (12,258,663)
------------- -------------
Total increase/(decrease) in net assets ..................... 19,375,565 (53,317,310)
NET ASSETS:
Beginning of period ......................................... 416,598,518 469,915,828
------------- -------------
End of period ............................................... $ 435,974,083 $ 416,598,518
============= =============
<FN>
--------------------------------------------------------------------------------
1 UNAUDITED.
</FN>
</TABLE>
--------------------------------------------------------------------------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
14
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
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 For the Years Ended December 31,
Months Ended -----------------------------------------------------------
June 30, 2000 5 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE1:
Net asset value at beginning of year ..... $ 17.52 $ 19.07 $ 16.48 $ 12.07 $ 12.28 $ 9.90
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(expenses in
excess of income) ...................... 0.04 0.01 0.00 4 (0.02) 0.05 0.03
Net realized and unrealized gain/(loss)
on investments2 ........................ 0.86 (0.48) 3.60 4.86 0.12 3.41
-------- -------- -------- -------- -------- --------
Total from Investment Operations ......... 0.90 (0.47) 3.60 4.84 0.17 3.44
-------- -------- -------- -------- -------- --------
Capital charge resulting from the issuance
of fund shares ......................... (0.12) -- -- -- -- (0.73)
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... -- (0.03) (0.07) -- (0.05) (0.03)
Distributions from net realized
capital gains .......................... (0.04) (1.05) (0.94) (0.43) (0.33) (0.30)
-------- -------- -------- -------- -------- --------
Total distributions ...................... (0.04) (1.08) (1.01) (0.43) (0.38) (0.33)
-------- -------- -------- -------- -------- --------
Net asset value at end of year ........... $ 18.26 $ 17.52 $ 19.07 $ 16.48 $ 12.07 $ 12.28
======== ======== ======== ======== ======== ========
Market value per share, end of year ...... $ 14.75 $ 13.81 $ 16.00 $ 13.72 $ 9.94 $ 10.63
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN3:
Based on market value per share .......... 7.13% (7.06)% 23.82% 42.66% (2.93)% 16.27%
Based on net asset value per share ....... 4.50% (1.09)% 22.89% 41.08% 1.98% 28.20%
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................. 1.13%6 1.11% 1.09% 1.17% 1.22% 1.38%
Net investment income/(expenses
in excess of income) ................... 0.87%6 0.05% 0.01% (0.14)% 0.25% 0.27%
SUPPLEMENTAL DATA:
Net assets at end of year (000) .......... $435,974 $416,599 $469,916 $406,030 $296,008 $301,204
Average net assets during period (000) ... $418,108 $428,072 $464,967 $354,923 $306,069 $231,234
Portfolio turnover rate .................. 7% 14% 13% 13% 19% 10%
<FN>
--------------------------------------------------------------------------------
1 PER SHARE AMOUNTS FOR THE YEARS ENDED DECEMBER 31, 1995 THROUGH DECEMBER 31,
1997 HAVE BEEN RESTATED TO REFLECT 2:1 STOCK SPLIT EFFECTIVE OCTOBER 16, 1998.
2 INCLUDES NET REALIZED CURRENCY GAIN/(LOSS).
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. RETURNS FROM 1998, 1997
AND 1995 HAVE BEEN RESTATED TO REFLECT SUBSEQUENT CHANGES TO DIVIDEND
REINVESTMENT CALCULATIONS.
4 LESS THAN $0.01 PER SHARE.
5 UNAUDITED.
6 ANNUALIZED.
</FN>
</TABLE>
--------------------------------------------------------------------------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
15
<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 accounting principles generally accepted
in the United States. 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 income 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:
VALUATION OF SECURITIES -- 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 securities 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 exchange rate at
the end of the period.
o The Fund includes in the period's net realized foreign exchange gain or loss,
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 accounting principles
generally accepted in the United States. 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 under Subchapter M of the
Internal Revenue Code. 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, 2000, advisory fees were $1,591,335 of
--------------------------------------------------------------------------------
16
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Notes to Financial Statements
which, $273,538 was payable at the end of the period. The Fund paid Hottinger
& Cie $2,518 in brokerage commissions for the six months ended June 30, 2000.
Investment Company Capital Corp. ("ICCC"), is the Fund's administrator. As
compensation for its administrative services, the Fund pays ICCC an annual
fee based on the Fund's average net assets. This fee is calculated daily and
paid monthly at the following annual rates: 0.10% of the first $250 million,
0.05% of the next $250 million and 0.03% of the amount over $500 million. For
the six months ended June 30, 2000, administration fees were $166,569 of
which, $28,228 was payable at the end of the period.
Certain officers and/or directors of the Fund are officers and/or directors
of HCC, Hottinger U.S., Inc., Hottinger & Cie and/or ICCC.
PFPC Trust Company is the Fund's custodian and PFPC, Inc. is the Fund's
transfer agent. PFPCTrust 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 55,321 of the
23,876,237 shares outstanding on June 30, 2000.
D. 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. On December 7, 1999 the Fund announced that its Board of
Directors had increased this authorization by 2,000,000 shares. The Board of
Directors and Management expect to make these purchases from time to time
during 2000. 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 20 percent. During the six months ended June 30, 2000 the Fund
repurchased and retired 765,000 shares for $10,645,847 at an average price of
$13.92 (includes broker commissions) and a weighted average discount of
20.70%.
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.
E. 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. For the
six months ended June 30, 2000 accrued directors' fees were $38,188.
F. INVESTMENT TRANSACTIONS -- Excluding short-term obligations, purchases of
investment securities aggregated $27,337,998 and sales of investment
securities aggregated $49,792,695 for the six months ended June 30, 2000.
On June 30, 2000, aggregate gross unrealized appreciation for all securities
in which there is an excess of value over tax cost was $252,912,029 and
aggregate gross unrealized depreciation of all securities in which there is
an excess of tax cost over value was $501,580.
G. 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.
H. NET ASSETS-- At June 30, 2000, net assets consisted of:
Paid-in capital ........................ $172,196,536
Undistributed net investment income .... 1,664,416
Undistributed net realized gain from
security and currency transactions .. 9,843,802
Unrealized appreciation of investments . 252,410,449
Unrealized currency translation loss ... (141,120)
------------
$435,974,083
============
--------------------------------------------------------------------------------
17
<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.
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, 2000.
Domestic Ordinary Income --
Foreign Source Income --
------
Total Ordinary Income --
======
Long-Term Capital Gains $0.04
------
Total Distributions $0.04
======
The Fund's long-term capital gain distributions of $0.04 per share are all
taxable at the 20% capital gains rate.
Foreign Taxes Paid or Withheld
The foreign taxes paid or withheld per share represent taxes incurred by the
Fund on interest and dividends received by the Fund from foreign sources.
Foreign taxes paid or withheld should be included in taxable income with an
offsetting deduction from gross income or as a credit for taxes paid to foreign
governments. You should consult your tax advisor regarding the appropriate
treatment of foreign taxes paid.
--------------------------------------------------------------------------------
18
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
AMENDMENT TO BY-LAWS
--------------------
At the Board of Directors Meeting held on May 19, 2000, the Board adopted an
amendment to the By-Laws, as follows:1) to eliminate the ability of stockholders
to call a special meeting of stockholders; 2) to provide procedures that must be
followed in order for stockholders to act by written consent; 3) to provide that
only stockholders of record can submit proposals under the Fund's advance notice
By-Law; 4) to require that stockholders seeking to act under the advance notice
By-Law indicate whether they will solicit proxies; 5) to provide that Directors
of the Fund be removed by stockholders only for cause; and 6) to increase the
percentage of stockholders required to amend, alter or repeal the By-Laws to 75
percent of the total outstanding stock of the Fund entitled to vote at any
annual or special meeting.The exact text of the amendment to the By-Laws has
been filed with the Securities and Exchange Commission.
--------------------------------------------------------------------------------
19
<PAGE>
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Proxy Results (Unaudited)
At the annual stockholders' meeting held in May 2000, shareholders voted on the
following proposals. The description of each proposal and number of shares voted
are as follows:
1. TO ELECT THE SWISS HELVETIA DIRECTORS.
SHARES SHARES VOTED
VOTED WITHHELD
FOR AUTHORITY
------------ -----------
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
2. TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITORS
OF THE FUND.
FOR AGAINST WITHHELD NO VOTE
---------- ---------------- ------------ ------
19,353,425 131,669 2,487,913 2
3. TO APPROVE A STOCKHOLDER ADVISORY PROPOSAL.
IN FAVOR OF THE PROPOSAL NOT IN FAVOR OF THE PROPOSAL
------------------------ ----------------------------
6,526,945 15,446,064
--------------------------------------------------------------------------------
20
<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 8950
Wilmington, Delaware, 19899
1-800-852-4750
--------------------------------------------------------------------------------
21
<PAGE>
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