As filed with the Securities and Exchange Commission on September 8, 2003
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-05128
THE SWISS HELVETIA FUND, INC.
1270 Avenue of the Americas, Suite 400
New York, New York 10020
1-888-SWISS-00
Rodolphe E. Hottinger, President
Hottinger et Cie
3 Place des Bergues
C.P. 395
CH-1201 Geneva
Switzerland
Date of fiscal year end: DECEMBER 31, 2003
Date of reporting period: JUNE 30, 2003
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
T H E S W I S S H E L V E T I A F U N D , I N C .
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DIRECTORS AND OFFICERS THE INVESTMENT ADVISOR
Paul Hottinguer Rodolphe E. Hottinger The Swiss Helvetia Fund, Inc. (the "Fund") is managed by
CHAIRMAN PRESIDENT Hottinger Capital Corp., which belongs to the Hottinger
Eric R. Gabus+ CHIEF EXECUTIVE OFFICER Group.
VICE CHAIRMAN (NON OFFICER) Rudolf Millisits
Paul R. Brenner, Esq. SENIOR VICE PRESIDENT The Hottinger Group dates back to Banque Hottinguer, which
DIRECTOR TREASURER was formed in Paris in 1786 and is one of Europe's oldest
Alexandre de Takacsy Philippe Comby private banking firms. The Hottinger Group has remained
DIRECTOR VICE PRESIDENT under the control of the Hottinger family through seven
Claude Frey Edward J. Veilleux generations. It has offices in New York, Zurich, Luxembourg,
DIRECTOR VICE PRESIDENT Toronto, Geneva, Vienna, London, and the Bahamas.
Baron Hottinger SECRETARY
DIRECTOR Leslie K. Klenk EXECUTIVE OFFICES
Claude Mosseri-Marlio ASSISTANT SECREATRY The Swiss Helvetia Fund, Inc.
DIRECTOR Frederick Skillin 1270 Avenue of the Americas, Suite 400
Didier Pineau-Valencienne* ASSISTANT TREASURER New York, New York 10020
DIRECTOR Dawn L. Taylor 1-888-SWISS-00 (1-888-794-7700)
Stephen K. West, Esq.* ASSISTANT TREASURER (212) 332-2760
DIRECTOR
Samuel B. Witt III, Esq.** FOR INQUIRIES AND REPORTS:
DIRECTOR 1-888-SWISS-00 (1-888-794-7700)
Fax (212) 332-7931
------------------------------------------------------------ email: swz@swz.com
*Audit Committee member +Governance Committee Chairman
**Audit Committee chairman WEBSITE ADDRESS
http://www.swz.com
INVESTMENT ADVISOR
Hottinger Capital Corp. THE FUND
1270 Avenue of the Americas, Suite 400
New York, New York 10020 The Swiss Helvetia Fund, Inc. is a non-diversified,
(212) 332-7930 closed-end investment company whose objective is to seek
long-term capital appreciation through investment in equity
ADMINISTRATOR and equity-linked securities of Swiss companies. The Fund,
Forum Adminstative Services, LLC listed on the New York Stock Exchange under the symbol
"SWZ," is managed by Hottinger Capital Corp.
CUSTODIAN
Swiss American Securities Inc. The Fund has earned the Lipper, Inc. award for ranking
number one among Western European closed-end funds in ten
TRANSFER AGENT year performance for the periods ended December 31, 2002,
PFPC Inc. 2001, 2000, 1999, and 1998. The Fund had previously been
P.O. Box 43027 recognized for its top one year performance in the same
Providence, RI 02940-3027 category for the year 2000. The Fund also maintained
(800) 331-1710 Morningstar's overall rating of four stars as of June 30,
2003. Of course, past performance is no guarantee of future
LEGAL COUNSEL results. See pages 4 and 5 for more information.
Stroock & Stroock & Lavan LLP
Net Asset Value is calculated daily by 6:15 P.M. (Eastern
INDEPENDENT AUDITORS Time). The most recent calculation is available by calling
Deloitte & Touche LLP 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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T H E S W I S S H E L V E T I A F U N D , I N C .
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LETTER TO STOCKHOLDERS
GLOBAL MARKET REVIEW AND ECONOMIC for the region with a further reduction from 1.0% to 0.4%
CONSIDERATIONS for 2003. The UK's 2003 GDP growth forecast has been revised
as well from a range of 2.5% - 3.0% to a range of 2.0% -
In the second quarter of this year, the world markets 2.5%.
improved with the ease in geopolitical tensions. Major
equity markets have rallied nearly 25% from the lows reached COMMENTS ON GLOBAL STOCK MARKET
in mid-March. PERFORMANCE
Some of the most important events of this past quarter Liquidity conditions have been favorable for the stock
have included the official end of the war in Iraq, the markets during the first two quarters of the year. Monetary
spread and control of SARS, and the passing of tax aggregates have grown rapidly since the latter part of 2002,
legislation in the U.S. especially in the U.S. The Federal Reserve reduced
short-term rates again in June taking "insurance" against
The virus SARS has impacted the overall economy but deflation. The Federal Reserve also suggested it would
mainly the performance of Asian markets in April and May. consider buying back Treasuries if it was needed to supply
Once the epidemic was officially declared under control, the economy with even more liquidity. The ECB also cut
Asian markets rallied strongly. Asia is expected to interest rates in June dropping them 0.50% to 2.0%. At its
experience the highest level of GDP growth this year with an last meeting on June 13th, the Swiss National Bank (SNB)
average of 5.3%, reflecting in part the massive influence of decided to leave the target range for the three month Libor
China where growth is anticipated to be 7.3%. unchanged at 0.0% - 0.75%.
Congress passed the third largest tax cut in U.S. This backdrop allowed a sharp reduction in equity risk
history. The legislation is putting additional cash into the premiums resulting in strong performance by corporate bonds,
hands of consumers and will make equity investments much most of the riskier assets, and high volatility stocks. The
more attractive by reducing tax on both dividends and long biggest winners in the stock market were companies whose
term capital gains to 15%. stock prices had previously reflected concerns over
potential bankruptcy. On the other side, companies that had
In Europe, there has not been a significant one-time shown rapid sales growth during a period of very slow
event. However due to stagnant growth in the first quarter economic activity, saw the price multiple of their stocks
and an anemic second quarter, the European Central Bank expand dramatically. All of this was apparent in the strong
(ECB) has continued to cut its growth forecast performance of the NASDAQ Composite Index.
2
T H E S W I S S H E L V E T I A F U N D , I N C .
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LETTER TO STOCKHOLDERS (CONTINUED)
SWISS ECONOMIC NOTES historically very low. (In the U.S. a decrease from 3.55% to
The SNB continues to pursue an expansionary monetary 3.16% resulted in the lowest yield since 1958).
policy with, as noted above, a fluctuation range of the
3-month Libor, unchanged at 0.0% - 0.75%. The yield on the Regarding other economic notes, they do not look very
ten year Confederation bond decreased from 2.41% in the positive. The 2003 GDP growth forecast according to the
middle of May to 2.24% in the middle of June. While it was a Swiss Business Economists' Consensus (BEC) has been cut by
small decrease in comparison with other countries, the 0.7% to zero. Expectations for 2004 have also been revised
yields are downwards with the BEC
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PEER GROUP/INDICES PERFORMANCE COMPARISON IN SWISS FRANCS 1
----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN
YEAR TO DATE
AS OF TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
6/30/03 2002 2001 2000 1999 1998
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Swiss Helvetia Fund 3.90% -20.40% -22.91% 14.06% 14.70% 15.57%
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Swiss Performance Index (SPI) 5.92% -25.95% -22.03% 11.91% 11.69% 15.36%
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Swiss Market Index (SMI) 3.95% -27.84% -21.11% 7.47% 5.71% 14.28%
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Switzerland iShares2 (Formerly called
Webs Switzerland 3.17% -26.23% -23.12% 7.75% 12.22% 11.74%
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CS Equity Swiss Blue Chips3, 7 4.74% -28.75% -22.12% 10.97% 7.57% 14.21%
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UBS Equity Inv. Switzerland4, 7 4.15% -26.02% -22.04% 7.42% 6.43% 12.75%
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Pictet Valsuisse5, 7 4.45% -27.93% -22.35% 7.34% 9.38% 11.05%
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Saraswiss (Bank Sarasin)6, 7 5.10% -28.51% -24.45% 9.72% 7.10% 14.41%
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CUMULATIVE
PERFORMANCE
TOTAL RETURN 12/31/96 -
1997 6/30/03
----------------------------------------------------------------------
Swiss Helvetia Fund 53.99% 48.44%
----------------------------------------------------------------------
Swiss Performance Index (SPI) 55.19% 36.85%
----------------------------------------------------------------------
Swiss Market Index (SMI) 58.93% 22.10%
----------------------------------------------------------------------
Switzerland iShares2 (Formerly called
Webs Switzerland 47.79% 16.84%
----------------------------------------------------------------------
CS Equity Swiss Blue Chips3, 7 59.90% 26.70%
----------------------------------------------------------------------
UBS Equity Inv. Switzerland4, 7 55.94% 20.74%
----------------------------------------------------------------------
Pictet Valsuisse5, 7 55.65% 18.62%
----------------------------------------------------------------------
Saraswiss (Bank Sarasin)6, 7 53.57% 17.20%
----------------------------------------------------------------------
SOURCES : BLOOMBERG, MANAGEMENT COMPANIES' WEBSITES, INVESTMENT COMPANY CAPITAL CORP., AND FORUM FINANCIAL GROUP.
1 PERFORMANCE OF FUNDS IS BASED ON CHANGES IN THE FUND'S NAV OVER A SPECIFIED PERIOD. IN EACH CASE TOTAL RETURN IS
CALCULATED ASSUMING REINVESTMENT OF ALL DISTRIBUTIONS. FUNDS LISTED, OTHER THAN SWITZERLAND ISHARES, ARE NOT REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION. PERFORMANCE AND DESCRIPTIVE INFORMATION ABOUT THE FUNDS ARE DERIVED FROM THEIR
PUBLISHED INVESTOR REPORTS AND WEBSITES, WHICH ARE SUBJECT TO CHANGE.
2 SWITZERLAND ISHARES ARE TRADED ON THE NEW YORK STOCK EXCHANGE AND INVEST IN MOST OF THE SAME STOCKS LISTED IN THE MORGAN
STANLEY CAPITAL INTERNATIONAL (SWITZERLAND) INDEX. THESE STOCKS REPRESENT SWITZERLAND'S LARGEST AND MOST ESTABLISHED PUBLIC
COMPANIES, ACCOUNTING FOR APPROXIMATELY 85% OF THE MARKET CAPITALIZATION OF ALL OF SWITZERLAND'S PUBLICLY TRADED STOCKS.
PERFORMANCE OF ISHARES IS CALCULATED BASED UPON THE DECEMBER 31 CLOSING PRICES EACH YEAR USING THE SWISS FRANC/U.S. DOLLAR
EXCHANGE RATE AS OF NOON EACH SUCH DATE, AS REPORTED BY BLOOMBERG. SUCH EXCHANGE RATES WERE AS FOLLOWS: 12/31/96 = 1.35,
12/31/97 = 1.46, 12/31/98 = 1.38, 12/31/99 = 1.60, 12/31/00 = 1.61, 12/31/01 = 1.67, 12/31/02 = 1.39, AND 6/30/03 = 1.35.
3 THIS FUND INVESTS IN EQUITIES ISSUED BY LEADING SWISS COMPANIES. STOCK SELECTION IS BASED ON ECONOMIC, SECTOR AND COMPANY
ANALYSES. PREFERENCE IS GIVEN TO LARGE-CAP COMPANIES.
4 THIS FUND INVESTS PRIMARILY IN MAJOR SWISS COMPANIES. QUALITY CRITERIA USED FOR DETERMINING RELATIVE WEIGHTINGS OF
COMPANIES INCLUDE: STRATEGIC ORIENTATION, STRENGTH OF MARKET POSITION, QUALITY OF MANAGEMENT, SOUNDNESS OF EARNINGS, GROWTH
POTENTIAL AND POTENTIAL FOR IMPROVING SHAREHOLDER VALUE. THE INVESTMENT OBJECTIVE SEEKS TO PROVIDE RESULTS THAT ARE ALIGNED
WITH THE SPI PERFORMANCE.
5 THIS FUND INVESTS IN SHARES OF SWISS COMPANIES LISTED ON THE SWISS STOCK EXCHANGE (SWX) AND INCLUDED IN THE SPI.
6 THIS FUND INVESTS IN SHARES OF SWISS COMPANIES. IT WEIGHTS INDIVIDUAL SECTORS RELATIVE TO THE SPI ON THE BASIS OF THEIR
EXPECTED RELATIVE PERFORMANCE. IT FOCUSES ON LIQUID BLUE-CHIP STOCKS.
7 THESE FUNDS ARE NOT AVAILABLE FOR U.S. RESIDENTS OR CITIZENS.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
3
T H E S W I S S H E L V E T I A F U N D , I N C .
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LETTER TO STOCKHOLDERS (CONTINUED)
forecasting growth of 1.2% compared to a previous forecast maintained an overall rating of four stars from
of 1.6%. Morningstar*. The Fund also received Lipper, Inc.'s top
ranking for Western European closed-end funds in ten-year
June leading indicators worsened marginally by 0.6% to performance for the period ended December 31, 2002. ** PAST
42.2% and the Swiss unemployment rate pointed upwards to PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
3.8% in June from 3.6% for May.
While technology and financial stocks have been
The Consumer Price Index rose 0.5% for the year with performing well in the global stock market, stocks in
higher prices for beverages and food offsetting declining defensive industries failed to attract much investor
costs for energy and leisure activities. This result is an attention causing the Swiss market to lag most European as
easing on deflationary pressures. What does generate well as U.S. markets. As an example, defensive stocks, such
concern, however, is the anemic consumer spending in the as Givaudan and Nestle, have shown a negative performance
face of a weak job market. for the year.
PERFORMANCE COMMENTARY AND SWISS MARKET Regarding the pharmaceutical industry, its relative
REVIEW valuation, unlike that of the biotech industry, declined
Swiss Stock market behavior was quite hectic this year. again. The principal reasons were that investors remained
The SPI reached a low point in March, dropping 20% in local worried about competition from generics and drug cost
currency and rallying back 18% in five days, mainly on short control by local government in the U.S, waiting for
covering in a limited number of financial stocks. In a improvement in the late-stage pipeline of most of the
self-feeding process, the rise of the stock market improved industry players, and the weakness of the U.S. dollar. Roche
the capital base of companies, allowing a reevaluation of performed in line with the SPI, Novartis, however, failed to
their stocks. In this type of volatility and sharp counter keep up, posting a flat year-to-date return.
trend rally, the active management of the fund
underperformed the Index. *MORNINGSTAR IS AN INDEPENDENT FUND PERFORMANCE MONITOR. ITS
RATINGS REFLECT HISTORIC RISK-ADJUSTED PERFORMANCE AND MAY
In addition, the Fund is less concentrated than the CHANGE MONTHLY. ITS RATINGS OF ONE (LOW) AND FIVE (HIGH)
Index in the five largest stocks of the SPI, which penalized STARS ARE BASED ON A FUND'S THREE- AND FIVE-YEAR AVERAGE
its relative performance since the beginning of the year, ANNUAL TOTAL RETURNS WITH FEE ADJUSTMENTS, AND A RISK FACTOR
even though it reduced its volatility. The Fund's cumulative THAT REFLECTS FUND PERFORMANCE RELATIVE TO THREE-MONTH
performance is superior to its Swiss peers and its TREASURY BILL MONTHLY RETURNS. ONLY 33% OF THE FUNDS IN AN
benchmark. As of June 30, 2003, the Fund INVESTMENT CATEGORY MAY RECEIVE FOUR OR FIVE STARS. AS OF
6/30/03, THERE WERE 13 FUNDS IN THE FUND'S ASSET CATEGORY
RATED BY MORNINGSTAR.
** LIPPER, INC. IS AN INDEPENDENT FUND PERFORMANCE MONITOR.
AS OF 6/30/03, THERE WERE 9 FUNDS IN THE LIPPER WESTERN
EUROPEAN CLOSED-END FUNDS CATEGORY, WHICH IS COMPRISED OF
FUNDS THAT CONCENTRATE THEIR INVESTMENTS IN EQUITY
SECURITIES WHOSE PRIMARY TRADING MARKETS OR OPERATIONS ARE
IN THE WESTERN EUROPEAN REGION OR A SINGLE COUNTRY WITHIN
THIS REGION.
4
T H E S W I S S H E L V E T I A F U N D , I N C .
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LETTER TO STOCKHOLDERS (CONTINUED)
------------------------------------------------------------ increased prices, the FTC imposed some conditions but still
YEAR TO DATE agreed on the merger, which should be profitable for Nestle.
DECEMBER 30,
2002 THROUGH ROCHE: In May, Genentech released unexpected good trial
JUNE 30, 2003 results for Avastin, a drug against colorectal cancer.
------------------------------------------------------------ Although Avastin was developed by Genentech, Roche has
PERFORMANCE licensed the rights for all countries outside the U.S.,
Swiss Performance Index (SPI) 5.92% while Genentech has retained all rights to market the
Swiss Helvetia Fund product in the U.S. Since this good trial news, Genentech
Based on Net Asset Value in Swiss Francs 3.90% stock price has increased by 90%, impacting the valuation of
CHANGE IN U. S. DOLLAR VS. SWISS FRANC -2.04% Roche positively since Roche owns 60% of Genentech.
SWISS HELVETIA FUND PERFORMANCE IN U. S. DOLLARS
Based on Market Price 9.77% NOVARTIS: In its last annual report, Novartis announced that
Based on Net Asset Value 6.06% it was going to begin to report its results in U.S. dollars.
S & P 500 Index 11.75% It noted that an increasing proportion of its revenues were
MSCI EAFE Index 9.47% generated in U.S. dollars and that reporting in U.S. dollars
Lipper European Fund Index (10 Largest) 10.38% would facilitate comparison with its main, predominantly
Lipper European Fund Universe Average 10.18% American, competitors.
------------------------------------------------------------
SOURCES: FORUM FINANCIAL GROUP AND BLOOMBERG FURTHER COMPANY NEWS: Swiss insurance companies are waiting
for Swiss government approval to cut the minimum guaranteed
SPECIFIC COMPANY NEWS rate on group life policies to 3.25% from 4.0%.
CREDIT SUISSE: CS is continually reshaping Winterthur's
portfolio. It recently sold Churchill in the UK to the Royal COMMENTS ON THE CURRENCY
Bank of Scotland Group and its insurance operations in Italy SWISS FRANC: The Swiss franc declined 2.3% in comparison to
to Unipol. The sale of Churchill, which will involve the the euro from mid-May to mid-June. Growth data, economic
repayment of debt to CS, will strengthen Winterthur's perspectives and lower interest rates contributed to this
consolidated European solvency ratio. Furthermore, this decline. The Swiss franc however, after having decreased
transaction will result in a significant capital gain during the first quarter,
expected to be realized in the third quarter of 2003.
NESTLE: The Federal Trade Commission (FTC) has cleared a
merger between Nestle's ice cream company and Dreyer's.
Since the combined ice cream business would have a dominant
share of about 60% of the U.S. super-premium ice cream
market, with the potential for reduced competition and
5
T H E S W I S S H E L V E T I A F U N D , I N C .
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LETTER TO STOCKHOLDERS (CONCLUDED)
increased significantly in comparison to the U.S. dollar shares in 2003. During the period ended June 30, 2003, the
during the end of the second quarter, leaving a flat Fund repurchased and retired 83,700 shares at an average
year-to-date return. price of $9.82 per share (including brokerage commissions)
and a weighted average discount of 17.29%. These
EURO: On June 5th, the ECB decided to decrease its rate from repurchases, which had a total cost of $822,327, resulted in
2.5% to 2.0%. Since the market had been expecting the an increase of $168,921 to the Fund's net asset value.
decrease for a long time, the news did not have any
important impact on the currency. Sincerely,
U.S. DOLLAR: The dollar keeps decreasing in comparison with /s/ PAUL HOTTINGUER
European currencies (down 2.9% against the euro and 3.4%
against the pound). The uncertain economic outlook, low Paul Hottinguer
interest rates and the increasing trade deficit have CHAIRMAN
contributed to this decline.
/s/ RODOLPHE HOTTINGER
OUTLOOK
The world markets improved in the second quarter, with a Rodolphe Hottinger
focus on technology and financial sectors. The Swiss Market PRESIDENT AND CHIEF EXECUTIVE OFFICER
should see a larger number of stocks participating in the
upside move if the global economic recovery strengthens and June 30, 2003
the deflationary forces are successfully kept at bay by the
Federal Reserve and U.S. government tax stimulus. These
circumstances should provide the Fund with more investment
opportunities.
STOCK REPURCHASE PROGRAM
Pursuant to authorization by the Board, the Fund began open
market purchases of its common stock on the New York Stock
Exchange in 1999 and has continued purchases in each
subsequent year. The Board has authorized the purchase of up
to 500,000
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T H E S W I S S H E L V E T I A F U N D , I N C .
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REVIEW OF OPERATIONS
Trading Activity for the six months ended June 30, 2003 involved changes in the following positions:
------------------------------------------------------------ ------------------------------------------------------------
NEW INVESTMENTS BY THE FUND SECURITIES DISPOSED OF
------------------------------------------------------------ ------------------------------------------------------------
Actelion Ltd. Baloise Holding AG
Adecco SA Givaudan SA
Charles Voegele Holding AG Holcim Ltd.
Logitech International SA Komax Holding AG
Serono SA Lonza Group AG
Schindler Holding AG
------------------------------------------------------------ Swiss Reinsurance Company
ADDITIONS TO EXISTING INVESTMENTS Syngenta AG
------------------------------------------------------------ Unaxis Holding AG
Converium Holding AG ------------------------------------------------------------
Credit Suisse Group REDUCTIONS IN EXISTING INVESTMENTS
Kuehne & Nagel International AG ------------------------------------------------------------
Phonak Holding AG
SGS Societe Generale de Surveillance Holding SA Berna Biotech AG
Swiss Life Holding Micronas Semiconductor Holding AG
The Swatch Group AG Novartis AG
Zurich Financial Services AG Roche Holding AG
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T H E S W I S S H E L V E T I A F U N D , I N C .
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SCHEDULE OF INVESTMENTS (UNAUDITED) JUNE 30, 2003
Percent
No. of of Net
Shares Security Value Assets
----------------------------------------------------------------------------------------------------------
COMMON STOCKS - 90.11%
BANKS - 8.08%
435,000 UBS AG2
REGISTERED SHARES $24,197,889 8.08%
Largest Swiss bank. It offers
consumer, business and construction
loans, mortgages, mutual funds, export
and structured finance and securities
brokerage services, advises on mergers and
acquisitions, invests pension funds
and sponsors credit cards.
(Cost $7,578,949)
-------------- --------
24,197,889 8.08%
BIOTECHNOLOGY - 5.51%
186,000 ACTELION LTD.1,2
REGISTERED SHARES 12,385,811 4.13%
Pharmaceutical company that develops and
markets synthetic small-molecule drugs against
diseases related to the endothelium. The Company's
drugs, Veletri and Tracleer, are used in the treatment
of heart and pulmonary conditions.
(Cost $12,911,748)
64,940 BERNA BIOTECH AG1
REGISTERED SHARES 604,071 0.20%
Produces vaccines for influenza,
hepatitis, travel and general immunization.
(Cost $988,305)
6,000 SERONO SA
BEARER SHARES 3,525,894 1.18%
Develops and markets biotechnology
products.
(Cost $3,105,561)
-------------- --------
16,515,776 5.51%
Percent
No. of of Net
Shares Security Value Assets
----------------------------------------------------------------------------------------------------------
CHEMICALS - 1.76%
16,783 SIKA AG
BEARER SHARES $5,259,594 1.76%
Leading producer of construction chemicals.
(Cost $4,237,473)
-------------- --------
5,259,594 1.76%
CONSTRUCTION - 0.25%
2,468 GEBERIT AG
REGISTERED SHARES 759,777 0.25%
Manufactures and supplies water supply
pipes and fittings, installation systems,
drainage and flushing systems such as
visible cisterns, and other sanitary systems
for the commercial and residential construction
markets.
(Cost $666,597)
-------------- --------
759,777 0.25%
ELECTRICAL ENGINEERING & ELECTRONICS - 8.26%
4,055 BELIMO HOLDING AG
REGISTERED SHARES 1,155,535 0.39%
World market leader in damper and
volume control actuators for ventilation
and air-conditioning equipment.
(Cost $1,259,329)
280,000 LOGITECH INTERNATIONAL SA1,2
REGISTERED SHARES 10,500,904 3.51%
Manufactures personal computer input
devices, as well as producing trackballs,
desktop publishing programs and related
software.
(Cost $9,448,733)
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T H E S W I S S H E L V E T I A F U N D , I N C .
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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 2003
Percent
No. of of Net
Shares Security Value Assets
----------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
ELECTRICAL ENGINEERING & ELECTRONICS - (CONTINUED)
312,269 PHONAK HOLDING AG1
REGISTERED SHARES $3,999,754 1.33%
Designs and produces wireless analog and
digital hearing aids, transmitters, remote
controls, microphones and receivers for use in
wireless communications within broadcasting
and sports.
(Cost $3,028,857)
5,400 SAIA-BURGESS ELECTRONICS HOLDING AG
REGISTERED SHARES 1,510,908 0.50%
Develops and produces switches, motors
and programmable control devices.
Products are mainly used in the
automobile, heating and air conditioning
and telecommunications industries.
(Cost $1,485,298)
83,682 THE SWATCH GROUP AG
BEARER SHARES 7,583,305 2.53%
Manufactures watches, watch components,
jewelry, miniature batteries, LCD displays
and scoreboards. The company produces
watches under the brand name of Breguet,
Blancpain, Jacquet Droz, Omega, Longines,
Rado, Tissot, Certina and Swatch.
(Cost $6,413,259)
-------------- --------
24,750,406 8.26%
Percent
No. of of Net
Shares Security Value Assets
----------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 4.34%
494,000 CREDIT SUISSE GROUP2
REGISTERED SHARES $13,001,440 4.34%
A global operating financial group.
(Cost $13,525,583)
-------------- --------
13,001,440 4.34%
FOOD & LUXURY GOODS - 14.93%
300 LINDT & SPRUNGLI AG
REGISTERED SHARES 1,987,745 0.66%
Major manufacturer of premium
Swiss chocolates.
(Cost $1,196,399)
207,000 NESTLE AG2
REGISTERED SHARES 42,712,709 14.27%
Largest food and beverage processing
company in the world.
(Cost $12,427,540)
-------------- --------
44,700,454 14.93%
INSURANCE - 8.63%
243,530 CONVERIUM HOLDING AG2
REGISTERED SHARES 11,236,665 3.76%
Offers reinsurance services worldwide.
Provides accident and health,
automobile, aviation and space, credit and
surety, general third party liability, engineering,
e-commerce, intellectual property, life, marine,
professional liability and property, and catastrophe
insurance.
(Cost $11,634,713)
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T H E S W I S S H E L V E T I A F U N D , I N C .
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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 2003
Percent
No. of of Net
Shares Security Value Assets
----------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INSURANCE - (CONTINUED)
105,000 SWISS LIFE HOLDING1,2
REGISTERED SHARES $10,639,142 3.55%
Provides life insurance, institutional
investment management, and private
banking services.
(Cost $10,864,804)
33,195 ZURICH FINANCIAL SERVICES AG
REGISTERED SHARES 3,957,767 1.32%
Offers property, accident, health,
automobile, liability, financial risk and
life insurance and retirement products.
(Cost $3,155,023)
-------------- --------
25,833,574 8.63%
MISCELLANEOUS SERVICES - 7.07%
165,000 ADECCO SA
REGISTERED SHARES 6,797,091 2.27%
Leading personnel and temporary
employment company.
(Cost $4,970,631)
36,823 SGS SOCIETE GENERALE DE SURVEILLANCE
HOLDING SA2
REGISTERED SHARES 14,380,693 4.80%
Provides a variety of industrial
inspection, analysis, testing and
verification services worldwide.
(Cost $11,100,340)
-------------- --------
21,177,784 7.07%
Percent
No. of of Net
Shares Security Value Assets
----------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 28.37%
1,315,000 NOVARTIS AG2
REGISTERED SHARES $52,034,993 17.37%
One of the leading manufacturers
of pharmaceutical and
nutrition products.
(Cost $16,301,451)
420,000 ROCHE HOLDING AG2
DIVEDENDS RIGHTS CERTIFICATES 32,944,520 11.00%
Worldwide pharmaceutical company.
(Cost $8,467,363)
-------------- --------
84,979,513 28.37%
RETAIL - 0.79%
73,300 CHARLES VOEGELE HOLDING AG1
BEARER SHARES 2,381,012 0.79%
Family apparel retailer which focuses on
the value-for-money segment of the market.
Operates retail stores in Switzerland, Germany,
Austria, and the Benelux region.
(Cost $2,151,854)
-------------- --------
2,381,012 0.79%
TECHNOLOGY - 0.46%
68,593 MICRONAS SEMICONDUCTOR HOLDING AG1
REGISTERED SHARES 1,382,443 0.46%
Develops and manufactures a wide
range of semiconductors and modules
used by the automotive and consumer
goods industries.
(Cost $1,486,445)
-------------- --------
1,382,443 0.46%
10
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) JUNE 30, 2003
Percent
No. of of Net
Shares Security Value Assets
----------------------------------------------------------------------------------------------------------
COMMON STOCKS - (CONCLUDED)
TRANSPORTATION - 1.66%
67,611 KUEHNE & NAGEL INTERNATIONAL AG
REGISTERED SHARES $ 4,966,442 1.66%
Operates sea freight, land and rail
transportation businesses and
warehousing and distribution facilities.
(Cost $3,548,676)
-------------- --------
4,966,442 1.66
TOTAL COMMON STOCKS (COST $151,954,931) $269,906,104 90.11%
OTHER ASSETS IN EXCESS OF LIABILITIES 29,625,053 9.89
-------------- --------
NET ASSETS $299,531,157 100.00%
============== ========
----------------------------------------------------------------------------------------------------------
1 Non-income producing security.
2 One of the ten largest portfolio holdings.
See Notes to the Financial Statements.
11
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2003
----------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $151,954,931) $ 269,906,104
Cash 435,277
Foreign currency (Swiss francs) (cost $27,918,908) 28,270,279
Interest receivable 33,568
Tax reclaims receivable 1,405,638
Prepaid expenses and other 9,779
--------------
Total assets 300,060,645
--------------
LIABILITIES:
Advisory fees payable (Note 2) 204,573
Accrued expenses and other 324,915
--------------
Total liabilities 529,488
--------------
Net assets $ 299,531,157
--------------
COMPOSITION OF NET ASSETS:
Paid in capital 173,323,526
Undistributed net investment income 1,786,523
Accumulated net realized gain from investment transactions 5,968,656
Net unrealized appreciation on investments and foreign currencies 118,452,452
--------------
Net assets $ 299,531,157
--------------
NET ASSET VALUE PER SHARE:
($299,531,157 / 24,186,718 shares outstanding) $ 12.38
==============
----------------------------------------------------------------------------------------------------------------------------
See Notes to the Financial Statements.
12
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2003
----------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends (less foreign taxes withheld of $639,655) $ 3,624,709
Interest 52,339
Securities Lending Income 33,568
------------
Total income 3,710,616
------------
EXPENSES:
Investment advisory fees (Note 2) 1,164,371
Professional fees 217,668
Directors' fees & expenses 175,348
Administration fees 112,593
Custody fees 58,969
Printing and shareholder reports 23,771
Accounting fees 43,842
Transfer agent fees 48,018
Miscellaneous 79,513
------------
Total expenses 1,924,093
------------
Net investment income 1,786,523
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain from:
Investment transactions 3,253,546
Foreign currency transactions 5,730,358
Net change in unrealized appreciation/depreciation from:
Investments 11,165,997
Foreign currencies (4,078,356)
------------
Net Realized and Unrealized Gain on Investments
and Foreign Currencies 16,071,545
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS 17,858,068
============
----------------------------------------------------------------------------------------------------------------------------
See Notes to the Financial Statements.
13
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2003 1 DECEMBER 31, 2002
----------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment (expenses in excess of) income $ 1,786,523 $ (440,676)
Net realized gain from:
Investment transactions 3,253,546 13,569,040
Foreign currency transactions 5,730,358 (940,306)
Net change in unrealized appreciation/depreciation on
investments and foreign currencies 7,087,641 (29,587,930)
-------------- --------------
Net increase (decrease) in net assets from operations 17,858,068 (17,399,872)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income - (1,532,859)
In excess of net investment income - (178,799)
Net realized capital gains (3,265,207) (13,163,694)
-------------- --------------
Total distributions to shareholders (3,265,207) (14,875,352)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Value of shares issued in reinvestment of dividends and distributions 5,961,907 -
Value of shares repurchased (822,327) (2,361,886)
-------------- --------------
Total increase (decrease) from capital share transactions 5,139,580 (2,361,886)
-------------- --------------
Total increase (decrease) in net assets 19,732,441 (34,637,110)
NET ASSETS:
Beginning of period 279,798,716 314,435,826
-------------- --------------
End of period (including undistributed net investment income of
$1,786,523 and $0, respectively) $ 299,531,157 $ 279,798,716
============== ==============
----------------------------------------------------------------------------------------------------------------------------
1 Unaudited.
See Notes to the Financial Statements.
14
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR THE
SIX MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------
2003 1 2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance:
Net asset value at beginning of period $ 11.82 $ 13.16 $ 17.92 $ 17.52 $ 19.07 $ 16.48
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (expenses in excess
of income) 0.07 (0.02) (0.03) 0.002 0.01 0.002
Net realized and unrealized gain (loss)
on investments3 0.68 (0.71) (4.34) 1.68 (0.60) 3.60
--------- --------- --------- --------- --------- ---------
Total from investment operations 0.75 (0.73) (4.37) 1.68 (0.59) 3.60
--------- --------- --------- --------- --------- ---------
Gain from capital share repurchases 0.01 0.02 0.06 0.21 0.12 -
Capital charge resulting from the issuance
of fund shares (0.06) - (0.14) (0.12) - -
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment income - (0.06) - - (0.03) (0.07)
Dividends in excess of net investment income - (0.01) - - - -
Distributions from net realized capital gains (0.14) (0.56) (0.31) (1.37) (1.05) (0.94)
--------- --------- --------- --------- --------- ---------
Total distributions (0.14) (0.63) (0.31) (1.37) (1.08) (1.01)
--------- --------- --------- --------- --------- ---------
Net asset value at end of period $ 12.38 $ 11.82 $ 13.16 $ 17.92 $ 17.52 $ 19.07
========= ========= ========= ========= ========= =========
Market value per share at end of period $ 10.45 $ 9.64 $ 11.00 $ 14.50 $ 13.81 $ 16.00
========= ========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN4:
Based on market value per share 9.77% (4.46)% (22.10)% 15.06% (7.06)% 23.82%
Based on net asset value per share 6.06% (6.92)% (24.94)% 12.11% (1.09)% 22.89%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.37%6 1.31% 1.39%5 1.16% 1.11% 1.09%
Net investment income (expenses in excess
of income) 1.24%6 (0.14)% (0.23)% 0.01% 0.05% 0.01%
SUPPLEMENTAL DATA:
Net assets at end of period (000s) $299,531 $279,799 $314,436 $415,315 $416,599 $469,916
Average net assets during period (000's) $284,098 $308,018 $341,806 $422,426 $428,072 $464,967
Shareholders of record7 977 1,001 1,067 1,125 1,230 1,287
Portfolio turnover rate 63% 83% 32% 25% 14% 13%
----------------------------------------------------------------------------------------------------------------------------
1 Unaudited.
2 Less than $.01 per share.
3 Includes net realized currency gain (loss).
4 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 have
been restated to reflect subsequent changes to dividend reinvestment calculations.
5 The increase in the Fund's expense ratio was attributable to extraordinary expenses in connection with a stockholder's
proxy contest for the election of directors and termination of the management contract and defense against a lawsuit
against the Fund and its directors plus the impact of a decline in the Fund's net assets.
6 Annualized.
7 Not audited by Deloitte & Touche LLP.
See Notes to the Financial Statements.
15
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-ORGANIZATION AND SIGNIFICANT ACCOUNTING proceeds of a sale or the cost of a purchase with a specific
POLICIES offsetting transaction.
A. ORGANIZATION Dividend income, net of any foreign taxes withheld, is
The Swiss Helvetia Fund, Inc. (the "Fund") is registered recorded on the ex-dividend date. Interest income, including
under the Investment Company Act of 1940, as amended, (the amortization of premiums and accretion of discounts, is
"Act"), as a non-diversified, closed-end investment accrued daily. Estimated expenses are also accrued daily.
management company. The Fund is organized as a corporation
under the laws of the State of Delaware. The Fund records Swiss withholding tax as an expense, net of
any amount receivable from Swiss tax authorities in
The investment objective of the Fund is to seek long-term accordance with the tax treaty between the United States and
growth of capital through investment in equity and Switzerland.
equity-linked securities of Swiss companies.
D. DISTRIBUTIONS
B. VALUATION OF SECURITIES The Fund pays dividends annually to the extent it has any
The Fund values its investments at market value. net investment income and makes distributions of any net
realized capital gains to the extent they exceed any capital
When valuing listed equity securities, the Fund uses the loss carryforwards. The Fund determines the size and nature
last sale price prior to the calculation of the Fund's net of these distributions in accordance with provisions of the
asset value. When valuing equity securities that are not Internal Revenue Code. Distributions may be paid either in
listed or that are listed but have not traded, the Fund uses cash or in stock with an option to take cash. The Fund
the mean between the bid and asked prices for that day. records dividends and distributions on its books on the
ex-dividend date.
When valuing fixed income securities, the Fund uses the last
bid price prior to the calculation of the Fund's net asset E. FEDERAL INCOME TAXES
value. If a current bid price is not available, the Fund The Fund's policy is to continue to comply with the
uses the mean between the latest quoted bid and asked requirements of the Internal Revenue Code that are
prices. When valuing fixed income securities that mature applicable to regulated investment companies and to
within sixty days, the Fund uses amortized cost. distribute all its taxable income to its stockholders.
Therefore, no federal income tax provision is required.
It is the responsibility of the Fund's Board of Directors
(the "Board") to establish fair valuation procedures. When F. SECURITIES LENDING
valuing securities for which market quotations are not The Fund may lend securities to financial institutions. The
readily available or for which the market quotations that Fund retains beneficial ownership of the securities it has
are available are considered unreliable, the Fund determines loaned and continues to receive amounts equivalent to the
a fair value in good faith in accordance with these dividends paid on these securities and to participate in any
procedures. The Fund may use these procedures to establish changes in their market value. The Fund requires the
the fair value of securities when, for example, a borrowers of the securities to maintain collateral with the
significant event occurs between the time the market closes Fund in the form of cash and/or government securities equal
and the time the Fund values its investments. After to 102% of the value of the securities loaned. The Fund
consideration of various factors, the Fund may value the receives fees as compensation for lending its securities.
securities at their last reported price or at some other Either the Fund or the borrower may terminate the securities
value. On June 30, 2003, there were no fair valued loan at any time. On June 30, 2003, there were no securities
securities. on loan.
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on the trade date.
Realized gains and losses are determined by comparing the
16
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
G. FOREIGN CURRENCY TRANSLATION NOTE 2--FEES AND TRANSACTIONS WITH AFFILIATES
The Fund maintains its accounting records in U.S. dollars. Hottinger Capital Corp. ("HCC"), which is owned jointly by
The Fund determines the U.S. dollar value of foreign Hottinger U.S., Inc. and Hottinger & Cie (Zurich), is the
currency denominated assets, liabilities and transactions by Fund's advisor (the "Advisor"). The Fund pays the Advisor an
using prevailing exchange rates. In valuing assets and annual fee based on its month-end net assets which is
liabilities, the Fund uses the prevailing exchange rate on calculated and paid monthly at the following annual rates:
the valuation date. In valuing securities transactions, the 1.00% of the first $60 million, 0.90% of the next $40
receipt of income and the payment of expenses, the Fund uses million, 0.80% of the next $100 million, 0.70% of the next
the prevailing exchange rate on the transaction date. $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%
Net realized and unrealized gains and losses on foreign of such assets in excess of $600 million. For the period
currency translations shown on the Fund's financial ended June 30, 2003, the Fund paid the Advisor $1,164,371 in
statements result from the sale of foreign currencies, from investment advisory fees. The Fund paid Hottinger & Cie
currency gains or losses realized between the trade and $100,485 in brokerage commissions for the period ended June
settlement dates on securities transactions, and from the 30, 2003.
difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Fund's books and The Fund and the Advisor have agreed to share certain common
the U.S. dollar equivalent of the amounts actually received expenses subject to review and allocation by the Audit
or paid. Committee (the "Committee") of the Board. The Committee's
allocations are based on its determination of the relative
When calculating realized and unrealized gains or losses on benefits the Fund and the Advisor derive from the
investments in equity securities, the Fund does not separate expenditures. During 2003, the Committee allocated $7,418 of
the gain or loss attributable to changes in the foreign expenses incurred in connection with publicizing the Fund as
currency price of the security from the gain or loss follows: $3,709 to the Fund and $3,709 to the Advisor.
attributable to the change in the U.S. dollar value of the
foreign currency. Certain officers and directors of the Fund are also officers
or directors of HCC, Hottinger U.S. Inc., Hottinger & Cie
H. ESTIMATES (Zurich) and/or Forum Financial Group and its affiliates.
In preparing its financial statements in conformity with These persons are not paid by the Fund for serving in these
accounting principles generally accepted in the United capacities.
States, management makes estimates and assumptions. Actual
results may be different. NOTE 3--OTHER FEES
Under separate servicing agreements, affiliates of Forum
Financial Group, LLC (collectively, "Forum") provide certain
administration and portfolio accounting services to the
Fund. For its services, Forum receives a fee from the Fund
and is reimbursed for certain out-of-pocket expenses.
PFPC Inc. is the Fund's transfer agent. The Fund pays the
transfer agent a per account fee which is accrued daily and
paid monthly.
Swiss American Securities Inc. is the Fund's U.S. custodian.
Credit Suisse First Boston is the Fund's Swiss
sub-custodian. The Fund pays the custodian and sub-custodian
an annual fee.
17
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED)
The Fund pays each director who is not an interested person NOTE 6--STOCK REPURCHASE PROGRAM
(as such term is defined in the Act) of the Fund, its Pursuant to authorization by the Board, the Fund began open
Advisor or Forum Administrative Services, LLC approximately market purchases of its common stock on the New York Stock
$15,000 per annum in compensation, except for the Chairmen Exchange in 1999 and has continued purchases in each
of the Audit Committee and the Governance Committee, who the subsequent year. The Board has authorized the purchase of up
Fund pays an annual fee of approximately $16,500. In to 500,000 shares in 2003. During the period ended June 30,
addition, the Fund pays each disinterested director $750 for 2003, the Fund repurchased and retired 83,700 shares at an
each directors' meeting attended and $750 for each committee average price of $9.82 per share (including brokerage
meeting attended, if it is held separately. In addition, the commissions) and a weighted average discount of 17.29%.
Fund reimburses directors who are not employees of or These repurchases, which had a total cost of $822,327,
affiliated with the Advisor for out-of-pocket expenses resulted in an increase of $168,921 to the Fund's net asset
incurred in conjunction with attendance at meetings. value.
NOTE 4--CAPITAL SHARE TRANSACTIONS NOTE 7--LITIGATION
On April 2, 2001 and May 8, 2001, two complaints were filed
The Fund is authorized to issue up to 50 million shares of in purported class actions on behalf of stockholders of the
capital stock. HCC owned 113,788 of the 24,186,718 shares Fund, in the Court of Chancery of the State of Delaware,
outstanding on June 30, 2003. Transactions in capital shares against the Fund, each of its directors and HCC, the Fund's
were as follows: Investment Advisor (collectively, the "defendants"). The
complaints in these cases, entitled Kimberly Kahn V. Paul
For the Period Ended For the Year Ended Hottinguer et al. and Charles Miller V. Paul Hottinguer et
JUNE 30, 2003 DECEMBER 31, 2002 al., have been voluntarily dismissed by plaintiffs with
--------------------- ---------------------- prejudice pursuant to a settlement agreement that was
SHARES AMOUNT SHARES AMOUNT approved by the Delaware Chancery Court on June 4, 2003. In
Dividends the opinion of management, the terms of the settlement will
Reinvested 597,409 $ 5,961,907 - $ - not have a material adverse effect on the financial
Repurchased (83,700) (822,327) (219,700) (2,361,886) statements of the Fund.
--------- ----------- --------- ------------
Net increase
(decrease) 513,709 $ 5,139,580 (219,700) $(2,361,886)
========= =========== ========= ============
NOTE 5--INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of
investments, other than short-term obligations, for the
period ended June 30, 2003, were $165,869,316 and
$148,182,935, respectively.
At June 30, 2003, the net unrealized appreciation from
investments for those securities having an excess of value
over cost was $120,216,993 and the net unrealized
depreciation from investments for those securities having an
excess of cost over value was $2,265,820.
18
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
PROXY RESULTS
At the Annual Meeting of Stockholders held on May 22, 2003,
shares were voted as follows on the proposal presented to
the Stockholders to elect three Class III Directors to serve
for a three year term and until their successors are elected
and qualified:
Authority
For Withheld
---------- ---------
Paul Hottinguer 17,904,538 1,550,406
Claude Mosseri-Marlio 17,889,098 1,565,846
Stephen K. West, Esq. 17,894,106 1,560,838
19
T H E S W I S S H E L V E T I A F U N D , I N C .
----------------------------------------------------------------------------------------------------------------------------
PRIVACY POLICY
The Swiss Helvetia Fund, Inc. believes that the privacy of ACCURACY OF PERSONAL INFORMATION
its stockholders is extremely important. We are firmly We strive to keep your personal and financial information
committed to protecting any personal and financial accurate. If our records are incorrect or out-of-date,
information you provide to us. When you provide us personal please notify us immediately by contacting the Fund at
information, we use it only to develop and deliver products 1-888-794-7700.
and services that you request. For example, we may disclose
information to affiliates and service providers who work CHANGES TO OUR POLICIES
with us. We will also use or disclose your personal If you have any questions about our privacy policy, please
information if required by or in conformity with legal or contact Mr. Rudolf Millisits at 1-888-794-7700. We may, in
regulatory requirements. We require our officers, affiliates our discretion, change this Privacy Policy at any time. If
and service providers to maintain appropriate safeguards to we make material changes we will provide you with notice of
ensure the security of your non-public personal information. these changes.
Otherwise, we do not disclose any information about current
or former stockholders. Sincerely,
The Swiss Helvetia Fund, Inc.
LIMITS OF USE OF PERSONAL INFORMATION
We limit the use, collection and retention of stockholder
information to what we believe is necessary to provide
personal financial service and related products. We collect
information about our stockholders from sources such as
account and other forms as well as from telephone, website
and other communications. Access to this information is
limited to only those people who require that information to
service your account.
20
THE SWISS
A SWISS -------------
INVESTMENTS HELVETIA
FUND -------------
FUND, INC.
-------------
WWW.SWZ.COM
THE SWISS HELVETIA FUND, INC.
EXECUTIVE OFFICES
The Swiss Helvetia Fund, Inc.
1270 Avenue of the Americas SEMI-ANNUAL
Suite 400 REPORT
New York, NY 10020 For the
1-888-SWISS-00 Six Months Ended
(212) 332-2760 June 30, 2003
http://www swz.com
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) - The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that material information relating to the
registrant, including its consolidated subsidiaries, is made known to them by
others within those entities, particularly during the period in which this
report is being prepared. Further, in their opinion, the registrant's disclosure
controls and procedures are adequately designed, and are operating effectively
to ensure that information required to be disclosed by the registrant in the
reports it files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.
(b) - There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(Exhibit filed herewith).
(c) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Exhibit filed herewith).