The Fund values its investment in a private equity limited partnership in accordance with Accounting Standards Codification 820-10-35, “Investments in Certain Entities that Calculate Net Asset Value Per Share (Or its
Equivalent)” (“ASC 820-10-35”). ASC 820-10-35 permits a reporting entity to measure the fair value of an investment that does not have a readily determinable fair value, based on the NAV of the investment as a practical expedient, without further
adjustment, unless it is probable that the investment will be sold at a value significantly different than the NAV. If the NAV of the investment is not as of the Fund’s measurement date, then the NAV should be adjusted to reflect any significant
events that may change the valuation. Inputs and valuation techniques for these adjustments may include fair valuations of the partnership and its portfolio holdings provided by the partnership’s general partner or manager, other available
information about the partnership’s portfolio holdings, values obtained on redemption from other limited partners, discussions with the partnership’s general partner or manager and/or other limited partners and comparisons of previously-obtained
estimates to the partnership’s audited financial statements. In using the unadjusted NAV as a practical expedient, certain attributes of the investment that may impact its fair value are not considered. Attributes of those investments include the
investment strategies of the privately held companies and may also include, but are not limited to, restrictions on the investor’s ability to redeem its investments at the measurement date and any unfunded commitments.
Inputs and valuation techniques used by the Fund to value its Level 3 investments in privately-held companies may include the following: acquisition cost; fundamental analytical data; discounted cash flow analysis;
nature and duration of restrictions on disposition of the investment; public trading of similar securities of similar issuers; economic outlook and condition of the industry in which the issuer participates; financial condition of the issuer; and the
issuer’s prospects, including any recent or potential management or capital structure changes. Although these valuation inputs may be observable in the marketplace as is characteristic of Level 2 investments, the privately-held companies, categorized
as Level 3 investments, generally are highly illiquid in terms of resale.
When valuing Level 3 investments, management also may consider potential events that could have a material impact on the operations of a privately-held company. Not all of these factors may be considered or available,
and other relevant factors may be considered on an investment-by-investment basis. The table below summarizes the techniques and unobservable inputs for the valuation of Level 3 investments.
The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
C. Derivative Instruments
GAAP requires enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity's results of operations
and financial position.
The fair value of derivative instruments as reported within the Schedule of Investments as of December 31, 2020:
The effect of derivative instruments on the Statement of Operations for the year ended December 31, 2020:
|
|
Amount of Realized Gain on Derivatives Recognized in Income
|
|
Derivatives not accounted
|
Statement of
|
|
|
for as hedging instruments
|
Operations Location
|
Value
|
|
Equity Contracts—Warrants
|
Net Realized Gain on Investments
|
$ —
|
|
|
|
|
|
Change in Unrealized Appreciation on Derivatives Recognized in Income
|
|
Derivatives not accounted
|
Statement of
|
|
|
for as hedging instruments
|
Operations Location
|
Total
|
|
Equity Contracts—Warrants
|
Net change in unrealized appreciation of investments
|
$30,339
|
The average monthly share amount of warrants during the period November 1, 2020 – December 31, 2020 was 116,600. The average monthly market value of such warrants during the period November 1, 2020 – December 31, 2020
was $26,761.
D. Securities Transactions and Investment Income
Securities transactions are recorded on the trade date. Realized gains and losses are determined by comparing the proceeds of a sale or the cost of a purchase to a specific offsetting transaction.
Dividend income, net of any foreign taxes withheld, is recorded on the ex-dividend date. Interest income, including amortization of premium and accretion of discount, is accrued daily. Estimated expenses are also
accrued daily.
The Fund records Swiss withholding tax as a reduction of dividend income, net of any amount reclaimable from Swiss tax authorities in accordance with the tax treaty between the United States and Switzerland.
Distributions received from securities that represent a return of capital or capital gains are recorded as a reduction of cost of investment and/or as a realized gain.
E. Distributions
The Fund pays dividends at least annually to the extent it has any federally taxable net investment income and makes distributions of any net realized capital gains to the extent that they exceed any capital loss
carryforwards. The Fund determines the size and nature of these distributions in accordance with provisions of the Internal Revenue Code of 1986, as amended (the “Code”). The Fund records dividends and distributions on the ex-dividend date.
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
In May 2018, the Board adopted a managed distribution policy that permits the Fund to distribute long-term capital gains more frequently than once per year as permitted by the Act. Distributions under the managed
distribution plan may consist of net investment income, net realized short-term capital gains, net realized long-term capital gains and, to the extent necessary, return of capital (or other capital sources). In August 2018, the Board suspended until
further notice any distributions that would otherwise be payable pursuant to the managed distribution policy. In November 2019, the Board approved the resumption of distributions pursuant to the managed distribution policy. The Board may change or
terminate the managed distribution policy at any time without prior notice to Fund stockholders, which could have an adverse effect on the market price of the Fund’s shares. On March 31, 2020, June 29, 2020 and September 30, 2020, in accordance with
the Fund’s managed distribution policy as then in effect, the Fund paid quarterly distributions of $0.1404 per share of the Fund’s common stock to all stockholders of record as of March 23, 2020, June 22, 2020, and September 21, 2020. On December 31,
2020 in accordance with the Fund's managed distribution policy as then in effect, the Fund paid a distribution of $0.13755 per share of the Fund's common stock to all stockholders of record as of December 21, 2020.
F. Federal Income Taxes
The Fund’s policy is to continue to comply with the requirements of the Code that are applicable to regulated investment companies and to distribute all its taxable income to its stockholders. Therefore, no federal
income tax provision is required.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. See Note 5 for federal income tax treatment of foreign currency gains/losses.
Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years and has concluded that no provision for federal income tax is required in the Fund’s financial statements. The
Fund files federal tax returns which remain open for examination generally for the current year and the three prior years. In addition, the Fund holds investments in Switzerland and other foreign tax jurisdictions. Withholding taxes on foreign
interest and dividends have been provided for in accordance with each applicable country’s tax rules and rates.
G. Foreign Currency Translation
The Fund maintains its accounting records in U.S. dollars. The Fund’s assets are invested primarily in Swiss equities. In addition, the Fund can make its temporary investments in Swiss franc-denominated bank deposits,
short-term debt securities and money market instruments. Substantially all income received by the Fund is in Swiss francs. The Fund’s NAV, however, is reported, and distributions from the Fund are made, in U.S. dollars, resulting in gain or loss from
currency conversions in the ordinary course of business. Historically, the Fund has not entered into transactions designed to reduce currency risk and does not intend to do so in the future. The cost basis of foreign denominated assets and
liabilities is determined on the date that they are first recorded within the Fund and translated to U.S. dollars. These assets and liabilities are subsequently valued each day at prevailing exchange rates. The difference between the original
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
cost and current value denominated in U.S. dollars is recorded as unrealized foreign currency gain/loss. In valuing securities transactions, the receipt of income and the payment of expenses, the Fund uses the
prevailing exchange rate on the transaction date.
Net realized and unrealized gains and losses on foreign currency shown in the Fund’s financial statements result from the sale of foreign currencies, from currency gains or losses realized between the trade and
settlement dates of securities transactions, and from the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid.
When calculating realized and unrealized gains or losses on investments, the Fund does not separate the gain or loss attributable to changes in the foreign currency price of the security from the gain or loss
attributable to the change in the U.S. dollar value of the foreign currency. Other foreign currency translations resulting in realized and unrealized gain or loss are disclosed separately.
H. Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
I. Concentration of Market Risk
The Fund primarily invests in securities of Swiss issuers. Such investments may carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and
economic developments, unfavorable movements in the Swiss franc relative to the U.S. dollar, and the possible imposition of exchange controls and changes in governmental law and restrictions. In addition, concentrations of investments in securities
of issuers located in a specific region expose the Fund to the economic and government policies of that region and may increase risk compared to a fund whose investments are more diversified.
Note 2—Fees and Transactions with Affiliates
Schroder Investment Management North America Inc. (“SIMNA”) and its affiliate, Schroder Investment Management North America Limited (“SIMNA Ltd” and together with SIMNA, “Schroders”), serve as the Fund’s investment
adviser and investment sub-adviser, respectively. The Fund pays SIMNA an annual advisory fee of 0.70% of the Fund’s average month-end net assets up to $250 million, 0.60% of such assets in excess of $250 million and up to $350 million, 0.55% of such
assets in excess of $350 million and up to $450 million, 0.50% of such assets in excess of $450 million and up to $550 million, and 0.45% of such assets in excess of $550 million. As compensation for its investment sub-advisory services, SIMNA Ltd
receives 58.5% of the advisory fee paid by the Fund to SIMNA.
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
The Fund pays each Director who is not an “interested person” (as such term is defined in the Act) of the Fund or Schroders (“Non-Interested Directors”), $42,000 annually in compensation, except for the Chairman of the
Board to whom the Fund pays an annual fee of $56,000 and for the Chairs of the Audit, the Pricing and the Governance/Nominating Committees to each of whom the Fund pays an annual fee of $48,000. In addition, the Fund pays each Non-Interested Director
$2,000 for each Board meeting attended in person, and $750 for each Board meeting attended by telephone. Each Director who is a member of a Committee will be paid a fee of $750 for each Committee meeting attended, whether in person or by telephone.
The Board or a Committee may establish ad hoc committees or subcommittees. Any Committee or sub-committee member may be compensated by the Fund for incremental work outside of the regular meeting process based on the value determined to be added to
the Fund. In July 2018, the Board approved a change to its By-Laws and Board committee charters to provide that each Director who is not an “interested person” of Schroders or its affiliates will be entitled to receive the above fees.
Note 3—Other Service Providers
American Stock Transfer & Trust Company is the Fund’s transfer agent. U.S. Bank, N.A. serves as the Fund’s custodian and U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, provides
administration and portfolio accounting services to the Fund. The Fund pays these service providers’ fees, which are accrued daily and paid monthly.
In addition to its other service provider fees, the Fund incurs certain professional fees, including fees of its outside legal counsel as well as fees of its independent registered public accounting firm. Those fees
vary depending on the nature of the Fund’s activities each year.
Note 4—Capital Share Transactions
The Fund is authorized to issue up to 50 million shares of capital stock. Transactions in capital shares were as follows:
|
|
|
For the Year Ended
|
|
|
For the Year Ended
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Dividends Reinvested
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
Repurchased through Stock Repurchase Program (Note 6)
|
|
|
(54,857
|
)
|
|
|
(449,102
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Repurchased from Tender Offer (Note 7)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net Increase/(Decrease)
|
|
|
(54,857
|
)
|
|
$
|
(449,102
|
)
|
|
|
—
|
|
|
$
|
—
|
|
Note 5—Federal Income Tax and Investment Transactions
The tax character of distributions paid during 2020 and 2019 were as follows:
|
|
|
2020
|
|
|
2019
|
|
|
Ordinary Income
|
|
$
|
1,066,099
|
|
|
$
|
1,656,554
|
|
|
Return of Capital
|
|
|
6,332,807
|
|
|
|
—
|
|
|
Long-Term Capital Gains
|
|
|
—
|
|
|
|
206,149
|
|
|
Total
|
|
$
|
7,398,906
|
|
|
$
|
1,862,703
|
|
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
Under current tax law, capital losses and specified ordinary losses realized after October 31 may be deferred and treated as occurring on the first business day of the following fiscal year. The Fund did not defer any
post-October capital and currency losses and other late-year deferrals for the fiscal year ended December 31, 2020.
Capital loss carryovers retain their character as either long-term capital losses or short-term capital losses and are applied as a new loss on the first day of the immediately succeeding tax year. During the tax year
ending December 31, 2020, the Fund had a short-term capital loss carryover of $13,218 and a long-term capital loss carryover of $2,562,930.
At December 31, 2020, the components of distributable earnings on a tax basis were as follows:
|
Undistributed Ordinary Income
|
|
$
|
—
|
|
|
Capital Loss Carry Forward
|
|
|
(2,576,148
|
)
|
|
Current Late-Year Loss Deferral and Post-October Losses
|
|
|
—
|
|
|
Other Accumulated Gain (Loss)
|
|
|
(21,189
|
)
|
|
Net Unrealized Appreciation (Depreciation)
|
|
|
39,021,432
|
|
|
Total
|
|
$
|
36,424,095
|
|
The differences between book basis and tax basis distributable earnings are primarily attributable to tax deferral of wash sales and investments in partnerships.
Gains and losses from foreign currency transactions are treated as ordinary income and loss, respectively, for federal income tax purposes.
The following summarizes all distributions declared by the Fund during the year ended December 31, 2020:
|
|
Record Date
|
|
Payable Date
|
|
Ordinary Income
|
|
|
Return of Capital
|
|
|
Total Distribution
|
|
|
|
3/23/20
|
|
3/31/20
|
|
$
|
0.02023006
|
|
|
$
|
0.12016994
|
|
|
$
|
0.14040
|
|
|
|
6/22/20
|
|
6/29/20
|
|
|
0.02023006
|
|
|
|
0.12016994
|
|
|
|
0.14040
|
|
|
|
9/21/20
|
|
9/30/20
|
|
|
0.02023006
|
|
|
|
0.12016994
|
|
|
|
0.14040
|
|
|
|
12/21/20
|
|
12/31/20
|
|
|
0.01981941
|
|
|
|
0.11773059
|
|
|
|
0.13755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.55875
|
|
On the statements of assets and liabilities, the following adjustments were made for permanent tax adjustment:
|
Total Distributable Earnings
|
$ 4
|
|
Paid In Capital
|
$(4)
|
Note 6—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. The Board has authorized a stock repurchase program permitting such purchases by
the Fund in each subsequent year, except for 2014. The principal purpose of the stock repurchase program has been to enhance stockholder value by increasing the Fund’s NAV per share.
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
On December 7, 2018, the Fund announced the Board’s approval of the Fund’s stock repurchase program for 2019. Under the program, the Fund is authorized to make open-market repurchases of its common stock of up to
250,000 shares. The Fund did not repurchase any common stock pursuant to the program during the year ended December 31, 2019. On December 13, 2019, the Fund announced the Board’s approval of the Fund’s stock repurchase plan for 2020 of up to 250,000
shares of common stock. During the year ended December 31, 2020, the Fund repurchased 54,857 shares of its capital stock in the open market at a cost of $449,102. The weighted average discount of these purchases comparing the average purchase price
to net asset value at the close of the New York Stock Exchange was 16.33%.
On December 12, 2020, the Board approved the Fund’s stock repurchase plan for 2021 of up to 250,000 shares of common stock. The Fund intends to repurchase shares of its common stock, at such times and in such amounts
as is deemed advisable and in accordance with applicable law, subject to various factors, including the limitations imposed by the federal securities laws governing the repurchase of an issuer’s stock by the issuer and the Fund’s available cash to
repurchase shares of the Fund’s common stock in a tax-efficient manner.
Note 7—Tender Offer
On November 20, 2018, the Fund accepted for cash purchase 24,638,918 shares of the Fund’s common stock at a price equal to $7.86 per share, which represented 98% of the Fund’s NAV per share of $8.02 as of the close of
the regular trading session of the New York Stock Exchange on November 19, 2018. As a result of the purchase of the 24,638,918 shares, the Fund had 13,267,111 shares of common stock outstanding.
Note 8—Capital Commitments
As of December 31, 2020, the Fund maintains an illiquid investment in one private equity limited partnership. This investment appears in the Fund’s Schedule of Investments. The Fund’s capital commitment for this
partnership is shown in the table below:
|
|
Original Capital
|
Unfunded
|
|
Investments
|
Commitment*
|
Commitment*
|
|
Private Equity Limited Partnership—International(a)
|
|
|
|
Aravis Biotech II, Limited Partnership
|
$3,676,679
|
$ —
|
|
*
|
The original capital commitment represents 3,250,000 Swiss francs, which has been fully funded as of December 31, 2020. The Swiss franc/U.S. dollar exchange rate as of December 31, 2020 was
used for conversion and equaled 0.88395 as of such date.
|
|
|
|
|
(a)
|
This category consists of one private equity limited partnership that invests primarily in venture capital companies in the biotechnology and medical technology sectors. There is no
redemption right for the interest in this limited partnership. Instead, the nature of investments in this category is that distributions are received through the realization of the underlying assets of the limited partnership.
|
Note 9—Investment Transactions
The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the year ended December 31, 2020 were $18,209,490 and $13,572,018, respectively.
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (concluded)
Note 10—Subsequent Events
The Fund has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date financial statements were available to be issued. Based on this evaluation, no adjustments or
additional disclosures were deemed to be required to the financial statements as of December 31, 2020.
THE SWISS HELVETIA FUND, INC.
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
The Swiss Helvetia Funds, Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of The Swiss Helvetia Fund, Inc. (the “Fund”), including the schedule of investments, as of December 31, 2020, the related statement of operations
for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the
“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2020, the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB. We have served as the Fund’s auditor since 2016.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of
internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian and other issuers. We believe that our audits provide a reasonable basis for
our opinion.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
March 1, 2021
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited)
|
|
The following information in this annual report is a summary of certain information about the Fund.
Recent Changes:
This section summarizes certain changes since December 31, 2019. This information may not reflect all of the changes that have occurred since you purchased shares of the Fund.
There have been no changes in investment policies not approved by stockholders since the Fund’s annual report to stockholders for the fiscal year ended December 31, 2019. The Investment and Market Risk discussion has
been updated to include certain risks associated with the COVID-19 pandemic.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
The following summarizes the Fund’s current investment objective and principal investment strategies:
Investment Objective
The Fund’s investment objective is to seek long-term capital appreciation through investment in equity and equity-linked securities of Swiss companies. The Fund also may acquire and hold equity and equity-linked
securities of non-Swiss companies in the limited instance where: (1) the Fund holds an investment in a Swiss company, and (2) such Swiss company undergoes a merger, takeover, reorganization or other form of business combination with a non-Swiss
issuer (a “reorganization”), or reorganizes (or “redomiciles”) itself as a new corporate entity outside of Switzerland, and (3) the Fund, as a stockholder in the Swiss company, acquires equity or equity-linked securities in the non-Swiss issuer as a
result of the transaction. The Fund would be permitted, but not required, to reacquire equity and equity-linked securities of Swiss companies that have redomiciled, so long as the Fund held an investment in the Swiss company at or before the time
the company redomiciled. The Fund’s investment objective is fundamental and may not be changed without the approval of a majority of the Fund’s outstanding voting securities.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by normally investing at least 80% of its net assets, plus borrowings for investment purposes, in Swiss-equity and equity linked securities that are traded on a Swiss
stock exchange, traded at the pre-bourse level of one or more Swiss stock exchanges, traded through a market maker or over the counter in Switzerland. The Fund also may invest in Swiss-equity and equity-linked securities of Swiss companies that are
traded on other major European stock exchanges. Equity and equity-linked securities include registered shares, bearer shares, participation and dividend certificates, convertible bonds and bonds with warrants attached and unattached warrants.
For defensive purposes, during a period in which changes in Swiss equity markets or other adverse economic conditions or changes in Swiss political conditions warrant, the Fund may temporarily reduce its position
in equity securities and invest in Sfr-denominated bank deposits, short-term debt or money market instruments.
The Fund may invest in securities of Swiss Real Estate Companies (as defined below), and acquire, hold and sell real estate or mortgages on real estate acquired through default,
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (continued)
|
|
liquidation or other distributions or an interest in real estate as a result of the Fund’s ownership of such securities. Additionally, the Fund may invest a portion of its assets in investment companies and in certain
pooled investment vehicles, including those that invest in private equity by investing in private equity funds (so-called “funds of funds”) or by making direct investments, including in infrastructure projects and real estate investments.
The Fund is permitted to (i) leverage up to 10% of its total assets (including the amount borrowed) and (ii) engage in certain options transactions. The Fund may borrow money for investment purposes and as a temporary
measure for various purposes, including the payment of dividends. The Fund may enter into options to hedge market risk and to generate income.
No assurance can be given that the Fund’s investment objective will be achieved.
Investment Philosophy and Process
In making investment decisions securities are evaluated for the opportunity for capital appreciation as well as for their potential to provide regular income and growth of income. The Adviser reviews each company’s
potential for success in light of general economic and industry trends, as well as the company’s quality of management, financial condition, business plan, industry and sector market position, dividend payout ratio and corporate governance.
Fundamental research efforts are enhanced through communication among the portfolio managers and the company’s management team, who conduct internal research and extract information from external research. The portfolio managers communicate
frequently with external analysts, and in-person visits with company management, together with local knowledge, help to provide opinions critical to investing in Swiss companies. The macroeconomic environment is reflected in fair value models. It is
also taken into account in portfolio construction, where disciplined risk diversification is applied. In addition, the Adviser incorporates financially material environmental, social and governance (ESG) factors into its investment process. The
Adviser evaluates the impact and risk around issues such as climate change, environmental performance, labor standards and corporate governance, which it views as important in its assessment of a company’s risk and potential for profitability.
Common Stocks. The Fund primarily invests in equity and equity-linked securities in the form of common stock. Common stocks represent the residual ownership interest in the
issuer and holders of common stock are entitled to the income and increase in the value of the assets and business of the issuer after all of its debt obligations and obligations to preferred stockholders are satisfied. Common stocks generally have
voting rights. Common stocks fluctuate in price in response to many factors including historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.
Convertible Securities. The Fund may invest in convertible securities, which include fixed income securities that may be exchanged or converted into a predetermined number of
shares of the issuer’s underlying common stock at the option of the holder during a specified period. Convertible securities may
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (continued)
|
|
take the form of convertible preferred stock, convertible bonds or debentures, units consisting of bonds and warrants or a combination of the features of several of these securities. Investment characteristics of
convertible securities vary widely, which allows these securities to be employed for a variety of investment strategies.
Investment Companies and Other Pooled Investment Vehicles. The Fund may invest in other investment companies, and may invest up to 5% of its total assets in pooled investment
vehicles that invest in private equity by investing in private equity funds (so-called “funds of funds”) or by making direct investments, including in infrastructure projects and real estate investments. The Fund is only permitted to invest in
investment companies to the extent permitted by the Investment Company Act of 1940, as amended (the “1940 Act”), and as consistent with the Fund’s investment objective and policies. Investments in private equity funds and other pooled investment
vehicles are not subject to the limitations on investing in investment companies imposed by the 1940 Act. Private equity funds are typically structured as either limited partnerships or limited liability companies with a fixed-life, usually around
ten years. The general partner of the private equity fund, who also is typically its adviser, makes investments, monitors them and finally exits them for a return on behalf of the limited partners, which are investors such as the Fund. The private
equity fund’s assets are typically invested within three to five years, and after all investments are fully divested, the private equity fund can be terminated.
Illiquid and Restricted Securities. The Fund may invest up to 10% of its total assets in illiquid securities (i.e., securities that are not readily marketable). For this
purpose, illiquid securities include, but are not limited to, restricted securities (securities the disposition of which is restricted under the Federal securities laws) and securities that may be resold pursuant to Rule 144A under the Securities
Act, but that are deemed to be illiquid. It is expected that these illiquid securities will generally consist of equity or equity-linked securities purchased in privately negotiated transactions.
Swiss Real Estate Companies. The Fund may invest in equity and equity-linked securities issued by Swiss real estate companies, including Real Estate Investment Trusts (“REITs”)
or REIT-like structures (“Swiss Real Estate Companies”). The Fund considers a real estate company to be a company that derives at least 50% of its revenue from the ownership, construction, financing, management or sale of commercial, industrial or
residential real estate or has at least 50% of its assets in real estate investments. The Fund considers a real estate company to be a Swiss Real Estate Company if it: (1) is organized in or has its principal office in Switzerland or (2) has a
significant amount of real estate assets or investments in Switzerland, even if it is organized or its principal office is outside of Switzerland. The Fund’s investment in Swiss Real Estate Companies is deemed to be an investment in Swiss equity or
equity-linked securities for purposes of the Fund’s investment objective.
Options Transactions. The Fund may engage in the following options transactions: (i) buying calls on securities in which the Fund can
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (continued)
|
|
invest; (ii) buying calls on Swiss stock indices; (iii) writing covered calls on securities in which the Fund can invest; (iv) buying puts on these types of securities; and (v) buying puts on Swiss stock indices. The
Fund may engage in these options transactions on an established Swiss exchange, European exchange (e.g., Eurex) or through privately negotiated transactions referred to as over-the-counter options. The Adviser may utilize options contracts to manage
the Fund’s exposure to changing security prices.
PRINCIPAL RISKS
The following summarizes the principal risks of an investment in the Fund:
General Risks of Investing in the Fund
Investment and Market Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire amount that you invest. Common stock prices,
including the prices of shares of the Fund’s Common Stock are sensitive to general movements in the stock market. Securities of a company may decline in value due to its financial prospects and activities, including certain operational impacts, such
as data breaches and cybersecurity attacks. Securities may also decline in value due to general market and economic movements and trends, including adverse changes to credit markets, or as a result of other events such as geopolitical events, natural
disasters, or widespread pandemics or other adverse public health developments. As part of the Advisers’ investment strategy, the Adviser evaluates certain factors as part of its fundamental analysis, including financially material ESG factors. The
analysis of these factors may not work as intended. Market prices of the Fund’s shares of Common Stock may be affected by investors’ perceptions regarding closed-end funds generally or the Fund’s specific underlying investments.
An outbreak of respiratory disease caused by a novel coronavirus (sometimes referred to as “COVID-19”) was first detected in China in December 2019 and has now developed into a global pandemic. This pandemic has
resulted in closed borders, enhanced health screenings, disruption of, and delays in, the provision of healthcare services, quarantines, cancellations of events and product orders, disruptions to supply chains and customer activity, as well as
general concern and uncertainty. The pandemic has, and other pandemics and epidemics that may arise in the future could, adversely affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be
foreseen at the present time. In addition, the effect of infectious diseases in developing or emerging market countries may be greater due to less established health care systems. Health crises caused by the novel coronavirus pandemic may exacerbate
other pre-existing political, social and economic risks in certain countries. As a result, the extent to which the pandemic may negatively affect a fund’s performance or the duration of any potential business disruption is uncertain. The effects of
the pandemic may last for an extended period of time.
Market Price Discount from Net Asset Value. Shares of closed-end investment companies frequently trade at a discount from net asset value. This is a risk separate and distinct
from the risk that the Fund’s net asset value will decrease. The Fund cannot predict whether shares of its Common
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (continued)
|
|
Stock will trade at, above or below net asset value, but the Fund’s Common Stock has generally traded at a discount.
Foreign Securities Risk. In addition to the specific risks associated with investing in Swiss securities (see, “Risk Factors—General Risks of Investing in Swiss Securities—Swiss
Securities Risk”), foreign investments generally may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other things, the possibility of political and economic developments and the
level of governmental supervision and regulation of foreign securities markets.
Equity Securities Risk. Common stock holds the lowest priority in the capital structure of a company, and therefore takes the largest share of the company’s risk and its
accompanying volatility. An adverse event, such as an unfavorable earnings report, may depress the value of a particular common stock. Also, prices of common stocks are sensitive to general market movements.
Convertible Securities Risk. Convertible securities are bonds, debentures, notes, preferred securities or other securities that may be converted or exchanged (by the holder or
the issuer) into shares of the underlying common stock (or cash or securities of equivalent value), either at a stated price or stated rate. Convertible securities have characteristics similar to both fixed income and equity securities. Convertible
securities generally are subordinated to other similar but nonconvertible securities of the same issuer, although convertible bonds, as corporate debt obligations, enjoy seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock, of the same issuer.
Illiquid and Restricted Securities Risk. The Fund may invest in restricted securities and other investments that may be illiquid. Illiquid investments involve the risk that the
securities will not be able to be sold at the time desired by the Fund or at prices approximating the value at which the Fund is carrying the securities on its books.
The Fund also may be subject to a heightened liquidity risk in respect of its investments in private equity securities, including: (i) lack of a public market; (ii) dependence on an exit strategy, such as an initial
public offering or sale of a business, which may not occur to realize the anticipated value of an investment or even dispose of the investment without a significant or total loss; and (iii) dependence on managerial assistance provided by other
investors and the willingness of other investors or third parties to provide additional financial support to the issuer.
Investing in Investment Companies and Other Pooled Investment Vehicles. The Fund’s stockholders will be subject to duplicative expenses to the extent the Fund invests in other
investment companies or pooled investment vehicles. A profit-sharing fee arrangement may create incentives for an adviser or manager to take greater investment risks in an attempt to realize a higher profit participation percentage. The securities of
other investment companies and pooled investment vehicles also may be leveraged and may, depending on the extent of leverage, be subject to greater leverage risks than to which the Fund is subject. Investment companies and pooled investment vehicles
in
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (continued)
|
|
which the Fund may invest may have investment policies that differ from those of the Fund. In addition, the Fund will be dependent upon the investment and research abilities of persons other than the Adviser.
Investments in private equity funds are “illiquid.” It will be difficult for the Fund to gain access to, or liquidate, its capital contribution as those assets are “locked-up” in long-term investments by the private
equity fund that usually last for approximately ten years and sometimes longer. Distributions are made only as investments are converted to cash, and the Fund typically will have no right to demand that sales be made. As such, the Fund and its
stockholders may not see a realized return on an investment in a private equity fund for a number of years after its initial capital contribution.
Investing in private equity funds presents the additional risk that the Fund may have limited access to information concerning the underlying fund and its investments. For funds that are not listed on an exchange, the
Adviser will fair value the Fund’s investment pursuant to procedures approved by the Fund’s Board of Directors. Although the Adviser will review the valuations provided by the funds, the Adviser may not be able to confirm independently the accuracy
of such valuations.
Swiss Real Estate Company Risk. In addition to the general risks associated with investing in Swiss equity and equity-linked securities, the Fund’s investments in Swiss Real
Estate Companies will be linked to the performance of the Swiss real estate markets. The Fund will not generally invest in real estate directly, and will typically invest only in securities issued by Swiss Real Estate Companies. However, the Fund
also is subject to the risks associated with the direct ownership of real estate. These risks include: (i) declines in the value of real estate; (ii) risks related to general and local economic conditions; (iii) overbuilding and extended vacancies of
properties; (iv) increases in property taxes and operating expenses; (v) costs and liabilities associated with environmental problems; and (vi) casualty or condemnation losses. The yields available from investments in real estate depend on the amount
of income and capital appreciation generated by the related properties. Property values may fall due to increasing vacancies or declining rents resulting from unanticipated economic, legal, cultural or technological developments. Performance of
investments in REITs and REIT-like structures may decline as a result of the failure of borrowers to pay their loans and poor management. Income and real estate values also may be adversely affected by such factors as applicable laws, interest rate
levels and the availability of financing. In addition, real estate investments are relatively illiquid and, therefore, the ability of real estate companies to vary their portfolios promptly in response to changes in economic or other conditions is
limited.
Options Risk. The Fund is permitted, but not required, to engage in certain options transactions (relating to securities in which the Fund can invest and Swiss stock indices)
which are considered derivative instruments. The use of these options involves risks different from or possibly greater than, the risks associated with investing directly in the underlying assets. The Adviser’s may utilize options to manage the
Fund’s exposure to changing security prices. Successful use by the Fund of options will be subject to the Adviser’s ability to predict correctly movements in the prices of securities and indices underlying options and the stock market
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (continued)
|
|
generally. To the extent the Adviser’s predictions are incorrect, the Fund may incur losses.
Leverage Risk. Using leverage is a speculative investment technique. The use of leverage may result in higher volatility of the net asset value and the market value of the
Fund’s Common Stock. Because the interest rates on borrowings may vary, the Fund’s return will fall if interest rates rise and the Fund’s income will fluctuate. If the market value of the Fund’s portfolio declines, the leverage will result in a
greater decrease in net asset value than if the Fund were not leveraged. The Fund will pay any costs and expenses relating to any borrowings. To the extent that the Fund is required or elects to prepay any borrowings, the Fund may need to liquidate
investments to fund such prepayments. Liquidation at times of adverse economic conditions may result in capital loss and reduce returns. There can be no assurance that any leverage strategy the Fund employs will be successful.
General Risks of Investing in Swiss Securities
Swiss Securities Risk. Trading in Swiss equities involves certain risks and special considerations not usually associated with investing in securities of established U.S.
companies, including (i) risks related to the nature of the market for Swiss equities, including the risk that the Swiss equities markets may be affected by market developments in different ways than U.S. securities markets and may be more volatile
than U.S. securities markets; (ii) political and economic risks with respect to Switzerland, including the possible imposition of, or changes in, currency exchange laws or other Swiss laws or restrictions applicable to investments in Swiss equities;
and (iii) fluctuations in the rate of exchange between currencies and costs associated with currency conversion.
Swiss Market and Concentration Risk. The Swiss securities markets have substantially less trading volume than the U.S. securities markets. Additionally, the capitalization of
the Swiss securities markets is highly concentrated. As of December 31, 2020, the top three holdings in the main overall performance index in Switzerland, the Swiss Performance Index, accounted for 47.5% of the index. By comparison, as of the same
date, the Fund has three holdings that exceed 5% of its net assets which, in the aggregate, constitute 42% of its net assets. Securities of some companies located in Switzerland will be less liquid and more volatile than securities of comparable
U.S. companies. This combination of lower volume and greater concentration in the Swiss securities markets may create a risk of greater price volatility than in the U.S. securities markets. Commissions for trading on Swiss exchanges are generally
higher than commissions for trading on U.S. exchanges, although the Adviser seeks the most favorable net results (taking into account transaction costs) on the Fund’s portfolio transactions and, in certain instances, may be able to purchase portfolio
investments on which commissions are negotiable. Further, Swiss markets typically have less government supervision compared to the U.S. markets.
Disclosure Standards Risk. Swiss reporting, accounting and auditing standards differ from U.S. standards in important respects. Swiss corporations, other than subsidiaries of
U.S. companies, do not provide all of the disclosure required by U.S. law and accounting practice, and such disclosure may be less timely than required of U.S. companies by the Securities
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (continued)
|
|
and Exchange Commission (the “SEC”) or under U.S. generally accepted accounting principles (“U.S. GAAP”). As a result, less specific information may be available to investors in Swiss securities than to investors in
U.S. securities. Swiss banks and insurance companies are subject to stricter disclosure requirements than other Swiss companies, but these rules are not as comprehensive as SEC or U.S. GAAP reporting standards.
Foreign Currency and Exchange Rate Risk. Substantially all of the Fund’s assets are invested in Swiss equities and equity-linked securities. In addition, the Fund makes its
temporary investments in Swiss franc-denominated bank deposits, short-term debt securities and money market instruments. Substantially all income received by the Fund is in Swiss francs. The Fund’s net asset value, however, is reported, and
distributions from the Fund are made, in U.S. dollars. Historically, the Fund has not entered into transactions designed to reduce currency risk and does not intend to do so in the future. Accordingly, currency risks in connection with investments in
the Fund will be borne by investors. Therefore, the Fund’s reported net asset value and distributions could be adversely affected by devaluation of the Swiss franc relative to the U.S. dollar. In addition, the Fund computes its income at the foreign
exchange rate in effect on the day of its receipt by the Fund. If the value of the Swiss franc falls relative to the U.S. dollar between the date the Fund receives such income and the date it makes distributions, and, if the Fund has insufficient
cash in U.S. dollars to meet distribution requirements, it may be required to liquidate securities in order to make distributions. There is no assurance that the Fund will be able to liquidate securities in order to meet such distribution
requirements. Such liquidations, if required, also may adversely affect the Fund.
Tax Risk. Dividends and certain interest paid to the Fund by Swiss corporate entities will be subject to certain withholding taxes in Switzerland. Subject to certain limitations
imposed by the Internal Revenue Code of 1986, as amended (the “Code”), foreign taxes withheld from distributions to the Fund or otherwise paid by the Fund may be creditable against taxes owed or deductible from income by U.S. stockholders for U.S.
Federal income tax purposes if the Fund makes an election to treat the stockholders as having paid those taxes for U.S. Federal income tax purposes. The Fund’s ability to make such an election is subject to certain requirements in the Code. Although
the Fund expects to be eligible to make such an election each year, and intends to do so if it is eligible, there is no assurance that the Fund will be eligible each year. If the election is made, the amount of such foreign taxes paid by the Fund
will be includible as income to the stockholders for U.S. Federal income tax purposes. Non-U.S. investors may not be able to credit or deduct such foreign taxes, but may be deemed to have additional income from the Fund subject to U.S. withholding
tax. Investors should review carefully the information discussed under “U.S. Federal Taxation” below and should discuss with their tax advisors the specific tax consequences of investing in the Fund.
Additional Risk Considerations
Cybersecurity Risk. With the increased use of technologies by Fund service providers to conduct business, such as the Internet, the Fund is susceptible to operational,
information
THE SWISS HELVETIA FUND, INC.
|
Fund Investment Objective, Principal Investment
|
December 31, 2020
|
|
Strategies and Principal Risks (Unaudited) (concluded)
|
|
security and related risks. In general, cyber incidents can result from deliberate attacks or unintentional events. Cybersecurity failures by or breaches of the Adviser or the Fund’s administrator and other service
providers (including, but not limited to, the custodian or transfer agent), and the issuers of securities in which the Fund invests, may disrupt and otherwise adversely affect their business operations. This may result in financial losses to the
Fund, impede Fund trading, interfere with the Fund’s ability to calculate its NAV, interfere with Fund shareholders’ ability to transact business or cause violations of applicable privacy and other laws, regulatory fines, penalties, reputational
damage, reimbursement or other compensation costs, or additional compliance costs.
Non-Diversified Status. The Fund is classified as “non-diversified” under the 1940 Act. A non-diversified fund has the ability to invest more of its assets in securities of a
single issuer than if it were classified as a “diversified” fund, which may increase volatility. If the Fund’s investment in an issuer represents a relatively significant percentage of the Fund’s portfolio, the value of the Fund’s portfolio will be
more impacted by a loss on that investment than if the portfolio were more diversified.
Risk of Anti-Takeover Provisions. The Fund has provisions in its Articles of Incorporation and By-laws that could have the effect of delaying, deferring, preventing or otherwise
limiting the ability of other entities or persons to acquire control of the Fund, to cause the Fund to engage in certain transactions or to modify the Fund’s structure.
General Fund Investing Risks. The Fund is not a complete investment program and there is no guarantee that the Fund will achieve its investment objective. It is possible to
lose money by investing in the Fund. An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
FUND ORGANIZATIONAL STRUCTURE
Effective June 10, 2020, the Board of Directors of the Fund amended the By-Laws and Governance and Nominating Committee Charter. The amendments were in regards to advance notice of stockholder nominees for director and
other shareholder proposals.
THE SWISS HELVETIA FUND, INC.
Additional Information (Unaudited)
This report is sent to the stockholders of the Fund 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.
Proxy Voting Information
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 730-2932 and on the
SEC’s website at http://www.sec.gov. The Fund’s proxy voting record for the twelve-month period ended June 30 is available, without charge and upon request, by calling (800) 730-2932 and on the SEC’s website at http://www.sec.gov.
Availability of Quarterly Portfolio Schedules
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Part F of Form N-PORT. The Fund’s Part F of Form N-PORT are available on the SEC’s website
at http://www.sec.gov.
Code of Ethics
The Board of Directors of the Fund and the Advisor have adopted Codes of Ethics pursuant to Rule 17j-1 under the Act and Rule 204A-1 under the Investment Advisers Act of 1940, as amended the “Codes”). The Codes apply
to the personal investing activities of various individuals including directors and officers of the Fund, the Fund’s portfolio managers 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 managers’ decisions or who come into possession of contemporaneous information concerning the investment activities of the Fund.
The fundamental principle of the Codes 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, within the Advisor, 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.
The Advisor’s Code provides that any individual subject to such Code and who violates the provisions of the Code 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.
THE SWISS HELVETIA FUND, INC.
Additional Information (Unaudited) (concluded)
Federal Tax Distribution Information
The Fund designates 100% of its ordinary income dividend distributions for the qualified dividend rate (QDI) as defined in Section 1(h)(11) of the Internal Revenue Code.
The amounts may differ from those elsewhere in this report because of difference between tax and financial reporting requirements. For federal income tax purposes, distributions from short-term capital gains are
classified as ordinary income.
The Fund intends to elect to pass through to stockholders the income tax credit for taxes paid to foreign countries. Foreign source income and foreign tax expense per outstanding shares on December 31, 2020, were $0.25
and $0.03 per share, respectively.
Foreign Income Information
Pursuant to Section 853 of the Internal Revenue Code, the Fund designates the following amounts as foreign taxes paid for the year ended December 31, 2020. Foreign taxes paid for purposes of Section 853 may be less
than actual foreign taxes paid for financial statement purposes.
|
Gross Foreign
|
Foreign Taxes
|
Gross Foreign
|
Foreign Taxes
|
Shares Outstanding
|
|
Source Income
|
Pass-through
|
Source Income Per Share
|
Pass-through Per Share
|
at 12/31/20
|
|
$3,277,765
|
$443,710
|
$0.24808523
|
$0.03358322
|
13,212,254
|
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Directors (Unaudited)
The following tables set forth certain information about each person currently serving as a Director of the Fund, including his or her beneficial ownership of Common Stock of the Fund. All information presented in the
tables is as of December 31, 2020.
|
|
|
|
|
Shares and
|
|
|
|
|
|
Dollar Range of
|
|
|
Position(s)
|
|
Other Directorships
|
Common Stock
|
|
Name,
|
with Fund
|
Principal Occupation(s)
|
Held By Director
|
Beneficially
|
|
Address1 & Age
|
(Since)
|
During At Least The Past Five Years
|
During At Least The Past Five Years
|
Owned
|
|
Class I
|
|
Richard Dayan
|
Director (2018);
|
President and owner of
|
Trustee of High Income Securities
|
0
|
|
|
Member of the
|
Cactus Trading since 1990
|
Fund since 2018; Director of
|
$0
|
|
Age: 77
|
Audit Committee
|
|
Emergent Capital, Inc. (formerly,
|
|
|
|
(2018); Member of
|
|
Imperial Holdings, Inc.) until 2016
|
|
|
|
the Governance/
|
|
|
|
|
|
Nominating
|
|
|
|
|
|
Committee (2018)
|
|
|
|
|
Moritz A. Sell
|
Director (2017);
|
Principal, Edison Holdings GmbH;
|
Trustee of High Income Securities
|
3,330
|
|
|
Member and
|
Senior Advisor, Markston
|
Fund since 2018; Director of FAX
|
$10,001-$50,000
|
|
Age: 53
|
Chair of the Audit
|
International LLC; Director, Market
|
(Aberdeen Asia Pacific Income
|
|
|
|
Committee (2017);
|
Strategist and Head of Proprietary
|
Fund) and FCO (Aberdeen Global
|
|
|
|
Lead Independent
|
Trading (London Branch),
|
Income Fund) since 2018; Director of
|
|
|
|
Director (2018)
|
Landesbank Berlin AG and
|
IAF (Aberdeen Australia Equity Fund)
|
|
|
|
|
Landesbank Berlin Holding AG
|
since 2004; Director of Aberdeen
|
|
|
|
|
(formerly, Bankgesellschaft Berlin AG)
|
Greater China Fund until 2018;
|
|
|
|
|
from 1996 to 2013
|
Chairman and Director of
|
|
|
|
|
|
Aberdeen Singapore Fund
|
|
|
|
|
|
until 2018
|
|
|
Class II
|
|
Andrew Dakos*
|
Director
|
Partner, Bulldog Investors, LLP;
|
President and Director of Special
|
1,064
|
|
|
(2017) and
|
Principal of the former general partner
|
Opportunities Fund, Inc. since
|
$1-$10,000
|
|
Age: 54
|
Chairman (2018)
|
of several private investment
|
2009; Trustee, Crossroads
|
|
|
|
|
partnerships in the Bulldog
|
Liquidating Trust (formerly,
|
|
|
|
|
Investors group of private funds;
|
Crossroads Capital, Inc.) from
|
|
|
|
|
Principal of the managing general
|
2015-2020; President and Trustee of
|
|
|
|
|
partner of Bulldog Investors
|
High Income Securities Fund since
|
|
|
|
|
General Partnership
|
2018; Director, Brookfield DTLA
|
|
|
|
|
|
Fund Office Trust Investor Inc.
|
|
|
|
|
|
since 2017; Director, Emergent
|
|
|
|
|
|
Capital, Inc. until 2017
|
|
|
*
|
Mr. Dakos is considered an “interested person” of the Fund within the meaning of the 1940 Act (and a Class II Interested Director of the Fund) as a result of his position as President and
Chief Executive Officer of the Fund.
|
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Directors (Unaudited) (concluded)
|
|
|
|
|
Shares and
|
|
|
|
|
|
Dollar Range of
|
|
|
Position(s)
|
|
Other Directorships
|
Common Stock
|
|
Name,
|
with Fund
|
Principal Occupation(s)
|
Held By Director
|
Beneficially
|
|
Address1 & Age
|
(Since)
|
During At Least The Past Five Years
|
During At Least The Past Five Years
|
Owned
|
|
Class III
|
|
Phillip F. Goldstein
|
Director (2018);
|
Partner of Bulldog Investors, LLP
|
Chairman and Director of The
|
115,747
|
|
|
Member and
|
since 2009; Principal of the former
|
Mexico Equity and Income Fund,
|
Over $100,000
|
|
Age: 76
|
Chair of the
|
general partner of several private
|
Inc. since 2000; Chairman,
|
|
|
|
Governance/
|
investment partnerships in the
|
Director and Secretary of Special
|
|
|
|
Nominating
|
Bulldog Investors group of private
|
Opportunities Fund, Inc. since
|
|
|
|
Committee (2018)
|
funds since 2009
|
2009; Chairman and Secretary of
|
|
|
|
|
|
High Income Securities Fund since
|
|
|
|
|
|
2018; Director of Brookfield DTLA
|
|
|
|
|
|
Fund Office Trust Investor Inc.
|
|
|
|
|
|
since 2017; MVC Capital, Inc. from
|
|
|
|
|
|
2012-2020; Trustee of Crossroads
|
|
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Liquidating Trust (formerly,
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Crossroads Capital, Inc.) from
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2016-2020; Chairman and
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Director of Emergent Capital, Inc.
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(formerly, Imperial Holdings, Inc.)
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until 2017
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Gerald Hellerman
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Director (2018);
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Chief Compliance Officer of
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Director of Mexico Equity and
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4,323
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Member of the
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The Mexico Equity and Income Fund,
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Income Fund, Inc. since 2001;
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$10,001-$50,000
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Age: 83
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Audit Committee
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Inc. from 2001 through March 31,
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Special Opportunities Fund, Inc.
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(2018); Member
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2020 and Special Opportunities
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since 2009; MVC Capital, Inc. from
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and Chair of the
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Fund, Inc. from 2009 through
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2003-2020; Trustee of Crossroads
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Pricing Committee
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March 31, 2020; Managing Director
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Liquidating Trust (formerly,
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(2018)
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of Hellerman Associates (a financial
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Crossroads Capital, Inc.) from
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and corporate consulting firm)
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2017-2020; Fiera Capital Series Trust
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since 1993 (which terminated
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since 2017; Trustee of High
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activities as of December 31, 2013)
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Income Securities Fund since 2018;
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Director of Emergent Capital, Inc.
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(formerly, Imperial Holdings, Inc.)
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until 2017; Ironsides Partners
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Opportunity Offshore Fund Ltd.
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until 2016
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THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Officers (Unaudited)
The following table sets forth certain information about each person serving as an Officer of the Fund as of December 31, 2020.
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Officers2
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Shares and
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Dollar Range of
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Common Stock
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Name,
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Position(s)
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Term of Office and
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Principal Occupation(s)
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Beneficially
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Address1 & Age
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with Fund
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Length of Time Served
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During At Least The Past Five Years
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Owned
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Andrew Dakos
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President and
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President and Chief
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Partner, Bulldog Investors, LLP;
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1,064
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Executive Officer since 2019;
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Principal of the former general
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$1-$10,000
|
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Age: 54
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Officer; Director
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Chairman since 2018;
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partner of several private
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and Chairman.
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Director since 2017
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investment partnerships in the
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Bulldog Investors group of private
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funds; Principal of the managing
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general partner of Bulldog
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Investors General Partnership
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Thomas Antonucci
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Chief Financial
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Since 2019
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Director of Operations,
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0
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Officer
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Bulldog Investors, LLP;
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$0
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Age: 52
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Chief Financial Officer
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and Treasurer of Special
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Opportunities Fund; Treasurer
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of High Income Securities Fund
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Stephanie Darling
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Chief Compliance
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Since 2019
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General Counsel and Chief
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0
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Officer
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Compliance Officer of Bulldog
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$0
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Age: 50
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Investors, LLP; Chief Compliance
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Officer of High Income Securities
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Fund, Special Opportunities Fund,
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Inc., and Mexico Equity and
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Income Fund, Inc.; Principal of The
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Law Office of Stephanie Darling;
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Editor-in-Chief of The
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Investment Lawyer
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Rajeev Das
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Secretary
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Since 2019
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Head of Trading, Bulldog
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32
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|
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Investors, LLP
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$1-$10,000
|
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Age: 52
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1
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The address for each Director and Executive Officer is c/o The Swiss Helvetia Fund, Inc., 615 East Michigan Street, Milwaukee, WI 53202.
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2
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Each Executive Officer serves on a year-to-year basis for an indefinite term, until his or her successor is elected and qualified.
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THE SWISS HELVETIA FUND, INC.
Automatic Dividend Reinvestment Plan (Unaudited)
Terms and Conditions
Pursuant to this Automatic Dividend Reinvestment Plan (the “Plan”) of The Swiss Helvetia Fund, Inc. (the “Fund”), unless a holder (each, a “Shareholder”) of the Fund’s shares of common stock (the “Common Shares”)
otherwise elects, all income dividends, capital gain distributions and returns of capital, if any (collectively referred to herein as “dividends”), on such Shareholder’s Common Shares will be automatically reinvested by American Stock Transfer &
Trust Company, as agent for Shareholders in administering the Plan (the “Plan Administrator”), in additional Common Shares of the Fund. Shareholders who elect not to participate in the Plan will receive all dividends payable in cash directly to the
Shareholder of record (or, if the Common Shares are held in street or other nominee name, then to such nominee) by American Stock Transfer & Trust Company LLC, as the Dividend Disbursing Agent. Shareholders may elect not to participate in the
Plan and to receive all dividends in cash by contacting the Plan Administrator. Enrollment, purchase or sales of shares and other transactions or services offered by the Plan can be directed to the Plan Administrator through the following:
Telephone
Telephone the Plan Administrator: 1-888-556-0425.
In Writing
You may also write to the Plan Administrator at the following address: American Stock Transfer & Trust Company, PO Box 922, Wall Street Station, New York, NY 10269-0560. Be sure to include your name, address,
daytime phone number, social security or tax I.D. number and a reference to The Swiss Helvetia Fund, Inc. on all correspondence.
Participation in the Plan is completely voluntary and may be terminated at any time without penalty by providing notice in writing to the Plan Administrator at least 3 business days prior to any dividend payment date
for that dividend to be payable in cash. A request for termination that is received less than 3 business days prior to any dividend payment date will be processed by the Plan Administrator, but you will have that dividend reinvested in additional
Common Shares. However, all subsequent dividends will be payable in cash unless and until you resume participation in the Plan. To resume participation in the Plan, your request to enroll in the Plan must be received by the record date for that
dividend distribution. If received after the record date, your participation in the Plan will begin with the next dividend declaration.
Whenever the Fund declares a dividend, payable either in Common Shares or in cash, participants in the Plan will receive a number of Common Shares determined in accordance with the following provisions and
non-participants in the Plan will receive cash. The Common Shares will be acquired by the Plan Administrator for the participants’ accounts, depending upon the circumstances described below, either: (i) through the receipt of additional unissued but
authorized Common Shares from the Fund (“newly issued Common Shares”) or (ii) by purchase of outstanding Common Shares on the open market (“open-market purchases”) on the New York Stock Exchange, the primary national securities exchange on which the
Common Shares are traded, or elsewhere.
THE SWISS HELVETIA FUND, INC.
Automatic Dividend Reinvestment Plan (Unaudited) (continued)
If, on the payment date for any dividend, the net asset value (“NAV”) per Common Share is equal to or less than the market price per Common Share (plus estimated brokerage trading fees) (such condition being referred
to herein as “market premium”), the Plan Administrator will invest the dividend amount in newly issued Common Shares on behalf of the participants. The number of newly issued Common Shares to be credited to each participant’s account will be
determined by dividing the dollar amount of the dividend by the NAV per Common Share on the date the Common Shares are issued, provided that, if the NAV per Common Share is less than or equal to 95% of the then current market price per Common Share
on the date of issuance, the dollar amount of the dividend will be divided by 95% of the market price on the date of issuance for purposes of determining the number of shares issuable under the Plan.
If, on the payment date for any dividend, the NAV per Common Share is greater than the market price of the Common Shares (plus estimated brokerage trading fees) (such condition being referred to herein as “market
discount”), the Plan Administrator will invest the dividend amount in Common Shares acquired on behalf of the participants in open-market purchases.
In the event of a market discount on the payment date for any dividend, the Plan Administrator will have until the last business day before the next date on which the Common Shares trade on an “ex-dividend” basis or in
no event more than 30 days after the record date for such dividend, whichever is sooner (the “last purchase date”), to invest the dividend amount in Common Shares acquired in open-market purchases. If, before the Plan Administrator has completed its
open-market purchases, the market price of a Common Share exceeds the NAV per Common Share, the average per Common Share purchase price paid by the Plan Administrator may exceed the NAV of the Common Shares, resulting in the acquisition of fewer
Common Shares than if the dividend had been paid in newly issued Common Shares on the dividend payment date. Because of the foregoing difficulty with respect to open-market purchases, if the Plan Administrator is unable to invest the full dividend
amount in open-market purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making open-market purchases and may invest the uninvested portion of the
dividend amount in newly issued Common Shares at the NAV per Common Share at the close of business on the last purchase date provided that, if the NAV is less than or equal to 95% of the then current market price per Common Share, the dollar amount
of the dividend will be divided by 95% of the market price on the date of issuance for purposes of determining the number of Common Shares issuable under the Plan.
The Plan Administrator maintains all registered Shareholders’ accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by Shareholders for tax records.
Common Shares in the account of each Plan participant generally will be held by the Plan Administrator in non-certificated form
THE SWISS HELVETIA FUND, INC.
Automatic Dividend Reinvestment Plan (Unaudited) (continued)
in the name of the Plan participant, although the Plan Administrator will issue certificates for whole Common Shares upon your request. Certificates for fractional Common Shares will not be issued.
In the case of Shareholders such as banks, brokers or nominees that hold Common Shares for others who are the beneficial owners, the Plan Administrator will administer the Plan on the basis of the number of Common
Shares certified from time to time by the record Shareholder and held for the account of beneficial owners who participate in the Plan.
There will be no brokerage charges with respect to Common Shares issued directly by the Fund as a result of dividends payable either in Common Shares or in cash. However, each participant will pay a pro rata share of
brokerage trading fees incurred with respect to the Plan Administrator’s open-market purchases of Common Shares in connection with the reinvestment of dividends under the Plan.
Participants in the Plan may sell any or all of their Common Shares in their Plan accounts by contacting the Plan Administrator. The Plan Administrator currently charges $15.00 for the transaction, plus $0.10 per
Common Share for this service. Participants also may withdraw their Common Shares from their Plan accounts and sell those Common Shares through their broker.
Neither the Fund nor the Plan Administrator will provide any advice, make any recommendations, or offer any opinion with respect to whether or not you should purchase or sell your Common Shares or otherwise participate
in the Plan. You must make independent investment decisions based on your own judgment and research. The Common Shares held in Plan accounts are not subject to protection under the Securities Investor Protection Act of 1970.
Neither the Fund nor the Plan Administrator will be liable for any good faith act or for any good faith omission to act, including, without limitation, any claim or liability arising out of failure to terminate a
participant’s account upon the participant’s death, the prices at which Common Shares are purchased or sold for a participant’s account, the times when purchases or sales of Common Shares are made, or fluctuations in the market value of Common
Shares. However, nothing contained in this provision affects a Shareholder’s right to bring a cause of action based on alleged violations of the federal securities laws.
Voting
Each Shareholder proxy will include those Common Shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for Common
Shares held pursuant to the Plan in accordance with the instructions of the participants.
Taxation
The automatic reinvestment of dividends will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends.
THE SWISS HELVETIA FUND, INC.
Automatic Dividend Reinvestment Plan (Unaudited) (concluded)
Amendments to Plan
The Fund reserves the right to suspend, amend or terminate the Plan at any time. All Shareholders of record, both participants and non-participants in the Plan, will be notified of any suspension, termination or
significant amendment of the Plan. If the Plan is terminated, Common Shares held in the participants’ accounts will be distributed to the participants. Any change in the source of purchase of Common Shares under the Plan from open market purchases or
direct issuance by the Plan Administrator does not constitute an amendment to the Plan.