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, NY 10020
Alexandre de Takacsy, President
Banque Hottinger & Cie SA
Schutzengasse 30
CH-8001 Zurich
Switzerland
Registrant’s telephone number, including area code: 1-888-SWISS-00
Date of fiscal year end: December 31
Date of reporting period: January 1, 2012 – December 31, 2012
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. § 3507.
Item 1. Reports to Stockholders.
THE SWISS HELVETIA FUND, INC.
1
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders
2
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
3
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
4
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
5
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
6
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
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THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
8
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
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THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (continued)
| Peer Group/Indices Performance Comparison in Swiss Francs1 | ||||||||||||||||||||||||||||
| Total return as of year ended December 31 |
||||||||||||||||||||||||||||
| 2012 |
2011 |
2010 |
2009 |
2008 |
2007 |
2006 |
||||||||||||||||||||||
| Swiss Helvetia Fund |
10.87% | -11.14% | 7.64% | -5.05% | -28.19% | -2.67% | 20.56% | |||||||||||||||||||||
| Swiss Performance Index (SPI) |
17.72% | -7.72% | 2.92% | 23.18% | -34.05% | -0.05% | 20.67% | |||||||||||||||||||||
| Swiss Market Index (SMI) |
14.93% | -7.77% | -1.68% | 18.27% | -34.77% | -3.43% | 15.85% | |||||||||||||||||||||
| iShares MSCI Switzerland2 |
19.28% | -7.60% | 3.24% | 18.55% | -31.59% | -0.97% | 20.02% | |||||||||||||||||||||
| CS EF (CH) Swiss Blue Chips3 |
17.24% | -9.74% | 1.51% | 19.98% | -35.72% | -1.66% | 18.78% | |||||||||||||||||||||
| UBS (CH) Equity Fund4 |
14.64% | -10.40% | 2.18% | 22.44% | -33.76% | -2.55% | 18.98% | |||||||||||||||||||||
| Pictet (CH)—Swiss Equities5 |
20.10% | -10.50% | 2.07% | 27.00% | -36.50% | 1.94% | 19.37% | |||||||||||||||||||||
| Saraswiss (Bank Sarasin)6 |
17.70% | -9.66% | 3.71% | 18.62% | -34.87% | -2.86% | 18.69% | |||||||||||||||||||||
| Sources | : Bloomberg, management companies’ websites and Citi Fund Services Ohio, Inc. |
| 1 | Performance of funds is based on changes in each fund’s NAV over a specified period. In each case total return is calculated assuming reinvestment of all distributions. Funds listed, other than iShares MSCI Switzerland, are not registered with the Securities and Exchange Commission, are not offered for sale in the United States and are not subject to the same regulatory and investment restrictions as the Fund. Performance and descriptive information about the funds are derived from their published investor reports and websites, which are subject to change. |
| 2 | Shares of iShares MSCI Switzerland, an open-end exchange-traded fund (ETF), are traded on the NYSE Arca. The fund seeks to provide investment results that correspond to the performance of the Swiss market, as measured by the MSCI Switzerland Index. The index represents Switzerland’s largest and most established public companies, accounting for approximately 85% of the market capitalization of all Switzerland’s publicly traded stocks. Performance of shares of iShares MSCI Switzerland is calculated based upon the closing prices of the period indicated 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: 12/31/97 = 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, 12/31/03 = 1.24, 12/31/04 = 1.14, 12/31/05 = 1.32, 12/31/06 = 1.22, 12/31/07 = 1.13, 12/31/08 = 1.06, 12/31/09 = 1.03, 12/31/10 = 0.93, 12/31/11 = 0.94, 12/31/12 = 0.92 |
| 3 | This fund gives investors access to the Swiss equity market. It has a broadly-diversified portfolio geared to the long-term value growth, with a preference to large cap stocks. Stock selection is based on criteria such as company valuation, business climate, market positioning and management quality. |
| 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 companies listed in Switzerland and included in the SPI, mainly in blue chip stocks. |
| 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. |
Past performance is no guarantee of future results.
10
THE SWISS HELVETIA FUND, INC.
Letter to Stockholders (concluded)
| Cumulative Performance 1/1/97-12/31/12 |
||||||||||||||||||||||||||||||||||||||
| 2005 |
2004 |
2003 |
2002 |
2001 |
2000 |
1999 |
1998 |
1997 |
||||||||||||||||||||||||||||||
| 33.20% | 7.75% | 22.54% | -20.40% | -22.91% | 14.06% | 14.70% | 15.57% | 53.99% | 113.19% | |||||||||||||||||||||||||||||
| 35.61% | 6.89% | 22.06% | -25.95% | -22.03% | 11.91% | 11.69% | 15.36% | 55.19% | 150.41% | |||||||||||||||||||||||||||||
| 33.21% | 3.74% | 18.51% | -27.84% | -21.11% | 7.47% | 5.71% | 14.28% | 58.93% | 73.04% | |||||||||||||||||||||||||||||
| 32.45% | 6.34% | 19.14% | -26.23% | -23.12% | 7.75% | 12.22% | 11.74% | 47.79% | 108.43% | |||||||||||||||||||||||||||||
| 32.27% | 2.75% | 18.13% | -28.75% | -22.12% | 10.97% | 7.57% | 14.21% | 59.90% | 87.93% | |||||||||||||||||||||||||||||
| 33.50% | 5.00% | 18.14% | -26.02% | -22.04% | 7.42% | 6.43% | 12.75% | 55.94% | 89.49% | |||||||||||||||||||||||||||||
| 37.06% | 7.05% | 20.10% | -27.93% | -22.35% | 7.34% | 9.38% | 11.05% | 55.65% | 115.47% | |||||||||||||||||||||||||||||
| 33.05% | 2.93% | 19.64% | -28.51% | -24.45% | 9.72% | 7.10% | 14.41% | 53.57% | 79.47% | |||||||||||||||||||||||||||||
11
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Directors
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, 2012. Information is presented separately with respect to Directors who have been determined to be non-interested Directors and Directors who are interested Directors under the Investment Company Act of 1940, as amended.
| Class I Non-Interested Directors (Terms will Expire in 2013) | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Held by Director During at Least the Past Five Years |
Shares and Dollar Range of Common Stock Beneficially Owned1 | ||||
| Claude W. Frey HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 69 |
Director (1995); and Member of the Governance/ Nominating Committee (2002) and the Audit Committee (2012) |
President of the Swiss Parliament from 1994 to 1995; President of the Swiss Police Academy (Neuchâtel) from 1996 to 2003; Member of the Swiss Parliament from 1979 to 2003; Parliamentary Assembly of the Council of Europe (Strasbourg) from 1996 to 2004; Executive Board of the “North-South Centre” (Lisbon) since 1999; President of the National Committee for Foreign Affairs from 2001 to 2003; Vice President of the National Committee for Foreign Affairs from 1999 to 2001; Chairman of the Board: Bérun Frais SA (Marin) from 2002 to 2012; Federation of Swiss Food Industries (Berne) from 1991 to 2001; Association of Swiss Chocolate Manufacturers (Berne) from 1991 to 2000; Vice Chairman of the Board: Federation of Swiss Employers’ Association (Zurich) from 1997 to 2001 | Chairman of the Board: Infra Tunnel SA (Marin); Beton Frais SA (Marin); Member of the Board: SCCM SA (Crans-Montana); Banque Internationale à Luxembourg (Suisse) SA, Zurich since 2003, Vice Chairman of Board since 2009; Chairman of the Executive Board of the “North-South Centre” (Lisbon); Chairman of the Federal Committee for Employee Pension Plans (Berne); Chairman of the Advisory Board of International Swiss State Broadcast since 2009; President of the Steering Committee of InterNutrition (Zurich) from 2000 to 2008; Dexia Public Finance (Suisse) Geneva from 2006 to 2010; Racemark Industries SA (Suisse) Couvet from 2006 to 2010 | 5,086 $50,001-$100,000 | ||||
12
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Directors (continued)
| Class I Non-Interested Directors (Terms will Expire in 2013) | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Five Years |
Shares and Dollar Range of Common Stock Beneficially Owned1 | ||||
| Jean-Marc Boillat HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 70 |
Director (2005); Member (2005) and Chair (2011) of the Governance/ Nominating Committee; and Member of the Pricing Committee (2009 to 2011 and since 2012) | Former CEO, Tornos-Bechler S.A., Moutier; Former Ambassador of Switzerland in various countries, including Lebanon, Cyprus, Angola, Mozambique and Argentina | None | 3,000 $10,001-$50,000 | ||||
| R. Clark Hooper HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 66 |
Director (2007); Member (2007) and Chair (2009) of the Audit Committee; and Member of the Governance/ Nominating Committee (2007) | President of Dumbarton Group LLC (regulatory consulting) from 2003 to 2007; Various positions, including Executive Vice President of
Regulatory Policy and Oversight (2002-2003) and Strategic Programs (1992-2002) of the National Association of Securities Dealers, Inc. (currently, Financial Industry Regulatory Authority, Inc.) from 1972 to 2003 |
Director of certain funds in the American Funds fund complex (67 funds) since 2003; Director of JP Morgan Value Opportunities Fund since 2005; Member of the Executive Committee and Board of Trustees of Hollins University (VA) and of Children’s Hospital of Philadelphia (PA) | 1,386 $10,001-$50,000 | ||||
13
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Directors (continued)
| Class II Non-Interested Directors (Terms will Expire in 2014) | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Held by Director During at Least the Past Five Years |
Shares and Dollar Range of Common Stock Beneficially Owned1 | ||||
| Samuel B. Witt, III, Esq. HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 77 |
Director (1987) and Chairman of the Board of Directors (2006); and Member of the Governance/ Nominating Committee (2002) | Samuel B. Witt, III, Attorney-at-Law, since August 1993 | Trustee of The Williamsburg Investment Trust (11 funds) | 5,968 $50,001-$100,000 | ||||
| Claus Helbig HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 71 |
Director (2008); and Member of the Governance/ Nominating Committee (2008), the Audit Committee (2009) and the Pricing Committee (2009) | Attorney-at-Law; Member of the Supervisory Board of: Audi AG (Ingolstadt) from 1998 to 2008, Bankhaus August Lenz & Co. AG (Munich) (Chairman) since 2002, GLL Real Estate Partners GmbH (Munich) (Chairman) since 2001, and HCM Capital Management AG (Munich) (Vice-Chairman) from 2004 to 2010; Member of the European Advisory Board of Booz Allen Hamilton from 2003 to 2011; and Member of the Global Advisory Board of Millennium Associates, Zug/CH from 2007 to 2010; Director of Leo Capital Growth SPC (Ireland) since 2007; Director of Societé Horlogère Reconvilier AG, Zug/Suisse since 2011 | None | 1,000 $10,001-$50,000 | ||||
| Richard Brealey HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 76 |
Director (1987 to 1996 and since 2009); Member (2009) and Chair (2012) of the Pricing Committee; and Member of the Governance/ Nominating Committee (2009) and the Audit Committee (2012) | Emeritus Professor London Business School (LBS); Full-time faculty member LBS from 1968 to 1998; Special Advisor to the Governor of the Bank of England 1998-2001 | Director of the HSBC Investor Funds from 2004 to 2008 | 13,788 $100,001-$200,000 | ||||
14
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Directors (continued)
| Class III Non-Interested Directors (Terms will Expire in 2015) | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Held by Director During at Least the Past Five Years |
Shares and Dollar Common Stock Beneficially Owned1 | ||||
| Brian A. Berris HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 68 |
Director (2012); and Member of the Governance/ Nominating Committee (2012) | Partner, Brown Brothers Harriman & Co. since 1991; Member of the Audit Committee of Brown Brothers Harriman & Co.; Director and Chairman of the Audit Committee of Brown Brothers Harriman Trust Company (Cayman) Limited; Member of the Pension Investment Committee of Brown Brothers Harriman & Co. | None | 5,000 $50,001-$100,000 | ||||
| David R. Bock HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 69 |
Director (2010); and Member of the Governance/ Nominating Committee (2010), the Pricing Committee (2010) and the Audit Committee (2012) | Managing Partner, Federal City Capital Advisors since 1997; Interim CEO, Oxford Analytical, January to June 2010; Executive Vice President and Chief Financial Officer of I-trax, Inc. (health care services) from 2004 to 2008; Managing Director of Lehman Brothers from 1992 to 1995; Executive at The World Bank from 1974 to 1992 | Director of the Pioneer Funds (53 portfolios) since 2005; Director and Member of the International Advisory Board of Oxford Analytica (political and economic consulting) since 2008; Director of Enterprise Community Investment (private investment company) from 1985 to 2010; Director of New York Mortgage Trust from 2004 to 2008 and since 2012; Director of I-trax, Inc. from 2000 to 2004 | 4,250 $50,001-$100,000 | ||||
15
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Directors (concluded)
| Class I Interested Director (Term will Expire in 2013) | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Held by Director During at Least the Past Five Years |
Shares and Dollar Common Stock Beneficially Owned1 | ||||
| Alexandre de Takacsy2 HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 83 |
Director (1987 to 1994 and since 1998); and President (2009) |
Vice Chairman of the Board, Director, Secretary and Member of the Investment Committee of HCC; Senior Advisor to the Hottinger Group and President of Hottinger U.S., Inc. (“HUS”) until December 2004; Retired Senior Executive, Royal Bank of Canada | None | 1,057 $10,001-$50,000 | ||||
| Class III Interested Director (Term will Expire in 2015) | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Held by Director During at Least the Past Five Years |
Shares and Dollar Common Stock Beneficially Owned1 | ||||
| Paul Hottinguer2 HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 70 |
Director (1989) | Vice Chairman of the Board and Director of HCC; AXA International Obligations (finance) since 1996; Managing Director: Intercom (holding company) since 1984; Administrator: Investissement Provence SA (holding company) since 1996; Permanent Representative: Credit Suisse Hottinguer to Provence International (publicly held French mutual fund), Credit Suisse Hottinguer to CS Oblig Euro Souverain (mutual fund); Censor -- Provence Europe (mutual fund); Credit Suisse Hottinguer to PPC; Credit Suisse Hottinguer to Croissance Britannia (investment fund); Credit Suisse Hottinguer to Harwanne Allemagne; General Partner: Hottinger et Cie (Zurich) until December 2007; President: Gaspee (real estate) from 1992 to 2006; Financière Hottinguer (holding company) from 1990 to 2002; Financière Provence Participations (venture capital firm) from 1990 to 2002; Finaxa (finance) from 1982 to 2004; Financière Hottinguer to CS Institutions Monetaire (mutual fund) from 1990 to 2002; Financière Hottinguer to CS Court Terme (mutual fund) from 1990 to 2002 | Director of HUS until December 2004 | 11,433 $100,001-$200,000 | ||||
16
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Executive Officers
The following table sets forth certain information about each person currently serving as an Executive Officer of the Fund, including his beneficial ownership of Common Stock of the Fund. All information presented in the table is as of December 31, 2012.
| Executive Officers3 | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Held by Officer During at Least the Past Five Years |
Shares and Dollar Beneficially Owned1 | ||||
| Rudolf Millisits HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 54 |
Chief Executive Officer (2009); Senior Vice President (2000); and Treasurer and Chief Financial Officer (2002 to 2012) | Chief Executive Officer and President (since June 2011), Chief Compliance Officer (since October 2004), Chief Operating Officer (since December 1998), Assistant Secretary (since August 1995) and Portfolio Manager and Member of Investment Committee (since September 1994) of HCC; Chairman, Chief Executive Officer and Director (since December 2004) of HUS; Manager (since 2012), President, Chief Financial Officer and Chief Compliance Officer of Hottinger Brothers LLC (since 2004); Director of Hottinger Investment Managers S.A. (from April 2008 to July 2011); Director of Hottinger Asset Management AG (Zurich) since February 2008 | N/A | 12,227 $100,001-$200,000 | ||||
| Philippe R. Comby, CFA, FRM HCC 1270 Avenue of the Americas Suite 400 New York, New York 10020 Age: 46 |
Chief Financial Officer (2012) and Vice President (2000) | Senior Vice President (since 2002), Treasurer (since 1997) and Member of Investment Committee (since 1996) of HCC; Manager (since 2012), Chief Investment Officer and Senior Vice President of Hottinger Brothers LLC (since 2004); Director, President and Secretary (since December 2004) and Vice President (until December 2004) of HUS; Director of Spineart SA (since 2011); Director of Hottinger Investment Managers S.A. (from April 2008 to July 2011) | N/A | 4,633 $50,001-$100,000 | ||||
| James Downey Citi Fund Services 100 Summer Street 15th Floor Boston, Massachusetts 02110 Age: 42 |
Secretary (2011) | Assistant Vice President and Product Manager, Citi Fund Services Ohio, Inc. (since January 2007) | N/A | None | ||||
17
THE SWISS HELVETIA FUND, INC.
Certain Information Concerning Executive Officers (concluded)
| Executive Officers3 | ||||||||
| Name, Address & Age |
Position(s) with Fund (Since) |
Principal Occupation(s) During at Least the Past Five Years |
Other Directorships Held by Officer During at Least the Past Five Years |
Shares
and Dollar Beneficially Owned1 | ||||
| Patrick J. Keniston Foreside Compliance Services, LLC Three Canal Plaza, Suite 100 Portland, Maine 04101 Age: 48 |
Chief Compliance Officer (2008) | Director, Foreside Compliance Services since October 2008; Vice President, Citi Fund Services Ohio, Inc. from 2005 to 2008 | N/A | None | ||||
| 1 | All Directors and executive officers as a group (14 persons) owned 68,828 shares which constitutes less than 1.00% of the outstanding Common Stock of the Fund. Share numbers in this Annual Report have been rounded to the nearest whole share. |
| 2 | Indicates “Interested Person,” as defined in the 1940 Act. Alexandre de Takacsy and Paul Hottinguer are Interested Persons because of their current positions with HCC. |
| 3 | Each executive officer serves on a year-to-year basis for an indefinite term, until his successor is elected and qualified. |
18
THE SWISS HELVETIA FUND, INC.
Review of Operations
Trading activity for the year ended December 31, 2012 involved changes in the following positions:
19
THE SWISS HELVETIA FUND, INC.
| Schedule of Investments | December 31, 2012 | |
See Notes to Financial Statements.
20
THE SWISS HELVETIA FUND, INC.
| Schedule of Investments (continued) | December 31, 2012 | |
See Notes to Financial Statements.
21
THE SWISS HELVETIA FUND, INC.
| Schedule of Investments (continued) | December 31, 2012 | |
See Notes to Financial Statements.
22
THE SWISS HELVETIA FUND, INC.
| Schedule of Investments (continued) | December 31, 2012 | |
See Notes to Financial Statements.
23
THE SWISS HELVETIA FUND, INC.
| Schedule of Investments (continued) | December 31, 2012 | |
See Notes to Financial Statements.
24
THE SWISS HELVETIA FUND, INC.
| Schedule of Investments (continued) | December 31, 2012 | |
| 1 | One of the ten largest portfolio holdings. |
| 2 | Non-income producing security. |
| 3 | Illiquid. There is no public market for these securities. Securities priced at Fair Value as determined by the Board’s Pricing Committee. These Restricted Securities are not registered under the Securities Act of 1933, as amended. At the end of the period, the aggregate value of these securities amounted to $27,703,072 or 6.89% of the Fund’s net assets. Additional information on these securities is as follows: |
| Security |
Acquisition Date |
Acquisition Cost |
||||
| Aravis Biotech II, LP |
July 31, 2007 – December 12, 2012 | $ | 2,412,020 | |||
| EyeSense AG – Preferred Shares C |
July 22, 2010 – October 3, 2011 | 3,007,048 | ||||
| Ixodes AG – Preferred Shares B |
April 7, 2011 – June 1, 2012 | 2,252,142 | ||||
| Kuros Biosurgery AG – Common Shares |
August 10, 2009 – August 28, 2009 | 2,516,639 | ||||
| NovImmune SA – Common Shares |
October 7, 2009 – December 11, 2009 | 1,551,109 | ||||
| NovImmune SA – Preferred Shares B |
October 7, 2009 – December 11, 2009 | 2,062,307 | ||||
| SelFrag AG – Class A, Preferred Shares C |
December 15, 2011 | 1,496,205 | ||||
| SelFrag AG – Class A, Preferred Shares D |
September 21, 2012 | 82,670 | ||||
| Spineart SA – Common Shares |
December 22, 2010 | 2,623,329 | ||||
| Zurmont Madison Private Equity, LP |
September 13, 2007 – June 28, 2012 | 12,481,353 | ||||
| $ | 30,484,822 | |||||
See Notes to Financial Statements.
25
THE SWISS HELVETIA FUND, INC.
| Schedule of Investments (concluded) | December 31, 2012 | |
| 4 | Affiliated Company. An affiliated company is a company in which the Fund has ownership of at least 5% of the company’s outstanding voting securities. Details related to affiliated company holdings are as follows: |
| Name of Issuer |
Value as of |
Gross |
Gross |
Income |
Value as of |
|||||||||||||||
| Aravis Biotech II, LP |
$ | 2,294,116 | $ | 52,473 | $ | — | $ | — | $ | 2,001,689 | ||||||||||
| EyeSense AG, Series C |
2,305,807 | — | — | — | 1,973,579 | |||||||||||||||
| Zurmont Madison Private Equity, LP |
9,253,396 | 2,002,968 | — | — | 12,319,963 | |||||||||||||||
| * | Cost for Federal income tax purposes is $283,762,841 and net unrealized appreciation (depreciation) consists of: |
| Gross Unrealized Appreciation |
$ | 130,780,513 | ||
| Gross Unrealized Depreciation |
(14,162,127 | ) | ||
| Net Unrealized Appreciation (Depreciation) |
$ | 116,618,386 | ||
| PLC | Public Limited Liability Company |
| PORTFOLIO HOLDINGS |
||||
| % of Net Assets |
||||
| Common Stocks |
||||
| Pharmaceuticals |
23.01 | % | ||
| Food & Beverages |
16.93 | % | ||
| Industrial Goods & Services |
11.84 | % | ||
| Banks |
9.09 | % | ||
| Insurance |
8.49 | % | ||
| Construction & Materials |
6.79 | % | ||
| Chemicals |
6.23 | % | ||
| Personal & Household Goods |
3.81 | % | ||
| Biotechnology |
3.05 | % | ||
| Energy |
1.43 | % | ||
| Retailers |
1.29 | % | ||
| Medical Technology |
0.86 | % | ||
| Metals & Mining |
0.81 | % | ||
| Financial Services |
0.43 | % | ||
| Preferred Stocks |
||||
| Biotechnology |
1.16 | % | ||
| Medical Technology |
0.49 | % | ||
| Industrial Goods & Services |
0.26 | % | ||
| Private Equity Limited Partnerships |
3.56 | % | ||
| Other Assets and Liabilities |
0.47 | % | ||
| 100.00 | % | |||
See Notes to Financial Statements.
26
THE SWISS HELVETIA FUND, INC.
| Statement of Assets and Liabilities | December 31, 2012 | |
| Assets: |
| |||||||
| Unaffiliated investments, at value (cost $266,047,464) |
|
$ | 384,085,996 | |||||
| Affiliated investments, at value (cost $17,900,421) |
|
16,295,231 | ||||||
| Total investments at value (cost $283,947,885) |
|
400,381,227 | ||||||
| Cash |
|
387,069 | ||||||
| Foreign currency (cost $735,987)* |
|
736,599 | ||||||
| Tax reclaims receivable |
|
1,364,805 | ||||||
| Prepaid expenses |
|
26,291 | ||||||
| Total assets |
|
402,895,991 | ||||||
| Liabilities: |
| |||||||
| Advisory fees payable (Note 2) |
|
260,643 | ||||||
| Directors’ fees payable |
|
102,208 | ||||||
| Other fees payable |
|
253,578 | ||||||
| Total liabilities |
|
616,429 | ||||||
| Net assets |
|
$ | 402,279,562 | |||||
| Composition of Net Assets: |
| |||||||
| Paid-in capital |
|
$ | 283,409,539 | |||||
| Distributable earnings |
||||||||
| Accumulated net investment income |
1,994,533 | |||||||
| Accumulated net realized gain from investment and foreign currency transactions |
454,540 | |||||||
| Net unrealized appreciation on investments and foreign currency |
116,420,950 | |||||||
| Total earnings |
|
118,870,023 | ||||||
| Net assets |
|
$ | 402,279,562 | |||||
| Net Asset Value Per Share: |
||||||||
| ($402,279,562 / 30,969,245 shares outstanding, $0.001 par value; |
|
$ | 12.99 | |||||
| * | Consists of 646,119 Swiss francs, 5,326 euros and 14,584 British pounds. |
See Notes to Financial Statements.
27
THE SWISS HELVETIA FUND, INC.
| Statement of Operations | For the Year Ended December 31, 2012 | |
| Investment Income: |
||||
| Dividends (less foreign tax withheld of $1,234,179) |
$ | 10,141,732 | ||
| Interest |
275,156 | |||
| Total income |
10,416,888 | |||
| Expenses: |
||||
| Investment advisory fees (Note 2) |
2,957,379 | |||
| Directors’ fees & expenses |
895,729 | |||
| Professional fees |
660,817 | |||
| Administration fees |
273,277 | |||
| Custody fees |
93,003 | |||
| Printing and shareholder reports |
93,812 | |||
| Accounting fees |
105,566 | |||
| Transfer agent fees |
30,910 | |||
| Compliance service fees |
72,000 | |||
| Insurance |
76,385 | |||
| Miscellaneous |
183,848 | |||
| Total expenses |
5,442,726 | |||
| Net investment income |
4,974,162 | |||
| Realized and Unrealized Gain (Loss) on Investments and Foreign Currency: |
||||
| Net realized gain (loss) from: |
||||
| Investment transactions |
1,522,811 | |||
| Foreign currency transactions |
(358,095 | ) | ||
| Net change in unrealized appreciation/depreciation from: |
||||
| Investments |
41,863,570 | |||
| Foreign currency translations |
205,436 | |||
| Net Realized and Unrealized Gain on Investments and Foreign Currency |
43,233,722 | |||
| Net Increase in Net Assets from Operations |
$ | 48,207,884 | ||
See Notes to Financial Statements.
28
THE SWISS HELVETIA FUND, INC.
| Statements of Changes in Net Assets | ||
| For the Year Ended December 31, 2012 |
For the Year Ended December 31, 2011 |
| Increase (Decrease) in Net Assets: |
||||||||
| Operations: |
||||||||
| Net investment income |
$ | 4,974,162 | $ | 5,209,728 | ||||
| Net realized gain (loss) from: |
||||||||
| Investment transactions |
1,522,811 | 33,871,957 | ||||||
| Foreign currency transactions |
(358,095 | ) | 505,389 | |||||
| Net change in unrealized appreciation/depreciation from: |
||||||||
| Investments |
41,863,570 | (92,640,138 | ) | |||||
| Foreign currency translations |
205,436 | (686,711 | ) | |||||
| Net increase (decrease) in net assets from operations |
48,207,884 | (53,739,775 | ) | |||||
| Distributions to Stockholders from: |
||||||||
| Net investment income and net realized gain from foreign currency transactions |
(1,951,063 | ) | (5,326,571 | ) | ||||
| Net realized capital gain |
(185,815 | ) | (53,140,650 | ) | ||||
| Total distributions to stockholders |
(2,136,878 | ) | (58,467,221 | ) | ||||
| Capital Share Transactions: |
||||||||
| Value of shares issued in reinvestment of dividends and distributions |
12,344,320 | 17,832,469 | ||||||
| Value of shares repurchased through stock buyback |
— | (4,878,986 | ) | |||||
| Value of shares repurchased through tender offer |
— | (24,191,371 | ) | |||||
| Total increase (decrease) from capital share transactions |
12,344,320 | (11,237,888 | ) | |||||
| Total increase (decrease) in net assets |
58,415,326 | (123,444,884 | ) | |||||
| Net Assets: |
||||||||
| Beginning of year |
343,864,236 | 467,309,120 | ||||||
| End of year (including accumulated net investment income (loss) of $1,994,533 and $(657,420) respectively) |
$ | 402,279,562 | $ | 343,864,236 | ||||
See Notes to Financial Statements.
29
THE SWISS HELVETIA FUND, INC.
Financial Highlights
| For the Years Ended December 31, |
||||||||||||||||||||
| 2012 |
2011 |
2010 |
2009 |
2008 |
||||||||||||||||
| Per Share Operating Performance: |
||||||||||||||||||||
| Net asset value at the beginning of year |
$ | 11.54 | $ | 15.42 | $ | 13.39 | $ | 14.45 | $ | 19.34 | ||||||||||
| Income from Investment Operations: |
||||||||||||||||||||
| Net investment income1 |
0.16 | 0.17 | 0.09 | 0.06 | 0.08 | |||||||||||||||
| Net realized and unrealized gain (loss) on investments2 |
1.42 | (2.04 | ) | 2.31 | (0.53 | ) | (4.65 | ) | ||||||||||||
| Total from investment operations |
1.58 | (1.87 | ) | 2.40 | (0.47 | ) | (4.57 | ) | ||||||||||||
| Gain from capital share repurchases |
— | 0.02 | 0.12 | — | * | 0.08 | ||||||||||||||
| Gain from tender offer |
— | 0.02 | — | — | — | |||||||||||||||
| Capital charge resulting from the issuance of fund shares |
(0.06 | ) | (0.07 | ) | — | — | (0.08 | ) | ||||||||||||
| Less Distributions: |
||||||||||||||||||||
| Dividends from net investment income and net realized gains from foreign currency transactions |
(0.06 | ) | (0.18 | ) | (0.23 | ) | (0.22 | ) | (0.08 | ) | ||||||||||
| Distributions from net realized capital gains |
(0.01 | ) | (1.80 | ) | (0.26 | ) | (0.37 | ) | (0.24 | ) | ||||||||||
| Total distributions |
(0.07 | ) | (1.98 | ) | (0.49 | ) | (0.59 | ) | (0.32 | ) | ||||||||||
| Net asset value at end of year |
$ | 12.99 | $ | 11.54 | $ | 15.42 | $ | 13.39 | $ | 14.45 | ||||||||||
| Market value per share at the end of year |
$ | 11.29 | $ | 9.95 | $ | 13.54 | $ | 11.62 | $ | 12.43 | ||||||||||
| Total Investment Return:3 |
||||||||||||||||||||
| Based on market value per share |
14.17 | % | (13.03 | )% | 20.79 | % | (1.20 | )% | (22.98 | )% | ||||||||||
| Based on net asset value per share |
13.26 | % | (11.43 | )% | 19.38 | % | (2.07 | )% | (23.62 | )% | ||||||||||
| Ratios to Average Net Assets: |
||||||||||||||||||||
| Net expenses |
1.44 | % | 1.32 | % | 1.34 | % | 1.23 | % | 1.10 | % | ||||||||||
| Gross expenses |
1.44 | % | 1.33 | %4 | 1.38 | %4 | 1.23 | % | 1.12 | %4 | ||||||||||
| Net investment income |
1.32 | % | 1.19 | % | 0.66 | % | 0.47 | % | 0.49 | % | ||||||||||
| Supplemental Data: |
||||||||||||||||||||
| Net Assets at end of year (000’s) |
$ | 402,280 | $ | 343,864 | $ | 467,309 | $ | 433,926 | $ | 469,062 | ||||||||||
| Average net assets during the year (000’s) |
$ | 376,713 | $ | 439,369 | $ | 424,627 | $ | 404,535 | $ | 554,386 | ||||||||||
| Stockholders of record5 |
540 | 579 | 621 | 662 | 695 | |||||||||||||||
| Portfolio turnover rate |
61 | % | 55 | % | 61 | % | 123 | % | 66 | % | ||||||||||
| * | Amount is less than $0.01 per share. |
| 1 | Calculated using the average shares method. |
| 2 | Includes net realized and unrealized currency gain and losses. |
| 3 | Total investment return based on market value differs from total investment return based on net asset value due to changes in relationship between the Fund’s market price and its net asset value (“NAV”) per share. |
| 4 | Reflects the expense ratio excluding any waivers and/or expense reimbursements. |
| 5 | Unaudited. |
| See | Notes to Financial Statements. |
30
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements
Note 1—Organization and Significant Accounting Policies
A. Organization
The Swiss Helvetia Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a non-diversified, closed-end management investment company. The Fund is organized as a corporation under the laws of the State of Delaware.
The investment objective of the Fund is to seek long-term growth of capital through investment in equity and equity-linked securities of Swiss companies. The Fund may also acquire and hold equity and equity-linked securities of non-Swiss companies in limited instances.
B. Securities Valuation
The Fund values its investments at fair value in accordance with accounting principles generally accepted in the United States (“GAAP”).
When valuing listed equity securities, the Fund uses the last sale price on the securities exchange or national securities market on which such securities primarily are traded (the “Primary Market”) prior to the calculation of the Fund’s net asset value (“NAV”). When valuing equity securities that are not listed (except privately-held companies and private equity limited partnerships) or that are listed but have not traded on a day on which the Fund calculates its NAV, the Fund uses the mean between the bid and asked prices for that day. If there are no asked quotations for such a security, the value of such security will be the most recent bid quotation on the Primary Market on that day. On any day when a security’s Primary Market is closed because of a local holiday or other scheduled closure, but the New York Stock Exchange is open, the Fund may use the prior day’s closing prices in valuing such security regardless of the length of the scheduled closing.
When valuing fixed-income securities, the Fund uses the last bid price prior to the calculation of the Fund’s NAV. If there is no current bid price for a fixed-income security, the value of such security will be the mean between the last quoted bid and asked prices on that day. Overnight and certain other short-term fixed-income securities with maturities of less than sixty days will be valued by the amortized cost method, unless it is determined that the amortized cost method would not represent the fair value of such security.
It is the responsibility of the Fund’s Board of Directors (the “Board”) to establish procedures to provide for the valuation of the Fund’s portfolio holdings. When valuing securities for which market quotations are not readily available, or for which the market quotations that are available are considered unreliable, the Fund determines a fair value in good faith in accordance with these procedures (a “Fair Value”). The Fund may use these procedures to establish the Fair Value of securities when, for example, a significant event occurs between the time the market closes and the time the Fund values its investments. After consideration of various factors, the Fund may value the securities at their last reported price or at some other value.
Swiss exchange-listed options, included Eurex-listed options, are valued at their most recent sale price (latest bid for long options and the latest ask for short options) on the Primary Market, or if there are no such sales, at the average of the most recent bid and asked quotations on such Primary Market, or if such quotations are not available, at the last bid quotation (in the case of purchased options) or the last asked quotation (in the case of written options). If, however, there are no such quotations, such options will be valued using the implied volatilities observed for similar options or from aggregated data as an input to a model. Options traded in the over-the-counter market are valued at the price communicated by the counterparty to the option, which typically is the price at which the counterparty would close out the transaction. Option contracts that are neither exchange-listed nor traded in the over-the-counter market are valued using implied volatilities as input into widely accepted models (e.g., Black-Scholes). The implied volatilities are obtained through several means and are cross checked. For valuations where divergent information is received, the Fund uses the most conservative volatility (the lowest volatility in the case of long positions and the highest volatility in the case of short positions).
31
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
The Fund is permitted to invest in investments that do not have readily available market quotations. For such investments, the Act requires the Board to determine their Fair Value. The aggregate value of these investments amounted to $27,703,072, or 6.89% of the Fund’s net assets at December 31, 2012, and are listed in Note 3 to the Schedule of Investments.
Various inputs are used to determine the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical assets and liabilities
Level 2—other significant observable inputs (including quoted prices of similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Fund’s investments as of December 31, 2012:
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Total |
|||||||||||||
| Investments in Securities |
||||||||||||||||
| Common Stock* |
$ | 372,678,155 | $ | — | $ | 5,708,671 | $ | 378,386,826 | ||||||||
| Preferred Stock* |
— | — | 7,672,749 | 7,672,749 | ||||||||||||
| Private Equity Limited Partnerships |
— | — | 14,321,652 | 14,321,652 | ||||||||||||
| Total Investments in Securities |
$ | 372,678,155 | $ | — | $ | 27,703,072 | $ | 400,381,227 | ||||||||
| * | Please see the Schedule of Investments for industry classifications. |
Level 3 securities, which are listed in Note 3 to the Schedule of Investments, consist of the Fund’s investments in privately-held companies and private equity limited partnerships that invest in privately-held companies.
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. At December 31, 2012, privately-held companies, except Eyesense AG, Kuros Biosurgery AG and SelFrag AG, were valued based on a market approach using the most recent observable round of financing, which may also have been acquisition cost. 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.
The Fund values its Level 3 investments in the two private equity limited partnerships 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 partnerships and their portfolio holdings provided by the partnerships’ general partners or managers, other available information about the partnerships’ portfolio holdings, values obtained on
32
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
redemption from other limited partners, discussions with the partnerships’ general partners or managers and/or other limited partners and comparisons of previously-obtained estimates to the partnerships’ 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.
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 or private equity limited partnership. 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.
| Quantitative Information about Level 3 Fair Value Measurements | ||||||||||
| Fair Value at 12/31/2012 |
Valuation Technique | Unobservable inputs | Range1 | |||||||
| Privately-held companies |
||||||||||
| Medical Technology2 |
$2,707,725 | Discounted cash flow |
Weighted average cost of capital |
12%-18% | ||||||
| Expected compound annual growth rate of revenue (10 years) |
39%-46% | |||||||||
| Privately-held companies |
||||||||||
| Medical Technology |
$2,730,944 | Market approach |
Recent round of financing |
N/A | ||||||
| Privately-held companies |
||||||||||
| Biotechnology |
$4,585,676 | Market approach |
Recent round of financing |
N/A | ||||||
| Privately-held companies |
||||||||||
| Biotechnology |
$2,294,204 | Discounted cash flow |
Weighted average cost of capital |
16.50% | ||||||
| Success rate on research and development |
50% | |||||||||
| Privately-held companies |
||||||||||
| Industrial goods & services |
$1,062,871 | Discounted cash flow |
Weighted average cost of capital |
12%-25% | ||||||
| Success rate on research and development |
20%-70%* | |||||||||
| Expected compound annual growth rate of revenue (10 years) |
38% | |||||||||
| Privately-held companies |
||||||||||
| Biotechnology venture |
$2,001,689 | NAV as practical expedient |
N/A |
N/A | ||||||
| Privately-held companies |
||||||||||
| Industrial buy-out |
$12,319,963 | NAV as practical expedient |
N/A |
N/A | ||||||
| 1 | Significant changes in any of these ranges would result in a significantly higher or lower fair value measurement. Generally, a change in the success rate on research and development or the expected long-term 10-year revenue growth rate is accompanied by a directionally similar change in fair value. Conversely, a change in the weighted average cost of capital is accompanied by a directionally opposite change in fair value. |
| 2 | Eyesense AG—Preferred Shares, Kuros Biosurgery AG—Common Shares were valued based on this technique. |
| * | The inputs range corresponds to different stages of the company’s development. The weighted average succes rate is 41%. |
33
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
The Fund’s policy is to disclose transfers between Levels based on their market prices at the reporting period end. For the year ended December 31, 2012, shares of Biotie Therapies OYJ (“Biotie”), which are publicly traded on the NASDAQ OMX Helsinki Stock Exchange, were transferred from Level 2, valued at $2,392,289 on December 31, 2011, to Level 1, valued at $2,069,893 on December 31, 2012. The Fund applied a liquidity discount to market quotations for shares of Biotie during a contractual lock-up period that expired on February 2, 2012. Beginning February 2, 2012, Biotie was valued solely based on market quotations.
The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
| Common Stock |
Preferred Stock |
Private Equity Limited Partnership |
Total |
|||||||||||||
| Balance as of December 31, 2011 |
$ | 7,779,951 | $ | 7,699,706 | $ | 11,547,512 | $ | 27,027,169 | ||||||||
| Change in Unrealized Appreciation/Depreciation |
(2,071,280 | ) | (727,070 | ) | 718,699 | (2,079,651 | ) | |||||||||
| Net Realized Gain (Loss) |
— | — | — | — | ||||||||||||
| Gross Purchases |
— | 700,113 | 2,055,441 | 2,755,554 | ||||||||||||
| Balance as of December 31, 2012 |
$ | 5,708,671 | $ | 7,672,749 | $ | 14,321,652 | $ | 27,703,072 | ||||||||
C. 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.
D. 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”). Distributions may be paid either in cash or in stock with an option to take cash. The Fund records dividends and distributions on the ex-dividend date.
E. 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 U.S. 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.
34
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
F. Foreign Currency Translation
The Fund maintains its accounting records in U.S. dollars. The Fund’s assets are invested primarily 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 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 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 on 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 equity 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 transactions resulting in realized and unrealized gain or loss are disclosed separately.
G. 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.
H. 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 U.S. dollar relative to the Swiss franc, 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
Hottinger Capital Corp. (“HCC”), which is wholly-owned by Banque Hottinger & Cie SA, is the Fund’s investment advisor (the “Advisor”). The Fund pays the Advisor an annual advisory fee based on its month-end net assets which is accrued daily and calculated and paid monthly at the following annual rates: 1.00% of the first $60 million, 0.90% of the next $40 million, 0.80% of the next $100 million, 0.70% of the next $100 million, 0.65% of the next $100 million, 0.60% of the next $100 million, 0.55% of the next $100 million, 0.50% of next $200 million and 0.45% of such assets in excess of $800 million. The Fund paid Banque Hottinger & Cie SA, an affiliated broker-dealer of the Advisor, $84,103 in brokerage commissions for the year ended December 31, 2012.
35
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
The Fund and the Advisor have agreed to share equally certain common expenses subject to review by the Audit Committee of the Board. During the year ended December 31, 2012, $7,000 of expenses incurred in connection with publicizing the Fund were shared equally by the Fund and the Advisor.
Certain officers and Directors of the Fund are also officers or directors of HCC and Banque Hottinger & Cie SA. These persons are not paid by the Fund for serving in these capacities.
The Fund pays each Director who is not an “interested person” (as such term is defined in the Act) of the Fund or the Advisor $39,468 annually in compensation, except for the Chairman of the Board to whom the Fund pays an annual fee of $52,661 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 $45,152. In addition, the Fund pays each disinterested Director $1,300 for each Board meeting attended and pays each disinterested Director who is a member of a Committee a fee of $750 for each Committee meeting attended. Committee meeting fees are paid for only those meetings held separately from other meetings. The Board or a Committee may establish ad hoc committees or sub-committees. 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 addition, the Fund reimburses Directors who are not employees of or affiliated with the Advisor for out-of-pocket expenses incurred in conjunction with attendance at meetings.
Note 3—Other Service Providers
Citi Fund Services Ohio, Inc. (“Citi” or the “Administrator”) provides certain administration and portfolio accounting services to the Fund, American Stock Transfer & Trust Company is the Fund’s transfer agent, and Citibank, N.A. serves as the Fund’s custodian. The Fund pays these service providers an annual fee, which is accrued daily and paid monthly.
Note 4—Capital Share Transactions
The Fund is authorized to issue up to 50 million shares of capital stock. HCC owned 241,222 of the 30,969,245 shares outstanding on December 31, 2012. Transactions in capital shares were as follows:
| For the Year Ended December 31, 2012 |
For the Year Ended December 31, 2011 |
|||||||||||||||
| Shares |
Amount |
Shares |
Amount |
|||||||||||||
| Dividends Reinvested |
1,166,760 | $ | 12,344,320 | 1,388,242 | $ | 17,832,469 | ||||||||||
| Repurchased from Buyback |
— | — | (364,253 | ) | (4,878,986 | ) | ||||||||||
| Repurchased from Tenders |
— | — | (1,530,131 | ) | (24,191,371 | ) | ||||||||||
| Net Increase (Decrease) |
1,166,760 | $ | 12,344,320 | (506,142 | ) | $ | (11,237,888 | ) | ||||||||
Note 5—Federal Income Tax and Investment Transactions
As of December 31, 2012, accumulated net investment income and accumulated net realized gain from investments and foreign currency transactions have been adjusted for current period permanent book/tax differences which arose principally from differing book/tax treatment of foreign currency transactions and reclassifications due to the sale of passive foreign investment companies (“PFICs”).
The following reclassification was the result of the disposition of PFICs and currency reclassifications and has no impact on the net assets of the Fund.
| Accumulated Net Investment Income |
$ | (371,146 | ) | |
| Accumulated Net Realized Gain |
358,095 | |||
| Paid-in Capital |
13,051 |
36
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (continued)
The tax character of distributions paid during 2012 and 2011 was as follows:
| 2012 |
2011 |
|||||||
| Ordinary Income |
$ | 1,951,063 | $ | 5,326,571 | ||||
| Long-Term Capital Gains |
185,815 | 53,140,650 | ||||||
| Total |
$ | 2,136,878 | $ | 58,467,221 | ||||
Under current tax law, capital losses realized after October 31 of the Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year. At December 31, 2012, the Fund had no deferred post-October 2012 capital and currency losses.
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. At December 31, 2012, the Fund had no capital loss carryovers.
At December 31, 2012, the components of distributable earnings on a tax basis were as follows:
| Undistributed Ordinary Income |
$ | 1,130,509 | ||
| Undistributed Long-Term Capital Gains |
1,133,520 | |||
| Unrealized Appreciation |
116,605,994 | |||
| Total |
$ | 118,870,023 | ||
Gains and losses from foreign currency transactions are treated as ordinary income and loss, respectively, for federal income tax purposes.
The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the year ended December 31, 2012 were $225,076,459 and $235,059,582, respectively.
The following summarizes all distributions declared by the Fund during the year ended December 31, 2012:
| Distribution |
Record Date |
Payable Date |
Amount |
|||||||||
| Ordinary Income |
7/25/12 | 8/29/12 | $ | 0.01000 | ||||||||
| Long-Term Capital Gains |
7/25/12 | 8/29/12 | $ | 0.00600 | ||||||||
| Ordinary Income |
12/21/12 | 12/28/12 | $ | 0.05300 | ||||||||
| Total Distributions |
$ | 0.06900 | ||||||||||
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 (“NYSE”) in 1999. The Board authorized a stock repurchase program permitting such purchases by the Fund in each subsequent year. The principal purpose of the stock repurchase program is to enhance stockholder value by increasing the Fund’s NAV per share without adversely affecting the Fund’s expense ratio.
On December 6, 2011, the Fund announced a stock repurchase program effective for 2012. Under the program, the Fund was authorized to make open-market repurchases of its common stock of up to 500,000 shares. The Fund did not repurchase any shares pursuant to its stock repurchase program during the year ended December 31, 2012.
On December 11, 2012, the Fund announced a stock repurchase program effective for 2013. Under the program, the Fund is authorized to make open-market repurchases of its common stock of up to 500,000 shares. The Fund intends to repurchase shares of its common stock in the future, at such times and in such amounts as is deemed advisable.
37
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (concluded)
Note 7—Capital Commitments
As of December 31, 2012, the Fund maintains illiquid investments in two private equity limited partnerships and one corporation. These investments appear in the Fund’s Schedule of Investments. The Fund’s capital commitments for these issuers are shown in the table below:
| Investments |
Original Capital |
Unfunded |
Fair Value as of |
|||||||||
| Private Equity Limited Partnerships—International (a) |
||||||||||||
| Aravis Biotech II, LP |
$ | 3,550,360 | $ | 800,251 | $ | 2,001,689 | ||||||
| Zurmont Madison Private Equity, LP |
15,293,861 | 1,602,231 | 12,319,963 | |||||||||
| Preferred Stock—International |
||||||||||||
| SelFrag AG, Class A, Series D (b) |
84,227 | 84,227 | 1,062,871 | |||||||||
| * | The original capital commitment represents 3,250,000, 14,000,000 and 77,101 Swiss francs for Aravis Biotech II, LP, Zurmont Madison Private Equity LP and SelFrag AG, respectively. The unfunded commitment represents 732,550, 1,466,682 and 77,101 Swiss francs, respectively. The Swiss franc (CHF)/U.S. dollar exchange rate as of December 31, 2012 was used for conversion and equals 0.9154. |
| (a) | This category consists of two private equity limited partnerships that invest primarily in ventures, biotechnology and in management buyout of industrial and consumer goods companies. There is no redemption right for the interests in these two limited partnerships. Instead, the nature of the investments in this category is that distributions are received through the realization of the underlying assets of the limited partnership. If these investments were held, it is estimated that the underlying assets of each limited partnership would be realized over 5 to 6 years. |
| (b) | The unfunded commitment for this security represents a capital commitment in a future round of financing, which has been approved by shareholders but is contingent upon action by the board of directors of SelFrag AG, on or before December 31, 2013. |
Note 8—Subsequent Events
Management has evaluated subsequent events through the date financial statements were issued, and there were no subsequent events requiring adjustment or additional disclosure in the financial statements.
38
THE SWISS HELVETIA FUND, INC.
Report of Independent Registered Public Accounting Firm
39
THE SWISS HELVETIA FUND, INC.
Additional Information (Unaudited)
40
THE SWISS HELVETIA FUND, INC.
Additional Information (Unaudited) (concluded)
Tax Information for the Year Ended December 31, 2012
41
THE SWISS HELVETIA FUND, INC.
Dividend Reinvestment Plan (Unaudited)
42
THE SWISS HELVETIA FUND, INC.
Dividend Reinvestment Plan (Unaudited) (concluded)
43
A Swiss Investments Fund
THE SWISS HELVETIA FUND, INC.
Executive Offices
The Swiss Helvetia Fund, Inc.
1270 Avenue of the Americas
Suite 400
New York, New York 10020
1-888-SWISS-00
(212) 332-2760
www.swz.com
THE SWISS
HELVETIA
FUND, INC.
www.swz.com
Annual Report
For the
Year Ended
December 31, 2012
Item 2. Code of Ethics.
As of the end of the period covered by this report, the Registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its principal executive officer and senior financial officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Directors (the “Board”) has determined that Messrs. David R. Bock, Richard A. Brealey and Claus Helbig, each a member of the Audit Committee of the Board, is an audit committee financial expert as defined by the Securities and Exchange Commission (the “SEC”). Each of Messrs. Bock, Brealey and Helbig is “independent” as defined by the SEC for purposes of audit committee financial expert determinations.
Item 4. Principal Accountant Fees and Services.
(a) The aggregate fees billed for each of the last two fiscal years (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant for the audit of the Registrant’s annual financial statements, or services that are normally provided by the principal accountant in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $58,000 in 2011 and $73,000 in 2012.
(b) There were no audit-related fees billed to the Registrant in the Reporting Periods for assurance and related services rendered by the principal accountant that were reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4.
There were no fees billed in the Reporting Periods for assurance and related services rendered by the principal accountant to the Registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant (collectively the “investment adviser”) which were required to be pre-approved by the Audit Committee as described in paragraph (e)(1) of this Item 4.
(c) The aggregate fees billed in the Reporting Periods for professional services rendered by the principal accountant to the Registrant for tax compliance, tax advice and tax planning (“Tax Services”) were $6,000 in 2011 and $6,200 in 2012. These services consisted of review or preparation of U.S. federal, state, local and excise tax returns.
(d) There were no other fees billed in the Reporting Periods for products and services provided by the principal accountant to the Registrant, other than the services reported in paragraphs (a) through (c) of this Item.
(e) (1) The Registrant’s Audit Committee pre-approves the principal accountant’s engagements for audit and non-audit services to the Registrant, and certain non-audit services to the investment adviser that are required to be pre-approved on a case-by-case basis. Pre-approval considerations include whether the proposed services are compatible with maintaining the principal accountant’s independence.
(e) (2) No services included in (b) - (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) None.
(g) The aggregate non-audit services billed by the principal accountant for services rendered to the Registrant in the reporting periods were $6,000 in 2011 and $6,200 in 2012. There were no fees billed in each of the Reporting Periods for non-audit services rendered by the principal accountant to the investment adviser.
(h) The Registrant’s Audit Committee considers whether the provision of any non-audit services rendered to the investment adviser not pre-approved (not requiring pre-approval) by the Audit Committee is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
The Registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. It is composed of the following Directors, each of who is not an “interested person” as defined in the Investment Company Act of 1940:
David R. Bock
Richard A. Brealey
Claude W. Frey
Claus Helbig
R. Clark Hooper
Item 6. Investments.
(a) Not applicable.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
The Registrant has delegated voting of proxies in respect of portfolio holdings to its investment adviser, Hottinger Capital Corp. (the “Advisor”), to vote the Registrant’s proxies, upon the instruction of an executive officer of the Registrant, in accordance with Advisor’s proxy voting guidelines and procedures (the “Voting Guidelines”) that provide as follows:
| • | The Advisor recommends voting proxies in respect of the Registrant’s securities in the Registrant’s best economic interests and without regard to the interests of the Advisor or any other client of the Advisor. |
| • | Unless the Advisor’s Proxy Voting Committee (the “Committee”) otherwise determines (and documents the basis for its decision) or as otherwise provided below, the Advisor recommends voting proxies in a manner consistent with the Voting Guidelines. |
| • | To avoid material conflicts of interest, the Advisor applies the Voting Guidelines in an objective and consistent manner across client accounts. Where a material conflict of interest has been identified and the matter is covered by the Voting Guidelines, the Committee recommends voting in accordance with the Voting Guidelines. Where a conflict of interest has been identified and the matter is not covered by the Voting Guidelines, the Advisor will disclose the conflict and the Committee’s recommendation of the manner in which to vote to the Registrant’s Audit Committee. |
| • | The Advisor also may recommend not to vote proxies in respect of securities of any issuer if it determines that it would be in the Registrant’s overall best interests not to vote. |
In all instances, the Advisor examines and analyzes the Registrant’s proxies in accordance with the Voting Guidelines. The Advisor then presents its recommendations to an executive officer of the Registrant, who either approves the Advisor’s recommendation or determines if the Registrant will vote its proxy in a different way. The Advisor retains the power to vote the Registrant’s proxies, but will not do so without instruction and approval of an executive officer of the Fund. The Advisor’s Voting Guidelines address how it will recommend voting proxies on particular types of matters such as the election for directors, adoption of option plans and anti-takeover proposals. For example, the Advisor generally will:
| • | support management in most elections for directors, unless the board gives evidence of acting contrary to the best economic interests of shareholders; |
| • | support option plans, if it believes that they provide for their administration by disinterested parties and provide incentive to directors, managers and other employees by aligning their economic interests with those of the shareholders while limiting the transfer of wealth out of the company; and |
| • | oppose anti-takeover proposals unless they are structured in such a way that they give shareholders the ultimate decision on any proposal or offer. |
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
PRINCIPAL PORTFOLIO MANAGERS
As of the date of the filing of this Report on Form N-CSR, Messrs. Philippe R. Comby and Rudolf Millisits are primarily responsible for the management of the Registrant’s portfolio.
Mr. Comby has been a portfolio manager of the Registrant since 1999, when he joined the Advisor. Mr. Comby is a Vice President of the Registrant and a Director and Senior Vice President of the Advisor. He also is a Director and the President of Hottinger U.S., Inc., a private holding company affiliated with the Advisor, and the Chief Investment Officer and Senior Vice President of Hottinger Brothers LLC, a registered investment adviser affiliated with the Advisor. Mr. Comby has been affiliated with the Hottinger Group since 1994, providing portfolio management and client advisory services. He is a member of the New York Society of Security Analysts, a member of the Global Association of Risk Professionals and a Chartered Financial Analyst.
Mr. Millisits has been a portfolio manager of the Registrant since 1994, when he joined the Advisor. Mr. Millisits is the Senior Vice President and Chief Financial Officer of the Registrant and the Chief Operating Officer, Executive Vice President and Chief Compliance Officer of the Advisor. He also is the Chairman and Chief Executive Officer of Hottinger U.S., Inc. and the President and Chief Financial Officer of Hottinger Brothers, LLC. Mr. Millisits has been affiliated with the Hottinger Group since 1993, providing portfolio management and private banking services. Prior to joining the Hottinger Group, Mr. Millisits was a portfolio manager for private clients for Credit Suisse in New York and Geneva.
PORTFOLIO MANAGEMENT
The Registrant’s portfolio managers manage multiple accounts for a diverse client base, including private clients and institutions.
Material Conflicts Related to Management of Similar Accounts. The potential for conflicts of interest exist when the Advisor or its affiliates and the portfolio managers manage other accounts that invest in securities in which the Registrant may invest or that may pursue a strategy similar to the Registrant’s strategy (collectively, “Similar Accounts”). In addition, the Registrant, as a registered investment company, is subject to different regulations than certain of the Similar Accounts, and, consequently, may not be permitted to engage in all the investment techniques or transactions, or to engage in such techniques or transactions to the same degree, as the Similar Accounts.
Potential conflicts of interest may arise because of a portfolio manager’s management of the Registrant and Similar Accounts. For example, conflicts of interest may arise with both the aggregation and allocation of securities transactions and allocation of limited investment opportunities, as the portfolio manager may be perceived as causing accounts he manages to participate in an offering to increase his overall allocation of securities in that offering, or to increase his ability to participate in future offerings by the same underwriter or issuer. Allocations of bunched trades, particularly trade orders that were only partially filled due to limited availability, and allocation of investment opportunities generally, could raise a potential conflict of interest, as the portfolio manager may have an incentive to allocate securities that are expected to increase in value to preferred accounts. Initial public offerings, in particular, are frequently of very limited availability. Additionally, the Registrant’s portfolio managers may be perceived to have a conflict of interest because of the number of Similar Accounts, in addition to the Registrant, that they are managing. In addition, the Advisor could be viewed as having a conflict of interest to the extent that the Advisor or its affiliates and/or the portfolio managers have a materially larger investment in a Similar Account than their investment in the Registrant.
A potential conflict of interest may be perceived to arise if transactions in one account closely follow related transactions in a different account, such as when a purchase increases the value of securities previously purchased by the other account, or when a sale in one account lowers the sale price received in a sale by a second account.
Other Accounts Managed by the Portfolio Managers. The chart below includes information regarding the Registrant’s portfolio managers, as of December 31, 2012. Specifically, it shows the number of other portfolios and assets, including the Registrant, managed by the Registrant’s portfolio managers. Neither portfolio manager manages any accounts with respect to which the advisory fee is based on this performance of the account.
| PORTFOLIO MANAGER |
REGISTERED INVESTMENT COMPANIES ($) |
OTHER POOLED INVESTMENT VEHICLES ($) |
OTHER ACCOUNTS ($) | |||||||||
| Philippe Comby |
1 | (402 million) | 0 | 8 | (62 million) | |||||||
| Rudolf Millisits |
1 | (402 million) | 0 | 8 | (62 million) | |||||||
COMPENSATION FOR THE PORTFOLIO MANAGERS
The portfolio managers are generally responsible for managing multiple types of accounts that may, or may not, invest in securities in which the Registrant may invest or pursue a strategy similar to one of the Registrant’s strategies.
During the fiscal period covered by this Report on Form N-CSR, the Registrant’s portfolio managers were compensated by a competitive salary and bonus structure, which was determined both quantitatively and qualitatively. Salary and bonus are paid in cash. The portfolio managers are compensated on the performance of the aggregate group of portfolios they manage rather than for a specific fund or account. Various factors are considered in the determination of the portfolio managers’ compensation. All of the portfolios managed by the portfolio managers are comprehensively evaluated to determine each portfolio manager’s positive and consistent performance contribution over time. Further factors include the amount of assets in the portfolios as well as qualitative aspects that reinforce the Advisor’s investment philosophy.
Total compensation is generally not fixed, but rather is based on the following factors: (i) leadership and commitment, (ii) maintenance of current knowledge and opinions on companies owned in the portfolio; (iii) generation and development of new investment ideas, including the quality of security analysis and identification of appreciation catalysts; (iv) ability and willingness to develop and share ideas; and (v) the performance results of the portfolios managed by the portfolio managers.
Variable bonus is based on the portfolio managers’ quantitative performance as measured by their ability to make investment decisions that contribute to the pre-tax absolute and relative returns of the accounts managed by the portfolio manager, by comparison to predetermined benchmarks (for the Registrant, the Swiss Market Index and the Swiss Performance Index) over the current fiscal year and the longer-term performance (3-, 5- or 10-year, if applicable), as well as performance relative to peers. The portfolio managers’ bonuses also can be influenced by subjective measurement of the managers’ ability to help others make investment decisions.
OWNERSHIP OF SECURITIES OF THE REGISTRANT
As of December 31, 2012, Mr. Comby and Mr. Millisits owned between $50,001 - $100,000 and between $100,001 - $200,000 of shares of common stock of the Registrant, respectively.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
On December 6, 2011, the Board announced the Fund’s stock repurchase program for 2012, pursuant to which the Fund may purchase up to 500,000 shares of its common stock during 2013 in open market transactions to be effected on the New York Stock Exchange (the “NYSE”). The Fund did not repurchase any shares under this program.
On December 11, 2012, the Board announced a new stock repurchase program for the Fund, pursuant to which the Fund may purchase up to 500,000 shares of its common stock during 2013 in open market transactions to be effected on the NYSE As with the 2011 stock repurchase program, the principal purpose of the 2012 stock repurchase program is to enhance stockholder value by increasing the Fund’s net asset value per share without creating a meaningful adverse effect on the Fund’s expense ratio.
Item 10. Submission of Matters to a Vote of Security Holders.
No material changes to procedures.
Item 11. Controls and Procedures.
(a)The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods specified in the Securities and Exchange Commission’s rules and forms.
(b)There were no changes to the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d) that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) The Code of Ethics (Exhibit filed herewith).
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (Exhibit filed herewith).
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (Exhibit filed herewith).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (Registrant) |
The Swiss Helvetia Fund, Inc. | |
| By (Signature and Title) |
/s/ Rudolf Millisits | |
| Rudolf Millisits, Chief Executive Officer | ||
| Date March 6, 2013 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By (Signature and Title) |
/s/ Rudolf Millisits | |
| Rudolf Millisits, Chief Executive Officer | ||
| Date March 6, 2013 | ||
| By (Signature and Title) |
/s/ Philippe R. Comby | |
| Philippe R. Comby, Chief Financial Officer | ||
| Date March 6, 2013 | ||