THE SWISS HELVETIA FUND, INC.
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Directors and Officers
Paul Hottinguer Samuel B. Witt III, Esq.**
CHAIRMAN DIRECTOR
Eric R. Gabus+ Rodolphe E. Hottinger
VICE CHAIRMAN (NON OFFICER) PRESIDENT
Paul R. Brenner, Esq. CHIEF EXECUTIVE OFFICER
DIRECTOR Rudolf S. Millisits
Alexandre de Takacsy SENIOR VICE PRESIDENT
DIRECTOR TREASURER
Claude Frey Philippe R. Comby
DIRECTOR VICE PRESIDENT
Baron Hottinger Edward J. Veilleux
DIRECTOR VICE PRESIDENT
Claude Mosseri-Marlio* SECRETARY
DIRECTOR Leslie K. Klenk
Didier Pineau-Valencienne* ASSISTANT SECRETARY
DIRECTOR Frederick Skillin
Stephen K. West, Esq. ASSISTANT TREASURER
DIRECTOR Sara M. Morris
ASSISTANT TREASURER
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*AUDIT COMMITTEE MEMBER +GOVERNANCE/NOMINATING
**AUDIT COMMITTEE CHAIRMAN COMMITTEE CHAIRMAN
INVESTMENT ADVISOR
Hottinger Capital Corp.
1270 Avenue of the Americas, Suite 400
New York, New York 10020
(212) 332-7930
ADMINISTRATOR
Forum Administrative Services, LLC
(member Citigroup Global Transaction Services)
CUSTODIAN
Swiss American Securities Inc.
TRANSFER AGENT
American Stock Transfer & Trust Company
59 Maiden Lane
Plaza Level
New York, NY 10038
LEGAL COUNSEL
Stroock & Stroock & Lavan LLP
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
The Investment Advisor
The Swiss Helvetia Fund, Inc. (the "Fund") is managed by Hottinger Capital
Corp., which belongs to the Hottinger Group.
The Hottinger Group dates back to Banque Hottinguer, which was formed in Paris
in 1786 and is one of Europe's oldest private banking firms. The Hottinger Group
has remained under the control of the Hottinger family through seven
generations. It has offices in New York, Zurich, Luxembourg, Toronto, Geneva,
Vienna, London, and the Bahamas.
EXECUTIVE OFFICES
The Swiss Helvetia Fund, Inc.
1270 Avenue of the Americas, Suite 400
New York, New York 10020
1-888-SWISS-00 (1-888-794-7700)
(212) 332-2760
FOR INQUIRIES AND REPORTS:
1-888-SWISS-00 (1-888-794-7700)
Fax: (212) 332-7931
email: swz@swz.com
WEBSITE ADDRESS
http://www.swz.com
The Fund
The Swiss Helvetia Fund, Inc. is a non-diversified, closed-end investment
company whose objective is to seek long-term capital appreciation through
investment in equity and equity-linked securities of Swiss companies. The Fund,
listed on the New York Stock Exchange under the symbol "SWZ," is managed by
Hottinger Capital Corp.
The Fund has maintained Morningstar's overall rating of four stars as of
September 30, 2004. Of course, past performance is no guarantee of future
results. See the footnote on page 4 for more information.
Net Asset Value is calculated daily by 6:15 P.M. (Eastern Time). The most recent
calculation is available by calling 1-888-SWISS-00 or by accessing our Website.
Net Asset Value is also published weekly in BARRON'S, the Monday edition of THE
WALL STREET JOURNAL and the Sunday Edition of THE NEW YORK TIMES.
1
THE SWISS HELVETIA FUND, INC.
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Letter to Stockholders
GLOBAL MARKET OVERVIEW
Despite improvements in stock market valuations and liquidity, the downward
path of earnings expectations has kept most markets under pressure so far this
year. Macroeconomic imbalances, ongoing geopolitical issues, high oil and
commodity prices, the upcoming U.S. presidential elections, and multi-year lows
in volatility are contributing to investor caution. In addition, companies
around the world are running substantial cash surpluses that have not been seen
on a sustained basis for at least the past three decades.
. IN THE U.S., economic growth is weakening mainly due to high oil prices.
Corporate margins seem close to a peak and, as inflation creeps up,
short-term interest rates will have to continue their upward path. This
backdrop has contributed to a compression of stock valuations.
Foreign investors have continued to increase their already large holdings
of U.S. Treasuries. At some point favorable economic developments will lead
to more demand and more structured and liquid markets in these investors'
own countries and they will find ample fixed income investment
opportunities at home. This would create an increase in the supply of U.S.
dollars in the international markets and put pressure on U.S. Treasury
prices.
. IN CHINA, the economy has not experienced much of a slow down, partly
because an increase in consumer spending has provided an offset to the
reduction in capital expenditure growth seen at the beginning of the year.
An increase in interest rates by the Chinese central bank is in the cards.
. IN EUROPE, companies are operating on high margins and return on assets,
and have balance sheets that are as strong as they have been since the
1960's. High cash flow generation allows them to buy back shares or
increase dividends at a higher than historical rate. While such actions may
also signal a lack of opportunities to expand businesses, they provide good
support for stock prices.
SWISS ECONOMIC NOTES
On September 16, the Swiss National Bank (SNB) increased the three-month
LIBOR interest rate target range by 0.25 percentage points, from 0.00%-1.00% to
0.25%-1.25%. In so doing, the SNB indicated it intends to keep the rate in the
middle of the target range (at 0.75%) for the time being.
Real gross domestic product (GDP) grew at 2%, year over year, in the second
quarter, slightly better than the 1.6% rate of the first quarter.
2
THE SWISS HELVETIA FUND, INC.
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Letter to Stockholders (continued)
The unemployment rate, after decreasing from 3.7% to 3.6% in July, rose
again to 3.7% in August and remained at that level in September.
Forecasts are showing that the recovery is losing momentum. According to
the latest study made by KOF (the Zurich-based economic research institute), the
GDP growth rate is expected to be 1.6% for this year and 1.8% for next year. KOF
forecasts a peak at the end of this year and the beginning of next year and
another slowdown in 2006 with a growth rate of 1.5%. The main reason given is
that the international recovery is expected to stay comparably weak and
short-lived, a development that would have an immediate impact on Swiss exports.
KOF believes that the growth of exports, which accounts for almost half of Swiss
GDP, will probably weaken to 4.4% in 2005, after averaging 5.9% this year.
The ten-year spot interest rate on Confederation bonds decreased
substantially during the third quarter. After reaching a peak of 2.9% in the
middle of June, it finished at 2.6% at the end of September. Meanwhile,
short-term interest rates (3-6 months) increased, resulting in a flattening of
the yield curve similar to the situation in the U.S. and the United Kingdom.
SWISS MARKET REVIEW AND FUND PERFORMANCE
Overall this year the performance of the Swiss market has been subdued,
with the Swiss Performance Index (SPI) showing a year- to-date return of 2.42%.
After being among the best-performing European markets in the first half of this
year, the Swiss market performed poorly in the third quarter. This was mainly
due to the poor performance of large-capitalization stocks. Swiss
mid-capitalization stocks, on the other hand, performed better with a 5.9%
year-to-date return.
A substantial position in mid-capitalization stocks resulted in good
performance for the Fund. The Fund's year-to-date return, as measured in Swiss
francs, has been 4.81%, outperforming the SPI by 2.39%. In U.S. dollar terms the
Fund's performance was 3.80%, reflecting the U.S. dollar's 0.97% appreciation
against the Swiss franc.
Main themes of the Fund's strategy were investments in energy, commodity
related stocks, emerging market players and high yield dividend stocks. The best
performing sectors on the Swiss market year-to-date were Utility Suppliers
(+26.2%, led by BKW FMB Energie AG's 34.0% increase), Construction (+25.7% led
by Geberit AG's 62.9% increase and Holcim Ltd's. 19.2% increase), and Basic
Resources (+25.1% led by Swiss Steel's 67.66% increase, benefiting from high
commodity prices).
3
THE SWISS HELVETIA FUND, INC.
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Letter to Stockholders (continued)
The Fund's cumulative performance continues to be superior to its Swiss
peers and its benchmark. As of September 30, 2004, the Fund maintained an
overall rating of four stars from Morningstar*. Past performance is no guarantee
of future results.
*Morningstar is an independent fund performance monitor. Its ratings reflect
historic risk-adjusted performance and may change monthly. Its ratings of one
(low) and five (high) stars are based on a fund's three- and five-year average
annual total returns with fee adjustments, and a risk factor that reflects fund
performance relative to three-month Treasury Bill monthly returns. Only 33% of
the funds in an investment category are awarded four or five stars. As of
September 30, 2004, there were 10 funds in the Fund's asset category rated by
Morningstar.
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PEER GROUP/INDICES PERFORMANCE COMPARISON IN SWISS FRANCS/1/
----------------------------------------------------------------------------------------------------------------------
YTD AS YEAR ENDED DECEMBER 31, CUMULATIVE
OF ---------------------------------------------------- PERFORMANCE
9/30/04 2003 2002 2001 2000 1999 1998 1997 12/31/96-09/30/04
--------------------------------------- ------- ------ -------- -------- ------ ------ ------ ------ -----------------
SWISS HELVETIA FUND 4.81% 22.54% (20.40)% (22.91)% 14.06% 14.70% 15.57% 53.99% 83.50%
Swiss Performance Index (SPI) 2.42% 22.06% (25.95)% (22.03)% 11.91% 11.69% 15.36% 55.19% 61.52%
Swiss Market Index (SMI) (0.41)% 18.51% (27.84)% (21.11)% 7.47% 5.71% 14.28% 58.93% 38.63%
Switzerland iShares/2/ (Formerly called
Webs Switzerland) 2.41% 19.14% (26.23)% (23.12)% 7.75% 12.22% 11.74% 47.79% 38.18%
CS Equity Swiss Blue Chips/3, 7/ (1.19)% 18.13% (28.75)% (22.12)% 10.97% 7.57% 14.21% 59.90% 41.20%
UBS Equity Inv. Switzerland/4, 7/ 0.40% 18.14% (26.02)% (22.04)% 7.42% 6.43% 12.75% 55.94% 37.51%
Pictet (CH) -- Swiss Equities/5, 7/ 3.08% 20.10% (27.93)% (22.35)% 7.34% 9.38% 11.05% 55.65% 40.60%
Saraswiss (Bank Sarasin)/6, 7/ (0.74)% 19.64% (28.51)% (24.45)% 9.72% 7.10% 14.41% 53.57% 32.43%
/1 /PERFORMANCE OF FUNDS IS BASED ON CHANGES IN THE FUND'S NAV OVER A SPECIFIED
PERIOD. IN EACH CASE TOTAL RETURN IS CALCULATED ASSUMING REINVESTMENT OF ALL
DISTRIBUTIONS. FUNDS LISTED, OTHER THAN SWITZERLAND ISHARES, ARE NOT REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION. PERFORMANCE AND DESCRIPTIVE
INFORMATION ABOUT THE FUNDS ARE DERIVED FROM THEIR PUBLISHED INVESTOR REPORTS
AND WEBSITES AND ARE SUBJECT TO CHANGE.
/2/ SWITZERLAND ISHARES ARE TRADED ON THE NEW YORK STOCK EXCHANGE AND INVEST IN
MOST OF THE SAME STOCKS LISTED IN THE MORGAN STANLEY CAPITAL INTERNATIONAL
(SWITZERLAND) INDEX. THESE STOCKS REPRESENT SWITZERLAND'S LARGEST AND MOST
ESTABLISHED PUBLIC COMPANIES, ACCOUNTING FOR APPROXIMATELY 85% OF THE MARKET
CAPITALIZATION OF ALL OF SWITZERLAND'S PUBLICLY TRADED STOCKS. PERFORMANCE OF
ISHARES IS CALCULATED BASED UPON THE CLOSING PRICES OF THE PERIOD INDICATED
USING THE SWISS FRANC/U.S. DOLLAR EXCHANGE RATE AS OF NOON ON SUCH DATE, AS
REPORTED BY BLOOMBERG. SUCH EXCHANGE RATES WERE AS FOLLOWS: 12/31/96 = 1.35,
12/31/97 = 1.46, 12/31/98 = 1.38, 12/31/99 = 1.60, 12/31/00 = 1.61, 12/31/01 =
1.67, 12/31/02 = 1.39, 12/31/03 = 1.24 AND 9/30/04 = 1.25.
/3/ THIS FUND INVESTS IN EQUITIES ISSUED BY LEADING SWISS COMPANIES. STOCK
SELECTION IS BASED ON ECONOMIC, SECTOR AND COMPANY ANALYSES. PREFERENCE IS GIVEN
TO LARGE-CAP COMPANIES.
/4/ THIS FUND INVESTS PRIMARILY IN MAJOR SWISS COMPANIES. QUALITY CRITERIA USED
FOR DETERMINING RELATIVE WEIGHTINGS OF COMPANIES INCLUDE: STRATEGIC ORIENTATION,
STRENGTH OF MARKET POSITION, QUALITY OF MANAGEMENT, SOUNDNESS OF EARNINGS,
GROWTH POTENTIAL AND POTENTIAL FOR IMPROVING SHAREHOLDER VALUE. THE INVESTMENT
OBJECTIVE SEEKS TO PROVIDE RESULTS THAT ARE ALIGNED WITH THE SPI PERFORMANCE.
/5/ THIS FUND INVESTS IN SHARES OF SWISS COMPANIES LISTED ON THE SWISS STOCK
EXCHANGE (SWX) AND INCLUDED IN THE SPI.
/6/ THIS FUND INVESTS IN SHARES OF SWISS COMPANIES. IT WEIGHTS INDIVIDUAL
SECTORS RELATIVE TO THE SPI ON THE BASIS OF THEIR EXPECTED RELATIVE PERFORMANCE.
IT FOCUSES ON LIQUID BLUE-CHIP STOCKS.
/7/ THESE FUNDS ARE NOT AVAILABLE FOR U.S. RESIDENTS OR CITIZENS. THE FUND'S
CUMULATIVE TEN-YEAR PERFORMANCE FOR THE PERIOD ENDED 9/30/04 WAS 150.90%.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
4
THE SWISS HELVETIA FUND, INC.
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Letter to Stockholders (concluded)
----------------------------------------------------------
YEAR TO DATE
DECEMBER 31, 2003
THROUGH
SEPTEMBER 30, 2004
--------------------------------------- ------------------
PERFORMANCE IN SWISS FRANCS
Swiss Performance Index (SPI) 2.42%
Swiss Helvetia Fund
Based on Net Asset Value 4.81%
CHANGE IN U. S. DOLLAR VS. SWISS FRANC 0.97%
PERFORMANCE IN U. S. DOLLARS
Swiss Helvetia Fund
Based on Net Asset Value 3.80%
Based on Market Price 2.62%
S & P 500 Index 1.50%
MSCI EAFE Index 4.27%
Lipper European Fund Index (10 Largest) 4.59%
Lipper European Fund Universe Average 4.68%
OUTLOOK / STRATEGY
We continue to emphasize the potential impact of downside earnings
revisions as a major risk for the markets. In that regard, we continue to adopt
a cautious approach towards growth stocks in light of the slowing down of the
global economy and the already very low interest rates. Management is looking
for a healthy supply and demand structure as a driver of a sustainable return on
assets and equity. In our view, a strong market position and sparse capacity are
determining factors of stable margins and growing cash flow with the potential
for dividend increases.
STOCK REPURCHASE PROGRAM
Pursuant to authorization by the Board, the Fund began open market
purchases of its common stock on the New York Stock Exchange in 1999 and has
continued purchases in each subsequent year. The principal purpose of the stock
repurchase program is to enhance stockholder value by increasing the Fund's net
asset value per share without creating a meaningful adverse effect upon the
Fund's expense ratio and without realizing capital gains in order to fund the
repurchases. The Board has authorized the purchase of up to 500,000 shares in
2004. For the nine months ended September 30, 2004, the Fund repurchased and
retired 135,000 shares at an average price of $12.87 per share (including
brokerage commissions) and a weighted average discount of 17.52%. These
repurchases, which had a total cost of $1,738,016, resulted in an increase of
$375,388 to the Fund's net asset value.
Sincerely,
/s/ Paul Hottinguer
Paul Hottinguer
CHAIRMAN
/s/ Rodolphe Hottinger
Rodolphe Hottinger
PRESIDENT AND CHIEF EXECUTIVE OFFICER
September 30, 2004
5
THE SWISS HELVETIA FUND, INC.
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Schedule of Investments (Unaudited) September 30, 2004
PERCENT
NO. OF OF NET
SHARES SECURITY VALUE ASSETS
--------------------------------------------------------------------------------
COMMON STOCKS -- 95.89%
BANKS -- 10.25%
243,000 CREDIT SUISSE GROUP/1/
REGISTERED SHARES $ 7,754,905 2.07%
A global operating financial group.
(Cost $6,482,308)
435,000 UBS AG/2/
REGISTERED SHARES 30,621,046 8.18%
Largest Swiss bank. It offers
consumer, business and
construction loans, mortgages,
mutual funds, export and structured
finance and securities brokerage
services, advises on mergers and
acquisitions, invests pension funds
and sponsors credit cards.
(Cost $7,578,949)
------------- -------
38,375,951 10.25%
BIOTECHNOLOGY -- 5.52%
192,755 ACTELION LTD./1,2/
REGISTERED SHARES 19,758,661 5.28%
Pharmaceutical company that
develops and markets synthetic
small-molecule drugs against
diseases related to the endothelium.
The company's drugs, Veletri and
Tracleer, are used in the treatment
of heart and pulmonary conditions.
(Cost $15,945,087)
BIOTECHNOLOGY -- (CONTINUED)
35,487 CYTOS BIOTECHNOLOGY AG/1/
REGISTERED SHARES $ 909,413 0.24%
Develops and produces
biopharmaceuticals. Produces
vaccines that immunize the patient
against disease-related proteins.
This instructs the immune system
to produce antibodies to reverse or
prevent disease progression.
(Cost $1,433,020)
------------- -------
20,668,074 5.52%
CHEMICALS -- 8.59%
18,598 SIKA AG/2/
BEARER SHARES 10,723,601 2.86%
Leading producer of construction
chemicals.
(Cost $5,039,641)
224,931 SYNGENTA AG/1,2/
REGISTERED SHARES 21,435,724 5.73%
Produces herbicides, insecticides
and fungicides, and seeds for field
crops, vegetables, and flowers.
(Cost $14,558,082)
------------- -------
32,159,325 8.59%
CONSTRUCTION -- 8.81%
20,758 GEBERIT AG/2/
REGISTERED SHARES 16,124,978 4.30%
Manufactures and supplies water
supply pipes and fittings, installation
systems, drainage and flushing
systems such as visible cisterns,
and other sanitary systems for the
commercial and residential
construction markets.
(Cost $7,721,250)
6
THE SWISS HELVETIA FUND, INC.
--------------------------------------------------------------------------------
Schedule of Investments (Unaudited) September 30, 2004
PERCENT
NO. OF OF NET
SHARES SECURITY VALUE ASSETS
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
CONSTRUCTION -- (CONTINUED)
320,143 HOLCIM LTD./2/
REGISTERED SHARES $ 16,882,691 4.51%
Produces and markets various
building materials, in addition to
providing consulting and
engineering services in all areas of
the cement manufacturing process.
(Cost $16,228,963)
------------- -------
33,007,669 8.81%
FOOD & BEVERAGES -- 13.61%
300 LINDT & SPRUNGLI AG
REGISTERED SHARES 3,579,723 0.95%
Major manufacturer of premium
Swiss chocolates.
(Cost $1,196,399)
207,000 NESTLE AG/2/
REGISTERED SHARES 47,410,907 12.66%
Largest food and beverage
processing company in the world.
(Cost $12,427,541)
------------- -------
50,990,630 13.61%
HEALTH CARE -- 30.20%
1,315,000 NOVARTIS AG/2/
REGISTERED SHARES 61,290,142 16.37%
One of the leading manufacturers of
pharmaceutical and nutrition
products.
(Cost $16,301,451)
HEALTH CARE -- (CONTINUED)
261,766 PHONAK HOLDING AG
REGISTERED SHARES $ 8,395,714 2.24%
Designs and produces wireless
analog and digital hearing aids,
transmitters, remote controls,
microphones and receivers for use
in wireless communications within
broadcasting and sports.
(Cost $2,469,614)
420,000 ROCHE HOLDING AG/2/
DIVIDEND RIGHTS CERTIFICATES 43,389,125 11.59%
Worldwide pharmaceutical
company.
(Cost $8,467,363)
------------- -------
113,074,981 30.20%
INDUSTRIAL GOODS & SERVICES -- 7.67%
2,014,725 ABB LTD./1,2/
REGISTERED SHARES 12,294,550 3.28%
The holding company for ABB Group
which is one of the largest electrical
engineering firms in the world.
(Cost $8,602,479)
2,055 BELIMO HOLDING AG
REGISTERED SHARES 1,035,153 0.28%
World market leader in damper and
volume control actuators for
ventilation and air-conditioning
equipment.
(Cost $450,523)
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THE SWISS HELVETIA FUND, INC.
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Schedule of Investments (Unaudited) September 30, 2004
PERCENT
NO. OF OF NET
SHARES SECURITY VALUE ASSETS
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
INDUSTRIAL GOODS & SERVICES -- (CONTINUED)
4,500 KABA HOLDINGS AG/1/
BEARER SHARES $ 1,061,304 0.28%
Provides mechanical and electronic
security systems.
(Cost $809,667)
59,885 KUEHNE & NAGEL INTERNATIONAL AG
REGISTERED SHARES 9,807,386 2.62%
Operates sea freight, land and rail
transportation businesses and
warehousing and distribution
facilities.
(Cost $3,674,112)
6,598 SGS SOCIETE GENERALE DE
SURVEILLANCE HOLDING SA
REGISTERED SHARES 3,619,468 0.97%
Provides a variety of industrial
inspection, analysis, testing and
verification services worldwide.
(Cost $1,709,324)
5,076 SIG HOLDING AG
REGISTERED SHARES 910,566 0.24%
Manufactures packaging machinery
through subsidaries. Produces
beverage bottling machines,
beverage cartons, and filling
machines.
(Cost $1,012,065)
------------- -------
28,728,427 7.67%
INSURANCE -- 3.75%
43,803 SWISS LIFE HOLDING/1/
REGISTERED SHARES 5,182,905 1.38%
Provides life insurance, institutional
investment management, and
private banking services.
(Cost $5,802,507)
INSURANCE -- (CONTINUED)
68,088 SWISS REINSURANCE COMPANY
REGISTERED SHARES $ 3,917,773 1.05%
Second largest reinsurance
company in the world.
(Cost $4,038,842)
34,549 ZURICH FINANCIAL SERVICES AG
REGISTERED SHARES 4,924,899 1.32%
Offers property, accident, health,
automobile, liability, financial risk
and life insurance and retirement
products.
(Cost $5,493,466)
------------- -------
14,025,577 3.75%
RETAILERS -- 1.01%
24,767 GALENICA HOLDING AG
REGISTERED SHARES 3,768,503 1.01%
Manufactures and distributes
prescription and over-the-counter
drugs, toiletries and hygiene
products.
(Cost $3,158,881)
------------- -------
3,768,503 1.01%
TECHNOLOGY -- 5.04%
22,454 HUBER & SUHNER AG
REGISTERED SHARES 1,564,425 0.42%
Manufactures a wide range of
products, extending from cables for
energy and electrical submission to
special products such as rubber.
(Cost $1,291,221)
8
THE SWISS HELVETIA FUND, INC.
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Schedule of Investments (Unaudited) September 30, 2004
PERCENT
NO. OF OF NET
SHARES SECURITY VALUE ASSETS
--------------------------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
TECHNOLOGY -- (CONTINUED)
208,530 LOGITECH INTERNATIONAL SA/1/
REGISTERED SHARES $ 10,103,359 2.70%
Manufactures personal computer
input devices, as well as producing
trackballs, desktop publishing
programs and related software.
(Cost $7,189,152)
81,577 MICRONAS SEMICONDUCTOR HOLDING AG/1/
REGISTERED SHARES 3,462,466 0.92%
Develops and manufactures a wide
range of semiconductors and
modules used by the automotive
and consumer goods industries.
(Cost $3,114,002)
492,883 TEMENOS GROUP AG/1/
REGISTERED SHARES 3,749,811 1.00%
Provides integrated software for the
banking sector. Develops,
distributes, implements, and
supports its process-oriented real-
time enterprise software designed
for the management of
administrative tasks in Europe,
North America, Asia, and the Middle
East.
(Cost $3,854,386)
------------- -------
18,880,061 5.04%
UTILITY SUPPLIERS -- 1.44%
5,364 ELEKTRIZITAETS-GESELLSCHAFT
LAUFENBURG AG
REGISTERED SHARES $ 3,629,839 0.97%
Generates and sells electricity.
Operates nuclear and hydroelectric
generating plants. Sells excess
power throughout Europe.
(Cost $3,628,197)
3,500 BKW FMB ENERGIE AG
REGISTERED SHARES 1,751,822 0.47%
Generates and distributes electricity.
Produces electricity using nuclear,
hydroelectric, solar, biomass and
wind energy.
(Cost $1,673,583)
------------- -------
5,381,661 1.44%
TOTAL COMMON STOCKS
(Cost $171,352,075) $ 359,060,859 95.89%
OTHER ASSETS IN EXCESS OF LIABILITIES 15,391,295 4.11%
------------- -------
NET ASSETS $ 374,452,154 100.00%
============= =======
--------------------------------------------------------------------------------
/1/ NON-INCOME PRODUCING SECURITY.
/2 /ONE OF THE TEN LARGEST PORTFOLIO HOLDINGS.
9
THE SWISS HELVETIA FUND, INC.
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Dividend Reinvestment Plan (Unaudited)
The Plan
The Fund's Dividend Reinvestment Plan (the "Plan") offers a convenient way for
you to reinvest your capital gains distributions and ordinary income dividends
in additional shares of the Fund.
Some of the Plan features are:
. Once you enroll in the Plan, all of your future distributions and dividends
payable in whole or in part in cash will be automatically reinvested in
Fund shares.
. You will receive shares valued at the lower of the Fund's net asset value
or the Fund's market price as described below. The entire amount of your
distribution or dividend will be reinvested automatically in additional
Fund shares. For any balance that is insufficient to purchase full shares
of the Fund, your account will be credited with fractional shares.
. Your shares will be held in an account with the Plan agent. You will be
sent regular statements for your records.
. You may terminate participation in the Plan at any time.
The following are answers to frequently asked questions about the Plan.
How do I enroll in the Plan?
If you are holding certificates for your shares, contact American Stock Transfer
& Trust Company (AST) at the address shown below. If your shares are held in a
brokerage account, contact your broker. Not all brokerage firms permit their
clients to participate in dividend reinvestment plans such as the Plan and, even
if your brokerage firm does permit participation, you may not be able to
transfer your Plan shares to another broker who does not permit participation.
Your brokerage firm will be able to advise you about its policies.
How does the Plan work?
Any dividends or distributions you receive will be reinvested in shares of the
Fund. The number of shares credited to your Plan account as a result of the
reinvestment will depend upon the relationship between the Fund's market price
and its net asset value per share on the record date of the distribution or
dividend, as described below:
. If the net asset value is greater than the market price (the Fund is
trading at a discount), AST, as Plan Agent, will buy Fund shares for your
account on the open market on the New York Stock Exchange or elsewhere.
Your dividends or distributions will be reinvested at the average price AST
pays for those purchases.
. If the net asset value is equal to the market price (the Fund is trading at
parity), the Fund will issue for your account new shares at net asset
value.
. If the net asset value is less than but within 95% of the market price (the
Fund is trading at a premium of less than 5%), the Fund will issue for your
account new shares at net asset value.
. If the net asset value is less than 95% of the market price (the Fund is
trading at a premium of 5% or more), the Fund will issue for your account
new shares at 95% of the market price.
If AST begins to buy Fund shares for your account at a discount to net asset
value but, during the course of the purchases, the Fund's market
10
THE SWISS HELVETIA FUND, INC.
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Dividend Reinvestment Plan (Unaudited) (concluded)
price increases to a level above the net asset value, AST will complete its
purchases, even though the result may be that the average price paid for the
purchases exceeds net asset value.
Will the entire amount of my distribution or dividend be reinvested?
The entire amount of your distribution or dividend will be reinvested in
additional Fund shares. If a balance remains after the purchase of whole shares,
your account will be credited with any fractional shares (rounded to three
decimal places) necessary to complete the reinvestment.
How can I sell my shares?
You can sell any or all of the shares in your Plan account by contacting AST.
AST charges $15 for the transaction plus $.10 per share for this service. You
can also withdraw your shares from your Plan account and sell them through your
broker.
Does participation in the Plan change the tax status of my distributions or
dividends?
No. The distributions and dividends are paid in cash and their taxability is the
same as if you received the cash. It is only after the payment of distributions
and dividends that AST reinvests the cash for your account.
Can I get certificates for the shares in the Plan?
AST will issue certificates for whole shares upon your request. Certificates for
fractional shares will not be issued.
Is there any charge to participate in the Plan?
There is no charge to participate in the Plan. You will, however, pay a pro rata
share of brokerage commissions incurred with respect to AST's open market
purchases of shares for your Plan account.
How can I discontinue my participation in the Plan?
Contact your broker or AST in writing. If your shares are in a Plan account, AST
will send you a certificate for your whole shares and a check for any fractional
shares.
Where can I direct my questions and correspondence?
Contact your broker, or contact AST as follows:
By mail:
American Stock Transfer & Trust Company
PO Box 922
Wall Street Station
New York, NY 10269-0560
Through the Internet:
www.amstock.com
Through AST's automated voice response System:
1-888-556-0425
AST will furnish you with a copy of the Terms and Conditions of the Plan
without charge.
11
A SWISS THE SWISS
INVESTMENTS ---------------------------
FUND HELVETIA
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FUND, INC.
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www.swz.com
THE SWISS HELVETIA FUND, INC.
EXECUTIVE OFFICES
The Swiss Helvetia Fund, Inc.
1270 Avenue of the Americas
Suite 400
New York, New York 10020 QUARTERLY REPORT
1-888-SWISS-00 FOR THE
(212) 332-2760 PERIOD ENDED
http://www.swz.com SEPTEMBER 31, 2004