the swiss helvetia fund, inc. - schroders · the swiss helvetia fund, inc. group. a number of...

T H E S W I S S H E L V E T I A F U N D , I N C .

May 18, 2017

For the three-month period endedMarch 31, 2017, the performance of The SwissHelvetia Fund, Inc. (the “Fund”), as meas-ured by the change in value in the Fund’s netasset value (“NAV”), increased 8.66% in USdollars (“USD”). For the same period, theFund’s share price performance increased13.61% in USD, as the discount at which theFund‘s shares traded narrowed. Thiscompares with an increase of 9.36% in theSwiss Performance Index (the “Index” or“SPI”) in USD.

Economic environment during the periodunder reviewGlobal economic review

The global macroeconomic environmentremained mildly positive in the first quarterof 2017. The International Monetary Fund(“IMF”) did not materially change its fore-cast, expecting a moderate acceleration fordeveloped markets, but also hinting atuncertainty due to the new United States(“US”) administration. Global PurchasingManager Indices (“PMI”) softened from 53.9to 53.5, but the manufacturing componentstrengthened. According to the latestEuropean Central Bank economic bulletin,the Euro area recovery is becoming morebroadly based and firmer – however that isfrom recessionary levels not long ago.

Swiss economic reviewThe Swiss economy as measured by GDP

grew by 0.1% in the 4th quarter of 2016 (quarteron quarter; not annualized). Private andgovernment consumption has had a positiveimpact, while investment in construction and

equipment has fallen slightly. The tradebalance has also curbed GDP growth. On theproduction side, healthcare and social work aswell as financial services have boosted growth,while value added in manufacturing andenergy production has declined. For 2016 as awhole, real GDP grew by 1.3% (+0.8% in 2015).Due to the lower outcome in the second half of2016, which was close to stagnation, expect-ations for 2017 were revised downwards to1.6% from 1.8% by the State Secretariat forEconomic Affairs (“SECO”) in March 2017. TheSECO also expects unemployment to declinemoderately to 3.2%.

Market environment during the period underreview

Equity markets extended their rally,which began with the November 2016 USelection results. Returns were positive both inlocal currencies and Swiss francs for global,European, US and Swiss equities. In adeparture from past trends, Swiss equitiesperformed best among this group in localcurrency terms and on a currency adjustedbasis. Normally, due to their defensivenature, Swiss equities tend to lag in a risingmarket. However, in the first quarter 2017,the SPI benefited from one of its most heavilyweighted sectors, pharmaceuticals, whichrecovered by 11%, after having under-performed in 2016. Two sectors rose evenmore strongly, and no sub-sector wasnegative. This mix helped propel the SPIahead of peer indices. Small & mid caps roseeven more than large caps (11.7% comparedto 8.9%).

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0.06%0.09%0.13%0.16%

0.32%0.42%0.47%

0.64%0.76%

1.03%1.32%

3.87%

5%

Travel & LeisureMedia

Basic ResourcesAutomobiles & Parts

U�li�esTelecommunica�ons

RetailReal Estate

InsuranceFinancial Services

TechnologyBanks

ChemicalsConstruc�on & Materials

Personal & Household GoodsIndustrial Goods & Services

Food & BeverageHealth Care

0.00%

0.05%0.01%0.01%0.01%0.00%

0% 1% 2% 3% 4%

Swiss Performance Index Q1 2017:Contribu�ons to Index performance by sector*

Source: Schroders, Bloomberg, as of March 31, 2017. Performance measured as total return in USD. Sectors mentioned should not be viewed as arecommendation to buy/sell. Portfolio composition is subject to change over time. Investors cannot invest directly in the Index.

PerformanceIn comparing the Fund’s NAV return of

8.66% to the Index’s return of 9.36% in USDterms, there was a positive relative perform-ance impact from some of the Fund’s largeroverweight positions, such as Logitech,Belimo, DKSH, Sunrise, Swiss Life and VAT.

Furthermore, being underweight inGivaudan, Zurich Insurance, Swiss Re andGalenica had a positive impact on relativeperformance. Some other underweights,however, had a negative effect on relativeperformance as they outperformed, namelyActelion, Sika, ams, LafargeHolcim and Partners

2


Group. A number of negative contributions torelative performance came from overweightsin VZ Holding, Implenia, Tecan, GAM andHelvetia.

The private equity positions as a wholeexperienced a minor positive re-valuation,reflecting a slight appreciation of the Swissfranc, partially offset by a valuation decreasefor Selfrag to account for an additionalfinancing round, in which the Fund did notparticipate, and its dilutive effect.

Portfolio changesIn total, there were two purchases and

five sales of listed equities on a net basisduring the first quarter of 2017. As ofMarch 31, 2017, there are 39 listed companiesheld by the Fund and seven direct privateequity investments, including one partic-ipation in a private equity limitedpartnership.

New Investments by the Fund

Aryzta

Additions to Existing Investments

UBS

Positions Entirely Disposed of

None

Reductions in Existing Investments

Bucher IndustriesOC OerlikonLogitechSwiss ReGAM

We bought a new position in Aryztafollowing the announcement that the execu-tive management is stepping down.Furthermore, it was announced that thecompany will review its holding in Piccardand that Aryzta will start focusing on cashflows. We welcomed these changes by thenew chairman as, in our opinion, Aryzta is anattractive asset that we think has been badlymanaged.

We increased the Fund’s position in UBSas we believe it remains attractively valued.

We reduced our positions in Bucher,GAM, OC Oerlikon, Logitech and Swiss Re. Wetook profits in Bucher as the stock performedwell in anticipation of an improvement inglobal dairy and commodity prices during2017. We also used the ongoing strong shareprice performance of Logitech to realise someprofits. Furthermore, we reduced our posi-tion in Oerlikon following the announcementof their full year result and their investmentplans in additive manufacturing. Oerlikonplans to invest approximately CHF 300m toenter the additive manufacturing market. Inour view, this venture in this new field

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increases the company’s risk profile. We tookprofits in GAM in anticipation of a weakresult. We reduced the Fund’s position inSwiss Re; we expect the re-insurance marketto suffer a prolonged soft period as there isabundant capital at established and newplayers.

Outlook and Investment ViewFollowing the General Election results in

the Netherlands and Macron’s FrenchPresidential win in May, investors will nowlook towards France’s Parliamentary elec-tions in June, and Germany’s Federal electionduring the summer. Meanwhile, the Euro-pean Central Bank’s tone has turned morehawkish following the rise in headlineinflation above its target. This is expected tobe temporary and is unlikely to warrant aresponse from the Bank in the near term.

Despite a hostile approach with manymembers of the media, President DonaldTrump remains in favor on Wall Street. TheUS equity market has returned just over 10%since the election on November 8th,outperforming the other major equity indicesas well as cash, bonds and gold. Meanwhile,the UK equity market remains robust despitethe government’s recent decision to triggerArticle 50 and set in motion the exit from theEuropean Union. The fall in sterling clearlyhelped here, although more recently the rallyhas continued even as the pound has stabi-lized. On the face of it, last year’s populistvictories have been good for equity marketsso far.

The rise in equity markets and bondyields reflects expectations of strongergrowth driven by President Trump’s dereg-ulation agenda and his plans for fiscalexpansion through tax cuts and infra-structure spending. Consequently, theoutlook depends on his ability to deliverchange and whether that change will boostactivity. In terms of delivery, the recenthealthcare bill is seen as a key test of hisability to get legislation through the system.Depending on that outcome, the path ofother measures, such as tax cuts, may bemore difficult.

So far then, equity markets have beenrobust under the new US administration.Investors have focused on the potentialbenefits of deregulation and fiscal stimulus.Deregulation has the potential to createopportunities, particularly in banking andthe energy sector, although investors shouldbe mindful of the prospect for higherinflation and interest rates. Our analysis offinancial markets and economic cycles findsthat a stagflationary mix, when inflation isrising as growth slows, often heralds a diffi-cult period for investors as corporateearnings suffer and central banks seek toprotect their inflation goals by tighteningpolicy.

While these risks for equity markets maypersist over the mid- to long-term horizon,and while equity markets have been positivesince November 2016 and have relativelyhigh valuation levels, we are maintaining apositive outlook (albeit with market volatility

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on the rise). PMI on all major markets haveimproved considerably and indicate apick-up in economic activity. Strongeconomic momentum from the end of lastyear is carrying over into 2017 in the US,Europe and Japan. Growth is also firming inthe BRIC economies (Brazil, Russia, Indiaand China) with China upgraded to 6.6%year-on-year and our global growth forecasthas been nudged higher for 2017 to 2.9%(previously 2.8%). For 2018, consensus

growth forecast is unchanged at 3% asmodest improvements in the BRICs, Japanand the UK are offset by a downgrade to theUS where we have scaled back our expect-ations for fiscal expansion. In Switzerland,we expect an acceleration of growth in 2017.

Overall, this economic backgroundshould be beneficial for corporate earningsand ultimately supportive for equitymarkets.

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Schedule of Investments by Industry (Unaudited) March 31, 2017

No. ofShares Security

FairValue

Percentof NetAssets

Common Stock — 94.84%

Banks — 11.35%

78,100 Cembra Money Bank AG1 $ 6,464,444 1.81%Provides financial services. Thecompany’s services includepersonal loans, vehicle financing,credit cards and savings andinsurance services.(Cost $4,692,948)

554,000 Credit Suisse Group AG1 8,246,765 2.32%A global diversified financialservices company with significantactivity in private banking,investment banking and assetmanagement.(Cost $7,232,010)

104,000 Julius Baer Group Ltd.1 5,195,065 1.46%Provides private banking services.The company advises on wealthmanagement, financial planningand investments; offers mortgageand other lending, foreignexchange, securities trading,custody and execution services.(Cost $4,622,476)

1,057,000 UBS Group AG 16,927,629 4.75%Provides retail banking, corporateand institutional banking, wealthmanagement, asset managementand investment banking.(Cost $16,046,126)


FairValue

Percentof NetAssets

Banks — (continued)

33,749 Valiant Holding AG $ 3,594,229 1.01%Provides financial services inSwitzerland. The company offersa range of products and servicesin the areas of retail banking,business banking, private bankingand asset management.(Cost $3,430,305)

40,428,132 11.35%

Biotechnology — 3.11%

15,300 Actelion Ltd.1 4,321,205 1.21%Focuses on the discovery,development andcommercialization of treatmentsto serve critical, unmet medicalneeds.(Cost $662,219)

10,000 Basilea Pharmaceutica AG1 864,179 0.24%Conducts research into thedevelopment of drugs for thetreatment of infectious diseasesand dermatological problems.(Cost $670,410)

93,160 Kuros Biosciences AG1 1,675,288 0.47%Develops and producesbiopharmaceuticals. The companyproduces vaccines that immunizethe patient against disease relatedproteins.(Cost $852,053)

See Notes to Financial Statements.

6


Schedule of Investments by Industry (Unaudited)(continued)

March 31, 2017


FairValue

Percentof NetAssets

Common Stock — (continued)

Biotechnology — (continued)

11,400 Lonza Group AG1 $ 2,157,111 0.61%Produces organic fine chemicals,biocides, active ingredients, andbiotechnology products. Thecompany operates productionsites in China, Europe and theUnited States.(Cost $826,233)

3,029 NovImmune SA1,2 2,051,713 0.58%Discovers and developstherapeutic monoclonalantibodies (mAbs) to treatpatients suffering from immune-related disorders.(Cost $1,551,109)

11,069,496 3.11%

Chemicals — 4.39%

35,400 Syngenta AG 15,635,486 4.39%Produces herbicides, insecticides,fungicides, and seeds for fieldcrops, vegetables and flowers.(Cost $11,843,898)

15,635,486 4.39%

Construction & Materials — 5.23%

2,850 Belimo Holding AG 9,965,533 2.79%Market leader in damper andvolume control actuators forventilation and air-conditioningequipment.(Cost $5,722,519)

2,000 Forbo Holding AG1 3,063,090 0.86%Produces floor coverings,adhesives and belts for conveyingand power transmission.(Cost $2,300,431)


FairValue

Percentof NetAssets

Construction & Materials — (continued)

80,000 Implenia AG $ 5,618,662 1.58%Provides construction, civil andunderground engineeringservices. The company’s projectsinclude residential and industrialbuildings, tunnels, bridges androads. The company alsoprovides real estate and facilitiesmanagement and marketingservices.(Cost $4,463,192)

18,647,285 5.23%

Financial Services — 2.18%

219,254 GAM Holding AG1 2,705,217 0.76%An independent, well-diversifiedasset management business, witha focus on the manufacturing anddistribution of investmentproducts and services.(Cost $3,082,403)

18,400 VZ Holding AG 5,055,197 1.42%Provides independent financialadvice to private individuals andcompanies. The companyconsults on investment, tax andinheritance planning and providesadvice regarding insuranceproducts and coverage.(Cost $3,583,348)

7,760,414 2.18%


7



March 31, 2017


FairValue

Percentof NetAssets


Food & Beverage — 17.69%

130,700 Aryzta AG1 $ 4,198,017 1.18%Produces and retails specialtybakery products. The Companyproduces French breads, pastries,continental breads, confections,artisan breads, homestylelunches, viennoiserie, patisserie,cookies, pizza, appetizers, andsweet baked goods.(Cost $4,306,186)

200 Chocoladefabriken Lindt &Spruengli AG 13,292,372 3.73%Major manufacturer of premiumSwiss chocolates.(Cost $3,409,877)

593,000 Nestle SA 45,528,798 12.78%One of the world’s largest foodand beverage processingcompanies.(Cost $13,894,380)

63,019,187 17.69%

Industrial Goods & Services — 7.06%

32,200 Adecco Group AG 2,288,856 0.64%Provides personnel andtemporary help, and offerspermanent placement servicesinternationally for professionalsand specialists in a range ofoccupations.(Cost $1,728,839)

3,005 Bucher Industries AG 879,629 0.25%Manufactures food processingmachinery, vehicles and hydrauliccomponents. Produces fruit andvegetable juice processingmachinery, farming machineryand outdoor equipment.(Cost $751,002)


FairValue

Percentof NetAssets

Industrial Goods & Services — (continued)

25,000 Burckhardt Compression HoldingAG $ 6,774,814 1.90%Produces compressors for oilrefining and the chemical andpetrochemical industries,industrial gases and gas transportand storage.(Cost $7,425,952)

54,006 DKSH Holding AG 4,181,493 1.17%An international marketing andservices group. The companyoffers a comprehensive packageof services that includesorganizing and running the entirevalue chain for any product.(Cost $3,470,894)

45,000 Feintool International HoldingAG1 5,295,969 1.49%Manufactures integrated systemsfor fineblanking and formingtechnologies. The companyproduces presses and specialtooling capable of manufacturingprecision parts, automationsystems, riveting machines andextruded plastic and metalcomponents.(Cost $4,049,292)

283,000 OC Oerlikon Corp. AG1 3,025,226 0.85%Produces industrial equipment tomanufacture solar energymodules, place coatings, extractprocessing gases, manufacturetextiles, and transmit power usingmechatronic drivelinecomponents.(Cost $2,859,300)


8



March 31, 2017


FairValue

Percentof NetAssets


Industrial Goods & Services — (continued)

28,500 SFS Group AG1 $ 2,700,659 0.76%Provides automotive products,building and electroniccomponents, flat roofing andsolar fastening systems. Thecompany operates productionfacilities in Asia, Europe andNorth America.(Cost $1,849,976)

25,146,646 7.06%

Insurance — 3.73%

5,500 Helvetia Holding AG 3,049,603 0.86%Provides a broad range of life,casualty, liability, accident andtransportation insurance.(Cost $2,505,562)

24,500 Swiss Life Holding AG1 7,910,885 2.22%Provides life insurance andinstitutional investmentmanagement.(Cost $5,607,319)

26,000 Swiss Re AG 2,336,480 0.65%Provides reinsurance, insuranceand insurance linked financialmarket products. The companyoffers automobile, liability,accident, engineering, marine,aviation, life and health insurance.(Cost $2,221,228)

13,296,968 3.73%


FairValue

Percentof NetAssets

Machinery — 0.86%

28,293 VAT Group AG1 $ 3,083,837 0.86%Developer, manufacturer andsupplier of vacuum valves, multi-valve modules and edge-weldedbellows for use in semiconductor,display and solar panelmanufacturing. The companyprovides its products around theworld.(Cost $1,348,639)

3,083,837 0.86%Medical Equipment — 4.29%

56,000 Sonova Holding AG 7,771,018 2.18%Designs and produces wirelessanalog and digital in-the-ear andbehind-the-ear hearing aids andminiaturized voicecommunications systems.(Cost $8,573,645)

3,731 Spineart SA1,2 969,139 0.27%Designs and markets aninnovative full range of spineproducts, including fusion andmotion preservation devices,focusing on easy to implanthigh-end products to simplify thesurgical act.(Cost $2,623,328)

41,000 Tecan Group AG 6,557,870 1.84%Manufactures and distributeslaboratory automationcomponents and systems. Theproducts are mainly used byresearch and diagnosticlaboratories.(Cost $3,806,154)

15,298,027 4.29%


9



March 31, 2017


FairValue

Percentof NetAssets


Personal & Household Goods — 5.27%

145,000 Cie Financiere Richemont SA $ 11,473,100 3.22%Manufactures and retails luxurygoods. Produces jewelry,watches, leather goods, writinginstruments and men’s andwomen’s wear.(Cost $9,612,861)

105,000 Swatch Group AG (The) 7,322,044 2.05%Manufactures finished watches,movements and components.Produces components necessaryto its various watch brandcompanies. The company alsooperates retail boutiques.(Cost $9,126,647)

18,795,144 5.27%

Pharmaceuticals — 23.46%

580,000 Novartis AG 43,082,072 12.09%One of the leading manufacturersof branded and genericpharmaceutical products.(Cost $13,932,329)

158,500 Roche Holding AG 40,505,819 11.37%Develops and manufacturespharmaceutical and diagnosticproducts. Produces prescriptiondrugs to treat cardiovascular,infectious and autoimmunediseases and for other areasincluding dermatology andoncology.(Cost $10,459,225)

83,587,891 23.46%


FairValue

Percentof NetAssets

Retail — 0.53%

12,500 Dufry AG1 $ 1,905,689 0.53%Operates duty-free shops incountries such as Tunisia, Italy,Mexico, France, Russia, theUnited Arab Emirates, Singapore,the Caribbean and the UnitedStates.(Cost $1,570,314)

1,905,689 0.53%

Technology — 3.51%

170,000 Airopack Technology Group AG1 1,936,161 0.54%Develops and patents packagingsolutions. The company hasdeveloped a technology for fillingliquids, powders, gases andproducts of average-to-highviscosity (such as gels, creams orfoam) into recyclable plasticpackaging.(Cost $1,796,441)

332,300 Logitech International SA 10,573,710 2.97%Engages in the development andmarketing of hardware andsoftware products that enable orenhance digital navigation, musicand video entertainment, gaming,social networking and audio andvideo communication.(Cost $4,377,088)

12,509,871 3.51%


10



March 31, 2017


FairValue

Percentof NetAssets


Telecommunications — 2.18%

102,800 Sunrise Communications GroupAG1 $ 7,754,034 2.18%Provides a broad range oftelecommunications services andequipment. The company offersmobile and wired phone services,broadband internet, cabletelevision services, mobilephones, tablet computers andrelated equipment.(Cost $7,266,158)

7,754,034 2.18%

Total Common Stock(Cost $200,154,316) 337,938,107 94.84%

Preferred Stock — 0.71%


8,400 Ixodes AG, Series B1,2,3 139,224 0.04%Develops and produces a topicalproduct for the treatment ofborreliosis infection and theprevention of Lyme disease froma tick bite.(Cost $2,252,142)

3,162 NovImmune SA, Series B1,2 2,141,801 0.60%Discovers and developstherapeutic monoclonalantibodies to treat patientssuffering from immune-relateddisorders.(Cost $2,062,307)

2,281,025 0.64%


FairValue

Percentof NetAssets

Preferred Stock — (continued)

Industrial Goods & Services — 0.05%

500,863 SelFrag AG Class A1,2 $ 185,144 0.05%Designs, manufactures and sellsindustrial machines andprocesses using selectivefragmentation technology.(Cost $1,932,198)

185,144 0.05%Medical Equipment — 0.02%

83,611 EyeSense AG, Series APreferred1,2 68,496 0.02%A spin-out from Ciba Vision AG.Develops novel ophthalmic self-diagnostic systems for glucosemonitoring of diabetes patients.(Cost $3,007,048)

68,496 0.02%

Total Preferred Stock(Cost $9,253,695) 2,534,665 0.71%

Limited Partnership — 0.29%


Aravis Biotech II, LimitedPartnership1,2,3

(Cost $2,688,778) 1,024,198 0.29%

Total Limited Partnership(Cost $2,688,778) 1,024,198 0.29%

Total Investments*(Cost $212,096,789) 341,496,970 95.84%

Other Assets Less Liabilities 14,820,403 4.16%

Net Assets $356,317,373 100.00%

Net Asset Value Per Share:($356,317,373 ÷ 28,126,525shares outstanding,$0.001 par value: 50 millionshares authorized) $ 12.67


11



March 31, 2017

1 Non-income producing security.2 Illiquid. There is not a public market for these securities in the United States or in any foreign jurisdiction, including Switzerland. Securities are

priced at Fair Value in accordance with the Fund’s valuation policy and procedures. At the end of the period, the aggregate Fair Value of thesesecurities amounted to $6,579,715 or 1.8% of the Fund’s net assets. Additional information on these securities is as follows:

Security Acquisition Date Cost

Aravis Biotech II, Limited Partnership July 31, 2007 – September 13, 2016 $ 2,688,778EyeSense AG – Preferred Shares A July 22, 2010 – October 3, 2011 3,007,048Ixodes AG – Preferred Shares B April 7, 2011 – June 1, 2012 2,252,142NovImmune SA – Common Shares October 7, 2009 – December 11, 2009 1,551,109NovImmune SA – Preferred Shares B October 7, 2009 – December 11, 2009 2,062,307SelFrag AG – Class A – Preferred Shares December 15, 2011 – January 28, 2014 1,932,198Spineart SA – Common Shares December 22, 2010 2,623,328

$16,116,910

3 Affiliated Company. An affiliated company is a company in which the Fund has ownership of at least 5% of the company’s outstanding votingsecurities or an equivalent interest in the company. Details related to affiliated company holdings are as follows:

Name of IssuerFair Value as of

12/31/16Gross

AdditionsGross

ReductionsRealized

Gain/(Loss)

Change inUnrealizedGain/(Loss)

InterestIncome

Fair Value as of03/31/17

Aravis Biotech II, Limited Partnership $ 966,400 $— $— $— $57,798 $— $1,024,198Ixodes AG – Preferred Shares B 137,114 — — — 2,110 — 139,224

$1,103,514 $— $— $— $59,908 $— $1,163,422

* Cost for Federal income tax purposes is $212,202,033 and net unrealized appreciation (depreciation) consists of:

Gross Unrealized Appreciation $143,165,239Gross Unrealized Depreciation (13,870,302)

Net Unrealized Appreciation (Depreciation) $129,294,937


12


Schedule of Investments by Industry (Unaudited)(concluded)

March 31, 2017

PORTFOLIO HOLDINGS% of Net Assets as of March 31, 2017

Pharmaceuticals 23.46%Food & Beverage 17.69%Banks 11.35%Industrial Goods & Services 7.11%Personal & Household Goods 5.27%Construction & Materials 5.23%Chemicals 4.39%Medical Equipment 4.31%Biotechnology 4.04%Insurance 3.73%Technology 3.51%Financial Services 2.18%Telecommunications 2.18%Machinery 0.86%Retail 0.53%

Other Assets Less Liabilities 4.16%

100.00%

TOP 10 PORTFOLIO HOLDINGS% of Net Assets as of March 31, 2017Nestle SA 12.78%Novartis AG 12.09%Roche Holding AG 11.37%UBS Group AG 4.75%Syngenta AG 4.39%Chocoladefabriken Lindt & Spruengli AG 3.73%Cie Financiere Richemont SA 3.22%Logitech International SA 2.97%Belimo Holding AG 2.79%Credit Suisse Group AG 2.32%


13


Notes to Schedule of Investments (Unaudited)

Note 1—Organization and Significant Accounting PoliciesA. OrganizationThe Swiss Helvetia Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as anon-diversified, closed-end management investment company. The Fund is organized as a corporation under the laws of the Stateof Delaware.

The investment objective of the Fund is to seek long-term growth of capital through investment in equity and equity-linked secu-rities of Swiss companies. The Fund may also acquire and hold equity and equity-linked securities of non-Swiss companies inlimited instances.

B. Securities ValuationThe 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 onwhich 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 thatare listed but have not traded on a day on which the Fund calculates its NAV, the Fund uses the mean between the bid and askedprices for that day. If there are no asked quotations for such a security, the value of such security will be the most recent bid quota-tion on the Primary Market on that day. On any day when a security’s Primary Market is closed because of a local holiday or otherscheduled closure, but the New York Stock Exchange is open, the Fund may use the prior day’s closing prices to value such securityregardless of the length of the scheduled closing.

When valuing fixed-income securities, if any, the Fund uses the last bid price prior to the calculation of the Fund’s NAV. If there isno current bid price for a fixed-income security, the value of such security will be the mean between the last quoted bid and askedprices on that day. Overnight and certain other short-term fixed-income securities with maturities of less than 60 days will be valuedby the amortized cost method, unless it is determined that the amortized cost method would not represent the fair value of suchsecurity.

It is the responsibility of the Fund’s Board of Directors (the “Board”) to establish procedures to provide for the valuation of theFund’s portfolio holdings. When valuing securities for which market quotations are not readily available, or for which the marketquotations that are available are considered unreliable, the Fund determines a fair value in good faith in accordance with theseprocedures (a “Fair Value”). The Fund may use these procedures to establish the Fair Value of securities when, for example, asignificant event occurs between the time the market closes and the time the Fund values its investments. After consideration ofvarious factors, the Fund may value the securities at their last reported price or at some other value.

Swiss exchange-listed options, if any, including Eurex-listed options, are valued at their most recent sale price (latest bid for longoptions and the latest ask for short options) on the Primary Market, or if there are no such sales, at the average of the most recentbid and asked quotations on such Primary Market, or if such quotations are not available, at the last bid quotation (in the case ofpurchased options) or the last asked quotation (in the case of written options). If, however, there are no such quotations, suchoptions 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, if any, are valued at the price communicated by the counterparty to the option, whichtypically is the price at which the counterparty would close out the transaction. Option contracts, if any, that are neither exchange-listed nor traded in the over-the-counter market, and where no broker can provide a quote or approved pricing vendor a price, maybe valued using the implied volatilities observed for similar instruments or from aggregated market data received from services(e.g., Bloomberg) as an input to a widely-accepted model.

14


Notes to Schedule of Investments (Unaudited) (continued)

The Fund is permitted to invest in investments that do not have readily available market quotations. For such investments, the Actrequires the Board to determine their Fair Value. The aggregate value of these investments amounted to $6,579,715, or 1.8% of theFund’s net assets at March 31, 2017, and are listed in Note 2 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 levelslisted below:

Level 1—unadjusted quoted prices in active markets for identical assets and liabilitiesLevel 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 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 March 31, 2017:

Level 1Quoted Prices

Level 2Other Significant

Observable Inputs

Level 3Significant

Unobservable Inputs

InvestmentValued atNAV** Total

Investments in Securities*Common Stock $334,917,255 $— $3,020,852 $ — $337,938,107Preferred Stock — — 2,534,665 — 2,534,665Limited Partnership — — — 1,024,198 1,024,198

Total Investments in Securities $334,917,255 $— $5,555,517 $1,024,198 $341,496,970

* Please see the Schedule of Investments for industry classifications.

** The Fund adopted Accounting Standards Update 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain EntitiesThat Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”) on January 1, 2016. As of March 31, 2017 certain of the Fund’sinvestments were valued using net asset value (“NAV”) per share (or its equivalent) as a practical expedient for fair value and have beenexcluded from the fair value hierarchy in accordance with ASU 2015-07. The fair value amount presented in this table is intended to permitreconciliation of the amounts presented in the fair value hierarchy to the amounts presented in the statement of assets and liabilities.

The Fund values its investment in a private equity limited partnership in accordance with Accounting Standards Codification820-10-35, “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 fairvalue, based on the NAV of the investment as a practical expedient, without further adjustment, unless it is probable that theinvestment will be sold at a value significantly different than the NAV. If the NAV of the investment is not as of the Fund’s measure-ment date, then the NAV should be adjusted to reflect any significant events that may change the valuation. Inputs and valuationtechniques for these adjustments may include fair valuations of the partnership and its portfolio holdings provided by the partner-ship’s general partner or manager, other available information about the partnership’s portfolio holdings, values obtained onredemption from other limited partners, discussions with the partnership’s general partner or manager and/or other limited partnersand comparisons of previously-obtained estimates to the partnership’s audited financial statements. In using the unadjusted NAV asa practical expedient, certain attributes of the investment that may impact its fair value are not considered. Attributes of thoseinvestments 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.

Level 3 securities, which are listed in Note 2 to the Schedule of Investments, consist of the Fund’s investments in privately-heldcompanies.

15


Notes to Schedule of Investments (Unaudited) (continued)

Inputs and valuation techniques used by the Fund to value its Level 3 investments in privately-held companies may include thefollowing: acquisition cost; fundamental analytical data; discounted cash flow analysis; nature and duration of restrictions ondisposition of the investment; public trading of similar securities of similar issuers; economic outlook and condition of the industryin which the issuer participates; financial condition of the issuer; and the issuer’s prospects, including any recent or potentialmanagement or capital structure changes. Although these valuation inputs may be observable in the marketplace as is characteristicof Level 2 investments, the privately-held companies, categorized as Level 3 investments, generally are highly illiquid in terms ofresale.

When valuing Level 3 investments, management also may consider potential events that could have a material impact on the oper-ations of a privately-held company. Not all of these factors may be considered or available, and other relevant factors may beconsidered on an investment-by-investment basis. The table below summarizes the techniques and unobservable inputs for thevaluation of Level 3 investments.

Quantitative Information about certain Level 3 Fair Value Measurements

Fair Valueat March 31, 2017 Valuation Technique Unobservable inputs Range1

BiotechnologyNovImmune SA—Common Shares $2,051,713 Market approach Recent round of financing N/ANovImmune SA—Preferred Shares 2,141,801 Market approach Recent round of financing N/AIxodes AG—Preferred Shares 139,224 Discounted cash flow Discount rate 14%-16%

Probability of success rate onresearch and development 40%-60%

Industrial Goods & ServicesSelFrag AG—Preferred Shares 185,144 Market approach Recent round of financing N/A

Medical EquipmentEyeSense AG—Preferred Shares 68,496 Market approach Recent round of financing N/ASpineart SA—Common Shares 969,139 Market approach Recent round of financing N/A

Total $5,555,517

1 Significant changes in any of these ranges would result in a significantly higher or lower fair value measurement. Generally, a change in theprobability of success rate on research and development is accompanied by a directionally similar change in fair value. Conversely, a change inthe discount rate is accompanied by a directionally opposite change in fair value.

The Fund’s policy is to disclose transfers between Levels based on their market prices as of the beginning of the period.

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.Common

StockPreferred

Stock Total

Balance as of December 31, 2016 $2,975,080 $2,525,827 $5,500,907Change in Unrealized Appreciation/Depreciation (a) 45,772 8,838 54,610Net Realized Gain (Loss) — — —Gross Purchases — — —Gross Sales — — —Transfer Out of Level 3 — — —

Balance as of March 31, 2017 $3,020,852 $2,534,665 $5,555,517

(a) The noted amounts of change in unrealized appreciation/depreciation relate to the fair value of Level 3 assets held on March 31, 2017.

16


Notes to Schedule of Investments (Unaudited) (concluded)

C. Foreign Currency TranslationThe Fund maintains its accounting records in U.S. dollars. The Fund’s assets are invested primarily in Swiss equities. In addition,the Fund can make its temporary investments in Swiss franc-denominated bank deposits, short-term debt securities and moneymarket instruments. Substantially all income received by the Fund is in Swiss francs. The Fund’s NAV, however, is reported, anddistributions from the Fund are made, in U.S. dollars, resulting in gain or loss from currency conversions in the ordinary course ofbusiness. Historically, the Fund has not entered into transactions designed to reduce currency risk and does not intend to do so inthe future. The cost basis of foreign denominated assets and liabilities is determined on the date that they are first recorded withinthe 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 currencygain/loss. In valuing securities transactions, the receipt of income and the payment of expenses, the Fund uses the prevailingexchange rate on the transaction date.

D. Concentration of Market RiskThe Fund primarily invests in securities of Swiss issuers. Such investments may carry certain risks not ordinarily associated withinvestments in securities of U.S. issuers. These risks include future political and economic developments, unfavorable movements inthe Swiss franc relative to the U.S. dollar, and the possible imposition of exchange controls and changes in governmental law andrestrictions. In addition, concentrations of investments in securities of issuers located in a specific region expose the Fund to theeconomic and government policies of that region and may increase risk compared to a fund whose investments are more diversified.

Note 2—Capital CommitmentsAs of March 31, 2017, the Fund maintains an illiquid investment in one private equity limited partnership. This investment appearsin the Fund’s Schedule of Investments. The Fund’s capital commitment for this partnership is shown in the table below:

InvestmentsOriginal CapitalCommitment*

UnfundedCommitment*

Private Equity Limited Partnership—International (a)Aravis Biotech II, Limited Partnership $3,246,915 $139,293* The original capital commitment represents 3,250,000 Swiss francs. The unfunded commitment represents 139,425 Swiss francs.

The Swiss franc/U.S. dollar exchange rate as of March 31, 2017 was used for conversion and equaled 1.00095 as of such date.(a) This category consists of one private equity limited partnership that invests primarily in ventures, biotechnology and in management buyout of

industrial and consumer goods companies. There is no redemption right for the interest in this limited partnership. Instead, the nature ofinvestments in this category is that distributions are received through the realization of the underlying assets of the limited partnership.

Note 3—Subsequent EventsOn March 28, 2017, the Fund commenced a self-tender offer (the “Offer”) for up to 2,812,653 of its issued and outstanding sharesof common stock, which represented approximately 10% of the Fund’s issued and outstanding shares as of the commencement ofthe Offer, at a price per share equal to 98% of the Fund’s NAV determined as of the close of the regular trading session of the NewYork Stock Exchange (“NYSE”) on the business day immediately following the day the Offer expired. The Offer expired at 5:00 p.m.,New York time, on April 24, 2017.

Approximately 17,795,965 shares of common stock, or approximately 63% of the Fund’s outstanding shares as of the commence-ment of the Offer, were properly tendered. The Fund accepted 2,812,653 shares, or approximately 15.8% of the shares tendered, ona prorated basis, for cash payment of $12.85 per share, which represented 98% of the Fund’s NAV per share as of the close ofregular trading session of the NYSE on April 25, 2017.

17


Automatic Dividend Reinvestment Plan (Unaudited)

Terms and ConditionsPursuant to this Automatic Dividend Reinvest-ment Plan (the “Plan”) of The Swiss HelvetiaFund, Inc. (the “Fund”), unless a holder (each, a“Shareholder”) of the Fund’s shares of commonstock (the “Common Shares”) otherwise elects, allincome dividends, capital gain distributions andreturns of capital, if any (collectively referred toherein as “dividends”), on such Shareholder’sCommon Shares will be automatically reinvestedby American Stock Transfer & Trust Company, asagent for Shareholders in administering the Plan(the “Plan Administrator”), in additionalCommon Shares of the Fund. Shareholders whoelect not to participate in the Plan will receive alldividends payable in cash directly to the Share-holder of record (or, if the Common Shares areheld in street or other nominee name, then to suchnominee) by American Stock Transfer & TrustCompany LLC, as the Dividend DisbursingAgent. Shareholders may elect not to participatein the Plan and to receive all dividends in cash bycontacting the Plan Administrator. Enrollment,purchase or sales of shares and other transactionsor services offered by the Plan can be directed tothe Plan Administrator through the following:

TelephoneTelephone the Plan Administrator: 1-888-556-0425.

In WritingYou may also write to the Plan Administrator atthe following address: American Stock Transfer &Trust Company, PO Box 922, Wall Street Station,New York, NY 10269-0560. Be sure to includeyour name, address, daytime phone number,social security or tax I.D. number and a referenceto The Swiss Helvetia Fund, Inc. on allcorrespondence.

Participation in the Plan is completely voluntaryand may be terminated at any time withoutpenalty by providing notice in writing to the PlanAdministrator at least 3 business days prior toany dividend payment date for that dividend tobe payable in cash. A request for termination thatis received less than 3 business days prior to anydividend payment date will be processed by thePlan Administrator, but you will have thatdividend reinvested in additional CommonShares. However, all subsequent dividends willbe payable in cash unless and until you resumeparticipation in the Plan. To resume participationin the Plan, your request to enroll in the Planmust be received by the record date for thatdividend distribution. If received after the recorddate, your participation in the Plan will beginwith the next dividend declaration.

Whenever the Fund declares a dividend, payableeither in Common Shares or in cash, participantsin the Plan will receive a number of CommonShares determined in accordance with thefollowing provisions and non-participants in thePlan will receive cash. The Common Shares willbe acquired by the Plan Administrator for theparticipants’ accounts, depending upon thecircumstances described below, either (i) throughthe receipt of additional unissued but authorizedCommon Shares from the Fund (“newly issuedCommon Shares”) or (ii) by purchase ofoutstanding Common Shares on the open market(“open-market purchases”) on the New YorkStock Exchange, the primary national securitiesexchange on which the Common Shares aretraded, or elsewhere.

If, on the payment date for any dividend, the netasset value (“NAV”) per Common Share is equalto or less than the market price per CommonShare (plus estimated brokerage trading fees)(such condition being referred to herein as“market premium”), the Plan Administrator will

18


Automatic Dividend Reinvestment Plan (Unaudited) (continued)

invest the dividend amount in newly issuedCommon Shares on behalf of the participants. Thenumber of newly issued Common Shares to becredited to each participant’s account will bedetermined by dividing the dollar amount of thedividend by the NAV per Common Share on thedate the Common Shares are issued, providedthat, if the NAV per Common Share is less than orequal to 95% of the then current market price perCommon Share on the date of issuance, the dollaramount of the dividend will be divided by 95% ofthe market price on the date of issuance forpurposes of determining the number of sharesissuable under the Plan.

If, on the payment date for any dividend, theNAV per Common Share is greater than themarket price of the Common Shares (plus esti-mated brokerage trading fees) (such conditionbeing referred to herein as “market discount”),the Plan Administrator will invest the dividendamount in Common Shares acquired on behalf ofthe participants in open-market purchases.

In the event of a market discount on the paymentdate for any dividend, the Plan Administrator willhave until the last business day before the nextdate on which the Common Shares trade on an“ex-dividend” basis or in no event more than 30days after the record date for such dividend,whichever is sooner (the “last purchase date”), toinvest the dividend amount in Common Sharesacquired in open-market purchases. If, before thePlan Administrator has completed its open-market purchases, the market price of a CommonShare exceeds the NAV per Common Share, theaverage per Common Share purchase price paidby the Plan Administrator may exceed the NAV ofthe Common Shares, resulting in the acquisition offewer Common Shares than if the dividend hadbeen paid in newly issued Common Shares on thedividend payment date. Because of the foregoingdifficulty with respect to open-market purchases,

if the Plan Administrator is unable to invest thefull dividend amount in open-market purchasesduring the purchase period or if the marketdiscount shifts to a market premium during thepurchase period, the Plan Administrator maycease making open-market purchases and mayinvest the uninvested portion of the dividendamount in newly issued Common Shares at theNAV per Common Share at the close of businesson the last purchase date provided that, if theNAV is less than or equal to 95% of the thencurrent market price per Common Share, thedollar amount of the dividend will be divided by95% of the market price on the date of issuance forpurposes of determining the number of CommonShares issuable under the Plan.

The Plan Administrator maintains all registeredShareholders’ accounts in the Plan and furnisheswritten confirmation of all transactions in theaccounts, including information needed byShareholders for tax records. Common Shares inthe account of each Plan participant generally willbe held by the Plan Administrator innon-certificated form in the name of the Planparticipant, although the Plan Administrator willissue certificates for whole Common Shares uponyour request. Certificates for fractional CommonShares will not be issued.

In the case of Shareholders such as banks, brokersor nominees that hold Common Shares for otherswho are the beneficial owners, the Plan Admin-istrator will administer the Plan on the basis ofthe number of Common Shares certified fromtime to time by the record Shareholder and heldfor the account of beneficial owners who partic-ipate in the Plan.

There will be no brokerage charges with respectto Common Shares issued directly by the Fund asa result of dividends payable either in CommonShares or in cash. However, each participant will

19


Automatic Dividend Reinvestment Plan (Unaudited) (concluded)

pay a pro rata share of brokerage trading feesincurred with respect to the Plan Administrator’sopen-market purchases of Common Shares inconnection with the reinvestment of dividendsunder the Plan.

Participants in the Plan may sell any or all of theirCommon Shares in their Plan accounts bycontacting the Plan Administrator. The PlanAdministrator currently charges $15.00 for thetransaction, plus $0.10 per Common Share for thisservice. Participants also may withdraw theirCommon Shares from their Plan accounts and sellthose Common Shares through their broker.

Neither the Fund nor the Plan Administrator willprovide any advice, make any recommendations,or offer any opinion with respect to whether ornot you should purchase or sell your CommonShares or otherwise participate in the Plan. Youmust make independent investment decisionsbased on your own judgment and research. TheCommon Shares held in Plan accounts are notsubject to protection under the Securities InvestorProtection Act of 1970.

Neither the Fund nor the Plan Administrator willbe liable for any good faith act or for any goodfaith omission to act, including, without limi-tation, any claim or liability arising out of failureto terminate a participant’s account upon theparticipant’s death, the prices at which CommonShares are purchased or sold for a participant’saccount, the times when purchases or sales ofCommon Shares are made, or fluctuations in themarket value of Common Shares. However,nothing contained in this provision affects aShareholder’s right to bring a cause of actionbased on alleged violations of the federal secu-rities laws.

VotingEach Shareholder proxy will include thoseCommon Shares purchased or received pursuantto the Plan. The Plan Administrator will forwardall proxy solicitation materials to participants andvote proxies for Common Shares held pursuant tothe Plan in accordance with the instructions of theparticipants.

TaxationThe automatic reinvestment of dividends will notrelieve participants of any federal, state or localincome tax that may be payable (or required to bewithheld) on such dividends.

Amendments to PlanThe Fund reserves the right to suspend, amend orterminate the Plan at any time. All Shareholdersof record, both participants and non-participantsin the Plan, will be notified of any suspension,termination or significant amendment of the Plan.If the Plan is terminated, Common Shares held inthe participants’ accounts will be distributed tothe participants. Any change in the source ofpurchase of Common Shares under the Plan fromopen market purchases or direct issuance by thePlan Administrator does not constitute anamendment to the Plan.

20


Independent Directors and OfficersBrian A. BerrisChairman (Non-executive)David R. Bock1

DirectorRichard A. Brealey2,3

DirectorJoseph S. Calhoun2

DirectorClaus Helbig4

DirectorFred J. Ricciardi2

DirectorSamuel B. Witt III, Esq.DirectorMark A. HemenetzPresidentPrincipal Executive Officer

David J. MarshallTreasurerPrincipal Financial OfficerShanak PatnaikChief Compliance OfficerCarin F. MuhlbaumVice PresidentWilliam P. SauerVice PresidentReid B. AdamsChief Legal OfficerSecretaryAngel LanierAssistant Secretary

1 Audit Committee Chair2 Audit Committee Member3 Pricing Committee Chair

4 Governance/NominatingCommittee Chair

Investment AdviserSchroder Investment Management North America, Inc.7 Bryant ParkNew York, NY 10018(800) 730-2932

Investment Sub-adviserSchroder Investment Management North America Ltd.31 Gresham StreetLondon, EC2V 7QA United Kingdom

AdministratorJPMorgan Chase Bank, N.A.

CustodianJPMorgan Chase Bank, N.A.

Transfer AgentAmerican Stock Transfer & Trust Company59 Maiden LanePlaza LevelNew York, NY 10038(888) 556-0425

Legal CounselProskauer Rose LLP

Independent Registered Public Accounting FirmTait, Weller & Baker, LLP

The Investment AdviserThe Swiss Helvetia Fund, Inc. (the “Fund”) ismanaged by Schroder Investment ManagementNorth America Inc. (“SIMNA Inc.”)SIMNA Inc. is an investment adviser registered withthe U.S. Securities & Exchange Commission (the“SEC”). It provides asset management products andservices to a broad range of clients includingSchroder Series Trust and Schroder Global SeriesTrust, investment companies registered with theSEC. SIMNA Inc. is part of a global asset manage-ment firm with approximately $520.6 billion inassets under management as of March 31, 2017.

Executive OfficesThe Swiss Helvetia Fund, Inc.7 Bryant ParkNew York, NY 10018(800) 730-2932

For inquiries and reports:(800) 730-2932email: [email protected]

Website Addresswww.swzfund.com

The FundThe Fund is a non-diversified, closed-end invest-ment company whose objective is to seek long-termcapital appreciation through investment in equityand equity-linked securities of Swiss companies.The Fund also may acquire and hold equity andequity-linked securities of non-Swiss companies inlimited instances.The Fund is listed on the New York Stock Exchangeunder the symbol “SWZ”.Net Asset Value is calculated daily by 6:15 P.M.(Eastern Time). The most recent calculation isavailable by accessing the Fund’s websitewww.swzfund.com. Net Asset Value is alsopublished weekly in Barron’s, the Monday edition ofThe Wall Street Journal and the Sunday edition of TheNew York Times.

21

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THE SWISS HELVETIA FUND, INC.Executive Offices7 Bryant ParkNew York, NY 10018(800) 730-2932www.swzfund.com

SWZ QR 3-31-17

A SWISS INVESTMENTS FUNDWWW.SWZFUND.COM

QUARTERLY REPORTFor the Period EndedMarch 31, 2017

the swiss helvetia fund, inc. - schroders · the swiss helvetia fund, inc. group. a number of...

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