SWZ - Swiss Helvetia Fund: High Yield Quality Swiss Stocks At A Discount To Net Asset Value
2024-05-03 11:15:29 ET
Summary
- Swiss Helvetia Fund is trading at a 16% discount to NAV and could be a potential takeover target in the future.
- The ETF has concentrated holdings in strong businesses with high dividends, making it attractive for dividend investors.
- The overall dividend yield of the portfolio is nearly 6.65%, making it a great option for diversifying into foreign stocks.
Investment Thesis
The Swiss Helvetia Fund Inc ( SWZ ) is a closed-end investment fund that is currently trading at around a 16% discount to NAV, and could potentially be a takeover target sometime in the future. The main focus of the fund seems to be returning capital to shareholders in the form of dividends, which are plentiful. The small market capitalization and nature of the fund make it a standout among other closed-end funds, and factoring in the expense ratio, it yields roughly 5.6%. The stocks which comprise most of the portfolio are strong, quality Swiss companies, with identifiable moats and notably high dividends. The high forward 6.65% dividend yield makes it a great option for dividend investors, especially those who want to diversify into foreign stocks and get a high yield for doing so. Drawbacks are the perceivable high expense ratio of the fund at 1%, and risks related to higher interest rates, the Swiss currency, and the fund's concentration in a small number of holdings which make up around 50% of the portfolio.
Introduction
It has been a while since I have covered a fund, so I thought for a change I would highlight an interesting one that focuses on a different market than the United States. It is also a closed-end fund, which I have never covered before, and some readers might not be familiar with. Below is a simple explanation of what a closed-end fund is and how it works....
Swiss Helvetia Fund: High Yield, Quality Swiss Stocks At A Discount To Net Asset Value