Special Opportunities Fund Inc. (SPE) 2010年年度报告「NYSE」.pdf

1、Special Opportunities Fund,Inc.Annual ReportFor the year endedDecember 31,2010February 23,2011Dear Fellow Shareholders:In the second half of 2010 the S&P 500 Index rose over 23%while the net assetvalue of Special Opportunities Fund increased by“only”16.8%after accountingfor a dividend of three cents

2、 per share.Given our aversion to excessive risk,it isnot surprising that the Fund has underperformed the stock markets since June 30,2010.In fact,it would be surprising if that were not the case as I will explainbelow.For the entire year of 2010,the Funds NAV was up by 15.4%vs.just over 15%for the S

3、&P 500 Index.However,it should be noted that Brooklyn CapitalManagement(“BCM”)assumed responsibility for investing the Funds assets tomeet its new objective of total return on January 25,2010.Therefore,as furtherexplained below,a more relevant comparison for current stockholders is probablythat from

4、 January 25,2010 until December 31,2010 the Funds NAV rose by15.4%vs.17.4%for the S&P 500 Index.Finally,even that comparison is notperfect because it took several months to get the Fund to a near fully investedposition.From its inception in 1993 until 2009,the Fund invested exclusively in tax freebo

5、nds.As a result of a proxy contest,a new Board of Directors was elected onAugust 12,2009.The Funds former investment advisor,UBS Global AssetManagement(Americas)Inc.then resigned effective October 18,2009.Thenewly elected Board voted to(1)replace UBS with BCM,a newly formedinvestment advisor of whic

6、h Andrew Dakos,Steve Samuels and I are principals,and(2)change the Funds principal investment objective from providing tax freeincome to providing total return.These changes were subsequently approved bystockholders.The Funds name was also changed from Insured Municipal IncomeFund to Special Opportu