Special Opportunities Fund Inc. (SPE) 2013年年度报告「NYSE」.pdf

1、Special Opportunities Fund,Inc.(SPE)Annual ReportFor the year endedDecember 31,2013February 25,2014Dear Fellow Shareholders:The goal of Special Opportunities Fund is to outperform the market over the long-term with less short-term risk than a broad-based index fund.On December 31,2013,the Funds mark

2、et price closed at$17.45 per share after a year-enddistribution of$2.21 per share,representing an increase of 16.13%in the secondhalf of 2013 while the S&P 500 Index capped a very strong year by advancing16.32%.For the year,the Funds market price was up 31.27%vs.32.39%forthe S&P 500 Index.All in all

3、,we think we had a pretty good year.Even with theleverage from our convertible preferred stock,we incurred substantially less riskthan the S&P 500 Index.Also,we have a fair amount of investments that areuncorrelated with the stock market.In previous letters,I discussed some problems with measuring p

4、erformance of aclosed-end fund.I concluded that using the NAV alone was the best measure ofperformance because short-term movements in the discount(or premium)coulddistort reality if reality means assessing how the Funds advisor performed.Forexample,if a funds NAV was flat for the year but its disco

5、unt narrowed from15%to 10%,the market price return would be 5.88%.On the other hand,if itsdiscount widened from 15%to 20%,the market price return would be(5.88)%.But,in either case,the manager had the same NAV performance.However,after thinking about it some more,and given the complexities ofaccount

6、ing for dilution from stock dividends(with an option for cash)or rightsofferings,paying taxes on retained capital gains(as happened in 2012),accretionfrom share repurchases,etc.,I now believe that the Funds market price is the bestmeasure of long term performance.While,as indicated above,changes in