The Fund's total returns for various periods through July 31, 2017 are provided below. (All figures are based on distributions reinvested at the dividend reinvestment price, and are stated net-of-fees):
NAV Total Return %
Market Price Total Return %
The Fund's returns, which are denominated in U.S. dollars, are affected by the performance of the U.S. dollar against the various currencies listed below.
As of July 31, 2017, the portfolio was invested as follows:
Currency Exposure %
Geographic Exposure %
*Of which 61.2% is invested in US$ denominated bonds issued by foreign issuers.
**Europe is comprised of: Eastern Europe 9.4% and Western Europe 5.6%.
As of July 31, 2017, the top ten holdings of the portfolio based on total assets were as follows:
Coupon / Maturity
State of New South Wales Australia
New Zealand Government Bond
New Zealand Government Bond
Queensland Treasury Corporation
Russia Government Bond
Romania Government Bond
Argentina Government Bond
Sri Lanka Government Bond
South Africa Government Bond
Indonesia Government Bond
As of July 31, 2017 the holdings of the portfolio represented approximately 45.9% sovereign and state government securities, 51.9% corporates, 0.4% supranationals and 1.8% cash.
As of July 31, 2017 the holdings of the portfolio represented approximately 55.7% invested in Developed Markets, 18.8% in Investment Grade Developing Markets and 25.5% in Sub-Investment Grade Developing Markets. Developed Markets are those countries contained in the Citigroup World Government Bond Index, New Zealand, Luxembourg and the Hong Kong Special Administrative Region. Investment Grade Developing Markets are those countries whose sovereign debt is rated not less than Baa3 by Moody's Investors Services Inc. ("Moody's") or BBB- by Standard & Poor's ("S&P") or comparably rated by another appropriate nationally or internationally recognized ratings agency. Sub-Investment Grade Developing Markets are those countries that are not Developed Markets or Investment Grade Developing Markets.
As of July 31, 2017, the Fund's net assets, including US$31.5 million in bank borrowing, amounted to US$112.2 million with a net asset value per share of common stock of US$9.25.
As of July 31, 2017, 19.7% of the portfolio was invested in securities where either the issue or the issuer was rated "A" or better by multiple rating agencies. The credit quality and maturity breakdown of the portfolio was as follows:
Credit Quality (%)
As of July 31, 2017, the average maturity of the portfolio was 8.5 years.
The Fund has in place leverage in the form of a loan facility. The outstanding balance on the loan as of July 31, 2017 is US$31,500,000, which represents no change from the previous month.
The leverage is used with the intent of enhancing returns by borrowing at interest rates that are lower than the relatively higher yields of the emerging market fixed income securities in which the Fund invests. The Fund has entered into interest rate swap agreements in order to fix the interest payable on a portion of the bank loan facility. Details regarding the revolving credit loan facility and the interest rate swap agreements are contained in the Fund's annual and semi-annual reports to shareholders.
Important Information Aberdeen Asset Management Inc. (the "Administrator") has prepared this report based on information sources believed to be accurate and reliable. However, the figures are unaudited and neither the Fund, the Administrator, Aberdeen Asset Management Asia Limited (the "Investment Manage"), Aberdeen Asset Management Limited (the "Investment Adviser"), Aberdeen Asset Managers Limited (the "Sub-Adviser"), nor any other person guarantees their accuracy. Investors should seek their own professional advice and should consider the investment objectives, risks, charges and expenses before acting on this information.
The Investment Manager, Investment Adviser, Sub-Adviser and Administrator are each a subsidiary of Aberdeen Asset Management PLC ("Aberdeen PLC"). The merger of Standard Life plc and Aberdeen PLC, announced on March 6, 2017 ("Merger"), closed on August 14, 2017. Aberdeen PLC became a direct subsidiary of Standard Life plc as a result of the Merger and the combined company changed its name to Standard Life Aberdeen plc. Shareholders of the Fund are not required to take any action as a result of the Merger. Following the Merger, the Fund's Investment Manager, Investment Adviser, Sub-Adviser and Administrator are each an indirect subsidiary of Standard Life Aberdeen plc, but otherwise did not change. The investment management, advisory, sub-advisory and administration agreements for the Fund, the services provided under the agreements, and the fees charged for services did not change as a result of the Merger. The portfolio management team for the Fund did not change as a result of the Merger.
Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund's investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund's portfolio. There is no assurance that the Fund will achieve its investment objective.
Total return figures with distributions reinvested at the dividend reinvestment price are stated net-of-fees and represents past performance. Past performance is not indicative of future results, current performance may be higher or lower. Holdings are subject to change and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities shown. Inception date March 12, 1992.
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