UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: | 811-22132 |
Exact name of registrant as specified in charter: | Aberdeen Funds |
Address of principal executive offices: | 1900 Market Street, Suite 200 |
Philadelphia, PA 19103 | |
Name and address of agent for service: | Ms. Andrea Melia |
Aberdeen Standard Investments Inc. | |
1900 Market Street, Suite 200 | |
Philadelphia, PA 19103 | |
Registrant’s telephone number, including area code: | 866-667-9231 |
Date of fiscal year end: | October 31 |
Date of reporting period: | October 31, 2020 |
Item 1. Reports to Shareholders.
Aberdeen Funds
Equity Series
Annual Report
October 31, 2020
Aberdeen Asia-Pacific (ex-Japan) Equity Fund
Class A – APJAX n Class R – APJRX n Institutional Class – AAPIX n Institutional Service Class – AAPEX
Aberdeen China A Share Equity Fund
Class A – GOPAX n Class C – GOPCX n Class R – GOPRX n Institutional Class – GOPIX n Institutional Service Class – GOPSX
Aberdeen Dynamic Dividend Fund
Class A – ADAVX n Institutional Class – ADVDX
Aberdeen Emerging Markets Fund
Class A – GEGAX n Class C – GEGCX n Class R – GEMRX n Institutional Class – ABEMX n Institutional Service Class – AEMSX
Aberdeen Focused U.S. Equity Fund
Class A – MLSAX n Class C – MLSCX n Class R – GLSRX n Institutional Class – GGUIX n Institutional Service Class – AELSX
Aberdeen Global Equity Fund
Class A – GLLAX n Class C – GLLCX n Class R – GWLRX n Institutional Class – GWLIX n Institutional Service Class – GLLSX
Aberdeen Global Infrastructure Fund
Class A – AIAFX n Institutional Class – AIFRX
Aberdeen International Equity Fund
Class A – GIGAX n Class C – GIGCX n Class R – GIRRX n Institutional Class – GIGIX n Institutional Service Class – GIGSX
Aberdeen International Real Estate Equity Fund
Class A – EGALX n Institutional Class – EGLRX
Aberdeen International Small Cap Fund
Class A – WVCCX n Class C – CPVCX n Class R – WPVAX n Institutional Class – ABNIX
Aberdeen Realty Income & Growth Fund
Class A – AIAGX n Institutional Class – AIGYX
Aberdeen U.S. Mid Cap Equity Fund
Class A – GUEAX n Class C – GUECX n Class R – GUERX n Institutional Class – GUEIX n Institutional Service Class – GUESX
Aberdeen U.S. Multi-Cap Equity Fund
Class A – GXXAX n Class C – GXXCX n Institutional Class – GGLIX n Institutional Service Class – GXXIX
Aberdeen U.S. Small Cap Equity Fund
Class A – GSXAX n Class C – GSXCX n Class R – GNSRX n Institutional Class – GSCIX n Institutional Service Class – GSXIX
Beginning with reports for the period ending April 30, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds' shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from Aberdeen Funds or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Funds or your financial intermediary electronically following the instructions included with this disclosure or by contacting your financial intermediary or the Funds.
You may elect to receive all future reports in paper free of charge. You can inform the Funds or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions included with this disclosure or by contacting the Funds at (866) 667-9231 or your financial intermediary. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds held with your financial intermediary or with Aberdeen Funds.
Table of Contents
Market Review | Page 1 |
Aberdeen Asia-Pacific (ex-Japan) Equity Fund | Page 3 |
Aberdeen China A Share Equity Fund | Page 10 |
Aberdeen Dynamic Dividend Fund | Page 16 |
Aberdeen Emerging Markets Fund | Page 23 |
Aberdeen Focused U.S. Equity Fund | Page 30 |
Aberdeen Global Equity Fund | Page 35 |
Aberdeen Global Infrastructure Fund | Page 41 |
Aberdeen International Equity Fund | Page 48 |
Aberdeen International Real Estate Equity Fund | Page 54 |
Aberdeen International Small Cap Fund | Page 60 |
Aberdeen Realty Income & Growth Fund | Page 66 |
Aberdeen U.S. Mid Cap Equity Fund | Page 71 |
Aberdeen U.S. Multi-Cap Equity Fund | Page 76 |
Aberdeen U.S. Small Cap Equity Fund | Page 81 |
Financial Statements | Page 90 |
Notes to Financial Statements | Page 142 |
Report of Independent Registered Public Accounting Firm | Page 165 |
Other Tax Information | Page 166 |
Shareholder Expense Examples | Page 168 |
Management of the Funds | Page 173 |
Investors should carefully consider a fund's investment objectives, risks, fees, charges and expenses before investing any money. To obtain this and other fund information, please call 866-667-9231 to request a prospectus, or download a prospectus at https://www.aberdeenstandard.com/en-us/us/investor/fund-centre. Please read it carefully before investing any money.
Investing in mutual funds involves risk, including possible loss of principal.
Aberdeen Funds is distributed by Aberdeen Fund Distributors LLC, Member FINRA, 1900 Market Street, Suite 200, Philadelphia, PA 19103.
Aberdeen Standard Investments Inc. (ASII) has been registered as an investment adviser under the Investment Advisers Act of 1940 since August 23, 1995.
The complete schedule of portfolio holdings for each fund of Aberdeen Funds (each a "Fund" and collectively, the "Funds") is included in the Funds' semi-annual and annual reports to shareholders. Aberdeen Funds also files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q (or as an exhibit to its reports on Form N-Q's successor form, Form N-PORT). The Funds' Form N-Q and Form N-PORT filings are available on the Commission's website at http://www.sec.gov and the Funds make the information on Form N-Q (or the exhibit to Form N-PORT) available to shareholders on upon request without charge by calling 1-866-667-9231.
Statement Regarding Availability of Proxy Voting Record.
Information regarding the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-667-9231. The information is also included in the Funds' Statement of Additional Information, which is available on the Funds' website at https://www.aberdeenstandard.com/en-us/us/investor/fund-centre and on the Commission's website at www.sec.gov.
Information relating to how each Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available by August 30 of the relevant year: (i) upon request and without charge by calling 1-866-667-9231; and (ii) on the Commission's website at www.sec.gov.
Market Review
Global financial markets experienced unprecedented volatility during the 12-month period ended October 31, 2020. Both the global equity and fixed-income markets performed well between November 2019 and January 2020, as supportive central bank monetary policy globally and hopes of a breakthrough in the U.S.-China trade war helped allay investors' fears about economic growth. Additionally, the decisive outcome of the election in the UK in December 2019 removed much of the political wrangling and uncertainty related to the UK's withdrawal from the European Union (Brexit).
However, in February 2020, attention shifted to the coronavirus (COVID-19) outbreak as it spread from China to engulf the rest of the world. Governments worldwide responded with drastic containment measures which all but crippled the global economy. As global growth forecasts plummeted, many central banks sought to ease the pain by slashing interest rates and implementing aggressive support programs. The U.S. Federal Reserve (Fed) reduced its benchmark interest rate three times, taking it to near 0% – a level last seen in the aftermath of the global financial crisis in 2008.
U.S. lawmakers enacted the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package in an effort to counter the economic effects of coronavirus. Additionally, the European Union agreed to raise US$857 billion from financial markets in an effort to support member states and sectors most affected by the pandemic, while the European Central Bank extended its US$1.6 trillion emergency bond-purchase program to mid-2021. These measures helped investor sentiment to recover through the summer of 2020, along with subsiding infection rates, which allowed some easing of lockdown restrictions in many countries. Consequently, global economic activity rebounded strongly, propelling equity prices higher. However, a resurgence of infections, particularly in the U.S. and Europe, subsequently forced many nations to reimpose movement restrictions. This weighed heavily on global equity markets towards the end of the reporting period.
Equity prices in developed markets globally recorded modest gains over the 12-month period ended October 31, 2020, with the Morgan Stanley Capital International (MSCI) All-Country (AC) World Index (Net Dividends),1 a global equity market benchmark, returning 4.9%. The Asia-Pacific region, as measured by the MSCI AC Asia-Pacific ex- Japan Index (Net Dividends),2 was the strongest-performing global stock market region for the reporting period, returning 11.8%, followed by the 9.7% return of the U.S. broader-market S&P 500 Index.3 Conversely, Japanese and European equities significantly underperformed the overall global stock market, with the Tokyo Stock Price Index (TOPIX) (Net Dividends)4 posting a virtually flat return of -0.01%, and the MSCI Europe Index (Net Dividends)5 returning -9.3% for the reporting period.
In the Asia-Pacific region, North Asian markets, including China, South Korea and Taiwan, outperformed their peers across Asia over the reporting period as they were among the first to contain the virus effectively. Similarly, the New Zealand market performed well as the government acted swiftly to get the virus under control. In contrast, Southeast Asian markets underperformed during the reporting period. The Singapore market declined on investors' concerns that its open
economy would be affected by sluggish global demand due to the pandemic. Indonesia and the Philippines struggled to slow COVID-19 infections.
The information technology sector led the rally in the U.S. equity market for the reporting period, garnering a double-digit return. Conversely, the energy sector posted a notable decline and was the weakest- performing sector. The COVID-19 pandemic has significantly hampered the U.S. economy. U.S. gross domestic product (GDP) fell 31.4% in the second quarter of 2020, attributable mainly to downturns in consumer spending, exports and nonresidential fixed investment.6 The economy subsequently expanded by 33.1% in the third quarter of 2020, due largely to businesses reopening and the resumption of other activities that were postponed or restricted due to the pandemic.7 There were notable increases in consumer spending, private inventory investment and exports.
Emerging-market (EM) equities, as represented by the MSCI Emerging Markets Index (Net Dividends),8 outperformed their developed-market counterparts, returning 8.3% for the reporting period. Following a COVID-19-induced selloff in the first quarter of 2020, EM stock prices rebounded in the second and third quarters of 2020, after initial lockdowns seemingly slowed infection rates in most affected areas; this led many economies to gradually reopen for business. A key factor aiding the rally in EM stocks during this period was the unprecedented monetary and fiscal policy support by central banks and governments worldwide.
International real estate stocks, as measured by the Financial Times Stock Exchange European Public Real Estate Association/National Association of Real Estate Investment Trusts (FTSE EPRA/NAREIT) Global ex U.S. Index,9 moved sharply lower, returning -19.0% over the reporting period. The real estate market downturn was prompted by the emergence and spread of COVID-19 in Europe and the Americas. The listed property market was particularly hard hit as much of the sector includes venues where people congregate, such as malls or hotels, which faced direct, negative impacts from lockdowns and restrictions on movement. As people around the world were forced to work from their homes, the office space sector also came under pressure amid speculation that corporations will opt to rent less office in the future in favor of increased agile working arrangements. The listed real estate markets bottomed in March 2020, but continued a gradual recovery as investors adjusted their expectations for the post-COVID-19 world.
Fixed-income securities in developed markets modestly outperformed their global equity counterparts over the reporting period, with the Bloomberg Barclays Global Aggregate Bond Index,10 returning 5.6%. Global investment-grade11 bonds, as represented by the ICE Bank of America (BofA) Global Corporate Index,12 returned 6.3%, outperforming the 2.9% return of their global high-yield counterparts, as measured by the ICE BofA Global High Yield Constrained Index,13 for the reporting period. As credit spreads widened significantly, demand for "safe-haven" assets such as developed-market government bonds soared, driving yields down sharply. This was compounded by central banks globally cutting interest rates to record lows, along with an unprecedented amount of
2020 Annual Report | 1 |
Market Review (concluded)
coordinated fiscal support from governments worldwide. The Fed reduced its benchmark interest rate to near 0% and proposed trillions of dollars in COVID-19 support. The Asia-Pacific fixed-income markets recorded positive total returns for the reporting period, driven mainly by local interest rates. In local-currency government bonds, yields in the short end of the curve declined more than those in the long end as monetary policy supported demand for short-dated bonds, while supply pressures to finance the government rescue packages weighed on longer-dated issues. Emerging-market debt outside Asia also experienced difficulty during the reporting period, but with considerable divergence by country. The performance of emerging market local-currency bonds was hampered by currency weakness in several countries.
Outlook
In our view, the short-term global outlook remains fraught with uncertainty. On the political front, former Vice President Joe Biden's victory in the U.S. presidential election in November represents a change in the Executive Branch, but the remaining runoff elections for both of Georgia's U.S. Senate seats in early January 2021, continue to leave the political structure of the Legislative Branch in limbo. The Democratic Party needs both seats to gain a 50-50 split in the upper house, aided by tie-breaking votes from Vice President-elect Kamala Harris, for a technical "sweep" of both houses of Congress. The market views a split Congress as the most likely outcome and, therefore, the continuation of limited stimulus combined with supportive actions from the Fed perpetuating "lower for longer" interest rates. While Biden's initial choices for Cabinet and staff positions point to a politically centrist approach, overall policy implementation will remain uncertain until the Georgia Senate election is decided, as it dictates Biden's ability to push more of his agenda on, among other things, taxes, government-supported energy transition, healthcare, trade and infrastructure.
Regarding the COVID-19 pandemic, news that a vaccine may soon be widely available lifted investor sentiment in late 2020. We expect the
approval and successful distribution of a vaccine to make a meaningful difference in Aberdeen Standard Investments' global economic growth forecasts going forward.
Aberdeen Standard Investments
1 | The MSCI AC World Index tracks the performance of large- and mid-cap stocks across 23 developed-market countries. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
2 | The MSCI AC Asia Pacific ex Japan Index tracks the performance of large and mid-cap stocks across two of three developed-market countries (excluding Japan) and nine emerging markets countries in Asia. |
3 | The S&P 500 Index is an unmanaged index considered representative of the U.S. stock market. |
4 | The Tokyo Stock Price Index (TOPIX) is a market capitalization-weighted index of large- and mid-sized companies listed on the Tokyo Stock Exchange. |
5 | The MSCI Europe Index tracks the performance of large- and mid-cap stocks across 15 developed-market countries in Europe. |
6 | Source: U.S. Department of Commerce, July 2020. |
7 | Source: U.S. Department of Commerce, October 2020. |
8 | The MSCI Emerging Markets Index tracks the performance of large and mid-cap stocks across 24 emerging-market countries. |
9 | The FTSE EPRA/NAREIT Global ex U.S. Index is an unmanaged index considered representative of real estate companies and real estate investment trusts (REITs) outside the U.S. |
10 | The Bloomberg Barclays Global Aggregate Bond Index is a flagship measure of global investment grade debt from 24 local-currency bond markets. |
11 | Companies whose bonds are rated as "investment-grade" usually have a lower chance of defaulting on their debt than those rated as "non-investment grade." These bonds generally are issued by long-established companies with strong balance sheets. Bonds rated BBB or above by major credit rating agencies are considered investment-grade. |
12 | The ICE BofA Global Corporate Index tracks the performance of global investment-grade bonds. |
13 | The ICE BofA Global High Yield Constrained Index tracks the performance of U.S. dollar-, Canadian dollar-, British pound- and euro-denominated below-investment-grade corporate debt publicly issued in the major domestic or eurobond markets. |
2 | 2020 Annual Report |
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (Unaudited)
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (Institutional Class shares net of fees) returned 14.75% for the 12-month period ended October 31, 2020, versus 11.80% return of its benchmark, the MSCI All Country (AC) Asia Pacific ex Japan Index, during the same period.
Asia-Pacific equities, as measured by the MSCI AC Asia Pacific ex Japan Index, garnered double-digit gains over the reporting period. Investor sentiment was buoyant through December 2019, attributable mainly to easing U.S.-China trade tensions. However, the COVID-19 pandemic caused markets to plunge in February and March 2020, as widespread lockdowns crippled business activity. As restrictions eased, the global economy began to recover. This, coupled with sustained large-scale monetary and fiscal policy stimuli from governments worldwide, helped global stock markets to more than offset their losses.
North Asian markets, including China, South Korea and Taiwan, outperformed their peers across Asia over the reporting period as they were among the first to contain the virus effectively. Similarly, the New Zealand market performed well as the government acted swiftly to get the virus under control. In contrast, Southeast Asian markets underperformed during the reporting period. The Singapore market declined on investors' concerns that its open economy would be affected by sluggish global demand due to the pandemic. Indonesia and the Philippines struggled to slow COVID-19 infections. Thailand was hampered by uncertainty caused by a spate of cabinet-level resignations amid political infighting, as well as growing pro-democracy demonstrations.
The Fund outperformed its benchmark, the MSCI AC Asia Pacific ex Japan Index, for the 12-month period ended October 31, 2020, due mainly to strong overall stock selection. Positive performance from the Fund's holdings in Australia, China, Korea and Taiwan offset weakness from the exposure to India and Singapore.
The Fund's underweight allocation relative to the benchmark to Australia bolstered performance for the reporting period. The market lagged the broader Asia-Pacific region as several states suffered multiple waves of infections, and the region's economy entered its first recession in three decades. The lack of exposure to Australian banks benefited Fund performance as they grappled with compliance cost pressures, along with weakening growth and lower interest rates. Shares of the Fund's holding in industrial property firm Goodman Group performed well over the period as the company benefited from strength in its operations. Shares of miner Rio Tinto Ltd. moved higher over the reporting period following a rebound in iron-ore prices, despite the mining giant facing criticism for its destruction of the 46,000-year-old caves of Juukan Gorge.
In China, shares of internet giant Tencent Holdings Ltd. neared all-time highs on robust demand for its mobile games during the lockdowns. China Tourism Group Duty Free Corp. Ltd.'s stock price rose during the reporting period on news of its takeover of Hainan Offshore Duty Free, which strengthened its market leadership. China's wide-ranging stimulus program for the Hainan offshore duty-free market provided a further boost. Shares of Wuxi Biologics (Cayman) Inc. rallied as the contract research organization continued to benefit
from healthy demand for global outsourcing. Liquor-maker Kweichow Moutai Co. Ltd., electrical appliance manufacturer Midea Group Co. Ltd., and e-commerce company Meituan Dianping were also notable contributors to Fund performance for the reporting period. These positive factors outweighed the negative impact of the lack of exposure to e-commerce giant Alibaba Group Holding Ltd., which has a large weighting in the benchmark MSCI AC Asia Pacific ex Japan Index, over most of the period. Alibaba saw healthy growth and enjoyed positive market sentiment towards the planned listing of its digital payments affiliate, Ant Group. We initiated a position in Alibaba near the end of the reporting period.
In India, several holdings were key detractors from Fund performance for the reporting period, including private-sector lenders Housing Development Finance Corp. and Kotak Mahindra Bank Ltd., as well as conglomerate ITC Ltd. A sluggish economy, rising oil prices and social unrest hampered the Indian market during the period.
The Fund's positions in Singapore exchange-listed conglomerate Jardine Strategic Holdings Ltd. and lender Oversea-Chinese Banking Corporation (OCBC) hindered performance for the reporting period. Shares of Jardine Strategic moved lower due to its exposure to Hong Kong amid political unrest in the Special Administrative Region, while OCBC was hampered by the subdued outlook for Singapore's economy. The Fund's holdings in Indonesian automotive conglomerate Astra International Tbk and lender Bank Central Asia Tbk also lagged the overall Asia-Pacific region, as the country struggled with elevated levels of COVID-19 infections.
During the reporting period, we took advantage of market volatility to initiate holdings in what we believed were many high-quality companies, including Meituan Dianping; New Oriental Education & Technology Group Inc., an afterschool K-12 tutoring business, and online classified advertising services provider 58.com Inc. in China; Australia exchange-listed Goodman Group and accounting software company Xero Ltd.; and property developers Ayala Land Inc. and CapitaLand Ltd. in Southeast Asia.
As we remain upbeat about China's long-term potential, especially in areas such as domestic consumption, rising healthcare needs, technology advances and rapid urbanization, we initiated seven new holdings linked to these themes on the mainland and in Hong Kong.
We subscribed to the initial public offering of two Chinese companies, Hangzhou Tigermed Consulting Ltd. and KE Holdings Inc. Clinical contract researcher Hangzhou Tigermed Consulting, the largest company in its industry in China, sought a secondary listing in Hong Kong. We believe that the company could get a boost from rising research spending on innovative drugs in the mainland, given a supportive policy backdrop and low penetration levels. KE Holdings owns brand leaders, property brokerage Lianjia, as well as housing transactions platform Beike. We believe that the company can build on powerful network effects by bringing agents onto the same platform and driving industry consolidation
As previously noted, after careful consideration, we initiated a position in Alibaba in October 2020. While we believe that the company has always been a strong business, the key sticking points in
2020 Annual Report | 3 |
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (Unaudited) (continued)
the past had been our concerns about the quality of its corporate governance, including its opaque corporate structure, the partnership model, and past treatment of minority shareholders. More recently, we have observed changes along several fronts that we viewed positively from a governance perspective.
Chinese sportswear maker Li Ning Co. Ltd. was another new addition to the Fund during the reporting period. Li Ning has started to improve its business after the company revamped its distribution channels and brand portfolio, while refreshing its management. We believe that the company's focus on improving key areas, such as inventory management and the supply chain, should underpin higher margins in the coming years.
We also initiated a position in China Conch Venture Holdings Ltd., which owns leading cement-maker Anhui Conch Cement. The company's environmental business, including waste-management services, has been gaining customers as well. In our view, China Merchants Bank Co. Ltd. has one of the strongest retail franchises in the country, and we believe that it is well-incentivized and commercially run. We like management's prudence, reflected by its priority of asset quality over loan growth amid a slowing economy.
We also established a new position in Macau casino operator Sands China Ltd. The company is a leader in the mass affluent market, which is expected to grow in tandem with the region's increasing wealth. Although international travel will take some time to recover, we believe that rising tourism in mainland China should provide some support.
Elsewhere, we initiated holdings in companies that are focused on emerging structural trends. These included South Korean lithium-ion battery maker Samsung SDI Co. Ltd., which is one of five dominant global players in the electric-vehicle (EV) battery market, given competitors' substantial barriers to entry in the industry. We believe that greater support for clean energy is also likely to boost demand for EV batteries. In our opinion, South Korea-based Samsung Biologics Co. Ltd., the world's largest biopharmaceutical contract manufacturer, is a high-quality business in a fast-growing sector. Though the company entered the industry just eight years ago, it now matches leading players in scale and technological knowledge, with a clear cost advantage, in our view. We believe that the Fund's position in Samsung Biologics complements existing holdings in Wuxi Biologics and Hangzhou Tigermed, which occupy different parts of the same supply chain.
Other initiated positions over the reporting period included Asian Paints Ltd., a leading decorative paint supplier in India that in our opinion benefits from rising demand given its unparalleled distribution network, broad product portfolio and good management; and New Zealand-based Fisher & Paykel Healthcare Corp. Ltd., a maker of medical devices for respiratory care and sleep apnea, which we believe should benefit from higher industry awareness and use of nasal high-flow therapy resulting from the COVID-19 pandemic.
Conversely, during the reporting period, we exited the Fund's positions in several companies in which we now have lower
conviction, including semiconductor manufacturer ASM Pacific Technology Ltd.; hospital operator Bangkok Dusit Medical Services; oil and gas company CNOOC Ltd.; Hangzhou Hikvision Digital technology Co., a supplier of video surveillance equipment; financial services company HDFC Bank Ltd.; hotel management company Huazhu Group Ltd.; conglomerate Keppel Corp.; telecommunications company Taiwan Mobile Co. Ltd., online classified advertising services provider 58.com Inc.; Autohome, Indian manufacturing company Grasim Industries Ltd.; Hang Lung Group, Indian automaker Hero Motocorp Ltd.; Chinese optical products producer Sunny Optical Technology Group Co. Ltd.; and consumer products maker Unilever Indonesia Tbk. Additionally, we exited the Fund's positions in lenders Bank Rakyat Indonesia Tbk, HSBC Holdings plc, Public Bank Berhad, Standard Chartered plc, and United Overseas Bank Ltd.
We remain cautious as we believe that stock markets globally are likely to remain volatile in the near term. Our view comes in light of a resurgence of COVID-19 in parts of the world, alongside uncertainty over the timeline of a potential vaccine. Additionally, tensions between the world's two largest economies – the U.S. and China – have spilled over from trade to other areas such as technology. Given bipartisan U.S. political consensus towards some kind of economic decoupling from China, we believe that this is unlikely to change even after the U.S. presidential election, which was held in early November.
On a more positive note, we anticipate that governments and central banks worldwide will continue to support their economies, which could bolster global financial markets. We also believe that investors' current rotation from growth to value and cyclical stocks should benefit the Fund's performance. In the longer term, the post-COVID-19 world is likely to accelerate existing trends, to which many of the Fund's holdings already have significant exposure. These include Asia's increasing urbanization and infrastructure needs, growing demand for healthcare and wealth management, as well as global shifts towards cloud computing, electric vehicles and 5G networks. We believe that there are promising prospects for high-quality Asian stocks with solid fundamentals that stand to benefit from the Asia-Pacific region's structural growth.
Portfolio Management:
Asian Equities Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
4 | 2020 Annual Report |
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (Unaudited) (concluded)
Risk Considerations
The Fund focuses its investments in the Asia-Pacific region, which may subject the Fund to more volatility and greater risk of loss than geographically diverse mutual funds.
Parts of the Asia-Pacific region may be subject to a greater degree of economic, political and social instability than is the case in the United States and Europe. Some Asian countries can be characterized as emerging markets or newly industrialized and may experience more volatile economic cycles than developed countries.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to risks associated with less stringent accounting and regulatory standards, the impact of currency exchange rate fluctuations, political and economic instability, reduced information about issuers, higher
transaction costs and delayed settlement. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
Equity stocks of small- and mid-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 5 |
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (Unaudited)
Average Annual Total Return (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |
Class A1 | w/o SC | 14.49% | 10.54% | 5.38% |
w/SC2 | 7.94% | 9.25% | 4.76% | |
Class R1,3 | w/o SC | 14.22% | 10.30% | 5.16% |
Institutional Service Class3 | w/o SC | 14.66% | 10.75% | 5.56% |
Institutional Class3 | w/o SC | 14.75% | 10.82% | 5.61% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns before the first offering of Class A and Class R shares (February 28, 2012) are based on the previous performance of the Institutional Class shares. Returns of each class have not been adjusted to reflect the expenses applicable to the respective classes. Excluding the effect of any fee waivers or reimbursements, this performance is substantially similar to what Class A and Class R shares would have produced because all classes invest in the same portfolio of securities. Returns for Class A and Class R shares would only differ to the extent of the difference in expenses of the classes. |
2 | A 5.75% front-end sales charge was deducted. |
3 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* | Minimum Initial Investment |
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Asia-Pacific (ex-Japan) Equity Fund, the Morgan Stanley Capital International All Country (MSCI AC) Asia Pacific ex Japan Index (Net Dividends), MSCI AC Asia Pacific ex Japan Index (Gross Dividends) and the Consumer Price Index (CPI) over a
ten-year period ended October 31, 2020. Effective February 28, 2020, the MSCI AC Asia Pacific ex Japan IndexTM (Net Dividends) replaced the MSCI AC Asia Pacific ex Japan IndexTM (Gross Dividends) as the Fund's primary benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as the net dividend benchmark is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The MSCI AC Asia Pacific ex Japan Index captures large and mid cap representation across 4 of 5 Developed Markets countries (excluding Japan) and 9 Emerging Markets countries in the Asia Pacific region. With 1,257 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Developed Markets countries in the index are: Australia, Hong Kong, New Zealand and Singapore. Emerging Markets countries in the index are: China, India, Indonesia, Korea, Malaysia, Pakistan, the Philippines, Taiwan and Thailand.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
6 | 2020 Annual Report |
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 90.4% | |
Preferred Stocks | 7.9% | |
Short-Term Investment | 2.1% | |
Liabilities in Excess of Other Assets | (0.4%) | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Information Technology | 21.6% | |
Financials | 18.4% | |
Consumer Discretionary | 15.3% | |
Communication Services | 10.8% | |
Health Care | 10.0% | |
Materials | 6.8% | |
Real Estate | 5.9% | |
Consumer Staples | 5.6% | |
Industrials | 3.9% | |
Other | 1.7% | |
100.0% |
Top Holdings* | ||
Tencent Holdings Ltd. | 9.7% | |
Samsung Electronics Co. Ltd. | 7.9% | |
Taiwan Semiconductor Manufacturing Co. Ltd. | 7.7% | |
CSL Ltd. | 3.8% | |
Ping An Insurance Group Co. of China Ltd., H Shares | 2.9% | |
Kweichow Moutai Co. Ltd., A Shares (Stock Connect) | 2.9% | |
AIA Group Ltd. | 2.8% | |
Housing Development Finance Corp. Ltd. | 2.3% | |
Bank Central Asia Tbk PT | 2.3% | |
Aristocrat Leisure Ltd. | 2.1% | |
Other | 55.6% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
China | 35.4% | |
Australia | 10.4% | |
India | 10.3% | |
South Korea | 10.3% | |
Taiwan | 7.7% | |
Hong Kong | 7.1% | |
Singapore | 4.6% | |
Indonesia | 3.9% | |
United States | 2.1% | |
Philippines | 1.9% | |
Other | 6.3% | |
100.0% |
2020 Annual Report | 7 |
Statement of Investments
October 31, 2020
Aberdeen Asia-Pacific (ex-Japan) Equity Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (90.4%) | |||||
AUSTRALIA (10.4%) | |||||
Consumer Discretionary (2.1%) | |||||
Aristocrat Leisure Ltd. | 6,325 | $ | 127,365 | ||
Health Care (5.8%) | |||||
Cochlear Ltd. | 822 | 122,688 | |||
CSL Ltd. | 1,147 | 232,218 | |||
354,906 | |||||
Materials (1.6%) | |||||
BHP Group PLC | 5,057 | 97,966 | |||
Real Estate (0.9%) | |||||
Goodman Group, REIT | 4,100 | 53,067 | |||
633,304 | |||||
CHINA (35.4%) | |||||
Communication Services (9.8%) | |||||
Tencent Holdings Ltd. | 7,800 | 595,964 | |||
Consumer Discretionary (10.5%) | |||||
Alibaba Group Holding Ltd. (a) | 2,400 | 90,945 | |||
China Tourism Group Duty Free Corp. Ltd., A Shares (Stock Connect) (b) | 3,499 | 104,308 | |||
Li Ning Co. Ltd. | 6,500 | 33,878 | |||
Meituan, B Shares (a) | 3,300 | 123,021 | |||
Midea Group Co. Ltd., A Shares (Stock Connect) (b) | 10,499 | 122,526 | |||
New Oriental Education & Technology Group, Inc., ADR (a) | 320 | 51,322 | |||
SAIC Motor Corp. Ltd., A Shares (Stock Connect) (b) | 34,214 | 118,446 | |||
Yum China Holdings, Inc. | 1 | 53 | |||
644,499 | |||||
Consumer Staples (2.9%) | |||||
Kweichow Moutai Co. Ltd., A Shares (Stock Connect) (b) | 700 | 174,893 | |||
Financials (3.3%) | |||||
China Merchants Bank Co. Ltd., H Shares | 5,000 | 26,045 | |||
Ping An Insurance Group Co. of China Ltd., H Shares | 17,000 | 175,774 | |||
201,819 | |||||
Health Care (2.7%) | |||||
Hangzhou Tigermed Consulting Co. Ltd., H Shares (a)(c) | 2,300 | 36,936 | |||
Wuxi Biologics Cayman, Inc. (a)(c) | 4,500 | 126,377 | |||
163,313 | |||||
Industrials (2.1%) | |||||
China Conch Venture Holdings Ltd. | 7,000 | 31,169 | |||
Shanghai International Airport Co. Ltd., A Shares (Stock Connect) (b) | 10,098 | 99,899 | |||
131,068 | |||||
Information Technology (0.8%) | |||||
GDS Holdings Ltd., ADR (a) | 598 | 50,256 |
Shares or Principal Amount | Value | ||||
Materials (0.9%) | |||||
Anhui Conch Cement Co. Ltd., H Shares | 9,000 | $ | 56,299 | ||
Real Estate (2.4%) | |||||
China Resources Land Ltd. | 30,000 | 122,690 | |||
KE Holdings, Inc. ADR (a) | 326 | 22,739 | |||
145,429 | |||||
2,163,540 | |||||
HONG KONG (7.1%) | |||||
Consumer Staples (0.9%) | |||||
Budweiser Brewing Co. APAC Ltd. (c) | 19,100 | 56,328 | |||
Financials (4.7%) | |||||
AIA Group Ltd. | 18,000 | 171,309 | |||
Hong Kong Exchanges & Clearing Ltd. | 2,442 | 117,017 | |||
288,326 | |||||
Industrials (0.5%) | |||||
Jardine Strategic Holdings Ltd. | 1,300 | 28,148 | |||
Real Estate (1.0%) | |||||
Swire Properties Ltd. | 21,700 | 58,232 | |||
431,034 | |||||
INDIA (10.3%) | |||||
Consumer Staples (1.8%) | |||||
Hindustan Unilever Ltd. | 2,089 | 58,514 | |||
ITC Ltd. | 24,356 | 54,478 | |||
112,992 | |||||
Financials (5.1%) | |||||
Housing Development Finance Corp. Ltd. | 5,569 | 144,286 | |||
Kotak Mahindra Bank Ltd. (a) | 5,569 | 116,037 | |||
SBI Life Insurance Co. Ltd. (a)(c) | 5,000 | 51,993 | |||
312,316 | |||||
Information Technology (2.0%) | |||||
Tata Consultancy Services Ltd. | 3,379 | 121,721 | |||
Materials (1.4%) | |||||
Asian Paints Ltd. | 1,150 | 34,277 | |||
UltraTech Cement Ltd. | 790 | 48,477 | |||
82,754 | |||||
629,783 | |||||
INDONESIA (3.9%) | |||||
Consumer Discretionary (1.6%) | |||||
Astra International Tbk PT | 271,600 | 99,181 | |||
Financials (2.3%) | |||||
Bank Central Asia Tbk PT | 70,900 | 139,507 | |||
238,688 | |||||
MACAU (1.1%) | |||||
Consumer Discretionary (1.1%) | |||||
Sands China Ltd. | 18,800 | 65,981 |
See accompanying Notes to Financial Statements.
8 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Asia-Pacific (ex-Japan) Equity Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
NETHERLANDS (1.5%) | |||||
Information Technology (1.5%) | |||||
ASML Holding NV | 252 | $ | 91,174 | ||
NEW ZEALAND (1.9%) | |||||
Health Care (1.0%) | |||||
Fisher & Paykel Healthcare Corp. Ltd. | 2,567 | 59,192 | |||
Information Technology (0.9%) | |||||
Xero Ltd. (a) | 756 | 58,649 | |||
117,841 | |||||
PHILIPPINES (1.9%) | |||||
Financials (0.4%) | |||||
Bank of the Philippine Islands | 17,255 | 26,170 | |||
Industrials (1.3%) | |||||
Ayala Corp. | 5,170 | 81,484 | |||
Real Estate (0.2%) | |||||
Ayala Land, Inc. | 16,300 | 11,097 | |||
118,751 | |||||
SINGAPORE (4.6%) | |||||
Communication Services (1.0%) | |||||
Singapore Telecommunications Ltd. | 44,000 | 65,407 | |||
Financials (2.6%) | |||||
DBS Group Holdings Ltd. | 4,215 | 62,786 | |||
Oversea-Chinese Banking Corp. Ltd. | 15,440 | 95,230 | |||
158,016 | |||||
Real Estate (1.0%) | |||||
CapitaLand Ltd. | 12,833 | 24,149 | |||
City Developments Ltd. | 7,800 | 36,222 | |||
60,371 | |||||
283,794 | |||||
SOUTH KOREA (2.4%) | |||||
Health Care (0.5%) | |||||
Samsung Biologics Co. Ltd. (a)(c) | 46 | 27,797 | |||
Information Technology (0.8%) | |||||
Samsung SDI Co. Ltd. | 129 | 50,818 | |||
Materials (1.1%) | |||||
LG Chem Ltd. | 124 | 67,615 | |||
146,230 | |||||
TAIWAN (7.7%) | |||||
Information Technology (7.7%) | |||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 31,000 | 469,020 | |||
THAILAND (1.3%) | |||||
Materials (0.9%) | |||||
Siam Cement PCL (The), Foreign Shares | 4,900 | 53,095 |
Shares or Principal Amount | Value | ||||
Real Estate (0.4%) | |||||
Central Pattana PCL, Foreign Shares | 21,200 | $ | 26,146 | ||
79,241 | |||||
UNITED KINGDOM (0.9%) | |||||
Materials (0.9%) | |||||
Rio Tinto PLC – London Listing | 931 | 52,659 | |||
Total Common Stocks | 5,521,040 | ||||
PREFERRED STOCKS (7.9%) | |||||
SOUTH KOREA (7.9%) | |||||
Information Technology (7.9%) | |||||
Samsung Electronics Co. Ltd. | 10,809 | 480,837 | |||
Total Preferred Stocks | 480,837 | ||||
SHORT-TERM INVESTMENT (2.1%) | |||||
UNITED STATES (2.1%) | |||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (d) | 127,059 | 127,059 | |||
Total Short-Term Investment | 127,059 | ||||
Total Investments (Cost $5,032,507) (e)—100.4% | 6,128,936 | ||||
Liabilities in Excess of Other Assets—(0.4)% | (23,421) | ||||
Net Assets—100.0% | $ | 6,105,515 |
(a) | Non-income producing security. |
(b) | China A Shares. These shares are issued in local currency, traded in the local stock markets and are held through either a Qualified Foreign Institutional Investor (QFII) license or the Shanghai or Shenzhen Hong-Kong Stock Connect program. |
(c) | Denotes a security issued under Regulation S or Rule 144A. |
(d) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(e) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
2020 Annual Report | 9 |
Aberdeen China A Share Equity Fund (Unaudited)
Aberdeen China A Share Equity Fund (Institutional Class shares net of fees) returned 38.55% for the 12-month period ended October 31, 2020, versus the 32.35% return of its benchmark, the Morgan Stanley Capital International (MSCI) China A Onshore Index (Net Dividends), during the same period.
Chinese equities, as measured by the MSCI China A Onshore Index (Net Dividends), returned 32.35% for the 12-month period ended October 31, 2020, outperforming most other equity markets globally. Stock prices initially rallied on monetary easing from central banks worldwide, progress in U.S.-China trade talks, and the rollout of 5G telecommunications networks. However, a nationwide lockdown in China amid the coronavirus (COVID-19) pandemic abruptly curtailed the gains in early 2020. The Chinese government implemented aggressive monetary and fiscal stimuli in an effort to buffer the fallout. The government injected cheaper medium-term funds and directed the financial sector to help industries affected by the pandemic, and accelerated approvals for policies to develop smart infrastructure.
China's stock market rebounded when it appeared that concerted efforts to stem the spread of COVID-19 infections were effective, allowing factory and construction work to gradually resume. Booming retail investor interest fueled by easy credit, positive earnings surprises, and better-than-expected domestic economic data, buoyed share prices. The revamp of the Shanghai Stock Exchange Composite Index,1 which led institutions to adjust their holdings in anticipation of the change, also added to the optimism in the market. Nonetheless, investors' concerns over the ban on Chinese network equipment giant Huawei Technologies Co., Ltd. (which the Fund did not hold during the reporting period) from the U.S. technology supply chain capped gains. Investors worried that the move would slow 5G network adoption and hinder smartphone sales.
China has been the only major economy globally expecting economic expansion thus far in 2020, helped by stringent measures to suppress the coronavirus. Furthermore, we believe that the inclusion of its sovereign debt in the Financial Times Stock Exchange (FTSE) World Government Bond Index2 could boost China's fiscal position via more global capital. In policy-related matters, we view the Chinese government's prioritization of employment over growth targets as a positive step.
The Fund outperformed its benchmark, the MSCI China A Onshore Index, over the 12-month period ended October 31, 2020, due primarily to strong stock selection in the consumer discretionary, consumer staples and healthcare sectors. Conversely, the Fund's overweight allocation relative to the benchmark to the insurance segment of the financials sector, as well as underweight positions in the information technology and industrials sectors, had a negative impact on performance for the reporting period. In our view, the corporate results season for the quarter ended September 30, 2020, offered more clarity on companies' post-pandemic outlooks. Investors appeared to focus more on fundamentals, leading to divergent share-price performances over the reporting period.
Regarding the Fund's positions in the consumer staples sector, product price hikes by baijiu (alcoholic beverage) makers Kweichow Moutai Co Ltd. and Wuliangye Yibin Co Ltd. bolstered performance for the reporting period. In the retail segment of the consumer discretionary sector, China Tourism Group Duty Free Co Ltd. (CTGDF) contributed to Fund performance due to the government's fiscal policy support that provided greater flexibility and incentive for duty-free purchases. CTGDF became the world's largest duty-free retailer after the pandemic broke out as domestic tourism was resilient in the face of the travel slump outside China. About half of CTGDF's revenues for the third quarter of its 2020 fiscal year were driven by favorable policies in the province of Hainan, a major hub for China's duty-free retail.
The Fund's holdings in the automobile segment of the consumer discretionary sector performed well during the reporting period, in contrast to Europe and the U.S., where the COVID-19 pandemic continued to hurt demand. New-energy vehicle sales surged to a record high, helped by public investments in the electric-car ecosystem and the technology shift adopted by automakers. The positive investor sentiment boosted shares of impact-resistant glassmaker Fuyao Glass Industry Group Co. Ltd. However, the lack of exposure to lithium-ion battery giant Contemporary Amperex Technology Co, Ltd. and automaker BYD Co. Ltd. had a negative impact on Fund performance for the reporting period.
Among the Fund's healthcare holdings, Aier Eye Hospital Group Co. Ltd.'s earnings exceeded our expectations over the reporting period. Higher-value services supported the hospital chain operator's margins, mitigating lower occupancy rates caused by COVID-19 quarantines and restrictions to cross-border travel. In our view, the company's positive outlook is supported by the aging population in China, rising living standards, and government policies to improve the accessibility and standards of drugs and healthcare. Additionally, the holding in Hangzhou Tigermed Consulting Co. Ltd. contributed to Fund performance amid firm demand for third-party clinical research.
Conversely, the Fund's holding in Ping An Insurance Group Co of China Ltd detracted from performance for the reporting period due to investors' concerns on provisions made for losses on its credit guarantees. Moreover, sluggish sales and weaker bond yields following the COVID-19 outbreak hampered the insurance sector in China. This also had a negative impact on the Fund's holding in China Life Insurance Co Ltd. On a positive note, we believe that the lifting of caps that previously limited assets in which insurers were allowed to invest was a breakthrough. We remain upbeat on Chinese insurers as the sector benefits from rising wealth levels and low business penetration rates.
The Fund's technology services holdings, including leading network security provider Venustech Group Inc., surrendered some gains achieved earlier in the reporting period, along with a decline in stock prices in the sector globally. Among semiconductor stocks, the absence of a position in LONGi Green Energy Technology Co. Ltd. weighed on Fund performance for the reporting period, as the maker
1 | The Shanghai Stock Exchange Composite Index tracks the performance of stocks that trade on the Shanghai Stock Exchange. |
2 | The FTSE World Government Bond Index tracks the performance of fixed-rate, local currency, investment-grade sovereign bonds from more than 20 countries globally. |
10 | 2020 Annual Report |
Aberdeen China A Share Equity Fund (Unaudited) (continued)
of silicon wafers for solar energy was boosted by record shipments. On a brighter note, investors bruised by U.S. sanctions on shipments of critical components to China's technology giants rotated into Fund holding Hangzhou Hikvision Digital Technology Co, Ltd., as the surveillance solutions provider operates independently of the U.S. supply chain.
In the transportation subsector of the industrials sector, the suspension of international flights had a negative impact on the Fund's holdings in Shanghai International Airport Co. Ltd. and Shenzhen Airport Co Ltd. over the reporting period. Elsewhere, the lack of exposure to U.S.-based technology giant Apple Inc. supplier Shenzhen Luxshare Precision Industry Co, Ltd. weighed on Fund performance, as the maker of Apple Airpods emerged as a contender to Taiwanese electronics company Foxconn Technology Group (which the Fund does not hold) for Apple's business. The Fund has no position in Shenzhen Luxshare Precision Industry Co, Ltd. because we believe that there are alternatives elsewhere which we find more attractive, in terms of both valuation and quality.
Regarding notable portfolio activity over the reporting period, we sought opportunities in companies that in our view stand to benefit from positive demand drivers for renewable energy and related government policies. Consequently, we initiated a holding in Yunnan Energy New Material Co. Ltd., the world's largest maker of lithium-ion battery separators. We believe that the Chinese government's support for the use of new-energy vehicles will underpin demand for lithium-ion batteries.
We also established new positions in Centre Testing International Group Co. Ltd.; Chacha Food Co. Ltd.; Glodon Co. Ltd.; Guangzhou Baiyun International Airport Co. Ltd.; Nari Technology Co. Ltd.; Shenzhen Mindray Bio-Medical Electronics Co. Ltd.; and Shanghai M&G Stationery Co. Ltd.
Centre Testing is the largest private testing, inspection and certification company in China. The company offers testing services to a variety of downstream industries, including consumer goods, as well as environment and industrial products. Chacha Food is China's largest producer of nuts. We believe that the rising health-consciousness of Chinese consumers is driving the company's rapid growth. Glodon is a leading software provider for construction budgeting that has benefited from the Chinese government's push for infrastructure development. The company is expanding into the growing markets for cloud-based solutions and construction management. The Guangzhou Baiyun International Airport sits in one of China's three international aviation hubs, along with those in Beijing and Shanghai. We believe that Guangzhou Baiyun International Airport Co. Ltd. stands to benefit from a recovery in domestic air traffic and the expansion of its duty-free segment. Power grid equipment maker Nari Technology was bolstered over the reporting period by higher infrastructure spending and upgrading of grid lines. Mindray Bio-Medical is a leading medical device maker with a premium brand. The company has an established distribution network and, in our view, a solid commitment to research and development. We believe that demand for its products will increase with widespread medical equipment upgrades and substitutions for
imported medical devices. Shanghai M&G Stationery is a popular brand for the younger generation and a key supplier to offices.
Conversely, we exited the Fund's positions in Angel Yeast Co. Ltd.; Beijing Tongrentang Co. Ltd.; China World Trade Center Co. Ltd.; Ningbo Zhoushan Port Co. Ltd.; and PetroChina Co. Ltd. to fund what we believed were more compelling opportunities.
While macroeconomic indicators show that China's economic growth is recovering, we remain conscious of the risk of further waves of COVID-19 infections. Furthermore, we believe that relations with the U.S. will remain frayed even under a Biden presidential administration. Nevertheless, we are optimistic about the outlook for China A-shares. Key structural growth drivers, such as the adoption of cloud applications, 5G networks and artificial intelligence, are still intact. China's government is also focusing on self-sufficiency in technology development and environmental restoration.
We remain focused on China's domestic economy, which in our view should be somewhat shielded from any full-blown conflict with the U.S. Over the long term, we believe that domestic consumption and a rising middle class will continue to propel economic growth, as China weans itself from reliance on export revenues. Notably, in our opinion, higher disposable income is spurring demand for healthcare products, wealth management services and insurance. Therefore, we remain convinced that the most effective way to invest in China sustainably is through exposure to these themes. We believe that, through the COVID-19 pandemic, many businesses have been changed; some for better, others for worse. In our view, this accentuates the importance of bottom-up analysis and stock selection. We believe that our strategy of identifying what we view as well-managed businesses with solid fundamentals and the quality to tap into these opportunities should enhance the Fund's performance.
Portfolio Management:
Asian Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
The Fund focuses its investments in China and Hong Kong, which may subject the Fund to more volatility and greater risk of loss than geographically diverse mutual funds.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to
2020 Annual Report | 11 |
Aberdeen China A Share Equity Fund (Unaudited) (concluded)
different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
Additional risks associated with investments in China and Hong Kong include exposure to currency fluctuations, less liquidity, expropriation, confiscatory taxation, nationalization, exchange control regulations (including currency blockage), trading halts, imposition of tariffs, limitations on repatriation and differing legal standards. Trading in China A Shares through Stock Connect and the QFII Programs involves additional risks
Equity stocks of small- and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
12 | 2020 Annual Report |
Aberdeen China A Share Equity Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |
Class A | w/o SC | 38.11% | 15.07% | 6.41% |
w/SC2 | 30.18% | 13.72% | 5.79% | |
Class C | w/o SC | 37.13% | 14.30% | 5.67% |
w/SC3 | 36.13% | 14.30% | 5.67% | |
Class R4 | w/o SC | 37.68% | 14.69% | 6.05% |
Institutional Service Class4 | w/o SC | 38.37% | 15.33% | 6.67% |
Institutional Class4 | w/o SC | 38.55% | 15.46% | 6.72% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | The Fund changed its investment strategies effective June 13, 2019. Performance information for periods prior to June 13, 2019 does not reflect the current investment strategy. In connection with the change in investment strategy, the Fund changed its name from Aberdeen China Opportunities Fund to Aberdeen China A Share Equity Fund. |
2 | A 5.75% front-end sales charge was deducted. |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
4 | Not subject to any sales charges. |
Performance of a $10,000 Investment* (as of October 31, 2020)
* Minimum Initial Investment
Comparative performance of $10,000 invested in Class A shares of the Aberdeen China A Share Equity Fund, MSCI China A (Onshore)
Index (Net Dividends), MSCI China A (Onshore) Index (Gross Dividends), MSCI Zhong Hua Index (Gross Dividends) and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Effective February 28, 2020, the MSCI China A (Onshore) Index (Net Dividends) replaced the MSCI China A (Onshore) Index (Gross Dividends) as the Fund's primary benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as the net dividend benchmark is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities.
The MSCI China A (Onshore) Index captures large and mid cap representation across China securities listed on the Shanghai and Shenzhen exchanges
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
2020 Annual Report | 13 |
Aberdeen China A Share Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 87.1% | |
Short-Term Investment | 9.1% | |
Exchange-Traded Funds | 3.0% | |
Other Assets in Excess of Liabilities | 0.8% | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Consumer Staples | 17.7% | |
Financials | 17.2% | |
Consumer Discretionary | 15.0% | |
Health Care | 11.0% | |
Information Technology | 10.4% | |
Industrials | 8.5% | |
Materials | 4.4% | |
Real Estate | 3.0% | |
Energy | –% | |
Other | 12.8% | |
100.0% |
Amounts listed as "–" are 0% or round to 0%.
Top Holdings* | ||
Kweichow Moutai Co. Ltd., A Shares (Stock Connect) | 6.7% | |
Ping An Insurance Group Co. of China Ltd., A Shares | 6.4% | |
China Tourism Group Duty Free Corp. Ltd., A Shares (Stock Connect) | 5.9% | |
Aier Eye Hospital Group Co. Ltd., A Shares | 5.1% | |
Hangzhou Hikvision Digital Technology Co. Ltd., A Shares (Stock Connect) | 4.5% | |
Wuliangye Yibin Co. Ltd., A Shares | 4.4% | |
Midea Group Co. Ltd., A Shares (Stock Connect) | 4.2% | |
China Merchants Bank Co. Ltd., A Shares | 3.9% | |
Foshan Haitian Flavouring & Food Co. Ltd., A Shares | 3.3% | |
Hangzhou Tigermed Consulting Co. Ltd., A Shares | 3.0% | |
Other | 52.6% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
China | 89.7% | |
United States | 9.5% | |
Other | 0.8% | |
100.0% |
14 | 2020 Annual Report |
Statement of Investments
October 31, 2020
Aberdeen China A Share Equity Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (87.1%) | |||||
CHINA (87.1%) | |||||
Consumer Discretionary (15.0%) | |||||
China Tourism Group Duty Free Corp. Ltd., A Shares (Stock Connect) (a) | 40,223 | $ | 1,199,756 | ||
Fuyao Glass Industry Group Co. Ltd., A Shares (a) | 68,641 | 385,057 | |||
Haier Smart Home Co. Ltd., A Shares (a) | 75,400 | 280,716 | |||
Hangzhou Robam Appliances Co. Ltd., A Shares (a) | 19,815 | 108,539 | |||
Midea Group Co. Ltd., A Shares (Stock Connect) (a) | 73,042 | 852,892 | |||
SAIC Motor Corp. Ltd., A Shares (Stock Connect) (a) | 62,000 | 214,760 | |||
3,041,720 | |||||
Consumer Staples (17.7%) | |||||
Chacha Food Co. Ltd., A Shares (a) | 19,900 | 176,925 | |||
Foshan Haitian Flavouring & Food Co. Ltd., A Shares (a) | 28,090 | 672,672 | |||
Inner Mongolia Yili Industrial Group Co. Ltd., A Shares (a) | 40,800 | 242,592 | |||
Kweichow Moutai Co. Ltd., A Shares (Stock Connect) (a) | 5,400 | 1,349,929 | |||
Wuliangye Yibin Co. Ltd., A Shares (a) | 24,237 | 886,659 | |||
Yonghui Superstores Co. Ltd., A Shares (a) | 220,900 | 258,185 | |||
3,586,962 | |||||
Energy (0.0%) | |||||
G3 Exploration Ltd. (b)(c) | 53,000 | – | |||
Financials (17.2%) | |||||
Bank of Ningbo Co. Ltd., A Shares (a) | 81,915 | 416,448 | |||
China Construction Bank Corp., Class H | 77,000 | 53,062 | |||
China Life Insurance Co. Ltd., H Shares | 177,000 | 386,201 | |||
China Merchants Bank Co. Ltd., A Shares (a) | 133,932 | 797,457 | |||
Industrial & Commercial Bank of China Ltd., Class H | 32,000 | 18,171 | |||
Ping An Bank Co. Ltd., A Shares (a) | 190,300 | 505,291 | |||
Ping An Insurance Group Co. of China Ltd., A Shares (a) | 112,033 | 1,304,523 | |||
3,481,153 | |||||
Health Care (11.0%) | |||||
Aier Eye Hospital Group Co. Ltd., A Shares (a) | 110,515 | 1,030,012 | |||
China Resources Sanjiu Medical & Pharmaceutical Co. Ltd., A Shares (a) | 31,600 | 128,037 | |||
Hangzhou Tigermed Consulting Co. Ltd., A Shares (a) | 32,908 | 611,580 | |||
Hangzhou Tigermed Consulting Co. Ltd., H Shares (b)(d) | 700 | 11,241 | |||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., A Shares (a) | 7,800 | 451,763 | |||
2,232,633 | |||||
Industrials (8.5%) | |||||
Centre Testing International Group Co. Ltd., A Shares (a) | 96,294 | 388,516 | |||
Guangzhou Baiyun International Airport Co. Ltd., A Shares (a) | 94,600 | 177,765 | |||
NARI Technology Co. Ltd., A Shares (Stock Connect) (a) | 92,100 | 286,370 |
Shares or Principal Amount | Value | ||||
Shanghai International Airport Co. Ltd., A Shares (Stock Connect) (a) | 49,410 | $ | 489,083 | ||
Shanghai M&G Stationery, Inc., A Shares (a) | 25,900 | 311,307 | |||
Shenzhen Airport Co. Ltd., A Shares (Stock Connect) (a) | 58,101 | 69,438 | |||
1,722,479 | |||||
Information Technology (10.4%) | |||||
Beijing Sinnet Technology Co. Ltd., A Shares (a) | 137,000 | 391,652 | |||
Glodon Co. Ltd., A Shares (a) | 21,161 | 225,423 | |||
Hangzhou Hikvision Digital Technology Co. Ltd., A Shares (Stock Connect) (a) | 134,150 | 902,247 | |||
Venustech Group, Inc., A Shares (a) | 124,200 | 574,894 | |||
2,094,216 | |||||
Materials (4.4%) | |||||
Anhui Conch Cement Co. Ltd., A Shares (a) | 75,700 | 576,784 | |||
Yunnan Energy New Material Co. Ltd., A Shares (a) | 20,900 | 312,776 | |||
889,560 | |||||
Real Estate (2.9%) | |||||
China Vanke Co. Ltd., A Shares (a) | 143,873 | 593,627 | |||
17,642,350 | |||||
Total Common Stocks | 17,642,350 | ||||
EXCHANGE-TRADED FUNDS (3.0%) | |||||
CHINA (2.6%) | |||||
Xtrackers Harvest CSI 300 China A Shares ETF (a) | 14,870 | 532,495 | |||
UNITED STATES (0.4%) | |||||
KraneShares Bosera MSCI China A Shares ETF | 1,659 | 67,753 | |||
Total Exchange-Traded Funds | 600,248 | ||||
SHORT-TERM INVESTMENT (9.1%) | |||||
UNITED STATES (9.1%) | |||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (e) | 1,832,781 | 1,832,781 | |||
1,832,781 | |||||
Total Short-Term Investment | 1,832,781 | ||||
Total Investments (Cost $16,055,080) (f)—99.2% | 20,075,379 | ||||
Other Assets in Excess of Liabilities—0.8% | 171,938 | ||||
Net Assets—100.0% | $20,247,317 |
(a) | China A Shares. These shares are issued in local currency, traded in the local stock markets and are held through either a Qualified Foreign Institutional Investor (QFII) license or the Shanghai or Shenzhen Hong-Kong Stock Connect program. |
(b) | Non-income producing security. |
(c) | Trading halted. Fair Value is determined pursuant to procedures approved by the Fund's Board of Trustees. See Note 2(a) of the accompanying Notes to Financial Statements. |
(d) | Denotes a security issued under Regulation S or Rule 144A. |
(e) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(f) | See accompanying Notes to Statements of Investments for tax unrealized appreciation/(depreciation) of securities. |
ETF | Exchange-Traded Fund |
See accompanying Notes to Financial Statements.
2020 Annual Report | 15 |
Aberdeen Dynamic Dividend Fund (Unaudited)
Aberdeen Dynamic Dividend Fund (Institutional Class shares net of fees) returned -1.77% for the 12-month period ended October 31, 2020, versus the 4.89% return of its benchmark, the Morgan Stanley Capital International (MSCI) All Country (AC) World Index (Net Dividends), during the same period.
Global equities posted modest gains amid significant market volatility over the 12-month period ended October 31, 2020. Early in the reporting period, trade tensions between the U.S. and China drove global equity markets, with the U.S. implementing punitive tariffs as leverage in renegotiations. Thereafter, the 2019 calendar year ended on a positive note as both countries seemingly set aside their differences and worked toward a preliminary trade agreement.
The start of 2020, however, brought fresh woes in the form of the COVID-19 pandemic, which spread rapidly from China to nearly all parts of the globe. This led many countries to shut their borders and impose lockdowns in an effort to limit contagion. As business activity ground to a halt, governments and central banks worldwide used fiscal and monetary tools in a bid to support flagging economic growth in their countries. U.S. lawmakers enacted the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package, while the U.S. Federal Reserve cut its benchmark interest rate to a range of 0%-0.25% and revised its approach to managing inflation, signaling low interest rates for a protracted period. Across the Atlantic, the European Union agreed to raise US$857 billion from financial markets in an effort to support member states and sectors most affected by the pandemic, while the European Central Bank extended its US$1.6 trillion emergency bond-purchase program to mid-2021.
As COVID-19 infection rates ebbed in the summer of 2020, governments worldwide eased social-distancing measures, eager to allow their economies some respite. However, a resurgence of infections, particularly in the U.S. and Europe, subsequently forced many nations to reimpose movement restrictions. This weighed heavily on global equity markets toward the end of the reporting period.
At the individual stock level, key detractors from the Fund's relative performance during the reporting period included a position in British movie theater chain operator Cineworld Group plc, which is not a constituent of the benchmark MSCI AC World Index; the absence of a holding in e-commerce giant Amazon.com Inc.; and an overweight position in UK exchange-listed lender Standard Chartered plc, which offers a broad array of banking services, primarily in emerging-market countries. Cineworld Group operates movie theaters with 9,500 screens worldwide. With movie theatres shutting down due to COVID-19, investors feared the company would experience a liquidity crisis. The company still needs covenant* waivers for its debt and movie studios are delaying the release of first-run films. In addition, after some of its theaters opened, they closed again shortly thereafter due to a lack of content. The lack of exposure to Amazon.com Inc. weighed on Fund performance as its shares rallied sharply as
COVID-19 accelerated growth of Amazon Prime. The pandemic drove Amazon Prime users to explore Prime perks (video, music, Twitch, photo storage, etc.) and accelerated the shift to online buying. Shares of Standard Chartered moved lower over the reporting period due to the combination of falling interest rates and strained U.S.-China trade relations. We exited the Fund's position in Standard Chartered during the reporting period.
Conversely, the largest positive contributors to Fund performance during the reporting period included overweight positions in LG Chem Ltd., one of the largest chemical companies in the world; NortonLifeLock, Inc., a U.S.-based cybersecurity services company; and FedEx Corp., a U.S.-based delivery-services company. LG Chem's electric vehicle (EV) battery business turned profitable in 2020, given strong demand. The company's chemical business also performed well given favorable spreads. In addition, LG Chem approved a spin-off of its energy-solutions company. NortonLifeLock's share price rallied after the completion of the sale of its enterprise security business to Broadcom (which the Fund does not hold) in November 2019. The company used a portion of the proceeds to pay a large special dividend in January 2020. Furthermore, the current environment of employees working from home benefited NortonLifeLock's anti-virus products. We sold the Fund's shares in the company during the reporting period to capture profits. Shares of FedEx rallied as the company reported strong results for the first quarter of its 2021 fiscal year, and FedEx has benefited from elevated e-commerce activity amid the COVID-19 pandemic. Additionally, operating leverage from its express business was strong and it experienced robust revenue growth in its ground business given tight capacity in the domestic package market. Furthermore, investors are anticipating a record peak holiday season.
Regarding the use of derivatives during the reporting period, we continued to hedge a portion of the Fund's currency exposure to the euro.
The world remains in a state of uncertainty as the approaching winter in the Northern Hemisphere coincides with fresh waves of COVID-19 infections in Europe and the U.S. Many governments globally have reimposed social-distancing measures to contain the virus, delaying prospects for a full economic recovery from the pandemic. To compound the matter, relations between the U.S. and China continue to deteriorate, with the trajectory unlikely to be altered much by the recent U.S. presidential election, in our view. On a more positive note, we believe that the continued infusion of massive monetary and fiscal stimuli to economies worldwide should continue to support equity prices. In addition, the possibility of an approval and distribution of a vaccine has buoyed investor sentiment.
From a Fund perspective, we are giving serious consideration to two key aspects: how normalized earnings will look as we move forward in this crisis, and whether companies are well-positioned for a post-COVID-19 world. In such times of uncertainty, we believe that sound bottom-up analysis and stock-selection strategies are even more
* | A covenant is a financial agreement containing provisions that certain activities will or will not be carried out or that certain thresholds will be met. |
16 | 2020 Annual Report |
Aberdeen Dynamic Dividend Fund (Unaudited) (concluded)
crucial. In our opinion, we have the advantage of a solid proprietary-research platform, along with a well-resourced and experienced team that has navigated many past crises. Amid the current market volatility, we will continue to seek what we believe are good-quality companies at attractive valuations.
Portfolio Management:
Global Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
There is no guarantee that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The Fund's emphasis on dividend paying stocks could cause the Fund to underperform similar funds that invest without consideration of a
company's track record of paying dividends or ability to pay dividends in the future.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Equity stocks of small- and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 17 |
Aberdeen Dynamic Dividend Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |
Class A | w/o SC | (2.28%) | 5.94% | N.A. |
w/SC2 | (7.81%) | 4.68% | N.A. | |
Institutional Class3 | w/o SC | (1.77%) | 6.26% | 5.99% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns prior to May 7, 2018 reflect the performance of a predecessor fund (the "Predecessor Fund"). Returns of the Predecessor Fund have not been adjusted to reflect the expenses applicable to the respective classes. The Fund and the Predecessor Fund have substantially similar investment objectives and strategies. Please consult the Fund's prospectus for more detail. |
2 | A 5.75% front-end sales charge was deducted. |
3 | Not subject to any sales charges. |
4 | Predecessor Fund commenced operations on September 22, 2003. The first offering of Class A shares was December 30, 2011. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* | Minimum Initial Investment |
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Dynamic Dividend Fund, Morgan Stanley Capital International All Country World Index (MSCI ACWI) (Net Dividends), MSCI ACWI (Gross Dividends) and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Effective February 28, 2020, MSCI All Country World Index (Net Dividends)
replaced MSCI All Country World Index (Gross Dividends) as the Fund's primary benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as the net dividend benchmark is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses or sales charges. Investors cannot invest directly in market indexes.
MSCI ACWI captures large and mid cap representation across 23 Developed Markets (DM) and 26 Emerging Markets (EM) countries. With 3,000 constituents, the index covers approximately 85% of the global investable equity opportunity set. DM countries in the Index are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the UK and the US. EM countries in the Index are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
18 | 2020 Annual Report |
Aberdeen Dynamic Dividend Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 97.0% | |
Preferred Stocks | 1.8% | |
Short-Term Investment | 0.7% | |
Other Assets in Excess of Liabilities | 0.5% | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Information Technology | 17.1% | |
Financials | 14.0% | |
Health Care | 13.0% | |
Industrials | 9.7% | |
Consumer Discretionary | 9.3% | |
Communication Services | 9.3% | |
Consumer Staples | 8.1% | |
Utilities | 6.1% | |
Materials | 5.4% | |
Energy | 3.5% | |
Other | 4.5% | |
100.0% |
Top Holdings* | ||
Apple, Inc. | 3.1% | |
Microsoft Corp. | 2.2% | |
Samsung Electronics Co. Ltd. | 1.8% | |
FedEx Corp. | 1.8% | |
Lowe's Cos., Inc. | 1.7% | |
GLP J-REIT | 1.6% | |
RWE AG | 1.6% | |
Tower Bersama Infrastructure Tbk PT | 1.6% | |
Target Corp. | 1.6% | |
AbbVie, Inc. | 1.6% | |
Other | 81.4% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
United States | 45.0% | |
United Kingdom | 6.1% | |
Germany | 5.5% | |
France | 5.4% | |
Switzerland | 5.2% | |
China | 3.7% | |
Japan | 3.5% | |
Netherlands | 3.5% | |
South Korea | 2.8% | |
Canada | 2.8% | |
Other | 16.5% | |
100.0% |
2020 Annual Report | 19 |
Statement of Investments
October 31, 2020
Aberdeen Dynamic Dividend Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (97.0%) | |||||
AUSTRALIA (1.0%) | |||||
Materials (1.0%) | |||||
Rio Tinto PLC, ADR | 18,158 | $ | 1,030,830 | ||
BRAZIL (2.7%) | |||||
Industrials (1.6%) | |||||
CCR SA | 559,200 | 1,087,614 | |||
Cosan Logistica SA (a) | 196,400 | 561,001 | |||
1,648,615 | |||||
Materials (1.1%) | |||||
Vale SA, ADR | 105,000 | 1,109,850 | |||
2,758,465 | |||||
CANADA (2.8%) | |||||
Energy (1.5%) | |||||
Enbridge, Inc. | 56,900 | 1,568,164 | |||
Materials (1.3%) | |||||
Barrick Gold Corp. | 50,176 | 1,341,205 | |||
2,909,369 | |||||
CHINA (3.7%) | |||||
Communication Services (1.2%) | |||||
Tencent Holdings Ltd. | 15,700 | 1,199,568 | |||
Consumer Discretionary (1.3%) | |||||
Shenzhou International Group Holdings Ltd. | 80,700 | 1,404,129 | |||
Financials (1.2%) | |||||
Ping An Insurance Group Co. of China Ltd., H Shares | 124,500 | 1,287,289 | |||
3,890,986 | |||||
FINLAND (0.8%) | |||||
Information Technology (0.8%) | |||||
Nokia OYJ (a) | 261,600 | 881,905 | |||
FRANCE (5.4%) | |||||
Consumer Discretionary (1.1%) | |||||
LVMH Moet Hennessy Louis Vuitton SE | 2,500 | 1,171,869 | |||
Energy (0.9%) | |||||
TOTAL SE | 32,000 | 970,560 | |||
Financials (1.2%) | |||||
AXA SA | 73,900 | 1,186,782 | |||
Industrials (2.2%) | |||||
Alstom SA (a) | 25,694 | 1,147,993 | |||
Schneider Electric SE | 9,400 | 1,142,160 | |||
2,290,153 | |||||
5,619,364 |
Shares or Principal Amount | Value | ||||
GERMANY (5.5%) | |||||
Financials (1.3%) | |||||
Deutsche Boerse AG | 8,800 | $ | 1,296,711 | ||
Health Care (0.7%) | |||||
Bayer AG | 16,100 | 756,547 | |||
Information Technology (0.9%) | |||||
Infineon Technologies AG | 33,900 | 943,816 | |||
Materials (1.0%) | |||||
Linde PLC (a) | 4,700 | 1,030,075 | |||
Utilities (1.6%) | |||||
RWE AG | 45,000 | 1,665,349 | |||
5,692,498 | |||||
HONG KONG (1.3%) | |||||
Financials (1.3%) | |||||
Hong Kong Exchanges & Clearing Ltd. | 28,400 | 1,360,891 | |||
INDONESIA (2.6%) | |||||
Communication Services (2.6%) | |||||
Telekomunikasi Indonesia Persero Tbk PT | 6,062,000 | 1,073,337 | |||
Tower Bersama Infrastructure Tbk PT | 16,386,000 | 1,657,383 | |||
2,730,720 | |||||
ITALY (1.2%) | |||||
Utilities (1.2%) | |||||
Enel SpA | 155,000 | 1,232,328 | |||
JAPAN (3.5%) | |||||
Financials (1.0%) | |||||
Mitsubishi UFJ Financial Group, Inc. | 263,900 | 1,040,269 | |||
Health Care (0.9%) | |||||
Shionogi & Co. Ltd. | 20,200 | 952,833 | |||
Real Estate (1.6%) | |||||
GLP J-REIT | 1,100 | 1,695,812 | |||
3,688,914 | |||||
MEXICO (0.9%) | |||||
Utilities (0.9%) | |||||
Infraestructura Energetica Nova SAB de CV | 276,700 | 925,138 | |||
NETHERLANDS (3.5%) | |||||
Consumer Staples (2.4%) | |||||
Heineken NV | 15,600 | 1,380,874 | |||
Unilever NV | 19,600 | 1,104,925 | |||
2,485,799 | |||||
Information Technology (1.1%) | |||||
ASML Holding NV | 3,300 | 1,193,949 | |||
3,679,748 |
See accompanying Notes to Financial Statements.
20 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Dynamic Dividend Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
NORWAY (1.1%) | |||||
Communication Services (1.1%) | |||||
Telenor ASA | 75,800 | $ | 1,171,283 | ||
SINGAPORE (1.0%) | |||||
Financials (1.0%) | |||||
Oversea-Chinese Banking Corp. Ltd. | 168,155 | 1,037,137 | |||
SOUTH KOREA (1.0%) | |||||
Materials (1.0%) | |||||
LG Chem Ltd. | 1,900 | 1,036,034 | |||
SPAIN (1.0%) | |||||
Industrials (1.0%) | |||||
Ferrovial SA | 47,112 | 1,020,330 | |||
SWEDEN (0.9%) | |||||
Consumer Staples (0.9%) | |||||
Essity AB, Class B | 32,200 | 931,974 | |||
SWITZERLAND (5.2%) | |||||
Consumer Staples (1.4%) | |||||
Nestle SA | 13,200 | 1,484,708 | |||
Financials (1.3%) | |||||
Zurich Insurance Group AG | 4,000 | 1,328,582 | |||
Health Care (2.5%) | |||||
Novartis AG | 15,000 | 1,168,839 | |||
Roche Holding AG | 4,500 | 1,445,991 | |||
2,614,830 | |||||
5,428,120 | |||||
TAIWAN (1.5%) | |||||
Information Technology (1.5%) | |||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 18,900 | 1,585,143 | |||
UNITED KINGDOM (6.1%) | |||||
Communication Services (1.5%) | |||||
Cineworld Group PLC | 485,000 | 179,379 | |||
Vodafone Group PLC, ADR | 103,300 | 1,395,583 | |||
1,574,962 | |||||
Health Care (2.6%) | |||||
AstraZeneca PLC, ADR | 24,500 | 1,228,920 | |||
Dechra Pharmaceuticals PLC | 31,800 | 1,438,559 | |||
2,667,479 | |||||
Industrials (0.8%) | |||||
Melrose Industries PLC (a) | 530,274 | 822,597 | |||
Information Technology (1.2%) | |||||
Avast PLC (b) | 204,600 | 1,257,318 | |||
6,322,356 |
Shares or Principal Amount | Value | ||||
UNITED STATES (44.3%) | |||||
Communication Services (2.9%) | |||||
Activision Blizzard, Inc. | 19,000 | $ | 1,438,870 | ||
Alphabet, Inc., Class C (a) | 1,000 | 1,621,010 | |||
3,059,880 | |||||
Consumer Discretionary (6.9%) | |||||
Aptiv PLC | 15,100 | 1,456,999 | |||
Las Vegas Sands Corp. | 26,100 | 1,254,366 | |||
Lowe's Cos., Inc. | 11,400 | 1,802,340 | |||
Target Corp. | 10,700 | 1,628,754 | |||
TJX Cos., Inc. (The) | 20,100 | 1,021,080 | |||
7,163,539 | |||||
Consumer Staples (3.4%) | |||||
Kraft Heinz Co. (The) | 35,600 | 1,089,004 | |||
Mondelez International, Inc., Class A | 26,600 | 1,412,992 | |||
PepsiCo, Inc. | 7,900 | 1,052,991 | |||
3,554,987 | |||||
Energy (1.1%) | |||||
Williams Cos., Inc. (The) | 57,900 | 1,111,101 | |||
Financials (5.7%) | |||||
Bank of America Corp. | 44,500 | 1,054,650 | |||
Blackstone Group, Inc. (The), Class A | 16,100 | 811,762 | |||
Charles Schwab Corp. (The) | 26,600 | 1,093,526 | |||
Citigroup, Inc. | 21,100 | 873,962 | |||
Goldman Sachs Group, Inc. (The) | 5,700 | 1,077,528 | |||
Huntington Bancshares, Inc. | 95,300 | 994,932 | |||
5,906,360 | |||||
Health Care (6.3%) | |||||
AbbVie, Inc. | 19,103 | 1,625,665 | |||
Bristol-Myers Squibb Co. | 22,200 | 1,297,590 | |||
Eli Lilly & Co. | 7,300 | 952,358 | |||
Medtronic PLC | 13,600 | 1,367,752 | |||
UnitedHealth Group, Inc. | 4,500 | 1,373,130 | |||
6,616,495 | |||||
Industrials (4.1%) | |||||
FedEx Corp. | 7,200 | 1,868,184 | |||
Lockheed Martin Corp. | 3,100 | 1,085,403 | |||
Norfolk Southern Corp. | 6,300 | 1,317,456 | |||
4,271,043 | |||||
Information Technology (9.8%) | |||||
Apple, Inc. | 29,400 | 3,200,484 | |||
Broadcom, Inc. | 4,400 | 1,538,372 | |||
Cisco Systems, Inc. | 32,600 | 1,170,340 | |||
Fidelity National Information Services, Inc. | 7,700 | 959,343 | |||
Intel Corp. | 22,800 | 1,009,584 | |||
Microsoft Corp. | 11,400 | 2,308,158 | |||
10,186,281 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 21 |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Dynamic Dividend Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (continued) | ||||||||
Real Estate (1.7%) | ||||||||
Digital Realty Trust, Inc. | 7,700 | $ | 1,111,110 | |||||
GEO Group, Inc. (The), REIT | 80,000 | 708,800 | ||||||
1,819,910 | ||||||||
Utilities (2.4%) | ||||||||
FirstEnergy Corp. | 31,100 | 924,292 | ||||||
NextEra Energy, Inc. | 21,200 | 1,552,052 | ||||||
2,476,344 | ||||||||
46,165,940 | ||||||||
Total Common Stocks | 101,099,473 | |||||||
PREFERRED STOCKS (1.8%) | ||||||||
SOUTH KOREA (1.8%) | ||||||||
Information Technology (1.8%) | ||||||||
Samsung Electronics Co. Ltd. | 43,200 | 1,921,747 | ||||||
Total Preferred Stocks | 1,921,747 |
Shares or Principal Amount | Value | |||||||
SHORT-TERM INVESTMENT (0.7%) | ||||||||
UNITED STATES (0.7%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (c) | 685,890 | $ | 685,890 | |||||
Total Short-Term Investment | 685,890 | |||||||
Total Investments (Cost $94,132,862) (d)—99.5% | 103,707,110 | |||||||
Other Assets in Excess of Liabilities—0.5% | 527,539 | |||||||
Net Assets—100.0% | $ | 104,234,649 |
(a) | Non-income producing security. |
(b) | Denotes a security issued under Regulation S or Rule 144A. |
(c) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(d) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
At October 31, 2020, the Fund's open forward foreign currency exchange contracts were as follows:
Sale Contracts Settlement Date | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation | |
United States Dollar/Euro | ||||||
02/01/2021 | State Street Bank and Trust | USD3,057,266 | EUR2,600,000 | $3,034,692 | $22,574 |
See accompanying Notes to Financial Statements.
22 | 2020 Annual Report |
Aberdeen Emerging Markets Fund (Unaudited)
The Aberdeen Emerging Markets Fund (Institutional Class shares net of fees) returned 11.86% for the one-year period ending October 31, 2020, versus the 8.25% return of its benchmark, the Morgan Stanley Capital International (MSCI) Emerging Markets Index (Net Dividends), during the same period.
Emerging-market (EM) equities experienced significant volatility but recorded positive returns for the 12-month period ended October 31, 2020. The prolonged trade dispute between the U.S. and China dominated global equity markets for most of 2019, with the signing of an initial trade deal between the two sides bringing some brief respite at the start of 2020. However, this was short-lived as the rapid spread of COVID-19 worldwide subsequently sent global markets into a tailspin.
The COVID-19 pandemic forced governments worldwide to impose lockdowns and social-distancing measures in an effort to contain its spread. These measures brought international travel to a standstill and severely hampered economic activity. Production and manufacturing indices across the world plummeted, while EM currencies slumped against the U.S. dollar. Consequently, EM stocks sold off aggressively in the first quarter of 2020. EM equities subsequently rebounded in the second and third quarters of 2020, after initial lockdowns seemingly slowed infection rates in most affected areas; this led many economies to gradually reopen for business. A key factor aiding the rally in EM stocks over the period was the unprecedented support by central banks and governments worldwide. This accommodative monetary policy backdrop helped bring trade and consumer activity back to life, which in turn, inspired investors' hopes of an economic recovery.
Towards the end of the period, a resurgence of COVID-19 infections in several countries stalled EMs' momentum. Geopolitical tensions between the U.S. and China ratcheted higher. The U.S. government increased sanctions and tightened its scrutiny of technology suppliers, especially those linked to Chinese firms. While these efforts pressured the sector, shares of technology firms proved resilient over the period, supported by robust demand for their products.
The Fund outperformed its benchmark, the MSCI Emerging Markets Index, for the 12-month period ended October 31, 2020, due mainly to strong stock selection in three Northeast Asia economies – China, South Korea and Taiwan – which outweighed the negative impact of overall asset allocation and currency effects. The three countries seemed to have contained the spread of the coronavirus most effectively, and the resumption of economic activity supported the outperformance in their respective stock markets. This was especially true for China, with its large domestic market, which led the recovery. The resilience of technology stocks over the period, many of which are based in Taiwan and South Korea, also bolstered the performance of these markets during the reporting period.
At the country level, while the Fund's underweight allocation to China relative to the benchmark hampered performance for the reporting period, stock selection in that market had a positive impact, with key domestically focused core holdings generating robust returns despite a dimmer global economic outlook weighing on the mainland China market. The Fund's holdings in China also showed early signs of
recovery after the COVID-19 lockdowns were lifted. Shares of LONGi Green Energy Technology Co., Ltd. and China Tourism Group Duty Free Corp. Ltd. (CTGDF) were among the top contributors to Fund performance for the reporting period. Longi Green Energy, a global leader in manufacturing mono-silicon wafers used by the solar industry, posted healthy results on robust demand for its products. We initiated a position in the company during the review period, and its stock price has risen significantly since the beginning of 2020. CTGDF has been a beneficiary of China's loosening restrictions on its lucrative duty-free industry in the popular tourist island of Hainan. The position in clinical-research organization and contract manufacturer Wuxi Biologics (Cayman) Inc. also contributed to Fund performance for the reporting period. The company continued to deliver robust growth in new drug development projects amid the pandemic, as investors looked to the company to help develop new treatments for the coronavirus.
Additionally, the exposure to Tencent Holdings Ltd. enhanced Fund performance for the period as the entertainment and social-media giant proved to be a defensive position in the Fund during the lockdowns, as time spent on digital entertainment, including online games, surged over the reporting period. Nonetheless, the lack of exposure to Alibaba Group Holding Ltd. for most of the period detracted from Fund performance as the e-commerce giant's stock was listed on the Hong Kong Exchange in November 2019, and maintained positive corporate results despite challenging market conditions. After careful consideration, we initiated a position in Alibaba in October 2020. While we believe that the company has always been a strong business, the key sticking points in the past had been our concerns about the quality of its corporate governance, including its opaque corporate structure, the partnership model, and past treatment of minority shareholders. More recently, we have observed changes along several fronts that we viewed positively from a governance perspective. The restructuring of Alibaba's ownership of its financial payments arm, Ant Group, ahead of Ant's planned public listing, also helped ease our concerns over the past treatment of minority shareholders.
Shares of the Fund's holding in South Korean electric vehicle (EV) battery manufacturer LG Chem Ltd. moved higher over the reporting period, supported by solid momentum in its EV-batteries business, as well as improvement in its petrochemicals division.
On the flipside, in Latin America, the Fund's overweight exposure versus the benchmark to Brazil weighed on performance for the reporting period. Rapid capital flight triggered by the COVID-19 pandemic caused substantial currency depreciation, which compounded the situation in Brazil and Mexico. The Fund's holdings in lenders Banco Bradesco S.A. in Brazil and Grupo Financiero Banorte SAB de CV (Banorte) in Mexico detracted from performance on investors' concerns over the pandemic's impact on economic growth and further interest-rate cuts. Additionally, questions over poor accounting practices and management integrity hampered Brazilian reinsurer IRB Brasil Resseguros S.A. (IRB), we subsequently exited the Fund's position in the company. Among consumer stocks, restrictions
2020 Annual Report | 23 |
Aberdeen Emerging Markets Fund (Unaudited) (continued)
on social interactions hampered the stock price of Coca-Cola bottler and retailer Fomento Económico Mexicano, SAB de CV (FEMSA).
At the sector level, the Fund's exposure to semiconductor companies, such as ASML Holding N.V., Samsung Electronics Co. Ltd. and Taiwan Semiconductor Manufacturing Co. (TSMC) had a positive impact on Fund performance for the reporting period. Shares of these companies, which in our view have solid balance sheets and wide competitive moats,1 rallied owing to a steady demand outlook for memory chips and smartphones. They also benefited Fund performance as their products were supported by work-from-home policies, resulting in strong earnings and healthy margins.
The lockdowns and social-distancing measures also lifted e-commerce volumes across the asset class as more people shopped online; this trend benefited the Fund's holdings in e-commerce companies Meituan Dianping in China and Mercado Libre in Latin America. Finally, shares of Russian internet-services provider Yandex N.V. also performed well following news of its inclusion in the MSCI Emerging Markets Index.
Regarding notable portfolio activity over the reporting period, in addition to IRB and Alibaba as previously noted, we initiated several holdings in China. These included LONGi Green Energy Technology Co., Ltd.; environmental solutions provider China Conch Venture Holdings Ltd.; natural and petroleum gas distributor China Resources Gas Group Ltd.; sportswear retailer Li Ning Co. Ltd.; e-commerce company Meituan Dianping; Nari Technology Development Co. Ltd., a provider of power grid automation and industrial control products in mainland China; New Oriental Education & Technology Group Inc., an afterschool K-12 tutoring business; and clothing manufacturer Shenzhou International Group Holdings Ltd. We also subscribed to the initial public offerings of KE Holdings Inc. and Hangzhou Tigermed Consulting Ltd. In our view, KE Holdings is a competitive business and market leader in integrating offline and online housing transactions and services in China. The secondary listing of Tigermed Consulting, the largest clinical contract researcher in China, began trading on the Hong Kong Exchange in August 2020.
We also established new positions in South Korea's Samsung SDI Co. Ltd., the market's leading manufacturer of small-sized lithium-ion batteries and a forerunner in the development of new energy solutions; Mercado Libre, the leading e-commerce player in Latin America with a burgeoning online and offline payments platform; South Africa exchange-listed Mondi plc, a global innovator in packaging and paper solutions, as we believed that it had a solid balance sheet and attractive valuation; and Brazil-based electric motor manufacturer WEG S.A. Additionally, we subscribed to the initial public offering of Allegro, a global e-commerce platform and leading internet brand in Poland, and introduced Yandex N.V., Russia's leading internet service provider, on the back of its dominant market position and successful tech ecosystem.
Conversely, we took the opportunity to sell the Fund's shares in several firms after considering the longer-term impact of COVID-19
on the Fund's performance, and to fund what we believed were better opportunities elsewhere. The Fund sold its shares of brewer Ambev S.A.; cosmetics maker AmorePacific Corp.; financial services company Banco Santander Chile; retailer BIM Birlesik Magazalar A.S.; packaged foods producer BRF S.A.; telecommunications companies China Mobile Ltd. and MTN Group Ltd.; cement producers Indocement Tunggal Prakarsa Tbk and Siam Cement Group PCL; manufacturing conglomerate Grasim Industries; Hangzhou Hikvision Digital Technology Co., a manufacturer of video surveillance equipment; motorcycle manufacturer Hero Motocorp; retailers Lojas Renner S.A. and Massmart Holdings Ltd.; shopping center and mall operator Multiplan Empreendimentos Imobiliarios S.A.; optical products maker Sunny Optical Technology (Group) Co. Ltd.; and steel pipe-maker Tenaris S.A. Finally, we exited the Fund's position in online classified advertising services provider 58.com Inc. following news that the company would be acquired by private equity investors.
We are cautiously optimistic about the near-term outlook for EM equities. The economic recovery led by China is now taking shape in Asia. This has supported the rebound of the asset class from the losses incurred in the first quarter of 2020. However, we anticipate some volatility in the final quarter of 2020, particularly in the wake of the U.S. presidential election. Additionally, there has been an increasingly contentious relationship between the U.S. and China, which in our view continues to dampen the prospects for economic recovery.
On the COVID-19 pandemic front, we believe that marked divergences in the successful containment of the virus across the globe hamper hopes for a large-scale economic recovery. Additionally, in our view, pockets of resurgence in Europe and parts of Asia, as well as persistently high infection rates in Brazil and India, the two largest emerging market economies after China, continue to dampen investor confidence. Furthermore, we believe that the timeline for rolling out an effective COVID-19 vaccine in emerging markets remains unclear.
Nevertheless, as bottom-up stock pickers, we remain focused on the longer-term outlook for the companies we hold based on their solid fundamentals, such as robust revenue streams, healthy balance sheets and sound corporate governance. In our view, emerging markets offer a diverse2 range of high-quality companies and structural growth drivers, such as healthy demographics and a growing middle class, continue to make the asset class attractive for investors. We maintain our preference for companies with exposure to themes that are undimmed by the pandemic. These include greater demand for healthcare, technological advancements, and shifting consumption patterns, such as growing discretionary spending on education, online shopping and gaming. At the same time, we intend to continue to exit the Fund's positions in companies for which we have lower conviction; that is, where we believe that the near- to mid-term recovery prospects seem more challenging. Therefore, we are committed to using our "on-the-ground" investment advantage to stay focused on companies that in our view have healthy fundamentals and will emerge in a more robust position beyond the current COVID-19 crisis.
1 | A moat is a competitive advantage that one company has over other companies in the same industry. |
2 | Diversification does not ensure a profit or protect against a loss in a declining market. |
24 | 2020 Annual Report |
Aberdeen Emerging Markets Fund (Unaudited) (concluded)
Portfolio Management:
Global Emerging Markets Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange
rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Equity stocks of small- and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 25 |
Aberdeen Emerging Markets Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |||||
Class A | w/o SC | 11.31% | 7.76% | 3.28% | ||||
w/SC2 | 4.93% | 6.48% | 2.67% | |||||
Class C | w/o SC | 10.74% | 7.17% | 2.76% | ||||
w/SC3 | 9.74% | 7.17% | 2.76% | |||||
Class R4 | w/o SC | 11.13% | 7.54% | 3.06% | ||||
Institutional Service Class4 | w/o SC | 11.71% | 8.10% | 3.43% | ||||
Institutional Class4 | w/o SC | 11.86% | 8.26% | 3.63% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns before the first offering of Class A, Class C and Class R (May 21, 2012) are based on the previous performance of the Institutional Class. Excluding the effect of any fee waivers or reimbursements, this performance is substantially similar to what Class A, Class C and Class R would have produced because all classes invest in the same portfolio of securities. Returns would only differ to the extent of the differences in expenses of the classes. |
2 | A 5.75% front-end sales charge was deducted. |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
4 | Not subject to any sales charges. |
Performance of a $1,000,000* Investment (as of October 31, 2020)
* | Minimum Initial Investment |
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Emerging Markets Fund, Morgan Stanley Capital International (MSCI) Emerging Markets Index (Net Dividends), MSCI Emerging Markets Index (Gross Dividends) and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020.
Effective February 28, 2020, the MSCI Emerging Markets Index (Net Dividends) replaced the MSCI Emerging Markets Index (Gross Dividends) as the Fund's primary benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as the net dividend benchmark is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The MSCI Emerging Markets Index captures large and mid cap representation across 26 Emerging Markets (EM) countries. With 1,387 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. EM countries in the Index are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
26 | 2020 Annual Report |
Aberdeen Emerging Markets Fund (Unaudited) (concluded)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 88.8% | |
Preferred Stocks | 10.2% | |
Short-Term Investment | 1.1% | |
Liabilities in Excess of Other Assets | (0.1%) | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Information Technology | 22.9% | |
Consumer Discretionary | 21.1% | |
Financials | 18.8% | |
Communication Services | 11.7% | |
Consumer Staples | 6.1% | |
Materials | 5.5% | |
Industrials | 4.0% | |
Real Estate | 3.3% | |
Energy | 2.3% | |
Health Care | 2.3% | |
Other | 2.0% | |
100.0% |
Top Holdings* | ||
Tencent Holdings Ltd. | 9.3% | |
Taiwan Semiconductor Manufacturing Co. Ltd. | 8.5% | |
Samsung Electronics Co. Ltd. | 8.0% | |
Meituan, B Shares | 3.4% | |
Ping An Insurance Group Co. of China Ltd., H Shares | 3.2% | |
Alibaba Group Holding Ltd. | 2.5% | |
Naspers Ltd., N Shares | 2.4% | |
Housing Development Finance Corp. Ltd. | 2.3% | |
Kweichow Moutai Co. Ltd., A Shares (Stock Connect) | 2.2% | |
LG Chem Ltd. | 2.1% | |
Other | 56.1% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
China | 41.7% | |
South Korea | 11.4% | |
India | 9.8% | |
Taiwan | 8.5% | |
Brazil | 6.7% | |
Hong Kong | 4.6% | |
Russia | 3.6% | |
Mexico | 2.8% | |
Indonesia | 2.5% | |
South Africa | 2.4% | |
Other | 6.0% | |
100.0% |
2020 Annual Report | 27 |
Statement of Investments
October 31, 2020
Aberdeen Emerging Markets Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (88.8%) | |||||
BRAZIL (4.5%) | |||||
Consumer Discretionary (1.7%) | |||||
MercadoLibre, Inc. (a) | 55,210 | $ | 67,027,701 | ||
Industrials (1.0%) | |||||
WEG SA | 3,004,420 | 39,704,976 | |||
Materials (1.8%) | |||||
Vale SA, ADR | 7,032,920 | 74,337,964 | |||
181,070,641 | |||||
CHINA (41.7%) | |||||
Communication Services (10.4%) | |||||
Autohome, Inc., ADR | 458,240 | 43,784,832 | |||
Tencent Holdings Ltd. | 4,905,500 | 374,807,711 | |||
418,592,543 | |||||
Consumer Discretionary (14.8%) | |||||
Alibaba Group Holding Ltd. (a) | 2,658,000 | 100,721,840 | |||
China Tourism Group Duty Free Corp. Ltd., A Shares (Stock Connect) (b) | 2,035,503 | 60,680,233 | |||
Huazhu Group Ltd., ADR (c) | 233,063 | 9,236,287 | |||
Li Ning Co. Ltd. | 3,324,500 | 17,327,092 | |||
Meituan, B Shares (a) | 3,632,300 | 135,409,085 | |||
Midea Group Co. Ltd., A Shares (Stock Connect) (b) | 7,105,846 | 82,926,664 | |||
New Oriental Education & Technology Group, Inc., ADR (a) | 302,804 | 48,563,706 | |||
Prosus NV (a) | 751,658 | 75,042,489 | |||
Shenzhou International Group Holdings Ltd. | 3,322,600 | 57,811,133 | |||
Yum China Holdings, Inc. (c) | 129,482 | 6,892,327 | |||
594,610,856 | |||||
Consumer Staples (2.2%) | |||||
Kweichow Moutai Co. Ltd., A Shares (Stock Connect) (b) | 348,115 | 86,975,480 | |||
Financials (4.3%) | |||||
China Merchants Bank Co. Ltd., H Shares | 8,809,500 | 45,888,094 | |||
Ping An Insurance Group Co. of China Ltd., H Shares | 12,359,500 | 127,793,193 | |||
173,681,287 | |||||
Health Care (2.3%) | |||||
Hangzhou Tigermed Consulting Co. Ltd., A Shares (b) | 1,234,495 | 22,929,667 | |||
Hangzhou Tigermed Consulting Co. Ltd., H Shares (a)(d) | 200,700 | 3,223,109 | |||
Wuxi Biologics Cayman, Inc. (a)(d) | 2,269,500 | 63,735,978 | |||
89,888,754 | |||||
Industrials (2.5%) | |||||
China Conch Venture Holdings Ltd. | 6,309,500 | 28,094,953 | |||
NARI Technology Co. Ltd., A Shares (Stock Connect) (b) | 8,696,166 | 27,024,193 | |||
Shanghai International Airport Co. Ltd., A Shares (Stock Connect ) (b) | 4,547,389 | 44,986,917 | |||
100,106,063 |
Shares or Principal Amount | Value | ||||
Information Technology (1.9%) | |||||
LONGi Green Energy Technology Co. Ltd., A Shares (b) | 6,790,506 | $ | 77,207,660 | ||
Real Estate (2.3%) | |||||
China Resources Land Ltd. | 17,728,000 | 72,501,588 | |||
KE Holdings, Inc. ADR (a) | 255,866 | 17,846,654 | |||
90,348,242 | |||||
Utilities (1.0%) | |||||
China Resources Gas Group Ltd. | 9,000,000 | 39,106,902 | |||
1,670,517,787 | |||||
HONG KONG (4.6%) | |||||
Consumer Staples (1.0%) | |||||
Budweiser Brewing Co. APAC Ltd. (d) | 13,817,100 | 40,748,144 | |||
Financials (3.6%) | |||||
AIA Group Ltd. | 6,247,200 | 59,455,686 | |||
Hong Kong Exchanges & Clearing Ltd. | 1,716,865 | 82,269,951 | |||
141,725,637 | |||||
182,473,781 | |||||
INDIA (9.8%) | |||||
Consumer Staples (1.8%) | |||||
Hindustan Unilever Ltd. | 1,272,680 | 35,648,160 | |||
ITC Ltd. | 15,503,983 | 34,678,630 | |||
70,326,790 | |||||
Financials (5.0%) | |||||
Housing Development Finance Corp. Ltd. | 3,481,009 | 90,188,912 | |||
Kotak Mahindra Bank Ltd. (a) | 3,430,317 | 71,474,658 | |||
SBI Life Insurance Co. Ltd. (a)(d) | 3,711,994 | 38,599,322 | |||
200,262,892 | |||||
Information Technology (2.0%) | |||||
Tata Consultancy Services Ltd. | 2,255,785 | 81,259,833 | |||
Materials (1.0%) | |||||
UltraTech Cement Ltd. | 678,821 | 41,654,539 | |||
393,504,054 | |||||
INDONESIA (2.5%) | |||||
Consumer Discretionary (0.7%) | |||||
Astra International Tbk PT | 76,725,300 | 28,017,992 | |||
Financials (1.8%) | |||||
Bank Central Asia Tbk PT | 26,294,600 | 51,738,722 | |||
Bank Rakyat Indonesia Persero Tbk PT | 92,133,900 | 20,856,523 | |||
72,595,245 | |||||
100,613,237 | |||||
MACAU (1.3%) | |||||
Consumer Discretionary (1.3%) | |||||
Sands China Ltd. | 14,546,400 | 51,052,060 |
See accompanying Notes to Financial Statements.
28 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Emerging Markets Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
MEXICO (2.8%) | |||||
Consumer Staples (1.1%) | |||||
Fomento Economico Mexicano SAB de CV, ADR | 854,501 | $ | 45,946,519 | ||
Financials (1.2%) | |||||
Grupo Financiero Banorte SAB de CV, Class O (a) | 10,331,339 | 46,076,169 | |||
Industrials (0.5%) | |||||
Grupo Aeroportuario del Sureste SAB de CV, Class B(a) | 1,664,350 | 19,308,547 | |||
111,331,235 | |||||
NETHERLANDS (1.2%) | |||||
Information Technology (1.2%) | |||||
ASML Holding NV | 131,000 | 47,396,177 | |||
PHILIPPINES (1.7%) | |||||
Financials (0.7%) | |||||
Bank of the Philippine Islands | 17,990,194 | 27,285,012 | |||
Real Estate (1.0%) | |||||
Ayala Land, Inc. | 62,187,600 | 42,335,128 | |||
69,620,140 | |||||
POLAND (0.2%) | |||||
Consumer Discretionary (0.2%) | |||||
Allegro.eu SA (a)(d) | 392,279 | 7,972,224 | |||
RUSSIA (3.6%) | |||||
Communication Services (1.3%) | |||||
Yandex N.V., Class A (a) | 942,110 | 54,237,272 | |||
Energy (1.5%) | |||||
LUKOIL PJSC, ADR | 540,048 | 27,591,052 | |||
Novatek PJSC | 2,631,345 | 31,721,770 | |||
59,312,822 | |||||
Financials (0.8%) | |||||
Sberbank of Russia PJSC | 12,440,356 | 31,584,450 | |||
145,134,544 | |||||
SOUTH AFRICA (2.4%) | |||||
Consumer Discretionary (2.4%) | |||||
Naspers Ltd., N Shares | 490,460 | 95,751,244 | |||
SOUTH KOREA (3.4%) | |||||
Information Technology (1.3%) | |||||
Samsung SDI Co. Ltd. | 128,208 | 50,505,778 | |||
Materials (2.1%) | |||||
LG Chem Ltd. | 154,416 | 84,200,114 | |||
134,705,892 | |||||
TAIWAN (8.5%) | |||||
Information Technology (8.5%) | |||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 22,550,017 | 341,174,395 |
Shares or Principal Amount | Value | ||||
UNITED KINGDOM (0.6%) | |||||
Materials (0.6%) | |||||
Mondi PLC | 1,350,500 | $ | 25,354,847 | ||
Total Common Stocks | 3,557,672,258 | ||||
PREFERRED STOCKS (10.2%) | |||||
BRAZIL (2.2%) | |||||
Energy (0.8%) | |||||
Petroleo Brasileiro SA | 10,110,130 | 33,371,825 | |||
Financials (1.4%) | |||||
Banco Bradesco SA, ADR, Preferred Shares, 1.94% | 15,524,834 | 54,336,919 | |||
87,708,744 | |||||
SOUTH KOREA (8.0%) | |||||
Information Technology (8.0%) | |||||
Samsung Electronics Co. Ltd. | 7,246,851 | 322,375,356 | |||
Total Preferred Stocks | 410,084,100 | ||||
SHORT-TERM INVESTMENT (1.1%) | |||||
UNITED STATES (1.1%) | |||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (e) | 45,168,681 | 45,168,681 | |||
Total Short-Term Investment | 45,168,681 | ||||
Total Investments (Cost $3,042,415,904) (f)—100.1% | 4,012,925,039 | ||||
Liabilities in Excess of Other Assets—(0.1)% | (3,571,055 | ) | |||
Net Assets—100.0% | $ | 4,009,353,984 |
(a) | Non-income producing security. |
(b) | China A Shares. These shares are issued in local currency, traded in the local stock markets and are held through either a Qualified Foreign Institutional Investor (QFII) license or the Shanghai or Shenzhen Hong-Kong Stock Connect program. |
(c) | All or a portion of the securities are on loan. The total value of all securities on loan is $13,874,900. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. See Note 2(j) of the accompanying Notes to Financial Statements. |
(d) | Denotes a security issued under Regulation S or Rule 144A. |
(e) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(f) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR American Depositary Receipt
PLC Public Limited Company
See accompanying Notes to Financial Statements.
2020 Annual Report | 29 |
Aberdeen Focused U.S. Equity Fund (Unaudited)
Aberdeen Focused U.S. Equity Fund (Institutional Class shares net of fees) returned 13.14% for the 12-month period ended October 31, 2020, versus the 9.71% return of its benchmark, the U.S. broader-market S&P 500 Index, during the same period.
Equity markets worldwide experienced significant bouts of volatility over the 12-month period ended October 31, 2020, prompted by investors' fears surrounding the impact of the global spread of the COVID-19 pandemic on the global economy and, later in the period, uncertainty regarding the U.S. presidential election. Shares of U.S. large-cap companies, as represented by the broader-market S&P 500 Index, returned 9.71% for the period, significantly outperforming the -0.14% return of their small-cap counterparts, as measured by the Russell 2000 Index.1 The information technology, consumer discretionary and communication services sectors led the rally in the S&P 500 Index for the period, garnering double-digit returns. Conversely, the energy, financials and real estate sectors lost ground and were the primary market laggards.
On the monetary policy front, the U.S. Federal Reserve (Fed) implemented two separate emergency interest-rate cuts totalling 150 basis points (bps) to a range of 0% to 0.25% on March 3 and 15, 2020, in response to the COVID-19-induced market carnage. In its statement announcing the rate cut, the central bank commented: "The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected." The Fed maintained its benchmark rate through the remainder of the reporting period. In its statement issued following its meeting in mid-September 2020, the Federal Open Market Committee commented: "The path of the economy will depend significantly on the course of the virus." The Fed's projections accompanying its monetary policy statement indicated that it anticipates maintaining the federal funds rate near 0% at least through the end of 2023.
U.S. economic news was mixed over the reporting period, reflecting the dichotomy among the healthy pre-pandemic picture, an abruptly stalled economy under "lockdown," and a subsequent upturn in the summer and early fall of 2020. The COVID-19 pandemic has significantly hampered the U.S. economy. U.S. gross domestic product (GDP) fell 31.4% in the second quarter of 2020, attributable mainly to downturns in consumer spending, exports and nonresidential fixed investment.2 The economy subsequently expanded by 33.1% in the third quarter of 2020, due largely to businesses reopening and the resumption of other activities that were postponed or restricted due to the pandemic. There were notable increases in consumer spending, private inventory investment and exports. These positive contributors to GDP offset reductions in federal government spending – reflecting reduced fees paid to administer the Paycheck Protection Program loans under the Coronavirus Aid, Relief, and Economic Security
(CARES) Act, which was enacted in late March of 2020 – and state and local government spending.
Prior to the pandemic, U.S. non-farm payrolls rose by an average of 228,000 for the first four months of the reporting period.3 However, the COVID-19-induced lockdowns resulted in the loss of roughly 19.4 million jobs between February and May 2020, and the unemployment rate rose from a record low of 3.5% in February to an all-time high of 14.7% in April. As expected, the leisure and hospitality industry saw the largest decline in employment due to the lockdowns. The U.S. economy subsequently recovered approximately 9.3 million jobs between May and October, and the unemployment rate concurrently fell to 6.9%.
The U.S. Consumer Price Index4 (CPI) was flat in October 2020 and rose 1.2% over the previous 12-month period.5 However, the core CPI, which excludes the impact of energy prices, was up 1.6% for the 12-month period ended October 31, 2020, attributable mainly to increases in medical services and housing costs.
The Fund's outperformance relative to its benchmark, the S&P 500 Index, for the reporting period was attributable primarily to stock selection in the real estate and utilities sectors, as well as the lack of exposure to the energy sector. The largest contributors to Fund performance among individual holdings were Adobe Inc., a developer of printing, publishing and graphics software; industrial manufacturing company Trane Technologies plc; and e-commerce giant Amazon.com Inc.
Adobe Inc. garnered robust year-over-year revenue and earnings growth over the reporting period. The company's results were bolstered by strength in its Digital Media and Digital Experience business segments. Trane Technologies plc, in which we initiated a holding in June 2020, benefited from supportive summer-weather trends, an increase in customers working from home due to the COVID-19 pandemic, and a focus on air quality. Amazon.com Inc. benefited significantly as the COVID-19 pandemic accelerated the ongoing shift of consumerism to online platforms, where the company is the dominant and pre-eminent player.
In contrast, the Fund's performance versus the benchmark for the reporting period was hampered by stock selection in the financials sector and a modest underweight allocation to the information technology sector. The most notable individual stock detractors from Fund performance included the absence of a position in technology giant Apple Inc., as well as the Fund's holdings in diversified financial services company Citigroup Inc. and oil and gas company EOG Resources Inc.
While we acknowledge Apple Inc.'s innovations, we historically have had concerns with the lack of visibility into its business and its high dependence on a single product. Citigroup Inc.'s stock price declined
1 | The Russell 2000 Index is an unmanaged index considered representative of U.S. small-cap stocks. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
2 | Source: U.S. Department of Commerce, May 2020 |
3 | Source: U.S. Department of Labor, November 2020 |
4 | The Consumer Price Index is a measure of the average change over time in the prices that consumers pay for a basket of consumer goods and services. |
5 | Source: U.S. Department of Labor, November 2020 |
30 | 2020 Annual Report |
Aberdeen Focused U.S. Equity Fund (Unaudited) (concluded)
on news that U.S. regulators are likely to issue a consent order requiring the company to address shortcomings in its risk systems to better detect problematic transactions and risky trades. In our view, the regulatory inquiry has likely accelerated the retirement timeline for Chief Executive Officer (CEO) Michael Corbat, who will be succeeded by Jane Fraser – the first female CEO to lead a major U.S. bank. Shares of EOG Resources Inc. moved lower as the oil price fell sharply in March due to declining demand and potentially increasing supply amid a price war among the Organization of the Petroleum Exporting Countries (OPEC) members. We subsequently exited the Fund's position in the company in March 2020.
Regarding portfolio activity over the reporting period, in addition to Trane Technologies Inc. as previously noted, we initiated holdings in diversified financial services companies American Express Co. and Citigroup Inc.; Air Products and Chemicals Inc., a supplier of industrial gases; diversified media company The Walt Disney Co.; freight railroad operator CSX Corp.; customer relationship management software provider Pegasystems Inc.; diversified financial services company Goldman Sachs Group Inc.; and integrated solid waste management services company Waste Connections Inc.; telecommunications company Charter Communications Inc.; and defense contractor L3Harris Technologies Inc.
Conversely, we exited the Fund's positions in financial services company First Republic Bank; commercial bank M&T Bank Corp.; semiconductor manufacturer Texas Instruments Inc.; luxury goods retailer Tiffany & Co.; freight railroad operator Kansas City Southern; defense contractor Raytheon Technologies Corp.; Canada-based convenience-store chain operator Alimentation Couche-Tard Inc.; diversified financial services company Charles Schwab Corp.; diversified media company Comcast Corp.; and securities exchange operator Intercontinental Exchange Inc.
The economy continues to heal from an acute depression caused by the COVID-19 pandemic, in keeping with the global progress to learn more about the pathology of the virus and, through "trial and error," which measures to adapt and counteract potential case spikes. Coordinated efforts to balance the control of the virus spread with sensible economic reopenings will be more crucial to the stability of markets, in our view. And we think that the development of effective and safe vaccines and effective therapeutics, along with a federally coordinated plan to distribute them, will have a positive effect on the markets. However, in our view, the current progress to date appears to suggest that these outcomes are more likely in 2021. As we navigate towards the end of 2020, we maintain a positive view on U.S. equities despite contending with higher market levels and narrow market leadership. This positive view comes with the caveat that we also feel that upside risks will be more limited going forward, as much of the expected improvement has been priced into the markets.
Nonetheless, 2020 has been the "year of the unexpected." While we are confident that we have taken stock of all the important variables, we remain "on our toes," taking deep breaths and crossing our fingers heading into the final months of this year and into 2021.
Effective December 1, 2020, the Aberdeen Focused U.S. Equity Fund changed its name to Aberdeen U.S. Sustainable Leaders Smaller Companies Fund and changed its principal investment strategies. The Fund seeks to achieve its investment objective of long-term capital appreciation by investing in equity securities of smaller (small- and mid-capitalization) U.S. companies that the Adviser deems to have sound or improving prospects and which demonstrate that they are current or emerging sustainable leaders through their management of environmental, social and governance ("ESG") risks and opportunities in accordance with the Adviser's criteria. Performance covered in this Annual Report does not reflect these changes.
Portfolio Management:
North American Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Because the Fund invests a greater proportion of its assets in the securities of a smaller number of issuers, the Fund will be subject to greater volatility with respect to its investments than a fund that invests in a larger number of securities.
Equity stocks of small- and mid-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 31 |
Aberdeen Focused U.S. Equity Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | ||||||
Class A | w/o SC | 12.88% | 9.18% | 5.82% | |||||
w/SC2 | 6.43% | 7.89% | 5.19% | ||||||
Class C | w/o SC | 11.83% | 8.42% | 5.09% | |||||
w/SC3 | 10.95% | 8.42% | 5.09% | ||||||
Class R4 | w/o SC | 12.54% | 8.84% | 5.45% | |||||
Institutional Service Class4 | w/o SC | 12.96% | 9.37% | 5.96% | |||||
Institutional Class4 | w/o SC | 13.14% | 9.54% | 6.16% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | The Fund changed its investment strategies effective November 15, 2017. Performance information for periods prior to November 15, 2017 does not reflect the current investment strategy. In connection with the change in investment strategy, the Fund changed its name from Aberdeen Equity Long-Short Fund to Aberdeen Focused U.S. Equity Fund. |
2 | A 5.75% front-end sales charge was deducted. |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
4 | Not subject to any sales charges. |
Performance of a $10,000 Investment (as of October 31, 2020)
| Comparative performance of $10,000 invested in Class C shares of the Aberdeen Focused U.S. Equity Fund, the S&P 500® Index, and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The S&P 500® Index represents large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available U.S. market capitalization.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
|
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
32 | 2020 Annual Report |
Aberdeen Focused U.S. Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 100.0% | |
Short-Term Investment | 0.2% | |
Liabilities in Excess of Other Assets | (0.2%) | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Information Technology | 27.1% | * |
Industrials | 17.0% | |
Communication Services | 13.1% | |
Health Care | 9.5% | |
Consumer Discretionary | 9.2% | |
Financials | 8.9% | |
Utilities | 4.3% | |
Materials | 3.9% | |
Real Estate | 3.6% | |
Consumer Staples | 3.4% | |
Other | –% | |
100.0% |
* | As of October 31, 2020, the Fund's holdings in the Information Technology sector were allocated to three industries: Software (18.7%), Commercial Services & Supplies (4.3%) and Diversified Telecommunication Services (4.1%). |
Amounts listed as " – " are 0% or round to 0%.
Top Holdings* | ||
Microsoft Corp. | 8.8% | |
Alphabet, Inc., Class A | 6.6% | |
Amazon.com, Inc. | 6.2% | |
Visa, Inc., Class A | 4.3% | |
NextEra Energy, Inc. | 4.3% | |
NICE Ltd., ADR | 4.1% | |
CSX Corp. | 4.0% | |
Trane Technologies PLC | 3.9% | |
Air Products and Chemicals, Inc. | 3.9% | |
UnitedHealth Group, Inc. | 3.7% | |
Other | 50.2% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
United States | 96.1% | |
Israel | 4.1% | |
Other | (0.2%) | |
100.0% |
2020 Annual Report | 33 |
Statement of Investments
October 31, 2020
Aberdeen Focused U.S. Equity Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (100.0%) | |||||
Communication Services (13.1%) | |||||
Alphabet, Inc., Class A (a) | 568 | $ | 917,951 | ||
Charter Communications, Inc., Class A (a) | 710 | 428,712 | |||
Walt Disney Co. | 3,944 | 478,210 | |||
1,824,873 | |||||
Consumer Discretionary (9.2%) | |||||
Amazon.com, Inc. (a) | 285 | 865,303 | |||
TJX Cos., Inc. (The) | 8,105 | 411,734 | |||
1,277,037 | |||||
Consumer Staples (3.4%) | |||||
Costco Wholesale Corp. | 1,316 | 470,628 | |||
Financials (8.9%) | |||||
American Express Co. | 4,497 | 410,306 | |||
Citigroup, Inc. | 9,679 | 400,904 | |||
Goldman Sachs Group, Inc. (The) | 2,217 | 419,102 | |||
1,230,312 | |||||
Health Care (9.5%) | |||||
Baxter International, Inc. | 4,803 | 372,569 | |||
Boston Scientific Corp. (a) | 12,957 | 444,036 | |||
UnitedHealth Group, Inc. | 1,663 | 507,448 | |||
1,324,053 | |||||
Industrials (17.0%) | |||||
CSX Corp. | 7,011 | 553,448 | |||
IHS Markit Ltd. | 5,388 | 435,728 | |||
L3Harris Technologies, Inc. | 2,374 | 382,475 | |||
Trane Technologies PLC | 4,132 | 548,523 | |||
Waste Connections, Inc. | 4,519 | 447,931 | |||
2,368,105 | |||||
Information Technology (27.1%) | |||||
Adobe, Inc. (a) | 996 | 445,312 | |||
Fidelity National Information Services, Inc. | 3,480 | 433,573 | |||
Microsoft Corp. | 6,034 | 1,221,704 | |||
NICE Ltd., ADR (a) | 2,499 | 570,422 | |||
Pegasystems, Inc. | 4,206 | 487,391 | |||
Visa, Inc., Class A | 3,295 | 598,734 | |||
3,757,136 |
Shares or Principal Amount | Value | ||||
Materials (3.9%) | |||||
Air Products and Chemicals, Inc. | 1,961 | $ | 541,707 | ||
Real Estate (3.6%) | |||||
Equinix, Inc., REIT | 678 | 495,781 | |||
Utilities (4.3%) | |||||
NextEra Energy, Inc. | 8,160 | 597,393 | |||
Total Common Stocks | 13,887,025 | ||||
SHORT-TERM INVESTMENT (0.2%) | |||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (b) | 36,170 | 36,170 | |||
Total Short-Term Investment | 36,170 | ||||
Total Investments (Cost $11,405,679) (c)—100.2% | 13,923,195 | ||||
Liabilities in Excess of Other Assets—(0.2)% | (33,179 | ) | |||
Net Assets—100.0% | $ | 13,890,016 |
(a) | Non-income producing security. |
(b) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(c) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
34 | 2020 Annual Report |
Aberdeen Global Equity Fund (Unaudited)
Aberdeen Global Equity Fund (Institutional Class shares net of fees) returned 6.39% for the 12-month period ended October 31, 2020, versus the 4.89% return of its benchmark, the Morgan Stanley Capital International (MSCI) All Country (AC) World Index (Net Dividends), during the same period.
Global equities posted modest gains amid significant market volatility over the 12-month period ended October 31, 2020. Early in the reporting period, trade tensions between the U.S. and China drove global equity markets, with the U.S. implementing punitive tariffs as leverage in renegotiations. Thereafter, the 2019 calendar year ended on a positive note as both countries seemingly set aside their differences and worked towards a preliminary trade agreement.
The start of 2020, however, brought fresh woes in the form of the COVID-19 pandemic, which spread rapidly from China to nearly all parts of the globe. This led many countries to shut their borders and impose lockdowns in an effort to limit contagion. As business activity ground to a halt, governments and central banks worldwide used fiscal and monetary tools in a bid to support flagging economic growth in their countries. U.S. lawmakers enacted the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package, while the Federal Reserve cut its benchmark interest rate to near 0% and revamped its approach to managing inflation, signaling low interest rates for a protracted period. Across the Atlantic, the European Union agreed to raise US$857 billion from financial markets in an effort to support member states and sectors most affected by the pandemic, while the European Central Bank extended its US$1.6 trillion emergency bond purchase program to mid-2021.
As COVID-19 infection rates ebbed in the summer of 2020, governments worldwide eased social-distancing measures, eager to allow their economies some respite. However, a resurgence of infections, particularly in the U.S. and Europe, subsequently forced many nations to reimpose movement restrictions. This weighed heavily on global equity markets towards the end of the reporting period.
The Fund outperformed its benchmark, the MSCI AC World Index (Net Dividends), over the reporting period due to positive stock selection in several markets, including the UK, Japan, China and Taiwan.
Among individual Fund holdings, Chinese internet giant Tencent Holdings Ltd's stock price rose during the reporting period due to increased usage of its online media, payment and communications platforms amid social-distancing measures worldwide. Shares of Taiwanese semiconductor company Taiwan Semiconductor Manufacturing Co. (TSMC) moved higher on increased demand for electronics as more people worked from home during the pandemic. News that U.S. rival Intel Corp. (which the Fund does not hold) planned to outsource production of its latest chip technology due to schedule delays also lifted TSMC's stock price. U.S.-based architecture software firm Autodesk Inc. benefited from accelerated digitalization, particularly in the construction and manufacturing sectors, due to the coronavirus. This was reflected in its second-quarter 2020 results, which exceeded the market's forecasts.
Conversely, the Fund's underweight allocation to the U.S. relative to the benchmark MSCI AC World Index (Net Dividends) weighed on
performance for the reporting period. Specifically, the lack of exposure to Apple Inc. detracted from Fund performance as the U.S.-based technology company's shares surged after a stock split and on expectations of robust sales with the upcoming launch of its new iPhones and other products. Nevertheless, we prefer to hold other more diversified technology companies in the Fund. Oilfield services provider Schlumberger Ltd. continued to feel the effects of volatile crude oil prices as the COVID-19 pandemic dampened energy demand. We have since exited the Fund's holding in the company. Finally, Brazil-based lender Banco Bradesco S.A.'s shares declined over the reporting period amid political turmoil and the effects of the pandemic. We subsequently exited the Fund's position in the company.
In terms of portfolio activity, we initiated positions in 12 companies during the period. In the U.S., we established new positions in market-leading e-commerce and cloud platform provider Amazon.com Inc., as we believe that it has a long runway for growth, which should lead to improved cash-generation; athletic apparel company Nike Inc., which in our view has a solid brand, market leading-position and opportunities to accelerate growth through a shift to more direct consumer sales; heavy-equipment manufacturer Deere & Co., which has an established brand and generates recurring revenue through providing maintenance services; and medical device maker Boston Scientific Corp., which has a diversified portfolio of products for which it is a market leader. We also established a new position in Costco Wholesale Corp. The company's membership-only warehouse club is distinctive within the general merchandise retail segment. In our view, its business model remains successful globally and is gradually evolving with more online business platforms to adapt to an increasingly e-commerce-oriented world. Additionally, we initiated a holding in household products maker Procter & Gamble Co. as its management has simplified the business and revived sales growth. We believe that improved cash flow has led to steady reinvestment that should support the business going forward. In Europe, we initiated holdings in Anglo-Swedish drug-maker AstraZeneca PLC, as we believe that it offers an attractive dividend yield and has a strong drug portfolio; and Dutch brewer Heineken N.V., which in our view may provide strong gains and growth opportunities at an attractive valuation. We established a new position in Danish biotechnology specialist Genmab A/S, which we believe has a formidable core Darzalex anti-cancer drug franchise, as well as attractive pipeline prospects. The company's partnership with U.S. pharmaceutical firm Abbvie Inc. (which the Fund did not hold as of the end of the reporting period) should expand commercialization capabilities amid opportunities for shared learning.
In our opinion, France-based energy and digital solutions provider Schneider Electric SE is well-positioned to capitalize on accelerating trends in electrification and automation, as well as robust demand for data centers, which support long-term organic growth and earnings. We believe that the company's robust environmental, social and governance (ESG) practices are also a positive factor.
We believe that Dutch semiconductor equipment manufacturer ASML Holding N.V. has a promising long-term outlook in developing next-generation chip-making tools. The company has a dominant position
2020 Annual Report | 35 |
Aberdeen Global Equity Fund (Unaudited) (concluded)
in the extreme ultraviolet lithography (EUV) process used in making semiconductors, which in or view may help the company to achieve solid earnings growth over the longer term.
In our judgment, UK-based antibody producer and distributor Abcam plc also has attractive long-term growth opportunities in both its core business and adjacent fields. We believe that the company's position as a leading provider of high value-add antibodies should be a key driver of growth. In our opinion, Abcam's work with other pharmaceutical and biotechnology companies to create antibodies specific to their respective drug pipelines is also promising.
In addition to Schlumberger Ltd. and Banco Bradesco as noted above, we exited the Fund's positions in the following companies: Australian exchange-listed wine-maker Treasury Wine Estates; UK-based engine manufacturer Rolls Royce Holdings plc; U.S.-based healthcare conglomerate Johnson & Johnson; Indian tobacco company ITC Ltd.; Mexican convenience-store operator and beverage company Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA); U.S.-based asset manager and brokerage firm The Charles Schwab Corp.; UK-based tobacco company British American Tobacco plc; Canadian fertilizer producer Nutrien Ltd.; UK exchange-listed lender Standard Chartered plc; Swiss drug-maker Novartis AG; Japanese automation products and services provider Fanuc Corp.; South Korean technology giant Samsung Electronics Co. Ltd.; and oil and gas company EOG Resources Inc.
The world remains in a state of uncertainty as the approaching winter in the Northern Hemisphere coincides with fresh waves of COVID-19 infections in Europe and the U.S. Many governments globally have reimposed social-distancing measures to contain the virus, delaying prospects for a full economic recovery from the pandemic, in our view. To compound the matter, we think that relations between the U.S. and China will continue to deteriorate, with the trajectory unlikely to be altered much by the recent U.S. elections. On a more positive note, we believe that the continued infusion of massive monetary and fiscal stimuli to economies worldwide should continue to support equity prices.
From a Fund perspective, we are giving serious consideration to two key aspects: how normalized earnings will look as we move forward in this crisis, and whether companies are well-positioned for a post-COVID-19 world. In such times of uncertainty, we believe that sound bottom-up analysis and stock-picking strategies are even more crucial. In our opinion, we have the advantage of a solid proprietary research platform, along with a well-resourced and experienced team that has navigated many past crises. Amid the current market volatility, we will continue to seek what we believe are good-quality
companies at attractive valuations, while actively engaging with their management teams in an effort to ensure robust corporate governance and high standards of sustainability.
Portfolio Management:
Global Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Equity stocks of small- and mid-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
36 | 2020 Annual Report |
Aberdeen Global Equity Fund (Unaudited)
Average Annual Total Return (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |||||||||||
Class A | w/o SC | 6.01% | 6.26 | % | 5.13 | % | ||||||||
w/SC1 | (0.05%) | 5.01 | % | 4.51 | % | |||||||||
Class C | w/o SC | 5.24% | 5.57 | % | 4.45 | % | ||||||||
w/SC2 | 4.24% | 5.57 | % | 4.45 | % | |||||||||
Class R3 | w/o SC | 5.58% | 5.87 | % | 4.80 | % | ||||||||
Institutional Service Class3,4 | w/o SC | 6.25% | 6.56 | % | 5.43 | % | ||||||||
Institutional Class3 | w/o SC | 6.39% | 6.61 | % | 5.47 | % |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | A 5.75% front-end sales charge was deducted. |
2 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
3 | Not subject to any sales charges. |
4 | Returns before the first offering of the Institutional Service Class (December 19, 2011) are based on the previous performance of the Fund's Class A shares. Excluding the effect of any fee waivers or reimbursements, this performance is substantially similar to what the Institutional Service Class would have produced because both classes invest in the same portfolio of securities. Returns would only differ to the extent of the differences in expenses of the classes. |
Performance of a $10,000 Investment (as of October 31, 2020)
Comparative performance of $10,000 invested in Class A shares of the Aberdeen Global Equity Fund, Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) (Net Dividends), MSCI ACWI (Gross Dividends) and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Effective February 28, 2020, the MSCI All Country World Index (Net Dividends) replaced the MSCI All Country World Index (Gross Dividends) as the Fund's primary
benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as the net dividend benchmark is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses or sales charges. Investors cannot invest directly in market indexes.
MSCI ACWI captures large and mid cap representation across 23 Developed Markets (DM) and 26 Emerging Markets (EM) countries. With 3,000 constituents, the index covers approximately 85% of the global investable equity opportunity set. DM countries in the Index are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the UK and the US. EM countries in the Index are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
2020 Annual Report | 37 |
Aberdeen Global Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | |||
Common Stocks | 99.0% | ||
Short-Term Investment | 1.1% | ||
Liabilities in Excess of Other Assets | (0.1%) | ||
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets. The GICS structure consists of 11 sectors, 24 industry groups, 69 industries and 158 sub-industries. As of October 31, 2020, the Fund did not have more than 25% of its assets invested in any single industry or industry group. The sectors as classified by GICS, are comprised of several industries.
Top Sectors | ||||
Information Technology | 21.8 | % | ||
Health Care | 15.9 | % | ||
Financials | 14.4 | % | ||
Consumer Staples | 14.4 | % | ||
Consumer Discretionary | 11.7 | % | ||
Communication Services | 8.5 | % | ||
Industrials | 7.1 | % | ||
Materials | 5.2 | % | ||
Other | 1.0 | % | ||
100.0 | % |
Top Holdings* | ||||
Tencent Holdings Ltd. | 5.2 | % | ||
Microsoft Corp. | 4.3 | % | ||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 3.8 | % | ||
Visa, Inc., Class A | 3.7 | % | ||
AIA Group Ltd. | 3.6 | % | ||
Alphabet, Inc., Class A | 3.3 | % | ||
Autodesk, Inc. | 3.2 | % | ||
Amazon.com, Inc. | 3.0 | % | ||
Keyence Corp. | 2.9 | % | ||
CME Group, Inc. | 2.8 | % | ||
Other | 64.2 | % | ||
100.0 | % |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||||
United States | 48.0 | % | ||
United Kingdom | 10.2 | % | ||
Japan | 5.8 | % | ||
Switzerland | 5.4 | % | ||
China | 5.2 | % | ||
Netherlands | 4.6 | % | ||
Taiwan | 3.8 | % | ||
Hong Kong | 3.6 | % | ||
France | 3.1 | % | ||
Australia | 2.6 | % | ||
Other | 7.7 | % | ||
100.0 | % |
38 | 2020 Annual Report |
Statement of Investments
October 31, 2020
Aberdeen Global Equity Fund
Shares or Principal Amount | Value | ||||||
COMMON STOCKS (99.0%) | |||||||
AUSTRALIA (2.6%) | |||||||
Health Care (2.6%) | |||||||
CSL Ltd. | 3,200 | $ | 647,863 | ||||
CHINA (5.2%) | |||||||
Communication Services (5.2%) | |||||||
Tencent Holdings Ltd. | 17,300 | 1,321,817 | |||||
DENMARK (1.5%) | |||||||
Health Care (1.5%) | |||||||
Genmab AS (a) | 1,100 | 367,427 | |||||
FRANCE (3.1%) | |||||||
Consumer Discretionary (2.1%) | |||||||
LVMH Moet Hennessy Louis Vuitton SE | 1,100 | 515,623 | |||||
Industrials (1.0%) | |||||||
Schneider Electric SE | 2,100 | 255,163 | |||||
770,786 | |||||||
HONG KONG (3.6%) | |||||||
Financials (3.6%) | |||||||
AIA Group Ltd. | 96,700 | 920,311 | |||||
INDIA (2.1%) | |||||||
Financials (2.1%) | |||||||
Housing Development Finance Corp. Ltd. | 20,800 | 538,904 | |||||
JAPAN (5.8%) | |||||||
Health Care (1.2%) | |||||||
Sysmex Corp. | 3,300 | 309,965 | |||||
Information Technology (2.9%) | |||||||
Keyence Corp. | 1,600 | 726,116 | |||||
Materials (1.7%) | |||||||
Shin-Etsu Chemical Co. Ltd. | 3,300 | 440,770 | |||||
1,476,851 | |||||||
NETHERLANDS (4.6%) | |||||||
Consumer Staples (2.4%) | |||||||
Heineken NV | 6,900 | 610,771 | |||||
Information Technology (2.2%) | |||||||
ASML Holding NV | 1,500 | 542,705 | |||||
1,153,476 | |||||||
SINGAPORE (2.0%) | |||||||
Financials (2.0%) | |||||||
Oversea-Chinese Banking Corp. Ltd. | 81,817 | 504,627 |
Shares or Principal Amount | Value | ||||||
SWEDEN (2.2%) | |||||||
Industrials (2.2%) | |||||||
Atlas Copco AB, A Shares | 12,400 | $ | 547,350 | ||||
SWITZERLAND (5.4%) | |||||||
Consumer Staples (2.6%) | |||||||
Nestle SA | 5,900 | 663,620 | |||||
Health Care (2.8%) | |||||||
Roche Holding AG | 2,200 | 706,929 | |||||
1,370,549 | |||||||
TAIWAN (3.8%) | |||||||
Information Technology (3.8%) | |||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 11,300 | 947,731 | |||||
UNITED KINGDOM (10.2%) | |||||||
Consumer Staples (2.5%) | |||||||
Diageo PLC | 19,400 | 626,966 | |||||
Health Care (3.9%) | |||||||
Abcam PLC | 24,800 | 473,251 | |||||
AstraZeneca PLC | 5,200 | 522,109 | |||||
995,360 | |||||||
Industrials (1.7%) | |||||||
Experian PLC | 11,400 | 417,626 | |||||
Materials (2.1%) | |||||||
Croda International PLC | 6,739 | 526,714 | |||||
2,566,666 | |||||||
UNITED STATES (46.9%) | |||||||
Communication Services (3.3%) | |||||||
Alphabet, Inc., Class A (a) | 520 | 840,377 | |||||
Consumer Discretionary (9.6%) | |||||||
Amazon.com, Inc. (a) | 250 | 759,037 | |||||
Booking Holdings, Inc. (a) | 270 | 438,075 | |||||
NIKE, Inc., Class B | 5,100 | 612,408 | |||||
TJX Cos., Inc. (The) | 12,000 | 609,600 | |||||
2,419,120 | |||||||
Consumer Staples (6.9%) | |||||||
Costco Wholesale Corp. | 800 | 286,096 | |||||
Estee Lauder Cos., Inc. (The), Class A | 3,100 | 680,946 | |||||
PepsiCo, Inc. | 3,850 | 513,167 | |||||
Procter & Gamble Co. (The) | 1,900 | 260,490 | |||||
1,740,699 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 39 |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Global Equity Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (continued) | ||||||||
UNITED STATES (continued) | ||||||||
Financials (6.7%) | ||||||||
CME Group, Inc. | 4,700 | $ | 708,384 | |||||
First Republic Bank | 3,700 | 466,718 | ||||||
Intercontinental Exchange, Inc. | 5,400 | 509,760 | ||||||
1,684,862 | ||||||||
Health Care (3.9%) | ||||||||
Boston Scientific Corp. (a) | 17,300 | 592,871 | ||||||
PRA Health Sciences, Inc. (a) | 3,900 | 380,016 | ||||||
972,887 | ||||||||
Industrials (2.2%) | ||||||||
Deere & Co. | 2,500 | 564,775 | ||||||
Information Technology (12.9%) | ||||||||
Autodesk, Inc. (a) | 3,400 | 800,836 | ||||||
Fidelity National Information Services, Inc. | 3,700 | 460,983 | ||||||
Microsoft Corp. | 5,300 | 1,073,091 | ||||||
Visa, Inc., Class A | 5,100 | 926,721 | ||||||
3,261,631 | ||||||||
Materials (1.4%) | ||||||||
Linde PLC | 1,600 | 352,544 | ||||||
11,836,895 | ||||||||
Total Common Stocks | 24,971,253 |
Shares or Principal Amount | Value | |||||||
SHORT-TERM INVESTMENT (1.1%) | ||||||||
UNITED STATES (1.1%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (b) | 282,715 | $ | 282,715 | |||||
Total Short-Term Investment | 282,715 | |||||||
Total Investments (Cost $19,518,853) (c)—100.1% | 25,253,968 | |||||||
Liabilities in Excess of Other Assets—(0.1)% | (37,237 | ) | ||||||
Net Assets—100.0% | $ | 25,216,731 |
(a) | Non-income producing security. |
(b) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(c) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt |
PLC | Public Limited Company |
See accompanying Notes to Financial Statements.
40 | 2020 Annual Report |
Aberdeen Global Infrastructure Fund (Unaudited)
Aberdeen Global Infrastructure Fund (Institutional Class shares net of fees) returned -9.30% for the 12-month period ended October 31, 2020, versus the 4.75% return of its primary benchmark, the MSCI All Country (AC) World Index (Net Dividends), and the -16.79% return of its secondary benchmark, the S&P Global Infrastructure Index (Net Dividends), during the same period.
Global equities posted modest gains amid significant market volatility over the 12-month period ended October 31, 2020. Early in the reporting period, trade tensions between the U.S. and China drove global equity markets, with the U.S. implementing punitive tariffs as leverage in renegotiations. Thereafter, the 2019 calendar year ended on a positive note as both countries seemingly set aside their differences and worked towards a preliminary trade agreement.
The start of 2020, however, brought fresh woes in the form of the COVID-19 pandemic, which spread rapidly from China to nearly all parts of the globe. This led many countries to shut their borders and impose lockdowns in an effort to limit contagion. As business activity ground to a halt, governments and central banks worldwide used fiscal and monetary tools in a bid to support flagging economic growth in their countries. U.S. lawmakers enacted the US$2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package, while the U.S. Federal Reserve cut its benchmark interest rate to nearly 0% and revamped its approach to managing inflation, signaling low interest rates for a protracted period. Across the Atlantic, the European Union agreed to raise US$857 billion from financial markets in an effort to support member states and sectors most affected by the pandemic, while the European Central Bank extended its US$1.6 trillion emergency bond-purchase program to mid-2021.
As COVID-19 infection rates ebbed in the summer of 2020, governments worldwide eased social-distancing measures, eager to allow their economies some respite. However, a resurgence of infections, particularly in the U.S. and Europe, subsequently forced many nations to reimpose movement restrictions. This weighed heavily on global equity markets towards the end of the reporting period.
While the Fund was unable to avoid the market downturn in the overall infrastructure market, it significantly outperformed the S&P Global Infrastructure Index during the reporting period. At the stock level, the main contributors to the Fund's relative performance were Spanish renewable energy company EDP Renovaveis S.A., Spanish cell tower and service company Cellnex Telecom S.A., and U.S. truck stop and travel-service company TravelCenters of America Inc., none of which are constituents of the Fund's secondary benchmark, the S&P Global Infrastructure Index (Net Dividends). EDP Renovaveis is a global leader in the renewable energy sector and the world's fourth-largest wind energy producer. The company is executing an ambitious growth plan that is partially funded by selling some of their existing portfolio. They have been selling assets at attractive prices and finding opportunities to invest. In addition, COVID-19 had a negligible impact the company's earnings during the 12-month period ended October 31, 2020, demonstrating its resilience. Cellnex Telecommunications is the largest independent operator of European
cellular towers. The company has limited exposure to COVID-19 and it continues to execute and consolidate the European cell-tower network and benefits from a strong order book. After the reporting period ended, Cellnex announced a transformational deal acquiring towers from Hong Kong-based multinational conglomerate CK Hutchinson. TravelCenters of America is the largest publicly traded full-service truck stop and travel center company in the U.S. It also operates full-service centers, convenience stores and restaurants. In December 2019, Congress reinstated the biodiesel tax credit, which was positive for its shares. Its shares also rallied as the company's new Chief Executive Officer appears to be making progress toward its reorganization plan to improve profitability by growing revenues and margins.
Conversely, the largest detractors from the Fund's relative performance for the reporting period included an underweight position in U.S. energy company NextEra Energy Inc., the absence of a position in Spanish electric-utility company Iberdrola S.A., and a holding in Brazil-based transportation company Cosan Logistica S.A., which is not a constituent of the Fund's secondary benchmark, the S&P Global Infrastructure Index (Net Dividends). NextEra Energy is a high-quality utility whose shares outperformed against a volatile macro backdrop, as investors favored companies with highly defensive characteristics. In addition, NextEra has outperformed its peers given increasing demand for renewable energy, as the company grows its backlog and delivers on earnings growth. While the Fund maintained a position in NextEra Energy, it was underweight the benchmark, which was a drag on Fund performance. Having no position in Iberdrola was a headwind for performance as its shares rallied given its defensive nature. We believe that the company is well positioned to take advantage of expected growth in renewables, which buoyed investor sentiment for the company. Cosan Logistica is a holding company whose sole asset is shares of Rumo S.A., a railway concession operator in Brazil. The company's shares performed poorly during the first half of the reporting period. The company was hampered as corn volumes declined due to heavy rainfalls in Brazil. In the second half of the period, the company was negatively impacted by increased competition, as the BR-163 road was paved, but tolls have not yet started.
The world remains in a state of uncertainty as the approaching winter in the Northern Hemisphere coincides with fresh waves of COVID-19 infections in Europe and the U.S. Many governments globally have reimposed social-distancing measures to contain the virus, delaying prospects of a full economic recovery from the pandemic, in our view. To compound the matter, relations between the U.S. and China continue to deteriorate, with the trajectory unlikely to be altered much by the recent U.S. elections, in our view. On a more positive note, we believe that the continued infusion of massive monetary and fiscal stimuli to economies worldwide should continue to support equity prices. In addition, the possibility of the approval and distribution of a vaccine has buoyed investor sentiment.
From a Fund perspective, we are giving serious consideration to two key aspects: how normalized earnings will look as we move forward in this crisis, and whether companies are well-positioned for a post-COVID-19 world. In such times of uncertainty, we believe that sound
2020 Annual Report | 41 |
Aberdeen Global Infrastructure Fund (Unaudited) (concluded)
bottom-up analysis and stock-picking strategies are even more crucial. In our opinion, we have the advantage of a solid proprietary research platform, along with a well-resourced and experienced team that has navigated many past crises. Amid the current market volatility, we will continue to seek what we believe are good-quality companies at attractive valuations.
We believe that opportunities remain for growth in both the communication and renewable sectors. For example, in the U.S., mobile telecommunications company T-Mobile announced on November 5, 2020 that its 5G network, supported by its 2.5-gigahertz mid-band spectrum, would be available to 100 million people in America by the end of 2020, which may benefit the Fund's investment in cell towers. In Europe, for example, the European Commission has launched a €750 billion ($887 billion) stimulus program, and Germany's coalition parties agreed to an additional €130 billion ($154 billion) stimulus, both of which include elements of infrastructure investment with a focus on climate change, which may benefit some of the Fund's utility investments that focus on renewable energy.
Portfolio Management:
Global Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Because the Fund concentrates its investments in infrastructure-related entities, the Fund has greater exposure to the potential adverse economic, regulatory, political and other changes affecting such entities. Infrastructure related entities are subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, costs associated with environmental and other regulations, the effects of economic slowdown and surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Equity stocks of small- and mid-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
42 | 2020 Annual Report |
Aberdeen Global Infrastructure Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |||||
Class A | w/o SC | (9.49%) | 5.49% | N.A. | ||||
w/SC2 | (14.70%) | 4.25% | N.A. | |||||
Institutional Class3 | w/o SC | (9.30%) | 5.75% | 6.85% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns prior to May 7, 2018 reflect the performance of a predecessor fund (the "Predecessor Fund"). Returns of the Predecessor Fund have not been adjusted to reflect the expenses applicable to the respective classes. The Fund and the Predecessor Fund have substantially similar investment objectives and strategies. Please consult the Fund's prospectus for more detail. |
2 | A 5.75% front-end sales charge was deducted. |
3 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* Minimum Initial Investment
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Global Infrastructure Fund, Morgan Stanley Capital International All Country World Index (MSCI ACWI) (Net Dividends), MSCI ACWI (Gross Dividends), S&P Global Infrastructure Index (Net Dividends) and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Effective February 28, 2020, the MSCI ACWI (Net Dividends) replaced the MSCI ACWI (Gross Dividends) as the Fund's primary benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as the net dividend benchmark is calculated net of withholding taxes, to which
the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses or sales charges. Investors cannot invest directly in market indexes.
MSCI ACWI captures large and mid cap representation across 23 Developed Markets (DM) and 26 Emerging Markets (EM) countries. With 3,000 constituents, the index covers approximately 85% of the global investable equity opportunity set. DM countries in the Index are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the UK and the US. EM countries in the Index are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
S&P Global Infrastructure Index is a total return index that is designed to track 75 companies from around the world chosen to represent the listed infrastructure industry while maintaining liquidity and tradability. To create diversified exposure, the index includes three distinct infrastructure clusters: energy, transportation, and utilities. Net Total Return (NTR) indexes include reinvestments of all dividends minus taxes.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
2020 Annual Report | 43 |
Aberdeen Global Infrastructure Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 98.9% | |
Other Assets in Excess of Liabilities | 1.1% | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Industrials | 34.2%* | |
Utilities | 29.2%** | |
Communication Services | 18.3% | |
Energy | 7.6% | |
Real Estate | 5.4% | |
Materials | 2.7% | |
Consumer Discretionary | 1.5% | |
Other | 1.1% | |
100.0% |
* | As of October 31, 2020, the Fund's holdings in the Industrials sector were allocated to six industries: Engineering & Construction (12.4%), Transportation (10.0%), Commercial Services and Supplies (9.0%), Environmental Control (1.3%), Miscellaneous Manufacturing (0.8%) and Energy-Alternative Sources (0.7%). |
** | As of October 31, 2020, the Fund's holdings in the Utilities sector were allocated to three industries: Electric Utilities (25.2%), Water Utility (2.2%) and Energy-Alternate Sources (1.8%). |
Top Holdings | ||
EDP Renovaveis SA | 3.2% | |
Cellnex Telecom SA | 3.0% | |
RWE AG | 2.9% | |
Tower Bersama Infrastructure Tbk PT | 2.7% | |
Kinder Morgan, Inc. | 2.6% | |
Enbridge, Inc. | 2.6% | |
Vodafone Group PLC | 2.5% | |
Ferrovial SA | 2.5% | |
Enel SpA | 2.4% | |
Williams Cos., Inc. (The) | 2.4% | |
Other | 73.2% | |
100.0% |
Top Countries | ||
United States | 37.4% | |
Spain | 11.7% | |
China | 5.5% | |
Indonesia | 5.0% | |
Italy | 5.0% | |
France | 4.8% | |
Brazil | 4.5% | |
United Kingdom | 4.4% | |
Canada | 3.9% | |
Germany | 3.9% | |
Other | 13.9% | |
100.0% |
44 | 2020 Annual Report |
Statement of Investments
October 31, 2020
Aberdeen Global Infrastructure Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (98.9%) | |||||
ARGENTINA (1.0%) | |||||
Industrials (0.4%) | |||||
Corp. America Airports SA (a)(b) | 102,600 | $ | 176,472 | ||
Materials (0.6%) | |||||
Loma Negra Cia Industrial Argentina SA, ADR | 55,800 | 238,824 | |||
415,296 | |||||
BRAZIL (4.5%) | |||||
Communication Services (1.0%) | |||||
Telefonica Brasil SA, ADR (b) | 56,100 | 412,896 | |||
Industrials (3.5%) | |||||
CCR SA | 327,700 | 637,359 | |||
Cosan Logistica SA (a) | 286,800 | 819,221 | |||
1,456,580 | |||||
1,869,476 | |||||
CANADA (3.9%) | |||||
Energy (2.6%) | |||||
Enbridge, Inc. | 39,300 | 1,082,866 | |||
Industrials (1.3%) | |||||
Canadian Pacific Railway Ltd. | 1,900 | 568,347 | |||
1,651,213 | |||||
CHINA (5.5%) | |||||
Industrials (4.6%) | |||||
China Everbright Environment Group Ltd. | 576,333 | 290,769 | |||
China Railway Construction Corp. Ltd., Class H | 562,500 | 381,041 | |||
COSCO SHIPPING Ports Ltd. | 881,775 | 516,440 | |||
CRRC Corp. Ltd., Class H | 811,200 | 314,649 | |||
Zhejiang Expressway Co. Ltd., Class H | 626,100 | 427,427 | |||
1,930,326 | |||||
Utilities (0.9%) | |||||
Beijing Enterprises Water Group Ltd. | 1,014,000 | 385,724 | |||
2,316,050 | |||||
FRANCE (4.8%) | |||||
Industrials (3.5%) | |||||
Bouygues SA | 16,600 | 544,371 | |||
Vinci SA | 11,600 | 916,226 | |||
1,460,597 | |||||
Utilities (1.3%) | |||||
Veolia Environnement SA | 29,800 | 554,657 | |||
2,015,254 | |||||
GERMANY (3.9%) | |||||
Industrials (1.0%) | |||||
Fraport AG Frankfurt Airport Services Worldwide (a) | 10,900 | 394,236 |
Shares or Principal Amount | Value | ||||
Utilities (2.9%) | |||||
RWE AG | 32,900 | $ | 1,217,555 | ||
1,611,791 | |||||
INDONESIA (5.0%) | |||||
Communication Services (4.3%) | |||||
Sarana Menara Nusantara Tbk PT | 9,855,200 | 659,978 | |||
Tower Bersama Infrastructure Tbk PT | 11,181,400 | 1,130,957 | |||
1,790,935 | |||||
Industrials (0.7%) | |||||
Jasa Marga Persero Tbk PT | 1,253,900 | 302,192 | |||
2,093,127 | |||||
ITALY (5.0%) | |||||
Industrials (1.2%) | |||||
Atlantia SpA (a) | 32,600 | 500,428 | |||
Materials (1.4%) | |||||
Buzzi Unicem SpA | 27,100 | 586,384 | |||
Utilities (2.4%) | |||||
Enel SpA | 126,200 | 1,003,353 | |||
2,090,165 | |||||
JAPAN (1.1%) | |||||
Industrials (1.1%) | |||||
East Japan Railway Co. | 8,700 | 454,953 | |||
LUXEMBOURG (1.2%) | |||||
Communication Services (1.2%) | |||||
SES SA, ADR | 63,900 | 510,390 | |||
MALAYSIA (1.0%) | |||||
Industrials (1.0%) | |||||
Malaysia Airports Holdings Bhd | 406,900 | 409,635 | |||
MEXICO (3.3%) | |||||
Industrials (1.5%) | |||||
Promotora y Operadora de Infraestructura SAB de CV | 93,800 | 618,877 | |||
Utilities (1.8%) | |||||
Infraestructura Energetica Nova SAB de CV | 232,300 | 776,688 | |||
1,395,565 | |||||
NETHERLANDS (1.3%) | |||||
Communication Services (1.3%) | |||||
Koninklijke KPN NV | 199,600 | 539,076 | |||
NORWAY (1.8%) | |||||
Communication Services (1.8%) | |||||
Telenor ASA | 49,300 | 761,797 | |||
PHILIPPINES (2.1%) | |||||
Industrials (2.1%) | |||||
International Container Terminal Services, Inc. | 370,000 | 877,475 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 45 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Infrastructure Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SPAIN (11.7%) | |||||
Communication Services (3.0%) | |||||
Cellnex Telecom SA (c) | 19,800 | $ | 1,270,981 | ||
Industrials (3.8%) | |||||
Aena SME SA (a)(c) | 4,000 | 538,943 | |||
Ferrovial SA | 48,101 | 1,041,749 | |||
1,580,692 | |||||
Utilities (4.9%) | |||||
Atlantica Sustainable Infrastructure PLC | 25,400 | 749,046 | |||
EDP Renovaveis SA | 69,200 | 1,315,541 | |||
2,064,587 | |||||
4,916,260 | |||||
UNITED KINGDOM (4.4%) | |||||
Communication Services (2.5%) | |||||
Vodafone Group PLC | 788,400 | 1,051,701 | |||
Utilities (1.9%) | |||||
National Grid PLC, ADR | 13,000 | 772,850 | |||
1,824,551 | |||||
UNITED STATES (37.4%) | |||||
Communication Services (3.2%) | |||||
DISH Network Corp., Class A (a) | 15,200 | 387,448 | |||
T-Mobile US, Inc. (a) | 8,600 | 942,302 | |||
1,329,750 | |||||
Consumer Discretionary (1.5%) | |||||
TravelCenters of America, Inc. (a) | 26,600 | 633,080 | |||
Energy (5.0%) | |||||
Kinder Morgan, Inc. | 91,400 | 1,087,660 | |||
Williams Cos., Inc. (The) | 52,200 | 1,001,718 | |||
2,089,378 | |||||
Industrials (8.5%) | |||||
Dycom Industries, Inc. (a) | 10,300 | 668,882 | |||
Kansas City Southern | 4,400 | 775,016 | |||
Norfolk Southern Corp. | 4,700 | 982,864 | |||
Union Pacific Corp. | 3,300 | 584,727 | |||
Waste Connections, Inc. | 5,700 | 566,124 | |||
3,577,613 |
Shares or Principal Amount | Value | ||||
Materials (0.7%) | |||||
Vulcan Materials Co. | 1,900 | $ | 275,196 | ||
Real Estate (5.4%) | |||||
American Tower Corp., REIT | 3,100 | 711,915 | |||
CoreCivic, Inc., REIT | 49,100 | 314,731 | |||
Crown Castle International Corp., REIT | 6,400 | 999,680 | |||
GEO Group, Inc. (The), REIT | 27,800 | 246,308 | |||
2,272,634 | |||||
Utilities (13.1%) | |||||
American Electric Power Co., Inc. (d) | 7,900 | 710,447 | |||
Clearway Energy, Inc., Class C | 24,500 | 689,920 | |||
CMS Energy Corp. | 11,800 | 747,294 | |||
Evergy, Inc. | 14,900 | 822,480 | |||
FirstEnergy Corp. | 24,400 | 725,168 | |||
NextEra Energy, Inc. | 12,800 | 937,088 | |||
Vistra Corp. | 47,700 | 828,549 | |||
5,460,946 | |||||
15,638,597 | |||||
Total Common Stocks | 41,390,671 | ||||
Total Investments (Cost $38,901,086) (e)—98.9% | 41,390,671 | ||||
Other Assets in Excess of Liabilities—1.1% | 454,789 | ||||
Net Assets—100.0% | $ | 41,845,460 |
(a) | Non-income producing security. |
(b) | All or a portion of the securities are on loan. The total value of all securities on loan is $221,707. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. See Note 2(j) of the accompanying Notes to Financial Statements. |
(c) | Denotes a security issued under Regulation S or Rule 144A. |
(d) | All or a portion of the security has been designated as collateral for unrealized depreciation on forward foreign currency contracts. |
(e) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
46 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Global Infrastructure Fund
At October 31, 2020, the Fund's open forward foreign currency exchange contracts were as follows:
Purchase Contracts Settlement Date | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation |
Hong Kong Dollar/United States Dollar | |||||
02/01/2021 | Goldman Sachs & Co. | HKD17,000,000 | USD2,192,492 | $2,192,700 | $208 |
Sale Contracts Settlement Date | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Depreciation |
United States Dollar/Hong Kong Dollar | |||||
02/01/2021 | Goldman Sachs & Co. | USD4,385,034 | HKD34,000,000 | $4,385,400 | $(366) |
See accompanying Notes to Financial Statements.
2020 Annual Report | 47 |
Aberdeen International Equity Fund (Unaudited)
Aberdeen International Equity Fund (Institutional Class shares net of fees) returned 8.70% for the 12-month period ended October 31, 2020, versus the -2.61% return of its benchmark, the Morgan Stanley Capital International (MSCI) All Country (AC) World ex USA Index (Net Dividends), during the same period.
International equities declined over the 12-month period ended October 31, 2020. Early in the reporting period, trade tensions between the U.S. and China drove global equity markets, with the U.S. implementing punitive tariffs as leverage in renegotiations. Thereafter, the 2019 calendar year ended on a positive note as both countries seemingly set aside their differences and worked towards a preliminary trade agreement.
The start of 2020, however, brought fresh woes in the form of the COVID-19 pandemic, which spread rapidly from China to nearly all parts of the globe. This led many countries to shut their borders and impose lockdowns in an effort to limit contagion. As business activity ground to a halt, governments and central banks worldwide used fiscal and monetary tools in a bid to support flagging economic growth in their countries. U.S. lawmakers enacted the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package, while the Federal Reserve cut its benchmark interest rate to near 0% and revamped its approach to managing inflation, signaling low interest rates for a protracted period. Across the Atlantic, the European Union agreed to raise US$857 billion from financial markets in an effort to support member states and sectors most affected by the pandemic, while the European Central Bank extended its US$1.6 trillion emergency bond purchase program to mid-2021.
As COVID-19 infection rates ebbed in the summer of 2020, governments worldwide eased social-distancing measures, eager to allow their economies some respite. However, a resurgence of infections, particularly in the U.S. and Europe, subsequently forced many nations to reimpose movement restrictions. This weighed heavily on global equity markets towards the end of the reporting period.
The Fund outperformed its benchmark, the MSCI AC World ex USA Index (Net Dividends), over the reporting period, attributable primarily to strong stock selection the UK, Japan and France.
Among individual Fund holdings, Chinese internet giant Tencent Holdings Ltd's stock price rose during the reporting period due to increased usage of its online media, payment and communications platforms amid social-distancing measures worldwide. Shares of Taiwanese semiconductor company Taiwan Semiconductor Manufacturing Co. (TSMC) moved higher on increased demand for electronics as more people worked from home during the pandemic. News that U.S. rival Intel Corp. (which the Fund did not hold as of the end of the reporting period) planned to outsource production of its latest chip technology due to schedule delays also lifted TSMC's stock price. New Zealand exchange-listed medical device maker Fisher & Paykel Healthcare Corp Ltd's stock price rose on strong results over the reporting period as demand for its respiratory products remained robust amid the coronavirus outbreak. The company subsequently upgraded its earnings forecast for its fiscal year ending March 2021.
Conversely, the Fund's holding in Banco Bradesco S.A. detracted from performance for the reporting period. The Brazilian lender's shares declined amid political turmoil and the effects of the COVID-19 pandemic during the period. We subsequently exited the Fund's position in the stock given our decreased conviction in the company. Lack of exposure to Alibaba Group Holding Ltd had a negative impact on Fund performance as the Chinese e-commerce giant's shares advanced on strong sales volumes as more consumers switched to online shopping during COVID-19-induced lockdowns. Elsewhere, Australia exchange-listed wine-maker Treasury Wine Estates Ltd's stock price declined amid key management departures, rising competition in North America and news that China launched anti-dumping investigations on wine imports from Australia. We exited the Fund's holding given these unfavorable circumstances.
During the reporting period, we initiated holdings in UK-based protein-research tool supplier Abcam plc, a market leader that we believe has good long-term growth opportunities; Anglo-Swedish drug-maker AstraZeneca plc, as we believe that it offers an attractive dividend yield and has a strong portfolio of drugs; CTS Eventim AG & Co., Europe's leading live-entertainment ticketing platform, as we believe that its business is backed by a solid balance sheet and should return to normal once the pandemic passes; Dutch brewer Heineken N.V., which in our view may provide strong gains and growth opportunities at an attractive valuation; Israeli cybersecurity firm Cyberark Software Ltd., as we believe that it has a positive long-term outlook; Netherlands-based semiconductor-equipment manufacturer ASML Holding NV, which in our view has a promising long-term outlook in developing next-generation chip-making tools; Leading Dutch payment company Adyen NV, which we believe should benefit from the shift to digital payments and continue to carve out a leading market position, allowing it to boost revenue and long-term free cash flow; Japan-based mergers-and-acquisitions brokerage business Nihon M&A Center Inc., which we believe has a long runway for growth given the large potential market, and we are confident that management can execute well, leveraging on its solid market position and expertise; Danish biotechnology specialist Genmab A/S on the strength of its core Darzalex anti-cancer drug franchise, as well as pipeline prospects; Denmark-based pharmaceutical firm Novo Nordisk A/S on our strong conviction in its expertise in diabetes treatments; France-based Schneider Electric SE as we believe that its business is well-positioned to capitalize on accelerating trends in electrification and automation, which support long-term organic growth and earnings; Australian commercial and industrial property company Goodman Group as we believe that it has a robust track record on execution and exposure to drivers that underpin longer-term growth; Latin American e-commerce provider Mercado Libre Inc. as we believe that it has clear growth prospects and a strengthening competitive position; and Norway-based Schibsted ASA, which owns a portfolio of digital consumer brands that in our view provides it with a dominant position in key markets, and we believe that the company can monetize its asset base better over the long term.
In addition to Banco Bradesco and Treasury Wine Estates as previously noted, other exited Fund positions during the reporting period included Swiss security group Dormakaba Holding AG, as the
48 | 2020 Annual Report |
Aberdeen International Equity Fund (Unaudited) (concluded)
company has struggled to integrate certain acquisitions; Mexican convenience store and beverage company Fomento Económico Mexicano, S.A.B. de C.V.(FEMSA), given the Fund's exposure to Heineken N.V., which has a larger geographical footprint; UK-based tobacco company British American Tobacco, which faces increasing regulatory challenges; UK exchange-listed lender Standard Chartered plc and Canadian fertilizer producer Nutrien Ltd. in favor of what we believed were more attractive investment opportunities elsewhere; UK-based engine manufacturer Rolls Royce Holdings plc, given our uncertainty over its ability to reach our free cash-flow targets; UK-based insurer Prudential plc after the spin-off of its UK operations, as we believe that its U.S. business is likely to be a drag on the stock's performance in the current low interest-rate environment; South Korean chipmaker Samsung Electronics Co. Ltd., Japanese healthcare company Sysmex Corp and Swiss drug-maker Novartis AG, based on our decreased conviction in the companies; Anglo-Dutch oil company Royal Dutch Shell plc given our concerns over the industry's long-term growth prospects; Japanese cycling and outdoor products maker Shimano Inc. as we believe that its share-price movements indicated that current growth rates for its business may not be sustainable; Japanese automation products and services provider Fanuc Corp. to add to holdings in companies that in our view provided better investment opportunities within the same sector; and Philippine-based real estate developer Ayala Land Inc. as we believed that there were better opportunities elsewhere.
The world remains in a state of uncertainty as the approaching winter in the Northern Hemisphere coincides with fresh waves of COVID-19 infections in Europe and the U.S. Many governments globally have reimposed social-distancing measures to contain the virus, delaying prospects for a full economic recovery from the pandemic, in our view. To compound the matter, we think that relations between the U.S. and China will continue to deteriorate, with the trajectory unlikely to be altered much by the recent U.S. elections. On a more positive note, we believe that the continued infusion of massive monetary and fiscal stimuli to economies worldwide should continue to support equity prices.
From a Fund perspective, we are giving serious consideration to two key aspects: how normalized earnings will look as we move forward in this crisis, and whether companies are well-positioned for a post-COVID-19 world. In such times of uncertainty, we believe that sound bottom-up analysis and stock-picking strategies are even more crucial. In our opinion, we have the advantage of a solid proprietary research platform, along with a well-resourced and experienced team that has navigated many past crises. Amid the current market volatility, we will continue to seek what we believe are good-quality companies at attractive valuations, while actively engaging with their management teams in an effort to ensure robust corporate governance and high standards of sustainability.
Effective December 1, 2020, the Aberdeen International Equity Fund changed its name to Aberdeen Emerging Markets Sustainable Leaders
Fund and changed its principal investment strategies. The Fund seeks to achieve its investment objective of long-term capital appreciation by investing in equity securities of emerging market companies that the Adviser deems to have sound or improving prospects and which demonstrate that they are current or emerging sustainable leaders through their management of environmental, social and governance ("ESG") risks and opportunities in accordance with the Adviser's criteria. Performance covered in this Annual Report does not reflect these changes.
Portfolio Management:
Global Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standards, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Equity stocks of small- and mid-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 49 |
Aberdeen International Equity Fund (Unaudited)
Average Annual Total Return (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |||||||
Class A | w/o SC | 8.24% | 5.91% | 3.71% | ||||||
w/SC1 | 1.99% | 4.67% | 3.10% | |||||||
Class C | w/o SC | 7.64% | 5.20% | 3.01% | ||||||
w/SC2 | 6.64% | 5.20% | 3.01% | |||||||
Class R3 | w/o SC | 7.97% | 5.61% | 3.45% | ||||||
Institutional Service Class3 | w/o SC | 8.66% | 6.25% | 3.97% | ||||||
Institutional Class3 | w/o SC | 8.70% | 6.30% | 4.06% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | A 5.75% front-end sales charge was deducted. | |
2 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. | |
3 | Not subject to any sales charges. |
Performance of a $10,000 Investment (as of October 31, 2020)
Comparative performance of $10,000 invested in Class A shares of the Aberdeen International Equity Fund, the Morgan Stanley Capital International (MSCI) All Country World ex-US Index (Net Dividends), MSCI All Country World ex U.S. Index (Gross Dividends) and the Consumer Price Index (CPI) over a 10-year period ending October 31, 2020. Effective February 28, 2020, the MSCI All Country World ex U.S. Index (Net Dividends) replaced the MSCI All Country World ex U.S. Index (Gross Dividends) as the Fund's primary benchmark. The
change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as it is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The MSCI All Country World ex US Index captures large- and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the US) and 26 Emerging Markets (EM) countries. With 2,375 constituents, the index covers approximately 85% of the global equity opportunity set outside the US. DM countries in the Index are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK. EM countries in the Index are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
50 | 2020 Annual Report |
Aberdeen International Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | |||
Common Stocks | 99.3% | ||
Short-Term Investment | 1.2% | ||
Liabilities in Excess of Other Assets | (0.5%) | ||
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | |||
Health Care | 19.8% | ||
Information Technology | 17.9% | ||
Consumer Staples | 14.1% | ||
Financials | 13.8% | ||
Industrials | 11.7% | ||
Communication Services | 7.2% | ||
Materials | 6.7% | ||
Consumer Discretionary | 6.6% | ||
Real Estate | 1.5% | ||
Other | 0.7% | ||
100.0% |
Top Holdings* | |||
Tencent Holdings Ltd. | 4.6% | ||
Taiwan Semiconductor Manufacturing Co. Ltd. | 4.1% | ||
AIA Group Ltd. | 4.0% | ||
CSL Ltd. | 3.4% | ||
Nestle SA | 3.3% | ||
Diageo PLC | 3.2% | ||
Roche Holding AG | 3.2% | ||
L'Oreal SA | 3.1% | ||
LVMH Moet Hennessy Louis Vuitton SE | 3.0% | ||
Keyence Corp. | 3.0% | ||
Other | 65.1% | ||
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | |||
United Kingdom | 17.7% | ||
Japan | 10.9% | ||
France | 10.0% | ||
Switzerland | 6.5% | ||
Germany | 6.5% | ||
Netherlands | 5.9% | ||
Australia | 4.9% | ||
Israel | 4.6% | ||
China | 4.5% | ||
Taiwan | 4.1% | ||
Other | 24.4% | ||
100.0% |
2020 Annual Report | 51 |
Statement of Investments
October 31, 2020
Aberdeen International Equity Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (99.3%) | ||||||||
AUSTRALIA (4.9%) | ||||||||
Health Care (3.4%) | ||||||||
CSL Ltd. | 36,800 | $ | 7,450,428 | |||||
Real Estate (1.5%) | ||||||||
Goodman Group, REIT | 255,900 | 3,312,153 | ||||||
10,762,581 | ||||||||
BRAZIL (1.7%) | ||||||||
Consumer Discretionary (1.7%) | ||||||||
MercadoLibre, Inc. (a) | 3,100 | 3,763,555 | ||||||
CANADA (2.2%) | ||||||||
Industrials (2.2%) | ||||||||
Ritchie Bros Auctioneers, Inc. | 77,800 | 4,716,001 | ||||||
CHINA (4.5%) | ||||||||
Communication Services (4.5%) | ||||||||
Tencent Holdings Ltd. | 129,300 | 9,879,245 | ||||||
DENMARK (3.8%) | ||||||||
Health Care (3.8%) | ||||||||
Genmab AS (a) | 12,600 | 4,208,713 | ||||||
Novo Nordisk AS, Class B | 63,800 | 4,068,248 | ||||||
8,276,961 | ||||||||
FRANCE (10.0%) | ||||||||
Consumer Discretionary (4.9%) | ||||||||
Hermes International | 4,400 | 4,096,839 | ||||||
LVMH Moet Hennessy Louis Vuitton SE | 14,100 | 6,609,342 | ||||||
10,706,181 | ||||||||
Consumer Staples (3.1%) | ||||||||
L'Oreal SA | 20,600 | 6,657,617 | ||||||
Industrials (2.0%) | ||||||||
Schneider Electric SE | 36,000 | 4,374,231 | ||||||
21,738,029 | ||||||||
GERMANY (6.5%) | ||||||||
Communication Services (1.3%) | ||||||||
CTS Eventim AG & Co. KGaA (a) | 63,900 | 2,832,517 | ||||||
Financials (2.8%) | ||||||||
Deutsche Boerse AG | 41,603 | 6,130,348 | ||||||
Materials (2.4%) | ||||||||
Linde PLC (a) | 23,396 | 5,127,585 | ||||||
14,090,450 | ||||||||
HONG KONG (4.0%) | ||||||||
Financials (4.0%) | ||||||||
AIA Group Ltd. | 910,900 | 8,669,193 |
Shares or Principal Amount | Value | |||||||
INDIA (2.6%) | ||||||||
Financials (2.6%) | ||||||||
Housing Development Finance Corp. Ltd. | 218,800 | $ | 5,668,855 | |||||
ISRAEL (4.6%) | ||||||||
Information Technology (4.6%) | ||||||||
CyberArk Software Ltd. (a) | 44,200 | 4,382,430 | ||||||
NICE Ltd., ADR (a) | 24,300 | 5,546,718 | ||||||
9,929,148 | ||||||||
JAPAN (10.9%) | ||||||||
Consumer Staples (2.2%) | ||||||||
Ain Holdings, Inc. | 68,600 | 4,798,395 | ||||||
Financials (1.9%) | ||||||||
Japan Exchange Group, Inc. | 165,400 | 4,037,947 | ||||||
Industrials (2.0%) | ||||||||
Nihon M&A Center, Inc. | 75,700 | 4,445,221 | ||||||
Information Technology (3.0%) | ||||||||
Keyence Corp. | 14,500 | 6,580,426 | ||||||
Materials (1.8%) | ||||||||
Shin-Etsu Chemical Co. Ltd. | 28,900 | 3,860,079 | ||||||
23,722,068 | ||||||||
NETHERLANDS (5.9%) | ||||||||
Consumer Staples (2.3%) | ||||||||
Heineken NV | 57,000 | 5,045,500 | ||||||
Information Technology (3.6%) | ||||||||
Adyen NV (a)(b) | 2,000 | 3,361,486 | ||||||
ASML Holding NV | 12,300 | 4,450,176 | ||||||
7,811,662 | ||||||||
12,857,162 | ||||||||
NEW ZEALAND (3.4%) | ||||||||
Health Care (1.5%) | ||||||||
Fisher & Paykel Healthcare Corp. Ltd. | 138,000 | 3,182,098 | ||||||
Industrials (1.9%) | ||||||||
Auckland International Airport Ltd. (a) | 898,459 | 4,156,160 | ||||||
7,338,258 | ||||||||
NORWAY (1.4%) | ||||||||
Communication Services (1.4%) | ||||||||
Schibsted ASA, Class A (a) | 75,500 | 3,086,281 | ||||||
SINGAPORE (2.5%) | ||||||||
Financials (2.5%) | ||||||||
Oversea-Chinese Banking Corp. Ltd. | 871,978 | 5,378,139 | ||||||
SWEDEN (2.1%) | ||||||||
Industrials (2.1%) | ||||||||
Atlas Copco AB, A Shares | 102,200 | 4,511,226 |
See accompanying Notes to Financial Statements.
52 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen International Equity Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (continued) | ||||||||
SWITZERLAND (6.5%) | ||||||||
Consumer Staples (3.3%) | ||||||||
Nestle SA | 64,000 | $ | 7,198,585 | |||||
Health Care (3.2%) | ||||||||
Roche Holding AG | 21,700 | 6,972,890 | ||||||
14,171,475 | ||||||||
TAIWAN (4.1%) | ||||||||
Information Technology (4.1%) | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 591,000 | 8,941,637 | ||||||
UNITED KINGDOM (17.7%) | ||||||||
Consumer Staples (3.2%) | ||||||||
Diageo PLC | 216,000 | 6,980,655 | ||||||
Health Care (7.9%) | ||||||||
Abcam PLC | 281,000 | 5,362,241 | ||||||
AstraZeneca PLC | 55,000 | 5,522,301 | ||||||
Genus PLC | 118,300 | 6,287,016 | ||||||
17,171,558 | ||||||||
Industrials (1.5%) | ||||||||
Experian PLC | 85,700 | 3,139,524 | ||||||
Information Technology (2.6%) | ||||||||
AVEVA Group PLC | 101,400 | 5,628,490 | ||||||
Materials (2.5%) | ||||||||
Croda International PLC | 70,349 | 5,498,415 | ||||||
38,418,642 | ||||||||
Total Common Stocks | 215,918,906 |
Shares or Principal Amount | Value | |||||||
SHORT-TERM INVESTMENT (1.2%) | ||||||||
UNITED STATES (1.2%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (c) | 2,583,701 | $ | 2,583,701 | |||||
Total Short-Term Investment | 2,583,701 | |||||||
Total Investments (Cost $171,335,174) (d)—100.5% | 218,502,607 | |||||||
Liabilities in Excess of Other Assets—(0.5)% | (1,129,398 | ) | ||||||
Net Assets—100.0% | $ | 217,373,209 |
(a) | Non-income producing security. | |
(b) | Denotes a security issued under Regulation S or Rule 144A. | |
(c) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. | |
(d) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
2020 Annual Report | 53 |
Aberdeen International Real Estate Equity Fund (Unaudited)
Aberdeen International Real Estate Equity Fund returned -15.27% for the 12-month period ended October 31, 2020, versus the -6.86% return of its primary benchmark, the Morgan Stanley Capital International (MSCI) EAFE Index (Net Dividends), and the -19.04% return of the Financial Times Stock Exchange European Public Real Estate Association/National Association of Real Estate Investment Trusts (FTSE EPRA/NAREIT) Global ex US Index (Net Dividends) during the same period.
International real estate equities saw modestly positive performance from the beginning of the reporting period to late February 2020, when a sharp decline in share prices was prompted by the emergence and spread of COVID-19 in Europe and the Americas. The listed property market underperformed the broader equity universe over this period. This was driven by the inescapable fact that much of the sector includes venues where people congregate, such as malls or hotels, which faced direct, negative impacts from lockdowns and restrictions on movement. As people around the world were forced to work from their homes, the office sector also came under pressure amidst speculation that corporations will opt to rent less office in the future in favor of increased agile working arrangements. The listed real estate markets bottomed in March 2020, along with the broader equity market and continued a gradual recovery as investors adjusted their expectations to the post-COVID-19 world, which was boosted by substantial fiscal and monetary stimulus by central banks along the way.
As COVID-19 initially took hold the world over, countries seen as relative safe havens, such as Switzerland, Germany and Belgium, outperformed. In Asia, China and Hong Kong also showed relative resilience, likely reflecting the fact that valuations were already depressed by the U.S.-China trade war, as well as social unrest in Hong Kong. Conversely, emerging markets included some of the weakest-performing countries during the reporting period due to investors' concerns over currency weakness and the possibility that the region would be harder hit by the pandemic. During this phase, retail and hospitality sectors saw meaningful underperformance amidst restrictions placed on physical travel, as well as the prospect that social distancing would further accelerate consumer habits toward e-commerce and away from brick-and-mortar retail. On the other hand, logistics, residential and communications infrastructure specialists outperformed, as investors parked funds in sectors with more resilient cash flows. The market bottom in March 2020 was followed by a partial but dramatic rebound that was led by sectors that had sold off the most. This culminated in the "re-opening trade" that saw retail, hospitality and office sectors hit highs that would not be revisited until later. As it became increasingly apparent that a significant amount of the white-collar workforce around the world would shift to work-from-home amid the ongoing pandemic, office specialists sold off. Investors turned their focus to concerns over the extent that the shift to working from home would take hold and permanently reduce the demand for urban office space. From there, investors continued to favor defensive sectors, such as logistics, residential and communications infrastructure, until the beginning of the third quarter of 2020, when risk appetite gradually resumed.
The Fund outperformed its benchmark, the FTSE EPRA/NAREIT Global ex US Index (Net Dividends), over the 12-month period ended
October 31, 2020. The largest contributors to relative performance were the Fund's holdings in the U.S., China and France. In the U.S., the Fund's positions in data-center real estate investment trust (REIT) specialists Equinix, Inc. and Digital Realty Trust, Inc., neither of which is a constituent of the benchmark index, bolstered performance for the reporting period. Data-center REITs were among the few listed real estate companies globally to record positive stock-price performance over the reporting period. This reflected their focus on the digital, rather than physical, economy, which has been far less disrupted by restrictions to personal movement. The Fund's holding in ProLogis Inc. also contributed significantly to performance for the reporting period, as the industrials sector continued to be a major beneficiary of the shift to e-commerce that has been accelerate by the pandemic. The positive contribution to performance from the Fund's holdings in China was driven by stock selection, primarily the Fund's position in logistics real estate platform provider ESR Cayman Ltd., which became a "market darling" shortly after its initial public offering (IPO) in late 2019. ESR Cayman saw strong share-price performance on the back of stronger-than-expected profit growth, as well as growth in assets under management, as the company capitalized on a strong market for logistics development and investment amid the pandemic. Finally, the Fund's outperformance in France was driven by an underweight position in European commercial real estate company Unibail-Rodamco-Westfield SE and the overall European retail sector, where already-struggling operating fundamentals were further exacerbated by the onset of the global pandemic.
On the downside, the principal detractors from Fund performance were positions in Spain, Hong Kong and Singapore. In Spain, allocation was the primary detractor from performance. In terms of stocks, the Fund's exposure to the office sector through two holdings – multinational corporation Inmobiliaria Colonial S.A. and office REIT Merlin Properties S.A. – detracted from performance for the reporting period, as the country continued to struggle to get COVID-19 infections under control. Both the allocation and stock selection in Hong Kong weighed on Fund performance, as the country proved relatively resilient compared to the rest of the world because valuations were already depressed due to the U.S.-China trade war and social unrest. Overall stock selection hampered Fund performance for the reporting period due mainly to the position in CK Asset Holdings Ltd., a property developer headquartered in Hong Kong, which disappointed the market with a dividend cut amid the pandemic, while most of its peers raised their pay-out ratios in order to maintain the nominal value of the dividend per share. In Singapore, the Fund's underweight positioning in the REIT sector hurt performance, as it outperformed despite extended valuations. The Fund's position in Singapore-based Lendlease Global Commercial REIT, which is not a constituent of the benchmark FTSE EPRA/NAREIT Global ex US Index, was the largest detractor from performance for the reporting period, as shares of the company sold off in line with other retail-specialist REITs in the region.
Thus far, the Aberdeen Standard Investments economic team's base case has played out as expected, as we have witnessed a gradual economic recovery as 2020 has progressed. Investors appear to believe that they have improving clarity into the likely range of economic
54 | 2020 Annual Report |
Aberdeen International Real Estate Equity Fund (Unaudited) (concluded)
outcomes in the near term and this has given the market confidence to eliminated much of the extreme share price cheapness seen at the onset of the pandemic. Going forward, our view is that operating conditions for consumer-facing real estate has likely become even more challenged as consumers accelerated their shift towards e-commerce. Furthermore, we are focused on how the pandemic may have set in motion permanent changes in human movement and behavior that may drive structural changes in real estate. One such area of focus is the extent to which agile working practices will reduce demand for office space in the medium to long term. Another example is how residential preferences may change in terms of location, or the preference to rent versus own, etc. We continue to favor segments of real estate that benefit from robust fundamentals and favorable long-term trends, such as industrial, residential and technology infrastructure. We continue to maintain a focus on companies with cash-flow resilience and balance-sheet strength, as we believe that these companies are better positioned to preserve shareholder value, as well as take advantage of opportunities that may emerge in the current, uncertain economic backdrop. Concurrently, as economic recovery progresses, we believe that it will become increasingly important to leverage our forensic approach to seeking value across our investable universe to identify pockets of under-pricing and relative value, particularly in sectors that have been out of favor amid the pandemic.
The Fund's country positioning remains overweight to the Americas versus the benchmark index, largely driven by the U.S., where we remain optimistic on the data-center and logistics REITs. The Fund has an underweight position in Continental Europe, where we believe that the economic recovery continues to be delayed by resurging COVID-19 infections. Throughout the reporting period, we reduced the Fund's exposure to the more cyclical office landlords, while adding to German residential exposure, which we believe offers an attractive balance of income resilience and value. The Fund remains underweight to U.K., where we see similar challenges with the pandemic, in addition to ongoing uncertainty over Brexit. In the Asia-Pacific region, the Fund has a neutral position in Australia, where we have overweight in positions in stocks with both cyclical and secular upside, offset by a large underweight to shopping malls. The Fund maintains a modestly overweight allocation to Japan, while we retain a preference for the J-REITs over developers, the latter of which most likely will face cyclical challenges, in our view. Elsewhere, Singapore remains a modest underweight position in the Fund, reflecting our view that valuations generally continue to look stretched in a global context.
Within emerging markets, the Fund's exposure remains focused on China and Brazil. The Fund has an overweight position relative to the benchmark in China, driven by positions in mid-tier, non-state-owned property developers, as well as positions in a logistics developer and asset manager that are not constituents of the benchmark FTSE EPRA/NAREIT Global ex US Index. The Fund has an underweight position in Brazil, where its primary exposure is in residential development targeted at mid- to high-income buyers, for which we believe that demand is likely to remain healthy under the backdrop of declining borrowing costs.
Portfolio Management:
Global Real Estate team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
The Fund's strategy of concentrating in companies in a specific industry means that its performance will be closely tied to the performance of a particular market segment. The Fund's concentration in these companies may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on the Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag behind the performance of other industries or the broader market as a whole.
Investment in real estate investment trusts ("REITs") and real estate involves the risks that are associated with direct ownership of real estate and with the real estate industry in general. These risks include: declines in the value of real estate; risks related to local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income, neighborhood values or the appeal of properties to tenants; changes in interest rates; and changes in general economic and market conditions.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Equity securities of small- and mid-cap companies carry greater risk, and more volatility than equity securities of larger, more established companies.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 55 |
Aberdeen International Real Estate Equity Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5Yr. | 10Yr. | |||||
Class A | w/o SC | (15.48%) | 0.74% | N.A. | ||||
w/SC2 | (20.35%) | (0.45%) | N.A. | |||||
Institutional Class3 | w/o SC | (15.27%) | 0.99% | (0.49%) |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns prior to May 7, 2018 reflect the performance of a predecessor fund (the "Predecessor Fund"). Returns of the Predecessor Fund have not been adjusted to reflect the expenses applicable to the respective classes. The Fund and the Predecessor Fund have substantially similar investment objectives and strategies. Please consult the Fund's prospectus for more detail. |
2 | A 5.75% front-end sales charge was deducted. |
3 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* Minimum Initial Investment
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen International Real Estate Equity Fund, the Morgan Stanley Capital International (MSCI) EAFE Index (Net Dividends), MSCI EAFE Index (Gross Dividends), FTSE EPRA/NAREIT
Global ex US Index (Net Dividends) and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Effective February 28, 2020, the MSCI EAFE Index (Net Dividends) replaced the MSCI EAFE Index (Gross Dividends) as the Fund's primary benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as it is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses or sales charges. Investors cannot invest directly in market indexes.
MSCI EAFE Index is a total return, free-float adjusted market capitalization weighted index that measures the performance of stocks from Europe, Asia, and the Far East. This is one of the most widely used measures of international stock performance.
FTSE EPRA/NAREIT Global ex-U.S. Index is a total return index that is designed to represent general trends in eligible real estate equities outside the United States.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
56 | 2020 Annual Report |
Aberdeen International Real Estate Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 99.7% | |
Short-Term Investment | 0.1% | |
Other Assets in Excess of Liabilities | 0.2% | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Sub-Industries | As a Percentage of Net Assets | |
Real Estate Development | 19.1% | |
Industrial REITs | 17.7% | |
Real Estate Operating Companies | 16.2% | |
Diversified Real Estate Activities | 13.4% | |
Office REITs | 11.4% | |
Diversified REITs | 7.8% | |
Specialized REITs | 5.6% | |
Retail REITs | 4.1% | |
Residential REITs | 3.2% | |
Hotels, Resorts & Cruise Lines | 0.7% | |
Other | 0.8% | |
100.0% |
Top Holdings* | ||
Vonovia SE | 6.7% | |
Segro PLC | 4.1% | |
China Resources Land Ltd. | 3.3% | |
CK Asset Holdings Ltd. | 3.2% | |
Mitsubishi Estate Co., Ltd. | 3.2% | |
GLP J-REIT | 3.1% | |
Longfor Group Holdings Ltd. | 3.0% | |
Sumitomo Realty & Development Co., Ltd. | 2.7% | |
Sunac China Holdings Ltd. | 2.6% | |
Sun Hung Kai Properties Ltd. | 2.4% | |
Other | 65.7% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
Japan | 21.2% | |
Germany | 12.7% | |
China | 12.3% | |
Hong Kong | 12.2% | |
United States | 8.0% | |
United Kingdom | 7.5% | |
Singapore | 5.8% | |
Australia | 4.9% | |
Sweden | 3.8% | |
Canada | 2.4% | |
Other | 9.2% | |
100.0% |
2020 Annual Report | 57 |
Statement of Investments
October 31, 2020
Aberdeen International Real Estate Equity Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (99.7%) | ||||||||
AUSTRALIA (4.9%) | ||||||||
Real Estate (4.9%) | ||||||||
Charter Hall Group | 22,767 | $ 197,402 | ||||||
Dexus, REIT | 54,292 | 328,469 | ||||||
GDI Property Group, REIT | 208,372 | 155,836 | ||||||
Lendlease Corp., Ltd. | 15,856 | 133,383 | ||||||
Mirvac Group, REIT | 137,198 | 203,461 | ||||||
1,018,551 | ||||||||
AUSTRIA (1.3%) | ||||||||
Real Estate (1.3%) | ||||||||
CA Immobilien Anlagen AG | 9,524 | 261,610 | ||||||
BRAZIL (0.5%) | ||||||||
Consumer Discretionary (0.5%) | ||||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 25,048 | 99,486 | ||||||
CANADA (2.4%) | ||||||||
Real Estate (2.4%) | ||||||||
Allied Properties Real Estate Investment Trust | 9,578 | 232,279 | ||||||
Canadian Apartment Properties, REIT | 8,056 | 258,979 | ||||||
491,258 | ||||||||
CHINA (12.3%) | ||||||||
Real Estate (12.3%) | ||||||||
China Overseas Land & Investment Ltd. | 50,629 | 127,169 | ||||||
China Resources Land Ltd. | 166,615 | 681,400 | ||||||
CIFI Holdings Group Co., Ltd. | 277,198 | 192,038 | ||||||
Logan Group Co., Ltd. | 129,290 | 202,854 | ||||||
Longfor Group Holdings Ltd. (a) | 112,937 | 618,794 | ||||||
Sunac China Holdings Ltd. | 145,948 | 540,905 | ||||||
Times China Holdings Ltd. | 123,312 | 164,734 | ||||||
2,527,894 | ||||||||
FRANCE (0.4%) | ||||||||
Real Estate (0.4%) | ||||||||
Klepierre SA, REIT | 7,008 | 88,792 | ||||||
GERMANY (12.7%) | ||||||||
Real Estate (12.7%) | ||||||||
alstria office REIT-AG | 15,518 | 197,539 | ||||||
Deutsche Wohnen SE | 5,278 | 266,396 | ||||||
Instone Real Estate Group AG (a)(b) | 19,441 | 402,304 | ||||||
TAG Immobilien AG (b) | 11,839 | 348,891 | ||||||
Vonovia SE | 21,791 | 1,391,649 | ||||||
2,606,779 | ||||||||
HONG KONG (12.2%) | ||||||||
Real Estate (12.2%) | ||||||||
CK Asset Holdings Ltd. | 141,914 | 658,976 | ||||||
ESR Cayman Ltd. (a)(b)(c) | 126,658 | 382,561 | ||||||
Link REIT | 44,361 | 338,557 | ||||||
New World Development Co. Ltd. | 76,207 | 363,842 |
Shares or Principal Amount | Value | |||||||
Shimao Group Holdings Ltd. | 80,204 | $ 284,108 | ||||||
Sun Hung Kai Properties Ltd. | 37,811 | 486,696 | ||||||
2,514,740 | ||||||||
JAPAN (21.2%) | ||||||||
Real Estate (21.2%) | ||||||||
Daiwa Office Investment Corp., REIT | 53 | 287,611 | ||||||
Daiwa Securities Living Investments Corp. | 410 | 400,497 | ||||||
GLP J-REIT | 418 | 644,409 | ||||||
Hulic Reit, Inc., REIT | 277 | 364,155 | ||||||
Invesco Office J-Reit, Inc., REIT | 2,015 | 249,976 | ||||||
Japan Excellent, Inc. | 258 | 283,874 | ||||||
Kenedix Retail REIT Corp., REIT | 54 | 103,351 | ||||||
LaSalle Logiport REIT | 246 | 382,964 | ||||||
Mitsubishi Estate Co., Ltd. | 44,000 | 656,299 | ||||||
Mitsui Fudosan Logistics Park, Inc., REIT | 76 | 363,119 | ||||||
Sankei Real Estate, Inc., REIT | 80 | 72,366 | ||||||
Sumitomo Realty & Development Co., Ltd. | 20,500 | 548,566 | ||||||
4,357,187 | ||||||||
MEXICO (1.7%) | ||||||||
Real Estate (1.7%) | ||||||||
Corp Inmobiliaria Vesta SAB de CV, REIT | 64,980 | 104,984 | ||||||
Macquarie Mexico Real Estate Management SA de CV, REIT (a) | 146,096 | 168,195 | ||||||
Prologis Property Mexico SA de CV, REIT | 39,312 | 79,100 | ||||||
352,279 | ||||||||
NETHERLANDS (0.4%) | ||||||||
Real Estate (0.4%) | ||||||||
Unibail-Rodamco-Westfield | 2,214 | 89,625 | ||||||
NORWAY (1.5%) | ||||||||
Real Estate (1.5%) | ||||||||
Entra ASA (a) | 23,899 | 312,432 | ||||||
PHILIPPINES (1.2%) | ||||||||
Real Estate (1.2%) | ||||||||
Ayala Land, Inc. | 279,392 | 190,200 | ||||||
Megaworld Corp. (b) | 1,019,705 | 63,793 | ||||||
253,993 | ||||||||
SINGAPORE (5.8%) | ||||||||
Real Estate (5.8%) | ||||||||
AIMS APAC REIT | 289,620 | 250,459 | ||||||
Ascendas Real Estate Investment Trust | 207,500 | 437,850 | ||||||
Keppel DC REIT | 132,900 | 282,175 | ||||||
Lendlease Global Commercial REIT | 499,800 | 223,337 | ||||||
1,193,821 | ||||||||
SPAIN (2.0%) | ||||||||
Real Estate (2.0%) | ||||||||
Inmobiliaria Colonial Socimi SA, REIT | 38,748 | 275,832 | ||||||
Merlin Properties Socimi SA | 20,246 | 136,277 | ||||||
412,109 |
See accompanying Notes to Financial Statements.
58 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen International Real Estate Equity Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (continued) | ||||||||
SWEDEN (3.8%) | ||||||||
Consumer Discretionary (0.7%) | ||||||||
Pandox AB (b) | 15,009 | $ 149,843 | ||||||
Real Estate (3.1%) | ||||||||
Catena AB | 6,693 | 272,401 | ||||||
Fabege AB | 14,578 | 184,075 | ||||||
Kungsleden AB | 21,952 | 186,280 | ||||||
642,756 | ||||||||
792,599 | ||||||||
UNITED KINGDOM (7.5%) | ||||||||
Real Estate (7.5%) | ||||||||
Land Securities Group PLC | 66,312 | 437,528 | ||||||
LondonMetric Property PLC, REIT | 92,414 | 258,383 | ||||||
Segro PLC | 72,092 | 842,373 | ||||||
South Asian Real Estate Pvt. Ltd. (a)(b)(c)(d) | 2,000,000 | 2 | ||||||
1,538,286 | ||||||||
UNITED STATES (7.9%) | ||||||||
Real Estate (7.9%) | ||||||||
Alexandria Real Estate Equities, Inc. | 1,775 | 268,948 | ||||||
Digital Realty Trust, Inc. | 2,721 | 392,640 | ||||||
Equinix, Inc., REIT | 650 | 475,306 | ||||||
Prologis, Inc., REIT | 4,834 | 479,533 | ||||||
1,616,427 | ||||||||
Total Common Stocks | 20,527,868 |
Shares or Principal Amount | Value | |||||||
SHORT-TERM INVESTMENT (0.1%) | ||||||||
UNITED STATES (0.1%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (e) | 19,302 | $ 19,302 | ||||||
Total Short-Term Investment | 19,302 | |||||||
Total Investments (Cost $33,029,873) (f)—99.8% | 20,547,170 | |||||||
Other Assets in Excess of Liabilities—0.2% | 43,855 | |||||||
Net Assets—100.0% | $20,591,025 |
(a) | Denotes a security issued under Regulation S or Rule 144A. |
(b) | Non-income producing security. |
(c) | Illiquid security. |
(d) | Fair Value is determined pursuant to procedures approved by the Fund's Board of Trustees. See Note 2(a) of the accompanying Notes to Financial Statements for inputs used. See Note 2(a) of the accompanying Notes to Financial Statements. |
(e) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(f) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
2020 Annual Report | 59 |
Aberdeen International Small Cap Fund (Unaudited)
Aberdeen International Small Cap Fund (Institutional Class shares net of fees) returned 13.41% for the 12-month period ended October 31, 2020, versus the 0.07% return of its benchmark, the Morgan Stanley Capital International (MSCI) All Country (AC) World ex USA Small Cap Index (Net Dividends), during the same period.
International small-cap equities posted marginal gains amid market volatility over the 12-month period ended October 31, 2020. Early in the reporting period, trade tensions between the U.S. and China drove global equity markets, with the U.S. implementing punitive tariffs as leverage in renegotiations. Thereafter, the 2019 calendar year ended on a positive note as both countries seemingly set aside their differences and worked towards a preliminary trade agreement.
The start of 2020, however, brought fresh woes in the form of the COVID-19 pandemic, which spread rapidly from China to nearly all parts of the globe. This led many countries to shut their borders and impose lockdowns in an effort to limit contagion. As business activity ground to a halt, governments and central banks worldwide used fiscal and monetary tools in a bid to support flagging economic growth in their countries. U.S. lawmakers enacted the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package, while the Federal Reserve cut its benchmark interest rate to near 0% and revamped its approach to managing inflation, signaling low interest rates for a protracted period. Across the Atlantic, the European Union agreed to raise US$857 billion from financial markets in an effort to support member states and sectors most affected by the pandemic, while the European Central Bank extended its US$1.6 trillion emergency bond purchase program to mid-2021.
As COVID-19 infection rates ebbed in the summer of 2020, governments worldwide eased social-distancing measures, eager to allow their economies some respite. However, a resurgence of infections, particularly in the U.S. and Europe, subsequently forced many nations to reimpose movement restrictions. This weighed heavily on global equity markets towards the end of the reporting period.
The Fund outperformed its benchmark, the MSCI All Country AC World ex USA Small Cap Index (Net Dividends), due mainly to positive stock selection in the UK, Japan and Israel.
Among individual stock contributors to Fund performance, shares of Switzerland-based medical device maker Tecan Group AG rose during the reporting period on strong earnings for the first half of its 2020 fiscal year due to robust demand for its laboratory testing equipment amid COVID-19. Israel-based garment-printing specialist Kornit Digital Ltd.'s stock price moved higher following a sharp recovery in demand for its products. Investors were also optimistic about the company's partnership with U.S.-based e-commerce giant Amazon.com Inc. (which the Fund did not hold as of the end of the reporting period), which is also one of Kornit Digital's major shareholders, extended an existing agreement to purchase US$400 million in digital-printing equipment over the next five years. Shares of Israeli pool-cleaning robot-maker Maytronics Ltd. advanced on the strength of its positive results for the second quarter of its 2020 fiscal year. The company's sales increased as people spent more time at
home, which drove the need to service and maintain their pools. Sales of Maytronics' new line of robots also boosted its earnings.
Conversely, the Fund's holding in Thailand-based Tesco Lotus Retail Growth Freehold and Leasehold Property Fund weighed on performance for the reporting period. The hypermarket and mall operator's shares declined after its businesses were hit by the COVID-19-related lockdowns. However, we believe that the worst is over for the company, with foot traffic in its stores improving as the Thai government gradually ease social-distancing measures.
Shares of Mexican airport operator Grupo Aeroportuario del Sureste, S.A.B. de C.V. (Asur) moved lower over the reporting period as passenger traffic remained hampered by the COVID-19 pandemic. Nevertheless, we believe that Asur's healthy liquidity levels provide a competitive edge in the sector, allowing the company to position itself for an eventual recovery.
Indonesian property developer Pakuwon Jati's stock price fell on investors' expectations that a change in accounting standards from 2020 could weigh on its revenue. The company's shopping-mall revenues were also hampered after the Indonesian government reimposed movement restrictions due to resurgence in coronavirus infections. Nevertheless, we believe that Pakuwon Jati's sound balance sheet and diversified income base should help it ride out the crisis. In our opinion, the company may also benefit from attrition as relatively weaker property developers exit the market.
During the reporting period, we took advantage of market volatility to initiate holdings in several companies at what we believed were attractive valuations. These include: Nihon M&A Center Inc., a mergers-and-acquisitions brokerage in Japan with an established national network. In our view, the company should benefit from structural growth drivers as aging business owners look to sell their companies; Israel-based chip supplier Nova Measuring Instruments Ltd. as we believe that it is a high-quality business; Israeli-American garment-printing specialist Kornit Digital Ltd. due to our view that it has a long-term opportunity to take market share given its strong product line; Brazilian medical education group Afya S.A., which we believe is positioned to benefit from market consolidation; Indian contract researcher Syngene International Ltd., which in our judgment should continue to benefit from the growth in clinical trial outsourcing; and CTS Eventim AG & Co., Europe's leading live-entertainment ticketing platform, as we believe that its business is backed by a solid balance sheet and should return to normal once the pandemic passes.
To fund the initiations, we exited the Fund's positons in the following companies: Brazilian real estate firm Multiplan Empreendimentos Imobiliarios S.A. (Multiplan) and Brazilian dental benefits company Odontoprev S.A. to reduce the Fund's overall exposure to Latin America; Vietnam's Techcombank as foreign-ownership caps bar us from increasing our stake in the lender; and India-based consumer goods maker Jyothy Laboratories Ltd., lubricant producers Castrol India Ltd., and Germany-based Fuchs Petrolub SE, brewer Carlsberg Malaysia Bhd, as well as Brazilian port operator Wilson Sons Ltd., as we believed that there were better investment opportunities elsewhere. We also sold the Fund's shares in German eyewear
60 | 2020 Annual Report |
Aberdeen International Small Cap Fund (Unaudited) (concluded)
company Fielmann AG as its market capitalization had grown to exceed the Fund's small-cap threshold; Swiss security group Dormakaba Holding AG as it has struggled to integrate recent acquisitions; Singapore's Raffles Medical Group Ltd., a healthcare services provider, as its ability to grow profits is hampered by the coronavirus outbreak, which will delay the completion of its Shanghai hospital; and Chilean wine-maker Vina Concha y Toro S.A. as the global wine industry has proven to be extremely competitive, especially in the mass-market segment.
The world remains in a state of uncertainty as the approaching winter in the Northern Hemisphere coincides with fresh waves of COVID-19 infections in Europe and the U.S. Many governments globally have reimposed social-distancing measures to contain the virus, delaying prospects for a full economic recovery from the pandemic, in our view. To compound the matter, relations between the U.S. and China continue to deteriorate, with the trajectory unlikely to be altered much by the recent U.S. elections, in our view. On a more positive note, we believe that the continued infusion of massive monetary and fiscal stimuli to economies worldwide should continue to support equity prices.
From a Fund perspective, we are giving serious consideration to two key aspects: how normalized earnings will look as we move forward in this crisis, and whether companies are well-positioned for a post-COVID-19 world. In such times of uncertainty, we believe that sound bottom-up analysis and stock-picking strategies are even more crucial. In our opinion, we have the advantage of a solid proprietary research platform, along with a well-resourced and experienced team that has navigated many past crises. Amid the current market volatility, we will continue to seek what we believe are good-quality companies at attractive valuations, while actively engaging with their management teams in an effort to ensure robust corporate governance and high standards of sustainability.
Portfolio Management:
Global Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end
sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Smaller company stocks are usually less stable in price and less liquid than those of larger, more established companies, and therefore carry greater risk to investors.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 61 |
Aberdeen International Small Cap Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |||||
Class A | w/o SC | 13.02% | 10.20% | 8.56% | ||||
w/SC2 | 6.54% | 8.90% | 7.92% | |||||
Class C | w/o SC | 12.27% | 9.46% | 7.82% | ||||
w/SC3 | 11.27% | 9.46% | 7.82% | |||||
Class R4 | w/o SC | 12.68% | 9.85% | 8.24% | ||||
Institutional Class4 | w/o SC | 13.41% | 10.58% | 8.90% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | The Fund changed its investment strategy effective February 29, 2016. Performance information for periods prior to February 29, 2016 does not reflect the current investment strategy. Please consult the Fund's prospectus for more detail. |
2 | A 5.75% front-end sales charge was deducted. |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
4 | Not subject to any sales charges. |
Performance of a $10,000 Investment (as of October 31, 2020)
Comparative performance of $10,000 invested in Class A shares of the Aberdeen International Small Cap Fund, Morgan Stanley Capital Index (MSCI) All Country World (ACWI) ex-USA Small Cap Index (Net Dividends), MSCI ACWI ex-USA Small Cap Index (Gross Dividends) and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Effective February 28, 2020, the MSCI All Country World ex-USA Small Cap Index (Net Dividends) replaced the MSCI All Country World ex-USA Small Cap Index (Gross Dividends) as the
Fund's primary benchmark. The change from a gross to a net dividend benchmark is in line with industry practice and is more appropriate for the Fund as it is calculated net of withholding taxes, to which the Fund is generally subject with respect to non-U.S. securities. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The MSCI ACWI ex USA Small Cap Index captures small cap representation across 22 of 23 Developed Markets (DM) countries (excluding the US) and 26 Emerging Markets (EM) countries. With 4,231 constituents, the index covers approximately 14% of the global equity opportunity set outside the US. DM countries in the Index are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK. EM countries in the Index are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
62 | 2020 Annual Report |
Aberdeen International Small Cap Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 97.6% | |
Short-Term Investment | 2.2% | |
Other Assets in Excess of Liabilities | 0.2% | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Industrials | 25.3%* | |
Health Care | 21.5% | |
Information Technology | 16.0% | |
Consumer Discretionary | 14.2% | |
Consumer Staples | 10.5% | |
Real Estate | 4.0% | |
Financials | 2.9% | |
Materials | 2.2% | |
Communication Services | 1.0% | |
Other | 2.4% | |
100.0% |
* | As of October 31, 2020, the Fund's holdings in the Industrials sector were allocated to eight industries: Commercial Services & Supplies (5.2%), Engineering & Construction (3.7%), Computers & Peripherals (3.3%), Metal Fabricate/Hardware (3.1%), Transportation (2.9%), Machinery-Diversified (2.9%), Aerospace & Defense (2.2%) and Electronics (2.0%). |
Top Holdings* | ||
Genus PLC | 4.0% | |
Abcam PLC | 3.4% | |
Tecan Group AG | 3.4% | |
Kornit Digital Ltd. | 3.3% | |
Dechra Pharmaceuticals PLC | 3.3% | |
Dino Polska SA | 3.1% | |
VAT Group AG | 3.1% | |
Interparfums SA | 3.0% | |
Nova Measuring Instruments Ltd. | 3.0% | |
Afya Ltd., Class A | 3.0% | |
Other | 67.4% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
United Kingdom | 19.1% | |
Israel | 13.6% | |
Japan | 10.8% | |
Switzerland | 6.5% | |
Australia | 5.1% | |
India | 4.9% | |
Brazil | 4.5% | |
Germany | 3.9% | |
Indonesia | 3.2% | |
Poland | 3.1% | |
Other | 25.3% | |
100.0% |
2020 Annual Report | 63 |
Statement of Investments
October 31, 2020
Aberdeen International Small Cap Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (97.6%) | ||||||||
AUSTRALIA (5.1%) | ||||||||
Consumer Discretionary (2.7%) | ||||||||
ARB Corp. Ltd. | 173,900 | $ 3,766,853 | ||||||
Information Technology (2.4%) | ||||||||
Altium Ltd. | 127,500 | 3,346,514 | ||||||
7,113,367 | ||||||||
BRAZIL (4.5%) | ||||||||
Consumer Discretionary (4.5%) | ||||||||
Afya Ltd., Class A (a) | 171,600 | 4,118,400 | ||||||
Arezzo Industria e Comercio SA | 207,700 | 2,182,715 | ||||||
6,301,115 | ||||||||
CANADA (2.4%) | ||||||||
Industrials (2.4%) | ||||||||
Ritchie Bros Auctioneers, Inc. | 55,600 | 3,370,304 | ||||||
CHILE (2.6%) | ||||||||
Consumer Staples (1.8%) | ||||||||
Embotelladora Andina SA | 1,367,400 | 2,519,779 | ||||||
Real Estate (0.8%) | ||||||||
Parque Arauco SA | 838,800 | 1,076,133 | ||||||
3,595,912 | ||||||||
DENMARK (2.6%) | ||||||||
Information Technology (2.6%) | ||||||||
SimCorp A/S | 30,100 | 3,590,136 | ||||||
FRANCE (3.0%) | ||||||||
Consumer Staples (3.0%) | ||||||||
Interparfums SA (a) | 92,609 | 4,211,819 | ||||||
GERMANY (3.9%) | ||||||||
Communication Services (1.0%) | ||||||||
CTS Eventim AG & Co. KGaA (a) | 32,400 | 1,436,206 | ||||||
Financials (2.9%) | ||||||||
Hypoport SE (a) | 7,600 | 3,979,243 | ||||||
5,415,449 | ||||||||
HONG KONG (2.9%) | ||||||||
Industrials (2.9%) | ||||||||
Kerry Logistics Network Ltd. | 1,957,900 | 4,089,044 | ||||||
INDIA (4.9%) | ||||||||
Health Care (4.9%) | ||||||||
Sanofi India Ltd. | 29,200 | 3,153,138 | ||||||
Syngene International Ltd. (a)(b) | 513,200 | 3,693,556 | ||||||
6,846,694 | ||||||||
INDONESIA (3.2%) | ||||||||
Consumer Discretionary (1.8%) | �� | |||||||
Ace Hardware Indonesia Tbk PT | 22,609,900 | 2,411,021 |
Shares or Principal Amount | Value | |||||||
Real Estate (1.4%) | ||||||||
Pakuwon Jati Tbk PT (a) | 70,410,900 | $ 1,968,367 | ||||||
4,379,388 | ||||||||
ISRAEL (13.6%) | ||||||||
Consumer Discretionary (2.9%) | ||||||||
Maytronics Ltd. | 267,300 | 4,075,852 | ||||||
Industrials (3.3%) | ||||||||
Kornit Digital Ltd. (a) | 68,400 | 4,604,688 | ||||||
Information Technology (7.4%) | ||||||||
CyberArk Software Ltd. (a) | 35,800 | 3,549,570 | ||||||
NICE Ltd.(a) | 11,400 | 2,592,691 | ||||||
Nova Measuring Instruments Ltd. (a) | 74,300 | 4,133,309 | ||||||
10,275,570 | ||||||||
18,956,110 | ||||||||
ITALY (2.3%) | ||||||||
Consumer Discretionary (2.3%) | ||||||||
Brunello Cucinelli SpA (a) | 104,400 | 3,134,738 | ||||||
JAPAN (10.8%) | ||||||||
Consumer Staples (2.6%) | ||||||||
Ain Holdings, Inc. | 51,700 | 3,616,283 | ||||||
Health Care (2.5%) | ||||||||
Asahi Intecc Co. Ltd. | 113,900 | 3,529,553 | ||||||
Industrials (5.7%) | ||||||||
Nabtesco Corp. | 106,500 | 3,978,652 | ||||||
Nihon M&A Center, Inc. | 66,900 | 3,928,471 | ||||||
7,907,123 | ||||||||
15,052,959 | ||||||||
MEXICO (1.6%) | ||||||||
Industrials (1.6%) | ||||||||
Grupo Aeroportuario del Sureste SAB de CV, Class B (a) | 189,700 | 2,200,758 | ||||||
NEW ZEALAND (2.1%) | ||||||||
Industrials (2.1%) | ||||||||
Auckland International Airport Ltd. (a) | 644,700 | 2,982,303 | ||||||
POLAND (3.1%) | ||||||||
Consumer Staples (3.1%) | ||||||||
Dino Polska SA (a)(b) | 77,600 | 4,266,403 | ||||||
SWITZERLAND (6.5%) | ||||||||
Health Care (3.4%) | ||||||||
Tecan Group AG | 10,000 | 4,745,283 | ||||||
Industrials (3.1%) | ||||||||
VAT Group AG (a)(b) | 22,700 | 4,258,858 | ||||||
9,004,141 |
See accompanying Notes to Financial Statements.
64 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen International Small Cap Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (continued) | ||||||||
TAIWAN (1.6%) | ||||||||
Information Technology (1.6%) | ||||||||
Globalwafers Co. Ltd. | 151,000 | $ 2,198,904 | ||||||
THAILAND (1.8%) | ||||||||
Real Estate (1.8%) | ||||||||
Tesco Lotus Retail Growth Freehold & Leasehold Property Fund (c) | 5,140,800 | 2,456,951 | ||||||
UNITED KINGDOM (19.1%) | ||||||||
Health Care (10.7%) | ||||||||
Abcam PLC | 252,100 | 4,810,751 | ||||||
Dechra Pharmaceuticals PLC | 101,200 | 4,578,057 | ||||||
Genus PLC | 104,429 | 5,549,846 | ||||||
14,938,654 | ||||||||
Industrials (4.2%) | ||||||||
Rotork PLC | 772,700 | 2,815,298 | ||||||
Ultra Electronics Holdings PLC | 123,100 | 3,003,503 | ||||||
5,818,801 | ||||||||
Information Technology (2.0%) | ||||||||
AVEVA Group PLC | 50,300 | 2,792,042 | ||||||
Materials (2.2%) | ||||||||
Croda International PLC | 39,380 | 3,077,906 | ||||||
26,627,403 | ||||||||
Total Common Stocks | 135,793,898 |
Shares or Principal Amount | Value | |||||||
SHORT-TERM INVESTMENT (2.2%) | ||||||||
UNITED STATES (2.2%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (d) | 3,057,324 | $ 3,057,324 | ||||||
Total Short-Term Investment | 3,057,324 | |||||||
Total Investments (Cost $110,142,297) (e)—99.8% | 138,851,222 | |||||||
Other Assets in Excess of Liabilities—0.2% | 242,476 | |||||||
Net Assets—100.0% | $139,093,698 |
(a) | Non-income producing security. |
(b) | Denotes a security issued under Regulation S or Rule 144A. |
(c) | As of October 31, 2020, security is a closed-end fund incorporated in Thailand. |
(d) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(e) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
PLC | Public Limited Company |
See accompanying Notes to Financial Statements.
2020 Annual Report | 65 |
Aberdeen Realty Income & Growth Fund (Unaudited)
Aberdeen Realty Income & Growth Fund (Institutional Share Class net of fees) returned -17.85% for the 12-month period ended October 31, 2020, versus the 9.71% return of its primary benchmark, the U.S> broader-market S&P 500 Index, and the -21.01% return of the Morgan Stanley Capital International (MSCI) US REIT Index during the same period.
The U.S. real estate investment trust (REIT) market, as measured by the MSCI US REIT Index, modestly outperformed the international REIT market, as represented by the Financial Times Stock Exchange European Public Real Estate Association/National Association of Real Estate Investment Trusts (FTSE EPRA/NAREIT) Global-ex US Real Estate Index,* but significantly underperformed the S&P 500 Index, a broader U.S. equity market benchmark, over the reporting period. Through the middle of February 2020, the U.S. REIT market posted strong returns on investors' hopes of continued economic prosperity and accommodative capital markets providing ample liquidity for expansion. However, the unprecedented coronavirus (COVID-19) pandemic, which reached the U.S. in late February 2020, led to a dramatic market sell-off that erased these gains. As uncertainty and fear spread, particularly around the likelihood of rent collections in sectors that were hardest hit by the economic lockdowns put in place to attempt to control spread of COVID-19, market performance suffered. The combination of fiscal stimulus from the federal government, accommodative monetary policy in the form of both liquidity injections and U.S. Federal Reserve promises to keep interest rates extremely low, even if inflation began to, and the reopening of the economy as the first wave of COVID-19 crested, led to a sharp rebound in REIT share prices in the late spring. After this partial recovery in share prices, the REIT market became relatively range bound throughout the summer and early fall, with uncertainty about the economic outlook and demand for space into 2021 becoming the predominant driver of performance.
During the reporting period, an overweight allocation relative to the benchmark MSCI US REIT Index to the industrials sector, along with strong stock selection within this sector, benefited the Fund's relative performance. Fund performance was bolstered by overweight positions in Prologis, Inc. and Duke Realty Corp., large industrial REITs, which benefited from strong demand for space stemming from the growth of e-commerce. Fund performance also was bolstered by overweight allocations to the data-center sector, and underweight allocations to the retail and apartment sectors. The Fund had long held these allocations in the industrial, data-center and retail sectors, due to our belief that e-commerce, mobile communication and use of cloud computing would continue to attract greater demand in order to meet the shift in consumer patterns and lifestyle choices. The outbreak of COVID-19 and subsequent social-distancing policies accelerated several of these trends, thereby benefiting Fund performance. The underweight allocation to the apartment sector was a newer position in the Fund, taken as the pandemic intensified, due to a belief that renters would look to leave their dense urban apartments in favor of houses in the suburbs where they could have more space. The largest individual contributor to Fund performance
was an underweight position in apartment REIT Equity Residential. The company's large, dense urban high-rise portfolio was hit particularly hard by residents moving out and the need to introduce significant concessions and rent reductions. Elsewhere, the Fund's holding in global data-center REIT Equinix Inc. also contributed to performance.
Conversely, stock selection in the healthcare sector and an underweight position in the self-storage sector were the largest detractors from the Fund's relative performance for the reporting period. Concerns about the impact of COVID-19 on demand for senior housing drove the underperformance in Fund holdings Welltower, a senior-living-focused REIT, and Ventas, a healthcare REIT. The pandemic and the subsequent economic disruption created increased demand for storage space, driven by some younger urban dwellers moving furnishings into storage as they gave up high-cost apartments and moved back in with their families due to work-from-home orders from their employers. This more than offset our concerns that new supply that was expected to deliver in 2020, but was subsequently delayed due to pandemic-related construction disruptions, would weigh on rental rates and therefore income growth. In our view, the eventual introduction of a COVID-19 vaccine will allow a healing process to begin in the global economy. Nonetheless, we believe that there likely will be several months between vaccine development and widespread distribution, during which time economic activity will likely be curtailed, particularly for segments that rely on personal interactions. What's more, due to the uncertainty surrounding the timing of the recovery and how many of the changes in consumer behaviors will remain in place going forward, we expect many tenants to be reluctant to commit to longer-term leases, particularly in the retail and office sectors. Therefore, we remain pessimistic about the outlook for these sectors, despite what appear to be attractive valuations when compared to pre-pandemic levels. The segments of the real estate market that we favor – the industrials and technology infrastructure sectors – have been resilient on a relative basis and we anticipate that this will continue. In the current and forecasted low-yielding environment, despite the COVID-19 disruption, we believe that real estate should remain in demand as a result of the higher relative yields offered by the asset class.
While economic uncertainty remains high, we believe that it is prudent to take more of a barbell approach to portfolio construction at the current time. As such, we continue to pursue what we believe is sustainable income in our target markets, but to increase risk tolerance slowly where we see value opportunities that could be quickly realized as fears from coronavirus subside. To this extent, we maintain the Fund's focus on companies that, in our view, benefit from strong real estate fundamentals and long-term trends that appear likely to be reinforced in the current environment. In our opinion, rental resilience and balance-sheet strength are likely to remain important drivers of performance, positioning companies to preserve shareholder value, but also giving them the capacity to take advantage of opportunities that emerge. However, we also anticipate that the economic down-cycle should create opportunities to invest
* | The FTSE EPRA/NAREIT Global-ex US Real Estate Index is an unmanaged index considered representative of real estate companies and REITs outside the U.S. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
66 | 2020 Annual Report |
Aberdeen Realty Income & Growth Fund (Unaudited) (concluded)
in fundamentally sound, high- quality businesses in more cyclical subsectors, and will seek to take advantage of these opportunities to benefit from the economic recovery.
Portfolio Management:
Global Real Estate Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Investments in REITs and real estate securities involve the risks associated with the direct ownership of real estate and with the real estate industry in general. These risks include: declines in the value of
real estate; risks related to local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income, neighborhood values or the appeal of properties to tenants; changes in interest rates and changes in general economic and market conditions.
There is no guarantee that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The Fund's emphasis on dividend paying stocks could cause the Fund to underperform similar funds that invest without consideration of a company's track record of paying dividends or ability to pay dividends in the future.
Equity securities of small- and mid-cap companies carry greater risk, and more volatility than equity securities of larger, more established companies.
The Fund's performance may be more volatile than a diversified fund because it may invest a greater percentage of its total assets in the securities of a single issuer.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 67 |
Aberdeen Realty Income & Growth Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5Yr. | 10Yr. | |||||
Class A | w/o SC | (18.12%) | 3.09% | N.A. | ||||
w/SC2 | (22.84%) | 1.88% | N.A. | |||||
Institutional Class3 | w/o SC | (17.85%) | 3.35% | 7.96% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns prior to May 7, 2018 reflect the performance of a predecessor fund (the "Predecessor Fund"). Returns of the Predecessor Fund have not been adjusted to reflect the expenses applicable to the respective classes. The Fund and the Predecessor Fund have substantially similar investment objectives and strategies. Please consult the Fund's prospectus for more detail. |
2 | A 5.75% front-end sales charge was deducted. |
3 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* Minimum Initial Investment
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Realty Income & Growth Fund, the Morgan Stanley Capital International (MSCI) US REIT Index, the S&P 500® Index and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Unlike the Fund, the returns for these
unmanaged indexes do not reflect any fees, expenses or sales charges. Investors cannot invest directly in market indexes.
MSCI US REIT Index is a gross, total return, free float-adjusted market capitalization index that is comprised of equity REITs. The index is based on MSCI USA Investable Market Index (IMI) its parent index which captures large, mid and small caps securities. With 141 constituents, it represents about 99% of the US REIT universe and securities are classified in the REIT sector according to the Global Industry Classification Standard (GICS®). It however excludes Mortgage REIT and selected Specialized REITs. This index reinvests as much as possible of a company's dividend distributions. The reinvested amount is equal to the total dividend amount distributed to persons residing in the country of the dividend-paying company. Gross total return indexes do not, however, include any tax credits.
The S&P 500® Index represents large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available U.S. market capitalization.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
68 | 2020 Annual Report |
Aberdeen Realty Income & Growth Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 99.8% | |
Short-Term Investment | 2.6% | |
Liabilities in Excess of Other Assets | (2.4%) | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Sub-Industries | As a Percentage of Net Assets | |
Specialized REITs | 30.3% | |
Residential REITs | 17.3% | |
Industrial REITs | 16.8% | |
Retail REITs | 10.0% | |
Office REITs | 8.1% | |
Health Care REITs | 7.5% | |
Hotel & Resort REITs | 6.2% | |
Diversified REITs | 3.6% | |
Other | 0.2% | |
100.0% |
Top Holdings* | ||
Prologis, Inc., REIT | 9.7% | |
Equinix, Inc., REIT | 8.9% | |
Public Storage | 6.1% | |
Digital Realty Trust, Inc., REIT | 5.3% | |
Welltower, Inc. | 4.1% | |
Alexandria Real Estate Equities, Inc. | 4.0% | |
Realty Income Corp., REIT | 3.9% | |
Extra Space Storage, Inc., REIT | 3.9% | |
Duke Realty Corp. | 3.6% | |
Mid-America Apartment Communities, Inc., REIT | 3.3% | |
Other | 47.2% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
United States | 102.4% | |
Other | (2.4%) | |
100.0% |
2020 Annual Report | 69 |
Statement of Investments
October 31, 2020
Aberdeen Realty Income & Growth Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (99.8%) | ||||||||
UNITED STATES (99.8%) | ||||||||
Diversified REITs (3.6%) | ||||||||
STORE Capital Corp. | 35,671 | $ 916,745 | ||||||
VEREIT, Inc. | 130,566 | 809,509 | ||||||
1,726,254 | ||||||||
Health Care REITs (7.5%) | ||||||||
Medical Properties Trust, Inc. | 48,712 | 868,048 | ||||||
Omega Healthcare Investors, Inc. | 26,695 | 769,083 | ||||||
Welltower, Inc. | 37,196 | 2,000,029 | ||||||
3,637,160 | ||||||||
Hotel & Resort REITs (6.2%) | ||||||||
DiamondRock Hospitality Co. | 80,742 | 398,865 | ||||||
Host Hotels & Resorts, Inc. | 86,723 | 908,857 | ||||||
MGM Growth Properties LLC | 44,030 | 1,164,594 | ||||||
Sunstone Hotel Investors, Inc. | 68,945 | 511,572 | ||||||
2,983,888 | ||||||||
Industrial REITs (16.8%) | ||||||||
Americold Realty Trust | 21,703 | 786,300 | ||||||
Duke Realty Corp. | 45,197 | 1,717,034 | ||||||
Prologis, Inc. | 46,938 | 4,656,249 | ||||||
STAG Industrial, Inc. | 29,868 | 929,492 | ||||||
8,089,075 | ||||||||
Office REITs (8.1%) | ||||||||
Alexandria Real Estate Equities, Inc. | 12,798 | 1,939,153 | ||||||
Brandywine Realty Trust | 38,073 | 333,519 | ||||||
Cousins Properties, Inc. | 19,562 | 498,440 | ||||||
Douglas Emmett, Inc. | 7,675 | 181,130 | ||||||
Highwoods Properties, Inc. | 16,288 | 484,894 | ||||||
Hudson Pacific Properties, Inc. | 11,105 | 213,882 | ||||||
Vornado Realty Trust | 8,931 | 274,450 | ||||||
3,925,468 | ||||||||
Residential REITs (17.3%) | ||||||||
American Homes 4 Rent | 38,459 | 1,087,236 | ||||||
AvalonBay Communities, Inc. | 7,070 | 983,649 | ||||||
Equity LifeStyle Properties, Inc. | 20,061 | 1,187,410 | ||||||
Essex Property Trust, Inc. | 3,181 | 650,801 | ||||||
Invitation Homes, Inc. | 57,350 | 1,563,361 | ||||||
Mid-America Apartment Communities, Inc. | 13,790 | 1,608,328 | ||||||
Sun Communities, Inc. | 9,182 | 1,263,719 | ||||||
8,344,504 |
Shares or Principal Amount | Value | |||||||
Retail REITs (10.0%) | ||||||||
Agree Realty Corp. | 11,492 | $ 713,309 | ||||||
Brixmor Property Group, Inc. | 48,491 | 531,461 | ||||||
Kimco Realty Corp. | 49,672 | 509,635 | ||||||
National Retail Properties, Inc. | 22,538 | 721,441 | ||||||
Realty Income Corp. | 32,220 | 1,864,249 | ||||||
Simon Property Group, Inc. | 7,557 | 474,655 | ||||||
4,814,750 | ||||||||
Specialized REITs (30.3%) | ||||||||
American Tower Corp. | 4,471 | 1,026,765 | ||||||
Digital Realty Trust, Inc. | 17,729 | 2,558,295 | ||||||
Equinix, Inc., REIT | 5,846 | 4,274,829 | ||||||
Extra Space Storage, Inc. | 16,044 | 1,860,302 | ||||||
Gaming and Leisure Properties, Inc. | 28,851 | 1,048,734 | ||||||
Public Storage | 12,904 | 2,955,919 | ||||||
Sabra Health Care REIT, Inc. | 29,012 | 381,798 | ||||||
SBA Communications Corp. | 1,745 | 506,695 | ||||||
14,613,337 | ||||||||
48,134,436 | ||||||||
Total Common Stocks | 48,134,436 | |||||||
SHORT-TERM INVESTMENT (2.6%) | ||||||||
UNITED STATES (2.6%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (a) | 1,249,869 | 1,249,869 | ||||||
Total Short-Term Investment | 1,249,869 | |||||||
Total Investments (Cost $39,729,383) (b)—102.4% | 49,384,305 | |||||||
Liabilities in Excess of Other Assets—(2.4)% | (1,178,958 | ) | ||||||
Net Assets—100.0% | $48,205,347 |
(a) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(b) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
70 | 2020 Annual Report |
Aberdeen U.S. Mid Cap Equity Fund (Unaudited)
Aberdeen U.S. Mid Cap Equity Fund (Institutional Class shares net of fees) returned 18.27% for the 12-month period ended October 31, 2020, versus the 4.12% return of its benchmark, the Russell Midcap Index, during the same period.
Equity markets worldwide experienced significant bouts of volatility over the 12-month period ended October 31, 2020, prompted by investors' fears surrounding the impact of the worldwide spread of the COVID-19 pandemic on the global economy and, later in the period, uncertainty regarding the U.S. presidential election. Shares of U.S. mid-cap companies, as measured by the Russell Midcap Index,1 returned 4.12% for the reporting period, trailing the 9.71% return of their large-cap counterparts, as represented by the U.S. broader-market S&P 500 Index,2 but outperforming the -0.14% return of U.S. small-cap stocks, as measured by the Russell 2000 Index.3 The healthcare, information technology and materials sectors were the strongest performers within the Russell Midcap Index for the reporting period. The energy, communication services and financials sectors recorded double-digit losses and were the primary market laggards for the period.
On the monetary policy front, the U.S. Federal Reserve (Fed) implemented two separate emergency interest-rate cuts totalling 150 basis points (bps) to a range of 0% to 0.25% on March 3 and 15, 2020, in response to the COVID-19-induced market carnage. In its statement announcing the rate cut, the central bank commented: "The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected." The Fed maintained its benchmark rate through the remainder of the reporting period. In its statement issued following its meeting in mid-September 2020, the Federal Open Market Committee commented: "The path of the economy will depend significantly on the course of the virus." The Fed's projections accompanying its monetary policy statement indicated that it anticipates maintaining the federal funds rate near 0% at least through the end of 2023.
U.S. economic news was mixed over the reporting period, reflecting the dichotomy among the healthy pre-pandemic picture, an abruptly stalled economy under "lockdown," and a subsequent upturn in the summer and early fall of 2020. The COVID-19 pandemic has significantly hampered the U.S. economy. U.S. gross domestic product (GDP) fell 31.4% in the second quarter of 2020, attributable mainly to downturns in consumer spending, exports and nonresidential fixed investment.4 The economy subsequently expanded by 33.1% in the third quarter of 2020, attributable largely to businesses reopening and the resumption of other activities that were postponed or restricted due to the pandemic. There were notable increases in consumer spending, private inventory investment and exports. These positive contributors to GDP offset reductions in federal government spending – reflecting reduced fees paid to administer the Paycheck
Protection Program loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted in late March of 2020 – and state and local government spending.
Prior to the pandemic, U.S. non-farm payrolls rose by an average of 228,000 for the first four months of the reporting period.5 However, the COVID-19-induced lockdowns resulted in the loss of roughly 19.4 million jobs between February and May 2020, and the unemployment rate rose from a record low of 3.5% in February to an all-time high of 14.7% in April. As expected, the leisure and hospitality industry saw the largest decline in employment due to the lockdowns. The U.S. economy subsequently recovered approximately 9.3 million jobs between May and October, and the unemployment rate concurrently fell to 6.9%.
The U.S. Consumer Price Index6 (CPI) was flat in October 2020 and rose 1.2% over the previous 12-month period.7 However, the core CPI, which excludes the impact of energy prices, was up 1.6% for the 12-month period ended October 31, 2020, attributable mainly to increases in medical services and housing costs.
The Fund's significant outperformance relative to its benchmark, the Russell Midcap Index, for the reporting period was due largely to both stock selection and an underweight position relative to the benchmark in the financials sector, stock selection and an overweight position in the consumer discretionary sector, as well the lack of exposure to the energy sector. The main contributors to Fund performance included specialty biopharmaceutical firm Horizon Therapeutics plc; EPAM Systems Inc' a provider of digital platform engineering and software development services; and membership-only warehouse operator BJ's Wholesale Club Holdings Inc.
Horizon Therapeutics plc successfully launched Tepezza, its thyroid eye disease drug, despite the COVID-19 lockdown and significantly raised its full-year 2020 product guidance expectations. EPAM Systems Inc. reported positive results over the reporting period, benefiting from an improving demand environment and the ongoing expansion of its business capabilities. BJ's Wholesale Club Holdings Inc. saw healthy year-over-year revenue and earnings growth for the first two quarters of its 2020 fiscal year. The company's results were bolstered by notable strength in same-store sales and membership fee income.
In contrast, an underweight allocation relative to the benchmark in the consumer discretionary sector and stock selection in the healthcare sector weighed on Fund performance for the reporting period. The largest individual stock detractors were derivatives exchange operator CBOE Global Markets Inc.; Mercury Systems Inc., a manufacturer of electronic components for aerospace and defense applications; and regional utility company FirstEnergy Corp.
CBOE Global Markets was hampered by weak trading and clearing volumes across its flagship CBOE Volatility Index (VIX)8 and S&P 500 Index products, and also from the pricing pressure from new entrants
1 | The Russell Midcap Index is an unmanaged index considered representative of U.S. mid-cap stocks. | |
2 | The S&P 500 Index is an unmanaged index considered representative of the broader U.S. stock market. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. | |
3 | The Russell 2000 Index is an unmanaged index considered representative of U.S. small-cap stocks. | |
4 | Source: U.S. Department of Commerce, October 2020 | |
5 | Source: U.S. Department of Labor, November 2020 | |
6 | The Consumer Price Index is a measure of the average change over time in the prices that consumers pay for a basket of consumer goods and services. | |
7 | Source: U.S. Department of Labor, November 2020 | |
8 | The CBOE Volatility Index (VIX) tracks the market's expectations of volatility over a rolling 30-day period. |
2020 Annual Report | 71 |
Aberdeen U.S. Mid Cap Equity Fund (Unaudited) (concluded)
in cash equities trading. The company focused on cost-management and on expanding into new markets and new products via several acquisitions, which we believe should fuel future growth. We maintain our positive view of CBOE's cash-generative business and the company's current valuation following the weak share-price performance over the reporting period. However, we are carefully monitoring the company's execution on the new initiatives, which in our view are key to reviving its earnings-per-share (EPS) growth and improve its valuation. Mercury Systems Inc. saw healthy year-over-year revenue and earnings growth for the first quarter of its 2021 fiscal year. However, the stock price declined as the company's earnings guidance for the full 2021 fiscal year did not meet investors' expectations. FirstEnergy Corp.'s former merchant power subsidiary, FirstEnergy Solutions, was named in a public investigation involving alleged bribery and racketeering. Potential financial penalties and investors' concerns about corporate governance caused the stock price to decline over the reporting period.
Regarding portfolio activity during the reporting period, we initiated holdings in educational textbook rental services provider Chegg Inc.; cyber security company CyberArk Software Ltd.; First Energy Corp., an Ohio-based electric utility company; biopharmaceutical firm Horizon Therapeutics plc; Mercury Systems, a manufacturer of electronic components for aerospace and defense applications; West Pharmaceutical Services Inc., a manufacturer of injectable pharmaceutical packaging and delivery systems; Terreno Realty Corp., an industrial real estate-focused real estate investment trust (REIT); enterprise software company Blackline Inc.; waste management services provider Casella Waste Systems Inc.; biopharmaceutical firm ICON plc; swimming pool supplies distributor Pool Corp.; internet services provider Cogent Communications Holdings Inc..; alternative investment management firm Hamilton Lane Inc.; and trucking company Saia Inc.
Conversely, we exited the Fund's positions in logistics and supply chain management services provider C.H. Robinson Worldwide Inc.; oilfield services company Core Laboratories N.V.; global professional services firm Genpact Ltd.; medical technology company Hologic Inc.; flavors and fragrances maker International Flavors & Fragrances Inc.; commercial bank M&T Bank Corp.; A.O. Smith Corp., a manufacturer of commercial and residential water heaters; regional utility company CME Energy Corp.; luxury goods retailer Tiffany & Co.; internet security services provider Akamai Technologies, Inc.; data center-focused REIT QTS Realty Trust Inc.; IT services provider CDW Corp.; FLIR Systems Inc., a designer and manufacturer of thermal imaging infrared cameras; credit reporting services provider Fair Isaac Corp.; waste management services provider Waste Connections Inc.; regional utility company FirstEnergy Corp.; contract research organization PRA Health Sciences Inc.; semiconductor manufacturer Maxim Integrated Products Inc.; and fast-food restaurant chain operator Dunkin Brands.
The economy continues to heal from an acute depression caused by the COVID-19 pandemic, in keeping with the global progress to learn more about the pathology of the virus and, through "trial and error," which measures to adapt and counteract potential case spikes. Coordinated efforts to balance the control of the virus spread with
sensible economic reopenings will be more crucial to the stability of markets, in our view. And we think that the development of effective and safe vaccines and effective therapeutics, along with a federally coordinated plan to distribute them, will have a positive effect on the markets. However, in our view, the current progress to date appears to suggest that these outcomes are more likely in 2021. As we navigate towards the end of 2020, we maintain a positive view on U.S. equities despite contending with higher market levels and narrow market leadership. This positive view comes with the caveat that we also feel that upside risks will be more limited going forward, as much of the expected improvement has been priced into the markets. Nonetheless, 2020 has been the "year of the unexpected." While we are confident that we have taken stock of all the important variables, we remain "on our toes," taking deep breaths and crossing our fingers heading into the final months of this year and into 2021.
Portfolio Management:
North American Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Equity stocks of mid-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
72 | 2020 Annual Report |
Aberdeen U.S. Mid Cap Equity Fund (Unaudited)
Average Annual Total Return (For periods ended October 31, 2020) | 1 Yr. | Inception1 | |||||
Class A | w/o SC | 18.00% | 14.61% | ||||
w/SC2 | 11.24% | 13.16% | |||||
Class C | w/o SC | 17.09% | 13.74% | ||||
w/SC3 | 16.09% | 13.74% | |||||
Class R4 | w/o SC | 17.69% | 14.31% | ||||
Institutional Service Class4 | w/o SC | 18.27% | 14.89% | ||||
Institutional Class4 | w/o SC | 18.27% | 14.90% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Fund commenced operations on February 29, 2016. | |
2 | A 5.75% front-end sales charge was deducted. | |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. | |
4 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* | Minimum Initial Investment |
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen U.S. Mid Cap Equity Fund, Russell
Midcap® Index and the Consumer Price Index (CPI) since inception. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The Russell Midcap® Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap® Index is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap® Index represents approximately 31% of the total market capitalization of the Russell 1000 companies. The Russell 1000® Index is constructed to provide a comprehensive and unbiased barometer for the mid-cap segment. The index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap opportunity set.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
2020 Annual Report | 73 |
Aberdeen U.S. Mid Cap Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | |||
Common Stocks | 100.5% | ||
Short-Term Investment | 0.8% | ||
Liabilities in Excess of Other Assets | (1.3%) | ||
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | |||
Information Technology | 27.1%* | ||
Industrials | 18.0% | ||
Health Care | 12.9% | ||
Financials | 12.1% | ||
Consumer Discretionary | 10.0% | ||
Real Estate | 5.7% | ||
Materials | 5.3% | ||
Communication Services | 5.0% | ||
Consumer Staples | 2.2% | ||
Utilities | 2.2% | ||
Other | (0.5%) | ||
100.0% |
* | As of October 31, 2020, the Fund's holdings in the Information Technology sector were allocated to six industries: Software (9.5%) Computers & Peripherals (5.1%) Commercial Services & Supplies (3.8%) Diversified Telecommunication Services (3.2%) Electronics (3.1%) and Semiconductors (2.4%). |
Top Holdings* | |||
Tetra Tech, Inc. | 3.5% | ||
TMX Group Ltd. | 3.2% | ||
NICE Ltd., ADR | 3.2% | ||
Horizon Therapeutics PLC | 3.2% | ||
EPAM Systems, Inc. | 3.1% | ||
Itron, Inc. | 3.1% | ||
SVB Financial Group | 3.1% | ||
Globus Medical, Inc., Class A | 3.0% | ||
Pegasystems, Inc. | 2.9% | ||
Burlington Stores, Inc. | 2.9% | ||
Other | 68.8% | ||
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | |||
United States | 85.8% | ||
Canada | 8.4% | ||
Israel | 5.1% | ||
Ireland | 2.0% | ||
Other | (1.3%) | ||
100.0% |
74 | 2020 Annual Report |
Statement of Investments
October 31, 2020
Aberdeen U.S. Mid Cap Equity Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (100.5%) | ||||||||
CANADA (8.4%) | ||||||||
Financials (3.2%) | ||||||||
TMX Group Ltd. | 716 | $ | 69,574 | |||||
Industrials (2.5%) | ||||||||
Ritchie Bros Auctioneers, Inc. | 882 | 53,476 | ||||||
Materials (2.7%) | ||||||||
CCL Industries, Inc., Class B | 1,538 | 58,643 | ||||||
181,693 | ||||||||
IRELAND (2.0%) | ||||||||
Health Care (2.0%) | ||||||||
ICON PLC (a) | 243 | 43,813 | ||||||
ISRAEL (5.1%) | ||||||||
Information Technology (5.1%) | ||||||||
CyberArk Software Ltd. (a) | 418 | 41,445 | ||||||
NICE Ltd., ADR (a) | 302 | 68,934 | ||||||
110,379 | ||||||||
UNITED STATES (85.0%) | ||||||||
Communication Services (5.0%) | ||||||||
Cable One, Inc. | 33 | 57,151 | ||||||
Cogent Communications Holdings, Inc. | 911 | 50,834 | ||||||
107,985 | ||||||||
Consumer Discretionary (10.0%) | ||||||||
Burlington Stores, Inc. (a) | 321 | 62,139 | ||||||
Chegg, Inc. (a) | 635 | 46,635 | ||||||
Pool Corp. | 133 | 46,527 | ||||||
Service Corp. International | 1,325 | 61,361 | ||||||
216,662 | ||||||||
Consumer Staples (2.2%) | ||||||||
BJ's Wholesale Club Holdings, Inc. (a) | 1,241 | 47,518 | ||||||
Financials (8.9%) | ||||||||
Cboe Global Markets, Inc. | 713 | 57,960 | ||||||
First Republic Bank | 336 | 42,383 | ||||||
Hamilton Lane, Inc., Class A | 357 | 24,883 | ||||||
SVB Financial Group (a) | 231 | 67,151 | ||||||
192,377 | ||||||||
Health Care (10.9%) | ||||||||
Globus Medical, Inc., Class A (a) | 1,236 | 64,420 | ||||||
Horizon Therapeutics PLC (a) | 917 | 68,711 | ||||||
Teleflex, Inc. | 178 | 56,645 | ||||||
West Pharmaceutical Services, Inc. | 173 | 47,068 | ||||||
236,844 |
Shares or Principal Amount | Value | |||||||
Industrials (15.5%) | ||||||||
Allegion PLC | 433 | $ | 42,650 | |||||
Casella Waste Systems, Inc., Class A (a) | 770 | 41,572 | ||||||
Kansas City Southern | 319 | 56,189 | ||||||
Mercury Systems, Inc. (a) | 742 | 51,109 | ||||||
Saia, Inc. (a) | 254 | 37,506 | ||||||
Tetra Tech, Inc. | 760 | 76,692 | ||||||
Verisk Analytics, Inc. | 175 | 31,145 | ||||||
336,863 | ||||||||
Information Technology (22.0%) | ||||||||
Akamai Technologies, Inc. (a) | 364 | 34,624 | ||||||
Blackline, Inc. (a) | 601 | 58,706 | ||||||
Envestnet, Inc. (a) | 665 | 51,032 | ||||||
EPAM Systems, Inc. (a) | 222 | 68,587 | ||||||
Evo Payments, Inc., Class A (a) | 1,916 | 40,370 | ||||||
Itron, Inc. (a) | 994 | 67,542 | ||||||
Marvell Technology Group Ltd. | 1,385 | 51,951 | ||||||
Paylocity Holding Corp. (a) | 227 | 42,113 | ||||||
Pegasystems, Inc. | 537 | 62,228 | ||||||
477,153 | ||||||||
Materials (2.6%) | ||||||||
Axalta Coating Systems Ltd. (a) | 2,283 | 57,326 | ||||||
Real Estate (5.7%) | ||||||||
Alexandria Real Estate Equities, Inc. | 251 | 38,031 | ||||||
QTS Realty Trust, Inc., Class A, REIT | 866 | 53,268 | ||||||
Terreno Realty Corp., REIT | 589 | 33,149 | ||||||
124,448 | ||||||||
Utilities (2.2%) | ||||||||
American Water Works Co., Inc. | 310 | 46,658 | ||||||
1,843,834 | ||||||||
Total Common Stocks | 2,179,719 | |||||||
SHORT-TERM INVESTMENT (0.8%) | ||||||||
UNITED STATES (0.8%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (b) | 18,224 | 18,224 | ||||||
Total Short-Term Investment | 18,224 | |||||||
Total Investments (Cost $1,719,758) (c)—101.3% | 2,197,943 | |||||||
Liabilities in Excess of Other Assets—(1.3)% | (29,153 | ) | ||||||
Net Assets—100.0% | $ | 2,168,790 |
(a) | Non-income producing security. | |
(b) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. | |
(c) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt | |
PLC | Public Limited Company | |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
2020 Annual Report | 75 |
Aberdeen U.S. Multi-Cap Equity Fund (Unaudited)
Aberdeen U.S. Multi-Cap Equity Fund (Institutional Class shares net of fees) returned 17.89% for the 12-month period ended October 31, 2020, versus the 10.15% return of its benchmark, the Russell 3000 Index, during the same period.
Equity markets worldwide experienced significant bouts of volatility over the 12-month period ended October 31, 2020, prompted by investors' fears surrounding the impact of the global spread of the COVID-19 pandemic on the global economy and, later in the period, uncertainty regarding the U.S. presidential election. Shares of U.S. large-cap companies, as represented by the broader-market S&P 500 Index,1 returned 9.71% for the reporting period, significantly outperforming the 4.12% and -0.14% returns of their mid- and small-cap counterparts, as measured by the Russell Midcap Index2 and Russell 2000 Index,3 respectively. The information technology, consumer discretionary and communication services sectors led the rally in the Russell 3000 Index for the reporting period, garnering double-digit returns. Conversely, the energy, real estate and financials sectors saw double-digit losses and were the primary market laggards.
On the monetary policy front, the U.S. Federal Reserve (Fed) implemented two separate emergency interest-rate cuts totaling 150 basis points (bps) to a range of 0% to 0.25% on March 3 and 15, 2020, in response to the COVID-19-induced market carnage. In its statement announcing the rate cut, the central bank commented: "The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected." The Fed maintained its benchmark rate through the remainder of the reporting period. In its statement issued following its meeting in mid-September 2020, the Federal Open Market Committee commented: "The path of the economy will depend significantly on the course of the virus." The Fed's projections accompanying its monetary policy statement indicated that it anticipates maintaining the federal funds rate near 0% at least through the end of 2023.
U.S. economic news was mixed over the reporting period, reflecting the dichotomy among the healthy pre-pandemic picture, an abruptly stalled economy under "lockdown," and a subsequent upturn in the summer and early fall of 2020. The COVID-19 pandemic has significantly hampered the U.S. economy. U.S. gross domestic product (GDP) fell 31.4% in the second quarter of 2020, attributable mainly to downturns in consumer spending, exports and nonresidential fixed investment.4 The economy subsequently expanded by 33.1% in the third quarter of 2020, attributable largely to businesses reopening and the resumption of other activities that were postponed or restricted due to the pandemic. There were notable increases in consumer spending, private inventory investment and exports. These positive contributors to GDP offset reductions in federal government
spending – reflecting reduced fees paid to administer the Paycheck Protection Program loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted in late March of 2020 – and state and local government spending.
Prior to the pandemic, U.S. non-farm payrolls rose by an average of 228,000 for the first four months of the reporting period.5 However, the COVID-19-induced lockdowns resulted in the loss of roughly 19.4 million jobs between February and May 2020, and the unemployment rate rose from a record low of 3.5% in February to an all-time high of 14.7% in April. As expected, the leisure and hospitality industry saw the largest decline in employment due to the lockdowns. The U.S. economy subsequently recovered approximately 9.3 million jobs between May and October, and the unemployment rate concurrently fell to 6.9%.
The U.S. Consumer Price Index6 (CPI) was flat in October 2020 and rose 1.2% over the previous 12-month period.7 However, the core CPI, which excludes the impact of energy prices, was up 1.6% for the 12-month period ended October 31, 2020, attributable mainly to increases in medical services and housing costs.
The Fund's outperformance relative to its benchmark, the Russell 3000 Index, for the reporting period was attributable to stock selection across several sectors, particularly industrials and consumer staples, as well as both stock selection and an underweight allocation to real estate. The largest contributors to Fund performance among individual holdings were specialty biopharmaceutical firm Horizon Therapeutics plc; payroll and human capital management software developer Paylocity Holding Corp.; and membership-only warehouse operator BJ's Wholesale Club Holdings Inc.
Horizon Therapeutics plc successfully launched Tepezza, its thyroid eye disease drug, despite the COVID-19-induced lockdown and significantly raised its full-year 2020 product guidance expectations. We subsequently exited the position in the company as it exceeded the portfolio's market-cap parameters. The Fund held a position in Paylocity Holding Corp. given its consistent market share gains from legacy competitors that enabled the company to achieve strong revenue growth at increasing operating margins. We exited the Fund's position in the company in July 2020, as its market capitalization exceeded the Fund's small-cap parameters. BJ's Wholesale Club Holdings Inc. saw healthy year-over-year revenue and earnings growth for the first two quarters of its 2020 fiscal year. The company's results were bolstered by notable strength in same-store sales and membership fee income.
Fund performance for the reporting period was hampered mainly by underweight positions relative to the benchmark in the information technology and consumer discretionary sectors, along with stock
1 | The S&P 500 Index is an unmanaged index considered representative of the broader U.S. stock market. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. | |
2 | The Russell Midcap Index is an unmanaged index considered representative of U.S. mid?cap stocks. | |
3 | The Russell 2000 Index is an unmanaged index considered representative of U.S. small-cap stocks. | |
4 | Source: U.S. Department of Commerce, October 2020 | |
5 | Source: U.S. Department of Labor, November 2020 | |
6 | The Consumer Price Index is a measure of the average change over time in the prices that consumers pay for a basket of consumer goods and services. | |
7 | Source: U.S. Department of Labor, November 2020 |
76 | 2020 Annual Report |
Aberdeen U.S. Multi-Cap Equity Fund (Unaudited) (concluded)
selection in the communication services sector. The most notable individual stock detractors from Fund performance included the lack of exposure to technology giant Apple Inc., as well as holdings in oil and gas company EOG Resources Inc. and diversified financial services company Citigroup Inc.
While we acknowledge Apple Inc.'s innovations, we historically have had concerns with the lack of visibility into its business and its high dependence on a single product. Shares of EOG Resources Inc. moved lower as the oil price fell sharply in March 2020 due to declining demand and potentially increasing supply amid a price war among the Organization of the Petroleum Exporting Countries (OPEC) members. We subsequently exited the Fund's position in the company in March 2020. Citigroup Inc.'s stock price declined on news that U.S. regulators are likely to issue a consent order requiring the company to address shortcomings in its risk systems to better detect problematic transactions and risky trades. In our view, the regulatory inquiry has likely accelerated the retirement timeline for CEO Michael Corbat, who will be succeeded by Jane Fraser – the first female CEO to lead a major U.S. bank.
Regarding portfolio activity over the reporting period, we initiated holdings in diversified financial services companies American Express Co. and Citigroup Inc.; Air Products and Chemicals Inc., a supplier of industrial gases; Paylocity Holding Corp., a developer of payroll and human capital management software; diversified media company The Walt Disney Co.; industrial manufacturing company Trane Technologies plc; diversified financial services company Goldman Sachs Group Inc.; integrated solid waste management services company Waste Connections Inc.; telecommunications company Charter Communications Inc.; and defense contractor L3Harris Technologies Inc.
Conversely, we exited the Fund's positions in oil and gas company ConocoPhillips; financial services company First Republic Bank; Manhattan Associates Inc., a developer of supply chain and logistics software; semiconductor manufacturer Texas Instruments Inc.; luxury goods retailer Tiffany & Co.; transportation and logistics company United Parcel Service Inc.; Canada-based convenience-store chain operator Alimentation Couche-Tard Inc.; diversified financial services company Charles Schwab Corp.; diversified media company Comcast Corp.; and contract research organization PRA Health Sciences Inc.
The economy continues to heal from an acute depression caused by the COVID-19 pandemic, in keeping with the global progress to learn more about the pathology of the virus and, through "trial and error," which measures to adapt and counteract potential case spikes. Coordinated efforts to balance the control of the virus spread with sensible economic reopenings will be more crucial to the stability of markets, in our view. And we think that the development of effective and safe vaccines and effective therapeutics, along with a federally
coordinated plan to distribute them, will have a positive effect on the markets. However, in our view, the current progress to date appears to suggest that these outcomes are more likely in 2021. As we navigate towards the end of 2020, we maintain a positive view on U.S. equities despite contending with higher market levels and narrow market leadership. This positive view comes with the caveat that we also feel that upside risks will be more limited going forward, as much of the expected improvement has been priced into the markets. Nonetheless, 2020 has been the "year of the unexpected." While we are confident that we have taken stock of all the important variables, we remain "on our toes," taking deep breaths and crossing our fingers heading into the final months of this year and into 2021.
Effective December 1, 2020, the Aberdeen U.S. Multi-Cap Equity Fund changed its name to Aberdeen U.S. Sustainable Leaders Fund and changed its principal investment strategies. The Fund seeks to achieve its investment objective of long-term capital appreciation by investing in equity securities of U.S. companies that the Adviser deems to have sound or improving prospects and which demonstrate that they are current or emerging sustainable leaders through their management of environmental, social and governance ("ESG") risks and opportunities in accordance with the Adviser's criteria.
Portfolio Management:
North American Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Equity stocks of small- and mid-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 77 |
Aberdeen U.S. Multi-Cap Equity Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |||||
Class A | w/o SC | 17.50% | 12.78% | 11.38% | ||||
w/SC2 | 10.74% | 11.46% | 10.72% | |||||
Class C | w/o SC | 16.71% | 11.99% | 10.59% | ||||
w/SC3 | 15.71% | 11.99% | 10.59% | |||||
Institutional Service Class4,5 | w/o SC | 17.79% | 13.04% | 11.63% | ||||
Institutional Class4 | w/o SC | 17.89% | 13.14% | 11.72% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns prior to October 9, 2011 reflect the performance of a predecessor fund (the "Predecessor Fund"). Returns of the Predecessor Fund have not been adjusted to reflect the expenses applicable to the respective classes. Please consult the Fund's prospectus for more detail. | |
2 | A 5.75% front-end sales charge was deducted. | |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. | |
4 | Not subject to any sales charges. | |
5 | Returns before the first offering of the Institutional Service Class (October 10, 2011) are based on the previous performance of the Institutional Class of the Predecessor Fund and Second Predecessor Fund. Excluding the effect of any fee waivers or reimbursements, this performance is substantially similar to what the Institutional Service Class would have produced because both classes invest in the same portfolio of securities. Returns would only differ to the extent of the differences in expenses of the two classes. |
Performance of a $10,000 Investment (as of October 31, 2020)
Comparative performance of $10,000 invested in Class A shares of the Aberdeen U.S. Multi-Cap Equity Fund, Russell 3000® Index and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The Russell 3000® Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000® Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
78 | 2020 Annual Report |
Aberdeen U.S. Multi-Cap Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Common Stocks | 96.9% | |
Short-Term Investment | 3.2% | |
Liabilities in Excess of Other Assets | (0.1%) | |
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | ||
Information Technology | 23.9% | |
Industrials | 17.7% | |
Financials | 12.5% | |
Health Care | 11.9% | |
Consumer Discretionary | 9.9% | |
Communication Services | 9.9% | |
Materials | 3.7% | |
Utilities | 3.2% | |
Consumer Staples | 2.1% | |
Real Estate | 2.1% | |
Other | 3.1% | |
100.0% |
Top Holdings* | ||
Microsoft Corp. | 8.3% | |
Amazon.com, Inc. | 5.5% | |
Alphabet, Inc., Class A | 5.5% | |
Visa, Inc., Class A | 3.3% | |
CSX Corp. | 3.2% | |
NICE Ltd., ADR | 3.2% | |
NextEra Energy, Inc. | 3.1% | |
TMX Group Ltd. | 2.9% | |
Pegasystems, Inc. | 2.8% | |
Fidelity National Information Services, Inc. | 2.7% | |
Other | 59.5% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
United States | 91.5% | |
Canada | 5.4% | |
Israel | 3.2% | |
Other | (0.1%) | |
100.0% |
2020 Annual Report | 79 |
Statement of Investments
October 31, 2020
Aberdeen U.S. Multi-Cap Equity Fund
Shares or Principal Amount | Value | |||||||
COMMON STOCKS (96.9%) | ||||||||
CANADA (5.4%) | ||||||||
Financials (2.9%) | ||||||||
TMX Group Ltd. | 118,929 | $ 11,556,368 | ||||||
Industrials (2.5%) | ||||||||
Ritchie Bros Auctioneers, Inc. | 166,638 | 10,103,262 | ||||||
21,659,630 | ||||||||
ISRAEL (3.2%) | ||||||||
Information Technology (3.2%) | ||||||||
NICE Ltd., ADR (a) | 55,826 | 12,742,843 | ||||||
UNITED STATES (88.3%) | ||||||||
Communication Services (9.9%) | ||||||||
Alphabet, Inc., Class A (a) | 13,555 | 21,906,371 | ||||||
Charter Communications, Inc., Class A (a) | 13,201 | 7,971,028 | ||||||
Walt Disney Co. | 78,606 | 9,530,977 | ||||||
39,408,376 | ||||||||
Consumer Discretionary (9.9%) | ||||||||
Amazon.com, Inc. (a) | 7,248 | 22,006,015 | ||||||
Burlington Stores, Inc. (a) | 39,843 | 7,712,808 | ||||||
Service Corp. International | 213,905 | 9,905,941 | ||||||
39,624,764 | ||||||||
Consumer Staples (2.1%) | ||||||||
BJ's Wholesale Club Holdings, Inc. (a) | 223,157 | 8,544,681 | ||||||
Financials (9.6%) | ||||||||
American Express Co. | 73,949 | 6,747,107 | ||||||
Citigroup, Inc. | 190,491 | 7,890,137 | ||||||
Glacier Bancorp, Inc. (b) | 165,656 | 5,930,485 | ||||||
Goldman Sachs Group, Inc. (The) | 51,615 | 9,757,299 | ||||||
Intercontinental Exchange, Inc. | 84,260 | 7,954,144 | ||||||
38,279,172 | ||||||||
Health Care (11.9%) | ||||||||
Baxter International, Inc. | 114,898 | 8,912,638 | ||||||
Boston Scientific Corp. (a) | 271,086 | 9,290,117 | ||||||
Globus Medical, Inc., Class A (a) | 181,342 | 9,451,545 | ||||||
Horizon Therapeutics PLC (a) | 143,647 | 10,763,470 | ||||||
UnitedHealth Group, Inc. | 29,885 | 9,119,109 | ||||||
47,536,879 | ||||||||
Industrials (15.2%) | ||||||||
CSX Corp. | 162,389 | 12,818,988 | ||||||
IHS Markit Ltd. | 127,601 | 10,319,093 | ||||||
L3Harris Technologies, Inc. | 44,159 | 7,114,456 | ||||||
Tetra Tech, Inc. | 96,302 | 9,717,835 | ||||||
Trane Technologies PLC | 76,072 | 10,098,558 | ||||||
Waste Connections, Inc. | 105,219 | 10,429,499 | ||||||
60,498,429 |
Shares or Principal Amount | Value | |||||||
Information Technology (20.7%) | ||||||||
Adobe, Inc. (a) | 16,900 | $ 7,555,990 | ||||||
Akamai Technologies, Inc. (a) | 73,647 | 7,005,303 | ||||||
Fidelity National Information Services, Inc. | 86,420 | 10,767,068 | ||||||
Microsoft Corp. | 163,915 | 33,187,870 | ||||||
Pegasystems, Inc. | 96,122 | 11,138,617 | ||||||
Visa, Inc., Class A | 71,750 | 13,037,692 | ||||||
82,692,540 | ||||||||
Materials (3.7%) | ||||||||
Air Products and Chemicals, Inc. | 28,647 | 7,913,447 | ||||||
Ecolab, Inc. | 37,279 | 6,844,052 | ||||||
14,757,499 | ||||||||
Real Estate (2.1%) | ||||||||
American Tower Corp., REIT | 35,509 | 8,154,642 | ||||||
Utilities (3.2%) | ||||||||
NextEra Energy, Inc. | 171,256 | 12,537,652 | ||||||
352,034,634 | ||||||||
Total Common Stocks | 386,437,107 | |||||||
SHORT-TERM INVESTMENT (3.2%) | ||||||||
UNITED STATES (3.2%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (c) | 12,730,716 | 12,730,716 | ||||||
Total Short-Term Investment | 12,730,716 | |||||||
Total Investments (Cost $309,526,403) (d)—100.1% | 399,167,823 | |||||||
Liabilities in Excess of Other Assets—(0.1)% | (453,863 | ) | ||||||
Net Assets—100.0% | $398,713,960 |
(a) | Non-income producing security. |
(b) | All or a portion of the securities are on loan. The total value of all securities on loan is $375,900. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. See Note 2(j) of the accompanying Notes to Financial Statements. |
(c) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(d) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR American Depositary Receipt
PLC Public Limited Company
REIT Real Estate Investment Trust
See accompanying Notes to Financial Statements.
80 | 2020 Annual Report |
Aberdeen U.S. Small Cap Equity Fund (Unaudited)
Aberdeen U.S. Small Cap Equity Fund (Institutional Class shares net of fees) returned 9.37% for the 12-month period ended October 31, 2020, versus the -0.14% return of its benchmark, the Russell 2000 Index, during the same period.
Equity markets worldwide experienced significant bouts of volatility over the 12-month period ended October 31, 2020, prompted by investors' fears surrounding the impact of the worldwide spread of the COVID-19 pandemic on the global economy and, later in the period, uncertainty regarding the U.S. presidential election. Shares of U.S. small-cap companies, as represented by the Russell 2000 Index, returned -0.14% for the reporting period, significantly underperforming the 9.71% return of their large-cap counterparts, as measured by the U.S. broader-market S&P 500 Index.1 There was sharp divergence in the performance of small-cap growth and value stocks. Shares of U.S. small-cap growth companies, as measured by the Russell 2000 Growth Index,2 returned 13.37% for the reporting period, notably outperforming the -13.92% return of small-cap value stocks, as represented by the Russell 2000 Value Index.3 The healthcare, consumer staples and consumer discretionary sectors were the strongest performers within the Russell 2000 Index for the reporting period. In contrast, the energy, real estate and communication services sectors posted negative returns and notably lagged the overall small-cap market for the period.
On the monetary policy front, the U.S. Federal Reserve (Fed) implemented two separate emergency interest-rate cuts totalling 150 basis points (bps) to a range of 0% to 0.25% on March 3 and 15, 2020, in response to the COVID-19-induced market carnage. In its statement announcing the rate cut, the central bank commented: "The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected." The Fed maintained its benchmark rate through the remainder of the reporting period. In its statement issued following its meeting in mid-September 2020, the Federal Open Market Committee commented: "The path of the economy will depend significantly on the course of the virus." The Fed's projections accompanying its monetary policy statement indicated that it anticipates maintaining the federal funds rate near 0% at least through the end of 2023.
U.S. economic news was mixed over the reporting period, reflecting the dichotomy among the healthy pre-pandemic picture, an abruptly stalled economy under "lockdown," and a subsequent upturn in the summer and early fall of 2020. The COVID-19 pandemic has significantly hampered the U.S. economy. U.S. gross domestic product (GDP) fell 31.4% in the second quarter of 2020, attributable mainly to downturns in consumer spending, exports and nonresidential fixed investment.4 The economy subsequently expanded by 33.1% in the
third quarter of 2020, attributable largely to businesses reopening and the resumption of other activities that were postponed or restricted due to the pandemic. There were notable increases in consumer spending, private inventory investment and exports. These positive contributors to GDP offset reductions in federal government spending – reflecting reduced fees paid to administer the Paycheck Protection Program loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted in late March of 2020 – and state and local government spending.
Prior to the pandemic, U.S. non-farm payrolls rose by an average of 228,000 for the first four months of the reporting period.5 However, the COVID-19-induced lockdowns resulted in the loss of roughly 19.4 million jobs between February and May 2020, and the unemployment rate rose from a record low of 3.5% in February to an all-time high of 14.7% in April. As expected, the leisure and hospitality industry saw the largest decline in employment due to the lockdowns. The U.S. economy subsequently recovered approximately 9.3 million jobs between May and October, and the unemployment rate concurrently fell to 6.9%.
The U.S. Consumer Price Index6 (CPI) was flat in October 2020, and rose 1.2% over the previous 12-month period.7 However, the core CPI, which excludes the impact of energy prices, was up 1.6% for the 12-month period ended October 31, 2020, attributable mainly to increases in medical services and housing costs.
We believe that the Fund's focus on quality growth has benefited performance. Importantly, in our view, over the past several years, we have been intently focused on proper portfolio construction in an effort to retain the Fund's strong downside protection characteristics, while also having the appropriate risk profile so that the Fund participates (and does not lose ground) in stronger markets. This is always a fine balancing act, but one that we believe enhanced Fund performance versus its benchmark, the Russell 2000 Index, over the reporting period.
Fund performance for the 12-month period ended October 31, 2020, was bolstered mainly by stock selection in the industrials, information technology and communication services sectors, as well as an underweight allocation relative to the benchmark to the real estate sector and the lack of exposure to the energy sector. The largest contributors to Fund performance among individual holdings were communication platform-as-a-service company Bandwidth Inc.; specialty biopharmaceutical firm Horizon Therapeutics plc; and Five9 Inc., a provider of cloud-based software to contact centers.
Bandwidth Inc. has benefited from increased usage of videoconferencing applications as the company enables voice access for many service providers. The company counts large enterprises such as Zoom, Google, Microsoft, and Cisco (which the Fund does not
1 | The Russell 2000 Index is an unmanaged index considered representative of U.S. small-cap stocks. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
2 | The Russell 2000 Growth Index is an unmanaged index considered representative of small?cap growth stocks. |
3 | The Russell 2000 Value Index is an unmanaged index considered representative of small-cap value stocks. |
4 | Source: U.S. Department of Commerce, October 2020 |
5 | Source: U.S. Department of Labor, November 2020 |
6 | The Consumer Price Index is a measure of the average change over time in the prices that consumers pay for a basket of consumer goods and services. |
7 | Source: U.S. Department of Labor, November 2020 |
2020 Annual Report | 81 |
Aberdeen U.S. Small Cap Equity Fund (Unaudited) (continued)
hold) as customers, all of which have witnessed increasing demand for their communication products. Horizon Therapeutics successfully launched Tepezza, its thyroid eye disease drug, despite the COVID-19 lockdown and significantly raised its full-year 2020 product guidance expectations. We subsequently exited the position in the company as it exceeded the portfolio's market-cap parameters. Shares of Five9 performed relatively well over the reporting period because of investors' prevailing view that near-term fundamentals should be buoyed by increasing demand for call-center agents. We subsequently exited the Fund's position in the company as its market capitalization had grown to exceed the Fund's small-cap parameters following a period of strong share-price performance.
In contrast, stock selection and underweight positions versus the benchmark in the healthcare and consumer discretionary sectors hampered Fund performance for the reporting period. The primary individual detractors from Fund performance included Welbilt, a designer/manufacturer of foodservice equipment; K12 Inc., a technology-enabled provider of online educational resources; and diversified materials company Neenah Inc.
Welbilt Inc. faced difficulty in achieving margin gains attributable mainly to rising input costs and various manufacturing inefficiencies, while growth remained subdued due to weak end-markets. We exited the Fund's position in the company in March 2020, as we believed that these issues would be further exacerbated in the current environment. Shares of K12 Inc. significantly lagged the overall small-cap market following a period of strong price performance in the second quarter and the early part of the third quarter. We think that investors may be concerned about the company's lack of full-year 2020 guidance, a convertible debt offering that could signal a pending acquisition, and the high-profile cancellation of a single contract. However, we believe that the company should benefit from a structural demand tailwind for several years and its expanded product line will generate strong revenue growth. Neenah Inc. experienced a substantial decline in sales in both its paper and technical products divisions for the second quarter of its 2020 fiscal year due in large part to its corporate customers' COVID-19-related destocking. Lower volumes led to significantly reduced profitability and the share price consequently suffered. While we find these developments to be disappointing, we continue to see value in the stock, though we prefer to position the portfolio with a lower weight in the company for the near future.
Due to the extreme volatility in the market beginning in March 2020, we were more active in seeking to upgrade the quality of the Fund's portfolio. We initiated holdings in 18 companies during the 12-month reporting period.
We think that revenue growth for Jamieson Wellness Inc., a Canada-based manufacturer and distributor of vitamins and health supplements, will accelerate as it builds out its international business, namely in China. Ultimately, we expect margin leverage as the business scales. We believe the position lends defensiveness to the portfolio.
In our view, Kulicke and Soffa Industries Inc., a supplier of equipment and services used in semiconductor/electronics assembly, has
multiple growth levers ahead beyond the ongoing recovery in its core business, namely mini-LED and advanced packaging. We believe that new product success should improve the perception of the company and, in turn, the valuation multiple, thereby driving attractive shareholder returns.
The solutions of Model N Inc., a developer of revenue-cycle management software for companies in the life sciences and high-tech industries, are experiencing increased adoption as they are well-suited to help companies manage complex supply chains fraught with regulatory uncertainty, thereby increasing revenues. At the same time, the company is seeing greater cross-sales of its product suite as it shifts to a cloud-based model.
In our opinion, K12 Inc. is in a good position to benefit from increased investment in "hybrid" education offerings in light of the COVID-19 pandemic. We believe that that this, in addition to benefits from an expanded product portfolio, should lead to strong revenue growth, which will allow for margin leverage.
We anticipate that Hannon Armstrong Sustainable Infrastructure Capital Inc., a provider of financing solutions to companies in the renewable energy space, will benefit from acceleration in climate change-related projects and its expertise and relationships within the industry should allow the company to grow its balance sheet at attractive spreads, thereby driving strong earnings growth.
Biopharmaceutical firm Ligand Pharmaceuticals Inc. develops and acquires niche technologies that help pharmaceutical companies discover and develop drug therapies. We think that the company will drive meaningful royalty growth from new product approvals that are underappreciated by the market.
Cogent Communications Holdings Inc. provides internet services to corporate and "net-centric" customers and has a history of taking market share. We believe that this trend should continue, thereby driving revenue growth while the significant operating leverage in the company's business model allows operating margins to expand.
SJW Group is a provider of water and wastewater utility services across multiple states. The water service industry broadly has seen huge underinvestment over the past few decades despite its critical importance, which in our view supports ultra-long earnings growth visibility for water utility companies that earn a return on infrastructure investment.
Lattice Semiconductor Corp.'s focus and investment has narrowed to a core business, which in our view is well placed for growth in edge-computing trends. As the company returns to earnings growth, we believe that margins and returns should continue to improve in the coming years.
Semiconductor manufacturer SiteOne Landscape Supply Inc. is a distributor of landscaping supplies, including fertilizer, grass seed, irrigation, outdoor lighting, and turf care equipment. As the most-scaled player in the industry with a roughly 10% market share, we believe that SiteOne possesses the advantaged position as the consolidator of choice in a highly fragmented industry still in the early innings of consolidation.
82 | 2020 Annual Report |
Aberdeen U.S. Small Cap Equity Fund (Unaudited) (continued)
Perficient Inc. is an IT services company offering digital transformation consulting and services. In our view, the need to transform business processes is a structural need for nearly all businesses for years to come. Within this market, we feel that Perficient has demonstrated that it has leading capabilities as indicated by high business win rates and a strong, yet diversified, partner network.
WNS Holdings Ltd. is a leading outsourcing company that grew out of the captive arm of British Airways. The company has grown over time to be highly diversified by customer type and domain.
We believe that Itron Inc., a manufacturer of smart metering solutions, should benefit from increasing demand for its products as municipalities invest in technology that allows for better visibility into and management of utility infrastructure.
Engineering and consulting firm Tetra Tech Inc. has increasingly focused on higher-margin design projects centered on water, infrastructure, and environmental services. In our view, these areas offer higher growth and higher returns on capital.8
Cyber security company CyberArk Software Ltd. operates within a niche of the market, which is characterized by weak competition and in which it holds a leadership position. We believe that there will be a continuation of strong growth as enterprises across industries look to bulk up their cyber security architectures.
In our view, professional staffing and government consulting company ASGN Inc. operates in a niche with long-term growth, serving the technology, digital/creative, engineering and life sciences sectors. We believe that management historically has made thoughtful use of the company's balance sheet in an effort to grow its business and de-risk the revenue base by acquiring businesses with greater visibility in revenue streams.
We believe that PRA Group Inc. will benefit from an increasing supply of credit card portfolios as larger financial institutions look to offload bad debt as the credit cycle matures. We believe that this should drive attractive earnings growth.
Alternative investment management company Hamilton Lane Inc. is a leading provider of private market investment solutions, an area which we believe should see strong secular growth in the years to come. In our view, the company's scale9 and strong reputation in the industry will allow it to generate significant AUM growth, which will fuel attractive revenue and earnings growth.
In addition to Welbilt Inc., Horizon Therapeutics plc and Five9 Inc., as previously noted, we exited the Fund's positions in 16 other companies over the 12-month reporting period.
Shares of G-III Apparel Group Inc. significantly lagged the performance of the Russell 2000 Index over the reporting period given the overall negative investor sentiment toward retail due to what we believe is likely to be tepid demand amid store closures and
consumers' lower disposable income. We also believe that investors had concerns regarding the company's liquidity position, which is increasingly precarious. We exited the Fund's position in G-III Apparel Group in March 2020, and allocated capital toward opportunities that in our view had better risk-reward profiles.
While we believed that Pennsylvania-based banking and financial services company Univest Financial Corp.'s returns on capital10 lagged those of its peers, we believed that improvement in return on equity would come with greater scale. However, this proved to be elusive. We also became concerned as the company's loan growth exceeded that of its peers (which is often a harbinger of future credit issues).
Oilfield services company Core Laboratories N.V. has significant exposure to international and offshore oil projects, which have seen resurgence in activity. Unfortunately, North American activity has deteriorated as exploration and production companies increasingly practice capital discipline, creating a strain on Core Laboratories' balance sheet.
Niche financial services company Boston Private Financial Holdings Inc.'s wealth business segments struggled while it failed to generate the operating leverage needed to drive its returns on capital higher. We decided to shift the Fund's assets into bank holdings for which we had higher conviction.
Growth in the core residential business of Alarm.com Holdings Inc., a cloud-based provider of interactive security solutions, slowed more than we had expected, while investments in its commercial and international initiatives weighed on profitability. We ultimately found what we believed were better opportunities in software companies with higher growth and better margin opportunities.
We had originally initiated a holding in Altra Industrial Motion Corp., a manufacturer of highly engineered industrial products, in mid-2019, given its exposure to high-growth industrial end-markets and our belief in its ability to extract cost-savings from a recent acquisition, thereby allowing its margins and returns to rise. Execution on these initiatives over the past several quarters has been mixed. We increasingly expected pressure on the company's end-markets given the current economic backdrop.
Shares of commercial real estate brokerage firm Marcus & Millichap Inc. performed roughly in line with our expectations during the Fund's holding period, though the market arguably has been a bit more volatile than we had expected. However, we exited the Fund's position in the company as we saw the potential for earnings pressure in an environment of more subdued real estate activity.
We sold the Fund's shares in MGP Ingredients Inc., as the aged whiskey market did not develop as we had anticipated, leading to a series of earnings disappointments for the supplier of distillate and food ingredients. More recently, there was turnover in the management ranks which caused us some concern.
8 | Return on capital comprises the level of return that a company earns above the average cost it pays for its debt and equity capital. |
9 | Companies with scale are able to handle increasing amounts of work or sales in a capable, cost-effective manner. |
10 | Return on capital comprises the level of return that a company earns above the average cost it pays for its debt and equity capital. |
2020 Annual Report | 83 |
Aberdeen U.S. Small Cap Equity Fund (Unaudited) (continued)
We exited the Fund's position in payroll and human capital management software developer Paylocity Holding Corp. as its market capitalization exceeded the Fund's small-cap parameters. The Fund had held a position in the company given its consistent market share gains from legacy competitors that allowed for strong revenue growth at increasing operating margins. The investment thesis largely played itself out and, therefore, the stock was a strong performer for the portfolio.
We sold the Fund's shares in Pegasystems Inc., a developer of business process and customer relationship management software, as its market capitalisation had grown to exceed the portfolio's small-cap parameters following strong share-price performance. Pegasystems largely has been successful on its journey from a legacy, on-premise delivery model to a cloud-based model at the same time the category has seen increased investment. The confluence of these events has excited the market about the company's prospects.
We initially established a position in Insight Enterprises Inc., a provider of computer hardware, software, cloud solutions and IT services, given our view that it could steadily improve operating margins closer to the levels of its peers, thereby driving strong earnings growth, While we believe that this investment thesis played out to a certain extent, we subsequently became concerned with the company's uneven fundamental performance and potentially slower growth to come, given its high exposure to hardware.
We originally had initiated a holding in CMC Materials Inc. (formerly Cabot Microelectronics Cor.), a producer of chemicals used in semiconductor manufacturing, as we believed that the company would drive low but steady growth in its core market while using its strong balance sheet to make ancillary acquisitions. We believe that our investment thesis was partially validated, though we subsequently became concerned about a large acquisition that took the company outside of its core market.
The Fund had held a position in operations management and analytics company ExlService Holdings Inc., given the relative stability of the business process outsourcing (BPO) industry and our view that, over time, the company could accelerate revenue growth via its growing position in the analytics subsector. While we believe that our investment thesis played out to a certain extent, we ultimately gained greater investment conviction in ExlService Holdings' peer, WNS Holdings Ltd. (which is not a constituent of the benchmark Russell 2000 Index), which we added to the Fund in January 2020.
Our original thesis for the Fund's investment in Culp Inc., a manufacturer and marketer of upholstery fabrics for furniture, centered on the company's ability to drive low but stable sales growth at high returns on invested capital given its strong market position and efficient capital allocation program. While the company executed reasonably for a period of time, in our view, we recently became concerned about the impact of cheap imports on the company's sales as well as potentially higher input costs given the exposure of the company's supply chain.
We originally initiated a position in third-party logistics firm Echo Global Logistics Inc. as we were attracted to the asset-light12 nature and variable cost model of the industry, which allows for high returns on capital. We had a positive view on the company's ability to show improved growth and profitability over time as it grew market share in a very fragmented industry. However, ultimately higher industry supply and a weakening competitive moat hurt the company, so we decided to exit the Fund's position.
We initially established a position in Delaware-based commercial bank WSFS Financial Corp. as we believed that it achieved high returns on equity owing to an attractive fee-income stream and well-disciplined cost and credit management. However, the company undertook a large acquisition which carries incremental risk, in our opinion, while we had increasing concerns around potential credit losses. Ultimately, we saw better risk-reward profiles in other financial companies.
The economy continues to heal from an acute depression caused by the COVID-19 pandemic, in keeping with the global progress to learn more about the pathology of the virus and, through "trial and error," which measures to adapt and counteract potential case spikes. Coordinated efforts to balance the control of the virus spread with sensible economic reopenings will be more crucial to the stability of markets, in our view. And we think that the development of effective and safe vaccines and effective therapeutics, along with a federally coordinated plan to distribute them, will have a positive effect on the markets. However, in our view, the current progress to date appears to suggest that these outcomes are more likely in 2021. As we navigate towards the end of 2020, we maintain a positive view on U.S. equities despite contending with higher market levels and narrow market leadership. This positive view comes with the caveat that we also feel that upside risks will be more limited going forward, as much of the expected improvement has been priced into the markets. Nonetheless, 2020 has been the "year of the unexpected." While we are confident that we have taken stock of all the important variables, we remain "on our toes," taking deep breaths and crossing our fingers heading into the final months of this year and into 2021.
Portfolio Management:
North American Equity Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 5.75% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
12 | An asset-light business owns relatively fewer capital assets compared to the value of its operations. |
84 | 2020 Annual Report |
Aberdeen U.S. Small Cap Equity Fund (Unaudited) (concluded)
Risk Considerations
Equity stocks of small-cap companies carry greater risk and more volatility than equity stocks of larger, more established companies.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Investing a significant portion of the Fund's assets in securities of companies conducting business in a broadly related group of industries within an economic sector may make the Fund more vulnerable to unfavorable developments in that sector.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 85 |
Aberdeen U.S. Small Cap Equity Fund (Unaudited)
Average Annual Total Return (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | ||||||||
Class A | w/o SC | 8.97% | 9.19% | 11.78% | |||||||
w/SC1 | 2.72% | 7.91% | 11.13% | ||||||||
Class C | w/o SC | 8.25% | 8.43% | 11.02% | |||||||
w/SC2 | 7.26% | 8.43% | 11.02% | ||||||||
Class R3 | w/o SC | 8.59% | 8.84% | 11.48% | |||||||
Institutional Service Class3 | w/o SC | 9.24% | 9.48% | 12.10% | |||||||
Institutional Class3 | w/o SC | 9.37% | 9.53% | 12.14% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | A 5.75% front-end sales charge was deducted. |
2 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
3 | Not subject to any sales charges. |
Performance of a $10,000 Investment (as of October 31, 2020) | Comparative performance of $10,000 invested in Class A shares of the Aberdeen U.S. Small Cap Equity Fund, the Russell 2000® Index and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The Russell 2000® Index measures performance of the small-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and it represents approximately 8% of the U.S. market. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased barometer for the small-cap segment and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. |
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
86 | 2020 Annual Report |
Aberdeen U.S. Small Cap Equity Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | |||
Common Stocks | 98.6% | ||
Short-Term Investment | 0.9% | ||
Other Assets in Excess of Liabilities | 0.5% | ||
100.0% |
The following table summarizes the composition of the Fund's portfolio, in S&P Global Industry Classification Standard (GICS) sectors, expressed as a percentage of net assets as of October 31, 2020.
Top Sectors | |||
Industrials | 22.0% | ||
Information Technology | 20.0% | ||
Health Care | 15.3% | ||
Financials | 15.1% | ||
Consumer Discretionary | 8.9% | ||
Consumer Staples | 6.9% | ||
Materials | 5.4% | ||
Communication Services | 2.3% | ||
Utilities | 1.7% | ||
Real Estate | 1.0% | ||
Other | 1.4% | ||
100.0% |
Top Holdings* | |||
Hub Group, Inc., Class A | 2.7% | ||
Saia, Inc. | 2.6% | ||
RBC Bearings, Inc. | 2.5% | ||
Tetra Tech, Inc. | 2.5% | ||
Rapid7, Inc. | 2.4% | ||
First Interstate BancSystem, Inc., Class A | 2.4% | ||
Perficient, Inc. | 2.3% | ||
Mercury Systems, Inc. | 2.2% | ||
WNS Holdings Ltd., ADR | 2.2% | ||
Heska Corp. | 2.2% | ||
Other | 76.0% | ||
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | |||
United States | 89.0% | ||
Canada | 4.4% | ||
India | 2.2% | ||
Israel | 2.0% | ||
Singapore | 1.9% | ||
Other | 0.5% | ||
100.0% |
2020 Annual Report | 87 |
Statement of Investments
October 31, 2020
Aberdeen U.S. Small Cap Equity Fund
Shares or Principal Amount | Value | ||||
COMMON STOCKS (98.6%) | |||||
CANADA (4.4%) | |||||
Consumer Staples (1.5%) | |||||
Jamieson Wellness, Inc. | 395,987 | $ 11,454,882 | |||
Financials (1.5%) | |||||
TMX Group Ltd. | 111,941 | 10,877,341 | |||
Industrials (1.4%) | |||||
Richelieu Hardware Ltd. | 375,611 | 10,098,616 | |||
32,430,839 | |||||
INDIA (2.2%) | |||||
Information Technology (2.2%) | |||||
WNS Holdings Ltd., ADR (a) | 279,052 | 16,084,557 | |||
ISRAEL (2.0%) | |||||
Information Technology (2.0%) | |||||
CyberArk Software Ltd. (a) | 146,105 | 14,486,311 | |||
SINGAPORE (1.9%) | |||||
Information Technology (1.9%) | |||||
Kulicke & Soffa Industries, Inc. | 535,281 | 13,992,245 | |||
UNITED STATES (88.1%) | |||||
Communication Services (2.3%) | |||||
Bandwidth, Inc., Class A (a)(b) | 50,204 | 8,050,463 | |||
Cogent Communications Holdings, Inc. | 161,783 | 9,027,491 | |||
17,077,954 | |||||
Consumer Discretionary (8.9%) | |||||
Dorman Products, Inc. (a) | 147,996 | 13,211,603 | |||
Fox Factory Holding Corp. (a) | 176,863 | 14,870,641 | |||
Helen of Troy Ltd. (a) | 63,852 | 12,106,339 | |||
K12, Inc. (a) | 411,950 | 9,833,246 | |||
LCI Industries | 136,316 | 14,948,413 | |||
64,970,242 | |||||
Consumer Staples (5.4%) | |||||
BJ's Wholesale Club Holdings, Inc. (a) | 341,812 | 13,087,982 | |||
J&J Snack Foods Corp. | 112,474 | 15,248,100 | |||
Performance Food Group Co. (a) | 103,225 | 3,469,392 | |||
WD-40 Co. (b) | 33,001 | 8,031,783 | |||
39,837,257 | |||||
Financials (13.6%) | |||||
AMERISAFE, Inc. | 181,058 | 10,678,801 | |||
First Interstate BancSystem, Inc., Class A | 499,079 | 17,617,489 | |||
Glacier Bancorp, Inc. | 343,481 | 12,296,620 | |||
Hamilton Lane, Inc., Class A | 170,150 | 11,859,455 | |||
Hannon Armstrong Sustainable Infrastructure Capital, Inc., REIT | 305,191 | 12,772,243 | |||
PJT Partners, Inc., Class A | 157,857 | 10,680,604 | |||
PRA Group, Inc. (a) | 308,664 | 10,534,702 | |||
South State Corp. | 219,037 | 13,448,872 | |||
99,888,786 |
Shares or Principal Amount | Value | |||||
Health Care (15.3%) | ||||||
Addus HomeCare Corp. (a) | 152,257 | $ 14,855,715 | ||||
AMN Healthcare Services, Inc. (a) | 150,671 | 9,835,803 | ||||
Emergent BioSolutions, Inc. (a) | 100,908 | 9,078,693 | ||||
Globus Medical, Inc., Class A (a) | 280,817 | 14,636,182 | ||||
Heska Corp. (a) | 136,969 | 16,070,573 | ||||
Integer Holdings Corp. (a) | 268,547 | 15,696,572 | ||||
Ligand Pharmaceuticals, Inc. (a)(b) | 136,885 | 11,286,168 | ||||
Medpace Holdings, Inc. (a) | 83,219 | 9,232,316 | ||||
US Physical Therapy, Inc. | 145,309 | 11,527,363 | ||||
112,219,385 | ||||||
Industrials (20.6%) | ||||||
ASGN, Inc.(a) | 191,229 | 12,751,150 | ||||
Casella Waste Systems, Inc., Class A (a) | 285,376 | 15,407,450 | ||||
Gibraltar Industries, Inc. (a) | 229,844 | 13,204,538 | ||||
Hub Group, Inc., Class A (a) | 386,935 | 19,397,051 | ||||
Mercury Systems, Inc. (a) | 236,962 | 16,321,943 | ||||
RBC Bearings, Inc. (a) | 154,792 | 18,427,988 | ||||
Saia, Inc. (a) | 130,070 | 19,206,136 | ||||
SiteOne Landscape Supply, Inc. (a) | 87,714 | 10,480,946 | ||||
Tetra Tech, Inc. | 182,059 | 18,371,574 | ||||
Werner Enterprises, Inc. | 189,514 | 7,205,322 | ||||
150,774,098 | ||||||
Information Technology (13.9%) | ||||||
Envestnet, Inc. (a) | 209,153 | 16,050,401 | ||||
Evo Payments, Inc., Class A (a) | 580,609 | 12,233,432 | ||||
Itron, Inc. (a) | 176,215 | 11,973,809 | ||||
Lattice Semiconductor Corp. (a) | 225,250 | 7,861,225 | ||||
Manhattan Associates, Inc. (a) | 93,218 | 7,970,139 | ||||
Model N, Inc. (a) | 328,941 | 11,588,592 | ||||
Perficient, Inc. (a) | 428,190 | 16,767,920 | ||||
Rapid7, Inc. (a) | 288,012 | 17,836,583 | ||||
102,282,101 | ||||||
Materials (5.4%) | ||||||
Kaiser Aluminum Corp. | 224,311 | 14,115,891 | ||||
Neenah, Inc. | 285,027 | 10,725,566 | ||||
Quaker Chemical Corp. (b) | 79,035 | 15,079,088 | ||||
39,920,545 | ||||||
Real Estate (1.0%) | ||||||
Terreno Realty Corp., REIT | 128,073 | 7,207,949 | ||||
Utilities (1.7%) | ||||||
SJW Group | 199,678 | 12,118,458 | ||||
646,296,775 | ||||||
Total Common Stocks | 723,290,727 |
See accompanying Notes to Financial Statements.
88 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen U.S. Small Cap Equity Fund
Shares or Principal Amount | Value | |||||
SHORT-TERM INVESTMENT (0.9%) | ||||||
UNITED STATES (0.9%) | ||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (c) | $6,716,925 | $ 6,716,925 | ||||
Total Short-Term Investment | 6,716,925 | |||||
Total Investments (Cost $674,368,484) (d)—99.5% | 730,007,652 | |||||
Other Assets in Excess of Liabilities—0.5% | 3,360,188 | |||||
Net Assets—100.0% | $733,367,840 |
(a) | Non-income producing security. |
(b) | All or a portion of the securities are on loan. The total value of all securities on loan is $27,073,033. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. See Note 2(j) of the accompanying Notes to Financial Statements. |
(c) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(d) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt |
REIT | Real Estate Investment Trust |
See accompanying Notes to Financial Statements.
2020 Annual Report | 89 |
Statements of Assets and Liabilities
October 31, 2020
Aberdeen Asia-Pacific (ex-Japan) Equity Fund | Aberdeen China A Share Equity Fund | Aberdeen Dynamic Dividend Fund | Aberdeen Emerging Markets Fund | Aberdeen Focused U.S. Equity Fund | ||||||||||||||||
Assets: | ||||||||||||||||||||
Investments, at value | $ | 6,001,877 | $ | 18,242,598 | $ | 103,021,220 | $ | 3,967,756,358 | $ | 13,887,025 | ||||||||||
Short-term investments, at value | 127,059 | 1,832,781 | 685,890 | 45,168,681 | 36,170 | |||||||||||||||
Cash | – | – | – | 2,535,209 | – | |||||||||||||||
Foreign currency, at value | 6,078 | 1,484 | 69,839 | 125,963 | – | |||||||||||||||
Cash at broker for China A shares | – | 1,288 | – | – | – | |||||||||||||||
Receivable for investments sold | 14,004 | – | 518,964 | 19,969,348 | – | |||||||||||||||
Interest and dividends receivable | 6,000 | 18 | 175,287 | 3,933,720 | 11,340 | |||||||||||||||
Receivable for capital shares issued | 15,694 | 480,125 | 108,529 | 1,206,274 | 140 | |||||||||||||||
Receivable from Adviser | 19,609 | 23,395 | 7,696 | – | 11,387 | |||||||||||||||
Unrealized appreciation on forward foreign currency exchange contracts | – | – | 22,574 | – | – | |||||||||||||||
Tax reclaim receivable | – | – | 360,563 | 198,962 | – | |||||||||||||||
Securities lending income receivable | – | 1,229 | – | 1,507 | – | |||||||||||||||
Prepaid expenses | 24,377 | 28,305 | – | 104,724 | 23,432 | |||||||||||||||
Total assets | 6,214,698 | 20,611,223 | 104,970,562 | 4,041,000,746 | 13,969,494 | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Due to custodian | – | – | – | 2,535,209 | – | |||||||||||||||
Payable for investments purchased | – | 176,393 | 531,636 | 11,051,290 | – | |||||||||||||||
Payable for capital shares redeemed | 3,230 | 86,298 | 6,518 | 2,134,813 | 5,844 | |||||||||||||||
Accrued foreign capital gains tax | 4,474 | – | – | 9,370,113 | – | |||||||||||||||
Accrued expenses and other payables: | ||||||||||||||||||||
Investment advisory fees | 5,210 | 13,087 | 93,127 | 3,673,293 | 9,346 | |||||||||||||||
Custodian fees | 21,977 | 24,210 | 14,092 | 1,477,090 | 1,807 | |||||||||||||||
Sub-transfer agent and administrative services fees | 613 | 1,609 | 7,272 | 339,415 | 1,939 | |||||||||||||||
Administration fees | 417 | 1,232 | 6,722 | 273,875 | 997 | |||||||||||||||
Audit fees | 36,685 | 35,670 | 35,000 | 37,705 | 38,715 | |||||||||||||||
Legal fees | 232 | 571 | 4,365 | 155,343 | 456 | |||||||||||||||
Fund accounting fees | 191 | 515 | 3,726 | 135,391 | 573 | |||||||||||||||
Printing fees | 712 | 795 | – | 136,091 | 849 | |||||||||||||||
Transfer agent fees | 1,504 | 3,619 | 8,746 | 83,654 | 3,568 | |||||||||||||||
Distribution fees | 174 | 3,984 | 666 | 81,912 | 3,061 | |||||||||||||||
Other accrued expenses | 33,764 | 15,923 | 24,043 | 161,568 | 12,323 | |||||||||||||||
Total liabilities | 109,183 | 363,906 | 735,913 | 31,646,762 | 79,478 | |||||||||||||||
Net Assets | $ | 6,105,515 | $ | 20,247,317 | $ | 104,234,649 | $ | 4,009,353,984 | $ | 13,890,016 | ||||||||||
Cost: | ||||||||||||||||||||
Investments | $ | 4,905,448 | $ | 14,222,299 | $ | 93,446,972 | $ | 2,997,247,223 | $ | 11,369,509 | ||||||||||
Short-term investment | 127,059 | 1,832,781 | 685,890 | 45,168,681 | 36,170 | |||||||||||||||
Foreign currency | 6,010 | 1,486 | 70,158 | 125,736 | – | |||||||||||||||
Represented by: | ||||||||||||||||||||
Capital | $ | 205,864,061 | $ | 15,820,623 | $ | 100,265,133 | $ | 3,073,928,210 | $ | 9,560,664 | ||||||||||
Distributable earnings (accumulated loss) | (199,758,546 | ) | 4,426,694 | 3,969,516 | 935,425,774 | 4,329,352 | ||||||||||||||
Net Assets | $ | 6,105,515 | $ | 20,247,317 | $ | 104,234,649 | $ | 4,009,353,984 | $ | 13,890,016 | ||||||||||
Net Assets: | ||||||||||||||||||||
Class A Shares | $ | 785,254 | $ | 10,887,993 | $ | 3,884,644 | $ | 107,572,359 | $ | 7,618,453 | ||||||||||
Class C Shares | – | 586,891 | – | 11,786,397 | 528,288 | |||||||||||||||
Class R Shares | 16,081 | 3,215,052 | – | 113,706,872 | 1,952,351 | |||||||||||||||
Institutional Service Class Shares | 1,877,048 | 638,592 | – | 362,229,378 | 339,937 | |||||||||||||||
Institutional Class Shares | 3,427,132 | 4,918,789 | 100,350,005 | 3,414,058,978 | 3,450,987 | |||||||||||||||
Total | $ | 6,105,515 | $ | 20,247,317 | $ | 104,234,649 | $ | 4,009,353,984 | $ | 13,890,016 | ||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
90 | 2020 Annual Report |
Statements of Assets and Liabilities (concluded)
October 31, 2020
Aberdeen Asia-Pacific (ex-Japan) Equity Fund | Aberdeen China A Share Equity Fund | Aberdeen Dynamic Dividend Fund | Aberdeen Emerging Markets Fund | Aberdeen Focused U.S. Equity Fund | ||||||||||||||||
Shares Outstanding (unlimited number of shares authorized): | ||||||||||||||||||||
Class A Shares | 50,113 | 321,147 | 1,054,314 | 6,406,856 | 943,451 | |||||||||||||||
Class C Shares | – | 18,238 | – | 706,795 | 287,789 | |||||||||||||||
Class R Shares | 1,034 | 97,205 | – | 6,850,405 | 275,416 | |||||||||||||||
Institutional Service Class Shares | 119,185 | 18,724 | – | 21,497,006 | 40,228 | |||||||||||||||
Institutional Class Shares | 216,513 | 143,585 | 27,222,507 | 202,002,281 | 393,095 | |||||||||||||||
Total | 386,845 | 598,899 | 28,276,821 | 237,463,343 | 1,939,979 | |||||||||||||||
Net Asset Value and Redemption Price Per Share (Net assets by class divided by shares outstanding by class, respectively): | ||||||||||||||||||||
Class A Shares | $ | 15.67 | $ | 33.90 | $ | 3.68 | $ | 16.79 | $ | 8.08 | ||||||||||
Class C Shares (a) | $ | – | $ | 32.18 | $ | – | $ | 16.68 | $ | 1.84 | ||||||||||
Class R Shares | $ | 15.55 | $ | 33.07 | $ | – | $ | 16.60 | $ | 7.09 | ||||||||||
Institutional Service Class Shares | $ | 15.75 | $ | 34.11 | $ | – | $ | 16.85 | $ | 8.45 | ||||||||||
Institutional Class Shares | $ | 15.83 | $ | 34.26 | $ | 3.69 | $ | 16.90 | $ | 8.78 | ||||||||||
Maximum Offering Price Per Share (100%/(100% – maximum sales charge) of net asset value adjusted to the nearest cent): | ||||||||||||||||||||
Class A Shares | $ | 16.63 | $ | 35.97 | $ | 3.90 | $ | 17.81 | $ | 8.57 | ||||||||||
Maximum Sales Charge: | ||||||||||||||||||||
Class A Shares | 5.75 | % | 5.75 | % | 5.75 | % | 5.75 | % | 5.75 | % |
(a) For Class C Shares, the redemption price per share is reduced by 1.00% for shares held less than one year.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 91 |
Statements of Assets and Liabilities
October 31, 2020
Aberdeen Global Equity Fund | Aberdeen Global Infrastructure Fund | Aberdeen International Equity Fund | Aberdeen International Real Estate Equity Fund | Aberdeen International Small Cap Fund | ||||||||||||||||
Assets: | ||||||||||||||||||||
Investments, at value | $ | 24,971,253 | $ | 41,390,671 | $ | 215,918,906 | $ | 20,527,868 | $ | 135,793,898 | ||||||||||
Short-term investments, at value | 282,715 | – | 2,583,701 | 19,302 | 3,057,324 | |||||||||||||||
Foreign currency, at value | 3 | 24,456 | 33,432 | 28,618 | 1,112,544 | |||||||||||||||
Receivable for investments sold | – | 669,030 | – | 24,028 | 883,830 | |||||||||||||||
Receivable for capital shares issued | 594 | 72,437 | 30,348 | – | 298,061 | |||||||||||||||
Interest and dividends receivable | 13,214 | 60,655 | 86,005 | 59,264 | 53,244 | |||||||||||||||
Receivable from Adviser | 13,325 | 7,927 | – | 27,487 | 28,744 | |||||||||||||||
Unrealized appreciation on forward foreign currency exchange contracts | – | 208 | – | �� | – | – | ||||||||||||||
Tax reclaim receivable | 35,617 | 68,195 | 457,939 | 66,879 | 62,742 | |||||||||||||||
Securities lending income receivable | – | 117 | – | – | – | |||||||||||||||
Prepaid expenses | 31,135 | – | 31,684 | 1,184 | 31,468 | |||||||||||||||
Total assets | 25,347,856 | 42,293,696 | 219,142,015 | 20,754,630 | 141,321,855 | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Due to custodian | – | 122,310 | – | – | – | |||||||||||||||
Payable for investments purchased | – | – | – | 27,909 | 1,610,432 | |||||||||||||||
Unrealized depreciation on forward foreign currency exchange contracts | – | 366 | – | – | – | |||||||||||||||
Payable for capital shares redeemed | 24,230 | 12,329 | 1,424,543 | 3,470 | 108,844 | |||||||||||||||
Accrued foreign capital gains tax | – | – | – | – | 227,684 | |||||||||||||||
Bank loan payable (Note 9) | – | 177,528 | – | – | – | |||||||||||||||
Accrued expenses and other payables: | ||||||||||||||||||||
Investment advisory fees | 20,197 | 44,600 | 157,523 | 18,475 | 98,266 | |||||||||||||||
Audit fees | 35,670 | 38,750 | 35,670 | 38,250 | 37,700 | |||||||||||||||
Custodian fees | 7,002 | 22,583 | 38,997 | 38,472 | 46,556 | |||||||||||||||
Interest expense on line of credit | 110 | 22 | – | – | – | |||||||||||||||
Transfer agent fees | 9,041 | 5,684 | 22,791 | 4,455 | 14,355 | |||||||||||||||
Sub-transfer agent and administrative services fees | 2,300 | 4,761 | 16,214 | 2,503 | 11,791 | |||||||||||||||
Distribution fees | 5,600 | 1,017 | 8,361 | 150 | 20,913 | |||||||||||||||
Administration fees | 1,795 | 3,837 | 15,440 | 900 | 9,578 | |||||||||||||||
Legal fees | 728 | 3,031 | 8,772 | 344 | 4,416 | |||||||||||||||
Fund accounting fees | 871 | 2,717 | 7,040 | 1,256 | 4,014 | |||||||||||||||
Printing fees | 1,788 | – | 4,831 | – | 7,092 | |||||||||||||||
Other accrued expenses | 21,793 | 8,701 | 28,624 | 27,421 | 26,516 | |||||||||||||||
Total liabilities | 131,125 | 448,236 | 1,768,806 | 163,605 | 2,228,157 | |||||||||||||||
Net Assets | $ | 25,216,731 | $ | 41,845,460 | $ | 217,373,209 | $ | 20,591,025 | $ | 139,093,698 | ||||||||||
Cost: | ||||||||||||||||||||
Investments | $ | 19,236,138 | $ | 38,901,086 | $ | 168,751,473 | $ | 33,010,571 | $ | 107,084,973 | ||||||||||
Short-term investment | 282,715 | – | 2,583,701 | 19,302 | 3,057,324 | |||||||||||||||
Foreign currency | 3 | 24,445 | 33,485 | 28,769 | 1,112,776 | |||||||||||||||
Represented by: | ||||||||||||||||||||
Capital | $ | 24,527,710 | $ | 41,103,850 | $ | 199,003,898 | $ | 106,318,435 | $ | 112,200,258 | ||||||||||
Distributable earnings (accumulated loss) | 689,021 | 741,610 | 18,369,311 | (85,727,410 | ) | 26,893,440 | ||||||||||||||
Net Assets | $ | 25,216,731 | $ | 41,845,460 | $ | 217,373,209 | $ | 20,591,025 | $ | 139,093,698 | ||||||||||
Net Assets: | ||||||||||||||||||||
Class A Shares | $ | 22,454,570 | $ | 9,205,763 | $ | 21,418,468 | $ | 21,283 | $ | 90,560,367 | ||||||||||
Class C Shares | 205,467 | – | 2,432,282 | – | 554,445 | |||||||||||||||
Class R Shares | 897,603 | – | 3,244,150 | – | 1,648,733 | |||||||||||||||
Institutional Service Class Shares | 249,757 | – | 83,120,606 | – | – | |||||||||||||||
Institutional Class Shares | 1,409,334 | 32,639,697 | 107,157,703 | 20,569,742 | 46,330,153 | |||||||||||||||
Total | $ | 25,216,731 | $ | 41,845,460 | $ | 217,373,209 | $ | 20,591,025 | $ | 139,093,698 | ||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
92 | 2020 Annual Report |
Statements of Assets and Liabilities (concluded)
October 31, 2020
Aberdeen Global Equity Fund | Aberdeen Global Infrastructure Fund | Aberdeen International Equity Fund | Aberdeen International Real Estate Equity Fund | Aberdeen International Small Cap Fund | ||||||||||||||||
Shares Outstanding (unlimited number of shares authorized): | ||||||||||||||||||||
Class A Shares | 1,699,533 | 483,772 | 1,360,982 | 1,196 | 3,000,604 | |||||||||||||||
Class C Shares (a)(a)(a) | 16,744 | – | 164,501 | – | 20,413 | |||||||||||||||
Class R Shares | 71,564 | – | 216,583 | – | 58,246 | |||||||||||||||
Institutional Service Class Shares | 18,623 | – | 5,169,401 | – | – | |||||||||||||||
Institutional Class Shares | 106,456 | 1,713,222 | 6,635,568 | 1,145,998 | 1,525,736 | |||||||||||||||
Total | 1,912,920 | 2,196,994 | 13,547,035 | 1,147,194 | 4,604,999 | |||||||||||||||
Net Asset Value and Redemption Price Per Share (Net assets by class divided by shares outstanding by class, respectively): | ||||||||||||||||||||
Class A Shares | $ | 13.21 | $ | 19.03 | $ | 15.74 | $ | 17.80 | $ | 30.18 | ||||||||||
Class C Shares (a) | $ | 12.27 | $ | – | $ | 14.79 | $ | – | $ | 27.16 | ||||||||||
Class R Shares | $ | 12.54 | $ | – | $ | 14.98 | $ | – | $ | 28.31 | ||||||||||
Institutional Service Class Shares | $ | 13.41 | $ | – | $ | 16.08 | $ | – | $ | – | ||||||||||
Institutional Class Shares | $ | 13.24 | $ | 19.05 | $ | 16.15 | $ | 17.95 | $ | 30.37 | ||||||||||
Maximum Offering Price Per Share (100%/(100% – maximum sales charge) of net asset value adjusted to the nearest cent): | ||||||||||||||||||||
Class A Shares | $ | 14.02 | $ | 20.19 | $ | 16.70 | $ | 18.89 | $ | 32.02 | ||||||||||
Maximum Sales Charge: | ||||||||||||||||||||
Class A Shares | 5.75 | % | 5.75 | % | 5.75 | % | 5.75 | % | 5.75 | % |
(a) For Class C Shares, the redemption price per share is reduced by 1.00% for shares held less than one year.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 93 |
Statements of Assets and Liabilities
October 31, 2020
Aberdeen Realty Income & Growth Fund | Aberdeen U.S. Mid Cap Equity Fund | Aberdeen U.S. Multi-Cap Equity Fund | Aberdeen U.S. Small Cap Equity Fund | |||||||||||||
Assets: | ||||||||||||||||
Investments, at value | $ | 48,134,436 | $ | 2,179,719 | $ | 386,437,107 | $ | 723,290,727 | ||||||||
Short-term investments, at value | 1,249,869 | 18,224 | 12,730,716 | 6,716,925 | ||||||||||||
Receivable for investments sold | 547,760 | – | – | 11,365,284 | ||||||||||||
Receivable for capital shares issued | 46 | – | 1,920 | 655,496 | ||||||||||||
Interest and dividends receivable | 40,178 | 68 | 196,651 | 179,477 | ||||||||||||
Receivable from Adviser | 24,298 | 8,366 | 31,045 | 11,669 | ||||||||||||
Securities lending income receivable | – | – | 34 | 2,247 | ||||||||||||
Prepaid expenses | – | 15,533 | 39,304 | 34,285 | ||||||||||||
Total assets | 49,996,587 | 2,221,910 | 399,436,777 | 742,256,110 | ||||||||||||
Liabilities: | ||||||||||||||||
Payable for investments purchased | 1,644,040 | – | – | 6,784,582 | ||||||||||||
Payable for capital shares redeemed | 29,895 | – | 216,060 | 1,141,145 | ||||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Investment advisory fees | 43,224 | 1,446 | 265,225 | 531,798 | ||||||||||||
Audit fees | 37,250 | 35,670 | 34,655 | 35,670 | ||||||||||||
Distribution fees | 1,433 | 60 | 59,824 | 61,851 | ||||||||||||
Interest expense on line of credit | 6,147 | – | – | – | ||||||||||||
Sub-transfer agent and administrative services fees | 3,455 | – | 19,256 | 86,029 | ||||||||||||
Administration fees | 2,757 | 154 | 28,291 | 51,909 | ||||||||||||
Transfer agent fees | 5,284 | 1,731 | 35,703 | 39,507 | ||||||||||||
Printing fees | – | 259 | 2,393 | 52,098 | ||||||||||||
Legal fees | 2,011 | 86 | 12,876 | 27,415 | ||||||||||||
Fund accounting fees | 1,860 | 65 | 12,798 | 24,486 | ||||||||||||
Custodian fees | 4,528 | 1,660 | 10,259 | 15,925 | ||||||||||||
Other accrued expenses | 9,356 | 11,989 | 25,477 | 35,855 | ||||||||||||
Total liabilities | 1,791,240 | 53,120 | 722,817 | 8,888,270 | ||||||||||||
Net Assets | $ | 48,205,347 | $ | 2,168,790 | $ | 398,713,960 | $ | 733,367,840 | ||||||||
Cost: | ||||||||||||||||
Investments | $ | 38,479,514 | $ | 1,701,534 | $ | 296,795,687 | $ | 667,651,559 | ||||||||
Short-term investment | 1,249,869 | 18,224 | 12,730,716 | 6,716,925 | ||||||||||||
Represented by: | ||||||||||||||||
Capital | $ | 32,939,806 | $ | 1,518,043 | $ | 260,929,452 | $ | 636,826,701 | ||||||||
Distributable earnings | 15,265,541 | 650,747 | 137,784,508 | 96,541,139 | ||||||||||||
Net Assets | $ | 48,205,347 | $ | 2,168,790 | $ | 398,713,960 | $ | 733,367,840 | ||||||||
Net Assets: | ||||||||||||||||
Class A Shares | $ | 1,970,667 | $ | 160,832 | $ | 264,977,373 | $ | 124,672,659 | ||||||||
Class C Shares | – | 18,254 | 1,142,743 | 36,620,729 | ||||||||||||
Class R Shares | – | 18,691 | – | 3,553,648 | ||||||||||||
Institutional Service Class Shares | – | 59,572 | 121,611,497 | 31,548,135 | ||||||||||||
Institutional Class Shares | 46,234,680 | 1,911,441 | 10,982,347 | 536,972,669 | ||||||||||||
Total | $ | 48,205,347 | $ | 2,168,790 | $ | 398,713,960 | $ | 733,367,840 | ||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
94 | 2020 Annual Report |
Statements of Assets and Liabilities (concluded)
October 31, 2020
Aberdeen Realty Income & Growth Fund | Aberdeen U.S. Mid Cap Equity Fund | Aberdeen U.S. Multi-Cap Equity Fund | Aberdeen U.S. Small Cap Equity Fund | |||||||||||||
Shares Outstanding (unlimited number of shares authorized): | ||||||||||||||||
Class A Shares | 158,873 | 10,524 | 19,208,891 | 3,716,300 | ||||||||||||
Class C Shares | – | 1,238 | 100,608 | 1,332,546 | ||||||||||||
Class R Shares | – | 1,237 | – | 117,978 | ||||||||||||
Institutional Service Class Shares | – | 3,871 | 8,166,911 | 874,781 | ||||||||||||
Institutional Class Shares | 3,717,611 | 124,193 | 734,085 | 14,879,859 | ||||||||||||
Total | 3,876,484 | 141,063 | 28,210,495 | 20,921,464 | ||||||||||||
Net Asset Value and Redemption Price Per Share (Net assets by class divided by shares outstanding by class, respectively): | ||||||||||||||||
Class A Shares | $ | 12.40 | $ | 15.28 | $ | 13.79 | $ | 33.55 | ||||||||
Class C Shares (a) | $ | – | $ | 14.74 | $ | 11.36 | $ | 27.48 | ||||||||
Class R Shares | $ | – | $ | 15.11 | $ | – | $ | 30.12 | ||||||||
Institutional Service Class Shares | $ | – | $ | 15.39 | $ | 14.89 | $ | 36.06 | ||||||||
Institutional Class Shares | $ | 12.44 | $ | 15.39 | $ | 14.96 | $ | 36.09 | ||||||||
Maximum Offering Price Per Share (100%/(100% – maximum sales charge) of net asset value adjusted to the nearest cent): | ||||||||||||||||
Class A Shares | $ | 13.16 | $ | 16.21 | $ | 14.63 | $ | 35.60 | ||||||||
Maximum Sales Charge: | ||||||||||||||||
Class A Shares | 5.75 | % | 5.75 | % | 5.75 | % | 5.75 | % |
(a) For Class C Shares, the redemption price per share is reduced by 1.00% for shares held less than one year.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 95 |
Statements of Operations
For the Year Ended October 31, 2020
Aberdeen Asia-Pacific (ex-Japan) Equity Fund | Aberdeen China A Share Equity Fund | Aberdeen Dynamic Dividend Fund | Aberdeen Emerging Markets Fund | Aberdeen Focused U.S. Equity Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
Dividend income | $ | 119,053 | $ | 248,035 | $ | 7,931,738 | $ | 82,001,845 | $ | 186,645 | ||||||||||
Interest income | 325 | 4,801 | 4,689 | 330,518 | 1,624 | |||||||||||||||
Securities lending income, net | – | 2,369 | – | 65,046 | 99 | |||||||||||||||
Foreign tax withholding | (11,542 | ) | (24,362 | ) | (340,600 | ) | (10,830,893 | ) | (467 | ) | ||||||||||
Other income | – | – | – | 3,671 | – | |||||||||||||||
Total Income | 107,836 | 230,843 | 7,595,827 | 71,570,187 | 187,901 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory fees | 58,646 | 131,531 | 1,146,004 | 38,013,107 | 132,773 | |||||||||||||||
Trustee fees | 500 | 1,288 | 9,777 | 363,726 | 1,532 | |||||||||||||||
Administration fees | 4,692 | 12,379 | 91,680 | 3,378,943 | 14,163 | |||||||||||||||
Legal fees | 502 | 1,739 | 9,263 | 345,959 | 1,391 | |||||||||||||||
Audit fees | 36,685 | 35,670 | 35,000 | 37,705 | 38,715 | |||||||||||||||
Printing fees | 8,862 | 7,999 | 14,370 | 421,215 | 7,707 | |||||||||||||||
Custodian fees | 28,947 | 33,712 | 39,406 | 1,941,241 | 9,949 | |||||||||||||||
Transfer agent fees | 9,704 | 20,802 | 43,339 | 584,236 | 20,717 | |||||||||||||||
Distribution fees Class A | 1,883 | 22,002 | 10,578 | 284,871 | 20,061 | |||||||||||||||
Distribution fees Class C | 77 | 6,376 | – | 129,797 | 36,174 | |||||||||||||||
Distribution fees Class R | 72 | 13,900 | – | 535,813 | 9,695 | |||||||||||||||
Sub-transfer agent and administrative service fees Institutional Class | 4,427 | 3,126 | 78,199 | 3,169,656 | 5,859 | |||||||||||||||
Sub-transfer agent and administrative service fees Class A | 277 | 6,432 | 3,185 | 284,871 | 6,770 | |||||||||||||||
Sub-transfer agent and administrative service fees Class C | 11 | 947 | – | 12,231 | 2,215 | |||||||||||||||
Sub-transfer agent and administrative service fees Class R | – | 3,553 | – | 153,087 | 620 | |||||||||||||||
Sub-transfer agent and administrative service fees Institutional Service Class | 1,717 | 503 | – | 451,612 | 611 | |||||||||||||||
Fund accounting fees | 243 | 820 | 4,026 | 230,349 | 1,007 | |||||||||||||||
Registration and filing fees | 60,382 | 68,211 | 33,760 | 150,638 | 65,982 | |||||||||||||||
Other | 50,954 | 29,901 | 41,699 | 670,887 | 22,097 | |||||||||||||||
Total expenses before reimbursed/waived expenses | 268,581 | 400,891 | 1,560,286 | 51,159,944 | 398,038 | |||||||||||||||
Interest expense (Note 9) | 124 | 136 | – | 23,558 | 25 | |||||||||||||||
Total operating expenses before reimbursed/waived expenses | 268,705 | 401,027 | 1,560,286 | 51,183,502 | 398,063 | |||||||||||||||
Expenses reimbursed | (191,646 | ) | (194,764 | ) | (114,147 | ) | (2,887,668 | ) | (164,571 | ) | ||||||||||
Net expenses | 77,059 | 206,263 | 1,446,139 | 48,295,834 | 233,492 | |||||||||||||||
Net Investment Income/(Loss) | 30,777 | 24,580 | 6,149,688 | 23,274,353 | (45,591 | ) | ||||||||||||||
REALIZED/UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: | ||||||||||||||||||||
Realized gain/(loss) on investment transactions | 248,420 | 390,728 | (2,218,709 | ) | 55,329,477 | 3,119,264 | ||||||||||||||
Realized gain/(loss) on forward foreign currency exchange contracts | – | – | (119,696 | ) | – | – | ||||||||||||||
Realized gain/(loss) on foreign currency transactions | (4,075 | ) | (6,583 | ) | 1,122 | (4,842,532 | ) | 387 | ||||||||||||
Net realized gain/(loss) from investments and foreign currency transactions | 244,345 | 384,145 | (2,337,283 | ) | 50,486,945 | 3,119,651 | ||||||||||||||
Net change in unrealized appreciation/(depreciation) on investment transactions (including $10,631, $0, $0, $6,887,753 and $0 change in deferred capital gains tax, respectively) | 430,702 | 3,899,066 | (6,055,651 | ) | 220,340,626 | (994,419 | ) | |||||||||||||
Net change in unrealized appreciation/(depreciation) on forward foreign currency exchange rate contracts | – | – | 59,158 | – | – | |||||||||||||||
Net change in unrealized appreciation/(depreciation) on translation of assets and liabilities denominated in foreign currencies | (456 | ) | 135 | 20,810 | (36,390 | ) | (7 | ) | ||||||||||||
Net change in unrealized appreciation/(depreciation) from investments and translation of assets and liabilities denominated in foreign currencies | 430,246 | 3,899,201 | (5,975,683 | ) | 220,304,236 | (994,426 | ) | |||||||||||||
Net realized/unrealized gain/(loss) from investments and foreign currency transactions | 674,591 | 4,283,346 | (8,312,966 | ) | 270,791,181 | 2,125,225 | ||||||||||||||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 705,368 | $ | 4,307,926 | $ | (2,163,278 | ) | $ | 294,065,534 | $ | 2,079,634 | |||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
96 | 2020 Annual Report |
Statements of Operations (continued)
For the Year Ended October 31, 2020
Aberdeen Global Equity Fund | Aberdeen Global Infrastructure Fund | Aberdeen International Equity Fund | Aberdeen International Real Estate Equity Fund | Aberdeen International Small Cap Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
Dividend income | $ | 424,561 | $ | 3,515,717 | $ | 3,531,843 | $ | 1,351,233 | $ | 1,409,576 | ||||||||||
Interest income | 1,749 | 8,776 | 32,844 | 2,677 | 29,675 | |||||||||||||||
Securities lending income, net | – | 1,435 | 44 | – | – | |||||||||||||||
Foreign tax withholding | (28,125 | ) | (166,151 | ) | (336,962 | ) | (80,819 | ) | (151,218 | ) | ||||||||||
Other income | – | 418 | – | 1,229 | – | |||||||||||||||
Total Income | 398,185 | 3,360,195 | 3,227,769 | 1,274,320 | 1,288,033 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory fees | 242,995 | 768,643 | 1,706,646 | 406,987 | 1,059,138 | |||||||||||||||
Trustee fees | 2,318 | 7,408 | 18,162 | 3,601 | 10,025 | |||||||||||||||
Administration fees | 21,599 | 67,698 | 170,665 | 32,559 | 96,048 | |||||||||||||||
Legal fees | 2,255 | 7,081 | 18,379 | 2,377 | 10,739 | |||||||||||||||
Audit fees | 35,670 | 38,750 | 35,670 | 33,250 | 37,700 | |||||||||||||||
Printing fees | 11,001 | 15,856 | 32,683 | 27,648 | 27,949 | |||||||||||||||
Custodian fees | 15,448 | 33,498 | 53,636 | 64,190 | 62,228 | |||||||||||||||
Transfer agent fees | 50,850 | 28,258 | 130,582 | 23,458 | 80,184 | |||||||||||||||
Distribution fees Class A | 59,641 | 26,841 | 55,084 | 325 | 202,117 | |||||||||||||||
Distribution fees Class C | 4,287 | – | 32,707 | – | 6,586 | |||||||||||||||
Distribution fees Class R | 5,691 | – | 17,378 | – | 10,389 | |||||||||||||||
Sub-transfer agent and administrative service fees Class A | 21,613 | 8,063 | 34,290 | 110 | 85,210 | |||||||||||||||
Sub-transfer agent and administrative service fees Institutional Class | 750 | 30,852 | 42,553 | 32,657 | 33,074 | |||||||||||||||
Sub-transfer agent and administrative service fees Class C | 909 | – | 3,537 | – | 805 | |||||||||||||||
Sub-transfer agent and administrative service fees Class R | 2,447 | – | 5,159 | – | 2,975 | |||||||||||||||
Sub-transfer agent and administrative service fees Institutional Service Class | 258 | – | 53,030 | – | 24 | |||||||||||||||
Fund accounting fees | 1,428 | 2,957 | 11,201 | 258 | 6,689 | |||||||||||||||
Registration and filing fees | 64,499 | 31,596 | 67,055 | 33,284 | 66,347 | |||||||||||||||
Other | 45,311 | 34,231 | 75,822 | 32,534 | 54,014 | |||||||||||||||
Total expenses before reimbursed/waived expenses | 588,970 | 1,101,732 | 2,564,239 | 693,238 | 1,852,241 | |||||||||||||||
Interest expense (Note 9) | 218 | – | 913 | 9,491 | – | |||||||||||||||
Total operating expenses before reimbursed/waived expenses | 589,188 | 1,101,732 | 2,565,152 | 702,729 | 1,852,241 | |||||||||||||||
Expenses reimbursed | (173,186 | ) | (162,223 | ) | (32,170 | ) | (134,634 | ) | (291,518 | ) | ||||||||||
Net expenses | 416,002 | 939,509 | 2,532,982 | 568,095 | 1,560,723 | |||||||||||||||
Net Investment Income/(Loss) | (17,817 | ) | 2,420,686 | 694,787 | 706,225 | (272,690 | ) | |||||||||||||
REALIZED/UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: | ||||||||||||||||||||
Realized gain/(loss) on investment transactions | (88,996 | ) | (545,037 | ) | (682,605 | ) | 468,036 | (1,222,148 | ) | |||||||||||
Realized gain/(loss) on forward foreign currency exchange contracts | – | (87,335 | ) | – | 9,806 | – | ||||||||||||||
Realized gain/(loss) on foreign currency transactions | (7,038 | ) | (1,572 | ) | (53,378 | ) | (28,411 | ) | (76,715 | ) | ||||||||||
Net realized gain/(loss) from investments and foreign currency transactions | (96,034 | ) | (633,944 | ) | (735,983 | ) | 449,431 | (1,298,863 | ) | |||||||||||
Net change in unrealized appreciation/(depreciation) on investment transactions (including $6,391, $0, $0, $37,086 and $201,791 change in deferred capital gains tax, respectively) | 1,506,343 | (9,651,542 | ) | 17,453,245 | (7,022,998 | ) | 16,872,885 | |||||||||||||
Net change in unrealized appreciation/(depreciation) on forward foreign currency exchange rate contracts | – | 2,314 | – | – | – | |||||||||||||||
Net change in unrealized appreciation/(depreciation) on translation of assets and liabilities denominated in foreign currencies | 2,556 | 2,830 | 51,044 | 2,889 | (5,673 | ) | ||||||||||||||
Net change in unrealized appreciation/(depreciation) from investments and translation of assets and liabilities denominated in foreign currencies | 1,508,899 | (9,646,398 | ) | 17,504,289 | (7,020,109 | ) | 16,867,212 | |||||||||||||
Net realized/unrealized gain/(loss) from investments and foreign currency transactions | 1,412,865 | (10,280,342 | ) | 16,768,306 | (6,570,678 | ) | 15,568,349 | |||||||||||||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,395,048 | $ | (7,859,656 | ) | $ | 17,463,093 | $ | (5,864,453 | ) | $ | 15,295,659 | ||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 97 |
Statements of Operations (concluded)
For the Year Ended October 31, 2020
Aberdeen Realty Income & Growth Fund | Aberdeen U.S. Mid Cap Equity Fund | Aberdeen U.S. Multi-Cap Equity Fund | Aberdeen U.S. Small Cap Equity Fund | |||||||||||||
INVESTMENT INCOME: | ||||||||||||||||
Dividend income | $ | 1,823,015 | $ | 15,024 | $ | 3,686,717 | $ | 5,855,134 | ||||||||
Interest income | 1,247 | 350 | 36,243 | 94,947 | ||||||||||||
Securities lending income, net | 673 | – | 8,208 | 61,025 | ||||||||||||
Foreign tax withholding | – | (469 | ) | (66,227 | ) | (113,442 | ) | |||||||||
Other income | 417 | – | – | – | ||||||||||||
Total Income | 1,825,352 | 14,905 | 3,664,941 | 5,897,664 | ||||||||||||
EXPENSES: | ||||||||||||||||
Investment advisory fees | 587,802 | 14,602 | 2,878,160 | 6,202,877 | ||||||||||||
Trustee fees | 5,093 | 164 | 32,621 | 65,931 | ||||||||||||
Administration fees | 47,024 | 1,558 | 307,004 | 605,288 | ||||||||||||
Legal fees | 7,876 | 172 | 33,265 | 65,560 | ||||||||||||
Audit fees | 37,250 | 35,670 | 34,655 | 35,670 | ||||||||||||
Printing fees | 24,230 | 7,931 | 35,600 | 70,393 | ||||||||||||
Custodian fees | 6,512 | 9,495 | 20,835 | 24,785 | ||||||||||||
Transfer agent fees | 25,517 | 7,808 | 205,128 | 242,559 | ||||||||||||
Distribution fees Class A | 5,047 | 309 | 639,060 | 333,587 | ||||||||||||
Distribution fees Class C | – | 166 | 13,018 | 409,958 | ||||||||||||
Distribution fees Class R | – | 85 | 24 | 20,584 | ||||||||||||
Sub-transfer agent and administrative service fees Institutional Class | 42,480 | – | 4,471 | 546,859 | ||||||||||||
Sub-transfer agent and administrative service fees Class A | 999 | – | 103,565 | 200,835 | ||||||||||||
Sub-transfer agent and administrative service fees Class C | – | – | 1,537 | 40,594 | ||||||||||||
Sub-transfer agent and administrative service fees Class R | – | – | 12 | 10,292 | ||||||||||||
Sub-transfer agent and administrative service fees Institutional Service Class | – | – | 80,700 | 45,214 | ||||||||||||
Fund accounting fees | 2,018 | 105 | 21,179 | 34,540 | ||||||||||||
Registration and filing fees | 31,033 | 64,938 | 66,763 | 77,663 | ||||||||||||
Other | 25,432 | 19,834 | 71,838 | 130,947 | ||||||||||||
Total expenses before reimbursed/waived expenses | 848,313 | 162,837 | 4,549,435 | 9,164,136 | ||||||||||||
Interest expense (Note 9) | 28,862 | – | – | 458 | ||||||||||||
Total operating expenses before reimbursed/waived expenses | 877,175 | 162,837 | 4,549,435 | 9,164,594 | ||||||||||||
Expenses reimbursed | (254,885 | ) | (142,803 | ) | (257,392 | ) | (327,286 | ) | ||||||||
Net expenses | 622,290 | 20,034 | 4,292,043 | 8,837,308 | ||||||||||||
Net Investment Income/(Loss) | 1,203,062 | (5,129 | ) | (627,102 | ) | (2,939,644 | ) | |||||||||
REALIZED/UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: | ||||||||||||||||
Realized gain on investment transactions | 7,265,239 | 178,313 | 48,986,496 | 60,911,912 | ||||||||||||
Realized gain/(loss) on foreign currency transactions | – | 84 | (376 | ) | 10,405 | |||||||||||
Net realized gain from investments and foreign currency transactions | 7,265,239 | 178,397 | 48,986,120 | 60,922,317 | ||||||||||||
Net change in unrealized appreciation/(depreciation) on investment transactions | (21,294,723 | ) | 158,107 | 13,838,958 | (4,343,089 | ) | ||||||||||
Net change in unrealized appreciation/(depreciation) on translation of assets and liabilities denominated in foreign currencies | – | – | – | (323 | ) | |||||||||||
Net change in unrealized appreciation/(depreciation) from investments and translation of assets and liabilities denominated in foreign currencies | (21,294,723 | ) | 158,107 | 13,838,958 | (4,343,412 | ) | ||||||||||
Net realized/unrealized gain/(loss) from investments and foreign currency transactions | (14,029,484 | ) | 336,504 | 62,825,078 | 56,578,905 | |||||||||||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (12,826,422 | ) | $ | 331,375 | $ | 62,197,976 | $ | 53,639,261 | |||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
98 | 2020 Annual Report |
Statements of Changes in Net Assets
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (a) | Aberdeen China A Share Equity Fund | Aberdeen Dynamic Dividend Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
FROM INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income | $ | 30,777 | $ | 92,684 | $ | 24,580 | $ | 22,180 | $ | 6,149,688 | $ | 8,319,427 | ||||||||||||||||||||
Net realized gain/(loss) from investments and foreign currency transactions | 244,345 | 251,287 | 384,145 | 2,069,105 | (2,337,283 | ) | 2,416,428 | |||||||||||||||||||||||||
Net change in unrealized appreciation/(depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 430,246 | 1,153,553 | 3,899,201 | 743,133 | (5,975,683 | ) | 2,013,587 | |||||||||||||||||||||||||
Changes in net assets resulting from operations | 705,368 | 1,497,524 | 4,307,926 | 2,834,418 | (2,163,278 | ) | 12,749,442 | |||||||||||||||||||||||||
Distributions to Shareholders From: | ||||||||||||||||||||||||||||||||
Distributable earnings: | ||||||||||||||||||||||||||||||||
Class A | (9,136 | ) | (8,413 | ) | (365,061 | ) | (11,640 | ) | (254,850 | ) | (266,737 | ) | ||||||||||||||||||||
Class C | – | – | (36,488 | ) | – | – | – | |||||||||||||||||||||||||
Class R | (146 | ) | (93 | ) | (117,596 | ) | – | – | – | |||||||||||||||||||||||
Institutional Service Class | (23,517 | ) | (19,653 | ) | (23,077 | ) | (2,435 | ) | – | – | ||||||||||||||||||||||
Institutional Class | (49,520 | ) | (63,588 | ) | (187,398 | ) | (1,336 | ) | (6,902,794 | ) | (8,089,170 | ) | ||||||||||||||||||||
Change in net assets from shareholder distributions | (82,319 | ) | (91,747 | ) | (729,620 | ) | (15,411 | ) | (7,157,644 | ) | (8,355,907 | ) | ||||||||||||||||||||
Change in net assets from capital transactions | (1,038,465 | ) | (2,645,205 | ) | 2,582,964 | 1,226,262 | (13,040,733 | ) | (17,564,519 | ) | ||||||||||||||||||||||
Change in net assets | (415,416 | ) | (1,239,428 | ) | 6,161,270 | 4,045,269 | (22,361,655 | ) | (13,170,984 | ) | ||||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||||||||
Beginning of year | 6,520,931 | 7,760,359 | 14,086,047 | 10,040,778 | 126,596,304 | 139,767,288 | ||||||||||||||||||||||||||
End of year | $ | 6,105,515 | $ | 6,520,931 | $ | 20,247,317 | $ | 14,086,047 | $ | 104,234,649 | $ | 126,596,304 | ||||||||||||||||||||
(a) | Effective February 28, 2020, the Class C had zero assets. On February 28, 2020, the Aberdeen Asia-Pacific (ex-Japan) Equity Fund ceased offering Class C Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 99 |
Statements of Changes in Net Assets (continued)
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (a) | Aberdeen China A Share Equity Fund | Aberdeen Dynamic Dividend Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | 268,071 | $ | 107,579 | $ | 2,357,438 | $ | 2,509,748 | $ | 1,102,207 | $ | 1,061,690 | ||||||||||||||||||||
Dividends reinvested | 8,635 | 6,982 | 281,529 | 8,113 | 184,731 | 204,614 | ||||||||||||||||||||||||||
Cost of shares redeemed | (370,464 | ) | (327,844 | ) | (2,901,024 | ) | (1,574,364 | ) | (1,351,440 | ) | (1,557,872 | ) | ||||||||||||||||||||
Total Class A | (93,758 | ) | (213,283 | ) | (262,057 | ) | 943,497 | (64,502 | ) | (291,568 | ) | |||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | – | 41,334 | 338,722 | 55,444 | – | – | ||||||||||||||||||||||||||
Dividends reinvested | – | – | 28,425 | – | – | – | ||||||||||||||||||||||||||
Cost of shares redeemed | (24,203 | ) | (91,630 | ) | (769,429 | ) | (1,103,921 | ) | – | – | ||||||||||||||||||||||
Total Class C | (24,203 | ) | (50,296 | ) | (402,282 | ) | (1,048,477 | ) | – | – | ||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | – | – | 2,291,996 | 1,466,056 | – | – | ||||||||||||||||||||||||||
Dividends reinvested | 146 | 93 | 115,553 | – | – | – | ||||||||||||||||||||||||||
Cost of shares redeemed | – | – | (2,457,975 | ) | (899,689 | ) | – | – | ||||||||||||||||||||||||
Total Class R | 146 | 93 | (50,426 | ) | 566,367 | – | – | |||||||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 153,805 | – | 7,204 | 49,286 | – | – | ||||||||||||||||||||||||||
Dividends reinvested | 23,219 | 19,426 | 22,310 | 2,366 | – | – | ||||||||||||||||||||||||||
Cost of shares redeemed | (284,108 | ) | (158,223 | ) | (88,301 | ) | (182,810 | ) | – | – | ||||||||||||||||||||||
Total Institutional Service Class | (107,084 | ) | (138,797 | ) | (58,787 | ) | (131,158 | ) | – | – | ||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 75,167 | 262,803 | 8,980,315 | 941,079 | 4,802,370 | 10,343,646 | ||||||||||||||||||||||||||
Dividends reinvested | 47,854 | 59,297 | 186,013 | 1,235 | 5,669,817 | 6,105,619 | ||||||||||||||||||||||||||
Cost of shares redeemed | (936,587 | ) | (2,565,022 | ) | (5,809,812 | ) | (46,281 | ) | (23,448,418 | ) | (33,722,216 | ) | ||||||||||||||||||||
Total Institutional Class | (813,566 | ) | (2,242,922 | ) | 3,356,516 | 896,033 | (12,976,231 | ) | (17,272,951 | ) | ||||||||||||||||||||||
Change in net assets from capital transactions: | $ | (1,038,465 | ) | $ | (2,645,205 | ) | $ | 2,582,964 | $ | 1,226,262 | $ | (13,040,733 | ) | $ | (17,564,519 | ) | ||||||||||||||||
(a) | Effective February 28, 2020, the Class C had zero assets. On February 28, 2020, the Aberdeen Asia-Pacific (ex-Japan) Equity Fund ceased offering Class C Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
100 | 2020 Annual Report |
Statements of Changes in Net Assets (concluded)
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (a) | Aberdeen China A Share Equity Fund | Aberdeen Dynamic Dividend Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Issued | 18,605 | 8,223 | 82,454 | 104,997 | 280,952 | 279,302 | ||||||||||||||||||||||||||
Reinvested | 600 | 589 | 11,176 | 403 | 48,510 | 53,476 | ||||||||||||||||||||||||||
Redeemed | (26,756 | ) | (24,516 | ) | (111,590 | ) | (67,250 | ) | (376,261 | ) | (403,025 | ) | ||||||||||||||||||||
Total Class A Shares | (7,551 | ) | (15,704 | ) | (17,960 | ) | 38,150 | (46,799 | ) | (70,247 | ) | |||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Issued | – | 3,496 | 11,921 | 2,441 | – | – | ||||||||||||||||||||||||||
Reinvested | – | – | 1,182 | – | – | – | ||||||||||||||||||||||||||
Redeemed | (1,787 | ) | (7,206 | ) | (29,096 | ) | (50,243 | ) | – | – | ||||||||||||||||||||||
Total Class C Shares | (1,787 | ) | (3,710 | ) | (15,993 | ) | (47,802 | ) | – | – | ||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Issued | – | – | 78,882 | 61,077 | – | – | ||||||||||||||||||||||||||
Reinvested | 10 | 8 | 4,690 | – | – | – | ||||||||||||||||||||||||||
Redeemed | – | – | (93,279 | ) | (39,561 | ) | – | – | ||||||||||||||||||||||||
Total Class R Shares | 10 | 8 | (9,707 | ) | 21,516 | – | – | |||||||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Issued | 10,231 | – | 240 | 2,342 | – | – | ||||||||||||||||||||||||||
Reinvested | 1,609 | 1,632 | 882 | 117 | – | – | ||||||||||||||||||||||||||
Redeemed | (19,708 | ) | (12,120 | ) | (3,489 | ) | (7,971 | ) | – | – | ||||||||||||||||||||||
Total Institutional Service Class Shares | (7,868 | ) | (10,488 | ) | (2,367 | ) | (5,512 | ) | – | – | ||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Issued | 5,484 | 20,736 | 335,208 | 38,526 | 1,259,907 | 2,694,648 | ||||||||||||||||||||||||||
Reinvested | 3,303 | 4,971 | 7,329 | 61 | 1,485,417 | 1,594,805 | ||||||||||||||||||||||||||
Redeemed | (72,690 | ) | (190,601 | ) | (250,650 | ) | (1,813 | ) | (6,098,779 | ) | (8,867,607 | ) | ||||||||||||||||||||
Total Institutional Class Shares | (63,903 | ) | (164,894 | ) | 91,887 | 36,774 | (3,353,455 | ) | (4,578,154 | ) | ||||||||||||||||||||||
Total change in shares: | (81,099 | ) | (194,788 | ) | 45,860 | 43,126 | (3,400,254 | ) | (4,648,401 | ) | ||||||||||||||||||||||
(a) | Effective February 28, 2020, the Class C had zero assets. On February 28, 2020, the Aberdeen Asia-Pacific (ex-Japan) Equity Fund ceased offering Class C Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 101 |
Statements of Changes in Net Assets
Aberdeen Emerging Markets Fund | Aberdeen Focused U.S. Equity Fund | Aberdeen Global Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
FROM INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income/(loss) | $ | 23,274,353 | $ | 49,668,973 | $ | (45,591 | ) | $ | 23,198 | $ | (17,817 | ) | $ | 206,612 | ||||||||||||||||||
Net realized gain/(loss) from investments and foreign currency transactions | 50,486,945 | (7,772,347 | ) | 3,119,651 | 1,922,763 | (96,034 | ) | 1,260,801 | ||||||||||||||||||||||||
Net change in unrealized appreciation/ (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 220,304,236 | 908,524,388 | (994,426 | ) | 1,251,147 | 1,508,899 | 1,681,619 | |||||||||||||||||||||||||
Changes in net assets resulting from operations | 294,065,534 | 950,421,014 | 2,079,634 | 3,197,108 | 1,395,048 | 3,149,032 | ||||||||||||||||||||||||||
Distributions to Shareholders From: | ||||||||||||||||||||||||||||||||
Distributable earnings: | ||||||||||||||||||||||||||||||||
Class A | (1,951,827 | ) | (1,592,438 | ) | (516,902 | ) | (383,167 | ) | (868,962 | ) | (2,207,033 | ) | ||||||||||||||||||||
Class C | (124,024 | ) | (31,452 | ) | (1,046,758 | ) | (827,552 | ) | (16,881 | ) | (130,236 | ) | ||||||||||||||||||||
Class R | (1,539,762 | ) | (993,291 | ) | (128,715 | ) | (110,110 | ) | (41,507 | ) | (167,295 | ) | ||||||||||||||||||||
Institutional Service Class | (5,613,349 | ) | (1,985,110 | ) | (28,367 | ) | (37,768 | ) | (9,300 | ) | (33,142 | ) | ||||||||||||||||||||
Institutional Class | (84,695,780 | ) | (81,163,528 | ) | (203,205 | ) | (262,781 | ) | (48,762 | ) | (168,324 | ) | ||||||||||||||||||||
Change in net assets from shareholder distributions | (93,924,742 | ) | (85,765,819 | ) | (1,923,947 | ) | (1,621,378 | ) | (985,412 | ) | (2,706,030 | ) | ||||||||||||||||||||
Change in net assets from capital transactions | (1,167,570,408 | ) | (1,767,027,228 | ) | (6,463,943 | ) | 1,654,026 | (5,758,382 | ) | (3,804,938 | ) | |||||||||||||||||||||
Change in net assets | (967,429,616 | ) | (902,372,033 | ) | (6,308,256 | ) | 3,229,756 | (5,348,746 | ) | (3,361,936 | ) | |||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||||||||
Beginning of year | 4,976,783,600 | 5,879,155,633 | 20,198,272 | 16,968,516 | 30,565,477 | 33,927,413 | ||||||||||||||||||||||||||
End of year | $ | 4,009,353,984 | $ | 4,976,783,600 | $ | 13,890,016 | $ | 20,198,272 | $ | 25,216,731 | $ | 30,565,477 | ||||||||||||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
102 | 2020 Annual Report |
Statements of Changes in Net Assets (continued)
Aberdeen Emerging Markets Fund | Aberdeen Focused U.S. Equity Fund | Aberdeen Global Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | 28,076,891 | $ | 37,953,244 | $ | 1,202,461 | $ | 1,294,656 | $ | 710,053 | $ | 1,845,880 | ||||||||||||||||||||
Dividends reinvested | 1,470,556 | 1,256,868 | 388,246 | 287,597 | 778,955 | 1,942,808 | ||||||||||||||||||||||||||
Cost of shares redeemed | (62,257,358 | ) | (71,367,988 | ) | (2,708,909 | ) | (1,481,280 | ) | (6,114,296 | ) | (5,047,195 | ) | ||||||||||||||||||||
Total Class A | (32,709,911 | ) | (32,157,876 | ) | (1,118,202 | ) | 100,973 | (4,625,288 | ) | (1,258,507 | ) | |||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 1,701,259 | 3,520,031 | 89,627 | 3,726,939 | 8,871 | 124,063 | ||||||||||||||||||||||||||
Dividends reinvested | 93,528 | 25,515 | 1,034,134 | 796,715 | 10,950 | 106,927 | ||||||||||||||||||||||||||
Cost of shares redeemed | (6,398,572 | ) | (6,613,138 | ) | (4,863,444 | ) | (1,047,978 | ) | (449,273 | ) | (1,289,443 | ) | ||||||||||||||||||||
Total Class C | (4,603,785 | ) | (3,067,592 | ) | (3,739,683 | ) | 3,475,676 | (429,452 | ) | (1,058,453 | ) | |||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 8,471,911 | 12,142,817 | 276,677 | 179,304 | 126,197 | 394,623 | ||||||||||||||||||||||||||
Dividends reinvested | 1,516,758 | 957,905 | 128,715 | 110,110 | 27,447 | 103,442 | ||||||||||||||||||||||||||
Cost of shares redeemed | (15,309,881 | ) | (9,599,801 | ) | (472,535 | ) | (461,802 | ) | (832,866 | ) | (1,070,663 | ) | ||||||||||||||||||||
Total Class R | (5,321,212 | ) | 3,500,921 | (67,143 | ) | (172,388 | ) | (679,222 | ) | (572,598 | ) | |||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 244,923,207 | 192,426,827 | 3,000 | 74,584 | 5,350 | – | ||||||||||||||||||||||||||
Dividends reinvested | 5,612,010 | 1,984,889 | 28,367 | 37,768 | 9,300 | 33,142 | ||||||||||||||||||||||||||
Cost of shares redeemed | (213,562,876 | ) | (43,565,908 | ) | (192,119 | ) | (362,786 | ) | (37,522 | ) | (223,695 | ) | ||||||||||||||||||||
Total Institutional Service Class | 36,972,341 | 150,845,808 | (160,752 | ) | (250,434 | ) | (22,872 | ) | (190,553 | ) | ||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 549,097,142 | 741,208,690 | 340,696 | 227,043 | 390,387 | 269,692 | ||||||||||||||||||||||||||
Dividends reinvested | 63,089,194 | 60,527,608 | 197,284 | 255,707 | 46,409 | 161,915 | ||||||||||||||||||||||||||
Cost of shares redeemed | (1,774,094,177 | ) | (2,687,884,787 | ) | (1,916,143 | ) | (1,982,551 | ) | (438,344 | ) | (1,156,434 | ) | ||||||||||||||||||||
Total Institutional Class | (1,161,907,841 | ) | (1,886,148,489 | ) | (1,378,163 | ) | (1,499,801 | ) | (1,548 | ) | (724,827 | ) | ||||||||||||||||||||
Change in net assets from capital transactions: | $ | (1,167,570,408 | ) | $ | (1,767,027,228 | ) | $ | (6,463,943 | ) | $ | 1,654,026 | $ | (5,758,382 | ) | $ | (3,804,938 | ) | |||||||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 103 |
Statements of Changes in Net Assets (concluded)
Aberdeen Emerging Markets Fund | Aberdeen Focused U.S. Equity Fund | Aberdeen Global Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Issued | 1,950,715 | 2,630,531 | 155,754 | 194,208 | 54,833 | 149,937 | ||||||||||||||||||||||||||
Reinvested | 92,430 | 94,006 | 51,018 | 48,663 | 58,392 | 176,298 | ||||||||||||||||||||||||||
Redeemed | (4,417,229 | ) | (4,865,349 | ) | (380,378 | ) | (216,054 | ) | (490,494 | ) | (407,919 | ) | ||||||||||||||||||||
Total Class A Shares | (2,374,084 | ) | (2,140,812 | ) | (173,606 | ) | 26,817 | (377,269 | ) | (81,684 | ) | |||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Issued | 107,678 | 256,048 | 58,896 | 1,707,451 | 742 | 11,119 | ||||||||||||||||||||||||||
Reinvested | 5,893 | 1,916 | 590,934 | 488,783 | 878 | 10,361 | ||||||||||||||||||||||||||
Redeemed | (435,106 | ) | (454,862 | ) | (2,637,390 | ) | (539,872 | ) | (38,162 | ) | (111,781 | ) | ||||||||||||||||||||
Total Class C Shares | (321,535 | ) | (196,898 | ) | (1,987,560 | ) | 1,656,362 | (36,542 | ) | (90,301 | ) | |||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Issued | 603,346 | 841,148 | 40,328 | 30,040 | 10,421 | 34,157 | ||||||||||||||||||||||||||
Reinvested | 96,302 | 72,349 | 19,240 | 20,973 | 2,159 | 9,851 | ||||||||||||||||||||||||||
Redeemed | (1,014,731 | ) | (661,717 | ) | (70,135 | ) | (74,218 | ) | (68,244 | ) | (91,318 | ) | ||||||||||||||||||||
Total Class R Shares | (315,083 | ) | 251,780 | (10,567 | ) | (23,205 | ) | (55,664 | ) | (47,310 | ) | |||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Issued | 18,091,619 | 13,126,790 | 344 | 10,326 | 400 | – | ||||||||||||||||||||||||||
Reinvested | 352,513 | 148,348 | 3,564 | 6,131 | 688 | 2,970 | ||||||||||||||||||||||||||
Redeemed | (16,305,879 | ) | (2,931,104 | ) | (24,322 | ) | (51,273 | ) | (2,735 | ) | (18,269 | ) | ||||||||||||||||||||
Total Institutional Service Class Shares | 2,138,253 | 10,344,034 | (20,414 | ) | (34,816 | ) | (1,647 | ) | (15,299 | ) | ||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Issued | 38,370,060 | 50,687,032 | 41,379 | 30,604 | 30,957 | 21,710 | ||||||||||||||||||||||||||
Reinvested | 3,955,435 | 4,520,359 | 23,913 | 40,205 | 3,482 | 14,706 | ||||||||||||||||||||||||||
Redeemed | (127,492,592 | ) | (185,587,668 | ) | (231,032 | ) | (273,008 | ) | (35,898 | ) | (93,234 | ) | ||||||||||||||||||||
Total Institutional Class Shares | (85,167,097 | ) | (130,380,277 | ) | (165,740 | ) | (202,199 | ) | (1,459 | ) | (56,818 | ) | ||||||||||||||||||||
Total change in shares: | (86,039,546 | ) | (122,122,173 | ) | (2,357,887 | ) | 1,422,959 | (472,581 | ) | (291,412 | ) | |||||||||||||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
104 | 2020 Annual Report |
Statements of Changes in Net Assets
Aberdeen Global Infrastructure Fund | Aberdeen International Equity Fund | Aberdeen International Real Estate Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
FROM INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income | $ | 2,420,686 | $ | 1,650,632 | $ | 694,787 | $ | 2,948,774 | $ | 706,225 | $ | 1,591,437 | ||||||||||||||||||||
Net realized gain/(loss) from investments and foreign currency transactions | (633,944 | ) | 2,590,904 | (735,983 | ) | 2,344,068 | 449,431 | (1,386,771 | ) | |||||||||||||||||||||||
Net change in unrealized appreciation/(depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | (9,646,398 | ) | 14,206,166 | 17,504,289 | 29,819,473 | (7,020,109 | ) | 17,631,629 | ||||||||||||||||||||||||
Changes in net assets resulting from operations | (7,859,656 | ) | 18,447,702 | 17,463,093 | 35,112,315 | (5,864,453 | ) | 17,836,295 | ||||||||||||||||||||||||
Distributions to Shareholders From: | ||||||||||||||||||||||||||||||||
Distributable earnings: | ||||||||||||||||||||||||||||||||
Class A | (378,080 | ) | (402,634 | ) | (234,561 | ) | (516,752 | ) | (19,990 | ) | (4,295 | ) | ||||||||||||||||||||
Class C | – | – | (2,997 | ) | (122,196 | ) | – | – | ||||||||||||||||||||||||
Class R | – | – | (27,395 | ) | (97,249 | ) | – | – | ||||||||||||||||||||||||
Institutional Service Class | – | – | (1,139,978 | ) | (2,167,942 | ) | – | – | ||||||||||||||||||||||||
Institutional Class | (2,878,797 | ) | (3,069,477 | ) | (1,343,116 | ) | (3,556,639 | ) | (6,392,314 | ) | (3,278,463 | ) | ||||||||||||||||||||
Tax return of capital: | ||||||||||||||||||||||||||||||||
Class A | (76,914 | ) | – | – | – | – | – | |||||||||||||||||||||||||
Class C | – | – | – | – | – | – | ||||||||||||||||||||||||||
Class R | – | – | – | – | – | – | ||||||||||||||||||||||||||
Institutional Service Class | – | – | – | – | – | – | ||||||||||||||||||||||||||
Institutional Class | (529,317 | ) | – | – | – | – | – | |||||||||||||||||||||||||
Change in net assets from shareholder distributions | (3,863,108 | ) | (3,472,111 | ) | (2,748,047 | ) | (6,460,778 | ) | (6,412,304 | ) | (3,282,758 | ) | ||||||||||||||||||||
Change in net assets from capital transactions | (46,649,052 | ) | (22,093,191 | ) | (15,793,228 | ) | (205,327,586 | ) | (23,819,904 | ) | (55,436,851 | ) | ||||||||||||||||||||
Change in net assets | (58,371,816 | ) | (7,117,600 | ) | (1,078,182 | ) | (176,676,049 | ) | (36,096,661 | ) | (40,883,314 | ) | ||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||||||||
Beginning of year | 100,217,276 | 107,334,876 | 218,451,391 | 395,127,440 | 56,687,686 | 97,571,000 | ||||||||||||||||||||||||||
End of year | $ | 41,845,460 | $ | 100,217,276 | $ | 217,373,209 | $ | 218,451,391 | $ | 20,591,025 | $ | 56,687,686 | ||||||||||||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 105 |
Statements of Changes in Net Assets (continued)
Aberdeen Global Infrastructure Fund | Aberdeen International Equity Fund | Aberdeen International Real Estate Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | 575,513 | $ | 1,063,944 | $ | 1,898,121 | $ | 7,733,975 | $ | 17,400 | $ | 17,932 | ||||||||||||||||||||
Dividends reinvested | 371,684 | 337,550 | 203,648 | 427,245 | 1,728 | 441 | ||||||||||||||||||||||||||
Cost of shares redeemed | (2,849,843 | ) | (2,812,260 | ) | (6,865,084 | ) | (10,862,911 | ) | (139,211 | ) | (2,229 | ) | ||||||||||||||||||||
Total Class A | (1,902,646 | ) | (1,410,766 | ) | (4,763,315 | ) | (2,701,691 | ) | (120,083 | ) | 16,144 | |||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | – | – | 140,962 | 110,330 | – | – | ||||||||||||||||||||||||||
Dividends reinvested | – | – | 2,522 | 107,651 | – | – | ||||||||||||||||||||||||||
Cost of shares redeemed | – | – | (2,249,490 | ) | (4,540,397 | ) | – | – | ||||||||||||||||||||||||
Total Class C | – | – | (2,106,006 | ) | (4,322,416 | ) | – | – | ||||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | – | – | 225,464 | 471,254 | – | – | ||||||||||||||||||||||||||
Dividends reinvested | – | – | 23,945 | 77,976 | – | – | ||||||||||||||||||||||||||
Cost of shares redeemed | – | – | (1,231,526 | ) | (2,018,567 | ) | – | – | ||||||||||||||||||||||||
Total Class R | – | – | (982,117 | ) | (1,469,337 | ) | – | – | ||||||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | – | – | 1,498,932 | 1,391,256 | – | – | ||||||||||||||||||||||||||
Dividends reinvested | – | – | 1,083,091 | 2,067,851 | – | – | ||||||||||||||||||||||||||
Cost of shares redeemed | – | – | (11,008,743 | ) | (11,137,055 | ) | – | – | ||||||||||||||||||||||||
Total Institutional Service Class | – | – | (8,426,720 | ) | (7,677,948 | ) | – | – | ||||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 3,078,861 | 3,976,855 | 9,234,936 | 11,714,632 | 220,196 | 230,203 | ||||||||||||||||||||||||||
Dividends reinvested | 1,682,504 | 1,468,113 | 1,336,975 | 3,545,019 | 3,228,360 | 959,011 | ||||||||||||||||||||||||||
Cost of shares redeemed | (49,507,771 | ) | (26,127,393 | ) | (10,086,981 | ) | (204,415,845 | ) | (27,148,377 | ) | (56,642,209 | ) | ||||||||||||||||||||
Total Institutional Class | (44,746,406 | ) | (20,682,425 | ) | 484,930 | (189,156,194 | ) | (23,699,821 | ) | (55,452,995 | ) | |||||||||||||||||||||
Change in net assets from capital transactions: | $ | (46,649,052 | ) | $ | (22,093,191 | ) | $ | (15,793,228 | ) | $ | (205,327,586 | ) | $ | (23,819,904 | ) | $ | (55,436,851 | ) | ||||||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
106 | 2020 Annual Report |
Statements of Changes in Net Assets (concluded)
Aberdeen Global Infrastructure Fund | Aberdeen International Equity Fund | Aberdeen International Real Estate Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Issued | 27,759 | 51,912 | 127,940 | 564,785 | 944 | 812 | ||||||||||||||||||||||||||
Reinvested | 18,598 | 16,576 | 13,284 | 34,098 | 81 | 23 | ||||||||||||||||||||||||||
Redeemed | (145,137 | ) | (140,193 | ) | (463,845 | ) | (794,199 | ) | (7,307 | ) | (107 | ) | ||||||||||||||||||||
Total Class A Shares | (98,780 | ) | (71,705 | ) | (322,621 | ) | (195,316 | ) | (6,282 | ) | 728 | |||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Issued | – | – | 9,880 | 8,567 | – | – | ||||||||||||||||||||||||||
Reinvested | – | – | 174 | 9,123 | – | – | ||||||||||||||||||||||||||
Redeemed | – | – | (160,311 | ) | (352,073 | ) | – | – | ||||||||||||||||||||||||
Total Class C Shares | – | – | (150,257 | ) | (334,383 | ) | – | – | ||||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Issued | – | – | 15,925 | 36,086 | – | – | ||||||||||||||||||||||||||
Reinvested | – | – | 1,638 | 6,525 | – | – | ||||||||||||||||||||||||||
Redeemed | – | – | (86,681 | ) | (155,380 | ) | – | – | ||||||||||||||||||||||||
Total Class R Shares | – | – | (69,118 | ) | (112,769 | ) | – | – | ||||||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Issued | – | – | 100,099 | 99,555 | – | – | ||||||||||||||||||||||||||
Reinvested | – | – | 69,340 | 162,057 | – | – | ||||||||||||||||||||||||||
Redeemed | – | – | (729,057 | ) | (786,836 | ) | – | – | ||||||||||||||||||||||||
Total Institutional Service Class Shares | – | – | (559,618 | ) | (525,224 | ) | – | – | ||||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Issued | 149,493 | 191,568 | 607,377 | 831,207 | 11,184 | 10,713 | ||||||||||||||||||||||||||
Reinvested | 84,247 | 71,852 | 85,266 | 276,955 | 149,877 | 49,306 | ||||||||||||||||||||||||||
Redeemed | (2,500,768 | ) | (1,325,331 | ) | (663,191 | ) | (14,476,213 | ) | (1,382,002 | ) | (2,524,599 | ) | ||||||||||||||||||||
Total Institutional Class Shares | (2,267,028 | ) | (1,061,911 | ) | 29,452 | (13,368,051 | ) | (1,220,941 | ) | (2,464,580 | ) | |||||||||||||||||||||
Total change in shares: | (2,365,808 | ) | (1,133,616 | ) | (1,072,162 | ) | (14,535,743 | ) | (1,227,223 | ) | (2,463,852 | ) | ||||||||||||||||||||
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 107 |
Statements of Changes in Net Assets
Aberdeen International Small Cap Fund (a) | Aberdeen Realty Income & Growth Fund | Aberdeen U.S. Mid Cap Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
FROM INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income/(loss) | $ | (272,690 | ) | $ | 747,737 | $ | 1,203,062 | $ | 1,677,006 | $ | (5,129 | ) | $ | 2,119 | ||||||||||||||||||
Net realized gain/(loss) from investments and foreign currency transactions | (1,298,863 | ) | 4,867,429 | 7,265,239 | 10,901,067 | 178,397 | 97,916 | |||||||||||||||||||||||||
Net change in unrealized appreciation/(depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 16,867,212 | 5,035,236 | (21,294,723 | ) | 5,127,844 | 158,107 | 175,201 | |||||||||||||||||||||||||
Changes in net assets resulting from operations | 15,295,659 | 10,650,402 | (12,826,422 | ) | 17,705,917 | 331,375 | 275,236 | |||||||||||||||||||||||||
Distributions to Shareholders From: | ||||||||||||||||||||||||||||||||
Distributable earnings: | ||||||||||||||||||||||||||||||||
Class A | (4,124,107 | ) | (7,408,418 | ) | (356,849 | ) | (680,522 | ) | (5,949 | ) | (4,034 | ) | ||||||||||||||||||||
Class C | (37,679 | ) | (85,179 | ) | – | – | (875 | ) | (593 | ) | ||||||||||||||||||||||
Class R | (106,923 | ) | (311,714 | ) | – | – | (875 | ) | (598 | ) | ||||||||||||||||||||||
Institutional Service Class | (2,247 | ) | (5,780 | ) | – | – | (2,767 | ) | (1,941 | ) | ||||||||||||||||||||||
Institutional Class | (1,888,315 | ) | (1,394,265 | ) | (10,781,178 | ) | (26,989,265 | ) | (88,350 | ) | (61,772 | ) | ||||||||||||||||||||
Change in net assets from shareholder distributions | (6,159,271 | ) | (9,205,356 | ) | (11,138,027 | ) | (27,669,787 | ) | (98,816 | ) | (68,938 | ) | ||||||||||||||||||||
Change in net assets from capital transactions | 16,139,945 | 47,651,139 | (5,403,350 | ) | 2,213,119 | 136,913 | 79,380 | |||||||||||||||||||||||||
Change in net assets | 25,276,333 | 49,096,185 | (29,367,799 | ) | (7,750,751 | ) | 369,472 | 285,678 | ||||||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||||||||
Beginning of year | 113,817,365 | 64,721,180 | 77,573,146 | 85,323,897 | 1,799,318 | 1,513,640 | ||||||||||||||||||||||||||
End of year | $ | 139,093,698 | $ | 113,817,365 | $ | 48,205,347 | $ | 77,573,146 | $ | 2,168,790 | $ | 1,799,318 | ||||||||||||||||||||
(a) | Effective February 28, 2020, the Institutional Service Class had zero assets. On February 28, 2020, the Aberdeen International Small Cap Fund ceased offering Institutional Service Class Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
108 | 2020 Annual Report |
Statements of Changes in Net Assets (continued)
Aberdeen International Small Cap Fund (a) | Aberdeen Realty Income & Growth Fund | Aberdeen U.S. Mid Cap Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | 22,475,177 | $ | 27,276,922 | $ | 600,041 | $ | 823,710 | $ | 32,402 | $ | 2,042 | ||||||||||||||||||||
Dividends reinvested | 4,009,366 | 7,070,197 | 267,327 | 551,648 | 5,885 | 4,033 | ||||||||||||||||||||||||||
Cost of shares redeemed | (17,795,163 | ) | (8,400,839 | ) | (453,190 | ) | (544,121 | ) | (35 | ) | (35 | ) | ||||||||||||||||||||
Total Class A | 8,689,380 | 25,946,280 | 414,178 | 831,237 | 38,252 | 6,040 | ||||||||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 44,253 | 426,112 | – | – | – | – | ||||||||||||||||||||||||||
Dividends reinvested | 37,679 | 78,111 | – | – | 875 | 594 | ||||||||||||||||||||||||||
Cost of shares redeemed | (371,746 | ) | (248,855 | ) | – | – | – | – | ||||||||||||||||||||||||
Total Class C | (289,814 | ) | 255,368 | – | – | 875 | 594 | |||||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 756,991 | 573,222 | – | – | – | – | ||||||||||||||||||||||||||
Dividends reinvested | 104,980 | 250,947 | – | – | 875 | 599 | ||||||||||||||||||||||||||
Cost of shares redeemed | (1,322,375 | ) | (1,148,819 | ) | – | – | – | – | ||||||||||||||||||||||||
Total Class R | (460,404 | ) | (324,650 | ) | – | – | 875 | 599 | ||||||||||||||||||||||||
Institutional Service Class Shares | �� | |||||||||||||||||||||||||||||||
Proceeds from shares issued | 1,597 | 61,671 | – | – | – | 1,055 | ||||||||||||||||||||||||||
Dividends reinvested | 2,247 | 5,780 | – | – | 2,767 | 1,941 | ||||||||||||||||||||||||||
Cost of shares redeemed | (41,337 | ) | (66,053 | ) | – | – | (30 | ) | (1,113 | ) | ||||||||||||||||||||||
Total Institutional Service Class | (37,493 | ) | 1,398 | – | – | 2,737 | 1,883 | |||||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Proceeds from shares issued | 22,918,036 | 29,632,138 | 1,740,144 | 4,795,392 | 32,964 | 15,279 | ||||||||||||||||||||||||||
Dividends reinvested | 1,887,586 | 1,366,383 | 10,093,031 | 20,651,575 | 88,350 | 61,769 | ||||||||||||||||||||||||||
Cost of shares redeemed | (16,567,346 | ) | (9,225,778 | ) | (17,650,703 | ) | (24,065,085 | ) | (27,140 | ) | (6,784 | ) | ||||||||||||||||||||
Total Institutional Class | 8,238,276 | 21,772,743 | (5,817,528 | ) | 1,381,882 | 94,174 | 70,264 | |||||||||||||||||||||||||
Change in net assets from capital transactions: | $ | 16,139,945 | $ | 47,651,139 | $ | (5,403,350 | ) | $ | 2,213,119 | $ | 136,913 | $ | 79,380 | |||||||||||||||||||
(a) | Effective February 28, 2020, the Institutional Service Class had zero assets. On February 28, 2020, the Aberdeen International Small Cap Fund ceased offering Institutional Service Class Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 109 |
Statements of Changes in Net Assets (concluded)
Aberdeen International Small Cap Fund (a) | Aberdeen Realty Income & Growth Fund | Aberdeen U.S. Mid Cap Equity Fund | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Issued | 853,368 | 1,016,646 | 44,651 | 45,786 | 2,124 | 156 | ||||||||||||||||||||||||||
Reinvested | 143,243 | 297,943 | 18,007 | 37,999 | 433 | 378 | ||||||||||||||||||||||||||
Redeemed | (690,453 | ) | (310,151 | ) | (34,005 | ) | (35,469 | ) | (3 | ) | (3 | ) | ||||||||||||||||||||
Total Class A Shares | 306,158 | 1,004,438 | 28,653 | 48,316 | 2,554 | 531 | ||||||||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Issued | 1,695 | 17,766 | – | – | – | – | ||||||||||||||||||||||||||
Reinvested | 1,488 | 3,618 | – | – | 66 | 57 | ||||||||||||||||||||||||||
Redeemed | (15,376 | ) | (9,913 | ) | – | – | – | – | ||||||||||||||||||||||||
Total Class C Shares | (12,193 | ) | 11,471 | – | – | 66 | 57 | |||||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Issued | 31,007 | 22,837 | – | – | – | – | ||||||||||||||||||||||||||
Reinvested | 3,989 | 11,208 | – | – | 65 | 57 | ||||||||||||||||||||||||||
Redeemed | (50,260 | ) | (43,751 | ) | – | – | – | – | ||||||||||||||||||||||||
Total Class R Shares | (15,264 | ) | (9,706 | ) | – | – | 65 | 57 | ||||||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Issued | 56 | 2,451 | – | – | – | 85 | ||||||||||||||||||||||||||
Reinvested | 80 | 242 | – | – | 203 | 182 | ||||||||||||||||||||||||||
Redeemed | (1,607 | ) | (2,515 | ) | – | – | (2 | ) | (89 | ) | ||||||||||||||||||||||
Total Institutional Service Class Shares | (1,471 | ) | 178 | – | – | 201 | 178 | |||||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Issued | 859,355 | 1,101,070 | 122,029 | 291,703 | 2,311 | 1,266 | ||||||||||||||||||||||||||
Reinvested | 67,222 | 57,483 | 688,954 | 1,405,211 | 6,463 | 5,778 | ||||||||||||||||||||||||||
Redeemed | (648,619 | ) | (334,129 | ) | (1,267,890 | ) | (1,425,279 | ) | (1,745 | ) | (547 | ) | ||||||||||||||||||||
Total Institutional Class Shares | 277,958 | 824,424 | (456,907 | ) | 271,635 | 7,029 | 6,497 | |||||||||||||||||||||||||
Total change in shares: | 555,188 | 1,830,805 | (428,254 | ) | 319,951 | 9,915 | 7,320 | |||||||||||||||||||||||||
(a) | Effective February 28, 2020, the Institutional Service Class had zero assets. On February 28, 2020, the Aberdeen International Small Cap Fund ceased offering Institutional Service Class Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
110 | 2020 Annual Report |
Statements of Changes in Net Assets
Aberdeen U.S. Multi-Cap Equity Fund (a) | Aberdeen U.S. Small Cap Equity Fund | ||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | ||||||||
FROM INVESTMENT ACTIVITIES: | |||||||||||
Operations: | |||||||||||
Net investment income/(loss) | $ (627,102 | ) | $ 475,183 | $ (2,939,644 | ) | $ (951,143 | ) | ||||
Net realized gain from investments and foreign currency transactions | 48,986,120 | 35,959,845 | 60,922,317 | 82,945,620 | |||||||
Net change in unrealized appreciation/(depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 13,838,958 | 21,035,276 | (4,343,412 | ) | (18,861,916 | ) | |||||
Changes in net assets resulting from operations | 62,197,976 | 57,470,304 | 53,639,261 | 63,132,561 | |||||||
Distributions to Shareholders From: | |||||||||||
Distributable earnings: | |||||||||||
Class A | (24,589,062 | ) | (25,448,786 | ) | (11,473,361 | ) | (23,097,879 | ) | |||
Class C | (156,405 | ) | (355,773 | ) | (4,244,876 | ) | (9,134,079 | ) | |||
Class R | (1,083 | ) | (14,906 | ) | (421,143 | ) | (899,689 | ) | |||
Institutional Service Class | (10,744,381 | ) | (11,111,822 | ) | (2,799,098 | ) | (5,133,246 | ) | |||
Institutional Class | (818,661 | ) | (689,735 | ) | (42,054,120 | ) | (122,425,757 | ) | |||
Change in net assets from shareholder distributions | (36,309,592 | ) | (37,621,022 | ) | (60,992,598 | ) | (160,690,650 | ) | |||
Change in net assets from capital transactions | 1,017,750 | 2,012,837 | (119,902,008 | ) | (665,036,118 | ) | |||||
Change in net assets | 26,906,134 | 21,862,119 | (127,255,345 | ) | (762,594,207 | ) | |||||
Net Assets: | |||||||||||
Beginning of year | 371,807,826 | 349,945,707 | 860,623,185 | 1,623,217,392 | |||||||
End of year | $398,713,960 | $371,807,826 | $733,367,840 | $860,623,185 | |||||||
(a) Effective March 31, 2020, the Class R had zero assets. On April 7, 2020, the Aberdeen U.S. Multi-Cap Equity Fund ceased offering Class R Shares.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 111 |
Statements of Changes in Net Assets (continued)
Aberdeen U.S. Multi-Cap Equity Fund (a) | Aberdeen U.S. Small Cap Equity Fund | ||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | ||||||||
CAPITAL TRANSACTIONS: | |||||||||||
Class A Shares | |||||||||||
Proceeds from shares issued | $ 2,958,841 | $ 3,433,847 | $ 16,227,633 | $ 37,016,828 | |||||||
Dividends reinvested | 22,321,664 | 23,163,037 | 9,715,490 | 19,798,085 | |||||||
Cost of shares redeemed | (25,099,337 | ) | (25,284,220 | ) | (58,094,309 | ) | (109,265,486 | ) | |||
Total Class A | 181,168 | 1,312,664 | (32,151,186 | ) | (52,450,573 | ) | |||||
Class C Shares | |||||||||||
Proceeds from shares issued | 148,630 | 160,291 | 2,708,476 | 6,246,065 | |||||||
Dividends reinvested | 120,441 | 320,370 | 3,470,356 | 7,650,172 | |||||||
Cost of shares redeemed | (600,552 | ) | (1,921,244 | ) | (16,088,725 | ) | (34,869,006 | ) | |||
Total Class C | (331,481 | ) | (1,440,583 | ) | (9,909,893 | ) | (20,972,769 | ) | |||
Class R Shares | |||||||||||
Proceeds from shares issued | 1,786 | 19,223 | 803,669 | 3,610,280 | |||||||
Dividends reinvested | – | 33 | 276,258 | 294,972 | |||||||
Cost of shares redeemed | (13,850 | ) | (133,914 | ) | (2,713,095 | ) | (6,545,629 | ) | |||
Total Class R | (12,064 | ) | (114,658 | ) | (1,633,168 | ) | (2,640,377 | ) | |||
Institutional Service Class Shares | |||||||||||
Proceeds from shares issued | 674,167 | 510,397 | 7,326,377 | 10,168,189 | |||||||
Dividends reinvested | 10,474,284 | 10,854,492 | 2,719,643 | 5,033,420 | |||||||
Cost of shares redeemed | (11,541,725 | ) | (10,647,079 | ) | (19,150,853 | ) | (22,530,956 | ) | |||
Total Institutional Service Class | (393,274 | ) | 717,810 | (9,104,833 | ) | (7,329,347 | ) | ||||
Institutional Class Shares | |||||||||||
Proceeds from shares issued | 3,061,512 | 2,411,630 | 167,070,278 | 234,314,105 | |||||||
Dividends reinvested | 796,937 | 663,657 | 35,496,582 | 112,746,347 | |||||||
Cost of shares redeemed | (2,285,048 | ) | (1,537,683 | ) | (269,669,788 | ) | (928,703,504 | ) | |||
Total Institutional Class | 1,573,401 | 1,537,604 | (67,102,928 | ) | (581,643,052 | ) | |||||
Change in net assets from capital transactions: | $ 1,017,750 | $ 2,012,837 | $ (119,902,008 | ) | $ (665,036,118 | ) | |||||
(a) | Effective March 31, 2020, the Class R had zero assets. On April 7, 2020, the Aberdeen U.S. Multi-Cap Equity Fund ceased offering Class R Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
112 | 2020 Annual Report |
Statements of Changes in Net Assets (concluded)
Aberdeen U.S. Multi-Cap Equity Fund (a) | Aberdeen U.S. Small Cap Equity Fund | ||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | ||||||||
SHARE TRANSACTIONS: | |||||||||||
Class A Shares | |||||||||||
Issued | 230,734 | 296,963 | 507,911 | 1,185,490 | |||||||
Reinvested | 1,777,203 | 2,316,304 | 301,069 | 726,002 | |||||||
Redeemed | (1,950,163 | ) | (2,116,338 | ) | (1,895,512 | ) | (3,460,127 | ) | |||
Total Class A Shares | 57,774 | 496,929 | (1,086,532 | ) | (1,548,635 | ) | |||||
Class C Shares | |||||||||||
Issued | 13,302 | 16,555 | 104,097 | 242,780 | |||||||
Reinvested | 11,570 | 37,691 | 130,563 | 333,051 | |||||||
Redeemed | (54,864 | ) | (196,254 | ) | (643,327 | ) | (1,321,076 | ) | |||
Total Class C Shares | (29,992 | ) | (142,008 | ) | (408,667 | ) | (745,245 | ) | |||
Class R Shares | |||||||||||
Issued | 154 | 2,006 | 28,406 | 134,105 | |||||||
Reinvested | – | 4 | 9,503 | 11,875 | |||||||
Redeemed | (1,329 | ) | (11,747 | ) | (94,848 | ) | (229,318 | ) | |||
Total Class R Shares | (1,175 | ) | (9,737 | ) | (56,939 | ) | (83,338 | ) | |||
Institutional Service Class Shares | |||||||||||
Issued | 50,790 | 40,414 | 230,034 | 299,939 | |||||||
Reinvested | 774,153 | 1,015,387 | 78,557 | 173,447 | |||||||
Redeemed | (845,170 | ) | (848,426 | ) | (576,967 | ) | (671,930 | ) | |||
Total Institutional Service Class Shares | (20,227 | ) | 207,375 | (268,376 | ) | (198,544 | ) | ||||
Institutional Class Shares | |||||||||||
Issued | 210,706 | 185,676 | 5,167,805 | 7,120,397 | |||||||
Reinvested | 58,641 | 61,851 | 1,025,616 | 3,886,465 | |||||||
Redeemed | (169,900 | ) | (121,735 | ) | (8,464,657 | ) | (27,674,250 | ) | |||
Total Institutional Class Shares | 99,447 | 125,792 | (2,271,236 | ) | (16,667,388 | ) | |||||
Total change in shares: | 105,827 | 678,351 | (4,091,750 | ) | (19,243,150 | ) | |||||
(a) | Effective March 31, 2020, the Class R had zero assets. On April 7, 2020, the Aberdeen U.S. Multi-Cap Equity Fund ceased offering Class R Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 113 |
Financial Highlights
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Asia-Pacific (ex-Japan) Equity Fund
Investment Activities | Distributions | ||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | |||||||||||||||
Class A Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | $13.84 | $0.04 | $ 1.95 | $ 1.99 | $ (0.16 | ) | $ (0.16 | ) | $15.67 | ||||||||||||
Year Ended October 31, 2019 | 11.63 | 0.12 | 2.20 | 2.32 | (0.11 | ) | (0.11 | ) | 13.84 | ||||||||||||
Year Ended October 31, 2018 | 13.41 | 0.11 | (1.72 | ) | (1.61 | ) | (0.17 | ) | (0.17 | ) | 11.63 | ||||||||||
Year Ended October 31, 2017 | 10.49 | 0.12 | 2.80 | 2.92 | – | – | 13.41 | ||||||||||||||
Year Ended October 31, 2016 | 10.04 | 0.18 | (f) | 0.48 | 0.66 | (0.21 | ) | (0.21 | ) | 10.49 | |||||||||||
Class R Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | 13.75 | 0.02 | 1.92 | 1.94 | (0.14 | ) | (0.14 | ) | 15.55 | ||||||||||||
Year Ended October 31, 2019 | 11.56 | 0.11 | 2.17 | 2.28 | (0.09 | ) | (0.09 | ) | 13.75 | ||||||||||||
Year Ended October 31, 2018 | 13.33 | 0.08 | (1.70 | ) | (1.62 | ) | (0.15 | ) | (0.15 | ) | 11.56 | ||||||||||
Year Ended October 31, 2017 | 10.45 | 0.09 | 2.79 | 2.88 | – | – | 13.33 | ||||||||||||||
Year Ended October 31, 2016 | 10.02 | 0.16 | (f) | 0.48 | 0.64 | (0.21 | ) | (0.21 | ) | 10.45 | |||||||||||
Institutional Service Class Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | 13.92 | 0.07 | 1.95 | 2.02 | (0.19 | ) | (0.19 | ) | 15.75 | ||||||||||||
Year Ended October 31, 2019 | 11.70 | 0.16 | 2.21 | 2.37 | (0.15 | ) | (0.15 | ) | 13.92 | ||||||||||||
Year Ended October 31, 2018 | 13.48 | 0.13 | (1.72 | ) | (1.59 | ) | (0.19 | ) | (0.19 | ) | 11.70 | ||||||||||
Year Ended October 31, 2017 | 10.53 | 0.07 | 2.88 | 2.95 | – | – | 13.48 | ||||||||||||||
Year Ended October 31, 2016 | 10.06 | 0.21 | (f) | 0.47 | 0.68 | (0.21 | ) | (0.21 | ) | 10.53 | |||||||||||
Institutional Class Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | 13.97 | 0.08 | 1.96 | 2.04 | (0.18 | ) | (0.18 | ) | 15.83 | ||||||||||||
Year Ended October 31, 2019 | 11.73 | 0.16 | 2.22 | 2.38 | (0.14 | ) | (0.14 | ) | 13.97 | ||||||||||||
Year Ended October 31, 2018 | 13.50 | 0.14 | (1.72 | ) | (1.58 | ) | (0.19 | ) | (0.19 | ) | 11.73 | ||||||||||
Year Ended October 31, 2017 | 10.53 | 0.13 | 2.84 | 2.97 | – | – | 13.50 | ||||||||||||||
Year Ended October 31, 2016 | 10.07 | 0.05 | (f) | 0.62 | 0.67 | (0.21 | ) | (0.21 | ) | 10.53 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(d) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
114 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Asia-Pacific (ex-Japan) Equity Fund (concluded)
Ratios/Supplemental Data | |||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover (d) | ||||||||
14.49 | % | $ 785 | 1.54%(e) | 4.73%(e) | 0.29 | % | 29.67% | ||||||
20.15 | % | 798 | 1.55%(e) | 4.15%(e) | 0.96 | % | 16.38% | ||||||
(12.16 | %) | 853 | 1.55%(e) | 3.15%(e) | 0.83 | % | 69.85% | ||||||
27.84 | % | 1,041 | 1.55%(e) | 3.46%(e) | 1.01 | % | 20.14% | ||||||
6.86 | %(f) | 748 | 1.54%(e) | 1.70%(e) | 1.88 | %(f) | 39.84% | ||||||
14.22 | % | 16 | 1.75%(e) | 4.94%(e) | 0.14 | % | 29.67% | ||||||
19.87 | % | 14 | 1.75%(e) | 4.35%(e) | 0.82 | % | 16.38% | ||||||
(12.31 | %) | 12 | 1.76%(e) | 3.36%(e) | 0.58 | % | 69.85% | ||||||
27.56 | % | 13 | 1.76%(e) | 3.67%(e) | 0.81 | % | 20.14% | ||||||
6.63 | %(f) | 10 | 1.76%(e) | 1.92%(e) | 1.68 | %(f) | 39.84% | ||||||
14.66 | % | 1,877 | 1.35%(e) | 4.54%(e) | 0.51 | % | 29.67% | ||||||
20.43 | % | 1,768 | 1.35%(e) | 3.95%(e) | 1.20 | % | 16.38% | ||||||
(11.99 | %) | 1,610 | 1.34%(e) | 2.94%(e) | 0.96 | % | 69.85% | ||||||
28.02 | % | 2,036 | 1.33%(e) | 3.24%(e) | 0.65 | % | 20.14% | ||||||
7.08 | %(f) | 4,291 | 1.28%(e) | 1.44%(e) | 2.14 | %(f) | 39.84% | ||||||
14.75 | % | 3,427 | 1.25%(e) | 4.57%(e) | 0.59 | % | 29.67% | ||||||
20.54 | % | 3,916 | 1.25%(e) | 3.97%(e) | 1.24 | % | 16.38% | ||||||
(11.88 | %) | 5,223 | 1.26%(e) | 2.95%(e) | 1.02 | % | 69.85% | ||||||
28.21 | % | 7,939 | 1.26%(e) | 3.24%(e) | 1.15 | % | 20.14% | ||||||
6.97 | %(f) | 9,558 | 1.26%(e) | 1.43%(e) | 0.57 | %(f) | 39.84% |
(e) | Includes interest expense that amounts to less than 0.01% for Class A, Class R, Institutional Service Class and Institutional Class for the years ended October 31, 2020 and October 31, 2016. Includes interest expense that amounts to 0.01% for Class A, Class R, Institutional Service Class and Institutional Class for the years ended October 31, 2019, October 31, 2018 and October 31, 2017. |
(f) | Included within Net Investment Income per share, Total Return and Ratio of Net Investment Income to Average Net Assets are the effects of a one-time reimbursement for overbilling of prior years' custodian out-of-pocket fees. If such amounts were excluded, Net Investment Income per share would be reduced by $0.02, $0.01, $0.02 and $0.02, Total Return would be reduced by 0.21%, 0.10%, 0.20% and 0.20% and Ratio of Net Investment Income to Average Net Assets would be reduced by 0.14%, 0.16%, 0.16% and 0.02% for Class A, Class R, Institutional Service Class and Institutional Class, respectively. |
2020 Annual Report 115
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen China A Share Equity Fund
Investment Activities | Distributions | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | |||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | $25.61 | $ 0.08 | $ 9.29 | $ 9.37 | $ – | (e) | $(1.08 | ) | $ (1.08 | ) | $33.90 | |||||||||||||
Year Ended October 31, 2019 | 19.86 | 0.07 | 5.72 | 5.79 | (0.04 | ) | – | (0.04 | ) | 25.61 | ||||||||||||||
Year Ended October 31, 2018 | 22.48 | 0.06 | (2.45 | ) | (2.39 | ) | (0.23 | ) | – | (0.23 | ) | 19.86 | ||||||||||||
Year Ended October 31, 2017 | 18.46 | 0.20 | 4.02 | 4.22 | (0.20 | ) | – | (0.20 | ) | 22.48 | ||||||||||||||
Year Ended October 31, 2016 | 17.94 | 0.19 | 0.33 | 0.52 | – | – | – | 18.46 | ||||||||||||||||
Class C Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 24.52 | (0.09 | ) | 8.83 | 8.74 | – | (1.08 | ) | (1.08 | ) | 32.18 | |||||||||||||
Year Ended October 31, 2019 | 19.12 | (0.21 | ) | 5.61 | 5.40 | – | – | – | 24.52 | |||||||||||||||
Year Ended October 31, 2018 | 21.59 | (0.09 | ) | (2.35 | ) | (2.44 | ) | (0.03 | ) | – | (0.03 | ) | 19.12 | |||||||||||
Year Ended October 31, 2017 | 17.64 | 0.03 | 3.92 | 3.95 | – | – | – | 21.59 | ||||||||||||||||
Year Ended October 31, 2016 | 17.26 | 0.06 | 0.32 | 0.38 | – | – | – | 17.64 | ||||||||||||||||
Class R Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 25.08 | (0.06 | ) | 9.13 | 9.07 | – | (1.08 | ) | (1.08 | ) | 33.07 | |||||||||||||
Year Ended October 31, 2019 | 19.48 | 0.02 | 5.58 | 5.60 | – | – | – | 25.08 | ||||||||||||||||
Year Ended October 31, 2018 | 22.07 | 0.04 | (2.46 | ) | (2.42 | ) | (0.17 | ) | – | (0.17 | ) | 19.48 | ||||||||||||
Year Ended October 31, 2017 | 18.13 | 0.15 | 3.94 | 4.09 | (0.15 | ) | – | (0.15 | ) | 22.07 | ||||||||||||||
Year Ended October 31, 2016 | 17.68 | 0.16 | 0.29 | 0.45 | – | – | – | 18.13 | ||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 25.75 | 0.15 | 9.34 | 9.49 | (0.05 | ) | (1.08 | ) | (1.13 | ) | 34.11 | |||||||||||||
Year Ended October 31, 2019 | 19.98 | 0.11 | 5.76 | 5.87 | (0.10 | ) | – | (0.10 | ) | 25.75 | ||||||||||||||
Year Ended October 31, 2018 | 22.62 | 0.11 | (2.46 | ) | (2.35 | ) | (0.29 | ) | – | (0.29 | ) | 19.98 | ||||||||||||
Year Ended October 31, 2017 | 18.55 | 0.22 | 4.08 | 4.30 | (0.23 | ) | – | (0.23 | ) | 22.62 | ||||||||||||||
Year Ended October 31, 2016 | 18.00 | 0.22 | 0.33 | 0.55 | – | – | – | 18.55 | ||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 25.85 | 0.05 | 9.51 | 9.56 | (0.07 | ) | (1.08 | ) | (1.15 | ) | 34.26 | |||||||||||||
Year Ended October 31, 2019 | 20.03 | 0.26 | 5.64 | 5.90 | (0.08 | ) | – | (0.08 | ) | 25.85 | ||||||||||||||
Year Ended October 31, 2018 | 22.65 | 0.05 | (2.38 | ) | (2.33 | ) | (0.29 | ) | – | (0.29 | ) | 20.03 | ||||||||||||
Year Ended October 31, 2017 | 18.58 | 0.19 | 4.13 | 4.32 | (0.25 | ) | – | (0.25 | ) | 22.65 | ||||||||||||||
Year Ended October 31, 2016 | 18.00 | 0.26 | 0.32 | 0.58 | – | – | – | 18.58 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
116 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen China A Share Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover (d) | |||||||||||
38.06 | %(g) | $10,888 | 1.32 | %(f) | 2.55 | %(f) | 0.28 | % | 56.48 | % | ||||||
29.21 | % | 8,685 | 1.60 | %(f) | 3.19 | %(f) | 0.30 | % | 115.09 | % | ||||||
(10.76 | %) | 5,978 | 1.95 | %(f) | 3.01 | %(f) | 0.27 | % | 26.13 | % | ||||||
23.15 | % | 7,492 | 1.97 | %(f) | 3.04 | %(f) | 0.98 | % | 23.58 | % | ||||||
2.90 | % | 7,301 | 1.95 | %(f) | 2.84 | %(f) | 1.10 | % | 15.75 | % | ||||||
37.13 | % | 587 | 1.99 | %(f) | 3.37 | %(f) | (0.37 | %) | 56.48 | % | ||||||
28.24 | % | 839 | 2.38 | %(f) | 3.99 | %(f) | (0.96 | %) | 115.09 | % | ||||||
(11.32 | %) | 1,568 | 2.62 | %(f) | 3.81 | %(f) | (0.42 | %) | 26.13 | % | ||||||
22.39 | % | 2,437 | 2.62 | %(f) | 3.83 | %(f) | 0.14 | % | 23.58 | % | ||||||
2.20 | % | 3,609 | 2.62 | %(f) | 3.60 | %(f) | 0.37 | % | 15.75 | % | ||||||
37.63 | %(g) | 3,215 | 1.62 | %(f) | 2.85 | %(f) | (0.23 | %) | 56.48 | % | ||||||
28.75 | % | 2,682 | 1.92 | %(f) | 3.52 | %(f) | 0.07 | % | 115.09 | % | ||||||
(11.07 | %) | 1,664 | 2.27 | %(f) | 3.33 | %(f) | 0.18 | % | 26.13 | % | ||||||
22.77 | % | 1,851 | 2.31 | %(f) | 3.38 | %(f) | 0.74 | % | 23.58 | % | ||||||
2.55 | % | 1,378 | 2.28 | %(f) | 3.17 | %(f) | 0.95 | % | 15.75 | % | ||||||
38.37 | % | 639 | 1.09 | %(f) | 2.32 | %(f) | 0.55 | % | 56.48 | % | ||||||
29.52 | % | 543 | 1.40 | %(f) | 2.96 | %(f) | 0.45 | % | 115.09 | % | ||||||
(10.57 | %) | 532 | 1.72 | %(f) | 2.78 | %(f) | 0.49 | % | 26.13 | % | ||||||
23.54 | % | 620 | 1.71 | %(f) | 2.78 | %(f) | 1.12 | % | 23.58 | % | ||||||
3.06 | % | 735 | 1.79 | %(f) | 2.68 | %(f) | 1.29 | % | 15.75 | % | ||||||
38.55 | % | 4,919 | 0.99 | %(f) | 2.34 | %(f) | 0.20 | % | 56.48 | % | ||||||
29.59 | % | 1,336 | 1.16 | %(f) | 2.97 | %(f) | 1.09 | % | 115.09 | % | ||||||
(10.46 | %) | 299 | 1.62 | %(f) | 2.78 | %(f) | 0.21 | % | 26.13 | % | ||||||
23.62 | % | 927 | 1.62 | %(f) | 2.78 | %(f) | 0.94 | % | 23.58 | % | ||||||
3.22 | % | 1,575 | 1.62 | %(f) | 2.56 | %(f) | 1.47 | % | 15.75 | % |
(d) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(e) | Less than $0.005 per share. |
(f) | Includes interest expense that amounts to less than 0.01% |
(g) | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
2020 Annual Report 117
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Dynamic Dividend Fund
Investment Activities | Distributions | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Tax Return of Capital | Total Distributions | Redemption Fees | Net Asset Value, End of Period | |||||||||||||||||||
Class A Shares | |||||||||||||||||||||||||||
Year Ended October 31, 2020 | $3.99 | $0.20 | (d) | $(0.28 | ) | $(0.08 | ) | $(0.23 | ) | $ – | $(0.23 | ) | $ – | $3.68 | |||||||||||||
Year Ended October 31, 2019 | 3.85 | 0.23 | (d) | 0.14 | 0.37 | (0.23 | ) | – | (0.23 | ) | – | 3.99 | |||||||||||||||
Year Ended October 31, 2018(f) | 4.04 | 0.17 | (d) | (0.13 | ) | 0.04 | (0.23 | ) | 0.00 | (g) | (0.23 | ) | 0.00 | (g) | 3.85 | ||||||||||||
Year Ended October 31, 2017 | 3.49 | 0.22 | 0.56 | 0.78 | (0.22 | ) | (0.01 | ) | (0.23 | ) | 0.00 | (g) | 4.04 | ||||||||||||||
Year Ended October 31, 2016 | 3.73 | 0.18 | (0.19 | ) | (0.01 | ) | (0.21 | ) | (0.02 | ) | (0.23 | ) | 0.00 | (g) | 3.49 | ||||||||||||
Institutional Class Shares | |||||||||||||||||||||||||||
Year Ended October 31, 2020 | 4.00 | 0.21 | (d) | (0.28 | ) | (0.07 | ) | (0.24 | ) | – | (0.24 | ) | – | 3.69 | |||||||||||||
Year Ended October 31, 2019 | 3.85 | 0.24 | (d) | 0.15 | 0.39 | (0.24 | ) | – | (0.24 | ) | – | 4.00 | |||||||||||||||
Year Ended October 31, 2018(f) | 4.04 | 0.18 | (d) | (0.13 | ) | 0.05 | (0.24 | ) | 0.00 | (g) | (0.24 | ) | 0.00 | (g) | 3.85 | ||||||||||||
Year Ended October 31, 2017 | 3.49 | 0.22 | 0.57 | 0.79 | (0.23 | ) | (0.01 | ) | (0.24 | ) | 0.00 | (g) | 4.04 | ||||||||||||||
Year Ended October 31, 2016 | 3.73 | 0.21 | (0.21 | ) | 0.00 | (0.22 | ) | (0.02 | ) | (0.24 | ) | 0.00 | (g) | 3.49 |
(a) | Excludes sales charge. |
(b) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(c) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(d) | Net investment income/(loss) is based on average shares outstanding during the period. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
118 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Dynamic Dividend Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (a) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (b) | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover (c) | |||||||||||
(2.04 | %)(e) | $ 3,885 | 1.50 | % | 1.60 | % | 5.20 | % | 85.01 | % | ||||||
10.02 | %(e) | 4,399 | 1.50 | % | 1.61 | % | 6.00 | % | 105.70 | % | ||||||
0.79 | % | 4,505 | 1.52 | %(h) | 1.60 | %(h) | 4.17 | % | 66.16 | % | ||||||
22.92 | % | 3,379 | 1.54 | %(h) | 1.58 | %(h) | 6.14 | % | 82.00 | % | ||||||
(0.06 | %) | 3,865 | 1.55 | %(h) | 1.56 | %(h) | 5.02 | % | 88.00 | % | ||||||
(1.77 | %) | 100,350 | 1.25 | % | 1.35 | % | 5.37 | % | 85.01 | % | ||||||
10.60 | % | 122,197 | 1.25 | % | 1.33 | % | 6.21 | % | 105.70 | % | ||||||
1.02 | % | 135,262 | 1.28 | %(h) | 1.35 | %(h) | 4.44 | % | 66.16 | % | ||||||
23.22 | % | 160,696 | 1.29 | %(h) | 1.33 | %(h) | 5.95 | % | 82.00 | % | ||||||
0.18 | % | 151,200 | 1.30 | %(h) | 1.31 | %(h) | 6.13 | % | 88.00 | % |
(e) | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
(f) | Beginning with the year ended October 31, 2018, the Fund has been audited by KPMG LLP. Previous years were audited by different independent registered public accounting firms. |
(g) | Less than $0.005 per share. |
(h) | Includes interest expense that amounts to 0.03%, 0.04%, and 0.01% for Class A and Institutional Class for the years ended October 31, 2018, October 31, 2017 and October 31, 2016, respectively. |
2020 Annual Report 119
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Emerging Markets Fund
Investment Activities | Distributions | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | |||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | $15.30 | $ 0.01 | $ 1.71 | $ 1.72 | $(0.22 | ) | $(0.01 | ) | $(0.23 | ) | $16.79 | |||||||||||||
Year Ended October 31, 2019 | 13.12 | 0.07 | 2.26 | 2.33 | (0.13 | ) | (0.02 | ) | (0.15 | ) | 15.30 | |||||||||||||
Year Ended October 31, 2018 | 15.74 | 0.07 | (2.53 | ) | (2.46 | ) | (0.16 | ) | – | (0.16 | ) | 13.12 | ||||||||||||
Year Ended October 31, 2017 | 13.53 | 0.10 | 2.22 | 2.32 | (0.11 | ) | – | (0.11 | ) | 15.74 | ||||||||||||||
Year Ended October 31, 2016 | 12.22 | 0.11 | 1.33 | 1.44 | – | (f) | (0.13 | ) | (0.13 | ) | 13.53 | |||||||||||||
Class C Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 15.18 | (0.06 | ) | 1.69 | 1.63 | (0.12 | ) | (0.01 | ) | (0.13 | ) | 16.68 | ||||||||||||
Year Ended October 31, 2019 | 12.97 | – | (f) | 2.24 | 2.24 | (0.01 | ) | (0.02 | ) | (0.03 | ) | 15.18 | ||||||||||||
Year Ended October 31, 2018 | 15.55 | – | (f) | (2.51 | ) | (2.51 | ) | (0.07 | ) | – | (0.07 | ) | 12.97 | |||||||||||
Year Ended October 31, 2017 | 13.35 | 0.02 | 2.21 | 2.23 | (0.03 | ) | – | (0.03 | ) | 15.55 | ||||||||||||||
Year Ended October 31, 2016 | 12.14 | 0.03 | 1.31 | 1.34 | – | (0.13 | ) | (0.13 | ) | 13.35 | ||||||||||||||
Class R Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 15.14 | – | (f) | 1.68 | 1.68 | (0.21 | ) | (0.01 | ) | (0.22 | ) | 16.60 | ||||||||||||
Year Ended October 31, 2019 | 13.00 | 0.07 | 2.21 | 2.28 | (0.12 | ) | (0.02 | ) | (0.14 | ) | 15.14 | |||||||||||||
Year Ended October 31, 2018 | 15.61 | 0.06 | (2.52 | ) | (2.46 | ) | (0.15 | ) | – | (0.15 | ) | 13.00 | ||||||||||||
Year Ended October 31, 2017 | 13.43 | 0.08 | 2.19 | 2.27 | (0.09 | ) | – | (0.09 | ) | 15.61 | ||||||||||||||
Year Ended October 31, 2016 | 12.17 | 0.08 | 1.31 | 1.39 | – | (0.13 | ) | (0.13 | ) | 13.43 | ||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 15.37 | 0.07 | 1.70 | 1.77 | (0.28 | ) | (0.01 | ) | (0.29 | ) | 16.85 | |||||||||||||
Year Ended October 31, 2019 | 13.19 | 0.23 | 2.16 | 2.39 | (0.19 | ) | (0.02 | ) | (0.21 | ) | 15.37 | |||||||||||||
Year Ended October 31, 2018 | 15.78 | 0.14 | (2.55 | ) | (2.41 | ) | (0.18 | ) | – | (0.18 | ) | 13.19 | ||||||||||||
Year Ended October 31, 2017 | 13.55 | 0.14 | 2.23 | 2.37 | (0.14 | ) | – | (0.14 | ) | 15.78 | ||||||||||||||
Year Ended October 31, 2016 | 12.22 | 0.14 | 1.33 | 1.47 | (0.01 | ) | (0.13 | ) | (0.14 | ) | 13.55 | |||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 15.39 | 0.09 | 1.72 | 1.81 | (0.29 | ) | (0.01 | ) | (0.30 | ) | 16.90 | |||||||||||||
Year Ended October 31, 2019 | 13.20 | 0.13 | 2.27 | 2.40 | (0.19 | ) | (0.02 | ) | (0.21 | ) | 15.39 | |||||||||||||
Year Ended October 31, 2018 | 15.81 | 0.15 | (2.55 | ) | (2.40 | ) | (0.21 | ) | – | (0.21 | ) | 13.20 | ||||||||||||
Year Ended October 31, 2017 | 13.58 | 0.17 | 2.22 | 2.39 | (0.16 | ) | – | (0.16 | ) | 15.81 | ||||||||||||||
Year Ended October 31, 2016 | 12.24 | 0.16 | 1.33 | 1.49 | (0.02 | ) | (0.13 | ) | (0.15 | ) | 13.58 |
(a) Net investment income/(loss) is based on average shares outstanding during the period.
(b) Excludes sales charge.
(c) During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
120 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Emerging Markets Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover (d) | |||||||||||
11.31 | % | $ 107,572 | 1.59 | %(e) | 1.59 | %(e) | 0.09 | % | 26.13 | % | ||||||
17.89 | % | 134,382 | 1.59 | %(e) | 1.59 | %(e) | 0.46 | % | 14.86 | % | ||||||
(15.80 | %) | 143,297 | 1.59 | %(e) | 1.59 | %(e) | 0.49 | % | 20.39 | % | ||||||
17.39 | % | 208,084 | 1.56 | % | 1.56 | % | 0.70 | % | 16.55 | % | ||||||
12.04 | % | 188,315 | 1.48 | %(e) | 1.49 | %(e) | 0.91 | % | 9.19 | % | ||||||
10.74 | % | 11,786 | 2.10 | %(e) | 2.19 | %(e) | (0.40 | %) | 26.13 | % | ||||||
17.26 | % | 15,611 | 2.10 | %(e) | 2.20 | %(e) | (0.03 | %) | 14.86 | % | ||||||
(16.20 | %) | 15,886 | 2.10 | %(e) | 2.21 | %(e) | –(g) | 20.39 | % | |||||||
16.75 | % | 28,618 | 2.10 | % | 2.28 | % | 0.16 | % | 16.55 | % | ||||||
11.26 | % | 25,054 | 2.10 | %(e) | 2.20 | %(e) | 0.28 | % | 9.19 | % | ||||||
11.13 | % | 113,707 | 1.73 | %(e) | 1.73 | %(e) | 0.01 | % | 26.13 | % | ||||||
17.72 | % | 108,487 | 1.75 | %(e) | 1.75 | %(e) | 0.48 | % | 14.86 | % | ||||||
(15.93 | %) | 89,874 | 1.75 | %(e) | 1.75 | %(e) | 0.40 | % | 20.39 | % | ||||||
17.13 | % | 79,767 | 1.78 | % | 1.78 | % | 0.55 | % | 16.55 | % | ||||||
11.65 | % | 47,410 | 1.77 | %(e) | 1.78 | %(e) | 0.69 | % | 9.19 | % | ||||||
11.64 | %(h) | 362,229 | 1.24 | %(e) | 1.24 | %(e) | 0.50 | % | 26.13 | % | ||||||
18.38 | %(h) | 297,466 | 1.24 | %(e) | 1.24 | %(e) | 1.55 | % | 14.86 | % | ||||||
(15.48 | %) | 118,917 | 1.16 | %(e) | 1.16 | %(e) | 0.89 | % | 20.39 | % | ||||||
17.75 | % | 205,880 | 1.28 | % | 1.28 | % | 0.96 | % | 16.55 | % | ||||||
12.25 | % | 333,964 | 1.28 | %(e) | 1.29 | %(e) | 1.13 | % | 9.19 | % | ||||||
11.86 | % | 3,414,059 | 1.10 | %(e) | 1.18 | %(e) | 0.59 | % | 26.13 | % | ||||||
18.45 | % | 4,420,838 | 1.10 | %(e) | 1.16 | %(e) | 0.91 | % | 14.86 | % | ||||||
(15.38 | %) | 5,511,182 | 1.10 | %(e) | 1.14 | %(e) | 1.00 | % | 20.39 | % | ||||||
17.89 | % | 8,179,870 | 1.10 | % | 1.13 | % | 1.17 | % | 16.55 | % | ||||||
12.41 | %(h) | 7,365,757 | 1.10 | %(e) | 1.14 | %(e) | 1.32 | % | 9.19 | % |
(e) Includes interest expense that amounts to less than 0.01%.
(f) Less than $0.005 per share.
(g) Amount is less than 0.005%.
(h) The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments.
2020 Annual Report 121
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Focused U.S. Equity Fund
Investment Activities | Distributions | ||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return (b) | |||||||||||||||||||
Class A Shares | |||||||||||||||||||||||||||
Year Ended October 31, 2020 | $ 7.59 | $(0.01 | ) | $ 0.96 | $ 0.95 | $ – | (g) | $(0.46 | ) | $(0.46 | ) | $8.08 | 12.88 | % | |||||||||||||
Year Ended October 31, 2019 | 6.85 | 0.01 | 1.09 | 1.10 | – | (0.36 | ) | (0.36 | ) | 7.59 | 17.62 | % | |||||||||||||||
Year Ended October 31, 2018 | 8.52 | 0.02 | 0.62 | 0.64 | – | (2.31 | ) | (2.31 | ) | 6.85 | 8.32 | % | |||||||||||||||
Year Ended October 31, 2017 | 8.81 | (0.12 | ) | 0.90 | 0.78 | – | (1.07 | ) | (1.07 | ) | 8.52 | 9.69 | % | ||||||||||||||
Year Ended October 31, 2016 | 10.30 | (0.15 | ) | (0.04 | ) | (0.19 | ) | – | (1.30 | ) | (1.30 | ) | 8.81 | (1.68 | %) | ||||||||||||
Class C Shares | |||||||||||||||||||||||||||
Year Ended October 31, 2020 | 2.08 | (0.02 | ) | 0.25 | 0.23 | (0.01 | ) | (0.46 | ) | (0.47 | ) | 1.84 | 11.83 | % | |||||||||||||
Year Ended October 31, 2019 | 2.17 | (0.01 | ) | 0.28 | 0.27 | – | (0.36 | ) | (0.36 | ) | 2.08 | 17.22 | % | ||||||||||||||
Year Ended October 31, 2018 | 4.22 | (0.01 | ) | 0.27 | 0.26 | – | (2.31 | ) | (2.31 | ) | 2.17 | 7.45 | % | ||||||||||||||
Year Ended October 31, 2017 | 4.92 | (0.09 | ) | 0.46 | 0.37 | – | (1.07 | ) | (1.07 | ) | 4.22 | 8.89 | % | ||||||||||||||
Year Ended October 31, 2016 | 6.38 | (0.12 | ) | (0.04 | ) | (0.16 | ) | – | (1.30 | ) | (1.30 | ) | 4.92 | (2.35 | %) | ||||||||||||
Class R Shares | |||||||||||||||||||||||||||
Year Ended October 31, 2020 | 6.73 | (0.03 | ) | 0.85 | 0.82 | – | (0.46 | ) | (0.46 | ) | 7.09 | 12.54 | % | ||||||||||||||
Year Ended October 31, 2019 | 6.13 | (0.01 | ) | 0.97 | 0.96 | – | (0.36 | ) | (0.36 | ) | 6.73 | 17.39 | % | ||||||||||||||
Year Ended October 31, 2018 | 7.88 | – | (g) | 0.56 | 0.56 | – | (2.31 | ) | (2.31 | ) | 6.13 | 7.89 | % | ||||||||||||||
Year Ended October 31, 2017 | 8.25 | (0.13 | ) | 0.83 | 0.70 | – | (1.07 | ) | (1.07 | ) | 7.88 | 9.35 | % | ||||||||||||||
Year Ended October 31, 2016 | 9.76 | (0.17 | ) | (0.04 | ) | (0.21 | ) | – | (1.30 | ) | (1.30 | ) | 8.25 | (2.01 | %) | ||||||||||||
Institutional Service Class Shares | |||||||||||||||||||||||||||
Year Ended October 31, 2020 | 7.92 | – | (g) | 1.00 | 1.00 | (0.01 | ) | (0.46 | ) | (0.47 | ) | 8.45 | 12.96 | % | |||||||||||||
Year Ended October 31, 2019 | 7.11 | 0.03 | 1.14 | 1.17 | – | (0.36 | ) | (0.36 | ) | 7.92 | 17.96 | % | |||||||||||||||
Year Ended October 31, 2018 | 8.75 | 0.04 | 0.63 | 0.67 | – | (2.31 | ) | (2.31 | ) | 7.11 | 8.50 | % | |||||||||||||||
Year Ended October 31, 2017 | 9.00 | (0.10 | ) | 0.92 | 0.82 | – | (1.07 | ) | (1.07 | ) | 8.75 | 9.96 | % | ||||||||||||||
Year Ended October 31, 2016 | 10.48 | (0.14 | ) | (0.04 | ) | (0.18 | ) | – | (1.30 | ) | (1.30 | ) | 9.00 | (1.54 | %) | ||||||||||||
Institutional Class Shares | |||||||||||||||||||||||||||
Year Ended October 31, 2020 | 8.20 | 0.01 | 1.04 | 1.05 | (0.01 | ) | (0.46 | ) | (0.47 | ) | 8.78 | 13.14 | % | ||||||||||||||
Year Ended October 31, 2019 | 7.34 | 0.04 | 1.18 | 1.22 | – | (0.36 | ) | (0.36 | ) | 8.20 | 18.10 | % | |||||||||||||||
Year Ended October 31, 2018 | 8.95 | 0.05 | 0.65 | 0.70 | – | (2.31 | ) | (2.31 | ) | 7.34 | 8.69 | % | |||||||||||||||
Year Ended October 31, 2017 | 9.17 | (0.10 | ) | 0.95 | 0.85 | – | (1.07 | ) | (1.07 | ) | 8.95 | 10.12 | % | ||||||||||||||
Year Ended October 31, 2016 | 10.64 | (0.13 | ) | (0.04 | ) | (0.17 | ) | – | (1.30 | ) | (1.30 | ) | 9.17 | (1.40 | %) |
(a) Net investment income/(loss) is based on average shares outstanding during the period.
(b) Excludes sales charge.
(c) During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated.
(d) Indicates the dividend expense charged for the period to average net assets.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
122 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Focused U.S. Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income (Loss) to Average Net Assets | Dividend Expense (d)(e) | Portfolio Turnover (f) | |||||||||||
$ 7,618 | 1.24 | %(h) | 2.13 | %(h) | (0.17 | %) | – | 45.98 | % | |||||||
8,481 | 1.25 | % | 2.09 | % | 0.20 | % | – | 54.04 | % | |||||||
7,466 | 1.32 | %(h) | 2.03 | %(h) | 0.34 | % | 0.04 | % | 112.97 | % | ||||||
9,479 | 2.80 | %(h) | 3.22 | %(h) | (1.39 | %) | 1.18 | % | 35.38 | % | ||||||
11,397 | 3.04 | % | 3.28 | % | (1.70 | %) | 1.45 | % | 36.34 | % | ||||||
528 | 1.90 | %(h) | 2.84 | %(h) | (0.85 | %) | – | 45.98 | % | |||||||
4,734 | 1.90 | % | 2.83 | % | (0.48 | %) | – | 54.04 | % | |||||||
1,345 | 1.97 | %(h) | 2.77 | %(h) | (0.32 | %) | 0.04 | % | 112.97 | % | ||||||
1,837 | 3.47 | %(h) | 4.09 | %(h) | (2.05 | %) | 1.21 | % | 35.38 | % | ||||||
3,430 | 3.69 | % | 4.02 | % | (2.33 | %) | 1.44 | % | 36.34 | % | ||||||
1,952 | 1.43 | %(h) | 2.32 | %(h) | (0.37 | %) | – | 45.98 | % | |||||||
1,924 | 1.55 | % | 2.39 | % | (0.09 | %) | – | 54.04 | % | |||||||
1,895 | 1.69 | %(h) | 2.40 | %(h) | (0.04 | %) | 0.04 | % | 112.97 | % | ||||||
2,269 | 3.14 | %(h) | 3.56 | %(h) | (1.72 | %) | 1.18 | % | 35.38 | % | ||||||
2,633 | 3.34 | % | 3.58 | % | (2.01 | %) | 1.44 | % | 36.34 | % | ||||||
340 | 1.04 | %(h) | 1.93 | %(h) | 0.02 | % | – | 45.98 | % | |||||||
480 | 1.05 | % | 1.89 | % | 0.45 | % | – | 54.04 | % | |||||||
679 | 1.07 | %(h) | 1.79 | %(h) | 0.55 | % | 0.04 | % | 112.97 | % | ||||||
840 | 2.62 | %(h) | 3.04 | %(h) | (1.21 | %) | 1.17 | % | 35.38 | % | ||||||
693 | 2.85 | % | 3.10 | % | (1.54 | %) | 1.43 | % | 36.34 | % | ||||||
3,451 | 0.90 | %(h) | 1.94 | %(h) | 0.17 | % | – | 45.98 | % | |||||||
4,580 | 0.90 | % | 1.89 | % | 0.58 | % | – | 54.04 | % | |||||||
5,583 | 0.98 | %(h) | 1.83 | %(h) | 0.63 | % | 0.06 | % | 112.97 | % | ||||||
12,413 | 2.56 | %(h) | 3.07 | %(h) | (1.13 | %) | 1.30 | % | 35.38 | % | ||||||
52,527 | 2.71 | % | 3.01 | % | (1.36 | %) | 1.46 | % | 36.34 | % |
(e) Dividend expense ratio includes broker related expenses for securities sold short.
(f) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares.
(g) Less than $0.005 per share.
(h) Includes interest expense that amounts to less than 0.01% for Class A, Class C, Class R, Institutional Service Class and Institutional Class for the years ended October 31, 2020 and October 31, 2018. Includes interest expense that amounts to 0.01% for Class A, Class C, Class R, Institutional Service Class and Institutional Class for the year ended October 31, 2017.
2020 Annual Report 123
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Global Equity Fund
Investment Activities | Distributions | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | |||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | $12.87 | $(0.01 | ) | $ 0.77 | $ 0.76 | $(0.08 | ) | $(0.34 | ) | $(0.42 | ) | $ 13.21 | ||||||||||||
Year Ended October 31, 2019 | 12.75 | 0.08 | 1.08 | 1.16 | (0.09 | ) | (0.95 | ) | (1.04 | ) | 12.87 | |||||||||||||
Year Ended October 31, 2018 | 14.66 | 0.09 | (0.72 | ) | (0.63 | ) | (0.10 | ) | (1.18 | ) | (1.28 | ) | 12.75 | |||||||||||
Year Ended October 31, 2017 | 12.35 | 0.10 | 2.30 | 2.40 | (0.09 | ) | – | (0.09 | ) | 14.66 | ||||||||||||||
Year Ended October 31, 2016 | 12.15 | 0.10 | 0.13 | 0.23 | (0.03 | ) | – | (0.03 | ) | 12.35 | ||||||||||||||
Class C Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 11.98 | (0.08 | ) | 0.71 | 0.63 | – | (0.34 | ) | (0.34 | ) | 12.27 | |||||||||||||
Year Ended October 31, 2019 | 11.93 | 0.01 | 0.99 | 1.00 | – | (0.95 | ) | (0.95 | ) | 11.98 | ||||||||||||||
Year Ended October 31, 2018 | 13.78 | – | (g) | (0.67 | ) | (0.67 | ) | – | (1.18 | ) | (1.18 | ) | 11.93 | |||||||||||
Year Ended October 31, 2017 | 11.65 | 0.01 | 2.18 | 2.19 | (0.06 | ) | – | (0.06 | ) | 13.78 | ||||||||||||||
Year Ended October 31, 2016 | 11.52 | 0.02 | 0.12 | 0.14 | (0.01 | ) | – | (0.01 | ) | 11.65 | ||||||||||||||
Class R Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 12.21 | (0.05 | ) | 0.73 | 0.68 | (0.01 | ) | (0.34 | ) | (0.35 | ) | 12.54 | ||||||||||||
Year Ended October 31, 2019 | 12.15 | 0.03 | 1.01 | 1.04 | (0.03 | ) | (0.95 | ) | (0.98 | ) | 12.21 | |||||||||||||
Year Ended October 31, 2018 | 14.04 | 0.03 | (0.68 | ) | (0.65 | ) | (0.06 | ) | (1.18 | ) | (1.24 | ) | 12.15 | |||||||||||
Year Ended October 31, 2017 | 11.88 | 0.04 | 2.22 | 2.26 | (0.10 | ) | – | (0.10 | ) | 14.04 | ||||||||||||||
Year Ended October 31, 2016 | 11.71 | 0.08 | 0.11 | 0.19 | (0.02 | ) | – | (0.02 | ) | 11.88 | ||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 13.05 | 0.02 | 0.80 | 0.82 | (0.12 | ) | (0.34 | ) | (0.46 | ) | 13.41 | |||||||||||||
Year Ended October 31, 2019 | 12.94 | 0.11 | 1.08 | 1.19 | (0.13 | ) | (0.95 | ) | (1.08 | ) | 13.05 | |||||||||||||
Year Ended October 31, 2018 | 14.87 | 0.13 | (0.73 | ) | (0.60 | ) | (0.15 | ) | (1.18 | ) | (1.33 | ) | 12.94 | |||||||||||
Year Ended October 31, 2017 | 12.53 | 0.13 | 2.34 | 2.47 | (0.13 | ) | – | (0.13 | ) | 14.87 | ||||||||||||||
Year Ended October 31, 2016 | 12.30 | 0.14 | 0.13 | 0.27 | (0.04 | ) | – | (0.04 | ) | 12.53 | ||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 12.88 | 0.03 | 0.79 | 0.82 | (0.12 | ) | (0.34 | ) | (0.46 | ) | 13.24 | |||||||||||||
Year Ended October 31, 2019 | 12.77 | 0.13 | 1.06 | 1.19 | (0.13 | ) | (0.95 | ) | (1.08 | ) | 12.88 | |||||||||||||
Year Ended October 31, 2018 | 14.69 | 0.14 | (0.73 | ) | (0.59 | ) | (0.15 | ) | (1.18 | ) | (1.33 | ) | 12.77 | |||||||||||
Year Ended October 31, 2017 | 12.40 | 0.16 | 2.26 | 2.42 | (0.13 | ) | – | (0.13 | ) | 14.69 | ||||||||||||||
Year Ended October 31, 2016 | 12.16 | 0.14 | 0.14 | 0.28 | (0.04 | ) | – | (0.04 | ) | 12.40 |
(a) Net investment income/(loss) is based on average shares outstanding during the period.
(b) Excludes sales charge.
(c) During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
124 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Global Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover (d) | |||||||||||
5.93 | %(f) | $22,455 | 1.53 | %(e) | 2.17 | %(e) | (0.06 | %) | 29.04 | % | ||||||
10.40 | %(f) | 26,719 | 1.53 | %(e) | 2.07 | %(e) | 0.66 | % | 32.68 | % | ||||||
(4.97 | %) | 27,530 | 1.53 | % | 1.92 | % | 0.67 | % | 22.06 | % | ||||||
19.58 | % | 34,296 | 1.56 | %(e) | 1.68 | %(e) | 0.71 | % | 24.98 | % | ||||||
1.93 | % | 48,350 | 1.56 | %(e) | 1.63 | %(e) | 0.82 | % | 21.59 | % | ||||||
5.24 | % | 205 | 2.19 | %(e) | 3.04 | %(e) | (0.68 | %) | 29.04 | % | ||||||
9.62 | % | 638 | 2.19 | %(e) | 2.95 | %(e) | 0.05 | % | 32.68 | % | ||||||
(5.53 | %) | 1,713 | 2.19 | % | 2.77 | % | 0.02 | % | 22.06 | % | ||||||
18.85 | % | 2,181 | 2.19 | %(e) | 2.51 | %(e) | 0.06 | % | 24.98 | % | ||||||
1.24 | % | 1,495 | 2.19 | %(e) | 2.36 | %(e) | 0.20 | % | 21.59 | % | ||||||
5.58 | % | 898 | 1.91 | %(e) | 2.55 | %(e) | (0.42 | %) | 29.04 | % | ||||||
9.83 | % | 1,554 | 1.94 | %(e) | 2.48 | %(e) | 0.26 | % | 32.68 | % | ||||||
(5.27 | %) | 2,120 | 1.94 | % | 2.33 | % | 0.26 | % | 22.06 | % | ||||||
19.15 | % | 3,107 | 1.90 | %(e) | 2.02 | %(e) | 0.31 | % | 24.98 | % | ||||||
1.64 | % | 1,348 | 1.84 | %(e) | 1.91 | %(e) | 0.66 | % | 21.59 | % | ||||||
6.25 | % | 250 | 1.29 | %(e) | 1.93 | %(e) | 0.18 | % | 29.04 | % | ||||||
10.56 | % | 265 | 1.29 | %(e) | 1.83 | %(e) | 0.88 | % | 32.68 | % | ||||||
(4.65 | %) | 460 | 1.26 | % | 1.65 | % | 0.94 | % | 22.06 | % | ||||||
19.97 | % | 570 | 1.29 | %(e) | 1.41 | %(e) | 0.94 | % | 24.98 | % | ||||||
2.26 | % | 1 | 1.19 | %(e) | 1.26 | %(e) | 1.17 | % | 21.59 | % | ||||||
6.39 | % | 1,409 | 1.19 | %(e) | 1.88 | %(e) | 0.27 | % | 29.04 | % | ||||||
10.71 | % | 1,390 | 1.19 | %(e) | 1.77 | %(e) | 1.01 | % | 32.68 | % | ||||||
(4.63 | %) | 2,104 | 1.19 | % | 1.62 | % | 1.01 | % | 22.06 | % | ||||||
19.75 | % | 2,699 | 1.19 | %(e) | 1.32 | %(e) | 1.21 | % | 24.98 | % | ||||||
2.36 | % | 36,167 | 1.19 | %(e) | 1.27 | %(e) | 1.19 | % | 21.59 | % |
(e) Includes interest expense that amounts to less than 0.01%.
(f) The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments.
(g) Less than $0.005 per share.
2020 Annual Report 125
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Global Infrastructure Fund
Investment Activities | Distributions | |||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Tax Return of Capital | Total Distributions | Redemption Fees | Net Asset Value, End of Period | |||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | $21.93 | $0.53 | (d) | $(2.59 | ) | $(2.06 | ) | $(0.56 | ) | $(0.14 | ) | $(0.14 | ) | $(0.84 | ) | $ – | $19.03 | |||||||||||||
Year Ended October 31, 2019 | 18.82 | 0.30 | (d) | 3.48 | 3.78 | (0.64 | ) | (0.03 | ) | – | (0.67 | ) | – | 21.93 | ||||||||||||||||
Year Ended October 31, 2018(e) | 20.65 | 0.46 | (d) | (1.54 | ) | (1.08 | ) | (0.71 | ) | (0.04 | ) | – | (0.75 | ) | 0.00 | (f) | 18.82 | |||||||||||||
Year Ended October 31, 2017 | 17.55 | 0.66 | 3.15 | 3.81 | (0.71 | ) | – | – | (0.71 | ) | 0.00 | (f) | 20.65 | |||||||||||||||||
Year Ended October 31, 2016 | 17.63 | 0.76 | (0.12 | ) | 0.64 | (0.72 | ) | – | – | (0.72 | ) | 0.00 | (f) | 17.55 | ||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 21.97 | 0.58 | (d) | (2.60 | ) | (2.02 | ) | (0.62 | ) | (0.14 | ) | (0.14 | ) | (0.90 | ) | – | 19.05 | |||||||||||||
Year Ended October 31, 2019 | 18.85 | 0.34 | (d) | 3.50 | 3.84 | (0.69 | ) | (0.03 | ) | – | (0.72 | ) | – | 21.97 | ||||||||||||||||
Year Ended October 31, 2018(e) | 20.68 | 0.54 | (d) | (1.57 | ) | (1.03 | ) | (0.76 | ) | (0.04 | ) | – | (0.80 | ) | 0.00 | (f) | 18.85 | |||||||||||||
Year Ended October 31, 2017 | 17.58 | 0.70 | 3.16 | 3.86 | (0.76 | ) | – | – | (0.76 | ) | 0.00 | (f) | 20.68 | |||||||||||||||||
Year Ended October 31, 2016 | 17.66 | 0.81 | (0.13 | ) | 0.68 | (0.76 | ) | – | – | (0.76 | ) | 0.00 | (f) | 17.58 |
(a) Excludes sales charge.
(b) During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares.
(d) Net investment income/(loss) is based on average shares outstanding during the period.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
126 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Global Infrastructure Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (a) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (b) | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover (c) | |||||||||||
(9.49 | %) | $ 9,206 | 1.33 | % | 1.55 | % | 2.61 | % | 23.76 | % | ||||||
20.41 | % | 12,776 | 1.45 | % | 1.59 | % | 1.46 | % | 31.62 | % | ||||||
(5.39 | %) | 12,310 | 1.45 | % | 1.58 | % | 2.29 | % | 48.54 | % | ||||||
22.13 | % | 20,132 | 1.46 | %(g) | 1.58 | %(g) | 3.48 | % | 77.00 | % | ||||||
3.75 | % | 16,105 | 1.46 | %(g) | 1.54 | %(g) | 4.34 | % | 58.00 | % | ||||||
(9.30 | %) | 32,640 | 1.08 | % | 1.27 | % | 2.90 | % | 23.76 | % | ||||||
20.73 | % | 87,441 | 1.20 | % | 1.31 | % | 1.68 | % | 31.62 | % | ||||||
(5.13 | %) | 95,025 | 1.20 | % | 1.32 | %(g) | 2.70 | % | 48.54 | % | ||||||
22.39 | % | 115,567 | 1.21 | %(g) | 1.33 | %(g) | 3.56 | % | 77.00 | % | ||||||
4.01 | % | 134,220 | 1.21 | %(g) | 1.29 | %(g) | 4.56 | % | 58.00 | % |
(e) Beginning with the year ended October 31, 2018, the Fund has been audited by KPMG LLP. Previous years were audited by different independent registered public accounting firms.
(f) Less than $0.005 per share.
(g) Includes interest expense that amounts to less than 0.01% for Class A and Institutional Class for the years ended October 31, 2017 and October 31, 2016.
2020 Annual Report 127
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen International Equity Fund
Investment Activities | Distributions | ||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | |||||||||||||||
Class A Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | $14.68 | $ – | (e) | $ 1.21 | $ 1.21 | $ (0.15 | ) | $ (0.15 | ) | $15.74 | |||||||||||
Year Ended October 31, 2019 | 13.28 | 0.12 | 1.57 | 1.69 | (0.29 | ) | (0.29 | ) | 14.68 | ||||||||||||
Year Ended October 31, 2018 | 15.04 | 0.15 | (1.78 | ) | (1.63 | ) | (0.13 | ) | (0.13 | ) | 13.28 | ||||||||||
Year Ended October 31, 2017 | 12.70 | 0.15 | 2.36 | 2.51 | (0.17 | ) | (0.17 | ) | 15.04 | ||||||||||||
Year Ended October 31, 2016 | 12.52 | 0.18 | 0.04 | 0.22 | (0.04 | ) | (0.04 | ) | 12.70 | ||||||||||||
Class C Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | 13.76 | (0.08 | ) | 1.12 | 1.04 | (0.01 | ) | (0.01 | ) | 14.79 | |||||||||||
Year Ended October 31, 2019 | 12.44 | 0.03 | 1.48 | 1.51 | (0.19 | ) | (0.19 | ) | 13.76 | ||||||||||||
Year Ended October 31, 2018 | 14.09 | 0.04 | (1.66 | ) | (1.62 | ) | (0.03 | ) | (0.03 | ) | 12.44 | ||||||||||
Year Ended October 31, 2017 | 11.89 | 0.04 | 2.23 | 2.27 | (0.07 | ) | (0.07 | ) | 14.09 | ||||||||||||
Year Ended October 31, 2016 | 11.79 | 0.08 | 0.03 | 0.11 | (0.01 | ) | (0.01 | ) | 11.89 | ||||||||||||
Class R Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | 13.97 | (0.03 | ) | 1.14 | 1.11 | (0.10 | ) | (0.10 | ) | 14.98 | |||||||||||
Year Ended October 31, 2019 | 12.65 | 0.08 | 1.50 | 1.58 | (0.26 | ) | (0.26 | ) | 13.97 | ||||||||||||
Year Ended October 31, 2018 | 14.33 | 0.10 | (1.68 | ) | (1.58 | ) | (0.10 | ) | (0.10 | ) | 12.65 | ||||||||||
Year Ended October 31, 2017 | 12.11 | 0.10 | 2.25 | 2.35 | (0.13 | ) | (0.13 | ) | 14.33 | ||||||||||||
Year Ended October 31, 2016 | 11.97 | 0.12 | 0.05 | 0.17 | (0.03 | ) | (0.03 | ) | 12.11 | ||||||||||||
Institutional Service Class Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | 15.00 | 0.06 | 1.22 | 1.28 | (0.20 | ) | (0.20 | ) | 16.08 | ||||||||||||
Year Ended October 31, 2019 | 13.58 | 0.17 | 1.60 | 1.77 | (0.35 | ) | (0.35 | ) | 15.00 | ||||||||||||
Year Ended October 31, 2018 | 15.37 | 0.20 | (1.80 | ) | (1.60 | ) | (0.19 | ) | (0.19 | ) | 13.58 | ||||||||||
Year Ended October 31, 2017 | 12.98 | 0.19 | 2.41 | 2.60 | (0.21 | ) | (0.21 | ) | 15.37 | ||||||||||||
Year Ended October 31, 2016 | 12.77 | 0.20 | 0.05 | 0.25 | (0.04 | ) | (0.04 | ) | 12.98 | ||||||||||||
Institutional Class Shares | |||||||||||||||||||||
Year Ended October 31, 2020 | 15.06 | 0.06 | 1.23 | 1.29 | (0.20 | ) | (0.20 | ) | 16.15 | ||||||||||||
Year Ended October 31, 2019 | 13.63 | 0.17 | 1.61 | 1.78 | (0.35 | ) | (0.35 | ) | 15.06 | ||||||||||||
Year Ended October 31, 2018 | 15.43 | 0.21 | (1.82 | ) | (1.61 | ) | (0.19 | ) | (0.19 | ) | 13.63 | ||||||||||
Year Ended October 31, 2017 | 13.04 | 0.20 | 2.42 | 2.62 | (0.23 | ) | (0.23 | ) | 15.43 | ||||||||||||
Year Ended October 31, 2016 | 12.82 | 0.22 | 0.05 | 0.27 | (0.05 | ) | (0.05 | ) | 13.04 |
(a) Net investment income/(loss) is based on average shares outstanding during the period.
(b) Excludes sales charge.
(c) During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
128 2020 Annual Report
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen International Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover (d) | |||||||||||
8.24 | % | $ 21,418 | 1.49 | %(f) | 1.49 | %(f) | 0.02 | % | 37.50 | % | ||||||
13.13 | % | 24,719 | 1.52 | %(g) | 1.52 | %(g) | 0.89 | % | 28.30 | % | ||||||
(10.93 | %) | 24,957 | 1.38 | % | 1.38 | % | 0.99 | % | 20.75 | % | ||||||
20.05 | % | 39,619 | 1.39 | % | 1.39 | % | 1.09 | % | 13.11 | % | ||||||
1.76 | % | 47,736 | 1.39 | %(f) | 1.39 | %(f) | 1.49 | % | 27.99 | % | ||||||
7.56 | %(h) | 2,432 | 2.10 | %(f) | 2.20 | %(f) | (0.55 | %) | 37.50 | % | ||||||
12.43 | %(h) | 4,330 | 2.12 | %(g) | 2.24 | %(g) | 0.21 | % | 28.30 | % | ||||||
(11.54 | %) | 8,074 | 2.10 | % | 2.10 | % | 0.27 | % | 20.75 | % | ||||||
19.27 | % | 12,375 | 2.10 | % | 2.18 | % | 0.35 | % | 13.11 | % | ||||||
0.97 | % | 14,400 | 2.10 | %(f) | 2.12 | %(f) | 0.70 | % | 27.99 | % | ||||||
7.97 | % | 3,244 | 1.74 | %(f) | 1.74 | %(f) | (0.22 | %) | 37.50 | % | ||||||
12.80 | % | 3,992 | 1.79 | %(g) | 1.79 | %(g) | 0.58 | % | 28.30 | % | ||||||
(11.14 | %) | 5,041 | 1.64 | % | 1.64 | % | 0.74 | % | 20.75 | % | ||||||
19.70 | % | 7,335 | 1.70 | % | 1.70 | % | 0.75 | % | 13.11 | % | ||||||
1.42 | % | 7,647 | 1.67 | %(f) | 1.67 | %(f) | 1.08 | % | 27.99 | % | ||||||
8.58 | %(h) | 83,121 | 1.15 | %(f) | 1.15 | %(f) | 0.36 | % | 37.50 | % | ||||||
13.49 | %(h) | 85,934 | 1.16 | %(g) | 1.16 | %(g) | 1.23 | % | 28.30 | % | ||||||
(10.58 | %) | 84,902 | 1.06 | % | 1.06 | % | 1.31 | % | 20.75 | % | ||||||
20.46 | % | 106,424 | 1.08 | % | 1.08 | % | 1.35 | % | 13.11 | % | ||||||
2.01 | % | 101,655 | 1.14 | %(f) | 1.14 | %(f) | 1.62 | % | 27.99 | % | ||||||
8.63 | %(h) | 107,158 | 1.10 | %(f) | 1.13 | %(f) | 0.41 | % | 37.50 | % | ||||||
13.55 | %(h) | 99,475 | 1.12 | %(g) | 1.13 | %(g) | 1.21 | % | 28.30 | % | ||||||
(10.56 | %) | 272,152 | 1.02 | % | 1.02 | % | 1.37 | % | 20.75 | % | ||||||
20.47 | % | 367,341 | 1.02 | % | 1.02 | % | 1.43 | % | 13.11 | % | ||||||
2.14 | % | 286,659 | 1.04 | %(f) | 1.04 | %(f) | 1.75 | % | 27.99 | % |
(e) Less than $0.005 per share.
(f) Includes interest expense that amounts to less than 0.01%.
(g) Includes interest expense that amounts to 0.02% for Class C and Institutional class. Includes interest expense that amounts to 0.01% for Class A, Class R and Institutional Service Class.
(h) The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments.
2020 Annual Report 129
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen International Real Estate Equity Fund
Investment Activities | Distributions | |||||||||||||||||||||||
Net | ||||||||||||||||||||||||
Realized | ||||||||||||||||||||||||
Net | and | Net | ||||||||||||||||||||||
Asset | Unrealized | Total | Asset | |||||||||||||||||||||
Value, | Net | Gains | from | Net | Value, | |||||||||||||||||||
Beginning | Investment | (Losses) on | Investment | Investment | Total | Redemption | End of | |||||||||||||||||
of Period | Income | Investments | Activities | Income | Distributions | Fees | Period | |||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | $23.71 | $0.30 | (d) | $(3.52 | ) | $(3.22 | ) | $(2.69 | ) | $(2.69 | ) | $ – | $17.80 | |||||||||||
Year Ended October 31, 2019 | 20.02 | 0.33 | (d) | 3.99 | 4.32 | (0.63 | ) | (0.63 | ) | – | 23.71 | |||||||||||||
Year Ended October 31, 2018(f) | 22.82 | 0.14 | (d) | (2.46 | ) | (2.32 | ) | (0.48 | ) | (0.48 | ) | 0.00 | (g) | 20.02 | ||||||||||
Year Ended October 31, 2017 | 19.33 | 0.02 | 3.47 | 3.49 | – | – | 0.00 | (g) | 22.82 | |||||||||||||||
Year Ended October 31, 2016 | 21.79 | 0.08 | (1.12 | ) | (1.04 | ) | (1.42 | ) | (1.42 | ) | 0.00 | (g) | 19.33 | |||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 23.87 | 0.35 | (d) | (3.53 | ) | (3.18 | ) | (2.74 | ) | (2.74 | ) | – | 17.95 | |||||||||||
Year Ended October 31, 2019 | 20.17 | 0.38 | (d) | 4.01 | 4.39 | (0.69 | ) | (0.69 | ) | – | 23.87 | |||||||||||||
Year Ended October 31, 2018(f) | 22.99 | 0.21 | (d) | (2.49 | ) | (2.28 | ) | (0.54 | ) | (0.54 | ) | 0.00 | (g) | 20.17 | ||||||||||
Year Ended October 31, 2017 | 19.46 | 0.20 | 3.36 | 3.56 | (0.03 | ) | (0.03 | ) | 0.00 | (g) | 22.99 | |||||||||||||
Year Ended October 31, 2016 | 21.92 | 0.17 | (1.16 | ) | (0.99 | ) | (1.47 | ) | (1.47 | ) | 0.00 | (g) | 19.46 |
(a) | Excludes sales charge. |
(b) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(c) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(d) | Net investment income/(loss) is based on average shares outstanding during the period. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
130 | 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen International Real Estate Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Ratio of Expenses | Ratio of Expenses | |||||||||||||||
Net Assets | (Net of Reimbursements/ | (Prior to Reimbursements) | Ratio of Net | |||||||||||||
Total Return | at End of Period | Waivers) | to Average Net Assets | Investment Income | Portfolio Turnover | |||||||||||
(a) | (000’s) | to Average Net Assets | (b) | to Average Net Assets | (c) | |||||||||||
(15.48 | %) | $ 21 | 1.65 | %(e) | 1.98 | %(e) | 1.58 | % | 57.05 | % | ||||||
22.29 | % | 177 | 1.62 | %(e) | 1.65 | %(e) | 1.51 | % | 60.73 | % | ||||||
(10.52 | %) | 135 | 1.63 | %(e) | 1.67 | %(e) | 0.62 | % | 89.59 | % | ||||||
18.05 | % | 176 | 1.61 | %(e) | 1.62 | %(e) | 0.75 | % | 60.00 | % | ||||||
(4.99 | %) | 125 | 1.57 | %(e) | 1.60 | %(e) | 0.54 | % | 33.00 | % | ||||||
(15.27 | %) | 20,570 | 1.40 | %(e) | 1.73 | %(e) | 1.74 | % | 57.05 | % | ||||||
22.57 | %(h) | 56,510 | 1.37 | %(e) | 1.40 | %(e) | 1.74 | % | 60.73 | % | ||||||
(10.35 | %) | 97,453 | 1.38 | %(e) | 1.39 | %(e) | 0.89 | % | 89.59 | % | ||||||
18.36 | % | 117,484 | 1.35 | %(e) | 1.37 | %(e) | 0.94 | % | 60.00 | % | ||||||
(4.70 | %) | 107,744 | 1.34 | %(e) | 1.37 | %(e) | 0.75 | % | 33.00 | % |
(e) | Includes interest expense that amounts to 0.02%, 0.01%, 0.02%, less than 0.01% and less than 0.01% for Class A and Institutional Class for the years ended October 31, 2020, October 31, 2019, October 31, 2018, October 31, 2017 and October 31, 2016, respectively. |
(f) | Beginning with the year ended October 31, 2018, the Fund has been audited by KPMG LLP. Previous years were audited by different independent registered public accounting firms. |
(g) | Less than $0.005 per share. |
(h) | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
2020 Annual Report | 131 |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen International Small Cap Fund
Investment Activities | Distributions | |||||||||||||||||||||||
Net | ||||||||||||||||||||||||
Realized | ||||||||||||||||||||||||
Net | Net | and | Net | |||||||||||||||||||||
Asset | Investment | Unrealized | Total | Asset | ||||||||||||||||||||
Value, | Income | Gains | from | Net | Net | Value, | ||||||||||||||||||
Beginning | (Loss) | (Losses) on | Investment | Investment | Realized | Total | End of | |||||||||||||||||
of Period | (a) | Investments | Activities | Income | Gains | Distributions | Period | |||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | $28.11 | $(0.09 | ) | $ 3.63 | $ 3.54 | $(0.34 | ) | $(1.13 | ) | $(1.47 | ) | $30.18 | ||||||||||||
Year Ended October 31, 2019 | 29.23 | 0.23 | 3.03 | 3.26 | (0.65 | ) | (3.73 | ) | (4.38 | ) | 28.11 | |||||||||||||
Year Ended October 31, 2018 | 31.35 | 0.47 | (1.56 | ) | (1.09 | ) | (0.17 | ) | (0.86 | ) | (1.03 | ) | 29.23 | |||||||||||
Year Ended October 31, 2017 | 25.97 | 0.11 | 5.49 | 5.60 | (0.14 | ) | (0.08 | ) | (0.22 | ) | 31.35 | |||||||||||||
Year Ended October 31, 2016 | 26.87 | 0.13 | 1.61 | 1.74 | (0.12 | ) | (2.52 | ) | (2.64 | ) | 25.97 | |||||||||||||
Class C Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 25.43 | (0.25 | ) | 3.27 | 3.02 | (0.16 | ) | (1.13 | ) | (1.29 | ) | 27.16 | ||||||||||||
Year Ended October 31, 2019 | 26.73 | (0.04 | ) | 2.84 | 2.80 | (0.37 | ) | (3.73 | ) | (4.10 | ) | 25.43 | ||||||||||||
Year Ended October 31, 2018 | 28.78 | 0.20 | (1.39 | ) | (1.19 | ) | – | (0.86 | ) | (0.86 | ) | 26.73 | ||||||||||||
Year Ended October 31, 2017 | 23.88 | (0.04 | ) | 5.02 | 4.98 | – | (0.08 | ) | (0.08 | ) | 28.78 | |||||||||||||
Year Ended October 31, 2016 | 25.04 | (0.05 | ) | 1.50 | 1.45 | (0.09 | ) | (2.52 | ) | (2.61 | ) | 23.88 | ||||||||||||
Class R Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 26.46 | (0.15 | ) | 3.40 | 3.25 | (0.27 | ) | (1.13 | ) | (1.40 | ) | 28.31 | ||||||||||||
Year Ended October 31, 2019 | 27.74 | 0.12 | 2.88 | 3.00 | (0.55 | ) | (3.73 | ) | (4.28 | ) | 26.46 | |||||||||||||
Year Ended October 31, 2018 | 29.82 | 0.30 | (1.43 | ) | (1.13 | ) | (0.09 | ) | (0.86 | ) | (0.95 | ) | 27.74 | |||||||||||
Year Ended October 31, 2017 | 24.77 | 0.04 | 5.20 | 5.24 | (0.11 | ) | (0.08 | ) | (0.19 | ) | 29.82 | |||||||||||||
Year Ended October 31, 2016 | 25.81 | 0.05 | 1.53 | 1.58 | (0.10 | ) | (2.52 | ) | (2.62 | ) | 24.77 | |||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 28.25 | 0.01 | 3.65 | 3.66 | (0.41 | ) | (1.13 | ) | (1.54 | ) | 30.37 | |||||||||||||
Year Ended October 31, 2019 | 29.33 | 0.27 | 3.11 | 3.38 | (0.73 | ) | (3.73 | ) | (4.46 | ) | 28.25 | |||||||||||||
Year Ended October 31, 2018 | 31.43 | 0.58 | (1.57 | ) | (0.99 | ) | (0.25 | ) | (0.86 | ) | (1.11 | ) | 29.33 | |||||||||||
Year Ended October 31, 2017 | 26.04 | 0.19 | 5.49 | 5.68 | (0.21 | ) | (0.08 | ) | (0.29 | ) | 31.43 | |||||||||||||
Year Ended October 31, 2016 | 26.87 | 0.18 | 1.65 | 1.83 | (0.14 | ) | (2.52 | ) | (2.66 | ) | 26.04 |
(a) Net investment income/(loss) is based on average shares outstanding during the period.
(b) Excludes sales charge.
(c) During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
132 | 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen International Small Cap Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Ratio of Expenses | Ratio of Expenses | |||||||||||||||
Net Assets | (Net of Reimbursements/ | (Prior to Reimbursements) | Ratio of Net | |||||||||||||
Total Return | at End of Period | Waivers) | to Average Net Assets | Investment Income (Loss) | Portfolio Turnover | |||||||||||
(b) | (000’s) | to Average Net Assets | (c) | to Average Net Assets | (d) | |||||||||||
13.02 | % | $90,560 | 1.40 | % | 1.61 | % | (0.33 | %) | 29.65 | % | ||||||
13.93 | % | 75,754 | 1.49 | %(e) | 1.82 | %(e) | 0.86 | % | 35.37 | % | ||||||
(3.68 | %) | 49,391 | 1.53 | %(e) | 1.88 | %(e) | 1.48 | % | 18.07 | % | ||||||
21.79 | % | 59,477 | 1.63 | %(e) | 2.07 | %(e) | 0.40 | % | 20.60 | % | ||||||
7.53 | %(f) | 51,530 | 1.63 | %(e) | 2.09 | %(e) | 0.53 | % | 36.40 | % | ||||||
12.27 | % | 554 | 2.05 | % | 2.38 | % | (1.02 | %) | 29.65 | % | ||||||
13.21 | % | 829 | 2.15 | %(e) | 2.59 | %(e) | (0.17 | %) | 35.37 | % | ||||||
(4.31 | %) | 565 | 2.22 | %(e) | 2.65 | %(e) | 0.69 | % | 18.07 | % | ||||||
20.94 | % | 1,591 | 2.30 | %(e) | 2.84 | %(e) | (0.17 | %) | 20.60 | % | ||||||
6.85 | % | 1,175 | 2.30 | %(e) | 2.86 | %(e) | (0.20 | %) | 36.40 | % | ||||||
12.68 | % | 1,649 | 1.69 | % | 1.90 | % | (0.61 | %) | 29.65 | % | ||||||
13.62 | % | 1,945 | 1.80 | %(e) | 2.13 | %(e) | 0.47 | % | 35.37 | % | ||||||
(3.98 | %) | 2,309 | 1.84 | %(e) | 2.19 | %(e) | 1.02 | % | 18.07 | % | ||||||
21.34 | % | 1,707 | 1.99 | %(e) | 2.43 | %(e) | 0.14 | % | 20.60 | % | ||||||
7.20 | %(f) | 947 | 1.95 | %(e) | 2.41 | %(e) | 0.20 | % | 36.40 | % | ||||||
13.41 | % | 46,330 | 1.04 | % | 1.35 | % | 0.03 | % | 29.65 | % | ||||||
14.39 | % | 35,248 | 1.15 | %(e) | 1.57 | %(e) | 1.01 | % | 35.37 | % | ||||||
(3.34 | %) | 12,418 | 1.20 | %(e) | 1.61 | %(e) | 1.84 | % | 18.07 | % | ||||||
22.14 | % | 17,141 | 1.30 | %(e) | 1.79 | %(e) | 0.69 | % | 20.60 | % | ||||||
7.92 | % | 19,840 | 1.30 | %(e) | 1.79 | %(e) | 0.71 | % | 36.40 | % |
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares.
(e) Includes interest expense that amounts to less than 0.01%.
(f) The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments.
2020 Annual Report | 133 |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Realty Income & Growth Fund
Investment Activities | Distributions | ||||||||||||||||||||||||||||
Net | |||||||||||||||||||||||||||||
Realized | |||||||||||||||||||||||||||||
and | |||||||||||||||||||||||||||||
Net | Unrealized | Net | |||||||||||||||||||||||||||
Asset | Net | Gains | Total | Asset | |||||||||||||||||||||||||
Value, | Investment | (Losses) | from | Net | Net | Value, | |||||||||||||||||||||||
Beginning | Income | on | Investment | Investment | Realized | Total | Redemption | End of | |||||||||||||||||||||
of Period | (Loss) | Investments | Activities | Income | Gains | Distributions | Fees | Period | |||||||||||||||||||||
Class A Shares | |||||||||||||||||||||||||||||
Year Ended October 31, 2020 | $17.98 | $ 0.25 | (d) | $(3.17 | ) | $(2.92 | ) | $(0.60 | ) | $(2.06 | ) | $(2.66 | ) | $ – | $12.40 | ||||||||||||||
Year Ended October 31, 2019 | 21.38 | 0.32 | (d) | 3.28 | 3.60 | (0.52 | ) | (6.48 | ) | (7.00 | ) | – | 17.98 | ||||||||||||||||
Year Ended October 31, 2018(f) | 22.93 | 0.47 | (d) | (0.74 | ) | (0.27 | ) | (0.69 | ) | (0.59 | ) | (1.28 | ) | 0.00 | (g) | 21.38 | |||||||||||||
Year Ended October 31, 2017 | 22.09 | (0.41 | ) | 2.42 | 2.01 | (0.70 | ) | (0.47 | ) | (1.17 | ) | 0.00 | (g) | 22.93 | |||||||||||||||
Year Ended October 31, 2016 | 21.97 | 0.45 | 0.63 | 1.08 | (0.50 | ) | (0.46 | ) | (0.96 | ) | 0.00 | (g) | 22.09 | ||||||||||||||||
Institutional Class Shares | |||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 18.02 | 0.28 | (d) | (3.16 | ) | (2.88 | ) | (0.64 | ) | (2.06 | ) | (2.70 | ) | – | 12.44 | ||||||||||||||
Year Ended October 31, 2019 | 21.41 | 0.36 | (d) | 3.29 | 3.65 | (0.56 | ) | (6.48 | ) | (7.04 | ) | – | 18.02 | ||||||||||||||||
Year Ended October 31, 2018(f) | 22.97 | 0.54 | (d) | (0.76 | ) | (0.22 | ) | (0.75 | ) | (0.59 | ) | (1.34 | ) | 0.00 | (g) | 21.41 | |||||||||||||
Year Ended October 31, 2017 | 22.11 | 0.20 | 1.88 | 2.08 | (0.75 | ) | (0.47 | ) | (1.22 | ) | 0.00 | (g) | 22.97 | ||||||||||||||||
Year Ended October 31, 2016 | 22.00 | 0.49 | 0.64 | 1.13 | (0.56 | ) | (0.46 | ) | (1.02 | ) | 0.00 | (g) | 22.11 |
(a) Excludes sales charge.
(b) During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares.
(d) Net investment income/(loss) is based on average shares outstanding during the period.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
134 | 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Realty Income & Growth Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Ratio of Expenses | Ratio of Expenses | |||||||||||||||
Net Assets | (Net of Reimbursements/ | (Prior to Reimbursements) | Ratio of Net | |||||||||||||
Total Return | at End of Period | Waivers) | to Average Net Assets | Investment Income | Portfolio Turnover | |||||||||||
(a) | (000’s) | to Average Net Assets | (b) | to Average Net Assets | (c) | |||||||||||
(18.12 | %) | $ 1,971 | 1.30 | %(e) | 1.71 | %(e) | 1.84 | % | 22.61 | % | ||||||
25.65 | % | 2,341 | 1.28 | %(e) | 1.71 | %(e) | 1.83 | % | 20.70 | % | ||||||
(1.35 | %) | 1,751 | 1.34 | %(e) | 1.71 | %(e) | 2.16 | % | 42.71 | % | ||||||
9.37 | % | 1,565 | 1.46 | %(e) | 1.65 | %(e) | 0.66 | % | 7.00 | % | ||||||
4.90 | % | 2,807 | 1.58 | %(e) | 1.59 | %(e) | 2.07 | % | 15.00 | % | ||||||
(17.85 | %) | 46,235 | 1.05 | %(e) | 1.48 | %(e) | 2.05 | % | 22.61 | % | ||||||
25.97 | % | 75,232 | 1.03 | %(e) | 1.39 | %(e) | 2.10 | % | 20.70 | % | ||||||
(1.15 | %) | 83,573 | 1.10 | %(e) | 1.45 | %(e) | 2.46 | % | 42.71 | % | ||||||
9.65 | % | 107,042 | 1.21 | %(e) | 1.40 | %(e) | 0.92 | % | 7.00 | % | ||||||
5.15 | % | 107,916 | 1.35 | %(e) | 1.36 | %(e) | 2.28 | % | 15.00 | % |
(e) | Includes interest expense that amounts to 0.05%, 0.03%, 0.10%, 0.10% and 0.06% for Class A and Institutional Class for the years ended October 31, 2020, October 31, 2019, October 31, 2018, 0ctober 31, 2017 and October 31, 2016 respectively. |
(f) | Beginning with the year ended October 31, 2018, the Fund has been audited by KPMG LLP. Previous years were audited by different independent registered public accounting firms. |
(g) | Less than $0.005 per share. |
2020 Annual Report | 135 |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen U.S. Mid Cap Equity Fund
Investment Activities | Distributions | |||||||||||||||||||||||||||||||
Net | ||||||||||||||||||||||||||||||||
Realized | ||||||||||||||||||||||||||||||||
Net | Net | and | Net | |||||||||||||||||||||||||||||
Asset | Investment | Unrealized | Total | Asset | ||||||||||||||||||||||||||||
Value, | Income | Gains | from | Net | Net | Value, | ||||||||||||||||||||||||||
Beginning | (Loss) | on | Investment | Investment | Realized | Total | End of | |||||||||||||||||||||||||
of Period | (a) | Investments | Activities | Income | Gains | Distributions | Period | |||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | $13.66 | $(0.07 | ) | $2.44 | $2.37 | $ – | $(0.75 | ) | $(0.75 | ) | $15.28 | |||||||||||||||||||||
Year Ended October 31, 2019 | 12.19 | (0.01 | ) | 2.02 | 2.01 | (0.01 | ) | (0.53 | ) | (0.54 | ) | 13.66 | ||||||||||||||||||||
Year Ended October 31, 2018 | 13.35 | (0.01 | ) | 0.06 | 0.05 | (0.01 | ) | (1.20 | ) | (1.21 | ) | 12.19 | ||||||||||||||||||||
Year Ended October 31, 2017 | 10.95 | – | (g) | 2.63 | 2.63 | (0.02 | ) | (0.21 | ) | (0.23 | ) | 13.35 | ||||||||||||||||||||
Year Ended October 31, 2016(h) | 10.00 | 0.01 | 0.94 | 0.95 | – | – | – | 10.95 | ||||||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 13.30 | (0.17 | ) | 2.36 | 2.19 | – | (0.75 | ) | (0.75 | ) | 14.74 | |||||||||||||||||||||
Year Ended October 31, 2019 | 11.96 | (0.10 | ) | 1.97 | 1.87 | – | (0.53 | ) | (0.53 | ) | 13.30 | |||||||||||||||||||||
Year Ended October 31, 2018 | 13.21 | (0.11 | ) | 0.06 | (0.05 | ) | – | (1.20 | ) | (1.20 | ) | 11.96 | ||||||||||||||||||||
Year Ended October 31, 2017 | 10.89 | (0.09 | ) | 2.62 | 2.53 | – | (0.21 | ) | (0.21 | ) | 13.21 | |||||||||||||||||||||
Year Ended October 31, 2016(h) | 10.00 | (0.05 | ) | 0.94 | 0.89 | – | – | – | 10.89 | |||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 13.55 | (0.10 | ) | 2.41 | 2.31 | – | (0.75 | ) | (0.75 | ) | 15.11 | |||||||||||||||||||||
Year Ended October 31, 2019 | 12.12 | (0.04 | ) | 2.00 | 1.96 | – | (g) | (0.53 | ) | (0.53 | ) | 13.55 | ||||||||||||||||||||
Year Ended October 31, 2018 | 13.31 | (0.04 | ) | 0.05 | 0.01 | – | (1.20 | ) | (1.20 | ) | 12.12 | |||||||||||||||||||||
Year Ended October 31, 2017 | 10.93 | (0.03 | ) | 2.63 | 2.60 | (0.01 | ) | (0.21 | ) | (0.22 | ) | 13.31 | ||||||||||||||||||||
Year Ended October 31, 2016(h) | 10.00 | (0.01 | ) | 0.94 | 0.93 | – | – | – | 10.93 | |||||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 13.73 | (0.03 | ) | 2.45 | 2.42 | (0.01 | ) | (0.75 | ) | (0.76 | ) | 15.39 | ||||||||||||||||||||
Year Ended October 31, 2019 | 12.23 | 0.02 | 2.03 | 2.05 | (0.02 | ) | (0.53 | ) | (0.55 | ) | 13.73 | |||||||||||||||||||||
Year Ended October 31, 2018 | 13.38 | 0.02 | 0.05 | 0.07 | (0.02 | ) | (1.20 | ) | (1.22 | ) | 12.23 | |||||||||||||||||||||
Year Ended October 31, 2017 | 10.97 | 0.03 | 2.63 | 2.66 | (0.04 | ) | (0.21 | ) | (0.25 | ) | 13.38 | |||||||||||||||||||||
Year Ended October 31, 2016(h) | 10.00 | 0.02 | 0.95 | 0.97 | – | – | – | 10.97 | ||||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 13.73 | (0.03 | ) | 2.45 | 2.42 | (0.01 | ) | (0.75 | ) | (0.76 | ) | 15.39 | ||||||||||||||||||||
Year Ended October 31, 2019 | 12.23 | 0.02 | 2.03 | 2.05 | (0.02 | ) | (0.53 | ) | (0.55 | ) | 13.73 | |||||||||||||||||||||
Year Ended October 31, 2018 | 13.38 | 0.02 | 0.05 | 0.07 | (0.02 | ) | (1.20 | ) | (1.22 | ) | 12.23 | |||||||||||||||||||||
Year Ended October 31, 2017 | 10.97 | 0.03 | 2.63 | 2.66 | (0.04 | ) | (0.21 | ) | (0.25 | ) | 13.38 | |||||||||||||||||||||
Year Ended October 31, 2016(h) | 10.00 | 0.02 | 0.95 | 0.97 | – | – | – | 10.97 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | Not annualized for periods less than one year. |
(d) | Annualized for periods less than one year. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
136 | 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen U.S. Mid Cap Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||
Ratio of Expenses | Ratio of Expenses | |||||||||
Net Assets | (Net of Reimbursements/ | (Prior to Reimbursements) | Ratio of Net | |||||||
Total Return | at End of Period | Waivers) | to Average Net Assets | Investment Income (Loss) | Portfolio Turnover | |||||
(b)(c) | (000’s) | to Average Net Assets(d) | (d)(e) | to Average Net Assets(d) | (c)(f) | |||||
18.00% | $ 161 | 1.25% | 8.58% | (0.49%) | 49.30% | |||||
17.76% | 109 | 1.25% | 10.30% | (0.09%) | 50.20% | |||||
(0.09%) | 91 | 1.25% | 10.22% | (0.08%) | 25.45% | |||||
24.41% | 46 | 1.25% | 12.12% | (0.01%) | 42.92% | |||||
9.50% | 12 | 1.25% | 15.77% | 0.09% | 18.10% | |||||
17.09% | 18 | 2.00% | 9.33% | (1.23%) | 49.30% | |||||
16.87% | 16 | 2.00% | 11.05% | (0.84%) | 50.20% | |||||
(0.87%) | 13 | 2.00% | 10.97% | (0.84%) | 25.45% | |||||
23.57% | 13 | 2.00% | 12.87% | (0.75%) | 42.92% | |||||
8.90% | 11 | 2.00% | 16.52% | (0.67%) | 18.10% | |||||
17.69% | 19 | 1.50% | 8.83% | (0.73%) | 49.30% | |||||
17.46% | 16 | 1.50% | 10.55% | (0.34%) | 50.20% | |||||
(0.38%) | 14 | 1.50% | 10.47% | (0.34%) | 25.45% | |||||
24.14% | 14 | 1.50% | 12.37% | (0.25%) | 42.92% | |||||
9.30% | 11 | 1.50% | 16.02% | (0.17%) | 18.10% | |||||
18.27% | 60 | 1.00% | 8.33% | (0.23%) | 49.30% | |||||
18.10% | 50 | 1.00% | 10.05% | 0.15% | 50.20% | |||||
0.12% | 43 | 1.00% | 9.97% | 0.19% | 25.45% | |||||
24.70% | 14 | 1.00% | 11.87% | 0.25% | 42.92% | |||||
9.70% | 11 | 1.00% | 15.52% | 0.33% | 18.10% | |||||
18.27% | 1,911 | 1.00% | 8.33% | (0.23%) | 49.30% | |||||
18.10% | 1,609 | 1.00% | 10.05% | 0.16% | 50.20% | |||||
0.12% | 1,353 | 1.00% | 9.97% | 0.16% | 25.45% | |||||
24.70% | 1,338 | 1.00% | 11.87% | 0.25% | 42.92% | |||||
9.70% | 1,053 | 1.00% | 15.52% | 0.33% | 18.10% |
(e) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(f) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(g) | Less than $0.005 per share. |
(h) | For the period from February 29, 2016 (commencement of operations) through October 31, 2016. |
2020 Annual Report | 137 |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen U.S. Multi-Cap Equity Fund
Investment Activities | Distributions | |||||||||||||||||||||||
Net | ||||||||||||||||||||||||
Realized | ||||||||||||||||||||||||
Net | Net | and | Net | |||||||||||||||||||||
Asset | Investment | Unrealized | Total | Asset | ||||||||||||||||||||
Value, | Income | Gains | from | Net | Net | Value, | ||||||||||||||||||
Beginning | (Loss) | (Losses) on | Investment | Investment | Realized | Total | End of | |||||||||||||||||
of Period | (a) | Investments | Activities | Income | Gains | Distributions | Period | |||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | $12.95 | $(0.03 | ) | $2.17 | $2.14 | $(0.01 | ) | $(1.29 | ) | $(1.30 | ) | $13.79 | ||||||||||||
Year Ended October 31, 2019 | 12.53 | 0.01 | 1.79 | 1.80 | (0.02 | ) | (1.36 | ) | (1.38 | ) | 12.95 | |||||||||||||
Year Ended October 31, 2018 | 13.05 | 0.02 | 0.83 | 0.85 | (0.04 | ) | (1.33 | ) | (1.37 | ) | 12.53 | |||||||||||||
Year Ended October 31, 2017 | 12.13 | 0.04 | 2.34 | 2.38 | (0.02 | ) | (1.44 | ) | (1.46 | ) | 13.05 | |||||||||||||
Year Ended October 31, 2016 | 12.52 | 0.03 | 0.21 | 0.24 | (0.02 | ) | (0.61 | ) | (0.63 | ) | 12.13 | |||||||||||||
Class C Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 10.94 | (0.10 | ) | 1.81 | 1.71 | – | (1.29 | ) | (1.29 | ) | 11.36 | |||||||||||||
Year Ended October 31, 2019 | 10.87 | (0.06 | ) | 1.49 | 1.43 | – | (1.36 | ) | (1.36 | ) | 10.94 | |||||||||||||
Year Ended October 31, 2018 | 11.53 | (0.06 | ) | 0.73 | 0.67 | – | (1.33 | ) | (1.33 | ) | 10.87 | |||||||||||||
Year Ended October 31, 2017 | 10.93 | (0.04 | ) | 2.08 | 2.04 | – | (1.44 | ) | (1.44 | ) | 11.53 | |||||||||||||
Year Ended October 31, 2016 | 11.40 | (0.05 | ) | 0.19 | 0.14 | – | (0.61 | ) | (0.61 | ) | 10.93 | |||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 13.88 | – | (f) | 2.34 | 2.34 | (0.04 | ) | (1.29 | ) | (1.33 | ) | 14.89 | ||||||||||||
Year Ended October 31, 2019 | 13.33 | 0.04 | 1.92 | 1.96 | (0.05 | ) | (1.36 | ) | (1.41 | ) | 13.88 | |||||||||||||
Year Ended October 31, 2018 | 13.79 | 0.05 | 0.88 | 0.93 | (0.06 | ) | (1.33 | ) | (1.39 | ) | 13.33 | |||||||||||||
Year Ended October 31, 2017 | 12.74 | 0.06 | 2.46 | 2.52 | (0.03 | ) | (1.44 | ) | (1.47 | ) | 13.79 | |||||||||||||
Year Ended October 31, 2016 | 13.09 | 0.05 | 0.24 | 0.29 | (0.03 | ) | (0.61 | ) | (0.64 | ) | 12.74 | |||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 13.93 | 0.01 | 2.35 | 2.36 | (0.04 | ) | (1.29 | ) | (1.33 | ) | 14.96 | |||||||||||||
Year Ended October 31, 2019 | 13.37 | 0.04 | 1.93 | 1.97 | (0.05 | ) | (1.36 | ) | (1.41 | ) | 13.93 | |||||||||||||
Year Ended October 31, 2018 | 13.82 | 0.06 | 0.89 | 0.95 | (0.07 | ) | (1.33 | ) | (1.40 | ) | 13.37 | |||||||||||||
Year Ended October 31, 2017 | 12.76 | 0.08 | 2.46 | 2.54 | (0.04 | ) | (1.44 | ) | (1.48 | ) | 13.82 | |||||||||||||
Year Ended October 31, 2016 | 13.10 | 0.06 | 0.24 | 0.30 | (0.03 | ) | (0.61 | ) | (0.64 | ) | 12.76 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
138 | 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen U.S. Multi-Cap Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Ratio of Expenses | Ratio of Expenses | |||||||||||||||
Net Assets | (Net of Reimbursements/ | (Prior to Reimbursements) | Ratio of Net | |||||||||||||
Total Return | at End of Period | Waivers) | to Average Net Assets | Investment Income (Loss) | Portfolio Turnover | |||||||||||
(b) | (000’s) | to Average Net Assets | (c) | to Average Net Assets | (d) | |||||||||||
17.50 | % | $264,977 | 1.19 | % | 1.26 | % | (0.24 | %) | 49.68 | % | ||||||
17.60 | % | 247,926 | 1.19 | % | 1.27 | % | 0.06 | % | 47.13 | % | ||||||
6.63 | % | 233,717 | 1.19 | %(e) | 1.25 | %(e) | 0.14 | % | 38.68 | % | ||||||
21.13 | % | 242,085 | 1.19 | %(e) | 1.26 | %(e) | 0.29 | % | 33.79 | % | ||||||
2.25 | % | 225,723 | 1.19 | %(e) | 1.28 | %(e) | 0.21 | % | 63.11 | % | ||||||
16.71 | % | 1,143 | 1.90 | % | 2.08 | % | (0.94 | %) | 49.68 | % | ||||||
16.75 | % | 1,428 | 1.90 | % | 2.11 | % | (0.58 | %) | 47.13 | % | ||||||
5.88 | % | 2,963 | 1.90 | %(e) | 2.07 | %(e) | (0.56 | %) | 38.68 | % | ||||||
20.26 | % | 3,544 | 1.90 | %(e) | 2.09 | %(e) | (0.40 | %) | 33.79 | % | ||||||
1.56 | % | 5,883 | 1.90 | %(e) | 2.08 | %(e) | (0.50 | %) | 63.11 | % | ||||||
17.79 | % | 121,611 | 0.97 | % | 1.04 | % | (0.01 | %) | 49.68 | % | ||||||
17.84 | % | 113,600 | 0.97 | % | 1.05 | % | 0.29 | % | 47.13 | % | ||||||
6.90 | % | 106,337 | 0.97 | %(e) | 1.03 | %(e) | 0.36 | % | 38.68 | % | ||||||
21.33 | % | 109,418 | 0.98 | %(e) | 1.05 | %(e) | 0.49 | % | 33.79 | % | ||||||
2.52 | % | 101,549 | 1.00 | %(e) | 1.09 | %(e) | 0.40 | % | 63.11 | % | ||||||
17.89 | % | 10,982 | 0.90 | % | 1.01 | % | 0.05 | % | 49.68 | % | ||||||
17.90 | % | 8,839 | 0.90 | % | 1.03 | % | 0.34 | % | 47.13 | % | ||||||
6.99 | % | 6,801 | 0.90 | %(e) | 1.01 | %(e) | 0.43 | % | 38.68 | % | ||||||
21.45 | % | 6,507 | 0.90 | %(e) | 1.01 | %(e) | 0.59 | % | 33.79 | % | ||||||
2.63 | % | 6,742 | 0.90 | %(e) | 1.02 | %(e) | 0.50 | % | 63.11 | % |
(d) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(e) | Includes interest expense that amounts to less than 0.01%. |
(f) | Less than $0.005 per share. |
2020 Annual Report | 139 |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen U.S. Small Cap Equity Fund
Investment Activities | Distributions | |||||||||||||||||||||||||||||||
Net | ||||||||||||||||||||||||||||||||
Realized | ||||||||||||||||||||||||||||||||
Net | Net | and | Net | |||||||||||||||||||||||||||||
Asset | Investment | Unrealized | Total | Asset | ||||||||||||||||||||||||||||
Value, | Income | Gains | from | Net | Net | Value, | ||||||||||||||||||||||||||
Beginning | (Loss) | (Losses) on | Investment | Investment | Realized | Total | End of | |||||||||||||||||||||||||
of Period | (a) | Investments | Activities | Income | Gains | Distributions | Period | |||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | $33.19 | $(0.20 | ) | $3.08 | $2.88 | $ – | $(2.52 | ) | $(2.52 | ) | $33.55 | |||||||||||||||||||||
Year Ended October 31, 2019 | 35.39 | (0.10 | ) | 1.78 | 1.68 | – | (f) | (3.88 | ) | (3.88 | ) | 33.19 | ||||||||||||||||||||
Year Ended October 31, 2018 | 35.61 | (0.08 | ) | (0.14 | ) | (0.22 | ) | – | – | – | 35.39 | |||||||||||||||||||||
Year Ended October 31, 2017 | 28.71 | (0.11 | ) | 7.01 | 6.90 | – | – | – | 35.61 | |||||||||||||||||||||||
Year Ended October 31, 2016 | 26.62 | (0.09 | ) | 2.18 | 2.09 | – | – | – | 28.71 | |||||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 27.79 | (0.33 | ) | 2.54 | 2.21 | – | (2.52 | ) | (2.52 | ) | 27.48 | |||||||||||||||||||||
Year Ended October 31, 2019 | 30.53 | (0.27 | ) | 1.41 | 1.14 | – | (3.88 | ) | (3.88 | ) | 27.79 | |||||||||||||||||||||
Year Ended October 31, 2018 | 30.94 | (0.30 | ) | (0.11 | ) | (0.41 | ) | – | – | – | 30.53 | |||||||||||||||||||||
Year Ended October 31, 2017 | 25.12 | (0.30 | ) | 6.12 | 5.82 | – | – | – | 30.94 | |||||||||||||||||||||||
Year Ended October 31, 2016 | 23.46 | (0.24 | ) | 1.90 | 1.66 | – | – | – | 25.12 | |||||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 30.14 | (0.27 | ) | 2.77 | 2.50 | – | (2.52 | ) | (2.52 | ) | 30.12 | |||||||||||||||||||||
Year Ended October 31, 2019 | 32.64 | (0.19 | ) | 1.57 | 1.38 | – | (3.88 | ) | (3.88 | ) | 30.14 | |||||||||||||||||||||
Year Ended October 31, 2018 | 32.97 | (0.18 | ) | (0.15 | ) | (0.33 | ) | – | – | – | 32.64 | |||||||||||||||||||||
Year Ended October 31, 2017 | 26.67 | (0.21 | ) | 6.51 | 6.30 | – | – | – | 32.97 | |||||||||||||||||||||||
Year Ended October 31, 2016 | 24.78 | (0.13 | ) | 2.02 | 1.89 | – | – | – | 26.67 | |||||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 35.41 | (0.12 | ) | 3.29 | 3.17 | – | (2.52 | ) | (2.52 | ) | 36.06 | |||||||||||||||||||||
Year Ended October 31, 2019 | 37.39 | (0.01 | ) | 1.93 | 1.92 | (0.02 | ) | (3.88 | ) | (3.90 | ) | 35.41 | ||||||||||||||||||||
Year Ended October 31, 2018 | 37.51 | 0.01 | (0.13 | ) | (0.12 | ) | – | – | – | 37.39 | ||||||||||||||||||||||
Year Ended October 31, 2017 | 30.17 | (0.03 | ) | 7.37 | 7.34 | – | – | – | 37.51 | |||||||||||||||||||||||
Year Ended October 31, 2016 | 27.90 | (0.02 | ) | 2.29 | 2.27 | – | – | – | 30.17 | |||||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 35.40 | (0.09 | ) | 3.30 | 3.21 | – | (2.52 | ) | (2.52 | ) | 36.09 | |||||||||||||||||||||
Year Ended October 31, 2019 | 37.37 | 0.01 | 1.92 | 1.93 | (0.02 | ) | (3.88 | ) | (3.90 | ) | 35.40 | |||||||||||||||||||||
Year Ended October 31, 2018 | 37.49 | 0.02 | (0.14 | ) | (0.12 | ) | – | – | – | 37.37 | ||||||||||||||||||||||
Year Ended October 31, 2017 | 30.14 | (0.02 | ) | 7.37 | 7.35 | – | – | – | 37.49 | |||||||||||||||||||||||
Year Ended October 31, 2016 | 27.87 | – | (f) | 2.27 | 2.27 | – | – | – | 30.14 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(d) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
140 | 2020 Annual Report |
Financial Highlights (concluded)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen U.S. Small Cap Equity Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Ratio of Expenses | Ratio of Expenses | |||||||||||||||
Net Assets | (Net of Reimbursements/ | (Prior to Reimbursements) | Ratio of Net | |||||||||||||
Total Return | at End of Period | Waivers) | to Average Net Assets | Investment Income (Loss) | Portfolio Turnover | |||||||||||
(b) | (000’s) | to Average Net Assets | (c) | to Average Net Assets | (d) | |||||||||||
8.97 | % | $124,673 | 1.40 | %(e) | 1.40 | %(e) | (0.62 | %) | 60.67 | % | ||||||
7.15 | % | 159,391 | 1.41 | %(e) | 1.41 | %(e) | (0.33 | %) | 55.00 | % | ||||||
(0.62 | %) | 224,804 | 1.35 | %(e) | 1.35 | %(e) | (0.23 | %) | 38.28 | % | ||||||
24.03 | % | 316,766 | 1.38 | % | 1.38 | % | (0.33 | %) | 42.71 | % | ||||||
7.85 | % | 259,556 | 1.46 | % | 1.39 | % | (0.33 | %) | 32.20 | % | ||||||
8.25 | % | 36,621 | 2.05 | %(e) | 2.10 | %(e) | (1.26 | %) | 60.67 | % | ||||||
6.41 | % | 48,382 | 2.10 | %(e) | 2.10 | %(e) | (0.99 | %) | 55.00 | % | ||||||
(1.33 | %) | 75,913 | 2.06 | %(e) | 2.06 | %(e) | (0.95 | %) | 38.28 | % | ||||||
23.17 | % | 95,913 | 2.10 | % | 2.10 | % | (1.05 | %) | 42.71 | % | ||||||
7.08 | % | 78,109 | 2.15 | % | 2.12 | % | (0.96 | %) | 32.20 | % | ||||||
8.59 | % | 3,554 | 1.75 | %(e) | 1.75 | %(e) | (0.96 | %) | 60.67 | % | ||||||
6.78 | % | 5,272 | 1.75 | %(e) | 1.75 | %(e) | (0.65 | %) | 55.00 | % | ||||||
(1.00 | %) | 8,430 | 1.72 | %(e) | 1.72 | %(e) | (0.55 | %) | 38.28 | % | ||||||
23.62 | %(g) | 20,595 | 1.72 | % | 1.72 | % | (0.67 | %) | 42.71 | % | ||||||
7.63 | %(g) | 13,722 | 1.68 | % | 1.65 | % | (0.49 | %) | 32.20 | % | ||||||
9.24 | % | 31,548 | 1.13 | %(e) | 1.13 | %(e) | (0.35 | %) | 60.67 | % | ||||||
7.44 | % | 40,476 | 1.12 | %(e) | 1.12 | %(e) | (0.04 | %) | 55.00 | % | ||||||
(0.32 | %) | 50,163 | 1.08 | %(e) | 1.08 | %(e) | 0.03 | % | 38.28 | % | ||||||
24.33 | %(g) | 61,897 | 1.13 | % | 1.13 | % | (0.08 | %) | 42.71 | % | ||||||
8.14 | % | 47,421 | 1.14 | % | 1.13 | % | (0.06 | %) | 32.20 | % | ||||||
9.37 | % | 536,973 | 1.04 | %(e) | 1.10 | %(e) | (0.27 | %) | 60.67 | % | ||||||
7.48 | % | 607,103 | 1.11 | %(e) | 1.11 | %(e) | 0.03 | % | 55.00 | % | ||||||
(0.32 | %) | 1,263,907 | 1.07 | %(e) | 1.07 | %(e) | 0.04 | % | 38.28 | % | ||||||
24.39 | % | 1,467,787 | 1.10 | % | 1.10 | % | (0.06 | %) | 42.71 | % | ||||||
8.15 | %(g) | 746,112 | 1.14 | % | 1.12 | % | 0.01 | % | 32.20 | % |
(e) | Includes interest expense that amounts to less than 0.01%. |
(f) | Less than $0.005 per share. |
(g) | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
2020 Annual Report | 141 |
Notes to Financial Statements
October 31, 2020
1. Organization
Aberdeen Funds (the "Trust") was organized as a statutory trust under the laws of the state of Delaware by a Certificate of Trust filed on September 27, 2007 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. As of October 31, 2020, the Trust had authorized an unlimited number of shares of beneficial interest ("shares") without par value. As of October 31, 2020, the Trust operated nineteen (19) separate series, or mutual funds, each with its own investment objective(s) and strategies. This report contains the financial statements and financial highlights of the fourteen (14) funds listed below (each a "Fund"; collectively, the "Funds"):
– | Aberdeen Asia-Pacific (ex-Japan) Equity Fund ("Asia-Pacific (ex-Japan) Equity Fund") |
– | Aberdeen China A Share Equity Fund ("China A Share Equity Fund") |
– | Aberdeen Dynamic Dividend Fund ("Dynamic Dividend Fund") |
– | Aberdeen Emerging Markets Fund ("Emerging Markets Fund") |
– | Aberdeen Focused U.S. Equity Fund ("Focused U.S. Equity Fund") |
– | Aberdeen Global Equity Fund ("Global Equity Fund") |
– | Aberdeen Global Infrastructure Fund ("Global Infrastructure Fund") |
– | Aberdeen International Equity Fund ("International Equity Fund") |
– | Aberdeen International Real Estate Equity Fund ("International Real Estate Equity Fund") |
– | Aberdeen International Small Cap Fund ("International Small Cap Fund") |
– | Aberdeen Realty Income & Growth Fund ("Realty Income & Growth Fund") |
– | Aberdeen U.S. Mid Cap Equity Fund ("U.S. Mid Cap Equity Fund") |
– | Aberdeen U.S. Multi-Cap Equity Fund ("U.S. Multi-Cap Equity Fund") |
– | Aberdeen U.S. Small Cap Equity Fund ("U.S. Small Cap Equity Fund") |
2. Summary of Significant Accounting Policies
The Trust is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standard Codification Topic 946 Financial Services-Investment Companies. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The policies conform to generally accepted accounting principles in the United States of America ("GAAP"). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The accounting records of the Funds are maintained in U.S. Dollars.
a. | Security Valuation |
The Funds value their securities at current market value or fair value, consistent with regulatory requirements. "Fair value" is defined in the Funds' Valuation and Liquidity Procedures as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants without a compulsion to transact at the measurement date.
Equity securities that are traded on an exchange are valued at the last quoted sale price on the principal exchange on which the security is traded at the "Valuation Time" subject to application, when appropriate, of the valuation factors described in the paragraph below. Under normal circumstances, the Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time). In the absence of a sale price, the security is valued at the mean of the bid/ask price quoted at the close on the principal exchange on which the security is traded. Securities traded on NASDAQ are valued at the NASDAQ official closing price.
In accordance with the authoritative guidance on fair value measurements and disclosures under generally accepted accounting principles in the United States of America, the Funds disclose the fair value of their investments using a three-level hierarchy that classifies the inputs to valuation techniques used to measure the fair value. The hierarchy assigns Level 1, the highest level, measurements to valuations based upon unadjusted quoted prices in active markets for identical assets, Level 2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar assets, and Level 3, the lowest level, measurements to valuations based upon unobservable inputs that are significant to the valuation. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best
142 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
information available in the circumstances. A financial instrument's level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. Open-end mutual funds are valued at the respective net asset value ("NAV") as reported by such company. The prospectuses for the registered open-end management investment companies in which a Fund invests explain the circumstances under which those companies will use fair value pricing and the effects of using fair value pricing. Closed-end funds and exchange-traded funds ("ETFs") are valued at the market price of the security at the Valuation Time. A security using any of these pricing methodologies is determined to be a Level 1 investment.
Foreign equity securities that are traded on foreign exchanges that close prior to the Valuation Time are valued by applying valuation factors to the last sale price or the mean price as noted above. Valuation factors are provided by an independent pricing service provider approved by the Board. These valuation factors are used when pricing a Fund's portfolio holdings to estimate market movements between the time foreign markets close and the time a Fund values such foreign securities. These valuation factors are based on inputs such as depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. When prices with the application of valuation factors are utilized, the value assigned to the foreign securities may not be the same as quoted or published prices of the securities on their primary markets. A security that applies a valuation factor is determined to be a Level 2 investment because the exchange-traded price has been adjusted. Valuation factors are not utilized if the independent pricing service provider is unable to provide a valuation factor or if the valuation factor falls below a predetermined threshold; in such case, the security is determined to be a Level 1 investment.
Long-term debt and other fixed income securities are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service provider approved by the Board of Trustees of the Trust (the "Board"). If there are no current day bids, the security is valued at the previously applied bid. Pricing services generally price debt securities assuming orderly transactions of an institutional "round lot" size, and the strategies employed by Aberdeen Standard Investments, Inc. (formerly, Aberdeen Asset Management Inc.) ("Aberdeen", the "Adviser" or "ASII") generally trade in round lot sizes. In certain circumstances, fixed income securities may be held or transactions may be conducted in smaller, "odd lot" sizes. Odd lots may trade at lower or, occasionally, higher prices than institutional round lot trades. Short-term debt securities (such as commercial paper and U.S. treasury bills) having a remaining maturity of 60 days or less are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service, or on the basis of amortized cost if it represents the best approximation for fair value. Debt and other fixed-income securities are generally determined to be Level 2 investments.
Short-term investments are comprised of cash and cash equivalents invested in short-term investment funds which are redeemable daily. Each Fund sweeps available cash into the State Street Institutional U.S. Government Money Market Fund, which has elected to qualify as a "government money market fund" pursuant to Rule 2a-7 under the 1940 Act, and has an objective, which is not guaranteed, to maintain a $1.00 NAV. Generally, these investment types are categorized as Level 1 investments.
Forward foreign currency contracts are generally valued based on the bid price of the forward rates and the current spot rate. Forward exchange rate quotations are available for scheduled settlement dates, such as 1-, 3-, 6-, 9- and 12-month periods. An interpolated valuation is derived based on the actual settlement dates of the forward contracts held. Futures contracts are valued at the settlement price or at the last bid price if no settlement price is available. Interest rate swaps agreements are generally valued by an approved pricing agent based on the terms of the swap agreement (including future cash flows).
In the event that a security's market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange on which it trades closed before the Valuation Time), the security is valued at fair value as determined by the Funds' pricing committee (the "Pricing Committee"), taking into account the relevant factors and surrounding circumstances using Valuation and Liquidity Procedures approved by the Board. A security that has been fair valued by the Pricing Committee may be classified as Level 2 or Level 3 depending on the nature of the inputs.
The three-level hierarchy of inputs is summarized below:
• | Level 1 – quoted prices in active markets for identical investments; |
• | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or |
• | Level 3 – significant unobservable inputs (including a Fund's own assumptions in determining the fair value of investments). |
A summary of standard inputs is listed below:
Security Type | Standard Inputs | |
Foreign equities utilizing a fair value factor | Depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. |
2020 Annual Report | 143 |
Notes to Financial Statements (continued)
October 31, 2020
The following is a summary of the inputs used as of October 31, 2020 in valuing the Funds' investments at fair value. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Please refer to the Statements of Investments for a detailed breakout of the security types:
Investments, at Value | LEVEL 1 – Quoted Prices ($) | LEVEL 2 – Other Significant Observable Inputs ($) | LEVEL 3 – Significant Unobservable Inputs ($) | Total ($) | ||||||||||||
Asia-Pacific (ex-Japan) Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 161,306 | 5,359,734 | – | 5,521,040 | ||||||||||||
Preferred Stocks | – | 480,837 | – | 480,837 | ||||||||||||
Short-Term Investment | 127,059 | – | – | 127,059 | ||||||||||||
288,365 | 5,840,571 | – | 6,128,936 | |||||||||||||
China A Share Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 11,241 | 17,631,109 | – | 17,642,350 | ||||||||||||
Exchange-Traded Funds | 600,248 | – | – | 600,248 | ||||||||||||
Short-Term Investment | 1,832,781 | – | – | 1,832,781 | ||||||||||||
2,444,270 | 17,631,109 | – | 20,075,379 | |||||||||||||
Dynamic Dividend Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 58,969,948 | 42,129,525 | – | 101,099,473 | ||||||||||||
Preferred Stocks | – | 1,921,747 | – | 1,921,747 | ||||||||||||
Short-Term Investment | 685,890 | – | – | 685,890 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Assets | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | – | 22,574 | – | 22,574 | ||||||||||||
59,655,838 | 44,073,846 | – | 103,729,684 | |||||||||||||
Emerging Markets Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 511,749,339 | 3,045,922,919 | – | 3,557,672,258 | ||||||||||||
Preferred Stocks | 87,708,744 | 322,375,356 | – | 410,084,100 | ||||||||||||
Short-Term Investment | 45,168,681 | – | – | 45,168,681 | ||||||||||||
644,626,764 | 3,368,298,275 | – | 4,012,925,039 | |||||||||||||
Focused U.S. Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 13,887,025 | – | – | 13,887,025 | ||||||||||||
Short-Term Investment | 36,170 | – | – | 36,170 | ||||||||||||
13,923,195 | – | – | 13,923,195 |
144 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
Investments, at Value | LEVEL 1 – Quoted Prices ($) | LEVEL 2 – Other Significant Observable Inputs ($) | LEVEL 3 – Significant Unobservable Inputs ($) | Total ($) | ||||||||||||
Global Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 13,257,877 | 11,713,376 | – | 24,971,253 | ||||||||||||
Short-Term Investment | 282,715 | – | – | 282,715 | ||||||||||||
13,540,592 | 11,713,376 | – | 25,253,968 | |||||||||||||
Global Infrastructure Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 22,492,043 | 18,898,628 | – | 41,390,671 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Assets | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | – | 208 | – | 208 | ||||||||||||
Liabilities | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | – | (366 | ) | – | (366 | ) | ||||||||||
22,492,043 | 18,898,470 | – | 41,390,513 | |||||||||||||
International Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 23,770,945 | 192,147,961 | – | 215,918,906 | ||||||||||||
Short-Term Investment | 2,583,701 | – | – | 2,583,701 | ||||||||||||
26,354,646 | 192,147,961 | – | 218,502,607 | |||||||||||||
International Real Estate Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 2,756,989 | 17,770,877 | 2 | 20,527,868 | ||||||||||||
Short-Term Investment | 19,302 | – | – | 19,302 | ||||||||||||
2,776,291 | 17,770,877 | 2 | 20,547,170 | |||||||||||||
International Small Cap Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 36,778,226 | 99,015,672 | – | 135,793,898 | ||||||||||||
Short-Term Investment | 3,057,324 | – | – | 3,057,324 | ||||||||||||
39,835,550 | 99,015,672 | – | 138,851,222 | |||||||||||||
Realty Income & Growth Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 48,134,436 | – | – | 48,134,436 | ||||||||||||
Short-Term Investment | 1,249,869 | – | – | 1,249,869 | ||||||||||||
49,384,305 | – | – | 49,384,305 |
2020 Annual Report | 145 |
Notes to Financial Statements (continued)
October 31, 2020
Investments, at Value | LEVEL 1 – Quoted Prices ($) | LEVEL 2 – Other Significant Observable Inputs ($) | LEVEL 3 – Significant Unobservable Inputs ($) | Total ($) | ||||||||||||
U.S. Mid Cap Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 2,179,719 | – | – | 2,179,719 | ||||||||||||
Money Market Funds | 18,224 | – | – | 18,224 | ||||||||||||
2,197,943 | – | – | 2,197,943 | |||||||||||||
U.S. Multi-Cap Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 386,437,107 | – | – | 386,437,107 | ||||||||||||
Short-Term Investment | 12,730,716 | – | – | 12,730,716 | ||||||||||||
399,167,823 | – | – | 399,167,823 | |||||||||||||
U.S. Small Cap Equity Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | 723,290,727 | – | – | 723,290,727 | ||||||||||||
Money Market Funds | 6,716,925 | – | – | 6,716,925 | ||||||||||||
730,007,652 | – | – | 730,007,652 |
For the fiscal year ended October 31, 2020, there were no significant changes to the fair valuation methodologies.
b. | Restricted Securities |
Restricted securities are privately-placed securities whose resale is restricted under U.S. securities laws. The Funds may invest in restricted securities, including unregistered securities eligible for resale without registration pursuant to Rule 144A and privately-placed securities of U.S. and non-U.S. issuers offered outside the U.S. without registration pursuant to Regulation S under the Securities Act of 1933, as amended. Rule 144A securities may be freely traded among certain qualified institutional investors, such as the Funds, but resale of such securities in the U.S. is permitted only in limited circumstances.
c. | Foreign Currency Translation |
Foreign securities, currencies and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of the Valuation Time, as provided by an independent pricing service. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective date of these transactions. The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies within the Statements of Operations.
d. | Rights Issues and Warrants |
Rights issues give the right, normally to existing shareholders, to buy a proportional number of additional securities at a given price (generally at a discount) within a fixed period (generally a short-term period) and are offered at the company's discretion. Warrants are securities that give the holder the right to buy common stock at a specified price for a specified period of time. Rights issues and warrants are speculative and have no value if they are not exercised before the expiration date. Rights issues and warrants are valued at the last sale price on the exchange on which they are traded.
e. | Derivative Financial Instruments |
Certain Funds are authorized to use derivatives to manage currency risk, credit risk, and interest rate risk and to replicate, or use as a substitute for, physical securities. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities.
146 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
Forward Foreign Currency Exchange Contracts |
A forward foreign currency exchange contract ("forward contract") involves an obligation to purchase and sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Forward contracts are used to manage a Fund's currency exposure in an efficient manner. They are used to sell unwanted currency exposure that comes with holding securities in a market, or to buy currency exposure where the exposure from holding securities is insufficient to give the desired currency exposure either in absolute terms or relative to the benchmark. The use of forward contracts allows the separation of decision-making between markets and their currencies. The forward contract is marked-to market daily and the change in market value is recorded by a Fund as unrealized appreciation/(depreciation). Forward contracts' prices are received daily from an independent pricing provider. When the forward contract is closed, a Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. These realized and unrealized gains and losses are reported on the Statements of Operations. During the year, the Funds used forward contracts for the purposes of efficient portfolio management and managing active currency risk relative to the benchmark, the latter of which involves both hedging currency risk and adding currency risk in excess of underlying bond positions.
While a Fund may enter into forward contracts to seek to reduce currency exchange rate risks, transactions in such contracts involve certain risks. A Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in exchange rates. Thus, while a Fund may benefit from such transactions, unanticipated changes in currency prices may result in a poorer overall performance for a Fund than if it had not engaged in any such transactions. Moreover, there may be an imperfect correlation between a Fund's portfolio holdings or securities quoted or denominated in a particular currency and forward contracts entered into by the Fund. Such imperfect correlation may prevent a Fund from achieving a complete hedge, which will expose the Fund to the risk of foreign exchange loss.
Forward contracts are subject to the risk that the counterparties to such contracts may default on their obligations. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearing house, a default on the contract would deprive a Fund of unrealized profits, transaction costs or the benefits of a currency hedge or force a Fund to cover its purchase or sale commitments, if any, at the market price at the time of the default.
Summary of Derivative Instruments |
Certain Funds may use derivatives for various purposes as noted above. The following is a summary of the location of fair value amounts of derivatives, not accounted for as hedging instruments, as of October 31, 2020:
Location on the Statement of Assets and Liabilities | ||||
Derivative Instrument Risk Type | Asset Derivatives | Liability Derivatives | ||
Foreign Exchange Risk | Unrealized appreciation on forward foreign currency exchange contracts | Unrealized depreciation on forward foreign currency exchange contracts |
The following is a summary of the fair value of derivative instruments, not accounted for as hedging instruments, as of October 31, 2020:
Asset Derivatives | |||||||||||||
Funds | Total Value at October 31, 2020 | Over-the-Counter Credit Default Swaps (Credit risk) | Centrally Cleared Credit Default Swaps (Credit Risk) | Centrally Cleared Interest Rate Swaps (Interest Rate Risk) | Forward Foreign Exchange Contracts (Foreign Exchange Risk) | Futures Contracts (Interest Rate Risk) | |||||||
Aberdeen Dynamic Dividend Fund | $22,574 | $– | $– | $– | $22,574 | $– | |||||||
Aberdeen Global Infrastructure Fund | 208 | – | – | – | 208 | – |
2020 Annual Report | 147 |
Notes to Financial Statements (continued)
October 31, 2020
Liabilities Derivatives | |||||||||||||
Funds | Total Value at October 31, 2020 | Over-the-Counter Credit Default Swaps (Credit risk) | Centrally Cleared Credit Default Swaps (Credit Risk) | Centrally Cleared Interest Rate Swaps (Interest Rate Risk) | Forward Foreign Exchange Contracts (Foreign Exchange Risk) | Futures Contracts (Interest Rate Risk) | |||||||
Aberdeen Global Infrastructure Fund | $366 | $– | $– | $– | $366 | $– |
Certain funds have transactions that may be subject to enforceable master netting arrangements. A reconciliation of the gross amounts on the Statements of Assets and Liabilities as of October 31, 2020 to the net amounts by broker and derivative type, including any collateral received or pledged, is included in the following tables:
Gross Amounts Not Offset in Statement of Assets & Liabilities | Gross Amounts Not Offset in Statement of Assets and Liabilities | ||||||||||||||||
Gross Amounts of Assets Presented in Statement of Financial Position | Financial Instruments | Collateral Received(1) | Net Amount(3) | Gross Amounts of Liabilities Presented in Statement of Financial Position | Financial Instruments | Collateral Pledged(1) | Net Amount(3) | ||||||||||
Description | Assets | Liabilities | |||||||||||||||
Dynamic Dividend Fund | |||||||||||||||||
Forward foreign currency(2) State Street Bank and Trust | $22,574 | $– | $– | $22,574 | $– | $– | $– | $– |
1. | In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization. |
2. | Includes financial instrument which are not subject to a master netting arrangement across funds, or another similar arrangement. |
3. | Net amounts represent the net receivables/(payable) that would be due from/to the counterparty in the event of default. Exposure from financial derivative instruments can only be netted across transactions governed under the same master netting agreement with the same legal entity. |
Gross Amounts Not Offset in Statement of Assets & Liabilities | Gross Amounts Not Offset in Statement of Assets and Liabilities | ||||||||||||||||
Gross Amounts of Assets Presented in Statement of Financial Position | Financial Instruments | Collateral Received(1) | Net Amount(3) | Gross Amounts of Liabilities Presented in Statement of Financial Position | Financial Instruments | Collateral Pledged(1) | Net Amount(3) | ||||||||||
Description | Assets | Liabilities | |||||||||||||||
Global Infrastructure Fund | |||||||||||||||||
Forward foreign currency(2) Goldman Sachs & Co. | $208 | $(208) | $– | $– | $366 | $(208) | $– | $158 |
1. | In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization. |
2. | Includes financial instrument which are not subject to a master netting arrangement across funds, or another similar arrangement. |
3. | Net amounts represent the net receivables/(payable) that would be due from/to the counterparty in the event of default. Exposure from financial derivative instruments can only be netted across transactions governed under the same master netting agreement with the same legal entity. |
The following is a summary of the location of realized gain/(loss) and net change in unrealized appreciation/(depreciation) on derivatives in the Statement of Operations for the fiscal year ended October 31, 2020:
Derivative Instrument Risk Type | Location on the Statement of Operations | |
Foreign Exchange Risk | Realized gain/(loss) on forward foreign currency exchange contracts/ Net change in unrealized appreciation/(depreciation) on forward foreign currency exchange contracts |
148 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
The following is a summary of the effect of derivative instruments on the Statement of Operations for the fiscal year ended October 31, 2020:
Realized Gain or (Loss) on Derivatives Recognized in the Statement of Operations | |||||||||||||||||||
Funds | Total | Credit Default Swaps (Credit Risk) | Interest Rate Swaps (Interest Rate Risk) | Forward Foreign Exchange Contracts (Foreign Exchange Risk) | Futures Contracts (Interest Rate Risk) | ||||||||||||||
Aberdeen Dynamic Dividend Fund | $(119,696 | ) | $– | $– | $(119,696 | ) | $– | ||||||||||||
Aberdeen Global Infrastructure Fund | (87,335 | ) | – | – | (87,335 | ) | – | ||||||||||||
Aberdeen International Real Estate Equity Fund | 9,806 | – | – | 9,806 | – |
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in the Statement of Operations | |||||||||||||||
Funds | Total | Credit Default Swaps (Credit Risk) | Forward Foreign Exchange Contracts (Foreign Exchange Risk) | Futures Contracts (Interest Rate Risk) | |||||||||||
Aberdeen Dynamic Dividend Fund | $59,158 | $– | $59,158 | $– | |||||||||||
Aberdeen Global Infrastructure Fund | 2,314 | – | 2,314 | – |
Information about derivatives reflected as of the date of this report is generally indicative of the type of activity for the fiscal year ended October 31, 2020. The table below summarizes the weighted average values of derivatives holdings by the Funds during the fiscal year ended October 31, 2020.
Fund | Purchase Forward Foreign Currency Contracts (Average Notional Value) | Sale Forward Foreign Currency Contracts (Average Notional Value) | ||||
Dynamic Dividend Fund | $ – | $2,904,490 | ||||
Global Infrastructure Fund | 2,127,298 | 6,056,273 | ||||
International Real Estate Equity Fund | 279,319 | 8,811 |
f. | Security Transactions, Investment Income and Expenses |
Security transactions are recorded on the trade date. Realized and unrealized gains/(losses) from security and currency transactions are calculated on the identified cost basis. Dividend income and corporate actions are recorded generally on the ex-date, except for certain dividends and corporate actions which may be recorded after the ex-date, as soon as a Fund acquires information regarding such dividends or corporate actions.
Interest income and expenses are recorded on an accrual basis. Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among the relevant Funds based on net assets of each Fund as of month-end. For each of the Funds, the method for allocating income, fund level expenses, and realized and unrealized gains or losses to a class is based on the average net asset value of that class' shares in proportion to the average net assets of the relevant Fund when incurred. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
g. | Distributions |
Distributions from net investment income, if any, are declared and paid annually for all Funds except the Dynamic Dividend Fund, which declares and pays monthly, and the Global Infrastructure Fund and Realty Income & Growth Fund, which declare and pay quarterly. The Funds
2020 Annual Report | 149 |
Notes to Financial Statements (continued)
October 31, 2020
will also declare and pay distributions at least annually from net realized gains on investment transactions and net realized foreign exchange gains, if any. Dividends and distributions to shareholders are recorded on the ex-dividend date. The Funds will also declare and pay distributions at least annually from net realized gains on investment transactions and net realized foreign exchange gains, if any.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments for foreign currencies and loss deferrals.
h. | Federal Income Taxes |
Each Fund intends to continue to qualify as a "regulated investment company" by complying with the provisions available to certain investment companies, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Funds from all federal income taxes. Therefore, no federal income tax provision is required. Management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Since tax authorities can examine previously filed tax returns, the Funds' U.S. federal and state tax returns for each of the most recent four fiscal years up to the most recent fiscal year ended October 31, 2020 are subject to such review.
i. | Foreign Withholding Tax |
Dividend and interest income from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes and are recorded on the Statement of Operations. The Fund files for tax reclaims for the refund of such withholdings taxes according to tax treaties. Tax reclaims that are deemed collectible are booked as tax reclaim receivable on the Statement of Assets and Liabilities. Foreign tax authorities can examine previously filed withholding tax reclaims for various periods of time, depending on the statue of limitations in each foreign jurisdiction. In some cases, amounts that have been refunded by foreign tax authorities and received by the Funds are still subject to such review.
The Dynamic Dividend Fund has received requests from the German Federal Tax Office for additional documents and information relating to withholding tax refunds that the Fund has previously received and recorded. The tax refunds previously received amount to approximately 0.95% of the Fund's net assets as of October 31, 2020. The Fund may be required to return certain amounts or pay a settlement in connection with this request. The amount of such potential repayment or settlement is uncertain and management cannot make an estimate at this time, and as such, has not recorded any amount in the financial statements. The Fund's net asset value and performance may be materially adversely affected if such repayment or settlement is determined at a future date.
In addition, the Fund may be subject to capital gains tax in certain countries in which it invests. The above taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties with some of these countries. The Fund accrues such taxes when the related income is earned.
In addition, when the Fund sells securities within certain countries in which it invests, the capital gains realized may be subject to tax. Based on these market requirements and as required under GAAP, the Fund accrues deferred capital gains tax on securities currently held that have unrealized appreciation within these countries. The amount of deferred capital gains tax accrued is reported on the Statement of Operations as part of the Net Change in Unrealized Appreciation/Depreciation on Investments.
j. | Securities Lending |
Through an agreement with BNP Paribas as the Lending Agent and State Street Bank and Trust Company (the Funds' custodian), the Funds may lend their portfolio securities to brokers, dealers and other financial institutions that pay a negotiated fee in order to generate additional income. The Funds receive non-cash collateral in the form of U.S. Government Securities, with respect to each loan of U.S. securities, typically equal to at least 102% of the value of the portfolio securities loaned, and, with respect to each loan of non-U.S. securities, typically equal to at least 105% of the value of the portfolio securities loaned, and at all times thereafter require the borrower to mark to market such collateral on a daily basis so that the market value of such collateral does not fall below 100% of the market value of the portfolio securities so loaned.
Income generated from securities lending includes the difference between (i) the sum of income received from the investment of collateral received from the borrowers that are counterparties to loans, loan fees received from loans, and fees paid by borrower on loans collateralized with collateral other than cash collateral; and ii) any rebate paid to a borrower, and any other allocable fees and expenses in connection with loans of securities. All income is accrued daily and is apportioned 90% to the Funds and 10% to the Lending Agent.
The Funds continue to own the loaned securities. However, securities lending involves certain risks including the event of default or insolvency of the borrower and possible delays or restrictions upon a Fund's ability to recover the loaned securities or dispose of the collateral for the loan. Securities on loan are noted within the Statement of Investments. Non-cash securities lending collateral held by the Lending Agent on behalf of the Funds cannot be sold or repledged by the Funds and, therefore, this amount is not presented on the Funds' Statements of Investments.
150 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
At October 31, 2020, the market value of loaned securities and collateral received were as follows:
Fund | Value of Securities Loaned | Value of Cash Collateral | Value of Non-cash Collateral | |||
Emerging Markets Fund | $13,874,900 | $– | $14,272,753 | |||
Global Infrastructure Fund | 221,707 | – | 226,394 | |||
U.S. Multi-Cap Equity Fund | 375,900 | – | 468,548 | |||
U.S. Small Cap Equity Fund | 27,073,033 | – | 27,651,471 |
3. Agreements and Transactions with Affiliates
a. | Investment Adviser |
Under the Investment Advisory Agreement with the Trust, Aberdeen manages the Funds in accordance with the policies and procedures established by the Board.
For services provided under the terms of the current Investment Advisory Agreement, each Fund pays the Adviser an annual management fee (as a percentage of its average daily net assets) paid monthly according to the following schedule:
Fund | Fee Schedule | ||
Asia-Pacific (ex-Japan) Equity Fund | On all assets | 1.00 | % |
China A Share Equity Fund | Up to $500 million | 0.85 | % |
$500 million up to $2 billion | 0.80 | % | |
On $2 billion and more | 0.75 | % | |
Dynamic Dividend Fund | Up to $250 million | 1.00 | % |
On $250 million and more | 0.95 | % | |
Emerging Markets Fund | On all assets | 0.90 | % |
Focused U.S. Equity Fund | Up to $500 million | 0.75 | % |
$500 million up to $2 billion | 0.70 | % | |
On $2 billion and more | 0.65 | % | |
Global Equity Fund | Up to $500 million | 0.90 | % |
$500 million up to $2 billion | 0.85 | % | |
On $2 billion and more | 0.80 | % | |
Global Infrastructure Fund† | Up to $250 million | 0.85 | % |
$250 million up to $750 million | 0.80 | % | |
$750 million to $1 billion | 0.75 | % | |
On $1 billion and more | 0.65 | % | |
International Equity Fund | On all assets | 0.80 | % |
International Real Estate Equity Fund | On all assets | 1.00 | % |
International Small Cap Fund†† | Up to $100 million | 0.85 | % |
On $100 million and more | 0.75 | % | |
Realty Income & Growth Fund | Up to $250 million | 1.00 | % |
$250 million up to $750 million | 0.95 | % | |
$750 million up to $1 billion | 0.90 | % | |
On $1 billion and more | 0.80 | % | |
U.S. Mid Cap Equity Fund | Up to $500 million | 0.75 | % |
$500 million up to $2 billion | 0.70 | % | |
On $2 billion and more | 0.65 | % | |
U.S. Multi-Cap Equity Fund | Up to $500 million | 0.75 | % |
$500 million up to $2 billion | 0.70 | % | |
On $2 billion and more | 0.65 | % | |
U.S. Small Cap Equity Fund | Up to $100 million | 0.95 | % |
On $100 million and more | 0.80 | % |
† | Fee rate effective February 28, 2020. Prior to February 28, 2020, the management fee rate for the Fund was 0.85% on assets up to $250 million, 0.80% on assets of $250 million up to $750 million, 0.75% on assets of $750 million up to $1 billion and 0.70% on assets in excess of $1 billion.. |
†† | Fee rate effective February 28, 2020. Prior to February 28, 2020, the management fee rate for the Fund was 1.00% on assets up to $100 million and 0.90% on assets in excess of $100 million. |
2020 Annual Report | 151 |
Notes to Financial Statements (continued)
October 31, 2020
The Adviser has engaged the services of affiliates Aberdeen Standard Investments (Asia) Limited ("ASIAL") and Aberdeen Asset Managers Limited ("AAML") as subadvisers (the "Subadvisers") pursuant to subadvisory agreements. The Subadvisers manage a portion of certain Funds' investments and have the responsibility for making all investment decisions for the portion of a Fund's assets they manage. Pursuant to the subadvisory agreements, the Adviser pays fees to the Subadvisers.
The Trust and Aberdeen have entered into written contracts ("Expense Limitation Agreements") limiting operating expenses for all classes of the Funds from exceeding the amounts listed in the tables below. For each Fund this contractual limitation may not be terminated before February 28, 2021 without the approval of the Trustees who are not "interested persons" of the Trust, as such term is defined by the 1940 Act (the "Independent Trustees"). For each Fund except the Dynamic Dividend Fund and Global Infrastructure Fund, this limit excludes certain expenses, including any taxes, interest, brokerage fees, short-sale dividend expenses, acquired fund fees and expenses, Rule 12b-1 fees, administrative services fees, transfer agent out-of-pocket expenses for Class A shares, Class R shares, and Institutional Service Class shares and extraordinary expenses. The Expense Limitation Agreement with respect to the Dynamic Dividend Fund and Global Infrastructure Fund excludes certain expenses, including any interest, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses.
Fund | Limit | |
Asia-Pacific (ex-Japan) Equity Fund | 1.25% | |
China A Share Equity Fund | 0.99% | |
Emerging Markets Fund | 1.10% | |
Focused U.S. Equity Fund | 0.90% | |
Global Equity Fund | 1.19% | |
International Equity Fund | 1.10% | |
International Small Cap Fund * | 0.99% | |
U.S. Mid Cap Equity Fund | 1.00% | |
U.S. Multi-Cap Equity Fund | 0.90% | |
U.S. Small Cap Equity Fund* | 0.99% |
* | Prior to February 28, 2020, the Fund's expense limit was 1.15% |
Fund | Class A Limit | Institutional Class Limit | ||
Dynamic Dividend Fund | 1.50% | 1.25% | ||
Global Infrastructure Fund* | 1.24% | 0.99% | ||
International Real Estate Equity Fund | 1.62% | 1.37% | ||
Realty Income & Growth Fund | 1.25% | 1.00% |
* | Prior to February 28, 2020, the Fund's expense limit was 1.45% for Class A and 1.20% for the Institutional Class. |
Aberdeen may request and receive reimbursement from a Fund of the advisory fees waived and other expenses reimbursed pursuant to the Expense Limitation Agreement as of a date not more than three years after the date when the Adviser limited the fees or reimbursed the expenses; provided that the following requirements are met: the reimbursements do not cause a class to exceed the lesser of the applicable expense limitation in the contract at the time the fees were limited or expenses are paid or the applicable expense limitation in effect at the time the expenses are being recouped by the Adviser, and the payment of such reimbursement is approved by the Board on a quarterly basis (the "Reimbursement Requirements"). Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by Aberdeen is not permitted.
As of October 31, 2020, to the extent the Reimbursement Requirements are met, the cumulative potential reimbursements to Aberdeen for each Fund, based on expenses reimbursed by Aberdeen, including adjustments described above, would be:
Fund | Amount Fiscal Year 2018 (Expires 10/31/21) | Amount Fiscal Year 2019 (Expires 10/31/22) | Amount Fiscal Year 2020 (Expires 10/31/23) | Total* | ||||
Asia-Pacific (ex-Japan) Equity Fund | $ 178,193 | $ 207,677 | $ 191,646 | $ 577,516 | ||||
China A Share Equity Fund | 147,796 | 185,225 | 194,764 | 527,785 | ||||
Dynamic Dividend Fund | 78,360 | 110,958 | 114,147 | 303,465 |
152 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
Fund | Amount Fiscal Year 2018 (Expires 10/31/21) | Amount Fiscal Year 2019 (Expires 10/31/22) | Amount Fiscal Year 2020 (Expires 10/31/23) | Total* | ||||
Emerging Markets Fund | $3,091,591 | $2,912,999 | $2,887,668 | $8,892,258 | ||||
Focused U.S. Equity Fund | 159,543 | 175,904 | 164,571 | 500,018 | ||||
Global Equity Fund | 159,483 | 177,160 | 173,186 | 509,829 | ||||
Global Infrastructure Fund | 72,598 | 115,230 | 162,223 | 350,051 | ||||
International Equity Fund | 217 | 25,257 | 32,170 | 57,644 | ||||
International Real Estate Equity Fund | 11,346 | 30,943 | 134,634 | 176,923 | ||||
International Small Cap Fund | 279,762 | 302,551 | 291,518 | 873,831 | ||||
Realty Income & Growth Fund | 160,149 | 287,856 | 254,885 | 702,890 | ||||
U.S. Mid Cap Equity Fund | 138,037 | 149,005 | 142,803 | 429,845 | ||||
U.S. Multi-Cap Equity Fund | 244,458 | 284,126 | 257,392 | 785,976 | ||||
U.S. Small Cap Equity Fund | – | – | 327,286 | 327,286 |
* | Amounts reported are due to expire throughout the respective 3-year expiration period presented above. |
Amounts listed as "–" are $0 or round to $0.
b. | Fund Administration |
Under the terms of the Fund Administration Agreement, Aberdeen provides various administrative and accounting services, including daily valuation of the Funds' shares, preparation of financial statements, tax returns, regulatory reports, and presentation of quarterly reports to the Board. For services provided pursuant to the Fund Administration Agreement, the Trust pays Aberdeen an annual fee of 0.08% based on the Trust's average daily net assets. The fee is then allocated proportionately among all funds within the Trust (including the Funds) in relation to the average daily net assets of each fund. This asset-based fee is subject to an annual minimum fee based on the number of funds served. Pursuant to a sub-administration agreement with Aberdeen, State Street Bank and Trust Company ("State Street") provides sub-administration services with respect to the Funds. Aberdeen pays State Street for providing such services.
c. | Distributor and Shareholder Servicing |
The Trust and Aberdeen Fund Distributors, LLC (the "Distributor") are parties to the current Underwriting Agreement (the "Underwriting Agreement") whereby the Distributor acts as principal underwriter for the Trust's shares.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to certain classes of shares. The Plan permits the Funds to compensate the Distributor, for expenses associated with the distribution-related and/or shareholder services provided by such entities. These fees are paid to the Distributor and are either kept or paid to shareholders' financial advisors or other intermediaries for distribution and shareholder services. Although actual distribution expenses may be more or less, under the Plan, the Funds pay the Distributor an annual fee of the following amounts, based on the total net assets of each, respective class:
Fund | Class A Shares | Class C Shares (a) | Class R Shares (a) | |||||
Asia-Pacific (ex-Japan) Equity Fund | 0.25% | 1.00% | (b) | 0.50% | ||||
China A Share Equity Fund | 0.25% | 1.00% | 0.50% | |||||
Dynamic Dividend Fund | 0.25% | – | – | |||||
Emerging Markets Fund | 0.25% | 1.00% | 0.50% | |||||
Focused U.S. Equity Fund | 0.25% | 1.00% | 0.50% | |||||
Global Equity Fund | 0.25% | 1.00% | 0.50% | |||||
Global Infrastructure Fund | 0.25% | – | – | |||||
International Equity Fund | 0.25% | 1.00% | 0.50% | |||||
International Real Estate Equity Fund | 0.25% | – | – | |||||
International Small Cap Fund | 0.25% | 1.00% | 0.50% | |||||
Realty Income & Growth Fund | 0.25% | – | – | |||||
U.S. Mid Cap Equity Fund | 0.25% | 1.00% | 0.50% |
2020 Annual Report | 153 |
Notes to Financial Statements (continued)
October 31, 2020
Fund | Class A Shares | Class C Shares (a) | Class R Shares (a) | |||||||||
U.S. Multi-Cap Equity Fund | 0.25 | % | 1.00 | % | 0.50 | % | (b) | |||||
U.S. Small Cap Equity Fund | 0.25 | % | 1.00 | % | 0.50 | % |
(a) | 0.25% of which is service fees. |
(b) | Class no longer offered. Annualized rate above was charged to the class during the time period that the class was offered. |
The Adviser or an affiliate of the Adviser may pay additional amounts from its own resources to dealers or other financial intermediaries, for aid in distribution or for aid in providing administrative services to shareholders.
Pursuant to the current Underwriting Agreement, the Distributor will also receive the proceeds of contingent deferred sales charges ("CDSCs") of 1.00% imposed on certain redemptions of Class C (and up to 1.00% for certain Class A) shares.
In addition, the Distributor will re-allow to dealers 5.00% of sales charges on Class A shares of the Funds, which have a maximum front-end sales charge of 5.75% and the Distributor or the Adviser may compensate broker dealers or financial intermediaries from its own resources at the rate of 1.00% on sales of Class C shares of the Funds, which have a maximum CDSC of 1.00% (the CDSC assessed on sales within one year of purchase). The amount the Distributor retained for commissions from front-end sales charges and CDSC fees for the fiscal year ended October 31, 2020 was as follows:
Fund | Commissions retained from front-end sales charges of Class A shares | Commissions retained from CDSC fees of Class C (and certain Class A) shares | ||
China A Share Equity Fund | $ 7,647 | $ 1,485 | ||
Dynamic Dividend Fund | 25,448 | – | ||
Emerging Markets Fund | 12,392 | 16,269 | ||
Focused U.S. Equity Fund | 6,442 | 7,094 | ||
Global Equity Fund | 1,264 | 2 | ||
Global Infrastructure Fund | 10,179 | – | ||
International Equity Fund | 466 | 21 | ||
International Small Cap Fund | 9,113 | 1,397 | ||
Realty Income & Growth Fund | 6,237 | – | ||
U.S. Multi-Cap Equity Fund | 31,512 | – | ||
U.S. Small Cap Equity Fund | 56,537 | 3,981 | ||
Total Retained | $167,237 | $30,249 |
d. | Administrative Services Fees/Transfer Agent Out-of-Pocket Expenses |
The Funds may pay and/or reimburse administrative services fees/transfer agent out-of-pocket expenses to certain broker-dealers and financial intermediaries who provide administrative support services to beneficial shareholders on behalf of the Funds (sometimes referred to as "sub-transfer agency fees"), subject to certain limitations approved by the Board. These fees may be in addition to Rule 12b-1 fees. Sub-transfer agency fees generally include, but are not limited to, costs associated with omnibus accounting, recordkeeping, networking, sub-transfer agency or other administrative or shareholder services.
Class A, Class R and Institutional Service Class shares of the Funds pay for such services pursuant to an Administrative Services Plan adopted by the Board. Under the Administrative Services Plan, a Fund may pay a broker-dealer or other intermediary a maximum annual administrative services fee of 0.25% for Class A, Class R and Institutional Service Class shares. Under an amendment to the Administrative Services Plan that is in effect until at least February 28, 2021, a Fund may pay a maximum of 0.15% for contracts with fees that are calculated as a percentage of Fund assets and a maximum of $16 per account for contracts with fees that are calculated on a dollar per account basis. Class C and Institutional Class shares may also pay for the services described above directly, as these classes are not subject to an Administrative Services Plan.
154 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
The aggregate amount of sub-transfer agent and administrative service fees paid during the fiscal year ended October 31, 2020 was as follows:
Fund | Class A | Class C | Class R | Institutional Service | Institutional | ||||||
Asia-Pacific (ex-Japan) Equity Fund | $ 277 | $ 11 | $ – | $ 1,717 | $ 4,427 | ||||||
China A Share Equity Fund | 6,432 | 947 | 3,553 | 503 | 3,126 | ||||||
Dynamic Dividend Fund | 3,185 | – | – | 78,199 | |||||||
Emerging Markets Fund | 284,871 | 12,231 | 153,087 | 451,612 | 3,169,656 | ||||||
Focused U.S. Equity Fund | 6,770 | 2,215 | 620 | 611 | 5,859 | ||||||
Global Equity Fund | 21,613 | 909 | 2,447 | 258 | 750 | ||||||
Global Infrastructure Fund | 8,063 | – | – | – | 30,852 | ||||||
International Equity Fund | 34,290 | 3,537 | 5,159 | 53,030 | 42,553 | ||||||
International Real Estate Equity Fund | 110 | – | – | – | 32,657 | ||||||
International Small Cap Fund | 85,210 | 805 | 2,975 | 24 | 33,074 | ||||||
Realty Income & Growth Fund | 999 | – | – | – | 42,480 | ||||||
U.S. Mid Cap Equity Fund | – | – | – | – | – | ||||||
U.S. Multi-Cap Equity Fund | 103,565 | 1,537 | 12 | 80,700 | 4,471 | ||||||
U.S. Small Cap Equity Fund | 200,835 | 40,594 | 10,292 | 45,214 | 546,859 |
e. Purchase/Sale Transactions Between Affiliates
The Funds are permitted to buy or sell securities with funds that have a common investment adviser (or investment advisers which are affiliates) under specific procedures which have been approved by the Board. The procedures are designed to satisfy the requirements of Rule 17a-7 of the Investment Company Act of 1940 ("Rule 17a-7"). During the year ended October 31, 2020, the Funds did not engage in any of these trades.
4. Investment Transactions
Purchases and sales of securities (excluding short-term securities) for the fiscal year ended October 31, 2020, were as follows:
Fund | Purchases | Sales | ||
Asia-Pacific (ex-Japan) Equity Fund | $ 1,715,086 | $ 3,052,833 | ||
China A Share Equity Fund | 9,031,326 | 8,386,441 | ||
Dynamic Dividend Fund | 95,498,963 | 108,487,755 | ||
Emerging Markets Fund | 1,090,307,689 | 2,397,498,804 | ||
Focused U.S. Equity Fund | 7,929,164 | 16,172,484 | ||
Global Equity Fund | 7,704,690 | 14,056,970 | ||
Global Infrastructure Fund | 19,494,721 | 64,287,645 | ||
International Equity Fund | 77,646,041 | 89,618,136 | ||
International Real Estate Equity Fund | 22,898,768 | 51,237,688 | ||
International Small Cap Fund | 46,749,937 | 34,472,098 | ||
Realty Income & Growth Fund | 13,369,577 | 28,210,710 | ||
U.S. Mid Cap Equity Fund | 1,038,055 | 929,790 | ||
U.S. Multi-Cap Equity Fund | 186,187,739 | 225,217,664 | ||
U.S. Small Cap Equity Fund | 450,171,524 | 619,444,021 |
5. Portfolio Investment Risks
a. Concentration Risk
The Global Infrastructure Fund, International Real Estate Equity Fund and Realty Income & Growth Fund are subject to concentration risk. Each Fund's strategy of concentrating in companies in a specific industry means that its performance will be closely tied to the performance
2020 Annual Report | 155 |
Notes to Financial Statements (continued)
October 31, 2020
of a particular market segment. Each Fund's concentration in these companies may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on each Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.
b. Cybersecurity Risk
Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser and/or their service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality.
c. Dividend Strategy Risk
The Dynamic Dividend Fund and Realty Income & Growth Fund are subject to dividend strategy risk. There is no guarantee that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The Fund's emphasis on dividend paying stocks could cause the Fund to underperform similar funds that invest without consideration of a company's track record of paying dividends or ability to pay dividends in the future. Dividend-paying stocks may not participate in a broad market advance to the same degree as other stocks, and a sharp rise in interest rates or economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. The Fund may hold securities for short periods of time related to the dividend payment periods and may experience loss during these periods.
d. Emerging Markets Risk
A magnification of the risks that apply to foreign investments. These risks are greater for securities of companies in emerging markets countries because the countries may have less stable governments, more volatile currencies and less established markets (see "Foreign Securities Risk" below).
e. Equity-Linked Notes
The China A Share Equity Fund may invest in equity-linked notes, which are generally subject to the same risks as the foreign equity securities or the basket of foreign securities they are linked to. If the linked security(ies) declines in value, the note may return a lower amount at maturity. The trading price of an equity-linked note also depends on the value of the linked security(ies).
f. Equity Securities Risk
The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry).
g. Exchange-Traded Fund Risk
To the extent that the China A Share Equity Fund invests in ETFs, the Fund may be subject to, among other risks, tracking error risk and passive and, in some cases, active management investment risk. An active secondary market in ETF shares may not develop or be maintained and may be halted or interrupted due to actions by its listing exchange, unusual market conditions or other reasons. There can be no assurance that an ETF's shares will continue to be listed on an active exchange. In addition, Fund shareholders bear both their proportionate share of the Fund's expenses and similar expenses incurred through the Fund's ownership of the ETF.
h. Focus Risk
Because the Focused U.S. Equity Fund invests a greater proportion of assets in the securities of a smaller number of issuers, the Fund will be subject to greater volatility with respect to its investments than a fund that invests in a larger number of securities.
i. Foreign Currency Exposure Risk
The value of foreign currencies relative to the U.S. Dollar fluctuates in response to market, economic, political, regulatory, geopolitical or other conditions. A decline in the value of a foreign currency versus the U.S. Dollar reduces the value in U.S. Dollars of investments denominated in that foreign currency. This risk may impact a Fund more greatly to the extent the Fund does not hedge its currency risk, or hedging techniques used by the Adviser are unsuccessful.
156 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
j. Foreign Securities Risk
Foreign countries in which a Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of a Fund's investments may decline because of factors such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
Asian Risk. Parts of the Asian region may be subject to a greater degree of economic, political and social instability than is the case in the United States and Europe. Some Asian countries can be characterized as emerging markets or newly industrialized and may experience more volatile economic cycles than developed countries. The developing nature of securities markets in many countries in the Asian region may lead to a lack of liquidity while some countries have restricted the flow of money in and out of the country. Some countries in Asia have historically experienced political uncertainty, corruption, military intervention and social unrest. To the extent a Fund invests heavily in Asian issuers, the Fund may be more volatile than a fund which is broadly diversified geographically.
China Risk. Concentrating investments in China subjects the China A Shares Equity Fund to additional risks, and may make it significantly more volatile than geographically diverse mutual funds. Additional risks associated with investments in China include exposure to currency fluctuations, less liquidity, expropriation, confiscatory taxation, nationalization, exchange control regulations (including currency blockage), trading halts, imposition of tariffs, limitations on repatriation and differing legal standards. Any spread of an infectious illness, public health threat or similar issue could reduce consumer demand or economic output, result in market closures, travel restrictions or quarantines, and generally have a significant impact on the Chinese economy, which in turn could adversely affect the Fund's investments.
China A Shares Risk. Trading in China A Shares through Stock Connect and the QFII Programs involves additional risks. Stock Connect is subject to a daily quota (the "Daily Quota"), which limits the maximum net purchases under Stock Connect each day and, as such, buy orders for China A Shares would be rejected once the Daily Quota is exceeded (although the Fund will be permitted to sell China A Shares regardless of the Daily Quota balance). Further, Stock Connect, which relies on the connectivity of the Shanghai or Shenzhen markets with Hong Kong, is subject to operational risk, regulations that are relatively untested and are subject to change, and extended market closures for holidays or otherwise. During an extended market closure, the Fund's ability to trade in China A Shares will be impacted which may affect the Fund's performance. The QFII Programs are subject to the risk that the Adviser may have its QFII Programs license revoked or restricted with respect to the Fund or the Fund may be impacted by the rules, restrictions and quota limitations connected to reliance on a QFII Programs license.
k. Illiquid Securities Risk
Illiquid securities are assets that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the asset. An inability to sell a portfolio position can adversely affect a Fund's value or prevent the Fund from being able to take advantage of other investment opportunities. Illiquid securities and relatively less liquid securities may also be difficult to value.
The Adviser employs procedures and tests using third-party and internal data inputs that seek to assess and manage the liquidity of a Fund's portfolio holdings. These procedures and tests take into account a Fund's investment strategy and liquidity of portfolio investments during both normal and foreseeable stressed conditions, cash-flow projections during both normal and reasonable foreseeable stressed conditions, relevant market, trading and other factors, and monitor whether liquidity should be adjusted based on changed market conditions. These procedures and tests are designed to assist a Fund in determining its ability to meet redemption requests in various market conditions. In light of the dynamic nature of markets, there can be no assurance that these procedures and tests will enable a Fund to ensure that it has sufficient liquidity to meet redemption requests.
l. Impact of Large Redemptions and Purchases of Fund Shares
Occasionally, shareholders may make large redemptions or purchases of Fund shares, which may cause a Fund to have to sell securities or invest additional cash. These transactions may adversely affect the Fund's performance and increase transaction costs. In addition, large redemption requests may exceed the cash balance of a Fund and result in credit line borrowing fees and/or overdraft charges to the Fund until the sales of portfolio securities necessary to cover the redemption request settle.
m. Infrastructure-Related Investment Risk
Because the Global Infrastructure Fund concentrates its investments in infrastructure-related entities, the Fund has greater exposure to the potential adverse economic, regulatory, political and other changes affecting such entities. Infrastructure related entities are subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection with capital construction programs, costs associated with environmental and other regulations, the effects of economic slowdown and surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices, the effects of energy conservation policies and other factors. Additionally, infrastructure-related entities may be subject to regulation by various governmental
2020 Annual Report | 157 |
Notes to Financial Statements (continued)
October 31, 2020
authorities and may also be affected by governmental regulation of rates charged to customers, service interruption due to environmental, operational or other mishaps and the imposition of special tariffs and changes in tax laws, regulatory policies and accounting standards.
n. Issuer Risk
The value of a security may decline for reasons directly related to the issuer, such as management performance, financial leverage and reduced demand for the issuer's goods or service.
o. LIBOR Risk
A Fund may invest in certain debt securities, derivatives or other financial instruments that utilize the London Interbank Offered Rate ("LIBOR") as a "benchmark" or "reference rate" for various interest rate calculations. In July 2017, the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. Although financial regulators and industry working groups have suggested alternative reference rates, such as European Interbank Offered Rate ("EURIBOR"), Sterling Overnight Interbank Average Rate ("SONIA") and Secured Overnight Financing Rate ("SOFR"), global consensus on alternative rates is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect a Fund's performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely affecting a Fund's performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.
p. Management Risk
Each Fund is subject to the risk that the Adviser or Subadviser (as applicable) may make poor security selections. The Adviser, Subadviser and their portfolio managers apply their own investment techniques and risk analyses in making investment decisions for a Fund and there can be no guarantee that these decisions will achieve the desired results for the Fund. In addition, the Adviser or Subadviser may select securities that underperform the relevant market or other funds with similar investment objectives and strategies.
q. Market Risk
Deteriorating market conditions might cause a general weakness in the market that reduces the prices of securities in that market in which a Fund invests.
The illness caused by a novel coronavirus (COVID-19) has resulted in a global pandemic and major disruption to economies and markets around the world, including the United States. Financial markets have experienced extreme volatility and severe losses, and trading in many instruments has been disrupted. Liquidity for many instruments has been greatly reduced for periods of time. Some interest rates are very low and in some cases yields are negative. Some sectors of the economy and individual issuers have experienced particularly large losses. These circumstances may continue for an extended period of time, and may continue to affect adversely the value and liquidity of the Fund's investments. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, including the Fund, are not known. Governments and central banks, including the Federal Reserve in the United States, have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. The impact of these measures, and whether they will be effective to mitigate the economic and market disruption, will not be known for some time.
r. Mid-Cap Securities Risk
Securities of medium-sized companies tend to be more volatile and less liquid than securities of larger companies.
s. Non-Diversified Fund Risk
The Realty Income & Growth Fund's performance may be more volatile than a diversified fund because it may invest a greater percentage of its total assets in the securities of a single issuer.
t. Portfolio Turnover Risk
The Dynamic Dividend Fund and Global Infrastructure Fund may engage in active and frequent trading of portfolio securities to achieve its investment objective. High portfolio turnover necessarily results in greater transaction costs which may reduce Fund performance. It may also result in greater realization of gains, which may include short-term gains taxable at ordinary income tax rates.
158 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
u. Qualified Dividend Tax Risk
With respect to the Dynamic Dividend Fund, favorable U.S. federal tax treatment of Fund distributions may be adversely affected, changed or repealed by future changes in tax laws.
v. REIT and Real Estate Risk
Investment in real estate investment trusts ("REITs") and real estate involves the risks that are associated with direct ownership of real estate and with the real estate industry in general. These risks include: declines in the value of real estate; risks related to local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income, neighborhood values or the appeal of properties to tenants; changes in interest rates and changes in general economic and market conditions. REITs' share prices may decline because of adverse developments affecting the real estate industry including changes in interest rates. The returns from REITs may trail returns from the overall market. Additionally, there is always a risk that a given REIT will fail to qualify for favorable tax treatment. REITs may be leveraged, which increases risk. Certain REITs charge management fees, which may result in layering the management fee paid by the fund.
w. Sector Risk
To the extent that a Fund has a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector, the Fund may be more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly.
Industrials Sector Risk. To the extent that the industrial sector represents a significant portion of a Fund's holdings, the Fund will be sensitive to changes in, and its performance may be adversely impacted by issues impacting this sector. The value of securities issued by companies in the industrials sector may be adversely affected by supply and demand related to their specific products or services and industrials sector products in general. The products of manufacturing companies may face obsolescence due to rapid technological developments and frequent new product introduction. Government regulations, world events, economic conditions and exchange rates may adversely affect the performance of companies in the industrials sector. Companies in the industrials sector may be adversely affected by liability for environmental damage and product liability claims. The industrials sector may also be adversely affected by changes or trends in commodity prices, which may be influenced by unpredictable factors. Companies in the industrials sector, particularly aerospace and defense companies, may also be adversely affected by government spending policies because companies involved in this sector rely to a significant extent on government demand for their products and services.
Information Technology Sector Risk. To the extent that the information technology sector represents a significant portion of a Fund, the Fund will be sensitive to changes in, and its performance may depend to a greater extent on, factors impacting this sector. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on their profit margins. Like other technology companies, information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Companies in the information technology sector are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.
x. Small-Cap Securities Risk
Securities of smaller companies are usually less stable in price and less liquid than those of larger, more established companies. Therefore, they generally involve greater risk.
y. Valuation Risk
The price a Fund could receive upon the sale of any particular portfolio investment may differ from the Fund's valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A Fund's ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers.
z. Passive Foreign Investment Company Tax Risk
Equity investments by a Fund in certain "passive foreign investment companies" ("PFICs") could subject the Fund to a U.S. federal income tax (including interest charges) on distributions received from the PFIC or on proceeds received from the disposition of shares in the PFIC. A Fund may BE ABLE elect to treat a PFIC as a "qualified electing fund" (i.e., make a "QEF election"), in which case the Fund will be required to include its share of the company's income and net capital gains annually. A Fund may make an election to mark the gains (and to a limited extent
2020 Annual Report | 159 |
Notes to Financial Statements (continued)
October 31, 2020
losses) in such holdings "to the market" as though it had sold and repurchased its holdings in those PFICs on the last day of the Fund's taxable year. Such gains and losses are treated as ordinary income and loss. Because it is not always possible to identify a foreign corporation as a PFIC, a Fund may incur the tax and interest charges described above in some instances.
aa. Non-U.S. Taxation Risk
Income, proceeds and gains received by a Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries, which will reduce the return on those investments. Tax treaties between certain countries and the United States may reduce or eliminate such taxes.
If, at the close of its taxable year, more than 50% of the value of a Fund's total assets consists of securities of foreign corporations, including for this purpose foreign governments, the Fund will be permitted to make an election under the Code that will allow shareholders a deduction or credit for foreign taxes paid by the Fund. In such a case, shareholders will include in gross income from foreign sources their pro rata shares of such taxes. A shareholder's ability to claim an offsetting foreign tax credit or deduction in respect of such foreign taxes is subject to certain limitations imposed by the Code, which may result in the shareholder's not receiving a full credit or deduction (if any) for the amount of such taxes. Shareholders who do not itemize on their U.S. federal income tax returns may claim a credit (but not a deduction) for such foreign taxes. If a Fund does not qualify for or chooses not to make such an election, shareholders will not be entitled separately to claim a credit or deduction for U.S. federal income tax purposes with respect to foreign taxes paid by the Fund; in that case the foreign tax will nonetheless reduce the Fund's taxable income. Even if a Fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the Fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction.
Please read the Funds' prospectus for more detailed information regarding these and other risks.
6. Contingencies
In the normal course of business, the Funds may provide general indemnifications pursuant to certain contracts and organizational documents. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds, and therefore, cannot be estimated; however, the Funds expect the risk of loss from such claims to be remote.
7. Tax Information
As of October 31, 2020, the tax cost of securities and the breakdown of unrealized appreciation/(depreciation) for each Fund were as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) | |||||||||||||
Asia-Pacific (ex-Japan) Equity Fund | $ | 5,203,712 | $ | 1,208,499 | $ | (283,275 | ) | $ | 925,224 | |||||||
China A Share Equity Fund | 16,165,305 | 4,641,222 | (731,147 | ) | 3,910,075 | |||||||||||
Dynamic Dividend Fund | 95,586,805 | 18,966,762 | (10,846,457 | ) | 8,120,305 | |||||||||||
Emerging Markets Fund | 3,119,519,043 | 1,160,125,381 | (266,719,385 | ) | 893,405,996 | |||||||||||
Focused U.S. Equity Fund | 11,411,889 | 3,128,161 | (616,855 | ) | 2,511,306 | |||||||||||
Global Equity Fund | 19,525,197 | 6,357,086 | (628,315 | ) | 5,728,771 | |||||||||||
Global Infrastructure Fund | 39,000,993 | 9,142,748 | (6,753,070 | ) | 2,389,678 | |||||||||||
International Equity Fund | 172,050,972 | 50,695,973 | (4,244,337 | ) | 46,451,636 | |||||||||||
International Real Estate Equity Fund | 33,443,056 | 2,400,058 | (15,295,944 | ) | (12,895,886 | ) | ||||||||||
International Small Cap Fund | 110,425,104 | 33,247,701 | (4,821,583 | ) | 28,426,118 | |||||||||||
Realty Income & Growth Fund | 39,795,916 | 12,802,134 | (3,213,745 | ) | 9,588,389 | |||||||||||
U.S. Mid Cap Equity Fund | 1,719,758 | 502,419 | (24,234 | ) | 478,185 | |||||||||||
U.S. Multi-Cap Equity Fund | 309,609,434 | 102,713,784 | (13,155,396 | ) | 89,558,388 | |||||||||||
U.S. Small Cap Equity Fund | 682,865,371 | 95,727,814 | (48,585,533 | ) | 47,142,281 |
160 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
The tax character of distributions paid during the fiscal year ended October 31, 2020 was as follows (total distributions paid may differ from the Statements of Changes in Net Assets because for tax purposes dividends are recognized when actually paid):
Distributions Paid From | ||||||||||||||||||||||||
Fund | Ordinary Income* | Net Long Term Capital Gains* | Total Taxable Distributions | Tax Exempt Distributions | Return of Capital | Total Distributions Paid | ||||||||||||||||||
Asia-Pacific (ex-Japan) Equity Fund | $ | 82,319 | $ | – | $ | 82,319 | $– | $ | – | $ | 82,319 | |||||||||||||
China A Share Equity Fund | 14,078 | 715,542 | 729,620 | – | – | 729,620 | ||||||||||||||||||
Dynamic Dividend Fund | 7,157,644 | – | 7,157,644 | – | – | 7,157,644 | ||||||||||||||||||
Emerging Markets Fund | 91,341,000 | 2,583,742 | 93,924,742 | – | – | 93,924,742 | ||||||||||||||||||
Focused U.S. Equity Fund | 289,373 | 1,634,574 | 1,923,947 | – | – | 1,923,947 | ||||||||||||||||||
Global Equity Fund | 186,711 | 798,701 | 985,412 | – | – | 985,412 | ||||||||||||||||||
Global Infrastructure Fund | 2,807,721 | 449,156 | 3,256,877 | – | 606,231 | 3,863,108 | ||||||||||||||||||
International Equity Fund | 2,748,047 | – | 2,748,047 | – | – | 2,748,047 | ||||||||||||||||||
International Real Estate Equity Fund | 6,412,304 | – | 6,412,304 | – | – | 6,412,304 | ||||||||||||||||||
International Small Cap Fund | 1,686,730 | 4,472,541 | 6,159,271 | – | – | 6,159,271 | ||||||||||||||||||
Realty Income & Growth Fund | 1,259,953 | 9,878,074 | 11,138,027 | – | – | 11,138,027 | ||||||||||||||||||
U.S. Mid Cap Equity Fund | 8,559 | 90,257 | 98,816 | – | – | 98,816 | ||||||||||||||||||
U.S. Multi-Cap Equity Fund | 2,144,740 | 34,164,852 | 36,309,592 | – | – | 36,309,592 | ||||||||||||||||||
U.S. Small Cap Equity Fund | 1,296,552 | 59,696,046 | 60,992,598 | – | – | 60,992,598 |
Amounts listed as "–" are $0 or round to $0.
The tax character of distributions paid during the fiscal year ended October 31, 2019 was as follows (total distributions paid may differ from the Statements of Changes in Net Assets because for tax purposes dividends are recognized when actually paid):
Distributions Paid From | ||||||||||||||||||||||||
Fund | Ordinary Income* | Net Long Term Capital Gains* | Total Taxable Distributions | Tax Exempt Distributions | Return of Capital | Total Distributions Paid | ||||||||||||||||||
Asia-Pacific (ex-Japan) Equity Fund | $ | 91,747 | $ | – | $ | 91,747 | $– | $– | $ | 91,747 | ||||||||||||||
China A Share Equity Fund | 15,411 | – | 15,411 | – | – | 15,411 | ||||||||||||||||||
Dynamic Dividend Fund | 8,355,907 | – | 8,355,907 | – | – | 8,355,907 | ||||||||||||||||||
Emerging Markets Fund | 85,765,819 | – | 85,765,819 | – | – | 85,765,819 | ||||||||||||||||||
Focused U.S. Equity Fund | – | 1,621,378 | 1,621,378 | – | – | 1,621,378 | ||||||||||||||||||
Global Equity Fund | 404,912 | 2,301,118 | 2,706,030 | – | – | 2,706,030 | ||||||||||||||||||
Global Infrastructure Fund | 2,720,628 | 751,483 | 3,472,111 | – | – | 3,472,111 | ||||||||||||||||||
International Equity Fund | 6,460,778 | – | 6,460,778 | – | – | 6,460,778 | ||||||||||||||||||
International Real Estate Equity Fund | 3,282,758 | – | 3,282,758 | – | – | 3,282,758 | ||||||||||||||||||
International Small Cap Fund | 1,593,975 | 7,611,381 | 9,205,356 | – | – | 9,205,356 | ||||||||||||||||||
Realty Income & Growth Fund | 1,677,003 | 25,992,784 | 27,669,787 | – | – | 27,669,787 | ||||||||||||||||||
U.S. Mid Cap Equity Fund | 2,943 | 65,995 | 68,938 | – | – | 68,938 | ||||||||||||||||||
U.S. Multi-Cap Equity Fund | 6,064,257 | 31,556,765 | 37,621,022 | – | – | 37,621,022 | ||||||||||||||||||
U.S. Small Cap Equity Fund | 7,178,622 | 153,512,028 | 160,690,650 | – | – | 160,690,650 |
Amounts listed as "–" are $0 or round to $0.
2020 Annual Report | 161 |
Notes to Financial Statements (continued)
October 31, 2020
As of October 31, 2020, the components of accumulated earnings/(deficit) on a tax basis were as follows:
Fund | Undistributed Tax Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Accumulated Earnings | Distributions Payable | Late Year Ordinary and Post-October Capital Loss Deferrals | Other Temporary Differences | Unrealized Appreciation/ (Depreciation)* | Accumulated Capital and Other Losses** | Total Accumulated Earnings/ (Deficit) | ||||||||||||||||||||||||||
Asia-Pacific (ex-Japan) Equity Fund | $– | $ | 27,002 | $ | – | $– | $– | $ – | $– | $ | 920,804 | $ | (200,706,352 | ) | $ | (199,758,546 | ) | |||||||||||||||||||
China A Share Equity Fund | – | 53,375 | 463,245 | – | – | – | – | 3,910,074 | – | 4,426,694 | ||||||||||||||||||||||||||
Dynamic Dividend Fund | – | 41,955 | – | – | – | – | – | 8,140,112 | (4,212,551 | ) | 3,969,516 | |||||||||||||||||||||||||
Emerging Markets Fund | – | 8,624,100 | 33,395,452 | – | – | – | – | 893,406,222 | – | 935,425,774 | ||||||||||||||||||||||||||
Focused U.S. Equity Fund | – | 169,188 | 1,648,858 | – | – | – | – | 2,511,306 | – | 4,329,352 | ||||||||||||||||||||||||||
Global Equity Fund | – | – | – | – | – | (6,837 | ) | – | 5,731,003 | (5,035,145 | ) | 689,021 | ||||||||||||||||||||||||
Global Infrastructure Fund | – | – | – | – | – | – | – | 2,388,685 | (1,647,075 | ) | 741,610 | |||||||||||||||||||||||||
International Equity Fund | – | 454,641 | – | – | – | – | – | 46,451,581 | (28,536,910 | ) | 18,369,312 | |||||||||||||||||||||||||
International Real Estate Equity Fund | – | 772,710 | – | – | – | – | – | (12,896,038 | ) | (73,604,082 | ) | (85,727,410 | ) | |||||||||||||||||||||||
International Small Cap Fund | – | – | – | – | – | – | – | 28,201,129 | (1,307,689 | ) | 26,893,440 | |||||||||||||||||||||||||
Realty Income & Growth Fund | – | – | 5,677,152 | – | – | – | – | 9,588,389 | – | 15,265,541 | ||||||||||||||||||||||||||
U.S. Mid Cap Equity Fund | – | 21,722 | 150,840 | – | – | – | – | 478,185 | – | 650,747 | ||||||||||||||||||||||||||
U.S. Multi-Cap Equity Fund | – | 11,862,193 | 36,363,926 | – | – | – | – | 89,558,389 | – | 137,784,508 | ||||||||||||||||||||||||||
U.S. Small Cap Equity Fund | – | 7,615,775 | 41,783,419 | – | – | – | – | 47,141,945 | – | 96,541,139 |
* | The difference between the book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to passive foreign investment companies and tax deferral of losses on wash sales. |
** | As of October 31, 2020, for Federal income tax purposes, these Funds have capital loss carryforwards available to offset capital gains, if any, to the extent provided by the Treasury regulations, with no expiration. |
As of October 31, 2020, for Federal income tax purposes, the following Funds have capital loss carryforwards available to offset capital gains, if any, to the extent provided by the Treasury regulations.
Fund | Amount | Expires | ||||
Asia-Pacific (ex-Japan) Equity Fund | $122,703,950 | Unlimited (Short-Term) | ||||
Asia-Pacific (ex-Japan) Equity Fund | 78,002,402 | Unlimited (Long-Term) | ||||
Dynamic Dividend Fund | 4,212,551 | Unlimited (Short-Term) | ||||
Global Equity Fund | 271,921 | Unlimited (Short-Term) | ||||
Global Equity Fund | 4,763,224 | Unlimited (Long-Term) | ||||
Global Infrastructure Fund | 1,647,075 | Unlimited (Short-Term) | ||||
International Equity Fund | 6,922,759 | Unlimited (Short-Term) | ||||
International Equity Fund | 21,614,151 | Unlimited (Long-Term) | ||||
International Real Estate Equity Fund | 5,452,642 | Unlimited (Short-Term) | ||||
International Real Estate Equity Fund | 68,151,440 | Unlimited (Long-Term) | ||||
International Small Cap Fund | 1,307,689 | Unlimited (Short-Term) |
The Funds are permitted to carry forward capital losses for an unlimited period, and capital losses that are carried forward will retain their character as either short-term or long-term capital losses.
162 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. Accordingly, the table below details the necessary reclassifications, which are a result of permanent differences primarily attributable to use of equalization, REIT investments and distributions in excess of current earnings. These reclassifications have no effect on net assets or NAVs per share.
Fund | Paid-in Capital | Distributable Earnings/ (Accumulated Loss) | ||
Focused U.S. Equity Fund | $ 1,236,697 | $(1,236,697 | ) | |
Global Equity Fund | (41,932 | ) | 41,932 | |
Global Infrastructure Fund | (6,500 | ) | 6,500 | |
International Small Cap Fund | (1,382,214 | ) | 1,382,214 | |
U.S. Small Cap Equity Fund | 9,576,001 | (9,576,001 | ) |
8. Significant Shareholders
As of October 31, 2020, the Funds had shareholders with the percentage ownership indicated, which are considered significant shareholders (holdings greater than 5.0%) for financial reporting purposes:
Record | Number of | ||
Fund | Ownership | % | Account Owners |
Asia-Pacific (ex-Japan) Equity Fund | 66.0 | % | 4 |
China A Share Equity Fund | 36.0 | 3 | |
Dynamic Dividend Fund | 49.9 | 4 | |
Emerging Markets Fund | 60.1 | 4 | |
Focused U.S. Equity Fund | 19.6 | 3 | |
Global Equity Fund | 19.4 | 1 | |
Global Infrastructure Fund | 65.7 | 4 | |
International Equity Fund | 44.0 | 4 | |
International Real Estate Equity Fund | 62.3 | 4 | |
International Small Cap Fund | 52.8 | 4 | |
Realty Income & Growth Fund | 51.5 | 3 | |
U.S. Mid Cap Equity Fund | 84.7 | 1 | |
U.S. Multi-Cap Equity Fund | 11.9 | 1 | |
U.S. Small Cap Equity Fund | 45.4 | 6 |
9. Line of Credit
The Trust, on behalf of each of the funds of the Trust (including the Funds) (the "Borrowers"), has entered into an agreement (the "Agreement") with State Street Bank and Trust Company (the "Bank"), subject to annual renewal. The Agreement provides for a revolving credit facility (the "Credit Facility") in the amount of $150,000,000 to be utilized for temporary or emergency purposes to fund shareholder redemptions or other short-term liquidity purposes.
The Funds are subject to an up-front fee of 2.5 basis points (0.025%) on the full facility amount, which was paid upon closing of the credit facility. Principal on each outstanding loan made under the Agreement bears interest at a variable rate per annum equal to the higher of (a) the Federal Funds Rate as in effect on that day (not less than zero) plus 1.25% or (b) the One-Month LIBOR as in effect on that day (not less than zero) plus 1.25%. In addition, the Borrowers shall pay to the Bank a commitment fee at the rate of 0.25% per annum on the daily unused portion of the Credit Facility, as applicable, which is allocated among the Borrowers in such manner as is determined by the Board to be reasonable. In 2017, the head of the United Kingdom's Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement reference rate. As such, the potential effect of a transition
2020 Annual Report | 163 |
Notes to Financial Statements (concluded)
October 31, 2020
away from LIBOR on the Fund's payment obligations under the revolving credit facility cannot yet be determined. For each Fund that borrowed under the Credit Facility during the fiscal year ended October 31, 2020, the following table shows the average outstanding daily balance of the days the Fund utilized the Credit Facility and the average weighted interest rate paid by the Fund during the fiscal year ended October 31, 2020.
Average Outstanding Daily Balance | Average Weighted Interest Rate | Days Utilized | |
Asia-Pacific (ex-Japan) Equity Fund | 112,782 | 2.78% | 14 |
China A Share Equity Fund | 242,003 | 1.63% | 13 |
Dynamic Dividend Fund | 351,567 | 2.23% | 37 |
Emerging Markets Fund | 21,067,457 | 2.09% | 21 |
Focused U.S. Equity Fund | 425,000 | 2.11% | 1 |
Global Equity Fund | 408,308 | 2.41% | 8 |
Global Infrastructure Fund | 261,517 | 1.99% | 5 |
International Equity Fund | 3,625,000 | 3.02% | 3 |
International Real Estate Equity Fund | 733,633 | 2.75% | 77 |
Realty Income & Growth Fund | 639,625 | 2.31% | 139 |
U.S. Small Cap Equity Fund | 1,098,458 | 2.46% | 6 |
10. Subsequent Events
Management has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no disclosures and/or adjustments were required to the financial statements as of October 31, 2020, except as noted below.
Effective December 1, 2020, each of the Aberdeen Focused U.S. Equity Fund, Aberdeen U.S. Multi-Cap Equity Fund and Aberdeen International Equity Fund changed their names to the Aberdeen U.S. Sustainable Leaders Smaller Companies Fund, the Aberdeen U.S. Sustainable Leaders Fund and the Aberdeen Emerging Markets Sustainable Leaders Fund, respectively, in connection with the changes to each Fund's principal strategies and risks and portfolio management team. The changes to each of the Funds are described in the Funds' prospectus dated December 1, 2020.
On December 8, 2020 the Board of Trustees approved plans of liquidation for the Aberdeen Asia-Pacific (ex-Japan) Equity Fund and the Aberdeen U.S. Mid-Cap Equity Fund. The liquidations are expected to occur on or around February 11, 2021.
164 | 2020 Annual Report |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Aberdeen Funds:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Aberdeen Asia Pacific (ex-Japan) Equity Fund, Aberdeen China A Share Equity Fund, Aberdeen Dynamic Dividend Fund, Aberdeen Emerging Markets Fund, Aberdeen Focused U.S. Equity Fund, Aberdeen Global Equity Fund, Aberdeen Global Infrastructure Fund, Aberdeen International Equity Fund, Aberdeen International Real Estate Equity Fund, Aberdeen International Small Cap Fund, Aberdeen Realty Income & Growth Fund, Aberdeen U.S. Mid Cap Equity Fund, Aberdeen U.S. Multi-Cap Equity Fund, and Aberdeen U.S. Small Cap Equity Fund, fourteen of the funds comprising Aberdeen Funds (each, a Fund and collectively, the Funds), including the statements of investments, as of October 31, 2020, the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five-year period then ended except for the Aberdeen Dynamic Dividend Fund, Aberdeen Global Infrastructure Fund, Aberdeen International Real Estate Equity Fund, and Aberdeen Realty Income & Growth Fund, for which the period is the three-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of October 31, 2020, the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended except for the Aberdeen Dynamic Dividend Fund, Aberdeen Global Infrastructure Fund, Aberdeen International Real Estate Equity Fund, and Aberdeen Realty Income & Growth Fund, for which the period is the three-year period then ended, in conformity with U.S. generally accepted accounting principles. The financial highlights for each of the years in the two-year period ended October 31, 2017 for Aberdeen Dynamic Dividend Fund, Aberdeen Global Infrastructure Fund, Aberdeen International Real Estate Equity Fund, and Aberdeen Realty Income & Growth Fund were audited by other independent registered public accountants whose reports, dated December 22, 2017, expressed an unqualified opinion on those financial highlights.
Board Approved Liquidation
As discussed in Note 10, on December 8, 2020, the Board of Trustees of Aberdeen Funds approved plans of liquidation for the Aberdeen Asia-Pacific (ex-Japan) Equity Fund and the Aberdeen U.S. Mid-Cap Equity Fund. The liquidations are expected to occur in February of 2021.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of October 31, 2020, by correspondence with the custodian, brokers, or by other appropriate auditing procedures when replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Aberdeen investment companies since 2009.
Philadelphia, Pennsylvania
December 29, 2020
2020 Annual Report | 165 |
Other Tax Information (Unaudited)
For the year ended October 31, 2020, certain dividends paid by the Funds may be subject to a maximum tax rate of 15% or 20% (depending upon income levels) as qualified dividend income. The Funds intend to designate the maximum amount allowable as taxed at a maximum rate of 15%. Complete information will be reported in conjunction with your 2020 Form 1099-DIV.
For the year ended October 31, 2020, the following Funds paid qualified dividend income as follows:
Fund | Qualified Dividend Income |
Asia-Pacific (ex-Japan) Equity Fund | 100.00% |
China A Share Equity Fund | 100.00% |
Dynamic Dividend Fund | 79.45% |
Emerging Markets Fund | 94.40% |
Focused U.S.Equity Fund | 83.08% |
Global Equity Fund | 100.00% |
Global Infrastructure Fund | 76.13% |
International Equity Fund | 100.00% |
International Real Estate Equity Fund | 22.20% |
International Small Cap Fund | 59.40% |
Realty Income & Growth Fund | 0.09% |
U.S. Mid Cap Equity Fund | 96.22% |
U.S. Multi-Cap Equity Fund | 100.00% |
U.S. Small Cap Equity Fund | 86.51% |
For the taxable year ended October 31, 2020, the following percentage of income dividends paid by the Funds qualify for the dividends received deduction available to corporate shareholders:
Fund | Dividends Received Deduction |
Asia-Pacific (ex-Japan) Equity Fund | 1.57% |
China A Share Equity Fund | 1.18% |
Dynamic Dividend Fund | 54.24% |
Emerging Markets Fund | 1.10% |
Focused U.S. Equity Fund | 80.16% |
Global Equity Fund | 62.14% |
Global Infrastructure Fund | 27.32% |
International Equity Fund | 1.18% |
Realty Income & Growth Fund | 0.09% |
U.S. Mid Cap Equity Fund | 94.70% |
U.S. Multi-Cap Equity Fund | 100.00% |
U.S. Small Cap Equity Fund | 82.43% |
166 | 2020 Annual Report |
Other Tax Information (Unaudited) (concluded)
The Funds intend to elect to pass through to their shareholders the credit for taxes paid in foreign countries during its fiscal year ended October 31, 2020. In accordance with the current tax laws, the foreign income and foreign tax per share (for a share outstanding as of October 31, 2020) were as follows:
Fund | Foreign Tax |
Asia-Pacific (ex-Japan) Equity Fund | $0.0290 |
China A Share Equity Fund | $0.0399 |
Emerging Markets Fund | $0.0654 |
Global Equity Fund | $0.0150 |
Global Infrastructure Fund | $0.0756 |
International Equity Fund | $0.0241 |
International Real Estate Equity Fund | $0.0591 |
International Small Cap Fund | $0.0356 |
During the year ended October 31, 2020, the following Funds reported dividends as long-term capital gains:
Fund | Amount | |
China A Share Equity Fund | $ | 715,542 |
Emerging Markets Fund | $ | 2,583,742 |
Focused U.S. Equity Fund | $ | 2,756,171 |
Global Equity Fund | $ | 798,701 |
Global Infrastructure Fund | $ | 449,156 |
International Small Cap Fund | $ | 4,472,541 |
Realty Income & Growth | $ | 9,878,074 |
U.S. Mid Cap Equity Fund | $ | 90,257 |
U.S. Multi-Cap Equity Fund | $ | 34,164,852 |
U.S. Small Cap Equity Fund | $ | 67,820,342 |
2020 Annual Report | 167 |
Shareholder Expense Examples (Unaudited)
As a shareholder of the Aberdeen Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and (2) ongoing costs, including investment advisory fees, administration fees, transfer agent out-of-pocket expenses, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Aberdeen Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, May 1, 2020 and continued to hold your shares at the end of the reporting period, October 31, 2020.
Actual Expenses
The table below provides information about actual account values and actual expenses. You may use the information together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled "Actual Expenses Paid During Period" for the class of a Fund that you own to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and hypothetical expenses based on the Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of a Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads). Therefore, the information for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Beginning Account Value, May 1, 2020 | Actual Ending Account Value, October 31, 2020 | Hypothetical Ending Account Value | Actual Expenses Paid During Period1 | Hypothetical Expenses Paid During Period12 | Annualized Expense Ratio** | ||||||||
Asia-Pacific (ex-Japan) Equity Fund | Class A | $1,000.00 | $1,249.60 | $1,017.50 | $ 8.60 | $ 7.71 | 1.52% | ||||||
Class R | $1,000.00 | $1,248.00 | $1,016.39 | $ 9.83 | $ 8.82 | 1.74% | |||||||
Institutional Service Class | $1,000.00 | $1,251.00 | $1,018.35 | $ 7.64 | $ 6.85 | 1.35% | |||||||
Institutional Class | $1,000.00 | $1,251.40 | $1,018.85 | $ 7.07 | $ 6.34 | 1.25% | |||||||
China A Share Equity Fund | Class A | $1,000.00 | $1,383.50 | $1,018.55 | $ 7.85 | $ 6.65 | 1.31% | ||||||
Class C | $1,000.00 | $1,378.20 | $1,015.08 | $11.96 | $10.13 | 2.00% | |||||||
Class R | $1,000.00 | $1,381.20 | $1,017.14 | $ 9.52 | $ 8.06 | 1.59% | |||||||
Institutional Service Class | $1,000.00 | $1,384.90 | $1,019.71 | $ 6.47 | $ 5.48 | 1.08% | |||||||
Institutional Class | $1,000.00 | $1,385.40 | $1,020.16 | $ 5.94 | $ 5.03 | 0.99% | |||||||
Dynamic Dividend Fund | Class A | $1,000.00 | $1,090.30 | $1,017.55 | $ 7.93 | $ 7.66 | 1.51% | ||||||
Institutional Class | $1,000.00 | $1,094.60 | $1,018.85 | $ 6.58 | $ 6.34 | 1.25% | |||||||
Emerging Markets Fund | Class A | $1,000.00 | $1,304.60 | $1,017.19 | $ 9.15 | $ 8.01 | 1.58% | ||||||
Class C | $1,000.00 | $1,302.10 | $1,014.58 | $12.15 | $10.63 | 2.10% | |||||||
Class R | $1,000.00 | $1,304.00 | $1,016.54 | $ 9.90 | $ 8.67 | 1.71% | |||||||
Institutional Service Class | $1,000.00 | $1,307.20 | $1,018.95 | $ 7.13 | $ 6.24 | 1.23% | |||||||
Institutional Class | $1,000.00 | $1,308.00 | $1,019.61 | $ 6.38 | $ 5.58 | 1.10% | |||||||
Focused U.S. Equity Fund | Class A | $1,000.00 | $1,119.10 | $1,019.00 | $ 6.50 | $ 6.19 | 1.22% | ||||||
Class C | $1,000.00 | $1,115.20 | $1,015.48 | $10.21 | $ 9.73 | 1.92% | |||||||
Class R | $1,000.00 | $1,118.30 | $1,018.50 | $ 7.03 | $ 6.70 | 1.32% | |||||||
Institutional Service Class | $1,000.00 | $1,119.20 | $1,020.01 | $ 5.43 | $ 5.18 | 1.02% | |||||||
Institutional Class | $1,000.00 | $1,119.90 | $1,020.61 | $ 4.80 | $ 4.57 | 0.90% | |||||||
Global Equity Fund | Class A | $1,000.00 | $1,129.10 | $1,017.45 | $ 8.19 | $ 7.76 | 1.53% | ||||||
Class C | $1,000.00 | $1,124.70 | $1,014.08 | $11.75 | $11.14 | 2.20% | |||||||
Class R | $1,000.00 | $1,126.70 | $1,015.79 | $ 9.94 | $ 9.42 | 1.86% | |||||||
Institutional Service Class | $1,000.00 | $1,130.70 | $1,018.65 | $ 6.91 | $ 6.55 | 1.29% | |||||||
Institutional Class | $1,000.00 | $1,130.70 | $1,019.15 | $ 6.37 | $ 6.04 | 1.19% | |||||||
Global Infrastructure Fund | Class A | $1,000.00 | $1,072.80 | $1,018.90 | $ 6.46 | $ 6.29 | 1.24% | ||||||
Institutional Class | $1,000.00 | $1,073.60 | $1,020.16 | $ 5.16 | $ 5.03 | 0.99% |
168 | 2020 Annual Report |
Shareholder Expense Examples (Unaudited) (concluded)
Beginning Account Value, May 1, 2020 | Actual Ending Account Value, October 31, 2020 | Hypothetical Ending Account Value | Actual Expenses Paid During Period1 | Hypothetical Expenses Paid During Period12 | Annualized Expense Ratio** | ||||||||
International Equity Fund | Class A | $1,000.00 | $1,160.80 | $1,017.75 | $ 7.98 | $ 7.46 | 1.47% | ||||||
Class C | $1,000.00 | $1,157.30 | $1,014.58 | $11.39 | $10.63 | 2.10% | |||||||
Class R | $1,000.00 | $1,159.40 | $1,016.79 | $ 9.01 | $ 8.42 | 1.66% | |||||||
Institutional Service Class | $1,000.00 | $1,161.80 | $1,019.41 | $ 6.19 | $ 5.79 | 1.14% | |||||||
Institutional Class | $1,000.00 | $1,162.70 | $1,019.61 | $ 5.98 | $ 5.58 | 1.10% | |||||||
International Real Estate Equity Fund | Class A | $1,000.00 | $1,018.90 | $1,016.89 | $ 8.32 | $ 8.31 | 1.64% | ||||||
Institutional Class | $1,000.00 | $1,020.50 | $1,018.15 | $ 7.06 | $ 7.05 | 1.39% | |||||||
International Small Cap Fund | Class A | $1,000.00 | $1,270.70 | $1,018.35 | $ 7.71 | $ 6.85 | 1.35% | ||||||
Class C | $1,000.00 | $1,266.20 | $1,015.13 | $11.34 | $10.08 | 1.99% | |||||||
Class R | $1,000.00 | $1,268.90 | $1,016.94 | $ 9.30 | $ 8.26 | 1.63% | |||||||
Institutional Service Class | $1,000.00 | $1,000.00 | $1,025.14 | $ – | $ – | – | |||||||
Institutional Class | $1,000.00 | $1,273.40 | $1,020.16 | $ 5.66 | $ 5.03 | 0.99% | |||||||
Realty Income & Growth Fund | Class A | $1,000.00 | $1,038.40 | $1,018.80 | $ 6.46 | $ 6.39 | 1.26% | ||||||
Institutional Class | $1,000.00 | $1,041.10 | $1,020.06 | $ 5.18 | $ 5.13 | 1.01% | |||||||
U.S. Mid Cap Equity Fund | Class A | $1,000.00 | $1,195.60 | $1,018.85 | $ 6.90 | $ 6.34 | 1.25% | ||||||
Class C | $1,000.00 | $1,190.60 | $1,015.08 | $11.01 | $10.13 | 2.00% | |||||||
Class R | $1,000.00 | $1,193.50 | $1,017.60 | $ 8.27 | $ 7.61 | 1.50% | |||||||
Institutional Service Class | $1,000.00 | $1,196.70 | $1,020.11 | $ 5.52 | $ 5.08 | 1.00% | |||||||
Institutional Class | $1,000.00 | $1,196.70 | $1,020.11 | $ 5.52 | $ 5.08 | 1.00% | |||||||
U.S. Multi-Cap Equity Fund | Class A | $1,000.00 | $1,162.70 | $1,019.15 | $ 6.47 | $ 6.04 | 1.19% | ||||||
Class C | $1,000.00 | $1,159.20 | $1,015.59 | $10.31 | $ 9.63 | 1.90% | |||||||
Class R | $1,000.00 | $1,000.00 | $1,025.14 | $ – | $ – | – | |||||||
Institutional Service Class | $1,000.00 | $1,164.20 | $1,020.26 | $ 5.28 | $ 4.93 | 0.97% | |||||||
Institutional Class | $1,000.00 | $1,164.20 | $1,020.61 | $ 4.90 | $ 4.57 | 0.90% | |||||||
U.S. Small Cap Equity Fund | Class A | $1,000.00 | $1,187.60 | $1,018.35 | $ 7.42 | $ 6.85 | 1.35% | ||||||
Class C | $1,000.00 | $1,183.50 | $1,015.13 | $10.92 | $10.08 | 1.99% | |||||||
Class R | $1,000.00 | $1,184.90 | $1,016.44 | $ 9.50 | $ 8.77 | 1.73% | |||||||
Institutional Service Class | $1,000.00 | $1,188.90 | $1,019.56 | $ 6.11 | $ 5.63 | 1.11% | |||||||
Institutional Class | $1,000.00 | $1,189.50 | $1,020.16 | $ 5.45 | $ 5.03 | 0.99% |
** | The expense ratio presented represents a six-month, annualized ratio. |
1 | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period multiplied by 184/366 (to reflect the one-half year period). |
2 | Represents the hypothetical 5% return before expenses. |
2020 Annual Report | 169 |
Supplemental Information (Unaudited)
Board of Trustees' Consideration of Advisory and Sub-Advisory Agreements
At a regularly scheduled quarterly meeting (the "Quarterly Meeting") of the Board of Trustees (the "Board" or the "Trustees") of the Aberdeen Funds (the "Trust") held on June 17, 2020, the Board, including a majority of the Trustees who are not considered to be "interested persons" of the Trust (the "Independent Trustees") under the Investment Company Act of 1940, as amended (the "1940 Act"), approved for an annual period the continuation of the Trust's advisory agreement (the "Advisory Agreement") with Aberdeen Standard Investments Inc. ("ASII") and the applicable sub-advisory agreements (each a "Sub-Advisory Agreement," and collectively with the Advisory Agreement, the "Agreements") between: (i) ASII and Aberdeen Standard Investments (Asia) Limited ("ASIAL") and (ii) ASII and Aberdeen Asset Managers Limited ("AAML") (each a "Sub-Adviser," and collectively, the "Sub-Advisers") for each of the following series of the Trust: Aberdeen Asia-Pacific (ex-Japan) Equity Fund, Aberdeen China A Share Equity Fund, Aberdeen Dynamic Dividend Fund, Aberdeen Emerging Markets Fund, Aberdeen Focused U.S. Equity Fund, Aberdeen Global Equity Fund, Aberdeen Global Infrastructure Fund, Aberdeen International Equity Fund, Aberdeen International Real Estate Equity Fund, Aberdeen International Small Cap Fund, Aberdeen Realty Income & Growth Fund, Aberdeen U.S. Mid Cap Equity Fund, Aberdeen U.S. Multi-Cap Equity Fund, and Aberdeen U.S. Small Cap Equity Fund (each a "Fund," and collectively the "Funds"). Pursuant to relief granted by the U.S. Securities and Exchange Commission (the "SEC") in light of the COVID-19 pandemic (the "Order") and a determination by the Board that reliance on the Order was appropriate due to circumstances related to the current or potential effects of COVID-19, the Quarterly Meeting was held via teleconference. In addition, the Independent Trustees held a separate telephonic meeting on June 10, 2020 to review the materials provided and the relevant legal considerations (together with the Quarterly Meeting, the "Meetings"). ASIAL and AAML are affiliates of ASII. ASII and the Sub-Advisers are sometimes referred to collectively as the "Advisers."
In connection with their consideration of whether to approve the continuation of the Agreements, the Board members received and reviewed a variety of information provided by the Advisers relating to the Funds, the Agreements and the Advisers, including fee and expense information, comparative performance, and other information regarding the nature, extent and quality of services provided by the Advisers under their respective Agreements. The materials provided to the Board generally included, among other items: (i) information on the investment performance of the Funds and the performance of peer groups of funds and the Funds' performance benchmarks; (ii) information on the Funds' advisory fees and other expenses, including information comparing each Fund's expenses to those of a peer group of funds and information about any applicable expense limitations and fee "breakpoints"; (iii) information about the profitability of the Agreements to the Advisers; (iv) a report prepared by the Advisers in response to a request submitted by the Independent Trustees' independent legal counsel on behalf of such Trustees; (v) a memorandum from the Independent Trustees' independent legal counsel on the responsibilities of the Board in considering for approval the investment advisory and investment sub-advisory arrangements under the 1940 Act and Delaware law; and (vi) sales and redemption data with respect to each Fund. The Board, including the Independent Trustees, also considered other matters such as: (i) each Fund's investment objective and strategies; (ii) the Advisers' financial results and financial condition; (iii) the Advisers' investment personnel and operations; (iv) arrangements relating to the distribution of the Funds' shares and the related costs; (v) the procedures employed to determine the value of the Funds' assets; (vi) the resources devoted to, and the record of compliance with, the Funds' investment policies and restrictions, policies on personal securities transactions and other compliance policies; (vii) the allocation of the Funds' brokerage, if any, including, if applicable, allocations to brokers affiliated with the Advisers and the use, if any, of "soft" commission dollars to pay Fund expenses and to pay for research and other similar services; and (viii) possible conflicts of interest. The Board also considered the nature, extent and quality of the services provided to the Funds by ASII's affiliates. Throughout the process, the Trustees were afforded the opportunity to ask questions of and request additional information from ASII and the Sub-Advisers.
In addition to the materials requested by the Trustees in connection with their annual consideration of the continuation of the Agreements, the Trustees received and reviewed materials in advance of each regular quarterly meeting of the Board that contained information relating to the services provided by the Advisers, including detailed information about each Fund's investment performance. This information generally included, among other things, third-party performance rankings for various periods (including, as applicable, periods prior to the Advisers' management of the Funds) comparing each Fund against its respective peer group, total return information for the Funds for various periods, and details of sales and redemptions of Fund shares for the period. The Board also received periodic presentations from the portfolio management teams in connection with the performance of the Funds.
The Independent Trustees were advised by separate independent legal counsel throughout the process. The Independent Trustees also consulted in executive sessions with their independent legal counsel regarding consideration of the continuation of the Agreements. In considering whether to approve the continuation of the Agreements, the Board of Trustees, including the Independent Trustees, did not identify any single factor as determinative. Individual Trustees may have evaluated the information presented differently from one another, giving different weights to various factors. Matters considered by the Trustees, including the Independent Trustees, in connection with their approval of the continuation of the Agreements included the factors listed below.
Investment performance of the Funds and the Advisers. The Board received and reviewed with management, among other performance data, information about the performance of the Funds over various time periods, including information that compared the performance of the Funds to the performance of peer groups of funds and each Fund's performance benchmark. The Trustees reviewed and considered the Funds that had changed their investment strategies during the year and that certain of the Funds had changed their respective performance benchmarks to better
170 | 2020 Annual Report |
Supplemental Information (Unaudited) (continued)
reflect the respective Fund's investment strategy. In addition, the Trustees also reviewed data prepared by an independent third party that analyzed the performance of the Funds using a variety of performance metrics. The Trustees also considered the performance of the Funds compared to the performance of comparable funds or accounts managed by ASII and its affiliates to the extent available.
The Trustees also considered ASII's and the Sub-Advisers' performance and reputation generally, the historical responsiveness of ASII to Trustee concerns about performance, the performance of the fund family generally, and the willingness of ASII and the Sub-Advisers to take steps intended to improve performance. The Trustees also considered, as applicable, the performance of the Advisers since they commenced management of the Funds.
Based on these factors, the Board determined that the Advisers are appropriate investment advisers for the Funds.
The Board noted that it would continue to monitor the Funds' performance and any actions taken by ASII and its affiliates relating to performance.
The costs of the services provided and profits realized by the Advisers and their affiliates from their relationships with the Funds. The Trustees considered the fees charged to the Funds for advisory services as well as the total expense levels of the Funds. This information included comparisons (provided by an independent third party) of each Fund's net management fee and total expense level to those of its expense peer group and information about the advisory fees charged by ASII to any separately managed accounts with a similar strategy. In reviewing the comparison of each Fund's net management fee to that of comparable funds, the Board noted that the fee for the Funds includes both advisory and administrative fees. In evaluating the Funds' advisory fees, the Trustees considered the demands, complexity and quality of the investment management of the Funds. In considering the fees charged by ASII to any comparable accounts, the Trustees also considered, among other things, management's discussion of the different investment restrictions, objectives or policies that may be involved in managing accounts of different types.
The Trustees also noted that the sub-advisory fees, as applicable, for the Funds would not be paid by the Funds, but would be paid by ASII out of its advisory fee. The Board also considered that ASII had entered into or renewed expense limitation agreements with each of the Funds, pursuant to which ASII agreed to waive a portion of its advisory fee and/or reimburse certain expenses as a means of limiting each Fund's total annual operating expenses for a period of time.
The Trustees also considered the compensation ASII and its affiliates received, directly and indirectly, from their relationships with the Funds. The Trustees reviewed information provided by management as to the profitability of ASII and its affiliates' relationships with the Funds, including the engagement of affiliates of ASII to provide administrative and distribution services to the Funds. The Trustees also considered information about the allocation of expenses used to calculate profitability. When reviewing profitability, the Trustees also considered information about the expense levels of the Funds, the performance of the Funds, court cases regarding adviser profitability, and whether ASII had implemented breakpoints and expense limitations with respect to the Funds. The Trustees also examined the profitability of ASII and its affiliates on a Fund-by-Fund basis.
After reviewing these and related factors, including taking into account management's discussion regarding Fund expenses, the Board concluded that the advisory fees, and as applicable, the sub-advisory fees, were fair and reasonable, and that the costs of these services generally and the related profitability of ASII and its affiliates from their relationships with the Funds were reasonable and supported the continuation of the Agreements.
Economies of Scale. The Trustees considered the existence of any economies of scale in the provision of services by ASII and the Sub-Advisers and whether those economies would be shared with the Funds through breakpoints in the investment advisory fees or other means, such as expense waivers or limitations. The Board noted management's discussion of the Funds' advisory fee structure. The Trustees noted that each of the Funds was subject to a contractual expense limitation agreement and considered that certain Funds were subject to breakpoints in their investment advisory fees. The Board also considered how the Funds' potential future growth and increased size would have an effect on fees, noting that if a Fund's assets increase over time, the Fund may realize other economies of scale if assets increase at a proportionally higher rate than the increase in certain expenses. The Trustees also took note of the costs of the services provided and the profitability to ASII and its affiliates from their relationships with the Funds, as discussed above.
After reviewing these and related factors, the Board concluded that the advisory fees, and as applicable, sub-advisory fees were reasonable and supported the continuation of the Agreements.
The nature, extent and quality of the services provided to the Funds under the Agreements. The Trustees considered the nature, extent and quality of the services provided by ASII and the Sub-Advisers, as applicable, to the Funds and the resources dedicated to the Funds by ASII and its affiliates. The Board considered, among other things, the Advisers' investment experience. The Board also considered the background and experience of the Advisers' senior management personnel and the qualifications, background and responsibilities of the portfolio managers that are primarily responsible for the day-to-day portfolio management services for the Funds. The Board also considered the allocation of responsibilities among the Advisers. The Trustees considered not only the advisory services provided by ASII to the Funds, but also the administrative services provided by ASII to the Funds under a separate administration agreement. ASII's role in coordinating the activities of the Trust's other service providers was also considered. The Board also considered the Advisers' risk management processes. The Board also considered that it receives information on a regular
2020 Annual Report | 171 |
Supplemental Information (Unaudited) (concluded)
basis from the Trust's Chief Compliance Officer regarding the Advisers' compliance policies and procedures. The Board was also mindful of the Advisers' focus on the monitoring of the performance of the Funds and in addressing performance matters. The Trustees also considered the benefits to shareholders of investing in a mutual fund that is part of a family of funds that offers shareholders the right to exchange shares of one type of fund for shares of another type of fund, and provides a variety of fund and shareholder services. The Board also took into account its knowledge of management and the quality of the performance of management's duties through Board meetings, discussion and reports during the preceding year.
After reviewing these and related factors, the Board concluded that the nature, extent and quality of the services provided supported the continuation of the Agreements.
The Trustees also considered other factors, which included but were not limited to the following:
• | whether the Funds have operated in accordance with their investment objectives as well as the Funds' record of compliance with their investment restrictions, and the compliance programs of the Trust and ASII. The Trustees also considered the compliance-related resources ASII and its affiliates were providing to the Funds. |
• | the nature, quality, cost and extent of administrative services performed by ASII under the Advisory Agreement and under a separate agreement covering administrative services. |
• | so-called "fallout benefits" to ASII, such as the benefits of research made available to ASII by reason of brokerage commissions generated by the Funds' securities transactions or reputational and other indirect benefits. The Trustees considered any possible conflicts of interest associated with these fallout and other benefits, and the reporting, disclosure and other processes in place to disclose and monitor such possible conflicts of interest. |
• | the effect of any market and economic volatility on the performance, asset levels and expense ratios of the Funds. |
• | the nature, quality, cost and extent of administrative services provided by ASII under a separate agreement covering administrative services. |
* * *
Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent counsel, the Trustees, including the Independent Trustees, concluded that renewal of the Agreements would be in the best interest of each of the Funds and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Agreements for an additional one-year period. Pursuant to the SEC Order, the Board determined that the Trustees, including the Independent Trustees, voting separately, would ratify their approval at the next in-person Board meeting.
172 | 2020 Annual Report |
Management of the Funds (Unaudited)
As of October 31, 2020
Board of Trustees and Officers of the Trust
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee** | Other Directorships Held by Trustee During Past 5 Years*** | ||||
Trustees who are not interested persons (as defined in the 1940 Act) of the trust ("Independent Trustees") | ||||||||
Radhika Ajmera**** Year of Birth: 1964 | Trustee since February 2020 | Ms Ajmera has been an Independent Trustee of Aberdeen Funds since February 2020. She is also an independent non-executive director of Aberdeen Asia-Pacific Income Investment Company Limited (Canadian investment fund) since June 2015 and of Aberdeen Japan Equity Fund Inc since September 2014 where she was appointed Chair effective December 2017. | 20 | None. | ||||
P. Gerald Malone**** Year of Birth: 1950 | Trustee since December 2007 Chairman of the Board | Mr. Malone is, by profession, a lawyer of over 40 years. Currently, he is a non-executive director of a number of U.S. companies, including Medality Medical (medical technology company) and Bionik Laboratories Corp. (US healthcare company) since 2018. He is also Chairman of many of the open and closed end funds in the Fund Complex. He previously served as Independent Chairman of UK companies Crescent OTC Ltd (pharmaceutical services) until February 2018; and fluidOil Ltd. (oil services) until June 2018; U.S. company Rejuvenan llc (wellbeing services) until September 2017 and as chairman of UK company Ultrasis plc (healthcare software services company) until October 2014. Mr. Malone was previously a Member of Parliament in the U.K. from 1983 to 1997 and served as Minister of State for Health in the U.K. government from 1994 to 1997 | 27 | Director of Bionik Laboratories Corporation (U.S. healthcare company) since 2018. | ||||
Neville J. Miles**** Year of Birth: 1946 | Trustee since December 2011 | Mr. Miles is a non-executive director of a number of Australian and overseas companies and serves as Chairman of Ballyshaw Pty. Ltd. (share trading, real estate development and investment). | 22 | None. | ||||
Rahn K. Porter**** Year of Birth: 1954 | Trustee since September 2016 | Mr. Porter is the Principal at RPSS Enterprises (consulting) since 2019. He was the Chief Financial and Administrative Officer of The Colorado Health Foundation from 2013 to 2019 and served as Director of BlackRidge Financial Inc. from 2004 to 2019. | 21 | Director of CenturyLink Investment Management Company since 2006. | ||||
Steven N. Rappaport**** Year of Birth: 1948 | Trustee since September 2016 | Mr. Rappaport has been a Partner of Lehigh Court, LLC (private investment firm) and RZ Capital LLC (private investment firm) since 2004. | 20 | Director of iCAD, Inc. (a surgical and Medical instruments and apparatus company) from 2006 to 2018; Director of Credit Suisse Funds (9) since 1999; Director of Credit Suisse Asset Management Income Fund, Inc. since 2005; and Director of Credit Suisse NEXT Fund since 2013; and Director of Credit Suisse Park View Fund until 2016. |
2020 Annual Report | 173 |
Management of the Funds (Unaudited) (continued)
As of October 31, 2020
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee** | Other Directorships Held by Trustee During Past 5 Years*** | ||||
Warren C. Smith**** Year of Birth: 1955 | Trustee since December 2007 | Mr. Smith has been a founding partner of MRB Partners Inc. (independent investment research and consultancy firm) since 2010. He has been a Director of Aberdeen Asia-Pacific Income Investment Company Limited (Canadian investment fund) since 1993. | 19 | None. | ||||
Trustees who are interested persons (as defined in the 1940 Act) of the trust ("Interested Trustees") | ||||||||
Martin Gilbert****† Year of Birth: 1955 | Trustee since December 2007 | Mr. Gilbert is Chairman of UK companies Revolut Limited (digital banking firm) and Toscafund Asset Management since 2020. He is also a non-executive director of a number of non-U.S. companies, including Glencore plc (producer and marketer of commodities), Saranac Partners (wealth management firm), Old Oak Holdings (Toscafund Asset Management's parent company) and PGA European Tour. Martin is a member of the International Advisory Board of British American Business. Previously, he was Chairman of the UK Prudential Regulation Authority's Practitioner Panel as well as a member of the International Advisory Panel of the Monetary Authority of Singapore. Prior to his retirement from Standard Life Aberdeen plc in 2020, Mr. Gilbert served as Vice Chairman of Standard Life Aberdeen plc and Chairman of Aberdeen Standard Investments Inc. since March 2019. He was a cofounder (and former Chief Executive) of Aberdeen Asset Management PLC, having been a Director since 1983. | 28 | None. |
* | Each Trustee holds office for an indefinite term until his successor is elected and qualified. |
** | The Aberdeen Fund Complex consists of the Trust, which currently consists of 19 portfolios, Aberdeen Asia-Pacific Income Fund, Inc., Aberdeen Global Income Fund, Inc., Aberdeen Australia Equity Fund, Inc., Aberdeen Emerging Markets Equity Income Fund, Inc., The India Fund, Inc., Aberdeen Japan Equity Fund, Inc., Aberdeen Income Credit Strategies Fund, Aberdeen Global Dynamic Dividend Fund, Aberdeen Total Dynamic Dividend Fund, Aberdeen Global Premier Properties Fund, Aberdeen Investment Funds, which currently consists of 4 portfolios, and Aberdeen Standard Investments ETFs, which currently consists of 2 portfolios. |
*** | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
**** | Each Trustee may be contacted by writing to the Trustee c/o Aberdeen Standard Investments Inc., 1900 Market Street, Suite 200, Philadelphia, Pennsylvania 19103, Attn: Alan Goodson. |
† | Mr. Gilbert is considered to be an "interested person" of the Trust as defined in the 1940 Act because of his affiliation with the Adviser. |
174 | 2020 Annual Report |
Management of the Funds (Unaudited) (continued)
As of October 31, 2020
Officers of the Trust
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | ||
Bev Hendry** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1953 | President and Chief Executive Officer (Since September 2014) | Currently Chairman of Americas for Standard Life Aberdeen PLC since 2018. Mr. Hendry was Chief Executive Officer – Americas for Aberdeen Asset Management PLC (2014-2018). | ||
Joseph Andolina** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1978 | Vice President and Chief Compliance Officer (Since March 2017) | Currently, Chief Risk Officer – Americas for ASII and serves as the Chief Compliance Officer for ASII. Prior to joining the Risk and Compliance Department, he was a member of ASII's Legal Department, where he served as US Counsel since 2012. | ||
Andrea Melia** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1969 | Treasurer, Chief Financial Officer, and Principal Accounting Officer (Since September 2009) | Currently, Vice President and Head of Fund Operations, Traditional Assets – Americas and Vice President for ASII. Ms. Melia joined ASII in September 2009. | ||
Megan Kennedy** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | Secretary and Vice President (Since September 2009) | Currently, Head of Product Management for ASII Ms. Kennedy joined ASII in 2005 as a Senior Fund Administrator. | ||
Lucia Sitar** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1971 | Vice President (Since December 2008) | Currently, Vice President and Managing U.S. Counsel for ASII Ms. Sitar joined ASII in July 2007 as U.S. Counsel. | ||
Alan Goodson** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | Vice President (Since March 2009) | Currently, Head of Product & Client Solutions – Americas, overseeing Product Management, Product Development and Client Solutions for ASII's registered and unregistered investment companies in the US, Brazil and Canada. Mr. Goodson joined ASII in 2000. | ||
Hugh Young** Aberdeen Standard Investments (Asia) Limited 21 Church Street #01-01 Capital Square Two Singapore 049480 Year of Birth: 1958 | Vice President (Since June 2011) | Currently, Managing Director of Aberdeen Standard Investments (Asia) Limited (since 1991) and member of the Executive Management Committee and Director of Standard Life Aberdeen plc (since 1991 and 2011, respectively). Mr. Young joined Aberdeen in 1991. |
2020 Annual Report | 175 |
Management of the Funds (Unaudited) (continued)
As of October 31, 2020
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | ||
Devan Kaloo** Aberdeen Asset Managers Limited Bow Bells House 1 Bread Street London EC4M 9HH Year of Birth: 1972 | Vice President (Since March 2019) | Currently, Global Head of Equities and Head of Global Emerging Markets Equities for Aberdeen Standard Investments. Mr. Kaloo joined ASI in 2000 as part of the Asian equities team in Singapore. | ||
Joanne Irvine** Aberdeen Asset Managers Limited Bow Bells House 1 Bread Street London EC4M 9HH Year of Birth: 1968 | Vice President (Since March 2019) | Currently, Deputy Head of Emerging Markets on the Global Emerging Markets Equity Team in London at Aberdeen Standard Investments. Ms. Irvine joined the company in 1996 in a group development role. | ||
Josh Duitz** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1970 | Vice President (Since March 2019) | Currently, Senior Vice President in the Global Equities Team at ASII. He joined ASII in 2018. | ||
Svitlana Gubriy** Standard Life Investments 6 St Andrew Square Edinburgh EH2 2BD Year of Birth: 1972 | Vice President (Since March 2019) | Currently, Head of Global REIT Funds at Aberdeen Standard Investments. Ms. Gubriy joined Aberdeen Standard Investments in 2005. | ||
Ben Moser** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1979 | Vice President (Since September 2018) | Currently, Head of Investor Services – US. Mr. Moser joined Aberdeen Standard Investments Inc. in July 2008. | ||
Chris Demetriou** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1983 | Vice President (Since December 2020) | Currently, Chief Executive Officer – Americas for ASI. Mr. Demetriou joined ASII in 2013, as a result of the acquisition of SVG, a FTSE 250 private equity investor based in London. | ||
Jim O'Connor** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1976 | Vice President (Since December 2020) | Currently, Executive Director for Aberdeen Standard Investments Inc. Mr. O'Connor joined ASII in 2010. | ||
Brian O'Neill** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1968 | Assistant Treasurer (Since September 2008) | Currently, Senior Fund Administration Manager – U.S. for Aberdeen Standard Investments Inc. Mr. O'Neill joined Aberdeen Standard Investments Inc. in 2008. |
176 | 2020 Annual Report |
Management of the Funds (Unaudited) (concluded)
As of October 31, 2020
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | ||
Eric Olsen** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1970 | Assistant Treasurer (Since December 2013) | Currently, Deputy Head of Fund Administration – U.S. for Aberdeen Standard Investments Inc. Mr. Olsen joined Aberdeen Standard Investments Inc. in August 2013. | ||
Andrew Kim** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1983 | Assistant Secretary (Since March 2017) | Currently, Senior Product Manager. Mr. Kim joined Aberdeen Standard Investments Inc. in August 2013. |
* | Each officer holds office for an indefinite term at the pleasure of the Board of Trustees and until his or her successor is elected and qualified. |
** | Mr. Hendry, Ms. Melia, Ms. Kennedy, Mr. Goodson, Mr. Young, Ms. Sitar, Mr. Andolina, Mr. Kaloo, Ms. Irvine, Mr. Duitz, Ms. Gubriy, Mr. Moser, Mr. Olsen , Mr. Demetriou, Mr. O'Connor, Mr. Kim and Mr. O'Neill hold officer position(s) in one or more of the following: Aberdeen Asia-Pacific Income Fund, Inc., Aberdeen Australia Equity Fund, Inc., Aberdeen Global Income Fund, Inc., Inc., Aberdeen Emerging Markets Equity Income Fund, Inc., The India Fund, Inc., Aberdeen Japan Equity Fund, Inc., Aberdeen Income Credit Strategies Fund, Aberdeen Global Dynamic Dividend Fund, Aberdeen Total Dynamic Dividend Fund, Aberdeen Global Premier Properties Fund, Aberdeen Investment Funds (consisting of 4 portfolios) and Aberdeen Standard Investments ETFs, which currently consists of 2 portfolios, each of which may also be deemed to be a part of the same "Fund Complex" as the Trust. |
2020 Annual Report | 177 |
Management Information
Trustees
Radhika Ajmera Martin J. Gilbert P. Gerald Malone, Chairman Neville J. Miles Rahn K. Porter Steven N. Rappaport Warren C. Smith
Investment Adviser
Aberdeen Standard Investments Inc. 1900 Market Street, Suite 200 Philadelphia, PA 19103
Fund Administrator
Aberdeen Standard Investments Inc. 1900 Market Street, Suite 200 Philadelphia, PA 19103
Transfer Agent
DST Asset Manager Solutions, Inc. 430 W. 7th Street, Ste. 219534 Kansas City, MO 64105-1407 | Distributor
Aberdeen Fund Distributors LLC 1900 Market Street, Suite 200 Philadelphia, PA 19103
Sub-Administrator, Custodian & Fund Accountant
State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111
Independent Registered Public Accounting Firm
KPMG LLP 1601 Market Street Philadelphia, PA 19103
Fund Counsel
Dechert LLP 1900 K Street N.W. Washington, D.C. 20006
|
Aberdeen Standard Investments Inc. 1900 Market Street, Suite 200 Philadelphia, PA 19103 aberdeenstandard.com/us
AOE-0140-AR |
Aberdeen Funds
Fixed Income Series
Annual Report
October 31, 2020
Aberdeen Emerging Markets Debt Fund
Class A – AKFAX n Class C – AKFCX n Class R – AKFRX n Institutional Class – AKFIX n Institutional Service Class – AKFSX
Aberdeen Global Absolute Return Strategies Fund (formerly, Aberdeen Global Unconstrained Fixed Income Fund)
Class A – CUGAX n Class C – CGBCX n Class R – AGCRX n Institutional Class – AGCIX n Institutional Service Class – CGFIX
Aberdeen Intermediate Municipal Income Fund
Class A – NTFAX n Class C – GTICX n Class R – ABERX n Institutional Class – ABEIX n Institutional Service Class – ABESX
Aberdeen Short Duration High Yield Municipal Fund
Class A – AAHMX n Institutional Class – AHYMX
Aberdeen Ultra Short Municipal Income Fund
Class A – ATOAX n Class A1 – ATOBX n Institutional Class – ATOIX
Beginning with reports for the period ending April 30, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds' shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from Aberdeen Funds or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Funds or your financial intermediary electronically following the instructions included with this disclosure or by contacting your financial intermediary or the Funds.
You may elect to receive all future reports in paper free of charge. You can inform the Funds or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions included with this disclosure or by contacting the Funds at (866) 667-9231 or your financial intermediary. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds held with your financial intermediary or with Aberdeen Funds.
Table of Contents
Market Review | Page 1 |
Aberdeen Emerging Markets Debt Fund | Page 3 |
Aberdeen Global Absolute Return Strategies Fund | Page 12 |
Aberdeen Intermediate Municipal Income Fund | Page 28 |
Aberdeen Short Duration High Yield Municipal Fund | Page 35 |
Aberdeen Ultra Short Municipal Income Fund | Page 47 |
Financial Statements | Page 56 |
Notes to Financial Statements | Page 74 |
Report of Independent Registered Public Accounting Firm | Page 95 |
Other Tax Information | Page 96 |
Shareholder Expense Examples | Page 97 |
Supplemental Information | Page 98 |
Management of the Funds | Page 101 |
Investors should carefully consider a fund's investment objectives, risks, fees, charges and expenses before investing any money. To obtain this and other fund information, please call 866-667-9231 to request a prospectus, or download a prospectus at https://www.aberdeenstandard.com/en-us/us/investor/fund-centre. Please read it carefully before investing any money.
Investing in mutual funds involves risk, including possible loss of principal.
Aberdeen Funds is distributed by Aberdeen Fund Distributors LLC, Member FINRA, 1900 Market Street, Suite 200, Philadelphia, PA 19103.
Aberdeen Standard Investments Inc. (ASII) has been registered as an investment adviser under the Investment Advisers Act of 1940 since August 23, 1995.
The complete schedule of portfolio holdings for each fund of Aberdeen Funds (each a "Fund" and collectively, the "Funds") is included in the Funds' semi-annual and annual reports to shareholders. Aberdeen Funds also files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q (or as an exhibit to its reports on Form N-Q's successor form, Form N-PORT). The Funds' Form N-Q and Form N-PORT filings are available on the Commission's website at http://www.sec.gov and the Funds make the information on Form N-Q (or the exhibit to Form N-PORT) available to shareholders on upon request without charge by calling 1-866-667-9231.
Statement Regarding Availability of Proxy Voting Record.
Information regarding the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-667-9231. The information is also included in the Funds' Statement of Additional Information, which is available on the Funds' website at https://www.aberdeenstandard.com/en-us/us/investor/fund-centre and on the Commission's website at www.sec.gov.
Information relating to how each Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available by August 30 of the relevant year: (i) upon request and without charge by calling 1-866-667-9231; and (ii) on the Commission's website at www.sec.gov.
Market Review
Global financial markets experienced unprecedented volatility during the 12-month period ended October 31, 2020. Both the global equity and fixed-income markets performed well between November 2019 and January 2020, as supportive central bank monetary policy globally and hopes of a breakthrough in the U.S.-China trade war helped allay investors' fears about economic growth. Additionally, the decisive outcome of the election in the UK in December 2019 removed much of the political wrangling and uncertainty related to the UK's withdrawal from the European Union (Brexit).
However, in February 2020, attention shifted to the coronavirus (COVID-19) outbreak as it spread from China to engulf the rest of the world. Governments worldwide responded with drastic containment measures which all but crippled the global economy. As global growth forecasts plummeted, many central banks sought to ease the pain by slashing interest rates and implementing aggressive support programs. The U.S. Federal Reserve (Fed) reduced its benchmark interest rate three times, taking it to near 0% – a level last seen in the aftermath of the global financial crisis in 2008.
U.S. lawmakers enacted the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package in an effort to counter the economic effects of coronavirus. Additionally, the European Union agreed to raise US$857 billion from financial markets in an effort to support member states and sectors most affected by the pandemic, while the European Central Bank extended its US$1.6 trillion emergency bond-purchase program to mid-2021. These measures helped investor sentiment to recover through the summer of 2020, along with subsiding infection rates, which allowed some easing of lockdown restrictions in many countries. Consequently, global economic activity rebounded strongly, propelling equity prices higher. However, a resurgence of infections, particularly in the U.S. and Europe, subsequently forced many nations to reimpose movement restrictions. This weighed heavily on global equity markets towards the end of the reporting period.
Equity prices in developed markets globally recorded modest gains over the 12-month period ended October 31, 2020, with the Morgan Stanley Capital International (MSCI) All-Country (AC) World Index (Net Dividends),1 a global equity market benchmark, returning 4.9%. The Asia-Pacific region, as measured by the MSCI AC Asia-Pacific ex- Japan Index (Net Dividends),2 was the strongest-performing global stock market region for the reporting period, returning 11.8%, followed by the 9.7% return of the U.S. broader-market S&P 500 Index.3 Conversely, Japanese and European equities significantly underperformed the overall global stock market, with the Tokyo Stock Price Index (TOPIX) (Net Dividends)4 posting a virtually flat return of -0.01%, and the MSCI Europe Index (Net Dividends)5 returning -9.3% for the reporting period.
In the Asia-Pacific region, North Asian markets, including China, South Korea and Taiwan, outperformed their peers across Asia over the reporting period as they were among the first to contain the virus effectively. Similarly, the New Zealand market performed well as the government acted swiftly to get the virus under control. In contrast, Southeast Asian markets underperformed during the reporting period. The Singapore market declined on investors' concerns that its open
economy would be affected by sluggish global demand due to the pandemic. Indonesia and the Philippines struggled to slow COVID-19 infections.
The information technology sector led the rally in the U.S. equity market for the reporting period, garnering a double-digit return. Conversely, the energy sector posted a notable decline and was the weakest- performing sector. The COVID-19 pandemic has significantly hampered the U.S. economy. U.S. gross domestic product (GDP) fell 31.4% in the second quarter of 2020, attributable mainly to downturns in consumer spending, exports and nonresidential fixed investment.6 The economy subsequently expanded by 33.1% in the third quarter of 2020, due largely to businesses reopening and the resumption of other activities that were postponed or restricted due to the pandemic.7 There were notable increases in consumer spending, private inventory investment and exports.
Emerging-market (EM) equities, as represented by the MSCI Emerging Markets Index (Net Dividends),8 outperformed their developed-market counterparts, returning 8.3% for the reporting period. Following a COVID-19-induced selloff in the first quarter of 2020, EM stock prices rebounded in the second and third quarters of 2020, after initial lockdowns seemingly slowed infection rates in most affected areas; this led many economies to gradually reopen for business. A key factor aiding the rally in EM stocks during this period was the unprecedented monetary and fiscal policy support by central banks and governments worldwide.
International real estate stocks, as measured by the Financial Times Stock Exchange European Public Real Estate Association/National Association of Real Estate Investment Trusts (FTSE EPRA/NAREIT) Global ex U.S. Index,9 moved sharply lower, returning -19.0% over the reporting period. The real estate market downturn was prompted by the emergence and spread of COVID-19 in Europe and the Americas. The listed property market was particularly hard hit as much of the sector includes venues where people congregate, such as malls or hotels, which faced direct, negative impacts from lockdowns and restrictions on movement. As people around the world were forced to work from their homes, the office space sector also came under pressure amid speculation that corporations will opt to rent less office in the future in favor of increased agile working arrangements. The listed real estate markets bottomed in March 2020, but continued a gradual recovery as investors adjusted their expectations for the post-COVID-19 world.
Fixed-income securities in developed markets modestly outperformed their global equity counterparts over the reporting period, with the Bloomberg Barclays Global Aggregate Bond Index,10 returning 5.6%. Global investment-grade11 bonds, as represented by the ICE Bank of America (BofA) Global Corporate Index,12 returned 6.3%, outperforming the 2.9% return of their global high-yield counterparts, as measured by the ICE BofA Global High Yield Constrained Index,13 for the reporting period. As credit spreads widened significantly, demand for "safe-haven" assets such as developed-market government bonds soared, driving yields down sharply. This was compounded by central banks globally cutting interest rates to record lows, along with an unprecedented amount of
2020 Annual Report | 1 |
Market Review (concluded)
coordinated fiscal support from governments worldwide. The Fed reduced its benchmark interest rate to near 0% and proposed trillions of dollars in COVID-19 support. The Asia-Pacific fixed-income markets recorded positive total returns for the reporting period, driven mainly by local interest rates. In local-currency government bonds, yields in the short end of the curve declined more than those in the long end as monetary policy supported demand for short-dated bonds, while supply pressures to finance the government rescue packages weighed on longer-dated issues. Emerging-market debt outside Asia also experienced difficulty during the reporting period, but with considerable divergence by country. The performance of emerging market local-currency bonds was hampered by currency weakness in several countries.
Outlook
In our view, the short-term global outlook remains fraught with uncertainty. On the political front, former Vice President Joe Biden's victory in the U.S. presidential election in November represents a change in the Executive Branch, but the remaining runoff elections for both of Georgia's U.S. Senate seats in early January 2021, continue to leave the political structure of the Legislative Branch in limbo. The Democratic Party needs both seats to gain a 50-50 split in the upper house, aided by tie-breaking votes from Vice President-elect Kamala Harris, for a technical "sweep" of both houses of Congress. The market views a split Congress as the most likely outcome and, therefore, the continuation of limited stimulus combined with supportive actions from the Fed perpetuating "lower for longer" interest rates. While Biden's initial choices for Cabinet and staff positions point to a politically centrist approach, overall policy implementation will remain uncertain until the Georgia Senate election is decided, as it dictates Biden's ability to push more of his agenda on, among other things, taxes, government-supported energy transition, healthcare, trade and infrastructure.
Regarding the COVID-19 pandemic, news that a vaccine may soon be widely available lifted investor sentiment in late 2020. We expect the approval and successful distribution of a vaccine to make a meaningful difference in Aberdeen Standard Investments' global economic growth forecasts going forward.
Aberdeen Standard Investments
1 | The MSCI AC World Index tracks the performance of large- and mid-cap stocks across 23 developed-market countries. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
2 | The MSCI AC Asia Pacific ex Japan Index tracks the performance of large and mid-cap stocks across two of three developed-market countries (excluding Japan) and nine emerging markets countries in Asia. |
3 | The S&P 500 Index is an unmanaged index considered representative of the U.S. stock market. |
4 | The Tokyo Stock Price Index (TOPIX) is a market capitalization-weighted index of large- and mid-sized companies listed on the Tokyo Stock Exchange. |
5 | The MSCI Europe Index tracks the performance of large- and mid-cap stocks across 15 developed-market countries in Europe. |
6 | Source: U.S. Department of Commerce, July 2020. |
7 | Source: U.S. Department of Commerce, October 2020. |
8 | The MSCI Emerging Markets Index tracks the performance of large and mid-cap stocks across 24 emerging-market countries. |
9 | The FTSE EPRA/NAREIT Global ex U.S. Index is an unmanaged index considered representative of real estate companies and real estate investment trusts (REITs) outside the U.S. |
10 | The Bloomberg Barclays Global Aggregate Bond Index is a flagship measure of global investment grade debt from 24 local-currency bond markets. |
11 | Companies whose bonds are rated as "investment-grade" usually have a lower chance of defaulting on their debt than those rated as "non-investment grade." These bonds generally are issued by long-established companies with strong balance sheets. Bonds rated BBB or above by major credit rating agencies are considered investment-grade. |
12 | The ICE BofA Global Corporate Index tracks the performance of global investment-grade bonds. |
13 | The ICE BofA Global High Yield Constrained Index tracks the performance of U.S. dollar-, Canadian dollar-, British pound- and euro-denominated below-investment-grade corporate debt publicly issued in the major domestic or eurobond markets. |
2 | 2020 Annual Report |
Aberdeen Emerging Markets Debt Fund (Unaudited)
Aberdeen Emerging Markets Debt Fund (Institutional Class shares net of fees) returned -1.29% for the 12-month period ended October 31, 2020, versus the 0.98% return of its benchmark, the J.P. Morgan Emerging Markets Bond (EMBI) Global Diversified Index, during the same period.
Emerging-market (EM) debt recorded modest gains over the reporting period, but with considerable divergence by country. On a global basis, hard-currency bonds outperformed local-currency issues, driven primarily by currency weakness in several countries.
Early in the reporting period, the U.S.-China trade war dominated the newsflow. The world's two largest economies agreed to a trade deal in late 2019, some tariffs were reversed, and the prospect of rising global trade buoyed EM assets worldwide. This optimism ended in early 2020, however, as the coronavirus (COVID-19) became a global pandemic. Furthermore, declining oil prices contributed to losses in major energy-producing countries. The Brent Crude oil price fell dramatically in February 2020, as the rise of COVID-19 fueled investors' fears of a global economic slowdown, coupled with an oil-price war between Russia and Saudi Arabia. The EM debt to U.S. Treasury yield spread widened considerably in March 2020, as economic effects became visible. In the last six months of the reporting period, markets began to recover. Bonds reacted positively to interest-rate cuts – both from the U.S. Federal Reserve and at a local EM country level – to support struggling economies. However, COVID-19 cases again began to rise, most notably in India and Latin America.
Mexico, the largest component of the J.P. Morgan EMBI Global Diversified Index, declined slightly over the reporting period. The country was hit with a slew of credit downgrades,1 including to state-owned oil company Petróleos Mexicanos (Pemex). Also in Latin America, the Brazilian real slumped over 30% over the reporting period, as a combination of central bank monetary policy easing and deteriorating external conditions offset appreciation in local-currency bond prices. In contrast, Asia was a strong-performing region during the reporting period. Indonesia and Malaysia garnered positive returns for both hard- and local-currency bonds.
The Fund underperformed its benchmark, the J.P. Morgan EMBI Global Diversified Index, over the 12-month period ended October 31, 2020. Overall country allocation and currency exposure detracted from Fund performance, while credit and sector allocations, as well as security selection, had a positive impact.
Latin America was the weakest market performer for the reporting period. The Fund's exposure to Ecuador was the biggest detractor from performance, although this was partially offset by security selection in the country. The Fund's position in Brazil also weighed on performance for the reporting period, attributable mainly to the
exposure to the Brazilian real. In Eastern Europe, the Fund's exposure to the Russian ruble had a negative impact on performance.
Conversely, the lack of exposure to Lebanon and overweight positions relative to the benchmark in Qatar, Indonesia and Saudi Arabia contributed positively to Fund performance for the reporting period. Fund performance also benefited from security selection in Argentina and Angola, as well as sector allocation in Serbia.
Regarding portfolio activity, early in the reporting period, we increased the Fund's hard-currency exposure to Mozambique, Qatar, Bahrain, Pakistan and Belarus. Conversely, we reduced the positioning in Gabon, Serbia, Sri Lanka, the Dominican Republic and Papua New Guinea. Later in the period, we added to the Fund's holdings in Romania, Costa Rica, Panama, Nigeria, Uruguay and Ukraine. We also established a new position in Barbados after the government exited default and secured an International Monetary Fund (IMF) program, and Angola, which received a positive IMF assessment. However, we decreased the Fund's exposure to hard-currency bonds from Costa Rica, Jamaica, Jordan, Kenya, Tunisia, Pakistan, Saudi Arabia, and Senegal. We also exited all of the Fund's exposure to Turkey due to our concerns of the government's large fiscal financing needs, and we reduced the holding in Sri Lanka due to restructuring risk. We participated in new issues from Bermuda, Bahrain and Sharjah, one of the United Arab Emirates, which we believed were attractively priced. We also switched out of shorter-dated bonds in El Salvador in favor of its new 30-year bonds.
In the local-currency space, we added to the Fund's positions in South Africa, Russia and Brazil. Additionally, we reduced the Fund's duration2 in Indonesia and decreased the exposure to Mexico. We reduced our Indonesian rates position to add Brazilian rates duration given the central bank's dovish bias not reflected in market prices. We also invested in long-dated bonds in Russia based on valuations.
In terms of quasi-sovereign bonds, we added to the Fund's holdings in Pemex, Mexico's state-owned oil and gas company, Kazakhstan-based KazMunayGas Exploration Production JSC and Eskom Holdings SOC, a South African electricity company. Conversely, we trimmed the Fund's exposure to Bahrain via Oil & Gas Holding Co., and reduced the positions in Investment Corporation of Dubai and Zambia-based First Quantum Minerals Ltd. We also took some profits from the Fund's holdings in Indonesian quasi-sovereign bonds as the spread versus the country's sovereign bond compressed3 toward the lowest historical range, and we subsequently initiated a holding in Huarong Asset Management Co. Ltd. in China.
Within the corporate sector, we added to the Fund's holding in Colombia-based oil and gas company Ecopetrol S.A., and carried out a switch from Malaysia-based TNB Global Ventures Capital Bhd, which issues debt securities to repay existing credit facilities,4 refinance
1 | S&P Global Ratings, Moody's Corp. and Fitch Ratings are independent, unaffiliated research companies that rate fixed income securities on the basis of risk and the borrower's ability to make interest payments. S&P and Fitch credit ratings are expressed as letter grades that range from "AAA" to "D" to communicate the agency's opinion of relative level of credit risk. Moody's assigns ratings from Aaa to C, with Aaa being the highest quality and C the lowest quality. |
2 | Duration is an estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (i.e., higher risk) in relation to interest-rate movements. |
3 | Spread compression refers to a decrease in yields between differing debt securities of varying maturities, credit ratings, issuer, or risk level. |
4 | A credit facility is a type of business loan which allows the borrowing business access funds over an extended period of time rather than reapplying for a loan each time it needs money. |
2020 Annual Report | 3 |
Aberdeen Emerging Markets Debt Fund (Unaudited) (concluded)
indebtedness, and for acquisition purposes, to China-based construction company Longfor Group Holdings Ltd.
The Fund's use of derivatives contributed approximately 0.60% to the performance of the Fund.
The resurgence of COVID-19 cases in some countries is leading to renewed containment measures. We believe that governments worldwide will be better prepared this time and should be able to avoid the full lockdown restrictions seen in March 2020. As we move into 2021, we anticipate that economic activity will continue to normalize. However, we believe that cautiousness in consumer and investor sentiment is likely to persist as the world learns to live with COVID-19 for a while longer. In our view, fiscal and monetary policy easing should continue to provide support as central banks globally keep liquidity conditions flush and governments roll out fiscal measures. In our view, risks to the EM debt asset class include the results of the U.S. presidential election that was held in November 2020, which will be key in establishing the course of the U.S. foreign policy agenda with respect to China and Russia, as well as the continued debate around private-sector involvement in the G20 Debt Service Suspension Initiative, which calls upon bilateral and private-sector creditors to provide debt- service relief to select EM borrowers.
Portfolio Management:
Emerging Markets Debt Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 3.00% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Fixed income securities are subject to certain risks including, but not limited to: interest rate (changes in interest rates may cause a decline in the market value of an investment), credit (changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral), prepayment (debt issuers may repay or refinance their loans or obligations earlier than anticipated), extension (principal repayments may not occur as quickly as anticipated, causing the expected maturity of a security to increase). and issuer risk (the value of a security may decline for reasons related to the issuer, such as management performance, financial leverage and reduced demand for the issuer's goods or services). The Fund's investments in high yield bonds and other lower-rated securities will subject the Fund to substantial risk of loss.
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to risks associated with less stringent accounting and regulatory standards, the impact of currency exchange rate fluctuations, political and economic instability, reduced information about issuers, higher transaction costs and delayed settlement. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
The Fund's performance may be more volatile than a diversified fund because it may invest a greater percentage of its total assets in the securities of a single issuer.
Derivatives are speculative and may hurt the Fund's performance. They present the risk of disproportionately increased losses and/or reduced gains when the financial asset or measure to which the derivative is linked changes in unexpected ways.
Please read the prospectus for more detailed information regarding these and other risks.
4 | 2020 Annual Report |
Aberdeen Emerging Markets Debt Fund (Unaudited)
Average Annual Total Return (For periods ended October 31, 2020) | 1 Yr. | 5Yr. | Inception1 | ||
Class A | w/o SC | (1.53%) | 4.85% | 2.54% | |
w/SC2 | (4.48%) | 4.21% | 2.15% | ||
Class C | w/o SC | (2.34%) | 4.16% | 1.84% | |
w/SC3 | (3.29%) | 4.16% | 1.84% | ||
Class R4 | w/o SC | (1.94%) | 4.57% | 2.28% | |
Institutional Service Class4 | w/o SC | (1.36%) | 5.21% | 2.86% | |
Institutional Class4 | w/o SC | (1.29%) | 5.22% | 2.86% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | The Fund commenced operations on November 1, 2012. |
2 | A 3.00% front-end sales charge was deducted. Prior to February 28, 2019 the front-end sales charge was 4.25%. |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
4 | Not subject to any sales charges. |
Performance of a $1,000,000* Investment (as of October 31, 2020)
* | Minimum Initial Investment |
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Emerging Markets Debt Fund, the J.P. Morgan Emerging Markets Bond Index (EMBI) Global Diversified Index and the Consumer Price Index (CPI) since inception. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The J.P. Morgan EMBI Global Diversified Index is an alternatively weighted index that assigns a larger weight to less liquid issues from countries with smaller debt stocks and limits the weights of those index countries with larger debt stocks by only including a specified portion of these countries' eligible current face amounts of debt outstanding. The index consists of U.S. dollar-denominated Brady bonds, Eurobonds, and traded loans issued by sovereign and quasi-sovereign entities issued in emerging markets countries.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
2020 Annual Report | 5 |
Aberdeen Emerging Markets Debt Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||
Government Bonds | 75.6% | |
Corporate Bonds | 21.3% | |
Short-Term Investment | 1.5% | |
Warrants | –% | |
Other Assets in Excess of Liabilities | 1.6% | |
100.0% |
Amounts listed as "–" are 0% or round to 0%
The following chart summarizes the composition of the Fund's portfolio, in Bloomberg Industries, expressed as a percentage of net assets.
Top Industries | ||
Oil, Gas & Consumable Fuels | 6.3% | |
Commercial Banks | 2.5% | |
Diversified Financial Services | 2.0% | |
Energy Equipment & Services | 1.9% | |
Real Estate | 1.8% | |
Chemicals | 1.0% | |
Transportation | 1.0% | |
Electric Utilities | 0.9% | |
Food Products | 0.5% | |
Paper & Forest Products | 0.5% | |
Other | 81.6% | |
100.0% |
Top Holdings* | ||
Perusahaan Penerbit SBSN Indonesia III 09/10/2024 | 2.7% | |
Ukraine Government International Bond 09/01/2024 | 2.6% | |
Qatar Government International Bond 03/14/2049 | 2.3% | |
Brazil Notas do Tesouro Nacional, Series B 08/15/2024 | 2.3% | |
Brazil Notas do Tesouro Nacional Serie F 01/01/2031 | 2.2% | |
Bahamas Government International Bond 11/21/2028 | 2.1% | |
Indonesia Government International Bond 02/17/2037 | 2.0% | |
Saudi Government International Bond 04/17/2049 | 1.9% | |
Russian Federal Bond – OFZ, Series 6228 04/10/2030 | 1.7% | |
Dominican Republic International Bond 01/27/2045 | 1.7% | |
Other | 78.5% | |
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top Countries | ||
Mexico | 6.5% | |
Brazil | 6.2% | |
Indonesia | 5.9% | |
Qatar | 5.8% | |
United Arab Emirates | 5.2% | |
Ukraine | 4.8% | |
Egypt | 4.6% | |
Saudi Arabia | 3.6% | |
South Africa | 3.3% | |
Ecuador | 3.1% | |
Other | 51.0% | |
100.0% |
6 | 2020 Annual Report |
Statement of Investments
October 31, 2020
Aberdeen Emerging Markets Debt Fund
Shares or Principal Amount | Value (US$) | |||||||
CORPORATE BONDS (21.3%) | ||||||||
BAHRAIN (0.4%) | ||||||||
Oil, Gas & Consumable Fuels (0.4%) | ||||||||
Oil and Gas Holding Co. BSCC (USD), 7.63%, 11/07/2024 (a) | $ | 200,000 | $ | 213,491 | ||||
BRAZIL (1.0%) | ||||||||
Food Products (0.5%) | ||||||||
BRF SA (USD), 4.88%, 01/24/2030 (a) | 260,000 | 260,395 | ||||||
Paper & Forest Products (0.5%) | ||||||||
Suzano Austria GmbH (USD), 7.00%, 03/16/2047 (a) | 200,000 | 242,252 | ||||||
502,647 | ||||||||
CHINA (1.4%) | ||||||||
Real Estate (1.4%) | ||||||||
Country Garden Holdings Co. Ltd. (USD), 5.13%, 01/17/2025 (a) | 450,000 | 470,457 | ||||||
Longfor Group Holdings Ltd. (USD), 3.95%, 09/16/2029 (a) | 230,000 | 244,214 | ||||||
714,671 | ||||||||
COLOMBIA (0.8%) | ||||||||
Commercial Banks (0.3%) | ||||||||
Bancolombia SA, (fixed rate to 10/18/2022, variable rate thereafter) (USD), 4.88%, 10/18/2027 | 200,000 | 196,652 | ||||||
Oil, Gas & Consumable Fuels (0.5%) | ||||||||
Ecopetrol SA (USD), 6.88%, 04/29/2030 | 210,000 | 252,840 | ||||||
449,492 | ||||||||
GEORGIA (1.9%) | ||||||||
Energy Equipment & Services (0.9%) | ||||||||
Georgian Oil and Gas Corp. JSC (USD), 6.75%, 04/26/2021 (a)(b) | 490,000 | 495,145 | ||||||
Transportation (1.0%) | ||||||||
Georgian Railway JSC (USD), 7.75%, 07/11/2022 (a) | 480,000 | 499,200 | ||||||
994,345 | ||||||||
INDIA (0.5%) | ||||||||
Commercial Banks (0.5%) | ||||||||
HDFC Bank Ltd. (INR), 8.10%, 03/22/2025 (a)(b) | 20,000,000 | 280,465 | ||||||
INDONESIA (1.2%) | ||||||||
Oil, Gas & Consumable Fuels (0.6%) | ||||||||
Pertamina Persero PT (USD), 6.00%, 05/03/2042 (a) | 250,000 | 305,000 | ||||||
Sovereign Agency (0.6%) | ||||||||
Lembaga Pembiayaan Ekspor Indonesia (USD), 3.88%, 04/06/2024 (a) | 290,000 | 308,705 | ||||||
613,705 |
Shares or Principal Amount | Value (US$) | |||||||
KAZAKHSTAN (0.4%) | ||||||||
Oil, Gas & Consumable Fuels (0.4%) | ||||||||
Tengizchevroil Finance Co. International Ltd. (USD), 4.00%, 08/15/2026 (a)(c) | $ | 200,000 | $ | 212,740 | ||||
KUWAIT (0.5%) | ||||||||
Chemicals (0.5%) | ||||||||
MEGlobal Canada ULC (USD), 5.88%, 05/18/2030 (a) | 230,000 | 273,465 | ||||||
MEXICO (4.2%) | ||||||||
Commercial Banks (0.4%) | ||||||||
BBVA Bancomer SA., (fixed rate to 09/13/2029, variable rate thereafter) (USD), 5.88%, 09/13/2034 (a) | 230,000 | 238,710 | ||||||
Oil, Gas & Consumable Fuels (3.4%) | ||||||||
Petroleos Mexicanos | ||||||||
(USD), 6.88%, 08/04/2026 | 200,000 | 191,980 | ||||||
(USD), 6.50%, 03/13/2027 | 800,000 | 743,824 | ||||||
(USD), 6.84%, 01/23/2030 | 180,000 | 160,632 | ||||||
(USD), 5.95%, 01/28/2031 | 80,000 | 66,960 | ||||||
(USD), 6.50%, 06/02/2041 | 200,000 | 154,800 | ||||||
(USD), 6.95%, 01/28/2060 | 570,000 | 445,740 | ||||||
1,763,936 | ||||||||
Real Estate Investment Trust (REIT) Funds (0.4%) | ||||||||
Trust F/1401 (USD), 6.39%, 01/15/2050 (a) | 220,000 | 228,525 | ||||||
2,231,171 | ||||||||
MOROCCO (0.5%) | ||||||||
Chemicals (0.5%) | ||||||||
OCP SA (USD), 6.88%, 04/25/2044 (a) | 200,000 | 250,524 | ||||||
NIGERIA (0.4%) | ||||||||
Engineering & Construction (0.4%) | ||||||||
IHS Netherlands Holdco BV (USD), 8.00%, 09/18/2027 (a) | 200,000 | 203,000 | ||||||
PANAMA (0.4%) | ||||||||
Commercial Banks (0.4%) | ||||||||
Global Bank Corp., (fixed rate to 04/16/2028, variable rate thereafter) (USD), 5.25%, 04/16/2029 (a) | 198,000 | 210,573 | ||||||
PERU (0.4%) | ||||||||
Metals & Mining (0.4%) | ||||||||
Nexa Resources SA (USD), 5.38%, 05/04/2027 (a) | 200,000 | 210,600 | ||||||
RUSSIA (1.0%) | ||||||||
Diversified Financial Services (0.5%) | ||||||||
Gtlk Europe Capital DAC (USD), 4.65%, 03/10/2027 (a) | 270,000 | 266,117 | ||||||
Oil, Gas & Consumable Fuels (0.5%) | ||||||||
Gazprom Neft OAO Via GPN Capital SA (USD), 4.38%, 09/19/2022 (a) | 250,000 | 260,327 | ||||||
526,444 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 7 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Emerging Markets Debt Fund
Shares or Principal Amount | Value (US$) | |||||||
CORPORATE BONDS (continued) | ||||||||
SAUDI ARABIA (0.4%) | ||||||||
Oil, Gas & Consumable Fuels (0.4%) | ||||||||
Saudi Arabian Oil Co. (USD), 4.25%, 04/16/2039 (a) | $ | 200,000 | $ | 227,354 | ||||
SOUTH AFRICA (1.3%) | ||||||||
Diversified Telecommunication Services (0.4%) | ||||||||
Liquid Telecommunications Financing PLC (USD), 8.50%, 07/13/2022 (a) | 200,000 | 203,280 | ||||||
Electric Utilities (0.9%) | ||||||||
Eskom Holdings SOC Ltd. (USD), 7.13%, 02/11/2025 (a) | 530,000 | 495,334 | ||||||
698,614 | ||||||||
TUNISIA (0.9%) | ||||||||
Commercial Banks (0.9%) | ||||||||
Banque Centrale de Tunisie International Bond (EUR), 6.38%, 07/15/2026 (a) | 469,000 | 464,288 | ||||||
UKRAINE (0.4%) | ||||||||
Iron/Steel (0.4%) | ||||||||
Metinvest BV (USD), 8.50%, 04/23/2026 (a) | 200,000 | 201,540 | ||||||
UNITED ARAB EMIRATES (3.2%) | ||||||||
Airlines (0.3%) | ||||||||
Zahidi Ltd. (USD), 4.50%, 03/22/2028 (a)(c) | 184,743 | 182,543 | ||||||
Diversified Financial Services (1.5%) | ||||||||
ICD Sukuk Co. Ltd. (USD), 5.00%, 02/01/2027 (a) | 730,000 | 779,860 | ||||||
Energy Equipment & Services (1.0%) | ||||||||
Abu Dhabi Crude Oil Pipeline LLC (USD), 4.60%, 11/02/2047 (a)(c) | 200,000 | 238,268 | ||||||
Galaxy Pipeline Assets Bidco Ltd. (USD), 2.63%, 03/31/2036 (a)(c) | 264,000 | 263,365 | ||||||
501,633 | ||||||||
Real Estate (0.4%) | ||||||||
MAF Global Securities Ltd., (fixed rate to 09/07/2022, variable rate thereafter) (USD), 5.50%, 09/07/2022 (a)(d) | 200,000 | 196,060 | ||||||
1,660,096 | ||||||||
VENEZUELA (0.1%) | ||||||||
Oil, Gas & Consumable Fuels (0.1%) | ||||||||
Petroleos de Venezuela SA | ||||||||
(USD), 0.00%, 05/16/2024 | 1,140,000 | 41,040 | ||||||
(USD), 0.00%, 11/15/2026 | 525,236 | 17,858 | ||||||
58,898 | ||||||||
Total Corporate Bonds | 11,198,123 | |||||||
GOVERNMENT BONDS (75.6%) | ||||||||
ALBANIA (0.5%) | ||||||||
Albania Government International Bond (EUR), 3.50%, 06/16/2027 (a) | 237,000 | 284,303 |
Shares or Principal Amount | Value (US$) | |||||||
ANGOLA (1.4%) | ||||||||
Angolan Government International Bond | ||||||||
(USD), 9.50%, 11/12/2025 (a) | $ | 580,000 | $ | 495,960 | ||||
(USD), 8.25%, 05/09/2028 (a) | 290,000 | 227,911 | ||||||
723,871 | ||||||||
ARGENTINA (2.7%) | ||||||||
Argentine Republic Government International Bond | ||||||||
(USD), 1.00%, 07/09/2029 | 174,073 | 71,544 | ||||||
VRN (USD), 0.13%, 07/09/2030 (e) | 1,210,284 | 441,754 | ||||||
VRN (USD), 0.13%, 07/09/2035 (e) | 2,373,111 | 776,007 | ||||||
(USD), 0.00%, 12/15/2035 | 533,627 | 1,334 | ||||||
VRN (USD), 0.13%, 01/09/2038 (e) | 392,218 | 146,297 | ||||||
1,436,936 | ||||||||
ARMENIA (1.3%) | ||||||||
Republic of Armenia International Bond | ||||||||
(USD), 7.15%, 03/26/2025 (a) | 400,000 | 427,368 | ||||||
(USD), 3.95%, 09/26/2029 (a) | 260,000 | 244,962 | ||||||
672,330 | ||||||||
BAHAMAS (2.1%) | ||||||||
Bahamas Government International Bond (USD), 6.00%, 11/21/2028 (a) | 1,270,000 | 1,098,550 | ||||||
BAHRAIN (1.1%) | ||||||||
Bahrain Government International Bond (USD), 5.45%, 09/16/2032 (a) | 600,000 | 585,701 | ||||||
BARBADOS (0.2%) | ||||||||
Barbados Government International Bond (USD), 6.50%, 10/01/2029 (a)(c) | 127,300 | 122,208 | ||||||
BELARUS (2.0%) | ||||||||
Republic of Belarus International Bond | ||||||||
(USD), 6.88%, 02/28/2023 (a) | 360,000 | 355,552 | ||||||
(USD), 6.20%, 02/28/2030 (a) | 220,000 | 207,239 | ||||||
Republic of Belarus Ministry of Finance | ||||||||
(USD), 5.88%, 02/24/2026 (a) | 259,000 | 245,491 | ||||||
(USD), 6.38%, 02/24/2031 (a) | 261,000 | 245,888 | ||||||
1,054,170 | ||||||||
BELIZE (0.4%) | ||||||||
Belize Government International Bond (USD), 4.94%, 02/20/2034 (a)(b)(c) | 450,863 | 198,379 | ||||||
BENIN (1.0%) | ||||||||
Benin Government International Bond (EUR), 5.75%, 03/26/2026 (a)(c) | 450,000 | 502,033 | ||||||
BRAZIL (5.2%) | ||||||||
Brazil Notas do Tesouro Nacional | ||||||||
Series B (BRL), 6.00%, 08/15/2024 (f) | 1,780,000 | 1,185,097 | ||||||
Series F (BRL), 10.00%, 01/01/2029 | 1,749,000 | 345,883 | ||||||
Brazil Notas do Tesouro Nacional Serie F (BRL), 10.00%, 01/01/2031 | 5,901,000 | 1,172,992 | ||||||
2,703,972 |
See accompanying Notes to Financial Statements.
8 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Emerging Markets Debt Fund
Shares or Principal Amount | Value (US$) | |||||||
GOVERNMENT BONDS (continued) | ||||||||
COLOMBIA (0.9%) | ||||||||
Colombia Government International Bond (COP), 7.00%, 06/30/2032 (a) | $ | 1,750,000,000 | $ | 481,880 | ||||
DOMINICAN REPUBLIC (2.3%) | ||||||||
Dominican Republic International Bond | ||||||||
(USD), 6.85%, 01/27/2045 (a) | 820,000 | 878,466 | ||||||
(USD), 5.88%, 01/30/2060 (a) | 360,000 | 343,800 | ||||||
1,222,266 | ||||||||
ECUADOR (3.1%) | ||||||||
Ecuador Government International Bond | ||||||||
(USD), 0.00%, 07/31/2030 (a)(c)(g) | 182,263 | 82,931 | ||||||
VRN (USD), 0.50%, 07/31/2030 (a)(c)(e) | 646,240 | 429,756 | ||||||
VRN (USD), 0.50%, 07/31/2035 (a)(c)(e) | 1,475,994 | 806,262 | ||||||
VRN (USD), 0.50%, 07/31/2040 (a)(c)(e) | 593,440 | 293,759 | ||||||
1,612,708 | ||||||||
EGYPT (4.6%) | ||||||||
Egypt Government International Bond | ||||||||
(USD), 7.60%, 03/01/2029 (a) | 820,000 | 852,226 | ||||||
(EUR), 5.63%, 04/16/2030 (a) | 460,000 | 496,737 | ||||||
(USD), 8.50%, 01/31/2047 (a) | 200,000 | 198,584 | ||||||
(USD), 7.90%, 02/21/2048 (a) | 250,000 | 236,612 | ||||||
(USD), 8.70%, 03/01/2049 (a) | 600,000 | 603,900 | ||||||
2,388,059 | ||||||||
EL SALVADOR (2.7%) | ||||||||
El Salvador Government International Bond | ||||||||
(USD), 5.88%, 01/30/2025 (a) | 875,000 | 718,822 | ||||||
(USD), 8.63%, 02/28/2029 (a) | 473,000 | 409,859 | ||||||
(USD), 8.25%, 04/10/2032 (a) | 100,000 | 82,151 | ||||||
(USD), 9.50%, 07/15/2052 (a) | 216,000 | 186,518 | ||||||
1,397,350 | ||||||||
GHANA (1.6%) | ||||||||
Ghana Government International Bond | ||||||||
(USD), 7.88%, 02/11/2035 (a)(c) | 470,000 | 416,537 | ||||||
(USD), 8.63%, 06/16/2049 (a)(c) | 300,000 | 263,250 | ||||||
(USD), 8.75%, 03/11/2061 (a)(c) | 200,000 | 175,762 | ||||||
855,549 | ||||||||
HONDURAS (0.3%) | ||||||||
Honduras Government International Bond (USD), 5.63%, 06/24/2030 (a) | 150,000 | 165,375 | ||||||
INDONESIA (4.7%) | ||||||||
Indonesia Government International Bond (USD), 6.63%, 02/17/2037 (a) | 740,000 | 1,031,015 | ||||||
Indonesia Treasury Bond, Series FR79 (IDR), 8.38%, 04/15/2039 | – | – | ||||||
Perusahaan Penerbit SBSN Indonesia III (USD), 4.35%, 09/10/2024 (a) | 1,280,000 | 1,423,770 | ||||||
2,454,785 |
Shares or Principal Amount | Value (US$) | |||||||
IRAQ (1.0%) | ||||||||
Iraq International Bond | ||||||||
(USD), 6.75%, 03/09/2023 (a) | $ | 280,000 | $ | 260,400 | ||||
(USD), 5.80%, 01/15/2028 (a) | 291,562 | 250,729 | ||||||
511,129 | ||||||||
IVORY COAST (1.0%) | ||||||||
Ivory Coast Government International Bond | ||||||||
(EUR), 5.25%, 03/22/2030 (a)(c) | 160,000 | 179,568 | ||||||
(EUR), 5.88%, 10/17/2031 (a)(c) | 200,000 | 227,738 | ||||||
(EUR), 6.88%, 10/17/2040 (a)(c) | 100,000 | 113,414 | ||||||
520,720 | ||||||||
KENYA (0.8%) | ||||||||
Kenya Government International Bond (USD), 7.00%, 05/22/2027 (a)(c) | 410,000 | 425,945 | ||||||
MEXICO (2.3%) | ||||||||
Mexican Bonos | ||||||||
Series M20 (MXN), 10.00%, 12/05/2024 | 5,700,000 | 317,839 | ||||||
Series M (MXN), 5.75%, 03/05/2026 | 12,100,000 | 580,377 | ||||||
Series M30 (MXN), 8.50%, 11/18/2038 | 5,500,000 | 301,006 | ||||||
1,199,222 | ||||||||
MONTENEGRO (0.2%) | ||||||||
Montenegro Government International Bond (EUR), 2.55%, 10/03/2029 (a) | 100,000 | 105,552 | ||||||
MOROCCO (0.8%) | ||||||||
Morocco Government International Bond (EUR), 1.50%, 11/27/2031 (a) | 410,000 | 442,097 | ||||||
MOZAMBIQUE (0.6%) | ||||||||
Mozambique International Bond (USD), 5.00%, 09/15/2031 (a)(c) | 360,000 | 298,573 | ||||||
NIGERIA (1.8%) | ||||||||
Nigeria Government International Bond | ||||||||
(USD), 7.63%, 11/21/2025 (a) | 453,000 | 475,650 | ||||||
(USD), 6.50%, 11/28/2027 (a) | 460,000 | 446,114 | ||||||
921,764 | ||||||||
PAKISTAN (0.5%) | ||||||||
Third Pakistan International Sukuk Co., Ltd. (USD), 5.50%, 10/13/2021 (a) | 250,000 | 249,062 | ||||||
PANAMA (0.5%) | ||||||||
Panama Government International Bond (USD), 4.50%, 04/01/2056 | 200,000 | 246,500 | ||||||
PARAGUAY (1.5%) | ||||||||
Paraguay Government International Bond (USD), 6.10%, 08/11/2044 (a) | 600,000 | 775,200 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 9 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Emerging Markets Debt Fund
Shares or Principal Amount | Value (US$) | |||||||
GOVERNMENT BONDS (continued) | ||||||||
QATAR (5.8%) | ||||||||
Qatar Government International Bond | ||||||||
(USD), 3.88%, 04/23/2023 (a) | $ | 230,000 | $ | 246,675 | ||||
(USD), 4.00%, 03/14/2029 (a) | 450,000 | 527,055 | ||||||
(USD), 3.75%, 04/16/2030 (a) | 200,000 | 232,199 | ||||||
(USD), 5.10%, 04/23/2048 (a) | 600,000 | 827,184 | ||||||
(USD), 4.82%, 03/14/2049 (a) | 925,000 | 1,231,776 | ||||||
3,064,889 | ||||||||
ROMANIA (1.3%) | ||||||||
Romanian Government International Bond | ||||||||
(EUR), 2.00%, 01/28/2032 (a) | 312,000 | 363,354 | ||||||
(EUR), 3.50%, 04/03/2034 (a) | 250,000 | 328,752 | ||||||
692,106 | ||||||||
RUSSIA (2.0%) | ||||||||
Russian Federal Bond – OFZ | ||||||||
Series 6228 (RUB), 7.65%, 04/10/2030 | 65,500,000 | 916,248 | ||||||
Series 6221 (RUB), 7.70%, 03/23/2033 | 10,750,000 | 150,878 | ||||||
1,067,126 | ||||||||
RWANDA (0.9%) | ||||||||
Rwanda International Government Bond (USD), 6.63%, 05/02/2023 (a) | 450,000 | 471,135 | ||||||
SAUDI ARABIA (3.2%) | ||||||||
Saudi Government International Bond | ||||||||
(USD), 4.50%, 04/17/2030 (a) | 570,000 | 681,972 | ||||||
(USD), 5.00%, 04/17/2049 (a) | 770,000 | 982,639 | ||||||
1,664,611 | ||||||||
SENEGAL (0.4%) | ||||||||
Senegal Government International Bond (EUR), 4.75%, 03/13/2028 (a)(c) | 200,000 | 230,181 | ||||||
SERBIA (1.4%) | ||||||||
Serbia International Bond (EUR), 3.13%, 05/15/2027 (a) | 590,000 | 746,630 | ||||||
SOUTH AFRICA (2.0%) | ||||||||
Republic of South Africa Government Bond, Series 2040 (ZAR), 9.00%, 01/31/2040 | 10,800,000 | 529,931 | ||||||
Republic of South Africa Government International Bond (USD), 6.25%, 03/08/2041 | 500,000 | 492,540 | ||||||
1,022,471 | ||||||||
TUNISIA (1.0%) | ||||||||
Banque Centrale de Tunisie International Bond | ||||||||
(EUR), 6.75%, 10/31/2023 (a) | 200,000 | 207,419 | ||||||
(EUR), 5.63%, 02/17/2024 (a) | 317,000 | 316,283 | ||||||
523,702 |
Shares or Principal Amount | Value (US$) | |||||||
UKRAINE (4.4%) | ||||||||
Ukraine Government International Bond | ||||||||
(USD), 7.75%, 09/01/2024 (a) | $ | 1,300,000 | $ | 1,343,875 | ||||
(EUR), 6.75%, 06/20/2026 (a) | 430,000 | 491,795 | ||||||
(USD), 7.75%, 09/01/2026 (a) | 232,000 | 234,436 | ||||||
(USD), 0.00%, 05/31/2040 (a)(h) | 270,000 | 233,215 | ||||||
2,303,321 | ||||||||
UNITED ARAB EMIRATES (2.0%) | ||||||||
Abu Dhabi Government International Bond (USD), 3.13%, 04/16/2030 (a) | 287,000 | 319,509 | ||||||
Finance Department Government of Sharjah (USD), 4.00%, 07/28/2050 (a) | 233,000 | 231,844 | ||||||
Sharjah Sukuk Program Ltd. (USD), 4.23%, 03/14/2028 (a) | 445,000 | 493,760 | ||||||
1,045,113 | ||||||||
URUGUAY (1.5%) | ||||||||
Uruguay Government International Bond | ||||||||
(UYU), 4.38%, 12/15/2028 (c)(f) | 7,218,018 | 188,722 | ||||||
(USD), 4.38%, 01/23/2031 | 110,000 | 132,688 | ||||||
(USD), 5.10%, 06/18/2050 (c) | 350,000 | 467,603 | ||||||
789,013 | ||||||||
UZBEKISTAN (0.6%) | ||||||||
Republic of Uzbekistan Bond (USD), 4.75%, 02/20/2024 (a) | 300,000 | 313,858 | ||||||
VENEZUELA (0.0%) | ||||||||
Venezuela Government International Bond (USD), 9.25%, 05/07/2028 (b)(i) | 165,000 | 15,098 | ||||||
Total Government Bonds | 39,605,443 | |||||||
WARRANTS (0.0%) | ||||||||
BRAZIL (0.0%) | ||||||||
OAS S.A. (b)(j)(k) | 29,232 | – | ||||||
UNITED STATES (0.0%) | ||||||||
CANADACO, Series A (b)(j)(k) | 92,841 | – | ||||||
Total Warrants | 0 | |||||||
SHORT-TERM INVESTMENT (1.5%) | ||||||||
UNITED STATES (1.5%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (l) | 776,625 | 776,625 | ||||||
Total Short-Term Investment | 776,625 | |||||||
Total Investments (Cost $53,712,064) (m)—98.4% | 51,580,191 | |||||||
Other Assets in Excess of Liabilities—1.6% | 825,600 | |||||||
Net Assets—100.0% | $ | 52,405,791 |
See accompanying Notes to Financial Statements.
10 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Emerging Markets Debt Fund
(a) | Denotes a security issued under Regulation S or Rule 144A. |
(b) | Illiquid security. |
(c) | Sinkable security. |
(d) | Perpetual bond. This is a bond that has no maturity date, is redeemable and pays a steady stream of interest indefinitely. The maturity date presented for these instruments represents the next call/put date. |
(e) | Indicates a stepped coupon bond. This bond was issued with a low coupon that gradually increases over the life of the bond. |
(f) | Inflation linked security. |
(g) | Issued with a zero coupon. |
(h) | Variable Rate Instrument. The rate shown is based on the latest available information as of October 31, 2020. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
(i) | Security is in default. |
(j) | Level 3 security. See Note 2(a) of the accompanying Notes to Financial Statements. |
(k) | Non-Income Producing Security. |
(l) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(m) | See accompanying Notes to Financial Statements for tax unrealized appreciation/depreciation of securities. |
BRL | Brazilian Real |
COP | Colombian Peso |
EUR | Euro Currency |
IDR | Indonesian Rupiah |
INR | Indian Rupee |
MXN | Mexican Peso |
PLC | Public Limited Company |
RUB | Russian Ruble |
USD | U.S. Dollar |
UYU | Uruguayan Peso |
ZAR | South African Rand |
At October 31, 2020, the Fund's open forward foreign currency exchange contracts were as follows:
Purchase Contracts Settlement Date* | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | |
Colombian Peso/United States Dollar | ||||||
11/25/2020 | UBS AG | COP 1,980,225,000 | USD 533,322 | $ 511,143 | $ (22,179 | ) |
Indian Rupee/United States Dollar | ||||||
11/25/2020 | Barclays Bank plc | INR 42,210,000 | USD 557,825 | 565,525 | 7,700 | |
$ 1,076,668 | $ (14,479 | ) |
Sale Contracts Settlement Date* | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | |
United States Dollar/Brazilian Real | ||||||
11/25/2020 | Barclays Bank plc | USD 1,068,897 | BRL 5,973,000 | $ 1,039,919 | $ 28,978 | |
11/25/2020 | UBS AG | USD 1,424,335 | BRL 7,803,000 | 1,358,529 | 65,806 | |
United States Dollar/Colombian Peso | ||||||
11/25/2020 | UBS AG | USD 463,078 | COP 1,758,817,000 | 453,992 | 9,086 | |
United States Dollar/Euro | ||||||
02/01/2021 | Deutsche Bank AG | USD 6,144,067 | EUR 5,225,000 | 6,098,509 | 45,558 | |
02/01/2021 | Royal Bank Of Canada | USD 109,577 | EUR 93,000 | 108,548 | 1,029 | |
United States Dollar/Mexican Peso | ||||||
02/02/2021 | UBS AG | USD 687,706 | MXN 15,285,000 | 713,623 | (25,917 | ) |
United States Dollar/South African Rand | ||||||
02/01/2021 | Barclays Bank plc | USD 479,313 | ZAR 8,074,000 | 491,098 | (11,785 | ) |
$10,264,218 | $112,755 | |||||
Unrealized appreciation on forward foreign currency exchange contracts | $158,157 | |||||
Unrealized depreciation on forward foreign currency exchange contracts | (59,881 | ) |
* | Certain contracts with different trade dates and like characteristics have been shown net. |
See accompanying Notes to Financial Statements.
2020 Annual Report | 11 |
Aberdeen Global Absolute Return Strategies Fund (Unaudited)
Aberdeen Global Absolute Return Strategies Fund (Institutional Class shares net of fees) returned 3.54% for the 12-month period ended October 31, 2020, versus the 1.01% return of its benchmark, the ICE Bank of America 3-Month U.S. Treasury Bill Index, for the same period.
Global equities, as measured by the Morgan Stanley Capital International (MSCI) All Country (AC) World Index (Net Dividends),1 returned 4.89% over the 12-month period ended October 3, 2020, but with considerable divergence by country. While U.S. and Chinese stocks performed well during the period, equity markets in many other countries recorded sharp downturns. Shares in the UK and Latin America saw particularly weak performance. During November and December 2019, global equity markets moved higher. Supportive central bank action globally and hopes of a breakthrough in the U.S.-China trade war helped allay investors' fears about global economic growth. Additionally, the decisive outcome of the election in the UK in December 2019, removed much of the political wrangling and uncertainty related to the UK's withdrawal from the European Union (commonly referred to as Brexit).
In early 2020, attention shifted to the coronavirus (COVID-19) outbreak as it spread from China to engulf the rest of the world. Governments globally responded with drastic containment measures which all but crippled the global economy. As global growth forecasts plummeted, central banks worldwide sought to ease the pain by slashing interest rates and implementing aggressive support programs. The U.S. Federal Reserve reduced its benchmark interest rate three times, taking it to near 0%. This was a level last seen in the aftermath of the 2008 global financial crisis. The European Central Bank announced a stimulus plan worth €1.35 trillion (about US$1.62 trillion) in an effort to counter the economic effects of COVID-19.
Governments also announced unprecedented spending packages as they sought to tide over businesses and individuals so that their countries' economies might recover more quickly once the pandemic had passed.
These measures helped investor sentiment to recover through the summer of 2020, along with subsiding infection rates, which allowed some easing of lockdown restrictions in many countries. Consequently, global economic activity rebounded strongly, propelling equity prices higher.
By the autumn of 2020, many regions had started to succumb to a second wave of the virus, necessitating the reimposition of restrictions. Concurrently, uncertainty over the U.S. presidential election and renewed Brexit worries contributed to investors'
uneasiness. As a result, global equity markets experienced downturns towards the end of the reporting period in September and October 2020.
Aberdeen Global Absolute Return Strategies Fund recorded a positive return for the 12-month period ended October 31, 2020. The Fund's overweight position in U.S. government bonds versus German Bunds enhanced Fund performance for the reporting period. This positioning reflected our view that interest rates in the U.S. would fall further than those in Germany. The Fund's corporate bond exposures – particularly high-yield bonds – were boosted by supportive actions from central banks and governments worldwide. The Fund's equity positions saw mixed performance during the reporting period. The exposure to U.S. and Korean equities, as well as global video-game positions, benefited Fund performance. Positions in European equity infrastructure companies also had a positive impact on Fund performance on news of a huge European spending plan to cut carbon emissions. However, the Fund's UK equity position detracted from performance for the reporting period amid resurgent COVID-19 cases and Brexit woes. The Fund's European equity income and U.S. equity volatility positions also weighed on performance for the period.
Plummeting oil prices caused global inflation expectations to fall, benefiting the Fund's short UK inflation position. Conversely, the Fund's U.S. inflation position, which sought to benefit from rising U.S. inflation, had a negative impact on Fund performance for the reporting period. The COVID-19 pandemic blighted the outlook for the property market, hampering the Fund's global real estate investment trust (REIT) strategy. The Fund's Mexican government bonds position lost ground over the reporting period, while the emerging-market income position benefited from investors' search for higher yields. The Fund's Australian and U.S. interest-rates positions also were positive contributors to Fund performance for the period.
We employed derivatives in the Fund throughout the reporting period. We used currency swaps2 to implement our investment views and hedge any unintended currency risk at the Fund level. Within the Fund's fixed-income segment, we employed bond futures, credit default swaps,3 interest-rate swaps,4 interest-rate swaptions,5 inflation swaps6 and currency swaps to implement our investment views and to manage currency and interest-rate exposure. We used equity futures, options and total return swaps7 to implement and manage the Fund's equity exposure. The derivatives positions contributed approximately 2.30% to the Fund's absolute return for the reporting period.
Regarding the COVID-19 pandemic, news that a vaccine may soon be widely available has lifted investor sentiment in late 2020. The
1 | The MSCI AC World Index tracks the performance of stocks in developed and emerging markets. |
2 | A currency swap is the exchange of interest – and sometimes principal – in one currency for the same in another currency. |
3 | credit default swap is a contract that transfers the credit exposure of fixed-income products between two or more parties. |
4 | An interest-rate swap is an agreement between two parties in which one stream of future interest payments is exchanged for another based on a specified principal amount. |
5 | An interest-rate swaption refers to an option to enter into an interest rate swap or some other type of swap. In exchange for an options premium, the buyer gains the right but not the obligation to enter into a specified swap agreement with the issuer on a specified future date. |
6 | An inflation swap is a contract used to transfer inflation risk from one party to another through an exchange of fixed cash flows. In an inflation swap, one party pays a fixed-rate cash flow on a principal amount while the other party pays a floating rate linked to an inflation index. |
7 | A total return swap comprises an agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains. |
12 | 2020 Annual Report |
Aberdeen Global Absolute Return Strategies Fund (Unaudited) (concluded)
approval and successful distribution of a vaccine will make a meaningful difference in our global economic growth forecasts.
At the end of the reporting period on October 31, 2020, the Fund's positioning reflected this mixed economic outlook. The Fund continues to hold risk assets that in our view provide greater return potential, with capacity to add when the risk-reward payoff improves.
We believe that the Fund's corporate bond strategies, equity themes and currency positions should generate positive returns.8 We believe that the Fund is positioned well to meet its performance objective, with the right balance to protect the Fund in the event of market downturns.
Effective November 15, 2019, the Fund name changed from Aberdeen Global Unconstrained Fixed Income Fund to Aberdeen Global Absolute Return Strategies Fund. As of that date, the Fund changed its investment objective and principal investment strategies, including its 80% investment policy.
Portfolio Management:
Multi-Asset Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 3.00% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Absolute return funds employ certain techniques that are intended to reduce risk and volatility in the portfolio and provide protection against a decline in the fund's assets. They are not designed to outperform stocks and bonds in strong markets and there is no
guarantee of positive returns or that the Fund's objective will be achieved.
Fixed income securities are subject to certain risks including, but not limited to: interest rate (changes in interest rates may cause a decline in the market value of an investment), credit (changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral), prepayment (debt issuers may repay or refinance their loans or obligations earlier than anticipated), and extension (principal repayments may not occur as quickly as anticipated, causing the expected maturity of a security to increase).
Foreign securities in which the Fund may invest may be more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standard, currency exchange rates, political and economic risks. Fluctuation in currency exchange rates may impact the Fund's returns more greatly to the extent the Fund does not hedge currency exposure or hedging techniques used are unsuccessful. The foregoing risks are enhanced in emerging market countries.
To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry).
Derivatives are speculative and may hurt the Fund's performance. They present the risk of disproportionately increased losses and/or reduced gains when the financial asset or measure to which the derivative is linked changes in unexpected ways.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 13 |
Aberdeen Global Absolute Return Strategies Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | |
Class A | w/o SC | 3.26% | 3.96% | 1.58% |
w/SC2 | 0.19% | 3.33% | 1.27% | |
Class C | w/o SC | 2.54% | 3.25% | 0.85% |
w/SC3 | 1.54% | 3.25% | 0.85% | |
Institutional Service Class4 | w/o SC | 3.35% | 4.14% | 1.72% |
Institutional Class4 | w/o SC | 3.54% | 4.23% | 1.85% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | The Fund changed its investment objective and principal investment strategies, including its 80% investment policy, effective November 15, 2019. The Fund also previously changed its investment objective and strategies effective August 15, 2016. Performance information for periods prior to November 15, 2019 does not reflect the current investment strategy. Please consult the Fund's prospectus for more detail. |
2 | A 3.00% front-end sales charge was deducted. Prior to February 28, 2019 the front-end sales charge was 4.25%. |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
4 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* | Minimum Initial Investment |
Comparative performance of $1,000,000 invested in Institutional Service Class shares of the Aberdeen Global Absolute Return Strategies Fund, the ICE Bank of America (BofA) 3-Month U.S. Treasury Note Index and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The ICE Bank of America (BofA) 3-Month U.S. Treasury Note Index is an unmanaged index tracking 3-month U.S. Treasury securities.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
14 | 2020 Annual Report |
Aberdeen Global Absolute Return Strategies Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | |||
U.S. Treasuries | 34.5 % | ||
Money Market Funds | 20.4% | ||
Common Stocks | 19.6% | ||
Certificates of Deposit | 18.9% | ||
Commercial Paper | 4.6% | ||
Purchased Options | 2.8% | ||
Liabilities in Excess of Other Assets | (0.8%) | ||
100.0% |
Top Countries | ||||
United States | 63.9 | % | ||
France | 10.6 | % | ||
United Kingdom | 5.7 | % | ||
Netherlands | 5.5 | % | ||
Canada | 4.4 | % | ||
Supranational | 2.3 | % | ||
Japan | 1.5 | % | ||
Germany | 1.3 | % | ||
Denmark | 1.0 | % | ||
South Korea | 0.8 | % | ||
Other | 3.0 | % | ||
100.0 | % |
Top Holdings | ||||
Vestas Wind Systems AS | 0.5 | % | ||
Schneider Electric SE | 0.5 | % | ||
RWE AG | 0.5 | % | ||
Orsted AS | 0.5 | % | ||
U.S. Treasury Inflation Indexed Bond 02/15/2045 | 0.5 | % | ||
Iberdrola SA | 0.4 | % | ||
U.S. Treasury Inflation Indexed Bond 02/15/2044 | 0.4 | % | ||
Prologis, Inc., REIT | 0.4 | % | ||
U.S. Treasury Inflation Indexed Bond 02/15/2048 | 0.3 | % | ||
NextEra Energy, Inc. | 0.3 | % | ||
Other | 92.9 | % | ||
97.2 | % |
2020 Annual Report | 15 |
Statement of Investments
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Shares or Principal Amount | Value (US$) | |||||||
COMMON STOCKS (19.6%) | ||||||||
AUSTRALIA (0.4%) | ||||||||
Materials (0.3%) | ||||||||
Glencore PLC (a) | 15,743 | $ | 31,757 | |||||
Newcrest Mining Ltd. | 2,028 | 42,056 | ||||||
73,813 | ||||||||
Real Estate (0.1%) | ||||||||
Charter Hall Group | 287 | 2,488 | ||||||
Dexus, REIT | 621 | 3,757 | ||||||
Goodman Group, REIT | 677 | 8,763 | ||||||
15,008 | ||||||||
88,821 | ||||||||
AUSTRIA (0.0%) | ||||||||
Real Estate (0.0%) | ||||||||
CA Immobilien Anlagen AG | 85 | 2,335 | ||||||
BELGIUM (0.0%) | ||||||||
Real Estate (0.0%) | ||||||||
Aedifica SA, REIT | 14 | 1,411 | ||||||
Warehouses De Pauw CVA, REIT | 113 | 3,786 | ||||||
5,197 | ||||||||
BRAZIL (0.2%) | ||||||||
Materials (0.2%) | ||||||||
Wheaton Precious Metals Corp. | 1,033 | 47,632 | ||||||
CANADA (1.1%) | ||||||||
Communication Services (0.1%) | ||||||||
Shaw Communications, Inc., Class B | 1,501 | 24,729 | ||||||
Materials (0.9%) | ||||||||
Agnico-Eagle Mines Ltd. | 665 | 52,728 | ||||||
Barrick Gold Corp. | 1,918 | 51,268 | ||||||
Franco-Nevada Corp. | 349 | 47,656 | ||||||
Kirkland Lake Gold Ltd. | 1,079 | 49,224 | ||||||
200,876 | ||||||||
Real Estate (0.1%) | ||||||||
Allied Properties Real Estate Investment Trust | 106 | 2,571 | ||||||
Canadian Apartment Properties, REIT | 150 | 4,822 | ||||||
7,393 | ||||||||
232,998 | ||||||||
CHINA (0.8%) | ||||||||
Communication Services (0.4%) | ||||||||
China Mobile Ltd. | 4,000 | 24,466 | ||||||
NetEase, Inc., ADR | 275 | 23,867 | ||||||
Tencent Holdings Ltd. | 500 | 38,203 | ||||||
86,536 |
Shares or Principal Amount | Value (US$) | |||||||
Consumer Discretionary (0.4%) | ||||||||
BYD Co. Ltd. | 2,000 | $ | 40,430 | |||||
NIO, Inc. (a), ADR | 1,592 | 48,683 | ||||||
89,113 | ||||||||
175,649 | ||||||||
DENMARK (1.0%) | ||||||||
Industrials (0.5%) | ||||||||
Vestas Wind Systems AS | 702 | 120,438 | ||||||
Utilities (0.5%) | ||||||||
Orsted AS (b) | 627 | 99,514 | ||||||
219,952 | ||||||||
FINLAND (0.2%) | ||||||||
Real Estate (0.0%) | ||||||||
Kojamo OYJ | 61 | 1,257 | ||||||
Utilities (0.2%) | ||||||||
Fortum OYJ | 2,572 | 48,345 | ||||||
49,602 | ||||||||
FRANCE (1.3%) | ||||||||
Communication Services (0.1%) | ||||||||
Ubisoft Entertainment SA (a) | 241 | 21,288 | ||||||
Industrials (0.9%) | ||||||||
Alstom SA (a) | 1,441 | 64,383 | ||||||
Schneider Electric SE | 967 | 117,497 | ||||||
181,880 | ||||||||
Real Estate (0.0%) | ||||||||
Gecina SA, REIT | 47 | 5,835 | ||||||
Utilities (0.3%) | ||||||||
Engie SA (a) | 5,166 | 62,480 | ||||||
271,483 | ||||||||
GERMANY (1.3%) | ||||||||
Industrials (0.3%) | ||||||||
KION Group AG | 371 | 28,909 | ||||||
Siemens AG | 263 | 30,854 | ||||||
59,763 | ||||||||
Information Technology (0.2%) | ||||||||
Infineon Technologies AG | 1,553 | 43,237 | ||||||
Materials (0.1%) | ||||||||
Covestro AG (b) | 667 | 31,833 | ||||||
Real Estate (0.2%) | ||||||||
alstria office REIT-AG | 323 | 4,112 | ||||||
LEG Immobilien AG | 48 | 6,487 | ||||||
Sirius Real Estate Ltd. | 12,128 | 11,552 | ||||||
Vonovia SE | 221 | 14,114 | ||||||
36,265 |
See accompanying Notes to Financial Statements.
16 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Shares or Principal Amount | Value (US$) | |||||||
COMMON STOCKS (continued) | ||||||||
GERMANY (continued) | ||||||||
Utilities (0.5%) | ||||||||
RWE AG | 2,976 | $ | 110,135 | |||||
281,233 | ||||||||
JAPAN (1.5%) | ||||||||
Communication Services (0.6%) | ||||||||
Capcom Co. Ltd. | 400 | 21,877 | ||||||
KDDI Corp. | 900 | 24,349 | ||||||
Nexon Co. Ltd. | 1,000 | 27,871 | ||||||
Nintendo Co. Ltd. | 100 | 54,069 | ||||||
128,166 | ||||||||
Consumer Discretionary (0.2%) | ||||||||
Bandai Namco Holdings, Inc. | 300 | 22,420 | ||||||
Sony Corp. | 300 | 25,010 | ||||||
47,430 | ||||||||
Information Technology (0.5%) | ||||||||
Anritsu Corp. | 1,300 | 28,460 | ||||||
Fujitsu Ltd. | 500 | 59,158 | ||||||
NEC Corp. | 500 | 25,185 | ||||||
112,803 | ||||||||
Real Estate (0.2%) | ||||||||
Daiwa House REIT Investment Corp., REIT | 1 | 2,313 | ||||||
Daiwa Office Investment Corp., REIT | 2 | 10,853 | ||||||
Daiwa Securities Living Investments Corp. | 1 | 977 | ||||||
GLP J-REIT | 2 | 3,083 | ||||||
Invesco Office J-Reit, Inc., REIT | 5 | 620 | ||||||
Japan Real Estate Investment Corp. | 2 | 9,802 | ||||||
Mitsui Fudosan Co. Ltd., REIT | 300 | 5,108 | ||||||
Nippon Building Fund, Inc., REIT | 2 | 10,102 | ||||||
Nippon Prologis REIT, Inc., REIT | 1 | 3,292 | ||||||
Orix JREIT, Inc. | 1 | 1,405 | ||||||
47,555 | ||||||||
335,954 | ||||||||
JERSEY (0.1%) | ||||||||
Financials (0.1%) | ||||||||
Sanne Group PLC | 1,239 | 9,736 | ||||||
NETHERLANDS (0.2%) | ||||||||
Information Technology (0.2%) | ||||||||
ASML Holding NV | 88 | 31,839 | ||||||
NORWAY (0.0%) | ||||||||
Real Estate (0.0%) | ||||||||
Entra ASA (b) | 168 | 2,196 | ||||||
REPUBLIC OF IRELAND (0.3%) | ||||||||
Industrials (0.2%) | ||||||||
Kingspan Group PLC (a) | 541 | 47,161 | ||||||
Information Technology (0.1%) | ||||||||
Keywords Studios PLC | 698 | 19,134 | ||||||
66,295 |
Shares or Principal Amount | Value (US$) | |||||||
RUSSIA (0.4%) | ||||||||
Materials (0.4%) | ||||||||
MMC Norilsk Nickel PJSC, ADR | 1,383 | $ | 32,846 | |||||
Polymetal International PLC | 2,030 | 43,147 | ||||||
75,993 | ||||||||
SINGAPORE (0.0%) | ||||||||
Real Estate (0.0%) | ||||||||
CapitaLand Mall Trust, REIT | 3,996 | 5,065 | ||||||
SOUTH KOREA (0.8%) | ||||||||
Communication Services (0.1%) | ||||||||
NCSoft Corp. | 31 | 21,300 | ||||||
Consumer Discretionary (0.4%) | ||||||||
Hyundai Motor Co. | 223 | 32,642 | ||||||
LG Electronics, Inc. | 389 | 28,918 | ||||||
S&T Motiv Co. Ltd. | 603 | 26,951 | ||||||
88,511 | ||||||||
Information Technology (0.2%) | ||||||||
L&F Co. Ltd. | 1,004 | 35,078 | ||||||
Materials (0.1%) | ||||||||
LG Chem Ltd. | 62 | 33,807 | ||||||
178,696 | ||||||||
SPAIN (0.4%) | ||||||||
Real Estate (0.0%) | ||||||||
Inmobiliaria Colonial Socimi SA, REIT | 346 | 2,463 | ||||||
Merlin Properties Socimi SA | 391 | 2,632 | ||||||
5,095 | ||||||||
Utilities (0.4%) | ||||||||
Iberdrola SA | 7,717 | 91,119 | ||||||
96,214 | ||||||||
SWEDEN (0.3%) | ||||||||
Communication Services (0.1%) | ||||||||
Tele2 AB, B Shares | 1,930 | 22,778 | ||||||
Consumer Discretionary (0.1%) | ||||||||
Autoliv, Inc. | 424 | 32,139 | ||||||
Real Estate (0.1%) | ||||||||
Castellum AB | 265 | 5,518 | ||||||
Fabege AB | 256 | 3,232 | ||||||
Hufvudstaden AB | 128 | 1,671 | ||||||
Kungsleden AB | 265 | 2,249 | ||||||
12,670 | ||||||||
67,587 | ||||||||
TAIWAN (0.5%) | ||||||||
Communication Services (0.1%) | ||||||||
Sea Ltd. (a), ADR | 160 | 25,232 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 17 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Shares or Principal Amount | Value (US$) | |||||||
COMMON STOCKS (continued) | ||||||||
TAIWAN (continued) | ||||||||
Industrials (0.2%) | ||||||||
Bizlink Holding, Inc. | 5,000 | $ | 38,449 | |||||
Information Technology (0.2%) | ||||||||
MediaTek, Inc. | 1,000 | 23,770 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 2,000 | 30,259 | ||||||
54,029 | ||||||||
117,710 | ||||||||
THAILAND (0.2%) | ||||||||
Industrials (0.2%) | ||||||||
Delta Electronics Thailand PCL | 5,600 | 32,162 | ||||||
UNITED KINGDOM (2.4%) | ||||||||
Communication Services (0.3%) | ||||||||
Auto Trader Group PLC (b) | 893 | 6,714 | ||||||
Future PLC | 791 | 20,337 | ||||||
Gamma Communications PLC | 893 | 19,320 | ||||||
Rightmove PLC (a) | 490 | 3,922 | ||||||
Team17 Group PLC (a) | 1,886 | 17,347 | ||||||
67,640 | ||||||||
Consumer Discretionary (0.3%) | ||||||||
AO World PLC (a) | 2,009 | 9,424 | ||||||
Dunelm Group PLC | 562 | 9,501 | ||||||
Games Workshop Group PLC | 172 | 23,123 | ||||||
Greggs PLC (a) | 239 | 3,992 | ||||||
Hollywood Bowl Group PLC | 2,338 | 3,939 | ||||||
JD Sports Fashion PLC | 738 | 7,100 | ||||||
Trainline PLC (a)(b) | 935 | 3,333 | ||||||
60,412 | ||||||||
Consumer Staples (0.2%) | ||||||||
Cranswick PLC | 292 | 12,172 | ||||||
Hilton Food Group PLC | 1,055 | 15,830 | ||||||
Hotel Chocolat Group PLC (a) | 869 | 3,884 | ||||||
31,886 | ||||||||
Financials (0.2%) | ||||||||
AJ Bell PLC | 1,538 | 8,395 | ||||||
Draper Esprit PLC (a) | 1,068 | 8,385 | ||||||
Impax Asset Management Group PLC | 1,453 | 10,212 | ||||||
Intermediate Capital Group PLC | 693 | 10,526 | ||||||
Liontrust Asset Management PLC | 507 | 8,210 | ||||||
45,728 | ||||||||
Health Care (0.1%) | ||||||||
Craneware PLC | 175 | 3,525 | ||||||
Dechra Pharmaceuticals PLC (c) | 129 | 5,836 | ||||||
Genus PLC | 294 | 15,625 | ||||||
24,986 | ||||||||
Industrials (0.5%) | ||||||||
Avon Rubber PLC | 199 | 10,137 | ||||||
Chemring Group PLC | 1,998 | 6,764 |
Shares or Principal Amount | Value (US$) | |||||||
Diploma PLC | 137 | $ | 3,945 | |||||
GlobalData PLC | 632 | 12,896 | ||||||
IMI PLC | 2,411 | 32,328 | ||||||
JET2 PLC | 426 | 4,693 | ||||||
Polypipe Group PLC (a) | 1,049 | 6,246 | ||||||
Rotork PLC | 1,050 | 3,826 | ||||||
RWS Holdings PLC | 1,294 | 9,360 | ||||||
Spirax-Sarco Engineering PLC | 45 | 6,579 | ||||||
Ultra Electronics Holdings PLC | 264 | 6,441 | ||||||
103,215 | ||||||||
Information Technology (0.6%) | ||||||||
Avast PLC (b) | 1,041 | 6,397 | ||||||
AVEVA Group PLC | 848 | 47,071 | ||||||
Computacenter PLC | 600 | 17,722 | ||||||
DiscoverIE Group PLC | 1,264 | 9,414 | ||||||
FDM Group Holdings PLC | 468 | 6,042 | ||||||
GB Group PLC (a) | 564 | 6,496 | ||||||
Kainos Group PLC | 1,413 | 22,663 | ||||||
Midwich Group PLC (a) | 523 | 2,355 | ||||||
Softcat PLC | 726 | 10,583 | ||||||
Spirent Communications PLC | 2,200 | 8,259 | ||||||
137,002 | ||||||||
Materials (0.1%) | ||||||||
Hill & Smith Holdings PLC | 605 | 9,409 | ||||||
Marshalls PLC (a) | 1,254 | 10,864 | ||||||
Victrex PLC | 153 | 3,656 | ||||||
23,929 | ||||||||
Real Estate (0.1%) | ||||||||
Assura PLC, REIT | 5,775 | 5,701 | ||||||
Safestore Holdings PLC, REIT | 561 | 5,840 | ||||||
UNITE Group PLC (The), REIT (a) | 569 | 6,140 | ||||||
17,681 | ||||||||
Utilities (0.0%) | ||||||||
Telecom Plus PLC | 381 | 6,563 | ||||||
519,042 | ||||||||
UNITED STATES (6.2%) | ||||||||
Communication Services (0.4%) | ||||||||
Activision Blizzard, Inc. | 348 | 26,354 | ||||||
Electronic Arts, Inc. (a) | 173 | 20,731 | ||||||
Take-Two Interactive Software, Inc. (a) | 140 | 21,689 | ||||||
Zynga, Inc. (a), Class A | 2,374 | 21,342 | ||||||
90,116 | ||||||||
Consumer Discretionary (0.2%) | ||||||||
BorgWarner, Inc. | 882 | 30,852 | ||||||
Energy (0.1%) | ||||||||
New Fortress Energy, Inc. | 752 | 27,170 |
See accompanying Notes to Financial Statements.
18 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Shares or Principal Amount | Value (US$) | |||||||
COMMON STOCKS (continued) | ||||||||
UNITED STATES (continued) | ||||||||
Industrials (0.5%) | ||||||||
Emerson Electric Co. | 495 | $ | 32,071 | |||||
MasTec, Inc. (a) | 623 | 30,926 | ||||||
Rockwell Automation, Inc. | 142 | 33,671 | ||||||
96,668 | ||||||||
Information Technology (2.5%) | ||||||||
Advanced Micro Devices, Inc. (a) | 692 | 52,101 | ||||||
Amdocs Ltd. | 472 | 26,611 | ||||||
Arista Networks, Inc. (a) | 128 | 26,739 | ||||||
Ciena Corp. (a) | 498 | 19,616 | ||||||
Cisco Systems, Inc. | 671 | 24,089 | ||||||
Cognex Corp. | 500 | 32,950 | ||||||
Intel Corp. | 572 | 25,328 | ||||||
IPG Photonics Corp. (a) | 191 | 35,518 | ||||||
Microsoft Corp. | 253 | 51,225 | ||||||
MKS Instruments, Inc. | 292 | 31,650 | ||||||
NVIDIA Corp. | 125 | 62,670 | ||||||
Qorvo, Inc. (a) | 216 | 27,510 | ||||||
QUALCOMM, Inc. | 281 | 34,664 | ||||||
Skyworks Solutions, Inc. | 199 | 28,117 | ||||||
Teradyne, Inc. | 403 | 35,404 | ||||||
Zebra Technologies Corp., Class A (a) | 122 | 34,604 | ||||||
548,796 | ||||||||
Materials (0.6%) | ||||||||
Freeport-McMoRan, Inc. | 2,069 | 35,876 | ||||||
Newmont Corp. | 809 | 50,838 | ||||||
Royal Gold, Inc. | 393 | 46,692 | ||||||
133,406 | ||||||||
Real Estate (1.6%) | ||||||||
Alexandria Real Estate Equities, Inc. | 71 | 10,758 | ||||||
American Homes 4 Rent, REIT | 172 | 4,862 | ||||||
American Tower Corp., REIT | 67 | 15,387 | ||||||
Americold Realty Trust, REIT | 217 | 7,862 | ||||||
Apartment Investment & Management Co.,, Class A, REIT | 80 | 2,552 | ||||||
AvalonBay Communities, Inc. | 51 | 7,096 | ||||||
Boston Properties, Inc., REIT | 62 | 4,489 | ||||||
Digital Realty Trust, Inc. | 115 | 16,594 | ||||||
Douglas Emmett, Inc., REIT | 84 | 1,982 | ||||||
Duke Realty Corp. | 303 | 11,511 | ||||||
Equinix, Inc., REIT | 88 | 64,349 | ||||||
Equity LifeStyle Properties, Inc. | 150 | 8,878 | ||||||
Essex Property Trust, Inc., REIT | 27 | 5,524 | ||||||
Extra Space Storage, Inc., REIT | 61 | 7,073 | ||||||
Gaming and Leisure Properties, Inc., REIT | 168 | 6,107 | ||||||
Highwoods Properties, Inc., REIT | 141 | 4,198 | ||||||
Host Hotels & Resorts, Inc., REIT | 318 | 3,333 | ||||||
Hudson Pacific Properties, Inc., REIT | 104 | 2,003 | ||||||
Invitation Homes, Inc. | 475 | 12,948 | ||||||
MGM Growth Properties LLC | 241 | 6,374 | ||||||
Mid-America Apartment Communities, Inc., REIT | 72 | 8,397 | ||||||
Omega Healthcare Investors, Inc., REIT | 169 | 4,869 | ||||||
Prologis, Inc., REIT | 779 | 77,277 | ||||||
Realty Income Corp., REIT | 201 | 11,630 |
Shares or Principal Amount | Value (US$) | |||||||
Sabra Health Care REIT, Inc., REIT | 186 | $ | 2,448 | |||||
SITE Centers Corp., REIT | 147 | 1,001 | ||||||
STORE Capital Corp., REIT | 147 | 3,778 | ||||||
Sun Communities, Inc., REIT | 66 | 9,084 | ||||||
UDR, Inc., REIT | 175 | 5,467 | ||||||
VEREIT, Inc., REIT | 1,019 | 6,318 | ||||||
Vornado Realty Trust, REIT | 159 | 4,886 | ||||||
Welltower, Inc. | 284 | 15,271 | ||||||
354,306 | ||||||||
Utilities (0.3%) | ||||||||
NextEra Energy, Inc. | 912 | 66,767 | ||||||
1,348,081 | ||||||||
Total Common Stocks | 4,261,472 | |||||||
U.S. TREASURIES (2.4%) | ||||||||
UNITED STATES (2.4%) | ||||||||
U.S. Treasury Inflation Indexed Bond | ||||||||
(USD), 3.38%, 04/15/2032 (d) | $ | 18,448 | 27,563 | |||||
(USD), 0.75%, 02/15/2042 | 50,492 | 62,109 | ||||||
(USD), 0.63%, 02/15/2043 | 51,207 | 61,607 | ||||||
(USD), 1.38%, 02/15/2044 | 63,228 | 88,008 | ||||||
(USD), 0.75%, 02/15/2045 | 79,905 | 99,202 | ||||||
(USD), 1.00%, 02/15/2046 | 42,777 | 56,221 | ||||||
(USD), 0.88%, 02/15/2047 | 38,544 | 49,884 | ||||||
(USD), 1.00%, 02/15/2048 | 55,014 | 73,742 | ||||||
(USD), 0.25%, 02/15/2050 | 10,109 | 11,541 | ||||||
529,877 | ||||||||
Total U.S. Treasuries | 529,877 | |||||||
Total Purchased Options (see page 27) | 603,748 | |||||||
SHORT-TERM INVESTMENT (76.0%) | ||||||||
CERTIFICATES OF DEPOSIT (18.9%) | ||||||||
CANADA (3.3%) | ||||||||
Bank of Montreal (USD), 0.01%, 11/02/2020 | 727,237 | 727,237 | ||||||
FRANCE (7.0%) | ||||||||
Credit Agricole SA (USD), 0.02%, 11/02/2020 | 734,022 | 734,022 | ||||||
Societe Generale SA (USD), 0.08%, 11/02/2020 | 780,196 | 780,196 | ||||||
1,514,218 | ||||||||
NETHERLANDS (5.3%) | ||||||||
ING Bank NV (USD), 0.01%, 11/02/2020 | 453,584 | 453,584 | ||||||
Rabobank Nederland NV (USD), 0.03%, 11/02/2020 | 708,067 | 708,067 | ||||||
1,161,651 | ||||||||
UNITED KINGDOM (3.3%) | ||||||||
BNP Paribas (USD), 0.03%, 11/02/2020 | 708,957 | 708,957 | ||||||
Total Certificates of Deposit | 4,112,063 | |||||||
COMMERCIAL PAPER (4.6%) | ||||||||
FRANCE (2.3%) | ||||||||
Agence Centrale des Organismes de Securite Sociale (USD), 0.12%, 11/05/2020 | 500,000 | 499,993 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 19 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Shares or Principal Amount | Value (US$) | |||||||
COMMERCIAL PAPER (continued) | ||||||||
SUPRANATIONAL (2.3%) | ||||||||
Eurofima (USD), 0.18%, 11/09/2020 | $ | 500,000 | $ | 499,980 | ||||
Total Commercial Paper | 999,973 | |||||||
MONEY MARKET FUNDS (20.4%) | ||||||||
UNITED STATES (20.4%) | ||||||||
State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03% (e) | 4,437,036 | 4,437,036 | ||||||
Total Money Market Funds | 4,437,036 | |||||||
U.S. TREASURIES (32.1%) | ||||||||
U.S. Treasury Bill | ||||||||
(USD), 0.15%, 11/27/2020 (d)(f) | 1,000,000 | 999,941 | ||||||
(USD), 0.09%, 12/10/2020 (f) | 2,500,000 | 2,499,766 | ||||||
(USD), 0.08%, 01/07/2021 (f) | 2,000,000 | 1,999,679 | ||||||
(USD), 0.09%, 02/18/2021 (f) | 1,500,000 | 1,499,572 | ||||||
6,998,958 | ||||||||
Total U.S. Treasuries | 6,998,958 | |||||||
Total Short-Term Investment | 16,548,030 | |||||||
Total Investments (Cost $21,519,939) (g)—100.8% | 21,943,127 | |||||||
Liabilities in Excess of Other Assets—(0.8)% | (167,986 | ) | ||||||
Net Assets—100.0% | $ | 21,775,141 |
(a) | Non-income producing security. |
(b) | Denotes a security issued under Regulation S or Rule 144A. |
(c) | Illiquid security. |
(d) | All or a portion of the security has been designated as collateral for swap contracts. |
(e) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of October 31, 2020. |
(f) | The rate shown is the discount yield at the time of purchase. |
(g) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
ADR | American Depositary Receipt |
AUD | Australian Dollar |
BRL | Brazilian Real |
CAD | Canadian Dollar |
CHF | Swiss Franc |
CNY | Chinese Yuan Renminbi |
COP | Colombian Peso |
CPI | Consumer Price Index |
DKK | Danish Krone |
EUR | Euro Currency |
GBP | British Pound Sterling |
HKD | Hong Kong Dollar |
IDR | Indonesian Rupiah |
INR | Indian Rupee |
JPY | Japanese Yen |
KRW | South Korean Won |
NOK | Norwegian Krone |
NZD | New Zealand Dollar |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
RUB | Russian Ruble |
SEK | Swedish Krona |
SGD | Singapore Dollar |
THB | Thai Baht |
TWD | New Taiwan Dollar |
UK | RPI United Kingdom Retail Price Index |
USD | U.S. Dollar |
ZAR | South African Rand |
At October 31, 2020, the Fund held the following futures contracts:
Futures Contracts | Number of Contracts Long/(Short) | Expiration Date | Notional Amount | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
LONG CONTRACT POSITIONS | |||||||||||||||
Australian 10 Year Bond Futures | 38 | 12/15/2020 | $ 3,948,829 | $ 3,993,554 | $ 44,725 | ||||||||||
Euro STOXX 50 Future | 6 | 12/18/2020 | 226,578 | 206,772 | (19,806 | ) | |||||||||
TOPIX Index Future | 4 | 12/10/2020 | 623,116 | 600,984 | (22,132 | ) | |||||||||
United States Treasury Note 6%—5 year | 21 | 12/31/2020 | 2,639,504 | 2,637,633 | (1,871 | ) | |||||||||
$916 | |||||||||||||||
SHORT CONTRACT POSITIONS | |||||||||||||||
FTSE 250 Index | (11 | ) | 12/18/2020 | $ (477,776 | ) | $ (489,490 | ) | $ (11,714 | ) | ||||||
United States Treasury Long Bond Future | (5 | ) | 12/21/2020 | (888,898 | ) | (862,344 | ) | 26,554 | |||||||
$14,840 | |||||||||||||||
$15,756 |
See accompanying Notes to Financial Statements.
20 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
At October 31, 2020, the Fund's open forward foreign currency exchange contracts were as follows:
Purchase Contracts Settlement Date* | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
Australian Dollar/United States Dollar | |||||||||||||||
11/09/2020 | HSBC Bank plc | AUD | 36,262 | USD | 26,419 | $ 25,489 | $ (930 | ) | |||||||
11/09/2020 | JPMorgan Chase Bank N.A. | AUD | 16,489 | USD | 11,821 | 11,591 | (230 | ) | |||||||
11/09/2020 | Royal Bank of Canada | AUD | 50,914 | USD | 36,572 | 35,789 | (783 | ) | |||||||
12/14/2020 | Citibank N.A. | AUD | 230,000 | USD | 170,268 | 161,700 | (8,568 | ) | |||||||
01/14/2021 | Barclays Bank plc | AUD | 520,000 | USD | 365,854 | 365,643 | (211 | ) | |||||||
02/12/2021 | Barclays Bank plc | AUD | 196,000 | USD | 137,917 | 137,836 | (81 | ) | |||||||
Brazilian Real/United States Dollar | |||||||||||||||
11/09/2020 | Citibank N.A. | BRL | 619,780 | USD | 108,624 | 107,990 | (634 | ) | |||||||
11/09/2020 | Goldman Sachs & Co. | BRL | 758,510 | USD | 133,704 | 132,162 | (1,542 | ) | |||||||
11/09/2020 | HSBC Bank plc | BRL | 326,200 | USD | 56,771 | 56,837 | 66 | ||||||||
British Pound/United States Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | GBP | 1,102 | USD | 1,424 | 1,427 | 3 | ||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | GBP | 1,767 | USD | 2,254 | 2,289 | 35 | ||||||||
11/09/2020 | Royal Bank of Canada | GBP | 44,660 | USD | 58,661 | 57,859 | (802 | ) | |||||||
11/20/2020 | Barclays Bank plc | GBP | 50,000 | USD | 66,560 | 64,781 | (1,779 | ) | |||||||
11/20/2020 | JPMorgan Chase Bank N.A. | GBP | 55,000 | USD | 71,629 | 71,259 | (370 | ) | |||||||
01/14/2021 | JPMorgan Chase Bank N.A. | GBP | 146,000 | USD | 188,752 | 189,247 | 495 | ||||||||
Canadian Dollar/United States Dollar | |||||||||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | CAD | 12,671 | USD | 9,632 | 9,511 | (121 | ) | |||||||
11/09/2020 | Royal Bank of Canada | CAD | 5,913 | USD | 4,489 | 4,438 | (51 | ) | |||||||
01/14/2021 | JPMorgan Chase Bank N.A. | CAD | 491,000 | USD | 368,681 | 368,692 | 11 | ||||||||
Colombian Peso/United States Dollar | |||||||||||||||
11/09/2020 | Citibank N.A. | COP | 1,169,600,000 | USD | 304,026 | 302,137 | (1,889 | ) | |||||||
Danish Krone/United States Dollar | |||||||||||||||
11/09/2020 | Citibank N.A. | DKK | 260,641 | USD | 41,589 | 40,782 | (807 | ) | |||||||
11/09/2020 | Goldman Sachs & Co. | DKK | 275,328 | USD | 43,719 | 43,080 | (639 | ) | |||||||
Euro/United States Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | EUR | 113,428 | USD | 134,435 | 132,121 | (2,314 | ) | |||||||
11/09/2020 | Citibank N.A. | EUR | 52,246 | USD | 62,291 | 60,856 | (1,435 | ) | |||||||
11/09/2020 | JPMorgan Chase Bank N.A. | EUR | 3,226 | USD | 3,819 | 3,757 | (62 | ) | |||||||
11/09/2020 | Royal Bank of Canada | EUR | 77,469 | USD | 90,908 | 90,236 | (672 | ) | |||||||
11/13/2020 | HSBC Bank plc | EUR | 96,000 | USD | 114,039 | 111,831 | (2,208 | ) | |||||||
12/10/2020 | Goldman Sachs & Co. | EUR | 67,000 | USD | 79,650 | 78,098 | (1,552 | ) | |||||||
Hong Kong Dollar/United States Dollar | |||||||||||||||
11/09/2020 | HSBC Bank plc | HKD | 269,209 | USD | 34,733 | 34,726 | (7 | ) | |||||||
11/09/2020 | Royal Bank of Canada | HKD | 24,041 | USD | 3,101 | 3,101 | – | ||||||||
Indian Rupee/United States Dollar | |||||||||||||||
11/09/2020 | Citibank N.A. | INR | 16,500,000 | USD | 218,375 | 221,483 | 3,108 | ||||||||
11/09/2020 | Goldman Sachs & Co. | INR | 5,710,000 | USD | 75,835 | 76,646 | 811 | ||||||||
02/10/2021 | Goldman Sachs & Co. | INR | 4,442,000 | USD | 59,575 | 59,075 | (500 | ) | |||||||
02/10/2021 | HSBC Bank plc | INR | 9,106,100 | USD | 121,403 | 121,104 | (299 | ) | |||||||
02/10/2021 | JPMorgan Chase Bank N.A. | INR | 3,997,800 | USD | 53,337 | 53,168 | (169 | ) | |||||||
Indonesian Rupiah/United States Dollar | |||||||||||||||
11/09/2020 | Citibank N.A. | IDR | 1,704,300,000 | USD | 115,296 | 115,723 | 427 | ||||||||
11/09/2020 | Goldman Sachs & Co. | IDR | 1,150,000,000 | USD | 76,129 | 78,086 | 1,957 | ||||||||
11/09/2020 | HSBC Bank plc | IDR | 1,748,000,000 | USD | 119,187 | 118,690 | (497 | ) |
See accompanying Notes to Financial Statements.
2020 Annual Report | 21 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Purchase Contracts Settlement Date* | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
Japanese Yen/United States Dollar | |||||||||||||||
11/09/2020 | Citibank N.A. | JPY | 651,409 | USD | 6,172 | $ 6,222 | $ 50 | ||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | JPY | 3,164,411 | USD | 30,038 | 30,227 | 189 | ||||||||
11/09/2020 | Royal Bank of Canada | JPY | 15,119,622 | USD | 142,826 | 144,424 | 1,598 | ||||||||
12/14/2020 | HSBC Bank plc | JPY | 17,900,000 | USD | 169,529 | 171,070 | 1,541 | ||||||||
12/14/2020 | JPMorgan Chase Bank N.A. | JPY | 11,100,000 | USD | 105,433 | 106,082 | 649 | ||||||||
New Russian Ruble/United States Dollar | |||||||||||||||
11/09/2020 | HSBC Bank plc | RUB | 21,750,000 | USD | 294,995 | 273,598 | (21,397 | ) | |||||||
02/10/2021 | HSBC Bank plc | RUB | 17,182,500 | USD | 217,339 | 214,121 | (3,218 | ) | |||||||
New Taiwan Dollar/United States Dollar | |||||||||||||||
11/09/2020 | Citibank N.A. | TWD | 6,540,000 | USD | 225,455 | 229,548 | 4,093 | ||||||||
11/09/2020 | Goldman Sachs & Co. | TWD | 938,498 | USD | 32,891 | 32,940 | 49 | ||||||||
11/09/2020 | HSBC Bank plc | TWD | 3,128,145 | USD | 108,042 | 109,795 | 1,753 | ||||||||
New Zealand Dollar/United States Dollar | |||||||||||||||
11/13/2020 | Goldman Sachs & Co. | NZD | 341,000 | USD | 223,465 | 225,466 | 2,001 | ||||||||
02/12/2021 | Barclays Bank plc | NZD | 208,000 | USD | 137,885 | 137,529 | (356 | ) | |||||||
Norwegian Krone/United States Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | NOK | 22,871 | USD | 2,597 | 2,396 | (201 | ) | |||||||
11/09/2020 | HSBC Bank plc | NOK | 12,213 | USD | 1,335 | 1,279 | (56 | ) | |||||||
12/14/2020 | Goldman Sachs & Co. | NOK | 1,490,000 | USD | 171,749 | 156,061 | (15,688 | ) | |||||||
Singapore Dollar/United States Dollar | |||||||||||||||
11/09/2020 | HSBC Bank plc | SGD | 13,904 | USD | 10,227 | 10,179 | (48 | ) | |||||||
South African Rand/United States Dollar | |||||||||||||||
11/09/2020 | Goldman Sachs & Co. | ZAR | 5,423,700 | USD | 327,645 | 333,058 | 5,413 | ||||||||
South Korean Won/United States Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | KRW | 268,000,000 | USD | 226,245 | 235,926 | 9,681 | ||||||||
11/09/2020 | HSBC Bank plc | KRW | 84,000,000 | USD | 70,965 | 73,947 | 2,982 | ||||||||
11/20/2020 | HSBC Bank plc | KRW | 45,000,000 | USD | 38,016 | 39,597 | 1,581 | ||||||||
01/15/2021 | HSBC Bank plc | KRW | 397,280,000 | USD | 345,938 | 349,796 | 3,858 | ||||||||
01/22/2021 | HSBC Bank plc | KRW | 366,720,000 | USD | 320,352 | 322,820 | 2,468 | ||||||||
02/10/2021 | Citibank N.A. | KRW | 278,080,000 | USD | 245,540 | 244,711 | (829 | ) | |||||||
Swedish Krona/United States Dollar | |||||||||||||||
11/09/2020 | HSBC Bank plc | SEK | 69,591 | USD | 7,889 | 7,821 | (68 | ) | |||||||
11/09/2020 | JPMorgan Chase Bank N.A. | SEK | 225,503 | USD | 26,133 | 25,344 | (789 | ) | |||||||
11/13/2020 | Goldman Sachs & Co. | SEK | 988,000 | USD | 113,990 | 111,045 | (2,945 | ) | |||||||
01/14/2021 | Goldman Sachs & Co. | SEK | 2,510,000 | USD | 276,027 | 282,409 | 6,382 | ||||||||
Swiss Franc/United States Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | CHF | 17,425 | USD | 19,351 | 19,007 | (344 | ) | |||||||
11/09/2020 | JPMorgan Chase Bank N.A. | CHF | 5,155 | USD | 5,654 | 5,623 | (31 | ) | |||||||
11/13/2020 | Barclays Bank plc | CHF | 104,000 | USD | 114,799 | 113,453 | (1,346 | ) | |||||||
12/14/2020 | Goldman Sachs & Co. | CHF | 204,000 | USD | 220,599 | 222,767 | 2,168 | ||||||||
01/14/2021 | Goldman Sachs & Co. | CHF | 255,000 | USD | 276,113 | 278,759 | 2,646 | ||||||||
Thai Baht/United States Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | THB | 2,250,000 | USD | 72,171 | 72,188 | 17 | ||||||||
11/09/2020 | HSBC Bank plc | THB | 7,010,000 | USD | 225,158 | 224,905 | (253 | ) | |||||||
02/10/2021 | Goldman Sachs & Co. | THB | 5,463,400 | USD | 174,528 | 175,231 | 703 | ||||||||
02/10/2021 | JPMorgan Chase Bank N.A. | THB | 1,852,000 | USD | 59,306 | 59,400 | 94 | ||||||||
$ 8,597,984 | $ (19,892 | ) |
See accompanying Notes to Financial Statements.
22 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Sale Contracts Settlement Date* | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
United States Dollar/Australian Dollar | |||||||||||||||
11/09/2020 | Royal Bank of Canada | USD | 138,916 | AUD | 192,363 | $ 135,215 | $ 3,701 | ||||||||
12/10/2020 | JPMorgan Chase Bank N.A. | USD | 59,687 | AUD | 84,000 | 59,054 | 633 | ||||||||
12/10/2020 | Royal Bank of Canada | USD | 20,364 | AUD | 28,000 | 19,685 | 679 | ||||||||
12/14/2020 | JPMorgan Chase Bank N.A. | USD | 162,049 | AUD | 230,000 | 161,700 | 349 | ||||||||
01/14/2021 | JPMorgan Chase Bank N.A. | USD | 366,493 | AUD | 520,000 | 365,643 | 850 | ||||||||
01/15/2021 | HSBC Bank plc | USD | 345,343 | AUD | 481,520 | 338,587 | 6,756 | ||||||||
01/22/2021 | HSBC Bank plc | USD | 319,412 | AUD | 444,480 | 312,551 | 6,861 | ||||||||
United States Dollar/Brazilian Real | |||||||||||||||
11/09/2020 | Citibank N.A. | USD | 81,623 | BRL | 447,000 | 77,885 | 3,738 | ||||||||
11/09/2020 | Goldman Sachs & Co. | USD | 304,009 | BRL | 1,600,000 | 278,781 | 25,228 | ||||||||
02/10/2021 | Citibank N.A. | USD | 108,330 | BRL | 619,780 | 107,656 | 674 | ||||||||
02/10/2021 | Goldman Sachs & Co. | USD | 59,030 | BRL | 342,510 | 59,494 | (464 | ) | |||||||
02/10/2021 | HSBC Bank plc | USD | 56,615 | BRL | 326,200 | 56,661 | (46 | ) | |||||||
United States Dollar/British Pound | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 55,209 | GBP | 42,472 | 55,024 | 185 | ||||||||
11/09/2020 | Citibank N.A. | USD | 1,865 | GBP | 1,466 | 1,899 | (34 | ) | |||||||
11/09/2020 | HSBC Bank plc | USD | 9,998 | GBP | 7,724 | 10,007 | (9 | ) | |||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 58,183 | GBP | 44,139 | 57,184 | 999 | ||||||||
11/09/2020 | Royal Bank of Canada | USD | 551,010 | GBP | 419,996 | 544,123 | 6,887 | ||||||||
11/20/2020 | HSBC Bank plc | USD | 70,500 | GBP | 54,000 | 69,964 | 536 | ||||||||
11/20/2020 | Royal Bank of Canada | USD | 90,940 | GBP | 71,000 | 91,989 | (1,049 | ) | |||||||
01/14/2021 | JPMorgan Chase Bank N.A. | USD | 367,852 | GBP | 287,640 | 372,843 | (4,991 | ) | |||||||
United States Dollar/Canadian Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 16,312 | CAD | 21,499 | 16,137 | 175 | ||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 5,775 | CAD | 7,543 | 5,662 | 113 | ||||||||
11/09/2020 | Royal Bank of Canada | USD | 30,894 | CAD | 40,887 | 30,690 | 204 | ||||||||
01/14/2021 | Goldman Sachs & Co. | USD | 367,062 | CAD | 491,000 | 368,692 | (1,630 | ) | |||||||
United States Dollar/Chinese Renminbi | |||||||||||||||
11/20/2020 | Citibank N.A. | USD | 77,251 | CNY | 540,000 | 80,521 | (3,270 | ) | |||||||
11/20/2020 | HSBC Bank plc | USD | 296,939 | CNY | 2,000,000 | 298,225 | (1,286 | ) | |||||||
United States Dollar/Colombian Peso | |||||||||||||||
11/09/2020 | Citibank N.A. | USD | 91,501 | COP | 349,000,000 | 90,156 | 1,345 | ||||||||
11/09/2020 | Goldman Sachs & Co. | USD | 278,868 | COP | 1,060,000,000 | 273,825 | 5,043 | ||||||||
02/10/2021 | Citibank N.A. | USD | 233,765 | COP | 900,600,000 | 231,911 | 1,854 | ||||||||
United States Dollar/Danish Krone | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 223,431 | DKK | 1,401,025 | 219,213 | 4,218 | ||||||||
11/09/2020 | Goldman Sachs & Co. | USD | 82,830 | DKK | 520,885 | 81,501 | 1,329 | ||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 9,989 | DKK | 63,278 | 9,901 | 88 | ||||||||
United States Dollar/Euro | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 19,665 | EUR | 16,566 | 19,296 | 369 | ||||||||
11/09/2020 | Citibank N.A. | USD | 74,349 | EUR | 62,788 | 73,135 | 1,214 | ||||||||
11/09/2020 | HSBC Bank plc | USD | 39,838 | EUR | 33,310 | 38,800 | 1,038 | ||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 56,041 | EUR | 47,476 | 55,301 | 740 | ||||||||
11/09/2020 | Royal Bank of Canada | USD | 926,902 | EUR | 780,311 | 908,909 | 17,993 | ||||||||
11/13/2020 | HSBC Bank plc | USD | 115,075 | EUR | 96,000 | 111,831 | 3,244 | ||||||||
12/10/2020 | Citibank N.A. | USD | 86,557 | EUR | 73,000 | 85,092 | 1,465 | ||||||||
12/10/2020 | Royal Bank of Canada | USD | 86,921 | EUR | 74,000 | 86,257 | 664 | ||||||||
02/12/2021 | JPMorgan Chase Bank N.A. | USD | 183,566 | EUR | 157,000 | 183,292 | 274 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 23 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Sale Contracts Settlement Date* | Counterparty | Amount Purchased | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
United States Dollar/Hong Kong Dollar | |||||||||||||||
11/09/2020 | HSBC Bank plc | USD | 98,674 | HKD | 764,880 | $ 98,663 | $ 11 | ||||||||
11/09/2020 | Royal Bank of Canada | USD | 2,248 | HKD | 17,417 | 2,247 | 1 | ||||||||
11/20/2020 | HSBC Bank plc | USD | 47,734 | HKD | 370,000 | 47,728 | 6 | ||||||||
United States Dollar/Indian Rupee | |||||||||||||||
11/09/2020 | Goldman Sachs & Co. | USD | 60,145 | INR | 4,442,000 | 59,626 | 519 | ||||||||
11/09/2020 | HSBC Bank plc | USD | 122,549 | INR | 9,106,100 | 122,233 | 316 | ||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 53,841 | INR | 3,997,800 | 53,663 | 178 | ||||||||
United States Dollar/Indonesian Rupiah | |||||||||||||||
11/09/2020 | HSBC Bank plc | USD | 372,363 | IDR | 5,520,000,000 | 374,811 | (2,448 | ) | |||||||
02/10/2021 | Citibank N.A. | USD | 114,109 | IDR | 1,704,300,000 | 114,211 | (102 | ) | |||||||
02/10/2021 | HSBC Bank plc | USD | 118,036 | IDR | 1,748,000,000 | 117,139 | 897 | ||||||||
United States Dollar/Japanese Yen | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 56,107 | JPY | 5,913,375 | 56,485 | (378 | ) | |||||||
11/09/2020 | Citibank N.A. | USD | 22,190 | JPY | 2,347,601 | 22,425 | (235 | ) | |||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 51,758 | JPY | 5,482,161 | 52,366 | (608 | ) | |||||||
11/09/2020 | Royal Bank of Canada | USD | 394,424 | JPY | 41,635,449 | 397,707 | (3,283 | ) | |||||||
12/14/2020 | Barclays Bank plc | USD | 139,965 | JPY | 14,600,000 | 139,532 | 433 | ||||||||
United States Dollar/New Russian Ruble | |||||||||||||||
11/09/2020 | HSBC Bank plc | USD | 219,343 | RUB | 17,182,500 | 216,142 | 3,201 | ||||||||
United States Dollar/New Taiwan Dollar | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 300,233 | TWD | 8,750,000 | 307,117 | (6,884 | ) | |||||||
11/09/2020 | Citibank N.A. | USD | 132,543 | TWD | 3,848,140 | 135,066 | (2,523 | ) | |||||||
11/09/2020 | Goldman Sachs & Co. | USD | 7,605 | TWD | 217,522 | 7,635 | (30 | ) | |||||||
United States Dollar/New Zealand Dollar | |||||||||||||||
11/13/2020 | JPMorgan Chase Bank N.A. | USD | 227,290 | NZD | 341,000 | 225,466 | 1,824 | ||||||||
United States Dollar/Norwegian Krone | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 12,803 | NOK | 115,441 | 12,093 | 710 | ||||||||
12/14/2020 | Goldman Sachs & Co. | USD | 155,713 | NOK | 1,490,000 | 156,061 | (348 | ) | |||||||
United States Dollar/Singapore Dollar | |||||||||||||||
11/09/2020 | HSBC Bank plc | USD | 27,757 | SGD | 38,008 | 27,826 | (69 | ) | |||||||
United States Dollar/South African Rand | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 83,630 | ZAR | 1,470,000 | 90,270 | (6,640 | ) | |||||||
11/09/2020 | Citibank N.A. | USD | 288,615 | ZAR | 5,010,000 | 307,654 | (19,039 | ) | |||||||
02/10/2021 | Goldman Sachs & Co. | USD | 240,619 | ZAR | 3,973,700 | 241,475 | (856 | ) | |||||||
United States Dollar/South Korean Won | |||||||||||||||
11/09/2020 | Barclays Bank plc | USD | 62,129 | KRW | 73,595,604 | 64,788 | (2,659 | ) | |||||||
11/09/2020 | Citibank N.A. | USD | 245,537 | KRW | 278,080,000 | 244,799 | 738 | ||||||||
11/09/2020 | HSBC Bank plc | USD | 65,777 | KRW | 78,115,374 | 68,766 | (2,989 | ) | |||||||
11/20/2020 | HSBC Bank plc | USD | 37,936 | KRW | 45,000,000 | 39,597 | (1,661 | ) | |||||||
United States Dollar/Swedish Krona | |||||||||||||||
11/09/2020 | Goldman Sachs & Co. | USD | 5,341 | SEK | 46,652 | 5,243 | 98 | ||||||||
11/09/2020 | HSBC Bank plc | USD | 51,459 | SEK | 446,085 | 50,135 | 1,324 | ||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 4,856 | SEK | 41,917 | 4,711 | 145 | ||||||||
11/13/2020 | Goldman Sachs & Co. | USD | 114,938 | SEK | 988,000 | 111,045 | 3,893 | ||||||||
01/14/2021 | Barclays Bank plc | USD | 282,443 | SEK | 2,510,000 | 282,409 | 34 |
See accompanying Notes to Financial Statements.
24 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
Sale Contracts
Settlement Date* | Counterparty | Amount
Purchased | Amount
Sold | Fair Value | Unrealized
Appreciation/
(Depreciation) | ||||||||||
United States Dollar/Swiss Franc | |||||||||||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 20,547 | CHF | 18,724 | $ 20,424 | $ 123 | ||||||||
11/09/2020 | Royal Bank of Canada | USD | 4,282 | CHF | 3,882 | 4,234 | 48 | ||||||||
11/13/2020 | Citibank N.A. | USD | 115,584 | CHF | 104,000 | 113,453 | 2,131 | ||||||||
12/14/2020 | Citibank N.A. | USD | 226,921 | CHF | 204,000 | 222,767 | 4,154 | ||||||||
01/14/2021 | HSBC Bank plc | USD | 279,004 | CHF | 255,000 | 278,759 | 245 | ||||||||
02/12/2021 | HSBC Bank plc | USD | 183,967 | CHF | 168,000 | 183,810 | 157 | ||||||||
United States Dollar/Thai Baht | |||||||||||||||
11/09/2020 | Goldman Sachs & Co. | USD | 230,220 | THB | 7,209,596 | 231,308 | (1,088 | ) | |||||||
11/09/2020 | JPMorgan Chase Bank N.A. | USD | 59,425 | THB | 1,852,000 | 59,418 | 7 | ||||||||
$ 11,815,599 | $ 56,020 |
At October 31, 2020, the Fund's open forward foreign cross currency contracts were as follows:
Purchase/Sale Settlement Date | Counterparty | Amount Purchased | Amount Sold | Contract Value | Fair Value | Unrealized Appreciation | |||||||||||
Japanese Yen/Euro | |||||||||||||||||
11/27/2020 | JPMorgan Chase Bank N.A. | JPY | 93,700,000 | EUR | 749,422 | $ 905,376 | $ 21,956 | ||||||||||
11/27/2020 | Barclays Bank plc | JPY | 143,600,000 | EUR | 1,140,706 | 1,393,309 | 42,762 | ||||||||||
$ 2,298,685 | $ 64,718 |
Unrealized appreciation on forward foreign currency exchange contracts | $ 242,186 | |||
Unrealized depreciation on forward foreign currency exchange contracts | (141,340 | ) |
* Certain contracts with different trade dates and like characteristics have been shown net.
At October 31, 2020, the Fund held the following centrally cleared credit default swaps:
Expiration Date | Notional Amount | Credit Index | Fixed Rate | Implied Credit Spread* | Frequency of Payments Made | Premiums Paid (Received) | Value | Unrealized Depreciation | |||||||||||||||||
Buy Protection: | |||||||||||||||||||||||||
12/20/2025 | 2,781,000 | CDX.EM | Equal to (1.00)% | N/A | Quarterly | $ 193,836 | $ 152,978 | $ (40,858 | ) | ||||||||||||||||
$ 193,836 | $ 152,978 | $ (40,858 | ) | ||||||||||||||||||||||
Sell Protection: | |||||||||||||||||||||||||
12/20/2025 | 3,602,292 | CDX.NA.HY | Equal to 5.00% | 4.23 | % | Quarterly | $ 155,979 | $ 144,228 | $ (11,751 | ) | |||||||||||||||
12/20/2025 | 1,170,000 | CDX.NA.HY | Equal to 5.00% | 4.23 | % | Quarterly | 52,356 | 46,844 | (5,512 | ) | |||||||||||||||
12/20/2025 | 1,110,000 | iTraxx Europe Crossover | Equal to 5.00% | 3.67 | % | Quarterly | 91,338 | 85,135 | (6,203 | ) | |||||||||||||||
12/20/2025 | 452,000 | iTraxx Europe Sub Financials | Equal to 1.00% | 1.63 | % | Quarterly | (13,932 | ) | (15,935 | ) | (2,003 | ) | |||||||||||||
$ 285,741 | $ 260,272 | $ (25,469 | ) |
* | Implied credit spreads, represented in absolute terms, are utilized in determining the market value of credit default swaps agreements on corporate issues or sovereign issues and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made prior to entering into the agreement. For credit default swap with asset-backed securities or credit indices as the underlying assets, the quoted market prices and resulting market values serve as an indicator of the current status of the payment/performance risk. Wider credit spreads and increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the reference entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. |
See accompanying Notes to Financial Statements.
2020 Annual Report | 25 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
At October 31, 2020, the Fund held the following over-the-counter interest rate swaps:
Currency | Notional Amount | Expiration Date | Receive (Pay) Floating Rate | Floating Rate Index | Fixed Rate | Frequency of Payments Made | Premiums Paid (Received) | Value | Unrealized Appreciation/ (Depreciation) | ||||||||||||||||
EUR | $ 508,000 | 07/02/2050 | Receive | 6-month EURIBOR | 0.01 | % | Semiannually | $– | $ (7,870 | ) | $ (7,870 | ) | |||||||||||||
EUR | 1,610,000 | 07/02/2030 | Pay | 6-month EURIBOR | 0.21 | % | Semiannually | – | 15,894 | 15,894 | |||||||||||||||
$– | $ 8,024 |
At October 31, 2020, the Fund held the following centrally cleared interest rate swaps:
Currency | Notional Amount | Expiration Date | Receive (Pay) Floating Rate | Floating Rate Index | Fixed Rate | Frequency of Payments Made | Premiums Paid (Received) | Value | Unrealized Appreciation/ (Depreciation) | ||||||||||||||||||
GBP | $ 516,000 | 11/15/2029 | Receive | 12-month UK RPI | 3.47 | % | Annually | $ (16,912 | ) | $ (13,434 | ) | $ 3,478 | |||||||||||||||
GBP | 355,000 | 11/15/2029 | Receive | 12-month UK RPI | 3.47 | % | Annually | (15,053 | ) | (9,242 | ) | 5,811 | |||||||||||||||
EUR | 659,000 | 06/15/2050 | Receive | 6-month EURIBOR | 0.09 | % | Semiannually | – | (33,124 | ) | (33,124 | ) | |||||||||||||||
USD | 134,000 | 07/23/2050 | Receive | 12-month CPI | 1.83 | % | Annually | – | 14,266 | 14,266 | |||||||||||||||||
EUR | 43,000 | 08/28/2050 | Receive | 6-month EURIBOR | 0.07 | % | Semiannually | – | (1,932 | ) | (1,932 | ) | |||||||||||||||
EUR | 43,000 | 08/28/2050 | Receive | 6-month EURIBOR | 0.07 | % | Semiannually | – | (1,972 | ) | (1,972 | ) | |||||||||||||||
EUR | 86,000 | 08/31/2050 | Receive | 6-month EURIBOR | 0.05 | % | Semiannually | – | (3,178 | ) | (3,178 | ) | |||||||||||||||
USD | 35,500 | 09/02/2050 | Receive | 12-month CPI | 2.06 | % | Annually | – | 534 | 534 | |||||||||||||||||
USD | 35,500 | 09/02/2050 | Receive | 12-month CPI | 2.06 | % | Annually | – | 500 | 500 | |||||||||||||||||
$(31,965 | ) | $ (47,582 | ) | $ (15,617 | ) | ||||||||||||||||||||||
GBP | $2,790,000 | 11/15/2029 | Pay | 12-month UK RPI | 3.47 | % | Annually | $ | – | $ 72,636 | $ 72,636 | ||||||||||||||||
EUR | 2,020,000 | 06/15/2030 | Pay | 6-month EURIBOR | 1.00 | % | Semiannually | – | 48,631 | 48,631 | |||||||||||||||||
EUR | 122,750 | 08/28/2030 | Pay | 6-month EURIBOR | 1.00 | % | Semiannually | – | 2,119 | 2,119 | |||||||||||||||||
EUR | 122,750 | 08/28/2030 | Pay | 6-month EURIBOR | 1.00 | % | Semiannually | – | 1,861 | 1,861 | |||||||||||||||||
EUR | 245,500 | 08/31/2030 | Pay | 6-month EURIBOR | 0.18 | % | Semiannually | – | 2,969 | 2,969 | |||||||||||||||||
USD | 15,900 | 07/23/2050 | Pay | 12-month CPI | 1.83 | % | Annually | (1,081 | ) | (1,693 | ) | (612 | ) | ||||||||||||||
USD | 35,500 | 09/02/2050 | Pay | 12-month CPI | 2.06 | % | Annually | 955 | (534 | ) | (1,489 | ) | |||||||||||||||
USD | 35,500 | 09/02/2050 | Pay | 12-month CPI | 2.06 | % | Annually | 991 | (499 | ) | (1,490 | ) | |||||||||||||||
$ 865 | $125,490 | $ 124,625 | |||||||||||||||||||||||||
$(31,100 | ) | $ 77,908 | $ 109,008 |
At October 31, 2020, the Fund held the following over-the-counter total return swaps:
Currency | Notional Amount | Expiration Date | Receive (Pay) Total Return of Equity Security | Equity Index | Floating Rate Index | Frequency of Payments Made | Value | Unrealized Appreciation/ (Depreciation) | |||||||||||||
MSCI China A | |||||||||||||||||||||
USD | $(351,443 | ) | 01/12/2021 | Pay | Total Return Index | 1-month LIBOR | Monthly | $(7,749 | ) | $(7,749 | ) | ||||||||||
Total Total Return Swaps | (7,749 | ) |
See accompanying Notes to Financial Statements.
26 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Global Absolute Return Strategies Fund
At October 31, 2020, the Fund held the following purchased options:
Notional Amount | Value | ||||||
PUT OPTIONS PURCHASED (2.8%) | |||||||
30-year Interest Rate Swap Put, expiring 10/10/2023, Pay 1.34%, Receive 3-month LIBOR | $305,000 | $ 37,151 | |||||
30-year Interest Rate Swap Put, expiring 10/13/2023, Pay 1.305%, Receive 3-month LIBOR | 305,000 | 38,622 | |||||
30-year Interest Rate Swap Put, expiring 10/13/2023, Pay 1.31%, Receive 3-month LIBOR | 305,000 | 38,416 | |||||
30-year Interest Rate Swap Put, expiring 10/16/2023, Pay 1.27%, Receive 3-month LIBOR | 305,000 | 40,131 | |||||
30-year Interest Rate Swap Put, expiring 8/25/2023, Pay 1.12%, Receive 3-month LIBOR | 676,000 | 102,138 | |||||
30-year Interest Rate Swap Put, expiring 8/29/2023, Pay 1.12%, Receive 3-month LIBOR | 676,000 | 102,240 | |||||
30-year Interest Rate Swap Put, expiring 8/29/2023, Pay 1.18%, Receive 3-month LIBOR | 338,000 | 48,048 | |||||
30-year Interest Rate Swap Put, expiring 9/1/2023, Pay 1.235%, Receive 3-month LIBOR | 268,000 | 36,006 | |||||
30-year Interest Rate Swap Put, expiring 9/5/2023, Pay 1.114%, Receive 3-month LIBOR | 268,000 | 40,887 | |||||
30-year Interest Rate Swap Put, expiring 9/5/2023, Pay 1.115%, Receive 3-month LIBOR | 268,000 | 39,328 | |||||
30-year Interest Rate Swap Put, expiring 9/5/2023, Pay 1.126%, Receive 3-month LIBOR | 536,000 | 80,781 | |||||
Total Put Options Purchased | $603,748 |
At October 31, 2020, the Fund held the following written options:
PUT OPTIONS WRITTEN (2.0%) | |||||||
5-year Interest Rate Swap Put, expiring 10/10/2023, Receive 0.88%, Pay 3-month LIBOR | $(1,345,000 | ) | $ (27,936 | ) | |||
5-year Interest Rate Swap Put, expiring 10/13/2023, Receive 0.845%, Pay 3-month LIBOR | (1,345,000 | ) | (29,348 | ) | |||
5-year Interest Rate Swap Put, expiring 10/13/2023, Receive 0.855%, Pay 3-month LIBOR | (1,345,000 | ) | (28,981 | ) | |||
5-year Interest Rate Swap Put, expiring 10/16/2023, Receive 0.828%, Pay 3-month LIBOR | (1,345,000 | ) | (30,049 | ) | |||
5-year Interest Rate Swap Put, expiring 8/25/2023, Receive 0.755%, Pay 3-month LIBOR | (3,188,000 | ) | (73,531 | ) | |||
5-year Interest Rate Swap Put, expiring 8/29/2023, Receive 0.755%, Pay 3-month LIBOR | (3,188,000 | ) | (73,725 | ) | |||
5-year Interest Rate Swap Put, expiring 8/29/2023, Receive 0.775%, Pay 3-month LIBOR | (1,594,000 | ) | (35,939 | ) | |||
5-year Interest Rate Swap Put, expiring 9/1/2023, Receive 0.804%, Pay 3-month LIBOR | (1,230,000 | ) | (26,859 | ) | |||
5-year Interest Rate Swap Put, expiring 9/5/2023, Receive 0.721%, Pay 3-month LIBOR | (1,230,000 | ) | (29,928 | ) | |||
5-year Interest Rate Swap Put, expiring 9/5/2023, Receive 0.731%, Pay 3-month LIBOR | (2,460,000 | ) | (59,117 | ) | |||
5-year Interest Rate Swap Put, expiring 9/5/2023, Receive 0.748%, Pay 3-month LIBOR | (1,230,000 | ) | (28,938 | ) | |||
Total Put Options Written | $(444,351 | ) |
See accompanying Notes to Financial Statements.
2020 Annual Report | 27 |
Aberdeen Intermediate Municipal Income Fund (Unaudited)
Aberdeen Intermediate Municipal Income Fund (Institutional Class shares net of fees) returned 1.10% for the 12-month period ended October 31, 2020, versus the 3.46% return of its benchmark, the ICE Bank of America (BofA) 1-22 Year U.S. Municipal Securities Index, during the same period.
The overall U.S. municipal bond market generated a positive return during the reporting period, with the Bloomberg Barclays Municipal Bond Index,1 a broad municipal bond market benchmark, gaining 3.59%, while the taxable bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index,2 returned 6.19%.
Both the municipal and taxable bond markets were aided by falling interest rates, which declined over the period amid several flights to quality given the continued fallout from the coronavirus (COVID-19) pandemic. In addition, the U.S. Federal Reserve (Fed) introduced several unprecedented actions to support the economy and the proper function of the financial markets. While the overall municipal market generated positive absolute returns during eight of the 12 months of the period, a portion of those gains were given back in March and April 2020. Over this time, investor risk aversion increased and there were concerns about market liquidity and the finances for several municipalities.
The Fund underperformed its benchmark, the ICE BofA ML 1-22 Year Municipal Securities Index, over the 12-month period ended October 31, 2020. The Fund's relatively lower credit-quality positioning was a headwind for relative results, as certain medium-grade and top-tier AAA3 securities outperformed. We continue to focus on adding what we believe is prudent yield to the Fund without taking on significant duration4 risk, while we are targeting overall strong credit quality. Fund performance also was hampered by allocations to the state general obligation, senior housing, and income tax financing bond sectors. On the upside, the Fund's positions in hospitals, gas forward prepay and economic and industrial development bond sectors bolstered performance for the reporting period.
In our view, municipal fundamentals remain stressed as a result of the COVID-19 pandemic and the subsequent economic shutdown. Despite most parts of the country having reopened to a degree, a recent resurgence in cases of COVID-19 will likely force a second shutdown in select areas in which there are material upticks in cases. We believe that these continued fits and starts to the economy will likely be a drag on municipal fundamentals, especially in select sectors. The fiscal and monetary policy responses remain fluid, but our expectation is that Congressional support for municipalities will likely
come during the first quarter of 2021 after President-elect Joe Biden takes office. If the Democratic Party candidates win the two U.S. Senate run-off elections in Georgia fall in early January 2021, the party would narrowly control the Senate as well as the U.S. House of Representatives, which could result in significant stimulus to bolster municipal market fundamentals, in our view. Fund flows and coupon payments may have bolstered municipal performance to start the second half of the 2020 fiscal year, but new issuance has picked up as well.
Against this backdrop, we expect to maintain the Fund's credit mix in an effort to maintain a high distribution yield5 and hedge some risks to the various outcomes that we see on the horizon. While we anticipate maintaining this stance, as risks outweigh returns when it comes to moving down in credit quality at the moment, we recognize that if control of the U.S. Senate were to change, we may add incremental risk within the strategy. Additionally, we do not expect to extend the Fund's duration significantly over the medium term. However, given the market's short-term dynamics, the Fund's duration may increase somewhat, reflecting the impact of the additions of positions in credits that we believe provide opportunistic investments.
Portfolio Management:
U.S. Municipal Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 2.50% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Fixed income securities are subject to certain risks including, but not limited to: interest rate (changes in interest rates may cause a decline in the market value of an investment), credit (changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral), prepayment (debt issuers may repay or refinance their loans or obligations earlier than anticipated), and extension (principal
1 | The Bloomberg Barclays Municipal Bond Index tracks the performance of investment-grade, tax-exempt bonds with a maturity of at least one year. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
2 | The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. |
3 | S&P Global Ratings' credit ratings express the agency's opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. Typically, ratings are expressed as letter grades that range, for example, from AAA to D to communicate the agency's opinion of relative level of credit risk. Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. |
4 | Duration is an estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (i.e., higher risk) in relation to interest-rate movements. |
5 | The distribution yield reflects the amounts that may be expected to be distributed over the next 12 months as a percentage of the fund's share price on a particular date. |
28 | 2020 Annual Report |
Aberdeen Intermediate Municipal Income Fund (Unaudited) (concluded)
repayments may not occur as quickly as anticipated, causing the expected maturity of a security to increase).
Municipal bonds can be significantly affected by political and economic changes, including inflation, as well as uncertainties in the municipal market related to taxation, legislative changes, or the rights of municipal
security holders. Municipal bonds have varying levels of sensitivity to changes in interest rates. Interest rate risk is generally lower for shorter-term Municipal bonds and higher for long term Municipal bonds.
Please read the prospectus for more detailed information regarding these and other risks.
2020 Annual Report | 29 |
Aberdeen Intermediate Municipal Income Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | ||||||||||
Class A | w/o SC | 0.83% | 2.00 | % | 2.73 | % | |||||||
w/SC2 | (1.65%) | 1.48 | % | 2.47 | % | ||||||||
Class C | w/o SC | (0.01%) | 1.23 | % | 1.99 | % | |||||||
w/SC3 | (0.99%) | 1.23 | % | 1.99 | % | ||||||||
Institutional Service Class4 | w/o SC | 1.09% | 2.24 | % | 3.00 | % | |||||||
Institutional Class4,5 | w/o SC | 1.10% | 2.26 | % | 3.01 | % |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | The Fund changed its investment strategy effective February 28, 2019. Performance information for periods prior to February 28, 2019 does not reflect such investment policy. An unaffiliated party served as the subadviser for the Fund from June 23, 2008 to February 27, 2011. |
2 | A 2.50% front-end sales charge was deducted. Prior to February 28, 2019 the front-end sales charge was 4.25%. |
3 | A 1.00% contingent deferred sales charge (CDSC) was deducted from the one year return because it is charged when Class C shares are sold within the first year after purchase. |
4 | Not subject to any sales charge. Returns before the first offering of the Institutional Class and Institutional Service Class shares (February 25, 2013) are based on the previous performance of Class D shares. Returns of each class have not been adjusted to reflect the expenses applicable to the respective classes. Excluding the effect of any fee waivers or reimbursements, this performance is substantially similar to what the Institutional Service Class, and Institutional Class shares would have produced because all classes invest in the same portfolio of securities. Returns for the Institutional Service Class, and Institutional Class shares would only differ to the extent of the differences in expenses of the classes. |
5 | Effective February 25, 2013, all Class D shares of the Fund were converted into Institutional Class shares of the Fund. |
Performance of a $10,000 Investment (as of October 31, 2020)
Comparative performance of $10,000 invested in Class A shares of the Aberdeen Intermediate Municipal Income Fund, the ICE BofA 1-22 Year U.S. Municipal Securities Index and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The ICE BofA 1-22 Year U.S. Municipal Securities Index is a subset of the ICE BofA Merrill Lynch U.S. Municipal Securities Index including all securities with a remaining term to final maturity less than 22 years, calculated on a total return basis. The ICE BofA U.S. Municipal Securities Index tracks the performance of U.S. dollar-denominated investment grade tax-exempt debt publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
30 | 2020 Annual Report |
Aberdeen Intermediate Municipal Income Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||||
Municipal Bonds | 99.1 | % | ||
Short-Term Investment | – | % | ||
Other Assets in Excess of Liabilities | 0.9 | % | ||
100.0 | % |
Amounts listed as "–" are 0% or round to 0%.
Top Holdings* | ||||
Harris County Health Facilities Development Corp. Revenue Bonds (SCH Health Care System), Prerefunded/Escrowed to Maturity, Series B 07/01/2027 | 9.1 | % | ||
New Jersey Transportation Trust Fund Authority Revenue Bonds, Series A 12/15/2034 | 3.5 | % | ||
Maryland Industrial Development Financing Authority Revenue Bonds (Occidental Petroleum Corp.) 03/01/2030 | 3.1 | % | ||
Texas Municipal Gas Acquisition & Supply Corp. I Revenue Bonds, Series D 12/15/2026 | 2.3 | % | ||
Arizona Industrial Development Authority Revenue Bonds, Series B 01/01/2032 | 2.2 | % | ||
New York State Dormitory Authority Revenue Bonds (State University Educational Facilities 3rd Generation), Series A 05/15/2023 | 2.0 | % | ||
State Health & Educational Facilities Authority Revenue Bonds, Series F 07/01/2027 | 1.9 | % | ||
Metropolitan Transportation Authority Revenue Bonds 11/15/2027 | 1.9 | % | ||
Pennsylvania Turnpike Commission Revenue Bonds, Series A 07/15/2029 | 1.8 | % | ||
Hudson Yards Infrastructure Corp. Revenue Bonds, Series A 02/15/2042 | 1.8 | % | ||
Other | 70.4 | % | ||
100.0 | % |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top States | ||||
Texas | 19.3 | % | ||
New York | 16.9 | % | ||
California | 5.5 | % | ||
Wisconsin | 5.0 | % | ||
New Jersey | 4.5 | % | ||
Pennsylvania | 3.9 | % | ||
Michigan | 3.5 | % | ||
Florida | 3.2 | % | ||
Maryland | 3.1 | % | ||
Georgia | 2.7 | % | ||
Other | 32.4 | % | ||
100.0 | % |
2020 Annual Report | 31 |
Statement of Investments
October 31, 2020
Aberdeen Intermediate Municipal Income Fund
Shares or Principal Amount | Value (US$) | |
MUNICIPAL BONDS (99.1%) | ||
Alabama (1.6%) | ||
Black Belt Energy Gas District Revenue Bonds, Series A, 4.00%, 08/01/2047 (a) | $1,000,000 | $ 1,054,410 |
Alaska (1.5%) | ||
City of Valdez Revenue Bonds Pipelines Project, Series B, 5.00%, 01/01/2021 | 1,000,000 | 1,007,530 |
Arizona (2.2%) | ||
Arizona Industrial Development Authority Revenue Bonds, Series B, 5.00%, 01/01/2032 | 1,580,000 | 1,440,660 |
California (5.5%) | ||
Bay Area Toll Authority Revenue Bonds, Series A, 2.95%, 04/01/2047 (a) | 350,000 | 387,405 |
Los Angeles Community College District General Obligation Unlimited Bonds, Series I, 4.00%, 08/01/2029 | 400,000 | 472,148 |
M-S-R Energy Authority Gas Revenue Bonds Series B, 6.13%, 11/01/2029 | 495,000 | 622,883 |
Series A, 6.50%, 11/01/2039 | 500,000 | 777,920 |
San Francisco City & County Public Utilities Commission Revenue Bonds, (Pre-refunded @ $100, 11/01/2020), Series F, 5.00%, 11/01/2024 | 300,000 | 300,000 |
Turlock Irrigation District Revenue Bonds, 5.00%, 01/01/2029 | 1,000,000 | 1,007,180 |
3,567,536 | ||
Connecticut (1.9%) | ||
State Health & Educational Facilities Authority Revenue Bonds, Series F, 5.00%, 07/01/2027 | 1,135,000 | 1,238,739 |
District of Columbia (0.9%) | ||
Washington Convention & Sports Authority Revenue Bonds, Series A, 5.00%, 10/01/2030 | 500,000 | 557,850 |
Florida (3.2%) | ||
City of Tampa Revenue Bonds (Baycare Health Care System), Series A, 4.00%, 11/15/2033 | 1,000,000 | 1,032,050 |
Florida Development Finance Corp. Revenue Bonds (Imagine School At Broward) , 5.00%, 12/15/2039 (b) | 500,000 | 570,870 |
Polk County Industrial Development Authority Revenue Bonds (Carpenter's Home Estates, Inc. Project), 5.00%, 01/01/2039 | 160,000 | 169,664 |
Volusia County Educational Facility Authority Revenue Bonds, Series B, 5.00%, 10/15/2023 | 250,000 | 280,357 |
2,052,941 | ||
Georgia (2.7%) | ||
Floyd County Development Authority Revenue Bonds (Georgia Power Co.), 0.18%, 09/01/2026 (a) | 400,000 | 400,000 |
Main Street Natural Gas, Inc. Revenue Bonds, Series A, 5.00%, 05/15/2035 | 250,000 | 329,677 |
Monroe Country Development Authority Revenue Bonds, 2.35%, 10/01/2048 (a) | 1,000,000 | 1,001,870 |
1,731,547 |
Shares or Principal Amount | Value (US$) | |
Hawaii (1.0%) | ||
City & County Honolulu HI Wastewater System Revenue Bonds, Series A, 5.00%, 07/01/2047 | $ 560,000 | $ 677,382 |
Illinois (2.1%) | ||
Illinois Finance Authority Revenue Bonds (Carle Foundation), Series A, 6.00%, 08/15/2041 | 500,000 | 517,125 |
State of Illinois General Obligation Unlimited Bonds, Series D, 5.00%, 11/01/2021 | 815,000 | 833,427 |
1,350,552 | ||
Indiana (1.2%) | ||
Indiana Finance Authority Revenue Bonds (Earlham College, Inc.), 5.00%, 10/01/2032 | 750,000 | 762,052 |
Kansas (1.5%) | ||
Kansas Hospital Loan City Of Holton Revenue Bonds (Rural Health Resources Of Jackson Co., Inc. Project), 2.50%, 07/01/2021 | 1,000,000 | 1,001,900 |
Kentucky (0.8%) | ||
Kentucky Public Energy Authority Revenue Bonds, Series A, 4.00%, 04/01/2048 (a) | 500,000 | 550,045 |
Louisiana (2.1%) | ||
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds (Glen Retirement System), Series A 5.00%, 01/01/2021 | 75,000 | 75,065 |
5.00%, 01/01/2022 | 160,000 | 160,976 |
5.00%, 01/01/2023 | 170,000 | 171,687 |
Louisiana Public Facilities Authority Revenue Bonds, (Pre-refunded @ $100, 05/15/2026), 3.00%, 05/15/2031 | 10,000 | 11,281 |
New Orleans Aviation Board Revenue Bonds (Louis Armstrong International Airport), 5.00%, 01/01/2028 | 500,000 | 623,390 |
New Orleans Aviation Board Revenue Bonds (Parking Facilities Corp.), 5.00%, 10/01/2027 | 250,000 | 310,570 |
1,352,969 | ||
Maryland (3.1%) | ||
Maryland Industrial Development Financing Authority Revenue Bonds (Occidental Petroleum Corp.), 3.60%, 03/01/2030 (a) | 2,000,000 | 2,000,000 |
Massachusetts (0.9%) | ||
Massachusetts Development Finance Agency Revenue Bonds, Series A, 5.00%, 07/01/2036 | 500,000 | 589,575 |
Michigan (3.5%) | ||
Flint Hospital Building Authority Revenue Bonds 4.00%, 07/01/2035 | 1,000,000 | 1,068,740 |
4.00%, 07/01/2038 | 750,000 | 792,157 |
Michigan Finance Authority Revenue Bonds (Cesar Chavez Academy), 3.25%, 02/01/2024 | 400,000 | 400,600 |
2,261,497 |
See accompanying Notes to Financial Statements.
32 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Intermediate Municipal Income Fund
Shares or Principal Amount | Value (US$) | |
MUNICIPAL BONDS (continued) | ||
Nebraska (1.2%) | ||
Central Plains Energy Project, Gas Project Revenue Bonds (Project No.3), 5.00%, 09/01/2021 | $ 750,000 | $ 777,135 |
New Hampshire (0.9%) | ||
New Hampshire Health & Education Facilities Authority Revenue Bonds (Dartmouth College) 5.00%, 08/01/2035 | 250,000 | 300,475 |
5.00%, 08/01/2036 | 245,000 | 293,449 |
593,924 | ||
New Jersey (4.5%) | ||
New Jersey Educational Facilities Authority Revenue Bonds (The College of New Jersey) Series F, 4.00%, 07/01/2033 | 30,000 | 32,948 |
Series F (Pre-refunded @ $100, 07/01/2026), 4.00%, 07/01/2033 | 70,000 | 83,745 |
New Jersey Transportation Trust Fund Authority Revenue Bonds, Series A, 5.00%, 12/15/2034 | 2,000,000 | 2,283,180 |
Newark Housing Authority Revenue Bonds (Newark Redevelopment Project), 4.00%, 01/01/2037 | 500,000 | 548,330 |
2,948,203 | ||
New York (16.9%) | ||
City of Elmira General Obligation Limited Bonds 5.00%, 07/01/2025 (b) | 105,000 | 115,380 |
5.00%, 07/01/2033 (b) | 625,000 | 683,481 |
City of Poughkeepsie General Obligation Limited Bonds, 5.00%, 06/01/2031 | 145,000 | 155,633 |
Hudson Yards Infrastructure Corp. Revenue Bonds, Series A, 5.00%, 02/15/2042 | 1,000,000 | 1,148,810 |
Metropolitan Transportation Authority Revenue Bonds 5.00%, 11/15/2027 | 695,000 | 744,679 |
5.00%, 11/15/2027 | 1,150,000 | 1,225,417 |
Series A-2, VRN, 5.00%, 11/15/2045 (a) | 400,000 | 437,080 |
Nassau County Local Economic Assistance Corp. Revenue Bonds (Catholic Health Services), 5.00%, 07/01/2030 | 1,000,000 | 1,116,420 |
New York City Water & Sewer System Revenue Bonds, Series EE, 5.00%, 06/15/2037 | 295,000 | 358,767 |
New York State Dormitory Authority Revenue Bonds (State University Educational Facilities 3rd Generation), Series A, 5.50%, 05/15/2023 | 1,160,000 | 1,303,887 |
Oneida County Industrial Development Agency Revenue Bonds (Hamilton College Civic Facilities), 5.00%, 09/15/2027 | 1,000,000 | 1,003,240 |
Port Authority of New York & New Jersey Revenue Bonds, AMT, 5.00%, 07/15/2033 | 400,000 | 504,940 |
Port Authority of New York & New Jersey Revenue Bonds, 5.00%, 10/15/2042 | 560,000 | 657,210 |
Village of Johnson City General Obligation Limited Bonds , Series A, 2.00%, 02/19/2021 | 750,000 | 752,685 |
Village of Valley Stream General Obligation Limited Notes, Series A, 6.50%, 05/20/2021 | 800,000 | 802,952 |
11,010,581 |
Shares or Principal Amount | Value (US$) | |
Ohio (2.0%) | ||
Buckeye Tobacco Settlement Financing Authority Tobacco Settlement Assets-Backed Revenue Bonds 3.00%, 06/01/2048 | $ 500,000 | $ 478,220 |
4.00%, 06/01/2048 | 500,000 | 541,955 |
5.00%, 06/01/2055 | 110,000 | 117,684 |
Ohio Air Quality Development Authority Revenue Bonds (Ohio Valley Electric Corp. Project), Series A, 3.25%, 09/01/2029 | 135,000 | 136,104 |
1,273,963 | ||
Pennsylvania (3.9%) | ||
Montgomery County Industrial Development Authority Revenue Bonds (Imagine School At Broward) , 4.00%, 12/01/2037 | 300,000 | 319,821 |
Pennsylvania Turnpike Commission Revenue Bonds, Series A, 5.25%, 07/15/2029 | 850,000 | 1,163,208 |
School Dist. of the City of Erie, General Obligation Limited Bonds, Series A, (AGM ST AID WITHHLDG), 5.00%, 04/01/2034 | 825,000 | 1,034,443 |
2,517,472 | ||
Puerto Rico (2.1%) | ||
Commonwealth of Puerto Rico General Obligation Unlimited Bonds, Series A, (AGM), 5.25%, 07/01/2024 | 615,000 | 629,409 |
Commonwealth of Puerto Rico Public Improvement General Obligation Unlimited Bonds, (AGC-ICC), 5.50%, 07/01/2022 | 250,000 | 265,493 |
Electric Power Authority Revenue Bonds, Series V, 5.25%, 07/01/2026 | 100,000 | 103,489 |
Highway & Transportation Authority Revenue Bonds, (AGC), 5.50%, 07/01/2031 | 300,000 | 349,803 |
1,348,194 | ||
Rhode Island (1.2%) | ||
Tobacco Settlement Financing Corp. Revenue Bonds, Series B, 4.50%, 06/01/2045 | 750,000 | 784,350 |
South Carolina (1.8%) | ||
City of Rock Hill SC Combined Utility System Revenue Bonds 5.00%, 01/01/2025 | 500,000 | 585,155 |
5.00%, 01/01/2026 | 500,000 | 603,035 |
1,188,190 | ||
Tennessee (2.4%) | ||
Knox County Health Educational & Housing Facilities Board Revenue Bonds (University Health System, Inc.), 5.00%, 09/01/2036 | 500,000 | 568,745 |
Metropolitan Government Nashville & Davidson Health & Educational Facilities Revenue Bonds (Trevecca Nazarene University Project), 5.00%, 10/01/2034 | 360,000 | 399,388 |
Tennessee Energy Acquisition Corp. Revenue Bonds, Series A, 5.25%, 09/01/2023 | 500,000 | 561,875 |
1,530,008 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 33 |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Intermediate Municipal Income Fund
Shares or Principal Amount | Value (US$) | |
MUNICIPAL BONDS (continued) | ||
Texas (19.3%) | ||
Dallas/Fort Worth International Airport Revenue Bonds, Joint Revenue Refunding Bonds, Series B, 5.00%, 11/01/2020 | $1,000,000 | $ 1,000,000 |
Harris County Health Facilities Development Corp. Revenue Bonds (SCH Health Care System), Prerefunded/Escrowed to Maturity, Series B, 5.75%, 07/01/2027 | 4,850,000 | 5,922,189 |
Matagorda County Navigation District No. 1 Revenue Bonds, Series B-1, 4.00%, 06/01/2030 | 1,000,000 | 1,050,640 |
Port of Beaumont Navigation District of Jefferson County Dock & Wharf Facilities Revenue Bonds (Jefferson Railport Terminal II LLC), 4.00%, 01/01/2050 (b) | 1,000,000 | 998,250 |
Tarrant County Cultural Education Facilities Finance Corp. Revenue Bonds (Baylor Scott & White Obligated Group), 5.00%, 11/15/2029 | 800,000 | 966,744 |
Tarrant County Cultural Education Facilities Finance Corp. Revenue Bonds (Texas Health Resources Obligated Group), Series A, 4.00%, 02/15/2036 | 1,000,000 | 1,117,210 |
Texas Municipal Gas Acquisition & Supply Corp. I Revenue Bonds, Series D, 6.25%, 12/15/2026 | 1,275,000 | 1,492,694 |
12,547,727 | ||
Utah (1.1%) | ||
Salt Lake City Corp. Airport Revenue Bonds, Series B, 5.00%, 07/01/2042 | 100,000 | 117,557 |
Utah Charter School Finance Authority Revenue Bonds (Scholar Academy), Series A, 4.50%, 04/15/2048 (a)(b) | 570,000 | 576,424 |
693,981 | ||
Washington (0.3%) | ||
State Housing Finance Commission Revenue Bonds (Transforming Age Project), Series A, 5.00%, 01/01/2024 (b) | 180,000 | 190,940 |
West Virginia (0.8%) | ||
Monongalia County Building Commission Revenue Bonds, 6.50%, 07/01/2041 | 500,000 | 513,570 |
Shares or Principal Amount | Value (US$) | |
Wisconsin (5.0%) | ||
Public Finance Authority Revenue Bonds 5.00%, 06/15/2029 | $ 530,000 | $ 635,422 |
5.00%, 06/15/2034 | 425,000 | 494,411 |
Public Finance Authority Revenue Bonds, 5.00%, 07/01/2038 | 1,000,000 | 1,126,120 |
Wisconsin Health & Educational Facilities Authority Revenue Bonds, (Pre-refunded @ $100, 07/15/2021), Series A, 5.00%, 07/15/2028 | 500,000 | 516,815 |
Wisconsin Health & Educational Facilities Authority Revenue Bonds (Froedtert Health, Inc. Obligated Group), Series 2017 A, 5.00%, 04/01/2035 | 250,000 | 300,342 |
Wisconsin Health & Educational Facilities Authority Revenue Bonds (St. Camillus Health System) 5.00%, 11/01/2020 | 50,000 | 50,000 |
5.00%, 11/01/2021 | 120,000 | 122,003 |
3,245,113 | ||
Total Municipal Bonds | 64,360,536 | |
SHORT-TERM INVESTMENT (0.0%) | ||
UNITED STATES (0.0%) | ||
BlackRock Liquidity Funds MuniCash Portfolio, Institutional Shares | 10,371 | 10,372 |
Total Short-Term Investment | 10,372 | |
Total Investments (Cost $61,319,323) (c)—99.1% | 64,370,908 | |
Other Assets in Excess of Liabilities—0.9% | 603,324 | |
Net Assets—100.0% | $64,974,232 |
(a) | Variable Rate Instrument. The rate shown is based on the latest available information as of October 31, 2020. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
(b) | Denotes a security issued under Regulation S or Rule 144A. |
(c) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
See accompanying Notes to Financial Statements.
34 | 2020 Annual Report |
Aberdeen Short Duration High Yield Municipal Fund (Unaudited)
Aberdeen Short Duration High Yield Municipal Fund (Institutional Class shares net of fees) returned 0.51% for the 12-month period ended October 31, 2020, versus the 3.26% return of its benchmark, the S&P Municipal Bond Short Intermediate Index, and the 1.88% return of its blended secondary benchmark, comprising 30% Bloomberg Barclays 1-10 Year Municipal Index/70% Bloomberg Barclays 1-10 Year Municipal High Yield Index.
The overall U.S. municipal bond market generated a positive return during the reporting period, with the Bloomberg Barclays Municipal Bond Index,1 a broad municipal bond market benchmark, gaining 3.59%, while the taxable bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index,2 returned 6.19%.
Both the municipal and taxable bond markets were aided by falling interest rates, which declined over the reporting period amid several flights to quality given the continued fallout from the coronavirus (COVID-19) pandemic. In addition, the U.S. Federal Reserve (Fed) introduced several unprecedented actions to support the economy and the proper function of the financial markets. While the overall municipal market generated positive absolute returns during eight of the 12 months within the reporting period, a portion of those gains were given back in March and April 2020. Over this time, investor risk aversion increased and there were concerns about market liquidity and the finances for several municipalities.
During the reporting period, the Fund's average weighted maturity and effective duration3 were shorter than that of its blended secondary benchmark, which comprises 30% Bloomberg Barclays 1-10 Year Municipal Index/70% Bloomberg Barclay 1-10 Year Municipal High Yield Index. This hindered the Fund's relative performance over the period. Although the Fund was slightly overweight investment-grade securities, we were significantly underweight high-quality (AAA/AA)4 securities relative to the secondary benchmark. This contributed to under performance, as AAA/AA names rallied over the period.
Other contributors to Fund performance for the reporting period included exposures to tobacco, appropriation,5 and charter schools. This was partially offset by positions in nursing homes, hospitals and state general obligation securities. From a security-selection perspective, the position in B-rated municipal bonds and certain appropriation and farebox bonds6 were the largest contributors to
performance, which somewhat mitigated the overall under performance to the benchmark. From a duration perspective, the overweight positioning in the 0-1-year and 10+-year segments of the yield curve had a positive impact on the Fund's relative performance.
During the reporting period, the Fund maintained a roughly 50%/50% allocation mix in high-yield and investment-grade7 bonds. We believe that this positioning in the reporting period served investors well during the market dislocation as a result of the COVID-19 pandemic, as investment-grade bonds outperformed their high-yield counterparts during this time.
In our view, municipal fundamentals remain stressed as a result of the COVID-19 pandemic and the subsequent economic shutdown. Despite most parts of the country having reopened to a degree, a recent resurgence in cases of COVID-19 will likely force a second shutdown in select areas in which there are material upticks in cases, in our view. We believe that these continued fits and starts to the economy will likely be a drag on municipal fundamentals, especially in select sectors. The fiscal and monetary policy responses remain fluid, but our expectation is that Congressional support for municipalities will likely come during the first quarter of 2021 after President-elect Joe Biden takes office. If the Democratic Party candidates win the two U.S. Senate run-off elections in Georgia fall in early January 2021, the party would narrowly control the Senate as well as the U.S. House of Representatives, which could result in significant stimulus to bolster municipal market fundamentals, in our view. Fund flows and coupon payments may have bolstered municipal performance to start the second half of the 2020 fiscal year, but new issuance has picked up as well.
Against this backdrop, we expect to maintain the Fund's overweight allocation to investment-grade securities relative to the blended benchmark. While we anticipate maintaining this stance, as we do not see sufficient value in moving down in credit quality at the moment, we recognize that if control of the Senate were to change, we may have to shift our cautious stance a bit. Additionally, we do not expect to extend the Fund's duration significantly over the medium term. However, given the market's short-term dynamics, the Fund's duration may increase somewhat, reflecting the impact of the additions of positions in credits that we believe provide opportunistic investments.
1 | The Bloomberg Barclays Municipal Bond Index tracks the performance of investment-grade, tax-exempt bonds with a maturity of at least one year. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
2 | The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the performance of the investment -grade, U.S. dollar-denominated, fixed-rate taxable bond market. |
3 | Duration is an estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (i.e., higher risk) in relation to interest-rate movements. |
4 | S&P Global Ratings' credit ratings express the agency's opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. Typically, ratings are expressed as letter grades that range, for example, from AAA to D to communicate the agency's opinion of relative level of credit risk. Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. |
5 | Appropriation bonds are backed by appropriations of a state or local government and are often structured as leases under state law. They are not legal debts of the government. |
6 | Farebox revenue bonds involve the issuance of debt by a transit agency, secured by pledging revenues collected from transit system operation. |
7 | Issuers whose bonds are rated as "investment-grade" usually have a lower chance of defaulting on their debt than those rated as "non-investment grade." Bonds rated BBB or above by major credit rating agencies are considered investment-grade. |
2020 Annual Report | 35 |
Aberdeen Short Duration High Yield Municipal Fund (Unaudited) (concluded)
Portfolio Management:
U.S. Municipal Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares have up to a 2.50% front-end sales charge and a 0.25% 12b-1 fee. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Fixed income securities are subject to certain risks including, but not limited to: interest rate (changes in interest rates may cause a decline
in the market value of an investment), credit (changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral), prepayment (debt issuers may repay or refinance their loans or obligations earlier than anticipated), and extension (principal repayments may not occur as quickly as anticipated, causing the expected maturity of a security to increase).
Municipal bonds can be significantly affected by political and economic changes, including inflation, as well as uncertainties in the municipal market related to taxation, legislative changes, or the rights of municipal security holders. Municipal bonds have varying levels of sensitivity to changes in interest rates. Interest rate risk is generally lower for shorter-term Municipal bonds and higher for long term Municipal bonds.
Please read the prospectus for more detailed information regarding these and other risks.
36 | 2020 Annual Report |
Aberdeen Short Duration High Yield Municipal Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5Yr. | Inception2 | |
Class A | w/o SC | 0.25% | 2.36% | 2.99% |
w/SC3 | (2.23%) | 1.85% | 2.64% | |
Institutional Class4 | w/o SC | 0.51% | 2.62% | 3.24% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | The Fund changed its investment strategy effective February 28, 2019. Performance information for periods prior to February 28, 2019 does not reflect the Fund's current investment strategy. Returns prior to May 7, 2018 reflect the performance of a predecessor fund (the "Predecessor Fund"). Returns of the Predecessor Fund have not been adjusted to reflect the expenses applicable to the respective classes. The Fund and the Predecessor Fund had substantially similar investment objectives and strategies prior to the Fund's adoption of its current investment strategies on February 28, 2019. Please consult the Fund's prospectus for more detail. |
2 | Predecessor Fund commenced operations on May 31, 2013. |
3 | A 2.50% front-end sales charge was deducted. Prior to February 28, 2019 the front-end sales charge was 4.25%. |
4 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* Minimum Initial Investment
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Short Duration High Yield Municipal Fund, The S&P Municipal Bond Short Intermediate Index, a blended benchmark of 30% Bloomberg Barclays 1-10 Year Municipal Bond Index/70% Bloomberg Barclays 1-10 Year Municipal High Yield Index (the "Blended Index") and the Consumer Price Index (CPI) since inception. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
The S&P Municipal Bond Short Intermediate Index consists of bonds in the S&P Municipal Bond Index with a minimum maturity of one year and a maximum maturity of up to, but not including, eight years as measured from the Rebalancing Date.
Bloomberg Barclays 1-10 Year Municipal Bond Index is an unmanaged index composed of investment-grade municipal bonds with maturity dates of more than one year and less than 10 years.
Bloomberg Barclays 1-10 Year Municipal High Yield Index is a sub-index of the Bloomberg Barclays Municipal High Yield Bond Index composed of issues with effective maturity dates of 1-10 years and excludes purpose class of Other. The Bloomberg Barclays Municipal High Yield Bond Index is a flagship measure of the non-investment grade and non-rated USD-denominated tax exempt bond market.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
2020 Annual Report | 37 |
Aberdeen Short Duration High Yield Municipal Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | |
Municipal Bonds | 98.5% |
Other Assets in Excess of Liabilities | 1.5% |
100.0% | |
Top Holdings | |
Maryland Industrial Development Financing Authority Revenue Bonds (Occidental Petroleum Corp.) 03/01/2030 | 4.3% |
St. Lucie County Pollution Control Revenue Bonds (Florida Power & Light Co.) 09/01/2028 | 3.6% |
State of Illinois General Obligation Unlimited Bonds, Series D 11/01/2026 | 2.3% |
Madison Country Capital Resource Corp. Revenue Bonds (Cazenovia College Project), Series A 09/01/2022 | 2.2% |
Louisville Regional Airport Authority Revenue Bonds (United Parcel Service, Inc.) 01/01/2029 | 2.1% |
Buckeye Tobacco Settlement Financing Authority Tobacco Settlement Assets-Backed Revenue Bonds 06/01/2055 | 2.1% |
Arizona Industrial Development Authority Revenue Bonds (Legacy Cares, Inc.), Series A 07/01/2030 | 1.7% |
Mississippi Business Finance Corp. Revenue Bonds (PSL-North America), Series A 11/01/2032 | 1.7% |
Dekalb Country Housing Authority Revenue Bonds (Highlands At East Atlanta Apartments Project) 09/01/2036 | 1.7% |
Appling County Georgia Development Authority Pollution Control Revenue Bonds (Georgia Power Company Plant Hatch Project), VRDN 09/01/2041 | 1.6% |
Other | 76.7% |
100.0% |
Top States | |
New York | 12.8% |
Florida | 9.3% |
Maryland | 6.2% |
Wisconsin | 6.2% |
Illinois | 6.0% |
Georgia | 5.5% |
Puerto Rico | 4.6% |
Texas | 4.3% |
Ohio | 4.0% |
Kentucky | 3.9% |
Other | 37.2% |
100.0% |
38 | 2020 Annual Report |
Statement of Investments
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (98.5%) | |||||
Alabama (2.4%) | |||||
Alabama Industrial Development Solid Waste Disposal Revenue Bonds (OfficeMax, Inc.), 6.45%, 12/01/2023 | $ 750,000 | $ 749,955 | |||
Health Care Authority for Baptist Health Revenue Bonds, Series D, 5.00%, 11/15/2021 | 850,000 | 852,584 | |||
Industrial Development Board of the City of Mobile Alabama Revenue Bonds (Alabama Power Co.), 0.13%, 06/01/2034 (a) | 1,200,000 | 1,200,000 | |||
Industrial Development Board Of The Town Of West Jefferson Solid Waste Disposal Revenue Bonds (Alabama Power Company Miller Plant Project), 0.16%, 12/01/2038 (a) | 2,800,000 | 2,800,000 | |||
Jemison Public Building Authority Revenue Bonds, Series B, 3.00%, 03/01/2021 | 70,000 | 70,498 | |||
Jemison Water & Sewer Revenue Bonds, Series A 3.00%, 03/01/2021 | 50,000 | 50,146 | |||
3.50%, 03/01/2026 | 290,000 | 302,128 | |||
Wilsonville Industrial Development Board Revenue Bonds (Alabama Power Co.), 0.16%, 12/01/2030 (a) | 900,000 | 900,000 | |||
6,925,311 | |||||
Arizona (3.8%) | |||||
Arizona Industrial Development Authority Revenue Bonds (Great Lakes Senior Living Communities LLC Project Third Tier), Series C | |||||
5.13%, 01/01/2034 (b) | 775,000 | 673,568 | |||
5.13%, 01/01/2035 (b) | 815,000 | 700,020 | |||
5.13%, 01/01/2036 (b) | 860,000 | 730,011 | |||
5.13%, 01/01/2037 (b) | 905,000 | 760,779 | |||
Arizona Industrial Development Authority Revenue Bonds (Kaizen Education Foundation) | |||||
5.00%, 07/01/2022 (b) | 385,000 | 399,977 | |||
5.00%, 07/01/2023 (b) | 405,000 | 429,179 | |||
Arizona Industrial Development Authority Revenue Bonds (Legacy Cares, Inc.), | |||||
Series A, 6.75%, 07/01/2030 (b) | 5,000,000 | 5,005,200 | |||
La Paz County Industrial Development Authority Revenue Bonds (Charter School Solutions), Series A | |||||
5.00%, 02/15/2021 (b) | 240,000 | 242,546 | |||
5.00%, 02/15/2026 (b) | 500,000 | 547,310 | |||
Maricopa County Industrial Development Authority Revenue Bonds (Paragon Management, Inc.) 2.88%, 07/01/2021 (b) | 135,000 | 135,327 | |||
4.00%, 07/01/2026 (b) | 1,250,000 | 1,323,287 | |||
Phoenix Industrial Development Authority Education Facility Revenue Bonds (Freedom Academy, Inc.), 3.88%, 07/01/2021 (b) | 55,000 | 55,390 | |||
11,002,594 |
Shares or Principal Amount | Value (US$) | ||||
Arkansas (1.3%) | |||||
Arkansas Public Housing Authority Municipal Series 1 LLC Revenue Bonds, 3.75%, 09/01/2026 (a)(b)(c) | $ 1,105,000 | $ 1,093,055 | |||
County of Baxter Hospital Revenue Bonds (Baxter Regional Medical Center), Series A | |||||
5.00%, 09/01/2025 | 1,000,000 | 1,124,830 | |||
5.00%, 09/01/2026 | 1,490,000 | 1,695,292 | |||
3,913,177 | |||||
California (1.4%) | |||||
California Municipal Finance Authority Revenue Bonds (Highlands Community Charter and Technical Schools), 4.00%, 11/15/2021 (b) | 1,650,000 | 1,660,345 | |||
California Municipal Finance Authority Revenue Notes (Empire Springs Charter School, Inc.), 4.00%, 09/15/2021 (b) | 1,050,000 | 1,057,109 | |||
California Pollution Control Financing Authority Solid Waste Disposal Revenue Bonds (CalPlant I LLC), 7.50%, 07/01/2032 (b)(c)(d) | 500,000 | 350,000 | |||
Tobacco Securitization Authority of Northern California Revenue Bonds, Series A-2, 5.40%, 06/01/2027 | 985,000 | 988,920 | |||
4,056,374 | |||||
Colorado (0.5%) | |||||
Colorado Health Facilities Authority Revenue Bonds, Series B | |||||
5.00%, 05/15/2028 | 400,000 | 445,040 | |||
5.00%, 05/15/2028 | 100,000 | 104,693 | |||
Colorado Health Facilities Authority Revenue Bonds (Frasier Meadows Manor, Inc.) | |||||
5.00%, 05/15/2025 | 320,000 | 356,032 | |||
Series B, 5.00%, 05/15/2029 | 585,000 | 650,871 | |||
1,556,636 | |||||
Connecticut (2.1%) | |||||
City of West Haven General Obligation Unlimited Bonds | |||||
Series A, 5.00%, 11/01/2025 | 325,000 | 372,694 | |||
Series B, 5.00%, 11/01/2025 | 240,000 | 275,220 | |||
Series A, 5.00%, 11/01/2026 | 325,000 | 378,495 | |||
Series B, 5.00%, 11/01/2026 | 200,000 | 232,920 | |||
Series A, 5.00%, 11/01/2027 | 635,000 | 749,694 | |||
Series B, 5.00%, 11/01/2027 | 200,000 | 236,124 | |||
State Health & Educational Facilities Authority Revenue Bond (McLean Affiliates Obligated Group) | |||||
Series B-2, 2.75%, 01/01/2026 (b) | 650,000 | 652,405 | |||
Series B-1, 3.25%, 01/01/2027 (b) | 750,000 | 753,870 | |||
Series A, 5.00%, 01/01/2030 (b) | 500,000 | 548,400 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 39 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (continued) | |||||
Connecticut (continued) | |||||
State Health & Educational Facilities Authority Revenue Bond (University of Hartford) | |||||
5.00%, 07/01/2025 | $ 400,000 | $ 439,360 | |||
5.00%, 07/01/2026 | 575,000 | 636,030 | |||
5.00%, 07/01/2027 | 430,000 | 479,308 | |||
5.00%, 07/01/2029 | 300,000 | 338,076 | |||
6,092,596 | |||||
Delaware (0.3%) | |||||
Delaware State Economic Development Authority Revenue Bonds (Delmarva Power & Light Co.), 0.22%, 10/01/2029 (a) | 900,000 | 900,000 | |||
Florida (9.3%) | |||||
Broward County Industrial Development Revenue Bonds (Florida Power & Light Co.), 0.17%, 06/01/2045 (a) | 2,180,000 | 2,180,000 | |||
Capital Trust Agency, Inc. Revenue Bonds (Silver Creek St. Augustine LLLP), Series A, 6.50%, 01/01/2024 (c)(d) | 250,000 | 135,000 | |||
Capital Trust Agency, Inc. Revenue Bonds (Wonderful Foundations Charter School Holdings LLC), 4.50%, 01/01/2035 (b) | 300,000 | 295,965 | |||
Celebration Pointe Community Development District No.1 Special Assessment Revenue Bonds, 4.75%, 05/01/2024 | 50,000 | 52,594 | |||
City of Atlantic Beach Health Care Facilities Revenue Bonds (Naval Continuing Care Retirement Foundation, Inc.), Series A, 5.00%, 11/15/2021 | 200,000 | 205,792 | |||
County of Jackson Revenue Bonds (Gulf Power Co.), 0.16%, 07/01/2022 (a) | 900,000 | 900,000 | |||
County Of Lake Florida Retirement Facility Revenue Bonds (Waterman Communities, Inc.) | |||||
Series B-3, 3.38%, 08/15/2026 | 1,000,000 | 1,000,900 | |||
Series B-2, 3.75%, 08/15/2027 | 1,500,000 | 1,501,245 | |||
Florida Development Finance Corp. Educational Facilities Revenue Bonds (Imagine School At Broward Project) | |||||
Series A, 4.00%, 12/15/2029 (b) | 530,000 | 582,650 | |||
Series A, 5.00%, 12/15/2034 (b) | 530,000 | 613,629 | |||
Florida Development Finance Corp. Educational Facilities Revenue Bonds (Miami Arts Charter School Project), Series A, 5.00%, 06/15/2024 (b) | 100,000 | 97,102 | |||
Florida Development Finance Corp. Solid Waste Revenue Bonds (Waste Pro USA, Inc.) | |||||
5.00%, 05/01/2029 (b) | 2,000,000 | 2,133,360 | |||
5.00%, 08/01/2029 (a)(b) | 2,000,000 | 2,044,780 | |||
Lee County Industrial Development Authority Revenue Bonds (Florida Light & Power Co.), Series A, 0.17%, 12/01/2046 (a) | 400,000 | 400,000 |
Shares or Principal Amount | Value (US$) | ||||
Martin County Industrial Development Authority Revenue Bonds (Indiantown Cogeneration LP), 4.20%, 12/15/2025 (b) | $ 2,000,000 | $ 2,001,040 | |||
Palm Beach County Revenue Bonds (Provident Group – PBAU Properties LLC – Palm Beach Atlantic University Housing Project), Series A, 5.00%, 04/01/2029 (b) | 1,440,000 | 1,497,614 | |||
Polk County Industrial Development Authority Revenue Bonds (Carpenter's Home Estates, Inc. Project) Series A, 5.00%, 01/01/2029 | 440,000 | 482,174 | |||
5.00%, 01/01/2039 | 240,000 | 254,496 | |||
St. Lucie County Pollution Control Revenue Bonds (Florida Power & Light Co.), 0.14%, 09/01/2028 (a) | 10,700,000 | 10,700,000 | |||
Village Community Development District #12, Special Assessment Revenue Bonds, 2.88%, 05/01/2021 | 170,000 | 170,870 | |||
27,249,211 | |||||
Georgia (5.5%) | |||||
Appling County Georgia Development Authority Pollution Control Revenue Bonds, VRDN, 0.18%, 09/01/2029 (a) | 1,200,000 | 1,200,000 | |||
Appling County Georgia Development Authority Pollution Control Revenue Bonds (Georgia Power Company Plant Hatch Project), VRDN, 0.18%, 09/01/2041 (a) | 4,600,000 | 4,600,000 | |||
Dekalb Country Housing Authority Revenue Bonds (Highlands At East Atlanta Apartments Project), 1.88%, 09/01/2036 (a)(b) | 5,000,000 | 4,962,050 | |||
Development Authority of Monroe County Revenue Bonds (Gulf Power Co. Project), AMT, VRDN, 0.17%, 10/01/2049 (a) | 300,000 | 300,000 | |||
Floyd County Development Authority Revenue Bonds (Georgia Power Co.), 0.18%, 09/01/2026 (a) | 600,000 | 600,000 | |||
Main Street Natural Gas, Inc. Revenue Bonds, Series A | |||||
5.00%, 05/15/2030 | 200,000 | 246,756 | |||
5.00%, 05/15/2036 | 1,970,000 | 2,613,717 | |||
The Atlanta Development Authority Senior Health Care Revenue Bonds (Georgia Proton Treatment Center Project), Series A-1, 6.75%, 01/01/2035 | 2,300,000 | 1,493,505 | |||
16,016,028 | |||||
Guam (0.0%) | |||||
Guam International Airport Authority Revenue Bonds (Antonio B. Won Pat International Airport Authority), Series C, 5.00%, 10/01/2021 | 80,000 | 83,141 | |||
Idaho (0.4%) | |||||
Idaho Housing & Finance Association Revenue Bonds (Idaho Arts Charter School, Inc.), Series A, 4.00%, 12/01/2026 | 900,000 | 940,986 |
See accompanying Notes to Financial Statements.
40 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (continued) | |||||
Idaho (continued) | |||||
Idaho Housing & Finance Association Revenue Bonds (Victory Charter School), Series A, 4.00%, 07/01/2026 | $ 130,000 | $ 138,286 | |||
1,079,272 | |||||
Illinois (6.0%) | |||||
Chicago Board of Education General Obligation Unlimited Bonds | |||||
Series C, 5.00%, 12/01/2022 | 600,000 | 633,318 | |||
Series A, 5.00%, 12/01/2028 | 200,000 | 249,248 | |||
Cook County School District No. 144 Prairie Hills General Obligation Unlimited Bonds, Series A, 4.00%, 12/01/2033 | 600,000 | 650,118 | |||
Governors State University Certificates of Participation (Capital Improvement Project), 5.00%, 07/01/2026 | 400,000 | 478,836 | |||
Illinois Finance Authority Educational Facility Revenue Bonds (Rogers Park Montessori School), 5.00%, 02/01/2024 | 205,000 | 210,353 | |||
Illinois Finance Authority Revenue Bonds (Benedictine University), 5.00%, 10/01/2025 | 1,035,000 | 1,109,748 | |||
Illinois Finance Authority Revenue Bonds (CHF-Chicago LLC), Series A | |||||
5.00%, 02/15/2027 | 420,000 | 426,300 | |||
5.00%, 02/15/2028 | 400,000 | 404,096 | |||
5.00%, 02/15/2029 | 520,000 | 522,335 | |||
5.00%, 02/15/2030 | 335,000 | 334,481 | |||
5.00%, 02/15/2031 | 370,000 | 367,332 | |||
5.00%, 02/15/2032 | 225,000 | 221,744 | |||
Illinois Finance Authority Revenue Bonds (Chicago Charter School Foundation) | |||||
5.00%, 12/01/2028 | 250,000 | 281,980 | |||
5.00%, 12/01/2029 | 315,000 | 352,989 | |||
Illinois Finance Authority Revenue Bonds (Intrinsic Schools Belmont Campus Project), Series A, 4.50%, 12/01/2020 (b) | 45,000 | 45,045 | |||
Metropolitan Pier & Exposition Authority Revenue Bonds | |||||
5.00%, 12/15/2025 | 295,000 | 331,371 | |||
5.00%, 12/15/2027 | 100,000 | 115,052 | |||
State of Illinois General Obligation Unlimited Bonds | |||||
5.00%, 08/01/2021 | 50,000 | 51,304 | |||
5.00%, 08/01/2024 | 2,000,000 | 2,089,480 | |||
Series D, 5.00%, 11/01/2026 | 6,280,000 | 6,783,154 | |||
4.00%, 02/01/2030 | 745,000 | 811,916 | |||
Village of Matteson Revenue Bonds | |||||
5.00%, 12/01/2026 | 150,000 | 180,523 | |||
5.00%, 12/01/2027 | 150,000 | 183,999 | |||
5.00%, 12/01/2028 | 350,000 | 431,189 | |||
Village of Willow Springs General Obligation Unlimited Bonds, Series C, 4.45%, 12/15/2021 | 285,000 | 285,829 | |||
17,551,740 |
Shares or Principal Amount | Value (US$) | ||||
Indiana (1.3%) | |||||
City of Valparaiso Exempt Facilities Revenue Bonds (Pratt Paper LLC), 5.88%, 01/01/2024 | $ 120,000 | $ 128,006 | |||
Hammond Local Public Improvement Bond Bank Revenue Bonds, Series B, 4.63%, 07/15/2023 (b) | 1,285,000 | 1,356,073 | |||
Indiana Finance Authority Revenue Bonds (Earlham College, Inc.), 5.00%, 10/01/2032 | 2,250,000 | 2,286,158 | |||
3,770,237 | |||||
Kansas (0.7%) | |||||
Kansas Hospital Loan City Of Holton Revenue Bonds (Rural Health Resources Of Jackson Co., Inc. Project), 2.50%, 07/01/2021 | 2,000,000 | 2,003,800 | |||
Kentucky (3.9%) | |||||
Louisville Regional Airport Authority Revenue Bonds (BT-OH LLC), Series A, AMT, VRDN, 0.18%, 11/01/2036 (a) | 2,500,000 | 2,500,000 | |||
Louisville Regional Airport Authority Revenue Bonds (United Parcel Service, Inc.) | |||||
Series B, 0.13%, 01/01/2029 (a) | 2,700,000 | 2,700,000 | |||
0.14%, 01/01/2029 (a) | 6,200,000 | 6,200,000 | |||
11,400,000 | |||||
Louisiana (1.8%) | |||||
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds (Provident Group – ULM Properties LLC – University Of Louisiana At Manroe Project), Series A, 5.00%, 07/01/2029 (b) | 1,000,000 | 1,062,370 | |||
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds (St. James Place of Baton Rouge), Series A, 5.50%, 11/15/2025 | 250,000 | 259,130 | |||
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds (The Glen System Retirement Project), Series A | |||||
5.00%, 01/01/2024 | 180,000 | 182,138 | |||
5.00%, 01/01/2025 | 370,000 | 374,684 | |||
5.00%, 01/01/2026 | 390,000 | 393,682 | |||
5.00%, 01/01/2027 | 410,000 | 411,915 | |||
5.00%, 01/01/2028 | 430,000 | 430,486 | |||
5.00%, 01/01/2029 | 450,000 | 447,885 | |||
Louisiana Local Government Environmental Facilities & Community Development Authority Student Housing Revenue Bonds (Provident Group – ULM Properties LLC – University Of Louisiana At Manroe Project), Series A, 5.00%, 07/01/2039 (b) | 1,000,000 | 980,910 | |||
Louisiana Public Facilities Authority Revenue Bonds (Young Audiences Charter School Project), Series A, 5.00%, 04/01/2030 (b) | 400,000 | 417,352 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 41 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (continued) | |||||
Louisiana (continued) | |||||
Parish of St. Charles Gulf Opportunity Zone Revenue Bonds (Valero Project), 4.00%, 12/01/2040 (a) | $ 315,000 | $ 327,127 | |||
5,287,679 | |||||
Maryland (6.2%) | |||||
Anne Arundel County Consolidated Special Taxing District Bonds (Villages at Two Rivers Project), 4.20%, 07/01/2024 | 85,000 | 85,859 | |||
Frederick County Educational Facilities Revenue Bonds (Mount St. Marys University), Series A | |||||
5.00%, 09/01/2027 (b) | 1,495,000 | 1,604,105 | |||
5.00%, 09/01/2032 (b) | 740,000 | 792,007 | |||
Maryland Economic Development Corp. Revenue Bonds (CONSOL Marine Terminal, Inc.), 5.75%, 09/01/2025 | 1,445,000 | 1,448,627 | |||
Maryland Health & Higher Educational Facilities Authority Revenue Bonds (Adventist Healthcare Obligated Group), 5.00%, 01/01/2021 | 450,000 | 452,371 | |||
Maryland Industrial Development Financing Authority Revenue Bonds (Occidental Petroleum Corp.), 3.60%, 03/01/2030 (a) | 12,510,000 | 12,510,000 | |||
The Mayor and Council of Rockville Economic Development Revenue Bonds (King Farm Presbyterian Retirement Community, Inc.) | |||||
Series A-2, 5.00%, 11/01/2025 | 705,000 | 741,519 | |||
5.00%, 11/01/2027 | 600,000 | 634,044 | |||
18,268,532 | |||||
Massachusetts (1.8%) | |||||
Lynn Housing Authority & Neighborhood Development Revenue Bonds, 4.00%, 10/01/2022 | 430,000 | 441,223 | |||
Massachusetts Development Finance Agency Revenue Bonds (Linden Ponds, Inc.), 4.00%, 11/15/2023 (b) | 820,000 | 834,735 | |||
Massachusetts Development Finance Agency Revenue Bonds (NewBridge on The Charles, Inc.) | |||||
4.00%, 10/01/2025 (b) | 500,000 | 526,170 | |||
4.00%, 10/01/2026 (b) | 500,000 | 528,275 | |||
4.00%, 10/01/2027 (b) | 450,000 | 477,023 | |||
Massachusetts Development Finance Agency Revenue Bonds (Provident Commonwealth Education Resource, Inc.), 5.00%, 10/01/2024 | 1,500,000 | 1,504,155 | |||
Massachusetts Development Finance Agency Revenue Bonds (Wellforce Issue), Series A | |||||
5.00%, 07/01/2033 | 500,000 | 597,175 | |||
5.00%, 07/01/2034 | 300,000 | 356,754 | |||
5,265,510 | |||||
Michigan (0.8%) | |||||
Calhoun County Hospital Finance Authority Revenue Bonds (Ella E.M. Brown Charitable Circle), 5.00%, 02/15/2024 | 500,000 | 554,125 |
Shares or Principal Amount | Value (US$) | ||||
Charyl Stockwell Academy Revenue Bonds, 4.88%, 10/01/2023 | $ 55,000 | $ 55,870 | |||
Kalamazoo Economic Development Corp. Revenue Bonds (Heritage Community of Kalamazoo Obligated Group), 2.63%, 05/15/2025 | 1,130,000 | 1,128,316 | |||
Michigan Finance Authority Public School Academy Limited Revenue Bond (Cesar Chavez Academy Project), 4.00%, 02/01/2029 | 700,000 | 716,772 | |||
2,455,083 | |||||
Minnesota (1.4%) | |||||
Rice County Educational Facility Revenue Bonds (Shattuck-St Mary's School), Series A, 5.00%, 08/01/2022 (b) | 960,000 | 979,738 | |||
Shakopee Minnesota Senior Housing Revenue Bonds (Benedictine Living Community of Shakopee LLC Project), 5.85%, 11/01/2058 (a)(b) | 3,000,000 | 3,052,020 | |||
4,031,758 | |||||
Mississippi (3.2%) | |||||
Mississippi Business Finance Corp. Revenue Bonds (Huntington Ingalls Industries, Inc.), 4.55%, 12/01/2028 | 980,000 | 949,688 | |||
Mississippi Business Finance Corp. Revenue Bonds (PSL-North America), Series A, 3.66%, 11/01/2032 (a) | 5,000,000 | 5,000,000 | |||
Mississippi Development Bank Revenue Bonds (Hancock County Gomesa Project), 4.55%, 11/01/2039 (b) | 2,000,000 | 2,067,700 | |||
Mississippi Pearl General Obligation Unlimited Bonds | |||||
3.00%, 07/15/2022 | 630,000 | 627,606 | |||
3.13%, 07/15/2023 | 655,000 | 652,328 | |||
9,297,322 | |||||
Missouri (0.7%) | |||||
Platte County Industrial Development Authority Transportation Revenue Bonds | |||||
5.00%, 12/01/2020 | 850,000 | 408,000 | |||
5.00%, 12/01/2025 | 675,000 | 324,000 | |||
Saint Louis County Missouri Industrial Development Authority Revenue Bonds (Ranken-Jordan Pediatric Specialty Hospital) | |||||
4.00%, 11/15/2021 | 555,000 | 559,756 | |||
5.00%, 11/15/2022 | 625,000 | 646,594 | |||
1,938,350 | |||||
Nebraska (0.2%) | |||||
Scotts Bluff County Hospital Authority Revenue Bonds (Regional West Medical Center), Series A, 5.00%, 02/01/2022 | 615,000 | 638,942 |
See accompanying Notes to Financial Statements.
42 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (continued) | |||||
Nevada (0.6%) | |||||
City of Carson Hospital Revenue Bonds (Carson Tahoe Regional Healthcare) | |||||
5.00%, 09/01/2027 | $ 605,000 | $ 732,268 | |||
5.00%, 09/01/2029 | 620,000 | 738,891 | |||
Nevada Department of Business & Industry Revenue Bonds (Doral Academy of Nevada), Series A, 3.13%, 07/15/2022 (b)(e) | 320,000 | 322,474 | |||
1,793,633 | |||||
New Jersey (1.4%) | |||||
New Jersey Economic Development Authority Revenue Bonds | |||||
5.00%, 06/15/2021 | 2,000,000 | 2,051,680 | |||
Series EE, 5.00%, 09/01/2023 | 700,000 | 709,716 | |||
New Jersey Economic Development Authority Revenue Bonds (Greater Brunswick Charter School Project), Series A, 4.75%, 08/01/2024 (b) | 90,000 | 93,336 | |||
New Jersey Economic Development Authority Revenue Bonds (NYNJ Link Borrower LLC), 5.25%, 01/01/2025 | 125,000 | 139,736 | |||
New Jersey Economic Development Authority Revenue Bonds (United Airlines, Inc.), 5.50%, 04/01/2028 | 55,000 | 54,998 | |||
South Jersey Port Corp. Revenue Bonds, Series B | |||||
5.00%, 01/01/2026 | 300,000 | 337,974 | |||
5.00%, 01/01/2027 | 250,000 | 284,700 | |||
5.00%, 01/01/2028 | 255,000 | 293,112 | |||
3,965,252 | |||||
New York (12.8%) | |||||
Brookhaven Local Development Corp. Revenue Bonds (Active Retirement Community, Inc.) | |||||
5.00%, 11/01/2021 | 300,000 | 310,569 | |||
5.00%, 11/01/2022 | 250,000 | 267,180 | |||
Buffalo & Erie County Industrial Land Development Corp. Revenue Bonds (Charter School for Applied Technologies Project), 4.00%, 06/01/2022 | 895,000 | 909,472 | |||
Build NYC Resource Corp. Revenue Bonds (Metropolitan College of New York), 5.00%, 11/01/2020 | 765,000 | 765,000 | |||
Build NYC Resource Corp. Revenue Bonds (Metropolitan Lighthouse Charter School Project), Series A | |||||
4.00%, 06/01/2022 (b) | 190,000 | 196,052 | |||
5.00%, 06/01/2023 (b) | 370,000 | 397,265 | |||
5.00%, 06/01/2024 (b) | 390,000 | 427,791 | |||
5.00%, 06/01/2025 (b) | 410,000 | 457,642 | |||
5.00%, 06/01/2026 (b) | 430,000 | 483,496 | |||
5.00%, 06/01/2027 (b) | 450,000 | 502,448 | |||
5.00%, 06/01/2032 (b) | 500,000 | 547,350 | |||
City of Elmira General Obligation Limited Bonds | |||||
5.00%, 07/01/2025 (b) | 1,375,000 | 1,510,932 | |||
5.00%, 07/01/2033 (b) | 2,635,000 | 2,881,557 |
Shares or Principal Amount | Value (US$) | ||||
City of Poughkeepsie General Obligation Limited Bonds, 5.00%, 06/01/2031 | $ 455,000 | $ 488,365 | |||
County Of Suffolk New York General Obligation Limited Bonds, Series A, 5.00%, 11/13/2020 | 2,000,000 | 2,002,600 | |||
Madison Country Capital Resource Corp. Revenue Bonds (Cazenovia College Project), Series A, 5.50%, 09/01/2022 | 6,500,000 | 6,449,430 | |||
Metropolitan Transportation Authority Revenue Bonds | |||||
Series A-1, 5.00%, 11/15/2020 | 900,000 | 900,873 | |||
Series B-2, 5.00%, 05/15/2021 | 500,000 | 503,660 | |||
5.00%, 09/01/2022 | 2,000,000 | 2,033,740 | |||
5.00%, 11/15/2022 | 1,050,000 | 1,069,677 | |||
5.00%, 11/15/2035 | 4,000,000 | 4,230,040 | |||
Series A-2, VRN, 5.00%, 11/15/2045 (a) | 1,600,000 | 1,748,320 | |||
Nassau County Tobacco Settlement Corp. Revenue Bonds, Series A-2, 5.25%, 06/01/2026 (e) | 1,150,000 | 1,150,057 | |||
New York State Dormitory Authority Revenue Bonds (Touro College And University System Obligated Group), Series A, 4.00%, 01/01/2023 | 445,000 | 456,677 | |||
New York State Dormitory Authority Revenue Bonds (Yeshiva University) | |||||
5.00%, 09/01/2021 | 1,025,000 | 1,026,671 | |||
5.00%, 09/01/2022 | 1,640,000 | 1,642,575 | |||
5.00%, 09/01/2038 | 730,000 | 730,321 | |||
New York State Environmental Facilities Corp. Revenue Bonds (Casella Waste Systems, Inc.), 2.75%, 09/01/2050 (a) | 1,000,000 | 1,005,570 | |||
Village of Johnson City General Obligation Limited Bonds | |||||
5.00%, 10/01/2021 | 115,000 | 117,635 | |||
5.00%, 10/01/2022 | 115,000 | 120,119 | |||
Village of Valley Stream General Obligation Limited Notes, Series A, 6.50%, 05/20/2021 | 2,250,000 | 2,258,302 | |||
37,591,386 | |||||
North Carolina (0.3%) | |||||
North Carolina Capital Facilities Finance Agency Revenue Bonds (Johnson & Wales University), Series A, 5.00%, 04/01/2028 | 795,000 | 848,321 | |||
Ohio (4.0%) | |||||
Buckeye Tobacco Settlement Financing Authority Tobacco Settlement Assets-Backed Revenue Bonds | |||||
3.00%, 06/01/2048 | 3,000,000 | 2,869,320 | |||
4.00%, 06/01/2048 | 1,000,000 | 1,083,910 | |||
5.00%, 06/01/2055 | 5,640,000 | 6,033,954 | |||
Cleveland-Cuyahoga County Port Authority Revenue Bonds, 5.00%, 12/01/2028 | 250,000 | 259,603 | |||
Ohio Air Quality Development Authority Revenue Bonds (Ohio Valley Electric Corp. Project), Series A, 2.88%, 02/01/2026 | 1,000,000 | 1,010,020 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 43 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (continued) | |||||
Ohio (continued) | |||||
Ohio Air Quality Development Authority Revenue Bonds (AK Steel Corp.), 6.75%, 06/01/2024 | $ 200,000 | $ 194,762 | |||
Ohio Air Quality Development Authority Revenue Bonds (Ohio Valley Electric Corp. Project), Series A, 3.25%, 09/01/2029 | 140,000 | 141,145 | |||
11,592,714 | |||||
Oregon (0.6%) | |||||
Port of Portland Revenue Bonds (Horizon Air Industries, Inc.), 0.19%, 06/15/2027 (a) | 1,700,000 | 1,700,000 | |||
Pennsylvania (3.4%) | |||||
Allentown Neighborhood Improvement Zone Development Authority Tax Revenue Bonds, 5.00%, 05/01/2022 (b) | 660,000 | 681,047 | |||
Coatesville School District General Obligation Unlimited Notes, 5.00%, 11/13/2020 | 2,200,000 | 2,201,122 | |||
Dauphin County General Authority Revenue Bonds (Harrisburg University of Science and Technology Project) | |||||
4.00%, 10/15/2022 (b) | 475,000 | 469,471 | |||
5.00%, 10/15/2027 (b) | 1,650,000 | 1,654,257 | |||
Indiana County Hospital Authority Revenue Bonds (Indiana Regional Medical Center), Series A, 5.00%, 06/01/2023 | 100,000 | 105,581 | |||
Montgomery County Industrial Development Authority Revenue Bonds (Waverly Heights, Ltd. Project) | |||||
4.00%, 12/01/2027 | 180,000 | 197,536 | |||
4.00%, 12/01/2028 | 200,000 | 219,002 | |||
4.00%, 12/01/2029 | 100,000 | 109,148 | |||
4.00%, 12/01/2035 | 300,000 | 321,372 | |||
4.00%, 12/01/2036 | 100,000 | 106,828 | |||
4.00%, 12/01/2038 | 300,000 | 318,936 | |||
Philadelphia Authority for Industrial Development Revenue Bonds (Discovery Charter School Project), 5.00%, 04/01/2022 | 295,000 | 298,233 | |||
Philadelphia School District General Obligation Limited Bonds, Series F, 5.00%, 09/01/2024 | 2,000,000 | 2,316,520 | |||
Pottsville Hospital Facilities Authority Health Center Revenue Bonds (Lehigh Valley Health Network Obligated Group), 5.75%, 07/01/2022 (b) | 100,000 | 105,606 | |||
Scranton School District General Obligation Limited Bonds | |||||
Series B, 5.00%, 06/01/2023 | 100,000 | 110,580 | |||
Series B, 5.00%, 06/01/2024 | 100,000 | 114,561 | |||
Series B, 5.00%, 06/01/2025 | 100,000 | 118,340 | |||
Series D, 5.00%, 06/01/2027 | 345,000 | 405,389 | |||
9,853,529 |
Shares or Principal Amount | Value (US$) | ||||
Puerto Rico (4.6%) | |||||
Commonwealth of Puerto Rico Public Improvement General Obligation Unlimited Bonds | |||||
Series A, 5.50%, 07/01/2021 | $ 615,000 | $ 621,685 | |||
(AGC-ICC), 5.50%, 07/01/2022 | 1,580,000 | 1,677,913 | |||
Series A, 5.00%, 07/01/2027 | 110,000 | 112,231 | |||
Electric Power Authority Revenue Bonds, Series V, 5.25%, 07/01/2026 | 1,290,000 | 1,335,008 | |||
Puerto Rico Electric Power Authority Revenue Bonds | |||||
Series SS, 5.00%, 07/01/2022 | 260,000 | 261,193 | |||
Series PP, 5.00%, 07/01/2023 | 205,000 | 206,257 | |||
Series SS, 5.25%, 07/01/2023 (e) | 2,340,000 | 2,400,512 | |||
Series PP, 5.00%, 07/01/2024 | 835,000 | 841,413 | |||
Series UU, 5.00%, 07/01/2024 | 300,000 | 306,084 | |||
Puerto Rico Highway & Transportation Authority Revenue Bonds | |||||
Series BB, 5.25%, 07/01/2022 | 100,000 | 105,790 | |||
Series L, 5.25%, 07/01/2023 | 520,000 | 533,447 | |||
Series E, 5.50%, 07/01/2023 | 200,000 | 215,054 | |||
Series D, 5.00%, 07/01/2027 | 145,000 | 147,941 | |||
(AGM-CR), 5.50%, 07/01/2030 | 1,000,000 | 1,158,800 | |||
Puerto Rico Public Buildings Authority Revenue Bonds, (NATL COMWLTH GTD), 6.00%, 07/01/2025 | 1,095,000 | 1,153,013 | |||
Puerto Rico Public Buildings Authority Revenue Bonds | |||||
Series F, 5.25%, 07/01/2021 | 1,200,000 | 1,229,892 | |||
6.00%, 07/01/2023 (e) | 1,000,000 | 1,040,720 | |||
13,346,953 | |||||
Rhode Island (0.4%) | |||||
Rhode Island Health & Educational Building Corp. Revenue Bonds (Care New England Health System Obligated Group), Series B | |||||
5.00%, 09/01/2022 | 680,000 | 699,822 | |||
5.00%, 09/01/2023 | 500,000 | 521,455 | |||
1,221,277 | |||||
South Carolina (0.3%) | |||||
South Carolina Jobs-Economic Development Authority Revenue Bonds (RePower South Berkeley LLC), 5.25%, 02/01/2027 (b) | 1,060,000 | 896,760 | |||
Tennessee (0.1%) | |||||
Metropolitan Government Nashville & Davidson Health & Educational Facilities Revenue Bonds (Trevecca Nazarene University Project) | |||||
5.00%, 10/01/2029 | 300,000 | 338,058 | |||
5.00%, 10/01/2034 | 90,000 | 99,847 | |||
437,905 |
See accompanying Notes to Financial Statements.
44 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (continued) | |||||
Texas (4.3%) | |||||
Bexar County Health Facilities Development Corp. Revenue Bonds (Army Retirement Residence Obligation Group) | |||||
5.00%, 07/15/2023 | $ 300,000 | $ 316,956 | |||
5.00%, 07/15/2024 | 150,000 | 161,025 | |||
Board of Managers Joint Guadalupe County-City of Seguin Hospital Revenue Bonds, 5.00%, 12/01/2021 | 500,000 | 518,195 | |||
Decatur Hospital Authority Revenue Bonds (Wise Regional Health System), Series A, 5.00%, 09/01/2023 | 75,000 | 82,034 | |||
Harris County Cultural Education Facilities Finance Corp. Revenue Bonds (Brazos Presbyterian Homes, Inc.), 5.00%, 01/01/2027 | 895,000 | 967,835 | |||
New Hope Cultural Education Facilities Finance Corp. Revenue Bonds (Cardinal Bay, Inc.) | |||||
Series C, 4.00%, 07/01/2021 | 275,000 | 271,747 | |||
Series C, 5.00%, 07/01/2023 | 300,000 | 293,487 | |||
Series D, 6.00%, 07/01/2026 | 110,000 | 104,133 | |||
Port Beaumont Navigation District Revenue Bonds (Jefferson Railport Terminal II LLC), Series A, 3.63%, 01/01/2035 (b) | 1,500,000 | 1,477,860 | |||
SA Energy Acquisition Public Facility Corp. Revenue Bonds | |||||
5.50%, 08/01/2022 | 80,000 | 86,699 | |||
5.50%, 08/01/2023 | 50,000 | 56,405 | |||
Tarrant County Cultural Education Facilities Finance Corp. Revenue Bonds (Buckingham Senior Living Community, Inc.) | |||||
Series A, 4.50%, 11/15/2021 (c)(d) | 695,000 | 451,750 | |||
Series B-1, 5.63%, 11/15/2024 | 2,450,000 | 2,452,058 | |||
Texas Municipal Gas Acquisition & Supply Corp. I Revenue Bonds | |||||
Series C, 1.60%, 12/15/2026 (a)(e) | 1,500,000 | 1,447,320 | |||
Series D, 6.25%, 12/15/2026 | 2,295,000 | 2,686,848 | |||
Texas Municipal Gas Acquisition & Supply Corp. III Revenue Bonds, 5.00%, 12/15/2025 | 1,000,000 | 1,082,970 | |||
Texas Public Finance Authority Revenue Bonds (Texas Southern University), 5.00%, 11/01/2021 | 100,000 | 103,725 | |||
12,561,047 | |||||
U. S. Virgin Islands (0.4%) | |||||
Virgin Islands Public Finance Authority Revenue Bonds, Series A, 5.00%, 10/01/2032 | 1,210,000 | 1,293,139 | |||
Utah (2.7%) | |||||
Utah Charter School Finance Authority Revenue Bonds (Esperanza Elementary School), Series A | |||||
4.50%, 10/15/2028 (b) | 500,000 | 502,730 | |||
4.63%, 10/15/2048 (a)(b) | 1,000,000 | 1,025,770 | |||
Utah Charter School Finance Authority Revenue Bonds (Freedom Academy Foundation), 3.63%, 06/15/2021 (b)(e) | 195,000 | 196,055 |
Shares or Principal Amount | Value (US$) | ||||
Utah Charter School Finance Authority Revenue Bonds (Scholar Academy), Series A, 4.50%, 04/15/2048 (a)(b) | $ 3,000,000 | $ 3,033,810 | |||
Utah Charter School Finance Authority Revenue Bonds (Wasatch Waldorf Charter School, Inc.), Series A, 4.75%, 05/15/2048 (a)(b) | 3,000,000 | 3,000,660 | |||
7,759,025 | |||||
Washington (0.9%) | |||||
State Housing Finance Commission Revenue Bonds (Transforming Age Project), Series A | |||||
5.00%, 01/01/2024 (b) | 180,000 | 190,940 | |||
5.00%, 01/01/2028 (b) | 440,000 | 483,221 | |||
5.00%, 01/01/2029 (b) | 465,000 | 509,956 | |||
5.00%, 01/01/2034 (b) | 745,000 | 790,639 | |||
Washington State Housing Finance Commission Revenue Bonds (Mirabella), 6.00%, 10/01/2022 (b) | 535,000 | 548,937 | |||
Washington State Housing Finance Commission Revenue Bonds (Presbyterian Retirement Communities Northwest Obligated Group) | |||||
5.00%, 01/01/2023 | 30,000 | 31,377 | |||
5.00%, 01/01/2023 (b) | 35,000 | 35,520 | |||
Washington State Housing Finance Commission Revenue Bonds (Wesley Homes Lea Hill LLC), 3.20%, 07/01/2021 (b) | 120,000 | 119,786 | |||
2,710,376 | |||||
West Virginia (0.5%) | |||||
Glenville State College Board of Governors Revenue Bonds, 3.25%, 06/01/2022 | 340,000 | 335,060 | |||
Ohio County Development Authority Revenue Bonds (Ohio County Sport Complex Project), 4.00%, 09/01/2023 | 1,235,000 | 1,228,751 | |||
1,563,811 | |||||
Wisconsin (6.2%) | |||||
Public Finance Authority Revenue Bonds | |||||
Series A, 5.00%, 10/01/2024 (b) | 2,100,000 | 2,229,927 | |||
6.00%, 01/01/2027 | 4,100,000 | 4,240,056 | |||
Series A, 5.00%, 10/01/2029 (b) | 500,000 | 544,585 | |||
Public Finance Authority Revenue Bonds (Masonic & Eastern Star Home of NC, Inc.) | |||||
Series B-2, 3.00%, 03/01/2026 (b) | 790,000 | 789,210 | |||
3.50%, 03/01/2027 (b) | 4,000,000 | 3,995,360 | |||
Public Finance Authority Revenue Bonds (Wonderful Foundations Charter School Holdings LLC), Series A-1, 4.50%, 01/01/2035 (b) | 1,000,000 | 986,550 | |||
Wisconsin Health & Educational Facilities Authority Revenue Bond | |||||
5.00%, 11/01/2022 | 120,000 | 123,790 | |||
5.00%, 11/01/2023 | 360,000 | 376,164 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 45 |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Short Duration High Yield Municipal Fund
Shares or Principal Amount | Value (US$) | ||||
MUNICIPAL BONDS (continued) | |||||
Wisconsin (continued) | |||||
Wisconsin Public Finance Authority Educational Facilities Revenue Bonds (Barton College), Series A | |||||
5.00%, 03/01/2023 | $ 1,250,000 | $ 1,262,675 | |||
5.00%, 03/01/2028 | 1,190,000 | 1,213,086 | |||
Wisconsin Public Finance Authority Educational Facilities Revenue Bonds (Guilford College) | |||||
5.00%, 01/01/2026 | 685,000 | 677,602 | |||
5.00%, 01/01/2027 | 830,000 | 817,425 | |||
Wisconsin Public Finance Authority Educational Facilities Revenue Bonds (Piedmont Community Charter School) | |||||
5.00%, 06/15/2022 | 185,000 | 194,600 | |||
5.00%, 06/15/2024 | 210,000 | 234,681 | |||
5.00%, 06/15/2026 | 230,000 | 267,775 | |||
5.00%, 06/15/2027 | 160,000 | 188,984 | |||
Wisconsin Public Finance Authority Revenue Bonds (Roseman University of Health Sciences), 5.00%, 04/01/2022 | 100,000 | 101,836 | |||
18,244,306 | |||||
Total Municipal Bonds | 288,162,727 | ||||
Total Investments (Cost $290,050,828) (f)—98.5% | 288,162,727 | ||||
Other Assets in Excess of Liabilities—1.5% | 4,406,559 | ||||
Net Assets—100.0% | $292,569,286 |
(a) | Variable Rate Instrument. The rate shown is based on the latest available information as of October 31, 2020. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
(b) | Denotes a security issued under Regulation S or Rule 144A. |
(c) | Illiquid security. |
(d) | Security is in default. |
(e) | All or a portion of the security has been designated as collateral for when issued trading. When-issued trading is trading in securities that have been authorized but not yet been issued. |
(f) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
See accompanying Notes to Financial Statements.
46 | 2020 Annual Report |
Aberdeen Ultra Short Municipal Income Fund (Unaudited)
Aberdeen Ultra Short Municipal Income Fund (Institutional Class shares net of fees) returned 0.94% for the 12-month period ended October 31, 2020, versus the 1.87% return of its benchmark, the Bloomberg Barclays Municipal Bond: 1 Year (1-2) Index, during the same period.
The overall U.S. municipal bond market generated a positive return during the reporting period, with the Bloomberg Barclays Municipal Bond Index,1 a broad municipal bond market benchmark, gaining 3.59%, while the taxable bond market, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index,2 returned 6.19%.
Both the municipal and taxable bond markets were aided by falling interest rates, which declined over the period amid several flights to quality given the continued fallout from the COVID-19 pandemic. In addition, the U.S. Federal Reserve (Fed) introduced several unprecedented actions to support the economy and the proper function of the financial markets. While the overall municipal market generated positive absolute returns during eight of the 12 months of the period, a portion of those gains were given back in March and April 2020. Over this time, investor risk aversion increased and there were concerns about market liquidity and the finances for several municipalities.
Over the reporting period, the Fund's effective average duration3 remained at its historically low level of 37 days, compared to an average maturity of more than one year for its benchmark, the Bloomberg Barclays Municipal Bond: 1 Year (1-2) Index. This enabled the Fund to maintain a relatively stable net asset value (NAV) over the reporting period.
The short end of the municipal bond curve saw yields decline during the reporting period, as the Fed reversed monetary-policy tightening. The Fund experienced relatively low movement in NAV versus fluctuations in the benchmark index. Major contributors to the stability of the Fund's NAV were positions in floating-rate securities and variable rate demand notes (VRDNs), which comprised more than 70% of the Fund's net assets as of the end of the reporting period. VRDNs trade at par value, which does not fluctuate during periods of interest-rate volatility, although their rates reset daily or weekly, which allows the Fund to capture increased yields when interest rates move up. The Fund's performance relative to the benchmark was
mainly hampered by underweight exposures to AAA-rated and AA-rated4 securities, as well as underweight duration in these credits, as their spreads compressed5 more than their lower-rated counterparts. Both portfolio weighting and security selection in BBB and non-rated securities helped to counterbalance underweighting high-grade securities as the Fund's holdings in these securities outperformed those represented in the benchmark.
Contributors to the Fund's absolute performance during the reporting period included positions in hospitals, economic development and housing bonds. Conversely, the Fund's absolute performance was hampered by underweight positioning in appropriation-backed,6 state general obligation bonds, as well as water and sewer.
In our view, municipal fundamentals remain stressed as a result of the COVID-19 pandemic and the subsequent economic shutdown. Despite most parts of the country having reopened to a degree, a recent resurgence in cases of COVID-19 will likely force a second shutdown in select areas in which there are material upticks in cases, in our view. We believe that these continued fits and starts to the economy will likely be a drag on municipal fundamentals, especially in select sectors. The fiscal and monetary policy responses remain fluid, but our expectation is that Congressional support for municipalities will likely come during the first quarter of 2021 after President-elect Joe Biden takes office. If the Democratic Party candidates win the two U.S. Senate run-off elections in Georgia fall in early January 2021, the party would narrowly control the Senate as well as the U.S. House of Representatives, which could result in significant stimulus to bolster municipal market fundamentals, in our view. Fund flows and coupon payments may have bolstered municipal performance to start the second half of the 2020 fiscal year, but new issuance has picked up as well.
Against this backdrop, we expect to maintain the Fund's credit and securities mix in order to mitigate some potential risks that we see on the horizon. However, we do recognize that if control of the Senate were to change, we may add incremental risk within the strategy in certain situations that bolster yield given how bullish that scenario could be for municipal bonds. However, we do not expect to extend the Fund's duration significantly over the medium term, as the yield curve appears flat at the front end of the curve and risks to a steepening remain.
1 | The Bloomberg Barclays Municipal Bond Index tracks the performance of investment-grade, tax-exempt bonds with a maturity of at least one year. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
2 | The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. |
3 | Duration is an estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (i.e., higher risk) in relation to interest-rate movements. |
4 | The credit ratings of S&P Global Ratings, Moody's Investors Services, Inc., and Fitch Ratings express the respective agencies' opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. Typically, ratings are expressed as letter grades that range, for example, from AAA to D (Aaa to C for Moody's) to communicate the agency's opinion of relative level of credit risk. Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. |
5 | When a bond price rises, its yield declines. The spread on bonds is usually expressed as the difference between bonds of the same maturity but different credit quality. Spread compression occurs when the yield on a previously higher-yielding bond comes down due to strong demand. |
6 | Appropriation bonds are backed by appropriations of a state or local government and are often structured as leases under state law. They are not legal debts of the government. |
2020 Annual Report | 47 |
Aberdeen Ultra Short Municipal Income Fund (Unaudited) (concluded)
Portfolio Management:
U.S. Municipal Team
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The performance data quoted represents past performance and current returns may be lower or higher. Class A Shares are not subject to a front-end sales charge and are subject to a 0.25% 12b-1 fee. Class A1 Shares have up to a 0.50% sales charge and have a 0.25% 12b-1 fee. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month-end, which may be higher or lower than the performance shown above, please call 866-667-9231 or go to https://www.aberdeenstandard.com/en-us/us/investor/fund-centre.
Investing in mutual funds involves risk, including the possible loss of principal.
Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Risk Considerations
Fixed income securities are subject to certain risks including, but not limited to: interest rate (changes in interest rates may cause a decline in the market value of an investment), credit (changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral), prepayment (debt issuers may repay or refinance their loans or obligations earlier than anticipated), and extension (principal repayments may not occur as quickly as anticipated, causing the expected maturity of a security to increase).
Municipal bonds can be significantly affected by political and economic changes, including inflation, as well as uncertainties in the municipal market related to taxation, legislative changes, or the rights of municipal security holders. Municipal bonds have varying levels of sensitivity to changes in interest rates. Interest rate risk is generally lower for shorter-term Municipal bonds and higher for long term Municipal bonds.
Please read the prospectus for more detailed information regarding these and other risks.
48 | 2020 Annual Report |
Aberdeen Ultra Short Municipal Income Fund (Unaudited)
Average Annual Total Return1 (For periods ended October 31, 2020) | 1 Yr. | 5 Yr. | 10 Yr. | ||||||||
Class A | w/o SC | 0.69% | 0.81% | 0.72% | |||||||
w/SC2 | 0.69% | 0.81% | 0.72% | ||||||||
Class A13 | w/o SC | 0.79% | 0.83% | 0.73% | |||||||
w/SC2 | 0.30% | 0.73% | 0.68% | ||||||||
Institutional Class4 | w/o SC | 0.94% | 1.06% | 0.96% |
All figures showing the effect of a sales charge (SC) reflect the maximum charge possible because it has the most significant effect on performance data. The total returns shown above do not include the impact of financial statement rounding of the net asset value (NAV) per share and/or financial statement adjustments.
1 | Returns prior to May 7, 2018 reflect the performance of a predecessor fund (the "Predecessor Fund"). Returns of the Predecessor Fund have not been adjusted to reflect the expenses applicable to the respective classes. The Fund and the Predecessor Fund have substantially similar investment objectives and strategies. Please consult the Fund's prospectus for more detail. |
2 | A front-end sales charge was eliminated effective July 1, 2020. Prior to that a 0.50% front-end sales charge was deducted. |
3 | Returns before the first offering of Class A1 (February 28, 2019) are based on the previous performance of Class A. Returns of the class have not been adjusted to reflect the expenses applicable to the respective classes. Excluding the effect of any fee waivers or reimbursements, this performance is substantially similar to what Class A would have produced because all classes invest in the same portfolio of securities. Returns for Class A shares would only differ to the extent of the difference in expenses of the classes. |
4 | Not subject to any sales charges. |
Performance of a $1,000,000 Investment* (as of October 31, 2020)
* Minimum Initial Investment
Comparative performance of $1,000,000 invested in Institutional Class shares of the Aberdeen Ultra Short Municipal Income Fund, Bloomberg Barclays Municipal Bond: 1 Year (1-2) Index and the Consumer Price Index (CPI) over a 10-year period ended October 31, 2020. Unlike the Fund, the returns for these unmanaged indexes do not reflect any fees, expenses, or sales charges. Investors cannot invest directly in market indexes.
Bloomberg Barclays Municipal Bond: 1 Year (1-2) Index is a total return benchmark of BAA3 ratings or better designed to measure returns for tax exempt assets.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Investment return and principal value will fluctuate, and when redeemed, shares may be worth more or less than original cost. Past performance is no guarantee of future results. The Average Annual Total Return table and Performance graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investing in mutual funds involves market risk, including loss of principal. Performance returns assume the reinvestment of all distributions. Total returns reflect waivers and reimbursements in effect, without which returns would have been lower.
2020 Annual Report | 49 |
Aberdeen Ultra Short Municipal Income Fund (Unaudited)
Portfolio Summary (as a percentage of net assets)
October 31, 2020 (Unaudited)
Asset Allocation | ||||
Municipal Bonds | 107.2% | |||
Certificates of Deposit | 2.3% | |||
Mutual Funds | –% | |||
Liabilities in Excess of Other Assets | (9.5%) | |||
100.0% |
Amounts listed as "–" are 0% or round to 0%.
Top Holdings* | ||||
Mississippi Business Finance Corp. Revenue Bonds (PSL-North America), Series A 11/01/2032 | 5.2% | |||
Mission Economic Development Corp. Solid Waste Disposal Revenue Bonds (Republic Services, Inc.), AMT, FRN 05/01/2050 | 5.0% | |||
Montgomery County Higher Education And Health Authority Thomas Jefferson University Variable Rate Revenue Bonds, VRDN 09/01/2050 | 4.0% | |||
Maryland Industrial Development Financing Authority Revenue Bonds (Occidental Petroleum Corp.) 03/01/2030 | 3.6% | |||
Indiana Finance Authority Environmental Improvement Revenue Bonds (ArcelorMittal USA, Inc.) 08/01/2030 | 3.2% | |||
Mississippi Business Finance Corp. Revenue Bonds (Mississippi Power Co.), Series D, VRDN 12/01/2030 | 2.8% | |||
Illinois Finance Authority Solid Waste Disposal Revenue Bonds (Waste Management, Inc.) 11/01/2044 | 2.0% | |||
Mississippi Business Finance Corp. Revenue Bonds (Gulf Power Company Project), AMT, VRDN 12/01/2049 | 1.9% | |||
Public Finance Authority Revenue Bonds (Waste Management, Inc.), Series A-1 06/01/2023 | 1.8% | |||
New York City Industrial Development Agency Revenue Bonds (Tiago Holdings LLC), AMT, VRDN 01/01/2037 | 1.7% | |||
Other | 68.8% | |||
100.0% |
* | For the purpose of listing top holdings, Short-Term Investments are included as part of Other. |
Top States | ||||||
New York | 13.2 | % | ||||
Texas | 12.2 | % | ||||
Mississippi | 11.5 | % | ||||
California | 9.4 | % | ||||
Illinois | 7.0 | % | ||||
Kentucky | 6.5 | % | ||||
Pennsylvania | 6.2 | % | ||||
Indiana | 5.0 | % | ||||
Alabama | 4.9 | % | ||||
Wisconsin | 4.3 | % | ||||
Other | 19.8 | % | ||||
100.0 | % |
50 | 2020 Annual Report |
Statement of Investments
October 31, 2020
Aberdeen Ultra Short Municipal Income Fund
Shares or Principal Amount | Value (US$) | |||||
MUNICIPAL BONDS (107.2%) | ||||||
Alabama (4.9%) | ||||||
Black Belt Energy Gas District Revenue Bonds, FRN, 1.00%, 12/01/2048 (a) | $20,000,000 | $ 19,936,200 | ||||
Columbia Industrial Development Board Revenue Bonds (Alabama Power Co. Project), AMT, VRDN, 0.17%, 11/01/2021 (a) | 8,900,000 | 8,900,000 | ||||
Health Care Authority for Baptist Health Revenue Bonds, Series B 0.25%, 11/15/2037 (a) | 7,025,000 | 7,025,000 | ||||
0.49%, 11/01/2042 (a) | 18,200,000 | 18,200,000 | ||||
Industrial Development Board Of The Town Of West Jefferson Solid Waste Disposal Revenue Bonds (Alabama Power Company Miller Plant Project), 0.16%, 12/01/2038 (a) | 3,700,000 | 3,700,000 | ||||
Mobile Industrial Development Board Revenue Bonds (Alabama Power Theodore Plant Project), Series A, 0.16%, 04/01/2031 (a) | 600,000 | 600,000 | ||||
Walker County Economic & Industrial Development Authority Revenue Bonds (Alabama Power Co.), 0.16%, 12/01/2036 (a) | 400,000 | 400,000 | ||||
58,761,200 | ||||||
Arizona (0.7%) | ||||||
Cochise County Pollution Control Corp. Revenue Bonds (Arizona Electric Power Cooperative, Inc.), 0.50%, 09/01/2024 (a) | 7,900,000 | 7,898,183 | ||||
Scottsdale Industrial Development Authority Revenue Bonds (Scottsdale Healthcare Hospitals Obligated Group), Series F, 0.34%, 09/01/2045 (a) | 550,000 | 550,000 | ||||
8,448,183 | ||||||
Arkansas (0.4%) | ||||||
City of Blytheville Revenue Bonds (Nucor Corp. Project), 0.23%, 01/02/2033 (a) | 4,700,000 | 4,700,000 | ||||
California (9.4%) | ||||||
Bay Area Toll Authority San Francisco Bay Area Toll Bridge Revenue Bonds, Series D, 0.71%, 04/01/2045 (a) | 8,000,000 | 8,000,240 | ||||
California Infrastructure & Economic Development Bank Revenue Bonds (DesertXpress Enterprises LLC), AMT, FRN, 144A, 0.45%, 01/01/2050 (a)(b) | 12,500,000 | 12,494,250 | ||||
California Infrastructure and Economic Development Bank Refunding Revenue Bonds, Series B1, 0.30%, 10/01/2047 (a) | 6,315,000 | 6,315,253 | ||||
California Municipal Finance Authority Solid Waste Disposal Revenue Bonds (Waste Management, Inc.), Series A, 2.00%, 12/01/2044 (a) | 11,020,000 | 11,034,326 |
Shares or Principal Amount | Value (US$) | |||||
California Pollution Control Financing Authority Revenue Bonds (Republic Services, Inc.), Series A, 0.50%, 08/01/2023 (a)(b) | $ 7,000,000 | $ 7,000,000 | ||||
California Statewide Communities Development Authority Revenue Bonds (Catholic Healthcare West), Series E, 0.35%, 07/01/2040 (a) | 3,650,000 | 3,650,000 | ||||
California Statewide Communities Development Authority Revenue Bonds (Dignity Health Obligated Group) Series F, 0.35%, 07/01/2040 (a) | 5,550,000 | 5,550,000 | ||||
Series D, 0.33%, 07/01/2041 (a) | 11,900,000 | 11,900,000 | ||||
California Statewide Communities Development Authority Revenue Bonds (Irvine Apartment Communities LP), AMT, VRDN, 0.12%, 09/15/2029 (a) | 700,000 | 700,000 | ||||
California Statewide Communities Development Authority Revenue Bonds (Westgate Pasadena Apartments Project), Series B, 0.28%, 04/01/2042 (a) | 8,935,000 | 8,935,000 | ||||
Palomar Pomerado Health Care Certificates of Participation Series C, 0.70%, 11/01/2036 (a) | 13,125,000 | 13,125,000 | ||||
Series B, 0.72%, 11/01/2036 (a) | 5,725,000 | 5,725,000 | ||||
Series A, 0.77%, 11/01/2036 (a) | 8,250,000 | 8,250,000 | ||||
San Francisco City & County Airport Comm-San Francisco International Airport Revenue Bonds, AMT, VRDN, 0.13%, 05/01/2030 (a) | 8,900,000 | 8,900,000 | ||||
111,579,069 | ||||||
Connecticut (1.8%) | ||||||
Capital Region Development Authority Revenue Bonds, Series B 0.30%, 06/15/2024 (a) | 3,950,000 | 3,950,000 | ||||
0.30%, 06/15/2034 (a) | 4,270,000 | 4,270,000 | ||||
City Of Milford, Connecticut General Obligation Bonds (Anticipation Notes), 2.50%, 11/03/2020 | 4,000,000 | 4,000,240 | ||||
City of West Haven General Obligation Unlimited Bonds, Series B, 2.00%, 09/30/2021 | 4,800,000 | 4,846,032 | ||||
Town Of Greenwich, Connecticut General Obligation Bonds (Anticipation Notes), 1.50%, 01/14/2021 | 4,100,000 | 4,109,922 | ||||
21,176,194 | ||||||
Delaware (0.5%) | ||||||
Delaware State Economic Development Authority Revenue Bonds (Delmarva Power & Light Co.), 0.22%, 10/01/2029 (a) | 4,400,000 | 4,400,000 | ||||
Sussex County Revenue Bonds (Baywood LLC), Series A, 0.25%, 11/01/2027 (a) | 2,100,000 | 2,100,000 | ||||
6,500,000 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 51 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Ultra Short Municipal Income Fund
Shares or Principal Amount | Value (US$) | ||||||
MUNICIPAL BONDS (continued) | |||||||
District of Columbia (0.7%) | |||||||
Metropolitan Washington Airports Authority Revenue Bonds, AMT, VRDN, 0.14%, 10/01/2040 (a) | $ 7,700,000 | $ 7,700,000 | |||||
Florida (3.9%) | |||||||
County of Escambia Revenue Bonds (Gulf Power Co.), VRDN, 0.15%, 04/01/2039 (a) | 5,000,000 | 5,000,000 | |||||
County of Jackson Revenue Bonds (Gulf Power Co.), 0.16%, 07/01/2022 (a) | 1,730,000 | 1,730,000 | |||||
Florida Development Finance Corp. Revenue Bonds (Shands Jacksonville Medical Center Obligated Group), Series B, 1.58%, 02/01/2029 (a) | 11,140,000 | 11,140,000 | |||||
JEA Water & Sewer System Revenue Bonds, Series B, VRDN, 0.16%, 10/01/2041 (a) | 5,100,000 | 5,100,000 | |||||
Miami-Dade County Industrial Development Authority Solid Waste Disposal Revenue Bonds (Waste Management, Inc.), 0.55%, 11/01/2041 (a) | 5,950,000 | 5,950,000 | |||||
St. Lucie County Pollution Control Revenue Bonds (Florida Power & Light Co.), 0.14%, 09/01/2028 (a) | 17,900,000 | 17,900,000 | |||||
46,820,000 | |||||||
Georgia (2.4%) | |||||||
Appling County Georgia Development Authority Pollution Control Revenue Bonds, VRDN, 0.18%, 09/01/2029 (a) | 8,700,000 | 8,700,000 | |||||
Appling County Georgia Development Authority Pollution Control Revenue Bonds (Georgia Power Company Plant Hatch Project), VRDN, 0.18%, 09/01/2041 (a) | 5,800,000 | 5,800,000 | |||||
Development Authority of Burke County Revenue Bonds (Oglethop Power Co. Project), VRDN, 0.15%, 01/01/2037 (a) | 8,800,000 | 8,800,000 | |||||
Development Authority of Monroe County Revenue Bonds (Gulf Power Co. Project), VRDN, 0.18%, 11/01/2048 (a) | 2,300,000 | 2,300,000 | |||||
Heard County Development Authority Revenue Bonds (Georgia Power Co.), 0.17%, 12/01/2037 (a) | 3,000,000 | 3,000,000 | |||||
28,600,000 | |||||||
Illinois (7.0%) | |||||||
County of Will Revenue Bonds (BASF Corp.), AMT, VRDN, 0.26%, 07/01/2032 (a) | 9,000,000 | 9,000,000 | |||||
Illinois Finance Authority Educational Facility Revenue Bonds (Augustana College), VRDN, 0.12%, 10/01/2032 (a) | 2,590,000 | 2,590,000 | |||||
Illinois Finance Authority Revenue Bonds (Bohler-Uddeholm Corp. Project), 1.19%, 02/01/2037 (a) | 10,000,000 | 10,000,000 | |||||
Illinois Finance Authority Revenue Bonds (Fenwick High School Inc), VRDN, 0.13%, 04/01/2037 (a) | 15,635,000 | 15,635,000 |
Shares or Principal Amount | Value (US$) | ||||||
Illinois Finance Authority Solid Waste Disposal Revenue Bonds (Waste Management, Inc.), 0.55%, 11/01/2044 (a) | $24,000,000 | $ 24,000,000 | |||||
Illinois Housing Development Authority Revenue Bonds, AMT, VRDN, 0.14%, 05/01/2042 (a) | 10,440,000 | 10,440,000 | |||||
Quad Cities Regional Economic Development Authority Revenue Bonds (Augustana College), VRDN, 0.12%, 10/01/2035 (a) | 8,500,000 | 8,500,000 | |||||
Rockford Park District Limited Tax, Series 2019B, 3.00%, 12/15/2020 | 1,165,000 | 1,167,936 | |||||
State of Illinois 4.88%, 05/01/2021 | 750,000 | 762,945 | |||||
Series A, 5.00%, 10/01/2021 | 750,000 | 773,377 | |||||
82,869,258 | |||||||
Indiana (5.0%) | |||||||
Hammond Local Public Improvement Bond Bank Advance Funding Program Notes, 2.38%, 12/31/2020 | 3,375,000 | 3,381,885 | |||||
Indiana Finance Authority Environmental Improvement Revenue Bonds (ArcelorMittal USA, Inc.), 0.25%, 08/01/2030 (a) | 38,000,000 | 38,000,000 | |||||
Indianapolis City IN Revenue Bonds (Foundation for Affordable Rental Housing, Inc.), VRDN, 0.11%, 05/15/2038 (a) | 5,325,000 | 5,325,000 | |||||
Indianapolis Multifamily Housing Revenue Bonds (Forest Ridge), Series A, AMT, VRDN, 0.15%, 11/01/2042 (a) | 12,900,000 | 12,900,000 | |||||
59,606,885 | |||||||
Iowa (1.0%) | |||||||
Iowa Finance Authority Midwestern Disaster Area Economic Development Revenue Bonds (CJ Bio America, Inc.), 0.32%, 04/01/2022 (a) | 12,000,000 | 12,000,000 | |||||
Kansas (1.0%) | |||||||
City of Burlington Environmental Improvement Revenue Bonds (Kansas City Power & Light Co.) Series A, 0.24%, 09/01/2035 (a) | 5,000,000 | 5,000,000 | |||||
Series B, 0.24%, 09/01/2035 (a) | 5,000,000 | 5,000,000 | |||||
City of Dodge City Industrial Development Revenue Bonds (National Beef Packing Co. LLC), 0.40%, 03/01/2027 (a) | 1,000,000 | 1,000,000 | |||||
City of Liberal Industrial Development Revenue Bonds (National Beef Packing Co. LLC), 0.40%, 02/01/2029 (a) | 1,000,000 | 1,000,000 | |||||
12,000,000 | |||||||
Kentucky (6.5%) | |||||||
County Of Meade, Kentucky (Nucor Steel Brandenburg Project) Series 2020A-1 Industrial Building Revenue Bonds, AMT, VRDN, 0.21%, 07/01/2060 (a) | 14,000,000 | 14,000,000 |
See accompanying Notes to Financial Statements.
52 | 2020 Annual Report |
Statement of Investments (continued)
October 31, 2020
Aberdeen Ultra Short Municipal Income Fund
Shares or Principal Amount | Value (US$) | ||||||
MUNICIPAL BONDS (continued) | |||||||
Kentucky (continued) | |||||||
County Of Meade, Kentucky (Nucor Steel Brandenburg Project) Series 2020B-1 Industrial Building Revenue Bonds, AMT, VRDN, 0.21%, 07/01/2060 (a) | $ 14,000,000 | $ 14,000,000 | |||||
Kentucky Economic Development Finance Authority Revenue Bonds (Masonic Homes of Kentucky, Inc.), Series C, VRDN, 0.20%, 05/01/2034 (a) | 10,465,000 | 10,465,000 | |||||
Kentucky Economic Development Finance Authority Revenue Bonds (Republic Services, Inc.), AMT, FRN, 0.28%, 04/01/2031 (a) | 3,000,000 | 3,000,780 | |||||
Louisville Regional Airport Authority Revenue Bonds (United Parcel Service, Inc.), AMT, VRDN, 0.15%, 01/01/2029 (a) | 13,500,000 | 13,500,000 | |||||
Louisville Regional Airport Authority Revenue Bonds (BT-OH LLC), Series A, AMT, VRDN, 0.18%, 11/01/2036 (a) | 12,300,000 | 12,300,000 | |||||
Louisville Regional Airport Authority Revenue Bonds (United Parcel Service, Inc.) Series B, 0.13%, 01/01/2029 (a) | 7,300,000 | 7,300,000 | |||||
0.14%, 01/01/2029 (a) | 900,000 | 900,000 | |||||
Pulaski County Solid Waste Disposal Revenue Bonds (East Kentucky Power Cooperative, Inc.), Series B, 0.50%, 08/15/2023 (a) | 2,100,000 | 2,099,517 | |||||
77,565,297 | |||||||
Louisiana (3.1%) | |||||||
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds, AMT, VRDN 0.29%, 12/01/2036 (a) | 8,000,000 | 8,000,000 | |||||
0.29%, 12/01/2037 (a) | 10,000,000 | 10,000,000 | |||||
Louisiana Public Facilities Authority Revenue Bonds (St Mary's Dominican High School Corp.), Series B, 0.28%, 07/01/2033 (a) | 200,000 | 200,000 | |||||
North Webster Parish Industrial District Revenue Bonds (Continental Structural Plastics of Louisiana LLC), 2.10%, 09/01/2021 (a) | 250,000 | 250,000 | |||||
Parish of State James Revenue Bonds (Nucor Steel Louisiana LLC), VRDN, 0.21%, 11/01/2040 (a) | 11,500,000 | 11,500,000 | |||||
Plaquemines Port Harbor & Terminal District Revenue Bonds (International Marine Terminal Partnership Project), Series A, 1.00%, 03/15/2025 (a) | 7,500,000 | 7,522,275 | |||||
37,472,275 | |||||||
Maryland (4.2%) | |||||||
Maryland Economic Development Corp. Revenue Bonds (Linemark Printing/501 Prince George's Boulevard Obligated Group), 0.42%, 12/01/2033 (a)(c) | 5,820,000 | 5,820,000 |
Shares or Principal Amount | Value (US$) | ||||||
Maryland Economic Development Corp. Revenue Bonds (Redrock LLC Facility), 0.42%, 11/01/2022 (a) | $ | 500,000 | $ | 500,000 | |||
Maryland Industrial Development Financing Authority Revenue Bonds (Occidental Petroleum Corp.), 3.60%, 03/01/2030 (a) | 42,405,000 | 42,405,000 | |||||
Washington County Revenue Bonds (Conservit, Inc.), 0.42%, 02/01/2023 (a)(c) | 1,215,000 | 1,215,000 | |||||
49,940,000 | |||||||
Massachusetts (0.6%) | |||||||
Massachusetts Health & Educational Facilities Authority Revenue Bonds (Partners Healthcare System, Inc.), Series G, 0.20%, 07/01/2042 (a) | 6,865,000 | 6,865,000 | |||||
Michigan (0.6%) | |||||||
Waterford School District General Obligation Limited Bonds, 4.00%, 08/24/2021 | 7,120,000 | 7,320,855 | |||||
Mississippi (11.5%) | |||||||
Mississippi Business Finance Corp. Gulf Opportunity Zone Revenue Bonds, Series C, 0.30%, 05/01/2037 | 7,562,000 | 7,562,000 | |||||
Mississippi Business Finance Corp. Revenue Bonds (Gulf Power Company Project), AMT, VRDN, 0.18%, 12/01/2049 (a) | 22,300,000 | 22,300,000 | |||||
Mississippi Business Finance Corp. Revenue Bonds (Mississippi Power Co.) AMT, VRDN, 0.17%, 05/01/2028 (a) | 10,000,000 | 10,000,000 | |||||
Series D, VRDN, 0.14%, 12/01/2030 (a) | 32,820,000 | 32,820,000 | |||||
Mississippi Business Finance Corp. Revenue Bonds (PSL-North America), Series A, 3.66%, 11/01/2032 (a) | 62,000,000 | 62,000,000 | |||||
Mississippi Business Finance Corp. Revenue Bonds (Tri-State Truck Center, Inc.), 0.40%, 03/01/2033 (a) | 2,400,000 | 2,400,000 | |||||
137,082,000 | |||||||
Nevada (0.4%) | |||||||
State of Nevada Department of Business & Industry Revenue Bonds (DesertXpress Enterprises LLC), AMT, FRN, 144A, 0.50%, 01/01/2050 (a)(b) | 5,000,000 | 4,997,350 | |||||
New Jersey (1.1%) | |||||||
City of Orange Township, in The County of Essex, State of New Jersey General Obligation Notes, Series A, 2.00%, 12/18/2020 | 4,045,000 | 4,053,252 | |||||
Bordentown Sewage Authority Revenue Bonds, Series J, (BAM), 5.00%, 12/01/2021 | 500,000 | 523,320 | |||||
City of Newark General Obligation Unlimited Notes, 3.50%, 07/27/2021 | 3,250,000 | 3,316,917 | |||||
City of Newark General Obligation Unlimited Bonds Series B, 2.00%, 10/05/2021 | 1,160,000 | 1,173,340 | |||||
Series C, 2.00%, 10/05/2021 | 4,200,000 | 4,248,300 | |||||
13,315,129 |
See accompanying Notes to Financial Statements.
2020 Annual Report | 53 |
Statement of Investments (continued)
October 31, 2020
Aberdeen Ultra Short Municipal Income Fund
Shares or Principal Amount | Value (US$) | |||||||
MUNICIPAL BONDS (continued) | ||||||||
New York (13.2%) | ||||||||
County Of Suffolk New York General Obligation Limited Bonds Series A, 5.00%, 11/13/2020 | $ | 7,000,000 | $ | 7,009,100 | ||||
Series C, 3.00%, 04/16/2021 | 20,000,000 | 20,200,800 | ||||||
Metropolitan Transportation Authority Revenue Bonds Series D, 5.00%, 11/15/2020 | 4,000,000 | 4,003,880 | ||||||
5.00%, 05/15/2021 | 5,000,000 | 5,036,600 | ||||||
Series B-2, 5.00%, 05/15/2021 | 6,800,000 | 6,849,776 | ||||||
5.00%, 05/15/2021 | 2,750,000 | 2,770,130 | ||||||
Series F, 5.00%, 11/15/2021 | 1,000,000 | 1,015,980 | ||||||
Series B, 5.00%, 11/15/2021 | 700,000 | 711,200 | ||||||
Series D, 5.00%, 11/15/2021 | 700,000 | 711,186 | ||||||
4.00%, 02/01/2022 | 5,000,000 | 4,994,950 | ||||||
Series B-1, 5.00%, 05/15/2022 | 10,000,000 | 10,142,700 | ||||||
New York City General Obligation Unlimited Bonds Series A-4, 0.31%, 08/01/2026 (a) | 7,025,000 | 7,025,000 | ||||||
Series C-4, 0.15%, 10/01/2027 (a) | 19,100,000 | 19,100,000 | ||||||
Series J-3, 0.30%, 06/01/2036 (a) | 20,175,000 | 20,175,000 | ||||||
Series J-2, 0.32%, 06/01/2036 (a) | 6,275,000 | 6,275,000 | ||||||
New York City Industrial Development Agency Revenue Bonds (Novelty Crystal Corp.), 0.57%, 12/01/2034 (a) | 1,300,000 | 1,300,000 | ||||||
New York City Industrial Development Agency Revenue Bonds (Tiago Holdings LLC), AMT, VRDN, 0.10%, 01/01/2037 (a) | 20,610,000 | 20,610,000 | ||||||
Oneida County Industrial Development Agency Revenue Bonds (Champion Home Builders Co. Facility), 0.36%, 06/01/2029 (a) | 6,820,000 | 6,820,000 | ||||||
Village of Clayton NY General Obligation Limited Bonds, 2.00%, 10/21/2021 | 2,925,000 | 2,964,517 | ||||||
Village of Johnson City General Obligation Limited Bonds, 1.50%, 10/01/2021 | 9,609,886 | 9,671,005 | ||||||
157,386,824 | ||||||||
North Carolina (0.3%) | ||||||||
Hertford County Industrial Facilities & Pollution Control Financing Authority Revenue Bonds (Nucor Corp.), Series A, 0.23%, 11/01/2033 (a) | 3,700,000 | 3,700,000 | ||||||
Oklahoma (2.8%) | ||||||||
Muskogee City-County Trust Port Authority Revenue Bonds (USA, Inc. Project), AMT, VRDN, 0.18%, 05/01/2023 (a) | 5,700,000 | 5,700,000 | ||||||
Oklahoma Development Finance Authority Revenue Bonds (INTEGRIS Health Obligated Group ), VRDN 0.39%, 08/15/2031 (a) | 14,000,000 | 14,000,000 | ||||||
0.40%, 08/15/2031 (a) | 13,770,000 | 13,770,000 | ||||||
33,470,000 |
Shares or Principal Amount | Value (US$) | |||||||
Oregon (0.1%) | ||||||||
Port of Portland Revenue Bonds (Horizon Air Industries, Inc.), 0.19%, 06/15/2027 (a) | $ 1,500,000 | $ 1,500,000 | ||||||
Pennsylvania (6.2%) | ||||||||
Allentown City School District General Obligation Limited Bonds, (ST AID WITHHLDG), 2.38%, 03/31/2021 | 2,750,000 | 2,749,670 | ||||||
Delaware Valley Regional Finance Authority Local Government Revenue Bonds, 2020 Series C, R-Floats Weekly Rate Mode (Pa), 0.32%, 11/01/2055 | 9,700,000 | 9,700,000 | ||||||
Franklin County Industrial Development Authority Revenue Bonds (Precast System LLC), Series A, 0.42%, 11/01/2021 (a) | 100,000 | 100,000 | ||||||
Montgomery County Higher Education And Health Authority Thomas Jefferson University Variable Rate Revenue Bonds, VRDN, 0.33%, 09/01/2050 (a)(d) | 48,030,000 | 48,030,000 | ||||||
Pennsylvania Economic Development Financing Authority Solid Waste Disposal Revenue Bonds (Waste Management PA Obligated Group), 0.45%, 08/01/2045 (a) | 10,000,000 | 10,000,000 | ||||||
Philadelphia Authority for Industrial Development Revenue Bonds (Franklin Institute), VRDN, 0.15%, 06/01/2026 (a) | 2,835,000 | 2,835,000 | ||||||
73,414,670 | ||||||||
Tennessee (1.2%) | ||||||||
Chattanooga Health Educational & Housing Faculty Board Revenue Bonds, Series C, VRDN, 0.23%, 05/01/2039 (a) | 12,900,000 | 12,900,000 | ||||||
Wilson County Industrial Development Board Revenue Bonds (Kenwal Steel Tennessee LLC), 0.45%, 06/01/2037 (a) | 915,000 | 915,000 | ||||||
13,815,000 | ||||||||
Texas (12.2%) | ||||||||
Katy Independent School District Refunding Bonds, Series C, 0.38%, 08/15/2036 (a) | 4,320,000 | 4,312,958 | ||||||
Lower Neches Valley Authority Industrial Development Corp. Revenue Bonds (ExxonMobil Oil Corp.), AMT, VRDN, 0.17%, 04/01/2029 (a) | 3,200,000 | 3,200,000 | ||||||
Mission Economic Development Corp. Solid Waste Disposal Revenue Bonds (Republic Services, Inc.) 0.50%, 01/01/2026 (a) | 6,500,000 | 6,500,000 | ||||||
AMT, FRN, 0.50%, 05/01/2050 (a) | 60,000,000 | 60,000,000 | ||||||
Port of Corpus Christi Authority of Nueces County Solid Waste Disposal Revenue Bonds (Flint Hills Resources LP) 0.29%, 04/01/2028 (a) | 7,000,000 | 7,000,000 | ||||||
0.29%, 01/01/2030 (a) | 11,800,000 | 11,800,000 |
See accompanying Notes to Financial Statements.
54 | 2020 Annual Report |
Statement of Investments (concluded)
October 31, 2020
Aberdeen Ultra Short Municipal Income Fund
Shares or Principal Amount | Value (US$) | |||||||
MUNICIPAL BONDS (continued) | ||||||||
Texas (continued) | ||||||||
Port of Port Arthur Navigation District Revenue Bonds Series A, AMT, VRDN, 0.29%, 04/01/2037 (a) | $ 15,000,000 | $ 15,000,000 | ||||||
VRDN, 0.21%, 04/01/2040 (a) | 14,800,000 | 14,800,000 | ||||||
VRDN, 0.35%, 11/01/2040 (a) | 19,955,000 | 19,955,000 | ||||||
State of Texas Tax And Revenue Anticipation Notes, AMT, VRDN, 0.17%, 12/01/2038 (a) | 3,250,000 | 3,250,000 | ||||||
145,817,958 | ||||||||
Washington (0.2%) | ||||||||
Port of Tacoma WA Revenue Bonds, AMT, VRDN, 0.15%, 12/01/2035 (a) | 2,100,000 | 2,100,000 | ||||||
Wisconsin (4.3%) | ||||||||
Public Finance Authority Revenue Bonds (Waste Management, Inc.), Series A-1, 0.45%, 06/01/2023 (a) | 21,500,000 | 21,500,000 | ||||||
Whitewater Community Development Authority Revenue Bonds, VRDN, 0.14%, 06/01/2042 (a) | 2,555,000 | 2,555,000 | ||||||
Wisconsin Health & Educational Facilities Authority Revenue Bonds, 0.35%, 02/15/2053 (a) | 13,500,000 | 13,500,000 | ||||||
Wisconsin Public Finance Authority Revenue Bonds (Waste Management, Inc.), 0.45%, 09/01/2027 (a) | 14,000,000 | 14,000,000 | ||||||
51,555,000 | ||||||||
Total Municipal Bonds | 1,278,078,147 |
Shares or Principal Amount | Value (US$) | |||||||
SHORT-TERM INVESTMENT (2.3%) | ||||||||
UNITED STATES (2.3%) | ||||||||
Ascension Parish Louisiana Commercial Paper, 0.33%, 12/01/2020 | $ 10,000,000 | $ 10,000,000 | ||||||
BlackRock Liquidity Funds MuniCash Portfolio, Institutional Shares, Zero Coupon%, | 67,866 | 67,873 | ||||||
Mercer County Pollution Control Revenue Commercial Paper Notes, 0.20%, 11/05/2020 | 17,600,000 | 17,600,000 | ||||||
Total Short-Term Investment | 27,667,873 | |||||||
Total Investments (Cost $1,306,290,612) (e)—109.5% | 1,305,746,020 | |||||||
Liabilities in Excess of Other Assets—(9.5)% | (113,696,538 | ) | ||||||
Net Assets—100.0% | $ | 1,192,049,482 |
(a) | Variable Rate Instrument. The rate shown is based on the latest available information as of October 31, 2020. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description. |
(b) | Denotes a security issued under Regulation S or Rule 144A. |
(c) | All or a portion of the security has been designated as collateral for when issued trading. When-issued trading is trading in securities that have been authorized but not yet been issued. |
(d) | Illiquid security. |
(e) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
FRN | Floating Rate Note |
See accompanying Notes to Financial Statements.
2020 Annual Report | 55 |
Statements of Assets and Liabilities
October 31, 2020
Aberdeen Emerging Markets Debt Fund | Aberdeen Global Absolute Return Strategies Fund | Aberdeen Intermediate Municipal Income Fund | Aberdeen Short Duration High Yield Municipal Fund | Aberdeen Ultra Short Municipal Income Fund | ||||||||||||
Assets: | ||||||||||||||||
Investments, at value | $ | 50,803,566 | $ | 5,395,097 | $ | 64,360,536 | $ | 288,162,727 | $ | 1,278,078,147 | ||||||
Short-term investments, at value | 776,625 | 16,548,030 | 10,372 | – | 27,667,873 | |||||||||||
Foreign currency, at value | 708,326 | 127,670 | – | – | – | |||||||||||
Cash | 76,119 | – | – | 127,696 | – | |||||||||||
Cash collateral pledged for futures | – | 212,386 | – | – | – | |||||||||||
Receivable for investments sold | 425,045 | 3,699 | – | 1,275,731 | 22,701,686 | |||||||||||
Interest and dividends receivable | 729,348 | 3,539 | 895,079 | 3,381,126 | 2,333,383 | |||||||||||
Receivable for capital shares issued | 10,116 | 1,462 | 100 | 47,561 | 1,839,603 | |||||||||||
Unrealized appreciation on forward foreign currency exchange contracts | 158,157 | 242,186 | – | – | – | |||||||||||
Receivable from Adviser | 20,017 | 39,077 | 16,810 | 40,920 | 231,189 | |||||||||||
Over-the-counter interest rate swaps and total return equity swaps, at value | – | 15,894 | – | – | – | |||||||||||
Tax reclaim receivable | – | 559 | – | – | – | |||||||||||
Prepaid expenses | 35,266 | 27,549 | 20,470 | 34,314 | 60,813 | |||||||||||
Total assets | 53,742,585 | 22,617,148 | 65,303,367 | 293,070,075 | 1,332,912,694 | |||||||||||
Liabilities: | ||||||||||||||||
Due to custodian | 74,709 | – | – | – | 22,701,686 | |||||||||||
Payable for investments purchased | 981,286 | 671 | – | – | 116,213,800 | |||||||||||
Unrealized depreciation on forward foreign currency exchange contracts | 59,881 | 141,340 | – | – | – | |||||||||||
Over-the-counter interest rate swaps and total return equity swaps, at value | – | 15,619 | – | – | – | |||||||||||
Distributions payable | – | – | 10,227 | 40,941 | 17,255 | |||||||||||
Payable for capital shares redeemed | 1,204 | 2,814 | 208,979 | 147,966 | 1,125,534 | |||||||||||
Accrued foreign capital gains tax | 1,510 | – | – | – | – | |||||||||||
Cash due to broker for forward foreign currency contracts | 100,000 | – | – | – | – | |||||||||||
Variation margin payable for centrally cleared swaps | – | 15,038 | – | – | – | |||||||||||
Variation margin payable for futures contracts | – | 19,242 | – | – | – | |||||||||||
Written options outstanding, at value | – | 444,351 | – | – | – | |||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Investment advisory fees | 26,771 | 11,144 | 23,641 | 158,258 | 369,672 | |||||||||||
Audit fees | 42,775 | 48,361 | 39,325 | 41,750 | 48,500 | |||||||||||
Custodian fees | 16,606 | 117,223 | 3,216 | 8,166 | 22,689 | |||||||||||
Sub-transfer agent and administrative services fees | 1,932 | 1,359 | 655 | 18,299 | 89,058 | |||||||||||
Administration fees | 3,569 | 1,486 | 4,450 | 23,738 | 77,017 | |||||||||||
Legal fees | 2,132 | 868 | 2,566 | 11,208 | 44,670 | |||||||||||
Fund accounting fees | 1,708 | 746 | 2,279 | 8,795 | 33,535 | |||||||||||
Distribution fees | 1,761 | 712 | 1,647 | 7,057 | 32,905 | |||||||||||
Transfer agent fees | 1,548 | 2,420 | 12,070 | 4,272 | 7,172 | |||||||||||
Printing fees | 1,718 | 1,960 | 1,958 | 4,013 | 28,939 | |||||||||||
Other accrued expenses | 17,684 | 16,653 | 18,122 | 26,326 | 50,780 | |||||||||||
Total liabilities | 1,336,794 | 842,007 | 329,135 | 500,789 | 140,863,212 | |||||||||||
Net Assets | $ | 52,405,791 | $ | 21,775,141 | $ | 64,974,232 | $ | 292,569,286 | $ | 1,192,049,482 | ||||||
Cost: | ||||||||||||||||
Investments | $ | 52,935,439 | $ | 4,971,967 | $ | 61,308,951 | $ | 290,050,828 | $ | 1,278,622,739 | ||||||
Short-term investment | 776,625 | 16,547,972 | 10,372 | – | 27,667,873 | |||||||||||
Foreign currency | 718,753 | 126,073 | – | – | – | |||||||||||
Premiums on written options: | – | 355,586 | – | – | – | |||||||||||
Represented by: | ||||||||||||||||
Capital | $ | 58,839,152 | $ | 21,504,935 | $ | 61,821,060 | $ | 301,873,286 | $ | 1,192,959,768 | ||||||
Distributable earnings (accumulated loss) | (6,433,361 | ) | 270,206 | 3,153,172 | (9,304,000 | ) | (910,286 | ) | ||||||||
Net Assets | $ | 52,405,791 | $ | 21,775,141 | $ | 64,974,232 | $ | 292,569,286 | $ | 1,192,049,482 | ||||||
Net Assets: | ||||||||||||||||
Class A Shares | $ | 301,882 | $ | 1,077,593 | $ | 6,670,433 | $ | 22,416,608 | $ | 263,067,945 | ||||||
Class A1 | – | – | – | – | 557,686 | |||||||||||
Class C Shares | 141,461 | 664,248 | 269,655 | – | – | |||||||||||
Class R Shares | 3,571,687 | – | – | – | – | |||||||||||
Institutional Service Class Shares | 79,195 | 8,148,112 | 19,518 | – | – | |||||||||||
Institutional Class Shares | 48,311,566 | 11,885,188 | 58,014,626 | 270,152,678 | 928,423,851 | |||||||||||
Total | $ | 52,405,791 | $ | 21,775,141 | $ | 64,974,232 | $ | 292,569,286 | $ | 1,192,049,482 |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
56 | 2020 Annual Report |
Statements of Assets and Liabilities (concluded)
October 31, 2020
Aberdeen Emerging Markets Debt Fund | Aberdeen Global Absolute Return Strategies Fund | Aberdeen Intermediate Municipal Income Fund | Aberdeen Short Duration High Yield Municipal Fund | Aberdeen Ultra Short Municipal Income Fund | ||||||||||||
Shares Outstanding (unlimited number of shares authorized): | ||||||||||||||||
Class A Shares | 32,676 | 104,730 | 685,507 | 2,243,025 | 26,074,456 | |||||||||||
Class A1 | – | – | – | – | 55,240 | |||||||||||
Class C Shares | 15,385 | 65,795 | 27,762 | – | – | |||||||||||
Class R Shares | 388,521 | – | – | – | – | |||||||||||
Institutional Service Class Shares | 8,557 | 787,634 | 2,004 | – | – | |||||||||||
Institutional Class Shares | 5,216,966 | 1,139,429 | 5,957,354 | 27,029,262 | 92,547,780 | |||||||||||
Total | 5,662,105 | 2,097,588 | 6,672,627 | 29,272,287 | 118,677,476 | |||||||||||
Net Asset Value and Redemption Price Per Share (Net assets by class divided by shares outstanding by class, respectively): | ||||||||||||||||
Class A Shares | $ | 9.24 | $ | 10.29 | $ | 9.73 | $ | 9.99 | $ | 10.09 | ||||||
Class A1 (b) | $ | – | $ | – | $ | – | $ | – | $ | 10.10 | ||||||
Class C Shares (a) | $ | 9.19 | $ | 10.10 | $ | 9.71 | $ | – | $ | – | ||||||
Class R Shares | $ | 9.19 | $ | – | $ | – | $ | – | $ | – | ||||||
Institutional Service Class Shares | $ | 9.25 | $ | 10.35 | $ | 9.74 | $ | – | $ | – | ||||||
Institutional Class Shares | $ | 9.26 | $ | 10.43 | $ | 9.74 | $ | 9.99 | $ | 10.03 | ||||||
Maximum Offering Price Per Share (100%/(100% – maximum sales charge) of net asset value adjusted to the nearest cent): | ||||||||||||||||
Class A Shares | $ | 9.53 | $ | 10.61 | $ | 9.98 | $ | 10.25 | $ | – | ||||||
Class A1 | – | – | – | – | 10.15 | |||||||||||
Maximum Sales Charge: | ||||||||||||||||
Class A Shares | 3.00 | (c)% | 3.00 | (c)% | 2.50 | (d)% | 2.50 | (d)% | – | % | ||||||
Class A1 | 0.50 | % |
(a) | For Class C Shares, the redemption price per share is reduced by 1.00% for shares held less than one year due to contingent deferred sales charge. |
(b) | Unless you are otherwise eligible to purchase Class A1 shares without a sales charge, a contingent deferred sales charge (CDSC) of up to 0.25% will be charged on Class A1 shares redeemed within 12 months of purchase if you paid no sales charge on the original purchase and a finder's fee was paid. |
(c) | Unless you are otherwise eligible to purchase Class A shares without a sales charge, a contingent deferred sales charge (CDSC) of up to 1.00% will be charged on Class A shares redeemed within 18 months of purchase if you paid no sales charge on the original purchase and a finder's fee was paid. |
(d) | Unless you are otherwise eligible to purchase Class A shares without a sales charge, a contingent deferred sales charge (CDSC) of up to 0.75% will be charged on Class A shares redeemed within 12 months of purchase if you paid no sales charge on the original purchase and a finder's fee was paid. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 57 |
Statements of Operations
For the Year Ended October 31, 2020
Aberdeen Emerging Markets Debt Fund | Aberdeen Global Absolute Return Strategies Fund | Aberdeen Intermediate Municipal Income Fund | Aberdeen Short Duration High Yield Municipal Fund | Aberdeen Ultra Short Municipal Income Fund | ||||||||||||||||
INVESTMENT INCOME: | ||||||||||||||||||||
Dividend income | $ | – | $ | 136,736 | $ | 996 | $ | 2,463 | $ | 6,511 | ||||||||||
Interest income | 2,892,945 | 179,470 | 2,330,424 | 9,812,881 | 14,163,650 | |||||||||||||||
Foreign tax withholding | (11,234 | ) | (11,783 | ) | – | – | – | |||||||||||||
Other income | – | 4,414 | – | 875 | – | |||||||||||||||
Total Income | 2,881,711 | 308,837 | 2,331,420 | 9,816,219 | 14,170,161 | |||||||||||||||
EXPENSES: | ||||||||||||||||||||
Investment advisory fees | 308,685 | 132,867 | 292,326 | 1,703,828 | 4,950,319 | |||||||||||||||
Trustee fees | 4,356 | 1,852 | 5,911 | 22,098 | 83,159 | |||||||||||||||
Administration fees | 41,158 | 17,716 | 55,026 | 210,691 | 735,195 | |||||||||||||||
Legal fees | 4,404 | 2,068 | 5,862 | 22,986 | 93,129 | |||||||||||||||
Audit fees | 42,775 | 48,361 | 39,325 | 41,750 | 48,500 | |||||||||||||||
Printing fees | 10,000 | 28,709 | 6,914 | 15,671 | 49,845 | |||||||||||||||
Custodian fees | 26,499 | 149,573 | 11,132 | 1,533 | 38,794 | |||||||||||||||
Transfer agent fees | 9,697 | 13,178 | 56,515 | 24,709 | 52,792 | |||||||||||||||
Distribution fees Class A | 1,225 | 2,016 | 17,554 | 63,080 | 526,982 | |||||||||||||||
Distribution fees Class A1 | – | – | – | – | 322 | |||||||||||||||
Distribution fees Class C | 1,540 | 2,151 | 2,649 | – | – | |||||||||||||||
Distribution fees Class R | 19,889 | – | 19 | – | – | |||||||||||||||
Sub-transfer agent and administrative service fees Institutional Class | 14,710 | 3,519 | 4,388 | 134,077 | 556,535 | |||||||||||||||
Sub-transfer agent and administrative service fees Class A | 567 | 477 | 889 | 13,320 | 101,632 | |||||||||||||||
Sub-transfer agent and administrative service fees Class A1 | – | – | – | – | 22 | |||||||||||||||
Sub-transfer agent and administrative service fees Class C | 140 | 179 | 92 | – | – | |||||||||||||||
Sub-transfer agent and administrative service fees Class R | 5,902 | – | – | – | – | |||||||||||||||
Sub-transfer agent and administrative service fees Institutional Service Class | – | 11,814 | – | – | – | |||||||||||||||
Fund accounting fees | 3,063 | 1,121 | 3,768 | 11,735 | 37,245 | |||||||||||||||
Registration and filing fees | 64,659 | 61,667 | 62,915 | 44,063 | 90,713 | |||||||||||||||
Other | 33,723 | 33,258 | 33,915 | 48,650 | 137,284 | |||||||||||||||
Total expenses before reimbursed/waived expenses | 592,992 | 510,526 | 599,200 | 2,358,191 | 7,502,468 | |||||||||||||||
Interest Expense (a) | 12 | 505 | 250 | 1,931 | 4,103 | |||||||||||||||
Total operating expenses before reimbursed/waived expenses | 593,004 | 511,031 | 599,450 | 2,360,122 | 7,506,571 | |||||||||||||||
Expenses reimbursed | (229,330 | ) | (347,710 | ) | (233,940 | ) | (582,868 | ) | (2,517,221 | ) | ||||||||||
Net expenses | 363,674 | 163,321 | 365,510 | 1,777,254 | 4,989,350 | |||||||||||||||
Net Investment Income | 2,518,037 | 145,516 | 1,965,910 | 8,038,965 | 9,180,811 | |||||||||||||||
REALIZED/UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: | ||||||||||||||||||||
Realized gain/(loss) on investment transactions | (1,100,334 | ) | (165,310 | ) | 106,838 | (1,967,350 | ) | 7,091 | ||||||||||||
Realized gain/(loss) on futures contracts | – | 210,129 | – | – | – | |||||||||||||||
Written options | – | (296,489 | ) | – | – | – | ||||||||||||||
Realized gain/(loss) on swap contracts | – | 561,720 | – | – | – | |||||||||||||||
Realized gain/(loss) on forward foreign currency exchange contracts | 75,484 | (102,304 | ) | – | – | – | ||||||||||||||
Realized gain/(loss) on foreign currency transactions | (19,702 | ) | (42,906 | ) | – | – | – | |||||||||||||
Net realized gain/(loss) from investments, futures contracts, swap contracts, forward foreign currency contracts and foreign currency transactions | (1,044,552 | ) | 164,840 | 106,838 | (1,967,350 | ) | 7,091 | |||||||||||||
Net change in unrealized appreciation/(depreciation) on investment transactions | (2,645,270 | ) | 334,827 | (1,362,746 | ) | (5,731,312 | ) | (628,850 | ) | |||||||||||
Net change in unrealized appreciation/(depreciation) on swap contracts | – | 31,381 | – | – | – | |||||||||||||||
Net change in unrealized appreciation/(depreciation) on futures contracts | – | (32,102 | ) | – | – | – | ||||||||||||||
Net change in unrealized appreciation/(depreciation) on written options | – | (88,765 | ) | – | – | – | ||||||||||||||
Net change in unrealized appreciation/(depreciation) on forward foreign currency exchange rate contracts | 227,600 | 223,543 | – | – | – | |||||||||||||||
Net change in unrealized appreciation/(depreciation) on translation of assets and liabilities denominated in foreign currencies | (10,974 | ) | (559 | ) | – | – | – | |||||||||||||
Net change in unrealized appreciation/(depreciation) from investments, futures contracts, swap contracts, forward foreign currency contracts and translation of assets and liabilities denominated in foreign currencies | (2,428,644 | ) | 468,325 | (1,362,746 | ) | (5,731,312 | ) | (628,850 | ) | |||||||||||
Net realized/unrealized gain/(loss) from investments, futures contracts, swaps and foreign currency transactions | (3,473,196 | ) | 633,165 | (1,255,908 | ) | (7,698,662 | ) | (621,759 | ) | |||||||||||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (955,159 | ) | $ | 778,681 | $ | 710,002 | $ | 340,303 | $ | 8,559,052 |
(a) | See Note 9 for additional information. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
58 | 2020 Annual Report |
Statements of Changes in Net Assets
Aberdeen Emerging Markets Debt Fund | Aberdeen Global Absolute Return Strategies Fund | Aberdeen Intermediate Municipal Income Fund (a) | ||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||
FROM INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net investment income | $ | 2,518,037 | $ | 1,919,164 | $ | 145,516 | $ | 255,872 | $ | 1,965,910 | $ | 2,210,857 | ||||||||||||
Net realized gain/(loss) from investments, futures contracts, swap contracts, forward foreign currency contracts and and foreign currency transactions | (1,044,552 | ) | (947,294 | ) | 164,840 | 20,140 | 106,838 | 100,606 | ||||||||||||||||
Net change in unrealized appreciation/(depreciation) on investments, futures contracts, swap contracts, forward foreign currency contracts and translation of assets and liabilities denominated in foreign currencies | (2,428,644 | ) | 2,907,769 | 468,325 | 312,865 | (1,362,746 | ) | 2,776,302 | ||||||||||||||||
Changes in net assets resulting from operations | (955,159 | ) | 3,879,639 | 778,681 | 588,877 | 710,002 | 5,087,765 | |||||||||||||||||
Distributions to Shareholders From: | ||||||||||||||||||||||||
Distributable earnings: | ||||||||||||||||||||||||
Class A | (18,526 | ) | (44,177 | ) | (11,744 | ) | (80,101 | ) | (194,812 | ) | (210,005 | ) | ||||||||||||
Class C | (4,497 | ) | (6,103 | ) | (287 | ) | (21,830 | ) | (5,382 | ) | (5,251 | ) | ||||||||||||
Class R | (135,904 | ) | (150,738 | ) | – | – | (102 | ) | (292 | ) | ||||||||||||||
Institutional Service Class | (1,479 | ) | (927 | ) | (172,288 | ) | (676,038 | ) | (613 | ) | (618 | ) | ||||||||||||
Institutional Class | (1,863,463 | ) | (1,069,872 | ) | (260,575 | ) | (208,884 | ) | (1,863,887 | ) | (2,012,214 | ) | ||||||||||||
Change in net assets from shareholder distributions | (2,023,869 | ) | (1,271,817 | ) | (444,894 | ) | (986,853 | ) | (2,064,796 | ) | (2,228,380 | ) | ||||||||||||
Change in net assets from capital transactions | 3,508,099 | 25,349,881 | 8,688,209 | (3,534,985 | ) | (4,736,370 | ) | (4,670,234 | ) | |||||||||||||||
Change in net assets | 529,071 | 27,957,703 | 9,021,996 | (3,932,961 | ) | (6,091,164 | ) | (1,810,849 | ) | |||||||||||||||
Net Assets: | ||||||||||||||||||||||||
Beginning of year | 51,876,720 | 23,919,017 | 12,753,145 | 16,686,106 | 71,065,396 | 72,876,245 | ||||||||||||||||||
End of year | $ | 52,405,791 | $ | 51,876,720 | $ | 21,775,141 | $ | 12,753,145 | $ | 64,974,232 | $ | 71,065,396 |
(a) | Effective February 28, 2020, the Class R had zero assets. On February 28, 2020, the Aberdeen Intermediate Municipal Income Fund ceased offering Class R Shares. |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 59 |
Statements of Changes in Net Assets (continued)
Aberdeen Emerging Markets Debt Fund | Aberdeen Global Absolute Return Strategies Fund | Aberdeen Intermediate Municipal Income Fund | ||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Proceeds from shares issued | $ | 352,813 | $ | 629,322 | $ | 479,659 | $ | 1,015,152 | $ | 168,732 | $ | 984,311 | ||||||||||||
Dividends reinvested | 17,316 | 44,177 | 11,491 | 74,465 | 136,429 | 147,688 | ||||||||||||||||||
Cost of shares redeemed | (898,944 | ) | (945,566 | ) | (230,065 | ) | (1,364,677 | ) | (1,018,550 | ) | (1,036,703 | ) | ||||||||||||
Total Class A | (528,815 | ) | (272,067 | ) | 261,085 | (275,060 | ) | (713,389 | ) | 95,296 | ||||||||||||||
Class C Shares | ||||||||||||||||||||||||
Proceeds from shares issued | 159,820 | 9,000 | 591,129 | 155,601 | 38,410 | 127,075 | ||||||||||||||||||
Dividends reinvested | 4,497 | 5,483 | 287 | 21,830 | 5,363 | 5,064 | ||||||||||||||||||
Cost of shares redeemed | (122,537 | ) | (222,174 | ) | (70,992 | ) | (299,574 | ) | (21,015 | ) | (167,988 | ) | ||||||||||||
Total Class C | 41,780 | (207,691 | ) | 520,424 | (122,143 | ) | 22,758 | (35,849 | ) | |||||||||||||||
Class R Shares | ||||||||||||||||||||||||
Proceeds from shares issued | 463,579 | 880,349 | – | – | – | – | ||||||||||||||||||
Dividends reinvested | 135,904 | 150,738 | – | – | 81 | 289 | ||||||||||||||||||
Cost of shares redeemed (b) | (1,102,856 | ) | (863,123 | ) | – | – | (11,652 | ) | – | |||||||||||||||
Total Class R | (503,373 | ) | 167,964 | – | – | (11,571 | ) | 289 | ||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||
Proceeds from shares issued | 63,322 | 17,067 | 630,476 | 1,189,425 | 20,956 | 10,502 | ||||||||||||||||||
Dividends reinvested | 1,479 | 927 | 169,159 | 665,084 | 582 | 590 | ||||||||||||||||||
Cost of shares redeemed | (5,359 | ) | (15,891 | ) | (1,691,964 | ) | (2,430,439 | ) | (19,111 | ) | (10,533 | ) | ||||||||||||
Total Institutional Service Class | 59,442 | 2,103 | (892,329 | ) | (575,930 | ) | 2,427 | 559 | ||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Proceeds from shares issued | 9,083,124 | 26,890,511 | 11,383,780 | 2,911,095 | 1,689,260 | 1,496,688 | ||||||||||||||||||
Dividends reinvested | 1,832,746 | 1,054,294 | 260,091 | 208,624 | 1,499,054 | 1,591,645 | ||||||||||||||||||
Cost of shares redeemed | (6,476,805 | ) | (2,285,233 | ) | (2,844,842 | ) | (5,681,571 | ) | (7,224,909 | ) | (7,818,862 | ) | ||||||||||||
Total Institutional Class | 4,439,065 | 25,659,572 | 8,799,029 | (2,561,852 | ) | (4,036,595 | ) | (4,730,529 | ) | |||||||||||||||
Change in net assets from capital transactions: | $ | 3,508,099 | $ | 25,349,881 | $ | 8,688,209 | $ | (3,534,985 | ) | $ | (4,736,370 | ) | $ | (4,670,234 | ) |
(b) Includes redemption fees, if any.
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
60 | 2020 Annual Report |
Statements of Changes in Net Assets (concluded)
Aberdeen Emerging Markets Debt Fund | Aberdeen Global Absolute Return Strategies Fund | Aberdeen Intermediate Municipal Income Fund | ||||||||||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||||||||
SHARE TRANSACTIONS: | ||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Issued | 37,203 | 67,261 | 47,338 | 101,495 | 17,181 | 100,854 | ||||||||||||||||||
Reinvested | 1,819 | 4,822 | 1,142 | 7,635 | 13,932 | 15,090 | ||||||||||||||||||
Redeemed | (93,968 | ) | (101,508 | ) | (22,856 | ) | (137,563 | ) | (103,981 | ) | (106,227 | ) | ||||||||||||
Total Class A Shares | (54,946 | ) | (29,425 | ) | 25,624 | (28,433 | ) | (72,868 | ) | 9,717 | ||||||||||||||
Class C Shares | ||||||||||||||||||||||||
Issued | 16,467 | 972 | 58,660 | 15,615 | 3,885 | 12,905 | ||||||||||||||||||
Reinvested | 478 | 605 | 29 | 2,314 | 549 | 520 | ||||||||||||||||||
Redeemed | (12,960 | ) | (24,294 | ) | (7,137 | ) | (31,141 | ) | (2,133 | ) | (17,302 | ) | ||||||||||||
Total Class C Shares | 3,985 | (22,717 | ) | 51,552 | (13,212 | ) | 2,301 | (3,877 | ) | |||||||||||||||
Class R Shares | ||||||||||||||||||||||||
Issued | 49,525 | 93,571 | – | – | – | – | ||||||||||||||||||
Reinvested | 14,469 | 16,470 | – | – | 9 | 29 | ||||||||||||||||||
Redeemed | (121,144 | ) | (92,674 | ) | – | – | (1,150 | ) | – | |||||||||||||||
Total Class R Shares | (57,150 | ) | 17,367 | – | – | (1,141 | ) | 29 | ||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||
Issued | 6,558 | 1,728 | 62,094 | 118,081 | 2,067 | 1,093 | ||||||||||||||||||
Reinvested | 157 | 100 | 16,748 | 67,724 | 59 | 60 | ||||||||||||||||||
Redeemed | (590 | ) | (1,607 | ) | (166,979 | ) | (242,720 | ) | (2,068 | ) | (1,095 | ) | ||||||||||||
Total Institutional Service Class Shares | 6,125 | 221 | (88,137 | ) | (56,915 | ) | 58 | 58 | ||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Issued | 967,952 | 2,831,215 | 1,110,411 | 285,833 | 172,791 | 152,144 | ||||||||||||||||||
Reinvested | 194,571 | 112,855 | 25,574 | 21,037 | 152,982 | 162,611 | ||||||||||||||||||
Redeemed | (719,093 | ) | (252,763 | ) | (275,955 | ) | (550,590 | ) | (737,200 | ) | (800,086 | ) | ||||||||||||
Total Institutional Class Shares | 443,430 | 2,691,307 | 860,030 | (243,720 | ) | (411,427 | ) | (485,331 | ) | |||||||||||||||
Total change in shares: | 341,444 | 2,656,753 | 849,069 | (342,280 | ) | (483,077 | ) | (479,404 | ) |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 61 |
Statements of Changes in Net Assets
Aberdeen Short Duration High Yield Municipal Fund | Aberdeen Ultra Short Municipal Income Fund | |||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||
FROM INVESTMENT ACTIVITIES: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 8,038,965 | $ | 7,120,956 | $ | 9,180,811 | $ | 13,720,944 | ||||||||
Net realized gain/(loss) from investments, futures contracts, swap contracts, forward foreign currency contracts and foreign currency transactions | (1,967,350 | ) | (3,381,742 | ) | 7,091 | 36,094 | ||||||||||
Net change in unrealized appreciation/(depreciation) on investments, futures contracts, swap contracts, forward foreign currency contracts and translation of assets and liabilities denominated in foreign currencies | (5,731,312 | ) | 7,239,466 | (628,850 | ) | 167,832 | ||||||||||
Changes in net assets resulting from operations | 340,303 | 10,978,680 | 8,559,052 | 13,924,870 | ||||||||||||
Distributions to Shareholders From: | ||||||||||||||||
Distributable earnings: | ||||||||||||||||
Class A | (713,836 | ) | (771,943 | ) | (1,509,615 | ) | (2,560,301 | ) | ||||||||
Class A1 | – | – | (437 | ) | (173 | ) | ||||||||||
Institutional Class | (7,291,360 | ) | (6,247,051 | ) | (7,684,814 | ) | (11,160,084 | ) | ||||||||
Change in net assets from shareholder distributions | (8,005,196 | ) | (7,018,994 | ) | (9,194,866 | ) | (13,720,558 | ) | ||||||||
Change in net assets from capital transactions | 42,940,733 | 46,090,794 | 307,268,709 | (140,354,568 | ) | |||||||||||
Change in net assets | 35,275,840 | 50,050,480 | 306,632,895 | (140,150,256 | ) | |||||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 257,293,446 | 207,242,966 | 885,416,587 | 1,025,566,843 | ||||||||||||
End of year | $ | 292,569,286 | $ | 257,293,446 | $ | 1,192,049,482 | $ | 885,416,587 |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
62 | 2020 Annual Report |
Statements of Changes in Net Assets (concluded)
Aberdeen Short Duration High Yield Municipal Fund | Aberdeen Ultra Short Municipal Income Fund | |||||||||||||||
Year Ended October 31, 2020 | Year Ended October 31, 2019 | Year Ended October 31, 2020 | Year Ended October 31, 2019 | |||||||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||
Class A Shares | ||||||||||||||||
Proceeds from shares issued | $ | 6,852,944 | $ | 9,352,935 | $ | 248,534,228 | $ | 130,426,011 | ||||||||
Dividends reinvested | 698,600 | 755,645 | 1,489,406 | 2,538,384 | ||||||||||||
Cost of shares redeemed | (11,919,000 | ) | (12,417,022 | ) | (191,270,157 | ) | (151,761,251 | ) | ||||||||
Total Class A | (4,367,456 | ) | (2,308,442 | ) | 58,753,477 | (18,796,856 | ) | |||||||||
Class A1 Shares | ||||||||||||||||
Proceeds from shares issued | – | – | 522,320 | 34,995 | ||||||||||||
Dividends reinvested | – | – | 436 | 172 | ||||||||||||
Total Class A1 | – | – | 522,756 | 35,167 | ||||||||||||
Institutional Class Shares | ||||||||||||||||
Proceeds from shares issued | 156,905,352 | 133,949,625 | 951,189,708 | 374,732,383 | ||||||||||||
Dividends reinvested | 5,941,741 | 5,338,463 | 6,439,517 | 9,055,828 | ||||||||||||
Cost of shares redeemed | (115,538,904 | ) | (90,888,852 | ) | (709,636,749 | ) | (505,381,090 | ) | ||||||||
Total Institutional Class | 47,308,189 | 48,399,236 | 247,992,476 | (121,592,879 | ) | |||||||||||
Change in net assets from capital transactions: | $ | 42,940,733 | $ | 46,090,794 | $ | 307,268,709 | $ | (140,354,568 | ) | |||||||
SHARE TRANSACTIONS: | ||||||||||||||||
Class A Shares | ||||||||||||||||
Issued | 673,668 | 917,107 | 24,628,361 | 12,916,211 | ||||||||||||
Reinvested | 69,375 | 74,409 | 147,584 | 251,376 | ||||||||||||
Redeemed | (1,190,504 | ) | (1,224,785 | ) | (18,956,286 | ) | (15,029,671 | ) | ||||||||
Total Class A Shares | (447,461 | ) | (233,269 | ) | 5,819,659 | (1,862,084 | ) | |||||||||
Class A1 Shares | ||||||||||||||||
Issued | – | – | 51,715 | 3,465 | ||||||||||||
Reinvested | – | – | 43 | 17 | ||||||||||||
Total Class A1 Shares | – | – | 51,758 | 3,482 | ||||||||||||
Institutional Class Shares | ||||||||||||||||
Issued | 15,559,801 | 13,180,175 | 94,804,201 | 37,323,942 | ||||||||||||
Reinvested | 590,112 | 525,210 | 641,628 | 901,975 | ||||||||||||
Redeemed | (11,531,243 | ) | (8,955,607 | ) | (70,726,848 | ) | (50,336,762 | ) | ||||||||
Total Institutional Class Shares | 4,618,670 | 4,749,778 | 24,718,981 | (12,110,845 | ) | |||||||||||
Total change in shares: | 4,171,209 | 4,516,509 | 30,590,398 | (13,969,447 | ) |
Amounts listed as "–" are $0 or round to $0.
See accompanying Notes to Financial Statements.
2020 Annual Report | 63 |
Financial Highlights
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Emerging Markets Debt Fund
Investment Activities | Distributions | |||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Tax Return of Capital | Total Distributions | Net Asset Value, End of Period | |||||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | $ 9.72 | $0.43 | $(0.58 | ) | $(0.15 | ) | $(0.33 | ) | $ – | $(0.33 | ) | $ 9.24 | ||||||||||||||||||||
Year Ended October 31, 2019 | 8.97 | 0.50 | 0.62 | 1.12 | (0.37 | ) | – | (0.37 | ) | 9.72 | ||||||||||||||||||||||
Year Ended October 31, 2018 | 10.27 | 0.47 | (1.26 | ) | (0.79 | ) | (0.51 | ) | – | (0.51 | ) | 8.97 | ||||||||||||||||||||
Year Ended October 31, 2017 | 9.73 | 0.49 | 0.30 | 0.79 | (0.25 | ) | – | (0.25 | ) | 10.27 | ||||||||||||||||||||||
Year Ended October 31, 2016 | 8.77 | 0.57 | 0.65 | 1.22 | (0.22 | ) | (0.04 | ) | (0.26 | ) | 9.73 | |||||||||||||||||||||
Class C Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.69 | 0.36 | (0.58 | ) | (0.22 | ) | (0.28 | ) | – | (0.28 | ) | 9.19 | ||||||||||||||||||||
Year Ended October 31, 2019 | 8.90 | 0.44 | 0.64 | 1.08 | (0.29 | ) | – | (0.29 | ) | 9.69 | ||||||||||||||||||||||
Year Ended October 31, 2018 | 10.22 | 0.43 | (1.28 | ) | (0.85 | ) | (0.47 | ) | – | (0.47 | ) | 8.90 | ||||||||||||||||||||
Year Ended October 31, 2017 | 9.68 | 0.44 | 0.29 | 0.73 | (0.19 | ) | – | (0.19 | ) | 10.22 | ||||||||||||||||||||||
Year Ended October 31, 2016 | 8.76 | 0.57 | 0.59 | 1.16 | (0.21 | ) | (0.03 | ) | (0.24 | ) | 9.68 | |||||||||||||||||||||
Class R Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.69 | 0.39 | (0.57 | ) | (0.18 | ) | (0.32 | ) | – | (0.32 | ) | 9.19 | ||||||||||||||||||||
Year Ended October 31, 2019 | 8.93 | 0.47 | 0.64 | 1.11 | (0.35 | ) | – | (0.35 | ) | 9.69 | ||||||||||||||||||||||
Year Ended October 31, 2018 | 10.25 | 0.46 | (1.28 | ) | (0.82 | ) | (0.50 | ) | – | (0.50 | ) | 8.93 | ||||||||||||||||||||
Year Ended October 31, 2017 | 9.72 | 0.47 | 0.30 | 0.77 | (0.24 | ) | – | (0.24 | ) | 10.25 | ||||||||||||||||||||||
Year Ended October 31, 2016 | 8.77 | 0.51 | 0.69 | 1.20 | (0.22 | ) | (0.03 | ) | (0.25 | ) | 9.72 | |||||||||||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.76 | 0.46 | (0.59 | ) | (0.13 | ) | (0.38 | ) | – | (0.38 | ) | 9.25 | ||||||||||||||||||||
Year Ended October 31, 2019 | 8.99 | 0.53 | 0.65 | 1.18 | (0.41 | ) | – | (0.41 | ) | 9.76 | ||||||||||||||||||||||
Year Ended October 31, 2018 | 10.30 | 0.52 | (1.28 | ) | (0.76 | ) | (0.55 | ) | – | (0.55 | ) | 8.99 | ||||||||||||||||||||
Year Ended October 31, 2017 | 9.75 | 0.54 | 0.30 | 0.84 | (0.29 | ) | – | (0.29 | ) | 10.30 | ||||||||||||||||||||||
Year Ended October 31, 2016 | 8.78 | 0.64 | 0.61 | 1.25 | (0.24 | ) | (0.04 | ) | (0.28 | ) | 9.75 | |||||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.76 | 0.46 | (0.58 | ) | (0.12 | ) | (0.38 | ) | – | (0.38 | ) | 9.26 | ||||||||||||||||||||
Year Ended October 31, 2019 | 8.99 | 0.51 | 0.67 | 1.18 | (0.41 | ) | – | (0.41 | ) | 9.76 | ||||||||||||||||||||||
Year Ended October 31, 2018 | 10.29 | 0.52 | (1.28 | ) | (0.76 | ) | (0.54 | ) | – | (0.54 | ) | 8.99 | ||||||||||||||||||||
Year Ended October 31, 2017 | 9.74 | 0.54 | 0.29 | 0.83 | (0.28 | ) | – | (0.28 | ) | 10.29 | ||||||||||||||||||||||
Year Ended October 31, 2016 | 8.77 | 0.65 | 0.60 | 1.25 | (0.24 | ) | (0.04 | ) | (0.28 | ) | 9.74 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(d) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(e) | Includes interest expense that amounts to less than 0.01%. |
Amounts listed as "–" are $0 or round to $0
See accompanying Notes to Financial Statements.
64 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Emerging Markets Debt Fund (concluded)
Ratios/Supplemental Data | |||||||||||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover (d) | ||||||||||||||||
(1.53 | %) | $ 302 | 1.02 | %(e) | 1.44 | %(e) | 4.57 | % | 63.45 | % | |||||||||||
12.81 | % | 852 | 1.07 | % | 1.61 | % | 5.37 | % | 71.06 | % | |||||||||||
(7.91 | %) | 1,050 | 1.31 | % | 1.93 | % | 4.78 | % | 56.02 | % | |||||||||||
8.21 | % | 1,987 | 1.37 | % | 2.15 | % | 4.85 | % | 64.37 | % | |||||||||||
14.45 | %(f) | 247 | 1.20 | %(e) | 1.79 | %(e) | 5.88 | % | 103.26 | % | |||||||||||
(2.34 | %) | 141 | 1.65 | %(e) | 2.16 | %(e) | 3.90 | % | 63.45 | % | |||||||||||
12.36 | % | 110 | 1.70 | % | 2.31 | % | 4.75 | % | 71.06 | % | |||||||||||
(8.58 | %) | 304 | 1.90 | % | 2.58 | % | 4.52 | % | 56.02 | % | |||||||||||
7.57 | % | 261 | 1.90 | % | 2.75 | % | 4.46 | % | 64.37 | % | |||||||||||
13.62 | %(f) | 390 | 1.90 | %(e) | 2.53 | %(e) | 6.39 | % | 103.26 | % | |||||||||||
(1.94 | %) | 3,572 | 1.30 | %(e) | 1.72 | %(e) | 4.28 | % | 63.45 | % | |||||||||||
12.69 | % | 4,318 | 1.31 | % | 1.85 | % | 5.05 | % | 71.06 | % | |||||||||||
(8.25 | %) | 3,826 | 1.55 | % | 2.17 | % | 4.79 | % | 56.02 | % | |||||||||||
7.96 | % | 2,934 | 1.56 | % | 2.34 | % | 4.72 | % | 64.37 | % | |||||||||||
14.22 | %(f) | 1,493 | 1.40 | %(e) | 1.99 | %(e) | 5.04 | % | 103.26 | % | |||||||||||
(1.36 | %) | 79 | 0.65 | % | 1.07 | % | 4.96 | % | 63.45 | % | |||||||||||
13.43 | % | 24 | 0.68 | % | 1.22 | % | 5.66 | % | 71.06 | % | |||||||||||
(7.63 | %) | 20 | 0.89 | % | 1.52 | % | 5.38 | % | 56.02 | % | |||||||||||
8.67 | % | 22 | 0.90 | % | 1.68 | % | 5.43 | % | 64.37 | % | |||||||||||
14.76 | %(f) | 20 | 0.90 | %(e) | 1.49 | %(e) | 7.01 | % | 103.26 | % | |||||||||||
(1.29 | %) | 48,312 | 0.65 | %(e) | 1.10 | %(e) | 4.95 | % | 63.45 | % | |||||||||||
13.40 | % | 46,573 | 0.67 | % | 1.25 | % | 5.43 | % | 71.06 | % | |||||||||||
(7.58 | %) | 18,720 | 0.90 | % | 1.58 | % | 5.41 | % | 56.02 | % | |||||||||||
8.62 | % | 18,365 | 0.90 | % | 1.76 | % | 5.42 | % | 64.37 | % | |||||||||||
14.78 | %(f) | 16,825 | 0.90 | %(e) | 1.49 | %(e) | 7.37 | % | 103.26 | % |
(f) | Included within Net Realized and Unrealized Gains (Losses) on Investments per share is a payment from affiliate. If such payment was excluded, the total return would have been 14.33% for Class A Shares, 13.15% for Class C Shares, 13.87% for Class R Shares, 14.41% for Institutional Service Class Shares and 14.31% for Institutional Class Shares. |
2020 Annual Report 65
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Global Absolute Return Strategies Fund
Investment Activities | Distributions | |||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(a) | Net Realized and Unrealized Gains on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | |||||||||||||||||
Class A Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | $ 10.13 | $ 0.04 | $0.29 | $0.33 | $ (0.17 | ) | $ – | $ (0.17 | ) | $10.29 | ||||||||||||||
Year Ended October 31, 2019 | 10.41 | 0.17 | 0.25 | 0.42 | (0.60 | ) | (0.10 | ) | (0.70 | ) | 10.13 | |||||||||||||
Year Ended October 31, 2018 | 10.22 | 0.17 | 0.05 | 0.22 | – | (0.03 | ) | (0.03 | ) | 10.41 | ||||||||||||||
Year Ended October 31, 2017 | 10.18 | 0.13 | 0.02 | 0.15 | – | (0.11 | ) | (0.11 | ) | 10.22 | ||||||||||||||
Year Ended October 31, 2016 | 9.41 | 0.13 | (f) | 0.67 | 0.80 | (0.03 | ) | – | (0.03 | ) | 10.18 | |||||||||||||
Class C Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.87 | (0.07 | ) | 0.32 | 0.25 | (0.02 | ) | – | (0.02 | ) | 10.10 | |||||||||||||
Year Ended October 31, 2019 | 10.09 | 0.10 | 0.24 | 0.34 | (0.46 | ) | (0.10 | ) | (0.56 | ) | 9.87 | |||||||||||||
Year Ended October 31, 2018 | 9.97 | 0.09 | 0.06 | 0.15 | – | (0.03 | ) | (0.03 | ) | 10.09 | ||||||||||||||
Year Ended October 31, 2017 | 10.01 | 0.06 | 0.01 | 0.07 | – | (0.11 | ) | (0.11 | ) | 9.97 | ||||||||||||||
Year Ended October 31, 2016 | 9.30 | 0.05 | (f) | 0.68 | 0.73 | (0.02 | ) | – | (0.02 | ) | 10.01 | |||||||||||||
Institutional Service Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 10.20 | 0.06 | 0.29 | 0.35 | (0.20 | ) | – | (0.20 | ) | 10.35 | ||||||||||||||
Year Ended October 31, 2019 | 10.47 | 0.19 | 0.27 | 0.46 | (0.63 | ) | (0.10 | ) | (0.73 | ) | 10.20 | |||||||||||||
Year Ended October 31, 2018 | 10.26 | 0.18 | 0.06 | 0.24 | – | (0.03 | ) | (0.03 | ) | 10.47 | ||||||||||||||
Year Ended October 31, 2017 | 10.21 | 0.15 | 0.01 | 0.16 | – | (0.11 | ) | (0.11 | ) | 10.26 | ||||||||||||||
Year Ended October 31, 2016 | 9.42 | 0.14 | (f) | 0.68 | 0.82 | (0.03 | ) | – | (0.03 | ) | 10.21 | |||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||
Year Ended October 31, 2020 | 10.30 | 0.08 | 0.26 | 0.34 | (0.21 | ) | – | (0.21 | ) | 10.43 | ||||||||||||||
Year Ended October 31, 2019 | 10.55 | 0.20 | 0.27 | 0.47 | (0.62 | ) | (0.10 | ) | (0.72 | ) | 10.30 | |||||||||||||
Year Ended October 31, 2018 | 10.33 | 0.20 | 0.05 | 0.25 | – | (0.03 | ) | (0.03 | ) | 10.55 | ||||||||||||||
Year Ended October 31, 2017 | 10.26 | 0.16 | 0.02 | 0.18 | – | (0.11 | ) | (0.11 | ) | 10.33 | ||||||||||||||
Year Ended October 31, 2016 | 9.46 | 0.16 | (f) | 0.68 | 0.84 | (0.04 | ) | – | (0.04 | ) | 10.26 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(d) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(e) | Interest expense is less than 0.001%. |
Amounts listed as "–" are $0 or round to $0
See accompanying Notes to Financial Statements.
66 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Global Absolute Return Strategies Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover (d) | |||||||||||||||
3.26 | % | $ 1,078 | 0.97 | %(e) | 2.52 | %(e) | 0.35 | % | 238.35 | % | ||||||||||
4.41 | % | 802 | 1.18 | %(e) | 3.04 | %(e) | 1.69 | % | 53.05 | % | ||||||||||
2.10 | % | 1,119 | 1.12 | %(e) | 2.79 | %(e) | 1.60 | % | 62.39 | % | ||||||||||
1.53 | % | 806 | 1.17 | %(e) | 2.74 | %(e) | 1.29 | % | 91.26 | % | ||||||||||
8.55 | %(f) | 1,824 | 1.13 | %(e) | 2.34 | %(e) | 1.38 | %(f) | 219.22 | % | ||||||||||
2.54 | % | 664 | 1.66 | %(e) | 3.30 | %(e) | (0.69 | %) | 238.35 | % | ||||||||||
3.68 | % | 141 | 1.86 | %(e) | 3.83 | %(e) | 1.02 | % | 53.05 | % | ||||||||||
1.45 | % | 277 | 1.85 | %(e) | 3.65 | %(e) | 0.86 | % | 62.39 | % | ||||||||||
0.75 | %(g) | 247 | 1.85 | %(e) | 3.53 | %(e) | 0.62 | % | 91.26 | % | ||||||||||
7.87 | %(f) | 403 | 1.85 | %(e) | 3.15 | %(e) | 0.52 | %(f) | 219.22 | % | ||||||||||
3.45 | %(g) | 8,148 | 0.80 | %(e) | 2.35 | %(e) | 0.62 | % | 238.35 | % | ||||||||||
4.72 | % | 8,934 | 1.00 | %(e) | 2.86 | %(e) | 1.86 | % | 53.05 | % | ||||||||||
2.29 | % | 9,768 | 0.96 | %(e) | 2.63 | %(e) | 1.75 | % | 62.39 | % | ||||||||||
1.62 | % | 10,553 | 1.02 | %(e) | 2.59 | %(e) | 1.47 | % | 91.26 | % | ||||||||||
8.76 | %(f) | 10,940 | 1.01 | %(e) | 2.22 | %(e) | 1.43 | %(f) | 219.22 | % | ||||||||||
3.34 | %(g) | 11,885 | 0.66 | %(e) | 2.24 | %(e) | 0.74 | % | 238.35 | % | ||||||||||
4.82 | %(g) | 2,876 | 0.86 | %(e) | 2.84 | %(e) | 1.98 | % | 53.05 | % | ||||||||||
2.47 | % | 5,521 | 0.85 | %(e) | 2.70 | %(e) | 1.94 | % | 62.39 | % | ||||||||||
1.81 | %(g) | 1,685 | 0.85 | %(e) | 2.56 | %(e) | 1.60 | % | 91.26 | % | ||||||||||
8.87 | %(f) | 2,583 | 0.85 | %(e) | 2.12 | %(e) | 1.61 | %(f) | 219.22 | % |
(f) | Included within Net Investment Income per share, Total Return, and Ratio of Net Investment Income to Average Net Assets are the effects of a one-time reimbursement for overbilling of prior years' custodian out-of-pocket fees. If such amounts were excluded, the impact to Net Investment Income per share would be $0.01, $0.01, $0.01 and $0.01, the impact to Total Return would be 0.11%, 0.11%, 0.11% and 0.11%, and the impact to Ratio of Net Investment Income to Average Net Assets would be, 0.20%, 0.11%, 0.09% and 0.16% for Class A, Class C, Institutional Service Class and Institutional Class, respectively. | |
(g) | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
2020 Annual Report 67
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Intermediate Municipal Income Fund
Investment Activities | Distributions | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (a) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | ||||||||||||||||||||||
Class A Shares | |||||||||||||||||||||||||||||
Year Ended October 31, 2020 | $ 9.92 | $0.26 | $ (0.18 | ) | $ 0.08 | $(0.26 | ) | $(0.01 | ) | $(0.27 | ) | $ 9.73 | |||||||||||||||||
Year Ended October 31, 2019 | 9.54 | 0.28 | 0.38 | 0.66 | (0.28 | ) | – | (f) | (0.28 | ) | 9.92 | ||||||||||||||||||
Year Ended October 31, 2018 | 9.89 | 0.29 | (0.35 | ) | (0.06 | ) | (0.29 | ) | – | (0.29 | ) | 9.54 | |||||||||||||||||
Year Ended October 31, 2017 | 10.11 | 0.29 | (0.22 | ) | 0.07 | (0.29 | ) | – | (0.29 | ) | 9.89 | ||||||||||||||||||
Year Ended October 31, 2016 | 10.19 | 0.30 | (0.08 | ) | 0.22 | (0.30 | ) | – | (0.30 | ) | 10.11 | ||||||||||||||||||
Class C Shares | |||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.91 | 0.18 | (0.19 | ) | (0.01 | ) | (0.18 | ) | (0.01 | ) | (0.19 | ) | 9.71 | ||||||||||||||||
Year Ended October 31, 2019 | 9.52 | 0.21 | 0.39 | 0.60 | (0.21 | ) | – | (f) | (0.21 | ) | 9.91 | ||||||||||||||||||
Year Ended October 31, 2018 | 9.87 | 0.21 | (0.35 | ) | (0.14 | ) | (0.21 | ) | – | (0.21 | ) | 9.52 | |||||||||||||||||
Year Ended October 31, 2017 | 10.09 | 0.22 | (0.22 | ) | – | (0.22 | ) | – | (0.22 | ) | 9.87 | ||||||||||||||||||
Year Ended October 31, 2016 | 10.18 | 0.23 | (0.09 | ) | 0.14 | (0.23 | ) | – | (0.23 | ) | 10.09 | ||||||||||||||||||
Institutional Service Class Shares | |||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.93 | 0.28 | (0.18 | ) | 0.10 | (0.28 | ) | (0.01 | ) | (0.29 | ) | 9.74 | |||||||||||||||||
Year Ended October 31, 2019 | 9.54 | 0.30 | 0.40 | 0.70 | (0.31 | ) | – | (f) | (0.31 | ) | 9.93 | ||||||||||||||||||
Year Ended October 31, 2018 | 9.89 | 0.31 | (0.35 | ) | (0.04 | ) | (0.31 | ) | – | (0.31 | ) | 9.54 | |||||||||||||||||
Year Ended October 31, 2017 | 10.12 | 0.31 | (0.23 | ) | 0.08 | (0.31 | ) | – | (0.31 | ) | 9.89 | ||||||||||||||||||
Year Ended October 31, 2016 | 10.20 | 0.33 | (0.08 | ) | 0.25 | (0.33 | ) | – | (0.33 | ) | 10.12 | ||||||||||||||||||
Institutional Class Shares | |||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 9.93 | 0.28 | (0.18 | ) | 0.10 | (0.28 | ) | (0.01 | ) | (0.29 | ) | 9.74 | |||||||||||||||||
Year Ended October 31, 2019 | 9.55 | 0.30 | 0.39 | 0.69 | (0.31 | ) | – | (f) | (0.31 | ) | 9.93 | ||||||||||||||||||
Year Ended October 31, 2018 | 9.90 | 0.31 | (0.35 | ) | (0.04 | ) | (0.31 | ) | – | (0.31 | ) | 9.55 | |||||||||||||||||
Year Ended October 31, 2017 | 10.12 | 0.32 | (0.23 | ) | 0.09 | (0.31 | ) | – | (0.31 | ) | 9.90 | ||||||||||||||||||
Year Ended October 31, 2016 | 10.20 | 0.33 | (0.08 | ) | 0.25 | (0.33 | ) | – | (0.33 | ) | 10.12 |
(a) | Net investment income/(loss) is based on average shares outstanding during the period. |
(b) | Excludes sales charge. |
(c) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(d) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
Amounts listed as "–" are $0 or round to $0
See accompanying Notes to Financial Statements.
68 | 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Intermediate Municipal Income Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (b) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (c) | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover (d) | |||||||||||
0.83 | % | $ 6,670 | 0.76 | %(e) | 1.09 | %(e) | 2.63 | % | 55.63 | % | ||||||
7.05 | % | 7,526 | 0.76 | %(e) | 1.16 | %(e) | 2.84 | % | 58.33 | % | ||||||
(0.65 | %) | 7,141 | 0.80 | % | 1.08 | % | 2.95 | % | 14.38 | % | ||||||
0.72 | % | 9,084 | 0.88 | %(e) | 1.05 | %(e) | 2.92 | % | 16.25 | % | ||||||
2.19 | % | 10,798 | 0.88 | % | 1.03 | % | 2.96 | % | 10.71 | % | ||||||
(0.01 | %) | 270 | 1.50 | %(e) | 1.87 | %(e) | 1.89 | % | 55.63 | % | ||||||
6.39 | % | 252 | 1.50 | %(e) | 1.93 | %(e) | 2.12 | % | 58.33 | % | ||||||
(1.39 | %) | 279 | 1.55 | % | 1.87 | % | 2.20 | % | 14.38 | % | ||||||
(0.02 | %) | 542 | 1.62 | %(e) | 1.83 | %(e) | 2.21 | % | 16.25 | % | ||||||
1.36 | % | 851 | 1.62 | % | 1.82 | % | 2.24 | % | 10.71 | % | ||||||
1.09 | % | 20 | 0.50 | %(e) | 0.83 | %(e) | 2.87 | % | 55.63 | % | ||||||
7.43 | % | 19 | 0.50 | %(e) | 0.90 | %(e) | 3.10 | % | 58.33 | % | ||||||
(0.40 | %) | 18 | 0.54 | % | 0.82 | % | 3.21 | % | 14.38 | % | ||||||
0.79 | % | 18 | 0.69 | %(e) | 0.86 | %(e) | 3.10 | % | 16.25 | % | ||||||
2.48 | % | 28 | 0.62 | % | 0.77 | % | 3.22 | % | 10.71 | % | ||||||
1.10 | % | 58,015 | 0.50 | %(e) | 0.84 | %(e) | 2.89 | % | 55.63 | % | ||||||
7.32 | % | 63,256 | 0.50 | %(e) | 0.90 | %(e) | 3.11 | % | 58.33 | % | ||||||
(0.39 | %) | 65,428 | 0.54 | % | 0.83 | % | 3.21 | % | 14.38 | % | ||||||
0.98 | % | 71,362 | 0.62 | %(e) | 0.79 | %(e) | 3.18 | % | 16.25 | % | ||||||
2.47 | % | 79,279 | 0.62 | % | 0.77 | % | 3.23 | % | 10.71 | % |
(e) | Interest expense is less than 0.001%. |
(f) | Less than $0.005 per share. |
2020 Annual Report | 69 |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Short Duration High Yield Municipal Fund
Investment Activities | Distributions | |||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Tax Return of Capital | Total Distributions | Redemption Fees | Net Asset Value, End of Period | ||||||||||||||||||||||
Class A Shares | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | $10.25 | $0.29 | (d) | $(0.27 | ) | $0.02 | $(0.28 | ) | $ – | $(0.28 | ) | $ – | $ 9.99 | |||||||||||||||||
Year Ended October 31, 2019 | 10.07 | 0.30 | (d) | 0.18 | 0.48 | (0.30 | ) | – | (0.30 | ) | – | 10.25 | ||||||||||||||||||
Year Ended October 31, 2018(f) | 10.24 | 0.31 | (d) | (0.17 | ) | 0.14 | (0.31 | ) | 0.00 | (g) | (0.31 | ) | 0.00 | (g) | 10.07 | |||||||||||||||
Year Ended October 31, 2017 | 10.34 | 0.28 | (0.10 | ) | 0.18 | (0.28 | ) | – | (0.28 | ) | 0.00 | (g) | 10.24 | |||||||||||||||||
Year Ended October 31, 2016 | 10.29 | 0.32 | 0.04 | 0.36 | (0.31 | ) | – | (0.31 | ) | 0.00 | (g) | 10.34 | ||||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||||||||||||
Year Ended October 31, 2020 | 10.25 | 0.31 | (d) | (0.26 | ) | 0.05 | (0.31 | ) | – | (0.31 | ) | – | 9.99 | |||||||||||||||||
Year Ended October 31, 2019 | 10.07 | 0.32 | (d) | 0.18 | 0.50 | (0.32 | ) | – | (0.32 | ) | – | 10.25 | ||||||||||||||||||
Year Ended October 31, 2018(f) | 10.24 | 0.33 | (d) | (0.16 | ) | 0.17 | (0.34 | ) | 0.00 | (g) | (0.34 | ) | 0.00 | (g) | 10.07 | |||||||||||||||
Year Ended October 31, 2017 | 10.34 | 0.31 | (0.10 | ) | 0.21 | (0.31 | ) | – | (0.31 | ) | 0.00 | (g) | 10.24 | |||||||||||||||||
Year Ended October 31, 2016 | 10.29 | 0.34 | 0.05 | 0.39 | (0.34 | ) | – | (0.34 | ) | 0.00 | (g) | 10.34 |
(a) | Excludes sales charge. |
(b) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(c) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(d) | Net investment income/(loss) is based on average shares outstanding during the period. |
(e) | Includes interest expense that amounts to less than 0.01% for the years ended October 31, 2020 and October 31, 2017. Includes interest expense that amounts to 0.01% for the years ended October 31, 2018 and October 31, 2016. |
Amounts listed as "–" are $0 or round to $0
See accompanying Notes to Financial Statements.
70 | 2020 Annual Report |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Short Duration High Yield Municipal Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (a) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (b) | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover (c) | |||||||||||
0.25 | % | $ 22,417 | 0.90 | %(e) | 1.12 | %(e) | 2.84 | % | 149.01 | % | ||||||
4.78 | % | 27,577 | 0.90 | % | 1.13 | % | 2.96 | % | 104.52 | % | ||||||
1.42 | % | 29,433 | 0.91 | %(e) | 1.11 | %(e) | 3.03 | % | 86.19 | % | ||||||
1.82 | % | 50,906 | 0.90 | %(e) | 1.09 | %(e) | 2.78 | % | 151.00 | % | ||||||
3.58 | % | 35,705 | 0.93 | %(e) | 1.12 | %(e) | 3.03 | % | 132.00 | % | ||||||
0.51 | % | 270,153 | 0.65 | %(e) | 0.87 | %(e) | 3.07 | % | 149.01 | % | ||||||
5.05 | % | 229,716 | 0.65 | %(e) | 0.90 | %(e) | 3.19 | % | 104.52 | % | ||||||
1.67 | % | 177,810 | 0.66 | %(e) | 0.87 | %(e) | 3.27 | % | 86.19 | % | ||||||
2.08 | % | 207,427 | 0.65 | %(e) | 0.84 | %(e) | 3.04 | % | 151.00 | % | ||||||
3.84 | % | 153,300 | 0.68 | %(e) | 0.88 | %(e) | 3.28 | % | 132.00 | % |
(f) | Beginning with the year ended October 31, 2018, the Fund was audited by KPMG LLP. Previous years were audited by a different independent registered public accounting firm. |
(g) | Less than $0.005 per share. |
2020 Annual Report | 71 |
Financial Highlights (continued)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Ultra Short Municipal Income Fund
Investment Activities | Distributions | |||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Redemption Fees | Net Asset Value, End of Period | |||||||||||||||
Class A Shares | ||||||||||||||||||||||
Year Ended October 31, 2020 | $ 10.10 | $0.07 | (d) | $ – | (e) | $0.07 | $(0.08 | ) | $(0.08 | ) | $ – | $10.09 | ||||||||||
Year Ended October 31, 2019 | 10.09 | 0.13 | (d) | 0.01 | 0.14 | (0.13 | ) | (0.13 | ) | – | 10.10 | |||||||||||
Year Ended October 31, 2018(g) | 10.09 | 0.11 | (d) | 0.00 | 0.11 | (0.11 | ) | (0.11 | ) | 0.00 | (e) | 10.09 | ||||||||||
Year Ended October 31, 2017 | 10.09 | 0.06 | (0.00 | )(e) | 0.06 | (0.06 | ) | (0.06 | ) | 0.00 | (e) | 10.09 | ||||||||||
Year Ended October 31, 2016 | 10.10 | 0.04 | (0.01 | ) | 0.03 | (0.04 | ) | (0.04 | ) | 0.00 | (e) | 10.09 | ||||||||||
Class A1 Shares | ||||||||||||||||||||||
Year Ended October 31, 2020 | 10.10 | 0.03 | (d) | 0.05 | 0.08 | (0.08 | ) | (0.08 | ) | – | 10.10 | |||||||||||
Year Ended October 31, 2019(h) | 10.10 | 0.08 | – | (e) | 0.08 | (0.08 | ) | (0.08 | ) | – | 10.10 | |||||||||||
Institutional Class Shares | ||||||||||||||||||||||
Year Ended October 31, 2020 | 10.04 | 0.10 | (d) | (0.01 | ) | 0.09 | (0.10 | ) | (0.10 | ) | – | 10.03 | ||||||||||
Year Ended October 31, 2019 | 10.04 | 0.15 | (d) | – | 0.15 | (0.15 | ) | (0.15 | ) | – | 10.04 | |||||||||||
Year Ended October 31, 2018(g) | 10.04 | 0.13 | (d) | 0.00 | 0.13 | (0.13 | ) | (0.13 | ) | 0.00 | (e) | 10.04 | ||||||||||
Year Ended October 31, 2017 | 10.04 | 0.09 | (0.00 | )(e) | 0.09 | (0.09 | ) | (0.09 | ) | 0.00 | (e) | 10.04 | ||||||||||
Year Ended October 31, 2016 | 10.04 | 0.06 | (0.00 | )(e) | 0.06 | (0.06 | ) | (0.06 | ) | 0.00 | (e) | 10.04 |
(a) | Excludes sales charge. |
(b) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(c) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(d) | Net investment income/(loss) is based on average shares outstanding during the period. |
(e) | Less than $0.005 per share. |
(f) | Includes interest expense that amounts to less than 0.01%. |
Amounts listed as "–" are $0 or round to $0
See accompanying Notes to Financial Statements.
72 | 2020 Annual Report |
Financial Highlights (concluded)
Selected Data for Each Share of Capital Outstanding Throughout the Periods Indicated
Aberdeen Ultra Short Municipal Income Fund (concluded)
Ratios/Supplemental Data | ||||||||||||||||
Total Return (a) | Net Assets at End of Period (000's) | Ratio of Expenses (Net of Reimbursements/ Waivers) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (b) | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover (c) | |||||||||||
0.69 | % | $263,068 | 0.70 | %(f) | 0.94 | %(f) | 0.72 | % | 299.40 | % | ||||||
1.36 | % | 204,501 | 0.70 | % | 0.95 | % | 1.25 | % | 231.49 | % | ||||||
1.09 | % | 223,255 | 0.70 | % | 0.92 | % | 1.08 | % | 177.63 | % | ||||||
0.62 | % | 211,265 | 0.69 | % | 0.90 | % | 0.62 | % | 214.00 | % | ||||||
0.29 | % | 206,259 | 0.68 | % | 0.99 | % | 0.39 | % | 143.00 | % | ||||||
0.79 | % | 558 | 0.70 | %(f) | 0.90 | %(f) | 0.34 | % | 299.40 | % | ||||||
0.81 | % | 35 | 0.70 | % | 0.94 | % | 1.13 | % | 231.49 | % | ||||||
0.94 | % | 928,424 | 0.45 | %(f) | 0.71 | %(f) | 0.98 | % | 299.40 | % | ||||||
1.51 | % | 680,881 | 0.45 | % | 0.72 | % | 1.50 | % | 231.49 | % | ||||||
1.34 | % | 802,312 | 0.45 | % | 0.67 | % | 1.32 | % | 177.63 | % | ||||||
0.87 | % | 896,624 | 0.44 | % | 0.65 | % | 0.86 | % | 214.00 | % | ||||||
0.64 | % | 905,843 | 0.43 | % | 0.74 | % | 0.64 | % | 143.00 | % |
(g) | Beginning with the year ended October 31, 2018, the Fund was audited by KPMG LLP. Previous years were audited by a different independent registered public accounting firm. |
(h) | For the period from February 28, 2019 (commencement of operations) through October 31, 2019. |
2020 Annual Report | 73 |
Notes to Financial Statements
October 31, 2020
1. Organization
Aberdeen Funds (the "Trust") was organized as a statutory trust under the laws of the state of Delaware by a Certificate of Trust filed on September 27, 2007 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. As of October 31, 2020, the Trust had authorized an unlimited number of shares of beneficial interest ("shares") without par value. As of October 31, 2020, the Trust operated nineteen (19) separate series, or mutual funds, each with its own investment objective(s) and strategies. This report contains the financial statements and financial highlights of the five (5) funds listed below (each a "Fund"; collectively, the "Funds"):
– | Aberdeen Emerging Markets Debt Fund ("Emerging Markets Debt Fund") |
– | Aberdeen Global Absolute Return Strategies Fund (formerly, Aberdeen Global Unconstrained Fixed Income Fund) ("Global Absolute Return Strategies Fund")* |
– | Aberdeen Intermediate Municipal Income Fund ("Intermediate Municipal Income Fund") |
– | Aberdeen Short Duration High Yield Municipal Fund ("Short Duration High Yield Municipal Fund") |
– | Aberdeen Ultra Short Municipal Income Fund ("Ultra Short Municipal Income Fund") |
* | Effective November 15, 2019, the Aberdeen Global Unconstrained Fixed Income Fund changed its name to the Aberdeen Global Absolute Return Strategies Fund (the "Global Absolute Return Strategies Fund") in connection with the changes to the Fund's principal investment objective, principal strategies and risks, portfolio management team and distribution frequency. The expense limitation arrangement for the Fund also changed from 0.85% to 0.65% effective November 15, 2019 and was extended through February 28, 2021. The changes to the Fund are described in the Fund's prospectus dated November 15, 2019. |
2. Summary of Significant Accounting Policies
The Trust is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standard Codification Topic 946 Financial Services-Investment Companies. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The policies conform to generally accepted accounting principles in the United States of America ("GAAP"). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The accounting records of the Funds are maintained in U.S. Dollars.
a. Security Valuation
The Funds value their securities at current market value or fair value, consistent with regulatory requirements. "Fair value" is defined in the Funds' Valuation and Liquidity Procedures as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants without a compulsion to transact at the measurement date.
Equity securities that are traded on an exchange are valued at the last quoted sale price on the principal exchange on which the security is traded at the "Valuation Time" subject to application, when appropriate, of the valuation factors described in the paragraph below. Under normal circumstances, the Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time). In the absence of a sale price, the security is valued at the mean of the bid/ask price quoted at the close on the principal exchange on which the security is traded. Securities traded on NASDAQ are valued at the NASDAQ official closing price.
In accordance with the authoritative guidance on fair value measurements and disclosures under generally accepted accounting principles in the United States of America, the Funds disclose the fair value of their investments using a three-level hierarchy that classifies the inputs to valuation techniques used to measure the fair value. The hierarchy assigns Level 1, the highest level, measurements to valuations based upon unadjusted quoted prices in active markets for identical assets, Level 2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar assets, and Level 3, the lowest level, measurements to valuations based upon unobservable inputs that are significant to the valuation. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A financial instrument's level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.
Foreign equity securities that are traded on foreign exchanges that close prior to the Valuation Time are valued by applying valuation factors to the last sale price or the mean price as noted above. Valuation factors are provided by an independent pricing service provider approved by the Board. These valuation factors are used when pricing a Fund's portfolio holdings to estimate market movements between the time foreign
74 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
markets close and the time a Fund values such foreign securities. These valuation factors are based on inputs such as depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. When prices with the application of valuation factors are utilized, the value assigned to the foreign securities may not be the same as quoted or published prices of the securities on their primary markets. A security that applies a valuation factor is determined to be a Level 2 investment because the exchange-traded price has been adjusted. Valuation factors are not utilized if the independent pricing service provider is unable to provide a valuation factor or if the valuation factor falls below a predetermined threshold; in such case, the security is determined to be a Level 1 investment.
Long-term debt and other fixed income securities are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service provider approved by the Board of Trustees of the Trust (the "Board"). If there are no current day bids, the security is valued at the previously applied bid. Pricing services generally price debt securities assuming orderly transactions of an institutional "round lot" size, and the strategies employed by Aberdeen Standard Investments Inc. (formerly, Aberdeen Asset Management Inc.)("Aberdeen," the "Adviser" or "ASII") generally trade in round lot sizes. In certain circumstances, fixed income securities may be held or transactions may be conducted in smaller, "odd lot" sizes. Odd lots may trade at lower or, occasionally, higher prices than institutional round lot trades. Short-term debt securities (such as commercial paper and U.S. treasury bills) having a remaining maturity of 60 days or less are valued at the last quoted or evaluated bid price on the valuation date provided by an independent pricing service, or on the basis of amortized cost if it represents the best approximation for fair value. Debt and other fixed-income securities are generally determined to be Level 2 investments.
Short-term investments are comprised of cash and cash equivalents invested in short-term investment funds which are redeemable daily. Each Fund sweeps available cash into the State Street Institutional U.S. Government Money Market Fund, which has elected to qualify as a "government money market fund" pursuant to Rule 2a-7 under the 1940 Act, and has an objective, which is not guaranteed, to maintain a $1.00 per share net asset value ("NAV"). Generally, these investment types are categorized as Level 1 investments.
Derivative instruments are generally valued according to the following procedures. Exchange traded derivatives are generally Level 1 investments and over-the-counter and centrally cleared derivatives are generally Level 2 investments. Forward currency exchange contracts are generally valued based on the current spot exchange rates and the forward exchange rate points (ex. 1-month, 3-month) that are obtained from an approved pricing agent. Based on the actual settlement dates of the forward contracts held, an interpolated value of the forward points is combined with the spot exchange rate to derive the valuation. Futures contracts are generally valued at the most recent settlement price as of NAV determination. Swap agreements are generally valued by an approved pricing agent based on the terms of the swap agreement (including future cash flows). When market quotations or exchange rates are not readily available, or if the Adviser concludes that such market quotations do not accurately reflect fair value, the fair value of a Fund's assets are determined in good faith in accordance with the Valuation Procedures.
In the event that a security's market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange on which it trades closed before the Valuation Time (as defined below)), the security is valued at fair value as determined by the Funds' Pricing Committee (the "Pricing Committee"), taking into account the relevant factors and surrounding circumstances using Valuation and Liquidity Procedures approved by the Board. Under normal circumstances, the Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time). A security that has been fair valued by the Pricing Committee may be classified as Level 2 or Level 3 depending on the nature of the inputs.
The three-level hierarchy of inputs is summarized below:
• Level 1 – quoted prices in active markets for identical investments;
• Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or
• Level 3 – significant unobservable inputs (including a Fund's own assumptions in determining the fair value of investments).
A summary of standard inputs is listed below:
Security Type | Standard Inputs |
Debt and other fixed-income securities | Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, credit quality, yield, and maturity. |
Foreign equities utilizing a fair value factor | Depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. |
Forward foreign currency contracts | Forward exchange rate quotations. |
Swap agreements | Market information pertaining to the underlying reference assets, i.e., credit spreads, credit event probabilities, fair values, forward rates, and volatility measures. |
2020 Annual Report | 75 |
Notes to Financial Statements (continued)
October 31, 2020
The following is a summary of the inputs used as of October 31, 2020 in valuing the Funds' investments at fair value. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Please refer to the Statements of Investments for a detailed breakout of the security types:
Investments, at Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Emerging Markets Debt Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Corporate Bonds | $ | – | $ | 11,198,123 | $– | $ | 11,198,123 | |||||||||
Government Bonds | – | 39,605,443 | – | 39,605,443 | ||||||||||||
Money Market Funds | 776,625 | – | – | 776,625 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Assets | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | – | 158,157 | – | 158,157 | ||||||||||||
Liabilities | ||||||||||||||||
Forward Foreign Currency Exchange Contracts | – | (59,881 | ) | – | (59,881 | ) | ||||||||||
$ | 776,625 | $ | 50,901,842 | $– | $ | 51,678,467 | ||||||||||
Global Absolute Return Strategies Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | $ | 2,034,267 | $ | 2,227,205 | $– | $ | 4,261,472 | |||||||||
U.S. Treasuries | – | 7,528,835 | – | 7,528,835 | ||||||||||||
Certificates of Deposit | – | 4,112,063 | – | 4,112,063 | ||||||||||||
Commercial Paper | – | 999,973 | – | 999,973 | ||||||||||||
Money Market Funds | 4,437,036 | – | – | 4,437,036 | ||||||||||||
Purchased Options | – | 603,748 | – | 603,748 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Assets | ||||||||||||||||
Futures Contracts | 71,278 | – | – | 71,278 | ||||||||||||
Forward Foreign Currency Exchange Contracts | – | 242,186 | – | 242,186 | ||||||||||||
Interest Rate Swap Agreements | – | 15,894 | – | 15,894 | ||||||||||||
Centrally Cleared Interest Rate Swap Agreements | – | 152,805 | – | 152,805 | ||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | (55,522 | ) | – | – | (55,522 | ) | ||||||||||
Forward Foreign Currency Exchange Contracts | – | (141,340 | ) | – | (141,340 | ) | ||||||||||
Centrally Credit Default Swap Contracts | – | (66,327 | ) | – | (66,327 | ) | ||||||||||
Interest Rate Swap Agreements | – | (7,870 | ) | – | (7,870 | ) | ||||||||||
Centrally Cleared Interest Rate Swap Agreements | – | (43,797 | ) | – | (43,797 | ) | ||||||||||
Total Return Swaps | – | (7,749 | ) | – | (7,749 | ) | ||||||||||
Written Options | – | (444,351 | ) | – | (444,351 | ) | ||||||||||
$ | 6,487,059 | $ | 15,171,275 | $– | $ | 21,658,334 | ||||||||||
Intermediate Municipal Income Fund | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Municipal Bonds | $ | – | $ | 64,360,536 | $– | $ | 64,360,536 | |||||||||
Short-Term Investment | 10,372 | – | – | 10,372 | ||||||||||||
$ | 10,372 | $ | 64,360,536 | $– | $ | 64,370,908 |
76 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
Investments, at Value | Level 1 | Level 2 | Level 3 | Total | ||||||||
Short Duration High Yield Municipal Fund | ||||||||||||
Investments in Securities | ||||||||||||
Municipal Bonds | $ | – | $ | 288,162,727 | $– | $ | 288,162,727 | |||||
$ | – | $ | 288,162,727 | $– | $ | 288,162,727 | ||||||
Ultra Short Municipal Income Fund | ||||||||||||
Investments in Securities | ||||||||||||
Municipal Bonds | $ | – | $ | 1,278,078,147 | $– | $ | 1,278,078,147 | |||||
Short-Term Investment | ||||||||||||
United States | 67,873 | 27,600,000 | – | 27,667,873 | ||||||||
$ | 67,873 | $ | 1,305,678,147 | $– | $ | 1,305,746,020 |
For the fiscal year ended October 31, 2020, there were no significant changes to the fair valuation methodologies. Level 3 investments held by the Emerging Markets Debt Fund, at the beginning, during and at the end of the twelve-month period in relation to net assets were not significant (0.00% of total net assets) and accordingly, a reconciliation determined of Level 3 assets for the year ended October 31, 2020 is not presented.
b. Restricted Securities
Restricted securities are privately-placed securities whose resale is restricted under U.S. securities laws. The Funds may invest in restricted securities, including unregistered securities eligible for resale without registration pursuant to Rule 144A and privately-placed securities of U.S. and non-U.S. issuers offered outside the U.S. without registration pursuant to Regulation S under the Securities Act of 1933, as amended. Rule 144A securities may be freely traded among certain qualified institutional investors, such as the Funds, but resale of such securities in the U.S. is permitted only in limited circumstances.
c. Foreign Currency Translation
Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. Dollars at the exchange rate of said currencies against the U.S. Dollar, as of the Valuation Time, as provided by an independent pricing service. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective date of these transactions. The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments within the Statements of Operations.
d. Derivative Financial Instruments
Certain Funds are authorized to use derivatives to manage currency risk, credit risk, and interest rate risk and to replicate, or use as a substitute for, physical securities. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities.
Forward Foreign Currency Exchange Contracts
A forward foreign currency exchange contract ("forward contract") involves an obligation to purchase and sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Forward contracts are used to manage a Fund's currency exposure in an efficient manner. They are used to sell unwanted currency exposure that comes with holding securities in a market, or to buy currency exposure where the exposure from holding securities is insufficient to give the desired currency exposure either in absolute terms or relative to the benchmark. The use of forward contracts allows the separation of decision-making between markets and their currencies. The forward contract is marked-to market daily and the change in market value is recorded by a Fund as unrealized appreciation/(depreciation). Forward contracts' prices are received daily from an independent pricing provider. When the forward contract is closed, a Fund records a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. These realized and unrealized gains and losses are reported on the Statements of Operations. During the year, the Funds used forward contracts for the purposes of efficient portfolio management and managing active currency risk relative to the benchmark, the latter of which involves both hedging currency risk and adding currency risk in excess of underlying bond positions.
2020 Annual Report | 77 |
Notes to Financial Statements (continued)
October 31, 2020
While a Fund may enter into forward contracts to seek to reduce currency exchange rate risks, transactions in such contracts involve certain risks. A Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in exchange rates. Thus, while a Fund may benefit from such transactions, unanticipated changes in currency prices may result in a poorer overall performance for a Fund than if it had not engaged in any such transactions. Moreover, there may be an imperfect correlation between a Fund's portfolio holdings or securities quoted or denominated in a particular currency and forward contracts entered into by the Fund. Such imperfect correlation may prevent a Fund from achieving a complete hedge, which will expose the Fund to the risk of foreign exchange loss.
Forward contracts are subject to the risk that the counterparties to such contracts may default on their obligations. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearing house, a default on the contract would deprive a Fund of unrealized profits, transaction costs or the benefits of a currency hedge or force a Fund to cover its purchase or sale commitments, if any, at the market price at the time of the default.
Futures Contracts
Certain Funds may invest in financial futures contracts ("futures contracts") for the purpose of hedging their existing portfolio securities, or securities that a Fund intends to purchase, against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes; however, in those instances, the aggregate initial margin and premiums required to establish a Fund's positions may not exceed 5% of a Fund's NAV after taking into account unrealized profits and unrealized losses on any such contract into which it has entered.
Upon entering into a futures contract, a Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This payment is known as "initial margin". Subsequent payments, known as "variation margin," are calculated each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. An unrealized gain/(loss) equal to the variation margin is recognized on a daily basis. When the contract expires or is closed, the gain/(loss) is realized and is presented in the Statements of Operations as a net realized gain/(loss) on futures contracts. Futures contracts are valued daily at their last quoted sale price on the exchange on which they are traded.
A "sale" of a futures contract means a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A "purchase" of a futures contract means a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
There are significant risks associated with a Fund's use of futures contracts, including the following: (1) the success of a hedging strategy may depend on the ability of a Fund's investment adviser and/or sub-adviser to predict movements in the prices of individual securities, fluctuations in markets and movements in interest rates; (2) there may be an imperfect or no correlation between the movement in the price of futures contracts, interest rates and the value/market value of the securities held by a Fund; (3) there may not be a liquid secondary market for a futures contract; (4) trading restrictions or limitations may be imposed by an exchange; and (5) government regulations may restrict trading in futures contracts. In addition, should market conditions change unexpectedly, a Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss.
For the fiscal year ended October 31, 2020, the Aberdeen Global Absolute Return Strategies Fund invested in futures for both investment and hedging purposes.
Swaps
A swap is an agreement that obligates two parties to exchange a series of cash flows and/or meet certain obligations at specified intervals based upon or calculated by reference to changes in specified prices or rates (interest rates in the case of interest rate swaps, currency exchange rates in the case of currency swaps) or the occurrence of a credit event with respect to an underlying reference obligation (in the case of a credit default swap) for a specified amount of an underlying asset or notional principal amount. A Fund will enter into swaps only on a net basis, which means that the two payment streams are netted out, with a Fund receiving or paying, as the case may be, only the amount of the difference between the two payments. Except for currency swaps and credit default swaps, the notional principal amount is used solely to calculate the payment streams but is not exchanged. With respect to currency swaps, actual principal amounts of currencies may be exchanged by the counterparties at the initiation, and again upon the termination of the transaction.
Traditionally, swaps were customized, privately negotiated agreements executed between two parties ("OTC Swaps") but since 2013, certain swaps are required to be cleared pursuant to rules and regulations related to the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd Frank") and/or Regulation (EU) No 648/2012 on OTC Derivatives, Central Counterparties and Trade Repositories ("EMIR") ("Cleared Swaps"). Like OTC Swaps, Cleared Swaps are negotiated bilaterally. Unlike OTC Swaps, the act of clearing results in two swaps executed between each of the parties and a central counterparty ("CCP"), and thus the counterparty credit exposure of the parties is to the
78 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
CCP rather than to one another. Upon entering into a Cleared Swap, a Fund is required to pledge an amount of cash and/or other assets equal to a certain percentage of the contract amount. This payment is known as "initial margin". Subsequent payments, known as "variation margin," are calculated each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. An unrealized gain/(loss) equal to the variation margin is recognized on a daily basis. When the contract matures or is terminated, the gain or loss is realized and is presented in the Statements of Operations as a net realized gain or loss on swap contracts. As of March 2017, a Fund may be required to provide variation and/or initial margin for OTC Swaps pursuant to further rules and regulations related to Dodd Frank and EMIR. The margin requirements associated with OTC Swaps and Cleared Swaps may not be the same.
Entering into swap agreements involves, to varying degrees, elements of credit, market and interest rate risk in excess of the amounts reported on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform and that there may be unfavorable changes in the value of the index or securities underlying the agreement. The Funds' maximum risk of loss from counterparty risk related to swaps is the fair value of the contract. This risk is mitigated by the posting of collateral by the counterparties to the Funds to cover the Funds' exposure to the counterparty.
Credit Default Swaps
A credit default swap is an agreement whereby one party, the buyer, is obligated to pay the other party, the seller, a periodic stream of payments over the term of the contract in return for a contingent payment upon the occurrence of a credit event with respect to an underlying reference obligation. A Fund might use credit default swap contracts to limit or to reduce risk exposure of the Fund to defaults of corporate and sovereign issues (i.e., to reduce risk when the Fund owns or has exposure to such issuers). A Fund also might use credit default swap contracts to create direct or synthetic short or long exposure to domestic or foreign corporate debt securities or certain sovereign debt securities to which the Fund is not otherwise exposed.
During the fiscal year ended October 31, 2020, the Aberdeen Global Absolute Return Strategies Fund held credit default swaps to implement investment views and hedge the Fund's exposure to the credit market.
Interest Rate Swaps
A Fund uses interest rate swap contracts to manage its exposure to interest rates. Interest rate swap contracts typically represent the exchange between a Fund and a counterparty of respective commitments to make variable rate and fixed rate payments with respect to a notional amount of principal. Interest rate swap contracts may have a term that is greater than one year, but typically require periodic interim settlement in cash, at which time the specified value of the variable interest rate is reset for the next settlement period. Net payments of interest are recorded as realized gains or losses. During the period that the swap contract is open, the contract is marked-to-market as the net amount due to or from a Fund and changes in the value of swap contracts are recorded as unrealized gains or losses.
During the fiscal year ended October 31, 2020, the Aberdeen Global Absolute Return Strategies Fund held interest rate swaps to implement investment views and hedge interest rate risk.
Summary of Derivative Instruments
Certain Funds may use derivatives for various purposes as noted above. The following is a summary of the location of fair value amounts of derivatives, not accounted for as hedging instruments, as of October 31, 2020:
Location on the Statement of Assets and Liabilities | ||||
Derivative Instrument Risk Type | Asset Derivatives | Liability Derivatives | ||
Equity Risk | Investments, at value | Written options, outstanding at value | ||
Over-the-counter interest rate swaps and total return equity swaps, at value | Over-the-counter interest rate swaps and total return equity swaps, at value | |||
Interest Rate Risk | Variation margin receivable for centrally cleared swap contracts Variation margin receivable for futures contracts | Variation margin payable for centrally cleared swap contracts Variation margin payable for futures contracts | ||
Credit Risk | Variation margin receivable for centrally | Variation margin payable for centrally | ||
cleared swap contracts | cleared swap contracts | |||
Foreign Exchange Risk | Unrealized appreciation on forward foreign currency exchange contracts | Unrealized depreciation on forward foreign currency exchange contracts |
2020 Annual Report | 79 |
Notes to Financial Statements (continued)
October 31, 2020
The following is a summary of the fair value of derivative instruments, not accounted for as hedging instruments, as of October 31, 2020:
Asset Derivatives | |||||||||||||||||||
Funds | Total Value at 10/31/2020 | Investments, at value (Equity Risk)* | Written Options, at value (Equity Risk) | Over-the- Counter Interest Rate Swaps (Interest Rate risk)** | Over-the- Counter Total Return Swaps (Equity risk)** | Centrally Cleared Credit Default Swaps (Credit Risk)** | Centrally Cleared Interest Rate Swaps (Interest Rate Risk)** | Forward Foreign Exchange Contracts (Foreign Exchange Risk)** | Futures Contracts (Interest Rate Risk)** | ||||||||||
Aberdeen Emerging Markets Debt Fund | $ 158,157 | $ – | $ – | $ – | $ – | $ – | $ – | $ 158,157 | $ – | ||||||||||
Aberdeen Global Absolute Return Strategies Fund | 1,085,641 | 603,478 | – | 15,894 | – | – | 152,805 | 242,186 | 71,278 |
Liability Derivatives | |||||||||||||||||||
Funds | Total Value at 10/31/2020 | Investments, at value (Equity Risk)* | Written Options, at value (Equity Risk) | Over-the- Counter Interest Rate Swaps (Interest Rate risk)** | Over-the- Counter Total Return Swaps (Equity risk)** | Centrally Cleared Credit Default Swaps (Credit Risk)** | Centrally Cleared Interest Rate Swaps (Interest Rate Risk)** | Forward Foreign Exchange Contracts (Foreign Exchange Risk)** | Futures Contracts (Interest Rate Risk)** | ||||||||||
Aberdeen Emerging Markets Debt Fund | $ 59,881 | $ – | $ – | $ – | $ – | $ – | $ – | $ 59,881 | $ – | ||||||||||
Aberdeen Global Absolute Return Strategies Fund | 411,370 | – | 88,765 | 7,870 | 7,749 | 66,327 | 43,797 | 141,340 | 55,522 |
* | Represents purchased options, at value | |
** | The values shown reflect unrealized appreciation/(depreciation) and the values shown in the Statement of Assets and Liabilities reflects variation margin. |
Certain funds have transactions that may be subject to enforceable master netting arrangements. A reconciliation of the gross amounts on the Statements of Assets and Liabilities as of October 31, 2020 to the net amounts by broker and derivative type, including any collateral received or pledged, is included in the following tables:
Gross Amounts Not Offset in Statement of Assets & Liabilities | Gross Amounts Not Offset in Statement of Assets and Liabilities | ||||||||||||||||
Gross Amounts of Assets Presented in Statement of Financial Position | Financial Instruments | Collateral Received(1) | Net Amount(3) | Gross Amounts of Liabilities Presented in Statement of Financial Position | Financial Instruments | Collateral Pledged(1) | Net Amount(3) | ||||||||||
Description | Assets | Liabilities | |||||||||||||||
Emerging Markets Debt Fund | |||||||||||||||||
Forward foreign currency(2) Barclays Bank plc | $36,678 | $(11,785) | $(24,893) | $ – | $11,785 | $(11,785) | $ – | $ – | |||||||||
Deutsche Bank AG | 45,558 | – | – | 45,558 | – | – | – | – | |||||||||
Royal Bank Of Canada | 1,029 | – | – | 1,029 | – | – | – | – | |||||||||
UBS AG | 74,892 | (48,096) | (26,796) | – | 48,096 | (48,096) | – | – |
1 | In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization. | |
2 | Includes financial instrument which are not subject to a master netting arrangement across funds, or another similar arrangement. | |
3 | Net amounts represent the net receivables/(payable) that would be due from/to the counterparty in the event of default. Exposure from financial derivative instruments can only be netted across transactions governed under the same master netting agreement with the same legal entity. |
80 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
Gross Amounts Not Offset in Statement of Assets & Liabilities | Gross Amounts Not Offset in Statement of Assets and Liabilities | ||||||||||||||||
Gross Amounts of Assets Presented in Statement of Financial Position | Financial Instruments | Collateral Received(1) | Net Amount(3) | Gross Amounts of Liabilities Presented in Statement of Financial Position | Financial Instruments | Collateral Pledged(1) | Net Amount(3) | ||||||||||
Description | Assets | Liabilities | |||||||||||||||
Global Absolute Return Strategies Fund | |||||||||||||||||
Forward foreign currency(2) Barclays Bank plc | $58,587 | $(23,193) | $ – | $35,394 | $23,193 | $(23,193) | $ – | $ – | |||||||||
Citibank N.A. | 24,991 | (24,991) | – | – | 39,365 | (24,991) | – | 14,374 | |||||||||
Goldman Sachs & Co. | 58,240 | (27,282) | – | 30,958 | 27,282 | (27,282) | – | – | |||||||||
HSBC Bank plc | 38,841 | (37,489) | – | 1,352 | 37,489 | (37,489) | – | – | |||||||||
JPMorgan Chase Bank N.A. | 29,752 | (7,371) | – | 22,381 | 7,371 | (7,371) | – | – | |||||||||
Royal Bank of Canada | 31,775 | (6,640) | – | 25,135 | 6,640 | (6,640) | – | – | |||||||||
Total return swaps(2) Goldman Sachs & Co. | $ – | $ – | $ – | $ – | $ 7,750 | $ – | $ – | $ 7,750 | |||||||||
Interest rate swaps(2) Morgan Stanley | $15,894 | $ (7,870) | $ – | $ 8,024 | $ 7,870 | $ (7,870) | $ – | $ – |
1 | In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization. | |
2 | Includes financial instrument which are not subject to a master netting arrangement across funds, or another similar arrangement. | |
3 | Net amounts represent the net receivables/(payable) that would be due from/to the counterparty in the event of default. Exposure from financial derivative instruments can only be netted across transactions governed under the same master netting agreement with the same legal entity. |
The following is a summary of the location of realized gain/(loss) and net change in unrealized appreciation/(depreciation) on derivatives in the Statement of Operations for the fiscal year ended October 31, 2020:
Derivative Instrument Risk Type | Location on the Statement of Operations | |
Equity Risk | Realized gain/(loss) on investment transactions Realized gain/(loss) on written options | |
Credit Risk | Realized gain/(loss) on swap contracts Net change in unrealized appreciation/(depreciation) on swap contracts | |
Interest Rate Risk | Realized gain/(loss) on future contracts transactions Net change in unrealized appreciation/(depreciation) on futures contracts Realized gain/(loss) on swap contracts Net change in unrealized appreciation/(depreciation) on swap contracts | |
Foreign Exchange Risk | Realized gain/(loss) on forward foreign currency exchange contracts Net change in unrealized appreciation/(depreciation) on forward foreign currency exchange contracts |
The following is a summary of the effect of derivative instruments on the Statement of Operations for the fiscal year ended October 31, 2020:
Realized Gain or (Loss) on Derivatives Recognized in the Statement of Operations | ||||||||||||||||
Funds | Total | Investments transactions (Equity Risk)* | Written Options, at value (Equity Risk) | Total Return Equity Swaps (Equity risk) | Credit Default Swaps (Credit Risk) | Interest Rate Swaps (Interest Rate Risk) | Forward Foreign Exchange Contracts (Foreign Exchange Risk) | Futures Contracts (Interest Rate Risk) | ||||||||
Aberdeen Emerging Markets Debt Fund | $ 75,484 | $ – | $ – | $ – | $ – | $ – | $ 75,484 | $ – | ||||||||
Aberdeen Global Absolute Return Strategies Fund | 455,133 | 82,077 | (296,489) | (87,025) | 514,976 | 133,769 | (102,304) | 210,129 |
2020 Annual Report | 81 |
Notes to Financial Statements (continued)
October 31, 2020
Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in the Statement of Operations | ||||||||||||||||
Funds | Total | Investments transactions (Equity Risk)* | Written Options, at value (Equity Risk) | Total Return Equity Swaps (Equity risk) | Credit Default Swaps (Credit Risk) | Interest Rate Swaps (Interest Rate Risk) | Forward Foreign Exchange Contracts (Foreign Exchange Risk) | Futures Contracts (Interest Rate Risk) | ||||||||
Aberdeen Emerging Markets Debt Fund | $227,600 | $ – | $ – | $ – | $ – | $ – | $ 227,600 | $ – | ||||||||
Aberdeen Global Absolute Return Strategies Fund | 224,647 | 90,590 | (88,765) | (7,749) | (50,321) | 89,451 | 223,543 | (32,102) |
* | Represents realized gain and change in unrealized appreciation for purchased options during the period. |
Information about derivatives reflected as of the date of this report is generally indicative of the type of, activity for the fiscal year ended October 31, 2020. The table below summarizes the weighted average values of derivatives holdings by the Funds during the fiscal year ended October 31, 2020.
Fund | Purchase Forward Foreign Currency Contracts (Average Notional Value) | Sale Forward Foreign Currency Contracts (Average Notional Value) | Forward Foreign Cross Currency Contracts (Average Notional Value) | Long Future Contracts (Average Notional Value) | Short Future Contracts (Average Notional Value) | Buy Protection Credit Default Swap Contracts (Average Notional Value) | Sell Protection Credit Default Swap Contracts (Average Notional Value) | Interest Rate Swap Contracts (Average Notional Value) | ||||||||
Aberdeen Emerging Markets Debt Fund | $ 1,180,516 | $ 8,600,410 | $ – | $ – | $ – | $ – | $ – | $ – | ||||||||
Aberdeen Global Absolute Return Strategies Fund | 10,182,789 | 14,542,547 | 2,285,053 | 9,865,416 | 8,402,527 | 13,730,058 | 13,678,972 | 25,343,425 |
Funds | Total Return Equity Swaps (Average Notional Value) | Call Purchased Options (Average Notional Value) | Put Purchased Options (Average Notional Value) | Call Written Options (Average Notional Value) | Put Written Options (Average Notional Value) | Call Purchased Swaptions (Average Notional Value) | Put Purchased Swaptions (Average Notional Value) | Call Written Swaptions (Average Notional Value) | Put Written Swaptions (Average Notional Value) | |||||||||
Aberdeen Emerging Markets Debt Fund | $ – | $ – | $ – | $ – | $ – | $ – | $ – | $ – | $ – | |||||||||
Aberdeen Global Absolute Return Strategies Fund | 294,308 | 42,420 | 41,293 | 35,063 | 33,502 | – | 364,021 | – | 256,354 |
e. | Security Transactions, Investment Income and Expenses |
Security transactions are recorded on the trade date. Realized and unrealized gains/(losses) from security and currency transactions are calculated on the identified cost basis. Dividend income and corporate actions are recorded generally on the ex-date, except for certain dividends and corporate actions which may be recorded after the ex-date, as soon as a Fund acquires information regarding such dividends or corporate actions.
Interest income and expenses are recorded on an accrual basis. Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among the relevant Funds based on net assets of each Fund as of the month end. For each of the Funds, the method for allocating income, fund level expenses, and realized and unrealized gains or losses to a class is based on the total net asset value of that class's shares in proportion to the total net assets of the relevant Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
f. | Distributions |
Distributions from net investment income, if any, are declared and paid quarterly for the Emerging Markets Debt Fund. Distributions from net investment income, if any, are declared daily and paid monthly for the Short Duration High Yield Municipal Fund, the Intermediate Municipal Income Fund and the Ultra Short Municipal Income Fund. During the fiscal year ended October 31, 2020, and prior to changing its name, distributions from net investment income were declared and paid quarterly for Aberdeen Global Absolute Return Strategies Fund. Effective November 15, 2019, distributions from net investment income, if any, are declared and paid annually. The Funds will also declare and pay
82 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
distributions at least annually from net realized gains on investment transactions and net realized foreign exchange gains, if any. Dividends and distributions to shareholders are recorded on the ex-dividend date.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments for foreign currencies and loss deferrals.
g. | Federal Income Taxes |
Each Fund intends to continue to qualify as a "regulated investment company" by complying with the provisions available to certain investment companies, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Funds from all federal income taxes. Therefore, no federal income tax provision is required.
Each Fund recognizes the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. Management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Since tax authorities can examine previously filed tax returns, the Funds' U.S. federal and state tax returns for each of the most recent four fiscal years up to the most recent fiscal year ended October 31, 2020 are subject to such review.
h. | Securities Lending |
Through an agreement with BNP Paribas as the Lending Agent and State Street Bank and Trust Company (the Funds' custodian), the Funds may lend their portfolio securities to brokers, dealers and other financial institutions that pay a negotiated fee in order to generate additional income. The Funds receive non-cash collateral in the form of U.S. Government Securities, with respect to each loan of U.S. securities, typically equal to at least 102% of the value of the portfolio securities loaned, and, with respect to each loan of non-U.S. securities, typically equal to at least 105% of the value of the portfolio securities loaned, and at all times thereafter require the borrower to mark to market such collateral on a daily basis so that the market value of such collateral does not fall below 100% of the market value of the portfolio securities so loaned.
Income generated from securities lending includes the difference between (i) the sum of income received from the investment of collateral received from the borrowers that are counterparties to loans, loan fees received from loans, and fees paid by borrower on loans collateralized with collateral other than cash collateral; and ii) any rebate paid to a borrower, and any other allocable fees and expenses in connection with loans of securities. All income is accrued daily and is apportioned 90% to the Funds and 10% to the Lending Agent.
The Funds continue to own the loaned securities and continue to recognize unrealized gains and losses on the securities on loan. However, securities lending involves certain risks, including the event of default or insolvency of the borrower, which could delay or restrict a Fund's ability to recover the loaned securities or dispose of the collateral for the loan. Securities on loan are noted within the Statement of Investments. Non-cash securities lending collateral held by the Lending Agent on behalf of the Funds cannot be sold or repledged by the Funds and therefore, this amount is not presented on the Funds' Statements of Investments.
At October 31, 2020, the Funds did not have any securities on loan.
3. Agreements and Transactions with Affiliates
a. | Investment Adviser |
Under the Investment Advisory Agreement with the Trust, the Adviser manages the Funds in accordance with the policies and procedures established by the Board.
2020 Annual Report | 83 |
Notes to Financial Statements (continued)
October 31, 2020
For services provided under the terms of the current Investment Advisory Agreement, each Fund pays the Adviser an annual management fee (as a percentage of its average daily net assets) paid monthly according to the following schedule:
Fund | Fee Schedule | ||||
Emerging Markets Debt Fund | Up to $500 million | 0.600 | % | ||
On $500 million and more | 0.550 | % | |||
Global Absolute Return Strategies Fund | Up to $500 million | 0.600 | % | ||
$500 million up to $1 billion | 0.550 | % | |||
On $1 billion and more | 0.500 | % | |||
Intermediate Municipal Income Fund | Up to $250 million | 0.425 | % | ||
$250 million up to $1 billion | 0.375 | % | |||
On $1 billion and more | 0.355 | % | |||
Short Duration High Yield Municipal Fund | Up to $250 million | 0.650 | % | ||
On $250 million and more | 0.600 | % | |||
Ultra Short Municipal Income Fund | Up to $2.5 billion | 0.500 | % | ||
On $2.5 billion and more | 0.450 | % |
The Adviser has engaged the services of affiliate Aberdeen Asset Managers Limited (on behalf of Emerging Markets Debt Fund and Global Absolute Return Strategies Fund) as subadviser (the "Subadviser") pursuant to subadvisory agreements. The Subadviser manages a portion of the applicable Fund's investments and have the responsibility for making all investment decisions for the portion of such Fund's assets they manage. Pursuant to the subadvisory agreement, the Adviser pays fees to the Subadviser, if any.
The Trust and Aberdeen have entered into a written contract ("Expense Limitation Agreement") limiting operating expenses for all classes of the Funds from exceeding the amounts listed in the tables below. For each Fund this contractual limitation may not be terminated before February 28, 2021 without the approval of the Trustees who are not "interested persons" of the Trust, as such term is defined by the 1940 Act (the "Independent Trustees"). For each Fund except the Short Duration High Yield Municipal Fund and Ultra Short Municipal Income Fund, this limit excludes certain expenses, including any taxes, interest, brokerage fees, short-sale dividend expenses, acquired fund fees and expenses, Rule 12b-1 fees, administrative services fees, transfer agent out-of-pocket expenses for Class A shares, Class R shares and Institutional Service Class shares and extraordinary expenses. The Expense Limitation Agreement with respect to the Short Duration High Yield Municipal Fund and Ultra Short Municipal Income Fund excludes certain expenses, including any interest, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses.
Fund | Limit | |||
Emerging Markets Debt Fund | 0.65 | % | ||
Global Absolute Return Strategies Fund* | 0.65 | % | ||
Intermediate Municipal Income Fund | 0.50 | % |
* Effective November 15, 2019. Prior to November 15, 2019, the expense limitation was 0.85%
Fund | Class A Limit | Class A1 Limit | Institutional Class Limit | |||||
Short Duration High Yield Municipal Fund | 0.90% | – | 0.65% | |||||
Ultra Short Municipal Income Fund | 0.70% | 0.70% | 0.45% |
Aberdeen may request and receive reimbursement from a Fund of the advisory fees waived and other expenses reimbursed pursuant to the Expense Limitation Agreement as of a date not more than three years after the date when the Adviser limited the fees or reimbursed the expenses; provided that the following requirements are met: the reimbursements do not cause a class to exceed the lesser of the applicable expense limitation in the contract at the time the fees were limited or expenses are paid or the applicable expense limitation in effect at the time the expenses are being recouped by the Adviser, and the payment of such reimbursement is approved by the Board on a quarterly basis (the "Reimbursement Requirements"). Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by Aberdeen is not permitted.
84 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
As of October 31, 2020, to the extent the Reimbursement Requirements are met, the cumulative potential reimbursements for each Fund, based on expenses reimbursed by Aberdeen would be:
Fund | Amount Fiscal Year 2018 (Expires 10/31/21) | Amount Fiscal Year 2019 (Expires 10/31/22) | Amount Fiscal Year 2020 (Expires 10/31/23) | Total* | |||||||
Emerging Markets Debt Fund | $ 164,344 | $ 206,464 | $ 229,330 | $ 600,138 | |||||||
Global Absolute Return Strategies Fund | 236,240 | 260,488 | 347,710 | 844,438 | |||||||
Intermediate Municipal Income Fund | 222,152 | 288,577 | 233,940 | 744,669 | |||||||
Short Duration High Yield Municipal Fund | 280,141 | 557,878 | 582,868 | 1,420,887 | |||||||
Ultra Short Municipal Income Fund | 1,157,542 | 2,481,831 | 2,517,221 | 6,156,594 |
* Amounts reported are due to expire throughout the respective 3-year expiration period presented above.
In accordance with the Funds' Expense Limitation Agreement and criteria, as described above, the Adviser did not recapture any expenses for which it previously reimbursed the Funds. Accordingly, at October 31, 2020, the Funds did not have liabilities payable to the Adviser for recapture of previously reimbursed expenses.
b. Fund Administration
Under the terms of the Fund Administration Agreement, Aberdeen provides various administrative and accounting services, including daily valuation of the Funds' shares, preparation of financial statements, tax returns, regulatory reports, and presentation of quarterly reports to the Board. For services provided pursuant to the Fund Administration Agreement, the Trust pays Aberdeen an annual fee of 0.08% based on the Trust's average daily net assets. The fee is then allocated proportionately among all funds within the Trust (including the Funds) in relation to the average daily net assets of each fund. This asset-based fee is subject to an annual minimum fee based on the number of funds served. Pursuant to a sub-administration agreement with Aberdeen, State Street Bank and Trust Company ("State Street") provides sub-administration services with respect to the Funds. Aberdeen pays State Street for providing such services.
c. Distributor and Shareholder Servicing
The Trust and Aberdeen Fund Distributors, LLC (the "Distributor") are parties to the current Underwriting Agreement (the "Underwriting Agreement") whereby the Distributor acts as principal underwriter for the Trust's shares.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to certain classes of shares. The Plan permits the Funds to compensate the Distributor, for expenses associated with the distribution-related and/or shareholder services provided by such entities. These fees are paid to the Distributor and are either kept or paid to shareholders' financial advisors or other intermediaries for distribution and shareholder services. Although actual distribution expenses may be more or less, under the Plan, the Funds pay the Distributor an annual fee of the following amounts based on the total net assets of each, respective class:
Fund | Class A Shares | Class A1 Shares | Class C Shares (a) | Class R Shares (a) | ||||||||
Emerging Markets Debt Fund | 0.25 | % | – | 1.00% | 0.50% | |||||||
Global Absolute Return Strategies Fund | 0.25 | % | – | 1.00% | – | |||||||
Intermediate Municipal Income Fund | 0.25 | % | – | 1.00% | – | |||||||
Short Duration High Yield Municipal Fund | 0.25 | % | – | – | – | |||||||
Ultra Short Municipal Income Fund | 0.25 | % | 0.25% | – | – |
(a) 0.25% of which is service fees.
The Adviser or an affiliate of the Adviser may pay additional amounts from its own resources to dealers or other financial intermediaries, for aid in distribution or for aid in providing administrative services to shareholders.
Pursuant to the current Underwriting Agreement, the Distributor will also receive the proceeds of contingent deferred sales charges ("CDSCs") of 1.00% imposed on certain redemptions of Class C (and up to 1.00% for certain Class A) shares.
2020 Annual Report | 85 |
Notes to Financial Statements (continued)
October 31, 2020
The Distributor re-allows to dealer 2.50% of sales charges on Class A shares of the Emerging Markets Debt Fund and Global Absolute Return Strategies Fund; 2.00% of sales charges on Class A shares of the Intermediate Municipal Income Fund and Short Duration High Yield Municipal Fund; 0.50% of sales charges on Class A1 of the Ultra Short Municipal Income Fund. In addition, the Distributor or Adviser may compensate broker dealers or financial intermediaries for sales of Class C shares from its own resources at the rate of 1.00% on sales of Class C shares, which have a maximum CDSC of 1.00% (the CDSC is assessed on sales within one year of purchase). The amount the Distributor retained for commissions from front-end sales charges and CDSC fees for the fiscal year ended October 31, 2020 was as follows:
Fund | Commissions Retained from Front-End Sales Charges of Class A and Class A1 Shares | Commissions Retained from CDSC Fees of Class C (Certain Class A and Class A1) Shares | |||
Emerging Markets Debt Fund | $2,100 | $568 | |||
Global Absolute Return Strategies Fund | 9 | – | |||
Intermediate Municipal Income Fund | 723 | – | |||
Short Duration High Yield Municipal Fund | 160 | 17,045 | |||
Ultra Short Municipal Income Fund | 4,925 | – | |||
Total Retained | 7,917 | 17,613 |
d. Administrative Services Fees/Transfer Agent Out-of-Pocket Expenses
The Funds may pay and/or reimburse administrative services fees/transfer agent out-of-pocket expenses to certain broker-dealers and financial intermediaries who provide administrative support services to beneficial shareholders on behalf of the Funds (sometimes referred to as "sub-transfer agency fees"), subject to certain limitations approved by the Board. These fees may be in addition to Rule 12b-1 fees. Sub-transfer agency fees generally include, but are not limited to, costs associated with omnibus accounting, recordkeeping, networking, sub-transfer agency or other administrative or shareholder services.
Class A, Class A1, Class R and Institutional Service Class shares of the Funds pay for such services pursuant to an Administrative Services Plan adopted by the Board. Under the Administrative Services Plan, a Fund may pay a broker-dealer or other intermediary a maximum annual sub-transfer agent and administrative services fee of 0.25% for Class A, Class A1, Class R and Institutional Service Class shares. Under an amendment to the Administrative Services Plan that is in effect until at least February 28, 2021, the administrative service fee is limited to a maximum of 0.15% for contracts with fees that are calculated as a percentage of Fund assets and a maximum of $16 per account for contracts with fees that are calculated on a dollar per account basis. Class C and Institutional Class shares may also pay for the services described above directly, as these classes are not subject to an Administrative Services Plan.
The aggregate amount of sub-transfer agent and administrative service fees paid during the fiscal year ended October 31, 2020 was as follows:
Fund | Class A | Class A1 | Class C | Class R | Institutional Service | Institutional | |||||||||||
Emerging Markets Debt Fund | $ 567 | $ – | $ 140 | $ 5,902 | $ – | $ 14,710 | |||||||||||
Global Absolute Return Strategies Fund | 477 | – | 179 | – | 11,814 | 3,519 | |||||||||||
Intermediate Municipal Income Fund | 889 | – | 92 | – | – | 4,388 | |||||||||||
Short Duration High Yield Municipal fund | 13,320 | – | – | – | – | 134,077 | |||||||||||
Ultra Short Municipal Income Fund | 101,632 | 22 | – | – | – | 556,535 |
Amounts listed as "–" are $0 or round to $0.
e. Purchase/Sale Transactions Between Affiliates
The Funds are permitted to buy or sell securities with funds that have a common investment adviser (or investment advisers which are affiliates) under specific procedures which have been approved by the Board. The procedures are designed to satisfy the requirements of Rule 17a-7 of the Investment Company Act of 1940 ("Rule 17a-7"). During the year ended October 31, 2020, the Funds did not engage in any of these trades.
86 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
4. Investment Transactions
Purchases and sales of securities (excluding short-term securities) for the fiscal year ended October 31, 2020, were as follows:
Fund | Purchases | Sales | |||
Emerging Markets Debt Fund | $ | 35,397,494 | $ | 30,769,376 | |
Global Absolute Return Strategies Fund | 21,865,986 | 27,022,968 | |||
Intermediate Municipal Income Fund | 38,100,979 | 42,319,416 | |||
Short Duration High Yield Municipal Fund | 424,991,913 | 381,624,038 | |||
Ultra Short Municipal Income Fund | 3,117,249,995 | 2,783,022,042 |
5. Portfolio Investment Risks
a. | Absolute Return Strategy Risk |
The Global Absolute Return Strategies Fund is subject to risks related to its absolute return strategy. Absolute return funds employ certain techniques that are intended to reduce risk and volatility in the portfolio and provide protection against a decline in the fund's assets. They are not designed to outperform stocks and bonds in strong markets and there is no guarantee of positive returns or that the Fund's objective will be achieved.
b. | Credit Default Swap Risk |
The Global Absolute Return Strategies Fund may buy or sell credit default swaps. Credit default swap contracts, a type of derivative instrument, particularly selling credit default swaps, involve special risks and may result in losses to the Fund.
c. | Cybersecurity Risk |
Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser and/or their service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality.
d. | Derivatives Risk (including Options, Futures and Swaps) |
Certain Funds are subject to Derivatives Risk. Derivatives are speculative and may hurt the Fund's performance. The potential benefits to be derived from the Fund's options, futures and derivatives strategy are dependent upon the portfolio managers' ability to discern pricing inefficiencies and predict trends in these markets, which decisions could prove to be inaccurate.
Speculative Exposure Risk. To the extent that a derivative or practice is not used as a hedge, the Fund is directly exposed to its risks. Gains or losses from speculative positions in a derivative may be much greater than the derivative's original cost. For example, potential losses from writing uncovered call options and from speculative short sales are unlimited.
Hedged Exposure Risk. Losses generated by a derivative or practice used by the Fund for hedging purposes should be substantially offset by gains on the hedged investment. However, while hedging can reduce or eliminate losses, it can also reduce or eliminate gains.
Correlation Risk. The Fund is exposed to the risk that changes in the value of a hedging instrument will not match those of the investment being hedged.
Counterparty Risk. Derivative transactions depend on the creditworthiness of the counterparty and the counterparty's ability to fulfill its contractual obligations.
e. | Emerging Markets Risk |
Certain Funds are subject to Emerging Markets Risk. A magnification of the risks that apply to foreign investments. These risks are greater for securities of companies in emerging markets countries because the countries may have less stable governments, more volatile currencies and less established markets (see "Foreign Securities Risk" below).
f. | Equity Securities Risk |
The Global Absolute Return Strategies Fund may invest in equity securities. The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain
2020 Annual Report | 87 |
Notes to Financial Statements (continued)
October 31, 2020
management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry).
g. | Fixed Income Securities Risk |
Fixed income securities are subject to, among other risks, credit risk, extension risk, issuer risk, interest rate risk, market risk and prepayment risk.
h. | Foreign Currency Exposure Risk |
The value of foreign currencies relative to the U.S. Dollar fluctuates in response to market, economic, political, regulatory, geopolitical or other conditions. A decline in the value of a foreign currency versus the U.S. Dollar reduces the value in U.S. Dollars of investments denominated in that foreign currency. This risk may impact a Fund more greatly to the extent the Fund does not hedge its currency risk, or hedging techniques used by the Adviser are unsuccessful.
i. | Foreign Securities Risk |
Foreign countries in which a Fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of a Fund's investments may decline because of factors such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund.
j. | High-Yield Bonds and Other Lower-Rated Securities Risk |
A Fund's investments in high-yield bonds (commonly referred to as "junk bonds") and other lower-rated securities will subject the Fund to substantial risk of loss. Investments in high-yield bonds are speculative and issuers of these securities are generally considered to be less financially secure and less able to repay interest and principal than issuers of investment-grade securities. Prices of high-yield bonds tend to be very volatile. These securities are less liquid than investment-grade debt securities and may be difficult to price or sell, particularly in times of negative sentiment toward high-yield securities.
k. | Illiquid Securities Risk |
Illiquid securities are assets that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the asset. An inability to sell a portfolio position can adversely affect a Fund's value or prevent the Fund from being able to take advantage of other investment opportunities. Illiquid securities and relatively less liquid securities may also be difficult to value. Over recent years, the capacity of dealers to make markets in fixed income securities has been outpaced by the growth in the size of the fixed income markets. Liquidity risk may be magnified in a rising interest rate environment or when investor redemptions from fixed income funds may be higher than normal, due to the increased supply in the market that would result from selling activity.
The Adviser employs procedures and tests using third-party and internal data inputs that seek to assess and manage the liquidity of a Fund's portfolio holdings. These procedures and tests take into account a Fund's investment strategy and liquidity of portfolio investments during both normal and foreseeable stressed conditions, cash-flow projections during both normal and reasonable foreseeable stressed conditions, relevant market, trading and other factors, and monitor whether liquidity should be adjusted based on changed market conditions. These procedures and tests are designed to assist a Fund in determining its ability to meet redemption requests in various market conditions. In light of the dynamic nature of markets, there can be no assurance that these procedures and tests will enable a Fund to ensure that it has sufficient liquidity to meet redemption requests.
l. | Impact of Large Redemptions and Purchases of Fund Shares |
Occasionally, shareholders may make large redemptions or purchases of Fund shares, which may cause a Fund to have to sell securities or invest additional cash. These transactions may adversely affect the Fund's performance and increase transaction costs. In addition, large redemption requests may exceed the cash balance of the Fund and result in credit line borrowing fees and/or overdraft charges to a Fund until the sales of portfolio securities necessary to cover the redemption request settle.
m. | Interest Rate Risk |
Each Fund's fixed income investments are subject to interest rate risk, which generally causes the value of a fixed income portfolio to decrease when interest rates rise resulting in a decrease in each Fund's net assets. Each Fund may be subject to a greater risk of rising interest rates due to the recent period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives. Interest rate fluctuations tend to have a greater impact on fixed income-securities with a greater time to maturity and/or
88 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
lower coupon. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration. In periods of market volatility, the market values of fixed income securities may be more sensitive to changes in interest rates.
n. | Issuer Risk |
The value of a security may decline for reasons directly related to the issuer, such as management performance, financial leverage and reduced demand for the issuer's goods or service.
o. | LIBOR Risk |
A Fund may invest in certain debt securities, derivatives or other financial instruments that utilize the London Interbank Offered Rate ("LIBOR") as a "benchmark" or "reference rate" for various interest rate calculations. In July 2017, the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. Although financial regulators and industry working groups have suggested alternative reference rates, such as European Interbank Offered Rate ("EURIBOR"), Sterling Overnight Interbank Average Rate ("SONIA") and Secured Overnight Financing Rate ("SOFR"), global consensus on alternative rates is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect a Fund's performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely affecting a Fund's performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.
p. | Management Risk |
Each Fund is subject to the risk that the Adviser or Subadviser (as applicable) may make poor security selections. The Adviser, Subadviser and their portfolio managers apply their own investment techniques and risk analyses in making investment decisions for a Fund and there can be no guarantee that these decisions will achieve the desired results for the Fund. In addition, the Adviser or Subadviser may select securities that underperform the relevant market or other funds with similar investment objectives and strategies.
q. | Market Risk |
Deteriorating market conditions might cause a general weakness in the market that reduces the prices, or yield, of securities in those markets in which a Fund invests.
The illness caused by a novel coronavirus (COVID-19) has resulted in a global pandemic and major disruption to economies and markets around the world, including the United States. Financial markets have experienced extreme volatility and severe losses, and trading in many instruments has been disrupted. Liquidity for many instruments has been greatly reduced for periods of time. Some interest rates are very low and in some cases yields are negative. Some sectors of the economy and individual issuers have experienced particularly large losses. These circumstances may continue for an extended period of time, and may continue to affect adversely the value and liquidity of the Fund's investments. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, including the Fund, are not known. Governments and central banks, including the Federal Reserve in the United States, have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. The impact of these measures, and whether they will be effective to mitigate the economic and market disruption, will not be known for some time.
r. | Municipal Securities Risk |
The Intermediate Municipal Income Fund, Short Duration High Yield Municipal Fund and Ultra Short Municipal Income Fund (the "Municipal Funds") are subject to municipal securities risk. Municipal bonds can be significantly affected by political and economic changes, including inflation, as well as uncertainties in the municipal market related to taxation, legislative changes, or the rights of municipal security holders. Municipal bonds have varying levels of sensitivity to changes in interest rates. Interest rate risk is generally lower for shorter-term municipal bonds and higher for long term municipal bonds.
Municipal Bond Tax Risk. A municipal bond that is issued as tax-exempt may later be declared to be taxable. In addition, if the federal income tax rate is reduced, the value of the tax exemption may be less valuable, causing the value of a municipal bond to decline.
2020 Annual Report | 89 |
Notes to Financial Statements (continued)
October 31, 2020
Municipal Market Volatility and Illiquidity Risk. The municipal bond market can be susceptible to unusual volatility, particularly for lower-rated and unrated securities. Liquidity can be reduced unpredictably in response to overall economic conditions or credit tightening. During times of reduced market liquidity, a Fund may not be able to readily sell bonds without the sale significantly changing the market value of the bond. If the Fund needed to sell large blocks of bonds to meet shareholder redemption requests or to raise cash, those sales could further reduce the bonds' prices.
Municipal Sector Risk. From time to time a Fund may invest a substantial amount of its assets in municipal securities whose interest is paid solely from revenues of similar projects. If the Fund concentrates its investments in this manner, it assumes the economic risks relating to such projects and this may have a significant impact on the Fund's investment performance.
s. | Non-Diversified Fund Risk |
The Emerging Market Debt Fund's performance may be more volatile than a diversified fund because it may invest a greater percentage of its total assets in the securities of a single issuer.
t. | Non-Hedging Foreign Currency Trading Risk |
Foreign exchange rates can be extremely volatile and a variance in the degree of volatility of the market or in the direction of the market from the Adviser's expectations may produce significant losses to certain Funds.
u. | Portfolio Turnover Risk |
Certain Funds may engage in active and frequent trading of portfolio securities to achieve its investment objective. High portfolio turnover necessarily results in greater transaction costs which may reduce Fund performance. It may also result in greater realization of gains, which may include short-term gains taxable at ordinary income tax rates.
v. | Private Placements and Other Restricted Securities Risk |
The Emerging Markets Debt Fund and Short Duration High Yield Municipal Fund are subject to Private Placements Risk. Investments in private placements and other restricted securities, including Regulation S Securities and Rule 144A Securities, could have the effect of increasing the Fund's level of illiquidity. Private placements and restricted securities may be less liquid than other investments because such securities may not always be readily sold in broad public markets and the Fund might be unable to dispose of such securities promptly or at prices reflecting their true value.
w. | Puerto Rico and U.S. Territories Risk |
The Aberdeen Short Duration High Yield Municipal Fund is subject to Puerto Rico and U.S. territories risk to the extent that it invests in municipal obligations of such territories. Certain municipal issuers in Puerto Rico have experienced financial difficulties over recent years. These financial difficulties have been exacerbated by the impact of severe weather events, including Hurricane Maria in 2017. Additionally, all three ratings agencies have maintained a negative outlook on Puerto Rico's credit rating, which means that additional downgrades of securities issued by Puerto Rico are possible in the future. Puerto Rican financial difficulties could potentially lead to less liquidity for its bonds, wider spreads, and greater risk of default for Puerto Rican municipal securities, and consequently may affect the Fund's performance to the extent it invests in Puerto Rican municipal securities. As with Puerto Rican municipal securities, events in any of the other territories where the Fund is invested may affect the Fund's investments and its performance.
x. | Tender Option Bonds Risk |
The Municipal Funds are subject to Tender Option Bonds Risk. Tender option bonds are synthetic floating-rate or variable-rate securities issued when long-term bonds are purchased in the primary or secondary market and then deposited into a trust. Tender option bonds may be considered derivatives, and may expose the Fund to the same risks as investments in derivatives, as well as risks associated with leverage, especially the risk of increased volatility.
y. | Tobacco Related Bonds Risk |
The Aberdeen Short Duration High Yield Municipal Fund is subject to Tobacco Related Bonds Risk. In 1998, the largest U.S. tobacco manufacturers reached an out of court agreement, the MSA, to settle claims against them by 46 states and six other U.S. jurisdictions. The tobacco manufacturers agreed to make annual payments to the government entities in exchange for the release of all litigation claims. A number of the states have sold bonds that are backed by those future payments. The Fund may invest in two types of those bonds: (i) bonds that make payments only from a state's interest in the MSA and (ii) bonds that make payments from both the MSA revenue and from an "appropriation pledge" by the state. An "appropriation pledge" requires the state to pass a specific periodic appropriation to make the payments and is generally not an unconditional guarantee of payment by a state. The settlement payments are based on factors, including, but not limited to, annual domestic cigarette shipments, cigarette consumption, inflation and the financial capability of participating tobacco
90 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
companies. Payments could be reduced if consumption decreases, if market share is lost to non-MSA manufacturers, or if there is a negative outcome in litigation regarding the MSA.
z. | Sector Risk |
To the extent that a Fund has a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector, the Fund may be more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly.
Financials Sector Risk. To the extent that the financials sector is represented by a significant portion of a Fund's portfolio, the Fund will be sensitive to changes in, and its performance may depend to a greater extent on, factors impacting this sector. Performance of companies in the financials sector may be adversely impacted by many factors, including, among others, government regulations, economic conditions, credit rating downgrades, changes in interest rates, and decreased liquidity in credit markets as well as cyber-attacks.
Municipal Sector Risk. From time to time a Fund may invest a substantial amount of its assets in municipal securities whose interest is paid solely from revenues of similar projects. If a Fund concentrates its investments in this manner, it assumes the economic risks relating to such projects and this may have a significant impact on the Fund's investment performance.
aa. | Sovereign Debt Risk |
The Emerging Markets Debt Fund and Global Absolute Return Strategies Fund are subject to Sovereign Debt Risk. Periods of economic and political uncertainty may result in the illiquidity and increased price volatility of a foreign government's debt securities held by the Fund and impact an issuer's ability and willingness to pay interest or repay principal when due. The Fund may have limited recourse to compel payment in the event of a default. A foreign government's default on its debt securities may cause the value of securities held by the Fund to decline significantly.
bb. | U.S. Government Securities Risk |
Securities issued by U.S. Government agencies or government sponsored entities may not be guaranteed by the U.S. Treasury. The U.S. Government does not guarantee the net asset value of a Fund's shares.
cc. | Valuation Risk |
The price a Fund could receive upon the sale of any particular portfolio investment may differ from the Fund's valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A Fund's ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers.
dd. | Variable and Floating Rate Securities Risk |
Certain Funds are subject to Variable and Floating Rate Securities Risk. For floating and variable rate obligations, there may be a lag between an actual change in the underlying interest rate benchmark and the reset time for an interest payment of such an obligation, which could harm or benefit the Fund, depending on the interest rate environment or other circumstances. Variable rate demand obligations ("VRDOs") are floating rate securities that combine an interest in a long term municipal bond with a right to demand payment before maturity from a bank or other financial institution. If the bank or financial institution is unable to pay, the Fund may lose money.
ee. | Yield Risk |
The Ultra Short Municipal Income Fund is subject to Yield Risk. The amount of income received by the Fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the Fund's expenses could absorb all or a significant portion of the Fund's income. If interest rates increase, the Fund's yield may not increase proportionately. For example, the Adviser may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed.
Please read the Funds' prospectus for more detailed information regarding these and other risks.
6. Contingencies
In the normal course of business, the Funds may provide general indemnifications pursuant to certain contracts and organizational documents. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds, and therefore, cannot be estimated; however, the Funds expect the risk of loss from such claims to be remote.
2020 Annual Report | 91 |
Notes to Financial Statements (continued)
October 31, 2020
7. Tax Information
As of October 31, 2020, the tax cost of securities and the breakdown of unrealized appreciation/(depreciation) for each Fund were as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) | |||||||||
Emerging Markets Debt Fund | $ 54,053,493 | $ 1,639,850 | $(4,113,152) | $(2,473,302 | ) | |||||||
Global Absolute Return Strategies Fund | 21,596,824 | 571,500 | (225,197) | 346,303 | ||||||||
Intermediate Municipal Income Fund | 61,319,382 | 3,580,793 | (529,267) | 3,051,526 | ||||||||
Short Duration High Yield Municipal Fund | 290,112,698 | 3,566,493 | (5,516,464) | (1,949,971 | ) | |||||||
Ultra Short Municipal Income Fund | 1,306,304,139 | 106,497 | (664,615) | (558,118 | ) |
The tax character of distributions paid during the fiscal year ended October 31, 2020 was as follows (total distributions paid may differ from the Statements of Changes in Net Assets because for tax purposes dividends are recognized when actually paid):
Distributions paid from | ||||||||||||||||||
Fund | Ordinary Income* | Net Long Term Capital Gains* | Total Taxable Distributions | Tax Exempt Distributions | Return of Capital | Total Distributions Paid | ||||||||||||
Emerging Markets Debt Fund | $2,023,869 | $ – | $2,023,869 | $ – | $– | $2,023,869 | ||||||||||||
Global Absolute Return Strategies Fund | 444,894 | – | 444,894 | – | – | 444,894 | ||||||||||||
Intermediate Municipal Income Fund | 5,378 | 98,884 | 104,262 | 1,960,534 | – | 2,064,796 | ||||||||||||
Short Duration High Yield Municipal Fund | 94,431 | – | 94,431 | 7,910,765 | – | 8,005,196 | ||||||||||||
Ultra Short Municipal Income Fund | 9,380 | – | 9,380 | 9,185,486 | – | 9,194,866 |
The tax character of distributions paid during the fiscal year ended October 31, 2019 was as follows (total distributions paid may differ from the Statements of Changes in Net Assets because for tax purposes dividends are recognized when actually paid):
Distributions Paid From | ||||||||||||||||||
Fund | Ordinary Income* | Net Long Term Capital Gains* | Total Taxable Distributions | Tax Exempt Distributions | Return of Capital | Total Distributions Paid | ||||||||||||
Emerging Markets Debt Fund | $1,271,817 | $ – | $1,271,817 | $ – | $– | $ 1,271,817 | ||||||||||||
Global Absolute Return Strategies Fund | 939,550 | 47,303 | 986,853 | – | – | 986,853 | ||||||||||||
Intermediate Municipal Income Fund | 4,962 | 20,675 | 25,637 | 2,202,743 | – | 2,228,380 | ||||||||||||
Short Duration High Yield Municipal Fund | 97,540 | – | 97,540 | 6,921,454 | – | 7,018,994 | ||||||||||||
Ultra Short Municipal Income Fund | 10 | – | 10 | 13,720,548 | – | 13,720,558 |
92 | 2020 Annual Report |
Notes to Financial Statements (continued)
October 31, 2020
As of October 31, 2020, the components of accumulated earnings/(deficit) on a tax basis were as follows:
Fund | Undistributed Tax Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Accumulated Earnings | Distributions Payable | Late Year Ordinary and Post-October Capital Loss Deferrals | Other Temporary Differences | Unrealized Appreciation/ (Depreciation)* | Accumulated Capital and Other Losses** | Total Accumulated Earnings/ (Deficit) | |||||||||||
Emerging Markets Debt Fund | $ – | $1,288,463 | $ – | $– | $– | $– | $(130,906) | $(2,484,022) | $(5,106,896) | $(6,433,361 | ) | ||||||||||
Global Absolute Return Strategies Fund | – | 67,932 | – | – | – | – | (80) | 498,029 | (295,675) | 270,206 | |||||||||||
Intermediate Municipal Income Fund | 5,026 | – | 106,844 | – | – | – | (10,227) | 3,051,529 | – | 3,153,172 | |||||||||||
Short Duration High Yield Municipal Fund | 166,066 | – | – | – | – | – | (40,941) | (1,949,974) | (7,479,151) | (9,304,000 | ) | ||||||||||
Ultra Short Municipal Income Fund | 4,615 | – | – | – | – | – | (17,255) | (558,119) | (339,529) | (910,288 | ) |
* | The difference between the book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to tax deferral of losses on wash sales. |
** | As of October 31, 2020, for Federal income tax purposes, these Funds have capital loss carryforwards available to offset capital gains, if any, to the extent provided by the Treasury regulations, with no expiration. |
Amounts listed as "–" are $0 or round to $0.
As of October 31, 2020, for Federal income tax purposes, the following Funds have capital loss carryforwards available to offset capital gains, if any, to the extent provided by the Treasury regulations.
Fund | Amount | Expires | ||||
Emerging Markets Debt Fund | $ 969,025 | Unlimited (Short-Term | ) | |||
Emerging Markets Debt Fund | 4,137,871 | Unlimited (Long-Term | ) | |||
Global Absolute Return Strategies Fund | 295,675 | Unlimited (Long-Term | ) | |||
Short Duration High Yield Municipal Fund | 3,998,361 | Unlimited (Short-Term | ) | |||
Short Duration High Yield Municipal Fund | 3,480,790 | Unlimited (Long-Term | ) | |||
Ultra Short Municipal Income Fund | 339,529 | Unlimited (Short-Term | ) |
The Funds are permitted to carry forward capital losses for an unlimited period, and capital losses that are carried forward will retain their character as either short-term or long-term capital losses.
8. Significant Shareholders
As of October 31, 2020, the Funds had shareholders with the percentage ownership indicated, which are considered significant shareholders (holdings greater than 5.0%) for financial reporting purposes:
Fund | Record Ownership % | Number of Account Owners | ||
Emerging Markets Debt Fund | 84.9% | 5 | ||
Global Absolute Return Strategies Fund | 72.3 | 3 | ||
Intermediate Municipal Income Fund | – | – | ||
Short Duration High Yield Municipal Fund | 63.3 | 5 | ||
Ultra Short Municipal Income Fund | 74.4 | 6 |
Amounts listed as "–" are $0 or round to $0.
2020 Annual Report | 93 |
Notes to Financial Statements (concluded)
October 31, 2020
9. Line of Credit
The Trust, on behalf of each of the funds of the Trust (including the Funds) (the "Borrowers"), has entered into an agreement (the "Agreement") with State Street Bank and Trust Company (the "Bank"), subject to annual renewal. The Agreement provides for a revolving credit facility (the "Credit Facility") in the amount of $150,000,000 to be utilized for temporary or emergency purposes to fund shareholder redemptions or other short-term liquidity purposes.
The Funds are subject to an up-front fee of 2.5 basis points (0.025%) on the full facility amount, which was paid upon closing of the credit facility. Principal on each outstanding loan made under the Agreement bears interest at a variable rate per annum equal to the higher of (a) the Federal Funds Rate as in effect on that day (not less than zero) plus 1.25% or (b) the One-Month LIBOR as in effect on that day (not less than zero) plus 1.25%. In addition, the Borrowers shall pay to the Bank a commitment fee at the rate of 0.25% per annum on the daily unused portion of the Credit Facility, as applicable, which is allocated among the Borrowers in such manner as is determined by the Board to be reasonable. In 2017, the head of the United Kingdom's Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement reference rate. As such, the potential effect of a transition away from LIBOR on the Fund's payment obligations under the revolving credit facility cannot yet be determined. For each Fund that borrowed under the Credit Facility during the fiscal year ended October 31, 2020, the following table shows the average outstanding daily balance of the days the Fund utilized the Credit Facility and the average weighted interest rate paid by the Fund during the fiscal year ended October 31, 2020.
Average Outstanding Daily Balance | Average Weighted Interest Rate | Days Utilized | |
Emerging Markets Debt Fund | 150,000 | 1.44% | 2 |
Global Absolute Return Strategies Fund | 1,156,599 | 2.25% | 7 |
Ultra Short Municipal Income Fund | 100,000 | 2.94% | 1 |
10. Subsequent Events
Management has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no disclosures and/or adjustments were required to the financial statements as of October 31, 2020.
94 | 2020 Annual Report |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of Aberdeen Funds:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Aberdeen Emerging Markets Debt Fund, Aberdeen Global Absolute Return Strategies Fund (formerly, Aberdeen Global Unconstrained Fixed Income Fund), Aberdeen Intermediate Municipal Income Fund, Aberdeen Short Duration High Yield Municipal Fund, and Aberdeen Ultra Short Municipal Income Fund, five of the funds comprising Aberdeen Funds (each, a Fund and collectively, the Funds), including the statements of investments, as of October 31, 2020, the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended except for the Aberdeen Short Duration High Yield Municipal Fund and Aberdeen Ultra Short Municipal Income Fund, for which the period is the three-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of October 31, 2020, the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended except for the Aberdeen Short Duration High Yield Municipal Fund and Aberdeen Ultra Short Municipal Income Fund, for which the period is the three-year period then ended, in conformity with U.S. generally accepted accounting principles. The financial highlights for each of the years in the two-year period ended October 31, 2017 for Aberdeen Short Duration High Yield Municipal Fund and Aberdeen Ultra Short Municipal Income Fund were audited by other independent registered public accountants whose report, dated December 22, 2017, expressed an unqualified opinion on the financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of October 31, 2020, by correspondence with the custodian, transfer agent of the underlying funds, brokers, or by other appropriate auditing procedures when replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Aberdeen investment companies since 2009.
Philadelphia, Pennsylvania
December 29, 2020
2020 Annual Report | 95 |
Other Tax Information (Unaudited)
During the year ended October 31, 2020, the following Funds reported dividends as long-term capital gains:
Fund | Amount |
Intermediate Municipal Income Fund | $98,884 |
96 | 2020 Annual Report |
Shareholder Expense Examples (Unaudited)
As a shareholder of the Aberdeen Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and (2) ongoing costs, including investment advisory fees, administration fees, transfer agent out-of-pocket expenses, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Aberdeen Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, May 1, 2020 and continued to hold your shares at the end of the reporting period, October 31, 2020.
Actual Expenses
The table below provides information about actual account values and actual expenses. You may use the information together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled "Actual Expenses Paid During Period" for the class of a Fund that you own to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and hypothetical expenses based on the Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of a Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads). Therefore, the information for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Beginning Account Value, May 1, 2020 | Actual Ending Account Value, October 31, 2020 | Hypothetical Ending Account Value | Actual Expenses Paid During Period1 | Hypothetical Expenses Paid During Period12 | Annualized Expense Ratio** | ||
Emerging Markets Debt Fund | Class A | $1,000.00 | $1,127.90 | $1,020.26 | $5.19 | $4.93 | 0.97% |
Class C | $1,000.00 | $1,123.20 | $1,016.84 | $8.81 | $8.36 | 1.65% | |
Class R | $1,000.00 | $1,125.50 | $1,018.60 | $6.95 | $6.60 | 1.30% | |
Institutional Service Class | $1,000.00 | $1,128.50 | $1,021.92 | $3.42 | $3.25 | 0.64% | |
Institutional Class | $1,000.00 | $1,129.40 | $1,021.87 | $3.48 | $3.30 | 0.65% | |
Global Absolute Return Strategies Fund | Class A | $1,000.00 | $1,044.70 | $1,020.26 | $4.99 | $4.93 | 0.97% |
Class C | $1,000.00 | $1,041.20 | $1,016.84 | $8.47 | $8.36 | 1.65% | |
Institutional Service Class | $1,000.00 | $1,044.40 | $1,021.12 | $4.11 | $4.06 | 0.80% | |
Institutional Class | $1,000.00 | $1,046.10 | $1,021.82 | $3.39 | $3.35 | 0.66% | |
Intermediate Municipal Income Fund | Class A | $1,000.00 | $1,047.50 | $1,021.32 | $3.91 | $3.86 | 0.76% |
Class C | $1,000.00 | $1,043.70 | $1,017.60 | $7.71 | $7.61 | 1.50% | |
Class R | $1,000.00 | $1,000.00 | $1,025.14 | $ — | $ — | —% | |
Institutional Service Class | $1,000.00 | $1,048.80 | $1,022.62 | $2.58 | $2.54 | 0.50% | |
Institutional Class | $1,000.00 | $1,048.80 | $1,022.62 | $2.58 | $2.54 | 0.50% | |
Short Duration High Yield Municipal Fund | Class A | $1,000.00 | $1,035.50 | $1,020.61 | $4.60 | $4.57 | 0.90% |
Institutional Class | $1,000.00 | $1,036.80 | $1,021.87 | $3.33 | $3.30 | 0.65% | |
Ultra Short Municipal Income Fund | Class A | $1,000.00 | $1,003.10 | $1,021.62 | $3.52 | $3.56 | 0.70% |
Class C | $1,000.00 | $1,003.10 | $1,021.67 | $3.47 | $3.51 | 0.69% | |
Institutional Class | $1,000.00 | $1,003.40 | $1,022.87 | $2.27 | $2.29 | 0.45% |
** | The expense ratio presented represents a six-month, annualized ratio. |
1 | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period multiplied by 184/366 (to reflect the one-half year period). |
2 | Represents the hypothetical 5% return before expenses. |
2020 Annual Report | 97 |
Supplemental Information (Unaudited)
Board of Trustees' Consideration of Advisory and Sub-Advisory Agreements
At a regularly scheduled quarterly meeting (the "Quarterly Meeting") of the Board of Trustees (the "Board" or the "Trustees") of the Aberdeen Funds (the "Trust") held on June 17, 2020, the Board, including a majority of the Trustees who are not considered to be "interested persons" of the Trust (the "Independent Trustees") under the Investment Company Act of 1940, as amended (the "1940 Act"), approved for an annual period the continuation of the Trust's advisory agreement (the "Advisory Agreement") with Aberdeen Standard Investments Inc. ("ASII") and the applicable sub-advisory agreements (each a "Sub-Advisory Agreement," and collectively with the Advisory Agreement, the "Agreements") between ASII and Aberdeen Asset Managers Limited ("AAML") (the "Sub-Adviser") for each of the following series of the Trust: Aberdeen Emerging Markets Debt Fund, Aberdeen Global Absolute Return Strategies Fund (formerly, Aberdeen Global Unconstrained Fixed Income Fund), Aberdeen Intermediate Municipal Income Fund, Aberdeen Short Duration High Yield Municipal Fund, and Aberdeen Ultra Short Municipal Income Fund (each a "Fund," and collectively the "Funds"). Pursuant to relief granted by the U.S. Securities and Exchange Commission (the "SEC") in light of the COVID-19 pandemic (the "Order") and a determination by the Board that reliance on the Order was appropriate due to circumstances related to the current or potential effects of COVID-19, the Quarterly Meeting was held via teleconference. In addition, the Independent Trustees held a separate telephonic meeting on June 10, 2020 to review the materials provided and the relevant legal considerations (together with the Quarterly Meeting, the "Meetings"). AAML is an affiliate of ASII. ASII and the Sub-Adviser are sometimes referred to collectively as the "Advisers."
In connection with their consideration of whether to approve the continuation of the Agreements, the Board members received and reviewed a variety of information provided by the Advisers relating to the Funds, the Agreements and the Advisers, including fee and expense information, comparative performance, and other information regarding the nature, extent and quality of services provided by the Advisers under their respective Agreements. The materials provided to the Board generally included, among other items: (i) information on the investment performance of the Funds and the performance of peer groups of funds and the Funds' performance benchmarks; (ii) information on the Funds' advisory fees and other expenses, including information comparing each Fund's expenses to those of a peer group of funds and information about any applicable expense limitations and fee "breakpoints"; (iii) information about the profitability of the Agreements to the Advisers; (iv) a report prepared by the Advisers in response to a request submitted by the Independent Trustees' independent legal counsel on behalf of such Trustees; (v) a memorandum from the Independent Trustees' independent legal counsel on the responsibilities of the Board in considering for approval the investment advisory and investment sub-advisory arrangements under the 1940 Act and Delaware law; and (vi) sales and redemption data with respect to each Fund. The Board, including the Independent Trustees, also considered other matters such as: (i) each Fund's investment objective and strategies; (ii) the Advisers' financial results and financial condition; (iii) the Advisers' investment personnel and operations; (iv) arrangements relating to the distribution of the Funds' shares and the related costs; (v) the procedures employed to determine the value of the Funds' assets; (vi) the resources devoted to, and the record of compliance with, the Funds' investment policies and restrictions, policies on personal securities transactions and other compliance policies; (vii) the allocation of the Funds' brokerage, if any, including, if applicable, allocations to brokers affiliated with the Advisers and the use, if any, of "soft" commission dollars to pay Fund expenses and to pay for research and other similar services; and (viii) possible conflicts of interest. The Board also considered the nature, extent and quality of the services provided to the Funds by ASII's affiliates. Throughout the process, the Trustees were afforded the opportunity to ask questions of and request additional information from ASII and the Sub-Advisers.
In addition to the materials requested by the Trustees in connection with their annual consideration of the continuation of the Agreements, the Trustees received and reviewed materials in advance of each regular quarterly meeting of the Board that contained information relating to the services provided by the Advisers, including detailed information about each Fund's investment performance. This information generally included, among other things, third-party performance rankings for various periods (including, as applicable, periods prior to the Advisers' management of the Funds) comparing each Fund against its respective peer group, total return information for the Funds for various periods, and details of sales and redemptions of Fund shares for the period. The Board also received periodic presentations from the portfolio management teams in connection with the performance of the Funds.
The Independent Trustees were advised by separate independent legal counsel throughout the process. The Independent Trustees also consulted in executive sessions with their independent legal counsel regarding consideration of the continuation of the Agreements. In considering whether to approve the continuation of the Agreements, the Board of Trustees, including the Independent Trustees, did not identify any single factor as determinative. Individual Trustees may have evaluated the information presented differently from one another, giving different weights to various factors. Matters considered by the Trustees, including the Independent Trustees, in connection with their approval of the continuation of the Agreements included the factors listed below.
Investment performance of the Funds and the Advisers. The Board received and reviewed with management, among other performance data, information about the performance of the Funds over various time periods, including information that compared the performance of the Funds to the performance of peer groups of funds and each Fund's performance benchmark. The Trustees reviewed and considered the Funds that had changed their investment strategies during the year and that certain of the Funds had changed their respective performance benchmarks to better reflect the respective Fund's investment strategy. In addition, the Trustees also reviewed data prepared by an independent third party that analyzed the performance of the Funds using a variety of performance metrics. The Trustees also considered the performance of the Funds compared to the performance of comparable funds or accounts managed by ASII and its affiliates to the extent available.
98 | 2020 Annual Report |
Supplemental Information (Unaudited) (continued)
The Trustees also considered ASII's and the Sub-Advisers' performance and reputation generally, the historical responsiveness of ASII to Trustee concerns about performance, the performance of the fund family generally, and the willingness of ASII and the Sub-Advisers to take steps intended to improve performance. The Trustees also considered, as applicable, the performance of the Advisers since they commenced management of the Funds.
Based on these factors, the Board determined that the Advisers are appropriate investment advisers for the Funds.
The Board noted that it would continue to monitor the Funds' performance and any actions taken by ASII and its affiliates relating to performance.
The costs of the services provided and profits realized by the Advisers and their affiliates from their relationships with the Funds. The Trustees considered the fees charged to the Funds for advisory services as well as the total expense levels of the Funds. This information included comparisons (provided by an independent third party) of each Fund's net management fee and total expense level to those of its expense peer group and information about the advisory fees charged by ASII to any separately managed accounts with a similar strategy. In reviewing the comparison of each Fund's net management fee to that of comparable funds, the Board noted that the fee for the Funds includes both advisory and administrative fees. In evaluating the Funds' advisory fees, the Trustees considered the demands, complexity and quality of the investment management of the Funds. In considering the fees charged by ASII to any comparable accounts, the Trustees also considered, among other things, management's discussion of the different investment restrictions, objectives or policies that may be involved in managing accounts of different types.
The Trustees also noted that the sub-advisory fees, as applicable, for the Funds would not be paid by the Funds, but would be paid by ASII out of its advisory fee. The Board also considered that ASII had entered into or renewed expense limitation agreements with each of the Funds, pursuant to which ASII agreed to waive a portion of its advisory fee and/or reimburse certain expenses as a means of limiting each Fund's total annual operating expenses for a period of time. The Trustees also noted that ASII had agreed to increase its expense reimbursements to certain Funds during the year.
The Trustees also considered the compensation ASII and its affiliates received, directly and indirectly, from their relationships with the Funds. The Trustees reviewed information provided by management as to the profitability of ASII and its affiliates' relationships with the Funds, including the engagement of affiliates of ASII to provide administrative and distribution services to the Funds. The Trustees also considered information about the allocation of expenses used to calculate profitability. When reviewing profitability, the Trustees also considered information about the expense levels of the Funds, the performance of the Funds, court cases regarding adviser profitability, and whether ASII had implemented breakpoints and expense limitations with respect to the Funds. The Trustees also examined the profitability of ASII and its affiliates on a Fund-by-Fund basis.
After reviewing these and related factors, including taking into account management's discussion regarding Fund expenses, the Board concluded that the advisory fees, and as applicable, the sub-advisory fees, were fair and reasonable, and that the costs of these services generally and the related profitability of ASII and its affiliates from their relationships with the Funds were reasonable and supported the continuation of the Agreements.
Economies of Scale. The Trustees considered the existence of any economies of scale in the provision of services by ASII and the Sub-Advisers and whether those economies would be shared with the Funds through breakpoints in the investment advisory fees or other means, such as expense waivers or limitations. The Board noted management's discussion of the Funds' advisory fee structure. The Trustees noted that each of the Funds was subject to a contractual expense limitation agreement and considered that certain Funds were subject to breakpoints in their investment advisory fees. The Board also considered how the Funds' potential future growth and increased size would have an effect on fees, noting that if a Fund's assets increase over time, the Fund may realize other economies of scale if assets increase at a proportionally higher rate than the increase in certain expenses. The Trustees also took note of the costs of the services provided and the profitability to ASII and its affiliates from their relationships with the Funds, as discussed above.
After reviewing these and related factors, the Board concluded that the advisory fees, and as applicable, sub-advisory fees were reasonable and supported the continuation of the Agreements.
The nature, extent and quality of the services provided to the Funds under the Agreements. The Trustees considered the nature, extent and quality of the services provided by ASII and the Sub-Advisers, as applicable, to the Funds and the resources dedicated to the Funds by ASII and its affiliates. The Board considered, among other things, the Advisers' investment experience. The Board also considered the background and experience of the Advisers' senior management personnel and the qualifications, background and responsibilities of the portfolio managers that are primarily responsible for the day-to-day portfolio management services for the Funds. The Board also considered the allocation of responsibilities among the Advisers. The Trustees considered not only the advisory services provided by ASII to the Funds, but also the administrative services provided by ASII to the Funds under a separate administration agreement. ASII's role in coordinating the activities of the Trust's other service providers was also considered. The Board also considered the Advisers' risk management processes. The Board also considered that it receives information on a regular basis from the Trust's Chief Compliance Officer regarding the Advisers' compliance policies and procedures. The Board was also mindful of the Advisers' focus on the monitoring of the performance of the Funds and in addressing performance matters. The Trustees also considered the benefits to shareholders of investing in a mutual fund that is part of a family of funds that offers shareholders the right to exchange shares of one type of fund for shares of another type of fund, and provides a variety of fund and shareholder services. The Board also took into account its knowledge of management and the quality of the performance of management's duties through Board meetings, discussion and reports during the preceding year.
2020 Annual Report | 99 |
Supplemental Information (Unaudited) (concluded)
After reviewing these and related factors, the Board concluded that the nature, extent and quality of the services provided supported the continuation of the Agreements.
The Trustees also considered other factors, which included but were not limited to the following:
• | whether the Funds have operated in accordance with their investment objectives as well as the Funds' record of compliance with their investment restrictions, and the compliance programs of the Trust and ASII. The Trustees also considered the compliance-related resources ASII and its affiliates were providing to the Funds. |
• | the nature, quality, cost and extent of administrative services performed by ASII under the Advisory Agreement and under a separate agreement covering administrative services. |
• | so-called "fallout benefits" to ASII, such as the benefits of research made available to ASII by reason of brokerage commissions generated by the Funds' securities transactions or reputational and other indirect benefits. The Trustees considered any possible conflicts of interest associated with these fallout and other benefits, and the reporting, disclosure and other processes in place to disclose and monitor such possible conflicts of interest. |
• | the effect of any market and economic volatility on the performance, asset levels and expense ratios of the Funds. |
• | the nature, quality, cost and extent of administrative services provided by ASII under a separate agreement covering administrative services. |
* * *
Based on their evaluation of all factors that they deemed to be material, including those factors described above, and assisted by the advice of independent counsel, the Trustees, including the Independent Trustees, concluded that renewal of the Agreements would be in the best interest of each of the Funds and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Agreements for an additional one-year period. Pursuant to the SEC Order, the Board determined that the Trustees, including the Independent Trustees, voting separately, would ratify their approval at the next in-person Board meeting.
100 | 2020 Annual Report |
Management of the Funds (Unaudited)
As of October 31, 2020
Board of Trustees and Officers of the Trust
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee** | Other Directorships Held by Trustee During Past 5 Years*** | ||||
Trustees who are not interested persons (as defined in the 1940 Act) of the trust ("Independent Trustees") | ||||||||
Radhika Ajmera**** Year of Birth: 1964 | Trustee since February 2020 | Ms Ajmera has been an Independent Trustee of Aberdeen Funds since February 2020. She is also an independent non-executive director of Aberdeen Asia-Pacific Income Investment Company Limited (Canadian investment fund) since June 2015 and of Aberdeen Japan Equity Fund Inc since September 2014 where she was appointed Chair effective December 2017. | 20 | None. | ||||
P. Gerald Malone**** Year of Birth: 1950 | Trustee since December 2007 Chairman of the Board | Mr. Malone is, by profession, a lawyer of over 40 years. Currently, he is a non-executive director of a number of U.S. companies, including Medality Medical (medical technology company) and Bionik Laboratories Corp. (US healthcare company) since 2018. He is also Chairman of many of the open and closed end funds in the Fund Complex. He previously served as Independent Chairman of UK companies Crescent OTC Ltd (pharmaceutical services) until February 2018; and fluidOil Ltd. (oil services) until June 2018; U.S. company Rejuvenan llc (wellbeing services) until September 2017 and as chairman of UK company Ultrasis plc (healthcare software services company) until October 2014. Mr. Malone was previously a Member of Parliament in the U.K. from 1983 to 1997 and served as Minister of State for Health in the U.K. government from 1994 to 1997. | 27 | Director of Bionik Laboratories Corporation (U.S. healthcare company) since 2018. | ||||
Neville J. Miles**** Year of Birth: 1946 | Trustee since December 2011 | Mr. Miles is a non-executive director of a number of Australian and overseas companies and serves as Chairman of Ballyshaw Pty. Ltd. (share trading, real estate development and investment). | 22 | None. | ||||
Rahn K. Porter**** Year of Birth: 1954 | Trustee since September 2016 | Mr. Porter is the Principal at RPSS Enterprises (consulting) since 2019. He was the Chief Financial and Administrative Officer of The Colorado Health Foundation from 2013 to 2019 and served as Director of BlackRidge Financial Inc. from 2004 to 2019.. | 21 | Director of CenturyLink Investment Management Company since 2006. | ||||
Steven N. Rappaport**** Year of Birth: 1948 | Trustee since September 2016 | Mr. Rappaport has been a Partner of Lehigh Court, LLC (private investment firm) and RZ Capital LLC (private investment firm) since 2004. | 20 | Director of iCAD, Inc. (a surgical and Medical instruments and apparatus company) from 2006 to 2018; Director of Credit Suisse Funds (9) since 1999; Director of Credit Suisse Asset Management Income Fund, Inc. since 2005; and Director of Credit Suisse NEXT Fund since 2013; and Director of Credit Suisse Park View Fund until 2016. |
2020 Annual Report | 101 |
Management of the Funds (Unaudited) (continued)
As of October 31, 2020
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee** | Other Directorships Held by Trustee During Past 5 Years*** | ||||
Warren C. Smith**** Year of Birth: 1955 | Trustee since December 2007 | Mr. Smith has been a founding partner of MRB Partners Inc. (independent investment research and consultancy firm) since 2010. He has been a Director of Aberdeen Asia-Pacific Income Investment Company Limited (Canadian investment fund) since 1993. | 19 | None. | ||||
Trustees who are interested persons (as defined in the 1940 Act) of the trust ("Interested Trustees") | ||||||||
Martin Gilbert****† Year of Birth: 1955 | Trustee since December 2007 | Mr. Gilbert is Chairman of UK companies Revolut Limited (digital banking firm) and Toscafund Asset Management since 2020. He is also a non-executive director of a number of non-U.S. companies, including Glencore plc (producer and marketer of commodities), Saranac Partners (wealth management firm), Old Oak Holdings (Toscafund Asset Management's parent company) and PGA European Tour. Martin is a member of the International Advisory Board of British American Business. Previously, he was Chairman of the UK Prudential Regulation Authority's Practitioner Panel as well as a member of the International Advisory Panel of the Monetary Authority of Singapore. Prior to his retirement from Standard Life Aberdeen plc in 2020, Mr. Gilbert served as Vice Chairman of Standard Life Aberdeen plc and Chairman of Aberdeen Standard Investments Inc. since March 2019. He was a cofounder (and former Chief Executive) of Aberdeen Asset Management PLC, having been a Director since 1983. | 28 | None. |
* | Each Trustee holds office for an indefinite term until his successor is elected and qualified. |
** | The Aberdeen Fund Complex consists of the Trust, which currently consists of 19 portfolios, Aberdeen Asia-Pacific Income Fund, Inc., Aberdeen Global Income Fund, Inc., Aberdeen Australia Equity Fund, Inc., Aberdeen Emerging Markets Equity Income Fund, Inc., The India Fund, Inc., Aberdeen Japan Equity Fund, Inc., Aberdeen Income Credit Strategies Fund, Aberdeen Global Dynamic Dividend Fund, Aberdeen Total Dynamic Dividend Fund, Aberdeen Global Premier Properties Fund, Aberdeen Investment Funds, which currently consists of 4 portfolios, and Aberdeen Standard Investments ETFs, which currently consists of 2 portfolios. |
*** | Current directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
**** | Each Trustee may be contacted by writing to the Trustee c/o Aberdeen Standard Investments Inc., 1900 Market Street, Suite 200, Philadelphia, Pennsylvania 19103, Attn: Alan Goodson. |
† | Mr. Gilbert is considered to be an "interested person" of the Trust as defined in the 1940 Act because of his affiliation with the Adviser. |
102 | 2020 Annual Report |
Management of the Funds (Unaudited) (continued)
As of October 31, 2020
Officers of the Trust
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years |
Bev Hendry** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1953 | President and Chief Executive Officer (Since September 2014) | Currently Chairman of Americas for Standard Life Aberdeen PLC since 2018. Mr. Hendry was Chief Executive Officer – Americas for Aberdeen Asset Management PLC (2014-2018). |
Joseph Andolina** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1978 | Vice President and Chief Compliance Officer (Since March 2017) | Currently, Chief Risk Officer – Americas for ASII and serves as the Chief Compliance Officer for ASII. Prior to joining the Risk and Compliance Department, he was a member of ASII's Legal Department, where he served as US Counsel since 2012. |
Andrea Melia** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1969 | Treasurer, Chief Financial Officer, and Principal Accounting Officer (Since September 2009) | Currently, Vice President and Head of Fund Operations, Traditional Assets – Americas and Vice President for ASII. Ms. Melia joined ASII in September 2009. |
Megan Kennedy** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | Secretary and Vice President (Since September 2009) | Currently, Head of Product Management for ASII Ms. Kennedy joined ASII in 2005 as a Senior Fund Administrator. |
Lucia Sitar** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1971 | Vice President (Since December 2008) | Currently, Vice President and Managing U.S. Counsel for ASII Ms. Sitar joined ASII in July 2007 as U.S. Counsel. |
Alan Goodson** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | Vice President (Since March 2009) | Currently, Head of Product & Client Solutions – Americas, overseeing Product Management, Product Development and Client Solutions for ASII's registered and unregistered investment companies in the US, Brazil and Canada. Mr. Goodson joined ASII in 2000. |
Hugh Young** Aberdeen Standard Investments (Asia) Limited 21 Church Street #01-01 Capital Square Two Singapore 049480 Year of Birth: 1958 | Vice President (Since June 2011) | Currently, Managing Director of Aberdeen Standard Investments (Asia) Limited (since 1991) and member of the Executive Management Committee and Director of Standard Life Aberdeen plc (since 1991 and 2011, respectively). Mr. Young joined Aberdeen in 1991. |
2020 Annual Report | 103 |
Management of the Funds (Unaudited) (continued)
As of October 31, 2020
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | ||
Devan Kaloo** Aberdeen Asset Managers Limited Bow Bells House 1 Bread Street London EC4M 9HH Year of Birth: 1972 | Vice President (Since March 2019) | Currently, Global Head of Equities and Head of Global Emerging Markets Equities for Aberdeen Standard Investments. Mr. Kaloo joined ASI in 2000 as part of the Asian equities team in Singapore. | ||
Joanne Irvine** Aberdeen Asset Managers Limited Bow Bells House 1 Bread Street London EC4M 9HH Year of Birth: 1968 | Vice President (Since March 2019) | Currently, Deputy Head of Emerging Markets on the Global Emerging Markets Equity Team in London at Aberdeen Standard Investments. Ms. Irvine joined the company in 1996 in a group development role. | ||
Josh Duitz** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1970 | Vice President (Since March 2019) | Currently, Senior Vice President in the Global Equities Team at ASII. He joined ASII in 2018. | ||
Svitlana Gubriy** Standard Life Investments 6 St Andrew Square Edinburgh EH2 2BD Year of Birth: 1972 | Vice President (Since March 2019) | Currently, Head of Global REIT Funds at Aberdeen Standard Investments. Ms. Gubriy joined Aberdeen Standard Investments in 2005. | ||
Ben Moser** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1979 | Vice President (Since September 2018) | Currently, Head of Investor Services – US. Mr. Moser joined Aberdeen Standard Investments Inc. in July 2008. | ||
Chris Demetriou** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1983 | Vice President (Since December 2020) | Currently, Chief Executive Officer – Americas for ASI. Mr. Demetriou joined ASII in 2013, as a result of the acquisition of SVG, a FTSE 250 private equity investor based in London. | ||
Jim O'Connor** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1976 | Vice President (Since December 2020) | Currently, Executive Director for Aberdeen Standard Investments Inc. Mr. O'Connor joined ASII in 2010. | ||
Brian O'Neill** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1968 | Assistant Treasurer (Since September 2008) | Currently, Senior Fund Administration Manager – U.S. for Aberdeen Standard Investments Inc. Mr. O'Neill joined Aberdeen Standard Investments Inc. in 2008. |
104 | 2020 Annual Report |
Management of the Funds (Unaudited) (concluded)
As of October 31, 2020
Name, Address, and Year of Birth | Position(s) Held, Length of Time Served and Term of Office* | Principal Occupation During Past 5 Years | ||
Eric Olsen** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1970 | Assistant Treasurer (Since December 2013) | Currently, Deputy Head of Fund Administration – U.S. for Aberdeen Standard Investments Inc. Mr. Olsen joined Aberdeen Standard Investments Inc. in August 2013. | ||
Andrew Kim** Aberdeen Standard Investments Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1983 | Assistant Secretary (Since March 2017) | Currently, Senior Product Manager. Mr. Kim joined Aberdeen Standard Investments Inc. in August 2013. |
* | Each officer holds office for an indefinite term at the pleasure of the Board of Trustees and until his or her successor is elected and qualified. |
** | Mr. Hendry, Ms. Melia, Ms. Kennedy, Mr. Goodson, Mr. Young, Ms. Sitar, Mr. Andolina, Mr. Kaloo, Ms. Irvine, Mr. Duitz, Ms. Gubriy, Mr. Moser, Mr. Olsen , Mr. Demetriou, Mr. O'Connor, Mr. Kim and Mr. O'Neill may serve as officers of one or more other funds in the Fund Complex. |
2020 Annual Report | 105 |
Management Information
Trustees
Radhika Ajmera
Martin J. Gilbert
P. Gerald Malone, Chairman
Neville J. Miles
Rahn K. Porter
Steven N. Rappaport
Warren C. Smith
Investment Adviser
Aberdeen Standard Investments Inc.
1900 Market Street, Suite 200
Philadelphia, PA 19103
Fund Administrator
Aberdeen Standard Investments Inc.
1900 Market Street, Suite 200
Philadelphia, PA 19103
Transfer Agent
DST Asset Manager Solutions, Inc.
430 W. 7th Street, Ste. 219534
Kansas City, MO 64105-1407
Distributor
Aberdeen Fund Distributors LLC
1900 Market Street, Suite 200
Philadelphia, PA 19103
Sub-Administrator, Custodian & Fund Accountant
State Street Bank and Trust Company
1 Lincoln Street
Boston, MA 02111
Independent Registered Public Accounting Firm
KPMG LLP
1601 Market Street
Philadelphia, PA 19103
Fund Counsel
Dechert LLP
1900 K Street N.W.
Washington, DC 20006
Aberdeen Standard Investments Inc.
1900 Market Street, Suite 200
Philadelphia, PA 19103
aberdeenstandard.com/us
AOE-0143-AR |
Item 2. Code of Ethics.
(a) As of October 31, 2020, the Registrant had adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party (the “Code of Ethics”).
(c) There have been no amendments during the period covered by this report to a provision of the Code of Ethics.
(d) During the period covered by the report, the Registrant did not grant any waivers to the provisions of the Code of Ethics.
(f) The Code of Ethics is included with this Form N-CSR as Exhibit 13(a)(1).
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Trustees has determined that there is at least one member who qualifies as an “audit committee financial expert” serving on its Audit Committee. Mr. Rahn K. Porter is the “audit committee financial expert” and is considered to be an “Independent Trustee” as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Fiscal Year Ended | (a) Audit Fees | (b) Audit-Related Fees | (c)1 Tax Fees | (d) All Other Fees | ||||||||||||
October 31, 2020 | $ | 610,658 | $ | 0 | $ | 154,460 | $ | 0 | ||||||||
October 31, 2019 | $ | 707,767 | $ | 0 | $ | 199,730 | $ | 0 |
1 | The Tax Fees are for the completion of the Registrant’s federal and state tax returns. |
(e)(1) Pre-Approval Policies and Procedures. Except as permitted by Rule 2-01(c)(7)(i)(C) of Regulation S-X, the Registrant’s (hereinafter, the “Trust”) Audit Committee Charter authorizes the Audit Committee (“Committee”) to annually select, retain or terminate the Trust’s independent auditor and, in connection therewith, to evaluate the terms of the engagement and the qualifications and independence of the independent auditor, including whether the independent auditor provides any consulting, auditing or tax services to the investment adviser (hereinafter, the “Adviser”) or a sub-adviser, and to receive the independent auditor’s specific representations as to their independence, delineating all relationships between the independent auditor and the Trust, consistent with PCAOB 3526 or any other applicable auditing standard. PCAOB Rule 3526 requires that, at least annually, the auditor: (1) disclose to the Committee in writing all relationships between the auditor and its related entities and the Trust and its related entities that in the auditor’s professional judgment may reasonably be thought to bear on independence; (2) confirm in its letter that, in its professional judgment, it is independent of the Trust within the meaning of the Securities Acts administered by the SEC; and (3) discuss the auditor’s independence with the Committee. The Committee is responsible for actively engaging in a dialogue with the independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditor and for taking, or recommending that the full Board take, appropriate action to oversee the independence of the independent auditor. The Committee is also authorized to review in advance, and consider approval of, any and all proposals by management or the Adviser that the Trust, Adviser or their affiliated persons, employ the independent auditor to render “permissible non-audit services” to the Trust and to consider whether such services are consistent with the independent auditor’s independence. The Committee may delegate to one or more of its members (“Delegates”) authority to pre-approve permissible non-audit services to be provided to the Trust. Any pre-approval determination of a Delegate shall be presented to the full Committee at its next meeting. The Committee shall communicate any pre-approval made by it or a Delegate to the Adviser, who will ensure that the appropriate disclosure is made in the Trust’s periodic reports required by Section 30 of the Investment Company Act of 1940, as amended, and other documents as required under the federal securities laws.
(e)(2) None of the services described in each of paragraphs (b) through (d) of this Item involved a waiver of the pre-approval requirement by the Audit Committee pursuant to Rule 2-01 (c)(7)(i)(C) of Regulation S-X.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the Registrant’s accountant for services to the Registrant and to the Registrant’s investment adviser and all entities controlling, controlled by, or under common control with the Adviser that provide services to the Registrant for the Registrant’s fiscal years ended October 31, 2020 and October 31, 2019 and were $511,685 and $812,167, respectively.
(h) The Registrant’s Audit Committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) or Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence and has concluded that it is.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Included as part of the Reports to Shareholders filed under Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
During the period ended October 31, 2020, there were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11. Controls and Procedures.
(a) The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d15(b)).
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) | The Code of Ethics of the Registrant for the period covered by this report as required pursuant to Item 2 of this Form N-CSR. |
(a)(2) | Certifications of the Registrant pursuant to Rule 30a-2(a) under the Act are exhibits to this report. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications of the Registrant pursuant to Rule 30a-2(b) under the Act are exhibits to this report. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Aberdeen Funds
By: | /s/ Bev Hendry | |
Bev Hendry | ||
Principal Executive Officer | ||
Aberdeen Funds |
Date: January 8, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Bev Hendry | |
Bev Hendry | ||
Principal Executive Officer | ||
Aberdeen Funds |
Date: January 8, 2021
By: | /s/ Andrea Melia | |
Andrea Melia | ||
Principal Financial Officer | ||
Aberdeen Funds |
Date: January 8, 2021