Statement of Investments (continued)
January 31, 2014 (unaudited)
Aberdeen Global High Income
Fund
|
|
|
|
|
|
|
|
|
|
|
Isola USA Corp. (USD), 9.25%, 11/23/2018 (b)
|
|
$
|
32,025,000
|
|
|
$
|
32,825,625
|
|
|
Lonestar Intermediate Holdings LLC (USD), 11.00%, 09/02/2019 (b)
|
|
|
16,570,000
|
|
|
|
17,098,169
|
|
|
McGraw-Hill Global Holdings (USD), 9.00%, 03/22/2019 (b)
|
|
|
14,334,523
|
|
|
|
14,630,173
|
|
|
Navistar International, Inc. (USD), 5.75%, 08/17/2017 (b)
|
|
|
4,446,907
|
|
|
|
4,535,845
|
|
|
Newpage Corp. (USD), 8.75%, 12/21/2018 (b)
|
|
|
14,315,400
|
|
|
|
14,628,549
|
|
|
Pacific Industrial Services US Finco LLC (USD), 8.75%, 04/02/2019 (b)
|
|
|
7,920,000
|
|
|
|
8,132,850
|
|
|
Philadelphia Energy (USD), 6.25%, 04/04/2018 (b)
|
|
|
16,152,938
|
|
|
|
14,648,695
|
|
|
Pinnacle Operating Corp. (USD), 4.75%, 11/15/2018 (b)
|
|
|
11,075,233
|
|
|
|
11,151,375
|
|
|
Redtop Acquisitions, Ltd.
|
|
|
|
|
|
|
|
|
|
(EUR), 0.00%, 12/03/2020 (b)
|
|
|
1,135,000
|
|
|
|
1,546,464
|
|
|
(USD), 8.25%, 12/03/2021 (b)
|
|
|
905,000
|
|
|
|
920,837
|
|
|
Texas Competitive Electric Co. (USD), 3.73%, 10/10/2014 (b)
|
|
|
36,981,952
|
|
|
|
26,072,276
|
|
|
Van Wagner Communications LLC (USD), 6.25%, 08/03/2018 (b)
|
|
|
16,264,759
|
|
|
|
16,569,724
|
|
|
Visant Holding Corp. (USD), 5.25%, 12/22/2016 (b)
|
|
|
11,152,515
|
|
|
|
11,064,890
|
|
|
YRC Worldwide, Inc.
|
|
|
|
|
|
|
|
|
|
(USD), 11.75%, 09/30/2014 (b)
|
|
|
16,628,625
|
|
|
|
16,732,554
|
|
|
(USD), 8.00%, 03/31/2015 (b)
|
|
|
99,804
|
|
|
|
97,496
|
|
|
(USD), 10.50%, 03/31/2015 (b)
|
|
|
6,046,826
|
|
|
|
6,030,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
288,146,951
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Term Loans
|
|
|
|
|
|
|
318,623,028
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON STOCKS (1.8%)
|
|
|
|
|
|
|
|
|
|
NORWAY (1.7%)
|
|
|
|
|
|
|
|
|
|
Deep Ocean (f)(g)
|
|
|
1,427,968
|
|
|
|
43,622,057
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED STATES (0.1%)
|
|
|
|
|
|
|
|
|
|
General Motors Co. *
|
|
|
48,313
|
|
|
|
1,743,133
|
|
|
Motors Liquidation Co. GUC Trust *
|
|
|
59,350
|
|
|
|
1,830,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,574,081
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stocks
|
|
|
|
|
|
|
47,196,138
|
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED STOCKS (1.1%)
|
|
|
|
|
|
|
|
|
|
UNITED STATES (1.1%)
|
|
|
|
|
|
|
|
|
|
Ally Financial, Inc., Preferred Shares (a)(c)
|
|
|
22,432
|
|
|
|
21,822,832
|
|
|
GMAC Capital Trust I, Preferred Shares, Series 2 (b)
|
|
|
255,875
|
|
|
|
7,005,857
|
|
|
Merrill Lynch Capital Trust II, Preferred Shares (b)
|
|
|
1,600
|
|
|
|
39,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,868,593
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Preferred Stocks
|
|
|
|
|
|
|
28,868,593
|
|
|
|
|
|
|
|
|
|
|
|
|
WARRANTS (0.4%)
|
|
|
|
|
|
|
|
|
|
UNITED STATES (0.4%)
|
|
|
|
|
|
|
|
|
|
General Motors Co. *
|
|
|
452,664
|
|
|
|
10,304,896
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Warrants
|
|
|
|
|
|
|
10,304,896
|
|
|
|
|
|
|
|
|
|
|
|
|
REPURCHASE AGREEMENT (6.9%)
|
|
|
|
|
|
|
|
|
|
UNITED STATES (6.9%)
|
|
|
|
|
|
|
|
|
|
State Street Bank, 0.00%, dated 01/31/2014, due 02/03/2014, repurchase price $182,248,122 collateralized by U.S. Treasury Notes,
maturing ranging 05/15/2015-08/31/2015; total market value of $185,898,031
|
|
|
182,248,122
|
|
|
|
182,248,122
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Repurchase Agreement
|
|
|
|
|
|
|
182,248,122
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to statements of
investments.
Statement of Investments (continued)
January 31, 2014 (unaudited)
Aberdeen Global High Income
Fund
|
|
|
|
|
|
|
|
|
Total Investments (Cost $2,479,607,445) (h)—97.6%
|
|
|
|
|
2,564,658,897
|
|
|
|
|
|
|
|
|
|
|
Other assets in excess of liabilities—2.4%
|
|
|
|
|
62,148,794
|
|
|
|
|
|
|
|
|
|
|
Net Assets—100.0%
|
|
|
|
$
|
2,626,807,691
|
|
|
|
|
|
|
|
|
|
|
*
|
Non-income producing security.
|
|
(a)
|
Denotes a security issued under Regulation S or Rule 144A.
|
|
(b)
|
Variable or Floating Rate Security. Rate disclosed is as of January 31, 2014.
|
|
(c)
|
Perpetual bond. This is a bond that has no maturity date, is redeemable and pays a steady stream of interest indefinitely.
|
|
(d)
|
Security is in default.
|
|
(e)
|
The Fund’s adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. Illiquid securities held by the Fund represent 0.00% of net assets as of January 31, 2014.
(unaudited)
|
|
(f)
|
Fair Valued Security. Fair Values are determined pursuant to procedures approved by the Board of Trustees. See Note 1(a) of the accompanying notes to statements of investments.
|
|
(g)
|
Investment in affiliate.
|
|
(h)
|
See notes to statements of investments for tax unrealized appreciation/depreciation of securities.
|
|
EMTN
|
Euro Medium Term Note
|
|
GBP
|
British Pound Sterling
|
|
GMTN
|
Global Medium Term Note
|
At January 31, 2014, 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/
(Depreciation)
|
|
|
United States Dollar/Brazilian Real
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/22/2014
|
|
JPMorgan Chase
Bank N.A
|
|
USD
|
|
|
21,170,217
|
|
|
|
BRL
|
|
|
|
51,278,500
|
|
|
$
|
20,831,465
|
|
|
$
|
338,752
|
|
|
United States Dollar/British Pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/25/2014
|
|
Westpac Banking
Corporation
|
|
USD
|
|
|
143,494,853
|
|
|
|
GBP
|
|
|
|
88,778,500
|
|
|
|
145,920,218
|
|
|
|
(2,425,365
|
)
|
|
United States Dollar/Canadian Dollar
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/05/2014
|
|
JPMorgan Chase
Bank N.A
|
|
USD
|
|
|
71,149,573
|
|
|
|
CAD
|
|
|
|
76,111,000
|
|
|
|
68,289,595
|
|
|
|
2,859,978
|
|
|
United States Dollar/Euro
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/13/2014
|
|
JPMorgan Chase
Bank N.A
|
|
USD
|
|
|
54,662,839
|
|
|
|
EUR
|
|
|
|
40,751,500
|
|
|
|
54,961,659
|
|
|
|
(298,820
|
)
|
|
04/24/2014
|
|
JPMorgan Chase
Bank N.A
|
|
USD
|
|
|
1,621,930
|
|
|
|
EUR
|
|
|
|
1,197,500
|
|
|
|
1,615,135
|
|
|
|
6,795
|
|
See accompanying notes to statements of
investments.
Statement of Investments (concluded)
January 31, 2014 (unaudited)
Aberdeen Global High Income
Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/29/2014
|
|
Deutsche Bank
AG London
|
|
USD
|
|
|
116,841,938
|
|
|
EUR
|
|
|
85,459,000
|
|
|
$
|
115,263,833
|
|
|
$
|
1,578,105
|
|
|
United States Dollar/Norwegian Krone
|
|
|
02/13/2014
|
|
JPMorgan Chase
Bank N.A
|
|
USD
|
|
|
31,597,031
|
|
|
NOK
|
|
|
194,960,000
|
|
|
|
31,046,959
|
|
|
|
550,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
437,928,864
|
|
|
$
|
2,609,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Certain contracts with different trade dates and like characteristics have been shown net.
|
At January 31, 2014, the Fund held the following credit default swaps:
Sell Protection:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counterparty
|
|
Expiration
Date
|
|
|
Notional
Amount
|
|
|
Swap Details
|
|
Unrealized
Appreciation/
(Depreciation)
|
|
|
Implied
Credit
Spread*
|
|
|
UBS AG
|
|
|
12/20/2016
|
|
|
|
4,320,000
|
|
|
Pay: Grohe Holding Gmbh(T)
Receive: Fixed
rate equal to 5.00%
|
|
$
|
800,426
|
|
|
|
0.30
|
%
|
|
Deutsche Bank
|
|
|
12/20/2016
|
|
|
|
4,320,000
|
|
|
Pay: Grohe Holding Gmbh(T)
Receive: Fixed
rate equal to 5.00%
|
|
|
1,462,720
|
|
|
|
0.30
|
%
|
|
Goldman Sachs International
|
|
|
12/20/2017
|
|
|
|
8,440,000
|
|
|
Pay: Chesapeake Energy(T)
Receive: Fixed
rate equal to 5.00%
|
|
|
1,141,349
|
|
|
|
1.44
|
%
|
|
Goldman Sachs International
|
|
|
12/20/2017
|
|
|
|
9,935,000
|
|
|
Pay: Chesapeake Energy(T)
Receive: Fixed
rate equal to 5.00%
|
|
|
2,014,131
|
|
|
|
1.44
|
%
|
|
Goldman Sachs International
|
|
|
12/20/2017
|
|
|
|
9,940,000
|
|
|
Pay: Chesapeake Energy(T)
Receive: Fixed
rate equal to 5.00%
|
|
|
2,015,145
|
|
|
|
1.44
|
%
|
|
Deutsche Bank
|
|
|
03/20/2018
|
|
|
|
3,460,000
|
|
|
Pay: Rite Aid(T)
Receive: Fixed rate equal
to 5.00%
|
|
|
527,823
|
|
|
|
2.03
|
%
|
|
Goldman Sachs International
|
|
|
03/20/2018
|
|
|
|
5,000,000
|
|
|
Pay: Rite Aid(T)
Receive: Fixed rate equal
to 5.00%
|
|
|
762,751
|
|
|
|
2.03
|
%
|
|
Goldman Sachs International
|
|
|
03/20/2018
|
|
|
|
5,000,000
|
|
|
Pay: Rite Aid(T)
Receive: Fixed rate equal
to 5.00%
|
|
|
775,251
|
|
|
|
2.03
|
%
|
|
Morgan Stanley
|
|
|
06/20/2018
|
|
|
|
4,500,000
|
|
|
Pay: New Albertsons(T)
Receive: Fixed rate
equal to 5.00%
|
|
|
92,890
|
|
|
|
6.83
|
%
|
|
Morgan Stanley
|
|
|
06/20/2018
|
|
|
|
4,515,000
|
|
|
Pay: New Albertsons(T)
Receive: Fixed rate
equal to 5.00%
|
|
|
104,487
|
|
|
|
6.83
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,696,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
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 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.
|
Centrally cleared credit default
swap agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
Maturity
|
|
|
|
|
|
Appreciation/
|
|
|
Pay/Receive Floating Rate
|
|
Floating Rate Index
|
|
Fixed Rate
|
|
|
Date
|
|
|
Notional Amount
|
|
|
(Depreciation)
|
|
|
Pay
|
|
Markit CDX North America
High Yield (S20)
|
|
|
5.00
|
%
|
|
|
6/20/2018
|
|
|
|
USD 50,600,000
|
|
|
$
|
1,099,167
|
|
|
Pay
|
|
Markit CDX North America
High Yield (S20)
|
|
|
5.00
|
%
|
|
|
12/20/2018
|
|
|
|
USD 31,660,000
|
|
|
|
(172,220
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
926,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to statements of
investments.
Notes to Statements of Investments (unaudited)
January 31, 2014
1. Summary of Significant Accounting Policies
The
following is a summary of significant accounting policies followed by the Aberdeen Investment Funds (the “Trust”) and Aberdeen Global Select Opportunities Fund Inc. (the “Global Select Opportunities Fund”) in the preparation of
their financial statements. (Each series of the Trust and the Global Select Opportunities Fund are also referred to herein as a “Fund” or collectively, the “Funds”.) The policies conform to accounting principles generally
accepted 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 books and 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.
Each Fund’s assets for which market quotations are readily available
are valued at fair value on the basis of quotations furnished by a pricing service or provided by securities dealers. Equity investments are generally valued using the last sale price or official closing price taken from the primary market in which
each security trades, or if no sales occurred during the day, at the mean of the current quoted bid and ask prices.
Fixed income securities are generally
valued using prices provided directly by independent third party services or provided directly from one or more broker dealers or market makers, each in accordance with valuation procedures (“Valuation Procedures”) approved by the Global
Select Opportunities Fund’s Board of Director’s, and the Trust’s Board of Trustees (each, a “Board” and collectively, “the Boards”), as applicable. The pricing services may use valuation models or matrix pricing,
which consider yield or prices with respect to comparable bond quotations from bond dealers or by reference to other securities that are considered comparable in such characteristics as credit rating, interest rates and maturity date, to determine
current fair value.
Assets and liabilities initially expressed in foreign currency will be converted into U.S. dollar values. Short-term
dollar-denominated investments of appropriate credit quality that mature in 60 days or less are valued on the basis of amortized cost, which approximates fair value. To the extent each Fund invests in other open-end funds, the Fund will calculate
its Net Asset Value (“NAV”) based upon the NAV of the underlying funds in which it invests. The prospectuses of these underlying funds explain the circumstances under which they will use good faith fair value pricing and the effects of
such fair value pricing.
When market quotations or exchange rates are not readily available, or if the Funds’ investment adviser, Aberdeen Asset
Management Inc. (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. For options,
swaps and warrants, a fair value price may be determined using readily available market quotations, prices provided by independent pricing services, or by using modeling tools provided by industry accepted financial data service providers. Key
inputs to such tools may include yield and prices from comparable or reference assets, maturity or expiration dates, ratings, and interest rates. In addition, the Adviser, through its pricing committee, may determine the fair value price based upon
multiple factors as set forth in the Valuation Procedures approved by the Boards.
The closing prices of domestic or foreign securities may not reflect
their market values at the time the Funds calculate their respective NAVs if an event that materially affects the value of those securities has occurred since the closing prices were established on the domestic or foreign exchange market, but before
the Funds’ NAV calculations. Under certain conditions, the Boards have approved an independent pricing service to fair value foreign securities. This is generally accomplished by adjusting the closing price for movements in correlated indices,
securities or derivatives. Fair value pricing may cause the value of the security on the books of the Funds to be different from the closing value on the non-U.S. exchange and may affect the calculation of a Fund’s NAV. Certain Funds may fair
value securities in other situations, for example, when a particular foreign market is closed but the Funds are pricing their shares.
Notes to Statements of Investments (unaudited) (continued)
January 31, 2014
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, 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 measurements to valuations based upon unadjusted quoted
prices in active markets for identical assets, Level 2 measurements to valuations, based upon significant observable inputs, including adjusted quoted prices in active markets for identical assets, and Level 3 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, which are 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. The three-tier 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 the Fund’s own assumptions in determining the
fair value of investments).
For movements between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing transfers at
the end of each period.
The Funds will fair value foreign securities when the Adviser does not believe that the closing prices are reflective of fair
value due to significant events that occurred subsequent to the close of the foreign markets but before the Funds’ NAV calculations. When securities are fair valued under this method, they will be classified as Level 2 which may result in
significant transfers between Level 1 and Level 2. The number of days on which fair value prices will be used depends on market activity. It is possible that fair value prices will be used by the Funds to a significant extent. During the period
ended January 31, 2014, Funds had transfers between Level 1 and Level 2 because there was a valuation factor applied at January 31, 2014 not applied at prior year end. For the period ended January 31, 2014 there have been no
significant changes to the fair valuation methodologies. The following is a summary of Funds which had significant transfers between Level 1 and Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfer from
Level 1
|
|
|
Transfer from
Level 2
|
|
|
Aberdeen Global Select Opportunities Fund Inc.
|
|
$
|
3,626,216
|
|
|
$
|
—
|
|
|
Aberdeen Select International Equity Fund
|
|
|
435,539,544
|
|
|
|
—
|
|
|
Aberdeen Select International Equity Fund II
|
|
|
214,861,464
|
|
|
|
—
|
|
The following is a summary of the inputs used as of January 31, 2014 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEVEL 1 -
Quoted
Prices ($)
|
|
|
LEVEL 2 -
Other
Significant
Observable
Inputs ($)
|
|
|
LEVEL 3 -
Significant
Unobservable
Inputs ($)
|
|
|
Total ($)
|
|
|
Global Select Opportunities Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks
|
|
$
|
3,006,078
|
|
|
$
|
3,626,217
|
|
|
$
|
—
|
|
|
$
|
6,632,295
|
|
|
Preferred Stocks
|
|
|
588,009
|
|
|
|
—
|
|
|
|
—
|
|
|
|
588,009
|
|
|
Repurchase Agreement
|
|
|
—
|
|
|
|
368,179
|
|
|
|
—
|
|
|
|
368,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,594,087
|
|
|
$
|
3,994,396
|
|
|
$
|
—
|
|
|
$
|
7,588,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select International Equity Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks
|
|
$
|
74,044,423
|
|
|
$
|
413,056,584
|
|
|
$
|
1,995,669
|
|
|
$
|
489,096,676
|
|
|
Exchange Traded Funds
|
|
|
—
|
|
|
|
—
|
|
|
|
1,389,510
|
|
|
|
1,389,510
|
|
|
Government Bonds
|
|
|
—
|
|
|
|
—
|
|
|
|
1,323,213
|
|
|
|
1,323,213
|
|
|
Preferred Stocks
|
|
|
34,918,926
|
|
|
|
22,482,960
|
|
|
|
—
|
|
|
|
57,401,886
|
|
|
Repurchase Agreement
|
|
|
—
|
|
|
|
4,375,132
|
|
|
|
—
|
|
|
|
4,375,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
108,963,349
|
|
|
$
|
439,914,676
|
|
|
$
|
4,708,392
|
|
|
$
|
553,586,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Statements of Investments (unaudited) (continued)
January 31, 2014
Select International Equity Fund
Rollforward of Level 3 Fair Value Measurement
For the Period Ended January 31, 2014
Asset Valuation Inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in
Securities
|
|
Balance
as of
October
31, 2013
|
|
|
Accrued
Discounts
(Premiums)
|
|
|
Realized
Gain
(Loss)
|
|
|
Change in
Unrealized
Appreciation
(Depreciation)
|
|
|
Net
Purchases
|
|
|
Net
Sales
|
|
|
Net
Transfers
in to
Level 3
|
|
|
Net
Transfers
out of
Level 3
|
|
|
Balance
as of
January
31, 2014
|
|
|
Change in
Unrealized
Appreciation
(Depreciation)
from
Investments
Held at
January 31,
2014
|
|
|
COMMON STOCKS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bulgaria
|
|
$
|
2,291,326
|
|
|
$
|
—
|
|
|
$
|
(15,802,654
|
)
|
|
$
|
15,813,145
|
|
|
$
|
—
|
|
|
$
|
(384,372
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,917,445
|
|
|
$
|
(15,662
|
)
|
|
Latvia
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Serbia
|
|
|
80,145
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,921
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
78,224
|
|
|
|
(1,921
|
)
|
|
Venezuela
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
EXCHANGE TRADED FUNDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia
|
|
|
1,389,510
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,389,510
|
|
|
|
—
|
|
|
GOVERNMENT BONDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venezuela
|
|
|
1,849,035
|
|
|
|
(3,404
|
)
|
|
|
—
|
|
|
|
(522,418
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,323,213
|
|
|
|
(522,418
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
5,610,016
|
|
|
$
|
(3,404
|
)
|
|
$
|
(15,802,654
|
)
|
|
$
|
15,288,806
|
|
|
$
|
—
|
|
|
$
|
(384,372
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,708,392
|
|
|
$
|
(540,001
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEVEL 1 -
Quoted
Prices ($)
|
|
|
LEVEL 2 -
Other
Significant
Observable
Inputs ($)
|
|
|
LEVEL 3 -
Significant
Unobservable
Inputs ($)
|
|
|
Total ($)
|
|
|
Select international Equity Fund II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks
|
|
$
|
36,526,822
|
|
|
$
|
204,108,744
|
|
|
$
|
—
|
|
|
$
|
240,635,566
|
|
|
Preferred Stocks
|
|
|
16,882,955
|
|
|
|
10,752,720
|
|
|
|
—
|
|
|
|
27,635,675
|
|
|
Repurchase Agreement
|
|
|
—
|
|
|
|
2,197,756
|
|
|
|
—
|
|
|
|
2,197,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
53,409,777
|
|
|
$
|
217,059,220
|
|
|
$
|
—
|
|
|
$
|
270,468,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aberdeen Total Return Bond Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-Backed Securities
|
|
|
—
|
|
|
|
134,781,539
|
|
|
|
—
|
|
|
|
134,781,539
|
|
|
Commercial Mortgage-Backed Securities
|
|
|
—
|
|
|
|
275,677,531
|
|
|
|
12,405,758
|
|
|
|
288,083,289
|
|
|
Corporate Bonds
|
|
|
—
|
|
|
|
454,029,306
|
|
|
|
—
|
|
|
|
454,029,306
|
|
|
Municipal Bonds
|
|
|
—
|
|
|
|
56,366,143
|
|
|
|
—
|
|
|
|
56,366,143
|
|
|
Government Bonds
|
|
|
—
|
|
|
|
208,529,572
|
|
|
|
—
|
|
|
|
208,529,572
|
|
|
Government Agencies
|
|
|
—
|
|
|
|
2,486,431
|
|
|
|
—
|
|
|
|
2,486,431
|
|
|
U.S. Agencies
|
|
|
—
|
|
|
|
200,578,082
|
|
|
|
—
|
|
|
|
200,578,082
|
|
|
U.S. Treasuries
|
|
|
—
|
|
|
|
96,330,508
|
|
|
|
—
|
|
|
|
96,330,508
|
|
|
Repurchase Agreement
|
|
|
—
|
|
|
|
108,632,260
|
|
|
|
—
|
|
|
|
108,632,260
|
|
|
Other Financial Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts
|
|
|
—
|
|
|
|
404,643
|
|
|
|
—
|
|
|
|
404,643
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts
|
|
|
—
|
|
|
|
(196,520
|
)
|
|
|
—
|
|
|
|
(196,520
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
1,537,619,495
|
|
|
|
12,405,758
|
|
|
|
1,550,025,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return Bond Fund
Rollforward of Level 3 Fair Value Measurement
For the Period Ended January 31, 2014
Asset Valuation Inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in
Securities
|
|
Balance
as of
October
31, 2013
|
|
|
Accrued
Discounts
(Premiums)
|
|
|
Realized
Gain
(Loss)
|
|
|
Change in
Unrealized
Appreciation
(Depreciation)
|
|
|
Net
Purchases
|
|
|
Net
Sales
|
|
|
Net
Transfers
in to
Level 3
|
|
|
Net
Transfers
out of
Level 3
|
|
|
Balance
as of
January
31, 2014
|
|
|
Change in
Unrealized
Appreciation
(Depreciation)
from
Investments
Held at
January
31, 2014
|
|
|
ASSET-BACKED SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
12,663,773
|
|
|
$
|
—
|
|
|
$
|
(43
|
)
|
|
$
|
193,357
|
|
|
$
|
—
|
|
|
$
|
(451,329
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,405,758
|
|
|
$
|
193,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
12,663,773
|
|
|
$
|
—
|
|
|
$
|
(43
|
)
|
|
$
|
193,357
|
|
|
$
|
—
|
|
|
$
|
(451,329
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,405,758
|
|
|
$
|
193,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEVEL 1 -
Quoted
Prices ($)
|
|
|
LEVEL 2 -
Other
Significant
Observable
Inputs ($)
|
|
|
LEVEL 3 -
Significant
Unobservable
Inputs ($)
|
|
|
Total ($)
|
|
|
Aberdeen Global High Income Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Bonds
|
|
|
—
|
|
|
|
1,860,239,525
|
|
|
|
48,095
|
|
|
|
1,860,287,620
|
|
|
Government Bonds
|
|
|
—
|
|
|
|
102,298,245
|
|
|
|
—
|
|
|
|
102,298,245
|
|
|
Government Agencies
|
|
|
—
|
|
|
|
14,832,255
|
|
|
|
—
|
|
|
|
14,832,255
|
|
|
Term Loans
|
|
|
—
|
|
|
|
236,482,325
|
|
|
|
82,140,703
|
|
|
|
318,623,028
|
|
|
Common Stocks
|
|
|
3,574,081
|
|
|
|
—
|
|
|
|
43,622,057
|
|
|
|
47,196,138
|
|
|
Preferred Stocks
|
|
|
7,045,761
|
|
|
|
21,822,832
|
|
|
|
—
|
|
|
|
28,868,593
|
|
|
Warrants
|
|
|
10,304,896
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,304,896
|
|
|
Repurchase Agreement
|
|
|
—
|
|
|
|
182,248,122
|
|
|
|
—
|
|
|
|
182,248,122
|
|
|
Other Financial Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts
|
|
|
—
|
|
|
|
5,333,702
|
|
|
|
—
|
|
|
|
5,333,702
|
|
|
Credit Default Swaps Contracts
|
|
|
—
|
|
|
|
9,696,973
|
|
|
|
—
|
|
|
|
9,696,973
|
|
|
Centrally Cleared Credit Default Swaps Contracts
|
|
|
—
|
|
|
|
1,099,167
|
|
|
|
—
|
|
|
|
1,099,167
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Exchange Contracts
|
|
|
—
|
|
|
|
(2,724,185
|
)
|
|
|
—
|
|
|
|
(2,724,185
|
)
|
|
Credit Default Swaps Contracts
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Centrally Cleared Credit Default Swaps Contracts
|
|
|
—
|
|
|
|
(172,220
|
)
|
|
|
—
|
|
|
|
(172,220
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,924,738
|
|
|
|
2,431,156,741
|
|
|
|
125,810,855
|
|
|
|
2,577,892,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Statements of Investments (unaudited) (continued)
January 31, 2014
Global High Income Fund
Rollforward of Level 3 Fair Value Measurement
For the Period Ended January 31, 2014
Asset Valuation Inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
in Securities
|
|
Balance
as of
October
31, 2013
|
|
|
Accrued
Discounts
(Premiums)
|
|
|
Realized
Gain
(Loss)
|
|
|
Change in
Unrealized
Appreciation
(Depreciation)
|
|
|
Net
Purchases
|
|
|
Net
Sales
|
|
|
Net
Transfers
in to
Level 3
|
|
|
Net
Transfers
out of
Level 3
|
|
|
Balance
as of
January
31, 2014
|
|
|
Change in
Unrealized
Appreciation
(Depreciation)
from
Investments
Held
at
January
31, 2014
|
|
|
TERM LOANS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
50,905,340
|
|
|
$
|
36,009
|
|
|
$
|
1,534
|
|
|
$
|
1,142,647
|
|
|
$
|
31,712,450
|
|
|
$
|
(86,074
|
)
|
|
$
|
14,998,521
|
|
|
$
|
(16,569,724
|
)
|
|
$
|
82,140,703
|
|
|
$
|
1,287,633
|
|
|
COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Norway
|
|
|
32,749,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,872,307
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
43,622,057
|
|
|
|
10,872,307
|
|
|
CORPORATE BONDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
78,069,504
|
|
|
|
—
|
|
|
|
896,825
|
|
|
|
(705,408
|
)
|
|
|
—
|
|
|
|
(13,266,825
|
)
|
|
|
—
|
|
|
|
(64,946,001
|
)
|
|
|
48,095
|
|
|
|
4,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
161,724,594
|
|
|
$
|
36,009
|
|
|
$
|
898,359
|
|
|
$
|
11,309,546
|
|
|
$
|
31,712,450
|
|
|
$
|
(13,352,899
|
)
|
|
$
|
14,998,521
|
|
|
$
|
(81,515,725
|
)
|
|
$
|
125,810,855
|
|
|
$
|
12,164,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts listed as “–” are $0 or round to $0.
The following is quantitative information about level 3 fair value measurements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Fair Value at
1/31/14 ($)
|
|
|
Valuation
Technique(s)
|
|
Unobservable
Inputs
|
|
Range
|
|
|
Weighted
Average
|
|
|
Global High Income Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans
|
|
$
|
82,140,703
|
|
|
Broker Pricing
|
|
Bid/Ask Spread
|
|
$
|
99.88-$102.50
|
|
|
$
|
101.41
|
|
|
Common Stocks
|
|
|
43,622,057
|
|
|
Broker Pricing
|
|
Bid/Ask Spread
|
|
$
|
27.00-$33.50
|
|
|
$
|
30.50
|
|
|
Corporate Bonds
|
|
|
48,095
|
|
|
Broker Pricing
|
|
Bid/Ask Spread
|
|
$
|
3.00-$3.41
|
|
|
$
|
3.21
|
|
(b) Repurchase Agreements
The Funds may enter into repurchase agreements under the terms of a Master Repurchase Agreement. It is each Fund’s policy that its custodian/counterparty
segregate the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. The repurchase price generally equals the price paid by a Fund plus interest negotiated on the
basis of current short-term rates. To the extent that any repurchase transaction exceeds one business day, the collateral is valued on a daily basis to determine its adequacy. Under the Master Repurchase Agreement, if the counterparty defaults and
the value of the collateral declines, or if bankruptcy proceedings are commenced with respect to the counterparty of the security, realization of the collateral by the Funds may be delayed or limited.
(c) 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 (the “1933 Act”). 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.
(d) Foreign Currency
Translation
Foreign currency amounts are translated into U.S. Dollars at the current rate of exchange as of 11:00am Eastern time for Equity Funds and
as of 4:00pm Eastern time for Fixed Income Funds (“Valuation Time”), to determine the value of investments, assets and liabilities. 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.
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.
Investments
in emerging markets can be riskier and more volatile than investments in the United States and other developed markets. Adverse political and economic developments can make it more difficult for the Aberdeen Select International Equity Fund
(“International Equity Fund”) to sell its foreign securities which could reduce the NAV of the International Equity Fund. In contrast to more established markets, emerging markets may have governments that are less stable and markets that
are less liquid, increasing your investment risk. At January 31, 2014, the International Equity Fund had 0.2% of its net assets invested in Venezuelan securities and held Venezuelan Bolivar valued at 0.1% of the International Equity Fund’s
net assets. Venezuela currently imposes foreign exchange controls which prohibit the International Equity Fund from repatriating dividends, interest, or other income from investments or proceeds from the sale of Venezuelan securities.
Notes to Statements of Investments (unaudited) (continued)
January 31, 2014
(e) Derivative Financial Instruments
The 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.
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 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 the Fund as unrealized appreciation or 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.
During the period, 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.
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 net asset value after taking into account unrealized profits and unrealized losses on any such contract 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. 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.
Should market conditions change unexpectedly, a Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of
futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the value/market value of the underlying hedged assets. During the period, futures contracts were
used to manage the interest rate risks and raise the efficiency of the Funds.
The Funds entered into swap contracts that function similar to futures
contracts (“synthetic futures”) to gain exposure and to protect against changes in security values. Generally, synthetic futures are counterparty agreements and do not require daily variation margin payments to be directly paid to the
counterparty; however, they do require hard segregation of cash. These amounts are included on the Statement of Assets and Liabilities as cash on deposit with a broker. In connection with their use of synthetic futures, the Funds are exposed to the
credit risk of the counterparty in addition to the risks
Notes to Statements of Investments (unaudited) (continued)
January 31, 2014
described above. The accounting treatment of synthetic futures is similar to that described above for standard futures contracts. The Funds disclose synthetic futures with other futures
contracts. The Funds’ maximum risk of loss associated with futures contracts is minimal since futures contracts are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures contracts, guarantees the
futures contracts against default. The Fund’s maximum risk of loss due to counterparty credit risk for synthetic futures contracts is the unrealized appreciation for synthetic futures contracts.
Swaps
Certain Funds enter into swaps to efficiently gain
or hedge interest rate or currency risk. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates 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 net amount of the
difference between the two payments. Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the
net interest payment to be received by a Fund, and/or the termination value at the end of the contract. Therefore, a Fund considers the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks
may arise from unanticipated movements in interest rates or in the value of the underlying reference asset or index. A Fund records unrealized gains/(losses) on a daily basis representing the value and the current net receivable or payable relating
to open swap contracts. Net amounts received or paid on the swap contract are recorded as realized gains/(losses). Fluctuations in the value of swap contracts are recorded for financial statement purposes as unrealized appreciation or depreciation
of swap contracts. Realized gains/(losses) from terminated swaps are included in net realized gains/(losses) on swap contracts transactions.
Certain
Funds are a party to International Swap Dealers Association, Inc. Master Agreements (“ISDA Master Agreements”). These agreements are with select counterparties and they govern transactions, including certain over-the-counter derivative and
foreign exchange contracts, entered into by certain Funds and the counterparty. The ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral, and events of default or termination. The occurrence of
a specified event of termination may give a counterparty the right to terminate all of its contracts and affect settlement of all outstanding transactions under the applicable ISDA Master Agreement.
Credit Default Swaps
Certain Funds use credit default
swap contracts to limit or reduce risk exposure of defaults of corporate and sovereign issuers (i.e., to reduce risk when a Fund owns or has exposure to such issuers), or to create direct or synthetic short or long exposure to domestic or foreign
corporate debt securities or certain sovereign debt securities to which a Fund is not otherwise exposed. As the seller in a credit default swap contract, a Fund would be required to pay the par (or other agreed-upon) value of a referenced debt
obligation to the counterparty in the event of a default (or similar event) by a third party, such as a U.S. or foreign issuer, on the debt obligation. In return, a Fund would receive from the counterparty a periodic stream of payments over the term
of the contract, provided that no event of default (or similar event) occurs. If no event of default (or similar event) occurs, a Fund would keep the stream of payments and would have no payment of obligations. As the seller in a credit default swap
contract, a Fund effectively would add economic leverage to its portfolio because, in addition to its total net assets, a Fund would be subject to investment exposure on the notional amount of the swap. As the purchaser in a credit default swap
contract, a Fund would function as the counterparty referenced in the preceding paragraph. This would involve the risk that the investment might expire worthless. It also would involve credit risk that the seller may fail to satisfy its payment
obligations to a Fund in the event of a default (or similar event). As the purchaser in a credit default swap contract, a Fund’s investment would generate income only in the event of an actual default (or similar event) by the issuer of the
underlying obligation.
Total Return Swaps
The Funds
entered into total return swaps primarily to preserve a return or spread on a particular investment or portion of their portfolio. A total return swap is an agreement to exchange the return on a stock, bond or index for a fixed or variable financing
charge.
Notes to Statements of Investments (unaudited) (continued)
January 31, 2014
The Funds will usually enter into swaps on a net basis, that is, the two payment streams are netted out in a
cash settlement on the payment date or dates specified in the instrument, with a Fund receiving or paying, as the case may be, only the net amount of the two payments. In as much as these swaps are entered into for good faith hedging purposes, the
Adviser believes such obligations do not constitute senior securities under the 1940 Act, and, accordingly, will not treat them as being subject to its borrowing restrictions. The Funds will not enter into any swap transaction unless, at the time of
entering into such transaction, the unsecured long-term debt of the counterparty, combined with any credit enhancements on the swap contracts, is rated at least A by Standard & Poor’s or Moody’s Investors Service or has an
equivalent rating from a nationally recognized statistical rating organization or is determined to be of equivalent credit quality by the Adviser. If there is a default by the counterparty, the Funds may have contractual remedies pursuant to the
agreements related to the transaction.
Entering into swap agreements involves, to varying degrees, elements of credit and market risk in excess of the
amounts recognized on the Statements 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 having a
master netting agreement between the Funds and the counterparties and by the posting of collateral by the counterparties to the Funds to cover the Funds’ exposure to the counterparty.
(f) Term Loans
The Aberdeen Global High Income Fund
(“Global High Income Fund”) may invest in term loans. Term loans include institutionally traded floating and fixed-rate debt obligations generally acquired as a participation interest in or assignment of a loan originated by a lender or
financial institution. Assignments and participations involve credit, interest rate, and liquidity risk. Interest rates on floating rate securities adjust with interest rate changes and/or issuer credit quality. Many such loans are secured, although
some may be unsecured. Loans that are fully secured offer a fund more protection than an unsecured loan in the event of non-payment of scheduled interest or principal. There is no assurance that any collateral securing a loan could be liquidated or,
if liquidated, that such collateral would be of sufficient value to repay the loans taken against it. There may be limited secondary market liquidity for these instruments which could result in volatile pricing for the securities which in turn may
affect the Global High Income Fund’s NAV.
The Global High Income Fund may enter into, or acquire participation in, delayed funding loans and
revolving credit facilities. Delayed funding loans and revolving credit facilities are borrowings in which the Global High Income Fund agrees to make loans up to a maximum amount upon demand by the borrowing issuer for a specified term. A revolving
credit facility differs from a delayed funding loan in that as the borrowing issuer repays the loan, an amount equal to the repayment is again made available to the borrowing issuer under the facility. The borrowing issuer may at any time borrow and
repay amounts so long as, in the aggregate, at any given time the amount borrowed does not exceed the maximum amount. Delayed funding loans and revolving credit facilities usually provide for floating or variable rates of interest.
There are a number of risks associated with an investment in delayed funding loans and revolving credit facilities including credit, interest rate and
liquidity risk and the risks of being a lender. There may be circumstances under which the borrowing issuer’s credit risk may be deteriorating and yet the Global High Income Fund may be obligated to make loans to the borrowing issuer as the
borrowing issuer’s credit continues to deteriorate, including at a time when the borrowing issuer’s financial condition makes it unlikely that such amounts will be repaid. Delayed funding loans and revolving credit facilities may be
subject to restrictions on transfer, and only limited opportunities may exist to resell such instruments. As a result, the Global High Income Fund may be unable to sell such investments at an opportune time or may have to resell them at less than
fair market value. These risks could cause the Global High Income Fund to lose money on its investment, which in turn could affect its returns. The Global High Income Fund currently intends to treat delayed funding loans and revolving credit
facilities for which there is no readily available market as illiquid for purposes of its limitation on illiquid investments. Delayed funding loans and revolving credit facilities are considered to be debt obligations for purposes of the
Trust’s investment restriction relating to the lending of funds or assets by the Global High Income Fund.
At January 31, 2014, there were two
unfunded commitments which amounted to $17,651,448 of par and had cost and fair value of $18,027,885 and $17,196,313, respectively.
Notes to Statements of Investments (unaudited) (continued)
January 31, 2014
(g) 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 is recorded on the ex-dividend date except for certain dividends on foreign securities, which are recorded as soon as a Fund is informed after the ex-dividend date. Interest income is recorded on an accrual
basis using the effective interest method. 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 all of certain
funds at the Trust. For each of the Funds, the method for allocating income, fund level expenses, and realized and unrealized gains or losses among classes is based on the total net asset value of each class’s shares in proportion to the total
net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and Transfer Agent fees) are charged to that class.
2. Tax Information
As of January 31, 2014, the tax cost of securities and the breakdown of unrealized appreciation/(depreciation) for each Fund were as follows:
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Tax Cost of
Securities
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Unrealized
Appreciation
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Unrealized
Depreciation
|
|
|
Net
Unrealized
Appreciation
(Depreciation)
|
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|
Global Select Opportunities Fund
|
|
$
|
7,786,770
|
|
|
$
|
338,471
|
|
|
$
|
(536,758
|
)
|
|
$
|
(198,287
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)
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|
Select International Equity Fund
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|
|
640,790,311
|
|
|
|
25,749,399
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|
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(112,953,293
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)
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|
|
(87,203,894
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)
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|
Select International Equity Fund II
|
|
|
281,074,992
|
|
|
|
12,774,959
|
|
|
|
(23,380,954
|
)
|
|
|
(10,605,995
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)
|
|
Total Return Bond Fund
|
|
|
1,558,141,078
|
|
|
|
26,155,027
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|
|
|
(34,478,975
|
)
|
|
|
(8,323,948
|
)
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|
Global High Income Fund
|
|
|
2,479,607,445
|
|
|
|
129,005,262
|
|
|
|
(43,953,810
|
)
|
|
|
85,051,452
|
|
3. Investments in Affiliated Issuers
An affiliated issuer, as defined under the 1940 Act, is one in which a Fund’s holdings of an issuer represents 5% or more of the outstanding voting
securities of the issuer. A summary of the Funds’ investments in securities of these issuers for the period ended January 31, 2014 is set forth below:
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|
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Affiliate
|
|
Shares Held
January 31, 2014
|
|
|
Purchases
(Cost)
|
|
|
Sales
(Proceeds)
|
|
|
Dividend
Income
|
|
|
Fair Value
January 31, 2014
|
|
|
Aberdeen Select International Equity Fund
|
|
|
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
LEV Insurance
|
|
|
4,078,860
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|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,917,445
|
|
|
Toza Markovic ad Kikinda
|
|
|
78,160
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
78,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,995,669
|
|
|
|
|
|
|
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
|
|
Shares Held
January 31, 2014
|
|
|
Purchases
(Cost)
|
|
|
Sales
(Proceeds)
|
|
|
Dividend
Income
|
|
|
Fair Value
January 31, 2014
|
|
|
Aberdeen Global High Income Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deep Ocean
|
|
|
1,427,968
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,622,057
|
|
Item 2. 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 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 Exchange Act (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 Investment Company Act of 1940 (17 CFR 270.30a-3(d))) that occurred during the
registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
Item 3. Exhibits.
Certification of Principal
Executive Officer and Principal Financial Officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is attached hereto as EX-99.CERT.
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 Investment Funds
|
|
|
|
|
By:
|
|
/s/ Gary Marshall
|
|
|
|
Gary Marshall,
|
|
|
|
Principal Executive Officer
|
|
|
|
|
|
|
March 27, 2014
|
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/ Gary Marshall
|
|
|
|
Gary Marshall,
|
|
|
|
Principal Executive Officer
|
|
|
|
|
|
|
March 27, 2014
|
|
|
|
|
|
By:
|
|
/s/ Andrea Melia
|
|
|
|
Andrea Melia,
|
|
|
|
Principal Financial Officer
|
|
|
|
|
|
|
March 27, 2014
|
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