Lack of Research Limits Advisor Use of Closed End Funds

Financial advisors cite that lack of research coverage and poor information limits their use of closed-end funds. The results were found by a study conducted on behalf of Aberdeen Asset Management Inc. (“Aberdeen”) by Harris Interactive. The online survey conducted last month polled more than 800 financial advisors across wirehouses, regional brokerage firms, independent wealth management shops and other investment advice providers.

Despite the hindrances, nearly all financial advisors (99%) who recommend closed-end funds report these investment vehicles are suitable for a broad array of client portfolios, particularly for individual retirement accounts (89%), post-retiree income generating purposes (80%) and general savings or investment accounts (80%).

Advisors are hungry for information

“The most illuminating result of the closed-end fund survey is that more than 75% of financial advisors are hungry for additional research coverage and/or increased communications from sponsoring asset management firms and other parties,” says Gary Marshall, Head of the Americas at Aberdeen. “These findings are crucial as we continue to expand our closed-end fund communications, portfolio manager webcasts, investment roundtables, fund manager commentaries and educational reports designed to demonstrate the significant benefits of investing in these important investment vehicles."

Significant results of the advisor survey include:

67% of advisors polled who recommend closed-end funds say that they would like to receive more information on closed-end funds
61% state that expanded research coverage of closed-end funds would increase their recommendations
44% of advisors who recommend closed-end funds surveyed feel that the information they receive is inadequate
62% cite that third-party research rating occasionally influence their recommendations
53% who do not recommend closed-end funds do not do so because they feel there is a lack of research on or knowledge about closed-end funds
24% who recommend closed-end funds have more than $100 million in assets under management

“Closed-end funds, one of the oldest types of investment vehicles, offer a unique set of opportunities for investors.1 Their stable asset base and the ability to remain 100% invested—rather than account for daily redemptions and withdrawals—make closed-end funds particularly valuable for investors seeking recurring income and an actively-managed approach to global and emerging market investments,” concluded Marshall.

To listen to a webcast of the Aberdeen Closed-End Fund Survey, please visit: http://mediazone.brighttalk.com/comm/Aberdeen/2324ed6c80-24616-3324-26400

About the Aberdeen Closed-end Fund Survey

This survey was conducted online within the United States by Harris Interactive on behalf of Aberdeen Asset Management Inc. between March 15, 2011 and March 22, 2011 among 805 investment professionals. Potential respondents were targeted in Harris Interactive’s Financial Intermediary Panel and are representative of all advisors and brokers employed at U.S. national wirehouses, regional brokerages, independent insurance and bank broker-dealer firms, and registered investment advisory firms. Respondents met the following criteria: All U.S. residents, age 21 or older, who are producing financial advisors, selling or recommending investments to investors for a fee or commission. No estimates of theoretical sampling error can be calculated; a full methodology is available.

About Aberdeen Asset Management Inc.

Aberdeen Asset Management PLC (“Aberdeen PLC”), parent of Aberdeen Asset Management Inc., was founded in 1983 and has over $287 billion of assets for both institutions and private individuals as of December 31, 2010. We have 1,800 employees, located across 30 offices in 23 countries. Our firm is recognized for its global and emerging markets focus with investment professionals located in the regions and markets in which they specialize.

The Aberdeen Advisers are one of the world’s largest asset managers of emerging market closed-end funds and investment trusts by value and number.2 Aberdeen Asset Management, defined below, directly manages eight NYSE Amex-listed closed-end funds including our largest U.S. listed fund, Aberdeen Asia-Pacific Income Fund (NYSE Amex: FAX ) along with Aberdeen Israel Fund (AMEX NYSE: ISL ), Aberdeen Emerging Markets Telecommunications Fund (NYSE Amex: ETF ), Aberdeen Indonesia Fund (NYSE Amex: IF ), Aberdeen Chile Fund (NYSE Amex: CH ), Aberdeen Global Income Fund (AMEX NYSE: FCO ), Aberdeen Australia Equity Fund (NYSE Amex: IAF ) and Aberdeen Latin America Equity Fund (NYSE Amex: LAQ). Aberdeen serves as investment sub-adviser to two other closed end funds managed by First Trust Advisors L.P.

Aberdeen Asset Management is the marketing name in the U.S. for the following affiliated, registered investment advisers: Aberdeen Asset Management Inc., Aberdeen Asset Management Investment Services Ltd., Aberdeen Asset Management Ltd. and Aberdeen Asset Management Asia Ltd. (collectively, the ‘Aberdeen Advisers’). Each of the Aberdeen Advisers is wholly owned by Aberdeen PLC. “Aberdeen" is a U.S. registered service mark of Aberdeen PLC

Closed-end funds have a one-time initial public offering and then are subsequently traded on the secondary market through one of the stock exchanges. The investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund’s portfolio. There is no assurance that a fund will achieve its investment objective. Past performance does not guarantee future results.

There can be no assurance that the Board will maintain the Fund's distribution rate at a particular level, or that the Board will continue a managed distribution policy. Additionally, distributions may include return of capital as well as net investment income and capital gains. If the Fund's investments do not generate sufficient income, the Fund may be required to liquidate a portion of its portfolio to fund these distributions. If the Fund's distributions consist of a large amount of return of capital, it may result in a deterioration of the Fund's assets.

1 Stock exchange-listed investment companies, also known as closed-end funds, were first invented in the UK in 1868 and are the oldest form of collective investment vehicles. They pre-date mutual funds, invented in the 1920s, and exchange-traded funds, invented in the 1980s. The capital structure of closed-end funds make them popular for income-oriented investments and portfolios of relatively illiquid asset classes.

2 Fund Consultants LLC, Feb. 2011. Criteria for emerging markets inclusion is Standard & Poor’s Emerging Markets Database. Criteria for fund inclusion is at least 75% gross assets invested in emerging markets.

Aberdeen Indonesia Fund ( (delisted) (AMEX:IF)
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