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 811-21636

First Trust/Aberdeen Global Opportunity Income Fund
(Exact name of registrant as specified in charter)

120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Address of principal executive offices) (Zip code)

 

W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)

 

registrant’s telephone number, including area code: (630) 765-8000

Date of fiscal year end: December 31

Date of reporting period: December 31, 2019

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 
 

Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

 

 

First Trust/Aberdeen
Global Opportunity Income Fund (FAM)
Annual Report
For the Year Ended
December 31, 2019

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2019
Caution Regarding Forward-Looking Statements
This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. (“First Trust” or the “Advisor”) and/or Aberdeen Standard Investments Inc. (“ASII” or the “Sub-Advisor”) and their respective representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as “anticipate,” “estimate,” “intend,” “expect,” “believe,” “plan,” “may,” “should,” “would” or other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. When evaluating the information included in this report, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of the Advisor and/or Sub-Advisor and their respective representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.
Performance and Risk Disclosure
There is no assurance that the Fund will achieve its investment objectives. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund. See “Risk Considerations” in the Additional Information section of this report for a discussion of certain other risks of investing in the Fund.
Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and common share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund performance on the Fund’s web page at www.ftportfolios.com.
How to Read This Report
This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund’s performance and investment approach.
By reading the portfolio commentary by the portfolio management team of the Fund, you may obtain an understanding of how the market environment affected the Fund’s performance. The statistical information that follows may help you understand the Fund’s performance compared to that of a relevant market benchmark.
It is important to keep in mind that the opinions expressed by personnel of First Trust and ASII are just that: informed opinions. They should not be considered to be promises or advice. The opinions, like the statistics, cover the period through the date on the cover of this report. The material risks of investing in the Fund are spelled out in the prospectus, the statement of additional information, this report and other Fund regulatory filings.

Shareholder Letter
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Letter from the Chairman and CEO
December 31, 2019
Dear Shareholders,
First Trust is pleased to provide you with the annual report for the First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”), which contains detailed information about the Fund for the twelve months ended December 31, 2019, including a market overview and a performance analysis.
A significant event for the markets in the past year was the decision by the Federal Reserve (the “Fed”) to reverse course with respect to monetary policy. For those who may not follow the Fed closely, after holding its federal funds target rate (upper bound) at an artificially low 0.25% for seven years (December 2008-December 2015) to help stimulate U.S. economic activity, it spent the better part of the next four years (December 2015-July 2019) increasing its benchmark lending rate in an effort to normalize it. Over that period, the Fed increased the rate from 0.25% to 2.50%. To lend some perspective, the average federal funds target rate (upper bound) was 2.95% for the 30-year period ended December 31, 2019, so the Fed came close to achieving its goal of normalizing it, according to data from Bloomberg. From the end of July 2019 through the end of December, however, the Fed initiated three rate cuts that dropped it from 2.50% to 1.75%.
So why did the Fed reverse course on monetary policy? We believe, as well as others in the financial media, that the Fed’s reversal on monetary policy has to do with the trade tariffs. The Trump administration first began implementing new trade tariffs on imported goods back in March 2018. While the original tariffs targeted just imported steel and aluminum, the use of tariffs quickly escalated to other goods and services. The lion’s share of the tariff conflict today is between the U.S. and China, the two-largest economies in the world. In our opinion, it is widely believed that President Donald J. Trump is utilizing tariffs as leverage to try and negotiate more favorable trade agreements between the U.S. and its major trading partners. One of the by-products of the escalation in the use of tariffs by all parties involved has been a slowdown in global economic growth, particularly in the U.S. The annualized U.S. real gross domestic product growth rate in the second quarter of 2018 (when new tariffs were introduced) was 3.5%. As of the second and third quarters of 2019, that annualized growth rate was down to 2.0% and 2.1%, respectively, according to data from the Bureau of Economic Analysis. For many months, President Trump has publicly challenged the Fed to lower rates aggressively to help offset the tempering of economic growth. Trump has noted that the Fed has room to lower rates due to the extremely low-to-negative rate levels found in many countries abroad as well as the lack of any significant inflationary pressure in the current climate. While the Fed has delivered some rate cuts in recent months, we believe that President Trump will continue to bang the drum for even more rate cuts.
Investors continue to flock to income-oriented investment products, such as open-end bond mutual funds and exchange-traded bond funds (“ETFs”). Net inflows to taxable bond funds and ETFs totaled an estimated $413.9 billion for the 12-month period ended December 31, 2019, according to Morningstar. The current climate featuring low interest rates, low bond yields and low inflation, if sustained, could make closed-end funds an attractive alternative to other income-oriented products moving forward, in our opinion.
Thank you for giving First Trust the opportunity to play a role in your financial future. We value our relationship with you and will report on the Fund again in six months.
Sincerely,
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
Page 1

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
“AT A GLANCE”
As of December 31, 2019 (Unaudited)
Fund Statistics  
Symbol on New York Stock Exchange FAM
Common Share Price $11.19
Common Share Net Asset Value (“NAV”) $11.93
Premium (Discount) to NAV (6.20)%
Net Assets Applicable to Common Shares $152,153,986
Current Monthly Distribution per Common Share(1) $0.0770
Current Annualized Distribution per Common Share $0.9240
Current Distribution Rate on Common Share Price(2) 8.26%
Current Distribution Rate on NAV(2) 7.75%
Common Share Price & NAV (weekly closing price)
  
 
Performance        
    Average Annual Total Returns
  1 Year Ended
12/31/19
5 Years Ended
12/31/19
10 Years Ended
12/31/19
Inception (11/23/04)
to 12/31/19
Fund Performance(3)        
NAV 17.09% 5.95% 5.92% 6.49%
Market Value 29.74% 7.45% 5.60% 5.71%
Index Performance        
Blended Index(4) 10.45% 3.55% 3.70% 4.96%
Bloomberg Barclays Global Emerging Markets Index 12.13% 5.33% 6.08% 6.94%
Bloomberg Barclays Global Aggregate Index 6.84% 2.31% 2.48% 3.28%
    
(1) Most recent distribution paid or declared through 12/31/2019. Subject to change in the future.
(2) Distribution rates are calculated by annualizing the most recent distribution paid or declared through the report date and then dividing by Common Share Price or NAV, as applicable, as of 12/31/2019. Subject to change in the future.
(3) Total return is based on the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.
(4) Blended Index consists of the following: FTSE World Government Bond Index (40.0%); JPMorgan Emerging Markets Bond Index - Global Diversified (30.0%); JPMorgan Global Bond Index - Emerging Markets Diversified (30.0%).
Page 2

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
“AT A GLANCE” (Continued)
As of December 31, 2019 (Unaudited)
Credit Quality(5) % of Total
Fixed-Income
Investments
AAA 17.7%
AA 2.2
AA- 0.6
A+ 8.1
A 5.5
A- 9.8
BBB+ 0.4
BBB 12.5
BBB- 4.5
BB+ 3.5
BB 5.0
BB- 13.1
B+ 6.7
B 5.2
B- 3.0
CCC- 0.4
Not Rated 1.8
Total 100.0%
    
Top 10 Countries(6) % of Total
Investments
United States 9.3%
Russia 7.2
Brazil 7.2
Japan 7.0
Turkey 5.7
Mexico 5.7
Poland 5.5
Ukraine 3.5
Canada 3.1
Australia 3.0
Total 57.2%
    
Industry Classification % of Total
Investments
Sovereigns 78.9%
Government Regional 3.0
Integrated Oils 2.9
Exploration & Production 2.6
Banks 2.3
Metals & Mining 2.2
Wireless Telecommunication Services 1.1
Utilities 1.0
Government Development Banks 0.9
Power Generation 0.5
Pipelines 0.5
Food & Beverage 0.4
Life Insurance 0.4
Software & Services 0.4
Chemicals 0.4
Manufactured Goods 0.4
Consumer Finance 0.4
Wireline Telecommunication Services 0.3
Commercial Finance 0.3
Industrial Other 0.3
Real Estate 0.3
Transportation & Logistics 0.3
Oil & Gas Services & Equipment 0.2
Total 100.0%
        
Top Ten Holdings % of Total
Investments
Japan Government Ten Year Bond, 0.10%, 6/20/27 5.5%
United States Treasury Note, 2.38%, 5/15/29 5.2
Russian Federal Bond - OFZ, 7.05%, 1/19/28 4.9
Brazil Notas do Tesouro Nacional, Series F, 10.00%, 1/01/29 3.2
Treasury Corp. of Victoria, 6.00%, 10/17/22 3.0
Turkey Government Bond, 8.80%, 9/27/23 2.9
United States Treasury Note, 3.75%, 11/15/43 2.8
Peruvian Government International Bond, 6.90%, 8/12/37 2.8
Canadian Government Bond, 8.00%, 6/01/23 2.8
Republic of Poland Government Bond, 4.00%, 10/25/23 2.3
Total 35.4%
 
(5) The credit quality and ratings information presented above reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor’s Ratings Group, a division of the McGraw Hill Companies, Inc., Moody’s Investors Service, Inc., Fitch Ratings or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and the ratings are not equivalent, the highest ratings are used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
(6) Portfolio securities are included in a country based upon their underlying credit exposure as determined by Aberdeen Standard Investments Inc., the sub-advisor.
Page 3

Portfolio Commentary
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2019 (Unaudited)
Advisor
First Trust Advisors L.P. (“First Trust” or the “Advisor”) serves as the investment advisor to the First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”). First Trust is responsible for the ongoing monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund.
Sub-Advisor
Aberdeen Standard Investments Inc. (“ASII” or the “Sub-Advisor”) (formerly, Aberdeen Asset Management Inc.), a Securities and Exchange Commission registered investment advisor, is an indirect wholly-owned subsidiary of Standard Life Aberdeen plc. Standard Life Aberdeen plc is a publicly-traded global provider of long-term savings and investments listed on the London Stock Exchange, managing assets for institutional and retail clients from offices around the world.
Portfolio Management Team
Investment decisions for the Fund are made by ASII using a team approach and not by any one individual. By making team decisions, ASII seeks to ensure that the investment process results in consistent returns across all portfolios with similar objectives. ASII does not employ separate research analysts. Instead, ASII’s investment managers combine analysis with portfolio management. Each member of the team has sector and portfolio responsibilities such as day-to-day monitoring of liquidity. The overall result of this matrix approach is a high degree of cross-coverage, leading to a deeper understanding of the securities in which ASII invests. Below are the members of the team with significant responsibility for the day-to-day management of the Fund’s portfolio.
James Athey
Senior Investment Manager, Global Macro
Brett Diment
Head of Global Emerging Market Debt
Kevin Daly
Senior Investment Manager, Emerging Market Debt
Edwin Gutierrez
Head of Emerging Market Sovereign Debt
Max Wolman
Senior Investment Manager, Emerging Market Debt
Patrick O’Donnell
Senior Investment Manager, Global Macro and Pan Euro
Commentary
First Trust/Aberdeen Global Opportunity Income Fund
The Fund’s primary investment objective is to seek a high level of current income. As a secondary objective, the Fund seeks capital appreciation. The Fund pursues these objectives by investing its Managed Assets in the world bond markets through a diversified portfolio of investment grade and below-investment grade government and corporate debt securities. “Managed Assets” means the total asset value of the Fund minus the sum of the Fund’s liabilities other than the principal amount of borrowings, if any. There can be no assurance that Fund will achieve its investment objectives. The Fund may not be appropriate for all investors.
Page 4

Portfolio Commentary (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2019 (Unaudited)
Fund Recap
The Fund had a net asset value (“NAV”) total return1 of 17.09% and a market value total return of 29.74% for the 12-month period ended December 31, 2019, compared to the Blended Index2 total return of 10.45% over the same period. In addition to this Blended Index, the Fund currently uses other indexes for comparative purposes. The total returns for the 12-month period ended December 31, 2019 for these indexes were as follows: the Bloomberg Barclays Global Emerging Markets Index was 12.13% and the Bloomberg Barclays Global Aggregate Index was 6.84%.
An important factor impacting the return of the Fund relative to its benchmarks was the Fund’s use of financial leverage through the use of bank borrowings. The Fund uses leverage because its managers believe that, over time, leverage provides opportunities for additional income and total return for common shareholders. However, the use of leverage can also expose common shareholders to additional volatility. For example, as the prices of securities held by the Fund decline, the negative impact of the evaluation changes on Common Share NAV and Common Share market value total return is magnified by the use of leverage. Conversely, leverage may enhance Common Share returns during periods when the prices of securities held by the Fund generally are rising. Unlike the Fund, the Bloomberg Barclays Global Emerging Markets Index, Bloomberg Barclays Global Aggregate Index and the components of the Blended Index are not leveraged. Leverage had a positive impact on the performance of the Fund over this reporting period.
Emerging Market Fixed Income Commentary
Market Recap
The year 2019 proved to be a strong year for returns in most asset classes, including emerging market (“EM”) debt. We believe these returns were driven by a combination of cheaper valuations at the end of a challenging 2018 and the Federal Reserve’s (the “Fed”) rate cutting cycle, which was mirrored by central banks in other developed markets. The subsequent U.S. rate rally pushed investors to look further afield in the search for yield, which benefitted emerging markets. The de-escalation in the U.S.-China trade tensions, with the agreement on a “Phase One” deal and partial backtrack on tariffs, also resulted in a positive sentiment driving returns for the remainder of 2019.
In our opinion, the key call in 2019 was the avoidance of large tails, in particular Argentina and Lebanon which faced major sell-offs as the result of the shocking election result in Argentina and the debt crisis and subsequent protests in Lebanon.
The asset class also demonstrated an improved level of diversification, with sell-offs being idiosyncratic, rather than systemic, indicating lower contagion risk across emerging markets. This has also been seen in the local currency and credit space.
Hard currency index returns were up 15.0% in 2019, the highest return since 2012. Sovereign issuances (80% of the JPMorgan Emerging Markets Bond Index - Global Diversified) returned 15.1% compared to quasi-sovereign returns of 14.9%, with investment grade issuances outperforming high yield. In the JPMorgan Emerging Markets Bond Index - Global Diversified (“EMBI”), the top three countries by year-to-date performance were: Ukraine (31.7%), Senegal (28.1%), and Kenya (27.6%), while the bottom three countries consisted of: Venezuela (-55.1%), Lebanon (-36.5%), and Argentina (-23.6%).
The JPMorgan Corporate Emerging Markets Bond Index (“CEMBI”) ended the year up 13.2%, which was also its best annual performance since 2012, with strong performance in both the investment grade and high yield credit segments. Throughout 2019, 79 debut issuers and five new countries have entered the JPMorgan CEMBI Broad Diversified Index. In terms of issuer return attribution, Petrobras (86 basis points “bps”), Alibaba (21 bps) and Banco Brasil (21 bps) were the top 3 contributors to the index return in 2019.
Performance Analysis
The EM debt portion of the Fund outperformed the EM debt portion of its Blended Index over the 12-month period ended December 31, 2019. Global Bonds and EM debt added to performance, with EM debt posting the stronger returns over period for the Fund, returning 18.11% versus 5.85% in Global Bonds. The impact of leverage was also a positive contributor to performance, adding 4.93% to the portfolio. Within EM debt, the allocation to local currency contributed to performance, as did positioning in hard currency debt.
In hard currency markets, we believe that the Fund’s zero-weight position in Lebanon was a key contributor to performance as the country continued to struggle with its public finances and experienced increasing problems with dollar deposit growth. This has
1 Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.
2 Blended Index consists of the following: FTSE World Government Bond Index (40.0%); JPMorgan Emerging Markets Bond Index – Global Diversified (30.0%); JPMorgan Global Bond Index – Emerging Markets Diversified (30.0%).
Page 5

Portfolio Commentary (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2019 (Unaudited)
sparked anti-government protests in the country, with bonds reaching record lows in September 2019. An underweight position in Venezuela also added to returns, as did the Fund’s overweight positions in Brazil, Ukraine, Ghana and Bahrain. Security selections in Brazil, Bahrain and Ukraine were further positives. In local currency, the Fund’s overweight position in Russia delivered strong returns for the Fund, with security selection and currency exposure also beneficial. An overweight position in Turkey, Indonesia, Nigeria and Ukraine also contributed to performance, as did an underweight position in Hungary. Overweight currency exposure in Indonesia and Ukraine also contributed to returns, as did underweight currency exposure to Hungary. On the downside, the Fund’s positioning in Argentina proved negative, as did underweight hard currency positions in Uruguay, Colombia, Peru and Panama.
Market and Fund Outlook
We believe EM growth should be lifted by a “Phase One” U.S.-China trade deal and a mild recovery in major emerging economies, after prolonged weakness. We also believe global growth will fare better than expected, thanks to Eurozone growth bottoming out, improvements in Chinese economic activity and a milder-than-anticipated U.S. slowdown. While the inflation outlook turned less benign for the new year in our view, we believe global monetary policy will remain accommodative in the face of the weak growth environment. The key risks to our view remain continued dollar strength, the persistence of U.S. exceptionalism, a deeper China slowdown and a re-escalation in trade wars.
Developed Market Commentary
Market Recap
The year 2019 was to a large degree a year of two halves. The first half of the year was one of rising macroeconomic concern, particularly in manufacturing and exporting sectors, rising international trade tension, increasingly dovish central banks and thus a period of falling interest rates and strong government bond performance. During the second half of the year we started to observe some tentative stabilization of both economic data and international relations. Added to the renewed dovish and liquidity-providing stance of the Fed and other central banks, this created an environment of aggressive risk seeking which saw government bond yields retrace some of the aggressive declines we had witnessed in the middle of the year.
The year started with asset prices recovering from what had been a harrowing time in December 2018 as fears over Fed over-tightening had seen dramatic declines in risk assets and treasury yields. In spite of this asset price recovery, the first two Fed meetings of the year still produced dovish surprises as Fed Chairman Jerome Powell first doubled and then tripled down on the dovish rhetoric which had emerged in his December 2018 statement. That journey essentially continued throughout the year as worries around asset prices, low inflation and potential blowback from international trade relations and resultant global economic weakness drove the Fed towards an easing of policy which eventuated in July 2019 and was followed up with further cuts in September and October taking the Federal Funds rates to a range of 1.5% - 1.75%.
While manufacturing activity in the U.S. suffered alongside global partners, the consumer held up well and this kept headline growth at around 2% through the year.
The biggest concern for markets throughout the year was the ratcheting trade tensions between the U.S. and China and the increasing imposition of tariffs which was resulting. Finally, as the year drew to a close, these tensions seemed to make way for some pragmatism culminating with an announcement in December that agreement had been reached on a “Phase One” trade deal. Essentially this amounted to an agreement by China to buy $200 billion worth of U.S. goods and services over two years coupled with some pledges to refrain from competitive devaluation. This prevented another increase of tariffs slated for December 15, 2019 but did not contain an agreement to remove existing tariffs - compliance with the agreement over the next 10-12 months will see the U.S. lift tariffs as an enforcement mechanism. The economic impact of this agreement is likely to be mechanically small but the boost to sentiment and risk asset pricing was significant.
The effect of this combination of improved sentiment, decent growth with a dovish Fed, further enhanced by liquidity provisions by the Fed following some disruption in the repo market in September, created a booming risk asset environment. As markets made their way to the end of the year, the equity market became increasingly immune to bad news. This has created justifiable concerns over risk seeking behaviour and the potential for more pronounced weakness in the future.
Matters in Europe were somewhat similar, though at times more pronounced. The huge exposure of the German economy and manufacturing sector, coupled with the large export contribution to overall growth in that economy, saw severe pressure on German economic data throughout most of the year. Only latterly were there any signs of stabilization and it remains to be seen what more lasting damage may have been done. The rest of the Eurozone fared better but manufacturing sectors there too were affected. Ultimately this led to the European Central Bank’s (“ECB”) President Mario Draghi’s swansong of a final easing package as he cut
Page 6

Portfolio Commentary (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2019 (Unaudited)
rates by 10 bps and re-enacted quantitative easing at €20 billion per month until conditions improved sufficiently to see rates increase. In reality, the ECB should run out of assets to buy given the current parameters but for now markets have been placated.
It should be noted, however, that soon after the September 2019 meeting where this package was agreed upon and announced, it emerged that there was a large degree of opposition from fellow governing council members. In actual fact, the opposition was sufficient to see the Bundesbank representative Sabine Lautenschlager resign her post several years before her term was due to end in protest. Concern over the side effects of extreme unconventional policy including negative rates has been steadily increasing and it seems that this may have been a step too far. As a result, and boosted by some economic data stabilization, this saw yields in Europe, and Germany in particular, rise significantly in the second half of the year. The extent to which this becomes self-defeating remains to be seen. For now, markets are left guessing as new ECB President Christine Lagarde has so far been somewhat coy on her monetary policy views.
There is now light at the end of the tunnel in United Kingdom (“UK”) politics. Another year of political infighting, resignations, aisle-crossing, court cases, judicial rulings and economic weakness and uncertainty finally has resulted in a more decisive state of affairs. Economic data through 2019 has been increasingly concerning as business investment got weaker and weaker reflecting the seemingly-never-ending purgatory of the U.K.’s halfway in/halfway out state of affairs with respect to membership in the European Union (“EU”)3. In the end, Prime Minister Boris Johnson’s message of decisive action with respect to the EU, fairer and more balanced policy towards the UK as a whole and fiscal expansion instead of austerity played well to the electorate, and he won a resounding victory and strong majority in the first Christmas election since the 1920s. In fact, he now has the strongest domestic mandate of any European leader and therefore will be able to negotiate with the EU from a position of strength, in our view. Sterling rallied strongly through the second half of the year as this outcome become more and more likely in the market’s mind.
Performance Analysis
The Fund’s developed market bond portfolio outperformed for the 12-month period ended December 31, 2019. In large part this was due to the Fund’s duration exposure which allowed it to benefit from the aggressive drop in global bond yields in the first half of 2019. Particularly beneficial were long duration positions in the dollar bloc countries of the U.S., Australia and New Zealand which all saw monetary easing and steep bond yield declines. The Fund largely retained a short duration position in the low yielding countries of the Eurozone which, while a drag in the first half of the year, was a boost to performance in the second half.
The Fund’s above benchmark exposure to the U.S. dollar was also a boost to Fund performance through the year as once again the dollar bucked market expectations and performed strongly. Long Japanese yen and Polish zloty exposures were a small drag.
Market and Fund Outlook
The new year of 2020 looks set to be an interesting year. Risk asset prices are elevated on many metrics and thus should the market’s consensus view of a broad growth recovery, particularly outside the U.S., fail to materialize it seems likely, in our view, that prices may correct and central banks will respond with easing.
It is an election year in the U.S., and this comes at a time where the economy seems solid on the face of it but there remain concerns under the hood. The two outcomes are intertwined in such a way as to be inseparable, in our opinion. Depending on the Democratic party’s choice of candidate we believe could well see significant market volatility by the end of the first quarter of 2020.
The year in Europe will likely be dominated again by the political economy. Trade negotiations between the UK and EU and potential fiscal expansion are the big issues for the year, in our view. It seems that the former is likely to be fractious again, though with a greater hope for agreement than has existed for a while, while the latter remains politically difficult in the country with those most space to do so – Germany but base case for the UK under Prime Minister Johnson.
The outlook for government bonds remains asymmetric, in our opinion. We believe that even in the best of outcomes on major themes the chances of any major central bank hiking are slim to none. And, we believe inflation is likely to be under pressure after the first few months of the year as positive energy base effects give way to falling shelter cost and negative energy base effects. This environment is perfect for government bonds, in our opinion. Should any of the major issues evolve in a more negative way, then central banks will likely once again be quick to step in forcing yields even lower and thus raising government bond returns further.
3 On January 31, 2020, the United Kingdom officially left the European Union.
Page 7

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments
December 31, 2019
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN SOVEREIGN BONDS AND NOTES (a) – 99.5%
    Armenia – 0.9%            
1,380,000  
Republic of Armenia International Bond (USD) (b)

  3.95%   09/26/29   $1,370,715
    Australia – 4.1%            
7,945,000  
Treasury Corp. of Victoria (AUD)

  6.00%   10/17/22   6,325,450
    Bahrain – 1.6%            
800,000  
Bahrain Government International Bond (USD) (c)

  7.00%   01/26/26   944,061
1,400,000  
Bahrain Government International Bond (USD) (b)

  5.63%   09/30/31   1,504,573
        2,448,634
    Brazil – 6.3%            
10,370,000  
Brazil Notas do Tesouro Nacional, Series F (BRL)

  10.00%   01/01/25   2,970,138
21,950,000  
Brazil Notas do Tesouro Nacional, Series F (BRL)

  10.00%   01/01/29   6,611,907
        9,582,045
    Canada – 3.8%            
6,181,000  
Canadian Government Bond (CAD)

  8.00%   06/01/23   5,747,276
    Costa Rica – 1.0%            
720,000  
Costa Rica Government International Bond (USD) (c)

  4.25%   01/26/23   725,699
219,000  
Costa Rica Government International Bond (USD) (c)

  7.00%   04/04/44   231,250
511,000  
Costa Rica Government International Bond (USD) (c)

  7.16%   03/12/45   545,970
        1,502,919
    Dominican Republic – 1.4%            
660,000  
Dominican Republic International Bond (USD) (c)

  5.50%   01/27/25   712,256
71,000,000  
Dominican Republic International Bond (DOP) (c)

  9.75%   06/05/26   1,377,008
        2,089,264
    Ecuador – 2.3%            
2,180,000  
Ecuador Government International Bond (USD) (b)

  8.75%   06/02/23   2,153,655
1,400,000  
Ecuador Government International Bond (USD) (b)

  9.50%   03/27/30   1,309,486
        3,463,141
    Egypt – 3.3%            
11,200,000  
Egypt Government Bond (EGP)

  16.00%   06/11/22   725,734
474,000  
Egypt Government International Bond (USD) (b)

  7.60%   03/01/29   519,656
380,000  
Egypt Government International Bond (USD) (b)

  8.50%   01/31/47   423,107
1,730,000  
Egypt Government International Bond (USD) (b)

  7.90%   02/21/48   1,820,458
25,300,000  
Egypt Treasury Bills (EGP)

  (d)   04/28/20   1,515,623
        5,004,578
    El Salvador – 1.5%            
900,000  
El Salvador Government International Bond (USD) (c)

  5.88%   01/30/25   950,999
1,240,000  
El Salvador Government International Bond (USD) (c)

  7.65%   06/15/35   1,417,859
        2,368,858
    France – 0.6%            
561,000  
French Republic Government Bond OAT (EUR) (c)

  3.25%   05/25/45   986,889
    Germany – 0.6%            
508,000  
Bundesrepublik Deutschland Bundesanleihe (EUR) (c)

  2.50%   08/15/46   893,530
    Ghana – 0.5%            
770,000  
Ghana Government International Bond (USD) (b)

  7.63%   05/16/29   786,938
Page 8
See Notes to Financial Statements

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2019
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN SOVEREIGN BONDS AND NOTES (a) (Continued)
    Indonesia – 3.5%            
20,750,000,000  
Indonesia Treasury Bond (IDR)

  5.63%   05/15/23   $1,470,580
49,300,000,000  
Indonesia Treasury Bond (IDR)

  8.38%   03/15/34   3,808,698
        5,279,278
    Italy – 3.4%            
1,797,000  
Italy Buoni Poliennali Del Tesoro (EUR)

  9.00%   11/01/23   2,678,870
1,600,000  
Italy Buoni Poliennali Del Tesoro (EUR)

  7.25%   11/01/26   2,540,357
        5,219,227
    Jamaica – 0.4%            
510,000  
Jamaica Government International Bond (USD)

  7.88%   07/28/45   690,252
    Japan – 9.6%            
1,219,050,000  
Japan Government Ten Year Bond (JPY)

  0.10%   06/20/27   11,390,857
252,850,000  
Japan Government Thirty Year Bond (JPY)

  2.40%   03/20/37   3,187,290
        14,578,147
    Kenya – 0.4%            
590,000  
Kenya Government International Bond (USD) (c)

  6.88%   06/24/24   640,097
    Malaysia – 2.2%            
13,000,000  
Malaysia Government Bond (MYR)

  3.89%   03/15/27   3,289,091
    Mexico – 4.9%            
38,000,000  
Mexican Bonos (MXN)

  6.50%   06/09/22   2,000,097
20,000,000  
Mexican Bonos (MXN)

  10.00%   12/05/24   1,201,629
27,000,000  
Mexican Bonos (MXN)

  5.75%   03/05/26   1,354,320
51,000,000  
Mexican Bonos (MXN)

  7.75%   11/13/42   2,863,202
        7,419,248
    New Zealand – 2.4%            
5,094,000  
New Zealand Government Bond (NZD) (c)

  2.75%   04/15/25   3,672,822
    Nigeria – 1.7%            
442,000,000  
Nigeria Government Bond (NGN)

  14.50%   07/15/21   1,332,016
663,000  
Nigeria Government International Bond (USD) (b)

  7.88%   02/16/32   689,888
513,000  
Nigeria Government International Bond (USD) (b)

  7.63%   11/28/47   501,281
        2,523,185
    Norway – 0.6%            
7,511,000  
Norway Government Bond (NOK) (b) (c)

  1.75%   02/17/27   872,689
    Oman – 1.5%            
1,400,000  
Oman Government International Bond (USD) (b)

  6.00%   08/01/29   1,465,632
770,000  
Oman Government International Bond (USD) (b)

  6.75%   01/17/48   776,031
        2,241,663
    Peru – 3.8%            
16,000,000  
Peruvian Government International Bond (PEN) (c)

  6.90%   08/12/37   5,828,219
    Poland – 7.6%            
14,444,000  
Republic of Poland Government Bond (PLN)

  2.50%   01/25/23   3,901,516
17,100,000  
Republic of Poland Government Bond (PLN)

  4.00%   10/25/23   4,885,482
10,000,000  
Republic of Poland Government Bond (PLN)

  2.50%   07/25/27   2,713,998
        11,500,996
See Notes to Financial Statements
Page 9

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2019
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN SOVEREIGN BONDS AND NOTES (a) (Continued)
    Portugal – 1.0%            
1,088,000  
Portugal Obrigacoes do Tesouro OT (EUR) (b) (c)

  5.65%   02/15/24   $1,511,893
    Qatar – 0.9%            
1,100,000  
Qatar Government International Bond (USD) (c)

  4.82%   03/14/49   1,364,493
    Russia – 8.1%            
594,100,000  
Russian Federal Bond - OFZ (RUB)

  7.05%   01/19/28   10,110,456
90,000,000  
Russian Federal Bond - OFZ (RUB)

  7.70%   03/23/33   1,618,641
400,000  
Russian Foreign Bond - Eurobond (USD) (c)

  5.88%   09/16/43   540,367
        12,269,464
    Rwanda – 1.0%            
1,440,000  
Rwanda International Government Bond (USD) (c)

  6.63%   05/02/23   1,542,557
    Saudi Arabia – 1.1%            
1,435,000  
Saudi Government International Bond (USD) (b)

  4.38%   04/16/29   1,612,474
    South Africa – 3.6%            
57,640,000  
Republic of South Africa Government Bond (ZAR)

  10.50%   12/21/26   4,606,850
850,000  
Republic of South Africa Government International Bond (USD)

  4.88%   04/14/26   886,318
        5,493,168
    Spain – 2.1%            
2,111,000  
Spain Government Bond (EUR) (b) (c)

  5.90%   07/30/26   3,259,133
    Tanzania – 0.1%            
96,675  
Tanzania Government International Bond, 6 Mo. LIBOR + 6.00% (USD) (c) (e)

  7.99%   03/09/20   97,878
    Turkey – 6.9%            
38,550,000  
Turkey Government Bond (TRY)

  8.80%   09/27/23   5,968,154
28,600,000  
Turkey Government Bond (TRY)

  10.50%   08/11/27   4,490,234
        10,458,388
    Ukraine – 2.4%            
1,370,000  
Ukraine Government International Bond (USD) (b)

  7.75%   09/01/24   1,499,291
1,200,000  
Ukraine Government International Bond (EUR) (b)

  6.75%   06/20/26   1,514,816
716,000  
Ukraine Government International Bond (USD) (b)

  (d)   05/31/40   686,465
        3,700,572
    United Kingdom – 2.4%            
511,000  
United Kingdom Gilt (GBP) (c)

  4.25%   12/07/27   863,227
1,250,000  
United Kingdom Gilt (GBP) (c)

  4.25%   12/07/49   2,848,471
        3,711,698
   
Total Foreign Sovereign Bonds and Notes

  151,346,869
    (Cost $145,079,683)            
FOREIGN CORPORATE BONDS AND NOTES (a) (f) – 24.7%
    Bahrain – 0.5%            
680,000  
Oil and Gas Holding (The) Co. BSCC (USD) (c)

  7.63%   11/07/24   791,031
    Barbados – 0.5%            
750,000  
Sagicor Finance 2015 Ltd. (USD) (b)

  8.88%   08/11/22   785,625
    Brazil – 3.5%            
780,000  
CSN Resources S.A. (USD) (b)

  7.63%   02/13/23   833,114
850,000  
GTL Trade Finance, Inc. (USD) (c)

  7.25%   04/16/44   1,078,170
Page 10
See Notes to Financial Statements

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2019
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN CORPORATE BONDS AND NOTES (a) (f) (Continued)
    Brazil (Continued)            
1,550,000  
OAS Finance Ltd. (USD) (g) (h) (i) (j)

  8.88%   (k)   $11,625
460,000  
OAS Investments GmbH (USD) (g) (h) (i)

  8.25%   10/19/19   3,450
380,020  
Odebrecht Drilling Norbe VIII/IX Ltd. (USD) (c)

  6.35%   12/01/21   379,226
1,148,000  
Petrobras Global Finance BV (USD) (b)

  5.09%   01/15/30   1,231,528
1,520,000  
Petrobras Global Finance BV (USD)

  6.90%   03/19/49   1,785,658
        5,322,771
    Canada – 0.5%            
750,000  
Gran Tierra Energy, Inc. (USD) (c)

  7.75%   05/23/27   703,393
    China – 0.4%            
600,000  
Shimao Property Holdings Ltd. (USD) (c)

  5.60%   07/15/26   628,711
    Colombia – 0.3%            
429,000  
Banco GNB Sudameris S.A. (USD) (b) (j)

  6.50%   04/03/27   452,748
    Congo – 0.5%            
720,000  
HTA Group Ltd. (USD) (c)

  9.13%   03/08/22   745,325
    Dominican Republic – 1.3%            
1,860,000  
AES Andres BV / Dominican Power Partners / Empresa Generadora de Electricidad Itabo (USD) (b)

  7.95%   05/11/26   1,979,240
    Ecuador – 0.4%            
484,000  
International Airport Finance S.A. (USD) (b)

  12.00%   03/15/33   532,568
    Georgia – 1.0%            
540,000  
Bank of Georgia JSC (USD) (b)

  6.00%   07/26/23   570,855
975,000  
Georgian Oil and Gas Corp. JSC (USD) (b)

  6.75%   04/26/21   1,019,455
        1,590,310
    Guatemala – 0.5%            
735,000  
Comunicaciones Celulares S.A. Via Comcel Trust (USD) (b)

  6.88%   02/06/24   754,915
    Honduras – 0.3%            
396,000  
Inversiones Atlantida S.A. (USD) (b)

  8.25%   07/28/22   415,923
    India – 1.2%            
675,000  
Adani Green Energy UP Ltd. / Prayatna Developers Pvt. Ltd. / Parampujya Solar Energy (USD) (b)

  6.25%   12/10/24   726,806
400,000  
Azure Power Solar Energy Pvt. Ltd. (USD) (b)

  5.65%   12/24/24   409,572
700,000  
Muthoot Finance Ltd. (USD) (b)

  6.13%   10/31/22   727,961
        1,864,339
    Indonesia – 0.5%            
760,000  
Medco Platinum Road Pte Ltd. (USD) (b)

  6.75%   01/30/25   772,678
    Kazakhstan – 1.5%            
1,350,000  
KazMunayGas National Co. JSC (USD) (c)

  4.75%   04/19/27   1,486,024
789,000  
Tengizchevroil Finance Co. International Ltd. (USD) (b)

  4.00%   08/15/26   829,132
        2,315,156
    Mexico – 2.9%            
750,000  
BBVA Bancomer S.A. (USD) (c) (j)

  5.13%   01/18/33   758,464
700,000  
Braskem Idesa SAPI (USD) (b)

  7.45%   11/15/29   747,082
13,950,000  
Petroleos Mexicanos (MXN) (c)

  7.19%   09/12/24   675,124
780,000  
Petroleos Mexicanos (USD) (b)

  7.69%   01/23/50   853,925
See Notes to Financial Statements
Page 11

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2019
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN CORPORATE BONDS AND NOTES (a) (f) (Continued)
    Mexico (Continued)            
750,000  
Sixsigma Networks Mexico SA de CV (USD) (b)

  7.50%   05/02/25   $757,811
311,000  
Unifin Financiera SAB de CV SOFOM ENR (USD) (b) (j)

  8.88%   (k)   286,720
400,000  
Unifin Financiera SAB de CV SOFOM ENR (USD) (c)

  7.00%   01/15/25   403,800
        4,482,926
    Nigeria – 1.7%            
600,000  
IHS Netherlands Holdco BV (USD) (b)

  8.00%   09/18/27   639,570
770,000  
SEPLAT Petroleum Development Co., PLC (USD) (b)

  9.25%   04/01/23   806,712
1,070,000  
United Bank for Africa PLC (USD) (b)

  7.75%   06/08/22   1,140,246
        2,586,528
    Oman – 0.6%            
892,000  
Oztel Holdings SPC Ltd. (USD) (b)

  6.63%   04/24/28   949,146
    Russia – 1.8%            
1,045,000  
Evraz Group S.A. (USD) (b)

  5.38%   03/20/23   1,124,300
790,000  
Gazprom OAO Via Gaz Capital S.A. (USD) (c)

  4.95%   03/23/27   882,040
600,000  
GTH Finance BV (USD) (b)

  7.25%   04/26/23   676,233
        2,682,573
    Saudi Arabia – 0.4%            
554,000  
Saudi Arabian Oil Co. (USD) (b)

  4.25%   04/16/39   594,619
    South Africa – 0.5%            
690,000  
Liquid Telecommunications Financing PLC (USD) (c)

  8.50%   07/13/22   702,937
    Turkey – 1.0%            
744,000  
Turkiye Vakiflar Bankasi TAO (USD) (c)

  6.00%   11/01/22   733,398
660,000  
Yapi ve Kredi Bankasi AS (USD) (b) (j)

  13.88%   (k)   745,665
        1,479,063
    Ukraine – 2.4%            
770,000  
Metinvest BV (USD) (b)

  8.50%   04/23/26   831,661
860,000  
MHP Lux S.A. (USD) (b)

  6.95%   04/03/26   903,912
37,000,000  
Ukreximbank Via Biz Finance PLC (UAH) (c)

  16.50%   03/02/21   1,581,296
306,250  
Ukreximbank Via Biz Finance PLC (USD) (c)

  9.63%   04/27/22   321,896
        3,638,765
    Zambia – 0.5%            
750,000  
First Quantum Minerals Ltd. (USD) (c)

  7.50%   04/01/25   768,439
   
Total Foreign Corporate Bonds and Notes

  37,539,729
    (Cost $37,722,893)            
Page 12
See Notes to Financial Statements

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2019
Principal
Value
  Description   Stated
Coupon
  Stated
Maturity
  Value
U.S. GOVERNMENT BONDS AND NOTES (a) – 12.7%
$2,577,000  
United States Treasury Note

  2.38%   05/15/27   $2,673,688
10,416,000  
United States Treasury Note

  2.38%   05/15/29   10,835,895
4,695,000  
United States Treasury Note

  3.75%   11/15/43   5,885,347
   
Total U.S. Government Bonds and Notes

  19,394,930
    (Cost $18,687,444)            
    
 
Total Investments – 136.9%

  208,281,528
  (Cost $201,490,020) (l)    
 
Outstanding Loans – (39.8)%

  (60,572,070)
 
Net Other Assets and Liabilities – 2.9%

  4,444,528
 
Net Assets – 100.0%

  $152,153,986
    
Forward Foreign Currency Contracts
Settlement
Date
  Counterparty   Amount
Purchased
  Amount
Sold
  Purchase
Value as of
12/31/2019
  Sale
Value as of
12/31/2019
  Unrealized
Appreciation/
(Depreciation)
01/09/20   UBS   USD 5,057,584   AUD 7,456,000   $ 5,057,584   $ 5,233,438   $ (175,854)
01/09/20   UBS   USD 4,731,984   CAD 6,296,000    4,731,984    4,848,713    (116,729)
01/09/20   CIT   USD 3,558,992   NZD 5,550,000    3,558,992    3,736,763    (177,771)
01/09/20   DB   USD 1,953,732   PLN 7,683,000    1,953,546    2,025,157     (71,611)
01/09/20   CIT   USD 4,000,895   TRY 25,005,000    4,066,786    4,193,467    (126,681)
01/09/20   DB   USD 1,011,182   ZAR 15,523,000    1,011,182    1,106,986     (95,804)
Net Unrealized Appreciation (Depreciation)

  $(764,450)
    
Counterparty Abbreviations
CIT Citibank, NA
DB Deutsche Bank
UBS UBS
See Note 2D – Forward Foreign Currency Contracts in the Notes to Financial Statements.
See Note 2I – Offsetting on the Statement of Assets and Liabilities in the Notes to Financial Statements for a table that presents the forward foreign currency contracts’ assets and liabilities on a gross basis.

(a) All of these securities are available to serve as collateral for the outstanding loans.
(b) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Pursuant to procedures adopted by the Fund’s Board of Trustees, this security has been determined to be liquid by Aberdeen Standard Investments Inc. (the “Sub-Advisor”). Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security specific factors and assumptions, which require subjective judgment. At December 31, 2019, securities noted as such amounted to $47,377,903 or 31.1% of net assets.
(c) This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the 1933 Act.
(d) Zero coupon bond.
(e) Floating rate security.
(f) Portfolio securities are included in a country based upon their underlying credit exposure as determined by the Sub-Advisor.
(g) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A under the 1933 Act, and may be resold in transactions exempt from registration, normally to qualified institutional buyers (see Note 2C - Restricted Securities in the Notes to Financial Statements).
(h) This issuer is in default and interest is not being accrued by the Fund, nor paid by the issuer.
(i) This issuer has filed for bankruptcy protection in a São Paulo state court.
(j) Fixed-to-floating or fixed-to-variable rate security. The interest rate shown reflects the fixed rate in effect at December 31, 2019. At a predetermined date, the fixed rate will change to a floating rate or a variable rate.
(k) Perpetual maturity.
See Notes to Financial Statements
Page 13

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2019
(l) Aggregate cost for federal income tax purposes was $206,618,811. As of December 31, 2019, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost was $13,631,593 and the aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value was $12,733,326. The net unrealized appreciation was $898,267. The amounts presented are inclusive of derivative contracts.
    
LIBOR London Interbank Offered Rate

Valuation Inputs
A summary of the inputs used to value the Fund’s investments as of December 31, 2019 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
ASSETS TABLE
  Total
Value at
12/31/2019
Level 1
Quoted
Prices
Level 2
Significant
Observable
Inputs
Level 3
Significant
Unobservable
Inputs
Foreign Sovereign Bonds and Notes*

$151,346,869 $ $151,346,869 $
Foreign Corporate Bonds and Notes*

37,539,729 37,539,729
U.S. Government Bonds and Notes

19,394,930 19,394,930
Total Investments

$208,281,528 $ $208,281,528 $

 

LIABILITIES TABLE

  Total
Value at
12/31/2019
Level 1
Quoted
Prices
Level 2
Significant
Observable
Inputs
Level 3
Significant
Unobservable
Inputs
Forward Foreign Currency Contracts

$(764,450) $ $(764,450) $
    
* See Portfolio of Investments for country breakout.
   
Page 14
See Notes to Financial Statements

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2019
Currency Exposure
Diversification
% of Total
Investments†
USD 49.9%
JPY 7.0
EUR 6.4
RUB 5.7
BRL 4.6
PLN 4.6
MXN 3.9
TRY 3.0
PEN 2.8
IDR 2.5
GBP 1.8
ZAR 1.7
MYR 1.6
EGP 1.1
UAH 0.8
DOP 0.7
NGN 0.6
AUD 0.5
CAD 0.4
NOK 0.4
NZD 0.0*
Total 100.0%
    
The weightings include the impact of currency forwards.
* Amount is less than 0.1%.
    
Currency Abbreviations
AUD Australian Dollar
BRL Brazilian Real
CAD Canadian Dollar
DOP Dominican Peso
EGP Egyptian Pound
EUR Euro
GBP British Pound Sterling
IDR Indonesian Rupiah
JPY Japanese Yen
MXN Mexican Peso
MYR Malaysian Ringgit
NGN Nigerian Naira
NOK Norwegian Krone
NZD New Zealand Dollar
PEN Peruvian Nuevo Sol
PLN Polish Zloty
RUB Russian Ruble
TRY Turkish Lira
UAH Ukrainian Hryvnia
USD United States Dollar
ZAR South African Rand
See Notes to Financial Statements
Page 15

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statement of Assets and Liabilities
December 31, 2019
ASSETS:  
Investments, at value

    (Cost $201,490,020)

$ 208,281,528
Cash

2,269,639
Foreign currency (Cost $87,637)

91,789
Receivables:  
Interest

3,242,841
Interest reclaims

169,795
Prepaid expenses

4,189
Total Assets

214,059,781
LIABILITIES:  
Outstanding loans

60,572,070
Due to broker

116,459
Unrealized depreciation on forward foreign currency contracts

764,450
Payables:  
Investment advisory fees

178,937
Custodian fees

88,410
Audit and tax fees

58,692
Deferred foreign capital gains tax

39,494
Interest and fees on loans

35,456
Administrative fees

22,822
Shareholder reporting fees

16,034
Transfer agent fees

8,512
Legal fees

2,275
Financial reporting fees

771
Trustees’ fees and expenses

39
Other liabilities

1,374
Total Liabilities

61,905,795
NET ASSETS

$152,153,986
NET ASSETS consist of:  
Paid-in capital

$ 160,938,473
Par value

127,564
Accumulated distributable earnings (loss)

(8,912,051)
NET ASSETS

$152,153,986
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share)

$11.93
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized)

12,756,442
Page 16
See Notes to Financial Statements

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statement of Operations
For the Year Ended December 31, 2019
INVESTMENT INCOME:  
Interest (net of foreign withholding tax of $64,509)

$ 12,533,354
Other

 1,000
Total investment income

12,534,354
EXPENSES:  
Investment advisory fees

 2,083,723
Interest and fees on loans

 1,639,015
Custodian fees

 207,740
Administrative fees

 127,987
Audit and tax fees

 59,191
Transfer agent fees

 35,509
Shareholder reporting fees

 34,347
Listing expense

 21,250
Trustees’ fees and expenses

 16,425
Financial reporting fees

 9,250
Legal fees

 5,023
Other

 17,244
Total expenses

4,256,704
NET INVESTMENT INCOME (LOSS)

8,277,650
NET REALIZED AND UNREALIZED GAIN (LOSS):  
Net realized gain (loss) on:  
Investments

(5,274,018)
Forward foreign currency contracts

309,503
Foreign currency transactions

(169,738)
Net realized gain (loss)

(5,134,253)
Net change in unrealized appreciation (depreciation) on:  
Investments

19,696,903
Forward foreign currency contracts

(956,657)
Foreign currency translation

235,970
Deferred foreign capital gains tax

(38,567)
Net change in unrealized appreciation (depreciation)

 18,937,649
NET REALIZED AND UNREALIZED GAIN (LOSS)

13,803,396
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

$ 22,081,046
See Notes to Financial Statements
Page 17

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statements of Changes in Net Assets
  Year
Ended
12/31/2019
  Year
Ended
12/31/2018
OPERATIONS:      
Net investment income (loss)

$ 8,277,650   $ 9,005,221
Net realized gain (loss)

 (5,134,253)    (4,895,339)
Net change in unrealized appreciation (depreciation)

 18,937,649    (17,371,631)
Net increase (decrease) in net assets resulting from operations

22,081,046   (13,261,749)
DISTRIBUTIONS TO SHAREHOLDERS FROM:      
Investment operations

 (5,010,759)    (6,988,946)
Return of capital

 (6,152,975)    (4,330,624)
Total distributions to shareholders

(11,163,734)   (11,319,570)
CAPITAL TRANSACTIONS:      
Repurchase of Common Shares

 (139,178)    (1,662,641)
Net increase (decrease) in net assets resulting from capital transactions

(139,178)   (1,662,641)
Total increase (decrease) in net assets

 10,778,134    (26,243,960)
NET ASSETS:      
Beginning of period

 141,375,852    167,619,812
End of period

$ 152,153,986   $ 141,375,852
CAPITAL TRANSACTIONS were as follows:      
Common Shares at beginning of period

 12,770,468    12,950,337
Common Shares repurchased (a)

 (14,026)    (179,869)
Common Shares at end of period

12,756,442   12,770,468
    
(a) On September 15, 2015, the Fund commenced a Share repurchase program. The program originally expired on March 15, 2016, but the Board of Trustees of the Fund has subsequently authorized the continuation of the Fund’s share repurchase program until March 15, 2020. For the fiscal years ended December 31, 2019, and December 31, 2018, the Fund repurchased 14,026 and 179,869 shares, respectively, at a weighted-average discount of 13.30% and 15.45%, respectively, from net asset value per share. The Fund expects to continue the share repurchase program until the earlier of (i) the repurchase of an additional 533,527 Common Shares (for an aggregate of 870,510) or (ii) March 15, 2020.
Page 18
See Notes to Financial Statements

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statement of Cash Flows
For the Year Ended December 31, 2019
Cash flows from operating activities:    
Net increase (decrease) in net assets resulting from operations

$22,081,046  
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:    
Purchases of investments

(90,882,618)  
Sales, maturities and paydown of investments

91,436,606  
Net amortization/accretion of premiums/discounts on investments

346,135  
Net realized gain/loss on investments

5,274,018  
Net change in unrealized appreciation/depreciation on investments

(19,696,903)  
Net change in unrealized appreciation/depreciation on forward foreign currency contracts

956,657  
Changes in assets and liabilities:    
Decrease in interest receivable

330,401  
Increase in interest reclaims receivable

(118,559)  
Increase in prepaid expenses

(2,770)  
Decrease in interest and fees payable on loans

(20,979)  
Increase in due to broker

57,377  
Increase in investment advisory fees payable

8,102  
Increase in audit and tax fees payable

287  
Decrease in legal fees payable

(6,486)  
Decrease in shareholder reporting fees payable

(22,756)  
Decrease in administrative fees payable

(3,816)  
Increase in custodian fees payable

22,975  
Increase in transfer agent fees payable

2,083  
Increase in Trustees’ fees and expenses payable

19  
Increase in deferred foreign capital gains tax

38,567  
Decrease in other liabilities payable

(470)  
Cash provided by operating activities

  $9,798,916
Cash flows from financing activities:    
Repurchase of Common Shares

(139,178)  
Distributions to Common Shareholders from investment operations

(5,010,759)  
Distributions to Common Shareholders from return of capital

(6,152,975)  
Effect of exchange rate changes on Euro Loans (a)

(226,633)  
Cash used in financing activities

  (11,529,545)
Decrease in cash and foreign currency (b)

  (1,730,629)
Cash and foreign currency at beginning of period

  4,092,057
Cash and foreign currency at end of period

  $2,361,428
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest and fees

  $1,659,994
    
(a) This amount is a component of net change in unrealized appreciation (depreciation) on foreign currency translation as shown on the Statement of Operations.
(b) Includes net change in unrealized appreciation (depreciation) on foreign currency of $9,337, which does not include the effect of exchange rate changes on Euro borrowings.
See Notes to Financial Statements
Page 19

First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Financial Highlights
For a Common Share outstanding throughout each period
  Year Ended December 31,
2019   2018   2017   2016   2015
Net asset value, beginning of period

$ 11.07   $ 12.94   $ 12.07   $ 11.66   $ 13.77
Income from investment operations:                  
Net investment income (loss)

0.65   0.69   0.72   0.73   0.82
Net realized and unrealized gain (loss)

1.09   (1.70)   0.98   0.58   (1.80)
Total from investment operations

1.74   (1.01)   1.70   1.31   (0.98)
Distributions paid to shareholders from:                  
Net investment income

(0.39)   (0.54)   (0.37)   (0.43)  
Return of capital

(0.49)   (0.34)   (0.53)   (0.47)   (1.14)
Total distributions paid to Common Shareholders

(0.88)   (0.88)   (0.90)   (0.90)   (1.14)
Common Share repurchases

0.00(a)   0.02       0.01
Tender offer purchases

    0.07    
Net asset value, end of period

$11.93   $11.07   $12.94   $12.07   $11.66
Market value, end of period

$11.19   $9.38   $11.66   $11.16   $10.13
Total return based on net asset value (b)

17.09%   (6.85)%   15.91%   12.39%   (6.03)%
Total return based on market value (b)

29.74%   (12.42)%   12.88%   19.61%   (6.63)%
Ratios to average net assets/supplemental data:                  
Net assets, end of period (in 000’s)

$ 152,154   $ 141,376   $ 167,620   $ 208,482   $ 201,262
Ratio of total expenses to average net assets

2.88%   2.81%   2.52%   2.19%   2.10%
Ratio of total expenses to average net assets excluding interest expense

1.77%   1.82%   1.84%   1.71%   1.71%
Ratio of net investment income (loss) to average net assets

5.60%   5.88%   5.81%   5.93%   6.42%
Portfolio turnover rate

42%   58%   54%   64%   61%
Indebtedness:                  
Total loans outstanding (in 000’s)

$ 60,572   $ 60,799   $ 63,309   $ 82,421   $ 86,243
Asset coverage per $1,000 of indebtedness (c)

$ 3,512   $ 3,325   $ 3,648   $ 3,529   $ 3,334
    
(a) Amount is less than $0.01.
(b) Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan, and changes in net asset value per share for net asset value returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.
(c) Calculated by subtracting the Fund’s total liabilities (not including the loans outstanding) from the Fund’s total assets, and dividing by the outstanding loans balance in 000’s.
Page 20
See Notes to Financial Statements

Notes to Financial Statements
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2019
1. Organization
First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”) is a diversified, closed-end management investment company organized as a Massachusetts business trust on September 2, 2004, and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund trades under the ticker symbol “FAM” on the New York Stock Exchange (“NYSE”).
The Fund’s primary investment objective is to seek a high level of current income. As a secondary objective, the Fund seeks capital appreciation. The Fund pursues these objectives by investing its Managed Assets in the world bond markets through a diversified portfolio of investment grade and below-investment grade government and corporate debt securities. “Managed Assets” means the total asset value of the Fund minus the sum of the Fund’s liabilities other than the principal amount of borrowings, if any. There can be no assurance that the Fund will achieve its investment objectives. The Fund may not be appropriate for all investors.
2. Significant Accounting Policies
The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies.” The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
A. Portfolio Valuation
The net asset value (“NAV”) of the Common Shares of the Fund is determined daily as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. Domestic debt securities and foreign securities are priced using data reflecting the earlier closing of the principal markets for those securities. The Fund’s NAV per Common Share is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses, dividends declared but unpaid and any borrowings of the Fund), by the total number of Common Shares outstanding.
The Fund’s investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Pricing Committee of the Fund’s investment advisor, First Trust Advisors L.P. (“First Trust” or the “Advisor”), in accordance with valuation procedures adopted by the Fund’s Board of Trustees, and in accordance with provisions of the 1940 Act. Investments valued by the Advisor’s Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. The Fund’s investments are valued as follows:
Bonds, notes, and other debt securities are fair valued on the basis of valuations provided by dealers who make markets in such securities or by a third-party pricing service approved by the Fund’s Board of Trustees, which may use the following valuation inputs when available:
1) benchmark yields;
2) reported trades;
3) broker/dealer quotes;
4) issuer spreads;
5) benchmark securities;
6) bids and offers; and
7) reference data including market research publications.
Fixed income and other debt securities having a remaining maturity of sixty days or less when purchased are fair valued at cost adjusted for amortization of premiums and accretion of discounts (amortized cost), provided the Advisor’s Pricing Committee has determined that the use of amortized cost is an appropriate reflection of fair value given market and issuer-specific conditions existing at the time of the determination. Factors that may be considered in determining the appropriateness of the use of amortized cost include, but are not limited to, the following:
1) the credit conditions in the relevant market and changes thereto;
2) the liquidity conditions in the relevant market and changes thereto;
3) the interest rate conditions in the relevant market and changes thereto (such as significant changes in interest rates);
Page 21

Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2019
4) issuer-specific conditions (such as significant credit deterioration); and
5) any other market-based data the Advisor’s Pricing Committee considers relevant. In this regard, the Advisor’s Pricing Committee may use last-obtained market-based data to assist it when valuing portfolio securities using amortized cost.
Forward foreign currency contracts are fair valued at the current day’s interpolated foreign exchange rate, as calculated using the current day’s spot rate, and the thirty, sixty, ninety, and one-hundred eighty day forward rates provided by a third-party pricing service.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Fund’s Board of Trustees or its delegate, the Advisor’s Pricing Committee, at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended (the “1933 Act”)) for which a third-party pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market or fair value price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of the Fund’s NAV or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the third-party pricing service, does not reflect the security’s fair value. As a general principle, the current fair value of a security would appear to be the amount which the owner might reasonably expect to receive for the security upon its current sale. When fair value prices are used, generally they will differ from market quotations or official closing prices on the applicable exchanges. A variety of factors may be considered in determining the fair value of such securities, including, but not limited to, the following:
1) the fundamental business data relating to the issuer, or economic data relating to the country of issue;
2) an evaluation of the forces which influence the market in which these securities are purchased and sold;
3) the type, size and cost of the security;
4) the financial statements of the issuer, or the financial condition of the country of issue;
5) the credit quality and cash flow of the issuer, or country of issue, based on Aberdeen Standard Investments Inc.’s (“ASII” or the “Sub-Advisor”) or external analysis;
6) the information as to any transactions in or offers for the security;
7) the price and extent of public trading in similar securities (or equity securities) of the issuer/borrower, or comparable companies;
8) the coupon payments;
9) the quality, value and salability of collateral, if any, securing the security;
10) the business prospects of the issuer, including any ability to obtain money or resources from a parent or affiliate and an assessment of the issuer’s management (for corporate debt only);
11) the economic, political and social prospects/developments of the country of issue and the assessment of the country’s governmental leaders/officials (for sovereign debt only);
12) the prospects for the issuer’s industry, and multiples (of earnings and/or cash flows) being paid for similar businesses in that industry (for corporate debt only); and
13) other relevant factors.
The Fund is subject to fair value accounting standards that define fair value, establish the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation as of the measurement date. The three levels of the fair value hierarchy are as follows:
Level 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly.
o Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates).
o Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Page 22

Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2019
Level 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the investment.
The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value the Fund’s investments as of December 31, 2019, is included with the Fund’s Portfolio of Investments.
B. Security Transactions and Investment Income
Security transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Interest income is recorded on the accrual basis. Amortization of premiums and accretion of discounts are recorded by using the effective interest method.
On July 27, 2017, the Financial Conduct Authority (“FCA”) announced that it will no longer persuade or compel banks to submit rates for the calculations of the London Interbank Offered Rates (“LIBOR”) after 2021 (the “FCA Announcement”). Furthermore, in the United States, efforts to identify a set of alternative U.S. dollar reference interest rates include proposals by the Alternative References Rates Committee of the Federal Reserve Board and the Federal Reserve Bank of New York. On August 24, 2017, the Federal Reserve Board requested public comment on a proposal by the Federal Reserve Bank of New York, in cooperation with the Office of Financial Research, to produce three new reference rates intended to serve as alternatives to LIBOR. These alternative rates are based on overnight repurchase agreement transactions secured by U.S. Treasury Securities. On December 12, 2017, following consideration of public comments, the Federal Reserve Board concluded that the public would benefit if the Federal Reserve Bank of New York published the three proposed reference rates as alternatives to LIBOR (the “Federal Reserve Board Notice”).
At this time, it is not possible to predict the effect of the FCA Announcement, the Federal Reserve Board Notice, or other regulatory changes or announcements, any establishment of alternative reference rates of any other reforms to LIBOR that may be enacted in the United Kingdom, the United States or elsewhere. As such, the potential effect of any such event on the Fund cannot yet be determined.
Withholding taxes and tax reclaims on foreign interest have been provided for in accordance with each Fund’s understanding of the applicable country’s tax rules and rates.
Securities purchased or sold on a when-issued, delayed-delivery or forward purchase commitment basis may have extended settlement periods. The value of the security purchased is subject to market fluctuations during this period. The Fund maintains liquid assets with a current value at least equal to the amount of its when-issued, delayed-delivery or forward purchase commitments until payment is made. At December 31, 2019, the Fund had no when-issued, delayed-delivery or forward purchase commitments.
C. Restricted Securities
The Fund invests in restricted securities, which are securities that may not be offered for public sale without first being registered under the 1933 Act. Prior to registration, restricted securities may only be resold in transactions exempt from registration under Rule 144A under the 1933 Act, normally to qualified institutional buyers. As of December 31, 2019, the Fund held restricted securities as shown in the following table that the Sub-Advisor has deemed illiquid pursuant to procedures adopted by the Fund’s Board of Trustees. Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security-specific factors and assumptions, which require subjective judgment. The Fund does not have the right to demand that such securities be registered. These securities are valued according to the valuation procedures as stated in the Portfolio Valuation note (Note 2A) and are not expressed as a discount to the carrying value of a comparable unrestricted security. There are no unrestricted securities with the same maturity dates and yields for these issuers.
Security Acquisition
Date
Principal
Value/Shares
Current Price Carrying
Cost
  Value   % of
Net
Assets
OAS Finance Ltd., 8.88% 4/18/2013 $1,550,000 $0.75 $1,550,000   $11,625   0.01%
OAS Investments GmbH, 8.25%, 10/19/19 10/12/2012 460,000 0.75 460,000   3,450   0.00
        $2,010,000   $15,075   0.01%
D. Forward Foreign Currency Contracts
The Fund is subject to foreign currency risk in the normal course of pursuing its investment objectives. Forward foreign currency contracts are agreements between two parties (“Counterparties”) to exchange one currency for another at a future date and at a specified price. The Fund uses forward foreign currency contracts to facilitate transactions in foreign securities and to manage the Fund’s foreign currency exposure. These contracts are valued daily, and the Fund’s net equity therein, representing unrealized gain or
Page 23

Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2019
loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in “Unrealized appreciation on forward foreign currency contracts” and “Unrealized depreciation on forward foreign currency contracts” on the Statement of Assets and Liabilities. The change in unrealized appreciation (depreciation) is included in “Net change in unrealized appreciation (depreciation) on forward foreign currency contracts” on the Statement of Operations. When the forward contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or the cost of) the closing transaction and the Fund’s basis in the contract. This realized gain or loss is included in “Net realized gain (loss) on forward foreign currency contracts” on the Statement of Operations. Risks arise from the possible inability of Counterparties to meet the terms of their contracts and from movement in currency, securities values and interest rates. Due to the risks, the Fund could incur losses in excess of the net unrealized value shown on the Forward Foreign Currency Contracts table in the Portfolio of Investments. In the event of default by the Counterparty, the Fund will provide notice to the Counterparty of the Fund’s intent to convert the currency held by the Fund into the currency that the Counterparty agreed to exchange with the Fund. If a Counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. The Fund may obtain only limited recovery or may obtain no recovery in such circumstances.
E. Foreign Currency
The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period. Purchases and sales of investments and items of income and expense are translated on the respective dates of such transactions. Unrealized gains and losses on assets and liabilities, other than investments in securities, which result from changes in foreign currency exchange rates have been included in “Net change in unrealized appreciation (depreciation) on foreign currency translation” on the Statement of Operations. Unrealized gains and losses on investments in securities which result from changes in foreign exchange rates are included with fluctuations arising from changes in market price and are shown in “Net change in unrealized appreciation (depreciation) on investments” on the Statement of Operations. Net realized foreign currency gains and losses include the effect of changes in exchange rates between trade date and settlement date on investment security transactions, foreign currency transactions and interest and dividends received and are shown in “Net realized gain (loss) on foreign currency transactions” on the Statement of Operations. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase settlement date and subsequent sale trade date is included in “Net realized gain (loss) on investments” on the Statement of Operations.
F. Dividends and Distributions to Shareholders
The Fund will distribute to holders of its Common Shares monthly dividends of all or a portion of its net income after the payment of interest and dividends in connection with leverage, if any. Distributions of any long-term capital gains earned by the Fund are distributed at least annually. Distributions will automatically be reinvested into additional Common Shares pursuant to the Fund’s Dividend Reinvestment Plan unless cash distributions are elected by the shareholder.
Distributions from net investment income and realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These permanent differences are primarily due to the varying treatment of income and gain/loss on portfolio securities held by the Fund and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for financial statement and tax purposes, will reverse at some time in the future.
Permanent differences incurred during the fiscal year ended December 31, 2019, primarily as a result of differing book and tax treatment on realization of foreign currency gains (losses), have been reclassified at year end to reflect a decrease in accumulated net investment income (loss) by $2,714,632, an increase in accumulated net realized gain (loss) by $2,962,407 and a decrease to paid-in capital of $247,775. Accumulated distributable earnings (loss) consists of accumulated net investment income (loss), accumulated net realized gain (loss), and unrealized appreciation (depreciation). Net assets were not affected by this reclassification.
The tax character of distributions paid by the Fund during the fiscal years ended December 31, 2019 and 2018, was as follows:
Distributions paid from: 2019 2018
Ordinary income

$5,010,759 $6,988,946
Capital gains

Return of capital

6,152,975 4,330,624
Page 24

Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2019
As of December 31, 2019, the components of distributable earnings and net assets on a tax basis were as follows:
Undistributed ordinary income

$
Undistributed capital gains

Total undistributed earnings

Accumulated capital and other losses

(13,012,539)
Net unrealized appreciation (depreciation)

4,177,197
Total accumulated earnings (losses)

(8,835,342)
Other

(76,709)
Paid-in capital