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)
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 4. Principal Accountant Fees and Services.
(a) Audit
Fees (Registrant) — The aggregate fees billed for each of the last two fiscal years for professional services
rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are
normally provided by the accountant in connection with statutory and regulatory filings or engagements were $53,000 for 2018 and
$53,000 for 2019.
(b) Audit-Related
Fees (Registrant) — The aggregate fees billed in each of the last two fiscal years, for assurance and related
services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial
statements and are not reported under paragraph (a) of this Item were $0 for 2018 and $0 for 2019.
Audit-Related
Fees (Investment Adviser) — The aggregate fees billed in each of the last two fiscal years of the registrant
for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of
the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 for 2018 and $0
for 2019.
(c) Tax
Fees (Registrant) — The aggregate fees billed in each of the last two fiscal years for professional services
rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant were $5,200 for 2018 and
$6,026 for 2019. These fees were for tax consultation or tax return preparation and professional services rendered for PFIC (passive
Foreign Investment Company) Identification Services.
Tax
Fees (Investment Adviser) — The aggregate fees billed in each of the last two fiscal years of the registrant
for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant’s
adviser were $0 for 2018 and $0 for 2019.
(d) All
Other Fees (Registrant) — The aggregate fees billed in each of the last two fiscal years for products and services
provided by the principal accountant to the registrant, other than the services reported in paragraphs (a) through (c) of this
Item were $0 for 2018 and $0 for 2019.
All
Other Fees (Investment Adviser) — The aggregate fees billed in each of the last two fiscal years for products
and services provided by the principal accountant to the registrant’s investment adviser, other than services reported in
paragraphs (a) through (c) of this Item were $0 for 2018 and $0 for 2019.
(e)(1)
Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X.
Pursuant to its
charter and its Audit and Non-Audit Services Pre-Approval Policy, the Audit Committee (the “Committee”) is responsible
for the pre-approval of all audit services and permitted non-audit services (including the fees and terms thereof) to be performed
for the registrant by its independent auditors. The Chairman of the Committee is authorized to give such pre-approvals on behalf
of the Committee up to $25,000 and report any such pre-approval to the full Committee.
The Committee
is also responsible for the pre-approval of the independent auditor’s engagements for non-audit services with the registrant’s
adviser (not including a sub-adviser whose role is primarily portfolio management and is sub-contracted or overseen by another
investment adviser) and any entity controlling, controlled by or under common control with the investment adviser that provides
ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant,
subject to the de minimis exceptions for non-audit services described in Rule 2-01 of Regulation S-X. If the independent
auditor has provided non-audit services to the registrant’s adviser (other than any sub-adviser whose role is primarily portfolio
management and is sub-contracted with or overseen by another investment adviser) and any entity controlling, controlled by or under
common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant
to its policies, the Committee will consider whether the provision of such non-audit services is compatible with the auditor’s
independence.
(e)(2)
The percentage of services described in each of paragraphs (b) through (d) for the registrant and the registrant’s investment
adviser of this Item that were approved by the audit committee pursuant to the pre-approval exceptions included in paragraph (c)(7)(i)(c)
or paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:
(b) 0%
(c) 0%
(d) 0%
(f)
The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements
for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s
full-time, permanent employees was less than fifty percent.
(g)
The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered
to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the Registrant for 2018 were $5,200 and $48,190 for the Registrant and the
Registrant’s investment adviser, respectively and for 2019 were $6,026 and $75,670 for the Registrant and the Registrant’s
investment adviser, respectively.
(h)
The Registrant’s audit committee of its Board of Trustees determined that the provision of non-audit services that were
rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management
and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the Registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 7. Disclosure of Proxy
Voting Policies and Procedures for Closed-End Management Investment Companies.
The Proxy Voting Policies are attached herewith.
U.S. Registered Advisers (the “ASI
Advisers”)
Proxy Voting Guidelines
Effective as of January 1, 2019
Rule 206(4)-6 under the Investment
Advisers Act of 1940, as amended (the “Advisers Act”) requires the ASI Advisers to vote proxies in a manner consistent
with clients’ best interest and must not place its interests above those of its clients when doing so. It requires the ASI
Advisers to: (i) adopt and implement written policies and procedures that are reasonably designed to ensure that the ASI Advisers
vote proxies in the best interest of the clients, and (ii) to disclose to the clients how they may obtain information on how the
ASI Advisers voted proxies. In addition, Rule 204-2 requires the ASI Advisers to keep records of proxy voting and client requests
for information.
As registered investment advisers,
the ASI Advisers have an obligation to vote proxies with respect to securities held in its client portfolios in the best economic
interests of the clients for which it has proxy voting authority.
The ASI Advisers invest for the
clients’ portfolios in companies globally and actively target investment in those companies with sound corporate governance
practices. The ASI Advisers are committed to exercising responsible ownership with a conviction that companies adopting best practices
in corporate governance will be more successful in their core activities and deliver enhanced returns to shareholders.
ASI and its affiliated U.S. registered
advisers (the “ASI Advisers”) have adopted a proxy voting policy. The proxy voting policy is designed and implemented
in a way that is reasonably expected to ensure that proxies are voted in the best interests of clients.
Voting decisions are made by the ASI
Advisers’ investment managers, and are based on their knowledge of the company and discussions with management – ASI
Advisers’ investment managers consider explanations from companies about their compliance with relevant corporate governance
codes and may refer to independent research from voting advisory services in reaching a voting decision. However, voting decisions
for exchange traded funds are made strictly in accordance with ISS’s proxy voting guidelines which are reviewed and approved
on an annual basis.
Where contentious issues arise in relation
to motions put before a shareholders’ meeting, ASI Advisers will usually contact the management of the company to exchange
views and give management the opportunity to articulate its position. The long term nature of the relationships that we develop
with investee company boards should enable us to deal with any concerns that we may have over strategy, the management of risk
or governance practices directly with the chairman or senior independent director. In circumstances where this approach is unsuccessful,
ASI Advisers are prepared to escalate their intervention by expressing their concerns through the company’s advisers, through
interaction with other shareholders or attending and speaking at General Meetings.
As an independent asset manager, ASI
is free of many of the conflicts of interest that can compromise the implementation of a rigorous and objective proxy voting policy.
However, in managing third party money on behalf of clients, there are a limited number of situations where potential conflicts
of interest could arise in the context of proxy voting. One case is where funds are invested in companies that are either clients
or related parties of clients. Another case is where one fund managed by ASI invests in other funds managed by ASI.
For cases involving potential conflicts
of interest, ASI Advisers have implemented procedures to ensure the appropriate handling of proxy voting decisions. The guiding
principle of ASI Advisers’ conflicts of interest policy is simple – to exercise our right to vote in the best interests
of the clients on whose behalf we are managing funds.
We employ ISS as a service provider
to deliver our voting decisions efficiently to companies. We require ISS to provide recommendations based on our own set of parameters
to tailored ASI’s assessment and approach, but remain conscious always that all voting decisions are our own on behalf of
our clients. We consider ISS’s recommendations and those based on our custom parameters as input to our voting decisions.
An ASI analyst will assess the resolutions
at general meetings in our active investment portfolios. This analysis will be based on our knowledge of the company, but will
also make use of the custom and standard recommendations provided by ISS as described above. The product of this analysis will
be final voting decision instructed through ISS applied to all funds for which ASI have been appointed to vote. For funds managed
by a sub-adviser, we may delegate to the sub-adviser the authority to vote proxies; however, the sub-adviser will be required to
either follow our policies and procedures or to demonstrate that their policies and procedures are consistent with ours, or otherwise
implemented in the best interest of clients.
There may be certain circumstances
where ASI may take a more limited role in voting proxies. We will not vote proxies for client accounts in which the client contract
specifies that ASI will not vote. We may abstain from voting a client proxy if the voting is uneconomic or otherwise not in clients’
best interests. For companies held only in passively managed portfolios the ASI custom recommendations provided by ISS will be
used to automatically apply our voting approach; we have scope to intervene to test that this delivers appropriate results, and
will on occasions intrude to apply a vote more fully in clients’ best interests. If voting securities are part of a securities
lending program, we may be unable to vote while the securities are on loan. However, we have the ability to recall shares on loan
or to restrict lending when required, in order to ensure all shares have voted. In addition, certain jurisdictions may impose share-blocking
restrictions at various times which may prevent ASI from exercising our voting authority.
This policy has been developed by the
ASI corporate governance working group. The implementation of this policy, along with the conflicts of interest database, will
be reviewed periodically by the group. ASI’s Corporate Governance Policy and Principles are published on our website
To the extent that an ASI Adviser may
rely on sub-advisers, whether affiliated or unaffiliated, to manage any client portfolio on a discretionary basis, the ASI Adviser
may delegate responsibility for voting proxies to the sub-adviser. However, such sub-advisers will be required either to follow
these Policies and Procedures or to demonstrate that their proxy voting policies and procedures are consistent with these Policies
and Procedures or otherwise implemented in the best interests of the ASI Advisers’ clients.
Upon request, the ASI Advisers will
provide clients with a copy of these Policies and Procedures, as revised from time to time.
As disclosed in Part 2A of each ASI
Adviser’s Form ADV, a client may obtain information on how its proxies were voted by requesting such information from its
ASI Adviser. Unless specifically requested by a client in writing, and other than as required for the Funds, the ASI Advisers do
not generally disclose client-specific proxy votes to third parties.
Our proxy voting records are available
per request and on the SEC’s website at SEC.gov.
ERISA
The U.S. Department of Labor (“DOL”)
has indicated that an investment adviser with a duty to vote proxies has an obligation to take reasonable steps under the circumstances
to ensure that it receives the proxies. Failure to take any action to reconcile proxies would cause ASI to fail to satisfy ERISA’s
fiduciary responsibility provisions. Appropriate steps include informing the Plan sponsor and its trustees, bank custodian or broker/dealer
custodian of the requirement that all proxies be forwarded to the adviser and making periodic reviews during the proxy season,
including follow-up letters and phone calls if necessary. When voting proxies, an investment manager must consider proxies as a
Plan asset and vote only in the best economic interests of the Plan participants, vote consistently among clients, and avoid specific
client voting instructions about voting proxies.
DOL has provided investment managers
with the following guidance about their ERISA responsibilities, including proxy voting, compliance with written statements of investment
policy, and active monitoring of corporate management by Plan fiduciaries:
|
|
i.
|
Where the authority to manage Plan assets has been delegated to an
investment manager, only the investment manager has authority to vote proxies, except when the named fiduciary has reserved to
itself or to another named fiduciary (as authorized by the plan document) the right to direct a Plan trustee regarding the voting
of proxies.
|
|
|
ii.
|
Investment managers, as Plan fiduciaries, have a responsibility to
vote proxies on foreign issues that may affect the value of the shares in the Plan’s portfolio and will vote such proxies
unless the cost of doing so cannot be justified.
|
|
|
iii.
|
An investment manager is required to comply with statements of investment
policy, unless compliance with the guidelines in a given instance would be imprudent and therefore failure to follow the guidelines
would not violate ERISA. ERISA does not shield the investment manager from liability for imprudent actions taken in compliance
with a statement of investment policy.
|
On occasions when it is deemed to be
a fiduciary for an ERISA client’s assets, ASI will vote the Plan assets in accordance with ASI’s Proxy Voting Policy.
ASI will provide each ERISA client (upon request) with proxy voting records to demonstrate how proxies for securities held in the
portfolio were voted.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a)(1) Identification of Portfolio Manager(s) or Management
Team Members and Description of Role of Portfolio Manager(s) or Management Team Members
Information provided as of February 13, 2020
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.
Brett Diment
Head of Global Emerging Market Debt
Mr. Diment is Head of Global Emerging Market
Debt and joined Aberdeen following the acquisition of Deutsche Asset Management (“Deutsche”) in 2005. He is responsible
for the day-to-day management of the Emerging Market Debt Team and portfolios. Mr. Diment had been at Deutsche since 1991 as a
member of the Fixed Income group and served as Head of the Emerging Debt Team there from 1999 until its acquisition by Aberdeen.
Max Wolman
Senior Investment Manager, Emerging Market Debt
Mr. Wolman is an Invesmtent Director on the
Emerging Market Debt Team and has been with Aberdeen since January 2001. Mr. Wolman originally specialized in currency and domestic
debt analysis but is now responsible for a wide range of emerging debt analysis including external and corporate issuers. Mr. Wolman
is a member of the Emerging Markets Debt Investment Committee at Aberdeen and is also responsible for the daily implementation
of the investment process.
Edwin Gutierrez
Head of Emerging Market Sovereign Debt
Mr. Gutierrez is the Head of Emerging Market
Sovereign Debt. Edwin joined Aberdeen via the acquisition of Deutsche Asset Management's London and Philadelphia fixed income businesses
in 2005, where he held the same role since joining Deutsche in 2000.
James Athey
Senior Investment Manager, Fixed Income EMEA, Global & European
Rates
Mr. Athey is a Senior Investment Manager on
the Rates Management Team (Global & European Rates – Fixed Income). James joined Aberdeen in 2001 through the Graduate
Recruitment Program.
Patrick O’Donnell
Senior Investment Manager, Fixed Income EMEA, Global & European
Rates
Mr. O’Donnell is a Senior Investment
Manager on the Rates Management Team (Global & European Rates – Fixed Income). Patrick Joined Aberdeen Standard Investments
in 2005 through the Graduate Recruitment Program.
|
|
(a)(2)
|
Other Accounts Managed by Portfolio Manager(s) or Management Team Member and Potential Conflicts of Interest
|
Other Accounts Managed by Portfolio
Manager(s) or Management Team Member
Information provided as of December 31, 2019
(assets in millions).
Name of Portfolio Manager or Team Member
|
Type of Accounts***
|
Total
# of Accounts Managed
|
Total
Assets
|
# of Accounts Managed for which Advisory Fee is Based on Performance
|
Total Assets for which Advisory Fee is Based
on Performance
|
|
|
|
|
|
|
|
|
1. Brett Diment
|
Registered Investment Companies:
|
10
|
$2,066
|
0
|
$0
|
|
|
Other Pooled Investment Vehicles:
|
84
|
$7,622
|
0
|
$0
|
|
|
Other Accounts:
|
36
|
$6,248
|
0
|
$0
|
|
|
|
|
|
|
|
|
2. Edwin Gutierrez
|
Registered Investment Companies:
|
10
|
$2,066
|
0
|
$0
|
|
|
Other Pooled Investment Vehicles:
|
84
|
$7,622
|
0
|
$0
|
|
|
Other Accounts:
|
36
|
$6,248
|
0
|
$0
|
|
|
|
|
|
|
|
|
3. James Athey
|
Registered Investment Companies:
|
6
|
$99
|
0
|
$0
|
|
|
Other Pooled Investment Vehicles:
|
13
|
$2,595
|
0
|
$0
|
|
|
Other Accounts:
|
28
|
$3,543
|
0
|
$0
|
|
|
|
|
|
|
|
|
4. Patrick O’Donnell
|
Registered Investment Companies:
|
6
|
$99
|
0
|
$0
|
|
|
Other Pooled Investment Vehicles:
|
13
|
$2,595
|
0
|
$0
|
|
|
Other Accounts:
|
28
|
$3,543
|
0
|
$0
|
|
|
|
|
|
|
|
|
5. Max Wolman
|
Registered Investment Companies:
|
10
|
$2,066
|
0
|
$0
|
|
|
Other Pooled Investment Vehicles:
|
84
|
$7,622
|
0
|
$0
|
|
|
Other Accounts:
|
36
|
$6,248
|
0
|
$0
|
Potential Conflicts of Interests
As of December 31, 2019
Conflicts of Interest may arise, in the course
of providing a service, where there may be a risk of damage to the interests of a client. In accordance with legal requirements
in the various jurisdictions in which we operate, Aberdeen Standard Investments (“ASI”) have in place arrangements
to identify and manage Conflicts of Interest that may arise between them and their clients or between their different clients.
Where ASI does not consider that these arrangements are sufficient to manage a particular conflict, it will inform the relevant
client(s) of the nature of the conflict so that the client(s) may decide how to proceed.
ASI or any other party to whom it may have
delegated its functions, may in its absolute discretion, effect transactions in which it or any of its affiliated companies has,
directly or indirectly, a material interest, or a relationship of any description with another party which may involve a potential
conflict with ASI’s duty to its client. ASI ensures that such transactions are effected on terms which are not materially
less favorable to the client than if the potential conflict had not existed.
Such potential conflicting interests or duties
may, inter alia, arise because:
·
ASI or an affiliated company undertakes an activity that is regulated by a relevant regulator for other clients including its affiliated
companies (and the clients of affiliated companies)
·
a Director or Employee of ASI, or of an affiliated company, is a director of, holds or deals in securities of, or is otherwise
interested in, any company whose securities are held or dealt in on behalf of a client
·
a transaction is effected in securities issued by an affiliated company or the client of an affiliated company
·
a transaction is effected in securities in respect of which ASI or an affiliated company may benefit from a commission, fee, mark-up
or mark-down payable otherwise than by the client, and ASI may be remunerated by the counterparty to any such transaction
·
ASI deals on behalf of the client with, or in the securities of, an affiliated company
·
ASI acts as agent for the client in relation to transactions in which it is also acting as agent for the account of other clients
and/or affiliated companies
·
ASI, acting as principal, sells to or purchases currency from the client and, in exceptional circumstances, deals in securities
as principal with the client
·
a transaction is effected in units or shares of connected investment trusts, unit trusts, open ended investment companies or of
any company of which ASI or an affiliated company is the manager, authorized corporate director, operator, banker, adviser, custodian,
administrator, trustee or depositary
·
ASI effects transactions involving placings and/or new issues with an affiliated company who may be acting as principal or receiving
agent’s commission
·
a transaction is effected in securities of a company for which ASI or an affiliated company has underwritten, or managed or arranged
an issue or offer for sale within the previous 12 months
·
ASI or an affiliated company receives remuneration or other benefits by reason of acting in corporate finance or similar transactions
involving a company whose securities are held by the client
·
a transaction is effected in securities in respect of which ASI or an affiliated company, or a Director or Employee of ASI or an
affiliated company, is contemporaneously trading or has traded on its own account or has either a long or short position
·
ASI acting as agent for the client, matches an order of the client with an order of another client for whom it is acting as agent
·
ASI effects transactions in investments, the prices of which are being or have been, stabilized by transactions involving an affiliated
company.
At ASI, existing and potential conflicts of
interest are recorded and reviewed by Compliance to ensure that internal procedures are sufficient to manage a particular conflict.
Please also refer to our Form ADV Part II for
additional information regarding Conflict of Interest.
(a)(3) Compensation Structure of Portfolio Manager(s) or
Management Team Members
Information provided as of December 31, 2019
ASI’s remuneration policies are designed to support
its business strategy as a leading international asset manager. The objective is to attract, retain and reward talented individuals
for the delivery of sustained, superior returns for ASI’s clients and shareholders. ASI operates in a highly competitive
international employment market, and aims to maintain its strong track record of success in developing and retaining talent.
ASI’s policy is to recognize corporate and individual
achievements each year through an appropriate annual bonus scheme. The bonus is a single, fully discretionary variable pay award.
The aggregate value of awards in any year is dependent on the group’s overall performance and profitability. Consideration
is also given to the levels of bonuses paid in the market. Individual awards, which are payable to all members of staff, are determined
by a rigorous assessment of achievement against defined objectives.
The variable pay award comprises a mixture of cash and a
deferred award based on the size of the award. Deferred awards are by default Standard Life Aberdeen shares, with an option to
put up to 50% of deferral into funds. Overall compensation packages are designed to be competitive relative to the investment management
industry.
Base Salary: ASI’s policy is to pay a fair salary commensurate
with the individual’s role, responsibilities and experience, and having regard to the market rates being offered for similar
roles in the asset management sector and other comparable companies. Any increase is generally to reflect inflation and is applied
in a manner consistent with other ASI employees; any other increases must be justified by reference to promotion or changes in
responsibilities.
Annual Bonus: The Remuneration Committee determines the key
performance indicators that will be applied in considering the overall size of the bonus pool. In line with practices amongst other
asset management companies, individual bonuses are not subject to an absolute cap. However, the aggregate size of the bonus pool
is dependent on the group’s overall performance and profitability. Consideration is also given to the levels of bonuses paid
in the market. Individual awards are determined by a rigorous assessment of achievement against defined objectives, and are reviewed
and approved by the Remuneration Committee.
ASI has a deferral policy which is intended to assist in
the retention of talent and to create additional alignment of executives’ interests with ASI’s sustained performance
and, in respect of the deferral into funds, managed by ASI, to align the interest of asset managers with our clients.
Staff performance is reviewed formally at least once a year.
The review process evaluates the various aspects that the individual has contributed to ASI, and specifically, in the case of portfolio
managers, to the relevant investment team. Discretionary bonuses are based on client service, asset growth and the performance
of the respective portfolio manager. Overall participation in team meetings, generation of original research ideas and contribution
to presenting the team externally are also evaluated.
In the calculation of a portfolio management team’s
bonus, ASI takes into consideration investment matters (which include the performance of funds, adherence to the company investment
process, and quality of company meetings) as well as more subjective issues such as team participation and effectiveness at client
presentations through KPI scorecards. To the extent performance is factored in, such performance is not judged against any specific
benchmark and is evaluated over the period of a year - January to December. The pre- or after-tax performance of an individual
account is not considered in the determination of a portfolio manager’s discretionary bonus; rather the review process evaluates
the overall performance of the team for all of the accounts the team manages.
Portfolio manager performance on investment matters is judged
over all of the accounts the portfolio manager contributes to and is documented in the appraisal process. A combination of the
team’s and individual’s performance is considered and evaluated.
Although performance is not a substantial portion of a portfolio
manager’s compensation, ASI also recognizes that fund performance can often be driven by factors outside one’s control,
such as (irrational) markets, and as such pays attention to the effort by portfolio managers to ensure integrity of our core process
by sticking to disciplines and processes set, regardless of momentum and ‘hot’ themes. Short-terming is thus discouraged
and trading-oriented managers will thus find it difficult to thrive in the ASI environment. Additionally, if any of the aforementioned
undue risks were to be taken by a portfolio manager, such trend would be identified via ASI’s dynamic compliance monitoring
system.
In rendering investment management services, the Adviser
may use the resources of additional investment adviser subsidiaries of Standard Life Aberdeen plc. These affiliates have entered
into a memorandum of understanding (“MOU”) pursuant to which investment professionals from each affiliate may render
portfolio management, research or trading services to Aberdeen clients. Each investment professional who renders portfolio management,
research or trading services under a MOU or personnel sharing arrangement (“Participating Affiliate”) must comply with
the provisions of the Advisers Act, the 1940 Act, the Securities Act of 1933, as amended, (the “Securities Act”), the
Exchange Act, and the Employee Retirement Income Security Act of 1974, and the laws of states or countries in which the Adviser
does business or has clients. No remuneration is paid by the Fund with respect to the MOU/personnel sharing arrangements.
(a)(4) Disclosure of Securities Ownership
The information below is as of December 31, 2019
|
Name of Portfolio Manager or
Team Member
|
|
Dollar ($) Range of Fund Shares
Beneficially Owned
|
|
|
|
|
|
Patrick O’Donnell
|
|
$0
|
|
Brett Diment
|
|
$0
|
|
Edwin Guiterrez
|
|
$0
|
|
Max Wolman
|
|
$0
|
|
James Athey
|
|
$0
|
Item 9. Purchases of Equity
Securities by Closed-End Management Investment Company and Affiliated Purchasers.
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.
|
Period
|
(a) Total Number of Shares (or Units) Purchased
|
(b) Average Price Paid per Share (or Unit)
|
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
Month #1
(01/01/2019 – 01/31/2019)
|
2,057
|
$9.78
|
325,014
|
545,496
|
Month #2
(02/01/2019 – 02/28/2019)
|
11,569
|
$9.95
|
336,583
|
533,927
|
Month #3
(03/01/2019 – 03/31/2019)
|
400
|
$9.86
|
336,983
|
533,527
|
Month #4
(04/01/2019 – 04/30/2019)
|
0
|
0
|
336,983
|
533,527
|
Month #5
(05/01/2019 – 05/31/2019)
|
0
|
0
|
336,983
|
533,527
|
Month #6
(06/01/2019 – 06/30/2019
|
0
|
0
|
336,983
|
533,527
|
Month #7
(07/01/2019 – 07/31/2019
|
0
|
0
|
336,983
|
533,527
|
Month #8
(08/01/2019 – 08/31/2019
|
0
|
0
|
336,983
|
533,527
|
Month #9
(09/01/2019 – 09/31/2019
|
0
|
0
|
336,983
|
533,527
|
Month #10
(10/01/2019 – 10/31/2019
|
0
|
0
|
336,983
|
533,527
|
Month #11
(11/01/2019 – 11/30/2019)
|
0
|
0
|
336,983
|
533,527
|
Month #12
(12/01/2019 – 12/31/2019)
|
0
|
0
|
336,983
|
533,527
|
|
Total
|
14,026
|
$9.92
|
336,983
|
533,527
|
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the
procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were
implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K
(17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.