0001445546-13-004172.txt : 20130905
0001445546-13-004172.hdr.sgml : 20130905
20130905100605
ACCESSION NUMBER: 0001445546-13-004172
CONFORMED SUBMISSION TYPE: N-CSRS
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20130630
FILED AS OF DATE: 20130905
DATE AS OF CHANGE: 20130905
EFFECTIVENESS DATE: 20130905
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
CENTRAL INDEX KEY: 0001302624
IRS NUMBER: 736357662
FILING VALUES:
FORM TYPE: N-CSRS
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-21636
FILM NUMBER: 131079467
BUSINESS ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE, SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
BUSINESS PHONE: 630-765-8000
MAIL ADDRESS:
STREET 1: 120 EAST LIBERTY DRIVE, SUITE 400
CITY: WHEATON
STATE: IL
ZIP: 60187
N-CSRS
1
fam_ncsr.txt
SEMI-ANNUAL REPORT TO SHAREHOLDERS
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
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First Trust/Aberdeen Global Opportunity Income Fund
-------------------------------------------------------------
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
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(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
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(Name and address of agent for service)
registrant's telephone number, including area code: (630) 765-8000
----------------
Date of fiscal year end: December 31
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Date of reporting period: June 30, 2013
---------------
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. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
FIRST TRUST
Semi-Annual Report
For the Six Months Ended
June 30, 2013
First Trust/Aberdeen
Global Opportunity
Income Fund
(FAM)
ABERDEEN
ASSET MANAGEMENT
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TABLE OF CONTENTS
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
SEMI-ANNUAL REPORT
JUNE 30, 2013
Shareholder Letter........................................................... 1
At A Glance.................................................................. 2
Portfolio Commentary......................................................... 3
Portfolio of Investments..................................................... 6
Schedule of Forward Foreign Currency Contracts............................... 13
Statement of Assets and Liabilities.......................................... 14
Statement of Operations...................................................... 15
Statements of Changes in Net Assets.......................................... 16
Statement of Cash Flows...................................................... 17
Financial Highlights......................................................... 18
Notes to Financial Statements................................................ 19
Additional Information....................................................... 24
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 Asset Management Inc. ("Aberdeen" 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
the 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
http://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.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. 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 relevant market
benchmarks.
It is important to keep in mind that the opinions expressed by personnel of
Aberdeen 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 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
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
JUNE 30, 2013
Dear Shareholders:
I am pleased to present you with the semi-annual report for your investment in
First Trust/Aberdeen Global Opportunity Income Fund (the "Fund").
The report you hold contains detailed information about your investment, a
portfolio commentary from the Fund's management team that provides a recap of
the period, a performance analysis and a market and Fund outlook. Additionally,
you will find the Fund's financial statements for the period this report covers.
I encourage you to read this document and discuss it with your financial
advisor. A successful investor is also typically a knowledgeable one, as we have
found to be the case at First Trust Advisors L.P. ("First Trust").
The six months covered by this report have been more positive for the U.S.
markets. In fact, the S&P 500 Index, as measured on a total return basis, rose
13.82% during the period, and many economists and investors have felt positive
about the current market environment. Of course, past performance can never be
an indicator of future performance, but First Trust believes that staying
invested in quality products through up and down markets and having a long-term
horizon can help investors reach their financial goals.
As you know, First Trust offers a variety of products that we believe could help
investors seeking long-term investment success. We encourage you to talk to your
advisor about the other investments First Trust offers that might fit your
financial goals and to discuss those goals with your advisor regularly so that
he or she can help keep you on track.
First Trust will continue to make available up-to-date information about your
investments so you and your financial advisor are current on any First Trust
investments you own. We value our relationship with you, and thank you for the
opportunity to assist you in achieving your financial goals. I look forward to
the remainder of 2013 and to the next edition of your Fund's report.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees and
Chief Executive Officer of First Trust Advisors L.P.
Page 1
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
"AT A GLANCE"
AS OF JUNE 30, 2013 (UNAUDITED)
------------------------------------------------------------------------
FUND STATISTICS
------------------------------------------------------------------------
Symbol on New York Stock Exchange FAM
Common Share Price $15.43
Common Share Net Asset Value ("NAV") $16.01
Premium (Discount) to NAV (3.62)%
Net Assets Applicable to Common Shares $278,677,504
Current Monthly Distribution per Common Share (1) $0.130
Current Annualized Distribution per Common Share $1.560
Current Distribution Rate on Closing Common Share Price (2) 10.11%
Current Distribution Rate on NAV (2) 9.74%
------------------------------------------------------------------------
----------------------------------------------------
COMMON SHARE PRICE & NAV (WEEKLY CLOSING PRICE)
----------------------------------------------------
Common Share Price NAV
6/12 $17.09 $17.44
17.28 17.43
17.45 17.63
17.69 17.83
7/12 17.71 17.81
17.63 17.83
17.74 17.87
17.71 17.70
17.87 17.82
8/12 17.96 17.83
18.02 17.92
18.20 18.06
18.11 18.04
9/12 18.63 18.09
18.05 17.93
17.99 18.03
18.00 18.17
10/12 18.05 18.10
17.85 17.94
17.89 18.00
17.34 17.94
17.80 18.03
11/12 17.98 18.16
17.63 18.21
17.60 18.28
17.94 18.26
12/12 17.81 18.34
18.00 18.27
18.11 18.34
18.25 18.38
1/13 18.45 18.35
18.18 18.15
18.10 18.11
18.18 18.08
2/13 18.30 18.04
18.06 17.90
17.91 17.89
17.43 17.91
17.80 17.84
3/13 17.77 17.91
17.62 17.99
17.78 18.13
17.60 17.96
4/13 17.77 18.06
17.85 18.09
18.01 17.94
17.67 17.74
17.53 17.52
5/13 16.63 17.07
16.04 16.73
16.05 16.73
14.96 15.94
6/13 15.43 16.01
----------------------------------------------------
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PERFORMANCE
-----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
----------------------------------------
6 Months Ended 1 Year Ended 5 Years Ended Inception (11/23/2004)
6/30/2013 6/30/2013 6/30/2013 to 6/30/2013
FUND PERFORMANCE (3)
NAV -8.85% 0.27% 7.99% 7.96%
Market Value -9.64% -1.39% 9.49% 6.92%
INDEX PERFORMANCE
Blended Benchmark (4) -6.90% -0.81% 5.82% 6.51%
Barclays Global Emerging Markets Index -6.04% 3.91% 8.02% 8.31%
Barclays Global Aggregate Index -4.83% -2.18% 3.68% 4.09%
-----------------------------------------------------------------------------------------------------------------------------------
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% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
--------------------------------------------------------------
Asian Development Bank, 5.50%, 02/15/16 4.8%
Brazil Notas Do Tesouro Nacional, Series F, 10.00%,
01/01/17 4.8
New Zealand Government Bond, 6.00%, 12/15/17 4.6
Province of Manitoba, 6.38%, 09/01/15 3.5
Australian Government, 6.00%, 02/15/17 3.2
Hungary Government Bond, 6.75%, 11/24/17 2.9
Treasury Corp. of Victoria, 6.00%, 10/17/22 2.9
Mexican Bonos, 7.50%, 06/03/27 2.8
United Kingdom Gilt, 6.00%, 12/07/28 2.7
South African Government Bond, 10.50%, 12/21/26 2.7
--------------------------------------------------------------
Total 34.9%
======
---------------------------------------------------------
% OF TOTAL
CREDIT QUALITY (6) INVESTMENTS
---------------------------------------------------------
AAA 22.1%
AA+ 7.9
AA 4.4
AA- 0.7
A 1.3
A- 12.4
BBB+ 11.7
BBB 5.4
BBB- 11.5
BB+ 1.6
BB 2.0
BB- 8.4
B+ 3.8
B 4.0
B- 0.5
NR 2.3
---------------------------------------------------------
Total 100.0%
======
---------------------------------------------------------
% OF TOTAL
TOP 10 COUNTRIES (5) INVESTMENTS
---------------------------------------------------------
Russia 9.5%
Australia 8.2
Canada 8.0
Brazil 7.2
Multinational 6.2
Mexico 5.4
Turkey 5.2
New Zealand 4.7
United Kingdom 4.4
South Africa 4.0
---------------------------------------------------------
Total 62.8%
======
---------------------------------------------------------
% OF TOTAL
INDUSTRY CLASSIFICATION INVESTMENTS
---------------------------------------------------------
Sovereigns 65.4%
Supranationals 6.2
Regional and Local Governments 6.0
Government Agencies 5.1
Railroad 2.7
Exploration & Production 1.8
Government Development Banks 1.8
Banking 1.6
Food & Beverage 1.4
Financial Services 1.2
Wireless Telecom Services 0.9
Consumer Finance 0.8
Chemicals 0.7
Industrial Other 0.7
Metals & Mining 0.6
Construction Materials 0.5
Manufactured Goods 0.4
Utilities 0.4
Automotive 0.4
Pipeline 0.4
Real Estate 0.4
Wireline Telecom Services 0.3
Home Improvement 0.2
Retail Discretionary 0.1
Institutional Financial Services 0.0*
---------------------------------------------------------
Total 100.0%
======
* Amount is less than 0.1%.
(1) Most recent distribution paid or declared through 6/30/2013. 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 6/30/2013. 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 less
than one year. Past performance is not indicative of future results.
(4) Blended benchmark consists of the following: Citigroup World Government
Bond Index (40.0%); JPMorgan Emerging Market Bond Index - Global
Diversified (30.0%); JPMorgan Global Bond Index - Emerging Markets
Diversified (30.0%).
(5) Portfolio securities are included in a country based upon their underlying
credit exposure as determined by Aberdeen Asset Management Inc., the
sub-advisor.
(6) 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. The credit ratings shown relate
to the credit worthiness of the issuers of the underlying securities in
the Fund, and not to the Fund or its shares. Credit ratings are subject to
change.
Page 2
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PORTFOLIO COMMENTARY
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
SEMI-ANNUAL REPORT
JUNE 30, 2013
SUB-ADVISOR
Aberdeen Asset Management Inc. ("Aberdeen" or the "Sub-Advisor"), an
SEC-registered investment advisor, is a wholly-owned subsidiary of Aberdeen
Asset Management PLC ("Aberdeen Group"). Aberdeen Group is a publicly-traded
international investment management group listed on the London Stock Exchange,
managing assets for both institutional and retail clients from offices around
the world.
PORTFOLIO MANAGEMENT TEAM
Investment decisions for the First Trust/Aberdeen Global Opportunity Income Fund
(the "Fund") are made by Aberdeen using a team approach and not by any one
individual. By making team decisions, Aberdeen seeks to ensure that the
investment process results in consistent returns across all portfolios with
similar objectives. Aberdeen does not employ separate research analysts.
Instead, Aberdeen'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 Aberdeen invests. Below are the members of the team
with significant responsibility for the day-to-day management of the Fund's
portfolio.
JOZSEF SZABO EDWIN GUTIERREZ
Head of Global Macro Portfolio Manager, Emerging Market Debt
BRETT DIMENT MAX WOLMAN
Head of Emerging Market Debt Portfolio Manager, Emerging Market Debt
KEVIN DALY ESTHER CHAN
Portfolio Manager, Emerging Market Debt Portfolio Manager, Emerging Market Debt
FUND RECAP
The Fund had a net asset value ("NAV") total return(1) of -8.85% and a market
value total return of -9.64% for the six months ended June 30, 2013, compared to
the blended benchmark(2) total return(1) of -6.90% over the same period. In
addition to the blended benchmark, the Fund currently uses other indexes for
comparative purposes. The total returns for the six months ended June 30, 2013,
for these indexes were as follows: the Barclays Global Emerging Markets Index
was -6.04% and the Barclays Global Aggregate Index was -4.83%.
PERFORMANCE ANALYSIS - DEVELOPED MARKETS
The Fund's developed market portfolio underperformed during the first half of
2013 with a return of -8.56% versus the Citigroup World Government Bond Index
return of -5.66%. Positioning was relatively consistent during this period with
investments concentrated in well-rewarded safe havens such as Australia, New
Zealand, Canada and the UK relative to underweight positions in Europe, the U.S.
and Japan.
The biggest positive contributor to performance was the underweight position in
Japan which, due to the 12% depreciation in the value of the Yen relative to the
U.S. Dollar, was a big plus. Counteracting this, however, were the positions in
the Euro, U.S. Dollar and Australian Dollar, with the latter's 12% currency
depreciation versus the U.S. Dollar once again being a major factor in the
Fund's performance in Developed Markets.
PERFORMANCE ANALYSIS - EMERGING MARKETS
The emerging market portion of the Fund outperformed its blended benchmark of
both hard currency and local bonds by 199 bps and 65 bps respectively.
Within the hard currency space, the Fund's overweight position in Russia was the
key positive contributor to performance, helped by the Fund's allocation to
quasi-sovereign and corporate credits. Overweight positions in Pakistan and
Venezuela also added value to the Fund. An overweight position in Mexico
detracted from performance as the portfolio added exposure to the Mexican
homebuilder sector (which suffered from working capital issues during the first
quarter of 2013). An underweight in Lebanon and overweight position in Honduras
also detracted from Fund performance.
--------
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 less
than one year. Past performance is not indicative of future results.
2 Blended benchmark consists of the following: Citigroup World Government
Bond Index (40.0%); JPMorgan Emerging Market Bond Index - Global
Diversified (30.0%); JPMorgan Global Bond Index - Emerging Markets
Diversified (30.0%).
Page 3
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PORTFOLIO COMMENTARY (CONTINUED)
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
SEMI-ANNUAL REPORT
JUNE 30, 2013
Within the local currency holdings, an underweight position in Peru benefitted
the Fund as did a non-benchmark holding in Serbian treasury bills. An overweight
position in Mexico was the main detractor from performance as was an overweight
position in Indonesia and South Africa.
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 shareholder 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
Barclays Global Emerging Markets Index, Barclays Global Aggregate Index and the
components of the blended benchmark are not leveraged. Leverage had a negative
impact on the performance of the Fund over this reporting period.
MARKET RECAP AND FUND OUTLOOK - DEVELOPED MARKETS
The half year was really characterized by two distinct periods where markets
were driven by very different forces and influences.
The first quarter of the year was one which picked up from themes established at
the end of 2012 and ran with them. The drivers were abundant liquidity provided
by central banks, very low interest rates, a policy-driven stabilisation of the
Eurozone and latterly some "green shoots" of recovery beginning to emerge most
notably in the U.S. This meant that, for much of the first part of the year,
yields were kept within a fairly tight trading range at very low levels.
The Eurozone was a major beneficiary of this relative calm as European Central
Bank ("ECB") President Draghi was able to assuage market fears of breakup and
bring peace to bond markets, allowing spreads of all countries to tighten versus
their German equivalent. While the reduction of liquidity (through long-term
refinancing operations ["LTRO"] payback) was a problem early in the first
quarter, once these fears were calmed by Draghi the market quickly returned to
"lower for longer" mode and front-end rates returned to more normal levels.
Systemic issues had not completely gone away, however, and the Cyprus bailout
and subsequent capital controls, as well as political upheaval in Italy
certainly proved this. This assisted the Euro in moving lower versus the U.S.
Dollar in the first quarter as well as providing periods of illiquidity and
volatility in Eurozone bond markets.
Japan, driven by new PM Shinzo Abe, began to make noises indicating it was
prepared to make a more robust effort to exit its 20-year deflationary trap. The
resulting market expectations over the size of both monetary and fiscal stimulus
potentially involved caused the Yen to be weaker while pushing the Nikkei
higher.
As the quarter wore on, however, it became obvious that there was likely to be
some dislocation in the global economy as U.S. data continued to impress, while
Eurozone data continued to disappoint, and Japan clarified that it was indeed
set to embark on unprecedented stimulus.
All of this meant that there were competing forces in world financial markets
and while the U.S., as the world's biggest economy, set the tone for much of the
second quarter, spreads between the U.S. and those economies further from
economic recovery began to widen materially.
This theme saw yields rising steadily throughout the second quarter of 2013,
driven by talk in the U.S. of potential exit from the U.S. Federal Reserve's
(the "Fed") asset purchase policy. With front ends rates still expected to be on
hold, as "promised" by the Fed, this also saw yield curves steepening through
the period.
The first half of the year was also a period of considerable volatility for
Australian bond and currency markets, as those who sought the relative safety
and positive carry offered by Australia during the first quarter were made to
pay during the second quarter when China weakness, a slowing mining sector
alongside lower commodity prices as well as domestic factors, all contributed to
a material weakening in the Australian Dollar. This was a double whammy for bond
investors who struggled to hold onto their Australian and New Zealand
investments in the face of considerable selling pressure that began because of
the expected tapering of Fed bond purchases and the subsequent rise in U.S. bond
yields.
Looking ahead, the most likely driver of market direction over the coming months
will be economic data out of the U.S. The market has had to come to terms with
the idea that the Fed will not be buying assets ad infinitum; however, the
timing of future changes to this policy remains unknown and data-dependent. For
this reason, we expect U.S. economic data to be scrutinised even more closely
than normal with a particular focus on jobs data (because the Fed has told us
that this is the key focus for both asset purchase and rate policy), housing
data (because this has been such a significant portion of the recovery so far)
and inflation (because, should this remain weak, it has the potential to slow a
Fed exit of tapering in the bond markets given its dual mandate spelled out
here).
Page 4
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PORTFOLIO COMMENTARY (CONTINUED)
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
SEMI-ANNUAL REPORT
JUNE 30, 2013
We continue to expect Eurozone bond markets to pull against the tide of an
improving outlook in the U.S., as those nations struggle to generate growth
while managing their precarious fiscal positions and struggling within the
single currency regime. While some of the systemic risks seem to have passed as
a result of the ECB's LTRO and Outstanding Monetary Transaction policies, we do
not yet believe that the Eurozone is completely out of the woods. We expect
periodic volatility as unstable political situations, a lack of sustainable
growth, a dearth of domestic demand and social unrest continue to generate
headlines out of the non-core Eurozone countries.
For these reasons we continue to expect policy from the ECB to remain ultra-easy
with liquidity abundant.
The slowdown of China is also likely to have a tempering effect on any
positivity emanating from the U.S. recovery. It seems clear now that the new
Chinese administration is comfortable allowing a more laissez faire approach to
the economy which is likely to generate ripples which will be felt across the
world economy (but most closely in the Asia-Pacific region).
MARKET RECAP AND FUND OUTLOOK - EMERGING MARKETS
Emerging market debt posted gains during the six months ending June 30, 2013.
The ECB announced its "outright monetary transactions" program, while the Fed
decided to unleash further quantitative easing focused on purchasing
mortgage-backed securities and Germany's constitutional court ratified the
Eurozone bailout package. A surprise Italian parliamentary election result in
February and the news of a Cyprus bailout at the end of March caused risk
appetite to take a breather at the beginning of 2013. Poor employment figures in
the U.S., however, caused U.S. Treasury yields to fall sharply in April,
providing support for spread products.
Emerging market debt suffered a setback in May and June by increased rhetoric
from the Fed that it will seek to "taper" its quantitative easing program toward
the end of 2013. The announcement was motivated by increasingly positive signs
of economic recovery in the U.S., and U.S. Treasury yields rose as a result,
causing emerging market debt to suffer. Market concerns over a reversal in fund
flows into the asset class as well as a higher cost of financing for emerging
market countries, led to a significant re-pricing across all segments of the
asset class.
Over the six-month period, the JPMorgan Emerging Market Bond Index - Global
Diversified Index declined by 7.8%, while the blended benchmark spread widened
by 83bps to 341bps over U.S. Treasuries. High-yield credits outperformed
investment-grade bonds, as some of the smaller countries in the JPMorgan
Emerging Market Bond Index traded on more idiosyncratic rationales. Belize was
the top performer as it bounced back and benefitted from the restructuring of
its "superbond", while Ecuador, Pakistan and Jamaica also fared well. On the
other hand, Egypt declined the most over the period as the country's economic
and political problems came to the fore. Low-beta Latin American sovereigns also
suffered, with Uruguay and Peru the stand-outs, as their long-end bonds sold off
aggressively. The J.P. Morgan Global Bond Index - Emerging Market Diversified
declined 7.8% during the period. Asia outperformed due to stronger relative
performance from Malaysia; Latin America lagged due to poor bond and currency
returns from Brazil, Peru and Colombia.
It is difficult to assess how long this volatility will last. In the short term,
sentiment will remain data-dependent, with much of the focus on the U.S. growth
indicators. Fund flows--which often lag market movements--may continue as a
negative driver until the market feels an appropriate equilibrium level has been
found. From a medium to long-term perspective, the fundamentals of emerging
markets remain constructive. Balance sheets at a country, company and individual
level remain in good shape, but may deteriorate on the margin as growth slows.
Debt sustainability in emerging markets is expected to remain intact amid rising
borrowing costs, with debt levels on average one-third of those in developed
markets.
Page 5
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
PORTFOLIO OF INVESTMENTS (a)
JUNE 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ------------------------------------------------------------ ------------ -------- --------------
FOREIGN SOVEREIGN BONDS AND NOTES - 98.9%
AUSTRALIA - 10.5%
$ 11,000,000 Australian Government Bond (AUD) ........................... 6.00% 02/15/17 $ 11,149,117
8,100,000 Queensland Treasury Corp. (AUD) ............................ 6.00% 10/14/15 7,929,565
9,800,000 Treasury Corp. of Victoria (AUD) ........................... 6.00% 10/17/22 10,084,722
-------------
29,163,404
-------------
BELGIUM - 2.4%
4,500,000 Belgium Government Bond (EUR) .............................. 4.25% 09/28/21 6,754,100
-------------
BRAZIL - 7.3%
38,734,000 Brazil Notas do Tesouro Nacional, Series F (BRL) ........... 10.00% 01/01/17 16,971,632
2,480,000 Brazilian Government International Bond (BRL) .............. 8.50% 01/05/24 1,028,077
1,170,000 Brazilian Government International Bond (USD) .............. 7.13% 01/20/37 1,398,150
900,000 Brazilian Government International Bond (USD) .............. 5.63% 01/07/41 900,000
-------------
20,297,859
-------------
CANADA - 10.2%
5,000,000 Canadian Government Bond (CAD) ............................. 8.00% 06/01/23 7,089,141
15,000,000 Province of Manitoba (NZD) ................................. 6.38% 09/01/15 12,284,774
10,965,000 Province of Ontario (NZD) .................................. 6.25% 06/16/15 8,936,060
-------------
28,309,975
-------------
COLOMBIA - 0.1%
490,000,000 Columbia Government International Bond (COP) ............... 7.75% 04/14/21 288,439
-------------
COSTA RICA - 0.5%
1,200,000 Costa Rica Government International Bond (USD) ............. 4.25% 01/26/23 1,116,000
340,000 Costa Rica Government International Bond (USD) (c) ......... 4.38% 04/30/25 314,500
-------------
1,430,500
-------------
CROATIA - 0.9%
2,370,000 Croatia Government International Bond (USD) ................ 6.63% 07/14/20 2,525,282
-------------
DOMINICAN REPUBLIC - 0.4%
700,000 Dominican Republic International Bond (USD) ................ 7.50% 05/06/21 757,750
380,000 Dominican Republic International Bond (USD) (c) ............ 5.88% 04/18/24 361,000
-------------
1,118,750
-------------
GEORGIA - 0.5%
1,300,000 Georgian Oil and Gas Corp. (USD) (c) ....................... 6.88% 05/16/17 1,319,500
-------------
HONDURAS - 0.9%
$2,960,000 Honduras Government International Bond (USD) (c) ........... 7.50% 03/15/24 2,560,400
-------------
HUNGARY - 4.7%
2,170,000,000 Hungary Government Bond (HUF) .............................. 6.75% 11/24/17 10,108,663
2,950,000 Hungary Government Bond (USD) .............................. 4.13% 02/19/18 2,883,625
-------------
12,992,288
-------------
INDONESIA - 2.4%
17,100,000,000 Indonesia Treasury Bond (IDR) .............................. 10.00% 07/15/17 1,940,448
16,000,000,000 Indonesia Treasury Bond (IDR) .............................. 7.00% 05/15/27 1,520,922
8,500,000,000 Indonesia Treasury Bond (IDR) .............................. 6.13% 05/15/28 743,685
18,670,000,000 Indonesia Treasury Bond (IDR) .............................. 10.50% 08/15/30 2,359,275
-------------
6,564,330
-------------
Page 6 See Notes to Financial Statements
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
JUNE 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ------------------------------------------------------------ ------------ -------- --------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
IRAQ - 0.3%
1,060,000 Republic of Iraq (USD) ..................................... 5.80% 01/15/28 $ 887,750
-------------
ITALY - 3.0%
4,650,000 Italy Buoni Poliennali Del Tesoro (EUR) .................... 9.00% 11/01/23 8,235,220
-------------
IVORY COAST - 0.8%
2,730,000 Ivory Coast Government International Bond (USD) (d) ........ 5.75% 12/31/32 2,259,075
-------------
MALAYSIA - 1.7%
14,500,000 Malaysia Government Bond (MYR) ............................. 4.01% 09/15/17 4,683,782
-------------
MEXICO - 5.4%
6,400,000 Mexican Bonos (MXN) ........................................ 8.00% 12/17/15 534,243
115,500,000 Mexican Bonos (MXN) ........................................ 7.50% 06/03/27 10,005,632
13,850,000 Mexican Bonos (MXN) ........................................ 10.00% 11/20/36 1,426,122
11,600,000 Mexican Bonos (MXN) ........................................ 7.75% 11/13/42 968,655
1,890,000 Mexico Government International Bond (USD) ................. 6.05% 01/11/40 2,069,550
-------------
15,004,202
-------------
MONGOLIA - 0.7%
1,000,000 Development Bank of Mongolia LLC (USD) ..................... 5.75% 03/21/17 975,119
600,000 Mongolia Government International Bond (USD) ............... 4.13% 01/05/18 561,000
400,000 Mongolia Government International Bond (USD) ............... 5.13% 12/05/22 356,000
-------------
1,892,119
-------------
NEW ZEALAND - 5.9%
19,150,000 New Zealand Government Bond (NZD) .......................... 6.00% 12/15/17 16,432,162
-------------
NIGERIA - 2.5%
1,100,000,000 Nigeria Government Bond (NGN) .............................. 15.10% 04/27/17 7,023,066
-------------
PAKISTAN - 0.6%
1,670,000 Pakistan Government International Bond (USD) ............... 6.88% 06/01/17 1,569,800
-------------
PERU - 1.5%
10,100,000 Peru Government Bond (PEN) ................................. 7.84% 08/12/20 4,187,398
-------------
ROMANIA - 1.6%
3,910,000 Romanian Government International Bond (USD) ............... 6.75% 02/07/22 4,373,726
-------------
RUSSIA - 4.8%
173,000,000 Russian Federal Bond - OFZ (RUB) ........................... 7.50% 02/27/19 5,352,239
73,500,000 Russian Federal Bond - OFZ (RUB) ........................... 7.00% 01/25/23 2,165,504
185,000,000 Russian Foreign Bond - Eurobond (RUB) ...................... 7.85% 03/10/18 5,883,964
-------------
13,401,707
-------------
RWANDA - 0.2%
750,000 Rwanda International Government Bond (USD) (c) ............. 6.63% 05/02/23 654,375
-------------
SERBIA - 4.2%
1,720,000 Republic of Serbia (USD) ................................... 5.25% 11/21/17 1,685,600
3,150,000 Republic of Serbia (USD) ................................... 7.25% 09/28/21 3,256,312
1,250,000 Republic of Serbia (USD) (c) ............................... 7.25% 09/28/21 1,292,188
513,000,000 Serbia Treasury Bills (RSD) ................................ (e) 01/23/14 5,578,831
-------------
11,812,931
-------------
See Notes to Financial Statements Page 7
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
JUNE 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ------------------------------------------------------------ ------------ -------- --------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
SOUTH AFRICA - 5.1%
37,800,000 South Africa Government Bond (ZAR) ......................... 13.50% 09/15/15 $ 4,398,146
76,800,000 South Africa Government Bond (ZAR) ......................... 10.50% 12/21/26 9,432,406
5,100,000 South Africa Government Bond (ZAR) ......................... 7.00% 02/28/31 449,018
-------------
14,279,570
-------------
SOUTH KOREA - 0.9%
156,000,000 Export-Import Bank of Korea (INR) (c) ...................... 6.00% 02/27/14 2,613,345
-------------
TANZANIA - 0.9%
2,600,000 Tanzania Government International Bond (USD) (f) ........... 6.45% 03/08/20 2,613,000
-------------
TURKEY - 5.8%
16,100,000 Turkey Government Bond (TRY) ............................... 9.00% 01/27/16 8,577,151
6,600,000 Turkey Government Bond (TRY) ............................... 6.30% 02/14/18 3,203,808
3,460,000 Turkey Government Bond (TRY) ............................... 3.00% 02/23/22 1,984,307
2,100,000 Turkey Government International Bond (USD) ................. 6.25% 09/26/22 2,331,000
-------------
16,096,266
-------------
UNITED ARAB EMIRATES - 1.7%
4,200,000 Emirate of Dubai Government International Bonds (USD) ...... 7.75% 10/05/20 4,861,500
-------------
UNITED KINGDOM - 5.6%
1,200,000 United Kingdom Gilt (GBP) .................................. 8.00% 12/07/15 2,159,964
4,600,000 United Kingdom Gilt (GBP) .................................. 6.00% 12/07/28 9,603,631
2,170,000 United Kingdom Gilt (GBP) .................................. 4.25% 12/07/49 3,771,354
-------------
15,534,949
-------------
URUGUAY - 1.6%
81,209,390 Uruguay Government International Bond, Inflation Adjusted
Bond (UYU) (g) .......................................... 5.00% 09/14/18 4,495,803
-------------
VENEZUELA - 3.0%
9,380,000 Venezuela Government International Bond (USD) .............. 5.75% 02/26/16 8,418,550
-------------
VIETNAM - 0.3%
800,000 Vietnam Government International Bond (USD) ................ 6.88% 01/15/16 848,000
-------------
TOTAL FOREIGN SOVEREIGN BONDS AND NOTES .................... 275,503,123
(Cost $271,692,213) ........................................ -------------
FOREIGN CORPORATE BONDS AND NOTES (b) - 28.0%
BRAZIL - 1.8%
600,000 Banco do Estado do Rio Grande do Sul SA (USD) (c) .......... 7.38% 02/02/22 617,250
1,550,000 OAS Financial Ltd. (USD) (c) (f) ........................... 8.88% 12/31/49 1,503,500
460,000 OAS Investments Gmbh (USD) (c) ............................. 8.25% 10/19/19 454,250
550,000 Odebrecht Finance Ltd. (USD) ............................... 7.50% 09/14/15 547,250
750,000 U.S.J. Acucar e Alcool S.A. (USD) .......................... 9.88% 11/09/19 749,062
1,380,000 Virgolino de Oliveira Finance Ltd. (USD) ................... 10.50% 01/28/18 1,248,900
-------------
5,120,212
-------------
Page 8 See Notes to Financial Statements
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
JUNE 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ------------------------------------------------------------ ------------ -------- --------------
FOREIGN CORPORATE BONDS AND NOTES (b) (CONTINUED)
CHILE - 0.2%
120,000 Automotores Gildemeister S.A. (USD) ........................ 8.25% 05/24/21 $ 111,600
300,000 Saci Falabella (USD) (c) ................................... 3.75% 04/30/23 273,750
-------------
385,350
-------------
CHINA - 1.1%
1,250,000 China Overseas Finance Cayman II Ltd. (USD) ................ 5.50% 11/10/20 1,302,755
1,200,000 Country Garden Holdings Co., Ltd. (USD) .................... 11.13% 02/23/18 1,308,000
600,000 Yancoal International Resources Development Co. Ltd.
(USD) (c) ............................................... 5.73% 05/16/22 550,324
-------------
3,161,079
-------------
DOMINICAN REPUBLIC - 0.5%
1,350,000 AES Andres Dominicana/Itabo Dominicana (USD) ............... 9.50% 11/12/20 1,431,000
-------------
EL SALVADOR - 0.6%
1,550,000 Telemovil Finance Co., Ltd. (USD) .......................... 8.00% 10/01/17 1,646,875
-------------
GERMANY - 1.3%
3,650,000 KfW International Finance (CAD) ............................ 4.95% 10/14/14 3,627,511
-------------
GUATEMALA - 0.6%
1,550,000 Industrial Subordinated Trust (USD) ........................ 8.25% 07/27/21 1,669,164
-------------
INDIA - 0.4%
1,200,000 Bharti Airtel International Netherlands B.V. (USD) (c) ..... 5.13% 03/11/23 1,096,560
-------------
INDONESIA - 0.8%
700,000 Adaro Indonesia PT (USD) ................................... 7.63% 10/22/19 737,625
1,600,000 Pertamina Persero PT (USD) (c) ............................. 4.30% 05/20/23 1,502,000
-------------
2,239,625
-------------
KAZAKHSTAN - 1.3%
1,000,000 Kazakhstan Temir Zholy Finance B.V. (USD) (c) .............. 6.95% 07/10/42 1,018,800
1,090,000 KazMunayGas National Co., JSC (USD) (c) .................... 4.40% 04/30/23 1,013,700
1,500,000 Zhaikmunai L.P. (USD) (c) .................................. 7.13% 11/13/19 1,511,250
-------------
3,543,750
-------------
MEXICO - 1.5%
1,400,000 BBVA Bancomer S.A. (USD) (c) ............................... 6.75% 09/30/22 1,505,000
850,000 CEMEX Espana S.A. Luxembourg (USD) ......................... 9.88% 04/30/19 922,250
460,000 CEMEX Finance, LLC (USD) (c) ............................... 9.38% 10/12/22 503,700
1,350,000 Tenedora Nemak S.A. de C.V. (USD) (c) ...................... 5.50% 02/28/23 1,282,500
-------------
4,213,450
-------------
MULTINATIONAL - 7.8%
17,600,000 Asian Development Bank (AUD) ............................... 5.50% 02/15/16 17,023,045
284,000,000 European Bank For Reconstruction & Development (INR) ....... 5.25% 02/07/14 4,753,680
-------------
21,776,725
-------------
NIGERIA - 0.1%
200,000 Access Finance B.V. (USD) (c) .............................. 7.25% 07/25/17 197,205
-------------
RUSSIA - 7.2%
1,850,000 Alfa Bank OJSC Via Alfa Bond Issuance PLC (USD) ............ 7.88% 09/25/17 1,972,470
See Notes to Financial Statements Page 9
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
JUNE 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ------------------------------------------------------------ ------------ -------- --------------
FOREIGN CORPORATE BONDS AND NOTES (b) (CONTINUED)
RUSSIA (CONTINUED)
700,000 Alfa Bank OJSC Via Alfa Bond Issuance PLC (USD) ............ 7.75% 04/28/21 $ 724,500
1,400,000 EuroChem Mineral & Chemical Co. OJSC via EuroChem
GI Ltd. (USD) (c) ....................................... 5.13% 12/12/17 1,382,500
950,000 Evraz Group S.A. (USD) (c) ................................. 6.50% 04/22/20 857,375
470,000 Gazprom Neft OAO via GPN Capital S.A. (USD) (c) ............ 4.38% 09/19/22 432,800
600,000 Gazprom Oao Via Gaz Capital S.A. (USD) ..................... 6.51% 03/07/22 637,500
1,360,000 Metalloinvest Finance Ltd. (USD) (c) ....................... 5.63% 04/17/20 1,251,200
240,000 MTS International Funding Ltd. (USD) (c) ................... 5.00% 05/30/23 231,000
800,000 Russian Agricultural Bank OJSC Via RSHB Capital
S.A. (USD) .............................................. 7.75% 05/29/18 898,000
278,600,000 Russian Railways via RZD Capital PLC (RUB) ................. 8.30% 04/02/19 8,513,278
1,500,000 VimpelCom Holdings B.V. (USD) (c) .......................... 5.95% 02/13/23 1,401,525
1,700,000 VTB Bank OJSC via VTB Capital S.A. (USD) ................... 6.88% 05/29/18 1,806,250
-------------
20,108,398
-------------
TURKEY - 0.8%
750,000 Arcelik AS (USD) (c) ....................................... 5.00% 04/03/23 675,000
500,000 Turkiye Sise Ve Cam Fabrikalari AS (USD) (c) ............... 4.25% 05/09/20 457,500
1,100,000 Yasar Holdings S.A. via Willow No. 2 (USD) ................. 9.63% 10/07/15 1,126,400
-------------
2,258,900
-------------
UKRAINE - 2.0%
1,350,000 Ferrexpo Finance PLC (USD) ................................. 7.88% 04/07/16 1,252,624
1,500,000 Metinvest B.V. (USD) ....................................... 10.25% 05/20/15 1,522,500
485,000 MHP S.A. (USD) ............................................. 10.25% 04/29/15 504,405
1,350,000 MHP S.A. (USD) (c) ......................................... 8.25% 04/02/20 1,201,500
1,330,000 Mriya Agro Holding PLC (USD) (c) ........................... 9.45% 04/19/18 1,187,025
-------------
5,668,054
-------------
TOTAL FOREIGN CORPORATE BONDS AND NOTES ............................................. 78,143,858
(Cost $75,616,651) -------------
SHARES DESCRIPTION VALUE
--------------- ------------------------------------------------------------------------------------- --------------
COMMON STOCKS - 0.0%
KAZAKHSTAN - 0.0%
342 BTA Bank JSC (h) .................................................................... 1
-------------
TOTAL COMMON STOCKS ................................................................. 1
(Cost $0) -------------
TOTAL INVESTMENTS - 126.9% .......................................................... 353,646,982
(Cost $347,308,864) (i)
OUTSTANDING LOANS - (35.3%) ......................................................... (98,267,982)
NET OTHER ASSETS AND LIABILITIES - 8.4% ............................................. 23,298,504
-------------
NET ASSETS - 100.0% ................................................................. $ 278,677,504
=============
Page 10 See Notes to Financial Statements
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2013 (UNAUDITED)
(a) All of the securities within the Portfolio of Investments, except for the
BTA Bank JSC common stock, are available to serve as collateral for the
outstanding loans.
(b) Portfolio securities are included in a country based upon their underlying
credit exposure as determined by Aberdeen Asset Management Inc., the
Fund's investment sub-advisor.
(c) This security, sold within the terms of a private placement memorandum, is
exempt from registration upon resale under Rule 144A of the Securities Act
of 1933, as amended, 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 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 June 30, 2013,
securities noted as such amounted to $31,222,522 or 11.20% of net assets.
(d) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date. The interest rate shown reflects the rate in effect at
June 30, 2013.
(e) Zero coupon bond.
(f) Floating rate security. The interest rate shown reflects the rate in
effect at June 30, 2013.
(g) Security whose principal value is adjusted in accordance with changes to
the country's Consumer Price Index. Interest is calculated on the basis of
the current adjusted principal value.
(h) Non-income producing security.
(i) Aggregate cost for financial reporting purposes, which approximates the
aggregate cost for federal income tax purposes. As of June 30, 2013, the
aggregate gross unrealized appreciation for all securities in which there
was an excess of value over tax cost was $22,869,915 and the aggregate
gross unrealized depreciation for all securities in which there was an
excess of tax cost over value was $16,531,797.
Currency Abbreviations:
AUD Australian Dollar
BRL Brazilian Real
CAD Canadian Dollar
COP Columbian Peso
EUR Euro
GBP British Pound Sterling
HUF Hungarian Forint
IDR Indonesian Rupiah
INR Indian Rupee
KZT Kazakhstan Tenge
MXN Mexican Peso
MYR Malaysian Ringgit
NGN Nigerian Naira
NZD New Zealand Dollar
PEN Peruvian New Sol
RSD Serbian Dinar
RUB Russian Ruble
TRY Turkish Lira
USD United States Dollar
UYU Uruguayan Peso
ZAR South African Rand
See Notes to Financial Statements Page 11
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2013 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30,
2013, is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
INVESTMENTS 6/30/2013 PRICES INPUTS INPUTS
------------------------------------------------- ------------ ------------ ------------ ------------
Foreign Sovereign Bonds and Notes*............... $275,503,123 $ -- $275,503,123 $ --
Foreign Corporate Bonds and Notes*............... 78,143,858 -- 78,143,858 --
Common Stocks*................................... 1 -- 1 --
Total Investments................................ 353,646,982 -- 353,646,982 --
Forward Foreign Currency Contracts**............. 6,074,029 -- 6,074,029 --
------------ ------------ ------------ ------------
Total............................................ $359,721,011 $ -- $359,721,011 $ --
============ ============ ============ ============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
6/30/2012 PRICES INPUTS INPUTS
------------ ------------ ------------ ------------
Forward Foreign Currency Contracts**............. $ (591,857) $ -- $ (591,857) $ --
============ ============ ============ ============
* See the Portfolio of Investments for country breakout.
** See the Schedule of Forward Foreign Currency Contracts for contract and
currency detail.
All transfers in and out of the Levels during the period are assumed to be
transferred on the last day of the period at their current value. There were no
transfers between Levels at June 30, 2013.
--------------------------------------------------------
CURRENCY EXPOSURE % OF TOTAL
DIVERSIFICATION INVESTMENTS#
--------------------------------------------------------
USD 56.9%
AUD 13.1
EUR 4.2
ZAR 4.0
BRL 3.6
MXN 3.3
TRY 3.2
INR 2.1
NGN 2.0
RUB 1.8
RSD 1.6
HUF 1.3
MYR 1.3
UYU 1.3
PEN 1.2
GBP 0.4
CAD (0.1)
NZD (1.2)
COP 0.0 ##
IDR 0.0 ##
IND 0.0 ##
KZT 0.0 ##
--------------------------------------------------------
Total 100.0%
======
# The weightings include the impact of currency forwards.
## Amount is less than 0.1%.
Page 12 See Notes to Financial Statements
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
JUNE 30, 2013 (UNAUDITED)
FORWARD FOREIGN CURRENCY CONTRACTS
------------------------------------------------------------
PURCHASE SALE UNREALIZED
SETTLEMENT AMOUNT AMOUNT VALUE AS OF VALUE AS OF APPRECIATION
DATE COUNTERPARTY PURCHASED (a) SOLD (a) 6/30/2013 6/30/2013 (DEPRECIATION)
---------- ------------ ------------------- ------------------- ------------- ------------- --------------
07/19/13 DB CAD 1,891,000 USD 1,858,946 $ 1,797,115 $ 1,858,946 $ (61,831)
07/19/13 RBS HUF 505,000,000 USD 2,221,958 2,223,717 2,221,958 1,759
09/05/13 JPM IDR 2,995,119,000 USD 289,160 299,128 289,160 9,968
09/05/13 RBS IDR 3,651,375,000 USD 358,087 364,669 358,087 6,582
09/05/13 JPM IND 159,217,000 USD 2,651,319 2,646,526 2,651,319 (4,793)
07/19/13 UBS NZD 18,000,000 USD 14,304,546 13,927,545 14,304,546 (377,001)
07/19/13 RBS TRY 3,277,000 USD 1,809,134 1,693,418 1,809,134 (115,716)
09/05/13 JPM USD 5,406,921 BRL 11,374,000 5,406,921 5,024,596 382,325
07/19/13 UBS USD 13,026,645 CAD 13,391,000 13,026,645 12,726,162 300,483
09/05/13 JPM USD 291,105 COP 566,200,000 291,105 291,105 --
07/19/13 CS USD 14,052,275 GBP 9,224,000 14,052,275 14,027,238 25,037
07/19/13 RBS USD 7,530,759 HUF 1,711,960,000 7,530,759 7,538,445 (7,686)
09/05/13 JPM USD 7,269,307 IDR 72,787,575,000 7,269,307 7,269,416 (109)
09/05/13 RBS USD 2,621,805 IND 159,217,000 2,621,805 2,646,526 (24,721)
07/19/13 RBS USD 1,087,338 MXN 13,813,000 1,087,338 1,063,973 23,365
07/19/13 GS USD 28,037,639 NZD 33,323,000 28,037,639 25,783,754 2,253,885
07/19/13 MS USD 28,041,388 NZD 33,323,000 28,041,388 25,783,755 2,257,633
07/19/13 JPM USD 1,704,451 RUB 53,875,140 1,704,451 1,633,415 71,036
09/05/13 JPM USD 13,902,842 RUB 445,169,000 13,902,842 13,378,784 524,058
07/19/13 JPM USD 1,812,393 TRY 3,277,000 1,812,393 1,693,418 118,975
07/19/13 RBS USD 2,465,677 TRY 4,580,000 2,465,677 2,366,754 98,923
-----------
Net Unrealized Appreciation (Depreciation)............................................................. $ 5,482,172
===========
(a) Please see Portfolio of Investments for currency descriptions.
Counterparty Abbreviations:
CS Credit Suisse
DB Deutsche Bank AG
GS Goldman Sachs
JPM JPMorgan Chase
MS Morgan Stanley
RBS Royal Bank of Scotland
UBS UBS AG
See Notes to Financial Statements Page 13
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2013 (UNAUDITED)
ASSETS:
Investments, at value
(Cost $347,308,864)......................................................................... $353,646,982
Cash........................................................................................... 6,986,428
Foreign currency (Cost $1,705,564)............................................................. 1,675,357
Unrealized appreciation on forward foreign currency contracts.................................. 6,074,029
Receivables:
Interest.................................................................................. 6,436,972
Investment securities sold................................................................ 4,403,763
Prepaid expenses............................................................................... 18,221
------------
Total Assets................................................................................ 379,241,752
------------
LIABILITIES:
Outstanding loans.............................................................................. 98,267,982
Unrealized depreciation on forward foreign currency contracts.................................. 591,857
Payables:
Investment securities purchased........................................................... 948,368
Investment advisory fees.................................................................. 316,777
Custodian fees............................................................................ 267,819
Audit and tax fees........................................................................ 34,756
Interest and fees on loans................................................................ 32,427
Deferred Indonesian capital gains tax..................................................... 32,163
Administrative fees....................................................................... 31,260
Legal fees................................................................................ 22,432
Transfer agent fees....................................................................... 8,989
Printing fees............................................................................. 5,838
Trustees' fees and expenses............................................................... 1,571
Financial reporting fees.................................................................. 771
Other liabilities.............................................................................. 1,238
------------
Total Liabilities........................................................................... 100,564,248
------------
NET ASSETS..................................................................................... $278,677,504
============
Paid-in capital................................................................................ $286,760,015
Par value...................................................................................... 174,102
Accumulated net investment income (loss)....................................................... (23,466,940)
Accumulated net realized gain (loss) on investments, forward foreign currency contracts and
foreign currency transactions................................................................ 2,102,335
Net unrealized appreciation (depreciation) on investments, forward foreign currency contracts
and foreign currency translation............................................................. 13,107,992
------------
NET ASSETS..................................................................................... $278,677,504
============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share)........................... $ 16.01
============
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized).... 17,410,203
============
Page 14 See Notes to Financial Statements
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2013 (UNAUDITED)
INVESTMENT INCOME:
Interest (net of foreign withholding tax of $47,081)........................................... $ 12,617,321
Other.......................................................................................... 154,813
------------
Total investment income..................................................................... 12,772,134
------------
EXPENSES:
Investment advisory fees....................................................................... 2,021,913
Interest and fees on outstanding loans......................................................... 546,844
Administrative fees............................................................................ 180,927
Custodian fees................................................................................. 176,150
Printing fees.................................................................................. 43,047
Legal fees..................................................................................... 33,710
Audit and tax fees............................................................................. 29,556
Transfer agent fees............................................................................ 20,692
Trustees' fees and expenses.................................................................... 14,759
Financial reporting fees....................................................................... 4,625
Other.......................................................................................... 18,641
------------
Total expenses.............................................................................. 3,090,864
------------
NET INVESTMENT INCOME (LOSS)................................................................... 9,681,270
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................................................. 4,932,166
Forward foreign currency contracts.......................................................... (473,474)
Foreign currency transactions............................................................... 1,887,215
------------
Net realized gain (loss)....................................................................... 6,345,907
------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................................................. (49,055,303)
Forward foreign currency contracts.......................................................... 5,557,824
Foreign currency translation................................................................ (141,099)
Net change in deferred Indonesian capital gains tax............................................ 122,364
------------
Net change in unrealized appreciation (depreciation)........................................... (43,516,214)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)........................................................ (37,170,307)
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................ $(27,489,037)
============
See Notes to Financial Statements Page 15
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
6/30/2013 ENDED
(UNAUDITED) 12/31/2012
-------------- -------------
OPERATIONS:
Net investment income (loss)....................................................... $ 9,681,270 $ 20,639,605
Net realized gain (loss)........................................................... 6,345,907 2,392,118
Net change in unrealized appreciation (depreciation)............................... (43,516,214) 28,879,119
-------------- -------------
Net increase (decrease) in net assets resulting from operations.................... (27,489,037) 51,910,842
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.............................................................. (13,575,565) (22,937,807)
Return of capital.................................................................. -- (4,194,342)
-------------- -------------
Total distributions to shareholders................................................ (13,575,565) (27,132,149)
-------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from Common Shares reinvested............................................. 171,859 271,141
-------------- -------------
Net increase (decrease) in net assets resulting from capital transactions.......... 171,859 271,141
-------------- -------------
Total increase (decrease) in net assets............................................ (40,892,743) 25,049,834
NET ASSETS:
Beginning of period................................................................ 319,570,247 294,520,413
-------------- -------------
End of period...................................................................... $ 278,677,504 $ 319,570,247
============== =============
Accumulated net investment income (loss) at end of period.......................... $ (23,466,940) $( 19,572,645)
============== =============
CAPITAL TRANSACTIONS WERE AS FOLLOWS:
Common Shares at beginning of period............................................... 17,400,622 17,385,109
Common Shares issued as reinvestment under the Dividend Reinvestment Plan.......... 9,581 15,513
-------------- -------------
Common Shares at end of period..................................................... 17,410,203 17,400,622
============== =============
Page 16 See Notes to Financial Statements
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013 (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations................. $ (27,489,037)
Adjustments to reconcile net increase (decrease) in net assets resulting from
operations to net cash provided by operating activities:
Purchases of investments.................................................. (135,765,709)
Sales, maturities and paydowns of investments............................. 141,176,299
Net amortization/accretion of premiums/discounts on investments........... (117,020)
Net realized gain/loss on investments..................................... (4,932,166)
Net realized gain/loss on foreign currency transactions (a)............... (2,126,512)
Net change in unrealized appreciation/depreciation on forward foreign
currency contracts.................................................. (5,557,824)
Net change in unrealized appreciation/depreciation on investments......... 49,055,303
CHANGES IN ASSETS AND LIABILITIES:
Increase in interest receivable........................................... (100,864)
Increase in prepaid expenses.............................................. (6,906)
Decrease in interest and fees on loan payable............................. (12,169)
Decrease in investment advisory fees payable.............................. (35,381)
Decrease in audit and tax fees payable.................................... (23,444)
Increase in legal fees payable............................................ 14,871
Decrease in printing fees payable......................................... (17,597)
Increase in administrative fees payable................................... 2,293
Increase in custodian fees payable........................................ 176,150
Increase in transfer agent fees payable................................... 3,222
Increase in Trustees' fees and expenses payable........................... 1,571
Decrease in deferred Indonesian capital gains tax......................... (122,364)
Decrease in other liabilities............................................. (9,210)
--------------
CASH PROVIDED BY OPERATING ACTIVITIES........................................... $ 14,113,506
--------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of Common Shares reinvested...................................... 171,859
Distributions to Common Shareholders from net investment income........... (13,575,565)
--------------
CASH USED IN FINANCING ACTIVITIES............................................... (13,403,706)
Effect of exchange rate changes on Euro Loan (b)................................ (172,620)
--------------
Increase in cash and foreign currency (c)....................................... 537,180
Cash at beginning of period..................................................... 8,124,605
--------------
Cash and foreign currency at end of period...................................... $ 8,661,785
==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest and fees............................... $ 559,013
==============
-----------------------
(a) This amount is a component of net realized gain (loss) on foreign currency
transactions as shown on the Statement of Operations.
(b) This amount is a component of net change in unrealized appreciation
(depreciation) on foreign currency translation as shown on the Statement
of Operations.
(c) Includes net change in unrealized appreciation (depreciation) on foreign
currency of $(40,998).
See Notes to Financial Statements Page 17
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
6/30/2013 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of period ... $ 18.37 $ 16.94 $ 17.80 $ 16.58 $ 12.69 $ 18.54
--------- -------- --------- -------- --------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ........... 0.56 1.18 1.22 1.28 1.47 1.46
Net realized and unrealized gain (loss) (2.14) 1.81 (0.52) 1.50 3.98 (5.75)
--------- -------- --------- -------- --------- --------
Total from investment operations ....... (1.58) 2.99 0.70 2.78 5.45 (4.29)
--------- -------- --------- -------- --------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income .................. (0.78) (1.32) (1.55) (1.56) (0.68) (1.56)
Return of capital ...................... -- (0.24) (0.01) -- (0.88) --
--------- -------- --------- -------- --------- --------
Total from distributions ............... (0.78) (1.56) (1.56) (1.56) (1.56) (1.56)
--------- -------- --------- -------- --------- --------
Net asset value, end of period ......... $ 16.01 $ 18.37 $ 16.94 $ 17.80 $ 16.58 $ 12.69
========= ======== ========= ======== ========= ========
Market value, end of period ............ $ 15.43 $ 17.85 $ 15.76 $ 17.36 $ 16.03 $ 10.40
========= ======== ========= ======== ========= ========
TOTAL RETURN BASED ON NET ASSET VALUE (a) (8.85)% 18.51% 4.37% 17.90% 47.48% (23.14)%
========= ======== ========= ======== ========= ========
TOTAL RETURN BASED ON MARKET VALUE (a).. (9.64)% 23.85% (0.44)% 18.93% 73.98% (29.39)%
========= ======== ========= ======== ========= ========
-----------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ... $ 278,678 $319,570 $ 294,520 $309,342 $ 287,961 $220,286
Ratio of total expenses to average net
assets .............................. 2.01% (b) 2.09% 2.02% 2.13% 2.57% 3.55%
Ratio of total expenses to average net
assets excluding interest expense ... 1.66% (b) 1.71% 1.63% 1.65% 1.77% 1.83%
Ratio of net investment income (loss) to
average net assets .................. 6.31% (b) 6.72% 6.94% 7.41% 9.90% 8.72%
Portfolio turnover rate ................ 35% 56% 52% 101% 72% 66%
INDEBTEDNESS:
Total loans outstanding (in 000's) ..... $ 98,268 $ 98,441 $ 98,198 $ 88,595 $ 89,511 $ 89,101
Asset coverage per $1,000 of
indebtedness (c)..................... $ 3,836 $ 4,246 $ 3,999 $ 4,492 $ 4,217 $ 3,472
-----------------------
(a) 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 ("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 less than one year. Past performance is not indicative of future
results.
(b) Annualized.
(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 loan balance in 000's.
Page 18 See Notes to Financial Statements
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
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 following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of 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 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 in accordance with valuation procedures
adopted by the Fund's Board of Trustees and in accordance with provisions of the
1940 Act. The Fund's securities will be valued as follows:
Bond, notes and other debt securities are valued on the basis of
valuations provided by dealers who make markets in such securities or by
an independent 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.
Common stocks and other equity securities listed on any national or
foreign exchange (excluding the NASDAQ(R) Stock Market LLC ("NASDAQ") and
the London Stock Exchange Alternative Investment Market ("AIM")) are
valued at the last sale price on the exchange on which they are
principally traded or, for NASDAQ and AIM securities, the official closing
price. Securities traded on more than one securities exchange are valued
at the last sale price or official closing price, as applicable, at the
close of the securities exchange representing the principal market for
such securities.
Securities traded in an over-the counter market are valued at their
closing bid prices.
Forward foreign currency contracts are 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 an independent pricing service.
Debt securities having a remaining maturity of sixty days or less when
purchased are valued at cost adjusted for amortization of premiums and
accretion of discounts.
In the event that market quotations are not readily available, the pricing
service does not provide a valuation for a particular asset, or the valuations
are deemed unreliable, the Fund's Board of Trustees has designated First Trust
Advisors L.P. ("First Trust" or the "Advisor") to use a fair value method to
value the Fund's securities and other investments. Additionally, if events occur
after the close of the principal market for particular securities (e.g.,
domestic debt and foreign securities), but before the Fund values its assets,
that could materially affect NAV, First Trust may use a fair value method to
value the Fund's securities and other investments. The use of fair value pricing
by the Fund is governed by valuation procedures adopted by the Fund's Board of
Trustees, and in accordance with the provisions of the 1940 Act. As a general
principle, the fair value of a security is the amount which the Fund might
reasonably expect to receive for the security upon its current sale. In light of
Page 19
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
the judgment involved in fair valuations, there can be no assurance that a fair
value assigned to a particular security will be the amount which the Fund might
be able to receive upon its current sale. Fair valuation of a security will be
based on the consideration of all available information, 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 the Sub-Advisor's 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:
o 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.
o 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, th 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.
o 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 methodology 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 June 30, 2013, is
included with the Fund's Portfolio of Investments.
B. Securities Transactions and Investment Income:
Securities 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 daily on the accrual basis. Amortization of premiums
and accretion of discounts are recorded by using the effective interest method.
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 so 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 June 30, 2013, the Fund had no when-issued, delayed-delivery
or forward purchase commitments.
C. 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 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 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
(depreciation) on forward foreign currency contracts" on the Statement of Assets
and Liabilities. 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
Page 20
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
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 Schedule of Forward Foreign Currency Contracts.
During the six months ended June 30, 2013, the open and close notional values of
forward foreign currency contracts were $520,499,326 and $490,066,289,
respectively.
D. Offsetting on the Statement of Assets and Liabilities:
In December 2011, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update No. 2011-11 "Disclosures about Offsetting Assets and
Liabilities" ("ASU 2011-11"). This disclosure requirement is intended to help
investors and other financial statement users better assess the effect or
potential effect of offsetting arrangements on a fund's financial position. ASU
2011-11 requires entities to disclose both gross and net information about both
instruments and transactions eligible for offset on the Statement of Assets and
Liabilities, and disclose instruments and transactions subject to master netting
or similar agreements. In addition, in January 2013, FASB issued Accounting
Standards Update No. 2013-1 "Clarifying the Scope of Offsetting Assets and
Liabilities" ("ASU 2013-1"), specifying exactly which transactions are subject
to offsetting disclosures. The scope of the disclosure requirements is limited
to derivative instruments, repurchase agreements and reverse repurchase
agreements, and securities borrowing and securities lending transactions. ASU
2011-11 and ASU 2013-1 are effective for financial statements with fiscal years
beginning on or after January 1, 2013, and interim periods within those fiscal
years.
The Fund adopted the disclosure requirement on netting for the current reporting
period. For financial reporting purposes, the Fund does not offset financial
assets and financial liabilities that are subject to master netting arrangements
or similar agreements on the Statement of Assets and Liabilities.
At June 30, 2013, derivative assets and liabilities (by type) on a gross basis
are as follows:
Gross Amounts Net Amounts of Assets
Offset in the Presented in the Collateral
Gross Amounts of Statement of Assets Statement of Assets Financial Amounts
Recognized Assets and Liabilities and Liabilities Instruments Received Net Amount
----------------- ------------------- --------------------- ----------- ---------- -----------
Forward Currency Contracts* $ 6,074,029 $ -- $ 6,074,029 $ -- $ -- $ 6,074,029
Net Amounts of
Gross Amounts Liabilities
Gross Amounts of Offset in the Presented in the Collateral
Recognized Statement of Assets Statement of Assets Financial Amounts
Liabilities and Liabilities and Liabilities Instruments Pledged Net Amount
----------------- ------------------- --------------------- ----------- ---------- -----------
Forward Currency Contracts* $ (591,857) $ -- $ (591,857) $ -- $ -- $ (591,857)
* The respective counterparties for each contract are disclosed in the Schedule
of Forward Foreign Currency Contracts.
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. The portion of foreign
currency gains and losses related to fluctuation in exchange rates between the
initial purchase trade date and subsequent sale trade date is included in "Net
realized gain (loss) on foreign currency transactions" 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 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 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 point in the future.
Page 21
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
The tax character of distributions paid during the fiscal year ended December
31, 2012, was as follows:
Distributions paid from:
Ordinary income................................. $ 22,937,807
Capital gain.................................... --
Return of capital............................... 4,194,342
As of December 31, 2012, the 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............ (3,048,251)
Net unrealized appreciation (depreciation)...... 36,256,079
---------------
Total accumulated earnings (losses)............. 33,207,828
Other........................................... (399,839)
Paid-in capital................................. 286,762,258
---------------
Net assets...................................... $ 319,570,247
===============
G. Income and Other Taxes:
The Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), which includes distributing substantially all
of its net investment income and net realized gains to shareholders.
Accordingly, no provision has been made for federal or state income taxes.
However, due to the timing and amount of distributions, the Fund may be subject
to an excise tax of 4% of the amount by which approximately 98% of the Fund's
taxable income exceeds the distributions from such taxable income for the
calendar year.
Certain countries assess a capital gains tax on securities sold in their local
markets. This tax is accrued as the securities in these foreign markets
appreciate in value and is paid at the time of sale to the extent a capital gain
is realized. Taxes accrued on securities in an unrealized appreciation position
are included in "Net change in unrealized appreciation (depreciation)" on the
Statement of Operations. The capital gains tax paid on securities sold is
included in "Other" expenses on the Statement of Operations.
Under the Regulated Investment Company Modernization Act of 2010 (the "Act"),
net capital losses arising in tax years after December 22, 2010, may be carried
forward indefinitely, and their character is retained as short-term and/or
long-term losses. Previously, net capital losses were carried forward for eight
years and treated as short-term losses. As a transition rule, the Act requires
that post-enactment net capital losses be used before pre-enactment net capital
losses. At December 31, 2012, the Fund had capital loss carryforwards for
federal income tax purposes of $2,142,594 expiring on December 31, 2017.
The Fund is subject to certain limitations under the U.S. tax rules on the use
of capital loss carryforwards and net unrealized built-in losses. These
limitations apply when there has been a 50% change in ownership.
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal year ended December 31, 2012, the Fund
intends to elect to defer net realized ordinary losses of $905,657.
The Fund is subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. Taxable years ended 2009, 2010,
2011 and 2012 remain open to federal and state audit. As of June 30, 2013,
management has evaluated the application of these standards to the Fund and has
determined that no provision for income tax is required in the Fund's financial
statements for uncertain tax positions.
H. Expenses:
The Fund will pay all expenses directly related to its operations.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Fund, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. 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. For these
services, First Trust is entitled to a monthly fee calculated at an annual rate
of 1.00% of the Fund's Managed Assets. First Trust also provides fund reporting
services to the Fund for a flat annual fee in the amount of $9,250.
Aberdeen Asset Management Inc. ("Aberdeen" or the "Sub-Advisor") serves as the
Fund's sub-advisor and manages the Fund's portfolio subject to First Trust's
supervision. The Sub-Advisor receives a monthly portfolio management fee
calculated at an annual rate of 0.50% of the Fund's Managed Assets that is paid
by First Trust out of its investment advisory fee.
Page 22
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
BNY Mellon Investment Servicing (US) Inc. ("BNYM IS") serves as the Fund's
Administrator, Fund Accountant and Transfer Agent in accordance with certain fee
arrangements. As administrator and fund accountant, BNYM IS is responsible for
providing certain administrative and accounting services to the Fund, including
maintaining the Fund's books of account, records of the Fund's securities
transactions, and certain other books and records. As transfer agent, BNYM IS is
responsible for maintaining shareholder records for the Fund. The Bank of New
York Mellon ("BNYM") serves as the Fund's Custodian in accordance with certain
fee arrangements. As custodian, BNYM is responsible for custody of the Fund's
assets.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer of $125,000 and an annual per fund fee of $4,000 for each closed-end
fund or other actively managed fund and $1,000 for each index fund in the First
Trust Fund Complex. The fixed annual retainer is allocated pro rata among each
fund in the First Trust Fund Complex based on net assets.
Additionally, the Lead Independent Trustee is paid $15,000 annually, the
Chairman of the Audit Committee is paid $10,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
is paid $5,000 annually to serve in such capacities, with such compensation
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and each Committee
Chairman will serve two-year terms until December 31, 2013, before rotating to
serve as Chairman of another Committee or as Lead Independent Trustee. After
December 31, 2013, the Lead Independent Trustee and Committee Chairmen will
rotate every three years. The officers and "Interested" Trustee receive no
compensation from the funds for serving in such capacities.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, other than U.S.
government obligations and short-term obligations, for the six months ended June
30, 2013, were $136,714,077 and $143,697,120, respectively.
5. BORROWINGS
The Fund has entered into a credit agreement with The Bank of Nova Scotia, which
provides for a revolving credit facility to be used as leverage for the Fund.
The revolving credit facility provides for a secured line of credit for the Fund
where Fund assets are pledged against advances made to the Fund. Under the
requirements of the 1940 Act, the Fund, immediately after any such borrowings,
must have an "asset coverage" of at least 300% (33-1/3% of the Fund's total
assets after borrowings). The total commitment under the facility is up to
$120,000,000. As of June 30, 2013, the Fund had three loans outstanding under
the revolving credit facility totaling $98,267,982. The three loans, which are
all LIBOR loans, bear interest based on the adjusted LIBOR rate and are in the
amounts of $60,000,000, $26,000,000 and $12,267,982 (the U.S. Dollar equivalent
of a 9,425,000 euro loan). For the six months ended June 30, 2013, the average
amount outstanding was $98,375,399. The high and low annual interest rates
during the six months ended June 30, 2013 were 1.11% and 0.95%, respectively,
and the weighted average interest rate was 1.08%. The weighted average interest
rate at June 30, 2013 was 1.08%. The revolving credit facility was scheduled to
expire on January 2, 2013, but was extended through December 31, 2013. The Fund
pays a commitment fee of 0.10% on any day that the loan balances exceed 50% of
the total commitment and 0.15% at all other times, which is included in
"Interest and fees on outstanding loans" on the Statement of Operations. Prior
to January 2, 2013, the Fund paid a commitment fee of 0.15% on any day that the
loan balances exceeded 50% of the total commitment and 0.30% at all other times.
6. INDEMNIFICATION
The Fund has a variety of indemnification obligations under contracts with its
service providers. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
7. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events to the Fund through
the date the financial statements were issued, and has determined that there
were the following subsequent events:
On July 22, 2013, the Fund declared a dividend of $0.13 per share to Common
Shareholders of record on August 5, 2013, payable August 15, 2013.
On August 20, 2013, the Fund declared a dividend of $0.13 per share to Common
Shareholders of record on September 5, 2013, payable September 16, 2013.
Page 23
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ADDITIONAL INFORMATION
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
DIVIDEND REINVESTMENT PLAN
If your Common Shares are registered directly with the Fund or if you hold your
Common Shares with a brokerage firm that participates in the Fund's Dividend
Reinvestment Plan (the "Plan"), unless you elect, by written notice to the Fund,
to receive cash distributions, all dividends, including any capital gain
distributions, on your Common Shares will be automatically reinvested by BNY
Mellon Investment Servicing (US) Inc. (the "Plan Agent"), in additional Common
Shares under the Plan. If you elect to receive cash distributions, you will
receive all distributions in cash paid by check mailed directly to you by the
Plan Agent, as the dividend paying agent.
If you decide to participate in the Plan, the number of Common Shares you will
receive will be determined as follows:
(1) If Common Shares are trading at or above net asset value ("NAV") at
the time of valuation, the Fund will issue new shares at a price equal to the
greater of (i) NAV per Common Share on that date or (ii) 95% of the market price
on that date.
(2) If Common Shares are trading below NAV at the time of valuation, the
Plan Agent will receive the dividend or distribution in cash and will purchase
Common Shares in the open market, on the NYSE or elsewhere, for the
participants' accounts. It is possible that the market price for the Common
Shares may increase before the Plan Agent has completed its purchases.
Therefore, the average purchase price per share paid by the Plan Agent may
exceed the market price at the time of valuation, resulting in the purchase of
fewer shares than if the dividend or distribution had been paid in Common Shares
issued by the Fund. The Plan Agent will use all dividends and distributions
received in cash to purchase Common Shares in the open market within 30 days of
the valuation date except where temporary curtailment or suspension of purchases
is necessary to comply with federal securities laws. Interest will not be paid
on any uninvested cash payments.
You may elect to opt-out of or withdraw from the Plan at any time by giving
written notice to the Plan Agent, or by telephone at (866) 340-1104, in
accordance with such reasonable requirements as the Plan Agent and the Fund may
agree upon. If you withdraw or the Plan is terminated, you will receive a
certificate for each whole share in your account under the Plan, and you will
receive a cash payment for any fraction of a share in your account. If you wish,
the Plan Agent will sell your shares and send you the proceeds, minus brokerage
commissions.
The Plan Agent maintains all Common Shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
you may need for tax records. Common Shares in your account will be held by the
Plan Agent in non-certificated form. The Plan Agent will forward to each
participant any proxy solicitation material and will vote any shares so held
only in accordance with proxies returned to the Fund. Any proxy you receive will
include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions
in Common Shares. However, all participants will pay a pro rata share of
brokerage commissions incurred by the Plan Agent when it makes open market
purchases.
Automatically reinvesting dividends and distributions does not mean that you do
not have to pay income taxes due upon receiving dividends and distributions.
Capital gains and income are realized although cash is not received by you.
Consult your financial advisor for more information.
If you hold your Common Shares with a brokerage firm that does not participate
in the Plan, you will not be able to participate in the Plan and any dividend
reinvestment may be effected on different terms than those described above.
The Fund reserves the right to amend or terminate the Plan if in the judgment of
the Board of Trustees the change is warranted. There is no direct service charge
to participants in the Plan; however, the Fund reserves the right to amend the
Plan to include a service charge payable by the participants. Additional
information about the Plan may be obtained by writing BNY Mellon Investment
Servicing (US) Inc., 301 Bellevue Parkway, Wilmington, Delaware 19809.
--------------------------------------------------------------------------------
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Fund uses to determine how
to vote proxies and information on how the Fund voted proxies relating to
portfolio investments during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
the Fund's website located at http://www.ftportfolios.com; and (3) on the
Securities and Exchange Commission's ("SEC") website located at
http://www.sec.gov.
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available (1) by calling (800) 988-5891; (2) on the Fund's website located
at http://www.ftportfolios.com; (3) on the SEC's website at http://www.sec.gov;
and (4) for review and copying at the SEC's Public Reference Room ("PRR") in
Washington, DC. Information regarding the operation of the PRR may be obtained
by calling (800) SEC-0330.
Page 24
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Joint Annual Meeting of Shareholders of the Common Shares of First Trust
Energy Income and Growth Fund, First Trust Enhanced Equity Income Fund, First
Trust/Aberdeen Global Opportunity Income Fund, First Trust Mortgage Income Fund,
First Trust Strategic High Income Fund II, First Trust/Aberdeen Emerging
Opportunity Fund, First Trust Specialty Finance and Financial Opportunities
Fund, First Trust Dividend and Income Fund (formerly known as First Trust Active
Dividend Income Fund), First Trust Energy Infrastructure Fund, Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund and First Trust
High Income Long/Short Fund was held on April 17, 2013 (the "Annual Meeting").
At the Annual Meeting, James A. Bowen and Niel B. Nielson were elected by the
Common Shareholders of the First Trust/Aberdeen Global Opportunity Income Fund
as Class III Trustees for a three year term expiring at the Fund's annual
meeting of shareholders in 2016. The number of votes cast in favor of Mr. Bowen
was 14,629,472, the number of votes against was 514,315 and the number of
abstentions was 2,256,835. The number of votes cast in favor of Mr. Nielson was
14,781,078, the number of votes against was 362,709 and the number of
abstentions was 2,256,835. Richard E. Erickson, Thomas R. Kadlec and Robert F.
Keith are the other current and continuing Trustees.
ADVISORY AND SUB-ADVISORY AGREEMENTS
Board Considerations Regarding Continuation of Investment Management and
Sub-Advisory Agreements
The Board of Trustees of First Trust/Aberdeen Global Opportunity Income Fund
(the "Fund"), including the Independent Trustees, approved the continuation of
the Investment Management Agreement (the "Advisory Agreement") between the Fund
and First Trust Advisors L.P. (the "Advisor") and the Investment Sub-Advisory
Agreement (the "Sub-Advisory Agreement" and together with the Advisory
Agreement, the "Agreements") among the Fund, the Advisor and Aberdeen Asset
Management Inc. (the "Sub-Advisor"), at a meeting held on June 9-10, 2013. The
Board determined that the continuation of the Agreements is in the best
interests of the Fund in light of the extent and quality of the services
provided and such other matters as the Board considered to be relevant in the
exercise of its reasonable business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements, the
Independent Trustees received a separate report from each of the Advisor and the
Sub-Advisor in advance of the Board meeting responding to a request for
information from counsel to the Independent Trustees. The reports, among other
things, outlined the services provided by the Advisor and the Sub-Advisor
(including the relevant personnel responsible for these services and their
experience); the advisory and sub-advisory fees for the Fund as compared to fees
charged to other clients of the Advisor and the Sub-Advisor and as compared to
fees charged by investment advisors and sub-advisors to comparable funds;
expenses of the Fund as compared to expense ratios of comparable funds; the
nature of expenses incurred in providing services to the Fund and the potential
for economies of scale, if any; financial data on the Advisor and the
Sub-Advisor; any fall out benefits to the Advisor and the Sub-Advisor; and
information on the Advisor's and the Sub-Advisor's compliance programs.
Following receipt of this information, the Independent Trustees and their
counsel met separately to discuss the information provided by the Advisor and
the Sub-Advisor. The Board applied its business judgment to determine whether
the arrangements between the Fund and the Advisor and among the Fund, the
Advisor and the Sub-Advisor are reasonable business arrangements from the Fund's
perspective as well as from the perspective of shareholders. The Board
considered that shareholders chose to invest or remain invested in the Fund
knowing that the Advisor and the Sub-Advisor manage the Fund.
In reviewing the Agreements, the Board considered the nature, extent and quality
of services provided by the Advisor and the Sub-Advisor under the Agreements.
The Board considered the Advisor's statements regarding the incremental benefits
associated with the Fund's advisor/sub-advisor management structure. With
respect to the Advisory Agreement, the Board considered that the Advisor is
responsible for the overall management and administration of the Fund and
reviewed the services provided by the Advisor to the Fund, including the
oversight of the Sub-Advisor. The Board noted the compliance program that had
been developed by the Advisor and considered that it includes a robust program
for monitoring the Sub-Advisor's compliance with the 1940 Act and the Fund's
investment objectives and policies. With respect to the Sub-Advisory Agreement,
the Board received a presentation from representatives of the Sub-Advisor
discussing the services that the Sub-Advisor provides to the Fund and how the
Sub-Advisor manages the Fund's investments. In light of the information
presented and the considerations made, the Board concluded that the nature,
extent and quality of services provided to the Fund by the Advisor and the
Sub-Advisor under the Agreements have been and are expected to remain
satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has
managed the Fund consistent with its investment objectives and policies.
The Board considered the advisory and sub-advisory fees paid under the
Agreements. The Board considered the advisory fees charged by the Advisor to
similar funds and other non fund clients, noting that the Advisor provides
services to one other closed end fund sub-advised by the Sub-Advisor and certain
separately managed accounts with investment objectives and policies similar to
the Fund's. The Board noted that the Advisor charges the same advisory fee rate
to the Fund and the other closed end fund sub-advised by the Sub-Advisor and a
lower advisory fee rate to the separately managed accounts. The Board noted the
Advisor's statement that the nature of the services provided to the separately
managed accounts is not comparable to those provided to the Fund. The Board
considered the sub-advisory fee and how it relates to the Fund's overall
advisory fee structure and noted that the sub-advisory fee is paid by the
Advisor from its advisory fee. The Board also considered information provided
Page 25
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
by the Sub-Advisor as to the fees it charges to other clients, noting that the
Sub-Advisor does not manage any other funds directly comparable to the Fund, but
that the sub-advisory fee rate is the same as that received from the Advisor for
the other closed end fund for which it serves as sub-advisor, and is generally
lower than or equal to the fees the Sub-Advisor charges to the other North
American closed end fixed income funds and a separate account with a global bond
mandate that it manages. In addition, the Board reviewed data prepared by Lipper
Inc. ("Lipper"), an independent source, showing the advisory fees and expense
ratios of the Fund as compared to the advisory fees and expense ratios of an
expense peer group selected by Lipper and similar data from the Advisor for a
separate peer group selected by the Advisor. The Board noted that the Lipper
expense peer group consisted of only three other funds and that the Lipper and
Advisor peer groups did not include any overlapping peer funds. The Board
discussed with representatives of the Advisor the limitations in creating a
relevant peer group for the Fund, including that (i) the Fund is unique in its
composition, which makes assembling peers with similar strategies and asset mix
difficult; (ii) peer funds may use different types of leverage which have
different costs associated with them or may use no leverage; (iii) most peer
funds do not employ an advisor/sub-advisor management structure; (iv) some of
the peer funds are larger than the Fund, which causes the Fund's fixed expenses
to be higher on a percentage basis as compared to the larger peer funds; and (v)
peer funds may have fewer investments in foreign assets as compared to the Fund,
which typically have higher custody costs. The Board took these limitations into
account in considering the peer data. In reviewing the peer data, the Board
noted that the Fund's contractual advisory fee was above the median of the
Lipper peer group.
The Board also considered performance information for the Fund, noting that the
performance information included the Fund's quarterly performance report, which
is part of the process that the Board has established for monitoring the Fund's
performance and portfolio risk on an ongoing basis. The Board determined that
this process continues to be effective for reviewing the Fund's performance. In
addition to the Board's ongoing review of performance, the Board also received
data prepared by Lipper comparing the Fund's performance to a performance peer
universe selected by Lipper and to a blended benchmark. In reviewing the Fund's
performance as compared to the performance of the Lipper performance peer
universe, the Board took into account the limitations described above with
respect to creating a relevant peer group for the Fund. The Board also
considered the Fund's dividend yield as of March 28, 2013 and an analysis
prepared by the Advisor on the continued benefits provided by the Fund's
leverage. In addition, the Board compared the Fund's premium/discount to the
average and median premium/discount over the past eight quarters of the Advisor
peer group over the same period and considered factors that may impact a fund's
premium/discount.
On the basis of all the information provided on the fees, expenses and
performance of the Fund, the Board concluded that the advisory and sub-advisory
fees were reasonable and appropriate in light of the nature, extent and quality
of services provided by the Advisor and Sub-Advisor under the Agreements.
The Board noted that the Advisor has continued to invest in personnel and
infrastructure and considered whether fee levels reflect any economies of scale
for the benefit of shareholders. The Board determined that due to the Fund's
closed end structure, the potential for realization of economies of scale as
Fund assets grow was not a material factor to be considered. The Board also
considered the costs of the services provided and profits realized by the
Advisor from serving as investment advisor to the Fund for the twelve months
ended December 31, 2012, as set forth in the materials provided to the Board.
The Board noted the inherent limitations in the profitability analysis, and
concluded that the Advisor's estimated profitability appeared to be not
excessive in light of the services provided to the Fund. In addition, the Board
considered fall out benefits described by the Advisor that may be realized from
its relationship with the Fund, including the Advisor's compensation for fund
reporting services pursuant to a separate Fund Reporting Services Agreement.
The Board considered the Sub-Advisor's representation that because it manages
the Fund in a similar fashion to other accounts it is able to achieve economies
of scale through relationships with brokers, administrative systems and other
operational efficiencies and that while it expects operating costs in general to
continue to rise, it continues to expect to experience the benefits of economies
of scale. The Board considered that the sub-advisory fee rate was negotiated at
arm's length between the Advisor and the Sub-Advisor, an unaffiliated third
party. The Board also considered data provided by the Sub-Advisor as to the
profitability of the Sub-Advisory Agreement to the Sub-Advisor. The Board noted
the inherent limitations in the profitability analysis and concluded that the
profitability analysis for the Advisor was more relevant, although the
profitability of the Sub-Advisory Agreement appeared to be not excessive in
light of the services provided to the Fund. The Board considered fall out
benefits realized by the Sub-Advisor from its relationship with the Fund, and
noted that while the Sub-Advisor may enter into soft dollar arrangements, the
Fund invests mainly in fixed income securities, and there were no credits
generated by the Fund from any commission sharing arrangements.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreements continue to be fair and reasonable and that the continuation
of the Agreements is in the best interests of the Fund. No single factor was
determinative in the Board's analysis.
RISK CONSIDERATIONS
Risks are inherent in all investing. The following summarizes some, but not all,
of the risks that should be considered for the Fund. For additional information
about the risks associated with investing in the Fund, please see the Fund's
prospectus and statement of additional information, as well as other Fund
regulatory filings.
Page 26
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
INVESTMENT AND MARKET RISK: An investment in the Fund's Common Shares is subject
to investment risk, including the possible loss of the entire principal
invested. An investment in Common Shares represents an indirect investment in
the securities owned by the Fund, which include a global bond portfolio of
investment grade and below-investment grade government and corporate debt
securities. The value of these securities, like other market investments, may
move up or down, sometimes rapidly and unpredictably. Common Shares at any point
in time may be worth less than the original investment, even after taking into
account the reinvestment of Fund dividends and distributions. Security prices
can fluctuate for several reasons including the general condition of the bond
market, or when political or economic events affecting the issuers occur. When
the Advisor or Sub-Advisor determines that it is temporarily unable to follow
the Fund's investment strategy or that it is impractical to do so (such as when
a market disruption event has occurred and trading in the securities is
extremely limited or absent), the Fund may take temporary defensive positions.
NON-INVESTMENT GRADE SECURITIES RISK: The Fund may invest up to 60% of its
Managed Assets in non-investment grade securities. Non-investment grade
securities are rated below "Baa3" by Moody's Investors Service, Inc., below
"BBB-" by Standard & Poor's, or comparably rated by another nationally
recognized statistical rating organization or, if unrated, determined by the
Sub-Advisor to be of comparable credit quality. Non-investment grade debt
instruments are commonly referred to as "high-yield" or "junk" bonds and are
considered speculative with respect to the issuer's capacity to pay interest and
repay principal and are susceptible to default or decline in market value due to
adverse economic and business developments. The market values for high-yield
securities tend to be very volatile, and these securities are less liquid than
investment grade debt securities.
EMERGING MARKETS RISK: The Fund may invest in fixed-income securities of issuers
located in countries considered to be emerging markets. Investments in such
securities are considered speculative. In addition to the general risks of
investing in non-U.S. securities, heightened risks of investing in emerging
markets securities include: smaller market capitalization of securities markets,
which may suffer periods of relative illiquidity; significant price volatility;
restrictions on foreign investment; and possible restrictions on repatriation of
investment income and capital. Furthermore, foreign investors may be required to
register the proceeds of sales, and future economic or political crises could
lead to price controls, forced mergers, expropriation or confiscatory taxation,
seizure, nationalization or creation of government monopolies. The currencies of
emerging market countries may experience significant declines against the U.S.
dollar, and devaluation may occur subsequent to investments in these currencies
by the Fund. Inflation and rapid fluctuations in inflation rates have had, and
may continue to have, negative effects on the economies and securities markets
of certain emerging market countries. The risks associated with investing in
emerging market securities also include: greater political uncertainties,
dependence on international trade or development assistance, overburdened
infrastructures and environmental problems.
FIXED-INCOME SECURITIES RISK: Debt securities, including high yield securities,
are subject to certain risks, including: (i) issuer risk, which is the risk that
the value of fixed-income securities may decline for a number of reasons which
directly relate to the issuer, such as management performance, financial
leverage and reduced demand for the issuer's goods and services; (ii)
reinvestment risk, which is the risk that income from the Fund's portfolio will
decline if the Fund invests the proceeds from matured, traded or called bonds at
market interest rates that are below the Fund portfolio's current earnings rate;
(iii) prepayment risk, which is the risk that during periods of declining
interest rates, the issuer of a security may exercise its option to prepay
principal earlier than scheduled, forcing the Fund to reinvest in lower yielding
securities; and (iv) credit risk, which is the risk that a security in the
Fund's portfolio will decline in price or the issuer fails to make interest
payments when due because the issuer of the security experiences a decline in
its financial status.
INTEREST RATE RISK: The Fund's portfolio is also subject to interest rate risk.
Interest rate risk is the risk that fixed-income securities will decline in
value because of changes in market interest rates. Investments in debt
securities with long-term maturities may experience significant price declines
if long-term interest rates increase.
NON-U.S. ISSUER RISK: Investments in the securities and instruments of non-U.S.
issuers involve certain considerations and risks not ordinarily associated with
investments in securities and instruments of U.S. issuers. Non-U.S. companies
are not generally subject to uniform accounting, auditing and financial
standards and requirements comparable to those applicable to U.S. companies.
Non-U.S. securities exchanges, brokers and listed companies may be subject to
less government supervision and regulation than exists in the United States.
Dividend and interest income may be subject to withholding and other non-U.S.
taxes, which may adversely affect the net return on such investments. There may
be difficulty in obtaining or enforcing a court judgment abroad. Non-U.S.
investments may also involve risks associated with the level of currency
exchange rates, less complete financial information about the issuers, less
market liquidity, more market volatility and political instability. Future
political and economic developments, the possible seizure or nationalization of
non-U.S. holdings, the possible establishment of exchange controls or freezes on
the convertibility of currency, or the adoption of other governmental
restrictions might adversely affect an investment in non-U.S. securities.
EUROPE RISK: The Fund invests in securities issued by companies operating in
Europe. The Fund is therefore subject to certain risks associated specifically
with Europe. A significant number of countries in Europe are member states in
the European Union (the "EU"), and the member states no longer control their own
monetary policies by directing independent interest rates for their currencies.
In these member states, the authority to direct monetary policies, including
money supply and official interest rates for the Euro, is exercised by the
European Central Bank. In addition, the continued implementation of the EU
provisions and recent rapid political and social change throughout Europe make
the extent and nature of future economic development in the region and their
effect on securities issued by European companies impossible to predict. The
European sovereign debt crisis has resulted in a weakened Euro and has put into
question the future financial prospects of the European region as a whole.
Page 27
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
JUNE 30, 2013 (UNAUDITED)
CURRENCY RISK: The value of securities denominated or quoted in foreign
currencies may be adversely affected by fluctuations in the relative currency
exchange rates and by exchange control regulations. The Fund's investment
performance may be negatively affected by a devaluation of a currency in which
the Fund's investments are denominated or quoted. Further, the Fund's investment
performance may be significantly affected, either positively or negatively, by
currency exchange rates because the U.S. dollar value of securities denominated
or quoted in another currency will increase or decrease in response to changes
in the value of such currency in relation to the U.S. dollar. While certain of
the Fund's non-U.S. dollar-denominated securities may be hedged into U.S.
dollars, hedging may not alleviate all currency risks.
LEVERAGE RISK: The use of leverage results in additional risks and can magnify
the effect of any losses. The funds borrowed pursuant to a leverage borrowing
program constitute a substantial lien and burden by reason of their prior claim
against the income of the Fund and against the net assets of the Fund in
liquidation. The rights of lenders to receive payments of interest on and
repayments of principal on any borrowings made by the Fund under a leverage
borrowing program are senior to the rights of holders of Common Shares with
respect to payment of dividends or upon liquidation. If the Fund is not in
compliance with certain credit facility provisions, the Fund may not be
permitted to declare dividends or other distributions, including dividends and
distributions with respect to Common Shares or purchase Common Shares.
GOVERNMENT SECURITIES RISK: The ability of a government issuer, especially in an
emerging market country, to make timely and complete payments on its debt
obligations will be strongly influenced by the government issuer's balance of
payments, including export performance, its access to international credits and
investments, fluctuations of interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or whose
economy depends on certain strategic imports could be vulnerable to fluctuations
in international prices of these commodities or imports. To the extent that a
country receives payment for its exports in currencies other than U.S. dollars,
its ability to make debt payments denominated in U.S. dollars could be adversely
affected. If a government issuer cannot generate sufficient earnings from
foreign trade to service its external debt, it may need to depend on continuing
loans and aid from foreign governments, commercial banks, and multinational
organizations. There are no bankruptcy proceedings similar to those in the
United States by which defaulted government debt may be collected. Additional
factors that may influence a government issuer's ability or willingness to
service debt include, but are not limited to, a country's cash flow situation,
the availability of sufficient foreign exchange on the date a payment is due,
the relative size of its debt service burden to the economy as a whole, and the
issuer's policy towards the International Monetary Fund, the International Bank
for Reconstruction and Development and other international agencies to which a
government debtor may be subject.
NON-U.S. GOVERNMENT SECURITIES RISK: Economies and social and political climates
in individual countries may differ unfavorably from the United States. Non-U.S.
economies may have less favorable rates of growth of gross domestic product,
rates of inflation, currency valuation, capital reinvestment, resource
self-sufficiency and balance of payments positions. Many countries have
experienced extremely high rates of inflation for many years. Unanticipated
economic, political and social developments may also affect the values of the
Fund's investments and limit the availability of additional investments in such
countries. Furthermore, such developments may significantly disrupt the
financial markets or interfere with the Fund's ability to enforce its rights
against non-U.S. government issuers.
Investments in debt instruments of issuers located in emerging market countries
are considered speculative. Heightened risks of investing in emerging markets
government debt include: smaller market capitalization of securities markets,
which may suffer periods of relative illiquidity; significant price volatility;
restrictions on foreign investment; and possible repatriation of investment
income and capital. Furthermore, foreign investors may be required to register
the proceeds of sales and future economic or political crises could lead to
price controls, forced mergers, expropriation or confiscatory taxation, seizure,
nationalization or creation of government monopolies. The currencies of emerging
market countries may experience significant declines against the U.S. dollar,
and devaluation may occur subsequent to investments in these currencies by the
Fund. Inflation and rapid fluctuations in inflation rates have had, and may
continue to have, negative effects on the economies and securities markets of
certain emerging market countries.
Page 28
FIRST TRUST
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 E. Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
Aberdeen Asset Management Inc.
1735 Market Street, 32nd Floor
Philadelphia, PA 19103
ADMINISTRATOR,
FUND ACCOUNTANT &
TRANSFER AGENT
BNY Mellon Investment Servicing (US) Inc.
301 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
The Bank of New York Mellon
101 Barclay Street, 20th Floor
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
[BLANK BACK COVER]
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) Schedule of Investments in securities of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) Not applicable.
(b) There have been no changes, as of the date of filing, in any of the
Portfolio Managers identified in response to paragraph (a)(1) of this item
in the Registrant's most recent annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the "1940
Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days
of the filing date of the report that includes the disclosure required by
this paragraph, based on their evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's second fiscal quarter
of the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) First Trust/Aberdeen Global Opportunity Income Fund
---------------------------------------------------------------
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date August 9, 2013
-------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date August 9, 2013
-------------------
By (Signature and Title)* /s/ James M. Dykas
------------------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
Date August 9, 2013
-------------------
* Print the name and title of each signing officer under his or her signature.
EX-99.CERT
2
certs_302.txt
SECTION 302 CERTIFICATION
CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302
OF THE SARBANES-OXLEY ACT
I, Mark R. Bradley, certify that:
1. I have reviewed this report on Form N-CSR of First Trust/Aberdeen Global
Opportunity Income Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to
include a statement of cash flows) of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940) and
internal control over financial reporting (as defined in Rule 30a-3(d)
under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such
evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: August 9, 2013 /s/ Mark R. Bradley
-------------------- ----------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302
OF THE SARBANES-OXLEY ACT
I, James M. Dykas, certify that:
1. I have reviewed this report on Form N-CSR of First Trust/Aberdeen Global
Opportunity Income Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to
include a statement of cash flows) of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940) and
internal control over financial reporting (as defined in Rule 30a-3(d)
under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such
evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: August 9, 2013 /s/ James M. Dykas
-------------------- ----------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
EX-99.906 CERT
3
certs_906.txt
SECTION 906 CERTIFICATION
CERTIFICATION PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND SECTION 906
OF THE SARBANES-OXLEY ACT
I, Mark R. Bradley, President and Chief Executive Officer of First Trust/
Aberdeen Global Opportunity Income Fund (the "Registrant"), certify that:
1. The Form N-CSR of the Registrant (the "Report") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Registrant.
Date: August 9, 2013 /s/ Mark R. Bradley
-------------------- ------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
I, James M. Dykas, Treasurer, Chief Financial Officer and Chief Accounting
Officer of First Trust/Aberdeen Global Opportunity Income Fund (the
"Registrant"), certify that:
1. The Form N-CSR of the Registrant (the "Report") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Registrant.
Date: August 9, 2013 /s/ James M. Dykas
-------------------- ------------------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)