UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21636
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
(Exact name of registrant as specified in charter)
1001 WARRENVILLE ROAD, SUITE 300
LISLE, IL 60532
(Address of principal executive offices) (Zip code)
W. SCOTT JARDINE, ESQ.
FIRST TRUST PORTFOLIOS L.P.
1001 WARRENVILLE ROAD, SUITE 300
LISLE, IL 60532
(Name and address of agent for service)
registrant's telephone number, including area code: (630) 241-4141
Date of fiscal year end: DECEMBER 31
Date of reporting period: DECEMBER 31, 2005
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.
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY
INCOME FUND
ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2005
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TABLE OF CONTENTS
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005
Shareholder Letter ....................................................... 1
Portfolio Commentary ..................................................... 2
Portfolio Components ..................................................... 5
Portfolio of Investments ................................................. 6
Schedule of Credit Default Swaps ......................................... 11
Schedule of Forward Foreign Currency Contracts ........................... 12
Statement of Assets and Liabilities ...................................... 13
Statement of Operations .................................................. 14
Statements of Changes in Net Assets ...................................... 15
Statement of Cash Flows .................................................. 16
Financial Highlights ..................................................... 17
Notes to Financial Statements ............................................ 18
Report of Independent Registered Public Accounting Firm .................. 22
Additional Information ................................................... 23
Dividend Reinvestment Plan
Proxy Voting Policies and Procedures
Portfolio Holdings
NYSE Certification Information
Tax Information
Submission of Matters to a Vote of Shareholders
By-Law Amendment
Trustees and Officers .................................................... 25
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933. Forward-looking statements
include statements regarding the goals, beliefs, plans or current expectations
of First Trust Advisors L.P. (the "Advisor") and/or Aberdeen Asset Management
Inc. (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 First Trust/Aberdeen Global Opportunity Income
Fund's (the "Fund") actual results, performance or achievements 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 Annual Report, you are cautioned not to place undue reliance on
these forward-looking statements, which reflect the judgment of the Advisor and
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.
HOW TO READ THIS REPORT
This report contains information that can 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 letter from the Fund's President, James A. Bowen, together with
the portfolio commentary by Brett Diment and Derek Fulton, Co-Portfolio Managers
of the Sub-Advisor, you will obtain an understanding of how the market
environment affected the Fund's performance. The statistical information that
follows can help you understand the Fund's performance.
It is important to keep in mind that the opinions expressed by Mr. Bowen and
personnel of the Advisor and Sub-Advisor 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. Of
course, the risks of investing in the Fund are spelled out in the prospectus.
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SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
ANNUAL REPORT
DECEMBER 31, 2005
Dear Shareholders:
We are pleased to report that for the year ended December 31, 2005, the First
Trust/Aberdeen Global Opportunity Income Fund (the "Fund") continued to provide
attractive monthly distributions and diversified exposure to the global debt
marketplace.
This was a year marked by significant events. The markets were confronted with
many obstacles including rising oil prices, several short-term rate increases
and natural disasters. The Fund posted a net asset value ("NAV") total return of
6.9% for the year ended December 31, 2005 vs. 9.4% for the Lehman Global
Emerging Markets Index and -4.5% for the Lehman Global Aggregate Index, which
measures the performance of investment grade bonds. The Fund's market price
total return was -7.2% for the same one-year period.
First Trust Advisors L.P. ("First Trust") serves as the Fund's investment
advisor and currently manages or supervises approximately $21 billion in assets.
Aberdeen Asset Management Inc. ("Aberdeen") is the Fund's sub-advisor. Aberdeen
is a wholly-owned subsidiary of Aberdeen Asset Management PLC which is the
parent company of an asset management group managing approximately $126.9
billion in assets, including approximately $61.1 billion in global fixed-income
securities, for a range of pension funds, financial institutions, investment
trusts, unit trusts, offshore funds, charities and private clients. I encourage
you to read the commentary from the portfolio management team found on the
following pages. It includes a review of the Fund's performance and the
portfolio managers' outlook for the markets.
We thank you for your confidence in First Trust and Aberdeen and will work
diligently to keep earning it.
Sincerely,
/s/ James A. Bowen
James A. Bowen
First Trust/Aberdeen Global Opportunity Income Fund
February 10, 2006
Page 1
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PORTFOLIO COMMENTARY
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PORTFOLIO MANAGEMENT TEAM
Investment decisions for the First Trust/Aberdeen Global Opportunity Income Fund
(the "Fund") are typically 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 the roles of 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 companies in which Aberdeen invests.
Since the Fund's inception, Derek Fulton has had primary responsibility for
overseeing the management of the global fixed income portion of the Fund's
portfolio. Effective September 30, 2005, Aberdeen Asset Management PLC, the
parent company of the Sub-Advisor acquired from Deutsche Asset Management Group
Limited ("Deutsche") the UK asset management businesses including certain UK
subsidiaries of Deutshe. As part of the acquisition integration, effective
November 1, 2005, Brett Diment replaced Colm McDonagh as one of the portfolio
managers of the Fund and currently heads the team responsible for the day-to-day
management of emerging market debt for the Fund. Included below is additional
information about Mr. Fulton and Mr. Diment as well as other members of the team
with significant responsibility for the day-to-day management of the Fund's
portfolio.
DEREK FULTON
HEAD OF GLOBAL AND ASIAN BONDS
After graduation, Mr. Fulton joined Murray Johnstone in 1996 as a graduate
trainee in Fixed Income. In 1998 he qualified as an Associate of the Institute
of Investment Management & Research. Mr. Fulton has since become a senior member
of the fixed income team with Aberdeen and is responsible for the day-to-day
management of global fixed income and government portfolios. He is a member of
the Aberdeen's global economics team.
BRETT DIMENT
HEAD OF EMERGING MARKET DEBT
Mr. Diment joined Deutsche in 1991 as a member of the Fixed Income group and was
head of the emerging debt team at Deutsche in 1999. Mr. Diment joined Aberdeen
following the acquisition in 2005 and is now responsible for the day-to-day
management of the emerging market debt team and portfolios.
EDWIN GUTIERREZ
PORTFOLIO MANAGER, EMERGING MARKET DEBT
Mr. Gutierrez has served previously as an economist specializing in Latin
America at LGT Asset Manager, and more recently as a portfolio manager
specializing in emerging market fixed income at INVESCO Asset Management. He
joined Deutsche in 2000 and Aberdeen in 2005.
NIMA TAYEBI
PORTFOLIO MANAGER, EMERGING MARKET DEBT
Mr. Tayebi has 8 years of experience as executive director responsible for
emerging markets trading at Millennium Global Investments, vice president at
Salomon Brothers, focusing on emerging currency and debt trading and head of
Fixed Income research at Renaissance Capital. He joined Deutsche in 2001 as an
emerging currency portfolio manager and Aberdeen in 2005.
MAX WOLMAN
ASSISTANT PORTFOLIO MANAGER
Mr. Wolman moved to Aberdeen in January 2001 and is assistant portfolio manager
on the Global Emerging Market Debt mandates. Mr. Wolman originally specialized
in currency and domestic debt analysis; however he is now responsible for wider
emerging debt analysis including external and corporate issuers. He is a member
of the EM (Emerging Markets) Debt investment committee at Aberdeen and is also
responsible for the daily implementation of the investment process.
Page 2
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PORTFOLIO COMMENTARY - (CONTINUED)
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PERFORMANCE
Comparative total returns of the Fund and its benchmarks for the year ended
December 31, 2005 were as follows:
FAM NAV 6.9%
FAM Market Price -7.2
Lehman Global Emerging Markets Index 9.4
Lehman Global Aggregate Index -4.5
The following commentary will help explain the Fund's performance, along with
various factors that have impacted the Fund's investment portfolio.
REVIEW
Two major themes dominated the general economy in 2005: higher oil prices and
the continuation of the U.S. Federal Reserve Bank raising rates. The U.S.
Treasury curve has continued to flatten as the Federal Reserve Bank has
maintained its tightening policy and in December the U.S. Treasury curve nearly
inverted from two years to ten years. Oil prices started the year at US$40 a
barrel (Bloomberg) and ended the year at US$60 a barrel, reaching a peak of
US$67 a barrel towards the end of August due to supply issues caused by both
Hurricane Katrina and Rita.
A synchronized upturn has led to considerable global growth momentum as we
entered the New Year. Global growth has benefited from the simultaneous revival
of activity in Europe and Japan during the second half of 2005. U.S. growth has
benefited from a fiscal boost via expenditure while Europe has seen exports
increase due to the lagging impact of strong U.S. demand. We have seen
improvements in the labor market but these are public sector driven. Japan's
expansion has become more broadly based with investment and to a lesser extent
consumption contributing to this upturn. Asia has continued to profit from
external demand along with robust investment. Nevertheless the U.S. economy
still remains the main catalyst for progress and consumption is still the key
factor within the U.S. economy. This is a result of the housing market and in
particular mortgage refinancing and equity withdrawal. There are anecdotal signs
that house price increases are slowing and we believe this will continue to be
the case as the year progresses, which will probably slow consumption; however,
investment may take up some of the slack since firms remain cash rich. The
extent of any slowdown in U.S. domestic demand will be crucial in determining
the fate of the other major regions, but this does not appear to be a major
threat. Energy price volatility, however, refuses to go away and this could yet
prove an impediment.
Emerging fixed-income markets performed well over the year, supported by broadly
improving fundamentals together with robust commodity prices globally and low
interest rates in developed economies. In turn, the external debt of many
emerging economies is currently trading at historically tight spreads over U.S.
Treasury securities, and many Central Banks have used the underlying strength of
their currencies to build significant foreign exchange reserve holdings, notably
in Russia, Brazil, Turkey and Venezuela. The recent increase in foreign reserves
has allowed some of the aforementioned countries to repay their existing
International Monetary Fund ("IMF") and Paris Club Debt early, further improving
the debt dynamics of some emerging countries.
The rating agencies were very active in 2005, upgrading several countries, most
notably Russia, which Standard & Poor's gave an investment grade rating of BBB-
in January 2005. Other countries which received upgrades from the rating
agencies included Brazil, Argentina and Turkey on improved credit fundamentals.
Two brief periods of market weakness during the year proved relatively
short-lived. In March, concerns regarding the "contagion" impact of spread
widening and ratings downgrades in the U.S. auto sector pressured the asset
class briefly and more recently in October a period of global risk aversion
brought about largely by rising U.S. Treasury yields also proved short-lived.
Over the period, we continued to add exposure to local currency debt markets as
they offered higher yields than the external debt market. In particular local
debt positions in Latin America such as Brazil and Colombia provided the Fund
with positive returns as both currencies appreciated against the U.S. dollar and
the cash price of the bonds increased. Another area of out-performance was in
Mexico where the Fund held a large local currency position in the long end of
the Mbono curve (Mexican local currency bonds) which tightened some 3%
(Bloomberg) since the start of the 2005.
Page 3
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PORTFOLIO COMMENTARY - (CONTINUED)
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The Fund also increased its exposure to the emerging corporate market which
offered attractive yields as the value in sovereign external debt began to
decline. The shift into corporate debt has proved successful as it outperformed
the sovereign paper throughout the period.
OUTLOOK
Inflation risks persist in the short term, despite longer-term inflation
expectations receding. Although the energy price impact on inflation has
receded, other demand driven risks remain. In the U.S. productivity could slow
as we advance through the year and this combined with a tightening labor market
threatens a modest rise in unit labor costs. So far growth has benefited firms
as the share of profits in Gross Domestic Product ("GDP") has risen to record
levels, with the offsetting impact on labor's share of the economic pie keeping
inflation subdued. However a change would present risks, particularly if demand
remained strong enough to support corporate pricing power. Additionally, the
recent revival of energy prices once again presents problems, especially as the
second round impacts of the last surge are only now feeding through. Money
supply growth in Europe is an additional concern considering the impact it has
had on house price inflation in countries such as Spain and Ireland. Overall,
global trade growth is still depressing the outlook for goods price inflation,
but services remain a focus for policy makers.
Risks linger on inflation and with monetary policy still accommodative, short
rates will rise further. Investors perceive the U.S. Federal Reserve to be near
an end to policy tightening; however with the advent of a new Chairman we feel
that "measured" tightening is likely to continue into the spring with rates
rising as high as 5%. Growth remains above potential and core inflation rates
have risen. Chairman Bernanke will want to establish market confidence that
inflation will not be allowed to accelerate. In Europe the monetarist element of
the European Central Bank seems acutely aware that the implicit inflation target
has been exceeded again during 2005. With money supply continuing to grow above
its reference rate and the economy now gathering pace we expect the repurchase
agreement rate to rise to 3% by year end. In Japan the emergency quantitative
easing enacted a few years ago seems likely to be phased out as inflation stays
above 0%. It also appears reasonable to anticipate a move away from the zero
interest rate policy over the next twelve months if growth continues to be
robust.
We are constructive on the outlook for emerging markets in 2006. The prospect of
robust global growth, with China in particular remaining strong, and only modest
interest rate rises in the G3 economies (Colombia, Mexico and Venezuela)
provides a positive backdrop for emerging economies, in particular those
countries that are net commodity exporters.
A major theme for this year is the prospect of significant interest rate cuts
across a number of emerging economies. High real interest rates and the impact
of recent exchange rate appreciation should result in a decline in consumer
price inflation in Brazil, Mexico and Turkey and lead to sharp cuts in official
interest rates in these countries. As a consequence we anticipate that the Fund
will continue to hold positions in longer-dated fixed-rate local currency
denominated bonds of these countries. In contrast, in Argentina we expect
inflation to remain on an upward track as monetary policy remains relatively
loose and the real exchange rate undervalued. Therefore, we expect
inflation-linked Peso denominated bonds, rather than fixed-rate debt, to perform
well in Argentina.
Elsewhere in local currency markets, we are constructive on Indonesian Rupiah
debt as we think that the central bank is nearing the end of the tightening
cycle and expect the Rupiah to appreciate due to inflows from foreign direct
investment and from other lower yielding Asian currencies. In addition, we
expect appreciation pressure to remain on the currencies of the commodity
exporting countries of Colombia, Peru and South Africa and are holding unhedged
bond positions in all three local markets.
In terms of hard currency sovereign bonds, we are constructive on prospects for
the Latin American oil exporting countries of Ecuador and Venezuela. Due to the
continued strength of oil prices we think that market participants are
overestimating the need for external financing in the coming 12 months. With tax
revenues set to remain strong we expect the governments of Argentina and Brazil
to maintain a high primary fiscal surplus which will support the external debt
of both countries.
In the emerging market corporate sector, Kazakstan bank bonds are expected to
perform well. This sector is benefiting from strong domestic growth and these
securities offer yield spreads of over 250 basis points with investment-grade
credit ratings.
Page 4
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO COMPONENTS+*
DECEMBER 31, 2005
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Multinational 8.4%
Russia 8.1%
Brazil 7.4%
Canada 6.6%
Mexico 6.0%
Norway 5.3%
Venezuela 4.8%
Colombia 4.4%
South Africa 4.3%
Peru 4.1%
Germany 4.0%
Australia 4.0%
United Kingdom 3.6%
Kazakhstan 3.5%
Netherlands 3.4%
Indonesia 3.4%
Spain 3.2%
Uruguay 3.1%
Philippines 2.6%
Turkey 2.0%
Argentina 1.8%
New Zealand 1.8%
Ecuador 1.4%
Sweden 1.2%
Jamaica 0.9%
Austria 0.4%
United States 0.3%
+ Percentages are based on total investments. Please note that the
percentages on the Portfolio of Investments are based on net assets.
* Portfolio securities are included in a country based upon their underlying
credit exposure as determined by Aberdeen Asset Management Inc. - the
Sub-Advisor.
See Notes to Financial Statements. Page 5
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2005
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) DESCRIPTION (US DOLLARS)
---------------- ---------------------------------------------- -------------
FOREIGN BONDS AND NOTES+ - 138.4%
ARGENTINA - 2.5%
4,000,000 Banco Hipotecario SA (USD),
9.75%, 11/16/10 ........................... $ 4,027,600
4,264,212 Republic of Argentina (USD), 8.28%,
12/31/33 .................................. 3,560,617
12,653,448 Republic of Argentina (USD),
Zero coupon, 12/15/35 ..................... 673,796
-------------
8,262,013
-------------
AUSTRALIA - 5.5%
10,500,000 Australian Government (AUD), 7.50%, 9/15/09 .. 8,281,232
5,000,000 New South Wales Treasury Corp. (AUD),
8.00%, 3/01/08 ............................ 3,854,204
8,300,000 Queensland Treasury (AUD), 6.00%, 7/14/09 .... 6,214,073
-------------
18,349,509
-------------
AUSTRIA - 0.6%
2,500,000 Republic of Austria (TRY), 14.00%, 8/03/06 ... 1,862,736
-------------
BRAZIL - 10.2%
18,000,000 Banco Bradesco (BRL), 17.50%, 12/10/07 ....... 7,794,124
11,200,000 BIE Bank & Trust (BRL), 16.80%, 3/13/07 ...... 4,825,728
5,750,000 Citibank NA (BRL), 15.00%, 7/02/10 ........... 2,588,791
1,997,120 Citigroup Global Markets (USD), 6.00%,
4/02/08 ................................... 2,194,155
31,903,000 Electropaulo Metropolitan (BRL), 19.13%,
6/28/10 ................................... 14,428,184
2,000,000 Petrobras International Finance (USD),
8.38%, 12/10/18. .......................... 2,224,300
-------------
34,055,282
-------------
CANADA - 9.1%
9,805,000 Canadian Government (CAD), 4.25%, 9/01/08 .... 8,539,869
7,000,000 Canadian Government (CAD), 5.25%, 6/01/13 .... 6,524,642
3,000,000 Canadian Government (CAD), 5.75%, 6/01/29 .... 3,224,629
7,000,000 Province of Manitoba (NZD), 6.38%, 9/01/15 ... 4,754,616
10,965,000 Province of Ontario (NZD), 6.25%, 6/16/15 .... 7,387,118
-------------
30,430,874
-------------
COLOMBIA - 6.2%
24,113,000,000 Republic of Colombia (COP), 11.75%,
3/01/10 ................................... 11,854,126
16,903,000,000 Republic of Colombia (COP), 12.00%,
10/22/15 .................................. 8,739,217
-------------
20,593,343
-------------
ECUADOR - 2.0%
7,200,000 Republic of Ecuador (USD), 9.38%, 12/15/15 ... 6,719,681
-------------
Page 6 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
DECEMBER 31, 2005
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) DESCRIPTION (US DOLLARS)
---------------- ---------------------------------------------- -------------
FOREIGN BONDS AND NOTES+ - CONTINUED
GERMANY - 5.6%
4,600,000 KfW Bankengruppe (GBP), 4.75%, 12/07/10 ...... $ 8,033,945
3,650,000 KfW International Finance (CAD), 4.95%,
10/14/14 .................................. 3,309,695
11,000,000 KfW Kredit Wiederaufbau (NZD), 6.00%,
7/15/09 ................................... 7,359,538
-------------
18,703,178
-------------
INDONESIA - 4.6%
53,500,000,000 Indonesia Recapital Bond (IDR), 14.00%,
6/15/09. .................................. 5,554,350
98,500,000,000 Indonesia Recapital Bond (IDR), 13.15%,
3/15/10 ................................... 9,986,557
-------------
15,540,907
-------------
JAMAICA - 1.2%
3,000,000 Government of Jamaica (EUR), 11.00%,
7/27/12 ................................... 4,119,952
-------------
KAZAKHSTAN - 4.8%
3,300,000 Kazkommerts Finance 2 BV (USD), 9.20%,
11/29/49 .................................. 3,454,605
6,000,000 Kazkommerts International BV (USD),
7.88%, 4/07/14 ............................ 6,312,600
6,000,000 TuranAlem Finance BV (USD), 8.00%,
3/24/14 ................................... 6,254,988
-------------
16,022,193
-------------
MEXICO - 8.3%
114,600,000 Mexican Fixed Rate Bonds (MXN), 8.00%,
12/19/13 .................................. 10,642,468
61,355,100 Mexican Fixed Rate Bonds (MXN), 9.50%,
12/18/14 .................................. 6,219,471
123,000,000 United Mexican States (MXN), 8.00%,
12/07/23 .................................. 10,907,755
-------------
27,769,694
-------------
MULTINATIONAL - 11.6%
8,540,000 Council of Europe (AUD), 5.50%, 8/15/08 ...... 6,255,759
2,000,000 European Investment Bank (TRY), 14.50%,
2/21/07 ................................... 1,520,178
4,400,000 European Investment Bank (GBP), 7.63%,
12/07/07 .................................. 8,027,533
12,300,000 European Investment Bank (NZD), 6.75%,
11/17/08 .................................. 8,422,152
See Notes to Financial Statements. Page 7
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
DECEMBER 31, 2005
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) DESCRIPTION (US DOLLARS)
---------------- ---------------------------------------------- -------------
FOREIGN BONDS AND NOTES+ - CONTINUED
MULTINATIONAL - (CONTINUED)
8,400,000 European Investment Bank (AUD), 5.75%,
9/15/09 ................................... $ 6,212,539
6,500,000 European Investment Bank (NZD), 6.50%,
9/10/14 ................................... 4,452,125
2,240,000 Nordic Investment Bank (GBP), 5.75%,
11/06/08 .................................. 3,990,901
-------------
38,881,187
-------------
NETHERLANDS - 4.7%
4,900,000 Bank Nederlandse Gemeenten NV (GBP),
4.63%, 12/07/06 ........................... 8,449,929
11,000,000 Bank Nederlandse Gemeenten NV (NZD),
5.25%, 6/17/09 ............................ 7,216,905
-------------
15,666,834
-------------
NEW ZEALAND - 2.4%
12,000,000 Government of New Zealand (NZD), 6.50%,
2/15/06 ................................... 8,189,029
-------------
NORWAY - 7.4%
11,000,000 Eksportsfinans (TRY), 14.63%, 3/15/07 ........ 8,321,881
11,300,000 Kommunalbanken (TRY), 14.75%, 2/09/09 ........ 8,489,434
4,500,000 Kommunalbanken AS (GBP), 4.75%, 1/28/10 ...... 7,837,089
-------------
24,648,404
-------------
PERU - 5.7%
23,750,000 Peru Bono Soberano (PEN), 9.91%, 5/05/15 ..... 8,211,657
4,000,000 Republic of Peru (USD), 9.88%, 2/06/15 ....... 4,813,000
19,000,000 Republic of Peru (PEN), 8.60%, 8/12/17 ....... 5,976,459
-------------
19,001,116
-------------
PHILIPPINES - 3.6%
6,000,000 Republic of Philippines (USD), 8.88%,
3/17/15 ................................... 6,646,800
4,500,000 Republic of Philippines (USD), 9.50%,
2/02/30 ................................... 5291,550
-------------
11,938,350
-------------
RUSSIA - 11.2%
12,000,000 Alrosa Company SA (USD), 8.88%, 11/17/14 ..... 13,830,000
11,000,000 Russian Stand Bank (USD), 8.88%, 12/16/15 .... 11,140,140
12,000,000 UBS Luxembourg (Vimpelcom) (USD),
8.00%, 2/11/10 ............................ 12,365,400
-------------
37,335,540
-------------
SOUTH AFRICA - 5.9%
119,000,000 Republic of South Africa (ZAR), 10.00%,
2/28/08 ................................... 19,848,880
-------------
Page 8 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
DECEMBER 31, 2005
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) (US DOLLARS)
---------------- -------------
FOREIGN BONDS AND NOTES+ - CONTINUED
SPAIN - 4.4%
8,700,000 Instituto de Credito Oficial (AUD),
5.50%, 11/15/06 ........................... $ 6,368,001
11,500,000 Instituto de Credito Oficial (AUD),
5.50%, 10/11/12 ........................... 8,379,248
-------------
14,747,249
-------------
SWEDEN - 1.6%
8,000,000 Swedish Export Credit (NZD), 4.30%,
6/26/06 ................................... 5,377,597
-------------
TURKEY - 2.8%
8,900,000 Finans Capital Finance Ltd. (USD),
9.00%, 10/07/14 ........................... 9,416,200
-------------
UNITED KINGDOM - 4.9%
3,000,000 United Kingdom Treasury (GBP), 7.25%,
12/07/07 .................................. 5,453,332
3,100,000 United Kingdom Treasury (GBP), 5.75%,
12/07/09 .................................. 5,635,158
3,100,000 United Kingdom Treasury (GBP), 5.00%,
3/07/08 ................................... 5,425,631
-------------
16,514,121
-------------
UNITED STATES - 0.5%
2,000,000 General Electric Capital Corp. (TRY),
12.25%, 8/10/09 ........................... 1,543,947
-------------
URUGUAY - 4.4%
9,750,000 Republic of Uruguay (USD), 9.25%,
5/17/17 ................................... 11,066,250
177,300,000 Republica Orient Uruguay (UYU), 17.75%,
2/04/06 ................................... 3,517,195
-------------
14,583,445
-------------
VENEZUELA - 6.7%
19,200,000 Republic of Venezuela (USD), 8.50%,
10/08/14 .................................. 21,110,401
1,000,000 Republic of Venezuela (USD), 9.25%,
9/15/27 ................................... 1,183,900
-------------
22,294,301
-------------
TOTAL FOREIGN BONDS AND NOTES+ ............... 462,415,562
(Cost $454,698,387) -------------
TOTAL INVESTMENTS - 138.4% ................... 462,415,562
(Cost $454,698,387)*
LOAN OUTSTANDING - (43.6)% ................... (145,723,561)
-------------
NET OTHER ASSETS AND LIABILITIES - 5.2% ...... 17,403,707
-------------
NET ASSETS - 100.0% .......................... $ 334,095,708
=============
See Notes to Financial Statements. Page 9
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
DECEMBER 31, 2005
--------------------------------------------------------------------------------
* Aggregate cost for federal income tax purposes is $456,139,560.
+ Portfolio securities are included in a country based upon their
underlying credit exposure as determined by Aberdeen Asset Management
Inc. - the Sub-Advisor.
AUD Australian Dollar
BRL Brazilian Real
CAD Canadian Dollar
COP Colombian Peso
EUR European Monetary Unit
GBP British Pound Sterling
IDR Indonesian Rupiah
KRW South Korean Won
MXN Mexican Peso
NZD New Zealand Dollar
PEN Peruvian New Sol
SGD Singapore Dollar
THB Thailand Baht
TRY Turkish Lira
USD United States Dollar
UYU Uruguay Peso
ZAR South African Rand
Page 10 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
SCHEDULE OF CREDIT DEFAULT SWAPS
DECEMBER 31, 2005
UNREALIZED
BUY/SELL PAY/RECEIVE EXPIRATION NOTIONAL APPRECIATION/
COUNTERPARTY REFERENCE ENTITY PROTECTION FIXED RATE DATE AMOUNT (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------
Citigroup Global Capital Bolivarian Republic of
Markets Ltd. Venezuela,
9.25% due 9/15/27 Sell 2.76% 10/20/10 20,000,000 $ (512,544)
--------------
$ (512,544)
==============
See Notes to Financial Statements. Page 11
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
DECEMBER 31, 2005
FORWARD FOREIGN CURRENCY CONTRACTS TO BUY
CONTRACTS TO RECEIVE
--------------------------------------------- NET NET
IN UNREALIZED UNREALIZED
EXPIRATION LOCAL VALUE IN EXCHANGE APPRECIATION DEPRECIATION
DATE CURRENCY* U.S. $ FOR U.S. $ OF CONTRACTS OF CONTRACTS
---------- ------------------ ---------- ----------- ------------ ------------
01/06/06 BRL 25,000,000 10,668,109 11,027,790 $ -- $ (359,681)
01/23/06 KRW 13,823,040,000 13,677,917 13,600,000 77,917 --
01/05/06 SGD 7,096,836 4,269,236 4,175,000 94,236 --
01/06/06 SGD 33,865,800 20,373,286 20,000,000 373,286 --
01/23/06 THB 555,832,000 13,542,015 13,600,000 -- (57,985)
------------ ------------
$ 545,439 $ (417,666)
------------ ------------
FORWARD FOREIGN CURRENCY CONTRACTS TO SELL
CONTRACTS TO DELIVER
--------------------------------------------- NET NET
IN UNREALIZED UNREALIZED
EXPIRATION LOCAL VALUE IN EXCHANGE APPRECIATION DEPRECIATION
DATE CURRENCY* U.S. $ FOR U.S. $ OF CONTRACTS OF CONTRACTS
---------- ------------------ ---------- ----------- ------------ ------------
01/06/06 AUD 62,000,000 45,441,145 45,429,632 $ -- $ (11,513)
01/06/06 BRL 25,000,000 10,668,109 11,148,769 480,660 --
01/23/06 GBP 31,600,000 54,361,493 55,800,386 1,438,893 --
01/17/06 MXN 150,000,000 14,074,292 13,897,253 -- (177,039)
01/05/06 NZD 28,400,000 19,381,972 19,385,925 3,953 --
01/06/06 NZD 51,000,000 34,802,369 35,451,171 648,802 --
01/05/06 ZAR 128,500,000 20,298,362 20,100,738 -- (197,624)
------------ ------------
$ 2,572,308 $ (386,176)
------------ ------------
Unrealized Appreciation/(Depreciation) of Forward Currency
Contracts ............................................. 3,117,747 (803,842)
============ ============
Net Unrealized Appreciation of Forward Foreign Currency
Contracts ............................................. $ 2,313,905
============
* Please see page 9 for currency descriptions.
Page 12 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2005
ASSETS:
Investments, at value
(Cost $454,698,387) ............................................................................... $ 462,415,562
Cash ................................................................................................ 3,373,488
Foreign currency (Cost $275,551) .................................................................... 275,192
Unrealized appreciation of forward foreign currency contracts ....................................... 3,117,747
Prepaid expenses .................................................................................... 198,727
Receivables:
Interest ........................................................................................ 14,630,554
-------------
Total Assets .................................................................................... 484,011,270
-------------
LIABILITIES:
Unrealized depreciation of forward foreign currency contracts ....................................... 803,842
Unrealized depreciation of credit default swap contracts ............................................ 512,544
Payables:
Outstanding loan ................................................................................ 145,723,561
Interest and fees due on loan ................................................................... 2,100,208
Investment advisory fees ........................................................................ 406,087
Interest on swap contracts ...................................................................... 121,133
Audit and legal fees ............................................................................ 77,566
Custodian fees .................................................................................. 74,590
Printing fees ................................................................................... 54,768
Administrative fees ............................................................................. 35,884
Accrued expenses .................................................................................... 5,379
-------------
Total Liabilities ............................................................................... 149,915,562
-------------
NET ASSETS .......................................................................................... $ 334,095,708
=============
NET ASSETS CONSIST OF:
Accumulated net investment loss ..................................................................... $ (6,619,201)
Accumulated net realized loss on investments sold, forward foreign currency contracts, swap contracts
and foreign currencies and net other assets ....................................................... (570,525)
Net unrealized appreciation of investments, forward foreign currency contracts, swap contracts
and foreign currencies and net other assets ....................................................... 10,339,974
Par value ........................................................................................... 173,652
Paid-in capital ..................................................................................... 330,771,808
-------------
Total Net Assets ................................................................................ $ 334,095,708
=============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) ................................ $ 19.24
=============
Number of Common Shares outstanding ................................................................. 17,365,236
=============
See Notes to Financial Statements. Page 13
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
INVESTMENT INCOME:
Interest (net of foreign withholding tax of $798,213) ................. $ 34,485,752
-------------
Total investment income .......................................... 34,485,752
-------------
EXPENSES:
Interest and fees on outstanding loan payable and swap contracts ...... 5,202,703
Investment advisory fees .............................................. 4,737,970
Administration fees ................................................... 419,038
Custodian fees ........................................................ 294,403
Audit and legal fees .................................................. 166,959
Printing fees ......................................................... 100,854
Transfer agent fees ................................................... 42,146
Trustees' fees and expenses ........................................... 41,680
Other ................................................................. 173,102
-------------
Total expenses ..................................................... 11,178,855
-------------
NET INVESTMENT INCOME ................................................. 23,306,897
-------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) on:
Investments ........................................................ 4,391,554
Swap contracts ..................................................... (495,894)
Forward foreign currency contracts ................................. (7,246,548)
Foreign currencies ................................................. (4,990,453)
-------------
Net realized loss on investments during the year ...................... (8,341,341)
-------------
Net change in unrealized appreciation/(depreciation) of:
Investments ........................................................ 3,317,586
Swap contracts ..................................................... (512,544)
Forward foreign currency contracts ................................. 2,313,905
Foreign currencies ................................................. 772,477
-------------
Net change in unrealized appreciation/(depreciation) of
investments during the year ........................................ 5,891,424
-------------
Net realized and unrealized loss on investments ....................... (2,449,917)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................. $ 20,856,980
=============
Page 14 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR PERIOD
ENDED ENDED
12/31/2005 12/31/2004*
-------------- --------------
OPERATIONS:
Net investment income ........................................................................ $ 23,306,897 $ 822,392
Net realized loss on investments during the period ........................................... (8,341,341) (438,805)
Net change in unrealized appreciation/(depreciation) of investments during the period ........ 5,891,424 4,448,550
-------------- --------------
Net increase in net assets resulting from operations ......................................... 20,856,980 4,832,137
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ........................................................................ (21,704,195) --
Net realized gains ........................................................................... (870,612) --
-------------- --------------
Total distributions to shareholders .......................................................... (22,574,807) --
CAPITAL TRANSACTIONS:
Net proceeds from sale of 160,000 and 17,205,236 Common Shares, respectively ................. 3,056,000 328,620,008
Offering costs ............................................................................... (6,400) (688,210)
-------------- --------------
Total capital transactions ................................................................... 3,049,600 327,931,798
-------------- --------------
Net increase in net assets ................................................................... 1,331,773 332,763,935
NET ASSETS:
Beginning of period .......................................................................... 332,763,935 --
-------------- --------------
End of period ................................................................................ $ 334,095,708 $ 332,763,935
============== ==============
Undistributed net investment income/(accumulated net investment loss) at end of period ...... $ (6,619,201) $ 383,587
============== ==============
--------------------------------------------------------------------------------
* The Fund commenced operations on November 16, 2004.
See Notes to Financial Statements. Page 15
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets resulting from operations ........................ $ 20,856,980
Adjustments to reconcile net increase in net assets resulting
from operations to net cash used by operating activities:
Changes in assets and liabilities:
Increase in investments, at value* ....................................... (197,707,376)
Increase in net unrealized appreciation of forward foreign currency
contracts .............................................................. (2,313,905)
Increase in interest receivable .......................................... (9,480,702)
Increase in prepaid expenses ............................................. (198,727)
Decrease in net unrealized depreciation of swap contracts ................ 512,544
Increase in interest on swap contracts ................................... 121,133
Increase in interest and fees due on loan ................................ 2,100,208
Increase in investment advisory fees payable ............................. 133,407
Increase in custodian fees payable ....................................... 70,235
Increase in printing fees payable ........................................ 27,084
Increase in audit and legal fees payable ................................. 17,066
Increase in administrative fees payable .................................. 10,682
Decrease in offering costs payable ....................................... (285,742)
Decrease in accrued expenses and other liabilities ....................... (3,259)
--------------
CASH USED BY OPERATING ACTIVITIES ........................................... $ (186,140,372)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Common Shares sold (net of offering costs) ................. 3,049,600
Distributions to Common Shareholders from net investment income and
net realized gains ..................................................... (22,574,807)
Increase in outstanding loan ............................................. 145,723,561
--------------
CASH PROVIDED BY FINANCING ACTIVITIES ....................................... 126,198,354
--------------
Decrease in cash ............................................................ (59,942,018)
Cash and foreign currency at beginning of year .............................. 63,590,698
--------------
Cash and foreign currency at end of year .................................... $ 3,648,680
==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest ...................................... $ 2,981,362
--------------------------------------------------------------------------------
* Includes net change in unrealized appreciation on investments of
$3,317,586.
Page 16 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR PERIOD
ENDED ENDED
12/31/2005 12/31/2004*
---------- -----------
Net asset value, beginning of period ........................................... $ 19.34 $ 19.10
---------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................................................... 1.34 0.05
Net realized and unrealized gain/(loss) on investments ......................... (0.14) 0.23
---------- -----------
Total from investment operations ............................................... 1.20 0.28
---------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income .......................................................... (1.25) --
Net realized gains ............................................................. (0.05) --
---------- -----------
Total from distributions ....................................................... (1.30) --
---------- -----------
Common shares offering costs charged to paid-in capital ........................ (0.00)# (0.04)
---------- -----------
Net asset value, end of period ................................................. $ 19.24 $ 19.34
========== ===========
Market value, end of period ................................................... $ 16.80 $ 19.45
========== ===========
TOTAL RETURN BASED ON NET ASSET VALUE (a)+ ..................................... 6.94% 1.26%
========== ===========
TOTAL RETURN BASED ON MARKET VALUE (b)+ ........................................ (7.15)% (2.75)%
========== ===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................................... $ 334,096 $ 332,764
Ratio of total expenses to average net assets excluding interest expense ....... 1.80% 1.44%**
Ratio of total expenses to average net assets .................................. 3.37% N/A
Ratio of net investment income to average net assets ........................... 7.03% 2.47%**
Portfolio turnover rate ........................................................ 74.61% 0.00%
INDEBTEDNESS:
Loan outstanding (in 000's) .................................................... $ 145,724 N/A
Asset coverage per $1,000 of indebtedness (c) .................................. $ 3,293 N/A
--------------------------------------------------------------------------------
* The Fund commenced operations on November 16, 2004.
** Annualized.
(a) Total return based on net asset value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan, and changes in net
asset value per share and does not reflect sales load.
(b) Total return based on market value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan, and changes in
Common Share market price per share, all based on Common Share market
price per share.
(c) Calculated by subtracting the Fund's total liabilities (not including the
loan outstanding) from the Fund's total assets, and dividing by the
outstanding loan balance.
+ Total return is not annualized for periods less than one year.
# Amount represents less than $0.01 per share.
N/A Not applicable.
See Notes to Financial Statements. Page 17
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005
1. FUND DESCRIPTION
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 7, 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 in the world bond markets through a
diversified portfolio of investment grade and below-investment grade government
and corporate debt securities. There can be no assurance that the Fund's
investment objectives will be achieved.
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 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 computed based
upon the value of the Fund's portfolio and other assets. The NAV is determined
as of the close of regular session trading on the NYSE, normally 4:00 p.m.
Eastern time, on each day the NYSE is open for trading. Domestic debt securities
and foreign securities are priced using data reflecting the earlier closing of
the principal markets for those securities. The Fund calculates NAV per Common
Share by subtracting the Fund's liabilities (including accrued expenses,
dividends payable and any borrowings of the Fund) from the Fund's Managed Assets
(the value of the securities and other investments the Fund holds plus cash or
other assets, including interest accrued but not yet received minus accrued
liabilities other than the principal amount of borrowings) and dividing the
result by the total number of Common Shares outstanding.
The Fund's investments are valued at market value or, in the absence of market
value with respect to any portfolio securities, at fair value according to
procedures adopted by the Fund's Board of Trustees. A majority of the Fund's
assets are valued using market information supplied by third parties. In
addition, structured products, including currency-linked notes, credit-linked
notes as well as interest rate swaps and credit default swaps, are valued using
a pricing service or quotes provided by the selling dealer or financial
institution. 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, or if events occurring after the close of the
principal markets for particular securities (e.g., domestic debt and foreign
securities), but before the Fund values its assets, would materially affect NAV,
First Trust Advisors L.P. ("First Trust") may use a fair value method to value
the Fund's securities and 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.
B. FORWARD FOREIGN CURRENCY CONTRACTS:
Forward foreign currency contracts are agreements to exchange one currency for
another at a future date and at a specified price. The Fund may use 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 the Statement of Assets and Liabilities.
Realized and unrealized gains and losses are included in the Statement of
Operations. Risks arise from the possible inability of counterparties to meet
the terms of their contracts and from movement in currency and securities values
and interest rates. Due to these risks, the Fund could incur losses up to the
entire contract amount, which may exceed the net unrealized value shown in the
Schedule of Forward Foreign Currency Contracts.
C. 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.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on the accrual basis, including amortization of premiums and accretion of
discounts.
Page 18
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income on such securities
is not accrued until settlement date. The Fund instructs the custodian to
segregate assets of the Fund with a current value at least equal to the amount
of its when-issued purchase commitments.
D. 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 investment securities and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses which result from changes in foreign currency exchange rates have been
included in "Net change in unrealized appreciation/(depreciation) of foreign
currencies" 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 fluctuations in exchange rates between the
initial purchase trade date and subsequent sale trade date is included in "Net
realized gain/(loss) on foreign currencies" on the Statement of Operations.
E. CREDIT DEFAULT SWAPS:
The Fund has entered into credit default swap contracts where the Fund is the
"buyer" and the counterparty is the "seller". As a buyer of the credit default
swap contracts, the Fund is obligated to pay the counterparty a periodic stream
of payments over the term of the contract provided that no event of default
(e.g., grace period extension, obligation acceleration, repudiation/moratorium,
or restructuring) relating to the security occurs or until the termination of
the swap contract, whichever is first. If no event of default occurs, the Fund
will have made a series of periodic payments and recover nothing of monetary
value. If an event of default occurs, the counterparty must pay the Fund the
full notional value, or "par value," of the specified security. The amount of
the cash payment from the counterparty to the Fund is based on the difference of
the par value of the specified security that may have, through default, lost
some, most or all of its value. Credit default swap transactions are entered
into for hedging or investment purposes.
The Fund purchases credit default swap contracts in order to hedge against the
risk of a fall in the capital price, or default, of debt securities it holds.
This involves the risk that the swap may expire worthless and the credit risk
that the seller may fail to satisfy its payment obligations to the Fund in the
event of a default. The Fund may only enter into such transactions with
counterparties rated A- or higher.
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 the leverage. If the Fund recognizes a long-term capital
gain, it will be required to allocate such gain between the Common Shares and
Preferred Shares, if any, issued by the Fund in proportion to the total
dividends paid for the year. 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 income and capital gains are determined in accordance with
income tax regulations, which may differ from accounting principles generally
accepted in the United States of America. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund, timing differences and differing characterization of distributions
made by the Fund. Permanent differences incurred during the year ended December
31, 2005, resulting in book and tax accounting differences, have been
reclassified at year end to reflect a decrease in undistributed net investment
loss by $8,605,490, a decrease in accumulated net realized loss on investments
sold by $8,641,428 and a decrease in paid-in capital by $35,938. Net assets were
not affected by this reclassification.
The tax character of distributions paid during the fiscal year ended December
31, 2005 and the period ended December 31, 2004 is as follows:
Distributions paid from:
2005 2004
------------ ---------
Ordinary Income ........................ $ 22,574,807 $ --
Page 19
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005
As of December 31, 2005, the components of distributable earnings on a tax basis
were as follows:
Undistributed Ordinary Income .................................. $ 815,799
Undistributed Long-Term Capital Gains .......................... 54,849
Net Unrealized Appreciation .................................... 6,584,896
G. INCOME 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, and by 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.
H. EXPENSES:
The Fund pays all expenses directly related to its operations.
I. ORGANIZATION AND OFFERING COSTS:
Organization costs consist of costs incurred to establish the Fund and enable it
to legally do business. These costs include filing fees, listing fees, legal
services pertaining to the organization of the business and audit fees relating
to the initial registration and auditing the initial statement of assets and
liabilities, among other fees. Offering costs consist of legal fees pertaining
to the Fund's shares offered for sale, registration fees, underwriting fees, and
printing of the initial prospectus, among other fees. First Trust and Aberdeen
Asset Management Inc. have paid all organization expenses and all offering costs
of the Fund (other than sales load) that exceeded $0.04 per Common Share. The
Fund's share of Common Share offering costs, $688,210 and $6,400 in fiscal years
2004 and 2005, respectively, were recorded as a reduction of the proceeds from
the sale of Common Shares.
3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
First Trust is a limited partnership with one limited partner, Grace Partners of
DuPage L.P., and one general partner, The Charger Corporation. First Trust
serves as investment advisor to the Fund pursuant to an Investment Management
Agreement. First Trust is responsible for the ongoing monitoring of the Fund's
investment portfolio, managing the Fund's business affairs and 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.
Aberdeen Asset Management Inc. (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 an annual portfolio management fee of
0.50% of Managed Assets that is paid monthly by First Trust from its investment
advisory fee.
PFPC Inc. ("PFPC"), an indirect, majority-owned subsidiary of The PNC Financial
Services Group, Inc., serves as the Fund's Administrator and Transfer Agent in
accordance with certain fee arrangements. PFPC Trust Company, an indirect,
majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as
the Fund's Custodian in accordance with certain fee arrangements.
The Fund paid each Trustee who is not an officer or employee of First Trust or
any of its affiliates an annual retainer of $10,000 which included compensation
for all regular quarterly board meetings and regular committee meetings. No
additional meeting fees were paid in connection with regular quarterly board
meetings or regular committee meetings. Additional fees of $1,000 and $500 were
paid to non-interested Trustees for special board meetings and non-regular
committee meetings, respectively. These additional fees were shared by the funds
in the First Trust fund complex that participated in the particular meeting and
are not per fund fees. Trustees are also reimbursed for travel and out-of-pocket
expenses in connection with all meetings. Effective January 1, 2006, the
non-interested Trustees will no longer be paid additional fees of $1,000 and
$500 for special board meetings and non-regular committee meetings,
respectively.
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 year ended December
31, 2005, were $545,757,285 and $333,864,036, respectively.
As of December 31, 2005, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $14,950,632,
and the aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $8,674,630.
Page 20
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005
5. COMMON SHARES
As of December 31, 2005, 17,365,236 of $0.01 par value Common Shares were
issued. An unlimited number of Common Shares has been authorized under the
Fund's Dividend Reinvestment Plan.
COMMON SHARE TRANSACTIONS WERE AS FOLLOWS:
YEAR ENDED PERIOD ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
---------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- -------------
Proceeds from shares sold ......... 160,000 $ 3,056,000 17,205,236 $ 328,620,008
Offering Costs of Common Shares ... -- (6,400) -- (688,210)
-------- ----------- ---------- -------------
160,000 $ 3,049,600 17,205,236 $ 327,931,798
======== =========== ========== =============
6. PREFERRED SHARES OF BENEFICIAL INTEREST
The Fund's Declaration of Trust authorizes the issuance of an unlimited number
of preferred shares of beneficial interest, par value $0.01 per share (the
"Preferred Shares"), in one or more classes or series, with rights as determined
by the Board of Trustees without the approval of Common Shareholders. As of
December 31, 2005, no Preferred Shares had been issued.
7. REVOLVING LOAN AGREEMENT
On January 10, 2005, the Fund entered into a revolving loan agreement with
certain primary and secondary lenders, which provides for a credit facility to
be used as leverage for the Fund. The 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 $165,000,000. For the year ended December 31, 2005, the
average amount outstanding was $142,382,059, with a weighted average interest
rate of 3.432%. The Fund also pays a commitment fee of 0.325% per year, which is
included in "Interest and fees on outstanding loan payable" on the Statement of
Operations.
8. CONCENTRATION OF 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.
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, 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.
9. SUBSEQUENT EVENTS
On December 20, 2005, the Fund declared a dividend of $0.13 per share, which
represents a dividend from net investment income to Common Shareholders of
record January 5, 2006, payable January 17, 2006.
On January 20, 2006, the Fund declared a dividend of $0.13 per share, which
represents a dividend from net investment income to Common Shareholders of
record February 3, 2006, payable February 15, 2006.
Page 21
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FIRST TRUST/ABERDEEN GLOBAL
OPPORTUNITY INCOME FUND
We have audited the accompanying statement of assets and liabilities of First
Trust/Aberdeen Global Opportunity Income Fund (the "Fund"), including the
portfolio of investments, as of December 31, 2005, the related statements of
operations and cash flows for the year then ended and the statements of changes
in net assets and the financial highlights for the year then ended and for the
period November 16, 2004 (inception) through December 31, 2004. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2005, by correspondence with the Fund's
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund as of December 31, 2005, the results of its operations and its cash flows,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with accounting principles generally accepted in
the United States of America.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
February 14, 2006
Page 22
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005 (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 PFPC
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 PFPC Inc., as 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 the 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 the 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 American
Stock Exchange 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 (800) 331-1710, in
accordance with such reasonable requirements as the Plan Agent and 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 PFPC 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 securities 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 website located at http://www.sec.gov.
Page 23
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005 (UNAUDITED)
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("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 1-800-SEC-0330.
NYSE CERTIFICATION INFORMATION
In accordance with Section 303A-12 of the New York Stock Exchange ("NYSE")
Listed Company Manual, the Fund's President has certified to the NYSE that, as
of May 17, 2005, he was not aware of any violation by the Fund of NYSE corporate
governance listing standards. In addition, the Fund's reports to the SEC on
Forms N-CSR and N-Q contain certifications by the Fund's principal executive
officer and principal financial officer that relate to the Fund's public
disclosure in such reports and are required by Rule 30a-2 under the 1940 Act.
TAX INFORMATION
For the year ended December 31, 2005, the amount of long-term capital gain
designated by the Fund was $54,849, which is taxable at a 15% rate gain for
federal income tax purposes.
SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Joint Annual Meeting of Shareholders of Energy Income and Growth Fund, First
Trust Value Line(R) 100 Fund, First Trust/Fiduciary Asset Management Covered
Call Fund and First Trust/Aberdeen Global Opportunity Income Fund was held on
April 18, 2005. At the Annual Meeting, the Fund's Board of Trustees, consisting
of James A. Bowen, Niel B. Nielson, Thomas R. Kadlec, Richard E. Erickson and
David M. Oster, were elected to serve an additional one year-term. The number of
votes cast for James A. Bowen was 13,535,271, the number of votes withheld was
108,359 and the number of abstentions was 3,721,606. The number of votes cast
for Niel B. Nielson was 13,536,397, the number of votes withheld was 107,233 and
the number of abstentions was 3,721,606. The number of votes cast for Richard E.
Erickson was 13,549,512, the number of votes withheld was 94,118 and the number
of abstentions was 3,721,606. The number of votes cast for Thomas R. Kadlec was
13,546,021, the number of votes withheld was 97,609 and the number of
abstentions was 3,721,606. The number of votes cast for David M. Oster was
13,548,647, the number of votes withheld was 94,983 and the number of
abstentions was 3,721,606.
BY-LAW AMENDMENT
On December 12, 2005, the Board of Trustees of the Fund approved certain changes
to the By-Laws of the Fund that may have the effect of delaying or preventing a
change of control of the Fund. To receive a copy of the revised By-Laws,
investors may call the Fund at (800) 988-5891.
Page 24
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005 (UNAUDITED)
BOARD OF TRUSTEES AND OFFICERS
Information pertaining to the Trustees and officers* of the Fund is set forth
below. The statement of additional information includes additional information
about the Trustees and is available without charge, upon request, by calling
(800) 988-5891.
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, D.O.B., ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE FUND LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson, Trustee o One year term Physician; President, 24 portfolios None
D.O.B. 04/51 o 15 months served Wheaton Orthopedics; Co-
c/o First Trust Advisors L.P. owner and Co-Director,
1001 Warrenville Road Sports Med Center for
Suite 300 Fitness; Limited Partner,
Lisle, IL 60532 Gundersen Real Estate
Partnership
Thomas R. Kadlec, Trustee o One year term Vice President and Chief 24 portfolios None
D.O.B. 11/57 o 15 months served Financial Officer (1990 to
c/o First Trust Advisors L.P. present), ADM Investor
1001 Warrenville Road Services, Inc. (Futures
Suite 300 Commission Merchant);
Lisle, IL 60532 Registered Representative
(2000 to present),
Segerdahl & Company,
Inc., an NASD member
(Broker-Dealer);
President,
ADM Derivatives, Inc.
(May 2005 to present)
Niel B. Nielson, Trustee o One year term President, Covenant 24 portfolios Director of Good News
D.O.B. 03/54 o 15 months served College (June 2002 to Publisher-Crossway
c/o First Trust Advisors L.P. present); Pastor, College Books; Covenant
1001 Warrenville Road Church in Wheaton (1997 Transport Inc.
Suite 300 to June 2002)
Lisle, IL 60532
David M. Oster, Trustee o One year term Trader (self-employed) 12 portfolios None
D.O.B. 03/64 o 15 months served (1987 to present) (Options
c/o First Trust Advisors L.P. Trading and Market
1001 Warrenville Road Making)
Suite 300
Lisle, IL 60532
Page 25
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005 (UNAUDITED)
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, D.O.B., ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE FUND LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen, Trustee o One year Trustee President, First Trust 24 portfolios None
President, Chairman of the term and indefinite Advisors L.P. and First
Board and CEO officer term Trust Portfolios L.P.;
D.O.B. 09/55 o 15 months served Chairman of the Board,
1001 Warrenville Road BondWave LLC and
Suite 300 Stonebridge Advisors LLC
Lisle, IL 60532
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
Mark R. Bradley, Treasurer, o Indefinite term Chief Financial Officer, N/A N/A
Controller, Chief Financial o 15 months served Managing Director, First
Officer, Chief Accounting Trust Advisors L.P. and
Officer First Trust Portfolios L.P.;
D.O.B. 11/57 Chief Financial Officer,
1001 Warrenville Road BondWave LLC and
Suite 300 Stonebridge Advisors LLC
Lisle, IL 60532
Susan M. Brix o Indefinite term Representative, First Trust N/A N/A
Assistant Vice President o 15 months served Portfolios L.P.; Assistant
D.O.B. 01/60 Portfolio Manager, First
1001 Warrenville Road Trust Advisors L.P.
Suite 300
Lisle, IL 60532
Robert F. Carey, Vice President o Indefinite term Senior Vice President, First N/A N/A
D.O.B. 07/63 o 15 months served Trust Advisors L.P. and
1001 Warrenville Road First Trust Portfolios L.P.
Suite 300
Lisle, IL 60532
James M. Dykas o Indefinite term Vice President, First Trust N/A N/A
Assistant Treasurer o 1 month served Advisors L.P. and First
D.O.B. 01/66 Trust Portfolios L.P.
1001 Warrenville Road (January 2005 to present);
Suite 300 Executive Director, Van
Lisle, IL 60532 Kampen Asset
Management and Morgan
Stanley Investment
Management (1999-2005)
Page 26
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
DECEMBER 31, 2005 (UNAUDITED)
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
NUMBER OF OTHER
PORTFOLIOS TRUSTEESHIPS/
NAME, D.O.B., ADDRESS AND TERM OF OFFICE AND PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
POSITION(S) WITH THE FUND LENGTH OF TIME SERVED DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES - (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------
W. Scott Jardine, Secretary o Indefinite term General Counsel, First Trust N/A N/A
and Chief Compliance o 15 months served Advisors L.P. and First
Officer Trust Portfolios L.P.;
D.O.B. 05/60 Secretary, BondWave LLC
1001 Warrenville Road and Stonebridge Advisors
Suite 300 LLC
Lisle, IL 60532
Daniel J. Lindquist o Indefinite term Senior Vice President, N/A N/A
Vice President o 1 month served First Trust Advisors L.P.;
D.O.B. 02/70 Vice President, First Trust
1001 Warrenville Road Portfolios L.P. (April 2004
Suite 300 to present); Chief Operating
Lisle, IL 60532 Officer, Mina Capital
Management, LLC (January
2004-April 2004); Chief
Operating Officer,
Samaritan Asset Management
Services, Inc. (April
2000-January 2004)
Kristi A. Maher o Indefinite term Assistant General Counsel, N/A N/A
Assistant Secretary o 15 months served First Trust Advisors L.P. and
D.O.B. 12/66 First Trust Portfolios L.P.
1001 Warrenville Road (March 2004 to present);
Suite 300 Associate, Chapman and
Lisle, IL 60532 Cutler LLP (1995-2004)
Roger F. Testin o Indefinite term Senior Vice President, First N/A N/A
Vice President o 15 months served Trust Advisors L.P. and
D.O.B. 06/66 First Trust Portfolios L.P.
1001 Warrenville Road (August 2001 to present);
Suite 300 Analyst, Dolan Capital
Lisle, IL 60532 Management (1998-2001)
----------
* The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 27
This Page Left Blank Intentionally.
This Page Left Blank Intentionally.
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the registrant or a third
party.
(c) There have been no amendments, during the period covered by this report,
to a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or
a third party, and that relates to any element of the code of ethics
description.
(d) The registrant has not granted any waivers, including an implicit waiver,
from a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or
a third party, that relates to one or more of the items set forth in
paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's board of
trustees has determined that Thomas R. Kadlec is qualified to serve as an audit
committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES (REGISTRANT) -- The aggregate fees billed for each of the
last two fiscal years for professional services rendered by the principal
accountant for the audit of the Registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for such fiscal years were
$13,500 from the Registrant's inception on November 16, 2004 through December
31, 2004, and $43,000, from January 1, 2005 through December 31, 2005.
(b) AUDIT-RELATED FEES (REGISTRANT) -- The aggregate fees billed for each
of the last two fiscal years for assurance and related services by the principal
accountant that are reasonably related to the performance of the audit of the
Registrant's financial statements and are not reported under paragraph (a) of
this Item were $0 from the Registrant's inception on November 16, 2004 through
December 31, 2004, and $0, from January 1, 2005 through December 31, 2005.
AUDIT-RELATED FEES (INVESTMENT ADVISER) -- The aggregate fees billed
for each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related
to the performance of the audit of the Registrant's financial statements and are
not reported under paragraph (a) of this Item were $0.
(c) TAX FEES (REGISTRANT) -- The aggregate fees billed in each of the last
two fiscal years for professional services rendered by the principal accountant
for tax compliance, tax advice, and tax planning to the Registrant were $0 from
the Registrant's inception on November 16, 2004 through December 31, 2004, and
$4,000, from January 1, 2005 through December 31, 2005.
TAX FEES (INVESTMENT ADVISER) -- The aggregate fees billed in each
of the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning to the Registrant's
adviser were $0.
(d) ALL OTHER FEES (REGISTRANT) -- The aggregate fees billed in each of
the last two fiscal years for products and services provided by the principal
accountant to the Registrant, other than the services reported in paragraphs (a)
through (c) of this Item were $0 from the Registrant's inception November 16,
2004 through December 31, 2004, and $8,443, from January 1, 2005 through
December 31, 2005. These fees were for services related to compliance program
evaluation.
ALL OTHER FEES (INVESTMENT ADVISER) -- The aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant to the Registrant's investment adviser, other than services
reported in paragraphs (a) through (c) of this Item were $0 from the
Registrant's inception on November 16, 2004 through December 31, 2004, and
$68,619, from January 1, 2005 through December 31, 2005. These fees were for
services related to compliance program evaluation.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
Pursuant to its charter and its Audit and Non-Audit Services Pre-Approval
Policy adopted December 12, 2005, the Audit Committee (the "COMMITTEE") is
responsible for the pre-approval of all audit services and permitted non-audit
services (including the fees and terms thereof) to be performed for the
Registrant by its independent auditors. The Chairman of the Committee is
authorized to give such pre-approvals on behalf of the Committee up to $25,000
and report any such pre-approval to the full Committee.
The Committee is also responsible for the pre-approval of the independent
auditor's engagements for non-audit services with the Registrant's adviser (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the Registrant, if the engagement relates
directly to the operations and financial reporting of the Registrant, subject to
the DE MINIMIS exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditor has provided non-audit services to
the Registrant's adviser (other than any sub-adviser whose role is primarily
portfolio management and is sub-contracted with or overseen by another
investment adviser) and any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
Registrant that were not pre-approved pursuant to the DE MINIMIS exception, the
Committee will consider whether the provision of such non-audit services is
compatible with the auditor's independence.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) for the Registrant and the Registrant's investment adviser of this
Item that were approved by the audit committee pursuant to the pre-approval
exceptions included in paragraph (c)(7)(i)(C) or paragraph(C)(7)(ii) of Rule
2-01 of Regulation S-X are as follows:
(b) 0%.
(c) 0%.
(d) 0%.
(f) The percentage of hours expended on the principal accountant's
engagement to audit the Registrant's financial statements for the most recent
fiscal year that were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees was less than fifty
percent.
(g) The aggregate non-audit fees billed by the Registrant's accountant for
services rendered to the Registrant, and rendered to the Registrant's investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the Registrant from the inception of
the Registrant on November 16, 2004 through December 31, 2004, were $0 for the
Registrant and $0 for the Registrant's investment adviser, and from January 1,
2005 through December 31, 2005 were $14,526 for the Registrant and $68,619 for
the Registrant's investment adviser.
(h) Not applicable. The audit committee pre-approved all non-audit
services rendered to the Registrant's investment adviser and any entity
controlling, controlled by or under common control with the adviser that
provides ongoing services to the Registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) The registrant has a separately designated audit committee consisting of
all the independent trustees of the registrant. The members of the audit
committee are: Thomas R. Kadlec, Niel B. Nielson and Richard E. Erickson.
Effective March 6, 2006, David M. Oster resigned from his position as an
independent trustee and member of the audit committee of the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
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.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Proxy Voting Policies are attached herewith.
ABERDEEN U.S. REGISTERED ADVISERS
PROXY VOTING POLICIES AND PROCEDURES
The following are proxy voting policies and procedures ("Policies and
Procedures") adopted by affiliated investment advisers registered with the U.S.
Securities and Exchange Commission ("SEC") under the Investment Advisers Act of
1940, as amended ("Advisers Act"), that are subsidiaries of Aberdeen Asset
Management PLC ("AAM"); including, specifically, Aberdeen Asset Management Inc.,
a Delaware Corporation, ("Aberdeen FL"), Aberdeen Asset Management Asia Limited,
a Singapore Corporation ("Aberdeen Singapore"), Aberdeen Asset Management
Limited, an Australian Corporation ("Aberdeen AU"), and Aberdeen Asset Managers
(C.I.) Limited, a Channel Islands corporation ("Aberdeen Jersey") (collectively
referred to herein as "Aberdeen Advisers" and each an "Aberdeen Adviser")
(collectively with AAM, "Aberdeen"). 1 Pursuant to a Memorandum of
Understanding ("MOU"), Aberdeen Asset Managers Limited ("Aberdeen UK"), a
non-U.S. registered adviser, and Aberdeen Jersey provide advisory resources to
certain U.S. clients of Aberdeen Asia and Aberdeen AU. In addition, Aberdeen UK
provides advisory resources to certain U.S. clients of Aberdeen FL pursuant to
another MOU. Under these MOUs, the affiliates of the Aberdeen Advisers may
provide various portfolio management resources, including substantive advice on
voting proxies for certain equity securities. To the extent that Aberdeen UK and
Aberdeen Jersey provide advisory services to any clients of Aberdeen FL or to
U.S. clients of Aberdeen Singapore or Aberdeen AU, Aberdeen UK and Aberdeen
Jersey will be subject to the control and supervision of the registered adviser
and will follow these Policies and Procedures as part of providing such advisory
services. These Policies and Procedures are adopted to ensure compliance by the
Aberdeen Advisers with Rule 206(4)-6 under the Advisers Act and other applicable
fiduciary obligations under rules and regulations of the SEC and interpretations
of its staff with respect to proxies for voting securities held by client
portfolios.
Clients may consist of investment companies registered under the
Investment Company Act of 1940, as amended ("1940 Act") ("Funds" and each a
"Fund"), and other U.S. residents as well as non-U.S. registered funds or
clients. Any Aberdeen Adviser located in the United States follows these
Policies and Procedures for each of its respective clients as required under the
Advisers Act and other applicable law, unless expressly directed by a client in
writing to refrain from voting that client's proxies or to vote in accordance
with the client's proxy voting policies and procedures. Aberdeen Advisers
located outside the U.S. may provide proxy voting services to their non-U.S.
based clients in accordance with the jurisdiction in which the client is
located. Aberdeen Advisers who advise or subadvise the Funds follow both these
Policies and Procedures and the proxy voting policies and procedures adopted by
the Funds and their Boards of Directors.
----------
1 These policies and procedures address proxy voting considerations under
U.S. law and regulation and do not address the laws or requirements of
other jurisdictions.
I. DEFINITIONS
A. "Best interest of clients". Clients' best economic interests over the
long term -- that is, the common interest that all clients share in seeing the
value of a common investment increase over time. Clients may have differing
political or social interests, but their best economic interest is generally
uniform.
B. "Material conflict of interest". Circumstances when an Aberdeen Adviser
or any member of senior management, portfolio manager or portfolio analyst
knowingly does business with a particular proxy issuer or closely affiliated
entity, which may appear to create a material conflict between the interests of
the Aberdeen Adviser and the interests of its clients in how proxies of that
issuer are voted. A material conflict of interest might also exist in unusual
circumstances when Aberdeen has actual knowledge of a material business
arrangement between a particular proxy issuer or closely affiliated entity and
an affiliate of an Aberdeen Adviser.
II. GENERAL VOTING POLICIES
A. Client's Best Interest. These Policies and Procedures are designed and
implemented in a way that is reasonably expected to ensure that proxies are
voted in the best interests of clients. Proxies are voted with the aim of
furthering the best economic interests of clients, promoting high levels of
corporate governance and adequate disclosure of company policies, activities and
returns, including fair and equal treatment of stockholders.
B. Shareholder Activism. Aberdeen Advisers seek to develop relationships
with the management of portfolio companies to encourage transparency and
improvements in the treatment of employees, owners and stakeholders. Thus,
Aberdeen Advisers may engage in dialogue with the management of portfolio
companies with respect to pending proxy voting issues.
C. Case-by-Case Basis. These Policies and Procedures are guidelines. Each
vote is ultimately cast on a case-by-case basis, taking into consideration the
contractual obligations under the advisory agreement or comparable document, and
all other relevant facts and circumstances at the time of the vote. Aberdeen
Advisers may cast proxy votes in favor of management proposals or seek to change
the views of management, considering specific issues as they arise on their
merits. Aberdeen Advisers may also join with other investment managers in
seeking to submit a shareholder proposal to a company or to oppose a proposal
submitted by the company. Such action may be based on fundamental, social,
environmental or human rights grounds.
D. Individualized. These Policies and Procedures are tailored to suit
Aberdeen's advisory business and the types of securities portfolios Aberdeen
Advisers manage. To the extent that clients (E.G., investment companies,
corporations, pension plans) have
adopted their own procedures, Aberdeen Advisers may vote the same securities
differently depending upon clients' directions.
E. Material Conflicts of Interest. Material conflicts are resolved in the
best interest of clients. When a material conflict of interest between an
Aberdeen Adviser and its respective client(s) is identified, the Aberdeen
Adviser will choose among the procedures set forth in Section IV.B.2. below, to
resolve such conflict.
F. Limitations. The circumstances under which Aberdeen may take a limited
role in voting proxies, include the following:
1. No Responsibility. Aberdeen Advisers will not vote proxies for
client accounts in which the client contract specifies that Aberdeen
will not vote. Under such circumstances, the clients' custodians are
instructed to mail proxy material directly to such clients.
2. Limited Value. Aberdeen Advisers may abstain from voting a client
proxy if the effect on shareholders' economic interests or the value
of the portfolio holding is indeterminable or insignificant.
Aberdeen Advisers may also abstain from voting the proxies of
portfolio companies held in their passively managed funds. Proxies
with respect to securities that have been sold before the date of
the shareholders meeting and are no longer held by a client
generally will not be voted.
3. Unjustifiable Costs. Aberdeen may abstain from voting a client proxy
for cost reasons (E.G., non-U.S. securities).
4. Securities Lending Arrangements. If voting securities are part of a
securities lending program, Aberdeen may be unable to vote while the
securities are on loan.
5. Share Blocking. Certain jurisdictions may impose share blocking
restrictions at various times which may prevent Aberdeen from
exercising its voting authority.
6. Special Considerations. Aberdeen's responsibilities for voting
proxies are determined generally by its obligations under each
advisory contract or similar document. If a client requests in
writing that an Aberdeen Adviser vote its proxy in a manner
inconsistent with these Policies and Procedures, Aberdeen may follow
the client's direction or may request that the client vote the proxy
directly.
G. Sources of Information. Aberdeen may conduct research internally and/or
use the resources of an independent research consultant. Aberdeen may consider
legislative materials, studies of corporate governance and other proxy voting
issues, and/or analyses of shareholder and management proposals by a certain
sector of companies, E.G., Fortune 500 companies.
H. Subadvisers. To the extent that an Aberdeen Adviser may rely on
subadvisers, whether affiliated or unaffiliated, to manage any client portfolio
on a discretionary basis, the Aberdeen Adviser will delegate responsibility for
voting proxies to the subadviser.
However, such subadvisers will be required either to follow these Policies and
Procedures or to demonstrate that their proxy voting policies and procedures are
consistent with these Policies and Procedures or otherwise implemented in the
best interests of Aberdeen clients.
I. Availability of Policies and Procedures. Aberdeen Advisers will provide
clients with a copy of these Policies and Procedures, as revised from time to
time, upon request.
J. Disclosure of Vote. As disclosed in Part II of each Aberdeen Adviser's
Form ADV, a client may obtain information on how its proxies were voted by
requesting such information from its Aberdeen Adviser. Aberdeen Advisers do not
generally disclose client proxy votes to third parties, other than as required
for Funds, unless specifically requested, in writing, by the client.
III. SPECIFIC VOTING POLICIES
A. General Philosophy.
o Support existing management on votes on the financial
statements of a company and the election of the Board of
Directors;
o Vote for the acceptance of the accounts unless there are
grounds to suspect that either the accounts as presented or
audit procedures used, do not present an accurate picture of
company results; and
o Support routine issues such as the appointment of independent
auditors, allocation of income and the declaration of stock
(scrip) dividend proposals provided there is a cash
alternative.
B. Anti-takeover Measures. Aberdeen Advisers vote on anti-takeover
measures on a case-by-case basis taking into consideration such
factors as the long-term financial performance of the target company
relative to its industry competition. Key measures of performance
will include the growth rates for sales, operating income, net
income and total shareholder returns. Other factors which will be
considered include margin analysis, cash flow and debt levels.
C. Proxy Contests for Control. Aberdeen Advisers vote on proxy contests
for control on a case-by-case basis taking into consideration such
factors as long-term financial performance of the target company
relative to its industry, management's track record, background to
the proxy contest, qualifications of director nominees, evaluation
of what each side is offering shareholders as well as the likelihood
that the proposed objectives and goals can be met, and stock
ownership positions.
D. Contested Elections. Aberdeen Advisers vote on contested elections
on a case-by-case basis taking into consideration such factors as
the qualifications of all director nominees. Aberdeen Advisers also
consider the independence
of board and key committee members and the corporate governance
practices of the company.
E. Executive compensation proposals. Aberdeen Advisers consider such
proposals on a case-by-case basis taking into consideration such
factors as executive pay and spending perquisites, particularly in
conjunction with sub-par performance and employee layoffs.
F. Shareholder Proposals. Aberdeen Advisers consider such proposals on
a case-by-case basis. Aberdeen Advisers support those proposals
which will improve the company's corporate governance or business
profile at a reasonable cost, but may oppose proposals which result
in significant cost being incurred with little or no benefit to the
company or its shareholders.
IV. PROXY VOTING PROCEDURES
This section applies to each Aberdeen Adviser except to the extent
that certain procedures are identified as applicable only to a specific Aberdeen
Adviser.
A. Obtain Proxy. Registered owners of record, E.G., trustees or custodian
banks, that receive proxy materials from the issuer or its information agent,
are instructed to sign physical proxy cards in blank and forward directly to the
relevant Aberdeen Adviser's proxy administrator ("PA"). Proxies may also be
delivered electronically by custodians using proxy services such as ProxyEdge.
Each proxy received is matched to the securities to be voted.
B. Material Conflicts of Interest.
1. Identify the existence of any material conflicts of interest relating
to the securities to be voted or the issue at hand. Portfolio managers and
research analysts (Analysts") and senior management of each Aberdeen Adviser
have an affirmative duty to disclose to the relevant proxy committees any
personal conflicts such as officer or director positions held by them, their
spouses or close relatives in the portfolio company or attempts by the portfolio
company to exert influence over such person with respect to their vote.
Conflicts based on business relationships or dealings of affiliates of any
Aberdeen Adviser will only be considered to the extent that the Aberdeen Adviser
has actual knowledge of such business relationships.
2. When a material conflict of interest between an Aberdeen Adviser's
interests and its clients' interests appears to exist, the Aberdeen Adviser may
choose among the following options to eliminate such conflict: (1) vote in
accordance with these Policies and Procedures if it involves little or no
discretion; (2) vote as recommended by a third party service if the Aberdeen
Adviser utilizes such a service; (3) "echo vote" or "mirror vote" the proxies in
the same proportion as the votes of other proxy holders that are not Aberdeen
clients; (4) if possible, erect information barriers around the person or
persons making voting decisions sufficient to insulate the decision from the
conflict; (5) if practical, notify affected clients of the conflict of interest
and seek a waiver of the
conflict; or (6) if agreed upon in writing with the client, forward the proxies
to affected clients allowing them to vote their own proxies.
C. Analysts. The PA for each Aberdeen Adviser will ensure that each proxy
statement is directed to the appropriate Analyst. If a third party
recommendation service has been retained, the relevant PA will forward the proxy
statement to the Analyst with the recommendation highlighted. The Analyst will
determine whether to vote as recommended by the service provider or to recommend
an alternative and shall advise the PA. The Analyst may consult with the PA as
necessary. If the Analyst recommends voting against the third party
recommendation, he or she is responsible for documenting the reasons for such
recommendation and that no conflict of interest influenced such recommendation.
If no third party recommendation service is utilized or if no recommendation is
provided, the Analyst is responsible for documenting the rationale for his or
her vote recommendation.
D. Vote. The following describes the breakdown of responsibilities between
the PA and the Proxy Committee ("PC") of each Aberdeen Adviser in voting
portfolio securities and the extent to which the Aberdeen Advisers rely on third
party service providers.
1. Aberdeen FL
The PA for Aberdeen FL ("PA-FL"), who resides in Ft. Lauderdale, and the PA for
Aberdeen UK ("PA-UK"), which is part of the Trade Processing Department resident
in Aberdeen, Scotland, are responsible for ensuring that votes for Aberdeen FL
clients are cast and cast in accordance with these Policies and Procedures. The
PA-FL and the PA-UK are identified more specifically on Appendix A1. The PA-FL
is primarily responsible for administering proxy votes for the Phoenix funds
which are sub-advised by Aberdeen FL.
Responsibility for considering the substantive issues relating to any vote and
for deciding how shares will be voted resides with the relevant Analyst whether
located in Aberdeen FL, Aberdeen UK or Aberdeen Singapore. Under Aberdeen-FL's
MOU with Aberdeen Singapore, the relevant Analyst for Far East equity securities
will generally reside in Aberdeen Singapore.
In the event that a material conflict of interest is identified by any Analyst,
whether in Aberdeen FL, Aberdeen UK or Aberdeen Singapore, decisions on how to
vote will be referred to the Aberdeen FL proxy committee ("PC-FL/UK"). Under
Aberdeen FL's MOU with Aberdeen UK, the PC-FL/UK is headquartered in Glasgow,
Scotland, and includes the Chief Investment Officer or Deputy Chief Investment
Officer, the head of the Socially Responsible Investing ("SRI") Team and a
member of the Compliance team, who are more specifically identified on Appendix
A1. The PC-FL/UK meets as needed to consider material conflicts of interest or
any other items raising unique issues. If the PC-FL/UK determines that there is
no material conflict of interest, the vote recommendation will be forwarded to
the appropriate proxy administrator, either the PA-FL or PA-UK. If a material
conflict of interest is identified, the PC-FL/UK will follow the conflict of
interest procedures set forth in Section IV.B.2., above.
Aberdeen FL has engaged ProxyEdge, a third party service provider, to cast votes
electronically for certain clients and to maintain records of such votes
electronically. 1 Votes for some of the wrap accounts are handled manually and
hard copies of any manual votes cast are maintained in the Florida office of
Aberdeen FL. Pursuant to the MOU, Aberdeen UK votes proxies for certain U.S.
clients of Aberdeen FL. Aberdeen UK has engaged Institutional Shareholder
Services ("ISS"), a third party service provider, to provide (1) notification of
impending votes; (2) research into non-routine votes, including shareholder
resolutions; (3) voting recommendations which may be viewed on-line; and (4)
web-based voting. In the absence of any material conflict of interest, Aberdeen
FL may either vote in accordance with the ISS recommendation or decline to
follow the ISS recommendation based on its own view of the agenda item provided
that decisions to vote contrary to the ISS recommendation are documented as set
forth in Section IV.C., above. For clients on the ISS system, votes are
automatically entered in accordance with ISS recommendations unless the PA-UK
expressly changes the vote prior to the voting deadline with appropriate analyst
documentation. In the event of a material conflict of interest, Aberdeen FL will
follow the procedures outlined in Section IV.B.2, above.
2. Aberdeen Jersey, Aberdeen AU and Aberdeen Singapore
Aberdeen Jersey and Aberdeen AU are responsible for voting proxies for the
Funds. The PA for Aberdeen Jersey and Aberdeen AU ("PA-Jersey") is the Trade
Processing Department in Jersey, Channel Islands, members of which are more
specifically identified on Appendix A2. The PA-Jersey is responsible for
ensuring that votes are cast and cast in accordance with these Policies and
Procedures. The PA-Jersey uses ProxyEdge to electronically cast votes for the
Funds and to maintain electronic records of the votes cast.
Responsibility for considering the substantive issues relating to any Fund vote
and for deciding how the shares will be voted resides with relevant equity
and/or fixed income Analyst. Pursuant to the MOU among Aberdeen Jersey, Aberdeen
AU and Aberdeen UK, the relevant Analyst may be a member of the Fund portfolio
management team in London, England. In the event that a material conflict of
interest is identified, decisions on how to vote will be referred to the proxy
committee ("PC-AU") located in Aberdeen AU. The PC-AU includes the Heads of
Equity and Fixed Income Portfolio Management and the Compliance Officer, who are
more specifically identified on Appendix A2. The PC-AU meets as needed to
consider a material conflict of interest or any other items raising unique
issues. If the PC-AU determines there is no material conflict of interest, the
vote recommendation will be forwarded to the PA-Jersey to be cast. If a material
conflict of interest is identified, the PC-AU will follow the conflict of
interest procedures set forth in Section IV.B.2., above, and in the Aberdeen
Funds Proxy Voting Policy and Procedures.
----------
1 The Phoenix Funds, sub-advised by Aberdeen FL, require electronic voting
through ProxyEdge. Custodians for certain other clients also provide the
PA-FL with access to ProxyEdge.
Aberdeen Singapore currently provides advice to Aberdeen Jersey and Aberdeen AU
only with respect to fixed income securities. In the event that Aberdeen
Singapore later provides advice to either Aberdeen Jersey and Aberdeen AU with
respect to equity securities, Aberdeen Singapore may designate its own PA and
PC. At present, a member of the PC-AU already serves as an Aberdeen Singapore
Analyst and this member will serve on the Aberdeen Singapore PC with respect to
proxy voting advice rendered to Aberdeen Jersey and Aberdeen AU to the extent
such a committee may be necessary.
E. Review. Each PA is responsible for ensuring that proxy materials are
received in a timely manner and reconciled against holdings on the record date
of client accounts over which the Aberdeen Adviser has voting authority to
ensure that all shares held on the record date, and for which a voting
obligation exists, are voted.
V. DOCUMENTATION, RECORDKEEPING AND REPORTING REQUIREMENTS
A. Documentation. The Aberdeen PAs are responsible for:
Implementing and updating these Policies and Procedures;
Overseeing the proxy voting process;
Consulting with portfolio managers/analysts for the relevant
portfolio security; and
Maintaining manual proxy voting records, if any, and overseeing and
reviewing voting execution and recordkeeping by third party providers such as
ISS and ProxyEdge.
B. RecordKeeping.
1. Each Aberdeen Adviser maintains or procures the maintenance of
records of all proxies it has voted. As permitted by Rule 204-2(c), electronic
proxy statements and the record of each vote cast by each client account of
Aberdeen FL will be maintained by either ISS and Proxy Edge, depending on the
client account. Similarly, electronic proxy statements and the record of each
vote cast by each U.S. client account of Aberdeen Jersey will be maintained by
Proxy Edge. 2 Aberdeen FL shall obtain and maintain undertakings from both ISS
and Proxy Edge to provide it with copies of proxy voting records and other
documents relating to its clients' votes promptly upon request. Aberdeen Jersey
shall obtain and maintain an undertaking from Proxy Edge to provide it with
copies of proxy voting records and other documents relating to votes for its
U.S. clients promptly upon request. Aberdeen Advisers, ISS and Proxy Edge may
rely on the
----------
2 A Fund's proxy voting record must be filed with the SEC on Form N-PX. Form
N-PX must be completed and signed in the manner required, containing a
fund's proxy voting record for the most recent twelve-month period ended
June 30th (beginning August 31, 2004). If an Aberdeen Adviser delegates
this reporting responsibility to a third party service provider such as
ISS or Proxy Edge, it will ensure that the third party service provider
files Form N-PX accordingly.
SEC's EDGAR system to keep records of certain proxy statements if the proxy
statements are maintained by issuers on that system (E.G., large U.S.-based
issuers).
2. As required by Rule 204-2(c), such records will also include: (a)
a copy of the Policies and Procedures; (b) a copy of any document created by the
Aberdeen Adviser that was material to making a decision on how to vote proxies
on behalf of a client or that memorializes the basis for that decision; and (c)
each written client request for proxy voting records and the Aberdeen Adviser's
written response to any (written or oral) client request for such records.
3. Duration. Proxy voting books and records will be maintained in an
easily accessible place for a period of five years, the first two in an
appropriate office of the Aberdeen Adviser.
C. Reporting. Aberdeen FL will initially inform clients of these Policies
and Procedures and how a client may learn of the voting record for client's
securities through disclosure of its full policies and procedures in Part II of
its Form ADV. Aberdeen Jersey, Aberdeen AU and Aberdeen Singapore will initially
inform clients of these Policies and Procedures by summary disclosure in Part II
of their respective Forms ADV. Upon receipt of a client's request for more
information, Aberdeen FL, Aberdeen Jersey, Aberdeen AU and Aberdeen Singapore
will provide to the client a copy of these Policies and Procedures and/or, in
accordance with the client's stated requirements, how the client's proxies were
voted during the period requested subsequent to the adoption of these Policies
and Procedures. Such periodic reports, other than those required for the Funds,
will not be made available to third parties absent the express written request
of the client. However, to the extent that any Aberdeen Adviser may serve as a
subadviser to another adviser to a Client, such Aberdeen Adviser will be deemed
to be authorized to provide proxy voting records on such Client accounts to such
other adviser.
D. Review of Policies and Procedures. These Policies and Procedures will
be subject to review on a periodic basis as deemed appropriate by the Aberdeen
Advisers.
EFFECTIVE DATE: [JULY 1, 2003]
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Provide the disclosure as required by SEC Release 33-8458 regarding the
Portfolio Manager(s) of the registrant.
(A) ANNUAL REPORTS FOR CLOSED-END FUNDS FOR FISCAL YEARS ENDING ON OR
AFTER DECEMBER 31, 2005:
(A)(1) IDENTIFICATION OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
AND DESCRIPTION OF ROLE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBERS
As of December 31, 2005, the Fund's management team consisted
of Derek Fulton, Brett Diment, Edwin Guiterrez, Nima Tayebi, and Max
Wolman. The team operates in an open-plan environment with
collective responsibility for investment decisions and ideas.
Investment decisions are typically made by the team as a whole and
not by any one individual. By making team decisions, the team seeks
to ensure that our investment process results in consistent returns
across all portfolios with similar objectives. Aberdeen Asset
Management, Inc. ("Aberdeen"), the Fund's sub-adviser, does not
employ separate research analysts. Instead, Aberdeen's investment
managers combine the roles of 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 companies in which Aberdeen invests.
Mr. Fulton is Head of Global and Asian Bonds and has been with
Aberdeen for six years. After graduation, Mr. Fulton joined Murray
Johnstone in 1996 as a graduate trainee in Fixed Income. In 1998, he
qualified as an Associate of the Institute of Investment Management
& Research ("IIMR"). Mr. Fulton has since become a senior member of
the team with Aberdeen and is responsible for day-to-day management
of global fixed income and government portfolios. He is a member of
Aberdeen's global economics team.
Mr. Diment is Head of Emerging Market Debt and joined Aberdeen
following the acquisition of Deutsche Asset Management ("Deutsche")
in 2005. He is responsible for the day-to-day management of the
emerging market debt team and portfolios. Mr. Diment joined Deutsche
in 1991 as a member of the Fixed Income group and was Head of the
Emerging Debt team at the firm since 1999.
Mr. Guitterez serves as a Portfolio Manager of Emerging Market
Debt and joined Aberdeen following the acquisition of Deutsche in
2005. He has served previously as an economist specializing in Latin
America at LGT Asset Manager, and more recently as a portfolio
manager specializing in emerging market fixed income at INVESCO
Asset Management. Mr. Guitterez joined Deutsche Asset Management in
2000.
Mr. Tayebi is a Portfolio Manager of Emerging Market Debt and
joined Aberdeen in 2005, following the acquisition of Deutsche. He
had eight years of experience serving in the following capacities:
executive director responsible for emerging markets trading at
Millennium Global Investments; vice president at Salomon Brothers,
focusing on emerging currency and debt trading; and head of Fixed
Income research at Renaissance Capital. Mr. Tayebi joined Deutsche
in 2001 as an Emerging currency fund manager.
Mr. Wolman serves as an Assistant Fund Manager on the Global
Emerging Market Debt.and has been with Aberdeen for five years. He
is responsible for wider emerging debt analysis including external
and corporate issuers. Mr. Wolman is a member of the EM Debt
investment committee and is also responsible for the daily
implementation of the investment process. He originally specialized
in currency and domestic debt analysis after joining Aberdeen in
January 2001.
(A)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBER AND POTENTIAL CONFLICTS OF INTEREST
OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBER
The information in the table below is as of December 31, 2005.
--------------------------------------------------------------------------------------------------------
TOTAL ASSETS
NO. OF IN ACCOUNTS
TOTAL ACCOUNTS WHERE WHERE
NAME OF PORTFOLIO NO. OF ADVISORY FEE ADVISORY FEE
MANAGER OR TYPE OF ACCOUNTS IS BASED ON IS BASED ON
TEAM MEMBER ACCOUNTS MANAGED TOTAL ASSETS PERFORMANCE PERFORMANCE
----------- -------- ------- ------------ ----------- -----------
--------------------------------------------------------------------------------------------------------
Derek Fulton Registered 3 $2,916.5 0 $0
Investment
Companies:
--------------------------------------------------------------------------------------------------------
Other Pooled 6 $767.2 0 $0
Investment
Vehicles:
--------------------------------------------------------------------------------------------------------
Other Accounts: 1 $30.7 0 $0
--------------------------------------------------------------------------------------------------------
Brett Diment Registered 2 $291.4 0 $0
Investment
Companies:
--------------------------------------------------------------------------------------------------------
Other Pooled 14 $1,261.9 0 $0
Investment
Vehicles:
--------------------------------------------------------------------------------------------------------
Other Accounts: 2 $230.8 0 $0
--------------------------------------------------------------------------------------------------------
Edwin Guiterrez Registered 2 $291.4 0 $0
Investment
Companies:
--------------------------------------------------------------------------------------------------------
Other Pooled 14 $1,261.9 0 $0
Investment
Vehicles:
--------------------------------------------------------------------------------------------------------
Other Accounts: 2 $230.8 0 $0
--------------------------------------------------------------------------------------------------------
Nima Tayebi Registered 2 $291.4 0 $0
Investment
Companies:
--------------------------------------------------------------------------------------------------------
Other Pooled 14 $1,261.9 0 $0
Investment
Vehicles:
--------------------------------------------------------------------------------------------------------
Other Accounts: 2 $230.8 0 $0
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
TOTAL ASSETS
NO. OF IN ACCOUNTS
TOTAL ACCOUNTS WHERE WHERE
NAME OF PORTFOLIO NO. OF ADVISORY FEE ADVISORY FEE
MANAGER OR TYPE OF ACCOUNTS IS BASED ON IS BASED ON
TEAM MEMBER ACCOUNTS MANAGED TOTAL ASSETS PERFORMANCE PERFORMANCE
----------- -------- ------- ------------ ----------- -----------
--------------------------------------------------------------------------------------------------------
Max Wolman Registered 2 $291.4 0 $0
Investment
Companies:
----------------------------------------------------------------------------------------------------------
Other Pooled 14 $1,261.9 0 $0
Investment
Vehicles:
----------------------------------------------------------------------------------------------------------
Other Accounts: 2 $230.8 0 $0
----------------------------------------------------------------------------------------------------------
POTENTIAL CONFLICTS OF INTERESTS
Aberdeen Asset Management, Inc. ("Aberdeen") believes that
there are no material conflicts of interest in connection with a
Portfolio Manager's or Management Team Member's management of Fund
investments and investments of other accounts. Aberdeen has adopted
the CFA Institute Code of Ethics and Standards of Professional
Conduct and adherence by all employees is mandatory. All employees
of the Aberdeen are expected to avoid any employment, associations
or business activities, including personal investments that
interfere with their duties to Aberdeen, divide their loyalty or
create or appear to create a conflict of interest. Employees must
promptly report any situation or transaction involving an actual or
potential conflict of interest to the Compliance Officer.
With regards to allocation, Aberdeen has adopted Best
Execution, Soft Dollar, Order Aggregation, and Trade Allocation
Policies & Procedures designed among other things to ensure fair
treatment of all accounts. In summary, where practicable, all
account orders for the same security are combined or "batched" and
executed as block transactions in order to facilitate best execution
as well as for the purpose of negotiating more favorable brokerage
commissions. Where a block trade is executed for a number of client
accounts, the average execution price on all of the purchases and
sales that are aggregated to this purpose is used for all accounts.
If an entire block is not fully executed on the same day, an
allocation method is administered that is fair and reasonable to all
clients, generally pro rata. If it is not practicable to allocate
the executed portion of the block on a pro rata basis, allocation
may be done on a random account basis (alphabetically, numerically,
or otherwise), but any procedure administered must not operate to
consistently favor or disfavor the same client accounts. If any
method is to be used other than a pro rata method, the manner in
which the shares are allocated must be documented, disclosed and
signed off by the Compliance Officer.
(A)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBERS
As of December 31, 2005, portfolio managers and research
professionals are paid (i) base salaries, which are linked to job
function, responsibilities, experience and financial services
industry peer comparison and (ii) variable compensation, which is
linked to investment
performance (but not usually in a formulaic manner), individual
contributions to the team, adherence to the company investment
process, quality of research, effectiveness at client presentations,
the overall performance of the team/business unit and Aberdeen's
financial results. As such, a bonus is never a fixed number. The
value of assets managed by a portfolio manager may also be a
consideration but more emphasis is placed upon team performance than
individual performance. Variable compensation may include a cash
bonus incentive and participation in a variety of long-term equity
programs (usually in the form of Aberdeen equity).
Bonus and long-term incentives comprise a greater proportion
of total compensation as an investment professional's seniority and
compensation levels increase. Top performing investment
professionals earn a total compensation package that is highly
competitive, including a bonus that can be a multiple of their base
salary. The amount of equity awarded under the long-term equity
programs is generally based on the individual's total compensation
package and may comprise from 0%-40% of the total compensation
award. Certain senior investment professionals may be subject to a
mandatory deferral of a portion of their cash and equity
compensation to act as a retention tool.
As a UK listed PLC, Aberdeen Asset Management PLC, Aberdeen's
parent, has an independent Remuneration Committee that has sole
responsibility for authorizing all compensation payments to senior
employees, many of which will be investment professionals. This
committee is also mandated to agree the design of any incentive
scheme that must ultimately go for shareholder approval.
To evaluate its investment professionals, Aberdeen uses a
Performance Management Process. Objectives evaluated by the process
are related to investment performance and generally take into
account peer group and benchmark related data. The ultimate goal of
this process is to link the performance of investment professionals
with client investment objectives and to deliver investment
performance that meets clients' risk and return objectives. When
determining total compensation, Aberdeen considers a number of
quantitative and qualitative factors such as:
o Investment performance over various periods i.e. 1, 3 and 5
years versus benchmark (such as the benchmark used in the
prospectus) and appropriate peer group, taking into
consideration risk targets. Qualitative measures include
adherence to the investment process and individual
contributions to the process, among other things. In addition,
Aberdeen assesses compliance, risk management and teamwork
skills.
o Other factors, including contributions made to the investment
team as well as adherence to compliance, risk management, and
general good corporate behavior of Aberdeen, are part of a
discretionary component which gives management the ability to
reward these behaviors on a subjective basis through bonus
incentives.
In addition, Aberdeen analyzes competitive compensation levels
through the use of extensive market data surveys. Portfolio manager
compensation is reviewed and may be modified each year as
appropriate to reflect changes in the market, as well as to adjust
the factors used to determine overall compensation to promote good
sustained investment performance.
(A)(4) DISCLOSURE OF SECURITIES OWNERSHIP
The information below is as of December 31, 2005:
DOLLAR ($) RANGE
NAME OF PORTFOLIO OF FUND SHARES
MANAGER OR BENEFICIALLY
TEAM MEMBER OWNED
----------- -----
Derek Fulton $0
Brett Diment $0
Edwin Guiterrez $0
Nima Tayebi $0
Max Wolman $0
(b) Not applicable.
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.
On December 12, 2005, the Registrant's Board of Trustees adopted an
Amended Nominating and Governance Committee Charter which included some material
changes to the procedures by which shareholders may recommend nominees to the
Registrant's board of trustees as described below:
Any proposal to elect any person nominated by shareholders for election as
trustee may only be brought before an annual meeting of the Registrant if timely
written notice (the "Shareholder Notice") is provided to the secretary of the
Registrant. Unless a greater or lesser period is required under applicable law,
to be timely, the Shareholder Notice must be delivered to or mailed and received
at Registrant's address, 1001 Warrenville Road, Suite 300, Lisle, Illinois
60532, Attn: W. Scott Jardine, not less than forty-five (45) days nor more than
sixty (60) days prior to the first anniversary date of the date of the
Registrant's proxy statement released to shareholders for the prior year's
annual meeting; provided, however, if and only if the annual meeting is not
scheduled to be held within a period that commences thirty (30) days before the
first anniversary date of the annual meeting for the preceding year and ends
thirty (30) days after such anniversary date (an annual meeting date outside
such period being referred to herein as an "Other Annual Meeting Date"), such
Shareholder Notice must be given in the manner provided herein by the later of
the close of business on (i) the date forty-five (45) days prior to such Other
Annual Meeting Date or (ii) the tenth (10th) business day following the date
such Other Annual Meeting Date is first publicly announced or disclosed.
Any shareholder submitting a nomination of any person or persons (as the
case may be) for election as a trustee or trustees of the Registrant shall
deliver, as part of such Shareholder Notice: (i) a statement in writing setting
forth (A) the name, age, date of birth, business address, residence address
and nationality of the person or persons to be nominated; (B) the class or
series and number of all shares of the Registrant owned of record or
beneficially by each such person or persons, as reported to such shareholder by
such nominee(s); (C) any other information regarding each such person required
by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph
(b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") (or any successor provision thereto);
(D) any other information regarding the person or persons to be nominated that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with solicitation of proxies for election of trustees
or directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder; and (E) whether such shareholder believes
any nominee is or will be an "interested person" of the Registrant (as defined
in the Investment Company Act of 1940) and, if not an "interested person,"
information regarding each nominee that will be sufficient for the Registrant to
make such determination; and (ii) the written and signed consent of any person
to be nominated to be named as a nominee and to serve as a trustee if elected.
In addition, the trustees may require any proposed nominee to furnish such other
information as they may reasonably require or deem necessary to determine the
eligibility of such proposed nominee to serve as a trustee.
Without limiting the foregoing, any shareholder who gives a Shareholder
Notice of any matter proposed to be brought before a shareholder meeting
(whether or not involving nominees for trustees) shall deliver, as part of such
Shareholder Notice: (i) the description of and text of the proposal to be
presented; (ii) a brief written statement of the reasons why such shareholder
favors the proposal; (iii) such shareholder's name and address as they appear on
the Registrant's books; (iv) any other information relating to the shareholder
that would be required to be disclosed in a proxy statement or other filings
required to be made in connection with the solicitation of proxies with respect
to the matter(s) proposed pursuant to Section 14 of the Exchange Act; (v) the
class or series and number of all shares of the Registrant owned beneficially
and of record by such shareholder; (vi) any material interest of such
shareholder in the matter proposed (other than as a shareholder); (vii) a
representation that the shareholder intends to appear in person or by proxy at
the shareholder meeting to act on the matter(s) proposed; (viii) if the proposal
involves nominee(s) for trustees, a description of all arrangements or
understandings between the shareholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the nomination(s)
are to be made by the shareholder; and (ix) in the case of a shareholder (a
"BENEFICIAL OWNER") that holds shares entitled to vote at the meeting through a
nominee or "street name" holder of record, evidence establishing such Beneficial
Owner's indirect ownership of, and entitlement to vote, shares at the meeting of
shareholders. As used herein, shares "beneficially owned" shall mean all shares
which such person is deemed to beneficially own pursuant to Rules 13d-3 and
13d-5 under the Exchange Act.
A copy of the amended Nominating and Governance Committee Charter is
available on the Registrant's website at www.ftportfolios.com.
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) Code of ethics, or any amendment thereto, that is the subject
of disclosure required by Item 2 is attached hereto.
(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/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date MARCH 7, 2006
----------------------------------------------------------------------------
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/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date MARCH 7, 2006
----------------------------------------------------------------------------
By (Signature and Title)* /S/ MARK R. BRADLEY
-------------------------------------------------------
Mark R. Bradley, Treasurer, Controller, Chief
Financial Officer and Chief Accounting Officer
(principal financial officer)
Date MARCH 7, 2006
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* Print the name and title of each signing officer under his or her signature.