UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21905
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First Trust/Aberdeen Emerging Opportunity Fund
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(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
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(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
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(Name and address of agent for service)
Registrant's telephone number, including area code: (630) 765-8000
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Date of fiscal year end: December 31
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Date of reporting period: September 30, 2013
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Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under
the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use
the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q 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 the
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. SCHEDULE OF INVESTMENTS. The Schedule(s) of Investments is attached
herewith.
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a)
SEPTEMBER 30, 2013 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS - 48.2%
BRAZIL - 7.5%
125,316 Banco Bradesco S.A., ADR ................................................. $ 1,739,386
22,000 Lojas Renner S.A.......................................................... 634,499
27,454 Multiplan Empreendimentos Imobiliarios S.A., Preference Shares ........... 657,395
93,000 Petroleo Brasileiro S.A., ADR ............................................ 1,555,890
66,500 Souza Cruz S.A............................................................ 795,432
58,267 Ultrapar Participacoes S.A................................................ 1,430,450
84,104 Vale S.A., ADR ........................................................... 1,312,863
21,842 Vale S.A., Preference Shares, ADR ........................................ 310,375
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8,436,290
-------------
CHILE - 0.8%
32,728 Banco Santander Chile S.A., ADR .......................................... 860,419
-------------
CHINA - 1.1%
1,070,000 PetroChina Co., Ltd., Class H ............................................ 1,180,932
-------------
HONG KONG - 5.9%
311,600 AIA Group Ltd............................................................. 1,464,409
208,500 China Mobile Ltd.......................................................... 2,329,389
202,000 Hang Lung Group Ltd....................................................... 1,078,249
640,000 Swire Pacific Ltd., B Shares ............................................. 1,485,320
89,600 Swire Properties Ltd...................................................... 251,267
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6,608,634
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HUNGARY - 0.8%
55,000 Richter Gedeon Nyrt ...................................................... 956,948
-------------
INDIA - 5.8%
20,000 GlaxoSmithKline Pharmaceuticals Ltd....................................... 788,452
13,000 Grasim Industries Ltd..................................................... 549,455
23,000 Hero Honda Motors Ltd..................................................... 738,164
78,000 Hindustan Unilever Ltd.................................................... 781,744
110,500 Housing Development Finance Corp., Ltd.................................... 1,348,928
20,000 ICICI Bank Ltd............................................................ 282,294
23,668 Infosys Technologies Ltd.................................................. 1,139,073
112,173 ITC Ltd................................................................... 609,914
7,428 UltraTech Cement Ltd...................................................... 214,671
-------------
6,452,695
-------------
INDONESIA - 1.1%
2,124,000 PT Astra International Tbk ............................................... 1,183,057
-------------
ITALY - 1.2%
28,600 Tenaris S.A., ADR ........................................................ 1,337,908
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KAZAKHSTAN - 0.0%
376 BTA Bank JSC (b).......................................................... 1
-------------
MALAYSIA - 1.0%
226,400 CIMB Group Holdings Berhad ............................................... 522,328
120,000 Public Bank Berhad ....................................................... 652,370
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1,174,698
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See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS (CONTINUED)
MEXICO - 3.6%
15,700 Fomento Economico Mexicano, S.A.B. de C.V., ADR .......................... $ 1,524,313
40,000 Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., ADR ................ 1,065,200
228,200 Grupo Financiero Banorte, S.A.B. de C.V., O Shares ....................... 1,421,902
-------------
4,011,415
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PHILIPPINES - 1.5%
1,400,000 Ayala Land, Inc........................................................... 876,206
342,672 Bank of the Philippine Islands ........................................... 758,695
-------------
1,634,901
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POLAND - 1.0%
20,000 Bank Pekao S.A............................................................ 1,143,186
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RUSSIA - 2.0%
25,500 LUKOIL, ADR .............................................................. 1,620,780
10,600 Magnit OJSC .............................................................. 654,550
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2,275,330
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SOUTH AFRICA - 2.6%
43,610 Massmart Holdings Ltd..................................................... 730,232
20,978 SABMiller PLC ............................................................ 1,072,672
119,729 Truworths International Ltd............................................... 1,073,241
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2,876,145
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SOUTH KOREA - 3.0%
3,456 E-Mart Co., Ltd........................................................... 778,237
3,200 Samsung Electronics Co., Ltd., Preference Shares ......................... 2,608,417
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3,386,654
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TAIWAN - 2.4%
210,005 Taiwan Mobile Co., Ltd.................................................... 745,782
561,954 Taiwan Semiconductor Manufacturing Co., Ltd............................... 1,910,115
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2,655,897
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THAILAND - 2.5%
161,000 PTT Exploration and Production Public Co., Ltd............................ 841,544
67,200 Siam Cement Public (The) Co., Ltd......................................... 923,785
230,600 Siam Commercial Bank Public Co., Ltd...................................... 1,091,074
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2,856,403
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TURKEY - 2.5%
134,635 Akbank TAS ............................................................... 495,870
40,444 Bim Birlesik Magazalar AS ................................................ 832,886
181,150 Haci Omer Sabanci Holding A.S............................................. 875,237
141,000 Turkiye Garanti Bankasi AS ............................................... 555,610
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2,759,603
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UNITED KINGDOM - 1.7%
19,000 BHP Billiton PLC ......................................................... 562,965
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
56,608 Standard Chartered PLC ................................................... $ 1,357,236
-------------
1,920,201
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UNITED STATES - 0.2%
3,500 Yum! Brands, Inc.......................................................... 249,865
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TOTAL COMMON STOCKS ...................................................... 53,961,182
(Cost $38,453,002) -------------
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES - 39.8%
ARMENIA - 0.6%
650,000 Republic of Armenia (USD) (d) ........... 6.00% 09/30/20 634,985
-------------
BAHRAIN - 0.2%
220,000 Bahrain Government International Bond
(USD) (d) ............................ 6.13% 08/01/23 220,550
-------------
BRAZIL - 6.4%
650,000 Banco Nacional de Desenvolvimento
Economico e Social (USD) (d) ......... 5.75% 09/26/23 652,275
13,939,000 Brazil Notas do Tesouro Nacional, Series
F (BRL) .............................. 10.00% 01/01/17 6,086,926
370,000 Brazilian Government International Bond
(BRL) ................................ 8.50% 01/05/24 151,669
180,000 Brazilian Government International Bond
(USD) ................................ 7.13% 01/20/37 212,400
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7,103,270
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COLOMBIA - 0.1%
130,000,000 Columbia Government International Bond
(COP) ................................ 7.75% 04/14/21 77,586
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COSTA RICA - 0.2%
300,000 Costa Rica Government International Bond
(USD) ................................ 4.25% 01/26/23 270,000
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CROATIA - 0.6%
600,000 Croatia Government International Bond
(USD) ................................ 6.63% 07/14/20 639,000
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DOMINICAN REPUBLIC - 0.3%
118,000 Dominican Republic International Bond
(USD) ................................ 8.63% 04/20/27 129,210
200,000 Dominican Republic International Bond
(USD) ................................ 7.50% 05/06/21 214,250
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343,460
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See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
GEORGIA - 0.3%
350,000 Georgian Oil and Gas Corp. (USD) (d)..... 6.88% 05/16/17 $ 363,125
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GHANA - 0.3%
330,000 Republic of Ghana (USD) (d) ............. 7.88% 08/07/23 321,750
-------------
HONDURAS - 0.6%
840,000 Honduras Government International Bond
(USD) (d)............................. 7.50% 03/15/24 716,100
-------------
HUNGARY - 2.3%
513,000,000 Hungary Government Bond (HUF) ........... 6.75% 11/24/17 2,495,991
30,000 Hungary Government International Bond
(USD) ................................ 4.13% 02/19/18 29,850
-------------
2,525,841
-------------
INDONESIA - 1.2%
4,000,000,000 Indonesia Treasury Bond (IDR) ........... 10.00% 07/15/17 371,416
4,500,000,000 Indonesia Treasury Bond (IDR) ........... 7.00% 05/15/27 334,082
2,000,000,000 Indonesia Treasury Bond (IDR) ........... 6.13% 05/15/28 136,296
5,500,000,000 Indonesia Treasury Bond (IDR) ........... 10.50% 08/15/30 538,379
-------------
1,380,173
-------------
IRAQ - 0.2%
280,000 Republic of Iraq (USD) .................. 5.80% 01/15/28 239,400
-------------
IVORY COAST - 0.5%
600,000 Ivory Coast Government International Bond
(USD) ................................ 5.75% 12/31/32 532,500
-------------
MEXICO - 3.4%
36,500,000 Mexican Bonos (MXN) ..................... 7.50% 06/03/27 3,058,337
4,000,000 Mexican Bonos (MXN) ..................... 7.75% 11/13/42 325,529
400,000 Mexico Government International Bond
(USD) ................................ 6.05% 01/11/40 439,400
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3,823,266
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MONGOLIA - 0.4%
490,000 Development Bank of Mongolia LLC (USD)... 5.75% 03/21/17 465,500
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NIGERIA - 2.1%
295,000,000 Nigeria Government Bond (NGN) ........... 15.10% 04/27/17 1,926,669
450,000 Nigeria Government International Bond
(USD) (d) ............................ 5.13% 07/12/18 457,875
-------------
2,384,544
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PAKISTAN - 0.1%
130,000 Pakistan Government International Bond
(USD) ................................ 6.88% 06/01/17 126,425
-------------
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
PERU - 1.8%
2,620,000 Peru Government Bond (PEN) .............. 7.84% 08/12/20 $ 1,091,359
577,000 Peruvian Government International Bond
(PEN) ................................ 5.20% 09/12/23 205,006
1,740,000 Peruvian Government International Bond
(PEN) ................................ 6.95% 08/12/31 666,011
-------------
1,962,376
-------------
ROMANIA - 0.9%
910,000 Romanian Government International Bond
(USD) ................................ 6.75% 02/07/22 1,040,995
-------------
RUSSIA - 3.0%
46,000,000 Russian Federal Bond - OFZ (RUB) ........ 7.50% 02/27/19 1,466,182
9,850,000 Russian Federal Bond - OFZ (RUB) ........ 7.00% 01/25/23 300,959
50,000,000 Russian Foreign Bond - Eurobond (RUB) ... 7.85% 03/10/18 1,602,549
-------------
3,369,690
-------------
RWANDA - 0.2%
200,000 Rwanda International Government Bond
(USD) (d) ............................ 6.63% 05/02/23 176,500
-------------
SERBIA - 2.9%
600,000 Republic of Serbia (USD) ................ 5.25% 11/21/17 598,500
850,000 Republic of Serbia (USD) ................ 7.25% 09/28/21 886,125
200,000 Republic of Serbia (USD) (d)............. 7.25% 09/28/21 208,500
137,000,000 Serbia Treasury Bills (RSD) ............. (e) 01/23/14 1,576,860
-------------
3,269,985
-------------
SOUTH AFRICA - 2.9%
500,000 Eskom Holdings SOC Ltd. (USD) (d) ....... 6.75% 08/06/23 516,350
16,970,000 South Africa Government Bond (ZAR) ...... 10.50% 12/21/26 2,036,726
3,300,000 South Africa Government Bond (ZAR) ...... 7.00% 02/28/31 282,945
400,000 South Africa Government International
Bond (USD) ........................... 5.88% 09/16/25 421,700
-------------
3,257,721
-------------
SOUTH KOREA - 0.6%
41,000,000 Export-Import Bank of Korea (INR) (d) ... 6.00% 02/27/14 641,016
-------------
TANZANIA - 0.6%
680,000 Tanzania Government International Bond
(USD) (f)............................. 6.39% 03/09/20 705,500
-------------
TURKEY - 3.0%
3,400,000 Turkey Government Bond (TRY) ............ 9.00% 01/27/16 1,704,166
1,600,000 Turkey Government Bond (TRY) ............ 6.30% 02/14/18 721,962
1,300,000 Turkey Government Bond (TRY) ............ 3.00% 02/23/22 706,182
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
TURKEY (CONTINUED)
250,000 Turkey Government International Bond
(USD) ................................ 6.25% 09/26/22 $ 269,437
-------------
3,401,747
-------------
UNITED ARAB EMIRATES - 1.2%
1,090,000 Emirate of Dubai Government International
Bonds (USD) .......................... 7.75% 10/05/20 1,295,737
-------------
URUGUAY - 1.0%
22,773,898 Uruguay Government International Bond,
Inflation Adjusted Bond (UYU) (g)..... 5.00% 09/14/18 1,129,606
-------------
VENEZUELA - 1.7%
2,150,000 Venezuela Government International Bond
(USD) ................................ 5.75% 02/26/16 1,945,750
-------------
VIETNAM - 0.2%
200,000 Vietnam Government International Bond
(USD) ................................ 6.88% 01/15/16 213,250
-------------
TOTAL FOREIGN SOVEREIGN BONDS AND NOTES .................................. 44,577,348
(Cost $46,234,994) -------------
FOREIGN CORPORATE BONDS AND NOTES (c) - 14.8%
BRAZIL - 1.2%
200,000 Banco do Estado do Rio Grande do Sul SA
(USD) (d)............................. 7.38% 02/02/22 199,500
350,000 OAS Financial Ltd. (USD) (d) ............ 8.88% 12/29/49 318,500
200,000 OAS Investments GmbH (USD) (d)........... 8.25% 10/19/19 202,500
150,000 Odebrecht Finance Ltd. (USD) ............ 7.50% 09/14/15 146,250
250,000 Odebrecht Offshore Drilling Finance Ltd.
(USD) (d) ............................ 6.75% 10/01/22 257,425
200,000 U.S.J. Acucar e Alcool S.A. (USD) ....... 9.88% 11/09/19 195,250
-------------
1,319,425
-------------
CHILE - 0.1%
200,000 SACI Falabella (USD) (d) ................ 3.75% 04/30/23 178,750
-------------
CHINA - 0.5%
200,000 COSL Finance BVI Ltd. (USD) (d).......... 3.25% 09/06/22 183,110
350,000 Longfor Properties Co., Ltd. (USD) ...... 6.88% 10/18/19 354,375
-------------
537,485
-------------
COLOMBIA - 0.3%
300,000 Ecopetrol SA (USD) ...................... 5.88% 09/18/23 312,750
-------------
COSTA RICA - 0.2%
200,000 Banco de Costa Rica (USD) (d) ........... 5.25% 08/12/18 203,510
-------------
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN CORPORATE BONDS AND NOTES (c) (CONTINUED)
DOMINICAN REPUBLIC - 0.3%
350,000 AES Andres Dominicana, Ltd. / Itabo
Dominicana, Ltd. (USD) ............... 9.50% 11/12/20 $ 371,000
-------------
EL SALVADOR - 0.4%
450,000 Telemovil Finance Co., Ltd. (USD) ....... 8.00% 10/01/17 471,375
-------------
GUATEMALA - 0.4%
400,000 Industrial Subordinated Trust (USD) ..... 8.25% 07/27/21 427,252
-------------
INDIA - 0.3%
400,000 Bharti Airtel International Netherlands
B.V. (USD) (d)........................ 5.13% 03/11/23 362,000
-------------
INDONESIA - 0.5%
150,000 Adaro Indonesia PT (USD) ................ 7.63% 10/22/19 156,862
440,000 Pertamina Persero PT (USD) (d) .......... 4.30% 05/20/23 381,568
-------------
538,430
-------------
KAZAKHSTAN - 0.6%
300,000 Kazakhstan Temir Zholy Finance B.V. (USD)
(d)................................... 6.95% 07/10/42 303,360
400,000 Zhaikmunai LLP (USD) (d)................. 7.13% 11/13/19 421,000
-------------
724,360
-------------
MEXICO - 1.9%
350,000 BBVA Bancomer S.A. (USD) (d)............. 6.75% 09/30/22 363,983
500,000 CEMEX Espana Luxembourg (USD) ........... 9.88% 04/30/19 562,500
650,000 Offshore Drilling Holding S.A. (USD) (d) 8.38% 09/20/20 659,750
160,000 Petroleos Mexicanos (USD) ............... 6.50% 06/02/41 166,620
360,000 Tenedora Nemak S.A. de C.V. (USD) (d).... 5.50% 02/28/23 341,100
-------------
2,093,953
-------------
MULTINATIONAL - 1.1%
76,200,000 European Bank For Reconstruction &
Development (INR) .................... 5.25% 02/07/14 1,191,291
-------------
NIGERIA - 0.3%
310,000 GTB Finance B.V. (USD) .................. 7.50% 05/19/16 324,725
-------------
RUSSIA - 4.5%
450,000 Alfa Bank OJSC Via Alfa Bond Issuance PLC
(USD) ................................ 7.88% 09/25/17 497,574
200,000 Alfa Bank OJSC Via Alfa Bond Issuance PLC
(USD) ................................ 7.75% 04/28/21 213,000
400,000 EuroChem Mineral & Chemical Co. OJSC via
EuroChem GI Ltd. (USD) (d)............ 5.13% 12/12/17 400,000
230,000 Evraz Group S.A. (USD) (d) .....................6.50% 04/22/20 212,607
200,000 Gazprom OAO Via Gaz Capital S.A. (USD) ........4.95% 07/19/22 193,750
400,000 Metalloinvest Finance Ltd. (USD) (d) ...........5.63% 04/17/20 388,500
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN CORPORATE BONDS AND NOTES (c) (CONTINUED)
RUSSIA (CONTINUED)
86,400,000 Russian Railways via RZD Capital PLC
(RUB) ................................ 8.30% 04/02/19 $ 2,687,876
420,000 VimpelCom Holdings B.V. (USD) (d)........ 5.95% 02/13/23 399,273
-------------
4,992,580
-------------
SOUTH AFRICA - 0.2%
220,000 Myriad International Holdings B.V. (USD)
(d) .................................. 6.00% 07/18/20 232,100
-------------
TURKEY - 0.6%
200,000 Arcelik AS (USD) (d)..................... 5.00% 04/03/23 172,750
200,000 Turkiye Sise Ve Cam Fabrikalari AS (USD)
(d) .................................. 4.25% 05/09/20 173,800
300,000 Yasar Holdings S.A. via Willow No. 2
(USD) ................................ 9.63% 10/07/15 298,125
-------------
644,675
-------------
UKRAINE - 0.8%
350,000 Metinvest B.V. (USD) .................... 8.75% 02/14/18 304,500
370,000 MHP S.A. (USD) (d)....................... 8.25% 04/02/20 296,074
360,000 Mriya Agro Holding PLC (USD) (d) ........ 9.45% 04/19/18 297,972
-------------
898,546
-------------
UNITED ARAB EMIRATES - 0.6%
600,000 Jafz Sukuk Ltd. (USD) ................... 7.00% 06/19/19 664,500
-------------
TOTAL FOREIGN CORPORATE BONDS AND NOTES .................................. 16,488,707
(Cost $17,162,531) -------------
TOTAL INVESTMENTS - 102.8% ............................................... 115,027,237
(Cost $101,850,527) (h)
OUTSTANDING LOAN - (5.2%) ................................................ (5,800,000)
NET OTHER ASSETS AND LIABILITIES - 2.4% .................................. 2,707,965
-------------
NET ASSETS - 100.0% ...................................................... $ 111,935,202
=============
---------------------------------------
(a) All of these securities within the Portfolio of Investments, except
for the BTA Bank JSC common stock, are available to serve as
collateral for the outstanding loan.
(b) Non-income producing security.
(c) Portfolio securities are included in a country based upon their
underlying credit exposure as determined by Aberdeen Asset
Management Inc., the Fund's investment sub-advisor.
(d) This security, sold within the terms of a private placement
memorandum, is exempt from registration under Rule 144A of the
Securities Act of 1933, as amended (the "1933 Act"), and may be
resold in transactions exempt from registration, normally to
qualified institutional buyers. Pursuant to procedures adopted by
the Fund's Board of Trustees, this security has been determined to
be liquid by the Fund's investment advisor. At September 30, 2013,
securities noted as such amounted to $11,858,158 or 10.59% of net
assets.
(e) Zero coupon bond.
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
(f) Floating rate security. The interest rate shown reflects the rate in
effect at September 30, 2013.
(g) Security whose principal value is adjusted in accordance with
changes to the country's Consumer Price Index. Interest is
calculated on the basis of the current adjusted principal value.
(h) Aggregate cost for financial reporting purposes, which approximates
the aggregate cost for federal income tax purposes. As of September
30, 2013, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$18,975,070 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$5,798,360.
ADR American Depositary Receipt
Currency Abbreviations
BRL Brazilian Real PEN Peruvian New Sol
COP Columbian Peso PHP Philippines Peso
GBP British Pound Sterling PLN Polish Zloty
HKD Hong Kong Dollar RSD Serbian Dinar
HUF Hungarian Forint RUB Russian Ruble
IDR Indonesian Rupiah THB Thailand Baht
INR Indian Rupee TRY Turkish Lira
KRW South Korean Won TWD Taiwan New Dollar
KZT Kazakhstan Tenge USD United States Dollar
MXN Mexican Peso UYU Uruguayan Peso
MYR Malaysian Ringgit ZAR South African Rand
NGN Nigerian Naira
---------------------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of September 30,
2013 is as follows (see Note 2A - Portfolio Valuation in the Notes to Quarterly
Portfolio of Investments):
ASSETS TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
INVESTMENTS 9/30/2013 PRICES INPUTS INPUTS
---------------------------------------------- --------------- ------------- --------------- --------------
Common Stocks*................................ $ 53,961,182 $ 53,961,182 $ -- $ --
Foreign Sovereign Bonds and Notes*............ 44,577,348 -- 44,577,348 --
Foreign Corporate Bonds and Notes*............ 16,488,707 -- 16,488,707 --
--------------- ------------- --------------- --------------
Total Investments............................. 115,027,237 53,961,182 61,066,055 --
Forward Foreign Currency Contracts**.......... 58,133 -- 58,133 --
--------------- ------------- --------------- --------------
Total......................................... $ 115,085,370 $ 53,961,182 $ 61,124,188 $ --
=============== ============= =============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2013 PRICES INPUTS INPUTS
---------------------------------------------- --------------- ------------- --------------- --------------
Forward Foreign Currency Contracts**.......... $ (311,132) $ -- $ (311,132) $ --
=============== ============= =============== ==============
* See the Portfolio of Investments for country breakout.
** See the Schedule of Forward Foreign Currency Contacts for contract and
currency detail.
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
All transfers in and out of the Levels during the period are assumed to be
transferred on the last day of the period at their current value. As of
September 30, 2013, the Fund transferred common stocks valued at $32,740,198
from Level 2 to Level 1 of the fair value hierarchy. The common stocks that
transferred from Level 2 to Level 1 did so as a result of foreign equities that
are now being valued based on quoted prices that were previously fair valued
using a factor provided by a pricing service due to the change in value between
the foreign markets' close and the New York Stock Exchange close on December 31,
2012 exceeding a certain threshold.
% OF TOTAL
INDUSTRY CLASSIFICATION INVESTMENTS
------------------------------------------------------------
Sovereigns 36.5%
Commercial Banks 9.5
Oil, Gas & Consumable Fuels 5.8
Semiconductors & Semiconductor Equipment 3.9
Real Estate Management & Development 3.8
Wireless Telecommunication Services 2.7
Food & Staples Retailing 2.6
Railroad 2.6
Metals & Mining 2.4
Beverages 2.3
Banking 1.7
Automobiles 1.7
Construction Materials 1.6
Pharmaceuticals 1.5
Industrial Other 1.4
Insurance 1.3
Tobacco 1.2
Thrifts & Mortgage Finance 1.2
Energy Equipment & Services 1.2
Chemicals 1.1
Supranationals 1.0
Government Agencies 1.0
Exploration & Production 1.0
IT Services 1.0
Specialty Retail 0.9
Transportation Infrastructure 0.9
Real Estate 0.9
Diversified Financial Services 0.8
Wireless Telecom Services 0.7
Food & Beverage 0.7
Household Products 0.7
Consumer Finance 0.6
Government Development Banks 0.6
Multiline Retail 0.5
Integrated Oils 0.4
Utilities 0.3
Pipeline 0.3
Wireline Telecom Services 0.3
Automotive 0.3
Manufactured Goods 0.3
Hotels, Restaurants & Leisure 0.2
Media Non-Cable 0.2
Oil & Gas Services 0.2
Retail Discretionary 0.1
Home Improvement 0.1
----------------------------------------------------------
Total 100.0%
=========
CURRENCY EXPOSURE % OF TOTAL
DIVERSIFICATION INVESTMENTS #
--------------------------------------------------
USD 43.6%
INR 7.2
HKD 6.8
BRL 6.3
ZAR 5.0
TRY 3.9
MXN 3.8
RUB 3.3
KRW 2.9
THB 2.5
TWD 2.3
HUF 2.0
NGN 1.7
PHP 1.4
RSD 1.4
GBP 1.2
IDR 1.1
MYR 1.0
PLN 1.0
UYU 1.0
PEN 0.5
COP 0.1
KZT 0.0 ##
-------------------------------------------------
Total 100.0%
============
# The weightings include the impact of currency forwards.
## Amount is less than 0.1%.
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2013 (UNAUDITED)
% OF TOTAL
FIXED-INCOME
CREDIT QUALITY(1) INVESTMENTS #
--------------------------------------------------
AAA 2.0%
AA- 1.0
A 0.3
A- 20.6
BBB+ 13.5
BBB 9.9
BBB- 15.0
BB+ 2.2
BB 6.0
BB- 15.7
B+ 5.0
B 5.2
B- 0.2
NR 3.4
-------------------------------------------------
Total 100.0%
============
(1) The credit quality and ratings information presented above reflects the
ratings assigned by one or more nationally recognized statistical rating
organizations (NRSROs), including Standard & Poor's Ratings Group, a
division of the McGraw-Hill Companies, Inc., Moody's Investors Service,
Inc., Fitch Ratings or a comparably rated NRSRO. For situations in which a
security is rated by more than one NRSRO and the ratings are not
equivalent, the highest ratings are used. The credit ratings shown relate
to the credit worthiness of the issuers of the underlying foreign
sovereign and foreign corporate bonds and notes in the Fund, and not to
the Fund or its shares. Credit ratings are subject to change.
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
SEPTEMBER 30, 2013 (UNAUDITED)
FORWARD FOREIGN CURRENCY CONTRACTS
---------------------------------------------------------
PURCHASE SALE
VALUE AS OF VALUE AS OF UNREALIZED
SETTLEMENT AMOUNT AMOUNT SEPTEMBER 30, SEPTEMBER 30, APPRECIATION/
DATE COUNTERPARTY PURCHASED (a) SOLD (a) 2013 2013 (DEPRECIATION)
---------- -------------- -------------------- ------------------ --------------- --------------- --------------
10/21/13 CIT ZAR 4,718,000 USD 476,021 $ 468,359 $ 476,021 $ (7,662)
12/05/13 JPM USD 2,553,112 BRL 6,153,000 2,553,112 2,734,351 (181,239)
10/21/13 JPM USD 1,083,552 HUF 245,327,000 1,083,552 1,114,074 (30,522)
12/05/13 JPM USD 1,320,157 IDR 15,525,045,000 1,320,157 1,324,640 (4,483)
10/21/13 RBS USD 370,939 MXN 4,763,000 370,939 363,174 7,765
12/05/13 JPM USD 1,412,261 PEN 4,020,000 1,412,261 1,432,083 (19,822)
12/05/13 JPM USD 2,267,581 RUB 76,549,000 2,267,581 2,334,985 (67,404)
10/21/13 GSI USD 774,881 TRY 1,519,000 774,881 749,110 25,771
10/21/13 JPM USD 76,121 TRY 152,000 76,121 74,960 1,161
10/21/13 RBS USD 529,871 TRY 1,050,000 529,871 517,818 12,053
10/21/13 HSBC USD 479,742 ZAR 4,718,000 479,742 468,359 11,383
--------------
Net unrealized appreciation (depreciation)........................................... $ (252,999)
==============
(a) Please see Portfolio of Investments for currency descriptions.
Counterparty Abbreviations:
CIT Citibank, NA
GSI Goldman Sachs International
HSBC HSBC Banking Corp.
JPM JPMorgan Chase
RBS Royal Bank of Scotland
See Notes to Quarterly Portfolio of Investments
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
SEPTEMBER 30, 2013 (UNAUDITED)
1. ORGANIZATION
First Trust/Aberdeen Emerging Opportunity Fund (the "Fund") is a diversified,
closed-end management investment company organized as a Massachusetts business
trust on May 16, 2006 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 FEO on the New York Stock
Exchange ("NYSE").
2. VALUATION AND INVESTMENT PRACTICES
A. PORTFOLIO VALUATION:
The net asset value ("NAV") of the Fund's Common Shares is determined daily as
of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time, on
each day the NYSE is open for trading. If the NYSE closes early on a valuation
day, the NAV is determined as of that time. Domestic debt securities and foreign
securities are priced using data reflecting the earlier closing of the principal
markets for those securities. The NAV per Common Share is calculated by dividing
the value of all assets of the Fund (including accrued interest and dividends),
less all liabilities (including accrued expenses, dividends declared but unpaid
and any borrowings of the Fund), by the total number of Common Shares
outstanding.
The Fund's investments are valued daily in accordance with valuation procedures
adopted by the Fund's Board of Trustees and in accordance with provisions of the
1940 Act. Market quotations and prices used to value the Fund's investments are
primarily obtained from third party pricing services. The Fund's securities will
be valued as follows:
Bond, notes and other debt securities are valued on the basis of
valuations provided by dealers who make markets in such securities or by
an independent pricing service approved by the Fund's Board of Trustees,
which may use the following valuation inputs when available:
1) benchmark yields;
2) reported trades;
3) broker/dealer quotes;
4) issuer spreads;
5) benchmark securities;
6) bids and offers; and
7) reference data including market research publications.
Common stocks and other securities listed on any national or foreign
exchange (excluding the NASDAQ(R) Stock Market LLC ("NASDAQ") and the
London Stock Exchange Alternative Investment Market ("AIM")) are valued at
the last sale price on the exchange on which they are principally traded
or, for NASDAQ and AIM securities, the official closing price. Securities
traded on more than one securities exchange are valued at the last sale
price or official closing price, as applicable, at the close of the
securities exchange representing the principal market for such securities.
Securities traded in an over-the-counter market are valued at the midpoint
between the bid and the asked price, if available, and otherwise at their
closing bid prices.
Forward foreign currency contracts are valued at the current day's
interpolated foreign exchange rate, as calculated using the current day's
spot rate, and the thirty, sixty, ninety and one-hundred eighty day
forward rates provided by an independent pricing service.
Debt securities having a remaining maturity of sixty days or less when
purchased are valued at cost adjusted for amortization of premiums and
accretion of discounts.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Fund's Board of Trustees or its
delegate at fair value. These securities generally include, but are not limited
to, restricted securities (securities which may not be publicly sold without
registration under the Securities Act of 1933, as amended) for which a pricing
service is unable to provide a market price; securities whose trading has been
formally suspended; a security whose market price is not available from a
pre-established pricing source; a security with respect to which an event has
occurred that is likely to materially affect the value of the security after the
market has closed but before the calculation of a Fund's NAV or make it
difficult or impossible to obtain a reliable market quotation; and a security
whose price, as provided by the pricing service, does not reflect the security's
"fair value." As a general principle, the current "fair value" of a security
would appear to be the amount which the owner might reasonably expect to receive
for the security upon its current sale. The use of fair value prices by a Fund
generally results in prices used by the Fund that may differ from current market
quotations or official closing prices on the applicable exchange. A variety of
factors may be considered in determining the fair value of such securities.
Fair valuation of a debt security will be based on the consideration of all
available information, including, but not limited to, the following:
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (CONTINUED)
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
SEPTEMBER 30, 2013 (UNAUDITED)
1) the fundamental business data relating to the issuer, or economic
data relating to the country of issue;
2) an evaluation of the forces which influence the market in which
these securities are purchased and sold;
3) the type, size and cost of security;
4) the financial statements of the issuer, or the financial condition
of the country of issue;
5) the credit quality and cash flow of the issuer, or country of issue,
based on the sub-advisor's or external analysis;
6) the information as to any transactions in or offers for the
security;
7) the price and extent of public trading in similar securities (or
equity securities) of the issuer/borrower, or comparable companies;
8) the coupon payments;
9) the quality, value and salability of collateral, if any, securing
the security;
10) the business prospects of the issuer, including any ability to
obtain money or resources from a parent or affiliate and an
assessment of the issuer's management (for corporate debt only);
11) the economic, political and social prospects/developments of the
country of issue and the assessment of the country's governmental
leaders/officials (for sovereign debt only);
12) the prospects for the issuer's industry, and multiples (of earnings
and/or cash flows) being paid for similar businesses in that
industry (for corporate debt only); and
13) other relevant factors.
Fair valuation of an equity security will be based on the consideration of all
available information, including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect
the value of the security.
If the equity security in question is a foreign security, the following
additional information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) closed-end fund trading of similar securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
The Fund is subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (CONTINUED)
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
SEPTEMBER 30, 2013 (UNAUDITED)
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodology used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value the Fund's investments as of September 30, 2013, is
included with the Fund's Portfolio of Investments.
B. SECURITIES TRANSACTIONS:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Securities purchased on a when-issued, delayed-delivery or forward purchase
commitment basis may have extended settlement periods. The value of the security
so purchased is subject to market fluctuations during this period. The Fund
maintains liquid assets with a current value at least equal to the amount of its
when-issued, delayed-delivery or forward purchase commitments until payment is
made. At September 30, 2013, the Fund had no when-issued, delayed-delivery or
forward purchase commitments.
C. FORWARD FOREIGN CURRENCY CONTRACTS:
The Fund is subject to foreign currency risk in the normal course of pursuing
its investment objectives. Forward foreign currency contracts are agreements to
exchange one currency for another at a future date and at a specified price. The
Fund uses forward foreign currency contracts to facilitate transactions in
foreign securities and to manage the Fund's foreign currency exposure. These
contracts are valued daily, and the Fund's net equity therein, representing
unrealized gain or loss on the contracts as measured by the difference between
the forward foreign exchange rates at the dates of entry into the contracts and
the forward rates at the reporting date, is included on the Schedule of Forward
Foreign Currency Contracts. 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 the risks, the Fund
could incur losses in excess of the net unrealized value shown on the Schedule
of Forward Foreign Currency Contracts.
For the fiscal year to date period (January 1, 2013 through September 30, 2013),
the amount of notional values of forward foreign currency contracts opened and
closed were $32,681,960 and $68,229,748, respectively.
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. 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.
ITEM 2. 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 last fiscal quarter
that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 3. EXHIBITS.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 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 Emerging Opportunity Fund
--------------------------------------------------
By (Signature and Title)* /s/ Mark R. Bradley
----------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date: November 20, 2013
----------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Mark R. Bradley
----------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date: November 20, 2013
----------------------
By (Signature and Title)* /s/ James M. Dykas
----------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
Date: November 20, 2013
----------------------
* Print the name and title of each signing officer under his or her signature.