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, 2014
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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, 2014 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS - 50.3%
BRAZIL - 6.8%
112,316 Banco Bradesco S.A., ADR.................................................. $ 1,600,503
22,000 Lojas Renner S.A.......................................................... 636,160
27,454 Multiplan Empreendimentos Imobiliarios S.A., Preference Shares............ 561,249
84,000 Petroleo Brasileiro S.A., ADR............................................. 1,191,960
73,500 Souza Cruz S.A............................................................ 591,243
56,267 Ultrapar Participacoes S.A................................................ 1,193,267
84,104 Vale S.A., ADR............................................................ 925,985
58,842 Vale S.A., Preference Shares, ADR......................................... 571,356
-------------
7,271,723
-------------
CHILE - 0.7%
32,459 Banco Santander Chile S.A., ADR........................................... 717,019
-------------
CHINA - 1.1%
960,000 PetroChina Co., Ltd., Class H............................................. 1,230,154
-------------
HONG KONG - 5.7%
280,000 AIA Group Ltd............................................................. 1,447,801
164,500 China Mobile Ltd.......................................................... 1,901,366
202,000 Hang Lung Group Ltd....................................................... 1,000,260
600,000 Swire Pacific Ltd., B Shares.............................................. 1,446,513
89,600 Swire Properties Ltd...................................................... 279,247
-------------
6,075,187
-------------
HUNGARY - 0.7%
45,000 Richter Gedeon Nyrt....................................................... 704,190
-------------
INDIA - 7.1%
13,000 Grasim Industries Ltd..................................................... 746,911
21,892 Hero MotoCorp Ltd......................................................... 1,006,532
78,000 Hindustan Unilever Ltd.................................................... 942,163
93,500 Housing Development Finance Corp., Ltd.................................... 1,597,569
20,000 ICICI Bank Ltd............................................................ 464,233
23,668 Infosys Technologies Ltd.................................................. 1,436,233
182,173 ITC Ltd................................................................... 1,091,976
7,428 UltraTech Cement Ltd...................................................... 316,514
-------------
7,602,131
-------------
INDONESIA - 1.4%
2,693,000 PT Astra International Tbk................................................ 1,558,117
-------------
ITALY - 1.3%
30,900 Tenaris S.A., ADR......................................................... 1,407,495
-------------
MALAYSIA - 1.1%
234,242 CIMB Group Holdings Berhad................................................ 501,973
120,000 Public Bank BHD........................................................... 691,358
-------------
1,193,331
-------------
MEXICO - 4.0%
16,700 Fomento Economico Mexicano, S.A.B. de C.V., ADR........................... 1,537,235
40,000 Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., ADR................. 1,412,800
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS (CONTINUED)
MEXICO (CONTINUED)
211,200 Grupo Financiero Banorte, S.A.B. de C.V., O Shares........................ $ 1,352,542
-------------
4,302,577
-------------
PHILIPPINES - 1.8%
1,400,000 Ayala Land, Inc........................................................... 1,090,301
394,359 Bank of the Philippine Islands............................................ 861,171
-------------
1,951,472
-------------
POLAND - 0.9%
17,000 Bank Pekao S.A............................................................ 997,236
-------------
PORTUGAL - 0.5%
45,692 Jeronimo Martins SGPS S.A................................................. 503,130
-------------
RUSSIA - 2.3%
29,500 LUKOIL OAO, ADR........................................................... 1,501,550
3,717 Magnit OJSC............................................................... 931,221
-------------
2,432,771
-------------
SOUTH AFRICA - 2.2%
48,610 Massmart Holdings Ltd..................................................... 528,850
20,978 SABMiller PLC............................................................. 1,165,966
119,729 Truworths International Ltd............................................... 721,064
-------------
2,415,880
-------------
SOUTH KOREA - 3.0%
3,500 E-Mart Co., Ltd........................................................... 764,511
2,870 Samsung Electronics Co., Ltd., Preference Shares.......................... 2,442,322
-------------
3,206,833
-------------
TAIWAN - 2.5%
150,005 Taiwan Mobile Co., Ltd.................................................... 455,151
561,954 Taiwan Semiconductor Manufacturing Co., Ltd............................... 2,216,817
-------------
2,671,968
-------------
THAILAND - 2.4%
79,000 PTT Exploration and Production PCL........................................ 389,822
67,700 Siam Cement Public (The) Co., Ltd......................................... 939,553
230,600 Siam Commercial Bank Public Co., Ltd...................................... 1,294,347
-------------
2,623,722
-------------
TURKEY - 2.5%
153,635 Akbank TAS................................................................ 500,744
40,444 BIM Birlesik Magazalar AS................................................. 846,525
181,150 Haci Omer Sabanci Holding AS.............................................. 762,301
160,000 Turkiye Garanti Bankasi AS................................................ 562,254
-------------
2,671,824
-------------
UNITED KINGDOM - 1.7%
26,000 BHP Billiton PLC.......................................................... 720,817
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
58,242 Standard Chartered PLC.................................................... $ 1,076,842
-------------
1,797,659
-------------
UNITED STATES - 0.6%
9,500 Yum! Brands, Inc.......................................................... 683,810
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TOTAL COMMON STOCKS....................................................... 54,018,229
(Cost $38,803,539) -------------
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES - 41.1%
ARGENTINA - 1.6%
1,300,000 Argentina Bonar Bonds (USD) ............. 7.00% 04/17/17 1,125,216
690,000 Argentina Bonar Bonds (USD) ............. 8.75% 05/07/24 601,717
-------------
1,726,933
-------------
ARMENIA - 0.8%
850,000 Republic of Armenia (USD) (b)............ 6.00% 09/30/20 884,000
-------------
BAHRAIN - 0.2%
250,000 Bahrain Government International Bond
(USD) (b) ............................ 6.00% 09/19/44 252,500
-------------
BRAZIL - 5.4%
623,520 Brazil Notas do Tesouro Nacional,
Series B, Inflation Adjusted
Bond (BRL) (c) ....................... 6.00% 08/15/20 253,813
6,559,000 Brazil Notas do Tesouro Nacional, Series
F (BRL) .............................. 10.00% 01/01/17 2,569,394
470,000 Brazil Notas do Tesouro Nacional, Series
F (BRL) .............................. 10.00% 01/01/23 171,044
8,020,000 Brazil Notas do Tesouro Nacional, Series
F (BRL) .............................. 10.00% 01/01/25 2,858,155
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5,852,406
-------------
COLOMBIA - 2.1%
833,000,000 Colombia Government International Bond
(COP) ................................ 7.75% 04/14/21 448,587
385,000,000 Colombia Government International Bond
(COP) ................................ 4.38% 03/21/23 164,743
2,677,000,000 Colombia Government International Bond
(COP) ................................ 9.85% 06/28/27 1,674,418
-------------
2,287,748
-------------
COSTA RICA - 0.3%
300,000 Costa Rica Government International Bond
(USD) ................................ 4.25% 01/26/23 278,250
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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, 2014 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
CROATIA - 1.4%
1,170,000 Croatia Government International Bond
(USD) ................................ 6.63% 07/14/20 $ 1,292,850
200,000 Croatia Government International Bond
(USD) ................................ 6.00% 01/26/24 214,250
-------------
1,507,100
-------------
DOMINICAN REPUBLIC - 0.4%
200,000 Dominican Republic International Bond
(USD) ................................ 7.50% 05/06/21 226,000
118,000 Dominican Republic International Bond
(USD) ............................... 8.63% 04/20/27 143,665
100,000 Dominican Republic International Bond
(USD) (b) ............................ 7.45% 04/30/44 108,000
-------------
477,665
-------------
GEORGIA - 0.3%
350,000 Georgian Oil and Gas Corp. JSC (USD)
(b) .................................. 6.88% 05/16/17 370,073
-------------
GHANA - 0.3%
350,000 Republic of Ghana (USD) (b).............. 8.13% 01/18/26 351,750
-------------
HONDURAS - 0.6%
630,000 Honduras Government International Bond
(USD) (b) ............................ 7.50% 03/15/24 680,400
-------------
HUNGARY - 0.6%
140,630,000 Hungary Government Bond (HUF) ........... 5.50% 06/24/25 613,006
-------------
INDONESIA - 2.3%
700,000 Indonesia Government International Bond
(USD) (b) ............................ 5.88% 01/15/24 773,500
4,000,000,000 Indonesia Treasury Bond (IDR) ........... 10.00% 07/15/17 345,519
6,900,000,000 Indonesia Treasury Bond (IDR) ........... 6.13% 05/15/28 456,291
5,500,000,000 Indonesia Treasury Bond (IDR) ........... 10.50% 08/15/30 518,380
4,230,000,000 Indonesia Treasury Bond (IDR) ........... 8.38% 03/15/34 328,877
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2,422,567
-------------
IRAQ - 0.2%
280,000 Republic of Iraq (USD) .................. 5.80% 01/15/28 252,700
-------------
IVORY COAST - 0.2%
220,000 Ivory Coast Government International Bond
(USD) ................................ 5.75% 12/31/32 210,925
-------------
MEXICO - 3.6%
3,890,000 Mexican Bonos (MXN) ..................... 6.50% 06/09/22 300,577
33,350,000 Mexican Bonos (MXN) ..................... 8.50% 11/18/38 2,945,718
5,604,656 Mexican Udibonos, Inflation Adjusted Bond
(MXN) (c) ............................ 4.50% 11/22/35 401,394
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
MEXICO (CONTINUED)
150,000 Mexico Government International Bond
(USD) ................................ 6.05% 01/11/40 $ 177,750
-------------
3,825,439
-------------
MONGOLIA - 0.9%
790,000 Development Bank of Mongolia LLC
(USD) ................................ 5.75% 03/21/17 782,100
200,000 Mongolia Government International Bond
(USD) ................................ 5.13% 12/05/22 179,000
-------------
961,100
-------------
NIGERIA - 1.1%
185,990,000 Nigeria Government Bond (NGN) ........... 15.10% 04/27/17 1,215,150
-------------
PERU - 0.7%
2,102,000 Peruvian Government International Bond
(PEN) ................................ 6.95% 08/12/31 757,127
-------------
POLAND - 0.7%
1,670,000 Poland Government Bond (PLN) ............ 4.00% 10/25/23 544,915
640,000 Poland Government Bond (PLN) ............ 5.75% 04/25/29 249,095
-------------
794,010
-------------
ROMANIA - 1.1%
700,000 Romanian Government International Bond
(USD) ................................ 6.75% 02/07/22 830,375
260,000 Romanian Government International Bond
(USD) (b) ............................ 6.13% 01/22/44 299,413
-------------
1,129,788
-------------
RUSSIA - 3.2%
118,400,000 Russian Federal Bond - OFZ (RUB) ........ 7.50% 03/15/18 2,848,167
27,470,000 Russian Federal Bond - OFZ (RUB) ........ 7.05% 01/19/28 581,368
-------------
3,429,535
-------------
RWANDA - 0.5%
200,000 Rwanda International Government Bond
(USD) (b) ............................ 6.63% 05/02/23 208,500
300,000 Rwanda International Government Bond
(USD) ................................ 6.63% 05/02/23 312,750
-------------
521,250
-------------
SENEGAL - 0.6%
380,000 Senegal Government International Bond
(USD) ................................ 8.75% 05/13/21 444,600
200,000 Senegal Government International Bond
(USD) (b) ............................ 6.25% 07/30/24 200,500
-------------
645,100
-------------
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES (CONTINUED)
SERBIA - 1.7%
400,000 Republic of Serbia (USD) ................ 5.25% 11/21/17 $ 413,000
32,300,000 Serbia Treasury Bills (RSD) ............. (d) 01/29/15 340,239
63,300,000 Serbia Treasury Bills (RSD) ............. (d) 02/26/15 663,130
40,000,000 Serbia Treasury Bonds (RSD) ............. 10.00% 01/10/15 434,161
-------------
1,850,530
-------------
SOUTH AFRICA - 2.7%
210,000 Eskom Holdings SOC Ltd. (USD) (b)........ 6.75% 08/06/23 221,288
450,000 Eskom Holdings SOC Ltd. (USD) ........... 6.75% 08/06/23 474,187
9,550,000 South Africa Government Bond (ZAR) ...... 10.50% 12/21/26 986,134
14,000,000 South Africa Government Bond (ZAR) ...... 8.00% 01/31/30 1,165,948
-------------
2,847,557
-------------
TANZANIA - 0.7%
680,000 Tanzania Government International Bond
(USD) (e) ............................ 6.33% 03/09/20 736,100
-------------
TURKEY - 2.8%
4,850,000 Turkey Government Bond (TRY) ............ 9.00% 01/27/16 2,116,036
1,600,000 Turkey Government Bond (TRY) ............ 6.30% 02/14/18 640,092
250,000 Turkey Government International Bond
(USD) ................................ 6.25% 09/26/22 275,625
-------------
3,031,753
-------------
UNITED ARAB EMIRATES - 0.9%
740,000 Emirate of Dubai Government International
Bonds (USD) .......................... 7.75% 10/05/20 925,000
-------------
URUGUAY - 1.4%
183,000 Uruguay Government International Bond
(USD) ................................ 7.63% 03/21/36 243,848
26,358,737 Uruguay Government International Bond,
Inflation Adjusted Bond (UYU) (c) .... 5.00% 09/14/18 1,146,968
1,360,820 Uruguay Government International Bond,
Inflation Adjusted Bond (UYU) (c) .... 4.25% 04/05/27 60,257
-------------
1,451,073
-------------
VENEZUELA - 1.5%
1,980,000 Venezuela Government International Bond
(USD) ................................ 12.75% 08/23/22 1,658,250
-------------
ZAMBIA - 0.3%
250,000 Zambia Government International Bond
(USD) (b) ............................ 8.50% 04/14/24 284,531
-------------
TOTAL FOREIGN SOVEREIGN BONDS AND NOTES................................... 44,231,316
(Cost $46,832,307) -------------
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN CORPORATE BONDS AND NOTES (f) - 12.2%
BANGLADESH - 0.2%
250,000 Banglalink Digital Communications Ltd.
(USD) (b) ............................ 8.63% 05/06/19 $ 264,375
-------------
BRAZIL - 1.1%
300,000 CIMPOR Financial Operations BV (USD)
(b) .................................. 5.75% 07/17/24 291,000
350,000 JBS Investments GmbH (USD) (b)........... 7.75% 10/28/20 373,625
350,000 OAS Financial Ltd. (USD) (b)............. 8.88% (g) 331,940
200,000 OAS Investments GmbH (USD) (b)........... 8.25% 10/19/19 196,742
-------------
1,193,307
-------------
CANADA - 0.6%
650,000 Uranium One Investments, Inc. (USD)
(b) .................................. 6.25% 12/13/18 604,500
-------------
CHILE - 0.3%
320,000 SACI Falabella (USD) .................... 3.75% 04/30/23 309,122
-------------
COLOMBIA - 0.2%
250,000 Pacific Rubiales Energy Corp. (USD)
(b) .................................. 5.38% 01/26/19 254,375
-------------
DOMINICAN REPUBLIC - 0.3%
350,000 AES Andres Dominicana, Ltd. / Itabo
Dominicana, Ltd. (USD) ............... 9.50% 11/12/20 375,812
-------------
EL SALVADOR - 0.3%
268,000 Telemovil Finance Co., Ltd. (USD) ....... 8.00% 10/01/17 276,375
-------------
GUATEMALA - 0.6%
200,000 Comcel Trust (USD) (b)................... 6.88% 02/06/24 211,500
400,000 Industrial Subordinated Trust (USD) ..... 8.25% 07/27/21 434,000
-------------
645,500
-------------
HONG KONG - 0.2%
200,000 MIE Holdings Corp. (USD) (b)............. 7.50% 04/25/19 204,500
-------------
INDIA - 0.2%
200,000 Bharti Airtel International Netherlands
B.V. (USD) (b) ....................... 5.13% 03/11/23 211,272
-------------
INDONESIA - 0.4%
440,000 Pertamina Persero PT (USD) (b)........... 4.30% 05/20/23 419,100
-------------
KAZAKHSTAN - 1.0%
300,000 Kazakhstan Temir Zholy Finance B.V.
(USD) (b) ............................ 6.95% 07/10/42 325,662
320,000 KazMunayGas National Co. JSC (USD) ...... 5.75% 04/30/43 301,184
400,000 Zhaikmunai LLP (USD) (b)................. 7.13% 11/13/19 421,000
-------------
1,047,846
-------------
MEXICO - 1.8%
200,000 Alfa SAB de CV (USD) (b)................. 5.25% 03/25/24 213,800
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN CORPORATE BONDS AND NOTES (f) (CONTINUED)
MEXICO (CONTINUED)
350,000 BBVA Bancomer S.A. (USD) (b)............. 6.75% 09/30/22 $ 392,875
350,000 CEMEX Espana S.A. (USD) ................. 9.88% 04/30/19 390,250
650,000 Offshore Drilling Holding S.A. (USD)
(b) .................................. 8.63% 09/20/20 690,625
250,000 Petroleos Mexicanos (USD) (b)............ 6.38% 01/23/45 283,325
-------------
1,970,875
-------------
MOZAMBIQUE - 0.7%
700,000 EMATUM Via Mozambique EMATUM Finance 2020
BV (USD) ............................. 6.31% 09/11/20 706,160
-------------
NIGERIA - 0.5%
320,000 Diamond Bank PLC (USD) (b)............... 8.75% 05/21/19 318,400
200,000 Zenith Bank PLC (USD) (b)................ 6.25% 04/22/19 200,750
-------------
519,150
-------------
PARAGUAY - 0.5%
500,000 Banco Regional SAECA (USD) (b)........... 8.13% 01/24/19 550,000
-------------
RUSSIA - 0.9%
400,000 Alfa Bank OJSC Via Alfa Bond Issuance
PLC (USD) ............................ 7.75% 04/28/21 404,040
230,000 Evraz Group S.A. (USD) (b)............... 6.50% 04/22/20 212,479
380,000 Vimpel Communications Via VIP Finance
Ireland Ltd.,OJS (USD) ............... 7.75% 02/02/21 393,300
-------------
1,009,819
-------------
TURKEY - 0.5%
200,000 Arcelik AS (USD) (b)..................... 5.00% 04/03/23 189,000
300,000 Yasar Holdings S.A. via Willow No. 2
(USD) ................................ 9.63% 10/07/15 307,440
-------------
496,440
-------------
UKRAINE - 0.3%
350,000 MHP S.A. (USD) .......................... 8.25% 04/02/20 300,195
-------------
UNITED ARAB EMIRATES - 0.6%
600,000 Jafz Sukuk Ltd. (USD) ................... 7.00% 06/19/19 690,480
-------------
UNITED KINGDOM - 0.2%
250,000 Tullow Oil PLC (USD) (b)................. 6.00% 11/01/20 251,250
-------------
VENEZUELA - 0.8%
1,050,000 Petroleos de Venezuela S.A. (USD) ....... 8.50% 11/02/17 829,500
-------------
TOTAL FOREIGN CORPORATE BONDS AND NOTES................................... 13,129,953
(Cost $12,862,169) -------------
TOTAL INVESTMENTS - 103.6%................................................ 111,379,498
(Cost $98,498,015) (h)
OUTSTANDING LOANS - (5.4%)................................................ (5,800,000)
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
NET OTHER ASSETS AND LIABILITIES - 1.8%............................... 1,897,188
-------------
NET ASSETS - 100.0%................................................... $ 107,476,686
=============
-----------------------------
(a) All of these securities are available to serve as collateral for the
outstanding loans.
(b) This security, sold within the terms of a private placement
memorandum, is exempt from registration under Rule 144A of the
Securities Act of 1933, as amended, and may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. Pursuant to procedures adopted by the Fund's
Board of Trustees, this security has been determined to be liquid by
the Fund's investment advisor. At September 30, 2014 , securities
noted as such amounted to $12,046,550 or 11.21% of net assets.
(c) 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.
(d) Zero coupon bond.
(e) Floating rate security. The interest rate shown reflects the rate in
effect at September 30, 2014.
(f) 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.
(g) Perpetual maturity.
(h) Aggregate cost for financial reporting purposes, which approximates
the aggregate cost for federal income tax purposes. As of September
30, 2014, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$19,483,112 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$6,601,629.
ADR American Depositary Receipt
Currency Abbreviations
ARS Argetine Peso NGN Nigerian Naira
BRL Brazilian Real PEN Peruvian New Sol
COP Columbian Peso PHP Philippines Peso
EUR Euro PLN Polish Zloty
GBP British Pound Sterling RSD Serbian Dinar
HKD Hong Kong Dollar RUB Russian Ruble
HUF Hungarian Forint THB Thailand Baht
IDR Indonesian Rupiah TRY Turkish Lira
INR Indian Rupee TWD Taiwan New Dollar
KRW South Korean Won USD United States Dollar
MXN Mexican Peso UYU Uruguayan Peso
MYR Malaysian Ringgit ZAR South African Rand
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of September 30,
2014 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 9/30/2014 PRICES INPUTS INPUTS
---------------------------------------------- --------------- ------------- --------------- --------------
Common Stocks*............................... $ 54,018,229 $ 54,018,229 $ -- $ --
Foreign Sovereign Bonds and Notes*............ 44,231,316 -- 44,231,316 --
Foreign Corporate Bonds and Notes*............ 13,129,953 -- 13,129,953 --
--------------- ------------- --------------- --------------
Total Investments............................. $ 111,379,498 $ 54,018,229 $ 57,361,269 $ --
Forward Foreign Currency Contracts**.......... 200,836 -- 200,836 --
Total......................................... $ 111,580,334 $ 54,018,229 $ 57,562,105 $ --
=============== ============= =============== ==============
LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
INVESTMENTS 9/30/2014 PRICES INPUTS INPUTS
---------------------------------------------- --------------- ------------- --------------- --------------
Forward Foreign Currency Contracts**.......... $ (99,753) $ -- $ (99,753) $ --
=============== ============= =============== ==============
* See the Portfolio of Investments for country breakout.
** See the Schedule of Forward Foreign Currency Contracts for contract and
currency detail.
All transfers in and out of the Levels during the period are assumed to be
transferred on the last day of the period at their current value. There were no
transfers between levels at September 30, 2014.
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
CURRENCY EXPOSURE % OF TOTAL
DIVERSIFICATION INVESTMENTS #
--------------------------------------------------
USD 36.1%
INR 8.5
BRL 6.7
HKD 6.6
ZAR 5.1
MXN 4.7
RUB 3.9
TRY 3.8
IDR 2.9
KRW 2.9
TWD 2.4
THB 2.4
COP 2.0
PLN 1.9
PHP 1.7
RSD 1.3
HUF 1.2
NGN 1.1
UYU 1.1
MYR 1.1
GBP 1.0
PEN 0.7
ARS 0.5
EUR 0.4
--------------------------------------------------
Total 100.0%
=============
# The weightings include the impact of currency forwards.
% OF TOTAL
INDUSTRY CLASSIFICATION INVESTMENTS
------------------------------------------------------------
Sovereigns 38.1%
Banking 12.6
Oil, Gas & Consumable Fuels 4.9
Consumer Products 4.8
Real Estate 4.6
Iron & Steel 3.3
Retail Consumer Staples 3.2
Retail Discretionary 2.6
Hardware 2.2
Telecom 2.1
Semiconductors 2.0
Exploration & Production 1.9
Specialty Finance 1.4
Chemicals 1.3
Insurance 1.3
Technology Services 1.3
Transportation & Logistics 1.3
Industrial Other 1.1
Financial Services 1.0
Construction Materials 1.0
Automotive 0.9
Integrated Oils 0.7
Consumer Services 0.6
Biotechnology & Pharmaceuticals 0.6
Government Agencies 0.6
Gaming, Lodging & Restaurants 0.6
Food & Beverage 0.6
Wireless Telecommunications Services 0.6
Wireline Telecommunications Services 0.4
Consumer Finance 0.4
Construction Materials Manufacturing 0.4
Power Generation 0.3
Pipeline 0.3
Railroad 0.3
Department Stores 0.3
Metals & Mining 0.2
Home Improvement 0.2
------------------------------------------------------------
Total 100.0%
===========
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
PORTFOLIO OF INVESTMENTS (a) (CONTINUED)
SEPTEMBER 30, 2014 (UNAUDITED)
% OF TOTAL
FIXED-INCOME
CREDIT QUALITY(1) INVESTMENTS
--------------------------------------------------
A 7.8%
A- 2.1
BBB+ 20.5
BBB 13.5
BBB- 11.1
BB+ 5.5
BB 6.0
BB- 8.1
B+ 10.3
B 9.5
CCC 3.5
NR 2.1
--------------------------------------------------
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, 2014 (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) 2014 2014 (DEPRECIATION)
---------- -------------- -------------------- ------------------ --------------- --------------- --------------
10/28/14 CIT ARS 5,083,000 USD 585,262 $ 575,945 $ 585,262 $ (9,317)
11/28/14 CIT BRL 1,417,000 USD 606,437 569,436 606,437 (37,001)
11/28/14 CIT INR 116,729,000 USD 1,894,066 1,865,093 1,894,066 (28,973)
10/16/14 BAR MXN 3,999,000 USD 298,203 297,401 298,203 (802)
10/16/14 CIT PLN 1,020,000 USD 312,325 307,815 312,325 (4,510)
10/16/14 CIT ZAR 8,160,000 USD 738,912 721,210 738,912 (17,702)
10/16/14 UBS ZAR 3,292,000 USD 292,407 290,959 292,407 (1,448)
11/28/14 JPM USD 2,027,529 BRL 4,743,000 2,027,529 1,906,024 121,505
10/16/14 JPM USD 1,254,194 TRY 2,721,000 1,254,194 1,189,872 64,322
10/16/14 CIT USD 611,774 ZAR 6,752,000 611,774 596,765 15,009
--------------
Net Unrealized Appreciation (Depreciation)........................................... $ 101,083
==============
(a) Please see Portfolio of Investments for currency descriptions.
Counterparty Abbreviations:
BAR Barclays Bank
CIT Citibank, NA
JPM JPMorgan Chase
UBS UBS
See Notes to Quarterly Portfolio of Investments
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
SEPTEMBER 30, 2014 (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 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 at market value or, in absence of market
value with respect to any portfolio securities, at fair value. Market value
prices represent last sale or official closing prices from a national or foreign
exchange (i.e. a regultaed market) and are primarily obtained from third party
pricing services. Fair value prices represent any prices not considered market
value prices and are either obtained from a third party pricing service or are
determined by First Trust Advisors L.P.'s (the "Advisor") Pricing Committee in
accordance with valuation procedures adopted by the Fund's Board of Trustees,
and in accordance with provisions of the 1940 Act. Investments valued by the
Advisor's Pricing Committee are footnoted as such in the footnotes to the
Portfolio of Investments. The Fund's investments are valued as follows:
Bond, notes and other debt securities are fair 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.
Debt securities having a remaining maturity of sixty days or less when
purchased are fair valued at cost adjusted for amortization of premiums
and accretion of discounts.
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 fair valued at the
mean of their most recent bid and asked price, if available, and otherwise
at their closing bid price.
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.
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 or fair value price is not available
from a pre-established pricing source; a security with respect to which an event
has occurred that is likely to materially affect the value of the security after
the market has closed but before the calculation of 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. When fair value prices are used, generally
they will differ from market quotations or official closing prices on the
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS (CONTINUED)
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND (FEO)
SEPTEMBER 30, 2014 (UNAUDITED)
applicable exchanges. A variety of factors may be considered in determining the
fair value of such securities, including, but not limited to, the following:
1) the fundamental business data relating to the issuer;
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 Aberdeen Asset Management Inc.'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 equity securities 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 securities in question are foreign securities, 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, 2014 (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, 2014, 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 or sold on a when-issued, delayed-delivery or forward
purchase commitment basis may have extended settlement periods. The value of the
security so purchased is subject to market fluctuations during this period. The
Fund maintains liquid assets with a current value at least equal to the amount
of its when-issued, delayed-delivery or forward purchase commitments until
payment is made. At September 30, 2014, 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, 2014 through September 30, 2014),
the amount of notional values of forward foreign currency contracts opened and
closed were $61,242,642 and $62,891,868, 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, 2014
--------------------
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, 2014
--------------------
By (Signature and Title)* /s/ Mark R. Bradley
----------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
Date: November 20, 2014
--------------------
* Print the name and title of each signing officer under his or her signature.