First Trust/Aberdeen Emerging Opportunity Fund (the "Fund")
(NYSE: FEO) has declared the Fund's regularly scheduled quarterly
distribution of $0.25 per share. The distribution will be payable
on June 30, 2022, to shareholders of record as of June 23, 2022.
The ex-dividend date is expected to be June 22, 2022. The quarterly
distribution information for the Fund appears below.
First Trust/Aberdeen
Emerging Opportunity Fund (FEO):
Distribution per share:
$0.25
Distribution Rate based on the June 10,
2022 NAV of $10.75:
9.30%
Distribution Rate based on the June 10,
2022 closing market price of $9.07:
11.03%
On March 8, 2022, the Fund announced that its Board of Trustees
approved a managed distribution policy for the Fund (the “Plan”) in
reliance on exemptive relief received from the Securities and
Exchange Commission which permits the Fund to make periodic
distributions of long-term capital gains more frequently than
otherwise permitted with respect to its common shares subject to
certain conditions. Under the Plan, the Fund intends to pay a
quarterly distribution in the amount of $0.25 per share, which
represents the current earnings forecast of the Fund. However, the
distribution amount per share could increase or decrease in the
future as a result of a change in actual or forecasted earnings. A
portion of this quarterly distribution may include realized capital
gains or return of capital. This may result in a reduction of the
long-term capital gain distribution necessary at year end by
distributing realized capital gains throughout the year. The annual
distribution rate is independent of the Fund’s performance during
any particular period but is expected to correlate with the Fund’s
performance over time. Accordingly, you should not draw any
conclusions about the Fund’s investment performance from the amount
of any distribution or from the terms of the Plan.
This distribution will consist of net investment income earned
by the Fund and may also consist of return of capital and/or
realized capital gains. The final determination of the source and
tax status of all distributions paid in 2022 will be made after the
end of 2022 and will be provided on Form 1099-DIV.
The Fund is a closed-end management investment company that
seeks to provide a high level of total return. The Fund seeks to
achieve its investment objective by investing at least 80% of its
managed assets in a diversified portfolio of equity and
fixed-income securities of issuers in emerging market
countries.
First Trust Advisors L.P. ("FTA") is a federally registered
investment advisor and serves as the Fund's investment advisor. FTA
and its affiliate First Trust Portfolios L.P. ("FTP"), a FINRA
registered broker-dealer, are privately-held companies that provide
a variety of investment services. FTA has collective assets under
management or supervision of approximately $203 billion as of May
31, 2022 through unit investment trusts, exchange-traded funds,
closed-end funds, mutual funds and separate managed accounts. FTA
is the supervisor of the First Trust unit investment trusts, while
FTP is the sponsor. FTP is also a distributor of mutual fund shares
and exchange-traded fund creation units. FTA and FTP are based in
Wheaton, Illinois.
abrdn Inc. (formerly Aberdeen Standard Investments Inc.)
("abrdn") serves as the Fund's investment sub-advisor. abrdn is an
indirect wholly-owned subsidiary of abrdn plc. abrdn is the brand
name for the asset management group of abrdn plc, managing
approximately $627.89 billion in assets as of December 31, 2021 for
a range of pension funds, financial institutions, investment
trusts, unit trusts, offshore funds, charities and private
clients.
Principal Risk Factors: Risks are inherent in all investing.
Certain risks applicable to the fund are identified below. The Fund
files reports, proxy statements and other information that is
available for review. The order of the below risk factors does not
indicate the significance of any particular risk factor.
Past performance is no assurance of future results. Investment
return and market value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their
original cost. There can be no assurance that the Fund's investment
objectives will be achieved. The Fund may not be appropriate for
all investors.
Securities held by a fund, as well as shares of a fund itself,
are subject to market fluctuations caused by factors such as
general economic conditions, political events, regulatory or market
developments, changes in interest rates and perceived trends in
securities prices. Shares of a fund could decline in value or
underperform other investments as a result of the risk of loss
associated with these market fluctuations. In addition, local,
regional or global events such as war, acts of terrorism, spread of
infectious diseases or other public health issues, recessions, or
other events could have a significant negative impact on a fund and
its investments. Such events may affect certain geographic regions,
countries, sectors and industries more significantly than others.
In February 2022, Russia invaded Ukraine which has caused and could
continue to cause significant market disruptions and volatility
within the markets in Russia, Europe, and the United States. The
hostilities and sanctions resulting from those hostilities could
have a significant impact on certain fund investments as well as
fund performance. The outbreak of the respiratory disease
designated as COVID-19 in December 2019 has caused significant
volatility and declines in global financial markets, which have
caused losses for investors. While the development of vaccines has
slowed the spread of the virus and allowed for the resumption of
"reasonably" normal business activity in the United States, many
countries continue to impose lockdown measures in an attempt to
slow the spread. Additionally, there is no guarantee that vaccines
will be effective against emerging variants of the disease.
Shares of closed-end investment companies such as the Fund
frequently trade at a discount from their net asset value. The Fund
cannot predict whether its common shares will trade at, below or
above net asset value.
The debt securities in which the Fund invests are subject to
certain risks, including issuer risk, reinvestment risk, prepayment
risk, credit risk, and interest rate risk. Issuer risk is the risk
that the value of fixed-income securities may decline for a number
of reasons which directly relate to the issuer. Reinvestment risk
is the risk that income from the Fund's portfolio will decline if
the Fund invests the proceeds from matured, traded or called bonds
at market interest rates that are below the Fund portfolio's
current earnings rate. Prepayment risk is the risk that, upon a
prepayment, the actual outstanding debt on which the Fund derives
interest income will be reduced. Credit risk is the risk that an
issuer of a security will be unable or unwilling to make dividend,
interest and/or principal payments when due and that the value of a
security may decline as a result. Interest rate risk is the risk
that fixed-income securities will decline in value because of
changes in market interest rates.
Asset-backed securities are subject to credit risk, extension
risk, interest rate risk, liquidity risk, prepayment risk and
valuation risk, as well as risk of default on the underlying
assets.
The value of the Fund's shares will fluctuate with changes in
the value of the equity securities in which the Fund invests.
Prices of equity securities fluctuate for several reasons.
The Fund invests in non-investment grade debt instruments,
commonly referred to as "high-yield securities". High yield
securities are subject to greater market fluctuations and risk of
loss than securities with higher ratings. Lower-quality debt tends
to be less liquid than higher-quality debt.
Credit ratings are determined by credit rating agencies and are
only the opinions of such entities. Ratings assigned by a rating
agency are not absolute standards of credit quality and do not
evaluate market risk or the liquidity of securities.
Credit default swap transactions involve greater risks than if
the Fund had invested in the reference obligation directly.
Credit linked notes are securities that are collateralized by
one or more credit default swaps on designated debt securities that
are referred to as "reference securities." The market for credit
linked notes may suddenly become illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the
prices for credit linked notes. In certain cases, a market price
for a credit linked note may not be available.
The Fund invests in equity and debt securities of non-U.S.
issuers which are subject to higher volatility than securities of
U.S. issuers. Risks may be heightened for securities of companies
located in, or with significant operations in, emerging market
countries. Financial and other reporting by companies and
government entities also may be less reliable in emerging market
countries. Shareholder claims that are available in the U.S., as
well as regulatory oversight and authority that is common in the
U.S., including for claims based on fraud, may be difficult or
impossible for shareholders of securities in emerging market
countries or for U.S. authorities to pursue. Because the Fund
invests in non-U.S. securities, you may lose money if the local
currency of a non-U.S. market depreciates against the U.S. dollar.
In addition to the risks associated with investments in non-U.S.
securities generally, the Fund is subject to certain risks
associated specifically with investments in securities of Chinese
issuers.
Forward foreign currency exchange contracts involve certain
risks, including the risk of failure of the counterparty to perform
its obligations under the contract and the risk that the use of
forward contracts may not serve as a complete hedge because of an
imperfect correlation between movements in the prices of the
contracts and the prices of the currencies hedged.
The Fund may invest from time to time a substantial amount of
its assets in issuers located in a single country or region.
Because the Fund may concentrate its investments in this manner, it
assumes the risk that economic, political and social conditions in
that country or region will have a significant impact on its
investment performance, which may result in greater losses and
volatility than if it had diversified its investments across a
greater number of countries and regions.
To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as
a reference interest rate, it is subject to LIBOR Risk. The United
Kingdom's Financial Conduct Authority, which regulates LIBOR, will
cease making LIBOR available as a reference rate over a phase-out
period that began December 31, 2021. There is no assurance that any
alternative reference rate, including the Secured Overnight
Financing Rate ("SOFR") will be similar to or produce the same
value or economic equivalence as LIBOR or that instruments using an
alternative rate will have the same volume or liquidity. The
unavailability or replacement of LIBOR may affect the value,
liquidity or return on certain fund investments and may result in
costs incurred in connection with closing out positions and
entering into new trades. Any potential effects of the transition
away from LIBOR on the fund or on certain instruments in which the
fund invests can be difficult to ascertain, and they may vary
depending on a variety of factors, and they could result in losses
to the fund.
Use of leverage can result in additional risk and cost, and can
magnify the effect of any losses.
The risks of investing in the Fund are spelled out in the
shareholder report and other regulatory filings.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA,
the Internal Revenue Code or any other regulatory framework.
Financial professionals are responsible for evaluating investment
risks independently and for exercising independent judgment in
determining whether investments are appropriate for their
clients.
The Fund’s daily closing New York Stock Exchange price and net
asset value per share as well as other information can be found at
https://www.ftportfolios.com or by calling 1-800-988-5891.
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Press Inquiries Ryan Issakainen 630-765-8689
Analyst Inquiries Jeff Margolin 630-915-6784
Broker Inquiries Sales Team 866-848-9727
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