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: March 31, 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
PORTFOLIO OF INVESTMENTS (a)
MARCH 31, 2013 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS - 47.4%
BRAZIL - 7.7%
125,316 Banco Bradesco S.A., ADR ........................................... $ 2,132,885
22,000 Lojas Renner S.A. .................................................. 819,359
27,000 Multiplan Empreendimentos Imobiliarios S.A. ........................ 775,628
93,000 Petroleo Brasileiro S.A., ADR ...................................... 1,687,950
66,500 Souza Cruz S.A. .................................................... 977,056
62,267 Ultrapar Participacoes S.A. ........................................ 1,578,591
62,194 Vale S.A., ADR ..................................................... 1,075,334
33,867 Vale S.A., Preference Shares, ADR .................................. 559,822
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9,606,625
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CHILE - 0.8%
32,728 Banco Santander Chile S.A., ADR .................................... 931,766
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CHINA - 2.9%
208,500 China Mobile Ltd. (b)............................................... 2,211,439
1,070,000 PetroChina Co., Ltd., Class H (b)................................... 1,409,051
-------------
3,620,490
-------------
HONG KONG - 3.5%
311,600 AIA Group Ltd. (b).................................................. 1,370,024
202,000 Hang Lung Group Ltd. (b)............................................ 1,138,077
640,000 Swire Pacific Ltd., B Shares (b).................................... 1,561,171
89,600 Swire Properties Ltd. (b)........................................... 318,667
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4,387,939
-------------
HUNGARY - 0.6%
5,500 Richter Gedeon Nyrt (b)............................................. 769,997
-------------
INDIA - 5.7%
20,000 GlaxoSmithKline Pharmaceuticals Ltd. (b)............................ 811,685
13,000 Grasim Industries Ltd. (b).......................................... 673,677
23,000 Hero Honda Motors Ltd. (b).......................................... 653,688
80,671 Hindustan Unilever Ltd. (b)......................................... 692,995
110,500 Housing Development Finance Corp., Ltd. (b)......................... 1,683,703
20,000 ICICI Bank Ltd. (b)................................................. 388,677
23,668 Infosys Technologies Ltd. (b)....................................... 1,262,882
109,857 ITC Ltd. (b)........................................................ 625,898
7,428 UltraTech Cement Ltd. (b)........................................... 255,821
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7,049,026
-------------
INDONESIA - 1.3%
1,955,000 PT Astra International Tbk (b)...................................... 1,595,217
-------------
ITALY - 1.0%
30,600 Tenaris S.A., ADR .................................................. 1,247,868
-------------
KAZAKHSTAN - 0.0%
376 BTA Bank JSC (c).................................................... 1
-------------
MALAYSIA - 1.1%
220,000 CIMB Group Holdings Berhad (b)...................................... 544,144
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS - (CONTINUED)
MALAYSIA - (CONTINUED)
150,000 Public Bank Berhad (b).............................................. $ 790,000
-------------
1,334,144
-------------
MEXICO - 4.2%
15,700 Fomento Economico Mexicano, S.A.B. de C.V., ADR .................... 1,781,950
40,000 Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., ADR .......... 1,336,000
262,200 Grupo Financiero Banorte, S.A.B. de C.V., O Shares ................. 2,094,806
-------------
5,212,756
-------------
PHILIPPINES - 1.8%
1,550,000 Ayala Land, Inc. (b)................................................ 1,244,543
370,572 Bank of the Philippine Islands (b).................................. 997,216
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2,241,759
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POLAND - 0.8%
20,000 Bank Pekao S.A. (b)................................................. 966,000
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RUSSIA - 1.6%
25,500 LUKOIL, ADR ........................................................ 1,644,750
7,000 Magnit OJSC (b)..................................................... 316,930
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1,961,680
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SOUTH AFRICA - 2.6%
43,610 Massmart Holdings Ltd. (b).......................................... 903,553
20,978 SABMiller PLC (b)................................................... 1,107,457
119,729 Truworths International Ltd. (b).................................... 1,174,460
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3,185,470
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SOUTH KOREA - 2.7%
2,756 E-Mart Co., Ltd. (b)................................................ 545,009
3,500 Samsung Electronics Co., Ltd., Preference Shares (b)................ 2,740,540
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3,285,549
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TAIWAN - 2.2%
210,005 Taiwan Mobile Co., Ltd. (b)......................................... 710,736
593,954 Taiwan Semiconductor Manufacturing Co., Ltd. (b).................... 1,989,304
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2,700,040
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THAILAND - 2.7%
161,000 PTT Exploration and Production Public Co., Ltd. (b)................. 819,485
70,200 Siam Cement Public (The) Co., Ltd. (b).............................. 1,163,365
230,600 Siam Commercial Bank Public Co., Ltd. (b)........................... 1,402,403
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3,385,253
-------------
TURKEY - 2.6%
87,635 Akbank TAS (b)...................................................... 460,465
20,222 Bim Birlesik Magazalar AS (b)....................................... 985,663
181,150 Haci Omer Sabanci Holding AS (b).................................... 1,072,361
141,000 Turkiye Garanti Bankasi AS (b)...................................... 748,741
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3,267,230
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See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
SHARES DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
COMMON STOCKS - (CONTINUED)
UNITED KINGDOM - 1.6%
19,000 BHP Billiton PLC (b)................................................ $ 556,190
56,608 Standard Chartered PLC (b).......................................... 1,469,897
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2,026,087
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TOTAL COMMON STOCKS ................................................ 58,774,897
(Cost $37,824,710) -------------
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES - 39.7%
ARGENTINA - 0.4%
470,000 Republic of Argentina (USD) ........... 7.00% 09/12/13 465,862
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BRAZIL - 4.3%
9,689,000 Brazil Notas do Tesouro Nacional Series F
(BRL) ............................. 10.00% 01/01/17 4,907,628
400,000 Republic of Brazil (USD) .............. 5.63% 01/07/41 470,000
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5,377,628
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COSTA RICA - 0.2%
300,000 Republic of Costa Rica (USD) .......... 4.25% 01/26/23 301,050
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CROATIA - 0.5%
600,000 Croatia Government International Bond
(USD) ............................. 6.63% 07/14/20 655,500
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DOMINICAN REPUBLIC - 0.3%
200,000 Dominican Republic (USD) .............. 7.50% 05/06/21 225,100
118,000 Dominican Republic (USD) .............. 8.63% 04/20/27 145,140
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370,240
-------------
GEORGIA - 0.3%
350,000 Georgian Oil and Gas Corp. (USD) (e)... 6.88% 05/16/17 368,095
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HONDURAS - 0.7%
840,000 Honduras Government International Bond
(USD) (e).......................... 7.50% 03/15/24 847,140
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HUNGARY - 3.2%
40,000,000 Hungary Government Bond (HUF) ......... 6.75% 08/22/14 173,506
663,000,000 Hungary Government Bond (HUF) ......... 6.75% 11/24/17 2,944,692
820,000 Hungary Government Bond (USD) ......... 4.13% 02/19/18 787,200
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3,905,398
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INDONESIA - 1.0%
4,000,000,000 Indonesian Government Bond (IDR) ...... 10.00% 07/15/17 491,694
5,500,000,000 Indonesian Government Bond (IDR) ...... 10.50% 08/15/30 807,653
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1,299,347
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See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES - (CONTINUED)
IVORY COAST - 0.6%
800,000 Ivory Coast Government Bond (USD) ..... 5.75% 12/31/32 $ 746,000
-------------
LATVIA - 0.5%
700,000 Republic of Latvia (USD) (e)........... 2.75% 01/12/20 676,550
-------------
MALAYSIA - 1.4%
1,400,000 Malaysia Government Bond (MYR) ........ 3.21% 05/31/13 452,232
3,900,000 Malaysia Government Bond (MYR) ........ 4.01% 09/15/17 1,303,940
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1,756,172
-------------
MEXICO - 3.0%
36,500,000 Mexican Bonos Desarr Fixed Rate Bond
(MXN) ............................. 7.50% 06/03/27 3,587,635
100,000 United Mexican States (USD) ........... 6.05% 01/11/40 124,250
-------------
3,711,885
-------------
MONGOLIA - 0.4%
300,000 Mongolia Government International Bond
(USD) ............................. 4.13% 01/05/18 291,000
200,000 Mongolia Government International Bond
(USD) ............................. 5.13% 12/05/22 187,500
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478,500
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NIGERIA - 1.7%
295,000,000 Nigeria Government Bond (NGN) ......... 15.10% 04/27/17 2,124,447
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PAKISTAN - 0.8%
210,000 Islamic Republic of Pakistan (USD) .... 7.13% 03/31/16 189,000
850,000 Islamic Republic of Pakistan (USD) .... 6.88% 06/01/17 745,875
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934,875
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PERU - 1.1%
2,900,000 Peruvian Government Bond (PEN) ........ 7.84% 08/12/20 1,413,498
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QATAR - 0.7%
690,000 State of Qatar (USD) .................. 5.25% 01/20/20 807,645
-------------
ROMANIA - 1.2%
1,200,000 Romania Government Bond (RON) ......... 5.75% 01/27/16 351,742
1,020,000 Romania Government International Bond
(USD) ............................. 6.75% 02/07/22 1,190,850
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1,542,592
-------------
RUSSIA - 1.4%
50,000,000 Russian Foreign Bond (RUB) ............ 7.85% 03/10/18 1,719,306
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SERBIA - 2.8%
200,000 Republic of Serbia (USD) .............. 5.25% 11/21/17 207,000
400,000 Republic of Serbia (USD) (e)........... 4.88% 02/25/20 396,400
850,000 Republic of Serbia (USD) .............. 7.25% 09/28/21 944,563
420,000 Republic of Serbia (USD) (e)........... 7.25% 09/28/21 466,725
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN SOVEREIGN BONDS AND NOTES - (CONTINUED)
SERBIA - (CONTINUED)
137,000,000 Serbia Treasury Bills (RSD) ........... (f) 01/23/14 $ 1,448,149
-------------
3,462,837
-------------
SOUTH AFRICA - 3.4%
5,300,000 Republic of South Africa (ZAR) ........ 13.50% 09/15/15 680,709
5,350,000 Republic of South Africa (ZAR) ........ 8.25% 09/15/17 634,015
16,970,000 Republic of South Africa (ZAR) ........ 10.50% 12/21/26 2,338,102
6,000,000 Republic of South Africa (ZAR) ........ 7.00% 02/28/31 597,796
-------------
4,250,622
-------------
TANZANIA - 0.4%
430,000 Tanzania Government International Bond
(USD) (g).......................... 6.45% 03/08/20 455,800
-------------
TURKEY - 3.6%
550,000 Republic of Turkey (USD) .............. 6.25% 09/26/22 653,125
3,400,000 Turkey Government Bond (TRY) .......... 9.00% 01/27/16 2,008,843
2,600,000 Turkey Government Bond (TRY) .......... 3.00% 02/23/22 1,773,788
-------------
4,435,756
-------------
UNITED ARAB EMIRATES - 1.3%
1,300,000 Dubai Government International Bond (USD) 7.75% 10/05/20 1,608,750
-------------
URUGUAY - 1.5%
22,854,630 Republica Orient Uruguay, Inflation
Adjusted Bond (UYU) (h)............ 5.00% 09/14/18 1,425,417
5,848,209 Republica Orient Uruguay, Inflation
Adjusted Bond (UYU) (h)............ 4.25% 04/05/27 383,364
-------------
1,808,781
-------------
VENEZUELA - 2.8%
2,150,000 Republic of Venezuela (USD) ........... 5.75% 02/26/16 2,037,125
1,470,000 Republic of Venezuela (USD) ........... 7.75% 10/13/19 1,381,800
-------------
3,418,925
-------------
VIETNAM - 0.2%
200,000 Socialist Republic of Vietnam (USD) ... 6.88% 01/15/16 222,500
-------------
TOTAL FOREIGN SOVEREIGN BONDS AND NOTES ............................ 49,165,701
(Cost $46,418,373) -------------
FOREIGN CORPORATE BONDS AND NOTES (D) - 15.5%
BRAZIL - 1.1%
200,000 Banco do Estado do Rio Grande do Sul
(USD) (e).......................... 7.38% 02/02/22 218,100
200,000 OAS Investments GMBH (USD) (e)......... 8.25% 10/19/19 215,500
150,000 Odebrecht Finance Ltd. (USD) .......... 7.50% 09/14/15 160,500
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN CORPORATE BONDS AND NOTES (D) - (CONTINUED)
BRAZIL - (CONTINUED)
350,000 OGX Petroleo e Gas Participacoes S.A.
(USD) ............................. 8.50% 06/01/18 $ 274,750
300,000 OSX 3 Leasing B.V. (USD) (e)........... 9.25% 03/20/15 299,250
220,000 Vale Overseas Ltd. (USD) .............. 4.38% 01/11/22 225,995
-------------
1,394,095
-------------
CHILE - 0.3%
350,000 Automotores Gildemeister S.A. (USD) (e) 6.75% 01/15/23 368,375
-------------
CHINA - 0.6%
200,000 COSL Finance BVI Ltd. (USD) (e)........ 3.25% 09/06/22 195,618
300,000 Country Garden Holdings Co., Ltd. (USD) 11.13% 02/23/18 348,000
200,000 Yancoal International Resources
Development Co. Ltd. (USD) (e)..... 5.73% 05/16/22 205,560
-------------
749,178
-------------
DOMINICAN REPUBLIC - 0.3%
350,000 AES Andres Dominicana/Itabo Dominicana
(USD) ............................. 9.50% 11/12/20 378,000
-------------
EL SALVADOR - 0.4%
450,000 Telemovil Finance Co., Ltd. (USD) ..... 8.00% 10/01/17 492,750
-------------
GUATEMALA - 0.4%
400,000 Industrial Subordinated Trust (USD) ... 8.25% 07/27/21 443,752
-------------
INDIA - 0.3%
400,000 Bharti Airtel International Netherlands
B.V. (USD) (e)..................... 5.13% 03/11/23 403,600
-------------
INDONESIA - 0.1%
150,000 PT Adaro Indonesia (USD) .............. 7.63% 10/22/19 163,875
-------------
KAZAKHSTAN - 0.6%
300,000 Kazakhstan Temir Zholy Finance B.V. (USD)
(e)................................ 6.95% 07/10/42 351,750
400,000 Zhaikmunai International B.V. (USD) (e) 7.13% 11/13/19 429,000
-------------
780,750
-------------
MEXICO - 2.1%
200,000 Alpek S.A. de C.V. (USD) (e)........... 4.50% 11/20/22 208,000
350,000 BBVA Bancomer S.A. Texas (USD) (e)..... 6.75% 09/30/22 400,750
500,000 CEMEX Espana S.A. Luxembourg (USD) .... 9.88% 04/30/19 578,100
400,000 Corporacion GEO S.A. de C.V. (USD) (e). 8.88% 03/27/22 346,000
264,000 Desarrolladora Homex S.A. (USD) ....... 9.50% 12/11/19 228,360
632,938 GEO Maquinaria S.A. de C.V. (USD) ..... 9.63% 05/02/21 522,173
360,000 Tenedora Nemak S.A. de C.V. (USD) (e).. 5.50% 02/28/23 365,400
-------------
2,648,783
-------------
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
PRINCIPAL
VALUE
(LOCAL STATED STATED VALUE
CURRENCY) DESCRIPTION COUPON MATURITY (US DOLLARS)
--------------- ----------------------------------------- -------------- --------------- -------------
FOREIGN CORPORATE BONDS AND NOTES (D) - (CONTINUED)
MULTINATIONAL - 1.1%
76,200,000 European Bank For Reconstruction &
Development (INR) ................. 5.25% 02/07/14 $ 1,387,743
-------------
NIGERIA - 0.3%
350,000 Access Finance B.V. (USD) (e).......... 7.25% 07/25/17 372,111
-------------
RUSSIA - 5.5%
450,000 Alfa Bank (USD) ....................... 7.88% 09/25/17 509,040
200,000 Alfa Bank OJSC Via Alfa Bond Issuance PLC
(USD) ............................. 7.75% 04/28/21 224,500
400,000 EuroChem Mineral & Chemical Co. OJSC
(USD) (e).......................... 5.13% 12/12/17 408,000
200,000 Evraz Group S.A. (USD) ................ 7.40% 04/24/17 213,500
250,000 Gazprom Neft OAO via GPN Capital S.A.
(USD) (e).......................... 4.38% 09/19/22 247,813
500,000 Home Credit & Finance Bank (USD) (e)... 9.38% 04/24/20 538,750
400,000 Metalloinvest Finance Ltd. (USD) ...... 6.50% 07/21/16 422,252
86,400,000 RZD Capital Ltd. (RUB) ................ 8.30% 04/02/19 2,868,447
300,000 Sberbank of Russia via SB Capital S.A.
(USD) (e).......................... 6.13% 02/07/22 336,000
200,000 Sibur Securities Ltd. (USD) (e)........ 3.91% 01/31/18 197,500
420,000 Vimpelcom Holdings B.V. (USD) (e)...... 5.95% 02/13/23 419,475
400,000 VTB Bank OJSC via VTB Capital S.A. (USD) 6.88% 05/29/18 442,000
-------------
6,827,277
-------------
TURKEY - 1.0%
200,000 Arcelik AS (USD) (e)................... 5.00% 04/03/23 200,000
250,000 Turkiye Halk Bankasi AS (USD) ......... 3.88% 02/05/20 246,875
200,000 Turkiye Vakiflar Bankasi (USD) (e)..... 6.00% 11/01/22 206,000
500,000 Yasar Holdings (USD) .................. 9.63% 10/07/15 530,000
-------------
1,182,875
-------------
UKRAINE - 1.2%
350,000 Ferrexpo Finance PLC (USD) ............ 7.88% 04/07/16 350,875
360,000 Metinvest B.V. (USD) .................. 10.25% 05/20/15 381,492
250,000 MHP S.A. (USD) ........................ 10.25% 04/29/15 377,218
370,000 MHP S.A. (USD) (e)..................... 8.25% 04/02/20 367,458
-------------
1,477,043
-------------
UNITED ARAB EMIRATES - 0.2%
200,000 Abu Dhabi National Energy Co. (USD) (e) 3.63% 01/12/23 202,500
-------------
TOTAL FOREIGN CORPORATE BONDS AND NOTES ............................ 1 9,272,707
(Cost $18,729,212) -------------
TOTAL INVESTMENTS - 102.6% ......................................... 12 7,213,305
(Cost $102,972,295) (j)
OUTSTANDING LOANS - (4.7%) ......................................... (5,800,000)
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
DESCRIPTION VALUE
--------------- -------------------------------------------------------------------------- -------------
NET OTHER ASSETS AND LIABILITIES - 2.1% ............................ $ 2,640,323
-------------
NET ASSETS - 100.0% ................................................ $ 124,053,628
=============
---------------------------------------
(a) All of the securities within the Portfolio of Investments, except
for the BTA Bank JSC common stock, are available to serve as
collateral for the outstanding loan.
(b) This security is fair valued in accordance with procedures adopted
by the Fund's Board of Trustees and in accordance with provisions of
the Investment Company Act of 1940, as amended.
(c) Non-income producing security.
(d) 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.
(e) 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 March 31, 2013, securities noted
as such amounted to $10,257,420 or 8.27% of net assets.
(f) Zero coupon bond.
(g) Floating rate security. The interest rate shown reflects the rate in
effect at March 31, 2013.
(h) 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.
(i) Fixed-to-variable rate security. The interest rate shown reflects
the fixed rate in effect at March 31, 2013. At a predetermined date,
the fixed rate will change to a variable rate.
(j) Aggregate cost for financial reporting purposes, which approximates
the aggregate cost for federal income tax purposes. As of March 31,
2013, the aggregate gross unrealized appreciation for all securities
in which there was an excess of value over tax cost was $26,711,166
and the aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over value was $2,470,156.
ADR American Depositary Receipt
Currency Abbreviations
BRL Brazilian Real THB Thailand Baht
GBP British Pound Sterling TRY Turkish Lira
HKD Hong Kong Dollar TWD Taiwan Dollar
HUF Hungarian Forint USD United States Dollar
IDR Indonesian Rupiah UYU Uruguayan Peso
INR Indian Rupee ZAR South African Rand
KRW South Korean Won
KZT Kazakhstan Tenge
MXN Mexican Peso
MYR Malaysian Ringgit
NGN Nigerian Naira
PEN Peruvian New Sol
PHP Philippines Peso
PLN Polish Zloty
RON Romanian Leu
RSD Serbian Dinar
RUB Russian Ruble
See Notes to Quarterly Portfolio of Investments
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 2013 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
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
3/31/2013 PRICES INPUTS INPUTS
--------------- ------------- --------------- --------------
Common Stocks:
Brazil....................................... $ 9,606,625 $ 9,606,625 $ -- $ --
Chile........................................ 931,766 931,766 -- --
China........................................ 3,620,490 -- 3,620,490 --
Hong Kong.................................... 4,387,939 -- 4,387,939 --
Hungary...................................... 769,997 -- 769,997 --
India........................................ 7,049,026 -- 7,049,026 --
Indonesia.................................... 1,595,217 -- 1,595,217 --
Italy........................................ 1,247,868 1,247,868 -- --
Kazakhstan................................... 1 1 -- --
Malaysia..................................... 1,334,144 -- 1,334,144 --
Mexico....................................... 5,212,756 5,212,756 -- --
Philippines.................................. 2,241,759 -- 2,241,759 --
Poland....................................... 966,000 -- 966,000 --
Russia....................................... 1,961,680 1,644,750 316,930 --
South Africa................................. 3,185,470 -- 3,185,470 --
South Korea.................................. 3,285,549 -- 3,285,549 --
Taiwan....................................... 2,700,040 -- 2,700,040 --
Thailand..................................... 3,385,253 -- 3,385,253 --
Turkey....................................... 3,267,230 -- 3,267,230 --
United Kingdom............................... 2,026,087 -- 2,026,087 --
--------------- ------------- --------------- --------------
Total Common Stocks................... 58,774,897 18,643,766 40,131,131 --
--------------- ------------- --------------- --------------
Foreign Sovereign Bonds and Notes*........... 49,165,701 -- 49,165,701 --
Foreign Corporate Bonds and Notes*........... 19,272,707 -- 19,272,707 --
--------------- ------------- --------------- --------------
Total Investments............................ 127,213,305 18,643,766 108,569,539 --
Forward Foreign Currency Contracts**......... 174,611 -- 174,611 --
--------------- ------------- --------------- --------------
Total........................................ $ 127,387,916 $ 18,643,766 $ 108,744,150 $ --
=============== ============= =============== ==============
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**......... $ (32,405) $ -- $ (32,405) $ --
=============== ============= =============== ==============
* 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
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
MARCH 31, 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. The fair value
of foreign equity securities typically occurs once a pre-established market
trigger is reached, such as the change in value between a foreign markets' close
and the NYSE close. When this occurs, a foreign equity security normally priced
based on a last sale price from the exchange on which it is principally traded
(Level 1) is priced based on a factor provided by an independent pricing service
(Level 2). When the pre-established market trigger is reached on a report period
end date, as was the case at the prior year end, December 31, 2012, as well as
the current quarter-end, March 31 2013, a majority of the portfolio securities
fall into the Level 2 category. The foreign equity security, valued at $790,000,
that transferred from Level 1 to Level 2 at March 31, 2013, was the result of
being priced based upon a factor provided by an independent pricing service vs.
being priced based on a last sale price at December 31, 2012. The foreign equity
security, valued at $1, that transferred from Level 2 to Level 1 at March 31,
2013, was the result of being priced on the primary exchange.
% OF TOTAL
INDUSTRY CLASSIFICATION INVESTMENTS
------------------------------------------------------------
Government Bonds and Notes 38.6%
Commercial Banks 13.9
Oil, Gas & Consumable Fuels 6.8
Real Estate Management & Development 4.2
Semiconductors & Semiconductor Equipment 3.7
Transportation Infrastructure 3.6
Metals & Mining 2.7
Wireless Telecommunication Services 2.6
Beverages 2.3
Food & Staples Retailing 2.2
Automobiles 2.1
Construction Materials 1.6
Diversified Financial Services 1.6
Thrifts & Mortgage Finance 1.3
Tobacco 1.3
Pharmaceuticals 1.2
Insurance 1.1
Household Durables 1.0
Chemicals 1.0
IT Services 1.0
Energy Equipment & Services 1.0
Specialty Retail 0.9
Construction & Engineering 0.8
Diversified Telecommunication Services 0.7
Multiline Retail 0.6
Food Products 0.6
Household Products 0.5
Electric Utilities 0.5
Consumer Finance 0.4
Machinery 0.2
----------------------------------------------------------
Total 100.0%
=========
CURRENCY EXPOSURE % OF TOTAL
DIVERSIFICATION INVESTMENTS #
--------------------------------------------------
USD 40.9%
INR 6.6
BRL 6.4
HKD 6.3
ZAR 6.3
TRY 5.2
MXN 4.5
THB 2.7
KRW 2.6
MYR 2.4
TWD 2.1
HUF 1.8
PHP 1.8
NGN 1.7
RUB 1.6
UYU 1.4
IDR 1.3
GBP 1.1
RSD 1.1
PEN 1.1
PLN 0.8
RON 0.3
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
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
MARCH 31, 2013 (UNAUDITED)
FORWARD FOREIGN CURRENCY CONTRACTS
---------------------------------------------------------
PURCHASE SALE
VALUE AS OF VALUE AS OF UNREALIZED
SETTLEMENT AMOUNT AMOUNT MARCH 31, MARCH 31, APPRECIATION/
DATE COUNTERPARTY PURCHASED (a) SOLD (a) 2013 2013 (DEPRECIATION)
---------- -------------- -------------------- ------------------ --------------- --------------- --------------
04/19/13 BAR ZAR 7,326,000 USD 825,707 $ 794,345 $ 825,707 $ (31,362)
06/04/13 RBS USD 876,719 BRL 1,753,000 876,719 860,644 16,075
04/19/13 CIT USD 1,614,253 HUF 357,827,000 1,614,253 1,502,967 111,286
06/04/13 JPM USD 1,261,188 IDR 12,278,929,000 1,261,188 1,252,407 8,781
06/04/13 JPM USD 698,172 RUB 21,769,000 698,172 691,991 6,181
06/04/13 RBS USD 1,819,410 RUB 56,833,000 1,819,410 1,806,602 12,808
04/19/13 JPM USD 485,095 TRY 882,000 485,095 486,138 (1,043)
04/19/13 CIT USD 813,825 ZAR 7,326,000 813,825 794,345 19,480
--------------
Net Unrealized Appreciation (Depreciation)........................................... $ 142,206
==============
(a) Please see Portfolio of Investments for currency descriptions.
Counterparty Abbreviations:
BAR Barclays Bank
CIT Citibank, NA
JPM JPMorgan Chase
RBS Royal Bank of Scotland
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
MARCH 31, 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. 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 their
closing bid prices.
Forward foreign currency contracts are valued at the current day's
interpolated foreign exchange rate, as calculated using the current day's
spot rate, and the thirty, sixty, ninety and one-hundred eighty day forward
rates provided by an independent pricing service.
Debt securities having a remaining maturity of sixty days or less when
purchased are valued at cost adjusted for amortization of premiums and
accretion of discounts.
In the event that market quotations are not readily available, the pricing
service does not provide a valuation for a particular asset, or the valuations
are deemed unreliable, the Fund's Board of Trustees has designated First Trust
Advisors L.P. ("First Trust") to use a fair value method to value the Fund's
securities and other investments. Additionally, if events occur after the close
of the principal market for particular securities (e.g., domestic debt and
foreign securities), but before the Fund values its assets, that could
materially affect NAV, First Trust may use a fair value method to value the
Fund's securities and other investments. The use of fair value pricing by the
Fund is governed by valuation procedures adopted by the Fund's Board of
Trustees, and in accordance with the provisions of the 1940 Act. As a general
principle, the fair value of a security is the amount which the Fund might
reasonably expect to receive for the security upon its current sale. However, in
light of the judgment involved in fair valuations, there can be no assurance
that a fair value assigned to a particular security will be the amount which the
Fund might be able to receive upon its current sale. Fair valuation of a debt
security will be based on the consideration of all available information,
including, but not limited to, the following:
1) the fundamental business data relating to the issuer, or economic data
relating to the country of issue;
2) an evaluation of the forces which influence the market in which these
securities are purchased and sold;
3) the type, size and cost of security;
4) the financial statements of the issuer, or the financial condition of
the country of issue;
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (CONTINUED)
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
MARCH 31, 2013 (UNAUDITED)
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.
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.
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (CONTINUED
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
MARCH 31, 2013 (UNAUDITED)
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 March 31, 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 March 31, 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.
During the three months ended March 31, 2013, the amount of notional values of
forward foreign currency contracts opened and closed were $14,614,805 and
$15,464,914, 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 May 21, 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 May 21, 2013
----------------------
By (Signature and Title)* /s/ James M. Dykas
----------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
Date May 21, 2013
----------------------
* Print the name and title of each signing officer under his or her signature.