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Aberdeen
Commonwealth Income
Fund, Inc.
Quarterly Report
January 31, 2002
Letter to Shareholders
March 15, 2002
Dear Shareholder,
We present this Quarterly Report which covers the activities of Aberdeen
Commonwealth Income Fund, Inc. (the "Fund") for the quarter ended January 31,
2002. Included in this report is a review of the Australian, Canadian, New
Zealand, United Kingdom and selected Asian economies and investment markets,
together with an overview of the Fund's investments prepared by the Investment
Manager, Aberdeen Asset Managers (C.I.) Limited.
High Credit Quality: 87.4% of Securities Rated or Deemed Equivalent to AA/Aa or
Better
The Fund's high credit quality has been maintained. Over 87.4% of assets are
rated AA/Aa or better, or are considered of equivalent quality by the Investment
Manager. An additional 8.5% is held in A rated securities.
Distributions: 9.5% Annual Cash Distribution Rate
Distributions to common shareholders for the 12 months ended January 31, 2002
totaled 83.0 cents per share. Based on the share price of $8.74 on January 31,
2002, the cash distribution rate over the 12 months then ended was 9.5%. Since
all distributions are paid after deducting applicable withholding taxes, the
effective distribution rate may be higher for those U.S. investors who are able
to claim a tax credit.
On March 14, 2002, the Board of Directors declared a monthly distribution of 6.0
cents per share payable on April 12, 2002 to all shareholders of record as of
March 28, 2002 (ex-dividend date of March 26, 2002).
The Board's policy is to provide investors with a stable monthly distribution
out of current income, supplemented by realized capital gains and, to the extent
necessary, paid-in capital. It is the Board's intention that the monthly
distribution of 6.0 cents per share be maintained for 12 months, having begun
with the February 2002 distribution. This policy is subject to regular review at
the Board's quarterly meetings, unless market conditions require an earlier
evaluation. The next review is scheduled to take place in June 2002.
Net Asset Value Performance: 5.3% Per Annum Return Since Inception
The Fund's total return based on Net Asset Value ("NAV") decreased by 3.0% over
the quarter ended January 31, 2002. Since inception, the Fund's total return
based on NAV has increased by 5.3% per annum to January 31, 2002. The Fund's
market price per share fell 2.9% over the quarter, from $9.00 on October 31,
2001 to $8.74
Aberdeen Commonwealth Income Fund, Inc. 1
Letter to Shareholders (concluded)
on January 31, 2002. The Fund's NAV per share was $9.47 on January 31, 2002,
representing a discount to the market price per share of 7.7%, compared with a
discount of 9.9% on October 31, 2001.
Implementation of Global Investment Strategy
In March 1999, the Fund's shareholders approved amendments to the Fund's
principal investment objective, investment policies and investment restrictions
to enable the Fund to invest up to 35% of its total assets in Global Debt
Securities. This strategy was proposed to be implemented in two phases. The
first phase involved the immediate investment of up to 20% of the Fund's assets
in Asian debt markets. On September 3, 2001, the Board of Directors authorized
the Investment Manager, in its discretion, to implement the second phase of the
global investment strategy. This will now allow the Fund to invest up to 35% of
its total assets in Global Debt Securities, with a view to enhancing yield.
Asian Investments: 6.3% of Total Assets Invested in Asian Debt Securities
As of January 31, 2002, 6.3% of the Fund's total assets were held in Asian debt
securities, a sector that presents attractive opportunities. The Fund's ability
to increase its investment in Asian markets remains constrained by the potential
realization of foreign exchange losses.
For information about the Fund, including weekly updates of share price, NAV,
and details of recent distributions, contact Aberdeen Asset Management, Investor
Relations, by:
o calling toll free on 1-800-522-5465 or 1-212-968-8800 in the United States,
o emailing to InvestorRelations@aberdeen-asset.com, or
o visiting the website at www.aberdeen-asset.com/usa
For information about the Aberdeen group, visit the Aberdeen website at
www.aberdeen-asset.com
Yours sincerely,
/s/ Martin J. Gilbert
Martin J. Gilbert
Chairman
All amounts are U.S. Dollars unless otherwise stated.
2 Aberdeen Commonwealth Income Fund, Inc.
Your Board's policy is to provide investors with a stable monthly distribution
out of current income, supplemented by realized capital gains and, to the extent
necessary, paid-in capital.
The Fund is subject to U.S. corporate, tax and securities laws. Under U.S. tax
accounting rules, the amount of distributable income for each fiscal period
depends on the actual exchange rates during the entire year between the U.S.
dollar and the currencies in which Fund assets are denominated and on the
aggregate gains and losses realized by the Fund during the entire year.
Therefore the exact amount of distributable income for each fiscal year can only
be determined as of the end of the Fund's fiscal year, October 31. However,
under the U.S. Investment Company Act of 1940, the Fund is required to indicate
the source of each distribution to shareholders. The Fund estimates that
distributions for the fiscal year commencing November 1, 2001, including the
distribution paid on March 8, 2002, are comprised of 59% net investment income
and 41% return of paid in capital.
This estimated distribution composition may vary from month to month because it
may be materially impacted by future realized gains and losses on securities and
fluctuations in the value of the currencies in which Fund assets are
denominated.
In January 2003, a Form 1099-DIV will be sent to shareholders, which will state
the amount and composition of distributions and provide information with respect
to their appropriate tax treatment.
Aberdeen Commonwealth Income Fund, Inc. 3
Dividend Reinvestment and Cash Purchase Plan
We invite you to participate in the Fund's Dividend Reinvestment and Cash
Purchase Plan ("the Plan") which allows you to automatically reinvest your
distributions in shares of the Fund's common stock at favorable commission
rates. Distributions made under the Plan are taxable to the same extent as are
cash distributions. The Plan also enables you to make additional cash
investments in shares of at least $100 per month. Under this arrangement, the
Plan Agent will purchase shares for you on the stock exchange or otherwise on
the open market on or about the 15th of each month unless shares of the Fund are
trading at a premium, in which case, the Fund will issue additional shares. As a
participant in the Plan, you will have the convenience of:
Automatic reinvestment--the Plan Agent will automatically reinvest your
distributions, allowing you to gradually grow your holdings in the Fund;
Lower costs--shares purchased on your behalf under the Plan will be at reduced
brokerage rates. Brokerage on share purchases is currently 2 cents per share;
Convenience--the Plan Agent will hold your shares in non-certificated form and
will provide a detailed record of your holdings at the end of each distribution
period.
To request a brochure containing information on the Plan, together with an
authorization form, please contact the Plan Agent, State Street Bank & Trust
Company, P.O. Box 8200 Boston, MA 02266 or call toll free on 1-800-426-5523.
4 Aberdeen Commonwealth Income Fund, Inc.
Report of the Investment Manager
Share Price Performance
On January 31, 2002, the Fund's share price was $8.74, which represented a
discount of 7.7% to the NAV of $9.47. At the date of this report, the share
price was $8.70 representing a discount of 8.0% to the NAV of $9.46.
Distributions
The Board reduced the Fund's monthly distribution from 7.0 cents per share to
6.0 cents per share beginning with the distribution paid on February 8, 2002.
The Investment Manager continues its efforts to reallocate the portfolio toward
higher yielding Global Debt Securities, in addition to fixed income securities
denominated in the Commonwealth Currencies. Further, with the expectation for an
improving global economy in mid to late 2002, the Investment Manager anticipates
improvement in the value of non-U.S. Dollar currencies. Together, these factors
may enhance the Fund's net investment income and ability to realize capital
gains. There can, however, be no assurance that the Investment Manager's
expectations will be met.
Auction Market Preferred Stock (AMPS)
The Fund's $30 million of AMPS continued to be well bid at the weekly auctions.
The average interest rate paid was 2.25% over the quarter ended January 31,
2002, compared with 1.85% for 30-day U.S. commercial paper over the same period.
These rates have decreased since the quarter ended October 31, 2001, due to the
lowering of interest rates by the U.S. Federal Reserve over the period.
On September 3, 2001, the Board of Directors resolved to amend the Fund's
policies with respect to derivatives to enable the Investment Manager to use
interest rate swaps to hedge up to one third of the Fund's AMPS liabilities.
This gives the Investment Manager the flexibility to lock in historically low
U.S. dollar interest rates with respect to up to one third of the Fund's
outstanding AMPS.
Aberdeen Commonwealth Income Fund, Inc. 5
Report of the Investment Manager (concluded)
A significant type of risk associated with interest rate swaps is the risk that
the counter-party may default or file for bankruptcy, in which case the Fund
would bear the risk of loss of the amount expected to be received under the swap
agreement. There can be no assurance that the Fund will have an interest rate
swap in place at any given time nor can there be any assurance that, if an
interest rate swap is in place, it will be successful in hedging the Fund's
interest rate risk with respect to the AMPS.
Over the past year, the impact of AMPS has been slightly negative, largely as a
result of general currency weakness against the U.S. dollar. Offsetting this to
some extent have been capital gains as bond yields have fallen. In addition,
U.S. monetary policy was eased more aggressively than in the Commonwealth
countries during the period, opening up a positive yield differential between
AMPS funding rates and investment yields. Overall, the outlook over the
medium-term for investment markets and the portfolio in respect of these factors
is considered by the Manager to be favorable, and therefore AMPS are seen as
having the potential to enhance total shareholder returns in the medium term.
6 Aberdeen Commonwealth Income Fund, Inc.
Portfolio Composition
Geographic Composition
The table below shows the geographic composition of the Fund's total investments
as of January 31, 2002, compared with the previous quarter and twelve months.
TABLE 1: ABERDEEN COMMONWEALTH INCOME FUND, INC.--
GEOGRAPHIC ASSET ALLOCATION
================================================================================
January 31, 2002 October 31, 2001 January 31, 2001
% % %
--------------------------------------------------------------------------------
Australia 23.9 24.2 24.7
Canada 31.8 31.2 33.3
New Zealand 5.0 3.8 3.7
United Kingdom 29.9 31.3 29.4
United States* 3.1 3.8 3.1
Asia 6.3 5.7 5.8
--------------------------------------------------------------------------------
Total Portfolio 100.0 100.0 100.0
================================================================================
* It is the policy of the Investment Manager to maintain a portion of the
Fund's investments in U.S. short-term securities to cover distributions
and expenses.
Currency Composition
The table below shows the currency composition of the Fund's total investments
as of January 31, 2002, compared with the previous quarter and twelve months.
TABLE 2: ABERDEEN COMMONWEALTH INCOME FUND, INC.--
CURRENCY ALLOCATION
================================================================================
January 31, 2002 October 31, 2001 January 31, 2001
% % %
--------------------------------------------------------------------------------
Australian Dollar 23.9 24.2 24.7
Canadian Dollar 31.5 31.2 33.3
New Zealand Dollar 5.3 3.8 3.7
British Pound 29.9 31.3 29.4
United States Dollar* 3.6 3.8 3.1
Asia Currencies 5.8 5.7 5.8
--------------------------------------------------------------------------------
Total Portfolio 100.0 100.0 100.0
================================================================================
* Includes Asian Yankee bond investments.
Aberdeen Commonwealth Income Fund, Inc. 7
Portfolio Composition (continued)
Maturity Composition
On January 31, 2002, the average maturity of the Fund's assets remained at 7.8
years. The Fund's modified duration was 4.9 years on January 31, 2002, compared
with 5.0 years on October 31, 2001. The table below shows the maturity
composition of the Fund's investments as of January 31, 2002:
TABLE 3: ABERDEEN COMMONWEALTH INCOME FUND, INC.--
MATURITY ANALYSIS
===================================================================================================
Less than 1 year 1 to 5 years 5 to 10 years Over 10 years
% % % %
---------------------------------------------------------------------------------------------------
Australia 21.7 30.9 35.5 11.9
Canada 25.9 16.7 17.8 39.6
New Zealand 10.4 50.8 38.8 --
United Kingdom 8.5 30.5 22.5 38.5
United States 100.0 -- -- --
Asia 34.5 49.1 14.9 1.5
---------------------------------------------------------------------------------------------------
Total Portfolio 21.8 26.8 23.6 27.8
===================================================================================================
Sectoral Composition
The table below shows the sectoral composition of the Fund's total investments
as of January 31, 2002:
TABLE 4: ABERDEEN COMMONWEALTH INCOME FUND, INC.--
SECTORAL COMPOSITION
==================================================================================================
Sovereign Provincial/ Utilities/
Gov't. State Supranational Corporate Cash or
Bonds Bonds Bonds Bonds Equivalent
% % % % %
--------------------------------------------------------------------------------------------------
Australia 9.4 7.6 1.8 2.2 2.9
Canada 20.8 5.5 0.3 0.6 4.6
New Zealand -- -- 0.8 2.8 1.4
United Kingdom 20.9 -- 2.0 4.5 2.5
United States -- -- -- -- 3.1
Asia 4.2 0.6 0.2 0.3 1.0
--------------------------------------------------------------------------------------------------
Total Portfolio 55.3 13.7 5.1 10.4 15.5
==================================================================================================
8 Aberdeen Commonwealth Income Fund, Inc.
Portfolio Composition (concluded)
Quality of Investments
On January 31, 2002, 87.4% of the Fund's assets were invested in securities
where either the issue or the issuer was rated at least "AA" by Standard &
Poor's Corporation or "Aa" by Moody's Investors Service, Inc. or, if unrated,
were judged to be of equivalent quality by the Investment Manager. The table
below shows the asset quality of the Fund's portfolio as of January 31, 2002.
TABLE 5: ABERDEEN COMMONWEALTH INCOME FUND, INC.--
ASSET QUALITY
=======================================================================================
AAA/Aaa AA/Aa A BBB/Baa BB/Ba*
% % % % %
---------------------------------------------------------------------------------------
Australia 77.9 22.1 -- -- --
Canada 14.4 75.9 9.7 -- --
New Zealand 56.4 18.4 25.2 -- --
United Kingdom 67.7 20.7 11.6 -- --
United States 100.0 -- -- -- --
Asia 20.7 -- 10.9 67.1 1.3
---------------------------------------------------------------------------------------
Total Portfolio 50.8 36.6 8.5 4.0 0.1
=======================================================================================
* Below investment grade.
Aberdeen Commonwealth Income Fund, Inc. 9
Market Review and Outlook
AUSTRALIA
The benchmark 10-year bond yield rose to 6.01% from 5.23% over the quarter ended
January 31, 2002. Bank bill yields also rose over the quarter, closing at 4.31%.
Market confidence in Australia's ability to ride out the global recession has
been boosted by a number of recent indicators showing the economy ended 2001
with consumer spending and housing investment still strong and the jobs market
enjoying a tentative recovery. The very low level of interest rates means that
housing finance for construction and building approvals could remain at
relatively high levels until the interest rate cycle turns. The composition of
growth is likely to shift again in 2002 as export growth slows further, impacted
by a weaker global economy, while domestic consumption is likely to remain
supported by low interest rates and positive real wages growth.
The Australian dollar rose slightly over the quarter, closing at $0.51.
CANADA
The Bank of Canada's ("BoC") latest Monetary Policy Report saw a growth profile
that delivers excess supply for the Canadian economy through 2002, and one that
will deliver a substantially deeper disinflationary and negative output gap than
previously expected. The BoC's overall growth view sees the potential for a
slight recession in the second half of this year and a recovery to above trend
growth in both Canada and the U.S. in the second half of next year. Canada's
output-based GDP rose 0.3% in October, to be down 0.6% over a year ago, and down
1.2% at an annual rate from the third quarter average.
The Canadian dollar remained steady over the quarter closing at $0.63.
NEW ZEALAND
After a strong first half of 2001, growth in the New Zealand economy moderated
in the third quarter, expanding by, a smaller than expected, 0.3%. Fourth
quarter data to date, however, suggests positive momentum has been maintained
into the year-end, with dwelling consents, non-residential approvals, car
registrations and business and consumer sentiment all higher. Indeed, despite
global uncertainty, the confidence of New Zealand's consumers has remained
relatively robust, providing a solid base for retail spending in the near term.
The New Zealand dollar rose slightly over the quarter, closing at $0.42.
10 Aberdeen Commonwealth Income Fund, Inc.
Market Review and Outlook (concluded)
UNITED KINGDOM
Over the quarter, UK consumer spending remained fairly buoyant while the
manufacturing sector remained weak, underlining the current two-speed nature of
the UK economy. Given the ongoing strength of consumer spending, the Investment
Manager is inclined to put the chance of further rate cuts in the UK at less
than 50%. However, a benign inflation background throughout 2002 should allow
the monetary policy to remain on hold for most of the year, although there are
upward risks to this view in line with the market's expectations.
The pound has depreciated against the U.S. dollar over the quarter, closing at
$1.41.
ASIA
Domestic and Yankee (U.S.$ denominated) bonds
Among domestic Asian bond markets, Thailand posted strong gains over the
quarter, as investors started to price in an interest rate cut which the Bank of
Thailand delivered late in December 2001. Singapore underperformed, with the
market selling-off in November, on the back of weakness in global bond markets.
U.S. dollar-denominated Asian bonds rallied strongly over the quarter as
investors purchased high-yield bonds, especially in the latter part of November
2001.
Currencies
The South Korean won depreciated against the U.S. dollar over the quarter, while
the Singapore dollar, Philippine peso and Thai baht remained broadly unchanged.
The Malaysian ringgit remained pegged to the U.S. dollar. Strong gains in local
currency terms of most Asian bond markets were, for the most part, neutralized
by the relative strength of the Australian dollar, which appreciated against
most Asian currencies.
Aberdeen Commonwealth Income Fund, Inc. 11
Summary of Key Rates
The following table summarizes the movements of key interest rates and
currencies over the last three and twelve month periods.
============================================================================================
January 31, 2002 October 31, 2001 January 31, 2001
--------------------------------------------------------------------------------------------
Australia
90 day bank bills 4.31% 4.29% 5.74%
10 year bonds 6.01% 5.23% 5.35%
Australian Dollar $ 0.51 $ 0.50 $ 0.55
Canada
90 day bank bills 1.97% 2.35% 5.12%
10 year bonds 5.44% 4.86% 5.39%
Canadian Dollar $ 0.63 $ 0.63 $ 0.67
New Zealand
90 day bank bills 4.90% 4.96% 6.41%
10 year bonds 6.65% 6.18% 6.07%
NZ Dollar $ 0.42 $ 0.41 $ 0.44
United Kingdom
90 day bank bills 3.92% 4.15% 5.58%
10 year bonds 4.89% 4.53% 4.84%
British Pound $ 1.41 $ 1.45 $ 1.46
South Korea
90 day T-bills 4.37% 4.37% 5.60%
10 year bonds 7.11% 6.85% 6.54%
South Korean Won* (won) 1311.5 (won) 1290 (won) 1257
Thailand
90 day deposits 2.25% 2.50% 3.00%
10 year bonds 4.76% 5.55% 4.00%
Thai Baht* (baht) 44.1 (baht) 44.7 (baht) 42.5
Philippines
90 day T-bills 7.90% 11.07% 11.43%
10 year bonds 14.73% 17.80% 16.30%
Philippines Peso* (peso) 51.2 (peso) 52.0 (peso) 49.0
Malaysia
90 day T-bills 2.77% 2.73% 2.92%
10 year bonds 4.35% 3.30% 4.98%
Malaysian Ringgit* (ringgit) 3.8 (ringgit) 3.8 (ringgit) 3.8
Singapore
90 day T-bills 0.83% 0.60% 2.09%
10 year bonds 3.91% 2.97% 3.69%
Singapore Dollar* S$ 1.84 S$ 1.82 S$ 1.74
US$ Yankee Bonds**
South Korea 5.86% 5.54% 7.23%
Malaysia 6.54% 6.57% 7.18%
Philippines 8.76% 10.19% 10.68%
============================================================================================
* These currencies are quoted Asian currency per U.S. dollar. The
Australian, Canadian and New Zealand dollars and the British pound are
quoted U.S. dollars per currency.
** Sovereign issues.
Aberdeen Asset Managers (C.I.) Limited
March 2002
12 Aberdeen Commonwealth Income Fund, Inc.
Portfolio of Investments (unaudited)
As of January 31, 2002
Principal
Amount
Local
Currency (a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--84.7%
AUSTRALIA--21.1%
Government Bonds--8.6%
A$
Commonwealth of Australia,
3,000 10.00%, 10/15/02............................. 1,579,466
2,000 9.50%, 8/15/03............................... 1,082,822
1,000 10.00%, 2/15/06.............................. 586,605
2,500 6.75%, 11/15/06.............................. 1,323,266
1,000 10.00%, 10/15/07............................. 608,711
3,000 8.75%, 8/15/08............................... 1,753,216
2,500 7.50%, 9/15/09............................... 1,383,485
1,500 6.50%, 5/15/13............................... 781,381
Federal National Mortgage
Association, Series EMTN,
2,000 6.375%, 8/15/07.............................. 1,026,896
----------
Total government bonds
(cost US$12,145,134)......................... 10,125,848
----------
Semi-Government Bonds--7.6%
New South Wales--2.5%
New South Wales Treasury
Corporation,
1,500 7.00%, 4/01/04............................... 786,239
4,200 7.00%, 12/01/10.............................. 2,227,524
----------
3,013,763
----------
Queensland--1.9%
A$
Queensland Treasury
Corporation,
2,000 8.00%, 5/14/03 (Global)...................... 1,052,923
1,000 8.00%, 9/14/07 (Global)...................... 554,751
1,250 6.00%, 6/14/21............................... 599,382
----------
2,207,056
----------
Victoria--1.5%
State Electricity Commission
of Victoria,
535 10.50%, 5/27/03.............................. 289,440
Treasury Corporation of Victoria,
1,000 9.00%, 6/27/05............................... 554,127
1,500 10.25%, 11/15/06............................. 894,450
----------
1,738,017
----------
Western Australia--1.7%
Western Australia Treasury
Corporation,
3,500 8.00%, 6/15/13............................... 1,998,891
----------
Total Australian
semi-government bonds
(cost US$10,451,359)......................... 8,957,727
----------
Supranational--1.8%
Eurofima,
3,500 9.875%, 1/17/07.............................. 2,067,288
----------
Total Australian dollar
supranational bonds
(cost US$2,143,094).......................... 2,067,288
----------
Aberdeen Commonwealth Income Fund, Inc. 13
Portfolio of Investments (unaudited) (continued)
As of January 31, 2002
Principal
Amount
Local
Currency (a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
Utilities--0.9%
A$
Telstra Corp.,
2,000 11.50%, 10/15/02............................. 1,061,036
----------
Total Australian utility bonds
(cost US$1,408,214).......................... 1,061,036
----------
Banking and Finance--0.2%
ING Bank (Australia) Ltd.,
500 7.125%, 3/13/02.............................. 253,963
----------
Total Australian banking
and finance bonds
(cost US$371,631)............................ 253,963
----------
Corporate Non-Banks--2.0%
Brisbane Airport Corporation, Ltd.,
4,000 7.30%, 6/30/10............................... 2,086,003
GE Capital Australia,
600 6.75%, 9/15/07............................... 311,496
----------
Total Australian corporate
non-bank bonds
(cost US$2,503,340).......................... 2,397,499
----------
Total Australian
long-term investments
(cost US$29,022,772)......................... 24,863,361
----------
CANADA--27.0%
Government Bonds--20.6%
C$
Canadian Government,
6,000 8.50%, 4/01/02............................... 3,810,653
5,000 5.25%, 9/01/03............................... 3,247,673
2,500 7.25%, 6/01/07............................... 1,739,860
2,000 5.50%, 6/01/09............................... 1,273,337
1,000 10.75%, 10/01/09............................. 838,215
3,000 10.25%, 3/15/14.............................. 2,662,608
4,000 8.00%, 6/01/23............................... 3,174,066
8,000 9.00%, 6/01/25............................... 7,030,210
Canada (Cayman),
750 7.25%, 6/01/08............................... 518,481
----------
Total Canadian
government bonds
(cost US$26,779,969)......................... 24,295,103
----------
Semi-Government Bonds--5.5%
British Columbia--1.4%
Province of British Columbia,
2,000 9.50%, 1/09/12............................... 1,608,955
----------
Ontario--0.9%
Ontario Hydro,
500 8.50%, 5/26/25............................... 402,849
Province of Ontario,
1,000 8.75%, 4/22/03............................... 678,279
----------
1,081,128
----------
14 Aberdeen Commonwealth Income Fund, Inc.
Portfolio of Investments (unaudited) (continued)
As of January 31, 2002
Principal
Amount
Local
Currency (a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
Quebec--2.8%
C$
Quebec Hydro,
1,500 7.00%, 6/01/04............................... 1,012,169
1,000 2.14%, 1/28/05 (b)........................... 633,641
2,000 9.625%, 7/15/22.............................. 1,727,204
----------
3,373,014
----------
Toronto--0.4%
Metropolitan Municipality
of Toronto,
750 9.625%, 5/14/02.............................. 481,040
----------
Total Canadian
semi-government bonds
(cost US$7,015,637).......................... 6,544,137
----------
Utilities--0.3%
Bell Telephone Company
of Canada,
500 10.50%, 7/15/09.............................. 330,103
----------
Total Canadian utility bonds
(cost US$428,990)............................ 330,103
----------
Banking and Finance--0.6%
Credit Local de France,
1,000 6.75%, 3/21/06............................... 671,575
Total Canadian banking ----------
and finance bonds
(cost US$709,943)............................ 671,575
----------
Total Canadian
long-term investments
(cost US$34,934,539)......................... 31,840,918
----------
DENMARK--2.1%
Banking and Finance--2.1%
NZ$
Bayerische Hypo- und
Vereinsbank AG,
2,000 7.00%, 9/14/05............................... 832,782
Landesbank Hessen-Thueringen Girozentrale,
4,000 7.00%, 12/17/07.............................. 1,664,715
----------
Total Denmark
long-term investments
(cost US$2,585,925).......................... 2,497,497
----------
HONG KONG--0.2%
Corporate Non-Banks--0.2%
US$
PCCW-HKTC Capital LTD.,
200 7.75%, 11/15/11.............................. 200,840
----------
Total Hong Kong
long-term investments
(cost US$199,418)............................ 200,840
----------
MALAYSIA--0.7%
Semi-Government Bonds--0.7%
MYR
Danamodal Nasional Berhad,
3,100 0.00%, 10/21/03.............................. 772,716
----------
Total Malaysia
long-term investments
(cost US$749,597)............................ 772,716
----------
Aberdeen Commonwealth Income Fund, Inc. 15
Portfolio of Investments (unaudited) (continued)
As of January 31, 2002
Principal
Amount
Local
Currency (a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
NEW ZEALAND--1.8%
Government Bonds--0.3%
NZ$
Canadian Government,
1,000 6.625%, 10/03/07............................. 411,124
---------
Total New Zealand
government bonds
(cost US$553,974)............................ 411,124
---------
Utilities--0.7%
Electricity Corporation of
New Zealand Ltd.,
1,000 8.00%, 2/15/03............................... 427,190
TCNZ Finance Limited,
1,000 9.25%, 7/01/02............................... 421,381
---------
Total New Zealand
utility bonds
(cost US$1,153,439).......................... 848,571
---------
Banking and Finance--0.2%
Transpower Finance Ltd.,
500 8.00%, 6/15/05............................... 216,298
---------
Total New Zealand
banking and finance bonds
(cost US$344,566)............................ 216,298
---------
Corporate Non-Banks--0.6%
NZ$
Housing New Zealand,
1,500 8.00%, 11/15/06.............................. 653,228
---------
Total New Zealand
corporate non-bank bonds
(cost US$798,430)............................ 653,228
---------
Total New Zealand
long-term investments
(cost US$2,850,409).......................... 2,129,221
---------
PHILIPPINES--0.2%
Government Bonds--0.2%
Philippine Government,
PHP
7,000 16.50%, 2/25/09.............................. 153,593
US$
100 9.875%, 1/15/19.............................. 95,465
---------
Total Philippine
long-term investments
(cost US$285,906)............................ 249,058
---------
16 Aberdeen Commonwealth Income Fund, Inc.
Portfolio of Investments (unaudited) (continued)
As of January 31, 2002
Principal
Amount
Local
Currency (a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
SINGAPORE--0.5%
Government Bonds--0.4%
SG$
Singapore Government,
100 3.00%, 11/01/02.............................. 55,251
50 4.00%, 3/01/07............................... 28,011
700 4.625%, 7/01/10.............................. 400,945
---------
Total Singapore
government bonds
(cost US$503,723)............................ 484,207
---------
Utilities--0.1%
Singapore Power,
250 4.60%, 9/21/07............................... 143,426
---------
Total Singapore corporate
non-bank bonds
(cost US$143,849)............................ 143,426
---------
Total Singapore
long-term investments
(cost US$647,572)............................ 627,633
---------
SOUTH KOREA--3.2%
Government Bonds--1.3%
US$
EMBARC Ltd. Linked Note
Series 1-9,
2,000 5.671%, 8/18/03 (b)(c)....................... 1,584,760
---------
Government Banks--1.7%
EMBARC Ltd. Linked Note
Series 1-7,
2,600 5.029%, 6/28/02 (b)(d)....................... 2,005,588
---------
Banking and Finance--0.2%
Korea Development Bank,
200 5.25%, 11/16/06.............................. 196,568
---------
Total Korean
long-term investments
(cost US$4,529,537).......................... 3,786,916
---------
THAILAND--0.6%
Government Bonds--0.4%
THB
Thailand Government,
5,000 6.125%, 4/12/02 (e).......................... 114,377
550 8.25%, 10/14/03 (e).......................... 13,707
12,000 8.00%, 12/08/06 (e).......................... 328,280
---------
Total Thailand
government bonds
(cost US$481,165)............................ 456,364
---------
Aberdeen Commonwealth Income Fund, Inc. 17
Portfolio of Investments (unaudited) (continued)
As of January 31, 2002
Principal
Amount
Local
Currency (a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
Utilities--0.1%
THB
Eastern Water Resources
Development and Management
Company Limited,
4,000 9.00%, 7/22/04 (e)........................... 101,887
----------
Total Thailand utility bonds
(cost US$101,524)............................ 101,887
----------
Corporate Non-Banks--0.1%
Advanced Info Service
Public Company Limited,
3,900 6.50%, 3/20/03 (e)........................... 90,703
----------
Total Thailand corporate
non-bank bonds
(cost US$103,366)............................ 90,703
----------
Total Thailand
long-term investments
(cost US$686,055)............................ 648,954
----------
UNITED KINGDOM--27.3%
Government Bonds--21.0%
(pound)
United Kingdom Treasury,
1,500 8.00%, 6/10/03............................... 2,217,769
500 5.00%, 6/07/04............................... 709,672
1,250 8.50%, 12/07/05.............................. 1,983,044
1,100 7.50%, 12/07/06.............................. 1,722,375
500 5.75%, 12/07/09.............................. 743,396
1,500 8.00%, 9/27/13............................... 2,688,111
600 8.00%, 12/07/15.............................. 1,109,529
3,000 8.00%, 6/07/21............................... 5,937,564
2,350 6.00%, 12/07/28.............................. 3,983,198
Republic of Finland,
1,000 8.00%, 4/07/03............................... 1,462,621
1,250 10.125%, 6/22/08............................. 2,200,392
----------
Total United Kingdom
government bonds
(cost US$27,258,219)......................... 24,757,671
----------
Utilities--2.0%
(pound)
British Gas PLC,
1,400 8.875%, 7/08/08.............................. 2,293,377
----------
Total United Kingdom
utility bonds
(cost US$2,204,796).......................... 2,293,377
----------
Banking and Finance--4.3%
Abbey National Treasury
Services PLC,
1,250 8.00%, 4/02/03............................... 1,826,120
Barclays Bank PLC,
1,000 9.875%, 5/29/49.............................. 1,698,843
Lloyds Bank PLC,
500 7.375%, 3/11/04.............................. 733,503
Prudential Finance B.V.,
500 9.375%, 6/04/07.............................. 825,634
----------
Total United Kingdom
banking and finance bonds
(cost US$5,041,374).......................... 5,084,100
----------
Total United Kingdom
long-term investments
(cost US$34,504,389)......................... 32,135,148
----------
Total long-term investments
(cost US$110,996,119)........................ 99,752,262
----------
18 Aberdeen Commonwealth Income Fund, Inc.
Portfolio of Investments (unaudited) (continued)
As of January 31, 2002
Principal
Amount
Local
Currency (a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--13.2%
Australia--2.7%
A$
Banque Nationale de Paris
Fixed Deposit,
6,338 4.00%, 2/01/02
(cost US$3,211,619).......................... 3,211,620
------------
Canada--4.7%
C$
State Street Bank and
Trust Company Time Deposit,
8,770 1.75%, 2/06/02
(cost US$5,521,975).......................... 5,515,030
------------
United Kingdom--2.6%
(pound)
State Street Bank and
Trust Company Fixed Deposit,
2,170 3.94%, 2/06/02
(cost US$3,067,078).......................... 3,066,861
------------
United States--3.2%
US$
3,777 Repurchase Agreement,
State Street Bank and Trust
Company, 1.77% dated 1/31/02,
due 2/01/02 in the amount
of $3,777,186 (collateralized
by $2,985,000 U.S. Treasury
Bonds, 7.875% due 2/15/21;
value $3,853,193)
(cost US$3,777,000).......................... 3,777,000
------------
Total short-term investments
(cost US$15,577,672)......................... 15,570,511
------------
--------------------------------------------------------------------------------
Total Investments--97.9% (cost US$126,573,791) 115,322,773
Net unrealized appreciation on forward foreign currency exchange
contracts--0.0% (f) 4,615
Other assets in excess of liabilities--2.1% 2,465,128
--------------------------------------------------------------------------------
Total Net Assets--100.0% $117,792,516
================================================================================
(a) Portfolio securities are listed based on the currency in which they are
traded.
A$--Australian dollar
C$--Canadian dollar
MYR--Malaysian Ringgit
NZ$--New Zealand dollar
PHP--Philippine Peso
SG$--Singapore dollar
THB--Thailand Baht
(pound)--British pound
US$--United States dollar
Aberdeen Commonwealth Income Fund, Inc. 19
Portfolio of Investments (unaudited) (concluded)
As of January 31, 2002
(b) Coupon changes periodically upon a predetermined schedule. Stated interest
rate in effect at January 31, 2002.
(c) Value of security is linked to the value of Government of Korea 7.70%,
8/16/03 and the movement of the South Korean Won.
(d) Value of security is linked to the value of Korea Development Bank 7.01%,
6/26/02 and the movement of the South Korean Won.
(e) Securities, or a portion thereof, pledged as collateral for forward
currency exchange contracts.
(f) Forward foreign currency exchange contracts entered into as of January 31,
2002 were as follows:
---------------------------------------------------------------------------------------
Purchases
Unrealized
Contracts to Receive In Exchange for Settlement Date Value Appreciation
---------------------------------------------------------------------------------------
PHP 18,410,800 US$350,000 03/26/02 US$356,350 $ 6,350
--------
---------------------------------------------------------------------------------------
Sales
Unrealized
Contracts to Deliver In Exchange for Settlement Date Value Depreciation
---------------------------------------------------------------------------------------
CAD 1,000,000 US$627,117 02/01/02 US$628,852 $ (1,735)
--------
Total $ 4,615
========
20 Aberdeen Commonwealth Income Fund, Inc.
Directors
Martin J. Gilbert, Chairman
David L. Elsum
Laurence S. Freedman
Neville J. Miles
William J. Potter
Sir David Rowe-Ham
Peter D. Sacks
Anton E. Schrafl
E. Duff Scott
John T. Sheehy
Warren C. Smith
Hugh Young
Officers
Hugh Young, President
Christian Pittard, Treasurer and Assistant Secretary
Roy M. Randall, Secretary
Michael Karagianis, Assistant Vice President
Beverley Hendry, Assistant Treasurer
Timothy Sullivan, Assistant Treasurer
Simon Bignell, Assistant Treasurer
Allan S. Mostoff, Assistant Secretary
Margaret A. Bancroft, Assistant Secretary
Sander M. Bieber, Assistant Secretary
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase, from time to time, shares of its
common stock in the open market.
[RECYCLED LOGO] Printed on post-consumer recycled paper
Aberdeen Commonwealth Income Fund, Inc. 21
Corporate Information
Investment Manager Aberdeen Asset Managers (C.I.) Limited
P.O. Box 578, 17 Bond Street
St. Helier, Jersey JE45XB
Channel Islands
Investment Advisor Aberdeen Asset Management Limited
Level 6, 201 Kent Street
Sydney, NSW 2000, Australia
Consultant CIBC World Markets, Inc.
BCE Place, Canada Trust Tower
P.O. Box 500
Toronto, Ontario, M5J 2S8
Canada
Administrator Princeton Administrators, L.P.
Box 9095
Princeton, New Jersey 08543-9095
Custodian & Transfer Agent State Street Bank and Trust Company
1 Heritage Drive
North Quincy, Massachusetts 02171
Auction Agent Deutsche Bank
Four Albany Street
New York, New York 10006
Independent Accountants PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
Legal Counsel Dechert
1775 Eye Street, N.W.
Washington, DC 20006
Stikeman Elliott
Level 40 Chifley Tower
2 Chifley Square
Sydney, NSW 2000, Australia
Investor Relations Aberdeen Asset Management
45 Broadway, 31st Floor
New York, New York 10006
1-800-522-5465 or 1-212-968-8800
InvestorRelations@aberdeen-asset.com
[LOGO]
Aberdeen
ASSET MANAGERS
Aberdeen Asset Managers (C.I.) Limited
The common shares of Aberdeen Commonwealth Income Fund, Inc. are traded on the
New York Stock Exchange under the symbol "FCO." Information about the Fund's net
asset value and market price is published weekly in Barron's and in the Monday
edition of The Wall Street Journal.
This report, including the financial information herein, is transmitted to the
shareholders of Aberdeen Commonwealth Income Fund, Inc. for their general
information only. It does not have regard to the specific investment objectives,
financial situation and the particular needs of any specific person. Past
performance is no guarantee of future returns.
[GRAPHIC]
Invests primarily in fixed-income securities
denominated in the currencies of various
Commonwealth Countries