UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21636
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
-----------------------------------------------------
(Exact name of registrant as specified in charter)
1001 Warrenville Road, Suite 300
LISLE, IL 60532
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(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
1001 Warrenville Road, Suite 300
LISLE, IL 60532
-----------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: (630) 241-4141
----------------
Date of fiscal year end: DECEMBER 31
-----------------
Date of reporting period: JUNE 30, 2005
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
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 Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY
INCOME FUND
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED JUNE 30, 2005
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TABLE OF CONTENTS
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005
Shareholder Letter ................................................... 1
Portfolio Components ................................................. 2
Portfolio of Investments ............................................. 3
Schedule of Credit Default Swaps ..................................... 8
Schedule of Forward Foreign Currency Contracts ....................... 9
Statement of Assets and Liabilities .................................. 10
Statement of Operations .............................................. 11
Statements of Changes in Net Assets .................................. 12
Statement of Cash Flows .............................................. 13
Financial Highlights ................................................. 14
Notes to Financial Statements ........................................ 15
Additional Information ............................................... 19
Dividend Reinvestment Plan
Proxy Voting Policies and Procedures
Portfolio Holdings
Submission of Matters to a Vote of Shareholders
HOW TO READ THIS REPORT
This report contains information that can help you evaluate your investment. It
includes details about the First Trust/Aberdeen Global Opportunity Income Fund
(the "Fund") and presents data and analysis that provide insight into the Fund's
performance and investment approach.
By reading the letter from the Fund's President, James A. Bowen, you will obtain
an understanding of how the market environment affected its performance. The
statistical information that follows can help you understand the Fund's
performance.
It is important to keep in mind that the opinions expressed by Mr. Bowen and
First Trust Advisors L.P. personnel are just that: informed opinions. They
should not be considered to be promises or advice. The opinions, like the
statistics, cover the period through the date on the cover of this report. Of
course, the risks of investing in the Fund are spelled out in the prospectus.
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SHAREHOLDER LETTER
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND (FAM)
SEMI-ANNUAL REPORT
JUNE 30, 2005
Dear Shareholders:
The First Trust/Aberdeen Global Opportunity Income Fund (the "Fund") posted a
net asset value ("NAV") total return of 2.0% in the first half of 2005, vs. 3.3%
for the Lehman Global Emerging Markets Index and - 2.6% for the Lehman Global
Aggregate Index, which measures the performance of investment grade bonds. The
Fund's market price total return was -3.5% for the six months ended June 30,
2005. The Fund traded at a 4.8% discount to its NAV on June 30, 2005.
The Fund has paid out four monthly distributions of $0.13 per share including
its initial distribution paid in March 2005. The current distribution rate on
FAM was 8.5%, based on its June 30, 2005 market price.
The Fund invests in a diversified portfolio of debt securities predominantly
issued outside of the U.S. and seeks to benefit from weakness in the U.S.
dollar, interest rate environments that are less correlated to the U.S. market
and improving credit quality situations. In the first half of 2005, FAM has
encountered a stronger U.S. dollar, which rallied 7.5% against a basket of major
currencies, and some profit taking in the global and emerging debt markets in
March, but has weathered these challenges nicely, in our opinion.
Inflation rates outside of the U.S. remain fairly subdued. The Organisation for
Co-operation and Development reported that inflation in the 30 major countries
it monitors averaged 2.4% for the 12-month period ended May 2005. That rate
actually falls to 1.8% if you do not factor in the price increases for food.
Despite the high price of oil, global inflation has been contained to this
point, which is a positive for bond investors.
Credit quality retains a favorable bias according to Standard & Poor's
Corporation ("S&P"). Global default rates are low relative to historical levels.
However, for the first time in four quarters, downgrades outpaced upgrades in
the second quarter of 2005. The global downgrade ratio (downgrades to total
rating actions) for all corporate issuers increased to 54% in the second quarter
from 47% in the first quarter. General Motors Corp. and Ford Motor Co. accounted
for 53% of the total debt affected by S&P's downgrades globally. Overall, S&P
still characterizes the credit underpinnings as "solid."
We continue to appreciate your interest in the Fund.
Sincerely,
/S/ JAMES A. BOWEN
James A. Bowen
President of the First Trust/Aberdeen Global Opportunity Income Fund
August 8, 2005
Page 1
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005 (UNAUDITED)
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This Semi-Annual Report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933. Forward-looking statements
include statements regarding the goals, beliefs, plans or current expectations
of First Trust Advisors L.P. and its representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would," or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the Fund's actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this Semi-Annual Report, you are
cautioned not to place undue reliance on these forward-looking statements, which
reflect the judgment of First Trust Advisors L.P. and its representatives only
as of the date hereof. We undertake no obligation to publicly revise or update
these forward-looking statements to reflect events and circumstances that arise
after the date hereof.
PORTFOLIO COMPONENTS+*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS IN PRINTED GRAPHIC
Russia 8.2%
Mexico 7.6%
Norway 6.8%
Brazil 6.3%
Australia 5.9%
Multinational 5.4%
Venezuela 4.8%
Colombia 4.7%
Canada 4.4%
Peru 4.2%
Germany 4.1%
South Africa 4.0%
United Kingdom 3.7%
Uruguay 3.6%
New Zealand 3.6%
Netherlands 3.5%
Philippines 3.3%
Jamaica 3.1%
Poland 3.0%
Kazakhstan 2.6%
Spain 2.4%
Sweden 2.2%
Turkey 2.0%
Austria 0.4%
Indonesia 0.2%
+ Percentages are based on total investments. Please note that the percentages
on the Portfolio of Investments are based on net assets.
* Portfolio securities are included in a country based upon their underlying
credit exposure as determined by Aberdeen Asset Management Inc. -
the Sub-Advisor.
Page 2 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) (US DOLLARS)
--------------- ------------
FOREIGN BONDS AND NOTES+ - 140.1%
AUSTRALIA - 8.3%
10,500,000 Australian Government (AUD), 7.500%,
9/15/09 ................................... $ 8,710,373
11,000,000 Australian Government (AUD), 7.500%,
7/15/05 ................................... 8,376,650
5,000,000 New South Wales Treasury Corp. (AUD),
8.000%, 3/01/08 ........................... 4,052,590
8,300,000 Queensland Treasury (AUD), 6.000%, 7/14/09 ... 6,491,021
--------------
27,630,634
--------------
AUSTRIA - 0.6%
2,500,000 Republic of Austria (TRY), 14.000%, 8/03/06 .. 1,882,093
--------------
BRAZIL - 8.8%
10,000,000 Banco Bradesco (BRL), 17.500%,
12/10/07 .................................. 4,333,618
11,200,000 BIE Bank & Trust (BRL), 16.800%, 3/13/07 ..... 4,777,388
5,750,000 Citibank NA (BRL), 15.000%, 7/02/10 .......... 2,547,607
1,997,120 Citigroup Global Markets (USD), 6.000%,
4/02/08 ................................... 2,187,094
11,200,000 Electropaulo Metropolitan (BRL), 19.125%,
6/28/10 ................................... 4,796,574
7,500,000 Federal Republic of Brazil (USD), 9.250%,
10/22/10 .................................. 8,346,750
2,000,000 Petrobras International Finance (USD),
8.375%, 12/10/18 .......................... 2,135,000
--------------
29,124,031
--------------
CANADA - 6.1%
7,000,000 Canadian Government (CAD), 5.250%,
6/01/13 ................................... 6,305,485
6,700,000 Canadian Government (CAD), 5.750%,
6/01/29 ................................... 6,644,440
10,965,000 Province of Ontario (NZD), 6.250%,
6/16/15 ................................... 7,536,146
--------------
20,486,071
--------------
COLOMBIA - 6.5%
24,113,000,000 Republic of Colombia (COP),
11.750%, 3/01/10 .......................... 10,997,778
24,739,000,000 Republic of Colombia (COP), 12.000%,
10/22/15 .................................. 10,712,740
--------------
21,710,518
--------------
See Notes to Financial Statements. Page 3
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) (US DOLLARS)
--------------- ------------
FOREIGN BONDS AND NOTES+ - CONTINUED
GERMANY - 5.7%
4,600,000 KfW Bankengruppe (GBP), 4.750%,
12/07/10 .................................. $ 8,384,752
3,650,000 KfW International Finance (CAD), 4.950%,
10/14/14 .................................. 3,186,600
11,000,000 KfW Kredit Wiederaufbau (NZD), 6.000%,
7/15/09 ................................... 7,564,488
--------------
19,135,840
--------------
INDONESIA - 0.3%
8,000,000,000 Indonesia Recapital Bond (IDR), 14.000%,
6/15/09 ................................... 903,829
--------------
JAMAICA - 4.3%
3,000,000 Government of Jamaica (EUR), 11.000%,
7/27/12 ................................... 4,149,043
7,450,000 Government of Jamaica (EUR), 10.500%,
10/27/14 .................................. 10,150,731
--------------
14,299,774
--------------
KAZAKHSTAN - 3.7%
6,000,000 Kazkommerts International BV (USD),
7.875%, 4/07/14 ........................... 6,158,401
6,000,000 TuranAlem Finance BV (USD), 8.000%,
3/24/14 ................................... 6,075,120
--------------
12,233,521
--------------
MEXICO - 10.6%
61,355,100 Mexican Fixed Rate Bonds (MXN), 9.500%,
12/18/14 .................................. 5,779,846
10,000,000 Pemex Project Funding Master Trust (USD),
7.750%, 9/29/49 ........................... 10,120,210
246,000,000 United Mexican States (MXN), 8.000%,
12/07/23 .................................. 19,470,905
--------------
35,370,961
--------------
MULTINATIONAL - 7.6%
8,400,000 European Investment Bank (AUD), 5.750%,
9/15/09 ................................... 6,480,694
4,400,000 European Investment Bank (GBP), 7.625%,
12/07/07 .................................. 8,485,637
6,500,000 European Investment Bank (NZD), 6.500%,
9/10/14 ................................... 4,574,619
2,000,000 European Investment Bank (TRY), 14.500%,
2/21/07 ................................... 1,517,174
2,240,000 Nordic Investment Bank (GBP), 5.750%,
11/06/08 .................................. 4,193,402
--------------
25,251,526
--------------
Page 4 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) (US DOLLARS)
--------------- ------------
FOREIGN BONDS AND NOTES+ - CONTINUED
NETHERLANDS - 4.9%
4,900,000 Bank Nederlandse Gemeenten NV (GBP),
4.625%, 12/07/06 .......................... $ 8,840,858
11,000,000 Bank Nederlandse Gemeenten NV (NZD),
5.250%, 6/17/09 ........................... 7,396,781
--------------
16,237,639
--------------
NEW ZEALAND - 5.0%
11,700,000 Government of New Zealand (NZD), 7.000%,
7/15/09 ................................... 8,476,775
12,000,000 Government of New Zealand (NZD), 6.500%,
2/15/06 ................................... 8,356,195
--------------
16,832,970
--------------
NORWAY - 9.5%
11,000,000 Eksportsfinans (TRY), 14.625%, 3/15/07 ....... 8,297,332
11,300,000 Kommunalbanken (TRY), 14.750%, 2/09/09 ....... 8,569,910
8,600,000 Kommunalbanken AS (AUD), 5.750%,
10/15/07 .................................. 6,568,355
4,500,000 Kommunalbanken AS (GBP), 4.750%,
1/28/10 ................................... 8,197,298
--------------
31,632,895
--------------
PERU - 5.9%
23,750,000 Peru Bono Soberano (PEN), 9.910%, 5/05/15 .... 7,818,453
4,000,000 Republic of Peru (USD), 9.875%, 2/06/15 ...... 4,980,001
6,000,000 Republic of Peru (USD), 8.750%, 11/21/33 ..... 6,783,300
--------------
19,581,754
--------------
PHILIPPINES - 4.6%
9,000,000 Republic of Philippines (USD), 9.500%,
2/02/30 ................................... 9,219,150
6,000,000 Republic of Philippines (USD), 8.875%,
3/17/15 ................................... 6,267,300
--------------
15,486,450
--------------
POLAND - 4.2%
23,000,000 Poland Government (PLZ), 6.000%, 5/24/09 ..... 7,211,130
22,200,000 Poland Government (PLZ), 5.000%,
10/24/13 .................................. 6,823,818
--------------
14,034,948
--------------
RUSSIA - 11.5%
13,420,000 Alrosa Company SA (USD), 8.875%,
11/17/14 .................................. 15,286,722
3,000,000 Aries Vermogensverwaltung GM (USD),
9.600%, 10/25/14 .......................... 3,893,868
See Notes to Financial Statements. Page 5
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) (US DOLLARS)
--------------- ------------
FOREIGN BONDS AND NOTES+ - CONTINUED
RUSSIA - (CONTINUED)
5,000,000 Russian Stand Bank (USD), 8.125%,
4/21/08 ................................... $ 5,051,751
14,000,000 UBS Luxembourg (Vimpelcom) (USD),
8.000%, 2/11/10 ........................... 14,128,100
--------------
38,360,441
--------------
SOUTH AFRICA - 5.6%
124,600,000 Republic of South Africa (ZAR), 8.000%,
12/21/18 .................................. 18,725,392
--------------
SPAIN - 3.4%
8,700,000 Instituto de Credito Oficial (AUD), 5.500%,
11/15/06 .................................. 6,614,944
5,250,000 Instituto de Credito Oficial (CAD), 5.000%,
3/31/20 ................................... 4,547,257
--------------
11,162,201
--------------
SWEDEN - 3.1%
7,000,000 Swedish Export Credit (NZD), 6.000%,
12/19/08 .................................. 4,787,589
8,000,000 Swedish Export Credit (NZD), 4.300%,
6/26/06 ................................... 5,431,310
--------------
10,218,899
--------------
TURKEY - 2.8%
8,900,000 Finans Capital Finance Ltd. (USD), 9.000%,
10/07/14 .................................. 9,350,785
--------------
UNITED KINGDOM - 5.2%
3,100,000 United Kingdom Treasury (GBP), 5.750%,
12/07/09 .................................. 5,937,660
3,100,000 United Kingdom Treasury (GBP), 5.000%,
3/07/08 ................................... 5,694,411
3,000,000 United Kingdom Treasury (GBP), 7.250%,
12/07/07 .................................. 5,773,450
--------------
17,405,521
--------------
URUGUAY - 5.1%
8,750,000 Republic of Uruguay (USD), 9.250%, 5/17/17 ... 9,362,500
177,300,000 Republica Orient Uruguay (UYU), 17.750%,
2/04/06 ................................... 7,523,978
--------------
16,886,478
--------------
Page 6 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL MARKET
VALUE VALUE
(LOCAL CURRENCY) (US DOLLARS)
--------------- ------------
FOREIGN BONDS AND NOTES+ - CONTINUED
VENEZUELA - 6.8%
19,200,000 Republic of Venezuela (USD), 8.500%,
10/08/14 .................................. $ 19,990,080
2,500,000 Republic of Venezuela (USD), 9.250%,
9/15/27 ................................... 2,630,000
--------------
22,620,080
--------------
TOTAL FOREIGN BONDS AND NOTES+ ............... 466,565,251
--------------
(Cost $461,138,724)
TOTAL INVESTMENTS - 140.1% ................... 466,565,251
(Cost $461,138,724)
LOAN OUTSTANDING - (43.8)% ................... (145,826,536)
--------------
NET OTHER ASSETS AND LIABILITIES - 3.7% ...... 12,379,014
--------------
NET ASSETS - 100.0% .......................... $ 333,117,729
==============
---------------------------------------------------------------------------
* Aggregate cost is the same for federal tax and financial
reporting purposes
+ Portfolio securities are included in a country based upon their
underlying credit exposure as determined by Aberdeen Asset
Management Inc. - the Sub-Advisor.
AUD Australian Dollar
BRL Brazilian Real
CAD Canadian Dollar
COP Colombian Peso
EUR European Monetary Unit
GBP British Pound Sterling
IDR Indonesian Rupiah
JPY Japanese Yen
KRW South Korean Won
MXN Mexican Peso
NZD New Zealand Dollar
PEN Peruvian New Sol
PLZ Polish Zloty
SEK Swedish Krona
SGD Singapore Dollar
TRY Turkish Lira
TWD Taiwan Dollar
USD United States Dollar
UYU Uruguay Peso
ZAR South African Rand
See Notes to Financial Statements. Page 7
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
SCHEDULE OF CREDIT DEFAULT SWAPS
JUNE 30, 2005 (UNAUDITED)
UNREALIZED
BUY/SELL PAY/RECEIVE EXPIRATION NOTIONAL APPRECIATION/
COUNTERPARTY REFERENCE ENTITY PROTECTION FIXED RATE DATE AMOUNT (DEPRECIATION)
---------------------------------------------------------------------------------------------------------------------------
Citigroup Global Capital Federal Republic of Brazil
Markets Ltd. 12.250% due 03/06/30 Sell 4.320% 04/20/10 $8,000,000 $ (381,594)
Citigroup Global Capital Republic of Philippines
Markets Ltd. 10.625% due 03/16/25 Sell 4.110% 06/20/10 10,000,000 (73,159)
--------------
$ (454,753)
==============
Page 8 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
JUNE 30, 2005 (UNAUDITED)
FORWARD FOREIGN CURRENCY CONTRACTS TO BUY
CONTRACTS TO RECEIVE
--------------------------------------------------------------------- NET
UNREALIZED
IN APPRECIATION/
EXPIRATION LOCAL VALUE IN EXCHANGE (DEPRECIATION)
DATE CURRENCY* U.S. $ FOR U.S. $ OF CONTRACTS
---------- ------------------------- ---------- ----------- -----------------
07/05/05 BRL 14,000,000 5,988,938 5,721,291 $ 267,647
07/20/05 JPY 1,088,246,000 9,830,462 10,000,000 (169,538)
07/27/05 JPY 2,277,496,200 20,587,100 21,000,000 (412,900)
07/20/05 KRW 4,554,675,000 4,401,752 4,500,000 (98,248)
07/27/05 KRW 28,282,800,000 27,331,196 28,000,000 (668,804)
07/20/05 SEK 33,400,000 4,268,813 4,423,691 (154,878)
07/20/05 SGD 15,041,250 8,928,887 9,000,000 (71,113)
07/27/05 SGD 33,380,000 19,820,735 20,000,000 (179,265)
07/20/05 TWD 313,600,000 9,888,811 10,000,000 (111,189)
-----------------
$ (1,598,288)
=================
FORWARD FOREIGN CURRENCY CONTRACTS TO SELL
CONTRACTS TO DELIVER
--------------------------------------------------------------------- NET
UNREALIZED
IN APPRECIATION/
EXPIRATION LOCAL VALUE IN EXCHANGE (DEPRECIATION)
DATE CURRENCY* U.S. $ FOR U.S. $ OF CONTRACTS
---------- ------------------------- ---------- ----------- -----------------
07/27/05 AUD 62,000,000 47,113,118 47,850,670 $ 737,552
07/05/05 BRL 14,000,000 5,988,938 5,754,213 (234,725)
07/20/05 CAD 19,700,000 16,086,254 15,929,851 (156,403)
07/20/05 GBP 23,600,000 42,250,997 42,966,443 715,446
07/20/05 KRW 4,554,675,000 4,401,752 4,418,154 16,402
07/27/05 KRW 28,282,800,000 27,331,196 27,435,056 103,860
07/20/05 NZD 28,400,000 19,721,846 20,173,940 452,094
07/27/05 NZD 51,000,000 35,390,430 36,024,870 634,440
07/20/05 SEK 33,400,000 4,279,855 4,380,098 100,243
07/20/05 TWD 313,600,000 9,888,811 9,900,552 11,741
-----------------
$ 2,380,650
=================
Net Unrealized Appreciation of Forward Foreign Currency Contracts $ 782,362
=================
* Please see page 7 for currency descriptions.
See Notes to Financial Statements. Page 9
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ASSETS:
Investments, at value
(Cost $461,138,724) ..................................................................... $466,565,251
Cash ....................................................................................... 11,861,378
Foreign currency (Cost $282,739) ........................................................... 279,912
Interest receivable ........................................................................ 12,281,323
Receivable for investment securities sold .................................................. 1,885,875
Unrealized appreciation on forward foreign currency contracts .............................. 782,362
Prepaid expenses ........................................................................... 220,676
-------------
Total Assets .......................................................................... 493,876,777
-------------
LIABILITIES:
Outstanding loan payable ................................................................... 145,826,536
Payable for investment securities purchased ................................................ 11,980,723
Interest and fees due on loan payable ...................................................... 1,822,752
Unrealized depreciation on credit default swap contracts ................................... 454,753
Investment advisory fee payable ............................................................ 392,183
Interest on swap contracts ................................................................. 159,311
Custodian fee payable ...................................................................... 46,850
Payable to administrator ................................................................... 34,662
Accrued expenses and other payables ........................................................ 41,278
-------------
Total Liabilities ..................................................................... 160,759,048
-------------
NET ASSETS ................................................................................. $333,117,729
=============
NET ASSETS CONSIST OF:
Undistributed net investment income ........................................................ $ 2,051,720
Accumulated net realized loss on investments sold, forward foreign currency
contracts and foreign currencies and net other assets .................................. (9,594,846)
Net unrealized appreciation of investments, forward foreign currency contracts,
swap contracts and foreign currencies and net other assets ............................. 9,679,457
Par value .................................................................................. 173,652
Paid-in capital ............................................................................ 330,807,746
-------------
Total Net Assets ...................................................................... $333,117,729
=============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) ....................... $ 19.18
=============
Number of Common Shares outstanding ........................................................ 17,365,236
=============
Page 10 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
INVESTMENT INCOME:
Interest (net of foreign withholding tax of $313,787) ..................................... $ 15,871,105
-------------
Total investment income ............................................................... 15,871,105
-------------
EXPENSES:
Investment advisory fee .................................................................... 2,322,879
Interest and fees on outstanding loan payable .............................................. 2,271,405
Administration fee ......................................................................... 205,666
Custodian fees ............................................................................. 140,363
Audit and legal fees ....................................................................... 59,611
Printing fees .............................................................................. 55,894
Trustees' fees and expenses ................................................................ 20,562
Transfer agent fees ........................................................................ 15,000
Other ...................................................................................... 81,669
-------------
Total expenses ........................................................................ 5,173,049
-------------
NET INVESTMENT INCOME ...................................................................... 10,698,056
-------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on:
Investments sold ...................................................................... (2,591,306)
Forward foreign currency contracts .................................................... (4,246,672)
Foreign currencies and net other assets ............................................... (2,756,868)
-------------
Net realized loss on investments sold during the period .................................... (9,594,846)
-------------
Net change in unrealized appreciation/(depreciation) of:
Investments ........................................................................... 1,026,938
Swap contracts ........................................................................ (454,753)
Forward foreign currency contracts .................................................... 782,362
Foreign currencies and net other assets ............................................... 3,876,360
-------------
Net change in unrealized appreciation/(depreciation) of investments during the period ...... 5,230,907
-------------
Net realized and unrealized loss on investments ............................................ (4,363,939)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................................... $ 6,334,117
=============
See Notes to Financial Statements. Page 11
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED PERIOD
06/30/2005 ENDED
(UNAUDITED) 12/31/2004*
--------------- ----------------
Net investment income ........................................................... $ 10,698,056 $ 822,392
Net realized loss on investments sold during the period ......................... (9,594,846) (438,805)
Net change in unrealized appreciation/(depreciation) of investments
during the period ............................................................ 5,230,907 4,448,550
--------------- ----------------
Net increase in net assets resulting from operations ............................ 6,334,117 4,832,137
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ........................................................... (9,029,923) --
--------------- ----------------
Total distributions to shareholders ............................................. (9,029,923) --
CAPITAL TRANSACTIONS:
Net proceeds from sale of 160,000 and 17,205,236 Common Shares .................. 3,056,000 328,620,008
Offering costs .................................................................. (6,400) (688,210)
--------------- ----------------
Net increase in net assets ...................................................... 353,794 332,763,935
NET ASSETS:
Beginning of period ............................................................. 332,763,935 --
--------------- ----------------
End of period ................................................................... $ 333,117,729 $ 332,763,935
=============== ================
Undistributed net investment income at end of period ............................ $ 2,051,720 $ 383,587
=============== ================
----------------------------------------------------------------
* The Fund commenced operations on November 16, 2004.
Page 12 See Notes to Financial Statements.
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
Cash flows from operating activities:
Investment income received ........................................... $ 9,757,499
Payment of operating expenses ........................................ (3,292,148)
Proceeds from forward foreign currency contracts ..................... (4,246,672)
Interest on swap contracts ........................................... 159,311
Proceeds from sales of long-term securities .......................... 148,677,215
Purchases of long-term securities .................................... (341,902,173)
Interest expense ..................................................... (448,653)
----------------
CASH USED BY OPERATING ACTIVITIES ......................................... $ (191,295,621)
Cash flows from financing activities:
Proceeds from Common Shares sold ..................................... 3,049,600
Distributions paid ................................................... (9,029,923)
Issuance of loan ..................................................... 145,826,536
----------------
CASH PROVIDED BY FINANCING ACTIVITIES ..................................... 139,846,213
---------------
Decrease in cash ....................................................... (51,449,408)
Cash at beginning of period ............................................ 63,590,698
---------------
Cash at end of period .................................................. $ 12,141,290
===============
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS
TO CASH USED BY OPERATING ACTIVITIES:
Net increase in net assets resulting from operations ...................... $ 6,334,117
Increase in investments* ............................................. $ (201,857,065)
Increase in interest receivable ...................................... (7,131,471)
Increase in other assets ............................................. (220,676)
Increase in receivable for investments sold .......................... (1,885,875)
Increase in payable for investments purchased ........................ 11,980,723
Increase in swap contracts ........................................... 454,753
Increase in forward foreign currency contracts ....................... (782,362)
Increase in interest expense payable ................................. 1,822,752
Increase in interest on swap contracts ............................... 159,311
Decrease in accrued expenses ......................................... (169,828)
----------------
CASH USED BY OPERATING ACTIVITIES ......................................... $ (191,295,621)
===============
-----------------------------------------------------------------------
* Includes net change in unrealized appreciation of investments of $1,026,938.
See Notes to Financial Statements. Page 13
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED PERIOD
06/30/2005 ENDED
(UNAUDITED) 12/31/2004*
------------ ------------
Net asset value, beginning of period .......................................... $ 19.34 $ 19.10
------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... 0.62 0.05
Net realized and unrealized gain/(loss) on investments ........................ (0.26) 0.23
------------ ------------
Total from investment operations .............................................. 0.36 0.28
------------ ------------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income ......................................................... (0.52) --
------------ ------------
Total from distributions ...................................................... (0.52) --
------------ ------------
Common shares offering costs charged to paid-in capital ....................... -- (0.04)
------------ ------------
Net asset value, end of period ................................................ $ 19.18 $ 19.34
============ ============
Market value, end of period ................................................... $ 18.25 $ 19.45
============ ============
TOTAL RETURN BASED ON NET ASSET VALUE (A)+ .................................... 2.04% 1.26%
============ ============
TOTAL RETURN BASED ON MARKET VALUE (B)+ ....................................... (3.45)% (2.75)%
============ ============
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
NET ASSETS, END OF PERIOD (IN 000'S) .......................................... $ 333,118 $ 332,764
Ratio of total expenses to average net assets excluding interest expense ...... 1.77%** 1.44%**
Ratio of total expenses to average net assets ................................. 3.16%** N/A
Ratio of net investment income to average net assets .......................... 6.53%** 2.47%**
Portfolio turnover rate ....................................................... 35.09% 0.00%
SENIOR INDEBTEDNESS:
Loan outstanding (in 000's) ................................................... $ 145,827 N/A
Asset coverage per $1,000 of indebtedness (c) ................................. $ 3,284 N/A
--------------------------------------------------
* The Fund commenced operations on November 16, 2004.
** Annualized.
(a) Total return based on net asset value is the combination of reinvested
dividend income and reinvested capital gains distributions, at prices
obtained by the Dividend Reinvestment Plan, if any, and changes in net
asset value per share and does not reflect sales load.
(b) Total return based on market value is the combination of reinvested
dividend income and reinvested capital gains distributions, at prices
obtained by the Dividend Reinvestment Plan, if any, and changes in Common
Share price per share, all based on market price per share.
(c) Calculated by subtracting the Fund's total liabilities (not including the
loan outstanding) from the Fund's total assets, and dividing by the amount
of senior indebtedness.
+ Total return is not annualized for periods less than one year.
N/A Not applicable.
Page 14 See Notes to Financial Statements.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005 (UNAUDITED)
1. FUND DESCRIPTION
First Trust/Aberdeen Global Opportunity Income Fund (the "Fund") is a
diversified, closed-end management investment company organized as a
Massachusetts business trust on September 7, 2004 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 FAM
on the New York Stock Exchange ("NYSE").
The Fund's primary investment objective is to seek a high level of current
income. As a secondary objective, the Fund will seek capital appreciation. The
Fund will pursue these objectives by investing in the world bond markets through
a diversified portfolio of investment grade and below-investment grade
government and corporate debt securities. There can be no assurance that the
Fund's investment objectives will be achieved.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
PORTFOLIO VALUATION:
The net asset value ("NAV") of the Common Shares of the Fund is computed based
upon the value of the Fund's portfolio and other assets. The NAV is determined
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. Domestic debt securities and foreign
securities are priced using data reflecting the earlier closing of the principal
markets for those securities. The Fund calculates NAV per Common Share by
subtracting the Fund's liabilities (including accrued expenses, dividends
payable and any borrowings of the Fund) and the liquidation value of any
outstanding Preferred Shares from the Fund's Managed Assets (the value of the
securities and other investments the Fund holds plus cash or other assets,
including interest accrued but not yet received minus accrued liabilities other
than the principal amount of borrowings) and dividing the result by the total
number of Common Shares outstanding.
The Fund's investments are valued daily at market value, or in the absence of
market value with respect to any portfolio securities, at fair value according
to procedures adopted by the Fund's Board of Trustees. A majority of the Fund's
assets are valued using market information supplied by third parties. In
addition, structured products, including currency-linked notes, credit-linked
notes as well as interest rate swaps and credit default swaps, are valued using
a pricing service or quotes provided by the selling dealer or financial
institution. 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, or if events occurring after the close of the
principal markets for particular securities (e.g., domestic debt and foreign
securities), but before the Fund values its assets, would materially affect NAV,
First Trust Advisors L.P. ("First Trust") may use a fair value method to value
the Fund's securities and investments. The use of fair value pricing by the Fund
is governed by valuation procedures adopted by the Fund's Board of Trustees, in
accordance with the provisions of the 1940 Act.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on the accrual basis, including amortization of premiums and accretion of
discounts.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income on such securities
is not accrued until settlement date. The Fund instructs the custodian to
segregate assets of the Fund with a current value at least equal to the amount
of its when-issued purchase commitments.
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. Unrealized gains and
losses which result from changes in foreign currency exchange rates have been
included in the net change in unrealized appreciation/(depreciation) of foreign
currencies and net other assets in the Statement of Operations. 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
Page 15
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005 (UNAUDITED)
dividends received. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase trade date and
subsequent sale trade date is included in the net realized gains and losses on
foreign currencies and net other assets in the Statement of Operations.
FORWARD FOREIGN CURRENCY CONTRACTS:
Forward foreign currency contracts are agreements to exchange one currency for
another at a future date and at a specified price. The Fund may use 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 in the Statement of Assets and Liabilities.
Realized and unrealized gains and losses are included in the Statement of
Operations. 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 up to the
entire contract amount, which may exceed the net unrealized value shown in the
Statements of Assets and Liabilities.
CREDIT DEFAULT SWAP CONTRACTS:
The Fund has entered into credit default swap contracts with the Fund being the
"buyer" and the counterparty the "seller" in these transactions. As a buyer of
the credit default swap contracts, the Fund is obligated to pay the counterparty
a periodic stream of payments over the term of the contract provided that no
event of default (e.g., grace period extension, obligation acceleration,
repudiation/moratorium, or restructuring) relating to the security occurs or
until the termination of the swap contract, whichever is first. If no event of
default occurs, the Fund will have made a series of periodic payments and
recover nothing of monetary value. If an event of default occurs, the
counterparty must pay the Fund the full notional value, or "par value," of the
specified security. The amount of the cash payment from the counterparty to the
Fund is based on the difference of the par value of the specified security that
may have, through default, lost some, most or all of its value. Credit default
swap transactions are entered into for hedging or investment purposes.
The Fund purchases credit default swap contracts in order to hedge against the
risk of a fall in the capital price, or default, of debt securities it holds.
This involves the risk that the swap may expire worthless and the credit risk
that the seller may fail to satisfy its payment obligations to the Fund in the
event of a default. The Fund may only enter into such transactions with
counterparties rated A- or higher.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
The Fund will distribute to holders of its Common Shares monthly dividends of
all or a portion of its net income after the payment of interest and dividends
in connection with the leverage. If the Fund recognizes a long-term capital
gain, it will be required to allocate such gain between the Common Shares and
Preferred Shares, if any, issued by the Fund in proportion to the total
dividends paid for the year. Distributions will automatically be reinvested into
additional Common Shares pursuant to the Fund's Dividend Reinvestment Plan
unless cash distributions are elected by the shareholder.
Distributions from income and capital gains are determined in accordance with
income tax regulations, which may differ from accounting principles generally
accepted in the United States of America. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund, timing differences and differing characterization of distributions
made by the Fund.
As of December 31, 2004, the components of distributable earnings on a tax basis
were as follows:
Ordinary Income ............................... $ 822,392
INCOME TAXES:
The Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, and by distributing substantially all of its net investment
income and net realized gains to shareholders. Accordingly, no provision has
been made for federal or state income taxes.
Page 16
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005 (UNAUDITED)
EXPENSES:
The Fund pays all expenses directly related to its operations.
ORGANIZATIONAL AND OFFERING COSTS:
Organization costs consist of costs incurred to establish the Fund and enable it
to legally do business. These costs include filing fees, listing fees, legal
services pertaining to the organization of the business and audit fees relating
to the initial registration and auditing the initial statement of assets and
liabilities, among other fees. Offering costs consist of legal fees pertaining
to the Fund's shares offered for sale, registration fees, underwriting fees, and
printing of the initial prospectus, among other fees. First Trust and Aberdeen
Asset Management Inc. have paid all organizational expenses and all offering
costs of the Fund (other than sales load) that exceeded $0.04 per Common Share.
The Fund's share of Common Share offering costs, $688,210 and $6,400 in 2004 and
2005, respectively, was recorded as a reduction of the proceeds from the sale of
Common Shares.
3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
First Trust is a limited partnership with one limited partner, Grace Partners of
DuPage L.P., and one general partner, The Charger Corporation. First Trust
serves as investment advisor to the Fund pursuant to an Investment Management
Agreement. First Trust is responsible for the ongoing monitoring of the Fund's
investment portfolio, managing the Fund's business affairs and certain
administrative services necessary for the management of the Fund. For these
investment management services, First Trust is entitled to a monthly fee
calculated at an annual rate of 1.00% of the Fund's Managed Assets.
Aberdeen Asset Management Inc. (the "Sub-Advisor") serves as the Fund's
sub-advisor and manages the Fund's portfolio subject to First Trust's
supervision. The Sub-Advisor receives a portfolio management fee of 0.50% of
Managed Assets that is paid monthly by First Trust out of its investment
advisory fee.
PFPC Inc. ("PFPC"), an indirect, majority-owned subsidiary of The PNC Financial
Services Group Inc., serves as the Fund's Administrator and Transfer Agent in
accordance with certain fee arrangements. PFPC Trust Company, an indirect,
majority-owned subsidiary of The PNC Financial Services Group Inc., serves as
the Fund's Custodian in accordance with certain fee arrangements.
The Fund pays each Trustee who is not an officer or employee of First Trust or
any of its affiliates an annual retainer of $10,000 which includes compensation
for all regular quarterly board meetings and regular committee meetings. No
additional meeting fees are paid in connection with regular quarterly board
meetings or regular committee meetings. Additional fees of $1,000 and $500 are
paid to non-interested Trustees for special board meetings and non-regular
committee meetings, respectively. These additional fees are shared by the funds
in the First Trust fund complex that participate in the particular meeting and
are not per fund fees. Trustees are also reimbursed for travel and out-of-pocket
expenses in connection with all meetings.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, other than U.S.
government obligations and short-term obligations, for the six months ended June
30, 2005, aggregated amounts were $357,759,256 and $153,319,358, respectively.
As of June 30, 2005, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $10,754,195,
and the aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $5,327,668.
5. COMMON SHARES
As of June 30, 2005, 17,365,236 of $0.01 par value Common Shares were issued. An
unlimited number of Common Shares has been authorized under the Fund's Dividend
Reinvestment Plan.
COMMON SHARE TRANSACTIONS WERE AS FOLLOWS:
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 2005 DECEMBER 31, 2004
------------- -----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ -------
Proceeds from shares sold .......... 160,000 $3,056,000 17,205,236 $328,620,008
Offering costs ..................... -- (6,400) -- (688,210)
------- ---------- ---------- ------------
160,000 $3,049,600 17,205,236 $327,931,798
======= ========== ========== ============
Page 17
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005 (UNAUDITED)
6. PREFERRED SHARES OF BENEFICIAL INTEREST
The Fund's Declaration of Trust authorizes the issuance of an unlimited number
of preferred shares of beneficial interest, par value $0.01 per share (the
"Preferred Shares"), in one or more classes or series, with rights as determined
by the Board of Trustees without the approval of Common Shareholders. As of June
30, 2005, no Preferred Shares had been issued.
7. REVOLVING LOAN AGREEMENT
On January 10, 2005, the Fund entered into a revolving loan agreement among the
Fund and certain primary and secondary lenders, which provides for a loan
agreement facility to be used as leverage for the Fund. The credit facility
provides for a secured line of credit for the Fund where Fund assets are pledged
against advances made to the Fund. Under the requirements of the 1940 Act, the
Fund, immediately after any such borrowings, must have an "asset coverage" of at
least 300% (331/3% of the Fund's total assets after borrowings). The total
commitment under the facility is up to $165,000,000. For the six months ended
June 30, 2005, the average amount outstanding was $138,257,532, with a weighted
average interest rate of 3.03%. The Fund also pays a commitment fee of 0.325%
per year, which is included in interest and fees on outstanding loan payable on
the Statement of Operations.
8. CONCENTRATION OF RISK
An investment in the Fund's Common Shares is subject to investment risk,
including the possible loss of the entire principal invested. An investment in
Common Shares represents an indirect investment in the securities owned by the
Fund, which include a global bond portfolio of investment grade and
below-investment grade government and corporate debt securities. The value of
these securities, like other market investments, may move up or down, sometimes
rapidly and unpredictably. Common Shares at any point in time may be worth less
than the original investment, even after taking into account the reinvestment of
Fund dividends and distributions. Security prices can fluctuate for several
reasons including the general condition of the bond market, or when political or
economic events affecting the issuers occur.
Non-Investment Grade Securities Risk: The Fund may invest up to 60% of its
Managed Assets in non-investment grade securities. Non-investment grade
securities are rated below "Baa3" by Moody's Investors Services, Inc., below
"BBB-" by Standard & Poors, or comparably rated by another nationally recognized
statistical rating organization or, if unrated, determined by the Sub-Advisor to
be of comparable credit quality. Non-investment grade debt instruments are
commonly referred to as "high yield" or "junk" bonds, are considered speculative
with respect to the issuer's capacity to pay interest and repay principal and
are susceptible to default or decline in market value due to adverse economic
and business developments. The market values for high yield securities tend to
be very volatile, and these securities are less liquid than investment grade
debt securities.
9. SUBSEQUENT EVENTS
On June 20, 2005, the Fund declared a dividend of $0.13 per share, which
represents a dividend from net investment income to Common Shareholders of
record July 6, 2005, payable July 15, 2005.
On July 20, 2005, the Fund declared a dividend of $0.13 per share, which
represents a dividend from net investment income to Common Shareholders of
record August 3, 2005, payable August 15, 2005.
Page 18
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005
DIVIDEND REINVESTMENT PLAN
If your Common Shares are registered directly with the Fund or if you hold your
Common Shares with a brokerage firm that participates in the Fund's Dividend
Reinvestment Plan (the "Plan"), unless you elect to receive cash distributions,
all dividends and distributions on your Common Shares, will be automatically
reinvested by PFPC Inc. (the "Plan Agent"), in additional Common Shares under
the Plan. If you elect to receive cash distributions, you will receive all
distributions in cash paid by check mailed directly to you by PFPC Inc., as the
dividend paying agent.
If you decide to participate in the Plan, the number of Common Shares you will
receive will be determined as follows:
(1) If the Common Shares are trading at or above net asset value at the
time of valuation, the Fund will issue new shares at a price equal to
the greater of (i) net asset value per Common Share on that date or
(ii) 95% of the market price on that date.
(2) If the Common Shares are trading below net asset value at the time of
valuation, the Plan Agent will receive the dividend or distribution in
cash and will purchase Common Shares in the open market, on the NYSE
or elsewhere, for the participants' accounts. It is possible that the
market price for the Common Shares may increase before the Plan Agent
has completed its purchases. Therefore, the average purchase price per
share paid by the Plan Agent may exceed the market price at the time
of valuation, resulting in the purchase of fewer shares than if the
dividend or distribution had been paid in Common Shares issued by the
Fund. The Plan Agent will use all dividends and distributions received
in cash to purchase Common Shares in the open market within 30 days of
the valuation date except where temporary curtailment or suspension of
purchases is necessary to comply with federal securities laws.
Interest will not be paid on any uninvested cash payments.
You may withdraw from the Plan at any time by giving written notice to the Plan
Agent, or by telephone in accordance with such reasonable requirements as the
Plan Agent and Fund may agree upon. If you withdraw or the Plan is terminated,
you will receive a certificate for each whole share in your account under the
Plan and you will receive a cash payment for any fraction of a share in your
account. If you wish, the Plan Agent will sell your shares and send you the
proceeds, minus brokerage commissions.
The Plan Agent maintains all shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
you may need for tax records. Common Shares in your account will be held by the
Plan Agent in non-certificated form. The Plan Agent will forward to each
participant any proxy solicitation material and will vote any shares so held
only in accordance with proxies returned to the Fund. Any proxy you receive will
include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions
in Common Shares. However, all participants will pay a pro rata share of
brokerage commissions incurred by the Plan Agent when it makes open market
purchases.
Automatically reinvesting dividends and distributions does not mean that you do
not have to pay income taxes due upon receiving dividends and distributions.
Capital gains and income are realized, although cash is not received by you.
If you hold your Common Shares with a brokerage firm that does not participate
in the Plan, you will not be able to participate in the Plan and any dividend
reinvestment may be effected on different terms than those described above.
The Fund reserves the right to amend or terminate the Plan if in the judgment of
the Board of Trustees the change is warranted. There is no direct service charge
to participants in the Plan; however, the Fund reserves the right to amend the
Plan to include a service charge payable by the participants. Additional
information about the Plan may be obtained by writing PFPC Inc., 301 Bellevue
Parkway, Wilmington, Delaware 19809.
--------------------------------------------------------------------------------
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Fund uses to determine how
to vote proxies and information how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available (1)
without charge, upon request, by calling (800) 988-5891; (2) on the Fund's
website located at http://www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's website at http://www.sec.gov.
Page 19
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (UNAUDITED) - (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
JUNE 30, 2005
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available (1) by calling (800)
988-5891; (2) on the Fund's website located at http://www.ftportfolios.com; (3)
on the SEC's website at http://www.sec.gov; and (4) for review and copying at
the SEC's Public Reference Room ("PRR") in Washington, DC. Information regarding
the operation of the PRR may be obtained by calling 1-800-SEC-0330.
SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Joint Annual Meeting of Shareholders of Energy Income and Growth Fund, First
Trust Value Line(R) 100 Fund, First Trust/Fiduciary Asset Management Covered
Call Fund and First Trust/Aberdeen Global Opportunity Income Fund was held on
April 18, 2005. At the Annual Meeting the Fund's Board of Trustees, consisting
of James A. Bowen, Niel B. Nielson, Thomas R. Kadlec, Richard E. Erickson and
David M. Oster, were elected to serve an additional one year term. The number of
votes cast for James A. Bowen was 13,535,271, the number of votes withheld was
108,359 and the number of abstentions was 3,721,606. The number of votes cast
for Niel B. Nielson was 13,536,397, the number of votes withheld was 107,233 and
the number of abstentions was 3,721,606. The number of votes cast for Richard E.
Erickson was 13,549,512, the number of votes withheld was 94,118 and the number
of abstentions was 3,721,606. The number of votes cast for Thomas R. Kadlec was
13,546,021, the number of votes withheld was 97,609 and the number of
abstentions was 3,721,606. The number of votes cast for David M. Oster was
13,548,647, the number of votes withheld was 94,983 and the number of
abstentions was 3,721,606.
Page 20
[NOTE TO FINANCIAL PRINTER: Insert a copy of the report transmitted to
stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1) HERE.]
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not yet applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
None.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. 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 second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act
and Section 302 of the Sarbanes-Oxley Act of 2002 are
attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act
and Section 906 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 GLOBAL OPPORTUNITY INCOME FUND
By (Signature and Title)* /S/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chairman of the Board,
President and Chief Executive Officer
(principal executive officer)
Date SEPTEMBER 1, 2005
----------------------------------------------------------------------------
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/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chairman of the Board,
President and Chief Executive Officer
(principal executive officer)
Date SEPTEMBER 1, 2005
----------------------------------------------------------------------------
By (Signature and Title)* /S/ MARK R. BRADLEY
-------------------------------------------------------
Mark R. Bradley, Treasurer, Controller,
Chief Financial Officer and Chief Accounting
Officer (principal financial officer)
Date SEPTEMBER 1, 2005
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.