Item 7. Disclosure of Proxy Voting
Policies and Procedures for Closed-End Management Investment Companies.
ASI U.S. Registered Advisers (the “ASI
Advisers”)
Proxy Voting Guidelines
Effective as of January 1, 2021
Rule 206(4)-6 under the Investment Advisers
Act of 1940, as amended (the “Advisers Act”) requires the ASI Advisers to vote proxies in a manner consistent with clients’
best interest and must not place its interests above those of its clients when doing so. It requires the ASI Advisers to: (i) adopt and
implement written policies and procedures that are reasonably designed to ensure that the ASI Advisers vote proxies in the best interest
of the clients, and (ii) to disclose to the clients how they may obtain information on how the ASI Advisers voted proxies. In addition,
Rule 204-2 requires the ASI Advisers to keep records of proxy voting and client requests for information.
As registered investment advisers, the
ASI Advisers have an obligation to vote proxies with respect to securities held in its client portfolios in the best interests of the
clients for which it has proxy voting authority.
The ASI Advisers are committed to exercising
responsible ownership with a conviction that companies adopting best practices in corporate governance will be more successful in their
core activities and deliver enhanced returns to shareholders.
The ASI Advisers have adopted a proxy
voting policy. The proxy voting policy is designed and implemented in a way that is reasonably expected to ensure that proxies are voted
in the best interests of clients.
Voting decisions are made by the ASI Advisers’
investment teams, and are based on their knowledge of the company and discussions with management – ASI Advisers’ investment
managers consider explanations from companies about their compliance with relevant corporate governance codes and may refer to independent
research from voting advisory services in reaching a voting decision. However, voting decisions for exchange traded funds are made strictly
in accordance with ISS’s proxy voting guidelines which are reviewed and approved on an annual basis.
Where contentious issues arise in relation
to motions put before a shareholders’ meeting, ASI Advisers will usually contact the management of the company to exchange views
and give management the opportunity to articulate its position. The long-term nature of the relationships that we develop with investee
company boards should enable us to deal with any concerns that we may have over strategy, the management of risk or governance practices
directly with the chairman or senior independent director. In circumstances where this approach is unsuccessful, ASI Advisers are prepared
to escalate their intervention by expressing their concerns through the company’s advisers, through interaction with other shareholders
or attending and speaking at General Meetings.
In managing third party money on behalf
of clients, there are a limited number of situations where potential conflicts of interest could arise in the context of proxy voting.
One case is where funds are invested in companies that are either clients or related parties of clients. Another case is where one fund
managed by ASI invests in other funds managed by ASI.
For cases involving potential conflicts
of interest, ASI Advisers have implemented procedures to ensure the appropriate handling of proxy voting decisions. The guiding principle
of ASI Advisers’ conflicts of interest policy is simple – to exercise our right to vote in the best interests of the clients
on whose behalf we are managing funds.
We employ ISS as a service provider to
deliver our voting decisions efficiently to companies. We require ISS to provide recommendations based on our own set of parameters to
tailored ASI’s assessment and approach but remain conscious always that all voting decisions are our own on behalf of our clients.
We consider ISS’s recommendations and those based on our custom parameters as input to our voting decisions.
An ASI analyst will assess the resolutions
at general meetings in our active investment portfolios. This analysis will be based on our knowledge of the company but will also make
use of the custom and standard recommendations provided by ISS as described above. The product of this analysis will be final voting decision
instructed through ISS applied to all funds for which ASI have been appointed to vote. For funds managed by a sub-adviser, we may delegate
to the sub-adviser the authority to vote proxies; however, the sub-adviser will be required to either follow our policies and procedures
or to demonstrate that their policies and procedures are consistent with ours, or otherwise implemented in the best interest of clients.
There may be certain circumstances where
ASI may take a more limited role in voting proxies. We will not vote proxies for client accounts in which the client contract specifies
that ASI will not vote. We may abstain from voting a client proxy if the voting is uneconomic or otherwise not in clients’ best
interests. For companies held only in passively managed portfolios the ASI custom recommendations provided by ISS will be used to automatically
apply our voting approach; we have scope to intervene to test that this delivers appropriate results and will on occasions intrude to
apply a vote more fully in clients’ best interests. If voting securities are part of a securities lending program, we may be unable
to vote while the securities are on loan. However, we have the ability to recall shares on loan or to restrict lending when required,
in order to ensure all shares have voted. In addition, certain jurisdictions may impose share-blocking restrictions at various times which
may prevent ASI from exercising our voting authority.
We recognize that there may be situations
in which we vote at a company meeting where we encounter a conflict of interest. Such situations include:
| • | where a portfolio manager owns the holding in a personal account |
| • | An investee company that is also a segregated client |
| • | An investee company where an executive director or officer of our company is also a director of that company |
| • | An investee company where an employee of ASI is a director of that company |
| • | A significant distributor of our products |
| • | Any other companies which may be relevant from time to time |
In order to manage such conflicts of interests,
we have established procedures to escalate decision-making so as to ensure that our voting decisions are based on our clients’ best
interests and are not impacted by any conflict.
This policy has been developed by the
ASI corporate governance working group. The implementation of this policy, along with the conflicts of interest database, will be reviewed
periodically by the group. ASI’s Stewardship Policy is published on our website.
To the extent that an ASI Adviser may
rely on sub-advisers, whether affiliated or unaffiliated, to manage any client portfolio on a discretionary basis, the ASI Adviser may
delegate responsibility for voting proxies to the sub-adviser. However, such sub-advisers will be required either to follow these Policies
and Procedures or to demonstrate that their proxy voting policies and procedures are consistent with these Policies and Procedures or
otherwise implemented in the best interests of the ASI Advisers’ clients. Clients that have not granted ASI voting authority over
securities held in their accounts will receive their proxies in accordance with the arrangements they have made with their service providers.
As disclosed in Part 2A of each ASI Adviser’s
Form ADV, a client may obtain information on how its proxies were voted by requesting such information from its ASI Adviser. Unless specifically
requested by a client in writing, and other than as required for the Funds, the ASI Advisers do not generally disclose client-specific
proxy votes to third parties.
Our proxy voting records are available
per request and on the SEC’s website at SEC.gov.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a)(1) Identification of Portfolio Manager(s) or Management
Team Members and Description of Role of Portfolio Manager(s) or Management Team Members
Information provided as of March 11, 2022.
abrdn Inc. (“abrdn” or the “Sub-Advisor”),
a Securities and Exchange Commission registered investment advisor, is an indirect wholly owned subsidiary of abrdn plc. abrdn plc is
a publicly-traded global provider of long-term savings and investments listed on the London Stock Exchange, managing assets for institutional
and retail clients from offices around the world. Investment decisions for the Fund are made by abrdn using a team approach and not by
any one individual. By making team decisions, abrdn seeks to ensure that the investment process results in consistent returns across all
portfolios with similar objectives. abrdn does not employ separate research analysts. Instead, abrdn’s investment managers combine
analysis with portfolio management. Each member of the team has sector and portfolio responsibilities such as day-to-day monitoring of
liquidity. The overall result of this matrix approach is a high degree of cross-coverage, leading to a deeper understanding of the securities
in which abrdn invests. Below are the members of the team with significant responsibility for the day-to-day management of the Fund’s
portfolio.
Devan Kaloo
Global Head of Equities/Global Head of Public Markets
Mr. Kaloo is responsible for Equities globally and
the London based Global Emerging Market (“GEM”) Equities Team, which manages Latin America, Europe, Middle East and Africa
equities, and also has oversight of global emerging market input from the Asia research team based in Singapore, with which he works closely.
Joanne Irvine
Deputy Head of Global Emerging Markets Equities
Ms. Irvine is Deputy Head of the Global Emerging Markets
Team in London. Joanne was previously Head of Emerging Markets (ex-Asia). Joanne joined abrdn in 1996 in a group development role, and
moved to the Global Emerging Markets Equity Team in 1997.
Brett Diment
Head of Global Emerging Market Debt
Mr. Diment is Head of Global Emerging Market Debt
and joined abrdn following the acquisition of Deutsche Asset Management (“Deutsche”) in 2005. He is responsible for the day-to-day
management of the Emerging Market Debt Team and portfolios. Mr. Diment had been at Deutsche since 1991 as a member of the Fixed Income
group and served as Head of the Emerging Market Debt Team at Deutsche from 1999 until its acquisition by abrdn.
Nick Robinson
Senior Investment Director, Global Emerging Markets
Equities
Mr.
Robinson is Senior Investment Director on the Global Emerging Markets Equities Team at abrdn.
Nick joined the company in 2000 and spent eight years on the North America Equities Team, including three years based in abrdn’s
US offices. In 2008, he joined the Global Emerging Markets Equities Team.
Max Wolman
Investment Director, Global Emerging Market Debt
Mr. Wolman is an Investment Director on the Emerging
Market Debt Team and has been with abrdn since January 2001. Mr. Wolman originally specialized in currency and domestic debt analysis
but is now responsible for a wide range of emerging debt analysis including external and corporate issuers. Mr. Wolman is a member of
the Emerging Market Debt Investment Committee at abrdn and is also responsible for the daily implementation of the investment process.
Kevin Daly
Investment Director, Emerging Markets Debt
Mr. Daly is an Investment Director on the Emerging
Markets Debt team. Kevin joined abrdn in 2007.
Edwin Gutierrez
Head of Emerging Market Sovereign Debt
Mr. Gutierrez is the Head of Emerging Market Sovereign
Debt. Edwin joined abrdn via the acquisition of Deutshe Asset Management’s London and Philadelphia fixed income businesses in 2005,
where he held the same role since joining Deutsche in 2000.
Stephen Parr
Investment Director, Emerging Markets Equity
Mr. Parr is an Investment Director on the Global Emerging
Markets Equity Team. Stephen joined abrdn in July 2009 following the acquisition of certain asset management businesses from Credit Suisse
Asset Management.
| (a)(2) | Other Accounts Managed by Portfolio Manager(s) or Management Team Member and Potential Conflicts of Interest |
Other Accounts Managed by Portfolio Manager(s) or Management Team
Member
Information provided as of December 31, 2021
Name of Portfolio Manager or Team Member |
Type of Accounts |
Total
# of Accounts Managed |
Total
Assets |
# of Accounts Managed for which Advisory Fee is Based on Performance |
Total Assets for which Advisory Fee is Based on Performance |
|
|
|
|
|
|
1. Devan Kaloo |
Registered Investment Companies: |
2 |
$4,804,857,200 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
22 |
$14,079,873,500 |
0 |
$0 |
|
Other Accounts: |
23 |
$7,581,137,020 |
2 |
$1,044,595,180 |
2. Joanne Irvine |
Registered Investment Companies: |
2 |
$4,804,857,200 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
22 |
$14,079,873,500 |
2 |
$1,044,595,180 |
|
Other Accounts: |
23 |
$7,581,137,020 |
3 |
$771,730,000 |
3. Nick Robinson |
Registered Investment Companies: |
3 |
$4,804,857,200 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
22 |
$14,079,873,500 |
0 |
$0 |
|
Other Accounts: |
23 |
$7,581,137,020 |
2 |
$1,044,595,180 |
4. Brett Diment |
Registered Investment Companies: |
3 |
$1,938,732,000 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
33 |
$7,939,596,280 |
0 |
$0 |
|
Other Accounts: |
41 |
$7,015,440,140 |
1 |
$364,496,040 |
5. Max Wolman |
Registered Investment Companies: |
3 |
$1,938,732,000 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
33 |
$7,939,596,280 |
0 |
$0 |
|
Other Accounts: |
41 |
$7,015,440,140 |
1 |
$364,496,040 |
6. Kevin Daly |
Registered Investment Companies: |
3 |
$1,938,732,000 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
33 |
$7,939,596,280 |
0 |
$0 |
|
Other Accounts: |
41 |
$7,015,440,140 |
1 |
$364,496,040 |
7. Edwin Gutierrez |
Registered Investment Companies: |
3 |
$1,938,732,000 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
33 |
$7,939,596,280 |
1 |
$364,496,040 |
|
Other Accounts: |
41 |
$7,015,440,140 |
1 |
$0 |
8. Stephen Parr |
Registered Investment Companies: |
2 |
$4,804,857,200 |
0 |
$0 |
|
Other Pooled Investment Vehicles: |
22 |
$14,079,873,500 |
0 |
$0 |
|
Other Accounts: |
23 |
$7,581,137,020 |
2 |
$771,730,000 |
Potential Conflicts of Interests
As of December 31, 2021
Conflicts of Interest may arise, in the course
of providing a service, where there may be a risk of damage to the interests of a client. In accordance with legal requirements in the
various jurisdictions in which we operate, abrdn have in place arrangements to identify and manage Conflicts of Interest that may arise
between them and their clients or between their different clients. Where abrdn does not consider that these arrangements are sufficient
to manage a particular conflict, it will inform the relevant client(s) of the nature of the conflict so that the client(s) may decide
how to proceed.
abrdn or any other party to whom it may have delegated
its functions, may in its absolute discretion, effect transactions in which it or any of its affiliated companies has, directly or indirectly,
a material interest, or a relationship of any description with another party which may involve a potential conflict with abrdn’s
duty to its client. abrdn ensures that such transactions are effected on terms which are not materially less favorable to the client than
if the potential conflict had not existed.
Such potential conflicting interests or duties may, inter alia,
arise because:
| · | abrdn or an affiliated company undertakes an activity that is regulated by a relevant regulator for other
clients including its affiliated companies (and the clients of affiliated companies) |
| · | a Director or Employee of abrdn, or of an affiliated company, is a director of, holds or deals in securities
of, or is otherwise interested in, any company whose securities are held or dealt in on behalf of a client |
| · | a transaction is effected in securities issued by an affiliated company or the client of an affiliated
company |
| · | a transaction is effected in securities in respect of which abrdn or an affiliated company may benefit
from a commission, fee, mark-up or mark-down payable otherwise than by the client, and abrdn may be remunerated by the counterparty to
any such transaction |
| · | abrdn deals on behalf of the client with, or in the securities of, an affiliated company |
| · | abrdn acts as agent for the client in relation to transactions in which it is also acting as agent for
the account of other clients and/or affiliated companies |
| · | abrdn, acting as principal, sells to or purchases currency from the client and, in exceptional circumstances,
deals in securities as principal with the client |
| · | a transaction is effected in units or shares of connected investment trusts, unit trusts, open ended investment
companies or of any company of which abrdn or an affiliated company is the manager, authorized corporate director, operator, banker, adviser,
custodian, administrator, trustee or depositary |
| · | abrdn effects transactions involving placings and/or new issues with an affiliated company who may be
acting as principal or receiving agent’s commission |
| · | a transaction is effected in securities of a company for which abrdn or an affiliated company has underwritten,
or managed or arranged an issue or offer for sale within the previous 12 months |
| · | abrdn or an affiliated company receives remuneration or other benefits by reason of acting in corporate
finance or similar transactions involving a company whose securities are held by the client |
| · | a transaction is effected in securities in respect of which abrdn
or an affiliated company, or a Director or Employee of abrdn or an affiliated company, is
contemporaneously trading or has traded on its own account or has either a long or short position |
| · | abrdn acting as agent for the client, matches an order of the client with an order of another client for
whom it is acting as agent |
| · | abrdn effects transactions in investments, the prices of which are being or have been, stabilized by transactions
involving an affiliated company. |
At abrdn, existing and potential conflicts of interest are recorded
and reviewed by Risk & Compliance to ensure that internal procedures are sufficient to manage a particular conflict.
Please also refer to our Form ADV Part II for additional information
regarding Conflict of Interest.
(a)(3) Compensation Structure of Portfolio Manager(s) or Management
Team Members
Information provided as of December 31, 2021
abrdn Remuneration Language
abrdn’s remuneration
policies are designed to support its business strategy as a leading international asset manager. The objective is to attract, retain and
reward talented individuals for the delivery of sustained, superior returns for abrdn’s clients and shareholders. abrdn operates
in a highly competitive international employment market and aims to maintain its strong track record of success in developing and retaining
talent.
abrdn’s policy is
to recognize corporate and individual achievements each year through an appropriate annual bonus scheme. The bonus is a single, fully
discretionary variable pay award. The aggregate value of awards in any year is dependent on the group’s overall performance and
profitability. Consideration is also given to the levels of bonuses paid in the market. Individual awards, which are payable to all members
of staff, are determined by a rigorous assessment of achievement against defined objectives.
The variable pay award comprises
a mixture of cash and a deferred award based on the size of the award. Deferred awards are by default abrdn plc shares, with an option
to put up to 50% of deferral into funds. Overall compensation packages are designed to be competitive relative to the investment management
industry.
Base Salary
abrdn’s policy is
to pay a fair salary commensurate with the individual’s role, responsibilities and experience, and having regard to the market rates
being offered for similar roles in the asset management sector and other comparable companies. Any increase is generally to reflect inflation
and is applied in a manner consistent with other abrdn employees; any other increases must be justified by reference to promotion or changes
in responsibilities.
Annual Bonus
The Remuneration Committee
determines the key performance indicators that will be applied in considering the overall size of the bonus pool. In line with practices
amongst other asset management companies, individual bonuses are not subject to an absolute cap. However, the aggregate size of the bonus
pool is dependent on the group’s overall performance and profitability. Consideration is also given to the levels of bonuses paid
in the market. Individual awards are determined by a rigorous assessment of achievement against defined objectives and are reviewed and
approved by the Remuneration Committee.
abrdn has a deferral policy
which is intended to assist in the retention of talent and to create additional alignment of executives’ interests with abrdn’s
sustained performance and, in respect of the deferral into funds, managed by abrdn, to align the interest of asset managers with our clients.
Staff performance is reviewed
formally at least once a year. The review process evaluates the various aspects that the individual has contributed to abrdn, and specifically,
in the case of portfolio managers, to the relevant investment team. Discretionary bonuses are based on client service, asset growth and
the performance of the respective portfolio manager. Overall participation in team meetings, generation of original research ideas and
contribution to presenting the team externally are also evaluated.
In the calculation of a
portfolio management team’s bonus, abrdn takes into consideration investment matters (which include the performance of funds, adherence
to the company investment process, and quality of company meetings) as well as more subjective issues such as team participation and effectiveness
at client presentations through KPI scorecards. To the extent performance is factored in, such performance is not judged against any specific
benchmark and is evaluated over the period of a year - January to December. The pre- or after-tax performance of an individual account
is not considered in the determination of a portfolio manager’s discretionary bonus; rather the review process evaluates the overall
performance of the team for all of the accounts the team manages.
Portfolio manager performance
on investment matters is judged over all of the accounts the portfolio manager contributes to and is documented in the appraisal process.
A combination of the team’s and individual’s performance is considered and evaluated.
Although performance is
not a substantial portion of a portfolio manager’s compensation, abrdn also recognizes that fund performance can often be driven
by factors outside one’s control, such as (irrational) markets, and as such pay’s attention to the effort by portfolio managers
to ensure integrity of our core process by sticking to disciplines and processes set, regardless of momentum and ‘hot’ themes.
Short-terming is thus discouraged, and trading-oriented managers will thus find it difficult to thrive in the abrdn environment. Additionally,
if any of the aforementioned undue risks were to be taken by a portfolio manager, such trend would be identified via abrdn’s dynamic
compliance monitoring system.
In rendering investment
management services, the Adviser may use the resources of additional investment adviser subsidiaries of abrdn plc. These affiliates have
entered into a memorandum of understanding (MOU) pursuant to which investment professionals from each affiliate may render portfolio management,
research or trading services to abrdn clients. Each investment professional who renders portfolio management, research or trading services
under MOU or personnel sharing arrangement (“Participating Affiliate”) must comply with the provisions of the Advisers Act,
the 1940 Act, the Securities Act of 1933, as amended, (the “Securities Act”), the Exchange Act, and the Employee Retirement
Income Security Act of 1974, and the laws of states or countries in which the Adviser does business or has clients. No remuneration is
paid by the Fund with respect to the MOU/personnel sharing arrangements.
Equities-specific Remuneration
We have implemented a clear
performance measurement framework to help drive consistency and transparency across the equity division and also clearly link individual’s
performance and contribution to the success of their relevant strategies, desk and key stakeholders. The framework covers four key areas:
| • | Investment excellence – quantitative and qualitative assessment of
research, strategy performance and information ratio (from a team and individual perspective) |
| • | Collaboration – contribution to peer review within the team and insight
sharing across asset classes |
| • | Client engagement – information and support |
| • | Commerciality – primarily for team leaders; stewardship of team assets,
profitability and stakeholder alignment. |
| • | ESG - qualitative informed by various inputs including peer and stakeholder
feedback. |
The framework is heavily
skewed to investment excellence and team collaboration for the majority of investment personnel, which reinforces our organizational structure
and objective of delivering positive outcomes for our clients and stakeholders.
Annual remuneration over
a set threshold include a significant deferral into shares of our parent company or into internally-run funds in order to align our portfolio
managers with the objectives of their clients and the organization.
More information of the
firm’s remuneration policy can be found via the following link:
https://www.abrdn.com/corporate/about-us/our-leadership-team/remuneration-disclosure
(a)(4) Disclosure of Securities Ownership
Information provided as of December 31, 2021
Name of Portfolio Manager or
Team Member |
|
Dollar ($) Range of Fund Shares
Beneficially Owned |
|
|
|
Devan Kaloo |
|
None |
Joanne Irvine |
|
None |
Nick Robinson |
|
None |
Brett Diment |
|
None |
Max Wolman |
|
None |
Kevin Daly |
|
None |
Edwin Gutierrez |
|
None |
Stephen Parr |
|
None |
Item 9. Purchases of Equity Securities
by Closed-End Management Investment Company and Affiliated Purchasers.
REGISTRANT PURCHASES OF
EQUITY SECURITIES
Period |
(a) Total Number of Shares (or Units) Purchased |
(b) Average Price Paid per Share (or Unit) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
Month #1
(01/01/2021– 01/31/2021) |
5,226 |
14.28 |
335,983 |
183,467 |
Month #2
(02/01/2021– 02/28/2021) |
0 |
0 |
335,983 |
183,467 |
Month #3
(03/01/2021– 03/31/2021) |
0 |
0 |
335,983 |
0* |
Month #4
(04/01/2021– 04/30/2021) |
0 |
0 |
335,983 |
0 |
Month #5
(05/01/2021– 05/31/2021) |
0 |
0 |
335,983 |
0 |
Month #6
(06/01/2021– 06/30/2021) |
0 |
0 |
335,983 |
0 |
Month #7
(07/01/2021– 07/31/2021) |
0 |
0 |
335,983 |
0 |
Month #8
(08/01/2021– 08/31/2021) |
0 |
0 |
335,983 |
0 |
Month #9
(09/01/2021– 09/30/2021) |
0 |
0 |
335,983 |
0 |
Month #10
(10/01/2021– 10/31/2021) |
0 |
0 |
335,983 |
0 |
Month #11
(11/01/2021– 11/30/2021) |
0 |
0 |
335,983 |
0 |
Month #12
(12/01/2021– 12/31/2021) |
0 |
0 |
335,983 |
0 |
Total |
5,226 |
14.28 |
335,983 |
0* |
*On September 15, 2015, the Fund commenced a share
repurchase program. The program expired on March 15, 2021. For the fiscal years ended December 31, 2021 and 2020, the Fund repurchased
5,226 and 59,547 Common Shares, respectively, at a weighted-average discount of 12.95% and 13.59%, respectively, from net asset value
per share.
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 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required
by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.