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Article Excerpt

ABERDEEN ASIA-PACIFIC INCOME INVESTMENT $7.98 (Toronto symbol: FAP) (CWA Rating: Income) is a closed-end fund that invests mainly in Australian debt instruments. It also invests in U.S. dollar denominated bonds of Asian countries and in Asian bonds. The fund has net assets of $559.2 million. The fund units now trade at a 6% discount to net asset value. Aberdeen Asia-Pacific pays a monthly dividend of $0.06 a unit for a high current yield of 9.0%. Note that these dividends do not qualify for the Canadian dividend tax credit. They are not subject to any withholding taxes, however. Higher yields almost always mean higher risk. With Aberdeen, that’s because there is a currency risk from investing in Australian and U.S. bonds. As well, it can invest up to 35% of its portfolio in Asian bonds. Right now it has 25.2% of its assets in Asian currency bonds. Aberdeen Asia-Pacific has dropped lately as the Australian and U.S. dollars have fallen against the Canadian dollar…

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