Still a Buy, But in Limited Quantities

Article Excerpt

ABERDEEN ASIA-PACIFIC INCOME INVESTMENT $6.55 (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 Asian and Latin American bonds, and in bonds denominated in currencies from those countries. Right now it has 38.5% of its assets in Asian and Latin American currency bonds. Aberdeen Asia-Pacific recently cut its monthly dividend by 16.7%, to $0.05 a unit from $0.06 a unit. The fund units now have a current yield of 9.2%. The cut is the result of the fund receiving lower income from its foreign bond holdings due to the much higher Canadian dollar. That lowers the value of foreign bonds, as well as interest payments from those bonds. Aberdeen has also moved down lately along with uncertainty in global bond and credit markets. The long-term outlook for Aberdeen Asia- Pacific remains sound. Its units now trade at an 11% discount to net asset value. Aberdeen Asia-Pacific is a buy, but in…

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