Important Risk Considerations

Investing in any Aberdeen closed-end fund carries certain risks. These include but are not limited to:

Concentration

A closed-end fund that invests a substantial portion of its assets in securities within a single industry or sector of the economy may be subject to greater price volatility or adversely affected by the performance of securities in that particular sector or industry.

Credit

Credit risk refers to an issuer’s ability to make payments of principal and interest on debt securities when due. Any interruption in the timely payment of principal and interest may adversely affect a fund’s net asset value and ability to pay distributions.

Foreign Investment

Investment in foreign securities (both governmental and corporate) may involve a high degree of risk. Funds which invest in foreign securities are subject to additional risks such as, but not limited to, currency risk and exchange-rate risk, political instability, and economic instability of the countries from where the securities originate. These risks are enhanced for investments in emerging markets, and where a fund invests in a single country on geographic region. In regards to debt securities, such risks may impair the timely payment of principal and/or interest.

Interest Rate

Prices of bonds and certain taxable securities tend to fall as interest rates rise and rise as interest rates fall. Securities with longer maturities tend to fluctuate more in price in response to such changes. Aberdeen income funds tend to invest in longer-term securities, which means that their net asset values will fluctuate more in response to changes in interest rates than a fund investing in shorter term securities.

Investment and Market Risk

An investment in common shares of any fund is subject to investment risk, including the possible loss of principal. Shares represent an indirect investment in the securities owned by the respective fund. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably. Shares at any point in time may be worth less than an investor’s original investment, even after taking into account the reinvestment of a fund's dividends and distributions.

Leverage

A fund’s use of leverage through borrowings or the issuance of preferred shares creates an opportunity for increased returns for common shareholders, but also amplifies certain other risks such as higher volatility of net asset value and share price, which increase the risk of loss under adverse market conditions.

Reinvestment

Reinvestment risk is the risk that income from a fund’s portfolio will decline if and when the fund invests the proceeds from matured, traded or called securities at market rates that are below the portfolio’s current earnings rate. A decline in income could affect the common shares’ market price or a fund’s overall returns.

Valuation

Shares of a closed end fund may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund’s portfolio. At times, discounts could widen or premiums could decrease, which can either dilute positive performance or compound negative performance. There is no assurance that funds trading at a discount will appreciate to their NAV.