Item 1. Reports to Stockholders.
(a) A copy of the report transmitted to shareholders
pursuant to Rule 30e-1 under the Investment Company Act of 1940 (the “1940 Act”) is filed herewith.
Letter to Shareholders (unaudited)
Dear
Shareholder,
We present this Semi-Annual
Report which covers the activities of Aberdeen Total Dynamic Dividend Fund (the "Fund") for the six-month period ended April 30,
2022. The Fund's principal investment objective is to seek high current dividend income. The Fund also focuses on long-term growth of
capital as a secondary investment objective.
Total Investment Return1
For the six-month
period ended April 30, 2022, the total return to shareholders of the Fund based on the net asset value ("NAV") and market
price of the Fund, respectively, compared to the Fund's benchmark are as follows:
NAV2,3 | |
-7.1% |
Market
Price2 | |
-8.8% |
MSCI
All Country World Index (Net Dividends)4 | |
-11.6% |
For more information
about Fund performance, please visit the Fund on the web at www.aberdeenaod.com. Here, you can view quarterly commentary on the Fund's
performance, monthly fact sheets, distribution and performance information, and other Fund literature.
NAV, Market Price and Premium/Discount
The below table represents
comparison from current six-month period end to prior fiscal year end of market price to NAV and associated premium(+)/discount(-).
| |
NAV | |
Closing
Market Price | |
Premium(+)/
Discount(-) |
4/30/2022 | |
$ |
9.84 | |
$ |
8.85 | |
-10.1% |
10/31/2021 | |
$ |
10.98 | |
$ |
10.05 | |
-8.5% |
During the six-month
period ended April 30, 2022, the Fund's NAV was within a range of $9.84 to $11.26 and the Fund's market price traded within a range
of $8.84 to $10.45. During the six-month period ended April 30, 2022, the Fund's shares traded within a range of a premium(+)/discount(-)
of -6.5% to -11.5%.
Distribution Policy
Distributions
to common shareholders for the six months ended April 30, 2022 totaled $0.345 per share. Based on the market price of $8.85 on April 30,
2022, the annualized distribution rate for the period
ended
April 30, 2022 was 7.8%. Based on the NAV of $9.84 on April 30, 2022, the annualized
distribution rate for the period ended April 30, 2022 was 7.0%. Since all distributions are
paid after deducting applicable withholding taxes, the effective distribution rate may be higher
for those U.S. investors who are able to claim a tax credit.
On May 10, 2022
and June 09, 2022, the Fund announced that it will pay on May 31, 2022 and June 30, 2022, respectively, a distribution
of U.S. $0.0575 per share to all shareholders of record as of May 20, 2022 and June 22, 2022, respectively.
The Fund's policy
is to provide investors with a stable monthly distribution out of current income, supplemented by realized capital gains and, to the
extent necessary, paid-in capital, which is a nontaxable return of capital. This policy is subject to an annual review as well as regular
review at the Board of Trustees of the Fund's (the "Board") quarterly meetings, unless market conditions require an earlier
evaluation.
Open Market Repurchase Program
On June 13,
2018, the Board approved a share repurchase program ("Program") for the Fund. The Program allows the Fund to purchase, in the
open market, its outstanding common shares, with the amount and timing of any repurchase determined at the discretion of the Fund's investment
adviser and subject to market conditions and investment considerations. The Fund reports repurchase activity on the Fund's website on
a monthly basis. For the six-month period ended April 30, 2022, the Fund did not repurchase any shares through the Program.
Portfolio Holdings Disclosure
The Fund's complete
schedule of portfolio holdings for the second and fourth quarters of each fiscal year are included in the Fund's semi-annual and annual
reports to shareholders. The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission
(the "SEC") for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. These reports
are available on the SEC's website at sec.gov. The Fund makes the information available to shareholders upon request and without charge
by calling Investor Relations toll-free at 1-800-522-5465.
1 | Past performance is no guarantee of future results.
Investment returns and principal value will fluctuate and shares, when sold, may be worth
more or less than original cost. Current performance may be lower or higher than the performance
quoted. Net asset value return data include investment management fees, custodial charges
and administrative fees (such as Trustee and legal fees) and assumes the reinvestment of
all distributions. |
2 | Assuming the reinvestment of dividends and distributions. |
3 | The Fund's total return is based on the reported net
asset value NAV for each financial reporting period end and may differ from what is reported
on the Financial Highlights due to financial statement rounding or adjustments. |
4 | The Morgan Stanley Capital International (MSCI) All
Country (AC) World Index is an unmanaged index considered representative of developed and
emerging market stock markets. Indexes are unmanaged and have been provided for comparison
purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
Aberdeen Total Dynamic Dividend Fund |
1 |
Letter to Shareholders (unaudited)
(continued)
Proxy
Voting
A description of
the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities, and information regarding
how the Fund voted proxies relating to portfolio securities during the most recent 12 month period ended June 30 is available by
August 31 of the relevant year: (1) without charge, upon request, by calling Investor Relations toll-free at 1-800-522-5465;
and (2) on the SEC's website at sec.gov.
COVID-19
The COVID-19 pandemic
has caused major disruption to economies and markets around the world, including the United States. Financial markets have experienced
losses, and some sectors of the economy and individual issuers have experienced particularly large losses. Although many financial markets
have generally recovered from such losses, market volatility has continued. These circumstances may continue for an extended period of
time, and as a result may affect adversely the value and liquidity of the Fund's investments. The rapid development and fluidity of this
situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions, and, as a result,
present uncertainty and risk with respect to the Fund and the performance of its investments and ability to pay distributions. The full
extent of the impact and effects of COVID-19 will depend on future developments, including, among other factors, the duration and spread
of the outbreak, along with related travel advisories, quarantines and restrictions, the recovery time of the disrupted supply chains
and industries, the impact of labor market interruptions, the impact of government interventions, and uncertainty with respect to the
duration of the global economic slowdown.
Unclaimed Share Accounts
Please be advised
that abandoned or unclaimed property laws for certain states require financial organizations to transfer (escheat) unclaimed property
(including Fund shares) to the state. Each state has its own definition of unclaimed property, and Fund shares could be considered "unclaimed
property" due to account inactivity (e.g., no owner-generated activity for a certain period), returned mail (e.g., when mail sent
to a shareholder is returned to the Fund's transfer agent as undeliverable), or a combination of both. If your Fund shares are categorized
as unclaimed, your financial advisor or the Fund's transfer agent will follow the applicable state's statutory requirements to contact
you, but if unsuccessful, laws may require that the shares be escheated to the appropriate state. If this happens, you will have to contact
the state to recover your property, which may involve time and expense. For more information on unclaimed property and how to maintain
an active account, please contact your financial adviser or the Fund's transfer agent.
LIBOR
In July 2017,
the United Kingdom's Financial Conduct Authority ("FCA"), which regulates LIBOR, announced a desire to phase out the use of
LIBOR by the end of 2021. However, subsequent announcements by the FCA, the LIBOR administrator and other regulators indicate that it
is possible that the most widely used LIBOR rates may continue until mid-2023. It is anticipated that LIBOR ultimately will be discontinued
or the regulator will announce that it is no longer sufficiently robust to be representative of its underlying market around that time.
Although financial regulators and industry working groups have suggested alternative reference rates, such as European Interbank Offered
Rate ("EURIBOR"), Sterling Overnight Interbank Average Rate ("SONIA") and Secured Overnight Financing Rate ("SOFR"),
global consensus on alternative rates is lacking and the process for amending existing contracts or instruments to transition away from
LIBOR remains unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination
or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those
reference rates, which may adversely affect the Fund's performance and/or net asset value. Uncertainty and risk also remain regarding
the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently,
the transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to
LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing
or refinancing and diminished effectiveness of hedging strategies, adversely affecting the Fund's performance. Furthermore, the risks
associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition
to an alternative reference rate is not completed in a timely manner.
abrdn Rebrand
abrdn plc, formerly
known as Standard Life Aberdeen plc, was renamed on September 27, 2021. In connection with this re-branding, the entities within
abrdn plc group, including investment advisory entities, have been or will be renamed in the near future. The Fund's Board has approved
a change in the name of the Fund from "Aberdeen Total Dynamic Dividend Fund" to "abrdn Total Dynamic Dividend Fund"
effective on or about June 30, 2022. The internet address for the Fund's website will also change from www.aberdeenaod.com to www.abrdnaod.com,
effective as of June 30, 2022. The old address will continue to redirect to the new address for at least a year.
2 |
Aberdeen Total Dynamic Dividend Fund |
Letter to Shareholders (unaudited)
(concluded)
Investor
Relations Information
As part of abrdn's
commitment to shareholders, we invite you to visit the Fund on the web at www.aberdeenaod.com. Here, you can view monthly fact sheets,
quarterly commentary, distribution and performance information, and other Fund literature.
Enroll
in abrdn's email services and be among the first to receive the latest closed-end fund news, announcements, videos and other information.
In addition, you can receive electronic versions of important Fund documents including annual reports, semi-annual reports, prospectuses,
and proxy statements. Sign up today at https://www.abrdn.com/en-us/cefinvestorcenter/contact-us/preferences.
Contact
Us:
• Visit: https://www.abrdn.com/en-us/cefinvestorcenter
• Email: Investor.Relations@abrdn.com;
or
• Call: 1-800-522-5465
(toll free in the U.S.).
Yours sincerely,
/s/ Christian Pittard
Christian Pittard
President
All amounts are
U.S. Dollars unless otherwise stated.
|
Aberdeen Total Dynamic Dividend Fund |
3 |
Total Investment Return (unaudited)
The following table
summarizes the average annual Fund performance compared to the Fund's benchmark, the MSCI AC World Index (Net Dividends) for the six-month,
1-year, 3-year, 5-year and 10-year periods ended as of April 30, 2022.
| |
6
Months | |
1
Year | |
3
Years | |
5
Years | |
10
Years |
|
Net
Asset Value (NAV) | |
-7.1% | |
-3.8% | |
9.2% | |
8.8% | |
8.8% |
|
Market Price | |
-8.8% | |
-3.2% | |
9.6% | |
8.8% | |
8.5% |
|
MSCI
AC World Index (Net Dividends) | |
-11.6% | |
-5.4% | |
9.4% | |
9.5% | |
9.2% |
|
Performance of a $10,000 Investment
(as of April 30, 2022)
This graph shows
the change in value of a hypothetical investment of $10,000 in the Fund for the period indicated. For comparison, the same investment
is shown in the indicated index.
Aberdeen Asset
Managers Limited assumed responsibility for the management of the Fund as investment adviser on May 7, 2018. Performance prior to
this date reflects the performance of an unaffiliated investment adviser.
Effective May 4,
2018, Aberdeen Asset Managers Limited entered into a written contract with the Fund to waive fees or limit expenses. This contract may
not be terminated before June 30, 2022. Absent such waivers and/or reimbursements, the Fund's returns would be lower. Additionally,
abrdn Inc. entered into an agreement with the Fund to limit investor relations services fees. This agreement aligns with the term of
the advisory agreement and may not be terminated prior to the end of the current term of the advisory agreement. See Note 3 in the Notes
to Financial Statements.
Returns represent
past performance. Total investment return based on NAV is based on changes in the NAV of Fund shares and assumes reinvestment of dividends
and distributions, if any, at market prices pursuant to the dividend reinvestment program. All return data at NAV includes fees and expenses
charged to the Fund, which are listed in the Fund's Statement of Operations under "Expenses." Total investment return based
on market value is based on changes in the market price at which the Fund's shares traded on the NYSE during the period and assumes reinvestment
of dividends and distributions, if any, at market prices pursuant to the dividend reinvestment program. The Fund's total investment return
is based on the reported NAV or market price, as applicable, at the financial reporting period end. Because the Fund's shares trade in
the stock market based on investor demand, the Fund may trade at a price higher or lower than its NAV. Therefore, returns are calculated
based on both market price and NAV. Past performance is no guarantee of future results. The performance information provided does
not reflect the deduction of taxes that a shareholder would pay on distributions received from the Fund. The current performance of the
Fund may be lower or higher than the figures shown. The Fund's yield, return, market price and NAV will fluctuate. Performance information
current to the most recent month-end is available at www.aberdeenaod.com or by calling 800-522-5465.
The annualized
net operating expense ratio, excluding fee waivers based on the six-month period ended April 30, 2022 was 1.18%. The annualized
net operating expense ratio, net of fee waivers based on the six-month period ended April 30, 2022 was 1.14%. The annualized net
operating expenses, net of fee waivers and excluding interest expense based on the six-month period ended April 30, 2022 was 1.14%.
4 |
Aberdeen Total Dynamic Dividend Fund |
Portfolio Summary (as a percentage
of net assets) (unaudited)
As of April 30, 2022
The following table
summarizes the sector composition of the Fund's portfolio, in S&P Global Inc.'s Global Industry Classification Standard ("GICS")
Sectors.
Top
Sectors | |
| |
Information
Technology | |
| 17.3 | % |
Financials | |
| 15.8 | % |
Health
Care | |
| 12.9 | % |
Industrials | |
| 10.0 | % |
Consumer
Discretionary | |
| 9.8 | % |
Consumer
Staples | |
| 8.4 | % |
Communication
Services | |
| 7.4 | % |
Utilities | |
| 6.7 | % |
Materials | |
| 5.4 | % |
Energy | |
| 4.4 | % |
Real
Estate | |
| 4.0 | % |
Liabilities
in Excess of Other Assets | |
| (2.1) | % |
| |
| 100.0 | % |
The following chart summarizes the composition
of the Fund's portfolio by geographic classification:
Countries | |
| |
United
States | |
| 53.0 | % |
Germany | |
| 6.1 | % |
France | |
| 5.3 | % |
United
Kingdom | |
| 4.2 | % |
Switzerland | |
| 3.9 | % |
China | |
| 3.0 | % |
Netherlands | |
| 2.8 | % |
Canada | |
| 2.7 | % |
Sweden | |
| 2.4 | % |
Brazil | |
| 2.4 | % |
Spain | |
| 2.3 | % |
South
Korea | |
| 2.2 | % |
Japan | |
| 2.0 | % |
Other,
less than 2% each | |
| 9.8 | % |
Liabilities
in Excess of Other Assets | |
| (2.1) | % |
| |
| 100.0 | % |
Top
Ten Holdings | |
| | |
Apple, Inc. | |
| 3.2 | % |
Microsoft
Corp. | |
| 2.3 | % |
Alphabet, Inc.,
Class C | |
| 1.8 | % |
AbbVie, Inc. | |
| 1.6 | % |
Williams
Cos., Inc. (The) | |
| 1.6 | % |
Broadcom, Inc. | |
| 1.6 | % |
Bristol-Myers
Squibb Co. | |
| 1.5 | % |
Coca-Cola
Co. (The) | |
| 1.5 | % |
Enbridge, Inc. | |
| 1.5 | % |
Target
Corp. | |
| 1.5 | % |
|
Aberdeen Total Dynamic Dividend Fund |
5 |
Portfolio of Investments (unaudited)
As of April 30, 2022
| |
Shares | | |
Value | |
LONG-TERM
INVESTMENTS—102.1% |
COMMON
STOCKS—100.8% |
AUSTRALIA—0.6% |
Materials—0.6% | |
| | | |
| | |
Rio
Tinto PLC, ADR | |
| 86,300 | | |
$ | 6,137,656 | |
BRAZIL—2.4% | |
| | | |
| | |
Industrials—1.4% | |
| | | |
| | |
CCR
SA | |
| 5,644,538 | | |
| 14,168,573 | |
Materials—1.0% | |
| | | |
| | |
Vale
SA, ADR | |
| 601,900 | | |
| 10,166,091 | |
Total
Brazil | |
| | | |
| 24,334,664 | |
CANADA—2.7% | |
| | | |
| | |
Energy—1.5% | |
| | | |
| | |
Enbridge, Inc.(a) | |
| 354,300 | | |
| 15,461,652 | |
Materials—1.2% | |
| | | |
| | |
Barrick
Gold Corp.(a) | |
| 573,800 | | |
| 12,801,478 | |
Total
Canada | |
| | | |
| 28,263,130 | |
CHINA—3.0% | |
| | | |
| | |
Communication
Services—1.0% | |
| | | |
| | |
Tencent
Holdings Ltd. | |
| 220,200 | | |
| 10,376,900 | |
Consumer
Discretionary—0.0% | |
| | | |
| | |
JD.com, Inc.,
Class A(b) | |
| 10,485 | | |
| 326,907 | |
Financials—1.0% | |
| | | |
| | |
Ping
An Insurance Group Co. of China Ltd., H Shares | |
| 1,652,900 | | |
| 10,447,507 | |
Real
Estate—1.0% | |
| | | |
| | |
China
Vanke Co. Ltd., H Shares | |
| 4,252,400 | | |
| 10,027,155 | |
Total
China | |
| | | |
| 31,178,469 | |
DENMARK—1.3% | |
| | | |
| | |
Financials—1.3% | |
| | | |
| | |
Tryg
A/S | |
| 584,400 | | |
| 13,895,340 | |
FINLAND—1.7% | |
| | | |
| | |
Financials—1.0% | |
| | | |
| | |
Nordea
Bank Abp | |
| 993,200 | | |
| 9,902,281 | |
Information
Technology—0.7% | |
| | | |
| | |
Nokia
OYJ(b) | |
| 1,531,806 | | |
| 7,766,363 | |
Total
Finland | |
| | | |
| 17,668,644 | |
FRANCE—5.3% | |
| | | |
| | |
Consumer
Discretionary—0.9% | |
| | | |
| | |
LVMH
Moet Hennessy Louis Vuitton SE | |
| 14,600 | | |
| 9,448,171 | |
Consumer
Staples—1.0% | |
| | | |
| | |
Danone
SA | |
| 178,200 | | |
| 10,775,976 | |
6 |
Aberdeen Total Dynamic Dividend Fund |
|
Portfolio of Investments (unaudited)
(continued)
As of April 30, 2022
| |
Shares | | |
Value | |
LONG-TERM
INVESTMENTS (continued) |
COMMON
STOCKS (continued) |
FRANCE
(continued) |
Energy—1.3% | |
| | | |
| | |
TOTAL
SE, ADR(a) | |
| 265,600 | | |
$ | 12,937,376 | |
Health
Care—1.4% | |
| | | |
| | |
Sanofi | |
| 137,397 | | |
| 14,522,160 | |
Industrials—0.7% | |
| | | |
| | |
Alstom
SA | |
| 345,498 | | |
| 7,594,187 | |
Total
France | |
| | | |
| 55,277,870 | |
GERMANY—6.1% | |
| | | |
| | |
Consumer
Discretionary—1.0% | |
| | | |
| | |
Mercedes-Benz
Group AG | |
| 149,400 | | |
| 10,575,602 | |
Financials—2.2% | |
| | | |
| | |
Deutsche
Boerse AG | |
| 72,900 | | |
| 12,691,491 | |
Muenchener
Rueckversicherungs-Gesellschaft AG in Muenchen | |
| 41,433 | | |
| 9,866,883 | |
| |
| | | |
| 22,558,374 | |
Information
Technology—0.4% | |
| | | |
| | |
Infineon
Technologies AG | |
| 161,400 | | |
| 4,581,051 | |
Materials—1.1% | |
| | | |
| | |
Linde
PLC(b) | |
| 35,700 | | |
| 11,196,862 | |
Utilities—1.4% | |
| | | |
| | |
RWE
AG | |
| 343,400 | | |
| 14,257,761 | |
Total
Germany | |
| | | |
| 63,169,650 | |
HONG
KONG—1.3% | |
| | | |
| | |
Financials—0.7% | |
| | | |
| | |
Hong
Kong Exchanges & Clearing Ltd. | |
| 169,200 | | |
| 7,177,291 | |
Industrials—0.6% | |
| | | |
| | |
Pacific
Basin Shipping Ltd. | |
| 13,313,000 | | |
| 6,108,146 | |
Total
Hong Kong | |
| | | |
| 13,285,437 | |
ITALY—1.3% | |
| | | |
| | |
Utilities—1.3% | |
| | | |
| | |
Enel
SpA | |
| 1,990,200 | | |
| 12,942,057 | |
JAPAN—2.0% | |
| | | |
| | |
Financials—1.0% | |
| | | |
| | |
Mitsubishi
UFJ Financial Group, Inc. | |
| 1,722,400 | | |
| 10,012,954 | |
Real
Estate—1.0% | |
| | | |
| | |
GLP
J-REIT | |
| 7,600 | | |
| 10,255,246 | |
Total
Japan | |
| | | |
| 20,268,200 | |
Aberdeen Total Dynamic Dividend Fund |
7 |
Portfolio of Investments (unaudited)
(continued)
As of April 30, 2022
| |
Shares | | |
Value | |
LONG-TERM
INVESTMENTS (continued) |
COMMON
STOCKS (continued) |
NETHERLANDS—2.8% |
Consumer
Staples—1.2% |
Heineken
NV | |
| 131,900 | | |
$ | 12,874,888 | |
Information
Technology—1.6% | |
| | | |
| | |
ASML
Holding NV | |
| 16,800 | | |
| 9,534,646 | |
BE
Semiconductor Industries NV | |
| 114,000 | | |
| 6,949,284 | |
| |
| | | |
| 16,483,930 | |
Total
Netherlands | |
| | | |
| 29,358,818 | |
NORWAY—1.1% | |
| | | |
| | |
Communication
Services—1.1% | |
| | | |
| | |
Telenor
ASA | |
| 838,026 | | |
| 11,819,072 | |
SINGAPORE—1.2% | |
| | | |
| | |
Financials—1.2% | |
| | | |
| | |
Oversea-Chinese
Banking Corp. Ltd. | |
| 1,426,971 | | |
| 12,669,482 | |
SOUTH
KOREA—0.9% | |
| | | |
| | |
Materials—0.9% | |
| | | |
| | |
LG
Chem Ltd. | |
| 23,200 | | |
| 9,501,907 | |
SPAIN—2.3% | |
| | | |
| | |
Communication
Services—1.1% | |
| | | |
| | |
Cellnex
Telecom SA(c) | |
| 241,800 | | |
| 11,270,366 | |
Industrials—1.2% | |
| | | |
| | |
Ferrovial
SA | |
| 486,723 | | |
| 12,481,697 | |
Total
Spain | |
| | | |
| 23,752,063 | |
SWEDEN—2.4% | |
| | | |
| | |
Communication
Services—1.2% | |
| | | |
| | |
Tele2
AB, B Shares | |
| 892,065 | | |
| 11,823,681 | |
Industrials—1.2% | |
| | | |
| | |
Atlas
Copco AB, A Shares | |
| 101,100 | | |
| 4,583,556 | |
Volvo
AB, B Shares | |
| 503,000 | | |
| 8,024,575 | |
| |
| | | |
| 12,608,131 | |
Total
Sweden | |
| | | |
| 24,431,812 | |
SWITZERLAND—3.9% | |
| | | |
| | |
Consumer
Staples—1.3% | |
| | | |
| | |
Nestle
SA | |
| 100,300 | | |
| 12,948,136 | |
Financials—1.2% | |
| | | |
| | |
Zurich
Insurance Group AG | |
| 28,200 | | |
| 12,838,600 | |
Health
Care—1.4% | |
| | | |
| | |
Roche
Holding AG | |
| 38,000 | | |
| 14,090,921 | |
Total
Switzerland | |
| | | |
| 39,877,657 | |
8 | Aberdeen
Total Dynamic Dividend Fund |
Portfolio of Investments (unaudited)
(continued)
As of April 30, 2022
| |
Shares | | |
Value | |
LONG-TERM
INVESTMENTS (continued) |
COMMON
STOCKS (continued) |
TAIWAN—1.3% |
Information
Technology—1.3% |
Taiwan
Semiconductor Manufacturing Co. Ltd. | |
| 752,000 | | |
$ | 13,598,149 | |
UNITED
KINGDOM—4.2% | |
| | | |
| | |
Communication
Services—1.1% | |
| | | |
| | |
Vodafone
Group PLC, ADR | |
| 777,900 | | |
| 11,816,301 | |
Consumer
Staples—0.8% | |
| | | |
| | |
Tate &
Lyle PLC | |
| 850,800 | | |
| 8,269,438 | |
Health
Care—1.4% | |
| | | |
| | |
AstraZeneca
PLC, ADR | |
| 215,900 | | |
| 14,335,760 | |
Industrials—0.9% | |
| | | |
| | |
Melrose
Industries PLC | |
| 6,512,310 | | |
| 9,463,019 | |
Total
United Kingdom | |
| | | |
| 43,884,518 | |
UNITED
STATES—53.0% | |
| | | |
| | |
Communication
Services—1.9% | |
| | | |
| | |
Alphabet, Inc.,
Class C(a)(b) | |
| 7,950 | | |
| 18,279,674 | |
Cineworld
Group PLC(b) | |
| 3,865,000 | | |
| 1,479,393 | |
| |
| | | |
| 19,759,067 | |
Consumer
Discretionary—7.9% | |
| | | |
| | |
Aptiv
PLC(a)(b) | |
| 91,100 | | |
| 9,693,040 | |
Genuine
Parts Co. | |
| 102,500 | | |
| 13,330,125 | |
Hanesbrands, Inc. | |
| 545,700 | | |
| 7,235,982 | |
Las
Vegas Sands Corp.(b) | |
| 294,500 | | |
| 10,434,135 | |
Lowe's
Cos., Inc.(a) | |
| 68,000 | | |
| 13,445,640 | |
Target
Corp.(a) | |
| 67,300 | | |
| 15,388,145 | |
TJX
Cos., Inc. (The)(a) | |
| 202,600 | | |
| 12,415,328 | |
| |
| | | |
| 81,942,395 | |
Consumer
Staples—4.1% | |
| | | |
| | |
Coca-Cola
Co. (The) | |
| 239,400 | | |
| 15,467,634 | |
Kraft
Heinz Co. (The)(a) | |
| 278,300 | | |
| 11,863,929 | |
Mondelez
International, Inc., Class A(a) | |
| 227,500 | | |
| 14,669,200 | |
| |
| | | |
| 42,000,763 | |
Energy—1.6% | |
| | | |
| | |
Williams
Cos., Inc. (The) | |
| 469,300 | | |
| 16,092,297 | |
Financials—6.2% | |
| | | |
| | |
Bank
of America Corp.(a) | |
| 306,700 | | |
| 10,943,056 | |
Blackstone, Inc.,
Class A | |
| 110,000 | | |
| 11,172,700 | |
Goldman
Sachs Group, Inc. (The) | |
| 34,800 | | |
| 10,631,052 | |
Huntington
Bancshares, Inc.(a) | |
| 820,200 | | |
| 10,785,630 | |
Intercontinental
Exchange, Inc. | |
| 104,000 | | |
| 12,044,240 | |
JPMorgan
Chase & Co. | |
| 77,300 | | |
| 9,226,528 | |
| |
| | | |
| 64,803,206 | |
Aberdeen
Total Dynamic Dividend Fund |
9 |
Portfolio of Investments (unaudited)
(continued)
As of April 30, 2022
| |
Shares | | |
Value | |
LONG-TERM
INVESTMENTS (continued) |
COMMON
STOCKS (continued) |
UNITED
STATES (continued) |
Health
Care—8.7% |
AbbVie, Inc. | |
| 116,304 | | |
$ | 17,082,731 | |
Baxter
International, Inc. | |
| 157,300 | | |
| 11,177,738 | |
Bristol-Myers
Squibb Co.(a) | |
| 207,600 | | |
| 15,626,052 | |
CVS
Health Corp. | |
| 101,300 | | |
| 9,737,969 | |
Eli
Lilly & Co. | |
| 45,800 | | |
| 13,379,554 | |
Medtronic
PLC(a) | |
| 118,900 | | |
| 12,408,404 | |
UnitedHealth
Group, Inc.(a) | |
| 21,900 | | |
| 11,137,245 | |
| |
| | | |
| 90,549,693 | |
Industrials—4.0% | |
| | | |
| | |
FedEx
Corp.(a) | |
| 54,600 | | |
| 10,851,204 | |
Norfolk
Southern Corp.(a) | |
| 39,400 | | |
| 10,160,472 | |
Schneider
Electric SE | |
| 80,800 | | |
| 11,592,305 | |
Stanley
Black & Decker, Inc. | |
| 78,000 | | |
| 9,371,700 | |
| |
| | | |
| 41,975,681 | |
Information
Technology—12.0% | |
| | | |
| | |
Amdocs
Ltd. | |
| 32,100 | | |
| 2,558,049 | |
Analog
Devices, Inc. | |
| 68,600 | | |
| 10,590,468 | |
Apple, Inc.(a) | |
| 213,600 | | |
| 33,674,040 | |
Avast
PLC(c) | |
| 1,566,200 | | |
| 11,107,522 | |
Broadcom, Inc.(a) | |
| 29,000 | | |
| 16,077,310 | |
Cisco
Systems, Inc.(a) | |
| 245,300 | | |
| 12,014,794 | |
Fidelity
National Information Services, Inc. | |
| 141,700 | | |
| 14,049,555 | |
Microsoft
Corp.(a) | |
| 87,700 | | |
| 24,338,504 | |
| |
| | | |
| 124,410,242 | |
Materials—0.6% | |
| | | |
| | |
Air
Products and Chemicals, Inc. | |
| 26,000 | | |
| 6,085,820 | |
Real
Estate—2.0% | |
| | | |
| | |
American
Tower Corp., REIT | |
| 40,800 | | |
| 9,833,616 | |
Gaming &
Leisure Properties, Inc., REIT | |
| 233,900 | | |
| 10,380,482 | |
| |
| | | |
| 20,214,098 | |
Utilities—4.0% | |
| | | |
| | |
Clearway
Energy, Inc., Class C(a) | |
| 300,000 | | |
| 9,159,000 | |
CMS
Energy Corp.(a) | |
| 165,400 | | |
| 11,361,326 | |
FirstEnergy
Corp.(a) | |
| 272,200 | | |
| 11,788,982 | |
NextEra
Energy, Inc.(a) | |
| 133,000 | | |
| 9,445,660 | |
| |
| | | |
| 41,754,968 | |
Total
United States | |
| | | |
| 549,588,230 | |
Total
Common Stocks | |
| | | |
| 1,044,902,825 | |
10 | Aberdeen
Total Dynamic Dividend Fund |
Portfolio of Investments (unaudited)
(concluded)
As of April 30, 2022
| |
Shares | | |
Value | |
LONG-TERM
INVESTMENTS (continued) |
PREFERRED
STOCKS—1.3% |
SOUTH
KOREA—1.3% |
Information
Technology—1.3% |
Samsung
Electronics Co. Ltd. | |
| 288,800 | | |
$ | 13,539,995 | |
Total
Preferred Stocks | |
| | | |
| 13,539,995 | |
Total
Long-Term Investments—102.1% (cost $894,914,477) | |
| | | |
| 1,058,442,820 | |
Total
Investments—102.1% (cost $894,914,477)(d) | |
| | | |
| 1,058,442,820 | |
Liabilities
in Excess of Other Assets—(2.1)% | |
| | | |
| (21,333,958 | ) |
Net
Assets—100.0% | |
| | | |
$ | 1,037,108,862 | |
(a) All
or a portion of the security has been designated as collateral for the line of credit.
(b) Non-income
producing security.
(c) Denotes
a security issued under Regulation S or Rule 144A.
(d) See
accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities.
ADR |
American Depositary Receipt |
PLC |
Public Limited Company |
REIT |
Real Estate Investment Trust |
|
At
April 30, 2022, the Fund's open forward foreign currency exchange contracts were as follows:
Sale
Contracts Settlement Date | |
Counterparty | |
Amount
Purchased | |
Amount
Sold | |
Fair
Value | |
Unrealized
Appreciation |
United
States Dollar/Euro | |
| |
| |
| |
| |
|
07/14/2022 | |
Royal
Bank of Canada (UK) | |
USD
26,963,230 | |
EUR
24,500,000 | |
$25,940,030 | |
$1,023,200 |
See Notes to Financial Statements.
Aberdeen
Total Dynamic Dividend Fund |
11 |
Statement of Assets and Liabilities (unaudited)
As of April 30, 2022
Assets |
Investments,
at value (cost $894,914,477) |
$ |
1,058,442,820 |
Foreign
currency, at value (cost $4,866,329) |
|
4,859,777 |
Receivable
for investments sold |
|
24,666,672 |
Interest
and dividends receivable |
|
9,097,635 |
Unrealized
appreciation on forward foreign currency exchange contracts |
|
1,023,200 |
Tax
reclaim receivable |
|
3,335,989 |
Prepaid
expenses |
|
54,326 |
Total
assets |
|
1,101,480,419 |
|
|
|
Liabilities |
|
|
Line
of credit payable (Note 6) |
|
38,320,633 |
Payable
for investments purchased |
|
24,794,814 |
Investment
management fees payable (Note 3) |
|
865,629 |
Investor
relations fees payable (Note 3) |
|
74,262 |
Administration
fees payable (Note 3) |
|
72,158 |
Trustee
fees |
|
24,595 |
Interest
expense payable |
|
15,212 |
Other
accrued expenses |
|
204,254 |
Total
liabilities |
|
64,371,557 |
|
|
|
Net
Assets |
$ |
1,037,108,862 |
|
|
|
Composition
of Net Assets: |
|
|
Paid-in
capital in excess of par |
$ |
1,009,048,039 |
Distributable
earnings |
|
28,060,823 |
Net
Assets |
$ |
1,037,108,862 |
Net
asset value per share based on 105,430,999 shares issued and outstanding |
$ |
9.84 |
See Notes to Financial Statements.
12 | Aberdeen Total
Dynamic Dividend Fund |
Statement of Operations (unaudited)
For the Six-Month Period Ended April 30, 2022
Net
Investment Income: |
|
|
|
Income |
|
|
Dividends
and other income (net of foreign withholding taxes of $4,353,203) |
$ |
35,551,900 |
Interest
income |
|
24,980 |
Total
Investment Income |
|
35,576,880 |
|
|
|
Expenses: |
|
|
Investment
management fee (Note 3) |
|
5,634,022 |
Administration
fee (Note 3) |
|
449,623 |
Investor
relations fees and expenses (Note 3) |
|
112,806 |
Reports
to shareholders and proxy solicitation |
|
79,687 |
Custodian's
fees and expenses |
|
71,027 |
Legal
fees and expenses |
|
55,558 |
Trustee
fees and expenses |
|
47,273 |
Insurance
expense |
|
39,775 |
Independent
auditors' fees and expenses |
|
34,410 |
Transfer
agent's fees and expenses |
|
9,413 |
Miscellaneous |
|
72,084 |
Total
expenses before reimbursed/waived expenses |
|
6,605,678 |
Interest
expense (Note 6) |
|
3,880 |
Total
operating expenses before reimbursed/waived expenses |
|
6,609,558 |
Less:
Expenses waived (Note 3) |
|
(198,557) |
Net
expenses |
|
6,411,001 |
|
|
|
Net
Investment Income |
|
29,165,879 |
|
|
|
Net
Realized/Unrealized Gain/(Loss) from Investments and Foreign Currency Related Transactions: |
|
|
|
|
|
Net
realized gain/(loss) from: |
|
|
Investment
transactions |
|
31,688,240 |
Forward
foreign currency exchange contracts |
|
1,555,309 |
Foreign
currency transactions |
|
(7,828) |
|
|
33,235,721 |
|
|
|
Net
change in unrealized appreciation/(depreciation) on: |
|
|
Investment
transactions |
|
(147,106,473) |
Forward
foreign currency exchange contracts |
|
1,042,182 |
Foreign
currency translation |
|
(377,352) |
|
|
(146,441,643) |
Net
realized and unrealized (loss) from investments and foreign currency related transactions |
|
(113,205,922) |
Net
Decrease in Net Assets Resulting from Operations |
$ |
(84,040,043) |
See Notes to Financial Statements.
Aberdeen Total Dynamic Dividend Fund | 13 |
Statements of Changes in Net Assets
|
For
the
Six-Month
Period Ended |
|
For
the |
|
April 30,
2022
(unaudited) |
|
Year
Ended
October 31, 2021 |
|
|
|
|
|
|
|
|
Increase/(Decrease)
in Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
Net
investment income |
$ |
29,165,879 |
|
|
$ |
69,344,637 |
|
Net
realized gain from investments, forward foreign currency exchange contracts and foreign currency transactions |
|
33,235,721 |
|
|
|
31,253,131 |
|
Net
change in unrealized appreciation/(depreciation) on investments, forward foreign currency exchange contracts and foreign currency
transactions |
|
(146,441,643) |
|
|
|
205,661,523 |
|
Net
increase/(decrease) in net assets resulting from operations |
|
(84,040,043) |
|
|
|
306,259,291 |
|
|
|
|
|
|
|
|
|
Distributions
to Shareholders From: |
|
|
|
|
|
Distributable
earnings |
|
(36,373,695) |
|
|
|
(72,747,390) |
|
Net
decrease in net assets from distributions |
|
(36,373,695) |
|
|
|
(72,747,390) |
|
Change
in net assets resulting from operations |
|
(120,413,738) |
|
|
|
233,511,901 |
|
|
|
|
|
|
|
Net
Assets: |
|
|
|
|
|
Beginning
of period |
|
1,157,522,600 |
|
|
|
924,010,699 |
|
End
of period |
$ |
1,037,108,862 |
|
|
$ |
1,157,522,600 |
|
See Notes to Financial Statements.
14 | Aberdeen Total
Dynamic Dividend Fund |
Financial Highlights
|
|
For
the
Six-Month
Period Ended
April 30, 2022 |
|
For
the Fiscal Years Ended October 31, |
|
|
|
(unaudited) |
|
2021 |
|
2020 |
|
2019 |
|
2018(a) |
|
2017 |
|
PER
SHARE OPERATING PERFORMANCE: |
|
Net
asset value per common share, beginning of period |
|
$10.98 |
|
$8.76 |
|
$9.56 |
|
$9.33 |
|
$9.95 |
|
$8.69 |
|
Net
investment income |
|
|
0.28 |
(b) |
|
0.66 |
(b) |
|
0.63 |
(b) |
|
0.64 |
(b) |
|
0.64 |
(b) |
|
0.68 |
|
Net
realized and unrealized gains/(losses) on investments, forward foreign currency exchange contracts and foreign currency transactions |
|
|
(1.07 |
) |
|
2.25 |
|
|
(0.74 |
) |
|
0.27 |
|
|
(0.58 |
) |
|
1.27 |
|
Total
from investment operations applicable to common shareholders |
|
|
(0.79 |
) |
|
2.91 |
|
|
(0.11 |
) |
|
0.91 |
|
|
0.06 |
|
|
1.95 |
|
Distributions
to common shareholders from: |
|
Net
investment income |
|
|
(0.35 |
) |
|
(0.69 |
) |
|
(0.67 |
) |
|
(0.65 |
) |
|
(0.67 |
) |
|
(0.68 |
) |
Tax
return of capital |
|
|
– |
|
|
– |
|
|
(0.02 |
) |
|
(0.04 |
) |
|
(0.02 |
) |
|
(0.01 |
) |
Total
distributions |
|
|
(0.35 |
) |
|
(0.69 |
) |
|
(0.69 |
) |
|
(0.69 |
) |
|
(0.69 |
) |
|
(0.69 |
) |
Capital
Share Transactions: |
|
Anti-Dilutive
effect of share repurchase program |
|
|
– |
|
|
– |
|
|
– |
|
|
0.01 |
|
|
0.01 |
|
|
– |
|
Total
capital share transactions |
|
|
– |
|
|
– |
|
|
– |
|
|
0.01 |
|
|
0.01 |
|
|
– |
|
Net
asset value per common share, end of period |
|
$9.84 |
|
$10.98 |
|
$8.76 |
|
$9.56 |
|
$9.33 |
|
$9.95 |
|
Market
price, end of period |
|
$8.85 |
|
$10.05 |
|
$7.31 |
|
$8.44 |
|
$7.94 |
|
$9.02 |
|
Total
Investment Return Based on(c): |
|
Market
price |
|
|
(8.76% |
) |
|
47.64% |
|
|
(5.47% |
) |
|
15.55% |
|
|
(4.96% |
) |
|
32.78% |
|
Net
asset value |
|
|
(7.14% |
) |
|
34.60% |
(d) |
|
0.00% |
(d) |
|
11.39% |
|
|
1.24% |
|
|
24.22% |
|
Ratio
to Average Net Assets Applicable to Common Shareholders/Supplementary Data: |
|
|
Net
assets applicable to common shareholders, end of period (000 omitted) |
|
$1,037,109 |
|
$1,157,523 |
|
$924,011 |
|
$1,007,850 |
|
$994,556 |
|
$1,070,253 |
|
Net
operating expenses, net of fee waivers |
|
|
1.14% |
(e) |
|
1.16% |
|
|
1.15% |
|
|
1.22% |
|
|
1.18% |
|
|
1.19% |
|
Net
operating expenses, excluding fee waivers |
|
|
1.18% |
(e) |
|
1.20% |
|
|
1.18% |
|
|
1.24% |
|
|
1.19% |
|
|
– |
(f) |
Net
operating expenses, net of fee waivers and excluding interest expense |
|
|
1.14% |
(e) |
|
1.14% |
|
|
1.14% |
|
|
1.18% |
|
|
1.14% |
|
|
1.15% |
|
Net
investment income |
|
|
5.19% |
(e) |
|
6.14% |
|
|
6.93% |
|
|
6.94% |
|
|
6.32% |
|
|
7.03% |
|
Portfolio
turnover |
|
|
35% |
(g) |
|
72% |
|
|
115% |
|
|
135% |
|
|
77% |
|
|
94% |
|
Line
of credit payable outstanding (000 omitted) |
|
$38,321 |
|
$4,092 |
|
$– |
|
$– |
|
$15,401 |
|
$33,239 |
|
Asset
coverage ratio on line of credit payable at period end(h) |
|
|
2,806% |
|
|
28,385% |
|
|
– |
|
|
– |
|
|
6,558% |
|
|
– |
(i) |
Asset
coverage per $1,000 on line of credit payable at period end |
|
$28,064 |
|
$283,852 |
|
$– |
|
$– |
|
$65,576 |
|
$31,199 |
|
| (a) | Beginning
with the year ended October 31, 2018, the Fund has been audited by KPMG LLP. Previous
years were audited by a different independent registered public accounting firm. |
| (b) | Net
investment income is based on average shares outstanding during the period. |
| (c) | Total
investment return is calculated assuming a purchase of common stock on the first day and
a sale on the last day of each reporting period. Dividends and distributions, if any, are
assumed, for purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Total investment return does not reflect brokerage commissions. |
Aberdeen
Total Dynamic Dividend Fund | 15 |
Financial Highlights (concluded)
| (d) | The
total return shown above includes the impact of financial statement adjustments to the NAV
per share. |
| (f) | Effective
on May 4, 2018, the Fund entered into an expense limitation agreement with Aberdeen
Asset Managers Limited, the Fund's investment adviser. Prior to this, there was no such agreement
in place. |
| (h) | Asset
coverage ratio is calculated by dividing net assets plus the amount of any borrowings, for
investment purposes by the amount of the Line of Credit. |
| (i) | The
Fund did not disclose asset coverage ratio on line of credit payable in prior years. |
Amounts listed as "–" are
$0 or round to $0.
See Notes to Financial Statements.
16 |
Aberdeen Total Dynamic Dividend Fund |
Notes to Financial Statements (unaudited)
April 30, 2022
1.
Organization
Aberdeen Total Dynamic
Dividend Fund (the "Fund") is a diversified, closed-end management investment company. The Fund was organized as a Delaware
statutory trust on October 27, 2006, and commenced operations on January 26, 2007. The Fund's principal investment objective
is to seek high current dividend income primarily in equity securities, with a secondary objective of long-term growth of capital. The
Board of Trustees (the "Board") authorized an unlimited number of shares with no par value.
2. Summary of Significant Accounting
Policies
The Fund is an investment
company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board
("FASB") Accounting Standard Codification Topic 946 Financial Services-Investment Companies.
The following is
a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform
to generally accepted accounting principles ("GAAP") in the United States of America. The preparation of financial statements
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses for the period. Actual
results could differ from those estimates.
a. Security Valuation:
The Fund values its
securities at current market value or fair value, consistent with regulatory requirements. "Fair value" is defined in the Fund's
Valuation and Liquidity Procedures as the price that could be received to sell an asset or paid to transfer a liability in an orderly
transaction between willing market participants without a compulsion to transact at the measurement date.
In accordance
with the authoritative guidance on fair value measurements and disclosures under GAAP, the Fund discloses the fair value of its investments
using a three-level hierarchy that classifies the inputs to valuation techniques used to measure the fair value. The hierarchy assigns
Level 1, the highest level, measurements to valuations based upon unadjusted quoted prices in active markets for identical assets, Level
2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar
assets, and Level 3 the lowest level, measurements to valuations based upon unobservable inputs that are significant to the valuation.
Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about
risk, for example, the risk inherent in a particular
valuation
technique used to measure fair value including a pricing model and/or the risk inherent in the
inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs
are inputs that reflect the assumptions market participants would use in pricing the asset or liability,
which are based on market data obtained from sources independent of the reporting entity. Unobservable
inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market
participants would use in pricing the asset or liability developed based on the best information
available in the circumstances. A financial instrument's level within the fair value hierarchy
is based upon the lowest level of any input that is significant to the fair value measurement.
Equity securities
that are traded on an exchange are valued at the last quoted sale price on the principal exchange on which the security is traded at
the "Valuation Time" subject to application, when appropriate, of the valuation factors described in the paragraph below. Under
normal circumstances, the Valuation Time is as of the close of regular trading on the New York Stock Exchange ("NYSE") (usually
4:00 p.m. Eastern Time). In the absence of a sale price, the security is valued at the mean of the bid/ask price quoted at the close
on the principal exchange on which the security is traded. Securities traded on NASDAQ are valued at the NASDAQ official closing price.
Closed-end funds and exchange-traded funds ("ETFs") are valued at the market price of the security at the Valuation Time. A
security using any of these pricing methodologies is determined to be a Level 1 investment.
Foreign equity securities
that are traded on foreign exchanges that close prior to Valuation Time are valued by applying valuation factors to the last sale price
or the mean price as noted above. Valuation factors are provided by an independent pricing service provider approved by the Board. These
valuation factors are used when pricing the Fund's portfolio holdings to estimate market movements between the time foreign markets close
and the time the Fund values such foreign securities. These valuation factors are based on inputs such as depositary receipts, indices,
futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. When prices with the application
of valuation factors are utilized, the value assigned to the foreign securities may not be the same as quoted or published prices of
the securities on their primary markets. A security that applies a valuation factor is determined to be a Level 2 investment because
the exchange-traded price has been adjusted. Valuation factors are not utilized if the independent pricing service provider is unable
to provide a valuation factor or if the valuation factor falls below a predetermined threshold; in such case, the security is determined
to be a Level 1 investment.
Aberdeen Total Dynamic Dividend Fund |
17 |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
Derivative
instruments are valued at fair value. Exchange traded futures are generally Level 1 investments
and centrally cleared swaps and forwards are generally Level 2 investments. Forward foreign currency
contracts are generally valued based on the bid price of the forward rates and the current spot
rate. Forward exchange rate quotations are available for scheduled settlement dates, such as 1-,
3-, 6-, 9- and 12- month periods. An interpolated valuation is derived based on the actual settlement
dates of the forward contracts held. Futures contracts are valued at the settlement price or at
the last bid price if no settlement price is available. Swap agreements are generally valued by
an approved pricing agent based on the terms of the swap agreement (including future cash flows).
When market quotations or exchange rates are not readily available, or if Aberdeen Asset Managers
Limited ("AAML" or the "Adviser") concludes that such market quotations do not
accurately reflect fair value, the fair value of the Fund's assets are determined in good faith
in accordance with the Valuation Procedures.
Short-term
investments are comprised of cash and cash equivalents invested in short-term investment funds which are redeemable daily. The Fund sweeps
available cash into the State Street Institutional U.S. Government Money Market Fund, which has elected to qualify as a "government
money market fund" pursuant to Rule 2a-7 under the
Investment
Company Act of 1940, as amended (the "1940 Act"), and has an objective, which is not
guaranteed, to maintain a $1.00 per share net asset value ("NAV"). Generally, these investment
types are categorized as Level 1 investments.
In the event that
a security's market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange
on which it trades closes before the Valuation Time), the security is valued at fair value as determined by the Fund's Pricing Committee,
taking into account the relevant factors and surrounding circumstances using valuation policies and procedures approved by the Board.
A security that has been fair valued by the Fund's Pricing Committee may be classified as Level 2 or Level 3 depending on the nature
of the inputs.
The three-level hierarchy
of inputs is summarized below:
Level 1 – quoted prices in active
markets for identical investments;
Level 2 – other significant observable
inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or
Level 3 – significant unobservable
inputs (including the Fund's own assumptions in determining the fair value of investments).
A summary of standard inputs is listed below:
Security
Type | |
Standard
Inputs |
Foreign
equities utilizing a fair value factor | |
Depositary
receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. |
The following is a summary of the inputs
used as of April 30, 2022 in valuing the Fund's investments at fair value. The inputs or methodologies used for valuing securities
are not necessarily an indication of the risk associated with investing in those securities. Please refer to the Portfolio of Investments
for a detailed breakout of the security types:
Investments,
at Value | |
Level
1 – Quoted Prices ($) | |
Level
2 – Other Significant
Observable Inputs ($) | |
Level
3 – Significant
Unobservable Inputs ($) | |
Total
($) |
Investments
in Securities | |
| |
| |
| |
|
Common
Stocks | |
$644,917,021 | |
$399,985,804 | |
$– | |
$1,044,902,825 |
Preferred
Stocks | |
– | |
13,539,995 | |
– | |
13,539,995 |
Total | |
$644,917,021 | |
$413,525,799 | |
$– | |
$1,058,442,820 |
Other
Financial Instruments | |
| |
| |
| |
|
Forward
Foreign Currency Exchange Contracts | |
$– | |
$1,023,200 | |
$– | |
$1,023,200 |
Total
Assets | |
$644,917,021 | |
$414,548,999 | |
$– | |
$1,059,466,020 |
Amounts listed as "–"
are $0 or round to $0.
During the six-months ended April 30,
2022, there were no significant changes to the fair valuation methodologies for the type of holdings in the Fund's portfolio.
18 |
Aberdeen Total Dynamic Dividend Fund |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
b.
Restricted Securities:
Restricted securities
are privately-placed securities whose resale is restricted under U.S. securities laws. The Fund may invest in restricted securities,
including unregistered securities eligible for resale without registration pursuant to Rule 144A and privately-placed securities
of U.S. and non-U.S. issuers offered outside the U.S. without registration pursuant to Regulation S under the Securities Act of 1933,
as amended (the "1933 Act"). Rule 144A securities may be freely traded among certain qualified institutional investors,
such as the Fund, but resale of such securities in the U.S. is permitted only in limited circumstances.
c. Foreign Currency Translation:
Foreign securities,
currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. Dollars at the exchange rate
of said currencies against the U.S. Dollar, as of the Valuation Time, as provided by an independent pricing service approved by the Board.
Foreign currency
amounts are translated into U.S. Dollars on the following basis:
(i) | market
value of investment securities, other assets and liabilities – at the current daily
rates of exchange at the Valuation Time; and |
(ii) | purchases
and sales of investment securities, income and expenses – at the relevant rate of exchange
prevailing on the respective dates of such transactions. |
The Fund does not
isolate that portion of gains and losses on investments in equity securities due to changes in the foreign exchange rates from the portion
due to changes in market prices of equity securities. Accordingly, realized and unrealized foreign currency gains and losses with respect
to such securities are included in the reported net realized and unrealized gains and losses on investment transactions balances.
The Fund reports certain
foreign currency related transactions and foreign taxes withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such foreign currency related transactions are treated as ordinary income for U.S. federal income tax purposes.
Net unrealized currency
gains or losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component
of net unrealized appreciation/depreciation in value of investments, and translation of other assets and liabilities denominated in foreign
currencies.
Net realized
foreign exchange gains or losses represent foreign exchange gains and losses from transactions in foreign currencies and forward foreign
currency contracts, exchange gains or losses realized between the trade date and settlement date on security transactions, and the difference
between the amounts of interest and dividends
recorded
on the Fund's books and the U.S. Dollar equivalent of the amounts actually received.
d. Security Transactions, Investment
Income and Expenses:
Security transactions
are recorded on the trade date. Realized and unrealized gains/(losses) from security and currency transactions are calculated on the
identified cost basis. Dividend income and corporate actions are recorded generally on the ex-date, except for certain dividends and
corporate actions which may be recorded after the ex-date, as soon as the Fund acquires information regarding such dividends or corporate
actions. Interest income and expenses are recorded on an accrual basis.
e. Derivative Financial Instruments:
The Fund is authorized
to use derivatives to manage currency risk, credit risk, and interest rate risk and to replicate, or use as a substitute for, physical
securities. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract.
The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement
of Assets and Liabilities.
Forward Foreign Currency Exchange Contracts:
A forward foreign
currency exchange contract ("forward contract") involves an obligation to purchase and sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the
contract. Forward contracts are used to manage the Fund's currency exposure in an efficient manner. They are used to sell unwanted currency
exposure that comes with holding securities in a market, or to buy currency exposure where the exposure from holding securities is insufficient
to give the desired currency exposure either in absolute terms or relative to a particular benchmark or index. The use of forward contracts
allows for the separation of investment decision-making between foreign securities holdings and their currencies.
The forward contract
is marked-to-market daily and the change in market value is recorded by the Fund as unrealized appreciation or depreciation. Forward
contracts' prices are received daily from an independent pricing provider. When the forward contract is closed, the Fund records a realized
gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. These realized
and unrealized gains and losses are reported on the Statement of Operations.
During the six-month
period ended April 30, 2022, the Fund used forward contracts to hedge its currency exposure.
While the Fund may
enter into forward contracts to seek to reduce currency exchange rate risks, transactions in such contracts involve
Aberdeen Total Dynamic Dividend Fund |
19 |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
certain
risks. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet
the terms of their contracts and from unanticipated movements in exchange rates. Thus, while the
Fund may benefit from such transactions, unanticipated changes in currency prices may result in
a poorer overall performance for the Fund than if it had not engaged in any such transactions. Moreover,
there may be imperfect correlation between the Fund's portfolio holdings or securities quoted or
denominated in a particular currency and forward contracts entered into by the Fund. Such imperfect
correlation may
prevent
the Fund from achieving a desired hedge, which will expose the Fund to the risk of foreign exchange
loss.
Forward contracts
are subject to the risk that a counterparty to a forward contract may default on its obligations. Since a forward foreign currency exchange
contract is not guaranteed by an exchange or clearing house, a default on the contract would deprive the Fund of unrealized profits,
transaction costs or the benefits of a currency hedge or force the Fund to cover its purchase or sale commitments, if any, at the market
price at the time of default.
Summary of Derivative Instruments:
The Fund may use derivatives for various
purposes as noted above.
The following is a
summary of the fair value of derivative instruments, not accounted for as hedging instruments, as of April 30, 2022:
| |
Asset
Derivatives | |
Liability
Derivatives |
Derivatives
Not Accounted For as Hedging Instruments and Risk Exposure | |
Statement
of Assets and Liabilities Location | |
Fair
Value | |
Statement
of Assets and Liabilities Location | |
Fair
Value |
Forward
foreign currency exchange contracts (foreign exchange risk) | |
Unrealized
appreciation on forward foreign currency exchange contracts | |
$1,023,200 | |
Unrealized
depreciation on forward foreign currency exchange contracts | |
$– |
Total | |
| |
$1,023,200 | |
| |
$– |
Amounts listed as "–"
are $0 or round to $0.
The Fund has transactions
that may be subject to enforceable master netting agreements. A reconciliation of the gross amounts on the Statement of Assets and Liabilities
as of April 30, 2022 to the net amounts by broker and derivative type, including any collateral received or pledged, is included
in the following tables:
| |
| |
Gross
Amounts Not Offset in Statement of Assets & Liabilities | |
| |
Gross Amounts Not Offset in Statement of Assets and Liabilities |
|
Description | |
Gross
Amounts of Assets Presented in Statement of Assets and Liabilities | |
Financial
Instruments | |
Collateral
Received(1) | |
Net
Amount(3) | |
Gross
Amounts of Liabilities Presented in Statement of Assets and Liabilities | |
Financial
Instruments | |
Collateral
Pledged(1) | |
Net
Amount(3) |
|
| |
Assets | |
Liabilities |
|
Forward
foreign currency(2) | |
| |
| |
| |
| |
| |
| |
| |
|
|
Royal
Bank of Canada (UK) | |
$1,023,200 | |
$– | |
$– | |
$1,023,200 | |
$– | |
$– | |
$– | |
$– |
|
| (1) | In
some instances, the actual collateral received and/or pledged may be more than the amount
shown here due to overcollateralization. |
| (2) | Includes
financial instruments which are not subject to a master netting arrangement across funds,
or another similar arrangement. |
| (3) | Net
amounts represent the net receivable/(payable) that would be due from/to the counterparty
in the event of default. Exposure from financial derivative instruments can only be netted
across transactions governed under the same master netting agreement with the same legal
entity. |
Amounts listed as "–"
are $0 or round to $0.
20 |
Aberdeen Total Dynamic Dividend Fund |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
The effect of derivative instruments on
the Statement of Operations for the six-month period ended April 30, 2022:
| |
Location
of Gain or (Loss) on Derivatives | |
Realized
Gain or (Loss) on Derivatives | |
Change
in Unrealized Appreciation/ (Depreciation) on Derivatives |
Forward
foreign currency exchange contracts (foreign exchange risk) | |
Realized/Unrealized
Gain/(Loss) from Investments and Foreign Currency Transactions | |
$1,555,309 | |
$1,042,182 |
Total | |
| |
$1,555,309 | |
$1,042,182 |
Information
about derivatives reflected as of the date of this report is generally indicative of the type of
activity for the six-month period ended April 30, 2022. The table below summarizes the weighted
average values of derivatives holdings for the Fund during the six-month period ended April 30,
2022.
Derivative | |
Average
Notional Value |
Purchase
Forward Foreign Currency Contracts | |
$– |
Sale
Forward Foreign Currency Contracts | |
$27,836,071 |
Amounts listed as "–" are
$0 or round to $0.
The Fund values derivatives
at fair value, as described in the Statement of Operations. Accordingly, the Fund does not follow hedge accounting even for derivatives
employed as economic hedges.
f. Distributions:
The Fund intends to
make regular monthly distributions of net investment income to holders of common shares. The Fund expects to pay its common shareholders
annually all or substantially all of its investment company taxable income. In addition, at least annually, the Fund intends to distribute
all or substantially all of its net capital gains, if any.
Distributions from
net realized gains for book purposes may include short-term capital gains which are ordinary income for tax purposes. Distributions to
common shareholders are recorded on the ex-dividend date.
Dividends and distributions
to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book-tax"
differences are considered either temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal income tax treatment. Temporary differences do not require reclassification.
To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes they are reported to
shareholders as return of capital.
g. Federal Income Taxes:
The Fund intends
to continue to qualify as a "regulated investment company" (RIC) by complying with the provisions available to certain investment
companies, as defined in Subchapter M of the Internal Revenue Code of 1986 (the "Code"), as amended, and to make distributions
of net investment income and net realized capital gains sufficient to relieve the Fund from all federal income taxes. Therefore, no federal
income tax provision is required.
The Fund recognizes
the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination
by tax authorities. Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition
in the financial statements. Since tax authorities can examine previously filed tax returns, the Fund's U.S. federal and state tax returns
for each of the most recent four fiscal years up to the fiscal year ended October 31, 2021 are subject to such review.
h. Foreign Withholding Tax:
Dividend and interest
income from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes and are recorded on the Statement
of Operations. The Fund files for tax reclaims for the refund of such withholding taxes according to tax treaties. Tax reclaims that
are deemed collectible are booked as tax reclaim receivable on the Statement of Assets and Liabilities. In addition, the Fund may be
subject to capital gains tax in certain countries in which it invests. The above taxes may be reduced or eliminated under the terms of
applicable U.S. income tax treaties with some of these countries. The Fund accrues such taxes when the related income is earned.
In addition, when
the Fund sells securities within certain countries in which it invests, the capital gains realized may be subject to tax. Based on these
market requirements and as required under GAAP, the Fund accrues deferred capital gains tax on securities currently held that have unrealized
appreciation within these countries. The amount of deferred capital gains tax accrued, if any, is reported on the Statement of Assets
and Liabilities.
Aberdeen Total Dynamic Dividend Fund |
21 |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
3.
Agreements and Transactions with Affiliates
a. Investment Adviser:
AAML serves as the
Fund's investment adviser pursuant to an investment advisory agreement (the "Advisory Agreement") with the Fund. AAML is a
wholly-owned indirect subsidiary of abrdn plc (formerly known as "Standard Life Aberdeen plc"). In rendering advisory services,
the Adviser may use the resources of investment advisor subsidiaries of abrdn plc. These affiliates have entered into procedures pursuant
to which investment professionals from affiliates may render portfolio management and research services as associated persons of the
Adviser.
As
compensation for its services to the Fund, AAML receives an annual investment advisory fee of 1.00% based on the Fund's average daily
managed assets, computed daily and payable monthly. During the six-month period ended April 30, 2022 the Fund paid AAML $5,634,022.
"Managed Assets" means total assets of the Fund, including any form of investment leverage, minus all accrued expenses incurred
in the normal course of operations, but not excluding any liabilities or obligations attributable to investment leverage obtained through
(i) indebtedness of any type (including, without limitation, borrowing through a credit facility or the issuance of debt securities),
(ii) the issuance of preferred stock or other similar preference securities, (iii) the reinvestment of collateral received
for securities loaned in
accordance
with the Fund's investment objectives and policies, and/or (iv) any other means.
Effective May 4,
2018, AAML entered into a written contract (the "Expense Limitation Agreement") with the Fund that is effective through June 30,
2022. The Expense Limitation Agreement limits the total ordinary operating expenses of the Fund (excluding any leverage costs, interest,
taxes, brokerage commissions, and any non-routine expenses) from exceeding 1.14% of the average daily net assets of the Fund on an annualized
basis. The total amount of the waiver for the six-month period ended April 30, 2022 pursuant to the Expense Limitation Agreement
was $198,557.
AAML may request and
receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed pursuant to the Expense Limitation Agreement
as of a date not more than three years after the date when the Adviser limited the fees or reimbursed the expenses; provided that the
following requirements are met: the reimbursements do not cause the Fund to exceed the lesser of the applicable expense limitation in
the contract at the time the fees were limited or expenses are paid or the applicable expense limitation in effect at the time the expenses
are being recouped by the Adviser, and the payment of such reimbursement is approved by the Board on a quarterly basis (the "Reimbursement
Requirements"). Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed
by AAML is not permitted.
As of April 30,
2022, to the extent the Reimbursement Requirements are met, the cumulative potential reimbursements to AAML from the Fund, based on expenses
reimbursed by AAML, including adjustments described above, would be:
Amount
Fiscal Year 2019 (Expires 10/31/22) | |
Amount
Fiscal Year 2020
(Expires 10/31/23) | |
Amount
Fiscal Year 2021
(Expires 10/31/24) | |
Amount
Six Months
Period 2022 (Expires 4/30/25) | |
Total* |
$242,143 | |
$292,209 | |
$491,643 | |
$198,557 | |
$1,224,552 |
* Amounts reported are due to
expire throughout the respective 3-year expiration period presented above.
b.
Fund Administrator:
Effective June 1,
2020, abrdn Inc. (formerly, Aberdeen Standard Investments Inc.), an affiliate of the Adviser, became the Fund's Administrator. Pursuant
to the Administration Agreement, abrdn Inc. receives a fee paid by the Fund, at an annual fee rate of 0.08% of the Fund's average daily
net assets. Prior to June 1, 2020, State Street Bank and Trust Company ("SSBT") served as the Fund's Administrator. During
the six-month period ended April 30, 2022, abrdn Inc. earned $449,623 from the Fund for administration services.
c. Investor Relations:
Under the
terms of the Investor Relations Services Agreement, abrdn Inc., an affiliate of AAML, provides and/or engages third parties to
provide
Investor Relations Services to the Fund and certain other funds advised by abrdn Inc. or its affiliates
as part of an Investor Relations Program. Under the Investor Relations Services Agreement, the
Fund owes a portion of the fees related to the Investor Relations Program (the "Fund's Portion").
However, Investor Relations Services fees are limited by abrdn Inc. so that the Fund will
only pay up to an annual rate of 0.05% of the Fund's average weekly net assets. Any difference
between the capped rate of 0.05% of the Fund's average weekly net assets and the Fund's Portion
is paid for by abrdn Inc.
Pursuant to the terms
of the Investor Relations Services Agreement, abrdn Inc. (or third parties engaged by abrdn Inc.), among other things, provides objective
and timely information to shareholders based on
22 |
Aberdeen Total Dynamic Dividend Fund |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
publicly
available information; provides information efficiently through the use of technology while
offering shareholders immediate access to knowledgeable investor relations representatives;
develops and maintains effective communications with investment professionals from a wide
variety of firms; creates and maintains investor relations communication materials such as
fund manager interviews, films and webcasts, publishes white papers, magazine articles and
other relevant materials discussing the Fund's investment results, portfolio positioning
and outlook; develops and maintains effective communications with large institutional shareholders;
responds to specific shareholder questions; and reports activities and results to the Board
and management detailing insight into general shareholder sentiment.
During the six-month
period ended April 30, 2022, the Fund incurred investor relations fees of approximately $112,806. For the six-month period ended
April 30, 2022, abrdn Inc. did not contribute to the investor relations fees for the Fund because the Fund's contribution was below
0.05% of the Fund's average weekly net assets on an annual basis.
4. Investment Transactions
Purchases and sales
of investment securities (excluding short-term securities) for the six-month period ended April 30, 2022, were $408,587,414 and
$393,225,009, respectively.
5. Capital
As of April 30,
2022, there were 105,430,999 shares of common stock issued and outstanding.
6. Line of Credit
On December 1,
2010, the Fund executed a Prime Brokerage Agreement with BNP Paribas Prime Brokerage International Ltd. ("BNPP PB"). On October 1,
2015 the Fund amended its Credit Facility Agreement which allows the Fund to borrow on a secured and committed basis. The maximum commitment
amount is $300,000,000 however, the Fund may borrow up to 33.33% of its total assets on an uncommitted basis. On December 14, 2021,
the Board approved an amendment to its Prime Brokerage Agreement with BNP Paribas Prime Brokerage International to adjust the charged
interest on amounts borrowed at a variable rate, which may be based on the Secured Overnight Financing Rate ("SOFR") plus a
spread. The previous terms of the lending agreement indicate the rate to be LIBOR plus 0.85% per annum on amounts borrowed. The BNPP
PB facility provides a secured, committed line of credit for the Fund where certain Fund assets are pledged against advances made to
the Fund. The Fund has granted a security interest in all pledged assets used as collateral to BNPP PB. The maximum amount of the line
of credit available is the lesser of 33.33% of its total assets of the Fund or the amounts disclosed above, including the amount borrowed.
During the six-month period
ended
April 30, 2022, the average borrowing by the Fund was $8,228,349 with an average weighted
interest rate on borrowings of 1.27%. During the six-month period ended April 30, 2022,
the maximum borrowing by the Fund was $38,320,633. Interest expense related to the line of
credit for the six-month period ended April 30, 2022, was $3,880. As of April 30,
2022, the outstanding balance on the loan was $38,320,633.
7. Open Market Repurchase Program
On June 13,
2018, the Board approved a share repurchase program ("Program") for the Fund. The Program allows the Fund to purchase, in the
open market, its outstanding common shares, with the amount and timing of any repurchase determined at the discretion of the Fund's investment
adviser and subject to market conditions and investment considerations. The Fund reports repurchase activity on the Fund's website on
a monthly basis. For the six-month period ended April 30, 2022, the Fund did not repurchase any shares through the Program.
8. Portfolio Investment Risks
a. Dividend Strategy Risk:
There is no guarantee
that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain
at their current levels or increase over time. The Fund's emphasis on dividend paying stocks could cause the Fund to underperform similar
funds that invest without consideration of a company's track record of paying dividends or ability to pay dividends in the future. Dividend-paying
stocks may not participate in a broad market advance to the same degree as other stocks, and a sharp rise in interest rates or economic
downturn could cause a company to unexpectedly reduce or eliminate its dividend. The Fund may hold securities for short periods of time
related to the dividend payment periods and may experience loss during these periods.
b. Emerging Markets Risk:
The Fund is subject
to emerging markets risk. This is a magnification of the risks that apply to foreign investments. These risks are greater for securities
of companies in emerging market countries because the countries may have less stable governments, more volatile currencies and less established
markets (see "Foreign Securities Risk" below).
c. Equity Securities Risk:
The stock or other
security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such
as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction
in the demand for products or services in a particular industry). Holders of common stock generally are subject to more risks than holders
of preferred stock or debt securities because
Aberdeen Total Dynamic Dividend Fund |
23 |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
the right
to repayment of common stockholders' claims is subordinated to that of preferred stock and debt
securities upon the bankruptcy of the issuer.
d. Foreign Currency Exposure Risk:
The value of foreign currencies relative to the
U.S. Dollar fluctuates in response to market, economic, political, regulatory, geopolitical or other conditions. A decline in the value
of a foreign currency versus the U.S. Dollar reduces the value in U.S. Dollars of investments denominated in that foreign currency. This
risk may impact the Fund more greatly to the extent the Fund does not hedge its currency risk, or hedging techniques used by the Adviser
are unsuccessful.
e. Foreign Securities Risk:
Foreign countries in which the Fund may invest
may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the Fund's investments may decline
because of factors such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political
or financial instability. To the extent the Fund focuses its investments in a single country or only a few countries in a particular
geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on
Fund performance relative to a more geographically diversified fund.
f. Issuer Risk:
The value of a security may decline for reasons
directly related to the issuer, such as management performance, financial leverage and reduced demand for the issuer's goods or services.
g. Leverage Risk:
The Fund may use leverage to purchase securities.
Increases and decreases in the value of the Fund's portfolio will be magnified when the Fund uses leverage.
h. LIBOR Risk:
The Fund may invest in certain debt
securities, derivatives or other financial instruments that utilize LIBOR as a "benchmark" or "reference rate" for
various interest rate calculations. In July 2017, the United Kingdom Financial Conduct Authority ("FCA"), which regulates
LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. However, subsequent announcements by the FCA, the LIBOR administrator
and other regulators indicate that it is possible that the most widely used LIBOR rates may continue until mid-2023. It is anticipated
that LIBOR ultimately will be discontinued or the regulator will announce that it is no longer sufficiently robust to be representative
of its underlying market around that time. Although financial regulators and industry working groups have suggested
alternative
reference rates, such as European Interbank Offered Rate ("EURIBOR"), Sterling Overnight
Interbank Average Rate ("SONIA") and SOFR, global consensus on alternative rates is lacking
and the process for amending existing contracts or instruments to transition away from LIBOR remains
unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms
to the determination or supervision of reference rates could have an adverse impact on the market
for, or value of, any securities or payments linked to those reference rates, which may adversely
affect the Fund's performance and/or net asset value. Uncertainty and risk also remain regarding
the willingness and ability of issuers and lenders to include revised provisions in new and existing
contracts or instruments. Consequently, the transition away from LIBOR to other reference rates
may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations
in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased
difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely
affecting the Fund's performance. Furthermore, the risks associated with the expected discontinuation
of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition
to an alternative reference rate is not completed in a timely manner.
i. Management Risk:
The Fund is subject to the risk that the Adviser
may make poor security selections. The Adviser, and its portfolio managers apply their own investment techniques and risk analyses in
making investment decisions for the Fund and there can be no guarantee that these decisions will achieve the desired results for the
Fund. In addition, the Adviser may select securities that underperform the relevant market or other funds with similar investment objectives
and strategies.
j. Market Risk:
Markets are affected by numerous factors, including
interest rates, the outlook for corporate profits, the health of the national and world economies, the fluctuation of other stock markets
around the world, and financial, economic and other global market developments and disruptions, such as those arising from war, terrorism,
market manipulation, government interventions, defaults and shutdowns, political changes or diplomatic developments, public health emergencies
and natural/environmental disasters. Such events can negatively impact the securities markets and cause the Fund to lose value.
One such event is the COVID-19 pandemic, which
has caused major disruptions to economies and markets around the world, including the markets in which the Fund invests, and which has
and may continue to negatively impact the value of certain of the Fund's investments.
24 |
Aberdeen Total Dynamic Dividend Fund |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
Although vaccines
for COVID-19 and variants thereof are becoming more widely available, the COVID-19 pandemic and
impacts thereof may continue for an extended period of time and may vary from market to market.
To the extent the impacts of COVID-19 continue, the Fund may experience negative impacts to its
business that could exacerbate other risks to which the Fund is subject. Policy and legislative
changes in countries around the world are affecting many aspects of financial regulation, and governmental
and quasi-governmental authorities and regulators throughout the world have previously responded
to serious economic disruptions with a variety of significant fiscal and monetary policy changes.
In addition, economies and financial markets throughout
the world are becoming increasingly interconnected. As a result, whether or not the Fund invests in securities of issuers located in
or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the Fund's investments
may be negatively affected by such events.
For example, whether or not the Fund invests in
securities of issuers located in Europe (whether the EU, Eurozone or UK) or with significant exposure to European, EU, Eurozone or UK
issuers or countries, the unavoidable uncertainties and events related to the UK's departure from the EU ("Brexit") could negatively
affect the value and liquidity of the Fund's investments, increase taxes and costs of business and cause volatility in currency exchange
rates and interest rates. Brexit could adversely affect the performance of contracts in existence at the date of Brexit and European,
UK or worldwide political, regulatory, economic or market conditions and could contribute to instability in political institutions, regulatory
agencies and financial markets. Brexit could also lead to legal uncertainty and politically divergent national laws and regulations as
a new relationship between the UK and EU is defined and as the UK determines which EU laws to replace or replicate. Any of these effects
of Brexit, and others that cannot be anticipated, could adversely affect the Fund's business, results of operations and financial condition.
The impact of these changes on the markets, and
the practical implications for market participants, may not be fully known for some time.
k. Mid-Cap Securities Risk:
Securities of medium-sized companies tend to be
more volatile and less liquid than securities of larger companies.
l. Non-U.S. Taxation Risk:
Income, proceeds and gains received
by the Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries, which will
reduce the return on those
investments.
Tax treaties between certain countries and the United States may reduce or eliminate such taxes.
If, at the close of its taxable year, more than
50% of the value of the Fund's total assets consists of securities of foreign corporations, including for this purpose foreign governments,
the Fund will be permitted to make an election under the Code that will allow shareholders a deduction or credit for foreign taxes paid
by the Fund. In such a case, shareholders will include in gross income from foreign sources their pro rata shares of such taxes. A shareholder's
ability to claim an offsetting foreign tax credit or deduction in respect of such foreign taxes is subject to certain limitations imposed
by the Code, which may result in the shareholder's not receiving a full credit or deduction (if any) for the amount of such taxes. Shareholders
who do not itemize on their U.S. federal income tax returns may claim a credit (but not a deduction) for such foreign taxes. If the Fund
does not qualify for or chooses not to make such an election, shareholders will not be entitled separately to claim a credit or deduction
for U.S. federal income tax purposes with respect to foreign taxes paid by the Fund; in that case the foreign tax will nonetheless reduce
the Fund's taxable income. Even if the Fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt
shareholders and those who invest in the Fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit
or deduction.
m. Passive Foreign Investment Company Tax Risk:
Equity investments by the Fund in certain "passive
foreign investment companies" ("PFICs") could subject the Fund to a U.S. federal income tax (including interest charges)
on distributions received from the PFIC or on proceeds received from the disposition of shares in the PFIC. The Fund may be able to elect
to treat a PFIC as a "qualified electing fund" (i.e., make a "QEF election"), in which case the Fund will be required
to include its share of the company's income and net capital gains annually. The Fund may make an election to mark the gains (and to
a limited extent losses) in such holdings "to the market" as though it had sold and repurchased its holdings in those PFICs
on the last day of the Fund's taxable year. Such gains and losses are treated as ordinary income and loss. Because it is not always possible
to identify a foreign corporation as a PFIC, the Fund may incur the tax and interest charges described above in some instances.
n. Portfolio Turnover Risk:
The Fund may engage in active and frequent trading
of portfolio securities to achieve its investment objective. High portfolio turnover necessarily results in greater transaction costs
which may reduce Fund performance. It may also result in greater realization of gains, which may include short-term gains taxable at
ordinary income tax rates.
Aberdeen Total Dynamic Dividend Fund |
25 |
Notes to Financial Statements (unaudited)
(continued)
April 30, 2022
o. Qualified Dividend Income
Tax Risk:
Favorable U.S. federal tax treatment of Fund distributions
may be adversely affected, changed or repealed by future changes in tax laws.
p. REIT and Real Estate Risk:
Investment in real estate investment trusts ("REITs")
and real estate involves the risks that are associated with direct ownership of real estate and with the real estate industry in general.
These risks include: declines in the value of real estate; risks related to local economic conditions, overbuilding and increased competition;
increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income,
neighborhood values or the appeal of properties to tenants; changes in interest rates and changes in general economic and market conditions.
REITs' share prices may decline because of adverse developments affecting the real estate industry including changes in interest rates.
The returns from REITs may trail returns from the overall market. Additionally, there is always a risk that a given REIT will fail to
qualify for favorable tax treatment. REITs may be leveraged, which increases risk. Certain REITs charge management fees, which may result
in layering the management fee paid by the Fund.
q. Sector Risk:
To the extent that the Fund has a significant portion
of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector,
the Fund may be more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly.
r. Small-Cap Securities Risk:
Securities of smaller companies are usually less
stable in price and less liquid than those of larger, more established companies. Therefore, they generally involve greater risk.
s. Valuation Risk:
The price that the Fund could receive upon the
sale of any particular portfolio investment may differ from the Fund's valuation of the investment, particularly for securities that
trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing
service. As a result, the price received upon the sale of an investment may be less than the value ascribed by the Fund, and the Fund
could realize a greater than expected loss or lower than expected gain upon the sale of the investment. The Fund's ability to value its
investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers.
9. Contingencies
In the normal course of business, the Fund may
provide general indemnifications pursuant to certain contracts and organizational documents. The Fund's maximum exposure under these
arrangements is dependent on future claims that may be made against the Fund, and therefore, cannot be estimated; however, the Fund expects
the risk of loss from such claims to be remote.
10. Tax Information
The U.S. federal income tax basis of the Fund's
investments (including derivatives, if applicable) and the net unrealized appreciation as of April 30, 2022, were as follows:
Tax
Basis of Investments |
Appreciation |
Depreciation |
Net
Unrealized
Appreciation |
$900,692,582 |
$250,734,950 |
$(92,984,712) |
$157,750,238 |
11. Recent Rulemaking
In October 2020, the SEC adopted new regulations
governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives
a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940
Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk
management program and appoint a derivatives risk manager. Management is currently finalizing the implementation of Rule 18f-4 to
meet the August 19, 2022 compliance date.
In December 2020,
the SEC adopted Rule 2a-5 under the 1940 Act, which establishes requirements for determining
fair value in good faith for purposes of the 1940 Act, including related oversight and reporting
requirements. The rule also defines when market quotations are "readily available"
for purposes of the 1940 Act, the threshold for determining whether a fund must fair value a security.
The SEC also adopted new Rule 31a-4 under the 1940 Act, which sets forth the recordkeeping
requirements associated with fair value determinations. Finally, the SEC is rescinding previously
issued guidance on related issues, including the role of a board in determining fair value and
the accounting and
26 |
Aberdeen Total Dynamic Dividend Fund |
Notes to Financial Statements (unaudited)
(concluded)
April 30, 2022
auditing of
fund investments. Rule 2a-5 and Rule 31a-4 became effective on March 8, 2021, with
a compliance date of September 8, 2022. Management is currently evaluating this guidance.
12. Subsequent Events
Management has evaluated the need for disclosures
and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation,
no disclosures and/or adjustments were required to the financial statements as of April 30, 2022, except as provided below.
On May 10,
2022 and June 9, 2022, the Fund announced that it will pay on May 31, 2022 and June 30,
2022 a distribution of $0.0575 per share to all shareholders of record as of May 20, 2022
and June 22, 2022, respectively.
On June 14, the Board approved the continuation
of the Expense Limitation Agreement for another year.
Aberdeen Total Dynamic Dividend Fund |
27 |
Supplemental Information (unaudited)
Results of Annual Meeting of Shareholders
The Annual Meeting of Shareholders was held on April 28, 2022.
The description of the proposal and number of shares voted at the meeting are as follows:
To elect one Class II Trustee, to serve for a three-year
term:
| |
| Votes
For | | |
| Votes
Withheld | |
P.
Gerald Malone | |
| 78,312,792 | | |
| 8,593,480 | |
28 | Aberdeen
Total Dynamic Dividend Fund |
Dividend Reinvestment and Optional Cash
Purchase Plan (unaudited)
The Fund intends to distribute to stockholders
substantially all of its net investment income and to distribute any net realized capital gains at least annually. Net investment income
for this purpose is income other than net realized long-term and short-term capital gains net of expenses. Pursuant to the Dividend Reinvestment
and Optional Cash Purchase Plan (the "Plan"), stockholders whose shares of common stock are registered in their own names will
be deemed to have elected to have all distributions automatically reinvested by Computershare Trust Company N.A. (the "Plan Agent")
in the Fund shares pursuant to the Plan, unless such stockholders elect to receive distributions in cash. Stockholders who elect to receive
distributions in cash will receive such distributions paid by check in U.S. Dollars mailed directly to the stockholder by the Plan Agent,
as dividend paying agent. In the case of stockholders such as banks, brokers or nominees that hold shares for others who are beneficial
owners, the Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by the stockholders
as representing the total amount registered in such stockholders' names and held for the account of beneficial owners that have not elected
to receive distributions in cash. Investors that own shares registered in the name of a bank, broker or other nominee should consult
with such nominee as to participation in the Plan through such nominee and may be required to have their shares registered in their own
names in order to participate in the Plan. Please note that the Fund does not issue certificates so all shares will be registered in
book entry form. The Plan Agent serves as agent for the stockholders in administering the Plan. If the Trustees of the Fund declare an
income dividend or a capital gains distribution payable either in the Fund's common stock or in cash, nonparticipants in the Plan will
receive cash and participants in the Plan will receive common stock, to be issued by the Fund or purchased by the Plan Agent in the open
market, as provided below. If the market price per share (plus expected per share fees) on the valuation date equals or exceeds NAV per
share on that date, the Fund will issue new shares to participants at NAV; provided, however, that if the NAV is less than 95% of the
market price on the valuation date, then such shares will be issued at 95% of the market price. The valuation date will be the payable
date for such distribution or dividend or, if that date is not a trading day on the New York Stock Exchange, the immediately preceding
trading date. If NAV exceeds the market price of Fund shares at such time, or if the Fund should declare an income dividend or capital
gains distribution payable only in cash, the Plan Agent will, as agent for the participants, buy Fund shares in the open market, on the
New York Stock Exchange or elsewhere, for the participants' accounts on, or shortly after, the payment date. If, before the Plan Agent
has completed its purchases, the market price exceeds the NAV of a Fund share, the average per share purchase price paid by the Plan
Agent may exceed the NAV of the Fund's shares, resulting in
the acquisition of fewer shares than if the distribution
had been paid in shares issued by the Fund on the dividend payment date. Because of the foregoing difficulty with respect to open-market
purchases, the Plan provides that if the Plan Agent is unable to invest the full dividend amount in open-market purchases during the
purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Agent will cease making open-market
purchases and will receive the uninvested portion of the dividend amount in newly issued shares at the close of business on the last
purchase date.
Participants have the option of making additional
cash payments of a minimum of $50 per investment (by check, one-time online bank debit or recurring automatic monthly ACH debit) to the
Plan Agent for investment in the Fund's common stock, with an annual maximum contribution of $250,000. The Plan Agent will wait up to
three business days after receipt of a check or electronic funds transfer to ensure it receives good funds. Following confirmation of
receipt of good funds, the Plan Agent will use all such funds received from participants to purchase Fund shares in the open market on
the 25th day of each month or the next trading day if the 25th is not a trading day.
If the participant sets up recurring automatic
monthly ACH debits, funds will be withdrawn from his or her U.S. bank account on the 20th of each month or the next business day if the
20th is not a banking business day and invested on the next investment date. The Plan Agent maintains all stockholder accounts in the
Plan and furnishes written confirmations of all transactions in an account, including information needed by stockholders for personal
and tax records. Shares in the account of each Plan participant will be held by the Plan Agent in the name of the participant, and each
stockholder's proxy will include those shares purchased pursuant to the Plan. There will be no brokerage charges with respect to common
shares issued directly by the Fund. However, each participant will pay a per share fee of $0.02 incurred with respect to the Plan Agent's
open market purchases in connection with the reinvestment of dividends, capital gains distributions and voluntary cash payments made
by the participant. Per share fees include any applicable brokerage commissions the Plan Agent is required to pay.
Participants also have the option of selling their
shares through the Plan. The Plan supports two types of sales orders. Batch order sales are submitted on each market day and will be
grouped with other sale requests to be sold. The price will be the average sale price obtained by Computershare's broker, net of fees,
for each batch order and will be sold generally within 2 business days of the request during regular open market hours. Please note that
all written sales requests are always processed by Batch Order. ($10 and $0.12 per share). Market Order sales will sell at the next available
trade. The shares are sold real
| Aberdeen Total Dynamic Dividend
Fund |
29 |
Dividend Reinvestment and Optional Cash
Purchase Plan (unaudited) (concluded)
time when they hit the market, however an available
trade must be presented to complete this transaction. Market Order sales may only be requested by phone at 1-800-647-0584 or using Investor
Center through www.computershare.com/buyaberdeen. ($25 and $0.12 per share).
The receipt of dividends and distributions
under the Plan will not relieve participants of any income tax that may be payable on such dividends or distributions. The Fund or the
Plan Agent may terminate the Plan as applied to any voluntary cash payments made and any dividend or distribution paid subsequent to
notice of the termination sent to members of the Plan at least 30 days prior to the record date for such
dividend or distribution. The Plan also may be
amended by the Fund or the Plan Agent, but (except when necessary or appropriate to comply with applicable law or the rules or policies
of the Securities and Exchange Commission or any other regulatory authority) only by mailing a written notice at least 30 days prior
to the effective date to the participants in the Plan. All correspondence concerning the Plan should be directed to the Plan Agent by
phone at 1-800-647-0584, using Investor Center through www.computershare.com/buyaberdeen or in writing to Computershare Trust Company
N.A., P.O. Box 505000, Louisville, KY 40233-5000.
30 | Aberdeen
Total Dynamic Dividend Fund |
Corporate Information
Trustees
Stephen Bird
Nancy Yao Maasbach
P. Gerald Malone, Chairman
John Sievwright
Investment Adviser
Aberdeen Asset Managers Limited
Bow Bells House
1 Bread Street
London, United Kingdom
EC4M 9HH
Custodian
State Street Bank and Trust Company
1 Lincoln Street
Boston, MA 02111
Transfer Agent
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, KY 40233
Independent Registered Public Accounting Firm
KPMG LLP
1601 Market Street
Philadelphia, PA 19103
Legal Counsel
Dechert LLP
1900 K Street, N.W.
Washington, DC 20006
Administrator
abrdn Inc.
1900 Market Street, Suite 200
Philadelphia, PA 19103
Investor Relations
abrdn Inc.
1900 Market Street, Suite 200
Philadelphia, PA 19103
1-800-522-5465
Investor.Relations@abrdn.com
The Financial Statements as of April 30, 2022,
included in this report, were not audited and accordingly, no opinion is expressed thereon.
Notice is hereby given in accordance with Section 23(c) of
the Investment Company Act of 1940, as amended, that the Fund may purchase, from time to time, shares of its common stock in the open
market.
Shares of Aberdeen Total Dynamic Dividend Fund
are traded on the NYSE under the symbol "AOD". Information about the Fund's net asset value and market price is available at
www.aberdeenaod.com.
This report, including the financial information
herein, is transmitted to the shareholders of Aberdeen Total Dynamic Dividend Fund for their general information only. It does not have
regard to the specific investment objectives, financial situation and the particular needs of any specific person. Past performance is
no guarantee of future returns.
AOD SEMI-ANNUAL
(b) Not applicable.