Aberdeen Emerging new dividend policy new fee

Aberdeen Emerging new dividend policy new fee – these measures are being implemented by the Board in recognition of current trends within the sector and to enhance and broaden the appeal of the Company to investors.


The Board is pleased with the progress made by the Company in recent years with regard to revised management arrangements, the diligent implementation of the investment process and the improved performance that has resulted.

In the three years since the new lead managers took responsibility for AEMC’s portfolio the Company has:

  • Been amongst the best performing of its Direct Peer Group (ranked second out of six funds, with NAV +37.2% vs Direct Peer Group average of +29.9%. Source: Bloomberg LLP. Data in GBP terms to 30 June 2017.)
  • Achieved its stated objective of benchmark outperformance in challenging market conditions (NAV +37.2% vs Benchmark +35.8%. Source: Bloomberg LLP).
  • Delivered these returns with less volatility than many of its peers and the Benchmark (volatility of monthly NAV 14.4% vs benchmark 15.8%. Source: Aberdeen Asset Management)

The Board is cognisant, however, of the discount to net asset value at which the Company’s shares continue to trade despite the improving trend in performance, and are of the view that the measures outlined below will serve to improve the rating of the fund over the longer term.

Dividend Policy

The Board intends to commence making distributions by way of dividends to be funded from a combination of income and capital.  A first interim dividend in respect of the year ending 31 October 2017 will be declared in August 2017 and a further dividend in respect of the year will be declared after the year end.  In future years, dividends will be paid on a quarterly basis.  It is anticipated that the total dividend paid to Shareholders in the next full financial year will be no less than 20 pence per share. The Board is mindful of the desirability to investors of growth in the absolute level of the dividend over time.

This measure is being adopted in the belief that the level of dividends paid by emerging market companies over the long term is an increasingly important attraction for investors seeking to invest in the emerging market asset class. Consultation with existing and prospective shareholders on this topic has been supportive of this view.

The projected dividend set out above is an intention only and does not comprise a profit forecast. There can be no assurance that this intention can or will be met and it should not be seen as an indication of the Company’s expected or actual results or returns. Accordingly, investors should not place any reliance on this intention in deciding whether to invest in or acquire shares in the Company nor assume that the Company will make any distributions at all.

The declaration and/or payment of any dividend will be subject to compliance with all necessary regulatory obligations of the Company, including the Guernsey Law solvency test and will also be subject to the Company retaining sufficient cash for its working capital requirements.

Management Fee

The Company’s current management fee is charged at an annualised rate of 1.0% of adjusted market capitalisation, reduced by the proportion of the Company’s net assets invested in funds which are managed by Aberdeen Asset Management (“Aberdeen Funds”).

With effect from 1 November 2017 (the commencement of the Company’s next financial year) the annual management fee will decrease to an annualised rate of 0.8% of net assets, reduced in the same manner for any investments in Aberdeen Funds. At the end of June 2017, 7.3% of the Company’s net assets were invested in Aberdeen Funds. The revised fee structure, had it been in place in June 2017, would have resulted in an effective annualised management fee of 0.74% of net assets.

The Board believes the revised arrangements represent good value for shareholders. The revision was considered in the context of the overall expenses of the Company in absolute terms and relative to peer group funds. The Board would like to highlight that the Company’s ongoing charges ratio of 1.1% (as disclosed in its Annual Report for the year ended 31 October 2016) is already the lowest in its Direct Peer Group, and is expected to fall further following this change.

Mark Hadsley-Chaplin, Chairman of AEMC, commented: “The Board believes that the introduction of dividend payments along with the revised management fee will be welcomed by existing and prospective investors. AEMC offers investors a targeted route into the diverse and exciting opportunities presented by emerging markets. The investment team is delivering competitive returns and the initiatives outlined above are designed to enhance the appeal of their efforts to a broad range of investors.”

AEMC : Aberdeen Emerging new dividend policy new fee

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