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Aberdeen Emerging Markets Fund closing to new investors.

edited February 2013 in Fund Discussions

497 1 a13-3126_4497.htm 497

Aberdeen Emerging Markets Fund
(formerly, Aberdeen Emerging Markets Institutional Fund)

Supplement to the Aberdeen Funds Statutory Prospectus and Statement of Additional Information, each dated February 27, 2012, as supplemented to date.

The Board of Trustees of Aberdeen Funds (the "Board"), on behalf of its series, Aberdeen Emerging Markets Fund (formerly, Aberdeen Emerging Markets Institutional Fund) (the "Fund"), recently approved a proposal to limit inflows to the Fund in order to protect the integrity of the investment process that is used to manage the Fund. Accordingly, effective February 22, 2013 (the "Closing Date"), the Fund will no longer accept purchase orders from new investors or exchanges from other Aberdeen Funds into the Fund by new investors. However, the categories of persons described below will continue to be able to invest in the Fund:

• Existing shareholders, as of the Closing Date, will be permitted to make new investments into the Fund directly.

• Existing shareholders, as of the Closing Date, will be permitted to continue to purchase Fund shares through the Automatic Asset Accumulation Plan and through dividend and capital gain reinvestments.

• Existing shareholders, as of the Closing Date, will be permitted to transfer assets from one existing account to another account within the Fund, regardless of whether such account is under a different registration or holds shares of the Fund as of the Closing Date. Such shareholders will be permitted to make new investments into such account.

• Existing shareholders, as of the Closing Date, will be permitted to exchange shares within an existing account from one share class to another share class of the Fund, subject to any investment minimum or eligibility requirements detailed in the Fund's prospectus. Such shareholders will be permitted to make new investments into such account.

• 401(k) plans, other qualified employee benefit plans, and firm-wide model-based investment programs, each with existing accounts in the Fund as of the Closing Date, will be permitted to purchase additional shares in the Fund.

• Financial intermediaries trading in an omnibus structure that currently have accounts in the Fund or that convert fully disclosed accounts to an omnibus structure will be permitted to purchase additional shares in the Fund on behalf of existing or new clients or customers.

Existing shareholders, as of the Closing Date, who later sell all of their shares of the Fund will not be permitted to establish new accounts or reinvest in the Fund. In addition, the Fund reserves the right to accept purchases from institutions that have notified the Fund's adviser or distributor of their intent to invest in the Fund prior to the Closing Date, regardless of whether such institutions hold shares of the Fund as of the Closing Date. The Fund's Board, and officers and employees of the Fund's adviser and its affiliates, will not be permitted to purchase additional shares in the Fund after the Closing Date unless such investment is through a permitted channel (i.e., 401(k) plan). The Fund reserves the right to accept purchases from the Aberdeen Multi-Asset Allocation Funds, regardless of whether such funds hold shares of the Fund as of the Closing Date. The Fund reserves the right to accept investments transferred from other Aberdeen emerging markets vehicles at its discretion.

The Fund will continue to limit inflows to the Fund until otherwise notified.

Effective upon the Closing Date, the prospectus of the Fund is supplemented by modifying all references to the ability to purchase shares of the Fund as set forth in this Supplement.

Please retain this Supplement for future reference.



  • Thanks for the heads up. I'm one of the Seafarer junkies here, but Aberdeen's performance is too good not to keep a toe in the door, and it's only $500 to play. EM long term will probably be the place to be, and they let you add $100 at a time, so one's seldom at a loss about what to do with the occasional stock dividend (need $500 for Seafarer).
  • Reply to @STB65: fidelity either requires $1mm or charges $75 for the purchase on decent share classes. where are you finding $500 minimum, stb?
  • My IRA at TD Ameritrade has GEGAX as a NTF fund with a $250 minimum. Didn't realize I was getting such a deal, but I have no idea what non-IRA rules may be. I didn't check the expenses on class A, so there may be issues of which I am unaware.
  • Reply to @STB65: The mutual fund carrying the GEGAX carries a front-end sales load - it's incorporated in the price (Net asset value per share plus the sales load of approximately 5.75% of the net asset value). I've noticed that brokers sometimes show load funds as "NTF," because, in a sense, they don't add an additional "transaction fee." But the fact of the matter is that, depending on the size of your purchase, your 5.75% may be a whale of a lot more than the broker's stated "transaction fee." (And your broker - and perhaps a "wholesaler" - is getting the load.)

    Example: if you're buying the minimum of $250.00 of a loaded fund, your 5.75% load is around $14.50. But if you're purchasing $2,500, your 5.75% load is $145.00. Ca-Ching! You just made the broker's day. It's "Buyer Beware" when Wall Street is involved.

    Hopefully, you bought "load waived" class shares.

    Respectfully submitted,
  • Reply to @STB65:

    I checked Ameritrade's website and GEGAX does indeed carry a 5.75% sales charge. Plus, they kiss you once a year with another 0.25% 12b-1 fee to help defray their costs of marketing. This of course is in addition to management and admnistration fees. But you're right - it is an NTF fee, as defined by Ameritrade. But the truth is that this deal is full of fleas.... I meant, "fees."
  • fwiw, I checked my IRA purchase again and it claims there are no fund imposed fees and the amount in the fund posted is the same as the purchase amount. Maybe it's because it's in the IRA.
  • that is why i was asking about 'decent share classes', something lile AEMSX. looks like fido IRA might permit - with the TF of course.
  • Apparently GEGAX (ER 1.39%) is available NL/NTF at Schwab, and last time I checked, AEMSX (1.28% ER) is available at Fidelity for a low minimum in retirement accounts with an initial $75TF. I have heard of one individual over at M* who was able to have Fidelity convert shares of AEMSX into the lower cost ABEMX (1.03% ER). As for buying GEGAX at TDA, it appears that a load will be imposed as I see no evidence that the load is being waved by TDA.

  • Reply to @kevindow: While Schwab does denote GEGAX as "NoLoad, NTF," their GEGAX Factsheet shows a front-end load of 5.75%:

    The Fido option looks appealing for this fund that has managed to show good performance to date. (Warning: Past results are not indicative of future results.)
  • An alternative may be to look at the Aberdeen CEF - symbol FEO. There are some differences -- FEO covers equities and bonds, expenses are higher (1.68 acc to M*),you have to deal with the discount/premium issues in CEFs and the manager is different. However FEO performance is quite similar to ABEMX with a little more downside protection.

  • Reply to @Jim0445:
    I've talked with Schwab about funds listed like this. Such funds do indeed have front end loads; these are loads that are waived for Schwab customers. Thus the former designation (NoLoad, NTF) describes the way the fund is sold through Schwab, while the latter designation (5.75% front end load) correctly describes the fund itself.

    (I do own a front end load fund purchased at Schwab without a load, so I an attest to this playing out in "real life.")
  • Reply to @msf: Thanks; I can also confirm that you are correct after "chatting" online with the Schwab "New Accounts" team a minute ago. I came here to issue a correction: GEGAX appears to be indeed available without a load at Schwab. (But I still contend that Schwab's information sheet on GEGAX is confusing.)
  • Reply to @Jim0445: 0.25% 12b-1 fee is not once a year. It is part of the total ER that is deducted daily. If you tally the daily deductions for 12b-1 and compound for yearly it would make that 0.25% that is stated.
  • it is with a bleeding heart that i put a TF order at Fido for AEMSX. i am basically paying 50 bps for this thingy to replace MGEMX that i held for many years. i hope the Aberdeen magic continues so that the decision pays off long term. if anyone has strong views to the contrary, feel free to opine now, so that i could be persuaded to cancel my orders in time before market close.
  • Reply to @fundalarm:

    Between those two funds, you are definitely making a wise decision. With a 1% annual turnover, I am confident that the Aberdeen folks can continue to successfully manage AEMSX/ABEMX. I would definitely ask Fidelity to file a formal request with Aberdeen to convert the shares of AEMSX to ABEMX. It's definitely worth a try.

    For our EM equity exposure, we use a combination of ABEMX and ABNIX. On the top of my LC/MC diversified EM equity fund watch list are THDIX and EEMV.

  • Reply to @kevindow: done. thanks Kevin for the encouragement. any opinion on ETF? it is under a proxy vote to change its investment mandate from mostly EM communication to a smaller cap frontierier offering...
  • edited February 2013
    I'm not sure that an EM sector fund (67% telecommunications) is an absolute necessity for any portfolio. I would rather have a broadly diversified EM equity fund and let the managers decide whether or not to invest in telecommunications. Now if they convert the CEF into a frontier markets fund and keep the same 1.43% expense ratio, then I would definitely be interested. Update: I just called Aberdeen and the fate of the PROPOSAL will be announced during the next board meeting on 3/28/13.

    As for infrastructure, I think that TOLSX is the most attractive diversified fund out there, and we own a 2% position in the fund which will be increasing to 5% once the shares transfer from Scottrade to Wellstrade. Scott has mentioned that he owns TOLLX in the past.

  • First time poster here. I want to thank STB65 for the info on GEGAX being load waived at TDAmeritrade. I can confirm that is indeed the case for IRA accounts, as I have also successfully perchased this fund without paying any load or transaction fee. The fund research page shows the regular load info, but when you go to the actual purchase screen in an IRA account (I don't know if it is true in a regular account), on the lower right corner, you will see "Sales charge: 0.00%", not the 5.75% on the fund research page. I have done a bit more investigation on TDAmeritrade, and it appears there are a few other funds that I am interested in also have load waived in IRA accounts (again not sure about regular accounts): PGBAX (Class A share of PGDIX), WVCCX (Class A share of ABNIX), PYSAX (Class A share of Putnam Equity Spectrum)
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