What are closed-end funds?
A closed-end fund is a type of fund that has a fixed number of shares. Unlike open-end mutual funds, closed-end funds do not issue and redeem shares on a continuous basis. They typically have specialized portfolios of stocks, bonds, convertibles, or a combination thereof, and may be oriented toward income, capital gains, or a combination of these objectives.
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How do I invest in the Asia Pacific Fund?
The Asia Pacific Fund is listed on the New York Stock Exchange under the ticker symbol “APB”. Shares of the Fund may be bought and sold through a registered financial advisor like any other listed security.
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Does the Fund, from time to time, change the percentage weightings of its holdings in the markets in which it invests? If so, how are these changes determined?
Adjustments to the percentage weightings of the Fund are determined by the portfolio manager based on the market conditions at a specific time. You may view the Fund’s recent asset allocation and percentage weightings in The Asia Pacific Fund monthly update on the “Documents” page of the website.
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Did the Fund pay a year-end dividend? If so, what was the record and pay dates, the amount, and was the dividend from capital gains or from net investment income?
The Fund paid a dividend of US$4.04 per share of ordinary income and a distribution of $4.11 per share of long-term capital gains on January 14, 2008. The declaration date was December 10, 2007; the ex-dividend date was December 26, 2007; and the record date was December 28, 2007.
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Are the distributions taxable for U.S. shareholders?
Dividends of net investment income and distributions of capital gains are taxable to a U.S. shareholder as ordinary income or either long-term or short-term capital gains, respectively, whether paid in cash or shares. After the end of each taxable year, the Fund will notify shareholders of the Federal income tax status of any distributions made by the Fund during the year.
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How can I find out the foreign tax breakdown for my income tax?
Please call Angela Khudaynatov at 973-367-2494
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How does a shareholder enroll or participate in the Dividend Reinvestment Plan? Are there benefits to participating in the plan?
There are two ways to enroll: (1) There is a card attached to the annual report that can be filled out and mailed in, or (2) call State Street Bank & Trust Co. at 1-800-451-6788.
The benefits are as follows:
Convenient - Fund shares are automatically purchased for you.
Economical - Invest at no brokerage cost or at reduced costs.
Smart - "Dollar Cost Averaging" allows you to purchase more shares when prices are low and less when they are high. It involves continuous investment in securities regardless of fluctuating price levels of such securities and does not assure a profit or protect against a loss. Over time, the average cost per share is usually lower than if the entire investment had been made all at once.
Efficient - There's no paperwork. You will regularly receive an account statement showing total dividends, date of investment and number of shares purchased.
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Where do I get information on the Fund’s market price and NAV?
The market price can be found on the “Fund Data ” page of this website, and on Bloomberg, Reuters or ay other market quotation service under the ticker symbol “APB”. The Fund’s closing price is published daily in financial publications or can be found in the financial section under “Listed NYSE Quotes”. The net asset value (NAV) is published weekly in Barron’s (Saturday), the New York Times (Sunday) or the Wall Street Journal (Monday). NAV’s can also be found on this website or can also be accessed on Bloomberg. You can also call 1-888-4-ASIA-PAC every weekday after 9:00 a.m. to hear the latest market price and NAV.
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How can I receive reports, fact sheets, releases, prospectuses, and economic data on the Fund?
Call 1-888-4-ASIA PAC to reach the investor relations department of the Fund. For specific investment and tax advice, please consult your financial and tax advisor.
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What are the Features and Benefits of Closed-End Funds?
Most investors today are familiar with open-end mutual funds and the benefits they can offer. However, many may be less familiar with closed-end funds. While similar in some respects to open-end funds, closed-end funds offer several unique features and benefits. Read on to learn more about closed-end funds and how they potentially can be an important part of an overall investment strategy.
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How do closed-end funds differ from open-end funds?
Open-end and closed-end funds invest largely in the same manner. The primary difference lies in how the shares are bought and sold. Unlike open-end funds, which have an unlimited number of shares available, closed-end funds have a fixed number of shares offered once in an initial public offering (IPO). Following the IPO of a closed-end fund, shares can be traded on a public exchange or over-the-counter, much like shares of stock.
Investors can buy or sell shares daily in an open-end fund at that day's net asset value (NAV), 1 which is determined by dividing the fund's total net assets by the number of outstanding shares. The share price of a closed-end fund often differs from the fund's NAV, and is influenced by the same general market forces that affect stock and bond prices.
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What influences the share price of a closed-end fund?
The share price of a closed-end fund is primarily determined by market demand and supply. Because the number of shares outstanding is fixed, once the fund closes, investors who want to buy or sell shares in the fund must do so from other investors in the open market through an exchange. Therefore, if there is greater demand for a particular fund's shares and a lower supply, the share price would likely be higher than its actual NAV ("trading at a premium"). And if market demand is low for a particular fund and supply is high, the shares would likely be trading at a price below the fund's NAV ("trading at a discount").
A variety of other market factors can also affect the market value of a closed-end fund. The fund's relative yield, investor preference for a particular type of investment, the liquidity of the fund's investments, or even investors' perceptions of a fund's manager can influence its market price.
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What are the advantages of closed-end funds?
Like open-end mutual funds, closed-end funds offer professional management, portfolio diversification and liquidity. In addition, closed-end funds can offer some other unique advantages.
Access to Greater Investment Opportunities-Because the number of closed-end fund shares remains largely fixed, closed-end fund managers do not need to keep a large amount of the portfolio's holdings "liquid" in order to meet shareholder redemption requests. This may often allow the managers to take advantage of certain investment opportunities they might not otherwise be able to with an open-end fund, and to invest for a longer time horizon. •
Lower Management Expenses-Because fund managers do not need to keep a large pool of assets on reserve to cover the expenses associated with issuing new shares and fund outflows, closed-end funds may have lower expense ratios than their open-end counterparts.
Leverage-Another potential benefit of closed-end funds is that many use leverage to seek to enhance returns. Leveraging involves borrowing money at short-term interest rates and then investing the money into longer-term securities, which typically pay higher rates. The difference between the income rate on the longer-term securities and the interest rate paid on the shorter-term borrowings may help increase the return to shareholders. However, leverage may also increase potential losses.
Opportunity to Purchase Shares at a Discount-Perhaps the most intriguing feature of closed-end funds is the opportunity to purchase shares at a discount to NAV. When a fund is trading at a discount, investors have the opportunity to purchase shares at a market price lower than the NAV, offering them the potential to increase their overall returns. It should be noted that while many closed-end funds do trade at a discount, that discount may not necessarily narrow over time and short-term trading of these shares can be extremely risky.
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What are the different types of closed-end funds?
There is a wide variety of closed-end funds available to investors today, with total market capitalization of over $120 billion.2 While the closed-end universe includes coverage in all asset classes, the majority of U.S.-listed closed-end funds are fixed-income funds, both taxable and tax free (often municipal funds). Most closed-end funds trade on the New York Stock Exchange. Some are listed on the American Stock Exchange and in the over-the-counter market. Most closed-end fund prices are published daily in the financial section of many newspapers.
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