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For professional investors and financial advisers only - not for use by retail investors Reasons why: Aberdeen Global II - US Dollar Credit Bond Fund February 2017 The Aberdeen Global II - US Dollar Credit Bond Fund seeks to generate attractive returns by investing in high-quality US dollar denominated, investment-grade bonds and other related securities. The Fund helps our investors diversify their portfolios and gain exposure to US companies with strong fundamentals. Executive Summary • Despite gradual interest-rate hikes by the US Federal Reserve (Fed) over the past two years, investors can earn attractive returns, maintain adequate liquidity, and diversify their portfolios by investing in US credit. However, this is not guaranteed. “We believe that in today’s markets, there are compelling opportunities in the US credit markets that can be found through in-depth research and a focus on security selection.” • Currently, the differing interest rate cycles between the US and other developed markets offer a great opportunity for relatively higher yields when investing in US credit. • The Aberdeen Global II - US Dollar Credit Bond Fund emphasises high-quality securities selected using Aberdeen’s internal research and fixed income expertise. Aberdeen offers the Fund on both a hedged and unhedged basis, allowing investors to control their particular exposure to currency risk. The marked difference in interest rate policy cycles existing in the United States and other developed markets currently results in favourably higher yields in the US markets, which when managed in a risk controlled framework – with strong emphasis on fundamental research and coverage – can provide additional sources of return. Charles Tan Head of North American Fixed Income USD - European Corporate Bond Yield Difference Barclays US Aggregate Corporate Index Yield to Worst vs. Barclays Euro-Aggregate Corporate Index Yield to Worst YTW (%) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Dec 09 Dec 10 Dec 11 Euro Corporates US Corporates Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Sources: Bloomberg, Barclays Capital. For illustrative purposes only. Past performance is not a guide to future results. Reasons why series – Page 1 of 4 1 Potential for higher yield The Fed raised interest rates for a second time since the global financial crisis at the end of 2016, and future rate hikes are expected to be gradual over time. Yet in Europe, Japan and elsewhere the prevailing policy emphasis remains quite different, with other central banks around the world holding a highly accommodative policy stance and even cutting their interest rates to stimulate growth. We anticipate further divergence in monetary policy between the US and other developed markets in the coming year, as the Trump administration’s policies are expected to be inflationary. Additionally, the Fed has taken a more hawkish stance, stating that it intends to raise interest rates three more times in 2017. Whilst there may well be a short term negative response in markets to the expected rise in interest rates, we would anticipate this to be somewhat short-lived. In any event, a temporary rise in medium and long term US bond yields would further enhance these higher yielding opportunities in US credit. 2 Bond investing in a low inflation / disinflationary world In the US, the Fed has begun to gradually hike interest rates, and Trump’s fiscal policies are expected to result in a cyclical uptick in inflation. Yet at the same time, the secular forces of global deflation remain entrenched as demographics deteriorate and the debt burden stays elevated. The combination of stronger economic growth and somewhat muted inflation in the US, coupled with meaningfully higher yields, make US credit particularly attractive in the current low-yield, low-inflation environment. The strengthening US dollar also increases the attractiveness of US dollar denominated investments to investors willing to take on currency risks. 3 Relatively low default risk The US economy continues to grow at a moderate pace, with the potential for stronger growth as the Trump administration pursues new fiscal policies. US companies have continued to manage their cost base and have largely recovered from the energy-related profit recession over the past few years. As a result, from a credit perspective US companies remain strong. Similar to European investment grade bonds, US investment grade bonds are typically thought of as a stable asset class that provides predictable returns for investors, with a typically low risk of defaulting on principal and interest payments 4 Diversification through a broad universe The US credit sector offers a vast number of bonds and issuers across a variety of sectors, resulting in a deep and liquid market. An allocation to US credit can help diversify investors’ existing European bond holdings and add the potential for higher yield while maintaining a conservative stance within the portfolio. The Fund enables investors to gain access to a selection of high quality bonds carefully selected by Aberdeen’s experienced fixed income team. Reasons why series – Page 2 of 4 Why Aberdeen For US Credit We have extensive knowledge of the full range of US fixed income markets: corporate, credit, municipal, and securitised. We are long-term fundamental investors: we only buy bonds we research and understand. Our credit review process We manage fixed-income credit portfolios using a bottom-up, relative value approach. We have a well-resourced team of fixed income investment professionals based in Philadelphia and New York, which are part of a larger global fixed income team comprising over 140 professionals in offices around the world. We have a global reach, but we rely on our local investment teams for their specialised expertise in and knowledge of their respective regions. As a result we believe that we can make better, more informed and potentially more profitable decisions for our clients. Our portfolio managers select only those securities that we believe offer the best value for their price based on our fundamental credit opinion and that also offer the best value compared to comparable securities. In making these credit and relative value decisions, we consider the liquidity of the bond market, the certainty of the cash flows and other potential risks to determine the attractiveness of a potential investment opportunity. We aim to hold only those securities that offer the best risk-adjusted returns. As active managers, we will sell bonds where the opportunity has been exploited and buy into those where the investment opportunity remains. Our process is centred on risk management with a strong buy/sell discipline based on intrinsic value. Key Fund Characteristics US Credit Ongoing Charges Figure (OCF) A Minimum investment Currency Benchmark 1.04% USD 1,500 or currency equivalent USD Barclays US Credit Index A The Ongoing Charge Figure (OCF), is the overall cost shown as a percentage of the value of the assets of the Funds. It is made up of the Annual Management Charge (AMC) of 0.80% and other charges. It does not include any initial charges or the cost of buying and selling stocks for the Funds. The Ongoing Charges figure can help you compare the annual operating expenses of different Funds. Accessing this opportunity There has been a noticeable increase in the level of interest in US credit bond investments from investors based in Europe and Japan (and elsewhere outside the US). This is understandable, given the reasons highlighted above. Investors have several options to choose from when investing in this asset class. Investors can choose to invest with full exposure to the US dollar, the currency of denomination, or to hedge the currency risk back to their base currency. Both routes are valid but will depend on the investors’ appetite to take outright US dollar foreign currency risk in addition to the bond risk, or to hedge this currency risk. Investors can also choose to invest in a segregated account rather than a fund option (for investment amounts above $50 million) if they prefer. Conclusion In our view, it’s an opportune time to invest in US credit and reap the benefits of diversification and potentially higher yields from steadily growing US companies. Investors should take advantage of this opportunity while the time is right. The Aberdeen Global II - US Dollar Credit Bond Fund can help you gain access to these high-quality investments and benefit from Aberdeen’s actively-managed, research-centred approach. Reasons why series – Page 3 of 4 The value of investments and the income from them can go down as well as up and your clients may get back less than the amount invested Important information For professional investors and financial advisers only – not for use by retail investors Please consider the risks • Investing globally can bring additional returns and diversify risk. However, currency exchange rate fluctuations may have a positive or negative impact on the value of your investment, particularly given the exposure to one currency in this fund. • Bonds are affected by changes in interest rates, inflation and any decline in creditworthiness of the bond issuer. Bonds that produce a higher level of income usually also carry greater risk as such bond issuers may not be able to pay the bond income as promised or could fail to repay the capital amount used to purchase the bond. Where a bond market has a low number of buyers and/or a high number of sellers, it may be harder to sell particular bonds at an anticipated price and/or in a timely manner. • This Fund can use derivatives in order to meet its investment objectives. This may result in gains or losses that are greater than the original amount invested. • Contingent convertible bonds can automatically convert into shares or be written down if the financial strength of the issuer falls in a certain way. This may result in substantial or total losses of the bond value. • The Fund has a significant exposure to one currency, increasing its potential price volatility. Contact details Should you require any further information, please visit aberdeen-asset.co.uk for details of your local Aberdeen representative. Other Important information The Fund is a Luxembourg-domiciled UCITS fund, incorporated as a Société Anonyme and organised as a Société d’investissement à Capital Variable (a “SICAV”). The information contained in this marketing document should not be considered as an offer, investment recommendation, or solicitation, to deal in the shares of any securities or financial instruments. It is not intended for distribution or use by any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication or use would be prohibited. The Fund is not registered under the United States Securities Act of 1933, nor the United States Investment Company Act of 1940 and therefore may not directly or indirectly be offered or sold in the United States of America or any of its states, territories, possessions or other areas subject to its jurisdiction or to or for the benefit of a United States Person. No information, opinions or data in this document constitute investment, legal, tax or other advice and are not to be relied upon in making an investment or other decision. Subscriptions for shares in the Fund may only be made on the basis of the latest Prospectus and relevant Key Investor Information Document (KIID). These can be obtained free of charge from Aberdeen Asset Managers Limited, 10 Queens Terrace, Aberdeen, AB10 1YG, Scotland and are also available on aberdeen-asset.com. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. You should obtain specific professional advice before making any investment decision. Issued by Aberdeen Asset Managers Limited. Registered in Scotland No.108419. Registered Office: 10 Queen’s Terrace, Aberdeen, AB10 1YG. Authorised and regulated by the Financial Conduct Authority in the United Kingdom. Aberdeen Asset Managers Limited reserves the right to make changes and corrections to any information in this document at any time, without notice. Reasons why series – Page 4 of 4 DH: GB-020517-31146-2 121026892 05/17