UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-21636

First Trust/Aberdeen Global Opportunity Income Fund
(Exact name of registrant as specified in charter)

120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Address of principal executive offices) (Zip code)

 

W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)

 

registrant’s telephone number, including area code: (630) 765-8000

Date of fiscal year end: December 31

Date of reporting period: December 31, 2018

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 
 

Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

 

 

First Trust/Aberdeen
Global Opportunity Income Fund (FAM)
Annual Report
For the Year Ended
December 31, 2018

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2018

1

2

4

8

16

17

18

19

20

21

29

30

35

37
Caution Regarding Forward-Looking Statements
This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. (“First Trust” or the “Advisor”) and/or Aberdeen Standard Investments Inc. (“ASII” or the “Sub-Advisor”) and their respective representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as “anticipate,” “estimate,” “intend,” “expect,” “believe,” “plan,” “may,” “should,” “would” or other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. When evaluating the information included in this report, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of the Advisor and/or Sub-Advisor and their respective representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.
Performance and Risk Disclosure
There is no assurance that the Fund will achieve its investment objectives. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund. See “Risk Considerations” in the Additional Information section of this report for a discussion of certain other risks of investing in the Fund.
Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and common share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund performance on the Fund’s web page at www.ftportfolios.com.
How to Read This Report
This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund’s performance and investment approach.
By reading the portfolio commentary by the portfolio management team of the Fund, you may obtain an understanding of how the market environment affected the Fund’s performance. The statistical information that follows may help you understand the Fund’s performance compared to that of relevant market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of First Trust and ASII are just that: informed opinions. They should not be considered to be promises or advice. The opinions, like the statistics, cover the period through the date on the cover of this report. The material risks of investing in the Fund are spelled out in the prospectus, the statement of additional information, this report and other Fund regulatory filings.

Table of Contents
Shareholder Letter
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Letter from the Chairman and CEO
December 31, 2018
Dear Shareholders,
First Trust is pleased to provide you with the annual report for the First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”), which contains detailed information about the Fund for the twelve months ended December 31, 2018, including a market overview and performance analysis. We encourage you to read this report carefully and discuss it with your financial advisor.
As I wrote in my June 2018 letter, investors were hoping for another strong year in the markets for 2018. For the entire year, however, increased market volatility was the norm for U.S. and global markets. Despite the volatility, August was a strong month for stocks, and the Dow Jones Industrial Average (“DJIA”) finished the month just under its previous high in January 2018. At the close of the third quarter in September, the markets had moved higher into positive territory. In fact, all three major U.S. indices (the Nasdaq Composite Index, the DJIA and the S&P 500® Index) hit record levels during the third quarter. Yet, in October, markets were again very volatile, surprising analysts and investors alike. Both global markets and U.S. markets fell on fears of slowing growth, trade wars and higher interest rates. The DJIA was down 5% for October and the MSCI EAFE Index, an index of stocks in 21 developed markets (excluding the U.S. and Canada), was down 9% for the month. However, investors cheered as November ended, and the DJIA climbed 617 points (2.5%) to its biggest one-day gain in eight months. The MSCI EAFE Index ended November down slightly. December held its own shocks as it became the worst December for stocks since the Great Depression. The DJIA and the MSCI EAFE Index ended December with year-to-date returns of -3.48% and-13.79%, respectively.
Based on continued strong job growth and the economic outlook in the U.S., the Federal Reserve (the “Fed”) raised interest rates in March, June and September. At their September meeting, the Fed indicated the possibility of one additional rate hike in 2018 and three more in 2019. At their November meeting, the Fed did not raise interest rates. However, at their December 19th meeting, the Fed did raise interest rates by 25 basis points. Analysts and investors will be watching to see what the Fed does with rates in 2019.
While trade tensions have had an impact on markets around the world and could continue to do so in the future, our economists believe that the long-term impact of U.S. tariffs will be to encourage countries to come back to the table and talk about more equal trade. Despite market volatility, we continue to believe that the combination of low interest rates, low inflation and strong corporate earnings still point to a positive economic environment and further growth, though we understand that past performance can never guarantee future performance.
We continue to believe that you should invest for the long term and be prepared for market movements, which can happen at any time. You can do this by keeping current on your portfolio and by speaking regularly with your investment professional. Markets go up and they also go down, but savvy investors are prepared for either through careful attention to investment goals.
Thank you for giving First Trust the opportunity to be a part of your financial plan. We value our relationship with you and will report on the Fund again in six months.
Sincerely,
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
Page 1

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
“AT A GLANCE”
As of December 31, 2018 (Unaudited)
Fund Statistics  
Symbol on New York Stock Exchange FAM
Common Share Price $9.38
Common Share Net Asset Value (“NAV”) $11.07
Premium (Discount) to NAV (15.27)%
Net Assets Applicable to Common Shares $141,375,852
Current Monthly Distribution per Common Share(1) $0.0700
Current Annualized Distribution per Common Share $0.8400
Current Distribution Rate on Common Share Price(2) 8.96%
Current Distribution Rate on NAV(2) 7.59%
Common Share Price & NAV (weekly closing price)
  
 
Performance        
  Average Annual Total Return
  1 Year Ended
12/31/18
5 Years Ended
12/31/18
10 Years Ended
12/31/18
Inception (11/23/04)
to 12/31/18
Fund Performance(3)        
NAV -6.85% 2.48% 8.40% 5.77%
Market Value -12.42% 0.86% 8.75% 4.19%
Index Performance        
Blended Index(4) -3.89% 1.39% 4.19% 4.59%
Bloomberg Barclays Global Emerging Markets Index -3.02% 3.59% 8.11% 6.58%
Bloomberg Barclays Global Aggregate Index -1.20% 1.08% 2.48% 3.04%
    
(1) Most recent distribution paid or declared through 12/31/2018. Subject to change in the future.
(2) Distribution rates are calculated by annualizing the most recent distribution paid or declared through the report date and then dividing by Common Share Price or NAV, as applicable, as of 12/31/2018. Subject to change in the future.
(3) Total return is based on the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.
(4) Blended Index consists of the following: FTSE World Government Bond Index (40.0%); JPMorgan Emerging Markets Bond Index - Global Diversified (30.0%); JPMorgan Global Bond Index - Emerging Markets Diversified (30.0%).
Page 2

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
“AT A GLANCE” (Continued)
As of December 31, 2018 (Unaudited)
Credit Quality(5) % of Total
Fixed-Income
Investments
AAA 17.7%
AA 2.4
AA- 0.6
A+ 7.4
A 5.9
A- 10.3
BBB 9.8
BBB- 7.3
BB+ 6.5
BB 6.0
BB- 6.0
B+ 4.7
B 7.3
B- 4.4
Not Rated 3.7
Total 100.0%
    
Top 10 Countries(6) % of Total
Investments
United States 10.0%
Japan 7.4
Brazil 7.4
South Africa 6.1
Poland 5.9
Turkey 5.7
Russia 5.6
Mexico 5.0
Italy 3.4
Australia 3.3
Total 59.8%
    
Industry Classification % of Total
Investments
Sovereigns 78.6%
Government Regional 3.3
Utilities 2.3
Metals & Mining 2.0
Banks 2.0
Exploration & Production 1.8
Integrated Oils 1.3
Wireless Telecommunication Services 1.1
Real Estate 0.8
Communications Equipment 0.8
Government Development Banks 0.7
Central Bank 0.7
Oil & Gas Services & Equipment 0.6
Supranationals 0.5
Pipelines 0.5
Retail - Consumer Discretionary 0.4
Life Insurance 0.4
Food & Beverage 0.4
Airlines 0.4
Software & Services 0.4
Wireline Telecommunication Services 0.4
Commercial Finance 0.3
Power Generation 0.3
Industrial Other 0.0*
Total 100.0%
    
* Amount is less than 0.1%.
        
Top Ten Holdings % of Total
Investments
Japan Government Ten Year Bond, 0.10%, 6/20/27 5.8%
Russian Federal Bond - OFZ, 7.05%, 1/19/28 3.4
Turkey Government Bond, 8.80%, 9/27/23 3.4
Republic of South Africa Government Bond, 10.50%, 12/21/26 3.4
United States Treasury Note, 8.75%, 8/15/20 3.3
Treasury Corp. of Victoria, 6.00%, 10/17/22 3.3
Canadian Government Bond, 8.00%, 6/01/23 3.0
United States Treasury Note, 2.63%, 5/15/21 2.9
Brazil Notas do Tesouro Nacional, Series F, 10.00%, 1/01/21 2.9
Peruvian Government International Bond, 6.90%, 8/12/37 2.6
Total 34.0%
 
(5) The credit quality and ratings information presented above reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor’s Ratings Group, a division of the McGraw Hill Companies, Inc., Moody’s Investors Service, Inc., Fitch Ratings or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and the ratings are not equivalent, the highest ratings are used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
(6) Portfolio securities are included in a country based upon their underlying credit exposure as determined by Aberdeen Standard Investments Inc., the sub-advisor.
Page 3

Table of Contents
Portfolio Commentary
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2018 (Unaudited)
Advisor
First Trust Advisors L.P. (“First Trust” or the “Advisor”) serves as the investment advisor to the First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”). First Trust is responsible for the ongoing monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund.
Sub-Advisor
Aberdeen Standard Investments Inc. (“ASII” or the “Sub-Advisor”) (formerly, Aberdeen Asset Management Inc.), a Securities and Exchange Commission registered investment advisor, is an indirect wholly-owned subsidiary of Standard Life Aberdeen plc. Standard Life Aberdeen plc is a publicly-traded global provider of long-term savings and investments listed on the London Stock Exchange, managing assets for institutional and retail clients from offices around the world.
Portfolio Management Team
Investment decisions for the Fund are made by ASII using a team approach and not by any one individual. By making team decisions, ASII seeks to ensure that the investment process results in consistent returns across all portfolios with similar objectives. ASII does not employ separate research analysts. Instead, ASII’s investment managers combine analysis with portfolio management. Each member of the team has sector and portfolio responsibilities such as day-to-day monitoring of liquidity. The overall result of this matrix approach is a high degree of cross-coverage, leading to a deeper understanding of the securities in which ASII invests. Below are the members of the team with significant responsibility for the day-to-day management of the Fund’s portfolio.
James Athey
Senior Investment Manager, Global Macro
Brett Diment
Head of Global Emerging Market Debt
Kevin Daly
Senior Investment Manager, Emerging Market Debt
Edwin Gutierrez
Head of Emerging Market Sovereign Debt
Max Wolman
Senior Investment Manager, Emerging Market Debt
Patrick O’Donnell
Senior Investment Manager, Global Macro and Pan Euro
Commentary
First Trust/Aberdeen Global Opportunity Income Fund
The Fund’s primary investment objective is to seek a high level of current income. As a secondary objective, the Fund seeks capital appreciation. The Fund pursues these objectives by investing its Managed Assets in the world bond markets through a diversified portfolio of investment grade and below-investment grade government and corporate debt securities. “Managed Assets” means the total asset value of the Fund minus the sum of the Fund’s liabilities other than the principal amount of borrowings, if any. There can be no assurance that Fund will achieve its investment objectives. The Fund may not be appropriate for all investors.
Page 4

Table of Contents
Portfolio Commentary (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2018 (Unaudited)
Fund Recap
The Fund had a net asset value (“NAV”) total return1 of -6.85% and a market value total return of -12.42% for the 12-months ended December 31, 2018, compared to the Blended Index2 total return of -3.89% over the same period. In addition to this Blended Index, the Fund currently uses other indexes for comparative purposes. The total returns for the 12-month period ended December 31, 2018 for these indexes were as follows: the Bloomberg Barclays Global Emerging Markets Index was -3.02% and the Bloomberg Barclays Global Aggregate Index was -1.20%.
An important factor impacting the return of the Fund relative to its benchmarks was the Fund’s use of financial leverage through the use of bank borrowings. The Fund uses leverage because its portfolio managers believe that, over time, leverage provides opportunities for additional income and total return for common shareholders. However, the use of leverage can also expose common shareholders to additional volatility. For example, as the prices of securities held by the Fund decline, the negative impact of the evaluation changes on Common Share NAV and Common Share market value total return is magnified by the use of leverage. Conversely, leverage may enhance Common Share returns during periods when the prices of securities held by the Fund generally are rising. Unlike the Fund, the Bloomberg Barclays Global Emerging Markets Index, Bloomberg Barclays Global Aggregate Index and the components of the Blended Index are not leveraged. Leverage had a negative impact on the performance of the Fund over this reporting period.
Emerging Market Fixed Income Commentary
Market Recap
The year 2018 proved to be a very challenging year for global markets with both equity and bond markets showing negative returns for the year. There were a number of factors over the year leading to the weak returns, such as the beginning of quantitative tightening by the Federal Reserve (the “Fed”) with the 100 basis points (“bps”) of Fed Fund hikes from 1.5% to 2.5% and the unwinding of the Fed’s balance sheet. The ongoing trade wars between China and the U.S., continued geopolitical tensions in the Middle East, slowing Chinese growth and the sell-off in commodities at the end of the year were also drivers of market weakness.
Emerging market currencies were a big driver of the negative returns for the Emerging Markets (“EM”), in particular, the Argentinian Peso and Turkish Lira depreciated by 50% and 28% respectively over the 12-month period ended December 31, 2018. There were serious concerns by investors over Argentina’s slow fiscal adjustments and widening current account whilst in Turkey, President Erdogan’s vice-like control over the executive and legislative branches and his attempt to control the Central Bank of Turkey were all negatives for the market. Elections in Brazil and Mexico also added to increased volatility in 2018 as investors were unsure who would win the Brazilian election; either the market unfriendly Workers’ Party (PT) under Fernando Haddad or the little-known candidate, Jair Bolsonaro, from the Social Liberal Party. Bolsonaro succeeded in a second-round run-off and the Brazilian market has reacted very positively since the election result in October 2018. Andres Lopez Obrador was the winner of the Mexican Presidential election, a result widely expected by the market, but nevertheless, the worst possible outcome for the Mexican market, in our view, given his socialist agenda and plans for the state-owned oil company Pemex. Ongoing sanctions by the U.S. state department against Russia and lower oil prices were negative drivers for Russian assets over the period with both the Russian Ruble and Russian bonds showing negative returns for the year.
Performance Analysis
The EM debt portion of the Fund underperformed the EM debt portion of its Blended Index over the 12-month period ended December 31, 2018, in both hard currency and local currency bonds. Part of the underperformance was due to the Fund’s overweight to EM debt and subsequent underweight to global bonds, as the EM debt indices underperformed the FTSE World Government Bond Index (“WGBI”). The Fund’s overweight to Russian and Indonesian local bonds and the Mexican Peso were detractors to performance, while local Egyptian T-bills, Nigerian bank bonds and good market timing with the addition of Turkey local bonds were positive contributors to performance.
Market and Fund Outlook
The backdrop for EM started to turn more positive at the end of 2018. The Fed switched to a more cautious tone on monetary policy tightening and China is slowly implementing its stimulus agenda. Going into 2019, the lack of certainty on Fed rate hikes should weigh on the U.S. dollar, in our view, and we believe this bodes well for EM currencies. Moreover, large economic adjustments in major EM, such as Argentina and Turkey, we believe suggest that these markets will start from a better fundamental position compared
1 Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.
2 Blended Index consists of the following: FTSE World Government Bond Index (40.0%); JPMorgan Emerging Markets Bond Index – Global Diversified (30.0%); JPMorgan Global Bond Index – Emerging Markets Diversified (30.0%).
Page 5

Table of Contents
Portfolio Commentary (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2018 (Unaudited)
to last year. Alongside attractive valuations versus other risk assets, these factors point to a possible turn in the sentiment towards EM, in our opinion. Key risks remain around the U.S.-China trade dispute, with little evidence indicating a compromise is near, in our opinion. Meanwhile, political risks in EM, in our view, stem from upcoming elections in Argentina, Indonesia, India and South Africa.
Developed Market Commentary
Market Recap
A small number of themes dominated financial markets throughout almost all of 2018. An escalation of trade concerns – specifically, trade wars between the United States and China – unnerved market participants as to prospects for global growth. Worries about Eurozone viability in the shape of Italian political turmoil were a powerful influence. Elsewhere, negotiations over the United Kingdom’s (“UK”) withdrawal from the European Union (“EU”) rumbled on, with no signs of a clear and satisfactory conclusion.
In the U.S., the Trump administration signaled a move towards protectionist policies as early as the first quarter of 2018, with the announcement in March of tariffs on steel and aluminum imports. The initial market reaction was a risk-off tone and a rally in bonds. Near the end of March, President Trump proposed tariffs on some Chinese imports, prompting headlines suggesting China was preparing counter measures. The tit-for-tat nature of the U.S.-China trade spat continued for much of the year, while Trump moved to negotiate a new North American Free Trade Agreement deal with Canada and Mexico. Domestic economic signals confirmed strong growth momentum, with unemployment and manufacturing numbers all pointing to robust, sustainable growth. In response, the Fed raised interest rates several times during 2018. The U.S. 10-year Treasury yields closed the period 27 bps higher at 2.68%.
European bond markets were preoccupied with Italian politics. A general election resulted in a coalition between two Euro-skeptical populist parties who seemed intent on a clash with Brussels over budget proposals; if election pledges were to be met, these would breach EU deficit guidelines. This uncertainty affected Italian banks badly given their fragile health. European banks generally had a difficult time given turmoil in Turkey during the summer when its currency weakened significantly. Economic signs within Europe became less encouraging as the period progressed, with data pointing to slower activity and a fall in business confidence. For example, purchasing managers’ survey data softened, Germany posted negative gross domestic product growth and Italian growth stalled. Despite signs of weakening economic performance, the European Central Bank confirmed its plan to end its bond-buying program. The 10-year German bund yield was 14 bps lower at 0.24%, over 2018 as a whole.
In the UK, the seemingly intractable Brexit negotiations grew ever more complicated. Progress was slow to non-existent. Prime Minister Theresa May’s Chequers Plan was rejected by her ruling Conservative party. Then, towards the end of the year, her withdrawal agreement failed to secure Parliamentary assent by an overwhelming majority. The International Monetary Fund released a report stating that “Brexit” is “weighing on the [UK] economy, even as growth is accelerating in the rest of the world”. Gilts proved resilient, notwithstanding a 0.25% interest rate rise from the Bank of England in August. That 0.25% rise was just the second hike in over 10 years. The yield on the 10-year UK gilt was 5 bps higher at 1.27% over the year.
During the first quarter of 2018, Haruhiko Kuroda was nominated by Prime Minister Shinzo Abe for another five-year term as governor of the Bank of Japan (“BoJ”); the implication was for continued commitment to ending the low inflation that has dogged the country for the past two decades. In the latter part of the year, while the BoJ kept its interest rate targets unchanged (around 0% for the 10-year), it said it would tolerate wider fluctuations around the 10-year yield target depending on inflation and economic condition. Governor Kuroda explained that this was providing support to the Japanese Government Bond market functioning. Forward guidance was also introduced with short- and long-term rates to be maintained at extremely low levels for an extended period of time.
Performance Analysis
The Fund’s developed market bond portfolio underperformed relative to the WGBI during 2018. Currency exposures after hedges were the biggest detractor from performance. An underweight to the Japanese yen also detracted as the currency strengthened on the back of risk off sentiment as a result of financial market volatility. An overweight exposure to the Australian dollar also negatively contributed. These losses were partially offset by an underweight to euros.
Currency hedging in total over the year positively contributed to performance as non-USD exposure was hedged back into a strengthening dollar.
Rates exposures also detracted from returns. Allocation to U.S. dollar-denominated Italy and Portugal debt were a drag as tensions between the populist Italian government and the EU over 2019 budget plans pushed peripheral spreads aggressively wider in the first half of the period. These losses were partially offset by long duration positions in Australia and Canada.
Page 6

Table of Contents
Portfolio Commentary (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Annual Report
December 31, 2018 (Unaudited)
Market and Fund Outlook
While the U.S. remains an economy with a relatively strong structural growth rate, we believe that the shine will come off at the margin as growth moderates in 2019. In our view, higher interest rates, higher costs for businesses and an amount of fading fiscal stimulus all point to growth falling back towards trend, although the U.S. economy will remain the strongest of the majors. Nevertheless, we believe the Fed is taking a more pragmatic approach to normalization in light of recent volatility in financial markets, adopting a wait-and-see approach as the economy adjusts to tighter financial conditions.
With the Italian budget issue resolved for now and a new round of TLTRO (targeted longer-term refinancing operations) in the pipeline for 2019, we foresee a period of relative stability in Europe. We believe the EU parliament elections may highlight the political divides in Europe, exacerbated by the period of low growth currently being experienced. This same weakness in growth will also weigh on fiscals through the year, bringing renewed concerns over deficit limits and debt sustainability of the most indebted countries, in our view.
While the Fed has stopped the supertanker of rates normalization in its tracks, we remain cautious due to Fed Chairman Jerome Powell forgetting to pull the handbrake or pausing the 50 billion USD monthly unwind of the balance sheet. While there is little more the Fed can do on rates, short of cutting (which we believe it will not do until a recession seems probable), we believe the continued quantitative tightening will remain a key influence on markets, particularly while margin compression is expected.
Having just corrected significantly, we believe this volatility affords us tactical opportunities to hold risk in an environment where our strategic view is more cautious. The medium-term view is cautiously positive on credit, EM, EU periphery and rates risk. The U.S. dollar, meanwhile, is expected to weaken moderately, in our view.
Page 7

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments
December 31, 2018
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN SOVEREIGN BONDS AND NOTES (a) – 100.2%
    Angola – 0.9%            
1,300,000  
Angolan Government International Bond (USD) (b)

  9.38%   05/08/48   $1,220,609
    Argentina – 2.8%            
89,880,000  
Argentina POM Politica Monetaria, ARLLMONP (ARS) (c)

  65.51%   06/21/20   2,553,993
940,000  
Argentine Republic Government International Bond (USD)

  5.63%   01/26/22   796,650
715,039  
Argentine Republic Government International Bond (USD)

  8.28%   12/31/33   554,156
        3,904,799
    Australia – 4.5%            
7,945,000  
Treasury Corp. of Victoria (AUD)

  6.00%   10/17/22   6,378,905
    Bahrain – 0.6%            
800,000  
Bahrain Government International Bond (USD)

  7.00%   01/26/26   821,588
    Brazil – 6.6%            
20,700,000  
Brazil Notas do Tesouro Nacional, Series F (BRL)

  10.00%   01/01/21   5,592,767
13,800,000  
Brazil Notas do Tesouro Nacional, Series F (BRL)

  10.00%   01/01/29   3,746,196
        9,338,963
    Canada – 4.2%            
6,449,000  
Canadian Government Bond (CAD)

  8.00%   06/01/23   5,934,053
    Costa Rica – 0.9%            
720,000  
Costa Rica Government International Bond (USD)

  4.25%   01/26/23   636,300
219,000  
Costa Rica Government International Bond (USD)

  7.00%   04/04/44   186,971
511,000  
Costa Rica Government International Bond (USD)

  7.16%   03/12/45   442,654
        1,265,925
    Czech Republic – 0.8%            
20,910,000  
Czech Republic Government Bond (CZK)

  5.70%   05/25/24   1,133,145
    Ecuador – 1.4%            
2,180,000  
Ecuador Government International Bond (USD) (b)

  8.75%   06/02/23   2,043,750
    Egypt – 0.9%            
380,000  
Egypt Government International Bond (USD) (b)

  8.50%   01/31/47   344,295
1,050,000  
Egypt Government International Bond (USD) (b)

  7.90%   02/21/48   907,360
        1,251,655
    El Salvador – 0.4%            
580,000  
El Salvador Government International Bond (USD)

  7.65%   06/15/35   551,290
    France – 0.6%            
561,000  
French Republic Government Bond OAT (EUR)

  3.25%   05/25/45   884,257
    Germany – 0.6%            
508,000  
Bundesrepublik Deutschland Bundesanleihe (EUR)

  2.50%   08/15/46   820,138
    Ghana – 2.8%            
1,340,000  
Ghana Government International Bond (USD)

  8.13%   01/18/26   1,283,814
1,450,000  
Ghana Government International Bond (USD) (b)

  7.63%   05/16/29   1,303,840
6,200,000  
Republic of Ghana Government Bond (GHS)

  21.50%   03/09/20   1,301,185
        3,888,839
    Indonesia – 2.5%            
20,750,000,000  
Indonesia Treasury Bond (IDR)

  5.63%   05/15/23   1,325,734
Page 8
See Notes to Financial Statements

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2018
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN SOVEREIGN BONDS AND NOTES (a) (Continued)
    Indonesia (Continued)            
30,400,000,000  
Indonesia Treasury Bond (IDR)

  8.38%   03/15/34   $2,139,374
        3,465,108
    Iraq – 1.4%            
428,000  
Iraq International Bond (USD) (b)

  6.75%   03/09/23   408,696
1,760,000  
Iraq International Bond (USD)

  5.80%   01/15/28   1,582,944
        1,991,640
    Italy – 4.7%            
2,762,000  
Italy Buoni Poliennali Del Tesoro (EUR)

  9.00%   11/01/23   4,223,756
1,600,000  
Italy Buoni Poliennali Del Tesoro (EUR)

  7.25%   11/01/26   2,463,944
        6,687,700
    Japan – 10.2%            
1,219,050,000  
Japan Government Ten Year Bond (JPY)

  0.10%   06/20/27   11,300,367
252,850,000  
Japan Government Thirty Year Bond (JPY)

  2.40%   03/20/37   3,096,279
        14,396,646
    Kenya – 0.4%            
590,000  
Kenya Government International Bond (USD)

  6.88%   06/24/24   556,060
    Malaysia – 2.2%            
13,000,000  
Malaysia Government Bond (MYR)

  3.89%   03/15/27   3,079,888
    Mexico – 5.6%            
26,500,000  
Mexican Bonos (MXN)

  6.50%   06/09/22   1,266,870
20,000,000  
Mexican Bonos (MXN)

  10.00%   12/05/24   1,081,950
27,000,000  
Mexican Bonos (MXN)

  5.75%   03/05/26   1,161,941
97,602,800  
Mexican Bonos (MXN)

  7.75%   11/13/42   4,390,394
        7,901,155
    Nigeria – 2.6%            
1,130,000,000  
Nigeria Government Bond (NGN)

  12.50%   01/22/26   2,703,296
663,000  
Nigeria Government International Bond (USD) (b)

  7.88%   02/16/32   603,801
513,000  
Nigeria Government International Bond (USD) (b)

  7.63%   11/28/47   433,430
        3,740,527
    Norway – 0.6%            
7,511,000  
Norway Government Bond (NOK) (b)

  1.75%   02/17/27   872,765
    Oman – 0.5%            
770,000  
Oman Government International Bond (USD) (b)

  6.75%   01/17/48   637,471
    Peru – 3.6%            
16,000,000  
Peruvian Government International Bond (PEN)

  6.90%   08/12/37   5,096,939
    Poland – 8.1%            
14,444,000  
Republic of Poland Government Bond (PLN)

  2.50%   01/25/23   3,933,326
17,100,000  
Republic of Poland Government Bond (PLN)

  4.00%   10/25/23   4,957,028
10,000,000  
Republic of Poland Government Bond (PLN)

  2.50%   07/25/27   2,628,306
        11,518,660
    Portugal – 1.1%            
1,088,000  
Portugal Obrigacoes do Tesouro OT (EUR) (b)

  5.65%   02/15/24   1,562,032
    Russia – 5.9%            
510,000,000  
Russian Federal Bond - OFZ (RUB)

  7.05%   01/19/28   6,660,560
See Notes to Financial Statements
Page 9

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2018
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN SOVEREIGN BONDS AND NOTES (a) (Continued)
    Russia (Continued)            
90,000,000  
Russian Federal Bond - OFZ (RUB)

  7.70%   03/23/33   $1,204,043
400,000  
Russian Foreign Bond - Eurobond (USD)

  5.88%   09/16/43   422,398
        8,287,001
    Rwanda – 1.0%            
1,440,000  
Rwanda International Government Bond (USD)

  6.63%   05/02/23   1,432,022
    South Africa – 6.1%            
86,460,000  
Republic of South Africa Government Bond (ZAR)

  10.50%   12/21/26   6,543,167
2,200,000  
Republic of South Africa Government International Bond (USD)

  4.88%   04/14/26   2,096,582
        8,639,749
    Spain – 2.4%            
2,111,000  
Spain Government Bond (EUR) (b)

  5.90%   07/30/26   3,274,160
100,000  
Spain Government Bond (EUR) (b)

  5.15%   10/31/44   173,226
        3,447,386
    Sri Lanka – 1.0%            
1,500,000  
Sri Lanka Government International Bond (USD) (b)

  6.75%   04/18/28   1,369,808
    Supranationals – 0.7%            
8,550,000  
European Investment Bank (SEK)

  1.25%   05/12/25   993,746
    Suriname – 0.5%            
675,000  
Suriname Government International Bond (USD) (b)

  9.25%   10/26/26   653,063
    Tanzania – 0.2%            
290,006  
Tanzania Government International Bond, 6 Mo. LIBOR + 6.00% (USD) (c)

  8.54%   03/09/20   296,308
    Tunisia – 1.0%            
1,600,000  
Banque Centrale de Tunisie International Bond (USD)

  5.75%   01/30/25   1,350,888
    Turkey – 6.2%            
47,500,000  
Turkey Government Bond (TRY)

  8.80%   09/27/23   6,605,574
15,100,000  
Turkey Government Bond (TRY)

  10.40%   03/20/24   2,222,560
        8,828,134
    Ukraine – 1.1%            
1,370,000  
Ukraine Government International Bond (USD) (b)

  7.75%   09/01/24   1,209,673
716,000  
Ukraine Government International Bond (USD) (b)

  (d)   05/31/40   415,230
        1,624,903
    United Kingdom – 2.6%            
754,000  
United Kingdom Gilt (GBP)

  4.25%   12/07/27   1,212,011
1,250,000  
United Kingdom Gilt (GBP)

  4.25%   12/07/49   2,508,009
        3,720,020
   
Total Foreign Sovereign Bonds and Notes

  141,587,535
    (Cost $150,917,573)            
FOREIGN CORPORATE BONDS AND NOTES (a) (e) – 23.9%
    Argentina – 0.3%            
525,000  
Genneia S.A. (USD) (b)

  8.75%   01/20/22   477,094
    Bahrain – 0.5%            
650,000  
Oil and Gas Holding Co. BSCC (The) (USD) (b)

  8.38%   11/07/28   664,570
Page 10
See Notes to Financial Statements

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2018
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN CORPORATE BONDS AND NOTES (a) (e) (Continued)
    Barbados – 0.6%            
750,000  
Sagicor Finance 2015 Ltd. (USD) (b)

  8.88%   08/11/22   $785,625
    Brazil – 3.5%            
766,000  
Azul Investments LLP (USD) (b)

  5.88%   10/26/24   718,133
780,000  
CSN Resources S.A. (USD) (b)

  7.63%   02/13/23   729,300
850,000  
GTL Trade Finance, Inc. (USD)

  7.25%   04/16/44   888,250
1,550,000  
OAS Finance Ltd. (USD) (f) (g) (h) (i)

  8.88%   (j)   23,250
460,000  
OAS Investments GmbH (USD) (f) (g) (h)

  8.25%   10/19/19   6,900
620,000  
Odebrecht Drilling Norbe VIII/IX Ltd. (USD)

  6.35%   12/01/21   598,610
1,830,000  
Petrobras Global Finance BV (USD)

  8.75%   05/23/26   2,053,260
        5,017,703
    China – 1.0%            
765,000  
Shimao Property Holdings Ltd. (USD)

  8.38%   02/10/22   796,317
308,000  
Yingde Gases Investment Ltd. (USD) (b)

  6.25%   01/19/23   290,293
280,000  
Yingde Gases Investment Ltd. (USD)

  6.25%   01/19/23   263,903
        1,350,513
    Colombia – 0.3%            
429,000  
Banco GNB Sudameris S.A. (USD) (b) (i)

  6.50%   04/03/27   423,101
    Congo – 0.5%            
720,000  
HTA Group Ltd. (USD)

  9.13%   03/08/22   734,040
    Dominican Republic – 1.3%            
1,860,000  
AES Andres BV / Dominican Power Partners / Empresa Generadora de Electricidad Itabo (USD) (b)

  7.95%   05/11/26   1,887,900
    El Salvador – 0.6%            
800,000  
Grupo Unicomer Co., Ltd. (USD) (b)

  7.88%   04/01/24   836,000
    Georgia – 1.1%            
540,000  
Bank of Georgia JSC (USD) (b)

  6.00%   07/26/23   526,543
975,000  
Georgian Oil and Gas Corp. JSC (USD) (b)

  6.75%   04/26/21   979,999
        1,506,542
    Guatemala – 0.5%            
735,000  
Comunicaciones Celulares S.A. Via Comcel Trust (USD) (b)

  6.88%   02/06/24   750,703
    Honduras – 0.3%            
396,000  
Inversiones Atlantida S.A. (USD) (b)

  8.25%   07/28/22   404,023
    India – 0.4%            
756,000  
Vedanta Resources PLC (USD) (b)

  6.13%   08/09/24   630,494
    Indonesia – 1.0%            
970,000  
Jababeka International BV (USD)

  6.50%   10/05/23   803,921
760,000  
Medco Platinum Road Pte Ltd. (USD) (b)

  6.75%   01/30/25   651,850
        1,455,771
    Kazakhstan – 0.5%            
789,000  
Tengizchevroil Finance Co. International Ltd. (USD) (b)

  4.00%   08/15/26   730,314
    Mexico – 1.4%            
13,950,000  
Petroleos Mexicanos (MXN)

  7.19%   09/12/24   555,466
750,000  
Sixsigma Networks Mexico SA de CV (USD) (b)

  7.50%   05/02/25   714,375
See Notes to Financial Statements
Page 11

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2018
Principal
Value
(Local
Currency)
  Description   Stated
Coupon
  Stated
Maturity
  Value
(US Dollars)
FOREIGN CORPORATE BONDS AND NOTES (a) (e) (Continued)
    Mexico (Continued)            
773,000  
Unifin Financiera SAB de CV SOFOM ENR (USD) (b) (i)

  8.88%   (j)   $641,590
        1,911,431
    Nigeria – 1.8%            
730,000  
IHS Netherlands Holdco BV (USD) (b)

  9.50%   10/27/21   737,220
770,000  
SEPLAT Petroleum Development Co., PLC (USD) (b)

  9.25%   04/01/23   765,357
1,070,000  
United Bank for Africa PLC (USD) (b)

  7.75%   06/08/22   1,061,923
        2,564,500
    Oman – 0.6%            
892,000  
Oztel Holdings SPC Ltd. (USD) (b)

  6.63%   04/24/28   824,498
    Russia – 1.9%            
304,000  
Credit Bank of Moscow Via CBOM Finance PLC (USD) (i)

  7.50%   10/05/27   230,976
1,045,000  
Evraz Group S.A. (USD) (b)

  5.38%   03/20/23   1,035,021
790,000  
Gazprom OAO Via Gaz Capital S.A. (USD)

  4.95%   03/23/27   755,413
600,000  
GTH Finance BV (USD) (b)

  7.25%   04/26/23   616,431
        2,637,841
    South Africa – 2.3%            
48,000,000  
Eskom Holdings SOC Ltd. (ZAR)

  7.50%   09/15/33   2,496,414
690,000  
Liquid Telecommunications Financing PLC (USD)

  8.50%   07/13/22   697,352
        3,193,766
    Turkey – 1.5%            
920,000  
Hazine Mustesarligi Varlik Kiralama AS (USD) (b)

  5.00%   04/06/23   876,526
790,000  
Turkiye Garanti Bankasi AS (USD) (i)

  6.13%   05/24/27   680,716
744,000  
Turkiye Vakiflar Bankasi TAO (USD)

  6.00%   11/01/22   633,970
        2,191,212
    Ukraine – 2.0%            
770,000  
Metinvest BV (USD) (b)

  8.50%   04/23/26   695,976
860,000  
MHP Lux S.A. (USD) (b)

  6.95%   04/03/26   743,556
19,750,000  
Ukreximbank Via Biz Finance PLC (UAH)

  16.50%   03/02/21   634,567
735,000  
Ukreximbank Via Biz Finance PLC (USD)

  9.63%   04/27/22   721,733
        2,795,832
   
Total Foreign Corporate Bonds and Notes

  33,773,473
    (Cost $37,397,355)            
                 
Page 12
See Notes to Financial Statements

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2018
Principal
Value
  Description   Stated
Coupon
  Stated
Maturity
  Value
U.S. GOVERNMENT BONDS AND NOTES (a) – 13.7%
$5,816,000  
United States Treasury Note

  8.75%   08/15/20   $6,385,559
5,613,000  
United States Treasury Note

  2.63%   05/15/21   5,632,295
2,919,000  
United States Treasury Note

  2.38%   05/15/27   2,858,738
4,002,000  
United States Treasury Note

  3.75%   11/15/43   4,521,166
   
Total U.S. Government Bonds and Notes

  19,397,758
    (Cost $19,349,233)            
    
 
Total Investments – 137.8%

 194,758,766
  (Cost $207,664,161) (k)   
 
Outstanding Loans – (43.0)%

 (60,798,703)
 
Net Other Assets and Liabilities – 5.2%

 7,415,789
 
Net Assets – 100.0%

 $141,375,852
    
Forward Foreign Currency Contracts
Settlement
Date
  Counterparty   Amount
Purchased
  Amount
Sold
  Purchase
Value as of
12/31/2018
  Sale
Value as of
12/31/2018
  Unrealized
Appreciation/
(Depreciation)
01/10/19   CIT   CAD 2,844,000   USD 2,195,384   $ 2,083,767   $ 2,195,384   $ (111,617)
01/10/19   BAR   PLN 547,000   USD 145,158      146,193      145,158       1,035
01/10/19   DB   USD 5,274,076   AUD 7,456,000    5,274,076    5,252,739      21,337
02/21/19   BAR   USD 2,213,610   BRL 8,425,000    2,213,610    2,165,378      48,232
01/10/19   UBS   USD 7,347,339   CAD 9,479,000    7,347,339    6,945,160     402,179
01/10/19   UBS   USD 2,076,742   MXN 42,589,000    2,076,742    2,163,650     (86,908)
01/10/19   GS   USD 2,197,449   PLN 8,230,000    2,197,449    2,199,578      (2,129)
01/10/19   UBS   USD 2,513,460   ZAR 37,558,000    2,513,460    2,607,235     (93,775)
01/10/19   BAR   USD 2,568,399   ZAR 36,799,000    2,568,399    2,554,546      13,853
Net Unrealized Appreciation (Depreciation)

  $192,207
    
Counterparty Abbreviations
BAR Barclays Bank
CIT Citibank, NA
DB Deutsche Bank
GS Goldman Sachs
UBS UBS
See Note 2D – Forward Foreign Currency Contracts in the Notes to Financial Statements.
See Note 2I – Offsetting on the Statement of Assets and Liabilities in the Notes to Financial Statements for a table that presents the forward foreign currency contracts’ assets and liabilities on a gross basis.

(a) All of these securities are available to serve as collateral for the outstanding loans.
(b) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Pursuant to procedures adopted by the Fund’s Board of Trustees, this security has been determined to be liquid by Aberdeen Standard Investments Inc. (the “Sub-Advisor”). Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security specific factors and assumptions, which require subjective judgment. At December 31, 2018, securities noted as such amounted to $37,631,624 or 26.6% of net assets.
(c) Floating rate security.
(d) Zero coupon bond.
(e) Portfolio securities are included in a country based upon their underlying credit exposure as determined by the Sub-Advisor.
(f) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A under the 1933 Act, and may be resold in transactions exempt from registration, normally to qualified institutional buyers (see Note 2C - Restricted Securities in the Notes to Financial Statements).
(g) This issuer is in default and interest is not being accrued by the Fund, nor paid by the issuer.
(h) This issuer has filed for bankruptcy protection in a São Paulo state court.
(i) Fixed-to-floating or fixed-to-variable rate security. The interest rate shown reflects the fixed rate in effect at December 31, 2018. At a predetermined date, the fixed rate will change to a floating rate or a variable rate.
See Notes to Financial Statements
Page 13

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2018
(j) Perpetual maturity.
(k) Aggregate cost for federal income tax purposes was $213,454,887. As of December 31, 2018, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost was $3,512,550 and the aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value was $22,016,464. The net unrealized depreciation was $18,503,914. The amounts presented are inclusive of derivative contracts.
    
ARLLMONP Argentina Blended Historical Policy Rate
LIBOR London Interbank Offered Rate

Valuation Inputs
A summary of the inputs used to value the Fund’s investments as of December 31, 2018 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
ASSETS TABLE
  Total
Value at
12/31/2018
Level 1
Quoted
Prices
Level 2
Significant
Observable
Inputs
Level 3
Significant
Unobservable
Inputs
Foreign Sovereign Bonds and Notes*

$141,587,535 $$141,587,535 $
Foreign Corporate Bonds and Notes*

33,773,473 33,773,473
U.S. Government Bonds and Notes

19,397,758 19,397,758
Total Investments

194,758,766 194,758,766
Forward Foreign Currency Contracts

486,636 486,636
Total

$195,245,402 $$195,245,402 $

 

LIABILITIES TABLE

  Total
Value at
12/31/2018
Level 1
Quoted
Prices
Level 2
Significant
Observable
Inputs
Level 3
Significant
Unobservable
Inputs
Forward Foreign Currency Contracts

$(294,429) $$(294,429) $
    
* See Portfolio of Investments for country breakout.
    
Page 14
See Notes to Financial Statements

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Portfolio of Investments (Continued)
December 31, 2018
Currency Exposure
Diversification
% of Total
Investments†
USD 49.2%
JPY 7.4
EUR 6.9
PLN 4.9
TRY 4.5
RUB 4.0
BRL 3.7
MXN 3.2
PEN 2.6
ZAR 2.0
GBP 1.9
IDR 1.8
MYR 1.6
NGN 1.4
ARS 1.3
GHS 0.7
CZK 0.6
AUD 0.6
CAD 0.5
SEK 0.5
NOK 0.4
UAH 0.3
Total 100.0%
    
The weightings include the impact of forward foreign currency contracts.
    
Currency Abbreviations
ARS Argentine Peso
AUD Australian Dollar
BRL Brazilian Real
CAD Canadian Dollar
CZK Czech Republic Koruna
EUR Euro
GBP British Pound Sterling
GHS Ghanaian Cedis
IDR Indonesian Rupiah
JPY Japanese Yen
MXN Mexican Peso
MYR Malaysian Ringgit
NGN Nigerian Naira
NOK Norwegian Krone
PEN Peruvian Nuevo Sol
PLN Polish Zloty
RUB Russian Ruble
SEK Swedish Krona
TRY Turkish Lira
UAH Ukrainian Hryvnia
USD United States Dollar
ZAR South African Rand
See Notes to Financial Statements
Page 15

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statement of Assets and Liabilities
December 31, 2018
ASSETS:  
Investments, at value

(Cost $207,664,161)

$ 194,758,766
Cash

3,702,538
Foreign currency (Cost $385,577)

389,519
Unrealized appreciation on forward foreign currency contracts

486,636
Receivables:  
Interest

3,573,242
Interest reclaims

51,236
Prepaid expenses

1,419
Total Assets

202,963,356
LIABILITIES:  
Outstanding loans

60,798,703
Unrealized depreciation on forward foreign currency contracts

294,429
Payables:  
Investment advisory fees

170,835
Custodian fees

65,435
Due to broker

59,082
Audit and tax fees

58,405
Interest and fees on loans

56,435
Shareholder reporting fees

38,790
Administrative fees

26,638
Legal fees

8,761
Transfer agent fees

6,429
Deferred foreign capital gains tax

927
Financial reporting fees

771
Trustees’ fees and expenses

20
Other liabilities

1,844
Total Liabilities

61,587,504
NET ASSETS

$141,375,852
NET ASSETS consist of:  
Paid-in capital

$ 167,478,260
Par value

127,705
Accumulated distributable earnings (loss)

(26,230,113)
NET ASSETS

$141,375,852
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share)

$11.07
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized)

12,770,468
Page 16
See Notes to Financial Statements

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statement of Operations
For the Year Ended December 31, 2018
INVESTMENT INCOME:  
Interest (net of foreign withholding tax of $51,257)

$ 13,313,971
Total investment income

13,313,971
EXPENSES:  
Investment advisory fees

 2,154,902
Interest and fees on loans

 1,529,610
Custodian fees

 213,402
Administrative fees

 135,101
Shareholder reporting fees

 74,810
Audit and tax fees

 58,864
Transfer agent fees

 36,045
Legal fees

 31,043
Listing expense

 21,250
Trustees’ fees and expenses

 16,082
Financial reporting fees

 9,250
Other

 28,391
Total expenses

4,308,750
NET INVESTMENT INCOME (LOSS)

9,005,221
NET REALIZED AND UNREALIZED GAIN (LOSS):  
Net realized gain (loss) on:  
Investments

(5,164,589)
Forward foreign currency contracts

944,579
Foreign currency transactions

(619,162)
Foreign capital gains tax

(56,167)
Net realized gain (loss)

(4,895,339)
Net change in unrealized appreciation (depreciation) on:  
Investments

(18,625,690)
Forward foreign currency contracts

680,139
Foreign currency translation

517,624
Deferred foreign capital gains tax

56,296
Net change in unrealized appreciation (depreciation)

(17,371,631)
NET REALIZED AND UNREALIZED GAIN (LOSS)

(22,266,970)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

$(13,261,749)
See Notes to Financial Statements
Page 17

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statements of Changes in Net Assets
  Year
Ended
12/31/2018
  Year
Ended
12/31/2017
OPERATIONS:      
Net investment income (loss)

$ 9,005,221   $ 11,109,128
Net realized gain (loss)

 (4,895,339)    (2,216,986)
Net change in unrealized appreciation (depreciation)

 (17,371,631)    18,077,333
Net increase (decrease) in net assets resulting from operations

(13,261,749)   26,969,475
DISTRIBUTIONS TO SHAREHOLDERS FROM:      
Investment operations

 (6,988,946)    
Net investment income

     (5,641,828)
Return of capital

 (4,330,624)    (7,956,025)
Total distributions to shareholders

(11,319,570)   (13,597,853)
CAPITAL TRANSACTIONS:      
Purchase of Common Shares pursuant to a tender offer

 —    (54,234,272)
Repurchase of Common Shares

 (1,662,641)    —
Net increase (decrease) in net assets resulting from capital transactions

(1,662,641)   (54,234,272)
Total increase (decrease) in net assets

 (26,243,960)    (40,862,650)
NET ASSETS:      
Beginning of period

 167,619,812    208,482,462
End of period

$ 141,375,852   $ 167,619,812
Accumulated net investment income (loss) at end of period

    $(2,667,570)
CAPITAL TRANSACTIONS were as follows:      
Common Shares at beginning of period

 12,950,337    17,267,115
Common Shares purchased pursuant to a tender offer (a)

 —    (4,316,778)
Common Shares repurchased (b)

 (179,869)    —
Common Shares at end of period

12,770,468   12,950,337
    
(a) On May 25, 2017, the Fund commenced a tender offer for up to 25% of its outstanding common shares for cash at a price per share equal to 98% of the net asset value per share determined on the expiration date. The Fund’s tender offer expired at 5:00 p.m. New York City time on Friday, June 23, 2017. Because the Fund’s tender offer was oversubscribed, the Fund repurchased 4,316,778 (25%) of its outstanding common shares on a pro-rata basis based on the number of shares properly tendered.
(b) On September 15, 2015, the Fund commenced a Share repurchase program. The program originally expired on March 15, 2016, but the Board of Trustees of the Fund has subsequently authorized the continuation of the Fund’s share repurchase program until March 15, 2019. For the fiscal year ended December 31, 2018, the Fund repurchased 179,869 shares at a weighted average discount of 15.45% from net asset value per share. The Fund did not repurchase any shares during the fiscal year ended December 31, 2017. The Fund expects to continue the share repurchase program until the earlier of (i) the repurchase of an additional 547,553 common shares (for an aggregate of 870,510) or (ii) March 15, 2019.
Page 18
See Notes to Financial Statements

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash flows from operating activities:    
Net increase (decrease) in net assets resulting from operations

$(13,261,749)  
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:    
Purchases of investments

(126,200,660)  
Sales, maturities and paydown of investments

131,867,072  
Net amortization/accretion of premiums/discounts on investments

560,268  
Net realized gain/loss on investments

5,164,589  
Net change in unrealized appreciation/depreciation on investments

18,625,690  
Net change in unrealized appreciation/depreciation on forward foreign currency contracts

(680,139)  
Changes in assets and liabilities:    
Decrease in interest receivable

315,736  
Increase in interest reclaims receivable

(51,236)  
Decrease in prepaid expenses

198  
Increase in interest and fees payable on loans

16,504  
Increase in due to broker

52,325  
Decrease in investment advisory fees payable

(23,769)  
Decrease in audit and tax fees payable

(119)  
Increase in legal fees payable

7,028  
Increase in shareholder reporting fees payable

13,558  
Increase in administrative fees payable

6,538  
Increase in custodian fees payable

12,516  
Decrease in transfer agent fees payable

(293)  
Decrease in Trustees’ fees and expenses payable

(6)  
Decrease in deferred foreign capital gains tax

(56,296)  
Increase in other liabilities payable

1,297  
Cash provided by operating activities

  $16,369,052
Cash flows from financing activities:    
Repurchase of Common Shares

(1,662,641)  
Distributions to Common Shareholders from investment operations

(6,988,946)  
Distributions to Common Shareholders from return of capital

(4,330,624)  
Repayment of borrowings

(2,000,000)  
Effect of exchange rate changes on Euro Loans (a)

(509,850)  
Cash used in financing activities

  (15,492,061)
Increase in cash and foreign currency (b)

  876,991
Cash and foreign currency at beginning of period

  3,215,066
Cash and foreign currency at end of period

  $4,092,057
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest and fees

  $1,513,106
    
(a) This amount is a component of net change in unrealized appreciation (depreciation) on foreign currency translation as shown on the Statement of Operations.
(b) Includes net change in unrealized appreciation (depreciation) on foreign currency of $7,774, which does not include the effect of exchange rate changes on Euro borrowings.
See Notes to Financial Statements
Page 19

Table of Contents
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
Financial Highlights
For a Common Share outstanding throughout each period
  Year Ended December 31,
2018   2017   2016   2015   2014
Net asset value, beginning of period

$ 12.94   $ 12.07   $ 11.66   $ 13.77   $ 15.32
Income from investment operations:                  
Net investment income (loss)

0.69   0.72   0.73   0.82   1.03
Net realized and unrealized gain (loss)

(1.70)   0.98   0.58   (1.80)   (1.22)
Total from investment operations

(1.01)   1.70   1.31   (0.98)   (0.19)
Distributions paid to shareholders from:                  
Net investment income

(0.54)   (0.37)   (0.43)     (0.71)
Net realized gain

        (0.13)
Return of capital

(0.34)   (0.53)   (0.47)   (1.14)   (0.52)
Total distributions paid to Common Shareholders

(0.88)   (0.90)   (0.90)   (1.14)   (1.36)
Common Share repurchases

0.02       0.01  
Tender offer purchases

  0.07      
Net asset value, end of period

$11.07   $12.94   $12.07   $11.66   $13.77
Market value, end of period

$9.38   $11.66   $11.16   $10.13   $12.04
Total return based on net asset value (a)

(6.85)%   15.91%   12.39%   (6.03)%   (0.84)%
Total return based on market value (a)

(12.42)%   12.88%   19.61%   (6.63)%   (5.46)%
Ratios to average net assets/supplemental data:                  
Net assets, end of period (in 000’s)

$ 141,376   $ 167,620   $ 208,482   $ 201,262   $ 239,807
Ratio of total expenses to average net assets

2.81%   2.52%   2.19%   2.10%   2.16%
Ratio of total expenses to average net assets excluding interest expense

1.82%   1.84%   1.71%   1.71%   1.76%
Ratio of net investment income (loss) to average net assets

5.88%   5.81%   5.93%   6.42%   6.79%
Portfolio turnover rate

58%   54%   64%   61%   61%
Indebtedness:                  
Total loans outstanding (in 000’s)

$ 60,799   $ 63,309   $ 82,421   $ 86,243   $ 97,405
Asset coverage per $1,000 of indebtedness (b)

$ 3,325   $ 3,648   $ 3,529   $ 3,334   $ 3,462
    
(a) Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan, and changes in net asset value per share for net asset value returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.
(b) Calculated by subtracting the Fund’s total liabilities (not including the loans outstanding) from the Fund’s total assets, and dividing by the outstanding loans balance in 000’s.
Page 20
See Notes to Financial Statements

Table of Contents
Notes to Financial Statements
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2018
1. Organization
First Trust/Aberdeen Global Opportunity Income Fund (the “Fund”) is a diversified, closed-end management investment company organized as a Massachusetts business trust on September 2, 2004, and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund trades under the ticker symbol FAM on the New York Stock Exchange (“NYSE”).
The Fund’s primary investment objective is to seek a high level of current income. As a secondary objective, the Fund seeks capital appreciation. The Fund pursues these objectives by investing its Managed Assets in the world bond markets through a diversified portfolio of investment grade and below-investment grade government and corporate debt securities. “Managed Assets” means the total asset value of the Fund minus the sum of the Fund’s liabilities other than the principal amount of borrowings, if any. There can be no assurance that the Fund will achieve its investment objectives. The Fund may not be appropriate for all investors.
2. Significant Accounting Policies
The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies.” The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
A. Portfolio Valuation
The net asset value (“NAV”) of the Common Shares of the Fund is determined daily as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. Domestic debt securities and foreign securities are priced using data reflecting the earlier closing of the principal markets for those securities. The Fund’s NAV per Common Share is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses, dividends declared but unpaid and any borrowings of the Fund), by the total number of Common Shares outstanding.
The Fund’s investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Pricing Committee of the Fund’s investment advisor, First Trust Advisors L.P. (“First Trust” or the “Advisor”), in accordance with valuation procedures adopted by the Fund’s Board of Trustees, and in accordance with provisions of the 1940 Act. Investments valued by the Advisor’s Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. The Fund’s investments are valued as follows:
Bonds, notes, and other debt securities are fair valued on the basis of valuations provided by dealers who make markets in such securities or by a third-party pricing service approved by the Fund’s Board of Trustees, which may use the following valuation inputs when available:
1) benchmark yields;
2) reported trades;
3) broker/dealer quotes;
4) issuer spreads;
5) benchmark securities;
6) bids and offers; and
7) reference data including market research publications.
Fixed income and other debt securities having a remaining maturity of sixty days or less when purchased are fair valued at cost adjusted for amortization of premiums and accretion of discounts (amortized cost), provided the Advisor’s Pricing Committee has determined that the use of amortized cost is an appropriate reflection of fair value given market and issuer-specific conditions existing at the time of the determination. Factors that may be considered in determining the appropriateness of the use of amortized cost include, but are not limited to, the following:
1) the credit conditions in the relevant market and changes thereto;
2) the liquidity conditions in the relevant market and changes thereto;
3) the interest rate conditions in the relevant market and changes thereto (such as significant changes in interest rates);
Page 21

Table of Contents
Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2018
4) issuer-specific conditions (such as significant credit deterioration); and
5) any other market-based data the Advisor’s Pricing Committee considers relevant. In this regard, the Advisor’s Pricing Committee may use last-obtained market-based data to assist it when valuing portfolio securities using amortized cost.
Forward foreign currency contracts are fair valued at the current day’s interpolated foreign exchange rate, as calculated using the current day’s spot rate, and the thirty, sixty, ninety, and one-hundred eighty day forward rates provided by a third-party pricing service.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Fund’s Board of Trustees or its delegate, the Advisor’s Pricing Committee, at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended (the “1933 Act”)) for which a third-party pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market or fair value price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of the Fund’s NAV or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the third-party pricing service, does not reflect the security’s fair value. As a general principle, the current fair value of a security would appear to be the amount which the owner might reasonably expect to receive for the security upon its current sale. When fair value prices are used, generally they will differ from market quotations or official closing prices on the applicable exchanges. A variety of factors may be considered in determining the fair value of such securities, including, but not limited to, the following:
1) the fundamental business data relating to the issuer, or economic data relating to the country of issue;
2) an evaluation of the forces which influence the market in which these securities are purchased and sold;
3) the type, size and cost of the security;
4) the financial statements of the issuer, or the financial condition of the country of issue;
5) the credit quality and cash flow of the issuer, or country of issue, based on Aberdeen Standard Investments Inc.’s (“ASII” or the “Sub-Advisor”) or external analysis;
6) the information as to any transactions in or offers for the security;
7) the price and extent of public trading in similar securities (or equity securities) of the issuer/borrower, or comparable companies;
8) the coupon payments;
9) the quality, value and salability of collateral, if any, securing the security;
10) the business prospects of the issuer, including any ability to obtain money or resources from a parent or affiliate and an assessment of the issuer’s management (for corporate debt only);
11) the economic, political and social prospects/developments of the country of issue and the assessment of the country’s governmental leaders/officials (for sovereign debt only);
12) the prospects for the issuer’s industry, and multiples (of earnings and/or cash flows) being paid for similar businesses in that industry (for corporate debt only); and
13) other relevant factors.
The Fund is subject to fair value accounting standards that define fair value, establish the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation as of the measurement date. The three levels of the fair value hierarchy are as follows:
Level 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly.
o Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates).
o Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Page 22

Table of Contents
Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2018
Level 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the investment.
The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value the Fund’s investments as of December 31, 2018, is included with the Fund’s Portfolio of Investments.
B. Security Transactions and Investment Income
Security transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Interest income is recorded on the accrual basis. Amortization of premiums and accretion of discounts are recorded by using the effective interest method.
Withholding taxes and tax reclaims on foreign interest have been provided for in accordance with each Fund’s understanding of the applicable country’s tax rules and rates.
Securities purchased or sold on a when-issued, delayed-delivery or forward purchase commitment basis may have extended settlement periods. The value of the security so purchased is subject to market fluctuations during this period. The Fund maintains liquid assets with a current value at least equal to the amount of its when-issued, delayed-delivery or forward purchase commitments until payment is made. At December 31, 2018, the Fund had no when-issued, delayed-delivery or forward purchase commitments.
C. Restricted Securities
The Fund invests in restricted securities, which are securities that may not be offered for public sale without first being registered under the 1933 Act. Prior to registration, restricted securities may only be resold in transactions exempt from registration under Rule 144A under the 1933 Act, normally to qualified institutional buyers. As of December 31, 2018, the Fund held restricted securities as shown in the following table that the Sub-Advisor has deemed illiquid pursuant to procedures adopted by the Fund’s Board of Trustees. Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security-specific factors and assumptions, which require subjective judgment. The Fund does not have the right to demand that such securities be registered. These securities are valued according to the valuation procedures as stated in the Portfolio Valuation note (Note 2A) and are not expressed as a discount to the carrying value of a comparable unrestricted security. There are no unrestricted securities with the same maturity dates and yields for these issuers.
Security Acquisition
Date
Principal
Value/Shares
Current Price Carrying
Cost
  Value   % of
Net
Assets
OAS Finance Ltd., 8.88% 4/18/2013 $1,550,000 $1.50 $1,550,000   $23,250   0.02%
OAS Investments GmbH, 8.25%, 10/19/19 10/12/2012 460,000 1.50 460,000   6,900   0.00
        $2,010,000   $30,150   0.02%
D. Forward Foreign Currency Contracts
The Fund is subject to foreign currency risk in the normal course of pursuing its investment objectives. Forward foreign currency contracts are agreements between two parties (“Counterparties”) to exchange one currency for another at a future date and at a specified price. The Fund uses forward foreign currency contracts to facilitate transactions in foreign securities and to manage the Fund’s foreign currency exposure. These contracts are valued daily, and the Fund’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in “Unrealized appreciation on forward foreign currency contracts” and “Unrealized depreciation on forward foreign currency contracts” on the Statement of Assets and Liabilities. The change in unrealized appreciation (depreciation) is included in “Net change in unrealized appreciation (depreciation) on forward foreign currency contracts” on the Statement of Operations. When the forward contract is closed, a Fund records a realized gain or loss equal to the difference between the proceeds from (or the cost of) the closing transaction and the Fund’s basis in the contract. This realized gain or loss is included in “Net realized gain (loss) on forward foreign currency contracts” on the Statement of Operations. Risks arise from the possible inability of Counterparties to meet the terms of their contracts and from movement in currency, securities values and interest rates. Due to the risks, the Fund could incur losses in excess of the net unrealized value shown on the Forward Foreign Currency Contracts table in the Portfolio of Investments. In the event of default by the Counterparty, the Fund will provide notice to the Counterparty of the Fund’s intent to convert the currency held by the Fund into the currency that the Counterparty agreed to exchange with the Fund. If a Counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund
Page 23

Table of Contents
Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2018
may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. The Fund may obtain only limited recovery or may obtain no recovery in such circumstances.
E. Foreign Currency
The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period. Purchases and sales of investments and items of income and expense are translated on the respective dates of such transactions. Unrealized gains and losses on assets and liabilities, other than investments in securities, which result from changes in foreign currency exchange rates have been included in “Net change in unrealized appreciation (depreciation) on foreign currency translation” on the Statement of Operations. Unrealized gains and losses on investments in securities which result from changes in foreign exchange rates are included with fluctuations arising from changes in market price and are shown in “Net change in unrealized appreciation (depreciation) on investments” on the Statement of Operations. Net realized foreign currency gains and losses include the effect of changes in exchange rates between trade date and settlement date on investment security transactions, foreign currency transactions and interest and dividends received and are shown in “Net realized gain (loss) on foreign currency transactions” on the Statement of Operations. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase settlement date and subsequent sale trade date is included in “Net realized gain (loss) on investments” on the Statement of Operations.
F. Dividends and Distributions to Shareholders
The Fund will distribute to holders of its Common Shares monthly dividends of all or a portion of its net income after the payment of interest and dividends in connection with leverage, if any. Distributions of any long-term capital gains earned by the Fund are distributed at least annually. Distributions will automatically be reinvested into additional Common Shares pursuant to the Fund’s Dividend Reinvestment Plan unless cash distributions are elected by the shareholder.
Distributions from net investment income and realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These permanent differences are primarily due to the varying treatment of income and gain/loss on portfolio securities held by the Fund and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for financial statement and tax purposes, will reverse at some time in the future.
Permanent differences incurred during the fiscal year ended December 31, 2018, primarily as a result of differing book and tax treatment on realization of foreign currency gains (losses), have been reclassified at year end to reflect a decrease in accumulated net investment income (loss) by $1,587,325, an increase in accumulated net realized gain (loss) by $1,639,889 and a decrease to paid-in capital of $52,564. Accumulated distributable earnings (loss) consists of accumulated net investment income (loss), accumulated net realized gain (loss), and unrealized appreciation (depreciation). Net assets were not affected by this reclassification.
The tax character of distributions paid by the Fund during the fiscal years ended December 31, 2018 and 2017, was as follows:
Distributions paid from: 2018 2017
Ordinary income

$6,988,946 $5,641,828
Capital gains

Return of capital

4,330,624 7,956,025
As of December 31, 2018, the components of distributable earnings and net assets on a tax basis were as follows:
Undistributed ordinary income

$
Undistributed capital gains

Total undistributed earnings

Accumulated capital and other losses

(10,731,017)
Net unrealized appreciation (depreciation)

(15,422,387)
Total accumulated earnings (losses)

(26,153,404)
Other

(76,709)
Paid-in capital

167,605,965
Total net assets

$141,375,852
Page 24

Table of Contents
Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2018
G. Income and Other Taxes
The Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net realized gains to shareholders. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund’s taxable income exceeds the distributions from such taxable income for the calendar year.
Certain countries assess a capital gains tax on securities sold in their local markets. This tax is accrued as the securities in these foreign markets appreciate in value and is paid at the time of sale to the extent a capital gain is realized. Taxes accrued on securities in an unrealized appreciation position are included in “Net change in unrealized appreciation (depreciation) on deferred foreign capital gains tax” on the Statement of Operations. The capital gains tax paid on securities sold, if any, is included in “Net realized gain (loss) on foreign capital gains tax” on the Statement of Operations.
India’s Finance Bill, 2018 (“Finance Bill, 2018”) was enacted into law on March 29, 2018 and amongst other provisions, it introduces a long-term capital gains tax beginning April 1, 2018. Long-term capital gains on the sale of listed shares in excess of INR 0.1 million will be taxed at the rate of 10% (plus applicable surcharge and cess (which is a type of tax)) subject to satisfaction of certain conditions. Long-term capital gains accruing as of January 31, 2018 will be considered exempt due to a grandfather clause in the provision. In the case of the sale of listed shares held by the Fund for one year or less, the income would be classified as short-term capital gains and would be taxable at 15% (plus applicable surcharge and cess) provided the shares are sold on the stock exchange and subjected to securities transaction tax (“STT”). The Finance Bill, 2018 increases the cess imposed on the sum of tax and surcharge from 3% to 4%. The cess 4% rate is applied to the capital gains tax, resulting in a higher effective rate of capital gains tax. Where the sale of shares is outside the stock exchange and not subject to STT, the long-term capital gains would be taxed at 10% (plus applicable surcharge and cess) and short-term capital gains would be taxed at 30% (plus applicable surcharge and cess). The Finance Bill, 2018, approves the carry forward of long-term capital losses to be offset against long-term capital gains. Short-term losses and long-term losses can be netted against short-term gains and long-term gains, respectively.
The Fund intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At December 31, 2018, the Fund had $10,146,042 non-expiring capital loss carryforwards for federal income tax purposes.
Certain losses realized during the current fiscal year may be deferred and treated as occurring on the first day of the following fiscal year for federal income tax purposes. For the fiscal year ended December 31, 2018, the Fund incurred and elected to defer capital losses of $584,975.
The Fund is subject to accounting standards that establish a minimum threshold for recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. Taxable years ended 2015, 2016, 2017, and 2018 remain open to federal and state audit. As of December 31, 2018, management has evaluated the application of these standards to the Fund, and has determined that no provision for income tax is required in the Fund’s financial statements for uncertain tax positions.
H. Expenses
The Fund will pay all expenses directly related to its operations.
I. Offsetting on the Statement of Assets and Liabilities
Offsetting assets and liabilities requires entities to disclose both gross and net information about instruments and transactions eligible for offset on the Statement of Assets and Liabilities, and disclose instruments and transactions subject to master netting or similar agreements. These disclosure requirements are intended to help investors and other financial statement users better assess the effect or potential effect of offsetting arrangements on a fund’s financial position. The transactions subject to offsetting disclosures are derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions.
For financial reporting purposes, the Fund does not offset financial assets and financial liabilities that are subject to master netting arrangements (“MNAs”) or similar agreements on the Statement of Assets and Liabilities. MNAs provide the right, in the event of default (including bankruptcy and insolvency), for the non-defaulting Counterparty to liquidate the collateral and calculate the net exposure to the defaulting party or request additional collateral.
Page 25

Table of Contents
Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2018
At December 31, 2018, derivative assets and liabilities (by type) on a gross basis are as follows:
             

 

 Gross Amounts not Offset
in the Statement of
Assets and Liabilities

   
  Gross
Amounts of
Recognized
Assets
  Gross Amounts
Offset in the
Statement of
Assets
and Liabilities
  Net Amounts of
Assets
Presented
in the Statement
of Assets and
Liabilities
  Financial
Instruments
  Collateral
Amounts
Received
  Net
Amount
Forward Foreign
Currency Contracts*
$ 486,636   $ —   $ 486,636   $ (180,683)   $ —   $ 305,953
             

 

Gross Amounts not Offset
in the Statement of
Assets and Liabilities

   
  Gross
Amounts of
Recognized
Liabilities
  Gross Amounts
Offset in the
Statement of
Assets
and Liabilities
  Net Amounts of
Liabilities
Presented
in the Statement
of Assets and
Liabilities
  Financial
Instruments
  Collateral
Amounts
Pledged
  Net
Amount
Forward Foreign Currency Contracts* $ (294,429)   $ —   $ (294,429)   $ 180,683   $ —   $ (113,746)
* The respective Counterparties for each contract are disclosed in the Forward Foreign Currency Contracts table in the Portfolio of Investments.
J. New Accounting Pronouncements
On March 30, 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-08 “Premium Amortization on Purchased Callable Debt Securities,” which amends the amortization period for certain purchased callable debt securities held at a premium by shortening such period to the earliest call date. The new guidance requires an entity to amortize the premium on a callable debt security within its scope to the earliest call date, unless the guidance for considering estimated prepayments is applied. If the call option is not exercised at the earliest call date, the yield is reset to the effective yield using the payment terms of the security. If the security has more than one call date and the premium was amortized to a call price greater than the next call price, any excess of the amortized cost basis over the amount repayable at the next call date will be amortized to that date. If there are no other call dates, any excess of the amortized cost basis over the par amount will be amortized to maturity. Discounts on purchased callable debt securities will continue to be amortized to the security’s maturity date. ASU 2017-08 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Earlier adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the ASU in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. Management is still assessing the impact of the adoption of ASU 2017-08 on the financial statements but does not expect it to have a material impact.
On August 28, 2018, the FASB issued ASU 2018-13, “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which amends the fair value measurement disclosure requirements of ASC 820. The amendments of ASU 2018-13 include new, eliminated, and modified disclosure requirements of ASC 820. In addition, the amendments clarify that materiality is an appropriate consideration of entities when evaluating disclosure requirements. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Fund has early adopted ASU 2018-13 for these financial statements, which did not result in a material impact.
3. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements
First Trust, the investment advisor to the Fund, is a limited partnership with one limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust is responsible for the ongoing monitoring of the Fund’s investment portfolio,
Page 26

Table of Contents
Notes to Financial Statements (Continued)
First Trust/Aberdeen Global Opportunity Income Fund (FAM)
December 31, 2018
managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund. For these services, First Trust is entitled to a monthly fee calculated at an annual rate of 1.00% of the Fund’s Managed Assets. First Trust also provides fund reporting services to the Fund for a flat annual fee in the amount of $9,250.
ASII serves as the Fund’s sub-advisor and manages the Fund’s portfolio subject to First Trust’s supervision. The Sub-Advisor receives a monthly portfolio management fee calculated at an annual rate of 0.50% of the Fund’s Managed Assets that is paid by First Trust out of its investment advisory fee.
ASII, an SEC registered investment advisor, is an indirect wholly-owned subsidiary of Standard Life Aberdeen plc. Standard Life Aberdeen plc is a publicly-traded global provider of long-term savings and investments listed on the London Stock Exchange, managing assets for institutional and retail clients from offices around the world.
BNY Mellon Investment Servicing (US) Inc. (“BNYM IS”) serves as the Fund’s transfer agent in accordance with certain fee arrangements. As transfer agent, BNYM IS is responsible for maintaining shareholder records for the Fund. The Bank of New York Mellon (“BNYM”) serves as the Fund’s administrator, fund accountant, and custodian in accordance with certain fee arrangements. As administrator and fund accountant, BNYM is responsible for providing certain administrative and accounting services to the Fund, including maintaining the Fund’s books of account, records of the Fund’s securities transactions, and certain other books and records. As custodian, BNYM is responsible for custody of the Fund’s assets. BNYM IS and BNYM are subsidiaries of The Bank of New York Mellon Corporation, a financial holding company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor or any of their affiliates (“Independent Trustees”) is paid a fixed annual retainer that is allocated equally among each fund in the First Trust Fund Complex. Each Independent Trustee is also paid an annual per fund fee that varies based on whether the fund is a closed-end or other actively managed fund, or is an index fund.
Additionally, the Lead Independent Trustee and the Chairmen of the Audit Committee, Nominating and Governance Committee and Valuation Committee are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Lead Independent Trustee and Committee Chairmen rotate every three years. The officers and “Interested” Trustee receive no compensation from the Fund for acting in such capacities.
4. Purchases and Sales of Securities
The cost of purchases and proceeds from sales of investments, other than U.S. government obligations and short-term obligations, for the fiscal year ended December 31, 2018, were $102,376,623 and $118,676,949, respectively. The cost of purchases and proceeds from sales of U.S. government obligations, for the fiscal year ended December 31, 2018, were $17,965,986 and $4,292,408, respectively.
5. Derivative Transactions
The following table presents the type of derivatives held by the Fund at December 31, 2018, the primary underlying risk exposure and the location of these instruments as presented on the Statement of Assets and Liabilities.
        Asset Derivatives   Liability Derivatives
Derivative
Instrument
  Risk
Exposure
  Statement of Assets and
Liabilities Location
  Value   Statement of Assets and
Liabilities Location