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: | 811-04438 | |
Exact name of registrant as specified in charter: | abrdn Australia Equity Fund, Inc. | |
Address of principal executive offices: | 1900 Market Street, Suite 200 | |
Philadelphia, PA 19103 | ||
Name and address of agent for service: | Sharon Ferrari | |
abrdn Inc. | ||
1900 Market Street, Suite 200 | ||
Philadelphia, PA 19103 | ||
Registrant’s telephone number, including area code: | 1-800-522-5465 | |
Date of fiscal year end: | October 31 | |
Date of reporting period: | April 30, 2025 |
Item 1. Reports to Stockholders.
(a) A copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 (the “1940 Act”) is filed herewith.
1 | Past performance is no guarantee of future results. Investment returns and principal value will fluctuate and shares, when sold, may be worth more or less than original cost. Current performance may be lower or higher than the performance quoted. Net asset value return data include investment management fees, custodial charges and administrative fees (such as Director and legal fees) and assumes the reinvestment of all distributions. |
2 | Assuming the reinvestment of dividends and distributions. |
3 | The Fund’s total return is based on the reported net asset value (“NAV”) for each financial reporting period end and may differ from what is reported on the Financial Highlights due to financial statement rounding or adjustments. |
4 | The S&P/ASX 200 is a market-capitalization weighted and float-adjusted stock market index of Australian stocks listed on the Australian Securities Exchange from S&P Global Ratings. The index is calculated net of withholding taxes to which the Fund is generally subject. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
abrdn Australia Equity Fund, Inc. | 1 |
2 | abrdn Australia Equity Fund, Inc. |
abrdn Australia Equity Fund, Inc. | 3 |
6 Months | 1 Year | 3 Years | 5 Years | 10 Years | |
Net Asset Value (NAV) | -0.50% | 13.81% | 5.45% | 12.39% | 6.41% |
Market Price | 0.73% | 11.08% | 1.14% | 12.21% | 5.92% |
S&P/ASX 200 (Net Total Return) | -1.20% | 7.95% | 3.27% | 11.39% | 5.21% |
4 | abrdn Australia Equity Fund, Inc. |
Sectors | |
Financials | 35.4% |
Banks | 27.2%(1) |
Capital Markets | 4.6% |
Insurance | 3.6% |
Materials | 16.1% |
Health Care | 15.1% |
Consumer Discretionary | 12.2% |
Industrials | 7.9% |
Real Estate | 6.7% |
Communication Services | 4.7% |
Information Technology | 4.0% |
Energy | 1.9% |
Utilities | 1.6% |
Short-Term Investment | 0.3% |
Liabilities in Excess of Other Assets | (5.9%) |
100.0% |
(1) | The Fund's investment policies permit it to invest up to 35% of its total assets in the securities of a single industry group, provided that, at the time of investment, that group represents 20% or more of the S&P/ASX 200. On a gross asset basis, the Banks sector investment would be less than 25% of the Fund's portfolio. |
Top Ten Holdings | |
Commonwealth Bank of Australia | 13.4% |
BHP Group Ltd. | 8.3% |
National Australia Bank Ltd. | 6.1% |
CSL Ltd. | 6.1% |
Aristocrat Leisure Ltd. | 5.6% |
Telstra Group Ltd. | 4.7% |
Goodman Group, REIT | 4.6% |
Wesfarmers Ltd. | 4.6% |
ResMed, Inc., CDI | 4.2% |
ANZ Group Holdings Ltd. | 3.9% |
abrdn Australia Equity Fund, Inc. | 5 |
Shares | Description | Industry and Percentage of Net Assets | Value |
COMMON STOCKS—105.6% | |||
AUSTRALIA—91.3% | |||
410,705 | ALS Ltd. | Professional Services—3.5% | $ 4,506,446 |
266,023 | ANZ Group Holdings Ltd. | Banks—3.9% | 5,086,960 |
170,768 | Aristocrat Leisure Ltd. | Hotels, Restaurants & Leisure—5.6% | 7,293,339 |
451,858 | BHP Group Ltd. | Metals & Mining—8.3% | 10,769,426 |
13,833 | Cochlear Ltd. | Health Care Equipment & Supplies—1.9% | 2,422,581 |
163,347 | Commonwealth Bank of Australia | Banks—13.4% | 17,411,008 |
314,006 | Goodman Group, REIT | Industrial REITs—4.6% | 6,011,279 |
46,491 | HUB24 Ltd. | Capital Markets—1.6% | 2,147,828 |
890,201 | Insurance Australia Group Ltd. | Insurance—3.6% | 4,675,753 |
68,499 | James Hardie Industries PLC, CDI(a) | Construction Materials—1.2% | 1,607,822 |
40,118 | JB Hi-Fi Ltd. | Specialty Retail—2.0% | 2,658,529 |
31,560 | Macquarie Group Ltd. | Capital Markets—3.0% | 3,900,028 |
1,881,127 | Mirvac Group, REIT | Diversified REITs—2.1% | 2,743,909 |
344,945 | National Australia Bank Ltd. | Banks—6.1% | 7,965,023 |
356,672 | Northern Star Resources Ltd. | Metals & Mining—3.4% | 4,381,243 |
304,867 | Origin Energy Ltd. | Electric Utilities—1.6% | 2,077,975 |
25,485 | Pro Medicus Ltd. | Health Care Technology—2.9% | 3,736,874 |
59,268 | Rio Tinto PLC | Metals & Mining—2.7% | 3,531,747 |
65,252 | SGH Ltd. | Trading Companies & Distributors—1.6% | 2,134,045 |
2,128,658 | Telstra Group Ltd. | Diversified Telecommunication Services—4.7% | 6,143,512 |
403,096 | Transurban Group | Transportation Infrastructure—2.8% | 3,632,448 |
119,210 | Wesfarmers Ltd. | Broadline Retail—4.6% | 5,971,974 |
238,000 | Westpac Banking Corp. | Banks—3.8% | 4,994,468 |
12,203 | WiseTech Global Ltd. | Software—0.5% | 693,898 |
192,997 | Woodside Energy Group Ltd. | Oil, Gas & Consumable Fuels—1.9% | 2,515,741 |
Total Australia | 119,013,856 | ||
CANADA—0.5% | |||
124,000 | Capstone Copper Corp., CDI(a) | Metals & Mining—0.5% | 614,401 |
NEW ZEALAND—3.5% | |||
43,143 | Xero Ltd.(a) | Software—3.5% | 4,543,522 |
UNITED STATES—10.3% | |||
49,394 | CSL Ltd. | Biotechnology—6.1% | 7,928,376 |
235,212 | ResMed, Inc., CDI | Health Care Equipment & Supplies—4.2% | 5,563,521 |
Total United States | 13,491,897 | ||
Total Common Stocks | 137,663,676 | ||
SHORT-TERM INVESTMENT—0.3% | |||
UNITED STATES—0.3% | |||
344,730 | State Street Institutional U.S. Government Money Market Fund, Premier Class, 4.29(b) | 344,730 | |
Total Short-Term Investment | 344,730 | ||
Total Investments—105.9% (cost $108,941,504)(c) | 138,008,406 | ||
Liabilities in Excess of Other Assets—(5.9%) | (7,674,650) | ||
Net Assets—100.0% | $130,333,756 |
(a) | Non-income producing security. |
(b) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of April 30, 2025. |
(c) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
CDI | Chess Depository Interest |
PLC | Public Limited Company |
REIT | Real Estate Investment Trust |
6 | abrdn Australia Equity Fund, Inc. |
Assets | |
Investments, at value (cost $108,596,774) | $ 137,663,676 |
Short-term investment, at value (cost $344,730) | 344,730 |
Foreign currency, at value (cost $1,977,041) | 1,988,996 |
Interest and dividends receivable | 167,013 |
Prepaid expenses | 23,981 |
Total assets | 140,188,396 |
Liabilities | |
Revolving Credit Facility payable (Note 7) | 9,597,752 |
Investment management fees payable (Note 3) | 109,417 |
Investor relations fees payable (Note 3) | 35,761 |
Administration fees payable (Note 3) | 9,405 |
Interest payable on credit facility | 7,692 |
Other accrued expenses | 94,613 |
Total liabilities | 9,854,640 |
Net Assets | $130,333,756 |
Composition of Net Assets | |
Common stock (par value $0.010 per share) (Note 5) | $ 276,881 |
Paid-in capital in excess of par | 110,663,001 |
Distributable earnings | 19,393,874 |
Net Assets | $130,333,756 |
Net asset value per share based on 27,688,134 shares issued and outstanding | $4.71 |
abrdn Australia Equity Fund, Inc. | 7 |
Net Investment Income | |
Investment Income: | |
Dividends (net of foreign withholding taxes of $28,801) | $ 2,076,629 |
Interest and other income | 14,511 |
Total investment income | 2,091,140 |
Expenses: | |
Investment management fee (Note 3) | 634,994 |
Directors' fees and expenses | 115,680 |
Administration fee (Note 3) | 55,569 |
Independent auditors’ fees and tax expenses | 38,408 |
Transfer agent’s fees and expenses | 31,353 |
Investor relations fees and expenses (Note 3) | 27,475 |
Reports to shareholders and proxy solicitation | 23,840 |
Legal fees and expenses | 16,160 |
Custodian’s fees and expenses | 12,685 |
Revolving credit facility fees and expenses (Note 7) | 6,647 |
Insurance expense | 3,389 |
NYSE listing fee | 2,506 |
Miscellaneous | 15,063 |
Total operating expenses, excluding interest expense | 983,769 |
Interest expense (Note 7) | 249,930 |
Net operating expenses | 1,233,699 |
Net Investment Income | 857,441 |
Net Realized/Unrealized Gain/(Loss): | |
Net realized gain/(loss) from: | |
Investments (Note 2f) | 1,480,432 |
Foreign currency transactions | (20,934) |
1,459,498 | |
Net change in unrealized appreciation/depreciation on: | |
Investments (Note 2f) | (2,927,980) |
Foreign currency translation | (876,382) |
(3,804,362) | |
Net realized and unrealized gain from investments and foreign currencies | (2,344,864) |
Change in Net Assets Resulting from Operations | $(1,487,423) |
8 | abrdn Australia Equity Fund, Inc. |
For the Six-Month Period Ended April 30, 2025 (unaudited) | For the Year Ended October 31, 2024 | |
Increase/(Decrease) in Net Assets: | ||
Operations: | ||
Net investment income | $857,441 | $1,977,655 |
Net realized gain from investments and foreign currency transactions | 1,459,498 | 1,318,422 |
Net change in unrealized appreciation/depreciation investments and foreign currency translations | (3,804,362) | 30,711,201 |
Net increase/(decrease) in net assets resulting from operations | (1,487,423) | 34,007,278 |
Distributions to Shareholders From: | ||
Distributable earnings | (6,816,993) | (3,957,667) |
Return of capital | – | (8,491,070) |
Net decrease in net assets from distributions | (6,816,993) | (12,448,737) |
Issuance of 555,463 and 1,057,980 shares of common stock, respectively due to stock distribution | 2,332,820 | 4,587,476 |
Change in net assets | (5,971,596) | 26,146,017 |
Net Assets: | ||
Beginning of period | 136,305,352 | 110,159,335 |
End of period | $130,333,756 | $136,305,352 |
abrdn Australia Equity Fund, Inc. | 9 |
For the Six-Month Period Ended April 30, | For the Fiscal Years Ended October 31, | |||||
2025 (unaudited) | 2024 | 2023 (a) | 2022 | 2021 | 2020 | |
PER SHARE OPERATING PERFORMANCE(b): | ||||||
Net asset value, beginning of period | $5.02 | $4.22 | $4.67 | $6.44 | $5.16 | $5.77 |
Net investment income | 0.03 | 0.07 | 0.11 | 0.21 | 0.11 | 0.08 |
Net realized and unrealized gains/(losses) on investments and foreign currency transactions | (0.06) | 1.22 | (0.04) | (1.39) | 1.77 | (0.16) |
Total from investment operations | (0.03) | 1.29 | 0.07 | (1.18) | 1.88 | (0.08) |
Distributions from: | ||||||
Net investment income | (0.25) | (0.08) | (0.13) | (0.22) | (0.17) | (0.04) |
Net realized gains | – | (0.07) | (0.02) | (0.37) | (0.42) | (0.14) |
Return of capital | – | (0.32) | (0.35) | – | – | (0.34) |
Total distributions | (0.25) | (0.47) | (0.50) | (0.59) | (0.59) | (0.52) |
Capital Share Transactions: | ||||||
Impact of Stock Distribution | (0.03) | (0.02) | (0.02) | – | (0.01) | (0.01) |
Net asset value, end of period | $4.71 | $5.02 | $4.22 | $4.67 | $6.44 | $5.16 |
Market price, end of period | $4.17 | $4.39 | $3.61 | $4.03 | $6.08 | $4.47 |
Total Investment Return Based on(c): | ||||||
Market price | 0.73% | 35.33% | 0.57% | (25.72%) | 50.49% | (2.98%) |
Net asset value | (0.50%) | 32.38% | 1.45% | (18.74%) | 38.09% | 0.16% |
Ratio to Average Net Assets/Supplementary Data: | ||||||
Net assets, end of period (000 omitted) | $130,334 | $136,305 | $110,159 | $116,404 | $154,000 | $119,290 |
Average net assets applicable to common shareholders (000 omitted) | $130,582 | $129,178 | $123,690 | $133,947 | $143,765 | $120,590 |
Gross operating expenses | 1.91%(d) | 1.94% | 2.03% | 1.67% | 1.55% | 1.53% |
Net operating expenses, net of fee waivers | 1.91%(d) | 1.94% | 2.02% | 1.67% | 1.55% | 1.53% |
Net operating expenses, net of fee waivers and excluding interest expense | 1.52%(d) | 1.53% | 1.65% | 1.55% | 1.49% | – |
Net Investment income | 1.32%(d) | 1.53% | 2.17% | 3.86% | 1.76% | 1.43% |
Portfolio turnover | 8%(e) | 17% | 11% | 23% | 23% | 32% |
Senior securities (loan facility) outstanding (000 omitted) | $9,598 | $9,825 | $9,497 | $9,592 | $7,511 | $7,023 |
Asset coverage ratio on revolving credit facility at period end(f) | 1,458% | 1,487% | 1,260% | 1,314% | 2,150% | 1,799% |
Asset coverage per $1,000 on revolving credit facility at period end | $14,580 | $14,873 | $12,599 | $13,136 | $21,503 | $17,987 |
(a) | Prior to March 17, 2023, abrdn Asia Limited, the Fund's investment manager, had engaged abrdn Australia Limited as an investment adviser to the Fund. abrdn Asia Limited, and not the Fund, paid abrdn Australia Limited for its services. Effective March 17, 2023, abrdn Australia Limited was no longer an investment adviser for the Fund; however, abrdn Asia Limited continued to serve as the investment manager. |
(b) | Based on average shares outstanding.See accompanying Notes to Financial Statements. |
10 | abrdn Australia Equity Fund, Inc. |
(c) | Total investment return based on market value is calculated assuming that shares of the Fund’s common stock were purchased at the closing market price as of the beginning of the period, dividends, capital gains and other distributions were reinvested as provided for in the Fund’s dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Fund’s net asset value is substituted for the closing market value. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | Asset coverage ratio is calculated by dividing net assets as of each fiscal period end plus the amount of any borrowings, for investment purposes outstanding as of each fiscal period end by the amount of the Revolving Credit Facility as of each fiscal period end. |
abrdn Australia Equity Fund, Inc. | 11 |
12 | abrdn Australia Equity Fund, Inc. |
Security Type | Standard Inputs |
Foreign equities utilizing a fair value factor | Depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. |
Investments, at Value | Level 1 – Quoted Prices | Level 2 – Other Significant Observable Inputs | Level 3 – Significant Unobservable Inputs | Total |
Assets | ||||
Investments in Securities | ||||
Common Stocks | $– | $137,663,676 | $– | $137,663,676 |
Short-Term Investment | 344,730 | – | – | 344,730 |
Total Investments | $344,730 | $137,663,676 | $– | $138,008,406 |
Total Investment Assets | $344,730 | $137,663,676 | $– | $138,008,406 |
abrdn Australia Equity Fund, Inc. | 13 |
14 | abrdn Australia Equity Fund, Inc. |
abrdn Australia Equity Fund, Inc. | 15 |
16 | abrdn Australia Equity Fund, Inc. |
abrdn Australia Equity Fund, Inc. | 17 |
18 | abrdn Australia Equity Fund, Inc. |
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation/ (Depreciation) |
$102,067,460 | $39,764,646 | $(1,834,705) | $37,929,941 |
abrdn Australia Equity Fund, Inc. | 19 |
20 | abrdn Australia Equity Fund, Inc. |
abrdn Australia Equity Fund, Inc. | 21 |
(b) Not applicable.
Item 2. Code of Ethics.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 3. Audit Committee Financial Expert.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 4. Principal Accountant Fees and Services.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
This item is inapplicable to semi-annual report on Form N-CSR.
Item 6. Investments.
(a) Schedule of Investments in securities of unaffiliated issuers as of close of the reporting period is included as part of the Report to Shareholders filed under Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
Not applicable.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies.
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
Not applicable.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
Not applicable.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
This item is inapplicable to the semi-annual report on Form N-CSR.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1) Not applicable to the semi-annual report on Form N-CSR.
(b) There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Period | (a) Total No. of Shares Purchased | (b) Average Price Paid per Share | (c) Total No. of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | (d) Maximum No. of Shares that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||||
Month #1 (Nov. 1, 2024 — Nov. 30, 2024) | — | — | — | 2,713,267 | ||||||||||||
Month #2 (Dec. 1, 2024 — Dec. 31, 2024) | — | — | — | 2,713,267 | ||||||||||||
Month #3 (Jan. 1, 2025 — Jan. 31, 2025) | — | — | — | 2,713,267 | ||||||||||||
Month #4 (Feb. 1, 2025 — Feb. 28, 2025) | — | — | — | 2,713,267 | ||||||||||||
Month #5 (Mar. 1, 2025 — Mar. 31, 2025) | — | — | — | 2,713,267 | ||||||||||||
Month #6 (Apr. 1, 2025 — Apr. 30, 2025) | — | — | — | 2,713,267 | ||||||||||||
Total | — | — | — |
(1) | On March 1, 2001, the Board of Trustees approved an open market share repurchase program (the “Program”). The Program allows the Fund to purchase, in the open market, its outstanding common shares, with the amount and timing of any repurchase determined at the discretion of the Fund’s investment adviser. Such purchases may be made opportunistically at certain discounts to NAV per share in the reasonable judgment of management based on historical discount levels and current market conditions. On a quarterly basis, the Fund’s Board will receive information on any transactions made pursuant to this policy during the prior quarter and management will post the number of shares repurchased on the Fund's website on a monthly basis. Under the terms of the Program, the Fund is permitted to repurchase up to 10% of its outstanding shares of common stock in the open market during any 12 month period as of October 31 of the prior year. For the period ended April 30, 2025, the Fund did not repurchase any shares through this program. |
Item 15. Submission of Matters to a Vote of Security Holders.
During the period ended April 30, 2025, there were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.
Item 16. Controls and Procedures.
(a) | The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15(b)). |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 19. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant’s securities are listed. Not applicable. |
(a)(3) | The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this Form N-CSR. |
(a)(4) | Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. |
(a)(5) | Change in Registrant’s independent public accountant. Not applicable. |
(b) | The certifications of the registrant as required by Rule 30a-2(b) under the Act are exhibits to this Form N-CSR. |
(c) | A copy of the Registrant’s notices to stockholders, which accompanied distributions paid, pursuant to the Registrant’s Managed Distribution Policy since the Registrant’s last filed N-CSR, are filed herewith as Exhibits (c)(1) and (c)(2) as required by the terms of the Registrant’s SEC exemptive order. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
abrdn Australia Equity Fund, Inc.
By: | /s/ Alan Goodson | |
Alan Goodson, | ||
Principal Executive Officer of | ||
abrdn Australia Equity Fund, Inc. |
Date: July 7, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Alan Goodson | |
Alan Goodson, | ||
Principal Executive Officer of | ||
abrdn Australia Equity Fund, Inc. |
Date: July 7, 2025
By: | /s/ Sharon Ferrari | |
Sharon Ferrari, | ||
Principal Financial Officer of | ||
abrdn Australia Equity Fund, Inc. |
Date: July 7, 2025