Aberdeen Australia Equity Fund, Inc. (NYSE AMEX: IAF) (the “Fund”), a closed-end equity fund, today announced that it paid on July 15, 2011, a quarterly distribution of US 29 cents per share to all shareholders of record as of June 30, 2011. Under U.S. tax rules applicable to the Fund, the amount and character of distributable income for each fiscal year can be finally determined only as of the end of the Fund’s fiscal year. However, under Section 19 of the Investment Company Act of 1940, as amended (the “1940 Act”) and related Rules, the Fund may be required to indicate to shareholders the source of certain distributions to shareholders. The following table sets forth the estimated amounts of the sources of the distribution for purposes of Section 19 of the 1940 Act and the Rules adopted thereunder. The table includes estimated amounts and percentages for this distribution and for the cumulative distributions paid year to date, from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital. The estimated composition of the distributions may vary from quarter to quarter because the estimated composition may be impacted by future income, expenses and realized gains and losses on securities.
|Estimated Amountsof CurrentQuarterlyDistribution pershare ($)||Estimated Amountsof CurrentQuarterlyDistribution pershare (%)||Estimated Amountsof Fiscal Year toDate CumulativeDistributions pershare ($)||Estimated Amountsof Fiscal Year toDate CumulativeDistributions pershare (%)|
|Net Investment Income||$0.0667||23%||$0.1955||23%|
|Net Realized Short-Term Capital Gains||-||-||-||-|
|Net Realized Long-Term Capital Gains||$0.1247||43%||$0.3655||43%|
|Return of Capital||$0.0986||34%||$0.2890||34%|
|Total (per common share)||$0.2900||100%||$0.8500||100%|
The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The final determination of the source of all distributions in 2011 will be made after year-end. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of the fiscal year and may be subject to change based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.The following table provides information regarding the Fund’s total return performance based on net asset value (NAV) over various time periods as well as the Fund’s annualized and cumulative distribution rates.
|Average Annual Total Return on NAV for the 5 Year Period Ending 06/30/11||10.62%|
|Current Fiscal Period’s Annualized Distribution Rate on NAV1||9.86%|
|Year to Date (11/01/2010 to 06/30/2011)|
|Cumulative Total Return on NAV||7.29%|
|Cumulative Distribution Rate on NAV1||7.35%|
The payment of distributions in accordance with the Distribution Policy may result in a decrease in the Fund’s net assets. A decrease in the Fund’s net assets may cause an increase in the Fund’s annual operating expenses and a decrease in the Fund’s market price per share to the extent the market price correlates closely to the Fund’s net asset value per share. The Distribution Policy may also negatively affect the Fund’s investment activities to the extent that the Fund is required to hold larger cash positions than it typically would hold or to the extent that the Fund must liquidate securities that it would not have sold or hold securities that it would liquidate, for the purpose of paying the distribution. The Distribution Policy may, under certain circumstances, cause the amounts of taxable distributions to exceed the levels required to be distributed under the Code ( i.e., to the extent the Fund has capital losses in any taxable year, such losses may be carried forward to reduce the amount of capital gains required to be distributed in future years; if distributions in a year exceed the amount minimally required to be distributed under the tax rules, such excess will be taxable as ordinary income to the extent loss carryforwards reduce the required amount of capital gains distributions in that year). The Fund’s Board of Directors has the right to amend, suspend or terminate the Distribution Policy at any time. The amendment, suspension or termination of the Distribution Policy may affect the Fund’s market price per share. Investors should consult their tax advisor regarding federal, state and local tax considerations that may be applicable in their particular circumstances.Circular 230 disclosure: To ensure compliance with requirements imposed by the U.S. Treasury, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Closed-end funds have a one-time initial public offering and then are subsequently traded on the secondary market through one of the stock exchanges. The investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the fund’s portfolio. There is no assurance that a fund will achieve its investment objective. Past performance does not guarantee future results.
Investors should consider a fund's investment objectives, risks, charges and expenses carefully before investing. A copy of the prospectus for Aberdeen Australia Equity Fund, Inc. that contains this and other information about the fund may be obtained by calling 866-839-5205. Please read the prospectus carefully before investing. Investing in funds involves risk, including possible loss of principal.If you wish to receive this information electronically, please contact InvestorRelations@aberdeen-asset.com www.aberdeeniaf.com