[LOGO]
THE FIRST
COMMONWEALTH
FUND, INC.
--------------------------------------------------------------------------------
[LOGO]
Aberdeen
ASSET MANAGERS
MANAGED BY
ABERDEEN ASSET
MANAGERS (C.I.)
LIMITED
--------------------------------------------------------------------------------
Quarterly Report January 31, 2001
Highlights
o 9.0% cash distribution rate for the previous 12 months based on a share
price of $9.46 on January 31, 2001
o 88.2% invested in securities rated or deemed equivalent to AA/Aa or better
o 5.8% of total assets invested in Asian debt securities
o Introduction of a Buy-Back Program
[GRAPHIC OMITTED]
www.equitilink.com
NYSE - FCO
Managed by Aberdeen Asset Managers
(C.I.) Limited
Advised by Aberdeen Asset Management Limited
ALL AMOUNTS ARE IN US DOLLARS UNLESS
OTHERWISE STATED
letter to Shareholders
================================================================================
March 16, 2001
Dear Shareholder,
We present this Quarterly Report which covers the activities of The First
Commonwealth Fund, Inc. (the "Fund") for the three months ended January 31,
2001. Included in this report is a review of the Australian, Canadian, New
Zealand, United Kingdom and selected Asian economies and investment markets,
together with an overview of the Fund's investments prepared by the Investment
Manager, Aberdeen Asset Managers (C.I.) Limited.
High Credit Quality: 88.2% of Securities Rated or Deemed Equivalent to AA/Aa or
Better
The Fund's high credit quality has been maintained. Over 88.2% of assets
are rated AA/Aa or better, or are considered of equivalent quality by the
Investment Manager. An additional 9.4% is held in A rated securities.
Distributions: 9.0% Annual Cash Distribution Rate
Distributions to common shareholders for the year ended January 31, 2001
totaled 85.5 cents per share. Based on the share price of $9.46 on January 31,
2001, the cash distribution rate over the last 12 months was 9.0%. Since all
distributions are paid after deducting applicable withholding taxes, the
effective distribution rate may be higher for those US investors who are able to
claim a tax credit.
On March 15, 2001, the Board of Directors declared a 7.0 cent per share
monthly distribution. It is the Board's policy to provide investors with a
stable monthly distribution out of current income, supplemented by realized
capital gains and, to the extent necessary, paid-in capital. The Board intends
to review the distribution policy and the current monthly distribution rate of
7.0 cents per share on a quarterly basis, with the next scheduled review to take
place in June 2001.
Net Asset Value Performance: 6.2% Per Annum Return Since Inception
The Fund's Net Asset Value (NAV) returned 6.6% over the three months to
January 31, 2001. Since inception, the Fund's NAV has returned 6.2% per annum to
January 31, 2001. On January 31, 2001, the Fund's share price was $9.46, which
represented a discount of 11.67% to the NAV of $10.71.
Asian Investments: 5.8% of Total Assets Invested in Asian Debt Securities
As of January 31, 2001, 5.8% of the Fund's total assets were held in Asian
debt securities, a sector that presents attractive opportunities. The Fund's
ability to increase its investment in Asian markets remains constrained by
currency repatriation issues.
Board Approval of Buy-Back Program
At the special Board Meeting held on March 1, 2001, the Fund's Board of
Directors approved a buy-back program with the objective of improving
shareholder value.
Board Approval of Change to Fund Name
Following the acquisition of the Fund's investment manager and investment
advisor by Aberdeen Asset Management, PLC ("Aberdeen"), the name of the
investment manager was changed to Aberdeen Asset Managers (C.I.) Limited, and
the name of the investment advisor was changed to Aberdeen Asset Management
Limited. In order to reflect this change in ownership, the Board has approved
that the Fund's name will be changed to Aberdeen Commonwealth Income Fund, Inc.,
effective on May 1, 2001.
1
The First Commonwealth Fund, Inc.
================================================================================
Worldwide, the Aberdeen Group manages funds in excess of US$40 billion,
with offices in the U.K., U.S., Europe, Hong Kong, Australia and Singapore. With
an extensive global coverage and depth of experience, Aberdeen brings invaluable
skills and expertise to the management of the Fund.
Appointment of new Chairman and President
The Board has appointed Mr. Martin Gilbert as the new Chairman of the Fund
and Mr. Hugh Young as President, and wish to extend their sincere thanks to the
outgoing Chairman and President, Messrs. Brian M. Sherman and Laurence S.
Freedman, who have provided the Fund with their invaluable skills and expertise
since the Fund's inception.
For information about the Fund, including weekly updates of share price,
NAV, and details of recent distributions, contact Aberdeen Asset Management,
Investor Relations, by:
o calling toll free on 1-800-552-5465 or 1-212-968-8800 in the United
States,
o email to InvestorRelations@equitilinkny.com, or
o visiting the website at www.equitilink.com.
Yours sincerely,
/s/ Martin J. Gilbert [LOGO]
THE FIRST
Martin J. Gilbert COMMONWEALTH
Chairman FUND, INC.
================================================================================
Your Board's policy is to provide investors with a stable monthly
distribution out of current income, supplemented by realized capital gains and,
to the extent necessary, paid-in capital.
The Fund is subject to U.S. corporate, tax and securities laws. Under U.S.
tax accounting rules, the amount of distributable income for each fiscal period
depends on the actual exchange rates during the entire year between the U.S.
dollar and the currencies in which Fund assets are denominated and on the
aggregate gains and losses realized by the Fund during the entire year.
Therefore the exact amount of distributable income for each fiscal year
can only be determined as of the end of the Fund's fiscal year, October 31.
However, under the U.S. Investment Company Act of 1940, the Fund is
required to indicate the source of each distribution to shareholders.
The Fund estimates that distributions for the fiscal year commencing
November 1, 2000, including the distribution paid on March 9, 2001 are made up
of 64.2% net investment income, 2.5% realized capital gains and 33.3% return of
paid-in capital.
This estimated distribution composition will vary from month to month
because it may be materially impacted by future realized capital gains and
losses on securities and fluctuations in the value of currencies in which Fund
assets are denominated.
In January 2002, a Form 1099 DIV will be sent to shareholders, which will
state the amount and composition of distributions and provide information with
respect to their appropriate tax treatment.
================================================================================
2
Dividend Reinvestment and Cash Purchase Plan The First Commonwealth Fund, Inc.
================================================================================
We invite you to participate in the Fund's Dividend Reinvestment and Cash
Purchase Plan ("the Plan") which allows you to automatically reinvest your
distributions in shares of the Fund's common stock at favorable commission
rates. Distributions made under the Plan are taxable to the same extent as are
cash distributions. The Plan also enables you to make additional cash
investments in shares of at least $100 per month. Under this arrangement, the
Plan Agent will purchase shares for you on the stock exchange or otherwise on
the open market on or about the 15th of each month. As a participant in the
Plan, you will have the convenience of:
Automatic reinvestment--the Plan Agent will automatically reinvest your
distributions, allowing you to gradually grow your holdings in the Fund;
Lower costs--shares purchased on your behalf under the Plan will be at
reduced brokerage rates. Brokerage on share purchases is currently 2 cents per
share;
Convenience--the Plan Agent will hold your shares in non-certificated form
and will provide a detailed record of your holdings at the end of each
distribution period.
To request a brochure containing information on the Plan, together with an
authorization form, please contact the Plan Agent, State Street Bank & Trust
Company, P.O. Box 8200 Boston, MA 02266 or toll free on 1-800-451-6788.
3
Report of the Investment Manager The First Commonwealth Fund, Inc.
================================================================================
Share Price Performance
On January 31, 2001, the Fund's share price was $9.46, which represented a
discount of 11.67% to the NAV of $10.71. At the date of this report, the share
price was $9.38 representing a discount of 7.77% to the NAV of $10.17.
Auction Market Preferred Stock (AMPS)
The Fund's $30 million of AMPS continued to be well bid at the weekly
auctions. The average interest rate paid was 6.29% over the quarter, compared
with 6.28% for 30-day U.S. commercial paper over the same period. These rates
have decreased since the last quarter, due to the lowering of interest rates by
the U.S. Federal Reserve during the quarter.
The Fund is a leveraged Fund. Over the past year, the U.S. dollar has
strengthened against virtually all other currencies in the world. This has
resulted in a negative impact for common shareholders. However, over this
quarter, the AMPS contributed positively to the Fund's NAV as a result of the
appreciating Australian dollar.
The Manager expects that in the medium to longer term this situation will
rectify itself and that the AMPS process will be a positive contribution to Fund
performance.
4
Portfolio Composition The First Commonwealth Fund, Inc.
================================================================================
GEOGRAPHIC COMPOSITION
The table below shows the geographic composition of the Fund's total
investments as of January 31, 2001, compared with the previous quarter and
previous year.
TABLE 1: THE FIRST COMMONWEALTH FUND, INC.--GEOGRAPHIC ASSET ALLOCATION
--------------------------------------------------------------------------------
January 31, 2001 October 31, 2000 January 31, 2000
% % %
--------------------------------------------------------------------------------
Australia 24.7 24.0 24.6
--------------------------------------------------------------------------------
Canada 33.3 35.8 31.6
--------------------------------------------------------------------------------
New Zealand 3.7 3.3 5.9
--------------------------------------------------------------------------------
United Kingdom 29.4 29.4 30.5
--------------------------------------------------------------------------------
United States* 3.1 3.8 1.3
--------------------------------------------------------------------------------
Asia 5.8 3.7 6.1
--------------------------------------------------------------------------------
Total Portfolio 100.0 100.0 100.0
--------------------------------------------------------------------------------
* It is the policy of the Investment Manager to maintain a portion of the
Fund's investments in US short-term securities to cover distributions and
expenses.
CURRENCY COMPOSITION
The table below shows the currency composition of the Fund's total
investments as of January 31, 2001, compared with the previous quarter and
previous year.
TABLE 2: THE FIRST COMMONWEALTH FUND, INC.--CURRENCY ALLOCATION
--------------------------------------------------------------------------------
January 31, 2001 October 31, 2000 January 31, 2000
% % %
--------------------------------------------------------------------------------
Australian Dollar 24.7 24.0 24.6
--------------------------------------------------------------------------------
Canadian Dollar 33.3 35.8 31.6
--------------------------------------------------------------------------------
New Zealand Dollar 3.7 3.3 5.9
--------------------------------------------------------------------------------
British Pound 29.4 29.4 30.5
--------------------------------------------------------------------------------
United States Dollar* 3.1 3.8 3.6
--------------------------------------------------------------------------------
Asian Currencies 5.8 3.7 3.8
--------------------------------------------------------------------------------
Total Portfolio 100.0 100.0 100.0
--------------------------------------------------------------------------------
*Includes Asian Yankee bond investments.
5
Portfolio Composition (continued) The First Commonwealth Fund, Inc.
================================================================================
MATURITY COMPOSITION
On January 31, 2001, the average maturity of the Fund's assets was 8.0
years, decreased from 8.3 years last quarter. The Fund's duration was 5.1 years
on January 31, 2001, which remained relatively unchanged over the quarter. The
table below shows the maturity composition of the Fund's total investments as of
January 31, 2001:
TABLE 3: THE FIRST COMMONWEALTH FUND, INC.--MATURITY ANALYSIS
--------------------------------------------------------------------------------
Less than 1 year 1-5 years 5-10 years Over 10 years
% % % %
--------------------------------------------------------------------------------
Australia 19.2 33.5 37.6 9.7
--------------------------------------------------------------------------------
Canada 21.2 24.6 13.3 40.9
--------------------------------------------------------------------------------
New Zealand 50.6 24.9 24.5 --
--------------------------------------------------------------------------------
United Kingdom 9.8 25.1 26.5 38.6
--------------------------------------------------------------------------------
United States 100.0 -- -- --
--------------------------------------------------------------------------------
Asia 1.9 86.0 12.1 --
--------------------------------------------------------------------------------
Total Portfolio 20.0 29.1 23.2 27.7
--------------------------------------------------------------------------------
SECTORAL COMPOSITION
The table below shows the sectoral composition of the Fund's total
investments as of January 31, 2001:
TABLE 4: THE FIRST COMMONWEALTH FUND, INC.--SECTORAL COMPOSITION
--------------------------------------------------------------------------------
Provincial/ Utilities/
Sovereign State Supranational Corporate Cash or
Govt. Bonds Bonds Bonds Bonds Equivalent
% % % % %
--------------------------------------------------------------------------------
Australia 10.3 11.0 1.8 0.5 1.1
--------------------------------------------------------------------------------
Canada 23.0 6.4 0.5 1.4 2.0
--------------------------------------------------------------------------------
New Zealand 0.3 -- 1.4 0.7 1.3
--------------------------------------------------------------------------------
United Kingdom 21.6 -- 3.1 4.2 0.5
--------------------------------------------------------------------------------
United States -- -- -- -- 3.1
--------------------------------------------------------------------------------
Asia 3.8 0.6 0.2 0.1 1.1
--------------------------------------------------------------------------------
Total Portfolio 59.0 18.0 7.0 6.9 9.1
--------------------------------------------------------------------------------
6
Portfolio Composition (continued) The First Commonwealth Fund, Inc.
================================================================================
QUALITY OF INVESTMENTS
On January 31, 2001, 88.2% of the Fund's assets were invested in
securities where either the issue or the issuer was rated at least "AA" by
Standard & Poor's Corporation or "Aa" by Moody's Investors Service, Inc. or, if
unrated, were judged to be of equivalent quality by the Investment Manager. The
table below shows the asset quality of the Fund's portfolio as of January 31,
2001.
TABLE 5: THE FIRST COMMONWEALTH FUND, INC.--ASSET QUALITY
--------------------------------------------------------------------------------
AAA/Aaa AA/Aa A BBB/Baa BB/Ba*
% % % % %
--------------------------------------------------------------------------------
Australia 75.1 20.8 4.1 -- --
--------------------------------------------------------------------------------
Canada 6.1 81.8 12.1 -- --
--------------------------------------------------------------------------------
New Zealand 33.8 51.1 15.1 -- --
--------------------------------------------------------------------------------
United Kingdom 64.7 24.9 10.4 -- --
--------------------------------------------------------------------------------
United States 100.0 -- -- -- --
--------------------------------------------------------------------------------
Asia 26.3 0.7 14.5 58.5 --
--------------------------------------------------------------------------------
Total Portfolio 45.8 42.4 9.4 2.4 --
--------------------------------------------------------------------------------
*Below Investment Grade
7
Market Review and Outlook The First Commonwealth Fund, Inc.
================================================================================
Australia
As economic growth moderated in Australia during the second half of 2000,
the composition of growth changed, with a strong external sector taking over
from the slowing domestic interest sensitive sectors. It is likely that the
sources of growth will rotate again as export growth eases, and the housing
sector builds on recent signs of recovery. The Australian economy appears set to
maintain a more moderate pace of growth in coming months.
After maintaining steady policy since mid-2000, The Reserve Bank of
Australia (RBA) has commenced its easing cycle, cutting its benchmark interest
rate half a percentage point to 5.75%. In line with other global central banks,
the RBA has communicated a willingness to ease monetary policy in order to
sustain economic growth within a softer global economic environment. It is
anticipated that a more moderate pace of growth than the RBA has previously
expected will result in further easings in 2001.
Bonds have strengthened over the quarter, as US activity data suggested a
deceleration in GDP. The benchmark ten-year bond closed at 5.35%, from 6.19% on
October 31, 2000. Bank bill yields fell in line with official interest rates,
closing the quarter at 5.82%.
With the US Federal Reserve having already announced 100 basis points of
monetary easing, short-term interest rate differentials have now moved back in
the Australian dollar's favor. As the market anticipates a more aggressive
easing cycle in the US than domestically, it is expected that interest rate
differentials will continue to lend support to the currency in 2001. The
Australian dollar strengthened over the quarter, closing at $0.55.
The current account position has improved considerably. After peaking in
late 1999 at 6% of GDP, it is now running at a pace of only 3% of GDP. This has
been aided by robust export demand over the quarter, with a strong external
sector taking over from the slowing domestic interest sensitive sectors of
construction and consumption.
Canada
As the US economy slows, Canadian GDP growth is expected to slow below
trend during 2001. Inflation has been well contained however, with core
inflation remaining benign at the center of the Bank of Canada's 1-3% target
band. This has allowed the bank to initially ease monetary policy by 25 basis
points, and will allow for further policy easings to combat slowing production.
Canada's employment growth was recorded at 2.2% year-on-year in January.
Bonds strengthened over the quarter, with yields falling from 5.81% to 5.39%.
Cash interest rates in Canada are now in line with US rates, and as a
result some of the pressure on the Canadian dollar has been removed. The
Canadian dollar appreciated over the quarter, closing at $0.67.
8
Market Review and Outlook (concluded) The First Commonwealth Fund, Inc.
================================================================================
New Zealand
Business and consumer confidence in New Zealand have recovered sharply
over recent months, with the Reserve Bank of New Zealand's survey showing the
strongest quarterly rebound in its 31 year history. As the New Zealand bond
market anticipated cuts in interest rates, bond yields strengthened over the
period, falling from 6.69% to 6.07%. Moderate inflation pressures are expected
to result in further monetary policy tightening in 2001.
The New Zealand dollar has strengthened, closing the quarter at $0.44.
Current growth is being underpinned by a strong external sector, although this
combination is likely to shift further into the year as export growth moderates
and domestic demand improves.
United Kingdom
The impact of the earlier strength of the Sterling on the UK economy's
export and production sectors was reflected in GDP growth, which moderated
through 2000 to around its long-run trend level of 2.9%.
Inflation pressures have continued to ease in the UK, with 19 consecutive
readings below the Government's 2.5% target. The symmetry of the inflation
target has allowed The Bank of England to take swift policy action, recently
easing policy by 25 basis points, with further easings of this magnitude
expected. An impending General election may anticipate a recycling of budget
surplus via tax cuts.
The pound appreciated against the US dollar, to close at $1.46.
Asia
Domestic and Yankee ($US denominated) bonds
With slowing global activity, Asian bonds underperformed the strong rally
in global bond markets during the quarter.
Signs of economic slowdown have emerged in Asia over the quarter,
reflected in wider credit spreads through late 2000. The easing of monetary
policy by the US Federal Reserve however, allowed a sharp contraction in credit
spreads during January.
Asian Yankee bond yields fell over the quarter.
Currencies
Most Asian currencies appreciated against the US dollar, with the
exception of the South Korean Won. The Malaysian Ringgit remains pegged to the
US dollar.
9
Summary of Key Rates The First Commonwealth Fund, Inc.
================================================================================
The following table summarizes the movements of key interest rates
and currencies over the last three and twelve month periods.
================================================================================
January 31, 2001 October 31, 2000 January 31, 2000
--------------------------------------------------------------------------------
Australia
90 day bank bills 5.82% 6.43% 5.59%
10 year bonds 5.35% 6.19% 7.17%
Australian Dollar $ 0.55 $ 0.52 $ 0.64
Canada
90 day bank bills 5.12% 5.64% 5.13%
10 year bonds 5.39% 5.81% 6.54%
Canadian Dollar $ 0.67 $ 0.66 $ 0.69
New Zealand
90 day bank bills 6.41% 6.65% 5.80%
10 year bonds 6.07% 6.69% 7.46%
NZ Dollar $ 0.44 $ 0.39 $ 0.50
United Kingdom
90 day bank bills 5.58% 5.87% 5.85%
10 year bonds 4.84% 5.16% 5.74%
British Pound $ 1.46 $ 1.45 $ 1.61
South Korea
90 day bank bills 6.55% 7.11% 6.88%
5 year bonds 5.95% 7.95% 9.58%
South Korean Won* W 1257 W 1137 W 1125
Thailand
90 day bank bills 3.25% 3.00% 3.70%
10 year bonds 4.00% 5.31% 7.63%
Thai Baht* B 42.5 B 44 B 37
Philippines
90 day bank bills 11.46% 18.79% 9.75%
10 year bonds 16.30% 19.27% 14.87%
Philippines Peso* P 49 P 52 P 40
Malaysia
90 day bank bills 3.50% 3.50% 6.80%
10 year bonds 4.98% 5.68% 5.96%
Malaysian Ringgit* R 3.8 R 3.8 R 3.8
Singapore
90 day bank bills 5.12% 2.38% 1.23%
10 year bonds 4.14% 4.33% 4.47%
Singapore Dollar* S$ 1.74 S$ 1.76 S$ 1.70
US$ Yankee Bonds**
South Korea 7.23% 8.13% 8.26%
Thailand 6.37% 7.40% 8.28%
Philippines 10.68% 12.11% 9.63%
* These currencies are quoted Asian currency per US dollar. The Australian,
Canadian and New Zealand dollars and British pound are quoted US dollars
per currency.
** Sovereign issues.
Aberdeen Asset Managers (C.I.) Limited
March 2001
10
Portfolio of Investments January 31, 2001 The First Commonwealth Fund, Inc.
================================================================================
--------------------------------------------------------------------------------
Principal Amount
Local Currency(a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--90.0%
AUSTRALIA--23.3%
Government Bonds--10.2%
Commonwealth of Australia,
A$ 1,500 12.00%, 11/15/01 ................................ 864,446
3,000 10.00%, 10/15/02 ................................ 1,780,670
2,000 9.50%, 8/15/03 .................................. 1,217,138
1,000 10.00%, 2/15/06 ................................. 668,011
1,000 10.00%, 10/15/07 ................................ 696,545
2,700 8.75%, 8/15/08 .................................. 1,800,315
2,500 7.50%, 9/15/09 .................................. 1,577,199
3,500 6.50%, 5/15/13 .................................. 2,108,552
----------
10,712,876
----------
Government Banks
Export Finance & Insurance
Corporation,
3,750 11.00%, 12/29/04 ................................ 2,435,553
----------
Total Australian
government bonds
(cost US$15,882,170) ......................... 13,148,429
----------
Semi-Government Bonds--10.9%
New South Wales--2.9%
New South Wales Treasury
Corporation,
2,000 8.00%, 12/01/01 ................................. 1,120,675
1,500 7.00%, 4/01/04 .................................. 865,162
1,500 7.00%, 12/01/10 ................................. 901,980
First Australian National
Mortgage Acceptance
Corporation, Series 22,
1,421 11.40%, 12/15/01 ................................ 817,315
----------
3,705,132
----------
Queensland--4.1%
Queensland Treasury
Corporation,
3,000 8.00%, 8/14/01 .................................. 1,666,712
2,000 8.00%, 5/14/03 (Global) ......................... 1,164,616
1,000 8.00%, 9/14/07 .................................. 624,107
1,000 8.00%, 9/14/07 (Global) ......................... 624,880
500 6.00%, 7/14/09 .................................. 281,226
1,750 6.00%, 6/14/11 .................................. 983,265
----------
5,344,806
----------
South Australia--0.2%
South Australia Finance
Authority,
500 12.50%, 5/08/01 ................................. 278,470
----------
Victoria--3.2%
State Electricity Commission
of Victoria,
535 10.50%, 5/27/03 ................................. 324,931
Treasury Corporation
of Victoria,
1,000 9.00%, 6/27/05 .................................. 619,675
1,500 10.25%, 11/15/06 ................................ 1,016,875
4,000 5.50%, 9/15/10 .................................. 2,162,583
----------
4,124,064
----------
Western Australia--0.5%
Western Australia Treasury
Corporation,
1,000 10.00%, 7/15/05 ................................. 648,785
----------
Total Australian semi-
government bonds
(cost US$16,482,209) ......................... 14,101,257
----------
Supranational--0.8%
Federal National Mortgage
Association, Series EMTN,
2,000 6.375%, 8/15/07 ................................. 1,132,779
----------
Total Australian
supranational bonds
(cost US$1,027,853) .......................... 1,132,779
----------
11
Portfolio of Investments
January 31, 2001 (continued) The First Commonwealth Fund, Inc.
================================================================================
--------------------------------------------------------------------------------
Principal Amount
Local Currency(a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
Utilities--0.9%
Telstra Corp.,
A$ 2,000 11.50%, 10/15/02 ................................ 1,201,654
----------
Total Australian utility bonds
(cost US$1,745,314) .......................... 1,201,654
----------
Banking and Finance--0.2%
ING Mercantile Mutual
Bank Ltd.,
500 7.125%, 3/13/02 ................................. 278,278
----------
Total Australian banking and
finance bonds
(cost US$379,513) ............................ 278,278
----------
Corporate Non-Banks--0.3%
GE Capital Australia,
600 6.75%, 9/15/07 .................................. 344,404
----------
Total Australian corporate
non-bank bonds
(cost US$337,037) ............................ 344,404
----------
Total Australian
long-term investments
(cost US$35,854,096) ......................... 30,206,801
----------
CANADA--31.1%
Government Bonds--22.8%
Canadian Government,
C$ 5,500 7.50%, 3/01/01 .................................. 3,671,069
6,000 8.50%, 4/01/02 .................................. 4,159,112
5,000 5.25%, 9/01/03 .................................. 3,354,178
2,500 7.25%, 6/01/07 .................................. 1,837,485
2,000 5.50%, 6/01/09 .................................. 1,343,203
1,000 10.75%, 10/01/09 ................................ 904,807
3,000 10.25%, 3/15/14 ................................. 2,847,941
4,000 8.00%, 6/01/23 .................................. 3,396,172
8,000 9.00%, 6/01/25 .................................. 7,481,583
Canada (Cayman),
750 7.25%, 6/01/08 .................................. 536,486
----------
Total Canadian
government bonds
(cost US$31,642,169) ......................... 29,532,036
----------
Semi-Government Bonds--6.4%
British Columbia--1.9%
Province of British Columbia,
1,000 10.15%, 8/29/01 ................................. 684,740
2,000 9.50%, 1/09/12 .................................. 1,707,065
----------
2,391,805
----------
Montreal--0.5%
Ville de Montreal,
1,000 6.375%, 2/15/01 ................................. 666,417
----------
Ontario--0.9%
Ontario Hydro,
500 8.50%, 5/26/25 .................................. 423,746
Province of Ontario,
1,000 8.75%, 4/22/03 .................................. 716,946
----------
1,140,692
----------
Quebec--2.7%
Quebec Hydro,
1,500 7.00%, 6/01/04 .................................. 1,048,281
1,000 5.34167%, 1/28/05 (b) ........................... 664,201
2,000 9.625%, 7/15/22 ................................. 1,810,934
----------
3,523,416
----------
Toronto--0.4%
Metropolitan Municipality
of Toronto,
750 9.625%, 5/14/02 ................................. 525,040
----------
Total Canadian
semi-government bonds
(cost US$8,740,867) .......................... 8,247,370
----------
Utilities--0.5%
Bell Telephone Company
of Canada,
500 10.50%, 7/15/09 ................................. 358,051
Tokyo Electric Power Company,
500 10.50%, 6/14/01 ................................. 338,898
----------
Total Canadian utility bonds
(cost US$879,375) ............................ 696,949
----------
12
Portfolio of Investments
January 31, 2001 (continued) The First Commonwealth Fund, Inc.
================================================================================
--------------------------------------------------------------------------------
Principal Amount
Local Currency(a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
Banking and Finance--1.1%
Bank of Nova Scotia,
C$ 1,000 10.35%, 7/19/01 ................................. 681,014
Credit Local de France,
1,000 6.75%, 3/21/06 .................................. 694,922
----------
Total Canadian banking and
finance bonds
(cost US$1,582,060) .......................... 1,375,936
----------
Corporate Non-Banks--0.3%
Procter & Gamble Company,
500 10.875%, 8/15/01 ................................ 342,163
----------
Total Canadian corporate
non-bank bonds
(cost US$453,347) ............................ 342,163
----------
Total Canadian
long-term investments
(cost US$43,297,817) ......................... 40,194,454
----------
MALAYSIA--0.6%
Semi-Government Bonds--0.6%
Danamodal Nasional Berhad,
MYR 3,100 0.00%, 10/21/03 ................................. 733,083
----------
Total Malaysia
long term investments
(cost US$713,606) ............................ 733,083
----------
NEW ZEALAND--2.4%
Government Bonds--0.3%
Canadian Government,
NZ$ 1,000 6.625%, 10/03/07 ................................ 440,835
----------
Total New Zealand
government bonds
(cost US$557,544) ............................ 440,835
----------
Utilities--1.3%
Electricity Corporation of
New Zealand Ltd.,
1,750 10.00%, 10/15/01 ................................ 791,572
1,000 8.00%, 2/15/03 .................................. 457,922
TCNZ Finance Limited,
1,000 9.25%, 7/01/02 .................................. 457,200
----------
Total New Zealand
utility bonds
(cost US$2,335,301) .......................... 1,706,694
----------
Banking and Finance--0.2%
Transpower Finance Ltd.,
500 8.00%, 6/15/05 .................................. 232,901
----------
Total New Zealand banking and
finance bonds
(cost US$348,382) ............................ 232,901
----------
13
Portfolio of Investments
January 31, 2001 (continued) The First Commonwealth Fund, Inc.
================================================================================
--------------------------------------------------------------------------------
Principal Amount
Local Currency(a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
Corporate Non-Banks--0.6%
Housing New Zealand,
NZ$ 1,500 8.00%, 11/15/06 ................................. 714,073
----------
Total New Zealand corporate
non-bank bonds
(cost US$806,899) ............................ 714,073
----------
Total New Zealand
long-term investments
(cost US$4,048,126) .......................... 3,094,503
----------
PHILIPPINES--0.2%
Government Bonds--0.2%
Philippine Government,
PHP 4,000 11.875%, 6/10/01 ................................ 81,999
7,000 16.50%, 2/25/09 ................................. 146,414
----------
Total Philippine
long-term investments
(cost US$310,182) ............................ 228,413
----------
SINGAPORE--0.4%
Government Bonds--0.3%
Singapore Government,
SGD 100 3.00%, 11/01/02 ................................. 57,839
540 4.00%, 2/01/05 .................................. 319,725
50 4.00%, 3/01/07 .................................. 29,575
70 4.625%, 7/01/10 ................................. 43,112
----------
Total Singapore
government bonds
(cost US$444,928) ............................ 450,251
----------
Utilities--0.1%
Singapore Power,
250 4.60%, 9/21/07 .................................. 150,316
----------
Total Singapore corporate
non-bank bonds
(cost US$144,047) ............................ 150,316
----------
Total Singapore long-term
investments
(cost US$588,975) ............................ 600,567
----------
SOUTH KOREA--2.9%
Government Bonds--2.9%
EMBARC Ltd. Linked Note
Series 1-9,
US$ 2,000 6.0522%, 8/18/03 (b)(d) ......................... 1,635,238
----------
Government Banks
EMBARC Ltd. Linked Note
Series 1-7,
2,600 5.9535%, 6/28/02 (b)(c) ......................... 2,061,415
----------
Total Korean
long term investments
(cost US$4,054,261) .......................... 3,696,653
----------
14
Portfolio of Investments
January 31, 2001 (continued) The First Commonwealth Fund, Inc.
================================================================================
--------------------------------------------------------------------------------
Principal Amount
Local Currency(a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
THAILAND--0.6%
Government Bonds--0.4%
Thailand Government,
THB 5,000 6.125%, 4/12/02 (e) ............................. 122,579
550 8.25%, 10/14/03 ................................. 14,752
12,000 8.00%, 12/08/06 (e) ............................. 348,275
----------
Total Thailand government bonds
(cost US$491,869) ............................ 485,606
----------
Utilities--0.1%
Eastern Water Resources
Development and Management
Company Limited,
4,000 9.00%, 7/22/04 (e) .............................. 104,235
----------
Total Thailand utility bonds
(cost US$102,863) ............................ 104,235
----------
Corporate Non-Banks--0.1%
Advanced Info Service Public
Company Limited,
5,200 6.50%, 3/20/03 (e) .............................. 125,969
----------
Total Thailand corporate
non-bank bonds
(cost US$137,821) ............................ 125,969
----------
Total Thailand
long-term investments
(cost US$732,553) ............................ 715,810
----------
UNITED KINGDOM--28.5%
Government Bonds--21.5%
United Kingdom Treasury,
(pound) 1,000 7.00%, 11/06/01 ................................. 1,477,631
1,500 8.00%, 6/10/03 .................................. 2,325,222
500 5.00%, 6/07/04 .................................. 726,632
1,250 8.50%, 12/07/05 ................................. 2,088,155
1,100 7.50%, 12/07/06 ................................. 1,800,661
500 5.75%, 12/07/09 ................................. 776,971
1,500 8.00%, 9/27/13 .................................. 2,855,094
600 8.00%, 12/07/15 ................................. 1,180,995
3,000 8.00%, 6/07/21 .................................. 6,375,975
2,350 6.00%, 12/07/28 ................................. 4,307,022
Republic of Finland,
1,000 8.00%, 4/07/03 .................................. 1,529,866
1,250 10.125%, 6/22/08 ................................ 2,289,328
----------
Total United Kingdom
government bonds
(cost US$29,691,767) ......................... 27,733,552
----------
15
Portfolio of Investments
January 31, 2001 (continued) The First Commonwealth Fund, Inc.
================================================================================
--------------------------------------------------------------------------------
Principal Amount
Local Currency(a) Value
(000) Description (US$)
--------------------------------------------------------------------------------
Utilities--3.0%
British Gas PLC,
(pound) 1,400 8.875%, 7/08/08 ................................. 2,360,590
Thames Water Utilities
Finance PLC,
1,000 10.50%, 11/21/01 ................................ 1,509,877
------------
Total United Kingdom
utility bonds
(cost US$4,037,697) .......................... 3,870,467
------------
Banking and Finance--4.0%
Abbey National Treasury
Services PLC,
1,250 8.00%, 4/02/03 .................................. 1,903,031
Barclays Bank PLC,
1,000 9.875%, 5/29/49 ................................. 1,717,652
Lloyds Bank PLC,
500 7.375%, 3/11/04 ................................. 758,221
Prudential Finance B.V.,
500 9.375%, 6/04/07 ................................. 849,634
------------
Total United Kingdom banking
and finance bonds
(cost US$5,044,856) .......................... 5,228,538
------------
Total United Kingdom
long-term investments
(cost US$38,774,320) ......................... 36,832,557
------------
Total long-term investments
(cost US$128,373,936) ........................ 116,302,841
------------
SHORT-TERM INVESTMENTS--8.1%
Australia--1.0%
Banque Nationale de Paris
Fixed Deposit,
A$ 2,424 5.75%, 2/01/01
(cost US$1,327,993) .......................... 1,327,993
------------
Canada--2.0%
State Street Bank and Trust
Company Time Deposit,
C$ 3,960 5.35%, 2/07/01
(cost US$2,642,615) .......................... 2,638,740
------------
New Zealand--1.3%
State Street Bank and Trust
Company Time Deposit,
NZ$ 3,680 5.95%, 2/07/01
(cost US$1,613,484) .......................... 1,623,421
------------
United Kingdom--0.6%
State Street Bank and Trust
Company Fixed Deposit,
(pound) 491 5.8125%, 2/07/01
(cost US$717,043) ............................ 717,043
------------
United States--3.2%
US$ 4,075 Repurchase Agreement, State
Street Bank and Trust
Company, 5.45% dated 1/31/01,
due 02/01/01 in the amount
of $4,075,617 (collateralized
by $4,065,000 U.S. Treasury
Notes, 5.50% due 05/31/03;
value $4,164,633) ............................ 4,075,000
35 HSBC CNY Linked
Certificate of Deposit
0.00%, 4/23/01 ............................... 33,497
------------
Total United States
Short Term Investments
(cost US$4,108,338) .......................... 4,108,497
------------
Total short-term investments
(cost US$10,409,473) ......................... 10,415,694
------------
Total Investments--98.1%
(cost US$138,783,409) ........................ 126,718,535
Unrealized appreciation
on forward foreign
currency exchange
contracts--0.0% (f) .......................... 29,753
Other assets in excess of
liabilities--1.9% ............................ 2,495,662
------------
Total Net Assets--100.0% ........................ $129,243,950
============
16
Portfolio of Investments
January 31, 2001 (concluded) The First Commonwealth Fund, Inc.
================================================================================
(a) A$--Australian dollar
C$--Canadian dollar
NZ$--New Zealand dollar
KRW--South Korean Won
MYR--Malaysian Ringgit
PHP--Philippine peso
SGD--Singapore dollar
THB--Thai Baht
(pound)--British pound
US$--United States dollar
(b) Coupon changes periodically upon a predetermined schedule. Stated interest
rate in effect at January 31, 2001.
(c) Value of security is linked to the value of Korean Development Bank 7.01%,
6/26/02 and the movement of the South Korean Won.
(d) Value of security is linked to the value of Government of Korea 7.70%
8/16/03 and the movement of the South Korean Won.
(e) Securities pledged as collateral for the forward currency exchange
contracts.
(f) Forward foreign currency exchange contracts entered into as of January 31,
2001 were as follows:
--------------------------------------------------------------------------------------------------------
Purchases
Net Unrealized
Contracts to Receive In exchange for Settlement Date Value Depreciation
--------------------------------------------------------------------------------------------------------
KRW 347,220,000 US$270,000 02/20/01 US$276,361 $ 6,361
PHP 18,637,500 US$350,000 05/24/01 US$370,387 20,387
THB 11,032,500 US$250,000 02/22/01 US$260,262 10,262
THB 6,583,500 US$150,000 02/26/01 US$155,308 5,308
THB 6,139,000 US$140,000 02/26/01 US$144,822 4,822
THB 3,484,000 US$ 80,000 03/15/01 US$ 82,208 2,208
--------
$ 49,348
--------
--------------------------------------------------------------------------------------------------------
Sales
Net Unrealized
Contracts to Deliver In exchange for Settlement Date Value Appreciation
--------------------------------------------------------------------------------------------------------
THB 11,000,000 US$250,000 02/22/01 US$259,495 $ (9,495)
THB 6,534,000 US$150,000 02/26/01 US$154,140 (4,140)
THB 6,104,000 US$140,000 02/26/01 US$143,997 (3,997)
THB 3,473,600 US$ 80,000 03/15/01 US$ 81,963 (1,963)
--------
$(19,595)
--------
Total $ 29,753
========
17
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Directors Officers
================================================================================
Martin J. Gilbert, Chairman Hugh Young, President
David Lindsay Elsum Ouma Sananikone,
Laurence S. Freedman Vice President and
Neville J. Miles Chief Investment Officer
William J. Potter David Manor, Treasurer
Sir David Rowe-Ham Roy M. Randall, Secretary
Peter D. Sacks Michael Karagianis, Assistant Vice President
Anton E. Schrafl Barry G. Sechos, Assistant Treasurer
E. Duff Scott Allan S. Mostoff, Assistant Secretary
John T. Sheehy Margaret A. Bancroft, Assistant Secretary
Warren C. Smith Sander M. Bieber, Assistant Secretary
Hugh Young
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase, from time to time, shares of its
common stock in the open market.
[RECYCLE LOGO] Printed on post-consumer recycled paper
19
INVESTMENT MANAGER
Aberdeen Asset Managers (C.I.) Limited
P.O. Box 578, 17 Bond Street
St. Helier, Jersey JE45XB
Channel Islands
INVESTMENT ADVISOR
Aberdeen Asset Management Limited
Level 3, 190 George Street
Sydney, NSW 2000, Australia
CONSULTANT
CIBC World Markets, Inc.
BCE Place, Canada Trust Tower
P.O. Box 500
Toronto, Ontario, M5J 2S8
Canada
ADMINISTRATOR
Princeton Administrators, L.P.
Box 9095
Princeton, New Jersey 08543-9095
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
1 Heritage Drive
Boston, Massachusetts 02171
AUCTION AGENT
Deutsche Bank
Four Albany Street
New York, New York 10006
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
LEGAL COUNSEL
Dechert
1775 Eye Street, N.W.
Washington, DC 20006
Stikeman, Elliott
Level 40 Chifley Tower
2 Chifley Square
Sydney, NSW 2000, Australia
INVESTOR RELATIONS
Aberdeen Asset Management
45 Broadway, 31st Floor
New York, New York 10006
1-800-522-5454 or 1-212-968-8800
InvestorRelations@equitilinkny.com
The common shares of The First Commonwealth Fund, Inc. are traded on the New
York Stock Exchange under the symbol "FCO." Information about the Fund's net
asset value and market price is published weekly in Barron's and in the Monday
edition of The Wall Street Journal.
This report, including the financial information herein, is transmitted to the
shareholders of The First Commonwealth Fund, Inc. for their general information
only. It does not have regard to the specific investment objectives, financial
situation and the particular needs of any specific person. Past performance is
no guarantee of future returns.