Quarter ended July 31, 2021 Quarterly Commentary

Aberdeen Asia-Pacific Income Investment Company (FAP)

Company performance In EM debt outside Asia, the Company’s lower-yielding Asian local currency markets Aberdeen Asia-Pacific Income Investment relatively higher allocations to Egypt, Mexico, was a detractor. The overweight to the Indian Company returned 0.9%1 on a net value basis Ukraine and Uruguay enhanced rupee had a positive impact on the for the three-month period ended July 31, performance. Additionally, avoiding local Company’s performance as the currency 2021, underperforming the 1.7% return of its markets such as Peru and Chile, where appreciated against the Canadian dollar. blended benchmark.2 The Company’s currencies depreciated significantly against Conversely, the hedging of the U.S. dollar overweight exposure to U.S. dollar-denomi- the U.S. dollar, also contributed to the exposures to the Chinese yuan, South nated emerging market (EM) and Asian debt Company’s performance. Conversely, the Korean won and Thai baht weighed on the contributed positively to performance Company’s relatively lower exposure to Company’s performance for the quarter. Brazil, Russia and South Africa, as well as Both U.S.-dollar denominated invest- hard-currency positions in Belarus, Pakistan ment-grade and high-yield quasi-govern- and El Salvador, hampered performance. ment holdings in Asia benefited the Company’s performance for the quarter. Overweight allocations to higher-yielding However, the exposure to China real estate bonds in India, Indonesia and Malaysia weighed on performance as the sector came contributed positively to the company’s under pressure from regulators and bond performance over the reporting period, defaults by several companies. although the underweight exposure to the

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 The Company’s blended benchmark comprises 50% Markit iBoxx Asian Local Bond Index, 25% J.P. Morgan Asia Credit Diversified Index, 15% J.P. Morgan GBI Emerging Market Global Diversified Index and 10% Bloomberg Ausbond Composite Index. The Markit iBoxx Asian USD Bond Index family (“iBoxx ADBI”) tracks the performance of U.S. dollar-denominated bonds from Asian based issuers. The J.P. Morgan Asia Credit Diversified Index tracks the performance of actively traded U.S.-dollar denominated debt instruments in the Asia ex- Japan region. The J.P. Morgan GBI Emerging Markets Global Diversified Index tracks the performance of liquid, fixed-rate, domestic-currency government bonds. The Bloomberg AusBond Composite Index tracks the performance of the Australian debt market. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. 01 of 06 Aberdeen Asia-Pacific Income Investment Company (FAP) 02 of 06 Aberdeen Asia-Pacific Income Investment Company (FAP)

Total Returns as of July 31, 2021* NAV Cumulative Annualized Market price Cumulative Annualized Since inception 847.6 6.7 Since inception 653.7 5.9 (June 1986) Ten years 36.5 3.2 Ten years 7.7 0.7 Five years 9.1 1.8 Five years 3.8 0.7 Three years 9.9 3.2 Three years 10.6 3.4 One year 4.0 One year 19.8 * 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 data quoted. NAV return data includes investment management fees, custodial charges, bank loan expenses and administrative fees (such as Director and legal fees) and assumes the reinvestment of all distributions. The Fund is subject to investment risk, including the possible loss of principal. Returns for periods less than one year are not annualized.

Top Ten Holdings as of July 31, 2021** Holding % Indonesia Treasury Bond 3.1 Indonesian Government Bond, Standard Chartered Credit Linked Note 2.7 Indonesian Government Bond, JP Morgan Chase Credit Linked Note 2.6 Malaysia Government Bond 2.4 Indonesia Treasury Bond 2.4 Malaysia Government Bond 2.1 India Government Bond 2.1 Uruguay Government Bond 2.0 Pakistan Investment Bond 2.0 Mexican Bonos 2.0 Total 23.4 ** Holdings are subject to change and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities shown. The top ten holdings are reported by share class. Certain companies listed may be held in additional share classes not listed above. 03 of 06 Aberdeen Asia-Pacific Income Investment Company (FAP)

Market review Thailand continued to contract, though at a to tighter social-distancing measures in Most Asian local-currency government bond slower pace. In India’s manufacturing PMI Singapore, and fostered caution among yields fell during the three-month period rebounded to above 50 (indicating investors; however, ample liquidity ended July 31, 2021, in line with U.S. expansion), while the services PMI remained supported the front end of the yield curve. Treasuries. In the U.S., short-dated bond below 50, though improving. China, Hong Meanwhile, long-term bond yields fell in both yields rose as the U.S. Federal Reserve (Fed) Kong, Korea and Singapore remained in Korea and Singapore, in line with turned somewhat hawkish amid inflation expansionary territory. In Korea, the spike in U.S. Treasuries. concerns. The Fed also suggested a potential infections also hampered consumer and The fixed-income market in India saw mixed rollback in bond purchases. Prospects of business confidence. On a quarterly basis, performance during the reporting period, higher interest rates and a strengthening GDP in China, Hong Kong and Korea with two- and five-year bond yields ending U.S. dollar weighed on investor sentiment at increased, but contracted in Singapore. lower, while yields rose in the 10-year and the beginning of the reporting period. However, retail sales were robust across all longer segments of the curve. Bond yields However, subsequent reassuring comments four countries, despite fresh mobility initially fell due to waning growth from Fed Chair Jerome Powell that restrictions. Inflation was more mixed across expectations as the devastating second wave interest-rate hikes are unlikely to happen the region. Inflation rates climbed in of Covid-19 infections in the previous quarter anytime soon helped calm some of the Indonesia, Korea and the Philippines, were resulted in partial lockdowns across parts of jitters. The 10-year U.S. Treasury yield fell 40 steady in Singapore, and eased in China, the country. As the situation improved, yields basis points (bps) to 1.2% during the quarter. Hong Kong, Malaysia and Thailand. in the short end of the curve moved higher Lower-than-expected U.S. gross domestic Elsewhere, the Organization of the on expectations of policy normalization, product (GDP) growth also dampened Petroleum Exporting Countries (OPEC) five- to nine-year yields were little changed, investor sentiment. Across the Atlantic, agreed to increase production in the second while the longer end of the curve European Central Bank (ECB) monetary half of the year due to increasing demand. experienced rising yields. Inflation stayed policy also remained supportive over Asia-Pacific local-currency bonds elevated at 6.3%. Nevertheless, the Reserve the period. Yields across most Asian local-currency Bank of India (RBI) reaffirmed that the price On the geopolitical front, tensions between government bonds fell during the reporting pressures were transitory, and remained the U.S. and China continued to escalate period, as Covid-19 related concerns, along focused on growth. after China banned imports of solar panels with a slower pace of inoculation across In Southeast Asia, renewed Covid-19 from China’s Xinjiang province over alleged several countries, hurt investor sentiment. outbreaks kept investors jittery. Bond yields human rights violations. Meanwhile, U.S. fell across most markets and tenors, with the President Joe Biden revoked the ban on Local-currency bond yields in China moved short-end outperforming in Indonesia, TikTok and WeChat, but planned to lower over the quarter as the government’s Malaysia and the Philippines. Central banks investigate software from foreign entities regulatory actions in the education, property held rates and stayed accommodative due to that may pose a threat to American data and technology sectors dented investor risk subdued GDP growth in the region. instead. Elsewhere, oil prices initially appetite. Meanwhile, in July, the People’s Additionally, political uncertainties further bounced on optimism of businesses and Bank of China (PBOC) cut the reserve hurt risk sentiment in Malaysia and Thailand. travel reopening, but fell towards the end of requirement ratio (RRR) in an effort to Separately, in Malaysia, yields of 5-year and the quarter as the spread of new Covid-19 stabilize the market, injecting 1 trillion yuan 10-year bonds rose on supply pressure. variants raised concerns over the sustainabil- (C$194.5 billion) in liquidity. This further ity of still-nascent economic growth. Other boosted the bond market, which rallied commodities continued their bounce, with towards the end of the quarter. The some, such as copper, reaching new highs. three- and 10-year yields fell by 39.5 bps and 32 bps, respectively, over the The resurgence of Covid-19 across most reporting period. countries in Asia, along with the resultant stricter social distancing measures, Korea was among the strongest-performing dampened the economic growth outlook. markets on a total return basis for the This was reflected in further weakening of quarter despite yields rising in the front end leading manufacturing indicators of the curve, as the Bank of Korea held its (Purchasing Managers indexes - PMI) in July, benchmark interest rate steady but turned albeit with the majority still above the hawkish amid stable economic conditions. expansionary level. Indonesia fell to 40 The market now expects three rates hikes by (indicating contraction), while Malaysia and mid-2022. An increase in Covid-19 cases led 04 of 06 Aberdeen Asia-Pacific Income Investment Company (FAP)

Asian currencies – Canadian dollar issues were eventually resolved. Separately, investment-grade assets outperformed high The performance of Asian currencies was the property developer indicated that it yield. The International Monetary Fund 6 mixed against the Canadian dollar during the would not declare a special dividend. China agreed to the largest special-drawing-rights quarter. The Thai baht and the Philippines Evergrande also sold another stake in its allocation in its history, at US$650 billion, of peso weakened by 3.8% and 2.3%, associate company, HengTen Networks, to a which approximately 42% will go to EMs, with respectively, versus the Canadian Dollar, subsidiary of internet giant Tencent Holdings, Zambia, Bahrain and Ecuador among the hampered by macroeconomic weakness and which helped to calm the markets, albeit main beneficiaries. Cameroon successfully uncertainty. The Korean won depreciated by temporarily. The only bright spot was tendered most of its outstanding U.S.-dollar 1.8% as investor risk appetite oscillated Huarong Asset Management (which the Fund bonds maturing in 2025 with the proceeds globally. However, the currency recouped holds). The company’s bonds rallied from a new eurobond issuance, at a 5.95% some of the losses after Korea’s central bank following its announcement that it would be yield. In Suriname, bond restructuring hinted at tightening monetary policy. calling its perpetual bonds in September of negotiations turned sour, with bondholders Conversely, the Chinese yuan gained 1.7% this year, which was seen as a signal of triggering a termination clause, making against the Canadian dollar during the robust liquidity. At the start of August, payments that had been deferred until July reporting period. The PBOC increased the Huarong said that it would exit and 30 immediately due. In local-currency debt, reserve requirement ratio for foreign restructure non-core units to focus on its EM bonds and currencies saw positive currency deposits by 2% to 7% in a bid to core business. Elsewhere, bond prices for performance in May but declined over June strengthen its liquidity management of local-government financing vehicles (LGFVs) and July. Bond yields in Brazil rose after its foreign currencies in financial institutions. recovered after Yunnan’s provincial central bank increased its benchmark Selic This supported the Chinese yuan, which government affirmed that it would not allow rate to pre-pandemic levels, bringing the outperformed other regional currencies for any of its LGFVs to default. We took total interest-rate hikes to 225 bps for the the period. advantage of this to invest in LGFV Gansu year to date. In early August, the central bank Provincial Highway Aviation Tourism hiked the rate by another 100 bps to 5.25% U.S. dollar-denominated Asian credit Investment Group, which builds highways. amid high inflation. Similarly, in Mexico, Asian credit posted positive returns during yields in the front end of the curve rose after In the primary market, Asian the quarter, due partly to lower U.S. Treasury the central bank increased its benchmark U.S.-dollar-denominated bond supply yields. A flurry of new regulations, including interest rate by 25 bps in June and August increased significantly over the reporting stricter rules for the education sector and and the nation’s GDP increased in the second period, driven by financials, invest- new measures covering food delivery riders’ quarter. In Colombia, credit rating agency ment-grade corporates and sovereigns. rights, sparked a broad-based selloff. Standard & Poor’s (S&P) downgraded the High-yield bond supply declined due to the Investors’ fears of tighter regulations also country’s credit rating below weak investor sentiment resulting from 7 hurt other sectors, especially technology, investment-grade, to BB+ from BBB-. Evergrande’s struggles. where the variable interest entity3 structure In Chile, increased risk of institutional deterioration and political pressure for fiscal – mentioned in the new education policy – is Emerging markets ex-Asia bonds widely used. The combination of these new spending drove subdued performance over Yields in EMs outside Asia were mixed. In rules, along with tightening policy, also the reporting period. hard-currency debt, the JP Morgan EMBI weighed on real estate names. Negative Global Diversified Index4 returned 2.2%, news continued to pressure China largely driven by the performance of U.S. Evergrande, a Fund holding, including Treasuries, with spreads widening by 16 bps overdue commercial payments and to 356 bps over comparable-duration5 U.S. suspension of loans, even though both Treasuries. By credit quality,

3 A variable interest entity refers to a legal business structure in which an investor has a controlling interest despite not having a majority of voting rights. 4 The J.P. Morgan EMBI Global Diversified Index is a comprehensive global local emerging markets index comprising liquid, fixed‐rate, domestic currency government bonds. 5 Duration is an estimate of bond price sensitivity to changes in interest rates. The higher the duration, the greater the change (i.e., higher risk) in relation to interest-rate movements. 6 Special drawing rights (SDR) refer to an international type of monetary reserve currency created by the International Monetary Fund in 1969 that operates as a supplement to the existing money reserves of member countries. 7 S&P Global Ratings is an independent, unaffiliated research company that rates fixed income securities on the basis of risk and the borrower’s ability to make interest payments. S&P assigns ratings ranging from AAA (reliable and stable) to D (high risk) to communicate the agency’s opinion of relative level of credit risk. 05 of 06 Aberdeen Asia-Pacific Income Investment Company (FAP)

Emerging markets ex-Asia currencies territory with caution, we believe that EM currency performance was also mixed valuations are compelling for BBB to BB against the Canadian dollar over the rated companies. Meanwhile, India reporting period. The Brazilian real and the recovered well following the Covid-19 crisis Mexican peso advanced by 5.9% and 3.5%, but the market recently lost ground again respectively, given the hawkish stance by the due to Covid-19 risks. In frontier markets, countries’ central banks. Rising oil prices and Pakistan has demonstrated its easy access to interest-rate hikes supported the Russian financing, which has supported continued ruble, which rose 4.4% versus the Canadian growth in reserves. However, valuations dollar. Conversely, the Peruvian sol and have fallen to attractive levels during this Chilean peso declined due to political risk-off period. Given the severity of uncertainties. downside reflected in prices, we believe the risk-reward ratio is compelling, and we are Outlook selectively adding to the Fund’s exposure to U.S. Treasury yields moved lower during the Pakistan. reporting period, as new Covid-19 variants In our view, currencies are likely to remain raised investors’ concerns over economic range-bound as the path towards a reopening, hurting investor sentiment on post-Covid-19 world remains uncertain. economic growth. In Asia, sentiment was Nevertheless, with global trade resilience, weak as most emerging Asian countries were many we think that Asian currencies are now affected by the resurgence in infections and trading at attractive valuations. Across the subsequent mobility restrictions. This was EMs including in Asia, we anticipate that reflected in deteriorating leading fiscal and monetary policy will remain manufacturing indicators in July, albeit with supportive. Although policymakers are most remaining in expansion. beginning to communicate normalization Chinese credit markets have borne the brunt plans, we feel that near-term Covid-19 of tighter liquidity and regulatory conditions challenges will dictate the timing and pace of but, in our view, selectively offer appealing any action. value, particularly B rated corporate bonds, We believe that proof of the “transitory” at a time when many global credit markets nature of inflation would be a trigger for are priced to perfection. Extreme levels of robust asset performance. The risks to our risk aversion in this part of the market have outlook include a hawkish U.S. Federal caused significant dislocation in spreads. Reserve leading to rising U.S. Treasury yields China’s government has allowed defaults to and sustained U.S.-dollar strength, as well as occur in an effort to get its domestic capital the risk of economies reopening too soon markets to price risks more efficiently as the and triggering a global acceleration in country opens up to foreign investors. The Covid-19 infection rates. cumulative effect of this chain of events has triggered higher risk aversion by Chinese investors, notably across B rated property developers. While we need to tread B rated Visit us online aberdeenstandard.com

IMPORTANT INFORMATION PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Closed-end funds are traded on the secondary market through one of the stock exchanges. The Company’s 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 Company’s portfolio. The net asset value (NAV) is the value of an entity’s assets less the value of its liabilities. The market price is the current price at which an asset can be bought or sold. There is no assurance that the Company will achieve its investment objective. Past performance does not guarantee future results. Fixed income securities are subject to certain risks including, but not limited to: interest rate (changes in interest rates may cause a decline in the market value of an investment), credit (changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral), prepayment (debt issuers may repay or refinance their loans or obligations earlier than anticipated), and extension (principal repayments may not occur as quickly as anticipated, causing the expected maturity of a security to increase). International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods; these risks are generally heightened for emerging market investments. Concentrating investments in the Asia-Pacific region subjects the Company to more volatility and greater risk of loss than geographically diverse funds. The above is for informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the investments mentioned herein. Aberdeen Standard Investments (ASI) does not warrant the accuracy, adequacy or completeness of the information and materials contained in this document and expressly disclaims liability for errors or omissions in such information and materials. Some of the information in this document may contain projections or other forward looking statements regarding future events or future financial performance of countries, markets or companies. These statements are only predictions and actual events or results may differ materially. The reader must make his/her own assessment of the relevance, accuracy and adequacy of the information contained in this document, and make such independent investigations, as he/she may consider necessary or appropriate for the purpose of such assessment. Any opinion or estimate contained in this document is made on a general basis and is not to be relied on by the reader as advice. Neither ASI nor any of its agents have given any consideration to nor have they made any investigation of the investment objectives, financial situation or particular need of the reader, any specific person or for any loss arising whether directly or indirectly as a result of the reader, any person or group of persons acting on any information, opinion or estimate contained in this document. ASI reserves the right to make changes and corrections to its opinions expressed in this document at any time, without notice. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the reader, any person or group of persons acting on any information, opinion or estimate contained in this document. Aberdeen Standard Investments (“ASI”) is the marketing name in Canada for Aberdeen Standard Investments (Canada) Limited, Aberdeen Standard Investments Luxembourg SA, Standard Life Investments Private Capital Ltd, SL Capital Partners LLP, Standard Life Investments Limited, Aberdeen Standard Alternative Funds Limited, and Aberdeen Capital Management LLC. Aberdeen Standard Investments (Canada) Limited, is registered as a Portfolio Manager and Exempt Market Dealer in all provinces and territories of Canada as well as an Investment Fund Manager in the provinces of Ontario, Quebec, and Newfoundland and Labrador. ©2021 This material is owned by Standard Life Aberdeen or one of its affiliates. This material is the property of Aberdeen and the content cannot be reproduced or used in any way without our authorization.

06 of 06 Aberdeen Asia-Pacific Income Investment Company (FAP) Ref: US-030921-156471-12 36899-0921-PHL