Gabelli Equity Trust Inc.

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        811-04700            

                    The Gabelli Equity Trust Inc.                    

(Exact name of registrant as specified in charter)

One Corporate Center

                         Rye, New York 10580-1422                        

(Address of principal executive offices) (Zip code)

Bruce N. Alpert

Gabelli Funds, LLC

One Corporate Center

                    Rye, New York 10580-1422                    

(Name and address of agent for service)

Registrant’s telephone number, including area code:  1-800-422-3554

Date of fiscal year end:  December 31

Date of reporting period:  June 30, 2014

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

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


Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.


The Gabelli Equity Trust Inc.

Semiannual Report — June 30, 2014

 

(Y)our Portfolio Management Team

 

LOGO

To Our Shareholders,

For the six months ended June 30, 2014, the net asset value (“NAV”) total return of The Gabelli Equity Trust Inc. (the “Fund”) was 5.4%, compared with total returns of 7.1% and 2.7% for the Standard & Poor’s (“S&P”) 500 Index and the Dow Jones Industrial Average, respectively. The total return for the Fund’s publicly traded shares was 1.2%. The Fund’s NAV per share was $7.31, while the price of the publicly traded shares closed at $7.53 on the New York Stock Exchange (“NYSE”). See below for additional performance information.

Enclosed are the schedule of investments and financial statements as of June 30, 2014.

Comparative Results

 

Average Annual Returns through June 30, 2014 (a) (Unaudited)
      Year to
Date
  1 Year   5 Year   10 Year   20 Year   25 Year  

Since

Inception
(08/21/86)

Gabelli Equity Trust
NAV Total Return (b)

       5.44 %       26.98 %       24.77 %       11.15 %       10.94 %       10.19 %       11.44%  

Investment Total Return (c)

       1.18         23.55         22.53         11.28         10.52         10.53         11.21      

S&P 500 Index

       7.14         24.61         18.83         7.78         9.79         9.89         10.13(d)  

Dow Jones Industrial Average

       2.66         15.46         17.76         7.62         10.49         10.75         11.01(d)  

Nasdaq Composite Index

       6.18         30.98         20.57         9.20         9.58         9.71           9.17(d)  

 

(a)

 

Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are sold, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Performance returns for periods of less than one year are not annualized. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The Dow Jones Industrial Average is an unmanaged index of 30 large capitalization stocks. The S&P 500 and the Nasdaq Composite Indices are unmanaged indicators of stock market performance. Dividends are considered reinvested except for the Nasdaq Composite Index. You cannot invest directly in an index.

(b)

 

Total returns and average annual returns reflect changes in the NAV per share, reinvestment of distributions at NAV on the ex-dividend date, adjustments for rights offerings, spin-offs, and taxes paid on undistributed long term capital gains and are net of expenses. Since inception return is based on an initial NAV of $9.34.

(c)

 

Total returns and average annual returns reflect changes in closing market values on the NYSE, reinvestment of distributions, and adjustments for rights offerings, spin-offs, and taxes paid on undistributed long term capital gains. Since inception return is based on an initial offering price of $10.00.

(d)

 

From August 31, 1986, the date closest to the Fund’s inception for which data is available.


Summary of Portfolio Holdings (Unaudited)

The following table presents portfolio holdings as a percent of total investments as of June 30, 2014:

The Gabelli Equity Trust Inc.

 

Food and Beverage

     11.3%   

Financial Services

     8.4%   

Cable and Satellite

     8.0%   

Entertainment

     7.8%   

Equipment and Supplies

     6.7%   

Diversified Industrial

     5.6%   

Energy and Utilities

     5.6%   

Health Care

     4.3%   

Automotive: Parts and Accessories

     4.3%   

Consumer Products

     3.8%   

Consumer Services

     3.2%   

Telecommunications

     3.2%   

Retail

     3.1%   

Aerospace and Defense

     2.6%   

Business Services

     2.5%   

Aviation: Parts and Services

     2.5%   

Machinery

     2.4%   

Specialty Chemicals

     1.9%   

Hotels and Gaming

     1.8%   

Broadcasting

     1.7%   

Publishing

     1.4

Electronics

     1.1

Environmental Services

     0.9

Wireless Communications

     0.9

Computer Software and Services

     0.7

Agriculture

     0.7

Communications Equipment

     0.7

Automotive

     0.6

Metals and Mining

     0.6

Transportation

     0.5

Real Estate

     0.4

Closed-End Funds

     0.3

Building and Construction

     0.2

Real Estate Investment Trusts

     0.1

Computer Hardware

     0.1

Manufactured Housing and
Recreational Vehicles

     0.1
  

 

 

 
         100.0
  

 

 

 
 

 

The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554). The Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.

Proxy Voting

The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 of each year. A description of the Fund’s proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.

 

2


The Gabelli Equity Trust Inc.

Portfolio Changes — Quarter Ended June 30, 2014 (Unaudited)

 

 

 

     Shares     Ownership at
June 30,
2014
 

NET PURCHASES

  

Common Stocks

  

Alere Inc.

     3,000        10,000   

Aramark

     7,500        20,500   

Blyth Inc.

     15,200        112,200   

Cable & Wireless Communications plc

     2,150,000        3,000,000   

Chemtura Corp.

     10,000        15,000   

Chr Hansen Holding A/S

     2,000        2,000   

Cliffs Natural Resources Inc.

     12,000        12,000   

ConAgra Foods Inc.

     20,000        80,000   

Cullen/Frost Bankers Inc.

     10,000        10,000   

Danone SA(a)

     5,975        210,475   

DaVita HealthCare Partners Inc.

     2,000        15,000   

Deutsche Bank AG

     2,777        12,777   

Donaldson Co. Inc.

     2,000        374,800   

Energizer Holdings Inc.

     5,500        95,500   

Express Scripts Holding Co.

     1,000        25,000   

Forest City Enterprises Inc., Cl. A

     3,000        35,000   

General Mills Inc.

     4,000        53,000   

Hospira Inc.

     200        30,000   

Intelsat SA

     3,000        15,000   

International Flavors & Fragrances Inc.

     4,000        69,000   

International Game Technology

     40,000        90,000   

Janus Capital Group Inc.

     1,000        266,000   

Koninklijke Philips NV(b)

     1,102        33,087   

Layne Christensen Co.

     3,000        23,000   

Liberty Ventures, Cl. A(c)

     15,451        30,902   

Loews Corp.

     4,000        14,000   

Millicom International Cellular SA, SDR

     5,000        22,000   

Murphy USA Inc.

     2,501        20,000   

Pentair plc(d)

     35,000        35,000   

Rayonier Advanced Materials Inc.(e)

     9,667        9,667   

Rolls-Royce Holdings plc, Cl. C(f)

     160,800,000        160,800,000   

The Hillshire Brands Co.

     92,800        330,000   

The New Germany Fund Inc.

     3,898        96,529   

Time Inc.(g)

     18,850        18,850   

Time Warner Inc.

     1,600        186,800   

Trinity Industries Inc.(c)

     28,200        56,400   

Vodafone Group plc, ADR

     3,300        41,482   

Weatherford International plc(h)

     35,000        35,000   

Whole Foods Market Inc.

     3,000        38,000   

NET SALES

  

Common Stocks

  

AMC Networks Inc., Cl. A

     (2,800     270,200   
     Shares     Ownership at
June 30,
2014
 

American Express Co.

     (3,000     421,000   

Argo Group International Holdings Ltd.

     (700     12,500   

Barrick Gold Corp.

     (600     54,000   

Beam Inc.(i)

     (173,200       

Becton, Dickinson and Co.

     (300     12,500   

BorgWarner Inc.

     (1,000     116,600   

BT Group plc, Cl. A

     (11,600     988,400   

Cisco Systems Inc.

     (1,400     54,000   

Citigroup Inc.

     (8,500     98,000   

Covidien plc

     (1,800     47,200   

Crane Co.

     (3,500     198,200   

Curtiss-Wright Corp.

     (8,000     270,300   

Deere & Co.

     (2,000     320,000   

DIRECTV

     (19,000     374,200   

Discovery Communications Inc., Cl. A

     (1,000     78,600   

Flowserve Corp.

     (2,600     274,600   

Gray Television Inc.

     (1,000     25,000   

Honeywell International Inc.

     (4,000     359,000   

HSN Inc.

     (800     25,100   

Huntsman Corp.

     (16,000     8,000   

IAC/InterActiveCorp.

     (1,000     45,000   

Ingredion Inc.

     (800     17,000   

Intel Corp.

     (19,000     60,000   

Leucadia National Corp.

     (3,200     95,900   

Liberty Media Corp., Cl. A

     (1,000     89,000   

LSI Corp.(j)

     (45,000       

Marathon Oil Corp.

     (6,000     4,000   

Marathon Petroleum Corp.

     (2,000     4,000   

MasterCard Inc., Cl. A

     (5,000     342,000   

Modine Manufacturing Co.

     (2,000     198,000   

Monster Worldwide Inc.

     (10,000       

Newmont Mining Corp.

     (800     143,600   

Niko Resources Ltd.

     (1,000     1,000   

Novartis AG, ADR

     (1,600     88,200   

Oi SA, ADR

     (20,000     309,500   

Palo Alto Networks Inc.

     (1,500       

Park-Ohio Holdings Corp.

     (1,000     89,000   

Pentair Ltd.(d)

     (37,400       

Phillips 66

     (35,000     12,200   

Post Holdings Inc.

     (600     42,300   

Precision Castparts Corp.

     (2,500     78,500   

Reckitt Benckiser Group plc

     (4,100     46,800   

Rollins Inc.

     (3,000     1,210,000   

Skyline Corp.

     (2,000     53,000   

Spectra Energy Corp.

     (2,200     108,900   

Swedish Match AB

     (10,000     813,800   

The Charles Schwab Corp.

     (5,000     20,000   
 

 

See accompanying notes to schedule of investments.

 

3


The Gabelli Equity Trust Inc.

Portfolio Changes (Continued) — Quarter Ended June 30, 2014 (Unaudited)

 

 

 

     Shares     Ownership at
June 30,
2014
 

The Coca-Cola Co.

     (10,000     122,600   

The St. Joe Co.

     (1,000     188,500   

The Timken Co.

     (15,000     85,000   

The WhiteWave Foods Co.

     (1,347     42,000   

Time Warner Cable Inc.

     (1,000     78,000   

Verizon Communications Inc.

     (580     139,630   

Walgreen Co.

     (800     52,000   

Watts Water Technologies Inc., Cl. A

     (5,000     132,000   

Weatherford International Ltd.(h)

     (35,000       

William Demant Holding A/S

     (1,000     54,500   

Preferred Stock

    

Cincinnati Bell Inc.

     (500     21,000   

 

(a)

Stock Dividend - 188,000 shares received dividends. 0.031784 shares for every 1 share held.

 

(b)

Stock Dividend - 0.034454 shares for every 1 share held.

 

(c)

Stock Split - 2 shares for every 1 share held.

 

(d)

Reincorporation and identifier change from Pentair Ltd. (H6169Q108) to Pentair plc (G7S00T104). 2,400 shares were sold after reincorporation and identifier change.

 

(e)

Spin-off - 1 share of Rayonier Advanced Materials Inc. for every 3 shares of Rayonier Inc. held.

 

(f)

Stock dividend - 134 shares of Rolls-Royce Holdings plc, Cl. C for every 1 share of Rolls-Royce Holdings plc held.

 

(g)

Spin-off - 0.125 shares of Time Inc. for every 1 share of Time Warner Inc. held. 4,500 shares were sold after spin-off.

 

(h)

Reincorporation and identifier change from Weatherford International Ltd. (H27013103) to Weatherford International plc (G48833100).

 

(i)

Tender Offer - $83.50 cash for every 1 share held. 58,800 shares were purchased before tender offer.

 

(j)

Tender Offer - $11.15 cash for every 1 share held.

 

 

See accompanying notes to schedule of investments.

 

4


The Gabelli Equity Trust Inc.

Schedule of Investments — June 30, 2014 (Unaudited)

 

 

 

Shares

        

Cost

   

Market

Value

 
   COMMON STOCKS — 99.8%   
   Food and Beverage — 11.3%   
  52,500      

Brown-Forman Corp., Cl. A

  $ 1,761,167      $ 4,847,850   
  18,675      

Brown-Forman Corp., Cl. B

    1,064,826        1,758,625   
  63,800      

Campbell Soup Co.

    1,781,130        2,922,678   
  2,000      

Chr Hansen Holding A/S

    87,363        84,226   
  15,000      

Coca-Cola Enterprises Inc.

    275,289        716,700   
  80,000      

ConAgra Foods Inc.

    2,752,901        2,374,400   
  30,600      

Constellation Brands Inc., Cl. A†

    383,791        2,696,778   
  18,000      

Crimson Wine Group Ltd.†

    91,848        162,900   
  210,475      

Danone SA

    10,219,967        15,632,157   
  652,800      

Davide Campari-Milano SpA

    3,566,380        5,649,317   
  25,000      

Dean Foods Co.

    448,232        439,750   
  192,500      

Diageo plc, ADR

    8,913,966        24,499,475   
  89,800      

Dr Pepper Snapple Group Inc.

    2,143,930        5,260,484   
  80,000      

Flowers Foods Inc.

    263,976        1,686,400   
  76,200      

Fomento Economico Mexicano SAB de CV, ADR

    1,023,214        7,136,130   
  53,000      

General Mills Inc.

    1,636,728        2,784,620   
  1,848,400      

Grupo Bimbo SAB de CV, Cl. A

    2,624,249        5,404,078   
  40,700      

Heineken NV

    1,918,423        2,921,951   
  17,000      

Ingredion Inc.

    243,240        1,275,680   
  105,000      

ITO EN Ltd.

    2,422,898        2,691,723   
  12,800      

Kellogg Co.

    475,305        840,960   
  64,000      

Kerry Group plc, Cl. A

    735,609        4,782,254   
  45,333      

Kraft Foods Group Inc.

    1,402,246        2,717,713   
  10,600      

LVMH Moet Hennessy Louis Vuitton SA

    365,943        2,043,653   
  272,000      

Mondelēz International Inc., Cl. A

    7,303,369        10,229,920   
  70,000      

Morinaga Milk Industry Co. Ltd.

    299,202        252,209   
  39,100      

Nestlé SA

    1,550,397        3,029,060   
  217,600      

PepsiCo Inc.

    12,159,446        19,440,384   
  39,200      

Pernod Ricard SA

    3,228,300        4,707,435   
  42,300      

Post Holdings Inc.†

    675,125        2,153,493   
  40,500      

Remy Cointreau SA

    2,383,895        3,726,133   
  122,600      

The Coca-Cola Co.

    2,988,367        5,193,336   
  17,000      

The Hain Celestial Group Inc.†

    227,968        1,508,580   
  330,000      

The Hillshire Brands Co.

    13,367,076        20,559,000   
  3,000      

The J.M. Smucker Co.

    149,101        319,710   
  42,000      

The WhiteWave Foods Co.†

    696,348        1,359,540   
  136,269      

Tootsie Roll Industries Inc.

    1,911,993        4,011,759   
  50,000      

Tyson Foods Inc., Cl. A

    421,291        1,877,000   
  341,000      

Yakult Honsha Co. Ltd.

    9,700,538        17,267,953   
    

 

 

   

 

 

 
       103,665,037        196,966,014   
    

 

 

   

 

 

 
   Financial Services — 8.4%   
  421,000      

American Express Co.(a)

    22,545,105        39,940,270   
  12,500      

Argo Group International Holdings Ltd.

    408,439        638,875   
  72,000      

Banco Santander SA, ADR

    545,542        750,240   
  127      

Berkshire Hathaway Inc., Cl. A†

    544,374        24,117,364   

Shares

        

Cost

   

Market

Value

 
  10,000      

Calamos Asset Management Inc., Cl. A

  $ 88,164      $ 133,900   
  18,800      

CIT Group Inc.

    776,644        860,288   
  98,000      

Citigroup Inc.

    3,543,672        4,615,800   
  10,000      

Cullen/Frost Bankers Inc.

    776,987        794,200   
  12,777      

Deutsche Bank AG

    542,318        449,495   
  10,000      

Fortress Investment Group LLC, Cl. A

    49,694        74,400   
  20,400      

H&R Block Inc.

    353,425        683,808   
  40,000      

Interactive Brokers Group Inc., Cl. A

    643,310        931,600   
  266,000      

Janus Capital Group Inc.

    2,785,475        3,319,680   
  56,800      

JPMorgan Chase & Co.

    1,944,615        3,272,816   
  35,000      

Kinnevik Investment AB, Cl. A

    569,727        1,506,013   
  125,000      

Legg Mason Inc.

    2,560,368        6,413,750   
  95,900      

Leucadia National Corp.

    1,340,120        2,514,498   
  14,000      

Loews Corp.

    558,454        616,140   
  125,000      

Marsh & McLennan Companies Inc.

    3,772,923        6,477,500   
  9,000      

Moody’s Corp.

    312,150        788,940   
  22,000      

Och-Ziff Capital Management Group LLC, Cl. A

    214,559        304,260   
  4,285      

Royce Global Value Trust Inc.†

    37,280        40,322   
  124,100      

State Street Corp.

    4,346,707        8,346,966   
  17,000      

SunTrust Banks Inc.

    358,050        681,020   
  128,400      

T. Rowe Price Group Inc.

    3,946,862        10,838,244   
  204,500      

The Bank of New York Mellon Corp.

    6,139,410        7,664,660   
  20,000      

The Charles Schwab Corp.

    292,250        538,600   
  12,300      

The Dun & Bradstreet Corp.

    292,691        1,355,460   
  20,000      

The Western Union Co.

    283,994        346,800   
  13,000      

W. R. Berkley Corp.

    476,775        602,030   
  37,000      

Waddell & Reed Financial Inc., Cl. A

    825,958        2,315,830   
  270,000      

Wells Fargo & Co.

    8,051,764        14,191,200   
    

 

 

   

 

 

 
       69,927,806        146,124,969   
    

 

 

   

 

 

 
   Cable and Satellite — 8.0%    
  270,200      

AMC Networks Inc., Cl. A†

    11,472,643        16,614,598   
  1,125,000      

Cablevision Systems Corp., Cl. A

    13,583,610        19,856,250   
  86,400      

Comcast Corp., Cl. A, Special

    835,556        4,607,712   
  374,200      

DIRECTV†

    14,482,393        31,810,742   
  97,000      

DISH Network Corp., Cl. A†

    2,445,418        6,312,760   
  30,440      

EchoStar Corp., Cl. A†

    956,094        1,611,494   
  15,000      

Intelsat SA†

    294,642        282,600   
  76,800      

Liberty Global plc, Cl. A†

    838,339        3,396,096   
  238,600      

Liberty Global plc, Cl. C†

    2,873,797        10,095,166   
  481,890      

Rogers Communications Inc., Cl. B, New York

    4,111,720        19,396,073   
  19,310      

Rogers Communications Inc., Cl. B, Toronto

    137,424        777,069   
 

 

See accompanying notes to financial statements.

 

5


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2014 (Unaudited)

 

 

 

Shares

        

Cost

   

Market

Value

 
   COMMON STOCKS (Continued)   
   Cable and Satellite (Continued)   
  108,800      

Scripps Networks Interactive Inc., Cl. A

  $ 3,513,944      $ 8,828,032   
  120,000      

Shaw Communications Inc., Cl. B, New York

    354,632        3,079,200   
  40,000      

Shaw Communications Inc., Cl. B, Toronto

    52,983        1,025,631   
  78,000      

Time Warner Cable Inc.

    5,766,544        11,489,400   
    

 

 

   

 

 

 
       61,719,739        139,182,823   
    

 

 

   

 

 

 
   Entertainment — 7.8%   
  78,600      

Discovery Communications Inc., Cl. A†

    2,934,651        5,838,408   
  83,100      

Discovery Communications Inc., Cl. C†

    1,328,223        6,032,229   
  612,000      

Grupo Televisa SAB, ADR

    7,989,641        20,997,720   
  32,000      

Societe d’Edition de Canal +

    34,011        271,669   
  83,300      

Starz, Cl. A†

    330,827        2,481,507   
  305,000      

The Madison Square Garden Co., Cl. A†

    5,463,532        19,047,250   
  186,800      

Time Warner Inc.

    7,369,813        13,122,700   
  41,000      

Tokyo Broadcasting System Holdings Inc.

    822,740        503,065   
  585,200      

Twenty-First Century Fox Inc., Cl. A

    5,721,741        20,569,780   
  367,000      

Twenty-First Century Fox Inc., Cl. B

    5,573,196        12,562,410   
  75,000      

Universal Entertainment Corp.

    1,271,374        1,330,388   
  289,500      

Viacom Inc., Cl. A

    13,568,454        25,114,125   
  346,666      

Vivendi SA

    8,894,313        8,482,708   
    

 

 

   

 

 

 
       61,302,516        136,353,959   
    

 

 

   

 

 

 
   Equipment and Supplies — 6.7%   
  454,000      

AMETEK Inc.

    3,260,560        23,735,120   
  3,500      

Amphenol Corp., Cl. A

    12,928        337,190   
  94,000      

CIRCOR International Inc.

    1,246,366        7,250,220   
  374,800      

Donaldson Co. Inc.

    3,343,560        15,861,536   
  274,600      

Flowserve Corp.

    3,730,565        20,416,510   
  40,700      

Franklin Electric Co. Inc.

    229,059        1,641,431   
  77,400      

GrafTech International Ltd.†

    750,724        809,604   
  269,000      

IDEX Corp.

    7,414,410        21,719,060   
  49,000      

Ingersoll-Rand plc

    1,050,094        3,062,990   
  44,000      

Mueller Industries Inc.

    1,014,246        1,294,040   
  13,000      

Sealed Air Corp.

    208,280        444,210   
  45,000      

Tenaris SA, ADR

    1,981,220        2,121,750   
  15,000      

The Greenbrier Companies Inc.†

    297,309        864,000   
  4,000      

The Manitowoc Co. Inc.

    25,450        131,440   
  85,000      

The Timken Co.

    4,534,031        5,766,400   
  64,800      

The Weir Group plc

    272,671        2,904,422   

Shares

        

Cost

   

Market

Value

 
  132,000      

Watts Water Technologies Inc., Cl. A

  $ 2,845,661      $ 8,148,360   
    

 

 

   

 

 

 
       32,217,134        116,508,283   
    

 

 

   

 

 

 
   Energy and Utilities — 5.6%   
  16,000      

ABB Ltd., ADR

    249,120        368,320   
  37,000      

Anadarko Petroleum Corp.

    2,080,728        4,050,390   
  59,000      

Apache Corp.

    2,771,519        5,936,580   
  80,000      

BP plc, ADR

    3,952,168        4,220,000   
  22,100      

CMS Energy Corp.

    141,190        688,415   
  202,200      

ConocoPhillips

    9,359,464        17,334,606   
  50,000      

CONSOL Energy Inc.

    1,876,269        2,303,500   
  15,400      

Duke Energy Corp.

    837,476        1,142,526   
  217,500      

El Paso Electric Co.

    4,977,269        8,745,675   
  69,400      

Exxon Mobil Corp.

    2,391,496        6,987,192   
  140,000      

GenOn Energy Inc., Escrow†

    0        0   
  196,400      

Halliburton Co.

    3,831,496        13,946,364   
  50,600      

Kinder Morgan Inc.

    1,453,014        1,834,756   
  4,000      

Marathon Oil Corp.

    111,366        159,680   
  4,000      

Marathon Petroleum Corp.

    142,402        312,280   
  20,000      

Murphy USA Inc.†

    886,754        977,800   
  5,000      

National Fuel Gas Co.

    375,876        391,500   
  18,800      

NextEra Energy Inc.

    1,064,203        1,926,624   
  1,000      

Niko Resources Ltd.†

    54,403        2,060   
  40,000      

Northeast Utilities

    873,522        1,890,800   
  32,400      

Oceaneering International Inc.

    437,629        2,531,412   
  12,200      

Phillips 66

    900,010        981,246   
  153,000      

Rowan Companies plc, Cl. A

    5,743,460        4,885,290   
  28,000      

RPC Inc.

    363,509        657,720   
  5,000      

SJW Corp.

    68,704        136,000   
  17,000      

Southwest Gas Corp.

    389,070        897,430   
  108,900      

Spectra Energy Corp.

    2,721,643        4,626,072   
  55,500      

The AES Corp.

    309,163        863,025   
  9,000      

Transocean Ltd.

    442,041        405,270   
  35,000      

Weatherford International plc†

    503,431        805,000   
  174,500      

Westar Energy Inc.

    2,904,704        6,664,155   
    

 

 

   

 

 

 
       52,213,099        96,671,688   
    

 

 

   

 

 

 
   Diversified Industrial — 5.5%   
  3,000      

Acuity Brands Inc.

    76,507        414,750   
  152,000      

Ampco-Pittsburgh Corp.

    1,976,139        3,486,880   
  198,200      

Crane Co.

    4,752,758        14,738,152   
  4,000      

Eaton Corp. plc

    205,117        308,720   
  174,000      

General Electric Co.

    3,182,750        4,572,720   
  146,300      

Greif Inc., Cl. A

    1,574,786        7,982,128   
  12,897      

Greif Inc., Cl. B

    639,903        772,530   
  32,000      

Griffon Corp.

    298,790        396,800   
  359,000      

Honeywell International Inc.

    13,254,892        33,369,050   
  122,000      

ITT Corp.

    1,468,866        5,868,200   
  11,000      

Jardine Strategic Holdings Ltd.

    222,951        393,030   
  2,000      

Kennametal Inc.

    77,640        92,560   
  89,000      

Park-Ohio Holdings Corp.

    918,655        5,171,790   
  35,000      

Pentair plc

    1,197,464        2,524,200   
 

 

See accompanying notes to financial statements.

 

6


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2014 (Unaudited)

 

 

 

Shares

        

Cost

   

Market

Value

 
   COMMON STOCKS (Continued)   
   Diversified Industrial (Continued)   
  9,667      

Rayonier Advanced Materials Inc.†

  $ 160,779      $ 374,583   
  30,000      

Rexnord Corp.†

    630,867        844,500   
  15,000      

Sulzer AG

    739,785        2,104,195   
  15,000      

Toray Industries Inc.

    104,972        98,613   
  10,000      

Tredegar Corp.

    136,250        234,100   
  56,400      

Trinity Industries Inc.

    712,233        2,465,808   
  217,000      

Tyco International Ltd.

    5,366,438        9,895,200   
    

 

 

   

 

 

 
       37,698,542        96,108,509   
    

 

 

   

 

 

 
   Health Care — 4.3%   
  13,200      

Actavis plc†

    1,938,602        2,944,260   
  10,000      

Alere Inc.†

    370,242        374,200   
  10,000      

Allergan Inc.

    465,214        1,692,200   
  32,700      

Amgen Inc.

    2,023,813        3,870,699   
  29,400      

Baxter International Inc.

    1,533,417        2,125,620   
  12,500      

Becton, Dickinson and Co.

    1,002,237        1,478,750   
  24,700      

Biogen Idec Inc.†

    1,395,349        7,788,157   
  275,000      

Boston Scientific Corp.†

    1,968,361        3,511,750   
  76,300      

Bristol-Myers Squibb Co.

    1,919,054        3,701,313   
  47,200      

Covidien plc

    1,684,393        4,256,496   
  15,000      

DaVita HealthCare Partners Inc.†

    944,551        1,084,800   
  10,000      

Endo International plc†

    320,069        700,200   
  25,000      

Express Scripts Holding Co.†

    1,690,849        1,733,250   
  28,800      

Henry Schein Inc.†

    999,862        3,417,696   
  30,000      

Hospira Inc.†

    973,775        1,541,100   
  37,000      

Johnson & Johnson

    2,400,670        3,870,940   
  34,000      

Mead Johnson Nutrition Co.

    1,527,559        3,167,780   
  95,200      

Merck & Co. Inc.

    2,219,590        5,507,320   
  11,000      

Nobel Biocare Holding AG

    297,055        163,735   
  88,200      

Novartis AG, ADR

    3,993,309        7,984,746   
  15,000      

Teva Pharmaceutical Industries Ltd., ADR

    581,414        786,300   
  87,000      

UnitedHealth Group Inc.

    4,489,729        7,112,250   
  4,000      

Waters Corp.†

    285,470        417,760   
  54,500      

William Demant Holding A/S†

    2,483,169        4,948,676   
  8,600      

Zimmer Holdings Inc.

    435,897        893,196   
  16,000      

Zoetis Inc.

    416,000        516,320   
    

 

 

   

 

 

 
       38,359,650        75,589,514   
    

 

 

   

 

 

 
   Automotive: Parts and Accessories — 4.3%   
  116,600      

BorgWarner Inc.

    4,346,784        7,601,154   
  113,800      

CLARCOR Inc.

    1,584,023        7,038,530   
  215,000      

Dana Holding Corp.

    1,440,698        5,250,300   
  245,000      

Genuine Parts Co.

    8,686,915        21,511,000   
  160,600      

Johnson Controls Inc.

    3,803,198        8,018,758   
  198,000      

Modine Manufacturing Co.†

    4,202,282        3,116,520   
  94,000      

O’Reilly Automotive Inc.†

    3,549,938        14,156,400   
  130,000      

Standard Motor Products Inc.

    1,345,271        5,807,100   

Shares

        

Cost

   

Market

Value

 
  70,000      

Superior Industries International Inc.

  $ 1,405,635      $ 1,443,400   
    

 

 

   

 

 

 
       30,364,744        73,943,162   
    

 

 

   

 

 

 
   Consumer Products — 3.8%   
  115,000      

Avon Products Inc.

    2,221,952        1,680,150   
  112,200      

Blyth Inc.

    1,778,539        872,916   
  15,300      

Christian Dior SA

    579,339        3,044,078   
  20,000      

Church & Dwight Co. Inc.

    66,357        1,399,000   
  130,000      

Coty Inc., Cl. A

    2,077,262        2,226,900   
  20,000      

Crocs Inc.†

    295,554        300,600   
  95,500      

Energizer Holdings Inc.

    5,289,289        11,653,865   
  2,100      

Givaudan SA

    725,396        3,502,368   
  44,200      

Hanesbrands Inc.

    1,026,896        4,351,048   
  23,800      

Harley-Davidson Inc.

    1,105,662        1,662,430   
  6,000      

Jarden Corp.†

    91,909        356,100   
  7,000      

Mattel Inc.

    115,920        272,790   
  11,383      

National Presto Industries Inc.

    542,365        829,138   
  10,000      

Oil-Dri Corp. of America

    171,255        305,700   
  46,800      

Reckitt Benckiser Group plc

    1,420,403        4,084,748   
  30,000      

Svenska Cellulosa AB, Cl. B

    404,760        781,705   
  813,800      

Swedish Match AB

    9,022,328        28,257,156   
  2,000      

The Estee Lauder Companies Inc., Cl. A

    72,261        148,520   
    

 

 

   

 

 

 
       27,007,447        65,729,212   
    

 

 

   

 

 

 
   Consumer Services — 3.2%   
  14,334      

Allegion plc

    232,677        812,451   
  45,000      

IAC/InterActiveCorp.

    1,149,873        3,115,350   
  205,000      

Liberty Interactive Corp.,
Cl. A†

    3,861,726        6,018,800   
  30,902      

Liberty Ventures, Cl. A†

    710,069        2,280,568   
  1,210,000      

Rollins Inc.

    12,648,270        36,300,000   
  192,000      

The ADT Corp.

    6,575,305        6,708,480   
  8,000      

TripAdvisor Inc.†

    282,851        869,280   
    

 

 

   

 

 

 
       25,460,771        56,104,929   
    

 

 

   

 

 

 
   Retail — 3.1%   
  70,600      

AutoNation Inc.†

    741,397        4,213,408   
  10,000      

Bed Bath & Beyond Inc.†

    701,260        573,800   
  41,700      

Burger King Worldwide Inc.

    647,621        1,135,074   
  40,000      

Costco Wholesale Corp.

    1,843,960        4,606,400   
  60,500      

CST Brands Inc.

    1,944,877        2,087,250   
  120,000      

CVS Caremark Corp.

    4,075,042        9,044,400   
  25,100      

HSN Inc.

    650,452        1,486,924   
  50,000      

J.C. Penney Co. Inc.†

    644,777        452,500   
  341,000      

Macy’s Inc.

    6,368,108        19,784,820   
  11,000      

Penske Automotive Group Inc.

    441,111        544,500   
  33,300      

Sally Beauty Holdings Inc.†

    264,056        835,164   
  13,000      

The Cheesecake Factory Inc.

    380,728        603,460   
  3,000      

Tiffany & Co.

    171,090        300,750   
  52,000      

Walgreen Co.

    1,540,167        3,854,760   
  36,100      

Wal-Mart Stores Inc.

    1,816,342        2,710,027   
 

 

See accompanying notes to financial statements.

 

7


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2014 (Unaudited)

 

 

 

Shares

        

Cost

   

Market

Value

 
   COMMON STOCKS (Continued)   
   Retail (Continued)   
  38,000      

Whole Foods Market Inc.

  $ 457,708      $ 1,467,940   
    

 

 

   

 

 

 
       22,688,696        53,701,177   
    

 

 

   

 

 

 
   Telecommunications — 3.1%   
  55,400      

BCE Inc.

    1,226,373        2,512,944   
  988,400      

BT Group plc, Cl. A

    4,087,138        6,510,733   
  700,000      

Cincinnati Bell Inc.†

    3,430,473        2,751,000   
  108,900      

Deutsche Telekom AG, ADR

    1,805,375        1,907,928   
  36,000      

Hellenic Telecommunications Organization SA†

    452,922        532,384   
  15,000      

Hellenic Telecommunications Organization SA, ADR†

    91,062        111,000   
  264,732      

Koninklijke KPN NV†

    448,166        964,606   
  7,040,836      

LIME†(b)

    128,658        19,515   
  309,500      

Oi SA, ADR

    2,282,886        265,582   
  29,000      

Oi SA, Cl. C, ADR

    265,522        28,043   
  31,053      

Sprint Corp.†

    176,071        264,882   
  21,000      

Telecom Argentina SA, ADR

    127,554        494,550   
  600,000      

Telecom Italia SpA†

    2,342,466        759,962   
  81,500      

Telefonica Brasil SA, ADR

    1,675,765        1,671,565   
  597,315      

Telefonica SA, ADR

    9,146,761        10,249,925   
  573,300      

Telephone & Data Systems Inc.

    24,644,307        14,968,863   
  25,000      

TELUS Corp.

    233,734        931,775   
  139,630      

Verizon Communications Inc.

    4,928,554        6,832,096   
  41,482      

Vodafone Group plc, ADR

    1,993,421        1,385,084   
    

 

 

   

 

 

 
       59,487,208        53,162,437   
    

 

 

   

 

 

 
   Aerospace and Defense — 2.6%   
  616,615      

BBA Aviation plc

    1,488,708        3,260,782   
  225,600      

Exelis Inc.

    1,690,286        3,830,688   
  35,800      

Kaman Corp.

    881,634        1,529,734   
  17,500      

Northrop Grumman Corp.

    900,365        2,093,525   
  1,200,000      

Rolls-Royce Holdings plc

    9,166,092        21,953,724   
  160,800,000      

Rolls-Royce Holdings plc, Cl. C†(b)(c)

    269,790        275,192   
  98,000      

The Boeing Co.(a)

    6,288,497        12,468,540   
    

 

 

   

 

 

 
       20,685,372        45,412,185   
    

 

 

   

 

 

 
   Business Services — 2.5%   
  10,000      

ACCO Brands Corp.†

    70,117        64,100   
  20,500      

Aramark

    481,192        530,540   
  159,000      

Clear Channel Outdoor Holdings Inc., Cl. A

    1,158,502        1,300,620   
  33,000      

Contax Participacoes SA

    67,778        237,325   
  90,000      

Diebold Inc.

    3,224,800        3,615,300   
  4,000      

Edenred

    57,883        121,293   
  185,200      

G4S plc

    0        808,855   
  17,300      

Jardine Matheson Holdings Ltd.

    565,935        1,026,063   
  88,000      

Landauer Inc.

    2,472,818        3,696,000   

Shares

        

Cost

   

Market

Value

 
  8,000      

Macquarie Infrastructure Co. LLC

  $ 428,773      $ 498,960   
  342,000      

MasterCard Inc., Cl. A

    3,293,995        25,126,740   
  306,600      

The Interpublic Group of Companies Inc.

    3,030,380        5,981,766   
  3,200      

Visa Inc., Cl. A

    140,800        674,272   
    

 

 

   

 

 

 
       14,992,973        43,681,834   
    

 

 

   

 

 

 
   Aviation: Parts and Services — 2.5%   
  1,000      

B/E Aerospace Inc.†

    75,711        92,490   
  270,300      

Curtiss-Wright Corp.

    8,489,994        17,720,868   
  275,000      

GenCorp Inc.†

    2,370,094        5,252,500   
  78,500      

Precision Castparts Corp.

    4,256,301        19,813,400   
  2,000      

Spirit AeroSystems Holdings Inc., Cl. A†

    62,973        67,400   
    

 

 

   

 

 

 
       15,255,073        42,946,658   
    

 

 

   

 

 

 
   Machinery — 2.4%   
  12,800      

Caterpillar Inc.

    86,323        1,390,976   
  53,592      

CNH Industrial NV

    464,629        547,710   
  320,000      

Deere & Co.(a)

    9,620,873        28,976,000   
  289,600      

Xylem Inc.

    6,927,287        11,317,568   
    

 

 

   

 

 

 
       17,099,112        42,232,254   
    

 

 

   

 

 

 
   Specialty Chemicals — 1.9%   
  17,000      

Ashland Inc.

    955,621        1,848,580   
  15,000      

Chemtura Corp.†

    371,183        391,950   
  20,000      

E. I. du Pont de Nemours and Co.

    899,328        1,308,800   
  425,000      

Ferro Corp.†

    3,974,417        5,338,000   
  8,000      

FMC Corp.

    136,430        569,520   
  24,000      

H.B. Fuller Co.

    504,689        1,154,400   
  8,000      

Huntsman Corp.

    185,439        224,800   
  69,000      

International Flavors & Fragrances Inc.

    3,608,069        7,195,320   
  250,000      

OMNOVA Solutions Inc.†

    1,510,743        2,272,500   
  192,600      

Sensient Technologies Corp.

    4,877,366        10,731,672   
  2,000      

SGL Carbon SE†

    68,557        65,795   
  95,000      

Zep Inc.

    1,243,246        1,677,700   
    

 

 

   

 

 

 
       18,335,088        32,779,037   
    

 

 

   

 

 

 
   Hotels and Gaming — 1.8%   
  16,000      

Accor SA

    549,282        832,315   
  90,000      

Genting Singapore plc

    74,910        95,998   
  8,000      

Hyatt Hotels Corp., Cl. A†

    263,258        487,840   
  90,000      

International Game Technology

    1,387,772        1,431,900   
  27,200      

Interval Leisure Group Inc.

    513,097        596,768   
  990,600      

Ladbrokes plc

    4,587,508        2,378,511   
  46,800      

Las Vegas Sands Corp.

    678,053        3,567,096   
  3,655,600      

Mandarin Oriental International Ltd.

    6,859,684        6,963,918   
  85,000      

MGM China Holdings Ltd.

    167,798        295,017   
  25,000      

MGM Resorts International†

    258,037        660,000   
 

 

See accompanying notes to financial statements.

 

8


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2014 (Unaudited)

 

 

 

Shares

        

Cost

   

Market

Value

 
   COMMON STOCKS (Continued)   
   Hotels and Gaming (Continued)   
  45,000      

Orient-Express Hotels Ltd., Cl. A†

  $ 621,367      $ 654,300   
  34,000      

Pinnacle Entertainment Inc.†

    161,420        856,120   
  188,800      

Ryman Hospitality Properties Inc.

    5,121,573        9,090,720   
  29,000      

Starwood Hotels & Resorts Worldwide Inc.

    446,065        2,343,780   
  200,000      

The Hongkong & Shanghai Hotels Ltd.

    155,450        284,889   
  4,000      

Wyndham Worldwide Corp.

    282,896        302,880   
  2,000      

Wynn Resorts Ltd.

    61,976        415,120   
    

 

 

   

 

 

 
       22,190,146        31,257,172   
    

 

 

   

 

 

 
   Broadcasting — 1.7%   
  253,300      

CBS Corp., Cl. A, Voting

    7,617,840        15,729,930   
  2,000      

Cogeco Inc.

    39,014        103,107   
  17,334      

Corus Entertainment Inc., Cl. B, OTC

    30,215        404,524   
  6,666      

Corus Entertainment Inc., Cl. B, Toronto

    12,406        155,991   
  25,000      

Gray Television Inc.†

    19,022        328,250   
  89,000      

Liberty Media Corp., Cl. A†

    7,288,513        12,164,520   
  24,000      

LIN Media LLC, Cl. A†

    353,520        654,000   
  85,200      

Television Broadcasts Ltd.

    339,712        553,497   
    

 

 

   

 

 

 
       15,700,242        30,093,819   
    

 

 

   

 

 

 
   Publishing — 1.4%   
  300      

Graham Holdings Co., Cl. B

    196,961        215,433   
  100,000      

Il Sole 24 Ore SpA†

    198,073        119,266   
  111,600      

McGraw Hill Financial Inc.

    4,595,648        9,266,148   
  130,000      

Media General Inc.†

    1,142,790        2,668,900   
  104,000      

Meredith Corp.

    4,447,393        5,029,440   
  154,900      

News Corp., Cl. A†

    965,203        2,778,906   
  148,600      

News Corp., Cl. B†

    1,640,044        2,593,070   
  25,000      

The E.W. Scripps Co., Cl. A†

    157,281        529,000   
  18,850      

Time Inc.†

    237,077        456,547   
    

 

 

   

 

 

 
       13,580,470        23,656,710   
    

 

 

   

 

 

 
   Electronics — 1.1%   
  18,000      

Bel Fuse Inc., Cl. A

    524,289        442,440   
  4,000      

Hitachi Ltd., ADR

    287,076        293,560   
  60,000      

Intel Corp.

    1,289,364        1,854,000   
  33,087      

Koninklijke Philips NV

    150,810        1,050,843   
  2,400      

Mettler-Toledo International Inc.†

    337,271        607,632   
  42,600      

TE Connectivity Ltd.

    1,656,580        2,634,384   
  250,000      

Texas Instruments Inc.

    7,806,091        11,947,500   
    

 

 

   

 

 

 
       12,051,481        18,830,359   
    

 

 

   

 

 

 
   Environmental Services — 0.9%   
  224,400      

Republic Services Inc.

    4,947,896        8,520,468   

Shares

        

Cost

   

Market

Value

 
  162,400      

Waste Management Inc.

  $ 4,671,752      $ 7,264,152   
    

 

 

   

 

 

 
       9,619,648        15,784,620   
    

 

 

   

 

 

 
   Wireless Communications — 0.9%   
  110,800      

America Movil SAB de CV, Cl. L, ADR

    760,404        2,299,100   
  3,000,000      

Cable & Wireless Communications plc

    2,397,576        2,528,580   
  22,000      

Millicom International Cellular SA, SDR

    2,175,102        2,015,101   
  150,000      

NTT DoCoMo Inc.

    2,980,751        2,564,533   
  50,075      

Tim Participacoes SA, ADR

    371,251        1,453,677   
  104,600      

United States Cellular Corp.†

    4,965,942        4,267,680   
    

 

 

   

 

 

 
       13,651,026        15,128,671   
    

 

 

   

 

 

 
   Computer Software and Services — 0.7%   
  7,000      

Check Point Software Technologies Ltd.†

    118,774        469,210   
  16,000      

Electronic Arts Inc.†

    229,669        573,920   
  25,000      

InterXion Holding NV†

    367,395        684,500   
  62,000      

NCR Corp.†

    757,681        2,175,580   
  21,900      

Rockwell Automation Inc.

    695,220        2,741,004   
  20,000      

VeriFone Systems Inc.†

    477,903        735,000   
  160,000      

Yahoo! Inc.†

    3,580,869        5,620,800   
    

 

 

   

 

 

 
       6,227,511        13,000,014   
    

 

 

   

 

 

 
   Agriculture — 0.7%   
  200,000      

Archer Daniels Midland Co.

    4,691,883        8,822,000   
  17,000      

Monsanto Co.

    755,020        2,120,580   
  12,800      

Syngenta AG, ADR

    186,484        957,440   
  10,000      

The Mosaic Co.

    428,085        494,500   
    

 

 

   

 

 

 
       6,061,472        12,394,520   
    

 

 

   

 

 

 
   Communications Equipment — 0.7%   
  54,000      

Cisco Systems Inc.

    1,060,702        1,341,900   
  462,100      

Corning Inc.

    4,297,587        10,143,095   
    

 

 

   

 

 

 
       5,358,289        11,484,995   
    

 

 

   

 

 

 
   Automotive — 0.6%   
  20,000      

Ford Motor Co.

    310,850        344,800   
  24,000      

General Motors Co.

    957,168        871,200   
  122,100      

Navistar International Corp.†

    3,045,534        4,576,308   
  75,000      

PACCAR Inc.

    327,796        4,712,250   
    

 

 

   

 

 

 
       4,641,348        10,504,558   
    

 

 

   

 

 

 
   Metals and Mining — 0.6%   
  37,400      

Agnico Eagle Mines Ltd.

    1,530,570        1,432,420   
  110,000      

Alcoa Inc.

    1,014,118        1,637,900   
  54,000      

Barrick Gold Corp.

    1,581,120        988,200   
  12,000      

Cliffs Natural Resources Inc.

    173,550        180,600   
  26,000      

Freeport-McMoRan Copper & Gold Inc.

    903,831        949,000   
  4,800      

Materion Corp.

    108,162        177,552   
  50,000      

New Hope Corp. Ltd.

    67,580        126,355   
 

 

See accompanying notes to financial statements.

 

9


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2014 (Unaudited)

 

 

 

Shares

        

Cost

   

Market

Value

 
   COMMON STOCKS (Continued)   
   Metals and Mining (Continued)   
  143,600      

Newmont Mining Corp.

  $ 5,120,536      $ 3,653,184   
  145,800      

Turquoise Hill Resources Ltd.†

    759,992        486,972   
  12,000      

Vale SA, ADR

    215,984        158,760   
    

 

 

   

 

 

 
       11,475,443        9,790,943   
    

 

 

   

 

 

 
   Transportation — 0.5%   
  139,800      

GATX Corp.

    4,452,896        9,358,212   
    

 

 

   

 

 

 
   Real Estate — 0.4%   
  35,000      

Forest City Enterprises Inc., Cl. A†

    682,620        695,450   
  55,500      

Griffin Land & Nurseries Inc.

    529,368        1,637,250   
  188,500      

The St. Joe Co.†

    3,663,453        4,793,555   
    

 

 

   

 

 

 
       4,875,441        7,126,255   
    

 

 

   

 

 

 
   Closed-End Funds — 0.3%   
  30,000      

Royce Value Trust Inc.

    368,797        480,000   
  96,486      

The Central Europe, Russia, and Turkey Fund Inc.

    2,625,436        2,826,075   
  96,529      

The New Germany Fund Inc.

    1,243,890        1,800,267   
    

 

 

   

 

 

 
       4,238,123        5,106,342   
    

 

 

   

 

 

 
   Building and Construction — 0.2%   
  5,000      

Assa Abloy AB, Cl. B

    257,665        254,432   
  91,000      

Fortune Brands Home & Security Inc.

    858,328        3,633,630   
  23,000      

Layne Christensen Co.†

    426,423        305,900   
    

 

 

   

 

 

 
       1,542,416        4,193,962   
    

 

 

   

 

 

 
   Real Estate Investment Trusts — 0.1%   
  1,800      

Camden Property Trust

    33,741        128,070   
  4,500      

QTS Realty Trust Inc., Cl. A

    94,500        128,835   
  29,000      

Rayonier Inc.

    457,601        1,030,950   
    

 

 

   

 

 

 
       585,842        1,287,855   
    

 

 

   

 

 

 
   Computer Hardware — 0.1%   
  7,000      

International Business Machines Corp.

    1,232,957        1,268,890   
    

 

 

   

 

 

 
   Manufactured Housing and Recreational
Vehicles — 0.1%
  
  5,000      

Martin Marietta Materials Inc.

    106,125        660,250   
  30,000      

Nobility Homes Inc.†

    349,956        346,800   
  53,000      

Skyline Corp.†

    565,692        217,830   
    

 

 

   

 

 

 
       1,021,773        1,224,880   
    

 

 

   

 

 

 
   TOTAL COMMON STOCKS     846,986,531        1,734,691,421   
    

 

 

   

 

 

 
  

CONVERTIBLE PREFERRED STOCKS — 0.1%

  

  

Telecommunications — 0.1%

  

  21,000      

Cincinnati Bell Inc., 6.750%, Ser. B

    515,202        1,007,979   
    

 

 

   

 

 

 

Shares

       

Cost

   

Market

Value

 
 

WARRANTS — 0.0%

  

 

Energy and Utilities — 0.0%

  

  115,800     

Kinder Morgan Inc., expire 05/25/17†

  $ 139,263      $ 321,924   
   

 

 

   

 

 

 
Principal
Amount
                 
 

CONVERTIBLE CORPORATE BONDS — 0.1%

  

 

Diversified Industrial — 0.1%

  

  $2,000,000     

Griffon Corp., Sub. Deb.,
4.000%, 01/15/17(d)

    2,000,000        2,316,250   
   

 

 

   

 

 

 

 

TOTAL INVESTMENTS — 100.0%

  $ 849,640,996        1,738,337,574   
   

 

 

   

Number of

Contracts

        Expiration
Date
    Unrealized
Depreciation
 
  FUTURES CONTRACTS — SHORT POSITION   
  105      S&P 500 E-Mini
Futures(e)
    09/19/14        (82,633
     

 

 

 

 

     Market
Value
 

Other Assets and Liabilities (Net)

    (1,895,785

PREFERRED STOCK

 

(9,369,257 preferred shares outstanding)

    (334,131,425
 

 

 

 

NET ASSETS — COMMON STOCK

 

(191,839,279 common shares outstanding)

  $ 1,402,227,731   
 

 

 

 

NET ASSET VALUE PER COMMON SHARE

 

($1,402,227,731 ÷ 191,839,279
shares outstanding)

  $ 7.31   
 

 

 

 

 

 

(a)

Securities, or a portion thereof, with a value of $57,610,750, were pledged as collateral for futures contracts.

 

(b)

At June 30, 2014, the Fund held investments in restricted securities amounting to $294,707 or 0.02% of total investments, which were valued under methods approved by the Board of Directors as follows:

 

Acquisition
Shares
    

Issuer

   Acquisition
Date
     Acquisition
Cost
     06/30/14
Carrying
Value
Per Share
 
  7,040,836       LIME      09/30/93       $ 128,658       $ 0.0028   
  160,800,000       Rolls-Royce
    Holdings plc,
    Cl. C
     04/23/14         269,790         0.0017   

 

(c)

Illiquid security.

 

 

See accompanying notes to financial statements.

 

10


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2014 (Unaudited)

 

 

 

(d)

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2014, the market value of the Rule 144A security amounted to $2,316,250 or 0.13% of total investments.

 

(e)

At June 30, 2014, the Fund had entered into futures contracts with UBS AG.

 

Non-income producing security.

 

ADR

American Depositary Receipt

SDR

Swedish Depositary Receipt

 

Geographic Diversification

   % of Total
Investments
  Market
Value

North America

       81.4 %     $ 1,415,461,352  

Europe

       14.2         246,676,190  

Latin America

       2.4         41,754,238  

Japan

       1.4         25,002,044  

Asia/Pacific

       0.6         9,443,750  
    

 

 

     

 

 

 

Total Investments

       100.0 %     $ 1,738,337,574  
    

 

 

     

 

 

 
 

 

See accompanying notes to financial statements.

 

11


The Gabelli Equity Trust Inc.

 

Statement of Assets and Liabilities

June 30, 2014 (Unaudited)

 

 

Assets:

  

Investments, at value (cost $849,640,996)

   $ 1,738,337,574   

Dividends and interest receivable

     2,655,126   

Deferred offering expense

     65,704   

Prepaid expenses

     13,095   
  

 

 

 

Total Assets

     1,741,071,499   
  

 

 

 

Liabilities:

  

Payable to custodian

     1,344,234   

Distributions payable

     171,633   

Payable for investments purchased

     331,277   

Payable for investment advisory fees

     1,788,558   

Payable for payroll expenses

     127,899   

Payable for accounting fees

     11,250   

Payable for auction agent fees

     873,578   

Variation margin payable

     1,466   

Other accrued expenses

     62,448   
  

 

 

 

Total Liabilities

     4,712,343   
  

 

 

 

Cumulative Preferred Stock, $0.001 par value:

  

Series C (Auction Rate, $25,000 liquidation value, 5,200 shares authorized with 2,880 shares issued and outstanding)

     72,000,000   

Series D (5.875%, $25 liquidation value, 3,000,000 shares authorized with 2,363,860 shares issued and outstanding)

     59,096,500   

Series E (Auction Rate, $25,000 liquidation value, 2,000 shares authorized with 1,120 shares issued and outstanding)

     28,000,000   

Series G (5.000%, $25 liquidation value, 2,816,524 shares authorized with 2,814,424 shares issued and outstanding)

     70,360,600   

Series H (5.000%, $25 liquidation value, 4,200,000 shares authorized with 4,186,973 shares issued and outstanding)

     104,674,325   
  

 

 

 

Total Preferred Stock

     334,131,425   
  

 

 

 

Net Assets Attributable to Common Shareholders

   $ 1,402,227,731   
  

 

 

 

Net Assets Attributable to Common Shareholders Consist of:

  

Paid-in capital

   $ 522,468,510   

Distributions in excess of net investment income

     (14,118

Distributions in excess of net realized gain on investments, futures contracts, and foreign currency transactions

     (8,842,115

Net unrealized appreciation on investments

     888,696,578   

Net unrealized depreciation on futures contracts

     (82,633

Net unrealized appreciation on foreign currency translations

     1,509   
  

 

 

 

Net Assets

   $ 1,402,227,731   
  

 

 

 

Net Asset Value per Common Share:

  

($1,402,227,731 ÷ 191,839,279 shares outstanding at $0.001 par value; 246,000,000 shares authorized)

     $7.31   

Statement of Operations

For the Six Months Ended June 30, 2014 (Unaudited)

 

 

Investment Income:

  

Dividends (net of foreign withholding taxes of $302,873)

   $ 16,106,573   

Interest

     45,964   
  

 

 

 

Total Investment Income

     16,152,537   
  

 

 

 

Expenses:

  

Investment advisory fees

     8,383,445   

Shareholder communications expenses

     174,823   

Shelf registration expense

     125,352   

Custodian fees

     112,457   

Directors’ fees

     88,528   

Payroll expenses

     79,113   

Shareholder services fees

     70,208   

Legal and audit fees

     60,235   

Accounting fees

     22,500   

Miscellaneous expenses

     190,533   
  

 

 

 

Total Expenses

     9,307,194   
  

 

 

 

Less:

  

Advisory fee reduction

     (293,054

Advisory fee reduction on unsupervised assets (Note 3)

     (696
  

 

 

 

Total Reductions

     (293,750
  

 

 

 

Net Expenses

     9,013,444   
  

 

 

 

Net Investment Income

     7,139,093   
  

 

 

 

Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency:

  

Net realized gain on investments

     15,390,394   

Net realized loss on futures contracts

     (815,863

Net realized loss on foreign currency transactions

     (19,003
  

 

 

 

Net realized gain on investments, futures contracts, and foreign currency transactions

     14,555,528   
  

 

 

 

Net change in unrealized appreciation/depreciation:

  

on investments

     55,096,346   

on futures contracts

     1,349,581   

on foreign currency translations

     865   
  

 

 

 

Net change in unrealized appreciation/depreciation on investments, futures contracts, and foreign currency translations

     56,446,792   
  

 

 

 

Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency

     71,002,320   
  

 

 

 

Net Increase in Net Assets Resulting from Operations

     78,141,413   
  

 

 

 

Total Distributions to Preferred Shareholders

     (6,128,183
  

 

 

 

Net Increase in Net Assets Attributable to Common Shareholders Resulting from Operations

   $ 72,013,230   
  

 

 

 
 

 

See accompanying notes to financial statements.

 

12


The Gabelli Equity Trust Inc.

Statement of Changes in Net Assets Attributable to Common Shareholders

 

 

 

    

Six Months Ended
June 30, 2014
(Unaudited)

   

    
Year Ended
December 31, 2013

 

Operations:

          

Net investment income

      $ 7,139,093         $ 10,363,229   

Net realized gain on investments, futures contracts, and foreign currency transactions

        14,555,528           150,550,588   

Net change in unrealized appreciation on investments, futures contracts, and foreign currency translations

        56,446,792           277,860,016   
     

 

 

      

 

 

 

Net Increase in Net Assets Resulting from Operations

        78,141,413           438,773,833   
     

 

 

      

 

 

 

Distributions to Preferred Shareholders:

          

Net investment income

        (2,036,912 )*         (1,017,365

Net realized gain

        (4,091,271 )*         (11,754,664
     

 

 

      

 

 

 

Total Distributions to Preferred Shareholders

        (6,128,183        (12,772,029
     

 

 

      

 

 

 

Net Increase in Net Assets Attributable to Common Shareholders Resulting from Operations

        72,013,230           426,001,804   
     

 

 

      

 

 

 

Distributions to Common Shareholders:

          

Net investment income

        (4,581,874 )*         (9,326,302

Net realized gain

        (9,163,747 )*         (107,756,321

Return of capital

        (43,527,798 )*           
     

 

 

      

 

 

 

Total Distributions to Common Shareholders

        (57,273,419        (117,082,623
     

 

 

      

 

 

 

Fund Share Transactions:

          

Net increase in net assets from common shares issued upon reinvestment of distributions

        9,042,602           18,998,599   

Net increase in net assets from repurchase of preferred shares

        9,067           44,806   

Adjustment to offering costs for preferred shares credited to paid-in capital

                  22,605   
     

 

 

      

 

 

 

Net Increase in Net Assets from Fund Share Transactions

        9,051,669           19,066,010   
     

 

 

      

 

 

 

Net Increase in Net Assets Attributable to Common Shareholders

        23,791,480           327,985,191   

Net Assets Attributable to Common Shareholders:

          

Beginning of year

        1,378,436,251           1,050,451,060   
     

 

 

      

 

 

 

End of period (including undistributed net investment income of $0 and $0, respectively)

      $ 1,402,227,731         $ 1,378,436,251   
     

 

 

      

 

 

 

 

*

Based on year to date book income. Amounts are subject to change and recharacterization at year end.

 

See accompanying notes to financial statements.

 

13


The Gabelli Equity Trust Inc.

Financial Highlights

 

 

Selected data for a share outstanding throughout each period:

 

Six Months Ended
June 30, 2014    
    Year Ended December 31,  

   (Unaudited)      

    2013     2012     2011     2010     2009  

Operating Performance:

           

Net asset value, beginning of year

  $ 7.23      $ 5.60      $ 5.20      $ 5.85      $ 5.03      $ 4.14   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    0.04        0.06        0.09        0.07        0.05        0.06   

Net realized and unrealized gain/(loss) on investments, futures contracts, swap contracts, and foreign currency transactions

    0.37        2.26        0.97        (0.08     1.35        1.62   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.41        2.32        1.06        (0.01     1.40        1.68   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Preferred Shareholders: (a)

  

       

Net investment income

    (0.01 )*      (0.01     (0.03     (0.06     (0.05     (0.07

Net realized gain

    (0.02 )*      (0.06     (0.05     (0.01              

Return of capital

                                (0.02       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to preferred shareholders

    (0.03     (0.07     (0.08     (0.07     (0.07     (0.07
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Increase/(Decrease) in Net Assets Attributable to Common Shareholders Resulting from Operations

    0.38        2.25        0.98        (0.08     1.33        1.61   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Common Shareholders:

           

Net investment income

    (0.02 )*      (0.05     (0.06     (0.02            (0.00 )(b) 

Net realized gain

    (0.05 )*      (0.57     (0.11     (0.00 )(b)               

Return of capital

    (0.23 )*             (0.39     (0.55     (0.51     (0.72
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to common shareholders

    (0.30     (0.62     (0.56     (0.57     (0.51     (0.72
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fund Share Transactions:

           

Increase in net asset value from common stock share transactions

    0.00 (b)      0.00 (b)                           0.00 (b) 

Increase in net asset value from repurchase of preferred shares

    0.00 (b)      0.00 (b)                           0.00 (b) 

Recapture of gain on sale of Fund shares by an affiliate

                                0.00 (b)        

Offering costs and adjustment to offering costs for preferred shares charged to paid-in capital

           0.00 (b)      (0.02                     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Fund share transactions

    0.00 (b)      0.00 (b)      (0.02            0.00 (b)      0.00 (b) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Asset Value Attributable to Common Shareholders, End of Period

  $ 7.31      $ 7.23      $ 5.60      $ 5.20      $ 5.85      $ 5.03   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NAV total return †

    5.44     41.90     19.05     (1.17 )%      28.15     44.10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Market value, end of period

  $ 7.53      $ 7.75      $ 5.58      $ 4.99      $ 5.67      $ 5.04   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment total return ††

    1.18     52.44     23.62     (2.15 )%      23.96     61.56
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets and Supplemental Data:

           

Net assets including liquidation value of preferred shares, end of period (in 000’s)

  $ 1,736,360      $ 1,712,663      $ 1,384,961      $ 1,265,307      $ 1,364,172      $ 1,215,626   

Net assets attributable to common shares, end of period (in 000’s)

  $ 1,402,228      $ 1,378,436      $ 1,050,451      $ 959,950      $ 1,058,815      $ 910,269   

Ratio of net investment income to average net assets attributable to common shares before preferred distributions

    1.06 %(c)      0.84     1.54     1.26     0.92     1.53

Ratio of operating expenses to average net assets attributable to common shares:

           

before fee reduction

    1.38 %(c)      1.40     1.48     1.48     1.50     1.74

net of fee reduction, if any

    1.34 %(c)      1.40     1.48     1.19     1.50     1.72

Ratio of operating expenses to average net assets including liquidation value of preferred shares:

           

before fee reduction

    1.11 %(c)      1.10     1.12     1.15     1.14     1.22

net of fee reduction, if any

    1.07 %(c)      1.10     1.12     0.92     1.14     1.20

Portfolio turnover rate

    2.1     10.0     4.2     6.3     5.5     6.7

 

See accompanying notes to financial statements.

 

14


The Gabelli Equity Trust Inc.

Financial Highlights (Continued)

 

 

Selected data for a share outstanding throughout each period:

 

    Six Months Ended
June 30, 2014

(Unaudited)
    Year Ended December 31,  
      2013     2012     2011     2010     2009  

Cumulative Preferred Stock:

           

Auction Rate Series C

           

Liquidation value, end of period (in 000’s)

    $  72,000      $ 72,000      $ 72,000      $ 72,000      $ 72,000      $ 72,000   

Total shares outstanding (in 000’s)

    3        3        3        3        3        3   

Liquidation preference per share

    $  25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000   

Liquidation value(d)

    $  25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000   

Asset coverage per share

    $129,916      $ 128,106      $ 103,507      $ 103,593      $ 111,687      $ 99,525   

5.875% Series D

           

Liquidation value, end of period (in 000’s)

    $  59,097      $ 59,097      $ 59,097      $ 59,097      $ 59,097      $ 59,097   

Total shares outstanding (in 000’s)

    2,364        2,364        2,364        2,364        2,364        2,364   

Liquidation preference per share

    $    25.00      $ 25.00      $ 25.00      $ 25.00      $ 25.00      $ 25.00   

Average market value(e)

    $    25.14      $ 25.27      $ 25.75      $ 25.35      $ 25.03      $ 23.39   

Asset coverage per share

    $  129.92      $ 128.11      $ 103.51      $ 103.59      $ 111.69      $ 99.53   

Auction Rate Series E

           

Liquidation value, end of period (in 000’s)

    $  28,000      $ 28,000      $ 28,000      $ 28,000      $ 28,000      $ 28,000   

Total shares outstanding (in 000’s)

    1        1        1        1        1        1   

Liquidation preference per share

    $  25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000   

Liquidation value(d)

    $  25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000      $ 25,000   

Asset coverage per share

    $129,916      $ 128,106      $ 103,507      $ 103,593      $ 111,687      $ 99,525   

6.200% Series F

           

Liquidation value, end of period (in 000’s)

                       $ 146,260      $ 146,260      $ 146,260   

Total shares outstanding (in 000’s)

                         5,850        5,850        5,850   

Liquidation preference per share

                       $ 25.00      $ 25.00      $ 25.00   

Average market value(e)

                       $ 25.57      $ 25.71      $ 24.08   

Asset coverage per share

                       $ 103.59      $ 111.69      $ 99.53   

Series G

           

Liquidation value, end of period (in 000’s)

    $  70,361      $ 70,373      $ 70,413                        

Total shares outstanding (in 000’s)

    2,814        2,815        2,817                        

Liquidation preference per share

    $    25.00      $ 25.00      $ 25.00                        

Average market value(e)

    $    23.02      $ 23.91      $ 26.01                        

Asset coverage per share

    $  129.92      $ 128.11      $ 103.51                        

5.000% Series H

           

Liquidation value, end of period (in 000’s)

    $104,674      $ 104,757      $ 105,000                        

Total shares outstanding (in 000’s)

    4,187        4,190        4,200                        

Liquidation preference per share

    $    25.00      $ 25.00      $ 25.00                        

Average market value(e)

    $    22.64      $ 23.85      $ 25.55                        

Asset coverage per share

    $  129.92      $ 128.11      $ 103.51                        

Asset Coverage(f)

    520     512     414     414     447     398

 

For six months ended June 30, 2014 and the year ended 2013 based on net asset value per share, adjusted for reinvestment of distributions at net asset value on the ex-dividend date. The years ended 2012, 2011, 2010, and 2009 were based on net asset value per share, adjusted for reinvestment of distributions at prices obtained under the Fund’s dividend reinvestment plan. Total return for a period of less than one year is not annualized.

††

Based on market value per share, adjusted for reinvestment of distributions at prices determined under the Fund’s dividend reinvestment plan. Total return for a period of less than one year is not annualized.

*

Based on year to date book income. Amounts are subject to change and recharacterization at year end.

(a)

Calculated based upon average common shares outstanding on the record dates throughout the periods.

(b)

Amount represents less than $0.005 per share.

(c)

Annualized.

(d)

Since February 2008, the weekly auctions have failed. Holders that have submitted orders have not been able to sell any or all of their shares in the auctions.

(e)

Based on weekly prices.

(f)

Asset coverage is calculated by combining all series of preferred stock.

 

See accompanying notes to financial statements.

 

15


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited)

 

 

 

1. Organization. The Gabelli Equity Trust Inc. (the “Fund”) is a non-diversified closed-end management investment company organized as a Maryland corporation on May 20, 1986 and registered under the Investment Company Act of 1940, as amended (the “1940 Act”), whose primary objective is long term growth of capital with income as a secondary objective. Investment operations commenced on August 21, 1986.

The Fund will invest at least 80% of its assets in equity securities under normal market conditions (the “80% Policy”). The 80% Policy may be changed without shareholder approval. The Fund will provide shareholders with notice at least sixty days prior to the implementation of any changes in the 80% Policy.

2. Significant Accounting Policies. The Fund’s financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), which may require the use of management estimates and assumptions. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.

Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the “Adviser”).

Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of sixty days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than sixty days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded.

Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.

 

16


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:

 

   

Level 1 — quoted prices in active markets for identical securities;

   

Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and

   

Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities and other financial instruments by inputs used to value the Fund’s investments as of June 30, 2014 is as follows:

 

     Valuation Inputs     
     Level 1
Quoted Prices
  Level 2 Other Significant
Observable Inputs
   Level 3 Significant
Unobservable Inputs
   Total Market Value
at 6/30/14

INVESTMENTS IN SECURITIES:

                  

ASSETS (Market Value):

                  

Common Stocks:

                  

Energy and Utilities

     $ 96,671,688                $ 0        $ 96,671,688  

Aerospace and Defense

       45,136,993                  275,192          45,412,185  

Other Industries (a)

       1,592,607,548                           1,592,607,548  

Total Common Stocks

       1,734,416,229                  275,192          1,734,691,421  

Convertible Preferred Stocks (a)

       1,007,979                           1,007,979  

Warrants (a)

       321,924                           321,924  

Convertible Corporate Bonds (a)

               $2,316,250                   2,316,250  

TOTAL INVESTMENTS IN SECURITIES – ASSETS

     $ 1,735,746,132         $2,316,250          $275,192          $1,738,337,574  

OTHER FINANCIAL INSTRUMENTS:*

                  

LIABILITIES (Unrealized Depreciation):

                  

EQUITY CONTRACTS

                  

Futures Contracts Sold (b)

     $ (82,633 )     $        $        $ (82,633 )

 

(a)

Please refer to the Schedule of Investments (“SOI”) for the industry classifications of these portfolio holdings.

(b)

Represents cumulative unrealized depreciation of futures contracts as reported in the SOI.

*

Other financial instruments are derivatives reflected in the SOI, such as options, futures, forwards, and swaps, which may be valued at the unrealized appreciation/depreciation of the instrument.

The Fund did not have material transfers among Level 1, Level 2, and Level 3 during the six months ended June 30, 2014. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.

Additional Information to Evaluate Qualitative Information.

General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds is ultimately sourced from major stock exchanges and trading systems where these

 

17


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.

    Fair Valuation. Fair valued securities may be common and preferred equities, warrants, options, rights, and fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. Among the factors to be considered to fair value a security are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.

The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These include back testing the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.

Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing in a number of derivative financial instruments for the purposes of increasing the income of the Fund, hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase, or hedging against a specific transaction with respect to either the currency in which the transaction is denominated or another currency. Investing in certain derivative financial instruments, including participation in the options, futures, or swap markets, entails certain execution, liquidity, hedging, tax, and securities, interest, credit, or currency market risks. Losses may arise if the Adviser’s prediction of movements in the direction of the securities, foreign currency, and interest rate markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under a contract, or that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely monitored in order to minimize these risks. Participation in derivative transactions involves investment risks, transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies. The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s ability to pay distributions.

Collateral requirements differ by type of derivative. Collateral requirements are set by the broker or exchange clearing house for exchange traded derivatives, while collateral terms are contract specific for derivatives traded over-the-counter. Securities pledged to cover obligations of the Fund under derivative contracts are noted in the Schedule of Investments. Cash collateral, if any, pledged for the same purpose will be reported separately in the Statement of Assets and Liabilities.

The Fund’s policy with respect to offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the master agreement does not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The enforceability of the right to offset may vary by jurisdiction.

 

18


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

The Fund’s derivative contracts held at June 30, 2014, if any, are not accounted for as hedging instruments under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.

    Swap Agreements. The Fund may enter into equity contract for difference swap transactions for the purpose of increasing the income of the Fund. The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In an equity contract for difference swap, a set of future cash flows is exchanged between two counterparties. One of these cash flow streams will typically be based on a reference interest rate combined with the performance of a notional value of shares of a stock. The other will be based on the performance of the shares of a stock. Depending on the general state of short term interest rates and the returns on the Fund’s portfolio securities at the time an equity contract for difference swap transaction reaches its scheduled termination date, there is a risk that the Fund will not be able to obtain a replacement transaction or that the terms of the replacement will not be as favorable as on the expiring transaction.

During the six months ended June 30, 2014, the Fund held no investments in equity contract for difference swap agreements.

    Futures Contracts. The Fund may engage in futures contracts for the purpose of hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the “initial margin.” Subsequent payments (“variation margin”) are made or received by the Fund each day, depending on the daily fluctuations in the value of the contract, and are included in unrealized appreciation/depreciation on futures contracts. The Fund recognizes a realized gain or loss when the contract is closed.

There are several risks in connection with the use of futures contracts as a hedging instrument. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. Open positions in futures contracts at June 30, 2014 are reflected within the Schedule of Investments.

The Fund’s volume of equity futures contracts held during the six months ended June 30, 2014 had an average monthly notional amount while outstanding of approximately $17,461,928.

At June 30, 2014, the Fund’s derivative liabilities (by type) are as follows:

 

          Gross Amounts Not Offset in the
Statement of Assets and Liabilities
    
     Gross Amounts of
Recognized Liabilities
Presented in the
Statement of Assets
and Liabilities
   Gross Amounts
Available for Offset
in the Statement of
Assets and Liabilities
   Financial
Instruments
   Cash
Collateral
Pledged
   Net Amount

Liabilities

                      

Futures Contracts

   $1,466                                   $1,466  

 

19


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

For the six months ended June 30, 2014, the effect of equity futures contracts can be found in the Statement of Operations under Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign Currency, Net realized loss on futures contracts, and Net change in unrealized appreciation/depreciation on futures contracts.

Limitations on the Purchase and Sale of Futures Contracts, Certain Options, and Swaps. Subject to the guidelines of the Board, the Fund may engage in “commodity interest” transactions (generally, transactions in futures, certain options, certain currency transactions, and certain types of swaps) only for bona fide hedging or other permissible transactions in accordance with the rules and regulations of the Commodity Futures Trading Commission (“CFTC”). Pursuant to amendments by the CFTC to Rule 4.5 under the Commodity Exchange Act (“CEA”), the Adviser has filed a notice of exemption from registration as a “commodity pool operator” with respect to the Fund. The Fund and the Adviser are therefore not subject to registration or regulation as a commodity pool operator under the CEA. In addition, certain trading restrictions are now applicable to the Fund as of January 1, 2013. These trading restrictions permit the Fund to engage in commodity interest transactions that include (i) “bona fide hedging” transactions, as that term is defined and interpreted by the CFTC and its staff, without regard to the percentage of the Fund’s assets committed to margin and options premiums and (ii) non-bona fide hedging transactions, provided that the Fund does not enter into such non-bona fide hedging transactions if, immediately thereafter, either (a) the sum of the amount of initial margin deposits on the Fund’s existing futures positions or swaps positions and option or swaption premiums would exceed 5% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on any such transactions, or (b) the aggregate net notional value of the Fund’s commodity interest transactions would not exceed 100% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on any such transactions. Therefore, in order to claim the Rule 4.5 exemption, the Fund is limited in its ability to invest in commodity futures, options, and certain types of swaps (including securities futures, broad based stock index futures, and financial futures contracts). As a result, in the future, the Fund will be more limited in its ability to use these instruments than in the past, and these limitations may have a negative impact on the ability of the Adviser to manage the Fund, and on the Fund’s performance.

Investments in Other Investment Companies. The Fund may invest, from time to time, in shares of other investment companies (or entities that would be considered investment companies but are excluded from the definition pursuant to certain exceptions under the 1940 Act) (the “Acquired Funds”) in accordance with the 1940 Act and related rules. Shareholders in the Fund would bear the pro rata portion of the periodic expenses of the Acquired Funds in addition to the Fund’s expenses. For the six months ended June 30, 2014, the Fund’s pro rata portion of the periodic expenses charged by the Acquired Funds was less than 1 basis point.

Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade

 

20


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

date and settlement date on investment securities transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments.

Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.

Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

Restricted Securities. The Fund may invest up to 10% of its net assets in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. For the restricted securities the Fund held as of June 30, 2014, refer to the Schedule of Investments.

Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/(loss) on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.

Custodian Fee Credits and Interest Expense. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as “Custodian fee credits.” When cash balances are overdrawn, the Fund is charged an overdraft fee equal to 110% of the 90 day Treasury Bill rate on outstanding balances. This amount, if any, would be included in the Statement of Operations.

Distributions to Shareholders. Distributions to common shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities and

 

21


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

foreign currency transactions held by the Fund, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income for federal income tax purposes include net realized gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund.

Under the Fund’s current common share distribution policy, the Fund declares and pays quarterly distributions from net investment income, capital gains, and paid-in capital. The actual source of the distribution is determined after the end of the year. Pursuant to this policy, distributions during the year may be made in excess of required distributions. To the extent such distributions are made from current earnings and profits, they are considered ordinary income or long term capital gains. The Fund’s current distribution policy may restrict the Fund’s ability to pass through to shareholders all of its net realized long term capital gains as a Capital Gain Dividend and may cause such gains to be treated as ordinary income. Distributions sourced from paid-in capital should not be considered as dividend yield or the total return from an investment in the Fund. The Board will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s NAV and the financial market environment. The Fund’s distribution policy is subject to modification by the Board at any time.

Distributions to shareholders of the Fund’s Series C Auction Rate Cumulative Preferred Stock, 5.875% Series D Cumulative Preferred Stock, Series E Auction Rate Cumulative Preferred Stock, Series G Cumulative Preferred Stock, and 5.00% Series H Cumulative Preferred Stock (“Preferred Stock”) are recorded on a daily basis and are determined as described in Note 5.

The tax character of distributions paid during the year ended December 31, 2013 was as follows:

 

     Common      Preferred  

Distributions paid from:

     

Ordinary income.

   $ 21,142,024       $ 2,306,290   

Net long term capital gains

     95,940,599         10,465,739   
  

 

 

    

 

 

 

Total distributions paid

   $ 117,082,623       $ 12,772,029   
  

 

 

    

 

 

 

Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.

As of December 31, 2013, the components of accumulated earnings/losses on a tax basis were as follows:

 

Net unrealized appreciation on investments, futures contracts, and foreign currency translations

   $ 820,059,398   

Other temporary differences*

     1,432,214   
  

 

 

 

Total.

   $ 821,491,612   
  

 

 

 

 

*

Other temporary differences were primarily due to mark-to-market adjustments on futures contracts.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward for an unlimited period capital losses incurred. As a result of the rule, post enactment capital losses that are carried forward will retain their character as either short term or long term capital losses.

 

22


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

The following summarizes the tax cost of investments and the related net unrealized appreciation at June 30, 2014:

 

     Cost      Gross
Unrealized
Appreciation
     Gross
Unrealized
Depreciation
     Net Unrealized
Appreciation
 

Investments

   $ 849,640,996       $ 915,525,930       $ (26,829,352    $ 888,696,578   

The Fund is required to evaluate tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. For the six months ended June 30, 2014, the Fund did not incur any income tax, interest, or penalties. As of June 30, 2014, the Adviser has reviewed all open tax years and concluded that there was no impact to the Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this conclusion are necessary.

3. Agreements and Transactions with Affiliates. The Fund has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed weekly and paid monthly, equal on an annual basis to 1.00% of the value of the Fund’s average weekly net assets including the liquidation value of preferred stock. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio and oversees the administration of all aspects of the Fund’s business and affairs.

The Adviser has agreed to reduce the management fee on the incremental assets attributable to the Series C, Series D, and Series E Preferred Stock (“C, D, and E Preferred Stock”) if the total return of the NAV of the common shares of the Fund, including distributions and advisory fee subject to reduction, does not exceed the stated dividend rate or corresponding swap rate of the C, D, and E Preferred Stock for the year. The Fund’s total return on the NAV of the common shares is monitored on a monthly basis to assess whether the total return on the NAV of the common shares exceeds the stated dividend rate of the C, D, and E Preferred Stock for the period. For the six months ended June 30, 2014, the Fund’s total return on the NAV of the common shares exceeded the dividend rate of the outstanding C and E Preferred Stock, but not on the outstanding D Preferred Stock. Thus, advisory fees were accrued on the liquidation value of the C and E Preferred Stock, and advisory fees on the liquidation value of the D Preferred Stock were reduced by $293,054.

During the six months ended June 30, 2014, the Fund paid brokerage commissions on security trades of $19,977 to G.research, Inc., an affiliate of the Adviser.

The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the six months ended June 30, 2014, the Fund paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.

As per the approval of the Board, the Fund compensates officers of the Fund, who are employed by the Fund and are not employed by the Adviser (although the officers may receive incentive based variable compensation from affiliates of the Adviser). For the six months ended June 30, 2014, the Fund paid or accrued $79,113 in payroll expenses in the Statement of Operations.

 

23


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

There was a reduction in the advisory fee paid to the Adviser relating to certain portfolio holdings, i.e., unsupervised assets, of the Fund with respect to which the Adviser transferred dispositive and voting control to the Fund’s Proxy Voting Committee. During the six months ended June 30, 2014, the Fund’s Proxy Voting Committee exercised control and discretion over all rights to vote or consent with respect to such securities, and the Adviser reduced its fee with respect to such securities by $696.

The Fund pays each Director who is not considered an affiliated person an annual retainer of $15,000 plus $2,000 for each Board meeting attended. Each Director is reimbursed by the Fund for any out of pocket expenses incurred in attending meetings. All Board committee members receive $1,000 per meeting attended. The Audit Committee Chairman receives an annual fee of $3,000, the Proxy Voting Committee Chairman receives an annual fee of $1,500, and the Nominating Committee Chairman and the Lead Director each receive an annual fee of $2,000. A Director may receive a single meeting fee, allocated among the participating funds, for participation in certain meetings held on behalf of multiple funds. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.

4. Portfolio Securities. Purchases and sales of securities during the six months ended June 30, 2014, other than short term securities and U.S. Government obligations, aggregated $35,330,501 and $48,567,489, respectively.

5. Capital. The Fund’s Articles of Incorporation, as amended, permit the Fund to issue 246,000,000 shares of common stock (par value $0.001) and authorizes the Board to increase its authorized shares from time to time. The Board has authorized the repurchase of its shares on the open market when the shares are trading on the NYSE at a discount of 10% or more (or such other percentage as the Board may determine from time to time) from the NAV of the shares. During the six months ended June 30, 2014 and the year ended December 31, 2013, the Fund did not repurchase any shares of its common stock in the open market.

Transactions in common shares were as follows:

 

     Six Months Ended
June 30, 2014
(Unaudited)
     Year Ended
December 31, 2013
 
     Shares      Amount      Shares      Amount  

Net increase from common shares issued upon reinvestment of distributions

     1,235,151       $ 9,042,602         2,888,148       $ 18,998,599   

A shelf registration authorizing the offering of an additional $500 million of common or preferred shares was declared effective by the SEC on May 22, 2013.

The Fund’s Articles of Incorporation, as amended, authorize the issuance of up to 18,000,000 shares of $0.001 par value Preferred Stock. The Preferred Stock is senior to the common stock and results in the financial leveraging of the common stock. Such leveraging tends to magnify both the risks and opportunities to common shareholders. Dividends on shares of the Preferred Stock are cumulative. The Fund is required by the 1940 Act and by the Articles Supplementary to meet certain asset coverage tests with respect to the Preferred Stock. If the Fund fails to meet these requirements and does not correct such failure, the Fund may be required to redeem, in part or in full, the Series C, Series D, Series E, Series G, and Series H Preferred Stock at redemption prices of $25,000, $25, $25,000, $25, and $25, respectively, per share plus an amount equal to the accumulated and unpaid dividends whether or not declared on such shares in order to meet these requirements. Additionally,

 

24


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

failure to meet the foregoing asset coverage requirements could restrict the Fund’s ability to pay dividends to common shareholders and could lead to sales of portfolio securities at inopportune times. The income received on the Fund’s assets may vary in a manner unrelated to the fixed and variable rates, which could have either a beneficial or detrimental impact on net investment income and gains available to common shareholders.

For Series C and Series E Preferred Stocks, the dividend rates, as set by the auction process that is generally held every seven days, are expected to vary with short term interest rates. Since February 2008, the number of shares of Series C and Series E Preferred Stock subject to bid orders by potential holders has been less than the number of shares of Series C and Series E Preferred Stock subject to sell orders. Holders that have submitted sell orders have not been able to sell any or all of the Series C and Series E Preferred Stock for which they have submitted sell orders. Therefore the weekly auctions have failed, and the dividend rate has been the maximum rate. For Series C and Series E Preferred Stock, the maximum auction rate is 175% of the “AA” Financial Composite Commercial Paper Rate. Existing Series C and Series E shareholders may submit an order to hold, bid, or sell such shares on each auction date, or trade their shares in the secondary market.

The Fund may redeem at anytime, in whole or in part, the Series C, Series D, and Series E Preferred Stock at their respective redemption prices. In addition, the Board has authorized the repurchase of Series D Preferred Stock in the open market at prices less than the $25 liquidation value per share. During the six months ended June 30, 2014 and the year ended December 31, 2013, the Fund did not repurchase or redeem any shares of Series C, Series D, and Series E Preferred Stock.

Commencing July 31, 2017 and September 27, 2017, and anytimes thereafter, the Fund at its option, may redeem the Series G and Series H Preferred Stock, respectively, in whole or in part at the redemption price. In addition, the Board has authorized the repurchase of the Series G and Series H Preferred Stock in the open market at prices less than the $25 liquidation value per share. During the six months ended June 30, 2014, the Fund repurchased 500 shares and 3,300 shares of the Series G and Series H Preferred Stock, respectively.

The following table summarizes Cumulative Preferred Stock information:

 

Series    Issue Date    Issued/
Authorized
   Number of Shares
Outstanding at
06/30/2014
   Net Proceeds    2014 Dividend
Rate Range
   Dividend
Rate at
06/30/2014
   Accrued
Dividends at
06/30/2014

C Auction Rate

       June 27, 2002          5,200          2,880        $ 128,246,557      0.07% to 0.14%    0.123%      $ 1,476  

D 5.875%

       October 7, 2003          3,000,000          2,363,860        $ 72,375,842      Fixed Rate    5.875%      $ 48,221  

E Auction Rate

       October 7, 2003          2,000          1,120        $ 49,350,009      0.07% to 0.123%    0.123%      $ 383  

G 5.000%

       August 1, 2012          2,816,524          2,814,424        $ 69,812,243      Fixed Rate    5.000%      $ 48,862  

H 5.000%

       September 28, 2012          4,200,000          4,186,973        $ 101,167,500      Fixed Rate    5.000%      $ 72,691  

The holders of Preferred Stock generally are entitled to one vote per share held on each matter submitted to a vote of shareholders of the Fund and will vote together with holders of common stock as a single class. The holders of Preferred Stock voting together as a single class also have the right currently to elect two Directors and under certain circumstances are entitled to elect a majority of the Board of Directors. In addition, the affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding shares of the preferred stock, voting as a single class, will be required to approve any plan of reorganization adversely affecting the preferred stock, and the approval of two-thirds of each class, voting separately, of the Fund’s outstanding voting stock must approve the conversion of the Fund from a closed-end to an open-end investment company. The approval of a majority (as defined in the 1940 Act) of the outstanding preferred stock and a majority (as defined in the

 

25


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

 

1940 Act) of the Fund’s outstanding voting securities are required to approve certain other actions, including changes in the Fund’s investment objectives or fundamental investment policies.

6. Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.

7. Other Matters. On April 24, 2008, the Adviser entered into a settlement with the SEC to resolve an inquiry regarding prior frequent trading in shares of the GAMCO Global Growth Fund (the “Global Growth Fund”) by one investor who was banned from the Global Growth Fund in August 2002. Under the terms of the settlement, the Adviser, without admitting or denying the SEC’s findings and allegations, paid $16 million (which included a $5 million civil monetary penalty). On the same day, the SEC filed a civil action in the U.S. District Court for the Southern District of New York (the “Court”) against the Executive Vice President and Chief Operating Officer (the “Officer”) of the Adviser, alleging violations of certain federal securities laws arising from the same matter. On May 2, 2014, the SEC filed with the Court a stipulation of voluntary dismissal of the civil action against the Officer, and on June 19, 2014, the Court approved the stipulation and entered an order of dismissal of the action against the Officer. The settlement by the Adviser and the disposition of the action against the Officer did not have a material adverse impact on the Adviser or its ability to fulfill its obligations under the Advisory Agreement.

8. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

Shareholder Meeting – May 12, 2014 – Final Results

The Fund’s Annual Meeting of Shareholders was held on May 12, 2014 at the Greenwich Library in Greenwich, Connecticut. At that meeting, common and preferred shareholders, voting together as a single class, elected Frank J. Fahrenkopf, Jr. and Salvatore J. Zizza as Directors of the Fund. A total of 146,956,378 votes and 147,083,902 votes were cast in favor of these Directors, and a total of 4,491,225 votes and 4,363,701 votes were withheld for these Directors, respectively. In addition, preferred shareholders, voting as a separate class, elected Anthony J. Colavita as a Director of the Fund. A total of 7,863,888 votes were cast in favor of this Director and a total of 498,044 votes were withheld for this Director.

Mario J. Gabelli, CFA, James P. Conn, Arthur V. Ferrara, William F. Heitmann, and Anthony R. Pustorino continue to serve in their capacities as Directors of the Fund.

We thank you for your participation and appreciate your continued support.

Certifications

The Fund’s Chief Executive Officer has certified to the New York Stock Exchange (“NYSE”) that, as of June 11, 2014, he was not aware of any violation by the Fund of applicable NYSE corporate governance listing standards. The Fund reports to the SEC on Form N-CSR which contains certifications by the Fund’s principal executive officer and principal financial officer that relate to the Fund’s disclosure in such reports and that are required by Rule 30a-2(a) under the 1940 Act.

 

26


The Gabelli Equity Trust Inc.

Board Consideration and Re-Approval of Investment Advisory Agreements (Unaudited)

Section 15(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), contemplates that the Board of Directors (the “Board”) of The Gabelli Equity Trust Inc. (the “Fund”), including a majority of the Directors who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Fund, as defined in the 1940 Act (the “Independent Board Members”), are required to annually review and re-approve the terms of the Fund’s existing investment advisory agreement and approve any newly proposed terms therein. In this regard, the Board reviewed and re-approved, during the most recent six month period covered by this report, the Investment Advisory Agreement (the “Advisory Agreement”) with Gabelli Funds, LLC (the “Adviser”) for the Fund.

More specifically, at a meeting held on May 13, 2014, the Board, including the Independent Board Members, considered the factors and reached the conclusions described below relating to the selection of the Adviser and the re-approval of the Advisory Agreement.

Nature, Extent, and Quality of Services.

The Independent Board Members considered the nature, quality, and extent of administrative and shareholder services performed by the Adviser, including portfolio management, supervision of Fund operations and compliance and regulatory filings and disclosures to shareholders, general oversight of other service providers, review of Fund legal issues, assisting the Independent Board Members in their capacity as directors, and other services. The Independent Board Members concluded that the services are extensive in nature and that the Adviser consistently delivered a high level of service.

Investment Performance of the Fund and Adviser.

The Independent Board Members considered short term and long term investment performance for the Fund over various periods of time as compared with relevant equity indices and the performance of other core, growth, and value equity closed-end funds included in the Lipper peer group. The Independent Board Members noted that the Fund’s total return performance was above the peer average and peer median for the one, three, five, and ten year periods ended March 31, 2014. The Independent Board Members concluded that the Adviser was delivering satisfactory performance results consistent with the investment strategies being pursued by the Fund.

Costs of Services and Profits Realized by the Adviser.

(a) Costs of Services to Fund: Fees and Expenses. The Independent Board Members considered the Fund’s management fee rate and expense ratio relative to industry averages for the Fund’s Lipper peer group category and the advisory fees charged by the Adviser and its affiliates to other fund and non-fund clients. The Independent Board Members noted that the mix of services under the Advisory Agreement is much more extensive than those under the advisory agreements for non-fund clients. The Independent Board Members noted that the “other non-management expenses” paid by the Fund are below the average and median for its peer group, but that the total expenses were above the average and median for peer funds and that management and gross advisory fees were at the high end of the peer group range. They took note of the fact that the use of leverage impacts comparative expenses to peer funds, not all of which utilize leverage. The Independent Board Members were aware that the Adviser waives its fee on the incremental liquidation value of the Fund’s Series C, Series D, and Series E preferred stock if the total return on net asset value of the common stock does not exceed the stated dividend rate or net swap expense for the Series C, Series D, and Series E preferred stock, as applicable, for the year after consideration of the reinvestment of distributions and the management fees attributable to the incremental liquidation value of the Series C, Series D, and Series E preferred stock, and that the comparative “total expense ratio” and “other expense” information reflected these waivers, if applicable. The Independent

 

27


The Gabelli Equity Trust Inc.

Board Consideration and Re-Approval of Investment Advisory Agreements (Unaudited) (Continued)

Board Members concluded that the fee is acceptable based upon the qualifications, experience, reputation, and performance of the Adviser.

(b) Profitability and Costs of Services to Adviser. The Independent Board Members considered the Adviser’s overall profitability and costs, and pro forma estimates of the Adviser’s profitability and costs attributable to the Fund as part of the Gabelli/GAMCO funds complex and assuming the Fund constituted the Adviser’s only investment company under its management. The Independent Board Members also considered whether the amount of profit is a fair entrepreneurial profit for the management of the Fund and noted that the Adviser has substantially increased its resources devoted to Fund matters in response to regulatory requirements and new or enhanced Fund policies and procedures. The Independent Board Members concluded that the absolute fee was reasonable despite the absence of breakpoints, particularly in light of the above average performance over time.

Extent of Economies of Scale as Fund Grows.

The Independent Board Members considered whether there have been economies of scale with respect to the management of the Fund and whether the Fund has appropriately benefited from any economies of scale. The Independent Board Members noted that economies of scale may develop for certain funds as their assets increase and their fund level expenses decline as a percentage of assets, but that fund level economies of scale may not necessarily result in Adviser level economies of scale.

Whether Fee Levels Reflect Economies of Scale.

The Independent Board Members also considered whether the management fee rate is reasonable in relation to the asset size of the Fund and any economies of scale that may exist, and concluded that the Fund’s current fee schedule (without breakpoints) was considered reasonable. Nonetheless, the Independent Board Members determined that Mr. Conn would reach out to the Adviser to discuss breakpoints for the Fund.

Other Relevant Considerations.

(a) Adviser Personnel and Methods. The Independent Board Members considered the size, education, and experience of the Adviser’s staff, the Adviser’s fundamental research capabilities, and the Adviser’s approach to recruiting, training, and retaining portfolio managers and other research and management personnel, and concluded that, in each of these areas, the Adviser was structured in such a way to support the high level of services being provided to the Fund.

(b) Other Benefits to the Adviser. The Independent Board Members also considered the character and amount of other incidental benefits received by the Adviser and its affiliates from its association with the Fund. The Independent Board Members considered the brokerage commissions paid to an affiliate of the Adviser. The Independent Board Members concluded that potential “fall-out” benefits that the Adviser and its affiliates may receive, such as affiliated brokerage commissions, greater name recognition, or increased ability to obtain research services, appear to be reasonable, and may in some cases benefit the Fund.

Conclusions.

In considering the Advisory Agreement, the Independent Board Members did not identify any factor as all important or all controlling, and instead considered these factors collectively in light of the Fund’s surrounding circumstances. Based on this review, it was the judgment of the Independent Board Members that shareholders had received satisfactory absolute and relative performance over time consistent with the investment strategies being pursued by the Fund at reasonable fees and, therefore, re-approval of the Agreement was in the best interests of the

 

28


The Gabelli Equity Trust Inc.

Board Consideration and Re-Approval of Investment Advisory Agreements (Unaudited) (Continued)

Fund and its shareholders. As a part of its decision making process, the Independent Board Members noted that the Adviser has managed the Fund since its inception, and the Independent Board Members believe that a long term relationship with a capable, conscientious adviser is in the best interests of the Fund. The Independent Board Members considered, generally, that shareholders invested in the Fund knowing that the Adviser managed the Fund and knowing its investment management fee schedule. As such, the Independent Board Members considered, in particular, whether the Adviser managed the Fund in accordance with its investment objectives and policies as disclosed to shareholders. The Independent Board Members concluded that the Fund was managed by the Adviser consistent with its investment objectives and policies.

 

29


AUTOMATIC DIVIDEND REINVESTMENT

AND VOLUNTARY CASH PURCHASE PLANS

Enrollment in the Plan

It is the policy of The Gabelli Equity Trust Inc. (the “Fund”) to automatically reinvest dividends payable to common shareholders. As a “registered” shareholder, you automatically become a participant in the Fund’s Automatic Dividend Reinvestment Plan (the “Plan”). The Plan authorizes the Fund to credit shares of common stock to participants upon an income dividend or a capital gains distribution regardless of whether the shares are trading at a discount or a premium to net asset value. All distributions to shareholders whose shares are registered in their own names will be automatically reinvested pursuant to the Plan in additional shares of the Fund. Plan participants may send their stock certificates to Computershare Trust Company, N.A. (“Computershare”) to be held in their dividend reinvestment account. Registered shareholders wishing to receive their distribution in cash must submit this request in writing to:

The Gabelli Equity Trust Inc.

c/o Computershare

P.O. Box 30170

College Station, TX 77842-3170

Shareholders requesting this cash election must include the shareholder’s name and address as they appear on the share certificate. Shareholders with additional questions regarding the Plan or requesting a copy of the terms of the Plan may contact Computershare at (800) 336-6983.

If your shares are held in the name of a broker, bank, or nominee, you should contact such institution. If such institution is not participating in the Plan, your account will be credited with a cash dividend. In order to participate in the Plan through such institution, it may be necessary for you to have your shares taken out of “street name” and re-registered in your own name. Once registered in your own name, your dividends will be automatically reinvested. Certain brokers participate in the Plan. Shareholders holding shares in “street name” at participating institutions will have dividends automatically reinvested. Shareholders wishing a cash dividend at such institution must contact their broker to make this change.

The number of shares of common stock distributed to participants in the Plan in lieu of cash dividends is determined in the following manner. Under the Plan, whenever the market price of the Fund’s common stock is equal to or exceeds net asset value at the time shares are valued for purposes of determining the number of shares equivalent to the cash dividends or capital gains distribution, participants are issued shares of common stock valued at the greater of (i) the net asset value as most recently determined or (ii) 95% of the then current market price of the Fund’s common stock. The valuation date is the dividend or distribution payment date or, if that date is not a New York Stock Exchange (“NYSE”) trading day, the next trading day. If the net asset value of the common stock at the time of valuation exceeds the market price of the common stock, participants will receive shares from the Fund valued at market price. If the Fund should declare a dividend or capital gains distribution payable only in cash, Computershare will buy common stock in the open market, or on the NYSE or elsewhere, for the participants’ accounts, except that Computershare will endeavor to terminate purchases in the open market and cause the Fund to issue shares at net asset value if, following the commencement of such purchases, the market value of the common stock exceeds the then current net asset value.

The automatic reinvestment of dividends and capital gains distributions will not relieve participants of any income tax which may be payable on such distributions. A participant in the Plan will be treated for federal income tax purposes as having received, on a dividend payment date, a dividend or distribution in an amount equal to the cash the participant could have received instead of shares.

Voluntary Cash Purchase Plan

The Voluntary Cash Purchase Plan is yet another vehicle for our shareholders to increase their investment in the Fund. In order to participate in the Voluntary Cash Purchase Plan, shareholders must have their shares registered in their own name.

Participants in the Voluntary Cash Purchase Plan have the option of making additional cash payments to Computershare for investments in the Fund’s shares at the then current market price. Shareholders may send an amount from $250 to $10,000. Computershare will use these funds to purchase shares in the open market on or about the 1st and 15th of each month. Computershare will charge each shareholder who participates $0.75, plus a pro rata share of the brokerage commissions. Brokerage charges for such purchases are expected to be less than the usual brokerage charge for such transactions. It is suggested that any voluntary cash payments be sent to Computershare, P.O. Box 43010, Providence, RI 02940–3010 such that Computershare receives such payments approximately 10 days before the 1st and 15th of the month. Funds not received at least five days before the investment date shall be held for investment until the next purchase date. A payment may be withdrawn without charge if notice is received by Computershare at least 48 hours before such payment is to be invested.

Shareholders wishing to liquidate shares held at Computershare must do so in writing or by telephone. Please submit your request to the above mentioned address or telephone number. Include in your request your name, address, and account number. The cost to liquidate shares is $2.50 per transaction as well as the brokerage commission incurred. Brokerage charges are expected to be less than the usual brokerage charge for such transactions.

For more information regarding the Dividend Reinvestment Plan and Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070 or by writing directly to the Fund.

The Fund reserves the right to amend or terminate the Plan as applied to any voluntary cash payments made and any dividend or distribution paid subsequent to written notice of the change sent to the members of the Plan at least 90 days before the record date for such dividend or distribution. The Plan also may be amended or terminated by Computershare on at least 90 days written notice to participants in the Plan.

 

30


THE GABELLI EQUITY TRUST INC.

One Corporate Center

Rye, NY 10580-1422

Portfolio Management Team Biographies

Mario J. Gabelli, CFA, is Chairman and Chief Executive Officer of GAMCO Investors, Inc. that he founded in 1977 and Chief Investment Officer – Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.

Christopher J. Marangi joined Gabelli in 2003 as a research analyst. He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Funds Complex. Mr. Marangi graduated magna cum laude and Phi Beta Kappa with a BA in Political Economy from Williams College and holds an MBA with honors from Columbia Business School.

Kevin V. Dreyer joined Gabelli in 2005 as a research analyst covering companies within the consumer sector. He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Funds Complex. Mr. Dreyer received a BSE from the University of Pennsylvania and an MBA from Columbia Business School.

 

 

 

 

 

 

 

 

 

 

We have separated the portfolio managers’ commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio managers’ commentary is unrestricted. The financial statements and investment portfolio are mailed separately from the commentary. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.

The Net Asset Value per share appears in the Publicly Traded Funds column, under the heading “General Equity Funds,” in Monday’s The Wall Street Journal. It is also listed in Barron’s Mutual Funds/Closed End Funds section under the heading “General Equity Funds.”

The Net Asset Value per share may be obtained each day by calling (914) 921-5070 or visiting www.gabelli.com.

The NASDAQ symbol for the Net Asset Value is “XGABX.”

 

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may, from time to time, purchase its common shares in the open market when the Fund’s shares are trading at a discount of 10% or more from the net asset value of the shares. The Fund may also, from time to time, purchase its preferred shares in the open market when the preferred shares are trading at a discount to the liquidation value.


THE GABELLI EQUITY TRUST INC.

One Corporate Center

Rye, NY 10580-1422

 

t

800-GABELLI (800-422-3554)

f

914-921-5118

e

info@gabelli.com

  

GABELLI.COM

 

 

DIRECTORS

 

Mario J. Gabelli, CFA

Chairman & Chief Executive Officer,

GAMCO Investors, Inc.

 

Anthony J. Colavita

President,

Anthony J. Colavita, P.C.

 

James P. Conn

Former Managing Director &

Chief Investment Officer,

Financial Security Assurance

Holdings Ltd.

 

Frank J. Fahrenkopf, Jr.

Former President &

Chief Executive Officer,

American Gaming Association

 

Arthur V. Ferrara

Former Chairman &

Chief Executive Officer,

Guardian Life Insurance

Company of America

 

William F. Heitmann

Former Senior Vice President

of Finance,

Verizon Communications, Inc.

 

Anthony R. Pustorino

Certified Public Accountant,

Professor Emeritus,

Pace University

 

Salvatore J. Zizza

Chairman,

Zizza & Associates Corp.

  

OFFICERS

 

Bruce N. Alpert

President

 

Andrea R. Mango

Secretary & Vice President

 

Agnes Mullady

Treasurer

 

Richard J. Walz

Chief Compliance Officer

 

Carter W. Austin

Vice President

 

Molly A.F. Marion

Vice President & Ombudsman

 

David I. Schachter

Vice President

 

INVESTMENT ADVISER

 

Gabelli Funds, LLC

One Corporate Center

Rye, New York 10580-1422

 

CUSTODIAN

 

The Bank of New York Mellon

 

COUNSEL

 

Willkie Farr & Gallagher LLP

 

TRANSFER AGENT AND

REGISTRAR

 

Computershare Trust Company, N.A.

 

 

 

 

 

GAB Q2/2014

LOGO

 


Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed registrants.

Not applicable.

Item 6. Investments.

 

(a)

Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.

 

(b) Not applicable.

 

Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.


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 9.  Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

REGISTRANT PURCHASES OF EQUITY SECURITIES

 

Period

 

 

(a) Total Number of
Shares (or Units)
Purchased

 

 

(b) Average Price Paid
per Share (or Unit)

 

 

(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs

 

 

(d) Maximum Number (or
Approximate Dollar Value)
of Shares (or Units) that  May
Yet Be Purchased Under the
Plans or Programs

 

Month #1   01/01/14

through

01/31/14

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

 

Common – 190,604,128

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,814,924

 

Preferred Series H – 4,190,273

 

Month #2

02/01/14

through

02/28/14

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 500

 

Preferred Series H – 3,300

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – $22.30

 

Preferred Series H – $22.65

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 500

 

Preferred Series H – 3,300

 

Common – 190,604,128

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,814,424

 

Preferred Series H – 4,186,973

 

Month #3

03/01/14

through

03/31/14

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – 191,218,620

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,814,424

 

Preferred Series H – 4,186,973

 

Month #4

4/01/14

through

4/30/14

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Common – 191,218,620

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,814,424

 

Preferred Series H – 4,186,973

 

Month #5

5/01/14

through

5/31/14

 

 

Common – N/A

 

Preferred Series D – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Common – 191,218,620

 

Preferred Series D – 2,363,860

 


   

Preferred Series G – N/A

 

Preferred Series H – N/A

 

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

 

Preferred Series G – 2,814,424

 

Preferred Series H – 4,186,973

 

Month 6/01/14 through 6/30/14  

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

 

Common – 191,839,279

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,814,424

 

Preferred Series H – 4,186,973

 

Total  

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 500

 

Preferred Series H – 3,300

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – $22.30

 

Preferred Series H – $22.65

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 500

 

Preferred Series H – 3,300

 

  N/A

Footnote columns (c) and (d) of the table, by disclosing the following information in the aggregate for all plans or programs publicly announced:

 

a. The date each plan or program was announced – The notice of the potential repurchase of common and preferred shares occurs quarterly in the Fund’s quarterly report in accordance with Section 23(c) of the Investment Company Act of 1940, as amended.

 

b. The dollar amount (or share or unit amount) approved – Any or all common shares outstanding may be repurchased when the Fund’s common shares are trading at a discount of 10% or more from the net asset value of the shares.

 

   Any or all preferred shares outstanding may be repurchased when the Fund’s preferred shares are trading at a discount to the liquidation value of $25.00.

 

c. The expiration date (if any) of each plan or program – The Fund’s repurchase plans are ongoing.

 

d. Each plan or program that has expired during the period covered by the table – The Fund’s repurchase plans are ongoing.

 

e. Each plan or program the registrant has determined to terminate prior to expiration, or under which the registrant does not intend to make further purchases. – The Fund’s repurchase plans are ongoing.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s Board of Directors, where those changes were implemented after the


registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 11. 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, as amended (the “1940 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 their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  (b) 

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s 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 12. Exhibits.

 

    (a)(1)   Not applicable.
    (a)(2)  

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

    (a)(3)   Not applicable.
    (b)  

Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.


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.

 

(Registrant)     The Gabelli Equity Trust Inc.                                                                                              
By (Signature and Title)*    /s/ Bruce N. Alpert   
       Bruce N. Alpert, Principal Executive Officer   
Date    9/4/2014                                                                                                                                             

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 (Signature and Title)*    /s/ Bruce N. Alpert   
       Bruce N. Alpert, Principal Executive Officer   
Date    9/4/2014                                                                                                                                             
By (Signature and Title)*    /s/ Agnes Mullady   
       Agnes Mullady, Principal Financial Officer and Treasurer   
Date    9/4/2014                                                                                                                                             

 

* Print the name and title of each signing officer under his or her signature.