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, 2017

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, 450 Fifth Street, NW, Washington, DC 20549-0609. 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, 2017

(Y)our Portfolio Management Team

 

LOGO   LOGO   LOGO   LOGO   LOGO

Mario J. Gabelli, CFA

Chief Investment Officer

 

Christopher J. Marangi

Co-Chief Investment Officer

BA, Williams College

MBA, Columbia

Business School

 

Kevin V. Dreyer

Co-Chief Investment Officer
BSE, University of

Pennsylvania

MBA, Columbia

Business School

 

Robert D. Leininger, CFA

Portfolio Manager

BA, Amherst College

MBA, Wharton School,

University of Pennsylvania

 

Daniel M. Miller

Managing Director,

GAMCO Investors

BS, University of Miami

To Our Shareholders,

For the six months ended June 30, 2017, the net asset value (“NAV”) total return of The Gabelli Equity Trust Inc. (the “Fund”) was 11.0%, compared with total returns of 9.3% and 9.4% 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 13.7%. The Fund’s NAV per share was $6.18, while the price of the publicly traded shares closed at $6.18 on the New York Stock Exchange (“NYSE”). See below for additional performance information.

Enclosed are the financial statements, including the schedule of investments, as of June 30, 2017.

Comparative Results

Average Annual Returns through June 30, 2017 (a) (Unaudited)  
     Year to Date   1 Year   5 Year   10 Year   15 Year   20 Year   25 Year   Since
Inception
(08/21/86)

Gabelli Equity Trust

                                

NAV Total Return (b)

       11.04 %       18.30 %       14.12 %       6.91 %       10.39 %       9.35 %       10.52 %       10.83 %

Investment Total Return (c)

       13.65       24.58       14.17       6.86       8.31       9.56       10.42       10.59

S&P 500 Index

       9.34       17.90       14.63       7.18       8.34       7.15       9.66       10.08 (d)

Dow Jones Industrial Average

       9.36       22.07       13.39       7.53       8.42       7.70       10.31       11.01 (d)

Nasdaq Composite Index

       14.75       28.37       17.45       10.23       11.22       8.47       10.02       9.75 (e)

 

  (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 are available.

 
  (e)

From September 30, 1986, the date closest to the Fund’s inception for which data are available.

 


Summary of Portfolio Holdings (Unaudited)

The following table presents portfolio holdings as a percent of total investments as of June 30, 2017:

The Gabelli Equity Trust Inc.

 

Food and Beverage

     12.0

Financial Services

     10.1

Entertainment

     6.6

Equipment and Supplies

     5.9

Health Care

     5.1

Diversified Industrial

     5.0

Consumer Services

     4.5

Consumer Products

     4.2

Energy and Utilities

     3.9

Automotive: Parts and Accessories

     3.6

Cable and Satellite

     3.4

Business Services

     3.4

Telecommunications

     3.2

Retail

     2.7

Machinery

     2.5

Broadcasting

     2.5

Electronics

     2.4

Specialty Chemicals

     2.3

Aerospace and Defense

     2.2

Hotels and Gaming

     1.9

Environmental Services

     1.6

Aviation: Parts and Services

     1.4

U.S. Government Obligations

     1.1

Wireless Communications

     1.0

Telecommunication Services

     1.0

Computer Software and Services

     0.7

Building and Construction

     0.7

Communications Equipment

     0.7

Metals and Mining

     0.7

Closed-End Funds

     0.7

Automotive

     0.7

Agriculture

     0.6

Publishing

     0.6

Transportation

     0.5

Real Estate

     0.4

Manufactured Housing and Recreational Vehicles

     0.1

Real Estate Investment Trusts

     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.

Certifications

The Fund’s Chief Executive Officer has certified to the New York Stock Exchange (“NYSE”) that, as of June 9, 2017, 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.

 

2


The Gabelli Equity Trust Inc.

Portfolio Changes — Quarter Ended June 30, 2017 (Unaudited)

 

 

     Shares      Ownership at
June  30,

2017
 

NET PURCHASES

     

Common Stocks

     

Advance Auto Parts Inc.

     3,000          13,000    

Altaba Inc.

     130,000          130,000    

Altice USA Inc., Cl. A

     20,000          20,000    

Ascena Retail Group Inc.

     120,000          250,000    

Ashland Global Holdings Inc.

     1,000          11,000    

Baker Hughes Inc.

     11,000          11,000    

BioScrip Inc.

     197,998          3,134,549    

Cincinnati Bell Inc.

     5,000          140,000    

Clear Channel Outdoor Holdings Inc., Cl. A

     3,000          160,000    

CNH Industrial NV

     10,000          70,092    

CR Bard Inc.

     500          500    

Davide Campari-Milano SpA(a)

     652,800          1,305,600    

Denny’s Corp.

     5,000          9,000    

Deutsche Bank AG

     8,000          24,000    

Donnelley Financial Solutions, Inc.

     37,000          47,000    

Edgewell Personal Care Co.

     3,700          199,700    

Emerald Expositions Events Inc.

     25,000          25,000    

Entertainment One Ltd.

     75,000          75,000    

Essity AB, Cl. B(b)

     27,600          27,600    

Gerber Scientific Inc., Escrow

     60,000          60,000    

Herc Holdings Inc.

     43,559          96,559    

Hertz Global Holdings Inc.

     81,100          401,100    

Hewlett Packard Enterprise Co.

     14,000          49,000    

Incyte Corp.

     1,000          4,000    

International Game Technology plc

     4,000          13,095    

Inventure Foods Inc.

     65,787          429,626    

Janus Henderson Group plc

     143,000          143,000    

Jason Industries Inc.

     30,000          395,385    

Legg Mason Inc.

     20,000          145,000    

Liberty Media Corp.-
Liberty Braves, Cl. C

     6,000          79,758    

Millicom International Cellular SA, SDR

     6,000          99,000    

Mueller Water Products Inc., Cl. A

     3,000          9,000    

National Fuel Gas Co.

     15,000          40,000    

NeoGenomics Inc.

     27,621          27,621    

Newell Brands Inc.

     1,500          23,000    

Och-Ziff Capital Management Group LLC,
Cl. A

     35,000          195,000    

O’Reilly Automotive Inc.

     500          73,500    

Patterson-UTI Energy Inc.

     80,000          80,000    

Penske Automotive Group Inc.

     8,909          20,909    

Rockwell Collins Inc.(c)

     4,652          4,652    

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

     85,839,000          85,839,000    

Stericycle Inc.

     2,000          9,000    

Synchrony Financial

     10,000          10,000    

T. Rowe Price Group Inc.

     10,000          113,400    

TimkenSteel Corp.

     30,000          160,000    

United Natural Foods Inc.

     1,000          18,000    

Valvoline Inc.(e)

     29,001          29,001    

Waddell & Reed Financial Inc., Cl. A

     20,000          150,000    
     Shares      Ownership at
June 30,

2017
 

Weatherford International plc

     40,400          75,400    

Zayo Group Holdings Inc.

     1,000          20,000    

NET SALES

     

Common Stocks

     

Adient plc

     (1,515)          29,834    

Akorn Inc.

     (23,579)          47,519    

Alere Inc.

     (9,000)          31,000    

American Express Co.

     (6,000)          411,000    

AMETEK Inc.

     (4,000)          414,000    

Apple Inc.

     (1,000)          9,000    

Armstrong Flooring Inc.

     (100)          162,400    

AT&T Inc.

     (28,000)          105,000    

Avon Products Inc.

     (8,000)          117,000    

B/E Aerospace Inc.(c)

     (15,000)          —    

Becton, Dickinson and Co.

     (2,000)          8,000    

Berkshire Hathaway Inc., Cl. A

     (2)          114    

Blucora Inc.

     (17,500)          15,000    

Boston Scientific Corp.

     (10,000)          260,000    

Brown-Forman Corp., Cl. A

     (1,000)          105,200    

Builders FirstSource Inc.

     (25,000)          —    

Cable One Inc.

     (300)          1,000    

Canadian Solar Inc.

     (30,000)          —    

CBS Corp., Cl. A, Voting

     (1,000)          242,300    

Charter Communications Inc., Cl. A

     (1,454)          29,358    

Chemtura Corp.

     (30,000)          —    

Corning Inc.

     (15,000)          375,000    

Crane Co.

     (2,000)          171,100    

CST Brands Inc.

     (50,500)          —    

Curtiss-Wright Corp.

     (4,000)          252,300    

DaVita Inc.

     (5,000)          10,000    

Deere & Co.

     (4,000)          221,000    

Diageo plc, ADR

     (10,000)          161,000    

Donaldson Co. Inc.

     (6,000)          331,800    

EchoStar Corp., Cl. A

     (7,500)          42,700    

Endo International plc

     (55,784)          —    

Ferro Corp.

     (45,000)          397,000    

Forest City Realty Trust Inc., Cl. A

     (13,000)          27,000    

General Motors Co.

     (3,746)          88,000    

Gogo Inc.

     (30,000)          105,000    

Halliburton Co.

     (4,700)          191,700    

Honeywell International Inc.

     (4,000)          322,000    

IAC/InterActiveCorp.

     (3,000)          40,000    

IDEX Corp.

     (11,000)          229,000    

Integrated Device Technology Inc.

     (10,000)          22,500    

Internap Corp.

     (36,000)          526,500    

International Flavors & Fragrances Inc.

     (2,000)          71,000    

Janus Capital Group Inc.

     (340,100)          —    

Landauer Inc.

     (2,000)          86,000    

Mandarin Oriental International Ltd.

     (118,500)          4,451,000    

Mead Johnson Nutrition Co.

     (25,000)          —    

MGM Resorts International

     (14,700)          118,725    
 

 

See accompanying notes to financial statements.

 

3


The Gabelli Equity Trust Inc.

Portfolio Changes (Continued) — Quarter Ended June 30, 2017 (Unaudited)

 

 

     Shares      Ownership at
June  30,

2017
 

PepsiCo Inc.

     (10,000)          180,000    

Quinpario Acquisition Corp. 2

     (10,453)          —    

Rollins Inc.

     (1,000)          1,604,000    

Syngenta AG, ADR

     (12,800)          —    

The Boeing Co.

     (2,500)          40,000    

The Coca-Cola Co.

     (5,000)          99,600    

The WhiteWave Foods Co.

     (57,000)          —    

Time Warner Inc.

     (35,000)          165,800    

T-Mobile US Inc.

     (5,000)          30,000    

Twitter Inc.

     (55,000)          —    

UnitedHealth Group Inc.

     (2,000)          72,000    

Westar Energy Inc.

     (4,000)          158,000    

Xylem Inc.

     (10,000)          260,000    

Yahoo! Inc.

     (130,000)          —    

Corporate Bonds

     

Mueller Industries Inc., expire 03/01/2027

     (200,000)          —    

Rights

     

Deutsche Bank AG, expire 04/06/2017

     (16,000)          —    

Warrants

     

Daseke Inc., expire 09/11/2020

     (15,000)          —    

Kinder Morgan Inc., expire 05/25/2017

     (115,800)          —    

 

(a)

Stock Split - 2 shares for every 1 share held.

(b)

Spin-off - 1 share of Essity AB, Cl. B. for every 1 share of Svenska Cellulose AB, Cl. B. held.

(c)

Merger - $34.10 cash plus 0.3101 shares of new Rockwell Collins Inc., for every B/E Aerospace Inc.

(d)

Spin-off - 71 shares of Rolls-Royce Holdings plc, Cl. C for every 1 share of Rolls-Royce Holdings plc held.

(e)

Spin-off - 2.745338 shares of Valvoline Inc. for every 1 share of Ashland Global Inc. held. 1,198 shares of Valvoline Inc. were sold after the spin off.

 

 

See accompanying notes to financial statements.

 

4


The Gabelli Equity Trust Inc.

Schedule of Investments — June 30, 2017 (Unaudited)

 

 

Shares

         

Cost

    

Market

Value

 
  

COMMON STOCKS — 98.1%

     
  

Food and Beverage — 12.0%

     
  3,000     

Ajinomoto Co. Inc.

   $ 52,866      $ 64,721  
  105,200     

Brown-Forman Corp., Cl. A

     1,820,590        5,186,360  
  35,950     

Brown-Forman Corp., Cl. B

     1,269,227        1,747,170  
  63,800     

Campbell Soup Co.

     1,781,130        3,327,170  
  65,000     

Chr. Hansen Holding A/S

     2,725,303        4,727,472  
  15,000     

Coca-Cola European Partners plc

     275,290        610,050  
  135,000     

Conagra Brands Inc.

     4,266,922        4,827,600  
  30,000     

Constellation Brands Inc., Cl. A

     376,266        5,811,900  
  18,000     

Crimson Wine Group Ltd.†

     91,848        192,780  
  201,500     

Danone SA

     9,779,634        15,145,756  
  1,305,600     

Davide Campari-Milano SpA

     3,566,380        9,200,667  
  161,000     

Diageo plc, ADR

     10,765,537        19,292,630  
  82,400     

Dr Pepper Snapple Group Inc.

     2,704,892        7,507,464  
  80,000     

Flowers Foods Inc.

     263,976        1,384,800  
  76,200     

Fomento Economico Mexicano SAB de CV, ADR

     1,872,322        7,493,508  
  55,000     

General Mills Inc.

     2,252,522        3,047,000  
  1,848,400     

Grupo Bimbo SAB de CV, Cl. A

     2,624,248        4,658,492  
  41,300     

Heineken NV

     1,962,995        4,015,658  
  11,000     

Ingredion Inc.

     162,440        1,311,310  
  429,626     

Inventure Foods Inc.†

     2,980,189        1,851,688  
  105,000     

ITO EN Ltd

     2,422,898        3,827,517  
  27,800     

Kellogg Co.

     1,518,251        1,930,988  
  64,000     

Kerry Group plc, Cl. A

     735,609        5,510,839  
  86,666     

Lamb Weston Holdings Inc.

     2,655,649        3,816,771  
  9,700     

LVMH Moet Hennessy Louis Vuitton SE

     335,341        2,418,519  
  45,000     

Maple Leaf Foods Inc.

     828,035        1,136,104  
  330,000     

Mondele¯z International Inc., Cl. A

     11,497,898        14,252,700  
  70,000     

Morinaga Milk Industry Co. Ltd

     299,202        532,741  
  41,000     

Nestlé SA.

     1,791,828        3,568,099  
  180,000     

PepsiCo Inc.

     11,567,080        20,788,200  
  39,200     

Pernod Ricard SA

     3,228,300        5,249,560  
  26,000     

Post Holdings Inc.†

     882,170        2,018,900  
  40,000     

Remy Cointreau SA

     2,377,486        4,671,403  
  55,000     

The Kraft Heinz Co.

     2,017,310        4,710,200  
  99,600     

The Coca-Cola Co.

     3,092,328        4,467,060  
  32,000     

The Hain Celestial Group Inc.†

     214,736        1,242,240  
  3,000     

The J.M. Smucker Co.

     149,101        354,990  
  132,809     

Tootsie Roll Industries Inc.

     1,771,732        4,628,394  
  50,000     

Tyson Foods Inc., Cl. A

     421,291        3,131,500  
  341,000     

Yakult Honsha Co. Ltd

     9,700,538        23,193,154  
     

 

 

    

 

 

 
        109,101,360        212,854,075  
     

 

 

    

 

 

 

Shares

         

Cost

    

Market

Value

 
  

Financial Services — 10.1%

     
  411,000     

American Express Co.(a)

   $     26,917,387      $     34,622,640  
  25,000     

American International Group Inc.

     1,374,505        1,563,000  
  14,520     

Argo Group International Holdings Ltd

     389,834        879,912  
  72,000     

Banco Santander SA, ADR

     545,542        481,680  
  114     

Berkshire Hathaway Inc., Cl. A†

     335,298        29,035,800  
  32,600     

Blackhawk Network Holdings Inc.†

     1,089,256        1,421,360  
  12,800     

CIT Group Inc.

     548,363        623,360  
  88,000     

Citigroup Inc.

     3,646,777        5,885,440  
  9,000     

Cullen/Frost Bankers Inc.

     665,261        845,190  
  24,000     

Deutsche Bank AG

     679,775        426,960  
  8,000     

Financial Engines Inc.

     284,394        292,800  
  50,000     

Fortress Investment Group LLC, Cl. A

     264,068        399,500  
  68,000     

H&R Block Inc.

     1,532,208        2,101,880  
  40,000     

Interactive Brokers Group Inc., Cl. A

     643,310        1,496,800  
  143,000     

Janus Henderson Group plc†

     3,127,990        4,734,730  
  61,400     

JPMorgan Chase & Co.

     2,865,137        5,611,960  
  29,800     

Kinnevik AB, Cl. A

     494,015        1,054,445  
  145,000     

Legg Mason Inc.

     4,109,572        5,533,200  
  88,000     

Leucadia National Corp.

     1,259,355        2,302,080  
  14,000     

Loews Corp.

     558,454        655,340  
  125,000     

Marsh & McLennan Companies Inc.

     3,772,923        9,745,000  
  9,000     

Moody’s Corp.

     312,150        1,095,120  
  195,000     

Och-Ziff Capital Management Group LLC, Cl. A

     615,978        499,200  
  20,000     

PayPal Holdings Inc.†

     651,955        1,073,400  
  105,300     

S&P Global Inc.

     4,404,349        15,372,747  
  124,100     

State Street Corp.

     5,232,321        11,135,493  
  17,000     

SunTrust Banks Inc.

     358,050        964,240  
  10,000     

Synchrony Financial

     275,012        298,200  
  113,400     

T. Rowe Price Group Inc.

     4,065,822        8,415,414  
  210,500     

The Bank of New York Mellon Corp.

     6,707,443        10,739,710  
  20,000     

The Charles Schwab Corp.

     292,250        859,200  
  12,300     

The Dun & Bradstreet Corp.

     292,691        1,330,245  
  10,000     

The PNC Financial Services Group Inc.

     956,448        1,248,700  
  13,000     

W. R. Berkley Corp.

     476,775        899,210  
  150,000     

Waddell & Reed Financial Inc., Cl. A

     3,429,408        2,832,000  
  235,000     

Wells Fargo & Co.

     7,377,851        13,021,350  
     

 

 

    

 

 

 
        90,551,927        179,497,306  
     

 

 

    

 

 

 
 

 

See accompanying notes to financial statements.

 

5


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2017 (Unaudited)

 

 

Shares

         

Cost

    

Market

Value

 
  

COMMON STOCKS (Continued)

     
  

Entertainment — 6.6%

     
  29,358     

Charter Communications Inc., Cl. A†

   $ 5,005,634      $ 9,889,242  
  41,600     

Discovery Communications Inc., Cl. A†

     1,391,742        1,074,528  
  235,800     

Discovery Communications Inc., Cl. C†

     2,716,076        5,944,518  
  75,000     

Entertainment One Ltd.

     212,881        215,296  
  533,000     

Grupo Televisa SAB, ADR

     8,059,059        12,989,210  
  10,700     

Liberty Media Corp.- Liberty Braves, Cl. A†

     197,899        255,623  
  79,758     

Liberty Media Corp.- Liberty Braves, Cl. C†

     1,347,050        1,911,799  
  48,641     

Lions Gate Entertainment Corp., Cl. B†

     1,269,530        1,278,285  
  10,000     

Live Nation Entertainment Inc.†

     274,451        348,500  
  24,000     

Pinnacle Entertainment Inc.†

     268,320        474,240  
  103,200     

The Madison Square Garden Co, Cl. A†

     5,592,162        20,320,080  
  165,800     

Time Warner Inc.

     9,479,845        16,647,978  
  40,000     

Tokyo Broadcasting System Holdings Inc.

     796,181        706,646  
  560,200     

Twenty-First Century Fox Inc., Cl. A

     5,861,488        15,876,068  
  370,000     

Twenty-First Century Fox Inc., Cl. B

     8,026,295        10,311,900  
  70,000     

Universal Entertainment Corp.

     1,103,319        2,137,808  
  279,521     

Viacom Inc., Cl. A

     13,193,575        10,635,774  
  245,000     

Vivendi SA

     5,982,999        5,453,834  
     

 

 

    

 

 

 
        70,778,506        116,471,329  
     

 

 

    

 

 

 
  

Equipment and Supplies — 5.9%

     
  414,000     

AMETEK Inc.

     9,561,678        25,075,980  
  7,000     

Amphenol Corp., Cl. A

     12,928        516,740  
  94,000     

CIRCOR International Inc.

     3,412,305        5,581,720  
  331,800     

Donaldson Co. Inc.

     4,094,830        15,110,172  
  207,000     

Flowserve Corp.

     4,362,047        9,611,010  
  37,400     

Franklin Electric Co. Inc.

     215,706        1,548,360  
  229,000     

IDEX Corp.

     9,184,410        25,879,290  
  43,000     

Ingersoll-Rand plc

     928,418        3,929,770  
  40,100     

Mueller Industries Inc.

     944,025        1,221,045  
  9,000     

Mueller Water Products Inc., Cl. A

     106,793        105,120  
  13,000     

Sealed Air Corp.

     208,280        581,880  
  45,000     

Tenaris SA, ADR

     1,981,220        1,401,300  
  10,000     

The Greenbrier Companies Inc.

     198,206        462,500  
  4,000     

The Manitowoc Co. Inc.†

     5,854        24,040  
  80,000     

The Timken Co.

     3,018,718        3,700,000  
  59,600     

The Weir Group plc

     250,790        1,343,713  

Shares

         

Cost

    

Market

Value

 
  125,000     

Watts Water Technologies Inc., Cl. A

   $ 3,970,158      $ 7,900,000  
  4,000     

Welbilt Inc.†

     19,597        75,400  
     

 

 

    

 

 

 
        42,475,963        104,068,040  
     

 

 

    

 

 

 
  

Health Care — 5.1%

     
  6,000     

Agilent Technologies Inc.

     247,707        355,860  
  47,519     

Akorn Inc.†

     1,066,857        1,593,787  
  31,000     

Alere Inc.†

     1,210,062        1,555,890  
  10,000     

Allergan plc

     2,117,098        2,430,900  
  34,000     

Amgen Inc.

     2,470,200        5,855,820  
  17,000     

Baxter International Inc.

     502,032        1,029,180  
  8,000     

Becton, Dickinson and Co.

     898,802        1,560,880  
  9,200     

Biogen Inc.†

     1,427,484        2,496,512  
  3,134,549     

BioScrip Inc.†

     6,048,417        8,510,301  
  3,500     

Bioverativ Inc.†

     114,504        210,595  
  260,000     

Boston Scientific Corp.†

     1,840,086        7,207,200  
  96,300     

Bristol-Myers Squibb Co.

     4,502,440        5,365,836  
  500     

CR Bard Inc.

     154,455        158,055  
  10,000     

DaVita Inc.†

     644,504        647,600  
  20,000     

Express Scripts Holding Co.†

     1,359,191        1,276,800  
  17,500     

Globus Medical Inc., Cl. A†

     424,107        580,125  
  28,000     

Henry Schein Inc.†

     1,651,762        5,124,560  
  4,000     

Incyte Corp.†

     486,885        503,640  
  46,800     

Indivior plc

     28,408        190,606  
  37,000     

Johnson & Johnson

     2,400,670        4,894,730  
  10,000     

Medtronic plc

     737,384        887,500  
  95,200     

Merck & Co. Inc.

     2,219,590        6,101,368  
  27,621     

NeoGenomics Inc.†

     206,529        247,484  
  84,000     

Novartis AG, ADR

     3,841,437        7,011,480  
  1,500     

Shire plc, ADR

     289,815        247,905  
  15,000     

Teva Pharmaceutical Industries Ltd., ADR

     581,414        498,300  
  72,000     

UnitedHealth Group Inc.

     4,389,309        13,350,240  
  4,000     

Waters Corp.†

     285,470        735,360  
  268,000     

William Demant Holding A/S†

     2,441,826        6,936,340  
  8,600     

Zimmer Biomet Holdings Inc.

     435,897        1,104,240  
  35,000     

Zoetis Inc.

     1,122,327        2,183,300  
     

 

 

    

 

 

 
        46,146,669        90,852,394  
     

 

 

    

 

 

 
  

Diversified Industrial — 5.0%

     
  500     

Acuity Brands Inc.

     12,751        101,640  
  160,000     

Ampco-Pittsburgh Corp.

     2,128,534        2,360,000  
  171,100     

Crane Co.

     4,833,174        13,581,918  
  153,000     

General Electric Co.

     3,712,505        4,132,530  
  132,000     

Greif Inc., Cl. A

     1,955,631        7,362,960  
  10,000     

Greif Inc., Cl. B

     635,644        604,000  
  65,478     

Griffon Corp.

     1,222,257        1,437,242  
  322,000     

Honeywell International Inc.

     23,900,887        42,919,380  
  117,000     

ITT Inc.

     1,436,279        4,701,060  
  11,000     

Jardine Strategic Holdings Ltd

     222,951        458,590  
  40,000     

Kennametal Inc.

     895,654        1,496,800  
 

 

See accompanying notes to financial statements.

 

6


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2017 (Unaudited)

 

 

Shares

      

Cost

   

Market

Value

 
  

COMMON STOCKS (Continued)

   
  

Diversified Industrial (Continued)

   

50,000

  

Myers Industries Inc.

  $ 818,952     $ 897,500  

85,000

  

Park-Ohio Holdings Corp.

    892,930       3,238,500  

9,666

  

Rayonier Advanced Materials
Inc.

    160,768       151,950  

30,000

  

Rexnord Corp.†

    630,867       697,500  

15,000

  

ServiceMaster Global Holdings
Inc.†

    553,798       587,850  

15,000

  

Sulzer AG

    739,785       1,700,386  

100,000

  

Toray Industries Inc.

    771,663       836,008  

12,000

  

Tredegar Corp.

    171,530       183,000  

46,000

  

Trinity Industries Inc.

    619,878       1,289,380  
    

 

 

   

 

 

 
           46,316,438           88,738,194  
    

 

 

   

 

 

 
  

Consumer Services — 4.5%

   

20,000

  

eBay Inc.†

    416,823       698,400  

40,000

  

IAC/InterActiveCorp.†

    1,022,109       4,129,600  

24,642

  

Liberty Expedia Holdings Inc.,
Cl. A†

    521,749       1,331,161  

225,200

  

Liberty Interactive Corp. QVC
Group, Cl. A†

    3,714,133       5,526,408  

21,000

  

Liberty TripAdvisor Holdings
Inc., Cl. A†

    247,059       243,600  

45,398

  

Liberty Ventures, Cl. A†

    901,142       2,373,861  

1,604,000

  

Rollins Inc.

    17,163,833       65,298,840  

5,500

  

TripAdvisor Inc.†

    194,460       210,100  
    

 

 

   

 

 

 
       24,181,308       79,811,970  
    

 

 

   

 

 

 
  

Consumer Products — 4.2%

   

117,000

  

Avon Products Inc.†

    980,571       444,600  

14,100

  

Christian Dior SE

    534,292       4,031,723  

28,000

  

Church & Dwight Co. Inc.

    385,294       1,452,640  

65,600

  

Coty Inc., Cl. A

    1,228,184       1,230,656  

199,700

  

Edgewell Personal Care Co.†

    14,419,133       15,181,194  

146,000

  

Energizer Holdings Inc.

    4,380,826       7,010,920  

27,600

  

Essity AB, Cl. B†

    294,742       755,137  

2,100

  

Givaudan SA

    725,396       4,200,438  

90,000

  

Hanesbrands Inc.

    788,898       2,084,400  

23,800

  

Harley-Davidson Inc.

    1,105,662       1,285,676  

1,270

  

Hermes International

    444,999       627,573  

5,000

  

Mattel Inc.

    69,500       107,650  

11,000

  

National Presto Industries
Inc.

    529,994       1,215,500  

23,000

  

Newell Brands Inc.

    1,070,695       1,233,260  

10,000

  

Oil-Dri Corp. of America

    171,255       420,100  

46,800

  

Reckitt Benckiser Group plc

    1,391,995       4,744,734  

27,600

  

Svenska Cellulosa AB, Cl. B

    73,685       208,850  

816,900

  

Swedish Match AB

    9,690,211       28,769,479  
    

 

 

   

 

 

 
       38,285,332       75,004,530  
    

 

 

   

 

 

 
  

Energy and Utilities — 3.9%

   

11,000

  

ABB Ltd., ADR

    171,270       273,900  

Shares

      

Cost

   

Market

Value

 

39,000

  

Anadarko Petroleum Corp.

  $ 2,262,604     $ 1,768,260  

59,000

  

Apache Corp.

    2,771,519       2,827,870  

11,000

  

Baker Hughes Inc.

    591,800       599,610  

80,000

  

BP plc, ADR

    3,952,168       2,772,000  

16,000

  

CMS Energy Corp.

    102,219       740,000  

185,100

  

ConocoPhillips

    8,559,949       8,136,996  

204,000

  

El Paso Electric Co.

    5,709,272       10,546,800  

98,400

  

Enbridge Inc.

    2,488,608       3,917,304  

24,000

  

Eversource Energy

    545,324       1,457,040  

57,600

  

Exxon Mobil Corp.

    2,675,190       4,650,048  

140,000

  

GenOn Energy Inc., Escrow†

    0       0  

191,700

  

Halliburton Co.

    3,773,551       8,187,507  

4,000

  

Marathon Oil Corp.

    111,366       47,400  

22,000

  

Marathon Petroleum Corp.

    836,230       1,151,260  

20,000

  

Murphy USA Inc.†

    886,754       1,482,200  

40,000

  

National Fuel Gas Co.

    2,460,759       2,233,600  

13,500

  

NextEra Energy Inc.

    797,687       1,891,755  

1,000

  

Niko Resources Ltd., OTC†

    54,403       48  

3,000

  

Niko Resources Ltd.,
Toronto†

    923       139  

32,400

  

Oceaneering International Inc.

    437,629       740,016  

80,000

  

Patterson-UTI Energy Inc.

    1,700,728       1,615,200  

15,100

  

Phillips 66

    1,113,603       1,248,619  

120,000

  

Rowan Companies plc, Cl. A†

    4,470,497       1,228,800  

20,000

  

RPC Inc.

    259,649       404,200  

15,000

  

Southwest Gas Holdings Inc.

    347,695       1,095,900  

101,000

  

The AES Corp.

    907,143       1,122,110  

75,400

  

Weatherford International
plc†

    688,722       291,798  

158,000

  

Westar Energy Inc.

    8,728,974       8,377,160  
    

 

 

   

 

 

 
           57,406,236           68,807,540  
    

 

 

   

 

 

 
  

Automotive: Parts and Accessories — 3.6%

 

 

29,834

  

Adient plc

    1,402,198       1,950,547  

107,600

  

BorgWarner Inc.

    4,288,790       4,557,936  

240,900

  

Dana Inc.

    2,144,653       5,379,297  

12,500

  

Delphi Automotive plc

    842,223       1,095,625  

241,400

  

Genuine Parts Co.

    11,784,671       22,392,264  

395,385

  

Jason Industries Inc.†

    924,131       510,047  

185,000

  

Modine Manufacturing Co.†

    3,549,263       3,061,750  

73,500

  

O’Reilly Automotive Inc.†

    12,101,845       16,077,390  

111,000

  

Standard Motor Products Inc.

    1,220,821       5,796,420  

73,000

  

Superior Industries
International Inc.

    1,462,789       1,500,150  

14,000

  

Visteon Corp.†

    1,372,450       1,428,840  
    

 

 

   

 

 

 
       41,093,834       63,750,266  
    

 

 

   

 

 

 
  

Cable and Satellite — 3.4%

   

253,600

  

AMC Networks Inc., Cl. A†

    12,064,774       13,544,776  

1,000

  

Cable One Inc.

    345,163       710,900  

160,000

  

Comcast Corp., Cl. A

    3,263,185       6,227,200  

60,400

  

DISH Network Corp., Cl. A†

    2,044,622       3,790,704  

42,700

  

EchoStar Corp., Cl. A†

    1,748,052       2,591,890  
 

 

See accompanying notes to financial statements.

 

7


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2017 (Unaudited)

 

 

Shares

      

Cost

   

Market

Value

 
   COMMON STOCKS (Continued)    
   Cable and Satellite (Continued)    

21,712

  

Liberty Global plc LiLAC,
Cl. A†

  $ 407,240     $ 472,670  

42,918

  

Liberty Global plc LiLAC,
Cl. C†

    1,218,719       918,874  

427,890

  

Rogers Communications Inc.,
New York, Cl. B

    4,533,833       20,200,687  

19,310

  

Rogers Communications Inc.,
Toronto, Cl. B

    137,424       912,043  

108,800

  

Scripps Networks Interactive
Inc., Cl. A

    3,513,944       7,432,128  

120,000

  

Shaw Communications Inc.,
New York, Cl. B

    354,632       2,614,800  

40,000

  

Shaw Communications Inc.,
Toronto, Cl. B

    52,983       872,609  
    

 

 

   

 

 

 
           29,684,571           60,289,281  
    

 

 

   

 

 

 
   Business Services — 3.4%    

14,334

  

Allegion plc

    232,677       1,162,774  

7,500

  

Aramark

    194,037       307,350  

7,000

  

Ascent Capital Group Inc.,
Cl. A†

    127,348       107,520  

160,000

  

Clear Channel Outdoor
Holdings Inc., Cl. A

    1,106,763       776,000  

2,004

  

Contax Participacoes SA†

    68,885       2,510  

90,000

  

Diebold Nixdorf Inc.

    3,119,797       2,520,000  

16,000

  

DigitalGlobe Inc.†

    240,796       532,800  

47,000

  

Donnelley Financial Solutions,
Inc.†

    1,028,200       1,079,120  

3,000

  

Edenred

    38,786       78,226  

25,000

  

Emerald Expositions Events
Inc.

    425,000       547,500  

160,000

  

G4S plc

    0       680,195  

60,000

  

Gerber Scientific Inc.,
Escrow†

    0       0  

16,000

  

Jardine Matheson Holdings
Ltd.

    534,478       1,027,200  

86,000

  

Landauer Inc.

    2,387,051       4,497,800  

25,300

  

Macquarie Infrastructure
Corp.

    1,580,073       1,983,520  

289,000

  

Mastercard Inc., Cl. A

    10,603,956       35,099,050  

9,000

  

Stericycle Inc.†

    713,585       686,880  

290,000

  

The Interpublic Group of
Companies Inc.

    4,514,220       7,134,000  

10,000

  

Vectrus Inc.†

    106,200       323,200  

12,800

  

Visa Inc., Cl. A

    140,800       1,200,384  
    

 

 

   

 

 

 
       27,162,652       59,746,029  
    

 

 

   

 

 

 
   Telecommunications — 3.1%    

105,000

  

AT&T Inc.

    3,684,274       3,961,650  

55,400

  

BCE Inc.

    1,851,178       2,495,216  

914,200

  

BT Group plc, Cl. A

    3,780,313       3,509,605  

Shares

      

Cost

   

Market

Value

 

140,000

  

Cincinnati Bell Inc.†

  $ 3,035,365     $ 2,737,000  

100,000

  

Deutsche Telekom AG, ADR

    1,656,300       1,801,500  

105,000

  

Gogo Inc.†

    904,316       1,210,650  

32,001

  

Harris Corp.

    2,556,439       3,490,669  

36,000

  

Hellenic Telecommunications
Organization SA

    452,922       433,378  

15,000

  

Hellenic Telecommunications
Organization SA, ADR

    91,062       88,920  

264,732

  

Koninklijke KPN NV

    448,166       846,922  

7,040,836

  

LIME†

    128,658       63,637  

22,000

  

Loral Space & Communications
Inc.†

    753,331       914,100  

22,000

  

Oi SA, ADR†

    1,739,813       22,660  

31,053

  

Sprint Corp.†

    176,070       254,945  

21,000

  

Telecom Argentina SA, ADR

    127,554       532,140  

570,000

  

Telecom Italia SpA†

    2,217,800       526,030  

70,000

  

Telefonica Brasil SA, ADR

    726,827       944,300  

595,739

  

Telefonica SA, ADR

    8,915,134       6,189,728  

563,700

  

Telephone & Data Systems
Inc.

    23,634,535       15,642,675  

105,000

  

Telesites SAB de CV†

    79,714       77,179  

25,000

  

TELUS Corp.

    233,734       863,086  

125,000

  

Verizon Communications Inc.

    5,239,043       5,582,500  

48,027

  

Vodafone Group plc, ADR

    2,096,997       1,379,816  

20,000

  

Zayo Group Holdings Inc.†

    646,738       618,000  
    

 

 

   

 

 

 
           65,176,283           54,186,306  
    

 

 

   

 

 

 
   Retail — 2.7%    

13,000

  

Advance Auto Parts Inc.

    1,864,076       1,515,670  

250,000

  

Ascena Retail Group Inc.†

    670,769       537,500  

95,300

  

AutoNation Inc.†

    2,664,951       4,017,848  

38,000

  

Costco Wholesale Corp.

    2,505,816       6,077,340  

118,900

  

CVS Health Corp.

    8,372,944       9,566,694  

9,000

  

Denny’s Corp.†

    101,644       105,930  

25,000

  

Fiesta Restaurant Group Inc.†

    495,140       516,250  

401,100

  

Hertz Global Holdings Inc.†

    7,591,341       4,612,650  

22,100

  

HSN Inc.

    597,444       704,990  

100,000

  

J.C. Penney Co. Inc.†

    969,807       465,000  

326,000

  

Macy’s Inc.

    6,367,418       7,576,240  

20,909

  

Penske Automotive Group
Inc.

    957,326       918,114  

33,300

  

Sally Beauty Holdings Inc.†

    264,056       674,325  

17,000

  

The Cheesecake Factory Inc.

    553,064       855,100  

3,000

  

Tiffany & Co.

    171,090       281,610  

18,000

  

United Natural Foods Inc.†

    622,373       660,600  

52,000

  

Walgreens Boots Alliance Inc.

    1,540,167       4,072,120  

32,000

  

Wal-Mart Stores Inc.

    1,618,504       2,421,760  

55,000

  

Whole Foods Market Inc.

    989,403       2,316,050  
    

 

 

   

 

 

 
       38,917,333       47,895,791  
    

 

 

   

 

 

 
   Machinery — 2.5%    

12,800

  

Caterpillar Inc.

    86,323       1,375,488  

70,092

  

CNH Industrial NV

    632,983       797,647  
 

 

See accompanying notes to financial statements.

 

8


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2017 (Unaudited)

 

 

Shares

           

Cost

   

Market

Value

 
   

COMMON STOCKS (Continued)

   
   

Machinery (Continued)

   
  221,000      

Deere & Co.(a)

  $ 7,229,031     $ 27,313,390  
  2,250      

Roper Technologies Inc.

    417,199       520,943  
  260,000      

Xylem Inc.

    8,091,503       14,411,800  
     

 

 

   

 

 

 
        16,457,039       44,419,268  
     

 

 

   

 

 

 
   

Broadcasting — 2.5%

   
  242,300      

CBS Corp., Cl. A, Voting

    7,256,622       15,703,463  
  2,000      

Cogeco Inc.

    39,014       104,102  
  17,334      

Corus Entertainment Inc., OTC, Cl. B

    30,215       181,990  
  6,666      

Corus Entertainment Inc.,
Toronto, Cl. B

    12,406       70,063  
  16,000      

Gray Television Inc.†

    14,422       219,200  
  19,250      

Liberty Broadband Corp., Cl. A†

    608,060       1,651,457  
  66,192      

Liberty Broadband Corp., Cl. C†

    2,236,120       5,742,156  
  19,250      

Liberty Media Corp.- Liberty Formula One, Cl. A†

    327,003       674,328  
  52,250      

Liberty Media Corp.- Liberty Formula One, Cl. C†

    1,197,836       1,913,395  
  75,000      

Liberty Media Corp.- Liberty SiriusXM, Cl. A†

    1,647,568       3,148,500  
  158,000      

Liberty Media Corp.- Liberty SiriusXM, Cl. C†

    4,034,747       6,588,600  
  292,400      

MSG Networks Inc., Cl. A†

    1,675,251       6,564,380  
  17,376      

Nexstar Media Group Inc., Cl. A

    1,066,018       1,039,085  
  36,000      

Pandora Media Inc.†

    463,829       321,120  
  85,200      

Television Broadcasts Ltd

    339,712       320,832  
     

 

 

   

 

 

 
        20,948,823       44,242,671  
     

 

 

   

 

 

 
       
   

Electronics — 2.4%

   
  20,000      

Bel Fuse Inc., Cl. A

    547,758       417,000  
  4,000      

Emerson Electric Co.

    222,819       238,480  
  4,000      

Hitachi Ltd., ADR

    287,076       246,600  
  22,500      

Integrated Device Technology Inc.†

    424,409       580,275  
  54,000      

Intel Corp.

    1,160,428       1,821,960  
  345,490      

Johnson Controls
International plc

    12,611,075       14,980,446  
  34,170      

Koninklijke Philips NV

    180,354       1,223,969  
  2,400      

Mettler-Toledo International
Inc.†

    337,270       1,412,496  
  40,000      

TE Connectivity Ltd

    1,553,958       3,147,200  
  240,000      

Texas Instruments Inc.

    10,937,263       18,463,200  
     

 

 

   

 

 

 
        28,262,410       42,531,626  
     

 

 

   

 

 

 
   

Specialty Chemicals — 2.3%

   
  12,320      

AdvanSix Inc.†

    146,942       384,877  
  11,000      

Ashland Global Holdings Inc.

    541,523       725,010  

Shares

           

Cost

   

Market

Value

 
  20,000      

E. I. du Pont de Nemours and
Co.

  $ 854,362     $ 1,614,200  
  397,000      

Ferro Corp.†

    4,527,990       7,261,130  
  8,000      

FMC Corp.

    136,430       584,400  
  35,000      

H.B. Fuller Co.

    1,061,829       1,788,850  
  71,000      

International Flavors &
Fragrances Inc.

    4,356,717       9,585,000  
  5,000      

Methanex Corp.

    137,095       220,250  
  250,000      

OMNOVA Solutions Inc.†

    1,510,742       2,437,500  
  177,800      

Sensient Technologies Corp.

    4,609,358       14,318,234  
  18,000      

SGL Carbon SE†

    252,978       223,576  
  2,000      

The Chemours Co.

    22,594       75,840  
  29,001      

Valvoline Inc.

    543,963       687,897  
     

 

 

   

 

 

 
        18,702,523       39,906,764  
     

 

 

   

 

 

 
   

Aerospace and Defense — 2.2%

   
  275,000      

Aerojet Rocketdyne Holdings Inc.†

    2,370,094       5,720,000  
  1,246,553      

BBA Aviation plc

    2,811,697       4,990,888  
  35,800      

Kaman Corp.

    881,634       1,785,346  
  17,500      

Northrop Grumman Corp.

    900,365       4,492,425  
  4,652      

Rockwell Collins Inc.

    455,800       488,780  
  1,209,000      

Rolls-Royce Holdings plc

    9,301,551       14,030,308  
  85,839,000      

Rolls-Royce Holdings plc, Cl. C†

    110,312       111,802  
  40,000      

The Boeing Co.

    5,219,781       7,910,000  
     

 

 

   

 

 

 
        22,051,234       39,529,549  
     

 

 

   

 

 

 
       
   

Hotels and Gaming — 1.9%

   
  16,000      

Accor SA

    549,282       750,074  
  45,000      

Belmond Ltd., Cl. A†

    621,367       598,500  
  90,000      

Genting Singapore plc

    74,910       70,928  
  8,000      

Hyatt Hotels Corp., Cl. A†

    263,258       449,680  
  20,000      

ILG Inc.

    338,287       549,800  
  13,095      

International Game Technology plc

    246,136       239,639  
  579,400      

Ladbrokes Coral Group plc

    2,329,980       864,067  
  34,000      

Las Vegas Sands Corp.

    632,350       2,172,260  
  4,451,000      

Mandarin Oriental International Ltd

    7,804,113       8,902,000  
  15,000      

Marriott International, Inc., Cl. A

    1,229,670       1,504,650  
  70,000      

MGM China Holdings Ltd

    137,917       155,646  
  118,725      

MGM Resorts International

    2,630,776       3,714,905  
  188,800      

Ryman Hospitality Properties Inc.

    5,121,573       12,085,088  
  200,000      

The Hongkong & Shanghai Hotels Ltd

    155,450       361,193  
  4,000      

Wyndham Worldwide Corp.

    282,896       401,640  
  6,000      

Wynn Resorts Ltd

    469,634       804,720  
     

 

 

   

 

 

 
        22,887,599       33,624,790  
     

 

 

   

 

 

 
 

 

See accompanying notes to financial statements.

 

9


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2017 (Unaudited)

 

 

Shares

         

Cost

    

Market

Value

 
  

COMMON STOCKS (Continued)

     
  

Environmental Services — 1.6%

     
  35,000     

Pentair plc

   $ 1,197,464      $ 2,328,900  
  230,800     

Republic Services Inc.

     6,848,123        14,708,884  
  157,400     

Waste Management Inc.

     4,560,250        11,545,290  
     

 

 

    

 

 

 
        12,605,837        28,583,074  
     

 

 

    

 

 

 
  

Aviation: Parts and Services — 1.4%

 

  
  41,666     

Arconic Inc.

     880,949        943,735  
  252,300     

Curtiss-Wright Corp.

     12,171,871        23,156,094  
  25,500     

KLX Inc.†

     1,033,565        1,275,000  
     

 

 

    

 

 

 
        14,086,385        25,374,829  
     

 

 

    

 

 

 
  

Wireless Communications — 1.0%

     
  20,000     

Altice USA Inc., Cl. A†

     600,000        646,000  
  105,000     

America Movil SAB de CV, Cl. L, ADR

     735,232        1,671,600  
  99,000     

Millicom International Cellular SA, SDR

     6,382,128        5,847,377  
  150,000     

NTT DoCoMo Inc.

     2,980,751        3,536,786  
  46,075     

Tim Participacoes SA, ADR

     352,294        681,910  
  30,000     

T-Mobile US Inc.†

     889,469        1,818,600  
  104,600     

United States Cellular Corp.†

     4,965,942        4,008,272  
     

 

 

    

 

 

 
        16,905,816        18,210,545  
     

 

 

    

 

 

 
  

Telecommunication Services — 1.0%

 

  
  151,505     

Liberty Global plc, Cl. A†

     2,536,161        4,866,341  
  382,893     

Liberty Global plc, Cl. C†

     7,953,868        11,938,604  
     

 

 

    

 

 

 
        10,490,029        16,804,945  
     

 

 

    

 

 

 
  

Computer Software and Services — 0.7%

 

  
  4,000     

Alphabet Inc., Cl. C†

     2,656,885        3,634,920  
  15,000     

Blucora Inc.†

     74,987        318,000  
  6,000     

Check Point Software Technologies Ltd.†

     101,862        654,480  
  4,733     

CommerceHub Inc., Cl. A†

     31,317        82,449  
  13,466     

CommerceHub Inc., Cl. C†

     84,093        234,847  
  49,000     

Hewlett Packard Enterprise Co.

     796,911        812,910  
  526,500     

Internap Corp.†

     1,125,485        1,932,255  
  23,000     

InterXion Holding NV†

     338,737        1,052,940  
  21,000     

NCR Corp.†

     364,761        857,640  
  20,900     

Rockwell Automation Inc.

     648,748        3,384,964  
  15,000     

VeriFone Systems Inc.†

     329,752        271,500  
     

 

 

    

 

 

 
        6,553,538        13,236,905  
     

 

 

    

 

 

 
  

Building and Construction — 0.7%

     
  162,400     

Armstrong Flooring Inc.†

     2,824,340        2,918,328  
  18,000     

Assa Abloy AB, Cl. B

     310,378        395,480  
  80,000     

Fortune Brands Home & Security Inc.

     680,866        5,219,200  
  96,559     

Herc Holdings Inc.†

     3,285,436        3,796,700  
Shares          

Cost

    

Market

Value

 
  45,000     

Layne Christensen Co.†

   $ 573,982      $ 395,550  
     

 

 

    

 

 

 
        7,675,002        12,725,258  
     

 

 

    

 

 

 
  

Communications Equipment — 0.7%

 

  
  9,000     

Apple Inc.

     897,196        1,296,180  
  375,000     

Corning Inc.

     5,900,614        11,268,750  
     

 

 

    

 

 

 
        6,797,810        12,564,930  
     

 

 

    

 

 

 
  

Metals and Mining — 0.7%

     
  37,400     

Agnico Eagle Mines Ltd

     1,530,570        1,687,488  
  13,888     

Alcoa Corp.

     293,636        453,443  
  54,000     

Barrick Gold Corp.

     1,581,120        859,140  
  30,000     

Cliffs Natural Resources Inc.†

     296,432        207,600  
  80,000     

Freeport-McMoRan Inc.†

     1,408,020        960,800  
  4,800     

Materion Corp.

     108,162        179,520  
  50,000     

New Hope Corp. Ltd

     67,580        58,798  
  143,600     

Newmont Mining Corp.

     5,120,536        4,651,204  
  160,000     

TimkenSteel Corp.†

     2,837,427        2,459,200  
  140,000     

Turquoise Hill Resources Ltd.†

     726,343        371,000  
  15,000     

Vale SA, ADR

     171,892        131,250  
     

 

 

    

 

 

 
        14,141,718        12,019,443  
     

 

 

    

 

 

 
  

Automotive — 0.7%

     
  88,000     

General Motors Co.

     3,365,341        3,073,840  
  158,000     

Navistar International Corp.†

     4,003,563        4,144,340  
  69,000     

PACCAR Inc.

     299,204        4,556,760  
     

 

 

    

 

 

 
        7,668,108        11,774,940  
     

 

 

    

 

 

 
  

Agriculture — 0.6%

     
  200,000     

Archer Daniels Midland Co.

     9,150,371        8,276,000  
  16,000     

Monsanto Co.

     709,230        1,893,760  
  10,000     

The Mosaic Co.

     428,085        228,300  
     

 

 

    

 

 

 
        10,287,686        10,398,060  
     

 

 

    

 

 

 
  

Publishing — 0.6%

     
  1,100     

Graham Holdings Co., Cl. B

     588,093        659,615  
  82,300     

Meredith Corp.

     3,666,696        4,892,735  
  125,000     

News Corp., Cl. A

     1,939,129        1,712,500  
  146,600     

News Corp., Cl. B

     1,644,464        2,074,390  
  40,000     

The E.W. Scripps Co., Cl. A†

     399,742        712,400  
     

 

 

    

 

 

 
        8,238,124        10,051,640  
     

 

 

    

 

 

 
  

Transportation — 0.5%

     
  15,000     

Daseke Inc.†

     133,500        166,950  
  131,200     

GATX Corp.

     4,730,843        8,432,224  
     

 

 

    

 

 

 
        4,864,343        8,599,174  
     

 

 

    

 

 

 
  

Real Estate — 0.4%

     
  27,000     

Forest City Realty Trust Inc., Cl. A

     554,456        652,590  
  56,000     

Griffin Industrial Realty Inc.

     542,694        1,756,720  
  265,000     

The St. Joe Co.†

     4,873,297        4,968,750  
     

 

 

    

 

 

 
        5,970,447        7,378,060  
     

 

 

    

 

 

 
 

 

See accompanying notes to financial statements.

 

10


The Gabelli Equity Trust Inc.

Schedule of Investments (Continued) — June 30, 2017 (Unaudited)

 

 

Shares

         

Cost

    

Market

Value

 
  

COMMON STOCKS (Continued)

 

  
  

Manufactured Housing and Recreational Vehicles — 0.1%

 

  5,000     

Martin Marietta Materials Inc.

   $ 106,125      $ 1,112,900  
  30,000     

Nobility Homes Inc.

     349,956        503,250  
  42,000     

Skyline Corp.†

     256,482        252,840  
     

 

 

    

 

 

 
        712,563        1,868,990  
     

 

 

    

 

 

 
  

Real Estate Investment Trusts — 0.1%

 

  
  15,000     

Gaming and Leisure Properties Inc.

     189,641        565,050  
  29,000     

Rayonier Inc.

     454,837        834,330  
     

 

 

    

 

 

 
        644,478        1,399,380  
     

 

 

    

 

 

 
  

TOTAL COMMON STOCKS

     984,229,924        1,737,217,892  
     

 

 

    

 

 

 
  

CLOSED-END FUNDS — 0.7%

     
  130,000     

Altaba Inc.†

     2,884,194        7,082,400  
  4,285     

Royce Global Value Trust Inc.

     37,280        41,179  
  30,000     

Royce Value Trust Inc.

     368,797        437,700  
  90,302     

The Central Europe, Russia, and Turkey Fund Inc.

     2,597,549        1,977,614  
  143,158     

The New Germany Fund Inc.

     1,894,588        2,380,718  
     

 

 

    

 

 

 
        7,782,408        11,919,611  
     

 

 

    

 

 

 
  

TOTAL CLOSED-END FUNDS

     7,782,408        11,919,611  
     

 

 

    

 

 

 
  

CONVERTIBLE PREFERRED STOCKS — 0.1%

 

  
  

Telecommunications — 0.1%

     
  21,000     

Cincinnati Bell Inc., 6.750%, Ser. B

     515,202        1,050,210  
     

 

 

    

 

 

 
  

RIGHTS — 0.0%

     
  

Entertainment — 0.0%

     
  139,123     

Media General Inc., expire 12/31/17†

     0        237,900  
     

 

 

    

 

 

 

Principal
Amount

                    
  

U.S. GOVERNMENT OBLIGATIONS — 1.1%

 

  
  $20,260,000     

U.S. Treasury Bills, 0.672% to 1.111%††, 08/10/17 to 12/21/17

     20,205,521        20,206,013  
     

 

 

    

 

 

 
 

TOTAL INVESTMENTS — 100.0%

   $ 1,012,733,055        1,770,631,626  
     

 

 

    

Number of
Contracts

         

Expiration

Date

    

Unrealized

Appreciation

 
  

FUTURES CONTRACTS — SHORT POSITION

 

  
  (360)     

S&P 500 E-Mini Futures(b)

     09/15/17      $ 111,750  
        

 

 

 
                  

Market

Value

 
 

Other Assets and Liabilities (Net)

        1,422,474  
 

PREFERRED STOCK
(12,520,529 preferred shares outstanding)

        (412,913,225
        

 

 

 
 

NET ASSETS — COMMON STOCK
(219,808,898 common shares outstanding)

      $ 1,359,252,625  
        

 

 

 
 

NET ASSET VALUE PER COMMON SHARE
($1,359,252,625 ÷ 219,808,898 shares
outstanding)

      $ 6.18  
        

 

 

 

 

(a)

Securities, or a portion thereof, with a value of $48,892,600 were pledged as collateral for futures contracts.

(b)

At June 30, 2017, all of the futures contracts sold were held at UBS Securities LLC.

Non-income producing security.

††

Represents annualized yield at date of purchase.

ADR

American Depositary Receipt

SDR

Swedish Depositary Receipt

 

Geographic Diversification

   % of Total
Investments
   

Market

Value

 

North America

     81.5   $ 1,442,824,167  

Europe

     14.2       250,694,410  

Latin America

     2.3       41,290,245  

Japan

     2.0       35,081,981  

Asia/Pacific

     0.0     740,823  
  

 

 

   

 

 

 

Total Investments

     100.0   $ 1,770,631,626  
  

 

 

   

 

 

 

 

*

Amount represents less than 0.05%

 

 

See accompanying notes to financial statements.

 

11


The Gabelli Equity Trust Inc.

 

Statement of Assets and Liabilities

June 30, 2017 (Unaudited)

 

 

Assets:

  

Investments, at value (cost $1,012,733,055)

   $ 1,770,631,626  

Foreign currency, at value (cost $37,252)

     37,194  

Cash

     3,266  

Deposit at brokers

     1,742,400  

Receivable for investments sold

     449,335  

Dividends receivable

     2,690,468  

Deferred offering expense

     77,977  

Prepaid expenses

     14,452  
  

 

 

 

Total Assets

     1,775,646,718  
  

 

 

 

Liabilities:

  

Distributions payable

     243,242  

Payable for investments purchased

     80,540  

Payable for investment advisory fees

     2,127,292  

Payable for payroll expenses

     46,629  

Payable for accounting fees

     11,250  

Payable for auction agent fees (a)

     873,578  

Variation margin payable

     16,200  

Other accrued expenses

     82,137  
  

 

 

 

Total Liabilities

     3,480,868  
  

 

 

 

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, 3,280,477 shares authorized with 2,779,796 shares issued and outstanding)

     69,494,900  

Series H (5.000%, $25 liquidation value, 4,198,880 shares authorized with 4,172,873 shares issued and outstanding)

     104,321,825  

Series J (5.450%, $25 liquidation value, 4,500,000 shares authorized with 3,200,000 shares issued and outstanding)

     80,000,000  
  

 

 

 

Total Preferred Stock

     412,913,225  
  

 

 

 

Net Assets Attributable to Common Shareholders

   $ 1,359,252,625  
  

 

 

 

Net Assets Attributable to Common Shareholders Consist of:

  

Paid-in capital

   $ 609,406,934  

Distributions in excess of net investment income

     (445,227

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

     (7,728,225

Net unrealized appreciation on investments

     757,898,571  

Net unrealized appreciation on futures contracts

     111,750  

Net unrealized appreciation on foreign currency translations

     8,822  
  

 

 

 

Net Assets

   $ 1,359,252,625  
  

 

 

 

Net Asset Value per Common Share:

  

($1,359,252,625 ÷ 219,808,898 shares outstanding at $0.001 par value; 237,024,900 shares authorized)

   $ 6.18  
  

 

 

 

 

(a)

This amount represents auction agent fees accrued for earlier fiscal periods, and not for the period covered by this report.

Statement of Operations

For the Six Months Ended June 30, 2017 (Unaudited)

 

 

Investment Income:

  

Dividends (net of foreign withholding taxes of $713,801)

   $ 16,430,757  

Interest

     (712,914 )* 
  

 

 

 

Total Investment Income

     15,717,843  
  

 

 

 

Expenses:

  

Investment advisory fees

     8,707,252  

Shareholder communications expenses

     182,164  

Custodian fees

     107,063  

Payroll expenses

     90,202  

Directors’ fees

     89,542  

Shareholder services fees

     71,333  

Legal and audit fees

     49,110  

Accounting fees

     22,500  

Interest expense

     1,074  

Miscellaneous expenses

     195,699  
  

 

 

 

Total Expenses

     9,515,939  
  

 

 

 

Less:

  

Advisory fee reduction on unsupervised assets (See Note 3)

     (2,240

Expenses paid indirectly by broker
(See Note 3)

     (5,847

Custodian fee credits

     (830
  

 

 

 

Total Reductions and Credits

     (8,917
  

 

 

 

Net Expenses

     9,507,022  
  

 

 

 

Net Investment Income

     6,210,821  
  

 

 

 

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

  

Net realized gain on investments

     12,830,270  

Net realized loss on futures contracts

     (3,079,809

Net realized loss on foreign currency transactions

     (5,292
  

 

 

 

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

     9,745,169  
  

 

 

 

Net change in unrealized appreciation/depreciation:

 

on investments

     133,872,327  

on futures contracts

     516,807  

on foreign currency translations

     24,840  
  

 

 

 

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

     134,413,974  
  

 

 

 

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

     144,159,143  
  

 

 

 

Net Increase in Net Assets Resulting from Operations

     150,369,964  
  

 

 

 

Total Distributions to Preferred Shareholders

     (8,984,273
  

 

 

 

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

   $ 141,385,691  
  

 

 

 

 

*

Includes amortization of bond premiums which exceeded the aggregate of interest accrued to income for the period.

 

 

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, 2017
(Unaudited)
    Year Ended
December 31, 2016
 

Operations:

    

Net investment income

   $ 6,210,821     $ 15,423,713  

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

     9,745,169       131,917,570  

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

     134,413,974       34,137,256  
  

 

 

   

 

 

 

Net Increase in Net Assets Resulting from Operations

     150,369,964       181,478,539  
  

 

 

   

 

 

 

Distributions to Preferred Shareholders:

    

Net investment income

     (3,992,311 )*      (2,007,644

Net realized gain

     (4,991,962 )*      (14,203,236
  

 

 

   

 

 

 

Total Distributions to Preferred Shareholders

     (8,984,273     (16,210,880
  

 

 

   

 

 

 

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

     141,385,691       165,267,659  
  

 

 

   

 

 

 

Distributions to Common Shareholders:

    

Net investment income

     (1,973,162 )*      (16,172,854

Net realized gain

     (1,973,161 )*      (114,416,126

Return of capital

     (61,825,727 )*      (957,245
  

 

 

   

 

 

 

Total Distributions to Common Shareholders

     (65,772,050     (131,546,225
  

 

 

   

 

 

 

Fund Share Transactions:

    

Net decrease in net assets from preferred offering cost charged to capital

           (2,845,000

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

     3,504,067        

Net increase in net assets from repurchase of preferred shares

     19,887       81,639  
  

 

 

   

 

 

 

Net Increase/(Decrease) in Net Assets from Fund Share Transactions

     3,523,954       (2,763,361
  

 

 

   

 

 

 

Net Increase in Net Assets Attributable to Common Shareholders

     79,137,595       30,958,073  

Net Assets Attributable to Common Shareholders:

    

Beginning of year

     1,280,115,030       1,249,156,957  
  

 

 

   

 

 

 

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

   $ 1,359,252,625     $ 1,280,115,030  
  

 

 

   

 

 

 

 

*

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 common share outstanding throughout each period:

 

    Six Months Ended
June 30, 2017

(Unaudited)
    Year Ended December 31,  
    2016     2015     2014     2013     2012  

Operating Performance:

           

Net asset value, beginning of year

  $ 5.84     $ 5.70     $ 6.78     $ 7.23     $ 5.60     $ 5.20  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    0.03       0.07       0.06       0.07       0.06       0.09  

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

    0.65       0.75       (0.44     0.30       2.26       0.97  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

    0.68       0.82       (0.38     0.37       2.32       1.06  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Preferred Shareholders: (a)

           

Net investment income

    (0.02 )*      (0.01     (0.01     (0.01     (0.01     (0.03

Net realized gain

    (0.02 )*      (0.06     (0.05     (0.05     (0.06     (0.05
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to preferred shareholders

    (0.04     (0.07     (0.06     (0.06     (0.07     (0.08
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

    0.64       0.75       (0.44     0.31       2.25       0.98  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Common Shareholders:

           

Net investment income

    (0.01 )*      (0.08     (0.05     (0.05     (0.05     (0.06

Net realized gain

    (0.01 )*      (0.52     (0.44     (0.49     (0.57     (0.11

Return of capital

    (0.28 )*      (0.00 )(b)      (0.15     (0.10           (0.39
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions to common shareholders

    (0.30     (0.60     (0.64     (0.64     (0.62     (0.56
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fund Share Transactions:

           

Increase/decrease in net asset value from common share transactions

                      (0.12     0.00 (b)       

Increase in net asset value from repurchase of preferred shares

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

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

          (0.01                 0.00 (b)      (0.02
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Fund share transactions

    0.00 (b)      (0.01     0.00 (b)      (0.12     0.00 (b)      (0.02
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Asset Value Attributable to Common Shareholders, End of Period

  $ 6.18     $ 5.84     $ 5.70     $ 6.78     $ 7.23     $ 5.60  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NAV total return †

    11.04     13.66     (6.85 )%      4.68     41.90     19.05
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Market value, end of period

  $ 6.18     $ 5.52     $ 5.31     $ 6.47     $ 7.75     $ 5.58  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investment total return ††

    13.65     15.71     (8.54 )%      (6.08 )%      52.44     23.62
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets and Supplemental Data:

           

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

  $ 1,772,166     $ 1,693,448     $ 1,582,823     $ 1,820,361     $ 1,712,663     $ 1,384,961  

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

  $ 1,359,253     $ 1,280,115     $ 1,249,157     $ 1,486,491     $ 1,378,436     $ 1,050,451  

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

    0.93 %(c)      1.23     0.91     0.82     0.84     1.54

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

           

before fee reductions

    1.43 %(c)(d)      1.44 %(d)      1.36 %(d)      1.37     1.40     1.48

net of fee reductions, if any

    1.43 %(c)(d)      1.44 %(d)      1.25 %(d)      1.33     1.40     1.48

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

           

before fee reductions

    1.09 %(c)(d)      1.10 %(d)      1.10 %(d)      1.10     1.10     1.12

net of fee reductions, if any

    1.09 %(c)(d)      1.10 %(d)      1.01 %(d)      1.07     1.10     1.12

Portfolio turnover rate

    2.1     12.7     8.9     10.9     10.0     4.2

 

See accompanying notes to financial statements.

 

14


The Gabelli Equity Trust Inc.

Financial Highlights (Continued)

 

 

    Six Months Ended
June 30, 2017

(Unaudited)
    Year Ended December 31,  
    2016     2015     2014     2013     2012  

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(e)

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

Asset coverage per share(f)

  $ 107,297     $ 102,426     $ 118,593     $ 136,308     $ 128,106     $ 103,507  

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(g)

  $ 25.97     $ 26.22     $ 25.69     $ 25.21     $ 25.27     $ 25.75  

Asset coverage per share(f)

  $ 107.30     $ 102.43     $ 118.59     $ 136.31     $ 128.11     $ 103.51  

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(e)

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

Asset coverage per share(f)

  $ 107,297     $ 102,426     $ 118,593     $ 136,308     $ 128,106     $ 103,507  

5.000% Series G

           

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

  $ 69,495     $ 69,743     $ 69,925     $ 70,099     $ 70,373     $ 70,413  

Total shares outstanding (in 000’s)

    2,780       2,791       2,797       2,804       2,815       2,817  

Liquidation preference per share

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

Average market value(g)

  $ 24.14     $ 24.67     $ 23.78     $ 23.32     $ 23.91     $ 26.01  

Asset coverage per share(f)

  $ 107.30     $ 102.43     $ 118.59     $ 136.31     $ 128.11     $ 103.51  

5.000% Series H

           

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

  $ 104,322     $ 104,494     $ 104,644     $ 104,674     $ 104,757     $ 105,000  

Total shares outstanding (in 000’s)

    4,173       4,180       4,186       4,187       4,190       4,200  

Liquidation preference per share

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

Average market value(g)

  $ 24.24     $ 25.00     $ 24.33     $ 22.82     $ 23.85     $ 25.55  

Asset coverage per share(f)

  $ 107.30     $ 102.43     $ 118.59     $ 136.31     $ 128.11     $ 103.51  

5.450% Series J

           

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

  $ 80,000     $ 80,000                          

Total shares outstanding (in 000’s)

    3,200       3,200                          

Liquidation preference per share

  $ 25.00     $ 25.00                          

Average market value(g)

  $ 25.02     $ 25.43                          

Asset coverage per share(f)

  $ 107.30     $ 102.43                          

Asset Coverage(h)

    429     410     474     545     512     414

 

For six months ended June 30, 2017 and the years ended December 31, 2016, 2015, 2014, and 2013 based on net asset value per share, adjusted for reinvestment of distributions at net asset value on the ex-dividend date. The year ended 2012 was 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 on average common shares outstanding on the record dates through each period.

(b)

Amount represents less than $0.005 per share.

(c)

Annualized.

(d)

The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the six months ended June 30, 2017 and the years ended December 31, 2016 and 2015, there was no impact on the expense ratios.

(e)

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 auction.

(f)

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

(g)

Based on weekly prices.

(h)

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. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (“GAAP”) that may require the use of management estimates and assumptions in the preparation of its financial statements. 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 obligations 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, 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. 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. OTC futures and options on futures for which market quotations are readily available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one or more dealers in the instrument in question by the Adviser.

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, 2017 is as follows:

 

     Valuation Inputs    Total Market Value
at 6/30/17
     Level 1
Quoted Prices
   Level 2 Other Significant
Observable Inputs
   Level 3 Significant
Unobservable Inputs
  

INVESTMENTS IN SECURITIES:

                   

ASSETS (Market Value):

                   

Common Stocks:

                   

Aerospace and Defense

     $ 39,417,747             $ 111,802      $ 39,529,549

Business Services

       59,746,029               0        59,746,029

Energy and Utilities

       68,807,492      $ 48        0        68,807,540

Manufactured Housing and Recreational

                   

Vehicles

       1,365,740        503,250               1,868,990

Other Industries (a)

       1,567,265,784                      1,567,265,784

Total Common Stocks

       1,736,602,792        503,298        111,802        1,737,217,892

Closed-End Funds

       11,919,611                      11,919,611

Convertible Preferred Stocks (a)

       1,050,210                      1,050,210

Rights (a)

                     237,900        237,900

U.S. Government Obligations

              20,206,013               20,206,013

TOTAL INVESTMENTS IN SECURITIES – ASSETS

     $ 1,749,572,613      $ 20,709,311      $ 349,702      $ 1,770,631,626

OTHER FINANCIAL INSTRUMENTS:*

                   

ASSETS (Net Unrealized Appreciation):

                   

EQUITY CONTRACTS

                   

Index Futures Contracts—Short Position

     $ 111,750                    $ 111,750

 

(a)

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

*

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, 2017. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.

 

17


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

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 are ultimately sourced from major stock exchanges and trading systems where these 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 or preferred equities, warrants, options, rights, or 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. When fair valuing a security, factors to consider include 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 may include backtesting 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 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, 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

 

18


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

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.

The Fund’s derivative contracts held at June 30, 2017, 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, 2017, 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, 2017 are presented within the Schedule of Investments.

The Fund’s volume of equity futures contracts held during the six months ended June 30, 2017 had an average monthly notional amount of approximately $34,044,175 while outstanding.

 

19


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

At June 30, 2017, the Fund’s derivative liabilities (by type) are as follows:

 

    Gross Amount of
Recognized Liabilities
Presented in the
Statement of
Assets and Liabilities
   Gross Amount
Available for
Offset in the
Statement of Assets
and Liabilities
  

    Net Amount of    
    Liabilities Presented in     
    the Statement of    

      Assets and Liabilities    

Liabilities

       

Futures Contracts

  $16,200       $16,200

At June 30, 2017, the Fund’s derivative liabilities (by counterparty) are as follows:

 

    

Net Amounts Not Offset in the Statement of

Assets and Liabilities

     Net Amount of Liabilities
Presented in the
Statement of Assets and
Liabilities
          Financial Instruments               Cash Collateral    
Received
           Net Amount        

Counterparty

         

UBS Securities LLC

   $16,200   $(16,200)     

As of June 30, 2017, the equity risk exposure associated with the futures contracts can be found in the Statement of Assets and Liabilities, under Liabilities, Variation margin payable. For the six months ended June 30, 2017, the effect of futures contracts with equity risk exposure 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

 

20


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

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, 2017, 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 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 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. At June 30, 2017, the Fund held no restricted securities.

 

21


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

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 fess. 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 of 110% of the 90 day U.S. 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 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, 5.000% Series G Cumulative Preferred Stock, 5.000% Series H Cumulative Preferred Stock, and 5.450% Series J Cumulative Preferred Stock (“Preferred Stock”) are recorded on a daily basis and are determined as described in Note 5.

 

22


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

The tax character of distributions paid during the year ended December 31, 2016 was as follows:

 

     Common      Preferred  

Distributions paid from:

     

Ordinary income (inclusive of short term capital gains)

   $ 18,270,058      $ 2,267,984  

Net long term capital gains

     112,318,922        13,942,896  

Return of capital.

     957,245         
  

 

 

    

 

 

 

Total distributions paid

   $ 131,546,225      $ 16,210,880  
  

 

 

    

 

 

 

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, 2016, the components of accumulated earnings/losses on a tax basis were as follows:

 

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

   $ 612,647,136  

Other temporary differences*

     (240,813
  

 

 

 

Total.

   $ 612,406,323  
  

 

 

 

 

*

Other temporary differences were primarily due to distributions payable.

The following summarizes the tax cost of investments and the related net unrealized appreciation at June 30, 2017:

 

     Cost      Gross
Unrealized
Appreciation
     Gross
Unrealized
Depreciation
    Net
Unrealized
Appreciation
 

Investments

   $ 1,025,035,580      $ 801,564,621      $ (55,968,575   $ 745,596,046  

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, 2017, the Fund did not incur any income tax, interest, or penalties. As of June 30, 2017, 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. Investment Advisory Agreement and Other Transactions. 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.

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

 

23


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

from affiliates of the Adviser). During the six months ended June 30, 2017, the Fund paid or accrued $90,202 in payroll expenses in the Statement of Operations.

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 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, 2017, the Fund’s total return on the NAV of the common shares exceeded the dividend rate of the outstanding C, D, and E Preferred Stock. Thus, advisory fees of the C, D, and E Preferred Stock were accrued.

During the six months ended June 30, 2017, the Fund paid $12,938 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser.

During the six months ended June 30, 2017, the Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $5,847.

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, 2017, the Fund paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.

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, 2017, 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 $2,240.

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 receives 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, 2017, other than short term securities and U.S. Government obligations, aggregated $35,715,020 and $66,577,600, respectively.

5. Capital. The Fund’s Articles of Incorporation, as amended, permit the Fund to issue 237,024,900 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

 

24


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

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, 2017 and the year ended December 31, 2016, the Fund did not repurchase any shares of its common stock in the open market.

Transactions in shares of common stock were as follows:

 

     Six Months Ended
June 30, 2017
(Unaudited)
     Year Ended
December 31, 2016
 
     Shares      Amount      Shares      Amount  

Net increase from common shares issued upon reinvestment of distributions

     568,732      $ 3,504,067                

On September 19, 2014, the Fund distributed one transferable right for each of the 191,839,279 common shares outstanding on that date. Seven rights were required to purchase one additional common share at the subscription price of $5.75 per share. On October 27, 2014, the Fund issued 27,405,612 common shares receiving net proceeds of $156,969,797, after the deduction of offering expenses of $612,472. The NAV of the Fund was reduced by $0.12 per share on the day the additional shares were issued. The additional shares were issued below NAV.

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 Fund’s 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, Series H, and Series J Preferred Stock at redemption prices of $25,000, $25, $25,000, $25, $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, 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 any time, 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

 

25


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

Stock in the open market at prices less than the $25 liquidation value per share. During the six months ended June 30, 2017 and the year ended December 31, 2016, the Fund did not repurchase or redeem any shares of Series C, Series D, and Series E Preferred Stock.

On March 31, 2016, the Fund received net proceeds of $77,212,332 (after underwriting discounts of $2,520,000 and offering expenses of $267,668) from the public offering of 3,200,000 shares of Series J Preferred.

Commencing July 31, 2017, September 27, 2017, and March 31, 2021, and anytime thereafter, the Fund, at its option, may redeem the Series G, Series H, and Series J 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, 2017 and the year ended December 31, 2016, the Fund repurchased and retired 9,905 and 7,300 of the Series G Preferred in the open market at an investment of $235,625 and $169,201 and average discounts of approximately 4.89% and 7.33%, respectively from its liquidation preference. During the six months ended June 30, 2017 and the year ended December 31, 2016, the Fund repurchased and retired 6,900 and 6,000 of the Series H Preferred in the open market at an investment of $163,263 and $138,542 and an average discount of approximately 5.39% and 7.68%, respectively, from its liquidation preference.

The Fund has the authority to purchase its auction rate preferred shares through negotiated private transactions. The Fund is not obligated to purchase any dollar amount or number of auction rate preferred shares, and the timing and amount of any auction rate preferred shares purchased will depend on market conditions, share price, capital availability, and other factors. The Fund is not soliciting holders to sell these shares nor recommending that holders offer them to the Fund. Any offers can be accepted or rejected in the Fund’s discretion.

As of June 30, 2017, after considering the 2014 common share rights offering and the Series J Preferred offering, the Fund has approximately $262 million available for issuing additional common or preferred shares under the current shelf registration.

The following table summarizes Cumulative Preferred Stock information:

 

Series    Issue Date      Issued/
Authorized
     Number of Shares
Outstanding at
06/30/17
     Net Proceeds     

2017 Dividend

Rate Range

   Dividend
Rate at
06/30/17
    Accrued
Dividends at
06/30/17
 

C Auction Rate

     June 27, 2002        5,200        2,880          $ 128,246,557      0.963% to 2.030%      2.030%        $ 12,180      

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      1.085% to 2.030%      2.030%      $ 1,579      

G 5.000%

     August 1, 2012        3,280,477        2,779,796          $ 69,407,417      Fixed Rate      5.000%      $ 60,556      

H 5.000%

     September 28, 2012        4,198,880        4,172,873          $ 100,865,695      Fixed Rate      5.000%      $ 48,260      

J 5.450%

     March 28, 2016        4,500,000        3,200,000          $ 77,212,332      Fixed Rate      5.450%      $ 72,446      

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

 

26


The Gabelli Equity Trust Inc.

Notes to Financial Statements (Unaudited) (Continued)

 

 

in the 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. 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 15, 2017 – Final Results

The Fund’s Annual Meeting of Shareholders was held on May 15, 2017 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 185,498,286 votes and 185,902,618 votes were cast in favor of these Directors, and a total of 9,834,132 votes and 9,429,801 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 10,940,670 votes were cast in favor of this Director and a total of 400,973 votes were withheld for this Director.

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

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

 

27


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 17, 2017, 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 information regarding the portfolio managers, the depth of the analyst pool available to the Adviser and the portfolio managers, the nature, quality, and extent of administrative and shareholder services supervised or provided 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, and the absence of significant service problems reported to the Board. 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 Broadridge peer category. The Independent Board Members noted that the Fund’s total return performance was above the average and median of a select group of peers for the one, five, and ten year periods ended March 31, 2017 but below those averages for the three year period ended March 31, 2017. 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 advisory fee rate and expense ratio relative to industry averages for the Fund’s Broadridge 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-advisory expenses” paid by the Fund are above the average and median for the Fund’s Broadridge peer group category and below the average and median for a select group of peers, and that management and gross advisory fees and total expenses were above the average and median of the Broadridge peer group range and a select group of peers. 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

 

28


The Gabelli Equity Trust Inc.

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

 

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 advisory 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 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. The Independent Board Members referred to the Board Materials for the pro forma income statements for the Adviser and the Fund for the period ended December 31, 2016. They noted the pro forma estimates of the Adviser’s profitability and costs attributable to the Fund, both as part of the Fund Complex and under the assumption that 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 advisory 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, although the ability of the Fund to realize economies of scale through growth is more limited than for an open-end fund, 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. The Independent Board Members were aware that economies can be shared through an adviser’s investment in its fund advisory business and noted that the Adviser increased personnel and resources devoted to the Gabelli/GAMCO fund complex in recent years, which could benefit the Fund.

Whether Fee Levels Reflect Economies of Scale.

The Independent Board Members also considered whether the advisory 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, particularly in light of the Fund’s above average performance over time.

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

 

29


The Gabelli Equity Trust Inc.

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

 

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 brokerage commissions paid to an affiliated broker, 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, continuation of the Advisory Agreement was in the best interests of the 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 advisory fee. 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 in a manner consistent with its investment objectives and policies. On the basis of the foregoing and without assigning particular weight to any single conclusion, the Independent Board Members determined to recommend continuation of the Advisory Agreement to the full Board.

Based on a consideration of all these factors in their totality, the Board Members, including all of the Independent Board Members, determined that the Fund’s advisory fee was fair and reasonable in relation to the quality of services provided and in light of the other factors described above that the Board Members deemed relevant. Accordingly, the Board Members determined to approve the continuation of the Fund’s Advisory Agreement. The Board Members based their decision on evaluations of all these factors as a whole and did not consider any one factor as all important or controlling.

 

30


THE GABELLI EQUITY TRUST INC.

One Corporate Center

Rye, NY 10580-1422

Portfolio Management Team Biographies

Mario J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer - Value Portfolios of GAMCO Investors, Inc. that he founded in 1977, and Chief Investment Officer - Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. He is also Executive Chairman of Associated Capital Group, 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. Currently he is a Managing Director and Co-Chief Investment Officer for GAMCO Investors, Inc.’s Value team. In addition, he serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Fund Complex. Mr. Marangi graduated magna cum laude and Phi Beta Kappa with a BA in Political Economy from Williams College and holds an MBA degree with honors from Columbia Business School.

Kevin V. Dreyer joined Gabelli in 2005 as a research analyst covering companies within the consumer sector. Currently he is a Managing Director and Co-Chief Investment Officer for GAMCO Investors, Inc.’s Value team. In addition, he serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Fund Complex. Mr. Dreyer received a BSE from the University of Pennsylvania and an MBA degree from Columbia Business School.

Robert D. Leininger, CFA, joined GAMCO Investors, Inc. in 1993 as an equity analyst. Subsequently, he was a partner and portfolio manager at Rorer Asset Management before rejoining GAMCO in 2010 where he currently serves as a portfolio manager of Gabelli Funds, LLC. Mr. Leininger is a magna cum laude graduate of Amherst College with a degree in Economics and holds an MBA degree from the Wharton School at the University of Pennsylvania.

Daniel M. Miller has been the portfolio manager of The Gabelli Focus Five Fund since inception of the investment strategy on January 1, 2012. He is also a Managing Director of GAMCO Investors, Inc. Mr. Miller joined the Firm in 2002 and graduated magna cum laude with a degree in finance from the University of Miami in Coral Gables, Florida.

 

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. 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 and

Chief Executive Officer,

GAMCO Investors, Inc.

Executive Chairman,

Associated Capital Group, 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

Michael J. Ferrantino

Chief Executive Officer,

InterEx, Inc.

William F. Heitmann

Former Senior Vice President

of Finance,

Verizon Communications, Inc.

Salvatore J. Zizza

Chairman,

Zizza & Associates Corp.

OFFICERS

Bruce N. Alpert

President

Andrea R. Mango

Secretary & Vice President

Agnes Mullady

Vice President

John C. Ball

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 Q2/2017

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

01/01/17

through

01/31/17

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – 2,100

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – $22.93

 

Preferred Series J – N/A

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H –2,100

 

Preferred Series J – N/A

 

Common – 219,240,166

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,789,701

 

Preferred Series H – 4,179,773 – 2,100 = 4,177,673

 

Preferred Series J – 3,200,000

 

Month #2

02/01/17

through

02/28/17

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 900

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – $23.39

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 900

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – 219,240,166

 

Preferred Series D – 2,363,860

 

Preferred Series G –2,789,701 – 900 = 2,788,801

 

Preferred Series H – 4,177,673

 

Preferred Series J – 3,200,000

 

Month #3

03/01/17

through

03/31/17

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 9,005

 

Preferred Series H –4,800

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – $23.80

 

Preferred Series H – $23.94

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 9,005

 

Preferred Series H – 4,800

 

Preferred Series J – N/A

 

 

Common – 219,240,166

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,788,801 – 9,005 = 2,779,796

 

Preferred Series H – 4,177,673 – 4,800 = 4,172,873

 

Preferred Series J – 3,200,000

 

Month #4

04/01/17

through

04/30/17

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – 219,240,166

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,779,796

 

Preferred Series H – 4,172,873

 

Preferred Series J – 3,200,000

Month #5

05/01/17

through -

05/31/17

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – 219,240,166

 

Preferred Series D – 2,363,860

 

Preferred Series G –2,779,796

 

Preferred Series H – 4,172,873

 

Preferred Series J – 3,200,000

 


Month#6

06/01/17

through -

06/30/17

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – N/A

 

Preferred Series H – N/A

 

Preferred Series J – N/A

 

 

Common – 219,808,898

 

Preferred Series D – 2,363,860

 

Preferred Series G – 2,779,796

 

Preferred Series H – 4,172,873

 

Preferred Series J – 3,200,000

 

Total

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 9,905

 

Preferred Series H – 6,900

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – $23.75

 

Preferred Series H – $23.38

 

Preferred Series J – N/A

 

 

Common – N/A

 

Preferred Series D – N/A

 

Preferred Series G – 9,905

 

Preferred Series H – 6,900

 

Preferred Series J – N/A

 

 

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       8/24/2017                                                                                                                  

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      8/24/2017                                                                                                                   
By (Signature and Title)*    /s/ John C. Ball                                                                          

 John C. Ball, Principal Financial Officer and Treasurer

Date      8/24/2017                                                                                                                   

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