The Gabelli Equity Trust Inc.
Schedule of Investments (Continued) — June 30, 2020 (Unaudited)
|
|
|
|
|
|
|
|
|
Market
Value
|
|
|
Other Assets and Liabilities (Net)
|
|
$
|
3,144,741
|
|
|
|
|
|
PREFERRED STOCK
(14,149,094 preferred shares outstanding)
|
|
|
(443,637,350
|
)
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS — COMMON STOCK
(259,699,764 common shares outstanding)
|
|
$
|
1,195,846,684
|
|
|
|
|
|
|
|
|
NET ASSET VALUE PER COMMON SHARE
($1,195,846,684 ÷ 259,699,764 shares
outstanding)
|
|
$
|
4.60
|
|
|
|
|
|
|
|
|
(a)
|
Securities, or a portion thereof, with a value of $41,041,000 were pledged as collateral for futures contracts.
|
|
(b)
|
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value
hierarchy.
|
|
†
|
Non-income producing security.
|
|
††
|
Represents annualized yields at dates of purchase.
|
|
|
|
ADR American Depositary Receipt
|
|
CVR Contingent Value Right
|
|
REIT Real Estate Investment Trust
|
|
SDR Swedish Depositary Receipt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Diversification
|
|
% of Total
Investments
|
|
Market
Value
|
|
North America
|
|
|
|
82.6
|
%
|
|
|
$
|
1,351,895,790
|
|
|
Europe
|
|
|
|
13.8
|
|
|
|
|
226,520,042
|
|
|
Japan
|
|
|
|
2.1
|
|
|
|
|
34,539,236
|
|
|
Latin America
|
|
|
|
0.9
|
|
|
|
|
14,641,850
|
|
|
Asia/Pacific
|
|
|
|
0.5
|
|
|
|
|
8,013,233
|
|
|
South Africa
|
|
|
|
0.1
|
|
|
|
|
729,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
|
100.0
|
%
|
|
|
$
|
1,636,339,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2020, futures contracts
outstanding were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Long/Short
|
|
|
Number of
Contracts
|
|
|
Expiration
Date
|
|
|
Notional
Amount
|
|
|
Value
|
|
|
Unrealized
(Depreciation)
|
|
|
S&P 500 Futures (E-Mini)
|
|
|
Short
|
|
|
|
130
|
|
|
|
09/18/20
|
|
|
$
|
20,086,300
|
|
|
|
$(82,225)
|
|
|
|
$(82,225)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL FUTURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(82,225)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
13
The Gabelli Equity Trust Inc.
Statement of Assets and Liabilities
June 30, 2020 (Unaudited)
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
Investments, at value (cost $1,210,251,934)
|
|
$
|
1,636,339,293
|
|
|
Foreign currency, at value (cost $13,025)
|
|
|
13,047
|
|
|
Cash
|
|
|
42,927
|
|
|
Deposit at brokers
|
|
|
1,716,000
|
|
|
Receivable for investments sold
|
|
|
2,021,018
|
|
|
Dividends receivable
|
|
|
2,758,786
|
|
|
Deferred offering expense
|
|
|
90,995
|
|
|
Prepaid expenses
|
|
|
13,924
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
1,642,995,990
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Distributions payable
|
|
|
253,336
|
|
|
Payable for investments purchased
|
|
|
683,854
|
|
|
Payable for investment advisory fees
|
|
|
1,295,128
|
|
|
Payable for payroll expenses
|
|
|
56,359
|
|
|
Payable for accounting fees
|
|
|
11,250
|
|
|
Payable for stockholder communications expenses
|
|
|
285,972
|
|
|
Variation margin payable
|
|
|
276,250
|
|
|
Payable for preferred offering expenses
|
|
|
201,874
|
|
|
Other accrued expenses
|
|
|
447,933
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
3,511,956
|
|
|
|
|
|
|
|
|
Cumulative Preferred Stock, $0.001 par value:
|
|
|
|
|
|
Series C (Auction Rate, $25,000 liquidation value, 5,200 shares authorized with 2,492 shares issued
and outstanding)
|
|
|
62,300,000
|
|
|
Series E (Auction Rate, $25,000 liquidation value, 2,000 shares authorized with 1,108 shares issued
and outstanding)
|
|
|
27,700,000
|
|
|
Series G (5.000%, $25 liquidation value, 3,280,477 shares authorized with 2,779,621 shares issued and
outstanding)
|
|
|
69,490,525
|
|
|
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
|
|
|
Series K (5.000%, $25 liquidation value, 4,000,000 shares authorized with 3,993,000 shares issued and
outstanding)
|
|
|
99,825,000
|
|
|
|
|
|
|
|
|
Total Preferred Stock
|
|
|
443,637,350
|
|
|
|
|
|
|
|
|
Net Assets Attributable to Common Stockholders
|
|
$
|
1,195,846,684
|
|
|
|
|
|
|
|
|
Net Assets Attributable to Common Stockholders Consist of:
|
|
|
|
|
|
Paid-in capital
|
|
$
|
784,592,190
|
|
|
Total distributable earnings
|
|
|
411,254,494
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
1,195,846,684
|
|
|
|
|
|
|
|
|
Net Asset Value per Common Share:
|
|
|
|
|
|
($1,195,846,684 ÷ 259,699,764 shares outstanding at $0.001 par value; 337,024,900 shares
authorized)
|
|
$
|
4.60
|
|
|
|
|
|
|
|
Statement of Operations
For the Six Months Ended June 30, 2020 (Unaudited)
|
|
|
|
|
|
|
Investment Income:
|
|
|
|
|
|
Dividends (net of foreign withholding taxes of $545,347)
|
|
$
|
14,490,024
|
|
|
Interest
|
|
|
278,576
|
|
|
|
|
|
|
|
|
Total Investment Income.
|
|
|
14,768,600
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Investment advisory fees
|
|
|
8,492,018
|
|
|
Shareholder communications expenses
|
|
|
189,925
|
|
|
Custodian fees
|
|
|
117,605
|
|
|
Payroll expenses
|
|
|
110,090
|
|
|
Directors’ fees
|
|
|
76,834
|
|
|
Stockholder services fees
|
|
|
72,207
|
|
|
Legal and audit fees
|
|
|
53,590
|
|
|
Accounting fees
|
|
|
22,500
|
|
|
Miscellaneous expenses
|
|
|
210,853
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
9,345,622
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
Advisory fee reduction (See Note 3)
|
|
|
(495,629
|
)
|
|
Advisory fee reduction on unsupervised assets (See Note 3)
|
|
|
(5,017
|
)
|
|
Expenses paid indirectly by broker (See Note 3)
|
|
|
(6,686
|
)
|
|
|
|
|
|
|
|
Total Reductions and Credits
|
|
|
(507,332
|
)
|
|
|
|
|
|
|
|
Net Expenses
|
|
|
8,838,290
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
5,930,310
|
|
|
|
|
|
|
|
|
Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign
Currency:
|
|
|
|
|
|
Net realized loss on investments
|
|
|
(5,791,193
|
)
|
|
Net realized gain on futures contracts
|
|
|
3,574,008
|
|
|
Net realized loss on foreign currency transactions
|
|
|
(1,740
|
)
|
|
|
|
|
|
|
|
Net realized loss on investments, futures contracts, and foreign currency transactions
|
|
|
(2,218,925
|
)
|
|
|
|
|
|
|
|
Net change in unrealized appreciation/depreciation:
|
|
|
|
|
|
on investments
|
|
|
(247,153,719
|
)
|
|
on futures contracts
|
|
|
179,400
|
|
|
on foreign currency translations
|
|
|
11,241
|
|
|
|
|
|
|
|
|
Net change in unrealized appreciation/depreciation on investments, futures contracts, and foreign
currency translations
|
|
|
(246,963,078
|
)
|
|
|
|
|
|
|
|
Net Realized and Unrealized Gain/(Loss) on Investments, Futures Contracts, and Foreign
Currency
|
|
|
(249,182,003
|
)
|
|
|
|
|
|
|
|
Net Decrease in Net Assets Resulting from Operations
|
|
|
(243,251,693
|
)
|
|
|
|
|
|
|
|
Total Distributions to Preferred Stockholders
|
|
|
(9,687,431
|
)
|
|
|
|
|
|
|
|
Net Decrease in Net Assets Attributable to Common Stockholders Resulting from
Operations
|
|
$
|
(252,939,124
|
)
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
14
The Gabelli Equity Trust Inc.
Statement of Changes in Net Assets Attributable to Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
2020
(Unaudited)
|
|
Year Ended
December 31,
2019
|
|
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
$
|
5,930,310
|
|
|
|
$
|
15,001,077
|
|
|
Net realized gain/(loss) on investments, futures contracts, and foreign currency transactions
|
|
|
|
(2,218,925
|
)
|
|
|
|
143,923,403
|
|
|
Net change in unrealized appreciation/depreciation on investments, futures contracts, and foreign
currency translations
|
|
|
|
(246,963,078
|
)
|
|
|
|
177,720,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase/(Decrease) in Net Assets Resulting from Operations
|
|
|
|
(243,251,693
|
)
|
|
|
|
336,644,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to Preferred Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated earnings
|
|
|
|
(5,904,648
|
)*
|
|
|
|
(20,510,513
|
)
|
|
Return of capital
|
|
|
|
(3,782,783
|
)*
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to Preferred Stockholders
|
|
|
|
(9,687,431
|
)
|
|
|
|
(20,510,513
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase/(Decrease) in Net Assets Attributable to Common Stockholders Resulting from
Operations
|
|
|
|
(252,939,124
|
)
|
|
|
|
316,134,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated earnings
|
|
|
|
—
|
|
|
|
|
(139,208,505
|
)
|
|
Return of capital
|
|
|
|
(77,346,816
|
)*
|
|
|
|
(13,631,522
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Distributions to Common Stockholders
|
|
|
|
(77,346,816
|
)
|
|
|
|
(152,840,027
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Share Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from common shares issued upon reinvestment of distributions
|
|
|
|
11,024,899
|
|
|
|
|
21,764,586
|
|
|
Net increase in net assets from repurchase of preferred shares
|
|
|
|
2,917,741
|
|
|
|
|
—
|
|
|
Net decrease in net assets from preferred offering costs charged to paid-in capital
|
|
|
|
—
|
|
|
|
|
(3,475,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase in Net Assets from Fund Share Transactions
|
|
|
|
13,942,640
|
|
|
|
|
18,289,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase/(Decrease) in Net Assets Attributable to Common Stockholders
|
|
|
|
(316,343,300
|
)
|
|
|
|
181,583,820
|
|
|
|
|
|
|
Net Assets Attributable to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
|
1,512,189,984
|
|
|
|
|
1,330,606,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
|
$
|
1,195,846,684
|
|
|
|
$
|
1,512,189,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Based on year to date book income. Amounts are subject to change and recharacterization at year end.
|
See accompanying notes to
financial statements.
15
The Gabelli Equity Trust Inc.
Financial Highlights
Selected data for a common share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2020
|
|
|
Year Ended December 31,
|
|
|
|
|
(Unaudited)
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Operating Performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of year
|
|
|
|
|
|
$
|
5.88
|
|
|
|
|
|
|
$
|
5.25
|
|
|
|
|
|
|
$
|
6.47
|
|
|
|
|
|
|
$
|
5.84
|
|
|
|
|
|
|
$
|
5.70
|
|
|
|
|
|
|
$
|
6.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
|
0.07
|
|
|
|
|
|
|
|
0.04
|
|
|
|
|
|
|
|
0.07
|
|
|
|
|
|
|
|
0.06
|
|
|
Net realized and unrealized gain/(loss) on investments, futures contracts, and foreign currency
transactions
|
|
|
|
|
|
|
(0.97
|
)
|
|
|
|
|
|
|
1.26
|
|
|
|
|
|
|
|
(0.57
|
)
|
|
|
|
|
|
|
1.42
|
|
|
|
|
|
|
|
0.75
|
|
|
|
|
|
|
|
(0.44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment operations
|
|
|
|
|
|
|
(0.95
|
)
|
|
|
|
|
|
|
1.32
|
|
|
|
|
|
|
|
(0.50
|
)
|
|
|
|
|
|
|
1.46
|
|
|
|
|
|
|
|
0.82
|
|
|
|
|
|
|
|
(0.38
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to Preferred Stockholders: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
(0.02
|
)*
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
(0.00
|
)(b)
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
(0.01
|
)
|
|
Net realized gain
|
|
|
|
|
|
|
(0.00
|
)*(b)
|
|
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
(0.08
|
)
|
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
(0.05
|
)
|
|
Return of capital
|
|
|
|
|
|
|
(0.02
|
)*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions to preferred stockholders
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
(0.08
|
)
|
|
|
|
|
|
|
(0.08
|
)
|
|
|
|
|
|
|
(0.08
|
)
|
|
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase/(Decrease) in Net Assets Attributable to Common Stockholders Resulting from
Operations
|
|
|
|
|
|
|
(0.99
|
)
|
|
|
|
|
|
|
1.24
|
|
|
|
|
|
|
|
(0.58
|
)
|
|
|
|
|
|
|
1.38
|
|
|
|
|
|
|
|
0.75
|
|
|
|
|
|
|
|
(0.44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
(0.08
|
)
|
|
|
|
|
|
|
(0.05
|
)
|
|
Net realized gain
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.50
|
)
|
|
|
|
|
|
|
(0.54
|
)
|
|
|
|
|
|
|
(0.57
|
)
|
|
|
|
|
|
|
(0.52
|
)
|
|
|
|
|
|
|
(0.44
|
)
|
|
Return of capital
|
|
|
|
|
|
|
(0.30
|
)*
|
|
|
|
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
(0.00
|
)(b)
|
|
|
|
|
|
|
(0.00
|
)(b)
|
|
|
|
|
|
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions to common stockholders
|
|
|
|
|
|
|
(0.30
|
)
|
|
|
|
|
|
|
(0.60
|
)
|
|
|
|
|
|
|
(0.64
|
)
|
|
|
|
|
|
|
(0.61
|
)
|
|
|
|
|
|
|
(0.60
|
)
|
|
|
|
|
|
|
(0.64
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Share Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/decrease in net asset value from common share transactions
|
|
|
|
|
|
|
0.00
|
(b)
|
|
|
|
|
|
|
0.00
|
(b)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.14
|
)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Increase in net asset value from repurchase of preferred shares
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
—
|
|
|
Offering costs and adjustment to offering costs for common shares charged to paid-in capital
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.00
|
)(b)
|
|
|
|
|
|
|
(0.00
|
)(b)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fund share transactions
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
(0.00
|
)(b)
|
|
|
|
|
|
|
(0.14
|
)
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
0.00
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value Attributable to Common Stockholders, End of Period
|
|
|
|
|
|
$
|
4.60
|
|
|
|
|
|
|
$
|
5.88
|
|
|
|
|
|
|
$
|
5.25
|
|
|
|
|
|
|
$
|
6.47
|
|
|
|
|
|
|
$
|
5.84
|
|
|
|
|
|
|
$
|
5.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAV total return †
|
|
|
|
|
|
|
(15.84
|
)%
|
|
|
|
|
|
|
24.03
|
%
|
|
|
|
|
|
|
(10.17
|
)%
|
|
|
|
|
|
|
24.64
|
%
|
|
|
|
|
|
|
13.66
|
%
|
|
|
|
|
|
|
(6.85
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value, end of period
|
|
|
|
|
|
$
|
5.03
|
|
|
|
|
|
|
$
|
6.09
|
|
|
|
|
|
|
$
|
5.10
|
|
|
|
|
|
|
$
|
6.19
|
|
|
|
|
|
|
$
|
5.52
|
|
|
|
|
|
|
$
|
5.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment total return ††
|
|
|
|
|
|
|
(11.39
|
)%
|
|
|
|
|
|
|
32.19
|
%
|
|
|
|
|
|
|
(8.43
|
)%
|
|
|
|
|
|
|
24.65
|
%
|
|
|
|
|
|
|
15.71
|
%
|
|
|
|
|
|
|
(8.54
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets and Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets including liquidation value of preferred shares, end of period (in 000’s)
|
|
|
|
|
|
$
|
1,639,484
|
|
|
|
|
|
|
$
|
1,966,007
|
|
|
|
|
|
|
$
|
1,743,519
|
|
|
|
|
|
|
$
|
2,045,240
|
|
|
|
|
|
|
$
|
1,693,448
|
|
|
|
|
|
|
$
|
1,582,823
|
|
|
Net assets attributable to common shares, end of period (in 000’s)
|
|
|
|
|
|
$
|
1,195,847
|
|
|
|
|
|
|
$
|
1,512,190
|
|
|
|
|
|
|
$
|
1,330,606
|
|
|
|
|
|
|
$
|
1,632,327
|
|
|
|
|
|
|
$
|
1,280,115
|
|
|
|
|
|
|
$
|
1,249,157
|
|
|
Ratio of net investment income to average net assets attributable to common shares before preferred
distributions
|
|
|
|
|
|
|
0.95
|
%(c)
|
|
|
|
|
|
|
1.01
|
%
|
|
|
|
|
|
|
1.07
|
%
|
|
|
|
|
|
|
0.64
|
%
|
|
|
|
|
|
|
1.23
|
%
|
|
|
|
|
|
|
0.91
|
%
|
|
Ratio of operating expenses to average net assets attributable to common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
before fee reductions(d)(e)
|
|
|
|
|
|
|
1.49
|
%(c)
|
|
|
|
|
|
|
1.33
|
%(f)
|
|
|
|
|
|
|
1.37
|
%
|
|
|
|
|
|
|
1.42
|
%
|
|
|
|
|
|
|
1.44
|
%
|
|
|
|
|
|
|
1.36
|
%
|
|
net of fee reductions, if any(d)(g)
|
|
|
|
|
|
|
1.41
|
%(c)
|
|
|
|
|
|
|
1.33
|
%(f)
|
|
|
|
|
|
|
1.27
|
%
|
|
|
|
|
|
|
1.42
|
%
|
|
|
|
|
|
|
1.44
|
%
|
|
|
|
|
|
|
1.25
|
%
|
|
Portfolio turnover rate
|
|
|
|
|
|
|
4.7
|
%
|
|
|
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
17.1
|
%
|
|
|
|
|
|
|
11.4
|
%
|
|
|
|
|
|
|
12.7
|
%
|
|
|
|
|
|
|
8.9
|
%
|
See accompanying notes to
financial statements.
16
The Gabelli Equity Trust Inc.
Financial Highlights (Continued)
Selected data for a common share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2020
|
|
|
Year Ended December 31,
|
|
|
|
|
(Unaudited)
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Cumulative Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auction Rate Series C Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation value, end of period (in 000’s)
|
|
|
|
|
|
$
|
62,300
|
|
|
|
|
|
|
$
|
72,000
|
|
|
|
|
|
|
$
|
72,000
|
|
|
|
|
|
|
$
|
72,000
|
|
|
|
|
|
|
$
|
72,000
|
|
|
|
|
|
|
$
|
72,000
|
|
|
Total shares outstanding (in 000’s)
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
3
|
|
|
Liquidation preference per share
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
Liquidation value(h)
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
Asset coverage per share(i)
|
|
|
|
|
|
$
|
92,389
|
|
|
|
|
|
|
$
|
108,305
|
|
|
|
|
|
|
$
|
105,562
|
|
|
|
|
|
|
$
|
123,830
|
|
|
|
|
|
|
$
|
102,426
|
|
|
|
|
|
|
$
|
118,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Preferred Stock (continued):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.875% Series D Preferred(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation value, end of period (in 000’s)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
$
|
59,097
|
|
|
|
|
|
|
$
|
59,097
|
|
|
|
|
|
|
$
|
59,097
|
|
|
|
|
|
|
$
|
59,097
|
|
|
Total shares outstanding (in 000’s)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
2,364
|
|
|
|
|
|
|
|
2,364
|
|
|
|
|
|
|
|
2,364
|
|
|
|
|
|
|
|
2,364
|
|
|
Liquidation preference per share
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
Average market value(k)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
$
|
25.62
|
|
|
|
|
|
|
$
|
26.16
|
|
|
|
|
|
|
$
|
26.22
|
|
|
|
|
|
|
$
|
25.69
|
|
|
Asset coverage per share(i)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
$
|
105.56
|
|
|
|
|
|
|
$
|
123.83
|
|
|
|
|
|
|
$
|
102.43
|
|
|
|
|
|
|
$
|
118.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auction Rate Series E Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation value, end of period (in 000’s)
|
|
|
|
|
|
$
|
27,700
|
|
|
|
|
|
|
$
|
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(h)
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
$
|
25,000
|
|
|
Asset coverage per share(i)
|
|
|
|
|
|
$
|
92,389
|
|
|
|
|
|
|
$
|
108,305
|
|
|
|
|
|
|
$
|
105,562
|
|
|
|
|
|
|
$
|
123,830
|
|
|
|
|
|
|
$
|
102,426
|
|
|
|
|
|
|
$
|
118,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.000% Series G Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation value, end of period (in 000’s)
|
|
|
|
|
|
$
|
69,491
|
|
|
|
|
|
|
$
|
69,495
|
|
|
|
|
|
|
$
|
69,495
|
|
|
|
|
|
|
$
|
69,495
|
|
|
|
|
|
|
$
|
69,743
|
|
|
|
|
|
|
$
|
69,925
|
|
|
Total shares outstanding (in 000’s)
|
|
|
|
|
|
|
2,780
|
|
|
|
|
|
|
|
2,780
|
|
|
|
|
|
|
|
2,780
|
|
|
|
|
|
|
|
2,780
|
|
|
|
|
|
|
|
2,791
|
|
|
|
|
|
|
|
2,797
|
|
|
Liquidation preference per share
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
Average market value(k)
|
|
|
|
|
|
$
|
24.97
|
|
|
|
|
|
|
$
|
24.57
|
|
|
|
|
|
|
$
|
23.92
|
|
|
|
|
|
|
$
|
24.50
|
|
|
|
|
|
|
$
|
24.67
|
|
|
|
|
|
|
$
|
23.78
|
|
|
Asset coverage per share(i)
|
|
|
|
|
|
$
|
92.39
|
|
|
|
|
|
|
$
|
108.30
|
|
|
|
|
|
|
$
|
105.56
|
|
|
|
|
|
|
$
|
123.83
|
|
|
|
|
|
|
$
|
102.43
|
|
|
|
|
|
|
$
|
118.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.000% Series H Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation value, end of period (in 000’s)
|
|
|
|
|
|
$
|
104,322
|
|
|
|
|
|
|
$
|
104,322
|
|
|
|
|
|
|
$
|
104,322
|
|
|
|
|
|
|
$
|
104,322
|
|
|
|
|
|
|
$
|
104,494
|
|
|
|
|
|
|
$
|
104,644
|
|
|
Total shares outstanding (in 000’s)
|
|
|
|
|
|
|
4,173
|
|
|
|
|
|
|
|
4,173
|
|
|
|
|
|
|
|
4,173
|
|
|
|
|
|
|
|
4,173
|
|
|
|
|
|
|
|
4,180
|
|
|
|
|
|
|
|
4,186
|
|
|
Liquidation preference per share
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
Average market value(k)
|
|
|
|
|
|
$
|
25.07
|
|
|
|
|
|
|
$
|
24.68
|
|
|
|
|
|
|
$
|
24.18
|
|
|
|
|
|
|
$
|
24.64
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
24.33
|
|
|
Asset coverage per share(i)
|
|
|
|
|
|
$
|
92.39
|
|
|
|
|
|
|
$
|
108.30
|
|
|
|
|
|
|
$
|
105.56
|
|
|
|
|
|
|
$
|
123.83
|
|
|
|
|
|
|
$
|
102.43
|
|
|
|
|
|
|
$
|
118.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.450% Series J Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation value, end of period (in 000’s)
|
|
|
|
|
|
$
|
80,000
|
|
|
|
|
|
|
$
|
80,000
|
|
|
|
|
|
|
$
|
80,000
|
|
|
|
|
|
|
$
|
80,000
|
|
|
|
|
|
|
$
|
80,000
|
|
|
|
|
|
|
|
—
|
|
|
Total shares outstanding (in 000’s)
|
|
|
|
|
|
|
3,200
|
|
|
|
|
|
|
|
3,200
|
|
|
|
|
|
|
|
3,200
|
|
|
|
|
|
|
|
3,200
|
|
|
|
|
|
|
|
3,200
|
|
|
|
|
|
|
|
—
|
|
|
Liquidation preference per share
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
|
—
|
|
|
Average market value(k)
|
|
|
|
|
|
$
|
25.77
|
|
|
|
|
|
|
$
|
25.98
|
|
|
|
|
|
|
$
|
25.14
|
|
|
|
|
|
|
$
|
25.36
|
|
|
|
|
|
|
$
|
25.43
|
|
|
|
|
|
|
|
—
|
|
|
Asset coverage per share(i)
|
|
|
|
|
|
$
|
92.39
|
|
|
|
|
|
|
$
|
108.30
|
|
|
|
|
|
|
$
|
105.56
|
|
|
|
|
|
|
$
|
123.83
|
|
|
|
|
|
|
$
|
102.43
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.000% Series K Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation value, end of period (in 000’s)
|
|
|
|
|
|
$
|
99,825
|
|
|
|
|
|
|
$
|
100,000
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Total shares outstanding (in 000’s)
|
|
|
|
|
|
|
3,993
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Liquidation preference per share
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
$
|
25.00
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Average market value(k)
|
|
|
|
|
|
$
|
25.13
|
|
|
|
|
|
|
$
|
25.24
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Asset coverage per share(i)
|
|
|
|
|
|
$
|
92.39
|
|
|
|
|
|
|
$
|
108.30
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Asset Coverage(l)
|
|
|
|
|
|
|
370
|
%
|
|
|
|
|
|
|
433
|
%
|
|
|
|
|
|
|
422
|
%
|
|
|
|
|
|
|
495
|
%
|
|
|
|
|
|
|
410
|
%
|
|
|
|
|
|
|
474
|
%
|
|
†
|
Based on net asset value per share, adjusted for reinvestment of distributions at net asset value on the ex-dividend dates and adjustments for the rights offering. 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 throughout the years.
|
|
(b)
|
Amount represents less than $0.005 per share.
|
See accompanying notes to
financial statements.
17
The Gabelli Equity Trust Inc.
Financial Highlights (Continued)
|
(d)
|
The Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For all
periods presented there was no impact on the expense ratios.
|
|
(e)
|
Ratio of operating expenses to average net assets including liquidation value of preferred shares before fee
reductions for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016, and 2015 would have been 1.10%, 1.03%, 1.09%, 1.10%, 1.10%, and 1.10%, respectively.
|
|
(f)
|
In 2019, due to failed auctions relating to previous fiscal years, the Fund reversed accumulated auction fees.
The 2019 ratio of operating expenses to average net assets attributable to common shares and the ratio of operating expenses to average net assets including liquidation value of preferred shares, excluding the reversal of auction agent fees, were
1.39% and 1.08%, respectively.
|
|
(g)
|
Ratio of operating expenses to average net assets including liquidation value of preferred shares net of fee
reductions for the six months ended June 30, 2020 and the years ended December 31, 2019, 2018, 2017, 2016, and 2015 would have been 1.04%, 1.03%, 1.01%, 1.10%, 1.10%, and 1.01%, respectively.
|
|
(h)
|
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.
|
|
(i)
|
Asset coverage per share is calculated by combining all series of preferred stock.
|
|
(j)
|
The Fund redeemed and retired all of the 2,363,860 shares of Series D Preferred Stock on December 26, 2019.
|
|
(k)
|
Based on weekly prices.
|
|
(l)
|
Asset coverage is calculated by combining all series of preferred stock.
|
See accompanying notes to
financial statements.
18
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 stockholder approval. The Fund will provide stockholders 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 securities are 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.
19
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, 2020 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation Inputs
|
|
|
|
|
|
|
|
Level 1
Quoted Prices
|
|
|
Level 2 Other Significant
Observable
Inputs
|
|
|
Level 3 Significant
Unobservable
Inputs(a)
|
|
|
Total Market Value
at 6/30/20
|
|
|
INVESTMENTS IN SECURITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS (Market Value):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy and Utilities
|
|
|
$ 51,028,435
|
|
|
|
$ 7
|
|
|
|
—
|
|
|
|
$ 51,028,442
|
|
|
Financial Services
|
|
|
173,961,720
|
|
|
|
—
|
|
|
|
$ 0
|
|
|
|
173,961,720
|
|
|
Manufactured Housing and Recreational Vehicles
|
|
|
2,055,130
|
|
|
|
744,465
|
|
|
|
—
|
|
|
|
2,799,595
|
|
|
Retail
|
|
|
35,545,778
|
|
|
|
—
|
|
|
|
16,500
|
|
|
|
35,562,278
|
|
|
Telecommunications
|
|
|
34,607,370
|
|
|
|
2,387,000
|
|
|
|
58,400
|
|
|
|
37,052,770
|
|
|
Other Industries (b)
|
|
|
1,314,055,872
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,314,055,872
|
|
|
Total Common Stocks
|
|
|
1,611,254,305
|
|
|
|
3,131,472
|
|
|
|
74,900
|
|
|
|
1,614,460,677
|
|
|
Closed-End Funds
|
|
|
5,007,233
|
|
|
|
5,267,500
|
|
|
|
—
|
|
|
|
10,274,733
|
|
|
Convertible Preferred Stocks (b)
|
|
|
1,002,750
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,002,750
|
|
|
Rights (b)
|
|
|
6,060
|
|
|
|
—
|
|
|
|
0
|
|
|
|
6,060
|
|
|
U.S. Government Obligations
|
|
|
—
|
|
|
|
10,595,073
|
|
|
|
—
|
|
|
|
10,595,073
|
|
|
TOTAL INVESTMENTS IN SECURITIES – ASSETS
|
|
|
$1,617,270,348
|
|
|
|
$18,994,045
|
|
|
|
$74,900
|
|
|
|
$1,636,339,293
|
|
|
|
|
|
|
|
|
OTHER FINANCIAL INSTRUMENTS:*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES (Net Unrealized Depreciation):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY CONTRACTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index Futures Contracts - Short Position
|
|
|
$ (82,225
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
$ (82,225
|
)
|
|
(a)
|
Level 3 securities are valued by intrinsic value and last price analysis. The inputs for these securities
are not readily available and are derived based on the judgment of the Adviser according to procedures approved by the Board of Directors.
|
|
(b)
|
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.
|
During six months ended June 30, 2020, the Fund
did not have material transfers into or out of Level 3.
20
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. Among the factors to be considered to fair value a security are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly
traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in
Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These 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
21
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 as Deposit at brokers, 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, 2020, if any, are not accounted for as hedging instruments under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.
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, 2020 are reflected within the Schedule
of Investments.
During the six months ended June 30, 2020, the Fund held an average monthly notional amount of equity futures contracts of approximately
$18,778,143.
As of June 30, 2020, 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, 2020, 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 gain 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 which 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
22
The Gabelli Equity Trust Inc.
Notes to Financial Statements (Unaudited) (Continued)
sum of the amount of initial margin deposits on the Fund’s existing futures positions or
swaps positions and option or swaption premiums would exceed 5% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on any such transactions, or (b) the aggregate net
notional value of the Fund’s commodity interest transactions would not exceed 100% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on any such transactions. Therefore,
in order to claim the Rule 4.5 exemption, the Fund is limited in its ability to invest in commodity futures, options, and certain types of swaps (including securities futures, broad based stock index futures, and financial futures contracts). As a
result, in the future the Fund will be more limited in its ability to use these instruments than in the past, and these limitations may have a negative impact on the ability of the Adviser to manage the Fund, and on the Fund’s performance.
Investments in Other Investment Companies. The Fund may invest, from time to time, in shares of other investment companies (or
entities that would be considered investment companies but are excluded from the definition pursuant to certain exceptions under the 1940 Act) (the Acquired Funds) in accordance with the 1940 Act and related rules. Stockholders 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, 2020, the Fund’s pro rata portion of the periodic expenses charged by the Acquired Funds
was less than one 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
23
The Gabelli Equity Trust Inc.
Notes to Financial Statements (Unaudited) (Continued)
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, 2020, the Fund held no restricted securities.
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 an 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 Stockholder. Distributions to
common stockholders are recorded on the ex-dividend date. Distributions to stockholders 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. 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 stockholders of the Fund’s Series
C Auction Rate Cumulative Preferred Stock, Series E Auction Rate Cumulative Preferred Stock, 5.000% Series G Cumulative Preferred Stock, 5.000% Series H Cumulative Preferred Stock, 5.450% Series J Cumulative Preferred Stock, and 5.000% Series K
Cumulative Preferred Stock (Preferred Stock) are recorded on a daily basis and are determined as described in Note 5.
24
The Gabelli Equity Trust Inc.
Notes to Financial Statements (Unaudited) (Continued)
The tax character of distributions paid during the year ended December 31, 2019 was as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Preferred
|
|
|
Distributions paid from:
|
|
|
|
|
|
|
|
|
|
Ordinary income (inclusive of short term capital gains)
|
|
$
|
14,064,397
|
|
|
$
|
2,072,201
|
|
|
Net long term capital gains
|
|
|
125,144,108
|
|
|
|
18,438,312
|
|
|
Return of capital
|
|
|
13,631,522
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions paid
|
|
$
|
152,840,027
|
|
|
$
|
20,510,513
|
|
|
|
|
|
|
|
|
|
|
|
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.
The following
summarizes the tax cost of investments and derivatives and the related net unrealized appreciation at June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
Gross
Unrealized
Appreciation
|
|
Gross
Unrealized
Depreciation
|
|
Net Unrealized
Appreciation
|
|
Investments and derivative instruments
|
|
$1,223,053,977
|
|
$564,657,231
|
|
$(151,454,140)
|
|
$413,203,091
|
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. During the six months ended June 30, 2020, the Fund
did not incur any income tax, interest, or penalties. As of June 30, 2020, 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 from affiliates of the Adviser). During the six months ended June 30, 2020, the Fund accrued $110,090 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 and Series E Preferred Stock (C 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
25
The Gabelli Equity Trust Inc.
Notes to Financial Statements (Unaudited) (Continued)
rate of the C 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 and E Preferred Stock for the period. During the six months ended June 30, 2020, the
Fund’s total return on the NAV of the common shares exceeded the dividend rate of the outstanding C and E Preferred Stock. Thus, advisory fees of the C and E Preferred Stock were reduced by $495,629.
During the six months ended June 30, 2020, the Fund paid $16,248 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser.
During the six months ended June 30, 2020, 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 $6,686.
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. Under the sub-administration agreement with Bank of New York Mellon, the fees paid include
the cost of calculating the Fund’s NAV. The Fund reimburses the Adviser for this service. During the six months ended June 30, 2020, the Fund accrued $22,500 in accounting fees in the Statement of Operations.
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, 2020, 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 $5,017.
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, 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.
The Fund engaged in a purchase transaction with a fund that has a common investment adviser. This purchase transaction complied
with Rule 17a-7 under the Act and amounted to $7,650,850.
4. Portfolio Securities. Purchases
and sales of securities during the six months ended June 30, 2020, other than short term securities and U.S. Government obligations, aggregated $78,340,429 and $90,838,356, respectively.
5. Capital. The Fund’s Articles of Incorporation, as amended, permit the Fund to issue 337,024,900 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 on the NYSE at a discount of 10% or more (or such other
percentage as the Board may determine from time
26
The Gabelli Equity Trust Inc.
Notes to Financial Statements (Unaudited) (Continued)
to time) from the NAV of the shares. During the six months ended June 30, 2020 and the year ended December 31, 2019, 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, 2020
(Unaudited)
|
|
|
|
|
Year Ended
December 31, 2019
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Increase from common shares issued upon reinvestment of distributions
|
|
|
2,627,725
|
|
|
$
|
11,024,899
|
|
|
|
|
|
3,734,016
|
|
|
$
|
21,764,586
|
|
The Fund has an effective shelf registration initially authorizing the offering of an additional
$500 million of common or preferred shares. As of June 30, 2020, the Fund has approximately $227 million available for issuance under the current shelf registration.
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 stockholders. 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 E, Series G, Series H, Series J, and Series K Preferred Stock at redemption prices of $25,000, $25,000, $25, $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 stockholders 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 stockholders.
For Series C and Series E Preferred Stock, 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 stockholders 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 E, Series G, and Series H Preferred Stock at their respective
liquidation prices plus any accrued and unpaid dividends. In addition, the Board has authorized the repurchase of the Series J and Series K Preferred Stock in the open market at a price less than the $25 liquidation value per share. During the six
months ended June 30, 2020 and the year ended 2019, the Fund did not repurchase or redeem any shares of Series G, Series H, or Series J Preferred Stock.
27
The Gabelli Equity Trust Inc.
Notes to Financial Statements (Unaudited) (Continued)
On December 26, 2019, the Fund redeemed and retired 2,363,860 outstanding shares of Series D Preferred
Stock at the liquidation value of $59,096,500.
On December 16, 2019, the Fund issued 4,000,000 shares of 5.000% Series K Cumulative
Preferred Shares (Series K) receiving $96,525,000 , after the deduction of estimated offering expenses of $325,000 and underwriting fees of $3,150,000. The liquidation value of the Series K is $25 per share. The Series K has an annual dividend rate
of 5.000%. The Series K is non callable before December 16, 2024.
The Fund has the authority to purchase its auction rate Series C and
Series E 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.
During the six months ended June 30, 2020, the Fund repurchased 388 Series C and 12 Series E Preferred through a negotiated
private transaction, and 7,000 Series K Preferred in the open market.
The following table summarizes Cumulative Preferred Stock information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
|
|
Issue Date
|
|
|
Authorized
|
|
|
Number of Shares
Outstanding at
06/30/20
|
|
|
Net Proceeds
|
|
|
2020 Dividend
Rate Range
|
|
|
Dividend
Rate at
06/30/20
|
|
|
Accrued
Dividends at
06/30/20
|
|
C Auction Rate
|
|
|
June 27, 2002
|
|
|
|
5,200
|
|
|
|
2,492
|
|
|
$
|
128,246,557
|
|
|
|
0.070% to 2.783%
|
|
|
|
0.175%
|
|
|
|
$ 2,091
|
|
|
E Auction Rate
|
|
|
October 7, 2003
|
|
|
|
2,000
|
|
|
|
1,108
|
|
|
$
|
49,350,009
|
|
|
|
0.070% to 2.766%
|
|
|
|
0.175%
|
|
|
|
$ 664
|
|
|
G5.000%
|
|
|
August 1, 2012
|
|
|
|
3,280,477
|
|
|
|
2,779,621
|
|
|
$
|
69,407,417
|
|
|
|
Fixed Rate
|
|
|
|
5.000%
|
|
|
|
$48,257
|
|
|
H5.000%
|
|
|
September 28, 2012
|
|
|
|
4,198,880
|
|
|
|
4,172,873
|
|
|
$
|
100,865,695
|
|
|
|
Fixed Rate
|
|
|
|
5.000%
|
|
|
|
$72,446
|
|
|
J5.450%
|
|
|
March 28, 2016
|
|
|
|
4,500,000
|
|
|
|
3,200,000
|
|
|
$
|
77,212,332
|
|
|
|
Fixed Rate
|
|
|
|
5.450%
|
|
|
|
$60,555
|
|
|
K5.000%
|
|
|
December 16, 2019
|
|
|
|
4,000,000
|
|
|
|
3,993,000
|
|
|
$
|
96,525,000
|
|
|
|
Fixed Rate
|
|
|
|
5.000%
|
|
|
|
$69,323
|
|
The holders of Preferred Stock generally are entitled to one vote per share held on each matter submitted to a
vote of stockholders of the Fund and will vote together with holders of common stock as a single class. The holders of Preferred Stock voting together as a single class also have the right currently to elect two Directors and, under certain
circumstances, are entitled to elect a majority of the Board of Directors. In addition, the affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding shares of the preferred stock, voting as a single class, will
be required to approve any plan of reorganization adversely affecting the preferred stock, and the approval of two-thirds of each class, voting separately, of the Fund’s outstanding voting stock must
approve the conversion of the Fund from a closed-end to an open-end investment company. The approval of a majority (as defined in the 1940 Act) of the outstanding
preferred stock and a majority (as defined in the 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.
28
The Gabelli Equity Trust Inc.
Notes to Financial Statements (Unaudited) (Continued)
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.