The Board of Directors of The Gabelli Equity Trust Inc. (NYSE:GAB) (the
“Fund”) reaffirmed its 10% distribution policy and declared a $0.15 per
share cash distribution payable on March 24, 2015 to common stock
shareholders of record on March 17, 2015.
The Fund intends to pay a quarterly distribution of an amount determined
each quarter by the Board of Directors. Under the Fund’s current
distribution policy, the Fund intends to pay a minimum annual
distribution of 10% of the average net asset value of the Fund within a
calendar year or an amount sufficient to satisfy the minimum
distribution requirements of the Internal Revenue Code for regulated
investment companies. The average net asset value of the Fund is based
on the average net asset values as of the last day of the four preceding
calendar quarters during the year. The net asset value per share
fluctuates daily.
Each quarter, the Board of Directors reviews the amount of any potential
distribution from the income, realized capital gain, or capital
available. The Board of Directors will continue to monitor the Fund’s
distribution level, taking into consideration the Fund’s net asset value
and the financial market environment. The Fund’s distribution policy is
subject to modification by the Board of Directors at any time, and there
can be no guarantee that the policy will continue. The distribution rate
should not be considered the dividend yield or total return on an
investment in the Fund.
All or part of the distribution may be treated as long-term capital gain
or qualified dividend income (or a combination of both) for individuals,
each subject to the maximum federal income tax rate, which is currently
20% in taxable accounts for individuals (or zero depending on an
individual’s tax bracket). In addition, certain U.S. shareholders who
are individuals, estates or trusts and whose income exceeds certain
thresholds will be required to pay a 3.8% Medicare surcharge on their
"net investment income", which includes dividends received from the Fund
and capital gains from the sale or other disposition of shares of the
Fund.
If the Fund does not generate sufficient earnings (dividends and
interest income and realized net capital gain) equal to or in excess of
the aggregate distributions paid by the Fund in a given year, then the
amount distributed in excess of the Fund’s earnings would be deemed a
return of capital. Since this would be considered a return of a portion
of a shareholder’s original investment, it is generally not taxable and
is treated as a reduction in the shareholder’s cost basis. Under federal
tax regulations, some or all of the return of capital distributed by the
Fund may be taxable as ordinary income in certain circumstances. This
may occur when the Fund has a capital loss carry forward, net capital
gains are realized in a fiscal year, and distributions are made in
excess of investment company taxable income.
Long-term capital gains, qualified dividend income, ordinary income, and
return of capital, if any, will be allocated on a pro-rata basis to all
distributions to common shareholders for the year. Based on the
accounting records of the Fund as of February 10, 2015, the current
distribution paid to common shareholders in 2015 would include
approximately 5% from net capital gains and 95% would be deemed a return
of capital on a book basis. The estimated components of each
distribution are updated and provided to shareholders of record in a
notice accompanying the distribution and are available on our website (www.gabelli.com).
The final determination of the sources of all distributions in 2015 will
be made after year end and can vary from the quarterly estimates. All
shareholders with taxable accounts will receive written notification
regarding the components and tax treatment for all 2015 distributions in
early 2016 via Form 1099-DIV.
Investors should carefully consider the investment objectives, risks,
charges, and expenses of the Fund before investing. More
information regarding the Fund’s distribution policy and other
information about the Fund is available by calling 800-GABELLI
(800-422-3554) or visiting www.gabelli.com.
The Gabelli Equity Trust Inc. is a non-diversified, closed-end
management investment company with $1.8 billion in total net assets
whose primary investment objective is long-term growth of capital. The
Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors,
Inc. (NYSE:GBL).
Copyright Business Wire 2015