Gabelli Equity Trust Reaffirms 10% Distribution Policy
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Gabelli Equity Trust Inc. Declares Distribution
The Board of Directors of The Gabelli Equity Trust Inc. (NYSE:GAB) has reaffirmed its 10% distribution policy by declaring a cash distribution of $0.15 per share. This distribution is payable to common stock shareholders of record.
Importance of the 10% Distribution Policy
The Gabelli Equity Trust aims to provide a minimum annual distribution of 10% of the average net asset value (NAV) within a calendar year. This strategy is designed to meet the minimum distribution requirements set by the Internal Revenue Code for regulated investment companies.
Understanding the Net Asset Value
The average net asset value is calculated based on the average of the NAVs at the end of the last day of the four preceding calendar quarters. Investors should note that the net asset value per share can fluctuate daily, influencing the overall strategy of the Fund.
Review Process for Distributions
The Board of Directors conducts a quarterly review of potential distributions. Factors taken into account include income generated, realized capital gains, and overall capital available. The distribution level is carefully monitored in relation to the net asset value and the current market environment.
Potential Modifications to the Policy
While the distribution policy is currently in place, it is essential for investors to understand that this policy is subject to modification. The Board of Directors can amend the policy at any time, and there is no guarantee of its continuation.
Tax Implications of Distributions
The distributions may include long-term capital gains or qualified dividend income, each being subject to federal income tax rates. Individuals whose income surpasses specific thresholds may also face a Medicare surcharge on their net investment income, which includes dividends and capital gains.
Handling Insufficient Earnings
In the event that the Fund does not generate sufficient earnings to cover the aggregate distributions, the excess amount distributed could be treated as a return of capital. This is generally not taxable and would reduce the shareholder's cost basis.
Components of the Distribution
Long-term capital gains, qualified dividend income, investment company taxable income, and any return of capital will be allocated on a pro-rata basis for the year. For 2024, the anticipated distribution breakdown involves approximately 4% from net investment income, 20% from net capital gains, and 76% deemed a return of capital.
Investor Communication
It’s crucial for shareholders to understand that all taxable accounts will receive notification regarding the components and tax treatment of 2024 distributions via Form 1099-DIV in early 2025. This ensures that investors are kept informed of how their investments are performing.
About The Gabelli Equity Trust
The Gabelli Equity Trust Inc. operates as a diversified, closed-end management investment company with approximately $2.0 billion in total net assets. Its primary objective is to achieve long-term growth of capital, which aligns with the firm's extensive investment strategies.
Investment Management
The Fund is managed by Gabelli Funds, LLC, which is a subsidiary of GAMCO Investors, Inc. This management group is well-respected and known for its diverse investment approaches aimed at maximizing shareholder value.
Contact Information
For more information on the Fund's distribution policy or other inquiries, investors are encouraged to reach out to:
Molly Marion
(914) 921-5681
mmarion@gabelli.com
Frequently Asked Questions
What is the declared distribution for Gabelli Equity Trust?
The declared cash distribution for Gabelli Equity Trust is $0.15 per share.
How often are distributions reviewed?
The Board of Directors reviews potential distributions quarterly.
What happens if the Fund doesn't generate enough earnings?
If the Fund doesn't generate sufficient earnings, excess distributions may be treated as a return of capital.
Who manages The Gabelli Equity Trust?
The Gabelli Equity Trust is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc.
How can I contact Gabelli Equity Trust for more information?
For inquiries, you can contact Molly Marion at (914) 921-5681 or via email at mmarion@gabelli.com.
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