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THE GABELLI
EQUITY TRUST INC.
FIRST QUARTER REPORT
MARCH 31, 2000
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THE GABELLI
EQUITY TRUST INC.
Our cover icon represents the underpinnings of Gabelli. The Teton mountains in
Wyoming represent what we believe in America -- that creativity, ingenuity, hard
work and a global uniqueness provide enduring values. They also stand out in an
increasingly complex, interconnected and interdependent economic world.
[Graphics of flags of each of the 50 united States omitted]
ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE
FLORIDA GEORGIA
HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE
MARYLAND
MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA
NEVADA NEW HAMPSHIRE NEW JERSEY
NEW MEXICO NEW YORK N. CAROLINA N. DAKOTA OHIO OKLAHOMA OREGON
PENNSYLVANIA RHODE ISLAND S. CAROLINA
S. DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WEST VIRGINIA WASHINGTON
WISCONSIN WYOMING
INVESTMENT OBJECTIVE:
The Gabelli Equity Trust Inc. is a closed-end, non-diversified management
investment company whose primary objective is long-term growth of
capital, with income as a secondary objective.
THIS REPORT IS PRINTED ON RECYCLED PAPER.
TO OUR SHAREHOLDERS,
In the first quarter of 2000, we continued to experience a "have and have
not" stock market. Until the last week of the quarter, when we saw a rotation
out of the technology sector and into value sectors, so called "new economy"
stocks flourished, while "old economy" stocks languished or retreated. Despite
the late sell-off, the technology-heavy Nasdaq Composite Index and the small cap
growth-oriented Russell 2000 Index finished with solid gains. However, the
Standard & Poor's 500 Index closed the quarter only modestly higher, while the
Dow Jones Industrial Average declined.
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THE GABELLI
EQUITY TRUST INC.
Momentum investing--buying stocks that are rising in price--continued to
be considerably more rewarding than owning stocks representing good fundamental
values. We do not know how much longer this trend will continue. However, we see
exceptional opportunity for selective value investors in a market that has
shunned high quality companies in a wide range of healthy industries.
INVESTMENT PERFORMANCE
For the first quarter ended March 31, 2000, The Gabelli Equity Trust's
(the "Equity Trust") net asset value ("NAV") total return was 1.67% after
adjusting for the $0.27 per share distribution paid on March 27, 2000. The
Standard & Poor's ("S&P") 500 Index, Value Line Composite and Russell 2000
Indices had total returns of 2.29%, 4.03% and 7.08%, respectively, over the same
period. Each index is an unmanaged indicator of stock market performance.
The Equity Trust was up 26.93% over the trailing twelve-month period after
adjusting for the $1.17 per share in distributions and the $0.75 per share
spin-off of The Gabelli Utility Trust. The S&P 500, Value Line Composite and
Russell 2000 Indices rose 17.93%, 19.47% and 37.29%, respectively, over the same
twelve-month period.
For the ten-year period ended March 31, 2000, the Equity Trust's total
return averaged 14.44% annually, including adjustments of $14.35 per share in
distributions, versus average annual returns of 18.82%, 14.34% and 14.44% for
the S&P 500, Value Line Composite and Russell 2000 Indices, respectively. Since
inception on August 21, 1986 through March 31, 2000, the Equity Trust had a
cumulative total return of 573.02%, including adjustments of $17.55 per share in
distributions, which equates to an average annual total return of 15.02%.
AVERAGE ANNUAL RETURNS - MARCH 31, 2000
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NAV AVERAGE AVERAGE ANNUAL
ANNUAL RETURN INVESTMENT RETURN (A)
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1 Year ................................ 26.93% 18.38%
5 Year ................................ 18.63% 17.18%
10 Year ............................... 14.44% 13.90%
Life of Fund (SINCE AUGUST 21, 1986) .. 15.02% 14.08%
(A) BASED ON INITIAL OFFERING PRICE OF $10.00
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The Equity Trust's common shares ended the first quarter at $12.125 per
share on the New York Stock Exchange, a decline of 1.30% for the first quarter.
The Equity Trust's common shares rose 18.38% over the trailing twelve-month
period after adjusting for all distributions.
WHAT WE DO
The success of momentum investing in recent years and investors' desire
for instant gratification have combined to make value investing appear dull. At
the risk of being dull, we will once again describe the "boring" value approach
that has seen us through both good and bad markets over the last 13 years at The
Gabelli Equity Trust and for over 23 years at Gabelli Asset Management Company.
In past reports, we have tried to articulate our investment philosophy and
methodology. The accompanying graphic further illustrates the interplay among
the four components of our valuation approach.
[The Gabelli Triangle Omitted]
Our focus is on free cash flow: earnings before interest, taxes,
depreciation and amortization ("EBITDA") minus the capital expenditures
necessary to grow the business. We believe free cash flow is the best barometer
of a business' value. Rising free cash flow often foreshadows net earnings
improvement. We also look at earnings per share trends. Unlike Wall Street's
ubiquitous earnings momentum players, we do not try to forecast earnings with
accounting precision and then trade stocks based on quarterly expectations and
realities. We simply try to position ourselves in front of long-term earnings
uptrends. In addition, we analyze on and off balance sheet assets and
liabilities such as plant and equipment, inventories, receivables, and legal,
environmental and health care issues. We want to know everything and anything
that will add to or detract from our private market value ("PMV") estimates.
Finally, we look for a catalyst: something happening in the company's industry
or indigenous to the company itself that will surface value. In the case of the
independent telephone stocks, the catalyst is a regulatory change. In the
agricultural equipment business, it is the increasing world-wide demand for
American food and feed crops. In other instances, it may be a change in
management, sale or spin-off of a division or the development of a profitable
new business.
Once we identify stocks that qualify as fundamental and conceptual
bargains, we then become patient investors. This has been a proven long-term
method for preserving and enhancing wealth in the U.S. equities market. At the
margin, our new investments are focused on businesses that are well-managed and
will benefit from sustainable long-term economic dynamics. These include macro
trends, such as the globalization of the market in filmed entertainment and
telecommunications, and micro trends, such as an increased focus on productivity
enhancing goods and services.
COMMENTARY
THE PERILS OF PAULINE
In each episode of the old movie serial, "The Perils of Pauline", the
heroine faced certain doom until a hero suddenly appeared to save the day.
Through most of the first quarter of 2000, equities were imperiled by rising
short-term interest rates and the perception that Federal Reserve Chairman Alan
Greenspan was determined to restrain the stock market as well as the economy.
With equities dangling from a cliff, a hero in the form of declining market
interest rates (bond yields) rescued stocks from a sharp correction that
appeared ready to turn into a full scale bear market.
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Of course, in the old movie shorts, as soon as Pauline escaped from one
life-threatening predicament, she was thrust into another. Over the short term,
we suspect the stock market will also face a series of new dangers. The Federal
Reserve should continue to hike short term interest rates, eventually killing
the nascent bond market rally and putting pressure back on stocks. Valuations in
the technology sector also present a risk to the market. If some of the
technology "bellwethers" fall short of rather grand earnings expectations, we
could see a sharp correction that would drag down the market indices. There is
also the uncertainty of an election year. Will a Bush victory lead to tax cuts
that will help sustain consumer spending or will a Gore triumph dash the hopes
of consumers and investors counting on tax relief?
There are plenty of potential heroes that could once again rescue the
market. Corporate earnings growth is strong and, with synchronized global
growth, may get stronger. If we see evidence of economic deceleration in the
second half of the year, the Fed may release the monetary brakes and market
interest rates could come down further. We should continue to see deals,
particularly in out-of-favor industries where many great companies have become
irresistible business bargains. Deals may finally prop up the value sector of
the market. Finally, investors love happy endings. Over the last several years,
whenever stocks have stumbled investors have rushed in to lift them to safety.
We are always attuned to the economic and stock market melodrama. However,
we try to keep our shareholders out of harm's way by investing in quality
companies trading at a discount to their "real world" economic value. This may
be dull and periodically not particularly productive. However, over the Equity
Trust's history, this approach has produced rewarding returns.
OLD ECONOMY, NEW ECONOMY
The financial press and market observers are adept at developing
simplistic theories to explain market trends. Recently, the pundits have divided
the market into "old economy" and "new economy" stocks. The former are thought
to be worthless and the latter are perceived as almost priceless. A closer look
at the situation reveals the flaws in this current logic.
The so-called "new economy" stocks are primarily technology companies
developing new ways to distribute information, products, and services. Some are
fine companies with exceptional growth prospects. However, the "new economy"
superstars do not drill for oil, process chemicals, make household goods or food
products, or manufacture automobiles. They do not knit sweaters or make shoes.
They do not build houses. They do not produce motion pictures or television
programs. They are simply building systems that make it possible for "old
economy" companies to provide these essential products and services more
efficiently and cost effectively. Will the best of the "new economy" companies
make money and, over the long term, enrich investors? Yes. Will the "old
economy" companies that harness the power of new technologies prosper and also
reward shareholders? Yes. Presently, investors can pay sky-high valuations for
"new economy" companies or scoop up high quality "old economy" stocks at deep
discounts.
Let me give you an example. General Motors, Ford, and Daimler Chrysler are
developing a business-to-business Internet network to streamline the procurement
of auto parts from original equipment manufacturers. Oracle, E-commerce (20%
owned by GM), and i2 Technologies are building the network and will help operate
it. We imagine they will profit in the process. But the automobile manufacturers
will also benefit substantially. The auto-makers
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estimate this new network could shave as much as $2,000 from the cost of
manufacturing a new automobile. This should translate into lower automobile
prices, increased demand, higher volume and better earnings for these boring
"old economy" companies.
Additionally, the auto-makers will own this network. Marked to market
based on valuations currently being given to "B2B" network companies, this could
be an incredibly valuable and still largely unrecognized asset. You can pay
incredible multiples for the stock of Oracle and i2 Technologies and you may
continue to be rewarded, albeit with the escalating risk that accompanies
historically unprecedented valuations. Or, you can buy the stock of GM for ten
times earnings and three times cash flow. We also note that GM has a substantial
investment in General Motors Hughes, a "new economy" company dominating the
satellite broadcasting business through its DirecTV division. If we back out the
value of GM's ownership in GM Hughes, the stock is even less expensive, trading
at an almost absurdly low price to earnings multiple and roughly 2.5 times cash
flow.
GM is just one example of an "old economy" company employing "new economy"
technologies to its advantage. We believe "brick and mortar" retailers will do
well as they further develop "click and mortar" capabilities. Established
financial services companies should also do well as they introduce on-line
services. Once again, you have the option of paying up for the "new economy"
kids on the block or paying discount prices for established, high quality
companies that can and will prosper using new technologies.
THE ENVELOPE PLEASE
This quarter, our performance awards go to telecommunications stocks such
as Sprint Corp. PCS, Cable & Wireless, Telecom Italia, Vodafone AirTouch and
AT&T. We got some mileage from Harley Davidson, enjoyed our stay at Mirage
Resorts (which agreed to be acquired by MGM Grand), and were rewarded for
staying tuned to Rogers Communications.
Our losers list reads like a Who's Who of great industrial companies
including Caterpillar and DuPont, in addition to high quality cyclicals such as
Maytag and Trinity Industries. Food stocks also disappointed.
TIME WARNER AND AOL--THE SHAPE OF DEALS TO COME
The impending marriage of Time Warner and America Online combines the old
economy with the new (product with distribution)--a merger trend that we believe
will gain momentum in the years ahead. Wall Street is struggling over how to
value the bride and the groom prior to the wedding. Analysts following AOL were
accustomed to looking primarily at top line revenue growth and making
assumptions regarding future operating margins. Analysts covering Time Warner
(including yours truly) looked primarily at cash flow growth, and now must come
up with a different yardstick to assess value.
As evidenced by the decline in both stocks shortly after the merger was
announced, both camps were disappointed with the deal. AOL loyalists did not
like the fact that the addition of Time Warner would slow revenue growth and
Time Warner enthusiasts saw healthy operating profits being diluted. Both stocks
have rebounded since, and as we write, Time Warner is at a 52-week high.
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Backing away from the problem of valuing two very different companies and
taking a longer-term view, the marriage of quality products and terrific
distribution makes economic sense. Sometimes it will take the form of mutually
rewarding joint venture arrangements. But, we also expect to see more deals with
old and new economy companies finding synergistic partners. This trend should
further intensify already strong merger and acquisition activity, providing an
additional tailwind for value investors.
AN APPETITE FOR FOOD STOCKS
There is a degree of economic logic in the recent poor performance of
cyclical industrial companies. The Federal Reserve is committed to slowing the
economy, and if it succeeds, we may be seeing peak earnings for economically
sensitive companies. We are of the opinion that earnings will be better than
anticipated and that the sell-off in cyclical companies is overdone. That is why
we continue to own high quality cyclical stocks.
We see no economic justification for the poor performance of food stocks.
High quality brand name franchises including General Mills, Kellogg, Quaker
Oats, Keebler Foods and Pepsico all declined this quarter, with some down quite
sharply. We doubt that if economic growth slows from 5.0% to 3.5%, consumers are
going to reduce spending on food or switch from brand name products to cheaper
private label goods. "Honey, Gross Domestic Product growth is now down to 3.5%.
We better cut back on the pickles and coffee cake, and instead of buying Pepsi,
let's get that generic cola."
Historically, food company earnings have not been particularly sensitive
to modestly slower economic growth, and in general, earnings for food companies
have been relatively stable and should stay that way. Food stocks are not down
because of any fundamental change in the business or disappointing earnings. In
our opinion, food stocks are simply a casualty of investors' general disregard
for any industry group lacking the rapid growth potential of technology stocks.
Currently, you can load up on some of the best companies in the food business at
very attractive valuations. Food for thought for value investors.
INTERNATIONAL OUTLOOK
A portion of the Equity Trust's portfolio continues to be managed by
Caesar Bryan. Caesar is the portfolio manager of the Gabelli International
Growth Fund and the co-portfolio manager of the Gabelli Global Opportunity Fund.
Caesar's thoughts on international markets and global economies are provided
below:
As we suggested in the Equity Trust's annual report, 1999's performance is
unlikely to be repeated this year. For a number of reasons the investment
environment has become more challenging. First, stocks have had a good run in
most international markets. This is especially so for companies involved in many
of the growth sectors of the economy. These, of course, are the sectors to which
we are attracted. On the other hand, slower growth sectors of the market have
lagged badly. Therefore, some rotation from the winners to the losers can be
expected and has already occurred. As a consequence, we have recently added to
the portfolio's pharmaceutical and financial services holdings, which are both
attractively valued and have not performed well during the past year.
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Second, the Federal Reserve Board and other central banks, including the
European Central Bank, are raising interest rates. Higher interest rates are
generally not positive for equity markets. However, if higher interest rates
slow the economy and prevent inflation from rising, equity markets should not be
too adversely affected.
Japan remains the exception to this. Short term interest rates in Japan
remain effectively at zero and the ten-year government bond yields less than 2%.
The authorities have stated that interest rates in Japan will remain at low
levels until a self-sustaining economic recovery takes hold. Recent economic
statistics suggest that a turnaround is near. Corporate investment has revived
and the consumer, dormant for so long, is beginning to stir. This nascent
consumer activity is based upon a rise in wages that actually had fallen
significantly during the past two years. A decline in wages is a highly unusual
occurrence in a developed economy.
The portfolio's holdings in Japan have been concentrated in
non-manufacturing sectors such as broadcasting, telecommunications and
information software, all of which had performed well through the beginning of
February. Since then, the share prices of many of these companies have fallen
dramatically, largely due to what we believe is the "Softbank and Hikari Tsushin
effect". These two stocks became the darlings of investors in Japan during the
second half of 1999. As the stocks appreciated in value, more investors got
sucked in. As the stock prices continued to climb, the more other investors,
fearful of being left behind, climbed aboard. Softbank's share price went from
(Y)40,000 in October to (Y)198,000 on February 15, 2000. At around that time, a
well-known analyst put a price target of (Y)400,000 on the shares. Good call?
No. The current price is back to about (Y)40,000 again. Hikari Tsushin's price
decline has been even more dramatic. The problem for us was that on the way
down, Softbank and Hikari Tsushin kept falling "limit down" with no trades
taking place. As a consequence, traders and investors had to sell other
securities in the same broad sector to raise cash. When this process ends, we
expect our investments to recover. Many of the companies in which we have a
proprietary product, and are growing at rates over 20% and trade on reasonable
multiples of earnings. We believe that we have suffered collateral damage.
Looking ahead, we expect the portfolio to remain concentrated in the
European markets. We believe these markets should provide attractive returns as
the European economy becomes more competitive following the introduction of the
euro. We anticipate many industries continuing their consolidation, including
telecommunications and media. We believe the takeover of Mannesmann by Vodafone
is only the beginning. Two recent media deals have validated the high valuations
accorded to media properties in Europe. Here again, we expect further
transactions that will benefit our portfolio holdings.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over
time.
BCE INC. (BCE - $125.4375 - NYSE) is Canada's global communications company. BCE
has announced a series of transactions in recent months. The company plans to
spin off the majority of its stake in Nortel Networks Corp.(NT - $126.00 - NYSE)
to BCE shareholders. BCE shareholders will receive 0.78 shares of NT per BCE
share. Other pending transactions include the acquisition of CTV, a Canadian
broadcaster, and Teleglobe, a provider of global network services.
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CABLEVISION SYSTEMS CORP. (CVC - $60.75 - AMEX) is one of the nation's leading
communications and entertainment companies, with a portfolio of operations that
spans state-of-the-art, high-speed multimedia delivery, subscription cable
television services, championship professional sports teams and national cable
television networks. Headquartered in Bethpage, N.Y., Cablevision serves more
than 3.4 million cable customers primarily in three core markets: New York,
Boston and Cleveland. Cablevision is a leader in delivering cutting-edge
technological innovation, such as Optimum TV, to the home. Through its Rainbow
Media Holdings subsidiary, Cablevision manages and develops internationally
recognized content offerings such as the popular national television networks
American Movie Classics, Bravo and The Independent Film Channel. Cablevision
owns and operates New York City's famed Madison Square Garden, which includes
the arena complex, the N.Y. Knicks, the N.Y. Rangers and the MSG network.
Cablevision also operates Radio City Entertainment and holds a long term lease
for Radio City Music Hall, home of the world-famous Rockettes.
CHRIS-CRAFT INDUSTRIES INC. (CCN - $63.6875 - NYSE; CCN'B - $63.50 - NYSE),
through its 80% ownership of BHC Communications (BHC - $156.00 - AMEX), is
primarily a television broadcaster. BHC owns and operates UPN affiliated
stations in New York (WWOR), Los Angeles (KCOP) and Portland, Oregon (KPTV). BHC
also owns 58% of United Television (UTVI - $132.375 - Nasdaq), which operates an
NBC affiliate, an ABC affiliate and five UPN affiliates. UTVI acquired WRBW, a
UPN affiliate in Orlando, for $60 million in July 1999. Chris-Craft's television
stations constitute one of the nation's largest television station groups,
reaching approximately 22% of U.S. households. Chris-Craft is a major
beneficiary of the recent FCC ruling allowing television duopoly, or ownership
of two stations in a single market. The Chris-Craft complex is debt free and
strongly positioned to expand its operations, with roughly $1.5 billion in cash
and marketable securities.
LIBERTY MEDIA GROUP (LMG'A - $59.25 - NYSE), owned by AT&T Corp. (T - $56.25 -
NYSE), is engaged in businesses which provide programming services, including
production, acquisition and distribution through all media formats, as well as
businesses engaged in electronic retailing, direct marketing and other services.
LMG holds interests in globally-branded entertainment networks such as Discovery
Channel, USA Network, QVC, Encore and STARZ!. Liberty's assets also include
interests in international video distribution businesses, international
telephony and domestic wireless, plant and equipment manufacturers, and other
businesses related to broadband services. Liberty Media Group Class A and Class
B common stock are tracking stocks of AT&T.
TELECOM ITALIA SPA (TIT.MI - $14.94 - MILAN STOCK EXCHANGE; TI - $152.00 - NYSE)
is the principal provider of domestic and international telecommunications
services in Italy. Telecom Italia is also the seventh largest fixed
telecommunications operator as well as the largest mobile operator in Europe
through its 60% held subsidiary, Telecom Italia Mobile. In addition, Telecom
Italia also provides leased lines, data communications services, satellite
communications services and the development and manufacture of
telecommunications equipment and networks. In 1999, the value of Telecom
Italia's franchise was highlighted through a takeover battle that saw Olivetti
outmaneuver Deutsche Telekom for control of Telecom Italia.
TELEPHONE & DATA SYSTEMS INC. (TDS - $111.00 - AMEX) is a diversified
telecommunications service company with cellular telephone, local telephone and
personal communications services ("PCS") operations. TDS serves 3.7 million
customers in 35 states. TDS conducts the vast majority of its cellular
operations through its 81% owned
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United States Cellular Corp. (USM - $71.00 - AMEX) and conducts its telephone
operations through its wholly-owned TDS Telecommunications Corp. ("TDS Telecom")
subsidiary, a full-service local exchange carrier. TDS conducts its broadband
PCS operations through 82.3% owned Aerial Communications Inc. (AERL - $56.8125 -
Nasdaq), which provides PCS service in the Minneapolis, Tampa-St.
Petersburg-Orlando, Houston, Pittsburgh, Kansas City and Columbus Major Trading
Areas. On September 20, 1999, VoiceStream Wireless (VSTR - $128.8125 - Nasdaq)
announced the acquisition of Aerial in a $3.3 billion transaction. Pro-forma for
this acquisition, TDS will own over 36 million shares of VoiceStream.
TIME WARNER INC. (TWX - $100.00 - NYSE), with its 1996 acquisition of Turner
Broadcasting System, became the global leader in media and entertainment, with
interests in filmed entertainment, television production and broadcasting,
recorded music, cable television programming, magazine and book publishing,
direct marketing and cable television systems. Time Warner controls a host of
powerful brands, such as Warner Brothers, CNN, HBO, Cinemax, Time and People
magazines. Under the terms of a definitive agreement approved by the boards of
both companies, Time Warner and America Online (AOL - $67.25 - NYSE) have agreed
to merge in an all-stock combination valued at $350 billion.
UNITED TELEVISION INC. (UTVI - $132.375 - NASDAQ), headquartered in Beverly
Hills, California, is a television broadcasting group which owns and operates
seven of the stations (one ABC, one NBC and five UPN affiliates) that comprise
Chris-Craft's (CCN - $63.6875 - NYSE) television division. The $60 million
purchase of WRBW, a UPN affiliate in Orlando (the country's 22nd largest and the
fastest growing television market over the past decade), closed on July 7, 1999.
UTVI stations cover approximately nine percent of the U.S. population. UTVI is
58%-owned by BHC Communications (BHC - $156.00 - AMEX). United Television is a
beneficiary of the recent FCC ruling allowing television duopoly, or ownership
of two stations in a single market.
VIACOM INC. (VIA'A - $53.4375 - NYSE), long a major provider of entertainment
"content", has evolved into one of the world's dominant media companies.
Non-core assets are being divested and debt has been reduced to approximately $8
billion. Viacom is focusing on global expansion of its media franchises. Viacom
is particularly well-positioned in music (notably MTV) and cable networks (such
as Nickelodeon). Viacom is in the process of merging with CBS in a $36 billion
transaction.
DAILY NAVS NOW DISTRIBUTED BY NASDAQ
Since our inception, we have made the net asset value available on nightly
recordings through 1-800-GABELLI. Now, Nasdaq is also disseminating the daily
per share net asset values for the Equity Trust, which is traded on the New York
Stock Exchange. The NAV ticker symbol via Nasdaq is "XGABX".
The NAVs are available through any stock quote lookup service and on
broker Nasdaq level one terminals. The dissemination of daily NAVs allows
investors and brokers to better track the long-term performance of the Fund's
underlying portfolios. We applaud Nasdaq's efforts in making closed-end funds'
NAVs available on a daily basis.
COMMON STOCK 10% DISTRIBUTION POLICY
The Equity Trust continues to maintain its 10% Distribution Policy whereby
the Equity Trust pays out to common stock shareholders 10% of its average net
assets each year. Pursuant to this policy, the Equity Trust distributed $0.27
per share on March 27, 2000. The next distribution is scheduled for June 2000.
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7.25% TAX ADVANTAGED CUMULATIVE PREFERRED STOCK - DIVIDENDS
The Equity Trust's 7.25% Tax Advantaged Cumulative Preferred Stock paid a
cash distribution on March 27, 2000 of $0.453125 per share. The next
distribution is scheduled for June 2000.
IN CONCLUSION
In a market that loved technology stocks and disdained just about
everything else, the Equity Trust took a small step forward in the first quarter
of 2000. We are not anti-technology, but prefer investing in companies with
products and services we understand. We are also risk averse and not inclined to
own stocks with valuations that challenge economic logic. Finally, momentum
investing-buying stocks simply because they are going up-is the antithesis of
our value discipline.
The upside of this narrow market is that we see truly appealing valuations
for some great companies in a wide range of industry groups. We cannot be sure
when investors will gravitate to these great values. However, we are quite
confident that our portfolio should continue to generate attractive long term
returns.
Sincerely,
/s/signature
MARIO J. GABELLI, CFA
Portfolio Manager and
Chief Investment Officer
April 14, 2000
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TOP TEN HOLDINGS
MARCH 31, 2000
--------------
Chris-Craft Industries Inc.
BCE Inc.
Telephone & Data Systems Inc.
Viacom Inc.
Liberty Media Group
Sprint Corp.
United Television Inc.
Cablevision Systems Corp.
Time Warner Inc.
Telecom Italia SpA
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NOTE: The views expressed in this report reflect those of the portfolio managers
only through the end of the period stated in this report. The managers' views
are subject to change at any time based on market and other conditions.
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THE GABELLI EQUITY TRUST INC.
PORTFOLIO CHANGES
QUARTER ENDED MARCH 31, 2000
(UNAUDITED)
OWNERSHIP AT
MARCH 31,
SHARES 2000
--------- ------------
NET PURCHASES
COMMON STOCKS
Albertson's Inc. ............... 55,000 260,000
Allegiance Telecom Inc. (a) .... 2,500 7,500
Allianz AG. .................... 1,000 4,100
Allstate Corp. ................. 10,000 110,000
Ametek Inc. .................... 10,000 100,000
AT&T Corp. (b) ................. 45,000 150,000
Avex Inc. (c) .................. 2,170 4,420
Aztar Corp. .................... 10,000 120,000
Bank One Corp. ................. 30,000 95,000
Bell Atlantic Corp. ............ 8,000 30,000
Benesse Corp. .................. 1,000 5,000
Benesse Corp. New Shares (d) ... 5,000 5,000
Bestfoods Inc. ................. 15,000 50,000
Borg Warner Automotive Inc. .... 5,000 25,302
Cable & Wireless Jamaica
Ltd. (e) ..................... 445,090 2,893,090
Carter-Wallace Inc. ............ 7,000 540,000
Central Newspapers Inc., Cl. A . 3,000 6,000
Chris-Craft Industries Inc. (f) 9,792 336,192
Chris-Craft Industries Inc.,
Cl. B (f) .................... 17,269 592,898
CIRCOR International Inc. ...... 10,000 95,000
Citizens Utilities Co., Cl. B. . 25,000 25,000
Clorox Co. ..................... 14,000 14,000
Coca-Cola Co. .................. 15,000 15,000
Columbia Energy Group .......... 40,000 100,000
Conoco Inc., Cl. A. ............ 60,000 100,000
Cordant Technologies Inc. ...... 250,000 250,000
Corn Products International Inc. 21,000 77,250
Cresco Ltd. (g) ................ 1,800 10,800
Delhaize America Inc., Cl. A. .. 10,000 70,000
Delta & Pine Land Co. .......... 5,000 5,000
Dexter Corp. ................... 1,000 46,000
Diageo plc, ADR. ............... 2,000 44,000
Federal-Mogul Corp. ............ 25,000 40,000
Ferro Corp. .................... 5,000 315,000
First Union Corp. .............. 75,000 105,000
Flowserve Corp. ................ 5,000 105,000
Fortune Brands Inc. ............ 5,000 120,000
Fuller (H.B.) Co. .............. 3,000 3,000
Furukawa Electric Co. Ltd. ..... 17,000 17,000
Gaylord Entertainment Co., Cl. A 2,500 190,000
GenCorp Inc. ................... 2,500 255,000
General Mills Inc. ............. 5,000 165,000
General Motors Corp. ........... 10,000 210,000
GenTek Inc. .................... 38,000 143,000
Genuine Parts Co. .............. 10,000 270,000
Gillette Co. ................... 30,000 70,000
Hilton Hotels Corp. ............ 200,000 200,000
HPY Holding - HTF Holding
Oyj Abp, Cl. A .............. 21,600 21,600
IMS Health Inc. ................ 50,000 50,000
Irish Life & Permanent plc ..... 90,000 90,000
ITT Industries Inc. ............ 40,000 100,000
John Hancock Financial
Services Inc. ................ 190,000 190,000
OWNERSHIP AT
MARCH 31,
SHARES 2000
--------- ------------
Kellogg Co. .................... 2,000 130,000
Koninklijke Philips
Electronics NV ............... 3,000 3,000
Liberty Media Group, Cl. A (h) . 320,000 760,000
Mark IV Industries Inc. ........ 55,000 300,000
Maytag Corp. ................... 19,000 25,000
MediaOne Group Inc. ............ 5,000 230,000
MGM Grand Inc. ................. 5,000 5,000
Midas Inc. ..................... 14,167 49,167
Molex Inc., Cl. A .............. 1,500 1,500
National Service Industries Inc. 10,000 120,000
Net One Systems Co. Ltd. (a) ... 15 15
NetCom ASA ..................... 5,000 5,000
Nippon Broadcasting System Inc.,
New Shares (i) .............. 2,000 2,000
Northrop Grumman Corp. ......... 2,000 92,000
NTL Inc. (j) ................... 3,125 15,625
Park-Ohio Holdings Corp. ....... 5,000 73,715
Pepsi Bottling Group Inc. ...... 40,000 100,000
PepsiCo Inc. ................... 41,000 420,000
Philip Morris Companies Inc. ... 6,000 20,000
Precision Castparts Corp. ...... 5,000 30,000
Pulitzer Inc. .................. 2,000 27,000
Quaker Oats Co. ................ 25,000 100,000
Ralston Purina Group. .......... 178,000 600,000
SBC Communications Inc. (k) .... 159,995 164,995
Scientific-Atlanta Inc. (l) .... 22,000 44,000
Secom Co. Ltd. ................. 1,000 13,000
Shaw Communications Inc., Cl. B 10,000 20,000
Shaw Communications Inc., Cl. B,
Non-Voting (l) .............. 40,000 80,000
Sony Corp., New Shares (m) ..... 8,000 8,000
Sprint Corp. (PCS Group) (l) ... 110,000 220,000
Square Co. Ltd. (a) ............ 2,500 10,500
Standard Motor Products Inc. ... 150,000 1,400,000
Sterling Software Inc. ......... 15,000 15,000
Sumisho Computer Systems Corp. . 1,000 11,000
Telefonos de Mexico SA,
Cl. L, ADR (l) .............. 18,000 36,000
Telesp Celular Participacoes
SA, ADR (n) ................. 10,760,547 10,760,547
Times Mirror Co., Cl. A ........ 20,000 20,000
Tootsie Roll Industries Inc. (f) 2,793 95,894
Travelers Property Casualty
Corp., Cl. A ................ 600,000 600,000
UCAR International Inc. ........ 30,000 130,000
UnitedGlobalCom Inc., Cl. A .... 2,000 14,000
U.S. Foodservice ............... 700,000 700,000
USA Networks Inc. (l) .......... 300,000 600,000
Vastar Resources Inc. .......... 5,000 5,000
Vodafone Group plc, ORD ........ 144,823 723,888
Waste Management Inc. .......... 30,000 200,000
Whitman Corp. .................. 55,000 411,000
PREFERRED STOCKS
Citizens Utilities Co.,
5.00% Cv. Pfd. ............... 5,000 15,000
10
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO CHANGES (CONTINUED)
QUARTER ENDED MARCH 31, 2000
(UNAUDITED)
OWNERSHIP AT
MARCH 31,
SHARES 2000
--------- ------------
NET SALES
COMMON STOCKS
Aerial Communications Inc. .. (4,000) 1,000
Aliant Inc. ................. (8,538) 8,132
Allen Telecom Inc. .......... (10,000) 290,000
American Express Co. ........ (30,000) 70,000
Amphenol Corp., Cl. A ....... (13,000) 124,000
Asatsu-DK Inc. .............. (20,000) --
Ascent Entertainment Group. . (105,768) --
Associated Group Inc.,
Cl. A (b) ................ (133,000) --
Associated Group Inc.,
Cl. B (b) ................ (133,000) --
Audiofina SA. ............... (5,000) 17,700
BCE Inc. .................... (45,000) 400,000
Block (H&R) Inc. ............ (5,000) 100,000
BroadWing Inc. .............. (3,000) 7,000
Cable & Wireless HKT Ltd., ADR (5,000) 50,000
Cable & Wireless plc, ADR ... (5,000) 145,000
Cablevision Systems Corp., Cl. A (20,000) 515,000
Canada Life Financial Corp. . (50,000) --
Capcom Co. Ltd. ............. (14,000) --
CheckFree Holdings Corp. .... (500) 1,500
Comcast Corp., Cl. A Special. (5,000) 90,000
Compagnie Financiere Richemont
AG, Cl. A ................ (300) 1,100
CRH plc ORD ................. (15,000) 90,000
Devon Energy Corp. .......... (15,000) --
Dow Jones & Co. Inc. ........ (12,000) 18,000
du Pont de Nemours (E.I.) & Co. (2,000) 10,000
EMI Group plc ............... (23,288) (0)
EMI Group plc, ADR .......... (18,000) 100,000
Foremost Corp. of America ... (25,000) --
Grupo Televisa SA, GDR ...... (28,000) 152,000
Helsingin Puhelin Oyj ....... (10,000) --
Hussmann International Inc. . (2,500) 247,500
IDEX Corp. .................. (1,500) 298,000
Imasco Ltd. ................. (100,000) --
Jafco Co. Ltd. .............. (4,000) 4,000
Koninklijke Philips Electronics
NV, ADR .................. (1,040) 10,000
Lehman Brothers Holdings Inc. (2,000) 25,000
Lucent Technologies Inc. .... (10,000) 40,000
Mannesmann AG ............... (5,000) --
Merrill Lynch & Co. ......... (50,000) --
Nestle SA ................... (800) --
New England Electric System . (25,000) --
New York Times Co., Cl. A ... (5,000) 115,000
News Corp. Ltd. ............. (25,000) 145,000
NEXTEL Communications Inc.,
Cl. A ..................... (1,000) 9,000
Nikko Securities Co. Ltd. ... (83,000) 30,000
Nippon Telegraph & Telephone Corp. (75) --
NRJ SA ...................... (500) 3,250
Omnipoint Corp. ............. (2,000) --
Pearson plc ................. (5,000) 65,000
Pittway Corp. ............... (400,000) --
Public Service Co. of
North Carolina ........... (6,000) --
OWNERSHIP AT
MARCH 31,
SHARES 2000
--------- ------------
RCN Corp. ................... (68,000) 160,000
Rogers Communications Inc.,
Cl. B, ADR ............... (30,000) 150,345
Ryder Systems Inc. .......... (2,000) 25,000
Schibsted ASA ............... (10,000) 60,000
Schroeders plc .............. (40,000) --
Shohkoh Fund & Co. Ltd. ..... (440) --
Skandia Forsakrings AB ...... (10,000) 59,000
Sony Corp., ADR ............. (4,000) 16,000
Sprint Corp. ................ (12,000) 330,000
Telecom Argentina Stet France
Telecom SA, ADR .......... (8,000) --
Telecomunicacoes Brasileriras
SA (Telebras), ADR ....... (167,000) --
Telecom Italia SpA, ADR ..... (17,000) 125,000
Telesp Celular SA , Pfd.,
Cl. B (n) ................. (2,223,575) --
Time Warner Inc. ............ (150,000) 290,000
Tokyo Broadcasting System Inc. (10,000) 54,000
Tyler Technologies Inc. ..... (7,000) 88,000
United Television Inc. ...... (4,100) 244,009
Viacom Inc., Cl. A .......... (1,000) 929,000
Vodafone AirTouch plc, ADR (l) (40,000) 100,000
Waddell & Reed Financial
Inc., Cl. A ............... (5,000) 35,000
PREFERRED STOCKS
Sprint Corp., 8.25% Cv. Pfd. (k) (40,000) --
PRINCIPAL
AMOUNT
---------
CORPORATE BONDS
Kaman Corp. Sub. Deb. Cv.
6.000%, 03/15/12 ......... (59,000) 941,000
- --------------
(a) 3 for 2 stock split
(b) Spinoff - 0.49634 shares of AT&T Corp. for every 1 share of Associated Group
Inc., Cl. A and B
(c) 13 for 10 stock split
(d) Spinoff - 1 share of Benesse Corp. New Shares for every 1 share of
Benesse Corp.
(e) 18.2% stock dividend
(f) 3% stock dividend
(g) 6 for 5 stock split
(h) Merger - 1 share of Liberty Media Group, Cl. A for every 1 share of
Associated Group Inc., Cl. A and B
(i) Spinoff - 1 share of Nippon Broadcasting System Inc., New Shares for every
1 share of Nippon Broadcasting System Inc.
(j) 5 for 4 stock split
(k) Merger - 1.52376 shares of SBC Communications Inc. for every 1 share of
Sprint Corp., 8.25% Cv. Pfd.
(l) 2 for 1 stock split
(m) Spinoff - 1 share of Sony Corp. New Shares for every 1 share of Sony Corp.
(n) Merger - 4.8393 shares of Telesp Celular Participacoes SA, ADR for every 1
share of Telesp Celular SA, Pfd., Cl. B
11
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 93.3%
TELECOMMUNICATIONS -- 14.5%
8,132 Aliant Inc.+ ....................................... $ 218,271
7,500 Allegiance Telecom Inc.+ ........................... 604,688
60,000 ALLTEL Corp. ....................................... 3,783,750
4,000 AT&T Canada Inc., Cl. B+ ........................... 244,000
150,000 AT&T Corp. ......................................... 8,437,500
400,000 BCE Inc. ........................................... 50,175,000
12,750 BCT.Telus Communications Inc. ...................... 377,323
27,500 BCT.Telus Communications
Inc., ADR ........................................ 813,833
4,250 BCT.Telus Communications
Inc., Cl. A ...................................... 125,774
52,500 BCT.Telus Communications Inc.,
Cl. A, ADR ....................................... 1,553,682
30,000 Bell Atlantic Corp. ................................ 1,833,750
7,000 BroadWing Inc.+ .................................... 260,313
50,000 Cable & Wireless HKT Ltd., ADR ..................... 1,287,500
2,893,090 Cable & Wireless Jamaica Ltd. ...................... 114,202
95,000 Cable & Wireless plc ............................... 1,782,168
145,000 Cable & Wireless plc, ADR .......................... 8,120,000
60,000 CenturyTel Inc. .................................... 2,227,500
25,000 Citizens Utilities Co., Cl. B+ ..................... 409,375
255,466 Commonwealth Telephone
Enterprises Inc.+ ................................ 11,990,935
20,000 Commonwealth Telephone
Enterprises Inc., Cl. B+ ......................... 930,000
35,000 Compania de Telecomunicaciones de
Chile SA, ADR .................................... 796,250
25 DDI Corp. .......................................... 204,265
167,000 Embratel Participacoes SA, ADR+ .................... 4,279,375
260,000 GTE Corp. (c) ...................................... 18,460,000
21,600 HPY Holding - HTF Holding
Oyj Abp, Cl. A ................................... 904,885
32 Japan Telecom Co. Ltd. ............................. 1,355,602
2,500 KDD Corp. .......................................... 210,352
12,000 KPN NV ............................................. 1,374,850
160,000 RCN Corp.+ ......................................... 8,620,000
29,655 Rogers Communications Inc., Cl. B+ ................. 877,608
150,345 Rogers Communications Inc.,
Cl. B, ADR+ ...................................... 4,482,160
164,995 SBC Communications Inc. ............................ 6,929,782
330,000 Sprint Corp. ....................................... 20,790,000
33,400 Tele Centro Sul Participacoes SA, ADR .............. 2,705,400
167,000 Tele Norte Leste Participacoes SA, ADR ............. 4,446,375
8,000 Telecom Argentina Stet France Telecom
SA, ADR .......................................... 278,000
400,040 Telecom Italia SpA ................................. 5,975,709
125,000 Telecom Italia SpA, ADR ............................ 19,000,000
167,000 Telecomunicacoes de Sao Paulo SA
(Telesp), ADR .................................... 4,957,813
8,000 Telefonica de Argentina SA, Cl. B, ADR ............. 314,000
MARKET
SHARES VALUE
------ ------
59,119 Telefonica SA ...................................... $ 1,494,488
144,000 Telefonica SA, ADR ................................. 10,746,000
36,000 Telefonos de Mexico SA, Cl. L, ADR ................. 2,412,000
------------
216,904,478
------------
ENTERTAINMENT -- 11.2%
4,420 Avex Inc. .......................................... 841,515
160,000 Canal Plus, ADR+ ................................... 7,696,330
150,000 Disney (Walt) Co. (c) .............................. 6,206,250
100,000 EMI Group plc, ADR ................................. 2,137,500
25,000 Fox Entertainment Group Inc. ....................... 748,437
75,000 GC Companies Inc.+ ................................. 2,606,250
760,000 Liberty Media Group, Cl. A+ (c) .................... 45,030,000
145,000 Publishing & Broadcasting Ltd. ..................... 1,230,417
120,000 Seagram Co. ........................................ 7,140,000
290,000 Time Warner Inc. ................................... 29,000,000
65,000 Todd-AO Corp., Cl. A ............................... 2,242,500
600,000 USA Networks Inc.+ ................................. 13,537,500
929,000 Viacom Inc., Cl. A+ ................................ 49,643,438
------------
168,060,137
------------
BROADCASTING -- 8.1%
50,000 Ackerley Group Inc. ................................ 756,250
17,700 Audiofina .......................................... 2,177,899
336,192 Chris-Craft Industries Inc.+ ....................... 21,411,228
592,898 Chris-Craft Industries Inc., Cl. B+ (a) ............ 37,649,015
16,666 Corus Entertainment Inc., Cl. B+ ................... 435,862
200,000 Granada Group plc .................................. 2,141,914
37,500 Gray Communications Systems Inc. ................... 445,312
152,000 Grupo Televisa SA, GDR+ ............................ 10,336,000
200,000 Liberty Corp. ...................................... 7,500,000
2,000 Nippon Broadcasting System Inc. .................... 158,154
2,000 Nippon Broadcasting System Inc.,
New Shares+ ...................................... 158,154
3,250 NRJ SA ............................................. 2,411,829
120,000 Paxson Communications Corp., Cl. A+ ................ 930,000
100,000 Television Broadcasting Ltd. ....................... 889,354
54,000 Tokyo Broadcasting System Inc. ..................... 2,129,814
244,009 United Television Inc. ............................. 32,300,691
-----------
121,831,476
-----------
FINANCIAL SERVICES -- 8.0%
4,100 Allianz AG ......................................... 1,670,494
110,000 Allstate Corp. ..................................... 2,619,375
70,000 American Express Co. (c) ........................... 10,425,625
30,000 Argonaut Group Inc. ................................ 601,875
90,000 Banco Santander Central Hispano
SA, ADR .......................................... 961,875
84,000 Bank of Ireland .................................... 595,213
56,000 Bank of Scotland ................................... 633,178
12
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
95,000 Bank One Corp. ..................................... $ 3,265,625
300,000 Bankgesellschaft Berlin AG ......................... 4,897,868
260 Berkshire Hathaway Inc., Cl. A+ .................... 14,872,000
100,000 Block (H&R) Inc. ................................... 4,475,000
50,000 Commerzbank AG, ADR ................................ 1,887,500
150,000 Deutsche Bank AG, ADR .............................. 9,956,250
30,000 Dun & Bradstreet Corp. ............................. 858,750
105,000 First Union Corp. .................................. 3,911,250
25,000 Hibernia Corp., Cl. A .............................. 262,500
20,000 Invik & Co. AB, Cl. B .............................. 2,897,879
90,000 Irish Life & Permanent plc, Dublin ................. 818,705
4,000 Jafco Co. Ltd. ..................................... 895,944
190,000 John Hancock Financial Services Inc.+ .............. 3,431,875
25,000 Lehman Brothers Holdings Inc. ...................... 2,425,000
65,500 Leucadia National Corp. ............................ 1,555,625
60,000 Mellon Financial Corp. ............................. 1,770,000
110,000 Midland Co. ........................................ 2,585,000
14,000 Morgan (J.P.) & Co. Inc. ........................... 1,844,500
30,000 Nikko Securities Co. Ltd. .......................... 454,010
50,000 Prudential Corp. plc ............................... 753,651
60,000 Riggs National Corp. ............................... 731,250
59,000 Skandia Forsakrings AB ............................. 2,797,148
40,000 State Street Corp. ................................. 3,875,000
20,000 SunTrust Banks Inc. ................................ 1,155,000
40,000 T. Rowe Price Associates Inc. ...................... 1,580,000
600,000 Travelers Property Casualty Corp., Cl. A 24,750,000
50,000 Unitrin Inc. ....................................... 1,987,500
35,000 Waddell & Reed Financial Inc., Cl. A ............... 1,480,938
------------
119,683,403
------------
WIRELESS COMMUNICATIONS -- 6.9%
1,000 Aerial Communications Inc.+ ........................ 56,813
9,000 Nextel Communications Inc., Cl. A+ ................. 1,334,250
32 NTT Mobile Communications
Network Inc. ..................................... 1,311,974
25,000 Rogers Cantel Mobile Communications
Inc., Cl. B+ ..................................... 1,010,938
220,000 Sprint Corp. (PCS Group)+ .......................... 14,368,750
16,700 Tele Celular Sul Participacoes SA, ADR ............. 835,000
55,666 Tele Centro Oeste Celular Participacoes
SA, ADR .......................................... 647,117
3,340 Tele Leste Celular Participacoes
SA, ADR .......................................... 200,400
8,350 Tele Nordeste Celular Participacoes
SA, ADR .......................................... 599,113
3,340 Tele Norte Celular Participacoes
SA, ADR .......................................... 207,080
33,400 Tele Sudeste Celular Participacoes
SA, ADR .......................................... 1,667,913
MARKET
SHARES VALUE
------ ------
1,390,000 Telecom Italia Mobile SpA .......................... $17,063,348
8,350 Telemig Celular Participacoes SA, ADR 739,497
450,000 Telephone & Data Systems Inc. ...................... 49,950,000
66,800 Telesp Celular Participacoes SA, ADR ............... 3,786,725
723,888 Vodafone AirTouch plc .............................. 4,017,482
100,000 Vodafone AirTouch plc, ADR ......................... 5,556,250
------------
103,352,650
------------
EQUIPMENT AND SUPPLIES -- 6.4%
100,000 AMETEK Inc. ........................................ 1,925,000
124,000 Amphenol Corp., Cl. A+ ............................. 12,679,000
10,000 Caterpillar Inc. ................................... 394,375
95,000 CIRCOR International Inc.+ ......................... 1,264,688
107,000 CLARCOR Inc. ....................................... 1,899,250
320,000 Deere & Co. (c) .................................... 12,160,000
252,000 Donaldson Co. Inc. ................................. 5,685,750
105,000 Flowserve Corp. .................................... 1,351,875
6,500 Franklin Electric Co. .............................. 415,188
105,000 Gerber Scientific Inc. ............................. 2,027,813
247,500 Hussmann International Inc. ........................ 3,140,156
298,000 IDEX Corp. ......................................... 8,120,500
50,000 Lufkin Industries Inc. ............................. 725,000
1,000 Manitowoc Co. Inc. ................................. 27,063
300,000 Mark IV Industries Inc. ............................ 6,618,750
445,000 Navistar International Corp.+ ...................... 17,855,625
20,000 PACCAR Inc. ........................................ 1,000,000
84,500 Sequa Corp., Cl. A+ ................................ 3,348,313
75,000 Sequa Corp., Cl. B+ ................................ 3,543,750
170,000 SPS Technologies Inc.+ ............................. 5,185,000
42,000 THK Co. Ltd. ....................................... 1,930,564
130,000 UCAR International Inc.+ ........................... 1,714,375
250,000 Watts Industries Inc., Cl. A ....................... 3,093,750
100,000 Weir Group plc (The) ............................... 308,149
-----------
96,413,934
-----------
PUBLISHING -- 5.2%
70,000 Arnoldo Mondadori Editore SpA ...................... 1,786,309
6,000 Central Newspapers Inc., Cl. A ..................... 201,750
18,000 Dow Jones & Co. Inc. ............................... 1,292,625
90,000 Harcourt General Inc. .............................. 3,352,500
323,000 Independent News & Media plc,
Dublin ........................................... 3,170,208
98,000 McGraw-Hill Companies Inc. ......................... 4,459,000
400,000 Media General Inc., Cl. A .......................... 20,950,000
128,000 Meredith Corp. ..................................... 3,544,000
115,000 New York Times Co., Cl. A .......................... 4,937,813
145,000 News Corp. Ltd. .................................... 2,024,603
5,000 News Corp. Ltd., ADR ............................... 281,250
65,000 Pearson plc ........................................ 2,257,609
400,000 Penton Media Inc. .................................. 10,400,000
30,000 PRIMEDIA Inc.+ ..................................... 960,000
13
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
PUBLISHING (CONTINUED)
27,000 Pulitzer Inc. ....................................... $ 1,103,625
160,000 Reader's Digest Association Inc., Cl. B ............. 4,580,000
60,000 Schibsted ASA ....................................... 1,485,166
1,500,000 Seat-Pagine Gialle SpA .............................. 7,440,163
400,000 South China Morning Post Holdings ................... 385,280
70,000 Thomas Nelson Inc. .................................. 555,625
20,000 Times Mirror Co., Cl. A ............................. 1,858,750
34,000 Tribune Co. ......................................... 1,243,125
-----------
78,269,401
-----------
CABLE -- 4.2%
515,000 Cablevision Systems Corp., Cl. A+ ................... 31,286,250
40,000 Comcast Corp., Cl. A ................................ 1,650,000
90,000 Comcast Corp., Cl. A, Special ....................... 3,903,750
230,000 MediaOne Group Inc.+ ................................ 18,630,000
15,625 NTL Inc.+ ........................................... 1,450,195
20,000 Shaw Communications Inc., Cl. B ..................... 536,820
80,000 Shaw Communications Inc., Cl. B,
Non-Voting+ ....................................... 2,155,000
218,181 TeleWest Communications plc+ ........................ 1,672,989
14,000 UnitedGlobalCom Inc., Cl. A+ ........................ 1,050,875
-----------
62,335,879
-----------
CONSUMER PRODUCTS -- 4.0%
540,000 Carter-Wallace Inc. ................................. 10,125,000
10,750 Christian Dior SA ................................... 2,487,978
45,000 Church & Dwight Co. Inc. ............................ 773,437
14,000 Clorox Co. .......................................... 455,000
1,100 Compagnie Financiere
Richemont AG, Cl. A ............................... 2,795,741
10,000 Department 56 Inc.+ ................................. 148,125
120,000 Fortune Brands Inc. (e) ............................. 3,000,000
250,000 Gallaher Group plc, ADR ............................. 4,921,875
180,000 General Cigar Holdings Inc.+ ........................ 2,722,500
105,000 General Cigar Holdings Inc., Cl. B+ (a) ............. 1,581,562
70,000 Gillette Co. ........................................ 2,638,125
50,000 Harley Davidson Inc. ................................ 3,968,750
1,500 Matsushita Electric Industrial Co.
Ltd., ADR ......................................... 454,500
60,000 Mattel Inc. ......................................... 626,250
25,000 Maytag Corp. ........................................ 828,125
35,000 National Presto Industries Inc. ..................... 1,141,875
10,500 Nintendo Co. Ltd. ................................... 1,845,693
20,000 Philip Morris Companies Inc. ........................ 422,500
600,000 Ralston Purina Group ................................ 16,425,000
MARKET
SHARES VALUE
------ ------
1,500 Swatch Group AG ..................................... $ 1,749,632
10,425 Syratech Corp.+ ..................................... 83,400
-----------
59,195,068
-----------
FOOD AND BEVERAGE -- 3.8%
30,108 Advantica Restaurant Group Inc.+ .................... 45,162
50,000 Bestfoods Inc. ...................................... 2,340,625
18,000 Brau und Brunnen AG+ ................................ 637,728
58,500 Celestial Seasonings Inc.+ .......................... 2,010,938
15,000 Coca-Cola Co. ....................................... 704,063
77,250 Corn Products International Inc. .................... 1,858,828
44,000 Diageo plc, ADR ..................................... 1,325,500
165,000 General Mills Inc. .................................. 5,970,938
4,000 Keebler Foods Co.+ .................................. 114,750
130,000 Kellogg Co. ......................................... 3,331,250
12,100 LVMH Moet Hennessy Louis
Vuitton, ADR ...................................... 1,028,500
100,000 Pepsi Bottling Group Inc. ........................... 2,000,000
420,000 PepsiCo Inc. (f) .................................... 14,516,250
100,000 Quaker Oats Co. ..................................... 6,062,500
60,000 Ralcorp Holdings Inc.+ .............................. 870,000
95,894 Tootsie Roll Industries Inc. ........................ 3,020,662
411,000 Whitman Corp. ....................................... 5,728,313
70,000 Wrigley (Wm.) Jr. Co. ............................... 5,376,875
-----------
56,942,882
-----------
ENERGY AND UTILITIES -- 3.6%
73,400 AGL Resources Inc. .................................. 1,348,725
34,000 Apache Corp. ........................................ 1,691,500
70,000 Atlantic Richfield Co. .............................. 5,950,000
120,000 BP Amoco plc ........................................ 1,095,959
134,000 BP Amoco plc, ADR ................................... 7,110,375
110,000 Burlington Resources Inc. ........................... 4,070,000
100,000 Columbia Energy Group ............................... 5,925,000
100,000 Conoco Inc., Cl. A .................................. 2,462,500
150,000 Eastern Enterprises ................................. 8,981,250
400,000 El Paso Electric Co.+ ............................... 4,150,000
20,000 Energy East Corp. ................................... 396,250
100,000 Florida Progress Corp. .............................. 4,587,500
55,000 Halliburton Co. ..................................... 2,255,000
50,000 MCN Energy Group Inc. ............................... 1,250,000
30,000 Northeast Utilities ................................. 645,000
85,000 Pennzoil-Quaker State Co.+ .......................... 887,187
15,000 St. Joseph Light & Power Co. ........................ 304,687
5,000 TNP Enterprises Inc. ................................ 219,062
2,907 Total Fina Elf ...................................... 435,633
5,000 Vastar Resources Inc. ............................... 371,563
-----------
54,137,191
-----------
14
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
AUTOMOTIVE: PARTS AND ACCESSORIES -- 3.0%
60,000 Arvin Industries Inc. ............................. $ 1,357,500
25,302 Borg-Warner Automotive Inc. ....................... 996,266
300,000 Dana Corp. ........................................ 8,456,250
75,000 Delphi Automotive Systems Corp.+ (c) .............. 1,200,000
40,000 Federal-Mogul Corp. ............................... 667,500
255,000 GenCorp Inc. ...................................... 1,976,250
270,000 Genuine Parts Co. ................................. 6,446,250
117,000 Johnson Controls Inc. ............................. 6,325,312
49,167 Midas Inc. ........................................ 1,180,008
330,000 Modine Manufacturing Co. .......................... 8,291,250
80,000 Scheib (Earl) Inc.+ ............................... 300,000
1,000 SPX Corp. ......................................... 113,937
163,000 Standard Motor Products Inc. ...................... 2,424,625
70,000 Superior Industries International Inc. ............ 2,218,125
160,000 Tenneco Automotive Inc. ........................... 1,270,000
110,000 TransPro Inc. ..................................... 550,000
60,000 Wynn's International Inc. ......................... 828,750
-----------
44,602,023
-----------
DIVERSIFIED INDUSTRIAL -- 2.3%
195,000 Ampco-Pittsburgh Corp. ............................ 2,120,625
10,000 Cooper Industries Inc. ............................ 350,000
145,000 Crane Co. ......................................... 3,416,562
102,000 GATX Corp. ........................................ 3,876,000
143,000 GenTek Inc. ....................................... 2,002,000
100,000 ITT Industries Inc.+ .............................. 3,106,250
416,300 Lamson & Sessions Co.+ ............................ 3,096,231
120,000 National Service Industries Inc. .................. 2,527,500
73,715 Park-Ohio Holdings Corp.+ ......................... 783,222
75,000 Thomas Industries Inc. ............................ 1,406,250
27,000 TI Group plc ...................................... 133,507
50,000 Trinity Industries Inc. ........................... 1,184,375
200,000 Tyco International Ltd. ........................... 9,975,000
-----------
33,977,522
-----------
BUSINESS SERVICES -- 2.0%
100,000 Cendant Corp.+ .................................... 1,850,000
1,500 CheckFree Holdings Corp.+ ......................... 105,750
50,000 IMS Health Inc. ................................... 846,875
100,000 Landauer Inc. ..................................... 1,825,000
58,500 Nashua Corp.+ ..................................... 489,937
10,833 Reuters Holdings plc, ADR ......................... 1,293,189
13,000 Secom Co. Ltd. .................................... 1,114,087
MARKET
SHARES VALUE
------ ------
250,000 Securicor Group plc ............................... $ 503,629
700,000 U.S. Foodservice+ ................................. 18,025,000
30,900 Vivendi ........................................... 3,565,389
-----------
29,618,856
-----------
RETAIL -- 1.7%
260,000 Albertson's Inc. .................................. 8,060,000
360,000 AutoNation Inc.+ .................................. 2,857,500
19,000 Coldwater Creek Inc.+ ............................. 323,000
70,000 Delhaize America Inc., Cl. A ...................... 1,207,500
20,000 Gerald Stevens Inc.+ .............................. 160,000
20,000 Hannaford Bros. Co. ............................... 1,475,000
100,000 Lillian Vernon Corp. .............................. 950,000
350,000 Neiman Marcus Group Inc., Cl. B+ .................. 9,625,000
-----------
24,658,000
-----------
HEALTH CARE -- 1.6%
47,000 American Home Products Corp. ...................... 2,520,375
60,000 Amgen Inc.+ ....................................... 3,682,500
10,000 AstraZeneca plc, London ........................... 404,336
35,146 AstraZeneca plc, Stockholm ........................ 1,421,810
26,000 Biogen Inc.+ ...................................... 1,816,750
50,000 Glaxo Wellcome plc ................................ 1,429,270
4,000 Glaxo Wellcome plc, ADR ........................... 229,250
35,294 Life Technologies Inc. ............................ 1,764,700
1,150 Novartis AG ....................................... 1,573,134
54,000 Novartis AG, Registered ........................... 3,709,125
45,000 Pfizer Inc. ....................................... 1,645,313
140 Roche Holding AG .................................. 1,520,979
20,000 Sanofi Synthelabo SA .............................. 763,167
55,000 SmithKline Beecham plc ............................ 725,225
14,000 Takeda Chemical Industries Ltd. ................... 995,277
-----------
24,201,211
-----------
HOTELS AND GAMING -- 1.6%
120,000 Aztar Corp.+ ...................................... 1,140,000
90,000 Boca Resorts Inc., Cl. A+ ......................... 770,625
190,000 Gaylord Entertainment Co. ......................... 5,153,750
5,000 GTECH Holdings Corp.+ ............................. 92,813
1,045,000 Hilton Group plc .................................. 4,855,198
650,000 Hilton Hotels Corp. ............................... 5,037,500
5,000 MGM Grand Inc. .................................... 120,000
100,000 Mirage Resorts Inc.+ .............................. 1,937,500
430,000 Park Place Entertainment Corp.+ ................... 4,971,875
-----------
24,079,261
-----------
15
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
PAPER AND FOREST PRODUCTS -- 1.4%
260,000 Greif Bros. Corp., Cl. A ............................ $ 8,287,500
3,400 Greif Bros. Corp., Cl. B ............................ 105,400
650,000 Pactiv Corp.+ ....................................... 5,687,500
253,000 St. Joe Co. ......................................... 7,321,188
-----------
21,401,588
-----------
AEROSPACE -- 1.3%
250,000 Cordant Technologies Inc. ........................... 14,140,625
92,000 Northrop Grumman Corp. .............................. 4,870,250
-----------
19,010,875
-----------
AUTOMOTIVE -- 1.2%
12,000 Ford Motor Co. ...................................... 551,250
210,000 General Motors Corp. (d) ............................ 17,390,625
-----------
17,941,875
-----------
SPECIALTY CHEMICALS -- 0.9%
5,400 Ciba Specialty Chemicals, ADR+ (b) .................. 170,100
46,000 Dexter Corp. ........................................ 2,438,000
10,000 du Pont de Nemours (E.I.) & Co. ..................... 528,750
315,000 Ferro Corp. ......................................... 5,610,938
3,000 Fuller (H.B.) Co. ................................... 119,812
105,000 General Chemical Group Inc. ......................... 223,125
210,000 Omnova Solutions Inc. ............................... 1,181,250
40,000 Rohm & Haas Co. ..................................... 1,785,000
105,000 Sybron Chemicals Inc.+ .............................. 1,483,125
-----------
13,540,100
-----------
COMMUNICATIONS EQUIPMENT -- 0.9%
10,000 Alcatel Alsthom SA, ADR ............................. 438,125
290,000 Allen Telecom Inc.+ ................................. 4,621,875
60,000 Dynatech Corp.+ ..................................... 866,250
17,000 Furukawa Electric Co. Ltd. .......................... 285,582
40,000 Lucent Technologies Inc. ............................ 2,430,000
8,000 Motorola Inc. ....................................... 1,139,000
5,500 Nokia Corp., Cl. A, ADR ............................. 1,194,875
44,000 Scientific-Atlanta Inc. ............................. 2,791,250
-----------
13,766,957
-----------
ELECTRONICS -- 0.8%
43,000 Fujitsu Ltd. ........................................ 1,319,083
3,000 Hitachi Ltd., ADR ................................... 365,625
1,500 Molex Inc., Cl. A ................................... 66,562
1,500 NEC Corp., ADR ...................................... 222,656
3,000 Philips Electronics NV .............................. 504,437
10,000 Philips Electronics NV, ADR ......................... 1,713,125
MARKET
SHARES VALUE
------ ------
8,000 Sony Corp. .......................................... $ 1,129,668
8,000 Sony Corp., New Shares+ ............................. 1,137,459
16,000 Sony Corp., ADR ..................................... 4,482,000
5,000 STMicroelectronics NV ............................... 919,248
-----------
11,859,863
-----------
SATELLITE -- 0.7%
100,000 COMSAT Corp. ........................................ 2,062,500
10,000 General Motors Corp., Cl. H+ ........................ 1,245,000
100,000 Loral Space & Communications Ltd.+ .................. 1,018,750
340,000 TCI Satellite Entertainment Inc., Cl. A+ ............ 6,502,500
-----------
10,828,750
-----------
REAL ESTATE -- 0.6%
450,000 Catellus Development Corp.+ ......................... 6,243,750
44,000 Florida East Coast Industries Inc. .................. 2,134,000
55,000 Griffin Land & Nurseries Inc.+ ...................... 605,000
4,753 HomeFed Corp.+ ...................................... 3,042
-----------
8,985,792
-----------
AGRICULTURE -- 0.5%
725,000 Archer-Daniels-Midland Co. (c) ...................... 7,521,875
5,000 Delta & Pine Land Co. ............................... 98,750
-----------
7,620,625
-----------
CONSUMER SERVICES -- 0.5%
40,000 Loewen Group Inc. ................................... 28,000
510,000 Rollins Inc. ........................................ 7,586,250
-----------
7,614,250
-----------
COMPUTER SOFTWARE AND SERVICES -- 0.5%
10,800 Cresco Ltd. ......................................... 1,262,112
15 Net One Systems Co. Ltd. ............................ 540,488
5,000 NetCom ASA+ ......................................... 249,896
3,300 Obic Co. Ltd. ....................................... 2,313,873
10,500 Square Co. Ltd. ..................................... 1,083,897
15,000 Sterling Software Inc.+ ............................. 457,500
11,000 Sumisho Computer Systems Corp. ...................... 685,592
88,000 Tyler Technologies Inc. ............................. 522,500
-----------
7,115,858
-----------
AVIATION: PARTS AND SERVICES -- 0.4%
100,000 Curtiss-Wright Corp. ................................ 3,662,500
125,000 Fairchild Corp., Cl. A+ ............................. 851,562
145,000 Hi-Shear Industries Inc. ............................ 362,500
30,000 Precision Castparts Corp. ........................... 1,095,000
-----------
5,971,562
-----------
16
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2000 (UNAUDITED)
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
BUILDING AND CONSTRUCTION -- 0.4%
90,000 CRH plc ..................................... $ 1,615,865
32,222 Huttig Building Products Inc.+ .............. 144,999
15,000 Martin Marietta Materials Inc. .............. 712,500
150,000 Nortek Inc.+ ................................ 3,318,750
5,000 Nortek Inc., Special Common+ (a) ............ 110,625
--------------
5,902,739
--------------
CLOSED-END FUNDS -- 0.3%
59,000 Central European Equity Fund Inc. ........... 1,014,062
70,000 Dresdner RCM Europe Fund Inc. ............... 1,227,800
25,000 France Growth Fund Inc. ..................... 409,375
40,250 Italy Fund Inc. ............................. 774,812
68,000 New Germany Fund Inc. ....................... 1,003,000
45,942 Royce Value Trust Inc. ...................... 634,574
--------------
5,063,623
--------------
TRANSPORTATION -- 0.3%
73,000 AMR Corp.+ .................................. 2,326,875
15,000 Kansas City Southern Industries Inc. ........ 1,289,063
31,273 MIF Ltd.+ ................................... 355,564
25,000 Ryder System Inc. ........................... 567,188
--------------
4,538,690
--------------
ENVIRONMENTAL SERVICES -- 0.2%
200,000 Waste Management Inc. ....................... 2,737,500
--------------
METALS AND MINING -- 0.2%
3,500 Anglogold Ltd. .............................. 167,623
10,000 Anglogold Ltd., ADR ......................... 240,000
110,909 Antofagasta Holdings plc .................... 695,894
72,500 Harmony Gold Mining Co. Ltd. ................ 421,544
12,500 Harmony Gold Mining Co. Ltd., ADR ........... 76,563
38,000 Newmont Mining Corp. ........................ 852,625
20,000 Placer Dome Inc. ............................ 162,500
--------------
2,616,749
--------------
EDUCATIONAL SERVICES -- 0.1%
5,000 Benesse Corp. ............................... 521,011
5,000 Benesse Corp., New Shares+ .................. 521,011
--------------
1,042,022
--------------
COMPUTER HARDWARE -- 0.0%
15,000 Xerox Corp. ................................. 390,000
--------------
TOTAL COMMON STOCKS ......................... 1,486,212,790
--------------
MARKET
SHARES VALUE
------ ------
PREFERRED STOCKS -- 1.3%
PUBLISHING -- 0.1%
43,500 News Corp. Ltd., Pfd., ADR .................. $ 2,077,125
--------------
TELECOMMUNICATIONS -- 0.1%
15,000 Citizens Utilities Co. ......................
5.00% Cv. Pfd. ............................ 937,500
12,045,773 Telecomunicacoes de Sao Paulo SA
(Telesp), Pfd. .............................. 354,145
--------------
1,291,645
--------------
BROADCASTING -- 0.1%
10,000 ProSieben Media AG, Pfd. .................... 1,144,272
--------------
WIRELESS COMMUNICATIONS -- 0.0%
10,760,547 Telesp Celular Participacoes SA, Pfd.+ ...... 244,066
--------------
TOTAL PREFERRED STOCKS ...................... 4,757,108
--------------
PRINCIPAL
AMOUNT
---------
CORPORATE BONDS -- 0.2%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.1%
$ 1,400,000 Standard Motor Products Inc.,
Sub. Deb. Cv.
6.75%, 07/15/09 ........................... 1,006,250
--------------
AVIATION: PARTS AND SERVICES -- 0.1%
941,000 Kaman Corp., Sub. Deb. Cv.
6.00%, 03/15/12 ........................... 841,019
--------------
PUBLISHING -- 0.0%
200,000 News America Holdings Inc.,
Sub. Deb. Cv.
Zero Coupon, 03/31/02 ..................... 480,750
--------------
CONSUMER PRODUCTS -- 0.0%
1,000,000 Pillowtex Corp.,
Sub. Deb. Cv.
6.00%, 03/15/12 ........................... 280,000
--------------
HOTELS AND GAMING -- 0.0%
200,000 Hilton Hotels Corp.,
Sub. Deb. Cv.
5.00%, 05/15/06 ........................... 153,000
--------------
TOTAL CORPORATE BONDS ....................... 2,761,019
--------------
SHARES
------
WARRANTS -- 0.0%
FOOD AND BEVERAGE -- 0.0%
62,463 Advantica Restaurant Group Inc.
Warrants, expire 01/07/05+ ................ 23,424
--------------
18
<PAGE>
THE GABELLI EQUITY TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2000 (UNAUDITED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS -- 0.4%
$6,500,000 U.S. Treasury Bill,
6.07%++, due 04/18/00 ....................... $ 6,481,675
--------------
REPURCHASE AGREEMENTS -- 0.8%
11,807,000 State Street Bank & Trust Co.,
6.07%, dated 03/31/00,
due 04/03/00, proceeds at
maturity $11,025,574 (g) .................... 11,807,000
--------------
TOTAL INVESTMENTS -- 101.0%
(Cost $836,037,227) ...................................... 1,512,043,016
OTHER ASSETS, LIABILITIES AND
LIQUIDATION VALUE OF CUMULATIVE
PREFERRED STOCK -- (10.0)% ............................... (150,027,091)
--------------
NET ASSETS -- COMMON STOCK -- 91.0%
(107,376,617 common shares outstanding) .................. 1,362,015,925
--------------
NET ASSETS -- PREFERRED STOCK -- 9.0%
(5,380,600 preferred shares outstanding) ................. 134,515,000
--------------
TOTAL NET ASSETS -- 100.0% ................................. $1,496,530,925
==============
NET ASSET VALUE PER COMMON SHARE
($1,362,015,925 / 107,376,617 shares outstanding) ........ $12.68
======
SETTLEMENT UNREALIZED
DATE DEPRECIATION
---------- ------------
FORWARD FOREIGN EXCHANGE CONTRACTS
14,657,129 (h) Deliver Hong Kong Dollars
in exchange for
USD $1,882,918 .............. 08/24/00 $(22,168)
========
FUTURES CONTRACTS -- SHORT POSITION
Number of
Contracts
-----------
310 S&P 500 Index Futures
06/15/00 ....................................... $(7,533,698)
===========
--------------------
For Federal tax purposes:
Aggregate cost ........................................ $836,037,227
============
Gross unrealized appreciation ......................... $731,496,074
Gross unrealized depreciation ......................... (55,490,285)
------------
Net unrealized appreciation ........................... $676,005,789
============
--------------------
(a) Security fair valued under procedures established by the Board of
Directors.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
The market value of these securities at March 31, 2000 was $170,100
representing 0.01% of total net assets.
(c) Security was pledged as collateral for futures contracts.
(d) At March 31, 2000, 200,000 shares were pledged as collateral for futures
contracts.
(e) At March 31, 2000, 115,000 shares were pledged as collateral for futures
contracts.
(f) At March 31, 2000, 370,000 shares were pledged as collateral for futures
contracts.
(g) Collateralized by U.S. Treasury Bill, 5.96%++, due 04/20/00, market value
$11,242,681. (h) Principal amount denoted in Hong Kong Dollars.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depositary Receipt
USD - United States Dollar
ORD - Ordinary Share
GDR - Global Depositary Receipt
% of
Market Market
Value Value
------ ------
GEOGRAPHIC DIVERSIFICATION
United States ................ 76.8% $1,160,620,683
Europe ....................... 12.3 186,476,039
Canada ....................... 4.6 70,336,773
Latin America ................ 3.3 49,895,470
Asia/Pacific Rim ............. 2.9 43,808,322
Africa ....................... 0.1 905,729
----- --------------
Total Investments ............ 100.0% $1,512,043,016
===== ==============
19
<PAGE>
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLAN
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Equity Trust Inc. ("Equity Trust") to
automatically reinvest dividends. As a "registered" shareholder you
automatically become a participant in the Equity Trust's Automatic Dividend
Reinvestment Plan (the "Plan"). The Plan authorizes the Equity Trust to issue
shares to participants upon an income dividend or a capital gains distribution
regardless of whether the shares are trading at a discount or a premium to net
asset value. All distributions to shareholders whose shares are registered in
their own names will be automatically reinvested pursuant to the Plan in
additional shares of the Equity Trust. Plan participants may send their stock
certificates to State Street Bank and Trust Company ("State Street") to be held
in their dividend reinvestment account. Registered shareholders wishing to
receive their distribution in cash must submit this request in writing to:
The Gabelli Equity Trust Inc.
c/o State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan may contact State Street at 1 (800)
336-6983.
SHAREHOLDERS WISHING TO LIQUIDATE REINVESTED SHARES held at State Street Bank
must do so in writing or by telephone. Please submit your request to the above
mentioned address or telephone number. Include in your request your name,
address and account number. The cost to liquidate shares is $2.50 per
transaction as well as the brokerage commission incurred. Brokerage charges are
expected to be less than the usual brokerage charge for such transactions.
If your shares are held in the name of a broker, bank or nominee, you should
contact such institution. If such institution is not participating in the Plan,
your account will be credited with a cash dividend. In order to participate in
the Plan through such institution, it may be necessary for you to have your
shares taken out of "street name" and re-registered in your own name. Once
registered in your own name your dividends will be automatically reinvested.
Certain brokers participate in the Plan. Shareholders holding shares in "street
name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of shares of Common Stock distributed to participants in the Plan
in lieu of cash dividends is determined in the following manner. Under the Plan,
whenever the market price of the Equity Trust's Common Stock is equal to or
exceeds net asset value at the time shares are valued for purposes of
determining the number of shares equivalent to the cash dividends or capital
gains distribution, participants are issued shares of Common Stock valued at the
greater of (i) the net asset value as most recently determined or (ii) 95% of
the then current market price of the Equity Trust's Common Stock. The valuation
date is the dividend or distribution payment date or, if that date is not a New
York Stock Exchange trading day, the next trading day. If the net asset value of
the Common Stock at the time of
19
<PAGE>
valuation exceeds the market price of the Common Stock, participants will
receive shares from the Equity Trust valued at market price. If the Equity Trust
should declare a dividend or capital gains distribution payable only in cash,
State Street will buy Common Stock in the open market, or on the New York Stock
Exchange or elsewhere, for the participants' accounts, except that State Street
will endeavor to terminate purchases in the open market and cause the Equity
Trust to issue shares at net asset value if, following the commencement of such
purchases, the market value of the Common Stock exceeds the then current net
asset value.
The automatic reinvestment of dividends and capital gains distributions will
not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for Federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
The Equity Trust reserves the right to amend or terminate the Plan as applied
to any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to the members of the Plan at
least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by State Street on at least 90 days' written
notice to participants in the Plan.
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our shareholders
to increase their investment in the Equity Trust. In order to participate in the
Voluntary Cash Purchase Plan, shareholders must have their shares registered in
their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to State Street for investments in the Equity Trust's
shares at the then current market price. Shareholders may send an amount from
$250 to $10,000. State Street will use these funds to purchase shares in the
open market on or about the 15th of each month. State Street will charge each
shareholder who participates $0.75, plus a pro rata share of the brokerage
commissions. Brokerage charges for such purchases are expected to be less than
the usual brokerage charge for such transactions. It is suggested that any
voluntary cash payments be sent to State Street Bank and Trust Company, P.O. Box
8200, Boston, MA 02266-8200 such that State Street receives such payments
approximately 10 days before the 15th of the month. Funds not received at least
five days before the investment date shall be held for investment in the
following month. A payment may be withdrawn without charge if notice is received
by State Street at least 48 hours before such payment is to be invested.
For more information regarding the Dividend Reinvestment Plan and Voluntary
Cash Purchase Plan, brochures are available by calling (914) 921-5070 or by
writing directly to the Equity Trust.
20
<PAGE>
DIRECTORS AND OFFICERS
THE GABELLI EQUITY TRUST INC.
ONE CORPORATE CENTER, RYE, NY 10580-1434
DIRECTORS
Mario J. Gabelli, CFA
CHAIRMAN & CHIEF INVESTMENT OFFICER,
GABELLI ASSET MANAGEMENT INC.
Dr. Thomas E. Bratter
PRESIDENT, JOHN DEWEY ACADEMY
Felix J. Christiana
FORMER SENIOR VICE PRESIDENT,
DOLLAR DRY DOCK SAVINGS BANK
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR AND CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Frank J. Fahrenkopf, Jr.
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION
Karl Otto Pohl
FORMER PRESIDENT, DEUTSCHE BUNDESBANK
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT
PROFESSOR, PACE UNIVERSITY
Salvatore J. Zizza
CHAIRMAN,
THE BETHLEHEM CORP.
OFFICERS
Mario J. Gabelli, CFA
PRESIDENT & CHIEF INVESTMENT OFFICER
Bruce N. Alpert
VICE PRESIDENT & TREASURER
Carter W. Austin
VICE PRESIDENT
James E. McKee
SECRETARY
INVESTMENT ADVISOR
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1434
CUSTODIAN
Boston Safe Deposit and Trust Company
COUNSEL
Willkie Farr & Gallagher
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
STOCK EXCHANGE LISTING
COMMON 7.25% PREFERRED
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NYSE-Symbol: GAB GAB Pr
Shares Outstanding: 107,376,617 5,380,600
The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "General Equity Funds," in Sunday's The New York Times and 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 may be obtained each day by calling (914) 921-5071.
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For general information about the Gabelli Funds,
call 1-800-GABELLI (1-800-422-3554), fax us at
914-921-5118, visit Gabelli Funds' Internet
homepage at: HTTP://WWW.GABELLI.COM
or e-mail us at: [email protected]
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Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Equity Trust may, from time to time,
purchase shares of its common stock in the open market when the Equity Trust
shares are trading at a discount of 10% or more from the net asset value of the
shares. The Equity Trust also may, from time to time, purchase shares of its
Cumulative Preferred Stock in the open market when the shares are trading at a
discount to the Liquidation Value of $25.00.
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THE GABELLI EQUITY TRUST INC.
ONE CORPORATE CENTER
RYE, NY 10580-1434
(914) 921-5070
HTTP://WWW.GABELLI.COM
FIRST QUARTER REPORT
MARCH 31, 2000
GBFCM 03/00
