Gabelli Equity Trust Reaffirms 10% Distribution Policy, Declares $0.15 Per Share Cash Distribution

The Gabelli Equity Trust Inc. has reaffirmed its 10% distribution policy and declared a $0.15 per share cash distribution for Q2. The distribution is payable on June 23, 2025, to common stock shareholders of record on June 13, 2025. The Fund intends to pay a minimum annual distribution of 10% of its average net asset value within a calendar year. The distribution is subject to modification by the Board of Directors at any time and may be treated as long-term capital gain or qualified dividend income for individuals.

RYE, N.Y. — The Gabelli Equity Trust Inc. (NYSE: GAB) has reaffirmed its 10% distribution policy and declared a $0.15 per share cash distribution for the second quarter of 2025. The distribution is payable on June 23, 2025, to common stock shareholders of record on June 13, 2025 [1].

The Fund aims to pay a minimum annual distribution of 10% of its average net asset value (NAV) 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 NAV of the Fund is based on the average NAV as of the last day of the four preceding calendar quarters during the year. The net asset value per share fluctuates daily [1].

Each quarter, the Board of Directors reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board will continue to monitor the Fund's distribution level, taking into consideration the Fund’s NAV and the current financial market environment. The distribution policy is subject to modification by the Board of Directors at any time [1].

The distribution may be treated as long-term capital gain or qualified dividend income for individuals, each subject to the maximum federal income tax rate for long-term capital gains, currently 20% in taxable accounts for individuals, or less depending on an individual’s tax bracket. Additionally, 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 [1].

If the Fund does not generate sufficient earnings equal to or in excess of the aggregate distributions paid by the Fund in a given year, 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 would be treated as a reduction in the shareholder’s cost basis [1].

The preliminary composition for 2025 includes approximately 2% from net investment income, 21% from net capital gains, and 77% as return of capital. The high return of capital component signals potential underlying performance concerns, as it indicates the fund isn't generating sufficient earnings to cover its distributions naturally [2].

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. For more information regarding the Fund’s distribution policy and other information about the Fund, call Molly Marion at (914) 921-5681 [1].

References:
[1] https://www.marketscreener.com/quote/stock/THE-GABELLI-EQUITY-TRUST--408948/news/Gabelli-Equity-Trust-10-Distribution-Policy-Reaffirmed-and-Declared-Second-Quarter-Distribution-of-49949593/
[2] https://www.stocktitan.net/news/GAB/gabelli-equity-trust-10-distribution-policy-reaffirmed-and-declared-jibyg37bxowd.html