Gabelli Equity Trust 10% Distribution Policy Reaffirmed and Declared Third Quarter Distribution of $0.15 Per Share

Rhea-AI Summary

Gabelli Equity Trust (NYSE:GAB) has reaffirmed its 10% distribution policy and declared a quarterly cash distribution of $0.15 per share, payable on September 23, 2025, to shareholders of record as of September 16, 2025.

The Fund maintains a minimum annual distribution of 10% of average net asset value or an amount meeting IRS requirements for regulated investment companies. The 2025 distributions comprise approximately 4% from net investment income, 26% from net capital gains, and 70% as return of capital on a book basis.

The Board of Directors regularly reviews distribution levels considering net asset value and market conditions. Shareholders will receive detailed tax information for 2025 distributions via Form 1099-DIV in early 2026.

Positive

• Maintains consistent 10% distribution policy based on average NAV
• 26% of distributions come from net capital gains
• Regular quarterly distribution schedule provides steady income stream

Negative

• 70% of distributions classified as return of capital, potentially eroding investment base
• Only 4% of distributions come from net investment income
• Distribution policy subject to modification with no guarantee of continuation

Insights

Investment Income Specialist

Gabelli Equity Trust reaffirms 10% distribution policy with $0.15 quarterly payout, mostly return of capital rather than earnings-generated.

The Gabelli Equity Trust (NYSE:GAB) has declared its third quarter distribution of $0.15 per share, maintaining its commitment to a 10% distribution policy based on average net asset value. What's particularly noteworthy about this distribution is its composition: approximately 70% is classified as return of capital, with only 4% coming from net investment income and 26% from net capital gains.

This distribution structure warrants careful attention. The high return of capital component means the Fund is essentially returning investors' own money rather than distributing profits generated from investments. While return of capital distributions aren't immediately taxable, they reduce shareholders' cost basis, potentially increasing capital gains tax liability when shares are eventually sold.

The Fund's ability to generate sufficient earnings to cover its distribution is questionable based on these figures. With nearly three-quarters of the distribution not supported by current earnings or realized gains, the sustainability of this distribution level depends on either future performance improvement or continued willingness to return investor capital. The Board's quarterly review of the distribution level acknowledges this reality, noting the policy is subject to modification based on net asset value and market conditions.

For income-focused investors, understanding that most of what they're receiving isn't actual investment income but rather a return of their invested capital is crucial for proper portfolio and tax planning. This distribution structure essentially accelerates the return of principal that would otherwise occur upon sale of shares.

RYE, N.Y., Aug. 21, 2025 (GLOBE NEWSWIRE) -- The Board of Directors of The Gabelli Equity Trust Inc. (NYSE:GAB) (the “Fund”) reaffirmed and satisfied its 10% distribution policy by declaring a $0.15 per share cash distribution payable on September 23, 2025 to common stock shareholders of record on September 16, 2025.

The Fund intends to pay a minimum annual distribution of 10% of the average net asset value of the Fund within a calendar year or an amount sufficient to satisfy the minimum distribution requirements of the Internal Revenue Code for regulated investment companies. The average net asset value of the Fund is based on the average net asset values as of the last day of the four preceding calendar quarters during the year. The net asset value per share fluctuates daily.

Each quarter, the Board of Directors reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board of Directors will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s net asset value and the current financial market environment. The Fund’s distribution policy is subject to modification by the Board of Directors at any time, and there can be no guarantee that the policy will continue. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.

All or part of the distribution may be treated as long-term capital gain or qualified dividend income (or a combination of both) for individuals, each subject to the maximum federal income tax rate for long term capital gains, which is currently 20% in taxable accounts for individuals (or less depending on an individual’s tax bracket). In addition, certain U.S. shareholders who are individuals, estates or trusts and whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surcharge on their "net investment income", which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund.

If the Fund does not generate sufficient earnings (dividends and interest income, less expenses, and realized net capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund’s earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholder’s original investment, it is generally not taxable and would be treated as a reduction in the shareholder’s cost basis.

Long-term capital gains, qualified dividend income, investment company taxable income, and return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. Based on the accounting records of the Fund currently available, each of the distributions paid to common shareholders in 2025 would include approximately 4% from net investment income, 26% from net capital gains and 70% would be deemed a return of capital on a book basis. This does not represent information for tax reporting purposes. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website (www.gabelli.com). The final determination of the sources of all distributions in 2025 will be made after year end and can vary from the quarterly estimates. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution. All individual shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2025 distributions in early 2026 via Form 1099-DIV.

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
(914) 921-5681

About The Gabelli Equity Trust
The Gabelli Equity Trust Inc. is a diversified, closed-end management investment company with $2.1 billion in total net assets whose primary investment objective is long-term growth of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE – GAB
CUSIP – 362397101

THE GABELLI EQUITY TRUST INC.
    Investor Relations Contact:
    Molly Marion
    (914) 921-5681
    mmarion@gabelli.com

FAQ

What is the Q3 2025 dividend amount for Gabelli Equity Trust (GAB)?

Gabelli Equity Trust (GAB) declared a $0.15 per share cash distribution for Q3 2025, payable on September 23, 2025, to shareholders of record as of September 16, 2025.

What is the composition of GAB's 2025 distributions?

GAB's 2025 distributions consist of approximately 4% from net investment income, 26% from net capital gains, and 70% as return of capital on a book basis.

What is Gabelli Equity Trust's (GAB) distribution policy?

GAB maintains a 10% minimum annual distribution policy based on the average net asset value of the Fund within a calendar year, calculated using the last day of the four preceding calendar quarters.

When will GAB shareholders receive tax information for 2025 distributions?

GAB shareholders will receive detailed tax information for all 2025 distributions in early 2026 via Form 1099-DIV.

How are GAB's distributions taxed?

GAB's distributions may be treated as long-term capital gain, qualified dividend income, or return of capital. A 3.8% Medicare surcharge may apply to certain shareholders whose income exceeds specific thresholds.