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GAB: Is This ~10% Yielder A Buy?

May 03, 2018 2:31 PM ETGabelli Equity Trust (GAB)GDV46 Comments


  • GAB offers investors a distribution policy of 10% with distribution of its average net assets each year.
  • The expense ratio for this fund sits at 1.4%, and it utilizes the leverage of cumulative preferred shares at approximately 22% of assets.
  • The fund has shown periods of outperformance versus the S&P 500, with the 1, 15, 20, and 25 years beating the S&P 500 returns.

Gabelli Equity Trust (NYSE:GAB) is a fund offered by Gabelli with close to $2 billion in assets. The fund has a primary investment objective of long-term capital growth, with income as a secondary objective. GAB has a long history as the fund's inception date goes back to August 21, 1986.

I recently wrote an article about Gabelli Dividend & Income Trust (GDV), "Closed-End Fund GDV: Great Fund With Potential At An Attractive Price," where I was favorable on GDV. A reader had commented that I should check out GAB, and while I believe GDV is overall a better purchase right now, I do like what I see when looking at GAB and decided it warranted an article. I also want to note that I love all the comments and direct messages about funds that I may not have heard of and give me lots to look into! While I wish I could write an article on every fund suggested, I just currently do not have the time.

The last article done on GAB appears to be from November 1, 2017, from Left Banker, "History's Lessons On Gabelli Equity Trust's Rights Offering." Left Banker's article has a lot of great information about the rights offering GAB conducted in 2005, 2014, and 2017. I would implore you to read the very fine article. The quick summary is that these rights offerings had in the past been a chance to acquire shares while the market price dropped on announcement and then slowly recovered from there.


The fund's primary objective is long-term capital appreciation, but I find this curious as the fund has a managed distribution policy of 10%. That indicates to me that the primary objective could be for the income while having a managed distribution policy set at 10%. The actual market price distribution

This article was written by

Nick Ackerman profile picture
CEF/ETF income and arbitrage strategies, 8%+ portfolio yields
Nick Ackerman is an avid student of the markets and has been investing in his own accounts for over 14 years. He is a former Financial Advisor and has previously qualified for holding Series 7 and Series 66 licenses. These licenses also specifically qualified him for the role of Registered Investment Adviser (RIA), i.e., he was registered as a fiduciary and could manage assets for a fee and give advice. Since then he has continued with his passion for investing through writing for Seeking Alpha, providing his knowledge, opinions, and insights of the investing world. His specific focus is on closed-end funds as an attractive way to achieve income as well as general financial planning strategies towards achieving one’s long term financial goals.


I provide my work regularly to CEF/ETF Income Laboratory with articles that have an exclusivity period, this is noted in such articles. CEF/ETF Income Laboratory is a Marketplace Service provided by Stanford Chemist, right here on Seeking Alpha.

Analyst’s Disclosure: I am/we are long HON. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I may initiate a position in GAB and/or GDV in the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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