The Preferred Shares, which trade on the New York Stock Exchange under the symbol "GAB Pr", are rated 'aaa' by Moody's Investor Services and have an annual dividend rate of $1.8125 per share. The Preferred Shares were issued on June 9, 1998 at $25.00 per share and pay distributions quarterly.

A portion of this distribution will be treated as long-term capital gains. This has the effect of providing individual shareholders with an ordinary income tax equivalent yield that is higher than the current yield. Long-term capital gains will be allocated to all distributions for the year. The final determination of the source of all distributions in 2001 will be made after year-end.

The Gabelli Equity Trust Inc. is a closed-end, non-diversified management investment company with $1.5 billion in total assets whose primary investment objective is long-term growth of capital.