The Gabelli Multimedia Trust Inc.

Transcription

Shareholder Commentary – March 31, 2015
(Y)our Portfolio Management Team
Mario J. Gabelli, CFA
Christopher J. Marangi
Lawrence J. Haverty, CFA
To Our Shareholders,
For the quarter ended March 31, 2015, the net asset value (“NAV”) total return of The Gabelli Multimedia
Trust Inc. (the “Fund”) was 1.4%, compared with a total return of 2.3% for the Morgan Stanley Capital
International (“MSCI”) World Index. The total return for the Fund’s publicly traded shares was (5.0)%. The
Fund’s NAV per share was $9.73, while the price of the publicly traded shares closed at $9.29 on the New York
Stock Exchange (“NYSE”).
Comparative Results
Average Annual Returns through March 31, 2015 (a)
Quarter
———–——
1 Year
——–——
5 Year
—–——
10 Year
——–––——
Since
Inception
(11/15/94)
———–––——
Gabelli Multimedia Trust
NAV Total Return (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.44%
Investment Total Return (c) . . . . . . . . . . . . . . . . . . . . . . (5.01)
Standard & Poor’s 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . 0.95
MSCI World Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.31
7.26%
(0.26)
12.73
6.03
16.69%
18.18
14.47
10.01
6.57%
8.00
8.01
6.39
9.16%
9.33
9.81(d)
7.10(d)
(a) Returns represent past performance and do not guarantee future results. Investment returns and the principal value
of an investment will fluctuate. When shares are sold, they may be worth more or less than their original cost. Current
performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance
information as of the most recent month end. Performance returns for periods of less than one year are not
annualized. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund
before investing. The Standard & Poor’s 500 and MSCI World Indices are unmanaged indicators of stock market
performance. Dividends are considered reinvested except for the MSCI World Index. You cannot invest directly in
an index.
(b) Total returns and average annual returns reflect changes in the NAV per share, reinvestment of distributions at NAV
on the ex-dividend date, and adjustments for rights offerings and are net of expenses. Since inception return is
based on an initial NAV of $7.50.
(c) Total returns and average annual returns reflect changes in closing market values on the NYSE, reinvestment of
distributions, and adjustments for rights offerings. Since inception return is based on an initial offering price of $7.50.
(d) From November 30, 1994, the date closest to the Fund’s inception for which data is available.
Premium / Discount Discussion
As a refresher for our shareholders, the price of a closed-end fund is determined in the open market by
willing buyers and sellers. Shares of the Fund trade on the NYSE and may trade at a premium to (higher than)
net asset value (the market value of the Fund’s underlying portfolio and other assets less any liabilities) or a
discount to (lower than) net asset value.
Ideally, the Fund’s market price will generally track the NAV. However, the Fund’s premium or discount to
NAV may vary over time. Over the Fund’s twenty year history, the range fluctuated from approximately a 15%
premium in December 2013 to approximately a 31% discount in March 2009. On March 31, 2015, the market
price of the Fund was at a 4.5% discount to its NAV.
The Fund’s investment goals are long term growth of capital, with income as a secondary objective. We
believe that our stock selection process adds to the investment equation. We have a successful history of
investment, providing shareholders average annual returns of 9.2% since inception. However, it is important to
remember that “Mr. Market” is a pendulum that swings both ways. As the market moves away from momentum
investing and back to basics, we believe that a high premium for the Fund is not likely to be sustainable.
Commentary
Lead From Strength
Duplicate bridge is played across the globe by tens of thousands of participants. Games range from
social in nature to intensely competitive, and players have many strategic options and countless advisers
suggesting ways to play the game. At the end of play, winners and losers are declared. To an extent, this is
like the money management business (and the NCAA Basketball Championship – sometimes known as “The
Big Dance”). The games can be difficult, and the participants often revert to tried and tested strategies. In
bridge, one of those strategies is “lead from strength.” In the first quarter of 2015, in the investment business
and the media and entertainment sector in which we invest, that strategy worked. Your Fund did slightly better
than the popular market averages and notched a small gain for the quarter.
The investment horizon in the first quarter was a challenging one, with some of the problems easy to
anticipate and some more difficult. The dollar entered 2015 as a strong currency, and grew even stronger as
the quarter progressed. The first of these statements was known, while the latter could be suspected, as trends
continue – until they don’t. This reduced the economic value of foreign domiciled businesses and exports
priced in local currencies. As an example, a film released in France might have an admission price of 10 euros.
Last year, that ticket was worth $13.50 when translated to dollars. This year, the dollar price was $10.09. The
financial press reported that “foreign earnings were under pressure.” Truer words were never spoken. The
weather again was awful, hurting commerce in many states, especially in the Northeast, where many money
managers watched it daily and easily grasped its implications. Some foreign growth markets (remember the
BRICs – Brazil, Russia, India, and China) had growth issues. Oil prices plummeted, and investors focused on
the decline in energy profits, cash flows, and capital expenditures, rather than the corresponding growth in
consumer spending (go figure).
The media and entertainment industries in which your Fund invests had their own sets of problems, as
well as those described above. Consumers tired of the relentless increase in their cable bills, and a few of
them actually “cut the cord.” Those words were chosen carefully, as very few consumers actually suspended
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their multi-channel television vendor. However, Wall Street, in its wisdom, feared great losses, as many
apparently cheaper Internet-based services (Sling TV, Sony Vue, HBO NOW, etc.) actually started operations
or announced their launch in the quarter. A new term was coined for these services: “Over the Top.” They are
not about to go away, nor will the slow erosion of pay television subscriptions. In addition, advertising markets
were sluggish as several growth global ad markets (the BRICs) faltered, and digital advertising from Facebook,
Twitter, and Google, etc., began to seriously impact growth at cable and broadcast television networks.
Against the formidable array of macroeconomic and industry-specific problems, the sector followed the
classic bridge strategy of “leading from strength.” It launched major weapons into the fray to protect its cash
flows and the stock prices that follow them, as sure as day follows night. They were neither new nor innovative.
1. Family Values – The entertainment industry has long cherished the family and its offshoots in
commerce. One needs to look no further than Don Vito Corleone’s reverent references to “the family
business” in “The Godfather” to be sure of this trend. Carol Channing as Dolly Levy in “Hello Dolly”
belted out that she stood for “Motherhood, America, and a hot lunch for orphans.” The play ran for
years. That marvelous institution, Faber College (of Animal House fame) trumpeted higher education
with its motto on a statue - “Knowledge is good.” Put simply, there was plenty of successful history
to suggest family values might be commercial.
The efforts of industry participants in exploiting this strategy were multifaceted and successful,
although they did not portray the family in ways Dolly Levy might have applauded. Showtime
(Viacom) started the ball moving with “The Affair,” featuring family life on Long Island. The Fox
Network (Twenty-First Century Fox) followed with “Empire,” a show depicting a family business in the
hip-hop sector of the music industry. Both received stellar ratings. AMC Networks (AMC
Entertainment) featured “Better Call Saul,” a series about brotherly love (???) and a father/daughterin-law team with “issues.” All three received “buzz” and ratings, a marvelous combination from an
investor standpoint. However, the best of family values is yet to come, as HBO soon releases its next
season of “Game of Thrones,” with its collection of unforgettable, violence-prone family dynasties.
Netflix also has high hopes for “Bloodline,” a series set in the Florida Keys. Perhaps it will turn out to
be “Dynasty” with more water. Thrones and Bloodline debut this quarter, and expectations are high.
2. Sports – The industry has long appreciated the value of sports rights. Ownership of sports rights has
helped create some of the great media businesses, including ESPN (Disney), a business most
investors feel is worth $50 billion, and British Sky Broadcasting, through its ownership of rights to the
British Premier League. While some sports rights purchases have been excessively valued, such as
Time Warner Cable’s purchase of rights for the LA Dodgers baseball team, most have been good
investments. This was never more true than in the first quarter of 2015. First came the Super Bowl,
with record viewership and record ad rates. Advertisers and the audience were treated to a game
decided in the final seconds on one of the most bizarre play calls in football history. The Super Bowl
was followed by the NCAA Men’s Basketball Tournament, where record audiences and ad dollars will
feast on whether or not a new dynasty (the Kentucky basketball team) will emerge from the sixty-eight
teams that began play. At the time of this writing, undefeated Kentucky has already been tested once
by Notre Dame in a classic quarterfinal game, the “Elite Eight”, and sports fans, investors, and the
rights holders (Time Warner and CBS) eagerly await “the Final Four.”
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Investors in media and entertainment are already looking forward to May 2, 2015. As always, the first
Saturday in May will feature the running of the Kentucky Derby (NBC, a division of Comcast), but after
that focus will shift to Las Vegas, where Floyd Mayweather will fight Manny Pacquaio at the MGM
Grand hotel, which is owned by MGM Mirage Resorts. HBO (Time Warner) and Showtime (Viacom)
will share pay per view rights, which will break all records for a single event. Las Vegas will clearly
prosper mightily from the contest. For those interested in attending, the Internet, via Stub Hub, a
division of EBAY, has tickets starting at $5500. Hot dogs are extra! If that is not enough, the New
York Knicks, owned by Madison Square Garden, will also pursue their own record, the most losses in
an NBA season, early in the second quarter. Tickets are at a big premium. Next year, the Knicks
should do better.
All of this has happened in a period when financial engineering and deal making have, on balance, helped
the stocks in this sector. The mega mergers of Comcast/Time Warner Cable and DIRECTV continue their
seemingly endless regulatory review, putting the stocks in “deal jail.” However, the finish line for the review is
in sight, and the handicappers are suggesting that the probability of approval is increasing. Approval should
unleash powerful merger synergies, which should lead to better stock performance. The local television station
market will continue to consolidate, as should the film production sector. Dr. John Malone is still at work, as
the recently announced Charter merger with Bright House Networks suggests. Other firms are engaging in
thoughtful spinoffs; Madison Square Garden will spin its sports and entertainment business from its cable
networks, and aggressive share repurchases, such as those by Time Warner, create an optimal debt equity
structure in a period of low interest rates.
Outlook
Media and entertainment stocks have performed well since the market bottomed in 2009, and they are
fairly valued by most standard measurements. Fundamental conditions remain favorable. Pressure from a
strong dollar is decelerating, and it may be peaking. The digital revolution continues, allowing consumers to
increase their overall consumption of media. New digital platforms to harvest advertising dollars and enhance
video game play are proliferating globally, including WeChat (Naspers) and WhatsApp (Facebook). The
automobile business remains healthy (it is the largest generator of ad dollars), and political advertising is now
a twelve month sport. The 2016 election is now in an area where investors will begin to discount its
implications, which are positive for many of our stocks. The summer film slate will launch in April with the
seventh edition of “The Fast and the Furious” from Comcast.
While the playing field in our sector will never be clear of opponents, your managers remain confident
they will find a way to navigate through the shoals. We remain quite optimistic about the future. Thanks for
your support.
Winners and Laggards
Winners
The investment business has a number of unique characteristics. One of them is that you find out the
rules of the game after the game is over. As the previous section suggested, one of the rules that worked in
the first quarter was “lead from strength.” Reviewing the portfolio after the quarter ended, it was not difficult to
assess which strategies worked. Regrettably, the market sometimes has the attention span of a two-year-old,
and what works in one quarter may not work in the next.
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In the first quarter, two sector themes clearly were dominant. The first was the emergence of console
video games. While the notion of casual, or mobile, games was dominant in investor thinking a few years ago,
the sub sector has been treacherous and hazardous to investors’ wealth, due to its lack of entry barriers for
game manufacturers and the transitory nature of player engagement with the game. Put simply, some industry
participants, such as Zynga, crashed and burned. On the other hand, the console game sub sector flourished,
and Nintendo, Sony, and Electronic Arts were stellar performers. This sub sector moves in cycles that are
coincident with console launches. The next generation of consoles launched eighteen months ago, and its post
launch metrics suggest an industry that has increased 50% cycle to cycle. This is not bad, since three years
ago many serious investors were convinced there would never be another video game cycle. In addition, in
this cycle the industry structure became much more attractive to investors. The console manufacturers
Microsoft, Sony, and Nintendo all developed networks that facilitated multi player game experiences and
permitted the launch of game expansion packages (downloadable content, or DLC) at significant incremental
margins. For industry participants, the net impact was an acceleration of sales growth and an expansion of
margins, a combination that is pleasing to investors. Network manager Sony was a strong stock, as its
PlayStation 4 console system looks to capture the number one share of next generation hardware. Its game
network has spread globally, and will now start to reap serious tolls from global networked game play. Software
producer Electronic Arts is dominant in the sports genre. Its FIFA and Madden (football) games are especially
amenable to DLC and network play, and its business model (and margins) have benefited from improved
industry economics. Nintendo produces both hardware (Wii) and software. Its hardware is old and losing
share, and the stock has languished. However, it has powerful game software, including a stable of characters
(Mario, Zelda, Link, Luigi, Donkey Kong, etc.) that are beloved by gamers. Investors longed for Nintendo to
license its software to other developers. In this quarter that wish was rewarded, and the stock surged. As a
Japanese exporter, Nintendo also benefited from a weak yen. Nintendo has had several near death
experiences in its long corporate history, and it looks like it may have survived another one.
The non network television broadcasters were a tower of strength in recent years, and they continued that
trend in the first quarter. Investors applauded their ability to collect what is called retransmission consent, a
fee from cable and satellite operators for the transmission of their signal. The companies also published
balance sheets highlighting their high margin political revenue collected in late 2014, and investors clearly
salivated about the prospects for a record political harvest in 2016. The industry continued to consolidate, as
few operators are near the FCC imposed ceiling of 40% of television households. Consolidation economics
are superb and compelling. It remains a challenge predicting who will marry who, but it is a high class problem.
Journal Communications, E. W. Scripps, Sinclair Broadcasting Group, and Gannett were all stellar performers
in the quarter, and it seems clear this game was far from over.
Laggards
It should be no surprise at this juncture that some themes clearly appeared in the problem areas of our
Fund. The principal problem in the quarter was the anti-corruption policies of the Chinese government. Macau
was targeted as part of the cleanup process, especially in its VIP (high roller) segment. The authorities
declared an end, at least temporarily, to all forms of conspicuous consumption; this included VIP gaming in
Macau. This caused a severe and unanticipated contraction in Macau gaming revenues and profits. All of the
operators suffered, with MGM China, Melco, and Wynn Resorts being especially hard hit. The worst declines
seem to have been in the key holiday period of the Chinese New Year, and most observers of the sector feel
the worst is over. If that is so, the stocks should again be in a positive situation, but no one really knows what
the authorities will do. We are encouraged by the recent performance of the Shanghai stock market and the
Hong Kong real estate sector, as well as by the easing of monetary policy in China. These are hopeful signs,
but an industry recovery before the fourth calendar quarter of 2015 seems unlikely. At the current level, your
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Fund still has significant gains from its Macau holdings, but some of the bloom is off the rose. We are watching
the situation carefully – one of our analysts recently visited Macau – and are hopeful we have seen the worst.
Not surprisingly, other foreign domiciled stocks, or stocks with a large component of foreign cash flows,
did not perform well in the first quarter, as the U.S. dollar strengthened against nearly all global major
currencies. Nowhere was this clearer than in Canada, where Cogeco and Rogers Communications both
declined. The Canadian economy, especially in the West, is energy-centric and may be entering a recession.
For both firms, economically sensitive parts of their cash flows are suffering ever so slightly, but even if there
was no cash flow effect, the translation of the Canadian dollar to its U.S. equivalent is severely pinching returns.
Our holdings are well managed and do not have serious internal threats to their cash flows, so most of the
negative currency effect is in the current stock price, and valuations are clearly low. While U.S. domiciled
Discovery Communications has been affected by a slowdown in domestic advertising, most of its cash flow is
generated abroad, where currency translation has impeded progress. In local (foreign) currency, its businesses
are performing well, and it looks like problems of translation are one-off. The firm is well led and has powerful
brands. We are confident about the recovery of the stock price.
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 that we believe will develop
over time. Individual securities mentioned are not necessarily representative of the entire portfolio. For the
following holdings, the share prices are listed first in United States dollars (USD) and second in the local
currency, where applicable, and are presented as of March 31, 2015.
Apple Inc. (AAPL – $124.43 – NASDAQ) is now the world’s largest company in terms of market capitalization,
with an equity value in excess of $725 billion. Apple is a partially integrated communications and computer
manufacturer and retailer. It outsources its manufacturing, but controls its distribution. It arguably has one of
the best and most respected brands in the world, and it is probably also the world’s best retailer at scale, with
hugely productive and high margin retail outlets globally. Its principal product success is the iPhone, now in its
sixth iteration. Probably the key facet of Apple’s operation is its ability to create a growing ecosystem, which
enables the collection of recurring revenue, as consumers who buy its high end, high margin products are
reluctant to cease using them, replacing them periodically as new products are introduced, and buying software
and apps for them during the ownership period. This marvelous virtuous circle results in huge free cash flow
for the entity, as it does not invest significant money in plant and equipment. Activists have pressured Apple
to be a more efficient allocator of its abundant free cash flow, and the firm now pays a generous dividend and
has been a significant purchaser of its stock. The Apple Watch could be a catalyst for further positive stock
performance.
DIRECTV (DTV – $85.10 – NASDAQ) is the dominant firm in the United States satellite television industry and
a significant participant in satellite television in Latin America, either as sole owner or a joint venture partner.
The firm agreed in 2014 to a merger proposal from AT&T, a major factor in communications in both markets.
The merger is under extensive regulatory review, and both firms anticipate approval sometime within the next
six months, probably in this quarter. Because the firms are not direct competitors, the merger should be
approved, and it will create a powerful global firm with the ability to offer consumers in several markets a “quad
play” of landline and cellular telephony, satellite and terrestrial pay television, and Internet service. The merger
is likely to produce significant scale economies and cost savings, and it will probably enhance competition in
all the segments in which it will operate. The merged company will continue to offer the “NFL Sunday Ticket”
exclusively, a significant competitive advantage in some segments of its markets. The long regulatory review,
as well as the steady growth of free cash flow by both firms, has led to favorable valuation should the merger
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be completed. If regulators reject it, DIRECTV will clearly resume its vigorous repurchase of its own shares,
protecting the current DIRECTV investor.
Dish Network Corp. (DISH – $70.06 – NASDAQ) is the operator of the second largest satellite television network
in the United States. It has targeted the lower end of the satellite television market, and is dominated by the
overwhelming presence of its founder, Chairman, and once again CEO, Charlie Ergen. Mr. Ergen is also a
championship poker player. He has taken his poker skills to the world of spectrum accumulation, and has
steadily acquired an immense amount of communications spectrum, a substance that, in spite of being invisible,
has both an enormous and an increasing value. A recent auction, dominated by DISH-affiliated entities,
produced double the expected results, and spectrum is now the largest component of the value of this
corporation. Although it produces no cash flow, its value and growing optionality (what will Charlie do with it?)
has led to strong stock price appreciation. The strong expectation, held by our firm as well as by other investors,
is that this asset will be used in a very productive way for shareholders. Our long holding period in this entity
has and should continue to be rewarded by the market, in spite of the maturity of the original business.
eBay Inc. (EBAY – $57.68 – NASDAQ) began its corporate history as an operator of Internet auction sites
(remember Beanie Babies). It has evolved slowly but surely as a major site for e-Commerce on the Internet
through its auction and fixed price sites, and it has established PayPal, an integrated payments network, to
facilitate payments on its and others’ sites. The merchandising businesses, now known as Marketplaces, will
soon be spun off as a separate entity, with PayPal also sharing the same fate. The latter business has
emerged as an investor favorite, as its high and growing margins and solid growth have and will be generously
valued. eBay is one of an increasingly long list of technology companies that have embraced financial
engineering and found that the sum of the parts exceed the whole. Over time, it has been a solid performer
for the Fund, and this should continue after the spinoff is accomplished.
Ryman Hospitality Properties Inc. (RHP – $60.91 – NYSE) is the operator of four hotels under the Gaylord
brand, as well as the Grand Old Opera entertainment assets in Nashville, Tennessee. The firm was an early
converter to the REIT (Real Estate Investment Trust) form of corporate structure. As yields on most securities
have fallen, investors have valued the steady and tax sheltered income of the REIT at historically high levels.
Ryman agreed to surrender the operation of its hotels to Marriott as part of the REIT conversion. That change
in management was difficult at first, but now the highly efficient Marriott management machine is performing
as investors had hoped, and cash flow at Ryman is strong, helped by a recovery in its large group segment.
Nashville and country music is also in another up phase of its many historic cycles, benefiting the entertainment
assets of the firm. Further valuation potential might be unleashed by the spinoff of those entertainment assets
(something Madison Square Garden recently proposed) indicating that the performance potential of Ryman is
far from over.
April 17, 2015
Top Ten Holdings
March 31, 2015
Grupo Televisa SAB
DIRECTV
YAHOO! Inc.
Liberty Global plc
Sony Corp.
Ryman Hospitality Partners
Apple Inc.
Vivendi
eBay Inc.
Madison Square Garden Co.
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Note: The views expressed in this Shareholder Commentary reflect those of the Portfolio Managers only
through the end of the period stated in this Shareholder Commentary. The Portfolio Managers’ views are
subject to change at any time based on market and other conditions. The information in this Shareholder
Commentary represents the opinions of the individual Portfolio Managers and is not intended to be a forecast
of future events, a guarantee of future results, or investment advice. Views expressed are those of the Portfolio
Managers and may differ from those of other portfolio managers or of the Firm as a whole. This Shareholder
Commentary does not constitute an offer of any transaction in any securities. Any recommendation contained
herein may not be suitable for all investors. Information contained in this Shareholder Commentary has been
obtained from sources we believe to be reliable, but cannot be guaranteed. Beneficial ownership of shares held
in the Fund by Mr. Gabelli and various entities he is deemed to control are disclosed in the Fund’s annual proxy
statement.
Common Stock Repurchase Plan
On July 3, 1996, the Board of Directors of the Fund (the “Board”) voted to authorize the repurchase of the
Fund’s common shares in the open market from time to time when such shares are trading at a discount of
10% or more from NAV. On May 19, 2010, the Board reduced the discount required for repurchasing common
shares to 5% or more from NAV. In total through March 31, 2015, the Fund has repurchased and retired
1,567,558 shares in the open market under this share repurchase plan at an average investment of $8.20 per
share and an average discount of approximately 15% from its NAV. The Fund did not repurchase any common
stock during the first quarter of 2015.
10% Distribution Policy for Common Stockholders
The Board has reaffirmed the continuation of the Fund’s 10% distribution policy. Pursuant to its
distribution policy, the Fund paid a $0.22 per share cash distribution on March 24, 2015 to common stock
shareholders of record on March 17, 2015.
The Fund intends to pay a quarterly distribution of an amount determined each quarter by the Board.
Under the Fund’s current distribution policy, 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, whichever is greater. 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.
Each quarter, the Board reviews the amount of any potential distribution from the income, capital gain, or
capital available. The Board will continue to monitor the Fund’s distribution level, taking into consideration the
Fund’s net asset value and the financial market environment. The Fund’s distribution policy is subject to
modification by the Board at any time. The distribution rate should not be considered the dividend yield or total
return on an investment in the Fund.
If the Fund does not generate sufficient earnings (dividends and interest income 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 is treated
as a reduction in the shareholder’s cost basis. Under federal tax regulations, some or all of the return of capital
distributed by the Fund may be taxable as ordinary income in certain circumstances. This may occur when the
Fund has a capital loss carry forward, net capital gains are realized in a fiscal year, and distributions are made
in excess of investment company taxable income.
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Long term capital gains, qualified dividend income, ordinary income, and paid-in 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 as of March 17, 2015, the current distribution paid to common shareholders in 2015 would
include approximately 3% net capital gains and 97% from paid-in capital on a book basis. 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 2015 will be made after year end and can vary from the quarterly estimates. All shareholders
with taxable accounts will receive written notification regarding the components and tax treatment for all 2015
distributions in early 2016 via Form 1099-DIV.
6.00% Series B Cumulative Preferred Stock
The Fund’s 6.00% Series B Cumulative Preferred Stock paid a $0.375 per share cash distribution on
March 26, 2015 to preferred shareholders of record on March 19, 2015. The Series B Preferred Shares, which
trade on the NYSE under the symbol “GGT Pr B”, are rated “A1” by Moody’s Investors Service and have an
annual dividend rate of $1.50 per share. The Series B Preferred Shares were issued on April 1, 2003 at $25.00
per share and pay distributions quarterly. After five years of call protection, the Series B Preferred Shares
became callable at any time at the liquidation value of $25.00 per share plus accrued dividends. The next
distribution is scheduled for June 2015. The Fund is authorized to purchase its Series B Preferred Shares in
the open market from time to time when such shares are trading at a discount to the liquidation value of $25.00
per share. In total through March 31, 2015, the Fund has repurchased and retired 48,986 Series B Preferred
Shares in the open market under this share repurchase authorization. The Fund did not repurchase any Series
B Preferred Shares during the first quarter of 2015.
Series C Auction Rate Cumulative Preferred Stock
During the first quarter of 2015, the dividend rates for the Series C Auction Rate Cumulative Preferred
Stock ranged from 0.123% to 0.158%. Dividend rates for the Series C Preferred Shares may be reset every
seven days based on the results of an auction. Since February 2008, the number of Series C Preferred Shares
subject to bid orders by potential holders has been less than the number of sell orders. Therefore the weekly
auctions have failed, and the holders have not been able to sell any or all of the Series C Preferred Shares for
which they submitted sell orders. The dividend rate since then has been the maximum rate. At March 31, 2015,
the maximum rate was 175% of the “AA” Financial Composite Commercial Paper Rate. The Series C Preferred
Shares are rated “A1” by Moody’s Investors Services and “AA” by Fitch Ratings. The Series C Preferred
Shares do not trade on an exchange. The Fund issued 1,000 Series C Preferred Shares on April 1, 2003 at
$25,000 per share. As of March 31, 2015, 600 Series C Preferred Shares were outstanding.
The Board shares the Investment Adviser’s view that the issuance of the Preferred Stock is designed to
benefit the common shareholders. To the extent that the Fund earns in excess of the dividend rate on the
Preferred Stock, additional value will thereby be created for its common shareholders.
Long term capital gains, qualified dividend income, and ordinary income, if any, will be allocated on a prorata basis to all distributions to preferred shareholders for the year. Based on the accounting records of the
Fund as of March 17, 2015, the current distribution paid to preferred shareholders would be deemed
approximately 100% from net capital gains on a book basis. 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 2015 will be
made after year end and can vary from the quarterly estimates. All shareholders with taxable accounts will
9
receive written notification regarding the components and tax treatment for all 2015 distributions in early 2016
via Form 1099-DIV.
Tax Treatment of Distributions to Common and Preferred Shareholders
All or part of the distributions 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, which is currently
20% in taxable accounts for individuals. 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.
www.gabelli.com
Please visit us on the Internet. Our homepage at www.gabelli.com contains information about GAMCO
Investors, Inc., the Gabelli/GAMCO Closed-End Funds and Mutual Funds, IRAs, 401(k)s, current and historical
quarterly reports, closing prices, and other current news. We welcome your comments and questions via email at [email protected].
You may sign up for our e-mail alerts at www.gabelli.com and receive notice of quarterly report availability,
news events, media sightings, and mutual fund prices and performance.
e-delivery
We are pleased to offer electronic delivery of Gabelli fund documents. Shareholders of our closed-end
funds can now elect to receive e-mail announcements regarding available materials, including shareholder
commentaries and Fund reports. For more information or to register for e-delivery, please visit our website at
www.gabelli.com.
10
THE GABELLI MULTIMEDIA TRUST INC.
One Corporate Center
Rye, NY 10580-1422
Portfolio Management Team Biographies
Mario J. Gabelli, CFA, is Chairman and Chief Executive Officer of GAMCO Investors, Inc. that he founded in
1977 and Chief Investment Officer – Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management
Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from
Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.
Christopher J. Marangi joined Gabelli in 2003 as a research analyst. He currently serves as a portfolio
manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Funds Complex.
Mr. Marangi graduated magna cum laude and Phi Beta Kappa with a BA in Political Economy from Williams
College and holds an MBA with honors from Columbia Business School.
Lawrence J. Haverty, Jr., CFA, joined GAMCO Investors, Inc. in 2005 and currently is a portfolio manager of
Gabelli Funds, LLC and the Fund. Mr. Haverty was previously a managing director for consumer discretionary
research at State Street Research, the Boston based subsidiary of Metropolitan Life Insurance Company. He
holds a BS from the Wharton School and a MA from the Graduate School of Arts and Sciences at the University
of Pennsylvania where he was a Ford Foundation Fellow.
We have separated the portfolio managers’ commentary from the financial statements and investment portfolio due to
corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the
content of the portfolio managers’ commentary is unrestricted. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at www.gabelli.com.
The Net Asset Value per share appears in the Publicly Traded Funds column, under the heading “Specialized
Equity Funds,” in Monday’s The Wall Street Journal. It is also listed in Barron’s Mutual Funds/Closed End
Funds section under the heading “Specialized Equity Funds.”
The Net Asset Value per share may be obtained each day by calling (914) 921-5070 or visiting www.gabelli.com.
The Nasdaq symbol for the Net Asset Value per share is “XGGTX”.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the
Fund may from time to time purchase shares of its common stock in the open market when the Fund’s shares are trading
at a discount of 5% or more from the net asset value of the shares. The Fund may also from time to time purchase shares
of its preferred stock in the open market when the preferred shares are trading at a discount to the liquidation value.
This report is printed on recycled paper.
T H E G A B E L L I M U LT I M E D I A T R U ST I N C .
Rye, NY 10580-1422
t 800-GABELLI (800-422-3554)
f 914-921-5118
e [email protected]
G A B E L L I .C O M
DIRECTORS
OFFICERS
Chairman &
Chief Executive Officer,
GAMCO Investors, Inc.
Bruce N. Alpert
President
Anthony J. Colavita
President,
Anthony J. Colavita, P.C.
Andrea R. Mango
Secretary & Vice President
Agnes Mullady
Treasurer
James P. Conn
Former Managing Director &
Chief Investment Officer,
Financial Security Assurance
Holdings Ltd.
Richard J. Walz
Chief Compliance Officer
Frank J. Fahrenkopf, Jr.
Former President &
American Gaming Association
Laurissa M. Martire
Vice President & Ombudsman
INVESTMENT ADVISER
Managing Director,
Gabelli Funds, LLC
Rye, New York 10580-1422
Kuni Nakamura
President,
Advanced Polymer, Inc.
CUSTODIAN
Anthony R. Pustorino
Certified Public Accountant,
Professor Emeritus,
Pace University
Carter W. Austin
State Street Bank and Trust
Company
COUNSEL
Paul Hastings LLP
Werner J. Roeder, MD
Former Medical Director,
Lawrence Hospital
Salvatore J. Zizza
Chairman,
Zizza & Associates Corp.
G GT M a r/2 0 1 5
THE
GABELLI
M U LT I M E D I A
T R U S T INC.
TRANSFER AGENT AND
REGISTRAR
Computershare Trust Company, N.A.
GGT
Shareholder Commentary
March 31, 2015
First Quarter Report — March 31, 2015
(Y)our Portfolio Management Team
Mario J. Gabelli, CFA Christopher J. Marangi Lawrence J. Haverty, CFA
To Our Shareholders,
For the quarter ended March 31, 2015, the net asset value (“NAV”) total return of The Gabelli Multimedia
Trust Inc. (the “Fund”) was 1.4%, compared with a total return of 2.3% for the Morgan Stanley Capital International
(“MSCI”) World Index. The total return for the Fund’s publicly traded shares was (5.0)%. The Fund’s NAV per
share was $9.73, while the price of the publicly traded shares closed at $9.29 on the New York Stock Exchange
(“NYSE”). See below for additional performance information.
Enclosed is the schedule of investments as of March 31, 2015.
Comparative Results
Average Annual Returns through March 31, 2015 (a) (Unaudited)
Quarter
1 Year
5 Year
10 Year
Since
Inception
(11/15/94)
Gabelli Multimedia Trust Inc.
NAV Total Return (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.44%
7.26% 16.69%
6.57%
9.16%
Investment Total Return (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5.01)
(0.26)
18.18
8.00
9.33
Standard & Poor’s 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.95
12.73
14.47
8.01
9.81(d)
MSCI World Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.31
6.03
10.01
6.39
7.10(d)
(a) Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will
fluctuate. When shares are sold, they may be worth more or less than their original cost. Current performance may be lower or higher than
the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Performance
returns for periods of less than one year are not annualized. Investors should carefully consider the investment objectives, risks, charges,
and expenses of the Fund before investing. The Standard & Poor’s 500 and MSCI World Indices are unmanaged indicators of stock
market performance. Dividends are considered reinvested except for the MSCI World Index. You cannot invest directly in an index.
(b) Total returns and average annual returns reflect changes in the NAV per share, reinvestment of distributions at NAV on the ex-dividend
date, and adjustments for rights offerings and are net of expenses. Since inception return is based on an initial NAV of $7.50.
(c) Total returns and average annual returns reflect changes in closing market values on the NYSE, reinvestment of distributions, and
adjustments for rights offerings. Since inception return is based on an initial offering price of $7.50.
(d) From November 30, 1994, the date closest to the Fund’s inception for which data is available.
Schedule of Investments — March 31, 2015 (Unaudited)
Market
Value
Shares
10,000
60,000
6,400
16,000
2,000
15,000
34,000
127,000
17,000
81,000
130,000
4,550
11,500
32,739
43,000
84,000
4,000
20,936
68,566
36,000
4,650
25,000
3,500
77,000
13,000
23,000
50,000
45,000
75,000
240,000
27,000
COMMON STOCKS — 91.6%
DISTRIBUTION COMPANIES — 55.2%
Broadcasting — 9.0%
Asahi Broadcasting Corp. . . . . . . . . . . . . . . . . . . . . . . . . $
CBS Corp., Cl. A, Voting . . . . . . . . . . . . . . . . . . . . . . . . .
Chubu-Nippon Broadcasting Co. Ltd.. . . . . . . . . . . . .
Cogeco Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corus Entertainment Inc., OTC, Cl. B . . . . . . . . . . . . .
Corus Entertainment Inc., Toronto, Cl. B. . . . . . . . . .
Discovery Communications Inc., Cl. A† . . . . . . . . . .
Discovery Communications Inc., Cl. C† . . . . . . . . . .
Gannett Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Grupo Radio Centro SAB de CV, Cl. A† . . . . . . . . . . .
ITV plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lagardere SCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liberty Broadband Corp., Cl. A†. . . . . . . . . . . . . . . . . .
Liberty Broadband Corp., Cl. C†. . . . . . . . . . . . . . . . . .
Liberty Media Corp., Cl. A† . . . . . . . . . . . . . . . . . . . . . .
Liberty Media Corp., Cl. C† . . . . . . . . . . . . . . . . . . . . . .
M6 Metropole Television SA . . . . . . . . . . . . . . . . . . . . .
Media General Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Media Prima Berhad . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nippon Television Holdings Inc. . . . . . . . . . . . . . . . . . .
NRJ Group†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pandora Media Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RTL Group SA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Salem Media Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
Sinclair Broadcast Group Inc., Cl. A . . . . . . . . . . . . . .
Societe Television Francaise 1. . . . . . . . . . . . . . . . . . . .
Starz, Cl. A†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Television Broadcasts Ltd. . . . . . . . . . . . . . . . . . . . . . . .
Tokyo Broadcasting System Holdings Inc. . . . . . . . .
TV Azteca SA de CV, CPO† . . . . . . . . . . . . . . . . . . . . . . .
UTV Media plc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,686
1,000
6,000
21,500
4,000
400
Business Services — 0.9%
Contax Participacoes SA . . . . . . . . . . . . . . . . . . . . . . . . .
Convergys Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impellam Group plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
McGraw Hill Financial Inc. . . . . . . . . . . . . . . . . . . . . . . .
Monster Worldwide Inc.† . . . . . . . . . . . . . . . . . . . . . . . .
Qumu Corp.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,000
36,000
198,000
6,500
35,500
8,000
56,000
Cable — 13.4%
Altice SA† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AMC Networks Inc., Cl. A† . . . . . . . . . . . . . . . . . . . . . . .
Cablevision Systems Corp., Cl. A. . . . . . . . . . . . . . . . .
Charter Communications Inc., Cl. A† . . . . . . . . . . . . .
Cogeco Cable Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comcast Corp., Cl. A . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comcast Corp., Cl. A, Special . . . . . . . . . . . . . . . . . . . .
Market
Value
Shares
88,965
3,697,800
32,818
697,580
30,400
227,863
1,045,840
3,743,325
630,360
129,039
487,695
136,693
649,520
1,853,027
1,657,650
3,208,800
80,213
345,235
31,474
600,625
36,699
405,250
336,670
474,320
408,330
408,056
1,720,500
277,744
948,014
89,842
68,088
24,548,435
9,239
22,870
65,418
2,223,100
25,360
5,360
2,351,347
433,754
2,759,040
3,623,400
1,255,215
1,903,442
451,760
3,139,640
30,000
144,504
123,690
19,310
24,000
11,000
78,000
10,000
350,000
5,800
17,500
Liberty Global plc, Cl. A†. . . . . . . . . . . . . . . . . . . . . . . . . $
Liberty Global plc, Cl. C†. . . . . . . . . . . . . . . . . . . . . . . . .
Rogers Communications Inc., New York, Cl. B. . . .
Rogers Communications Inc., Toronto, Cl. B. . . . . .
Scripps Networks Interactive Inc., Cl. A . . . . . . . . . .
Shaw Communications Inc., New York, Cl. B . . . . .
Shaw Communications Inc., Toronto, Cl. B . . . . . . .
Silver Eagle Acquisition Corp.†. . . . . . . . . . . . . . . . . . .
Sky Deutschland AG†. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sky plc, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time Warner Cable Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
4,000
3,000
13,000
18,000
108,000
17,000
41,814
25,000
45,000
Consumer Services — 3.3%
Bowlin Travel Centers Inc.† . . . . . . . . . . . . . . . . . . . . . .
Expedia Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H&R Block Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IAC/InterActiveCorp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liberty Interactive Corp., Cl. A† . . . . . . . . . . . . . . . . . .
Liberty TripAdvisor Holdings Inc., Cl. A† . . . . . . . . .
Liberty Ventures, Cl. A†. . . . . . . . . . . . . . . . . . . . . . . . . .
The ADT Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TiVo Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,000
3,000
20,000
3,000
Diversified Industrial — 0.5%
Bouygues SA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fortune Brands Home & Security Inc. . . . . . . . . . . . .
Jardine Strategic Holdings Ltd. . . . . . . . . . . . . . . . . . .
Malaysian Resources Corp. Berhad. . . . . . . . . . . . . . .
19,000
Electronics — 0.3%
Dolby Laboratories Inc., Cl. A . . . . . . . . . . . . . . . . . . . .
19,000
259,500
24,500
4,000
5,300
5,000
88,000
20,000
18,000
52,000
Entertainment — 7.1%
Gogo Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Grupo Televisa SAB, ADR†. . . . . . . . . . . . . . . . . . . . . . .
Naspers Ltd., Cl. N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reading International Inc., Cl. A† . . . . . . . . . . . . . . . .
Reading International Inc., Cl. B† . . . . . . . . . . . . . . . .
Regal Entertainment Group, Cl. A . . . . . . . . . . . . . . . .
Sky plc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Societe d’Edition de Canal +. . . . . . . . . . . . . . . . . . . . . .
Take-Two Interactive Software Inc.† . . . . . . . . . . . . . .
The Madison Square Garden Co., Cl. A† . . . . . . . . . .
13,000
3,600
87,000
2,000
Equipment — 1.5%
American Tower Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amphenol Corp., Cl. A . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corning Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furukawa Electric Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . .
See accompanying notes to schedule of investments.
2
1,544,100
7,197,744
4,141,141
646,436
1,645,440
246,730
1,750,235
120,000
2,551,934
342,548
2,622,900
36,375,459
5,600
282,390
416,910
1,214,460
3,152,520
540,430
1,756,606
1,038,000
477,450
8,884,366
628,632
142,440
700,000
1,013
1,472,085
725,040
362,140
8,566,095
3,777,311
53,800
72,663
114,200
1,296,248
133,976
458,190
4,401,800
19,236,423
1,223,950
212,148
1,973,160
3,385
Schedule of Investments (Continued) — March 31, 2015 (Unaudited)
Market
Value
Shares
8,000
COMMON STOCKS (Continued)
DISTRIBUTION COMPANIES (Continued)
Equipment (Continued)
QUALCOMM Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
15,000
36,500
42,000
8,000
15,000
Financial Services — 1.1%
BCB Holdings Ltd.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kinnevik Investment AB, Cl. A. . . . . . . . . . . . . . . . . . . .
Kinnevik Investment AB, Cl. B. . . . . . . . . . . . . . . . . . . .
LendingTree Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waterloo Investment Holdings Ltd.† . . . . . . . . . . . . .
1,882
2,994
Food and Beverage — 0.1%
Compass Group plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pernod Ricard SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
200
36,000
3,000
15,000
10,000
Retail — 1.2%
Amazon.com Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Best Buy Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FTD Companies Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . .
HSN Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outerwall Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,000
40,000
94,000
54,000
29,000
15,000
40,000
15,400
250,000
3,000
2,000
Satellite — 6.1%
Asia Satellite Telecommunications Holdings Ltd.. .
DigitalGlobe Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIRECTV†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DISH Network Corp., Cl. A† . . . . . . . . . . . . . . . . . . . . . .
EchoStar Corp., Cl. A† . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intelsat SA† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Iridium Communications Inc.† . . . . . . . . . . . . . . . . . . .
Loral Space & Communications Inc.† . . . . . . . . . . . .
PT Indosat Tbk†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SKY Perfect JSAT Holdings Inc. . . . . . . . . . . . . . . . . . .
ViaSat Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,000
2,020
674
22,000
200,000
Telecommunications: Long Distance — 0.9%
AT&T Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BCE Inc., New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BCE Inc., Toronto. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Philippine Long Distance Telephone Co., ADR . . . .
Sprint Corp.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,000
5,000
61,000
16,000
Telecommunications: National — 4.7%
China Telecom Corp. Ltd., ADR . . . . . . . . . . . . . . . . . .
China Unicom Hong Kong Ltd., ADR . . . . . . . . . . . . .
Deutsche Telekom AG, ADR. . . . . . . . . . . . . . . . . . . . . .
Elisa Oyj . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market
Value
Shares
3,605
10,000
35,900
1,000
5,000
5,000
1,000
3,000
3,000
6,000
28,000
6,000
385,000
50,000
17,500
118,026
145,000
15,172
2,400
48,000
82,000
554,720
3,967,363
2,225
1,228,230
1,405,015
448,080
890
3,084,440
32,719
354,604
387,323
74,420
1,360,440
89,820
1,023,450
661,200
3,209,330
85,000
80,000
78,000
8,000
32,000
3,676
1,362,800
7,999,400
3,783,240
1,499,880
180,000
388,400
1,053,976
81,549
18,660
119,220
16,490,801
55,000
300,000
19,000
30,000
240,000
26,500
90,000
19,000
65,300
85,567
28,534
1,374,780
948,000
2,502,181
25,000
34,000
9,203
48,000
8,000
29,000
32,000
321,700
76,300
1,112,335
402,572
Hellenic Telecommunications Organization SA†. . . $
Inmarsat plc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Level 3 Communications Inc.† . . . . . . . . . . . . . . . . . . .
Magyar Telekom Telecommunications plc, ADR† .
Nippon Telegraph & Telephone Corp. . . . . . . . . . . . . .
Oi SA, ADR† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oi SA, Cl. C, ADR†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Orange SA, ADR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PT Telekomunikasi Indonesia Persero Tbk, ADR . .
Rostelecom OJSC, ADR . . . . . . . . . . . . . . . . . . . . . . . . .
Swisscom AG, ADR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecom Argentina SA, ADR. . . . . . . . . . . . . . . . . . . . . .
Telecom Italia SpA† . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecom Italia SpA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telefonica Brasil SA, ADR . . . . . . . . . . . . . . . . . . . . . . . .
Telefonica SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telekom Austria AG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TeliaSonera AB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telstra Corp. Ltd., ADR . . . . . . . . . . . . . . . . . . . . . . . . . .
Verizon Communications Inc. . . . . . . . . . . . . . . . . . . . .
VimpelCom Ltd., ADR . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications: Regional — 1.3%
Cincinnati Bell Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NII Holdings Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telephone & Data Systems Inc. . . . . . . . . . . . . . . . . . .
TELUS Corp., New York. . . . . . . . . . . . . . . . . . . . . . . . . .
TELUS Corp., Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wireless Communications — 3.8%
America Movil SAB de CV, Cl. L, ADR . . . . . . . . . . . .
Cable & Wireless Communications plc . . . . . . . . . . .
Global Telecom Holding, GDR†. . . . . . . . . . . . . . . . . . .
HC2 Holdings Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jasmine International Public Co. Ltd.. . . . . . . . . . . . .
Millicom International Cellular SA, SDR . . . . . . . . . .
NTT DoCoMo Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Orascom Telecom Media and Technology Holding
SAE, GDR† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ORBCOMM Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SK Telecom Co. Ltd., ADR . . . . . . . . . . . . . . . . . . . . . . .
Tim Participacoes SA, ADR . . . . . . . . . . . . . . . . . . . . . .
T-Mobile US Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Turkcell Iletisim Hizmetleri A/S, ADR† . . . . . . . . . . . .
United States Cellular Corp.†. . . . . . . . . . . . . . . . . . . . .
Vodafone Group plc, ADR. . . . . . . . . . . . . . . . . . . . . . . .
31,979
137,288
1,932,856
7,280
308,375
7,700
1,630
48,030
130,620
47,640
1,627,500
136,260
452,055
47,042
267,575
1,693,673
1,039,924
96,541
57,240
2,334,240
429,680
12,748,035
300,050
3,480
1,942,200
265,920
1,062,919
3,574,569
1,125,300
271,238
41,800
328,500
42,409
1,920,078
1,564,973
16,530
149,250
925,140
152,586
1,521,120
104,240
1,035,880
1,045,760
10,244,804
TOTAL DISTRIBUTION COMPANIES ............. 149,802,001
3
Market
Value
Shares
5,000
COPYRIGHT/CREATIVITY COMPANIES — 36.4%
Business Services — 0.0%
YuMe Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
148,000
15,000
6,000
10,000
8,000
1,500
8,000
115,000
5,400
Business Services: Advertising — 2.0%
Clear Channel Outdoor Holdings Inc., Cl. A . . . . . . .
Harte-Hanks Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Havas SA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JC Decaux SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lamar Advertising Co., Cl. A . . . . . . . . . . . . . . . . . . . . .
Publicis Groupe SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ströeer Media SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Interpublic Group of Companies Inc. . . . . . . . . .
Tiger Media Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37,500
Computer Hardware — 1.7%
Apple Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,000
14,000
50,000
95,000
78,000
70,000
51,000
4,600
2,800
16,000
65,000
10,000
12,000
7,000
40,000
170,000
Computer Software and Services — 11.0%
Activision Blizzard Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . .
AOL Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Blucora Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EarthLink Holdings Corp. . . . . . . . . . . . . . . . . . . . . . . . .
eBay Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electronic Arts Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Facebook Inc., Cl. A† . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Google Inc., Cl. A†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Google Inc., Cl. C†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guidance Software Inc.† . . . . . . . . . . . . . . . . . . . . . . . . .
Internap Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
InterXion Holding NV† . . . . . . . . . . . . . . . . . . . . . . . . . . .
Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
QTS Realty Trust Inc., Cl. A . . . . . . . . . . . . . . . . . . . . . .
RealD Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yahoo! Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,200
35,000
Consumer Products — 0.4%
Nintendo Co. Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nintendo Co. Ltd., ADR†. . . . . . . . . . . . . . . . . . . . . . . . .
5,000
Consumer Services — 0.0%
XO Group Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,000
8,000
3,331
213,000
Electronics — 2.3%
IMAX Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intel Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Koninklijke Philips NV . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sony Corp., ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market
Value
Shares
25,950
1,497,760
117,000
45,547
337,573
474,160
115,852
274,274
2,543,800
38,556
5,444,522
25,000
22,000
14,000
50,000
79,200
25,000
9,000
17,000
18,000
51,000
116,000
78,000
72,000
54,500
185,000
20,000
Entertainment — 9.4%
Ascent Capital Group Inc., Cl. A† . . . . . . . . . . . . . . . . . $
Crown Media Holdings Inc., Cl. A† . . . . . . . . . . . . . . .
DreamWorks Animation SKG Inc., Cl. A† . . . . . . . . .
Entravision Communications Corp., Cl. A . . . . . . . . .
GMM Grammy Public Co. Ltd.† . . . . . . . . . . . . . . . . . .
Live Nation Entertainment Inc.† . . . . . . . . . . . . . . . . . .
Rentrak Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STV Group plc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Walt Disney Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time Warner Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twenty-First Century Fox Inc., Cl. A . . . . . . . . . . . . . .
Twenty-First Century Fox Inc., Cl. B . . . . . . . . . . . . . .
Universal Entertainment Corp. . . . . . . . . . . . . . . . . . . .
Viacom Inc., Cl. A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vivendi SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
World Wrestling Entertainment Inc., Cl. A . . . . . . . .
148,000
900
10,163
4,200
135,000
15,000
250,000
38,000
125,000
33,000
22,000
6,000
84,000
5,100
21,000
Hotels and Gaming — 6.3%
Boyd Gaming Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Churchill Downs Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gaming and Leisure Properties Inc. . . . . . . . . . . . . . .
Greek Organization of Football Prognostics SA . . .
International Game Technology . . . . . . . . . . . . . . . . . .
Interval Leisure Group Inc.. . . . . . . . . . . . . . . . . . . . . . .
Ladbrokes plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Las Vegas Sands Corp. . . . . . . . . . . . . . . . . . . . . . . . . . .
Mandarin Oriental International Ltd. . . . . . . . . . . . . . .
Melco Crown Entertainment Ltd., ADR . . . . . . . . . . .
MGM China Holdings Ltd. . . . . . . . . . . . . . . . . . . . . . . .
Penn National Gaming Inc.† . . . . . . . . . . . . . . . . . . . . .
Ryman Hospitality Properties Inc. . . . . . . . . . . . . . . . .
Starwood Hotels & Resorts Worldwide Inc.. . . . . . .
Wynn Resorts Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,000
20,000
2,700
30,000
800
85,000
11,500
5,263
1,000,000
30,000
60,000
8,000
974,000
1,000
247,000
Publishing — 3.3%
AH Belo Corp., Cl. A . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arnoldo Mondadori Editore SpA† . . . . . . . . . . . . . . . .
Graham Holdings Co., Cl. B . . . . . . . . . . . . . . . . . . . . . .
Il Sole 24 Ore SpA†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John Wiley & Sons Inc., Cl. B . . . . . . . . . . . . . . . . . . . .
Journal Communications Inc., Cl. A† . . . . . . . . . . . . .
Meredith Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nation International Edutainment Public Co. Ltd. .
Nation Multimedia Group Public Co. Ltd.† . . . . . . . .
News Corp., Cl. A† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
News Corp., Cl. B† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nielsen NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Post Publishing Public Co. Ltd. . . . . . . . . . . . . . . . . . .
Scholastic Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Singapore Press Holdings Ltd. . . . . . . . . . . . . . . . . . . .
4,666,125
1,568,025
554,540
683,000
421,800
4,499,040
4,117,050
4,192,965
2,551,620
1,534,400
86,560
664,950
282,000
487,860
254,870
511,600
7,553,950
29,964,230
324,217
645,050
969,267
88,350
67,420
250,160
94,401
5,704,140
6,116,121
4
995,250
88,000
338,800
316,500
35,049
630,750
500,040
93,305
1,888,020
4,306,440
3,925,440
2,564,640
1,177,238
3,743,605
4,600,035
280,200
25,483,312
2,101,600
103,473
374,710
39,425
2,350,350
393,150
386,795
2,091,520
198,750
708,180
41,431
93,960
5,116,440
425,850
2,643,480
17,069,114
123,450
24,064
2,834,001
27,128
48,824
1,259,700
641,355
1,537
71,911
480,300
952,200
356,560
221,500
40,940
754,130
Market
Value
Shares
600
11,000
6,000
40,000
1,000
9,000
16,363
3,000
COPYRIGHT/CREATIVITY COMPANIES (Continued)
Publishing (Continued)
Spir Communication† . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Telegraaf Media Groep NV† . . . . . . . . . . . . . . . . . . . . . .
The E.W. Scripps Co., Cl. A† . . . . . . . . . . . . . . . . . . . . .
The McClatchy Co., Cl. A† . . . . . . . . . . . . . . . . . . . . . . .
Time Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tribune Media Co., Cl. A . . . . . . . . . . . . . . . . . . . . . . . . .
UBM plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wolters Kluwer NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL COPYRIGHT/CREATIVITY COMPANIES ...
Market
Value
TOTAL INVESTMENTS — 100.0%
(Cost $170,066,986) . . . . . . . . . . . . . . . . . . . . . . $271,502,526
8,909
63,515
170,640
73,600
22,440
547,290
128,403
98,062
8,950,459
Aggregate tax cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $172,473,415
Gross unrealized appreciation. . . . . . . . . . . . . . . . . . . . $108,094,150
Gross unrealized depreciation. . . . . . . . . . . . . . . . . . . .
(9,065,039)
Net unrealized appreciation/depreciation . . . . . . . . . $ 99,029,111
†
††
ADR
CPO
CVR
GDR
OJSC
SDR
98,777,450
TOTAL COMMON STOCKS . . . . . . . . . . . . . . . . . . . . . . . 248,579,451
25,000
31,250
1,000
Principal
Amount
RIGHTS — 0.0%
Wireless Communications — 0.0%
Leap Wireless International Inc., CVR,
expire 03/14/16†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-income producing security.
Represents annualized yield at date of purchase.
American Depositary Receipt
Ordinary Participation Certificate
Contingent Value Right
Global Depositary Receipt
Open Joint Stock Company
Swedish Depositary Receipt
63,000
COPYRIGHT/CREATIVITY COMPANIES — 0.0%
Hotels and Gaming — 0.0%
Mandarin Oriental International Ltd.,
expire 04/08/15†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,125
TOTAL RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,125
WARRANTS — 0.0%
Real Estate — 0.0%
Malaysian Resources Corp. Bhd, expire
09/19/18† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
% of
Total
Investments
Geographic Diversification
North America . . .
Europe. . . . . . . .
Japan . . . . . . . .
Latin America. . . .
Asia/Pacific . . . . .
South Africa . . . .
Africa/Middle East .
Total Investments .
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Market
Value
U.S. GOVERNMENT OBLIGATIONS — 8.4%
$22,855,000 U.S. Treasury Bills,
0.010% to 0.070%††,
04/16/15 to 08/20/15 . . . . . . . . . . . . . . . . . . . . . . . . . $22,851,900
5
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.
75.0%
13.3
4.2
3.9
2.2
1.4
0.0
100.0%
Market
Value
$203,576,002
36,083,181
11,416,460
10,529,812
6,061,431
3,777,310
58,330
$271,502,526
Notes to Schedule of Investments (Unaudited)
As an investment company, the Fund follows the investment company accounting and reporting guidance,
which is part of U.S. generally accepted accounting principles (“GAAP”) that may require the use of management
estimates and assumptions in the preparation of its schedule of investments. Actual results could differ from
those estimates. The following is a summary of significant accounting policies followed by the Fund in the
preparation of its schedule of investments.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded
in the U.S. over-the-counter market for which market quotations are readily available are valued at the last
quoted sale price or a market’s official closing price as of the close of business on the day the securities are
being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked
prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price
on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently
available price or, if the Board of Directors (the “Board”) so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national
securities exchange or market are valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the “Adviser”).
Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values
of such securities on the relevant market, but may be fair valued pursuant to procedures established by the
Board if market conditions change significantly after the close of the foreign market, but prior to the close of
business on the day the securities are being valued. Debt instruments with remaining maturities of sixty days
or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount
does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by
the Board. Debt instruments having a maturity greater than sixty days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted
on such day, the security is valued using the closing bid price. U.S. government obligations with maturities
greater than sixty days are normally valued using a model that incorporates market observable data such as
reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities
are valued principally using dealer quotations.
Securities and assets for which market quotations are not readily available are fair valued as determined by
the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review
of available financial and non-financial information about the company; comparisons with the valuation and
changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S.
dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any
other information that could be indicative of the value of the security.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized
into three levels as described in the hierarchy below:
• Level 1 — quoted prices in active markets for identical securities;
• Level 2 — other significant observable inputs (including quoted prices for similar securities, interest
rates, prepayment speeds, credit risk, etc.); and
• Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value
of investments).
6
Notes to Schedule of Investments (Unaudited) (Continued)
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both
individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology
used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The summary of the Fund’s investments in securities and other financial instruments by inputs used to value
the Fund’s investments as of March 31, 2015 is as follows:
Level 1
Quoted Prices
INVESTMENTS IN SECURITIES:
ASSETS (Market Value):
Common Stocks:
Distribution Companies
Broadcasting
Financial Services
Wireless Communications
Other Industries (a)
Copyright/Creativity Companies
Publishing
Other Industries (a)
Total Common Stocks
Rights (a)
Warrants:
Broadcasting
U.S. Government Obligations
TOTAL INVESTMENTS IN SECURITIES –
ASSETS
(a)
Valuation Inputs
Level 2 Other Significant
Observable Inputs
Level 3 Significant
Unobservable Inputs
Total Market Value
at 3/31/15
—
—
42,409
—
$129,039
890
—
—
$ 24,548,435
3,084,440
10,244,804
111,924,322
8,657,048
89,826,991
248,113,702
—
293,411
—
335,820
—
—
—
129,929
71,125
8,950,459
89,826,991
248,579,451
71,125
50
—
—
22,851,900
—
—
50
22,851,900
$248,113,752
$23,187,720
$201,054
$271,502,526
$ 24,419,396
3,083,550
10,202,395
111,924,322
$
Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings.
The Fund did not have material transfers among Level 1, Level 2, and Level 3 during the period ended March 31, 2015.
The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.
Additional Information to Evaluate Qualitative Information.
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with
the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities
not valued by these and other recognized pricing sources. Several different pricing feeds are received to value
domestic equity securities, international equity securities, preferred equity securities, and fixed income securities.
The data within these feeds is ultimately sourced from major stock exchanges and trading systems where these
securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction
prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be
sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common and preferred equities, warrants, options, rights,
and fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are
not available, such as securities not traded for several days, or for which current bids are not available, or
which are restricted as to transfer. Among the factors to be considered to fair value a security are recent prices
of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of
valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding
factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in
7
Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation
measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures.
These include back testing the prices realized in subsequent trades of these fair valued securities to fair values
previously recognized.
Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing
in a number of derivative financial instruments for the purposes of hedging or protecting its exposure to interest
rate movements and movements in the securities markets, hedging against changes in the value of its portfolio
securities and in the value of securities it intends to purchase, or hedging against a specific transaction with
respect to either the currency in which the transaction is denominated or another currency. Investing in certain
derivative financial instruments, including participation in the options, futures, or swap markets, entails certain
execution, liquidity, hedging, tax, and securities, interest, credit, or currency market risks. Losses may arise if
the Adviser’s prediction of movements in the direction of the securities, foreign currency, and interest rate
markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under a contract,
or that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other
contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely
monitored in order to minimize these risks. Participation in derivative transactions involves investment risks,
transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies.
The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s
ability to pay distributions.
Limitations on the Purchase and Sale of Futures Contracts, Certain Options, and Swaps. Subject to the
guidelines of the Board, the Fund may engage in “commodity interest” transactions (generally, transactions in
futures, certain options, certain currency transactions, and certain types of swaps) only for bona fide hedging
or other permissible transactions in accordance with the rules and regulations of the Commodity Futures Trading
Commission (“CFTC”). Pursuant to amendments by the CFTC to Rule 4.5 under the Commodity Exchange
Act (“CEA”), the Adviser has filed a notice of exemption from registration as a “commodity pool operator” with
respect to the Fund. The Fund and the Adviser are therefore not subject to registration or regulation as a
commodity pool operator under the CEA. In addition, certain trading restrictions are now applicable to the Fund
as of January 1, 2013. These trading restrictions permit the Fund to engage in commodity interest transactions
that include (i) “bona fide hedging” transactions, as that term is defined and interpreted by the CFTC and its
staff, without regard to the percentage of the Fund’s assets committed to margin and options premiums and
(ii) non-bona fide hedging transactions, provided that the Fund does not enter into such non-bona fide hedging
transactions if, immediately thereafter, either (a) the sum of the amount of initial margin deposits on the Fund’s
existing futures positions or swaps positions and option or swaption premiums would exceed 5% of the market
value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on any
such transactions, or (b) the aggregate net notional value of the Fund’s commodity interest transactions would
not exceed 100% of the market value of the Fund’s liquidating value, after taking into account unrealized profits
and unrealized losses on any such transactions. Therefore, in order to claim the Rule 4.5 exemption, the Fund
is limited in its ability to invest in commodity futures, options, and certain types of swaps (including securities
futures, broad based stock index futures, and financial futures contracts). As a result, in the future, the Fund
8
will be more limited in its ability to use these instruments than in the past, and these limitations may have a
negative impact on the ability of the Adviser to manage the Fund, and on the Fund’s performance.
Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign
currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange
rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange
rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes
in foreign exchange rates and/or changes in market prices of securities have been included in unrealized
appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains
and losses resulting from changes in exchange rates include foreign currency gains and losses between trade
date and settlement date on investment securities transactions, foreign currency transactions, and the difference
between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually
received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between
the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments.
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of
foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The
risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information
about companies, and possible future adverse political and economic developments. Moreover, securities of
many foreign issuers and their markets may be less liquid and their prices more volatile than securities of
comparable U.S. issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation,
a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based
upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted Securities. The Fund may invest up to 15% of its net assets in securities for which the markets
are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual
restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges
or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national
securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than
similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional
investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards
established by the Board. The continued liquidity of such securities is not as well assured as that of publicly
traded securities, and accordingly the Board will monitor their liquidity. The Fund held no restricted securities
at March 31, 2015.
Tax Information. The Fund intends to continue to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended.
9
Rye, NY 10580-1422
Portfolio Management Team Biographies
Mario J. Gabelli, CFA, is Chairman and Chief Executive Officer of GAMCO Investors, Inc. that he founded in
1977 and Chief Investment Officer – Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc.
Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia
Business School and Honorary Doctorates from Fordham University and Roger Williams University.
Christopher J. Marangi joined Gabelli in 2003 as a research analyst. He currently serves as a portfolio manager
of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Fund Complex. Mr. Marangi graduated
magna cum laude and Phi Beta Kappa with a BA in Political Economy from Williams College and holds an MBA
with honors from Columbia Business School.
Lawrence J. Haverty, Jr., CFA, joined GAMCO Investors, Inc. in 2005 and currently is a portfolio manager of
Gabelli Funds, LLC and the Fund. Mr. Haverty was previously a managing director for consumer discretionary
research at State Street Research, the Boston based subsidiary of Metropolitan Life Insurance Company. He holds
a BS from the Wharton School and a MA from the Graduate School of Arts and Sciences at the University of
Pennsylvania where he was a Ford Foundation Fellow.
We have separated the portfolio managers’ commentary from the financial statements and investment portfolio due to
corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the
content of the portfolio managers’ commentary is unrestricted. Both the commentary and the financial statements, including
the portfolio of investments, will be available on our website at www.gabelli.com.
The Net Asset Value per share appears in the Publicly Traded Funds column, under the heading “Specialized
Equity Funds,” in Monday’s The Wall Street Journal. It is also listed in Barron’s Mutual Funds/Closed End Funds
section under the heading “Specialized Equity Funds.”
The Net Asset Value per share may be obtained each day by calling (914) 921-5070 or visiting www.gabelli.com.
The NASDAQ symbol for the Net Asset Value is “XGGTX.”
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the
Fund may from time to time, purchase its common shares in the open market when the Fund’s shares are trading at a
discount of 5% or more from the net asset value of the shares. The Fund may also, from time to time, purchase its
preferred shares in the open market when the preferred shares are trading at a discount to the liquidation value.
t 800-GABELLI (800-422-3554)
f 914-921-5118
e [email protected]
GABELLI.COM
DIRECTORS
OFFICERS
Chairman &
Bruce N. Alpert
President
Anthony J. Colavita
President,
Anthony J. Colavita, P.C.
James P. Conn
Former Managing Director &
Chief Investment Officer,
Financial Security Assurance
Holdings Ltd.
Frank J. Fahrenkopf, Jr.
Former President &
American Gaming Association
Senior Vice President,
G.research, Inc.
Kuni Nakamura
President,
Advanced Polymer, Inc.
Anthony R. Pustorino
Certified Public Accountant,
Professor Emeritus,
Pace University
Werner J. Roeder, MD
Medical Director,
Lawrence Hospital
Salvatore J. Zizza
Chairman,
Zizza & Associates Corp.
GGT Q1/2015
Andrea R. Mango
Secretary & Vice President
Agnes Mullady
Treasurer
Richard J. Walz
Chief Compliance Officer
THE
GABELLI
MULTIMEDIA
TRUST INC.
Carter W. Austin
Laurissa M. Martire
INVESTMENT ADVISER
GGT
Gabelli Funds, LLC
CUSTODIAN
State Street Bank and Trust
Company
COUNSEL
Paul Hastings LLP
TRANSFER AGENT AND
REGISTRAR
Computershare Trust Company, N.A.
First Quarter Report
March 31, 2015

The Gabelli Multimedia Trust Inc.

Transcription

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