The Gabelli Dividend & Income Trust

Transcription

Shareholder Commentary – March 31, 2015
(Y)our Portfolio Management Team
Mario J. Gabelli, CFA Christopher J. Marangi Barbara G. Marcin, CFA Robert D. Leininger, CFA Jeffrey J. Jonas, CFA Kevin V. Dreyer
To Our Shareholders,
For the quarter ended March 31, 2015, the net asset value (“NAV”) total return of The Gabelli Dividend
& Income Trust (the “Fund”) was 1.5%, compared with a total return of 1.0% for the Standard & Poor’s (“S&P”)
500 Index. The total return for the Fund’s publicly traded shares was (0.8)%. The Fund’s NAV per share was
$23.62, while the price of the publicly traded shares closed at $21.19 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
(11/28/03)
———–——
Gabelli Dividend & Income Trust
NAV Total Return (b) . . . . . . . . . . . . . . . . . . . . . . . . .
1.51%
7.04%
14.63%
8.44%
8.62%
Investment Total Return (c) . . . . . . . . . . . . . . . . . .
(0.79)
7.54
16.54
9.50
8.06
S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.95
12.73
14.47
8.01
8.29
Dow Jones Industrial Average . . . . . . . . . . . . . . . . . . . . .
0.33
10.50
13.16
8.13
8.10(d)
Nasdaq Composite Index . . . . . . . . . . . . . . . . . . . . . . . . .
3.85
18.24
16.82
10.58
9.64
(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 Dow Jones Industrial Average is an unmanaged index of 30 large capitalization stocks. The
S&P 500 and the Nasdaq Composite Indices are unmanaged indicators of stock market performance. Dividends are
considered reinvested except for the Nasdaq Composite 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 spin-off, and are net of expenses. Since inception return is based on an initial NAV of
$19.06.
(c) Total returns and average annual returns reflect changes in closing market values on the NYSE and reinvestment
of distributions and spin-off. Since inception return is based on an initial offering price of $20.00.
(d) From November 30, 2003, the date closest to the Fund’s inception for which data is available.
During the first quarter of 2015, four of the ten industry groups in the S&P 500 Index declined. The utilities,
the financials, and the industrials fell, as investors priced in the effect of an eventual Federal Reserve interest
rate hike on these rate sensitive sectors. Energy also fell, continuing the losses as investors priced in a “lower
for longer” price in oil. The two best performing sectors were healthcare and consumer discretionary stocks, as
announced merger and acquisition deals surged in these two sectors, and increased the optimism around their
prospects.
Dividends continue to increase, as corporate earnings are strong, although their rate of increase has
slowed in the past few years. According to Standard & Poor’s, dividends declared in the first quarter of 2015
rose almost 15% over the first quarter of last year.
The Economy and Markets
The March employment report surprised on the downside, with 126,000 jobs created. Other than this
report, March data in general had been trending stronger after a weak February, showing improvement in the
Purchasing Manager Index, unemployment claims, improved housing activity, and higher vehicle sales.
Nevertheless, this weak March figure, along with a downward revision in February, reset the three month
moving average of jobs created down to 197,000, showing a sharp deceleration in hiring in the first quarter
from the fourth quarter.
Some of the hit taken by economic growth in the first quarter could be due to temporary factors, such as
the West Coast port strike and a tough winter in much of the country. There is no question that bad weather
conditions hampered business activity, so some of the lost economic activity in the first quarter could be shifted
into the second quarter. Nevertheless, the surprise weak employment of March means we will have to wait to
see if the economy rebounds in the next month or two.
On a positive note, Walmart announced that, in April, 500,000 full time and part time workers, more than
a third of the workforce at its U.S. Walmart and Sam’s Club’s stores, would receive pay raises to at least $9 an
hour. This is $1.75 above the federal minimum wage; at the same time, the company announced that by next
February 1, their pay will go up to at least $10 an hour.
Walmart joined other companies in raising wages, such as Banana Republic and Ikea, followed by
McDonald’s, which announced that it will soon raise the starting pay for employees by $1.00 over local
minimum wage rates. According to McDonald’s, this will bring average hourly wages of covered employees to
$9.90 by July 1 of this year and to more than $10 by the end of 2016. This only applies to employees of the
public company, while the majority of McDonald’s workers are in their franchised stores. However, we are
starting to see some wage improvement.
Since 2010, median incomes have risen for only the wealthiest 10% of households, according to a
Federal Reserve survey. This sluggishness in incomes explains why many Americans remain downbeat about
the economy, although some confidence has come from improvement in housing values and record stock
prices. Further, there is concern that there is tremendous slack in the workforce, with a large pool of
discouraged and long term unemployed workers.
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Looking Ahead
Two dramatic changes, in the strength of the dollar and the price of oil, are having a visible effect on the
economy. The trade weighted dollar is up 15% since July of last year. This, along with the 50% drop in the price
of oil from last June, contributed to the weak manufacturing payroll numbers of the first quarter, as well as
weaker exports and durable goods orders.
Oil is still gushing in the United States, despite the fact that much of the production is not profitable at
these prices. U.S. oil production rose to a record 9.4 million barrels a day at the end of the first quarter,
compared to 8.2 million barrels a day at the end of March last year. This reflects the lead time and sunk costs
involved in oil production and the huge increases in activity that were in motion when the dramatic fall in the
price of oil surprised everyone last year. This booming crude production has swollen the inventory of stored oil
to a record 471 million barrels, implying lower prices for a longer period of time.
The question is – how long will today’s low oil price last? It could be that the price will remain low until
actual production is cut, not only expenses, and today, this is not on track to occur until late 2015 or early 2016.
The reason is that, while oil capital expenditures are being cut, there is enough new production that has been
completed in the last six months that cannot be halted, so we are still on track to produce more next year than
this year. Even then, with a few thousand partly completed fracking wells in the U.S. that can be restarted at
low cost, any price rise may quickly bring supply back. It is possible that low and volatile prices will persist for
a few years.
On balance, the decline in the price of oil is expected to give the economy a boost this year, although so
far consumers have generally saved the money not spent on fuel rather than spending it. It is not an
unambiguous save, though, with strong job cuts in the first quarter in the oil and gas industry expected to
continue and to have a domino effect on other industries in the oil states, such as housing and retail.
If economic growth in the next couple of years remains subdued, which is the expectation, then it would
be unlikely that U.S. interest rates can rise against this background. The German 10-year government bond
yield continues to make record lows, falling under 0.2%, an astonishing and record low rate. The Japanese
bond yield and those of other eurozone government bonds are also extremely low, with Japan, France, and
Sweden at 0.4%; Italy and Spain at 1.2%; and Switzerland at an astonishing negative 0.05%, so that Swiss
bond holders pay the government in order to hold this paper.
Investors are still very skeptical of value in the stock market, as evidenced by the $11 billion they pulled
out of equity funds in the first quarter while piling $48 billion into bond funds.
One result of the Federal Reserve’s zero rate policy has been to erase any possibility of returns from fixed
income, and push investors into stocks. There is a case to be made that this environment will continue for a
much longer period of time. Certainly there appears to be no threat of inflation, with weak global economies,
the globalization of wages, and excess capacity making for little pricing power.
The longer the near zero interest rates last, the lower the discount rate will be for equities and the long
term cap rates for real estate. The price earnings ratio of equities is the inverse of the discount rate, and if these
low rates hold in our slow growth world, then the market multiple will continue to climb, just as it has over the
past year, from a trailing multiple of 15 to 17.5 now. A higher multiple on the market provides no clue as to stock
market performance over the next couple of years, but it does say something about the value that investors will
realize over the next three to five years. As value investors, we look to buy companies with a margin of safety
in their valuation, particularly when the market multiple climbs above its long term average.
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Investment Scorecard
The top contributor to performance in the Fund in the first quarter was our position in food company Kraft,
which agreed to be acquired by Heinz, which is owned by Berkshire Hathaway and 3G Capital. Other strong
contributors to performance in the first quarter were Apple Computer, Weatherford International, and our former
holding in Allergan, which was acquired by Actavis in March, in a deal that was announced in November.
The contribution to performance is a function of the position’s size and its gains in the quarter. Other
positions in the Fund, which were not quite as large but which had strong double digit gains, were Sony,
Boeing, Macquarie Infrastructure, and Walgreens.
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.
Actavis plc (ACT – $297.62 – NYSE), headquartered in Dublin, Ireland, is a top ten global pharmaceutical
company. Through a series of aggressive acquisitions, including the recently completed purchase of Allergan
for $70 billion, Actavis has transformed from a U.S.-based generic drug company to a global leader in specialty
pharmaceuticals, with key brands including Botox, Restasis for dry eye, and Namenda for Alzheimer’s disease.
American International Group Inc. (AIG – $54.79 – NYSE) is a multi-line insurance company, with property and
casualty and also life insurance, serving customers in more than 130 countries and jurisdictions. Their annuity
and private mortgage insurance businesses have good growth prospects. The company is well positioned for
the next few years, as it has excess capital, sophisticated products, and broad global distribution. In addition,
the company is committed to returning capital to shareholders with dividends and share buybacks. We believe
it can increase these capital returns to shareholders, given greater stability of the business lines.
The Bank of New York Mellon Corp. (BK – $40.24 – NYSE) is a global leader in providing financial services to
institutions and individuals. The company operates in more than one hundred markets worldwide, and strives
to be the global provider of choice for investment management and investment services. As of December 2014,
the firm had $28.5 trillion in assets under custody and $1.7 trillion in assets under management. Going forward,
we expect BNY Mellon to benefit from rising global incomes and the cross border movement of financial
transactions. BNY is also well positioned to grow earnings in a rising interest rate environment, given its large
customer cash deposits and significant loan book.
Dr Pepper Snapple Group Inc. (DPS – $78.48 – NYSE), headquartered in Plano, TX, is the third largest soft
drink company in the U.S., with an estimated 17% share of the U.S. retail carbonated soft drink (“CSD”) market
and the number one position in the premium ready-to-drink tea market with its Snapple brand. In 2014, 88%
of DPS’ $6.1 billion in total sales were generated in the U.S., 8% in Mexico and the Caribbean, and the
remaining 4% in Canada. We believe DPS is well positioned to gain share in the U.S. flavored CSDs category,
where it has a leading 40% share (in measured channels), through superior product innovation and improved
distribution of its leading brands: Dr Pepper, Sunkist, 7Up, A&W, Canada Dry, Schweppes, and Crush, among
others. Since going public in May of 2008, DPS has delivered solid results despite a difficult operating
environment, and has repurchased sixty million, or nearly 25%, of its initial 254.4 million total shares
outstanding through the end of 2014.
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Genuine Parts Co. (GPC – $93.19 – NYSE) is an Atlanta based distributor of automotive and industrial
replacement parts, office products, and electrical and electronic components. We expect GPC’s well known
NAPA Auto Parts group to benefit as an aged vehicle population, which includes the highest percentage of off
warranty vehicles in history, helps drive sales of automotive aftermarket products over the next several years.
Additionally, economic indicators remain supportive of the company’s industrial and electrical parts distribution
businesses amid steady economic expansion. Finally, GPC’s management has shown consistent dedication to
shareholder value via share repurchases and dividend increases.
Kraft Foods Group Inc. (KRFT – $87.12 – NASDAQ), based in Northfield, Illinois, is the North American grocery
business of Kraft Foods Inc., which was separated through a tax-free spin-off to shareholders on October 1,
2012. As a result, shareholders received one share of Kraft Foods Group Inc. (KRFT) for every three shares
of Kraft Foods Inc. (KFT) common stock, which was subsequently renamed Mondelēz International Inc.
(MDLZ). Kraft Foods Group is comprised of the North American grocery operations, excluding the snack
businesses, which generated approximately $18.2 billion of revenue from leading brands, such as Maxwell
House coffee, Oscar Mayer meats, Jell-O desserts, Cool Whip toppings, and Cracker Barrel, Kraft, Polly-O,
and Velveeta cheeses. On March 25, 2015, the H.J. Heinz Company and Kraft signed a definitive agreement
to merge and form the Kraft Heinz Company. Accordingly, shareholders of Kraft will receive a $16.50 per share
special dividend and 49% ownership of the newly formed company, which will be the third largest food and
beverage company in North America and the fifth largest globally. The remaining 51% will be owned by current
Heinz shareholders, 3G Capital, and Berkshire Hathaway.
Medtronic plc (MDT – $77.99 – NYSE) cemented its position as the largest manufacturer of medical devices
in the world with its recent $50 billion acquisition of Covidien. This deal, structured as a tax inversion, should
both improve the company’s growth rate and give it better access to its global cash flow. Meanwhile, Medtronic
is accelerating its own growth rate through improved management execution and a full pipeline of new heart
valves, drug coated balloons, and defibrillators. Medtronic will be the partner of choice for hospitals going
forward, and the Covidien deal will allow the company to continue to return at least 50% of its cash flow to
shareholders via share buybacks and dividends.
Mondele-z International Inc. (MDLZ – $36.09 – NASDAQ), headquartered in Deerfield, Illinois, is the new name
of Kraft Foods Inc. following the tax-free spin-off to shareholders of the North American grocery company, Kraft
Foods Group Inc. (KRFT). Post spin, approximately 75% of Mondelēz’s revenue is generated from the snack
business, which includes leading brands such as Oreo, LU, and Ritz biscuits, Trident gum, and Cadbury and
Milka chocolates, while the remaining 25% consists of the international packaged food business, primarily
coffee and powdered beverages. In May 2014, Mondelēz announced that it is contributing its coffee business
with D.E Master Blenders 1753 to form a new coffee company, Jacobs Douwe Egberts, in return for $5 billion
of net proceeds and a 49% stake. This narrows the company’s product focus, as only 15% of revenue will be
outside of snacks, mostly Tang beverages and other products such as Philadelphia cream cheese, which
management may look to divest in the future as it executes on its plan to accelerate growth and improve
margins in the faster-growing snack business.
Pfizer Inc. (PFE – $34.79 – NYSE), headquartered in New York City, is one of the world’s largest research
based pharmaceutical companies, with sales of $49.6 billion in 2014. Pfizer’s recognized drugs include Lipitor,
Celebrex, Lyrica, and Viagra. The company also offers consumer healthcare products, including Advil,
Centrum, ChapStick, Emergen-C, and Robitussin. The company has reorganized with the formation of three
internal business segments. Two of the segments will comprise the company’s innovative business segments:
one focused on drugs with exclusivity beyond 2015, in areas including inflammation, pain, rare diseases, and
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cardiovascular, and the second focused on vaccines, oncology, and consumer health. The third segment is
comprised of PFE’s value business sector, which includes the company’s generic drugs and legacy branded
products that have lost exclusivity. This change in the company’s business model could lead to further financial
engineering opportunities in the coming years. In February 2015, Pfizer agreed to acquire Hospira for
$17 billion, which will expand the company’s presence in the hospital market.
Verizon Communications Inc. (VZ – $48.63 – NYSE) is one of the world’s leading telecommunications services
companies. On February 21, 2014, VZ completed acquisition of Vodafone’s 45% indirect interest in Verizon
Wireless (VZW), in a transaction valued at approximately $130 billion. VZW is the largest mobile operator in
the U.S., with over 108 million retail customers. VZW participated in the FCC Spectrum Auction 97 that
concluded on January 29, 2015. The company won a total of 181 AWS-3 spectrum licenses with an aggregate
bid price of $10.4 billion. These licenses are in markets covering 192 million POPs, or 61% of the U.S. In early
February 2015, VZ entered into two transactions that should help finance the above auction bid: VZ agreed to
lease the rights to over 11,300 of its company owned wireless towers to American Tower, which will also
purchase approximately 165 Verizon towers, for a total upfront payment of approximately $5 billion (the
transaction is expected to close by mid-2015); and, Verizon agreed to sell its local wireline operations, serving
customers in California, Florida, and Texas, to Frontier Communications, for approximately $10.5 billion (the
deal is expected to close in the first half of 2016). Concurrent with the above transactions, VZ also announced
a $5 billion accelerated share repurchase program.
In Conclusion
We invest in companies, some of which are noted above in our "Let's Talk Stocks" section, to participate
in the growth of their earnings and cash flow. We look for those companies that we believe will continue to
return cash flow to shareholders, not only through dividends, but also through reinvestment in their businesses,
resulting in greater cash flow and earnings and higher share price valuation. Further, we look to build a steady
component of not only current return from dividend yields, but also a rising dividend payout from most of our
portfolio, in order to contribute to the performance of the Fund.
April 17, 2015
Top Ten Holdings
March 31, 2015
Verizon Communications Inc.
American International Group Inc.
Wells Fargo & Co.
Honeywell International Inc.
CVS Health Corp.
JPMorgan Chase & Co.
The Bank of New York Mellon Corp.
American Express Co.
Genuine Parts Co.
General Mills Inc.
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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 Share Repurchase Plan
On May 12, 2004, the Board of Trustees 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 7.5% or more from NAV. In total through March 31, 2015, the Fund has repurchased and retired 2,288,727
common shares in the open market under this share repurchase plan at an average investment of $16.36 per
share and an average discount of approximately 14% from its NAV. The Fund did not repurchase any shares
during the first quarter of 2015.
Monthly Distribution Policy for Common Shareholders
Pursuant to its distribution policy, the Fund paid $0.10 per share cash distributions on January 23, 2015,
February 20, 2015 and March 24, 2015, to common shareholders of record on January 15, 2015, February 12,
2015 and March 17, 2015, for a total distribution of $0.30 per share during the first quarter of 2015. The Board
has reaffirmed the continuation of the Fund’s monthly distribution policy for the second quarter of 2015.
Under the Fund’s distribution policy, the Fund intends to pay a fixed monthly cash distribution (currently
$0.10 per share per month), and, if necessary, an adjusting distribution in December which includes any
additional income and realized net capital gains in excess of the monthly distributions for that year to satisfy
the minimum distribution requirements of the Internal Revenue Code.
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. Despite the challenges of the extra recordkeeping, a
distribution that incorporates a return of capital serves as a smoothing mechanism resulting in a more stable
and consistent cash flow available to shareholders.
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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, each of the distributions paid to common shareholders in 2015 would
include approximately 13% from net investment income, 38% from net capital gains, and 49% 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.
5.875% Series A and 6.00% Series D Cumulative Preferred Shares
The Fund’s 5.875% Series A and 6.00% Series D Cumulative Preferred Shares paid $0.3671875 and
$0.375 per share cash distributions, respectively, on March 26, 2015 to preferred shareholders of record on
March 19, 2015. These Preferred Shares, which trade on the NYSE under the symbols “GDV Pr A” and “GDV
Pr D”, respectively, are rated “Aa3” by Moody’s Investors Service and have annual dividend rates of $1.46875
and $1.50 per share, respectively. The Series A and Series D Preferred Shares were issued on October 12,
2004 and November 3, 2005, respectively, at $25.00 per share and pay distributions quarterly. After five years
of call protection, these Preferred Shares became callable at any time at the liquidation value of $25.00 per
share plus accrued dividends. The next distributions are scheduled for June 2015. The Fund is authorized to
repurchase these 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 151,981 Series A and 57,704 Series D Preferred Shares in the open market under this
share repurchase authorization. The Fund did not repurchase any of these Preferred Shares during the first
quarter of 2015.
Series B, Series C, and Series E Auction Market/Rate Cumulative Preferred Shares
During the first quarter of 2015, the dividend rates for the Series B and Series C Auction Market and
Series E Auction Rate Cumulative Preferred Shares ranged from 1.633% to 1.641% and 1.634% to 1.644%,
and 2.634% to 2.642%, respectively. Dividend rates for the Series B, Series C, and Series E Preferred Shares
may be reset every seven days based on the results of an auction. Since February 2008, the number of Series
B, Series C, and Series E 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 B, Series C, and Series E 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 for Series B and
Series C Preferred Shares was 150 basis points greater than the seven day Telerate/British Bankers
Association LIBOR and for Series E Preferred Shares was 250 basis points greater than the referenced LIBOR
rate. The Series B, Series C, and Series E Preferred Shares are rated “Aa3” by Moody’s Investors Service and
“AA” by Fitch Ratings. The Series B, Series C, and Series E Preferred Shares do not trade on an exchange.
The Fund issued 4,000 Series B and 4,800 Series C Preferred Shares on October 12, 2004 and 5,400 Series
E Preferred Shares on November 3, 2005 at $25,000 per share. As of March 31, 2015, 3,600, 4,320, and 4,860
Series B, Series C, and Series E Preferred Shares, respectively, were outstanding.
8
The Board shares the Investment Adviser’s view that the issuance of the Preferred Shares is designed to
benefit the common shareholders. To the extent that the Fund earns in excess of the dividend rate on the
Preferred Shares, 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 include approximately
25% from net investment income and 75% 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 20154 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.
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
e-mail 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.
9
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 “General
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 “General 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 “XGDVX.”
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 7.5% 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.
THE GABELLI DIVIDEND & INCOME TRUST
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.
Barbara G. Marcin, CFA, joined GAMCO Investors, Inc. in 1999 and currently serves as a portfolio manager
of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Funds Complex. Prior to joining
GAMCO, Ms. Marcin was head of value investments at Citibank Global Asset Management. Ms. Marcin
graduated with Distinction as an Echols Scholar from the University of Virginia and holds an MBA degree from
Harvard University’s Graduate School of Business.
Robert D. Leininger, CFA, joined GAMCO Investors, Inc. in 1993 as an equity analyst. Subsequently, he was
a partner and portfolio manager at Rorer Asset Management before rejoining GAMCO in 2010 where he
currently serves as a portfolio manager of Gabelli Funds, LLC and co-manages the Fund. Mr. Leininger is a
magna cum laude graduate of Amherst College with a degree in Economics and holds an MBA from the
Wharton School at the University of Pennsylvania.
Jeffrey J. Jonas, CFA, joined Gabelli in 2003 as a research analyst. He focuses on companies in the
cardiovascular, healthcare services, and pharmacy benefits management sectors, among others. He also
serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO
Funds Complex. Mr. Jonas was a Presidential Scholar at Boston College, where he received a BS in Finance
and Management Information Systems.
Kevin V. Dreyer joined Gabelli in 2005 as a research analyst covering companies within the consumer sector.
He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the
Gabelli/GAMCO Funds Complex. Mr. Dreyer received a BSE from the University of Pennsylvania and an MBA
from Columbia Business School.
This report is printed on recycled paper.
T H E G A B E L L I D I V I D E N D & I N CO M E T R U ST
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
TRUSTEES
OFFICERS
Mario J. Gabelli, CFA
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
Mario d’Urso
Former Italian Senator
Laurissa M. Martire
Vice President & Ombudsman
Frank J. Fahrenkopf, Jr.
Former President &
American Gaming Association
David I. Schachter
Vice President
Carter W. Austin
Gabelli Funds, LLC
Rye, New York 10580-1422
Salvatore M. Salibello, CPA
Former Partner,
BDO Seidman, LLP
CUSTODIAN
Anthonie C. van Ekris
Chairman,
BALMAC International, Inc.
Salvatore J. Zizza
Chairman,
Zizza & Associates Corp.
G DV M a r/2 0 1 5
G DV
INVESTMENT ADVISER
Michael J. Melarkey
Partner,
Avansino, Melarkey, Knobel,
Mulligan & McKenzie
Edward T. Tokar
Senior Managing Director,
Beacon Trust Company
THE
GABELLI
DIVIDEND
& INCOME
TRUST
State Street Bank and Trust
Company
COUNSEL
Skadden, Arps, Slate, Meagher &
Flom LLP
TRANSFER AGENT AND
REGISTRAR
Computershare Trust Company, N.A.
Shareholder Commentary
March 31, 2015
First Quarter Report — March 31, 2015
(Y)our Portfolio Management Team
Mario J. Gabelli, CFA Christopher J. Marangi Barbara G. Marcin, CFA Robert D. Leininger, CFA Jeffrey J. Jonas, CFA Kevin V. Dreyer
To Our Shareholders,
For the quarter ended March 31, 2015, the net asset value (“NAV”) total return of The Gabelli Dividend
& Income Trust (the “Fund”) was 1.5%, compared with a total return of 1.0% for the Standard & Poor’s (“S&P”)
500 Index. The total return for the Fund’s publicly traded shares was (0.8)%. The Fund’s NAV per share was
$23.62, while the price of the publicly traded shares closed at $21.19 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)
Since
Inception
(11/28/03)
Quarter 1 Year 5 Year 10 Year
Gabelli Dividend & Income Trust
NAV Total Return (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.51%
7.04% 14.63%
8.44%
8.62%
Investment Total Return (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.79)
7.54
16.54
9.50
8.06
S&P 500 Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.95
12.73
14.47
8.01
8.29
Dow Jones Industrial Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.33
10.50
13.16
8.13
8.10(d)
Nasdaq Composite Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.85
18.24
16.82
10.58
9.64
(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 Dow Jones Industrial Average is an unmanaged index of 30 large capitalization stocks.
The S&P 500 and the Nasdaq Composite Indices are unmanaged indicators of stock market performance. Dividends are considered
reinvested except for the Nasdaq Composite 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 adjustment for the spin-off and are net of expenses. Since inception return is based on an initial NAV of $19.06.
(c) Total returns and average annual returns reflect changes in closing market values on the NYSE, reinvestment of distributions and
adjustment for the spin-off. Since inception return is based on an initial offering price of $20.00.
(d) From November 30, 2003, the date closest to the Fund’s inception for which data is available.
Schedule of Investments — March 31, 2015 (Unaudited)
Market
Value
Shares
143,000
34,000
107,000
1,325,000
95,000
COMMON STOCKS — 96.3%
Aerospace — 2.1%
Exelis Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Kaman Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rockwell Automation Inc. . . . . . . . . . . . . . . . . . . . . . .
Rolls-Royce Holdings plc . . . . . . . . . . . . . . . . . . . . . .
The Boeing Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75,000
1,000
Agriculture — 0.2%
Archer Daniels Midland Co. . . . . . . . . . . . . . . . . . . . .
Bunge Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
375,000
205,000
376,000
83,000
Automotive — 1.2%
Ford Motor Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Motors Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Navistar International Corp.† . . . . . . . . . . . . . . . . . . .
PACCAR Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
200,000
45,069
340,000
133,000
25,000
5,363
30,040
17,000
Automotive: Parts and Accessories — 2.2%
Dana Holding Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal-Mogul Holdings Corp.† . . . . . . . . . . . . . . . .
Genuine Parts Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Johnson Controls Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
O’Reilly Automotive Inc.† . . . . . . . . . . . . . . . . . . . . . .
Remy International, Inc.. . . . . . . . . . . . . . . . . . . . . . . .
TRW Automotive Holdings Corp.† . . . . . . . . . . . . . .
Visteon Corp.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85,500
39,000
Aviation: Parts and Services — 0.3%
B/E Aerospace Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
KLX Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,000
9,000
8,000
16,000
Broadcasting — 0.1%
Dolby Laboratories Inc., Cl. A . . . . . . . . . . . . . . . . . .
Liberty Broadband Corp., Cl. C† . . . . . . . . . . . . . . . .
Liberty Media Corp., Cl. A†. . . . . . . . . . . . . . . . . . . . .
Liberty Media Corp., Cl. C†. . . . . . . . . . . . . . . . . . . . .
78,000
85,000
Building and Construction — 0.2%
Fortune Brands Home & Security Inc. . . . . . . . . . .
Layne Christensen Co.† . . . . . . . . . . . . . . . . . . . . . . . .
37,800
85,000
150,000
3,200
148,400
Business Services — 1.4%
Aramark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diebold Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fly Leasing Ltd., ADR . . . . . . . . . . . . . . . . . . . . . . . . . .
Jardine Matheson Holdings Ltd. . . . . . . . . . . . . . . . .
Macquarie Infrastructure Co. LLC . . . . . . . . . . . . . .
Market
Value
Shares
3,484,910
1,442,620
12,410,930
18,731,174
14,257,600
50,327,234
3,555,000
82,360
3,637,360
6,052,500
7,687,500
11,092,000
5,240,620
30,072,620
4,232,000
599,865
31,684,600
6,708,520
5,406,000
119,112
3,149,694
1,638,800
53,538,591
5,439,510
1,503,060
6,942,570
305,280
509,400
308,400
611,200
1,734,280
3,703,440
425,850
4,129,290
1,195,614
3,014,100
2,184,000
202,240
12,211,836
179,000
29,000
MasterCard Inc., Cl. A. . . . . . . . . . . . . . . . . . . . . . . . . . $
The Brink’s Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,000
452,000
15,000
80,000
88,000
181,000
49,000
18,000
41,032
150,574
9,241
176,000
8,000
Cable and Satellite — 2.4%
AMC Networks Inc., Cl. A† . . . . . . . . . . . . . . . . . . . . .
Cablevision Systems Corp., Cl. A . . . . . . . . . . . . . . .
Cogeco Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comcast Corp., Cl. A, Special . . . . . . . . . . . . . . . . . .
DIRECTV† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DISH Network Corp., Cl. A† . . . . . . . . . . . . . . . . . . . .
EchoStar Corp., Cl. A† . . . . . . . . . . . . . . . . . . . . . . . . .
Intelsat SA† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liberty Global plc, Cl. A† . . . . . . . . . . . . . . . . . . . . . . .
Liberty Global plc, Cl. C† . . . . . . . . . . . . . . . . . . . . . . .
Liberty Ventures, Cl. A† . . . . . . . . . . . . . . . . . . . . . . . .
Rogers Communications Inc., Cl. B. . . . . . . . . . . . .
Time Warner Cable Inc. . . . . . . . . . . . . . . . . . . . . . . . .
235,000
384,000
Communications Equipment — 0.6%
Cisco Systems Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corning Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
179,000
10,000
5,000
Computer Hardware — 1.0%
Apple Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Business Machines Corp. . . . . . . . . .
SanDisk Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,000
15,000
90,000
170,000
10,000
10,000
22,000
70,000
198,000
110,000
Computer Software and Services — 1.5%
Blucora Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CyrusOne Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EarthLink Holdings Corp.. . . . . . . . . . . . . . . . . . . . . . .
eBay Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Google Inc., Cl. A† . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Google Inc., Cl. C† . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internap Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MedAssets Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yahoo! Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,000
246,600
5,000
80,000
60,000
100,000
42,000
47,000
29,000
Consumer Products — 2.8%
Altria Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Avon Products Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Church & Dwight Co. Inc. . . . . . . . . . . . . . . . . . . . . . .
Coty Inc., Cl. A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Energizer Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . .
Hanesbrands Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Harman International Industries Inc.. . . . . . . . . . . .
Kimberly-Clark Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . .
Philip Morris International Inc. . . . . . . . . . . . . . . . . .
See accompanying notes to schedule of investments.
2
15,463,810
801,270
35,072,870
5,288,160
8,271,600
653,981
4,485,200
7,488,800
12,680,860
2,534,280
216,000
2,111,917
7,500,091
388,214
5,892,480
1,199,040
58,710,623
6,468,375
8,709,120
15,177,495
22,272,970
1,605,000
318,100
24,196,070
341,500
466,800
399,600
9,805,600
5,547,000
5,480,000
225,060
1,317,400
8,049,690
4,887,850
36,520,500
150,060
1,970,334
427,100
1,941,600
8,283,000
3,351,000
5,612,460
5,034,170
2,184,570
Schedule of Investments (Continued) — March 31, 2015 (Unaudited)
Market
Value
Shares
7,000
875,000
145,000
COMMON STOCKS (Continued)
Consumer Products (Continued)
Stanley Black & Decker Inc. . . . . . . . . . . . . . . . . . . . . $
Swedish Match AB. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Procter & Gamble Co. . . . . . . . . . . . . . . . . . . . . .
65,000
202,500
Consumer Services — 0.4%
Liberty Interactive Corp., Cl. A† . . . . . . . . . . . . . . . .
The ADT Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,000
55,000
992,000
338,000
56,000
5,600
20,000
5,500
252,000
300,000
310,000
Diversified Industrial — 4.1%
Bouygues SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eaton Corp. plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Electric Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Honeywell International Inc. . . . . . . . . . . . . . . . . . . . .
ITT Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jardine Strategic Holdings Ltd. . . . . . . . . . . . . . . . . .
Pentair plc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sulzer AG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textron Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toray Industries Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tyco International plc . . . . . . . . . . . . . . . . . . . . . . . . . .
10,000
374,900
425,000
70,000
100,000
20,000
Electronics — 1.5%
Agilent Technologies Inc.. . . . . . . . . . . . . . . . . . . . . . .
Intel Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sony Corp., ADR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TE Connectivity Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Texas Instruments Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
Thermo Fisher Scientific Inc. . . . . . . . . . . . . . . . . . . .
14,000
14,000
105,000
15,000
17,000
70,000
40,000
22,000
5,000
14,000
45,000
Energy and Utilities: Electric — 0.6%
ALLETE Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
American Electric Power Co. Inc. . . . . . . . . . . . . . . .
Cleco Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Edison International. . . . . . . . . . . . . . . . . . . . . . . . . . . .
El Paso Electric Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electric Power Development Co. Ltd. . . . . . . . . . . .
Great Plains Energy Inc.. . . . . . . . . . . . . . . . . . . . . . . .
Integrys Energy Group Inc.. . . . . . . . . . . . . . . . . . . . .
Pepco Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pinnacle West Capital Corp. . . . . . . . . . . . . . . . . . . . .
The AES Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,000
27,000
13,000
26,000
Energy and Utilities: Integrated — 2.4%
Alliant Energy Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Avista Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Black Hills Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chubu Electric Power Co. Inc. . . . . . . . . . . . . . . . . . .
Market
Value
Shares
667,520
25,765,924
11,881,300
67,269,038
1,897,350
8,407,800
10,305,150
3,614,632
3,736,700
24,611,520
35,256,780
2,234,960
196,000
1,257,800
605,577
11,171,160
2,518,864
13,348,600
98,552,593
415,500
11,723,123
11,381,500
5,013,400
5,718,500
2,686,800
36,938,823
738,640
787,500
5,724,600
937,050
656,880
2,363,780
1,067,200
1,584,440
134,150
892,500
578,250
15,464,990
126,000
922,860
655,720
310,868
565,000
10,000
100,000
20,000
230,000
95,208
8,000
40,000
401,000
10,000
24,000
45,000
127,000
40,000
30,000
27,000
66,000
49,000
57,000
15,000
31,000
58,000
50,000
32,000
20,000
45,000
28,000
65,000
26,000
100,000
CONSOL Energy Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Duke Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Edison SpA†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Endesa SA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enel SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eversource Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FirstEnergy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hawaiian Electric Industries Inc.. . . . . . . . . . . . . . . .
Hera SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hokkaido Electric Power Co. Inc.† . . . . . . . . . . . . . .
Hokuriku Electric Power Co.. . . . . . . . . . . . . . . . . . . .
Iberdrola SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Korea Electric Power Corp., ADR† . . . . . . . . . . . . . .
Kyushu Electric Power Co. Inc.†. . . . . . . . . . . . . . . .
MGE Energy Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Grid plc, ADR . . . . . . . . . . . . . . . . . . . . . . . . .
NextEra Energy Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NiSource Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OGE Energy Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ormat Technologies Inc. . . . . . . . . . . . . . . . . . . . . . . .
Public Service Enterprise Group Inc.. . . . . . . . . . . .
Shikoku Electric Power Co. Inc.† . . . . . . . . . . . . . . .
The Chugoku Electric Power Co. Inc. . . . . . . . . . . .
The Empire District Electric Co.. . . . . . . . . . . . . . . . .
The Kansai Electric Power Co. Inc.† . . . . . . . . . . . .
Tohoku Electric Power Co. Inc. . . . . . . . . . . . . . . . . .
Vectren Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Westar Energy Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wisconsin Energy Corp.. . . . . . . . . . . . . . . . . . . . . . . .
Xcel Energy Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55,200
50,000
105,000
306,000
10,000
13,500
97,000
13,500
48,000
Energy and Utilities: Natural Gas — 1.6%
California Resources Corp. . . . . . . . . . . . . . . . . . . . . .
Delta Natural Gas Co. Inc. . . . . . . . . . . . . . . . . . . . . . .
Kinder Morgan Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Fuel Gas Co. . . . . . . . . . . . . . . . . . . . . . . . . . .
ONE Gas Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ONEOK Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sempra Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South Jersey Industries Inc.. . . . . . . . . . . . . . . . . . . .
Southwest Gas Corp. . . . . . . . . . . . . . . . . . . . . . . . . . .
87,000
53,000
215,000
233,000
65,000
160,000
286,700
124,000
Energy and Utilities: Oil — 7.4%
Anadarko Petroleum Corp. . . . . . . . . . . . . . . . . . . . . .
Apache Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BG Group plc, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BP plc, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chesapeake Energy Corp. . . . . . . . . . . . . . . . . . . . . . .
Chevron Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ConocoPhillips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Devon Energy Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
15,757,850
767,800
53,924
387,088
1,041,655
4,809,908
280,480
1,284,800
942,545
78,793
318,372
1,159,875
2,603,500
388,544
1,329,600
1,744,470
6,867,300
2,163,840
1,801,770
570,300
1,299,520
715,721
652,854
794,240
191,187
512,528
1,235,920
2,519,400
1,287,000
3,481,000
59,057,232
420,072
972,500
4,416,300
18,460,980
432,300
651,240
10,574,940
732,780
2,792,160
39,453,272
7,204,470
3,197,490
2,656,325
9,112,630
920,400
16,796,800
17,849,942
7,478,440
Market
Value
Shares
130,000
194,000
47,000
331,000
138,000
80,000
200,000
200
11,800
184,350
220,000
220,000
555,000
153,000
Energy and Utilities: Oil (Continued)
Eni SpA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Exxon Mobil Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hess Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marathon Oil Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marathon Petroleum Corp. . . . . . . . . . . . . . . . . . . . . .
Murphy Oil Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Occidental Petroleum Corp. . . . . . . . . . . . . . . . . . . . .
PetroChina Co. Ltd., ADR . . . . . . . . . . . . . . . . . . . . . .
Petroleo Brasileiro SA, ADR . . . . . . . . . . . . . . . . . . . .
Phillips 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repsol SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royal Dutch Shell plc, Cl. A, ADR. . . . . . . . . . . . . . .
Statoil ASA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94,000
77,000
74,000
115,000
538,600
10,000
24,000
110,000
4,928
5,000
1,755,000
Energy and Utilities: Services — 3.0%
ABB Ltd., ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cameron International Corp.† . . . . . . . . . . . . . . . . . .
Diamond Offshore Drilling Inc. . . . . . . . . . . . . . . . . .
Dresser-Rand Group Inc.† . . . . . . . . . . . . . . . . . . . . .
Halliburton Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noble Corp. plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Oceaneering International Inc.. . . . . . . . . . . . . . . . . .
Schlumberger Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Seventy Seven Energy Inc.† . . . . . . . . . . . . . . . . . . . .
Transocean Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weatherford International plc† . . . . . . . . . . . . . . . . .
12,000
37,000
74,000
30,000
50,000
9,000
6,000
Energy and Utilities: Water — 0.3%
American States Water Co. . . . . . . . . . . . . . . . . . . . . .
American Water Works Co. Inc. . . . . . . . . . . . . . . . .
Aqua America Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Severn Trent plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SJW Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The York Water Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Utilities Group plc, ADR . . . . . . . . . . . . . . . . .
40,000
93,000
175,000
168,000
150,000
121,000
410,000
Entertainment — 2.2%
Take-Two Interactive Software Inc.† . . . . . . . . . . . .
The Madison Square Garden Co., Cl. A† . . . . . . . .
Time Warner Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twenty-First Century Fox Inc., Cl. A. . . . . . . . . . . . .
Twenty-First Century Fox Inc., Cl. B. . . . . . . . . . . . .
Viacom Inc., Cl. B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vivendi SA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
176,200
Environmental Services — 1.3%
Progressive Waste Solutions Ltd. . . . . . . . . . . . . . .
Market
Value
Shares
4,499,300
16,490,000
3,189,890
8,642,410
14,129,820
3,728,000
14,600,000
22,242
70,918
14,489,910
4,098,600
13,123,000
9,762,450
7,597,980
179,661,017
1,989,980
3,474,240
1,982,460
9,240,250
23,633,768
142,800
1,294,320
9,178,400
20,451
73,350
21,586,500
72,616,519
478,680
2,005,770
1,949,900
916,292
1,545,500
218,520
165,690
7,280,352
1,018,200
7,872,450
14,777,000
5,685,120
4,932,000
8,264,300
10,194,673
52,743,743
5,176,756
250,000
23,000
8,000
260,000
Republic Services Inc. . . . . . . . . . . . . . . . . . . . . . . . . . $
Veolia Environnement SA . . . . . . . . . . . . . . . . . . . . . .
Waste Connections Inc. . . . . . . . . . . . . . . . . . . . . . . . .
Waste Management Inc. . . . . . . . . . . . . . . . . . . . . . . .
93,000
50,000
170,000
705,000
124,000
72,000
90,000
Equipment and Supplies — 1.5%
CIRCOR International Inc. . . . . . . . . . . . . . . . . . . . . . .
Graco Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mueller Industries Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
RPC Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sealed Air Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenaris SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Timken Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,000
436,200
675,000
310,000
9,000
70,000
20,000
140,000
110,000
15,322
32,000
120,000
210,000
95,000
30,000
70,000
25,000
38,000
200,000
580,700
30,000
89,250
381,000
43,000
275,000
72,000
190,000
170,000
114,000
30,000
210,000
219,000
172,000
874,000
200,000
200,000
Financial Services — 16.7%
Alleghany Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
American Express Co.. . . . . . . . . . . . . . . . . . . . . . . . . .
American International Group Inc. . . . . . . . . . . . . . .
Bank of America Corp. . . . . . . . . . . . . . . . . . . . . . . . . .
Berkshire Hathaway Inc., Cl. B† . . . . . . . . . . . . . . . .
Blackhawk Network Holdings Inc., Cl. B† . . . . . . .
BlackRock Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Citigroup Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CME Group Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Acceptance Corp.† . . . . . . . . . . . . . . . . . . . . . .
Cullen/Frost Bankers Inc.. . . . . . . . . . . . . . . . . . . . . . .
Discover Financial Services . . . . . . . . . . . . . . . . . . . .
First Niagara Financial Group Inc.. . . . . . . . . . . . . . .
FNF Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FNFV Group† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H&R Block Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hong Kong Exchanges and Clearing Ltd.. . . . . . . .
HSBC Holdings plc, ADR . . . . . . . . . . . . . . . . . . . . . . .
Invesco Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JPMorgan Chase & Co. . . . . . . . . . . . . . . . . . . . . . . . .
Kinnevik Investment AB, Cl. B . . . . . . . . . . . . . . . . . .
KKR & Co. LP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legg Mason Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
M&T Bank Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Morgan Stanley. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Australia Bank Ltd., ADR . . . . . . . . . . . . . .
Navient Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
New York Community Bancorp Inc.. . . . . . . . . . . . .
Northern Trust Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resona Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
SLM Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Street Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
T. Rowe Price Group Inc.. . . . . . . . . . . . . . . . . . . . . . .
The Bank of New York Mellon Corp. . . . . . . . . . . . .
The Blackstone Group LP . . . . . . . . . . . . . . . . . . . . . .
The Hartford Financial Services Group Inc.. . . . . .
4
10,140,000
435,630
385,120
14,099,800
30,237,306
5,087,100
3,608,000
6,142,100
9,031,050
5,649,440
2,016,000
3,792,600
35,326,290
3,896,000
34,075,944
36,983,250
4,770,900
1,298,880
2,488,500
7,316,800
7,212,800
10,418,100
2,987,790
2,210,560
6,762,000
1,856,400
3,492,200
423,000
2,244,900
612,694
1,618,420
7,938,000
35,178,806
1,003,582
2,035,793
21,031,200
5,461,000
9,814,750
1,051,560
3,862,700
2,844,100
7,940,100
149,231
1,948,800
16,103,070
13,928,560
35,169,760
7,778,000
8,364,000
Market
Value
Shares
287,000
128,000
130,000
53,000
138,000
653,500
20,000
Financial Services (Continued)
The PNC Financial Services Group Inc. . . . . . . . . . $
The Travelers Companies Inc. . . . . . . . . . . . . . . . . . .
U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
W. R. Berkley Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waddell & Reed Financial Inc., Cl. A . . . . . . . . . . . .
Wells Fargo & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Willis Group Holdings plc . . . . . . . . . . . . . . . . . . . . . .
8,000
208,168
5,000
115,000
500,000
66,000
265,000
36,000
237,222
2,000,000
21,141
244,000
524,000
18,000
279,000
42,800
375,000
201,666
60,000
793,000
150,000
32,000
35,000
168,000
1,600,000
339,450
212,000
62,000
10,000
23,800
18,000
577,000
7,000
30,000
324,000
Food and Beverage — 11.4%
Ajinomoto Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boulder Brands Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . .
Brown-Forman Corp., Cl. B. . . . . . . . . . . . . . . . . . . . .
Campbell Soup Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China Mengniu Dairy Co. Ltd. . . . . . . . . . . . . . . . . . .
Chr. Hansen Holding A/S . . . . . . . . . . . . . . . . . . . . . . .
ConAgra Foods Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Constellation Brands Inc., Cl. A† . . . . . . . . . . . . . . .
Danone SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Davide Campari-Milano SpA. . . . . . . . . . . . . . . . . . . .
Diageo plc, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dr Pepper Snapple Group Inc.. . . . . . . . . . . . . . . . . .
General Mills Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Heineken Holding NV . . . . . . . . . . . . . . . . . . . . . . . . . .
ITO EN Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kellogg Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kikkoman Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kraft Foods Group Inc. . . . . . . . . . . . . . . . . . . . . . . . . .
Maple Leaf Foods Inc.. . . . . . . . . . . . . . . . . . . . . . . . . .
Mondele¯z International Inc., Cl. A. . . . . . . . . . . . . . .
Morinaga Milk Industry Co. Ltd. . . . . . . . . . . . . . . . .
Nestlé SA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nestlé SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NISSIN FOODS HOLDINGS CO. LTD. . . . . . . . . . . .
Parmalat SpA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parmalat SpA, GDR(a) . . . . . . . . . . . . . . . . . . . . . . . . .
PepsiCo Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pernod Ricard SA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Post Holdings Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remy Cointreau SA . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Suntory Beverage & Food Ltd.. . . . . . . . . . . . . . . . . .
The Coca-Cola Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The J.M. Smucker Co. . . . . . . . . . . . . . . . . . . . . . . . . .
Unilever plc, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yakult Honsha Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .
134,000
50,000
64,486
Health Care — 10.3%
Abbott Laboratories. . . . . . . . . . . . . . . . . . . . . . . . . . . .
AbbVie Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actavis plc† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market
Value
Shares
26,759,880
13,840,640
5,677,100
2,677,030
6,836,520
35,550,400
963,600
404,577,320
175,729
1,983,841
451,750
5,353,250
2,657,156
3,031,841
9,680,450
4,183,560
15,972,604
13,967,442
2,337,560
19,149,120
29,658,400
1,240,618
6,027,340
2,822,660
11,928,336
17,568,134
1,098,101
28,619,370
570,309
2,416,958
2,632,719
8,278,484
4,280,338
907,044
20,271,440
7,343,175
468,400
1,752,973
772,919
23,397,350
810,110
1,251,300
22,611,248
275,672,029
6,208,220
2,927,000
19,192,323
41,655
50,000
140,000
32,000
25,000
25,000
40,000
525,000
68,676
7,000
35,000
45,000
100,000
30,000
40,000
85,000
60,000
12,500
25,000
10,000
12,420
105,000
13,500
475,000
25,000
22,000
234,220
231,000
60,000
20,000
45,000
112,500
94,000
669,548
75,000
10,000
75,000
91,000
40,000
40,000
60,000
5,000
20,000
54,000
20,000
274,202
Aetna Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Akorn Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alere Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AmerisourceBergen Corp. . . . . . . . . . . . . . . . . . . . . . .
Amgen Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Anthem Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Baxter International Inc.. . . . . . . . . . . . . . . . . . . . . . . .
BioScrip Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bristol-Myers Squibb Co. . . . . . . . . . . . . . . . . . . . . . .
Chemed Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cigna Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DaVita HealthCare Partners Inc.† . . . . . . . . . . . . . . .
Eli Lilly & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Express Scripts Holding Co.† . . . . . . . . . . . . . . . . . .
Gerresheimer AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gilead Sciences Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . .
HCA Holdings Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Henry Schein Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hospira Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Humana Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ICU Medical Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . .
Laboratory Corp. of America Holdings†. . . . . . . . .
Liberator Medical Holdings Inc. . . . . . . . . . . . . . . . .
McKesson Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mead Johnson Nutrition Co.. . . . . . . . . . . . . . . . . . . .
Medtronic plc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merck & Co. Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mylan NV† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Myriad Genetics Inc.†. . . . . . . . . . . . . . . . . . . . . . . . . .
Orthofix International NV†. . . . . . . . . . . . . . . . . . . . . .
Owens & Minor Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patterson Companies Inc. . . . . . . . . . . . . . . . . . . . . . .
Pfizer Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quality Systems Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Salix Pharmaceuticals Ltd.† . . . . . . . . . . . . . . . . . . . .
Sanofi, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sigma-Aldrich Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . .
St. Jude Medical Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . .
Stryker Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenet Healthcare Corp.†. . . . . . . . . . . . . . . . . . . . . . . .
Teva Pharmaceutical Industries Ltd., ADR . . . . . .
The Cooper Companies Inc. . . . . . . . . . . . . . . . . . . . .
UnitedHealth Group Inc.. . . . . . . . . . . . . . . . . . . . . . . .
Zimmer Holdings Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
Zoetis Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,000
120,000
700,000
Hotels and Gaming — 0.3%
Accor SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boyd Gaming Corp.†. . . . . . . . . . . . . . . . . . . . . . . . . . .
Ladbrokes plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
4,437,507
2,375,500
6,846,000
3,637,440
3,996,250
3,860,250
2,740,000
2,325,750
4,429,602
835,800
4,530,400
3,657,600
7,265,000
2,603,100
2,208,985
8,341,050
4,513,800
1,745,250
2,196,000
1,780,200
1,156,799
10,563,000
1,702,215
1,662,500
5,655,000
2,211,660
18,266,818
13,277,880
3,561,000
708,000
1,615,050
3,807,000
4,586,260
23,293,575
1,198,500
1,728,100
3,708,000
12,580,750
2,616,000
3,690,000
2,970,600
311,500
3,748,400
6,387,660
2,350,400
12,692,811
248,702,505
992,473
1,704,000
1,083,025
Market
Value
Shares
53,000
270,000
6,000
Hotels and Gaming (Continued)
Las Vegas Sands Corp. . . . . . . . . . . . . . . . . . . . . . . . . $
Mandarin Oriental International Ltd. . . . . . . . . . . . .
Wyndham Worldwide Corp. . . . . . . . . . . . . . . . . . . . .
689,040
90,500
279,000
Machinery — 1.0%
CNH Industrial NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deere & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xylem Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,000
230,000
20,000
100,000
8,000
30,000
560,000
13,000
334,000
44,000
42,000
Metals and Mining — 1.2%
Agnico Eagle Mines Ltd. . . . . . . . . . . . . . . . . . . . . . . .
Alcoa Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alliance Holdings GP LP . . . . . . . . . . . . . . . . . . . . . . .
Barrick Gold Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BHP Billiton Ltd., ADR . . . . . . . . . . . . . . . . . . . . . . . . .
Franco-Nevada Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . .
Freeport-McMoRan Inc.. . . . . . . . . . . . . . . . . . . . . . . .
Labrador Iron Ore Royalty Corp.. . . . . . . . . . . . . . . .
Newmont Mining Corp. . . . . . . . . . . . . . . . . . . . . . . . .
Peabody Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . .
TimkenSteel Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
204,000
Paper and Forest Products — 0.5%
International Paper Co.. . . . . . . . . . . . . . . . . . . . . . . . .
400
107,000
Publishing — 0.1%
Graham Holdings Co., Cl. B . . . . . . . . . . . . . . . . . . . .
News Corp., Cl. B†. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,000
71,779
8,000
16,000
Real Estate — 0.3%
Brookfield Asset Management Inc., Cl. A. . . . . . . .
Crown Castle International Corp. . . . . . . . . . . . . . . .
Forest City Enterprises Inc., Cl. A†. . . . . . . . . . . . . .
QTS Realty Trust Inc., Cl. A. . . . . . . . . . . . . . . . . . . . .
250,000
75,000
341,000
210,000
140,000
25,000
90,000
104,000
50,000
30,000
94,800
265,000
Retail — 5.4%
Best Buy Co. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CST Brands Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CVS Health Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hertz Global Holdings Inc.† . . . . . . . . . . . . . . . . . . . .
Ingles Markets Inc., Cl. A. . . . . . . . . . . . . . . . . . . . . . .
Kohl’s Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lowe’s Companies Inc. . . . . . . . . . . . . . . . . . . . . . . . .
Macy’s Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Murphy USA Inc.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outerwall Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rush Enterprises Inc., Cl. B† . . . . . . . . . . . . . . . . . . .
Sally Beauty Holdings Inc.† . . . . . . . . . . . . . . . . . . . .
Market
Value
Shares
2,917,120
429,300
542,820
7,668,738
5,622,566
7,935,945
9,770,580
23,329,091
1,955,800
2,971,600
1,033,800
1,096,000
371,760
1,453,871
10,612,000
138,668
7,251,140
216,480
1,111,740
28,212,859
120,000
73,000
200,000
20,000
137,000
Seven & i Holdings Co. Ltd. . . . . . . . . . . . . . . . . . . . . $
The Home Depot Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
Walgreens Boots Alliance Inc. . . . . . . . . . . . . . . . . . .
Wal-Mart Stores Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Whole Foods Market Inc.. . . . . . . . . . . . . . . . . . . . . . .
51,000
49,000
33,000
85,000
134,000
500,000
75,000
89,000
5,000
94,000
Specialty Chemicals — 1.9%
Air Products & Chemicals Inc.. . . . . . . . . . . . . . . . . .
Airgas Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ashland Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chemtura Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. I. du Pont de Nemours and Co. . . . . . . . . . . . . . .
Ferro Corp.† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H.B. Fuller Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Olin Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Praxair Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Dow Chemical Co. . . . . . . . . . . . . . . . . . . . . . . . . .
38,500
50,000
100,000
50,084
295,000
23,000
150,000
110,000
135,000
833,086
40,000
171,545
Telecommunications — 4.0%
AT&T Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BCE Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Belgacom SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deutsche Telekom AG, ADR . . . . . . . . . . . . . . . . . . . .
Hellenic Telecommunications Organization SA,
ADR† . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loral Space & Communications Inc.† . . . . . . . . . .
Orange SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portugal Telecom SGPS SA . . . . . . . . . . . . . . . . . . . .
Telefonica SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telekom Austria AG . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telenet Group Holding NV†. . . . . . . . . . . . . . . . . . . . .
Telephone & Data Systems Inc.. . . . . . . . . . . . . . . . .
Telstra Corp. Ltd., ADR. . . . . . . . . . . . . . . . . . . . . . . . .
TELUS Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Verizon Communications Inc. . . . . . . . . . . . . . . . . . .
VimpelCom Ltd., ADR. . . . . . . . . . . . . . . . . . . . . . . . . .
Vodafone Group plc, ADR . . . . . . . . . . . . . . . . . . . . . .
239,000
16,500
Transportation — 0.6%
GATX Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kansas City Southern . . . . . . . . . . . . . . . . . . . . . . . . . .
3,000,000
124,000
Wireless Communications — 0.3%
Cable & Wireless Communications plc. . . . . . . . . .
United States Cellular Corp.† . . . . . . . . . . . . . . . . . . .
337,000
238,479
39,000
480,000
195,000
11,319,960
419,852
1,698,090
2,117,942
696,930
5,924,639
204,160
582,560
7,408,289
9,447,500
3,287,250
35,194,610
4,552,800
6,927,200
1,956,250
6,695,100
6,750,640
3,618,500
1,983,600
2,343,456
9,108,050
5,055,739
8,293,530
16,936,000
1,645,000
7,134,960
130,930,185
7,715,280
5,199,390
4,201,230
2,319,650
9,576,980
6,275,000
3,215,250
2,851,560
603,700
4,510,120
46,468,160
11,003,050
10,101,970
1,366,019
8,752,800
855,075
2,634,940
800,500
58,063
718,705
2,115,707
1,265,467
3,735,000
2,623,500
4,487,400
40,512,972
209,600
5,606,091
96,846,859
13,857,220
1,684,320
15,541,540
2,712,384
4,429,280
7,141,664
TOTAL COMMON STOCKS . . . . . . . . . . . . . . . . . . . . . 2,330,902,969
6
Market
Value
Shares
12,588
CONVERTIBLE PREFERRED STOCKS — 0.4%
Broadcasting — 0.0%
Emmis Communications Corp., 6.250%,
Ser. A † . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Principal
Amount
Market
Value
U.S. GOVERNMENT OBLIGATIONS — 2.4%
$57,597,000 U.S. Treasury Bills,
0.000% to 0.135%††,
04/02/15 to 09/24/15(c) . . . . . . . . . . . . . . . . . . . . . $
157,979
57,591,915
128,000
Energy and Utilities — 0.3%
El Paso Energy Capital Trust I, 4.750% . . . . . . . . .
7,680,000
TOTAL INVESTMENTS — 100.0%
(Cost $1,655,771,255) . . . . . . . . . . . . . . . . . . . $2,420,868,384
1,500
Financial Services — 0.0%
Doral Financial Corp., 4.750% † . . . . . . . . . . . . . . . .
161,250
Aggregate tax cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,666,085,367
53,000
Telecommunications — 0.1%
Cincinnati Bell Inc., 6.750%, Ser. B . . . . . . . . . . . .
2,624,560
TOTAL CONVERTIBLE PREFERRED STOCKS. . . .
10,623,789
PREFERRED STOCKS — 0.1%
Health Care — 0.1%
The Phoenix Companies Inc., 7.450%† . . . . . . . . .
2,358,626
95,298
67,500
400,000
400,000
RIGHTS — 0.0%
Hotels and Gaming — 0.0%
Mandarin Oriental International Ltd., expire
04/08/15†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retail — 0.0%
Safeway Casa Ley, CVR, expire 01/30/19† . . . . . .
Safeway PDC, CVR, expire 01/30/17†. . . . . . . . . . .
Gross unrealized appreciation . . . . . . . . . . . . . . . . . . $ 816,063,458
Gross unrealized depreciation . . . . . . . . . . . . . . . . . .
(61,280,441)
Net unrealized appreciation/depreciation . . . . . . . . $ 754,783,017
4,000
17,550
227,070
306,400
WARRANTS — 0.1%
Energy and Utilities: Natural Gas — 0.1%
Kinder Morgan Inc., expire 05/25/17† . . . . . . . . . .
1,256,240
650
Food and Beverage — 0.0%
Parmalat SpA, GDR, expire 12/31/15†(a) . . . . . . .
4
TOTAL WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,256,244
(a)
69,720
Aggregate proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(69,802)
82
—
82
At March 31, 2015, the Fund held investments in restricted and illiquid securities
amounting to $907,048 or 0.04% of total investments, which were valued
under methods approved by the Board of Trustees as follows:
Acquisition
Shares
Issuer
339,450 Parmalat SpA, GDR . . . . . .
650 Parmalat SpA, GDR,
expire 12/31/15 . . . . . . .
Principal
Amount
CORPORATE BONDS — 0.7%
Aerospace — 0.2%
$ 2,500,000 GenCorp Inc., Sub. Deb.,
4.063%, 12/31/39 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diversified Industrial — 0.5%
8,800,000 Griffon Corp., Sub. Deb.,
4.000%, 01/15/17(b) . . . . . . . . . . . . . . . . . . . . . . . .
Real Estate — 0.0%
450,000 Palm Harbor Homes Inc.
3.250%, 05/15/24†. . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL CORPORATE BONDS . . . . . . . . . . . . . . . . . . .
SECURITIES SOLD SHORT — 0.0%
Building and Construction — 0.0%
Griffon Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Gross unrealized appreciation . . . . . . . . . . . . . . . . . . $
Gross unrealized depreciation . . . . . . . . . . . . . . . . . .
Net unrealized appreciation/depreciation . . . . . . . . $
190,000
19,520
209,520
TOTAL RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market
Value
Shares
(b)
Acquisition
Date
12/02/03
11/09/05
Acquisition
Cost
$
03/31/15
Carrying
Value
Per Share
981,615
$2.6721
—
0.0062
Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31, 2015,
the market value of the Rule 144A security amounted to $11,401,500 or
0.47% of total investments.
(c) At March 31, 2015, $1,000,000 of the principal amount was pledged as collateral
for securities sold short.
†
Non-income producing security.
†† Represents annualized yield at date of purchase.
ADR American Depositary Receipt
CVR Contingent Value Right
GDR Global Depositary Receipt
6,439,063
11,401,500
67,208
17,907,771
7
% of Total
Investments
Geographic Diversification
North America . .
Europe . . . . . .
Japan . . . . . . .
Asia/Pacific . . . .
Latin America . .
Total Investments
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85.4%
11.0
3.1
0.4
0.1
100.0%
Market
Value
$2,066,286,459
267,106,111
75,002,344
10,787,502
1,685,968
$2,420,868,384
8
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 Trustees (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).
9
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 by inputs used to value the Fund’s investments as of
March 31, 2015 is as follows:
Valuation Inputs
Level 2 Other Significant
Observable Inputs
Level 1
Quoted Prices
INVESTMENTS IN SECURITIES:
ASSETS (Market Value):
Common Stocks:
Energy and Utilities: Integrated
Other Industries (a)
Total Common Stocks
Preferred Stocks (a)
Convertible Preferred Stocks
Financial Services
Other Industries (a)
Total Preferred Stocks and Convertible
Preferred Stocks
Rights (a)
Warrants (a)
Corporate Bonds (a)
U.S. Government Obligations
TOTAL INVESTMENTS IN SECURITIES –
ASSETS
LIABILITIES (Market Value):
Securities Sold Short (a)
TOTAL INVESTMENTS IN SECURITIES –
LIABILITIES
(a)
$
59,003,308
2,271,845,737
2,330,849,045
2,358,626
Level 3 Significant
Unobservable Inputs
Total Market Value
at 3/31/15
—
—
—
—
$ 53,924
—
53,924
—
161,250
—
—
—
161,250
10,462,539
12,821,165
—
1,256,240
—
—
161,250
—
4
17,840,563
57,591,915
—
227,070
—
67,208
—
12,982,415
227,070
1,256,244
17,907,771
57,591,915
$2,344,926,450
$75,593,732
$348,202
$2,420,868,384
—
10,462,539
$
$
59,057,232
2,271,845,737
2,330,902,969
2,358,626
—
$
(69,720)
—
$
(69,720)
—
$
(69,720)
—
$
(69,720)
Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings.
The Fund did not have 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
10
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
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 achieving additional return or of hedging
the value of the Fund’s portfolio, increasing the income of the Fund, hedging or protecting its exposure to
interest rate movements and movements in the securities markets, managing risks, protecting the value of its
portfolio against uncertainty in the level of future currency exchange rates, or hedging 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.
The Fund’s derivative contracts held at March 31, 2015, if any, are not accounted for as hedging instruments
under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.
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
11
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
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.
Securities Sold Short. The Fund may enter into short sale transactions. Short selling involves selling securities
that may or may not be owned and, at times, borrowing the same securities for delivery to the purchaser, with
an obligation to replace such borrowed securities at a later date. The proceeds received from short sales are
recorded as liabilities and the Fund records an unrealized gain or loss to the extent of the difference between
the proceeds received and the value of an open short position on the day of determination.
The Fund records a realized gain or loss when the short position is closed out. By entering into a short sale,
the Fund bears the market risk of an unfavorable change in the price of the security sold short. Dividends on
short sales are recorded as an expense by the Fund on the ex-dividend date and interest expense is recorded
on the accrual basis. The broker retains collateral for the value of the open positions, which is adjusted periodically
as the value of the position fluctuates. Securities sold short at March 31, 2015 are reflected within the Schedule
of Investments.
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.
12
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 is not subject to an independent limitation on the amount it may invest 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.
For the restricted securities the Fund held as of March 31, 2015, refer to the Schedule of Investments.
13
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.
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 “General
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 “General 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 “XGDVX.”
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 7.5% 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.
14
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.
Barbara G. Marcin, CFA, joined GAMCO Investors, Inc. in 1999 and currently serves as a portfolio manager of
Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Fund Complex. Prior to joining GAMCO,
Ms. Marcin was head of value investments at Citibank Global Asset Management. Ms. Marcin graduated with
Distinction as an Echols Scholar from the University of Virginia and holds an MBA degree from Harvard University’s
Graduate School of Business.
Robert D. Leininger, CFA, joined GAMCO Investors, Inc. in 1993 as an equity analyst. Subsequently, he was a
partner and portfolio manager at Rorer Asset Management before rejoining GAMCO in 2010 where he currently
serves as a portfolio manager of Gabelli Funds, LLC and co-manages the Fund. Mr. Leininger is a magna cum
laude graduate of Amherst College with a degree in Economics and holds an MBA from the Wharton School at
the University of Pennsylvania.
Jeffrey J. Jonas, CFA, joined Gabelli in 2003 as a research analyst. He focuses on companies in the cardiovascular,
healthcare services, and pharmacy benefits management sectors, among others. He also serves as a portfolio
manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Fund Complex. Mr. Jonas
was a Presidential Scholar at Boston College, where he received a BS in Finance and Management Information
Systems.
Kevin V. Dreyer joined Gabelli in 2005 as a research analyst covering companies within the consumer sector.
He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO
Fund Complex. Mr. Dreyer received a BSE from the University of Pennsylvania and an MBA from Columbia Business
School.
Rye, NY 10580-1422
t 800-GABELLI (800-422-3554)
f 914-921-5118
e [email protected]
GABELLI.COM
TRUSTEES
OFFICERS
Mario J. Gabelli, CFA
Chairman &
GAMCO Investors, Inc.
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.
Andrea R. Mango
Secretary &
Vice President
Agnes Mullady
Treasurer
Richard J. Walz
Chief Compliance Officer
Carter W. Austin
Mario d'Urso
Former Italian Senator
Laurissa M. Martire
Frank J. Fahrenkopf, Jr.
Former President &
American Gaming Association
David I. Schachter
Vice President
Michael J. Melarkey
Partner,
Avansino, Melarkey, Knobel,
Mulligan & McKenzie
Gabelli Funds, LLC
Rye, New York 10580-1422
Salvatore M. Salibello, CPA
Partner,
Salibello & Company
Edward T. Tokar
Senior Managing Director,
Beacon Trust Company
Anthonie C. van Ekris
Chairman,
BALMAC International, Inc.
INVESTMENT ADVISER
CUSTODIAN
State Street Bank and Trust
Company
COUNSEL
Skadden, Arps, Slate, Meagher &
Flom LLP
TRANSFER AGENT AND
REGISTRAR
Computershare Trust Company, N.A.
Salvatore J. Zizza
Chairman,
Zizza & Associates Corp.
GDV Q1/2015
THE
GABELLI
DIVIDEND
& INCOME
TRUST
GDV
First Quarter Report
March 31, 2015

The Gabelli Dividend & Income Trust

Transcription

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