Given the Fund's current net asset value of $7.13, the Board of Directors considered the appropriate level of quarterly payments pursuant to the 10% Distribution Policy. Accordingly, subsequent interim quarterly distributions will be set at the $0.14 per share level in an effort to provide our common stock shareholders consistent distributions throughout the year pursuant to our 10% Distribution Policy. Each quarter, the Board of Directors reviews the amount of any potential distribution based on the income, capital gains or capital available. Currently, the Equity Trust has approximately $250 million ($1.87 per common share) of gross unrealized appreciation on portfolio securities which could be realized through their sale and distributed to shareholders.

Under the Gabelli Equity Trust's payout policy, the Fund will pay out a minimum annual distribution of 10% of the average net asset value of the Fund. For the past several years, the Fund paid $0.27 per share in each of the first three quarters of the year and an adjusting distribution in the fourth quarter of an amount sufficient to pay 10% of the average net asset value of the Fund, as of the last day of the four preceding calendar quarters, or to satisfy the minimum distribution requirements of the Internal Revenue Code, whichever is greater. Considering the current net asset value, a $0.14 per share quarterly distribution would provide a stable level of distributions.

A portion of this distribution may be treated as long-term capital gains. This has the effect of providing individual shareholders with an ordinary income tax equivalent yield that is higher than the current yield. Long-term capital gains and ordinary income, if any, will be allocated on a pro-rata basis to all distributions for the year. The final determination of the source of all distributions in 2003 will be made after year-end.

The Gabelli Equity Trust Inc. is a closed-end, non-diversified management investment company with $1.3 billion in total assets whose primary investment objective is long term growth of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of Gabelli Asset Management Inc. (GBL - NYSE), which is a publicly traded NYSE listed company.