Pursuant to the 10% Distribution Policy, the Board of Directors declared an $0.18 per share cash distribution payable on September 24, 2004 to common stock shareholders of record on September 16, 2004.

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. The Fund's current quarterly distribution level is set at $0.18 per share for the third quarter, a 12.5% increase from the previous two quarters' $0.16 per share distributions. The Fund anticipates an adjusting distribution in the fourth quarter of a sufficient amount 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. Each quarter, the Board of Directors reviews the amount of any potential distribution and the income, capital gain or capital available.

We note that 10% of the current average net asset value per share would be $0.79 based on the ending net asset values per share for the previous three quarters, December 31, 2003, March 31, 2004 and June 30, 2004, of $7.98, $8.08 and $8.07, respectively, and the net asset value per share of August 17, 2004, of $7.47. The average net asset value per share is subject to change as of year-end.

A portion of the distribution may be treated as long-term capital gain and qualifying dividend income for individuals, each subject to the maximum Federal income tax rate, which is currently 15% in taxable accounts for individuals. If the Fund does not generate a total return from dividends and interest received and net realized capital gains equal to or in excess of 10% of the average net asset value of the Fund, then the amount distributed in excess of the Fund's investment income and net realized capital gains would be deemed a non-taxable return of capital. Long-term capital gain, qualifying dividend income, ordinary income and non-taxable return of capital, if any, that is allocable to the common shares will be allocated on a pro-rata basis to all distributions for the year. The final determination of the source of all distributions in 2004 will be made after the 2004 year-end.

The Gabelli Equity Trust Inc. is a closed-end, non-diversified management investment company with $1.5 billion in total assets whose primary investment objective is long term growth of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of Gabelli Asset Management Inc. (NYSE:GBL), which is a publicly traded NYSE listed company.