The Preferred Shares, which trade on the New York Stock Exchange under the symbol "GAB Pr", are rated 'Aaa' by Moody's Investor Services and have an annual dividend rate of $1.8125 per share. The Preferred Shares were issued on June 9, 1998 at $25.00 per share and pay distributions quarterly. The Preferred Shares will be callable at any time at the liquidation value of $25.00 per share plus accrued dividends following the expiration of the five-year call protection on June 9, 2003.

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. Any long-term capital gains 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 $1.2 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.