The Preferred Shares, which trade on the New York Stock Exchange under the symbol "GAB Pr B", are rated 'Aaa' by Moody's Investors Service and have an annual dividend rate of $1.80 per share. The Preferred Shares were issued on June 20, 2001 at $25.00 per share and pay distributions quarterly. The Preferred Shares are 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 20, 2006.

The Fund redeemed 25% (1,650,000 Shares) of its outstanding 7.20% Tax Advantaged Series B Cumulative Preferred Stock on June 26, 2006 at the redemption price of $25.00 per Preferred Share, which is equal to the liquidation preference of the Preferred Shares. The redemption was made pro rata from each Preferred Shareholder based on the respective number of Preferred Shares held by each such holder on the redemption date. From and after the redemption date, the Preferred Shares redeemed will no longer be deemed outstanding, dividends will cease to accrue and all the rights of the Preferred Shareholders with respect to the Preferred Shares redeemed will cease, except the right to receive the redemption price.

A portion of the distribution may be treated as long-term capital gain and qualified dividend income for individuals, each subject to the maximum Federal income tax rate, which is currently 15% in taxable accounts for individuals. Long-term capital gains, qualified dividend income, and ordinary income, if any, will be allocated on a pro-rata basis to all distributions for the year. As of August 17, 2006, the date of this press release, each of the distributions paid in 2006 would include approximately 32% from net investment income and 68% from net capital gains. The estimated components of each distribution are 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 2006 will be made after year-end. All shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2006 distributions in early 2007 via Form 1099-DIV.

The Gabelli Equity Trust Inc. is a non-diversified, closed-end management investment company with $1.8 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 GAMCO Investors, Inc. (NYSE:GBL), which is a publicly traded NYSE listed company.