The Preferred Shares, which trade on the New York Stock Exchange under the symbol "GAB Pr D", are rated 'Aaa' by Moody's Investors Service and have an annual dividend rate of $1.46875 per share. The Preferred Shares were issued on October 7, 2003 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 October 7, 2008.

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. Long-term capital gain, qualifying dividend income 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 2005 will be made after year-end.

The Gabelli Equity Trust Inc. is a non-diversified, closed-end management investment company with $1.6 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.