This is the second time such a resolution has been passed. Last year at the 1997 Annual Meeting, an identical resolution was likewise approved with 70.6% of the shares being voted in favor of the resolution. This year, an even greater shareholder approval was obtained as 84% of the shares voted in favor of the resolution, the Company said.

The proxy material for the 1998 meeting discussed a shareholder lawsuit, filed on March 9, 1998, which sought to block the Equity Trust from issuing Preferred Stock. (The Company filed a registration statement with the Securities and Exchange Commission on February 10, 1998 and amended the statement on March 19,1998. It said in the proxy material for the 1998 meeting that it "expects to be in a position to commence an offering in the near future.")

Mario J. Gabelli, Chairman, President and Chief Investment Officer, stated: "There can be no doubt now that our shareholders agree with the Board of Directors' assessment that an issue of preferred stock is desirable at this time, especially given the current level of interest rates, and that the lawsuit seeking to block the issue is an attempt to obstruct the interests of a significant majority of shareholders."

"The overwhelming shareholder approval at the 1998 Annual Meeting, following as it did on the expanded disclosure in the proxy material, makes it clear that continuation of the litigation can serve no one's purpose," Mr. Gabelli said. "And it is a clear signal for the Directors of the Trust to consider recovery of the loss of economic value from the plaintiff for acting in what we regard as a reckless and capricious manner."

(Class action status was sought for the suit - Carter v. Gabelli Equity Trust, et. al. - which was brought in the United States District Court for the Southern District of New York. On March 30, the Equity Trust filed a motion to dismiss the suit, which is currently pending.)

In seeking shareholder approval to issue preferred stock, Gabelli Equity Trust management noted in the 1998 Annual Meeting proxy that the Company "had been able to earn a considerably higher return for the common stockholders in the past than it would be likely to have to pay on the Preferred Stock." Management reported in the 1998 proxy material that this is what happened in the case of two other Gabelli closed-end funds - the Gabelli Convertible Securities Fund and the Gabelli Global Multimedia Trust - both of which issued preferred stock in 1997.

From the dates of the Preferred issues - May 16, 1997 for the Convertible Securities Fund, and June 4, 1997 for the Global Multimedia Trust - through April 15, 1998, "the market value of those funds has increased both absolutely and relative to the net asset value (NAV)." A table in the 1998 proxy material showed that the market price of the Convertible Fund, which was at a discount of 15.3% of NAV just prior to the issuance of the preferred, rose to a discount of just 5.5% as of April 15, 1998. For the Global Multimedia Trust, the discount from NAV narrowed from 20.5% just before the preferred was issued to 10.5% on April 15 this year.

The Company added that it "intends to complete the issuance of the Preferred Stock as soon as practical if market conditions continue to be favorable." The shareholders have also conferred authority upon the Board of Directors to authorize the issuance of preferred stock in the future having such terms as the Board may fix at that time.