false
0000921671
0000921671
2023-01-01
2023-12-31
0000921671
ggt:CommonStocksMember
2023-01-01
2023-12-31
0000921671
ggt:CommonSharesMember
2023-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2023-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2022-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2021-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2020-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2019-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2023-01-01
2023-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2022-01-01
2022-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2021-01-01
2021-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2020-01-01
2020-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2019-01-01
2019-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2023-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2022-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2021-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2020-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2019-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2023-01-01
2023-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2022-01-01
2022-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2021-01-01
2021-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2020-01-01
2020-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2019-01-01
2019-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2023-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2022-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2021-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2020-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2019-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2023-01-01
2023-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2022-01-01
2022-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2021-01-01
2021-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2020-01-01
2020-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2019-01-01
2019-12-31
0000921671
ggt:CumulativePreferredStocksMember
2023-01-01
2023-12-31
0000921671
ggt:PurchaseTransactionMember
2023-01-01
2023-12-31
0000921671
ggt:SaleTransactionMember
2023-01-01
2023-12-31
0000921671
ggt:DividendsOnPreferredSharesNotIncludedMember
2023-01-01
2023-12-31
0000921671
2023-12-31
0000921671
ggt:CommonStocksMember
2023-12-31
0000921671
ggt:CommonStocksMember
2023-12-31
2023-12-31
0000921671
ggt:CommonStocksMember
2022-01-01
2022-03-31
0000921671
ggt:CommonStocksMember
2022-04-01
2022-06-30
0000921671
ggt:CommonStocksMember
2022-07-01
2022-09-30
0000921671
ggt:CommonStocksMember
2022-10-01
2022-12-31
0000921671
ggt:CommonStocksMember
2023-01-01
2023-03-31
0000921671
ggt:CommonStocksMember
2023-04-01
2023-06-30
0000921671
ggt:CommonStocksMember
2023-07-01
2023-09-30
0000921671
ggt:CommonStocksMember
2023-10-01
2023-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2023-12-31
2023-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2023-12-31
2023-12-31
0000921671
ggt:SeriesGCumulativePreferredStockMember
2023-12-31
2023-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2018-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2017-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2016-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2015-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2014-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2018-01-01
2018-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2017-01-01
2017-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2016-01-01
2016-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2015-01-01
2015-12-31
0000921671
ggt:SeriesBCumulativePreferredStockMember
2014-01-01
2014-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2018-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2017-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2016-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2015-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2014-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2018-01-01
2018-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2017-01-01
2017-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2016-01-01
2016-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2015-01-01
2015-12-31
0000921671
ggt:SeriesCCumulativePreferredStockMember
2014-01-01
2014-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2018-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2017-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2016-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2015-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2014-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2018-01-01
2018-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2017-01-01
2017-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2016-01-01
2016-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2015-01-01
2015-12-31
0000921671
ggt:SeriesECumulativePreferredStockMember
2014-01-01
2014-12-31
0000921671
ggt:MarketRiskMember
2023-01-01
2023-12-31
0000921671
ggt:InterestRateRiskGenerallyMember
2023-01-01
2023-12-31
0000921671
ggt:InflationRiskMember
2023-01-01
2023-12-31
0000921671
ggt:ConvertibleSecuritiesRiskMember
2023-01-01
2023-12-31
0000921671
ggt:EquityRiskMember
2023-01-01
2023-12-31
0000921671
ggt:CommonStockRiskMember
2023-01-01
2023-12-31
0000921671
ggt:PreferredStockRiskMember
2023-01-01
2023-12-31
0000921671
ggt:WarrantsAndRightsRiskMember
2023-01-01
2023-12-31
0000921671
ggt:NonInvestmentGradeSecuritiesRiskMember
2023-01-01
2023-12-31
0000921671
ggt:ShortSalesRiskMember
2023-01-01
2023-12-31
0000921671
ggt:IndustryConcentrationRiskMember
2023-01-01
2023-12-31
0000921671
ggt:SmallerCompaniesInvestmentRiskMember
2023-01-01
2023-12-31
0000921671
ggt:MarketValueAndNetAssetValueMember
2023-01-01
2023-12-31
0000921671
ggt:ForeignSecuritiesRiskMember
2023-01-01
2023-12-31
0000921671
ggt:SpecialRisksRelatedToInvestmentInDerivativeTransactionsMember
2023-01-01
2023-12-31
0000921671
ggt:SecuritiesOfInvestmentCompaniesRiskMember
2023-01-01
2023-12-31
0000921671
ggt:LongTermObjectiveNotCompleteInvestmentProgramRiskMember
2023-01-01
2023-12-31
0000921671
ggt:ManagementRiskMember
2023-01-01
2023-12-31
0000921671
ggt:DependenceOnKeyPersonnelMember
2023-01-01
2023-12-31
0000921671
ggt:MarketDisruptionAndGeopoliticalRiskMember
2023-01-01
2023-12-31
0000921671
ggt:EconomicEventsAndMarketRiskMember
2023-01-01
2023-12-31
0000921671
ggt:RegulationAndGovernmentInterventionRiskMember
2023-01-01
2023-12-31
0000921671
ggt:LIBORRiskMember
2023-01-01
2023-12-31
0000921671
ggt:LegalTaxAndRegulatoryRiskMember
2023-01-01
2023-12-31
0000921671
ggt:Act1940RegulationMember
2023-01-01
2023-12-31
0000921671
ggt:LegislationRiskMember
2023-01-01
2023-12-31
0000921671
ggt:RelianceOnServiceProvidersRiskMember
2023-01-01
2023-12-31
0000921671
ggt:LoansOfPortfolioSecuritiesRiskMember
2023-01-01
2023-12-31
0000921671
ggt:CyberSecurityRiskMember
2023-01-01
2023-12-31
0000921671
ggt:MisconductOfEmployeesAndOfServiceProvidersRiskMember
2023-01-01
2023-12-31
0000921671
ggt:AntiTakeoverProvisionsMember
2023-01-01
2023-12-31
0000921671
ggt:SpecialRisksToHoldersOfCommonStockMember
2023-01-01
2023-12-31
0000921671
ggt:CommonStockDistributionPolicyRiskMember
2023-01-01
2023-12-31
0000921671
ggt:SpecialRisksToHoldersOfFixedRatePreferredSharesMember
2023-01-01
2023-12-31
0000921671
ggt:SpecialRisksForHoldersOfAuctionRatePreferredStockMember
2023-01-01
2023-12-31
0000921671
ggt:SpecialRiskForHoldersOfSubscriptionRightsMember
2023-01-01
2023-12-31
0000921671
ggt:AdditionalRisksRelatingToDerivativeInvestmentsMember
2023-01-01
2023-12-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
xbrli:pure
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08476
The Gabelli Multimedia Trust Inc.
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
John C. Ball
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-800-422-3554
Date of fiscal year end: December 31
Date of reporting period: December 31, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
|
Item 1. |
Reports to Stockholders. |
|
(a) |
The Report to Shareholders is attached herewith. |
The
Gabelli Multimedia Trust Inc.
Annual
Report — December 31, 2023
(Y)our
Portfolio Management Team
|
|
|
|
|
|
Mario
J. Gabelli, CFA Chief Investment Officer |
|
Christopher
J. Marangi Co-Chief Investment Officer BA, Williams College MBA, Columbia Business School |
|
To
Our Stockholders,
For
the year ended December 31, 2023, the net asset value (NAV) total return of The Gabelli Multimedia Trust Inc. (the Fund) was 19.9%,
compared with a total return of 38.1% for the Morgan Stanley Capital International (MSCI) AC World Communication Services Index. The
total return for the Fund’s publicly traded shares was 22.8%. The Fund’s NAV per share was $3.73, while the price of the
publicly traded shares closed at $5.67 on the New York Stock Exchange (NYSE). See page 3 for additional performance information.
Enclosed
are the financial statements, including the schedule of investments, as of December 31, 2023.
Investment
Objective and Strategy (Unaudited)
The
Gabelli Multimedia Trust is a diversified, closed-end management investment company whose primary objective is long term growth of capital,
with income as a secondary objective. The Fund seeks opportunities for long term growth within the context of two main investment universes:
companies involved in creativity, as it relates to the development of intellectual property rights (copyrights); and companies involved
in distribution as it relates to the delivery of these copyrights. Additionally, the Fund will invest in companies participating in emerging
technological advances in interactive services and products.
As
permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual
shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports
will be made available on the Fund’s website (www.gabelli.com), and you will be notified by mail each time a report is posted
and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you
will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge,
please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email
request to info@gabelli.com. |
Performance
Discussion (Unaudited)
After
ending 2022 as the weakest sector in the S&P 500, Communications Services (the primary area of focus for the Fund) rebounded strongly
in 2023 driven by the performance of the Magnificent Seven stocks. Continued demand for live events and travel and the prospect for renewed
financial engineering supported Fund returns while more highly leveraged companies tended to be a drag on performance.
The
top contributor for the fiscal year was Sony Group Corporation (6.6% of total investments as of December 31, 2023), which designs,
develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets internationally.
Additionally, top contributors to (y)our portfolio for the fiscal year included five of the so-called “Magnificent Seven”
stocks: Alphabet Inc. (3.3%), the world’s third-largest technology company by revenue and one of the world’s most valuable
companies; Meta Platforms Inc. (2.4%), is an American multinational technology conglomerate which owns and operates Facebook, Instagram,
Threads, and WhatsApp, among other products and services; Apple (1.8%); Amazon (0.3%); Microsoft (1.4%); NVIDIA (no longer held), and
Tesla (no longer held). In 2023, the Magnificent Seven stocks logged an impressive average return of 111%, compared to a 24% return for
the broader S&P 500.
Detractors
included Grupo Televisa SAB (1.5%), a Spanish-speaking media company in Mexico and internationally operating through three segments:
Cable, Sky, and Other Businesses. Another detractor included Cogeco Communications Inc. (0.8%), which operates as a telecommunications
corporation in Canada and the United States.
Thank
you for your investment in The Gabelli Multimedia Trust Inc.
We
appreciate your confidence and trust.
The
views expressed reflect the opinions of the Fund’s portfolio managers and Gabelli Funds, LLC, the Adviser, as of the date of
this report and are subject to change without notice based on changes in market, economic, or other conditions. These views are not
intended to be a forecast of future events and are no guarantee of future results. |
Comparative
Results
Average
Annual Returns through December 31, 2023 (a) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Since
Inception |
|
|
|
1
Year |
|
|
5
Year |
|
|
10
Year |
|
|
15
Year |
|
|
20
Year |
|
|
25
Year |
|
|
(11/15/94) |
|
The
Gabelli Multimedia Trust Inc. (GGT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAV
Total Return (b) |
|
|
19.94 |
% |
|
|
2.36 |
% |
|
|
2.30 |
% |
|
|
9.66 |
% |
|
|
4.74 |
% |
|
|
4.81 |
% |
|
|
6.95 |
% |
Investment
Total Return (c) |
|
|
22.84 |
|
|
|
9.06 |
|
|
|
4.50 |
|
|
|
13.56 |
|
|
|
7.49 |
|
|
|
6.91 |
|
|
|
8.50 |
|
MSCI
AC World Communication Services Index |
|
|
38.13 |
|
|
|
8.98 |
|
|
|
4.47 |
|
|
|
7.09 |
|
|
|
6.55 |
|
|
|
3.15 |
|
|
|
N/A |
(d) |
|
(a) |
Returns
represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will
fluctuate. The Fund’s use of leverage may magnify the volatility of net asset value changes versus funds that do not employ
leverage. When shares are sold, they may be worth more or less than their original cost. Current performance may be lower or higher
than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. The MSCI
AC World Communication Services Index is an unmanaged index that measures the performance of securities in the Communication Services
sector from around the world. Dividends are considered reinvested. You cannot invest directly in an index. |
|
(b) |
Total
returns and average annual returns reflect changes in the NAV per share, reinvestment of distributions at NAV on the ex-dividend
date, and adjustments for rights offerings and are net of expenses. Since inception return is based on an initial NAV of $7.50. |
|
(c) |
Total
returns and average annual returns reflect changes in closing market values on the NYSE, reinvestment of distributions, and adjustments
for rights offerings. Since inception return is based on an initial offering price of $7.50. |
|
(d) |
The
MSCI AC World Communication Services Index inception date is December 30, 1994. |
Investors
should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing.
COMPARISON
OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE
GABELLI MULTIMEDIA TRUST INC. (INVESTMENT TOTAL RETURN) AND MSCI AC WORLD
COMMUNICATION
SERVICES INDEX (Unaudited)
Average
Annual Total Returns* |
|
1
Year |
5
Year |
10
Year |
Investment |
22.84% |
9.06% |
4.50% |
* Past performance is not predictive of future results. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the sale of Fund shares.
Summary
of Portfolio Holdings (Unaudited)
The
following table presents portfolio holdings as a percent of total investments as of December 31, 2023:
The
Gabelli Multimedia Trust Inc.
Entertainment |
|
|
26.8 |
% |
Computer
Software and Services |
|
|
7.9 |
% |
Electronics |
|
|
7.1 |
% |
Cable |
|
|
7.0 |
% |
Broadcasting |
|
|
6.9 |
% |
U.S.
Government Obligations |
|
|
6.7 |
% |
Hotels
and Gaming |
|
|
6.0 |
% |
Telecommunications:
National |
|
|
5.5 |
% |
Wireless
Communications |
|
|
3.9 |
% |
Real
Estate |
|
|
2.6 |
% |
Telecommunications |
|
|
2.1 |
% |
Business
Services: Advertising |
|
|
2.1 |
% |
Publishing |
|
|
2.0 |
% |
Consumer
Products |
|
|
1.9 |
% |
Telecommunications:
Regional |
|
|
1.8 |
% |
Computer
Hardware |
|
|
1.8 |
% |
Equipment |
|
|
1.7 |
% |
Telecommunications:
Long Distance |
|
|
1.2 |
% |
Business
Services |
|
|
1.2 |
% |
Retail |
|
|
0.8 |
% |
Satellite |
|
|
0.7 |
% |
Diversified
Industrial |
|
|
0.6 |
% |
Consumer
Services |
|
|
0.6 |
% |
Food
and Beverage |
|
|
0.4 |
% |
Financial
Services |
|
|
0.4 |
% |
Information
Technology |
|
|
0.3 |
% |
Closed-End
Funds |
|
|
0.0 |
%* |
|
|
|
100.0 |
% |
|
* |
Amount represents less than
0.05%. |
The
Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the SEC) for the first and third quarters
of each fiscal year on Form N-PORT. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI
(800-422-3554). The Fund’s Form N-PORT is available on the SEC’s website at www.sec.gov and may also be reviewed and copied
at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained
by calling 800-SEC-0330.
Proxy
Voting
The
Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 of
each year. A description of the Fund’s proxy voting policies, procedures, and how each Fund voted proxies relating to portfolio
securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at
One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
The
Gabelli Multimedia Trust Inc.
Schedule
of Investments — December 31, 2023
|
|
|
|
|
|
|
|
Market |
|
Shares |
|
|
|
|
Cost |
|
|
Value |
|
|
|
|
|
COMMON
STOCKS — 92.9% |
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTION
COMPANIES — 52.9% |
|
|
|
|
|
|
|
|
|
|
|
|
Broadcasting
— 6.8% |
|
|
|
|
|
|
|
|
|
10,000 |
|
|
Asahi
Broadcasting Group Holdings Corp. |
|
$ |
42,567 |
|
|
$ |
47,163 |
|
|
34,000 |
|
|
Beasley
Broadcast Group Inc., Cl. A† |
|
|
63,015 |
|
|
|
29,852 |
|
|
6,000 |
|
|
Chubu-Nippon
Broadcasting Co. Ltd. |
|
|
43,833 |
|
|
|
27,149 |
|
|
19,000 |
|
|
Cogeco
Inc. |
|
|
501,711 |
|
|
|
819,765 |
|
|
30,000 |
|
|
Corus
Entertainment Inc., OTC, Cl. B |
|
|
101,661 |
|
|
|
16,577 |
|
|
100,000 |
|
|
Corus
Entertainment Inc., Toronto, Cl. B |
|
|
97,587 |
|
|
|
53,583 |
|
|
18,000 |
|
|
Fox
Corp., Cl. A |
|
|
716,028 |
|
|
|
534,060 |
|
|
30,000 |
|
|
Fox
Corp., Cl. B |
|
|
910,638 |
|
|
|
829,500 |
|
|
81,000 |
|
|
Grupo
Radio Centro SAB de CV, Cl. A† |
|
|
39,884 |
|
|
|
15,980 |
|
|
14,000 |
|
|
Informa
plc |
|
|
141,689 |
|
|
|
139,406 |
|
|
215,000 |
|
|
ITV
plc |
|
|
363,886 |
|
|
|
173,419 |
|
|
8,000 |
|
|
Liberty
Broadband Corp., Cl. A† |
|
|
540,820 |
|
|
|
645,120 |
|
|
34,000 |
|
|
Liberty
Broadband Corp., Cl. C† |
|
|
3,944,772 |
|
|
|
2,740,060 |
|
|
59,000 |
|
|
Liberty
Media Corp.-Liberty SiriusXM† |
|
|
1,835,024 |
|
|
|
1,698,020 |
|
|
19,000 |
|
|
Liberty
Media Corp.-Liberty SiriusXM, Cl. A† |
|
|
366,489 |
|
|
|
546,060 |
|
|
68,566 |
|
|
Media
Prima Berhad |
|
|
34,965 |
|
|
|
6,939 |
|
|
5,000 |
|
|
Nexstar
Media Group Inc. |
|
|
605,658 |
|
|
|
783,750 |
|
|
7,000 |
|
|
Nippon
Television Holdings Inc. |
|
|
96,482 |
|
|
|
76,429 |
|
|
4,000 |
|
|
NRJ
Group |
|
|
17,822 |
|
|
|
32,412 |
|
|
3,000 |
|
|
RTL
Group SA |
|
|
107,299 |
|
|
|
115,782 |
|
|
102,000 |
|
|
Sinclair
Inc. |
|
|
2,572,521 |
|
|
|
1,329,060 |
|
|
33,000 |
|
|
TBS
Holdings Inc. |
|
|
675,978 |
|
|
|
701,894 |
|
|
64,000 |
|
|
TEGNA
Inc. |
|
|
1,003,495 |
|
|
|
979,200 |
|
|
15,000 |
|
|
Television
Broadcasts Ltd.† |
|
|
28,715 |
|
|
|
6,070 |
|
|
21,000 |
|
|
Television
Francaise 1 SA |
|
|
208,838 |
|
|
|
165,410 |
|
|
240,000 |
|
|
TV
Azteca SAB de CV†(a) |
|
|
58,305 |
|
|
|
7,067 |
|
|
|
|
|
|
|
|
15,119,682 |
|
|
|
12,519,727 |
|
|
|
|
|
Business
Services — 1.1% |
|
|
|
|
|
|
|
|
|
6,000 |
|
|
Carlisle
Support Sevices Group Ltd.†(a) |
|
|
200 |
|
|
|
612 |
|
|
3,000 |
|
|
Fluent
Inc.† |
|
|
4,055 |
|
|
|
2,010 |
|
|
5,500 |
|
|
Impellam
Group plc |
|
|
7,855 |
|
|
|
59,590 |
|
|
4,500 |
|
|
S&P
Global Inc. |
|
|
1,586,108 |
|
|
|
1,982,340 |
|
|
|
|
|
|
|
|
1,598,218 |
|
|
|
2,044,552 |
|
|
|
|
|
|
|
|
|
Market |
|
Shares |
|
|
|
|
Cost |
|
|
Value |
|
|
|
|
|
Cable
— 7.0% |
|
|
|
|
|
|
|
|
|
43,500 |
|
|
AMC
Networks Inc., Cl. A† |
|
$ |
829,795 |
|
|
$ |
817,365 |
|
|
2,100 |
|
|
Charter
Communications Inc., Cl. A† |
|
|
1,136,475 |
|
|
|
816,228 |
|
|
31,000 |
|
|
Cogeco
Communications Inc. |
|
|
712,663 |
|
|
|
1,388,514 |
|
|
115,000 |
|
|
Comcast
Corp., Cl. A |
|
|
4,664,432 |
|
|
|
5,042,750 |
|
|
19,400 |
|
|
MultiChoice
Group† |
|
|
133,926 |
|
|
|
85,925 |
|
|
82,500 |
|
|
Rogers
Communications Inc., New York, Cl. B |
|
|
3,815,432 |
|
|
|
3,861,825 |
|
|
232,000 |
|
|
WideOpenWest
Inc.† |
|
|
1,477,851 |
|
|
|
939,600 |
|
|
|
|
|
|
|
|
12,770,574 |
|
|
|
12,952,207 |
|
|
|
|
|
Computer
Software and Services — 0.2% |
|
|
|
|
|
|
|
|
|
19,000 |
|
|
SolarWinds
Corp.† |
|
|
304,290 |
|
|
|
237,310 |
|
|
2,500 |
|
|
Tencent
Holdings Ltd. |
|
|
117,755 |
|
|
|
94,000 |
|
|
|
|
|
|
|
|
422,045 |
|
|
|
331,310 |
|
|
|
|
|
Consumer
Services — 0.6% |
|
|
|
|
|
|
|
|
|
59,000 |
|
|
Bollore
SE |
|
|
333,015 |
|
|
|
368,327 |
|
|
150 |
|
|
Cie
de L’Odet SE |
|
|
219,639 |
|
|
|
240,772 |
|
|
9,000 |
|
|
IAC
Inc.† |
|
|
625,229 |
|
|
|
471,420 |
|
|
|
|
|
|
|
|
1,177,883 |
|
|
|
1,080,519 |
|
|
|
|
|
Diversified
Industrial — 0.6% |
|
|
|
|
|
|
|
|
|
29,000 |
|
|
Bouygues
SA |
|
|
967,023 |
|
|
|
1,092,336 |
|
|
6,000 |
|
|
Malaysian
Resources Corp. Berhad |
|
|
4,297 |
|
|
|
581 |
|
|
|
|
|
|
|
|
971,320 |
|
|
|
1,092,917 |
|
|
|
|
|
Entertainment
— 16.2% |
|
|
|
|
|
|
|
|
|
58,000 |
|
|
Atlanta
Braves Holdings Inc., Cl. A† |
|
|
1,542,078 |
|
|
|
2,481,240 |
|
|
121,571 |
|
|
Atlanta
Braves Holdings Inc., Cl. C† |
|
|
2,624,177 |
|
|
|
4,811,780 |
|
|
17,500 |
|
|
Entravision
Communications Corp., Cl. A |
|
|
74,439 |
|
|
|
72,975 |
|
|
850,000 |
|
|
Grupo
Televisa SAB, ADR |
|
|
6,660,999 |
|
|
|
2,839,000 |
|
|
9,500 |
|
|
Liberty
Media Corp.-Liberty Formula One, Cl. A† |
|
|
286,596 |
|
|
|
550,810 |
|
|
30,000 |
|
|
Liberty
Media Corp.-Liberty Formula One, Cl. C† |
|
|
1,125,464 |
|
|
|
1,893,900 |
|
|
5,092 |
|
|
Liberty
Media Corp.-Liberty Live, Cl. A† |
|
|
126,323 |
|
|
|
186,113 |
|
|
20,264 |
|
|
Liberty
Media Corp.-Liberty Live, Cl. C† |
|
|
682,646 |
|
|
|
757,671 |
|
|
4,000 |
|
|
M6
Metropole Television SA |
|
|
35,208 |
|
|
|
57,140 |
|
|
33,900 |
|
|
Madison
Square Garden Entertainment Corp.† |
|
|
1,488,998 |
|
|
|
1,077,681 |
|
|
27,700 |
|
|
Madison
Square Garden Sports Corp.† |
|
|
4,782,072 |
|
|
|
5,036,691 |
|
|
12,800 |
|
|
Naspers
Ltd., Cl. N |
|
|
1,944,735 |
|
|
|
2,188,788 |
|
|
5,600 |
|
|
Netflix
Inc.† |
|
|
2,232,188 |
|
|
|
2,726,528 |
|
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Schedule
of Investments (Continued) — December 31, 2023
|
|
|
|
|
|
|
|
Market |
|
Shares |
|
|
|
|
Cost |
|
|
Value |
|
|
|
|
|
COMMON
STOCKS (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTION
COMPANIES (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
Entertainment
(Continued) |
|
|
|
|
|
|
|
|
|
8,000 |
|
|
Reading
International Inc., Cl. A† |
|
$ |
48,595 |
|
|
$ |
15,280 |
|
|
7,700 |
|
|
Reading
International Inc., Cl. B† |
|
|
81,951 |
|
|
|
108,416 |
|
|
2,200 |
|
|
Roku
Inc.† |
|
|
198,659 |
|
|
|
201,652 |
|
|
47,000 |
|
|
Sphere
Entertainment Co.† |
|
|
1,646,607 |
|
|
|
1,596,120 |
|
|
12,000 |
|
|
Take-Two
Interactive Software Inc.† |
|
|
1,564,037 |
|
|
|
1,931,400 |
|
|
17,000 |
|
|
TKO
Group Holdings Inc. |
|
|
1,193,889 |
|
|
|
1,386,860 |
|
|
|
|
|
|
|
|
28,339,661 |
|
|
|
29,920,045 |
|
|
|
|
|
Equipment
— 1.7% |
|
|
|
|
|
|
|
|
|
6,500 |
|
|
Amphenol
Corp., Cl. A |
|
|
6,332 |
|
|
|
644,345 |
|
|
48,500 |
|
|
Corning
Inc. |
|
|
1,604,682 |
|
|
|
1,476,825 |
|
|
13,000 |
|
|
Flex
Ltd.† |
|
|
233,101 |
|
|
|
395,980 |
|
|
5,000 |
|
|
QUALCOMM
Inc. |
|
|
487,064 |
|
|
|
723,150 |
|
|
|
|
|
|
|
|
2,331,179 |
|
|
|
3,240,300 |
|
|
|
|
|
Financial
Services — 0.4% |
|
|
|
|
|
|
|
|
|
4,200 |
|
|
Jardine
Matheson Holdings Ltd. |
|
|
243,363 |
|
|
|
173,082 |
|
|
34,500 |
|
|
Kinnevik
AB, Cl. A† |
|
|
458,167 |
|
|
|
365,316 |
|
|
95,000 |
|
|
Orascom
Financial Holding SAE† |
|
|
13,907 |
|
|
|
1,002 |
|
|
2,000 |
|
|
PayPal
Holdings Inc.† |
|
|
190,519 |
|
|
|
122,820 |
|
|
32,750 |
|
|
Waterloo
Investment Holdings Ltd.†(a) |
|
|
10,341 |
|
|
|
16,375 |
|
|
|
|
|
|
|
|
916,297 |
|
|
|
678,595 |
|
|
|
|
|
Food
and Beverage — 0.4% |
|
|
|
|
|
|
|
|
|
2,400 |
|
|
Pernod
Ricard SA |
|
|
148,081 |
|
|
|
423,254 |
|
|
2,500 |
|
|
Remy
Cointreau SA |
|
|
302,970 |
|
|
|
317,386 |
|
|
|
|
|
|
|
|
451,051 |
|
|
|
740,640 |
|
|
|
|
|
Information
Technology — 0.3% |
|
|
|
|
|
|
|
|
|
17,872 |
|
|
Prosus
NV |
|
|
687,983 |
|
|
|
532,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
Estate — 1.9% |
|
|
|
|
|
|
|
|
|
16,200 |
|
|
American
Tower Corp., REIT |
|
|
2,687,178 |
|
|
|
3,497,256 |
|
|
15,000 |
|
|
Midway
Investments†(a) |
|
|
95 |
|
|
|
191 |
|
|
|
|
|
|
|
|
2,687,273 |
|
|
|
3,497,447 |
|
|
|
|
|
Retail
— 0.5% |
|
|
|
|
|
|
|
|
|
4,000 |
|
|
Amazon.com
Inc.† |
|
|
549,136 |
|
|
|
607,760 |
|
|
1,000 |
|
|
Best
Buy Co. Inc. |
|
|
30,800 |
|
|
|
78,280 |
|
|
250 |
|
|
Meituan,
Cl. B† |
|
|
6,044 |
|
|
|
2,622 |
|
|
215,000 |
|
|
Qurate
Retail Inc., Cl. A† |
|
|
158,421 |
|
|
|
188,233 |
|
|
|
|
|
|
|
|
744,401 |
|
|
|
876,895 |
|
|
|
|
|
Satellite
— 0.7% |
|
|
|
|
|
|
|
|
|
43,000 |
|
|
EchoStar
Corp., Cl. A† |
|
|
705,605 |
|
|
|
712,510 |
|
|
|
|
|
|
|
|
|
Market |
|
Shares |
|
|
|
|
Cost |
|
|
Value |
|
|
10,000 |
|
|
Iridium
Communications Inc. |
|
$ |
456,101 |
|
|
$ |
411,600 |
|
|
250,000 |
|
|
PT
Indosat Tbk |
|
|
52,779 |
|
|
|
152,221 |
|
|
3,000 |
|
|
SKY
Perfect JSAT Holdings Inc. |
|
|
15,472 |
|
|
|
14,851 |
|
|
|
|
|
|
|
|
1,229,957 |
|
|
|
1,291,182 |
|
|
|
|
|
Telecommunications
— 2.1% |
|
|
|
|
|
|
|
|
|
34,000 |
|
|
Eurotelesites
AG† |
|
|
126,292 |
|
|
|
136,249 |
|
|
42,000 |
|
|
GCI
Liberty Inc., Escrow† |
|
|
0 |
|
|
|
0 |
|
|
47,500 |
|
|
Liberty
Global Ltd., Cl. A† |
|
|
811,680 |
|
|
|
844,075 |
|
|
151,000 |
|
|
Liberty
Global Ltd., Cl. C† |
|
|
4,269,633 |
|
|
|
2,814,640 |
|
|
6,000 |
|
|
Viasat
Inc.† |
|
|
126,934 |
|
|
|
167,700 |
|
|
|
|
|
|
|
|
5,334,539 |
|
|
|
3,962,664 |
|
|
|
|
|
Telecommunications:
Long Distance — 1.2% |
|
|
|
|
|
|
|
|
|
15,000 |
|
|
BCE
Inc. |
|
|
670,902 |
|
|
|
590,582 |
|
|
147,000 |
|
|
Telesat
Corp.† |
|
|
3,972,800 |
|
|
|
1,533,210 |
|
|
2,400 |
|
|
Telstra
Group Ltd., ADR |
|
|
30,324 |
|
|
|
32,196 |
|
|
4,203 |
|
|
TIM
SA, ADR |
|
|
108,533 |
|
|
|
77,629 |
|
|
|
|
|
|
|
|
4,782,559 |
|
|
|
2,233,617 |
|
|
|
|
|
Telecommunications:
National — 5.5% |
|
|
|
|
|
|
|
|
|
21,000 |
|
|
Deutsche
Telekom AG |
|
|
390,482 |
|
|
|
504,229 |
|
|
54,000 |
|
|
Deutsche
Telekom AG, ADR |
|
|
723,262 |
|
|
|
1,303,020 |
|
|
11,500 |
|
|
Elisa
Oyj |
|
|
113,397 |
|
|
|
531,557 |
|
|
1,500 |
|
|
Freenet
AG |
|
|
32,315 |
|
|
|
41,961 |
|
|
3,605 |
|
|
Hellenic
Telecommunications Organization SA |
|
|
41,551 |
|
|
|
51,339 |
|
|
5,600 |
|
|
Itissalat
Al-Maghrib |
|
|
83,181 |
|
|
|
52,548 |
|
|
50,000 |
|
|
Koninklijke
KPN NV |
|
|
162,831 |
|
|
|
172,106 |
|
|
90,000 |
|
|
Liberty
Latin America Ltd., Cl. A† |
|
|
955,115 |
|
|
|
657,900 |
|
|
1,000 |
|
|
Magyar
Telekom Telecommunications plc, ADR |
|
|
9,280 |
|
|
|
9,800 |
|
|
205,000 |
|
|
Megacable
Holdings SAB de CV |
|
|
657,873 |
|
|
|
456,937 |
|
|
500,000 |
|
|
Nippon
Telegraph & Telephone Corp. |
|
|
230,089 |
|
|
|
610,993 |
|
|
5,000 |
|
|
Oi
SA, ADR† |
|
|
1,613 |
|
|
|
3 |
|
|
9,000 |
|
|
Orange
SA, ADR |
|
|
125,267 |
|
|
|
102,870 |
|
|
22,000 |
|
|
PLDT
Inc., ADR |
|
|
370,294 |
|
|
|
515,460 |
|
|
17,200 |
|
|
Shenandoah
Telecommunications Co. |
|
|
532,315 |
|
|
|
371,864 |
|
|
55,000 |
|
|
Sitios
Latinoamerica SAB de CV† |
|
|
31,567 |
|
|
|
22,251 |
|
|
20,000 |
|
|
Swisscom
AG, ADR |
|
|
529,394 |
|
|
|
1,203,600 |
|
|
10,000 |
|
|
Telecom
Argentina SA, ADR |
|
|
32,356 |
|
|
|
71,500 |
|
|
40,000 |
|
|
Telecom
Italia SpA† |
|
|
47,603 |
|
|
|
12,991 |
|
|
21,000 |
|
|
Telefonica
Brasil SA, ADR |
|
|
275,332 |
|
|
|
229,740 |
|
|
195,000 |
|
|
Telefonica
SA, ADR |
|
|
1,060,441 |
|
|
|
760,500 |
|
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Schedule
of Investments (Continued) — December 31, 2023
|
|
|
|
|
|
|
|
Market |
|
Shares |
|
|
|
|
Cost |
|
|
Value |
|
|
|
|
|
COMMON
STOCKS (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTION
COMPANIES (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications:
National (Continued) |
|
|
|
|
|
|
|
|
|
136,000 |
|
|
Telekom
Austria AG |
|
$ |
784,264 |
|
|
$ |
1,148,550 |
|
|
15,172 |
|
|
Telia
Co. AB |
|
|
42,639 |
|
|
|
38,705 |
|
|
6,000 |
|
|
Telkom
Indonesia Persero Tbk PT, ADR |
|
|
12,340 |
|
|
|
154,560 |
|
|
10,000 |
|
|
VEON
Ltd., ADR† |
|
|
219,563 |
|
|
|
197,000 |
|
|
16,000 |
|
|
Verizon
Communications Inc. |
|
|
931,681 |
|
|
|
603,200 |
|
|
40,000 |
|
|
Vodafone
Group plc, ADR |
|
|
397,025 |
|
|
|
348,000 |
|
|
|
|
|
|
|
|
8,793,070 |
|
|
|
10,173,184 |
|
|
|
|
|
Telecommunications:
Regional — 1.8% |
|
|
|
|
|
|
|
|
|
65,500 |
|
|
Orange
Belgium SA† |
|
|
1,604,053 |
|
|
|
976,168 |
|
|
50,000 |
|
|
Telephone
and Data Systems Inc. |
|
|
854,427 |
|
|
|
917,500 |
|
|
78,000 |
|
|
TELUS
Corp. |
|
|
508,046 |
|
|
|
1,387,620 |
|
|
|
|
|
|
|
|
2,966,526 |
|
|
|
3,281,288 |
|
|
|
|
|
Wireless
Communications — 3.9% |
|
|
|
|
|
|
|
|
|
1,000 |
|
|
Altice
USA Inc., Cl. A† |
|
|
2,605 |
|
|
|
3,250 |
|
|
52,500 |
|
|
America
Movil SAB de CV, ADR |
|
|
358,778 |
|
|
|
972,300 |
|
|
21,000 |
|
|
Anterix
Inc.† |
|
|
770,869 |
|
|
|
699,720 |
|
|
389,058 |
|
|
Jasmine
International PCL(a) |
|
|
21,005 |
|
|
|
23,937 |
|
|
18,500 |
|
|
Millicom
International Cellular SA, SDR† |
|
|
372,121 |
|
|
|
330,618 |
|
|
55,000 |
|
|
Operadora
De Sites Mexicanos SAB de CV |
|
|
65,801 |
|
|
|
77,118 |
|
|
19,000 |
|
|
Orascom
Investment Holding, GDR†(a) |
|
|
15,524 |
|
|
|
266 |
|
|
20,000 |
|
|
SK
Telecom Co. Ltd., ADR |
|
|
723,734 |
|
|
|
428,000 |
|
|
19,500 |
|
|
T-Mobile
US Inc. |
|
|
2,921,522 |
|
|
|
3,126,435 |
|
|
30,000 |
|
|
Turkcell
Iletisim Hizmetleri A/S, ADR |
|
|
165,006 |
|
|
|
144,300 |
|
|
33,000 |
|
|
United
States Cellular Corp.† |
|
|
926,788 |
|
|
|
1,370,820 |
|
|
|
|
|
|
|
|
6,343,753 |
|
|
|
7,176,764 |
|
|
|
|
|
TOTAL
DISTRIBUTION COMPANIES |
|
|
97,667,971 |
|
|
|
97,626,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COPYRIGHT/CREATIVITY
COMPANIES — 40.0% |
|
|
|
|
|
|
|
|
|
|
|
|
Business
Services — 0.1% |
|
|
|
|
|
|
|
|
|
1,700 |
|
|
Light
& Wonder Inc.† |
|
|
26,707 |
|
|
|
139,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business
Services: Advertising — 2.1% |
|
|
|
|
|
|
|
|
|
1,000 |
|
|
Boston
Omaha Corp., Cl. A† |
|
|
16,970 |
|
|
|
15,730 |
|
|
145,000 |
|
|
Clear
Channel Outdoor Holdings Inc.† |
|
|
157,974 |
|
|
|
263,900 |
|
|
2,500 |
|
|
comScore
Inc.† |
|
|
36,402 |
|
|
|
41,750 |
|
|
21,000 |
|
|
JCDecaux
SE† |
|
|
374,695 |
|
|
|
421,929 |
|
|
|
|
|
|
|
|
|
Market |
|
Shares |
|
|
|
|
Cost |
|
|
Value |
|
|
25,400 |
|
|
Lamar
Advertising Co., Cl. A, REIT |
|
$ |
1,972,200 |
|
|
$ |
2,699,512 |
|
|
10,820 |
|
|
Magnite
Inc.† |
|
|
22,112 |
|
|
|
101,059 |
|
|
1,500 |
|
|
Publicis
Groupe SA |
|
|
10,478 |
|
|
|
139,098 |
|
|
4,000 |
|
|
Ströeer
SE & Co. KGaA |
|
|
89,263 |
|
|
|
237,349 |
|
|
|
|
|
|
|
|
2,680,094 |
|
|
|
3,920,327 |
|
|
|
|
|
Computer
Hardware — 1.8% |
|
|
|
|
|
|
|
|
|
16,800 |
|
|
Apple
Inc. |
|
|
2,490,913 |
|
|
|
3,234,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computer
Software and Services — 7.7% |
|
|
|
|
|
|
|
|
|
43,000 |
|
|
Alphabet
Inc., Cl. A† |
|
|
4,874,713 |
|
|
|
6,006,670 |
|
|
25,500 |
|
|
eBay
Inc. |
|
|
953,347 |
|
|
|
1,112,310 |
|
|
12,500 |
|
|
Meta
Platforms Inc., Cl. A† |
|
|
4,179,143 |
|
|
|
4,424,500 |
|
|
7,000 |
|
|
Microsoft
Corp. |
|
|
2,607,488 |
|
|
|
2,632,280 |
|
|
300 |
|
|
Red
Violet Inc.† |
|
|
1,920 |
|
|
|
5,991 |
|
|
|
|
|
|
|
|
12,616,611 |
|
|
|
14,181,751 |
|
|
|
|
|
Consumer
Products — 1.9% |
|
|
|
|
|
|
|
|
|
13,000 |
|
|
Johnson
Outdoors Inc., Cl. A |
|
|
843,450 |
|
|
|
694,460 |
|
|
12,000 |
|
|
Nintendo
Co. Ltd. |
|
|
132,439 |
|
|
|
626,298 |
|
|
175,000 |
|
|
Nintendo
Co. Ltd., ADR |
|
|
971,420 |
|
|
|
2,273,250 |
|
|
|
|
|
|
|
|
1,947,309 |
|
|
|
3,594,008 |
|
|
|
|
|
Electronics
— 7.1% |
|
|
|
|
|
|
|
|
|
6,000 |
|
|
IMAX
Corp.† |
|
|
123,437 |
|
|
|
90,120 |
|
|
14,000 |
|
|
Intel
Corp. |
|
|
426,760 |
|
|
|
703,500 |
|
|
3,665 |
|
|
Koninklijke
Philips NV† |
|
|
36,692 |
|
|
|
85,505 |
|
|
128,000 |
|
|
Sony
Group Corp., ADR |
|
|
9,955,855 |
|
|
|
12,120,320 |
|
|
|
|
|
|
|
|
10,542,744 |
|
|
|
12,999,445 |
|
|
|
|
|
Entertainment
— 10.6% |
|
|
|
|
|
|
|
|
|
7,000 |
|
|
Capcom
Co. Ltd. |
|
|
184,198 |
|
|
|
226,184 |
|
|
79,200 |
|
|
GMM
Grammy Public Co. Ltd.† |
|
|
52,488 |
|
|
|
14,618 |
|
|
15,000 |
|
|
Lions
Gate Entertainment Corp., Cl. A† |
|
|
120,993 |
|
|
|
163,500 |
|
|
6,000 |
|
|
Lions
Gate Entertainment Corp., Cl. B† |
|
|
45,835 |
|
|
|
61,140 |
|
|
3,000 |
|
|
Live
Nation Entertainment Inc.† |
|
|
212,111 |
|
|
|
280,800 |
|
|
46,000 |
|
|
Manchester
United plc, Cl. A† |
|
|
803,246 |
|
|
|
937,480 |
|
|
85,000 |
|
|
Paramount
Global, Cl. A |
|
|
1,719,244 |
|
|
|
1,671,100 |
|
|
45,000 |
|
|
Paramount
Global, Cl. B |
|
|
1,291,094 |
|
|
|
665,550 |
|
|
16,000 |
|
|
Reservoir
Media Inc.† |
|
|
99,656 |
|
|
|
114,080 |
|
|
3,200 |
|
|
Spotify
Technology SA† |
|
|
325,267 |
|
|
|
601,312 |
|
|
7,000 |
|
|
Square
Enix Holdings Co. Ltd. |
|
|
281,835 |
|
|
|
251,355 |
|
|
17,176 |
|
|
STV
Group plc |
|
|
13,537 |
|
|
|
43,075 |
|
|
103,000 |
|
|
Tencent
Music Entertainment Group, ADR† |
|
|
949,246 |
|
|
|
928,030 |
|
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Schedule
of Investments (Continued) — December 31, 2023
|
|
|
|
|
|
|
|
Market |
|
Shares |
|
|
|
|
Cost |
|
|
Value |
|
|
|
|
|
COMMON
STOCKS (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
COPYRIGHT/CREATIVITY
COMPANIES (Continued) |
|
|
|
|
|
|
|
|
|
|
|
|
Entertainment
(Continued) |
|
|
|
|
|
|
|
|
|
30,500 |
|
|
The
Marcus Corp. |
|
$ |
442,936 |
|
|
$ |
444,690 |
|
|
20,700 |
|
|
The
Walt Disney Co. |
|
|
2,759,250 |
|
|
|
1,869,003 |
|
|
23,000 |
|
|
Ubisoft
Entertainment SA† |
|
|
961,566 |
|
|
|
586,783 |
|
|
29,000 |
|
|
Universal
Entertainment Corp. |
|
|
737,092 |
|
|
|
473,050 |
|
|
73,000 |
|
|
Universal
Music Group NV |
|
|
1,709,230 |
|
|
|
2,079,985 |
|
|
345,000 |
|
|
Vivendi
SE |
|
|
4,020,545 |
|
|
|
3,685,228 |
|
|
285,000 |
|
|
Warner
Bros Discovery Inc.† |
|
|
4,860,741 |
|
|
|
3,243,300 |
|
|
34,500 |
|
|
Warner
Music Group Corp., Cl. A |
|
|
1,018,827 |
|
|
|
1,234,755 |
|
|
|
|
|
|
|
|
22,608,937 |
|
|
|
19,575,018 |
|
|
|
|
|
Hotels
and Gaming — 6.0% |
|
|
|
|
|
|
|
|
|
18,500 |
|
|
Boyd
Gaming Corp. |
|
|
1,067,646 |
|
|
|
1,158,285 |
|
|
18,000 |
|
|
Caesars
Entertainment Inc.† |
|
|
809,604 |
|
|
|
843,840 |
|
|
1,200 |
|
|
Churchill
Downs Inc. |
|
|
17,424 |
|
|
|
161,916 |
|
|
71,000 |
|
|
Entain
plc |
|
|
1,189,473 |
|
|
|
899,753 |
|
|
1,000 |
|
|
Flutter
Entertainment plc† |
|
|
112,890 |
|
|
|
177,686 |
|
|
30,000 |
|
|
Full
House Resorts Inc.† |
|
|
131,758 |
|
|
|
161,100 |
|
|
20,000 |
|
|
Golden
Entertainment Inc. |
|
|
382,923 |
|
|
|
798,600 |
|
|
4,200 |
|
|
Greek
Organization of Football Prognostics SA |
|
|
45,444 |
|
|
|
71,264 |
|
|
58,000 |
|
|
International
Game Technology plc |
|
|
1,202,712 |
|
|
|
1,589,780 |
|
|
100,000 |
|
|
Mandarin
Oriental International Ltd. |
|
|
156,055 |
|
|
|
156,000 |
|
|
25,000 |
|
|
Melco
Resorts & Entertainment Ltd., ADR† |
|
|
164,261 |
|
|
|
221,750 |
|
|
20,000 |
|
|
MGM
China Holdings Ltd.† |
|
|
15,025 |
|
|
|
25,383 |
|
|
22,000 |
|
|
MGM
Resorts International |
|
|
602,821 |
|
|
|
982,960 |
|
|
4,000 |
|
|
Penn
Entertainment Inc.† |
|
|
26,016 |
|
|
|
104,080 |
|
|
23,000 |
|
|
Ryman
Hospitality Properties Inc., REIT |
|
|
1,428,405 |
|
|
|
2,531,380 |
|
|
13,500 |
|
|
Wynn
Resorts Ltd. |
|
|
1,272,246 |
|
|
|
1,229,985 |
|
|
|
|
|
|
|
|
8,624,703 |
|
|
|
11,113,762 |
|
|
|
|
|
Publishing
— 2.0% |
|
|
|
|
|
|
|
|
|
17,000 |
|
|
Arnoldo
Mondadori Editore SpA |
|
|
54,304 |
|
|
|
40,256 |
|
|
974,000 |
|
|
Bangkok
Post plc† |
|
|
47,100 |
|
|
|
31,389 |
|
|
2,800 |
|
|
Graham
Holdings Co., Cl. B |
|
|
1,568,919 |
|
|
|
1,950,256 |
|
|
19,500 |
|
|
Lee
Enterprises Inc.† |
|
|
339,318 |
|
|
|
153,465 |
|
|
1,000,000 |
|
|
Nation
Group Thailand Public Co. Ltd.†(a) |
|
|
26,673 |
|
|
|
1,465 |
|
|
28,000 |
|
|
News
Corp., Cl. A |
|
|
139,798 |
|
|
|
687,400 |
|
|
11,000 |
|
|
News
Corp., Cl. B |
|
|
220,022 |
|
|
|
282,920 |
|
|
6,779 |
|
|
Novus
Holdings Ltd.† |
|
|
3,053 |
|
|
|
1,675 |
|
|
41,000 |
|
|
The
E.W. Scripps Co., Cl. A† |
|
|
630,095 |
|
|
|
327,590 |
|
Shares |
|
|
|
|
Cost |
|
|
Market
Value |
|
|
1,000 |
|
|
Wolters
Kluwer NV |
|
$ |
22,656 |
|
|
$ |
142,078 |
|
|
|
|
|
|
|
|
3,051,938 |
|
|
|
3,618,494 |
|
|
|
|
|
Real
Estate — 0.7% |
|
|
|
|
|
|
|
|
|
600 |
|
|
Equinix
Inc., REIT |
|
|
461,521 |
|
|
|
483,234 |
|
|
57,500 |
|
|
Outfront
Media Inc., REIT |
|
|
907,960 |
|
|
|
802,700 |
|
|
|
|
|
|
|
|
1,369,481 |
|
|
|
1,285,934 |
|
|
|
|
|
TOTAL
COPYRIGHT/ CREATIVITY COMPANIES |
|
|
65,959,437 |
|
|
|
73,662,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
COMMON STOCKS |
|
|
163,627,408 |
|
|
|
171,289,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CLOSED-END
FUNDS — 0.0% |
|
|
|
|
|
|
|
|
|
8,000 |
|
|
Altaba
Inc., Escrow† |
|
|
0 |
|
|
|
19,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED
STOCKS — 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTION
COMPANIES — 0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Broadcasting
— 0.1% |
|
|
|
|
|
|
|
|
|
6,000 |
|
|
Liberty
Broadband Corp., Ser. A, 7.000% |
|
|
123,973 |
|
|
|
132,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
— 0.3% |
|
|
|
|
|
|
|
|
|
16,000 |
|
|
Qurate
Retail Inc., 8.000%, 03/15/31 |
|
|
503,552 |
|
|
|
575,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
DISTRIBUTION COMPANIES |
|
|
627,525 |
|
|
|
707,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
PREFERRED STOCKS |
|
|
627,525 |
|
|
|
707,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WARRANTS
— 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
DISTRIBUTION
COMPANIES — 0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
Real
Estate — 0.0% |
|
|
|
|
|
|
|
|
|
600 |
|
|
Malaysian
Resources Corp. Berhad, expire 10/29/27† |
|
|
0 |
|
|
|
11 |
|
Principal |
|
|
|
|
|
|
|
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
GOVERNMENT OBLIGATIONS — 6.7% |
|
|
|
|
|
|
|
|
$ |
12,545,000 |
|
|
U.S.
Treasury Bills, 5.281% to 5.446%††, 01/18/24 to 06/06/24 |
|
|
12,389,332 |
|
|
|
12,393,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
INVESTMENTS — 100.0% |
|
$ |
176,644,265 |
|
|
|
184,410,084 |
|
|
|
|
|
|
|
|
|
|
Other
Assets and Liabilities (Net) |
|
|
|
|
|
|
67,017 |
|
|
|
|
|
|
|
|
|
|
PREFERRED
STOCK |
|
|
|
|
|
|
|
|
(3,175,050
preferred shares outstanding) |
|
|
|
|
|
|
(79,626,000 |
) |
|
|
|
|
|
|
|
|
|
NET
ASSETS — COMMON STOCK |
|
|
|
|
|
|
|
|
(28,073,830
common shares outstanding) |
|
|
|
|
|
$ |
104,851,101 |
|
|
|
|
|
|
|
|
|
|
NET
ASSET VALUE PER COMMON SHARE |
|
|
|
|
|
|
|
|
($104,851,101
÷ 28,073,830 shares outstanding) |
|
|
|
|
|
$ |
3.73 |
|
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Schedule
of Investments (Continued) — December 31, 2023
|
(a) |
Security is valued using
significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
|
† |
Non-income producing security. |
|
†† |
Represents annualized yields
at dates of purchase. |
| ADR | American
Depositary Receipt |
| GDR | Global
Depositary Receipt |
| REIT | Real
Estate Investment Trust |
| SDR | Swedish
Depositary Receipt |
|
|
%
of Total |
|
|
Market |
|
Geographic
Diversification |
|
Investments |
|
|
Value |
|
North
America |
|
|
71.0 |
% |
|
$ |
130,971,909 |
|
Europe |
|
|
12.1 |
|
|
|
22,246,106 |
|
Japan |
|
|
9.5 |
|
|
|
17,448,935 |
|
Latin
America |
|
|
4.6 |
|
|
|
8,469,998 |
|
Asia/Pacific |
|
|
1.6 |
|
|
|
2,942,932 |
|
South
Africa |
|
|
1.2 |
|
|
|
2,276,388 |
|
Africa/Middle
East |
|
|
0.0 |
* |
|
|
53,816 |
|
Total
Investments |
|
|
100.0 |
% |
|
$ |
184,410,084 |
|
|
* |
Amount represents less than
0.05%. |
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Statement
of Assets and Liabilities
December
31, 2023
Assets: |
|
|
|
|
Investments,
at value (cost $176,644,265) |
|
$ |
184,410,084 |
|
Foreign
currency, at value (cost $1,077) |
|
|
1,119 |
|
Receivable
for investments sold |
|
|
6,076,074 |
|
Dividends
receivable |
|
|
390,363 |
|
Deferred
offering expense |
|
|
113,803 |
|
Prepaid
expenses |
|
|
9,590 |
|
Total
Assets |
|
|
191,001,033 |
|
Liabilities: |
|
|
|
|
Payable
to bank |
|
|
69,631 |
|
Distributions
payable |
|
|
56,820 |
|
Payable
for investments purchased |
|
|
5,836,695 |
|
Payable
for offering costs |
|
|
199,344 |
|
Payable
for investment advisory fees |
|
|
158,806 |
|
Payable
for payroll expenses |
|
|
29,645 |
|
Payable
for preferred shares repurchased |
|
|
9,426 |
|
Payable
for accounting fees |
|
|
3,750 |
|
Other
accrued expenses |
|
|
159,815 |
|
Total
Liabilities |
|
|
6,523,932 |
|
Preferred
Stock $0.001 par value: |
|
|
|
|
Series
C Cumulative Preferred Stock (Auction Rate, $25,000 liquidation value per share, 1,000 shares authorized with 10 shares issued and
outstanding) |
|
|
250,000 |
|
Series
E Cumulative Preferred Stock (5.125%, $25 liquidation value per share, 2,000,000 shares authorized with 1,718,934 shares issued and
outstanding) |
|
|
42,973,350 |
|
Series
G Cumulative Preferred Stock (5.125%, $25 liquidation value per share, 2,000,000 shares authorized with 1,456,106 shares issued and
outstanding) |
|
|
36,402,650 |
|
Total
Preferred Stock |
|
|
79,626,000 |
|
Net
Assets Attributable to Common Stockholders |
|
$ |
104,851,101 |
|
|
|
|
|
|
Net
Assets Attributable to Common Stockholders Consist of: |
|
|
|
|
Paid-in
capital |
|
$ |
108,634,844 |
|
Total
accumulated loss |
|
|
(3,783,743 |
) |
Net
Assets |
|
$ |
104,851,101 |
|
|
|
|
|
|
Net
Asset Value per Common Share: |
|
|
|
|
($104,851,101
÷ 28,073,830 shares outstanding at $0.001 par value; 187,999,000 shares authorized) |
|
$ |
3.73 |
|
Statement
of Operations
For
the Year Ended December 31, 2023
Investment
Income: |
|
|
|
|
Dividends
(net of foreign withholding taxes of $164,721) |
|
$ |
2,980,173 |
|
Interest |
|
|
1,215,430 |
|
Total
Investment Income |
|
|
4,195,603 |
|
Expenses: |
|
|
|
|
Investment
advisory fees |
|
|
1,946,075 |
|
Stockholder
communications expenses |
|
|
158,640 |
|
Legal
and audit fees |
|
|
122,404 |
|
Directors’
fees |
|
|
91,848 |
|
Payroll
expenses |
|
|
90,264 |
|
Stockholder
services fees |
|
|
78,756 |
|
Custodian
fees |
|
|
45,151 |
|
Accounting
fees |
|
|
45,000 |
|
Interest
expense |
|
|
1,107 |
|
Miscellaneous
expenses |
|
|
99,207 |
|
Total
Expenses |
|
|
2,678,452 |
|
Less: |
|
|
|
|
Expenses
paid indirectly by broker (See Note 5) |
|
|
(2,913 |
) |
Net
Expenses |
|
|
2,675,539 |
|
Net
Investment Income |
|
|
1,520,064 |
|
|
|
|
|
|
Net
Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency: |
|
|
|
|
Net
realized loss on investments |
|
|
(1,670,772 |
) |
Net
realized loss on foreign currency transactions |
|
|
(17,838 |
) |
Net
realized loss on investments and foreign currency transactions |
|
|
(1,688,610 |
) |
Net
change in unrealized appreciation/depreciation: |
|
|
|
|
on
investments |
|
|
23,445,003 |
|
on
foreign currency translations |
|
|
6,616 |
|
Net
change in unrealized appreciation/depreciation on investments and foreign currency translations |
|
|
23,451,619 |
|
Net
Realized and Unrealized Gain/(Loss) on Investments and Foreign Currency |
|
|
21,763,009 |
|
Net
Increase in Net Assets Resulting from Operations |
|
|
23,283,073 |
|
Total
Distributions to Preferred Stockholders |
|
|
(4,307,984 |
) |
Net
Increase in Net Assets Attributable to Common Stockholders Resulting from Operations |
|
$ |
18,975,089 |
|
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Statement
of Changes in Net Assets Attributable to Common Stockholders
|
|
Year
Ended |
|
|
Year
Ended |
|
|
|
December 31,
2023 |
|
|
December 31,
2022 |
|
Operations: |
|
|
|
|
|
|
|
|
Net
investment income |
|
$ |
1,520,064 |
|
|
$ |
258,521 |
|
Net
realized loss on investments and foreign currency transactions |
|
|
(1,688,610 |
) |
|
|
(5,024,410 |
) |
Net
change in unrealized appreciation/depreciation on investments and foreign currency translations |
|
|
23,451,619 |
|
|
|
(86,880,491 |
) |
Net
Increase/(Decrease) in Net Assets Resulting from Operations |
|
|
23,283,073 |
|
|
|
(91,646,380 |
) |
|
|
|
|
|
|
|
|
|
Distributions
to Preferred Stockholders: |
|
|
|
|
|
|
|
|
Accumulated
earnings |
|
|
(1,799,838 |
) |
|
|
— |
|
Return
of capital |
|
|
(2,508,146 |
) |
|
|
(4,939,169 |
) |
Total
Distributions to Preferred Stockholders |
|
|
(4,307,984 |
) |
|
|
(4,939,169 |
) |
|
|
|
|
|
|
|
|
|
Net
Increase/(Decrease) in Net Assets Attributable to Common Stockholders Resulting from Operations |
|
|
18,975,089 |
|
|
|
(96,585,549 |
) |
|
|
|
|
|
|
|
|
|
Distributions
to Common Stockholders: |
|
|
|
|
|
|
|
|
Return
of capital |
|
|
(24,504,720 |
) |
|
|
(24,210,352 |
) |
Total
Distributions to Common Stockholders |
|
|
(24,504,720 |
) |
|
|
(24,210,352 |
) |
|
|
|
|
|
|
|
|
|
Fund
Share Transactions: |
|
|
|
|
|
|
|
|
Increase
in net assets from common shares issued upon reinvestment of distributions |
|
|
2,163,733 |
|
|
|
1,759,964 |
|
Net
increase in net assets from redemption of preferred shares |
|
|
410,770 |
|
|
|
596,163 |
|
Offering
costs for common shares charged to paid-in capital |
|
|
— |
|
|
|
(10,110 |
) |
Net
Increase in Net Assets from Fund Share Transactions |
|
|
2,574,503 |
|
|
|
2,346,017 |
|
|
|
|
|
|
|
|
|
|
Net
Decrease in Net Assets Attributable to Common Stockholders |
|
|
(2,955,128 |
) |
|
|
(118,449,884 |
) |
|
|
|
|
|
|
|
|
|
Net
Assets Attributable to Common Stockholders: |
|
|
|
|
|
|
|
|
Beginning
of year |
|
|
107,806,229 |
|
|
|
226,256,113 |
|
End
of year |
|
$ |
104,851,101 |
|
|
$ |
107,806,229 |
|
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Financial
Highlights
Selected
data for a common share outstanding throughout each year:
|
|
Year
Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Operating
Performance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
asset value, beginning of year |
|
$ |
3.89 |
|
|
$ |
8.25 |
|
|
$ |
8.14 |
|
|
$ |
7.93 |
|
|
$ |
7.04 |
|
Net
investment income/(loss) |
|
|
0.05 |
|
|
|
0.01 |
|
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
0.13 |
(a) |
Net
realized and unrealized gain/(loss) on investments and foreign currency transactions |
|
|
0.78 |
|
|
|
(3.35 |
) |
|
|
1.21 |
|
|
|
1.27 |
|
|
|
1.86 |
|
Total
from investment operations |
|
|
0.83 |
|
|
|
(3.34 |
) |
|
|
1.19 |
|
|
|
1.29 |
|
|
|
1.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
to Preferred Stockholders: (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
(0.06 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
(0.00 |
)(c) |
|
|
(0.02 |
) |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
(0.18 |
) |
|
|
(0.20 |
) |
|
|
(0.13 |
) |
Return
of capital |
|
|
(0.09 |
) |
|
|
(0.18 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total
distributions to preferred stockholders |
|
|
(0.15 |
) |
|
|
(0.18 |
) |
|
|
(0.20 |
) |
|
|
(0.20 |
) |
|
|
(0.15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase/(Decrease) in Net Assets Attributable to Common Stockholders Resulting from Operations |
|
|
0.68 |
|
|
|
(3.52 |
) |
|
|
0.99 |
|
|
|
1.09 |
|
|
|
1.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
to Common Stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
— |
|
|
|
— |
|
|
|
(0.07 |
) |
|
|
(0.02 |
) |
|
|
(0.12 |
) |
Net
realized gain |
|
|
— |
|
|
|
— |
|
|
|
(0.61 |
) |
|
|
(0.83 |
) |
|
|
(0.71 |
) |
Return
of capital |
|
|
(0.88 |
) |
|
|
(0.88 |
) |
|
|
(0.20 |
) |
|
|
(0.03 |
) |
|
|
(0.05 |
) |
Total
distributions to common stockholders |
|
|
(0.88 |
) |
|
|
(0.88 |
) |
|
|
(0.88 |
) |
|
|
(0.88 |
) |
|
|
(0.88 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in net asset value from common share transactions |
|
|
— |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
Increase
in net asset value from common shares issued upon reinvestment of distributions |
|
|
0.03 |
|
|
|
0.02 |
|
|
|
0.00 |
(c) |
|
|
0.00 |
(c) |
|
|
0.00 |
(c) |
Increase
in net asset value from redemption of preferred shares |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.00 |
(c) |
|
|
— |
|
Offering
costs and adjustment to offering costs for preferred shares charged to paid-in capital |
|
|
— |
|
|
|
— |
|
|
|
0.00 |
(c) |
|
|
— |
|
|
|
(0.07 |
) |
Offering
costs and adjustment to offering costs for common shares charged to paid-in capital |
|
|
— |
|
|
|
(0.00 |
)(c) |
|
|
(0.02 |
) |
|
|
— |
|
|
|
— |
|
Total
Fund share transactions |
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.00 |
(c) |
|
|
0.00 |
(c) |
|
|
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value Attributable to Common Stockholders, End
of Year |
|
$ |
3.73 |
|
|
$ |
3.89 |
|
|
$ |
8.25 |
|
|
$ |
8.14 |
|
|
$ |
7.93 |
|
NAV
total return † |
|
|
19.94 |
% |
|
|
(43.71 |
)% |
|
|
11.54 |
% |
|
|
18.58 |
% |
|
|
25.86 |
% |
Market
value, end of year |
|
$ |
5.67 |
|
|
$ |
5.35 |
|
|
$ |
8.68 |
|
|
$ |
7.96 |
|
|
$ |
8.02 |
|
Investment
total return †† |
|
|
22.84 |
% |
|
|
(29.69 |
)% |
|
|
23.53 |
% |
|
|
14.15 |
% |
|
|
26.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
to Average Net Assets and Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets including liquidation value of preferred shares, end of year (in 000’s) |
|
$ |
184,477 |
|
|
$ |
193,907 |
|
|
$ |
326,179 |
|
|
$ |
305,676 |
|
|
$ |
297,577 |
|
Net
assets attributable to common shares, end of year (in 000’s) |
|
$ |
104,851 |
|
|
$ |
107,806 |
|
|
$ |
226,256 |
|
|
$ |
205,754 |
|
|
$ |
197,327 |
|
Ratio
of net investment income/(loss) to average net assets attributable to common shares before preferred share distributions |
|
|
1.37 |
% |
|
|
0.17 |
% |
|
|
(0.29 |
)% |
|
|
0.23 |
% |
|
|
1.62 |
%(a) |
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Financial
Highlights (Continued)
Selected
data for a common share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Ratio
of operating expenses to average net assets attributable to common shares before fees waived/fee reduction (d)(e) |
|
|
2.41 |
% |
|
|
2.11 |
% |
|
|
1.73 |
% |
|
|
2.06 |
% |
|
|
1.69 |
%(f) |
Ratio
of operating expenses to average net assets attributable to common shares net of fees waived/fee reduction, if any(d) |
|
|
2.41 |
%(g) |
|
|
2.10 |
%(g) |
|
|
1.73 |
% |
|
|
2.06 |
%(g) |
|
|
1.69 |
%(f)(g) |
Portfolio
turnover rate |
|
|
19 |
% |
|
|
15 |
% |
|
|
17 |
% |
|
|
29 |
% |
|
|
18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
Preferred Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auction
Market Series C Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation
value, end of year (in 000’s) |
|
$ |
250 |
|
|
$ |
250 |
|
|
$ |
250 |
|
|
$ |
250 |
|
|
$ |
250 |
|
Total
shares outstanding (in 000’s)(j) |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Liquidation
preference per share |
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
Liquidation
value (k) |
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
Asset
coverage per share (i) |
|
$ |
57,920 |
|
|
$ |
56,302 |
|
|
$ |
81,608 |
|
|
$ |
76,478 |
|
|
$ |
74,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.125%
Series E Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation
value, end of year (in 000’s) |
|
$ |
42,973 |
|
|
$ |
45,314 |
|
|
$ |
49,918 |
|
|
$ |
49,918 |
|
|
$ |
50,000 |
|
Total
shares outstanding (in 000’s) |
|
|
1,719 |
|
|
|
1,813 |
|
|
|
1,997 |
|
|
|
1,997 |
|
|
|
2,000 |
|
Liquidation
preference per share |
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
Average
market value (h) |
|
$ |
23.59 |
|
|
$ |
24.07 |
|
|
$ |
25.95 |
|
|
$ |
25.55 |
|
|
$ |
24.88 |
|
Asset
coverage per share (i) |
|
$ |
57.92 |
|
|
$ |
56.30 |
|
|
$ |
81.61 |
|
|
$ |
76.48 |
|
|
$ |
74.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.125%
Series G Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation
value, end of year (in 000’s) |
|
$ |
36,403 |
|
|
$ |
40,538 |
|
|
$ |
49,755 |
|
|
$ |
49,755 |
|
|
$ |
50,000 |
|
Total
shares outstanding (in 000’s) |
|
|
1,456 |
|
|
|
1,622 |
|
|
|
1,990 |
|
|
|
1,990 |
|
|
|
2,000 |
|
Liquidation
preference per share |
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
Average
market value (h) |
|
$ |
23.53 |
|
|
$ |
24.23 |
|
|
$ |
26.37 |
|
|
$ |
25.61 |
|
|
$ |
25.40 |
|
Asset
coverage per share (i) |
|
$ |
57.92 |
|
|
$ |
56.30 |
|
|
$ |
81.61 |
|
|
$ |
76.48 |
|
|
$ |
74.21 |
|
Asset
Coverage (l) |
|
|
232 |
% |
|
|
225 |
% |
|
|
326 |
% |
|
|
306 |
% |
|
|
297 |
% |
|
† |
Based on net asset value
per share, adjusted for reinvestment of distributions at the net asset value per share on the ex-dividend dates. |
|
†† |
Based
on market value per share, adjusted for reinvestment of distributions at prices determined under the Fund’s dividend reinvestment
plan and adjustments for the rights offering. |
|
(a) |
Includes
income resulting from special dividends. Without these dividends, the per share income amount would have been $0.02 and the net investment
income ratio would have been 0.20%. |
|
(b) |
Calculated
based on average common shares outstanding on the record dates throughout the years. |
|
(c) |
Amount
represents less than $0.005 per share. |
|
(d) |
The
Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. Had such payments not been made,
this expense ratio for the year ended December 31, 2022 would have been 2.11%. For the years ended December 31, 2023, 2021,
2020, and 2019, there was no impact on the expense ratios. |
|
(e) |
Ratio
of operating expenses to average net assets including liquidation value of preferred shares before fee waived/fee reduction for the
years ended December 31, 2023, 2022, 2021, 2020, and 2019, would have been 1.37%, 1.29%, 1.21%, 1.30%, and 1.25%, respectively. |
|
(f) |
In
2019, due to failed auctions relating to previous fiscal years, the Fund reversed accumulated auction agent fees. For the year ended
December 31, 2019, there was no impact to the ratio of operating expenses to average net assets attributable to common shares
and the ratio of operating expenses to average net assets including the liquidation value of preferred shares. |
|
(g) |
Ratio
of operating expenses to average net assets including liquidation value of preferred shares net of advisory fee reduction for the
years ended December 31, 2023, 2022, 2020, and 2019, would have been 1.37%, 1.28%, 1.30%, and 1.25%, respectively. |
|
(h) |
Based
on weekly prices. |
|
(i) |
Asset
coverage per share is calculated by combining all series of preferred stock. |
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Financial
Highlights (Continued)
|
(j) |
Actual
number of shares outstanding is 10. |
|
(k) |
Since
February 2008, the weekly auctions have failed. Holders that have submitted orders have not been able to sell any or all of
their shares in the auctions. |
|
(l) |
Asset
coverage is calculated by combining all series of preferred stock. |
See
accompanying notes to financial statements.
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements
1.
Organization. The Gabelli Multimedia Trust Inc. (the Fund) was incorporated on March 31, 1994 in Maryland. Although the Fund
is registered as a non-diversified fund, it has operated as a diversified fund for over three years. Therefore, the Investment Company
Act of 1940, as amended (the 1940 Act) obliges the Fund to continue to operate as a diversified fund unless the Fund obtains shareholder
approval to operate as a non-diversified fund. The Fund commenced investment operations on November 15, 1994.
The
Fund’s investment objective is long term growth of capital. The Fund will invest at least 80% of its assets, under normal market
conditions, in common stock and other securities, including convertible securities, preferred stock, options, and warrants of companies
in the telecommunications, media, publishing, and entertainment industries (the 80% Policy). The 80% Policy may be changed without stockholder
approval. The Fund will provide stockholders with notice at least sixty days prior to the implementation of any change in the 80% Policy.
2.
Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance,
which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions
in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial statements.
Security
Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter
market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing
price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued
at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued
at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available
price or, if the Board of Directors (the Board) so determines, by such other method as the Board shall determine in good faith to reflect
its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by Gabelli Funds, LLC (the Adviser).
Portfolio
securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant
market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close
of the foreign market, but prior to the close of business on the day the securities are being valued. Debt obligations for which market
quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on
such day, the securities are valued using the closing bid price, unless the Board determines such amount does not reflect the securities’
fair value, in which case these securities will be fair valued as determined by the Board. Certain securities are valued principally
using dealer quotations. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the
applicable contract is traded. OTC futures and options on futures for which market quotations are readily available will be valued by
quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one
or more dealers in the instrument in question by the Adviser.
Securities
and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies
and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the
company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities
with the equivalent U.S.
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
dollar
value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be
indicative of the value of the security.
The
inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described
in the hierarchy below:
|
● |
Level
1 – quoted prices in active markets for identical securities; |
|
● |
Level
2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds,
credit risk, etc.); and |
|
● |
Level
3 – significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial
instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate
that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication
of the risk associated with investing in those securities.
The
summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of December 31, 2023
is as follows:
|
|
Valuation
Inputs |
|
|
|
|
|
|
Level
1 Quoted Prices |
|
|
Level
2 Other Significant Observable Inputs |
|
|
Level
3 Significant Unobservable Inputs (a) |
|
|
Total
Market Value at 12/31/23 |
|
INVESTMENTS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
(Market Value): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stocks: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copyright/Creativity
Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Publishing |
|
$ |
3,585,640 |
|
|
$ |
31,389 |
|
|
$ |
1,465 |
|
|
$ |
3,618,494 |
|
Other
Industries (b) |
|
|
70,044,336 |
|
|
|
— |
|
|
|
— |
|
|
|
70,044,336 |
|
Distribution
Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcasting |
|
|
12,496,680 |
|
|
|
15,980 |
|
|
|
7,067 |
|
|
|
12,519,727 |
|
Business
Services |
|
|
2,043,940 |
|
|
|
— |
|
|
|
612 |
|
|
|
2,044,552 |
|
Financial
Services |
|
|
662,220 |
|
|
|
— |
|
|
|
16,375 |
|
|
|
678,595 |
|
Real
Estate |
|
|
3,497,256 |
|
|
|
— |
|
|
|
191 |
|
|
|
3,497,447 |
|
Telecommunications |
|
|
3,962,664 |
|
|
|
0 |
|
|
|
— |
|
|
|
3,962,664 |
|
Wireless
Communications |
|
|
7,152,561 |
|
|
|
— |
|
|
|
24,203 |
|
|
|
7,176,764 |
|
Other
Industries (b) |
|
|
67,746,512 |
|
|
|
— |
|
|
|
— |
|
|
|
67,746,512 |
|
Total
Common Stocks |
|
|
171,191,809 |
|
|
|
47,369 |
|
|
|
49,913 |
|
|
|
171,289,091 |
|
Closed-End
Funds |
|
|
— |
|
|
|
19,560 |
|
|
|
— |
|
|
|
19,560 |
|
Preferred
Stocks (b) |
|
|
707,660 |
|
|
|
— |
|
|
|
— |
|
|
|
707,660 |
|
Warrants
(b) |
|
|
11 |
|
|
|
— |
|
|
|
— |
|
|
|
11 |
|
U.S.
Government Obligations |
|
|
— |
|
|
|
12,393,762 |
|
|
|
— |
|
|
|
12,393,762 |
|
TOTAL
INVESTMENTS – ASSETS |
|
$ |
171,899,480 |
|
|
$ |
12,460,691 |
|
|
$ |
49,913 |
|
|
$ |
184,410,084 |
|
|
(a) |
The
inputs for these securities are not readily available and are derived based on the judgment of the Adviser according to procedures
approved by the Board. |
|
(b) |
Please
refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
During
the year ended December 31, 2023, the Fund did not have material transfers into or out of Level 3. The Fund’s policy is to
recognize transfers among Levels as of the beginning of the reporting period.
Additional
Information to Evaluate Qualitative Information.
General.
The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to
value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized
pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred
equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading
systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction
prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another
pricing service or from a broker/dealer that trades that security or similar securities.
Fair
Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations.
Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several
days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider
include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of
valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply.
A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level
3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The
Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include backtesting
the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
Investments
in Other Investment Companies. The Fund may invest, from time to time, in shares of other investment companies (or entities that
would be considered investment companies but are excluded from the definition pursuant to certain exceptions under the 1940 Act) (the
Acquired Funds) in accordance with the 1940 Act and related rules. Stockholders in the Fund would bear the pro rata portion of the periodic
expenses of the Acquired Funds in addition to the Fund’s expenses. During the year ended December 31, 2023, the Fund’s
pro rata portion of the periodic expenses charged by the Acquired Funds was less than one basis point.
Foreign
Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and
other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases and sales of investment securities,
income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and
losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized
appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting
from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities
transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of
the Fund and the amounts actually
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
received.
The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and
subsequent sale trade date is included in realized gain/(loss) on investments.
Foreign
Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves
special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies,
the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic
developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities
of comparable U.S. issuers.
Foreign
Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which
may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules
and regulations that exist in the markets in which it invests.
Restricted
Securities. The Fund may invest up to 15% of its net assets in securities for which the markets are restricted. Restricted securities
include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often
requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than the sale of securities
eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower
than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors
under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued
liquidity of such securities is not as well assured as that of publicly traded securities, and, accordingly, the Board will monitor their
liquidity. At December 31, 2023, the Fund held no restricted securities.
Securities
Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/(loss) on
investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount)
is recorded on an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method
or amortized to earliest call date, if applicable. Dividend income is recorded on the ex-dividend date, except for certain dividends
from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
Distributions
to Stockholders. Distributions to common stockholders are recorded on the ex-dividend date. The characterization of distributions
to stockholders is based on income and capital gains as determined in accordance with federal income tax regulations, which may differ
from income and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains
on various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations
of distributions made by the Fund. Distributions from net investment income for federal income tax purposes include net realized gains
on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences
are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. Permanent differences
were primarily due to the tax treatment of currency gains and losses and prior year return of capital. These reclassifications have no
impact on the NAV of the Fund. For the year ended December 31, 2023, reclassifications were made to decrease paid-in capital by
$1,048, with an offsetting adjustment to total accumulated loss.
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
Distributions
to stockholders of the Fund’s Auction Market Series C Cumulative Preferred Stock (Series C Preferred), 5.125% Series E Cumulative
Preferred Stock (Series E Preferred), and 5.125% Series G Preferred Stock (Series G Preferred) are accrued on a daily basis and are determined
as described in Note 6.
Under
the Fund’s current distribution policy related to common shares, the Fund declares and pays quarterly distributions from net investment
income, capital gains, and paid-in capital. The actual source of the distribution is determined after the end of the calendar year. Pursuant
to this policy, distributions during the year may be made in excess of required distributions. To the extent such distributions are made
from current earnings and profits, they are considered ordinary income or long term capital gains. Distributions sourced from paid-in
capital should not be considered the current yield or the total return from an investment in the Fund.
The
tax character of distributions paid during the years ended December 31, 2023 and 2022 was as follows:
|
|
Year
Ended |
|
|
Year
Ended |
|
|
|
December 31,
2023 |
|
|
December 31,
2022 |
|
|
|
Common |
|
|
Preferred |
|
|
Common |
|
|
Preferred |
|
Distributions
paid from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary
income |
|
$ |
– |
|
|
$ |
1,799,838 |
|
|
$ |
– |
|
|
$ |
– |
|
Return
of capital |
|
|
24,504,720 |
|
|
|
2,508,146 |
|
|
|
24,210,352 |
|
|
|
4,939,169 |
|
Total
distributions paid |
|
$ |
24,504,720 |
|
|
$ |
4,307,984 |
|
|
$ |
24,210,352 |
|
|
$ |
4,939,169 |
|
Provision
for Income Taxes. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the Code). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated
investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore,
no provision for federal income taxes is required.
At
December 31, 2023, the components of accumulated earnings/losses on a tax basis were as follows:
Accumulated
capital loss carryforwards |
|
$ |
(4,193,864 |
) |
Net
unrealized appreciation on investments and foreign currency translations |
|
|
466,941 |
|
Other
temporary differences* |
|
|
(56,820 |
) |
Total |
|
$ |
(3,783,743 |
) |
|
* |
Other temporary differences
are due to preferred share class distributions payable. |
At
December 31, 2023, the Fund had net capital loss carryforwards for federal income tax purposes which are available to reduce future
required distributions of net capital gains to shareholders. The Fund is permitted to carry capital losses forward for an unlimited period.
Capital
losses that are carried forward will retain their character as either short term or long term capital losses.
Short
term capital loss carryforward with no expiration |
|
$ |
1,130,402 |
|
Long
term capital loss carryforward with no expiration |
|
|
3,063,462 |
|
Total
capital loss carryforwards |
|
$ |
4,193,864 |
|
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
The
Fund utilized $261,481 of the capital loss carryforward for the year ended December 31, 2023.
At
December 31, 2023, the temporary differences between book basis and tax basis net unrealized depreciation on investments were primarily
due to deferral of losses from wash sales for tax purposes, tax basis adjustments due to corporate actions, mark-to-market adjustments
on investments in passive foreign investment companies, and investments no longer considered passive foreign investment companies.
The
following summarizes the tax cost of investments and the related net unrealized depreciation at December 31, 2023:
|
|
Cost |
|
|
Gross
Unrealized
Appreciation |
|
|
Gross
Unrealized
Depreciation |
|
|
Net
Unrealized
Depreciation |
|
Investments |
|
$ |
184,459,821 |
|
|
$ |
35,577,950 |
|
|
$ |
(35,627,687 |
) |
|
$ |
(49,737 |
) |
The
Fund is required to evaluate tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine
whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Income tax and related
interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed
not to meet the more-likely-than-not threshold. For the year ended December 31, 2023, the Fund did not incur any income tax, interest,
or penalties. As of December 31, 2023, the Adviser has reviewed all open tax years and concluded that there was no impact to the
Fund’s net assets or results of operations. The Fund’s federal and state tax returns for the prior three years remain open,
subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to this
conclusion are necessary.
3.
Investment Advisory Agreement and Other Transactions. The Fund has entered into an investment advisory agreement (the Advisory Agreement)
with the Adviser which provides that the Fund will pay the Adviser a fee, computed weekly and paid monthly, equal on an annual basis
to 1.00% of the value of the Fund’s average weekly net assets including the liquidation value of preferred stock. In accordance
with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio and oversees the administration
of all aspects of the Fund’s business and affairs.
The
Adviser has agreed to reduce the management fee on the incremental assets attributable to the Series C Preferred Stock if the total return
of the NAV of the common shares of the Fund, including distributions and advisory fee subject to reduction, does not exceed the stated
dividend rate on each particular series of the Preferred Stock for the period. For the year ended December 31, 2023, the Fund’s
total return on the NAV of the common shares exceeded the stated dividend rate of Series C Preferred Stock. Thus, advisory fees with
respect to the liquidation value of the Series C Preferred Stock were accrued.
4.
Portfolio Securities. Purchases and sales of securities during the year ended December 31, 2023, other than short term securities
and U.S. Government obligations, aggregated $32,107,014 and $47,224,652, respectively.
5.
Transactions with Affiliates and Other Arrangements. During the year ended December 31, 2023, the Fund paid $5,136 in
brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser.
During
the year ended December 31, 2023, the Fund received credits from a designated broker who agreed to pay certain Fund operating expenses.
The amount of such expenses paid through this directed brokerage arrangement during this period was $2,913.
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
The
cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the
Adviser. Under the sub-administration agreement with Bank of New York Mellon, the fees paid include the cost of calculating the
Fund’s NAV. The Fund reimburses the Adviser for this service. During the year ended December 31, 2023, the Fund accrued
$45,000 in accounting fees in the Statement of Operations.
As
per the approval of the Board, the Fund compensates officers of the Fund, who are employed by the Fund and are not employed by the Adviser
(although officers may receive incentive based variable compensation from affiliates of the Adviser). During the year ended December 31,
2023, the Fund accrued $90,264 in payroll expenses in the Statement of Operations.
The
Fund pays retainer and per meeting fees to Directors not affiliated with the Adviser, plus specified amounts to the Lead Director and
Audit Committee Chairman. Directors are also reimbursed for out of pocket expenses incurred in attending meetings. Directors who are
directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.
6.
Capital. The Fund’s Articles of Incorporation permit the Fund to issue 187,999,000 shares of common stock (par value $0.001).
The Board has authorized the repurchase of up to 1,950,000 common shares on the open market when the shares are trading at a discount
of 5% or more (or such other percentage as the Board may determine from time to time) from the NAV of the shares. During the years ended
December 31, 2023 and 2022, the Fund did not repurchase any of its common shares.
|
|
Year
Ended |
|
|
Year
Ended |
|
|
|
December 31,
2023 |
|
|
December 31,
2022 |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
Increase
in net assets from common shares issued upon reinvestment of distributions |
|
|
370,322 |
|
|
$ |
2,163,733 |
|
|
|
272,128 |
|
|
$ |
1,759,964 |
|
The
Fund’s Articles of Incorporation authorize the issuance of up to 12,001,000 shares of $0.001 par value Preferred Stock. The Preferred
Stock is senior to the common stock and results in the financial leveraging of the common stock. Such leveraging tends to magnify both
the risks and opportunities to common stockholders. Dividends on shares of the Preferred Stock are cumulative. The Fund is required by
the 1940 Act and by the Articles Supplementary to meet certain asset coverage tests with respect to the Preferred Stock. If the Fund
fails to meet these requirements and does not correct such failure, the Fund may be required to redeem, in part or in full, the Series
C, Series E, and Series G Preferred at redemption prices of $25,000, $25, and $25, respectively, per share plus an amount equal to the
accumulated and unpaid dividends whether or not declared on such shares in order to meet these requirements. Additionally, failure to
meet the foregoing asset coverage requirements could restrict the Fund’s ability to pay dividends to common stockholders and could
lead to sales of portfolio securities at inopportune times. The income received on the Fund’s assets may vary in a manner unrelated
to the fixed and variable rates, which could have either a beneficial or detrimental impact on net investment income and gains available
to common stockholders.
The
Fund has the authority to purchase its auction rate preferred shares through negotiated private transactions. The Fund is not obligated
to purchase any dollar amount or number of auction rate preferred shares, and the timing and amount of any auction rate preferred shares
purchased will depend on market conditions, share price,
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
capital
availability, and other factors. The Fund is not soliciting holders to sell these shares nor recommending that holders offer them to
the Fund. Any offers can be accepted or rejected in the Fund’s discretion.
For
Series C Preferred Stock, the dividend rates, as set by the auction process that is generally held every seven days, are expected to
vary with short term interest rates. Since February 2008, the number of shares of Series C Preferred Stock subject to bid orders
by potential holders has been less than the number of shares of Series C Preferred Stock subject to sell orders. Holders that have submitted
sell orders have not been able to sell any or all of the Series C Preferred Stock for which they have submitted sell orders. Therefore
the weekly auctions have failed, and the dividend rate has been the maximum rate, which is 175% of the “AA” Financial Composite
Commercial Paper Rate on the day of such auction. Existing Series C stockholders may submit an order to hold, bid, or sell such shares
on each auction date, or trade their shares in the secondary market.
The
Fund may redeem at any time, in whole or in part, the Series C Preferred Stock and Series E Preferred Stock at their respective redemption
prices per share. In addition, the Board has authorized the repurchase of the Series E and Series G Preferred Stock in the open market
at prices less than the $25 liquidation value per share. During the years ended December 31, 2023 and 2022, the Fund repurchased
and retired 93,612 and 184,154 Series E Preferred at investments of $2,198,952 and $4,402,156, respectively, and at average discounts
of approximately 6.08% and 4.42%, from its liquidation preference. During the years ended December 31, 2023 and 2022, the Fund repurchased
and retired 165,397 and 368,698 Series G Preferred at investments of $3,864,002 and $8,822,681, respectively, at average discounts of
approximately 6.62% and 4.32%, respectively, from its liquidation preference.
The
following table summarizes Cumulative Preferred Stock information:
Series |
|
Issue
Date |
|
|
Authorized |
|
|
Number of
Shares Outstanding at 12/31/2023 |
|
|
Net
Proceeds |
|
|
2023
Dividend Rate Range |
|
Dividend
Rate at 12/31/2023 |
|
|
Accrued
Dividends at 12/31/2023 |
|
C
Auction Rate |
|
March 31,
2003 |
|
|
|
1,000 |
|
|
|
10 |
|
|
$ |
24,547,465 |
|
|
7.514% to 9.337% |
|
|
9.320 |
% |
|
$ |
319 |
|
E
5.125% |
|
September 26, 2017 |
|
|
|
2,000,000 |
|
|
|
1,718,934 |
|
|
$ |
48,192,240 |
|
|
Fixed Rate |
|
|
5.125 |
% |
|
$ |
30,589 |
|
G
5.125% |
|
December 20, 2019 |
|
|
|
2,000,000 |
|
|
|
1,456,106 |
|
|
$ |
48,148,000 |
|
|
Fixed Rate |
|
|
5.125 |
% |
|
$ |
25,912 |
|
The
holders of Preferred Shares generally are entitled to one vote per share held on each matter submitted to a vote of stockholders of the
Fund and will vote together with holders of common stock as a single class. The holders of Preferred Shares voting together as a single
class also have the right currently to elect two Directors and, under certain circumstances, are entitled to elect a majority of the
Board of Directors. In addition, the affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding shares
of the preferred shares, voting as a single class, will be required to approve any plan of reorganization adversely affecting the preferred
stock, and the approval of two-thirds of each class, voting separately, of the Fund’s outstanding voting stock must approve the
conversion of the Fund from a closed-end to an open-end investment company. The approval of a majority (as defined in the 1940 Act) of
the outstanding preferred shares and a majority (as defined in the 1940 Act) of the Fund’s outstanding voting securities are required
to approve certain other actions, including changes in the Fund’s investment objectives or fundamental investment policies.
7.
Industry Concentration. Because the Fund primarily invests in common stocks and other securities of foreign and domestic companies
in the telecommunications, media, publishing, and entertainment industries, its portfolio may be subject to greater risk and market fluctuations
than a portfolio of securities representing a broad range of investments.
The
Gabelli Multimedia Trust Inc.
Notes
to Financial Statements (Continued)
8.
Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under
these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed
the Fund’s existing contracts and expects the risk of loss to be remote.
9.
Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial
statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
The
Gabelli Multimedia Trust Inc.
Report
of Independent Registered Public Accounting Firm
To
the Board of Directors and Stockholders of The Gabelli Multimedia Trust Inc.
Opinion
on the Financial Statements
We
have audited the accompanying statement of assets and liabilities, including the schedule of investments, of The Gabelli Multimedia Trust
Inc. (the “Fund”) as of December 31, 2023, the related statement of operations for the year ended December 31,
2023, the statement of changes in net assets attributable to common stockholders for each of the two years in the period ended December 31,
2023, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2023
(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Fund as of December 31, 2023, the results of its operations for the year then ended,
the changes in its net assets attributable to common stockholders for each of the two years in the period ended December 31, 2023,
and the financial highlights for each of the five years in the period ended December 31, 2023 in conformity with accounting principles
generally accepted in the United States of America.
Basis
for Opinion
These
financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether
due to error or fraud.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation
of securities owned as of December 31, 2023, by correspondence with the custodian and brokers; when replies were not received from
the brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/
PricewaterhouseCoopers LLP
New
York, New York
February 29,
2024
We
have served as the auditor of one or more investment companies in the Gabelli Fund Complex since 1986.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Unaudited)
SUMMARY
OF FUND EXPENSES
The
following table shows the Fund’s expenses as a percentage of net assets attributable to common stock. All expenses of the Fund
are borne, directly or indirectly, by the common stockholders. The table is based on the capital structure of the Fund as of December 31,
2023. The purpose of the table and example below is to help you understand all fees and expenses that you, as a holder of common stock,
would bear directly or indirectly.
Stockholder
Transaction Expenses
Sales
Load (as a percentage of offering price) |
|
- |
% (a) |
Offering
Expenses Borne by the Fund
(as a percentage of offering price) |
|
- |
% (a) |
Dividend
Reinvestment and Voluntary Cash Purchase Plan Fees |
|
- |
|
Purchase
Transactions |
|
$0.75 |
(b) |
One-time
Fee for Deposit of Stock Certificates |
|
$2.50 |
(b) |
Annual
Expenses ((as a percentage of net assets attributable to common stock) |
|
Percentages of
Net Assets Attributable to Common Shares |
Management
Fees |
|
1.76 |
% (c) |
Interest
on Borrowed Funds |
|
- |
% (d) |
Other
Expenses |
|
0.70 |
% (e) |
Total
Annual Expenses |
|
2.46 |
% |
Dividends
on Preferred Shares |
|
3.90 |
% (f) |
Total
Annual Expenses and Dividends on Preferred |
|
6.36 |
% (c) |
|
(a) |
If
common stocks are sold to or through underwriters or dealer managers, a prospectus or prospectus supplement will set forth any applicable
sales load and the estimated offering expenses borne by the Fund. |
|
(b) |
Stockholders
participating in the Fund’s Automatic Dividend Reinvestment Plan do not incur any additional fees. Stockholders participating
in the Voluntary Cash Purchase Plan would pay $0.75 plus their pro rata share of brokerage commissions per transaction to purchase
stocks and $2.50 plus pro rata share of brokerage commissions per transaction to sell stocks. See “Automatic Dividend Reinvestment
and Voluntary Cash Purchase Plan.” |
|
(c) |
The
Investment Adviser’s fee is 1.00% annually of the Fund’s average weekly net assets, plus assets attributable to any outstanding
senior securities, with no deduction for the liquidation preference of any outstanding preferred stock or the principal amount of
any outstanding notes. Consequently, if the Fund has preferred stock or notes outstanding, the investment management fees and other
expenses as a percentage of net assets attributable to common stock will be higher than if the Fund does not utilize a leveraged
capital structure. |
|
(d) |
The
Fund has no current intention of borrowing from a lender or issuing notes |
|
(e) |
“Other
Expenses” are based on estimated amounts for the current year. |
|
(f) |
Dividends
on Preferred Stock represent the estimated annual distributions on the existing preferred stock outstanding. |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
The
following example illustrates the expenses you would pay on a $1,000 investment in common Shares, assuming a 5% annual portfolio total
return.*
|
|
1
Year |
|
3
Year |
|
5
Year |
|
10
Year |
Total
Expenses Incurred |
|
$63 |
|
$187 |
|
$307 |
|
$894 |
|
* |
The example should not be
considered a representation of future expenses. The example is based on Total Annual Expenses and Dividends on Preferred Stock shown
in the table above and assumes that the amounts set forth in the table do not change and that all distributions are reinvested at
net asset value. Actual expenses may be greater or less than those assumed. Moreover, the Fund’s actual rate of return may
be greater or less than the hypothetical 5% return shown in the example. |
The
above example includes Dividends on Preferred Stock. If Dividends on Preferred Stock was not included in the example calculation, the
expenses would be as follows (based on the same assumptions as above).
|
|
1
Year |
|
3
Year |
|
5
Year |
|
10
Year |
Total
Expenses Incurred |
|
$25 |
|
$77 |
|
$131 |
|
$279 |
Market
and Net Asset Value Information
The
Fund’s common stock is listed on the NYSE, under the trading or “ticker” symbol “GGT.” Currently, the Series
E Preferred and Series G Preferred are listed on the NYSE under the symbol “GGT PrE” and “GGT PrG” respectively.
The Series C Auction Rate Preferred is not listed on a stock exchange. Any additional series of fixed rate preferred stock would also
likely be listed on a stock exchange. The Fund’s common stock has historically traded at a discount to the Fund’s net asset
value. Over the past ten years, the Fund’s common stock has traded at a premium to net asset value as high as 84.91% and a discount
to net asset value as low as (15.66)%. Any additional series of fixed rate preferred stock or subscription rights issued in the future
pursuant to a Prospectus Supplement by the Fund would also likely be listed on the NYSE.
The
following table sets forth for the quarters indicated, the high and low sale prices on the NYSE per share of our common stock and the
net asset value and the premium or discount from net asset value per share at which the common stock was trading, expressed as a percentage
of net asset value, at each of the high and low sale prices provided.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Share Market Price |
|
Corresponding
Net Asset Value (“NAV”) Per Share |
|
Corresponding
Premium or Discount as a % of NAV |
Quarter
Ended |
|
High |
|
Low |
|
High |
|
Low |
|
High |
|
Low |
March 31,
2022 |
|
$9.33 |
|
$7.89 |
|
$6.74 |
|
$7.32 |
|
38.43% |
|
9.13% |
June 30,
2022 |
|
$9.18 |
|
$6.63 |
|
$7.35 |
|
$5.43 |
|
24.90% |
|
22.10% |
September 30,
2022 |
|
$7.87 |
|
$6.07 |
|
$4.69 |
|
$3.72 |
|
67.80% |
|
63.17% |
December 31,
2022 |
|
$6.62 |
|
$5.17 |
|
$4.01 |
|
$3.89 |
|
65.09% |
|
32.19% |
March 31,
2023 |
|
$6.08 |
|
$5.34 |
|
$4.31 |
|
$4.00 |
|
41.07% |
|
33.50% |
June 30,
2023 |
|
$6.90 |
|
$5.57 |
|
$3.96 |
|
$4.23 |
|
74.24% |
|
31.68% |
September 30,
2023 |
|
$6.78 |
|
$5.79 |
|
$4.09 |
|
$3.87 |
|
65.77% |
|
49.61% |
December 31,
2023 |
|
$6.18 |
|
$4.36 |
|
$3.62 |
|
$3.38 |
|
70.72% |
|
28.99% |
The
last reported price for our common stock on December 31, 2023 was $5.67 per share. As of December 31, 2023, the net asset value
per share of the Fund’s common stock was $3.73. Accordingly, the Fund’s common stock traded at a premium to net asset value
of 51.60% on December 31, 2023.
Outstanding
Securities
The
following information regarding the Fund’s outstanding securities is as of December 31, 2023.
Title
of Class |
|
Amount
Authorized |
|
|
Amount
Held by Fund for its Account |
|
|
Amount
Outstanding Exclusive of Amount Held by Fund |
Common
Stock |
|
196,750,000 |
|
|
– |
|
|
28,073,830 |
Series
C Cumulative Preferred Stock |
|
1,000 |
|
|
– |
|
|
10 |
Series
E Cumulative Preferred Stock |
|
2,000,000 |
|
|
– |
|
|
1,718,934 |
Series
G Cumulative Preferred Stock |
|
2,000,000 |
|
|
|
|
|
1,456,106 |
Unresolved
SEC Staff Comments
The
Fund does not believe that there are any material unresolved written comments, received 180 days or more before December 31, 2023
from the Staff of the SEC regarding any of the Fund’s periodic or current reports under the Securities Exchange Act of 1934 or
the Investment Company Act of 1940, or its registration statement.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Selected
data for a common share outstanding throughout each year:
|
|
For
the Year Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
2014 |
|
Operating
Performance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
asset value, beginning of year |
|
$ |
9.34 |
|
|
$ |
8.13 |
|
|
$ |
8.36 |
|
|
$ |
9.81 |
|
|
$ |
10.90 |
|
Net
investment income |
|
|
0.03 |
|
|
|
0.01 |
|
|
|
0.05 |
|
|
|
0.03 |
|
|
|
0.05 |
|
Net
realized and unrealized gain/(loss) on investments and foreign currency transactions |
|
|
(1.28 |
) |
|
|
2.11 |
|
|
|
0.60 |
|
|
|
(0.49 |
) |
|
|
0.42 |
|
Total
from investment operations |
|
|
(1.25 |
) |
|
|
2.12 |
|
|
|
0.65 |
|
|
|
(0.46 |
) |
|
|
0.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
to Preferred Shareholders: (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
0.00 |
(b) |
|
|
(0.00 |
)(b) |
|
|
(0.00 |
)(b) |
|
|
(0.00 |
)(b) |
|
|
(0.00 |
)(b) |
Net
realized gain |
|
|
(0.15 |
) |
|
|
(0.08 |
) |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
|
|
(0.06 |
) |
Total
distributions to preferred shareholders |
|
|
(0.15 |
) |
|
|
(0.08 |
) |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
|
|
(0.06 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase/(Decrease) in Net Assets Attributable to Common Shareholders Resulting from Operations |
|
|
(1.40 |
) |
|
|
2.04 |
|
|
|
0.60 |
|
|
|
(0.51 |
) |
|
|
0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
to Common Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
(0.06 |
) |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
Net
realized gain |
|
|
(0.89 |
) |
|
|
(0.73 |
) |
|
|
(0.74 |
) |
|
|
(0.89 |
) |
|
|
(0.88 |
) |
Return
of capital |
|
|
— |
|
|
|
(0.12 |
) |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
|
|
(0.15 |
) |
Total
distributions to common shareholders |
|
|
(0.90 |
) |
|
|
(0.88 |
) |
|
|
(0.83 |
) |
|
|
(0.94 |
) |
|
|
(1.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease
in net asset value from common shares issued in rights offering |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.44 |
) |
Increase
in net asset value from repurchase of common shares |
|
|
— |
|
|
|
0.00 |
(b) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Increase
in net asset value from common shares issued upon reinvestment of distributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.00 |
(b) |
Increase
in net asset value from redemption of preferred shares |
|
|
— |
|
|
|
0.12 |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
Offering
expenses charged to paid-in capital |
|
|
(0.00 |
)(b) |
|
|
(0.07 |
) |
|
|
— |
|
|
|
(0.00 |
)(b) |
|
|
(0.01 |
) |
Total
Fund share transactions |
|
|
(0.00 |
)(b) |
|
|
0.05 |
|
|
|
— |
|
|
|
(0.00 |
)(b) |
|
|
(0.45 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value Attributable to Common Shareholders, End of Year |
|
$ |
7.04 |
|
|
$ |
9.34 |
|
|
$ |
8.13 |
|
|
$ |
8.36 |
|
|
$ |
9.81 |
|
NAV
total return † |
|
|
(16.54 |
)% |
|
|
26.50 |
% |
|
|
7.59 |
% |
|
|
(5.57 |
)% |
|
|
4.17 |
% |
Market
value, end of year |
|
$ |
7.06 |
|
|
$ |
9.20 |
|
|
$ |
7.24 |
|
|
$ |
7.50 |
|
|
$ |
10.01 |
|
Investment
total return †† |
|
|
(14.93 |
)% |
|
|
40.21 |
% |
|
|
7.97 |
% |
|
|
(16.33 |
)% |
|
|
(6.63 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
to Average Net Assets and Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets including liquidation value of preferred shares, end of year (in 000’s) |
|
$ |
243,309 |
|
|
$ |
297,503 |
|
|
$ |
232,399 |
|
|
$ |
238,049 |
|
|
$ |
273,307 |
|
Net
assets attributable to common shares, end of year (in 000’s) |
|
$ |
173,284 |
|
|
$ |
227,477 |
|
|
$ |
197,623 |
|
|
$ |
203,274 |
|
|
$ |
238,532 |
|
Ratio
of net investment income/(loss) to average net assets attributable to common shares before preferred share distributions |
|
|
0.39 |
% |
|
|
0.13 |
% |
|
|
0.70 |
% |
|
|
0.33 |
% |
|
|
0.13 |
% |
Ratio
of operating expenses to average net assets attributable to common shares before fees waived/fee reduction(c) |
|
|
1.62 |
%(d) |
|
|
1.45 |
%(d) |
|
|
1.49 |
%(d)(e) |
|
|
1.45 |
%(d) |
|
|
1.59 |
% |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Selected
data for a common share outstanding throughout each year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Year Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
2014 |
|
Ratios
to Average Net Assets and Supplemental Data (Continued): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio
of operating expenses to average net assets attributable to common shares net of advisory fee reduction, if any(f) |
|
|
1.53 |
%(d) |
|
|
1.45 |
%(d) |
|
|
1.49 |
%(d)(e) |
|
|
1.30 |
%(d) |
|
|
1.50 |
% |
Portfolio
turnover rate |
|
|
20.5 |
% |
|
|
16.8 |
% |
|
|
10.3 |
% |
|
|
14.0 |
% |
|
|
16.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
Preferred Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.000%
Series B Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation
value, end of year (in 000’s) |
|
$ |
19,775 |
|
|
$ |
19,775 |
|
|
$ |
19,775 |
|
|
$ |
19,775 |
|
|
$ |
19,775 |
|
Total
shares outstanding (in 000’s) |
|
|
791 |
|
|
|
791 |
|
|
|
791 |
|
|
|
791 |
|
|
|
791 |
|
Liquidation
preference per share |
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
$ |
25.00 |
|
Average
market value (g) |
|
$ |
25.81 |
|
|
$ |
26.36 |
|
|
$ |
26.42 |
|
|
$ |
25.80 |
|
|
$ |
25.41 |
|
Asset
coverage per share(h) |
|
$ |
86.86 |
|
|
$ |
106.21 |
|
|
$ |
167.07 |
|
|
$ |
171.13 |
|
|
$ |
196.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
C Auction Rate Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation
value, end of year (in 000’s) |
|
$ |
250 |
|
|
$ |
250 |
|
|
$ |
15,000 |
|
|
$ |
15,000 |
|
|
$ |
15,000 |
|
Total
shares outstanding (in 000’s) |
|
|
0 |
(i) |
|
|
0 |
(i) |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
Liquidation
preference per share |
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
Liquidation
value (j) |
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
Asset
coverage per share(h) |
|
$ |
86,865 |
|
|
$ |
106,212 |
|
|
$ |
167,071 |
|
|
$ |
171,134 |
|
|
$ |
196,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.125%
Series E Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation
value, end of year (in 000’s) |
|
$ |
50,000 |
|
|
$ |
50,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total
shares outstanding (in 000’s) |
|
|
2,000 |
|
|
|
2,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Liquidation
preference per share |
|
$ |
25.00 |
|
|
$ |
25.00 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Average
market value(g) |
|
$ |
23.80 |
|
|
$ |
24.98 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Asset
coverage per share(h) |
|
$ |
86.86 |
|
|
$ |
106.21 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Asset
Coverage (k) |
|
|
347 |
% |
|
|
425 |
% |
|
|
668 |
% |
|
|
685 |
% |
|
|
786 |
% |
|
† |
Based
on net asset value per share, adjusted for reinvestment of distributions of net asset value on the ex-dividend date, including the
effect of shares pursuant to the 2014 rights offering, assuming full subscription by shareholders. |
|
†† |
Based
on market value per share, adjusted for reinvestment of distributions at prices determined under the Fund’s dividend reinvestment
plan including the effect of shares issued pursuant to the 2014 rights offering, assuming full subscription by shareholders. |
|
(a) |
Calculated
based on average common shares outstanding on the record dates throughout the years. |
|
(b) |
Amount
represents less than $0.005 per share. |
|
(c) |
Ratio
of operating expenses to average net assets including liquidation value of preferred shares before fee waived/fee reduction for the
years ended December 31, 2018, 2017, 2016, 2015, and 2014 would have been 1.22%, 1.23%, 1.27%, 1.26%, and 1.37%, respectively. |
|
(d) |
The
Fund received credits from a designated broker who agreed to pay certain Fund operating expenses. For the years ended December 31,
2018, 2017, 2016, and 2015, there was no impact on the expense ratios. |
|
(e) |
During
the year ended December 31, 2016, the fund received a one time reimbursement of custody expenses paid in prior years. Had such
reimbursement been included in this period, the annualized expense ratios would have been 1.32% attributable to common shares before
fees waived, 1.32% attributable to common shares net of advisory fee reduction, 1.13% including liquidation value of preferred shares
before fees waived, and 1.13% including liquidation value of preferred shares net of advisory fee reduction. |
|
(f) |
Ratio
of operating expenses to average net assets including liquidation value of preferred shares net of advisory fee reduction for the
years ended December 31, 2018, 2017, 2016, 2015, and 2014 would have been 1.15%, 1.23%, 1.27%, 1.13%, and 1.29%, respectively. |
|
(g) |
Based
on weekly prices. |
|
(h) |
Asset
coverage per share is calculated by combining all series of preferred shares. |
|
(i) |
Actual
number of shares outstanding is 10. |
|
(j) |
Since
February 2008, the weekly auctions have failed. Holders that have submitted orders have not been able to sell any or all of
their shares in the auctions. |
|
(k) |
Asset
coverage is calculated by combining all series of preferred shares. |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
CHANGES
OCCURRING DURING THE PRIOR FISCAL PERIOD
The
following information is a summary of certain changes during the most recent fiscal year ended December 31, 2023. This information
may not reflect all of the changes that have occurred since you purchased shares of the Fund.
During
the Fund’s most recent fiscal year, there were no material changes to the Fund’s investment objective or policies that have
not been approved by stockholders or in the principal risk factors associated with an investment in the Fund.
Control
Share Acquisitions
On
February 16, 2023, the Fund elected, by resolution unanimously adopted by the Board of Directors of the Fund in accordance with
Section 3-702(c)(4) of the MGCL, to be subject to the Maryland Control Share Acquisition Act (the “Control Share Act”),
effective immediately. The Control Share Act only applies to acquisitions of Fund shares on or after February 16, 2023.
Under
the MGCL, the Control Share Act provides that a holder of control shares of a Maryland corporation acquired in a control share acquisition
has no voting rights with respect to those shares except to the extent approved by a vote of two-thirds of the votes entitled to be cast
on the matter. Shares owned by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares
entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by
the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue
of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of
voting power:
|
● |
one-tenth
or more but less than one-third; |
|
● |
one-third
or more but less than a majority; or |
|
● |
a
majority or more of all voting power. |
The
requisite stockholder approval must be obtained each time an acquiror crosses one of the thresholds of voting power set forth above.
The Control Share Act effectively allows non-interested stockholders to evaluate the intentions and plans of an acquiror above each threshold
level. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder
approval. A control share acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions.
A
person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special
meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling
of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the meeting.
If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.
If
voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by
the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have
previously been approved. The right of the corporation to
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
redeem
control shares is subject to certain conditions and limitations, including, compliance with the 1940 Act. Fair value is determined, without
regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or
of any meeting of stockholders at which the voting rights of the shares are considered and not approved. If voting rights for control
shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all
other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not
be less than the highest price per share paid by the acquiror in the control share acquisition.
In
connection with the Fund’s election to be subject to the Control Share Act, the Fund’s Board of Directors amended the Fund’s
bylaws such that the Control Share Act does not apply (a) to shares of any class or series of stock of the Fund other than common stock,
(b) to any acquisition by Mario J. Gabelli, or any affiliates or associates thereof, of shares of stock of the Fund or (c) to shares
of stock of the Fund in a control share acquisition if, prior to the acquisition, the person obtains approval of the Board of Directors
exempting the acquisition from the Control Share Act. In addition, no stockholder of the Fund is entitled to exercise the rights of an
objecting stockholder under Section 3-708 of the MGCL.
The
foregoing is only a summary of the material terms of the Control Share Act. Stockholders should consult their own counsel with respect
to the application of the Control Share Act to any particular circumstance. Some uncertainty around the general application under the
1940 Act of state control share statutes exists as a result of recent court decisions which have held that control share acquisition
provisions in funds’ governing documents are not consistent with the 1940 Act. Additionally, in some circumstances uncertainty
may also exist in how to enforce the control share restrictions contained in state control share statutes against beneficial owners who
hold their shares through financial intermediaries.
The
ownership restrictions set forth in the Fund’s Governing Documents and the limitations of the Control Share Act described above
could have the effect of depriving stockholders of an opportunity to sell their shares at a premium over prevailing market prices by
discouraging a third party from seeking to obtain control over the Fund and may reduce market demand for the Fund’s common shares,
which could have the effect of increasing the likelihood that the Fund’s common shares trade at a discount to net asset value and
increasing the amount of any such discount.
INVESTMENT
OBJECTIVES AND POLICIES
Investment
Objectives
The
Fund’s primary investment objective is to achieve long-term growth of capital by investing primarily in the common stock and other
securities of foreign and domestic companies involved in the telecommunications, media, publishing, and entertainment industries. Income
is the secondary investment objective. The investment objectives of long-term growth of capital and income are fundamental policies of
the Fund. The Fund’s policy of concentration in companies in the telecommunications, media, publishing, and entertainment industries
is also a fundamental policy of the Fund.
Under
normal market conditions, the Fund will invest at least 80% of the value of its net assets, plus borrowings for investment purposes,
in common stock and other securities, including convertible securities, preferred stock, options, and warrants of companies in the telecommunications,
media, publishing, and entertainment industries
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
(the
“80% Policy”). The Fund may invest in companies of any size market capitalization. The Fund may invest, without limitation,
in foreign securities. The Fund may also invest in securities of companies located in emerging markets.
A
company will be considered to be in these industries if it derives at least 50% of its revenues or earnings from, or devotes at least
50% of its assets to, the indicated activities or multimedia related activities. The 80% Policy may be changed without stockholder approval.
The Fund will provide stockholders with notice at least sixty days prior to the implementation of any change in the 80% Policy.
The
telecommunications companies in which the Fund may invest are engaged in the development, manufacture, or sale of communications services
or equipment throughout the world, including the following products or services: regular telephone service; wireless communications services
and equipment, including cellular telephone, microwave and satellite communications, paging, and other emerging wireless technologies;
equipment and services for both data and voice transmission, including computer hardware and software; electronic components and communications
equipment; video conferencing; electronic mail; local and wide area networking, and linkage of data and word processing systems; publishing
and information systems; video text and teletext; emerging technologies combining television, telephone and computer systems; broadcasting,
including television and radio, satellite and microwave transmission and cable television.
The
entertainment, media and publishing companies in which the Fund may invest are engaged in providing the following products or services:
the creation, packaging, distribution, and ownership of entertainment programming throughout the world, including pre-recorded music,
feature-length motion pictures, made-for-TV movies, television series, documentaries, animation, game shows, sports programming, and
news programs; live events such as professional sporting events or concerts, theatrical exhibitions, television and radio broadcasting,
satellite and microwave transmission, cable television systems and programming, broadcast and cable networks, wireless cable television
and other emerging distribution technologies; home video, interactive and multimedia programming, including home shopping and multiplayer
games; publishing, including newspapers, magazines and books, advertising agencies and niche advertising mediums such as in-store or
direct mail; emerging technologies combining television, telephone, and computer systems, computer hardware and software; and equipment
used in the creation and distribution of entertainment programming such as that required in the provision of broadcast, cable, or telecommunications
services.
Investing
in securities of foreign issuers, which generally are denominated in foreign currencies, may involve certain risk and opportunity considerations
not typically associated with investing in domestic companies and could cause the Fund to be affected favorably or unfavorably by changes
in currency exchange rates and revaluations of currencies.
The
Investment Adviser believes that at the present time investment by the Fund in the securities of companies located throughout the world
presents great potential for accomplishing the Fund’s investment objectives. While the Investment Adviser expects that a substantial
portion of the Fund’s portfolio may be invested in the securities of domestic companies, a significant portion of the Fund’s
portfolio may also be comprised of the securities of issuers headquartered outside the United States.
No
assurance can be given that the Fund’s investment objectives will be achieved.
Investment
Methodology of the Fund
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
In
selecting securities for the Fund, the Investment Adviser normally will consider the following factors, among others:
|
● |
the
Investment Adviser’s own evaluations of the private market value (as defined below), cash flow, earnings per share, and other
fundamental aspects of the underlying assets and business of the company; |
|
● |
the
potential for capital appreciation of the securities; |
|
● |
the
interest or dividend income generated by the securities; |
|
● |
the
prices of the securities relative to other comparable securities; |
|
● |
whether
the securities are entitled to the benefits of call protection or other protective covenants; |
|
● |
the
existence of any anti-dilution protections or guarantees of the security; and |
|
● |
the
diversification of the portfolio of the Fund as to issuers. |
The
Investment Adviser’s investment philosophy with respect to equity securities is to identify assets that are selling in the public
market at a discount to their private market value. The Investment Adviser defines private market value as the value informed purchasers
are willing to pay to acquire assets with similar characteristics. The Investment Adviser also normally evaluates an issuer’s free
cash flow and long-term earnings trends. Finally, the Investment Adviser looks for a catalyst, something indigenous to the company,
its industry, or country that will surface additional value.
Principal
Investment Practices and Policies
Equity
Securities. The Fund invests in equity securities (such as common stock and preferred stock).
Common
stocks represent the residual ownership interest in the issuer and holders of common stock are entitled to the income and increase in
the value of the assets and business of the issuer after all of its debt obligations and obligations to preferred stockholders are satisfied.
Common stocks generally have voting rights. Common stocks fluctuate in price in response to many factors including historical and prospective
earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.
Equity
securities also include preferred stock (whether or not convertible into common stock) and debt securities convertible into or exchangeable
for common or preferred stock. Preferred stock has a preference over common stock in liquidation (and generally dividends as well) but
is subordinated to the liabilities of the issuer in all respects. As a general rule the market value of preferred stock with a fixed
dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible
preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other
obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock
than in a more senior debt security with similarly stated yield characteristics. The market value of preferred stock will also generally
reflect whether (and if so when) the issuer may force holders to sell their preferred stock back to the issuer and whether (and if so
when) the holders may force the issuer to buy back their preferred stock. Generally speaking, the right of the issuer to repurchase the
preferred stock tends to reduce any premium at which the preferred stock might otherwise trade due to interest rate or credit factors,
while the right of the holders to require the issuer to repurchase the preferred stock tends to reduce any discount at which the preferred
stock might otherwise trade due to interest rate or credit factors.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
In
addition, some preferred stocks are non-cumulative, meaning that the dividends do not accumulate and need not ever be paid. A portion
of the portfolio may include investments in non-cumulative preferred stocks, whereby the issuer does not have an obligation to make up
any arrearages to its stockholders. There is no assurance that dividends or distributions on non-cumulative preferred stocks in which
the Fund invests will be declared or otherwise made payable.
Securities
that are convertible into or exchangeable for preferred or common stock are liabilities of the issuer but are generally subordinated
to more senior elements of the issuer’s balance sheet. Although such securities also generally reflect an element of conversion
value, their market value also varies with interest rates and perceived credit risk. Many convertible securities are not investment grade,
that is, not rated “BBB” or better by S&P or “Baa” or better by Moody’s or considered by the Investment
Adviser to be of similar quality. Preferred stocks and convertible securities may have many of the same characteristics and risks as
nonconvertible debt securities.
The
Fund is also permitted to invest in certain other securities with innovative structures in the convertible securities market. These include
“mandatory conversion” securities, which consist of debt securities or preferred stocks that convert automatically into common
stock of the same or a different issuer at a specified date and conversion ratio.
The
market value of a convertible security may be viewed as comprised of two components: its “investment value,” which is its
value based on its yield without regard to its conversion feature; and its “conversion value,” which is its value attributable
to the underlying common stock obtainable on conversion. The investment value of a convertible security is influenced by changes in interest
rates and the yield of similar non-convertible securities, with investment value declining as interest rates increase and increasing
as interest rates decrease. The conversion value of a convertible security is influenced by changes in the market price of the underlying
common stock. If, because of a low price of the underlying common stock, the conversion value is low relative to the investment value,
the price of the convertible security is governed principally by its investment value. To the extent the market price of the underlying
common stock approaches or exceeds the conversion price, the convertible security will be increasingly influenced by its conversion value,
and the convertible security may sell at a premium over its conversion value to the extent investors place value on the right to acquire
the underlying common stock while holding a fixed income security.
Accordingly,
convertible securities have unique investment characteristics because (i) they have relatively high yields as compared to common stocks,
(ii) they have defensive characteristics since they provide a fixed return even if the market price of the underlying common stock declines,
and (iii) they provide the potential for capital appreciation if the market price of the underlying common stock increases.
A
convertible security may be subject to redemption at the option of the issuer at a price established in the charter provision or indenture
pursuant to which the convertible security is issued. If a convertible security held by the Fund is called for redemption, the Fund will
be required to surrender the security for redemption, convert it into the underlying common stock or sell it to a third party. Before
the Fund purchases a convertible security it will review carefully the redemption provisions of the security.
There
may be additional types of convertible securities with features not specifically referred to herein in which the Fund may invest consistent
with its investment objectives and policies. For a discussion of risk factors of convertible securities, see “Risk Factors and
Special Considerations—Convertible Securities Risk.”
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Options.
The Fund may purchase or sell, i.e., write, options on securities, securities indices and foreign currencies which are listed
on a national securities exchange or in the OTC market as a means of achieving additional return or of hedging the value of the Fund’s
portfolio. A call option is a contract that, in return for a premium, gives the holder of the option the right to buy from the writer
of the call option the security or currency underlying the option at a specified exercise price at any time during the term of the option.
The writer of the call option has the obligation, upon exercise of the option, to deliver the underlying security or currency upon payment
of the exercise price during the option period. A put option is the reverse of a call option, giving the holder of the option the right,
in return for a premium, to sell the underlying security to the writer, at a specified price, and obligating the writer to purchase the
underlying security from the holder upon exercise of the exercise price.
If
the Fund has written an option, it may terminate its obligation by effecting a closing purchase transaction. This is accomplished by
purchasing an option of the same series as the option previously written. However, with respect to exchange-traded options, once the
Fund has been assigned an exercise notice, the Fund will be unable to effect a closing purchase transaction. Similarly, if the Fund is
the holder of an option it may liquidate its position by effecting a closing sale transaction on an exchange. This is accomplished by
selling an option of the same series as the option previously purchased. There can be no assurance that either a closing purchase or
sale transaction can be effected when the Fund so desires.
The
Fund will realize a profit from a closing transaction if the price of the transaction is less than the premium received from writing
the option or is more than the premium paid to purchase the option; the Fund will realize a loss from a closing transaction if the price
of the transaction is more than the premium received from writing the option or is less than the premium paid to purchase the option.
Since call option prices generally reflect increases in the price of the underlying security, any loss resulting from the repurchase
of a call option may also be wholly or partially offset by unrealized appreciation of the underlying security. Other principal factors
affecting the market value of a put or a call option include supply and demand, prevailing interest rates, the current market price and
price volatility of the underlying security, and the time remaining until the expiration date of the option. Gains and losses on investments
in options depend, in part, on the ability of the Investment Adviser to predict correctly the effect of these factors. The use of options
cannot serve as a complete hedge since the price movement of securities underlying the options will not necessarily follow the price
movements of the portfolio securities subject to the hedge.
An
option position may be closed out only on an exchange which provides a secondary market for an option of the same series or in a private
transaction. Although the Fund will generally purchase or write only those options for which there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an exchange will persist for any particular option. In such event, it
might not be possible to effect closing transactions in particular options, so that the Fund would have to exercise its options in order
to realize any profit and would incur brokerage commissions upon the exercise of call options and upon the subsequent disposition of
underlying securities for the exercise of put options.
Although
the Investment Adviser will attempt to take appropriate measures to minimize the risks relating to the Fund’s writing of put and
call options, there can be no assurance that the Fund will succeed in any option-writing program it undertakes.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
The
Fund may write covered call options on common stocks that it owns or has an immediate right to acquire through conversion or exchange
of other securities in an amount not to exceed 25% of total assets or invest up to 10% of its total assets in the purchase of put options
on common stocks that the Fund owns or may acquire through the conversion or exchange of other securities that it owns.
Warrants.
The Fund may invest in warrants. Warrants are, in effect, longer-term call options. They give the holder the right to purchase
a given number of shares of a particular company at specified prices within certain periods of time. The purchaser of a warrant expects
that the market price of the security will exceed the purchase price of the warrant plus the exercise price of the warrant, thus giving
him a profit. Since the market price may never exceed the exercise price before the expiration date of the warrant, the purchaser of
the warrant risks the loss of the entire purchase price of the warrant. Warrants generally trade in the open market and may be sold rather
than exercised. Warrants are sometimes sold in unit form with other securities of an issuer. Units of warrants and common stock may be
employed in financing young, unseasoned companies. The purchase price of a warrant varies with the exercise price of the warrant, the
current market value of the underlying security, the life of the warrant and various other investment factors.
If
the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security,
the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and
any loss will be increased, by the transaction costs incurred by the Fund, including the costs associated with providing collateral to
the broker-dealer (usually cash, U.S. government securities or other highly liquid debt securities) and the maintenance of collateral
with its custodian.
Although
the Fund’s gain is limited to the price at which it sold the security short, its potential loss is theoretically unlimited.
Foreign
Securities. There is no limitation on the amount of foreign securities in which the Fund may invest. The Investment Adviser believes
that investing in foreign securities offers both enhanced investment opportunities and additional risks beyond those present in U.S.
securities. Investing in foreign securities may provide increased diversification by adding securities from various foreign countries
(i) that offer different investment opportunities, (ii) that generally are affected by different economic trends and (iii) whose stock
markets may not be correlated with U.S. markets. At the same time, these opportunities and trends involve risks that may not be encountered
in U.S. investments.
The
following considerations comprise both risks and opportunities not typically associated with investing in U.S. securities: fluctuations
in exchange rates of foreign currencies; possible imposition of exchange control regulations or currency restrictions that would prevent
cash from being brought back to the United States; less public information with respect to issuers of securities; less government supervision
of stock exchanges, securities brokers and issuers of securities; lack of uniform accounting, auditing and financial reporting standards;
lack of uniform settlement periods and trading practices; less liquidity and frequently greater price volatility in foreign markets than
in the United States; possible imposition of foreign taxes; the possibility of expropriation or confiscatory taxation, seizure or nationalization
of foreign bank deposits or other assets; the adoption of foreign government restrictions and other adverse political, social or diplomatic
developments that could affect investment; difficulty in obtaining or enforcing a court judgment abroad; sometimes less advantageous
legal, operational and financial protections applicable to foreign sub-custodial arrangements; and the historically lower
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
level
of responsiveness of foreign management to stockholder concerns (such as dividends and return on investment).
The
Fund may also invest in the debt securities of foreign governments. Although such investments are not a principal strategy of the Fund,
there is limitation on its ability to invest in the debt securities of foreign governments.
Emerging
Market Countries. The risks described above for foreign securities, including the risks of nationalization and expropriation
of assets, are typically increased to the extent that the Fund invests in companies headquartered in developing, or emerging market,
countries. Investments in securities of companies headquartered in such countries may be considered speculative and subject to certain
special risks. The political and economic structures in many of these countries may be in their infancy and developing rapidly, and such
countries may lack the social, political and economic characteristics of more developed countries. Certain of these countries have in
the past failed to recognize private property rights and have at times nationalized and expropriated the assets of private companies.
Some countries have inhibited the conversion of their currency to another. The currencies of certain emerging market countries have experienced
devaluation relative to the U.S. dollar, and future devaluations may adversely affect the value of the Fund’s assets denominated
in such currencies. Some emerging market countries have experienced substantial rates of inflation for many years. Continued inflation
may adversely affect the economies and securities markets of such countries. In addition, unanticipated political or social developments
may affect the value of the Fund’s investments in these countries and the availability of the Fund of additional investments in
these countries. The small size, limited trading volume and relative inexperience of the securities markets in these countries may make
the Fund’s investments in such countries illiquid and more volatile than investments in more developed countries, and the Fund
may be required to establish special custodial or other arrangements before making investments in these countries. There may be little
financial or accounting information available with respect to companies located in these countries, and it may be difficult as a result
to assess the value or prospects of an investment in such companies.
Other
Investment Practices
Risk
Arbitrage. The Fund may invest without limitation in securities pursuant to “risk arbitrage” strategies or in other
investment funds managed pursuant to such strategies. Risk arbitrage investments are made in securities of companies for which a tender
or exchange offer has been made or announced and in securities of companies for which a merger, consolidation, liquidation or reorganization
proposal has been announced if, in the judgment of the Investment Adviser, there is a reasonable prospect of capital appreciation significantly
greater than the brokerage and other transaction expenses involved. Risk arbitrage strategies attempt to exploit merger activity to capture
the spread between current market values of securities and their values after successful completion of a merger, restructuring or similar
corporate transaction. Transactions associated with risk arbitrage strategies typically involve the purchases or sales of securities
in connection with announced corporate actions which may include, but are not limited to, mergers, consolidations, acquisitions, transfers
of assets, tender offers, exchange offers, re-capitalizations, liquidations, divestitures, spin-offs and similar transactions. However,
a merger or other restructuring or tender or exchange offer anticipated by the Fund and in which it holds an arbitrage position may not
be completed on the terms contemplated or within the time frame anticipated, resulting in losses to the Fund.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
In
general, securities which are the subject of such an offer or proposal sell at a premium to their historic market price immediately prior
to the announcement of the offer but may trade at a discount or premium to what the stated or appraised value of the security would be
if the contemplated transaction were approved or consummated.
Such
investments may be advantageous when the discount significantly overstates the risk of the contingencies involved; significantly undervalues
the securities, assets or cash to be received by stockholders as a result of the contemplated transaction; or fails adequately to recognize
the possibility that the offer or proposal may be replaced or superseded by an offer or proposal of greater value. The evaluation of
such contingencies requires unusually broad knowledge and experience on the part of the Investment Adviser which must appraise not only
the value of the issuer and its component businesses as well as the assets or securities to be received as a result of the contemplated
transaction but also the financial resources and business motivation behind the offer and/or the dynamics and business climate when the
offer or proposal is in process. Since such investments are ordinarily short-term in nature, they will tend to increase the turnover
ratio of the Fund, thereby increasing its brokerage and other transaction expenses. Risk arbitrage strategies may also involve short
selling, options hedging and other arbitrage techniques to capture price differentials.
Temporary
Defensive Investments. Subject to the Fund’s investment restrictions, when a temporary defensive period is believed by
the Investment Adviser to be warranted (“temporary defensive periods”), the Fund may, without limitation, hold cash or invest
its assets in securities of U.S. government sponsored instrumentalities, in repurchase agreements in respect of those instruments, and
in certain high grade commercial paper instruments. During temporary defensive periods, the Fund may also invest up to 10% of the market
value of its total assets in money market mutual funds that invest primarily in securities of U.S. government sponsored instrumentalities
and repurchase agreements in respect of those instruments. Obligations of certain agencies and instrumentalities of the U.S. government,
such as the Government National Mortgage Association, are supported by the “full faith and credit” of the U.S. government;
others, such as those of the Export-Import Bank of the U.S., are supported by the right of the issuer to borrow from the U.S. Treasury;
others, such as those of the Federal National Mortgage Association, are supported by the discretionary authority of the U.S. government
to purchase the agency’s obligations; and still others, such as those of the Student Loan Marketing Association, are supported
only by the credit of the instrumentality. No assurance can be given that the U.S. government would provide financial support to U.S.
government sponsored instrumentalities if it is not obligated to do so by law. During temporary defensive periods, the Fund may be less
likely to achieve its investment objective.
Non-Investment
Grade Securities. The Fund may invest up to 10% of its total assets in fixed income securities rated below investment grade by
recognized statistical rating agencies or unrated securities considered by the Investment Adviser to be of comparable quality. These
securities, which may be preferred stock or debt, are predominantly speculative and involve major risk exposure to adverse conditions.
Securities that are rated lower than “BBB” by S&P or lower than “Baa” by Moody’s or unrated securities
considered by the Investment Adviser to be of comparable quality are referred to in the financial press as “junk bonds” or
“high yield” securities.
Generally,
such non-investment grade securities and unrated securities considered by the Investment Adviser to be of comparable quality offer a
higher current yield than is offered by higher rated securities, but also (i) will likely have some quality and protective characteristics
that, in the judgment of the rating organizations, are outweighed by large uncertainties or major risk exposures to adverse conditions,
and (ii) are predominantly
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
speculative
with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligation. The market
values of certain of these securities also tend to be more sensitive to individual corporate developments and changes in economic conditions
than higher quality securities. In addition, such comparable unrated securities generally present a higher degree of credit risk. The
risk of loss due to default by these issuers is significantly greater because such non-investment grade securities and unrated securities
considered by the Investment Adviser to be of comparable quality generally are unsecured and frequently are subordinated to the prior
payment of senior indebtedness. In light of these risks, the Investment Adviser, in evaluating the creditworthiness of an issue, whether
rated or unrated, will take various factors into consideration, which may include, as applicable, the issuer’s operating history,
financial resources and its sensitivity to economic conditions and trends, the market support for the facility financed by the issue,
the perceived ability and integrity of the issuer’s management and regulatory matters.
In
addition, the market value of non-investment grade securities is more volatile than that of higher quality securities, and the markets
in which such lower rated or unrated securities are traded are more limited than those in which higher rated securities are traded. The
existence of limited markets may make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its
portfolio and calculating its net asset value.
Moreover,
the lack of a liquid trading market may restrict the availability of securities for the Fund to purchase and may also have the effect
of limiting the ability of the Fund to sell securities at their fair value in order to respond to changes in the economy or the financial
markets.
Non-investment
grade securities and unrated securities considered by the Investment Adviser to be of comparable quality also present risks based on
payment expectations. If an issuer calls the obligation for redemption (often a feature of fixed income securities), the Fund may have
to replace the security with a lower yielding security, resulting in a decreased return for investors. Also, as the principal value of
nonconvertible bonds and preferred stocks moves inversely with movements in interest rates, in the event of rising interest rates the
value of the securities held by the Fund may decline proportionately more than a portfolio consisting of higher rated securities. Investments
in zero coupon bonds may be more speculative and subject to greater fluctuations in value due to changes in interest rates than bonds
that pay interest currently.
The
Fund may purchase securities of companies that are experiencing significant financial or business difficulties, including companies involved
in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant financial returns
to the Fund, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for
successful investments in issuers experiencing significant business and financial difficulties is unusually high. There can be no assurance
that the Fund will correctly evaluate the value of the assets collateralizing its investments or the prospects for a successful reorganization
or similar action. In any reorganization or liquidation proceeding relating to a portfolio investment, the Fund may lose all or part
of its investment or may be required to accept collateral with a value less than the amount of the Fund’s initial investment.
As
part of its investments in non-investment grade securities, the Fund may invest in securities of issuers in default. The Fund will make
an investment in securities of issuers in default only when the Investment Adviser believes that such issuers will honor their obligations
or emerge from bankruptcy protection and the value of
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
these
securities will appreciate. By investing in securities of issuers in default, the Fund bears the risk that these issuers will not continue
to honor their obligations or emerge from bankruptcy protection or that the value of the securities will not otherwise appreciate.
In
addition to using statistical rating agencies and other sources, the Investment Adviser also performs its own analysis of issues in seeking
investments that it believes to be underrated (and thus higher yielding) in light of the financial condition of the issuer. Its analysis
of issuers may include, among other things, current and anticipated cash flow and borrowing requirements, value of assets in relation
to historical cost, strength of management, responsiveness to business conditions, credit standing and current anticipated results of
operations. In selecting investments for the Fund, the Investment Adviser may also consider general business conditions, anticipated
changes in interest rates and the outlook for specific industries.
Subsequent
to its purchase by the Fund, an issue of securities may cease to be rated or its rating may be reduced. In addition, it is possible that
statistical rating agencies might change their ratings of a particular issue to reflect subsequent events on a timely basis. Moreover,
such ratings do not assess the risk of a decline in market value. None of these events will require the sale of the securities by the
Fund, although the Investment Adviser will consider these events in determining whether the Fund should continue to hold the securities.
Fixed
income securities, including lower grade securities, frequently have call or buy-back features that permit their issuers to call or repurchase
the securities from their holders, such as the Fund. If an issuer exercises these rights during periods of declining interest rates,
the Fund may have to replace the security with a lower yielding security, thus resulting in a decreased return for the Fund.
The
market for non-investment grade and comparable unrated securities has experienced periods of significantly adverse price and liquidity
several times, particularly at or around times of economic recession. Past market recessions have adversely affected the value of such
securities and the ability of certain issuers of such securities to repay principal and pay interest thereon or to refinance such securities.
The market for those securities may react in a similar fashion in the future.
Limitations
on the Purchase and Sale of Futures Contracts, Certain Options and Swaps. Subject to the guidelines of the Board, the Fund may
engage in “commodity interest” transactions (generally, transactions in futures, certain options, certain currency transactions,
and certain types of swaps) only for bona fide hedging or other permissible transactions in accordance with the rules and regulations
of the Commodity Futures Trading Commission (“CFTC”). Pursuant to amendments by the CFTC to Rule 4.5 under the Commodity
Exchange Act (“CEA”), the Investment Adviser has filed a notice of exemption from registration as a “commodity pool
operator” with respect to the Fund. The Fund and the Investment Adviser are therefore not subject to registration or regulation
as a commodity pool operator under the CEA. In addition, certain trading restrictions are applicable to the Fund as a result of this
status. These trading restrictions permit the Fund to engage in commodity interest transactions that include (i) “bona fide hedging”
transactions, as that term is defined and interpreted by the CFTC and its staff, without regard to the percentage of the Fund’s
assets committed to margin and options premiums and (ii) non-bona fide hedging transactions, provided that the Fund does not enter into
such non-bona fide hedging transactions if, immediately thereafter, either (a) the sum of the amount of initial margin deposits on the
Fund’s existing futures positions or swaps positions and option or swaption premiums would exceed 5% of the market value of the
Fund’s liquidating value, after taking into account unrealized profits and
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
unrealized
losses on any such transactions, or (b) the aggregate net notional value of the Fund’s commodity interest transactions would exceed
100% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on
any such transactions. In addition to meeting one of the foregoing trading limitations, the Fund may not market itself as a commodity
pool or otherwise as a vehicle for trading in the futures, options or swaps markets. Therefore, in order to claim the Rule 4.5 exemption,
the Fund is limited in its ability to invest in commodity futures, options, and certain types of swaps (including securities futures,
broad based stock index futures, and financial futures contracts). As a result, the Fund is more limited in its ability to use these
instruments than in the past, and these limitations may have a negative impact on the ability of the Investment Adviser to manage the
Fund, and on the Fund’s performance. If the Investment Adviser was required to register as a commodity pool operator with respect
to the Fund, compliance with additional registration and regulatory requirements would increase Fund expenses. Other potentially adverse
regulatory initiatives could also develop.
Futures
Contracts and Options on Futures. The Fund may purchase and sell financial futures contracts and options thereon which are traded
on a commodities exchange or board of trade for certain hedging, yield enhancement and risk management purposes. A financial futures
contract is an agreement to purchase or sell an agreed amount of securities or currencies at a set price for delivery in the future.
These futures contracts and related options may be on debt securities, financial indices, securities indices, U.S. government securities
and foreign currencies. The Investment Adviser has claimed an exclusion from the definition of the term “commodity pool operator”
under the Commodity Exchange Act.
Forward
Currency Exchange Contracts. Subject to guidelines of the Board, the Fund may enter into forward foreign currency exchange contracts
to protect the value of its portfolio against uncertainty in the level of future currency exchange rates between a particular foreign
currency and the U.S. dollar or between foreign currencies in which its securities are or may be denominated. The Fund may enter into
such contracts on a spot (i.e., cash) basis at the rate then prevailing in the currency exchange market or on a forward basis by entering
into a forward contract to purchase or sell currency. A forward contract on foreign currency is an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days agreed upon by the parties from the date of the contract at a price
set on the date of the contract. Forward currency contracts (i) are traded in a market conducted directly between currency traders (typically,
commercial banks or other financial institutions) and their customers, (ii) generally have no deposit requirements and (iii) are typically
consummated without payment of any commissions. The Fund, however, may enter into forward currency contracts requiring deposits or involving
the payment of commissions. The Fund expects to invest in forward currency contracts for hedging or currency risk management purposes
and not in order to speculate on currency exchange rate movements. The Fund will only enter into forward currency contracts with parties
which it believes to be creditworthy.
In
hedging a specific transaction, the Fund may enter into a forward contract with respect to either the currency in which the transaction
is denominated or another currency deemed appropriate by the Investment Adviser. The amount the Fund may invest in forward currency contracts
is limited to the amount of its aggregate investments in foreign currencies. The use of forward currency contracts may involve certain
risks, including the failure of the counterparty to perform its obligations under the contract, and such use may not serve as a complete
hedge because of an imperfect correlation between movements in the prices of the contracts and the prices of the
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
currencies
hedged or used for cover. The Fund will only enter into forward currency contracts with parties that the Investment Adviser believes
to be creditworthy institutions.
Short
Sales. The Fund may make short sales of securities which it owns or which it has the right to acquire through conversion or exchange
of other securities it owns. In a short sale the Fund does not immediately deliver the securities sold and does not receive the proceeds
from the sale. The Fund is said to have a short position in the securities sold until it delivers the securities sold, at which time
it receives the proceeds of the sale. The market value for the securities sold short of any one issuer will not exceed 5% of the Fund’s
total assets or 5% of such issuer’s voting securities. In addition, the Fund may not make short sales or maintain a short position
if it would cause more than 25% of the Fund’s total assets, taken at market value, to be held as collateral for such sales. The
Fund may make short sales against the box without respect to such limitations.
The
Fund will normally close out a short position by purchasing and delivering an equal amount of the securities sold short, rather than
by delivering securities already held by the Fund. The Fund may, however, close out any short sale of common stock through the conversion
or exchange of securities or the exercise of warrants or rights it owns, or through the delivery of common stock already held by the
Fund.
The
short sale of a security is considered a speculative investment technique. The Fund may make a short sale in order to hedge against market
risks when it believes that the price of a security may decline, causing a decline in the value of a long position the Fund may have
in such security or a security convertible into or exchangeable for such security, or when, for tax or other reasons, the Fund does not
want to sell the security it owns. In such case, any future losses in the Fund’s long position should be reduced by a gain in the
short position. Conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such
gains or losses are reduced will depend upon the amount of the security sold short relative to the amount the Fund owns, either directly
or indirectly, and, in the case where the Fund owns convertible securities, changes with the conversion premiums. When the Fund makes
a short sale, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale in order
to satisfy its obligation to deliver the security upon conclusion of the sale. The Fund may have to pay a fee to borrow particular securities
and is often obligated to deliver any payments received on such borrowed securities, such as dividends.
Repurchase
Agreements. Repurchase agreements may be seen as loans by the Fund collateralized by underlying debt securities. Under the terms
of a typical repurchase agreement, the Fund would acquire an underlying debt obligation for a relatively short period (usually not more
than one week) subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed price and time.
This arrangement results in a fixed rate of return to the Fund that is not subject to market fluctuations during the holding period.
The Fund bears a risk of loss in the event that the other party to a repurchase agreement defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline
in the value of the underlying securities during the period in which it seeks to assert these rights. The Investment Adviser, acting
under the supervision of the Board, reviews the creditworthiness of those banks and dealers with which the Fund enters into repurchase
agreements to evaluate these risks, and monitors on an ongoing basis the value of the securities subject to repurchase agreements to
ensure that the value is maintained at the required level. The Fund will not enter into repurchase agreements with the Investment Adviser
or any of its affiliates.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Loans
of Portfolio Securities. To increase income, the Fund may lend its portfolio securities to securities broker-dealers or financial
institutions if: (i) the loan is collateralized in accordance with applicable regulatory requirements, and (ii) no loan will cause the
value of all loaned securities to exceed 20% of the value of its total assets.
If
the borrower fails to maintain the requisite amount of collateral, the loan automatically terminates and the Fund could use the collateral
to replace the securities while holding the borrower liable for any excess of replacement cost over the value of the collateral. As with
any extension of credit, there are risks of delay in recovery and in some cases even loss of rights in collateral should the borrower
of the securities violate the terms of the loan or fail financially. There can be no assurance that borrowers will not fail financially.
On termination of the loan, the borrower is required to return the securities to the Fund, and any gain or loss in the market price during
the loan would inure to the Fund. If the other party to the loan petitions for bankruptcy or becomes subject to the United States Bankruptcy
Code, the law regarding the rights of the Fund is unsettled. As a result, under extreme circumstances, there may be a restriction on
the Fund’s ability to sell the collateral and the Fund would suffer a loss.
Borrowing.
The Fund may borrow money in accordance with its investment restrictions, including as a temporary measure for extraordinary
or emergency purposes. It may not borrow for investment purposes.
Leveraging.
As provided in the 1940 Act and subject to certain exceptions, the Fund may issue senior securities (which may be stock, such
as preferred stock, and/or securities representing debt) so long as its total assets, less certain ordinary course liabilities, exceed
300% of the amount of the debt outstanding and exceed 200% of the amount of preferred stock and debt outstanding. Any such preferred
stock may be convertible in accordance with the SEC staff guidelines, which may permit the Fund to obtain leverage at attractive rates.
The
use of leverage magnifies the impact of changes in net asset value, which means that, all else being equal, the use of leverage results
in outperformance on the upside and underperformance on the downside. In addition, if the cost of leverage exceeds the return on the
securities acquired with the proceeds of leverage, the use of leverage will diminish rather than enhance the return to the Fund. The
use of leverage generally increases the volatility of returns to the Fund. Such volatility may increase the likelihood of the Fund having
to sell investments in order to meet its obligations to make distributions on the preferred stock or principal or interest payments on
debt securities, or to redeem preferred stock or repay debt, when it may be disadvantageous to do so. The Fund’s use of leverage
may require it to sell portfolio investments at inopportune times in order to raise cash to redeem preferred stock or otherwise de-leverage
so as to maintain required asset coverage amounts or comply with any mandatory redemption terms of any outstanding preferred stock.
In
the event the Fund had both outstanding preferred stock and senior securities representing debt at the same time, the Fund’s obligations
to pay dividends or distributions and, upon liquidation of the Fund, liquidation payments in respect of its preferred stock would be
subordinate to the Fund’s obligations to make any principal and/or interest payments due and owing with respect to its outstanding
senior debt securities. Accordingly, the Fund’s issuance of senior securities representing debt would have the effect of creating
special risks for the Fund’s preferred stockholders that would not be present in a capital structure that did not include such
securities.
Subject
to the requirements of Rule 18f-4 under the 1940 Act, the Fund may enter into derivative transactions, including transactions that
have economic leverage embedded in them. Rule 18f-4 defines “derivatives
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
transactions”
as (1) any swap, security-based swap, futures contract, forward contract, option, any combination of the foregoing, or any similar instrument,
under which a fund is or may be required to make any payment or delivery of cash or other assets during the life of the instrument or
at maturity or early termination, whether as margin or settlement payment or otherwise; and (2) any short sale borrowing. Derivatives
transactions entered into by the Fund in compliance with Rule 18f-4 will not be considered senior securities for purposes of computing
the asset coverage requirements described above. Economic leverage exists when the Fund achieves the right to a return on a capital base
that exceeds the investment which the Fund has contributed to the instrument achieving a return. Derivative transactions that the Fund
may enter into and the risks associated with them are described elsewhere in this Annual Report. The Fund cannot assure you that investments
in derivative transactions that have economic leverage embedded in them will result in a higher return on its common stock.
If
the Fund enters into any reverse repurchase agreements or similar financing transactions obligating the Fund to make future payments,
the Fund must either treat all such transactions as derivatives transactions for all purposes under Rule 18f-4 or otherwise comply
with the asset coverage requirements described above and combine the aggregate amount of indebtedness associated with all such transactions
with the aggregate amount of any other senior securities representing indebtedness when calculating the Fund’s asset coverage ratio
limit requirements. The asset coverage requirements under section 18 of the 1940 Act and the limits and conditions imposed by Rule 18f-4
may limit or restrict portfolio management or result in the Fund maintaining securities positions it would otherwise liquidate.
Investment
Restrictions. The Fund has adopted certain fundamental investments policies designed to limit investment risk and maintain portfolio
diversification. Fundamental policies may not be changed without the vote of a majority, as defined in the 1940 Act, of the outstanding
voting securities of the Fund (voting together as a single class subject to class approval rights of any preferred stock). The Fund may
become subject to rating agency guidelines that are more limiting than its current investment restrictions in order to obtain and maintain
a desired rating on its preferred stock, if any.
Portfolio
Turnover. The Fund will buy and sell securities to accomplish its investment objectives. The investment policies of the Fund
may lead to frequent changes in investments, particularly in periods of rapidly fluctuating interest or currency exchange rates.
Portfolio
turnover generally involves some expense to the Fund, including brokerage commissions or dealer mark-ups and other transaction costs
on the sale of securities and reinvestment in other securities. The portfolio turnover rate is computed by dividing the lesser of the
amount of the securities purchased or securities sold by the average monthly value of securities owned during the year (excluding securities
whose maturities at acquisition were one year or less). Higher portfolio turnover may decrease the after-tax return to individual investors
in the Fund to the extent it results in a decrease of the long-term capital gains portion of distributions to stockholders.
The
Fund anticipates that its annual portfolio turnover rate will generally not exceed 100%. For the fiscal years ended December 31,
2022 and December 31, 2023, the portfolio turnover rates of the Fund were 15% and 19%, respectively.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Further
information on the investment objectives and policies of the Fund is set forth in the SAI.
RISK
FACTORS AND SPECIAL CONSIDERATIONS
Investors
should consider the following risk factors and special considerations associated with investing in the Fund.
General
Risks
Market
Risk. The market price of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets.
The value of a security may decline due to general market conditions which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency
rates, adverse changes to credit markets or adverse investor sentiment generally. The value of a security may also decline due to factors
which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within
an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Equity
securities generally have greater price volatility than fixed income securities. Credit ratings downgrades may also negatively affect
securities held by the Fund. Even when markets perform well, there is no assurance that the investments held by the Fund will increase
in value along with the broader market.
In
addition, market risk includes the risk that geopolitical and other events will disrupt the economy on a national or global level. For
instance, war, terrorism, market manipulation, government defaults, government shutdowns, political changes or diplomatic developments,
public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental disasters can
all negatively impact the securities markets, which could cause the Fund to lose value. These events could reduce consumer demand or
economic output, result in market closures, travel restrictions or quarantines, and significantly adversely impact the economy. The current
contentious domestic political environment, as well as political and diplomatic events within the United States and abroad, such as the
U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, has in the past resulted, and may
in the future result, in a government shutdown, which could have an adverse impact on the Fund’s investments and operations. Additional
and/or prolonged U.S. federal government shutdowns may affect investor and consumer confidence and may adversely impact financial markets
and the broader economy, perhaps suddenly and to a significant degree. Governmental and quasi-governmental authorities and regulators
throughout the world have previously responded to serious economic disruptions with a variety of significant fiscal and monetary policy
changes, including, but not limited to, direct capital infusions into companies, new monetary programs and dramatically lower interest
rates. An unexpected or sudden reversal of these policies, or the ineffectiveness of these policies, could increase volatility in securities
markets, which could adversely affect the Fund’s investments. Any market disruptions could also prevent the Fund from executing
advantageous investment decisions in a timely manner. To the extent that the Fund focuses its investments in a region enduring geopolitical
market disruption, it will face higher risks of loss, although the increasing interconnectivity between global economies and financial
markets can lead to events or conditions in one country, region or financial market adversely impacting a different country, region or
financial
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
market.
Thus, investors should closely monitor current market conditions to determine whether the Fund meets their individual financial needs
and tolerance for risk.
Current
market conditions may pose heightened risks with respect to the Fund’s investment in fixed income securities. Central banks such
as the Federal Reserve Bank have been increasing interest rates, though this trend has tempered recently as the rate of inflation slows.
There is a risk that additional increases in interest rates or a prolonged period of rising interest rates may cause the economy to enter
a recession. Additional interest rate increases in the future could cause the value of the Fund to decrease. Recently, inflation levels
have been at their highest point in nearly 40 years and the Federal Reserve has been engaged in a campaign to raise certain benchmark
interest rates in an effort to combat inflation. As inflation increases, the real value of the Fund’s common stock and distributions
therefore may decline.
Exchanges
and securities markets may close early, close late or issue trading halts on specific securities or generally, which may result in, among
other things, the Fund being unable to buy or sell certain securities or financial instruments at an advantageous time or accurately
price its portfolio investments.
Interest
Rate Risk Generally. The primary risk associated with dividend-and interest-paying securities is interest rate risk. A decrease
in interest rates will generally result in an increase in the investment value of such securities, while increases in interest rates
will generally result in a decline in the investment value of such securities. This effect is generally more pronounced for fixed rate
securities than for securities whose income rate is periodically reset.
General
interest rate fluctuations may have a substantial negative impact on the Fund’s investments, the value of the Fund and the Fund’s
rate of return. A reduction in the interest or dividend rates on new investments relative to interest or dividend rates on current investments
could also have an adverse impact on the Fund’s net investment income. An increase in interest rates could decrease the value of
any investments held by the Fund that earn fixed interest or dividend rates, including debt securities, convertible securities, preferred
stocks, loans and high-yield bonds, and also could increase interest or dividend expenses, thereby decreasing net income.
The
magnitude of these fluctuations in the market price of bonds and other income- or dividend-paying securities is generally greater for
those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income
derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money
if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management. To the extent the Fund invests
in securities that may be prepaid at the option of the obligor, the sensitivity of such securities to changes in interest rates may increase
(to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate securities typically reset
only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some
fluctuations in the net asset value of the Fund to the extent that it invests in floating rate securities. These basic principles of
bond prices also apply to U.S. government securities. A security backed by the “full faith and credit” of the U.S. government
is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other income- or
dividend-paying securities, government-guaranteed securities will fluctuate in value when interest rates change.
The
Fund’s use of leverage will tend to increase the Fund’s interest rate risk. The Fund may invest in variable and floating
rate instruments, which generally are less sensitive to interest rate changes than longer duration
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
fixed
rate instruments but may decline in value in response to rising interest rates if, for example, the rates at which they pay interest
do not rise as much, or as quickly, as market interest rates in general. Conversely, variable and floating rate instruments generally
will not increase in value if interest rates decline. The Fund also may invest in inverse floating rate securities, which may decrease
in value if interest rates increase, and which also may exhibit greater price volatility than fixed rate obligations with similar credit
quality. To the extent the Fund holds variable or floating rate instruments, a decrease (or, in the case of inverse floating rate securities,
an increase) in market interest rates will adversely affect the income received from such securities, which may adversely affect the
net asset value of the Fund’s common stock.
Central
banks such as the Federal Reserve Bank have been increasing interest rates, though this trend has tempered recently as the rate of inflation
slows. There is a risk that heightened interest rates may cause the economy to enter a recession. Any such recession would negatively
impact the Fund and the investments held by the Fund. These impacts may include:
|
● |
severe
declines in the Fund’s net asset values; |
|
● |
inability
of the Fund to accurately or reliably value its portfolio; |
|
● |
inability
of the Fund to pay any dividends or distributions; |
|
● |
inability
of the Fund to maintain its status as a registered investment company (“RIC”) under the Internal Revenue Code of 1986,
as amended (the “Code”); |
|
● |
declines
in the value of the Fund’s investments; |
|
● |
increased
risk of default or bankruptcy by the companies in which the Fund invests; |
|
● |
increased
risk of companies in which the Fund invests being unable to weather an extended cessation of normal economic activity and thereby
impairing their ability to continue functioning as a going concern; and |
|
● |
limited
availability of new investment opportunities. |
Inflation
Risk. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation
decreases the value of money. This risk may be elevated compared to historical market conditions because of recent monetary policy measures
and the current interest rate environment. Inflation rates may change frequently and significantly as a result of various factors, including
unexpected shifts in the domestic or global economy and changes in economic policies, and the Fund’s investments may not keep pace
with inflation, which may result in losses to Fund stockholders. As inflation increases, the real value of the Fund’s shares and
dividends may decline. In addition, during any periods of rising inflation, interest rates of any debt securities held by the Fund would
likely increase, which would tend to further reduce returns to stockholders. This risk is greater for fixed-income instruments with longer
maturities.
Convertible
Securities Risk. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of
similar quality. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase
as interest rates decline. In the absence of adequate anti-dilution provisions in a convertible security, dilution in the value of the
Fund’s holding may occur in the event the underlying stock is subdivided, additional equity securities are issued for below market
value, a stock dividend is declared or the issuer enters into another type of corporate transaction that has a similar effect.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
The
value of a convertible security is influenced by the value of the underlying equity security. Convertible debt securities and preferred
stocks may depreciate in value if the market value of the underlying equity security declines or if rates of interest increase. In addition,
although debt securities are liabilities of a corporation which the corporation is generally obligated to repay at a specified time,
debt securities, particularly convertible debt securities, are often subordinated to the claims of some or all of the other creditors
of the corporation.
Mandatory
conversion securities (securities that automatically convert into equity securities at a future date) may limit the potential for capital
appreciation and, in some instances, are subject to complete loss of invested capital. Other innovative convertibles include “equity-linked”
securities, which are securities or derivatives that may have fixed, variable, or no interest payments prior to maturity, may convert
(at the option of the holder or on a mandatory basis) into cash or a combination of cash and common stock, and may be structured to limit
the potential for capital appreciation. Equity-linked securities may be illiquid and difficult to value and may be subject to greater
credit risk than that of other convertibles. Moreover, mandatory conversion securities and equity-linked securities have increased the
sensitivity of the convertible securities market to the volatility of the equity markets and to the special risks of those innovations,
which may include risks different from, and possibly greater than, those associated with traditional convertible securities.
Preferred
stocks are equity securities in the sense that they do not represent a liability of the corporation. In the event of liquidation of the
corporation, and after its creditors have been paid or provided for, holders of preferred stock are generally entitled to a preference
as to the assets of the corporation before any distribution may be made to the holders of common stock. Debt securities normally do not
have voting rights. Preferred stocks may have no voting rights or may have voting rights only under certain circumstances.
|
● |
Credit
Risk. Credit risk is the risk that an issuer will fail to pay interest or dividends and principal in a timely manner. Companies
that issue convertible securities may be small to medium-size, and they often have low credit ratings. In addition, the credit rating
of a company’s convertible securities is generally lower than that of its conventional debt securities. Convertible securities
are normally considered “junior” securities—that is, the company usually must pay interest on its conventional
debt before it can make payments on its convertible securities. Credit risk could be high for the Fund, because it could invest in
securities with low credit quality. The lower a debt security is rated, the greater its default risk. As a result, the Fund may incur
cost and delays in enforcing its rights against the issuer. |
|
● |
Market
Risk. Although convertible securities do derive part of their value from that of the securities into which they are convertible,
they are not considered derivative financial instruments. However, the Fund’s mandatory convertible securities include features
which render them more sensitive to price changes of their underlying securities. Thus they expose the Fund to greater downside risk
than traditional convertible securities, but generally less than that of the underlying common stock. |
|
● |
Interest
Rate Risk for Convertible Securities. The Fund may be subject to a greater risk of rising interest rates due to recent monetary
measures and the current interest rate environment. The Federal Reserve has been engaged in a campaign to increase certain benchmark
interest rates, and any additional increases in interest rates would be likely to drive down the prices of convertible securities
held by the Fund. Convertible securities are particularly sensitive to interest rate changes when their predetermined |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
|
|
conversion price is much higher than the
issuing company’s common stock. See “— General Risks—Interest Rate Risks Generally.” |
|
● |
Sector
Risk. Sector risk is the risk that returns from the economic sectors in which convertible securities are concentrated will trail
returns from other economic sectors. As a group, sectors tend to go through cycles of doing better-or-worse-than the convertible
securities market in general. These periods have, in the past, lasted for as long as several years. Moreover, the sectors that dominate
this market change over time. |
Equity
Risk. Investing in the Fund involves equity risk, which is the risk that the securities held by the Fund will fall in market
value due to adverse market and economic conditions, perceptions regarding the industries in which the issuers of securities held by
the Fund participate and the particular circumstances and performance of particular companies whose securities the Fund holds. An investment
in the Fund represents an indirect economic stake in the securities owned by the Fund, which are for the most part traded on securities
exchanges or in the OTC markets. The market value of these securities, like other market investments, may move up or down, sometimes
rapidly and unpredictably. The net asset value of the Fund may at any point in time be worth less than the amount at the time the stockholder
invested in the Fund, even after taking into account any reinvestment of distributions.
Common
Stock Risk. Common stock of an issuer in the Fund’s portfolio may decline in price for a variety of reasons, including
if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline
in its financial condition. Common stock in which the Fund invests is structurally subordinated as to income and residual value to preferred
stock, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore
will be subject to greater dividend risk than preferred stock or debt instruments of such issuers. In addition, while common stock has
historically generated higher average returns than fixed income securities, common stock has also experienced significantly more volatility
in those returns.
Preferred
Stock Risk. There are special risks associated with the Fund’s investing in preferred securities, including:
|
● |
Deferral.
Preferred securities may include provisions that permit the issuer, at its discretion, to defer dividends or distributions for
a stated period without any adverse consequences to the issuer. If the Fund owns a preferred security that is deferring its dividends
or distributions, the Fund may be required to report income for tax purposes although it has not yet received such income. |
|
● |
Non-Cumulative
Dividends. Some preferred securities are non-cumulative, meaning that the dividends do not accumulate and need not ever be paid.
A portion of the portfolio may include investments in non-cumulative preferred securities, whereby the issuer does not have an obligation
to make up any arrearages to its stockholders. Should an issuer of a non-cumulative preferred security held by the Fund determine
not to pay dividends or distributions on such security, the Fund’s return from that security may |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
|
|
be adversely affected. There is no assurance
that dividends or distributions on non-cumulative preferred securities in which the Fund invests will be declared or otherwise made
payable. |
|
● |
Subordination.
Preferred securities are subordinated to bonds and other debt instruments in an issuer’s capital structure in terms of
priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt
security instruments. |
|
● |
Liquidity.
Preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. government securities. |
|
● |
Limited
Voting Rights. Generally, preferred security holders (such as the Fund) have no voting rights with respect to the issuing company
unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may
be entitled to elect a number of directors to the issuer’s board. Generally, once all the arrearages have been paid, the preferred
security holders no longer have voting rights. |
|
● |
Special
Redemption Rights. In certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified
date. For instance, for certain types of preferred securities, a redemption may be triggered by a change in U.S. federal income tax
or securities laws. A redemption by the issuer may negatively impact the return of the security held by the Fund. |
Warrants
and Rights Risk. The Fund may invest in warrants and rights (including those acquired in units or attached to other securities)
which entitle the holder to buy equity securities at a specific price for or at the end of a specific period of time. The Fund will do
so only if the underlying equity securities are deemed appropriate by the Investment Adviser for inclusion in the Fund’s portfolio.
Investing
in rights and warrants can provide a greater potential for profit or loss than an equivalent investment in the underlying security, and
thus can be a riskier investment. The value of a right or warrant may decline because of a decline in the value of the underlying security,
the passage of time, changes in interest rates or in the dividend or other policies of the Fund whose equity underlies the warrant, a
change in the perception as to the future price of the underlying security, or any combination thereof. Rights and warrants generally
pay no dividends and confer no voting or other rights other than the right to purchase the underlying security.
Non-Investment
Grade Securities Risk. The prices of these lower grade securities are more sensitive to negative developments, such as a decline
in the issuer’s revenues or a general economic downturn, than are the prices of higher grade securities. Securities of below investment
grade quality—those securities rated below “Baa” by Moody’s or below “BBB” by S&P (or unrated
securities considered by the Investment Adviser to be of comparable quality)— are predominantly speculative with respect to the
issuer’s capacity to pay interest and repay principal when due and therefore involve a greater risk of default. Securities rated
below investment grade commonly are referred to as “junk bonds” or “high yield” securities and generally pay
a premium above the yields
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
of
U.S. government securities or securities of investment grade issuers because they are subject to greater risks than these securities.
These risks, which reflect their speculative character, include the following:
|
● |
greater
credit risk and risk of default; |
|
● |
potentially
greater sensitivity to general economic or industry conditions; |
|
● |
potential
lack of attractive resale opportunities (illiquidity); and |
|
● |
additional
expenses to seek recovery from issuers who default. |
In
addition, the prices of these non-investment grade securities are more sensitive to negative developments, such as a decline in the issuer’s
revenues or a general economic downturn, than are the prices of higher grade securities. Non-investment grade securities tend to be less
liquid than investment grade securities. The market value of non-investment grade securities may be more volatile than the market value
of investment grade securities and generally tends to reflect the market’s perception of the creditworthiness of the issuer and
short-term market developments to a greater extent than investment grade securities, which primarily reflect fluctuations in general
levels of interest rates.
Ratings
are relative and subjective and not absolute standards of quality. Securities ratings are based largely on the issuer’s historical
financial condition and the rating agencies’ analysis at the time of rating. Consequently, the rating assigned to any particular
security is not necessarily a reflection of the issuer’s current financial condition.
The
Fund may purchase securities of companies that are experiencing significant financial or business difficulties, including companies involved
in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant financial returns
to the Fund, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for
successful investments in issuers experiencing significant business and financial difficulties is unusually high. There can be no assurance
that the Fund will correctly evaluate the value of the assets collateralizing its investments or the prospects for a successful reorganization
or similar action. In any reorganization or liquidation proceeding relating to a portfolio investment, the Fund may lose all or part
of its investment or may be required to accept collateral with a value less than the amount of the Fund’s initial investment.
As
a part of its investments in non-investment grade securities, the Fund may invest in the securities of issuers in default. The Fund invests
in securities of issuers in default only when the Investment Adviser believes that such issuers will honor their obligations and emerge
from bankruptcy protection and that the value of such issuers’ securities will appreciate. By investing in the securities of issuers
in default, the Fund bears the risk that these issuers will not continue to honor their obligations or emerge from bankruptcy protection
or that the value of these securities will not otherwise appreciate.
In
addition to using statistical rating agencies and other sources, the Investment Adviser will also perform its own analysis of issuers
in seeking investments that it believes to be underrated (and thus higher yielding) in light of the financial condition of the issuer.
Its analysis of issuers may include, among other things, current and anticipated cash flow and borrowing requirements, value of assets
in relation to historical cost, strength of management, responsiveness to business conditions, credit standing and current anticipated
results of
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
operations.
In selecting investments for the Fund, the Investment Adviser may also consider general business conditions, anticipated changes in interest
rates and the outlook for specific industries.
Subsequent
to its purchase by the Fund, an issue of securities may cease to be rated or its rating may be reduced. In addition, it is possible that
statistical rating agencies might change their ratings of a particular issue to reflect subsequent events on a timely basis. Moreover,
such ratings do not assess the risk of a decline in market value. None of these events will require the sale of the securities by the
Fund, although the Investment Adviser will consider these events in determining whether the Fund should continue to hold the securities.
Income
securities, including non-investment grade securities and comparable unrated securities, frequently have call or buy-back features that
permit their issuers to call or repurchase the securities from their holders, such as the Fund. If an issuer exercises these rights during
periods of declining interest rates, the Fund may have to replace the security with a lower yielding security, thus resulting in a decreased
return for the Fund.
The
market for non-investment grade and comparable unrated securities has at various times, particularly during times of economic recession,
experienced substantial reductions in market value and liquidity. Past recessions have adversely affected the value of such securities
as well as the ability of certain issuers of such securities to repay principal and pay interest thereon or to refinance such securities.
The market for those securities could react in a similar fashion in the event of any future economic recession.
Short
Sales Risk. Short-selling involves selling securities which may or may not be owned and borrowing the same securities for delivery
to the purchaser, with an obligation to replace the borrowed securities at a later date. If the price of the security sold short increases
between the time of the short sale and the time the Fund replaces the borrowed security, the Fund will incur a loss; conversely, if the
price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss will be increased, by the transaction
costs incurred by the Fund, including the costs associated with providing collateral to the broker-dealer (usually cash and liquid securities).
Although the Fund’s gain is limited to the price at which it sold the security short, its potential loss is theoretically unlimited.
Short-selling
necessarily involves certain additional risks. However, if the short seller does not own the securities sold short (an uncovered short
sale), the borrowed securities must be replaced by securities purchased at market prices in order to close out the short position, and
any appreciation in the price of the borrowed securities would result in a loss. Uncovered short sales expose the Fund to the risk of
uncapped losses until a position can be closed out due to the lack of an upper limit on the price to which a security may rise. Purchasing
securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.
There is the risk that the securities borrowed by the Fund in connection with a short-sale must be returned to the securities lender
on short notice. If a request for return of borrowed securities occurs at a time when other short-sellers of the security are receiving
similar requests, a “short squeeze” can occur, and the Fund may be compelled to replace borrowed securities previously sold
short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds
received at the time the securities were originally sold short.
In
September 2008, in response to spreading turmoil in the financial markets, the SEC temporarily banned short selling in the stocks
of numerous financial services companies, and also promulgated new disclosure requirements with respect to short positions held by investment
managers. The SEC’s temporary ban on short
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
selling
of such stocks has since expired, but should similar restrictions and/or additional disclosure requirements be promulgated, especially
if market turmoil occurs, the Fund may be forced to cover short positions more quickly than otherwise intended and may suffer losses
as a result. Such restrictions may also adversely affect the ability of the Fund to execute its investment strategies generally. Similar
emergency orders were also instituted in non-U.S. markets in response to increased volatility. The Fund’s ability to engage in
short sales is also restricted by various regulatory requirements relating to short sales.
Industry
Concentration Risk. The Fund invests a significant portion of its assets in companies in the telecommunications, media, publishing,
and entertainment industries, also known as communication services companies, and, as a result, the value of the Fund’s shares
is more susceptible to factors affecting those particular types of companies and those industries, including governmental regulation,
a greater price volatility than the overall market, rapid obsolescence of products and services, intense competition, and strong market
reactions to technological developments. Fluctuating domestic and international demand, shifting demographics and often unpredictable
changes in consumer tastes can drastically affect a communication services company’s profitability. In addition, while all companies
may be susceptible to network security breaches, certain companies in the communication services sector may be particular targets of
hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect
on their businesses.
Various
types of ownership restrictions are imposed by the Federal Communications Commission, or FCC, on investment in media companies and cellular
licensees. For example, the FCC’s broadcast and cable multiple-ownership and cross ownership rules, which apply to the radio, television,
and cable industries, provide that investment advisers are deemed to have an “attributable” interest whenever the adviser
has the right to determine how five percent or more of the issued and outstanding voting stock of a broadcast company or cable system
operator may be voted. These rules limit the number of broadcast stations both locally and nationally that a single entity is permitted
to own, operate, or control and prohibit ownership of certain competitive communications providers in the same location. The FCC also
applies limited ownership restrictions on cellular licensees serving rural areas. An attributable interest in a cellular company arises
from the right to control 20% or more of its voting stock.
Attributable
interests that may result from the role of the Investment Adviser and its principals in connection with other funds, managed accounts
and companies may limit the Fund’s ability to invest in certain mass media and cellular companies. In the event that the Investment
Adviser and its affiliates may be deemed to have such an attributable interest, the Board of the Fund may delegate, from time to time,
to the Fund’s Proxy Voting Committee, voting power over certain shares of securities held by the Fund in view of these ownership
limitations to ensure compliance with certain FCC regulations.
The
costs of complying with governmental regulations, delays or failure to receive required regulatory approvals, or the enactment of new
regulatory requirements may negatively affect the business of communications companies. Government actions around the world, specifically
in the area of pre-marketing clearance of products and prices, can be arbitrary and unpredictable. The telecommunications, media, publishing,
and entertainment industries can also be significantly affected by intense competition for market share, including competition with alternative
technologies such as wireless communications, product compatibility and standardization, consumer preferences, rapid product obsolescence,
research and development of new products, lack of standardization or compatibility with existing technologies, and a dependency on patent
and copyright protections. Communication
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
services
companies may encounter distressed cash flows due to the need to commit substantial capital to meet increasing competition, particularly
in developing new products and services using new technology. Technological innovations may make the products and services of certain
communications companies obsolete.
Telecommunications
providers with exposure to the U.S. are generally required to obtain franchises or licenses in order to provide services in a given location.
Licensing and franchise rights in the telecommunications sector are limited, which may provide an advantage to certain participants.
Limited availability of such rights, high barriers to market entry and regulatory oversight, among other factors, have led to consolidation
of companies within the sector, which could lead to further regulation or other negative effects in the future. Telecommunication providers
investing in non-U.S. countries may be subject to similar risks. Additional risks include those related to competitive challenges in
the U.S. from non-U.S. competitors engaged in strategic joint ventures with U.S. companies and in non-U.S. markets from both U.S. and
non-U.S. competitors.
Companies
in the media and entertainment industries can be significantly affected by several factors, including competition, particularly in formulation
of products and services using new technologies, cyclicality of revenues and earnings, a potential decrease in the discretionary income
of targeted individuals, changing consumer tastes and interests, and the potential increase in government regulation. Companies in the
media and entertainment industries may become obsolete quickly. Advertising spending can be an important revenue source for media and
entertainment companies. During economic downturns advertising spending typically decreases and, as a result, media and entertainment
companies tend to generate less revenue.
Smaller
Companies Investment Risk. The Fund may invest in the securities of smaller, less seasoned companies. Smaller companies offer
investment opportunities and additional risks. They may not be well known to the investing public, may not be significantly owned by
institutional investors and may not have steady earnings growth. These companies may have limited product lines and markets, as well
as shorter operating histories, less experienced management and more limited financial resources than larger companies. In addition,
the securities of such companies may be more vulnerable to adverse general market or economic developments, more volatile in price, have
wider spreads between their bid and ask prices and have significantly lower trading volumes than the securities of larger capitalization
companies. As such, securities of these smaller companies may be less liquid than those of larger companies, and may experience greater
price fluctuations than larger companies. In addition, small-cap or mid-cap company securities may not be widely followed by investors,
which may result in reduced demand.
As
a result, the purchase or sale of more than a limited number of shares of the securities of a smaller company may affect its market price.
The Investment Adviser may need a considerable amount of time to purchase or sell its positions in these securities, particularly when
other Investment Adviser-managed accounts or other investors are also seeking to purchase or sell them.
The
securities of smaller capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price
changes than larger capitalization securities or the market as a whole. In addition, smaller capitalization securities may be particularly
sensitive to changes in interest rates, borrowing costs and earnings. Investing in smaller capitalization securities requires a longer-term
view.
Securities
of emerging companies may lack an active secondary market and may be subject to more abrupt or erratic price movements than securities
of larger, more established companies or stock market averages in
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
general.
Competitors of certain companies, which may or may not be in the same industry, may have substantially greater financial resources than
the companies in which the Fund may invest.
Market
Value and Net Asset Value. The Fund is a diversified, closed-end management investment company. Shares of closed-end funds are
bought and sold in the securities markets and may trade at either a premium to or discount from net asset value. Listed shares of closed-end
investment companies often trade at discounts from net asset value. This characteristic of shares of a closed-end fund is a risk separate
and distinct from the risk that its net asset value may decrease. The Fund cannot predict whether its listed stock will trade at, below,
or above net asset value. As of December 31, 2023, the shares of common stock traded at a premium of 51.60%. Stockholders desiring
liquidity may, subject to applicable securities laws, trade their Fund common stock on the NYSE or other markets on which such shares
may trade at the then-current market value, which may differ from the then-current net asset value. Stockholders will incur brokerage
or other transaction costs to sell stock.
Foreign
Securities Risk. Investments in the securities of foreign issuers involve certain considerations and risks not ordinarily associated
with investments in securities of domestic issuers and such securities may be more volatile than those of issuers located in the United
States. Foreign companies are not generally subject to uniform accounting, auditing and financial standards and requirements comparable
to those applicable to U.S. companies.
Foreign
securities exchanges, brokers and listed companies may be subject to less government supervision and regulation than exists in the United
States. Dividend and interest income may be subject to withholding and other foreign taxes, which may adversely affect the net return
on such investments. There may be difficulty in obtaining or enforcing a court judgment abroad. In addition, it may be difficult to effect
repatriation of capital invested in certain countries. In addition, with respect to certain countries, there are risks of expropriation,
confiscatory taxation, political or social instability or diplomatic developments that could affect assets of the Fund held in foreign
countries. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment applicable to
qualified dividend income. Moreover, certain equity investments in foreign issuers classified as passive foreign investment companies
may be subject to additional taxation risk.
There
may be less available information about a foreign company than a U.S. company, and foreign companies may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to or as uniform as those of U.S. companies. Foreign securities
markets may have substantially less volume than U.S. securities markets and some foreign company securities are less liquid and their
prices more volatile than securities of otherwise comparable U.S. companies. A portfolio of foreign securities may also be adversely
affected by fluctuations in the rates of exchange between the currencies of different nations and by exchange control regulations, and
there is generally less government supervision and regulation of exchanges, brokers, and issuers than there is in the U.S. The Fund might
have greater difficulty taking appropriate legal action in non-U.S. courts and there may be less developed bankruptcy laws. Foreign markets
also have different clearance and settlement procedures that could cause the Fund to encounter difficulties in purchasing and selling
securities on such markets and may result in the Fund missing attractive investment opportunities or experiencing loss. In addition,
a portfolio that includes foreign securities can expect to have a higher expense ratio because of the increased transaction costs on
non-U.S. securities markets and the increased costs of maintaining the custody of foreign securities.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Investments
in foreign securities will expose the Fund to the direct or indirect consequences of political, social or economic changes in the countries
that issue the securities or in which the issuers are located. Certain countries in which the Fund may invest have historically experienced,
and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and unemployment. Many of these countries are also characterized by political
uncertainty and instability. The cost of servicing external debt will generally be adversely affected by rising international interest
rates because many external debt obligations bear interest at rates which are adjusted based upon international interest rates.
The
Fund also may purchase ADRs or U.S. dollar-denominated securities of foreign issuers. ADRs are receipts issued by U.S. banks or trust
companies in respect of securities of foreign issuers held on deposit for use in the U.S. securities markets. While ADRs may not necessarily
be denominated in the same currency as the securities into which they may be converted, many of the risks associated with foreign securities
may also apply to ADRs. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered
depositary receipts, are under no obligation to distribute stockholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities.
The
following provides more detail on certain pronounced risks with foreign investing:
|
● |
Foreign
Currency Risk. The Fund may invest in companies whose securities are denominated or quoted in currencies other than U.S. dollars
or have significant operations or markets outside of the United States. In such instances, the Fund will be exposed to currency risk,
including the risk of fluctuations in the exchange rate between U.S. dollars (in which the Fund’s shares are denominated) and
such foreign currencies, the risk of currency devaluations and the risks of non-exchangeability and blockage. As non-U.S. securities
may be purchased with and payable in currencies of countries other than the U.S. dollar, the value of these assets measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates and exchange control regulations. Fluctuations in currency
rates may adversely affect the ability of the Investment Adviser to acquire such securities at advantageous prices and may also adversely
affect the performance of such assets. |
Certain
non-U.S. currencies, primarily in developing countries, have been devalued in the past and might face devaluation in the future. Currency
devaluations generally have a significant and adverse impact on the devaluing country’s economy in the short and intermediate term
and on the financial condition and results of companies’ operations in that country. Currency devaluations may also be accompanied
by significant declines in the values and liquidity of equity and debt securities of affected governmental and private sector entities
generally. To the extent that affected companies have obligations denominated in currencies other than the devalued currency, those companies
may also have difficulty in meeting those obligations under such circumstances, which in turn could have an adverse effect upon the value
of the Fund’s investments in such companies. There can be no assurance that current or future developments with respect to foreign
currency devaluations will not impair the Fund’s investment flexibility, its ability to achieve its investment objectives or the
value of certain of its foreign currency-denominated investments.
|
● |
Tax
Consequences of Foreign Investing. The Fund’s transactions in foreign currencies, foreign currency-denominated debt obligations
and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary
income or loss to the extent such income |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
|
|
or loss results from fluctuations in the
value of the foreign currency concerned. This treatment could increase or decrease the Fund’s ordinary income distributions
to you, and may cause some or all of the Fund’s previously distributed income to be classified as a return of capital. In certain
cases, the Fund may make an election to treat gain or loss attributable to certain investments as capital gain or loss. |
|
● |
EMU
and Redenomination Risk. As the European debt crisis progressed, the possibility of one or more Eurozone countries exiting the
European Monetary Union (“EMU”), or even the collapse of the Euro as a common currency, arose, creating significant
volatility at times in currency and financial markets generally. The effects of the collapse of the Euro, or of the exit of one
or more countries from the EMU, on the U.S. and global economy and securities markets are impossible to predict and any such events
could have a significant adverse impact on the value and risk profile of the Fund’s portfolio. Any partial or complete dissolution
of the EMU could have significant adverse effects on currency and financial markets, and on the values of the Fund’s portfolio
investments. If one or more EMU countries were to stop using the Euro as its primary currency, the Fund’s investments in such
countries may be redenominated into a different or newly adopted currency. As a result, the value of those investments could decline
significantly and unpredictably. In addition, securities or other investments that are redenominated may be subject to foreign currency
risk, liquidity risk and valuation risk to a greater extent than similar investments currently denominated in Euros. To the extent
a currency used for redenomination purposes is not specified in respect of certain EMU-related investments, or should the Euro cease
to be used entirely, the currency in which such investments are denominated may be unclear, making such investments particularly
difficult to value or dispose of. The Fund may incur additional expenses to the extent it is required to seek judicial or other clarification
of the denomination or value of such securities. |
|
● |
Emerging
Markets Risk. The considerations noted above in “Foreign Securities Risk” are generally intensified for investments
in emerging market countries. Emerging market countries typically have economic and political systems that are less fully developed,
and can be expected to be less stable than those of more developed countries. Investing in securities of companies in emerging markets
may entail special risks relating to potential political and economic instability and the risks of expropriation, nationalization,
confiscation or the imposition of restrictions on foreign investment, the lack of hedging instruments and restrictions on repatriation
of capital invested. Economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Emerging
securities markets are substantially smaller, less developed, less liquid and more volatile than the major securities markets. The
limited size of emerging securities markets and limited trading volume compared to the volume of trading in U.S. securities could
cause prices to be erratic for reasons apart from factors that affect the quality of the securities. For example, limited market
size may cause prices to be unduly influenced by traders who control large positions. Adverse publicity and investors’ perceptions,
whether or not based on fundamental analysis, may decrease the value and liquidity of portfolio securities, especially in these markets.
Other risks include high concentration of market capitalization and trading volume in a small number of issuers representing a limited
number of industries, as well as a high concentration of investors and financial intermediaries; overdependence on exports, including
gold and natural resources exports, making these economies vulnerable to changes in commodity prices; overburdened infrastructure
and obsolete or unseasoned financial systems; environmental problems; less developed legal systems; and less reliable securities
custodial services and settlement practices. Certain emerging markets may also face other significant |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
|
|
internal or external risks, including the
risk of war and civil unrest. For all of these reasons, investments in emerging markets may be considered speculative. |
|
● |
Eurozone
Risk. A number of countries in the EU have experienced, and may continue to experience, severe economic and financial difficulties.
In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments
in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. As a result, financial markets in the EU have
been subject to increased volatility and declines in asset values and liquidity. Responses to these financial problems by European
governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and
may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments
and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Greece, Ireland, and Portugal have already received one or more “bailouts” from other Eurozone member states, and it
is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future.
One or more other countries may also abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching. |
|
● |
Brexit
Risk. On January 31, 2020, the United Kingdom officially withdrew from the EU, commonly referred to as “Brexit.”
Following a transition period, the United Kingdom and the EU signed a Trade and Cooperation Agreement (“UK/EU Trade Agreement”),
which came into full force on May 1, 2021 and set out the foundation of the economic and legal framework for trade between the
United Kingdom and the EU. As the UK/EU Trade Agreement is a new legal framework, the implementation of the UK/EU Trade Agreement
may result in uncertainty in its application and periods of volatility in both the United Kingdom and wider European markets. The
United Kingdom’s exit from the EU is expected to result in additional trade costs and disruptions in this trading relationship.
Furthermore, there is the possibility that either party may impose tariffs on trade in the future in the event that regulatory standards
between the EU and the UK diverge. The terms of the future relationship may cause continued uncertainty in the global financial markets,
and adversely affect our ability, and the ability of our portfolio companies, to execute our respective strategies and to receive
attractive returns. |
In
particular, currency volatility may mean that our returns and the returns of our portfolio companies will be adversely affected by market
movements and may make it more difficult, or more expensive, for us to implement appropriate currency hedging. Potential declines in
the value of the British Pound and/or the euro against other currencies, along with the potential downgrading of the United Kingdom’s
sovereign credit rating, may also have an impact on the performance of any of our portfolio companies located in the United Kingdom or
Europe.
In
addition, certain European countries have experienced negative interest rates on certain fixed-income instruments. A negative interest
rate policy is an unconventional central bank monetary policy tool where nominal target interest rates are set with a negative value
(i.e., below zero percent) intended to help create self-sustaining growth in the local economy. Negative interest rates may result in
heightened market volatility and may detract from the Fund’s performance to the extent the Fund is exposed to such interest rates.
Among other things, these developments adversely affected the value and exchange rate of the euro and pound sterling, and
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
any
similar developments may continue to significantly affect the economies of all EU countries, which in turn may have a material adverse
effect on the Fund’s investments in such countries, other countries that depend on EU countries for significant amounts of trade
or investment, or issuers with exposure to debt issued by certain EU countries.
To
the extent the Fund has exposure to European markets or to transactions tied to the value of the euro, these events could negatively
affect the value and liquidity of the Fund’s investments. All of these developments may continue to significantly affect the economies
of all EU countries, which in turn may have a material adverse effect on the Fund’s investments in such countries, other countries
that depend on EU countries for significant amounts of trade or investment, or issuers with exposure to debt issued by certain EU countries.
In
addition, certain European countries have recently experienced negative interest rates on certain fixed-income instruments. A negative
interest rate policy is an unconventional central bank monetary policy tool where nominal target interest rates are set with a negative
value (i.e., below zero percent) intended to help create self-sustaining growth in the local economy. Negative interest rates may result
in heightened market volatility and may detract from the Fund’s performance to the extent the Fund is exposed to such interest
rates. Among other things, these developments have adversely affected the value and exchange rate of the euro and pound sterling, and
any similar developments may continue to significantly affect the economies of all EU countries, which in turn may have a material adverse
effect on the Fund’s investments in such countries, other countries that depend on EU countries for significant amounts of trade
or investment, or issuers with exposure to debt issued by certain EU countries.
To
the extent the Fund has exposure to European markets or to transactions tied to the value of the euro, these events could negatively
affect the value and liquidity of the Fund’s investments. All of these developments may continue to significantly affect the economies
of all EU countries, which in turn may have a material adverse effect on the Fund’s investments in such countries, other countries
that depend on EU countries for significant amounts of trade or investment, or issuers with exposure to debt issued by certain EU countries.
Special
Risks Related to Investment in Derivative Transactions. The Fund may participate in certain derivative transactions, as described
herein. Such transactions entail certain execution, market, liquidity, counterparty, correlation, volatility, hedging and tax risks.
Participation in the options or futures markets, in currency exchange transactions and in other derivatives transactions involves investment
risks and transaction costs to which the Fund would not be subject absent the use of these strategies. If the Investment Adviser’s
prediction of movements in the direction of the securities, foreign currency, interest rate or other referenced instruments or markets
is inaccurate, the consequences to the Fund may leave the Fund in a worse position
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
than
if it had not used such strategies. Risks inherent in the use of options, swaps, foreign currency, futures contracts and options on futures
contracts, securities indices and foreign currencies include:
|
● |
dependence
on the Investment Adviser’s ability to predict correctly movements in the direction of the relevant measure; |
|
● |
imperfect
correlation between the price of the derivative instrument and movements in the prices of the referenced assets; |
|
● |
the
fact that skills needed to use these strategies are different from those needed to select portfolio securities; |
|
● |
the
possible absence of a liquid secondary market for any particular instrument at any time; |
|
● |
the
possible need to defer closing out certain hedged positions to avoid adverse tax consequences; |
|
● |
the
possible inability of the Fund to purchase or sell a security or instrument at a time that otherwise would be favorable for it to
do so, or the possible need for the Fund to sell a security or instrument at a disadvantageous time due to a need for the Fund to
remain in compliance with the 1940 Act restrictions regarding derivatives transactions; and |
|
● |
the
creditworthiness of counterparties. |
Options,
futures contracts, swaps contracts, and options thereon and forward contracts on securities and currencies may be traded on foreign exchanges.
Such transactions may not be regulated as effectively as similar transactions in the United States, may not involve a clearing mechanism
and related guarantees, and are subject to the risk of governmental actions affecting trading in, or the prices of, foreign securities.
The value of such positions also could be adversely affected by (i) other complex foreign political, legal and economic factors, (ii)
lesser availability than in the United States of data on which to make trading decisions, (iii) delays in the ability of the Fund to
act upon economic events occurring in the foreign markets during non-business hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements than in the United States, and (v) less trading volume. Exchanges
on which options, futures, swaps and options on futures or swaps are traded may impose limits on the positions that the Fund may take
in certain circumstances.
Many
OTC derivatives are valued on the basis of dealers’ pricing of these instruments. However, the price at which dealers value a particular
derivative and the price which the same dealers would actually be willing to pay for such derivative should the Fund wish or be forced
to sell such position may be materially different. Such differences can result in an overstatement of the Fund’s net asset value
and may materially adversely affect the Fund in situations in which the Fund is required to sell derivative instruments. Exchange-traded
derivatives and OTC derivative transactions submitted for clearing through a central counterparty have become subject to minimum initial
and variation margin requirements set by the relevant clearinghouse, as well as possible margin requirements mandated by the SEC or the
CFTC. These regulators also have broad discretion to impose margin requirements on non-cleared OTC derivatives. These margin requirements
will increase the overall costs for the Fund.
While
hedging can reduce or eliminate losses, it can also reduce or eliminate gains. Hedges are sometimes subject to imperfect matching between
the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective.
Derivatives may give rise to a form of leverage and may
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
expose
the Fund to greater risk and increase its costs. Future CFTC or SEC rulemakings could potentially further limit or completely restrict
the Fund’s ability to use these instruments as a part of the Fund’s investment strategy, increase the costs of using these
instruments or make them less effective. Limits or restrictions applicable to the counterparties with which the Fund engages in derivative
transactions could also prevent the Fund from using these instruments or affect the pricing or other factors relating to these instruments
or may change the availability of certain investments. New regulation may make derivatives more costly, may limit the availability of
derivatives, or may otherwise adversely affect the value or performance of derivatives.
Securities
of Investment Companies Risk. To the extent permitted by law, the Fund may invest in investment company securities, including
preferred stock and the common equity of such companies. Investments in the common equity of investment companies will cause the Fund
to bear a ratable share of any such investment company’s expenses, including management fees. The Fund will also remain obligated
to pay management fees to the Investment Adviser with respect to the assets invested in any securities of another investment company.
In these circumstances, holders of the Fund’s common stock will be subject to duplicative investment expenses.
Long-Term
Objective; Not a Complete Investment Program Risk. The Fund is intended for investors seeking long-term capital growth. The Fund
is not meant to provide a vehicle for those who wish to exploit short-term swings in the stock market. An investment in shares of the
Fund should not be considered a complete investment program. Each stockholder should take into account the Fund’s investment objectives
as well as the stockholder’s other investments when considering an investment in the Fund.
Management
Risk. The Fund is subject to management risk because it is an actively managed portfolio. The Investment Adviser will apply investment
techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired
results.
Dependence
on Key Personnel Risk. The Investment Adviser is dependent upon the expertise of Mr. Mario J. Gabelli in providing advisory
services with respect to the Fund’s investments. If the Investment Adviser were to lose the services of Mr. Gabelli, its ability
to service the Fund could be adversely affected. There can be no assurance that a suitable replacement could be found for Mr. Gabelli
in the event of his death, resignation, retirement or inability to act on behalf of the Investment Adviser.
Market
Disruption and Geopolitical Risk. General economic and market conditions, such as interest rates, availability of credit, inflation
rates, economic uncertainty, supply chain disruptions, labor shortages, energy and other resource shortages, changes in laws, trade barriers,
currency exchange controls and national and international political circumstances (including governmental responses to public health
crises or the spread of infectious diseases), may have long-term negative effects on the U.S. and worldwide financial markets and economy.
These conditions have resulted in, and in many cases continue to result in, greater price volatility, less liquidity, widening credit
spreads and a lack of price transparency, with many securities remaining illiquid and of uncertain value. Such market conditions may
adversely affect the Company, including by making valuation of some of the Fund’s securities uncertain and/or result in sudden
and significant valuation increases or declines in the Fund’s holdings.
Risks
resulting from any future debt or other economic crisis could also have a detrimental impact on the global economy, the financial condition
of financial institutions and the Fund’s business, financial condition and results of operation. Market and economic disruptions
have affected, and may in the future affect, consumer confidence
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
levels
and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. To the
extent uncertainty regarding the U.S. or global economy negatively impacts consumer confidence and consumer credit factors, the Fund
could be significantly and adversely affected. Downgrades to the credit ratings of major banks could result in increased borrowing costs
for such banks and negatively affect the broader economy. Moreover, Federal Reserve policy, including with respect to certain interest
rates, may also adversely affect the value, volatility and liquidity of dividend- and interest-paying securities. Market volatility,
rising interest rates and/or a return to unfavorable economic conditions could impair the Fund’s ability to achieve its investment
objectives.
The
occurrence of events similar to those in recent years, such as localized wars, instability, new and ongoing pandemics, epidemics or outbreaks
of infectious diseases in certain parts of the world, and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes
and global health epidemics, terrorist attacks in the U.S. and around the world, social and political discord, debt crises sovereign
debt downgrades, increasingly strained relations between the U.S. and a number of foreign countries, new and continued political unrest
in various countries, the exit or potential exit of one or more countries from the EU or the EMU, continued changes in the balance of
political power among and within the branches of the U.S. government, government shutdowns, among others, may result in market volatility,
may have long-term effects on the U.S. and worldwide financial markets, and may cause further economic uncertainties in the U.S. and
worldwide.
In
particular, the consequences of the Russian military invasion of Ukraine, the impact on inflation and increased disruption to supply
chains and energy resources may impact the Fund’s portfolio companies, result in an economic downturn or recession either globally
or locally in the U.S. or other economies, reduce business activity, spawn additional conflicts (whether in the form of traditional military
action, reignited “cold” wars or in the form of virtual warfare such as cyberattacks) with similar and perhaps wider ranging
impacts and consequences and have an adverse impact on the Fund’s returns and net asset values. In response to the conflict between
Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia, Russian-backed separatist
regions in Ukraine, and certain banks, companies, government officials and other individuals in Russia and Belarus. Any of the above
factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect
on the Fund. The Fund has no way to predict the duration or outcome of the situation, as the conflict and government reactions are rapidly
developing and beyond the Fund’s control. Prolonged unrest, military activities, or broad-based sanctions could have a material
adverse effect on companies in which the Fund invests. Such consequences also may increase such companies’ funding costs or limit
their access to the capital markets.
The
current political climate has intensified concerns about a potential trade war between China and the U.S., as each country has imposed
tariffs on the other country’s products. These actions may trigger a significant reduction in international trade, the oversupply
of certain manufactured goods, substantial price reductions of goods and possible failure of individual companies and/or large segments
of China’s export industry, which could have a negative impact the Fund’s performance. U.S. companies that source material
and goods from China and those that make large amounts of sales in China would be particularly vulnerable to an escalation of trade tensions.
Uncertainty regarding the outcome of the trade tensions and the potential for a trade war could cause the U.S. dollar to decline against
safe haven currencies, such as the Japanese yen and the euro. Events such as these and their consequences are difficult to predict and
it is unclear whether further tariffs may
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
be
imposed or other escalating actions may be taken in the future. Any of these effects could have a material adverse effect on the Fund.
Periods
of volatility still remain, and risks to a robust resumption of growth persist. Federal Reserve policy, including with respect to certain
interest rates, may adversely affect the value, volatility and liquidity of dividend and interest paying securities. Market volatility,
dramatic changes to interest rates and/or a return to unfavorable economic conditions may lower the Fund’s performance or impair
the Fund’s ability to achieve its investment objective.
Economic
Events and Market Risk. Periods of market volatility remain, and may continue to occur in the future, in response to various
political, social and economic events both within and outside of the United States. These conditions have resulted in, and in many cases
continue to result in, greater price volatility, less liquidity, widening credit spreads and a lack of price transparency, with many
securities remaining illiquid and of uncertain value. Such market conditions may adversely affect the Fund, including by making valuation
of some of the Fund’s securities uncertain and/or result in sudden and significant valuation increases or declines in the Fund’s
holdings. If there is a significant decline in the value of the Fund’s portfolio, this may impact the asset coverage levels for
the Fund’s outstanding leverage.
Risks
resulting from any future debt or other economic crisis could also have a detrimental impact on the global economic recovery, the financial
condition of financial institutions and our business, financial condition and results of operation. Market and economic disruptions have
affected, and may in the future affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and
default on consumer debt and home prices, among other factors. To the extent uncertainty regarding the U.S. or global economy negatively
impacts consumer confidence and consumer credit factors, our business, financial condition and results of operations could be significantly
and adversely affected. Downgrades to the credit ratings of major banks could result in increased borrowing costs for such banks and
negatively affect the broader economy. Moreover, Federal Reserve policy, including with respect to certain interest rates, may also adversely
affect the value, volatility and liquidity of dividend- and interest-paying securities. Market volatility, rising interest rates and/or
a return to unfavorable economic conditions could impair the Fund’s ability to achieve its investment objectives.
Regulation
and Government Intervention Risk. Changes enacted by the current presidential administration could significantly impact the regulation
of financial markets in the U.S. Areas subject to potential change, amendment or repeal include trade and foreign policy, corporate tax
rates, energy and infrastructure policies, the environment and sustainability, criminal and social justice initiatives, immigration,
healthcare and the oversight of certain federal financial regulatory agencies and the Federal Reserve. Certain of these changes can,
and have, been effectuated through executive order. For example, the current administration has taken steps to rejoin the Paris climate
accord of 2015 and incentivize certain clean energy technologies, cancel the Keystone XL pipeline, provide military support to Ukraine
and change immigration enforcement priorities. Other potential changes that could be pursued by the current presidential administration
could include an increase in the corporate income tax rate; changes to regulatory enforcement priorities; and spending on clean energy
and infrastructure. It is not possible to predict which, if any, of these actions will be taken or, if taken, their effect on the economy,
securities markets or the financial stability of the U.S. The Fund may be affected by governmental
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
action
in ways that are not foreseeable, and there is a possibility that such actions could have a significant adverse effect on the Fund and
the Fund’s ability to achieve its investment objectives.
Additional
risks arising from the differences in expressed policy preferences among the various constituencies in the branches of the U.S. government
has led in the past, and may lead in the future, to short-term or prolonged policy impasses, which could, and has, resulted in shutdowns
of the U.S. federal government. U.S. federal government shutdowns, especially prolonged shutdowns, could have a significant adverse impact
on the economy in general and could impair the ability of issuers to raise capital in the securities markets. Any of these effects could
have a material adverse effect on the Fund’s net asset value.
In
addition, the rules dealing with the U.S. federal income taxation are constantly under review by persons involved in the legislative
process and by the IRS and the U.S. Treasury Department. The Tax Cuts and Jobs Act made substantial changes to the Code. Among those
changes were a significant permanent reduction in the generally applicable corporate tax rate, changes in the taxation of individuals
and other non-corporate taxpayers that generally but not universally reduce their taxes on a temporary basis subject to “sunset”
provisions, the elimination or modification of various previously allowed deductions (including substantial limitations on the deductibility
of interest and, in the case of individuals, the deduction for personal state and local taxes), certain additional limitations on the
deduction of net operating losses, certain preferential rates of taxation on certain dividends and certain business income derived by
non-corporate taxpayers in comparison to other ordinary income recognized by such taxpayers, and significant changes to the international
tax rules. In addition, on August 16, 2022, the Biden administration signed into law the Inflation Reduction Act, which modifies
key aspects of the Code, including by creating an alternative minimum tax on certain corporations and an excise tax on stock repurchases
by certain corporations. The effect of these and other changes is uncertain, both in terms of the direct effect on the taxation of an
investment in the Fund’s shares and their indirect effect on the value of the Fund’s assets, Fund shares or market conditions
generally.
In
addition, the U.S. government has proposed and adopted multiple regulations that could have a long-lasting impact on the Fund and on
the closed-end fund industry in general. The SEC’s final rules and amendments that modernize reporting and disclosure, along with
other potential upcoming regulations, could, among other things, restrict the Fund’s ability to engage in transactions, and/or
increase overall expenses of the Fund.
The
Fund may be affected by governmental action in ways that are not foreseeable, and there is a possibility that such actions could have
a significant adverse effect on the Fund and its ability to achieve its investment objective(s).
LIBOR
Risk. The Fund may be exposed to financial instruments that are tied to the London Interbank Offered Rate (“LIBOR”)
to determine payment obligations, financing terms, hedging strategies or investment value. The Fund’s investments may pay interest
at floating rates based on LIBOR or may be subject to interest caps or floors based on LIBOR. The Fund may also obtain financing at floating
rates based on LIBOR. Derivative instruments utilized by the Fund may also reference LIBOR.
In
July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the
end of 2021. LIBOR can no longer be used to calculate new deals as of December 31, 2021. Since December 31, 2021, all sterling,
euro, Swiss franc and Japanese yen LIBOR settings and the 1-week and 2-month U.S. dollar LIBOR settings have ceased to be published or
are no longer representative.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Overnight
and 12-month US dollar LIBOR settings permanently ceased as of June 30, 2023. 1-, 3-, and 6-month U.S. dollar LIBOR settings will
continue to be published using a synthetic methodology until September 2024. Various financial industry groups have begun planning
for the transition away from LIBOR, but there are challenges to converting certain securities and transactions to a new reference rate.
Neither the effect of the LIBOR transition process nor its ultimate success can yet be known.
As
an alternative to LIBOR, the Financial Reporting Council, in conjunction with the Alternative Reference Rates Committee, a steering committee
comprised of large U.S. financial institutions, recommended replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”),
a new index calculated by reference to short-term repurchase agreements, backed by Treasury securities. Abandonment of, or modifications
to, LIBOR could have adverse impacts on newly issued financial instruments and any of our existing financial instruments which reference
LIBOR. Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark rate that may be established, there
are many uncertainties regarding a transition from LIBOR, including, but not limited to, the need to amend all contracts with LIBOR as
the referenced rate and how this will impact the cost of variable rate debt and certain derivative financial instruments. In addition,
SOFR or other replacement rates may fail to gain market acceptance. Any failure of SOFR or alternative reference rates to gain market
acceptance could adversely affect the return on, value of and market for securities linked to such rates.
Neither
the effect of the LIBOR transition process nor its ultimate success can yet be known. The transition process might lead to increased
volatility and illiquidity in markets for, and reduce the effectiveness of, new hedges placed against instruments whose terms currently
include LIBOR. While some existing LIBOR-based instruments may contemplate a scenario where LIBOR is no longer available by providing
for an alternative rate-setting methodology, there may be significant uncertainty regarding the effectiveness of any such alternative
methodologies to replicate LIBOR. Not all existing LIBOR-based instruments may have alternative rate-setting provisions and there remains
uncertainty regarding the willingness and ability of issuers to add alternative rate-setting provisions in certain existing instruments.
Moreover, these alternative rate-setting provisions may not be designed for regular use in an environment where LIBOR ceases to be published,
and may be an ineffective fallback following the discontinuation of LIBOR.
On
March 15, 2022, President Biden signed into law the Consolidated Appropriations Act of 2022, which among other things, provides
for the use of interest rates based on SOFR in certain contracts currently based on LIBOR and a safe harbor from liability for utilizing
SOFR-based interest rates as a replacement for LIBOR. The elimination of LIBOR could have an adverse impact on the market value of and/or
transferability of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us or
on our overall financial condition or results of operations.
Legal,
Tax and Regulatory Risks. Legal, tax and regulatory changes could occur that may have material adverse effects on the Fund or
its stockholders. For example, the regulatory and tax environment for derivative instruments in which the Fund may participate is evolving,
and such changes in the regulation or taxation of derivative instruments may have material adverse effects on the value of derivative
instruments held by the Fund and the ability of the Fund to pursue its investment strategies. Similarly, the Biden administration has
indicated that it intends to modify key aspects of the Code, including by increasing corporate and individual tax rates. Changes to the
U.S. federal tax laws and interpretations thereof could adversely affect an investment in the Fund.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
We
cannot assure you what percentage of the distributions paid on the Fund’s shares, if any, will consist of tax-advantaged qualified
dividend income or long-term capital gains or what the tax rates on various types of income will be in future years.
To
qualify for the favorable U.S. federal income tax treatment generally accorded to RICs, the Fund must, among other things, meet certain
asset diversification tests, derive in each taxable year at least 90% of its gross income from certain prescribed sources and distribute
for each taxable year at least 90% of its “investment company taxable income.” Statutory limitations on distributions on
the common stock if the Fund fails to satisfy the 1940 Act’s asset coverage requirements could jeopardize the Fund’s ability
to meet such distribution requirements. While the Fund presently intends to purchase or redeem notes or preferred stock, if any, to the
extent necessary in order to maintain compliance with such asset coverage requirements, there can be no assurance that such actions can
be effected in time to meet the Code requirements. If for any taxable year the Fund does not qualify as a RIC, all of its taxable income
for that year (including its net capital gain) would be subject to tax at regular corporate rates without any deduction for distributions
to stockholders, and such distributions would be taxable as ordinary dividends to the extent of the Fund’s current and accumulated
earnings and profits. The resulting corporate taxes would materially reduce the Fund’s net assets and the amount of cash available
for distribution to stockholders.
1940
Act Regulation. The Fund is a registered closed-end investment company and as such is subject to regulations under the 1940 Act.
Generally speaking, any contract or provision thereof that is made, or where performance involves a violation of the 1940 Act or any
rule or regulation thereunder is unenforceable by either party unless a court finds otherwise.
Legislation
Risk. At any time after the date of this Annual Report, legislation may be enacted that could negatively affect the assets of
the Fund. Legislation or regulation may change the way in which the Fund itself is regulated. The Investment Adviser cannot predict the
effects of any new governmental regulation that may be implemented and there can be no assurance that any new governmental regulation
will not adversely affect the Fund’s ability to achieve its investment objectives.
Reliance
on Service Providers Risk. The Fund must rely upon the performance of service providers to perform certain functions, which may
include functions that are integral to the Fund’s operations and financial performance. Failure by any service provider to carry
out its obligations to the Fund in accordance with the terms of its appointment, to exercise due care and skill or to perform its obligations
to the Fund at all as a result of insolvency, bankruptcy or other causes could have a material adverse effect on the Fund’s performance
and returns to stockholders. The termination of the Fund’s relationship with any service provider, or any delay in appointing a
replacement for such service provider, could materially disrupt the business of the Fund and could have a material adverse effect on
the Fund’s performance and returns to stockholders.
Loans
of Portfolio Securities Risk. Consistent with applicable regulatory requirements and the Fund’s investment restrictions,
the Fund may lend its portfolio securities to securities broker-dealers or financial institutions, provided that such loans are callable
at any time by the Fund (subject to certain notice provisions), and are at all times collateralized in accordance with applicable regulatory
requirements. The advantage of such loans is that the Fund continues to receive the income on the loaned securities while at the same
time earning interest on the cash amounts deposited as collateral, which will be invested in short-term obligations. The Fund
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
will
not lend its portfolio securities if such loans are not permitted by the laws or regulations of any state in which its shares are qualified
for sale.
Cybersecurity
Risk. The Fund and its service providers are susceptible to cyber security risks that include, among other things, theft, unauthorized
monitoring, release, misuse, loss, destruction or corruption of confidential and highly restricted data; denial of service attacks; unauthorized
access to relevant systems, compromises to networks or devices that the Fund and its service providers use to service the Fund’s
operations; or operational disruption or failures in the physical infrastructure or operating systems that support the Fund and its service
providers. Cyber attacks are becoming increasingly common and more sophisticated, and may be perpetrated by computer hackers, cyber-terrorists
or others engaged in corporate espionage. Cyber attacks against or security breakdowns of the Fund or its service providers may adversely
impact the Fund and its stockholders, potentially resulting in, among other things, financial losses; the inability of Fund stockholders
to transact business and the Fund to process transactions; inability to calculate the Fund’s net asset value; violations of applicable
privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs; and/ or additional
compliance costs. The Fund may incur additional costs for cyber security risk management and remediation purposes. In addition, cyber
security risks may also impact issuers of securities in which the Fund invests, which may cause the Fund’s investment in such issuers
to lose value. There have been a number of recent highly publicized cases of companies reporting the unauthorized disclosure of client
or customer information, as well as cyberattacks involving the dissemination, theft and destruction of corporate information or other
assets, as a result of failure to follow procedures by employees or contractors or as a result of actions by third parties, including
actions by terrorist organizations and hostile foreign governments. Although service providers typically have policies and procedures,
business continuity plans and/or risk management systems intended to identify and mitigate cyber incidents, there are inherent limitations
in such plans and systems including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control
the cyber security policies, plans and systems put in place by its service providers or any other third parties whose operations may
affect the Fund or its stockholders. There can be no assurance that the Fund or its service providers will not suffer losses relating
to cyber attacks or other information security breaches in the future.
Because
technology is consistently changing, new ways to carry out cyber attacks are always developing. Therefore, there is a chance that some
risks have not been identified or prepared for, or that an attack may not be detected, which puts limitations on the Fund’s ability
to plan for or respond to a cyber attack. In addition to deliberate cyber attacks, unintentional cyber incidents can occur, such as the
inadvertent release of confidential information by the Fund or its service providers. Like other funds and business enterprises, the
Fund and its service providers are subject to the risk of cyber incidents occurring from time to time.
Misconduct
of Employees and of Service Providers Risk. Misconduct or misrepresentations by employees of the Investment Adviser or the Fund’s
service providers could cause significant losses to the Fund. Employee misconduct may include binding the Fund to transactions that exceed
authorized limits or present unacceptable risks and unauthorized trading activities, concealing unsuccessful trading activities (which,
in any case, may result in unknown and unmanaged risks or losses) or making misrepresentations regarding any of the foregoing. Losses
could also result from actions by the Fund’s service providers, including, without limitation, failing to recognize trades and
misappropriating assets. In addition, employees and service providers may improperly use or disclose confidential information, which
could result in litigation or serious financial harm, including limiting
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
the
Fund’s business prospects or future marketing activities. Despite the Investment Adviser’s due diligence efforts, misconduct
and intentional misrepresentations may be undetected or not fully comprehended, thereby potentially undermining the Investment Adviser’s
due diligence efforts. As a result, no assurances can be given that the due diligence performed by the Investment Adviser will identify
or prevent any such misconduct.
Anti-Takeover
Provisions. The Fund’s Governing Documents include provisions that could limit the ability of other entities or persons
to acquire control of the Fund or convert the Fund to an open-end fund.
Special
Risks to Holders of Common Stock
Dilution
Risk. If the Fund determines to conduct a rights offering to subscribe for common stock, holders of common stock may experience
dilution or accretion of the aggregate net asset value of their common stock. Such dilution or accretion will depend upon whether (i)
such stockholders participate in the rights offering and (ii) the Fund’s net asset value per common share is above or below the
subscription price on the expiration date of the rights offering.
Stockholders
who do not exercise their subscription rights may, at the completion of such an offering, own a smaller proportional interest in the
Fund than if they exercised their subscription rights. As a result of such an offering, a stockholder may experience dilution in net
asset value per share if the subscription price per share is below the net asset value per share on the expiration date. If the subscription
price per share is below the net asset value per share of the Fund’s shares on the expiration date, a stockholder will experience
an immediate dilution of the aggregate net asset value of such stockholder’s shares if the stockholder does not participate in
such an offering and the stockholder will experience a reduction in the net asset value per share of such stockholder’s shares
whether or not the stockholder participates in such an offering. The Fund cannot state precisely the extent of this dilution (if any)
if the stockholder does not exercise such stockholder’s subscription rights because the Fund does not know what the net asset value
per share will be when the offer expires or what proportion of the subscription rights will be exercised.
Leverage
Risk. The Fund uses financial leverage for investment purposes by issuing preferred stock. The amount of leverage represents
approximately 43% of the Fund’s Managed Assets (defined as the aggregate net asset value of outstanding shares of common stock
plus assets attributable to outstanding shares of preferred stock, with no deduction for the liquidation preference of such shares of
preferred stock) as of December 31, 2023.
The
Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having a similar investment objective
and policies. These include the possibility of greater loss and the likelihood of higher volatility of the net asset value of the Fund
and the asset coverage for the preferred stock. Such volatility may increase the likelihood of the Fund having to sell investments in
order to meet its obligations to make distributions on the preferred stock or principal or interest payments on debt securities, or to
redeem preferred stock or repay debt, when it may be disadvantageous to do so. The Fund’s use of leverage may require it to sell
portfolio investments at inopportune times in order to raise cash to redeem preferred stock or otherwise de-leverage so as to maintain
required asset coverage amounts or comply with the mandatory redemption terms of any outstanding preferred stock. The use of leverage
magnifies both the favorable and unfavorable effects of price movements in the investments made by the Fund. To the extent that the Fund
employs leverage in its investment operations, the Fund is subject to substantial risk of loss. The Fund cannot assure you that
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
borrowings
or the issuance of preferred stock will result in a higher yield or return to the holders of the common stock. Also, since the Fund utilizes
leverage, a decline in net asset value could affect the ability of the Fund to make common share distributions and such a failure to
make distributions could result in the Fund ceasing to qualify as a RIC under the Code.
Because
the advisory fee paid to the Investment Adviser is calculated on the basis of the Fund’s Managed Assets rather than only on the
basis of net assets attributable to the shares of common stock, the fee may be higher when leverage is utilized, giving the Investment
Adviser an incentive to utilize leverage. However, the Investment Adviser has agreed to reduce any management fee on the incremental
assets attributable to the cumulative preferred stock during the fiscal year if the total return of the net asset value of the outstanding
shares of common stock, including distributions and advisory fee subject to reduction for that year, does not exceed the stated dividend
rate or corresponding swap rate of each particular series of preferred stock. This fee waiver will not apply to any preferred stock issued
from this offering. The Investment Adviser currently intends that the voluntary advisory fee waiver will remain in effect for as long
as the Series C Auction Rate Preferred Stock, Series E Preferred and Series G Preferred are outstanding. The Investment Adviser, however,
reserves the right to modify or terminate the voluntary advisory fee waiver at any time.
|
● |
Portfolio
Guidelines of Rating Agencies for Preferred Stock and/or Credit Facility. In order to obtain and maintain attractive credit quality
ratings for preferred stock, the Fund must comply with investment quality, diversification and other guidelines established by the
relevant rating agencies. These guidelines could affect portfolio decisions and may be more stringent than those imposed by the 1940
Act. In the event that a rating on the Fund’s preferred stock is lowered or withdrawn by the relevant rating agency, the Fund
may also be required to redeem all or part of its outstanding preferred stock, and the common stock of the Fund will lose the potential
benefits associated with a leveraged capital structure. |
The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on common stock
total return, assuming investment portfolio total returns (comprised of net investment income of the Fund, realized gains or losses of
the Fund and changes in the value of the securities held in the Fund’s portfolio) of -10%, -5%. 0%, 5% and 10%. These assumed investment
portfolio returns are hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected
to be experienced by the Fund. The table further reflects leverage representing 43% of the Fund’s net assets, the Fund’s
current projected blended annual average leverage dividend or interest rate of 5.14%, a management fee at an annual rate of 1.00% of
the liquidation preference of any outstanding preferred stock and estimated annual incremental expenses attributable to any outstanding
preferred stock 0.08% of the Fund’s net assets attributable to common stock.
Assumed
Return on Portfolio (Net of Expenses) |
|
|
(10.0 |
)% |
|
|
(5.0 |
)% |
|
|
0.0 |
% |
|
|
5.0 |
% |
|
|
10.0 |
% |
Corresponding
Return to Common Shareholder |
|
|
(22.32 |
)% |
|
|
(13.52 |
)% |
|
|
(4.72 |
)% |
|
|
4.08 |
% |
|
|
12.87 |
% |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
The
following factors associated with leveraging could increase the investment risk and volatility of the price of the shares of common stock:
|
● |
leveraging
exaggerates any increase or decrease in the net asset value of the shares of common stock; |
|
● |
the
dividend requirements on the Fund’s shares of preferred stock may exceed the income from the portfolio securities purchased
with the proceeds from the issuance of preferred stock; |
|
● |
a
decline in net asset value results if the investment performance of the additional securities purchased fails to cover their cost
to the Fund (including any dividend requirements of preferred stock); |
|
● |
a
decline in net asset value could affect the ability of the Fund to make dividend payments on shares of common stock; |
Pursuant
to Section 18 of the 1940 Act, it is unlawful for the Fund, as a registered closed-end investment company, to issue any class of
senior security, or to sell any senior security that it issues, unless it can satisfy certain “asset coverage” ratios. The
asset coverage ratio with respect to a senior security representing indebtedness means the ratio of the value of the Fund’s total
assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate amount of the Fund’s senior
securities representing indebtedness. The asset coverage ratio with respect to a senior security representing stock means the ratio of
the value of the Fund’s total assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate
amount of the Fund’s senior securities representing indebtedness plus the aggregate liquidation preference of the Fund’s
outstanding shares of preferred stock.
If,
as is the case with the Fund, a registered investment company’s senior securities are equity securities, such securities must have
an asset coverage of at least 200% immediately following its issuance. If a registered investment company’s senior securities represent
indebtedness, such indebtedness must have an asset coverage of at least 300% immediately after their issuance. Subject to certain exceptions,
during any period following issuance that the Fund fails to satisfy these asset coverage ratios, it will, among other things, be prohibited
from declaring any dividend or declaring any other distribution in respect of its common stock except a dividend payable in shares of
common stock issued by the Fund.
Common
Stock Distribution Policy Risk. The Fund has adopted a policy, which may be changed at any time by the Board, of paying a minimum
annual distribution of 10% of the average net asset value of the Fund to common stockholders. In the event the Fund does not generate
a total return from dividends and interest received and net realized capital gains in an amount equal to or in excess of its stated distribution
in a given year, the Fund may return capital as part of such distribution, which may have the effect of decreasing the asset coverage
per share with respect to the Fund’s preferred stock. Distributions on the Fund’s common stock may contain a return of capital.
Any return of capital should not be considered by investors as yield or total return on their investment in the Fund. For the fiscal
year ended December 31, 2023, the Fund distributed a return of capital. Distributions sourced from return of capital should not
be considered as dividend yield or the total return from an investment in the Fund. Stockholders who periodically receive the payment
of a dividend or other distribution consisting of a return of capital may be under the impression that they are receiving net profits
when they are not. Stockholders should not assume that the source of a distribution from the Fund is net profit. The composition of each
distribution is estimated based on the earnings of the Fund as of the record date for each distribution. The actual composition of each
of the current year’s distributions will be based on the Fund’s investment activity through the end of the calendar year.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Special
Risks to Holders of Fixed Rate Preferred Stock
Illiquidity
Prior to Exchange Listing. Prior to the offering, there will be no public market for any additional series of fixed rate preferred
stock. In the event any additional series of fixed rate preferred stock is issued, prior application will have been made to list such
shares on a national securities exchange, which will likely be the NYSE. However, during an initial period, which is not expected to
exceed 30 days after the date of its initial issuance, such shares may not be listed on any securities exchange. During such period,
the underwriters may make a market in such shares, though, they will have no obligation to do so. Consequently, an investment in such
shares may be illiquid during such period.
Market
Price Fluctuation. Shares of fixed rate preferred stock may trade at a premium to or discount from liquidation value for various
reasons, including changes in interest rates.
Special
Risks for Holders of Auction Rate Preferred Stock
Auction
Risk. You may not be able to sell your auction rate preferred stock at an auction if the auction fails, i.e., if more shares
of auction rate preferred stock are offered for sale than there are buyers for those shares. Also, if you place an order (a hold order)
at an auction to retain auction rate preferred stock only at a specified rate that exceeds the rate set at the auction, you will not
retain your auction rate preferred stock. Additionally, if you place a hold order without specifying a rate below which you would not
wish to continue to hold your shares and the auction sets a below market rate, you will receive a lower rate of return on your shares
than the market rate. Finally, the dividend period may be changed, subject to certain conditions and with notice to the holders of the
auction rate preferred stock, which could also affect the liquidity of your investment. Since February 2008, most auction rate preferred
stock, including our Series C Auction Rate Preferred, have had failed auctions and holders of such stock have suffered reduced liquidity.
Secondary
Market Risk. If you try to sell your auction rate preferred stock between auctions, you may not be able to sell them for their
liquidation preference per share or such amount per share plus accumulated dividends. If the Fund has designated a special dividend period
of more than seven days, changes in interest rates could affect the price you would receive if you sold your shares in the secondary
market. Broker-dealers that maintain a secondary trading market for the auction rate preferred stock are not required to maintain this
market, and the Fund is not required to redeem auction rate preferred stock if either an auction or an attempted secondary market sale
fails because of a lack of buyers. The auction rate preferred stock will not be registered on a stock exchange. If you sell your auction
rate preferred stock to a broker-dealer between auctions, you may receive less than the price you paid for them, especially when market
interest rates have risen since the last auction or during a special dividend period. Since February 2008, most auction rate preferred
stock, including our Series C Auction Rate Preferred, have had failed auctions and holders of such stock have suffered reduced liquidity,
including the inability to sell such stock in a secondary market.
Special
Risks for Holders of Subscription Rights
There
is a risk that changes in market conditions may result in the underlying common or preferred stock purchasable upon exercise of the subscription
rights being less attractive to investors at the conclusion of the subscription period. This may reduce or eliminate the value of the
subscription rights. Investors who receive subscription rights may find that there is no market to sell rights they do not wish to exercise.
If investors
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
exercise
only a portion of the rights, the number of common or preferred stock issued may be reduced, and the common or preferred stock may trade
at less favorable prices than larger offerings for similar securities.
Additional
Risks Relating to Derivative Investments
Derivatives
Transactions Subject to Rule 18f-4. Rule 18f-4 under the 1940 Act governs the Fund’s use of derivative instruments
and certain other transactions that create future payment and/or delivery obligations by the Fund. Rule 18f-4 permits the Fund to
enter into Derivatives Transactions (as defined below) and certain other transactions notwithstanding the restrictions on the issuance
of “senior securities” under Section 18 of the 1940 Act. Section 18 of the 1940 Act, among other things, prohibits
closed-end funds, including the Fund, from (i) issuing or selling any “senior security” representing indebtedness unless,
immediately after such issuance or sale, the fund will have asset coverage of at least 300%, and (ii) issuing or selling any “senior
security” which is stock unless, immediately after such issuance or sale, the fund will have asset coverage of at least 200%. In
connection with the adoption of Rule 18f-4, the SEC eliminated the asset segregation framework arising from prior SEC guidance for
covering Derivatives Transactions and certain financial instruments.
Under
Rule 18f-4, “Derivatives Transactions” include the following: (i) any swap, security-based swap (including a contract
for differences), futures contract, forward contract, option (excluding purchased options), any combination of the foregoing, or any
similar instrument, under which a Fund is or may be required to make any payment or delivery of cash or other assets during the life
of the instrument or at maturity or early termination, whether as margin or settlement payment or otherwise; (ii) any short sale borrowing;
(iii) reverse repurchase agreements and similar financing transactions, if a Fund elects to treat these transactions as Derivatives Transactions
under Rule 18f-4; and (iv) when-issued or forward-settling securities (e.g., firm and standby commitments, including to-be-announced
(“TBA”) commitments, and dollar rolls) and non-standard settlement cycle securities, unless the Fund intends to physically
settle the transaction and the transaction will settle within 35 days of its trade date.
Unless
a fund is relying on the Limited Derivatives User Exception (as defined below), the fund must comply with Rule 18f-4 with respect
to its Derivatives Transactions. Rule 18f-4, among other things, requires a fund to (i) appoint a Derivatives Risk Manager, (ii)
maintain a Derivatives Risk Management Program designed to identify, assess, and reasonably manage the risks associated with Derivatives
Transactions; (iii) comply with certain value-at-risk (VaR)-based leverage limits (VaR is an estimate of an instrument’s or portfolio’s
potential losses over a given time horizon and at a specified confidence level); and (iv) comply with certain reporting and recordkeeping
requirements of the fund’s board of directors.
Rule 18f-4
provides an exception from the requirements to appoint a Derivatives Risk Manager, adopt a Derivatives Risk Management Program, comply
with certain VaR-based leverage limits, and comply with certain Board oversight and reporting requirements if a fund’s “derivatives
exposure” (as defined in Rule 18f-4) is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)
and the fund adopts and implements written policies and procedures reasonably designed to manage its derivatives risks (the “Limited
Derivatives User Exception”).
Pursuant
to Rule 18f-4, if the Fund enters into reverse repurchase agreements or similar financing transactions, the Fund will (i) aggregate
the amount of indebtedness associated with all of its reverse repurchase agreements or similar financing transactions with the amount
of any other “senior securities” representing indebtedness
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
(e.g.,
bank borrowings, if applicable) when calculating the Fund’s asset coverage ratio or (ii) treat all such transactions as Derivatives
Transactions.
The
requirements of Rule 18f-4 may limit the Fund’s ability to engage in Derivatives Transactions as part of its investment strategies.
These requirements may also increase the cost of the Fund’s investments and cost of doing business, which could adversely affect
the value of the Fund’s investments and/or the performance of the Fund.
Futures
Contracts and Options on Futures Risk. Futures and options on futures entail certain risks, including but not limited to the
following: no assurance that futures contracts or options on futures can be offset at favorable prices; possible reduction of the yield
of the Fund due to the use of hedging; possible reduction in value of both the securities hedged and the hedging instrument; possible
lack of liquidity due to daily limits on price fluctuations; imperfect correlation between the contracts and the securities being hedged;
and losses from investing in futures transactions that are potentially unlimited.
Options
Risk. To the extent that the Fund purchases options pursuant to a hedging strategy, the Fund will be subject to the following
additional risks. If a put or call option purchased by the Fund is not sold when it has remaining value, and if the market price of the
underlying security remains equal to or greater than the exercise price (in the case of a put), or remains less than or equal to the
exercise price (in the case of a call), the Fund will lose its entire investment in the option.
Where
a put or call option on a particular security is purchased to hedge against price movements in that or a related security, the price
of the put or call option may move more or less than the price of the security. If restrictions on exercise are imposed, the Fund may
be unable to exercise an option it has purchased. If the Fund is unable to close out an option that it has purchased on a security, it
will have to exercise the option in order to realize any profit or the option may expire worthless.
Forward
Foreign Currency Exchange Contracts Risk. The Fund may enter into forward foreign currency exchange contracts to protect the
value of its portfolio against uncertainty in the level of future currency exchange rates between a particular foreign currency and the
U.S. dollar or between foreign currencies in which its securities are or may be denominated. The Fund may enter into such contracts on
a spot (i.e., cash) basis at the rate then prevailing in the currency exchange market or on a forward basis, by entering into a forward
contract to purchase or sell currency. A forward contract on foreign currency is an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days agreed upon by the parties from the date of the contract at a price set on the
date of the contract. Forward currency contracts (i) are traded in a market conducted directly between currency traders (typically, commercial
banks or other financial institutions) and their customers, (ii) generally have no deposit requirements and (iii) are typically consummated
without payment of any commissions. The Fund, however, may enter into forward currency contracts requiring deposits or involving the
payment of commissions.
The
dealings of the Fund in forward foreign exchange are limited to hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of one forward foreign currency for another currency with respect to specific receivables
or payables of the Fund accruing in connection with the purchase and sale of its portfolio securities or its payment of distributions.
Position hedging is the purchase or sale of one forward foreign currency for another currency with respect to portfolio security positions
denominated or quoted
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
in
the foreign currency to offset the effect of an anticipated substantial appreciation or depreciation, respectively, in the value of the
currency relative to the U.S. dollar. In this situation, the Fund also may, for example, enter into a forward contract to sell or purchase
a different foreign currency for a fixed U.S. dollar amount where it is believed that the U.S. dollar value of the currency to be sold
or bought pursuant to the forward contract will fall or rise, as the case may be, whenever there is a decline or increase, respectively,
in the U.S. dollar value of the currency in which its portfolio securities are denominated (this practice being referred to as a “cross-hedge”).
In
hedging a specific transaction, the Fund may enter into a forward contract with respect to either the currency in which the transaction
is denominated or another currency deemed appropriate by the Investment Adviser. The amount the Fund may invest in forward currency contracts
is limited to the amount of its aggregate investments in foreign currencies.
The
use of forward currency contracts may involve certain risks, including the failure of the counterparty to perform its obligations under
the contract, and such use may not serve as a complete hedge because of an imperfect correlation between movements in the prices of the
contracts and the prices of the currencies hedged or used for cover. The Fund will only enter into forward currency contracts with parties
which the Investment Adviser believes to be creditworthy institutions.
Interest
Rate Transactions Risk. The Fund may enter into interest rate swap or cap transactions with respect to all or a portion of any
series of floating rate preferred stock in order to manage the impact on its portfolio of changes in the dividend rate of such stock.
Through these transactions the Fund seeks to obtain the equivalent of a fixed rate for such floating rate preferred stock that is lower
than the Fund would have to pay if it issued fixed rate preferred stock. The use of interest rate swaps and caps is a highly specialized
activity that involves certain risks to the Fund including, among others, counterparty risk and early termination risk.
Counterparty
Risk. The Fund will be subject to credit risk with respect to the counterparties to the derivative contracts purchased by the
Fund. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties,
the Fund may experience significant delays in obtaining any recovery under the derivative contract in bankruptcy or other reorganization
proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.
The
counterparty risk for cleared derivatives is generally lower than for uncleared OTC derivative transactions since generally a clearing
organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the parties’
performance under the contract as each party to a trade looks only to the clearing organization for performance of financial obligations
under the derivative contract. However, there can be no assurance that a clearing organization, or its members, will satisfy its obligations
to the Fund, or that the Fund would be able to recover the full amount of assets deposited on its behalf with the clearing organization
in the event of the default by the clearing organization or the Fund’s clearing broker. In addition, cleared derivative transactions
benefit from daily marking-to-market and settlement, and segregation and minimum capital requirements applicable to intermediaries. Uncleared
OTC derivative transactions generally do not benefit from such protections. This exposes the Fund to the risk that a counterparty will
not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or
not bona fide) or because of a credit or liquidity problem, thus causing the Fund to suffer a loss. Such
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
“counterparty
risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Fund has
concentrated its transactions with a single or small group of counterparties.
Derivatives
Regulation Risk. The Dodd-Frank Act has made broad changes to the derivatives market, granted significant new authority to the
CFTC and the SEC to regulate derivatives (swaps and security-based swaps) and participants in these markets. The Dodd-Frank Act is intended
to regulate the derivatives market by requiring many derivative transactions to be cleared and traded on an exchange, expanding entity
registration requirements, imposing business conduct requirements on dealers and requiring banks to move some derivatives trading units
to a non-guaranteed affiliate separate from the deposit-taking bank or divest them altogether. The CFTC has implemented mandatory clearing
and exchange-trading of certain derivatives contracts including many standardized interest rate swaps and credit default index swaps.
The CFTC continues to approve contracts for central clearing. Exchange-trading and central clearing are expected to reduce counterparty
credit risk by substituting the clearinghouse as the counterparty to a swap and increase liquidity, but exchange-trading and central
clearing do not make swap transactions risk-free. Uncleared swaps, such as non-deliverable foreign currency forwards, are subject to
certain margin requirements that mandate the posting and collection of minimum margin amounts. This requirement may result in the Fund
and its counterparties posting higher margin amounts for uncleared swaps than would otherwise be the case. Certain rules require centralized
reporting of detailed information about many types of cleared and uncleared swaps. Reporting of swap data may result in greater market
transparency, but may subject the Fund to additional administrative burdens, and the safeguards established to protect trader anonymity
may not function as expected.
HOW
THE FUND MANAGES RISK
Investment
Restrictions
The
Fund has adopted certain investment limitations designed to limit investment risk and maintain portfolio diversification. These limitations
are fundamental and may not be changed without the approval of the holders of a majority, as defined in the 1940 Act, of the outstanding
shares of common stock and preferred stock. Should the Fund decide to issue additional series of preferred stock in the future, it may
become subject to rating agency guidelines that are more limiting than its fundamental investment policies in order to obtain and maintain
a desired rating on its preferred stock.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
INVESTMENT
RESTRICTIONS
The
Fund operates under the following restrictions that constitute fundamental policies that cannot be changed without the affirmative vote
of the holders of a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act). Such a majority is defined
as the lesser of (i) 67% or more of the shares present at a meeting of stockholders, if the holders of 50% of the outstanding shares
of the Fund are present or represented by proxy or (ii) more than 50% of the outstanding shares of the Fund. All percentage limitations
set forth below apply immediately after a purchase or initial investment and any subsequent change in any applicable percentage resulting
from market fluctuations does not require elimination of any security from the portfolio. The Fund may not:
1. Invest
25% or more of its total assets, taken at market value at the time of each investment, in the securities of issuers in any particular
industry other than the telecommunications, media, publishing, and entertainment industries. This restriction does not apply to investments
in U.S. government securities.
2. Purchase
securities of other investment companies, except in connection with a merger, consolidation, acquisition, or reorganization, if more
than 10% of the market value of the total assets of the Fund would be invested in securities of other investment companies, more than
5% of the market value of the total assets of the Fund would be invested in the securities of any one investment company or the Fund
would own more than 3% of any other investment company’s securities; provided, however, this restriction will not apply to securities
of any investment company organized by the Fund that are to be distributed pro rata as a dividend to its stockholders.
3. Purchase
or sell commodities or commodity contracts except that the Fund may purchase or sell futures contracts and related options thereon if
immediately thereafter (i) no more than 5% of its total assets are invested in margins and premiums and (ii) the aggregate market value
of its outstanding futures contracts and market value of the currencies and futures contracts subject to outstanding options written
by the Fund do not exceed 50% of the market value of its total assets. The Fund may not purchase or sell real estate, provided that the
Fund may invest in securities secured by real estate or interests therein or issued by companies which invest in real estate or interests
therein.
4. Purchase
any securities on margin, except that the Fund may obtain such short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities.
5. Make
loans of money, except by the purchase of a portion of publicly distributed debt obligations in which the Fund may invest, and repurchase
agreements with respect to those obligations, consistent with its investment objectives and policies. The Fund reserves the authority
to make loans of its portfolio securities to financial intermediaries in an aggregate amount not exceeding 20% of its total assets. Any
such loans will only be made upon approval of, and subject to any conditions imposed by, the Board. Because these loans would at all
times be fully collateralized, the risk of loss in the event of default of the borrower should be slight.
6. Borrow
money, except that the Fund may borrow from banks and other financial institutions on an unsecured basis, in an amount not exceeding
10% of its total assets, to finance the repurchase of its shares. The Fund also may borrow money on a secured basis from banks as a temporary
measure for extraordinary or emergency
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
purposes.
Temporary borrowings may not exceed 5% of the value of the total assets of the Fund at the time the loan is made. The Fund may pledge
up to 10% of the lesser of the cost or value of its total assets to secure temporary borrowings. The Fund will not borrow for investment
purposes. Immediately after any borrowing, the Fund will maintain asset coverage of not less than 300% with respect to all borrowings.
While the borrowing of the Fund exceeds 5% of its respective total assets, the Fund will make no further purchases of securities, although
this limitation will not apply to repurchase transactions as described above.
7. Underwrite
securities of other issuers except insofar as the Fund may be deemed an underwriter under the Securities Act of 1933, as amended, in
selling portfolio securities; provided, however, this restriction will not apply to securities of any investment company organized by
the Fund that are to be distributed pro rata as a dividend to its stockholders.
8. Invest
more than 15% of its total assets in illiquid securities, such as repurchase agreements with maturities in excess of seven days, or securities
that at the time of purchase have legal or contractual restrictions on resale.
9.
Issue senior securities, except to the extent permitted by applicable law.
With
respect to (1) above, the Fund invests 25% or more of its total assets in the securities of issuers in the telecommunications, media,
publishing and entertainment industries.
ADDITIONAL
INVESTMENT POLICIES
Additional
Investment Policies
Interest
Rate Transactions. The Fund may enter into interest rate swap or cap transactions in relation to all or a portion of any series
of floating rate preferred stock in order to manage the impact on its portfolio of changes in the dividend rate of such stock. Through
these transactions, the Fund may, for example, obtain the equivalent of a fixed rate for such floating rate preferred stock that is lower
than the Fund would have to pay if it issued fixed rate preferred stock.
The
use of interest rate swaps and caps is a highly specialized activity that involves investment techniques and risks different from those
associated with ordinary portfolio security transactions. In an interest rate swap, the Fund would agree to pay to the other party to
the interest rate swap (which is known as the “counterparty”) periodically a fixed rate payment in exchange for the counterparty
agreeing to pay to the Fund periodically a variable rate payment that is intended to approximate the Fund’s variable rate payment
obligation on its floating rate preferred stock. In an interest rate cap, the Fund would pay a premium to the counterparty to the interest
rate cap and, to the extent that a specified variable rate index exceeds a predetermined fixed rate, would receive from the counterparty
payments of the difference based on the notional amount of such cap. Interest rate swap and cap transactions introduce additional risk
because the Fund would remain obligated to pay preferred stock dividends or distributions when due in accordance with the Articles Supplementary
of the relevant series of the floating rate preferred stock even if the counterparty defaulted. Depending on the general state of short-term
interest rates and the returns on the Fund’s portfolio securities at that point in time, such a default could negatively affect
the Fund’s ability to make dividend or distribution payments on the floating rate preferred stock. In addition, at the time an
interest rate swap or cap transaction reaches its scheduled termination date, there is a risk that the Fund will not be able to obtain
a replacement transaction or that the terms of the replacement will
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
not
be as favorable as on the expiring transaction. If this occurs, it could have a negative impact on the Fund’s ability to make dividend
or distribution payments on the floating rate preferred stock. To the extent there is a decline in interest rates, the value of the interest
rate swap or cap could decline, resulting in a decline in the asset coverage for the shares of floating rate preferred stock. A sudden
and dramatic decline in interest rates may result in a significant decline in the asset coverage. Under the Articles Supplementary for
each series of the preferred stock, if the Fund fails to maintain the required asset coverage on the outstanding preferred stock or fails
to comply with other covenants, the Fund may be required to redeem some or all of these shares. The Fund generally may redeem any series
of floating rate preferred stock, in whole or in part, at its option at any time (usually on a dividend or distribution payment date),
other than during a non-call period. Such redemption would likely result in the Fund seeking to terminate early all or a portion of any
swap or cap transactions. Early termination of a swap could result in a termination payment by the Fund to the counterparty, while early
termination of a cap could result in a termination payment to the Fund.
The
Fund will usually enter into swaps or caps on a net basis; that is, the two payment streams will be netted out in a cash settlement on
the payment date or dates specified in the instrument, with the Fund receiving or paying, as the case may be, only the net amount of
the two payments. The Fund will monitor any such swap with a view to ensuring that the Fund remains in compliance with all applicable
regulatory investment policy and tax requirements.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Unaudited) (Continued)
MANAGEMENT
OF THE FUND
Directors
and Officers
The
business and affairs of the Fund are managed under the direction of the Fund’s Board of Directors Information pertaining to the
Directors and Officers of the Fund is set forth below. The Fund’s Statement of Additional Information includes additional information
about the Fund’s Directors and is available without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to
The Gabelli Multimedia Trust Inc. at One Corporate Center, Rye, NY 10580-1422.
Name,
Position(s) Address1 and Year of Birth |
|
Term
of Office and Length of Time Served2 |
|
Number
of Funds in
Fund Complex Overseen by
Director |
|
Principal
Occupation(s) During Past Five Years |
|
Other
Directorships Held by Director3 |
|
|
|
|
|
|
|
|
|
INTERESTED DIRECTORS4: |
|
|
|
|
|
|
|
|
|
|
|
Mario J. Gabelli, CFA Director and Chief
Investment Officer 1942 |
|
Since
1994** |
|
31 |
|
Chairman,
Co-Chief Executive Officer, and Chief Investment Officer– Value Portfolios of GAMCO Investors, Inc. and Chief Investment Officer
– Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management, Inc.; Director/Trustee or Chief Investment Officer of
other registered investment companies within the Gabelli Fund Complex; Chief Executive Officer of GGCP, Inc.; Executive Chair of
Associated Capital Group, Inc. |
|
Director
of Morgan Group Holding Co. (holding company) (2001-2019); Chairman of the Board and Chief Executive Officer of LICT Corp. (multimedia
and communication services company); Director of CIBL, Inc. (broadcasting and wireless communications); Director of ICTC Group Inc.
(communications) (2013-2018) |
|
|
|
|
|
|
|
|
|
Christopher
J. Marangi, CFA Director 1974 |
|
Since
2013** |
|
6 |
|
Managing
Director and Co-Chief Investment Officer of the Value team of GAMCO Investors, Inc.; Portfolio Manager for Gabelli Funds, LLC and
GAMCO Asset Management Inc. |
|
— |
|
|
|
|
|
|
|
|
|
INDEPENDENT DIRECTORS5: |
|
|
|
|
|
|
|
|
|
|
|
Calgary
Avansino Director 1975 |
|
Since
2021** |
|
5 |
|
Chief Executive
Officer, Glamcam (2018- 2020) |
|
Trustee,
Cate School; Trustee, the E.L. Wiegand Foundation; Member, the Common Sense Media Advisory Council |
|
|
|
|
|
|
|
|
|
John
Birch6 Director 1950 |
|
Since
2019* |
|
10 |
|
Partner,
The Cardinal Partners Global; Chief Operating Officer of Sentinel Asset Management and Chief Financial Officer and Chief Risk Officer
of Sentinel Group Funds (2005-2015) |
|
— |
|
|
|
|
|
|
|
|
|
Elizabeth
C. Bogan Director 1944 |
|
Since
1990* |
|
12 |
|
Former
Senior Lecturer in Economics, Princeton University |
|
— |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Unaudited) (Continued)
Name,
Position(s) Address1 and Year of Birth |
|
Term
of Office and Length of Time Served2 |
|
Number
of Funds in
Fund Complex Overseen by
Director |
|
Principal
Occupation(s) During Past Five Years |
|
Other
Directorships Held by Director3 |
|
|
|
|
|
|
|
|
|
Anthony
S. Colavita6,7 Director 1961 |
|
Since
2018** |
|
23 |
|
Attorney,
Anthony S. Colavita, P.C., Supervisor, Town of Eastchester, NY |
|
— |
|
|
|
|
|
|
|
|
|
James
P. Conn7 Director 1938 |
|
Since
1994* |
|
23 |
|
Former
Managing Director and Chief Investment Officer of Financial Security Assurance Holdings Ltd. (1992-1998) |
|
— |
|
|
|
|
|
|
|
|
|
Frank
J. Fahrenkopf, Jr.6 Director 1939 |
|
Since
1999*** |
|
11 |
|
Co-Chairman
of the Commission on Presidential Debates; Former President and Chief Executive Officer of the American Gaming Association (1995-2013);
Former Chairman of the Republican National Committee (1983-1989) |
|
Director
of First Republic Bank (banking); Director of Eldorado Resorts, Inc. (casino entertainment company) |
|
|
|
|
|
|
|
|
|
Werner
J. Roeder6 Director 1940 |
|
Since
1999*** |
|
20 |
|
Retired
physician; Former Vice President of Medical Affairs (Medical Director) of New York Presbyterian/Lawrence Hospital (1999-2014) |
|
— |
|
|
|
|
|
|
|
|
|
Salvatore
J. Zizza8 Director 1945 |
|
Since
1994*** |
|
35 |
|
President,
Zizza & Associates Corp. (private holding company); Chairman of Bergen Cove Realty Inc. (residential real estate) |
|
Director
and Chairman of Trans-Lux Corporation (business services); Director and Chairman of Harbor Diversified Inc. (pharmaceuticals) (2009-2018);
Retired Chairman of BAM (semiconductor and aerospace manufacturing); Director of Bion Environmental Technologies, Inc. |
|
|
|
|
|
|
|
|
|
Daniel
E. Zucchi9 Director 1940 |
|
Since
2019*** |
|
3 |
|
President
of Zucchi & Associates (general business consulting); Senior Vice President of Hearst Corp. (1984-1995) |
|
Cypress
Care LLC (health care) (2001-2009); Director, PMV Consumer Acquisition Corp. |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Unaudited) (Continued)
Name,
Position(s) Address1 and Year of Birth |
|
Term
of Office and Length of Time Served2 |
|
Principal
Occupation(s) During Past Five Years |
|
|
|
|
|
OFFICERS: |
|
|
|
|
|
|
|
|
|
John C. Ball President, Treasurer,
Principal Financial &
Accounting Officer 1976 |
|
Since
2017 |
|
Senior
Vice President (since 2018) of GAMCO Investors, Inc.; Chief Executive Officer, G. Distributors, LLC since 2020; Officer of registered
investment companies within the Gabelli Fund Complex since 2017 |
|
|
|
|
|
Peter Goldstein Secretary & Vice
President 1953 |
|
Since
2020 |
|
General
Counsel, GAMCO Investors, Inc. and Chief Legal Officer, Associated Capital Group, Inc. since 2021; General Counsel and Chief Compliance
Officer, Buckingham Capital Management, Inc. (2012-2020); Chief Legal Officer and Chief Compliance Officer, The Buckingham Research
Group, Inc. (2012-2020) |
|
|
|
|
|
Richard J. Walz Chief Compliance
Officer 1959 |
|
Since
2013 |
|
Chief Compliance
Officer of registered investment companies within the Gabelli Fund Complex since 2013 |
|
|
|
|
|
Carter W. Austin Vice President and
Ombudsman 1966 |
|
Since
2010 |
|
Vice President
and/or Ombudsman of closed-end funds within the Gabelli Fund Complex; Senior Vice President (since 2015) of Gabelli Funds, LLC |
|
|
|
|
|
Laurissa
M. Martire Vice President 1976 |
|
Since
2004 |
|
Vice President
and/or Ombudsman of closed-end funds within the Gabelli Fund Complex; Senior Vice President (since 2019) of GAMCO Investors, Inc. |
|
1 |
Address: One Corporate Center,
Rye, NY 10580-1422, unless otherwise noted. |
|
2 |
The Fund’s Board of
Directors is divided into three classes, each class having a term of three years. Each year the term of office of one class expires
and the successor or successors elected to such class serve for a three year term. The three year term for each class expires as
follows: |
|
* |
Term
expires at the Fund’s 2024 Annual Meeting of Stockholders or until their successors are duly elected and qualified. |
|
** |
Term
expires at the Fund’s 2025 Annual Meeting of Stockholders or until their successors are duly elected and qualified. |
|
*** |
Term
expires at the Fund’s 2026 Annual Meeting of Stockholders or until their successors are duly elected and qualified. |
Each
officer will hold office for an indefinite term until the date he or she resigns or retires or until his or her successor is elected
and qualified.
|
3 |
This column includes only
directorships of companies required to report to the SEC under the Securities Exchange Act of 1934, as amended, i.e., public companies,
or other investment companies registered under the 1940 Act. |
|
4 |
“Interested person”
of the Fund, as defined in the 1940 Act. Messrs. Gabelli and Marangi are each considered an “interested person” because
of their affiliation with Gabelli Funds, LLC, which acts as the Fund’s investment adviser. |
|
5 |
Directors who are not interested
persons are considered “Independent” Directors. |
|
6 |
Mr. Fahrenkopf’s
daughter, Lesle. F. Foley, and Mr. Colavita’s father, Anthony J. Colavita, serve as directors of other funds in the Fund
Complex, and Mr. Birch is a director of Gabelli Merger Plus+ Trust Plc and GAMCO International SICAV, which may be deemed to
be controlled by Mario J. Gabelli and/or affiliates and, in that event, would be deemed to be under common control with the Fund’s
Adviser. |
|
7 |
This Director is elected
solely by and represents the stockholders of the preferred stock issued by this Fund. |
|
8 |
Mr. Zizza is an independent
director of Gabelli International Ltd., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event
would be deemed to be under common control with the Fund’s Adviser. On September 9, 2015, Mr. Zizza entered into
a settlement with the SEC to resolve an inquiry relating to an alleged violation regarding the making of false statements or omissions
to the accountants of a company concerning a related party transaction. The company in question is not an affiliate of, nor has any
connection |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Unaudited) (Continued)
|
|
to, the Fund. Under the terms
of the settlement, Mr. Zizza, without admitting or denying the SEC’s findings and allegation, paid $150,000 and agreed
to cease and desist committing or causing any future violations of Rule 13b2-2 of the Securities Exchange Act of 1934, as amended.
The Board has discussed this matter and has determined that it does not disqualify Mr. Zizza from serving as an Independent
Director. |
|
9 |
Mr. Zucchi is a director
of PMV Consumer Acquisition Corp., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would
be deemed to be under common control with the Fund’s Adviser. |
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
General
The
Fund’s Board has overall responsibility for the management of the Fund. The Board decides upon matters of general policy and reviews
the actions of the Investment Adviser, Gabelli Funds, LLC, One Corporate Center, Rye, New York 10580-1422, and the Sub-Administrator
(as defined below). Pursuant to an investment advisory agreement between the Fund and the Investment Adviser (the “Advisory Agreement”),
the Investment Adviser makes investment decisions for the Fund, and places orders to purchase and sell securities on behalf of the Fund
and manages the Fund’s other business and affairs, all subject to the supervision and direction of its Board. In addition, under
the Advisory Agreement, the Investment Adviser oversees the administration of all aspects of the Fund’s business and affairs and
provides, or arranges for others to provide, at the Investment Adviser’s expense, certain enumerated services, including maintaining
the Fund’s books and records, preparing reports to its stockholders and supervising the calculation of the net asset value of its
stock.
As
compensation for its services rendered and the related expenses borne by the Investment Adviser, the Fund pays the Investment Adviser
a fee computed weekly and paid monthly, equal on an annual basis to 1.00% of the Fund’s average weekly net assets including the
liquidation value of preferred stock. The fee paid by the Fund may be higher when leverage in the form of preferred stock is utilized,
giving the Investment Adviser an incentive to utilize such leverage. However, the Investment Adviser has agreed to reduce the management
fee on the incremental assets attributable to the currently outstanding Series C Auction Rate Preferred Stock during the fiscal year
if the total return of the net asset value of the common stock of the Fund, including distributions and advisory fees subject to reduction
for that year, does not exceed the stated dividend rate or corresponding swap rate of the Series C Auction Rate Preferred Stock for the
period. In other words, if the effective cost of the leverage for the Series C Auction Rate Preferred Stock exceeds the total return
(based on net asset value) on the Fund’s common stock, the Investment Adviser will reduce that portion of its management fee on
the incremental assets attributable to the Series C Auction Rate Preferred Stock to mitigate the negative impact of that leverage on
the common stockholder’s total return. The Investment Adviser currently intends that the voluntary advisory fee waiver will remain
in effect for as long as the Series C Auction Rate Cumulative Preferred Stock is outstanding. This fee waiver does not apply to any other
series of preferred stock. The Investment Adviser, however, reserves the right to modify or terminate the voluntary advisory fee waiver
at any time.
The
Investment Adviser
The
Investment Adviser, a New York limited liability company and registered investment adviser under the Investment Advisers Act of 1940,
as amended, serves as an investment adviser to registered investment companies with combined aggregate net assets approximating $20.3
billion as of December 31, 2023. The Investment Adviser is a wholly owned subsidiary of GAMCO Investors, Inc. (“GAMI”),
a New York corporation, whose Class A Common Stock is traded on the OTCQX under the symbol, “GAMI.” Mr. Mario J. Gabelli
may be deemed a “controlling person” of the Investment Adviser on the basis of his controlling interest in GAMI. Mr. Gabelli
owns a majority of the stock of GGCP, Inc. (“GGCP”), which holds a majority of the capital stock and voting power of GAMI.
The Investment Adviser has several affiliates that provide investment advisory services: GAMCO Asset Management, Inc., a wholly owned
subsidiary of GAMI, acts as investment adviser for individuals, pension trusts, profit sharing trusts, and endowments, and as a sub-adviser
to certain third party investment funds, which include registered investment companies, having assets under management of approximately
$10.7 billion as of December 31, 2023; Teton Advisors, Inc. and its wholly owned investment adviser, Keeley
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Teton
Advisers, LLC, with assets under management of approximately $1.3 billion as of September 30, 2023, acts as investment advisers
to The TETON Westwood Funds, the KEELEY Funds, and separately managed accounts; Gabelli & Company Investment Advisers, Inc. (formerly,
Gabelli Securities, Inc.), a wholly-owned subsidiary of Associated Capital Group, Inc. (“Associated Capital”), acts as investment
adviser for certain alternative investment products, consisting primarily of risk arbitrage and merchant banking limited partnerships
and offshore companies, with assets under management of approximately $1.6 billion as of December 31, 2023; Teton Advisors, Inc.
was spun off by GAMI in March 2009 and is an affiliate of GAMI by virtue of Mr. Gabelli’s ownership of GGCP, the principal
stockholder of Teton Advisors, Inc., as of December 31, 2023. Effective December 31, 2021, Teton Advisors, Inc. completed a
reorganization by transferring its entire advisory business, operations and personnel to a new wholly-owned subsidiary, Teton Advisors,
LLC. Teton Advisors, Inc. is now the holding company and parent of the new adviser. The ownership of the parent company is unchanged
and the consummation of the reorganization did not result in a change of its control. Associated Capital was spun off from GAMI on November 30,
2015, and is an affiliate of GAMI by virtue of Mr. Gabelli’s ownership of GGCP, the principal stockholder of Associated Capital.
A
discussion regarding the basis for the Fund’s Board approval of the Advisory Agreement with the Investment Adviser is available
in this Annual Report.
Payment
of Expenses
The
Investment Adviser is obligated to pay expenses associated with providing the services contemplated by the Advisory Agreement including
compensation of and office space for its officers and employees connected with investment and economic research, trading and investment
management and administration of the Fund, as well as the fees of all Directors of the Fund who are affiliated with the Investment Adviser.
In
addition to the fees of the Investment Adviser, the Fund is responsible for the payment of all its other expenses incurred in the operation
of the Fund, which include, among other things, expenses for legal and independent accountants’ services, costs of printing proxies,
stock certificates and stockholder reports, charges of the custodian, any sub-custodian and transfer and dividend payment agent, expenses
in connection with the dividend reinvestment and cash purchase plans, SEC fees, fees and expenses of unaffiliated Directors, accounting
and pricing costs, the Fund’s pro rata portion of membership fees in trade associations, fidelity bond coverage for the Fund’s
officers and employees, directors’ and officers’ errors and omissions insurance coverage, interest, brokerage costs, taxes,
stock exchange listing fees and expenses, all expenses of computing the Fund’s net asset value per share, including any equipment
or services obtained solely for the purpose of pricing shares or valuing the Fund’s investment portfolio, expenses of qualifying
the Fund for sale in various states, litigation and other extraordinary or non-recurring expenses and other expenses properly payable
by the Fund.
Advisory
Agreement
Under
the terms of the Advisory Agreement, all expenses of computing the Fund’s net asset value, including any equipment or services
obtained solely for the purpose of pricing shares of stock or valuing the Fund’s investment portfolio, will be an expense of the
Fund under the Advisory Agreement unless the Investment Adviser voluntarily assumes responsibility for such expense. During the fiscal
year ended December 31, 2023,
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
the
Fund reimbursed the Investment Adviser $45,000 in connection with the cost of computing the Fund’s net asset value.
The
Fund’s total return on the net asset value of the common stock is monitored on a monthly basis to assess whether the total return
on the net asset value of the common stock exceeds the stated dividend rate or corresponding swap rate of the Series C Auction Rate Preferred
Stock for the period. The test to confirm the accrual of the management fee on the assets attributable to the Series C Auction Rate Preferred
Stock is annual. The Fund will accrue for the management fee on these assets during the fiscal year if it appears probable that the Fund
will incur the management fee on those additional assets. For the year ended December 31, 2023, the Fund’s total return on
the net asset value of the common stock exceeded the stated dividend rate of the outstanding Series C Auction Rate Preferred Stock. Thus,
management fees were earned on these assets.
The
Advisory Agreement provides that in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations
and duties thereunder, the Investment Adviser is not liable for any error or judgment or mistake of law or for any loss suffered by the
Fund. As part of the Advisory Agreement, the Fund has agreed that the name “Gabelli” is the Investment Adviser’s property,
and that in the event the Investment Adviser ceases to act as an investment adviser to the Fund, the Fund will change its name to one
not including “Gabelli.”
Pursuant
to its terms, the Advisory Agreement will remain in effect with respect to the Fund from year to year if approved annually: (i) by the
Fund’s Board or by the holders of a majority of the Fund’s outstanding voting securities and (ii) by a majority of the Directors
who are not “interested persons” (as defined in the 1940 Act) of any party to the Advisory Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. A discussion regarding the basis of the Board’s approval of the
Advisory Agreement is available in the Fund’s semiannual report to stockholders for the six months ended June 30, 2023.
Canadian
stockholders should note, to the extent applicable, that there may be difficulty enforcing any legal rights against the Investment Adviser
because it is resident outside Canada and all of its assets are situated outside Canada.
Selection
of Securities Brokers
The
Advisory Agreement contains provisions relating to the selection of securities brokers to effect the portfolio transactions of the Fund.
Under those provisions, the Investment Adviser may: (i) direct Fund portfolio brokerage to Gabelli & Company, Inc. (“Gabelli
& Company”) or other broker-dealer affiliates of the Investment Adviser and (ii) pay commissions to brokers other than Gabelli
& Company that are higher than might be charged by another qualified broker to obtain brokerage and/or research services considered
by the Investment Adviser to be useful or desirable for its investment management of the Fund and/or its other advisory accounts or those
of any investment adviser affiliated with it. The Fund’s Statement of Additional Information contains further information about
the Advisory Agreement, including a more complete description of the investment advisory and expense arrangements, exculpatory and brokerage
provisions, as well as information on the brokerage practices of the Fund.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Portfolio
Managers
Mario
J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer—Value Portfolios of GAMCO Investors, Inc. that
he founded in 1977 and Chief Investment Officer—Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. He is also
Executive Chairman of Associated Capital Group, Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University, and holds
an M.B.A. degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.
Christopher
J. Marangi, joined Gabelli in 2003 as a research analyst. Currently he is a Managing Director and Co-Chief Investment Officer for GAMCO
Investors, Inc.’s Value team. In addition, he serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within
the Gabelli/GAMCO Fund Complex. Mr. Marangi graduated magna cum laude and Phi Beta Kappa with a BA in Political Economy from Williams
College and holds an MBA degree with honors from Columbia Business School.
Sub-Administrator
The
Investment Adviser has entered into a sub-administration agreement with The Bank of New York Mellon (the “Sub-Administrator”)
pursuant to which the Sub-Administrator provides certain administrative services necessary for the Fund’s operations which do not
include the investment and portfolio management services provided by the Investment Adviser. For these services and the related expenses
borne by the Sub-Administrator, the Investment Adviser pays an annual fee based on the value of the aggregate average daily net assets
of all funds under its administration managed by the Investment Adviser, GAMCO and Teton Advisors, Inc. as follows: 0.0275% - first $10
billion, 0.0125% - exceeding $10 billion but less than $15 billion, 0.01% - over $15 billion but less than $20 billion and 0.008% - over
$20 billion. The Sub-Administrator has its principal office at 760 Moore Road, King of Prussia, Pennsylvania 19406.
Portfolio
Transactions
Principal
transactions are not entered into with affiliates of the Fund. However, G.research an affiliate of the Investment Adviser, may execute
portfolio transactions on stock exchanges and in the over-the-counter markets on an agency basis and receive a stated commission therefrom.
NET
ASSET VALUE
The
net asset value of the Fund’s shares is computed based on the market value of the securities it holds and is determined daily as
of the close of the regular trading day on the NYSE. For purposes of determining the Fund’s net asset value per share, portfolio
securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market
quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close
of business on the day the securities are being valued. If there were no sales that day, the security is valued at the mean of the closing
bid and asked prices, or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that
day. If no bid or ask prices are quoted on such day, the security will be valued based on written or standing instructions from the Investment
Adviser, which has been appointed Valuation Designee pursuant to Rule 2a-5 under the 1940 Act (“Rule 2a-5”) by
the Board. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and
most representative market, as determined by the Valuation Designee.
The
Gabelli Multimedia Trust Inc.
Additional
Fund Information (Continued) (Unaudited)
Portfolio
securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant
market, but may be fair valued by the Valuation Designee under procedures adopted pursuant to Rule 2a-5 if market conditions change
significantly after the close of the foreign market but prior to the close of business on the day the securities are being valued. Debt
instruments with remaining maturities of 60 days or less that are not credit impaired are valued at amortized cost, unless the Valuation
Designee determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued
as determined by the Valuation Designee. Debt instruments having a maturity greater than 60 days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security
is valued using the closing bid price. Futures contracts are valued at the closing settlement price of the exchange or board of trade
on which the applicable contract is traded.
Options
are valued using market quotations. When market quotations are not readily available, options are valued from broker quotes. In limited
circumstances when neither market quotations nor broker quotes are readily available, options are valued using a Black Scholes model.
Securities
and assets for which market quotations are not readily available are fair valued as determined by the Valuation Designee. Fair valuation
methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information
about the company; comparisons to the valuation and changes in valuation of similar securities, including a comparison of foreign securities
to the equivalent U.S. dollar value ADR securities at the close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
The
Fund obtains valuations on the basis of prices provided by a pricing service monitored by the Valuation Designee. All other investment
assets, including restricted and not readily marketable securities, are valued in good faith at fair value by the Valuation Designee
under procedures adopted pursuant to Rule 2a-5.
In
addition, whenever developments in one or more securities markets after the close of the principal markets for one or more portfolio
securities and before the time as of which the Fund determines its net asset value would, if such developments had been reflected in
such principal markets, likely have more than a minimal effect on the Fund’s net asset value per share, the Valuation Designee
may fair value such portfolio securities based on available market information as of the time the Fund determines its net asset value.
NYSE
Closings. The holidays (as observed) on which the NYSE American is closed, and therefore days upon which stockholders will not be able
to purchase or sell common stock currently are: New Year’s Day, Martin Luther King, Jr. Day, President’s Day, Good Friday,
Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day, and on the preceding
Friday or subsequent Monday when a holiday falls on a Saturday or Sunday, respectively.
THE
GABELLI MULTIMEDIA TRUST INC.
INCOME
TAX INFORMATION (Unaudited)
December 31,
2023
Cash
Dividends and Distributions
|
|
Payable
Date |
|
|
Record
Date |
|
|
Ordinary
Investment Income (a) |
|
|
Long
Term Capital Gains |
|
|
Return
of Capital (b) |
|
|
Total
Amount Paid Per Share (c) |
|
|
Dividend
Reinvestment Price |
|
Common
Stock |
|
|
|
|
|
|
|
|
|
|
03/24/23 |
|
|
03/17/23 |
|
|
|
— |
|
|
|
— |
|
|
$ |
0.22000 |
|
|
$ |
0.22000 |
|
|
$ |
5.39600 |
|
|
|
06/23/23 |
|
|
06/15/23 |
|
|
|
— |
|
|
|
— |
|
|
|
0.22000 |
|
|
|
0.22000 |
|
|
|
6.44100 |
|
|
|
09/22/23 |
|
|
09/15/23 |
|
|
|
— |
|
|
|
— |
|
|
|
0.22000 |
|
|
|
0.22000 |
|
|
|
6.06100 |
|
|
|
12/22/23 |
|
|
12/15/23 |
|
|
|
— |
|
|
|
— |
|
|
|
0.22000 |
|
|
|
0.22000 |
|
|
|
5.61450 |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
$ |
0.88000 |
|
|
$ |
0.88000 |
|
|
|
|
|
5.125%
Series E Cumulative Preferred Stock |
|
|
|
|
|
|
|
|
|
|
03/27/23 |
|
|
03/20/23 |
|
|
$ |
0.1340133 |
|
|
|
— |
|
|
$ |
0.1862992 |
|
|
$ |
0.3203125 |
|
|
|
|
|
|
|
06/26/23 |
|
|
06/16/23 |
|
|
|
0.1340133 |
|
|
|
— |
|
|
$ |
0.1862992 |
|
|
|
0.3203125 |
|
|
|
|
|
|
|
09/26/23 |
|
|
09/19/23 |
|
|
|
0.1340133 |
|
|
|
— |
|
|
$ |
0.1862992 |
|
|
|
0.3203125 |
|
|
|
|
|
|
|
12/26/23 |
|
|
12/18/23 |
|
|
|
0.1340133 |
|
|
|
— |
|
|
$ |
0.1862992 |
|
|
|
0.3203125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.5360532 |
|
|
|
— |
|
|
$ |
0.7451968 |
|
|
$ |
1.2812500 |
|
|
|
|
|
5.125%
Series G Cumulative Preferred Stock |
|
|
|
|
|
|
|
|
|
|
03/27/23 |
|
|
03/20/23 |
|
|
$ |
0.1340133 |
|
|
|
— |
|
|
$ |
0.1862992 |
|
|
$ |
0.3203125 |
|
|
|
|
|
|
|
06/26/23 |
|
|
06/16/23 |
|
|
|
0.1340133 |
|
|
|
— |
|
|
|
0.1862992 |
|
|
|
0.3203125 |
|
|
|
|
|
|
|
09/26/23 |
|
|
09/19/23 |
|
|
|
0.1340133 |
|
|
|
— |
|
|
|
0.1862992 |
|
|
|
0.3203125 |
|
|
|
|
|
|
|
12/26/23 |
|
|
12/18/23 |
|
|
|
0.1340133 |
|
|
|
— |
|
|
|
0.1862992 |
|
|
|
0.3203125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.5360532 |
|
|
|
— |
|
|
$ |
0.7451968 |
|
|
$ |
1.2812500 |
|
|
|
|
|
A
Form 1099-DIV has been mailed to all shareholders of record for the distributions mentioned above, setting forth specific amounts to
be included in your 2023 tax returns. Ordinary income distributions include net investment income and realized net short term capital
gains, if any. Ordinary income is reported in box 1a of Form 1099-DIV. Capital gain distributions are reported in box 2a of Form 1099-DIV.
Series
C Auction Rate Cumulative Preferred Stock
Auction
Rate Preferred Stock pays dividends weekly based on the maximum rate. The distributions derived from long term gains for the Auction
Rate Series C Cumulative Preferred Stock were $0.00.
Corporate
Dividends Received Deduction, Qualified Dividend Income, and U.S. Government Securities Income
The
Fund paid to common, 5.125% Series E Cumulative Preferred, and 5.125% Series G Cumulative Preferred shareholders ordinary income dividends,
of $0.00, $0.53605, and $0.53605, respectively, per share in 2023. The Fund paid weekly distributions to Series C Auction Rate Cumulative
Preferred shareholders at varying rates throughout the year, including an ordinary income dividend totaling $926.64327per share in 2023.
For the fiscal year ended December 31, 2023, 59.50% of the ordinary dividend qualified for the dividends received deduction available
to corporations, 100% of the ordinary income distribution was deemed qualified dividend income, and 26.86% of the ordinary income distribution
was qualified interest income. The percentage of ordinary income dividends paid by the Fund during 2023 derived from U.S. Treasury securities
was 25.00%. Such income is exempt from state and local tax in all states. However, many states, including New York and California, allow
a tax exemption for a portion of the income earned only if a mutual fund has invested at least 50% of its assets at the end of each quarter
of the Fund’s fiscal year in U.S. Government securities. The Fund did not meet this strict requirement in 2023. The percentage
of U.S. Government securities held as of December 31, 2023 was 6.7%.
THE
GABELLI MULTIMEDIA TRUST INC.
INCOME
TAX INFORMATION (Unaudited) (Continued)
December 31,
2023
Historical
Distribution Summary
|
|
|
|
|
Short
Term |
|
|
Long
Term |
|
|
|
|
|
|
|
|
Adjustment |
|
|
|
Investment |
|
|
Capital |
|
|
Capital |
|
|
Return
of |
|
|
Total |
|
|
to
Cost |
|
|
|
Income
(a) |
|
|
Gains
(a) |
|
|
Gains |
|
|
Capital
(b) |
|
|
Distributions (c) |
|
|
Basis
(d) |
|
Common
Shares |
|
|
|
|
2023 |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
$ |
0.88000 |
|
|
$ |
0.88000 |
|
|
$ |
0.88000 |
|
2022 |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
0.88000 |
|
|
|
0.88000 |
|
|
|
0.88000 |
|
2021 |
|
$ |
0.06720 |
|
|
$ |
0.00120 |
|
|
$ |
0.60640 |
|
|
|
0.20520 |
|
|
|
0.88000 |
|
|
|
0.20520 |
|
2020 |
|
|
0.02040 |
|
|
|
0.05160 |
|
|
|
0.76080 |
|
|
|
0.04720 |
|
|
|
0.88000 |
|
|
|
0.04720 |
|
2019 |
|
|
0.11360 |
|
|
|
0.04450 |
|
|
|
0.67310 |
|
|
|
0.04880 |
|
|
|
0.88000 |
|
|
|
0.04880 |
|
2018 |
|
|
0.01105 |
|
|
|
0.02757 |
|
|
|
0.86138 |
|
|
|
– |
|
|
|
0.90000 |
|
|
|
– |
|
2017 |
|
|
0.03060 |
|
|
|
0.00300 |
|
|
|
0.72872 |
|
|
|
0.11768 |
|
|
|
0.88000 |
|
|
|
0.11768 |
|
2016 |
|
|
0.06168 |
|
|
|
0.00268 |
|
|
|
0.73753 |
|
|
|
0.02811 |
|
|
|
0.83000 |
|
|
|
0.02811 |
|
2015 |
|
|
0.03269 |
|
|
|
0.02999 |
|
|
|
0.85399 |
|
|
|
0.02333 |
|
|
|
0.94000 |
|
|
|
0.02333 |
|
2014(e) |
|
|
0.01978 |
|
|
|
0.00107 |
|
|
|
0.88350 |
|
|
|
0.14565 |
|
|
|
1.05000 |
|
|
|
0.14565 |
|
5.760%
Series A Cumulative Preferred Shares |
|
|
|
|
2019 |
|
$ |
0.20497 |
|
|
$ |
0.08036 |
|
|
$ |
1.21467 |
|
|
|
– |
|
|
$ |
1.50000 |
|
|
|
– |
|
2018 |
|
|
0.01840 |
|
|
|
0.04600 |
|
|
|
1.43560 |
|
|
|
– |
|
|
|
1.50000 |
|
|
|
– |
|
2017 |
|
|
0.06023 |
|
|
|
0.00586 |
|
|
|
1.43390 |
|
|
|
– |
|
|
|
1.50000 |
|
|
|
– |
|
2016 |
|
|
0.11520 |
|
|
|
0.00520 |
|
|
|
1.37960 |
|
|
|
– |
|
|
|
1.50000 |
|
|
|
– |
|
2015 |
|
|
0.05350 |
|
|
|
0.04908 |
|
|
|
1.39742 |
|
|
|
– |
|
|
|
1.50000 |
|
|
|
– |
|
2014 |
|
|
0.03280 |
|
|
|
0.00160 |
|
|
|
1.46560 |
|
|
|
– |
|
|
|
1.50000 |
|
|
|
– |
|
Series
C Auction Rate Cumulative Preferred Stock |
|
|
|
|
2023 |
|
$ |
926.64327 |
|
|
|
– |
|
|
|
– |
|
|
$ |
1,288.17673 |
|
|
$ |
2,214.82000 |
|
|
$ |
1,288.17673 |
|
2022 |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
737.88000 |
|
|
|
737.88000 |
|
|
|
737.88000 |
|
2021 |
|
|
2.95600 |
|
|
$ |
0.05812 |
|
|
$ |
26.68587 |
|
|
|
– |
|
|
|
29.70000 |
|
|
|
– |
|
2020 |
|
|
4.33392 |
|
|
|
10.89238 |
|
|
|
160.82370 |
|
|
|
– |
|
|
|
176.05000 |
|
|
|
– |
|
2019 |
|
|
129.95266 |
|
|
|
50.95236 |
|
|
|
770.25498 |
|
|
|
– |
|
|
|
951.16000 |
|
|
|
– |
|
2018 |
|
|
10.16619 |
|
|
|
25.32982 |
|
|
|
791.50399 |
|
|
|
– |
|
|
|
827.00000 |
|
|
|
– |
|
2017 |
|
|
17.61700 |
|
|
|
1.71529 |
|
|
|
419.38771 |
|
|
|
– |
|
|
|
438.72000 |
|
|
|
– |
|
2016 |
|
|
13.43109 |
|
|
|
0.58542 |
|
|
|
160.60349 |
|
|
|
– |
|
|
|
174.62000 |
|
|
|
– |
|
2015 |
|
|
1.55581 |
|
|
|
1.42712 |
|
|
|
40.63707 |
|
|
|
– |
|
|
|
43.62000 |
|
|
|
– |
|
2014 |
|
|
0.68296 |
|
|
|
0.03701 |
|
|
|
30.51003 |
|
|
|
– |
|
|
|
31.23000 |
|
|
|
– |
|
5.125%
Series E Cumulative Preferred Stock |
|
|
|
|
2023 |
|
$ |
0.53605 |
|
|
|
– |
|
|
|
– |
|
|
$ |
0.74520 |
|
|
$ |
1.28125 |
|
|
$ |
0.74520 |
|
2022 |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
1.28125 |
|
|
|
1.28125 |
|
|
|
1.28125 |
|
2021 |
|
|
0.12752 |
|
|
$ |
0.00251 |
|
|
$ |
1.15122 |
|
|
|
– |
|
|
|
1.28125 |
|
|
|
– |
|
2020 |
|
|
0.03154 |
|
|
|
0.07927 |
|
|
|
1.17044 |
|
|
|
– |
|
|
|
1.28125 |
|
|
|
– |
|
2019 |
|
|
0.17507 |
|
|
|
0.06864 |
|
|
|
1.03753 |
|
|
|
– |
|
|
|
1.28125 |
|
|
|
– |
|
2018 |
|
|
0.01575 |
|
|
|
0.03924 |
|
|
|
1.22626 |
|
|
|
– |
|
|
|
1.28125 |
|
|
|
– |
|
2017 |
|
|
0.01286 |
|
|
|
0.00125 |
|
|
|
0.30620 |
|
|
|
– |
|
|
|
0.32031 |
|
|
|
– |
|
5.125%
Series G Cumulative Preferred Stock |
|
|
|
|
2023 |
|
$ |
0.53605 |
|
|
|
– |
|
|
|
– |
|
|
$ |
0.74520 |
|
|
$ |
1.28125 |
|
|
$ |
0.74520 |
|
2022 |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
1.28125 |
|
|
|
1.28125 |
|
|
|
1.28125 |
|
2021 |
|
|
0.12752 |
|
|
$ |
0.00251 |
|
|
$ |
1.15122 |
|
|
|
– |
|
|
|
1.28125 |
|
|
|
– |
|
2020 |
|
|
0.03207 |
|
|
|
0.08059 |
|
|
|
1.18994 |
|
|
|
– |
|
|
|
1.30260 |
|
|
|
– |
|
THE
GABELLI MULTIMEDIA TRUST INC.
INCOME
TAX INFORMATION (Unaudited) (Continued)
December 31,
2023
|
(a) |
Taxable
as ordinary income for Federal tax purposes. |
|
(b) |
Non-taxable. |
|
(c) |
Total
amounts may differ due to rounding. |
|
(d) |
Decrease
in cost basis. |
|
(e) |
On
November 6, 2017, the Fund also distributed Rights equivalent to $0.14 per common share based upon full subscription of all
issued shares. |
All
designations are based on financial information available as of the date of this annual report and, accordingly, are subject to change.
For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code and the regulations
thereunder.
AUTOMATIC
DIVIDEND REINVESTMENT
AND
VOLUNTARY CASH PURCHASE PLANS
Under
the Fund’s Automatic Dividend Reinvestment Plan and Voluntary Cash Purchase Plan (the “Plan”), a shareholder whose
shares of common stock are registered in his or her own name will have all distributions reinvested automatically by Computershare Trust
Company, N.A. (“Computershare”), which is an agent under the Plan, unless the shareholder elects to receive cash. Distributions with
respect to shares registered in the name of a broker-dealer or other nominee (that is, in “street name”) will be reinvested
by the broker or nominee in additional shares under the Plan, unless the service is not provided by the broker or nominee or the shareholder
elects to receive distributions in cash. Investors who own shares of common stock registered in street name should consult their broker-dealers
for details regarding reinvestment. All distributions to investors who do not participate in the Plan will be paid by check mailed directly
to the record holder by Computershare as dividend-disbursing agent.
Enrollment
in the Plan
It
is the policy of The Gabelli Multimedia Trust Inc. (the “Fund”) to automatically reinvest dividends payable to common stockholders.
As a “registered” stockholder you automatically become a participant in the Fund’s Automatic Dividend Reinvestment
Plan (the “Plan”). The Plan authorizes the Fund to credit common stock to participants upon an income dividend or a capital
gains distribution regardless of whether the shares are trading at a discount or a premium to net asset value. All distributions to stockholders
whose shares are registered in their own names will be automatically reinvested pursuant to the Plan in additional shares of the Fund.
Plan participants may send their common stock certificates to Computershare Trust Company, N.A. (“Computershare”) to be held
in their dividend reinvestment account. Registered stockholders wishing to receive their distributions in cash may submit this request
through the Internet, by telephone or in writing to:
The
Gabelli Multimedia Trust Inc.
c/o Computershare
P.O.
Box 43006
Providence,
RI 02940-3006
Telephone:
(800) 336-6983
Website: www.computershare.com/investor
Stockholders
requesting this cash election must include the stockholder’s name and address as they appear on the Fund’s records. Stockholders
with additional questions regarding the Plan or requesting a copy of the terms of the Plan, may contact Computershare at the website
or telephone number above.
If
your shares are held in the name of a broker, bank, or nominee, you should contact such institution. If such institution is not participating
in the Plan, your account will be credited with a cash dividend. In order to participate in the Plan through such institution, it may
be necessary for you to have your shares taken out of “street name” and re-registered in your own name. Once registered in
your own name your distributions will be automatically reinvested. Certain brokers participate in the Plan. Stockholders holding shares
in “street name” at participating institutions will have dividends automatically reinvested. Stockholders wishing a cash
dividend at such institution must contact their broker to make this change.
The
number of shares of common stocks distributed to participants in the Plan in lieu of cash dividends is determined in the following manner.
Under the Plan, whenever the market price of the Fund’s common stock is equal to or exceeds net asset value at the time shares
are valued for purposes of determining the number of shares equivalent to the cash dividends or capital gains distribution, participants
are issued shares of common stocks valued at the greater of (i) the net asset value as most recently determined or (ii) 95% of the then
current market price of the Fund’s common stocks The valuation date is the dividend or distribution payment date or, if that date
is not a New York Stock Exchange (“NYSE”) trading day, the next trading day. If the net asset value of the common stocks
at the time of valuation exceeds the market price of the common stocks, participants will receive shares from the Fund valued at market
price. If the Fund should declare a dividend or capital gains distribution payable only in cash, Computershare will buy shares of common
stocks in the open market, or on the NYSE or elsewhere, for the participants’ accounts, except that Computershare will endeavor
to terminate purchases in the open market and cause the Fund to issue shares at net asset value if, following the commencement of such
purchases, the market value of the common stocks exceeds the then current net asset value.
The
automatic reinvestment of dividends and capital gains distributions will not relieve participants of any income tax which may be payable
on such distributions. A participant in the Plan will be treated for federal income tax purposes as having received, on a dividend payment
date, a dividend or distribution in an amount equal to the cash the participant could have received instead of shares.
AUTOMATIC
DIVIDEND REINVESTMENT
AND
VOLUNTARY CASH PURCHASE PLANS
(Continued)
Voluntary
Cash Purchase Plan
The
Voluntary Cash Purchase Plan is yet another vehicle for our stockholders to increase their investment in the Fund. In order to participate
in the Voluntary Cash Purchase Plan, stockholders must have their shares registered in their own name.
Participants
in the Voluntary Cash Purchase Plan have the option of making additional cash payments to Computershare for investments in the Fund’s
shares at the then current market price. stockholders may send an amount from $250 to $10,000. Computershare will use these funds to
purchase shares in the open market on or about the 1st and 15th of each month. Computershare will charge each stockholder who participates
$0.75, plus a per share fee (currently $0.02 per share). Per share fees include any applicable brokerage commissions Computershare is
required to pay and fees for such purchases are expected to be less than the usual fees for such transactions. It is suggested that any
voluntary cash payments be sent to Computershare, P.O. Box 6006, Carol Stream, IL 60197-6006 such that Computershare receives such payments
approximately business days before the 1st and 15th of the month. Funds not received at least three business days before the investment
date shall be held for investment until the next purchase date. Computershare will wait up to three business days after receipt of a
check to ensure it receives good funds and will then seek to purchase shares for voluntary cash payments on the voluntary cash payment
date. A payment may be withdrawn without charge if notice is received by Computershare at least two business days before such payment
is to be invested.
Stockholders
wishing to liquidate shares held at Computershare may do so through the Internet, in writing or by telephone to the above-mentioned website,
address or telephone number. Include in your request your name, address, and account number. Computershare will sell such shares through
a broker-dealer selected by Computershare within 5 business days of receipt of the request. The sale price will equal the weighted average
price of all shares sold through the Plan on the day of the sale, less applicable fees. Participants should note that Computershare is
unable to accept instructions to sell on a specific date or at a specific price. The cost to liquidate shares is $2.50 per transaction
as well as the per share fee (currently $0.10 per share) Per share fees include any applicable brokerage commissions Computershare is
required to pay and are expected to be less than the usual fees for such transactions.
More
information regarding the Automatic Dividend Reinvestment Plan and Voluntary Cash Purchase Plan is available by calling (914) 921-5070
or by writing directly to the Fund.
The
Fund reserves the right to amend or terminate the Plan as applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to written notice of the change sent to the members of the Plan at least 30 days before the record date for such dividend
or distribution. The Plan also may be amended or terminated by Computershare on at least 30 days written notice to participants in the
Plan.
THE
GABELLI MULTIMEDIA TRUST INC.
One
Corporate Center
Rye,
NY 10580-1422
Portfolio
Management Team Biographies
Mario
J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer - Value Portfolios of GAMCO Investors, Inc. that
he founded in 1977, and Chief Investment Officer - Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management, Inc. He is also
Executive Chairman of Associated Capital Group, Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an
MBA degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.
Christopher
J. Marangi joined Gabelli in 2003 as a research analyst. Currently he is a Managing Director and Co-Chief Investment Officer for
GAMCO Investors, Inc.’s Value team. In addition, he serves as a portfolio manager of Gabelli Funds, LLC and manages several funds
within the Fund Complex. Mr. Marangi graduated magna cum laude and Phi Beta Kappa with a BA in Political Economy from Williams College
and holds an MBA degree with honors from Columbia Business School.
The
Net Asset Value per share appears in the Publicly Traded Funds column, under the heading “Specialized Equity Funds,” in Monday’s
The Wall Street Journal. It is also listed in Barron’s Mutual Funds/Closed End Funds section under the heading “Specialized
Equity Funds.”
The
Net Asset Value per share may be obtained each day by calling (914) 921-5070 or visiting www.gabelli.com.
The
NASDAQ symbol for the Net Asset Value is “XGGTX.”
Notice
is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may from time
to time, purchase its common shares in the open market when the Fund’s shares are trading at a discount of 5% or more from
the net asset value of the shares. The Fund may also, from time to time, purchase its preferred shares in the open market when the
preferred shares are trading at a discount to the liquidation value. |
|
(a) |
The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
|
(c) |
There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
|
(d) |
The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
|
Item 3. |
Audit Committee Financial Expert. |
As of the end of the period covered by the report, the registrant’s Board of Directors has determined that John Birch is qualified to serve as an audit committee financial expert serving on its audit committee and that he is “independent,” as defined by Item 3 of Form N-CSR.
|
Item 4. |
Principal Accountant Fees and Services. |
Audit Fees
|
(a) |
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $47,301 for 2022 and $48,247 for 2023. |
Audit-Related Fees
|
(b) |
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $0 for 2022 and $0 for 2023. |
Tax Fees
|
(c) |
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $4,550 for 2022 and $4,640 for 2023. Tax fees represent tax compliance services provided in connection with the review of the Registrant’s tax returns. |
All Other Fees
|
(d) |
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2022 and $0 for 2023. |
|
(e)(1) |
Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
|
|
|
|
|
Pre-Approval Policies and Procedures. The Audit Committee (“Committee”) of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent registered public accounting firm to the registrant and (ii) all permissible non-audit services to be provided by the independent registered public accounting firm to the Adviser, Gabelli Funds, LLC, and any affiliate of Gabelli Funds, LLC (“Gabelli”) that provides services to the registrant (a “Covered Services Provider”) if the independent registered public accounting firm’s engagement related directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson must report to the Committee, at its next regularly scheduled meeting after the Chairperson’s pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee’s pre-approval responsibilities to the other persons (other than Gabelli or the registrant’s officers). Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (ii) such services are promptly brought to the attention of the Committee and approved by the Committee or Chairperson prior to the completion of the audit. |
|
(e)(2) |
The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: |
|
(f) |
The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than fifty percent. |
|
(g) |
The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2022 and $0 for 2023. |
|
(h) |
The registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
|
(j) |
The registrant is not a foreign issuer. |
|
Item 5. |
Audit Committee of Listed Registrants. |
|
(a) |
The registrant has a separately designated audit committee consisting of the following members: John Birch, Werner J. Roeder, and Salvatore J. Zizza. |
|
(b) |
If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption from the listing standards for audit committees. |
|
(a) |
Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1(a) of this form. |
|
(b) |
Not applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing. |
|
Item 7. |
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
The Proxy Voting Policies are attached herewith.
SECTION HH
The Voting of Proxies on Behalf of Clients
(This section pertains to all affiliated SEC registered investment advisers)
Rule 206(4)-6 under the Investment Advisers Act of 1940 and Rule 30b1-4 under the Investment Company Act of 1940 require investment advisers to adopt written policies and procedures governing the voting of proxies on behalf of their clients.
These procedures will be used by GAMCO Asset Management Inc., Gabelli Funds, LLC, Gabelli & Company Investment Advisers, Inc., and Teton Advisors, Inc. (collectively, the “Advisers”) to determine how to vote proxies relating to portfolio securities held by their clients, including the procedures that the Advisers use when a vote presents a conflict between the interests of the shareholders of an investment company managed by one of the Advisers, on the one hand, and those of the Advisers; the principal underwriter; or any affiliated person of the investment company, the Advisers, or the principal underwriter. These procedures will not apply where the Advisers do not have voting discretion or where the Advisers have agreed to with a client to vote the client’s proxies in accordance with specific guidelines or procedures supplied by the client (to the extent permitted by ERISA).
|
I. |
Proxy Voting Committee |
The Proxy Voting Committee was originally formed in April 1989 for the purpose of formulating guidelines and reviewing proxy statements within the parameters set by the substantive proxy voting guidelines originally published in 1988 and updated periodically, a copy of which are appended as Exhibit A. The Committee will include representatives of Research, Administration, Legal, and the Advisers. Additional or replacement members of the Committee will be nominated by the Chairman and voted upon by the entire Committee.
Meetings are held on an as needed basis to form views on the manner in which the Advisers should vote proxies on behalf of their clients.
In general, the Director of Proxy Voting Services, using the Proxy Guidelines, and the analysts of GAMCO Investors, Inc. (“GBL”), will determine how to vote on each issue. For non-controversial matters, the Director of Proxy Voting Services may vote the proxy if the vote is: (1) consistent with the recommendations of the issuer’s Board of Directors and not contrary to the Proxy Guidelines; (2) consistent with the recommendations of the issuer’s Board of Directors and is a non-controversial issue not covered by the Proxy Guidelines; or (3) the vote is contrary to the recommendations of the Board of Directors but is consistent with the Proxy Guidelines. In those instances, the Director of Proxy Voting Services or the Chairman of the Committee may sign and date the proxy statement indicating how each issue will be voted.
Revised: August 16, 2023 | HH-1 | INTERNAL USE ONLY |
All matters identified by the Chairman of the Committee, the Director of Proxy Voting Services or the Legal Department as controversial, taking into account the recommendations of the analysts of GBL, will be presented to the Proxy Voting Committee. If the Chairman of the Committee, the Director of Proxy Voting Services or the Legal Department has identified the matter as one that (1) is controversial; (2) would benefit from deliberation by the Proxy Voting Committee; or (3) may give rise to a conflict of interest between the Advisers and their clients, the Chairman of the Committee will initially determine what vote to recommend that the Advisers should cast and the matter will go before the Committee.
|
A. |
Conflicts of Interest. |
The Advisers have implemented these proxy voting procedures in order to prevent conflicts of interest from influencing their proxy voting decisions. By following the Proxy Guidelines and the analysts of GBL, the Advisers are able to avoid, wherever possible, the influence of potential conflicts of interest. Nevertheless, circumstances may arise in which one or more of the Advisers are faced with a conflict of interest or the appearance of a conflict of interest in connection with its vote. In general, a conflict of interest may arise when an Adviser knowingly does business with an issuer, and may appear to have a material conflict between its own interests and the interests of the shareholders of an investment company managed by one of the Advisers regarding how the proxy is to be voted. A conflict also may exist when an Adviser has actual knowledge of a material business arrangement between an issuer and an affiliate of the Adviser.
In practical terms, a conflict of interest may arise, for example, when a proxy is voted for a company that is a client of one of the Advisers, such as GAMCO Asset Management Inc. A conflict also may arise when a client of one of the Advisers has made a shareholder proposal in a proxy to be voted upon by one or more of the Advisers. The Director of Proxy Voting Services, together with the Legal Department, will scrutinize all proxies for these or other situations that may give rise to a conflict of interest with respect to the voting of proxies.
|
B. |
Operation of Proxy Voting Committee |
For matters submitted to the Committee, each member of the Committee will receive, prior to the meeting, a copy of the proxy statement, a summary of any views provided by the Chief Investment Officer and any recommendations by GBL analysts. The Chief Investment Officer or the GBL analysts may be invited to present their viewpoints. If the Director of Proxy Voting Services or the Legal Department believe that the matter before the committee is one with respect to which a conflict of interest may exist between the Advisers and their clients, counsel may provide an
Revised: August 16, 2023 | HH-2 | INTERNAL USE ONLY |
opinion to the Committee concerning the conflict. If the matter is one in which the interests of the clients of one or more of the Advisers may diverge, counsel may so advise and the Committee may make different recommendations as to different clients. For any matters where the recommendation may trigger appraisal rights, counsel may provide an opinion concerning the likely risks and merits of such an appraisal action.
Each matter submitted to the Committee will be determined by the vote of a majority of the members present at the meeting. Should the vote concerning one or more recommendations be tied in a vote of the Committee, the Chairman of the Committee will cast the deciding vote. The Committee will notify the proxy department of its decisions and the proxies will be voted accordingly.
Although the Proxy Guidelines express the normal preferences for the voting of any shares not covered by a contrary investment guideline provided by the client, the Committee is not bound by the preferences set forth in the Proxy Guidelines and will review each matter on its own merits. The Advisers subscribe to Institutional Shareholder Services Inc (“ISS”) and Glass Lewis & Co., LLC (“Glass Lewis”), which supply current information on companies, matters being voted on, regulations, trends in proxy voting and information on corporate governance issues. The information provided by ISS and GL is for informational purposes only.
If the vote cast either by the analyst or as a result of the deliberations of the Proxy Voting Committee runs contrary to the recommendation of the Board of Directors of the issuer, the matter may be referred to legal counsel to determine whether an amendment to the most recently filed Schedule 13D is appropriate.
|
II. |
Social Issues and Other Client Guidelines |
If a client has provided and the Advisers have accepted special instructions relating to the voting of proxies, they should be noted in the client’s account file and forwarded to the proxy department. This is the responsibility of the investment professional or sales assistant for the client. In accordance with Department of Labor guidelines, the Advisers’ policy is to vote on behalf of ERISA accounts in the best interest of the plan participants with regard to social issues that carry an economic impact. Where an account is not governed by ERISA, the Advisers will vote shares held on behalf of the client in a manner consistent with any individual investment/voting guidelines provided by the client. Otherwise the Advisers may abstain with respect to those shares.
Specific to the Gabelli SRI Fund and the Gabelli Love Our Planet & People ETF, the Proxy Voting Committee will rely on the advice of the portfolio managers of the Gabelli SRI Fund and the Gabelli Love Our Planet & People ETF to provide voting recommendations on the securities held in the portfolios.
Revised: August 16, 2023 | HH-3 | INTERNAL USE ONLY |
|
III. |
Client Retention of Voting Rights |
If a client chooses to retain the right to vote proxies or if there is any change in voting authority, the following should be notified by the investment professional or sales assistant for the client.
- Operations
- Proxy Department
- Investment professional assigned to the account
In the event that the Board of Directors (or a Committee thereof) of one or more of the investment companies managed by one of the Advisers has retained direct voting control over any security, the Proxy Voting Department will provide each Board Member (or Committee member) with a copy of the proxy statement together with any other relevant information.
|
IV. |
Proxies of Certain Non-U.S. Issuers |
Proxy voting in certain countries requires “share-blocking.” Shareholders wishing to vote their proxies must deposit their shares shortly before the date of the meeting with a designated depository. During the period in which the shares are held with a depository, shares that will be voted at the meeting cannot be sold until the meeting has taken place and the shares are returned to the clients’ custodian. Absent a compelling reason to the contrary, the Advisers believe that the benefit to the client of exercising the vote is outweighed by the cost of voting and therefore, the Advisers will not typically vote the securities of non-U.S. issuers that require share-blocking.
In addition, voting proxies of issuers in non-U.S. markets may also give rise to a number of administrative issues or give rise to circumstances under which voting would impose a cost (real or implied) on its client which may cause the Advisers to abstain from voting such proxies. For example, the Advisers may receive the notices for shareholder meetings without adequate time to consider the proposals in the proxy or after the cut-off date for voting. Other markets require the Advisers to provide local agents with power of attorney prior to implementing their respective voting instructions on the proxy. Other markets may require disclosure of certain ownership information in excess of what is required to vote in the U.S. market. Although it is the Advisers’ policies to vote the proxies for its clients for which they have proxy voting authority, in the case of issuers in non-U.S. markets, we vote client proxies on a best efforts basis.
The Proxy Voting Department will retain a record of matters voted upon by the Advisers for their clients. The Advisers will supply information on how they voted a client’s proxy upon request from the client.
Revised: August 16, 2023 | HH-4 | INTERNAL USE ONLY |
The complete voting records for each registered investment company (the “Fund”) that is managed by the Advisers will be filed on Form N-PX for the twelve months ended June 30th, no later than August 31st of each year. A description of the Fund’s proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to Gabelli Funds, LLC at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
The Advisers’ proxy voting records will be retained in compliance with Rule 204-2 under the Investment Advisers Act.
1. Custodian banks, outside brokerage firms and clearing firms are responsible for forwarding proxies directly to the Advisers.
Proxies are received in one of two forms:
|
● |
Shareholder Vote Instruction Forms (“VIFs”) - Issued by Broadridge Financial Solutions, Inc. (“Broadridge”). Broadridge is an outside service contracted by the various institutions to issue proxy materials. |
|
● |
Proxy cards which may be voted directly. |
2. Upon receipt of the proxy, the number of shares each form represents is logged into the proxy system, electronically or manually, according to security.
3. Upon receipt of instructions from the proxy committee, the votes are cast and recorded for each account.
Records have been maintained on the ProxyEdge system.
ProxyEdge records include:
Security Name and CUSIP Number
Date and Type of Meeting (Annual, Special, Contest)
Directors’ Recommendation (if any)
How the Adviser voted for the client on item
4. VIFs are kept alphabetically by security. Records for the current proxy season are located in the Proxy Voting Department office. In preparation for the upcoming season, files are transferred to an offsite storage facility during January/February.
5. If a proxy card or VIF is received too late to be voted in the conventional matter, every attempt is made to vote including:
Revised: August 16, 2023 | HH-5 | INTERNAL USE ONLY |
|
● |
When a solicitor has been retained, the solicitor is called. At the solicitor’s direction, the proxy is faxed or sent electronically. |
|
● |
In some circumstances VIFs can be faxed or sent electronically to Broadridge up until the time of the meeting. |
6. In the case of a proxy contest, records are maintained for each opposing entity.
7. Voting in Person
a) At times it may be necessary to vote the shares in person. In this case, a “legal proxy” is obtained in the following manner:
|
● |
Banks and brokerage firms using the services at Broadridge: |
Broadridge is notified that we wish to vote in person. Broadridge issues individual legal proxies and sends them back via email or overnight (or the Adviser can pay messenger charges). A lead-time of at least two weeks prior to the meeting is needed to do this. Alternatively, the procedures detailed below for banks not using Broadridge may be implemented.
|
● |
Banks and brokerage firms issuing proxies directly: |
The bank is called and/or faxed and a legal proxy is requested.
All legal proxies should appoint:
“Representative of [Adviser name] with full power of substitution.”
b) The legal proxies are given to the person attending the meeting along with the limited power of attorney.
Revised: August 16, 2023 | HH-6 | INTERNAL USE ONLY |
Appendix A
Proxy Guidelines
PROXY VOTING GUIDELINES
General Policy Statement
It is the policy of GAMCO Investors, Inc, and its affiliated advisers (collectively “the Advisers”) to vote in the best economic interests of our clients. As we state in our Magna Carta of Shareholders Rights, established in May 1988, we are neither for nor against management. We are for shareholders.
At our first proxy committee meeting in 1989, it was decided that each proxy statement should be evaluated on its own merits within the framework first established by our Magna Carta of Shareholders Rights. The attached guidelines serve to enhance that broad framework.
We do not consider any issue routine. We take into consideration all of our research on the company, its directors, and their short and long-term goals for the company. In cases where issues that we generally do not approve of are combined with other issues, the negative aspects of the issues will be factored into the evaluation of the overall proposals but will not necessitate a vote in opposition to the overall proposals.
Board of Directors
We do not consider the election of the Board of Directors a routine issue. Each slate of directors is evaluated on a case-by-case basis.
Factors taken into consideration include:
|
● |
Historical responsiveness to shareholders |
This may include such areas as:
- Paying greenmail
- Failure to adopt shareholder
resolutions receiving a majority of shareholder votes
|
● |
Nominating committee in place |
|
● |
Number of outside directors on the board |
Revised: August 16, 2023 | HH-7 | INTERNAL USE ONLY |
Selection of Auditors
In general, we support the Board of Directors’ recommendation for auditors.
Blank Check Preferred Stock
We oppose the issuance of blank check preferred stock.
Blank check preferred stock allows the company to issue stock and establish dividends, voting rights, etc. without further shareholder approval.
Classified Board
A classified board is one where the directors are divided into classes with overlapping terms. A different class is elected at each annual meeting.
While a classified board promotes continuity of directors facilitating long range planning, we feel directors should be accountable to shareholders on an annual basis. We will look at this proposal on a case-by-case basis taking into consideration the board’s historical responsiveness to the rights of shareholders.
Where a classified board is in place we will generally not support attempts to change to an annually elected board.
When an annually elected board is in place, we generally will not support attempts to classify the board.
Increase Authorized Common Stock
The request to increase the amount of outstanding shares is considered on a case-by-case basis.
Factors taken into consideration include:
|
● |
Future use of additional shares |
- Stock split
- Stock option or other executive
compensation plan
- Finance growth of
company/strengthen balance sheet
- Aid in restructuring
- Improve credit rating
- Implement a poison pill or other
takeover defense
|
● |
Amount of stock currently authorized but not yet issued or reserved for stock option plans |
Revised: August 16, 2023 | HH-8 | INTERNAL USE ONLY |
|
● |
Amount of additional stock to be authorized and its dilutive effect |
We will support this proposal if a detailed and verifiable plan for the use of the additional shares is contained in the proxy statement.
Confidential Ballot
We support the idea that a shareholder’s identity and vote should be treated with confidentiality.
However, we look at this issue on a case-by-case basis.
In order to promote confidentiality in the voting process, we endorse the use of independent Inspectors of Election.
Cumulative Voting
In general, we support cumulative voting.
Cumulative voting is a process by which a shareholder may multiply the number of directors being elected by the number of shares held on record date and cast the total number for one candidate or allocate the voting among two or more candidates.
Where cumulative voting is in place, we will vote against any proposal to rescind this shareholder right.
Cumulative voting may result in a minority block of stock gaining representation on the board. When a proposal is made to institute cumulative voting, the proposal will be reviewed on a case-by-case basis. While we feel that each board member should represent all shareholders, cumulative voting provides minority shareholders an opportunity to have their views represented.
Director Liability and Indemnification
We support efforts to attract the best possible directors by limiting the liability and increasing the indemnification of directors, except in the case of insider dealing.
Revised: August 16, 2023 | HH-9 | INTERNAL USE ONLY |
Equal Access to the Proxy
The SEC’s rules provide for shareholder resolutions. However, the resolutions are limited in scope and there is a 500 word limit on proponents’ written arguments. Management has no such limitations. While we support equal access to the proxy, we would look at such variables as length of time required to respond, percentage of ownership, etc.
Fair Price Provisions
Charter provisions requiring a bidder to pay all shareholders a fair price are intended to prevent two-tier tender offers that may be abusive. Typically, these provisions do not apply to board-approved transactions.
We support fair price provisions because we feel all shareholders should be entitled to receive the same benefits.
Reviewed on a case-by-case basis.
Golden Parachutes
Golden parachutes are severance payments to top executives who are terminated or demoted after a takeover.
We support any proposal that would assure management of its own welfare so that they may continue to make decisions in the best interest of the company and shareholders even if the decision results in them losing their job. We do not, however, support excessive golden parachutes. Therefore, each proposal will be decided on a case-by- case basis.
Anti-Greenmail Proposals
We do not support greenmail. An offer extended to one shareholder should be extended to all shareholders equally across the board.
Revised: August 16, 2023 | HH-10 | INTERNAL USE ONLY |
Limit Shareholders’ Rights to Call Special Meetings
We support the right of shareholders to call a special meeting.
Reviewed on a case-by-case basis.
Consideration of Nonfinancial Effects of a Merger
This proposal releases the directors from only looking at the financial effects of a merger and allows them the opportunity to consider the merger’s effects on employees, the community, and consumers.
As a fiduciary, we are obligated to vote in the best economic interests of our clients. In general, this proposal does not allow us to do that. Therefore, we generally cannot support this proposal.
Reviewed on a case-by-case basis.
Mergers, Buyouts, Spin-Offs, Restructurings
Each of the above is considered on a case-by-case basis. According to the Department of Labor, we are not required to vote for a proposal simply because the offering price is at a premium to the current market price. We may take into consideration the long term interests of the shareholders.
Military Issues
Shareholder proposals regarding military production must be evaluated on a purely economic set of criteria for our ERISA clients. As such, decisions will be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to the client’s direction when applicable. Where no direction has been given, we will vote in the best economic interests of our clients. It is not our duty to impose our social judgment on others.
Northern Ireland
Shareholder proposals requesting the signing of the MacBride principles for the purpose of countering the discrimination of Catholics in hiring practices must be evaluated on a purely economic set of criteria for our ERISA clients. As such, decisions will be made on a case-by-case basis.
Revised: August 16, 2023 | HH-11 | INTERNAL USE ONLY |
In voting on this proposal for our non-ERISA clients, we will vote according to client direction when applicable. Where no direction has been given, we will vote in the best economic interests of our clients. It is not our duty to impose our social judgment on others.
Opt Out of State Anti-Takeover Law
This shareholder proposal requests that a company opt out of the coverage of the state’s takeover statutes. Example: Delaware law requires that a buyer must acquire at least 85% of the company’s stock before the buyer can exercise control unless the board approves.
We consider this on a case-by-case basis. Our decision will be based on the following:
|
● |
Management history of responsiveness to shareholders |
|
● |
Other mitigating factors |
Poison Pill
In general, we do not endorse poison pills.
In certain cases where management has a history of being responsive to the needs of shareholders and the stock is very liquid, we will reconsider this position.
Reincorporation
Generally, we support reincorporation for well-defined business reasons. We oppose reincorporation if proposed solely for the purpose of reincorporating in a state with more stringent anti-takeover statutes that may negatively impact the value of the stock.
Stock Incentive Plans
Director and Employee Stock incentive plans are an excellent way to attract, hold and motivate directors and employees. However, each incentive plan must be evaluated on its own merits, taking into consideration the following:
|
● |
Dilution of voting power or earnings per share by more than 10%. |
|
● |
Kind of stock to be awarded, to whom, when and how much. |
Revised: August 16, 2023 | HH-12 | INTERNAL USE ONLY |
|
● |
Amount of stock already authorized but not yet issued under existing stock plans. |
|
● |
The successful steps taken by management to maximize shareholder value. |
Supermajority Vote Requirements
Supermajority vote requirements in a company’s charter or bylaws require a level of voting approval in excess of a simple majority of the outstanding shares. In general, we oppose supermajority-voting requirements. Supermajority requirements often exceed the average level of shareholder participation. We support proposals’ approvals by a simple majority of the shares voting.
Reviewed on a case-by-case basis.
Limit Shareholders Right to Act by Written Consent
Written consent allows shareholders to initiate and carry on a shareholder action without having to wait until the next annual meeting or to call a special meeting. It permits action to be taken by the written consent of the same percentage of the shares that would be required to effect proposed action at a shareholder meeting.
Reviewed on a case-by-case basis.
“Say-on-Pay” / “Say-When-on-Pay” / “Say-on-Golden-Parachutes”
Required under the Dodd-Frank Act; these proposals are non-binding advisory votes on executive compensation. We will generally vote with the Board of Directors’ recommendation(s) on advisory votes on executive compensation (“Say-on-Pay”), advisory votes on the frequency of voting on executive compensation (“Say-When-on-Pay”) and advisory votes relating to extraordinary transaction executive compensation (“Say-on-Golden-Parachutes”). In those instances when we believe that it is in our clients’ best interest, we may abstain or vote against executive compensation and/or the frequency of votes on executive compensation and/or extraordinary transaction executive compensation advisory votes.
Proxy Access
Proxy access is a tool used to attempt to promote board accountability by requiring that a company’s proxy materials contain not only the names of management nominees, but also any candidates nominated by long-term shareholders holding at least a certain stake in the company. We will review proposals regarding proxy access on a case-by-case basis taking into account the provisions of the proposal, the company’s current governance structure, the successful steps taken by management to maximize shareholder value, as well as other applicable factors.
Revised: August 16, 2023 | HH-13 | INTERNAL USE ONLY |
|
Item 8. |
Portfolio Managers of Closed-End Management Investment Companies. |
PORTFOLIO MANAGERS
Mario J. Gabelli, CFA, is Chairman, Chief Executive Officer, and Chief Investment Officer – Value Portfolios of GAMCO Investors, Inc. that he founded in 1977, and Chief Investment Officer – Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. He is also Executive Chairman of the Board of Directors of Associated Capital Group, Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia Business School, and Honorary Doctorates from Fordham University and Roger Williams University.
Christopher J. Marangi joined Gabelli in 2003
as a research analyst. He currently serves as Co-Chief Investment Officer of GAMCO Investors, Inc.’s Value team and a portfolio
manager of Gabelli Funds, LLC. He manages several funds within the Gabelli/GAMCO Fund Complex. Mr. Marangi graduated magna cum laude
and Phi Beta Kappa with a BA in Political Economy from Williams College and holds an MBA with honors from Columbia Business School.
MANAGEMENT OF OTHER ACCOUNTS
The table below shows the number of other
accounts managed by the portfolio managers and the total assets in each of the following categories: registered investment
companies, other paid investment vehicles and other accounts as of December 31, 2023. For each category, the table also shows
the number of accounts and the total assets in the accounts with respect to which the advisory fee is based on account
performance.
Name of Portfolio Manager |
Type of Accounts |
Total
No. of Accounts Managed |
Total Assets |
No. of Accounts where Advisory Fee is Based on Performance |
Total Assets in Accounts where Advisory Fee is Based on Performance |
Mario J. Gabelli, CFA |
Registered Investment Companies: |
22 |
$16.2 billion |
4 |
$5.1 billion |
|
Other Pooled Investment Vehicles: |
7 |
$895.8 million |
7 |
$879 million |
|
Other Accounts: |
834 |
$6.5 billion |
0 |
$0 |
Christopher J. Marangi |
Registered Investment Companies: |
8 |
$6.7 billion |
2 |
$4.7 billion |
|
Other Pooled Investment Vehicles: |
1 |
$4.4 million |
0 |
$0 |
|
Other Accounts: |
259 |
$701.2 million |
0 |
$0 |
POTENTIAL CONFLICTS OF INTEREST
Actual or apparent conflicts of interest may arise when a Portfolio Manager also has day-to-day management responsibilities with respect to one or more other accounts. These potential conflicts include:
ALLOCATION OF LIMITED TIME AND ATTENTION.
Because the portfolio managers manage many accounts, they may not be able to formulate as complete a strategy or identify equally attractive
investment opportunities for each of those accounts as might be the case if they were to devote all of their attention to the management
of only a few accounts.
ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES.
If the portfolio managers identify an investment opportunity that may be suitable for multiple accounts, the Fund may not be able to take
full advantage of that opportunity because the opportunity may be allocated among all or many of these accounts or other accounts managed
primarily by other portfolio managers of the Adviser, and their affiliates.
SELECTION OF BROKER/DEALERS. Because of
Mr. Gabelli’s indirect majority ownership interest in G.research, LLC, he may have an incentive to use G.research to execute portfolio
transactions for a Fund.
PURSUIT OF DIFFERING STRATEGIES. At times,
the portfolio managers may determine that an investment opportunity may be appropriate for only some of the accounts for which they exercises
investment responsibility, or may decide that certain of these accounts should take differing positions with respect to a particular security.
In these cases, the portfolio managers may execute differing or opposite transactions for one or more accounts which may affect the market
price of the security or the execution of the transaction, or both, to the detriment of one or more of their accounts.
VARIATION IN COMPENSATION. A conflict of
interest may arise where the financial or other benefits available to the portfolio manager differ among the accounts that they manage.
If the structure of the Adviser’s management fee or the portfolio manager’s compensation differs among accounts (such as where certain
accounts pay higher management fees or performance-based management fees), the portfolio managers may be motivated to favor certain accounts
over others. The portfolio managers also may be motivated to favor accounts in which they have an investment interest, or in which the
Adviser, or its affiliates have investment interests. In Mr. Gabelli’s case, the Adviser’s compensation and expenses for the
Fund are marginally greater as a percentage of assets than for certain other accounts and are less than for certain other accounts managed
by Mr. Gabelli, while his personal compensation structure varies with near-term performance to a greater degree in certain performance
fee based accounts than with on-performance based accounts. In addition, he has investment interests in several of the funds managed by
the Adviser and its affiliates.
The Adviser, and the Funds have adopted compliance policies and procedures that are designed to address the various conflicts of interest that may arise for the Adviser and their staff members. However, there is no guarantee that such policies and procedures will be able to detect and prevent every situation in which an actual or potential conflict may arise.
COMPENSATION STRUCTURE FOR MARIO J. GABELLI
Mr. Gabelli receives incentive-based variable
compensation based on a percentage of net revenues received by the Adviser for managing the Fund. Net revenues are determined by deducting
from gross investment management fees the firm’s expenses (other than Mr. Gabelli’s compensation) allocable to this Fund. Four closed-end
registered investment companies (including this Fund) managed by Mr. Gabelli have arrangements whereby the Adviser will only receive its
investment advisory fee attributable to the liquidation value of outstanding preferred stock (and Mr. Gabelli would only receive his percentage
of such advisory fee) if certain performance levels are met. Additionally, he receives similar incentive based variable compensation for
managing other accounts within the firm and its affiliates. This method of compensation is based on the premise that superior long-term
performance in managing a portfolio should be rewarded with higher compensation as a result of growth of assets through appreciation and
net investment activity. The level of
compensation is not determined with specific reference to the performance of any account against
any specific benchmark. One of the other closed-end registered investment companies managed by Mr. Gabelli has a performance (fulcrum)
fee arrangement for which his compensation is adjusted up or down based on the performance of the investment company relative to an index.
Mr. Gabelli manages other accounts with performance fees. Compensation for managing these accounts has two components. One component is
based on a percentage of net revenues to the investment adviser for managing the account. The second component is based on absolute performance
of the account, with respect to which a percentage of such performance fee is paid to Mr. Gabelli. As an executive officer of the Adviser’s
parent company, GAMI, Mr. Gabelli also receives ten percent of the net operating profits of the parent company. He receives no base salary,
no annual bonus, and no stock options.
COMPENSATION STRUCTURE FOR PORTFOLIO MANAGERS
OF THE ADVISER OTHER THAN MARIO GABELLI
The compensation of the Portfolio Managers for
the Fund is structure to enable the Adviser to attract and retain highly qualified professionals in a competitive environment. The Portfolio
Managers receive a compensation package that includes a minimum draw or base salary, equity-based incentive compensation via awards of
restricted stock, and incentive-based variable compensation based on a percentage of net revenue received by the Adviser for managing
a Fund to the extent that the amount exceeds a minimum level of compensation. Net revenues are determined by deducting from gross investment
management fees certain of the firm’s expenses (other than the respective Portfolio Manager’s compensation) allocable to the
respective Fund (the incentive-based variable compensation for managing other accounts is also based on a percentage of net revenues to
the investment adviser for managing the account). This method of compensation is based on the premise that superior long-term performance
in managing a portfolio should be rewarded with higher compensation as a result of growth of assets through appreciation and net investment
activity. The level of equity-based incentive and incentive-based variable compensation is based on an evaluation by the Adviser’s
parent, GAMI, of quantitative and qualitative performance evaluation criteria. This evaluation takes into account, in a broad sense, the
performance of the accounts managed by the Portfolio Manager, but the level of compensation is not determined with specific reference
to the performance of any account against any specific benchmark. Generally, greater consideration is given to the performance of larger
accounts and to longer term performance over smaller accounts and short-term performance.
OWNERSHIP OF SHARES IN THE FUND
Mario J. Gabelli and Christopher J. Marangi each
owned over $1,000,000 and $1-$10,000, respectively, of shares of the Trust as of December 31, 2023.
|
Item 9. |
Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
REGISTRANT PURCHASES OF EQUITY SECURITIES
Period |
(a) Total Number of Shares (or Units) Purchased |
(b) Average Price Paid per Share (or Unit) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
Month
#1 07/01/2023 through 07/31/2023 |
Common – N/A
Preferred Series G – 32,095
Preferred Series E – 8,888 |
Common – N/A
Preferred Series G – $23.61
Preferred Series E – $23.58 |
Common – N/A
Preferred Series G – 32,095
Preferred Series E – 8,888 |
Common – 27,893,139 Preferred Series G – 1,591,747 - 32,095 = 1,559,652
Preferred Series E – 1,775,972 - 8,888 = 1,767,084 |
Month
#2 08/01/2023 through 08/31/2023 |
Common – N/A
Preferred Series G 7,126
Preferred Series E – 6,404 |
Common – N/A
Preferred Series G – $23.50
Preferred Series E – $23.46 |
Common – N/A
Preferred Series G 7,126
Preferred Series E – 6,404 |
Common – 27,893,139 Preferred Series G
– 1,559,652 - 7,126 = 1,552,526
Preferred Series E – 1,767,084 - 6,404 = 1,760,680 |
Month
#3 09/01/2023 through 09/30/2023 |
Common – N/A
Preferred Series G – 9,414
Preferred Series E – 4,920 |
Common – N/A
Preferred Series G - $23.30
Preferred Series E – $22.66 |
Common – N/A
Preferred Series G – 9,414
Preferred Series E – 4,920 |
Common – 27,979,216 Preferred Series G – 1,552,526 -9,414 = 1,543,112
Preferred
Series E – 1,760,680 - 4,920 = 1,755,760 |
Month
#4 10/01/2023 through 10/31/2023 |
Common – N/A
Preferred Series G – 35,498
Preferred Series E – 8,027 |
Common – N/A
Preferred Series G – $22.89
Preferred Series E – $22.95 |
Common – N/A
Preferred Series G – 35,498
Preferred Series E – 8,027 |
Common – 27,979,216 Preferred Series G
1,543,112 - 35,498 = 1,507,614
Preferred Series E – 1,755,760 - 8,027 = 1,747,733 |
Month
#5 11/01/2023 through 11/30/2023 |
Common – N/A
Preferred Series G – 7,823
Preferred Series E 4,489 |
Common – N/A
Preferred Series G – $22.98
Preferred Series E – $23.08 |
Common – N/A
Preferred Series G 7,823
Preferred Series E 4,489 |
Common
– 27,979,216 Preferred Series G – 1,507,614 - 7,823 = 1,499,791
Preferred Series E – 1,747,733 - 4,489 = 1,743,244 |
Month
#6 12/01/2023 through 12/31/2023 |
Common – N/A
Preferred Series G 43,685
Preferred Series E – 24,310 |
Common – N/A
Preferred Series G – $23.12
Preferred Series E – $23.16 |
Common – N/A
Preferred Series G 43,685
Preferred Series E – 24,310 |
Common – 28,073,830 Preferred Series G – 1,499,791 - 43,685 = 1,456,106
Preferred Series E – 1,743,244 - 24,310 = 1,718,934 |
Total |
Common – N/A
Preferred Series G – 135,641
Preferred Series E – 57,038 |
Common – N/A
Preferred Series G – $23.17
Preferred Series E – $23.29 |
Common – N/A
Preferred Series G – 135,641
Preferred Series E – 57,038 |
N/A |
Footnote columns (c) and (d) of the table, by disclosing the following information in the aggregate for all plans or programs publicly announced:
|
a. |
The date each plan or program was announced – The notice of the potential repurchase of common and preferred shares occurs semiannually in the Fund’s reports to shareholders in accordance with Section 23(c) of the Investment Company Act of 1940, as amended. |
|
b. |
The dollar amount (or share or unit amount) approved – Any or all common shares outstanding may be repurchased when the Fund’s common shares are trading at a discount of 7.5% or more from the net asset value of the shares. Any or all preferred shares outstanding may be repurchased when the Fund’s preferred shares are trading at a discount to the liquidation value of $25.00. |
|
c. |
The expiration date (if any) of each plan or program – The Fund’s repurchase plans are ongoing. |
|
d. |
Each plan or program that has expired during the period covered by the table – The Fund’s repurchase plans are ongoing. |
|
e. |
Each plan or program the registrant has determined to terminate prior to expiration, or under which the registrant does not intend to make further purchases. – The Fund’s repurchase plans are ongoing. |
|
Item 10. |
Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s Board of Directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
|
Item 11. |
Controls and Procedures. |
|
(a) |
The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
|
(b) |
There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
|
Item 12. |
Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
|
(a) |
If the registrant is a closed-end management investment company, provide the following dollar amounts of income and fees/compensation related to the securities lending activities of the registrant during its most recent fiscal year: |
|
(1) |
Gross income from securities lending activities; $0 |
|
(2) |
All fees and/or compensation for each of the following securities lending activities and related services: any share of revenue generated by the securities lending program paid to the securities lending agent(s) (“revenue split”); fees paid for cash collateral management services (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split; administrative fees that are not included in the revenue split; fees for indemnification that are not included in the revenue split; rebates paid to borrowers; and any other fees relating to the securities lending program that are not included in the revenue split, including a description of those other fees; $0 |
|
(3) |
The aggregate fees/compensation disclosed pursuant to paragraph (2); $0 and |
|
(4) |
Net income from securities lending activities (i.e., the dollar amount in paragraph (1) minus the dollar amount in paragraph (3)). $0 |
|
(b) |
If the registrant is a closed-end management investment company, describe the services provided to the registrant by the securities lending agent in the registrant’s most recent fiscal year. N/A |
(a)(2)(1) |
|
Not applicable. |
(a)(2)(2) |
|
Not applicable. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) |
The Gabelli Multimedia Trust Inc. |
|
|
|
|
By (Signature and Title)* |
/s/ John C. Ball |
|
|
John C. Ball, Principal Executive Officer |
|
|
|
|
Date |
March 8, 2024 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* |
/s/ John C. Ball |
|
|
John C. Ball, Principal Executive Officer |
|
|
|
|
Date |
March 8, 2024 |
|
By (Signature and Title)* |
/s/ John C. Ball |
|
|
John C. Ball, Principal Financial Officer and Treasurer |
|
|
|
|
Date |
March 8, 2024 |
|
|
* |
Print the name and title of each signing officer under his or her signature. |
EX-99.CODE ETH
SECTION S
Gabelli Funds, LLC
GAMCO Asset Management Inc.
G.research, LLC.
G.distributors, LLC
Gabelli & Partners, LLC
Gabelli & Company Investment Advisers, Inc.
The Code of Ethics applies to each Registered Investment Company or Private Fund Client or series thereof (each of which is considered to be a Company for this purpose) for which any of the Companies listed above presently or hereafter provides investment advisory or principal underwriting services, other than a money market fund or a fund that does not invest in Securities.
Introduction
This Code of Ethics establishes rules of conduct for persons who are associated with the companies named above or with the registered investment companies for which such companies provide investment advisory or principal underwriter services. The Code governs their personal investment and other investment-related activities.
The basic rule is very simple: we all have a fiduciary duty to put the client’s interests first. In particular, you are reminded that investment opportunities must be offered first to clients before the firms or staff may act on them. This is one of the important objectives that the procedures set forth in this Code are intended to accomplish. The rest of the rules elaborate this principle. Some of the rules are imposed specifically by law. For example, the laws that govern investment advisers specifically prohibit fraudulent activity, making statements that are not true or that are misleading or omit something that is significant in the context and engaging in manipulative practices. These are general words, of course, and over the years the courts, the regulators and investment advisers have interpreted these words and established codes of conduct for their employees and others who have access to their investment decisions and trading activities. Indeed, the rules obligate investment advisers to adopt written rules that are reasonably designed to prevent the illegal activities described above and must follow procedures that will enable them to prevent such activities.
The purpose of this Code is to reinforce and enhance the long-standing commitment of the firms to the highest standards of ethical business conduct. Our business depends on our reputation for integrity and principled business conduct, and this reputation, in turn, depends on the day-to-day actions of every staff member. Accordingly, we must avoid conflicts of interest, which may occur when your private interests interfere in any way, or even appear to interfere, with the interests of the firms or its clients. A conflict situation can arise when you take actions or have interests that make it difficult for you to perform your work objectively and effectively. Your obligation to conduct the firms’ business in an ethical manner includes the ethical handling of actual or apparent conflicts of interest between personal and business relationships, including full disclosure of such conflicts. Each staff member is responsible for conducting himself/herself in a lawful, honest and ethical manner at all times, and in accordance with all laws, rules and regulations applicable to our business, including this Code and all other internal policies and procedures adopted by the firms.
Revised: August 3, 2023 | S-1 | INTERNAL USE ONLY |
This Code is intended to assist the companies in fulfilling their obligations under the law. The first part lays out who the Code applies to, the second part deals with personal investment activities, the third part deals with other sensitive business practices, and subsequent parts deal with reporting and administrative procedures.
The Code is very important to the Companies and their staff members. Violations can not only cause the Companies embarrassment, loss of business, legal restrictions, fines, and other punishments, but for staff members, can lead to demotion, suspension, firing, ejection from the securities business, and very large fines.
|
A. |
The Code applies to each of the following: |
|
1. |
The Companies named or described at the top of page one of the Code and all entities that are under common management with these Companies or otherwise agree to be subject to the Code (“Affiliates”). A listing of the Affiliates, which is periodically updated, is attached as Exhibit A. |
|
2. |
Any officer, director or employee of any Company, Affiliate or Fund Client (as defined below) whose job regularly involves him/her in the investment process. This includes the formulation and making of investment recommendations and decisions, the purchase and sale of securities for Clients and the utilization of information about investment recommendations, decisions and trades. Due to the manner in which the Companies and the Affiliates conduct their business, every employee should assume that he or she is subject to the Code unless the Compliance Officer specifies otherwise.1 |
|
3. |
With respect to all of the Companies, Affiliates and Fund Clients, any natural person who Controls any of the Companies, Affiliates or Fund Clients and who obtains information regarding the Companies’ or the Affiliates’ investment recommendations or decisions. However, a person whose Control arises only as a result of his or her official position with such entity is excluded. Disinterested directors of Fund Clients and Independent Directors, for example, are excluded from coverage under this item. |
| 1 | Consultants, interns and
part-time employees may be subject to the restrictions and reporting requirements of personal investment activities promulgated
under the Code. |
Revised: August 3, 2023 | S-2 | INTERNAL USE ONLY |
|
4. |
As an exception, the Code does not apply to any director, officer or employee of any Fund Client with respect to which the Companies’ services do not involve the formulation or making of investment recommendations or decisions or the execution of portfolio transactions if that person is also a director, officer or employee of any entity that does perform such services. These individuals are covered by codes of ethics adopted by such entities. |
|
1. |
Access Persons. The (i) Companies, (ii) the persons described in items (A)2 and (A)3 above and (iii) such person’s Immediate Family, other than those excluded by item (A)4 above. |
|
2. |
Access Person Account. Other than Client Accounts, includes all advisory, brokerage, trust or other accounts over which one or more Access Persons has (i) a substantial proportionate economic interest or (ii) Control. Control is defined as having investment and/or trade discretion over the account. |
A substantial proportionate economic interest will generally be 25% of the equity in the account in the case of any single Access Person or 25% of the equity in the account in the case of all Access Persons in the aggregate. Interests in Private Fund Clients and similar indirect means of ownership of underlying securities shall also be treated as Access Person Accounts for purposes of this Code.2
As an exception, accounts in which one or more Access Persons and/or their immediate family have a substantial proportionate interest which are managed by an investment adviser who has no affiliation with the Companies and with respect to which no Access Person has, in the judgment of the Compliance Officer after reviewing the terms and circumstances, any direct or indirect influence or control over the investment or portfolio execution process are not Access Person Accounts.
| 2 | Affiliated
Mutual Funds and SICAV Funds (“Affiliated Mutual and SICAV Funds”) shall not be treated as Access Person Accounts for
purposes of this Code. Because there are investment limitations imposed by the Investment Company Act and applicable European Law over
the investment activity of Affiliated Mutual and SICAV Funds, the firms take the position that the indirect benefit potentially gained
by an Access Person through the trading activity of these Clients to the potential detriment of other Clients of the firms is sufficiently
mitigated. In addition, the firms have determined that the risk to other investors in Affiliated Mutual and SICAV Funds caused by subjecting
these Clients to the trading restrictions imposed by this Code outweigh the risks to other Clients of the firms that the firms will seek
to benefit the Access Person to the detriment of the firms’ other Clients. In addition, subject to the review of the Chief Compliance
Officer, market making accounts controlled by G.research, LLC and error accounts of Access Persons shall not be deemed Access Person
Accounts for purposes of this Code. |
Revised: August 3, 2023 | S-3 | INTERNAL USE ONLY |
As a further exception, subject to the provisions of Article II(I)7, bona fide market making accounts of G.research, LLC are not Access Person Accounts.
As a further exception, subject to the provisions of Article II(I)7, bona fide error accounts of the Companies and the Affiliates are not Access Person Accounts.
|
3. |
Affiliated
Mutual Funds. Registered open-end investment companies or series thereof advised or
sub-advised by any of the Companies or their Affiliates. |
|
4. |
Associate Portfolio Managers. Access Persons who are engaged in securities research and analysis for designated Clients or are responsible for investment recommendations for designated Clients but who are not principally responsible for investment decisions with respect to any Client Accounts. |
|
5. |
Clients. Persons that have investment advisory accounts maintained with any of the Companies or Affiliates by any person, other than Access Person Accounts. However, Fund Clients covered by item (A)(4) above are considered Client Accounts only with respect to employees specifically identified by the Compliance Officer as having regular information regarding investment recommendations or decisions or portfolio transactions for such Fund Clients. |
|
6. |
Client Accounts. Shall mean accounts of Clients (i) that are Controlled by an Access Person and (ii) in which no Access Person has a substantial proportionate economic interest; provided that, the Client pays a management, advisory or any other similar arms-length fee to the Access Person and the beneficiary of the Client Account is not an Immediate Family member of an Access Person. |
|
7. |
Companies.
The companies named or described at the top of page one of the Code. |
|
8. |
Compliance
Officer. The persons designated as the compliance officers of the Companies. |
|
9. |
Covered
Persons. The Companies, the Access Persons and the persons described in items A(3) and (A)4 above. |
|
10. |
Fund Clients. Clients that are Affiliated Mutual Funds, Private Fund Clients or a series thereof. |
Revised: August 3, 2023 | S-4 | INTERNAL USE ONLY |
|
11. |
Immediate Family. An Access Person’s spouse and Minor Descendants; provided that, with respect to accounts for the benefit of Minor Descendants who are not also Minor Children, an Access Person Controls such account. |
|
12. |
Independent
Directors. A director of any of the Companies or Affiliates, other than an investment advisor to a Fund Client, who would not
be an “interested person” of any of such entities under Section 2(a)(19) of the Investment Company Act of 1940 but for the fact
that he or she serves as such a director and may own beneficially securities of any such entity constituting less than 5% of the voting
securities thereof and may be an associated person of or own securities in a broker-dealer or parent company thereof and who does not
have any involvement in the day-to-day activities of any of the Companies or Fund Clients. |
|
13. |
Minor
Children. A child, whether natural or via adoption, of an Access Person, under the age of twenty-one years. |
|
14. |
Minor Descendants. Direct descendants of an Access Person, whether natural or via adoption, under the age of twenty-one years. |
|
15. |
Portfolio
Managers. Access Persons who are principally responsible for investment decisions with respect to any Client Accounts. |
|
16. |
Private
Fund Client. Any Client the securities of which were offered or sold pursuant to Section 3(c)(1) or the 3(c)(7) of the Investment
Company Act of 1940, as amended. |
|
17. |
Security.
Any financial instrument treated as a security for investment purposes and any related instrument such as a futures, forward or swap
contract entered into with respect to one or more securities, a basket of or an index of securities or components of securities. However,
the term security does not include securities issued by the Government of the United States, bankers’ acceptances, bank certificates
of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements, or shares of registered open-end
investment companies. Shares of affiliated registered open-end investment companies are not securities but are subject to special rules
under this Code. |
| II. | Restrictions
on Personal Investing Activities |
| A. | Basic
Restriction on Investing Activities |
If a purchase or sale order is pending or under active consideration for any Client Account by any Company or Affiliate, neither the same Security nor any related Security (such as an option, warrant, right, futures contract or convertible security) may be bought or sold for any Access Person Account.
Revised: August 3, 2023 | S-5 | INTERNAL USE ONLY |
| B. | Initial
Public Offerings |
No Security or related Security may be acquired in an initial public offering for any Access Person Account.
No Security may be bought or sold for the account of any Portfolio Manager or Associate Portfolio Manager, including any of the firms’ proprietary accounts managed by a Portfolio Manager or Associate Portfolio Manager, during the period commencing seven (7) calendar days prior to and ending seven (7) calendar days after the purchase or sale (or entry of an order for the purchase or sale) of that Security for any Client Account with respect to which such person has been designated a Portfolio Manager or Associate Portfolio Manager, unless the Client Account receives at least as good a price as the account of the Portfolio Manager or Associate Portfolio Manager by the transaction for the account of the Portfolio Manager or Associate Portfolio Manager.
In the event that a Security is bought or sold for the account of any Portfolio Manager or Associate Portfolio Manager within the Blackout Period at a price that is more advantageous than the price of the same Security bought or sold for any Client Account with respect to which such person has been designated a Portfolio Manager or Associate Portfolio Manager, then the price difference advantage of the Portfolio Manager or Associate Portfolio Manager account over the Client Account will be disgorged, in which case no violation will be deemed to have occurred; except where such price difference advantage is of a de minimis amount, in which case no disgorgement will be required. For purposes of the Blackout Period, a de minimis amount is defined as a price difference advantage in an amount of $250 or less per security.
|
D. |
Short-term Trading and Affiliated Mutual Funds |
No Security or related Security may, within a 30 calendar day holding period may be bought and sold or sold and bought at a profit for any Access Person Account if the Security or related Security was held at any time during that period in any Client Account, unless (i) the Client Account liquidates its position and (ii) no Access Person Account has a greater profit (on a proportionate per share basis) for dealing in the applicable Security than any such Client Account, in each case within such 30 day period.
No
Affiliated Mutual Fund, except the Gabelli U.S. Treasury Money Market Fund and the Gabelli ABC Fund, may be bought and sold within a
30 calendar day holding period (measured on a last-in first-out basis) for a single Access Person Account. The Gabelli U.S. Treasury
Money Market Fund shall be exempt from the 30 calendar day holding period. The ABC Fund shall have a 7 calendar day holding period (measured
on a last-in first-out basis).
Revised: August 3, 2023 | S-6 | INTERNAL USE ONLY |
Shares
of Affiliated Mutual Funds purchased via automated investments or by reinvestment of dividends or capital gain distributions will
not be subject to the holding period. Shares of Affiliated Mutual Funds held in 401(k) accounts administered by Charles Schwab will
not be subject to the holding period where the shares were purchased under the following circumstances:
|
■ |
Shares purchased by reinvestment of dividends or capital gain distributions; |
|
■ |
Shares purchased in rollover transactions; |
|
■ |
Shares purchased for automatic contribution election; and |
|
■ |
Shares purchased for automated account rebalance. |
Exchange
Traded Funds (ETFs):
Generally, broad-based index ETFs are required to be pre-cleared as described in paragraph (I) and are subject
to the Blackout Period of paragraph (C), but are not subject to the Short-term Trading restrictions of paragraph (D) as it pertains to
the 30-day holding period in the first paragraph.
The Gabelli Exchange Traded Funds are required to be pre-cleared as described in paragraph (I) and are subject to the Blackout Period of paragraph (C) and the Short-term Trading restrictions of paragraph (D) as it pertains to the 30-day holding period in the first paragraph.
Securities that derive their value, at least in part, from an underlying asset (such as options, warrants, rights, swaps and futures contracts) may be bought and sold or sold and bought at a profit unless the underlying asset is subject to the restrictions set forth in paragraphs (A), (C), (D) and (I) or the exemptions set forth in paragraph (H).
However, rights that were received pro rata with other security holders are exempt from the 30 calendar day holding period set forth in paragraph (D).
Securities that are derived by the creation of an independent company through the sale or distribution of new shares of an existing company or division of a parent company is subject to the restrictions set forth in paragraphs (A), (C), (D) and (I), but exempt from the 30 calendar day hold requirement set forth in paragraph (D) or the exemptions set forth in paragraph (H).
Revised: August 3, 2023 | S-7 | INTERNAL USE ONLY |
Participation on an ongoing basis in an issuer’s dividend reinvestment or stock purchase plan, participation in any transaction over which no Access Person had any direct or indirect influence or control and involuntary transactions (such as mergers, inheritances, gifts, etc.) are exempt from the restrictions set forth in paragraphs (A), (C) and (D) above with case by case pre-clearance under paragraph (I) below.
Purchases and sales of the following Securities for Access Person Accounts are exempt from the restrictions set forth in paragraphs (A), (C) and the first sentence of paragraph (D) above if such purchases and sales comply with the pre-clearance requirements of paragraph (I) below:
|
1. |
Publicly traded non-convertible fixed income Securities rated at least “A”; |
|
2. |
Publicly traded equity Securities having a market capitalization in excess of $1.0 billion;3 |
|
3. |
Publicly traded equity Securities having a market capitalization in excess of $500 million if the transaction in question and the aggregate amount of such Securities and any related Securities purchased and sold for the Access Person Account in question during the preceding 30 calendar days does not exceed 100 shares; |
|
4. |
Municipal Securities; and |
|
5. |
Securities transactions that the Compliance Officer concludes are being effected for federal, state or local income tax purposes. |
| 6. | The
exercise of rights that were received pro rata with other security holders is exempt. |
| 7. | Securities
issued by the United States Government, banker’s acceptances, bank certificates of deposit and commercial paper. |
| 3 | Market
capitalization includes all classes of public shares outstanding that are convertible to common shares. |
Revised: August 3, 2023 | S-8 | INTERNAL USE ONLY |
|
I. |
Pre-Clearance of Personal Securities Transactions |
|
|
No
Security may be bought or sold for an Access Person Account unless: (i) the Access Person obtains prior approval from the Compliance
Officer or, in the absence of the Compliance Officer, from the General Counsel or a designee; or via an automated Compliance pre-clearance
system (ii) the approved transaction is completed on the same day approval is received; and (iii) the Compliance Officer or the General
Counsel or designee does not rescind such approval prior to execution of the transaction (See paragraph K below for details of the Pre-Clearance
Process.) |
The Compliance Officer will not approve purchases or sales of Securities that are not publicly traded, unless the Access Person provides full details of the proposed transaction (including written certification that the investment opportunity did not arise by virtue of such person’s activities on behalf of any Client) and that the Companies would have no foreseeable interest in investing in such Security or any related Security for the account of any Client.
| 1. | No
Securities may be purchased or sold for any Access Person Account other than through the trading desk of G.research, LLC, unless express
permission is granted by the Compliance Officer. Such permission may be granted only on the condition that the third party broker supply
the Compliance Officer, on a timely basis, duplicate copies of confirmations of all personal Securities transactions for such Access
Person in the accounts maintained with such third party broker and copies of periodic statements for all such accounts. |
|
2. |
No Securities may be purchased or sold for any Access Person Account unless the particular transaction has been approved in writing by the Compliance Officer or, in his or her absence, the General Counsel of GAMCO Investors, Inc., Associated Capital Group, Inc. or their designees; or via an automated Compliance pre-clearance system. The Compliance Officer or a designee shall review reports from the trading desk (or, if applicable, confirmations from brokers) to assure that all transactions effected for Access Person Accounts are effected in compliance with this Code. A Trading Approval Form, attached as Exhibit B, must be completed and submitted to the Compliance Officer or a designee for approval prior to entry of an order. |
Revised: August 3, 2023 | S-9 | INTERNAL USE ONLY |
|
3. |
After reviewing the proposed trade, the level of potential investment interest on behalf of Clients in the Security in question and the Companies’ restricted lists, the Compliance Officer shall approve (or disapprove) a trading order on behalf of an Access Person as expeditiously as possible. The Compliance Officer will generally approve transactions described in paragraph (G) above unless the Security in question or a related security is on the Restricted List or the Compliance Officer believes for any other reason that the Access Person Account should not trade in such Security at such time. |
|
4. |
Once an Access Person’s Trading Approval Form is approved, the form must be forwarded to the trading desk (or, if a third party broker is permitted, to the Compliance Officer) for execution on the same day. If the Access Person’s trading order request is not approved, or is not executed on the same day it is approved, the clearance lapses although such trading order request may be resubmitted at a later date. |
|
5. |
In the absence of the Compliance Officer, an Access Person may submit his or her Trading Approval Form to the General Counsel of GAMCO Investors, Inc., Associated Capital Group, Inc. or a designee; or via an automated Compliance pre-clearance system. Trading approval for the Compliance Officer must be obtained from the General Counsel, and trading approval for the General Counsel must be obtained from the Compliance Officer or a designee. In no case will the Trading Desk accept an order for an Access Person Account unless it is accompanied by a signed Trading Approval Form; or a Trading Approval Form generated by an automated Compliance pre-clearance system that approves the trade. |
|
6. |
The Compliance Officer shall review all Trading Approval Forms, all initial, quarterly and annual disclosure certifications and the trading activities on behalf of all Client Accounts with a view to ensuring that all Covered Persons are complying with the spirit as well as the detailed requirements of this Code. The Compliance Officer will review all transactions in the market making accounts of G.research, LLC. and the error accounts of the Companies and the Affiliates in order to ensure that such transactions are bona fide market making or error transactions or are conducted in accordance with the requirements of this Article II. |
|
III. |
Other Investment-Related Restrictions |
No Access Person shall accept any gift or other item of more than $100 in value from any person or entity that does business with or on behalf of any Client.
Revised: August 3, 2023 | S-10 | INTERNAL USE ONLY |
No Access Person shall commence service on the Board of Directors of a publicly traded company or any company in which any Client Account has an interest without prior authorization from the Compliance Committee based upon a determination that the Board service would not be inconsistent with the interests of the Clients. The Compliance Committee shall include the senior Compliance Officer and the General Counsel of GAMCO Investors, Inc. and Associated Capital Group, Inc., and at least two of the senior executives from among the Companies.
|
IV. |
Reports and Additional Compliance Procedures |
|
A. |
Every Covered Person must submit a quarterly report (a form of which is appended as Exhibit C) containing the information set forth in paragraph (B) below with respect to transactions in any Security or Affiliated Mutual Fund in which such Covered Person has or by reason of such transaction acquires, any direct or indirect beneficial ownership (as defined in Exhibit D) in the Security, or Affiliated Mutual Fund and with respect to any account established by the Covered Person in which any Securities or Affiliated Mutual Funds were held for the direct or indirect benefit of the Covered Person; provided, however, that: |
|
1. |
a Covered Person who is required to make reports only because he or she is a director of one of the Fund Clients and who is a “disinterested” director thereof or who is an Independent Director need not make a report with respect to any transactions other than those where he or she knew or should have known in the course of his or her duties as a director that any Fund Client has made or makes a purchase or sale of the same or a related Security, or the investment adviser of any such Fund Client has considered causing any Fund Client to purchase or sell the same or a related Security, within 15 days before or after the purchase or sale of such Security or related Security by such director. |
|
2. |
a Covered Person need not make a report with respect to any transaction effected for, and Securities and Affiliated Mutual Funds held in, any account over which such person does not have any direct or indirect influence or control; and |
|
3. |
A Covered Person need not make a report with respect to any transaction in securities issued by the United States Government, banker’s acceptances, bank certificates of deposit and commercial paper. |
Revised: August 3, 2023 | S-11 | INTERNAL USE ONLY |
|
4. |
a Covered Person will be deemed to have complied with the requirements of this Article IV insofar as the Compliance Officer receives in a timely fashion duplicate monthly or quarterly brokerage statements or transaction confirmations on which all transactions required to be reported hereunder are described. |
|
B. |
A Covered Person must submit the report required by this Article to the Compliance Officer no later than 30 days after the end of the calendar quarter in which the transaction or account to which the report relates was effected or established, and the report must contain the date that the report is submitted. |
|
1. |
This report must contain the following information with respect to transactions: |
|
a. |
The date of the transaction, the title and number of shares and the principal amount of each Security and Affiliated Mutual Fund involved; |
|
b. |
The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); |
|
c. |
The price at which the transaction was effected; and |
|
d. |
The name of the broker, dealer or bank with or through whom the transaction was effected. |
|
2. |
This report must contain the following information with respect to accounts established: |
The name of the broker, dealer or bank with whom the account was established; and
The date the account was established.
| C. | Any
report submitted to comply with the requirements of this Article IV may contain a statement that the report shall not be construed as
an admission by the person making such report that he or she has any direct or indirect beneficial ownership in the Security or Affiliated
Mutual Fund to which the report relates. A person need not make any report under this Article IV with respect to transactions effected
for, and Securities, and Affiliated Mutual Funds held in, any account over which the person has no direct or indirect influence or control. |
Revised: August 3, 2023 | S-12 | INTERNAL USE ONLY |
| D. | No
later than 10 days after beginning employment with any of the Companies or Affiliates or otherwise becoming a Covered Person, each Covered
Person (except for a “disinterested” director of the Fund Client or an Independent Director who is required to submit reports under this
Article IV solely by reason of being such a director) must submit a report, which must be current as of a date no more than 45 days prior
to the date of beginning employment, containing the following information: |
|
1. |
The title, number of shares and principal amount of each Security and Affiliated Mutual Fund in which the Covered Person had any direct or indirect beneficial ownership when the person became a Covered Person; |
|
2. |
The name of any broker, dealer or bank with whom the Covered Person maintained an account in which any Securities and Affiliated Mutual Fund were held for the direct or indirect benefit of the Covered Person as of the date the person became a Covered Person; and |
|
3. |
The date that the report is submitted. |
The form of such report is attached as Exhibit E.
| E. | Annually
each Covered Person must certify that he or she has read and understood the Code and recognizes that he or she is subject to such Code.
In addition, annually each Covered Person must certify that he or she has disclosed or reported all personal Securities and Affiliated
Mutual Fund transactions required to be disclosed or reported under the Code. Furthermore, each Covered Person (except for a “disinterested”
director of the Fund Client or an Independent Director who is required to submit reports under this Article IV solely by reason of being
such a director) annually must submit a report containing the following information (which information must be current as of a date no
more than 45 days before the report is submitted): |
|
1. |
The title, number of shares and principal amount of each Security and Affiliated Mutual Fund in which the Covered Person had any direct or indirect beneficial ownership held in an account not previously disclosed other than a G.research, affiliated funds or a firm-sponsored retirement plan account; |
|
2. |
The name of any broker, dealer or bank with whom the Covered Person maintains an account in which any Securities and Affiliated Mutual Funds are held for the direct or indirect benefit of the Covered Person in an account other than a G.research, affiliated funds or a firm-sponsored retirement plan account; and |
|
3. |
The date that the report is submitted. |
The form of such certification and report is attached as Exhibit F.
Revised: August 3, 2023 | S-13 | INTERNAL USE ONLY |
| F. | At
least annually (or quarterly in the case of Items 4 and 5 below), each of the Companies that has a Fund Client or that provides principal
underwriting services for a Fund Client shall, together with each Fund Client, furnish a written report to the Board of Directors of
the Fund Client that: |
|
1. |
Describes any issues arising under the Code since the last report. |
| 2. | Certifies
that the Companies have developed procedures concerning Covered Persons’ personal trading activities and reporting requirements
relevant to such Fund Clients that are reasonably necessary to prevent violations of the Code; |
| 3. | Recommends
changes, if any, to the Fund Clients’ or the Companies’ Codes of Ethics or procedures; |
| 4. | Provides
a summary of any material or substantive violations of this Code by Covered Persons with respect to such Fund Clients which occurred
during the past quarter and the nature of any remedial action taken; and |
| 5. | Describes
any material or significant exceptions to any provisions of this Code of Ethics as determined under Article VI below. |
| G. | The
Compliance Officer shall notify each employee of any of the Companies or Affiliates as to whether such person is considered to be an
Access Person or Covered Person and shall notify each other person that is considered to be an Access Person or Covered Person. |
|
|
The Compliance Officer or his or her designee will review all Trading Approval Forms, all initial, quarterly and annual disclosure certifications and the trading activities on behalf of all Client Accounts with a view to ensuring that all Covered Persons are complying with the spirit as well as the detailed requirements of the Code. |
|
|
All violations of the Code must be reported to the Chief Compliance Officer for the appropriate registered investment adviser. In addition, if a staff member becomes aware of or suspects a violation of the Code by any other staff member, the violation or suspected violation must be promptly reported to the Chief Compliance Officer or the General Counsel. Staff members may make such reports anonymously, and will not be retaliated against by any of the firms for reporting conduct that may constitute a violation of the Code. |
Revised: August 3, 2023 | S-14 | INTERNAL USE ONLY |
|
|
Upon discovering that a Covered Person has not complied with the requirements of this Code, the Chief Compliance Officer or the General Counsel will advise the Board of Directors of the relevant Company or of the relevant Fund Client. whichever is most appropriate under the circumstances, which may impose on that person whatever sanctions the Board deems appropriate, including, among other things, disgorgement of profit, censure, suspension or termination of employment. Material violations of requirements of this Code by employees of Covered Persons and any sanctions imposed in connection therewith shall be reported not less frequently than quarterly to the Board of Directors of any relevant Company or Fund Client, as applicable. |
|
|
The General Counsel will ensure that the Fund Clients and each Gabelli entity that has a Fund Client, furnish a written report to the Board of Directors of each Fund Client, annually or quarterly as required by the Code, containing the information set forth in Section IV(F) of the Code. |
The Compliance Committee of the Companies reserves the right to decide, on a case-by-case basis, exceptions to any provisions under this Code. Any exceptions made hereunder will be maintained in writing by the Compliance Committee and presented to the Board of Directors of any relevant Fund Client at its next scheduled meeting.
| VII. | Preservation
of Documents |
This Code, a copy of each report by a Covered Person, any written report made hereunder by the Companies or the Compliance Officer, lists of all persons required to make reports, a list of any exceptions, and the reasons therefore, with respect to Article II.B, and any records under Article II.G with respect to purchases pursuant to Article II.H above, shall be preserved with the records of the relevant Company and any relevant Fund Client for the period required by Rule 17j-1.
In accordance with the Investment Advisers Act, the following documents also will be preserved:
|
A. |
Records of all violations of the Code and any action taken as a result of such violation; |
|
B. |
Records of all written acknowledgements of receipt of the Code for all Access Persons for a five-year period; |
|
C. |
A list of all staff members who are or have been Access Persons during the past five years; and |
|
D. |
Records of any decision and supporting reasons for approving the acquisition of securities by Access Persons in limited offerings. |
Revised: August 3, 2023 | S-15 | INTERNAL USE ONLY |
| VIII. | Other
Laws, Rules and Statements of Policy |
Nothing contained in this Code shall be interpreted as relieving any Covered Person from acting in accordance with the provision of any applicable law, rule or regulation or any other statement of policy or procedure governing the conduct of such person adopted by the Companies, the Affiliates or the Fund Clients.
If any person has any question with regard to the applicability of the provisions of this Code generally or with regard to any Securities transaction or transactions, he or she should consult the Compliance Officer.
Revised: August 3, 2023 | S-16 | INTERNAL USE ONLY |
EXHIBIT A
LIST OF AFFILIATES OF THE COMPANIES
Associated Capital Group, Inc. |
Gabelli & Partners GmbH
Gabelli & Partners Italia LLC
Gabelli & Partners Italia L.P.
Gabelli & Partners Italia Management LLC
Gabelli & Partners Italia S.R.L. |
Gabelli Arbitrage Holdings LLC |
Gabelli Associates Fund |
Gabelli Associates Fund II, LP |
Gabelli Associates Limited |
Gabelli Associates Limited II E |
Gabelli Entertainment and Telecommunication Acquisition Corp.
Gabelli Fixed Income LLC |
Gabelli Fund, LDC |
Gabelli Global Partners, Ltd. |
Gabelli Global Partners Master Fund, Ltd. |
Gabelli Intermediate Credit Fund, LP
Gabelli Intermediate Credit Fund, Ltd. |
Gabelli International Limited
Gabelli Investment Partners International LLC
Gabelli Japan K.K. |
Gabelli Multimedia Partners, LP |
Gabelli Performance Partnership LP
Gabelli Securities International Limited (U.K.) |
Gabelli Securities International, Ltd. (Bermuda) |
Gabelli Trading Holdings LLC
GAMA Capital Opportunities Ltd. |
GAMA Capital Opportunities Master Ltd. |
GAMA Capital Partners LP
GAMA Funds Holdings GmbH
GAMA Funds LLC |
GAMA Select Energy Plus Master Fund, Ltd. |
GAMCO Acquisitions LLC |
GAMCO Asset Management (UK) Ltd. |
GAMCO International Partners LLC |
GAMCO Investors, Inc. |
GAMCO Medical Opportunities, LP |
Gemini Capital Management LLC |
Gemini Capital Management Partners, LP |
Gemini Global Partners, LP
Greenwich Acquisition LLC
Greenwich PMV Acquisition Corp. |
Institutional Services Holdings, LLC
Morgan Group Holding Co. |
MJG Associates, Inc.
MJG IV Ltd.
PMV Consumer Acquisition Corp.
PMV Consumer Acquisition Holding Company LLC |
Revised: August 3, 2023 | S-17 | INTERNAL USE ONLY |
EXHIBIT B
PRE-CLEARANCE TRADING APPROVAL FORM
I, ______________________________________ (name), am an Access Person or authorized officer thereof and seek pre-clearance to engage in the transaction described below for the benefit of myself or another Access Person:
Acquisition or Disposition (circle one)
Name of Account: |
|
|
|
Account Number: |
|
|
|
Date of Request: |
|
|
|
Security: |
|
|
|
Amount or # of Shares: |
|
|
|
Broker: |
|
If the transaction involves a Security that is not publicly traded, a description of proposed transaction, source of investment opportunity and any potential conflicts of interest:
I hereby certify that, to the best of my knowledge, the transaction described herein is not prohibited by the Code of Ethics and that the opportunity to engage in the transaction did not arise by virtue of my activities on behalf of any Client.
Signature: |
|
|
Print Name: |
|
|
|
|
|
|
Approved or Disapproved (Circle One) |
|
|
|
|
|
Date of Approval: |
|
|
|
|
|
|
|
|
|
Signature: |
|
|
Print Name: |
|
If approval is granted, please forward this form to the trading desk (or if a third party broker is permitted, to the Compliance Officer) for immediate execution.
Revised: August 3, 2023 | S-18 | INTERNAL USE ONLY |
EXHIBIT C
QUARTERLY TRANSACTION REPORT
Report submitted by: |
|
|
|
Print Name |
|
This transaction report (the “Report”) is submitted pursuant to Section IV (B) of the Code of Ethics of the Companies and supplies information with respect to transactions in any Security or Affiliated Mutual Fund in which you, or an Access Person, may be deemed to have, or by reason of such transaction acquire, any direct or indirect beneficial ownership interest, and with respect to accounts established by you, or an Access Person, in which any Securities or Affiliated Mutual Funds were held for your direct or indirect benefit, or for the benefit of an Access Person, for the period specified below.1 If you were not employed by or affiliated with us during this entire period, amend the dates specified below to cover your period of employment or affiliation.
Unless the context otherwise requires, all terms used in the Report shall have the same meaning as set forth in the Code of Ethics.
If you have no reportable transactions or new accounts, sign and return this page only. If you have reportable transactions or new accounts, complete, sign and return page two only and include any attachments.
| 1 | Every
employee is considered an Access Person and is therefore subject to the Firms’ Code of Ethics. Access Person Accounts, which exclude
Client Accounts, include all advisory, brokerage, trust or other accounts or forms of direct beneficial ownership in which one or more
Access Persons and/or one or more members of an Access Person’s immediate family have a substantial proportionate economic interest
or control. “Immediate family” is defined as your spouse and minor descendants. With respect to accounts for the benefit
of minor descendants who are not also minor children, any account that you control. Minor children is any child, whether natural or via
adoption, of an Access Person, under the age of twenty-one years. A substantial proportionate economic interest will generally be 25%
of the equity in the account in the case of any single Access Person or 25% of the equity in the account in the case of all Access Persons
in the aggregate. Interests in investment partnerships and similar indirect means of ownership of underlying securities shall also be
treated as Access Person Accounts for purposes of this Code. |
I HAD NO REPORTABLE SECURITIES OR AFFILIATED MUTUAL FUND TRANSACTIONS OR ACCOUNTS ESTABLISHED DURING THE PREVIOUS CALENDAR QUARTER. I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST OF MY KNOWLEDGE, THE INFORMATION FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
Revised: August 3, 2023 | S-19 | INTERNAL USE ONLY |
Page 2
QUARTERLY TRANSACTION REPORT
Report submitted by: |
|
|
|
Print Name |
|
The
following tables supply the information required by Section IV (B) of the Code of Ethics for the period specified below. All
transactions including transactions in Affiliated Mutual Funds and any new accounts established during the previous calendar quarter
must be listed below.2 Transactions reported on brokerage statements or duplicate confirmations actually received by the
Compliance Officer do not have to be listed although it is your responsibility to make sure that such statements or confirmations
are complete and have been received in a timely fashion. If you had transactions of the kind described above, you may simply state,
“See statements.”
Acknowledgement of the firms’ Privacy Policy and consent for the firms to receive trading information via electronic feed, duplicate statements and/or trade confirmations will be deemed to have been given for all approved accounts.
TRANSACTIONS |
Securities
(Name and Symbol) | |
Date
of
Transaction | |
Whether
Purchase,
Sale, Short
Sale or Other
Type of
Disposition or Acquisition | |
Quantity
of
Securities | |
Price
per Share
or Other Unit | |
Name
of Broker/ Dealer with
or through
Whom the
Transaction was
Effected | |
Nature
of
Ownership of
Securities | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
NEW ACCOUNTS ESTABLISHED |
Name of Broker, Dealer or Bank | |
Account Number | |
Date Account Established |
| |
| |
|
| |
| |
|
| |
| |
|
| |
| |
|
| |
| |
|
| 2 | Outside
accounts must be pre-cleared prior to being opened (See, Section T of the Compliance Manual). |
Revised: August 3, 2023 | S-20 | INTERNAL USE ONLY |
Page 3
Managed Accounts:
When the personal account of an access person is managed by a third party, or in the case of a trust where an access person is the grantor or beneficiary that provides a trustee with management authority over the trust, the access person should not, in any way, directly or indirectly have influence or control over the personal account/trust.
Please certify to one of the following:
| ☐ | I
do NOT have any accounts managed by a third party or trustee.3 |
| ☐ | I
do have account(s) managed by a third party or trustee and I do NOT have trade or investment discretion over the account(s). I
did not direct, suggest or consult a third party or trustee to make any purchases or sales of securities in the account(s) or trust during
the previous calendar quarter.3 |
| ☐ | I
do have account(s) managed by a third party or trustee and I have investment and/or trade discretion over at least one of the accounts
or trusts and did direct, suggest or consult the manager to make purchases or sales of securities in the account(s) or trust(s) during
the previous calendar quarter.3 |
| 3 | Any
outside account of an Access Person that is managed by a third party, or in the case of a trust where an access person is the grantor
or beneficiary that provides a trustee with management authority over the trust, the access person should not, in any way, directly or
indirectly have influence or control over the personal account/trust. |
A hedge fund would be considered an account managed by a third party if it is managed as a separate account, but would not apply if you are one of other limited partners. An investment in a mutual fund managed by a third party would not apply because it is not solely for your benefit.
If you have an account or trust that was not previously disclosed, please list the details in the “New Accounts Established” section above and contact the Legal/Compliance department immediately.
I
CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST OF MY KNOWLEDGE, THE INFORMATION IN THIS REPORT IS TRUE
AND CORRECT FOR THE PREVIOUS CALENDAR QUARTER.
Revised: August 3, 2023 | S-21 | INTERNAL USE ONLY |
EXHIBIT D
BENEFICIAL OWNERSHIP
For purposes of the attached Code of Ethics, “beneficial ownership” shall be interpreted in the same manner as it would be in determining whether a person is subject to the provisions of Section 16 of the Securities Exchange Act of 1934 and the rules and regulations thereunder, except the determination of direct or indirect beneficial ownership shall apply to all securities that a Covered Person has or acquires. The term “beneficial ownership” of securities would include not only ownership of securities held be a Covered Person for his or her own benefit, whether in bearer form or registered in his or her name or otherwise, but also ownership of securities held for his or her benefit by others (regardless of whether or how they are registered) such as custodians, brokers, executors, administrators, or trustees (including trusts in which he or she has only a remainder interest), and securities held for his or her account by pledges, securities owned by a partnership in which he or she is a member if he or she may exercise a controlling influence over the purchase, sale of voting of such securities, and securities owned by any corporation or similar entry in which he or she owns securities if the shareholder is a control-ling shareholder of the entity and has or shares investment control over the entity’s portfolio.
Ordinarily, this term would not include securities held by executors or administrators in estates in which a Covered Person is a legatee or beneficiary unless there is a specified legacy to such person of such securities or such person is the sole legatee or beneficiary and there are other assets in the estate sufficient to pay debts ranking ahead of such legacy, or the securities are held in the estate more than a year after the decedent’s death.
Securities held in the name of another should be considered as beneficially owned by a Covered Person where such person enjoys “financial benefits substantially equivalent to ownership.” The Securities and Exchange Commission has said that, although the final determination of beneficial ownership is a question to be determined in the light of the facts of the particular case, generally a person is regarded as the beneficial owner of securities held in the name of his or her spouse and their minor children. Absent special circumstances such relationship ordinarily results in such person obtaining financial benefits substantially equivalent to ownership, e.g., application of the income derived from such securities to maintain a common home, or to meet expenses that such person otherwise would meet from other sources, or the ability to exercises a controlling influence over the purchase, sale or voting of such securities.
A Covered Person also may be regarded as the beneficial owner of securities held in the name of another person, if by reason of any contract, understanding, relationship, agreement, or other agreement, he or she obtains therefrom financial benefits substantially equivalent to those of ownership.
A Covered Person also is regarded as the beneficial owner of securities held in the name of a spouse, minor children or other person, even though he or she does not obtain therefrom the aforementioned benefits of ownership, if he or she can vest or re-vest title in himself/herself at once or at some future time.
Revised: August 3, 2023 | S-22 | INTERNAL USE ONLY |
EXHIBIT E
INITIAL HOLDINGS REPORT
Report submitted by: |
|
|
|
Print Name |
|
This initial holdings report (the “Report”) is submitted pursuant to Section IV (D) of the Code of Ethics of the Companies and supplies information with respect to any Security and Affiliated Mutual Fund in which you, or an Access Person, may be deemed to have, or by reason of such transaction acquire, any direct or indirect beneficial ownership interest, and with respect to accounts established by you, or an Access Person, in which any Securities or Affiliated Mutual Funds were held for your direct or indirect benefit, or the benefit of an Access Person, as of a date not more than 45 days ago.1
Unless the context otherwise requires, all terms used in the Report shall have the same meaning as set forth in the Code of Ethics.
If you have no reportable Securities, Affiliated Mutual Funds, or accounts, sign and return this page only. If you have reportable Securities, Affiliated Mutual Funds, or accounts, complete, sign and return Page 2 and any attachments.
| 1 | Every
employee is considered an Access Person and is therefore subject to the Firms’ Code of Ethics. Access Person Accounts, which exclude
Client Accounts, include all advisory, brokerage, trust or other accounts or forms of direct beneficial ownership in which one or more
Access Persons and/or one or more members of an Access Person’s immediate family have a substantial proportionate economic interest
or control. “Immediate family” is defined as your spouse and minor descendants. With respect to accounts for the benefit
of minor descendants who are not also minor children, any account that you control. Minor children is any child, whether natural or via
adoption, of an Access Person, under the age of twenty-one years. A substantial proportionate economic interest will generally be 25%
of the equity in the account in the case of any single Access Person or 25% of the equity in the account in the case of all Access Persons
in the aggregate. Interests in investment partnerships and similar indirect means of ownership of underlying securities shall also be
treated as Access Person Accounts for purposes of this Code. |
I
HAVE NO REPORTABLE SECURITIES OR AFFILIATED MUTUAL FUND ACCOUNTS AS OF ___________________. I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS
AND THAT, TO THE BEST OF MY KNOWLEDGE, THE INFORMATION FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
Revised: August 3, 2023 | S-23 | INTERNAL USE ONLY |
Page 2
Initial holdings REPORT
Report submitted by: |
|
|
|
Print Name |
|
The following tables supply the information required by Section IV (D) of the Code of Ethics as of the date you became subject to the Code. Include all holdings of Affiliated Mutual Funds and attach your most recent statement(s).
Acknowledgement of the firms’ Privacy Policy and consent for the firms to receive trading information via electronic feed, duplicate statements and/or trade confirmations will be deemed to have been given for all approved accounts.2
SECURITIES HOLDINGS |
Securities
(Name and Symbol) | |
Quantity of
Securities | |
Name
of Broker/Dealer
Where Securities Are Held | |
Nature
of
Ownership of Securities |
| |
| |
| |
|
| |
| |
| |
|
| |
| |
| |
|
| |
| |
| |
|
| |
| |
| |
|
Accounts |
Name of Broker,
Dealer or Bank | |
Account Number |
| |
|
| |
|
| |
|
| |
|
| |
|
| 2 | Outside
accounts must be pre-cleared prior to being opened (See, Section T of the Compliance Manual). |
Revised: August 3, 2023 | S-24 | INTERNAL USE ONLY |
Page 3
Managed Accounts:
When the personal account of an access person is managed by a third party, or in the case of a trust where an access person is the grantor or beneficiary that provides a trustee with management authority over the trust, the access person should not, in any way, directly or indirectly have influence or control over the personal account/trust.
Please certify to one of the following:
| ☐ | I
do NOT have any accounts managed by a third party or trustee.3 |
| ☐ | I
do have account(s) managed by a third party or trustee and I do NOT have trade or investment discretion over the account(s). I
did not direct, suggest or consult a third party or trustee to make any purchases or sales of securities in the account(s) or trust during
the previous calendar quarter.3 |
| ☐ | I
do have account(s) managed by a third party or trustee and I have investment and/or trade discretion over at least one of the accounts
or trusts and did direct, suggest or consult the manager to make purchases or sales of securities in the account(s) or trust(s) during
the previous calendar quarter.3 |
| 3 | Any
outside account of an Access Person that is managed by a third party, or in the case of a trust where an access person is the grantor
or beneficiary that provides a trustee with management authority over the trust, the access person should not, in any way, directly or
indirectly have influence or control over the personal account/trust. |
A hedge fund would be considered an account managed by a third party if it is managed as a separate account, but would not be a separate account if you are a limited partner. An investment in a mutual fund managed by a third party would not be a separate account because it is not solely for your benefit.
If you have an account or trust that was not previously disclosed, please list the details in the “New Accounts Established” section above and contact the Legal/Compliance department immediately.
I CERTIFY THAT I AM FULLY FAMILIAR WITH THE CODE OF ETHICS AND THAT, TO THE BEST OF MY KNOWLEDGE, THE INFORMATION IN THIS REPORT IS TRUE AND CORRECT AS OF __________________________________.
Revised: August 3, 2023 | S-25 | INTERNAL USE ONLY |
EXHIBIT F
ANNUAL CERTIFICATION OF CODE OF ETHICS
|
A. |
I (a Covered Person) hereby certify that I have read and understand the Code of Ethics, and recognize that I am subject to and I am in Compliance with its provisions. In addition, I hereby certify that I have disclosed or reported all personal transactions in Securities and Affiliated Mutual Funds required to be disclosed or reported under the Code of Ethics. In addition, I have read and understand the firms’ Compliance Policies & Procedures Manual, Supervisory Policies & Procedures Manual, Code of Business Conduct, IT Staff Awareness and Whistleblower Policy posted on the firms’ Intranet website, and recognize that I am subject to and I am in compliance with its provisions; |
|
B. |
Within the last ten years there have been no complaints or disciplinary actions filed against me by any regulated securities or commodities exchange, any self-regulatory securities or commodities organization, any attorney general, or any governmental office or agency regulating insurance, securities, commodities or financial transactions in the United States, in any state of the United States, or in any other country; |
|
C. |
I have not within the last ten years been convicted of or acknowledged commission of any felony or misdemeanor arising out of my conduct as an employee, salesperson, officer, director, insurance agent, broker, dealer, underwriter, investment manager or investment advisor; and |
|
D. |
I have not been denied permission or otherwise enjoined by order, judgment or decree of any court of competent jurisdiction, regulated securities or commodities exchange, self-regulatory securities or commodities organization or other federal or state regulatory authority from acting as an investment advisor, securities or commodities broker or dealer, commodity pool operator or trading advisor or as an affiliated person or employee of any investment company, bank, insurance company or commodity broker, dealer, pool operator or trading advisor, or from engaging in or continuing any conduct or practice in connection with any such activity or the purchase or sale of any security. |
|
E. |
Unless I am exempt from filing an Annual Holdings Report (as a “disinterested” director of a Fund Client or an Independent Director of an Affiliate), I have attached a completed Annual Outside Accounts/Holdings Report which is accurate as of a date no more than 45 days ago. |
Print
Name: |
|
|
|
|
|
Signature: |
|
|
|
|
|
Date: |
|
|
Revised: August 3, 2023 | S-26 | INTERNAL USE ONLY |
Annual
Outside Accounts/Holdings Report
Name: |
(Last name, First) |
|
Job Title/Department: |
|
|
|
|
|
|
|
|
|
|
| ☐ | Neither
I nor anyone in my immediate family has Reportable Securities Accounts.1 |
|
☐ |
I have Reportable Securities Account(s)1 for my immediate family or myself outside the firm that was/were previously disclosed and approved by the Legal/Compliance department. The account(s) is/are listed below: |
|
☐ |
In 20xx, the following Reportable Securities Account(s)1 listed below was/were opened for my immediate family or myself and not previously disclosed to and approved by the Legal/Compliance Department: |
| 1 | Reportable
Securities Accounts include: |
|
● |
Advisory, brokerage, trust, mutual fund, or other accounts that you currently have open or are intending to open outside the firms, where you or your immediate family have a substantial proportionate economic interest or control. |
|
○ |
“Immediate family” is defined as your spouse and minor descendants. With respect to accounts for the benefit of minor descendants who are not also minor children, any account that you control. |
“Minor children” is any child, whether natural or via adoption, of an Access Person, under the age of twenty-one years. Every employee is considered an Access Person and is therefore subject to the Code of Ethics.
“Control” is defined as having investment and/or trade discretion over the account.
|
○ |
A “substantial proportionate economic interest” will generally be 25% of the equity in the account in the case of any single Access Person or 25% of the equity in the account in the case of all Access Persons in the aggregate. Interests in private fund clients and similar indirect means of ownership of underlying securities shall also be treated as Access Person Accounts. |
| * | Excluded
from the definition of mutual fund accounts are non-brokerage accounts that can only hold a single family of mutual funds (i.e., direct
investment mutual fund accounts). |
|
● |
Any outside account of an Access Person that is managed by a third party, or in the case of a trust where an access person is the grantor or beneficiary that provides a trustee with management authority over the trust, the access person should not, in any way, directly or indirectly have influence or control over the personal account/trust. [Note: a hedge fund would be considered an account managed by a third party if it is managed as a separate account, but would not be a separate account if you are a limited partner. An investment in a mutual fund managed by a third party would not be a separate account because it is not solely for your benefit]. |
Failure
to disclose an account is a violation of the firms’ Code of Ethics. Along with this signed form, please enclose a copy of
your most recent statement for each new Reportable Securities Account(s) listed below:
Print Your Name: |
|
|
|
|
|
Signature: |
|
|
|
|
|
Date: |
|
|
Revised: August 3, 2023 | S-27 | INTERNAL USE ONLY |
1.
Account Title: |
|
Account
Number: |
|
Firm
Name: |
|
Firm Address: |
|
|
|
For Internal Use Only↓ |
|
|
Receiving Statements & Confirms? |
|
|
|
2.
Account Title: |
|
Account
Number: |
|
Firm
Name: |
|
Firm Address: |
|
|
|
For Internal Use Only↓ |
|
|
Receiving Statements & Confirms? |
|
|
|
3.
Account Title: |
|
Account
Number: |
|
Firm
Name: |
|
Firm Address: |
|
|
|
For
Internal Use Only↓ |
|
|
Receiving Statements & Confirms? |
|
|
|
4.
Account Title: |
|
Account
Number: |
|
Firm
Name: |
|
Firm Address: |
|
|
|
For Internal Use Only↓ |
|
|
Receiving Statements & Confirms? |
|
|
|
For additional accounts, please make a copy of this page. |
Page 2 of 2 |
Revised: August 3, 2023 | S-28 | INTERNAL USE ONLY |
Exhibit 99.CERT
Certification
Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act
I,
John C. Ball, certify that:
| 1. | I have
reviewed this report on Form N-CSR of The Gabelli Multimedia Trust Inc.; |
| 2. | Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered
by this report; |
| 3. | Based
on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations,
changes in net assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods presented in this
report; |
| 4. | The
registrant’s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| (a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed
such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of a date within 90 days prior to the filing date of this report based on such evaluation;
and |
| (d) | Disclosed
in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and |
| 5. | The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions): |
| (a) | All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize, and report financial information; and |
| (b) | Any
fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
Date: |
March 8, 2024 |
|
/s/ John C. Ball |
|
|
John C. Ball, Principal Executive Officer |
Certification
Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act
I,
John C. Ball, certify that:
| 1. | I have reviewed this report on Form N-CSR of The Gabelli Multimedia Trust Inc.; |
| 2. | Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered
by this report; |
| 3. | Based
on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations,
changes in net assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods presented in this
report; |
| 4. | The
registrant’s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| (a) | Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed
such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of a date within 90 days prior to the filing date of this report based on such evaluation;
and |
| (d) | Disclosed
in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and |
| 5. | The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions): |
| (a) | All
significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize, and report financial information; and |
| (b) | Any
fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
Date: |
March 8, 2024 |
|
/s/ John C. Ball |
|
|
John C. Ball, Principal Financial Officer and Treasurer |
Exhibit
99.906 CERT
Certification
Pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act
I, John C. Ball, Principal Executive Officer
of The Gabelli Multimedia Trust Inc. (the “Registrant”), certify that:
| 1. | The
Form N-CSR of the Registrant (the “Report”) fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The
information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Registrant. |
Date: |
March 8, 2024 |
|
/s/ John C. Ball |
|
|
John C. Ball, Principal Executive Officer |
I, John C. Ball, Principal Financial Officer and Treasurer of The Gabelli Multimedia Trust Inc. (the “Registrant”), certify that:
| 1. | The
Form N-CSR of the Registrant (the “Report”) fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The
information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Registrant. |
Date: |
March 8, 2024 |
|
/s/ John C. Ball |
|
|
John C. Ball, Principal Financial Officer and Treasurer |
v3.24.0.1
N-2 - USD ($)
|
|
3 Months Ended |
12 Months Ended |
Dec. 31, 2023 |
Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Cover [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Entity Central Index Key |
|
|
|
|
|
|
|
|
|
0000921671
|
|
|
|
|
|
|
|
|
|
Amendment Flag |
|
|
|
|
|
|
|
|
|
false
|
|
|
|
|
|
|
|
|
|
Document Type |
|
|
|
|
|
|
|
|
|
N-CSR
|
|
|
|
|
|
|
|
|
|
Entity Registrant Name |
|
|
|
|
|
|
|
|
|
The Gabelli Multimedia Trust Inc.
|
|
|
|
|
|
|
|
|
|
Fee Table [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder Transaction Expenses [Table Text Block] |
|
|
|
|
|
|
|
|
|
Stockholder
Transaction Expenses
Sales
Load (as a percentage of offering price) |
|
- |
% (a) |
Offering
Expenses Borne by the Fund
(as a percentage of offering price) |
|
- |
% (a) |
Dividend
Reinvestment and Voluntary Cash Purchase Plan Fees |
|
- |
|
Purchase
Transactions |
|
$0.75 |
(b) |
One-time
Fee for Deposit of Stock Certificates |
|
$2.50 |
(b) |
|
|
|
|
|
|
|
|
|
|
Sales Load [Percent] |
|
|
|
|
|
|
|
|
|
(0.00%)
|
|
|
|
|
|
|
|
|
|
Dividend Reinvestment and Cash Purchase Fees |
|
|
|
|
|
|
|
|
|
$ (0)
|
|
|
|
|
|
|
|
|
|
Other Transaction Expenses [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Transaction Expenses [Percent] |
|
|
|
|
|
|
|
|
|
(0.00%)
|
|
|
|
|
|
|
|
|
|
Annual Expenses [Table Text Block] |
|
|
|
|
|
|
|
|
|
Annual
Expenses ((as a percentage of net assets attributable to common stock) |
|
Percentages of
Net Assets Attributable to Common Shares |
Management
Fees |
|
1.76 |
% (c) |
Interest
on Borrowed Funds |
|
- |
% (d) |
Other
Expenses |
|
0.70 |
% (e) |
Total
Annual Expenses |
|
2.46 |
% |
Dividends
on Preferred Shares |
|
3.90 |
% (f) |
Total
Annual Expenses and Dividends on Preferred |
|
6.36 |
% (c) |
|
|
|
|
|
|
|
|
|
|
Management Fees [Percent] |
|
|
|
|
|
|
|
|
|
1.76%
|
|
|
|
|
|
|
|
|
|
Interest Expenses on Borrowings [Percent] |
|
|
|
|
|
|
|
|
|
(0.00%)
|
|
|
|
|
|
|
|
|
|
Other Annual Expenses [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Annual Expense 3 [Percent] |
|
|
|
|
|
|
|
|
|
0.70%
|
|
|
|
|
|
|
|
|
|
Total Annual Expenses [Percent] |
|
|
|
|
|
|
|
|
|
2.46%
|
|
|
|
|
|
|
|
|
|
Waivers and Reimbursements of Fees [Percent] |
|
|
|
|
|
|
|
|
|
3.90%
|
|
|
|
|
|
|
|
|
|
Net Expense over Assets [Percent] |
|
|
|
|
|
|
|
|
|
6.36%
|
|
|
|
|
|
|
|
|
|
Expense Example [Table Text Block] |
|
|
|
|
|
|
|
|
|
The
following example illustrates the expenses you would pay on a $1,000 investment in common Shares, assuming a 5% annual portfolio total
return.*
|
|
1
Year |
|
3
Year |
|
5
Year |
|
10
Year |
Total
Expenses Incurred |
|
$63 |
|
$187 |
|
$307 |
|
$894 |
|
* |
The example should not be
considered a representation of future expenses. The example is based on Total Annual Expenses and Dividends on Preferred Stock shown
in the table above and assumes that the amounts set forth in the table do not change and that all distributions are reinvested at
net asset value. Actual expenses may be greater or less than those assumed. Moreover, the Fund’s actual rate of return may
be greater or less than the hypothetical 5% return shown in the example. |
The
above example includes Dividends on Preferred Stock. If Dividends on Preferred Stock was not included in the example calculation, the
expenses would be as follows (based on the same assumptions as above).
|
|
1
Year |
|
3
Year |
|
5
Year |
|
10
Year |
Total
Expenses Incurred |
|
$25 |
|
$77 |
|
$131 |
|
$279 |
|
|
|
|
|
|
|
|
|
|
Expense Example, Year 01 |
|
|
|
|
|
|
|
|
|
$ 63
|
|
|
|
|
|
|
|
|
|
Expense Example, Years 1 to 3 |
|
|
|
|
|
|
|
|
|
187
|
|
|
|
|
|
|
|
|
|
Expense Example, Years 1 to 5 |
|
|
|
|
|
|
|
|
|
307
|
|
|
|
|
|
|
|
|
|
Expense Example, Years 1 to 10 |
|
|
|
|
|
|
|
|
|
$ 894
|
|
|
|
|
|
|
|
|
|
Purpose of Fee Table , Note [Text Block] |
|
|
|
|
|
|
|
|
|
The
following table shows the Fund’s expenses as a percentage of net assets attributable to common stock. All expenses of the Fund
are borne, directly or indirectly, by the common stockholders. The table is based on the capital structure of the Fund as of December 31,
2023. The purpose of the table and example below is to help you understand all fees and expenses that you, as a holder of common stock,
would bear directly or indirectly.
|
|
|
|
|
|
|
|
|
|
Other Expenses, Note [Text Block] |
|
|
|
|
|
|
|
|
|
“Other
Expenses” are based on estimated amounts for the current year.
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Objectives and Practices [Text Block] |
|
|
|
|
|
|
|
|
|
INVESTMENT
OBJECTIVES AND POLICIES
Investment
Objectives
The
Fund’s primary investment objective is to achieve long-term growth of capital by investing primarily in the common stock and other
securities of foreign and domestic companies involved in the telecommunications, media, publishing, and entertainment industries. Income
is the secondary investment objective. The investment objectives of long-term growth of capital and income are fundamental policies of
the Fund. The Fund’s policy of concentration in companies in the telecommunications, media, publishing, and entertainment industries
is also a fundamental policy of the Fund.
Under
normal market conditions, the Fund will invest at least 80% of the value of its net assets, plus borrowings for investment purposes,
in common stock and other securities, including convertible securities, preferred stock, options, and warrants of companies in the telecommunications,
media, publishing, and entertainment industries
(the
“80% Policy”). The Fund may invest in companies of any size market capitalization. The Fund may invest, without limitation,
in foreign securities. The Fund may also invest in securities of companies located in emerging markets.
A
company will be considered to be in these industries if it derives at least 50% of its revenues or earnings from, or devotes at least
50% of its assets to, the indicated activities or multimedia related activities. The 80% Policy may be changed without stockholder approval.
The Fund will provide stockholders with notice at least sixty days prior to the implementation of any change in the 80% Policy.
The
telecommunications companies in which the Fund may invest are engaged in the development, manufacture, or sale of communications services
or equipment throughout the world, including the following products or services: regular telephone service; wireless communications services
and equipment, including cellular telephone, microwave and satellite communications, paging, and other emerging wireless technologies;
equipment and services for both data and voice transmission, including computer hardware and software; electronic components and communications
equipment; video conferencing; electronic mail; local and wide area networking, and linkage of data and word processing systems; publishing
and information systems; video text and teletext; emerging technologies combining television, telephone and computer systems; broadcasting,
including television and radio, satellite and microwave transmission and cable television.
The
entertainment, media and publishing companies in which the Fund may invest are engaged in providing the following products or services:
the creation, packaging, distribution, and ownership of entertainment programming throughout the world, including pre-recorded music,
feature-length motion pictures, made-for-TV movies, television series, documentaries, animation, game shows, sports programming, and
news programs; live events such as professional sporting events or concerts, theatrical exhibitions, television and radio broadcasting,
satellite and microwave transmission, cable television systems and programming, broadcast and cable networks, wireless cable television
and other emerging distribution technologies; home video, interactive and multimedia programming, including home shopping and multiplayer
games; publishing, including newspapers, magazines and books, advertising agencies and niche advertising mediums such as in-store or
direct mail; emerging technologies combining television, telephone, and computer systems, computer hardware and software; and equipment
used in the creation and distribution of entertainment programming such as that required in the provision of broadcast, cable, or telecommunications
services.
Investing
in securities of foreign issuers, which generally are denominated in foreign currencies, may involve certain risk and opportunity considerations
not typically associated with investing in domestic companies and could cause the Fund to be affected favorably or unfavorably by changes
in currency exchange rates and revaluations of currencies.
The
Investment Adviser believes that at the present time investment by the Fund in the securities of companies located throughout the world
presents great potential for accomplishing the Fund’s investment objectives. While the Investment Adviser expects that a substantial
portion of the Fund’s portfolio may be invested in the securities of domestic companies, a significant portion of the Fund’s
portfolio may also be comprised of the securities of issuers headquartered outside the United States.
No
assurance can be given that the Fund’s investment objectives will be achieved.
Investment
Methodology of the Fund
In
selecting securities for the Fund, the Investment Adviser normally will consider the following factors, among others:
|
● |
the
Investment Adviser’s own evaluations of the private market value (as defined below), cash flow, earnings per share, and other
fundamental aspects of the underlying assets and business of the company; |
|
● |
the
potential for capital appreciation of the securities; |
|
● |
the
interest or dividend income generated by the securities; |
|
● |
the
prices of the securities relative to other comparable securities; |
|
● |
whether
the securities are entitled to the benefits of call protection or other protective covenants; |
|
● |
the
existence of any anti-dilution protections or guarantees of the security; and |
|
● |
the
diversification of the portfolio of the Fund as to issuers. |
The
Investment Adviser’s investment philosophy with respect to equity securities is to identify assets that are selling in the public
market at a discount to their private market value. The Investment Adviser defines private market value as the value informed purchasers
are willing to pay to acquire assets with similar characteristics. The Investment Adviser also normally evaluates an issuer’s free
cash flow and long-term earnings trends. Finally, the Investment Adviser looks for a catalyst, something indigenous to the company,
its industry, or country that will surface additional value.
Principal
Investment Practices and Policies
Equity
Securities. The Fund invests in equity securities (such as common stock and preferred stock).
Common
stocks represent the residual ownership interest in the issuer and holders of common stock are entitled to the income and increase in
the value of the assets and business of the issuer after all of its debt obligations and obligations to preferred stockholders are satisfied.
Common stocks generally have voting rights. Common stocks fluctuate in price in response to many factors including historical and prospective
earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.
Equity
securities also include preferred stock (whether or not convertible into common stock) and debt securities convertible into or exchangeable
for common or preferred stock. Preferred stock has a preference over common stock in liquidation (and generally dividends as well) but
is subordinated to the liabilities of the issuer in all respects. As a general rule the market value of preferred stock with a fixed
dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible
preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other
obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock
than in a more senior debt security with similarly stated yield characteristics. The market value of preferred stock will also generally
reflect whether (and if so when) the issuer may force holders to sell their preferred stock back to the issuer and whether (and if so
when) the holders may force the issuer to buy back their preferred stock. Generally speaking, the right of the issuer to repurchase the
preferred stock tends to reduce any premium at which the preferred stock might otherwise trade due to interest rate or credit factors,
while the right of the holders to require the issuer to repurchase the preferred stock tends to reduce any discount at which the preferred
stock might otherwise trade due to interest rate or credit factors.
In
addition, some preferred stocks are non-cumulative, meaning that the dividends do not accumulate and need not ever be paid. A portion
of the portfolio may include investments in non-cumulative preferred stocks, whereby the issuer does not have an obligation to make up
any arrearages to its stockholders. There is no assurance that dividends or distributions on non-cumulative preferred stocks in which
the Fund invests will be declared or otherwise made payable.
Securities
that are convertible into or exchangeable for preferred or common stock are liabilities of the issuer but are generally subordinated
to more senior elements of the issuer’s balance sheet. Although such securities also generally reflect an element of conversion
value, their market value also varies with interest rates and perceived credit risk. Many convertible securities are not investment grade,
that is, not rated “BBB” or better by S&P or “Baa” or better by Moody’s or considered by the Investment
Adviser to be of similar quality. Preferred stocks and convertible securities may have many of the same characteristics and risks as
nonconvertible debt securities.
The
Fund is also permitted to invest in certain other securities with innovative structures in the convertible securities market. These include
“mandatory conversion” securities, which consist of debt securities or preferred stocks that convert automatically into common
stock of the same or a different issuer at a specified date and conversion ratio.
The
market value of a convertible security may be viewed as comprised of two components: its “investment value,” which is its
value based on its yield without regard to its conversion feature; and its “conversion value,” which is its value attributable
to the underlying common stock obtainable on conversion. The investment value of a convertible security is influenced by changes in interest
rates and the yield of similar non-convertible securities, with investment value declining as interest rates increase and increasing
as interest rates decrease. The conversion value of a convertible security is influenced by changes in the market price of the underlying
common stock. If, because of a low price of the underlying common stock, the conversion value is low relative to the investment value,
the price of the convertible security is governed principally by its investment value. To the extent the market price of the underlying
common stock approaches or exceeds the conversion price, the convertible security will be increasingly influenced by its conversion value,
and the convertible security may sell at a premium over its conversion value to the extent investors place value on the right to acquire
the underlying common stock while holding a fixed income security.
Accordingly,
convertible securities have unique investment characteristics because (i) they have relatively high yields as compared to common stocks,
(ii) they have defensive characteristics since they provide a fixed return even if the market price of the underlying common stock declines,
and (iii) they provide the potential for capital appreciation if the market price of the underlying common stock increases.
A
convertible security may be subject to redemption at the option of the issuer at a price established in the charter provision or indenture
pursuant to which the convertible security is issued. If a convertible security held by the Fund is called for redemption, the Fund will
be required to surrender the security for redemption, convert it into the underlying common stock or sell it to a third party. Before
the Fund purchases a convertible security it will review carefully the redemption provisions of the security.
There
may be additional types of convertible securities with features not specifically referred to herein in which the Fund may invest consistent
with its investment objectives and policies. For a discussion of risk factors of convertible securities, see “Risk Factors and
Special Considerations—Convertible Securities Risk.”
Options.
The Fund may purchase or sell, i.e., write, options on securities, securities indices and foreign currencies which are listed
on a national securities exchange or in the OTC market as a means of achieving additional return or of hedging the value of the Fund’s
portfolio. A call option is a contract that, in return for a premium, gives the holder of the option the right to buy from the writer
of the call option the security or currency underlying the option at a specified exercise price at any time during the term of the option.
The writer of the call option has the obligation, upon exercise of the option, to deliver the underlying security or currency upon payment
of the exercise price during the option period. A put option is the reverse of a call option, giving the holder of the option the right,
in return for a premium, to sell the underlying security to the writer, at a specified price, and obligating the writer to purchase the
underlying security from the holder upon exercise of the exercise price.
If
the Fund has written an option, it may terminate its obligation by effecting a closing purchase transaction. This is accomplished by
purchasing an option of the same series as the option previously written. However, with respect to exchange-traded options, once the
Fund has been assigned an exercise notice, the Fund will be unable to effect a closing purchase transaction. Similarly, if the Fund is
the holder of an option it may liquidate its position by effecting a closing sale transaction on an exchange. This is accomplished by
selling an option of the same series as the option previously purchased. There can be no assurance that either a closing purchase or
sale transaction can be effected when the Fund so desires.
The
Fund will realize a profit from a closing transaction if the price of the transaction is less than the premium received from writing
the option or is more than the premium paid to purchase the option; the Fund will realize a loss from a closing transaction if the price
of the transaction is more than the premium received from writing the option or is less than the premium paid to purchase the option.
Since call option prices generally reflect increases in the price of the underlying security, any loss resulting from the repurchase
of a call option may also be wholly or partially offset by unrealized appreciation of the underlying security. Other principal factors
affecting the market value of a put or a call option include supply and demand, prevailing interest rates, the current market price and
price volatility of the underlying security, and the time remaining until the expiration date of the option. Gains and losses on investments
in options depend, in part, on the ability of the Investment Adviser to predict correctly the effect of these factors. The use of options
cannot serve as a complete hedge since the price movement of securities underlying the options will not necessarily follow the price
movements of the portfolio securities subject to the hedge.
An
option position may be closed out only on an exchange which provides a secondary market for an option of the same series or in a private
transaction. Although the Fund will generally purchase or write only those options for which there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an exchange will persist for any particular option. In such event, it
might not be possible to effect closing transactions in particular options, so that the Fund would have to exercise its options in order
to realize any profit and would incur brokerage commissions upon the exercise of call options and upon the subsequent disposition of
underlying securities for the exercise of put options.
Although
the Investment Adviser will attempt to take appropriate measures to minimize the risks relating to the Fund’s writing of put and
call options, there can be no assurance that the Fund will succeed in any option-writing program it undertakes.
The
Fund may write covered call options on common stocks that it owns or has an immediate right to acquire through conversion or exchange
of other securities in an amount not to exceed 25% of total assets or invest up to 10% of its total assets in the purchase of put options
on common stocks that the Fund owns or may acquire through the conversion or exchange of other securities that it owns.
Warrants.
The Fund may invest in warrants. Warrants are, in effect, longer-term call options. They give the holder the right to purchase
a given number of shares of a particular company at specified prices within certain periods of time. The purchaser of a warrant expects
that the market price of the security will exceed the purchase price of the warrant plus the exercise price of the warrant, thus giving
him a profit. Since the market price may never exceed the exercise price before the expiration date of the warrant, the purchaser of
the warrant risks the loss of the entire purchase price of the warrant. Warrants generally trade in the open market and may be sold rather
than exercised. Warrants are sometimes sold in unit form with other securities of an issuer. Units of warrants and common stock may be
employed in financing young, unseasoned companies. The purchase price of a warrant varies with the exercise price of the warrant, the
current market value of the underlying security, the life of the warrant and various other investment factors.
If
the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security,
the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and
any loss will be increased, by the transaction costs incurred by the Fund, including the costs associated with providing collateral to
the broker-dealer (usually cash, U.S. government securities or other highly liquid debt securities) and the maintenance of collateral
with its custodian.
Although
the Fund’s gain is limited to the price at which it sold the security short, its potential loss is theoretically unlimited.
Foreign
Securities. There is no limitation on the amount of foreign securities in which the Fund may invest. The Investment Adviser believes
that investing in foreign securities offers both enhanced investment opportunities and additional risks beyond those present in U.S.
securities. Investing in foreign securities may provide increased diversification by adding securities from various foreign countries
(i) that offer different investment opportunities, (ii) that generally are affected by different economic trends and (iii) whose stock
markets may not be correlated with U.S. markets. At the same time, these opportunities and trends involve risks that may not be encountered
in U.S. investments.
The
following considerations comprise both risks and opportunities not typically associated with investing in U.S. securities: fluctuations
in exchange rates of foreign currencies; possible imposition of exchange control regulations or currency restrictions that would prevent
cash from being brought back to the United States; less public information with respect to issuers of securities; less government supervision
of stock exchanges, securities brokers and issuers of securities; lack of uniform accounting, auditing and financial reporting standards;
lack of uniform settlement periods and trading practices; less liquidity and frequently greater price volatility in foreign markets than
in the United States; possible imposition of foreign taxes; the possibility of expropriation or confiscatory taxation, seizure or nationalization
of foreign bank deposits or other assets; the adoption of foreign government restrictions and other adverse political, social or diplomatic
developments that could affect investment; difficulty in obtaining or enforcing a court judgment abroad; sometimes less advantageous
legal, operational and financial protections applicable to foreign sub-custodial arrangements; and the historically lower
level
of responsiveness of foreign management to stockholder concerns (such as dividends and return on investment).
The
Fund may also invest in the debt securities of foreign governments. Although such investments are not a principal strategy of the Fund,
there is limitation on its ability to invest in the debt securities of foreign governments.
Emerging
Market Countries. The risks described above for foreign securities, including the risks of nationalization and expropriation
of assets, are typically increased to the extent that the Fund invests in companies headquartered in developing, or emerging market,
countries. Investments in securities of companies headquartered in such countries may be considered speculative and subject to certain
special risks. The political and economic structures in many of these countries may be in their infancy and developing rapidly, and such
countries may lack the social, political and economic characteristics of more developed countries. Certain of these countries have in
the past failed to recognize private property rights and have at times nationalized and expropriated the assets of private companies.
Some countries have inhibited the conversion of their currency to another. The currencies of certain emerging market countries have experienced
devaluation relative to the U.S. dollar, and future devaluations may adversely affect the value of the Fund’s assets denominated
in such currencies. Some emerging market countries have experienced substantial rates of inflation for many years. Continued inflation
may adversely affect the economies and securities markets of such countries. In addition, unanticipated political or social developments
may affect the value of the Fund’s investments in these countries and the availability of the Fund of additional investments in
these countries. The small size, limited trading volume and relative inexperience of the securities markets in these countries may make
the Fund’s investments in such countries illiquid and more volatile than investments in more developed countries, and the Fund
may be required to establish special custodial or other arrangements before making investments in these countries. There may be little
financial or accounting information available with respect to companies located in these countries, and it may be difficult as a result
to assess the value or prospects of an investment in such companies.
Other
Investment Practices
Risk
Arbitrage. The Fund may invest without limitation in securities pursuant to “risk arbitrage” strategies or in other
investment funds managed pursuant to such strategies. Risk arbitrage investments are made in securities of companies for which a tender
or exchange offer has been made or announced and in securities of companies for which a merger, consolidation, liquidation or reorganization
proposal has been announced if, in the judgment of the Investment Adviser, there is a reasonable prospect of capital appreciation significantly
greater than the brokerage and other transaction expenses involved. Risk arbitrage strategies attempt to exploit merger activity to capture
the spread between current market values of securities and their values after successful completion of a merger, restructuring or similar
corporate transaction. Transactions associated with risk arbitrage strategies typically involve the purchases or sales of securities
in connection with announced corporate actions which may include, but are not limited to, mergers, consolidations, acquisitions, transfers
of assets, tender offers, exchange offers, re-capitalizations, liquidations, divestitures, spin-offs and similar transactions. However,
a merger or other restructuring or tender or exchange offer anticipated by the Fund and in which it holds an arbitrage position may not
be completed on the terms contemplated or within the time frame anticipated, resulting in losses to the Fund.
In
general, securities which are the subject of such an offer or proposal sell at a premium to their historic market price immediately prior
to the announcement of the offer but may trade at a discount or premium to what the stated or appraised value of the security would be
if the contemplated transaction were approved or consummated.
Such
investments may be advantageous when the discount significantly overstates the risk of the contingencies involved; significantly undervalues
the securities, assets or cash to be received by stockholders as a result of the contemplated transaction; or fails adequately to recognize
the possibility that the offer or proposal may be replaced or superseded by an offer or proposal of greater value. The evaluation of
such contingencies requires unusually broad knowledge and experience on the part of the Investment Adviser which must appraise not only
the value of the issuer and its component businesses as well as the assets or securities to be received as a result of the contemplated
transaction but also the financial resources and business motivation behind the offer and/or the dynamics and business climate when the
offer or proposal is in process. Since such investments are ordinarily short-term in nature, they will tend to increase the turnover
ratio of the Fund, thereby increasing its brokerage and other transaction expenses. Risk arbitrage strategies may also involve short
selling, options hedging and other arbitrage techniques to capture price differentials.
Temporary
Defensive Investments. Subject to the Fund’s investment restrictions, when a temporary defensive period is believed by
the Investment Adviser to be warranted (“temporary defensive periods”), the Fund may, without limitation, hold cash or invest
its assets in securities of U.S. government sponsored instrumentalities, in repurchase agreements in respect of those instruments, and
in certain high grade commercial paper instruments. During temporary defensive periods, the Fund may also invest up to 10% of the market
value of its total assets in money market mutual funds that invest primarily in securities of U.S. government sponsored instrumentalities
and repurchase agreements in respect of those instruments. Obligations of certain agencies and instrumentalities of the U.S. government,
such as the Government National Mortgage Association, are supported by the “full faith and credit” of the U.S. government;
others, such as those of the Export-Import Bank of the U.S., are supported by the right of the issuer to borrow from the U.S. Treasury;
others, such as those of the Federal National Mortgage Association, are supported by the discretionary authority of the U.S. government
to purchase the agency’s obligations; and still others, such as those of the Student Loan Marketing Association, are supported
only by the credit of the instrumentality. No assurance can be given that the U.S. government would provide financial support to U.S.
government sponsored instrumentalities if it is not obligated to do so by law. During temporary defensive periods, the Fund may be less
likely to achieve its investment objective.
Non-Investment
Grade Securities. The Fund may invest up to 10% of its total assets in fixed income securities rated below investment grade by
recognized statistical rating agencies or unrated securities considered by the Investment Adviser to be of comparable quality. These
securities, which may be preferred stock or debt, are predominantly speculative and involve major risk exposure to adverse conditions.
Securities that are rated lower than “BBB” by S&P or lower than “Baa” by Moody’s or unrated securities
considered by the Investment Adviser to be of comparable quality are referred to in the financial press as “junk bonds” or
“high yield” securities.
Generally,
such non-investment grade securities and unrated securities considered by the Investment Adviser to be of comparable quality offer a
higher current yield than is offered by higher rated securities, but also (i) will likely have some quality and protective characteristics
that, in the judgment of the rating organizations, are outweighed by large uncertainties or major risk exposures to adverse conditions,
and (ii) are predominantly
speculative
with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligation. The market
values of certain of these securities also tend to be more sensitive to individual corporate developments and changes in economic conditions
than higher quality securities. In addition, such comparable unrated securities generally present a higher degree of credit risk. The
risk of loss due to default by these issuers is significantly greater because such non-investment grade securities and unrated securities
considered by the Investment Adviser to be of comparable quality generally are unsecured and frequently are subordinated to the prior
payment of senior indebtedness. In light of these risks, the Investment Adviser, in evaluating the creditworthiness of an issue, whether
rated or unrated, will take various factors into consideration, which may include, as applicable, the issuer’s operating history,
financial resources and its sensitivity to economic conditions and trends, the market support for the facility financed by the issue,
the perceived ability and integrity of the issuer’s management and regulatory matters.
In
addition, the market value of non-investment grade securities is more volatile than that of higher quality securities, and the markets
in which such lower rated or unrated securities are traded are more limited than those in which higher rated securities are traded. The
existence of limited markets may make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its
portfolio and calculating its net asset value.
Moreover,
the lack of a liquid trading market may restrict the availability of securities for the Fund to purchase and may also have the effect
of limiting the ability of the Fund to sell securities at their fair value in order to respond to changes in the economy or the financial
markets.
Non-investment
grade securities and unrated securities considered by the Investment Adviser to be of comparable quality also present risks based on
payment expectations. If an issuer calls the obligation for redemption (often a feature of fixed income securities), the Fund may have
to replace the security with a lower yielding security, resulting in a decreased return for investors. Also, as the principal value of
nonconvertible bonds and preferred stocks moves inversely with movements in interest rates, in the event of rising interest rates the
value of the securities held by the Fund may decline proportionately more than a portfolio consisting of higher rated securities. Investments
in zero coupon bonds may be more speculative and subject to greater fluctuations in value due to changes in interest rates than bonds
that pay interest currently.
The
Fund may purchase securities of companies that are experiencing significant financial or business difficulties, including companies involved
in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant financial returns
to the Fund, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for
successful investments in issuers experiencing significant business and financial difficulties is unusually high. There can be no assurance
that the Fund will correctly evaluate the value of the assets collateralizing its investments or the prospects for a successful reorganization
or similar action. In any reorganization or liquidation proceeding relating to a portfolio investment, the Fund may lose all or part
of its investment or may be required to accept collateral with a value less than the amount of the Fund’s initial investment.
As
part of its investments in non-investment grade securities, the Fund may invest in securities of issuers in default. The Fund will make
an investment in securities of issuers in default only when the Investment Adviser believes that such issuers will honor their obligations
or emerge from bankruptcy protection and the value of
these
securities will appreciate. By investing in securities of issuers in default, the Fund bears the risk that these issuers will not continue
to honor their obligations or emerge from bankruptcy protection or that the value of the securities will not otherwise appreciate.
In
addition to using statistical rating agencies and other sources, the Investment Adviser also performs its own analysis of issues in seeking
investments that it believes to be underrated (and thus higher yielding) in light of the financial condition of the issuer. Its analysis
of issuers may include, among other things, current and anticipated cash flow and borrowing requirements, value of assets in relation
to historical cost, strength of management, responsiveness to business conditions, credit standing and current anticipated results of
operations. In selecting investments for the Fund, the Investment Adviser may also consider general business conditions, anticipated
changes in interest rates and the outlook for specific industries.
Subsequent
to its purchase by the Fund, an issue of securities may cease to be rated or its rating may be reduced. In addition, it is possible that
statistical rating agencies might change their ratings of a particular issue to reflect subsequent events on a timely basis. Moreover,
such ratings do not assess the risk of a decline in market value. None of these events will require the sale of the securities by the
Fund, although the Investment Adviser will consider these events in determining whether the Fund should continue to hold the securities.
Fixed
income securities, including lower grade securities, frequently have call or buy-back features that permit their issuers to call or repurchase
the securities from their holders, such as the Fund. If an issuer exercises these rights during periods of declining interest rates,
the Fund may have to replace the security with a lower yielding security, thus resulting in a decreased return for the Fund.
The
market for non-investment grade and comparable unrated securities has experienced periods of significantly adverse price and liquidity
several times, particularly at or around times of economic recession. Past market recessions have adversely affected the value of such
securities and the ability of certain issuers of such securities to repay principal and pay interest thereon or to refinance such securities.
The market for those securities may react in a similar fashion in the future.
Limitations
on the Purchase and Sale of Futures Contracts, Certain Options and Swaps. Subject to the guidelines of the Board, the Fund may
engage in “commodity interest” transactions (generally, transactions in futures, certain options, certain currency transactions,
and certain types of swaps) only for bona fide hedging or other permissible transactions in accordance with the rules and regulations
of the Commodity Futures Trading Commission (“CFTC”). Pursuant to amendments by the CFTC to Rule 4.5 under the Commodity
Exchange Act (“CEA”), the Investment Adviser has filed a notice of exemption from registration as a “commodity pool
operator” with respect to the Fund. The Fund and the Investment Adviser are therefore not subject to registration or regulation
as a commodity pool operator under the CEA. In addition, certain trading restrictions are applicable to the Fund as a result of this
status. These trading restrictions permit the Fund to engage in commodity interest transactions that include (i) “bona fide hedging”
transactions, as that term is defined and interpreted by the CFTC and its staff, without regard to the percentage of the Fund’s
assets committed to margin and options premiums and (ii) non-bona fide hedging transactions, provided that the Fund does not enter into
such non-bona fide hedging transactions if, immediately thereafter, either (a) the sum of the amount of initial margin deposits on the
Fund’s existing futures positions or swaps positions and option or swaption premiums would exceed 5% of the market value of the
Fund’s liquidating value, after taking into account unrealized profits and
unrealized
losses on any such transactions, or (b) the aggregate net notional value of the Fund’s commodity interest transactions would exceed
100% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on
any such transactions. In addition to meeting one of the foregoing trading limitations, the Fund may not market itself as a commodity
pool or otherwise as a vehicle for trading in the futures, options or swaps markets. Therefore, in order to claim the Rule 4.5 exemption,
the Fund is limited in its ability to invest in commodity futures, options, and certain types of swaps (including securities futures,
broad based stock index futures, and financial futures contracts). As a result, the Fund is more limited in its ability to use these
instruments than in the past, and these limitations may have a negative impact on the ability of the Investment Adviser to manage the
Fund, and on the Fund’s performance. If the Investment Adviser was required to register as a commodity pool operator with respect
to the Fund, compliance with additional registration and regulatory requirements would increase Fund expenses. Other potentially adverse
regulatory initiatives could also develop.
Futures
Contracts and Options on Futures. The Fund may purchase and sell financial futures contracts and options thereon which are traded
on a commodities exchange or board of trade for certain hedging, yield enhancement and risk management purposes. A financial futures
contract is an agreement to purchase or sell an agreed amount of securities or currencies at a set price for delivery in the future.
These futures contracts and related options may be on debt securities, financial indices, securities indices, U.S. government securities
and foreign currencies. The Investment Adviser has claimed an exclusion from the definition of the term “commodity pool operator”
under the Commodity Exchange Act.
Forward
Currency Exchange Contracts. Subject to guidelines of the Board, the Fund may enter into forward foreign currency exchange contracts
to protect the value of its portfolio against uncertainty in the level of future currency exchange rates between a particular foreign
currency and the U.S. dollar or between foreign currencies in which its securities are or may be denominated. The Fund may enter into
such contracts on a spot (i.e., cash) basis at the rate then prevailing in the currency exchange market or on a forward basis by entering
into a forward contract to purchase or sell currency. A forward contract on foreign currency is an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days agreed upon by the parties from the date of the contract at a price
set on the date of the contract. Forward currency contracts (i) are traded in a market conducted directly between currency traders (typically,
commercial banks or other financial institutions) and their customers, (ii) generally have no deposit requirements and (iii) are typically
consummated without payment of any commissions. The Fund, however, may enter into forward currency contracts requiring deposits or involving
the payment of commissions. The Fund expects to invest in forward currency contracts for hedging or currency risk management purposes
and not in order to speculate on currency exchange rate movements. The Fund will only enter into forward currency contracts with parties
which it believes to be creditworthy.
In
hedging a specific transaction, the Fund may enter into a forward contract with respect to either the currency in which the transaction
is denominated or another currency deemed appropriate by the Investment Adviser. The amount the Fund may invest in forward currency contracts
is limited to the amount of its aggregate investments in foreign currencies. The use of forward currency contracts may involve certain
risks, including the failure of the counterparty to perform its obligations under the contract, and such use may not serve as a complete
hedge because of an imperfect correlation between movements in the prices of the contracts and the prices of the
currencies
hedged or used for cover. The Fund will only enter into forward currency contracts with parties that the Investment Adviser believes
to be creditworthy institutions.
Short
Sales. The Fund may make short sales of securities which it owns or which it has the right to acquire through conversion or exchange
of other securities it owns. In a short sale the Fund does not immediately deliver the securities sold and does not receive the proceeds
from the sale. The Fund is said to have a short position in the securities sold until it delivers the securities sold, at which time
it receives the proceeds of the sale. The market value for the securities sold short of any one issuer will not exceed 5% of the Fund’s
total assets or 5% of such issuer’s voting securities. In addition, the Fund may not make short sales or maintain a short position
if it would cause more than 25% of the Fund’s total assets, taken at market value, to be held as collateral for such sales. The
Fund may make short sales against the box without respect to such limitations.
The
Fund will normally close out a short position by purchasing and delivering an equal amount of the securities sold short, rather than
by delivering securities already held by the Fund. The Fund may, however, close out any short sale of common stock through the conversion
or exchange of securities or the exercise of warrants or rights it owns, or through the delivery of common stock already held by the
Fund.
The
short sale of a security is considered a speculative investment technique. The Fund may make a short sale in order to hedge against market
risks when it believes that the price of a security may decline, causing a decline in the value of a long position the Fund may have
in such security or a security convertible into or exchangeable for such security, or when, for tax or other reasons, the Fund does not
want to sell the security it owns. In such case, any future losses in the Fund’s long position should be reduced by a gain in the
short position. Conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such
gains or losses are reduced will depend upon the amount of the security sold short relative to the amount the Fund owns, either directly
or indirectly, and, in the case where the Fund owns convertible securities, changes with the conversion premiums. When the Fund makes
a short sale, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale in order
to satisfy its obligation to deliver the security upon conclusion of the sale. The Fund may have to pay a fee to borrow particular securities
and is often obligated to deliver any payments received on such borrowed securities, such as dividends.
Repurchase
Agreements. Repurchase agreements may be seen as loans by the Fund collateralized by underlying debt securities. Under the terms
of a typical repurchase agreement, the Fund would acquire an underlying debt obligation for a relatively short period (usually not more
than one week) subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed price and time.
This arrangement results in a fixed rate of return to the Fund that is not subject to market fluctuations during the holding period.
The Fund bears a risk of loss in the event that the other party to a repurchase agreement defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline
in the value of the underlying securities during the period in which it seeks to assert these rights. The Investment Adviser, acting
under the supervision of the Board, reviews the creditworthiness of those banks and dealers with which the Fund enters into repurchase
agreements to evaluate these risks, and monitors on an ongoing basis the value of the securities subject to repurchase agreements to
ensure that the value is maintained at the required level. The Fund will not enter into repurchase agreements with the Investment Adviser
or any of its affiliates.
Loans
of Portfolio Securities. To increase income, the Fund may lend its portfolio securities to securities broker-dealers or financial
institutions if: (i) the loan is collateralized in accordance with applicable regulatory requirements, and (ii) no loan will cause the
value of all loaned securities to exceed 20% of the value of its total assets.
If
the borrower fails to maintain the requisite amount of collateral, the loan automatically terminates and the Fund could use the collateral
to replace the securities while holding the borrower liable for any excess of replacement cost over the value of the collateral. As with
any extension of credit, there are risks of delay in recovery and in some cases even loss of rights in collateral should the borrower
of the securities violate the terms of the loan or fail financially. There can be no assurance that borrowers will not fail financially.
On termination of the loan, the borrower is required to return the securities to the Fund, and any gain or loss in the market price during
the loan would inure to the Fund. If the other party to the loan petitions for bankruptcy or becomes subject to the United States Bankruptcy
Code, the law regarding the rights of the Fund is unsettled. As a result, under extreme circumstances, there may be a restriction on
the Fund’s ability to sell the collateral and the Fund would suffer a loss.
Borrowing.
The Fund may borrow money in accordance with its investment restrictions, including as a temporary measure for extraordinary
or emergency purposes. It may not borrow for investment purposes.
Leveraging.
As provided in the 1940 Act and subject to certain exceptions, the Fund may issue senior securities (which may be stock, such
as preferred stock, and/or securities representing debt) so long as its total assets, less certain ordinary course liabilities, exceed
300% of the amount of the debt outstanding and exceed 200% of the amount of preferred stock and debt outstanding. Any such preferred
stock may be convertible in accordance with the SEC staff guidelines, which may permit the Fund to obtain leverage at attractive rates.
The
use of leverage magnifies the impact of changes in net asset value, which means that, all else being equal, the use of leverage results
in outperformance on the upside and underperformance on the downside. In addition, if the cost of leverage exceeds the return on the
securities acquired with the proceeds of leverage, the use of leverage will diminish rather than enhance the return to the Fund. The
use of leverage generally increases the volatility of returns to the Fund. Such volatility may increase the likelihood of the Fund having
to sell investments in order to meet its obligations to make distributions on the preferred stock or principal or interest payments on
debt securities, or to redeem preferred stock or repay debt, when it may be disadvantageous to do so. The Fund’s use of leverage
may require it to sell portfolio investments at inopportune times in order to raise cash to redeem preferred stock or otherwise de-leverage
so as to maintain required asset coverage amounts or comply with any mandatory redemption terms of any outstanding preferred stock.
In
the event the Fund had both outstanding preferred stock and senior securities representing debt at the same time, the Fund’s obligations
to pay dividends or distributions and, upon liquidation of the Fund, liquidation payments in respect of its preferred stock would be
subordinate to the Fund’s obligations to make any principal and/or interest payments due and owing with respect to its outstanding
senior debt securities. Accordingly, the Fund’s issuance of senior securities representing debt would have the effect of creating
special risks for the Fund’s preferred stockholders that would not be present in a capital structure that did not include such
securities.
Subject
to the requirements of Rule 18f-4 under the 1940 Act, the Fund may enter into derivative transactions, including transactions that
have economic leverage embedded in them. Rule 18f-4 defines “derivatives
transactions”
as (1) any swap, security-based swap, futures contract, forward contract, option, any combination of the foregoing, or any similar instrument,
under which a fund is or may be required to make any payment or delivery of cash or other assets during the life of the instrument or
at maturity or early termination, whether as margin or settlement payment or otherwise; and (2) any short sale borrowing. Derivatives
transactions entered into by the Fund in compliance with Rule 18f-4 will not be considered senior securities for purposes of computing
the asset coverage requirements described above. Economic leverage exists when the Fund achieves the right to a return on a capital base
that exceeds the investment which the Fund has contributed to the instrument achieving a return. Derivative transactions that the Fund
may enter into and the risks associated with them are described elsewhere in this Annual Report. The Fund cannot assure you that investments
in derivative transactions that have economic leverage embedded in them will result in a higher return on its common stock.
If
the Fund enters into any reverse repurchase agreements or similar financing transactions obligating the Fund to make future payments,
the Fund must either treat all such transactions as derivatives transactions for all purposes under Rule 18f-4 or otherwise comply
with the asset coverage requirements described above and combine the aggregate amount of indebtedness associated with all such transactions
with the aggregate amount of any other senior securities representing indebtedness when calculating the Fund’s asset coverage ratio
limit requirements. The asset coverage requirements under section 18 of the 1940 Act and the limits and conditions imposed by Rule 18f-4
may limit or restrict portfolio management or result in the Fund maintaining securities positions it would otherwise liquidate.
Investment
Restrictions. The Fund has adopted certain fundamental investments policies designed to limit investment risk and maintain portfolio
diversification. Fundamental policies may not be changed without the vote of a majority, as defined in the 1940 Act, of the outstanding
voting securities of the Fund (voting together as a single class subject to class approval rights of any preferred stock). The Fund may
become subject to rating agency guidelines that are more limiting than its current investment restrictions in order to obtain and maintain
a desired rating on its preferred stock, if any.
Portfolio
Turnover. The Fund will buy and sell securities to accomplish its investment objectives. The investment policies of the Fund
may lead to frequent changes in investments, particularly in periods of rapidly fluctuating interest or currency exchange rates.
Portfolio
turnover generally involves some expense to the Fund, including brokerage commissions or dealer mark-ups and other transaction costs
on the sale of securities and reinvestment in other securities. The portfolio turnover rate is computed by dividing the lesser of the
amount of the securities purchased or securities sold by the average monthly value of securities owned during the year (excluding securities
whose maturities at acquisition were one year or less). Higher portfolio turnover may decrease the after-tax return to individual investors
in the Fund to the extent it results in a decrease of the long-term capital gains portion of distributions to stockholders.
The
Fund anticipates that its annual portfolio turnover rate will generally not exceed 100%. For the fiscal years ended December 31,
2022 and December 31, 2023, the portfolio turnover rates of the Fund were 15% and 19%, respectively.
Further
information on the investment objectives and policies of the Fund is set forth in the SAI.
|
|
|
|
|
|
|
|
|
|
Risk Factors [Table Text Block] |
|
|
|
|
|
|
|
|
|
RISK
FACTORS AND SPECIAL CONSIDERATIONS
Investors
should consider the following risk factors and special considerations associated with investing in the Fund.
General
Risks
Market
Risk. The market price of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets.
The value of a security may decline due to general market conditions which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency
rates, adverse changes to credit markets or adverse investor sentiment generally. The value of a security may also decline due to factors
which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within
an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Equity
securities generally have greater price volatility than fixed income securities. Credit ratings downgrades may also negatively affect
securities held by the Fund. Even when markets perform well, there is no assurance that the investments held by the Fund will increase
in value along with the broader market.
In
addition, market risk includes the risk that geopolitical and other events will disrupt the economy on a national or global level. For
instance, war, terrorism, market manipulation, government defaults, government shutdowns, political changes or diplomatic developments,
public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental disasters can
all negatively impact the securities markets, which could cause the Fund to lose value. These events could reduce consumer demand or
economic output, result in market closures, travel restrictions or quarantines, and significantly adversely impact the economy. The current
contentious domestic political environment, as well as political and diplomatic events within the United States and abroad, such as the
U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, has in the past resulted, and may
in the future result, in a government shutdown, which could have an adverse impact on the Fund’s investments and operations. Additional
and/or prolonged U.S. federal government shutdowns may affect investor and consumer confidence and may adversely impact financial markets
and the broader economy, perhaps suddenly and to a significant degree. Governmental and quasi-governmental authorities and regulators
throughout the world have previously responded to serious economic disruptions with a variety of significant fiscal and monetary policy
changes, including, but not limited to, direct capital infusions into companies, new monetary programs and dramatically lower interest
rates. An unexpected or sudden reversal of these policies, or the ineffectiveness of these policies, could increase volatility in securities
markets, which could adversely affect the Fund’s investments. Any market disruptions could also prevent the Fund from executing
advantageous investment decisions in a timely manner. To the extent that the Fund focuses its investments in a region enduring geopolitical
market disruption, it will face higher risks of loss, although the increasing interconnectivity between global economies and financial
markets can lead to events or conditions in one country, region or financial market adversely impacting a different country, region or
financial
market.
Thus, investors should closely monitor current market conditions to determine whether the Fund meets their individual financial needs
and tolerance for risk.
Current
market conditions may pose heightened risks with respect to the Fund’s investment in fixed income securities. Central banks such
as the Federal Reserve Bank have been increasing interest rates, though this trend has tempered recently as the rate of inflation slows.
There is a risk that additional increases in interest rates or a prolonged period of rising interest rates may cause the economy to enter
a recession. Additional interest rate increases in the future could cause the value of the Fund to decrease. Recently, inflation levels
have been at their highest point in nearly 40 years and the Federal Reserve has been engaged in a campaign to raise certain benchmark
interest rates in an effort to combat inflation. As inflation increases, the real value of the Fund’s common stock and distributions
therefore may decline.
Exchanges
and securities markets may close early, close late or issue trading halts on specific securities or generally, which may result in, among
other things, the Fund being unable to buy or sell certain securities or financial instruments at an advantageous time or accurately
price its portfolio investments.
Interest
Rate Risk Generally. The primary risk associated with dividend-and interest-paying securities is interest rate risk. A decrease
in interest rates will generally result in an increase in the investment value of such securities, while increases in interest rates
will generally result in a decline in the investment value of such securities. This effect is generally more pronounced for fixed rate
securities than for securities whose income rate is periodically reset.
General
interest rate fluctuations may have a substantial negative impact on the Fund’s investments, the value of the Fund and the Fund’s
rate of return. A reduction in the interest or dividend rates on new investments relative to interest or dividend rates on current investments
could also have an adverse impact on the Fund’s net investment income. An increase in interest rates could decrease the value of
any investments held by the Fund that earn fixed interest or dividend rates, including debt securities, convertible securities, preferred
stocks, loans and high-yield bonds, and also could increase interest or dividend expenses, thereby decreasing net income.
The
magnitude of these fluctuations in the market price of bonds and other income- or dividend-paying securities is generally greater for
those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income
derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money
if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management. To the extent the Fund invests
in securities that may be prepaid at the option of the obligor, the sensitivity of such securities to changes in interest rates may increase
(to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate securities typically reset
only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some
fluctuations in the net asset value of the Fund to the extent that it invests in floating rate securities. These basic principles of
bond prices also apply to U.S. government securities. A security backed by the “full faith and credit” of the U.S. government
is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other income- or
dividend-paying securities, government-guaranteed securities will fluctuate in value when interest rates change.
The
Fund’s use of leverage will tend to increase the Fund’s interest rate risk. The Fund may invest in variable and floating
rate instruments, which generally are less sensitive to interest rate changes than longer duration
fixed
rate instruments but may decline in value in response to rising interest rates if, for example, the rates at which they pay interest
do not rise as much, or as quickly, as market interest rates in general. Conversely, variable and floating rate instruments generally
will not increase in value if interest rates decline. The Fund also may invest in inverse floating rate securities, which may decrease
in value if interest rates increase, and which also may exhibit greater price volatility than fixed rate obligations with similar credit
quality. To the extent the Fund holds variable or floating rate instruments, a decrease (or, in the case of inverse floating rate securities,
an increase) in market interest rates will adversely affect the income received from such securities, which may adversely affect the
net asset value of the Fund’s common stock.
Central
banks such as the Federal Reserve Bank have been increasing interest rates, though this trend has tempered recently as the rate of inflation
slows. There is a risk that heightened interest rates may cause the economy to enter a recession. Any such recession would negatively
impact the Fund and the investments held by the Fund. These impacts may include:
|
● |
severe
declines in the Fund’s net asset values; |
|
● |
inability
of the Fund to accurately or reliably value its portfolio; |
|
● |
inability
of the Fund to pay any dividends or distributions; |
|
● |
inability
of the Fund to maintain its status as a registered investment company (“RIC”) under the Internal Revenue Code of 1986,
as amended (the “Code”); |
|
● |
declines
in the value of the Fund’s investments; |
|
● |
increased
risk of default or bankruptcy by the companies in which the Fund invests; |
|
● |
increased
risk of companies in which the Fund invests being unable to weather an extended cessation of normal economic activity and thereby
impairing their ability to continue functioning as a going concern; and |
|
● |
limited
availability of new investment opportunities. |
Inflation
Risk. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation
decreases the value of money. This risk may be elevated compared to historical market conditions because of recent monetary policy measures
and the current interest rate environment. Inflation rates may change frequently and significantly as a result of various factors, including
unexpected shifts in the domestic or global economy and changes in economic policies, and the Fund’s investments may not keep pace
with inflation, which may result in losses to Fund stockholders. As inflation increases, the real value of the Fund’s shares and
dividends may decline. In addition, during any periods of rising inflation, interest rates of any debt securities held by the Fund would
likely increase, which would tend to further reduce returns to stockholders. This risk is greater for fixed-income instruments with longer
maturities.
Convertible
Securities Risk. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of
similar quality. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase
as interest rates decline. In the absence of adequate anti-dilution provisions in a convertible security, dilution in the value of the
Fund’s holding may occur in the event the underlying stock is subdivided, additional equity securities are issued for below market
value, a stock dividend is declared or the issuer enters into another type of corporate transaction that has a similar effect.
The
value of a convertible security is influenced by the value of the underlying equity security. Convertible debt securities and preferred
stocks may depreciate in value if the market value of the underlying equity security declines or if rates of interest increase. In addition,
although debt securities are liabilities of a corporation which the corporation is generally obligated to repay at a specified time,
debt securities, particularly convertible debt securities, are often subordinated to the claims of some or all of the other creditors
of the corporation.
Mandatory
conversion securities (securities that automatically convert into equity securities at a future date) may limit the potential for capital
appreciation and, in some instances, are subject to complete loss of invested capital. Other innovative convertibles include “equity-linked”
securities, which are securities or derivatives that may have fixed, variable, or no interest payments prior to maturity, may convert
(at the option of the holder or on a mandatory basis) into cash or a combination of cash and common stock, and may be structured to limit
the potential for capital appreciation. Equity-linked securities may be illiquid and difficult to value and may be subject to greater
credit risk than that of other convertibles. Moreover, mandatory conversion securities and equity-linked securities have increased the
sensitivity of the convertible securities market to the volatility of the equity markets and to the special risks of those innovations,
which may include risks different from, and possibly greater than, those associated with traditional convertible securities.
Preferred
stocks are equity securities in the sense that they do not represent a liability of the corporation. In the event of liquidation of the
corporation, and after its creditors have been paid or provided for, holders of preferred stock are generally entitled to a preference
as to the assets of the corporation before any distribution may be made to the holders of common stock. Debt securities normally do not
have voting rights. Preferred stocks may have no voting rights or may have voting rights only under certain circumstances.
|
● |
Credit
Risk. Credit risk is the risk that an issuer will fail to pay interest or dividends and principal in a timely manner. Companies
that issue convertible securities may be small to medium-size, and they often have low credit ratings. In addition, the credit rating
of a company’s convertible securities is generally lower than that of its conventional debt securities. Convertible securities
are normally considered “junior” securities—that is, the company usually must pay interest on its conventional
debt before it can make payments on its convertible securities. Credit risk could be high for the Fund, because it could invest in
securities with low credit quality. The lower a debt security is rated, the greater its default risk. As a result, the Fund may incur
cost and delays in enforcing its rights against the issuer. |
|
● |
Market
Risk. Although convertible securities do derive part of their value from that of the securities into which they are convertible,
they are not considered derivative financial instruments. However, the Fund’s mandatory convertible securities include features
which render them more sensitive to price changes of their underlying securities. Thus they expose the Fund to greater downside risk
than traditional convertible securities, but generally less than that of the underlying common stock. |
|
● |
Interest
Rate Risk for Convertible Securities. The Fund may be subject to a greater risk of rising interest rates due to recent monetary
measures and the current interest rate environment. The Federal Reserve has been engaged in a campaign to increase certain benchmark
interest rates, and any additional increases in interest rates would be likely to drive down the prices of convertible securities
held by the Fund. Convertible securities are particularly sensitive to interest rate changes when their predetermined |
|
|
conversion price is much higher than the
issuing company’s common stock. See “— General Risks—Interest Rate Risks Generally.” |
|
● |
Sector
Risk. Sector risk is the risk that returns from the economic sectors in which convertible securities are concentrated will trail
returns from other economic sectors. As a group, sectors tend to go through cycles of doing better-or-worse-than the convertible
securities market in general. These periods have, in the past, lasted for as long as several years. Moreover, the sectors that dominate
this market change over time. |
Equity
Risk. Investing in the Fund involves equity risk, which is the risk that the securities held by the Fund will fall in market
value due to adverse market and economic conditions, perceptions regarding the industries in which the issuers of securities held by
the Fund participate and the particular circumstances and performance of particular companies whose securities the Fund holds. An investment
in the Fund represents an indirect economic stake in the securities owned by the Fund, which are for the most part traded on securities
exchanges or in the OTC markets. The market value of these securities, like other market investments, may move up or down, sometimes
rapidly and unpredictably. The net asset value of the Fund may at any point in time be worth less than the amount at the time the stockholder
invested in the Fund, even after taking into account any reinvestment of distributions.
Common
Stock Risk. Common stock of an issuer in the Fund’s portfolio may decline in price for a variety of reasons, including
if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline
in its financial condition. Common stock in which the Fund invests is structurally subordinated as to income and residual value to preferred
stock, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore
will be subject to greater dividend risk than preferred stock or debt instruments of such issuers. In addition, while common stock has
historically generated higher average returns than fixed income securities, common stock has also experienced significantly more volatility
in those returns.
Preferred
Stock Risk. There are special risks associated with the Fund’s investing in preferred securities, including:
|
● |
Deferral.
Preferred securities may include provisions that permit the issuer, at its discretion, to defer dividends or distributions for
a stated period without any adverse consequences to the issuer. If the Fund owns a preferred security that is deferring its dividends
or distributions, the Fund may be required to report income for tax purposes although it has not yet received such income. |
|
● |
Non-Cumulative
Dividends. Some preferred securities are non-cumulative, meaning that the dividends do not accumulate and need not ever be paid.
A portion of the portfolio may include investments in non-cumulative preferred securities, whereby the issuer does not have an obligation
to make up any arrearages to its stockholders. Should an issuer of a non-cumulative preferred security held by the Fund determine
not to pay dividends or distributions on such security, the Fund’s return from that security may |
|
|
be adversely affected. There is no assurance
that dividends or distributions on non-cumulative preferred securities in which the Fund invests will be declared or otherwise made
payable. |
|
● |
Subordination.
Preferred securities are subordinated to bonds and other debt instruments in an issuer’s capital structure in terms of
priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt
security instruments. |
|
● |
Liquidity.
Preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. government securities. |
|
● |
Limited
Voting Rights. Generally, preferred security holders (such as the Fund) have no voting rights with respect to the issuing company
unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may
be entitled to elect a number of directors to the issuer’s board. Generally, once all the arrearages have been paid, the preferred
security holders no longer have voting rights. |
|
● |
Special
Redemption Rights. In certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified
date. For instance, for certain types of preferred securities, a redemption may be triggered by a change in U.S. federal income tax
or securities laws. A redemption by the issuer may negatively impact the return of the security held by the Fund. |
Warrants
and Rights Risk. The Fund may invest in warrants and rights (including those acquired in units or attached to other securities)
which entitle the holder to buy equity securities at a specific price for or at the end of a specific period of time. The Fund will do
so only if the underlying equity securities are deemed appropriate by the Investment Adviser for inclusion in the Fund’s portfolio.
Investing
in rights and warrants can provide a greater potential for profit or loss than an equivalent investment in the underlying security, and
thus can be a riskier investment. The value of a right or warrant may decline because of a decline in the value of the underlying security,
the passage of time, changes in interest rates or in the dividend or other policies of the Fund whose equity underlies the warrant, a
change in the perception as to the future price of the underlying security, or any combination thereof. Rights and warrants generally
pay no dividends and confer no voting or other rights other than the right to purchase the underlying security.
Non-Investment
Grade Securities Risk. The prices of these lower grade securities are more sensitive to negative developments, such as a decline
in the issuer’s revenues or a general economic downturn, than are the prices of higher grade securities. Securities of below investment
grade quality—those securities rated below “Baa” by Moody’s or below “BBB” by S&P (or unrated
securities considered by the Investment Adviser to be of comparable quality)— are predominantly speculative with respect to the
issuer’s capacity to pay interest and repay principal when due and therefore involve a greater risk of default. Securities rated
below investment grade commonly are referred to as “junk bonds” or “high yield” securities and generally pay
a premium above the yields
of
U.S. government securities or securities of investment grade issuers because they are subject to greater risks than these securities.
These risks, which reflect their speculative character, include the following:
|
● |
greater
credit risk and risk of default; |
|
● |
potentially
greater sensitivity to general economic or industry conditions; |
|
● |
potential
lack of attractive resale opportunities (illiquidity); and |
|
● |
additional
expenses to seek recovery from issuers who default. |
In
addition, the prices of these non-investment grade securities are more sensitive to negative developments, such as a decline in the issuer’s
revenues or a general economic downturn, than are the prices of higher grade securities. Non-investment grade securities tend to be less
liquid than investment grade securities. The market value of non-investment grade securities may be more volatile than the market value
of investment grade securities and generally tends to reflect the market’s perception of the creditworthiness of the issuer and
short-term market developments to a greater extent than investment grade securities, which primarily reflect fluctuations in general
levels of interest rates.
Ratings
are relative and subjective and not absolute standards of quality. Securities ratings are based largely on the issuer’s historical
financial condition and the rating agencies’ analysis at the time of rating. Consequently, the rating assigned to any particular
security is not necessarily a reflection of the issuer’s current financial condition.
The
Fund may purchase securities of companies that are experiencing significant financial or business difficulties, including companies involved
in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant financial returns
to the Fund, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for
successful investments in issuers experiencing significant business and financial difficulties is unusually high. There can be no assurance
that the Fund will correctly evaluate the value of the assets collateralizing its investments or the prospects for a successful reorganization
or similar action. In any reorganization or liquidation proceeding relating to a portfolio investment, the Fund may lose all or part
of its investment or may be required to accept collateral with a value less than the amount of the Fund’s initial investment.
As
a part of its investments in non-investment grade securities, the Fund may invest in the securities of issuers in default. The Fund invests
in securities of issuers in default only when the Investment Adviser believes that such issuers will honor their obligations and emerge
from bankruptcy protection and that the value of such issuers’ securities will appreciate. By investing in the securities of issuers
in default, the Fund bears the risk that these issuers will not continue to honor their obligations or emerge from bankruptcy protection
or that the value of these securities will not otherwise appreciate.
In
addition to using statistical rating agencies and other sources, the Investment Adviser will also perform its own analysis of issuers
in seeking investments that it believes to be underrated (and thus higher yielding) in light of the financial condition of the issuer.
Its analysis of issuers may include, among other things, current and anticipated cash flow and borrowing requirements, value of assets
in relation to historical cost, strength of management, responsiveness to business conditions, credit standing and current anticipated
results of
operations.
In selecting investments for the Fund, the Investment Adviser may also consider general business conditions, anticipated changes in interest
rates and the outlook for specific industries.
Subsequent
to its purchase by the Fund, an issue of securities may cease to be rated or its rating may be reduced. In addition, it is possible that
statistical rating agencies might change their ratings of a particular issue to reflect subsequent events on a timely basis. Moreover,
such ratings do not assess the risk of a decline in market value. None of these events will require the sale of the securities by the
Fund, although the Investment Adviser will consider these events in determining whether the Fund should continue to hold the securities.
Income
securities, including non-investment grade securities and comparable unrated securities, frequently have call or buy-back features that
permit their issuers to call or repurchase the securities from their holders, such as the Fund. If an issuer exercises these rights during
periods of declining interest rates, the Fund may have to replace the security with a lower yielding security, thus resulting in a decreased
return for the Fund.
The
market for non-investment grade and comparable unrated securities has at various times, particularly during times of economic recession,
experienced substantial reductions in market value and liquidity. Past recessions have adversely affected the value of such securities
as well as the ability of certain issuers of such securities to repay principal and pay interest thereon or to refinance such securities.
The market for those securities could react in a similar fashion in the event of any future economic recession.
Short
Sales Risk. Short-selling involves selling securities which may or may not be owned and borrowing the same securities for delivery
to the purchaser, with an obligation to replace the borrowed securities at a later date. If the price of the security sold short increases
between the time of the short sale and the time the Fund replaces the borrowed security, the Fund will incur a loss; conversely, if the
price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss will be increased, by the transaction
costs incurred by the Fund, including the costs associated with providing collateral to the broker-dealer (usually cash and liquid securities).
Although the Fund’s gain is limited to the price at which it sold the security short, its potential loss is theoretically unlimited.
Short-selling
necessarily involves certain additional risks. However, if the short seller does not own the securities sold short (an uncovered short
sale), the borrowed securities must be replaced by securities purchased at market prices in order to close out the short position, and
any appreciation in the price of the borrowed securities would result in a loss. Uncovered short sales expose the Fund to the risk of
uncapped losses until a position can be closed out due to the lack of an upper limit on the price to which a security may rise. Purchasing
securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.
There is the risk that the securities borrowed by the Fund in connection with a short-sale must be returned to the securities lender
on short notice. If a request for return of borrowed securities occurs at a time when other short-sellers of the security are receiving
similar requests, a “short squeeze” can occur, and the Fund may be compelled to replace borrowed securities previously sold
short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds
received at the time the securities were originally sold short.
In
September 2008, in response to spreading turmoil in the financial markets, the SEC temporarily banned short selling in the stocks
of numerous financial services companies, and also promulgated new disclosure requirements with respect to short positions held by investment
managers. The SEC’s temporary ban on short
selling
of such stocks has since expired, but should similar restrictions and/or additional disclosure requirements be promulgated, especially
if market turmoil occurs, the Fund may be forced to cover short positions more quickly than otherwise intended and may suffer losses
as a result. Such restrictions may also adversely affect the ability of the Fund to execute its investment strategies generally. Similar
emergency orders were also instituted in non-U.S. markets in response to increased volatility. The Fund’s ability to engage in
short sales is also restricted by various regulatory requirements relating to short sales.
Industry
Concentration Risk. The Fund invests a significant portion of its assets in companies in the telecommunications, media, publishing,
and entertainment industries, also known as communication services companies, and, as a result, the value of the Fund’s shares
is more susceptible to factors affecting those particular types of companies and those industries, including governmental regulation,
a greater price volatility than the overall market, rapid obsolescence of products and services, intense competition, and strong market
reactions to technological developments. Fluctuating domestic and international demand, shifting demographics and often unpredictable
changes in consumer tastes can drastically affect a communication services company’s profitability. In addition, while all companies
may be susceptible to network security breaches, certain companies in the communication services sector may be particular targets of
hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect
on their businesses.
Various
types of ownership restrictions are imposed by the Federal Communications Commission, or FCC, on investment in media companies and cellular
licensees. For example, the FCC’s broadcast and cable multiple-ownership and cross ownership rules, which apply to the radio, television,
and cable industries, provide that investment advisers are deemed to have an “attributable” interest whenever the adviser
has the right to determine how five percent or more of the issued and outstanding voting stock of a broadcast company or cable system
operator may be voted. These rules limit the number of broadcast stations both locally and nationally that a single entity is permitted
to own, operate, or control and prohibit ownership of certain competitive communications providers in the same location. The FCC also
applies limited ownership restrictions on cellular licensees serving rural areas. An attributable interest in a cellular company arises
from the right to control 20% or more of its voting stock.
Attributable
interests that may result from the role of the Investment Adviser and its principals in connection with other funds, managed accounts
and companies may limit the Fund’s ability to invest in certain mass media and cellular companies. In the event that the Investment
Adviser and its affiliates may be deemed to have such an attributable interest, the Board of the Fund may delegate, from time to time,
to the Fund’s Proxy Voting Committee, voting power over certain shares of securities held by the Fund in view of these ownership
limitations to ensure compliance with certain FCC regulations.
The
costs of complying with governmental regulations, delays or failure to receive required regulatory approvals, or the enactment of new
regulatory requirements may negatively affect the business of communications companies. Government actions around the world, specifically
in the area of pre-marketing clearance of products and prices, can be arbitrary and unpredictable. The telecommunications, media, publishing,
and entertainment industries can also be significantly affected by intense competition for market share, including competition with alternative
technologies such as wireless communications, product compatibility and standardization, consumer preferences, rapid product obsolescence,
research and development of new products, lack of standardization or compatibility with existing technologies, and a dependency on patent
and copyright protections. Communication
services
companies may encounter distressed cash flows due to the need to commit substantial capital to meet increasing competition, particularly
in developing new products and services using new technology. Technological innovations may make the products and services of certain
communications companies obsolete.
Telecommunications
providers with exposure to the U.S. are generally required to obtain franchises or licenses in order to provide services in a given location.
Licensing and franchise rights in the telecommunications sector are limited, which may provide an advantage to certain participants.
Limited availability of such rights, high barriers to market entry and regulatory oversight, among other factors, have led to consolidation
of companies within the sector, which could lead to further regulation or other negative effects in the future. Telecommunication providers
investing in non-U.S. countries may be subject to similar risks. Additional risks include those related to competitive challenges in
the U.S. from non-U.S. competitors engaged in strategic joint ventures with U.S. companies and in non-U.S. markets from both U.S. and
non-U.S. competitors.
Companies
in the media and entertainment industries can be significantly affected by several factors, including competition, particularly in formulation
of products and services using new technologies, cyclicality of revenues and earnings, a potential decrease in the discretionary income
of targeted individuals, changing consumer tastes and interests, and the potential increase in government regulation. Companies in the
media and entertainment industries may become obsolete quickly. Advertising spending can be an important revenue source for media and
entertainment companies. During economic downturns advertising spending typically decreases and, as a result, media and entertainment
companies tend to generate less revenue.
Smaller
Companies Investment Risk. The Fund may invest in the securities of smaller, less seasoned companies. Smaller companies offer
investment opportunities and additional risks. They may not be well known to the investing public, may not be significantly owned by
institutional investors and may not have steady earnings growth. These companies may have limited product lines and markets, as well
as shorter operating histories, less experienced management and more limited financial resources than larger companies. In addition,
the securities of such companies may be more vulnerable to adverse general market or economic developments, more volatile in price, have
wider spreads between their bid and ask prices and have significantly lower trading volumes than the securities of larger capitalization
companies. As such, securities of these smaller companies may be less liquid than those of larger companies, and may experience greater
price fluctuations than larger companies. In addition, small-cap or mid-cap company securities may not be widely followed by investors,
which may result in reduced demand.
As
a result, the purchase or sale of more than a limited number of shares of the securities of a smaller company may affect its market price.
The Investment Adviser may need a considerable amount of time to purchase or sell its positions in these securities, particularly when
other Investment Adviser-managed accounts or other investors are also seeking to purchase or sell them.
The
securities of smaller capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price
changes than larger capitalization securities or the market as a whole. In addition, smaller capitalization securities may be particularly
sensitive to changes in interest rates, borrowing costs and earnings. Investing in smaller capitalization securities requires a longer-term
view.
Securities
of emerging companies may lack an active secondary market and may be subject to more abrupt or erratic price movements than securities
of larger, more established companies or stock market averages in
general.
Competitors of certain companies, which may or may not be in the same industry, may have substantially greater financial resources than
the companies in which the Fund may invest.
Market
Value and Net Asset Value. The Fund is a diversified, closed-end management investment company. Shares of closed-end funds are
bought and sold in the securities markets and may trade at either a premium to or discount from net asset value. Listed shares of closed-end
investment companies often trade at discounts from net asset value. This characteristic of shares of a closed-end fund is a risk separate
and distinct from the risk that its net asset value may decrease. The Fund cannot predict whether its listed stock will trade at, below,
or above net asset value. As of December 31, 2023, the shares of common stock traded at a premium of 51.60%. Stockholders desiring
liquidity may, subject to applicable securities laws, trade their Fund common stock on the NYSE or other markets on which such shares
may trade at the then-current market value, which may differ from the then-current net asset value. Stockholders will incur brokerage
or other transaction costs to sell stock.
Foreign
Securities Risk. Investments in the securities of foreign issuers involve certain considerations and risks not ordinarily associated
with investments in securities of domestic issuers and such securities may be more volatile than those of issuers located in the United
States. Foreign companies are not generally subject to uniform accounting, auditing and financial standards and requirements comparable
to those applicable to U.S. companies.
Foreign
securities exchanges, brokers and listed companies may be subject to less government supervision and regulation than exists in the United
States. Dividend and interest income may be subject to withholding and other foreign taxes, which may adversely affect the net return
on such investments. There may be difficulty in obtaining or enforcing a court judgment abroad. In addition, it may be difficult to effect
repatriation of capital invested in certain countries. In addition, with respect to certain countries, there are risks of expropriation,
confiscatory taxation, political or social instability or diplomatic developments that could affect assets of the Fund held in foreign
countries. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment applicable to
qualified dividend income. Moreover, certain equity investments in foreign issuers classified as passive foreign investment companies
may be subject to additional taxation risk.
There
may be less available information about a foreign company than a U.S. company, and foreign companies may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to or as uniform as those of U.S. companies. Foreign securities
markets may have substantially less volume than U.S. securities markets and some foreign company securities are less liquid and their
prices more volatile than securities of otherwise comparable U.S. companies. A portfolio of foreign securities may also be adversely
affected by fluctuations in the rates of exchange between the currencies of different nations and by exchange control regulations, and
there is generally less government supervision and regulation of exchanges, brokers, and issuers than there is in the U.S. The Fund might
have greater difficulty taking appropriate legal action in non-U.S. courts and there may be less developed bankruptcy laws. Foreign markets
also have different clearance and settlement procedures that could cause the Fund to encounter difficulties in purchasing and selling
securities on such markets and may result in the Fund missing attractive investment opportunities or experiencing loss. In addition,
a portfolio that includes foreign securities can expect to have a higher expense ratio because of the increased transaction costs on
non-U.S. securities markets and the increased costs of maintaining the custody of foreign securities.
Investments
in foreign securities will expose the Fund to the direct or indirect consequences of political, social or economic changes in the countries
that issue the securities or in which the issuers are located. Certain countries in which the Fund may invest have historically experienced,
and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and unemployment. Many of these countries are also characterized by political
uncertainty and instability. The cost of servicing external debt will generally be adversely affected by rising international interest
rates because many external debt obligations bear interest at rates which are adjusted based upon international interest rates.
The
Fund also may purchase ADRs or U.S. dollar-denominated securities of foreign issuers. ADRs are receipts issued by U.S. banks or trust
companies in respect of securities of foreign issuers held on deposit for use in the U.S. securities markets. While ADRs may not necessarily
be denominated in the same currency as the securities into which they may be converted, many of the risks associated with foreign securities
may also apply to ADRs. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered
depositary receipts, are under no obligation to distribute stockholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities.
The
following provides more detail on certain pronounced risks with foreign investing:
|
● |
Foreign
Currency Risk. The Fund may invest in companies whose securities are denominated or quoted in currencies other than U.S. dollars
or have significant operations or markets outside of the United States. In such instances, the Fund will be exposed to currency risk,
including the risk of fluctuations in the exchange rate between U.S. dollars (in which the Fund’s shares are denominated) and
such foreign currencies, the risk of currency devaluations and the risks of non-exchangeability and blockage. As non-U.S. securities
may be purchased with and payable in currencies of countries other than the U.S. dollar, the value of these assets measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates and exchange control regulations. Fluctuations in currency
rates may adversely affect the ability of the Investment Adviser to acquire such securities at advantageous prices and may also adversely
affect the performance of such assets. |
Certain
non-U.S. currencies, primarily in developing countries, have been devalued in the past and might face devaluation in the future. Currency
devaluations generally have a significant and adverse impact on the devaluing country’s economy in the short and intermediate term
and on the financial condition and results of companies’ operations in that country. Currency devaluations may also be accompanied
by significant declines in the values and liquidity of equity and debt securities of affected governmental and private sector entities
generally. To the extent that affected companies have obligations denominated in currencies other than the devalued currency, those companies
may also have difficulty in meeting those obligations under such circumstances, which in turn could have an adverse effect upon the value
of the Fund’s investments in such companies. There can be no assurance that current or future developments with respect to foreign
currency devaluations will not impair the Fund’s investment flexibility, its ability to achieve its investment objectives or the
value of certain of its foreign currency-denominated investments.
|
● |
Tax
Consequences of Foreign Investing. The Fund’s transactions in foreign currencies, foreign currency-denominated debt obligations
and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary
income or loss to the extent such income |
|
|
or loss results from fluctuations in the
value of the foreign currency concerned. This treatment could increase or decrease the Fund’s ordinary income distributions
to you, and may cause some or all of the Fund’s previously distributed income to be classified as a return of capital. In certain
cases, the Fund may make an election to treat gain or loss attributable to certain investments as capital gain or loss. |
|
● |
EMU
and Redenomination Risk. As the European debt crisis progressed, the possibility of one or more Eurozone countries exiting the
European Monetary Union (“EMU”), or even the collapse of the Euro as a common currency, arose, creating significant
volatility at times in currency and financial markets generally. The effects of the collapse of the Euro, or of the exit of one
or more countries from the EMU, on the U.S. and global economy and securities markets are impossible to predict and any such events
could have a significant adverse impact on the value and risk profile of the Fund’s portfolio. Any partial or complete dissolution
of the EMU could have significant adverse effects on currency and financial markets, and on the values of the Fund’s portfolio
investments. If one or more EMU countries were to stop using the Euro as its primary currency, the Fund’s investments in such
countries may be redenominated into a different or newly adopted currency. As a result, the value of those investments could decline
significantly and unpredictably. In addition, securities or other investments that are redenominated may be subject to foreign currency
risk, liquidity risk and valuation risk to a greater extent than similar investments currently denominated in Euros. To the extent
a currency used for redenomination purposes is not specified in respect of certain EMU-related investments, or should the Euro cease
to be used entirely, the currency in which such investments are denominated may be unclear, making such investments particularly
difficult to value or dispose of. The Fund may incur additional expenses to the extent it is required to seek judicial or other clarification
of the denomination or value of such securities. |
|
● |
Emerging
Markets Risk. The considerations noted above in “Foreign Securities Risk” are generally intensified for investments
in emerging market countries. Emerging market countries typically have economic and political systems that are less fully developed,
and can be expected to be less stable than those of more developed countries. Investing in securities of companies in emerging markets
may entail special risks relating to potential political and economic instability and the risks of expropriation, nationalization,
confiscation or the imposition of restrictions on foreign investment, the lack of hedging instruments and restrictions on repatriation
of capital invested. Economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Emerging
securities markets are substantially smaller, less developed, less liquid and more volatile than the major securities markets. The
limited size of emerging securities markets and limited trading volume compared to the volume of trading in U.S. securities could
cause prices to be erratic for reasons apart from factors that affect the quality of the securities. For example, limited market
size may cause prices to be unduly influenced by traders who control large positions. Adverse publicity and investors’ perceptions,
whether or not based on fundamental analysis, may decrease the value and liquidity of portfolio securities, especially in these markets.
Other risks include high concentration of market capitalization and trading volume in a small number of issuers representing a limited
number of industries, as well as a high concentration of investors and financial intermediaries; overdependence on exports, including
gold and natural resources exports, making these economies vulnerable to changes in commodity prices; overburdened infrastructure
and obsolete or unseasoned financial systems; environmental problems; less developed legal systems; and less reliable securities
custodial services and settlement practices. Certain emerging markets may also face other significant |
|
|
internal or external risks, including the
risk of war and civil unrest. For all of these reasons, investments in emerging markets may be considered speculative. |
|
● |
Eurozone
Risk. A number of countries in the EU have experienced, and may continue to experience, severe economic and financial difficulties.
In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments
in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. As a result, financial markets in the EU have
been subject to increased volatility and declines in asset values and liquidity. Responses to these financial problems by European
governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and
may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments
and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Greece, Ireland, and Portugal have already received one or more “bailouts” from other Eurozone member states, and it
is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future.
One or more other countries may also abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching. |
|
● |
Brexit
Risk. On January 31, 2020, the United Kingdom officially withdrew from the EU, commonly referred to as “Brexit.”
Following a transition period, the United Kingdom and the EU signed a Trade and Cooperation Agreement (“UK/EU Trade Agreement”),
which came into full force on May 1, 2021 and set out the foundation of the economic and legal framework for trade between the
United Kingdom and the EU. As the UK/EU Trade Agreement is a new legal framework, the implementation of the UK/EU Trade Agreement
may result in uncertainty in its application and periods of volatility in both the United Kingdom and wider European markets. The
United Kingdom’s exit from the EU is expected to result in additional trade costs and disruptions in this trading relationship.
Furthermore, there is the possibility that either party may impose tariffs on trade in the future in the event that regulatory standards
between the EU and the UK diverge. The terms of the future relationship may cause continued uncertainty in the global financial markets,
and adversely affect our ability, and the ability of our portfolio companies, to execute our respective strategies and to receive
attractive returns. |
In
particular, currency volatility may mean that our returns and the returns of our portfolio companies will be adversely affected by market
movements and may make it more difficult, or more expensive, for us to implement appropriate currency hedging. Potential declines in
the value of the British Pound and/or the euro against other currencies, along with the potential downgrading of the United Kingdom’s
sovereign credit rating, may also have an impact on the performance of any of our portfolio companies located in the United Kingdom or
Europe.
In
addition, certain European countries have experienced negative interest rates on certain fixed-income instruments. A negative interest
rate policy is an unconventional central bank monetary policy tool where nominal target interest rates are set with a negative value
(i.e., below zero percent) intended to help create self-sustaining growth in the local economy. Negative interest rates may result in
heightened market volatility and may detract from the Fund’s performance to the extent the Fund is exposed to such interest rates.
Among other things, these developments adversely affected the value and exchange rate of the euro and pound sterling, and
any
similar developments may continue to significantly affect the economies of all EU countries, which in turn may have a material adverse
effect on the Fund’s investments in such countries, other countries that depend on EU countries for significant amounts of trade
or investment, or issuers with exposure to debt issued by certain EU countries.
To
the extent the Fund has exposure to European markets or to transactions tied to the value of the euro, these events could negatively
affect the value and liquidity of the Fund’s investments. All of these developments may continue to significantly affect the economies
of all EU countries, which in turn may have a material adverse effect on the Fund’s investments in such countries, other countries
that depend on EU countries for significant amounts of trade or investment, or issuers with exposure to debt issued by certain EU countries.
In
addition, certain European countries have recently experienced negative interest rates on certain fixed-income instruments. A negative
interest rate policy is an unconventional central bank monetary policy tool where nominal target interest rates are set with a negative
value (i.e., below zero percent) intended to help create self-sustaining growth in the local economy. Negative interest rates may result
in heightened market volatility and may detract from the Fund’s performance to the extent the Fund is exposed to such interest
rates. Among other things, these developments have adversely affected the value and exchange rate of the euro and pound sterling, and
any similar developments may continue to significantly affect the economies of all EU countries, which in turn may have a material adverse
effect on the Fund’s investments in such countries, other countries that depend on EU countries for significant amounts of trade
or investment, or issuers with exposure to debt issued by certain EU countries.
To
the extent the Fund has exposure to European markets or to transactions tied to the value of the euro, these events could negatively
affect the value and liquidity of the Fund’s investments. All of these developments may continue to significantly affect the economies
of all EU countries, which in turn may have a material adverse effect on the Fund’s investments in such countries, other countries
that depend on EU countries for significant amounts of trade or investment, or issuers with exposure to debt issued by certain EU countries.
Special
Risks Related to Investment in Derivative Transactions. The Fund may participate in certain derivative transactions, as described
herein. Such transactions entail certain execution, market, liquidity, counterparty, correlation, volatility, hedging and tax risks.
Participation in the options or futures markets, in currency exchange transactions and in other derivatives transactions involves investment
risks and transaction costs to which the Fund would not be subject absent the use of these strategies. If the Investment Adviser’s
prediction of movements in the direction of the securities, foreign currency, interest rate or other referenced instruments or markets
is inaccurate, the consequences to the Fund may leave the Fund in a worse position
than
if it had not used such strategies. Risks inherent in the use of options, swaps, foreign currency, futures contracts and options on futures
contracts, securities indices and foreign currencies include:
|
● |
dependence
on the Investment Adviser’s ability to predict correctly movements in the direction of the relevant measure; |
|
● |
imperfect
correlation between the price of the derivative instrument and movements in the prices of the referenced assets; |
|
● |
the
fact that skills needed to use these strategies are different from those needed to select portfolio securities; |
|
● |
the
possible absence of a liquid secondary market for any particular instrument at any time; |
|
● |
the
possible need to defer closing out certain hedged positions to avoid adverse tax consequences; |
|
● |
the
possible inability of the Fund to purchase or sell a security or instrument at a time that otherwise would be favorable for it to
do so, or the possible need for the Fund to sell a security or instrument at a disadvantageous time due to a need for the Fund to
remain in compliance with the 1940 Act restrictions regarding derivatives transactions; and |
|
● |
the
creditworthiness of counterparties. |
Options,
futures contracts, swaps contracts, and options thereon and forward contracts on securities and currencies may be traded on foreign exchanges.
Such transactions may not be regulated as effectively as similar transactions in the United States, may not involve a clearing mechanism
and related guarantees, and are subject to the risk of governmental actions affecting trading in, or the prices of, foreign securities.
The value of such positions also could be adversely affected by (i) other complex foreign political, legal and economic factors, (ii)
lesser availability than in the United States of data on which to make trading decisions, (iii) delays in the ability of the Fund to
act upon economic events occurring in the foreign markets during non-business hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements than in the United States, and (v) less trading volume. Exchanges
on which options, futures, swaps and options on futures or swaps are traded may impose limits on the positions that the Fund may take
in certain circumstances.
Many
OTC derivatives are valued on the basis of dealers’ pricing of these instruments. However, the price at which dealers value a particular
derivative and the price which the same dealers would actually be willing to pay for such derivative should the Fund wish or be forced
to sell such position may be materially different. Such differences can result in an overstatement of the Fund’s net asset value
and may materially adversely affect the Fund in situations in which the Fund is required to sell derivative instruments. Exchange-traded
derivatives and OTC derivative transactions submitted for clearing through a central counterparty have become subject to minimum initial
and variation margin requirements set by the relevant clearinghouse, as well as possible margin requirements mandated by the SEC or the
CFTC. These regulators also have broad discretion to impose margin requirements on non-cleared OTC derivatives. These margin requirements
will increase the overall costs for the Fund.
While
hedging can reduce or eliminate losses, it can also reduce or eliminate gains. Hedges are sometimes subject to imperfect matching between
the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective.
Derivatives may give rise to a form of leverage and may
expose
the Fund to greater risk and increase its costs. Future CFTC or SEC rulemakings could potentially further limit or completely restrict
the Fund’s ability to use these instruments as a part of the Fund’s investment strategy, increase the costs of using these
instruments or make them less effective. Limits or restrictions applicable to the counterparties with which the Fund engages in derivative
transactions could also prevent the Fund from using these instruments or affect the pricing or other factors relating to these instruments
or may change the availability of certain investments. New regulation may make derivatives more costly, may limit the availability of
derivatives, or may otherwise adversely affect the value or performance of derivatives.
Securities
of Investment Companies Risk. To the extent permitted by law, the Fund may invest in investment company securities, including
preferred stock and the common equity of such companies. Investments in the common equity of investment companies will cause the Fund
to bear a ratable share of any such investment company’s expenses, including management fees. The Fund will also remain obligated
to pay management fees to the Investment Adviser with respect to the assets invested in any securities of another investment company.
In these circumstances, holders of the Fund’s common stock will be subject to duplicative investment expenses.
Long-Term
Objective; Not a Complete Investment Program Risk. The Fund is intended for investors seeking long-term capital growth. The Fund
is not meant to provide a vehicle for those who wish to exploit short-term swings in the stock market. An investment in shares of the
Fund should not be considered a complete investment program. Each stockholder should take into account the Fund’s investment objectives
as well as the stockholder’s other investments when considering an investment in the Fund.
Management
Risk. The Fund is subject to management risk because it is an actively managed portfolio. The Investment Adviser will apply investment
techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired
results.
Dependence
on Key Personnel Risk. The Investment Adviser is dependent upon the expertise of Mr. Mario J. Gabelli in providing advisory
services with respect to the Fund’s investments. If the Investment Adviser were to lose the services of Mr. Gabelli, its ability
to service the Fund could be adversely affected. There can be no assurance that a suitable replacement could be found for Mr. Gabelli
in the event of his death, resignation, retirement or inability to act on behalf of the Investment Adviser.
Market
Disruption and Geopolitical Risk. General economic and market conditions, such as interest rates, availability of credit, inflation
rates, economic uncertainty, supply chain disruptions, labor shortages, energy and other resource shortages, changes in laws, trade barriers,
currency exchange controls and national and international political circumstances (including governmental responses to public health
crises or the spread of infectious diseases), may have long-term negative effects on the U.S. and worldwide financial markets and economy.
These conditions have resulted in, and in many cases continue to result in, greater price volatility, less liquidity, widening credit
spreads and a lack of price transparency, with many securities remaining illiquid and of uncertain value. Such market conditions may
adversely affect the Company, including by making valuation of some of the Fund’s securities uncertain and/or result in sudden
and significant valuation increases or declines in the Fund’s holdings.
Risks
resulting from any future debt or other economic crisis could also have a detrimental impact on the global economy, the financial condition
of financial institutions and the Fund’s business, financial condition and results of operation. Market and economic disruptions
have affected, and may in the future affect, consumer confidence
levels
and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. To the
extent uncertainty regarding the U.S. or global economy negatively impacts consumer confidence and consumer credit factors, the Fund
could be significantly and adversely affected. Downgrades to the credit ratings of major banks could result in increased borrowing costs
for such banks and negatively affect the broader economy. Moreover, Federal Reserve policy, including with respect to certain interest
rates, may also adversely affect the value, volatility and liquidity of dividend- and interest-paying securities. Market volatility,
rising interest rates and/or a return to unfavorable economic conditions could impair the Fund’s ability to achieve its investment
objectives.
The
occurrence of events similar to those in recent years, such as localized wars, instability, new and ongoing pandemics, epidemics or outbreaks
of infectious diseases in certain parts of the world, and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes
and global health epidemics, terrorist attacks in the U.S. and around the world, social and political discord, debt crises sovereign
debt downgrades, increasingly strained relations between the U.S. and a number of foreign countries, new and continued political unrest
in various countries, the exit or potential exit of one or more countries from the EU or the EMU, continued changes in the balance of
political power among and within the branches of the U.S. government, government shutdowns, among others, may result in market volatility,
may have long-term effects on the U.S. and worldwide financial markets, and may cause further economic uncertainties in the U.S. and
worldwide.
In
particular, the consequences of the Russian military invasion of Ukraine, the impact on inflation and increased disruption to supply
chains and energy resources may impact the Fund’s portfolio companies, result in an economic downturn or recession either globally
or locally in the U.S. or other economies, reduce business activity, spawn additional conflicts (whether in the form of traditional military
action, reignited “cold” wars or in the form of virtual warfare such as cyberattacks) with similar and perhaps wider ranging
impacts and consequences and have an adverse impact on the Fund’s returns and net asset values. In response to the conflict between
Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia, Russian-backed separatist
regions in Ukraine, and certain banks, companies, government officials and other individuals in Russia and Belarus. Any of the above
factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect
on the Fund. The Fund has no way to predict the duration or outcome of the situation, as the conflict and government reactions are rapidly
developing and beyond the Fund’s control. Prolonged unrest, military activities, or broad-based sanctions could have a material
adverse effect on companies in which the Fund invests. Such consequences also may increase such companies’ funding costs or limit
their access to the capital markets.
The
current political climate has intensified concerns about a potential trade war between China and the U.S., as each country has imposed
tariffs on the other country’s products. These actions may trigger a significant reduction in international trade, the oversupply
of certain manufactured goods, substantial price reductions of goods and possible failure of individual companies and/or large segments
of China’s export industry, which could have a negative impact the Fund’s performance. U.S. companies that source material
and goods from China and those that make large amounts of sales in China would be particularly vulnerable to an escalation of trade tensions.
Uncertainty regarding the outcome of the trade tensions and the potential for a trade war could cause the U.S. dollar to decline against
safe haven currencies, such as the Japanese yen and the euro. Events such as these and their consequences are difficult to predict and
it is unclear whether further tariffs may
be
imposed or other escalating actions may be taken in the future. Any of these effects could have a material adverse effect on the Fund.
Periods
of volatility still remain, and risks to a robust resumption of growth persist. Federal Reserve policy, including with respect to certain
interest rates, may adversely affect the value, volatility and liquidity of dividend and interest paying securities. Market volatility,
dramatic changes to interest rates and/or a return to unfavorable economic conditions may lower the Fund’s performance or impair
the Fund’s ability to achieve its investment objective.
Economic
Events and Market Risk. Periods of market volatility remain, and may continue to occur in the future, in response to various
political, social and economic events both within and outside of the United States. These conditions have resulted in, and in many cases
continue to result in, greater price volatility, less liquidity, widening credit spreads and a lack of price transparency, with many
securities remaining illiquid and of uncertain value. Such market conditions may adversely affect the Fund, including by making valuation
of some of the Fund’s securities uncertain and/or result in sudden and significant valuation increases or declines in the Fund’s
holdings. If there is a significant decline in the value of the Fund’s portfolio, this may impact the asset coverage levels for
the Fund’s outstanding leverage.
Risks
resulting from any future debt or other economic crisis could also have a detrimental impact on the global economic recovery, the financial
condition of financial institutions and our business, financial condition and results of operation. Market and economic disruptions have
affected, and may in the future affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and
default on consumer debt and home prices, among other factors. To the extent uncertainty regarding the U.S. or global economy negatively
impacts consumer confidence and consumer credit factors, our business, financial condition and results of operations could be significantly
and adversely affected. Downgrades to the credit ratings of major banks could result in increased borrowing costs for such banks and
negatively affect the broader economy. Moreover, Federal Reserve policy, including with respect to certain interest rates, may also adversely
affect the value, volatility and liquidity of dividend- and interest-paying securities. Market volatility, rising interest rates and/or
a return to unfavorable economic conditions could impair the Fund’s ability to achieve its investment objectives.
Regulation
and Government Intervention Risk. Changes enacted by the current presidential administration could significantly impact the regulation
of financial markets in the U.S. Areas subject to potential change, amendment or repeal include trade and foreign policy, corporate tax
rates, energy and infrastructure policies, the environment and sustainability, criminal and social justice initiatives, immigration,
healthcare and the oversight of certain federal financial regulatory agencies and the Federal Reserve. Certain of these changes can,
and have, been effectuated through executive order. For example, the current administration has taken steps to rejoin the Paris climate
accord of 2015 and incentivize certain clean energy technologies, cancel the Keystone XL pipeline, provide military support to Ukraine
and change immigration enforcement priorities. Other potential changes that could be pursued by the current presidential administration
could include an increase in the corporate income tax rate; changes to regulatory enforcement priorities; and spending on clean energy
and infrastructure. It is not possible to predict which, if any, of these actions will be taken or, if taken, their effect on the economy,
securities markets or the financial stability of the U.S. The Fund may be affected by governmental
action
in ways that are not foreseeable, and there is a possibility that such actions could have a significant adverse effect on the Fund and
the Fund’s ability to achieve its investment objectives.
Additional
risks arising from the differences in expressed policy preferences among the various constituencies in the branches of the U.S. government
has led in the past, and may lead in the future, to short-term or prolonged policy impasses, which could, and has, resulted in shutdowns
of the U.S. federal government. U.S. federal government shutdowns, especially prolonged shutdowns, could have a significant adverse impact
on the economy in general and could impair the ability of issuers to raise capital in the securities markets. Any of these effects could
have a material adverse effect on the Fund’s net asset value.
In
addition, the rules dealing with the U.S. federal income taxation are constantly under review by persons involved in the legislative
process and by the IRS and the U.S. Treasury Department. The Tax Cuts and Jobs Act made substantial changes to the Code. Among those
changes were a significant permanent reduction in the generally applicable corporate tax rate, changes in the taxation of individuals
and other non-corporate taxpayers that generally but not universally reduce their taxes on a temporary basis subject to “sunset”
provisions, the elimination or modification of various previously allowed deductions (including substantial limitations on the deductibility
of interest and, in the case of individuals, the deduction for personal state and local taxes), certain additional limitations on the
deduction of net operating losses, certain preferential rates of taxation on certain dividends and certain business income derived by
non-corporate taxpayers in comparison to other ordinary income recognized by such taxpayers, and significant changes to the international
tax rules. In addition, on August 16, 2022, the Biden administration signed into law the Inflation Reduction Act, which modifies
key aspects of the Code, including by creating an alternative minimum tax on certain corporations and an excise tax on stock repurchases
by certain corporations. The effect of these and other changes is uncertain, both in terms of the direct effect on the taxation of an
investment in the Fund’s shares and their indirect effect on the value of the Fund’s assets, Fund shares or market conditions
generally.
In
addition, the U.S. government has proposed and adopted multiple regulations that could have a long-lasting impact on the Fund and on
the closed-end fund industry in general. The SEC’s final rules and amendments that modernize reporting and disclosure, along with
other potential upcoming regulations, could, among other things, restrict the Fund’s ability to engage in transactions, and/or
increase overall expenses of the Fund.
The
Fund may be affected by governmental action in ways that are not foreseeable, and there is a possibility that such actions could have
a significant adverse effect on the Fund and its ability to achieve its investment objective(s).
LIBOR
Risk. The Fund may be exposed to financial instruments that are tied to the London Interbank Offered Rate (“LIBOR”)
to determine payment obligations, financing terms, hedging strategies or investment value. The Fund’s investments may pay interest
at floating rates based on LIBOR or may be subject to interest caps or floors based on LIBOR. The Fund may also obtain financing at floating
rates based on LIBOR. Derivative instruments utilized by the Fund may also reference LIBOR.
In
July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the
end of 2021. LIBOR can no longer be used to calculate new deals as of December 31, 2021. Since December 31, 2021, all sterling,
euro, Swiss franc and Japanese yen LIBOR settings and the 1-week and 2-month U.S. dollar LIBOR settings have ceased to be published or
are no longer representative.
Overnight
and 12-month US dollar LIBOR settings permanently ceased as of June 30, 2023. 1-, 3-, and 6-month U.S. dollar LIBOR settings will
continue to be published using a synthetic methodology until September 2024. Various financial industry groups have begun planning
for the transition away from LIBOR, but there are challenges to converting certain securities and transactions to a new reference rate.
Neither the effect of the LIBOR transition process nor its ultimate success can yet be known.
As
an alternative to LIBOR, the Financial Reporting Council, in conjunction with the Alternative Reference Rates Committee, a steering committee
comprised of large U.S. financial institutions, recommended replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”),
a new index calculated by reference to short-term repurchase agreements, backed by Treasury securities. Abandonment of, or modifications
to, LIBOR could have adverse impacts on newly issued financial instruments and any of our existing financial instruments which reference
LIBOR. Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark rate that may be established, there
are many uncertainties regarding a transition from LIBOR, including, but not limited to, the need to amend all contracts with LIBOR as
the referenced rate and how this will impact the cost of variable rate debt and certain derivative financial instruments. In addition,
SOFR or other replacement rates may fail to gain market acceptance. Any failure of SOFR or alternative reference rates to gain market
acceptance could adversely affect the return on, value of and market for securities linked to such rates.
Neither
the effect of the LIBOR transition process nor its ultimate success can yet be known. The transition process might lead to increased
volatility and illiquidity in markets for, and reduce the effectiveness of, new hedges placed against instruments whose terms currently
include LIBOR. While some existing LIBOR-based instruments may contemplate a scenario where LIBOR is no longer available by providing
for an alternative rate-setting methodology, there may be significant uncertainty regarding the effectiveness of any such alternative
methodologies to replicate LIBOR. Not all existing LIBOR-based instruments may have alternative rate-setting provisions and there remains
uncertainty regarding the willingness and ability of issuers to add alternative rate-setting provisions in certain existing instruments.
Moreover, these alternative rate-setting provisions may not be designed for regular use in an environment where LIBOR ceases to be published,
and may be an ineffective fallback following the discontinuation of LIBOR.
On
March 15, 2022, President Biden signed into law the Consolidated Appropriations Act of 2022, which among other things, provides
for the use of interest rates based on SOFR in certain contracts currently based on LIBOR and a safe harbor from liability for utilizing
SOFR-based interest rates as a replacement for LIBOR. The elimination of LIBOR could have an adverse impact on the market value of and/or
transferability of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us or
on our overall financial condition or results of operations.
Legal,
Tax and Regulatory Risks. Legal, tax and regulatory changes could occur that may have material adverse effects on the Fund or
its stockholders. For example, the regulatory and tax environment for derivative instruments in which the Fund may participate is evolving,
and such changes in the regulation or taxation of derivative instruments may have material adverse effects on the value of derivative
instruments held by the Fund and the ability of the Fund to pursue its investment strategies. Similarly, the Biden administration has
indicated that it intends to modify key aspects of the Code, including by increasing corporate and individual tax rates. Changes to the
U.S. federal tax laws and interpretations thereof could adversely affect an investment in the Fund.
We
cannot assure you what percentage of the distributions paid on the Fund’s shares, if any, will consist of tax-advantaged qualified
dividend income or long-term capital gains or what the tax rates on various types of income will be in future years.
To
qualify for the favorable U.S. federal income tax treatment generally accorded to RICs, the Fund must, among other things, meet certain
asset diversification tests, derive in each taxable year at least 90% of its gross income from certain prescribed sources and distribute
for each taxable year at least 90% of its “investment company taxable income.” Statutory limitations on distributions on
the common stock if the Fund fails to satisfy the 1940 Act’s asset coverage requirements could jeopardize the Fund’s ability
to meet such distribution requirements. While the Fund presently intends to purchase or redeem notes or preferred stock, if any, to the
extent necessary in order to maintain compliance with such asset coverage requirements, there can be no assurance that such actions can
be effected in time to meet the Code requirements. If for any taxable year the Fund does not qualify as a RIC, all of its taxable income
for that year (including its net capital gain) would be subject to tax at regular corporate rates without any deduction for distributions
to stockholders, and such distributions would be taxable as ordinary dividends to the extent of the Fund’s current and accumulated
earnings and profits. The resulting corporate taxes would materially reduce the Fund’s net assets and the amount of cash available
for distribution to stockholders.
1940
Act Regulation. The Fund is a registered closed-end investment company and as such is subject to regulations under the 1940 Act.
Generally speaking, any contract or provision thereof that is made, or where performance involves a violation of the 1940 Act or any
rule or regulation thereunder is unenforceable by either party unless a court finds otherwise.
Legislation
Risk. At any time after the date of this Annual Report, legislation may be enacted that could negatively affect the assets of
the Fund. Legislation or regulation may change the way in which the Fund itself is regulated. The Investment Adviser cannot predict the
effects of any new governmental regulation that may be implemented and there can be no assurance that any new governmental regulation
will not adversely affect the Fund’s ability to achieve its investment objectives.
Reliance
on Service Providers Risk. The Fund must rely upon the performance of service providers to perform certain functions, which may
include functions that are integral to the Fund’s operations and financial performance. Failure by any service provider to carry
out its obligations to the Fund in accordance with the terms of its appointment, to exercise due care and skill or to perform its obligations
to the Fund at all as a result of insolvency, bankruptcy or other causes could have a material adverse effect on the Fund’s performance
and returns to stockholders. The termination of the Fund’s relationship with any service provider, or any delay in appointing a
replacement for such service provider, could materially disrupt the business of the Fund and could have a material adverse effect on
the Fund’s performance and returns to stockholders.
Loans
of Portfolio Securities Risk. Consistent with applicable regulatory requirements and the Fund’s investment restrictions,
the Fund may lend its portfolio securities to securities broker-dealers or financial institutions, provided that such loans are callable
at any time by the Fund (subject to certain notice provisions), and are at all times collateralized in accordance with applicable regulatory
requirements. The advantage of such loans is that the Fund continues to receive the income on the loaned securities while at the same
time earning interest on the cash amounts deposited as collateral, which will be invested in short-term obligations. The Fund
will
not lend its portfolio securities if such loans are not permitted by the laws or regulations of any state in which its shares are qualified
for sale.
Cybersecurity
Risk. The Fund and its service providers are susceptible to cyber security risks that include, among other things, theft, unauthorized
monitoring, release, misuse, loss, destruction or corruption of confidential and highly restricted data; denial of service attacks; unauthorized
access to relevant systems, compromises to networks or devices that the Fund and its service providers use to service the Fund’s
operations; or operational disruption or failures in the physical infrastructure or operating systems that support the Fund and its service
providers. Cyber attacks are becoming increasingly common and more sophisticated, and may be perpetrated by computer hackers, cyber-terrorists
or others engaged in corporate espionage. Cyber attacks against or security breakdowns of the Fund or its service providers may adversely
impact the Fund and its stockholders, potentially resulting in, among other things, financial losses; the inability of Fund stockholders
to transact business and the Fund to process transactions; inability to calculate the Fund’s net asset value; violations of applicable
privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs; and/ or additional
compliance costs. The Fund may incur additional costs for cyber security risk management and remediation purposes. In addition, cyber
security risks may also impact issuers of securities in which the Fund invests, which may cause the Fund’s investment in such issuers
to lose value. There have been a number of recent highly publicized cases of companies reporting the unauthorized disclosure of client
or customer information, as well as cyberattacks involving the dissemination, theft and destruction of corporate information or other
assets, as a result of failure to follow procedures by employees or contractors or as a result of actions by third parties, including
actions by terrorist organizations and hostile foreign governments. Although service providers typically have policies and procedures,
business continuity plans and/or risk management systems intended to identify and mitigate cyber incidents, there are inherent limitations
in such plans and systems including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control
the cyber security policies, plans and systems put in place by its service providers or any other third parties whose operations may
affect the Fund or its stockholders. There can be no assurance that the Fund or its service providers will not suffer losses relating
to cyber attacks or other information security breaches in the future.
Because
technology is consistently changing, new ways to carry out cyber attacks are always developing. Therefore, there is a chance that some
risks have not been identified or prepared for, or that an attack may not be detected, which puts limitations on the Fund’s ability
to plan for or respond to a cyber attack. In addition to deliberate cyber attacks, unintentional cyber incidents can occur, such as the
inadvertent release of confidential information by the Fund or its service providers. Like other funds and business enterprises, the
Fund and its service providers are subject to the risk of cyber incidents occurring from time to time.
Misconduct
of Employees and of Service Providers Risk. Misconduct or misrepresentations by employees of the Investment Adviser or the Fund’s
service providers could cause significant losses to the Fund. Employee misconduct may include binding the Fund to transactions that exceed
authorized limits or present unacceptable risks and unauthorized trading activities, concealing unsuccessful trading activities (which,
in any case, may result in unknown and unmanaged risks or losses) or making misrepresentations regarding any of the foregoing. Losses
could also result from actions by the Fund’s service providers, including, without limitation, failing to recognize trades and
misappropriating assets. In addition, employees and service providers may improperly use or disclose confidential information, which
could result in litigation or serious financial harm, including limiting
the
Fund’s business prospects or future marketing activities. Despite the Investment Adviser’s due diligence efforts, misconduct
and intentional misrepresentations may be undetected or not fully comprehended, thereby potentially undermining the Investment Adviser’s
due diligence efforts. As a result, no assurances can be given that the due diligence performed by the Investment Adviser will identify
or prevent any such misconduct.
Anti-Takeover
Provisions. The Fund’s Governing Documents include provisions that could limit the ability of other entities or persons
to acquire control of the Fund or convert the Fund to an open-end fund.
Special
Risks to Holders of Common Stock
Dilution
Risk. If the Fund determines to conduct a rights offering to subscribe for common stock, holders of common stock may experience
dilution or accretion of the aggregate net asset value of their common stock. Such dilution or accretion will depend upon whether (i)
such stockholders participate in the rights offering and (ii) the Fund’s net asset value per common share is above or below the
subscription price on the expiration date of the rights offering.
Stockholders
who do not exercise their subscription rights may, at the completion of such an offering, own a smaller proportional interest in the
Fund than if they exercised their subscription rights. As a result of such an offering, a stockholder may experience dilution in net
asset value per share if the subscription price per share is below the net asset value per share on the expiration date. If the subscription
price per share is below the net asset value per share of the Fund’s shares on the expiration date, a stockholder will experience
an immediate dilution of the aggregate net asset value of such stockholder’s shares if the stockholder does not participate in
such an offering and the stockholder will experience a reduction in the net asset value per share of such stockholder’s shares
whether or not the stockholder participates in such an offering. The Fund cannot state precisely the extent of this dilution (if any)
if the stockholder does not exercise such stockholder’s subscription rights because the Fund does not know what the net asset value
per share will be when the offer expires or what proportion of the subscription rights will be exercised.
Leverage
Risk. The Fund uses financial leverage for investment purposes by issuing preferred stock. The amount of leverage represents
approximately 43% of the Fund’s Managed Assets (defined as the aggregate net asset value of outstanding shares of common stock
plus assets attributable to outstanding shares of preferred stock, with no deduction for the liquidation preference of such shares of
preferred stock) as of December 31, 2023.
The
Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having a similar investment objective
and policies. These include the possibility of greater loss and the likelihood of higher volatility of the net asset value of the Fund
and the asset coverage for the preferred stock. Such volatility may increase the likelihood of the Fund having to sell investments in
order to meet its obligations to make distributions on the preferred stock or principal or interest payments on debt securities, or to
redeem preferred stock or repay debt, when it may be disadvantageous to do so. The Fund’s use of leverage may require it to sell
portfolio investments at inopportune times in order to raise cash to redeem preferred stock or otherwise de-leverage so as to maintain
required asset coverage amounts or comply with the mandatory redemption terms of any outstanding preferred stock. The use of leverage
magnifies both the favorable and unfavorable effects of price movements in the investments made by the Fund. To the extent that the Fund
employs leverage in its investment operations, the Fund is subject to substantial risk of loss. The Fund cannot assure you that
borrowings
or the issuance of preferred stock will result in a higher yield or return to the holders of the common stock. Also, since the Fund utilizes
leverage, a decline in net asset value could affect the ability of the Fund to make common share distributions and such a failure to
make distributions could result in the Fund ceasing to qualify as a RIC under the Code.
Because
the advisory fee paid to the Investment Adviser is calculated on the basis of the Fund’s Managed Assets rather than only on the
basis of net assets attributable to the shares of common stock, the fee may be higher when leverage is utilized, giving the Investment
Adviser an incentive to utilize leverage. However, the Investment Adviser has agreed to reduce any management fee on the incremental
assets attributable to the cumulative preferred stock during the fiscal year if the total return of the net asset value of the outstanding
shares of common stock, including distributions and advisory fee subject to reduction for that year, does not exceed the stated dividend
rate or corresponding swap rate of each particular series of preferred stock. This fee waiver will not apply to any preferred stock issued
from this offering. The Investment Adviser currently intends that the voluntary advisory fee waiver will remain in effect for as long
as the Series C Auction Rate Preferred Stock, Series E Preferred and Series G Preferred are outstanding. The Investment Adviser, however,
reserves the right to modify or terminate the voluntary advisory fee waiver at any time.
|
● |
Portfolio
Guidelines of Rating Agencies for Preferred Stock and/or Credit Facility. In order to obtain and maintain attractive credit quality
ratings for preferred stock, the Fund must comply with investment quality, diversification and other guidelines established by the
relevant rating agencies. These guidelines could affect portfolio decisions and may be more stringent than those imposed by the 1940
Act. In the event that a rating on the Fund’s preferred stock is lowered or withdrawn by the relevant rating agency, the Fund
may also be required to redeem all or part of its outstanding preferred stock, and the common stock of the Fund will lose the potential
benefits associated with a leveraged capital structure. |
The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on common stock
total return, assuming investment portfolio total returns (comprised of net investment income of the Fund, realized gains or losses of
the Fund and changes in the value of the securities held in the Fund’s portfolio) of -10%, -5%. 0%, 5% and 10%. These assumed investment
portfolio returns are hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected
to be experienced by the Fund. The table further reflects leverage representing 43% of the Fund’s net assets, the Fund’s
current projected blended annual average leverage dividend or interest rate of 5.14%, a management fee at an annual rate of 1.00% of
the liquidation preference of any outstanding preferred stock and estimated annual incremental expenses attributable to any outstanding
preferred stock 0.08% of the Fund’s net assets attributable to common stock.
Assumed
Return on Portfolio (Net of Expenses) |
|
|
(10.0 |
)% |
|
|
(5.0 |
)% |
|
|
0.0 |
% |
|
|
5.0 |
% |
|
|
10.0 |
% |
Corresponding
Return to Common Shareholder |
|
|
(22.32 |
)% |
|
|
(13.52 |
)% |
|
|
(4.72 |
)% |
|
|
4.08 |
% |
|
|
12.87 |
% |
The
following factors associated with leveraging could increase the investment risk and volatility of the price of the shares of common stock:
|
● |
leveraging
exaggerates any increase or decrease in the net asset value of the shares of common stock; |
|
● |
the
dividend requirements on the Fund’s shares of preferred stock may exceed the income from the portfolio securities purchased
with the proceeds from the issuance of preferred stock; |
|
● |
a
decline in net asset value results if the investment performance of the additional securities purchased fails to cover their cost
to the Fund (including any dividend requirements of preferred stock); |
|
● |
a
decline in net asset value could affect the ability of the Fund to make dividend payments on shares of common stock; |
Pursuant
to Section 18 of the 1940 Act, it is unlawful for the Fund, as a registered closed-end investment company, to issue any class of
senior security, or to sell any senior security that it issues, unless it can satisfy certain “asset coverage” ratios. The
asset coverage ratio with respect to a senior security representing indebtedness means the ratio of the value of the Fund’s total
assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate amount of the Fund’s senior
securities representing indebtedness. The asset coverage ratio with respect to a senior security representing stock means the ratio of
the value of the Fund’s total assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate
amount of the Fund’s senior securities representing indebtedness plus the aggregate liquidation preference of the Fund’s
outstanding shares of preferred stock.
If,
as is the case with the Fund, a registered investment company’s senior securities are equity securities, such securities must have
an asset coverage of at least 200% immediately following its issuance. If a registered investment company’s senior securities represent
indebtedness, such indebtedness must have an asset coverage of at least 300% immediately after their issuance. Subject to certain exceptions,
during any period following issuance that the Fund fails to satisfy these asset coverage ratios, it will, among other things, be prohibited
from declaring any dividend or declaring any other distribution in respect of its common stock except a dividend payable in shares of
common stock issued by the Fund.
Common
Stock Distribution Policy Risk. The Fund has adopted a policy, which may be changed at any time by the Board, of paying a minimum
annual distribution of 10% of the average net asset value of the Fund to common stockholders. In the event the Fund does not generate
a total return from dividends and interest received and net realized capital gains in an amount equal to or in excess of its stated distribution
in a given year, the Fund may return capital as part of such distribution, which may have the effect of decreasing the asset coverage
per share with respect to the Fund’s preferred stock. Distributions on the Fund’s common stock may contain a return of capital.
Any return of capital should not be considered by investors as yield or total return on their investment in the Fund. For the fiscal
year ended December 31, 2023, the Fund distributed a return of capital. Distributions sourced from return of capital should not
be considered as dividend yield or the total return from an investment in the Fund. Stockholders who periodically receive the payment
of a dividend or other distribution consisting of a return of capital may be under the impression that they are receiving net profits
when they are not. Stockholders should not assume that the source of a distribution from the Fund is net profit. The composition of each
distribution is estimated based on the earnings of the Fund as of the record date for each distribution. The actual composition of each
of the current year’s distributions will be based on the Fund’s investment activity through the end of the calendar year.
Special
Risks to Holders of Fixed Rate Preferred Stock
Illiquidity
Prior to Exchange Listing. Prior to the offering, there will be no public market for any additional series of fixed rate preferred
stock. In the event any additional series of fixed rate preferred stock is issued, prior application will have been made to list such
shares on a national securities exchange, which will likely be the NYSE. However, during an initial period, which is not expected to
exceed 30 days after the date of its initial issuance, such shares may not be listed on any securities exchange. During such period,
the underwriters may make a market in such shares, though, they will have no obligation to do so. Consequently, an investment in such
shares may be illiquid during such period.
Market
Price Fluctuation. Shares of fixed rate preferred stock may trade at a premium to or discount from liquidation value for various
reasons, including changes in interest rates.
Special
Risks for Holders of Auction Rate Preferred Stock
Auction
Risk. You may not be able to sell your auction rate preferred stock at an auction if the auction fails, i.e., if more shares
of auction rate preferred stock are offered for sale than there are buyers for those shares. Also, if you place an order (a hold order)
at an auction to retain auction rate preferred stock only at a specified rate that exceeds the rate set at the auction, you will not
retain your auction rate preferred stock. Additionally, if you place a hold order without specifying a rate below which you would not
wish to continue to hold your shares and the auction sets a below market rate, you will receive a lower rate of return on your shares
than the market rate. Finally, the dividend period may be changed, subject to certain conditions and with notice to the holders of the
auction rate preferred stock, which could also affect the liquidity of your investment. Since February 2008, most auction rate preferred
stock, including our Series C Auction Rate Preferred, have had failed auctions and holders of such stock have suffered reduced liquidity.
Secondary
Market Risk. If you try to sell your auction rate preferred stock between auctions, you may not be able to sell them for their
liquidation preference per share or such amount per share plus accumulated dividends. If the Fund has designated a special dividend period
of more than seven days, changes in interest rates could affect the price you would receive if you sold your shares in the secondary
market. Broker-dealers that maintain a secondary trading market for the auction rate preferred stock are not required to maintain this
market, and the Fund is not required to redeem auction rate preferred stock if either an auction or an attempted secondary market sale
fails because of a lack of buyers. The auction rate preferred stock will not be registered on a stock exchange. If you sell your auction
rate preferred stock to a broker-dealer between auctions, you may receive less than the price you paid for them, especially when market
interest rates have risen since the last auction or during a special dividend period. Since February 2008, most auction rate preferred
stock, including our Series C Auction Rate Preferred, have had failed auctions and holders of such stock have suffered reduced liquidity,
including the inability to sell such stock in a secondary market.
Special
Risks for Holders of Subscription Rights
There
is a risk that changes in market conditions may result in the underlying common or preferred stock purchasable upon exercise of the subscription
rights being less attractive to investors at the conclusion of the subscription period. This may reduce or eliminate the value of the
subscription rights. Investors who receive subscription rights may find that there is no market to sell rights they do not wish to exercise.
If investors
exercise
only a portion of the rights, the number of common or preferred stock issued may be reduced, and the common or preferred stock may trade
at less favorable prices than larger offerings for similar securities.
Additional
Risks Relating to Derivative Investments
Derivatives
Transactions Subject to Rule 18f-4. Rule 18f-4 under the 1940 Act governs the Fund’s use of derivative instruments
and certain other transactions that create future payment and/or delivery obligations by the Fund. Rule 18f-4 permits the Fund to
enter into Derivatives Transactions (as defined below) and certain other transactions notwithstanding the restrictions on the issuance
of “senior securities” under Section 18 of the 1940 Act. Section 18 of the 1940 Act, among other things, prohibits
closed-end funds, including the Fund, from (i) issuing or selling any “senior security” representing indebtedness unless,
immediately after such issuance or sale, the fund will have asset coverage of at least 300%, and (ii) issuing or selling any “senior
security” which is stock unless, immediately after such issuance or sale, the fund will have asset coverage of at least 200%. In
connection with the adoption of Rule 18f-4, the SEC eliminated the asset segregation framework arising from prior SEC guidance for
covering Derivatives Transactions and certain financial instruments.
Under
Rule 18f-4, “Derivatives Transactions” include the following: (i) any swap, security-based swap (including a contract
for differences), futures contract, forward contract, option (excluding purchased options), any combination of the foregoing, or any
similar instrument, under which a Fund is or may be required to make any payment or delivery of cash or other assets during the life
of the instrument or at maturity or early termination, whether as margin or settlement payment or otherwise; (ii) any short sale borrowing;
(iii) reverse repurchase agreements and similar financing transactions, if a Fund elects to treat these transactions as Derivatives Transactions
under Rule 18f-4; and (iv) when-issued or forward-settling securities (e.g., firm and standby commitments, including to-be-announced
(“TBA”) commitments, and dollar rolls) and non-standard settlement cycle securities, unless the Fund intends to physically
settle the transaction and the transaction will settle within 35 days of its trade date.
Unless
a fund is relying on the Limited Derivatives User Exception (as defined below), the fund must comply with Rule 18f-4 with respect
to its Derivatives Transactions. Rule 18f-4, among other things, requires a fund to (i) appoint a Derivatives Risk Manager, (ii)
maintain a Derivatives Risk Management Program designed to identify, assess, and reasonably manage the risks associated with Derivatives
Transactions; (iii) comply with certain value-at-risk (VaR)-based leverage limits (VaR is an estimate of an instrument’s or portfolio’s
potential losses over a given time horizon and at a specified confidence level); and (iv) comply with certain reporting and recordkeeping
requirements of the fund’s board of directors.
Rule 18f-4
provides an exception from the requirements to appoint a Derivatives Risk Manager, adopt a Derivatives Risk Management Program, comply
with certain VaR-based leverage limits, and comply with certain Board oversight and reporting requirements if a fund’s “derivatives
exposure” (as defined in Rule 18f-4) is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)
and the fund adopts and implements written policies and procedures reasonably designed to manage its derivatives risks (the “Limited
Derivatives User Exception”).
Pursuant
to Rule 18f-4, if the Fund enters into reverse repurchase agreements or similar financing transactions, the Fund will (i) aggregate
the amount of indebtedness associated with all of its reverse repurchase agreements or similar financing transactions with the amount
of any other “senior securities” representing indebtedness
(e.g.,
bank borrowings, if applicable) when calculating the Fund’s asset coverage ratio or (ii) treat all such transactions as Derivatives
Transactions.
The
requirements of Rule 18f-4 may limit the Fund’s ability to engage in Derivatives Transactions as part of its investment strategies.
These requirements may also increase the cost of the Fund’s investments and cost of doing business, which could adversely affect
the value of the Fund’s investments and/or the performance of the Fund.
Futures
Contracts and Options on Futures Risk. Futures and options on futures entail certain risks, including but not limited to the
following: no assurance that futures contracts or options on futures can be offset at favorable prices; possible reduction of the yield
of the Fund due to the use of hedging; possible reduction in value of both the securities hedged and the hedging instrument; possible
lack of liquidity due to daily limits on price fluctuations; imperfect correlation between the contracts and the securities being hedged;
and losses from investing in futures transactions that are potentially unlimited.
Options
Risk. To the extent that the Fund purchases options pursuant to a hedging strategy, the Fund will be subject to the following
additional risks. If a put or call option purchased by the Fund is not sold when it has remaining value, and if the market price of the
underlying security remains equal to or greater than the exercise price (in the case of a put), or remains less than or equal to the
exercise price (in the case of a call), the Fund will lose its entire investment in the option.
Where
a put or call option on a particular security is purchased to hedge against price movements in that or a related security, the price
of the put or call option may move more or less than the price of the security. If restrictions on exercise are imposed, the Fund may
be unable to exercise an option it has purchased. If the Fund is unable to close out an option that it has purchased on a security, it
will have to exercise the option in order to realize any profit or the option may expire worthless.
Forward
Foreign Currency Exchange Contracts Risk. The Fund may enter into forward foreign currency exchange contracts to protect the
value of its portfolio against uncertainty in the level of future currency exchange rates between a particular foreign currency and the
U.S. dollar or between foreign currencies in which its securities are or may be denominated. The Fund may enter into such contracts on
a spot (i.e., cash) basis at the rate then prevailing in the currency exchange market or on a forward basis, by entering into a forward
contract to purchase or sell currency. A forward contract on foreign currency is an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days agreed upon by the parties from the date of the contract at a price set on the
date of the contract. Forward currency contracts (i) are traded in a market conducted directly between currency traders (typically, commercial
banks or other financial institutions) and their customers, (ii) generally have no deposit requirements and (iii) are typically consummated
without payment of any commissions. The Fund, however, may enter into forward currency contracts requiring deposits or involving the
payment of commissions.
The
dealings of the Fund in forward foreign exchange are limited to hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of one forward foreign currency for another currency with respect to specific receivables
or payables of the Fund accruing in connection with the purchase and sale of its portfolio securities or its payment of distributions.
Position hedging is the purchase or sale of one forward foreign currency for another currency with respect to portfolio security positions
denominated or quoted
in
the foreign currency to offset the effect of an anticipated substantial appreciation or depreciation, respectively, in the value of the
currency relative to the U.S. dollar. In this situation, the Fund also may, for example, enter into a forward contract to sell or purchase
a different foreign currency for a fixed U.S. dollar amount where it is believed that the U.S. dollar value of the currency to be sold
or bought pursuant to the forward contract will fall or rise, as the case may be, whenever there is a decline or increase, respectively,
in the U.S. dollar value of the currency in which its portfolio securities are denominated (this practice being referred to as a “cross-hedge”).
In
hedging a specific transaction, the Fund may enter into a forward contract with respect to either the currency in which the transaction
is denominated or another currency deemed appropriate by the Investment Adviser. The amount the Fund may invest in forward currency contracts
is limited to the amount of its aggregate investments in foreign currencies.
The
use of forward currency contracts may involve certain risks, including the failure of the counterparty to perform its obligations under
the contract, and such use may not serve as a complete hedge because of an imperfect correlation between movements in the prices of the
contracts and the prices of the currencies hedged or used for cover. The Fund will only enter into forward currency contracts with parties
which the Investment Adviser believes to be creditworthy institutions.
Interest
Rate Transactions Risk. The Fund may enter into interest rate swap or cap transactions with respect to all or a portion of any
series of floating rate preferred stock in order to manage the impact on its portfolio of changes in the dividend rate of such stock.
Through these transactions the Fund seeks to obtain the equivalent of a fixed rate for such floating rate preferred stock that is lower
than the Fund would have to pay if it issued fixed rate preferred stock. The use of interest rate swaps and caps is a highly specialized
activity that involves certain risks to the Fund including, among others, counterparty risk and early termination risk.
Counterparty
Risk. The Fund will be subject to credit risk with respect to the counterparties to the derivative contracts purchased by the
Fund. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties,
the Fund may experience significant delays in obtaining any recovery under the derivative contract in bankruptcy or other reorganization
proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.
The
counterparty risk for cleared derivatives is generally lower than for uncleared OTC derivative transactions since generally a clearing
organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the parties’
performance under the contract as each party to a trade looks only to the clearing organization for performance of financial obligations
under the derivative contract. However, there can be no assurance that a clearing organization, or its members, will satisfy its obligations
to the Fund, or that the Fund would be able to recover the full amount of assets deposited on its behalf with the clearing organization
in the event of the default by the clearing organization or the Fund’s clearing broker. In addition, cleared derivative transactions
benefit from daily marking-to-market and settlement, and segregation and minimum capital requirements applicable to intermediaries. Uncleared
OTC derivative transactions generally do not benefit from such protections. This exposes the Fund to the risk that a counterparty will
not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or
not bona fide) or because of a credit or liquidity problem, thus causing the Fund to suffer a loss. Such
“counterparty
risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Fund has
concentrated its transactions with a single or small group of counterparties.
Derivatives
Regulation Risk. The Dodd-Frank Act has made broad changes to the derivatives market, granted significant new authority to the
CFTC and the SEC to regulate derivatives (swaps and security-based swaps) and participants in these markets. The Dodd-Frank Act is intended
to regulate the derivatives market by requiring many derivative transactions to be cleared and traded on an exchange, expanding entity
registration requirements, imposing business conduct requirements on dealers and requiring banks to move some derivatives trading units
to a non-guaranteed affiliate separate from the deposit-taking bank or divest them altogether. The CFTC has implemented mandatory clearing
and exchange-trading of certain derivatives contracts including many standardized interest rate swaps and credit default index swaps.
The CFTC continues to approve contracts for central clearing. Exchange-trading and central clearing are expected to reduce counterparty
credit risk by substituting the clearinghouse as the counterparty to a swap and increase liquidity, but exchange-trading and central
clearing do not make swap transactions risk-free. Uncleared swaps, such as non-deliverable foreign currency forwards, are subject to
certain margin requirements that mandate the posting and collection of minimum margin amounts. This requirement may result in the Fund
and its counterparties posting higher margin amounts for uncleared swaps than would otherwise be the case. Certain rules require centralized
reporting of detailed information about many types of cleared and uncleared swaps. Reporting of swap data may result in greater market
transparency, but may subject the Fund to additional administrative burdens, and the safeguards established to protect trader anonymity
may not function as expected.
|
|
|
|
|
|
|
|
|
|
Effects of Leverage [Text Block] |
|
|
|
|
|
|
|
|
|
The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on common stock
total return, assuming investment portfolio total returns (comprised of net investment income of the Fund, realized gains or losses of
the Fund and changes in the value of the securities held in the Fund’s portfolio) of -10%, -5%. 0%, 5% and 10%. These assumed investment
portfolio returns are hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected
to be experienced by the Fund. The table further reflects leverage representing 43% of the Fund’s net assets, the Fund’s
current projected blended annual average leverage dividend or interest rate of 5.14%, a management fee at an annual rate of 1.00% of
the liquidation preference of any outstanding preferred stock and estimated annual incremental expenses attributable to any outstanding
preferred stock 0.08% of the Fund’s net assets attributable to common stock.
Assumed
Return on Portfolio (Net of Expenses) |
|
|
(10.0 |
)% |
|
|
(5.0 |
)% |
|
|
0.0 |
% |
|
|
5.0 |
% |
|
|
10.0 |
% |
Corresponding
Return to Common Shareholder |
|
|
(22.32 |
)% |
|
|
(13.52 |
)% |
|
|
(4.72 |
)% |
|
|
4.08 |
% |
|
|
12.87 |
% |
The
following factors associated with leveraging could increase the investment risk and volatility of the price of the shares of common stock:
|
● |
leveraging
exaggerates any increase or decrease in the net asset value of the shares of common stock; |
|
● |
the
dividend requirements on the Fund’s shares of preferred stock may exceed the income from the portfolio securities purchased
with the proceeds from the issuance of preferred stock; |
|
● |
a
decline in net asset value results if the investment performance of the additional securities purchased fails to cover their cost
to the Fund (including any dividend requirements of preferred stock); |
|
● |
a
decline in net asset value could affect the ability of the Fund to make dividend payments on shares of common stock; |
Pursuant
to Section 18 of the 1940 Act, it is unlawful for the Fund, as a registered closed-end investment company, to issue any class of
senior security, or to sell any senior security that it issues, unless it can satisfy certain “asset coverage” ratios. The
asset coverage ratio with respect to a senior security representing indebtedness means the ratio of the value of the Fund’s total
assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate amount of the Fund’s senior
securities representing indebtedness. The asset coverage ratio with respect to a senior security representing stock means the ratio of
the value of the Fund’s total assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate
amount of the Fund’s senior securities representing indebtedness plus the aggregate liquidation preference of the Fund’s
outstanding shares of preferred stock.
If,
as is the case with the Fund, a registered investment company’s senior securities are equity securities, such securities must have
an asset coverage of at least 200% immediately following its issuance. If a registered investment company’s senior securities represent
indebtedness, such indebtedness must have an asset coverage of at least 300% immediately after their issuance. Subject to certain exceptions,
during any period following issuance that the Fund fails to satisfy these asset coverage ratios, it will, among other things, be prohibited
from declaring any dividend or declaring any other distribution in respect of its common stock except a dividend payable in shares of
common stock issued by the Fund.
|
|
|
|
|
|
|
|
|
|
Share Price [Table Text Block] |
|
|
|
|
|
|
|
|
|
The
following table sets forth for the quarters indicated, the high and low sale prices on the NYSE per share of our common stock and the
net asset value and the premium or discount from net asset value per share at which the common stock was trading, expressed as a percentage
of net asset value, at each of the high and low sale prices provided.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Share Market Price |
|
Corresponding
Net Asset Value (“NAV”) Per Share |
|
Corresponding
Premium or Discount as a % of NAV |
Quarter
Ended |
|
High |
|
Low |
|
High |
|
Low |
|
High |
|
Low |
March 31,
2022 |
|
$9.33 |
|
$7.89 |
|
$6.74 |
|
$7.32 |
|
38.43% |
|
9.13% |
June 30,
2022 |
|
$9.18 |
|
$6.63 |
|
$7.35 |
|
$5.43 |
|
24.90% |
|
22.10% |
September 30,
2022 |
|
$7.87 |
|
$6.07 |
|
$4.69 |
|
$3.72 |
|
67.80% |
|
63.17% |
December 31,
2022 |
|
$6.62 |
|
$5.17 |
|
$4.01 |
|
$3.89 |
|
65.09% |
|
32.19% |
March 31,
2023 |
|
$6.08 |
|
$5.34 |
|
$4.31 |
|
$4.00 |
|
41.07% |
|
33.50% |
June 30,
2023 |
|
$6.90 |
|
$5.57 |
|
$3.96 |
|
$4.23 |
|
74.24% |
|
31.68% |
September 30,
2023 |
|
$6.78 |
|
$5.79 |
|
$4.09 |
|
$3.87 |
|
65.77% |
|
49.61% |
December 31,
2023 |
|
$6.18 |
|
$4.36 |
|
$3.62 |
|
$3.38 |
|
70.72% |
|
28.99% |
|
|
|
|
|
|
|
|
|
|
NAV Per Share |
$ 5.67
|
$ 5.67
|
|
|
|
|
|
|
|
$ 5.67
|
|
|
|
|
|
|
|
|
|
Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock [Table Text Block] |
|
|
|
|
|
|
|
|
|
6.
Capital. The Fund’s Articles of Incorporation permit the Fund to issue 187,999,000 shares of common stock (par value $0.001).
The Board has authorized the repurchase of up to 1,950,000 common shares on the open market when the shares are trading at a discount
of 5% or more (or such other percentage as the Board may determine from time to time) from the NAV of the shares. During the years ended
December 31, 2023 and 2022, the Fund did not repurchase any of its common shares.
|
|
Year
Ended |
|
|
Year
Ended |
|
|
|
December 31,
2023 |
|
|
December 31,
2022 |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
Increase
in net assets from common shares issued upon reinvestment of distributions |
|
|
370,322 |
|
|
$ |
2,163,733 |
|
|
|
272,128 |
|
|
$ |
1,759,964 |
|
The
Fund’s Articles of Incorporation authorize the issuance of up to 12,001,000 shares of $0.001 par value Preferred Stock. The Preferred
Stock is senior to the common stock and results in the financial leveraging of the common stock. Such leveraging tends to magnify both
the risks and opportunities to common stockholders. Dividends on shares of the Preferred Stock are cumulative. The Fund is required by
the 1940 Act and by the Articles Supplementary to meet certain asset coverage tests with respect to the Preferred Stock. If the Fund
fails to meet these requirements and does not correct such failure, the Fund may be required to redeem, in part or in full, the Series
C, Series E, and Series G Preferred at redemption prices of $25,000, $25, and $25, respectively, per share plus an amount equal to the
accumulated and unpaid dividends whether or not declared on such shares in order to meet these requirements. Additionally, failure to
meet the foregoing asset coverage requirements could restrict the Fund’s ability to pay dividends to common stockholders and could
lead to sales of portfolio securities at inopportune times. The income received on the Fund’s assets may vary in a manner unrelated
to the fixed and variable rates, which could have either a beneficial or detrimental impact on net investment income and gains available
to common stockholders.
The
Fund has the authority to purchase its auction rate preferred shares through negotiated private transactions. The Fund is not obligated
to purchase any dollar amount or number of auction rate preferred shares, and the timing and amount of any auction rate preferred shares
purchased will depend on market conditions, share price,
capital
availability, and other factors. The Fund is not soliciting holders to sell these shares nor recommending that holders offer them to
the Fund. Any offers can be accepted or rejected in the Fund’s discretion.
For
Series C Preferred Stock, the dividend rates, as set by the auction process that is generally held every seven days, are expected to
vary with short term interest rates. Since February 2008, the number of shares of Series C Preferred Stock subject to bid orders
by potential holders has been less than the number of shares of Series C Preferred Stock subject to sell orders. Holders that have submitted
sell orders have not been able to sell any or all of the Series C Preferred Stock for which they have submitted sell orders. Therefore
the weekly auctions have failed, and the dividend rate has been the maximum rate, which is 175% of the “AA” Financial Composite
Commercial Paper Rate on the day of such auction. Existing Series C stockholders may submit an order to hold, bid, or sell such shares
on each auction date, or trade their shares in the secondary market.
The
Fund may redeem at any time, in whole or in part, the Series C Preferred Stock and Series E Preferred Stock at their respective redemption
prices per share. In addition, the Board has authorized the repurchase of the Series E and Series G Preferred Stock in the open market
at prices less than the $25 liquidation value per share. During the years ended December 31, 2023 and 2022, the Fund repurchased
and retired 93,612 and 184,154 Series E Preferred at investments of $2,198,952 and $4,402,156, respectively, and at average discounts
of approximately 6.08% and 4.42%, from its liquidation preference. During the years ended December 31, 2023 and 2022, the Fund repurchased
and retired 165,397 and 368,698 Series G Preferred at investments of $3,864,002 and $8,822,681, respectively, at average discounts of
approximately 6.62% and 4.32%, respectively, from its liquidation preference.
The
following table summarizes Cumulative Preferred Stock information:
Series |
|
Issue
Date |
|
|
Authorized |
|
|
Number of
Shares Outstanding at 12/31/2023 |
|
|
Net
Proceeds |
|
|
2023
Dividend Rate Range |
|
Dividend
Rate at 12/31/2023 |
|
|
Accrued
Dividends at 12/31/2023 |
|
C
Auction Rate |
|
March 31,
2003 |
|
|
|
1,000 |
|
|
|
10 |
|
|
$ |
24,547,465 |
|
|
7.514% to 9.337% |
|
|
9.320 |
% |
|
$ |
319 |
|
E
5.125% |
|
September 26, 2017 |
|
|
|
2,000,000 |
|
|
|
1,718,934 |
|
|
$ |
48,192,240 |
|
|
Fixed Rate |
|
|
5.125 |
% |
|
$ |
30,589 |
|
G
5.125% |
|
December 20, 2019 |
|
|
|
2,000,000 |
|
|
|
1,456,106 |
|
|
$ |
48,148,000 |
|
|
Fixed Rate |
|
|
5.125 |
% |
|
$ |
25,912 |
|
The
holders of Preferred Shares generally are entitled to one vote per share held on each matter submitted to a vote of stockholders of the
Fund and will vote together with holders of common stock as a single class. The holders of Preferred Shares voting together as a single
class also have the right currently to elect two Directors and, under certain circumstances, are entitled to elect a majority of the
Board of Directors. In addition, the affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding shares
of the preferred shares, voting as a single class, will be required to approve any plan of reorganization adversely affecting the preferred
stock, and the approval of two-thirds of each class, voting separately, of the Fund’s outstanding voting stock must approve the
conversion of the Fund from a closed-end to an open-end investment company. The approval of a majority (as defined in the 1940 Act) of
the outstanding preferred shares and a majority (as defined in the 1940 Act) of the Fund’s outstanding voting securities are required
to approve certain other actions, including changes in the Fund’s investment objectives or fundamental investment policies.
|
|
|
|
|
|
|
|
|
|
Outstanding Securities [Table Text Block] |
|
|
|
|
|
|
|
|
|
Outstanding
Securities
The
following information regarding the Fund’s outstanding securities is as of December 31, 2023.
Title
of Class |
|
Amount
Authorized |
|
|
Amount
Held by Fund for its Account |
|
|
Amount
Outstanding Exclusive of Amount Held by Fund |
Common
Stock |
|
196,750,000 |
|
|
– |
|
|
28,073,830 |
Series
C Cumulative Preferred Stock |
|
1,000 |
|
|
– |
|
|
10 |
Series
E Cumulative Preferred Stock |
|
2,000,000 |
|
|
– |
|
|
1,718,934 |
Series
G Cumulative Preferred Stock |
|
2,000,000 |
|
|
|
|
|
1,456,106 |
|
|
|
|
|
|
|
|
|
|
Document Period End Date |
|
|
|
|
|
|
|
|
|
Dec. 31, 2023
|
|
|
|
|
|
|
|
|
|
Common Stocks [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return at Minus Ten [Percent] |
|
|
|
|
|
|
|
|
|
(22.32%)
|
|
|
|
|
|
|
|
|
|
Return at Minus Five [Percent] |
|
|
|
|
|
|
|
|
|
(13.52%)
|
|
|
|
|
|
|
|
|
|
Return at Zero [Percent] |
|
|
|
|
|
|
|
|
|
(4.72%)
|
|
|
|
|
|
|
|
|
|
Return at Plus Five [Percent] |
|
|
|
|
|
|
|
|
|
4.08%
|
|
|
|
|
|
|
|
|
|
Return at Plus Ten [Percent] |
|
|
|
|
|
|
|
|
|
12.87%
|
|
|
|
|
|
|
|
|
|
Lowest Price or Bid |
|
4.36
|
$ 5.79
|
$ 5.57
|
$ 5.34
|
$ 5.17
|
$ 6.07
|
$ 6.63
|
$ 7.89
|
|
|
|
|
|
|
|
|
|
|
Highest Price or Bid |
|
6.18
|
6.78
|
6.90
|
6.08
|
6.62
|
7.87
|
9.18
|
9.33
|
|
|
|
|
|
|
|
|
|
|
Lowest Price or Bid, NAV |
|
3.38
|
3.87
|
4.23
|
4.00
|
3.89
|
3.72
|
5.43
|
7.32
|
|
|
|
|
|
|
|
|
|
|
Highest Price or Bid, NAV |
|
$ 3.62
|
$ 4.09
|
$ 3.96
|
$ 4.31
|
$ 4.01
|
$ 4.69
|
$ 7.35
|
$ 6.74
|
|
|
|
|
|
|
|
|
|
|
Highest Price or Bid, Premium (Discount) to NAV [Percent] |
|
70.72%
|
65.77%
|
74.24%
|
41.07%
|
65.09%
|
67.80%
|
24.90%
|
38.43%
|
|
|
|
|
|
|
|
|
|
|
Lowest Price or Bid, Premium (Discount) to NAV [Percent] |
|
28.99%
|
49.61%
|
31.68%
|
33.50%
|
32.19%
|
63.17%
|
22.10%
|
9.13%
|
|
|
|
|
|
|
|
|
|
|
NAV Per Share |
$ 3.73
|
$ 3.73
|
|
|
|
|
|
|
|
$ 3.73
|
|
|
|
|
|
|
|
|
|
Latest Premium (Discount) to NAV [Percent] |
51.60%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Title [Text Block] |
Common
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Authorized [Shares] |
196,750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Held [Shares] |
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Not Held [Shares] |
28,073,830
|
|
|
|
|
|
|
|
|
28,073,830
|
|
|
|
|
|
|
|
|
|
Common Shares [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAV Per Share |
$ 3.73
|
$ 3.73
|
|
|
|
|
|
|
|
$ 3.73
|
|
|
|
|
|
|
|
|
|
Series C Cumulative Preferred Stock [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Securities Amount |
$ 250,000
|
$ 250,000
|
|
|
|
$ 250,000
|
|
|
|
$ 250,000
|
$ 250,000
|
$ 250,000
|
$ 250,000
|
$ 250,000
|
$ 250,000
|
$ 250,000
|
$ 15,000,000
|
$ 15,000,000
|
$ 15,000,000
|
Senior Securities Coverage per Unit |
$ 57,920
|
$ 57,920
|
|
|
|
$ 56,302
|
|
|
|
$ 57,920
|
$ 56,302
|
$ 81,608
|
$ 76,478
|
$ 74,209
|
$ 86,865
|
$ 106,212
|
$ 167,071
|
$ 171,134
|
$ 196,481
|
Preferred Stock Liquidating Preference |
$ 25,000
|
$ 25,000
|
|
|
|
$ 25,000
|
|
|
|
25,000
|
25,000
|
25,000
|
25,000
|
25,000
|
25,000
|
25,000
|
25,000
|
25,000
|
25,000
|
Senior Securities Average Market Value per Unit |
|
|
|
|
|
|
|
|
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Title [Text Block] |
Series
C Cumulative Preferred Stock
|
|
|
|
|
|
|
|
|
C
Auction Rate
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Authorized [Shares] |
1,000
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Held [Shares] |
0
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Not Held [Shares] |
10
|
|
|
|
|
|
|
|
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
1,000
|
1,000
|
1,000
|
Series E Cumulative Preferred Stock [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Securities Amount |
$ 42,973,000
|
$ 42,973,000
|
|
|
|
$ 45,314,000
|
|
|
|
$ 42,973,000
|
$ 45,314,000
|
$ 49,918,000
|
$ 49,918,000
|
$ 50,000,000
|
$ 50,000,000
|
$ 50,000,000
|
|
|
|
Senior Securities Coverage per Unit |
$ 57.92
|
$ 57.92
|
|
|
|
$ 56.30
|
|
|
|
$ 57.92
|
$ 56.30
|
$ 81.61
|
$ 76.48
|
$ 74.21
|
$ 86.86
|
$ 106.21
|
|
|
|
Preferred Stock Liquidating Preference |
$ 25.00
|
$ 25.00
|
|
|
|
$ 25.00
|
|
|
|
25.00
|
25.00
|
25.00
|
25.00
|
25.00
|
25.00
|
25.00
|
|
|
|
Senior Securities Average Market Value per Unit |
|
|
|
|
|
|
|
|
|
$ 23.59
|
$ 24.07
|
$ 25.95
|
$ 25.55
|
$ 24.88
|
$ 23.80
|
$ 24.98
|
|
|
|
Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Title [Text Block] |
Series
E Cumulative Preferred Stock
|
|
|
|
|
|
|
|
|
E
5.125%
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Authorized [Shares] |
2,000,000
|
|
|
|
|
|
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Held [Shares] |
0
|
|
|
|
|
|
|
|
|
1,718,934
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Not Held [Shares] |
1,718,934
|
|
|
|
|
|
|
|
|
1,719,000
|
1,813,000
|
1,997,000
|
1,997,000
|
2,000,000
|
2,000,000
|
2,000,000
|
|
|
|
Series G Cumulative Preferred Stock [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Securities Amount |
$ 36,403,000
|
$ 36,403,000
|
|
|
|
$ 40,538,000
|
|
|
|
$ 36,403,000
|
$ 40,538,000
|
$ 49,755,000
|
$ 49,755,000
|
$ 50,000,000
|
|
|
|
|
|
Senior Securities Coverage per Unit |
$ 57.92
|
$ 57.92
|
|
|
|
$ 56.30
|
|
|
|
$ 57.92
|
$ 56.30
|
$ 81.61
|
$ 76.48
|
$ 74.21
|
|
|
|
|
|
Preferred Stock Liquidating Preference |
$ 25.00
|
$ 25.00
|
|
|
|
$ 25.00
|
|
|
|
25.00
|
25.00
|
25.00
|
25.00
|
25.00
|
|
|
|
|
|
Senior Securities Average Market Value per Unit |
|
|
|
|
|
|
|
|
|
$ 23.53
|
$ 24.23
|
$ 26.37
|
$ 25.61
|
$ 25.40
|
|
|
|
|
|
Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Title [Text Block] |
Series
G Cumulative Preferred Stock
|
|
|
|
|
|
|
|
|
G
5.125%
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Authorized [Shares] |
2,000,000
|
|
|
|
|
|
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Held [Shares] |
|
|
|
|
|
|
|
|
|
1,456,106
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Not Held [Shares] |
1,456,106
|
|
|
|
|
|
|
|
|
1,456,000
|
1,622,000
|
1,990,000
|
1,990,000
|
2,000,000
|
|
|
|
|
|
Cumulative Preferred Stocks [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security Voting Rights [Text Block] |
|
|
|
|
|
|
|
|
|
The
holders of Preferred Shares generally are entitled to one vote per share held on each matter submitted to a vote of stockholders of the
Fund and will vote together with holders of common stock as a single class. The holders of Preferred Shares voting together as a single
class also have the right currently to elect two Directors and, under certain circumstances, are entitled to elect a majority of the
Board of Directors. In addition, the affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding shares
of the preferred shares, voting as a single class, will be required to approve any plan of reorganization adversely affecting the preferred
stock, and the approval of two-thirds of each class, voting separately, of the Fund’s outstanding voting stock must approve the
conversion of the Fund from a closed-end to an open-end investment company. The approval of a majority (as defined in the 1940 Act) of
the outstanding preferred shares and a majority (as defined in the 1940 Act) of the Fund’s outstanding voting securities are required
to approve certain other actions, including changes in the Fund’s investment objectives or fundamental investment policies.
|
|
|
|
|
|
|
|
|
|
Preferred Stock Restrictions, Other [Text Block] |
|
|
|
|
|
|
|
|
|
The
Fund’s Articles of Incorporation authorize the issuance of up to 12,001,000 shares of $0.001 par value Preferred Stock. The Preferred
Stock is senior to the common stock and results in the financial leveraging of the common stock. Such leveraging tends to magnify both
the risks and opportunities to common stockholders. Dividends on shares of the Preferred Stock are cumulative. The Fund is required by
the 1940 Act and by the Articles Supplementary to meet certain asset coverage tests with respect to the Preferred Stock. If the Fund
fails to meet these requirements and does not correct such failure, the Fund may be required to redeem, in part or in full, the Series
C, Series E, and Series G Preferred at redemption prices of $25,000, $25, and $25, respectively, per share plus an amount equal to the
accumulated and unpaid dividends whether or not declared on such shares in order to meet these requirements. Additionally, failure to
meet the foregoing asset coverage requirements could restrict the Fund’s ability to pay dividends to common stockholders and could
lead to sales of portfolio securities at inopportune times. The income received on the Fund’s assets may vary in a manner unrelated
to the fixed and variable rates, which could have either a beneficial or detrimental impact on net investment income and gains available
to common stockholders.
The
Fund has the authority to purchase its auction rate preferred shares through negotiated private transactions. The Fund is not obligated
to purchase any dollar amount or number of auction rate preferred shares, and the timing and amount of any auction rate preferred shares
purchased will depend on market conditions, share price,
capital
availability, and other factors. The Fund is not soliciting holders to sell these shares nor recommending that holders offer them to
the Fund. Any offers can be accepted or rejected in the Fund’s discretion.
For
Series C Preferred Stock, the dividend rates, as set by the auction process that is generally held every seven days, are expected to
vary with short term interest rates. Since February 2008, the number of shares of Series C Preferred Stock subject to bid orders
by potential holders has been less than the number of shares of Series C Preferred Stock subject to sell orders. Holders that have submitted
sell orders have not been able to sell any or all of the Series C Preferred Stock for which they have submitted sell orders. Therefore
the weekly auctions have failed, and the dividend rate has been the maximum rate, which is 175% of the “AA” Financial Composite
Commercial Paper Rate on the day of such auction. Existing Series C stockholders may submit an order to hold, bid, or sell such shares
on each auction date, or trade their shares in the secondary market.
The
Fund may redeem at any time, in whole or in part, the Series C Preferred Stock and Series E Preferred Stock at their respective redemption
prices per share. In addition, the Board has authorized the repurchase of the Series E and Series G Preferred Stock in the open market
at prices less than the $25 liquidation value per share. During the years ended December 31, 2023 and 2022, the Fund repurchased
and retired 93,612 and 184,154 Series E Preferred at investments of $2,198,952 and $4,402,156, respectively, and at average discounts
of approximately 6.08% and 4.42%, from its liquidation preference. During the years ended December 31, 2023 and 2022, the Fund repurchased
and retired 165,397 and 368,698 Series G Preferred at investments of $3,864,002 and $8,822,681, respectively, at average discounts of
approximately 6.62% and 4.32%, respectively, from its liquidation preference.
|
|
|
|
|
|
|
|
|
|
Outstanding Securities [Table Text Block] |
|
|
|
|
|
|
|
|
|
The
following table summarizes Cumulative Preferred Stock information:
Series |
|
Issue
Date |
|
|
Authorized |
|
|
Number of
Shares Outstanding at 12/31/2023 |
|
|
Net
Proceeds |
|
|
2023
Dividend Rate Range |
|
Dividend
Rate at 12/31/2023 |
|
|
Accrued
Dividends at 12/31/2023 |
|
C
Auction Rate |
|
March 31,
2003 |
|
|
|
1,000 |
|
|
|
10 |
|
|
$ |
24,547,465 |
|
|
7.514% to 9.337% |
|
|
9.320 |
% |
|
$ |
319 |
|
E
5.125% |
|
September 26, 2017 |
|
|
|
2,000,000 |
|
|
|
1,718,934 |
|
|
$ |
48,192,240 |
|
|
Fixed Rate |
|
|
5.125 |
% |
|
$ |
30,589 |
|
G
5.125% |
|
December 20, 2019 |
|
|
|
2,000,000 |
|
|
|
1,456,106 |
|
|
$ |
48,148,000 |
|
|
Fixed Rate |
|
|
5.125 |
% |
|
$ |
25,912 |
|
|
|
|
|
|
|
|
|
|
|
Purchase Transaction [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee Table [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Reinvestment and Cash Purchase Fees |
|
|
|
|
|
|
|
|
|
$ 0.75
|
|
|
|
|
|
|
|
|
|
Sale Transaction [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee Table [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Reinvestment and Cash Purchase Fees |
|
|
|
|
|
|
|
|
|
2.50
|
|
|
|
|
|
|
|
|
|
Dividends On Preferred Shares Not Included [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Annual Expenses [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense Example, Year 01 |
|
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
Expense Example, Years 1 to 3 |
|
|
|
|
|
|
|
|
|
77
|
|
|
|
|
|
|
|
|
|
Expense Example, Years 1 to 5 |
|
|
|
|
|
|
|
|
|
131
|
|
|
|
|
|
|
|
|
|
Expense Example, Years 1 to 10 |
|
|
|
|
|
|
|
|
|
$ 279
|
|
|
|
|
|
|
|
|
|
Series B Cumulative Preferred Stock [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Securities Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 19,775,000
|
$ 19,775,000
|
$ 19,775,000
|
$ 19,775,000
|
$ 19,775,000
|
Senior Securities Coverage per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 86.86
|
$ 106.21
|
$ 167.07
|
$ 171.13
|
$ 196.48
|
Preferred Stock Liquidating Preference |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25.00
|
25.00
|
25.00
|
25.00
|
25.00
|
Senior Securities Average Market Value per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 25.81
|
$ 26.36
|
$ 26.42
|
$ 25.80
|
$ 25.41
|
Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Security, Not Held [Shares] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
791,000
|
791,000
|
791,000
|
791,000
|
791,000
|
Market Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Market
Risk. The market price of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets.
The value of a security may decline due to general market conditions which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency
rates, adverse changes to credit markets or adverse investor sentiment generally. The value of a security may also decline due to factors
which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within
an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Equity
securities generally have greater price volatility than fixed income securities. Credit ratings downgrades may also negatively affect
securities held by the Fund. Even when markets perform well, there is no assurance that the investments held by the Fund will increase
in value along with the broader market.
In
addition, market risk includes the risk that geopolitical and other events will disrupt the economy on a national or global level. For
instance, war, terrorism, market manipulation, government defaults, government shutdowns, political changes or diplomatic developments,
public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental disasters can
all negatively impact the securities markets, which could cause the Fund to lose value. These events could reduce consumer demand or
economic output, result in market closures, travel restrictions or quarantines, and significantly adversely impact the economy. The current
contentious domestic political environment, as well as political and diplomatic events within the United States and abroad, such as the
U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, has in the past resulted, and may
in the future result, in a government shutdown, which could have an adverse impact on the Fund’s investments and operations. Additional
and/or prolonged U.S. federal government shutdowns may affect investor and consumer confidence and may adversely impact financial markets
and the broader economy, perhaps suddenly and to a significant degree. Governmental and quasi-governmental authorities and regulators
throughout the world have previously responded to serious economic disruptions with a variety of significant fiscal and monetary policy
changes, including, but not limited to, direct capital infusions into companies, new monetary programs and dramatically lower interest
rates. An unexpected or sudden reversal of these policies, or the ineffectiveness of these policies, could increase volatility in securities
markets, which could adversely affect the Fund’s investments. Any market disruptions could also prevent the Fund from executing
advantageous investment decisions in a timely manner. To the extent that the Fund focuses its investments in a region enduring geopolitical
market disruption, it will face higher risks of loss, although the increasing interconnectivity between global economies and financial
markets can lead to events or conditions in one country, region or financial market adversely impacting a different country, region or
financial
market.
Thus, investors should closely monitor current market conditions to determine whether the Fund meets their individual financial needs
and tolerance for risk.
Current
market conditions may pose heightened risks with respect to the Fund’s investment in fixed income securities. Central banks such
as the Federal Reserve Bank have been increasing interest rates, though this trend has tempered recently as the rate of inflation slows.
There is a risk that additional increases in interest rates or a prolonged period of rising interest rates may cause the economy to enter
a recession. Additional interest rate increases in the future could cause the value of the Fund to decrease. Recently, inflation levels
have been at their highest point in nearly 40 years and the Federal Reserve has been engaged in a campaign to raise certain benchmark
interest rates in an effort to combat inflation. As inflation increases, the real value of the Fund’s common stock and distributions
therefore may decline.
Exchanges
and securities markets may close early, close late or issue trading halts on specific securities or generally, which may result in, among
other things, the Fund being unable to buy or sell certain securities or financial instruments at an advantageous time or accurately
price its portfolio investments.
|
|
|
|
|
|
|
|
|
|
Interest Rate Risk Generally [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Interest
Rate Risk Generally. The primary risk associated with dividend-and interest-paying securities is interest rate risk. A decrease
in interest rates will generally result in an increase in the investment value of such securities, while increases in interest rates
will generally result in a decline in the investment value of such securities. This effect is generally more pronounced for fixed rate
securities than for securities whose income rate is periodically reset.
General
interest rate fluctuations may have a substantial negative impact on the Fund’s investments, the value of the Fund and the Fund’s
rate of return. A reduction in the interest or dividend rates on new investments relative to interest or dividend rates on current investments
could also have an adverse impact on the Fund’s net investment income. An increase in interest rates could decrease the value of
any investments held by the Fund that earn fixed interest or dividend rates, including debt securities, convertible securities, preferred
stocks, loans and high-yield bonds, and also could increase interest or dividend expenses, thereby decreasing net income.
The
magnitude of these fluctuations in the market price of bonds and other income- or dividend-paying securities is generally greater for
those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income
derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money
if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management. To the extent the Fund invests
in securities that may be prepaid at the option of the obligor, the sensitivity of such securities to changes in interest rates may increase
(to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate securities typically reset
only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some
fluctuations in the net asset value of the Fund to the extent that it invests in floating rate securities. These basic principles of
bond prices also apply to U.S. government securities. A security backed by the “full faith and credit” of the U.S. government
is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other income- or
dividend-paying securities, government-guaranteed securities will fluctuate in value when interest rates change.
The
Fund’s use of leverage will tend to increase the Fund’s interest rate risk. The Fund may invest in variable and floating
rate instruments, which generally are less sensitive to interest rate changes than longer duration
fixed
rate instruments but may decline in value in response to rising interest rates if, for example, the rates at which they pay interest
do not rise as much, or as quickly, as market interest rates in general. Conversely, variable and floating rate instruments generally
will not increase in value if interest rates decline. The Fund also may invest in inverse floating rate securities, which may decrease
in value if interest rates increase, and which also may exhibit greater price volatility than fixed rate obligations with similar credit
quality. To the extent the Fund holds variable or floating rate instruments, a decrease (or, in the case of inverse floating rate securities,
an increase) in market interest rates will adversely affect the income received from such securities, which may adversely affect the
net asset value of the Fund’s common stock.
Central
banks such as the Federal Reserve Bank have been increasing interest rates, though this trend has tempered recently as the rate of inflation
slows. There is a risk that heightened interest rates may cause the economy to enter a recession. Any such recession would negatively
impact the Fund and the investments held by the Fund. These impacts may include:
|
● |
severe
declines in the Fund’s net asset values; |
|
● |
inability
of the Fund to accurately or reliably value its portfolio; |
|
● |
inability
of the Fund to pay any dividends or distributions; |
|
● |
inability
of the Fund to maintain its status as a registered investment company (“RIC”) under the Internal Revenue Code of 1986,
as amended (the “Code”); |
|
● |
declines
in the value of the Fund’s investments; |
|
● |
increased
risk of default or bankruptcy by the companies in which the Fund invests; |
|
● |
increased
risk of companies in which the Fund invests being unable to weather an extended cessation of normal economic activity and thereby
impairing their ability to continue functioning as a going concern; and |
|
● |
limited
availability of new investment opportunities. |
|
|
|
|
|
|
|
|
|
|
Inflation Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Inflation
Risk. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation
decreases the value of money. This risk may be elevated compared to historical market conditions because of recent monetary policy measures
and the current interest rate environment. Inflation rates may change frequently and significantly as a result of various factors, including
unexpected shifts in the domestic or global economy and changes in economic policies, and the Fund’s investments may not keep pace
with inflation, which may result in losses to Fund stockholders. As inflation increases, the real value of the Fund’s shares and
dividends may decline. In addition, during any periods of rising inflation, interest rates of any debt securities held by the Fund would
likely increase, which would tend to further reduce returns to stockholders. This risk is greater for fixed-income instruments with longer
maturities.
|
|
|
|
|
|
|
|
|
|
Convertible Securities Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Convertible
Securities Risk. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of
similar quality. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase
as interest rates decline. In the absence of adequate anti-dilution provisions in a convertible security, dilution in the value of the
Fund’s holding may occur in the event the underlying stock is subdivided, additional equity securities are issued for below market
value, a stock dividend is declared or the issuer enters into another type of corporate transaction that has a similar effect.
The
value of a convertible security is influenced by the value of the underlying equity security. Convertible debt securities and preferred
stocks may depreciate in value if the market value of the underlying equity security declines or if rates of interest increase. In addition,
although debt securities are liabilities of a corporation which the corporation is generally obligated to repay at a specified time,
debt securities, particularly convertible debt securities, are often subordinated to the claims of some or all of the other creditors
of the corporation.
Mandatory
conversion securities (securities that automatically convert into equity securities at a future date) may limit the potential for capital
appreciation and, in some instances, are subject to complete loss of invested capital. Other innovative convertibles include “equity-linked”
securities, which are securities or derivatives that may have fixed, variable, or no interest payments prior to maturity, may convert
(at the option of the holder or on a mandatory basis) into cash or a combination of cash and common stock, and may be structured to limit
the potential for capital appreciation. Equity-linked securities may be illiquid and difficult to value and may be subject to greater
credit risk than that of other convertibles. Moreover, mandatory conversion securities and equity-linked securities have increased the
sensitivity of the convertible securities market to the volatility of the equity markets and to the special risks of those innovations,
which may include risks different from, and possibly greater than, those associated with traditional convertible securities.
Preferred
stocks are equity securities in the sense that they do not represent a liability of the corporation. In the event of liquidation of the
corporation, and after its creditors have been paid or provided for, holders of preferred stock are generally entitled to a preference
as to the assets of the corporation before any distribution may be made to the holders of common stock. Debt securities normally do not
have voting rights. Preferred stocks may have no voting rights or may have voting rights only under certain circumstances.
|
● |
Credit
Risk. Credit risk is the risk that an issuer will fail to pay interest or dividends and principal in a timely manner. Companies
that issue convertible securities may be small to medium-size, and they often have low credit ratings. In addition, the credit rating
of a company’s convertible securities is generally lower than that of its conventional debt securities. Convertible securities
are normally considered “junior” securities—that is, the company usually must pay interest on its conventional
debt before it can make payments on its convertible securities. Credit risk could be high for the Fund, because it could invest in
securities with low credit quality. The lower a debt security is rated, the greater its default risk. As a result, the Fund may incur
cost and delays in enforcing its rights against the issuer. |
|
● |
Market
Risk. Although convertible securities do derive part of their value from that of the securities into which they are convertible,
they are not considered derivative financial instruments. However, the Fund’s mandatory convertible securities include features
which render them more sensitive to price changes of their underlying securities. Thus they expose the Fund to greater downside risk
than traditional convertible securities, but generally less than that of the underlying common stock. |
|
● |
Interest
Rate Risk for Convertible Securities. The Fund may be subject to a greater risk of rising interest rates due to recent monetary
measures and the current interest rate environment. The Federal Reserve has been engaged in a campaign to increase certain benchmark
interest rates, and any additional increases in interest rates would be likely to drive down the prices of convertible securities
held by the Fund. Convertible securities are particularly sensitive to interest rate changes when their predetermined |
|
|
conversion price is much higher than the
issuing company’s common stock. See “— General Risks—Interest Rate Risks Generally.” |
|
● |
Sector
Risk. Sector risk is the risk that returns from the economic sectors in which convertible securities are concentrated will trail
returns from other economic sectors. As a group, sectors tend to go through cycles of doing better-or-worse-than the convertible
securities market in general. These periods have, in the past, lasted for as long as several years. Moreover, the sectors that dominate
this market change over time. |
|
|
|
|
|
|
|
|
|
|
Equity Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Equity
Risk. Investing in the Fund involves equity risk, which is the risk that the securities held by the Fund will fall in market
value due to adverse market and economic conditions, perceptions regarding the industries in which the issuers of securities held by
the Fund participate and the particular circumstances and performance of particular companies whose securities the Fund holds. An investment
in the Fund represents an indirect economic stake in the securities owned by the Fund, which are for the most part traded on securities
exchanges or in the OTC markets. The market value of these securities, like other market investments, may move up or down, sometimes
rapidly and unpredictably. The net asset value of the Fund may at any point in time be worth less than the amount at the time the stockholder
invested in the Fund, even after taking into account any reinvestment of distributions.
|
|
|
|
|
|
|
|
|
|
Common Stock Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Common
Stock Risk. Common stock of an issuer in the Fund’s portfolio may decline in price for a variety of reasons, including
if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline
in its financial condition. Common stock in which the Fund invests is structurally subordinated as to income and residual value to preferred
stock, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore
will be subject to greater dividend risk than preferred stock or debt instruments of such issuers. In addition, while common stock has
historically generated higher average returns than fixed income securities, common stock has also experienced significantly more volatility
in those returns.
|
|
|
|
|
|
|
|
|
|
Preferred Stock Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Preferred
Stock Risk. There are special risks associated with the Fund’s investing in preferred securities, including:
|
● |
Deferral.
Preferred securities may include provisions that permit the issuer, at its discretion, to defer dividends or distributions for
a stated period without any adverse consequences to the issuer. If the Fund owns a preferred security that is deferring its dividends
or distributions, the Fund may be required to report income for tax purposes although it has not yet received such income. |
|
● |
Non-Cumulative
Dividends. Some preferred securities are non-cumulative, meaning that the dividends do not accumulate and need not ever be paid.
A portion of the portfolio may include investments in non-cumulative preferred securities, whereby the issuer does not have an obligation
to make up any arrearages to its stockholders. Should an issuer of a non-cumulative preferred security held by the Fund determine
not to pay dividends or distributions on such security, the Fund’s return from that security may |
|
|
be adversely affected. There is no assurance
that dividends or distributions on non-cumulative preferred securities in which the Fund invests will be declared or otherwise made
payable. |
|
● |
Subordination.
Preferred securities are subordinated to bonds and other debt instruments in an issuer’s capital structure in terms of
priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than more senior debt
security instruments. |
|
● |
Liquidity.
Preferred securities may be substantially less liquid than many other securities, such as common stocks or U.S. government securities. |
|
● |
Limited
Voting Rights. Generally, preferred security holders (such as the Fund) have no voting rights with respect to the issuing company
unless preferred dividends have been in arrears for a specified number of periods, at which time the preferred security holders may
be entitled to elect a number of directors to the issuer’s board. Generally, once all the arrearages have been paid, the preferred
security holders no longer have voting rights. |
|
● |
Special
Redemption Rights. In certain varying circumstances, an issuer of preferred securities may redeem the securities prior to a specified
date. For instance, for certain types of preferred securities, a redemption may be triggered by a change in U.S. federal income tax
or securities laws. A redemption by the issuer may negatively impact the return of the security held by the Fund. |
|
|
|
|
|
|
|
|
|
|
Warrants And Rights Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Warrants
and Rights Risk. The Fund may invest in warrants and rights (including those acquired in units or attached to other securities)
which entitle the holder to buy equity securities at a specific price for or at the end of a specific period of time. The Fund will do
so only if the underlying equity securities are deemed appropriate by the Investment Adviser for inclusion in the Fund’s portfolio.
Investing
in rights and warrants can provide a greater potential for profit or loss than an equivalent investment in the underlying security, and
thus can be a riskier investment. The value of a right or warrant may decline because of a decline in the value of the underlying security,
the passage of time, changes in interest rates or in the dividend or other policies of the Fund whose equity underlies the warrant, a
change in the perception as to the future price of the underlying security, or any combination thereof. Rights and warrants generally
pay no dividends and confer no voting or other rights other than the right to purchase the underlying security.
|
|
|
|
|
|
|
|
|
|
Non Investment Grade Securities Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Non-Investment
Grade Securities Risk. The prices of these lower grade securities are more sensitive to negative developments, such as a decline
in the issuer’s revenues or a general economic downturn, than are the prices of higher grade securities. Securities of below investment
grade quality—those securities rated below “Baa” by Moody’s or below “BBB” by S&P (or unrated
securities considered by the Investment Adviser to be of comparable quality)— are predominantly speculative with respect to the
issuer’s capacity to pay interest and repay principal when due and therefore involve a greater risk of default. Securities rated
below investment grade commonly are referred to as “junk bonds” or “high yield” securities and generally pay
a premium above the yields
of
U.S. government securities or securities of investment grade issuers because they are subject to greater risks than these securities.
These risks, which reflect their speculative character, include the following:
|
● |
greater
credit risk and risk of default; |
|
● |
potentially
greater sensitivity to general economic or industry conditions; |
|
● |
potential
lack of attractive resale opportunities (illiquidity); and |
|
● |
additional
expenses to seek recovery from issuers who default. |
In
addition, the prices of these non-investment grade securities are more sensitive to negative developments, such as a decline in the issuer’s
revenues or a general economic downturn, than are the prices of higher grade securities. Non-investment grade securities tend to be less
liquid than investment grade securities. The market value of non-investment grade securities may be more volatile than the market value
of investment grade securities and generally tends to reflect the market’s perception of the creditworthiness of the issuer and
short-term market developments to a greater extent than investment grade securities, which primarily reflect fluctuations in general
levels of interest rates.
Ratings
are relative and subjective and not absolute standards of quality. Securities ratings are based largely on the issuer’s historical
financial condition and the rating agencies’ analysis at the time of rating. Consequently, the rating assigned to any particular
security is not necessarily a reflection of the issuer’s current financial condition.
The
Fund may purchase securities of companies that are experiencing significant financial or business difficulties, including companies involved
in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant financial returns
to the Fund, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for
successful investments in issuers experiencing significant business and financial difficulties is unusually high. There can be no assurance
that the Fund will correctly evaluate the value of the assets collateralizing its investments or the prospects for a successful reorganization
or similar action. In any reorganization or liquidation proceeding relating to a portfolio investment, the Fund may lose all or part
of its investment or may be required to accept collateral with a value less than the amount of the Fund’s initial investment.
As
a part of its investments in non-investment grade securities, the Fund may invest in the securities of issuers in default. The Fund invests
in securities of issuers in default only when the Investment Adviser believes that such issuers will honor their obligations and emerge
from bankruptcy protection and that the value of such issuers’ securities will appreciate. By investing in the securities of issuers
in default, the Fund bears the risk that these issuers will not continue to honor their obligations or emerge from bankruptcy protection
or that the value of these securities will not otherwise appreciate.
In
addition to using statistical rating agencies and other sources, the Investment Adviser will also perform its own analysis of issuers
in seeking investments that it believes to be underrated (and thus higher yielding) in light of the financial condition of the issuer.
Its analysis of issuers may include, among other things, current and anticipated cash flow and borrowing requirements, value of assets
in relation to historical cost, strength of management, responsiveness to business conditions, credit standing and current anticipated
results of
operations.
In selecting investments for the Fund, the Investment Adviser may also consider general business conditions, anticipated changes in interest
rates and the outlook for specific industries.
Subsequent
to its purchase by the Fund, an issue of securities may cease to be rated or its rating may be reduced. In addition, it is possible that
statistical rating agencies might change their ratings of a particular issue to reflect subsequent events on a timely basis. Moreover,
such ratings do not assess the risk of a decline in market value. None of these events will require the sale of the securities by the
Fund, although the Investment Adviser will consider these events in determining whether the Fund should continue to hold the securities.
Income
securities, including non-investment grade securities and comparable unrated securities, frequently have call or buy-back features that
permit their issuers to call or repurchase the securities from their holders, such as the Fund. If an issuer exercises these rights during
periods of declining interest rates, the Fund may have to replace the security with a lower yielding security, thus resulting in a decreased
return for the Fund.
The
market for non-investment grade and comparable unrated securities has at various times, particularly during times of economic recession,
experienced substantial reductions in market value and liquidity. Past recessions have adversely affected the value of such securities
as well as the ability of certain issuers of such securities to repay principal and pay interest thereon or to refinance such securities.
The market for those securities could react in a similar fashion in the event of any future economic recession.
|
|
|
|
|
|
|
|
|
|
Short Sales Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Short
Sales Risk. Short-selling involves selling securities which may or may not be owned and borrowing the same securities for delivery
to the purchaser, with an obligation to replace the borrowed securities at a later date. If the price of the security sold short increases
between the time of the short sale and the time the Fund replaces the borrowed security, the Fund will incur a loss; conversely, if the
price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss will be increased, by the transaction
costs incurred by the Fund, including the costs associated with providing collateral to the broker-dealer (usually cash and liquid securities).
Although the Fund’s gain is limited to the price at which it sold the security short, its potential loss is theoretically unlimited.
Short-selling
necessarily involves certain additional risks. However, if the short seller does not own the securities sold short (an uncovered short
sale), the borrowed securities must be replaced by securities purchased at market prices in order to close out the short position, and
any appreciation in the price of the borrowed securities would result in a loss. Uncovered short sales expose the Fund to the risk of
uncapped losses until a position can be closed out due to the lack of an upper limit on the price to which a security may rise. Purchasing
securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss.
There is the risk that the securities borrowed by the Fund in connection with a short-sale must be returned to the securities lender
on short notice. If a request for return of borrowed securities occurs at a time when other short-sellers of the security are receiving
similar requests, a “short squeeze” can occur, and the Fund may be compelled to replace borrowed securities previously sold
short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds
received at the time the securities were originally sold short.
In
September 2008, in response to spreading turmoil in the financial markets, the SEC temporarily banned short selling in the stocks
of numerous financial services companies, and also promulgated new disclosure requirements with respect to short positions held by investment
managers. The SEC’s temporary ban on short
selling
of such stocks has since expired, but should similar restrictions and/or additional disclosure requirements be promulgated, especially
if market turmoil occurs, the Fund may be forced to cover short positions more quickly than otherwise intended and may suffer losses
as a result. Such restrictions may also adversely affect the ability of the Fund to execute its investment strategies generally. Similar
emergency orders were also instituted in non-U.S. markets in response to increased volatility. The Fund’s ability to engage in
short sales is also restricted by various regulatory requirements relating to short sales.
|
|
|
|
|
|
|
|
|
|
Industry Concentration Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Industry
Concentration Risk. The Fund invests a significant portion of its assets in companies in the telecommunications, media, publishing,
and entertainment industries, also known as communication services companies, and, as a result, the value of the Fund’s shares
is more susceptible to factors affecting those particular types of companies and those industries, including governmental regulation,
a greater price volatility than the overall market, rapid obsolescence of products and services, intense competition, and strong market
reactions to technological developments. Fluctuating domestic and international demand, shifting demographics and often unpredictable
changes in consumer tastes can drastically affect a communication services company’s profitability. In addition, while all companies
may be susceptible to network security breaches, certain companies in the communication services sector may be particular targets of
hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect
on their businesses.
Various
types of ownership restrictions are imposed by the Federal Communications Commission, or FCC, on investment in media companies and cellular
licensees. For example, the FCC’s broadcast and cable multiple-ownership and cross ownership rules, which apply to the radio, television,
and cable industries, provide that investment advisers are deemed to have an “attributable” interest whenever the adviser
has the right to determine how five percent or more of the issued and outstanding voting stock of a broadcast company or cable system
operator may be voted. These rules limit the number of broadcast stations both locally and nationally that a single entity is permitted
to own, operate, or control and prohibit ownership of certain competitive communications providers in the same location. The FCC also
applies limited ownership restrictions on cellular licensees serving rural areas. An attributable interest in a cellular company arises
from the right to control 20% or more of its voting stock.
Attributable
interests that may result from the role of the Investment Adviser and its principals in connection with other funds, managed accounts
and companies may limit the Fund’s ability to invest in certain mass media and cellular companies. In the event that the Investment
Adviser and its affiliates may be deemed to have such an attributable interest, the Board of the Fund may delegate, from time to time,
to the Fund’s Proxy Voting Committee, voting power over certain shares of securities held by the Fund in view of these ownership
limitations to ensure compliance with certain FCC regulations.
The
costs of complying with governmental regulations, delays or failure to receive required regulatory approvals, or the enactment of new
regulatory requirements may negatively affect the business of communications companies. Government actions around the world, specifically
in the area of pre-marketing clearance of products and prices, can be arbitrary and unpredictable. The telecommunications, media, publishing,
and entertainment industries can also be significantly affected by intense competition for market share, including competition with alternative
technologies such as wireless communications, product compatibility and standardization, consumer preferences, rapid product obsolescence,
research and development of new products, lack of standardization or compatibility with existing technologies, and a dependency on patent
and copyright protections. Communication
services
companies may encounter distressed cash flows due to the need to commit substantial capital to meet increasing competition, particularly
in developing new products and services using new technology. Technological innovations may make the products and services of certain
communications companies obsolete.
Telecommunications
providers with exposure to the U.S. are generally required to obtain franchises or licenses in order to provide services in a given location.
Licensing and franchise rights in the telecommunications sector are limited, which may provide an advantage to certain participants.
Limited availability of such rights, high barriers to market entry and regulatory oversight, among other factors, have led to consolidation
of companies within the sector, which could lead to further regulation or other negative effects in the future. Telecommunication providers
investing in non-U.S. countries may be subject to similar risks. Additional risks include those related to competitive challenges in
the U.S. from non-U.S. competitors engaged in strategic joint ventures with U.S. companies and in non-U.S. markets from both U.S. and
non-U.S. competitors.
Companies
in the media and entertainment industries can be significantly affected by several factors, including competition, particularly in formulation
of products and services using new technologies, cyclicality of revenues and earnings, a potential decrease in the discretionary income
of targeted individuals, changing consumer tastes and interests, and the potential increase in government regulation. Companies in the
media and entertainment industries may become obsolete quickly. Advertising spending can be an important revenue source for media and
entertainment companies. During economic downturns advertising spending typically decreases and, as a result, media and entertainment
companies tend to generate less revenue.
|
|
|
|
|
|
|
|
|
|
Smaller Companies Investment Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Smaller
Companies Investment Risk. The Fund may invest in the securities of smaller, less seasoned companies. Smaller companies offer
investment opportunities and additional risks. They may not be well known to the investing public, may not be significantly owned by
institutional investors and may not have steady earnings growth. These companies may have limited product lines and markets, as well
as shorter operating histories, less experienced management and more limited financial resources than larger companies. In addition,
the securities of such companies may be more vulnerable to adverse general market or economic developments, more volatile in price, have
wider spreads between their bid and ask prices and have significantly lower trading volumes than the securities of larger capitalization
companies. As such, securities of these smaller companies may be less liquid than those of larger companies, and may experience greater
price fluctuations than larger companies. In addition, small-cap or mid-cap company securities may not be widely followed by investors,
which may result in reduced demand.
As
a result, the purchase or sale of more than a limited number of shares of the securities of a smaller company may affect its market price.
The Investment Adviser may need a considerable amount of time to purchase or sell its positions in these securities, particularly when
other Investment Adviser-managed accounts or other investors are also seeking to purchase or sell them.
The
securities of smaller capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price
changes than larger capitalization securities or the market as a whole. In addition, smaller capitalization securities may be particularly
sensitive to changes in interest rates, borrowing costs and earnings. Investing in smaller capitalization securities requires a longer-term
view.
Securities
of emerging companies may lack an active secondary market and may be subject to more abrupt or erratic price movements than securities
of larger, more established companies or stock market averages in
general.
Competitors of certain companies, which may or may not be in the same industry, may have substantially greater financial resources than
the companies in which the Fund may invest.
|
|
|
|
|
|
|
|
|
|
Market Value And Net Asset Value [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Market
Value and Net Asset Value. The Fund is a diversified, closed-end management investment company. Shares of closed-end funds are
bought and sold in the securities markets and may trade at either a premium to or discount from net asset value. Listed shares of closed-end
investment companies often trade at discounts from net asset value. This characteristic of shares of a closed-end fund is a risk separate
and distinct from the risk that its net asset value may decrease. The Fund cannot predict whether its listed stock will trade at, below,
or above net asset value. As of December 31, 2023, the shares of common stock traded at a premium of 51.60%. Stockholders desiring
liquidity may, subject to applicable securities laws, trade their Fund common stock on the NYSE or other markets on which such shares
may trade at the then-current market value, which may differ from the then-current net asset value. Stockholders will incur brokerage
or other transaction costs to sell stock.
|
|
|
|
|
|
|
|
|
|
Foreign Securities Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Foreign
Securities Risk. Investments in the securities of foreign issuers involve certain considerations and risks not ordinarily associated
with investments in securities of domestic issuers and such securities may be more volatile than those of issuers located in the United
States. Foreign companies are not generally subject to uniform accounting, auditing and financial standards and requirements comparable
to those applicable to U.S. companies.
Foreign
securities exchanges, brokers and listed companies may be subject to less government supervision and regulation than exists in the United
States. Dividend and interest income may be subject to withholding and other foreign taxes, which may adversely affect the net return
on such investments. There may be difficulty in obtaining or enforcing a court judgment abroad. In addition, it may be difficult to effect
repatriation of capital invested in certain countries. In addition, with respect to certain countries, there are risks of expropriation,
confiscatory taxation, political or social instability or diplomatic developments that could affect assets of the Fund held in foreign
countries. Dividend income the Fund receives from foreign securities may not be eligible for the special tax treatment applicable to
qualified dividend income. Moreover, certain equity investments in foreign issuers classified as passive foreign investment companies
may be subject to additional taxation risk.
There
may be less available information about a foreign company than a U.S. company, and foreign companies may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to or as uniform as those of U.S. companies. Foreign securities
markets may have substantially less volume than U.S. securities markets and some foreign company securities are less liquid and their
prices more volatile than securities of otherwise comparable U.S. companies. A portfolio of foreign securities may also be adversely
affected by fluctuations in the rates of exchange between the currencies of different nations and by exchange control regulations, and
there is generally less government supervision and regulation of exchanges, brokers, and issuers than there is in the U.S. The Fund might
have greater difficulty taking appropriate legal action in non-U.S. courts and there may be less developed bankruptcy laws. Foreign markets
also have different clearance and settlement procedures that could cause the Fund to encounter difficulties in purchasing and selling
securities on such markets and may result in the Fund missing attractive investment opportunities or experiencing loss. In addition,
a portfolio that includes foreign securities can expect to have a higher expense ratio because of the increased transaction costs on
non-U.S. securities markets and the increased costs of maintaining the custody of foreign securities.
Investments
in foreign securities will expose the Fund to the direct or indirect consequences of political, social or economic changes in the countries
that issue the securities or in which the issuers are located. Certain countries in which the Fund may invest have historically experienced,
and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and unemployment. Many of these countries are also characterized by political
uncertainty and instability. The cost of servicing external debt will generally be adversely affected by rising international interest
rates because many external debt obligations bear interest at rates which are adjusted based upon international interest rates.
The
Fund also may purchase ADRs or U.S. dollar-denominated securities of foreign issuers. ADRs are receipts issued by U.S. banks or trust
companies in respect of securities of foreign issuers held on deposit for use in the U.S. securities markets. While ADRs may not necessarily
be denominated in the same currency as the securities into which they may be converted, many of the risks associated with foreign securities
may also apply to ADRs. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered
depositary receipts, are under no obligation to distribute stockholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities.
The
following provides more detail on certain pronounced risks with foreign investing:
|
● |
Foreign
Currency Risk. The Fund may invest in companies whose securities are denominated or quoted in currencies other than U.S. dollars
or have significant operations or markets outside of the United States. In such instances, the Fund will be exposed to currency risk,
including the risk of fluctuations in the exchange rate between U.S. dollars (in which the Fund’s shares are denominated) and
such foreign currencies, the risk of currency devaluations and the risks of non-exchangeability and blockage. As non-U.S. securities
may be purchased with and payable in currencies of countries other than the U.S. dollar, the value of these assets measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates and exchange control regulations. Fluctuations in currency
rates may adversely affect the ability of the Investment Adviser to acquire such securities at advantageous prices and may also adversely
affect the performance of such assets. |
Certain
non-U.S. currencies, primarily in developing countries, have been devalued in the past and might face devaluation in the future. Currency
devaluations generally have a significant and adverse impact on the devaluing country’s economy in the short and intermediate term
and on the financial condition and results of companies’ operations in that country. Currency devaluations may also be accompanied
by significant declines in the values and liquidity of equity and debt securities of affected governmental and private sector entities
generally. To the extent that affected companies have obligations denominated in currencies other than the devalued currency, those companies
may also have difficulty in meeting those obligations under such circumstances, which in turn could have an adverse effect upon the value
of the Fund’s investments in such companies. There can be no assurance that current or future developments with respect to foreign
currency devaluations will not impair the Fund’s investment flexibility, its ability to achieve its investment objectives or the
value of certain of its foreign currency-denominated investments.
|
● |
Tax
Consequences of Foreign Investing. The Fund’s transactions in foreign currencies, foreign currency-denominated debt obligations
and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary
income or loss to the extent such income |
|
|
or loss results from fluctuations in the
value of the foreign currency concerned. This treatment could increase or decrease the Fund’s ordinary income distributions
to you, and may cause some or all of the Fund’s previously distributed income to be classified as a return of capital. In certain
cases, the Fund may make an election to treat gain or loss attributable to certain investments as capital gain or loss. |
|
● |
EMU
and Redenomination Risk. As the European debt crisis progressed, the possibility of one or more Eurozone countries exiting the
European Monetary Union (“EMU”), or even the collapse of the Euro as a common currency, arose, creating significant
volatility at times in currency and financial markets generally. The effects of the collapse of the Euro, or of the exit of one
or more countries from the EMU, on the U.S. and global economy and securities markets are impossible to predict and any such events
could have a significant adverse impact on the value and risk profile of the Fund’s portfolio. Any partial or complete dissolution
of the EMU could have significant adverse effects on currency and financial markets, and on the values of the Fund’s portfolio
investments. If one or more EMU countries were to stop using the Euro as its primary currency, the Fund’s investments in such
countries may be redenominated into a different or newly adopted currency. As a result, the value of those investments could decline
significantly and unpredictably. In addition, securities or other investments that are redenominated may be subject to foreign currency
risk, liquidity risk and valuation risk to a greater extent than similar investments currently denominated in Euros. To the extent
a currency used for redenomination purposes is not specified in respect of certain EMU-related investments, or should the Euro cease
to be used entirely, the currency in which such investments are denominated may be unclear, making such investments particularly
difficult to value or dispose of. The Fund may incur additional expenses to the extent it is required to seek judicial or other clarification
of the denomination or value of such securities. |
|
● |
Emerging
Markets Risk. The considerations noted above in “Foreign Securities Risk” are generally intensified for investments
in emerging market countries. Emerging market countries typically have economic and political systems that are less fully developed,
and can be expected to be less stable than those of more developed countries. Investing in securities of companies in emerging markets
may entail special risks relating to potential political and economic instability and the risks of expropriation, nationalization,
confiscation or the imposition of restrictions on foreign investment, the lack of hedging instruments and restrictions on repatriation
of capital invested. Economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation. Emerging
securities markets are substantially smaller, less developed, less liquid and more volatile than the major securities markets. The
limited size of emerging securities markets and limited trading volume compared to the volume of trading in U.S. securities could
cause prices to be erratic for reasons apart from factors that affect the quality of the securities. For example, limited market
size may cause prices to be unduly influenced by traders who control large positions. Adverse publicity and investors’ perceptions,
whether or not based on fundamental analysis, may decrease the value and liquidity of portfolio securities, especially in these markets.
Other risks include high concentration of market capitalization and trading volume in a small number of issuers representing a limited
number of industries, as well as a high concentration of investors and financial intermediaries; overdependence on exports, including
gold and natural resources exports, making these economies vulnerable to changes in commodity prices; overburdened infrastructure
and obsolete or unseasoned financial systems; environmental problems; less developed legal systems; and less reliable securities
custodial services and settlement practices. Certain emerging markets may also face other significant |
|
|
internal or external risks, including the
risk of war and civil unrest. For all of these reasons, investments in emerging markets may be considered speculative. |
|
● |
Eurozone
Risk. A number of countries in the EU have experienced, and may continue to experience, severe economic and financial difficulties.
In particular, many EU nations are susceptible to economic risks associated with high levels of debt, notably due to investments
in sovereign debt of countries such as Greece, Italy, Spain, Portugal, and Ireland. As a result, financial markets in the EU have
been subject to increased volatility and declines in asset values and liquidity. Responses to these financial problems by European
governments, central banks, and others, including austerity measures and reforms, may not work, may result in social unrest, and
may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments
and others of their debt could have additional adverse effects on economies, financial markets, and asset valuations around the world.
Greece, Ireland, and Portugal have already received one or more “bailouts” from other Eurozone member states, and it
is unclear how much additional funding they will require or if additional Eurozone member states will require bailouts in the future.
One or more other countries may also abandon the euro and/or withdraw from the EU, placing its currency and banking system in jeopardy.
The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching. |
|
● |
Brexit
Risk. On January 31, 2020, the United Kingdom officially withdrew from the EU, commonly referred to as “Brexit.”
Following a transition period, the United Kingdom and the EU signed a Trade and Cooperation Agreement (“UK/EU Trade Agreement”),
which came into full force on May 1, 2021 and set out the foundation of the economic and legal framework for trade between the
United Kingdom and the EU. As the UK/EU Trade Agreement is a new legal framework, the implementation of the UK/EU Trade Agreement
may result in uncertainty in its application and periods of volatility in both the United Kingdom and wider European markets. The
United Kingdom’s exit from the EU is expected to result in additional trade costs and disruptions in this trading relationship.
Furthermore, there is the possibility that either party may impose tariffs on trade in the future in the event that regulatory standards
between the EU and the UK diverge. The terms of the future relationship may cause continued uncertainty in the global financial markets,
and adversely affect our ability, and the ability of our portfolio companies, to execute our respective strategies and to receive
attractive returns. |
In
particular, currency volatility may mean that our returns and the returns of our portfolio companies will be adversely affected by market
movements and may make it more difficult, or more expensive, for us to implement appropriate currency hedging. Potential declines in
the value of the British Pound and/or the euro against other currencies, along with the potential downgrading of the United Kingdom’s
sovereign credit rating, may also have an impact on the performance of any of our portfolio companies located in the United Kingdom or
Europe.
In
addition, certain European countries have experienced negative interest rates on certain fixed-income instruments. A negative interest
rate policy is an unconventional central bank monetary policy tool where nominal target interest rates are set with a negative value
(i.e., below zero percent) intended to help create self-sustaining growth in the local economy. Negative interest rates may result in
heightened market volatility and may detract from the Fund’s performance to the extent the Fund is exposed to such interest rates.
Among other things, these developments adversely affected the value and exchange rate of the euro and pound sterling, and
any
similar developments may continue to significantly affect the economies of all EU countries, which in turn may have a material adverse
effect on the Fund’s investments in such countries, other countries that depend on EU countries for significant amounts of trade
or investment, or issuers with exposure to debt issued by certain EU countries.
To
the extent the Fund has exposure to European markets or to transactions tied to the value of the euro, these events could negatively
affect the value and liquidity of the Fund’s investments. All of these developments may continue to significantly affect the economies
of all EU countries, which in turn may have a material adverse effect on the Fund’s investments in such countries, other countries
that depend on EU countries for significant amounts of trade or investment, or issuers with exposure to debt issued by certain EU countries.
In
addition, certain European countries have recently experienced negative interest rates on certain fixed-income instruments. A negative
interest rate policy is an unconventional central bank monetary policy tool where nominal target interest rates are set with a negative
value (i.e., below zero percent) intended to help create self-sustaining growth in the local economy. Negative interest rates may result
in heightened market volatility and may detract from the Fund’s performance to the extent the Fund is exposed to such interest
rates. Among other things, these developments have adversely affected the value and exchange rate of the euro and pound sterling, and
any similar developments may continue to significantly affect the economies of all EU countries, which in turn may have a material adverse
effect on the Fund’s investments in such countries, other countries that depend on EU countries for significant amounts of trade
or investment, or issuers with exposure to debt issued by certain EU countries.
To
the extent the Fund has exposure to European markets or to transactions tied to the value of the euro, these events could negatively
affect the value and liquidity of the Fund’s investments. All of these developments may continue to significantly affect the economies
of all EU countries, which in turn may have a material adverse effect on the Fund’s investments in such countries, other countries
that depend on EU countries for significant amounts of trade or investment, or issuers with exposure to debt issued by certain EU countries.
|
|
|
|
|
|
|
|
|
|
Special Risks Related To Investment In Derivative Transactions [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Special
Risks Related to Investment in Derivative Transactions. The Fund may participate in certain derivative transactions, as described
herein. Such transactions entail certain execution, market, liquidity, counterparty, correlation, volatility, hedging and tax risks.
Participation in the options or futures markets, in currency exchange transactions and in other derivatives transactions involves investment
risks and transaction costs to which the Fund would not be subject absent the use of these strategies. If the Investment Adviser’s
prediction of movements in the direction of the securities, foreign currency, interest rate or other referenced instruments or markets
is inaccurate, the consequences to the Fund may leave the Fund in a worse position
than
if it had not used such strategies. Risks inherent in the use of options, swaps, foreign currency, futures contracts and options on futures
contracts, securities indices and foreign currencies include:
|
● |
dependence
on the Investment Adviser’s ability to predict correctly movements in the direction of the relevant measure; |
|
● |
imperfect
correlation between the price of the derivative instrument and movements in the prices of the referenced assets; |
|
● |
the
fact that skills needed to use these strategies are different from those needed to select portfolio securities; |
|
● |
the
possible absence of a liquid secondary market for any particular instrument at any time; |
|
● |
the
possible need to defer closing out certain hedged positions to avoid adverse tax consequences; |
|
● |
the
possible inability of the Fund to purchase or sell a security or instrument at a time that otherwise would be favorable for it to
do so, or the possible need for the Fund to sell a security or instrument at a disadvantageous time due to a need for the Fund to
remain in compliance with the 1940 Act restrictions regarding derivatives transactions; and |
|
● |
the
creditworthiness of counterparties. |
Options,
futures contracts, swaps contracts, and options thereon and forward contracts on securities and currencies may be traded on foreign exchanges.
Such transactions may not be regulated as effectively as similar transactions in the United States, may not involve a clearing mechanism
and related guarantees, and are subject to the risk of governmental actions affecting trading in, or the prices of, foreign securities.
The value of such positions also could be adversely affected by (i) other complex foreign political, legal and economic factors, (ii)
lesser availability than in the United States of data on which to make trading decisions, (iii) delays in the ability of the Fund to
act upon economic events occurring in the foreign markets during non-business hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements than in the United States, and (v) less trading volume. Exchanges
on which options, futures, swaps and options on futures or swaps are traded may impose limits on the positions that the Fund may take
in certain circumstances.
Many
OTC derivatives are valued on the basis of dealers’ pricing of these instruments. However, the price at which dealers value a particular
derivative and the price which the same dealers would actually be willing to pay for such derivative should the Fund wish or be forced
to sell such position may be materially different. Such differences can result in an overstatement of the Fund’s net asset value
and may materially adversely affect the Fund in situations in which the Fund is required to sell derivative instruments. Exchange-traded
derivatives and OTC derivative transactions submitted for clearing through a central counterparty have become subject to minimum initial
and variation margin requirements set by the relevant clearinghouse, as well as possible margin requirements mandated by the SEC or the
CFTC. These regulators also have broad discretion to impose margin requirements on non-cleared OTC derivatives. These margin requirements
will increase the overall costs for the Fund.
While
hedging can reduce or eliminate losses, it can also reduce or eliminate gains. Hedges are sometimes subject to imperfect matching between
the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective.
Derivatives may give rise to a form of leverage and may
expose
the Fund to greater risk and increase its costs. Future CFTC or SEC rulemakings could potentially further limit or completely restrict
the Fund’s ability to use these instruments as a part of the Fund’s investment strategy, increase the costs of using these
instruments or make them less effective. Limits or restrictions applicable to the counterparties with which the Fund engages in derivative
transactions could also prevent the Fund from using these instruments or affect the pricing or other factors relating to these instruments
or may change the availability of certain investments. New regulation may make derivatives more costly, may limit the availability of
derivatives, or may otherwise adversely affect the value or performance of derivatives.
|
|
|
|
|
|
|
|
|
|
Securities Of Investment Companies Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Securities
of Investment Companies Risk. To the extent permitted by law, the Fund may invest in investment company securities, including
preferred stock and the common equity of such companies. Investments in the common equity of investment companies will cause the Fund
to bear a ratable share of any such investment company’s expenses, including management fees. The Fund will also remain obligated
to pay management fees to the Investment Adviser with respect to the assets invested in any securities of another investment company.
In these circumstances, holders of the Fund’s common stock will be subject to duplicative investment expenses.
|
|
|
|
|
|
|
|
|
|
Long Term Objective Not Complete Investment Program Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Long-Term
Objective; Not a Complete Investment Program Risk. The Fund is intended for investors seeking long-term capital growth. The Fund
is not meant to provide a vehicle for those who wish to exploit short-term swings in the stock market. An investment in shares of the
Fund should not be considered a complete investment program. Each stockholder should take into account the Fund’s investment objectives
as well as the stockholder’s other investments when considering an investment in the Fund.
|
|
|
|
|
|
|
|
|
|
Management Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Management
Risk. The Fund is subject to management risk because it is an actively managed portfolio. The Investment Adviser will apply investment
techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired
results.
|
|
|
|
|
|
|
|
|
|
Dependence On Key Personnel [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Dependence
on Key Personnel Risk. The Investment Adviser is dependent upon the expertise of Mr. Mario J. Gabelli in providing advisory
services with respect to the Fund’s investments. If the Investment Adviser were to lose the services of Mr. Gabelli, its ability
to service the Fund could be adversely affected. There can be no assurance that a suitable replacement could be found for Mr. Gabelli
in the event of his death, resignation, retirement or inability to act on behalf of the Investment Adviser.
|
|
|
|
|
|
|
|
|
|
Market Disruption And Geopolitical Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Market
Disruption and Geopolitical Risk. General economic and market conditions, such as interest rates, availability of credit, inflation
rates, economic uncertainty, supply chain disruptions, labor shortages, energy and other resource shortages, changes in laws, trade barriers,
currency exchange controls and national and international political circumstances (including governmental responses to public health
crises or the spread of infectious diseases), may have long-term negative effects on the U.S. and worldwide financial markets and economy.
These conditions have resulted in, and in many cases continue to result in, greater price volatility, less liquidity, widening credit
spreads and a lack of price transparency, with many securities remaining illiquid and of uncertain value. Such market conditions may
adversely affect the Company, including by making valuation of some of the Fund’s securities uncertain and/or result in sudden
and significant valuation increases or declines in the Fund’s holdings.
Risks
resulting from any future debt or other economic crisis could also have a detrimental impact on the global economy, the financial condition
of financial institutions and the Fund’s business, financial condition and results of operation. Market and economic disruptions
have affected, and may in the future affect, consumer confidence
levels
and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. To the
extent uncertainty regarding the U.S. or global economy negatively impacts consumer confidence and consumer credit factors, the Fund
could be significantly and adversely affected. Downgrades to the credit ratings of major banks could result in increased borrowing costs
for such banks and negatively affect the broader economy. Moreover, Federal Reserve policy, including with respect to certain interest
rates, may also adversely affect the value, volatility and liquidity of dividend- and interest-paying securities. Market volatility,
rising interest rates and/or a return to unfavorable economic conditions could impair the Fund’s ability to achieve its investment
objectives.
The
occurrence of events similar to those in recent years, such as localized wars, instability, new and ongoing pandemics, epidemics or outbreaks
of infectious diseases in certain parts of the world, and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes
and global health epidemics, terrorist attacks in the U.S. and around the world, social and political discord, debt crises sovereign
debt downgrades, increasingly strained relations between the U.S. and a number of foreign countries, new and continued political unrest
in various countries, the exit or potential exit of one or more countries from the EU or the EMU, continued changes in the balance of
political power among and within the branches of the U.S. government, government shutdowns, among others, may result in market volatility,
may have long-term effects on the U.S. and worldwide financial markets, and may cause further economic uncertainties in the U.S. and
worldwide.
In
particular, the consequences of the Russian military invasion of Ukraine, the impact on inflation and increased disruption to supply
chains and energy resources may impact the Fund’s portfolio companies, result in an economic downturn or recession either globally
or locally in the U.S. or other economies, reduce business activity, spawn additional conflicts (whether in the form of traditional military
action, reignited “cold” wars or in the form of virtual warfare such as cyberattacks) with similar and perhaps wider ranging
impacts and consequences and have an adverse impact on the Fund’s returns and net asset values. In response to the conflict between
Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia, Russian-backed separatist
regions in Ukraine, and certain banks, companies, government officials and other individuals in Russia and Belarus. Any of the above
factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect
on the Fund. The Fund has no way to predict the duration or outcome of the situation, as the conflict and government reactions are rapidly
developing and beyond the Fund’s control. Prolonged unrest, military activities, or broad-based sanctions could have a material
adverse effect on companies in which the Fund invests. Such consequences also may increase such companies’ funding costs or limit
their access to the capital markets.
The
current political climate has intensified concerns about a potential trade war between China and the U.S., as each country has imposed
tariffs on the other country’s products. These actions may trigger a significant reduction in international trade, the oversupply
of certain manufactured goods, substantial price reductions of goods and possible failure of individual companies and/or large segments
of China’s export industry, which could have a negative impact the Fund’s performance. U.S. companies that source material
and goods from China and those that make large amounts of sales in China would be particularly vulnerable to an escalation of trade tensions.
Uncertainty regarding the outcome of the trade tensions and the potential for a trade war could cause the U.S. dollar to decline against
safe haven currencies, such as the Japanese yen and the euro. Events such as these and their consequences are difficult to predict and
it is unclear whether further tariffs may
be
imposed or other escalating actions may be taken in the future. Any of these effects could have a material adverse effect on the Fund.
Periods
of volatility still remain, and risks to a robust resumption of growth persist. Federal Reserve policy, including with respect to certain
interest rates, may adversely affect the value, volatility and liquidity of dividend and interest paying securities. Market volatility,
dramatic changes to interest rates and/or a return to unfavorable economic conditions may lower the Fund’s performance or impair
the Fund’s ability to achieve its investment objective.
|
|
|
|
|
|
|
|
|
|
Economic Events And Market Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Economic
Events and Market Risk. Periods of market volatility remain, and may continue to occur in the future, in response to various
political, social and economic events both within and outside of the United States. These conditions have resulted in, and in many cases
continue to result in, greater price volatility, less liquidity, widening credit spreads and a lack of price transparency, with many
securities remaining illiquid and of uncertain value. Such market conditions may adversely affect the Fund, including by making valuation
of some of the Fund’s securities uncertain and/or result in sudden and significant valuation increases or declines in the Fund’s
holdings. If there is a significant decline in the value of the Fund’s portfolio, this may impact the asset coverage levels for
the Fund’s outstanding leverage.
Risks
resulting from any future debt or other economic crisis could also have a detrimental impact on the global economic recovery, the financial
condition of financial institutions and our business, financial condition and results of operation. Market and economic disruptions have
affected, and may in the future affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and
default on consumer debt and home prices, among other factors. To the extent uncertainty regarding the U.S. or global economy negatively
impacts consumer confidence and consumer credit factors, our business, financial condition and results of operations could be significantly
and adversely affected. Downgrades to the credit ratings of major banks could result in increased borrowing costs for such banks and
negatively affect the broader economy. Moreover, Federal Reserve policy, including with respect to certain interest rates, may also adversely
affect the value, volatility and liquidity of dividend- and interest-paying securities. Market volatility, rising interest rates and/or
a return to unfavorable economic conditions could impair the Fund’s ability to achieve its investment objectives.
|
|
|
|
|
|
|
|
|
|
Regulation And Government Intervention Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Regulation
and Government Intervention Risk. Changes enacted by the current presidential administration could significantly impact the regulation
of financial markets in the U.S. Areas subject to potential change, amendment or repeal include trade and foreign policy, corporate tax
rates, energy and infrastructure policies, the environment and sustainability, criminal and social justice initiatives, immigration,
healthcare and the oversight of certain federal financial regulatory agencies and the Federal Reserve. Certain of these changes can,
and have, been effectuated through executive order. For example, the current administration has taken steps to rejoin the Paris climate
accord of 2015 and incentivize certain clean energy technologies, cancel the Keystone XL pipeline, provide military support to Ukraine
and change immigration enforcement priorities. Other potential changes that could be pursued by the current presidential administration
could include an increase in the corporate income tax rate; changes to regulatory enforcement priorities; and spending on clean energy
and infrastructure. It is not possible to predict which, if any, of these actions will be taken or, if taken, their effect on the economy,
securities markets or the financial stability of the U.S. The Fund may be affected by governmental
action
in ways that are not foreseeable, and there is a possibility that such actions could have a significant adverse effect on the Fund and
the Fund’s ability to achieve its investment objectives.
Additional
risks arising from the differences in expressed policy preferences among the various constituencies in the branches of the U.S. government
has led in the past, and may lead in the future, to short-term or prolonged policy impasses, which could, and has, resulted in shutdowns
of the U.S. federal government. U.S. federal government shutdowns, especially prolonged shutdowns, could have a significant adverse impact
on the economy in general and could impair the ability of issuers to raise capital in the securities markets. Any of these effects could
have a material adverse effect on the Fund’s net asset value.
In
addition, the rules dealing with the U.S. federal income taxation are constantly under review by persons involved in the legislative
process and by the IRS and the U.S. Treasury Department. The Tax Cuts and Jobs Act made substantial changes to the Code. Among those
changes were a significant permanent reduction in the generally applicable corporate tax rate, changes in the taxation of individuals
and other non-corporate taxpayers that generally but not universally reduce their taxes on a temporary basis subject to “sunset”
provisions, the elimination or modification of various previously allowed deductions (including substantial limitations on the deductibility
of interest and, in the case of individuals, the deduction for personal state and local taxes), certain additional limitations on the
deduction of net operating losses, certain preferential rates of taxation on certain dividends and certain business income derived by
non-corporate taxpayers in comparison to other ordinary income recognized by such taxpayers, and significant changes to the international
tax rules. In addition, on August 16, 2022, the Biden administration signed into law the Inflation Reduction Act, which modifies
key aspects of the Code, including by creating an alternative minimum tax on certain corporations and an excise tax on stock repurchases
by certain corporations. The effect of these and other changes is uncertain, both in terms of the direct effect on the taxation of an
investment in the Fund’s shares and their indirect effect on the value of the Fund’s assets, Fund shares or market conditions
generally.
In
addition, the U.S. government has proposed and adopted multiple regulations that could have a long-lasting impact on the Fund and on
the closed-end fund industry in general. The SEC’s final rules and amendments that modernize reporting and disclosure, along with
other potential upcoming regulations, could, among other things, restrict the Fund’s ability to engage in transactions, and/or
increase overall expenses of the Fund.
The
Fund may be affected by governmental action in ways that are not foreseeable, and there is a possibility that such actions could have
a significant adverse effect on the Fund and its ability to achieve its investment objective(s).
|
|
|
|
|
|
|
|
|
|
L I B O R Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
LIBOR
Risk. The Fund may be exposed to financial instruments that are tied to the London Interbank Offered Rate (“LIBOR”)
to determine payment obligations, financing terms, hedging strategies or investment value. The Fund’s investments may pay interest
at floating rates based on LIBOR or may be subject to interest caps or floors based on LIBOR. The Fund may also obtain financing at floating
rates based on LIBOR. Derivative instruments utilized by the Fund may also reference LIBOR.
In
July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the
end of 2021. LIBOR can no longer be used to calculate new deals as of December 31, 2021. Since December 31, 2021, all sterling,
euro, Swiss franc and Japanese yen LIBOR settings and the 1-week and 2-month U.S. dollar LIBOR settings have ceased to be published or
are no longer representative.
Overnight
and 12-month US dollar LIBOR settings permanently ceased as of June 30, 2023. 1-, 3-, and 6-month U.S. dollar LIBOR settings will
continue to be published using a synthetic methodology until September 2024. Various financial industry groups have begun planning
for the transition away from LIBOR, but there are challenges to converting certain securities and transactions to a new reference rate.
Neither the effect of the LIBOR transition process nor its ultimate success can yet be known.
As
an alternative to LIBOR, the Financial Reporting Council, in conjunction with the Alternative Reference Rates Committee, a steering committee
comprised of large U.S. financial institutions, recommended replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”),
a new index calculated by reference to short-term repurchase agreements, backed by Treasury securities. Abandonment of, or modifications
to, LIBOR could have adverse impacts on newly issued financial instruments and any of our existing financial instruments which reference
LIBOR. Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark rate that may be established, there
are many uncertainties regarding a transition from LIBOR, including, but not limited to, the need to amend all contracts with LIBOR as
the referenced rate and how this will impact the cost of variable rate debt and certain derivative financial instruments. In addition,
SOFR or other replacement rates may fail to gain market acceptance. Any failure of SOFR or alternative reference rates to gain market
acceptance could adversely affect the return on, value of and market for securities linked to such rates.
Neither
the effect of the LIBOR transition process nor its ultimate success can yet be known. The transition process might lead to increased
volatility and illiquidity in markets for, and reduce the effectiveness of, new hedges placed against instruments whose terms currently
include LIBOR. While some existing LIBOR-based instruments may contemplate a scenario where LIBOR is no longer available by providing
for an alternative rate-setting methodology, there may be significant uncertainty regarding the effectiveness of any such alternative
methodologies to replicate LIBOR. Not all existing LIBOR-based instruments may have alternative rate-setting provisions and there remains
uncertainty regarding the willingness and ability of issuers to add alternative rate-setting provisions in certain existing instruments.
Moreover, these alternative rate-setting provisions may not be designed for regular use in an environment where LIBOR ceases to be published,
and may be an ineffective fallback following the discontinuation of LIBOR.
On
March 15, 2022, President Biden signed into law the Consolidated Appropriations Act of 2022, which among other things, provides
for the use of interest rates based on SOFR in certain contracts currently based on LIBOR and a safe harbor from liability for utilizing
SOFR-based interest rates as a replacement for LIBOR. The elimination of LIBOR could have an adverse impact on the market value of and/or
transferability of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us or
on our overall financial condition or results of operations.
|
|
|
|
|
|
|
|
|
|
Legal Tax And Regulatory Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Legal,
Tax and Regulatory Risks. Legal, tax and regulatory changes could occur that may have material adverse effects on the Fund or
its stockholders. For example, the regulatory and tax environment for derivative instruments in which the Fund may participate is evolving,
and such changes in the regulation or taxation of derivative instruments may have material adverse effects on the value of derivative
instruments held by the Fund and the ability of the Fund to pursue its investment strategies. Similarly, the Biden administration has
indicated that it intends to modify key aspects of the Code, including by increasing corporate and individual tax rates. Changes to the
U.S. federal tax laws and interpretations thereof could adversely affect an investment in the Fund.
We
cannot assure you what percentage of the distributions paid on the Fund’s shares, if any, will consist of tax-advantaged qualified
dividend income or long-term capital gains or what the tax rates on various types of income will be in future years.
To
qualify for the favorable U.S. federal income tax treatment generally accorded to RICs, the Fund must, among other things, meet certain
asset diversification tests, derive in each taxable year at least 90% of its gross income from certain prescribed sources and distribute
for each taxable year at least 90% of its “investment company taxable income.” Statutory limitations on distributions on
the common stock if the Fund fails to satisfy the 1940 Act’s asset coverage requirements could jeopardize the Fund’s ability
to meet such distribution requirements. While the Fund presently intends to purchase or redeem notes or preferred stock, if any, to the
extent necessary in order to maintain compliance with such asset coverage requirements, there can be no assurance that such actions can
be effected in time to meet the Code requirements. If for any taxable year the Fund does not qualify as a RIC, all of its taxable income
for that year (including its net capital gain) would be subject to tax at regular corporate rates without any deduction for distributions
to stockholders, and such distributions would be taxable as ordinary dividends to the extent of the Fund’s current and accumulated
earnings and profits. The resulting corporate taxes would materially reduce the Fund’s net assets and the amount of cash available
for distribution to stockholders.
|
|
|
|
|
|
|
|
|
|
Act 1940 Regulation [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
1940
Act Regulation. The Fund is a registered closed-end investment company and as such is subject to regulations under the 1940 Act.
Generally speaking, any contract or provision thereof that is made, or where performance involves a violation of the 1940 Act or any
rule or regulation thereunder is unenforceable by either party unless a court finds otherwise.
|
|
|
|
|
|
|
|
|
|
Legislation Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Legislation
Risk. At any time after the date of this Annual Report, legislation may be enacted that could negatively affect the assets of
the Fund. Legislation or regulation may change the way in which the Fund itself is regulated. The Investment Adviser cannot predict the
effects of any new governmental regulation that may be implemented and there can be no assurance that any new governmental regulation
will not adversely affect the Fund’s ability to achieve its investment objectives.
|
|
|
|
|
|
|
|
|
|
Reliance On Service Providers Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Reliance
on Service Providers Risk. The Fund must rely upon the performance of service providers to perform certain functions, which may
include functions that are integral to the Fund’s operations and financial performance. Failure by any service provider to carry
out its obligations to the Fund in accordance with the terms of its appointment, to exercise due care and skill or to perform its obligations
to the Fund at all as a result of insolvency, bankruptcy or other causes could have a material adverse effect on the Fund’s performance
and returns to stockholders. The termination of the Fund’s relationship with any service provider, or any delay in appointing a
replacement for such service provider, could materially disrupt the business of the Fund and could have a material adverse effect on
the Fund’s performance and returns to stockholders.
|
|
|
|
|
|
|
|
|
|
Loans Of Portfolio Securities Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Loans
of Portfolio Securities Risk. Consistent with applicable regulatory requirements and the Fund’s investment restrictions,
the Fund may lend its portfolio securities to securities broker-dealers or financial institutions, provided that such loans are callable
at any time by the Fund (subject to certain notice provisions), and are at all times collateralized in accordance with applicable regulatory
requirements. The advantage of such loans is that the Fund continues to receive the income on the loaned securities while at the same
time earning interest on the cash amounts deposited as collateral, which will be invested in short-term obligations. The Fund
will
not lend its portfolio securities if such loans are not permitted by the laws or regulations of any state in which its shares are qualified
for sale.
|
|
|
|
|
|
|
|
|
|
Cyber Security Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Cybersecurity
Risk. The Fund and its service providers are susceptible to cyber security risks that include, among other things, theft, unauthorized
monitoring, release, misuse, loss, destruction or corruption of confidential and highly restricted data; denial of service attacks; unauthorized
access to relevant systems, compromises to networks or devices that the Fund and its service providers use to service the Fund’s
operations; or operational disruption or failures in the physical infrastructure or operating systems that support the Fund and its service
providers. Cyber attacks are becoming increasingly common and more sophisticated, and may be perpetrated by computer hackers, cyber-terrorists
or others engaged in corporate espionage. Cyber attacks against or security breakdowns of the Fund or its service providers may adversely
impact the Fund and its stockholders, potentially resulting in, among other things, financial losses; the inability of Fund stockholders
to transact business and the Fund to process transactions; inability to calculate the Fund’s net asset value; violations of applicable
privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs; and/ or additional
compliance costs. The Fund may incur additional costs for cyber security risk management and remediation purposes. In addition, cyber
security risks may also impact issuers of securities in which the Fund invests, which may cause the Fund’s investment in such issuers
to lose value. There have been a number of recent highly publicized cases of companies reporting the unauthorized disclosure of client
or customer information, as well as cyberattacks involving the dissemination, theft and destruction of corporate information or other
assets, as a result of failure to follow procedures by employees or contractors or as a result of actions by third parties, including
actions by terrorist organizations and hostile foreign governments. Although service providers typically have policies and procedures,
business continuity plans and/or risk management systems intended to identify and mitigate cyber incidents, there are inherent limitations
in such plans and systems including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control
the cyber security policies, plans and systems put in place by its service providers or any other third parties whose operations may
affect the Fund or its stockholders. There can be no assurance that the Fund or its service providers will not suffer losses relating
to cyber attacks or other information security breaches in the future.
Because
technology is consistently changing, new ways to carry out cyber attacks are always developing. Therefore, there is a chance that some
risks have not been identified or prepared for, or that an attack may not be detected, which puts limitations on the Fund’s ability
to plan for or respond to a cyber attack. In addition to deliberate cyber attacks, unintentional cyber incidents can occur, such as the
inadvertent release of confidential information by the Fund or its service providers. Like other funds and business enterprises, the
Fund and its service providers are subject to the risk of cyber incidents occurring from time to time.
|
|
|
|
|
|
|
|
|
|
Misconduct Of Employees And Of Service Providers Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Misconduct
of Employees and of Service Providers Risk. Misconduct or misrepresentations by employees of the Investment Adviser or the Fund’s
service providers could cause significant losses to the Fund. Employee misconduct may include binding the Fund to transactions that exceed
authorized limits or present unacceptable risks and unauthorized trading activities, concealing unsuccessful trading activities (which,
in any case, may result in unknown and unmanaged risks or losses) or making misrepresentations regarding any of the foregoing. Losses
could also result from actions by the Fund’s service providers, including, without limitation, failing to recognize trades and
misappropriating assets. In addition, employees and service providers may improperly use or disclose confidential information, which
could result in litigation or serious financial harm, including limiting
the
Fund’s business prospects or future marketing activities. Despite the Investment Adviser’s due diligence efforts, misconduct
and intentional misrepresentations may be undetected or not fully comprehended, thereby potentially undermining the Investment Adviser’s
due diligence efforts. As a result, no assurances can be given that the due diligence performed by the Investment Adviser will identify
or prevent any such misconduct.
|
|
|
|
|
|
|
|
|
|
Anti Takeover Provisions [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Anti-Takeover
Provisions. The Fund’s Governing Documents include provisions that could limit the ability of other entities or persons
to acquire control of the Fund or convert the Fund to an open-end fund.
|
|
|
|
|
|
|
|
|
|
Special Risks To Holders Of Common Stock [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Special
Risks to Holders of Common Stock
Dilution
Risk. If the Fund determines to conduct a rights offering to subscribe for common stock, holders of common stock may experience
dilution or accretion of the aggregate net asset value of their common stock. Such dilution or accretion will depend upon whether (i)
such stockholders participate in the rights offering and (ii) the Fund’s net asset value per common share is above or below the
subscription price on the expiration date of the rights offering.
Stockholders
who do not exercise their subscription rights may, at the completion of such an offering, own a smaller proportional interest in the
Fund than if they exercised their subscription rights. As a result of such an offering, a stockholder may experience dilution in net
asset value per share if the subscription price per share is below the net asset value per share on the expiration date. If the subscription
price per share is below the net asset value per share of the Fund’s shares on the expiration date, a stockholder will experience
an immediate dilution of the aggregate net asset value of such stockholder’s shares if the stockholder does not participate in
such an offering and the stockholder will experience a reduction in the net asset value per share of such stockholder’s shares
whether or not the stockholder participates in such an offering. The Fund cannot state precisely the extent of this dilution (if any)
if the stockholder does not exercise such stockholder’s subscription rights because the Fund does not know what the net asset value
per share will be when the offer expires or what proportion of the subscription rights will be exercised.
Leverage
Risk. The Fund uses financial leverage for investment purposes by issuing preferred stock. The amount of leverage represents
approximately 43% of the Fund’s Managed Assets (defined as the aggregate net asset value of outstanding shares of common stock
plus assets attributable to outstanding shares of preferred stock, with no deduction for the liquidation preference of such shares of
preferred stock) as of December 31, 2023.
The
Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having a similar investment objective
and policies. These include the possibility of greater loss and the likelihood of higher volatility of the net asset value of the Fund
and the asset coverage for the preferred stock. Such volatility may increase the likelihood of the Fund having to sell investments in
order to meet its obligations to make distributions on the preferred stock or principal or interest payments on debt securities, or to
redeem preferred stock or repay debt, when it may be disadvantageous to do so. The Fund’s use of leverage may require it to sell
portfolio investments at inopportune times in order to raise cash to redeem preferred stock or otherwise de-leverage so as to maintain
required asset coverage amounts or comply with the mandatory redemption terms of any outstanding preferred stock. The use of leverage
magnifies both the favorable and unfavorable effects of price movements in the investments made by the Fund. To the extent that the Fund
employs leverage in its investment operations, the Fund is subject to substantial risk of loss. The Fund cannot assure you that
borrowings
or the issuance of preferred stock will result in a higher yield or return to the holders of the common stock. Also, since the Fund utilizes
leverage, a decline in net asset value could affect the ability of the Fund to make common share distributions and such a failure to
make distributions could result in the Fund ceasing to qualify as a RIC under the Code.
Because
the advisory fee paid to the Investment Adviser is calculated on the basis of the Fund’s Managed Assets rather than only on the
basis of net assets attributable to the shares of common stock, the fee may be higher when leverage is utilized, giving the Investment
Adviser an incentive to utilize leverage. However, the Investment Adviser has agreed to reduce any management fee on the incremental
assets attributable to the cumulative preferred stock during the fiscal year if the total return of the net asset value of the outstanding
shares of common stock, including distributions and advisory fee subject to reduction for that year, does not exceed the stated dividend
rate or corresponding swap rate of each particular series of preferred stock. This fee waiver will not apply to any preferred stock issued
from this offering. The Investment Adviser currently intends that the voluntary advisory fee waiver will remain in effect for as long
as the Series C Auction Rate Preferred Stock, Series E Preferred and Series G Preferred are outstanding. The Investment Adviser, however,
reserves the right to modify or terminate the voluntary advisory fee waiver at any time.
|
● |
Portfolio
Guidelines of Rating Agencies for Preferred Stock and/or Credit Facility. In order to obtain and maintain attractive credit quality
ratings for preferred stock, the Fund must comply with investment quality, diversification and other guidelines established by the
relevant rating agencies. These guidelines could affect portfolio decisions and may be more stringent than those imposed by the 1940
Act. In the event that a rating on the Fund’s preferred stock is lowered or withdrawn by the relevant rating agency, the Fund
may also be required to redeem all or part of its outstanding preferred stock, and the common stock of the Fund will lose the potential
benefits associated with a leveraged capital structure. |
The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on common stock
total return, assuming investment portfolio total returns (comprised of net investment income of the Fund, realized gains or losses of
the Fund and changes in the value of the securities held in the Fund’s portfolio) of -10%, -5%. 0%, 5% and 10%. These assumed investment
portfolio returns are hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected
to be experienced by the Fund. The table further reflects leverage representing 43% of the Fund’s net assets, the Fund’s
current projected blended annual average leverage dividend or interest rate of 5.14%, a management fee at an annual rate of 1.00% of
the liquidation preference of any outstanding preferred stock and estimated annual incremental expenses attributable to any outstanding
preferred stock 0.08% of the Fund’s net assets attributable to common stock.
Assumed
Return on Portfolio (Net of Expenses) |
|
|
(10.0 |
)% |
|
|
(5.0 |
)% |
|
|
0.0 |
% |
|
|
5.0 |
% |
|
|
10.0 |
% |
Corresponding
Return to Common Shareholder |
|
|
(22.32 |
)% |
|
|
(13.52 |
)% |
|
|
(4.72 |
)% |
|
|
4.08 |
% |
|
|
12.87 |
% |
The
following factors associated with leveraging could increase the investment risk and volatility of the price of the shares of common stock:
|
● |
leveraging
exaggerates any increase or decrease in the net asset value of the shares of common stock; |
|
● |
the
dividend requirements on the Fund’s shares of preferred stock may exceed the income from the portfolio securities purchased
with the proceeds from the issuance of preferred stock; |
|
● |
a
decline in net asset value results if the investment performance of the additional securities purchased fails to cover their cost
to the Fund (including any dividend requirements of preferred stock); |
|
● |
a
decline in net asset value could affect the ability of the Fund to make dividend payments on shares of common stock; |
Pursuant
to Section 18 of the 1940 Act, it is unlawful for the Fund, as a registered closed-end investment company, to issue any class of
senior security, or to sell any senior security that it issues, unless it can satisfy certain “asset coverage” ratios. The
asset coverage ratio with respect to a senior security representing indebtedness means the ratio of the value of the Fund’s total
assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate amount of the Fund’s senior
securities representing indebtedness. The asset coverage ratio with respect to a senior security representing stock means the ratio of
the value of the Fund’s total assets (less all liabilities and indebtedness not represented by senior securities) to the aggregate
amount of the Fund’s senior securities representing indebtedness plus the aggregate liquidation preference of the Fund’s
outstanding shares of preferred stock.
If,
as is the case with the Fund, a registered investment company’s senior securities are equity securities, such securities must have
an asset coverage of at least 200% immediately following its issuance. If a registered investment company’s senior securities represent
indebtedness, such indebtedness must have an asset coverage of at least 300% immediately after their issuance. Subject to certain exceptions,
during any period following issuance that the Fund fails to satisfy these asset coverage ratios, it will, among other things, be prohibited
from declaring any dividend or declaring any other distribution in respect of its common stock except a dividend payable in shares of
common stock issued by the Fund.
|
|
|
|
|
|
|
|
|
|
Common Stock Distribution Policy Risk [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Common
Stock Distribution Policy Risk. The Fund has adopted a policy, which may be changed at any time by the Board, of paying a minimum
annual distribution of 10% of the average net asset value of the Fund to common stockholders. In the event the Fund does not generate
a total return from dividends and interest received and net realized capital gains in an amount equal to or in excess of its stated distribution
in a given year, the Fund may return capital as part of such distribution, which may have the effect of decreasing the asset coverage
per share with respect to the Fund’s preferred stock. Distributions on the Fund’s common stock may contain a return of capital.
Any return of capital should not be considered by investors as yield or total return on their investment in the Fund. For the fiscal
year ended December 31, 2023, the Fund distributed a return of capital. Distributions sourced from return of capital should not
be considered as dividend yield or the total return from an investment in the Fund. Stockholders who periodically receive the payment
of a dividend or other distribution consisting of a return of capital may be under the impression that they are receiving net profits
when they are not. Stockholders should not assume that the source of a distribution from the Fund is net profit. The composition of each
distribution is estimated based on the earnings of the Fund as of the record date for each distribution. The actual composition of each
of the current year’s distributions will be based on the Fund’s investment activity through the end of the calendar year.
|
|
|
|
|
|
|
|
|
|
Special Risks To Holders Of Fixed Rate Preferred Shares [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Special
Risks to Holders of Fixed Rate Preferred Stock
Illiquidity
Prior to Exchange Listing. Prior to the offering, there will be no public market for any additional series of fixed rate preferred
stock. In the event any additional series of fixed rate preferred stock is issued, prior application will have been made to list such
shares on a national securities exchange, which will likely be the NYSE. However, during an initial period, which is not expected to
exceed 30 days after the date of its initial issuance, such shares may not be listed on any securities exchange. During such period,
the underwriters may make a market in such shares, though, they will have no obligation to do so. Consequently, an investment in such
shares may be illiquid during such period.
Market
Price Fluctuation. Shares of fixed rate preferred stock may trade at a premium to or discount from liquidation value for various
reasons, including changes in interest rates.
|
|
|
|
|
|
|
|
|
|
Special Risks For Holders Of Auction Rate Preferred Stock [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Special
Risks for Holders of Auction Rate Preferred Stock
Auction
Risk. You may not be able to sell your auction rate preferred stock at an auction if the auction fails, i.e., if more shares
of auction rate preferred stock are offered for sale than there are buyers for those shares. Also, if you place an order (a hold order)
at an auction to retain auction rate preferred stock only at a specified rate that exceeds the rate set at the auction, you will not
retain your auction rate preferred stock. Additionally, if you place a hold order without specifying a rate below which you would not
wish to continue to hold your shares and the auction sets a below market rate, you will receive a lower rate of return on your shares
than the market rate. Finally, the dividend period may be changed, subject to certain conditions and with notice to the holders of the
auction rate preferred stock, which could also affect the liquidity of your investment. Since February 2008, most auction rate preferred
stock, including our Series C Auction Rate Preferred, have had failed auctions and holders of such stock have suffered reduced liquidity.
Secondary
Market Risk. If you try to sell your auction rate preferred stock between auctions, you may not be able to sell them for their
liquidation preference per share or such amount per share plus accumulated dividends. If the Fund has designated a special dividend period
of more than seven days, changes in interest rates could affect the price you would receive if you sold your shares in the secondary
market. Broker-dealers that maintain a secondary trading market for the auction rate preferred stock are not required to maintain this
market, and the Fund is not required to redeem auction rate preferred stock if either an auction or an attempted secondary market sale
fails because of a lack of buyers. The auction rate preferred stock will not be registered on a stock exchange. If you sell your auction
rate preferred stock to a broker-dealer between auctions, you may receive less than the price you paid for them, especially when market
interest rates have risen since the last auction or during a special dividend period. Since February 2008, most auction rate preferred
stock, including our Series C Auction Rate Preferred, have had failed auctions and holders of such stock have suffered reduced liquidity,
including the inability to sell such stock in a secondary market.
|
|
|
|
|
|
|
|
|
|
Special Risk For Holders Of Subscription Rights [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Special
Risks for Holders of Subscription Rights
There
is a risk that changes in market conditions may result in the underlying common or preferred stock purchasable upon exercise of the subscription
rights being less attractive to investors at the conclusion of the subscription period. This may reduce or eliminate the value of the
subscription rights. Investors who receive subscription rights may find that there is no market to sell rights they do not wish to exercise.
If investors
exercise
only a portion of the rights, the number of common or preferred stock issued may be reduced, and the common or preferred stock may trade
at less favorable prices than larger offerings for similar securities.
|
|
|
|
|
|
|
|
|
|
Additional Risks Relating To Derivative Investments [Member] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Description of Registrant [Abstract] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk [Text Block] |
|
|
|
|
|
|
|
|
|
Additional
Risks Relating to Derivative Investments
Derivatives
Transactions Subject to Rule 18f-4. Rule 18f-4 under the 1940 Act governs the Fund’s use of derivative instruments
and certain other transactions that create future payment and/or delivery obligations by the Fund. Rule 18f-4 permits the Fund to
enter into Derivatives Transactions (as defined below) and certain other transactions notwithstanding the restrictions on the issuance
of “senior securities” under Section 18 of the 1940 Act. Section 18 of the 1940 Act, among other things, prohibits
closed-end funds, including the Fund, from (i) issuing or selling any “senior security” representing indebtedness unless,
immediately after such issuance or sale, the fund will have asset coverage of at least 300%, and (ii) issuing or selling any “senior
security” which is stock unless, immediately after such issuance or sale, the fund will have asset coverage of at least 200%. In
connection with the adoption of Rule 18f-4, the SEC eliminated the asset segregation framework arising from prior SEC guidance for
covering Derivatives Transactions and certain financial instruments.
Under
Rule 18f-4, “Derivatives Transactions” include the following: (i) any swap, security-based swap (including a contract
for differences), futures contract, forward contract, option (excluding purchased options), any combination of the foregoing, or any
similar instrument, under which a Fund is or may be required to make any payment or delivery of cash or other assets during the life
of the instrument or at maturity or early termination, whether as margin or settlement payment or otherwise; (ii) any short sale borrowing;
(iii) reverse repurchase agreements and similar financing transactions, if a Fund elects to treat these transactions as Derivatives Transactions
under Rule 18f-4; and (iv) when-issued or forward-settling securities (e.g., firm and standby commitments, including to-be-announced
(“TBA”) commitments, and dollar rolls) and non-standard settlement cycle securities, unless the Fund intends to physically
settle the transaction and the transaction will settle within 35 days of its trade date.
Unless
a fund is relying on the Limited Derivatives User Exception (as defined below), the fund must comply with Rule 18f-4 with respect
to its Derivatives Transactions. Rule 18f-4, among other things, requires a fund to (i) appoint a Derivatives Risk Manager, (ii)
maintain a Derivatives Risk Management Program designed to identify, assess, and reasonably manage the risks associated with Derivatives
Transactions; (iii) comply with certain value-at-risk (VaR)-based leverage limits (VaR is an estimate of an instrument’s or portfolio’s
potential losses over a given time horizon and at a specified confidence level); and (iv) comply with certain reporting and recordkeeping
requirements of the fund’s board of directors.
Rule 18f-4
provides an exception from the requirements to appoint a Derivatives Risk Manager, adopt a Derivatives Risk Management Program, comply
with certain VaR-based leverage limits, and comply with certain Board oversight and reporting requirements if a fund’s “derivatives
exposure” (as defined in Rule 18f-4) is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)
and the fund adopts and implements written policies and procedures reasonably designed to manage its derivatives risks (the “Limited
Derivatives User Exception”).
Pursuant
to Rule 18f-4, if the Fund enters into reverse repurchase agreements or similar financing transactions, the Fund will (i) aggregate
the amount of indebtedness associated with all of its reverse repurchase agreements or similar financing transactions with the amount
of any other “senior securities” representing indebtedness
(e.g.,
bank borrowings, if applicable) when calculating the Fund’s asset coverage ratio or (ii) treat all such transactions as Derivatives
Transactions.
The
requirements of Rule 18f-4 may limit the Fund’s ability to engage in Derivatives Transactions as part of its investment strategies.
These requirements may also increase the cost of the Fund’s investments and cost of doing business, which could adversely affect
the value of the Fund’s investments and/or the performance of the Fund.
Futures
Contracts and Options on Futures Risk. Futures and options on futures entail certain risks, including but not limited to the
following: no assurance that futures contracts or options on futures can be offset at favorable prices; possible reduction of the yield
of the Fund due to the use of hedging; possible reduction in value of both the securities hedged and the hedging instrument; possible
lack of liquidity due to daily limits on price fluctuations; imperfect correlation between the contracts and the securities being hedged;
and losses from investing in futures transactions that are potentially unlimited.
Options
Risk. To the extent that the Fund purchases options pursuant to a hedging strategy, the Fund will be subject to the following
additional risks. If a put or call option purchased by the Fund is not sold when it has remaining value, and if the market price of the
underlying security remains equal to or greater than the exercise price (in the case of a put), or remains less than or equal to the
exercise price (in the case of a call), the Fund will lose its entire investment in the option.
Where
a put or call option on a particular security is purchased to hedge against price movements in that or a related security, the price
of the put or call option may move more or less than the price of the security. If restrictions on exercise are imposed, the Fund may
be unable to exercise an option it has purchased. If the Fund is unable to close out an option that it has purchased on a security, it
will have to exercise the option in order to realize any profit or the option may expire worthless.
Forward
Foreign Currency Exchange Contracts Risk. The Fund may enter into forward foreign currency exchange contracts to protect the
value of its portfolio against uncertainty in the level of future currency exchange rates between a particular foreign currency and the
U.S. dollar or between foreign currencies in which its securities are or may be denominated. The Fund may enter into such contracts on
a spot (i.e., cash) basis at the rate then prevailing in the currency exchange market or on a forward basis, by entering into a forward
contract to purchase or sell currency. A forward contract on foreign currency is an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days agreed upon by the parties from the date of the contract at a price set on the
date of the contract. Forward currency contracts (i) are traded in a market conducted directly between currency traders (typically, commercial
banks or other financial institutions) and their customers, (ii) generally have no deposit requirements and (iii) are typically consummated
without payment of any commissions. The Fund, however, may enter into forward currency contracts requiring deposits or involving the
payment of commissions.
The
dealings of the Fund in forward foreign exchange are limited to hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of one forward foreign currency for another currency with respect to specific receivables
or payables of the Fund accruing in connection with the purchase and sale of its portfolio securities or its payment of distributions.
Position hedging is the purchase or sale of one forward foreign currency for another currency with respect to portfolio security positions
denominated or quoted
in
the foreign currency to offset the effect of an anticipated substantial appreciation or depreciation, respectively, in the value of the
currency relative to the U.S. dollar. In this situation, the Fund also may, for example, enter into a forward contract to sell or purchase
a different foreign currency for a fixed U.S. dollar amount where it is believed that the U.S. dollar value of the currency to be sold
or bought pursuant to the forward contract will fall or rise, as the case may be, whenever there is a decline or increase, respectively,
in the U.S. dollar value of the currency in which its portfolio securities are denominated (this practice being referred to as a “cross-hedge”).
In
hedging a specific transaction, the Fund may enter into a forward contract with respect to either the currency in which the transaction
is denominated or another currency deemed appropriate by the Investment Adviser. The amount the Fund may invest in forward currency contracts
is limited to the amount of its aggregate investments in foreign currencies.
The
use of forward currency contracts may involve certain risks, including the failure of the counterparty to perform its obligations under
the contract, and such use may not serve as a complete hedge because of an imperfect correlation between movements in the prices of the
contracts and the prices of the currencies hedged or used for cover. The Fund will only enter into forward currency contracts with parties
which the Investment Adviser believes to be creditworthy institutions.
Interest
Rate Transactions Risk. The Fund may enter into interest rate swap or cap transactions with respect to all or a portion of any
series of floating rate preferred stock in order to manage the impact on its portfolio of changes in the dividend rate of such stock.
Through these transactions the Fund seeks to obtain the equivalent of a fixed rate for such floating rate preferred stock that is lower
than the Fund would have to pay if it issued fixed rate preferred stock. The use of interest rate swaps and caps is a highly specialized
activity that involves certain risks to the Fund including, among others, counterparty risk and early termination risk.
Counterparty
Risk. The Fund will be subject to credit risk with respect to the counterparties to the derivative contracts purchased by the
Fund. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties,
the Fund may experience significant delays in obtaining any recovery under the derivative contract in bankruptcy or other reorganization
proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.
The
counterparty risk for cleared derivatives is generally lower than for uncleared OTC derivative transactions since generally a clearing
organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the parties’
performance under the contract as each party to a trade looks only to the clearing organization for performance of financial obligations
under the derivative contract. However, there can be no assurance that a clearing organization, or its members, will satisfy its obligations
to the Fund, or that the Fund would be able to recover the full amount of assets deposited on its behalf with the clearing organization
in the event of the default by the clearing organization or the Fund’s clearing broker. In addition, cleared derivative transactions
benefit from daily marking-to-market and settlement, and segregation and minimum capital requirements applicable to intermediaries. Uncleared
OTC derivative transactions generally do not benefit from such protections. This exposes the Fund to the risk that a counterparty will
not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or
not bona fide) or because of a credit or liquidity problem, thus causing the Fund to suffer a loss. Such
“counterparty
risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Fund has
concentrated its transactions with a single or small group of counterparties.
Derivatives
Regulation Risk. The Dodd-Frank Act has made broad changes to the derivatives market, granted significant new authority to the
CFTC and the SEC to regulate derivatives (swaps and security-based swaps) and participants in these markets. The Dodd-Frank Act is intended
to regulate the derivatives market by requiring many derivative transactions to be cleared and traded on an exchange, expanding entity
registration requirements, imposing business conduct requirements on dealers and requiring banks to move some derivatives trading units
to a non-guaranteed affiliate separate from the deposit-taking bank or divest them altogether. The CFTC has implemented mandatory clearing
and exchange-trading of certain derivatives contracts including many standardized interest rate swaps and credit default index swaps.
The CFTC continues to approve contracts for central clearing. Exchange-trading and central clearing are expected to reduce counterparty
credit risk by substituting the clearinghouse as the counterparty to a swap and increase liquidity, but exchange-trading and central
clearing do not make swap transactions risk-free. Uncleared swaps, such as non-deliverable foreign currency forwards, are subject to
certain margin requirements that mandate the posting and collection of minimum margin amounts. This requirement may result in the Fund
and its counterparties posting higher margin amounts for uncleared swaps than would otherwise be the case. Certain rules require centralized
reporting of detailed information about many types of cleared and uncleared swaps. Reporting of swap data may result in greater market
transparency, but may subject the Fund to additional administrative burdens, and the safeguards established to protect trader anonymity
may not function as expected.
|
|
|
|
|
|
|
|
|
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 6
+ Details
Name: |
cef_AnnualExpensesTableTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10
+ Details
Name: |
cef_CapitalStockLongTermDebtAndOtherSecuritiesAbstract |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:stringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 1 -Paragraph a
+ Details
Name: |
cef_CapitalStockTableTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1
+ Details
Name: |
cef_DividendReinvestmentAndCashPurchaseFees |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:monetaryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 3 -Paragraph b
+ Details
Name: |
cef_EffectsOfLeverageTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1
+ Details
Name: |
cef_ExpenseExampleTableTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 11
+ Details
Name: |
cef_ExpenseExampleYear01 |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:monetaryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 11
+ Details
Name: |
cef_ExpenseExampleYears1to10 |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:monetaryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 11
+ Details
Name: |
cef_ExpenseExampleYears1to3 |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:monetaryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 11
+ Details
Name: |
cef_ExpenseExampleYears1to5 |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:monetaryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1
+ Details
Name: |
cef_FeeTableAbstract |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:stringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 4
+ Details
Name: |
cef_FinancialHighlightsAbstract |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:stringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8
+ Details
Name: |
cef_GeneralDescriptionOfRegistrantAbstract |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:stringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph b
+ Details
Name: |
cef_HighestPriceOrBid |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph b -Subparagraph Instruction 4
+ Details
Name: |
cef_HighestPriceOrBidNav |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph b -Subparagraph Instructions 4, 5
+ Details
Name: |
cef_HighestPriceOrBidPremiumDiscountToNavPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 8
+ Details
Name: |
cef_InterestExpensesOnBorrowingsPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 2 -Paragraph b, d
+ Details
Name: |
cef_InvestmentObjectivesAndPracticesTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph c
+ Details
Name: |
cef_LatestPremiumDiscountToNavPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph b
+ Details
Name: |
cef_LowestPriceOrBid |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph b -Subparagraph Instruction 4
+ Details
Name: |
cef_LowestPriceOrBidNav |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph b -Subparagraph Instructions 4, 5
+ Details
Name: |
cef_LowestPriceOrBidPremiumDiscountToNavPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 7 -Subparagraph a
+ Details
Name: |
cef_ManagementFeesPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 9
+ Details
Name: |
cef_NetExpenseOverAssetsPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 9
+ Details
Name: |
cef_OtherAnnualExpense3Percent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 9
+ Details
Name: |
cef_OtherAnnualExpensesAbstract |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:stringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 6
+ Details
Name: |
cef_OtherExpensesNoteTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 5
+ Details
Name: |
cef_OtherTransactionExpensesAbstract |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:stringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 5
+ Details
Name: |
cef_OtherTransactionExpensesPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 5
+ Details
Name: |
cef_OutstandingSecuritiesTableTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 5 -Paragraph 2
+ Details
Name: |
cef_OutstandingSecurityAuthorizedShares |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:sharesItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 5 -Paragraph 3
+ Details
Name: |
cef_OutstandingSecurityHeldShares |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:sharesItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 5 -Paragraph 4
+ Details
Name: |
cef_OutstandingSecurityNotHeldShares |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:sharesItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 5 -Paragraph 1
+ Details
Name: |
cef_OutstandingSecurityTitleTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 1 -Paragraph b -Subparagraph 2
+ Details
Name: |
cef_PreferredStockRestrictionsOtherTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 1
+ Details
Name: |
cef_PurposeOfFeeTableNoteTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 3 -Paragraph b -Subparagraph 3
+ Details
Name: |
cef_ReturnAtMinusFivePercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 3 -Paragraph b -Subparagraph 3
+ Details
Name: |
cef_ReturnAtMinusTenPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 3 -Paragraph b -Subparagraph 3
+ Details
Name: |
cef_ReturnAtPlusFivePercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 3 -Paragraph b -Subparagraph 3
+ Details
Name: |
cef_ReturnAtPlusTenPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 3 -Paragraph b -Subparagraph 3
+ Details
Name: |
cef_ReturnAtZeroPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 3 -Paragraph a
+ Details
Name: |
cef_RiskFactorsTableTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- References
+ Details
Name: |
cef_RiskTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1
+ Details
Name: |
cef_SalesLoadPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 10 -Subsection 1 -Paragraph a -Subparagraph 2
+ Details
Name: |
cef_SecurityVotingRightsTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 4 -Subsection 3 -Paragraph 2
+ Details
Name: |
cef_SeniorSecuritiesAmt |
Namespace Prefix: |
cef_ |
Data Type: |
xbrli:monetaryItemType |
Balance Type: |
na |
Period Type: |
instant |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 4 -Subsection 3 -Paragraph 5
+ Details
Name: |
cef_SeniorSecuritiesAverageMarketValuePerUnit |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 4 -Subsection 3 -Paragraph 3 -Subparagraph Instruction 2
+ Details
Name: |
cef_SeniorSecuritiesCvgPerUnit |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
instant |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 8 -Subsection 5 -Paragraph b -Subparagraph 4
+ Details
Name: |
cef_SharePriceTableTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1
+ Details
Name: |
cef_ShareholderTransactionExpensesTableTextBlock |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:textBlockItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 8
+ Details
Name: |
cef_TotalAnnualExpensesPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Form N-2 -Section Item 3 -Subsection 1 -Paragraph Instruction 9
+ Details
Name: |
cef_WaiversAndReimbursementsOfFeesPercent |
Namespace Prefix: |
cef_ |
Data Type: |
dtr-types:percentItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionNet asset value per share or per unit of investments in certain entities that calculate net asset value per share. Includes, but is not limited to, by unit, membership interest, or other ownership interest. Investment includes, but is not limited to, investment in certain hedge funds, venture capital funds, private equity funds, real estate partnerships or funds. Excludes fair value disclosure.
+ ReferencesReference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 35 -Paragraph 54B -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482134/820-10-35-54B
Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 35 -Paragraph 59 -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482134/820-10-35-59
Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 6A -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-6A
Reference 4: http://www.xbrl.org/2003/role/exampleRef -Topic 946 -SubTopic 830 -Name Accounting Standards Codification -Section 55 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480167/946-830-55-12
Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 210 -Name Accounting Standards Codification -Section 45 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480555/946-210-45-4
Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 205 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480737/946-205-50-7
Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 205 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480737/946-205-50-7
Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481004/946-505-50-1
Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 210 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-04(19)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479617/946-210-S99-1
Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 210 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SX 210.6-05(4)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479617/946-210-S99-2
+ Details
Name: |
us-gaap_NetAssetValuePerShare |
Namespace Prefix: |
us-gaap_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
instant |
|
X |
- DefinitionThe per share liquidation preference (or restrictions) of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) that has a preference in involuntary liquidation considerably in excess of the par or stated value of the shares. The liquidation preference is the difference between the preference in liquidation and the par or stated values of the share.
+ ReferencesReference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(d)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1
Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 210 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(28)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1
Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481112/505-10-50-3
Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481112/505-10-50-4
Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481112/505-10-50-13
+ Details
Name: |
us-gaap_PreferredStockLiquidationPreference |
Namespace Prefix: |
us-gaap_ |
Data Type: |
dtr-types:perShareItemType |
Balance Type: |
na |
Period Type: |
instant |
|
X |
- Details
Name: |
cef_RiskAxis=ggt_CommonStocksMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_CommonSharesMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SeriesCCumulativePreferredStockMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SeriesECumulativePreferredStockMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SeriesGCumulativePreferredStockMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_CumulativePreferredStocksMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_PurchaseTransactionMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SaleTransactionMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_DividendsOnPreferredSharesNotIncludedMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SeriesBCumulativePreferredStockMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_MarketRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_InterestRateRiskGenerallyMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_InflationRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_ConvertibleSecuritiesRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_EquityRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_CommonStockRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_PreferredStockRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_WarrantsAndRightsRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_NonInvestmentGradeSecuritiesRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_ShortSalesRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_IndustryConcentrationRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SmallerCompaniesInvestmentRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_MarketValueAndNetAssetValueMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_ForeignSecuritiesRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SecuritiesOfInvestmentCompaniesRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_LongTermObjectiveNotCompleteInvestmentProgramRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_ManagementRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_DependenceOnKeyPersonnelMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_MarketDisruptionAndGeopoliticalRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_EconomicEventsAndMarketRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_RegulationAndGovernmentInterventionRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_LIBORRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_LegalTaxAndRegulatoryRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_Act1940RegulationMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_LegislationRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_RelianceOnServiceProvidersRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_LoansOfPortfolioSecuritiesRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_CyberSecurityRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_MisconductOfEmployeesAndOfServiceProvidersRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_AntiTakeoverProvisionsMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SpecialRisksToHoldersOfCommonStockMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_CommonStockDistributionPolicyRiskMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SpecialRisksToHoldersOfFixedRatePreferredSharesMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SpecialRisksForHoldersOfAuctionRatePreferredStockMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_SpecialRiskForHoldersOfSubscriptionRightsMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
X |
- Details
Name: |
cef_RiskAxis=ggt_AdditionalRisksRelatingToDerivativeInvestmentsMember |
Namespace Prefix: |
|
Data Type: |
na |
Balance Type: |
|
Period Type: |
|
|
Gabelli Multimedia (NYSE:GGT-G)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gabelli Multimedia (NYSE:GGT-G)
Historical Stock Chart
From Jul 2023 to Jul 2024