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 811-22021
The Gabelli Healthcare & Wellness(Rx) Trust
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Agnes Mullady
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: June 30, 2008
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, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE [LOGO]
HEALTHCARE &
WELLNESS (RX) TRUST
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
Semi-Annual Report
June 30, 2008
TO OUR SHAREHOLDERS,
The Gabelli Healthcare & Wellness (Rx) Trust's (the "Fund") net asset
value ("NAV") total return declined 9.96% during the first half of 2008,
compared with losses of 11.90% and 13.29% for the Standard & Poor's ("S&P") 500
Index and the Dow Jones Industrial Average, respectively. The total return for
the Fund's publicly traded shares was (12.41)% during the first half of the
year. On June 30, 2008, the Fund's NAV per share was $7.23, while the price of
the publicly traded shares closed at $6.21 on the New York Stock Exchange
("NYSE").
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2008 (a)
Since
Year to Inception
Quarter Date (06/28/07)
------- ------- ----------
GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NAV TOTAL RETURN (b)............................... (4.74)% (9.96)% (9.06)%
INVESTMENT TOTAL RETURN (c)........................ (6.76) (12.41) (21.83)
S&P 500 Index......................................... (2.72) (11.90) (13.19)(d)
S&P 500 Health Care Index............................. (1.24) (12.61) (12.03)
S&P 500 Consumer Staples Index........................ (5.34) (7.43) 0.67
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
Investment returns and the principal value of an investment will
fluctuate. 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. Performance returns for
periods less than one year are not annualized. INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE
FUND BEFORE INVESTING. The S&P 500, S&P 500 Health Care, and S&P 500
Consumer Staples Indices are unmanaged indicators of stock market
performance. 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 and reinvestment of distributions at NAV on the ex-dividend date and
are net of expenses. Since inception return is based on an initial NAV of
$8.00.
(c) Total returns and average annual returns reflect changes in closing market
values on the New York Stock Exchange and reinvestment of distributions.
Since inception return is based on an initial offering price of $8.00.
(d) From June 30, 2007, the date closest to the Fund's inception for which
data is available.
We have separated the portfolio managers' commentary from the financial
statements and investment portfolios due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio managers' commentary is unrestricted. The financial
statements and investment portfolios are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolios of
investments, will be available on our website at www.gabelli.com/funds.
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of June 30, 2008:
Food......................................... 27.9%
U.S. Treasury Bills.......................... 14.9%
Health Care Equipment and Supplies........... 12.8%
Health Care Providers and Services........... 9.8%
Food and Staples Retailing................... 9.7%
Pharmaceuticals.............................. 7.0%
Biotechnology................................ 6.5%
Beverages.................................... 5.6%
Commercial Services and Supplies............. 2.5%
Insurance.................................... 1.1%
Computers and Peripheral..................... 1.0%
Chemicals.................................... 0.7%
Aerospace and Defense........................ 0.5%
-----
100.0%
=====
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-Q, the last of which was filed for the quarter
ended March 31, 2008. 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-Q 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 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
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 The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
SHAREHOLDER MEETING - MAY 19, 2008 - FINAL RESULTS
The Gabelli Healthcare & Wellness (Rx) Trust's Annual Meeting of
Shareholders was held on May 19, 2008 at the Greenwich Library in Greenwich,
Connecticut. At that meeting, shareholders elected Mario J. Gabelli, Vincent D.
Enright, and Anthonie C. van Ekris as Trustees of the Fund. A total of 7,390,444
votes, 7,425,457 votes, and 7,416,683 votes were cast in favor of each Trustee
and a total of 183,925 votes, 148,912 votes, and 157,686 votes were withheld for
each Trustee, respectively.
Thomas E. Bratter, Anthony J. Colavita, James P. Conn, Robert C. Kolodny,
and Salvatore J. Zizza continue to serve in their capacities as Trustees of the
Fund.
We thank you for your participation and appreciate your continued support.
2
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
--------- ------------ -----------
COMMON STOCKS--85.0%
AEROSPACE AND DEFENSE--0.5%
4,000 DRS Technologies Inc. ................... $ 315,035 $ 314,880
------------ -----------
BEVERAGES--5.6%
45,000 Dr. Pepper Snapple Group Inc.+ .......... 1,162,935 944,100
10,000 Hansen Natural Corp.+ ................... 428,307 288,200
65,000 ITO EN Ltd. ............................. 1,436,333 1,023,497
7,500 ITO EN Ltd., Preference ................. 172,236 79,813
10,000 PepsiCo Inc. ............................ 671,995 635,900
3,000 Sapporo Holdings Ltd. ................... 18,226 20,992
10,000 The Coca-Cola Co. ....................... 533,701 519,800
------------ -----------
4,423,733 3,512,302
------------ -----------
BIOTECHNOLOGY--6.5%
25,000 3SBio Inc., ADR+ ........................ 311,280 226,500
200 Alnylam Pharmaceuticals Inc.+ ........... 3,216 5,346
200 Arena Pharmaceuticals Inc.+ ............. 2,222 1,038
40,000 Array Biopharma Inc.+ ................... 456,689 188,000
8,000 Cephalon Inc.+ .......................... 562,578 533,520
6,500 Crucell NV, ADR+ ........................ 98,245 103,870
60,000 CytRx Corp.+ ............................ 119,472 39,000
5,000 Gilead Sciences Inc.+ ................... 197,211 264,750
20,000 Monogram Biosciences Inc.+ .............. 32,650 22,000
4,000 Myriad Genetics Inc.+ ................... 167,679 182,080
7,500 Omrix Biopharmaceuticals Inc.+ .......... 96,056 118,050
2,993 RXi Pharmaceuticals Corp.+ .............. 44,835 23,944
130,000 Tercica Inc.+ ........................... 1,144,450 1,147,900
100,000 Third Wave Technologies Inc.+ ........... 1,114,150 1,116,000
20,000 Vanda Pharmaceuticals Inc.+ ............. 314,078 65,800
------------ -----------
4,664,811 4,037,798
------------ -----------
CHEMICALS--0.7%
12,000 International Flavors & Fragrances
Inc. ................................... 571,938 468,720
------------ -----------
COMMERCIAL SERVICES AND SUPPLIES--2.5%
25,000 ChoicePoint Inc.+ ....................... 1,204,816 1,205,000
10,000 Weight Watchers International Inc. ...... 392,595 356,100
------------ -----------
1,597,411 1,561,100
------------ -----------
COMPUTERS AND PERIPHERAL--1.0%
3,000 Diebold Inc. ............................ 113,836 106,740
20,000 Electronic Data Systems Corp. ........... 489,351 492,800
------------ -----------
603,187 599,540
------------ -----------
FOOD--27.9%
12,800 Cadbury plc, ADR ........................ 693,535 644,096
40,000 Campbell Soup Co. ....................... 1,437,303 1,338,400
75,000 Dean Foods Co.+ ......................... 1,902,590 1,471,500
50,000 Del Monte Foods Co. ..................... 503,345 355,000
22,000 Flowers Foods Inc. ...................... 463,990 623,480
20,000 General Mills Inc. ...................... 1,136,982 1,215,400
20,000 Groupe Danone ........................... 1,542,303 1,404,415
2,000 Groupe Danone, ADR ...................... 32,442 28,108
12,000 H.J. Heinz Co. .......................... 533,871 574,200
30,000 Hain Celestial Group Inc.+ .............. 869,430 704,400
15,000 Kellogg Co. ............................. 766,007 720,300
16,000 Kerry Group plc, Cl. A .................. 419,845 475,605
47,000 Kikkoman Corp. .......................... 612,500 574,083
52,600 Lifeway Foods Inc.+ ..................... 572,634 625,414
100,000 Meiji Seika Kaisha Ltd. ................. 491,785 426,614
15,000 Morinaga Milk Industry Co. Ltd. ......... 48,287 38,988
39,000 Nestle SA ............................... 1,571,277 1,762,263
200 Nestle SA, ADR .......................... 19,094 22,658
6,000 Parmalat SpA ............................ 22,155 15,682
5,000 Rock Field Co. Ltd. ..................... 71,047 65,876
55,000 Smart Balance Inc.+ ..................... 455,662 396,550
15,000 The J.M. Smucker Co. .................... 757,913 609,600
7,300 Wimm-Bill-Dann Foods OJSC, ADR .......... 719,377 768,106
17,000 Wm. Wrigley Jr. Co. ..................... 1,311,730 1,322,260
40,000 YAKULT HONSHA Co. Ltd. .................. 963,651 1,126,336
------------ -----------
17,918,755 17,309,334
------------ -----------
FOOD AND STAPLES RETAILING--9.7%
6,000 Costco Wholesale Corp. .................. 347,483 420,840
33,000 CVS Caremark Corp. ...................... 1,201,195 1,305,810
12,000 SUPERVALU Inc. .......................... 399,638 370,680
35,777 The Great Atlantic & Pacific Tea Co.
Inc.+ .................................. 1,064,994 816,431
500 Village Super Market Inc., Cl. A ........ 23,378 19,290
10,000 Wal-Mart Stores Inc. .................... 458,576 562,000
24,000 Walgreen Co. ............................ 923,755 780,240
74,000 Whole Foods Market Inc. ................. 2,762,227 1,753,060
------------ -----------
7,181,246 6,028,351
------------ -----------
HEALTH CARE EQUIPMENT AND SUPPLIES--12.7%
13,000 Advanced Medical Optics Inc.+ ........... 357,774 243,620
7,500 Align Technology Inc.+ .................. 88,408 78,675
175,000 AMDL Inc.+ (a)(b)(c) .................... 391,522 507,500
40,000 AngioDynamics Inc.+ ..................... 729,281 544,800
16,000 Boston Scientific Corp.+ ................ 219,820 196,640
10,000 Covidien Ltd. ........................... 414,948 478,900
See accompanying notes to financial statements.
3
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
--------- ------------ ------------
COMMON STOCKS (CONTINUED)
HEALTH CARE EQUIPMENT AND SUPPLIES
(CONTINUED)
31,000 Cutera Inc.+ ............................ $ 498,381 $ 279,930
21,200 ev3 Inc.+ ............................... 347,405 200,976
27,000 Greatbatch Inc.+ ........................ 677,232 467,100
12,000 Inverness Medical Innovations Inc.+ ..... 368,342 398,040
14,000 Kinetic Concepts Inc.+ .................. 796,765 558,740
15,000 Medical Action Industries Inc.+ ......... 270,907 155,550
9,000 Medtronic Inc. .......................... 470,816 465,750
4,200 Mentor Corp. ............................ 142,779 116,844
30,400 Micrus Endovascular Corp.+ .............. 667,234 426,208
9,000 Orthofix International NV+ .............. 326,370 260,550
20,000 St. Jude Medical Inc.+ .................. 833,593 817,600
30,000 Thoratec Corp.+ ......................... 560,717 521,700
85,000 Vascular Solutions Inc.+ ................ 782,390 552,500
9,000 Zimmer Holdings Inc.+ ................... 735,874 612,450
------------ ------------
9,680,558 7,884,073
------------ ------------
HEALTH CARE PROVIDERS AND SERVICES--9.8%
14,000 Aetna Inc. .............................. 703,453 567,420
5,000 Amedisys Inc.+ .......................... 187,700 252,100
20,000 American Dental Partners Inc.+ .......... 183,516 237,400
7,000 AmerisourceBergen Corp. ................. 314,391 279,930
5,000 Apria Healthcare Group Inc.+ ............ 99,858 96,950
8,000 Cardinal Health Inc. .................... 469,607 412,640
3,000 Chemed Corp. ............................ 126,720 109,830
126,000 Continucare Corp.+ ...................... 266,642 296,100
14,000 Healthways Inc.+ ........................ 442,693 414,400
45,000 HLTH Corp.+ ............................. 615,954 509,400
12,000 IMS Health Inc. ......................... 324,226 279,600
165,000 MEDecision Inc.+ ........................ 1,088,547 1,097,250
20,000 Omnicare Inc. ........................... 670,713 524,400
1,000 Owens & Minor Inc. ...................... 35,498 45,690
15,000 PSS World Medical Inc.+ ................. 253,010 244,500
28,200 UnitedHealth Group Inc. ................. 1,305,511 740,250
------------ ------------
7,088,039 6,107,860
------------ ------------
INSURANCE--1.1%
10,000 SAFECO Corp. ............................ 668,323 671,600
------------ ------------
PHARMACEUTICALS--7.0%
11,000 Abbott Laboratories ..................... 582,962 582,670
10,000 Alpharma Inc., Cl. A+ ................... 254,787 225,300
14,000 Barr Pharmaceuticals Inc.+ .............. 709,138 631,120
20,000 Inspire Pharmaceuticals Inc.+ ........... 106,845 85,600
21,000 Johnson & Johnson ....................... 1,339,981 1,351,140
25,000 K-V Pharmaceutical Co., Cl. A+ .......... 641,477 483,250
18,000 Matrixx Initiatives Inc.+ ............... 336,264 299,880
13,000 Merck & Co. Inc. ........................ 649,566 489,970
22,000 Pain Therapeutics Inc.+ ................. 172,161 173,800
------------ ------------
4,793,181 4,322,730
------------ ------------
TOTAL COMMON STOCKS ..................... 59,506,217 52,818,288
------------ ------------
WARRANTS--0.1%
HEALTH CARE EQUIPMENT AND SUPPLIES--0.1%
80,907 AMDL Inc.,
expire 03/05/11+ (a)(b)(c) ............ 148,405 57,044
------------ ------------
PRINCIPAL
AMOUNT
-----------
U.S. GOVERNMENT OBLIGATIONS--14.9%
$ 9,276,000 U.S. Treasury Bills,
1.213% to 2.033%++,
07/03/08 to 10/09/08 ................... 9,240,536 9,241,778
------------ ------------
TOTAL INVESTMENTS -- 100.0% ........................... $ 68,895,158 62,117,110
============
OTHER ASSETS AND LIABILITIES (NET) .................... (835,175)
------------
NET ASSETS -- COMMON SHARES
(8,474,459 common shares outstanding) ................ $ 61,281,935
============
NET ASSET VALUE PER COMMON SHARE
($61,281,935 / 8,474,459 shares outstanding) ........ $ 7.23
============
----------
(a) Security fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the company and reviewing the valuation of comparable
securities and other factors on a regular basis. At June 30, 2008, the
market value of fair valued securities amounted to $564,544 or 0.91% of
total investments.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
June 30, 2008, the market value of Rule 144A securities amounted to
$564,544 or 0.91% of total investments.
(c) Illiquid security.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depositary Receipt
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
---------------------------------- ------- ------------
North America .................... 84.6% $ 52,570,158
Europe ........................... 8.4 5,224,803
Japan ............................ 5.4 3,356,199
Latin America .................... 1.6 965,950
------ ------------
Total Investments ................ 100.0% $ 62,117,110
====== ============
See accompanying notes to financial statements.
4
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2008 (UNAUDITED)
ASSETS:
Investments, at value (cost $68,895,158) ............ $ 62,117,110
Foreign currency, at value (cost $896) .............. 914
Receivable for investments sold ..................... 119,306
Dividends and interest receivable ................... 43,895
Prepaid expense ..................................... 1,368
------------
TOTAL ASSETS ........................................ 62,282,593
------------
LIABILITIES:
Payable to custodian ................................ 154,320
Payable for investments purchased ................... 715,451
Payable for investment advisory fees ................ 52,174
Payable for payroll expenses ........................ 23,744
Payable for accounting fees ......................... 3,750
Other accrued expenses .............................. 51,219
------------
TOTAL LIABILITIES ................................... 1,000,658
------------
NET ASSETS applicable to 8,474,459 shares
outstanding ....................................... $ 61,281,935
============
NET ASSETS CONSIST OF:
Paid-in capital, at $0.001 par value ................ $ 67,795,672
Accumulated net investment loss ..................... (92,112)
Accumulated net realized gain on investments and
foreign currency transactions ..................... 357,074
Net unrealized depreciation on investments .......... (6,778,048)
Net unrealized depreciation on foreign
currency translations ............................. (651)
------------
NET ASSETS .......................................... $ 61,281,935
============
NET ASSET VALUE PER COMMON SHARE:
($61,281,935 / 8,474,459 shares outstanding:
unlimited number of shares authorized) ............ $ 7.23
============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $6,046) ........ $ 348,959
Interest .......................................... 144,201
------------
TOTAL INVESTMENT INCOME ........................... 493,160
------------
EXPENSES:
Investment advisory fees .......................... 321,385
Shareholder communications expenses ............... 197,932
Payroll expenses .................................. 35,897
Trustees' fees .................................... 29,030
Shareholder services fees ......................... 28,197
Legal and audit fees .............................. 25,442
Accounting fees ................................... 22,500
Custodian fees .................................... 3,325
Miscellaneous expenses ............................ 19,969
------------
TOTAL EXPENSES .................................... 683,677
Less: Custodian fee credits ....................... (1,939)
------------
NET EXPENSES ...................................... 681,738
------------
NET INVESTMENT LOSS ............................... (188,578)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments .................. 39,260
Net realized loss on foreign currency
transactions .................................... (532)
------------
Net realized gain on investments and foreign
currency transactions ........................... 38,728
------------
Net change in unrealized appreciation/depreciation:
on investments .................................. (6,636,655)
on foreign currency translations ................ (819)
------------
Net change in unrealized appreciation/depreciation
on investments and foreign currency
translations .................................... (6,637,474)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY ................ (6,598,746)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................. $ (6,787,324)
============
See accompanying notes to financial statements.
5
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 2008 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 2007 (a)
---------------- ---------------------
OPERATIONS:
Net investment income (loss) ........................................... $ (188,578) $ 193,924
Net realized gain on investments and foreign currency transactions ..... 38,728 644,611
Net change in unrealized appreciation/depreciation on investments and
foreign currency translations ........................................ (6,637,474) (141,225)
------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........ (6,787,324) 697,310
------------- ------------
DISTRIBUTIONS TO COMMON SHARES:
Net investment income .................................................. -- (97,456)
Net realized short-term gain on investments and foreign currency
transactions ......................................................... -- (326,267)
------------- ------------
TOTAL DISTRIBUTIONS TO COMMON SHARES ................................... -- (423,723)
------------- ------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares issued in offering ....... -- 67,695,672
------------- ------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS ................ -- 67,695,672
------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS .................................. (6,787,324) 67,969,259
NET ASSETS:
Beginning of period .................................................... 68,069,259 100,000
------------- ------------
End of period (including undistributed net investment income of $0 and
$96,466, respectively) ................................................. $ 61,281,935 $ 68,069,259
============= ============
----------
(a) The Gabelli Healthcare & Wellness (Rx) Trust commenced investment
operations on June 28, 2007.
See accompanying notes to financial statements.
6
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED
SELECTED DATA FOR A COMMON SHARE OF BENEFICIAL INTEREST OUTSTANDING JUNE 30, 2008 PERIOD ENDED
THROUGHOUT EACH PERIOD: (UNAUDITED) DECEMBER 31, 2007 (b)
---------------- ---------------------
OPERATING PERFORMANCE:
Net asset value, beginning of period ........................................ $ 8.03 $ 8.00
----------- ---------
Net investment income (loss) ................................................ (0.01) 0.02
Net realized and unrealized gain (loss) on investments and foreign currency
transactions .............................................................. (0.79) 0.06
----------- ---------
Total from investment operations ............................................ (0.80) 0.08
----------- ---------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ....................................................... -- (0.01)
Net realized short-term gain on investments and foreign currency
transactions .............................................................. -- (0.04)
----------- ---------
Total distributions to common shareholders .................................. -- (0.05)
----------- ---------
NET ASSET VALUE, END OF PERIOD .............................................. $ 7.23 $ 8.03
=========== =========
Net asset value total return + .............................................. (9.96)% 1.00%
=========== =========
Market value, end of period ................................................. $ 6.21 $ 7.09
=========== =========
Total investment return++ ................................................... (12.41)% (10.75)%
=========== =========
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets end of period (in 000's) ......................................... $ 61,282 $ 68,069
Ratio of net investment income (loss) to average net assets ................. (1.59)%(a) 0.56%(a)
Ratio of operating expenses to average net assets ........................... 2.12%(a) 1.97%(a)
Portfolio turnover rate ..................................................... 64.0% 26.7%+++
----------
+ Based on net asset value per share at commencement of operations of $8.00
per share, adjusted for reinvestment of distributions at the net asset
value per share on the ex-dividend dates. Total returns for periods of
less than one year are not annualized.
++ Based on market value per share at initial public offering of $8.00 per
share, adjusted for reinvestment of distributions at prices obtained under
the Fund's dividend reinvestment plan. Total returns for periods of less
than one year are not annualized.
+++ Effective in 2008, a change in accounting policy was adopted with regard
to the calculation of the portfolio turnover rate. Had this policy been
adopted retroactively, the portfolio turnover rate for the period ended
December 31, 2007 would have been 60.6%.
(a) Annualized.
(b) The Gabelli Healthcare & Wellness (Rx) Trust commenced investment
operations on June 28, 2007.
See accompanying notes to financial statements.
7
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Healthcare & Wellness (Rx) Trust (the "Fund") is a
non-diversified closed-end management investment company organized as a Delaware
statutory trust on February 20, 2007 and registered under the Investment Company
Act of 1940 as amended (the "1940 Act"), whose objective is long-term growth of
capital. Investment operations commenced on June 28, 2007. The Fund had no
operations prior to June 28, 2007, other than the sale of 12,500 common shares
for $100,000 to The Gabelli Equity Trust Inc. (the "Equity Trust"). On June 28,
2007, the Equity Trust contributed $67,695,672 in cash in exchange for shares of
the Fund, and on the same date distributed such shares to the Equity Trust
holders of record as of June 21, 2007 at the rate of one share of the Fund for
every twenty shares of the Equity Trust common stock.
Under normal market conditions, the Fund will invest at least 80% of its
assets in equity securities and income producing securities of domestic and
foreign companies in the healthcare and wellness industries.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the 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 Trustees (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 instruments with remaining maturities of 60 days or less that are not
credit impaired are valued at amortized cost, 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. 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.
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 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.
8
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
On January 1, 2008, the Fund adopted Statement of Financial Accounting
Standard No. 157, "Fair Value Measurements" ("SFAS 157") that clarifies the
definition of fair value for financial reporting, establishes a framework for
measuring fair value, and requires additional disclosures about the use of fair
value measurements. The three levels of the fair value hierarchy under SFAS 157
are described 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 Fund's
determinations as to the fair value of investments).
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 inputs used to value the Fund's net assets as of June 30, 2008 is as
follows:
INVESTMENTS IN
SECURITIES
VALUATION INPUTS (MARKET VALUE)
------------------------------------------------------------ --------------
Level 1 - Quoted Prices .................................... $ 52,310,788
Level 2 - Other Significant Observable Inputs .............. 9,806,322
--------------
TOTAL ...................................................... $ 62,117,110
==============
In March 2008, The Financial Accounting Standards Board (The "FASB")
issued Statement of Financial Accounting Standard No. 161, "Disclosures about
Derivative Instruments and Hedging Activities" ("SFAS 161") that is effective
for fiscal years beginning after November 15, 2008. SFAS 161 is intended to
improve financial reporting for derivative instruments by requiring enhanced
disclosure that enables investors to understand how and why an entity uses
derivatives, how derivatives are accounted for, and how derivative instruments
affect an entity's results of operations and financial position. Management is
currently evaluating the implications of SFAS 161 on the Fund's financial
statement disclosures.
Repurchase Agreements. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At June 30,
2008, there were no open repurchase agreements.
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. As a shareholder in the Fund, you would bear the
pro rata portion of the periodic expenses of the Acquired Funds in addition to
the Fund's expenses. For the six months ended June 30, 2008, the Fund did not
hold any investments in Acquired Funds.
9
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Options. The Fund may purchase or write call or put options on securities
or indices. As a writer of put options, the Fund receives a premium at the
outset and then bears the risk of unfavorable changes in the price of the
financial instrument underlying the option. The Fund would incur a loss if the
price of the underlying financial instrument decreases between the date the
option is written and the date on which the option is terminated. The Fund would
realize a gain, to the extent of the premium, if the price of the financial
instrument increases between those dates. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying security in
determining whether there has been a realized gain or loss. If a put option is
exercised, the premium reduces the cost basis of the security.
As a purchaser of put options, the Fund pays a premium for the right to
sell to the seller of the put option the underlying security at a specified
price. The seller of the put has the obligation to purchase the underlying
security upon exercise at the exercise price. If the price of the underlying
security declines, the Fund would realize a gain upon sale or exercise. If the
price of the underlying security increases or stays the same, the Fund would
realize a loss upon sale or at the expiration date, but only to the extent of
the premium paid.
In the case of call options, these exercise prices are referred to as
"in-the-money", "at-the-money", and "out-of-the-money", respectively. The Fund
may write (a) in-the-money call options when the Adviser expects that the price
of the underlying security will remain stable or decline during the option
period, (b) at-the-money call options when the Adviser expects that the price of
the underlying security will remain stable, decline or advance moderately during
the option period, and (c) out-of-the-money call options when the Adviser
expects that the premiums received from writing the call option will be greater
than the appreciation in the price of the underlying security above the exercise
price. By writing a call option, the Fund limits its opportunity to profit from
any increase in the market value of the underlying security above the exercise
price of the option. Out-of-the-money, at-the-money, and in-the-money put
options (the reverse of call options as to the relation of exercise price to
market price) may be utilized in the same market environments that such call
options are used in equivalent transactions. At June 30, 2008, the Fund had no
investments in options.
Futures Contracts. The Fund may engage in futures contracts for the
purpose of hedging against changes in the value of its portfolio securities and
in the value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At June 30, 2008 there were no open
futures contracts.
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency translations. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
10
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio securities, but it
does establish a rate of exchange that can be achieved in the future. Although
forward foreign exchange contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts. At June 30, 2008, there were no open forward foreign
exchange contracts in the Fund.
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 the 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 received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial 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 ability 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
those of 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 and Illiquid Securities. The Fund may invest without limit in
illiquid securities. Illiquid securities include securities the disposition of
which is subject to substantial legal or contractual restrictions. The sale of
illiquid securities often requires more time and results in higher brokerage
charges or dealer discounts and other selling expenses than does 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.
Concentration Risks. The Fund will invest a significant portion of its
assets in companies in the healthcare and wellness industries. As a result, the
Fund may be more susceptible to economic, political, and regulatory developments
in this particular sector of the market, positive or negative, and may
experience increased volatility to the Fund's NAV and a magnified effect in its
total return.
Securities Transactions and Investment Income. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt
11
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
securities are amortized using the effective yield to maturity method. Dividend
income is recorded on the ex-dividend date except for certain dividends which
are recorded as soon as the Fund is informed of the dividend.
Custodian Fee Credits and Interest Expense. When cash balances are
maintained in the custody account, the Fund receives credits which are used to
offset custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 110% of the 90 day
Treasury Bill rate on outstanding balances. This amount, if any, would be shown
as "interest expense" in the Statement of Operations.
Distributions to Shareholders. Distributions to common shareholders are
recorded on the ex-dividend date. Distributions to shareholders are 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
U.S. generally accepted accounting principles. 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 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. These
reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the period ended December
31, 2007 was as follows:
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ..... $ 423,723
----------
Total distributions paid ....................... $ 423,723
==========
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.
As of December 31, 2007, the components of accumulated earnings/(losses)
on a tax basis were as follows:
Undistributed ordinary income
(inclusive of short-term capital gains) .......... $ 423,078
Net unrealized depreciation on investments and
foreign currency ................................. (149,491)
----------
Total ............................................... $ 273,587
==========
The following summarizes the tax cost of investments and the related
unrealized appreciation/(depreciation) at June 30, 2008:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
COST APPRECIATION DEPRECIATION DEPRECIATION
------------ ------------ -------------- ------------
Investments ........ $ 68,996,600 $ 1,602,884 $ (8,482,374) $ (6,879,490)
12
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes,
an Interpretation of FASB Statement No. 109" (the "Interpretation") established
a minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures.
For the six months ended June 30, 2008, the Fund did not have any
liability for any unrecognized tax benefits. The Fund recognizes interest and
penalties, if any, related to unrecognized tax benefits as income tax expenses
in the Statement of Operations. The Fund has adopted the Interpretation for all
open tax years and it had no impact on the amounts reported in the financial
statements.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. 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. 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.
During the six months ended June 30, 2008, the Fund paid brokerage
commissions on security trades of $22,960 to Gabelli & Company, Inc. ("Gabelli &
Company"), an affiliate of the Adviser.
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. During the
six months ended June 30, 2008, the Fund paid or accrued $22,500 to the Adviser
in connection with the cost of computing the Fund's NAV.
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
the officers may receive incentive based variable compensation from affiliates
of the Adviser) and pays its affiliated portion of the cost of the Fund's Chief
Compliance Officer. For the six months ended June 30, 2008, the Fund accrued
$35,897, which is included in payroll expenses in the Statement of Operations.
The Fund pays each Trustee who is not considered to be an affiliated
person an annual retainer of $3,000 plus $1,000 for each Board meeting attended
in person and $500 per telephonic meeting, and they are reimbursed for any out
of pocket expenses incurred in attending meetings. In addition, the Audit
Committee Chairman receives an annual fee of $3,000, the Nominating Committee
Chairman receives an annual fee of $2,000, and the Lead Trustee receives an
annual fee of $1,000. Trustees who are directors or employees of the Adviser or
an affiliated company receive no compensation or expense reimbursement from the
Fund.
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2008, other than short-term securities and U.S.
Government obligations, aggregated $41,527,493 and $33,361,545, respectively.
5. CAPITAL. The Fund is authorized to issue an unlimited number of shares of
beneficial interest (par value $0.001). The Board has authorized the repurchase
of its shares on the open market when the shares are trading on the NYSE at a
discount of 10% or more (or such other percentage as the Board may determine
from time to time) from the NAV of the shares. During the six months ended June
30, 2008, the Fund did not have any transactions in shares of beneficial
interest.
13
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Transactions in common shares were as follows:
PERIOD ENDED
DECEMBER 31, 2007 (a)
---------------------------
SHARES AMOUNT
---------- ------------
Initial seed capital ..................................... 12,500 $ 100,000
Additional shares issued immediately
prior to the spin-off from the Equity Trust ........... 8,461,959 67,695,672
---------- ------------
Net increase ............................................. 8,474,459 $ 67,795,672
========== ============
----------
(a) The Gabelli Healthcare & Wellness (Rx) Trust commenced investment
operations on June 28, 2007.
6. 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 and expects the risk of loss to be remote.
7. OTHER MATTERS. On April 24, 2008, the Adviser entered into an administrative
settlement with the SEC to resolve the SEC's inquiry regarding prior frequent
trading activity in shares of the GAMCO Global Growth Fund (the "Global Growth
Fund") by one investor who was banned from the Global Growth Fund in August
2002. In the settlement, the SEC found that the Adviser had violated Section
206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule
17d-1 thereunder, and had aided and abetted and caused violations of Section
12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser,
while neither admitting nor denying the SEC's findings and allegations, agreed,
among other things, to pay the previously reserved total of $16 million
(including a $5 million penalty), of which at least $11 million will be
distributed to shareholders of the Global Growth Fund in accordance with a plan
to be developed by an independent distribution consultant and approved by the
independent directors of the Global Growth Fund and the staff of the SEC, and to
cease and desist from future violations of the above referenced federal
securities laws. The settlement will not have a material adverse impact on the
Adviser or its ability to fulfill its obligations under the Advisory Agreement.
On the same day, the SEC filed a civil action against the Executive Vice
President and Chief Operating Officer of the Adviser, alleging violations of
certain federal securities laws arising from the same matter. The officer is
also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO
fund complex. The officer denies the allegations and is continuing in his
positions with the Adviser and the funds. The Adviser currently expects that any
resolution of the action against the officer will not have a material adverse
impact on the Adviser or its ability to fulfill its obligations under the
Advisory Agreement.
On a separate matter, in August 2008, the Adviser made an offer to the
staff of the SEC to settle a previously disclosed matter concerning compliance
with Section 19(a) and Rule 19a-1 of the 1940 Act by two closed-end funds
managed by the Adviser. These provisions require registered investment companies
to provide written statements to shareholders when a distribution is made in the
nature of a dividend from a source other than net investment income. While the
two funds sent annual statements and provided other materials containing this
information, the funds did not send the notices required by Rule 19a-1 to
shareholders with each distribution in 2002 and 2003. The Adviser believes that
the funds have been in compliance with Rule 19a-1 since that time. The Adviser
believes that the settlement would have no effect on the funds or any material
adverse effect on the Adviser or its ability to manage the funds. This offer of
settlement is subject to final agreement regarding the specific language of the
SEC's administrative order and other settlement documents and approval by the
SEC.
14
TRUSTEES AND OFFICERS
THE GABELLI HEALTHCARE & WELLNESS (RX) TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES
Mario J. Gabelli, CFA
Chairman & Chief Executive Officer,
GAMCO Investors, Inc.
Dr. Thomas E. Bratter
President & Founder, John Dewey Academy
Anthony J. Colavita
Attorney-at-Law,
Anthony J. Colavita, P.C.
James P. Conn
Former Managing Director &
Chief Investment Officer,
Financial Security Assurance Holdings Ltd.
Vincent D. Enright
Former Senior Vice President &
Chief Financial Officer,
KeySpan Corp.
Robert C. Kolodny, MD
Physician, Author, and Lecturer,
General Partner of KBS Partnership
Anthonie C. van Ekris
Chairman, BALMAC International, Inc.
Salvatore J. Zizza
Chairman, Zizza & Co., Ltd.
OFFICERS
Bruce N. Alpert
Secretary
Carter W. Austin
Vice President
Peter D. Goldstein
Chief Compliance Officer
Agnes Mullady
President and Treasurer
David I. Schachter
Vice President
Adam E. Tokar
Assistant Vice President & Ombudsman
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
The Bank of New York Mellon
COUNSEL
Willkie Farr & Gallagher LLP
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.
STOCK EXCHANGE LISTING
Common
----------
NYSE - Symbol: GRX
Shares Outstanding: 8,474,459
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.
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet
homepage at: WWW.GABELLI.COM, or e-mail us at: closedend@gabelli.com
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 10% or more from the net asset value of the
shares.
THE GABELLI HEALTHCARE &
WELLNESS (RX) TRUST
ONE CORPORATE CENTER
RYE, NY 10580-1422
(914) 921-5070
WWW.GABELLI.COM
SEMI ANNUAL REPORT
JUNE 30, 2008
GRX Q2/2008
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(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 of this form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
There has been no change, as of the date of this filing, in any of the portfolio
managers identified in response to paragraph (a)(1) of this Item in the
registrant's most recently filed annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
=============================================================================================================================
=============================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A Common - 8,474,459
01/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
01/31/08
=============================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A Common - 8,474,459
02/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
02/28/08
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 8,474,459
03/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
03/31/08
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 8,474,459
04/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
04/30/08
=============================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 8,474,459
05/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
05/31/08
=============================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 8,474,459
06/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
06/30/08
=============================================================================================================================
Total Common - N/A Common - N/A Common - N/A N/A
Preferred - N/A Preferred - N/A Preferred - 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 quarterly in the Fund's
quarterly report 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 10% 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 Trustees, 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 the registrant's second
fiscal quarter of 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.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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 Healthcare & Wellness(Rx) Trust
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By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Executive Officer and Principal
Financial Officer
Date 9/3/08
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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/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Executive Officer and Principal
Financial Officer
Date 9/3/08
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* Print the name and title of each signing officer under his or her signature.