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 811-21698
The Gabelli Global Gold, Natural Resources & Income Trust
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
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, 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. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
(THE GABELLI LOGO)
GLOBAL GOLD,
NATURAL RESOURCES
& INCOME TRUST
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
Annual Report
December 31, 2008
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio managers'commentary and
subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2008.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2008 (a)
Since
Inception
Quarter 1 Year 3 Year (03/31/05)
------- ------ ------ ----------
GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NAV TOTAL RETURN (b) ............................. (42.06)% (61.59)% (15.78)% (8.08)%
INVESTMENT TOTAL RETURN (c) ...................... (32.25) (50.94) (8.68) (3.42)
CBOE S&P 500 Buy/Write Index ........................ (21.06) (28.65) (4.84) (2.93)
Philadelphia Gold & Silver Index .................... (5.17) (27.73) (0.02) 8.89
Amex Energy Select Sector Index ..................... (24.77) (38.73) (0.22) 4.43
Barclays Government/Corporate Bond Index ............ 6.42 5.70 5.56 5.27
(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 of less than one year are
not annualized. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. The
CBOE S&P 500 Buy/Write Index is an unmanaged benchmark index designed to
reflect the return on a portfolio that consists of a long position in the
stocks in the S&P 500 Index and a short position in a S&P 500 (SPX) call
option. The Philadelphia Gold & Silver Index is an unmanaged indicator of
stock market performance of large North American gold and silver companies,
while the Amex Energy Select Sector Index is an unmanaged indicator of
stock market performance of large U.S. companies involved in the
development or production of energy products. The Barclays
Government/Corporate Bond Index is an unmanaged market value weighted index
that tracks the total return performance of fixed rate, publicly placed,
dollar denominated obligations. Dividends and interest income are
considered reinvested. You cannot invest directly in an index.
(b) Total returns and average annual returns reflect changes in the net asset
value ("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 $19.06.
(c) Total returns and average annual returns reflect changes in closing market
values on the American Stock Exchange and reinvestment of distributions.
Since inception return is based on an initial offering price of $20.00.
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 26, 2009
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of December 31, 2008:
LONG POSITIONS
Metals and Mining ............... 56.0%
Energy and Energy Services ...... 29.1%
U.S. Government Obligations ..... 14.8%
Put Options Purchased ........... 0.1%
-----
100.0%
=====
SHORT POSITIONS
Call Options Written ............. (9.6)%
Put Options Written .............. (0.0)%
-----
(9.6)%
=====
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST (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 SEPTEMBER 30, 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.
2
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2008
MARKET
SHARES COST VALUE
------------ -------------- --------------
COMMON STOCKS -- 70.0%
ENERGY AND ENERGY SERVICES -- 24.6%
45,300 Allis-Chalmers Energy Inc.+ (a) ....................... $ 555,228 $ 249,150
48,900 Baker Hughes Inc. (a) ................................. 3,973,815 1,568,223
149,000 BJ Services Co. (a) ................................... 4,079,496 1,738,830
70,900 BP plc, ADR (a) ....................................... 4,596,318 3,313,866
75,000 Chesapeake Energy Corp. (a) ........................... 3,550,137 1,212,750
45,600 Chevron Corp. (a) ..................................... 2,865,633 3,373,032
307,692 Comanche Energy Inc.+ (b)(c)(d) ....................... 1,849,998 828,810
47,900 ConocoPhillips (a) .................................... 2,982,226 2,481,220
104,700 Devon Energy Corp. (a) ................................ 6,204,941 6,879,837
41,100 Diamond Offshore Drilling Inc. (a) .................... 2,686,508 2,422,434
49,000 Exxon Mobil Corp. (a) ................................. 2,873,728 3,911,670
65,000 Galp Energia SGPS SA, Cl. B ........................... 1,545,027 648,735
124,400 Halliburton Co. (a) ................................... 4,026,952 2,261,592
136,800 Imperial Oil Ltd. ..................................... 5,846,969 4,542,270
56,394 Lamprell plc .......................................... 394,256 95,270
39,800 Marathon Oil Corp. (a) ................................ 1,018,581 1,088,928
98,000 Murphy Oil Corp. (a) .................................. 4,860,131 4,346,300
90,000 Nabors Industries Ltd.+ (a) ........................... 3,007,174 1,077,300
163,000 Noble Corp. (a) ....................................... 6,399,415 3,600,670
243,700 Petroleo Brasileiro SA, ADR (a) ....................... 5,991,983 5,968,213
105,000 Rowan Companies Inc. (a) .............................. 3,204,558 1,669,500
66,000 Royal Dutch Shell plc, Cl. A .......................... 2,789,309 1,712,795
132,000 Saipem SpA ............................................ 2,900,945 2,168,807
80,000 Sasol Ltd., ADR (a) ................................... 3,784,803 2,426,400
20,000 Schlumberger Ltd. ..................................... 996,200 846,600
107,900 StatoilHydro ASA, ADR (a) ............................. 3,847,681 1,797,614
225,000 Suncor Energy Inc. (a) ................................ 8,964,932 4,387,500
40,000 Technip SA ............................................ 3,183,964 1,212,677
84,500 Tesoro Corp. (a) ...................................... 2,497,431 1,112,865
10,100 Total SA, ADR (a) ..................................... 677,295 558,530
62,400 Transocean Ltd.+ (a) .................................. 5,530,060 2,948,400
76,100 Valero Energy Corp. (a) ............................... 4,152,535 1,646,804
220,700 Weatherford International Ltd.+ (a) ................... 5,189,056 2,387,974
123,800 Williams Companies Inc. (a) ........................... 3,075,766 1,792,624
148,625 XTO Energy Inc. (a) ................................... 5,367,283 5,242,004
-------------- --------------
125,470,334 83,520,194
-------------- --------------
METALS AND MINING -- 45.4%
240,300 Agnico-Eagle Mines Ltd. (a) ........................... 7,702,166 12,334,599
154,000 Anglo American plc .................................... 8,079,860 3,423,060
46,250 Anglo Platinum Ltd. ................................... 7,593,637 2,589,400
192,300 AngloGold Ashanti Ltd., ADR (a) ....................... 6,550,881 5,328,633
257,300 Barrick Gold Corp. (a) ................................ 9,410,321 9,460,921
88,000 BHP Billiton Ltd., ADR (a) ............................ 3,584,888 3,775,200
159,900 Companhia Vale do Rio Doce, ADR (a) ................... 2,618,769 1,936,389
4,500 Compania de Minas Buenaventura SA, ADR ................ 94,595 89,640
20,000 Eldorado Gold Corp.+ .................................. 119,368 156,338
175,000 Equinox Minerals Ltd.+ ................................ 903,610 192,791
94,000 Franco-Nevada Corp. ................................... 2,033,771 1,620,348
125,000 Franco-Nevada Corp. (e) ............................... 2,521,918 2,154,719
90,792 Freeport-McMoRan Copper & Gold Inc. (a) ............... 9,361,866 2,218,956
538,500 Fresnillo plc ......................................... 5,832,997 1,780,729
200,000 Gold Fields Ltd. ...................................... 3,819,747 1,988,102
1,193,500 Gold Fields Ltd., ADR (a) ............................. 17,993,781 11,851,455
MARKET
SHARES COST VALUE
------------ -------------- --------------
274,200 Goldcorp Inc. (a) ..................................... $ 3,682,960 $ 8,645,526
617,300 Harmony Gold Mining Co. Ltd., ADR+ (a) ................ 6,473,276 6,771,781
637,000 Hochschild Mining plc ................................. 4,844,320 1,009,723
212,500 IAMGOLD Corp. ......................................... 1,842,030 1,308,222
412,000 Impala Platinum Holdings Ltd. ......................... 9,868,055 6,016,225
221,140 Ivanhoe Mines Ltd.+ (a) ............................... 1,547,650 597,078
50,000 Ivanhoe Mines Ltd.+ (c) ............................... 337,897 135,000
88,000 Kazakhmys plc ......................................... 2,728,177 292,266
885,700 Kinross Gold Corp. (a) ................................ 6,567,670 16,314,594
4,683,488 Lihir Gold Ltd.+ ...................................... 8,747,144 9,828,623
250,600 Lundin Mining Corp.+ (a) .............................. 2,134,634 240,576
444,307 Newcrest Mining Ltd. .................................. 6,364,317 10,498,119
253,600 Newmont Mining Corp. (a) .............................. 9,954,708 10,321,520
1,300 Pan American Silver Corp.+ ............................ 22,260 22,191
5,758,000 PanAust Ltd.+ ......................................... 3,323,929 341,230
70,000 Peabody Energy Corp. (a) .............................. 3,461,788 1,592,500
134,000 Randgold Resources Ltd., ADR .......................... 2,369,732 5,885,280
27,000 Rio Tinto plc, ADR (a) ................................ 11,252,531 2,400,570
600 Royal Gold Inc. ....................................... 27,443 29,526
1,000 Silver Standard Resources Inc.+ ....................... 15,055 15,940
3,700 Silver Wheaton Corp+ .................................. 24,198 24,013
62,000 Vedanta Resources plc ................................. 2,673,957 545,095
240,335 Xstrata plc ........................................... 16,766,751 2,211,471
1,002,500 Yamana Gold Inc. (a) .................................. 10,954,201 7,739,300
-------------- --------------
204,206,858 153,687,649
-------------- --------------
TOTAL COMMON STOCKS ................................... 329,677,192 237,207,843
-------------- --------------
CONVERTIBLE PREFERRED STOCKS -- 0.8%
METALS AND MINING -- 0.8%
51,720 Freeport-McMoRan Copper & Gold Inc.,
6.750% Cv. Pfd. ....................................... 2,436,214 2,454,114
6,000 Vale Capital Ltd., 5.500% Cv. Pfd.,
Ser. RIO .............................................. 156,030 167,220
-------------- --------------
TOTAL CONVERTIBLE PREFERRED STOCKS .................... 2,592,244 2,621,334
-------------- --------------
WARRANTS -- 0.1%
ENERGY AND ENERGY SERVICES -- 0.0%
34,091 Comanche Energy Inc., Cl. A, expire
06/13/13+ (b)(c)(d) ................................... 93,750 42,001
36,197 Comanche Energy Inc., Cl. B,
expire 06/13/13+ (b)(c)(d) ............................ 93,750 42,001
82,965 Comanche Energy Inc., Cl. C,
expire 06/13/13+ (b)(c)(d) ............................ 187,501 84,001
-------------- --------------
375,001 168,003
-------------- --------------
METALS AND MINING -- 0.1%
62,500 Franco-Nevada Corp.,
expire 03/13/12+ (b)(d)(e) ............................ 400,744 334,579
-------------- --------------
TOTAL WARRANTS ........................................ 775,745 502,582
-------------- --------------
Principal
Amount
------------
CONVERTIBLE CORPORATE BONDS -- 4.0%
ENERGY AND ENERGY SERVICES -- 1.3%
$ 2,000,000 Carrizo Oil & Gas Inc., Cv.,
4.375%, 06/01/28 ................................... 988,872 910,000
1,500,000 Chesapeake Energy Corp., Cv.,
2.250%, 12/15/38 ................................... 661,632 680,625
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2008
PRINCIPAL MARKET
AMOUNT COST VALUE
------------ -------------- --------------
CONVERTIBLE CORPORATE BONDS (CONTINUED)
ENERGY AND ENERGY SERVICES (CONTINUED)
$ 2,000,000 Nabors Industries Inc., Cv.,
0.940%, 05/15/11 ................................... $ 1,575,925 $ 1,657,500
500,000 Transocean Ltd., Ser. A, Cv.,
1.625%, 12/15/37 ................................... 414,150 438,125
1,000,000 Transocean Ltd., Ser. B, Cv.,
1.500%, 12/15/37 ................................... 748,611 815,000
-------------- --------------
4,389,190 4,501,250
-------------- --------------
METALS AND MINING -- 2.7%
5,000,000 Newmont Mining Corp., Cv.,
1.625%, 07/15/17 ................................... 3,489,220 5,337,500
2,500,000 Placer Dome Inc., Cv.,
2.750%, 10/15/23 ................................... 2,177,886 3,815,625
-------------- --------------
5,667,106 9,153,125
-------------- --------------
TOTAL CONVERTIBLE CORPORATE BONDS ..................... 10,056,296 13,654,375
-------------- --------------
CORPORATE BONDS -- 10.2%
ENERGY AND ENERGY SERVICES -- 3.2%
2,000,000 Allis-Chalmers Energy Inc.,
9.000%, 01/15/14 ................................... 1,313,976 1,070,000
3,093,750 Comanche Energy Inc., PIK,
12.500%, 06/13/13 (b)(c)(d) ........................ 2,886,242 1,282,067
2,000,000 Marathon Oil Corp.,
6.000%, 10/01/17 ................................... 1,606,524 1,708,112
2,000,000 PetroHawk Energy Corp.,
9.125%, 07/15/13 ................................... 1,590,752 1,630,000
2,000,000 Suncor Energy Inc.,
6.100%, 06/01/18 ................................... 1,580,141 1,726,428
1,000,000 Tesoro Corp.,
6.250%, 11/01/12 ................................... 806,195 695,000
3,000,000 XTO Energy Inc.,
4.625%, 06/15/13 ................................... 2,717,609 2,727,057
-------------- --------------
12,501,439 10,838,664
-------------- --------------
METALS AND MINING -- 7.0%
2,000,000 AK Steel Corp.,
7.750%, 06/15/12 ................................... 1,614,756 1,570,000
3,000,000 Alcoa Inc.,
6.000%, 07/15/13 ................................... 2,599,578 2,715,150
5,000,000 ArcelorMittal,
5.375%, 06/01/13 ................................... 4,023,320 3,774,185
1,500,000 BHP Billiton Finance
(USA) Ltd.,
5.000%, 12/15/10 ................................... 1,444,386 1,475,742
2,000,000 Freeport-McMoRan
Copper & Gold Inc.,
8.250%, 04/01/15 ................................... 1,607,667 1,701,960
2,000,000 Peabody Energy Corp., Ser. B,
6.875%, 03/15/13 ................................... 1,767,569 1,905,000
2,000,000 Rio Tinto Finance (USA) Ltd.,
5.875%, 07/15/13 ................................... 1,715,673 1,594,518
3,515,000 United States Steel Corp.,
6.050%, 06/01/17 ................................... 2,390,517 2,301,538
2,700,000 WMC Finance (USA) Ltd.,
5.125%, 05/15/13 ................................... 2,392,617 2,583,265
5,000,000 Xstrata Canada Corp.,
7.250%, 07/15/12 ................................... 4,824,382 3,940,080
-------------- --------------
24,380,465 23,561,438
-------------- --------------
TOTAL CORPORATE BONDS ................................. 36,881,904 34,400,102
-------------- --------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------------ -------------- --------------
U.S. GOVERNMENT OBLIGATIONS -- 14.8%
U.S. TREASURY CASH MANAGEMENT BILLS -- 2.0%
$ 6,617,000 U.S. Treasury Cash Management Bills,
0.051% to 0.396%++,
04/29/09 to 06/24/09 ............................... $ 6,613,242 $ 6,613,424
-------------- --------------
U.S. TREASURY BILLS -- 12.8%
43,422,000 U.S. Treasury Bills,
0.071% to 0.645%++,
01/02/09 to 06/18/09 (a) ........................... 43,416,774 43,418,342
-------------- --------------
TOTAL U.S. GOVERNMENT OBLIGATIONS ..................... 50,030,016 50,031,766
-------------- --------------
EXPIRATION
DATE/
NUMBER OF EXERCISE
CONTRACTS PRICE
------------ --------------
PUT OPTIONS PURCHASED -- 0.1%
5,000 SPDR Gold Trust....................................... Jun. 09/55
$ 1,095,000 315,000
--------------
TOTAL PUT OPTIONS PURCHASED........................... 1,095,000 315,000
-------------- --------------
TOTAL INVESTMENTS -- 100.0%.......................................... $ 431,108,397 338,733,002
==============
CALL OPTIONS WRITTEN
(Premiums received $20,651,447)................................... (32,499,833)
PUT OPTIONS WRITTEN
(Premiums received $254,741)...................................... (43,138)
OTHER ASSETS AND LIABILITIES (NET)................................... (17,143,835)
PREFERRED STOCK
(3,957,475 preferred shares outstanding).......................... (98,936,875)
--------------
NET ASSETS -- COMMON STOCK
(18,303,157 common shares outstanding)............................ $ 190,109,321
==============
NET ASSET VALUE PER COMMON SHARE
($190,109,321 / 18,303,157 shares outstanding).................... $ 10.39
==============
EXPIRATION
DATE/
NUMBER OF EXERCISE MARKET
CONTRACTS PRICE VALUE
----------- ------------- ------------
OPTION CONTRACTS WRITTEN -- (9.6)%
CALL OPTIONS WRITTEN -- (9.6)%
1,016 Agnico-Eagle Mines Ltd. .................... Jan. 09/50 $ 416,560
1,002 Agnico-Eagle Mines Ltd. .................... May 09/40 1,523,040
1,570 Alcoa Inc. ................................. Jan. 09/50 1,570
600 Allis-Chalmers Energy Inc. ................. Jan. 09/7.50 7,500
20 Allis-Chalmers Energy Inc. ................. Jan. 09/12.50 250
155 Anglo American plc(f) ...................... Jun. 09/15 701,983
785 AngloGold Ashanti Ltd., ADR ................ Jan. 09/25 270,825
430 AngloGold Ashanti Ltd., ADR ................ Apr. 09/30 154,800
650 AngloGold Ashanti Ltd., ADR ................ Jul. 09/20 666,250
189 Baker Hughes Inc. .......................... Jan. 09/45 945
61 Baker Hughes Inc. .......................... Jan. 09/55 305
250 Baker Hughes Inc. .......................... Jan. 09/75 1,250
490 Baker Hughes Inc. .......................... Apr. 09/40 83,300
1,980 Barrick Gold Corp. ......................... Apr. 09/32.50 1,504,800
300 Barrick Gold Corp. ......................... Apr. 09/30 270,000
200 BHP Billiton Ltd., ADR ..................... Jan. 09/45 26,000
430 BHP Billiton Ltd., ADR ..................... Jan. 09/50 8,600
450 BHP Billiton Ltd., ADR ..................... May 09/40 378,000
500 BJ Services Co. ............................ Jan. 09/12.50 20,000
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2008
EXPIRATION
DATE/
NUMBER OF EXERCISE MARKET
CONTRACTS PRICE VALUE
----------- ------------- ------------
OPTION CONTRACTS WRITTEN (CONTINUED)
CALL OPTIONS WRITTEN (CONTINUED)
500 BJ Services Co. ............................ Jan. 09/17.50 $ 2,500
500 BJ Services Co. ............................ Jan. 09/20 5,000
1,000 BJ Services Co. ............................ Apr. 09/15 70,000
539 BP plc, ADR ................................ Apr. 09/50 146,877
170 BP plc, ADR ................................ Apr. 09/55 21,930
750 Chesapeake Energy Corp. .................... Jan. 09/40 3,750
375 Chesapeake Energy Corp. .................... Apr. 09/25 28,125
375 Chesapeake Energy Corp. .................... Apr. 09/27.50 20,625
46 Chevron Corp. .............................. Jan. 09/65 43,976
170 Chevron Corp. .............................. Mar. 09/75 94,520
240 Chevron Corp. .............................. Mar. 09/80 74,400
1,600 Companhia Vale do Rio Doce, ADR ............ Mar. 09/14 164,800
45 Compania de Minas Buenaventura SA, ADR ..... Jun. 09/17.50 24,975
50 ConocoPhillips ............................. Jan. 09/70 100
500 ConocoPhillips ............................. May 09/60 157,500
300 Devon Energy Corp. ......................... Jan. 09/85 1,500
400 Devon Energy Corp. ......................... Apr. 09/75 232,000
150 Devon Energy Corp. ......................... Apr. 09/80 57,600
200 Devon Energy Corp. ......................... Apr. 09/85 53,000
550 Diamond Offshore Drilling Inc. ............. Jan. 09/120 8,250
411 Diamond Offshore Drilling Inc. ............. Mar. 09/70 129,876
1,000 Equinox Minerals Ltd.(g) ................... Jan. 09/3 6,075
1,500 Equinox Minerals Ltd.(g) ................... Jan. 09/4 9,113
500 Equinox Minerals Ltd.(g) ................... Jan. 09/5 3,038
300 Exxon Mobil Corp. .......................... Jan. 09/75 177,900
150 Exxon Mobil Corp. .......................... Jan. 09/80 35,700
40 Exxon Mobil Corp. .......................... Apr. 09/80 28,400
2,000 Franco-Nevada Corp.(g) ..................... Jan. 09/20 299,716
1,250 Franco-Nevada Corp.(g) ..................... Jan. 09/23 45,565
1,250 Franco-Nevada Corp.(g) ..................... Jan. 09/24 22,782
190 Franco-Nevada Corp.(g) ..................... Apr. 09/20 55,407
1,110 Freeport-McMoRan Copper & Gold Inc. ........ Jan. 09/35 2,220
172 Freeport-McMoRan Copper & Gold Inc. ........ Jan. 09/60 860
110 Freeport-McMoRan Copper & Gold Inc. ........ Jan. 09/65 220
500 Freeport-McMoRan Copper & Gold Inc. ........ Jan. 09/80 2,500
1,782 Freeport-McMoRan Copper & Gold Inc. ........ Jan. 09/160 5,346
550 Freeport-McMoRan Copper & Gold Inc. ........ Feb. 09/35 22,550
250 Freeport-McMoRan Copper & Gold Inc. ........ May 09/30 78,750
250 Freeport-McMoRan Copper & Gold Inc. ........ May 09/35 46,500
500 Gold Fields Ltd., ADR ...................... Jan. 09/7.50 107,500
7,558 Gold Fields Ltd., ADR ...................... Jan. 09/10 491,270
4,000 Gold Fields Ltd., ADR ...................... Apr. 09/10 720,000
2,000 Gold Fields Ltd., ADR ...................... Jul. 09/7.50 730,000
700 Gold Fields Ltd., ADR ...................... Jan. 10/10 224,000
645 Goldcorp Inc. .............................. Jan. 09/30 176,730
1,100 Goldcorp Inc. .............................. Apr. 09/27.50 786,500
100 Halliburton Co. ............................ Jan. 09/25 200
100 Halliburton Co. ............................ Jan. 09/27.50 200
470 Halliburton Co. ............................ Jan. 09/35 470
250 Halliburton Co. ............................ Apr. 09/20 45,000
894 Halliburton Co. ............................ Apr. 09/22.50 97,446
EXPIRATION
DATE/
NUMBER OF EXERCISE MARKET
CONTRACTS PRICE VALUE
----------- ------------- ------------
250 Harmony Gold Mining Co.
Ltd., ADR .................................. Jan. 09/10 $ 35,000
1,800 Harmony Gold Mining Co.
Ltd., ADR .................................. May 09/7.50 810,000
1,850 Harmony Gold Mining Co. Ltd., ADR .......... May 09/8.25 648,721
1,000 Harmony Gold Mining Co. Ltd., ADR .......... May 09/12.50 165,000
1,000 Harmony Gold Mining Co. Ltd., ADR .......... Jan. 11/10 475,000
400 IAMGOLD Corp.(g) ........................... Feb. 09/5 84,245
1,600 IAMGOLD Corp.(g) ........................... Feb. 09/6 174,970
200 Imperial Oil Ltd.(g) ....................... May 09/38 112,596
1,168 Imperial Oil Ltd.(g) ....................... May 09/44 364,261
1,079 Ivanhoe Mines Ltd. ......................... Jan. 09/5 5,395
2,000 Kinross Gold Corp. ......................... Jan. 09/15 716,000
5,250 Kinross Gold Corp. ......................... Feb. 09/17.50 1,338,750
1,000 Kinross Gold Corp. ......................... May 09/15 530,000
4,650 Lihir Gold Ltd.(h) ......................... Jun. 09/2.27 3,281,852
150 Marathon Oil Corp. ......................... Jan. 09/35 750
250 Marathon Oil Corp. ......................... Jan. 09/55 1,250
400 Marathon Oil Corp. ......................... Apr. 09/30 98,400
980 Murphy Oil Corp. ........................... Apr. 09/50 357,700
100 Nabors Industries Ltd. ..................... Jan. 09/20 800
500 Nabors Industries Ltd. ..................... Jan. 09/30 2,500
200 Nabors Industries Ltd. ..................... Jan. 09/32.50 1,000
500 Nabors Industries Ltd. ..................... Jan. 09/35 2,000
900 Nabors Industries Ltd. ..................... Mar. 09/15 58,500
135 Newcrest Mining Ltd.(h) .................... Jun. 09/24.35 1,027,641
135 Newcrest Mining Ltd.(h) .................... Jun. 09/24.86 994,802
180 Newcrest Mining Ltd.(h) .................... Jun. 09/24.93 1,320,417
1,000 Newmont Mining Corp. ....................... Jan. 09/35 527,000
800 Newmont Mining Corp. ....................... Jan. 09/47.50 23,200
900 Newmont Mining Corp. ....................... Mar. 09/30 1,082,250
400 Noble Corp. ................................ Jan. 09/35 4,000
1,430 Noble Corp. ................................ Mar. 09/30 100,100
200 Noble Corp. ................................ Jun. 09/35 19,500
200 Peabody Energy Corp. ....................... Jan. 09/40 600
200 Peabody Energy Corp. ....................... Jan. 09/45 1,500
150 Peabody Energy Corp. ....................... Mar. 09/35 10,500
350 Peabody Energy Corp. ....................... Jun. 09/15 341,250
500 Petroleo Brasileiro SA, ADR ................ Jan. 09/26.25 50,500
300 Petroleo Brasileiro SA, ADR ................ Jan. 09/30 7,500
1,240 Petroleo Brasileiro SA, ADR ................ Apr. 09/22.50 607,600
450 Petroleo Brasileiro SA, ADR ................ Apr. 09/25 171,000
12 Randgold Resources Ltd., ADR ............... Mar. 09/35 13,920
600 Randgold Resources Ltd., ADR ............... Mar. 09/37.50 545,358
170 Randgold Resources Ltd., ADR ............... Mar. 09/45 97,750
545 Randgold Resources Ltd., ADR ............... Mar. 09/50 201,105
100 Rio Tinto plc, ADR ......................... Jan. 09/200 31,000
50 Rio Tinto plc, ADR ......................... Jan. 09/360 3,375
100 Rio Tinto plc, ADR ......................... Jan. 09/420 1,000
120 Rio Tinto plc, ADR ......................... Apr. 09/110 108,000
100 Rio Tinto plc, ADR ......................... Apr. 09/180 5,000
70 Rio Tinto plc, ADR ......................... Apr. 09/190 1,750
540 Rowan Companies Inc. ....................... Jan. 09/25 8,100
250 Rowan Companies Inc. ....................... Jan. 09/35 2,500
800 Rowan Companies Inc. ....................... Jan. 09/50 4,000
1,000 Rowan Companies Inc. ....................... Apr. 09/20 130,000
66 Royal Dutch Shell plc, Cl. A(f) ............ Mar. 09/1900 87,538
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2008
EXPIRATION
DATE/
NUMBER OF EXERCISE MARKET
CONTRACTS PRICE VALUE
----------- ------------- ------------
OPTION CONTRACTS WRITTEN (CONTINUED)
CALL OPTIONS WRITTEN (CONTINUED)
264 Saipem SpA(i) .............................. Mar. 09/15 $ 59,679
715 Sasol Ltd., ADR ............................ Mar. 09/30 311,025
100 Schlumberger Ltd. .......................... May 09/55 20,500
100 Schlumberger Ltd. .......................... May 09/60 12,600
300 StatoilHydro ASA, ADR ...................... Apr. 09/17.50 58,500
775 StatoilHydro ASA, ADR ...................... Apr. 09/20 79,437
350 Suncor Energy Inc. ......................... Jan. 09/25 3,150
550 Suncor Energy Inc. ......................... Jan. 09/30 5,500
1,900 Suncor Energy Inc. ......................... Mar. 09/22.50 313,500
400 Technip SA(i) .............................. Mar. 09/30 33,361
1,000 Teck Cominco Ltd., Cl. B ................... Jan. 09/30 6,885
500 Tesoro Corp. ............................... Jan. 09/12.50 65,000
200 Tesoro Corp. ............................... Jan. 09/15 5,000
800 Tesoro Corp. ............................... Jan. 09/20 4,000
365 Tesoro Corp. ............................... May 09/15 69,350
20 Total SA, ADR .............................. Feb. 09/55 8,800
100 Total SA, ADR .............................. Feb. 09/60 21,000
500 Transocean Inc. ............................ May 09/60 175,000
124 Transocean Inc. ............................ May 09/75 16,120
150 Valero Energy Corp. ........................ Jan. 09/25 2,700
761 Valero Energy Corp. ........................ Mar. 09/22.50 178,835
750 Weatherford International Ltd. ............. Jan. 09/20 7,500
500 Weatherford International Ltd. ............. Jan. 09/27.50 2,500
484 Weatherford International Ltd. ............. Jan. 09/35 4,840
207 Weatherford International Ltd. ............. May 09/15 20,700
2,000 Weatherford International Ltd. ............. May 09/17.50 110,000
750 Williams Companies Inc. .................... Jan. 09/22.50 9,375
600 Williams Companies Inc. .................... May 09/20 45,000
638 Williams Companies Inc. .................... May 09/22.50 20,735
240 Xstrata plc(f) ............................. Mar. 09/1200 69,875
500 XTO Energy Inc. ............................ May 09/35 302,500
1,000 XTO Energy Inc. ............................ May 09/40 370,000
8,000 Yamana Gold Inc. ........................... Mar. 09/6.50 1,505,680
1,500 Yamana Gold Inc. ........................... Apr. 09/8 187,500
------------
TOTAL CALL OPTIONS WRITTEN
(Premiums received $20,651,447) $ 32,499,833
============
PUT OPTIONS WRITTEN -- 0.0%
150 Agnico-Eagle Mines Ltd. .................... May 09/17.50 $ 3,000
100 AngloGold Ashanti Ltd., ADR ................ Apr. 09/10 2,000
200 Barrick Gold Corp. ......................... Apr. 09/12.50 3,000
1,000 Gold Fields Ltd., ADR ...................... May 09/3.50 10,650
190 Goldcorp Inc. .............................. Apr. 09/12.50 2,850
500 Kinross Gold Corp. ......................... May 09/7.50 11,250
50 Marathon Oil Corp. ......................... Apr. 09/15 2,250
120 Tesoro Corp. ............................... May 09/5 4,200
750 Yamana Gold Inc. ........................... May 09/2.50 3,938
------------
TOTAL PUT OPTIONS WRITTEN
(Premiums received $254,741) ............ $ 43,138
============
----------
(a) Securities, or a portion thereof, with a value of $197,235,788 are pledged
as collateral for options written.
(b) 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 December 31, 2008, the market value of fair
valued securities amounted to $2,613,459 or 0.77% of total investments.
(c) At December 31, 2008, the Fund held investments in restricted securities
amounting to $2,413,880 or 0.71% of total investments, which were valued
under methods approved by the Board of Trustees as follows:
ACQUISITION
SHARES/ 12/31/08
PRINCIPAL ACQUISITION ACQUISITION CARRYING VALUE
AMOUNT ISSUER DATE COST PER UNIT
------------- -------------------------------- ---------- ----------- --------------
307,692 Comanche Energy Inc. .......... 06/17/08 $1,849,998 $ 2.6936
34,091 Comanche Energy Inc., Cl. A,
Warrants expire 06/13/13 ...... 06/17/08 93,750 1.2320
36,197 Comanche Energy Inc., Cl. B,
Warrants expire 06/13/13 ...... 06/17/08 93,750 1.1603
82,965 Comanche Energy Inc., Cl. C,
Warrants expire 06/13/13 ...... 06/17/08 187,501 1.0125
$3,093,750 Comanche Energy Inc.,
12.500%, 06/13/13 ............. 06/17/08 2,775,000 41.4405
50,000 Ivanhoe Mines Ltd., New York .. 04/25/05 337,529 2.7000
(d) Illiquid security.
(e) 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 December
31, 2008, the market value of Rule 144A securities amounted to $2,489,298
or 0.73% of total investments.
(f) Exercise price denoted in British Pounds.
(g) Exercise price denoted in Canadian dollars.
(h) Exercise price denoted in Australian dollars.
(i) Exercise price denoted in Euros.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depositary Receipt
PIK Payment-in-kind
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
-------------------------- ------ ------------
LONG POSITIONS
North America ............ 64.5% $218,562,204
South Africa ............. 10.9 36,971,995
Europe ................... 10.3 34,674,082
Asia/Pacific ............. 8.9 30,096,697
Latin America ............ 5.4 18,332,754
Africa/Middle East ....... 0.0 95,270
----- ------------
Total Investments ........ 100.0% $338,733,002
===== ============
SHORT POSITIONS
North America ............ (4.7)% $(15,981,822)
Asia/Pacific ............. (2.1) (7,059,242)
South Africa ............. (1.7) (5,822,041)
Europe ................... (0.7) (2,319,551)
Latin America ............ (0.4) (1,360,315)
----- ------------
Total Investments ........ (9.6)% $(32,542,971)
===== ============
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2008
ASSETS:
Investments, at value (cost $431,108,397) .................. $ 338,733,002
Deposit at brokers ......................................... 871,212
Dividends and interest receivable .......................... 1,123,481
Deferred offering expense .................................. 164,666
Prepaid expense ............................................ 12,622
--------------
TOTAL ASSETS ............................................... 340,904,983
--------------
LIABILITIES:
Call options written (premiums received $20,651,447) ....... 32,499,833
Put options written (premiums received $254,741) ........... 43,138
Foreign currency, at value (cost $71,572) .................. 70,496
Payable to custodian ....................................... 30,441
Payable for investments purchased .......................... 12,956,848
Distributions payable ...................................... 109,243
Payable for Preferred shares repurchased ................... 85,390
Payable for investment advisory fees ....................... 229,824
Payable for payroll expenses ............................... 35,325
Payable for accounting fees ................................ 7,500
Unrealized depreciation on swap contracts .................. 5,438,296
Other accrued expenses and liabilities ..................... 352,453
--------------
TOTAL LIABILITIES .......................................... 51,858,787
--------------
PREFERRED SHARES:
Series A Cumulative Preferred Shares (6.625%, $25
liquidation value, $0.001 par value, 4,000,000 shares
authorized with 3,957,475 shares issued
and outstanding) ........................................ 98,936,875
--------------
NET ASSETS ATTRIBUTABLE TO COMMON SHARES ................... $ 190,109,321
==============
NET ASSETS CONSIST OF:
Paid-in capital, at $.001 par value ........................ $ 326,235,070
Accumulated net investment income .......................... 5,198,194
Accumulated distributions in excess of net realized gain
on investments, swap contracts, securities sold short,
written options, and foreign currency transactions ...... (31,870,376)
Net unrealized depreciation on investments ................. (92,375,395)
Net unrealized depreciation on swap contracts .............. (5,438,296)
Net unrealized depreciation on written options ............. (11,636,783)
Net unrealized depreciation on foreign
currency translations ...................................... (3,093)
--------------
NET ASSETS ................................................. $ 190,109,321
==============
NET ASSET VALUE PER COMMON SHARE:
($190,109,321 / 18,303,157 shares outstanding;
unlimited number of shares authorized) ..................... $ 10.39
==============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
INVESTMENT INCOME:
Dividends (net of foreign taxes of $234,203) ............... $ 7,360,482
Interest ................................................... 1,658,481
Other income ............................................... 21,813
--------------
TOTAL INVESTMENT INCOME .................................... 9,040,776
--------------
EXPENSES:
Investment advisory fees ................................... 5,343,714
Interest expense ........................................... 653,338
Legal and audit fees ....................................... 339,289
Shareholder communications expenses ........................ 264,906
Tax expense ................................................ 153,771
Payroll expenses ........................................... 153,136
Trustees' fees ............................................. 87,761
Custodian fees ............................................. 76,400
Accounting fees ............................................ 45,000
Shareholder services fees .................................. 25,543
Miscellaneous expenses ..................................... 209,012
--------------
TOTAL EXPENSES ............................................. 7,351,870
--------------
NET INVESTMENT INCOME ...................................... 1,688,906
--------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS,
SWAP CONTRACTS, SECURITIES SOLD SHORT, WRITTEN
OPTIONS, AND FOREIGN CURRENCY:
Net realized loss on investments ........................... (34,219,204)
Net realized gain on swap contracts ........................ 6,241,676
Net realized loss on securities sold short ................. (1,976,021)
Net realized gain on written options ....................... 30,678,016
Net realized loss on foreign currency transactions ......... (2,371,046)
--------------
Net realized gain/(loss) on investments, swap contracts,
securities sold short, written options, and foreign
currency transactions ................................... (1,646,579)
--------------
Net change in unrealized appreciation/(depreciation):
on investments ............................................. (279,433,313)
on swap contracts .......................................... (13,954,484)
on written options ......................................... (16,071,086)
on foreign currency translations ........................... (6,083)
--------------
Net change in unrealized appreciation/(depreciation) on
investments, swap contracts, written options, and
foreign currency translations ........................... (309,464,966)
--------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS,
SWAP CONTRACTS, SECURITIES SOLD SHORT, WRITTEN
OPTIONS, AND FOREIGN CURRENCY ........................... (311.111,545)
--------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................................ (309,422,639)
--------------
Total Distributions to Preferred Shareholders .............. (6,610,464)
--------------
NET DECREASE IN NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS RESULTING FROM OPERATIONS ..................... $(316,033,103)
==============
See accompanying notes to financial statements.
7
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
----------------- -----------------
OPERATIONS:
Net investment income/(loss) ....................................................... $ 1,688,906 $ (421,154)
Net realized gain/(loss) on investments, swap contracts, securities sold short,
written options, and foreign currency transactions .............................. (1,646,579) 23,501,285
Net change in unrealized appreciation/(depreciation) on investments, swap contracts,
securities sold short, written options, and foreign currency translations ....... (309,464,966) 114,085,756
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................... (309,422,639) 137,165,887
------------- ------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income .............................................................. (1,405,224) (86,208)
Net realized short-term gain ....................................................... (665,830) (396,955)
Net realized long-term gain ........................................................ (4,539,410) (933,851)
------------- ------------
TOTAL DISTRIBUTIONS TO PREFERRED SHAREHOLDERS ...................................... (6,610,464) (1,417,014)
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS RESULTING
FROM OPERATIONS .................................................................... (316,033,103) 135,748,873
------------- ------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income .............................................................. (2,371,792) (2,705,719)
Net realized short-term gain ....................................................... (1,123,814) (17,778,632)
Net realized long-term gain ........................................................ (7,661,790) (14,375,712)
Return of capital .................................................................. (19,313,777) --
------------- ------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ......................................... (30,471,173) (34,860,063)
------------- ------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares issued upon reinvestment of
distributions ................................................................... 3,057,687 3,173,090
Offering costs for preferred shares charged to paid-in-capital ..................... 163,317 (3,550,000)
Net increase in net assets from repurchase of preferred shares ..................... 139,812 --
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS FROM FUND SHARE TRANSACTIONS ................. 3,360,816 (376,910)
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS .............................................. (343,143,460) 100,511,900
NET ASSETS:
Beginning of period ................................................................ 533,252,781 432,740,881
------------- ------------
End of period (including undistributed net investment income of $5,198,194
and $0, respectively) ........................................................... $ 190,109,321 $533,252,781
============= ============
See accompanying notes to financial statements.
8
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD:
YEAR ENDED DECEMBER 31, PERIOD ENDED
--------------------------------- DECEMBER 31,
2008 2007 2006 2005 (e)
-------- -------- -------- ------------
OPERATING PERFORMANCE:
Net asset value, beginning of period ....................................... $ 29.48 $ 24.10 $ 21.99 $ 19.06(f)
-------- -------- -------- --------
Net investment income/(loss) ............................................... 0.10 (0.02) 0.08 0.08
Net realized and unrealized gain/(loss) on investments, swap contracts,
securities sold short, written options, and
foreign currency transactions ........................................... (17.18) 7.61 3.77 4.01
-------- -------- -------- --------
Total from investment operations ........................................... (17.08) 7.59 3.85 4.09
-------- -------- -------- --------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:(a)
Net investment income ...................................................... (0.08) (0.01) -- --
Net realized gain .......................................................... (0.28) (0.07) -- --
-------- -------- -------- --------
Total distributions to preferred shareholders .............................. (0.36) (0.08) -- --
-------- -------- -------- --------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ...................................................... (0.13) (0.15) -- (0.07)
Net realized gain .......................................................... (0.48) (1.78) (1.74) (1.09)
Return of capital .......................................................... (1.07) -- -- --
-------- -------- -------- --------
Total distributions to common shareholders ................................. (1.68) (1.93) (1.74) (1.16)
-------- -------- -------- --------
FUND SHARE TRANSACTIONS:
Increase/(decrease) in net asset value from common share transactions ...... 0.01 0.00(d) -- (0.00)(d)
Increase in net asset value from repurchases of preferred shares ........... 0.01 -- -- --
Offering costs for preferred shares charged to paid-in capital ............. 0.01 (0.20) -- --
-------- -------- -------- --------
Total fund share transactions .............................................. 0.03 (0.20) -- (0.00)(d)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ............................................. $ 10.39 $ 29.48 $ 24.10 $ 21.99
======== ======== ======== ========
NAV total return + ......................................................... (61.59)% 31.47% 18.29% 22.0%*
======== ======== ======== ========
Market value, end of period ................................................ $ 13.10 $ 29.15 $ 24.60 $ 21.80
======== ======== ======== ========
Investment total return ++ ................................................. (50.94)% 27.40% 21.86% 15.2%**
======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets including liquidation value of preferred shares,
end of period (in 000's) ................................................ $289,046 $633,253 -- --
Net assets attributable to common shares, end of period (in 000's) ......... $190,109 $533,253 $432,741 $390,209
Ratio of net investment income/(loss) to average net assets
attributable to common shares ........................................... 0.39% (0.09)% 0.42% 0.47%(g)
Ratio of operating expenses to average net assets attributable to
common shares (b) ....................................................... 1.69% 1.45% 1.17% 1.15%(g)
Ratio of operating expenses to average net assets including liquidation
value of preferred shares (b) ........................................... 1.37% 1.39% -- --
Portfolio turnover rate +++ ................................................ 41.5% 71.3% 114.8% 142.5%
PREFERRED SHARES:
6.625% SERIES A CUMULATIVE PREFERRED SHARES
Liquidation value, end of period (in 000's) ................................ $ 98,937 $100,000 -- --
Total shares outstanding (in 000's) ........................................ 3,957 4,000 -- --
Liquidation preference per share ........................................... $ 25.00 $ 25.00 -- --
Average market value (c) ................................................... $ 24.10 $ 24.16 -- --
Asset coverage per share ................................................... $ 73.04 $ 158.31 -- --
ASSET COVERAGE ............................................................. 292% 633% -- --
----------
+ Based on net asset value per share, adjusted for reinvestment of
distributions at the net asset value per share on the ex-dividend dates.
Total return for a period of less than one year is not annualized.
++ Based on market value per share, adjusted for reinvestment of distributions
at prices obtained under the Fund's dividend reinvestment plan. Total
return for a period of less than one year is not annualized.
+++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate to include cash proceeds due
to mergers. Had this policy been adopted retroactively, the portfolio
turnover rate for the year ended December 31, 2007 and period ended
December 31, 2005 would have been 77.7% and 143.3%, respectively. The
portfolio turnover rate for the year ended 2006 would have been as shown.
* Based on net asset value per share at commencement of operations of $19.06
per share.
** Based on market value per share at initial public offering of $20.00 per
share.
(a) Calculated based upon average common shares outstanding on the record dates
throughout the periods.
(b) The Fund incurred interest expense during December 31, 2008, 2007, and
2006. If interest expense had not been incurred, the ratio of operating
expenses to average net assets attributable to common shares would have
been 1.54%, 1.33%, and 1.16%, respectively, and for 2008 and 2007, the
ratio of operating expenses to average net assets including liquidation
value of preferred shares would have been 1.25% and 1.27%, respectively.
(c) Based on weekly prices.
(d) Amount represents less than $0.005 per share.
(e) The Fund commenced investment operations on March 31, 2005.
(f) The beginning of period NAV reflects a $0.04 reduction for costs associated
with the initial public offering.
(g) Annualized.
See accompanying notes to financial statements.
9
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. The Gabelli Global Gold, Natural Resources & Income Trust (the
"Fund") is a non-diversified closed-end management investment company organized
as a Delaware statutory trust on January 4, 2005 and registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). Investment
operations commenced on March 31, 2005.
The Fund's primary investment objective is to provide a high level of
current income. The Fund's secondary investment objective is to seek capital
appreciation consistent with the Fund's strategy and its primary objective.
Under normal market conditions, the Fund will attempt to achieve its objectives
by investing 80% of its assets in equity securities of companies principally
engaged in the gold and natural resources industries. As part of its investment
strategy, the Fund intends to earn income through an option strategy of writing
(selling) covered call options on equity securities in its portfolio. The Fund
anticipates that it will invest at least 25% of its assets in the equity
securities of companies principally engaged in the exploration, mining,
fabrication, processing, distribution, or trading of gold, or the financing,
managing and controlling, or operating of companies engaged in "gold related"
activities ("Gold Companies"). In addition, the Fund anticipates that it will
invest at least 25% of its assets in the equity securities of companies
principally engaged in the exploration, production, or distribution of natural
resources, such as gas and oil, paper, food and agriculture, forestry products,
metals, and minerals as well as related transportation companies and equipment
manufacturers ("Natural Resources Companies"). The Fund may invest in the
securities of companies located anywhere in the world.
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 with the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities with 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.
Statement of Financial Accounting Standard No. 157, "Fair Value
Measurements" ("SFAS 157") 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).
10
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 and other financial instruments, by inputs
used to value the Fund's investments as of December 31, 2008 is, as follows:
OTHER FINANCIAL
INVESTMENTS IN INVESTMENTS IN INSTRUMENTS
SECURITIES SECURITIES (UNREALIZED
(MARKET VALUE) (MARKET VALUE) DEPRECIATION)*
VALUATION INPUTS ASSETS LIABILITIES LIABILITIES
---------------- -------------- -------------- ---------------
Level 1 - Quoted Prices $239,000,367 $(16,145,466) --
Level 2 - Other Significant Observable Inputs 97,453,755 (16,397,505) $(5,438,296)
Level 3 - Significant Unobservable Inputs 2,278,880 -- --
------------ ------------ -----------
$338,733,002 $(32,542,971) $(5,438,296)
============ ============ ===========
----------
* Other financial instruments are derivative instruments not reflected in the
Schedule of Investments, such as futures, forwards, and swaps, which are
valued at the unrealized appreciation/depreciation on the investment.
The following is a reconciliation of Level 3 investments for which
significant unobservable inputs were used to determine fair value:
INVESTMENTS IN
SECURITIES
(MARKET VALUE)
--------------
BALANCE AS OF 12/31/07 --
Accrued discounts/(premiums) $ 17,492
Realized gain/(loss) --
Change in unrealized appreciation/(depreciation)+ (2,832,361)
Net purchases/(sales) 5,093,749
Transfers in and/or out of Level 3 --
-----------
BALANCE AS OF 12/31/08 $ 2,278,880
===========
Net change in unrealized appreciation/(depreciation) during
the period on Level 3 investments held at 12/31/08+ $(2,832,361)
-----------
----------
+ Net change in unrealized appreciation/(depreciation) is included in the
related amounts on investments in the Statement of Operations.
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.
It is the policy of the Fund to always receive and maintain securities as
collateral whose market value, including accrued interest, are 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 December 31, 2008, there were no open repurchase agreements.
SWAP AGREEMENTS. The Fund may enter into equity swap transactions. The use
of equity swaps is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
security transactions. In an equity swap, a set of future cash flows are
exchanged between two counterparties. One of these cash flow streams will
typically be based on a reference interest rate combined with the performance of
a notional value of shares of a stock. The other will be based on the
performance of the shares of a stock. There is no assurance that the swap
contract counterparties will be able to meet their obligations pursuant to the
swap contracts, or that, in the event of default, the Fund will succeed in
pursuing contractual remedies.
11
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund thus assumes the risk that it may be delayed in or prevented from
obtaining payments owed to it pursuant to the swap contracts. The
creditworthiness of the swap contract counterparties is closely monitored in
order to minimize the risk. Depending on the general state of short-term
interest rates and the returns of the Fund's portfolio securities at that point
in time, such a default could negatively affect the Fund's ability to make
dividend payments. In addition, at the time an equity swap 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
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 payments.
The use of derivative instruments involves, to varying degrees, elements of
market and counterparty risk in excess of the amount below.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability in the Statement of Assets and Liabilities.
The change in value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps, is reported as unrealized gains or
losses in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of a periodic payment or termination of swap agreements.
The Fund has entered into an equity swap agreement with Morgan Stanley &
Co. Incorporated. Details of the swaps at December 31, 2008 are as follows:
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION NET UNREALIZED
AMOUNT RECEIVED EQUITY SECURITY PAID DATE DEPRECIATION
--------------------------- ---------------------------- ---------------------------- ----------- --------------
3 Month LIBOR plus
Market Value 45 bps plus Market Value
Appreciation on: Depreciation on:
$5,723,523 (672,000 Shares) MMX Mineracao e Melalicos SA MMX Mineracao e Melalicos SA 03/11/09 $(4,853,996)
761,848 (274,200 Shares) LLX Logistica SA LLX Logistica SA 03/11/09 (584,300)
-----------
$(5,438,296)
===========
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. Shareholders in the Fund bear the pro rata
portion of the periodic expenses of the Acquired Funds in addition to the Fund's
expenses. For the year ended December 31, 2008, the Fund's pro rata portion of
the periodic expenses charged by the Acquired Funds was less than one basis
point.
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 written 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 written 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. Option positions at December 31,
2008 are presented within the Schedule of Investments.
12
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SECURITIES SOLD SHORT. The Fund may enter into short sale transactions.
Short selling involves selling securities that may or may not be owned and, at
times, borrowing the same securities for delivery to the purchaser, with an
obligation to replace such borrowed securities at a later date. The proceeds
received from short sales are recorded as liabilities and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds
received and the value of an open short position on the day of determination.
The Fund records a realized gain or loss when the short position is closed out.
By entering into a short sale, the Fund bears the market risk of an unfavorable
change in the price of the security sold short. Dividends on short sales are
recorded as an expense by the Fund on the ex-dividend date and interest expense
is recorded on the accrual basis. The Fund did not hold any short positions as
of December 31, 2008.
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.
CONCENTRATION RISKS. The Fund may invest a high percentage of its assets in
specific sectors of the market in order to achieve a potentially greater
investment return. As a result, the Fund may be more susceptible to economic,
political, and regulatory developments in a 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 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
included in "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.
Permanent differences were primarily due to recharacterization of distributions
and reclassifications of capital gains on passive foreign investment companies.
These reclassifications have no impact on the NAV of the Fund. For the year
ended December 31, 2008, reclassifications were made to increase accumulated net
investment income by $10,240,946 and to increase accumulated distributions
13
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
in excess of net realized gain on investments, swap contracts, securities sold
short, written options, and foreign currency transactions by $10,087,175 with an
offsetting adjustment to paid-in capital.
Distributions to shareholders of the Fund's 6.625% Series A Cumulative
Preferred Shares are recorded on a daily basis.
The tax character of distributions paid during the years ended December 31,
2008 and December 31, 2007 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
------------------------ ------------------------
COMMON PREFERRED COMMON PREFERRED
----------- ---------- ----------- ----------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) $ 3,495,606 $2,071,054 $20,148,505 $ 819,009
Net long-term capital gains .............. 7,661,790 4,539,410 14,711,558 598,005
Return of capital ........................ 19,313,777 -- -- --
----------- ---------- ----------- ----------
Total distributions paid ................. $30,471,173 $6,610,464 $34,860,063 $1,417,014
=========== ========== =========== ==========
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.
To be consistent with the application of Treasury Regulation 1.446-3 as it
applies to notional principal contracts, the Fund paid a tax expense in the
amount of $153,771 as a result of an amended 2006 excise return. This amended
filing was due to straddle loss deferrals and qualified covered call options.
Under the current tax law, capital losses related to securities and foreign
currency realized after October 31 and prior to the Fund's fiscal year end may
be treated as occurring on the first day of the following year. For the year
ended December 31, 2008, the Fund deferred capital losses of $27,712,086 and
currency losses of $130,859.
At December 31, 2008, the difference between book basis and tax basis
unrealized depreciation was primarily due to deferral of losses from wash sales
for tax purposes.
Net unrealized depreciation on investments, swap contracts,
and written options ........................................ $(108,170,468)
Net unrealized depreciation on foreign currency translations .. (3,093)
Post-October capital and currency loss deferrals .............. (27,842,945)
Other temporary differences* .................................. (109,243)
-------------
Total ......................................................... $(136,125,749)
=============
----------
* Other temporary differences are due to adjustments on dividends payable.
The following summarizes the tax cost of investments, swap contracts, short
sales, written options, and the related unrealized appreciation/depreciation at
December 31, 2008:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COSTS APPRECIATION DEPRECIATION DEPRECIATION
------------ ------------- -------------- --------------
Investments ...... $436,046,688 $ 40,205,226 $(136,738,911) $ (96,533,685)
Written options .. 20,906,188 5,881,059 (17,517,842) (11,636,783)
------------ ------------- ------------- -------------
$456,952,876 $ 46,086,285 $(154,256,753) $(108,170,468)
============ ============= ============= =============
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes"
("FIN 48") provides guidance for how uncertain tax positions should be
recognized, measured, presented, and disclosed in the financial statements. FIN
48 requires the evaluation of 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. Tax positions not deemed to meet the "more-likely-than-not" threshold
are recorded as a tax benefit or expense in the current year. In accordance with
FIN 48, management has analyzed the Fund's tax positions taken on the federal
and state income tax returns for all open tax years (the current and prior three
tax years) and has concluded that no provision for income tax is required in the
Fund's financial statements. Management's determination regarding FIN 48 may be
subject to review and adjustment at a later date based on factors including, but
not limited to, an on-going analysis of tax laws, regulations, and
interpretations thereof.
3.AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Fund has 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 shares. In accordance with
14
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 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 year
ended December 31, 2008, the Fund paid or accrued $45,000 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 an allocated portion of the cost of the Fund's Chief
Compliance Officer. For the year ended December 31, 2008, the Fund paid or
accrued $153,136, 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 $6,000 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. All Board committee members
receive $500 per meeting attended. 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 year ended December 31, 2008, other than short-term securities and U.S.
Government obligations, aggregated $228,903,338 and $270,753,551, respectively.
Purchases and proceeds from the sales of U.S. Government obligations for
the year ended December 31, 2008, other than short-term obligations, aggregated
$388,266 and $386,351, respectively.
Written options activity for the Fund for the year ended December 31, 2008
was as follows:
NUMBER OF
CONTRACTS PREMIUMS
--------- -------------
Options outstanding at December 31, 2007 ...... 152,472 $ 25,991,039
Stock splits on options ....................... 5,465 --
Options written ............................... 1,029,489 177,103,567
Options repurchased ........................... (641,439) (119,643,476)
Options expired ............................... (386,986) (58,079,925)
Options exercised ............................. (37,308) (4,465,017)
--------- -------------
Options outstanding at December 31, 2008 ...... 121,693 $ 20,906,188
========= =============
5. CAPITAL. The Fund is authorized to issue an unlimited number of common shares
of beneficial interest (par value $0.001). The Board has authorized the
repurchase of its shares in the open market when the shares are trading at a
discount of 7.5% or more (or such other percentage as the Board may determine
from time to time) from the NAV of the shares. During the year ended December
31, 2008, the Fund did not repurchase any shares of beneficial interest in the
open market.
The Fund filed a $350 million shelf offering with the SEC that went
effective September 24, 2007. The shelf offering gave the Fund the ability to
offer additional common and preferred shares.
On October 16, 2007, the Fund completed the placement of $100 million of
Cumulative Preferred Shares ("Preferred Shares"). The Preferred Shares are
senior to the common shares and result in the financial leveraging of the common
shares. Such leveraging tends to magnify both the risks and opportunities to
common shareholders. Dividends on the 6.625% Series A Preferred Shares are
cumulative. The Fund is required by the 1940 Act and by the Statement of
Preferences to meet certain asset coverage tests with respect to the Preferred
Shares. 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 Preferred
Shares at the redemption price of $25 per share plus an amount equal to the
accumulated and unpaid dividends whether or not declared on such shares in order
to meet the requirements. Additionally, failure to meet the foregoing asset
coverage requirements could restrict the Fund's ability to pay dividends to
common shareholders 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 rate, which could have either a beneficial or detrimental
impact on net investment income and gains available to common shareholders.
On October 16, 2007, the Fund received net proceeds of $96,450,000 (after
underwriting discounts of $3,150,000 and offering expenses of $400,000) from the
public offering of 4,000,000 shares of 6.625% Series A Cumulative Preferred
Shares. Commencing October 16, 2012, and thereafter, the Fund, at its option,
may redeem the Preferred Shares in whole or in part at the redemption price
15
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
at any time. The Board has authorized the repurchase of the Preferred Shares in
the open market at prices less than the $25 liquidation value per share. During
the year ended December 31, 2008, the Fund repurchased 42,525 of the Preferred
Shares in the open market at a cost of $923,313 and an average discount of
approximately 13.15% from its liquidation preference. All Preferred Shares
repurchased have been retired. At December 31, 2008, 3,957,475 Preferred Shares
were outstanding and accrued dividends amounted to $109,243.
Transactions in common shares of beneficial interest were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
Net increase from shares issued
upon reinvestment of distributions .. 217,095 $3,057,687 127,490 $3,173,090
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 is not expected to impact the Fund and 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 including the Fund. 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.
In a separate matter, on January 12, 2009, the SEC issued an administrative
action approving a final settlement of a previously disclosed matter with the
Adviser involving compliance with Section 19(a) of the Investment Company Act of
1940 and Rule 19a-1 thereunder by two closed-end funds. These provisions require
registered investment companies when making a distribution in the nature of a
dividend from sources other than net investment income to contemporaneously
provide written statements to shareholders, which adequately disclose the source
or sources of such distribution. While the two funds sent annual statements and
provided other materials containing this information, the shareholders did not
receive the notices required by Rule 19a-1 with any of the distributions that
were made for 2002 and 2003. The Adviser believes that the funds have been in
compliance with Section 19(a) and Rule 19a-1 since the beginning of 2004. As
part of the settlement, in which the Adviser neither admits nor denies the
findings by the SEC, the Adviser agreed to pay a civil monetary penalty of
$450,000 and to cease and desist from causing violations of Section 19(a) and
Rule 19a-1. In connection with the settlement, the SEC noted the remedial
actions previously undertaken by the Adviser. The staff's notice to the Adviser
did not relate to the Fund.
16
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
The Gabelli Global Gold, Natural Resources & Income Trust:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Global Gold, Natural
Resources & Income Trust (hereafter referred to as the "Trust") at December 31,
2008, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods presented, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 2008 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 27, 2009
17
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
ADDITIONAL FUND INFORMATION (UNAUDITED)
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees. Information pertaining to the Trustees and officers of
the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about the Fund's Trustees and is available
without charge, upon request, by calling 800-GABELLI (800-422-3554) or by
writing to The Gabelli Global Gold Natural Resources & Income Trust at One
Corporate Center, Rye, NY 10580-1422.
TERM OF NUMBER OF
NAME, POSITION(S) OFFICE AND FUNDS IN
ADDRESS(1) LENGTH OF TIME FUND COMPLEX PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE SERVED(2) OVERSEEN BY TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE(4)
---------------------------- ------------------ ------------------- ------------------------------ -------------------------
INTERESTED TRUSTEE:
SALVATORE M. SALIBELLO(3) Since 2005** 3 Certified Public Accountant --
Trustee and Managing Partner of the
Age: 63 public accounting firm
Salibello & Broder LLP since
1978
INDEPENDENT TRUSTEES(5):
ANTHONY J. COLAVITA Since 2005* 36 Partner in the law firm of --
Trustee Anthony J. Colavita, P.C.
Age: 73
JAMES P. CONN Since 2005** 18 Former Managing Director and --
Trustee Chief Investment Officer of
Age: 70 Financial Security Assurance
Holdings Ltd. (insurance
holding company) (1992-1998)
MARIO D'URSO Since 2005*** 5 Chairman of Mittel Capital --
Trustee Markets S.p.A., since 2001;
Age: 68 Senator in the Italian
Parliament (1996-2001)
VINCENT D. ENRIGHT Since 2005*** 16 Former Senior Vice President Director of Echo
Trustee and Chief Financial Officer of Therapeutics, Inc.
Age: 65 KeySpan Corporation (public (therapeutics and
utility) (1994-1998) diagnostics)
FRANK J. FAHRENKOPF, JR. Since 2005* 6 President and Chief Executive --
Trustee Officer of the American Gaming
Age: 69 Association; Co-Chairman of
the Commission on Presidential
Debates; Former Chairman of
the Republican National
Committee (1983-1989)
MICHAEL J. MELARKEY Since 2005*** 5 Partner in the law firm of Director of Southwest Gas
Trustee Avansino, Melarkey, Knobel & Corporation (natural gas
Age: 59 Mulligan utility)
ANTHONIE C. VAN EKRIS Since 2005** 20 Chairman of BALMAC --
Trustee International, Inc.
Age: 74 (commodities and futures
trading)
SALVATORE J. ZIZZA Since 2005* 28 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden
Trustee (consulting) Pharmaceuticals
Age: 63 (biotechnology); Director
of Earl Scheib, Inc.
(automotive services)
18
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
NAME, POSITION(S) TERM OF OFFICE
ADDRESS(1) AND AND LENGTH OF PRINCIPAL OCCUPATION(S)
AGE TIME SERVED(2) DURING PAST FIVE YEARS
---------------------------- -------------- ------------------------------------------------------------------------------------
OFFICERS:
BRUCE N. ALPERT Since 2005 Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC since
President 1988 and an officer of all of the registered investment companies in the
Age: 57 Gabelli/GAMCO Funds complex. Director and President of Teton Advisors, Inc.
(formerly Gabelli Advisers, Inc.) since 1998
CARTER W. AUSTIN Since 2005 Vice President of the Fund since 2005; Vice President of The Gabelli Equity Trust
Vice President since 2000, The Gabelli Dividend & Income Trust since 2003, The Gabelli Global Deal
Age: 42 Fund since 2006, and The Gabelli Healthcare & Wellness(Rx) Trust since 2007; Vice
President of Gabelli Funds, LLC since 1996
MOLLY A.F. MARION Since 2005 Assistant Vice President of GAMCO Investors, Inc. since 2006; Assistant Portfolio
Assistant Vice President Manager of Gabelli Fixed Income (1994-2004)
and Ombudsman
Age: 54
AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of the registered
Treasurer and Secretary investment companies in the Gabelli/GAMCO Funds complex; Senior Vice President of
Age: 50 U.S. Trust Company, N.A. and Treasurer and Chief Financial Officer of Excelsior
Funds from 2004 through 2005; Chief Financial Officer of AMIC Distribution Partners
from 2002 through 2004
PETER D. GOLDSTEIN Since 2005 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004; Chief Compliance
Chief Compliance Officer Officer of all of the registered investment companies in the Gabelli/GAMCO Funds
Age: 55 complex; Vice President of Goldman Sachs Asset Management from 2000 through 2004
----------
(1) Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
(2) The Fund's Board of Trustees 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 2011 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
** - Term expires at the Fund's 2009 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
*** - Term expires at the Fund's 2010 Annual Meeting of Shareholders 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) "Interested person" of the Fund as defined in the 1940 Act. Mr. Salibello
may be considered an "interested person" of the Fund as a result of being a
partner in an accounting firm that provides professional services to
affiliates of the Adviser.
(4) 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.
(5) Trustees who are not interested persons are considered "Independent"
Trustees.
19
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
INCOME TAX INFORMATION (UNAUDITED)
DECEMBER 31, 2008
CASH DIVIDENDS AND DISTRIBUTIONS
TOTAL AMOUNT ORDINARY LONG-TERM DIVIDEND
PAYABLE RECORD PAID INVESTMENT CAPITAL RETURN OF REINVESTMENT
DATE DATE PER SHARE INCOME GAINS CAPITAL (a) PRICE
-------- -------- ------------ ---------- --------- ----------- ------------
COMMON STOCK
01/25/08 01/16/08 $0.14000 $0.00980 $0.03270 $0.09750 $27.73050
02/25/08 02/14/08 0.14000 0.00980 0.03270 0.09750 --
03/25/08 03/17/08 0.14000 0.00980 0.03270 0.09750 --
04/24/08 04/16/08 0.14000 0.00980 0.03270 0.09750 --
05/23/08 05/15/08 0.14000 0.00980 0.03270 0.09750 --
06/24/08 06/16/08 0.14000 0.00980 0.03270 0.09750 --
07/25/08 07/17/09 0.14000 0.00980 0.03270 0.09750 --
08/25/08 08/15/08 0.14000 0.00980 0.03270 0.09750 --
09/24/08 09/16/08 0.14000 0.00980 0.03270 0.09750 21.13750
10/27/08 10/17/08 0.14000 0.00980 0.03270 0.09750 8.59750
11/21/08 11/13/08 0.14000 0.00980 0.03270 0.09750 9.40500
12/17/08 12/12/08 0.14000 0.00980 0.03270 0.09750 13.53750
-------- -------- -------- --------
$1.68000 $0.11760 $0.39240 $1.17000
6.625% SERIES A CUMULATIVE PREFERRED SHARES
03/26/08 03/18/08 $0.41406 $0.09570 $0.31836
06/26/08 06/19/08 0.41406 0.09570 0.31836
09/26/08 09/19/08 0.41406 0.09570 0.31836
12/26/08 12/18/08 0.41406 0.09570 0.31836
-------- -------- --------
$1.65624 $0.38280 $1.27344
A Form 1099-DIV has been mailed to all shareholders of record which sets
forth specific amounts to be included in your 2008 tax returns. Ordinary income
distributions include net investment income and realized net short-term capital
gains. Ordinary income is reported in box 1a of Form 1099-DIV. Capital gain
distributions are reported in box 2a of Form 1099-DIV.
The long-term gain distributions for the fiscal year ended December 31,
2008 were $12,201,200, or the maximum allowable.
CORPORATE DIVIDENDS RECEIVED DEDUCTION, QUALIFIED DIVIDEND INCOME, AND U.S.
GOVERNMENT SECURITIES INCOME
In 2008, the Fund paid to common and 6.625% Series A Cumulative Preferred
shareholders ordinary income dividends of $0.11760 and $0.38281 per share,
respectively. For 2008, 2.70% of the ordinary dividend qualified for the
dividend received deduction available to corporations, and 1.72% of the ordinary
income distribution was deemed qualified dividend income that is reported in box
1b on Form 1099-DIV. The percentage of ordinary income dividends paid by the
Fund during 2008 derived from U.S. Government securities was 0.05%. Such income
is exempt from state and local taxes 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 its fiscal year in U.S. Government securities. The
Fund did not meet this strict requirement in 2008. The percentage of net assets
of U.S. Government securities held as of December 31, 2008 was 14.8%.
HISTORICAL DISTRIBUTION SUMMARY
SHORT-TERM LONG-TERM ADJUSTMENT
INVESTMENT CAPITAL CAPITAL RETURN OF TOTAL TO COST
INCOME (b) GAINS (b) GAINS CAPITAL (a) DISTRIBUTIONS (c) BASIS
---------- ---------- --------- ----------- ----------------- ----------
COMMON STOCK
2008 ... $0.11760 -- $0.39240 $1.17000 $1.68000 $1.1700
2007 ... 0.14980 $0.98430 0.79590 -- 1.93000 --
2006 ... -- 1.45430 0.28570 -- 1.74000 --
2005 ... 0.08460 1.07540 -- -- 1.16000 --
6.625% SERIES A CUMULATIVE PREFERRED SHARES
2008 ... $0.38281 -- $1.27344 -- $1.65625 --
2007 ... 0.01987 $0.09151 0.21527 -- 0.32665 --
----------
(a) Non-taxable.
(b) Taxable as ordinary income for Federal tax purposes.
(c) Total amounts may differ due to rounding.
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.
The Annual Meeting of The Gabelli Global Gold, Natural Resources & Income
Trust's shareholders will be held on Monday, May 18, 2009 at the Greenwich
Library in Greenwich, Connecticut.
20
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Global Gold, Natural Resources & Income
Trust (the "Fund") to automatically reinvest dividends payable to common
shareholders. As a "registered" shareholder you automatically become a
participant in the Fund's Automatic Dividend Reinvestment Plan (the "Plan"). The
Plan authorizes the Fund to credit common shares 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
shareholders 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 share certificates to American Stock Transfer
("AST") to be held in their dividend reinvestment account. Registered
shareholders wishing to receive their distributions in cash must submit this
request in writing to:
The Gabelli Global Gold, Natural Resources & Income Trust
c/o American Stock Transfer
6201 15th Avenue
Brooklyn, NY 11219
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan, may contact AST at (888) 422-3262.
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 reregistered in your own name.
Once registered in your own name your distributions will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of common shares 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 shares 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 common shares 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 shares. The valuation date is the dividend or distribution
payment date or, if that date is not a NYSE Alternext US trading day, the next
trading day. If the net asset value of the common shares at the time of
valuation exceeds the market price of the common shares, participants will
receive common shares from the Fund valued at market price. If the Fund should
declare a dividend or capital gains distribution payable only in cash, AST will
buy common shares in the open market, or on the NYSE Alternext US, or elsewhere,
for the participants' accounts, except that AST 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 shares 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.
21
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Fund. In order to participate
in the Voluntary Cash Purchase Plan, shareholders 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 AST for investments in the Fund's common shares at
the then current market price. Shareholders may send an amount from $250 to
$10,000. AST will use these funds to purchase shares in the open market on or
about the 1st and 15th of each month. AST will charge each shareholder who
participates a pro rata share of the brokerage commissions. Brokerage charges
for such purchases are expected to be less than the usual brokerage charge for
such transactions. It is suggested that any voluntary cash payments be sent to
American Stock Transfer, 6201 15th Avenue, Brooklyn, NY 11219 such that AST
receives such payments approximately 10 days before the investment date. Funds
not received at least five days before the investment date shall be held for
investment until the next purchase date. A payment may be withdrawn without
charge if notice is received by AST at least 48 hours before such payment is to
be invested.
SHAREHOLDERS WISHING TO LIQUIDATE SHARES HELD AT AST must do so in writing
or by telephone. Please submit your request to the above mentioned address or
telephone number. Include in your request your name, address, and account
number. The cost to liquidate shares is $1.00 per transaction as well as the
brokerage commission incurred. Brokerage charges are expected to be less than
the usual brokerage charge for such transactions.
For more information regarding the Automatic Dividend Reinvestment Plan and
Voluntary Cash Purchase Plan, brochures are 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 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by AST on at least 90 days written notice to
participants in the Plan.
22
[GRAPHIC]
TRUSTEES AND OFFICERS
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES
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.
Mario d'Urso
FORMER ITALIAN SENATOR
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT &
CHIEF FINANCIAL OFFICER,
KEYSPAN CORP.
Frank J. Fahrenkopf, Jr.
PRESIDENT & CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION
Michael J. Melarkey
ATTORNEY-AT-LAW,
AVANSINO, MELARKEY, KNOBEL & MULLIGAN
Salvatore M. Salibello
CERTIFIED PUBLIC ACCOUNTANT,
SALIBELLO & BRODER, LLP
Anthonie C. van Ekris
CHAIRMAN, BALMAC INTERNATIONAL, INC.
Salvatore J. Zizza
CHAIRMAN, ZIZZA & CO., LTD.
OFFICERS
Bruce N. Alpert
PRESIDENT
Carter W. Austin
VICE PRESIDENT
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
Molly A.F. Marion
ASSISTANT VICE PRESIDENT & OMBUDSMAN
Agnes Mullady
TREASURER AND SECRETARY
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
The Bank of New York Mellon
COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
TRANSFER AGENT AND REGISTRAR
American Stock Transfer and Trust Company
STOCK EXCHANGE LISTING
6.625%
Common Preferred
---------- ---------
NYSE Alternext US-Symbol: GGN GGN PrA
Shares Outstanding: 18,303,157 3,957,475
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 ww.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 7.5% or more from the net asset value of the shares. The Fund may
also, from time to time, purchase its Series A Cumulative Preferred Shares in
the open market when the preferred shares are trading at a discount to the
liquidation value of $25.00.
THE GABELLI GLOBAL GOLD,
NATURAL RESOURCES & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
PHONE: 800-GABELLI (800-422-3554)
FAX: 914-921-5118 INTERNET: WWW.GABELLI.COM
E-MAIL: CLOSEDEND@GABELLI.COM GGN Q4/2008
ITEM 2. CODE OF ETHICS.
(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
Trustees has determined that Salvatore J. Zizza 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
$127,750 for 2007 and $61,500 for 2008.
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
2007 and $6,939 for 2008. Audit-related fees represent services
provided in the preparation of Preferred Shares Reports.
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 $4,350 for 2007 and
$6,000 for 2008. 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 2007 and $0 for 2008.
(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:
(b) N/A
(c) 100%
(d) N/A
(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 zero percent (0%).
(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 2007 and $0 for 2008.
(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.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated audit committee consisting of the
following members: Vincent D. Enright, Frank J. Fahrenkopf, Jr. and Salvatore J.
Zizza.
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.
The Proxy Voting Policies are attached herewith.
THE VOTING OF PROXIES ON BEHALF OF CLIENTS
Rules 204(4)-2 and 204-2 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 Securities, 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 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, recommendations of Institutional Shareholder Corporate Governance
Service ("ISS"), other third-party services and the analysts of Gabelli &
Company, Inc., 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.
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 ISS or other third party services and the
analysts of Gabelli & Company, Inc., 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.
1
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, as
well as the recommendations of ISS, other third-party services
and the analysts of Gabelli & Company, 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, any relevant third party research, a summary
of any views provided by the Chief Investment Officer and any
recommendations by Gabelli & Company, Inc. analysts. The Chief
Investment Officer or the Gabelli & Company, Inc. 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 will provide an opinion to the Committee
concerning the conflict. If the matter is one in which the
interests of the clients of one or more of Advisers may
diverge, counsel will so advise and the Committee may make
different recommendations as to different clients. For any
matters where the recommendation may trigger appraisal rights,
counsel will provide an opinion concerning the likely risks
and merits of such an appraisal action.
2
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. Written minutes of all
Proxy Voting Committee meetings will be maintained. The Advisers subscribe to
ISS, which supplies current information on companies, matters being voted on,
regulations, trends in proxy voting and information on corporate governance
issues.
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 will 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 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 will abstain with respect to those shares.
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
- Legal Department
- Proxy Department
- Investment professional assigned to the account
3
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 including recommendations
of ISS or other third-party services.
IV. VOTING RECORDS
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
an account voted its proxies upon request.
A letter is sent to the custodians for all clients for which the
Advisers have voting responsibility instructing them to forward all proxy
materials to:
[Adviser name]
Attn: Proxy Voting Department
One Corporate Center
Rye, New York 10580-1433
The sales assistant sends the letters to the custodians along with the
trading/DTC instructions. Proxy voting records will be retained in compliance
with Rule 204-2 under the Investment Advisers Act.
V. VOTING PROCEDURES
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:
o Shareholder Vote Authorization Forms ("VAFs") - Issued by Broadridge
Financial Solutions, Inc. ("Broadridge") VAFs must be voted through the
issuing institution causing a time lag. Broadridge is an outside service
contracted by the various institutions to issue proxy materials.
o 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 according to security.
3. In the case of a discrepancy such as an incorrect number of shares, an
improperly signed or dated card, wrong class of security, etc., the issuing
custodian is notified by phone. A corrected proxy is requested. Any arrangements
are made to insure that a proper proxy is received in time to be voted
(overnight delivery, fax, etc.). When securities are out on loan on record date,
the custodian is requested to supply written verification.
4
4. Upon receipt of instructions from the proxy committee (see Administrative),
the votes are cast and recorded for each account on an individual basis.
Records have been maintained on the Proxy Edge system. The system is backed up
regularly.
Proxy Edge records include:
Security Name and Cusip Number
Date and Type of Meeting (Annual, Special, Contest)
Client Name
Adviser or Fund Account Number
Directors' Recommendation
How GAMCO voted for the client on each issue
5. VAFs 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.
6. Shareholder Vote Authorization Forms issued by Broadridge are always sent
directly to a specific individual at Broadridge.
7. If a proxy card or VAF is received too late to be voted in the conventional
matter, every attempt is made to vote on one of the following manners:
o VAFs can be faxed to Broadridge up until the time of the meeting. This is
followed up by mailing the original form.
o When a solicitor has been retained, the solicitor is called. At the
solicitor's direction, the proxy is faxed.
8. In the case of a proxy contest, records are maintained for each opposing
entity.
9. 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:
o Banks and brokerage firms using the services at Broadridge:
The back of the VAF is stamped indicating that we wish to vote in person.
The forms are then sent overnight to Broadridge. Broadridge issues individual
legal proxies and sends them back via 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.
5
o 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 following supplemental material:
o A limited Power of Attorney appointing the attendee an Adviser
representative.
o A list of all shares being voted by custodian only. Client names and
account numbers are not included. This list must be presented, along with
the proxies, to the Inspectors of Elections and/or tabulator at least
one-half hour prior to the scheduled start of the meeting. The tabulator
must "qualify" the votes (i.e. determine if the vote have previously been
cast, if the votes have been rescinded, etc. vote have previously been
cast, etc.).
o A sample ERISA and Individual contract.
o A sample of the annual authorization to vote proxies form.
o A copy of our most recent Schedule 13D filing (if applicable).
6
APPENDIX A
PROXY GUIDELINES
PROXY VOTING GUIDELINES
GENERAL POLICY STATEMENT
It is the policy of GAMCO INVESTORS, INC. 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.
7
BOARD OF DIRECTORS
The advisers 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:
o Historical responsiveness to shareholders
This may include such areas as:
-Paying greenmail
-Failure to adopt shareholder resolutions receiving a majority of
shareholder votes
o Qualifications
o Nominating committee in place
o Number of outside directors on the board
o Attendance at meetings
o Overall performance
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.
8
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:
o 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
o Amount of stock currently authorized but not yet issued or reserved for
stock option plans
o 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.
9
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.
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.
10
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.
NOTE: CONGRESS HAS IMPOSED A TAX ON ANY PARACHUTE THAT IS MORE THAN THREE TIMES
THE EXECUTIVE'S AVERAGE ANNUAL COMPENSATION.
ANTI-GREENMAIL PROPOSALS
We do not support greenmail. An offer extended to one shareholder should be
extended to all shareholders equally across the board.
LIMIT SHAREHOLDERS' RIGHTS TO CALL SPECIAL MEETINGS
We support the right of shareholders to call a special meeting.
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.
11
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.
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.
12
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:
o State of Incorporation
o Management history of responsiveness to shareholders
o 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 OPTION PLANS
Stock option plans are an excellent way to attract, hold and motivate directors
and employees. However, each stock option plan must be evaluated on its own
merits, taking into consideration the following:
o Dilution of voting power or earnings per share by more than 10%
o Kind of stock to be awarded, to whom, when and how much
o Method of payment
o Amount of stock already authorized but not yet issued under existing stock
option plans
13
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.
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.
14
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
PORTFOLIO MANAGERS
A portfolio team manages The Gabelli Global Gold, Natural Resources & Income
Trust., (the Fund). The individuals listed below are those who are primarily
responsible for the day-to-day management of the Fund.
Caesar M. P. Bryan serves as the Gold Companies Portfolio Manager for the Fund
and is primarily responsible for the day-to-day management of the Gold Companies
portion of the Fund's portfolio. Mr. Bryan is a Senior Vice President and
Portfolio Manager with GAMCO Asset Management Inc. (a wholly owned subsidiary of
GAMCO Investors, Inc.) since 1994.
Barbara G. Marcin is primarily responsible for the day-to-day management of the
Natural Resources Companies portion of the Fund's portfolio.
Barbara G. Marcin serves as a Portfolio Manager for the Fund. Ms. Marcin joined
GAMCO Investors, Inc. in 1999 to manage larger capitalization value style
portfolios.
Vincent Hugonnard-Roche serves as a Portfolio Manager for the Fund and is
primarily responsible for the day-to-day management of the covered call portion
of the Fund's portfolio. Mr. Roche joined GAMCO Investors, Inc. in 2000 as
Director of Quantitative Strategies and Head of Risk Management.
MANAGEMENT OF OTHER ACCOUNTS
The table below shows the number of other accounts managed by each Portfolio
Manager and the total assets in each of the following categories: registered
investment companies, other paid investment vehicles and other accounts. 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.
Total Assets
No. of Accounts in Accounts
Total where Advisory where Advisory
Name of Portfolio Manager or No. of Accounts Fee is Based on Fee is Based
Team Member Type of Accounts Managed Total Assets Performance on Performance
---------------------------- ---------------- --------------- ------------ --------------- --------------
1. Caesar M. P. Bryan Registered 4 1.5B 1 1.1B
Investment
Companies:
Other Pooled 2 6.0M 2 6.0M
Investment
Vehicles.
Other Accounts: 5 33.5M 0 0
2. Barbara G. Marcin Registered 3 1.5B 1 1.5B
Investment
Companies:
Other Pooled 1 5.4M 1 5.4M
Investment
Vehicles:
Other Accounts: 20 79M 0 0
3. Vincent Hugonnard-Roche Registered 0 0 0 0
Investment
Companies:
Other Pooled 1 13.8M 0 0
Investment
Vehicles:
Other Accounts: 0 0 0 0
POTENTIAL CONFLICTS OF INTEREST
As reflected above, the Portfolio Managers manage accounts in addition to the
Fund. 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. As indicated above, the Portfolio
Managers manage multiple accounts. As a result, he/she will not be able to
devote all of their time to the management of the Fund. A Portfolio Manager,
therefore, 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 he/she were to devote all of his/her attention to the management
of only the Fund.
ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES. As indicated above, the
Portfolio Managers manage accounts with investment strategies and/or policies
that are similar to the Fund. In these cases, if the Portfolio Manager
identifies 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. In addition, in the event a Portfolio Manager determines to purchase
a security for more than one account in an aggregate amount that may influence
the market price of the security, accounts that purchased or sold the security
first may receive a more favorable price than accounts that made subsequent
transactions.
PURSUIT OF DIFFERING STRATEGIES. At times, a Portfolio Manager may determine
that an investment opportunity may be appropriate for only some of the accounts
for which he/she exercises investment responsibility, or may decide that certain
of the funds or accounts should take differing positions with respect to a
particular security. In these cases, the Portfolio Manager 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 other 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 he or she manages. 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 Manager may be motivated to favor certain accounts over others. The
Portfolio Manager may also be motivated to favor accounts in which he or she has
an investment interest, or in which the Adviser, or their affiliates have
investment interests. Similarly, the desire to maintain assets under management
or to enhance a Portfolio Manager's performance record or to derive other
rewards, financial or otherwise, could influence the Portfolio Manager in
affording preferential treatment to those accounts that could most significantly
benefit the Portfolio Manager. For example, as reflected above, if a Portfolio
Manager manages accounts, which have performance fee arrangements, certain
portions of their compensation will depend on the achievement of performance
milestones on those accounts. The Portfolio Manager could be incented to afford
preferential treatment to those accounts and thereby by subject to a potential
conflict of interest.
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 THE PORTFOLIO MANAGERS OF THE ADVISER
The compensation of the Portfolio Managers for the Fund is structured 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 stock options, and incentive based variable compensation based on
a percentage of net revenue received by the Adviser for managing the 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 Portfolio Managers' compensation) allocable to
the 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, GBL, 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
Caesar M. P. Bryan, Barbara G. Marcin, and Vincent Hugonnard-Roche owned $0 -
$10,000; $10,001 - $50,000 and $0 - $10,000 respectively, of shares of the Trust
as of December 31, 2008.
(b) Not applicable.
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 - 18,117,515
07/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 4,000,000
07/31/08
Month #2 Common - N/A Common - N/A Common - N/A Common - 18,117,515
08/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 4,000,000
08/31/08
Month #3 Common - N/A Common - N/A Common - N/A Common - 18,143,275
09/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 4,000,000
09/30/08
Month #4 Common - N/A Common - N/A Common - N/A Common - 18,207,309
10/01/08
through Preferred Series A - Preferred Series A - Preferred Series A - Preferred Series A - 4,000,000
10/31/08 14,551 $21.3950 14,551 - 14,551 = 3,985,449
Month #5 Common - N/A Common - N/A Common - N/A Common - 18,264,265
11/01/08
through Preferred Series A - Preferred Series A - Preferred Series A - Preferred Series A - 3,985,449
11/30/08 13,219 $21.4073 13,219 - 13,219 = 3,972,230
Month #6 Common - N/A Common - N/A Common - N/A Common - 18,303,157
12/01/08
through Preferred Series A - Preferred Series A - Preferred Series A - Preferred Series A - 3,972,230
12/31/08 14,755 $22.1500 14,755 - 14,755 = 3,957,475
Total Common - N/A Common - N/A Common - N/A N/A
Preferred Series A - Preferred Series A - Preferred Series A -
42,525 $21.7122 42,525
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 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 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) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(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 Global Gold, Natural Resources & Income Trust
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By (Signature and Title)* /s/ Bruce N. Alpert
----------------------------------------
Bruce N. Alpert, Principal Executive
Officer
Date 3/9/09
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/ Bruce N. Alpert
----------------------------------------
Bruce N. Alpert, Principal Executive
Officer
Date 3/9/09
By (Signature and Title)* /s/ Agnes Mullady
----------------------------------------
Agnes Mullady, Principal Financial
Officer and Treasurer
Date 3/9/09
* Print the name and title of each signing officer under his or her signature.