Gabelli Utility Trust

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number             811-09243                

 

  The Gabelli Utility 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:  September 30, 2013

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q 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 the 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. § 3507.


Item 1. Schedule of Investments.

The Schedule(s) of Investments is attached herewith.


The Gabelli Utility Trust

Third Quarter Report — September 30, 2013

   LOGO

To Our Shareholders,

For the quarter ended September 30, 2013, the net asset value (“NAV”) total return of The Gabelli Utility Trust (the “Fund”) was 3.1%. The total return for the Standard & Poor’s (“S&P”) 500 Utilities Index was 0.2%. The total return for the Fund’s publicly traded shares was 0.04%. The Fund’s NAV per share was $5.75, while the price of the publicly traded shares closed at $6.35 on the New York Stock Exchange (“NYSE”). See below for additional performance information.

Enclosed is the schedule of investments as of September 30, 2013.

Comparative Results

 

Average Annual Returns through September 30, 2013 (a) (Unaudited)             Since  
              Inception  
     Quarter      1 Year      5 Year      10 Year      (07/09/99)  

Gabelli Utility Trust

              

NAV Total Return (b)

     3.13%         11.05%         11.82%         10.22%         8.99%    

Investment Total Return (c)

     0.04            (13.99)           3.14            7.24            7.98       

S&P 500 Utilities Index

     0.19            6.99            7.06            9.76            5.08(d)   

Lipper Utility Fund Average

     3.07            13.19            9.39            10.92            5.66       

S&P 500 Index

     5.24            19.34            10.02            7.57            3.35       
  (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 redeemed, 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 S&P 500 Utilities Index is an unmanaged market capitalization weighted index of large capitalization stocks that may include facilities generation and transmission or distribution of electricity, gas, or water. The Lipper Utility Fund Average reflects the average performance of mutual funds classified in this particular category. The S&P 500 Index is an unmanaged indicator of stock market performance. Dividends are considered reinvested. You cannot invest directly in an index.

 
  (b)

Total returns and average annual returns reflect changes in the NAV per share, reinvestment of distributions at NAV on the ex-dividend date, and adjustments for rights offerings and are net of expenses. Since inception return is based on an initial NAV of $7.50.

 
  (c)

Total returns and average annual returns reflect changes in closing market values on the NYSE, reinvestment of distributions, and adjustments for rights offerings. Since inception return is based on an initial offering price of $7.50.

 
  (d)

From June 30, 1999, the date closest to the Fund’s inception for which data is available.

 

 


The Gabelli Utility Trust

Schedule of Investments — September 30, 2013 (Unaudited)

 

 

 

Shares

       

Market

 Value

 
 

COMMON STOCKS — 87.7%

 
 

ENERGY AND UTILITIES — 72.8%

 
 

Energy and Utilities: Alternative Energy — 0.1%

  

  6,000     

Ormat Industries Ltd.†

  $ 39,159   
  12,000     

Ormat Technologies Inc.

    321,240   
  8,100     

Renegy Holdings Inc.†

    648   
   

 

 

 
      361,047   
   

 

 

 
 

Energy and Utilities: Electric Integrated — 38.7%

  

  23,000     

ALLETE Inc.

    1,110,900   
  72,000     

Alliant Energy Corp.

    3,567,600   
  17,000     

Ameren Corp.

    592,280   
  75,000     

American Electric Power Co. Inc.

    3,251,250   
  10,000     

Avista Corp.

    264,000   
  50,000     

Black Hills Corp.

    2,493,000   
  27,000     

Cleco Corp.

    1,210,680   
  110,000     

CMS Energy Corp.

    2,895,200   
  29,000     

Dominion Resources Inc.

    1,811,920   
  23,000     

DTE Energy Co.

    1,517,540   
  105,000     

Duke Energy Corp.

    7,011,900   
  80,000     

Edison International

    3,684,800   
  170,000     

El Paso Electric Co.

    5,678,000   
  1,000     

Emera Inc.

    28,921   
  3,000     

Entergy Corp.

    189,570   
  98,000     

FirstEnergy Corp.

    3,572,100   
  178,000     

Great Plains Energy Inc.

    3,951,600   
  52,000     

Hawaiian Electric Industries Inc.

    1,305,200   
  89,000     

Integrys Energy Group Inc.

    4,974,210   
  63,000     

MGE Energy Inc.

    3,436,650   
  95,000     

NextEra Energy Inc.

    7,615,200   
  48,000     

NiSource Inc.

    1,482,720   
  105,000     

NorthWestern Corp.

    4,716,600   
  35,000     

NV Energy Inc.

    826,350   
  196,000     

OGE Energy Corp.

    7,073,640   
  30,000     

Otter Tail Corp.

    828,000   
  48,000     

PG&E Corp.

    1,964,160   
  100,000     

PNM Resources Inc.

    2,263,000   
  38,000     

Public Service Enterprise Group Inc.

    1,251,340   
  56,000     

SCANA Corp.

    2,578,240   
  101,000     

TECO Energy Inc.

    1,670,540   
  25,000     

The Empire District Electric Co.

    541,500   
  16,500     

Unitil Corp.

    482,955   
  133,000     

UNS Energy Corp.

    6,200,460   
  47,000     

Vectren Corp.

    1,567,450   
  227,000     

Westar Energy Inc.

    6,957,550   
  172,000     

Wisconsin Energy Corp.

    6,945,360   
  175,000     

Xcel Energy Inc.

    4,831,750   
   

 

 

 
      112,344,136   
   

 

 

 
 

Energy and Utilities: Electric Transmission and Distribution — 7.5%

   

  243     

Brookfield Infrastructure Partners LP

    9,239   
  58,000     

Consolidated Edison Inc.

    3,198,120   

 

Shares

       

Market
 Value

 
  125,000     

Exelon Corp.

  $ 3,705,000   
  317,000     

Northeast Utilities(a)

    13,076,250   
  22,500     

Pepco Holdings Inc.

    415,350   
  36,666     

UIL Holdings Corp.

    1,363,242   
   

 

 

 
      21,767,201   
   

 

 

 
 

Energy and Utilities: Global Utilities — 3.2%

  

  14,500     

Areva SA†

    263,643   
  8,000     

Chubu Electric Power Co. Inc.

    109,548   
  134,000     

Electric Power Development Co. Ltd.

    4,362,379   
  27,000     

Endesa SA†

    703,327   
  300,000     

Enel SpA

    1,149,382   
  490,000     

Hera SpA

    987,716   
  11,000     

Hokkaido Electric Power Co. Inc.†

    148,054   
  8,000     

Hokuriku Electric Power Co.

    116,710   
  3,000     

Huaneng Power International Inc., ADR

    120,150   
  41,000     

Korea Electric Power Corp., ADR†

    575,640   
  13,000     

Kyushu Electric Power Co. Inc.†

    185,289   
  3,000     

Niko Resources Ltd.†

    11,009   
  8,000     

Shikoku Electric Power Co. Inc.†

    135,673   
  8,000     

The Chugoku Electric Power Co. Inc.

    126,965   
  15,000     

The Kansai Electric Power Co. Inc.†

    192,278   
  13,000     

Tohoku Electric Power Co. Inc.†

    159,499   
   

 

 

 
      9,347,262   
   

 

 

 
 

Energy and Utilities: Merchant Energy — 1.5%

  

  300,000     

GenOn Energy Inc., Escrow†

    0   
  320,000     

The AES Corp.(a)

    4,252,800   
   

 

 

 
      4,252,800   
   

 

 

 
 

Energy and Utilities: Natural Gas Integrated — 7.8%

  

  1,000     

Devon Energy Corp.

    57,760   
  110,000     

Kinder Morgan Inc.

    3,912,700   
  132,000     

National Fuel Gas Co.

    9,076,320   
  180,000     

ONEOK Inc.

    9,597,600   
   

 

 

 
      22,644,380   
   

 

 

 
 

Energy and Utilities: Natural Gas Utilities — 7.1%

  

  92,000     

AGL Resources Inc.

    4,234,760   
  28,000     

Atmos Energy Corp.

    1,192,520   
  20,000     

Chesapeake Utilities Corp.

    1,049,800   
  12,000     

CONSOL Energy Inc.

    403,800   
  25,219     

Corning Natural Gas Corp.

    437,550   
  59,600     

Delta Natural Gas Co. Inc.

    1,316,564   
  11,445     

GDF Suez

    287,526   
  35,000     

Piedmont Natural Gas Co. Inc.

    1,150,800   
  12,000     

RGC Resources Inc.

    221,160   
  127,000     

Southwest Gas Corp.

    6,350,000   
  112,000     

Spectra Energy Corp.

    3,833,760   
  3,000     

The Laclede Group Inc.

    135,000   
   

 

 

 
      20,613,240   
   

 

 

 
 

Energy and Utilities: Natural Resources — 1.3%

  

  5,000     

Anadarko Petroleum Corp.

    464,950   
 

 

See accompanying notes to schedule of investments.

 

2


The Gabelli Utility Trust

Schedule of Investments (Continued) — September 30, 2013 (Unaudited)

 

 

 

Shares

        

Market
 Value

 
 

COMMON STOCKS (Continued)

  
 

ENERGY AND UTILITIES (Continued)

  
 

Energy and Utilities: Natural Resources (Continued)

  
  8,000     

Atlas Resource Partners LP

   $ 167,520   
  32,000     

Compania de Minas Buenaventura SA, ADR

     374,720   
  10,000     

Exxon Mobil Corp.

     860,400   
  2,000     

Hess Corp.

     154,680   
  96,093     

Peabody Energy Corp.

     1,657,604   
  4,000     

Royal Dutch Shell plc, Cl. A, ADR

     262,720   
    

 

 

 
       3,942,594   
    

 

 

 
 

Energy and Utilities: Services — 0.9%

  
  25,000     

ABB Ltd., ADR

     589,750   
  240,000     

Invensys plc

     1,934,920   
    

 

 

 
       2,524,670   
    

 

 

 
 

Energy and Utilities: Water — 3.1%

  
  27,000     

American States Water Co.

     744,120   
  27,000     

American Water Works Co. Inc.

     1,114,560   
  27,291     

Aqua America Inc.

     674,906   
  24,000     

Artesian Resources Corp., Cl. A

     534,000   
  40,000     

California Water Service Group

     812,800   
  7,500     

Connecticut Water Service Inc.

     241,200   
  50,000     

Middlesex Water Co.

     1,069,500   
  50,000     

Severn Trent plc

     1,427,068   
  80,000     

SJW Corp.

     2,241,600   
  9,000     

The York Water Co.

     180,630   
    

 

 

 
       9,040,384   
    

 

 

 
 

Diversified Industrial — 1.1%

  
  1,000     

Alstom SA.

     35,621   
  2,000     

AZZ Inc.

     83,720   
  130,000     

General Electric Co.

     3,105,700   
    

 

 

 
       3,225,041   
    

 

 

 
 

Environmental Services — 0.0%

  
  3,000     

Suez Environnement Co.

     48,662   
    

 

 

 
 

Equipment and Supplies — 0.1%

  
  50,000     

Capstone Turbine Corp.†

     59,000   
  3,000     

Mueller Industries Inc.

     167,010   
    

 

 

 
       226,010   
    

 

 

 
 

Independent Power Producers and Energy Traders — 0.4%

  
  42,802     

NRG Energy Inc.

     1,169,779   
    

 

 

 
 

TOTAL ENERGY AND UTILITIES

     211,507,206   
    

 

 

 
 

COMMUNICATIONS — 13.0%

  
 

Cable and Satellite — 6.3%

  
  12,000     

AMC Networks Inc., Cl. A†

     821,760   
  10,000     

British Sky Broadcasting Group plc

     140,845   
  100,000     

Cablevision Systems Corp., Cl. A

     1,684,000   
  200     

Charter Communications Inc., Cl. A†

     26,952   
  5,000     

Cogeco Cable Inc.

     235,134   

Shares

        

Market
 Value

 
  20,000     

Cogeco Inc.

   $ 893,161   
  30,000     

DIRECTV†

     1,792,500   
  59,000     

DISH Network Corp., Cl. A

     2,655,590   
  10,000     

EchoStar Corp., Cl. A†

     439,400   
  22,582     

Liberty Global plc, Cl. A†

     1,791,882   
  21,928     

Liberty Global plc, Cl. C†

     1,654,029   
  8,000     

Rogers Communications Inc., Cl. B

     344,080   
  100,900     

Telenet Group Holding NV

     5,023,979   
  8,000     

Time Warner Cable Inc.

     892,800   
    

 

 

 
       18,396,112   
    

 

 

 
 

Communications Equipment — 0.2%

  
  230,000     

Furukawa Electric Co. Ltd.

     528,816   
  1,000     

QUALCOMM Inc.

     67,360   
    

 

 

 
       596,176   
    

 

 

 
 

Telecommunications — 4.0%

  
  40,000     

AT&T Inc.

     1,352,800   
  3,000     

Belgacom SA

     79,751   
  200     

Bell Aliant Inc.

     4,980   
  3,800     

Bell Aliant Inc., OTC(b)

     94,668   
  11,000     

BT Group plc, ADR

     608,300   
  230,000     

Cincinnati Bell Inc.†

     625,600   
  43,000     

Deutsche Telekom AG, ADR

     627,800   
  11,800     

Global Telecom Holding, GDR†(c)

     37,040   
  200     

Hutchison Telecommunications Hong Kong Holdings Ltd.

     87   
  1,000     

Mobistar SA

     17,019   
  18,500     

Nippon Telegraph & Telephone Corp.

     956,102   
  2,000     

Orange SA, ADR

     25,020   
  11,800     

Orascom Telecom Media and Technology Holding SAE, GDR(b)

     4,543   
  24,000     

Portugal Telecom SGPS SA

     108,152   
  2,000     

PT Indosat Tbk

     717   
  3,000     

Sistema JSFC, GDR(c)

     77,970   
  1,200     

Tele2 AB, Cl. B

     15,348   
  10,000     

Telefonica Deutschland Holding AG

     78,939   
  35,000     

Telekom Austria AG

     293,474   
  25,000     

T-Mobile US Inc.

     649,250   
  40,000     

Touch America Holdings Inc.†

     0   
  110,000     

Verizon Communications Inc.

     5,132,600   
  75,000     

VimpelCom Ltd., ADR

     881,250   
    

 

 

 
       11,671,410   
    

 

 

 
 

Wireless Communications — 2.5%

  
  1,200     

America Movil SAB de CV, Cl. L, ADR

     23,772   
  1,000,000     

Cable & Wireless Communications plc

     641,574   
  2,000     

China Mobile Ltd., ADR

     112,860   
  2,000     

China Unicom Hong Kong Ltd., ADR

     30,840   
  171     

M1 Ltd.

     447   
  19,000     

Millicom International Cellular SA, SDR

     1,677,766   
  1,154     

Mobile Telesystems OJSC†

     11,504   
 

 

See accompanying notes to schedule of investments.

 

3


The Gabelli Utility Trust

Schedule of Investments (Continued) — September 30, 2013 (Unaudited)

 

 

 

Shares

         

Market
 Value

 
  

COMMON STOCKS (Continued)

  
  

COMMUNICATIONS (Continued)

  
  

Wireless Communications (Continued)

  
  11,250      

Mobile TeleSystems OJSC, ADR†

   $ 250,425   
  26,000      

NII Holdings Inc.†

     157,820   
  100,000      

NTT DoCoMo Inc.

     1,619,614   
  2,000      

SK Telecom Co. Ltd., ADR

     45,400   
  400      

SmarTone Telecommunications Holdings Ltd.

     530   
  25,000      

Turkcell Iletisim Hizmetleri A/S, ADR†

     368,750   
  36,000      

United States Cellular Corp.

     1,639,080   
  20,000      

Vodafone Group plc, ADR

     703,600   
     

 

 

 
        7,283,982   
     

 

 

 
  

TOTAL COMMUNICATIONS

     37,947,680   
     

 

 

 
  

OTHER — 1.9%

  
  

Aerospace — 0.6%

  
  100,000      

Rolls-Royce Holdings plc

     1,800,227   
     

 

 

 
  

Agriculture — 0.0%

  
  3,000      

Cadiz Inc.†

     15,330   
     

 

 

 
  

Entertainment — 0.6%

  
  70,000      

Vivendi SA

     1,610,366   
     

 

 

 
  

Investment Companies — 0.1%

  
  10,000      

Kinnevik Investment AB, Cl. A

     343,411   
  3,000      

Kinnevik Investment AB, Cl. B

     103,864   
     

 

 

 
        447,275   
     

 

 

 
  

Real Estate — 0.1%

  
  4,500      

Brookfield Asset Management Inc., Cl. A

     168,300   
  258      

Brookfield Property Partners LP

     5,000   
     

 

 

 
        173,300   
     

 

 

 
  

Transportation — 0.5%

  
  30,000      

GATX Corp.

     1,425,600   
     

 

 

 
  

TOTAL OTHER

     5,472,098   
     

 

 

 
  

TOTAL COMMON STOCKS

     254,926,984   
     

 

 

 
  

WARRANTS — 0.4%

  
  

ENERGY AND UTILITIES — 0.4%

  
  

Energy and Utilities: Natural Gas Integrated — 0.4%

  
  211,200      

Kinder Morgan Inc., expire 05/25/17†

     1,049,664   
     

 

 

 
  

COMMUNICATIONS — 0.0%

  
  

Wireless Communications — 0.0%

  
  16,000      

Bharti Airtel Ltd., expire 08/04/16†(b)

     81,421   
     

 

 

 
  

TOTAL WARRANTS

     1,131,085   
     

 

 

 

Principal
Amount

         

Market
 Value

 
  

CONVERTIBLE CORPORATE BONDS — 0.1%

  
  

ENERGY AND UTILITIES — 0.1%

  
  

Environmental Services — 0.1%

  
$ 100,000      

Covanta Holding Corp., Cv.,
3.250%, 06/01/14.

   $ 137,937   
     

 

 

 
  

U.S. GOVERNMENT OBLIGATIONS — 11.8%

  

  34,425,000      

U.S. Treasury Bills,

0.010% to 0.100%††,

10/17/13 to 03/20/14(d)

     34,424,591   
     

 

 

 
  

TOTAL INVESTMENTS — 100.0%
(Cost $209,651,692)

   $ 290,620,597   
     

 

 

 
  

Aggregate tax cost.

   $ 210,701,531   
     

 

 

 
  

Gross unrealized appreciation

   $ 86,425,349   
  

Gross unrealized depreciation

     (6,506,283
     

 

 

 
  

Net unrealized appreciation/depreciation

   $ 79,919,066   
     

 

 

 

 

Notional
Amount

       

Termination

Date

    Unrealized
Depreciation
 
 

EQUITY CONTRACT FOR DIFFERENCE SWAP AGREEMENTS

   

 
$  1,811,958     

Rolls-Royce Holdings plc(e)

    06/27/14      $ (12,601
     

 

 

 

 

(100,000 Shares)

   

 

(a)

Securities, or a portion thereof, with a value of $5,992,500, are reserved and/or pledged with the custodian for current or potential holdings of swaps.

(b)

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2013, the market value of Rule 144A securities amounted to $180,632 or 0.06% of total investments.

 

 

See accompanying notes to schedule of investments.

 

4


The Gabelli Utility Trust

Schedule of Investments (Continued) — September 30, 2013 (Unaudited)

 

 

 

(c)

Security purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2013, the market value of Regulation S securities amounted to $115,010 or 0.04% of total investments, which were valued under methods approved by the Board of Trustees as follows:

 

Acquisition
Shares

   

Issuer

  Acquisition
Date
    Acquisition
Cost
    09/30/13
Carrying
Value
Per Share
 
  11,800     

Global Telecom Holding, GDR

    07/27/09      $ 53,385      $ 3.1390   
  3,000     

Sistema JSFC, GDR

    10/10/07        66,136        25.9900   

 

(d)  

At September 30, 2013, $350,000 of the principal amount was pledged as collateral for the equity contract for difference swap agreements.

(e)  

At September 30, 2013, the Fund had entered into an equity contract for difference swap agreement with The Goldman Sachs Group, Inc.

  Non-income producing security.
††   Represents annualized yield at date of purchase.
ADR   American Depositary Receipt
GDR   Global Depositary Receipt
JSFC   Joint Stock Financial Corporation
OJSC   Open Joint Stock Company
SDR   Swedish Depositary Receipt

 

    

 

 

See accompanying notes to schedule of investments.

 

5


The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited)

 

 

The Fund’s schedule of investments is prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), which may require the use of management estimates and assumptions. 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 schedule of investments.

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 sixty 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 sixty 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. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations.

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 American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.

The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:

 

   

Level 1 — quoted prices in active markets for identical securities;

   

Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and

   

Level 3 — significant unobservable inputs (including the Fund’s determinations as to the fair value of investments).

 

6


The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities and other financial instruments by inputs used to value the Fund’s investments as of September 30, 2013 is as follows:

 

     Valuation Inputs         
     Level 1
Quoted Prices
     Level 2 Other Significant
Observable Inputs
     Level 3 Significant
Unobservable Inputs
     Total Market Value
at 9/30/13
 

INVESTMENTS IN SECURITIES:

           

ASSETS (Market Value):

           

Common Stocks:

           

ENERGY AND UTILITIES

           

Energy and Utilities: Alternative Energy

     $       360,399                 $648         $       361,047   

Energy and Utilities: Merchant Energy

     4,252,800                 0         4,252,800   

Other Industries (a)

     206,893,359                         206,893,359   

COMMUNICATIONS

           

Telecommunications

     11,671,410                 0         11,671,410   

Other Industries (a)

     26,276,270                         26,276,270   

OTHER

           

Other Industries (a)

     5,472,098                         5,472,098   

Total Common Stocks

     254,926,336                 648         254,926,984   

Warrants (a)

     1,049,664         $       81,421                 1,131,085   

Convertible Corporate Bonds (a)

             137,937                 137,937   

U.S. Government Obligations

             34,424,591                 34,424,591   

TOTAL INVESTMENTS IN SECURITIES – ASSETS

     $255,976,000         $34,643,949         $648         $290,620,597   

OTHER FINANCIAL INSTRUMENTS:

           

LIABILITIES (Unrealized Depreciation):*

           

EQUITY CONTRACT:

           

Contract for Difference Swap Agreement

             $    (12,601)                 $      (12,601)   

 

(a)

Please refer to the Schedule of Investments (“SOI”) for the industry classifications of these portfolio holdings.

*

Other financial instruments are derivatives reflected in the SOI, such as futures, forwards, and swaps, which are valued at the unrealized appreciation/depreciation of the instrument.

The Fund did not have transfers between Level 1 and Level 2 during the period ended September 30, 2013. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.

Additional Information to Evaluate Qualitative Information.

General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds is ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.

Fair Valuation. Fair valued securities may be common and preferred equities, warrants, options, rights, and fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are

 

7


The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. Among the factors to be considered to fair value a security are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in such Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.

The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These include back testing the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.

Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing in a number of derivative financial instruments for the purposes of hedging or protecting its exposure to interest rate movements and movements in the securities markets, hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase, or hedging against a specific transaction with respect to either the currency in which the transaction is denominated or another currency. Investing in certain derivative financial instruments, including participation in the options, futures, or swap markets, entails certain execution, liquidity, hedging, tax, and securities, interest, credit, or currency market risks.Losses may arise if the Adviser’s prediction of movements in the direction of the securities, foreign currency, and interest rate markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under a contract, or that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely monitored in order to minimize these risks. Participation in derivative transactions involves investment risks, transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies. The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s ability to pay distributions.

The Fund’s derivative contracts held at September 30, 2013, if any, are not accounted for as hedging instruments under GAAP and are disclosed in the Schedule of Investments together with the related counterparty.

Swap Agreements. The Fund may enter into equity contract for difference swap transactions for the purpose of increasing the income of the Fund. The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In an equity contract for difference swap, a set of future cash flows is 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. Depending on the general state of short term interest rates and the returns on the Fund’s portfolio securities at the time an equity contract for difference 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.

 

8


The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

The Fund has entered into an equity contract for difference swap agreement with The Goldman Sachs Group, Inc. Details of the swap at September 30, 2013 are reflected within the Schedule of Investments and further details are as follows:

 

Notional

Amount

  

Equity Security

Received

  

Interest Rate/

Equity Security Paid

  

Termination

Date

  

Net Unrealized

Depreciation

$1,811,958 (100,000 Shares)

  

Market Value

Appreciation on:

Rolls-Royce Holdings plc

  

One month LIBOR plus 90 bps plus Market Value Depreciation on:

Rolls-Royce Holdings plc

   06/27/14    $(12,601)

Limitations on the Purchase and Sale of Futures Contracts, Certain Options, and Swaps. Subject to the guidelines of the Board, the Fund may engage in “commodity interest” transactions (generally, transactions in futures, certain options, certain currency transactions, and certain types of swaps) only for bona fide hedging or other permissible transactions in accordance with the rules and regulations of the Commodity Futures Trading Commission (“CFTC”). Pursuant to amendments by the CFTC to Rule 4.5 under the Commodity Exchange Act (“CEA”), the Adviser has filed a notice of exemption from registration as a “commodity pool operator” with respect to the Fund. The Fund and the Adviser are therefore not subject to registration or regulation as a commodity pool operator under the CEA. Due to the recent amendments to Rule 4.5 under the CEA, certain trading restrictions are now applicable to the Fund as of January 1, 2013. These trading restrictions permit the Fund to engage in commodity interest transactions that include (i) “bona fide hedging” transactions, as that term is defined and interpreted by the CFTC and its staff, without regard to the percentage of the Fund’s assets committed to margin and options premiums and (ii) non-bona fide hedging transactions, provided that the Fund does not enter into such non-bona fide hedging transactions if, immediately thereafter, either (a) the sum of the amount of initial margin deposits on the Fund’s existing futures positions or swaps positions and option or swaption premiums would exceed 5% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on any such transactions, or (b) the aggregate net notional value of the Fund’s commodity interest transactions would not exceed 100% of the market value of the Fund’s liquidating value, after taking into account unrealized profits and unrealized losses on any such transactions. Therefore, in order to claim the Rule 4.5 exemption, the Fund is limited in its ability to invest in commodity futures, options, and certain types of swaps (including securities futures, broad based stock index futures, and financial futures contracts). As a result, in the future, the Fund will be more limited in its ability to use these instruments than in the past, and these limitations may have a negative impact on the ability of the Adviser to manage the Fund, and on the Fund’s performance.

Foreign Currency Translations. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually


The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments.

Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.

Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

Tax Information. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward for an unlimited period capital losses incurred. As a result of the rule, post-enactment capital losses that are carried forward will retain their character as either short term or long term capital losses rather than being considered all short term as under previous law.

 

10


THE GABELLI UTILITY TRUST

One Corporate Center

Rye, NY 10580-1422

Portfolio Manager Biography

Mario J. Gabelli, CFA, is Chairman and Chief Executive Officer of GAMCO Investors, Inc. that he founded in 1977 and Chief Investment Officer – Value Portfolios of Gabelli Funds, LLC and GAMCO Asset Management Inc. Mr. Gabelli is a summa cum laude graduate of Fordham University and holds an MBA degree from Columbia Business School and Honorary Doctorates from Fordham University and Roger Williams University.

 

 

 

 

We have separated the portfolio manager’s commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager’s commentary is unrestricted. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com.

The Net Asset Value per share appears in the Publicly Traded Funds column, under the heading “Specialized Equity Funds,” in Monday’s The Wall Street Journal. It is also listed in Barron’s Mutual Funds/Closed End Funds section under the heading “Specialized Equity Funds.”

The Net Asset Value per share may be obtained each day by calling (914) 921-5070 or visiting www.gabelli.com.

The NASDAQ symbol for the Net Asset Value is “XGUTX.”

 

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may from time to time purchase its common shares in the open market when the Fund’s shares are trading at a discount of 10% or more from the net asset value of the shares. The Fund may also, from time to time, purchase its preferred shares in the open market when the preferred shares are trading at a discount to the liquidation value.


THE GABELLI UTILITY TRUST

One Corporate Center

Rye, NY 10580-1422

 

t

 

800-GABELLI (800-422-3554)

f

 

914-921-5118

e

 

info@gabelli.com

 

GABELLI.COM

 

 

 

TRUSTEES

Mario J. Gabelli, CFA

Chairman &

Chief Executive Officer,

GAMCO Investors, Inc.

Anthony J. Colavita

President,

Anthony J. Colavita, P.C.

James P. Conn

Former Managing Director &

Chief Investment Officer,

Financial Security Assurance

Holdings Ltd.

Vincent D. Enright

Former Senior Vice President & Chief Financial Officer,

KeySpan Corp.

Frank J. Fahrenkopf, Jr.

Former President &

Chief Executive Officer,

American Gaming Association

John D. Gabelli

Senior Vice President,

G.research, Inc.

Robert J. Morrissey

Partner,

Morrissey, Hawkins & Lynch

Kuni Nakamura

President,

Advanced Polymer, Inc.

Anthony R. Pustorino

Certified Public Accountant,

Professor Emeritus,

Pace University

Salvatore J. Zizza

Chairman,

Zizza & Associates Corp.

OFFICERS

Bruce N. Alpert

President &

Acting Chief Compliance Officer

Agnes Mullady

Treasurer & Secretary

David I. Schachter

Vice President & Ombudsman

INVESTMENT ADVISER

Gabelli Funds, LLC

One Corporate Center

Rye, New York 10580-1422

CUSTODIAN

The Bank of New York Mellon

COUNSEL

Willkie Farr & Gallagher LLP

TRANSFER AGENT AND

REGISTRAR

Computershare Trust Company, N.A.

 

 

 

GUT Q3/2013

LOGO

 


Item 2. 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 last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 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 Utility Trust

 

By (Signature and Title)*

 

/s/ Bruce N. Alpert

 

     Bruce N. Alpert, Principal Executive Officer

 

Date

 

11/20/2013

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

 

11/20/2013

 

By (Signature and Title)*

 

/s/ Agnes Mullady

 

     Agnes Mullady, Principal Financial Officer and Treasurer

 

Date

 

11/20/2013

* Print the name and title of each signing officer under his or her signature.