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: June 30, 2008
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
[GABELLI GLOBAL LOGO]
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
Semi-Annual Report
June 30, 2008
TO OUR SHAREHOLDERS,
The Gabelli Global Gold, Natural Resources & Income Trust's (the "Fund")
net asset value ("NAV") total return was 12.59% during the first half of 2008,
compared with a decline of 5.89% for the Chicago Board Options Exchange ("CBOE")
S&P 500 Buy/Write Index and a gain of 13.12% for the Philadelphia Gold & Silver
Index. The total return for the Fund's publicly traded shares was 5.26% during
the first half of the year. On June 30, 2008, the Fund's NAV per share was
$32.29, while the price of the publicly traded shares closed at $29.80 on the
American Stock Exchange.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2008.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2008 (a)
Since
Year to Inception
Quarter Date 1 Year 3 Year (03/31/05)
------- ------- ------ ------ ----------
GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NAV TOTAL RETURN (b) ................................ 11.75% 12.59% 28.17% 27.13% 26.25%
INVESTMENT TOTAL RETURN (c) ......................... 14.96 5.26 20.72 23.69 21.41
CBOE S&P 500 Buy/Write Index ............................. (2.52) (5.89) (3.33) 5.54 5.21
Philadelphia Gold & Silver Index ......................... 10.75 13.12 44.77 29.38 26.64
Amex Energy Select Sector Index .......................... 19.81 12.38 29.61 27.51 26.69
Lehman Brothers Government/Corporate Bond Index .......... (1.51) 0.98 7.24 3.84 4.62
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE. WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE
INFORMATION AS OF THE MOST RECENT MONTH END PERFORMANCE RETURNS FOR
PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE
FUND BEFORE INVESTING. THE 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 LEHMAN BROTHERS 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 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.
We have separated the portfolio managers' 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 managers' commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
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 June 30, 2008:
LONG POSITIONS
Metals and Mining ................ 60.3%
Energy and Energy Services ....... 39.3%
Exchange Traded Funds ............ 0.4%
-----
100.0%
=====
SHORT POSITIONS
Call Options Written ............. (4.6)%
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS
OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER
ENDED MARCH 31, 2008. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT
www.gabelli.com OR BY CALLING THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S
FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE
REVIEWED AND COPIED AT THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC.
INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY
CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
SHAREHOLDER MEETING - MAY 19, 2008 - FINAL RESULTS
The Gabelli Global Gold, Natural Resources & Income Trust's Annual Meeting
of Shareholders was held on May 19, 2008 at the Greenwich Library in Greenwich,
Connecticut. At that meeting, common and preferred shareholders, voting together
as a single class, elected Frank J. Fahrenkopf, Jr. and Salvatore J. Zizza as
Trustees of the Fund. A total of 20,703,765 votes and 20,710,504 votes were cast
in favor of each Trustee and a total of 243,269 votes and 236,530 votes were
withheld for each Trustee, respectively. In addition, preferred shareholders,
voting as a separate class, elected Anthony J. Colavita and James P. Conn as
Trustees of the Fund. A total of 3,819,820 votes and 3,826,170 votes were cast
in favor of each Trustee and 45,585 votes and 39,235 votes were withheld for
each Trustee, respectively.
Mario d'Urso, Vincent D. Enright, Michael J. Melarkey, Salvatore M.
Salibello, and Anthonie C. van Ekris continue to serve in their capacities as
Trustees of the Fund.
We thank you for your participation and appreciate your continued support.
2
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------- ------------ -------------
COMMON STOCKS -- 99.5%
ENERGY AND ENERGY SERVICES -- 38.8%
60,000 Allis-Chalmers Energy Inc.+ (a) ........... $ 735,402 $ 1,068,000
65,000 Baker Hughes Inc. (a) ..................... 5,120,726 5,677,100
207,400 BJ Services Co. (a) ....................... 5,735,806 6,624,356
1,650,000 Boart Longyear Ltd. ....................... 2,996,370 3,527,364
72,000 BP plc, ADR (a) ........................... 4,848,252 5,009,040
75,000 Chesapeake Energy Corp. (a) ............... 3,550,137 4,947,000
54,600 Chevron Corp. (a) ......................... 3,328,250 5,412,498
307,692 Comanche Energy Inc.+ (b)(c)(d) ........... 1,849,998 1,849,995
65,000 ConocoPhillips (a) ........................ 4,066,891 6,135,350
140,000 Devon Energy Corp. (a) .................... 8,193,549 16,822,400
55,000 Diamond Offshore Drilling Inc. (a) ........ 3,422,679 7,652,700
60,000 Exxon Mobil Corp. (a) ..................... 3,436,926 5,287,800
65,000 Galp Energia SGPS SA, Cl. B ............... 1,545,027 1,449,129
247,000 Halliburton Co. (a) ....................... 6,804,974 13,108,290
195,000 Imperial Oil Ltd. ......................... 7,875,178 10,739,629
186,000 Lamprell plc .............................. 1,324,234 2,130,265
53,700 Marathon Oil Corp. (a) .................... 1,343,863 2,785,419
174,000 Murphy Oil Corp. (a) ...................... 8,655,362 17,060,700
120,000 Nabors Industries Ltd.+ (a) ............... 4,132,517 5,907,600
199,800 Noble Corp. (a) ........................... 7,421,044 12,979,008
440,000 Petroleo Brasileiro SA, ADR (a) ........... 10,427,054 31,165,200
142,300 Rowan Companies Inc. (a) .................. 4,258,908 6,652,525
100,000 Royal Dutch Shell plc, Cl. A .............. 4,226,226 4,109,152
150,000 Saipem SpA ................................ 3,412,319 7,044,904
100,000 Sasol Ltd., ADR (a) ....................... 4,932,653 5,894,000
150,000 StatoilHydro ASA, ADR (a) ................. 4,948,536 5,607,000
305,000 Suncor Energy Inc. (a) .................... 10,773,274 17,726,600
60,000 Technip SA ................................ 4,775,945 5,553,736
117,500 Tesoro Corp. (a) .......................... 3,362,092 2,322,975
10,200 Total SA, ADR (a) ......................... 711,154 869,754
83,000 Transocean Inc.+ (a) ...................... 8,277,688 12,648,370
105,000 Valero Energy Corp. (a) ................... 5,387,990 4,323,900
308,000 Weatherford International Ltd.+ ........... 6,717,416 15,273,720
166,400 Williams Companies Inc. (a) ............... 4,115,558 6,707,584
246,250 XTO Energy Inc. (a) ....................... 8,616,703 16,870,588
------------ -------------
171,330,701 278,943,651
------------ -------------
EXCHANGE TRADED FUNDS -- 0.4%
16,000 ETFS Physical Platinum+ ................... 3,247,794 3,283,520
------------ -------------
METALS AND MINING -- 60.3%
363,000 Agnico-Eagle Mines Ltd. (a) ............... 7,378,439 26,996,310
160,000 Alcoa Inc. (a) ............................ 5,186,544 5,699,200
3,000 Anglo American plc ........................ 190,979 210,696
95,000 Anglo Platinum Ltd. ....................... 14,024,834 15,857,599
138,500 AngloGold Ashanti Ltd., ADR (a) ........... 5,574,638 4,700,690
716,473 Aquila Resources Ltd.+ .................... 2,549,574 11,374,222
1,123,807 Atlas Iron Ltd.+ .......................... 2,235,752 3,964,615
454,000 Barrick Gold Corp. (a) .................... 14,269,675 20,657,000
170,000 BHP Billiton Ltd., ADR (a) ................ 6,283,353 14,482,300
181,900 Companhia Vale do Rio Doce, ADR (a) ....... 2,978,715 6,515,658
480,000 Eldorado Gold Corp.+ ...................... 2,428,554 4,090,615
200,000 Equinox Minerals Ltd.+ .................... 1,037,206 870,844
35,000 Eurasian Natural Resources Corp.+ ......... 579,093 929,290
125,000 Franco-Nevada Corp., Toronto .............. 2,704,483 3,027,852
125,000 Franco-Nevada Corp., Toronto+ (e) ......... 2,461,711 3,027,851
178,200 Freeport-McMoRan Copper & Gold Inc. (a) ... 18,821,958 20,883,258
614,500 Fresnillo plc+ ............................ 6,656,224 5,985,269
200,000 Gold Fields Ltd. .......................... 3,819,747 2,541,507
1,041,800 Gold Fields Ltd., ADR (a) ................. 16,817,484 13,178,770
369,500 Goldcorp Inc. (a) ......................... 4,224,239 17,059,815
377,700 Harmony Gold Mining Co. Ltd., ADR+ (a) .... 4,213,212 4,626,825
728,000 Hochschild Mining plc ..................... 5,449,565 5,673,338
342,500 IAMGOLD Corp. ............................. 3,067,632 2,048,887
773,983 Imdex Ltd. ................................ 1,281,433 1,231,689
470,000 Impala Platinum Holdings Ltd. ............. 10,841,792 18,547,893
715,600 Ivanhoe Mines Ltd., New York+ (a) ......... 5,177,051 7,807,196
50,000 Ivanhoe Mines Ltd., New York+ (b) ......... 337,529 545,500
48,000 Ivanhoe Mines Ltd., Toronto+ .............. 340,092 520,153
850,000 Kagara Ltd. ............................... 4,502,423 3,748,333
100,000 Kazakhmys plc ............................. 3,100,202 3,170,998
349,656 Kingsgate Consolidated Ltd.+ .............. 1,325,683 1,753,089
1,150,000 Kinross Gold Corp.+ (a) ................... 7,682,263 27,151,500
6,483,488 Lihir Gold Ltd.+ .......................... 12,218,692 20,448,716
168,513 Lonmin plc ................................ 10,699,818 10,710,584
285,600 Lundin Mining Corp.+ (a) .................. 2,501,651 1,733,592
1,000,000 Minara Resources Ltd. ..................... 5,975,994 3,115,622
744,307 Newcrest Mining Ltd. ...................... 10,171,211 20,906,492
359,400 Newmont Mining Corp. (a) .................. 14,026,543 18,746,304
1,545,000 Oxiana Ltd. ............................... 4,470,568 3,895,343
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------- ------------ -------------
COMMON STOCKS (CONTINUED)
METALS AND MINING (CONTINUED)
6,580,000 PanAust Ltd.+ ............................. $ 3,680,444 $ 6,434,095
567,300 Randgold Resources Ltd., ADR (a) .......... 9,527,041 26,197,914
30,000 Rio Tinto plc, ADR (a) .................... 12,518,249 14,850,000
75,000 Teck Cominco Ltd., Cl. B .................. 2,523,503 3,616,505
70,000 Vedanta Resources plc ..................... 3,018,983 3,049,297
274,335 Xstrata plc ............................... 19,189,670 21,988,323
1,132,000 Yamana Gold Inc. (a) ...................... 11,841,157 18,723,280
------------ -------------
289,905,603 433,294,829
------------ -------------
TOTAL COMMON STOCKS 464,484,098 715,522,000
------------ -------------
WARRANTS -- 0.1%
ENERGY AND ENERGY SERVICES -- 0.1%
34,091 Comanche Energy Inc., Cl A,
expire 06/13/13+ (b)(c)(d) 93,750 93,750
36,197 Comanche Energy Inc., Cl B,
expire 06/13/13+ (b)(c)(d) 93,750 93,750
82,965 Comanche Energy Inc., Cl C,
expire 06/13/13+ (b)(c)(d) 187,501 187,501
------------ -------------
375,001 375,001
------------ -------------
METALS AND MINING -- 0.0%
62,500 Franco-Nevada Corp.,
expire 03/13/12+ (c)(d)(e) 400,744 230,377
------------ -------------
TOTAL WARRANTS ............................ 775,745 605,378
------------ -------------
PRINCIPAL
AMOUNT
-------------
CORPORATE BONDS -- 0.4%
ENERGY AND ENERGY SERVICES -- 0.4%
$ 3,000,000 Comanche Energy Inc., 12.500%,
06/13/13 (b)(c)(d) ...................... 2,776,148 2,775,000
------------ -------------
TOTAL INVESTMENTS -- 100.0% ............................... $468,035,991 718,902,378
============
CALL OPTIONS WRITTEN
(Premiums received $27,151,229) .......................... (33,195,125)
OTHER ASSETS AND LIABILITIES (NET) ........................ (687,841)
PREFERRED SHARES
(4,000,000 preferred shares outstanding) ................. (100,000,000)
-------------
NET ASSETS -- COMMON STOCK
(18,117,515 common shares outstanding) ................... $ 585,019,412
=============
NET ASSET VALUE PER COMMON SHARE
($585,019,412 / 18,117,515 shares outstanding) ........... $ 32.29
=============
NUMBER OF EXPIRATION DATE/ MARKET
CONTRACTS EXERCISE PRICE VALUE
------------- ---------------- --------------
OPTION CONTRACTS WRITTEN -- (4.6)%
CALL OPTIONS WRITTEN -- (4.6)%
2,000 Agnico-Eagle Mines Ltd. ................... Aug. 08/70 $ 1,600,000
1,374 Agnico-Eagle Mines Ltd. ................... Aug. 08/75 728,220
256 Agnico-Eagle Mines Ltd. ................... Nov. 08/75 240,640
1,570 Alcoa Inc. ................................ Jan. 09/50 164,850
30 Alcoa Inc. ................................ Jan. 10/50 8,415
600 Allis-Chalmers Energy Inc. ................ Jul. 08/15 171,000
385 AngloGold Ashanti Ltd., ADR ............... Jul. 08/40 5,775
500 Baker Hughes Inc. ......................... Jul. 08/90 100,000
150 Baker Hughes Inc. ......................... Aug. 08/90 57,000
2,540 Barrick Gold Corp. ........................ Jul. 08/42.50 723,900
2,000 Barrick Gold Corp. ........................ Jul. 08/45 416,000
1,842 Barrick Gold Corp. ........................ Jul. 08/50 82,890
500 Barrick Gold Corp. ........................ Jul. 08/55 3,750
1,700 BHP Billiton Ltd., ADR .................... Aug. 08/90 595,000
1,280 BJ Services Co. ........................... Jul. 08/30 358,400
794 BJ Services Co. ........................... Jul. 08/35 31,760
500 BP plc, ADR ............................... Jul. 08/75 13,000
220 BP plc, ADR ............................... Aug. 08/75 18,700
750 Chesapeake Energy Corp. ................... Jul. 08/60 517,500
546 Chevron Corp. ............................. Sep. 08/105 133,224
475 Companhia Vale do Rio Doce, ADR ........... Jul. 08/40 8,075
1,144 Companhia Vale do Rio Doce, ADR ........... Aug. 08/38 152,152
200 Companhia Vale do Rio Doce, ADR ........... Sep. 08/45 10,800
200 ConocoPhillips ............................ Jul. 08/95 40,400
450 ConocoPhillips ............................ Aug. 08/90 299,250
500 Devon Energy Corp. ........................ Jul. 08/110 565,000
900 Devon Energy Corp. ........................ Aug. 08/125 459,000
550 Diamond Offshore Drilling Inc. ............ Jul. 08/145 148,500
2,000 Eldorado Gold Corp. (f) ................... Aug. 08/8 220,653
2,800 Eldorado Gold Corp. (f) ................... Aug. 08/9 144,160
300 Exxon Mobil Corp. ......................... Jul. 08/95 4,800
300 Exxon Mobil Corp. ......................... Aug. 08/95 28,800
1,102 Freeport-McMoRan Copper & Gold Inc. ....... Jan. 09/160 479,370
680 Freeport-McMoRan Copper & Gold Inc. ....... Jan. 09/160 295,800
5,000 Gold Fields Ltd., ADR ..................... Jul. 08/12.50 325,000
2,000 Gold Fields Ltd., ADR ..................... Jul. 08/15 10,000
4,918 Gold Fields Ltd., ADR ..................... Jul. 08/17.50 24,590
500 Gold Fields Ltd., ADR ..................... Aug. 08/12.50 47,500
1,000 Goldcorp Inc. ............................. Jul. 08/45 280,000
195 Goldcorp Inc. ............................. Aug. 08/45 72,150
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
NUMBER OF EXPIRATION DATE/ MARKET
CONTRACTS EXERCISE PRICE VALUE
------------- ---------------- --------------
OPTION CONTRACTS WRITTEN (CONTINUED)
CALL OPTIONS WRITTEN (CONTINUED)
2,500 Goldcorp Inc. ............................. Oct. 08/45 $ 1,420,000
200 Halliburton Co. ........................... Jul. 08/42.50 230,000
270 Halliburton Co. ........................... Jul. 08/45 233,550
2,000 Halliburton Co. ........................... Jul. 08/50 730,000
3,500 Harmony Gold Mining Co. Ltd., ADR ......... Aug. 08/12.50 262,500
277 Harmony Gold Mining Co. Ltd., ADR ......... Nov. 08/15 18,005
1,329 IAMGOLD Corp. (f) ......................... Aug. 08/8 16,292
2,096 IAMGOLD Corp. (f) ......................... Nov. 08/7 113,053
2,000 Imperial Oil Ltd. (f) ..................... Aug. 08/60 220,653
2,910 Ivanhoe Mines Ltd. (f) .................... Jul. 08/11 178,361
5,226 Ivanhoe Mines Ltd. (f) .................... Aug. 08/11 550,941
100 Kazakhmys plc (g) ......................... Dec. 08/20 222,089
350 Kingsgate Consolidated Ltd. (h) ........... Aug. 08/5.51 70,461
2,000 Kinross Gold Corp. ........................ Jul. 08/22.50 350,000
1,000 Kinross Gold Corp. ........................ Aug. 08/20 420,000
8,000 Kinross Gold Corp. ........................ Aug. 08/22.50 2,000,000
500 Kinross Gold Corp. ........................ Aug. 08/30 15,000
6,000 Lihir Gold Ltd. (h) ....................... Oct. 08/3.40 1,955,652
1,700 Lundin Mining Corp. ....................... Aug. 08/7.50 25,500
10 Lundin Mining Corp. ....................... Sep. 08/10 100
500 Marathon Oil Corp. ........................ Jul. 08/55 30,000
37 Marathon Oil Corp. ........................ Aug. 08/55 6,660
1,000 Murphy Oil Corp. .......................... Jul. 08/100 260,000
740 Murphy Oil Corp. .......................... Jul. 08/90 658,600
1,200 Nabors Industries Ltd. .................... Jul. 08/42.50 834,000
825 Newcrest Mining Ltd. (h) .................. Oct. 08/34.85 1,578,614
1,344 Newmont Mining Corp. ...................... Jul. 08/50 423,360
2,000 Newmont Mining Corp. ...................... Aug. 08/52.50 580,000
1,998 Noble Corp. ............................... Sep. 08/70 679,320
6,580 PanAust Ltd. (h) .......................... Oct. 08/1.17 331,167
4,000 Petroleo Brasileiro SA, ADR ............... Jul. 08/85 40,000
3,973 Randgold Resources Ltd., ADR .............. Jul. 08/45 1,092,575
1,173 Randgold Resources Ltd., ADR .............. Jul. 08/50 105,570
527 Randgold Resources Ltd., ADR .............. Aug. 08/45 210,800
300 Rio Tinto plc, ADR ........................ Jul. 08/540 117,000
700 Rowan Companies Inc. ...................... Jul. 08/42.50 371,000
800 Rowan Companies Inc. ...................... Jan. 09/50 440,000
100 Royal Dutch Shell plc, Cl. A (g) .......... Sep. 08/22 109,551
150 Saipem SpA (i) ............................ Jul. 08/30 98,630
1,000 Sasol Ltd., ADR ........................... Jul. 08/70 15,000
1,500 StatoilHydro ASA, ADR ..................... Jul. 08/40 60,000
3,050 Suncor Energy Inc. ........................ Sep. 08/72.50 366,000
600 Technip SA (i) ............................ Sep. 08/64 207,828
825 Tesoro Corp. .............................. Aug. 08/30 16,500
350 Tesoro Corp. .............................. Nov. 08/35 14,875
100 Total SA, ADR ............................. Aug. 08/90 17,000
830 Transocean Inc. ........................... Aug. 08/160 466,460
450 Valero Energy Corp. ....................... Sep. 08/52.50 31,500
600 Valero Energy Corp. ....................... Sep. 08/60 13,200
10 Weatherford International Ltd. ............ Aug. 08/40 10,200
1,300 Weatherford International Ltd. ............ Aug. 08/42.50 1,027,000
1,770 Weatherford International Ltd. ............ Aug. 08/45 1,008,900
800 Williams Companies Inc. ................... Aug. 08/37.50 312,000
864 Williams Companies Inc. ................... Aug. 08/40 185,760
490 XTO Energy Inc. ........................... Aug. 08/70 176,400
1,970 XTO Energy Inc. ........................... Jan. 09/80 823,874
6,320 Yamana Gold Inc. .......................... Jul. 08/15 1,137,600
2,000 Yamana Gold Inc. .......................... Aug. 08/15 420,000
3,000 Yamana Gold Inc. .......................... Aug. 08/17 300,000
--------------
TOTAL CALL OPTIONS WRITTEN
(Premiums received $27,151,229) ......... $ 33,195,125
==============
----------
(a) Securities, or a portion thereof, with a value of $467,707,049 are pledged
as collateral for options written.
(b) At June 30, 2008, the Fund held investments in restricted securities
amounting to $5,545,496 or 0.77% of total investments, which were valued
under methods approved by the Board of Trustees as follows:
ACQUISITION
SHARES/ 06/30/08
PRINCIPAL ACQUISITION ACQUISITION CARRYING VALUE
AMOUNT ISSUER DATE COST PER UNIT
----------- ----------------------------------- ----------- ----------- --------------
50,000 Ivanhoe Mines Ltd., New York ...... 04/25/05 $ 337,529 $ 10.9100
$ 3,000,000 Comanche Energy Inc.,
12.500%, 06/13/13 ............... 06/18/08 2,775,000 92.5000
307,692 Comanche Energy Inc. .............. 06/18/08 1,849,998 6.0125
34,091 Comanche Energy Inc., Cl. A,
Warrants expire 06/13/13 ........ 06/18/08 93,750 2.7500
36,197 Comanche Energy Inc., Cl. B,
Warrants expire 06/13/13 ........ 06/18/08 93,750 2.5900
82,965 Comanche Energy Inc., Cl. C,
Warrants expire 06/13/13 ........ 06/18/08 187,501 2.2600
(c) Security fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the company and reviewing the valuation of comparable
securities and other factors on a regular basis. At June 30, 2008, the
market value of fair valued securities amounted to $5,230,373 or 0.73% of
total investments.
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
(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 June 30,
2008, the market value of Rule 144A securities amounted to $3,258,228 or
0.45% of total investments.
(f) Exercise price denoted in Canadian dollars.
(g) Exercise price denoted in British pounds.
(h) Exercise price denoted in Australian dollars.
(i) Exercise price denoted in Euros.
+ Non-income producing security.
ADR American Depositary Receipt
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
------------------------------------- ------ -------------
LONG POSITIONS
North America ....................... 48.2% $ 346,361,449
Europe .............................. 17.4 124,762,654
Asia/Pacific ........................ 13.3 95,811,170
Latin America ....................... 11.7 84,489,556
South Africa ....................... 9.4 67,477,549
------ -------------
Total Investments ................... 100.0% $ 718,902,378
====== =============
SHORT POSITIONS
North America ....................... (3.5)% $ (24,790,016)
Asia/Pacific ........................ (0.6) (4,530,894)
Latin America ....................... (0.4) (2,710,747)
Europe .............................. (0.1) (1,057,598)
South Africa ........................ (0.0) (105,870)
------ -------------
Total Investments ................... (4.6)% $ (33,195,125)
====== =============
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2008 (UNAUDITED)
ASSETS:
Investments, at value (cost $468,035,991) ......... $ 718,902,378
Foreign currency, at value (cost $722,215) ........ 720,834
Deposit at brokers ................................ 1,279,386
Receivable for investments sold ................... 4,343,160
Unrealized appreciation on swap contracts ......... 1,739,435
Dividends receivable .............................. 245,513
Deferred offering expense ......................... 230,533
Prepaid expense ................................... 7,064
-------------
TOTAL ASSETS ...................................... 727,468,303
-------------
LIABILITIES:
Call options written (premiums received
$27,151,229) .................................... 33,195,125
Payable to custodian .............................. 6,989,518
Payable for investments purchased ................. 1,119,873
Distributions payable ............................. 92,014
Payable for investment advisory fees .............. 548,945
Payable for payroll expenses ...................... 94,283
Payable for accounting fees ....................... 3,848
Payable for offering expenses ..................... 229,184
Other accrued expenses and liabilities ............ 176,101
-------------
TOTAL LIABILITIES ................................. 42,448,891
-------------
PREFERRED SHARES:
Series A Cumulative Preferred Shares
(6.625%, $25 liquidation value, $0.001 par
value, 4,000,000 shares authorized with
4,000,000 shares issued and outstanding) ........ 100,000,000
-------------
NET ASSETS ATTRIBUTABLE TO COMMON SHARES .......... $ 585,019,412
=============
NET ASSETS CONSIST OF:
Paid-in capital, at $.001 par value ............... $ 343,241,317
Accumulated net investment loss ................... (3,207,012)
Accumulated distributions in excess of net
realized gain on investments, swap
contracts, securities sold short, written
options, and foreign currency transactions ...... (1,572,845)
Net unrealized appreciation on investments ........ 250,866,387
Net unrealized appreciation on swap contracts ..... 1,739,435
Net unrealized depreciation on written options .... (6,043,896)
Net unrealized depreciation on foreign
currency translations ........................... (3,974)
-------------
NET ASSETS ........................................ $ 585,019,412
=============
NET ASSET VALUE PER COMMON SHARE:
($585,019,412 / 18,117,515 shares outstanding;
unlimited number of shares authorized) ............ $ 32.29
=============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $157,306) ......... $ 3,414,784
Interest 580,119
-------------
TOTAL INVESTMENT INCOME ........................... 3,994,903
-------------
EXPENSES:
Investment advisory fees .......................... 3,241,688
Interest expense .................................. 512,970
Shareholder communications expenses ............... 110,565
Legal and audit fees .............................. 102,094
Payroll expenses .................................. 90,825
Trustees' fees .................................... 37,873
Custodian fees .................................... 34,184
Accounting fees ................................... 22,500
Shareholder services fees ......................... 11,136
Miscellaneous expenses ............................ 83,438
-------------
TOTAL EXPENSES 4,247,273
-------------
NET INVESTMENT LOSS (252,370)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, SECURITIES SOLD SHORT,
WRITTEN OPTIONS, AND FOREIGN CURRENCY:
Net realized gain on investments .................. 20,583,623
Net realized gain on swap contracts ............... 9,036,681
Net realized loss on securities sold short ........ (2,127,959)
Net realized loss on written options .............. (4,073,762)
Net realized loss on foreign currency
transactions .................................... (335,815)
-------------
Net realized gain on investments, swap
contracts, securities sold short, written
options, and foreign currency transactions ...... 23,082,768
-------------
Net change in unrealized appreciation/depreciation:
on investments .................................. 63,808,469
on swap contracts ............................... (6,776,753)
on written options .............................. (10,478,199)
on foreign currency translations ................ (6,964)
-------------
Net change in unrealized
appreciation/depreciation on investments,
swap contracts, written options, and foreign
currency translations ........................... 46,546,553
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS, SECURITIES SOLD
SHORT, WRITTEN OPTIONS, AND FOREIGN CURRENCY .... 69,629,321
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ...................................... 69,376,951
-------------
Total Distributions to Preferred Shareholders ..... (3,294,097)
-------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO
COMMON SHAREHOLDERS RESULTING FROM OPERATIONS ... $ 66,082,854
=============
See accompanying notes to financial statements.
7
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
---------------- -----------------
OPERATIONS:
Net investment loss ................................... $ (252,370) $ (421,154)
Net realized gain on investments, swap contracts,
securities sold short, written options, and foreign
currency transactions ............................... 23,082,768 23,501,285
Net change in unrealized
appreciation/depreciation on investments,
swap contracts, securities sold short, written
options, and foreign currency translations .......... 46,546,553 114,085,756
------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .. 69,376,951 137,165,887
------------- --------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income ................................. -- (86,208)
Net realized short-term gain on investments, swap
contracts, securities sold short, written options
and foreign currency transactions ................... -- (396,955)
Net realized long-term gain on investments, swap
contracts, securities sold short, written options
and foreign currency transactions ................... (3,294,097)* (933,851)
------------- --------------
TOTAL DISTRIBUTIONS TO PREFERRED SHAREHOLDERS ......... (3,294,097) (1,417,014)
------------- --------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS RESULTING FROM OPERATIONS .............. 66,082,854 135,748,873
------------- --------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ................................. -- (2,705,719)
Net realized short-term gain on investments, swap
contracts, securities sold short, written options
and foreign currency transactions ................... -- (17,778,632)
Net realized long-term gain on investments, swap
contracts, securities sold short, written options
and foreign currency transactions ................... (15,215,738)* (14,375,712)
------------- --------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ............ (15,215,738) (34,860,063)
------------- --------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares
issued upon reinvestment of distributions ........... 899,515 3,173,090
Offering costs for preferred shares charged to
paid-in-capital ..................................... -- (3,550,000)
------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
FUND SHARE TRANSACTIONS ............................. 899,515 (376,910)
------------- --------------
NET INCREASE IN NET ASSETS ............................ 51,766,631 100,511,900
NET ASSETS:
Beginning of period ................................... 533,252,781 432,740,881
------------- --------------
End of period (including undistributed net
investment income of $0 and $0, respectively) ....... $ 585,019,412 $ 533,252,781
============= ==============
-------------
* Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
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:
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED YEAR ENDED PERIOD ENDED
(UNAUDITED) DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2005(e)
---------------- ----------------- ------------------ --------------------
OPERATING PERFORMANCE:
Net asset value, beginning of period ......... $ 29.48 $ 24.10 $ 21.99 $ 19.06(f)
--------- --------- ---------- -----------
Net investment income (loss) ................. (0.01) (0.02) 0.08 0.08
Net realized and unrealized gain on
investments, swap contracts, securities sold
short, written options, and foreign currency
transactions ............................... 3.84 7.61 3.77 4.01
--------- --------- ---------- -----------
Total from investment operations ............. 3.83 7.59 3.85 4.09
--------- --------- ---------- -----------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income ........................ -- (0.01) -- --
Net realized gains on investments, swap
contracts, securities sold short, written
options, and foreign currency
transactions ............................... (0.18)*** (0.07) -- --
--------- --------- ---------- -----------
Total distributions to preferred
shareholders ............................... (0.18) (0.08) -- --
--------- --------- ---------- -----------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ........................ -- (0.15) -- (0.07)
Net realized gains on investments, swap
contracts, securities sold short, written
options, and foreign currency
transactions ............................... (0.84)*** (1.78) (1.74) (1.09)
--------- --------- ---------- -----------
Total distributions to common shareholders ... (0.84) (1.93) (1.74) (1.16)
--------- --------- ---------- -----------
FUND SHARE TRANSACTIONS:
Increase (decrease) in net asset value from
common share transactions .................. -- 0.00(d) -- (0.00)(d)
Offering costs for preferred shares
charged to paid-in capital ................. -- (0.20) -- --
--------- --------- ---------- -----------
Total fund share transactions ................ -- (0.20) -- (0.00)(d)
--------- --------- ---------- -----------
NET ASSET VALUE, END OF PERIOD ............... $ 32.29 $ 29.48 $ 24.10 $ 21.99
========= ========= ========== ===========
NAV total return + ........................... 12.47% 31.47% 18.29% 22.0%*
========= ========= ========== ===========
Market value, end of period .................. $ 29.80 $ 29.15 $ 24.60 $ 21.80
========= ========= ========== ===========
Investment total return ++ ................... 5.26% 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) ................................. $ 685,019 $ 633,253 -- --
Net assets attributable to common shares,
end of period (in 000's) ................... $ 585,019 $ 533,253 $ 432,741 $ 390,209
Ratio of net investment income (loss) to
average net assets attributable to common
shares ..................................... (0.09)% (c) (0.09)% 0.42% 0.47%(c)
Ratio of operating expenses to average net
assets attributable to common shares (a) ... 1.55%(c) 1.45% 1.17% 1.15%(c)
Ratio of operating expenses to average net
assets including liquidation value of
preferred shares (a) ....................... 1.31%(c) 1.39% -- --
Portfolio turnover rate +++ .................. 19.2% 71.3% 114.8% 142.5%
PREFERRED SHARES:
6.625% SERIES A CUMULATIVE PREFERRED SHARES
Liquidation value, end of period (in
000's) ..................................... $ 100,000 $ 100,000 -- --
Total shares outstanding (in 000's) .......... 4,000 4,000 -- --
Liquidation preference per share ............. $ 25.00 $ 25.00 -- --
Average market value (b) ..................... $ 25.21 $ 24.16 -- --
Asset coverage per share ..................... $ 171.25 $ 158.31 -- --
ASSET COVERAGE ............................... 685% 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 returns for periods of less than one year are not annualized.
++ Based on market value per share, adjusted for reinvestment of distributions
at prices obtained under the Fund's dividend reinvestment plan. Total
returns for periods of less than one year are not annualized.
+++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate. Had this policy been
adopted retroactively, the portfolio turnover rate for the fiscal 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 fiscal
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.
*** Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
(a) The Fund incurred interest expense during the six months ended June 30,
2008 and the years ended December 31, 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 1.36%, 1.33%, and
1.16%, respectively, and during the six months ended June 30, 2008 and the
fiscal year ended December 31, 2007 the ratio of operating expenses to
average net assets including liquidation value of preferred shares would
have been 1.15% and 1.27%, respectively.
(b) Based on weekly prices.
(c) Annualized.
(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.
See accompanying notes to financial statements.
9
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 to the valuation and changes in valuation of similar
10
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
securities, including a comparison of foreign securities to the equivalent U.S.
dollar value ADR securities at the close of the U.S. exchange; and evaluation of
any other information that could be indicative of the value of the security.
On January 1, 2008, the Fund adopted Statement of Financial Accounting
Standard No. 157, "Fair Value Measurements" ("SFAS 157") that clarifies the
definition of fair value for financial reporting, establishes a framework for
measuring fair value, and requires additional disclosures about the use of fair
value measurements. The three levels of the fair value hierarchy under SFAS 157
are described below:
- Level 1 - quoted prices in active markets for identical securities;
- Level 2 - other significant observable inputs (including quoted
prices for similar securities, interest rates, prepayment speeds,
credit risk, etc.); and
- Level 3 - significant unobservable inputs (including the Fund's
determinations as to the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. The
summary of inputs used to value the Fund's net assets as of June 30, 2008 is as
follows:
INVESTMENTS IN OTHER FINANCIAL
SECURITIES INSTRUMENTS (UNREALIZED
VALUATION INPUTS (MARKET VALUE) APPRECIATION)*
------------------- -------------- ------------------------
Level 1 - Quoted Prices ........................ $ 697,584,446 --
Level 2 - Other Significant Observable Inputs .. (16,877,189) $ 1,739,435
Level 3 - Significant Unobservable Inputs ...... 4,999,996 --
-------------- -----------
TOTAL $ 685,707,253 $ 1,739,435
============== ===========
-----------
* 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 ...................... --
Realized gain (loss) ............................ --
Change in unrealized appreciation/depreciation .. --
Net purchases (sales) ........................... $ 4,999,996
Transfers in and/or out of Level 3 .............. --
------------
BALANCE AS OF 6/30/08 ........................... $ 4,999,996
============
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
11
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At June 30,
2008, there were no open repurchase agreements.
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. 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 swap at June 30, 2008 is as follows:
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION NET UNREALIZED
AMOUNT RECEIVED EQUITY SECURITY PAID DATE APPRECIATION
----------------------------- ---------------- ------------------------ ----------- --------------
3 Month LIBOR plus
Market Value 45 bps plus Market Value
Appreciation on: Depreciation on:
MMX Mineraco e MMX Mineraco e
$ 15,892,674 (572,000 Shares) Metalicos SA Metalicos SA 03/06/09 $ 1,739,435
12
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
OPTIONS. The Fund may purchase or write call or put options on securities
or indices. As a writer of put options, the Fund receives a premium at the
outset and then bears the risk of unfavorable changes in the price of the
financial instrument underlying the option. The Fund would incur a loss if the
price of the underlying financial instrument decreases between the date the
option is written and the date on which the option is terminated. The Fund would
realize a gain, to the extent of the premium, if the price of the financial
instrument increases between those dates. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying security in
determining whether there has been a realized gain or loss. If a put option is
exercised, the premium reduces the cost basis of the security.
As a purchaser of put options, the Fund pays a premium for the right to
sell to the seller of the put option the underlying security at a specified
price. The seller of the put has the obligation to purchase the underlying
security upon exercise at the exercise price. If the price of the underlying
security declines, the Fund would realize a gain upon sale or exercise. If the
price of the underlying security increases or stays the same, the Fund would
realize a loss upon sale or at the expiration date, but only to the extent of
the premium paid.
In the case of call options, these exercise prices are referred to as
"in-the-money", "at-the-money", and "out-of-the-money", respectively. The Fund
may write (a) in-the-money call options when the Adviser expects that the price
of the underlying security will remain stable or decline during the option
period, (b) at-the-money call options when the Adviser expects that the price of
the underlying security will remain stable, decline, or advance moderately
during the option period, and (c) out-of-the-money call options when the Adviser
expects that the premiums received from writing the call option will be greater
than the appreciation in the price of the underlying security above the exercise
price. By writing a call option, the Fund limits its opportunity to profit from
any increase in the market value of the underlying security above the exercise
price of the option. Out-of-the-money, at-the-money, and in-the-money put
options (the reverse of call options as to the relation of exercise price to
market price) may be utilized in the same market environments that such call
options are used in equivalent transactions. Option positions at June 30, 2008
are presented within the Schedule of Investments.
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. At June 30, 2008, there were no open
securities sold short.
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.
13
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 shown
as "interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to 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.
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 fiscal year ended
December 31, 2007 was as follows:
COMMON PREFERRED
------------ -----------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ... $ 20,148,505 $ 819,009
Net long-term capital gains .................. 14,711,558 598,005
------------ -----------
Total distributions paid ..................... $ 34,860,063 $ 1,417,014
============ ===========
14
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
As of December 31, 2007, the components of accumulated earnings/(losses)
on a tax basis were as follows:
Net unrealized appreciation on investments, swap
contracts, written options, and foreign currency
translations ....................................... $ 180,125,283
Undistributed ordinary income
(inclusive of short-term capital gains) ............ 16,859,984
Undistributed long-term capital gains ................. 2,441,900
Other temporary differences* .......................... (8,516,188)
--------------
Total ................................................. $ 190,910,979
==============
-----------
* Other temporary differences are due to mark-to-market adjustments on swap
contracts.
The following summarizes the tax cost of investments, short sales, written
options, and the related unrealized appreciation/(depreciation) at June 30,
2008:
GROSS GROSS NET UNREALIZED
COST/ UNREALIZED UNREALIZED APPRECIATION/
PREMIUMS APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- -------------- -------------- --------------
Investments ....... $ 471,362,106 $ 266,008,539 $ (18,468,267) $ 247,540,272
Swap contracts .... -- 1,739,435 -- 1,739,435
Written options ... 27,151,229 7,005,440 (13,049,336) (6,043,896)
-------------- -------------- -------------- --------------
$ 498,513,335 $ 274,753,414 $ (31,517,603) $ 243,235,811
============== ============== ============== ==============
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes,
an Interpretation of FASB Statement No. 109" (the "Interpretation") established
a minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures.
For the six months ended June 30, 2008, the Fund did not have any
liability for any unrecognized tax benefits. The Fund recognizes interest and
penalties, if any, related to unrecognized tax benefits as income tax expenses
in the Statement of Operations. The Fund has adopted the Interpretation for all
open tax years and it had no impact on the amounts reported in the financial
statements.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Fund has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Fund will pay the Adviser a fee, computed weekly and paid
monthly, equal on an annual basis to 1.00% of the value of the Fund's average
weekly net assets including the liquidation value of preferred shares. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio and oversees the administration of
all aspects of the Fund's business and affairs.
The cost of calculating the Fund's NAV per share is a Fund expense
pursuant to the Advisory Agreement between the Fund and the Adviser. During the
six months ended June 30, 2008, the Fund paid or accrued $22,500 to the Adviser
in connection with the cost of computing the Fund's NAV.
15
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 six months ended June 30, 2008, the Fund paid
$90,825, 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 committee 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 six months ended June 30, 2008, other than short-term securities and U.S.
Government obligations, aggregated $122,044,697 and $129,783,868, respectively.
Purchases and proceeds from the sales of U.S. Government obligations for
the six months ended June 30, 2008, other than short-term obligations,
aggregated $388,266 and $386,351, respectively.
Written options activity for the Fund for the six months ended June 30,
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 ............................ 472,469 91,531,147
Options repurchased ........................ (269,356) (56,966,210)
Options expired ............................ (191,499) (29,541,453)
Options exercised .......................... (27,056) (3,863,294)
--------- --------------
Options outstanding at June 30, 2008 ....... 142,495 $ 27,151,229
========= ==============
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 six months ended June
30, 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.
16
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 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
six months ended June 30, 2008, the Fund did not repurchase any of the Preferred
Shares. At June 30, 2008, 4,000,000 Preferred Shares were outstanding and
accrued dividends amounted to $92,014.
Transactions in common shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
------------------ ----------------------
SHARES AMOUNT SHARES AMOUNT
------ --------- ------- -----------
Shares issued upon
reinvestment of distributions ... 31,453 $ 899,515 127,490 $ 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 will not have a material adverse impact on the
Adviser or its ability to fulfill its obligations under the Advisory Agreement.
On the same day, the SEC filed a civil action against the Executive Vice
President and Chief Operating Officer of the Adviser, alleging violations of
certain federal securities laws arising from the same matter. The officer is
also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO
fund complex. The officer denies the allegations and is continuing in his
positions with the Adviser and the funds. The Adviser currently expects that any
resolution of the action against the officer will not have a material adverse
impact on the Adviser or its ability to fulfill its obligations under the
Advisory Agreement.
On a separate matter, in August 2008, the Adviser made an offer to the
staff of the SEC to settle a previously disclosed matter concerning compliance
with Section 19(a) and Rule 19a-1 of the 1940 Act by two closed-end funds
managed by the Adviser. These provisions require registered investment companies
to provide written statements to shareholders when a distribution is made in the
nature of a dividend from a source other than net investment income. While the
two funds sent annual statements and provided other materials containing this
information, the funds did not send the notices required by Rule 19a-1 to
shareholders with each distribution in 2002 and 2003. The Adviser believes that
the funds have been in compliance with Rule 19a-1 since that time. The Adviser
believes that the settlement would have no effect on the funds or any material
adverse effect on the Adviser or its ability to manage the funds. This offer of
settlement is subject to final agreement regarding the specific language of the
SEC's administrative order and other settlement documents and approval by the
SEC.
17
THE GABELLI GLOBAL GOLD, NATURAL RESOURCES & INCOME TRUST
BOARD CONSIDERATION AND APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
At its meeting on February 28, 2008, the Board of Trustees ("Board") of the Fund
approved the continuation of the investment advisory agreement with the Adviser
for the Fund on the basis of the recommendation by the trustees who are not
"interested persons" of the Fund (the "Independent Board Members"). The
following paragraphs summarize the material information and factors considered
by the Independent Board Members as well as their conclusions relative to such
factors.
NATURE, EXTENT AND QUALITY OF SERVICES. The Independent Board Members considered
information regarding the portfolio managers, the depth of the analyst pool
available to the Adviser and the portfolio managers, the scope of
administrative, shareholder, and other services supervised or provided by the
Adviser, and the absence of significant service problems reported to the Board.
The Independent Board Members noted the experience, length of service, and
reputation of each of the portfolio managers.
INVESTMENT PERFORMANCE. The Independent Board Members reviewed the performance
of the Fund since inception against a peer group of sector equity funds. The
Independent Board Members noted that the Fund's performance was ranked in the
top quintile of funds in its category for the prior one year period.
PROFITABILITY. The Independent Board Members reviewed summary data regarding the
profitability of the Fund to the Adviser both with an administrative overhead
charge and without such a charge.
ECONOMIES OF SCALE. The Independent Board Members discussed the major elements
of the Adviser's cost structure and the relationship of those elements to
potential economies of scale. The Independent Board Members noted that the Fund
was a closed-end fund and unlikely to realize any economies of scale potentially
available through growth.
SHARING OF ECONOMIES OF SCALE. The Independent Board Members noted that the
investment management fee schedule for the Fund does not take into account any
potential sharing of economies of scale.
SERVICE AND COST COMPARISONS. The Independent Board Members compared the expense
ratios of the investment management fee, other expenses, and total expenses of
the Fund to similar expense ratios of the peer group of sector equity closed-end
funds and noted that the Adviser's management fee includes substantially all
administrative services of the Fund as well as investment advisory services. The
Independent Board Members noted that the Fund's expense ratios were lower than
average, and the Fund's size was average, within this group. The Independent
Board Members also noted that the management fee structure was the same as that
in effect for most of the Gabelli funds, except for the presence of leverage and
fees chargeable as assets attributable to leverage in certain circumstances.
CONCLUSIONS. The Independent Board Members concluded that the Fund enjoyed
highly experienced portfolio management services and good ancillary services and
that the performance record was satisfactory. The Independent Board Members
concluded that the profitability to the Adviser of managing the Fund was
reasonable and that, in part due to the Fund's structure as a closed-end fund,
economies of scale were not a significant factor in their thinking. The
Independent Board Members did not view the potential profitability of ancillary
services as material to their decision. On the basis of the foregoing, and
without assigning particular weight to any single conclusion, the Independent
Board Members determined to recommend continuation of the investment management
agreement to the full Board of Trustees.
18
[FLAGES]
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
---------- ---------
Amex - Symbol: GGN GGN PrA
Shares Outstanding: 18,117,515 4,000,000
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
(914) 921-5070
www.gabelli.com
SEMI ANNUAL REPORT
JUNE 30, 2008
GGN Q2/2008
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) Schedule of Investments in securities of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
There has been no change, as of the date of this filing, in any of the portfolio
managers identified in response to paragraph (a)(1) of this Item in the
registrant's most recently filed annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
=============================================================================================================================
=============================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A Common - 18,117,515
01/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
01/31/08
=============================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A Common - 18,117,515
02/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
02/28/08
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 18,117,515
03/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
03/31/08
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 18,117,515
04/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
04/30/08
=============================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 18,117,515
05/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
05/31/08
=============================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 18,117,515
06/01/08
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
06/30/08
=============================================================================================================================
Total Common - N/A Common - N/A Common - N/A N/A
Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
=============================================================================================================================
Footnote columns (c) and (d) of the table, by disclosing the following
information in the aggregate for all plans or programs publicly announced:
a. The date each plan or program was announced - The notice of the potential
repurchase of common and preferred shares occurs quarterly in the Fund's
quarterly report in accordance with Section 23(c) of the Investment Company
Act of 1940, as amended.
b. The dollar amount (or share or unit amount) approved - Any or all common
shares outstanding may be repurchased when the Fund's common shares are
trading at a discount of 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) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Global Gold, Natural Resources & Income Trust
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
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By (Signature and Title)* /s/ Agnes Mullady
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Agnes Mullady,
Principal Financial Officer and Treasurer
Date 9/3/08
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* Print the name and title of each signing officer under his or her signature.