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, 2018

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, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.


Item 1. Schedule of Investments.

The Schedule(s) of Investments is attached herewith.


The Gabelli Utility Trust

Third Quarter Report — September 30, 2018

To Our Shareholders,

For the quarter ended September 30, 2018, the net asset value (NAV) total return of The Gabelli Utility Trust (the Fund) was 2.0%. The total return for the Standard & Poor’s (S&P) 500 Utilities Index was 2.4%. The total return for the Fund’s publicly traded shares was 1.5%. The Fund’s NAV per share was $4.98, while the price of the publicly traded shares closed at $5.82 on the New York Stock Exchange (NYSE). See below for additional performance information.

Enclosed is the schedule of investments as of September 30, 2018.

Comparative Results

 

 

Average Annual Returns through September 30, 2018 (a) (Unaudited)

     Since
Inception
 
     Quarter      1 Year      5 Year      10 Year      15 Year      (07/09/99)  

Gabelli Utility Trust

                 

NAV Total Return (b)

     1.97%        0.74%        7.81%        9.79%        9.41%        8.68%  

Investment Total Return (c)

     1.51           (6.36)          8.75           5.91           7.75           8.18     

S&P 500 Utilities Index

     2.39           2.93           11.06           9.04           10.19           6.60     

Lipper Utility Fund Average

     2.80           5.37           8.29           8.84           10.04           6.34     

S&P 500 Index

     7.71           17.91           13.95           11.97           9.65           5.89     

 

  (a)

Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. The Fund’s use of leverage may magnify the volatility of net asset value changes versus funds that do not employ leverage. When shares are sold, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. 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.

 

 


The Gabelli Utility Trust

Schedule of Investments — September 30, 2018 (Unaudited)

 

 

 

Shares

         

Market

Value

 
  

COMMON STOCKS — 85.0%

  
  

ENERGY AND UTILITIES — 67.2%

  
  

Alternative Energy — 0.4%

  
  20,000     

NextEra Energy Partners LP

   $ 970,000  
  10,445     

Ormat Technologies Inc.,
New York

     565,179  
  1,555     

Ormat Technologies Inc.,
Tel Aviv

     81,792  
     

 

 

 
        1,616,971  
     

 

 

 
  

Electric Integrated — 40.7%

  
  22,000     

ALLETE Inc.

     1,650,220  
  125,000     

Alliant Energy Corp.

     5,321,250  
  17,000     

Ameren Corp.

     1,074,740  
  72,000     

American Electric Power Co. Inc.

     5,103,360  
  40,000     

Avangrid Inc.

     1,917,200  
  10,000     

Avista Corp.

     505,600  
  42,000     

Black Hills Corp.

     2,439,780  
  91,000     

CMS Energy Corp.

     4,459,000  
  24,000     

Dominion Energy Inc.

     1,686,720  
  16,500     

DTE Energy Co.

     1,800,645  
  74,000     

Duke Energy Corp.

     5,921,480  
  70,000     

Edison International

     4,737,600  
  186,000     

El Paso Electric Co.

     10,639,200  
  1,000     

Emera Inc.

     31,092  
  3,000     

Entergy Corp.

     243,390  
  226,000     

Evergy Inc.

     12,411,920  
  165,000     

Eversource Energy

     10,137,600  
  67,000     

FirstEnergy Corp.

     2,490,390  
  62,000     

Hawaiian Electric Industries Inc.

     2,206,580  
  85,000     

MGE Energy Inc.

     5,427,250  
  56,500     

NextEra Energy Inc.

     9,469,400  
  48,000     

NiSource Inc.

     1,196,160  
  87,000     

NorthWestern Corp.

     5,103,420  
  185,000     

OGE Energy Corp.

     6,719,200  
  48,000     

Otter Tail Corp.

     2,299,200  
  48,000     

PG&E Corp.

     2,208,480  
  102,000     

PNM Resources Inc.

     4,023,900  
  38,000     

Public Service Enterprise Group Inc.

     2,006,020  
  56,500     

SCANA Corp.

     2,197,285  
  17,000     

Unitil Corp.

     865,300  
  230,000     

Vectren Corp.

     16,442,700  
  140,000     

WEC Energy Group Inc.

     9,346,400  
  160,000     

Xcel Energy Inc.

     7,553,600  
     

 

 

 
        149,636,082  
     

 

 

 
  

Electric Transmission and Distribution — 2.3%

 

  40,000     

Consolidated Edison Inc.

     3,047,600  
  120,000     

Exelon Corp.

     5,239,200  
     

 

 

 
        8,286,800  
     

 

 

 
  

Global Utilities — 2.5%

  
  8,000     

Chubu Electric Power Co. Inc.

     121,000  

Shares

         

Market

Value

 
  133,000     

Electric Power Development Co. Ltd.

   $     3,681,438  
  30,000     

Endesa SA

     648,214  
  300,000     

Enel SpA

     1,536,765  
  494,900     

Hera SpA

     1,541,086  
  15,000     

Hokkaido Electric Power Co. Inc.

     94,526  
  12,000     

Hokuriku Electric Power Co.†

     122,830  
  3,000     

Huaneng Power International Inc., ADR

     77,700  
  41,000     

Korea Electric Power Corp., ADR

     539,970  
  15,000     

Kyushu Electric Power Co. Inc.

     180,998  
  8,000     

Shikoku Electric Power Co. Inc.

     104,418  
  8,000     

The Chugoku Electric Power Co. Inc.

     102,799  
  20,000     

The Kansai Electric Power Co. Inc.

     301,531  
  13,000     

Tohoku Electric Power Co. Inc.

     176,430  
     

 

 

 
        9,229,705  
     

 

 

 
  

Merchant Energy — 1.2%

  
  300,000     

GenOn Energy Inc., Escrow†(a)

     0  
  323,500     

The AES Corp.(b)

     4,529,000  
     

 

 

 
        4,529,000  
     

 

 

 
  

Natural Gas Integrated — 5.6%

  
  4,000     

Devon Energy Corp.

     159,760  
  90,000     

Kinder Morgan Inc.

     1,595,700  
  136,000     

National Fuel Gas Co.

     7,624,160  
  165,000     

ONEOK Inc.

     11,185,350  
     

 

 

 
        20,564,970  
     

 

 

 
  

Natural Gas Utilities — 5.5%

  
  25,000     

Atmos Energy Corp.

     2,347,750  
  25,000     

Chesapeake Utilities Corp.

     2,097,500  
  30,262     

Corning Natural Gas Holding Corp.

     548,499  
  15,500     

Engie

     227,922  
  72,066     

National Grid plc, ADR

     3,737,343  
  42,000     

ONE Gas Inc.

     3,455,760  
  18,000     

RGC Resources Inc.

     480,780  
  93,000     

Southwest Gas Holdings Inc.

     7,349,790  
  2,000     

Spire Inc.

     147,100  
     

 

 

 
        20,392,444  
     

 

 

 
  

Natural Resources — 2.2%

  
  6,500     

Anadarko Petroleum Corp.

     438,165  
  3,000     

Apache Corp.

     143,010  
  25,000     

California Resources Corp.†

     1,213,250  
  55,000     

Cameco Corp.

     627,000  
  25,000     

CNX Resources Corp.†

     357,750  
  32,000     

Compania de Minas Buenaventura SAA, ADR

     429,120  
  3,125     

CONSOL Energy Inc.†

     127,531  
  50,000     

Exxon Mobil Corp.

     4,251,000  
  3,000     

Hess Corp.

     214,740  
  3,000     

Royal Dutch Shell plc, Cl. A, ADR

     204,420  
     

 

 

 
        8,005,986  
     

 

 

 
 

 

See accompanying notes to schedule of investments.

 

2


The Gabelli Utility Trust

Schedule of Investments (Continued) — September 30, 2018 (Unaudited)

 

 

 

Shares

         

Market

Value

 
  

COMMON STOCKS (Continued)

  
  

ENERGY AND UTILITIES (Continued)

  
  

Services — 1.1%

  
  20,000     

ABB Ltd., ADR

   $ 472,600  
  100,000     

Enbridge Inc.

     3,229,000  
  65,000     

Weatherford International plc†

     176,150  
     

 

 

 
        3,877,750  
     

 

 

 
  

Water — 4.5%

  
  27,000     

American States Water Co.

     1,650,780  
  25,000     

American Water Works Co. Inc.

     2,199,250  
  27,291     

Aqua America Inc.

     1,007,038  
  24,000     

Artesian Resources Corp., Cl. A

     882,720  
  40,000     

California Water Service Group.

     1,716,000  
  7,000     

Connecticut Water Service Inc.

     485,590  
  48,000     

Middlesex Water Co.

     2,324,160  
  120,000     

Severn Trent plc

     2,892,000  
  50,000     

SJW Group

     3,057,500  
  9,000     

The York Water Co.

     273,600  
     

 

 

 
        16,488,638  
     

 

 

 
  

Diversified Industrial — 0.4%

  
  2,000     

Alstom SA

     89,378  
  2,000     

AZZ Inc.

     101,000  
  3,800     

Bouygues SA

     164,258  
  90,000     

General Electric Co.

     1,016,100  
     

 

 

 
        1,370,736  
     

 

 

 
  

Environmental Services — 0.3%

  
  35,000     

Evoqua Water Technologies Corp.†

     622,300  
  3,000     

Suez

     42,634  
  30,000     

Veolia Environnement SA

     598,753  
     

 

 

 
        1,263,687  
     

 

 

 
  

Equipment and Supplies — 0.1%

  
  2,500     

Capstone Turbine Corp.†

     2,500  
  12,000     

Mueller Industries Inc.

     347,760  
     

 

 

 
        350,260  
     

 

 

 
  

Independent Power Producers and Energy
Traders — 0.4%

 

  40,000     

NRG Energy Inc.

     1,496,000  
     

 

 

 
   TOTAL ENERGY AND UTILITIES      247,109,029  
     

 

 

 
  

COMMUNICATIONS — 13.7%

  
  

Cable and Satellite — 4.5%

  
  4,200     

Charter Communications Inc., Cl. A†

     1,368,696  
  20,000     

Cogeco Inc.

     902,102  
  64,500     

DISH Network Corp., Cl. A†

     2,306,520  
  10,000     

EchoStar Corp., Cl. A†

     463,700  
  250,000     

ITV plc

     514,357  
  42,421     

Liberty Global plc, Cl. A†

     1,227,239  
  108,771     

Liberty Global plc, Cl. C†

     3,062,991  
  10,000     

Liberty Latin America Ltd., Cl. A†

     208,400  
  25,000     

Liberty Latin America Ltd., Cl. C†

     515,750  

Shares

         

Market

Value

 
  8,000     

Rogers Communications Inc., Cl. B

   $ 411,280  
  100,000     

Telenet Group Holding NV†

     5,505,695  
     

 

 

 
        16,486,730  
     

 

 

 
  

Communications Equipment — 0.2%

  
  20,000     

Furukawa Electric Co. Ltd.

     665,376  
     

 

 

 
  

Telecommunications — 4.7%

  
  75,000     

AT&T Inc.

     2,518,500  
  4,000     

BCE Inc., New York

     162,080  
  4,047     

BCE Inc., Toronto

     163,960  
  20,000     

BT Group plc, ADR

     295,400  
  90,000     

CenturyLink Inc.

     1,908,000  
  75,827     

Cincinnati Bell Inc.†

     1,209,441  
  5,000     

Cogeco Communications Inc.

     250,455  
  43,000     

Deutsche Telekom AG, ADR

     689,075  
  59,000     

Global Telecom Holding SAE†

     10,931  
  200     

Hutchison Telecommunications Hong Kong Holdings Ltd.

     79  
  20,038     

Internap Corp.†

     253,080  
  35,000     

Nippon Telegraph & Telephone Corp.

     1,580,884  
  1,000     

Orange Belgium SA

     15,721  
  2,000     

Orange SA, ADR

     31,780  
  11,800     

Orascom Investment Holding, GDR†

     2,360  
  30,000     

Pharol SGPS SA†

     6,165  
  4,000     

Proximus SA

     95,577  
  2,000     

PT Indosat Tbk

     409  
  105,000     

Sistema PJSC FC, GDR

     275,940  
  1,350     

Tele2 AB, Cl. B

     16,253  
  10,000     

Telefonica Deutschland Holding AG

     42,274  
  85,000     

Telekom Austria AG

     658,257  
  1,200     

Telesites SAB de CV†

     937  
  20,000     

T-Mobile US Inc.†

     1,403,600  
  110,000     

VEON Ltd., ADR

     319,000  
  105,000     

Verizon Communications Inc.

     5,605,950  
     

 

 

 
        17,516,108  
     

 

 

 
  

Wireless Communications — 4.3%

  
  2,500     

America Movil SAB de CV, Cl. L, ADR

     40,150  
  2,000     

China Mobile Ltd., ADR

     97,860  
  2,000     

China Unicom Hong Kong Ltd., ADR

     23,380  
  171     

M1 Ltd.

     264  
  85,000     

Millicom International Cellular SA, SDR

     4,882,474  
  1,154     

Mobile Telesystems PJSC

     4,800  
  11,250     

Mobile TeleSystems PJSC, ADR

     95,963  
  100,000     

NTT DoCoMo Inc.

     2,688,787  
  2,000     

SK Telecom Co. Ltd., ADR

     55,760  
  400     

SmarTone Telecommunications Holdings Ltd.

     532  
  60,000     

Turkcell Iletisim Hizmetleri A/S, ADR

     289,200  
  52,000     

United States Cellular Corp.†

     2,328,560  
 

 

See accompanying notes to schedule of investments.

 

3


The Gabelli Utility Trust

Schedule of Investments (Continued) — September 30, 2018 (Unaudited)

 

 

 

Shares

         

Market

Value

 
  

COMMON STOCKS (Continued)

  
  

COMMUNICATIONS (Continued)

  
  

Wireless Communications (Continued)

  
  240,000     

Vodafone Group plc, ADR

   $ 5,208,000  
     

 

 

 
        15,715,730  
     

 

 

 
  

TOTAL COMMUNICATIONS

     50,383,944  
     

 

 

 
  

OTHER — 4.1%

  
  

Aerospace — 0.3%

  
  100,000     

Rolls-Royce Holdings plc

     1,286,984  
     

 

 

 
  

Agriculture — 0.0%

  
  3,000     

Cadiz Inc.†

     33,450  
     

 

 

 
  

Consumer Products — 0.6%

  
  15,000     

SodaStream International Ltd.†

     2,146,200  
     

 

 

 
  

Electronics — 0.2%

  
  10,000     

Sony Corp., ADR

     606,500  
     

 

 

 
  

Entertainment — 0.6%

  
  8,080     

Modern Times Group MTG AB, Cl. B

     296,384  
  74,000     

Vivendi SA

     1,904,794  
     

 

 

 
        2,201,178  
     

 

 

 
  

Financial Services — 1.3%

  
  22,000     

Kinnevik AB, Cl. A

     677,026  
  70,000     

Kinnevik AB, Cl. B

     2,119,517  
  14,000     

The Dun & Bradstreet Corp.

     1,995,140  
     

 

 

 
        4,791,683  
     

 

 

 
  

Machinery — 0.5%

  
  150,000     

CNH Industrial NV

     1,801,500  
     

 

 

 
  

Transportation — 0.6%

  
  25,000     

GATX Corp.

     2,164,750  
     

 

 

 
   TOTAL OTHER      15,032,245  
     

 

 

 
   TOTAL COMMON STOCKS      312,525,218  
     

 

 

 
  

CONVERTIBLE PREFERRED STOCKS — 0.0%

 

  

ENERGY AND UTILITIES — 0.0%

  
  

Natural Gas Utilities — 0.0%

  
  4,203     

Corning Natural Gas Holding Corp.,
4.800%, Ser. B

     93,307  
     

 

 

 

Shares

         

Market

Value

 
  

WARRANTS — 0.0%

  
  

COMMUNICATIONS — 0.0%

  
  

Telecommunications — 0.0%

  
  16,000     

Bharti Airtel Ltd., expire 11/30/20†(c)

   $ 74,560  
     

 

 

 

Principal

Amount

         

Market

Value

 
  

CORPORATE BONDS — 0.0%

  
  

Equipment and Supplies — 0.0%

  
$ 30,000     

Mueller Industries Inc.,
6.000%, 03/01/27

   $ 29,025  
     

 

 

 
  

U.S. GOVERNMENT OBLIGATIONS — 15.0%

 

  55,306,000     

U.S. Treasury Bills,

1.933% to 2.204%††,

10/11/18 to 02/14/19(d)

     55,015,896  
     

 

 

 
   TOTAL INVESTMENTS — 100.0%
(Cost $299,350,545)
   $ 367,738,006  
     

 

 

 

 

(a)

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(b)

Securities, or a portion thereof, with a value of $1,750,000 are reserved and/or pledged with the custodian for current or potential holdings of swaps.

(c)

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2018, the market value of the Rule 144A security amounted to $74,560 or 0.02% of total investments.

(d)

At September 30, 2018, $500,000 of the principal amount was pledged as collateral for equity contract for difference swap agreements.

Non-income producing security.

††

Represents annualized yields at dates of purchase.

 

ADR

American Depositary Receipt

GDR

Global Depositary Receipt

SDR

Swedish Depositary Receipt

 

 

See accompanying notes to schedule of investments.

 

4


The Gabelli Utility Trust

Schedule of Investments (Continued) — September 30, 2018 (Unaudited)

 

 

As of September 30, 2018, equity contract for difference swap agreements outstanding were as follows:

 

Market Value

Appreciation Received

 

One Month LIBOR

Plus 90 bps

plus Market Value

Depreciation Paid

  Counterparty   Payment
Frequency
    Termination
Date
    Notional
Amount
    Value     Upfront
Payments/
Receipts
    Unrealized
Depreciation

Rolls-Royce Holdings plc

  Rolls-Royce Holdings

plc

  The Goldman Sachs

Group, Inc.

    1 month       06/28/2019     $ 1,293,463     $ (6,920     —         $(6,920)  
               

 

TOTAL EQUITY CONTRACT FOR DIFFERENCE SWAP AGREEMENT

              $(6,920)  
               

 

 

See accompanying notes to schedule of investments.

 

5


The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited)

 

As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its schedule of investments. 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). Investments in open-end investment companies are valued at each underlying Fund’s NAV per share as of the report date.

Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt obligations for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Certain securities are valued principally using dealer quotations. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded. OTC futures and options on futures for which market quotations are readily available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service, by quotations obtained from one or more dealers in the instrument in question by the Adviser.

Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. 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

 

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The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

   

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

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities and other financial instruments by inputs used to value the Fund’s investments as of September 30, 2018 is as follows:

 

     Valuation Inputs     
     Level 1
Quoted Prices
   Level 2 Other Significant
Observable Inputs
  Level 3 Significant
Unobservable Inputs
   Total Market Value
at 9/30/18

INVESTMENTS IN SECURITIES:

                  

ASSETS (Market Value):

                  

Common Stocks:

                  

ENERGY AND UTILITIES

                  

Merchant Energy

     $ 4,529,000            $ 0      $ 4,529,000

Natural Gas Utilities

       19,843,945      $ 548,499              20,392,444

Other Industries (a)

       222,187,585                     222,187,585

COMMUNICATIONS

                  

Other Industries (a)

       50,383,944                     50,383,944

OTHER

                  

Other Industries (a)

       15,032,245                     15,032,245

Total Common Stocks

       311,976,719        548,499              312,525,218

Convertible Preferred Stocks (a)

              93,307              93,307

Warrants (a)

              74,560              74,560

Corporate Bonds (a)

              29,025              29,025

U.S. Government Obligations

              55,015,896              55,015,896

TOTAL INVESTMENTS IN SECURITIES – ASSETS

     $ 311,976,719      $ 55,761,287     $ 0      $ 367,738,006

OTHER FINANCIAL INSTRUMENTS:*

                  

LIABILITIES (Unrealized Depreciation):

                  

EQUITY CONTRACT:

                  

Contract for Difference Swap Agreements

            $ (6,920 )            $ (6,920)  

TOTAL OTHER FINANCIAL INSTRUMENTS

            $ (6,920 )            $ (6,920)  

 

(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 options, futures, forwards, and swaps, which may be valued at the unrealized appreciation/depreciation of the instrument.

Additional Information to Evaluate Qualitative Information.

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

 

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The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

Fair Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.

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

Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing in derivative financial instruments for the purposes of increasing the income of the Fund, 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, 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, 2018, 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. For the swaps the fund held at September 30, 2018, refer to the Schedule of Investments.

 

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The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

The following table summarizes the net unrealized depreciation of derivatives held at September 30, 2018 by primary risk exposure:

 

Liability Derivatives:   

Net Unrealized

Depreciation

Equity Contract for Difference Swap Agreements

       $(6,920)  
    

 

 

 

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. In addition, certain trading restrictions are now applicable to the Fund which 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 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

 

9


The Gabelli Utility Trust

Notes to Schedule of Investments (Unaudited) (Continued)

 

risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.

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

Restricted Securities. The Fund is not subject to an independent limitation on the amount it may invest in securities for which the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured as that of publicly traded securities, and accordingly the Board will monitor their liquidity. At September 30, 2018, the Fund held no restricted securities.

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.

 

10


THE GABELLI UTILITY TRUST

One Corporate Center

Rye, NY 10580-1422

Portfolio Manager Biography

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

 

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.

Executive Chairman,

Associated Capital Group, Inc.

 

John Birch

Partner,

The Cardinal Partners Global

 

Elizabeth C. Bogan

Senior Lecturer,

Princeton University

 

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

 

Michael J. Ferrantino

Chief Executive Officer,

InterEx, Inc.

 

John D. Gabelli

Senior Vice President,

G.research, LLC

 

Michael J. Melarkey

Of Counsel,

McDonald Carano Wilson LLP

 

Robert J. Morrissey

Partner,

Morrissey, Hawkins & Lynch

 

 

Kuni Nakamura

President,

Advanced Polymer, Inc.

 

Salvatore J. Zizza

Chairman,

Zizza & Associates Corp.

 

OFFICERS

 

Bruce N. Alpert

President

 

John C. Ball

Treasurer

 

Agnes Mullady

Vice President

 

Andrea R. Mango

Secretary & Vice President

 

Richard J. Walz

Chief Compliance Officer

 

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 Q3/2018

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    11/16/2018

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    11/16/2018

 

By (Signature and Title)*      /s/ John C. Ball
     John C. Ball, Principal Financial Officer and Treasurer

 

Date    11/16/2018

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