N-Q 1 d96760dnq.htm GABELLI HEALTHCARE & WELLNESSRX TRUST Gabelli Healthcare & WellnessRx 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             811-22021                    

                         The Gabelli Healthcare & WellnessRx Trust                        

 

(Exact name of registrant as specified in charter)

One Corporate Center

                             Rye, New York 10580-1422                            

(Address of principal executive offices) (Zip code)

Agnes Mullady

Gabelli Funds, LLC

One Corporate Center

                                 Rye, New York 10580-1422                                

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-800-422-3554            

Date of fiscal year end:  December 31

Date of reporting period:  September 30, 2015

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

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.


Item 1. Schedule of Investments.

The Schedule(s) of Investments is attached herewith.


The Gabelli Healthcare & WellnessRx Trust

Third Quarter Report — September 30, 2015

(Y)our Portfolio Management Team

 

LOGO

To Our Shareholders,

For the quarter ended September 30, 2015, the net asset value (“NAV”) total return for both The Gabelli Healthcare & WellnessRx Trust (the “Fund”) and the Standard & Poor’s (“S&P”) 500 Health Care Index was (10.7)%. The total return for the Fund’s publicly traded shares was (12.8)%. The Fund’s NAV per share was $11.18, while the price of the publicly traded shares closed at $9.69 on the New York Stock Exchange (“NYSE”). See below for additional performance information.

Enclosed is the schedule of investments as of September 30, 2015.

Comparative Results

 

 

Average Annual Returns through September 30, 2015 (a) (Unaudited)

  Since
   

Quarter

 

1 Year

 

3 Year

 

5 Year

 

Inception
(06/28/07)

Gabelli Healthcare & WellnessRx Trust

                   

NAV Total Return (b)

      (10.72 )%       6.79 %       16.31 %       18.57 %       10.61 %

Investment Total Return (c)

      (12.78 )       3.74         14.70         18.38         8.03  

S&P 500 Health Care Index

      (10.67 )       5.19         20.20         19.04         10.06  

S&P 500 Index

      (6.44 )       (0.61 )       12.40         13.34         5.24  

S&P 500 Consumer Staples Index

      (0.20 )       7.10         12.49         14.18         10.05  

50% S&P 500 Health Care Index and 50% S&P 500 Consumer Staples Index

      (5.44 )       6.15         16.35         16.61         10.06  
  (a)

Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are sold, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Performance returns for periods of less than one year are not annualized. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The S&P 500 Health Care Index is an unmanaged indicator of health care equipment and services, pharmaceuticals, biotechnology, and life sciences stock performance. The S&P 500 Index is an unmanaged indicator of stock market performance. The S&P 500 Consumer Staples Index is an unmanaged indicator of food and staples retailing, food, beverage and tobacco, and household and personal products stock performance. The Blended Index consists of a 50% blend of each of the S&P 500 Health Care Index and S&P 500 Consumer Staples Index. 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 $8.00.

 
  (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 $8.00.

 


The Gabelli Healthcare & WellnessRx Trust

Schedule of Investments — September 30, 2015 (Unaudited)

 

 

 

Shares

        

Market

Value

 
  COMMON STOCKS — 96.1%   
  Beverages — 6.7%   
  35,000      Campbell Soup Co.    $ 1,773,800   
  42,000      Danone SA      2,647,850   
  45,000      Dr Pepper Snapple Group Inc.      3,557,250   
  26,000      ITO EN Ltd.      541,608   
  29,000      Massimo Zanetti Beverage Group SpA†      232,504   
  35,000      Morinaga Milk Industry Co.Ltd.      145,001   
  330,000      Parmalat SpA      851,061   
  35,000      PepsiCo Inc.      3,300,500   
  30,000      Suntory Beverage & Food Ltd.      1,146,584   
  60,000      The Coca-Cola Co.      2,407,200   
  50,000      The WhiteWave Foods Co.†      2,007,500   
  424,000      Vitasoy International Holdings Ltd.      626,969   
    

 

 

 
       19,237,827   
    

 

 

 
  Biotechnology — 3.3%   
  7,000      Agilent Technologies Inc.      240,310   
  1,000      Alexion Pharmaceuticals Inc.†      156,421   
  25,000      Amgen Inc.      3,458,000   
  4,000      Illumina Inc.†      703,280   
  75,000      Myriad Genetics Inc.†      2,811,000   
  326,600      NeoGenomics Inc.†      1,871,418   
  10,000      Tetraphase Pharmaceuticals Inc.†      74,600   
  1,600      Waters Corp.†      189,136   
    

 

 

 
       9,504,165   
    

 

 

 
  Electronics — 1.5%   
  35,000      Thermo Fisher Scientific Inc.      4,279,800   
    

 

 

 
  Food — 18.4%   
  86,000      Boulder Brands Inc.†      704,340   
  15,000      Calavo Growers Inc.      669,600   
  30,000      China Mengniu Dairy Co.Ltd.      105,290   
  2,000      Chr. Hansen Holding A/S      111,721   
  115,000      ConAgra Foods Inc.      4,658,650   
  25,000      Dean Foods Co.      413,000   
  67,500      Flowers Foods Inc.      1,669,950   
  80,000      General Mills Inc.      4,490,400   
  80,200      Inventure Foods Inc.†      712,176   
  5,400      John B Sanfilippo & Son Inc.      276,804   
  67,500      Kellogg Co.      4,492,125   
  35,000      Kerry Group plc, Cl. A      2,614,059   
  150,000      Kikkoman Corp.      4,101,196   
  66,000      Lifeway Foods Inc.†      691,680   
  23,000      Maple Leaf Foods Inc.      379,685   
  16,000      MEIJI Holdings Co.Ltd.      1,165,673   
  115,000      Mondelēz International Inc., Cl. A      4,815,050   
  52,000      Nestlé SA      3,908,270   
  50,000      Post Holdings Inc.†      2,955,000   
  50,000      Snyder’s-Lance Inc.      1,686,500   
  30,000      The Kraft Heinz Co.      2,117,400   
  12,000      The Hain Celestial Group Inc.†      619,200   

Shares

        

Market

Value

 
  27,000      The J.M. Smucker Co.    $ 3,080,430   
  110,000      Tingyi (Cayman Islands) Holding Corp      174,863   
  75,000      Unilever plc, ADR      3,058,500   
  65,000      Yakult Honsha Co.Ltd.      3,218,439   
    

 

 

 
       52,890,001   
    

 

 

 
  Food and Beverage — 0.1%   
  5,000      TreeHouse Foods Inc.†      388,950   
    

 

 

 
  Food and Staples Retailing — 7.7%   
  650      Blue Buffalo Pet Products Inc.†      11,642   
  30,000      CST Brands Inc.      1,009,800   
  87,000      CVS Health Corp      8,393,760   
  32,000      GNC Holdings Inc., Cl. A      1,293,440   
  30,000      Ingles Markets Inc., Cl. A      1,434,900   
  80,000      The Kroger Co.      2,885,600   
  51,500      United Natural Foods Inc.†      2,498,265   
  24,000      Vitamin Shoppe, Inc.†      783,360   
  10,000      Walgreens Boots Alliance Inc.      831,000   
  98,000      Whole Foods Market Inc.      3,101,700   
    

 

 

 
       22,243,467   
    

 

 

 
  Health Care Equipment and Supplies — 15.2%   
  40,000      Aramark      1,185,600   
  40,000      Baxter International Inc.      1,314,000   
  35,001      Becton, Dickinson and Co.      4,643,192   
  46,000      Boston Scientific Corp.†      754,860   
  90,000      Cardiovascular Systems Inc.†      1,425,600   
  125,000      CareDx Inc.†      521,250   
  20,000      Cutera Inc.†      261,600   
  22,000      Exactech Inc.†      383,460   
  45,000      Gerresheimer AG      3,280,480   
  10,000      Greatbatch Inc.†      564,200   
  9,400      Henry Schein Inc.†      1,247,568   
  8,300      ICU Medical Inc.†      908,850   
  200,000      Lantheus Holdings Inc.†      860,000   
  58,580      Medtronic plc      3,921,345   
  11,000      NuVasive Inc.†      530,420   
  43,574      Orthofix International NV†      1,470,624   
  9,500      Patterson Companies Inc.      410,875   
  5,000      Smith & Nephew plc, ADR      175,000   
  80,000      Sparton Corp.†      1,712,000   
  20,000      St. Jude Medical Inc.      1,261,800   
  25,000      Stryker Corp.      2,352,500   
  76,424      SurModics Inc.†      1,669,100   
  20,000      The Cooper Companies Inc.      2,977,200   
  100,000      Thoratec Corp.†      6,326,000   
  75,000      Trinity Biotech plc, ADR      858,000   
  8,757      VWR Corp.†      224,967   
  25,900      Zimmer Biomet Holdings Inc.      2,432,787   
    

 

 

 
       43,673,278   
    

 

 

 
  Health Care Providers and Services — 17.0%   
  525,000      AdCare Health Systems Inc.      1,743,000   
 

 

See accompanying notes to schedule of investments.

 

2


The Gabelli Healthcare & WellnessRx Trust

Schedule of Investments (Continued) — September 30, 2015 (Unaudited)

 

 

 

Shares

        

Market

Value

 
  COMMON STOCKS (Continued)   
  Health Care Providers and Services (Continued)   
  30,000      Aetna Inc.    $ 3,282,300   
  131,000      Alere Inc.†      6,307,650   
  25,000      AmerisourceBergen Corp.      2,374,750   
  20,000      Anthem Inc.      2,800,000   
  35,000      Cigna Corp.      4,725,700   
  55,000      DaVita HealthCare Partners Inc.†      3,978,150   
  65,000      HCA Holdings Inc.†      5,028,400   
  20,000      Humana Inc.      3,580,000   
  60,000      iKang Healthcare Group Inc., ADR†      888,000   
  140,000      Kindred Healthcare Inc.      2,205,000   
  5,000      Laboratory Corp. of America Holdings†      542,393   
  15,000      McKesson Corp.      2,775,450   
  25,000      Quest Diagnostics Inc.      1,536,750   
  25,000      Rhoen Klinikum AG      707,039   
  25,000      Synergy Health plc†      820,664   
  45,000      Tenet Healthcare Corp.†      1,661,400   
  34,500      UnitedHealth Group Inc.      4,002,345   
    

 

 

 
       48,958,991   
    

 

 

 
  Hotels and Gaming — 0.2%   
  8,221      Ryman Hospitality Properties Inc.      404,720   
    

 

 

 
  Household and Personal Products — 5.3%   
  28,000      Avon Products Inc.      91,000   
  22,000      Church & Dwight Co.Inc.      1,845,800   
  30,000      Colgate-Palmolive Co.      1,903,800   
  120,000      Coty Inc., Cl. A      3,247,200   
  45,000      Edgewell Personal Care Co.      3,672,000   
  30,000      Energizer Holdings Inc.      1,161,300   
  30,000      Sally Beauty Holdings Inc.†      712,500   
  12,000      The Estee Lauder Companies Inc., Cl. A      968,160   
  23,000      The Procter & Gamble Co.      1,654,620   
    

 

 

 
       15,256,380   
    

 

 

 
  Pharmaceuticals — 14.3%   
  30,000      Abbott Laboratories      1,206,600   
  13,000      Achaogen Inc.†      74,880   
  80,000      Akorn Inc.†      2,280,400   
  26,201      Allergan plc†      7,121,688   
  90,000      Baxalta Inc.      2,835,900   
  573,000      BioScrip Inc.†      1,071,510   
  42,000      Bristol-Myers Squibb Co.      2,486,400   
  12,000      Cempra Inc.†      334,080   
  20,000      Gilead Sciences Inc.      1,963,800   
  64,000      Johnson & Johnson      5,974,400   
  44,954      Juniper Pharmaceuticals Inc.†      529,558   
  14,000      KYTHERA Biopharmaceuticals Inc.†      1,049,720   
  525,000      Liberator Medical Holdings Inc.      1,233,750   
  35,000      Mallinckrodt plc†      2,237,900   
  50,000      Merck & Co. Inc.      2,469,500   
  65,000      Mylan NV†      2,616,900   

Shares

        

Market

Value

 
  1,000      Ophthotech Corp.†    $ 40,520   
  137,500      OPKO Health Inc.†      1,156,375   
  68,000      Pfizer Inc.      2,135,880   
  12,000      Roche Holding AG, ADR      395,400   
  800      Shire plc, ADR.      164,184   
  15,000     

WuXi PharmaTech Cayman Inc., ADR†

     648,150   
  25,000      Zoetis Inc.      1,029,500   
    

 

 

 
       41,056,995   
    

 

 

 
  Specialty Chemicals — 6.4%   
  10,000      FMC Corp.      339,100   
  38,000      International Flavors & Fragrances Inc.      3,923,880   
  101,000      Sigma-Aldrich Corp.      14,030,920   
    

 

 

 
       18,293,900   
    

 

 

 
 

TOTAL COMMON STOCKS

     276,188,474   
    

 

 

 
  PREFERRED STOCKS — 0.0%   
  Pharmaceuticals — 0.0%   
  146      BioScrip Inc., Zero Coupon†      8,273   
    

 

 

 
  RIGHTS — 0.0%   
  Health Care — 0.0%   
  40,000      American Medical Alert Corp.†      400   
  40,000      Durata Therapeutics Inc., CVR†      6,400   
  10,000      Prosensa Holding, CVR†      9,900   
  130,000      Trius Therapeutics, CVR†      16,900   
    

 

 

 
       33,600   
    

 

 

 
  Health Care Providers and Services — 0.0%   
  25,000     

Rhoen-Klinikum AG, expire 10/05/15†

     559   
    

 

 

 
 

TOTAL RIGHTS

     34,159   
    

 

 

 
  WARRANTS — 0.0%   
  Pharmaceuticals — 0.0%   
  420      BioScrip Inc., Cl. B, expire 07/27/25†      243   
  420      BioScrip Inc., Cl. B, expire 07/27/25†      240   
    

 

 

 
       483   
    

 

 

 
 

TOTAL WARRANTS

     483   
    

 

 

 

Principal
Amount

            
  U.S. GOVERNMENT OBLIGATIONS — 3.9%   
$ 11,276,000      U.S. Treasury Bills,
  0.085% to 0.240%††,
  1/07/16 to 3/31/16
     11,273,841   
    

 

 

 
 

TOTAL INVESTMENTS — 100.0%
(Cost $234,045,887)

   $ 287,505,230   
    

 

 

 
 

 

See accompanying notes to schedule of investments.

 

3


The Gabelli Healthcare & WellnessRx Trust

Schedule of Investments (Continued) — September 30, 2015 (Unaudited)

 

 

 

        

Market

Value

 
  Aggregate tax cost    $ 234,627,682   
    

 

 

 
  Gross unrealized appreciation    $ 70,217,307   
  Gross unrealized depreciation      (17,339,759
    

 

 

 
  Net unrealized appreciation/depreciation    $ 52,877,548   
    

 

 

 

 

 

  Non-income producing security.   
††   Represents annualized yield at date of purchase.   
ADR   American Depositary Receipt   
CVR   Contingent Value Right   

Geographic Diversification

  

%of
Market
Value

   

Market

Value

 

 

North America

     82.6   $ 237,549,710   

 

Europe

     12.4        35,723,124   

 

Japan

     3.6        10,318,501   

 

Latin America

     1.2        3,286,926   

 

Asia/Pacific

     0.2        626,969   
  

 

 

   

 

 

 

Total Investments

     100.0   $ 287,505,230   
  

 

 

   

 

 

 
 

 

See accompanying notes to schedule of investments.

 

4


The Gabelli Healthcare and WellnessRx Fund

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”).

Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market, but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of sixty days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than sixty days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. U.S. government obligations with maturities greater than sixty days are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded.

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

 

5


The Gabelli Healthcare and WellnessRx Fund

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 by inputs used to value the Fund’s investments as of September 30, 2015 is as follows:

 

     Valuation Inputs         
     Level 1
Quoted Prices
     Level 2 Other Significant
Observable Inputs
     Level 3 Significant
Unobservable Inputs
     Total Market Value
at 9/30/15
 

INVESTMENTS IN SECURITIES:

           

ASSETS (Market Value):

           

Common Stocks(a)

     $276,188,474         —                 —                 $276,188,474     

Preferred Stocks(a)

             —                 $  8,273                 8,273     

Rights(a)

     559         —                 33,600                 34,159     

Warrants(a)

             —                 483                 483     

U.S. Government Obligations

             $11,273,841                 —                 11,273,841     

 

 

TOTAL INVESTMENTS IN SECURITIES – ASSETS

     $276,189,033         $11,273,841                 $42,356                 $287,505,230     

 

 

 

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

The Fund did not have transfers among Level 1, Level 2, and Level 3 during the period ended September 30, 2015. The Fund’s policy is to recognize transfers among Levels as of the beginning of the reporting period.

Additional Information to Evaluate Qualitative Information.

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

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

 

6


The Gabelli Healthcare and WellnessRx Fund

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

 

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

Derivative Financial Instruments. The Fund may engage in various portfolio investment strategies by investing in a number of derivative financial instruments for the purposes of 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 that, in the event of default, the Fund may be delayed in or prevented from obtaining payments or other contractual remedies owed to it under derivative contracts. The creditworthiness of the counterparties is closely monitored in order to minimize these risks. Participation in derivative transactions involves investment risks, transaction costs, and potential losses to which the Fund would not be subject absent the use of these strategies. The consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s ability to pay distributions.

Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for the purpose of hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency translations. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund’s portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. At September 30, 2015, the Fund held no investments in forward foreign exchange contracts.

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 as of January 1, 2013. These trading restrictions permit the Fund to engage in commodity interest transactions that include (i) “bona fide hedging” transactions, as that term is defined and interpreted by the CFTC and its staff, without regard to the percentage of the Fund’s assets committed to margin and options premiums and

 

7


The Gabelli Healthcare and WellnessRx Fund

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

 

(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 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 may invest without limit in restricted securities. 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 does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid if they satisfy liquidity standards established by the Board.

 

8


The Gabelli Healthcare and WellnessRx Fund

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

 

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, 2015, 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.

 

9


THE GABELLI HEALTHCARE & WELLNESSRx TRUST

One Corporate Center

Rye, NY 10580-1422

Portfolio Management Team Biographies

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

Jeffrey J. Jonas, CFA, joined Gabelli in 2003 as a research analyst. He focuses on companies in the cardiovascular, healthcare services, and pharmacy benefits management sectors, among others. He also serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Fund Complex. Mr. Jonas was a Presidential Scholar at Boston College, where he received a BS in Finance and Management Information Systems.

Kevin V. Dreyer joined Gabelli in 2005 as a research analyst covering companies within the consumer sector. He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Gabelli/GAMCO Fund Complex. Mr. Dreyer received a BSE from the University of Pennsylvania and an MBA from Columbia Business School.

 

 

 

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. 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 “XXGRX.”

 

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 HEALTHCARE & WELLNESSRX 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   OFFICERS

Mario J. Gabelli, CFA

Chairman &

Chief Executive Officer,

GAMCO Investors, Inc.

 

Anthony J. Colavita

President,

Anthony J. Colavita, P.C.

 

James P. Conn

Former Managing Director &

Chief Investment Officer,

Financial Security Assurance

Holdings Ltd.

 

Vincent D. Enright

Former Senior Vice President &

Chief Financial Officer,

KeySpan Corp.

 

Robert C. Kolodny, MD

Physician,

Principal of KBS

Management LLC

 

Kuni Nakamura

President,

Advanced Polymer, Inc.

 

Anthonie C. van Ekris

Chairman,

BALMAC International, Inc.

 

Salvatore J. Zizza

Chairman,

Zizza & Associates Corp.

 

Agnes Mullady

President

 

Joseph H. Egan

Treasurer

 

Andrea R. Mango

Secretary & Vice President

 

Richard J. Walz

Chief Compliance Officer

 

Carter W. Austin

Vice President

 

Wayne C. Pinsent, CFA

Vice President & Ombudsman

 

David I. Schachter

Vice President

 

Adam E. Tokar

Vice President

 

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.

 

 

GRX Q3/2015

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 Healthcare & WellnessRx Trust

 

By (Signature and Title)*

 

  /s/ Agnes Mullady

 

      Agnes Mullady, Principal Executive Officer

 

Date

 

    11/25/2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)*

 

  /s/ Agnes Mullady

 

      Agnes Mullady, Principal Executive Officer

 

Date

 

    11/25/2015

 

By (Signature and Title)*

 

  /s/ Joseph Egan

 

      Joseph Egan, Principal Financial Officer

 

Date

 

    11/25/2015

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