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:  March 31, 2016

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

First Quarter Report — March 31, 2016

(Y)our Portfolio Management Team

 

LOGO

To Our Shareholders,

For the quarter ended March 31, 2016, the net asset value (“NAV”) total return for The Gabelli Healthcare & WellnessRx Trust (the “Fund”) was (0.6)% compared with a total return of (5.5)% for the Standard & Poor’s (“S&P”) 500 Health Care Index. The total return for the Fund’s publicly traded shares was (2.7)%. The Fund’s NAV per share was $11.59, while the price of the publicly traded shares closed at $9.84 on the New York Stock Exchange (“NYSE”). See below for additional performance information.

Enclosed is the schedule of investments as of March 31, 2016.

Comparative Results

 

Average Annual Returns through March 31, 2016 (a) (Unaudited)

     
     Quarter     1 Year     3 Year     5 Year     Since
Inception
(06/28/07)
   

Gabelli Healthcare & WellnessRx Trust

            

NAV Total Return (b)

     (0.59)     (4.91)     13.41     15.93     10.70%     

Investment Total Return (c)

     (2.73)        (8.15)        8.90        13.77        8.06         

S&P 500 Health Care Index

     (5.50)        (5.18)        15.64        17.64        9.85         

S&P 500 Index

     1.35        1.78        11.82        11.58        5.91         

S&P 500 Consumer Staples Index

     5.57        11.43        12.84        15.18        11.06         

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

     0.04        3.13        14.24        16.41        10.46         
  (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 — March 31, 2016 (Unaudited)

 

 

Shares

        

Market

Value

 
 

COMMON STOCKS — 93.3%

  
 

Beverages — 7.8%

  
  35,000     

Campbell Soup Co.

   $ 2,232,650   
  46,000     

Danone SA

     3,271,993   
  45,000     

Dr Pepper Snapple Group Inc.

     4,023,900   
  26,000     

ITO EN Ltd.

     821,271   
  29,000     

Massimo Zanetti Beverage Group SpA†

     231,984   
  10,000     

Mead Johnson Nutrition Co.

     849,700   
  35,000     

Morinaga Milk Industry Co. Ltd.

     187,525   
  330,000     

Parmalat SpA

     913,235   
  35,000     

PepsiCo Inc.

     3,586,800   
  30,000     

Suntory Beverage & Food Ltd.

     1,351,459   
  60,000     

The Coca-Cola Co.

     2,783,400   
  50,000     

The WhiteWave Foods Co.†

     2,032,000   
  424,000     

Vitasoy International Holdings Ltd.

     791,446   
    

 

 

 
         23,077,363   
    

 

 

 
 

Biotechnology — 4.8%

  
  8,500     

Agilent Technologies Inc.

     338,725   
  1,000     

Alexion Pharmaceuticals Inc.†

     139,248   
  25,000     

Amgen Inc.

     3,748,250   
  110,000     

BioTelemetry Inc.†

     1,284,800   
  25,000     

Charles River Laboratories International Inc.†

     1,898,500   
  4,000     

Illumina Inc.†

     648,440   
  75,000     

Myriad Genetics Inc.†

     2,807,250   
  425,000     

NeoGenomics Inc.†

     2,864,500   
  300     

Regeneron Pharmaceuticals Inc.†

     108,132   
  11,000     

Tetraphase Pharmaceuticals Inc.†

     50,930   
  1,600     

Waters Corp.†

     211,072   
    

 

 

 
       14,099,847   
    

 

 

 
 

Electronics — 1.7%

  
  35,000     

Thermo Fisher Scientific Inc.

     4,955,650   
    

 

 

 
 

Food — 19.4%

  
  15,000     

Calavo Growers Inc.

     855,900   
  60,000     

China Mengniu Dairy Co. Ltd.

     95,445   
  2,000     

Chr. Hansen Holding A/S

     134,260   
  115,000     

ConAgra Foods Inc.

     5,131,300   
  25,000     

Dean Foods Co.

     433,000   
  67,500     

Flowers Foods Inc.

     1,246,050   
  82,000     

General Mills Inc.

     5,194,700   
  80,000     

Inventure Foods Inc.†

     452,000   
  5,400     

John B Sanfilippo & Son Inc.

     373,086   
  67,500     

Kellogg Co.

     5,167,125   
  35,000     

Kerry Group plc, Cl. A

     3,264,187   
  150,000     

Kikkoman Corp.

     4,931,361   
  67,000     

Lifeway Foods Inc.†

     725,610   
  23,000     

Maple Leaf Foods Inc.

     480,808   
  16,000     

MEIJI Holdings Co. Ltd.

     1,286,596   
  120,000     

Mondelēz International Inc., Cl. A

     4,814,400   
  53,000     

Nestlé SA

     3,960,324   
  50,000     

Post Holdings Inc.†

     3,438,500   

Shares

       

Market

Value

 
  50,000     

Snyder’s-Lance Inc.

  $ 1,574,000   
  30,000     

The Kraft Heinz Co.

    2,356,800   
  12,000     

The Hain Celestial Group Inc.†

    490,920   
  27,000     

The J.M. Smucker Co.

    3,505,680   
  110,000     

Tingyi (Cayman Islands) Holding Corp.

    122,941   
  10,000     

TreeHouse Foods Inc.†

    867,500   
  75,000     

Unilever plc, ADR

    3,388,500   
  65,000     

Yakult Honsha Co. Ltd.

    2,879,071   
   

 

 

 
      57,170,064   
   

 

 

 
 

Food and Staples Retailing — 7.5%

 
  30,000     

CST Brands Inc.

    1,148,700   
  92,000     

CVS Health Corp.

    9,543,160   
  5,000     

GNC Holdings Inc., Cl. A

    158,750   
  30,000     

Ingles Markets Inc., Cl. A

    1,125,000   
  80,000     

The Kroger Co.

    3,060,000   
  113,000     

United Natural Foods Inc.†

    4,553,900   
  2,000     

Vitamin Shoppe, Inc.†

    61,920   
  10,000     

Walgreens Boots Alliance Inc.

    842,400   
  54,000     

Whole Foods Market Inc.

    1,679,940   
   

 

 

 
        22,173,770   
   

 

 

 
 

Health Care Equipment and Supplies — 13.9%

  

  60,000     

Baxter International Inc.

    2,464,800   
  35,001     

Becton, Dickinson and Co.

    5,313,805   
  45,000     

Boston Scientific Corp.†

    846,450   
  35,000     

Cardiovascular Systems Inc.†

    362,950   
  71,672     

CareDx Inc.†

    355,493   
  18,000     

Cutera Inc.†

    202,500   
  30,000     

Exactech Inc.†

    607,800   
  45,000     

Gerresheimer AG

    3,529,603   
  12,000     

Globus Medical Inc., Cl. A†

    285,000   
  70,000     

Greatbatch Inc.†

    2,494,800   
  9,400     

Henry Schein Inc.†

    1,622,722   
  16,000     

ICU Medical Inc.†

    1,665,600   
  85,000     

InfuSystems Holdings Inc.†

    299,200   
  100,000     

Lantheus Holdings Inc.†

    189,000   
  52,580     

Medtronic plc

    3,943,500   
  12,000     

NuVasive Inc.†

    583,800   
  23,333     

Nuvectra Corp.†

    126,233   
  45,574     

Orthofix International NV†

    1,892,232   
  13,000     

Patterson Companies Inc.

    604,890   
  5,000     

Smith & Nephew plc, ADR

    166,600   
  60,000     

Sparton Corp.†

    1,079,400   
  50,000     

St. Jude Medical Inc.

    2,750,000   
  25,000     

Stryker Corp.

    2,682,250   
  76,424     

SurModics Inc.†

    1,406,966   
  20,000     

The Cooper Companies Inc.

    3,079,400   
  25,000     

Vascular Solutions Inc.†

    813,250   
  15,900     

Zimmer Biomet Holdings Inc.

    1,695,417   
   

 

 

 
      41,063,661   
   

 

 

 
 

 

See accompanying notes to schedule of investments.

 

2


The Gabelli Healthcare & WellnessRx Trust

Schedule of Investments (Continued) — March 31, 2016 (Unaudited)

 

 

 

Shares

        

Market

Value

 
 

COMMON STOCKS (Continued)

  
 

Health Care Providers and Services — 17.7%

  

  566,773     

AdCare Health Systems Inc.

   $ 1,314,913   
  10,000     

Aetna Inc.

     1,123,500   
  153,000     

Alere Inc.†

     7,743,330   
  25,000     

AmerisourceBergen Corp.

     2,163,750   
  20,000     

Amsurg Corp.†

     1,492,000   
  15,000     

Anthem Inc.

     2,084,850   
  15,000     

Chemed Corp.

     2,031,750   
  35,000     

Cigna Corp.

     4,803,400   
  55,000     

DaVita HealthCare Partners Inc.†

     4,035,900   
  25,000     

Diplomat Pharmacy Inc.†

     685,000   
  70,000     

HCA Holdings Inc.†

     5,463,500   
  20,000     

Humana Inc.

     3,659,000   
  100,000     

Kindred Healthcare Inc.

     1,235,000   
  26,000     

Laboratory Corp. of America Holdings†

     3,045,427   
  15,000     

McKesson Corp.

     2,358,750   
  25,000     

Rhoen Klinikum AG

     778,041   
  55,000     

Team Health Holdings Inc.†

     2,299,550   
  5,000     

Tenet Healthcare Corp.†

     144,650   
  33,000     

UnitedHealth Group Inc.

     4,253,700   
  25,000     

VCA Inc.†

     1,442,250   
    

 

 

 
         52,158,261   
    

 

 

 
 

Hotels and Gaming — 0.1%

  
  9,021     

Ryman Hospitality Properties Inc.

     464,401   
    

 

 

 
 

Household and Personal Products — 5.2%

  

  16,000     

Avon Products Inc.

     76,960   
  22,000     

Church & Dwight Co. Inc.

     2,027,960   
  30,000     

Colgate-Palmolive Co.

     2,119,500   
  120,000     

Coty Inc., Cl. A

     3,339,600   
  43,000     

Edgewell Personal Care Co.

     3,462,790   
  30,000     

Energizer Holdings Inc.

     1,215,300   
  25,000     

Sally Beauty Holdings Inc.†

     809,500   
  12,000     

The Estee Lauder Companies Inc., Cl. A

     1,131,720   
  13,000     

The Procter & Gamble Co.

     1,070,030   
    

 

 

 
       15,253,360   
    

 

 

 
 

Pharmaceuticals — 13.7%

  
  30,000     

Abbott Laboratories

     1,254,900   
  14,000     

Achaogen Inc.†

     38,640   
  120,000     

Akorn Inc.†

     2,823,600   
  26,401     

Allergan plc†

     7,076,255   
  90,000     

Baxalta Inc.

     3,636,000   
  100,000     

BioScrip Inc.†

     214,000   
  42,000     

Bristol-Myers Squibb Co.

     2,682,960   
  12,000     

Cempra Inc.†

     210,240   
  40,000     

Gilead Sciences Inc.

     3,674,400   
  54,000     

Johnson & Johnson

     5,842,800   
  55,000     

Juniper Pharmaceuticals Inc.†

     363,550   
  40,000     

Mallinckrodt plc†

     2,451,200   
  50,000     

Merck & Co. Inc.

     2,645,500   

Shares

        

Market

Value

 
  30,000     

Mylan NV†

   $ 1,390,500   
  1,000     

Ophthotech Corp.†

     42,270   
  68,000     

Pfizer Inc.

     2,015,520   
  12,000     

Roche Holding AG, ADR

     367,500   
  40,000     

Teva Pharmaceutical Industries Ltd., ADR

     2,140,400   
  15,000     

Valeant Pharmaceuticals International Inc.†

     394,500   
  30,000     

Zoetis Inc.

     1,329,900   
    

 

 

 
       40,594,635   
    

 

 

 
 

Specialty Chemicals — 1.5%

  
  38,000     

International Flavors & Fragrances Inc.

     4,323,260   
    

 

 

 
 

TOTAL COMMON STOCKS

     275,334,272   
    

 

 

 
 

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†

     0   
  10,000     

Prosensa Holding, CVR†

     9,900   
  130,000     

Trius Therapeutics, CVR†

     16,900   
    

 

 

 
       27,200   
    

 

 

 
 

TOTAL RIGHTS

     27,200   
    

 

 

 
 

WARRANTS — 0.0%

  
 

Pharmaceuticals — 0.0%

  
  420     

BioScrip Inc., Cl. A, expire 07/27/25†

     240   
  420     

BioScrip Inc., Cl. B, expire 07/27/25†

     233   
    

 

 

 
       473   
    

 

 

 
 

TOTAL WARRANTS

     473   
    

 

 

 

Principal
Amount

            
 

U.S. GOVERNMENT OBLIGATIONS — 6.7%

  

  $19,693,000     

U.S. Treasury Bills,
0.075% to 0.587%††,
04/14/16 to 09/22/16

     19,683,039   
    

 

 

 
 

TOTAL INVESTMENTS — 100.0%
(Cost $220,046,576)

   $ 295,053,257   
    

 

 

 
 

 

See accompanying notes to schedule of investments.

 

3


The Gabelli Healthcare & WellnessRx Trust

Schedule of Investments (Continued) — March 31, 2016 (Unaudited)

 

 

 

          

Market

Value

 
                    

Aggregate tax cost

   $ 221,276,186   
    

 

 

 
 

Gross unrealized appreciation

   $ 82,066,863   
 

Gross unrealized depreciation

     (8,289,792
    

 

 

 
 

Net unrealized appreciation/depreciation

   $ 73,777,071   
    

 

 

 

 

 Non-income producing security.

††

 Represents annualized yield at date of purchase.

ADR

 American Depositary Receipt

CVR

 Contingent Value Right

 

 

Geographic Diversification

  

% of Total
Investments

    

Market

Value

 

North America

     82.6%           $243,685,828   

Europe

     12.5              37,008,081   

Japan

     3.9              11,457,284   

Latin America

     0.7              2,110,619   

Asia/Pacific

         0.3                       791,445   

Total Investments

     100.0%           $295,053,257   
 

 

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

 

   

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

 

5


The Gabelli Healthcare and WellnessRx Fund

Notes to Schedule of Investments (Unaudited) (Continued)

 

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of March 31, 2016 is as follows:

 

     Valuation Inputs         
     Level 1      Level 2 Other Significant      Level 3 Significant      Total Market Value  
     Quoted Prices      Observable Inputs      Unobservable Inputs      at 3/31/16  

INVESTMENTS IN SECURITIES:

           

ASSETS (Market Value):

           

Common Stocks(a)

     $275,334,272         —                     —                   $275,334,272       

Preferred Stocks(a)

             —                     $  8,273                   8,273       

Rights(a)

             —                     27,200                   27,200       

Warrants(a)

             $            473                     —                   473       

U.S. Government Obligations

             19,683,039                     —                   19,683,039       

 

 

TOTAL INVESTMENTS IN SECURITIES – ASSETS

     $275,334,272         $19,683,512                     $35,473                   $295,053,257       

 

 

 

(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 March 31, 2016. 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 may 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 March 31, 2016, 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 March 31, 2016, 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, 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 Chief Executive Officer and Chairman of the Board of Directors 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.

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. Currently he is a Managing Director and Co-Chief Investment Officer for GAMCO Investors, Inc.’s Value team. In addition, he 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

Mario J. Gabelli, CFA

Chairman &

Chief Executive Officer,

GAMCO Investors, Inc.

Chairman and

Chief Executive Officer,

Associated Capital Group, 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.

Jeffrey J. Jonas, CFA

Portfolio Manager,

Gabelli Funds, LLC

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.

OFFICERS

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 Q1/2016

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  

    5/27/2016

 

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  

    5/27/2016

 

 

By (Signature and Title)*

 

   /s/ Joseph Egan

 
 

       Joseph Egan, Principal Financial Officer

 

 

Date  

    5/27/2016

 

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