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<SEC-DOCUMENT>0000950123-06-015587.txt : 20061227
<SEC-HEADER>0000950123-06-015587.hdr.sgml : 20061227
<ACCEPTANCE-DATETIME>20061227100935
ACCESSION NUMBER:		0000950123-06-015587
CONFORMED SUBMISSION TYPE:	N-2/A
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20061227
DATE AS OF CHANGE:		20061227

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Gabelli Global Deal Fund
		CENTRAL INDEX KEY:			0001378701
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2/A
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21969
		FILM NUMBER:		061299768

	BUSINESS ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
		BUSINESS PHONE:		914-921-5100

	MAIL ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Gabelli Global Deal Fund
		CENTRAL INDEX KEY:			0001378701
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-138141
		FILM NUMBER:		061299769

	BUSINESS ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
		BUSINESS PHONE:		914-921-5100

	MAIL ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2/A
<SEQUENCE>1
<FILENAME>y28144a3nv2za.htm
<DESCRIPTION>AMENDMENT NO. 3 TO FORM N-2
<TEXT>
<HTML>
<HEAD>
<TITLE>N-2/A</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>As filed with the Securities and Exchange Commission on
    December&#160;27, 2006<BR>
    Securities Act Registration
    <FONT style="white-space: nowrap">No.&#160;333-138141</FONT>
    and Investment Company Act of 1940 Registration
    No.&#160;811-21969</B>
</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNITED
    STATES SECURITIES AND EXCHANGE COMMISSION<BR>
    <FONT style="font-size: 12pt">Washington,&#160;D.C.
    20549</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 16pt"><FONT style="white-space: nowrap">FORM&#160;N-2</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">Registration Statement under
    the Securities Act of
    1933&#160;&#160;<FONT face="wingdings">&#254;</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">Pre-Effective Amendment
    No.&#160;3&#160;&#160;<FONT face="wingdings">&#254;</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">Post-Effective Amendment
    No.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">Registration Statement under
    the Investment Company Act of
    1940&#160;&#160;<FONT face="wingdings">&#254;</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">Amendment
    No.&#160;3&#160;&#160;<FONT face="wingdings">&#254;</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 24pt">The Gabelli Global Deal
    Fund</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">(Exact Name of Registrant as
    Specified in the Declaration of Trust)</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>One Corporate Center</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Rye, New York 10580-1422</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">(Address of Principal Executive
    Offices)</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(800)&#160;422-3554</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(Registrant&#146;s telephone number, including area code)</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Agnes Mullady</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Gabelli Global Deal Fund</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>One Corporate Center</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Rye, New York 10580-1422</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(914)&#160;921-5100</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(Name and Address of Agent for Service)</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Copies to:</B>
</DIV>



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <B><FONT style="font-size: 10pt">Richard T. Prins,&#160;Esq.<BR>
    </FONT></B><FONT style="font-size: 10pt">Skadden, Arps, Slate,
    Meagher&#160;&#38; Flom LLP<BR>
    Four Times Square<BR>
    New York, New York 10036<BR>
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B><FONT style="font-size: 10pt">Leonard B.
    Mackey,&#160;Jr.,&#160;Esq.<BR>
    </FONT></B><FONT style="font-size: 10pt">Clifford Chance US
    LLP<BR>
    31&#160;West 52nd&#160;Street<BR>
    New York, New York 10019<BR>
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B><FONT style="font-size: 10pt">James E. McKee,&#160;Esq.<BR>
    </FONT></B><FONT style="font-size: 10pt">The Gabelli Global Deal
    Fund<BR>
    One Corporate Center<BR>
    Rye, New York 10580-1422<BR>
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 5%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Approximate date of proposed public offering:</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 5%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>As soon as practicable after the effective date of this
    Registration Statement.</B>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 5%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any securities being registered on this form will be offered
    on a delayed or continuous basis in reliance on Rule&#160;415
    under the Securities Act of 1933, other than securities offered
    in connection with dividend or interest reinvestment plans,
    check the following box.&#160;&#160;<FONT face="wingdings">o
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 5%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is proposed that this filing will become effective (check
    appropriate box): when declared effective pursuant to
    section&#160;8(c).
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CALCULATION
    OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="44%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Amount of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Title of Securities<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Amount Being<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Offering<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Aggregate<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Registration<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Being Registered</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Registered</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Price per Unit</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Offering Price(1)</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Fee(2)</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom" style="border-top: 1px solid #000000">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Common Shares, $0.001&#160;par
    value
    </FONT>
</DIV>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    <FONT style="font-size: 10pt">100,000&#160;shares
    </FONT>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    <FONT style="font-size: 10pt">$20.00
    </FONT>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    <FONT style="font-size: 10pt">$2,000,000
    </FONT>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    <FONT style="font-size: 10pt">$214.00
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (1)&#160;
</TD>
    <TD align="left">    Estimated solely for the purpose of calculating the registration
    fee.
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>



<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (2)&#160;
</TD>
    <TD align="left">    $214.00 was previously paid to the Securities and Exchange
    Commission in connection with the initial filing of the
    Registration Statement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 5%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The registrant hereby amends this registration statement on
    such date or dates as may be necessary to delay its effective
    date until the registrant shall file a further amendment which
    specifically states that this registration statement shall
    thereafter become effective in accordance with section&#160;8(a)
    of the Securities Act of 1933 or until the registration
    statement shall become effective on such date as the Securities
    and Exchange Commission, acting pursuant to said
    section&#160;8(a), may determine.</B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    GABELLI GLOBAL DEAL FUND<BR>
    CROSS REFERENCE SHEET<BR>
    <BR>
    Part&#160;A&#160;&#151; Prospectus</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="9%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="43%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="43%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Items in Part A of
    <FONT style="white-space: nowrap">Form&#160;N-2</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Location in Prospectus</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;1.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Outside Front Cover
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Cover Page
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;2.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Cover Pages; Other Offering
    Information
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Cover Page
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;3.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Fee Table and Synopsis
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Prospectus Summary; Summary of
    Fund&#160;Expenses
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;4.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Financial Highlights
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not Applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;5.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Plan of Distribution
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Cover Page; Prospectus Summary;
    Underwriters
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;6.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Selling Shareholders
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not Applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;7.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Use of Proceeds
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Use of Proceeds; Prospectus Summary
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;8.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">General Description of the
    Registrant
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Prospectus Summary; Closed-End
    Fund&#160;Structure
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;9.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Management
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Management of the Fund; Portfolio
    Transactions; Custodian and Transfer Agent; Summary of
    Fund&#160;Expenses
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;10.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Capital Stock, Long-Term Debt, and
    Other Securities
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Description of the Shares;
    Dividends and Distributions; Automatic Dividend Reinvestment and
    Voluntary Cash Purchase Plan; Anti-Takeover Provisions; Taxation
    of the Fund
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;11.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Defaults and Arrears on Senior
    Securities
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not Applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;12.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Legal Proceedings
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not Applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;13.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Table of Contents of the Statement
    of Additional Information
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Table of Contents for the
    Statement of Additional Information
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Part&#160;B&#160;&#151;
    Statement of Additional Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="9%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="43%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="43%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;14.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Cover Page
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Cover Page
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;15.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Table of Contents
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Cover Page
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;16.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">General Information and History
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not Applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;17.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Investment Objective and Policies
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Investment Objective and Policies
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;18.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Management
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Management of the Fund; Portfolio
    Transactions
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;19.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Control Persons and Principal
    Holders of Securities
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not Applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;20.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Investment Advisory and Other
    Services
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Management of the Fund
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;21.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Portfolio Managers
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not Applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;22.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Brokerage Allocation and Other
    Practices
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Portfolio Transactions
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;23.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Tax Status
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Taxation
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Item&#160;24.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Financial Statements
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Financial Statements
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Part&#160;C&#160;&#151;
    Other Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">Items&#160;25-34</FONT>
    have been answered in Part&#160;C of this Registration Statement
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD>
<FONT style="font-size: 9pt; font-family: Arial, Helvetica; color: #E8112D">The
information contained in this prospectus is not complete and may
be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D">Subject to Completion</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D">Preliminary Prospectus dated
    December&#160;27, 2006</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><U>PROSPECTUS</U></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="y28144a3y2814402.gif" alt="(GABELLI LOGO)" ><B> </B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Shares</FONT></B>
</DIV>

<DIV style="margin-top: 7pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 24pt">The Gabelli Global Deal
    Fund</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Common Shares of Beneficial
    Interest<BR>
    $20.00&#160;per Share</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 19%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=90 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Gabelli Global Deal Fund, or the &#147;Fund,&#148; is a
    newly organized, non-diversified, closed-end management
    investment company, formed as a Delaware statutory trust,
    registered under the Investment Company Act of 1940. The
    Fund&#146;s investment objective is to achieve absolute returns
    in various market conditions without excessive risk of capital.
    Absolute returns are defined as positive total returns,
    regardless of the direction of securities markets. The Fund will
    seek to achieve its objective by investing primarily in merger
    arbitrage transactions and, to a lesser extent, in corporate
    reorganizations involving stubs, spin-offs and liquidations.
    Gabelli Funds, LLC serves as &#147;Investment Adviser&#148; to
    the Fund. An investment in the Fund is not appropriate for all
    investors. We cannot assure you that the Fund will achieve its
    objective.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund expects the common shares to be listed on the New York
    Stock Exchange (&#147;NYSE&#148;), subject to notice of
    issuance, under the symbol &#147;GDL.&#148;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Because the Fund is newly organized, its shares have no
    history of public trading. Shares of closed-end funds often
    trade at a discount from net asset value and this creates a risk
    of loss for an investor purchasing shares in an initial public
    offering.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in the Fund&#146;s common shares involves risks.
    See &#147;Risk Factors and Special Considerations&#148; on
    page&#160;18 for factors that should be considered before
    investing in the common shares of the Fund.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 19%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=90 -->



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="72%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=align1 -->
    <TD width="11%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Per Share</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Total</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>(1)<BR>
    </B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Public Offering Price
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $20
</TD>
<TD nowrap align="left" valign="bottom">
    .00
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -11pt; margin-left: 11pt">
    <FONT style="font-size: 8pt">Sales Load(2)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="left" valign="bottom">
    .90
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -11pt; margin-left: 11pt">
    <FONT style="font-size: 8pt">Estimated offering expenses(3)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="left" valign="bottom">
    .04
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -11pt; margin-left: 11pt">
    <FONT style="font-size: 8pt">Proceeds, after expenses, to the
    Fund
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $19
</TD>
<TD nowrap align="left" valign="bottom">
    .06
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="3%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (1)&#160;
</TD>
    <TD align="left">
    The Fund has granted the Underwriters an option to purchase up
    to&#160;&#160;&#160;&#160;&#160; additional common shares at the
    public offering price, less the sales load, within 45&#160;days
    of the date of this prospectus solely to cover overallotments,
    if any. If such option is exercised in full, the total public
    offering price, sales load, estimated offering expenses and
    proceeds, after expenses, to the Fund will be
    $&#160;&#160;&#160;&#160;&#160;,
    $&#160;&#160;&#160;&#160;&#160;, $&#160;&#160;&#160;&#160;&#160;
    and $&#160;&#160;&#160;&#160;&#160;, respectively. See
    &#147;Underwriting.&#148;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (2)&#160;
</TD>
    <TD align="left">
    The Fund has agreed to pay the underwriters $.00667&#160;per
    common share as a partial reimbursement of expenses incurred in
    connection with the offering. Gabelli Funds, LLC has agreed to
    pay certain additional compensation to Merrill Lynch, Pierce,
    Fenner&#160;&#38; Smith Incorporated and a structuring fee to
    Citigroup Global Markets Inc. The total amount of this
    compensation plus the amounts paid by the Fund for payment of
    certain expenses of counsel will not exceed 4.50% of the total
    price to the public of the common shares sold in this offering.
    See &#147;Underwriting.&#148;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (3)&#160;
</TD>
    <TD align="left">
    The aggregate offering expenses (other than sales load) to be
    incurred by the Fund are estimated to be
    $&#160;&#160;&#160;&#160;&#160;.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved these
    securities or determined if this prospectus is truthful or
    complete.  Any representation to the contrary is a criminal
    offense.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares will be ready for delivery on or
    about&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 19%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=90 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 11pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Merrill Lynch &#38; Co.</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>&#160;&#160;&#160;&#160;&#160;Citigroup</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    <B>A.G. Edwards</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B><FONT style="font-size: 11pt">Gabelli &#38; Company,
    Inc.</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B><FONT style="font-size: 11pt">&#160;BB&#38;T Capital
    Markets</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="right" valign="top">
    <B><FONT style="font-size: 11pt">Robert W. Baird &#38;
    Co.</FONT></B>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B><FONT style="font-size: 11pt">Deutsche Bank
    Securities</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B><FONT style="font-size: 11pt">Ferris, Baker Watts&#160;<BR>
    </FONT><FONT style="font-size: 8pt">Incorporated</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="right" valign="top">
    <B><FONT style="font-size: 11pt">J.J.B. Hilliard, W.L. Lyons,
    Inc.</FONT></B>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B><FONT style="font-size: 11pt">Ladenburg Thalmann &#38; Co.
    Inc.</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" align="right" valign="top">
    <B><FONT style="font-size: 11pt">Oppenheimer&#160;&#38;&#160;Co.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Raymond
    James<BR>
    </FONT></B>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B><FONT style="font-size: 11pt">Wells Fargo
    Securities</FONT></B><FONT style="font-size: 11pt">
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 19%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=90 -->

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-size: 9pt; font-family: 'Times New Roman', Times">The
    date of this prospectus
    is&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007.
    </FONT>
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>(continued from previous page)</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus sets forth concisely the information about the
    Fund that a prospective investor ought to know before investing,
    and should be retained for future reference. A Statement of
    Additional Information, dated&#160;&#160;&#160;&#160;&#160;,
    2007 (the &#147;SAI&#148;), containing additional information
    about the Fund, has been filed with the Securities and Exchange
    Commission and is incorporated by reference in its entirety into
    this prospectus. You may request a free copy of the SAI, the
    table of contents of which is on page&#160;43 of this
    prospectus, and make shareholder inquiries, by calling
    (800)&#160;GABELLI
    <FONT style="white-space: nowrap">(422-3554)</FONT>
    or by writing to the Fund, or obtain a copy (and other
    information regarding the Fund, including its annual and
    semi-annual reports to shareholders when available) from the
    Fund&#146;s web site (http://www.gabelli.com).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s common shares do not represent a deposit or
    obligation of, and are not guaranteed or endorsed by, any bank
    or other insured depository institution, and are not federally
    insured by the Federal Deposit Insurance Corporation, the
    Federal Reserve Board or any other government agency.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'><FONT style="font-size: 10pt">Prospectus
    Summary</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">1
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'><FONT style="font-size: 10pt">Summary of
    Fund&#160;Expenses</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'><FONT style="font-size: 10pt">Use of
    Proceeds</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">12
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'><FONT style="font-size: 10pt">The Fund</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">12
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'><FONT style="font-size: 10pt">Investment
    Objective and Policies</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">12
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'><FONT style="font-size: 10pt">Risk Factors and
    Special Considerations</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'><FONT style="font-size: 10pt">Management of The
    Fund</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">26
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'><FONT style="font-size: 10pt">Description of The
    Shares</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'><FONT style="font-size: 10pt">Anti-Takeover
    Provisions of The Fund&#146;s Governing Documents</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">33
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'><FONT style="font-size: 10pt">Closed-End
    Fund&#160;Structure</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">34
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'><FONT style="font-size: 10pt">Repurchase of
    Common Shares</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">34
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'><FONT style="font-size: 10pt">Net Asset
    Value</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">34
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'><FONT style="font-size: 10pt">Taxation</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">35
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'><FONT style="font-size: 10pt">Custodian, Transfer
    Agent, and Dividend Disbursing Agent</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">38
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'><FONT style="font-size: 10pt">Underwriting</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">39
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'><FONT style="font-size: 10pt">Legal
    Matters</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">41
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'><FONT style="font-size: 10pt">Independent
    Registered Public Accounting Firm</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">41
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'><FONT style="font-size: 10pt">Additional
    Information</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">41
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'><FONT style="font-size: 10pt">Privacy Principles
    of The Fund</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">42
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'><FONT style="font-size: 10pt">Special
    Note&#160;Regarding Forward-Looking Statements</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">42
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'><FONT style="font-size: 10pt">Table of Contents
    of the SAI</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">43
    </FONT>
</TD>
<TD>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should rely only on the information contained or
    incorporated by reference in this prospectus. The Fund has not,
    and the underwriters have not, authorized anyone to provide you
    with different information. If anyone provides you with
    different or inconsistent information, you should not rely on
    it. The Fund is not, and the underwriters are not, making an
    offer to sell these securities in any state where the offer or
    sale is not permitted.</B>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This is only a summary. This summary may not contain all of
    the information that you should consider before investing in the
    common shares. You should review the more detailed information
    contained in this prospectus and the SAI.</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>The Fund</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The Gabelli Global Deal Fund is a newly organized,
    non-diversified, closed-end management investment company
    organized under the laws of the State of Delaware. Throughout
    this prospectus, we refer to The Gabelli Global Deal Fund as the
    &#147;Fund&#148; or as &#147;we,&#148; &#147;us&#148; or
    &#147;our.&#148; See &#147;The Fund.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>The Offering</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund is offering common shares of beneficial interest at an
    initial offering price of $20.00 per share through a group of
    underwriters (the &#147;Underwriters&#148;) led by Merrill
    Lynch, Pierce, Fenner&#160;&#38; Smith Incorporated
    (&#147;Merrill Lynch&#148;). The common shares of beneficial
    interest are called &#147;common shares&#148; in the rest of
    this prospectus. You must purchase at least 100&#160;common
    shares in order to participate in this offering. The Fund has
    given the Underwriters an option to purchase up
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    additional common shares to cover orders in excess of common
    shares. The Investment Adviser (together with its affiliates)
    intends to purchase at least $25,000,000 of the common shares
    sold in the offering. The Investment Adviser has agreed to pay
    the Fund&#146;s offering expenses (other than the sales load)
    that exceed $.04 per common share. See &#147;Underwriting.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Investment Objective</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund&#146;s investment objective is to achieve absolute
    returns in various market conditions without excessive risk of
    capital. Absolute returns are defined as positive total returns,
    regardless of the direction of securities markets. To achieve
    its investment objective, the Fund, under normal market
    conditions, will invest primarily in securities of companies
    (both domestic and foreign) involved in publicly announced
    mergers, takeovers, tender offers and leveraged buyouts and, to
    a lesser extent, in corporate reorganizations involving stubs,
    spin-offs and liquidations. The key determinants of the
    profitability of a merger arbitrage transaction are the
    probability that the deal will close, the length of time to
    closing, the likelihood that the deal price will be increased or
    decreased and the level of short-term interest rates.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Merger arbitrage is a highly specialized investment approach
    generally designed to profit from the successful completion of
    proposed mergers, takeovers, tender offers and leveraged
    buyouts. Broadly speaking, an investor purchases the stock of a
    company in the process of being acquired by another company in
    anticipation of capturing the spread between the current market
    price and the acquisition price. A &#147;stub&#148; refers to a
    small stake in a target company division or subsidiary that is
    not purchased by an acquirer in a merger, takeover or leveraged
    buyout. The arbitrageur may buy the stub, and if the acquiring
    company is successful in boosting the target company&#146;s
    appeal, the shares will benefit from a boost in price and the
    arbitrageur will profit. A spin-off occurs when an independent
    company is created from an existing part of another company
    through a distribution of new shares. An arbitrageur may </TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    benefit from the share price differential in the same manner as
    in traditional merger arbitrage if, upon completion of the
    spin-off, the separate securities trade for more in the
    aggregate than the former single security. Finally, when a
    company makes the decision to liquidate, or sell all of its
    assets, it is often worth more in liquidation than as an ongoing
    entity. An arbitrageur benefits when the company is able to
    distribute more than the price at which the stock is trading at
    the time the arbitrageur acquires its position. In order to
    minimize market exposure and volatility of such merger arbitrage
    strategies, the Fund may utilize hedging strategies, such as
    short selling and the use of options and futures. The Fund may
    hold a significant portion of its assets in liquid money market
    securities, which may include affiliated or unaffiliated money
    market mutual funds.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    As a non-diversified investment company, the Investment Company
    Act of 1940 (the &#147;1940&#160;Act&#148;) does not limit the
    proportion of the Fund&#146;s assets it may invest in securities
    of a single issuer, however, certain tax diversification
    requirements will apply at the end of each quarter.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    The Investment Adviser believes that blending traditional merger
    arbitrage for announced deals with strategies that focus on
    stubs, spin-offs and liquidations will produce absolute returns
    in excess of short-term interest rates with less volatility than
    the returns typically associated with conventional equity
    investing. A systematic and disciplined arbitrage program may
    produce attractive rates of return even in flat or down markets.
    The Investment Adviser will consider a number of factors in
    selecting merger arbitrage transactions in which to invest,
    including, but not limited to, the credibility, strategic
    motivation, and financial resources of the participants and the
    liquidity of the securities involved in the transaction.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Under normal circumstances, the Fund will invest at least 80% of
    its assets in securities or hedging arrangements relating to
    companies involved in corporate transactions or reorganizations,
    giving rise to the possibility of realizing gains upon or within
    relatively short periods of time after the completion of such
    transactions, or reorganizations. This policy is not fundamental
    and may be changed by the Fund with notice of not less than
    60&#160;days to its shareholders. In market cycles with scarce
    transaction opportunities, the Fund may seek to accomplish its
    objective of achieving absolute returns by temporarily investing
    in other assets, including, but not limited to, short-term debt
    securities, which may make it less likely for the Fund to
    achieve an attractive rate of return.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    As a global fund, the Fund may invest without limitation in the
    securities of foreign and domestic issuers. The Fund&#146;s
    investment strategy is to invest in merger arbitrage
    transactions and corporate reorganizations throughout the world.
    As the dollar volume and range of countries involved in
    significant merger arbitrage and corporate reorganizations has
    increased over the past several years, the Fund expects that its
    assets will usually be invested in several countries. Under
    normal market conditions, the Fund expects to have at least 40%
    of its assets invested in at least three countries, </TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    other than the United States. To the extent that the majority of
    mergers, takeovers, tender offers and leveraged buyouts and
    corporate reorganizations are concentrated in any given
    geographic region, such as Europe, North America or Asia, a
    relatively high proportion of the Fund&#146;s assets may be
    invested in that particular region. See &#147;Investment
    Objective and Policies.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Leverage</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund does not currently anticipate borrowing from banks or
    other financial institutions, issuing preferred shares or
    otherwise leveraging the common shares. However, the Fund will
    monitor interest rates and market conditions and anticipates
    that it will leverage the common shares at some point in the
    future if the Board of Trustees (the &#147;Board&#148;)
    determines that it is in the best interest of the common
    shareholders. The use of borrowing techniques or preferred
    shares to leverage the common shares may involve greater risk to
    common shareholders. The use of leverage may magnify the impact
    of changes in net asset value on the holders of common shares.
    In addition, the cost of leverage could exceed the return on the
    securities acquired with the proceeds of the leverage, thereby
    diminishing returns to the holders of the common shares. See
    &#147;Risk Factors and Special Considerations&#160;&#151;
    Leverage Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Distributions</B></TD>
    <TD></TD>
    <TD valign="bottom">
    In order to allow its common shareholders to realize a
    predictable, but not assured, level of cash flow and some
    periodic liquidity from their investment without having to sell
    shares, the Board has adopted a policy, which may be modified at
    any time, of paying quarterly distributions on its common
    shares. The Fund contemplates paying a minimum annual
    distribution of 8% of the average net asset value of the Fund to
    its common shareholders. Due to the Fund&#146;s anticipated high
    turnover ratio, a substantial portion of the Fund&#146;s
    distribution may consist of short-term capital gains, which are
    not tax advantaged. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Portfolio Turnover Risk.&#148; The
    Fund anticipates a level distribution in each of the first three
    quarters, principally based on the net asset value of the Fund
    at the beginning of each year, and an adjusting distribution in
    the fourth quarter of a sufficient amount to pay 8% of the
    average net asset value of the Fund, as of the last day of the
    four preceding calendar quarters, or to satisfy the minimum
    distribution requirements of the Internal Revenue Code of 1986,
    as amended (the &#147;Code&#148;), whichever is greater.
    Additionally, the Fund may also increase one or more quarterly
    distributions from the base quarterly amount stated based on
    realized income. Each quarter, the Board will review the amount
    of any potential distribution and the income, capital gains or
    capital available. Quarterly distributions to common
    shareholders are expected to be paid in March, June, September
    and December of each year. See &#147;Dividends and
    Distributions.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Automatic Dividend Reinvestment and</B> <B>Voluntary Cash</B>
    <B>Purchase Plan</B></TD>
    <TD></TD>
    <TD valign="bottom">
    Under the Fund&#146;s Automatic Dividend Reinvestment and
    Voluntary Cash Purchase Plan (the &#147;Plan&#148;), a
    shareholder whose common shares are registered in his or her own
    name will have all distributions reinvested automatically by the
    transfer agent, which is agent </TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

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<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    under the Plan, unless the shareholder elects to receive cash.
    See &#147;Automatic Dividend Reinvestment and Voluntary Cash
    Purchase Plan.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Taxation</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund expects that taxable distributions paid on the common
    shares will consist of (i)&#160;investment company taxable
    income (other than qualified dividend income), including
    interest income, short-term capital gain, and income from
    certain hedging and interest rate transactions;
    (ii)&#160;qualified dividend income (income from domestic and
    certain foreign corporations); and (iii)&#160;long-term capital
    gain (gain from the sale of a capital asset held longer than
    12&#160;months). Currently the maximum federal income tax rate
    for individuals is 15% on qualified dividend income; 15% on
    long-term capital gain; and 35% on investment company taxable
    income (other than qualified dividend income), including
    short-term capital gains. These tax rates are scheduled to apply
    through 2010. The Fund expects that a substantial portion of its
    income will consist of short-term capital gains. We cannot
    assure you what percentage of the distributions paid on the
    common shares, if any, will consist of tax advantaged qualified
    dividend income or long-term capital gains or what the tax rates
    on various types of income will be in future years.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    If, for any calendar year, the total quarterly distributions
    exceed investment company taxable income and net capital gain,
    the excess will generally be treated as a tax free return of
    capital up to the amount of a shareholder&#146;s tax basis in
    the common shares. Any distributions which (based upon the
    Fund&#146;s full year performance) constitute tax free return of
    capital will reduce a shareholder&#146;s tax basis in the common
    shares, thereby increasing such shareholder&#146;s potential
    gain or reducing his or her potential loss on the sale of the
    common shares. Any amounts constituting return of capital
    distributed to a shareholder in excess of the shareholder&#146;s
    basis in the common shares will generally be taxable to the
    shareholder as capital gain. See &#147;Taxation.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Use of Proceeds</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund will use the net proceeds from the offering to purchase
    portfolio securities in accordance with its investment objective
    and policies. The investment of the proceeds is expected to be
    substantially completed within three months; however, changes in
    market conditions could result in the Fund&#146;s anticipated
    investment period extending to as long as six months. See
    &#147;Use of Proceeds.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Listing</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The common shares are expected to be listed on the NYSE, subject
    to notice of issuance, under the trading or &#147;ticker&#148;
    symbol &#147;GDL.&#148; See &#147;Description of the
    Shares.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Risk Factors and Special Considerations</B></TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Merger Arbitrage Risk.</I>&#160;&#160;The principal risk
    associated with the Fund&#146;s investment strategy is that
    certain of the proposed reorganizations in which the Fund
    invests may be renegotiated, terminated or involve a longer time
    frame than originally contemplated, in which case losses may be
    realized. The Fund invests all or a portion of its assets to
    seek short-term capital appreciation. This can be expected to
    increase the portfolio turnover rate and cause </TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    increased brokerage commission costs. See &#147;Risk Factors and
    Special Considerations&#160;&#151; Merger Arbitrage Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Non-Diversified Status.</I>&#160;&#160;As a non-diversified
    investment company under the 1940&#160;Act, the Fund is not
    limited in the proportion of its assets that may be invested in
    securities of a single issuer, and accordingly, an investment in
    the Fund may, under certain circumstances, present greater risk
    to an investor than an investment in a diversified company. See
    &#147;Risk Factors and Special Considerations&#160;&#151;
    Non-Diversified Status.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>No Operating History.</I>&#160;&#160;The Fund is a newly
    organized, non-diversified, closed-end management investment
    company with no operating history. See &#147;Risk Factors and
    Special Considerations&#160;&#151; No Operating History.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Long-Term Objective; Not a Complete Investment
    Program.</I>&#160;&#160;The Fund is intended for investors
    seeking absolute returns. The Fund is not meant to provide a
    vehicle for those who wish to exploit short-term swings in the
    stock market. An investment in shares of the Fund should not be
    considered a complete investment program. Each shareholder
    should take into account the Fund&#146;s investment objective as
    well as the shareholder&#146;s other investments when
    considering an investment in the Fund. See &#147;Risk Factors
    and Special Considerations&#160;&#151; Long-Term Objective; Not
    a Complete Investment Program.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Foreign Securities Risk.</I>&#160;&#160;The Fund may make
    unlimited investments in foreign securities. Investing in
    securities of foreign issuers (or foreign governments), which
    are generally denominated in foreign currencies, may involve
    certain risks and opportunities not typically associated with
    investing in domestic issuers. Foreign issuers are not generally
    subject to uniform accounting, auditing and financial standards
    and requirements comparable to those applicable to the U.S.
    issuers. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Foreign Securities Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Foreign Currency Risk.</I>&#160;&#160;Because the Fund may
    invest in securities denominated or quoted in currencies other
    than the U.S. dollar, changes in foreign currency exchange rates
    may affect the value of securities in the Fund and the
    unrealized appreciation or depreciation of investments.
    Currencies of certain countries may be volatile and therefore
    may affect the value of securities denominated in such
    currencies, which means that the Fund&#146;s net asset value
    could decline as a result of changes in the exchange rates
    between foreign currencies and the U.S. dollar. See &#147;Risk
    Factors and Special Considerations&#160;&#151; Foreign Currency
    Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Lower Grade Securities.</I>&#160;&#160;The Fund may make
    unlimited investments in fixed income securities rated below
    investment grade by recognized statistical rating agencies or
    unrated securities of comparable quality, including securities
    of issuers in default, which are likely to have the lowest
    rating. However, the Fund does not expect these investments to
    exceed 10% of its total assets. See &#147;Risk Factors and
    Special Considerations&#160;&#151; Lower Grade Securities.&#148;</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Repurchase Agreement Risk.</I>&#160;&#160;The Fund may engage
    in repurchase agreement transactions and bears a risk of loss in
    the event that the other party to a repurchase agreement
    defaults on its obligations and the Fund is delayed in or
    prevented from exercising its rights to dispose of the
    collateral securities, including the risk of a possible decline
    in the value of the underlying securities during the period in
    which it seeks to assert these rights. See &#147;Risk Factors
    and Special Considerations&#160;&#151; Repurchase Agreement
    Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Issuer-Specific Risk.</I>&#160;&#160;The value of an
    individual security or particular type of security can be more
    volatile than the market as a whole and can perform differently
    from the market as a whole. The Fund could lose all of its
    investment in any company&#146;s securities. See &#147;Risk
    Factors and Special Considerations&#160;&#151; Issuer-Specific
    Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Special Risks of Derivative Transactions.</I>&#160;&#160;The
    Fund may participate in certain derivative transactions, such as
    short selling, purchasing options and selling options, and
    entering into futures, forward, swap and other types of
    transactions. Such transactions entail execution, counterparty,
    market, liquidity, hedging and tax risks. If the Investment
    Adviser&#146;s prediction of movements in the direction of the
    securities, foreign currency and interest rate markets is
    inaccurate, the consequences may leave the Fund in a worse
    position than if it had not used such strategies. See &#147;Risk
    Factors and Special Considerations&#160;&#151; Special Risks of
    Derivative Transactions.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Interest Rate Risk.</I>&#160;&#160;The Fund may invest in
    fixed income securities such as preferred and debt securities,
    which gives rise to interest rate risk. Such securities may
    decline in value because of changes in market interest rates.
    When market interest rates rise, the market value of such
    securities generally will fall. To the extent that the Fund
    invests in such securities, the net asset value and market price
    of common shares tend to decline if market interest rates rise.
    Further, while longer term fixed rate securities may pay higher
    interest rates than shorter term securities, longer term fixed
    rate securities also tend to be more sensitive to interest rate
    changes and, accordingly, tend to experience larger changes in
    value as a result of interest rate changes. See &#147;Risk
    Factors and Special Considerations&#160;&#151; Interest Rate
    Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Inflation Risk.</I>&#160;&#160;Inflation risk is the risk
    that the value of assets or income from investments will be
    worth less in the future as inflation decreases the value of
    money. As inflation increases, the real value of the Fund&#146;s
    shares and distributions thereon can decline. In addition,
    during any periods of rising inflation, dividend rates of any
    variable rate debt securities or preferred shares issued by the
    Fund would likely increase, which would tend to further reduce
    returns to common shareholders. See &#147;Risk Factors and
    Special Considerations&#160;&#151; Inflation Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Equity Risk.</I>&#160;&#160;An inherent risk of investing in
    the Fund is equity risk, which is the risk that the securities
    held by the Fund will fall in market value due to adverse market
    and economic conditions, </TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    perceptions regarding the industries in which the issuers of
    securities held by the Fund participate and the particular
    circumstances and performance of particular companies whose
    securities the Fund holds. Depending on such fluctuations in the
    market value of securities, the net asset value of the Fund may
    at any point in time be less than at the time the shareholder
    invested in the Fund, even after taking into account any
    reinvestment of distributions. See &#147;Risk Factors and
    Special Considerations&#160;&#151; Equity Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Leverage Risk.</I>&#160;&#160;The concept of leveraging is
    based on the premise that so long as the cost of the leverage on
    the assets to be obtained by the leverage is lower than the
    return earned by the Fund on these leveraged assets, the common
    shareholders will benefit from the incremental return. Should
    the differential between the return produced by the underlying
    assets and the cost of leverage narrow, the incremental return
    will be reduced. Furthermore, if the cost of the leverage on the
    leveraged assets exceeds the return earned by the Fund on these
    leveraged assets, the net asset value of the Fund will be
    diminished. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Leverage Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Portfolio Turnover Risk.</I>&#160;&#160;The investment
    policies of the Fund are expected to lead to frequent changes in
    investments, which increase transaction costs to the Fund, and
    may also result in accelerated recognition of short-term capital
    gain, which will be taxable to shareholders when distributed by
    the Fund. Unlike long-term capital gains, short-term capital
    gains are taxable to individuals at the same rates as ordinary
    income. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Portfolio Turnover Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Market Discount Risk.</I>&#160;&#160;Common shares of
    closed-end investment companies often trade at market prices
    that are below their net asset value. Since the market price of
    the shares will be affected by such factors as the relative
    demand for and supply of the shares in the market, general
    market and economic conditions, and other factors beyond the
    control of the Fund, we cannot predict whether the shares will
    trade at, below, or above net asset value or at, below, or above
    the public offering price. We cannot assure you that the
    Fund&#146;s common shares will trade at a price higher than or
    equal to their net asset value. See &#147;Risk Factors and
    Special Considerations&#160;&#151; Market Discount Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Common Stock Risk.</I>&#160;&#160;Common stock of an issuer
    in the Fund&#146;s portfolio may decline in price if, among
    other reasons, the issuer of the security experiences a decline
    in its financial condition. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Common Stock Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Management Risk.</I>&#160;&#160;The Investment Adviser will
    apply investment techniques and risk analyses in making
    investment decisions for the Fund, but there can be no guarantee
    that these will produce the desired results. See &#147;Risk
    Factors and Special Considerations&#160;&#151; Management
    Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Dependence on Key Personnel.</I>&#160;&#160;The Investment
    Adviser is dependent upon the expertise of Mr.&#160;Mario J.
    Gabelli in providing advisory services with respect to the
    Fund&#146;s investments. If the </TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Investment Adviser were to lose the services of
    Mr.&#160;Gabelli, its ability to service the Fund could be
    adversely affected. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Dependence on Key Personnel.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Tax Risk.</I>&#160;&#160;We cannot assure you what percentage
    of the distributions paid on the common shares, if any, will
    consist of tax-advantaged qualified dividend income or long-term
    capital gains or what the tax rates on various types of income
    will be in future years. See &#147;Taxation&#148; and &#147;Risk
    Factors and Special Considerations&#160;&#151; Tax Risk.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Current Developments.</I>&#160;&#160;As a result of the
    terrorist attacks on the World Trade Center and the Pentagon on
    September&#160;11, 2001, some of the U.S.&#160;Securities
    markets were closed for a
    <FONT style="white-space: nowrap">four-day</FONT>
    period. These terrorists attacks, the war in Iraq and its
    aftermath and other geopolitical events have led to, and may in
    the future lead to, increased short-term market volatility and
    may have long-term effects on U.S.&#160;and world economies and
    markets. The nature, scope and duration of the war and
    occupation cannot be predicted with any certainty. Similar
    events in the future or other disruptions of financial markets
    could affect interest rates, securities exchanges, auctions,
    secondary trading, ratings, credit risk, inflation, energy
    prices and other factors relating to the common shares. See
    &#147;Risk Factors and Special Considerations&#160;&#151;
    Current Developments.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <I>Anti-Takeover Provisions.</I>&#160;&#160;The Fund&#146;s
    governing documents include provisions that could limit the
    ability of other entities or persons to acquire control of the
    Fund or convert the Fund to an open-end fund. See
    &#147;Anti-Takeover Provisions&#148; of the Fund&#146;s
    Governing Documents.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Management and Fees</B></TD>
    <TD></TD>
    <TD valign="bottom">
    The Investment Adviser will provide a continuous investment
    program for the Fund&#146;s portfolio and oversee the
    administration of all aspects of the Fund&#146;s business and
    affairs. For its services, the Investment Adviser will receive
    compensation at a base rate plus a potential performance fee.
    The base rate will be an annual rate of 0.50% of the Fund&#146;s
    average weekly managed assets payable monthly in arrears.
    Managed assets consist of all of the assets of the Fund without
    deduction for borrowings, repurchase transactions and other
    leveraging techniques, the liquidation value of any outstanding
    preferred shares or other liabilities except for certain
    ordinary course expenses. In addition, the Investment Adviser
    will be entitled to receive an annual performance fee as of the
    end of each calendar year if the total return of the Fund on its
    common shares during the calendar year in question exceeds the
    total return of an index of three-month U.S.&#160;Treasury bills
    (the &#147;T-Bill Index&#148;) during the same period. If the
    Fund&#146;s total return for the calendar year equals the total
    return of the
    <FONT style="white-space: nowrap">T-Bill</FONT> Index
    for the same period plus 3.0% (300&#160;basis points), the
    Investment Adviser will receive a performance fee of 0.75% of
    the Fund&#146;s average weekly managed assets during the period.
    This performance fee will be increased by 0.01% (one basis
    point) for each 0.04% (four basis points) by which the
    Fund&#146;s total return during the period exceeds the
    <FONT style="white-space: nowrap">T-Bill</FONT> Index
    total return plus 3.0% (300&#160;basis points), up to a maximum </TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    performance fee of 1.50% if the excess performance over the
    <FONT style="white-space: nowrap">T-Bill</FONT> Index
    is 6.0% (600&#160;basis points) or greater and will be decreased
    at the same rate for the amount by which the Fund&#146;s total
    return during the period is less than the
    <FONT style="white-space: nowrap">T-Bill</FONT> Index
    total return plus 3.0% (300&#160;basis points), until no
    performance fee is payable if the Fund&#146;s total return is
    less than or equal to the T-Bill Index total return. See
    &#147;Management of the Fund.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Under the performance fee arrangement, the annual rate of the
    total fees paid to the Investment Adviser can range from 0.50%
    to 2.00% of the Fund&#146;s average weekly managed assets. A
    chart showing the range of total fees to the Investment Adviser
    for varying levels of overperformance and underperformance in
    relation to varying total returns of the T-Bill Index is set
    forth on page&#160;27 under the heading &#147;Management of the
    Fund&#160;&#151; Fees of the Investment Adviser.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    The Securities and Exchange Commission, the New York Attorney
    General and officials of other states have been conducting
    inquiries into, and bringing enforcement and other proceedings
    regarding, trading abuses involving open-end investment
    companies. The Investment Adviser has received information
    requests and subpoenas from the Securities and Exchange
    Commission and the New York Attorney General in connection with
    these inquiries. The Investment Adviser and its affiliates have
    been complying with these requests for documents and testimony
    and have implemented additional compliance policies and
    procedures in response to recent industry initiatives and their
    internal reviews of their mutual fund practices in a variety of
    areas. In addition, the Investment Adviser has been in
    discussions with the staff of the Securities and Exchange
    Commission regarding a possible resolution of their inquiry. For
    further details regarding the Investment Adviser&#146;s review
    in connection with these requests and discussions, see
    &#147;Management of the Fund&#160;&#151; Regulatory
    Matters.&#148;</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Anti-Takeover Provisions</B></TD>
    <TD></TD>
    <TD valign="bottom">
    Certain provisions of the Fund&#146;s Agreement and Declaration
    of Trust and By-Laws (collectively, the &#147;Governing
    Documents&#148;) may be regarded as &#147;anti-takeover&#148;
    provisions. Pursuant to these provisions, only one of three
    classes of Trustees is elected each year, and the affirmative
    vote of the holders of 75% of the outstanding shares of the Fund
    is necessary to authorize the conversion of the Fund from a
    closed-end to an open-end investment company or to authorize
    certain transactions involving the Fund and a beneficial owner
    of more than 5% of any class of the Fund&#146;s capital stock.
    The overall effect of these provisions is to render more
    difficult the accomplishment of a merger with, or the assumption
    of control by, a principal shareholder or the conversion of the
    Fund to an open-end investment company. These provisions may
    have the effect of depriving the Fund&#146;s common shareholders
    of an opportunity to sell their shares at a premium to the
    prevailing market price. See &#147;Anti-Takeover Provisions of
    the Fund&#146;s Governing Documents.&#148;</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Custodian, Transfer Agent, and Dividend Disbursing Agent</B></TD>
    <TD></TD>
    <TD valign="bottom">
    Mellon Trust of New England, NA (the &#147;Custodian&#148;),
    located at 135&#160;Santilli Highway, Everett, Massachusetts
    02149, serves as the custodian of the Fund&#146;s assets
    pursuant to a custody agreement. Under the custody agreement,
    the Custodian holds the Fund&#146;s assets in compliance with
    the 1940&#160;Act. For its services, the Custodian will receive
    from the Fund a monthly fee based upon, among other things, the
    average value of the total assets of the Fund, plus certain
    charges for securities transactions and out of pocket expenses.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    American Stock Transfer&#160;&#38; Trust Company, located at
    59&#160;Maiden Lane, New York, New York 10038, serves as the
    Fund&#146;s dividend disbursing agent, as agent under the
    Fund&#146;s automatic dividend reinvestment and voluntary cash
    purchase plan, and as transfer agent and registrar with respect
    to the common shares of the Fund.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    OF FUND EXPENSES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows Fund expenses as a percentage of net
    assets attributable to common shares. Because the Fund has no
    operating history, the following tables are based on the
    assumption that the Fund has issued 10,000,000&#160;common
    shares and has not utilized leverage, although the Fund is
    permitted to do so.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shareholder
    Transaction Expenses</FONT></B>
</DIV>



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="91%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    <FONT style="font-size: 10pt">Sales Load Paid By You (as a
    percentage of offering price)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.50%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    <FONT style="font-size: 10pt">Offering Expenses Borne by the
    Fund (as a percentage of offering price)*
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.20%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    <FONT style="font-size: 10pt">Dividend Reinvestment Plan Fees
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None**
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="73%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="12%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Percentage of Net Assets<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B><FONT style="font-size: 10pt">Annual Expenses</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Attributable to Common Shares</B>
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    <FONT style="font-size: 10pt">Management Fees ***
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.50%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    <FONT style="font-size: 10pt">Interest on Borrowed Funds
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    <FONT style="font-size: 10pt">Other Expenses
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.29%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    <FONT style="font-size: 10pt">Total Annual Expenses
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.79%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Gabelli Funds, LLC, the Fund&#146;s Investment Adviser, has
    agreed to pay any of the Fund&#146;s offering expenses (other
    than the sales load) that exceed $.04 per common share (0.20% of
    the offering price).</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    You will be charged a $1.00 service charge and pay brokerage
    charges if you direct the plan agent to sell your common shares
    held in a dividend reinvestment account.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    *** </TD>
    <TD></TD>
    <TD valign="bottom">
    In addition to the management fees set forth in the table, the
    Investment Adviser is entitled to receive an annual performance
    fee as of the end of any calendar year in which the Fund&#146;s
    total return exceeds the T-Bill Index total return. The
    performance fee is 0.01% for each 0.04% of overperformance up to
    a maximum incremental fee of 1.50%, for a total fee rate of
    2.00%, if the Fund&#146;s total return equals or exceeds the
    T-Bill Index total return plus 6.0% (600&#160;basis points).</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purpose of the table above and the example below is to help
    you understand all fees and expenses that you, as a holder of
    common shares, would bear directly or indirectly. The expenses
    shown in the table under &#147;Other Expenses&#148; and
    &#147;Total Annual Expenses&#148; are based on estimated amounts
    for the Fund&#146;s first year of operations and assume that the
    Fund issues 10,000,000 common shares. If the Fund issues fewer
    common shares, all other things being equal, these expenses
    would increase as a percentage of net assets attributable to
    common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following example illustrates the expenses (including the
    sales load of $45 and estimated offering expenses of this
    offering of $2) that an investor would pay on a $1,000
    investment in common shares, assuming (1)&#160;total net annual
    expenses of 0.79% of net assets attributable to common shares
    and (2)&#160;a 5% annual portfolio total return.*
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>1&#160;Year</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>3&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>10&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Total Expenses Incurred
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    140
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    <B>The example should not be considered a representation of
    future expenses.</B> The example assumes that the estimated
    &#147;Other Expenses&#148; set forth in the Annual Expenses
    table are accurate and that all distributions are reinvested at
    net asset value. Actual expenses may be greater or less than
    those assumed. Moreover, the Fund&#146;s actual rate of return
    may be greater or less than the hypothetical 5% return shown in
    the example. The performance fee adjustment under the investment
    advisory and management agreement is not included in the
    example, because, based upon the current T-Bill Index level and
    assuming a 5% annual return, it either would not be payable or
    would have an insignificant impact on the expense amounts shown
    above. If the Fund achieves sufficient total returns, including
    the realization of capital gains, to trigger a performance fee
    of a material amount, the expenses of the Fund, and total
    returns on its common shares, would be higher.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The net proceeds of the offering are estimated at approximately
    $&#160;&#160;&#160;&#160;&#160; ($&#160;&#160;&#160;&#160;&#160;
    if the Underwriters exercise the overallotment option in full),
    after deduction of the underwriting discounts and estimated
    offering expenses payable by the Fund. The Investment Adviser
    expects that it will initially invest the proceeds of the
    offering in high quality short-term debt securities and
    instruments or one or more money market funds managed by the
    Investment Adviser or unaffiliated managers. The Investment
    Adviser anticipates that the investment of the proceeds will be
    made in accordance with the Fund&#146;s investment objective and
    policies as appropriate investment opportunities are identified.
    The investment of the proceeds is expected to substantially be
    completed within three months; however, changes in market
    conditions could result in the Fund&#146;s anticipated
    investment period extending to as long as six months.
</DIV>
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is a newly organized, non-diversified, closed-end
    management investment company registered under the 1940 Act. The
    Fund was organized as a Delaware statutory trust on
    October&#160;17, 2006, pursuant to an Agreement and Declaration
    of Trust governed by the laws of the State of Delaware. As a
    newly organized entity, the Fund has no operating history. The
    Fund&#146;s principal office is located at One Corporate Center,
    Rye, New York,
    <FONT style="white-space: nowrap">10580-1422</FONT>
    and its telephone number is
    <FONT style="white-space: nowrap">(800)&#160;422-3554.</FONT>
</DIV>
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    OBJECTIVE AND POLICIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Objective</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investment objective is to achieve absolute
    returns in various market conditions without excessive risk of
    capital. Absolute returns are defined as positive total returns,
    regardless of the direction of securities markets. The Fund will
    seek to achieve its objective by investing primarily in merger
    arbitrage transactions and, to a lesser extent, in corporate
    reorganizations involving stubs, spin-offs and liquidations.
    Under normal circumstances, the Fund will invest at least 80% of
    its assets in securities or hedging arrangements relating to
    companies involved in corporate transactions or reorganizations,
    giving rise to the possibility of realizing gains upon or within
    relatively short periods of time after the completion of such
    transactions or reorganizations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser considers the Fund&#146;s merger
    arbitrage investment results to be less volatile than overall
    stock price movements. While some periods will be more conducive
    to a merger arbitrage strategy than others, a systematic,
    disciplined arbitrage program may produce attractive rates of
    return even in flat or down markets. Except as otherwise stated,
    the Fund&#146;s investment objective and policies are not
    fundamental and may be changed without obtaining approval from
    the Fund&#146;s shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Methodology of the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In selecting transactions in which the Fund will invest, the
    Investment Adviser normally will consider the following factors,
    among others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the probability that the targeted acquisition or other
    transaction will close;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the length of time to closing;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the credibility, strategic motivation and financial resources of
    the participants;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the liquidity of the securities involved in the transaction;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the issuer&#146;s free cash flow and long-term earnings trends;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the likelihood of an overbid;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the presence of a catalyst: something indigenous to the issuer,
    its industry, or country to surface additional value.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="5%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    The Investment Adviser believes that blending traditional merger
    arbitrage for announced deals with strategies that focus on
    stubs, spin-offs and liquidations will produce absolute returns
    in excess of short-term interest rates with less volatility than
    the returns typically associated with equity investing. A
    systematic and disciplined arbitrage program may produce
    attractive rates of return even in flat or down markets.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Certain
    Investment Practices</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Merger Arbitrage.</I>&#160;&#160;The Fund will invest in the
    equity securities of companies which are involved in publicly
    announced mergers, takeovers and other corporate
    reorganizations. Merger arbitrage is a highly specialized
    investment approach generally designed to profit from the
    successful completion of proposed mergers, takeovers, tender
    offers and leveraged buyouts. Although a variety of strategies
    may be employed depending upon the nature of the reorganizations
    selected for investment, the most common merger arbitrage
    activity involves purchasing the shares of an announced
    acquisition target at a discount to their expected value upon
    completion of the acquisition. Although investors can utilize
    merger arbitrage techniques with respect to companies the
    investor believes may soon become subject to a merger proposal
    or negotiated transaction, the Fund intends to invest primarily
    in publicly announced transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, securities which are the subject of such an offer or
    proposal sell at a premium to their historic market price
    immediately prior to the announcement of the offer but at a
    discount to what the stated or appraised value of the securities
    would be if the contemplated transaction were completed.
    Investments in these securities may be advantageous when the
    discount overstates the risk of the contingencies involved;
    undervalues the securities, assets or cash to be received by
    shareholders of the prospective portfolio company as a result of
    the contemplated transaction; or fails adequately to recognize
    the possibility that the offer or proposal may be replaced or
    superseded by an offer or proposal of greater value. The
    evaluation of such contingencies requires unusually broad
    knowledge and experience on the part of the Investment Adviser,
    which must appraise not only the value of the issuer and its
    component businesses as well as the assets or securities to be
    received as a result of the contemplated transaction, but also
    the financial resources and business motivation of the offering
    party <FONT style="white-space: nowrap">and/or</FONT>
    the dynamics and business climate when the offer or proposal is
    in process. Since such investments are ordinarily short-term in
    nature, they will tend to increase the turnover ratio of the
    Fund (which may exceed 300%), thereby increasing its brokerage
    and other transaction expenses. The Investment Adviser intends
    to select investments of this type which, in its view, have
    reasonable prospects of capital appreciation which are
    significant in relation to both the risk involved and the
    potential of available alternative investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Depending upon the level of merger activity and other economic
    and market conditions, the Fund may temporarily invest a
    substantial portion of its assets in other securities, including
    money market instruments such as Treasury bills and other
    short-term obligations of the U.S.&#160;Government, its agencies
    or instrumentalities; shares of one or more money market funds
    managed by the Investment Adviser or unaffiliated managers;
    negotiable bank certificates of deposit; prime commercial paper;
    and repurchase agreements with respect to the above securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may use hedging arrangements, including investments in
    options and futures, in order to reduce the risk of adverse
    price movements in securities it holds, with the goal of
    consistently achieving absolute returns. The Fund does not
    anticipate that its investments in futures contracts will
    require aggregate initial margins and premiums in excess of 5%
    of its assets or that the option premiums paid with respect to
    outstanding options will exceed 10% of its assets at any
    particular time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a global fund, the Fund may invest without limitation in the
    securities of foreign and domestic issuers. The Fund&#146;s
    investment strategy is to invest in merger arbitrage
    transactions and corporate reorganizations throughout the world.
    As the dollar volume and range of countries involved in
    significant merger arbitrage and corporate reorganizations has
    increased over the past several years, the Fund expects that its
    assets will usually be invested in several countries. Under
    normal market conditions, the Fund expects to have at least 40%
    of its assets invested in at least three countries, other than
    the United States. To the extent that the majority of mergers,
    takeovers, tender offers and leveraged buyouts and corporate
    reorganizations are
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    concentrated in any given geographic region, such as Europe,
    North America or Asia, a relatively high proportion of the
    Fund&#146;s assets may be invested in that particular region.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Foreign Securities.</I>&#160;&#160;The Fund may make
    unlimited investments in the securities of
    <FONT style="white-space: nowrap">non-United</FONT>
    States issuers, which are generally denominated in foreign
    currencies. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Foreign Securities Risk.&#148; The
    Fund may purchase sponsored American Depository Receipts
    (&#147;ADRs&#148;) or United States dollar denominated
    securities of foreign issuers. ADRs are receipts issued by
    U.S.&#160;banks or trust companies in respect of securities of
    foreign issuers held on deposit for use in the
    U.S.&#160;securities markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options.</I>&#160;&#160;The Fund may purchase or sell, i.e.,
    write, options on securities, securities indices and foreign
    currencies which are listed on a national securities exchange or
    in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    (&#147;OTC&#148;) market as a means of achieving additional
    return or of hedging the value of the Fund&#146;s portfolio. A
    call option is a contract that, in return for a premium, gives
    the holder of the option the right to buy from the writer of the
    call option the security or currency underlying the option at a
    specified exercise price at any time during the term of the
    option. The writer of the call option has the obligation, upon
    exercise of the option, to deliver the underlying security or
    currency upon payment of the exercise price during the option
    period. A put option is the reverse of a call option, giving the
    holder the right, in return for a premium, to sell the
    underlying security to the writer at a specified price and
    obligating the writer to purchase the underlying security from
    the holder at that price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund has written an option, it may terminate its
    obligation by effecting a closing purchase transaction. This is
    accomplished by purchasing an option of the same series as the
    option previously written. However, with respect to
    exchange-traded options, once the Fund has been assigned an
    exercise notice, the Fund will be unable to effect a closing
    purchase transaction. Similarly, if the Fund is the holder of an
    option it may liquidate its position by effecting a closing sale
    transaction on an exchange. This is accomplished by selling an
    option of the same series as the option previously purchased.
    There can be no assurance that either a closing purchase or sale
    transaction can be effected when the Fund so desires.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will realize a profit from a closing transaction if the
    price of the transaction is less than the premium received from
    writing the option or is more than the premium paid to purchase
    the option; the Fund will realize a loss from a closing
    transaction if the price of the transaction is more than the
    premium received from writing the option or is less than the
    premium paid to purchase the option. Since call option prices
    generally reflect increases in the price of the underlying
    security, any loss resulting from the repurchase of a call
    option may also be wholly or partially offset by unrealized
    appreciation of the underlying security. Other principal factors
    affecting the market value of a put or a call option include
    supply and demand, prevailing interest rates, the current market
    price and price volatility of the underlying security, and the
    time remaining until the expiration date. Gains and losses on
    investment in options depend, in part, on the ability of the
    Investment Adviser to predict correctly the effect of these
    factors. The use of options cannot serve as a complete hedge
    since the price movement of securities underlying the options
    will not necessarily follow the price movements of the portfolio
    securities subject to the hedge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An option position may be closed out only on an exchange which
    provides a secondary market for an option of the same series or
    in a private transaction. Although the Fund will generally
    purchase or write only those options for which there appears to
    be an active secondary market, there is no assurance that a
    liquid secondary market on an exchange will persist for any
    particular option. In such event, it might not be possible to
    effect closing transactions in particular options, so that the
    Fund would have to exercise its options in order to realize any
    profit and would incur brokerage commissions upon the exercise
    of call options and upon the subsequent disposition of
    underlying securities for the exercise of put options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The sale of covered call options may also be used by the Fund to
    reduce the risks associated with individual investments and to
    increase total investment return.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Futures Contracts and Options on Futures.</I>&#160;&#160;The
    Fund may purchase and sell financial futures contracts and
    options thereon which are traded on a commodities exchange or
    board of trade for certain hedging and risk management purposes.
    A financial futures contract is an agreement to purchase or sell
    an
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    agreed amount of securities or currencies at a set price for
    delivery in the future. These futures contracts and related
    options may be on debt securities, financial indices, securities
    indices, U.S.&#160;government securities and foreign currencies.
    The Investment Adviser has claimed an exclusion from the
    definition of the term &#147;commodity pool operator&#148; under
    the Commodity Exchange Act and therefore is not subject to
    registration under the Commodity Exchange Act. Accordingly, the
    Fund&#146;s investments in derivative instruments described in
    this prospectus and the SAI are not limited by or subject to
    regulation under the Commodity Exchange Act or otherwise
    regulated by the Commodity Futures Trading Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Swaps.</I>&#160;&#160;The Fund may enter into total return,
    credit default or interest rate swap transactions in order to
    manage risks in its portfolio. In a total return swap one party
    agrees to pay or receive the total return on a stipulated amount
    of security, commodity, index or other reference item in
    exchange for the agreement by the counterparty to pay or receive
    a fixed or variable amount. In a credit default swap one party
    agrees to take on all or a portion of the risk that there will
    be a payment default or other credit event with respect to a
    particular debt obligation or issuer in exchange for payments by
    the counterparty. In an interest rate swap one party agrees to
    pay a fixed rate on a stipulated amount of money in exchange for
    the agreement by the counterparty to pay a variable rate on that
    amount. Swap transactions enable a party to gain or shed
    exposure to a particular asset or set of risks without actually
    owing or selling of the referenced assets. As such, the Fund may
    not have any voting or other rights associated with the
    reference assets and accordingly may not be able to exercise any
    influence over events affecting such assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Short Sales.</I>&#160;&#160;The Fund may make short sales of
    securities. A short sale is a transaction in which the Fund
    sells a security it does not own in anticipation that the market
    price of that security will decline. The market value of the
    securities sold short of any one issuer will not exceed either
    25% of the Fund&#146;s total assets or 5% of such issuer&#146;s
    voting securities. The Fund also will not make a short sale, if,
    after giving effect to such sale, the market value of all
    securities sold short exceeds 50% of the value of its assets.
    The Fund may also make short sales &#147;against the box&#148;
    without respect to such limitations. In this type of short sale,
    at the time of the sale, the Fund owns, or has the immediate and
    unconditional right to acquire at no additional cost, the
    identical security.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund expects to make short sales both to obtain capital
    gains from anticipated declines in securities and as a form of
    hedging to offset potential declines in long positions in the
    same or similar securities. The short sale of a security is
    considered a speculative investment technique. Short sales
    &#147;against the box&#148; may be subject to special tax rules,
    one of the effects of which may be to accelerate income to the
    Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When the Fund makes a short sale, it must borrow the security
    sold short and deliver it to the broker-dealer through which it
    made the short sale in order to satisfy its obligation to
    deliver the security upon conclusion of the sale. The Fund may
    have to pay a fee to borrow particular securities and is often
    obligated to deliver any payments received on such borrowed
    securities, such as dividends.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the price of the security sold short increases between the
    time of the short sale and the time the Fund replaces the
    borrowed security, the Fund will incur a loss; conversely, if
    the price declines, the Fund will realize a capital gain. Any
    gain will be decreased, and any loss will be increased, by the
    transaction costs incurred by the Fund, including the costs
    associated with providing collateral to the broker-dealer
    (usually cash, United States government securities or other
    highly liquid debt securities) and the maintenance of collateral
    with its custodian. Although the Fund&#146;s gain is limited to
    the price at which it sold the security short, its potential
    loss is theoretically unlimited.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Derivatives.</I>&#160;&#160;Investments in options, futures
    and swaps are often referred to as derivatives transactions. The
    Fund expects that it will invest in these types of instruments
    primarily for hedging and risk management purposes and that its
    investments in derivatives and short sales for purposes
    unrelated to corporate transactions or reorganizations will not
    exceed 5% of its total assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There is no specific limit on the proportion of its assets that
    the Fund may use to invest in derivatives and conduct short
    sales in connection with its investments in corporate
    transactions and reorganizations,
</DIV>

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    <BR>
    15
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    although the Fund expects that it will not be required to
    utilize more than 10% of the assets it has invested in a
    particular transaction to hedge its gains in such transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Lower Grade Securities.</I>&#160;&#160;The Fund may make
    unlimited investments in fixed income securities rated below
    investment grade by recognized statistical rating agencies or
    unrated securities of comparable quality, including securities
    of issuers in default, which are likely to have the lowest
    rating. However, the Fund does not expect these investments to
    exceed 10% of its total assets. These securities, which may be
    preferred stock or debt, are predominantly speculative and
    involve major risk exposure to adverse conditions. Debt
    securities that are rated lower than &#147;BBB&#148; by
    Standard&#160;&#38; Poor&#146;s Ratings Services, a division of
    The McGraw-Hill Companies, Inc. (&#147;S&#38;P&#148;), or lower
    than &#147;Baa&#148; by Moody&#146;s Investors Service, Inc.
    (&#147;Moody&#146;s&#148;) or unrated securities considered by
    the Investment Adviser to be of comparable quality, are commonly
    referred to as &#147;junk bonds.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, such lower grade securities and unrated securities of
    comparable quality offer a higher current yield than is offered
    by higher rated securities, but also (i)&#160;will likely have
    some quality and protective characteristics that, in the
    judgment of the rating organizations, are outweighed by large
    uncertainties or major risk exposures to adverse conditions and
    (ii)&#160;are predominantly speculative with respect to the
    issuer&#146;s capacity to pay interest and repay principal in
    accordance with the terms of the obligation. The market values
    of certain of these securities also tend to be more sensitive to
    individual corporate developments and changes in economic
    conditions than higher quality bonds. In addition, such
    securities generally present a higher degree of credit risk. The
    risk of loss due to default by these issuers is significantly
    greater because such lower grade securities and unrated
    securities of comparable quality generally are unsecured and
    frequently are subordinated to the prior payment of senior
    indebtedness. In light of these risks, the Investment Adviser,
    in evaluating the creditworthiness of an issue, whether rated or
    unrated, will take various factors into consideration, which may
    include, as applicable, the issuer&#146;s operating history,
    financial resources and its sensitivity to economic conditions
    and trends, the market support for the facility financed by the
    issue, the perceived ability and integrity of the issuer&#146;s
    management and regulatory matters.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the market value of securities in lower rated
    categories is more volatile than that of higher quality
    securities, and the markets in which such lower rated or unrated
    securities are traded are more limited than those in which
    higher rated securities are traded. The existence of limited
    markets may make it more difficult for the Fund to obtain
    accurate market quotations for purposes of valuing its portfolio
    and calculating its net asset value. Moreover, the lack of a
    liquid trading market may restrict the availability of
    securities for the Fund to purchase and may also have the effect
    of limiting the ability of the Fund to sell securities at their
    fair value in response to changes in the economy or the
    financial markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Lower grade securities also present risks based on payment
    expectations. If an issuer calls the obligation for redemption
    (often a feature of fixed income securities), the Fund may have
    to replace the security with a lower yielding security,
    resulting in a decreased return for investors. Also, as the
    principal value of nonconvertible bonds and preferred stocks
    moves inversely with movements in interest rates, in the event
    of rising interest rates the value of the securities held by the
    Fund may decline proportionately more than a portfolio
    consisting of higher rated securities. Investments in zero
    coupon bonds may be more speculative and subject to greater
    fluctuations in value due to changes in interest rates than
    bonds that pay regular income streams. Current interest rates
    are relatively low and, therefore, it is possible that they will
    rise in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of its investment in lower grade securities, the Fund
    may invest in securities of issuers in default. The Fund will
    make an investment in securities of issuers in default only when
    the Investment Adviser believes that such issuers will honor
    their obligations or emerge from bankruptcy protection under a
    plan pursuant to which the securities received by the Fund in
    exchange for its defaulted securities will have a value in
    excess of the Fund&#146;s investment. By investing in securities
    of issuers in default, the Fund bears the risk that these
    issuers will not continue to honor their obligations or emerge
    from bankruptcy protection or that the value of the securities
    will not otherwise appreciate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to using recognized rating agencies and other
    sources, the Investment Adviser also performs its own analysis
    of issues in seeking investments that it believes to be
    underrated (and thus higher
</DIV>

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    <BR>
    16
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    yielding) in light of the financial condition of the issuer. Its
    analysis of issuers may include, among other things, current and
    anticipated cash flow and borrowing requirements, value of
    assets in relation to historical cost, strength of management,
    responsiveness to business conditions, credit standing, and
    current anticipated results of operations. In selecting
    investments for the Fund, the Investment Adviser may also
    consider general business conditions, anticipated changes in
    interest rates and the outlook for specific industries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subsequent to its purchase by the Fund, an issue of securities
    may cease to be rated or its rating may be reduced. In addition,
    it is possible that statistical rating agencies may change their
    ratings of a particular issue to reflect subsequent events.
    Moreover, such ratings do not assess the risk of a decline in
    market value. None of these events will require the sale of the
    securities by the Fund, although the Investment Adviser will
    consider these events in determining whether the Fund should
    continue to hold the securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The market for lower grade and comparable unrated securities has
    experienced periods of significantly adverse price and liquidity
    several times, particularly at or around times of economic
    recessions. Past market recessions have adversely affected the
    value of such securities as well as the ability of certain
    issuers of such securities to repay principal and pay interest
    thereon or to refinance such securities. The market for those
    securities may react in a similar fashion in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Forward Foreign Currency Exchange
    Contracts.</I>&#160;&#160;There is no limit on the Fund&#146;s
    ability to invest in foreign currency exchange contracts, as the
    Fund may invest up to 100% of its assets in transactions
    involving securities denominated in foreign currencies. The Fund
    may hedge up to 100% of its currency exposure.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may enter into such contracts on a spot, i.e., cash,
    basis at the rate then prevailing in the currency exchange
    market or on a forward basis, by entering into a forward
    contract to purchase or sell currency. A forward contract on
    foreign currency is an obligation to purchase or sell a specific
    currency at a future date, which may be any fixed number of days
    agreed upon by the parties from the date of the contract at a
    price set on the date of the contract. The Fund expects to
    invest in forward currency contracts for hedging or currency
    risk management purposes and not in order to speculate on
    currency exchange rate movements. The Fund will only enter into
    forward currency contracts with parties which the Investment
    Adviser believes to be creditworthy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Repurchase Agreement Transactions.</I>&#160;&#160;Repurchase
    agreements may be seen as loans by the Fund collateralized by
    underlying debt securities. Under the terms of a typical
    repurchase agreement, the Fund would acquire an underlying debt
    obligation for a relatively short period (usually not more than
    one week) subject to an obligation of the seller to repurchase,
    and the Fund to resell, the obligation at an agreed price and
    time. This arrangement results in a fixed rate of return to the
    Fund that is not subject to market fluctuations during the
    holding period. The Fund bears a risk of loss in the event that
    the other party to a repurchase agreement defaults on its
    obligations and the Fund is delayed in or prevented from
    exercising its rights to dispose of the collateral securities,
    including the risk of a possible decline in the value of the
    underlying securities during the period in which it seeks to
    assert these rights. The Investment Adviser, acting under the
    supervision of the Board, reviews the creditworthiness of those
    banks and dealers with which the Fund enters into repurchase
    agreements to evaluate these risks and monitors on an ongoing
    basis the value of the securities subject to repurchase
    agreements to ensure that the value is maintained at the
    required level. The Fund will not enter into repurchase
    agreements with the Investment Adviser or any of its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Leverage.</I>&#160;&#160;As provided in the 1940 Act and
    subject to certain exceptions, the Fund may issue debt or
    preferred shares with the condition that immediately after
    issuance the value of its total assets, less certain ordinary
    course liabilities, exceed 300% of the amount of the debt
    outstanding and exceed 200% of the sum of the amount of debt and
    preferred shares outstanding. Any such debt or preferred shares
    may be convertible in accordance with Securities and Exchange
    Commission guidelines, which may permit each fund to obtain
    leverage at attractive rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The concept of leveraging is based on the premise that so long
    as the cost of the leverage on the assets to be obtained by the
    leverage is lower than the return earned by the Fund on these
    leveraged assets, the common shareholders will benefit from the
    incremental return. Should the differential between the return
    produced by the underlying assets and the cost of leverage
    narrow, the incremental return will be reduced.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, if the cost of the leverage on the leveraged assets
    exceeds the return earned by the Fund on these leveraged assets,
    the net asset value of the Fund will be diminished. See
    &#147;Risk Factors and Special Considerations&#160;&#151;
    Leverage Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An issuance of preferred shares may subject the Fund to certain
    restrictions on investments imposed by guidelines of one or more
    rating agencies that may issue ratings for any preferred shares
    issued by the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Turnover</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The investment policies of the Fund may lead to frequent changes
    in investments. Portfolio turnover generally involves some
    expense to the Fund, including brokerage commissions or dealer
    <FONT style="white-space: nowrap">mark-ups</FONT> and
    other transaction costs on the sale of securities and
    reinvestment in other securities. The portfolio turnover rate is
    computed by dividing the lesser of the amount of the securities
    purchased or securities sold by the average monthly value of
    securities owned during the year (excluding securities whose
    maturities at acquisition were one year or less). Higher
    portfolio turnover may decrease the after tax return to
    individual investors in the Fund to the extent that it results
    in a decrease in the portion of the Fund&#146;s distributions
    that is attributable to long-term capital gain. The Fund
    anticipates that its portfolio turnover rate will be substantial
    and may exceed 300%. See &#147;Risk Factors and Special
    Considerations&#160;&#151; Portfolio Turnover Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has adopted certain investment limitations designed to
    limit investment risk. These limitations are fundamental and may
    not be changed without the approval of the holders of a
    majority, as defined in the 1940 Act, of the outstanding common
    shares and preferred shares, if any, voting together as a single
    class. See &#147;Investment Restrictions&#148; in the SAI for a
    complete list of the fundamental investment policies of the
    Fund. Should the Fund decide to issue debt, preferred shares or
    other leverage instruments in the future, it may become subject
    to rating agency guidelines that are more limiting than its
    fundamental investment restrictions in order to obtain and
    maintain a desired rating on such leverage.
</DIV>
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS AND SPECIAL CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Investors should consider the following risk factors and special
    considerations associated with investing in the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Merger
    Arbitrage Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investment strategy involves investment
    techniques and securities holdings that entail risks, in some
    cases different from the risks ordinarily associated with
    investments in equity securities. The principal risk associated
    with the Fund&#146;s arbitrage investments is that certain of
    the proposed reorganizations in which the Fund invests may be
    renegotiated, terminated or involve a longer time frame than
    originally contemplated, in which case the Fund may realize
    losses. Among the factors that affect the level of risk with
    respect to the completion of the transaction are the deal spread
    and number of bidders, the friendliness of the buyer and seller,
    the strategic rationale behind the transaction, the existence of
    regulatory hurdles, the level of due diligence completed on the
    target company and the ability of the buyer to finance the
    transaction. If the spread between the purchase price and the
    current price of the seller&#146;s stock is small, the risk that
    the transaction will not be completed may outweigh the potential
    return. If there is very little interest by other potential
    buyers in the target company, the risk of loss may be higher
    than where there are
    <FONT style="white-space: nowrap">back-up</FONT>
    buyers that would allow the arbitrageur to realize a similar
    return if the current deal falls through. Unfriendly management
    of the target company or change in friendly management in the
    middle of a deal increases the risk that the deal will not be
    completed even if the target company&#146;s board has approved
    the transaction and may involve the risk of litigation expense
    if the target company pursues litigation in an attempt to
    prevent the deal from occurring. The underlying strategy behind
    the deal is also a risk consideration because the less a target
    company will benefit from a merger or acquisition, the greater
    the risk. There is also a risk that an acquiring company may
    back out of an announced deal if, in the process of completing
    its due diligence of the target company, it discovers something
    undesirable about such company. In addition, merger transactions
    are also subject to regulatory risk because a merger transaction
    often must be approved by a regulatory body or pass
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    governmental antitrust review. All of these factors affect the
    timing and likelihood that the transaction will close. Even if
    the Investment Adviser selects announced deals with the goal of
    mitigating the risks that the transaction will fail to close,
    such risks may still delay the closing of such transaction to a
    date later than the Fund originally anticipated, reducing the
    level of desired return to the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In recapitalizations, a corporation may restructure its balance
    sheet by selling specific assets, significantly leveraging other
    assets and creating new classes of equity securities to be
    distributed, together with a substantial payment in cash or in
    debt securities, to existing shareholders. In connection with
    such transactions, there is a risk that the value of the cash
    and new securities distributed will not be as high as the cost
    of the Fund&#146;s original investment or that no such
    distribution will ultimately be made and the value of the
    Fund&#146;s investment will decline. To the extent an investment
    in a company that has undertaken a recapitalization is retained
    by the Fund, the Fund&#146;s risks will generally be comparable
    to those associated with investments in highly leveraged
    companies, generally including higher than average sensitivity
    to (i)&#160;short-term interest rate fluctuations,
    (ii)&#160;downturns in the general economy or within a
    particular industry or (iii)&#160;adverse developments within
    the company itself.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Merger arbitrage positions are also subject to the risk of
    overall market movements. To the extent that a general increase
    or decline in equity values affects the stocks involved in a
    merger arbitrage position differently, the position may be
    exposed to loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Finally, merger arbitrage strategies depend for success on the
    overall volume of global merger activity, which has historically
    been cyclical in nature. During periods when merger activity is
    low, it may be difficult or impossible to identify opportunities
    for profit or to identify a sufficient number of such
    opportunities to provide balance among potential merger
    transactions. To the extent that the number of announced deals
    and corporate reorganizations decreases or the number of
    investors in such transactions increases, it is possible that
    merger arbitrage spreads will tighten, causing the profitability
    of investing in such transactions to diminish, which will in
    turn decrease the returns to the Fund from such investment
    activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Diversified
    Status</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is classified as a &#147;non-diversified&#148;
    investment company under the 1940 Act, which means the Fund is
    not limited by the 1940 Act in the proportion of its assets that
    may be invested in the securities of a single issuer. As a
    non-diversified investment company, the Fund may invest in the
    securities of individual issuers to a greater degree than a
    diversified investment company. As a result, the Fund may be
    more vulnerable to events affecting a single issuer and
    therefore subject to greater volatility than a fund that is more
    broadly diversified. Accordingly, an investment in the Fund may
    present greater risk to an investor than an investment in a
    diversified company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No
    Operating History</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is a newly organized, non-diversified, closed-end
    management investment company with no operating history.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Long-Term
    Objective; Not a Complete Investment Program</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is intended for investors seeking absolute returns. The
    Fund is not meant to provide a vehicle for those who wish to
    exploit short-term swings in the stock market. An investment in
    shares of the Fund should not be considered a complete
    investment program. Each shareholder should take into account
    the Fund&#146;s investment objective as well as the
    shareholder&#146;s other investments when considering an
    investment in the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Foreign
    Securities Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may invest without limit in the securities of foreign
    issuers. Investments in the securities of foreign issuers
    involve certain considerations and risks not ordinarily
    associated with investments in securities of domestic issuers.
    Foreign companies are not generally subject to uniform
    accounting, auditing and financial
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    standards and requirements comparable to those applicable to
    U.S.&#160;companies. Foreign securities exchanges, brokers, and
    listed companies may be subject to less government supervision
    and regulation than exists in the United States. Dividend and
    interest income may be subject to withholding and other foreign
    taxes, which may adversely affect the net return on such
    investments. There may be difficulty in obtaining or enforcing a
    court judgment abroad. In addition, it may be difficult to
    effect repatriation of capital invested in certain countries. In
    addition, with respect to certain countries, there are risks of
    expropriation, confiscatory taxation, political or social
    instability or diplomatic developments that could affect assets
    of the Fund held in foreign countries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There may be less publicly available information about a foreign
    company than a U.S.&#160;company. Foreign securities markets may
    have substantially less volume than U.S.&#160;securities markets
    and some foreign company securities are less liquid than
    securities of otherwise comparable U.S.&#160;companies. A
    portfolio of foreign securities may also be adversely affected
    by fluctuations in the rates of exchange between the currencies
    of different nations and by exchange control regulations.
    Foreign markets also have different clearance and settlement
    procedures that could cause the Fund to encounter difficulties
    in purchasing and selling securities on such markets and may
    result in the Fund missing attractive investment opportunities
    or experiencing loss. In addition, a portfolio that includes
    foreign securities can expect to have a higher expense ratio
    because of the increased transaction costs on
    <FONT style="white-space: nowrap">non-U.S.&#160;securities</FONT>
    markets and the increased costs of maintaining the custody of
    foreign securities. The Fund also may purchase sponsored ADRs or
    U.S.&#160;dollar-denominated securities of foreign issuers. ADRs
    are receipts issued by United States banks or trust companies in
    respect of securities of foreign issuers held on deposit for use
    in the United States securities markets. Substantially all of
    the risks associated with underlying foreign security apply to
    the ADRs associated with that security. In addition, the
    underlying issuers of certain depositary receipts, particularly
    unsponsored or unregistered depositary receipts, are under no
    obligation to distribute shareholder communications to the
    holders of such receipts, or to pass through to them any voting
    rights with respect to the deposited securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Foreign
    Currency Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because the Fund may invest in securities denominated or quoted
    in currencies other than the U.S. dollar, changes in foreign
    currency exchange rates may affect the value of securities in
    the Fund and the unrealized appreciation or depreciation of
    investments. Currencies of certain countries may be volatile and
    therefore may affect the value of securities denominated in such
    currencies, which means that the Fund&#146;s net asset value
    could decline as a result of changes in the exchange rates
    between foreign currencies and the U.S.&#160;dollar.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Lower
    Grade Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may make unlimited investments in fixed income
    securities rated below investment grade by recognized
    statistical rating agencies or unrated securities considered by
    the Investment Adviser to be of comparable quality, including
    securities of issuers in default, which are likely to have the
    lowest rating. However, the Fund does not expect these
    investments to exceed 10% of its total assets. The Fund may
    invest an unlimited percentage of it assets in convertible bonds
    of such quality. These high yield securities, also sometimes
    referred to as &#147;junk bonds,&#148; generally pay a premium
    above the yields of U.S.&#160;government securities or debt
    securities of investment grade issuers because they are subject
    to greater risks than these securities. These risks, which
    reflect their speculative character, include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    greater volatility;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    greater credit risk and risk of default;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    potentially greater sensitivity to general economic or industry
    conditions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    potential lack of attractive resale opportunities
    (illiquidity);&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    additional expenses to seek recovery from issuers who default.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the prices of these lower grade securities are more
    sensitive to negative developments, such as a decline in the
    issuer&#146;s revenues or a general economic downturn, than are
    the prices of higher grade
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    securities. Lower grade securities tend to be less liquid than
    investment grade securities. The market value of lower grade
    securities may be more volatile than the market value of
    investment grade securities and generally tends to reflect the
    market&#146;s perception of the creditworthiness of the issuer
    and short-term market developments to a greater extent than
    investment grade securities, which primarily reflect
    fluctuations in general levels of interest rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ratings are relative and subjective and are not absolute
    standards of quality. Securities ratings are based largely on
    the issuer&#146;s historical financial condition and the rating
    agencies&#146; analysis at the time of rating. Consequently, the
    rating assigned to any particular security is not necessarily a
    reflection of the issuer&#146;s current financial condition.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a part of its investment in lower grade securities, the Fund
    may invest in securities of issuers in default. The Fund will
    invest in securities of issuers in default only when the
    Investment Adviser believes that such issuers will honor their
    obligations or emerge from bankruptcy protection and the value
    of these securities will appreciate. By investing in the
    securities of issuers in default, the Fund bears the risk that
    these issuers will not continue to honor their obligations or
    emerge from bankruptcy protection or that the value of these
    securities will not otherwise appreciate.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Repurchase
    Agreement Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Repurchase agreements are contracts for the sale and future
    repurchase of a financial asset, most often Treasury securities.
    At the time the Fund purchases securities pursuant to a
    repurchase agreement, it simultaneously agrees to resell and
    redeliver such securities to the seller, who also simultaneously
    agrees to buy back the securities at a fixed price and time.
    This assures a predetermined yield for the Fund during its
    holding period, since the resale price is always greater than
    the purchase price and reflects an agreed upon market rate. Such
    actions afford an opportunity for the Fund to invest temporarily
    available cash. The Fund may enter into repurchase agreements
    only with respect to obligations of the U.S.&#160;Government,
    its agencies or instrumentalities; certificates of deposit; or
    bankers&#146; acceptances in which the Fund may invest.
    Repurchase agreements may be considered loans to the seller,
    collateralized by the underlying securities. The risk to the
    Fund is limited to the ability of the seller to pay the agreed
    upon sum on the repurchase date; in the event of default, the
    repurchase agreement provides that the Fund is entitled to sell
    the underlying collateral. If the value of the collateral
    declines after the agreement is entered into, and if the seller
    defaults under a repurchase agreement when the value of the
    underlying collateral is less than the repurchase price, the
    Fund could incur a loss of both principal and interest. The
    Investment Adviser monitors the value of the collateral at the
    time the action is entered into and on a daily basis during the
    term of the repurchase agreement. The Investment Adviser does so
    in an effort to determine that the value of the collateral
    always equals or exceeds the agreed upon repurchase price to be
    paid to the Fund. If the seller were to be subject to a federal
    bankruptcy proceeding, the ability of the Fund to liquidate the
    collateral could be delayed or impaired because of certain
    provisions of the bankruptcy laws.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Issuer-Specific
    Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The value of an individual security or particular type of
    security can be more volatile than the market as a whole and can
    perform differently from the market as a whole. The Fund could
    lose all of its investment in a company&#146;s securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks of Derivative Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Short sales and investments in options, futures and swaps are
    often referred to as derivatives transactions. The Fund expects
    that it will utilize these types of instruments primarily for
    hedging and risk management purposes and that its investments in
    derivatives and short sales for purposes unrelated to corporate
    transactions or reorganizations will not exceed 5% of its total
    assets. There is no specific limit on the proportion of its
    assets that the Fund may use to invest in derivatives and
    conduct short sales in connection with its investments in
    corporate transactions and reorganizations, although the Fund
    expects that it will not be
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    required to utilize more than 10% of the assets it has invested
    in a particular transaction to hedge its gains in such
    transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Participation in the options or futures markets and in swap and
    currency exchange transactions involves investment risks and
    transaction costs to which the Fund would not be subject absent
    the use of these strategies. If the Investment Adviser&#146;s
    prediction of movements in the direction of the securities,
    foreign currency, and interest rate markets or other reference
    assets is inaccurate, the consequences may leave the Fund in a
    worse position than if it had not used such strategies. Risks
    inherent in the use of options, foreign currencies, futures
    contracts and options on futures contracts, securities indices
    and swaps include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    dependence on the Investment Adviser&#146;s ability to predict
    correctly movements in the direction of interest rates,
    securities prices, currency markets or other reference assets;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    imperfect correlation between the price of options and futures
    contracts and options thereon and movements in the prices of the
    securities or currencies being hedged;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the fact that skills needed to use these strategies are
    different from those needed to select portfolio securities;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the possible absence of a liquid secondary market for any
    particular instrument at any time;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the possible need to defer closing out certain hedged positions
    to avoid adverse tax consequences;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the possible inability of the Fund to purchase or sell a
    security at a time that otherwise would be favorable for it to
    do so, or the possible need for the Fund to sell a security at a
    disadvantageous time due to a need for the Fund to maintain
    &#147;cover&#148; or to segregate securities in connection with
    the Fund&#146;s derivatives techniques;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the creditworthiness of counterparties.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Futures Transactions.</I>&#160;&#160;The Fund may invest in
    futures contracts to an unlimited degree. The Fund does not
    anticipate that its investments in futures contracts will
    require aggregate initial margins and premiums to exceed 5% of
    the fair market value of the Fund&#146;s assets. Futures and
    options on futures entail certain risks including, but not
    limited to, the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    no assurance that futures contracts or options on futures can be
    offset at favorable prices;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    possible reduction of the return of the Fund due to the use of
    hedging;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    possible reduction in value of both the securities hedged and
    the hedging instrument;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    possible lack of liquidity due to daily limits or price
    fluctuations;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    imperfect correlation between the contracts and the securities
    being hedged;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    losses from investing in futures transactions that are
    potentially unlimited and the segregation requirements for such
    transactions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Forward Currency Exchange Contracts.</I>&#160;&#160;There is
    no limit on the Fund&#146;s ability to invest in foreign
    currency exchange contracts, as the Fund may invest up to 100%
    of its assets in transactions involving securities denominated
    in foreign currencies. The Fund may hedge up to 100% of its
    currency exposure. The use of forward currency contracts may
    involve certain risks, including the failure of the counterparty
    to perform its obligations under the contract. Further, the use
    of forward contracts may not serve as a complete hedge due to an
    imperfect correlation between movements in the prices of the
    contracts and the prices of the currencies hedged or used for
    cover.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Counterparty Risk.</I>&#160;&#160;The Fund will be subject to
    credit risk with respect to the counterparties to the derivative
    contracts purchased by the Fund. If a counterparty becomes
    bankrupt or otherwise fails to perform its obligations under a
    derivative contract due to financial difficulties, the Fund may
    experience significant
</DIV>

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    <BR>
    22
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    delays in obtaining any recovery under the derivative contract
    in bankruptcy or other reorganization proceeding. The Fund may
    obtain only a limited recovery or may obtain no recovery in such
    circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Swaps.</I>&#160;&#160;The Fund may enter into one or more
    swap transactions to attempt to protect itself from increasing
    distribution or interest expenses resulting from rising
    short-term interest rates or any outstanding leverage. A decline
    in interest rates may result in a decline in the value of the
    swaps which may result in a decline in the net asset value of
    the Fund. A sudden and dramatic decline in interest rates may
    result in a significant decline in the net asset value of the
    Fund. Swaps and certain other derivatives are a relatively
    recent development in the financial markets. Consequently, there
    are certain legal, tax and market uncertainties that present
    risks in entering into such swaps and other derivatives. There
    is currently little or no case law or litigation characterizing
    swaps or certain other derivatives, interpreting their
    provisions, or characterizing their tax treatment. In addition,
    additional regulations and laws may apply to swaps or other
    derivatives that have not heretofore been applied. Pending
    clarification of these uncertainties, the Fund intends to
    utilize these instruments primarily for hedging and risk
    management purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For a further description of such derivative instruments, see
    &#147;Investment Objectives and Policies&#160;&#151; Additional
    Investment Policies&#148; in the SAI.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Interest
    Rate Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may invest in fixed income securities such as preferred
    and debt securities, which gives rise to interest rate risk.
    Such securities may decline in value because of changes in
    market interest rates. When market interest rates rise, the
    market value of such securities generally will fall. To the
    extent that the Fund invests in such securities, the net asset
    value and market price of common shares tend to decline if
    market interest rates rise. Further, while longer term fixed
    rate securities may pay higher interest rates than shorter term
    securities, longer term fixed rate securities also tend to be
    more sensitive to interest rate changes and, accordingly, tend
    to experience larger changes in value as a result of interest
    rate changes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During periods of declining interest rates, the issuer of a
    security may exercise its option to prepay principal earlier
    than scheduled, forcing the Fund to reinvest in lower yielding
    securities. This is known as call or prepayment risk. Preferred
    and debt securities frequently have call features that allow the
    issuer to redeem the securities prior to their stated
    maturities. An issuer may redeem an obligation if the issuer can
    refinance the debt at a lower cost due to declining interest
    rates or an improvement in the credit standing of the issuer.
    During periods of rising interest rates, the average life of
    certain types of securities may be extended because of slower
    than expected principal payments. This may lock in a below
    market interest rate, increase the security&#146;s duration and
    reduce the value of the security. This is known as extension
    risk.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Market interest rates for investment grade fixed income
    securities in which the Fund will invest have recently declined
    significantly below the historical average rates for such
    securities. This decline has increased the risk that these rates
    will rise in the future (which would cause the value of the
    Fund&#146;s assets invested in fixed income securities to
    decline) and the degree to which net asset values may decline in
    such event. However, historical interest rate levels are not
    necessarily predictive of future interest rate levels.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Inflation
    Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Inflation risk is the risk that the value of assets or income
    from investments will be worth less in the future as inflation
    decreases the value of money. As inflation increases, the real
    value of the Fund&#146;s shares and distributions thereon can
    decline. In addition, during any periods of rising inflation,
    dividend rates of any variable rate debt securities or preferred
    shares issued by the Fund would likely increase, which would
    tend to further reduce returns to common shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Equity
    Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An inherent risk of investing in the Fund is equity risk, which
    is the risk that the securities held by the Fund will fall in
    market value due to adverse market and economic conditions,
    perceptions regarding the industries in which the issuers of
    securities held by the Fund participate and the particular
    circumstances and
</DIV>

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    <BR>
    23
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    performance of particular companies whose securities the Fund
    holds. An investment in the Fund represents an indirect economic
    stake in the securities owned by the Fund, which are for the
    most part traded on securities exchanges or in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    markets. The market value of these securities, like other market
    investments, may move up or down, sometimes rapidly and
    unpredictably, and the prices of most securities in a market can
    drop substantially at any time. The net asset value of the Fund
    may at any point in time be less than at the time the
    shareholder invested in the Fund, even after taking into account
    any reinvestment of distributions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Risk is greater for the securities of small- and
    mid-capitalization companies because they generally are more
    vulnerable than larger companies to adverse business or economic
    developments and they may have more limited resources. The
    securities of small- and mid-capitalization companies also may
    trade less frequently and in smaller volume than larger
    companies. As a result, the value of such securities may be more
    volatile than the securities of larger companies, and the Fund
    may experience difficulty in purchasing or selling such
    securities at the desired time and price. In general these risks
    are greater for small-capitalization companies than for
    mid-capitalization companies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Leverage
    Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Leverage entails two primary risks. The first risk is that the
    use of leverage magnifies the impact on the holders of common
    shares of changes in net asset value. For example, if the Fund
    were to use 33% leverage, it would show a 1.5% increase or
    decline in net asset value for each 1% increase or decline in
    the value of its total assets. The second risk is that the cost
    of leverage could exceed the return on the securities acquired
    with the proceeds of leverage, thereby diminishing rather than
    enhancing the return to holders of common shares. These two
    risks would make the Fund&#146;s total return to holders of
    common shares more volatile were it to use leverage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund uses leverage, it may be required to sell
    investments in order to meet interest or dividend payments on
    the debt or preferred shares when it may be disadvantageous to
    do so. In addition, a decline in net asset value could affect
    the ability of the Fund to make common share dividend payments
    and such a failure to pay dividends or make distributions could
    result in the Fund ceasing to qualify as a regulated investment
    company under the Code. See &#147;Taxation.&#148; Finally, if
    the asset coverage for debt securities or preferred shares
    declines to less than 300% or 200%, respectively (as a result of
    market fluctuations or otherwise), the Fund would be required to
    sell a portion of its investments to redeem the preferred shares
    or repay the debt when it may be disadvantageous to do so.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Turnover Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    High portfolio turnover may result in increased transaction
    costs to the Fund, which may result in higher Fund expenses and
    lower total returns. The sale of portfolio securities also may
    result in the recognition of capital gain, which may result in
    tax liabilities for shareholders, or loss. Given the frequency
    of sales, any such net gain may be short-term capital gain.
    Unlike long-term capital gain, short-term capital gain is
    taxable to shareholders at the same rates as ordinary income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Market
    Discount Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Whether investors will realize gains or losses upon the sale of
    common shares of the Fund will depend upon the market price of
    the shares at the time of sale, which may be less or more than
    the Fund&#146;s net asset value per share. Since the market
    price of the shares will be affected by such factors as the
    relative demand for and supply of the shares in the market,
    general market and economic conditions, and other factors beyond
    the control of the Fund, we cannot predict whether the shares
    will trade at, below, or above net asset value or at, below, or
    above the public offering price. Shares of closed-end funds
    often trade at a discount to their net asset values and the
    Fund&#146;s shares may trade at such a discount. This risk may
    be greater for investors expecting to sell their shares of the
    Fund soon after completion of the public offering. The common
    shares of the Fund are designed primarily for long-term
    investors, and investors in the shares should not view the Fund
    as a vehicle for trading purposes.
</DIV>

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    <BR>
    24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Stock Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common stock of an issuer in the Fund&#146;s portfolio may
    decline in price if, among other reasons, the issuer of the
    security experiences a decline in its financial condition.
    Common stock in which the Fund will invest is structurally
    subordinated in terms of priority to corporate income and assets
    to preferred stock, bonds and other debt instruments in a
    company&#146;s capital structure and therefore will be subject
    to greater dividend risk than preferred stock or debt
    instruments of such issuers. In addition, while common stock has
    historically generated higher average returns than fixed income
    securities, common stock has also experienced significantly more
    volatility in those returns.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An adverse event, such as an unfavorable earnings report, may
    depress the value of a particular common stock held by the Fund.
    Also, the prices of common stocks are sensitive to general
    movements in the stock market and a drop in stock market indices
    may depress the prices of common stocks to which the Fund has
    exposure. Common stock prices fluctuate for several reasons,
    including changes in investors&#146; perceptions of the
    financial condition of an issuer or the general condition of the
    relevant stock market, or the occurrence of political or
    economic events affecting the issuers. In addition, common stock
    prices may be particularly sensitive to rising interest rates,
    as the cost of capital rises and borrowing costs increase.
    Interest rates recently have been rising and it is possible that
    they will rise further.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Management
    Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is subject to management risk because its portfolio is
    actively managed. The Investment Adviser will apply investment
    techniques and risk analyses in making investment decisions for
    the Fund, but there can be no guarantee that these will produce
    the desired results.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dependence
    on Key Personnel</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser is dependent upon the expertise of
    Mr.&#160;Mario J. Gabelli in providing advisory services with
    respect to the Fund&#146;s investments. If the Investment
    Adviser were to lose the services of Mr.&#160;Gabelli, its
    ability to service the Fund could be adversely affected. There
    can be no assurance that a suitable replacement could be found
    for Mr.&#160;Gabelli in the event of his death, resignation,
    retirement or inability to act on behalf of the Investment
    Adviser.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot assure you what percentage of the distributions paid
    on the common shares, if any, will consist of tax-advantaged
    qualified dividend income or long-term capital gains or what the
    tax rates on various types of income will be in future years.
    See &#147;Taxation.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Current
    Developments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the terrorist attacks on the World Trade Center
    and the Pentagon on September&#160;11, 2001, some of the
    U.S.&#160;securities markets were closed for a
    <FONT style="white-space: nowrap">four-day</FONT>
    period. These terrorists attacks, the war in Iraq and its
    aftermath and other geopolitical events have led to, and may in
    the future lead to, increased short-term market volatility and
    may have long-term effects on U.S. and world economies and
    markets. The nature, scope and duration of the war and
    occupation cannot be predicted with any certainty. Similar
    events in the future or other disruptions of financial markets
    could affect interest rates, securities exchanges, auctions,
    secondary trading, ratings, credit risk, inflation, energy
    prices and other factors relating to the common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Anti-Takeover
    Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s Governing Documents include provisions that
    could limit the ability of other entities or persons to acquire
    control of the Fund or convert the Fund to an open-end fund. See
    &#147;Anti-Takeover Provisions of the Fund&#146;s Governing
    Documents.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT
    OF THE FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board (who, with the Fund&#146;s officers, are described in
    the SAI) has overall responsibility for the management of the
    Fund. The Board decides upon matters of general policy and
    reviews the actions of the Investment Adviser, Gabelli Funds,
    LLC, located at One Corporate Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422,</FONT>
    and the
    <FONT style="white-space: nowrap">Sub-Administrator</FONT>
    (as defined below). Pursuant to an investment advisory contract
    with the Fund, the Investment Adviser, under the supervision of
    the Board, provides a continuous investment program for the
    Fund&#146;s portfolio; provides investment research and makes
    and executes recommendations for the purchase and sale of
    securities; and provides facilities and personnel, including
    officers required for its administrative management.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Investment Adviser</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Gabelli Funds, LLC acts as the Fund&#146;s Investment Adviser
    pursuant to an advisory agreement (the &#147;Advisory
    Agreement&#148;) with the Fund. The Investment Adviser is a New
    York corporation with principal offices located at One Corporate
    Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422.</FONT>
    The Investment Adviser was organized in 1999 and is the
    successor to Gabelli Funds, Inc., which was organized in 1980.
    As of September&#160;30, 2006, the Investment Adviser acted as
    registered investment adviser to 27 management investment
    companies with aggregate net assets of approximately
    $13.5&#160;billion. The Investment Adviser, together with other
    affiliated investment advisers noted below had assets under
    management totaling approximately $26.6&#160;billion as of
    September&#160;30, 2006. GAMCO Asset Management Inc., an
    affiliate of the Investment Adviser, acts as investment adviser
    for individuals, pension trusts, profit sharing trusts,
    endowments and other institutional clients, and as a
    <FONT style="white-space: nowrap">sub-adviser</FONT>
    to management investment companies having aggregate assets of
    approximately $12.2&#160;billion under management as of
    September&#160;30, 2006. Gabelli Securities, Inc., an affiliate
    of the Investment Adviser, acts as investment adviser for
    investment partnerships and entities having aggregate assets of
    approximately $500&#160;million under management as of
    September&#160;30, 2006. Gabelli Fixed Income LLC, an affiliate
    of the Investment Adviser, acts as investment adviser for
    separate accounts having aggregate assets of approximately
    $54&#160;million under management as of September&#160;30, 2006.
    Gabelli Advisers, Inc., an affiliate of the Investment Adviser,
    acts as investment manager to The Westwood Funds having
    aggregate assets of approximately $400&#160;million under
    management as of September&#160;30, 2006.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser is a wholly-owned subsidiary of GAMCO
    Investors, Inc., a New York corporation, whose Class&#160;A
    common stock is traded on the NYSE under the symbol
    &#147;GBL.&#148; Mr.&#160;Mario J. Gabelli may be deemed a
    &#147;controlling person&#148; of the Investment Adviser on the
    basis of his ownership of a majority of the stock of GGCP, Inc.,
    which owns a majority of the capital stock of GAMCO Investors,
    Inc.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser will provide a continuous investment
    program for the Fund&#146;s portfolio and oversee the
    administration of all aspects of the Fund&#146;s business and
    affairs. The Investment Adviser has sole investment discretion
    for the Fund&#146;s assets under the supervision of the Board
    and in accordance with the Fund&#146;s stated policies. The
    Investment Adviser will select investments for the Fund and will
    place purchase and sale orders on behalf of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A discussion regarding the basis for the Board approving the
    investment advisory contract will be available in the
    Fund&#146;s first semi-annual report to shareholders dated June,
    2007.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Fees of
    the Investment Adviser</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Gabelli Funds, LLC serves as the Fund&#146;s investment adviser
    at an annual base rate of 0.50% of the Fund&#146;s average
    weekly managed assets payable monthly in arrears. Managed assets
    consist of all of the assets of the Fund without deduction for
    borrowings, repurchase transactions and other leveraging
    techniques, the liquidation value of any outstanding preferred
    shares or other liabilities except for certain ordinary course
    expenses. In addition, the Investment Adviser will be entitled
    to receive an annual performance fee as of the end of each
    calendar year if the total return of the Fund on its common
    shares during the calendar year in question exceeds the total
    return of the T-Bill Index compounded quarterly on the same
    dates as the Fund&#146;s
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    quarterly ex-dividend dates (or at the end of the quarter if no
    dividend is paid) during the same period. If the Fund&#146;s
    total return for the calendar year equals the total return of
    the T-Bill Index for the same period plus 3.0% (300 basis
    points), the Investment Adviser will receive a performance fee
    of 0.75% of the Fund&#146;s average weekly managed assets during
    the period. This performance fee will be increased by 0.01% (one
    basis point) for each 0.04% (four basis points) by which the
    Fund&#146;s total return during the period exceeds the T-Bill
    Index total return plus 3.0% (300&#160;basis points), up to a
    maximum performance fee of 1.50% if the excess performance over
    the T-Bill Index is 6.0% (600 basis points) or greater and will
    be decreased at the same rate for the amount by which the
    Fund&#146;s total return during the period is less than the
    T-Bill Index total return plus 3.0% (300&#160;basis points),
    until no performance fee is payable if the Fund&#146;s total
    return is less than or equal to the T-Bill Index total return.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of calculating the Fund&#146;s performance fee, the
    Fund&#146;s total return will be calculated as the sum of the
    Fund&#146;s change in net asset value per common share from
    January 1 (or the date of the Fund&#146;s commencement of
    investment operations, in the case of the Fund&#146;s first year
    of investment operations), through December&#160;31 of each year
    plus the amount of distributions per common share in respect of
    such period (calculating the number of shares outstanding on a
    daily average weighted basis assuming reinvestment of such
    distributions at net asset value per share on the ex-dividend
    date and assuming solely for purposes of the Fund&#146;s
    performance fee that all issuances and repurchases of shares are
    at net asset value). Increases and decreases in the investment
    management fee will be accrued as often as net asset value per
    common share is calculated and accordingly will affect the total
    return on which the rate of the fee is determined.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of calculating the Fund&#146;s performance fee, the
    T-Bill Index&#146;s total return will be calculated as the sum
    of the change in the discount price of the three month Treasury
    bill from the first business day after January 1 of each year
    (or the date of the Fund&#146;s commencement of investment
    operations, in the case of the Fund&#146;s first year of
    investment operations) to the last business day of each year
    plus the weekly yield to maturity interest payments thereon
    implied by the discount price thereof and compounded quarterly
    on the same dates as the Fund&#146;s quarterly ex-dividend dates
    (or at the end of the quarter if no dividend is paid).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following chart illustrates the variability of the
    Fund&#146;s investment management fees in various circumstances.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Gabelli Global Deal Fund<BR>
    Total Investment Advisory Fee Rate<BR>
    (as a percentage of average weekly managed assets)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="21%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=08 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=09 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=10 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=10 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=11 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=11 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=12 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=12 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=13 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=13 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=14 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=14 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=15 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=15 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=16 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=16 type=maindata -->
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B>T-Bill Index<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="31" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>The Fund&#146;s Total Return</B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Total Return</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>0% or less</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>1%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>3%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>4%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>6%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>7%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>8%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>9%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>10%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>11%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>12%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>13%</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>14%</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B><FONT style="font-size: 8pt">2%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.25
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B><FONT style="font-size: 8pt">3%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.25
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B><FONT style="font-size: 8pt">4%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.25
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B><FONT style="font-size: 8pt">5%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.25
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B><FONT style="font-size: 8pt">6%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.25
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B><FONT style="font-size: 8pt">7%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.25
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B><FONT style="font-size: 8pt">8%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">0.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.25
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.50
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">1.75
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">2.00
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Payment
    of Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser is obligated to pay expenses associated
    with providing the services contemplated by the Advisory
    Agreement between the Fund and the Investment Adviser, including
    compensation of and office space for its officers and employees
    connected with investment and economic research, trading and
    investment management, and administration of the Fund (but
    excluding costs associated with the calculation of the net asset
    value).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the fees of the Investment Adviser, the Fund is
    responsible for the payment of all its other expenses incurred
    in the operation of the Fund, which include, among other things,
    expenses for legal and independent accountant&#146;s services;
    charges of the Custodian; charges of the transfer agent and
    dividend disbursing agent; Securities and Exchange Commission
    fees; stock exchange listing fees; fees and expenses of certain
    Trustees; chief compliance officer services; expenses of
    personnel performing shareholder servicing and related
    functions; accounting and printing costs; brokerage costs; the
    Fund&#146;s pro rata portion of membership fees in trade
    organizations; expenses of qualifying the Fund for sale in
    various states; expenses (including interest) incurred relating
    to the use of leverage, if any; rating agency fees, if any;
    taxes; litigation and other extraordinary or non-recurring
    expenses; and other expenses properly payable by the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Selection
    of Securities Brokers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Advisory Agreement contains provisions relating to the
    selection of securities brokers to effect the portfolio
    transactions of the Fund. Under those provisions, the Investment
    Adviser may (i)&#160;direct Fund portfolio brokerage to
    Gabelli&#160;&#38; Company, Inc. (&#147;Gabelli&#160;&#38;
    Company&#148;) or other broker-dealer affiliates of the
    Investment Adviser and (ii)&#160;pay commissions to brokers
    other than Gabelli&#160;&#38; Company that are higher than might
    be charged by another qualified broker to obtain brokerage
    and/or research services considered by the Investment Adviser to
    be useful or desirable for its investment management of the Fund
    and/or its other advisory accounts or those of any investment
    adviser affiliated with it. The SAI contains further information
    about the Advisory Agreement, including a more complete
    description of the advisory and expense arrangements,
    exculpatory and brokerage provisions, as well as information on
    the brokerage practices of the Fund. The Fund expects that a
    substantial portion of its portfolio transactions may be
    executed through Gabelli&#160;&#38; Company so long as the
    Investment Adviser and the Board conclude that
    Gabelli&#160;&#38; Company is able to provide best execution at
    a favorable cost.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Management</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mario J. Gabelli currently leads the investment team responsible
    for the day to day management of the Fund. Mr.&#160;Gabelli has
    served as Chairman and Chief Executive Officer of GAMCO
    Investors, Inc. and its predecessors since 1976.
    Mr.&#160;Gabelli is the Chief Investment Officer&#160;&#151;
    Value Portfolios for the Investment Adviser and GAMCO Asset
    Management Inc. Mr.&#160;Gabelli serves as portfolio manager for
    several funds in the Gabelli fund family and is a director of
    several funds in the family. Because of the diverse nature of
    Mr.&#160;Gabelli&#146;s responsibilities, he will devote less
    than all of his time to the day to day management of the Fund.
    Mr.&#160;Gabelli is also Chairman and Chief Executive Officer of
    GGCP, Inc. as well as Chairman of the Board of Lynch Interactive
    Corporation, a multimedia and communication services company.
    The SAI provides additional information such as the portfolio
    manager&#146;s compensation, other accounts managed by the
    portfolio manager, and the portfolio manager&#146;s ownership of
    securities in the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Resident
    Trustees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mario d&#146;Urso is not a U.S.&#160;resident and substantially
    all of his assets may be located outside of the United States.
    Mr.&#160;d&#146;Urso does not have an agent for service of
    process in the United States. As a result, it may be difficult
    for U.S.&#160;investors to effect service of process upon
    Mr.&#160;d&#146;Urso within the United States or to realize
    judgments of courts of the United States predicated upon civil
    liabilities under the federal securities laws of the United
    States. In addition, it is not certain that civil liabilities
    predicated upon the federal securities laws on which a valid
    judgment of a court in the United States is obtained would be
    enforceable in the courts of the jurisdictions in which
    Mr.&#160;d&#146;Urso resides.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Sub-Administrator</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser has entered into a
    <FONT style="white-space: nowrap">sub-administration</FONT>
    agreement with PFPC Inc. (the
    <FONT style="white-space: nowrap">&#147;Sub-Administrator&#148;)</FONT>
    pursuant to which the
    <FONT style="white-space: nowrap">Sub-Administrator</FONT>
    provides certain administrative services necessary for the
    Fund&#146;s operations, which do not include the investment and
    portfolio management services provided by the Investment
    Adviser. For these services and the related expenses borne by
    the
    <FONT style="white-space: nowrap">Sub-Administrator,</FONT>
    the Investment Adviser pays a prorated monthly fee at the annual
    rate of 0.0275% of the first $10&#160;billion
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of the aggregate average net assets of the Fund and all other
    funds advised by the Investment Adviser and Gabelli Advisers,
    Inc. and administered by the
    <FONT style="white-space: nowrap">Sub-Administrator,</FONT>
    0.0125% of the aggregate average net assets exceeding
    $10&#160;billion and 0.01% of the aggregate average net assets
    in excess of $15&#160;billion. The
    <FONT style="white-space: nowrap">Sub-Administrator</FONT>
    has its principal office at 400 Bellevue Parkway, Wilmington,
    Delaware 19809.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Matters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund received the following information from the Investment
    Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Over the past several years, the staff of the Securities and
    Exchange Commission (the &#147;Staff&#148;), the staff of the
    New York Attorney General&#146;s office (the &#147;NYAG&#148;),
    and officials of other states have been conducting industry-wide
    inquiries into, and bringing enforcement and other proceedings
    regarding, trading abuses involving open-end investment
    companies. The Investment Adviser and its affiliates have
    received information requests and subpoenas from the Staff and
    the NYAG in connection with these inquiries and have been
    complying with these requests for documents and testimony. The
    Investment Adviser has implemented additional compliance
    policies and procedures in response to recent industry
    initiatives and its internal reviews of its mutual fund
    practices in a variety of areas. The Investment Adviser has not
    found any information that it believes would be material to the
    ability of the Investment Adviser to fulfill its obligations
    under the Advisory Agreement. More specifically, the Investment
    Adviser has found no evidence of arrangements for trading in the
    Gabelli mutual funds after the 4:00&#160;p.m. pricing time and
    no evidence of improper short-term trading in these funds by its
    investment professionals or senior executives. The Investment
    Adviser did find that one investor, who had been engaged in
    short-term trading in one of the Gabelli mutual funds (the
    prospectus of which did not at that time impose limits on
    short-term trading) and who had subsequently made an investment
    in a hedge fund managed by an affiliate of the Investment
    Adviser, was banned from the mutual fund only after certain
    other investors were banned. The Investment Adviser believes
    that this relationship was not material to the Investment
    Adviser. The Investment Adviser also found that certain
    discussions took place in 2002 and 2003 between the Investment
    Adviser&#146;s staff and personnel of an investment advisor
    regarding possible frequent trading in certain Gabelli domestic
    equity funds. In June 2006, the Investment Adviser began
    discussions with the Staff regarding a possible resolution of
    their inquiry. Since these discussions are ongoing, the
    Investment Adviser cannot determine whether they will ultimately
    result in a settlement of this matter and, if so, what the terms
    of the settlement might be. There can be no assurance that any
    resolution of this matter will not have a material adverse
    impact on the Investment Adviser or on its ability to fulfill
    its obligations under the Advisory Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser was informed by the Staff that they may
    recommend to the Securities and Exchange Commission that the
    Investment Adviser be held accountable for the actions of two
    closed-end funds managed by the Investment Adviser relating to
    Section&#160;19(a) and
    <FONT style="white-space: nowrap">Rule&#160;19a-1</FONT>
    of the 1940 Act. These provisions require registered investment
    companies to provide written statements to shareholders when a
    distribution is made from a source other than net investment
    income. While the two funds sent annual statements containing
    the required information and
    <FONT style="white-space: nowrap">Form&#160;1099-DIV</FONT>
    statements as required by the IRS, the funds did not send
    written statements to shareholders with each distribution in
    2002 and 2003. The then existing closed-end funds managed by the
    Investment Adviser changed their notification procedures in 2004
    and the Investment Adviser believes that all of the funds have
    been in compliance with Section&#160;19(a) and
    <FONT style="white-space: nowrap">Rule&#160;19a-1</FONT>
    of the 1940 Act since that time. The Staff indicated that they
    may recommend to the Securities and Exchange Commission that
    administrative remedies be sought, including a monetary penalty.
    The Investment Adviser cannot predict whether an administrative
    proceeding will be instituted and, if so, what the ultimate
    resolution might be. The Investment Adviser currently expects
    that any resolution of this matter will not have a material
    effect on the Investment Adviser&#146;s ability to fulfill its
    obligations under the Advisory Agreement. If the Securities and
    Exchange Commission were to revoke the exemptive order that the
    Fund expects to rely upon to make distributions of capital gains
    more frequently than annually, the Board may consider whether to
    modify or possibly eliminate the Fund&#146;s current
    distribution policy.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Principal transactions are not entered into with affiliates of
    the Fund. However, Gabelli&#160;&#38; Company, an affiliate of
    the Investment Adviser, may execute portfolio transactions on
    stock exchanges and in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    markets on an agency basis and receive a stated commission
    therefor. For a more detailed discussion of the Fund&#146;s
    brokerage allocation practices, see &#147;Portfolio
    Transactions&#148; in the SAI.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends
    and Distributions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund intends to distribute substantially all of its net
    capital gain each year, but may determine to retain all or part
    of any net capital gain for reinvestment. In such event, the
    Fund will pay federal income tax on such retained gain and the
    Fund&#146;s shareholders will receive a corresponding tax credit
    and increase in the basis of their shares. The Fund contemplates
    paying a minimum annual distribution of 8% of the average net
    asset value of the Fund to its common shareholders. The Fund
    anticipates a level distribution in each of the first three
    quarters principally based on the net asset value of the Fund at
    the beginning of each year and an adjusting distribution in the
    fourth quarter of a sufficient amount to pay 8% of the average
    net asset value of the Fund, as of the last day of the four
    preceding calendar quarters, or to satisfy the minimum
    distribution requirements of the Code, whichever is greater.
    Additionally, the Fund may also increase one or more quarterly
    distributions from the base quarterly amount stated based on
    realized income. Each quarter, the Board will review the amount
    of any potential distribution and the income, capital gains or
    capital available. Quarterly distributions are expected to be
    paid in March, June, September and December of each year. This
    policy permits holders of common shares to realize a
    predictable, but not assured, level of cash flow and some
    liquidity periodically with respect to their common shares
    without having to sell shares. To avoid paying income tax at the
    corporate level, the Fund will distribute substantially all of
    its net investment company taxable income and net capital gains.
    In the event that the Fund&#146;s net investment company taxable
    income and net capital gains exceed the total of the Fund&#146;s
    quarterly distributions on common shares and the amount of
    distributions on any preferred shares issued by the Fund, the
    Fund intends to pay such excess once a year. If, for any
    calendar year, the total quarterly distributions on common
    shares and the amount of distributions on any preferred shares
    issued by the Fund exceed net investment company taxable income
    and net capital gain, the excess will generally be treated as a
    tax free return of capital up to the amount of a
    shareholder&#146;s tax basis in the common shares. Any
    distributions which (based upon the Fund&#146;s full year
    performance) constitute tax free return of capital will reduce a
    shareholder&#146;s tax basis in the common shares, thereby
    increasing such shareholder&#146;s potential gain or reducing
    his or her potential loss on the sale of the common shares. Any
    amounts distributed to a shareholder in excess of the basis in
    the common shares will generally be taxable to the shareholder
    as capital gain. See &#147;Taxation.&#148; Quarterly
    distribution notices provided by the Fund to its shareholders
    will describe the portion of the quarterly distribution which,
    in the Fund&#146;s current good faith judgment, constitutes
    investment company taxable income, capital gain, or a return of
    capital. The final determination of the source of such
    distributions for federal income tax purposes will be made
    shortly after year end based on the Fund&#146;s actual net
    investment company taxable income and net capital gain for the
    year and will be communicated to shareholders promptly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event the Fund distributes amounts in excess of its
    investment company taxable income and net capital gain, such
    distributions will decrease the Fund&#146;s total assets and,
    therefore, have the likely effect of increasing the Fund&#146;s
    expense ratio as the Fund&#146;s fixed expenses will become a
    larger percentage of the Fund&#146;s average net assets. In
    addition, in order to make such distributions, the Fund may have
    to sell a portion of its investment portfolio at a time when it
    is disadvantageous to do so.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund, along with other closed-end registered investment
    companies advised by the Investment Adviser, is covered by an
    exemption from Section&#160;19(b) of the 1940 Act and
    <FONT style="white-space: nowrap">Rule&#160;19b-1</FONT>
    thereunder permitting the Fund to make periodic distributions of
    long-term capital gains provided that any distribution policy of
    the Fund with respect to its common shares calls for periodic
    (e.g., quarterly or semi-annually, but in no event more
    frequently than monthly) distributions in an amount equal to a
    fixed percentage of the Fund&#146;s average net asset value over
    a specified period of time or market price per common share at
    or about the time of distribution or payment of a fixed dollar
    amount. The Fund&#146;s current policy is to make quarterly
    distributions
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    to holders of its common shares. The exemption also permits the
    Fund to make such distributions with respect to its preferred
    shares, if any, in accordance with such shares&#146; terms.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Automatic
    Dividend Reinvestment and Voluntary Cash Purchase Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Fund&#146;s Automatic Dividend Reinvestment and
    Voluntary Cash Purchase Plan (the &#147;Plan&#148;), a
    shareholder whose common shares are registered in his or her own
    name will have all distributions reinvested automatically by the
    transfer agent, which is agent under the Plan, unless the
    shareholder elects to receive cash. Distributions with respect
    to shares registered in the name of a broker-dealer or other
    nominee (that is, in &#147;street name&#148;) will be reinvested
    by the broker or nominee in additional shares under the Plan,
    unless the service is not provided by the broker or nominee or
    the shareholder elects to receive distributions in cash.
    Investors who own common shares registered in street name should
    consult their broker-dealers for details regarding reinvestment.
    All distributions to investors who do not participate in the
    Plan will be paid by check mailed directly to the record holder
    by the transfer agent as dividend disbursing agent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Plan, whenever the market price of the common shares
    is equal to or exceeds net asset value at the time shares are
    valued for purposes of determining the number of shares
    equivalent to the cash distribution, participants in the Plan
    are issued common shares, valued at the greater of (i)&#160;the
    net asset value as most recently determined or (ii)&#160;95% of
    the then current market price of the common shares. The
    valuation date is the distribution payment date or, if that date
    is not a NYSE trading day, the next trading day. If the net
    asset value of the common shares at the time of valuation
    exceeds the market price of the common shares, participants will
    receive shares purchased by the Plan agent in the open market.
    If the Fund should declare a distribution payable only in cash,
    the Plan agent will buy the common shares for such Plan in the
    open market, on the NYSE or elsewhere, for the
    participants&#146; accounts, except that the Plan agent will
    endeavor to terminate purchases in the open market and cause the
    Fund to issue shares at the greater of net asset value or 95% of
    market value if, following the commencement of such purchases,
    the market value of the common shares exceeds net asset value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Participants in the Plan have the option of making additional
    cash payments to the Plan agent, semi-monthly, for investment in
    the shares at the then current market price. Such payments may
    be made in any amount from $250 to $10,000. The Plan agent will
    use all funds received from participants to purchase shares of
    the Fund in the open market on or about the 1st&#160;or
    15th&#160;of each month. The Plan agent will charge each
    shareholder who participates $1.00, plus a pro rata share of the
    brokerage commissions. Brokerage charges for such purchases are
    expected to be less than the usual brokerage charge for such
    transactions. It is suggested that participants send voluntary
    cash payments to the Plan agent in a manner that ensures that
    the Plan agent will receive these payments approximately
    10&#160;days before the 1st&#160;or 15th&#160;of the month. A
    participant may without charge withdraw a voluntary cash payment
    by written notice, if the notice is received by the Plan agent
    at least 48&#160;hours before such payment is to be invested.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Plan agent maintains all shareholder accounts in the Plan
    and furnishes written confirmations of all transactions in the
    account, including information needed by shareholders for
    personal and tax records. Shares in the account of each Plan
    participant will be held by the Plan agent in noncertificated
    form in the name of the participant. A Plan participant may send
    its share certificates to the Plan agent so that the shares
    represented by such certificates will be held by the Plan agent
    in the participant&#146;s shareholder account under the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the case of shareholders such as banks, brokers or nominees,
    which hold shares for others who are the beneficial owners, the
    Plan agent will administer the Plan on the basis of the number
    of shares certified from time to time by the shareholder as
    representing the total amount registered in the
    shareholder&#146;s name and held for the account of beneficial
    owners who participate in the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund reserves the right to amend or terminate its Plan as
    applied to any voluntary cash payments made and any distribution
    paid subsequent to written notice of the change sent to the
    members of such Plan at least 90&#160;days before the record
    date for such distribution. The Plan also may be amended or
    terminated by the Plan agent on at least 90&#160;days written
    notice to the participants in such Plan. All correspondence
    concerning the Plan should be directed to the transfer agent.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF THE SHARES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following is a brief description of the terms of the
    common shares. This description does not purport to be complete
    and is qualified by reference to the Fund&#146;s Governing
    Documents. For complete terms of the common shares, please refer
    to the actual terms of such series, which are set forth in the
    Governing Documents.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is an unincorporated statutory trust organized under
    the laws of Delaware pursuant to a Certificate of Trust dated as
    of October&#160;17, 2006. The Fund is authorized to issue an
    unlimited number of common shares of beneficial interest, par
    value $0.001&#160;per share. Each common share has one vote and,
    when issued and paid for in accordance with the terms of this
    offering, will be fully paid and non-assessable. Though the Fund
    expects to pay distributions quarterly on the common shares, it
    is not obligated to do so. All common shares are equal as to
    distributions, assets and voting privileges and have no
    conversion, preemptive or other subscription rights. The Fund
    will send annual and semi-annual reports, including financial
    statements, to all holders of its shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has no present intention of offering any additional
    common shares. Any additional offerings of shares will require
    approval by the Board. Any additional offering of common shares
    will be subject to the requirements of the 1940 Act, which
    provides that shares may not be issued at a price below the then
    current net asset value, exclusive of sales load, except in
    connection with an offering to existing holders of common shares
    or with the consent of a majority of the Fund&#146;s outstanding
    voting securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s common shares are expected to be approved for
    listing on the NYSE, subject to notice of issuance, under the
    symbol &#147;GDL.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s net asset value per share will be reduced
    immediately following the offering of common shares by the
    amount of the sales load and offering expenses paid by the Fund.
    See &#147;Use of Proceeds.&#148; Unlike open-end funds,
    closed-end funds like the Fund do not continuously offer shares
    and do not provide daily redemptions. Rather, if a shareholder
    determines to buy additional common shares or sell shares
    already held, the shareholder may do so by trading through a
    broker on the NYSE or otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shares of closed-end investment companies often trade on an
    exchange at prices lower than net asset value. Because the
    market value of the common shares may be influenced by such
    factors as distribution levels (which are in turn affected by
    expenses), distribution stability, net asset value, relative
    demand for and supply of such shares in the market, general
    market and economic conditions and other factors beyond the
    control of the Fund, the Fund cannot assure you that common
    shares will trade at a price equal to or higher than net asset
    value in the future. The common shares are designed primarily
    for long-term investors and you should not purchase the common
    shares if you intend to sell them soon after purchase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s common shareholders will vote as a single class
    to elect the Board (subject to the special voting rights of
    preferred shares, if any) and on additional matters with respect
    to which the 1940 Act, the Fund&#146;s Governing Documents or
    resolutions adopted by the Board provide for a vote of the
    Fund&#146;s common shareholders. See &#147;Anti-Takeover
    Provisions of the Fund&#146;s Governing Documents.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Book-Entry</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares will initially be held in the name of
    Cede&#160;&#38; Co. as nominee for the Depository Trust Company
    (&#147;DTC&#148;). The Fund will treat Cede&#160;&#38; Co. as
    the holder of record of the common shares for all purposes. In
    accordance with the procedures of DTC, however, purchasers of
    common shares will be deemed the beneficial owners of shares
    purchased for purposes of distributions, voting, and liquidation
    rights. Purchasers of common shares may obtain registered
    certificates by contacting the transfer agent.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ANTI-TAKEOVER
    PROVISIONS OF THE FUND&#146;S GOVERNING DOCUMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund presently has provisions in its Governing Documents
    which could have the effect of limiting, in each case,
    (i)&#160;the ability of other entities or persons to acquire
    control of the Fund, (ii)&#160;the Fund&#146;s freedom to engage
    in certain transactions, or (iii)&#160;the ability of the
    Fund&#146;s Trustees or shareholders to amend the Governing
    Documents or effectuate changes in the Fund&#146;s management.
    These provisions of the Governing Documents of the Fund may be
    regarded as &#147;anti-takeover&#148; provisions. The Board is
    divided into three classes, each having a term of no more than
    three years (except, to ensure that the term of a class of the
    Fund&#146;s Trustees expires each year, one class of the
    Fund&#146;s Trustees will serve an initial one year term and
    three year terms thereafter and another class of its Trustees
    will serve an initial two year term and three year terms
    thereafter). Each year the term of one class of Trustees will
    expire. Accordingly, only those Trustees in one class may be
    changed in any one year, and it would require a minimum of two
    years to change a majority of the Board. Such system of electing
    trustees may have the effect of maintaining the continuity of
    management and, thus, make it more difficult for the
    shareholders of the Fund to change the majority of Trustees. See
    &#147;Management of the Fund&#160;&#151; Trustees and
    Officers&#148; in the SAI. A Trustee of the Fund may be removed
    with or without cause by two-thirds of the remaining Trustees
    and, without cause, by
    66<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    of the votes entitled to be cast for the election of such
    Trustees. Special voting requirements of 75% of the outstanding
    voting shares (in addition to any required class votes) apply to
    mergers into or a sale of all or substantially all of the
    Fund&#146;s assets, liquidation, conversion of the Fund into an
    open-end fund or interval fund, and amendments to several
    provisions of the Declaration of Trust, including the foregoing
    provisions. In addition, after completion of the offering,
    holders of 80% of the outstanding voting securities of the Fund,
    voting together as a single class, are generally required in
    order to authorize any of the following transactions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    merger or consolidation of the Fund with or into any other
    entity;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    issuance of any securities of the Fund to any person or entity
    for cash, other than pursuant to the Dividend and Reinvestment
    Plan or any offering if such person or entity acquires no
    greater percentage of the securities offered than the percentage
    beneficially owned by such person or entity immediately prior to
    such offering or, in the case of a class or series not then
    beneficially owned by such person or entity, the percentage of
    common shares beneficially owned by such person or entity
    immediately prior to such offering;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    sale, lease, or exchange of all or any substantial part of the
    assets of the Fund to any entity or person (except assets having
    an aggregate fair market value of less than $5,000,000);
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    sale, lease, or exchange to the Fund, in exchange for securities
    of the Fund, of any assets of any entity or person (except
    assets having an aggregate fair market value of less than
    $5,000,000);&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the purchase of the Fund&#146;s common shares by the Fund from
    any person or entity other than pursuant to a tender offer
    equally available to other shareholders in which such person or
    entity tenders no greater percentage of common shares than are
    tendered by all other shareholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If such person or entity is directly or indirectly through
    affiliates, the beneficial owner of more than 5% of the
    outstanding shares of the Fund, however, such vote would not be
    required when, under certain conditions, the Board approves the
    transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, shareholders have no authority to adopt, amend or
    repeal the Fund&#146;s By-Laws. The Trustees have authority to
    adopt, amend and repeal the Fund&#146;s By-Laws consistent with
    the Declaration of Trust (including to require approval by the
    holders of a majority of the outstanding shares for the election
    of Trustees).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The provisions of the Governing Documents described above could
    have the effect of depriving the owners of shares in the Fund of
    opportunities to sell their shares at a premium over prevailing
    market prices by discouraging a third party from seeking to
    obtain control of the Fund in a tender offer or similar
    transaction. The overall effect of these provisions is to render
    more difficult the accomplishment of a merger or the assumption
    of control by a principal shareholder.
</DIV>

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    <BR>
    33
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Governing Documents of the Fund are on file with the
    Securities and Exchange Commission. For the full text of these
    provisions see &#147;Additional Information.&#148;
</DIV>
<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CLOSED-END
    FUND&#160;STRUCTURE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is a newly organized, non-diversified, closed-end
    management investment company (commonly referred to as a
    closed-end fund). Closed-end funds differ from open-end funds
    (which are generally referred to as mutual funds) in that
    closed-end funds generally list their shares for trading on a
    stock exchange and do not redeem their shares at the request of
    the shareholder. This means that if you wish to sell your shares
    of a closed-end fund you must trade them on the market like any
    other stock at the prevailing market price at that time. In a
    mutual fund, if the shareholder wishes to sell shares of the
    fund, the mutual fund will redeem or buy back the shares at
    &#147;net asset value.&#148; Also, mutual funds generally offer
    new shares on a continuous basis to new investors, and
    closed-end funds generally do not. The continuous inflows and
    outflows of assets in a mutual fund can make it difficult to
    manage the Fund&#146;s investments. By comparison, closed-end
    funds are generally able to stay more fully invested in
    securities that are consistent with their investment objective,
    and also have greater flexibility to make certain types of
    investments, and to use certain investment strategies, such as
    financial leverage and investments in illiquid securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shares of closed-end funds often trade at a discount to their
    net asset value. Because of this possibility and the recognition
    that any such discount may not be in the interest of
    shareholders, the Fund&#146;s Board might consider from time to
    time engaging in open market repurchases, tender offers for
    shares or other programs intended to reduce the discount. We
    cannot guarantee or assure, however, that the Board will decide
    to engage in any of these actions. Nor is there any guarantee or
    assurance that such actions, if undertaken, would result in the
    shares trading at a price equal or close to net asset value per
    share. We cannot assure you that the Fund&#146;s common shares
    will not trade at a discount.
</DIV>
<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REPURCHASE
    OF COMMON SHARES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is a non-diversified, closed-end management investment
    company and as such its shareholders do not, and will not, have
    the right to require the Fund to repurchase their shares. The
    Fund, however, may repurchase its common shares from time to
    time as and when it deems such a repurchase advisable. The Board
    has authorized such repurchases to be made when the Fund&#146;s
    common shares are trading at a discount from net asset value of
    7.5% or more (or such other percentage as the Board may
    determine from time to time). Pursuant to the 1940 Act, the Fund
    may repurchase its common shares on a securities exchange
    (provided that the Fund has informed its shareholders within the
    preceding six months of its intention to repurchase such shares)
    or pursuant to tenders and may also repurchase shares privately
    if the Fund meets certain conditions regarding, among other
    things, distribution of net income for the preceding fiscal
    year, status of the seller, price paid, brokerage commissions,
    prior notice to shareholders of an intention to purchase shares,
    and purchasing in a manner and on a basis that does not
    discriminate unfairly against the other shareholders through
    their interest in the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When the Fund repurchases its common shares for a price below
    net asset value, the net asset value of the common shares that
    remain outstanding shares will be enhanced, but this does not
    necessarily mean that the market price of the outstanding common
    shares will be affected, either positively or negatively. The
    repurchase of common shares will reduce the total assets of the
    Fund available for investment and may increase the Fund&#146;s
    expense ratio.
</DIV>
<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NET ASSET
    VALUE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of determining the Fund&#146;s net asset value per
    share, portfolio securities listed or traded on a nationally
    recognized securities exchange or traded in the
    <FONT style="white-space: nowrap">U.S.&#160;over-the-counter</FONT>
    market for which market quotations are readily available are
    valued at the last quoted sale price or a market&#146;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 such
    day,
</DIV>

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    <BR>
    34
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the security is valued at the most recently available price or,
    if 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 the Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Portfolio securities primarily traded on foreign markets are
    generally valued at the preceding closing values of such
    securities on their respective exchanges, but may be fair valued
    pursuant to procedures established by the Board if market
    conditions change significantly after the close of the foreign
    market but prior to the close of business on the day the
    securities are being valued. Debt instruments with remaining
    maturities of 60&#160;days or less that are not credit impaired
    are valued at amortized cost, unless the Board determines such
    does not reflect fair value, in which case these securities will
    be valued at their fair value as determined by the Board. Debt
    instruments having a maturity greater than 60&#160;days for
    which market quotations are readily available are valued at the
    latest average of the bid and asked prices. If there were no
    asked prices quoted on such day, the security is valued using
    the closing bid price. Futures contracts are valued at the
    closing settlement price of the exchange or board of trade on
    which the applicable contract is traded.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securities and other assets for which market quotations are not
    readily available are valued at their fair value as determined
    in good faith under procedures established by and under the
    general supervision of the Board. Fair valuation methodologies
    and procedures may include, but are not limited to, analysis and
    review of available financial and non-financial information
    about the company; comparisons to the valuation and changes in
    valuation of similar securities, including a comparison of
    foreign securities to the equivalent United States dollar value
    ADR securities at the close of the U.S.&#160;exchange; and
    evaluation of any other information that could be indicative of
    the value of the security.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund obtains valuations on the basis of prices provided by
    one or more pricing services approved by the Board. All other
    investment assets, including restricted and not readily
    marketable securities, are valued in good faith at fair value
    under procedures established by and under the general
    supervision and responsibility of the Fund&#146;s Board. In
    addition, whenever developments in one or more securities
    markets after the close of the principal markets for one or more
    portfolio securities and before the time as of which the Fund
    determines its net asset value would, if such developments had
    been reflected in such principal markets, likely have more than
    a minimal effect on the Fund&#146;s net asset value per share,
    the Fund may fair value such portfolio securities based on
    available market information as of the time the Fund determines
    its net asset value.
</DIV>
<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TAXATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion is a brief summary of certain
    U.S.&#160;federal income tax considerations affecting the Fund
    and its shareholders. The discussion reflects applicable tax
    laws of the United States as of the date of this prospectus,
    which tax laws may be changed or subject to new interpretations
    by the courts or the Internal Revenue Service (the
    &#147;IRS&#148;) retroactively or prospectively. No attempt is
    made to present a detailed explanation of all United States
    federal, state, local and foreign tax concerns affecting the
    Fund and its shareholders (including shareholders owning large
    positions in the Fund), and the discussion set forth herein does
    not constitute tax advice. Investors are urged to consult their
    own tax advisers to determine the tax consequences to them of
    investing in the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund intends to elect to be treated and to qualify annually
    as a regulated investment company under Subchapter M of the
    Code. Accordingly, the Fund must, among other things,
    (i)&#160;derive in each taxable year at least 90% of its gross
    income from (a)&#160;dividends, interest (including tax-exempt
    interest), payments with respect to certain securities loans,
    and gains from the sale or other disposition of stock,
    securities or foreign currencies, or other income (including but
    not limited to gain from options, futures and forward contracts)
    derived with respect to its business of investing in such stock,
    securities or currencies and (b)&#160;net income derived from
    interests in certain publicly traded partnerships that are
    treated as partnerships for United States federal income tax
    purposes and that derive less than 90% of their gross income
    from the items described in (a)&#160;above (each a
    &#147;Qualified Publicly Traded Partnership&#148;); and
    (ii)&#160;diversify its holdings so that,
</DIV>

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    <BR>
    35
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    at the end of each quarter of each taxable year (a)&#160;at
    least 50% of the value of the Fund&#146;s total assets is
    represented by cash and cash items, United States government
    securities, the securities of other regulated investment
    companies and other securities, with such other securities
    limited, in respect of any one issuer, to an amount not greater
    than 5% of the value of the Fund&#146;s total assets and not
    more than 10% of the outstanding voting securities of such
    issuer and (b)&#160;not more than 25% of the value of the
    Fund&#146;s total assets is invested in the securities of
    (I)&#160;any one issuer (other than U.S. government securities
    and the securities of other regulated investment companies),
    (II)&#160;any two or more issuers that the Fund controls and
    that are determined to be engaged in the same business or
    similar or related trades or businesses or (III)&#160;any one or
    more Qualified Publicly Traded Partnerships.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investments in partnerships, including in
    Qualified Publicly Traded Partnerships, may result in the Fund
    being subject to state, local or foreign income, franchise or
    withholding tax liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a regulated investment company, the Fund generally will not
    be subject to United States federal income tax on income and
    gains that it distributes each taxable year to shareholders, if
    it distributes at least 90% of the sum of (i)&#160;the
    Fund&#146;s investment company taxable income (which includes,
    among other items, dividends, interest and the excess of any net
    short-term capital gains over net long-term capital losses and
    other taxable income, other than any net capital gain (as
    defined below), reduced by deductible expenses) determined
    without regard to the deduction for dividends and distributions
    paid and (ii)&#160;its net tax-exempt interest income (the
    excess of its gross tax-exempt interest income over certain
    disallowed deductions). The Fund intends to distribute at least
    annually substantially all of such income. The Fund will be
    subject to income tax at regular corporate rates on any taxable
    income or gains that it does not distribute to its shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amounts not distributed on a timely basis in accordance with a
    calendar year distribution requirement are subject to a
    nondeductible 4% excise tax at the Fund level. To avoid the tax,
    the Fund must distribute during each calendar year an amount at
    least equal to the sum of (i)&#160;98% of its ordinary income
    (not taking into account any capital gains or losses) for the
    calendar year, (ii)&#160;98% of its capital gains in excess of
    its capital losses (adjusted for certain ordinary losses) for a
    one-year period generally ending on October&#160;31 of the
    calendar year (unless an election is made to use the Fund&#146;s
    fiscal year), and (iii)&#160;certain undistributed amounts from
    previous years on which the Fund paid no United States federal
    income tax. While the Fund intends to distribute any income and
    capital gains in the manner necessary to minimize imposition of
    the 4% excise tax, there can be no assurance that sufficient
    amounts of the Fund&#146;s taxable income and capital gains will
    be distributed to avoid entirely the imposition of the tax. In
    that event, the Fund will be liable for the tax only on the
    amount by which it does not meet the foregoing distribution
    requirement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If for any taxable year the Fund does not qualify as a regulated
    investment company, all of its taxable income (including its net
    capital gain) will be subject to tax at regular corporate rates
    without any deduction for distributions to shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Distributions paid to you by the Fund from its investment
    company taxable income, which includes the excess of net
    short-term capital gains over net long-term capital losses
    (together referred to hereinafter as &#147;ordinary income
    dividends&#148;), are generally taxable to you as ordinary
    income to the extent of the Fund&#146;s earnings and profits.
    Such distributions (if designated by the Fund) may, however,
    qualify (provided holding periods and other requirements are
    met) (i)&#160;for the dividends received deduction in the case
    of corporate shareholders to the extent that the Fund&#146;s
    income consists of dividend income from U.S. corporations, and
    (ii)&#160;for taxable years through December&#160;31, 2010, as
    qualified dividend income eligible for the reduced maximum
    United States federal rate to individuals of generally 15% (5%
    for individuals in lower tax brackets) to the extent that the
    Fund receives qualified dividend income. Qualified dividend
    income is, in general, dividend income from taxable domestic
    corporations and certain foreign corporations (e.g., generally,
    foreign corporations incorporated in a possession of the United
    States or in certain countries with a qualified comprehensive
    tax treaty with the United States, or whose stock with respect
    to which such dividend is paid is readily tradable on an
    established securities market in the United States). There can
    be no assurance as to
</DIV>

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    <BR>
    36
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    what portion of the Fund&#146;s ordinary income dividends will
    constitute qualified dividend income. Distributions made to you
    from net capital gain, which is the excess of net long-term
    capital gains over net short-term capital losses (&#147;capital
    gain dividends&#148;), including capital gain dividends credited
    to you but retained by the Fund, are taxable to you as long-term
    capital gains if they have been properly designated by the Fund,
    regardless of the length of time you have owned common shares of
    the Fund. The maximum United States federal tax rate on net
    long-term capital gain of individuals is generally 15% (5% for
    individuals in lower brackets) for such gain realized in a
    taxable year beginning before January&#160;1, 2011.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, for any calendar year, the total distributions exceed both
    current earnings and profits and accumulated earnings and
    profits, the excess will generally be treated as a tax-free
    return of capital up to the amount of a shareholder&#146;s tax
    basis in the common shares. The amount treated as a tax-free
    return of capital will reduce a shareholder&#146;s tax basis in
    the common shares, thereby increasing such shareholder&#146;s
    potential gain or reducing his or her potential loss on the sale
    of the common shares. Any amounts distributed to a shareholder
    in excess of his or her basis in the common shares will be
    taxable to the shareholder as capital gain (assuming your common
    shares are held as a capital asset).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, not later than 60&#160;days after the close of its
    taxable year, the Fund will provide you with a written notice
    designating the amount of any qualified dividend income or
    capital gain dividends and other distributions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The sale or other disposition of common shares of the Fund will
    generally result in gain or loss to you, and will be long-term
    capital gain or loss if the common shares have been held for
    more than one year at the time of sale and are a capital asset
    in your hands. Any loss upon the sale or exchange of Fund common
    shares held for six months or less will be treated as long-term
    capital loss to the extent of any capital gain dividends
    received (including amounts credited as an undistributed capital
    gain dividend) by you. Any loss you realize on a sale or
    exchange of common shares of the Fund will be disallowed if you
    acquire other common shares of the Fund (whether through the
    automatic reinvestment of dividends or otherwise) within a
    <FONT style="white-space: nowrap">61-day</FONT>
    period beginning 30&#160;days before and ending 30&#160;days
    after your sale or exchange of the common shares. In such case,
    the basis of the common shares acquired will be adjusted to
    reflect the disallowed loss. Present law taxes both long-term
    and short-term capital gains of corporations at the rates
    applicable to ordinary income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends and other taxable distributions are taxable to you
    even though they are reinvested in additional common shares of
    the Fund. If the Fund pays you a dividend or makes a
    distribution in January that was declared in the previous
    October, November or December to shareholders of record on a
    specified date in one of such months, then such dividend or
    distribution will be treated for tax purposes as being paid by
    the Fund and received by you on December&#160;31 of the year in
    which the dividend or distribution was declared.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is required in certain circumstances to withhold, for
    federal backup withholding purposes, on taxable dividends or
    distributions and certain other payments paid to non-corporate
    shareholders who do not furnish the Fund with their correct
    taxpayer identification number (in the case of individuals,
    their social security number) and certain certifications, or who
    are otherwise subject to backup withholding. Backup withholding
    is not an additional tax. Any amounts withheld from payments
    made to you may be refunded or credited against your United
    States federal income tax liability, if any, provided that the
    required information is furnished to the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The foregoing is a general and abbreviated summary of the
    provisions of the Code and the Treasury regulations in effect as
    they directly govern the taxation of the Fund and its
    shareholders. These provisions are subject to change by
    legislative or administrative action, and any such change may be
    retroactive. A more complete discussion of the tax rules
    applicable to the Fund and its shareholders can be found in the
    SAI. Shareholders are urged to consult their tax advisers
    regarding specific questions as to United States federal,
    foreign, state, local income or other taxes.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CUSTODIAN,
    TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mellon Trust of New England, NA, located at 135 Santilli
    Highway, Everett, Massachusetts 02149, serves as the custodian
    of the Fund&#146;s assets pursuant to a custody agreement. Under
    the custody agreement, the Custodian holds the Fund&#146;s
    assets in compliance with the 1940 Act. For its services, the
    Custodian will receive a monthly fee based upon, among other
    things, the average value of the total assets of the Fund, plus
    certain charges for securities transactions and out of pocket
    expenses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    American Stock Transfer&#160;&#38; Trust Company, located at 59
    Maiden Lane, New York, New York 10038, serves as the Fund&#146;s
    dividend disbursing agent, as agent under the Fund&#146;s Plan
    and as transfer agent and registrar for the common shares of the
    Fund.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the terms and conditions stated in the purchase
    agreement
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007, each Underwriter named below, for which Merrill Lynch,
    Pierce, Fenner&#160;&#38; Smith Incorporated is acting as
    representative, has severally agreed to purchase, and the Fund
    has agreed to sell to such Underwriter, the number of common
    shares set forth opposite the name of such Underwriter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Underwriter</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Shares</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -52pt; margin-left: 52pt">
    <FONT style="font-size: 10pt">Merrill Lynch, Pierce,
    Fenner&#160;&#38; Smith<BR>
    Incorporated
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Citigroup Global Markets Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">A.G. Edwards&#160;&#38; Sons,
    Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Gabelli&#160;&#38; Company,
    Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">BB&#38;T Capital Markets, a
    division of Scott&#160;&#38; Stringfellow, Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Robert W. Baird&#160;&#38; Co.
    Incorporated
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Deutsche Bank Securities Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Ferris, Baker Watts, Incorporated
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">J.J.B. Hilliard, W.L. Lyons,
    Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Ladenburg Thalmann&#160;&#38; Co.
    Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Oppenheimer&#160;&#38; Co.
    Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Raymond James&#160;&#38;
    Associates, Inc.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Wells Fargo Securities, LLC
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: 42pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Total
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase agreement provides that the obligations of the
    Underwriters to purchase the common shares included in this
    offering are subject to the approval of certain legal matters by
    counsel and to certain other conditions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Underwriters are obligated to purchase all the common shares
    sold under the purchase agreement if any of the common shares
    are purchased. In the purchase agreement, the Fund and the
    Investment Adviser have agreed to indemnify the Underwriters
    against certain liabilities, including liabilities arising under
    the Securities Act of 1933 (the &#147;Securities Act&#148;) or
    to contribute payments the Underwriters may be required to make
    for any of those liabilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Commissions
    and Discounts</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Underwriters propose to initially offer some of the common
    shares directly to the public at the public offering price set
    forth on the cover page of this prospectus and some of the
    common shares to certain dealers at the public offering price
    less a concession not in excess of
    $&#160;&#160;&#160;&#160;&#160;&#160;per common share. The sales
    load the Fund will pay of $.90 per share is equal to 4.5% of the
    initial offering price. The Underwriters may allow, and the
    dealers may reallow, a discount not in excess of
    $&#160;&#160;&#160;&#160;&#160;&#160;per share on sales to other
    dealers. After the initial public offering, the public offering
    price, concession, and discount may be changed. Investors must
    pay for any common shares purchased through the initial public
    offering on or
    before&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows the public offering price, estimated
    offering expenses, sales load and proceeds, after expenses, to
    the Fund. The information assumes either no exercise or full
    exercise by the Underwriters of their overallotment option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="59%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Without Option</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>With Option</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Public offering price
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $20.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Sales load
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $.90
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Estimated offering expenses
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $.04
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Proceeds, after expenses, to the
    Fund
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $19.06
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The expenses of the offering are estimated at $&#160;&#160; and
    are payable by the Fund. The Fund has agreed to pay the
    Underwriters $.00667&#160;per common share as a partial
    reimbursement of expenses incurred in connection with the
    offering. The amount paid by the Fund as this partial
    reimbursement to the Underwriters will not exceed .03335% of the
    total price to the public of the common shares sold in this
    offering. The Investment Adviser has agreed to pay all of the
    Fund&#146;s organizational expenses and the amount by which the
    Fund&#146;s offering expenses (other than the sales load, but
    including the reimbursement of expenses described in the
    preceding sentence) exceed $.04&#160;per common share (the
    &#147;Reimbursement Cap&#148;).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overallotment
    Option</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has granted to the Underwriters an option to purchase
    up to&#160;&#160;&#160;&#160;&#160; additional common shares at
    the public offering price, less the sales load, within
    45&#160;days from the date of this prospectus solely to cover
    any overallotments. If the Underwriters exercise this option,
    each will be obligated, subject to conditions contained in the
    purchase agreement, to purchase a number of additional common
    shares proportionate to that Underwriter&#146;s initial amount
    reflected in the above table.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Price
    Stabilization, Short Positions and Penalty Bids</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until the distribution of the common shares is complete,
    Securities and Exchange Commission rules may limit Underwriters
    and selling group members from bidding for and purchasing the
    Fund&#146;s common shares. However, the representative may
    engage in transactions that stabilize the price of the common
    shares, such as bids or purchases to peg, or maintain, that
    price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Underwriters create a short position in the common shares
    in connection with the offering (<I>i.e.</I>,&#160;if they sell
    more common shares than are listed on the cover of this
    prospectus), the representative may reduce that short position
    by purchasing common shares in the open market. The
    representative may also elect to reduce any short position by
    exercising all or part of the overallotment option described
    above. The Underwriters also may impose a penalty bid, whereby
    selling concessions allowed to syndicate members or other
    broker-dealers in respect of the common shares sold in this
    offering for their account may be reclaimed by the syndicate if
    such common shares are repurchased by the syndicate in
    stabilizing or covering transactions. Purchases of common shares
    to stabilize the price or to reduce a short position may cause
    the price of the Fund&#146;s common shares to be higher than it
    might be in the absence of such purchases.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither the Fund nor any of the Underwriters makes any
    representation or prediction as to the direction or magnitude of
    any effect that the transactions described above may have on the
    price of the common shares. In addition, neither the Fund nor
    any of the Underwriters makes any representation that the
    representative Underwriters will engage in these transactions or
    that these transactions, once commenced, will not be
    discontinued without notice.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has agreed not to offer or sell any additional common
    shares for a period of 180&#160;days after the date of the
    purchase agreement without the prior written consent of the
    Underwriters, except for the sale of the common shares to the
    Underwriters pursuant to the purchase agreement and certain
    transactions relating to the Fund&#146;s Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund anticipates that the Underwriters may from time to time
    act as brokers or dealers in connection with the Fund&#146;s
    portfolio transactions. The Underwriters are active Underwriters
    of, and dealers in, securities and act as market makers in a
    number of such securities and, therefore, can be expected to
    engage in portfolio transactions with the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    One or more of the Underwriters of the common shares may also
    act as an underwriter of the Fund&#146;s preferred shares, if
    any, and as a broker-dealer in connection with auctions of the
    preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares will be sold in such a manner as to ensure
    that New York Stock Exchange distribution standards (that is,
    round lots, public shares and aggregate market value) will be
    met.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Relationships</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser (and not the Fund) has agreed to pay from
    its own assets additional compensation to Merrill Lynch, Pierce,
    Fenner,&#160;&#38; Smith Incorporated. The Investment Adviser
    will pay to Merrill Lynch an annual fee equal to 15% of the
    Investment Adviser&#146;s revenues from the Fund under its
    investment advisory agreement with the Fund. Merrill Lynch has
    agreed to provide, as requested by the Investment Adviser,
    certain after-market shareholder support services designed to
    maintain the visibility of the Fund on an ongoing basis and, as
    requested by the Investment Adviser, to provide relevant
    information, studies or reports regarding the Fund and the
    closed-end investment company industry and asset management
    industry. The total amount of additional compensation paid to
    Merrill Lynch will not exceed&#160;&#160;% of the price to the
    public of the common shares sold in the offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser (and not the Fund) has agreed to pay
    Citigroup Global Markets Inc., from its own assets, a
    structuring fee for advice relating to the structure, design and
    organization of the Fund as well as services related to the sale
    and distribution of the Fund&#146;s common shares in the amount
    of $&#160;&#160;&#160;&#160;&#160;. The structuring fee paid to
    Citigroup Global Markets Inc. will not
    exceed&#160;&#160;&#160;&#160;&#160;% of the total public
    offering price of the common shares sold in the offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The total amount of the Underwriter compensation payments
    described above plus the amount paid by the Fund as the
    $.00667&#160;per common share reimbursement to the Underwriters,
    will not exceed 4.5% of the total price to the public of the
    common shares offered hereby. The sum total of all compensation
    to the Underwriters in connection with this public offering of
    common shares, including sales load and all forms of additional
    compensation or structuring fee payments to the Underwriters,
    will be limited to not more than 9.0% of the total price to the
    public of the common shares sold in this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The principal business address of Merrill Lynch, Pierce,
    Fenner&#160;&#38; Smith Incorporated is 4 World Financial
    Center, New York, New York 10080.
</DIV>
<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain legal matters will be passed on by Skadden, Arps, Slate,
    Meagher&#160;&#38; Flom LLP, New York, New York, counsel to the
    Fund in connection with the offering of the common shares, and
    by Clifford Chance US LLP, New York, New York, counsel to the
    Underwriters. Clifford Chance US LLP may rely on the opinion of
    Skadden, Arps, Slate, Meagher&#160;&#38; Flom LLP as to matters
    of Delaware law.
</DIV>
<A name='117'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INDEPENDENT
    REGISTERED PUBLIC ACCOUNTING FIRM</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ernst&#160;&#38; Young LLP (&#147;E&#38;Y&#148;) serves as the
    independent registered public accounting firm of the Fund and
    will annually audit the financial statements of the Fund.
    E&#38;Y is located at 2001 Market Street Philadelphia,
    Pennsylvania 19103.
</DIV>
<A name='118'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ADDITIONAL
    INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is subject to the informational requirements of the
    Securities Exchange Act of 1934, as amended, and the 1940 Act
    and in accordance therewith files reports and other information
    with the Securities and Exchange Commission. Reports, proxy
    statements, and other information filed by the Fund with the
    Securities and Exchange Commission pursuant to the informational
    requirements of such Acts can be inspected and copied at the
    public reference facilities maintained by the Securities and
    Exchange Commission, 100&#160;F&#160;Street, N.E.,
    Washington,&#160;D.C. 20549. The Securities and Exchange
    Commission maintains a web site at http://www.sec.gov containing
    reports, proxy and information statements, and other information
    regarding registrants, including the Fund, that file
    electronically with the Securities and Exchange Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund expects the common shares to be listed on the NYSE,
    subject to notice of issuance, under the symbol &#147;GDL.&#148;
    Reports, proxy statements and other information concerning the
    Fund and filed with the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    41
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securities and Exchange Commission by the Fund will be available
    for inspection at the NYSE, 20&#160;Broad&#160;Street,
    New&#160;York, New&#160;York 10005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus constitutes part of a Registration Statement
    filed by the Fund with the Securities and Exchange Commission
    under the Securities Act and the 1940 Act. This prospectus omits
    certain of the information contained in the Registration
    Statement, and reference is hereby made to the Registration
    Statement and related exhibits for further information with
    respect to the Fund and the common shares offered hereby. Any
    statements contained herein concerning the provisions of any
    document are not necessarily complete, and, in each instance,
    reference is made to the copy of such document filed as an
    exhibit to the Registration Statement or otherwise filed with
    the Securities and Exchange Commission. Each such statement is
    qualified in its entirety by such reference. The complete
    Registration Statement may be obtained from the Securities and
    Exchange Commission upon payment of the fee prescribed by its
    rules and regulations or free of charge through the Securities
    and Exchange Commission&#146;s web site (http://www.sec.gov).
</DIV>
<A name='119'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PRIVACY
    PRINCIPLES OF THE FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is committed to maintaining the privacy of its
    shareholders and to safeguarding their non-public personal
    information. The following information is provided to help you
    understand what personal information the Fund collects, how the
    Fund protects that information and why, in certain cases, the
    Fund may share information with select other parties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund does not disclose any non-public personal information
    about its shareholders or former shareholders to anyone, except
    as permitted by law or as is necessary in order to service
    shareholder accounts (for example, to a transfer agent or third
    party administrator).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund restricts access to non-public personal information
    about its shareholders to employees of the Fund, the Investment
    Adviser, and its affiliates with a legitimate business need for
    the information. The Fund maintains physical, electronic, and
    procedural safeguards designed to protect the non-public
    personal information of its shareholders.
</DIV>
<A name='120'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    NOTE&#160;REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain statements in this prospectus constitute forward-looking
    statements, which involve known and unknown risks,
    uncertainties, and other factors that may cause the actual
    results, levels of activity, performance, or achievements of the
    Fund to be materially different from any future results, levels
    of activity, performance, or achievements expressed or implied
    by such forward-looking statements. Such factors include, among
    others, those listed under &#147;Risk Factors and Special
    Considerations&#148; and elsewhere in this prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    42
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS OF THE SAI</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">The Fund
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Investment Policies
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Investment Restrictions
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">10
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Management of the Fund
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Dividends and Distributions
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Portfolio Transactions
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Taxation
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Financial Statements
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">26
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">General Information
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">27
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Proxy Voting Procedures
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">28
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Code of Ethics
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">28
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Joint Code of Ethics For Chief
    Executive and Senior Financial Officers
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">29
    </FONT>
</TD>
<TD>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    43
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CORPORATE
    BOND RATINGS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MOODY&#146;S
    INVESTORS SERVICE, INC.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Aaa
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated Aaa are
    judged to be of the best quality. They carry the smallest degree
    of investment risk and are generally referred to as &#147;gilt
    edge.&#148; Interest payments are protected by a large or
    exceptionally stable margin and principal is secure. While the
    various protective elements are likely to change, such changes
    as can be visualized are most unlikely to impair the
    fundamentally strong position of such issues.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Aa
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated Aa are judged
    to be of high quality by all standards. Together with the Aaa
    group they comprise what are generally known as high grade
    bonds. They are rated lower than the best bonds because margins
    of protection may not be as large as in Aaa securities or
    fluctuation of protective elements may be of greater amplitude
    or there may be other elements present that make the long-term
    risk appear somewhat larger than in Aaa Securities.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">A
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated A possess
    many favorable investment attributes and are to be considered as
    upper-medium-grade obligations. Factors giving security to
    principal and interest are considered adequate, but elements may
    be present that suggest a susceptibility to impairment some time
    in the future.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Baa
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated Baa are
    considered as medium-grade obligations i.e., they are neither
    highly protected nor poorly secured. Interest payments and
    principal security appear adequate for the present, but certain
    protective elements may be lacking or may be characteristically
    unreliable over any great length of time. Such bonds lack
    outstanding investment characteristics and in fact have
    speculative characteristics as well.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Ba
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated Ba are judged
    to have speculative elements; their future cannot be considered
    as well assured. Often the protection of interest and principal
    payments may be very moderate and thereby not well safeguarded
    during both good and bad times over the future. Uncertainty of
    position characterizes bonds in this class.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">B
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated B generally
    lack characteristics of the desirable investment. Assurance of
    interest and principal payments or of maintenance of other terms
    of the contract over any long period of time may be small.
    Moody&#146;s applies numerical modifiers (1,&#160;2, and
    3)&#160;with respect to the bonds rated Aa through B. The
    modifier&#160;1 indicates that the company ranks in the higher
    end of its generic rating category; the modifier&#160;2
    indicates a mid-range ranking; and the modifier&#160;3 indicates
    that the company ranks in the lower end of its generic rating
    category.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Caa
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated Caa are of
    poor standing. These issues may be in default or there may be
    present elements of danger with respect to principal or interest.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Ca
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated Ca represent
    obligations that are speculative in a high degree. Such issues
    are often in default or have other marked shortcomings.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">C
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Bonds that are rated C are the
    lowest rated class of bonds and issues so rated can be regarded
    as having extremely poor prospects of ever attaining any real
    investment standing.
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">STANDARD&#160;&#38;
    POOR&#146;S RATINGS SERVICES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">AAA
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">This is the highest rating
    assigned by S&#38;P to a debt obligation and indicates an
    extremely strong capacity to pay interest and repay principal.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">AA
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Debt rated AA has a very strong
    capacity to pay interest and repay principal and differs from
    AAA issues only in small degree.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">A
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Principal and interest payments on
    bonds in this category are regarded as safe. Debt rated A has a
    strong capacity to pay interest and repay principal although
    they are somewhat more susceptible to the adverse effects of
    changes in circumstances and economic conditions than debt in
    higher rated categories.
    </FONT>
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    44
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">BBB
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">This is the lowest investment
    grade. Debt rated BBB has an adequate capacity to pay interest
    and repay principal. Whereas it normally exhibits adequate
    protection parameters, adverse economic conditions or changing
    circumstances are more likely to lead to a weakened capacity to
    pay interest and repay principal for debt in this category than
    in higher rated categories.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">CCC
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">An obligation rated
    &#145;CCC&#146; is currently vulnerable to nonpayment, and is
    dependent upon favorable business, financial, and economic
    conditions for the obligor to meet its financial commitment on
    the obligation. In the event of adverse business, financial, or
    economic conditions, the obligor is not likely to have the
    capacity to meet its financial commitment on the obligation.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">C
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">A subordinated debt or preferred
    stock obligation rated &#145;C&#146; is currently highly
    vulnerable to nonpayment. The &#145;C&#146; rating may be used
    to cover a situation where a bankruptcy petition has been filed
    or similar action taken, but payments on this obligation are
    being continued. A &#145;C&#146; also will be assigned to a
    preferred stock issue in arrears on dividends or sinking fund
    payments, but that is currently paying.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">D
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">An obligation rated &#145;D&#146;
    is in payment default. The &#145;D&#146; rating category is used
    when payments on an obligation are not made on the date due even
    if the applicable grace period has not expired, unless
    Standard&#160;&#38; Poor&#146;s believes that such payments will
    be made during such grace period. The &#145;D&#146; rating also
    will be used upon the filing of a bankruptcy petition or the
    taking of a similar action if payments on an obligation are
    jeopardized.
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Speculative
    Grade</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Debt rated BB, CCC, CC and C are regarded, on balance, as
    predominantly speculative with respect to capacity to pay
    interest and repay principal in accordance with the terms of the
    obligation. BB indicates the lowest degree of speculation, and C
    the highest degree of speculation. While such debt will likely
    have some quality and protective characteristics, these are
    outweighed by large uncertainties or major exposures to adverse
    conditions. Debt rated C&#160;1 is reserved for income bonds on
    which no interest is being paid and debt rated D is in payment
    default.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    S&#38;P includes an &#147;r&#148; symbol to its ratings of
    derivatives, hybrids, and certain other obligations that S&#38;P
    believes may experience high variability in expected returns due
    to noncredit risks created by the terms of the obligations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    AA to CCC may be modified by the addition of a plus or minus
    sign to show relative standing within the major categories.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;NR&#148; indicates that no public rating has been
    requested, that there is insufficient information on which to
    base a rating, or that S&#38;P does not rate a particular type
    of obligation as a matter of policy.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    45
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

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<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until&#160;&#160;&#160;&#160;&#160;, 2007, all dealers that
    effect transactions in these securities, whether or not
    participating in this offering, may be required to deliver a
    prospectus. This is in addition to the dealers&#146; obligation
    to deliver a prospectus when acting as underwriters and with
    respect to their unsold allotments or subscriptions.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 16pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Shares</FONT></B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="y28144a3y2814402.gif" alt="(GABELLI LOGO)" ><B><FONT style="font-size: 16pt">
    </FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">The Gabelli Global Deal
    Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Common Shares of Beneficial
    Interest</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">$20.00&#160;per Share</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 19%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=90 -->

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTUS</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 19%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=90 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 16pt">Merrill
    Lynch&#160;&#38; Co.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 16pt">Citigroup<BR>
    A.G. Edwards<BR>
    Gabelli&#160;&#38; Company, Inc.<BR>
    BB&#38;T Capital Markets<BR>
    Robert W. Baird&#160;&#38; Co.<BR>
    Deutsche Bank Securities<BR>
    Ferris, Baker Watts</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">Incorporated</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 16pt">J.J.B. Hilliard, W.L. Lyons,
    Inc.<BR>
    Ladenburg Thalmann&#160;&#38; Co. Inc.<BR>
    Oppenheimer&#160;&#38; Co.<BR>
    Raymond James<BR>
    Wells Fargo Securities</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>&#160;&#160;&#160;&#160;&#160;, 2007</B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">STATEMENT
    OF ADDITIONAL INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS
    NOT COMPLETE AND MAY BE CHANGED. THE FUND&#160;MAY NOT SELL
    THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
    SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS STATEMENT
    OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE
    SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
    SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Gabelli Global Deal Fund, or the &#147;Fund,&#148; is a
    newly organized, non-diversified, closed-end management
    investment company registered under the Investment Company Act
    of 1940 (the &#147;1940 Act&#148;). The Fund&#146;s investment
    objective is to achieve absolute returns in various market
    conditions without excessive risk of capital. Absolute returns
    are defined as positive total returns, regardless of the
    direction of securities markets. The Fund will seek to achieve
    its objective by investing primarily in merger arbitrage
    transactions and, to a lesser extent, in corporate
    reorganizations involving stubs, spin-offs and liquidations.
    Gabelli Funds, LLC serves as &#147;Investment Adviser&#148; to
    the Fund. An investment in the Fund is not appropriate for all
    investors. We cannot assure you that the Fund will achieve its
    objective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Statement of Additional Information (the &#147;SAI&#148;)
    does not constitute a prospectus, but should be read in
    conjunction with the Fund&#146;s prospectus
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007, and as it may be supplemented (the
    &#147;Prospectus&#148;). This SAI does not include all
    information that a prospective investor should consider before
    investing in the Fund&#146;s common shares, and investors should
    obtain and read this prospectus prior to purchasing such shares.
    This SAI incorporates by reference the entire Prospectus. You
    may request a free copy of this prospectus by calling
    (800)&#160;GABELLI
    <FONT style="white-space: nowrap">(422-3554)</FONT>
    or by writing to the Fund. A copy of the Fund&#146;s
    Registration Statement, including this prospectus, may be
    obtained from the Securities and Exchange Commission upon
    payment of the fee prescribed, or inspected at the Securities
    and Exchange Commission&#146;s office or via its web site
    (http://www.sec.gov) at no charge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Statement of Additional Information is
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#201'><FONT style="font-size: 10pt">The Fund</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#202'><FONT style="font-size: 10pt">Investment
    Policies</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#203'><FONT style="font-size: 10pt">Investment
    Restrictions</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">10
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#204'><FONT style="font-size: 10pt">Management of the
    Fund</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#205'><FONT style="font-size: 10pt">Dividends and
    Distributions</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#206'><FONT style="font-size: 10pt">Portfolio
    Transactions</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#207'><FONT style="font-size: 10pt">Taxation</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#212'><FONT style="font-size: 10pt">Financial
    Statements</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">26
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#208'><FONT style="font-size: 10pt">General
    Information</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">27
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#209'><FONT style="font-size: 10pt">Proxy Voting
    Procedures</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">28
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#210'><FONT style="font-size: 10pt">Code of
    Ethics</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">28
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#211'><FONT style="font-size: 10pt">Joint Code of
    Ethics For Chief Executive and Senior Financial
    Officers</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">29
    </FONT>
</TD>
<TD>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='201'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Gabelli Global Deal Fund is a newly organized,
    non-diversified, closed-end, management investment company
    organized under the laws of the State of Delaware. The
    Fund&#146;s common shares of beneficial interest, par value
    $0.001 per share, are expected to be listed on the New York
    Stock Exchange (&#147;NYSE&#148;) under the symbol
    &#147;GDL,&#148; subject to notice of issuance.
</DIV>
<A name='202'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    POLICIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Information on Investment Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Derivative
    Instruments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options.</I>&#160;&#160;The Fund may, from time to time,
    subject to guidelines of the Board of Trustees (the
    &#147;Board&#148;) and the limitations set forth in the
    Prospectus and this SAI, purchase or sell, i.e., write, options
    on securities, securities indices and foreign currencies which
    are listed on a national securities exchange or in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    (&#147;OTC&#148;) market, as a means of achieving additional
    return or of hedging the value of the Fund&#146;s portfolio.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A call option is a contract that gives the holder of the option
    the right to buy from the writer of the call option, the
    security or currency underlying the option at a specified
    exercise price at any time during the term of the option. The
    writer of the call option has the obligation, upon exercise of
    the option, to deliver the underlying security or currency upon
    payment of the exercise price during the option period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A put option is a contract that gives the holder of the option
    the right, in return for a premium, to sell to the seller the
    underlying security at a specified price. The seller of the put
    option has the obligation to buy the underlying security upon
    exercise at the exercise price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A call option is &#147;covered&#148; if the Fund owns the
    underlying instrument covered by the call or has an absolute and
    immediate right to acquire that instrument without additional
    cash consideration (or for additional cash consideration held in
    a segregated account by its custodian) upon conversion or
    exchange of other instruments held in its portfolio. A call
    option is also covered if the Fund holds a call option on the
    same instrument as the call option written where the exercise
    price of the call option held is (i)&#160;equal to or less than
    the exercise price of the call option written or
    (ii)&#160;greater than the exercise price of the call option
    written if the difference is maintained by the Fund in cash,
    U.S.&#160;government securities or other high-grade short-term
    obligations in a segregated account with its custodian. A put
    option is &#147;covered&#148; if the Fund maintains cash or
    other liquid securities with a value equal to the exercise price
    in a segregated account with its custodian, or else holds a put
    option on the same instrument as the put option written where
    the exercise price of the put option held is equal to or greater
    than the exercise price of the put option written.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund has written an option, it may terminate its
    obligation by effecting a closing purchase transaction. This is
    accomplished by purchasing an option of the same series as the
    option previously written. However, once the Fund has been
    assigned an exercise notice, the Fund will be unable to effect a
    closing purchase transaction. Similarly, if the Fund is the
    holder of an option it may liquidate its position by effecting a
    closing sale transaction. This is accomplished by selling an
    option of the same series as the option previously purchased.
    There can be no assurance that either a closing purchase or sale
    transaction can be effected when the Fund so desires.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will realize a profit from a closing transaction if the
    price of the transaction is less than the premium received from
    writing the option or is more than the premium paid to purchase
    the option; the Fund will realize a loss from a closing
    transaction if the price of the transaction is more than the
    premium received from writing the option or is less than the
    premium paid to purchase the option. Since call option prices
    generally reflect increases in the price of the underlying
    security, any loss resulting from the repurchase of a call
    option may also be wholly or partially offset by unrealized
    appreciation of the underlying security. Other principal factors
    affecting the market value of a put or a call option include
    supply and demand, interest rates, the current market price and
    price volatility of the underlying security, and the time
    remaining until the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    expiration date. Gains and losses on investments in options
    depend, in part, on the ability of the Investment Adviser to
    predict correctly the effect of these factors. The use of
    options cannot serve as a complete hedge since the price
    movement of securities underlying the options will not
    necessarily follow the price movements of the portfolio
    securities subject to the hedge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An option position may be closed out only on an exchange which
    provides a secondary market for an option of the same series or
    in a private transaction. Although the Fund will generally
    purchase or write only those options for which there appears to
    be an active secondary market, there is no assurance that a
    liquid secondary market on an exchange will exist for any
    particular option. In such event, it might not be possible to
    effect closing transactions in particular options, so that the
    Fund would have to exercise its options in order to realize any
    profit and would incur brokerage commissions upon the exercise
    of call options and upon the subsequent disposition of
    underlying securities for the exercise of put options. If the
    Fund, as a covered call option writer, is unable to effect a
    closing purchase transaction in a secondary market, it will not
    be able to sell the underlying security until the option expires
    or it delivers the underlying security upon exercise or
    otherwise covers the position.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that the Fund purchases options pursuant to a
    hedging strategy, the Fund will be subject to the following
    additional risks. If a put or call option purchased by the Fund
    is not sold when it has remaining value, and if the market price
    of the underlying security remains equal to or greater than the
    exercise price (in the case of a put), or remains less than or
    equal to the exercise price (in the case of a call), the Fund
    will lose its entire investment in the option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Where a put or call option on a particular security is purchased
    to hedge against price movements in that or a related security,
    the price of the put or call option may move more or less than
    the price of the security. If restrictions on exercise are
    imposed, the Fund may be unable to exercise an option it has
    purchased. If the Fund is unable to close out an option that it
    has purchased on a security, it will have to exercise the option
    in order to realize any profit or the option may expire
    worthless.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options on Securities Indices.</I>&#160;&#160;The Fund may
    purchase and sell securities index options. One effect of such
    transactions may be to hedge all or part of the Fund&#146;s
    securities holdings against a general decline in the securities
    market or a segment of the securities market. Options on
    securities indices are similar to options on stocks except that,
    rather than the right to take or make delivery of stock at a
    specified price, an option on a securities index gives the
    holder the right to receive, upon exercise of the option, an
    amount of cash if the closing level of the securities index upon
    which the option is based is greater than, in the case of a call
    option, or less than, in the case of a put option, the exercise
    price of the option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s successful use of options on indices depends
    upon its ability to predict the direction of the market and is
    subject to various additional risks. The correlation between
    movements in the index and the price of the securities being
    hedged against is imperfect and the risk from imperfect
    correlation increases as the composition of the Fund diverges
    from the composition of the relevant index. Accordingly, a
    decrease in the value of the securities being hedged against may
    not be wholly offset by a gain on the exercise or sale of a
    securities index put option held by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options on Foreign Currencies.</I>&#160;&#160;Instead of
    purchasing or selling currency futures (as described below), the
    Fund may attempt to accomplish similar objectives by purchasing
    put or call options on currencies or by writing put options or
    call options on currencies either on exchanges or in OTC
    markets. A put option gives the Fund the right to sell a
    currency at the exercise price until the option expires. A call
    option gives the Fund the right to purchase a currency at the
    exercise price until the option expires. Both types of options
    serve to insure against adverse currency price movements in the
    underlying portfolio assets designated in a given currency. The
    Fund&#146;s use of options on currencies will be subject to the
    same limitations as its use of options on securities, described
    above and in the Prospectus. Currency options may be subject to
    position limits which may limit the ability of the Fund to fully
    hedge its positions by purchasing the options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As in the case of interest rate futures contracts and options
    thereon, described below, the Fund may hedge against the risk of
    a decrease or increase in the U.S.&#160;dollar value of a
    foreign currency denominated debt security which the Fund owns
    or intends to acquire by purchasing or selling options
    contracts, futures
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    contracts or options thereon with respect to a foreign currency
    other than the foreign currency in which such debt security is
    denominated, where the values of such different currencies
    (vis-&#224;-vis the U.S.&#160;dollar) historically have a high
    degree of positive correlation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Futures Contracts and Options on Futures.</I>&#160;&#160;The
    Fund may purchase and sell financial futures contracts and
    options thereon which are traded on a commodities exchange or
    board of trade for certain hedging and risk management purposes.
    A financial futures contract is an agreement to purchase or sell
    an agreed amount of securities or currencies at a set price for
    delivery in the future. These futures contracts and related
    options may be on debt securities, financial indices, securities
    indices, U.S.&#160;government securities and foreign currencies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A &#147;sale&#148; of a futures contract (or a &#147;short&#148;
    futures position) means the assumption of a contractual
    obligation to deliver the securities underlying the contract at
    a specified price at a specified future time. A
    &#147;purchase&#148; of a futures contract (or a
    &#147;long&#148; futures position) means the assumption of a
    contractual obligation to acquire the securities underlying the
    contract at a specified price at a specified future time.
    Certain futures contracts, including stock and bond index
    futures, are settled on a net cash payment basis rather than by
    the sale and delivery of the securities underlying the futures
    contracts.
</DIV>

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    No consideration will be paid or received by the Fund upon the
    purchase or sale of a futures contract. Initially, the Fund will
    be required to deposit with the broker an amount of cash or cash
    equivalents equal to approximately 1% to 10% of the contract
    amount (this amount is subject to change by the exchange or
    board of trade on which the contract is traded and brokers or
    members of such board of trade may charge a higher amount). This
    amount is known as the &#147;initial margin&#148; and is in the
    nature of a performance bond or good faith deposit on the
    contract. Subsequent payments, known as &#147;variation
    margin,&#148; to and from the broker will be made daily as the
    price of the index or security underlying the futures contract
    fluctuates. At any time prior to the expiration of the futures
    contract, the Fund may elect to close the position by taking an
    opposite position, which will operate to terminate its existing
    position in the contract.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An option on a futures contract gives the purchaser the right,
    in return for the premium paid, to assume a position in a
    futures contract at a specified exercise price at any time prior
    to the expiration of the option. Upon exercise of an option, the
    delivery of the futures position by the writer of the option to
    the holder of the option will be accompanied by delivery of the
    accumulated balance in the writer&#146;s futures margin account
    attributable to that contract, which represents the amount by
    which the market price of the futures contract exceeds, in the
    case of a call option, or is less than, in the case of a put
    option, the exercise price of the option on the futures
    contract. The potential loss related to the purchase of an
    option on a futures contract is limited to the premium paid for
    the option (plus transaction costs). Because the value of the
    option purchased is fixed at the point of sale, there are no
    daily cash payments by the purchaser to reflect changes in the
    value of the underlying contract; however, the value of the
    option does change daily and that change would be reflected in
    the net assets of the Fund.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Futures and options on futures entail certain risks, including
    but not limited to the following: no assurance that futures
    contracts or options on futures can be offset at favorable
    prices, possible reduction of the yield of the Fund due to the
    use of hedging, possible reduction in value of both the
    securities hedged and the hedging instrument, possible lack of
    liquidity due to daily limits on price fluctuations, imperfect
    correlation between the contracts and the securities being
    hedged, losses from investing in futures transactions that are
    potentially unlimited and the segregation requirements described
    below.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event the Fund sells a put option or enters into long
    futures contracts, under current interpretations of the 1940
    Act, an amount of cash, U.S.&#160;government securities or other
    liquid securities equal to the market value of the contract must
    be deposited and maintained in a segregated account with the
    Fund&#146;s custodian (the &#147;Custodian&#148;) to
    collateralize the positions, in order for the Fund to avoid
    being treated as having issued a senior security in the amount
    of its obligations. For short positions in futures contracts and
    sales of call options, the Fund may establish a segregated
    account (not with a futures commission merchant or broker) with
    cash, U.S.&#160;government securities or other high grade debt
    securities that, when added to amounts deposited with a futures
    commission merchant or a broker as margin, equal the market
    value of the
</DIV>

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    5
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    instruments or currency underlying the futures contracts or call
    options, respectively (but are no less than the stock price of
    the call option or the market price at which the short positions
    were established).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Futures Contracts and Options
    Thereon.</I>&#160;&#160;The Fund may purchase or sell interest
    rate futures contracts to take advantage of or to protect the
    Fund against fluctuations in interest rates affecting the value
    of debt securities which the Fund holds or intends to acquire.
    For example, if interest rates are expected to increase, the
    Fund might sell futures contracts on debt securities, the values
    of which historically have a high degree of positive correlation
    to the values of the Fund&#146;s portfolio securities. Such a
    sale would have an effect similar to selling an equivalent value
    of the Fund&#146;s portfolio securities. If interest rates
    increase, the value of the Fund&#146;s portfolio securities will
    decline, but the value of the futures contracts to the Fund will
    increase at approximately an equivalent rate thereby keeping the
    net asset value of the Fund from declining as much as it
    otherwise would have. The Fund could accomplish similar results
    by selling debt securities with longer maturities and investing
    in debt securities with shorter maturities when interest rates
    are expected to increase. However, since the futures market may
    be more liquid than the cash market, the use of futures
    contracts as a risk management technique allows the Fund to
    maintain a defensive position without having to sell its
    portfolio securities.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Similarly, the Fund may purchase interest rate futures contracts
    when it is expected that interest rates may decline. The
    purchase of futures contracts for this purpose constitutes a
    hedge against increases in the price of debt securities (caused
    by declining interest rates) which the Fund intends to acquire.
    Since fluctuations in the value of appropriately selected
    futures contracts should approximate that of the debt securities
    that will be purchased, the Fund can take advantage of the
    anticipated rise in the cost of the debt securities without
    actually buying them. Subsequently, the Fund can make its
    intended purchase of the debt securities in the cash market and
    currently liquidate its futures position. To the extent the Fund
    enters into futures contracts for this purpose, it will maintain
    in a segregated asset account with the Fund&#146;s Custodian,
    assets sufficient to cover the Fund&#146;s obligations with
    respect to such futures contracts, which will consist of cash or
    other liquid securities from its portfolio in an amount equal to
    the difference between the fluctuating market value of such
    futures contracts and the aggregate value of the initial margin
    deposited by the Fund with its Custodian with respect to such
    futures contracts.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase of a call option on a futures contract is similar
    in some respects to the purchase of a call option on an
    individual security. Depending on the pricing of the option
    compared to either the price of the futures contract upon which
    it is based or the price of the underlying debt securities, it
    may or may not be less risky than ownership of the futures
    contract or underlying debt securities. As with the purchase of
    futures contracts, when the Fund is not fully invested it may
    purchase a call option on a futures contract to hedge against a
    market advance due to declining interest rates.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase of a put option on a futures contract is similar to
    the purchase of protective put options on portfolio securities.
    The Fund will purchase a put option on a futures contract to
    hedge the Fund&#146;s portfolio against the risk of rising
    interest rates and a consequent reduction in the value of
    portfolio securities.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The writing of a call option on a futures contract constitutes a
    partial hedge against declining prices of the securities which
    are deliverable upon exercise of the futures contract. If the
    futures price at expiration of the option is below the exercise
    price, the Fund will retain the full amount of the option
    premium which provides a partial hedge against any decline that
    may have occurred in the Fund&#146;s portfolio holdings. The
    writing of a put option on a futures contract constitutes a
    partial hedge against increasing prices of the securities that
    are deliverable upon exercise of the futures contract. If the
    futures price at expiration of the option is higher than the
    exercise price, the Fund will retain the full amount of the
    option premium, which provides a partial hedge against any
    increase in the price of debt securities that the Fund intends
    to purchase. If a put or call option the Fund has written is
    exercised, the Fund will incur a loss which will be reduced by
    the amount of the premium it received. Depending on the degree
    of correlation between changes in the value of its portfolio
    securities and changes in the value of its futures positions,
    the Fund&#146;s losses from options on futures it has written
    may to some extent be reduced or increased by changes in the
    value of its portfolio securities.
</DIV>

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    <BR>
    6
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Currency Futures and Options
    Thereon.</I>&#160;&#160;Generally, foreign currency futures
    contracts and options thereon are similar to the interest rate
    futures contracts and options thereon discussed previously. By
    entering into currency futures and options thereon, the Fund
    will seek to establish the rate at which it will be entitled to
    exchange U.S.&#160;dollars for another currency at a future
    time. By selling currency futures, the Fund will seek to
    establish the number of dollars it will receive at delivery for
    a certain amount of a foreign currency. In this way, whenever
    the Fund anticipates a decline in the value of a foreign
    currency against the U.S.&#160;dollar, the Fund can attempt to
    &#147;lock in&#148; the U.S.&#160;dollar value of some or all of
    the securities held in its portfolio that are denominated in
    that currency. By purchasing currency futures, the Fund can
    establish the number of dollars it will be required to pay for a
    specified amount of a foreign currency in a future month. Thus,
    if the Fund intends to buy securities in the future and expects
    the U.S.&#160;dollar to decline against the relevant foreign
    currency during the period before the purchase is effected, the
    Fund can attempt to &#147;lock in&#148; the price in
    U.S.&#160;dollars of the securities it intends to acquire.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purchase of options on currency futures will allow the Fund,
    for the price of the premium and related transaction costs it
    must pay for the option, to decide whether or not to buy (in the
    case of a call option) or to sell (in the case of a put option)
    a futures contract at a specified price at any time during the
    period before the option expires. If the Investment Adviser, in
    purchasing an option, has been correct in its judgment
    concerning the direction in which the price of a foreign
    currency would move against the U.S.&#160;dollar, the Fund may
    exercise the option and thereby take a futures position to hedge
    against the risk it had correctly anticipated or close out the
    option position at a gain that will offset, to some extent,
    currency exchange losses otherwise suffered by the Fund. If
    exchange rates move in a way the Fund did not anticipate,
    however, the Fund will have incurred the expense of the option
    without obtaining the expected benefit; any such movement in
    exchange rates may also thereby reduce rather than enhance the
    Fund&#146;s profits on its underlying securities transactions.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Securities Index Futures Contracts and Options
    Thereon.</I>&#160;&#160;Purchases or sales of securities index
    futures contracts are used for hedging purposes to attempt to
    protect the Fund&#146;s current or intended investments from
    broad fluctuations in stock or bond prices. For example, the
    Fund may sell securities index futures contracts in anticipation
    of or during a market decline to attempt to offset the decrease
    in market value of the Fund&#146;s securities portfolio that
    might otherwise result. If such decline occurs, the loss in
    value of portfolio securities may be offset, in whole or part,
    by gains on the futures position. When the Fund is not fully
    invested in the securities market and anticipates a significant
    market advance, it may purchase securities index futures
    contracts in order to gain rapid market exposure that may, in
    part or entirely, offset increases in the cost of securities
    that the Fund intends to purchase. As such purchases are made,
    the corresponding positions in securities index futures
    contracts will be closed out. The Fund may write put and call
    options on securities index futures contracts for hedging
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Forward Currency Exchange Contracts.</I>&#160;&#160;The Fund
    may enter into forward foreign currency exchange contracts to
    protect the value of its portfolio against uncertainty in the
    level of future currency exchange rates between a particular
    foreign currency and the U.S.&#160;dollar or between foreign
    currencies in which its securities are or may be denominated.
    The Fund may enter into such contracts on a spot, (i.e., cash,)
    basis at the rate then prevailing in the currency exchange
    market or on a forward basis, by entering into a forward
    contract to purchase or sell currency. A forward contract on
    foreign currency is an obligation to purchase or sell a specific
    currency at a future date, which may be any fixed number of days
    agreed upon by the parties from the date of the contract at a
    price set on the date of the contract. Forward currency
    contracts (i)&#160;are traded in a market conducted directly
    between currency traders (typically, commercial banks or other
    financial institutions) and their customers, (ii)&#160;generally
    have no deposit requirements and (iii)&#160;are typically
    consummated without payment of any commissions. The Fund,
    however, may enter into forward currency contracts requiring
    deposits or involving the payment of commissions. To assure that
    its forward currency contracts are not used to achieve
    investment leverage, the Fund will segregate liquid assets
    consisting of cash, U.S.&#160;government securities or other
    liquid securities with its Custodian, or a designated
    subcustodian, in an amount at all times equal to or exceeding
    its commitment with respect to the contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is anticipated that the dealings of the Fund in forward
    foreign currency exchange will be limited to hedging, involving
    either specific transactions or portfolio positions and other
    risk management purposes.
</DIV>

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    <BR>
    7
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transaction hedging is the purchase or sale of one forward
    foreign currency for another currency with respect to specific
    receivables or payables of the Fund accruing in connection with
    the purchase and sale of its portfolio securities or its payment
    of dividends and distributions. Position hedging is the purchase
    or sale of one forward foreign currency for another currency
    with respect to portfolio security positions denominated or
    quoted in the foreign currency to offset the effect of an
    anticipated substantial appreciation or depreciation,
    respectively, in the value of the currency relative to the
    U.S.&#160;dollar. In this situation, the Fund also may, for
    example, enter into a forward contract to sell or purchase a
    different foreign currency for a fixed U.S.&#160;dollar amount
    where it is believed that the U.S.&#160;dollar value of the
    currency to be sold or bought pursuant to the forward contract
    will fall or rise, as the case may be, whenever there is a
    decline or increase, respectively, in the U.S.&#160;dollar value
    of the currency in which its portfolio securities are
    denominated (this practice being referred to as a
    &#147;cross-hedge&#148;).
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In hedging a specific transaction, the Fund may enter into a
    forward contract with respect to either the currency in which
    the transaction is denominated or another currency deemed
    appropriate by the Investment Adviser. The amount the Fund may
    invest in forward currency contracts is limited to the amount of
    its aggregate investments in foreign currencies. The use of
    forward currency contracts may involve certain risks, including
    the failure of the counterparty to perform its obligations under
    the contract, and such use may not serve as a complete hedge
    because of an imperfect correlation between movements in the
    prices of the contracts and the prices of the currencies hedged
    or used for cover. The Fund will only enter into forward
    currency contracts with parties which the Investment Adviser
    believes to be creditworthy institutions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Special Risk Considerations Relating to Futures and Options
    Thereon.</I>&#160;&#160;The Fund&#146;s ability to establish and
    close out positions in futures contracts and options thereon
    will be subject to the development and maintenance of liquid
    markets. Although the Fund generally will purchase or sell only
    those futures contracts and options thereon for which there
    appears to be a liquid market, there is no assurance that a
    liquid market on an exchange will exist for any particular
    futures contract or option thereon at any particular time. In
    the event no liquid market exists for a particular futures
    contract or option thereon in which the Fund maintains a
    position, it will not be possible to effect a closing
    transaction in that contract or to do so at a satisfactory price
    and the Fund would have to either make or take delivery under
    the futures contract or, in the case of a written option, wait
    to sell the underlying securities until the option expires or is
    exercised or, in the case of a purchased option, exercise the
    option. In the case of a futures contract or an option thereon
    which the Fund has written and which the Fund is unable to
    close, the Fund would be required to maintain margin deposits on
    the futures contract or option thereon and to make variation
    margin payments until the contract is closed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Successful use of futures contracts and options thereon and
    forward contracts by the Fund is subject to the ability of the
    Investment Adviser to predict correctly movements in the
    direction of interest and foreign currency rates. If the
    Investment Adviser&#146;s expectations are not met, the Fund
    will be in a worse position than if a hedging strategy had not
    been pursued. For example, if the Fund has hedged against the
    possibility of an increase in interest rates that would
    adversely affect the price of securities in its portfolio and
    the price of such securities increases instead, the Fund will
    lose part or all of the benefit of the increased value of its
    securities because it will have offsetting losses in its futures
    positions. In addition, in such situations, if the Fund has
    insufficient cash to meet daily variation margin requirements,
    it may have to sell securities to meet the requirements. These
    sales may be, but will not necessarily be, at increased prices
    which reflect the rising market. The Fund may have to sell
    securities at a time when it is disadvantageous to do so.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Additional Risks of Foreign Options, Futures Contracts,
    Options on Futures Contracts and Forward
    Contracts.</I>&#160;&#160;Options, futures contracts and options
    thereon and forward contracts on securities and currencies may
    be traded on foreign exchanges. Such transactions may not be
    regulated as effectively as similar transactions in the United
    States, may not involve a clearing mechanism and related
    guarantees, and are subject to the risk of governmental actions
    affecting trading in, or the prices of, securities of foreign
    issuers (&#147;Foreign Securities&#148;). The value of such
    positions also could be adversely affected by (i)&#160;other
    complex foreign political, legal and economic factors,
    (ii)&#160;lesser availability than in the United States of data
    on which to make trading decisions, (iii)&#160;delays in the
    Fund&#146;s ability to act upon economic events occurring in the
    foreign markets during non-business hours in the United States,
    (iv)&#160;the imposition of different exercise and
</DIV>

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    <BR>
    8
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    settlement terms and procedures and margin requirements than in
    the United States and (v)&#160;less trading volume.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Exchanges on which options, futures and options on futures are
    traded may impose limits on the positions that the Fund may take
    in certain circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Warrants and Rights.</I>&#160;&#160;The Fund may invest
    without limit in warrants or rights (including those acquired in
    units or attached to other securities) that entitle the holder
    to buy equity securities at a specific price for a specific
    period of time but will do so only if such equity securities are
    deemed appropriate by the Investment Adviser for inclusion in
    the Fund&#146;s portfolio.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The Fund and the Investment Adviser Are Not Registered as
    Commodity Pool Operators.</I>&#160;&#160;The Fund and the
    Investment Adviser have claimed an exclusion from the definition
    of the term &#147;commodity pool operator&#148; under the
    Commodity Exchange Act relating to registered investment
    companies. Accordingly, the Fund and its investments in
    derivative instruments described in the Prospectus and this SAI
    are not limited by or subject to regulation under the Commodity
    Exchange Act or otherwise regulated by the Commodity Futures
    Trading Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Risks of Currency Transactions.</I>&#160;&#160;Currency
    transactions are also subject to risks different from those of
    other portfolio transactions. Because currency control is of
    great importance to the issuing governments and influences
    economic planning and policy, purchases and sales of currency
    and related instruments can be adversely affected by government
    exchange controls, limitations or restrictions on repatriation
    of currency, and manipulation, or exchange restrictions imposed
    by governments. These forms of governmental action can result in
    losses to the Fund if it is unable to deliver or receive
    currency or monies in settlement of obligations and could also
    cause hedges it has entered into to be rendered useless,
    resulting in full currency exposure as well as incurring
    transaction costs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Loans of Portfolio Securities.</I>&#160;&#160;Consistent with
    applicable regulatory requirements and the Fund&#146;s
    investment restrictions, the Fund may lend its portfolio
    securities to securities broker-dealers or financial
    institutions, provided that such loans are callable at any time
    by the Fund (subject to notice provisions described below), and
    are at all times secured by cash, cash equivalents or other
    liquid securities which are maintained in a segregated account
    pursuant to applicable regulations and that are at least equal
    to the market value, determined daily, of the loaned securities.
    The advantage of such loans is that the Fund continues to
    receive the income on the loaned securities while at the same
    time earns interest on the cash amounts deposited as collateral,
    which will be invested in short-term obligations. The Fund will
    not lend its portfolio securities if such loans are not
    permitted by the laws or regulations of any state in which its
    shares are qualified for sale. The Fund&#146;s loans of
    portfolio securities will be collateralized in accordance with
    applicable regulatory requirements and no loan will cause the
    value of all loaned securities to exceed
    [&#160;&#160;&#160;&#160;&#160;]% of the value of the
    Fund&#146;s total assets. The Fund&#146;s ability to lend
    portfolio securities may be limited by rating agency guidelines.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A loan may generally be terminated by the borrower on one
    business day notice, or by the Fund on five business days
    notice. If the borrower fails to deliver the loaned securities
    within five days after receipt of notice, the Fund could use the
    collateral to replace the securities while holding the borrower
    liable for any excess of replacement cost over collateral. As
    with any extensions of credit, there are risks of delay in
    recovery and in some cases even loss of rights in the collateral
    should the borrower of the securities fail financially. However,
    these loans of portfolio securities will only be made to firms
    deemed by the Investment Adviser to be creditworthy and when the
    income which can be earned from such loans justifies the
    attendant risks. The Board will oversee the creditworthiness of
    the contracting parties on an ongoing basis. Upon termination of
    the loan, the borrower is required to return the securities to
    the Fund. Any gain or loss in the market price during the loan
    period would inure to the Fund. The risks associated with loans
    of portfolio securities are substantially similar to those
    associated with repurchase agreements. Thus, if the counterparty
    to the loan petitions for bankruptcy or becomes subject to the
    United States Bankruptcy Code, the law regarding the rights of
    the Fund is unsettled. As a result, under extreme circumstances,
    there may be a restriction on the Fund&#146;s ability to sell
    the collateral and the Fund would suffer a loss. When voting or
    consent rights which accompany loaned securities pass to the
    borrower, the Fund will follow the policy of calling the loaned
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    securities, to be delivered within one day after notice, to
    permit the exercise of such rights if the matters involved would
    have a material effect on the Fund&#146;s investment in such
    loaned securities. The Fund will pay reasonable finder&#146;s,
    administrative and custodial fees in connection with a loan of
    its securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>When Issued, Delayed Delivery Securities and Forward
    Commitments.</I>&#160;&#160;The Fund may enter into forward
    commitments for the purchase or sale of securities, including on
    a &#147;when issued&#148; or &#147;delayed delivery&#148; basis,
    in excess of customary settlement periods for the type of
    security involved. In some cases, a forward commitment may be
    conditioned upon the occurrence of a subsequent event, such as
    approval and consummation of a merger, corporate reorganization
    or debt restructuring (i.e., a when, as and if issued security).
    When such transactions are negotiated, the price is fixed at the
    time of the commitment, with payment and delivery taking place
    in the future, generally a month or more after the date of the
    commitment. While it will only enter into a forward commitment
    with the intention of actually acquiring the security, the Fund
    may sell the security before the settlement date if it is deemed
    advisable by the Investment Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securities purchased under a forward commitment are subject to
    market fluctuation, and no interest (or dividends) accrues to
    the Fund prior to the settlement date. The Fund will segregate
    with its Custodian cash or other liquid securities in an
    aggregate amount at least equal to the amount of its outstanding
    forward commitments.
</DIV>
<A name='203'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    RESTRICTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund operates under the following restrictions that
    constitute fundamental policies that, except as otherwise noted,
    cannot be changed without the affirmative vote of the holders of
    a majority of the outstanding voting securities of the Fund
    voting together as a single class. In the event the Fund were to
    issue any preferred shares, the approval of a majority of such
    shares (as defined under the 1940 Act) voting as a separate
    class would also be required. Such majority vote requires the
    lesser of (i)&#160;67% of the Fund&#146;s applicable shares
    represented at a meeting at which more than 50% of the
    applicable shares outstanding are represented, whether in person
    or by proxy, or (ii)&#160;more than 50% of the Fund&#146;s
    applicable shares outstanding. Except as otherwise noted, all
    percentage limitations set forth below apply immediately after a
    purchase or initial investment and any subsequent change in any
    applicable percentage resulting from market fluctuations does
    not require any action. The Fund may not:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;invest more than 25% of its total assets, taken at the
    current market value of the Fund&#146;s investments at the time
    of each subsequent investment, in the securities of issuers in
    any particular industry;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;purchase commodities or commodity contracts if such
    purchase would result in regulation of the Fund as a commodity
    pool operator;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;purchase or sell real estate, provided the Fund may
    invest in securities and other instruments secured by real
    estate or interests therein or issued by companies that invest
    in real estate or interests therein;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;make loans of money or other property, except that
    (i)&#160;the Fund may acquire debt obligations of any type
    (including through extensions of credit) enter into repurchase
    agreements and lend portfolio assets and (ii)&#160;the Fund may,
    with respect to up to 20% of the Fund&#146;s total assets, lend
    money or other property to other investment companies advised by
    the Investment Adviser pursuant to a common lending program to
    the extent permitted by applicable law;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;borrow money, except to the extent permitted by
    applicable law;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;issue senior securities, except to the extent permitted
    by applicable law; or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (7)&#160;underwrite securities of other issuers, except insofar
    as the Fund may be deemed an underwriter under applicable law in
    selling portfolio securities; provided, however, this
    restriction shall not apply to securities of any investment
    company organized by the Fund that are to be distributed pro
    rata as a dividend to its shareholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investment objective is not a fundamental
    policy. Unless specifically stated as such, no policy of the
    Fund is fundamental and each policy may be changed by the Board
    without shareholder approval.
</DIV>
<A name='204'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT
    OF THE FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Trustees
    and Officers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Overall responsibility for management and supervision of the
    Fund rests with the Board. The Board approves all significant
    agreements between the Fund and the companies that furnish the
    Fund with services, including agreements with the Investment
    Adviser, the Fund&#146;s custodian and the Fund&#146;s transfer
    agent. The
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations of the Fund are delegated to the Investment Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The names and business addresses of the Trustees and principal
    officers of the Fund are set forth in the following table,
    together with their positions and their principal occupations
    during the past five years and, in the case of the Trustees,
    their positions with certain other organizations and companies.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Trustees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="28%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="10%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="15%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Name (and Age),<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Position with the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Term of Office and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Directorships<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Portfolios in Fund<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Fund and Business<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Length of Time<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Principal Occupation(s)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Held by<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Complex Overseen<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Address(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Served(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>During Past Five Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Trustee</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>by Trustee</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">INTERESTED TRUSTEES(3):
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Mario J. Gabelli (64)<BR>
    Trustee and Chief Investment Officer
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 **
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Chairman and Chief Executive
    Officer of GAMCO Investors, Inc. and Chief Investment
    Officer&#160;&#151; Value Portfolios of Gabelli Funds, LLC and
    GAMCO Asset Management Inc.; Director/Trustee or Chief
    Investment Officer of other registered investment companies in
    the Gabelli fund complex; Chairman and Chief Executive Officer
    of GGCP, Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Director of Morgan Group Holdings,
    Inc. (transportation services); Chairman of the Board of Lynch
    Interactive Corporation (multimedia and communication services
    company)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    24
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Edward T. Tokar (59)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 ***
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Senior Managing Director of Beacon
    Trust Company since 2004; Chief Executive Officer of Allied
    Capital Management LLC (1997-2004); Vice President&#160;&#151;
    Investments of Honeywell International Inc. (1977-2004)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Trustee of LEVCO Series Trust;
    Director of DB Hedge Strategies Fund LLC; Director of the
    Topiary Benefit Plan Investor Fund LLC (financial services)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">NON-INTERESTED TRUSTEES:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Anthony J. Colavita (71)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 ***
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Partner in the law firm of Anthony
    J. Colavita, P.C.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 8pt">None
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    34
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">James P. Conn (68)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 *
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Former Managing Director and Chief
    Investment Officer of Financial Security Assurance Holdings Ltd.
    (insurance holding company) (1992-1998)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Director of First Republic Bank
    (banking)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    15
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Clarence A. Davis (64)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 *
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Former Chief Operating Officer
    (2000-2005) and Chief Financial Officer (1999-2000) of the
    American Institute of Certified Public Accountants
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Director of Oneida Ltd.
    (kitchenware)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Mario d&#146;Urso (66)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 **
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Chairman of Mittel Capital Markets
    S.p.A. since 2001; Senator in the Italian Parliament (1996-2001)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 8pt">None
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Arthur V. Ferrara (76)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 *
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Former Chairman of the Board and
    Chief Executive Officer of The Guardian Life Insurance Company
    of America (1993-1995)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Director of The Guardian Sponsored
    Mutual Funds
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    7
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Michael J. Melarkey (57)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 **
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Partner in the law firm of
    Avansino, Melarkey, Knobel &#38; Mulligan
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Director of Southwest Gas
    Corporation (natural gas utility)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    4
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Salvatore J. Zizza (61)<BR>
    Trustee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Since November 2006 ***
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Chairman of Hallmark Electrical
    Supplies Corp.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Director of Hollis Eden
    Pharmaceuticals (biotechnology) and Earl Scheib, Inc.
    (automotive services)
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    25
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="21%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="19%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="57%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Name (and Age),<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Position with the Fund<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>and Business Address(1)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Length of Time Served(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Principal Occupation(s) During Past Five Years</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Bruce N. Alpert (54)<BR>
    President
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Since November 2006
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Executive Vice President and Chief
    Operating Officer of Gabelli Funds, LLC since 1988; Director and
    President of Gabelli Advisers, Inc. since 1998; Officer of all
    the registered investment companies in the Gabelli fund complex.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Carter W. Austin (40)<BR>
    Vice President
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Since November 2006
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Vice President of The Gabelli
    Equity Trust Inc. since 2000, The Gabelli Dividend &#38; Income
    Trust since 2003 and The Gabelli Global Gold, Natural Resources
    &#38; Income Trust since 2005; Vice President of Gabelli Funds,
    LLC since 1996.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Joseph H. Egan (62)<BR>
    Assistant Treasurer
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Since November 2006
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Officer of all the registered
    investment companies in the Gabelli fund complex; Vice President
    of Deutsche Investment Management Americas Inc. (formerly
    Scudder, Stevens &#38; Clark, Inc.) and Treasurer of The Scudder
    Charitable Foundation prior to 2004.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Peter D. Goldstein (53)<BR>
    Chief Compliance<BR>
    Officer
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <BR>
    <FONT style="font-size: 8pt">Since November 2006
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <BR>
    <FONT style="font-size: 8pt">Director of Regulatory Affairs for
    GAMCO Investors, Inc. since 2004; Chief Compliance Officer of
    all the registered investment companies in the Gabelli fund
    complex; Vice President of Goldman Sachs Asset Management from
    2000-2004.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">James E. McKee (43)<BR>
    Secretary
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Since November 2006
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Vice President, General Counsel and
    Secretary of GAMCO Investors, Inc. since 1999 and GAMCO Asset
    Management Inc. since 1993; Secretary of all the registered
    investment companies advised by Gabelli Advisers, Inc. and
    Gabelli Funds, LLC.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Agnes Mullady (47)<BR>
    Treasurer and Principal<BR>
    Financial Officer
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <BR>
    <FONT style="font-size: 8pt">Since November 2006
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <BR>
    <FONT style="font-size: 8pt">Officer of all the registered
    investment companies in the Gabelli fund complex; Senior Vice
    President of United States Trust Company, N.A. and Treasurer and
    Chief Financial Officer of Excelsior Funds from 2004-2005; Chief
    Financial Officer of AMIC Distribution Partners from 2002-2004;
    Controller of Reserve Management, Inc. and Reserve Partners,
    Inc. and Treasurer of Reserve Funds from 2000-2002.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">David I. Schachter (53)<BR>
    Vice President
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Since November 2006
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
    <FONT style="font-size: 8pt">Vice President of The Gabelli
    Utility Trust since 1999 and The Gabelli Global Utility &#38;
    Income Trust since 2004; Vice President of Gabelli &#38;
    Company, Inc. since 1999; Vice President of Thomas J. Herzfeld
    Advisors, Inc. (a registered investment adviser and noted
    closed-end fund authority) prior to 1999.
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Address: One Corporate Center, Rye, NY
    <FONT style="white-space: nowrap">10580-1422,</FONT>
    unless otherwise noted.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund&#146;s Board is divided into three classes, each class
    having a term of three years. Each year the term of office of
    one class expires and the successor or successors elected to
    such class serve for a three year term. The three year term for
    each class expires as follows:</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Term expires at the Fund&#146;s 2007 Annual Meeting of
    Shareholders or until their successors are duly elected and
    qualified.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    Term expires at the Fund&#146;s 2008 Annual Meeting of
    Shareholders or until their successors are duly elected and
    qualified.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    *** </TD>
    <TD></TD>
    <TD valign="bottom">
    Term expires at the Fund&#146;s 2009 Annual Meeting of
    Shareholders or until their successors are duly elected and
    qualified.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    &#147;Interested person&#148; of the Fund, as defined in the
    1940 Act. Mr.&#160;Gabelli is considered an &#147;interested
    person&#148; of the Fund because of his affiliation with the
    Investment Adviser and with Gabelli&#160;&#38; Company, Inc.,
    which is a principal underwriter of the Fund&#146;s common
    shares and is expected to execute portfolio transactions for the
    Fund. Mr.&#160;Tokar is considered an &#147;interested
    person&#148; of the Fund as a result of his son&#146;s
    employment by an affiliate of the Adviser.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    13
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, all of the outstanding shares of the
    Fund were owned by GAMCO Investors, Inc., a New York corporation
    located at One Corporate Center, Rye NY
    <FONT style="white-space: nowrap">10580-1422.</FONT>
    GAMCO Investors, Inc. is the parent company of the Investment
    Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="45%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="12%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="12%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Dollar Range of Equity Securities<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Aggregate Dollar Range of Equity<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Trustee</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Held in the Fund*</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Securities Held in Fund Complex</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">INTERESTED TRUSTEES:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Mario J. Gabelli
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Over $
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Edward T. Tokar
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">NON-INTERESTED TRUSTEES:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Anthony J. Colavita**
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Over $
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">James P. Conn
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Over $
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Clarence A. Davis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Mario d&#146;Urso
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Arthur V. Ferrara
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Over $
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Michael J. Melarkey
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Over $
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Salvatore J. Zizza
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    none
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Over $
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All shares were valued as of December&#160;31, 2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 10%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=48 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    As of December&#160;31, 2005, Trustees did not own equity
    securities of the Fund because the Fund is a newly organized,
    closed-end investment company. As of the date of the SAI,
    Mario&#160;J. Gabelli may be deemed to beneficially own over
    $100,000 of the common shares of the Fund, which are held by
    GAMCO Investors Inc.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    Mr.&#160;Colavita beneficially owned less than 1% of the common
    stock of LGL Group, Inc., having a value of $16,517, as of
    December&#160;31, 2005. LGL Group, Inc. may be deemed to be
    controlled by Mario J. Gabelli and an affiliated person and in
    that event would be deemed to be under common control with the
    Investment Adviser.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trustees serving on the Fund&#146;s Nominating Committee are
    Anthony J. Colavita (Chair) and Salvatore J. Zizza. The
    Nominating Committee is responsible for recommending qualified
    candidates to the Board in the event that a position is vacated
    or created. The Nominating Committee would consider
    recommendations by shareholders if a vacancy were to exist. Such
    recommendations should be forwarded to the Secretary of the
    Fund. The Fund does not have a standing compensation committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Anthony J. Colavita, Clarence A. Davis and Salvatore J. Zizza
    (Chair), who are not &#147;interested persons&#148; of the Fund
    as defined in the 1940 Act, serve on the Fund&#146;s Audit
    Committee. The Audit Committee is generally responsible for
    reviewing and evaluating issues related to the accounting and
    financial reporting policies and internal controls of the Fund
    and, as appropriate, the internal controls of certain service
    providers, overseeing the quality and objectivity of the
    Fund&#146;s financial statements and the audit thereof, and to
    act as a liaison between the Board and the Fund&#146;s
    independent registered public accounting firm.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trust has a Proxy Voting Committee, which, if so determined
    by the Board, is authorized to exercise voting power and/or
    dispositive power over specific securities held in the
    Fund&#146;s portfolio for such period as the Board may
    determine. The Trustees serving on the Proxy Voting Committee
    are James P. Conn, Arthur V. Ferrara and Edward T. Tokar (Chair).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REMUNERATION
    OF TRUSTEES AND OFFICERS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund pays each Trustee who is not an officer or employee of
    the Investment Adviser or its affiliates a fee of
    $3,000&#160;per annum plus $1,000&#160;per board meeting
    attended in person ($500 if attended telephonically) and $500
    for attending each committee meeting and $3,000 for serving as a
    committee chairman (with the exception of the proxy voting
    committee), together with each Trustee&#146;s actual out of
    pocket expenses relating to attendance at such meetings.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows the compensation that it is
    anticipated the Trustees will earn in their capacity as Trustees
    during the Fund&#146;s year ending December&#160;31, 2007. The
    table also shows, for the year ended December&#160;31, 2005, the
    compensation Trustees earned in their capacity as trustees for
    other funds in the Gabelli fund complex.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">COMPENSATION
    TABLE</FONT></B>
</DIV>

<DIV style="margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="49%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="16%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="26%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated Compensation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total Compensation from the Fund<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Trustee</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>from the Fund</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>and Fund Complex Paid to Trustees*</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">INTERESTED TRUSTEES:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Mario J. Gabelli
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    (24)***
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Edward T. Tokar
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    20,500
</TD>
<TD nowrap align="left" valign="bottom">
    (1)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">NON-INTERESTED TRUSTEES:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Anthony J. Colavita
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    212,473
</TD>
<TD nowrap align="left" valign="bottom">
    (37)**,***
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">James P. Conn
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    83,283
</TD>
<TD nowrap align="left" valign="bottom">
    (14)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Clarence A. Davis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    (0)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Mario d&#146;Urso
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33,367
</TD>
<TD nowrap align="left" valign="bottom">
    (3)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Arthur V. Ferrara
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    32,011
</TD>
<TD nowrap align="left" valign="bottom">
    (9) **
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Michael J. Melarkey
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34,367
</TD>
<TD nowrap align="left" valign="bottom">
    (3)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Salvatore J. Zizza
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    143,962
</TD>
<TD nowrap align="left" valign="bottom">
    (25)***
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 10%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=48 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents the total compensation paid to such persons during
    the calendar year ended December&#160;31, 2005 by investment
    companies (including the Fund) or portfolios thereof from which
    such person receives compensation that are considered part of
    the same fund complex as the Fund because they have common or
    affiliated investment advisers. The total does not include,
    among other things, out of pocket Trustee expenses. The number
    in parenthesis represents the number of such investment
    companies.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes compensation for serving as a Director of The
    Treasurer&#146;s Fund, Inc., which was liquidated on
    October&#160;28, 2005.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    *** </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes compensation for serving as a Trustee of Ned Davis
    Research Funds, Inc., which was liquidated on February&#160;10,
    2006.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of Officers and Trustees; Limitations on Liability</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Agreement and Declaration of Trust of the Fund provides that
    the Fund will indemnify its Trustees and officers and may
    indemnify its employees or agents against liabilities and
    expenses incurred in connection with litigation in which they
    may be involved because of their positions with the Fund to the
    fullest extent permitted by law. However, nothing in the
    Agreement and Declaration of Trust of the Fund protects or
    indemnifies a trustee, officer, employee or agent of the Fund
    against any liability to which such person would otherwise be
    subject in the event of such person&#146;s willful misfeasance,
    bad faith, gross negligence or reckless disregard of the duties
    involved in the conduct of his or her position.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Advisory and Administrative Arrangements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Affiliates of the Investment Adviser may, in the ordinary course
    of their business, acquire for their own account or for the
    accounts of their advisory clients, significant (and possibly
    controlling) positions in the securities of companies that may
    also be suitable for investment by the Fund. The securities in
    which the Fund might invest may thereby be limited to some
    extent. For instance, many companies have adopted so-called
    &#147;poison pill&#148; or other defensive measures designed to
    discourage or prevent the completion of non-negotiated offers
    for control of the company. Such defensive measures may have the
    effect of limiting the shares of the company which might
    otherwise be acquired by the Fund if the affiliates of the
    Investment Adviser or their advisory accounts have or acquire a
    significant position in the same securities. However, the
    Investment Adviser does not believe that the investment
    activities of its affiliates will have a material adverse effect
    upon the Fund in seeking to achieve its investment objective. In
    addition, the Fund and the Investment Adviser have
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    adopted a code of ethics that is designed in part to ensure that
    all such orders are accorded priority of execution over orders
    entered on behalf of proprietary accounts or accounts in which
    the Investment Adviser or its affiliates have a substantial
    pecuniary interest. See &#147;Code of Ethics.&#148; The
    Investment Adviser may give advice or take action with respect
    to other clients that differs from the actions taken with
    respect to the Fund. The Fund may invest in the securities of
    companies that are investment management clients of the
    Investment Adviser&#146;s affiliates. In addition, portfolio
    companies or their officers or directors may be minority
    shareholders of the Investment Adviser&#146;s affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of the Advisory Agreement, the Investment
    Adviser manages the portfolio of the Fund in accordance with its
    stated investment objective and policies, makes investment
    decisions for the Fund, places orders to purchase and sell
    securities on behalf of the Fund, and manages its other business
    and affairs, all subject to the supervision and direction of the
    Board. In addition, under the Advisory Agreement, the Investment
    Adviser oversees the administration of all aspects of the
    Fund&#146;s business and affairs and provides, or arranges for
    others to provide, at the Investment Adviser&#146;s expense,
    certain enumerated services, including maintaining the
    Fund&#146;s books and records, preparing reports to the
    Fund&#146;s shareholders, and supervising the calculation of the
    net asset value of its shares. All expenses of computing the net
    asset value of the Fund, including any equipment or services
    obtained solely for the purpose of pricing shares or valuing its
    investment portfolio, will be an expense of the Fund under its
    Advisory Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Advisory Agreement provides that in the absence of willful
    misfeasance, bad faith, gross negligence or reckless disregard
    for its obligations and duties thereunder, the Investment
    Adviser is not liable for any error or judgment or mistake of
    law or for any loss suffered by the Fund. As part of the
    Advisory Agreement, the Fund has agreed that the name
    &#147;Gabelli&#148; is the Investment Adviser&#146;s property,
    and that in the event the Investment Adviser ceases to act as an
    investment adviser to the Fund, the Fund will change its name to
    one not including &#147;Gabelli.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to its terms, the Advisory Agreement will remain in
    effect with respect to the Fund until the second anniversary of
    the effectiveness of such Agreement, and from year to year
    thereafter if approved annually (i)&#160;by the Board or by the
    holders of a majority of its outstanding voting securities and
    (ii)&#160;by a majority of the Trustees who are not
    &#147;interested persons&#148; (as defined in the 1940 Act) of
    any party to the Advisory Agreement, by vote cast in person at a
    meeting called for the purpose of voting on such approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Advisory Agreement was approved by the Board at
    an in person meeting of the Board held on November&#160;8, 2006,
    including a majority of the Trustees who are not parties to the
    agreement or interested persons of any such party (as such term
    is defined in the 1940 Act).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Advisory Agreement terminates automatically on
    its assignment and may be terminated without penalty on
    60&#160;days&#146; written notice at the option of either party
    thereto or by a vote of a majority (as defined in the 1940 Act)
    of the Fund&#146;s outstanding shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Manager Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Accounts&#160;Managed</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information below lists the number of other registered
    investment companies, other pooled investment vehicles and other
    accounts for which the Fund&#146;s portfolio manager was
    primarily responsible for the day to day management as of the
    year ended December&#160;31, 2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="24%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="29%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Accounts<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Managed<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Assets with<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B>Name of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>with Advisory<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Advisory Fee<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B>Portfolio<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Type of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Accounts<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fee Based on<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Based on<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Manager</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Accounts</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Managed</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Assets</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Performance</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Performance</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <FONT style="font-size: 9pt">Mario J. Gabelli
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 9pt">Registered Investment Companies
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    25
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    13.1B
</TD>
<TD nowrap align="left" valign="top">
    *
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    6
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    4.7B
</TD>
<TD nowrap align="left" valign="top">
    *
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 9pt">Other Pooled Investment Vehicles
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    20
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    946.4M
</TD>
<TD nowrap align="left" valign="top">
    *
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    19
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    704.6M
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 9pt">Other Accounts
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1,882
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    10.0B
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    1.3B
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="font-size: 1pt; margin-left: 0%; width: 10%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=48 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents the portion of assets for which the portfolio manager
    has primary responsibility in the accounts indicated. The
    accounts indicated contain additional assets under the primary
    responsibility of other portfolio managers.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Potential
    Conflicts of Interest</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Actual or apparent conflicts of interest may arise when a
    portfolio manager for the Fund also has
    <FONT style="white-space: nowrap">day-to-day</FONT>
    management responsibilities with respect to one or more other
    accounts. These potential conflicts include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Allocation of Limited Time and
    Attention.</I>&#160;&#160;Because the portfolio manager manages
    many accounts, he may not be able to formulate as complete a
    strategy or identify equally attractive investment opportunities
    for each of those accounts as if he were to devote substantially
    more attention to the management of only a few accounts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Allocation of Limited Investment
    Opportunities.</I>&#160;&#160;If the portfolio manager
    identifies an investment opportunity that may be suitable for
    multiple accounts, the Fund may not be able to take full
    advantage of that opportunity because the opportunity may need
    to be allocated among all or many of these accounts or other
    accounts managed primarily by other portfolio managers of the
    Investment Adviser and its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pursuit of Differing Strategies.</I>&#160;&#160;At times, the
    portfolio manager may determine that an investment opportunity
    may be appropriate for only some of the accounts for which he
    exercises investment responsibility, or may decide that certain
    of these funds or accounts should take differing positions with
    respect to a particular security. In these cases, the portfolio
    manager may execute differing or opposite transactions for one
    or more accounts which may affect the market price of the
    security or the execution of the transactions, or both, to the
    detriment of one or more of his accounts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Selection of Broker/Dealers.</I>&#160;&#160;Because of the
    portfolio manager&#146;s position with and his indirect majority
    ownership interest in an affiliated broker, Gabelli&#160;&#38;
    Company, Inc. (&#147;Gabelli&#160;&#38; Company&#148;), he may
    have an incentive to use Gabelli&#160;&#38; Company to execute
    portfolio transactions for the Fund even if using
    Gabelli&#160;&#38; Company is not in the best interest of the
    Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Variation in Compensation.</I>&#160;&#160;A conflict of
    interest may arise where the financial or other benefits
    available to the portfolio manager differ among the accounts
    that he manages. If the structure of the Investment
    Adviser&#146;s management fee or the portfolio manager&#146;s
    compensation differs among accounts (such as where certain funds
    or accounts pay higher management fees or performance-based
    management fees), the portfolio manager may be motivated to
    favor certain funds or accounts over others. The portfolio
    manager also may be motivated to favor funds or accounts in
    which he has an investment interest, or in which the Investment
    Adviser or its affiliates have investment interests. In
    Mr.&#160;Gabelli&#146;s case, the Investment Adviser&#146;s
    compensation (and expenses) for the Fund are marginally greater
    as a percentage of assets than for certain other accounts and
    are less than for certain other accounts managed by
    Mr.&#160;Gabelli, while his personal compensation structure
    varies with near term performance to a greater degree in certain
    performance fee based accounts (including the Fund) than with
    non performance fee based accounts. In addition, he has
    investment interests in several of the funds managed by the
    Investment Adviser and its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser and the Fund have adopted compliance
    policies and procedures that are reasonably designed to address
    the various conflicts of interest that may arise for the
    Investment Adviser and its staff members. However, there is no
    guarantee that such policies and procedures will be able to
    detect and address every situation in which an actual or
    potential conflict may arise.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Compensation
    Structure</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mr.&#160;Gabelli receives incentive-based variable compensation
    based on a percentage of net revenues received by the Investment
    Adviser for managing the Fund. Net revenues are determined by
    deducting from gross investment management fees the firm&#146;s
    expenses (other than Mr.&#160;Gabelli&#146;s compensation)
    allocable to the Fund. Because the Fund has a fulcrum fee
    arrangement, Mr.&#160;Gabelli&#146;s compensation as portfolio
    manager
</DIV>

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    <BR>
    17
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of the Fund will depend on the Fund&#146;s level of assets and
    its performance relative to the T-Bill Index. Additionally, he
    receives similar incentive-based variable compensation for
    managing other accounts within the firm (most of which are not
    subject to performance or fulcrum fee arrangements). This method
    of compensation is based on the premise that superior long-term
    performance in managing a portfolio should be rewarded with
    higher compensation as a result of growth of assets through
    appreciation and net investment activity. Five closed-end
    registered investment companies managed by Mr.&#160;Gabelli have
    arrangements whereby the Investment Adviser will only receive
    its investment advisory fee attributable to the liquidation
    value of outstanding preferred stock (and Mr.&#160;Gabelli would
    only receive his percentage of such advisory fee) if certain
    performance levels are met. Mr.&#160;Gabelli manages other
    accounts with performance fees. Compensation for managing these
    accounts has two components. One component of his compensation
    is based on a percentage of net revenues received by the
    Investment Adviser for managing the account. The second
    component is based on absolute performance of the account, with
    respect to which a percentage of such performance fee is paid to
    Mr.&#160;Gabelli. As an executive officer of the Investment
    Adviser&#146;s parent company, GAMCO Investors, Inc.,
    Mr.&#160;Gabelli also receives ten percent of the net operating
    profits of the parent company. Mr.&#160;Gabelli receives no base
    salary, no annual bonus, and no stock options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this SAI, the portfolio manager of the Fund
    does not own equity securities of the Fund because the Fund is a
    newly organized, closed-end investment company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Holdings Information</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Employees of the Investment Adviser and its affiliates will
    often have access to information concerning the portfolio
    holdings of the Fund. The Fund and the Investment Adviser have
    adopted policies and procedures that require all employees to
    safeguard proprietary information of the Fund, which includes
    information relating to the Fund&#146;s portfolio holdings as
    well as portfolio trading activity of the Investment Adviser
    with respect to the Fund (collectively, &#147;Portfolio Holdings
    Information&#148;). In addition, the Fund and the Investment
    Adviser have adopted policies and procedures providing that
    Portfolio Holdings Information may not be disclosed except to
    the extent that it is (a)&#160;made available to the general
    public by posting on the Fund&#146;s website or filed as a part
    of a required filing on
    <FONT style="white-space: nowrap">Form&#160;N-Q</FONT>
    or N-CSR or (b)&#160;provided to a third party for legitimate
    business purposes or regulatory purposes, that has agreed to
    keep such data confidential under forms approved by the
    Investment Adviser&#146;s legal department or outside counsel,
    as described below. The Investment Adviser will examine each
    situation under (b)&#160;with a view to determine that release
    of the information is in the best interest of the Fund and its
    shareholders and, if a potential conflict between the
    Adviser&#146;s interests and the Fund&#146;s interests arises,
    to have such conflict resolved by the Chief Compliance Officer
    or the independent Board. These policies further provide that no
    officer of the Fund or employee of the Investment Adviser shall
    communicate with the media about the Fund without obtaining the
    advance consent of the Chief Executive Officer, Chief Operating
    Officer, or General Counsel of the Investment Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the foregoing policies, the Fund currently may disclose
    Portfolio Holdings Information in the circumstances outlined
    below. Disclosure generally may be either on a monthly or
    quarterly basis with no time lag in some cases and with a time
    lag of up to 60&#160;days in other cases (with the exception of
    proxy voting services which require a regular download of data):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;To regulatory authorities in response to requests for
    such information and with the approval of the Chief Compliance
    Officer of the Fund;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;To mutual fund rating and statistical agencies and to
    persons performing similar functions where there is a legitimate
    business purpose for such disclosure and such entity has agreed
    to keep such data confidential until at least it has been made
    public by the Investment Adviser;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;To service providers of the Fund, as necessary for the
    performance of their services to the Fund and to the Board; the
    Fund&#146;s anticipated service providers are its administrator,
    transfer agent, custodian, independent registered public
    accounting firm, and legal counsel;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;To firms providing proxy voting and other proxy
    services provided such entity has agreed to keep such data
    confidential until at least it has been made public by the
    Investment Adviser;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;To certain broker dealers, investment advisers, and
    other financial intermediaries for purposes of their performing
    due diligence on the Fund and not for dissemination of this
    information to their clients or use of this information to
    conduct trading for their clients. Disclosure of Portfolio
    Holdings Information in these circumstances requires the broker,
    dealer, investment adviser, or financial intermediary to agree
    to keep such information confidential and is further subject to
    prior approval of the Chief Compliance Officer of the Fund and
    shall be reported to the Board at the next quarterly meeting; and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (6)&#160;To consultants for purposes of performing analysis of
    the Fund, which analysis (but not the Portfolio Holdings
    Information) may be used by the consultant with its clients or
    disseminated to the public, provided that such entity shall have
    agreed to keep such information confidential until at least it
    has been made public by the Investment Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Disclosures made pursuant to a confidentiality agreement are
    subject to periodic confirmation by the Chief Compliance Officer
    of the Fund that the recipient has utilized such information
    solely in accordance with the terms of the agreement. Neither
    the Fund nor the Investment Adviser, nor any of the Investment
    Adviser&#146;s affiliates will accept on behalf of itself, its
    affiliates, or the Fund any compensation or other consideration
    in connection with the disclosure of portfolio holdings of the
    Fund. The Board will review such arrangements annually with the
    Fund&#146;s Chief Compliance Officer.
</DIV>
<A name='205'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DIVIDENDS
    AND DISTRIBUTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund, along with other closed-end registered investment
    companies advised by the Investment Adviser, is covered by an
    exemption from Section&#160;19(b) of the 1940 Act and
    <FONT style="white-space: nowrap">Rule&#160;19b-1</FONT>
    thereunder permitting the Fund to make periodic distributions of
    long-term capital gains provided that any distribution policy of
    the Fund with respect to its common shares calls for periodic
    (e.g., quarterly or semi-annually, but in no event more
    frequently than monthly) distributions in an amount equal to a
    fixed percentage of the Fund&#146;s average net asset value or
    market price per common share over a specified period of time at
    or about the time of distribution or the payment of a fixed
    dollar amount. The exemption also permits the Fund to make such
    distributions with respect to its senior securities, if any, in
    accordance with such shares&#146; terms.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Were such a policy adopted, to the extent the Fund&#146;s total
    distributions for a year exceed its net investment company
    taxable income (interest, dividends and net short-term capital
    gains in excess of expenses) and net realized long-term capital
    gains for that year, the excess would generally constitute a tax
    free return of capital up to the amount of a shareholder&#146;s
    tax basis in the common shares. Any distributions which (based
    upon the Fund&#146;s full year performance) constitute a tax
    free return of capital would reduce a shareholder&#146;s tax
    basis in the common shares, thereby increasing such
    shareholder&#146;s potential gain or reducing his or her
    potential loss on the sale of the common shares. Any amounts
    distributed to a shareholder in excess of the basis in the
    common shares would generally be taxable to the shareholder as
    capital gain. See &#147;Taxation.&#148; Distribution notices
    provided by the Fund to its shareholders will clearly indicate
    what portion of the distributions would constitute net income,
    net capital gains, and return of capital. The final
    determination of the source of such distributions for federal
    income tax purposes will be made shortly after year end based on
    the Fund&#146;s actual net investment company taxable income and
    net capital gain for that year and would be communicated to
    shareholders promptly. In the event the Fund distributes amounts
    in excess of its investment company taxable income and net
    capital gain, such distributions will decrease the Fund&#146;s
    total assets and, therefore, have the likely effect of
    increasing the Fund&#146;s expense ratio as the Fund&#146;s
    fixed expenses will become a larger percentage of the
    Fund&#146;s average net assets. In addition, in order to make
    such distributions, the Fund may have to sell a portion of its
    investment portfolio at a time when it is disadvantageous to do
    so.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='206'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PORTFOLIO
    TRANSACTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to policies established by the Board, the Investment
    Adviser is responsible for placing purchase and sale orders and
    the allocation of brokerage on behalf of the Fund. Transactions
    in equity securities are in most cases effected on U.S.&#160;or
    foreign stock exchanges and involve the payment of negotiated
    brokerage commissions. There may be no stated commission in the
    case of securities traded in
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    markets, but the prices of those securities may include
    undisclosed commissions or
    <FONT style="white-space: nowrap">mark-ups.</FONT>
    Principal transactions are not entered into with affiliates of
    the Fund. However, Gabelli&#160;&#38; Company may execute
    transactions in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    markets on an agency basis and receive a stated commission
    therefrom. To the extent consistent with applicable provisions
    of the 1940 Act and the rules and exemptions adopted by the
    Securities and Exchange Commission thereunder, as well as other
    regulatory requirements, the Board has determined that portfolio
    transactions may be executed through Gabelli&#160;&#38; Company
    and its broker-dealer affiliates if, in the judgment of the
    Investment Adviser, the use of those broker-dealers is likely to
    result in price and execution at least as favorable as those of
    other qualified broker-dealers, and if, in particular
    transactions, those broker-dealers charge the Fund a rate
    consistent with that charged to comparable unaffiliated
    customers in similar transactions. The Fund has no obligations
    to deal with any broker or group of brokers in executing
    transactions in portfolio securities. In executing transactions,
    the Investment Adviser seeks to obtain the best price and
    execution for the Fund, taking into account such factors as
    price, size of order, difficulty of execution, and operational
    facilities of the firm involved and the firm&#146;s risk in
    positioning a block of securities. While the Investment Adviser
    generally seeks reasonably competitive commission rates, the
    Fund does not necessarily pay the lowest commission available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to obtaining the best price and execution, brokers who
    provide supplemental research, market, and statistical
    information to the Investment Adviser or its affiliates may
    receive orders for transactions by the Fund. The term
    &#147;research, market, and statistical information&#148;
    includes advice as to the value of securities, and advisability
    of investing in, purchasing, or selling securities, the
    availability of securities or purchasers or sellers of
    securities, and furnishing analyses and reports concerning
    issues, industries, securities, economic factors and trends,
    portfolio strategy, and the performance of accounts. Information
    so received will be in addition to and not in lieu of the
    services required to be performed by the Investment Adviser
    under the Advisory Agreement and the expenses of the Investment
    Adviser will not necessarily be reduced as a result of the
    receipt of such supplemental information. Such information may
    be useful to the Investment Adviser and its affiliates in
    providing services to clients other than the Fund, and not all
    such information is used by the Investment Adviser in connection
    with the Fund. Conversely, such information provided to the
    Investment Adviser and its affiliates by brokers and dealers
    through whom other clients of the Investment Adviser and its
    affiliates effect securities transactions may be useful to the
    Investment Adviser in providing services to the Fund.
</DIV>
<A name='207'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TAXATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion is a brief summary of certain U.S.
    federal income tax considerations affecting the Fund and its
    shareholders. The discussion reflects applicable tax laws of the
    United States as of the date of this SAI, which tax laws may be
    changed or subject to new interpretations by the courts or the
    Internal Revenue Service (the &#147;IRS&#148;) retroactively or
    prospectively. No attempt is made to present a detailed
    explanation of all U.S. federal, state, local and foreign tax
    concerns affecting the Fund and its shareholders (including
    shareholders owning large positions in the Fund), and the
    discussions set forth here and in the Prospectus do not
    constitute tax advice. Investors are urged to consult their own
    tax advisers with any specific questions relating to U.S.
    federal, state, local and foreign taxes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund intends to elect to be treated and to qualify annually
    as a regulated investment company under Subchapter M of the
    Internal Revenue Code of 1986, as amended (the &#147;Code&#148;)
    (a &#147;RIC&#148;). Accordingly, the Fund must, among other
    things, (i)&#160;derive in each taxable year at least 90% of its
    gross income from (a)&#160;dividends, interest (including
    tax-exempt interest), payments with respect to certain
    securities loans, and
</DIV>

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    <BR>
    20
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    gains from the sale or other disposition of stock, securities or
    foreign currencies, or other income (including but not limited
    to gain from options, futures and forward contracts) derived
    with respect to its business of investing in such stock,
    securities or currencies and (b)&#160;net income derived from
    interests in certain publicly traded partnerships that are
    treated as partnerships for U.S. federal income tax purposes and
    that derive less than 90% of their gross income from the items
    described in (a)&#160;above (each a &#147;Qualified Publicly
    Traded Partnership&#148;); and (ii)&#160;diversify its holdings
    so that, at the end of each quarter of each taxable year
    (a)&#160;at least 50% of the value of the Fund&#146;s total
    assets is represented by cash and cash items, U.S. government
    securities, the securities of other regulated investment
    companies and other securities, with such other securities
    limited, in respect of any one issuer, to an amount not greater
    than 5% of the value of the Fund&#146;s total assets and not
    more than 10% of the outstanding voting securities of such
    issuer and (b)&#160;not more than 25% of the value of the
    Fund&#146;s total assets is invested in the securities of
    (I)&#160;any one issuer (other than U.S. government securities
    and the securities of other RICs), (II)&#160;any two or more
    issuers that the Fund controls and that are determined to be
    engaged in the same business or similar or related trades or
    businesses or (III)&#160;any one or more Qualified Publicly
    Traded Partnerships.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investments in partnerships, including in
    Qualified Publicly Traded Partnerships, may result in the Fund
    being subject to state, local or foreign income, franchise or
    withholding tax liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a RIC, the Fund generally is not subject to U.S. federal
    income tax on income and gains that it distributes each taxable
    year to shareholders, if it distributes at least 90% of the sum
    of (i)&#160;the Fund&#146;s investment company taxable income
    (which includes, among other items, dividends, interest and the
    excess of any net short-term capital gain over net long-term
    capital loss and other taxable income, other than any net
    long-term capital gain, reduced by deductible expenses)
    determined without regard to the deduction for dividends and
    distributions paid and (ii)&#160;its net tax-exempt interest
    income (the excess of its gross tax-exempt interest income over
    certain disallowed deductions). The Fund intends to distribute
    at least annually substantially all of such income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amounts not distributed on a timely basis in accordance with a
    calendar year distribution requirement are subject to a
    nondeductible 4% excise tax at the Fund level. To avoid the tax,
    the Fund must distribute during each calendar year an amount at
    least equal to the sum of (i)&#160;98% of its ordinary income
    (not taking into account any capital gains or losses) for the
    calendar year, (ii)&#160;98% of its capital gains in excess of
    its capital losses (adjusted for certain ordinary losses) for a
    one-year period generally ending on October 31 of the calendar
    year (unless an election is made to use the Fund&#146;s fiscal
    year), and (iii)&#160;certain undistributed amounts from
    previous years on which the Fund paid no U.S. federal income
    tax. While the Fund intends to distribute any income and capital
    gain in the manner necessary to minimize imposition of the 4%
    excise tax, there can be no assurance that sufficient amounts of
    the Fund&#146;s taxable income and capital gains will be
    distributed to avoid entirely the imposition of the tax. In that
    event, the Fund will be liable for the tax only on the amount by
    which it does not meet the foregoing distribution requirement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A distribution will be treated as paid during the calendar year
    if it is paid during the calendar year or declared by the Fund
    in October, November or December of the year, payable to
    shareholders of record on a date during such a month and paid by
    the Fund during January of the following year. Any such
    distributions paid during January of the following year will be
    deemed to be received by the Fund&#146;s shareholders on
    December 31 of the year the distributions are declared, rather
    than when the distributions are actually received.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund were unable to satisfy the 90% distribution
    requirement or otherwise were to fail to qualify as a RIC in any
    year, it would be taxed in the same manner as an ordinary
    corporation and distributions to the Fund&#146;s shareholders
    would not be deductible by the Fund in computing its taxable
    income. To qualify again to be taxed as a RIC in a subsequent
    year, the Fund would be required to distribute to its
    shareholders its earnings and profits attributable to non-RIC
    years reduced by an interest charge on 50% of such earnings and
    profits payable by the Fund to the IRS. In addition, if the Fund
    failed to qualify as a RIC for a period greater than two taxable
    years, then the Fund would be required to elect to recognize and
    pay tax on any net built-in gain (the excess of aggregate gain,
    including items of income, over aggregate loss that
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    would have been realized if the Fund had been liquidated) or,
    alternatively, be subject to taxation on such built-in gain
    recognized for a period of ten years, in order to qualify as a
    RIC in a subsequent year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Gain or loss on the sales of securities by the Fund will
    generally be long-term capital gain or loss if the securities
    have been held by the Fund for more than one year. Gain or loss
    on the sale of securities held for one year or less will be
    short-term capital gain or loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the Fund&#146;s investment practices are subject to
    special and complex U.S. federal income tax provisions that may,
    among other things, (i)&#160;disallow, suspend or otherwise
    limit the allowance of certain losses or deductions,
    (ii)&#160;convert lower taxed long-term capital gains and
    qualified dividend income into higher taxed short-term capital
    gains or ordinary income, (iii)&#160;convert ordinary loss or a
    deduction into capital loss (the deductibility of which is more
    limited), (iv)&#160;cause the Fund to recognize income or gain
    without a corresponding receipt of cash, (v)&#160;adversely
    affect the time as to when a purchase or sale of stock or
    securities is deemed to occur, (vi)&#160;adversely alter the
    characterization of certain complex financial transactions and
    (vii)&#160;produce income that will not qualify as good income
    for purposes of the 90% annual gross income requirement
    described above. The Fund will monitor its transactions and may
    make certain tax elections and may be required to borrow money
    or dispose of securities to mitigate the effect of these rules
    and prevent disqualification of the Fund as a RIC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Foreign currency gain or loss on
    <FONT style="white-space: nowrap">non-U.S.</FONT>
    dollar-denominated securities and on any
    <FONT style="white-space: nowrap">non-U.S.</FONT>
    dollar-denominated futures contracts, options and forward
    contracts that are not section&#160;1256 contracts (as defined
    below) generally will be treated as ordinary income and loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The premium received by the Fund for writing a call option is
    not included in income at the time of receipt. If the option
    expires, the premium is short-term capital gain to the Fund. If
    the Fund enters into a closing transaction, the difference
    between the amount paid to close out its position and the
    premium received is short-term capital gain or loss. If a call
    option written by the Fund is exercised, thereby requiring the
    Fund to sell the underlying security, the premium will increase
    the amount realized upon the sale of the security and any
    resulting gain or loss will be long-term or short-term,
    depending upon the holding period of the security. Because the
    Fund does not have control over the exercise of the call options
    it writes, such exercises or other required sales of the
    underlying securities may cause the Fund to realize capital
    gains or losses at inopportune times.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to a put or call option that is purchased by the
    Fund, if the option is sold, any resulting gain or loss will be
    a capital gain or loss, and will be short-term or long-term,
    depending upon the holding period for the option. If the option
    expires, the resulting loss is a capital loss and is short-term
    or long-term, depending upon the holding period for the option.
    If the option is exercised, the cost of the option, in the case
    of a call option, is added to the basis of the purchased
    security and, in the case of a put option, reduces the amount
    realized on the underlying security in determining gain or loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investment in so-called &#147;section&#160;1256
    contracts,&#148; such as regulated futures contracts, most
    foreign currency forward contracts traded in the interbank
    market and options on most stock indices, are subject to special
    tax rules. All section&#160;1256 contracts held by the Fund at
    the end of its taxable year are required to be marked to their
    market value, and any unrealized gain or loss on those positions
    will be included in the Fund&#146;s income as if each position
    had been sold for its fair market value at the end of the
    taxable year. The resulting gain or loss will be combined with
    any gain or loss realized by the Fund from positions in
    section&#160;1256 contracts closed during the taxable year.
    Provided such positions were held as capital assets and were not
    part of a &#147;hedging transaction&#148; nor part of a
    &#147;straddle,&#148; 60% of the resulting net gain or loss will
    be treated as long-term capital gain or loss, and 40% of such
    net gain or loss will be treated as short-term capital gain or
    loss, regardless of the period of time the positions were
    actually held by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because the Fund may invest in foreign securities, its income
    from such securities may be subject to
    <FONT style="white-space: nowrap">non-U.S.</FONT>
    taxes. The Fund intends to invest less than 50% of its total
    assets in foreign securities. As long as the Fund continues to
    invest less than 50% of its assets in foreign securities it will
    not be eligible to elect to &#147;pass-through&#148; to
    shareholders of the Fund the ability to use the foreign tax
    deduction or foreign tax credit for foreign taxes paid with
    respect to qualifying taxes.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will either distribute or retain for reinvestment all
    or part of its net capital gain. If any such gain is retained,
    the Fund will be subject to a tax of 35% of such amount. In that
    event, the Fund expects to designate the retained amount as
    undistributed capital gain in a notice to its shareholders, each
    of whom (i)&#160;will be required to include in income for tax
    purposes as long-term capital gain its share of such
    undistributed amounts, (ii)&#160;will be entitled to credit its
    proportionate share of the tax paid by the Fund against its U.S.
    federal income tax liability and to claim refunds to the extent
    that the credit exceeds such liability and (iii)&#160;will
    increase its basis in its common shares of the Fund by an amount
    equal to 65% of the amount of undistributed capital gain
    included in such shareholder&#146;s gross income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Distributions paid by the Fund from its investment company
    taxable income, which includes net short-term capital gain,
    generally are taxable as ordinary income to the extent of the
    Fund&#146;s earnings and profits. Such distributions (if
    designated by the Fund) may, however, qualify (provided holding
    period and other requirements are met by both the Fund and the
    shareholder) (i)&#160;for the dividends received deduction
    available to corporations, but only to the extent that the
    Fund&#146;s income consists of dividend income from U.S.
    corporations and (ii)&#160;in the case of individual
    shareholders, as qualified dividend income eligible to be taxed
    at a maximum rate of generally 15% (5% for individuals in lower
    tax brackets) to the extent that the Fund receives qualified
    dividend income. If the Fund&#146;s qualified dividend income is
    less than 95% of its gross income, a shareholder of the Fund may
    only include as qualified dividend income that portion of the
    dividends that may be and are so designated by the Fund as
    qualified dividend income. These special rules relating to the
    taxation of ordinary income dividends paid by RICs to individual
    taxpayers generally apply to taxable years beginning on or
    before December&#160;31, 2010. Thereafter, the Fund&#146;s
    dividends, other than capital gains dividends, will be fully
    taxable at ordinary income rates unless further Congressional
    action is taken. There can be no assurance as to what portion of
    the Fund&#146;s distributions will qualify for favorable
    treatment as qualified dividend income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Qualified dividend income is, in general, dividend income from
    taxable domestic corporations and certain qualified foreign
    corporations (e.g., generally, foreign corporations incorporated
    in a possession of the United States or in certain countries
    with a qualifying comprehensive tax treaty with the United
    States, or whose stock with respect to which such dividend is
    paid is readily tradable on an established securities market in
    the United States). A qualified foreign corporation does not
    include a foreign corporation which for the taxable year of the
    corporation in which the dividend was paid, or the preceding
    taxable year, is a &#147;passive foreign investment
    company,&#148; as defined in the Code. If the Fund lends
    portfolio securities, the amount received by the Fund that is
    the equivalent of the dividends paid by the issuer on the
    securities loaned will not be eligible for qualified dividend
    income treatment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Distributions of net capital gain designated as capital gain
    distributions, if any, are taxable to shareholders at rates
    applicable to long-term capital gain, whether paid in cash or in
    stock, and regardless of how long the shareholder has held the
    Fund&#146;s common shares. Capital gain distributions are not
    eligible for the dividends received deduction. The maximum U.S.
    federal tax rate on net long-term capital gain of individuals is
    generally 15% (5% for individuals in lower brackets) for such
    gain realized before January&#160;1, 2011. Unrecaptured
    Section&#160;1250 gain distributions, if any, will be subject to
    a 25% tax. For non-corporate taxpayers, investment company
    taxable income (other than qualified dividend income) will
    currently be taxed at a maximum rate of 35%, while net capital
    gain generally will be taxed at a maximum rate of 15%. For
    corporate taxpayers, both investment company taxable income and
    net capital gain are taxed at a maximum rate of 35%.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, for any calendar year, the total distributions exceed both
    current earnings and profits and accumulated earnings and
    profits, the excess will generally be treated as a tax-free
    return of capital up to the amount of a shareholder&#146;s tax
    basis in the common shares. The amount treated as a tax-free
    return of capital will reduce a shareholder&#146;s tax basis in
    the common shares, thereby increasing such shareholder&#146;s
    potential gain or reducing his or her potential loss on the sale
    of the common shares. Any amounts distributed to a shareholder
    in excess of his or her basis in the common shares will be
    taxable to the shareholder as capital gain (assuming your common
    shares are held as a capital asset).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shareholders may be entitled to offset their capital gain
    distributions (but not distributions eligible for qualified
    dividend income treatment) with capital loss. There are a number
    of statutory provisions affecting when capital loss may be
    offset against capital gain, and limiting the use of loss from
    certain investments and activities. Accordingly, shareholders
    with capital loss are urged to consult their tax advisers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An investor should be aware that if Fund common shares are
    purchased shortly before the record date for any taxable
    distribution (including a capital gain dividend), the purchase
    price likely will reflect the value of the distribution and the
    investor then would receive a taxable distribution that is
    likely to reduce the trading value of such Fund common shares,
    in effect resulting in a taxable return of some of the purchase
    price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain types of income received by the Fund from real estate
    investment trusts (&#147;REITs&#148;), real estate mortgage
    investment conduits (&#147;REMICs&#148;), taxable mortgage pools
    or other investments may cause the Fund to designate some or all
    of its distributions as &#147;excess inclusion income.&#148; To
    Fund shareholders such excess inclusion income will
    (i)&#160;constitute taxable income, as &#147;unrelated business
    taxable income&#148; (&#147;UBTI&#148;) for those shareholders
    who would otherwise be tax-exempt such as individual retirement
    accounts, 401(k) accounts, Keogh plans, pension plans and
    certain charitable entities; (ii)&#160;not be offset against net
    operating losses for tax purposes; (iii)&#160;not be eligible
    for reduced U.S. withholding for
    <FONT style="white-space: nowrap">non-U.S.</FONT>
    shareholders even from tax treaty countries; and (iv)&#160;cause
    the Fund to be subject to tax if certain &#147;disqualified
    organizations,&#148; as defined by the Code (such as certain
    governments or governmental agencies and charitable remainder
    trusts), are Fund shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon a sale, exchange or other disposition of common shares, a
    shareholder will generally realize a taxable gain or loss equal
    to the difference between the amount of cash and the fair market
    value of other property received and the shareholder&#146;s
    adjusted tax basis in the common shares. Such gain or loss will
    be treated as long-term capital gain or loss if the common
    shares have been held for more than one year. Any loss realized
    on a sale or exchange of common shares of the Fund will be
    disallowed to the extent the common shares disposed of are
    replaced by substantially identical common shares within a
    <FONT style="white-space: nowrap">61-day</FONT>
    period beginning 30&#160;days before and ending 30&#160;days
    after the date that the common shares are disposed of. In such a
    case, the basis of the common shares acquired will be adjusted
    to reflect the disallowed loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any loss realized by a shareholder on the sale of Fund common
    shares held by the shareholder for six months or less will be
    treated for tax purposes as a long-term capital loss to the
    extent of any capital gain distributions received by the
    shareholder (or amounts credited to the shareholder as an
    undistributed capital gain) with respect to such common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ordinary income distributions and capital gain distributions
    also may be subject to state and local taxes. Shareholders are
    urged to consult their own tax advisers regarding specific
    questions about U.S. federal (including the application of the
    alternative minimum tax rules), state, local or foreign tax
    consequences to them of investing in the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A shareholder that is a nonresident alien individual or a
    foreign corporation (a &#147;foreign investor&#148;) generally
    will be subject to U.S. withholding tax at the rate of 30% (or
    possibly a lower rate provided by an applicable tax treaty) on
    ordinary income dividends (except as discussed below). Different
    tax consequences may result if the foreign investor is engaged
    in a trade or business in the United States or, in the case of
    an individual, is present in the United States for 183&#160;days
    or more during a taxable year and certain other conditions are
    met. Foreign investors should consult their tax advisors
    regarding the tax consequences of investing in the Fund&#146;s
    common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, U.S. federal withholding tax will not apply to any
    gain or income realized by a foreign investor in respect of any
    distributions of net long-term capital gains over net short-term
    capital losses, exempt-interest dividends, or upon the sale or
    other disposition of common shares of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For taxable years beginning before January&#160;1, 2008,
    properly-designated dividends are generally exempt from U.S.
    federal withholding tax where they (i)&#160;are paid in respect
    of the Fund&#146;s &#147;qualified net interest income&#148;
    (generally, the Fund&#146;s U.S. source interest income, other
    than certain contingent interest and interest from obligations
    of a corporation or partnership in which the Fund is at least a
    10% shareholder, reduced by expenses that are allocable to such
    income) or (ii)&#160;are paid in respect of the Fund&#146;s
    &#147;qualified
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    short-term capital gains&#148; (generally, the excess of the
    Fund&#146;s net short-term capital gain over the Fund&#146;s
    long-term capital loss for such taxable year). However,
    depending on its circumstances, the Fund may designate all, some
    or none of its potentially eligible dividends as such qualified
    net interest income or as qualified short-term capital gains,
    and/or treat such dividends, in whole or in part, as ineligible
    for this exemption from withholding. In order to qualify for
    this exemption from withholding, a foreign investor will need to
    comply with applicable certification requirements relating to
    its <FONT style="white-space: nowrap">non-U.S.</FONT>
    status (including, in general, furnishing an IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    or substitute Form). In the case of common shares held through
    an intermediary, the intermediary may withhold even if the Fund
    designates the payment as qualified net interest income or
    qualified short-term capital gain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Foreign investors should contact their intermediaries with
    respect to the application of these rules to their accounts.
    There can be no assurance as to what portion of the Fund&#146;s
    distributions will qualify for favorable treatment as qualified
    net interest income or qualified short-term capital gains.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Backup
    Withholding</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may be required to withhold U.S. federal income tax on
    all taxable distributions and redemption proceeds payable to
    non-corporate shareholders who fail to provide the Fund with
    their correct taxpayer identification number or to make required
    certifications, or who have been notified by the IRS that they
    are subject to backup withholding. Backup withholding is not an
    additional tax. Any amounts withheld may be refunded or credited
    against such shareholder&#146;s U.S. federal income tax
    liability, if any, provided that the required information is
    furnished to the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>The foregoing is a general and abbreviated summary of the
    applicable provisions of the Code and Treasury regulations
    presently in effect. For the complete provisions, reference
    should be made to the pertinent Code sections and the Treasury
    regulations promulgated thereunder. The Code and the Treasury
    regulations are subject to change by legislative, judicial or
    administrative action, either prospectively or retroactively.
    Persons considering an investment in common shares of the Fund
    should consult their own tax advisers regarding the purchase,
    ownership and disposition of Fund common shares.</I></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">To the
    Shareholder and Board of Trustees of
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Gabelli Global Deal Fund
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In our opinion, the accompanying statement of net assets
    presents fairly, in all material respects, the financial
    position of The Gabelli Global Deal Fund (the &#147;Fund&#148;)
    at&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2007, in conformity with accounting principles generally
    accepted in the United States of America. This financial
    statement is the responsibility of the Fund&#146;s management;
    our responsibility is to express an opinion on this financial
    statement based on our audit. We conducted our audit of this
    financial statement in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statements are
    free of material misstatement. An audit includes examining, on a
    test basis, evidence supporting the amounts and disclosures in
    the financial statements, assessing the accounting principles
    used and significant estimates made by management, and
    evaluating the overall financial statement presentation. We
    believe that our audit provides a reasonable basis for our
    opinion.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    New York, New York
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    , 2007
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='212'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FINANCIAL
    STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Gabelli Global Deal Fund<BR>
    </FONT></B><FONT style="font-family: 'Times New Roman', Times">Statement
    of Net Assets<BR>
    December&#160;26, 2006
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="90%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">Assets</FONT></B><FONT style="font-size: 10pt">
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Cash
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100,008
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">Net Assets</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100,008
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">Net Assets Consist
    of:</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Common shares of beneficial
    interest, at par value (Note&#160;4)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Additional
    <FONT style="white-space: nowrap">paid-in-capital</FONT>
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100,003
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">Net Assets</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    100,008
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">Net Assets Value
    </FONT></B><FONT style="font-size: 10pt">per share
    ($100,008/5,236 common shares of beneficial interest outstanding)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Gabelli Global Deal Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notes to Statement of Net Assets
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    December&#160;27, 2006
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Note&#160;1&#160;&#151;
    Organization</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Gabelli Global Deal Fund (&#147;the Fund&#148;) is a
    non-diversified closed-end management investment company
    organized under the laws of the state of Delaware on
    October&#160;17, 2006 and has had no operations to date other
    than matters relating to its organization under the Investment
    Company Act of 1940, as amended, and the sale and issuance of
    5,236 of its common shares of beneficial interest
    (&#147;Shares&#148;) to GAMCO Investors, Inc., the parent
    company of Gabelli Funds, LLC, the Fund&#146;s investment
    adviser (the &#147;Investment Adviser&#148;) on
    December&#160;22, 2006.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investment objective is to achieve absolute
    returns in various market conditions without excessive risk of
    capital. Absolute returns are defined as positive total returns,
    regardless of the direction of securities markets. To achieve
    its investment objective, the Fund, under normal market
    conditions, will invest primarily in securities of companies
    (both domestic and foreign) involved in publicly announced
    mergers, takeovers, tender offers and leveraged buyouts and, to
    a lesser extent, in corporate reorganizations involving stubs,
    spin-offs and liquidations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Note&#160;2&#160;&#151;
    Significant Accounting Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The preparation of financial statements in accordance with
    U.S.&#160;generally accepted accounting principles requires
    management to make estimates and assumptions that affect the
    reported amounts and disclosures in the financial statements.
    Actual results could differ from those estimates. The following
    is a summary of significant accounting policies followed by the
    Fund in the preparation of its financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Organization Expenses and Offering
    Costs:</I></B>&#160;&#160;Organization expenses relating to the
    Fund have been incurred and will be absorbed by the Investment
    Adviser in the amount of approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.
    Upon commencement of operations, the offering costs (other than
    the sales load) will be borne by the Fund and its shareholders
    and will be accounted for as a reduction to
    <FONT style="white-space: nowrap">paid-in-capital</FONT>
    up to $0.04&#160;per share including the Shares issued in the
    public offering. The Investment Adviser has agreed to pay the
    Fund&#146;s offering costs (other than the sales load) that
    exceed $0.04&#160;per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Federal Taxes:</I></B>&#160;&#160;The Fund intends to
    qualify for treatment as a regulated investment company under
    the Internal Revenue Code of 1986, as amended, and distribute
    all its taxable income. In addition, by
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    distributing in each calendar year substantially all of its net
    investment income, net capital gains and certain other amounts,
    if any, the Fund will not be subject to Federal income or excise
    tax.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Note&#160;3&#160;&#151;
    Investment Adviser and Other Transactions with
    Affiliates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has entered into an investment advisory agreement (the
    &#147;Advisory Agreement&#148;) with the Investment Adviser,
    where the Fund will pay the Investment Adviser an annual base
    rate of 0.50% of the Fund&#146;s average weekly managed assets
    payable monthly in arrears. Managed assets consist of all of the
    assets of the Fund without deduction for borrowings, repurchase
    transactions and other leveraging techniques, the liquidation
    value of any outstanding preferred shares or other liabilities
    except for certain ordinary course expenses. In addition, the
    Investment Adviser will be entitled to receive an annual
    performance fee as of the end of each calendar year if the total
    return of the Fund on its common shares during the calendar year
    in question exceeds the total return of the T-Bill Index
    compounded quarterly on the same dates as the Fund&#146;s
    quarterly ex-dividend dates (or at the end of the quarter if no
    dividend is paid) during the same period. If the Fund&#146;s
    total return for the calendar year equals the total return of
    the T-Bill Index for the same period plus 3.0% (300&#160;basis
    points), the Investment Adviser will receive a performance fee
    of 0.75% of the Fund&#146;s average weekly managed assets during
    the period. This performance fee will be increased by 0.01% (one
    basis point) for each 0.04% (four basis points) by which the
    Fund&#146;s total return during the period exceeds the T-Bill
    Index total return plus 3.0% (300 basis points), up to a maximum
    performance fee of 1.50% if the excess performance over the
    T-Bill Index is 6.0% (600&#160;basis points) or greater and will
    be decreased at the same rate for the amount by which the
    Fund&#146;s total return during the period is less than the
    T-Bill Index total return plus 3.0% (300 basis points), until no
    performance fee is payable if the Fund&#146;s total return is
    less than or equal to the T-Bill Index total return.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will assume its portion of the allocated cost of the
    Gabelli Funds&#146; Chief Compliance Officer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Note&#160;4&#160;&#151;
    Fund Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is authorized to issue an unlimited number of Shares,
    par value $0.001 per share. At December&#160;27, 2006 there were
    5,236&#160;Shares issued and outstanding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Note&#160;5&#160;&#151;
    Initial Public Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has filed a registration statement to commence a public
    offering of its Shares and intends to enter into an underwriting
    agreement with several underwriters, including
    Gabelli&#160;&#38; Company, Inc., an affiliate of the
    Fund&#146;s Investment Adviser. The Investment Adviser has
    agreed to pay certain fees to the underwriters in connection
    with the offering.
</DIV>
<A name='208'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">GENERAL
    INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Book-Entry-Only
    Issuance</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Depository Trust Company (&#147;DTC&#148;) will act as
    securities depository for the common shares offered pursuant to
    the Prospectus. The information in this section concerning DTC
    and DTC&#146;s book-entry system is based upon information
    obtained from DTC. The securities offered hereby initially will
    be issued only as fully-registered securities registered in the
    name of Cede&#160;&#38; Co. (as nominee for DTC). One or more
    fully-registered global security certificates initially will be
    issued, representing in the aggregate the total number of
    securities, and deposited with DTC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DTC is a limited-purpose trust company organized under the New
    York Banking Law, a &#147;banking organization&#148; within the
    meaning of the New York Banking Law, a member of the Federal
    Reserve System, a &#147;clearing corporation&#148; within the
    meaning of the New York Uniform Commercial Code and a
    &#147;clearing agency&#148; registered pursuant to the
    provisions of Section&#160;17A of the Securities Exchange Act of
    1934, as amended. DTC holds securities that its participants
    deposit with DTC. DTC also facilitates the settlement
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    among participants of securities transactions, such as transfers
    and pledges, in deposited securities through electronic
    computerized book-entry changes in participants&#146; accounts,
    thereby eliminating the need for physical movement of securities
    certificates. Direct DTC participants include securities brokers
    and dealers, banks, trust companies, clearing corporations and
    certain other organizations. Access to the DTC system is also
    available to others such as securities brokers and dealers,
    banks and trust companies that clear through or maintain a
    custodial relationship with a direct participant, either
    directly or indirectly through other entities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Purchases of securities within the DTC system must be made by or
    through direct participants, which will receive a credit for the
    securities on DTC&#146;s records. The ownership interest of each
    actual purchaser of a security, a beneficial owner, is in turn
    to be recorded on the direct or indirect participants&#146;
    records. Beneficial owners will not receive written confirmation
    from DTC of their purchases, but beneficial owners are expected
    to receive written confirmations providing details of the
    transactions, as well as periodic statements of their holdings,
    from the direct or indirect participants through which the
    beneficial owners purchased securities. Transfers of ownership
    interests in securities are to be accomplished by entries made
    on the books of participants acting on behalf of beneficial
    owners. Beneficial owners will not receive certificates
    representing their ownership interests in securities, except as
    provided herein.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DTC has no knowledge of the actual beneficial owners of the
    securities being offered pursuant to the Prospectus; DTC&#146;s
    records reflect only the identity of the direct participants to
    whose accounts such securities are credited, which may or may
    not be the beneficial owners. The participants will remain
    responsible for keeping account of their holdings on behalf of
    their customers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conveyance of notices and other communications by DTC to direct
    participants, by direct participants to indirect participants,
    and by direct participants and indirect participants to
    beneficial owners will be governed by arrangements among them,
    subject to any statutory or regulatory requirements as may be in
    effect from time to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Payments on the securities will be made to DTC. DTC&#146;s
    practice is to credit direct participants&#146; accounts on the
    relevant payment date in accordance with their respective
    holdings shown on DTC&#146;s records unless DTC has reason to
    believe that it will not receive payments on such payment date.
    Payments by participants to beneficial owners will be governed
    by standing instructions and customary practices and will be the
    responsibility of such participant and not of DTC or the Fund,
    subject to any statutory or regulatory requirements as may be in
    effect from time to time. Payment of distributions to DTC is the
    responsibility of the Fund, disbursement of such payments to
    direct participants is the responsibility of DTC, and
    disbursement of such payments to the beneficial owners is the
    responsibility of direct and indirect participants. Furthermore
    each beneficial owner must rely on the procedures of DTC to
    exercise any rights under the securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DTC may discontinue providing its services as securities
    depository with respect to the securities at any time by giving
    reasonable notice to the Fund. Under such circumstances, in the
    event that a successor securities depository is not obtained,
    certificates representing the securities will be printed and
    delivered.
</DIV>
<A name='209'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROXY
    VOTING PROCEDURES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has adopted the proxy voting procedures of the
    Investment Adviser and has directed the Investment Adviser to
    vote all proxies relating to the Fund&#146;s voting securities
    in accordance with such procedures. The proxy voting procedures
    are attached. They are also on file with the Securities and
    Exchange Commission and can be reviewed and copied at the
    Securities and Exchange Commission&#146;s Public Reference Room
    in Washington,&#160;D.C., and information on the operation of
    the Public Reference Room may be obtained by calling the
    Securities and Exchange Commission at
    <FONT style="white-space: nowrap">202-551-8090.</FONT>
    The proxy voting procedures are also available on the EDGAR
    Database on the Securities and Exchange Commission&#146;s
    Internet site
    <FONT style="white-space: nowrap">(http://www.sec.gov),</FONT>
    and copies of the proxy voting procedures may be obtained, after
    paying a duplicating fee, by electronic request at the following
    <FONT style="white-space: nowrap">E-mail</FONT>
    address: publicinfo@sec.gov, or by writing the Securities and
    Exchange Commission&#146;s Public Reference Section,
    Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='210'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CODE OF
    ETHICS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund and the Investment Adviser have adopted a code of
    ethics. This code of ethics sets forth restrictions on the
    trading activities of trustees/directors, officers and employees
    of the Fund, the Investment Adviser and their affiliates. For
    example, with certain exceptions, such persons may not purchase
    any security for which the Fund has a purchase or sale order
    pending, or for which such trade is under active consideration.
    In addition, with certain exceptions, those trustees/directors,
    officers and employees that are principally involved in
    investment decisions for client accounts are prohibited from
    purchasing or selling for their own account for a period of
    seven days a security that has been traded for a client&#146;s
    account, unless such trade is executed on more favorable terms
    for the client&#146;s account and it is determined that such
    trade will not adversely affect the client&#146;s account.
    Short-term trading by such trustee/directors, officers and
    employees for their own accounts in securities held by a Fund
    client&#146;s account is also restricted. The above examples are
    subject to certain exceptions and they do not represent all of
    the trading restrictions and policies set forth by the code of
    ethics. The code of ethics is on file with the Securities and
    Exchange Commission and can be reviewed and copied at the
    Securities and Exchange Commission&#146;s Public Reference Room
    in Washington,&#160;D.C., and information on the operation of
    the Public Reference Room may be obtained by calling the
    Securities and Exchange Commission at
    <FONT style="white-space: nowrap">202-551-8090.</FONT>
    The code of ethics is also available on the EDGAR Database on
    the Securities and Exchange Commission&#146;s Internet site
    (http://www.sec.gov), and copies of the code of ethics may be
    obtained, after paying a duplicating fee, by electronic request
    at the following
    <FONT style="white-space: nowrap">E-mail</FONT>
    address: publicinfo@sec.gov, or by writing the Securities and
    Exchange Commission&#146;s Public Reference Section,
    Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
</DIV>
<A name='211'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">JOINT
    CODE OF ETHICS FOR CHIEF EXECUTIVE AND SENIOR FINANCIAL
    OFFICERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund and the Investment Adviser have adopted a joint code of
    ethics that serves as a code of conduct. This code of ethics
    sets forth policies to guide the chief executive and senior
    financial officers in the performance of their duties. The code
    of ethics is on file with the Securities and Exchange Commission
    and can be reviewed and copied at the Securities and Exchange
    Commission&#146;s Public Reference Room in
    Washington,&#160;D.C., and information on the operation of the
    Public Reference Room may be obtained by calling the Securities
    and Exchange Commission at
    <FONT style="white-space: nowrap">202-551-8090.</FONT>
    The code of ethics is also available on the EDGAR Database on
    the Securities and Exchange Commission&#146;s Internet site
    (http://www.sec.gov), and copies of the code of ethics may be
    obtained, after paying a duplicating fee, by electronic request
    at the following
    <FONT style="white-space: nowrap">E-mail</FONT>
    address: publicinfo@sec.gov, or by writing the Securities and
    Exchange Commission&#146;s Public Reference Section,
    Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;C&#160;&#151;
    OTHER INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Financial
    Statements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exhibits</FONT></B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(a)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Agreement and Declaration of
    Trust(1)
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(b)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">By-laws of Registrant(1)
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(c)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(d)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of Specimen Share Certificate
    for the common shares
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(e)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Automatic Dividend Reinvestment
    and Voluntary Cash Purchase Plan of Registrant
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(f)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(g)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of Investment Advisory
    Agreement between Registrant and Gabelli Funds, LLC(1)
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(h)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of Purchase Agreement
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(i)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(j)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of Custodian Contract
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(k)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of Registrar, Transfer Agency
    and Service Agreement
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(l)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Opinion and Consent of Skadden,
    Arps, Slate, Meagher&#160;&#38; Flom LLP with respect to
    legality of shares
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(m)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(n)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">&#160;(i)&#160;Consent of
    Independent Auditors
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">(ii)&#160;Powers of Attorney
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(o)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(p)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(q)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">Not applicable
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">(r)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Codes of Ethics of the Registrant
    and Gabelli Funds, LLC
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">(1)&#160;Filed previously.
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    <FONT style="font-size: 10pt">(2)&#160;Filed herewith.
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Marketing
    Arrangements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Not
    Applicable.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Expenses of Issuance and Distribution</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the estimated expenses to be
    incurred in connection with the offering described in this
    Registration Statement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="89%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">NYSE listing fee
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    20,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">SEC registration fees
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21,400
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Printing/engraving expenses
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    200,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Accounting fees
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">NASD filing fees
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    20,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Transfer Agent fees
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Blue Sky fees
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Legal fees
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    350,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Miscellaneous
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    78,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Total
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    750,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Persons
    Controlled by or Under Common Control with the
    Registrant</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NONE
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Number of
    Holders of Securities as of December&#160;27, 2006</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="7%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title of Class</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Holders of Record</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Common Shares of Beneficial
    Interest
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Information regarding indemnification of directors and officers
    is incorporated by reference to the caption &#147;Management of
    the Fund-Indemnification of Officers and Trustees; Limitations
    on Liability&#148; in the Part&#160;B of this Registration
    Statement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Business
    and Other Connections of Investment Adviser</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Investment Adviser, a limited liability company organized
    under the laws of the State of New York, acts as investment
    adviser to the Registrant. The Registrant is fulfilling the
    requirement of this Item&#160;30 to provide a list of the
    officers and trustees of the Investment Adviser, together with
    information as to any other business, profession, vocation or
    employment of a substantial nature engaged in by the Investment
    Adviser or those officers and trustees during the past two
    years, by incorporating by reference the information contained
    in the Form&#160;ADV of the Investment Adviser filed with the
    Securities and Exchange Commission pursuant to the Investment
    Advisers Act of 1940 (Securities and Exchange Commission File
    <FONT style="white-space: nowrap">No.&#160;801-26202).</FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Location
    of Accounts and Records</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accounts and records of the Registrant are maintained in
    part at the office of the Investment Adviser at One Corporate
    Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422,</FONT>
    in part at the offices of the Custodian at 135 Santilli Highway,
    Everett, Massachusetts 02149, and located in part at the offices
    of the transfer agent and registrar, American Stock
    Transfer&#160;&#38; Trust Company at 59 Maiden Lane, New York,
    New York 10038, and in part at the Fund&#146;s
    <FONT style="white-space: nowrap">sub-administrator,</FONT>
    PFPC Inc., at 760 Moore Road, King of Prussia, Pennsylvania
    19406.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Management
    Services</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Not applicable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Undertakings</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.&#160;Registrant undertakes to suspend the offering of shares
    until this prospectus is amended, if subsequent to the effective
    date of this registration statement, its net asset value
    declines more than ten percent from its net asset value, as of
    the effective date of the registration statement or its net
    asset value increases to an amount greater than its net proceeds
    as stated in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.&#160;Not applicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.&#160;Not applicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.&#160;Not applicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.&#160;Registrant undertakes that, for the purpose of
    determining any liability under the 1933&#160;Act the
    information omitted from the form of prospectus filed as part of
    the Registration Statement in reliance upon Rule&#160;430A and
    contained in the form of prospectus filed by the Registrant
    pursuant to Rule&#160;497(h) will be deemed to be a part of the
    Registration Statement as of the time it was declared effective.
    Registrant undertakes that, for the purpose of determining any
    liability under the 1933&#160;Act, each post-effective amendment
    that contains a form of prospectus will be deemed to be a new
    Registration Statement relating to the securities offered
    therein, and the offering of such securities at that time will
    be deemed to be the initial bona fide offering thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    6.&#160;Registrant undertakes to send by first class mail or
    other means designed to ensure equally prompt delivery, within
    two business days of receipt of a written or oral request, any
    Statement of Additional Information constituting Part&#160;B of
    this Registration Statement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, as
    amended, and the Investment Company Act of 1940, this Registrant
    has duly caused this Registration Statement to be signed on its
    behalf by the undersigned, thereto duly authorized, in the City
    of Rye, State of New York, on the 27th&#160;day of December,
    2006.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    THE GABELLI GLOBAL DEAL FUND
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="1%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#160;
</TD>
    <TD align="left">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Bruce
    N. Alpert</FONT></DIV>
</TD>
</TR>

</TABLE>

<DIV style="font-size: 2pt; margin-left: 50%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=0 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="50%"></TD>
    <TD width="4%"></TD>
    <TD width="46%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="left">
    Bruce N. Alpert
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 54%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    President and Principal Executive Officer
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933 and
    the Investment Company Act of 1940, this Registration Statement
    has been signed below by the following persons in the capacities
    and on the dates set forth below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Agnes
    Mullady</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Agnes
    Mullady
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top" style="font-size: 10pt">
    Treasurer and <BR>
    Principal Financial Officer
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Anthony
    J. Colavita*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->James
    P. Conn*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Clarence
    A. Davis*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Mario
    d&#146;Urso*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Arthur
    V. Ferrara*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Mario
    J. Gabelli*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Michael
    J. Melarkey*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Edward
    T. Tokar*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">&#160;&#160;&#160;<FONT style="font-variant: SMALL-CAPS">&#160;</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Salvatore
    J. Zizza*
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    Trustee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    December&#160;27, 2006
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-size: 10pt">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Bruce
    N. Alpert</FONT></FONT></DIV><FONT style="font-size: 10pt"><BR>
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=208 iwidth=143 length=0 -->Bruce
    N. Alpert
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
    <FONT style="white-space: nowrap">Attorney-in-Fact</FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">*&#160;Pursuant to a Power of
    Attorney<BR>
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top" style="font-size: 10pt">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
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