Following the in-flows and out-flows of the mutual fund industry offers insight as to what the general investor is up-to. As might be expected, in a poor economy, investment monies tend to flow out of mutual funds. This reality is the current trend with investment capital leaving funds. The astute investor, however, may see this as an opportunity. Not following the “herd” is how profit is made.
The opportunities are apparent and transparent, which is the advantage of mutual funds. An investor can easily see where and what is being invested in. Commodities, “blue-chips” or a blend is the choice. What is being invested in by the professionals is available for inspection. Some, however, are just more consistent than others. One needs to pick just as carefully as if stocks were to be picked. This is simply because the investor is picking a group of stocks that happens to be called a mutual fund. In either case, stock or fund, due diligence needs to be undertaken.
Gabelli Equity Trust, a diversified mutual fund, works to invest in a variety of sectors but tends to focus on energy and utilities. Other sectors of investment that the company invests in include telecommunications, cable, satellite and an array of diversified industrial companies.
In a general sense, one might refer to the company as directing its focus toward solid growth stocks. There is some, but very little, tendency toward risk in the stocks that the company invests in. Although there is a diversification of sectors and stocks, there is focus and direction in how the company has oriented its portfolio. Overall, the mix of assets invested in by the company has been consistently stable through recent times and continues to produce reliable returns. Fees have been slightly less in recent months but this is consistent with an overall trend in the mutual fund market.
For the most part, what needs to be paid attention to when it comes to Gabelli & Company Inc. is that it has come through a difficult economic time with little damage to profit. The company’s reporting seems to show that it has had little reduction in overall profit. This is not to suggest that there was not a small reduction but rather that the company has been following a pattern of investment that is stable and fairly resilient. One must understand that past results are not an indication of future returns but that Gabelli Equity Trust has been investing profitably in a difficult economic environment and paying a nice little bit of income on a reliable basis.