Opinion
on the Financial Statements
We
have audited the accompanying statement of assets and liabilities, including the schedule of investments, of GAMCO Natural Resources,
Gold & Income Trust (the “Fund”) as of December 31, 2020, the related statement of operations for the year ended
December 31, 2020, the statement of changes in net assets attributable to common shareholders for each of the two years in the
period ended December 31, 2020, including the related notes, and the financial highlights for each of the five years in the period
ended December 31, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Fund as of December 31, 2020, the results of its operations
for the year then ended, the changes in its net assets attributable to common shareholders for each of the two years in the period
ended December 31, 2020 and the financial highlights for each of the five years in the period ended December 31, 2020 in conformity
with accounting principles generally accepted in the United States of America.
Basis
for Opinion
These
financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the
Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian and brokers;
when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable
basis for our opinion.
/s/PricewaterhouseCoopers
LLP
New York, New York
February 26, 2021
We
have served as the auditor of one or more investment companies in the Gabelli/GAMCO Fund Complex since 1986.
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Unaudited)
Summary
of Updated Information Regarding the Fund
The
following information in this annual report is a summary of certain information about the Fund and changes since the Fund’s
last annual report to shareholders as of December 31, 2019, for the fiscal year ended December 31, 2020. This information may
not reflect all of the changes that have occurred since you invested in the Fund.
Investment
Objective and Strategies
There
have been no material changes to the Fund’s investment objective or principal investment strategies since the Fund’s
last annual report to shareholders.
Investment
Objective
The
Fund’s primary investment objective is to provide a high level of current income from interest, dividends and option premiums.
The Fund’s secondary investment objective is to seek capital appreciation consistent with the Fund’s strategy and
its primary objective.
To
meet the objective of providing a high level of current income, the Fund intends to invest in income producing securities such
as equity securities, convertible securities and other securities and earn short-term gains from a strategy of writing covered
call options on equity securities in its portfolio. The Fund will seek dividend income through investments in equity securities
such as common stock or convertible preferred stock. The Fund will seek interest income through investments in convertible or
corporate bonds.
Under
normal market conditions, the Fund will attempt to achieve its objectives by investing at least 80% of its assets, which includes
the amount of any borrowings for investment purposes, in securities of companies principally engaged in the natural resources
and gold industries. The Fund will invest at least 25% of its assets in the securities of companies principally engaged in the
natural resources industry, which includes companies principally engaged in the exploration, production or distribution of natural
resources, such as metals (including both precious metals — such as silver and platinum — and base (i.e., non-precious)
metals — such as copper, lead, nickel and zinc), paper, food, agriculture, forestry products, water, gas, oil, sustainable
energy and other commodities as well as related transportation companies and equipment manufacturers (“Natural Resources
Companies”). Related transportation companies and equipment manufacturers, such as agriculture transportation vehicles and
farm equipment manufacturers, are vital components of the natural resource industry and are therefore included within the definition
of Natural Resources Companies. The Fund will invest at least 25% of its assets in the securities of companies principally engaged
in the gold industry, which includes companies principally engaged in the exploration, mining, fabrication, processing, distribution
or trading of gold or the financing, managing, controlling or operating of companies engaged in “gold-related” activities
(“Gold Companies”). Companies principally engaged in the financing, managing, controlling or operating of companies
engaged in “gold-related” activities include companies that own or receive royalties on the production of gold; such
companies are vital components of the gold industry and are therefore included within the definition of Gold Companies.
The
Fund may invest without limitation in the securities of domestic and foreign issuers. The Fund expects that its assets will usually
be invested in several countries. To the extent that the natural resources and gold industries are concentrated in any given geographic
region, such as Europe, North America or Asia, a relatively high proportion of the Fund’s assets may be invested in that
particular region.
Principally
engaged means a company that derives at least 50% of its revenues or earnings from or devotes at least 50% of its assets to the
indicated businesses.
Equity
securities may include common stocks, preferred stocks, convertible securities, warrants, depositary receipts and equity interests
in trusts and other entities. Other Fund investments may include investment companies, including exchange traded funds, securities
of issuers subject to reorganization, or other risk arbitrage investments, certain derivative instruments, debt (including obligations
of the U.S. government) and money market instruments.
As
part of its investment strategy, the Fund intends to provide current income from short-term gains earned through an option strategy
which will normally consist of writing (selling) call options on equity securities in its portfolio (“covered calls”),
but may, in amounts up to 15% of the Fund’s assets, consist of writing uncovered call options on securities not held by
the Fund and indices comprised of Natural Resources Companies or Gold Companies or exchange-traded funds comprised of such issuers
and writing put options on securities of Natural Resource Companies or Gold Companies. When the Fund sells a call option, it generates
current income from short-term gains in the form of the premium paid by the buyer of the call option, but the Fund forgoes the
opportunity to participate in any increase in the value of the underlying equity security above the exercise price of the option.
When the Fund sells a put option, it generates current income from short-term gains in the form of the premium paid by the buyer
of the put option, but the Fund will have the obligation to buy the underlying security at the exercise price if the price of
the security decreases below the exercise price of the option. Any premiums received by the Fund from writing options may result
in short-term capital gains.
The
Fund may invest up to 20% of its assets in “convertible securities,” i.e., securities (bonds, debentures, notes, stocks
and other similar
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
securities)
that are convertible into common stock or other equity securities, and “income securities,” i.e., nonconvertible debt
or equity securities having a history of regular payments or accrual of income to holders.
Under
normal market conditions, the Fund may invest up to 35% of its assets in fixed-income securities. Short-term discounted Treasury
Bills or certain short-term securities of U.S. government sponsored instrumentalities are not subject to this limitation. The
Fund has no requirements as to maturity or duration of its fixed-income investments, and the Fund does not target any particular
average duration or average maturity. The average duration and average maturity of the Fund’s fixed-income investments is
expected to vary.
The
Fund may invest up to 25% of its assets in “junk bonds” such as convertible debt securities (which generally are rated
lower than investment grade) and fixed-income securities that are rated lower than investment grade, or not rated but of similar
quality as determined by Gabelli Funds, LLC (the “Investment Adviser”).
No
assurance can be given that the Fund will achieve its investment objectives.
The
Fund is intended for investors seeking long term growth of capital. The Fund is not intended to provide a vehicle for those who
wish to exploit short term swings in the stock market.
Gabelli
Funds, LLC serves as the investment adviser to the Fund. The Investment Adviser’s investment philosophy with respect to
selecting investments in the natural resources and gold industries is to emphasize quality, value and favorable prospects for
growth, as determined by such factors as asset quality, balance sheet leverage, management ability, reserve life, cash flow, and
commodity hedging exposure. In addition, in making stock selections, the Investment Adviser looks for securities that it believes
may provide attractive yields as well as capital gains potential and that allow the Fund to generate current income from short-term
gains from writing covered calls on such stocks.
No
assurances can be given that the Fund’s objectives will be achieved. The Fund’s investment objectives and its policies
of investing at least 25% of its assets in normal circumstances in Natural Resources Companies and in Gold Companies are fundamental
policies that cannot be changed without the affirmative vote of a majority, as defined in the Investment Company Act of 1940,
as amended (the “1940 Act”), of the outstanding voting securities (voting together as a single class) of the Fund
(which for this purpose and under the 1940 Act means the lesser of (i) 67% of the shares represented at a meeting at which more
than 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding shares). If the Fund issues and has
outstanding preferred shares, the affirmative vote of the holders of a majority, as defined in the 1940 Act, of the outstanding
preferred shares of the Fund voting as a separate class (which for this purposes and under the 1940 Act means the lesser of (i)
67% of the preferred shares, as a single class, represented at a meeting at which more than 50% of the Fund’s outstanding
preferred shares are represented or (ii) more than 50% of the outstanding preferred shares) would also be required to change a
fundamental policy. Unless specifically stated as such, no other policy of the Fund is fundamental and each policy may be changed
by the Board without shareholder approval and the Fund will provide notice to shareholders of material changes. The Fund’s
policy to invest at least 80% of its total assets in in securities of companies principally engaged in the natural resources and
gold industries may be changed by the Board; however, if this policy changes, the Fund will provide shareholders at least 60 days’
written notice before implementation of the change in compliance with Securities and Exchange Commission (the “SEC”)
rules.
RISK
FACTORS AND SPECIAL CONSIDERATIONS
Investors
should consider the following risk factors and special considerations associated with investing in the Fund, each of which is
noted as either a “principal” risk or a “non-principal” risk:
General
Risks
Market
Risk (Principal). The market price of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably.
Securities may decline in value due to factors affecting securities markets generally or particular industries represented in
the securities markets. The value of a security may decline due to general market conditions which are not specifically related
to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings,
changes in interest or currency rates, adverse changes to credit markets or adverse investor sentiment generally. The value of
a security may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased
production costs and competitive conditions within an industry. During a general downturn in the securities markets, multiple
asset classes may decline in value simultaneously. Equity securities generally have greater price volatility than fixed income
securities. Credit ratings downgrades may also negatively affect securities held by the Fund. Even when markets perform well,
there is no assurance that the investments held by the Fund will increase in value along with the broader market.
In
addition, market risk includes the risk that geopolitical and other events will disrupt the economy on a national or global level.
For instance, war, terrorism, market manipulation, government defaults, government shutdowns, political changes or diplomatic
developments, public health emergencies (such as the spread of infectious diseases, pandemics and epidemics) and natural/environmental
disasters can all negatively impact the securities markets, which could cause the Fund to lose value. These events could reduce
consumer demand or economic output, result in market closures, travel restrictions or quarantines, and significantly adversely
impact the economy. The
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
current
contentious domestic political environment, as well as political and diplomatic events within the United States and abroad, such
as the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, has in the past resulted,
and may in the future result, in a government shutdown, which could have an adverse impact on the Fund’s investments and
operations. Additional and/or prolonged U.S. federal government shutdowns may affect investor and consumer confidence and may
adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. Governmental and quasi-governmental
authorities and regulators throughout the world have previously responded to serious economic disruptions with a variety of significant
fiscal and monetary policy changes, including but not limited to, direct capital infusions into companies, new monetary programs
and dramatically lower interest rates. An unexpected or sudden reversal of these policies, or the ineffectiveness of these policies,
could increase volatility in securities markets, which could adversely affect the Fund’s investments. Any market disruptions
could also prevent the Fund from executing advantageous investment decisions in a timely manner. To the extent that the Fund focuses
its investments in a region enduring geopolitical market disruption, it will face higher risks of loss, although the increasing
interconnectivity between global economies and financial markets can lead to events or conditions in one country, region or financial
market adversely impacting a different country, region or financial market. Thus, investors should closely monitor current market
conditions to determine whether the Fund meets their individual financial needs and tolerance for risk.
Current
market conditions may pose heightened risks with respect to the Fund’s investment in fixed income securities. Interest rates
in the U.S. are at or near historically low levels. Any interest rate increases in the future could cause the value of the Fund’s
assets to decrease. As such, fixed income securities markets may experience heightened levels of interest rate, volatility and
liquidity risk.
Exchanges
and securities markets may close early, close late or issue trading halts on specific securities or generally, which may result
in, among other things, the Fund being unable to buy or sell certain securities or financial instruments at an advantageous time
or accurately price its portfolio investments.
Coronavirus
(“COVID-19”) and Global Health Event Risk (Principal). As of the filing date of this report, there is an outbreak
of a highly contagious form of a novel coronavirus known as “COVID-19,” which the World Health Organization has declared
a global pandemic. The United States has declared a national emergency, and for the first time in its history, every state in
the United States is under a federal disaster declaration. Many states, including those in which we and our portfolio companies
operate, have issued orders requiring or encouraging the closure of non-essential businesses and/or requiring residents to stay
at home. The COVID-19 pandemic and preventative measures taken to contain or mitigate its spread have caused, and are continuing
to cause, business shutdowns, cancellations of and restrictions on events and travel, significant reductions in demand for certain
goods and services, reductions in and restrictions on business activity and financial transactions, supply chain interruptions
and overall economic and financial market instability both globally and in the United States. Such effects will likely continue
for the duration of the pandemic, which is uncertain, and for some period thereafter. Potential consequences of the current unprecedented
measures taken in response to the spread of COVID-19, and current market disruptions and volatility that may impact our business
include, but are not limited to:
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sudden,
unexpected and/or severe declines in the market price of our securities or net asset
value;
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inability
of the Fund to accurately or reliably value its portfolio;
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inability
of the Fund to comply with certain asset coverage ratios that would prevent the Fund
from paying dividends to our common shareholders;
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inability
of the Fund to pay any dividends and distributions to any class of equity holders;
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inability
of the Fund to service its debts to the extent the Fund has any notes or credit facilities
outstanding;
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inability
of the Fund to maintain its status as a RIC under the Code;
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potentially
severe, sudden and unexpected declines in the value of our investments;
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increased
risk of default or bankruptcy by the companies in which we invest;
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increased
risk of companies in which we invest being unable to weather an extended cessation of
normal economic activity and thereby impairing their ability to continue functioning
as a going concern;
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reduced
economic demand resulting from mass employee layoffs or furloughs in response to governmental
action taken to slow the spread of COVID-19, which could impact the continued viability
of the companies in which we invest;
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companies
in which we invest being disproportionally impacted by governmental action aimed at slowing
the spread of COVID-19;
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limited
availability of new investment opportunities; and
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general
threats to the Fund’s ability to continue investment operations and to operate
successfully as a non-diversified, closed-end investment company.
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GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
Despite
actions of the U.S. federal government and foreign governments, the uncertainty surrounding the COVID-19 pandemic and other factors
has contributed to significant volatility and declines in the global public equity markets and global debt capital markets, including
the market price of our common and preferred shares.
It
is virtually impossible to determine the ultimate impact of COVID-19 at this time. Accordingly, an investment in the Fund is subject
to an elevated degree of risk as compared to other market environments.
Total
Return Risk (Principal). The Fund utilizes several investment management techniques in an effort to generate positive
total return. The risks of these techniques, such as option writing, leverage, concentration in certain industries, and investing
in emerging markets, are described in the following paragraphs. Taken together these and other techniques represent a risk that
the Fund will experience a negative total return even in market environments that are generally positive and that the Fund’s
returns, both positive and negative, may be more volatile than if the Fund did not utilize these investment techniques.
Industry
Risk (Principal). The Fund’s investments will be concentrated in the natural resources and gold industries. Because
the Fund is concentrated in these industries, it may present more risks than if it were broadly diversified over numerous industries
and sectors of the economy. A downturn in the natural resources or gold industries would have a larger impact on the Fund than
on an investment company that does not concentrate in such industries
The
Fund invests in equity securities of Natural Resources Companies. A downturn in the indicated natural resources industries would
have a larger impact on the Fund than on an investment company that does not invest significantly in such industries. Such industries
can be significantly affected by the supply of and demand for the indicated commodities and related services, exploration and
production spending, government regulations, world events and economic conditions. For example, the COVID-19 pandemic has drastically
reduced the demand for various natural resources, including oil, and has drastically increased the price volatility of natural
resources and companies within the natural resources industry. An extended period of reduced (or negative) prices may significantly
lengthen the time that companies within the natural resources industries would need to recover after a stabilization of prices.
The metals (including both precious metals —such as silver and platinum — and base (i.e., non-precious) metals —
such as copper, lead, nickel and zinc), paper, food and agriculture, forestry products, water, gas, oil, sustainable energy and
other commodities industries can be significantly affected by events relating to international political developments, the success
of exploration projects, commodity prices, and tax and government regulations. The stock prices of Natural Resources Companies,
some of which prior to the COVID-19 pandemic had experienced substantial price increases in recent periods, may also experience
greater price volatility than other types of common stocks. The impact of COVID-19 on securities issued by Natural Resources Companies
was dramatic beginning in February 2020 and ultimately culminating in near-panic selling though the middle of March 2020. While
the securities of Natural Resources Companies have slowly been to recover, most are nowhere near their pre-March 2020 levels.
Securities issued by Natural Resources Companies are sensitive to changes in the prices of, and in supply and demand for, the
indicated commodities. The value of securities issued by Natural Resources Companies may be affected by changes in overall market
movements, changes in interest rates, or factors affecting a particular industry or commodity, such as weather, embargoes, tariffs,
policies of commodity cartels and international economic, political and regulatory developments. The Investment Adviser’s
judgments about trends in the prices of these securities and commodities may prove to be incorrect. It is possible that the performance
of securities of Natural Resources Companies may lag the performance of other industries or the broader market as a whole.
The
Fund also invests in equity securities of Gold Companies. Equity securities of Gold Companies may experience greater volatility
than companies not involved in the gold industry. Investments related to gold are considered speculative and are affected by a
variety of worldwide economic, financial and political factors. The price of gold may fluctuate sharply, which has experienced
substantial increases in recent periods, but which also may be subject to substantial decreases, over short periods of time due
to changes in inflation or expectations regarding inflation in various countries, the availability of supplies of gold, changes
in industrial and commercial demand, gold sales by governments, central banks or international agencies, investment speculation,
monetary and other economic policies of various governments and government restrictions on private ownership of gold. In times
of significant inflation or great economic uncertainty, Gold Companies have at times outperformed securities markets generally.
However, in times of stable economic growth, traditional equity and debt investments could offer greater appreciation potential
and the value of gold and the prices of equity securities of Gold Companies may be adversely affected, which could in turn affect
the Fund’s returns. Some Gold Companies hedge, to varying degrees, their exposure to declines in the price of gold. Such
hedging limits a Gold Company’s ability to benefit from future rises in the price of gold. The Investment Adviser’s
judgments about trends in the prices of securities of Gold Companies may prove to be incorrect. It is possible that the performance
of securities of Gold Companies may lag the performance of other industries or the broader market as a whole.
Supply
and Demand Risk. A decrease in the production of or exploration of, gold, metals (including both precious metals — such
as silver and platinum — and base (i.e., non-precious) metals — such as copper, lead, nickel and zinc), paper, food
and agriculture, forestry products, gas, oil and other commodities or a decrease in the volume of such commodities available for
transportation, mining, processing, storage or distribution may adversely impact the financial performance of the Fund’s
investments. Production declines and volume decreases could be caused by various factors, including catastrophic events affecting
production, depletion of resources, labor difficulties, environmental proceedings, increased regulations, equipment failures and
unexpected maintenance problems, import supply disruption, increased competition
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
from
alternative energy sources or commodity prices. For example, the COVID-19 pandemic has drastically reduced the demand for various
natural resources, including oil, and has drastically increased the price volatility of natural resources and companies within
the natural resources industry. An extended period of reduced (or negative) prices may significantly lengthen the time that companies
within the natural resources industries would need to recover after a stabilization of prices. Sustained declines in demand for
the indicated commodities could also adversely affect the financial performance of Natural Resources Companies and Gold Companies
over the long-term. Factors which could lead to a decline in demand include economic recession or other adverse economic conditions,
higher fuel taxes or governmental regulations, increases in fuel economy, consumer shifts to the use of alternative fuel sources,
changes in commodity prices, or weather.
Depletion
and Exploration Risk. Many Natural Resources Companies and Gold Companies are either engaged in the production or exploration
of particular commodities or are engaged in transporting, storing, distributing and processing such commodities. To maintain or
increase their revenue level, these companies or their customers need to maintain or expand their reserves through exploration
of new sources of supply, the development of existing sources, acquisitions, or long-term contracts to acquire reserves. The financial
performance of Natural Resources Companies and Gold Companies may be adversely affected if they, or the companies to whom they
provide products or services, are unable to cost effectively acquire additional products or reserves sufficient to replace the
natural decline.
Regulatory
Risk. Natural Resources Companies and Gold Companies may be subject to extensive government regulation in virtually every
aspect of their operations, including how facilities are constructed, maintained and operated, environmental and safety controls,
and in some cases the prices they may charge for the products and services they provide. Various governmental authorities have
the power to enforce compliance with these regulations and the permits issued under them, and violators are subject to administrative,
civil and criminal penalties, including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could
be enacted in the future, which would likely increase compliance costs and may adversely affect the financial performance of Natural
Resources Companies and Gold Companies.
Commodity
Pricing Risk. The operations and financial performance of Natural Resources Companies and Gold Companies may be directly affected
by the prices of the indicated commodities, especially those Natural Resources Companies and Gold Companies for whom the commodities
they own are significant assets. Commodity prices fluctuate for several reasons, including changes in market and economic conditions,
levels of domestic production, impact of governmental regulation and taxation, the availability of transportation systems and,
in the case of oil and gas companies in particular, conservation measures and the impact of weather. Volatility of commodity prices,
which may lead to a reduction in production or supply, may also negatively affect the performance of Natural Resources Companies
and Gold Companies which are solely involved in the transportation, processing, storing, distribution or marketing of commodities.
Volatility of commodity prices may also make it more difficult for Natural Resources Companies and Gold Companies to raise capital
to the extent the market perceives that their performance may be directly or indirectly tied to commodity prices.
Catastrophe
Risk. The operations of Natural Resources Companies and Gold Companies are subject to many hazards inherent in the development
of energy infrastructure and the acquisition, exploration, production, mining, processing (including fractionating), refining,
transportation (including trans-loading), storage, servicing or marketing of natural resources, including, but not limited to,
crude oil, refined products, petrochemicals, natural gas, natural gas liquids, coal, metals and renewable energy sources, including
damage to production equipment, pipelines, storage tanks or related equipment and surrounding properties caused by hurricanes,
tornadoes, floods, fires and other natural disasters or by acts of terrorism; inadvertent damage from construction or other equipment;
leaks of natural gas, natural gas liquids, crude oil, refined petroleum products or other hydrocarbons; and fires and explosions.
These risks could result in substantial losses due to personal injury or loss of life, severe damage to and destruction of property
and equipment and pollution or other environmental damage, and might result in the curtailment or suspension of their related
operations. Not all Natural Resources Companies or Gold Companies are fully insured against all risks inherent to their businesses.
If a significant accident or event occurs that is not fully insured, it could adversely affect a Natural Resources Company’s
or Gold Company’s operations and financial condition.
Climate
Change Risk. Climate change, and regulations intended to control its impact, may affect the value of the Fund’s investments.
The Fund’s current evaluation is that the near term effects of climate change and climate change regulation on the Fund’s
investments are not material, but the Fund cannot predict the long term impacts on the Fund or its investments from climate change
or related regulations. The Fund is subject to the special risks associated with climate change. Weather may play a role in the
cash flows of the Natural Resources Companies in which the Fund invests. Although many of the companies in this sector can reasonably
predict seasonal weather patterns, extreme weather conditions, such as those that may result from climate change, many be unpredictable.
The damage done by extreme weather could adversely affect the financial condition of such companies. Additionally, new or strengthened
regulations or legislation could increase the operating costs and/or decrease the revenues of Natural Resources Companies.
Interest
Rate Risk for Natural Resources Companies and Gold Companies. The prices of the equity and debt securities of the Natural
Resources Companies and Gold Companies that the Fund holds in its portfolio are susceptible in the short term to decline when
interest rates rise. Rising interest rates could limit the capital appreciation of securities of certain investments as a result
of the increased availability of alternative investments with yields comparable to those investments. Rising interest rates could
adversely affect the financial performance
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
of
Natural Resources Companies and Gold Companies generally by increasing their cost of capital. This may reduce their ability to
execute acquisitions or expansion projects in a cost-effective manner. The risk of rising interest rates may be more pronounced
because certain rates are near historical lows.
Risks
Associated with Covered Calls and Other Option Transactions (Principal). There are several risks associated with transactions
in options on securities. For example, there are significant differences between the securities and options markets that could
result in an imperfect correlation between these markets, causing a given covered call option transaction not to achieve its objectives.
A decision as to whether, when and how to use covered calls (or other options) involves the exercise of skill and judgment, and
even a well-conceived transaction may be unsuccessful because of market behavior or unexpected events. The use of options may
require the Fund to sell portfolio securities at inopportune times or for prices other than current market values, may limit the
amount of appreciation the Fund can realize on an investment, or may cause the Fund to hold a security it might otherwise sell.
As the writer of a covered call option, the Fund forgoes, during the option’s life, the opportunity to profit from increases
in the market value of the security covering the call option above the exercise price of the call option, but has retained the
risk of loss should the price of the underlying security decline. Although such loss would be offset in part by the option premium
received, in a situation in which the price of a particular stock on which the Fund has written a covered call option declines
rapidly and materially or in which prices in general on all or a substantial portion of the stocks on which the Fund has written
covered call options decline rapidly and materially, the Fund could sustain material depreciation or loss in its net assets to
the extent it does not sell the underlying securities (which may require it to terminate, offset or otherwise cover its option
position as well). The writer of an option has no control over the time when it may be required to fulfill its obligation as a
writer of the option. Once an option writer has received an exercise notice, it cannot effect a closing purchase transaction in
order to terminate its obligation under the option and must deliver the underlying security at the exercise price.
There
can be no assurance that a liquid market will exist when the Fund seeks to close out an option position. Reasons for the absence
of a liquid secondary market for exchange-traded options include the following: (i) there may be insufficient trading interest;
(ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts,
suspensions or other restrictions may be imposed with respect to particular classes or series of options; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the trading facilities of an exchange or the Options Clearing
Corporation (the “OCC”) may not be adequate to handle current trading volume; or (vi) the relevant exchange could,
for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular
class or series of options). If trading were discontinued, the secondary market on that exchange (or in that class or series of
options) would cease to exist. However, outstanding options on that exchange that had been issued by the OCC as a result of trades
on that exchange would continue to be exercisable in accordance with their terms. The Fund’s ability to terminate OTC options
may be more limited than with exchange-traded options and may involve the risk that counterparties participating in such transactions
will not fulfill their obligations. If the Fund were unable to close out a covered call option that it had written on a security,
it would not be able to sell the underlying security unless the option expired without exercise.
The
hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent that
the options markets close before the markets for the underlying securities, significant price and rate movements can take place
in the underlying markets that cannot be reflected in the options markets. Call options are marked to market daily and their value
will be affected by changes in the value of and dividend rates of the underlying common stocks, an increase in interest rates,
changes in the actual or perceived volatility of the stock market and the underlying common stocks and the remaining time to the
options’ expiration. Additionally, the exercise price of an option may be adjusted downward before the option’s expiration
as a result of the occurrence of certain corporate events affecting the underlying equity security, such as extraordinary dividends,
stock splits, merger or other extraordinary distributions or events. A reduction in the exercise price of an option would reduce
the Fund’s capital appreciation potential on the underlying security.
Limitation
on Covered Call Writing Risk. The number of covered call options the Fund can write is limited by the number of shares of
the corresponding common stock the Fund holds. Furthermore, the Fund’s covered call options and other options transactions
will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities on which such
options are traded. These limitations govern the maximum number of options in each class which may be written or purchased by
a single investor or group of investors acting in concert, regardless of whether the options are written or purchased on the same
or different exchanges, boards of trade or other trading facilities or are held or written in one or more accounts or through
one or more brokers. As a result, the number of covered call options that the Fund may write or purchase may be affected by options
written or purchased by it and other investment advisory clients of the Investment Adviser. An exchange, board of trade or other
trading facility may order the liquidation of positions found to be in excess of these limits, and it may impose certain other
sanctions.
Risks
Associated with Uncovered Calls (Principal). There are special risks associated with uncovered option writing which expose
the Fund to potentially significant loss. As the writer of an uncovered call option, the Fund has no risk of loss should the price
of the underlying security decline, but bears unlimited risk of loss should the price of the underlying security increase above
the exercise price until the Fund covers its exposure. As with writing uncovered calls, the risk of writing uncovered put options
is substantial. The writer of an uncovered put option bears a risk of loss if the value of the underlying instrument declines
below the exercise price. Such loss could be substantial if there is a significant decline in the value of the underlying instrument.
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
For
combination writing, where the Fund writes both a put and a call on the same underlying instrument, the potential risk is unlimited.
If a secondary market in options were to become unavailable, the Fund could not engage in losing transactions and would remain
obligated until expiration or assignment.
Equity
Risk (Principal). Investing in the Fund involves 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 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 OTC markets. The market value of these securities, like other market
investments, may move up or down, sometimes rapidly and unpredictably. The net asset value of the Fund may at any point in time
be less than the amount at the time the shareholder invested in the Fund, even after taking into account any reinvestment of distributions.
Common
Stock Risk (Principal). Common stock of an issuer in the Fund’s portfolio may decline in price for a variety of
reasons, including if the issuer fails to make anticipated dividend payments because, 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 as to
income and residual value to preferred stock, bonds and other debt instruments in a company’s capital structure, in terms
of priority to corporate income, 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.
Distribution
Risk for Equity Income Portfolio Securities (Principal). In selecting equity income securities in which the Fund will
invest, the Investment Adviser will consider the issuer’s history of making regular periodic distributions (i.e., dividends)
to its equity holders. An issuer’s history of paying dividends or other distributions, however, does not guarantee that
the issuer will continue to pay dividends or other distributions in the future. The dividend income stream associated with equity
income securities generally is not guaranteed and will be subordinate to payment obligations of the issuer on its debt and other
liabilities. Accordingly, an issuer may forgo paying dividends on its equity securities. In addition, because in most instances
issuers are not obligated to make periodic distributions to the holders of their equity securities, such distributions or dividends
generally may be discontinued at the issuer’s discretion.
Interest
Rate Risk (Principal). The primary risk associated with dividend- and interest-paying securities is interest rate risk.
A decrease in interest rates will generally result in an increase in the investment value of such securities, while increases
in interest rates will generally result in a decline in its investment value. This effect is generally more pronounced for fixed
rate securities than for securities whose income rate is periodically reset. The Fund may be subject to a greater risk of rising
interest rates due to the current period of historically low interest rates.
Additionally,
during periods of declining interest rates, the issuer of a preferred stock or fixed income security may be able to exercise an
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 stock and debt securities frequently have call features that allow the issuer to redeem the
securities prior to their stated maturities. An issuer may redeem such a security if the issuer can refinance it 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 prolong
the length of time the security pays a below market interest rate, increase the security’s duration and reduce the value
of the security. This is known as extension risk.
Preferred
Stock Risk (Principal). There are special risks associated with the Fund’s investing in preferred securities, including:
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Deferral.
Preferred securities may include provisions that permit the issuer, at its discretion,
to defer dividends or distributions for a stated period without any adverse consequences
to the issuer. If the Fund owns a preferred security that is deferring its dividends
or distributions, the Fund may be required to report income for tax purposes although
it has not yet received such income.
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Non-Cumulative
Dividends. Some preferred securities are non-cumulative, meaning that the dividends
do not accumulate and need not ever be paid. A portion of the portfolio may include investments
in non-cumulative preferred securities, whereby the issuer does not have an obligation
to make up any arrearages to its shareholders. Should an issuer of a non-cumulative preferred
security held by the Fund determine not to pay dividends or distributions on such security,
the Fund’s return from that security may be adversely affected. There is no assurance
that dividends or distributions on non-cumulative preferred securities in which the Fund
invests will be declared or otherwise made payable.
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Subordination.
Preferred securities are subordinated to bonds and other debt instruments in an issuer’s
capital structure in terms of priority to corporate income and liquidation payments,
and therefore will be subject to greater credit risk than more senior debt security instruments.
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Liquidity.
Preferred securities may be substantially less liquid than many other securities, such
as common stocks or U.S. government securities.
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GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
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Limited
Voting Rights. Generally, preferred security holders (such as the Fund) have no voting
rights with respect to the issuing company unless preferred dividends have been in arrears
for a specified number of periods, at which time the preferred security holders may be
entitled to elect a number of directors to the issuer’s board. Generally, once
all the arrearages have been paid, the preferred security holders no longer have voting
rights.
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Special
Redemption Rights. In certain varying circumstances, an issuer of preferred securities
may redeem the securities prior to a specified date. For instance, for certain types
of preferred securities, a redemption may be triggered by a change in U.S. federal income
tax or securities laws. A redemption by the issuer may negatively impact the return of
the security held by the Fund.
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Foreign
Securities Risk (Principal). Because many of the world’s Natural Resources Companies and Gold Companies are located
outside of the United States, the Fund may have a significant portion of its investments in securities that are traded in foreign
markets and that are not subject to the requirements of the U.S. securities laws, markets and accounting requirements (“Foreign
Securities”). Investments in the securities of foreign issuers involve certain considerations and risks not ordinarily associated
with investments in securities of domestic issuers and such securities may be more volatile than those of issuers located in the
United States. Foreign companies are not generally subject to uniform accounting, auditing and financial standards and requirements
comparable to those applicable to U.S. companies. The governments of certain countries may prohibit or impose substantial restrictions
on foreign investments in their capital markets or in certain industries, and there may be greater levels of price volatility
in foreign markets. 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, and it may be difficult to effect repatriation of capital invested in certain countries. 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. The dividend income the Fund receives from foreign securities may not be
eligible for the special tax treatment applicable to qualified dividend income. Moreover, certain equity investments in foreign
issuers classified as passive foreign investment companies may be subject to additional taxation risk.
There
may be less publicly available information about a foreign company than a U.S. company. Foreign Securities markets may have substantially
less volume than U.S. securities markets and some foreign company securities are less liquid than securities of otherwise comparable
U.S. 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 non-U.S. securities markets and the increased
costs of maintaining the custody of Foreign Securities.
Investments
in Foreign Securities will expose the Fund to the direct or indirect consequences of political, social or economic changes in
the countries that issue the securities or in which the issuers are located. Certain countries in which the Fund may invest have
historically experienced, and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations,
large amounts of external debt, balance of payments and trade difficulties and extreme poverty and unemployment. Many of these
countries are also characterized by political uncertainty and instability. The cost of servicing external debt will generally
be adversely affected by rising international interest rates because many external debt obligations bear interest at rates which
are adjusted based upon international interest rates.
The
Fund also may purchase sponsored ADRs or U.S. dollar-denominated securities of foreign issuers. ADRs are receipts issued by U.S.
banks or trust companies in respect of securities of foreign issuers held on deposit for use in the U.S. securities markets. While
ADRs may not necessarily be denominated in the same currency as the securities into which they may be converted, many of the risks
associated with Foreign Securities may also apply to ADRs. 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.
The
following provides more detail on certain pronounced risks with foreign investing:
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Foreign
Currency Risk. The Fund may invest in companies whose securities are denominated
or quoted in currencies other than U.S. dollars or have significant operations or markets
outside of the United States. In such instances, the Fund will be exposed to currency
risk, including the risk of fluctuations in the exchange rate between U.S. dollars (in
which the Fund’s shares are denominated) and such foreign currencies, the risk
of currency devaluations and the risks of non-exchangeability and blockage. As non-U.S.
securities may be purchased with and payable in currencies of countries other than the
U.S. dollar, the value of these assets measured in U.S. dollars may be affected favorably
or unfavorably by changes in currency rates and exchange control regulations. Fluctuations
in currency rates may adversely affect the ability of the Investment Adviser to acquire
such securities at advantageous prices and may also adversely affect the performance
of such assets.
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Certain
non-U.S. currencies, primarily in developing countries, have been devalued in the past
and might face devaluation in the
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GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
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future.
Currency devaluations generally have a significant and adverse impact on the devaluing
country’s economy in the short and intermediate term and on the financial condition
and results of companies’ operations in that country. Currency devaluations may
also be accompanied by significant declines in the values and liquidity of equity and
debt securities of affected governmental and private sector entities generally. To the
extent that affected companies have obligations denominated in currencies other than
the devalued currency, those companies may also have difficulty in meeting those obligations
under such circumstances, which in turn could have an adverse effect upon the value of
the Fund’s investments in such companies. There can be no assurance that current
or future developments with respect to foreign currency devaluations will not impair
the Fund’s investment flexibility, its ability to achieve its investment objectives
or the value of certain of its foreign currency-denominated investments.
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Tax
Consequences of Foreign Investing. The Fund’s transactions in foreign currencies,
foreign currency-denominated debt obligations and certain foreign currency options, futures
contracts and forward contracts (and similar instruments) may give rise to ordinary income
or loss to the extent such income or loss results from fluctuations in the value of the
foreign currency concerned. This treatment could increase or decrease the Fund’s
ordinary income distributions to you, and may cause some or all of the Fund’s previously
distributed income to be classified as a return of capital. In certain cases, the Fund
may make an election to treat gain or loss attributable to certain investments as capital
gain or loss.
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EMU
and Redenomination Risk. As the European debt crisis progressed, the possibility
of one or more Eurozone countries exiting the European Monetary Union (“EMU”),
or even the collapse of the Euro as a common currency, arose, creating significant volatility
at times in currency and financial markets generally. The effects of the collapse of
the Euro, or of the exit of one or more countries from the EMU, on the U.S. and global
economies and securities markets are impossible to predict and any such events could
have a significant adverse impact on the value and risk profile of the Fund’s portfolio.
Any partial or complete dissolution of the EMU could have significant adverse effects
on currency and financial markets, and on the values of the Fund’s portfolio investments.
If one or more EMU countries were to stop using the Euro as its primary currency, the
Fund’s investments in such countries may be redenominated into a different or newly
adopted currency. As a result, the value of those investments could decline significantly
and unpredictably. In addition, securities or other investments that are redenominated
may be subject to foreign currency risk, liquidity risk and valuation risk to a greater
extent than similar investments currently denominated in Euros. To the extent a currency
used for redenomination purposes is not specified in reSspect of certain EMU-related
investments, or should the Euro cease to be used entirely, the currency in which such
investments are denominated may be unclear, making such investments particularly difficult
to value or dispose of. The Fund may incur additional expenses to the extent it is required
to seek judicial or other clarification of the denomination or value of such securities.
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Emerging
Markets Risk. The considerations noted above in “Foreign Securities Risk”
are generally intensified for investments in emerging market countries. Emerging market
countries typically have economic and political systems that are less fully developed,
and can be expected to be less stable than those of more developed countries. Investing
in securities of companies in emerging markets may entail special risks relating to potential
political and economic instability and the risks of expropriation, nationalization, confiscation
or the imposition of restrictions on foreign investment, the lack of hedging instruments
and restrictions on repatriation of capital invested. Economies of such countries can
be subject to rapid and unpredictable rates of inflation or deflation. Emerging securities
markets are substantially smaller, less developed, less liquid and more volatile than
the major securities markets. The limited size of emerging securities markets and limited
trading volume compared to the volume of trading in U.S. securities could cause prices
to be erratic for reasons apart from factors that affect the quality of the securities.
For example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors’ perceptions, whether
or not based on fundamental analysis, may decrease the value and liquidity of portfolio
securities, especially in these markets. Other risks include high concentration of market
capitalization and trading volume in a small number of issuers representing a limited
number of industries, as well as a high concentration of investors and financial intermediaries;
overdependence on exports, including gold and natural resources exports, making these
economies vulnerable to changes in commodity prices; overburdened infrastructure and
obsolete or unseasoned financial systems; environmental problems; less developed legal
systems; and less reliable securities custodial services and settlement practices. Certain
emerging markets may also face other significant internal or external risks, including
the risk of war and civil unrest. For all of these reasons, investments in emerging markets
may be considered speculative.
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Eurozone
Risk. A number of countries in the EU have experienced, and may continue to experience,
severe economic and financial difficulties, increasing the risk of investing in the European
markets. In particular, many EU nations are susceptible to economic risks associated
with high levels of debt, notably due to investments in sovereign debt of countries such
as Greece, Italy, Spain, Portugal, and Ireland. As a result, financial markets in the
EU have been subject to increased volatility and declines in asset values and liquidity.
Responses to these financial problems by European governments, central banks, and others,
including austerity measures and reforms, may not work, may result in social unrest,
and may limit future growth and economic recovery or have other unintended consequences.
Further defaults or restructurings by governments and others of their debt could have
additional adverse effects on economies, financial markets, and asset valuations around
the world. Greece, Ireland, and Portugal have already received one or more “bailouts”
from other Eurozone member states, and it is unclear how much additional funding they
will require or if additional
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GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
Eurozone
member states will require bailouts in the future. One or more other countries may also abandon the euro and/or withdraw from
the EU, placing its currency and banking system in jeopardy. The impact of these actions, especially if they occur in a disorderly
fashion, is not clear but could be significant and far-reaching.
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Brexit
Risk. Pursuant to an agreement setting out the terms on which the United Kingdom
may leave the European Union (“Brexit”), the United Kingdom formally withdrew
from the EU, effective January 31, 2020, and entered into an 11-month transition period.
During this transition period, the United Kingdom is expected to renegotiate its political
and economic relationships with the EU and other countries. As a result of the original
referendum and other geopolitical developments leading to Brexit, the financial markets
experienced increased levels of volatility and it is likely that, in the near term, Brexit
will continue to bring about higher levels of uncertainty and volatility. During this
period of uncertainty, the negative impact on not only the United Kingdom and European
economies, but the broader global economy, could be significant, potentially resulting
in increased market and currency volatility (including volatility of the value of the
British pound sterling relative to the United States dollar and other currencies and
volatility in global currency markets generally), and illiquidity and lower economic
growth for companies that rely significantly on Europe for their business activities
and revenues. Additional risks associated with Brexit include macroeconomic risk to the
United Kingdom and European economies, impetus for further disintegration of the EU and
related political stresses (including those related to sentiment against cross border
capital movements and activities of investors like us), prejudice to financial services
businesses that are conducting business in the EU and which are based in the United Kingdom,
legal uncertainty regarding achievement of compliance with applicable financial and commercial
laws and regulations, and the unavailability of timely information as to expected legal,
tax and other regimes. Any further exits from the EU, or the possibility of such exits,
would likely cause additional market disruption globally and introduce new legal and
regulatory uncertainties.
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In
addition, certain European countries have recently experienced negative interest rates on certain fixed-income instruments. A
negative interest rate policy is an unconventional central bank monetary policy tool where nominal target interest rates are set
with a negative value (i.e., below zero percent) intended to help create self-sustaining growth in the local economy. Negative
interest rates may result in heightened market volatility and may detract from the Fund’s performance to the extent the
Fund is exposed to such interest rates. Among other things, these developments have adversely affected the value and exchange
rate of the euro and pound sterling, and may continue to significantly affect the economies of all EU countries, which in turn
may have a material adverse effect on the Fund’s investments in such countries, other countries that depend on EU countries
for significant amounts of trade or investment, or issuers with exposure to debt issued by certain EU countries.
To
the extent the Fund has exposure to European markets or to transactions tied to the value of the euro, these events could negatively
affect the value and liquidity of the Fund’s investments. All of these developments may continue to significantly affect
the economies of all EU countries, which in turn may have a material adverse effect on the Fund’s investments in such countries,
other countries that depend on EU countries for significant amounts of trade or investment, or issuers with exposure to debt issued
by certain EU countries.
Income
Risk (Principal). The income shareholders receive from the Fund is expected to be based primarily on income from short-term
gains that the Fund earns from its investment strategy of writing covered calls and dividends and other distributions received
from its investments. If the Fund’s covered call strategy fails to generate sufficient income from short-term gains or the
distribution rates or yields of the Fund’s holdings decrease, shareholders’ income from the Fund could decline.
Non-Investment
Grade Securities (Non-Principal). The Fund may invest in below investment-grade debt securities, also known as “high-yield”
securities or “junk bonds.” These securities, which may be preferred stock or debt, are predominantly speculative
and involve major risk exposure to adverse conditions. Securities that are rated lower than “BBB” by S&P or lower
than “Baa” by Moody’s (or unrated securities of comparable quality) are referred to in the financial press as
“junk bonds” or “high yield” securities and generally pay a premium above the yields of U.S. government
securities or 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:
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greater
credit risk and risk of default;
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potentially
greater sensitivity to general economic or industry conditions;
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potential
lack of attractive resale opportunities (illiquidity); and
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additional
expenses to seek recovery from issuers who default.
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In
addition, the market value of securities in lower grade categories is more volatile than that of higher quality securities, and
the markets in which such lower grade 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
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
purchase
and may also have the effect of limiting the ability of the Fund to sell securities at their fair value to respond to changes
in the economy or the financial markets.
Ratings
are relative, subjective and not absolute standards of quality. Securities ratings are based largely on the issuer’s historical
financial condition and the rating agencies’ analysis at the time of rating. Consequently, the rating assigned to any particular
security is not necessarily a reflection of the issuer’s current financial condition.
The
Fund may purchase securities of companies that are experiencing significant financial or business difficulties, including companies
involved in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant
financial returns to the Fund, they involve a substantial degree of risk. The level of analytical sophistication, both financial
and legal, necessary for successful investments in issuers experiencing significant business and financial difficulties is unusually
high. There can be no assurance that the Fund will correctly evaluate the value of the assets collateralizing its investments
or the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to
a portfolio investment, the Fund may lose all or part of its investment or may be required to accept collateral with a value less
than the amount of the Fund’s initial investment.
As
a part of its investments in non-investment grade securities, the Fund may invest in the securities of issuers in default. The
Fund invests in securities of issuers in default only when the Investment Adviser believes that such issuers will honor their
obligations and emerge from bankruptcy protection and that the value of such issuers’ 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.
In
addition to using statistical rating agencies and other sources, the Investment Adviser will also perform its own analysis of
issues in seeking investments that it believes to be underrated (and thus higher 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.
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 might change their ratings of a particular issue to reflect subsequent events on a timely basis.
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.
Fixed
income securities, including non-investment grade securities and comparable unrated securities, frequently have call or buy-back
features that permit their issuers to call or repurchase the securities from their holders, such as the Fund. If an issuer exercises
these rights during periods of declining interest rates, the Fund may have to replace the security with a lower yielding security,
thus resulting in a decreased return for the Fund.
The
market for non-investment grade and comparable unrated securities has at various times, particularly during times of economic
recession, experienced substantial reductions in market value and liquidity. Past recessions have adversely affected the ability
of certain issuers of such securities to repay principal and pay interest thereon. The market for those securities could react
in a similar fashion in the event of any future economic recession.
Interest
Rate Risk for Fixed Income Securities (Non-Principal). The primary risk associated with fixed income securities is interest
rate risk. A decrease in interest rates will generally result in an increase in the value of a fixed income security, while increases
in interest rates will generally result in a decline in its value. This effect is generally more pronounced for fixed rate securities
than for securities whose income rate is periodically reset. Market interest rates are currently significantly below historical
average rates and the Federal Reserve has begun to raise the Federal Funds rate, each of which results in more pronounced interest
rate risk in the current market environment.
Further,
while longer term fixed rate securities may pay higher interest rates than shorter term securities, longer term fixed rate securities,
like 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. An increase in market interest rates will also generally result in a decrease
in the price of any of the Fund’s outstanding preferred shares. For more risks associated with fixed income securities,
see “Investment Objectives and Policies —Additional Investment Policies” in the SAI.
U.S.
Government Securities and Credit Rating Downgrade Risk (Principal). The Fund may invest in direct obligations of the government
of the United States or its agencies. Obligations issued or guaranteed by the U.S. government, its agencies, authorities and instrumentalities
and backed by the full faith and credit of the U.S. guarantee only that principal and interest will be timely paid to holders
of the securities. These entities do not guarantee that the value of such obligations will increase, and, in fact, the market
values of such obligations may
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
fluctuate.
In addition, not all U.S. government securities are backed by the full faith and credit of the United States; some are the obligation
solely of the entity through which they are issued. There is no guarantee that the U.S. government would provide financial support
to its agencies and instrumentalities if not required to do so by law.
The
events surrounding negotiations regarding the U.S. federal government debt ceiling and deficit reduction could adversely affect
the Fund’s ability to achieve its investment objectives. In 2011, S&P lowered its long term sovereign credit rating
on the U.S. to “AA+” from “AAA.” The downgrade by S&P increased volatility in both stock and bond
markets, resulting in higher interest rates and higher Treasury yields, and increased the costs of all kinds of debt. Repeat occurrences
of similar events could have significant adverse effects on the U.S. economy generally and could result in significant adverse
impacts on issuers of securities held by the Fund itself. The Investment Adviser cannot predict the effects of similar events
in the future on the U.S. economy and securities markets or on the Fund’s portfolio. The Investment Adviser monitors developments
and seeks to manage the Fund’s portfolio in a manner consistent with achieving the Fund’s investment objectives, but
there can be no assurance that it will be successful in doing so and the Investment Adviser may not timely anticipate or manage
existing, new or additional risks, contingencies or developments.
Special
Risks Related to Investment in Derivatives (Principal). The Fund may participate in derivative transactions. Such transactions
entail certain execution, market, liquidity, hedging and tax risks. Participation in the options or futures markets, in currency
exchange transactions and in other derivatives 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’s prediction of movements in the direction
of the securities, foreign currency, interest rate or other referenced instruments or markets is inaccurate, the consequences
to the Fund may leave the Fund in a worse position than if it had not used such strategies. Risks inherent in the use of options,
foreign currency, futures contracts and options on futures contracts, securities indices and foreign currencies include:
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dependence
on the Investment Adviser’s ability to predict correctly movements in the direction
of the relevant measure;
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imperfect
correlation between the price of the derivative instrument and movements in the prices
of the referenced assets;
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the
fact that skills needed to use these strategies are different from those needed to select
portfolio securities;
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the
possible absence of a liquid secondary market for any particular instrument at any time;
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the
possible need to defer closing out certain positions to avoid adverse tax consequences;
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the
possible inability of the Fund to purchase or sell a security or instrument at a time
that otherwise would be favorable for it to do so, or the possible need for the Fund
to sell a security or instrument at a disadvantageous time due to a need for the Fund
to maintain “cover” or to segregate securities in connection with the hedging
techniques; and
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the
creditworthiness of counterparties.
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Options,
futures contracts, swaps 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, foreign securities. The value of such positions also could be adversely affected by (i) other complex foreign political,
legal and economic factors, (ii) lesser availability than in the United States of data on which to make trading decisions, (iii)
delays in the ability of the Fund to act upon economic events occurring in the foreign markets during non-business hours in the
United States, (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the
United States and (v) less trading volume. Exchanges on which options, futures, swaps and options on futures or swaps are traded
may impose limits on the positions that the Fund may take in certain circumstances.
Many
OTC derivatives are valued on the basis of dealers’ pricing of these instruments. However, the price at which dealers value
a particular derivative and the price which the same dealers would actually be willing to pay for such derivative should the Fund
wish or be forced to sell such position may be materially different. Such differences can result in an overstatement of the Fund’s
net asset value and may materially adversely affect the Fund in situations in which the Fund is required to sell derivative instruments.
Exchange-traded derivatives and OTC derivative transactions submitted for clearing through a central counterparty have become
subject to minimum initial and variation margin requirements set by the relevant clearinghouse, as well as possible margin requirements
mandated by the SEC or the CFTC. These regulators also have broad discretion to impose margin requirements on non-cleared OTC
derivatives. These margin requirements will increase the overall costs for the Fund.
While
hedging can reduce or eliminate losses, it can also reduce or eliminate gains. Hedges are sometimes subject to imperfect matching
between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will
be effective.
Derivatives
may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for
new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
time.
New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect
the value or performance of derivatives.
Counterparty
Risk (Principal). 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 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.
The
counterparty risk for cleared derivatives is generally lower than for uncleared OTC derivative transactions since generally a
clearing organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the
parties’ performance under the contract as each party to a trade looks only to the clearing organization for performance
of financial obligations under the derivative contract. However, there can be no assurance that a clearing organization, or its
members, will satisfy its obligations to the Fund, or that the Fund would be able to recover the full amount of assets deposited
on its behalf with the clearing organization in the event of the default by the clearing organization or the Fund’s clearing
broker. In addition, cleared derivative transactions benefit from daily marking-to-market and settlement, and segregation and
minimum capital requirements applicable to intermediaries. Uncleared OTC derivative transactions generally do not benefit from
such protections. This exposes the Fund to the risk that a counterparty will not settle a transaction in accordance with its terms
and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity
problem, thus causing the Fund to suffer a loss. Such “counterparty risk” is accentuated for contracts with longer
maturities where events may intervene to prevent settlement, or where the Fund has concentrated its transactions with a single
or small group of counterparties.
Failure
of Futures Commission Merchants and Clearing Organizations Risk (Principal). The Fund may deposit funds required to margin
open positions in the derivative instruments subject to the CEA with a clearing broker registered as a “futures commission
merchant” (“FCM”). The CEA requires an FCM to segregate all funds received from customers with respect to any
orders for the purchase or sale of U.S. domestic futures contracts and cleared swaps from the FCM’s proprietary assets.
Similarly, the CEA requires each FCM to hold in a separate secure account all funds received from customers with respect to any
orders for the purchase or sale of foreign futures contracts and segregate any such funds from the funds received with respect
to domestic futures contracts. However, all funds and other property received by a clearing broker from its customers are held
by the clearing broker on a commingled basis in an omnibus account and may be invested by the clearing broker in certain instruments
permitted under the applicable regulation. There is a risk that assets deposited by the Fund with any swaps or futures clearing
broker as margin for futures contracts may, in certain circumstances, be used to satisfy losses of other clients of the Fund’s
clearing broker. In addition, the assets of the Fund may not be fully protected in the event of the clearing broker’s bankruptcy,
as the Fund would be limited to recovering only a pro rata share of all available funds segregated on behalf of the clearing broker’s
combined domestic customer accounts.
Similarly,
the CEA requires a clearing organization approved by the CFTC as a derivatives clearing organization to segregate all funds and
other property received from a clearing member’s clients in connection with domestic futures, swaps and options contracts
from any funds held at the clearing organization to support the clearing member’s proprietary trading. Nevertheless, with
respect to futures and options contracts, a clearing organization may use assets of a non-defaulting customer held in an omnibus
account at the clearing organization to satisfy payment obligations of a defaulting customer of the clearing member to the clearing
organization. As a result, in the event of a default or the clearing broker’s other clients or the clearing broker’s
failure to extend own funds in connection with any such default, the Fund would not be able to recover the full amount of assets
deposited by the clearing broker on its behalf with the clearing organization.
Swaps
Risk (Principal). Swap agreements are two-party contracts entered into primarily by institutional investors for periods
ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the
returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross
returns to be exchanged or “swapped” between the parties are calculated with respect to a “notional amount,”
i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular
foreign currency, or in a “basket” of securities representing a particular index. The “notional amount”
of the swap agreement is only a fictive basis on which to calculate the obligations that the parties to a swap agreement have
agreed to exchange.
Historically,
swap transactions have been individually negotiated non-standardized transactions entered into in OTC markets and have not been
subject to the same type of government regulation as exchange-traded instruments. However, the OTC derivatives markets have recently
become subject to comprehensive statutes and regulations. In particular, in the U.S., the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the “Dodd-Frank Act”) requires that certain derivatives with U.S. persons must be executed
on a regulated market and a substantial portion of OTC derivatives must be submitted for clearing to regulated clearinghouses.
As a result, swap transactions entered into by the Fund may become subject to various requirements applicable to swaps under the
Dodd-Frank Act, including clearing, exchange-execution, reporting and recordkeeping requirements, which may make it more difficult
and costly for the Fund to enter into swap transactions and may also render certain strategies in which the Fund might otherwise
engage impossible or so costly that they will
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
no
longer be economical to implement. Furthermore, the number of counterparties that may be willing to enter into swap transactions
with the Fund may also be limited if the swap transactions with the Fund are subject to the swap regulation under the Dodd-Frank
Act.
Swap
agreements will tend to shift the Fund’s investment exposure from one type of investment to another. For example, if the
Fund agreed to pay fixed rates in exchange for floating rates while holding fixed-rate bonds, the swap would tend to decrease
the Fund’s exposure to long term interest rates. Caps and floors have an effect similar to buying or writing options. Depending
on how they are used, swap agreements may increase or decrease the overall volatility of the Fund’s investments and its
share price and yield. The most significant factor in the performance of swap agreements is the change in the specific interest
rate, currency, or other factors that determine the amounts of payments due to and from the Fund. If a swap agreement calls for
payments by the Fund, the Fund must be prepared to make such payments when due.
The
Fund may enter into swap agreements that would calculate the obligations of the parties to the agreements on a “net”
basis. Consequently, the Fund’s obligations (or rights) under a swap agreement will generally be equal only to the net amount
to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the
“net amount”). The Fund’s obligations under a swap agreement will be accrued daily (offset against any amounts
owing to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of liquid
assets in accordance with SEC staff positions on the subject.
The
Fund’s use of swap agreements may not be successful in furthering its investment objective, as the Investment Adviser may
not accurately predict whether certain types of investments are likely to produce greater returns than other investments. Moreover,
swap agreements involve the risk that the party with whom a Fund has entered into the swap will default on its obligation to pay
a Fund and the risk that a Fund will not be able to meet its obligations to pay the other party to the agreement. The Fund may
be able to eliminate its exposure under a swap agreement either by assignment or other disposition, or by entering into an offsetting
swap agreement with the same party or a similarly creditworthy party.
Futures
Contracts and Options on Futures (Principal). 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 for such transactions.
Options
Risk (Principal). 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.
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.
Short
Sales Risk (Principal). Short-selling involves selling securities which may or may not be owned and borrowing the same
securities for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. 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 and liquid securities) and the maintenance of collateral with its Custodian. Although the Fund’s
gain is limited to the price at which it sold the security short, its potential loss is theoretically unlimited.
Short-selling
necessarily involves certain additional risks. However, if the short seller does not own the securities sold short (an uncovered
short sale), the borrowed securities must be replaced by securities purchased at market prices in order to close out the short
position, and any appreciation in the price of the borrowed securities would result in a loss. Uncovered short sales expose the
Fund to the risk of uncapped losses until a position can be closed out due to the lack of an upper limit on the price to which
a security may rise. Purchasing securities to close out the short position can itself cause the price of the securities to rise
further, thereby exacerbating the loss. There is the risk that the securities borrowed by the Fund in connection with a short-sale
must be returned to the securities lender on short notice. If a request for return of borrowed securities occurs at a time when
other short-sellers of the security are receiving similar requests, a “short squeeze” can occur, and the Fund may
be compelled to replace borrowed securities previously sold short with purchases on the open market at the most disadvantageous
time, possibly at prices significantly in excess of the proceeds received at the time the securities were originally sold short.
In
September 2008, in response to spreading turmoil in the financial markets, the SEC temporarily banned short selling in the stocks
of numerous financial services companies, and also promulgated new disclosure requirements with respect to short positions held
by investment
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
managers.
The SEC’s temporary ban on short selling of such stocks has since expired, but should similar restrictions and/or additional
disclosure requirements be promulgated, especially if market turmoil occurs, the Fund may be forced to cover short positions more
quickly than otherwise intended and may suffer losses as a result. Such restrictions may also adversely affect the ability of
the Fund to execute its investment strategies generally. Similar emergency orders were also instituted in non-U.S. markets in
response to increased volatility. The Fund’s ability to engage in short sales is also restricted by various regulatory requirements
relating to short sales.
Leverage
Risk (Principal). The Fund may use financial leverage for investment purposes. A leveraged capital structure would create
special risks not associated with unleveraged funds that have a similar investment objectives and policies. These include the
possibility of greater loss and the likelihood of higher volatility of the net asset value of the Fund and the asset coverage
for any preferred shares or debt outstanding. Such volatility may increase the likelihood of the Fund having to sell investments
in order to meet its obligations to make distributions on the preferred shares or principal or interest payments on debt securities,
or to redeem preferred shares or repay debt, when it may be disadvantageous to do so. The use of leverage magnifies both the favorable
and unfavorable effects of price movements in the investments made by the Fund. To the extent the Fund is leveraged in its investment
operations, the Fund will be subject to substantial risk of loss. The Fund cannot assure that borrowings or the issuance of preferred
shares or notes will result in a higher yield or return to the holders of the common shares. Also, to the extent the Fund utilizes
leverage, a decline in net asset value could affect the ability of the Fund to make common share distributions and such a failure
to make distributions could result in the Fund ceasing to qualify as a RIC under the Code. For more information regarding the
risks of a leverage capital structure to holders of the Fund’s common shares, see “Risk Factors and Special Considerations
— Special Risks to Holders of Common Shares — Leverage Risk.”
Market
Discount Risk (Principal). The Fund is a non-diversified, closed-end management investment company. Whether investors
will realize gains or losses upon the sale of additional securities of the Fund will depend upon the market price of the securities
at the time of sale, which may be less or more than the Fund’s net asset value per share or the liquidation value of any
Fund preferred shares issued. Since the market price of any additional securities the Fund may issue will be affected by such
factors as the Fund’s dividend and distribution levels (which are in turn affected by expenses), dividend and distribution
stability, net asset value, market liquidity, the relative demand for and supply of such securities in the market, general market
and economic conditions and other factors beyond the control of the Fund, we cannot predict whether any such securities will trade
at, below or above net asset value or at, below or above their public offering price or at, below or above their liquidation value,
as applicable. For example, common shares of closed-end funds often trade at a discount to their net asset values and the Fund’s
common shares may trade at such a discount. This risk may be greater for investors expecting to sell their securities of the Fund
soon after the completion of a public offering for such securities. The risk of a market price discount from net asset value is
separate and in addition to the risk that net asset value itself may decline. The Fund’s securities are designed primarily
for long term investors, and investors in the shares should not view the Fund as a vehicle for trading purposes.
Long
Term Objective; Not a Complete Investment Program (Principal). The Fund is intended for investors seeking long term growth
of capital. The Fund is not meant to provide a vehicle for those who wish to play 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’s
investment objectives as well as the shareholder’s other investments when considering an investment in the Fund.
Portfolio
Turnover Risk (Principal). The investment policies of the Fund, including its strategy of writing covered call options
on securities in its portfolio, may result in portfolio turnover that is higher than that of many investment companies. Increased
portfolio turnover rates will result in higher costs from brokerage commissions, dealer-mark-ups and other transaction costs and
may also may decrease the after-tax return to individual investors in the Fund to the extent it results in a decrease in the portion
of the Fund’s distributions that is attributable to long-term capital gain.
Management
Risk (Principal). The Fund is subject to management risk because it is an actively managed portfolio. 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.
Non-Diversified
Status (Principal). The Fund is classified as a “non-diversified” 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.
Dependence
on Key Personnel (Principal). The Fund is dependent upon the expertise of Vincent Hugonnard-Roche as the sole option strategist
on the Fund’s portfolio management team. If the Fund were to lose the services of Mr. Roche, it could be temporarily adversely
affected until a suitable replacement could be found.
Market
Disruption and Geopolitical Risk (Principal). The occurrence of events similar to those in recent years, such as the aftermath
of the war in Iraq, instability in Afghanistan, Pakistan, Egypt, Libya, Syria, Russia, Ukraine, North Korea and the Middle East,
ongoing
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
epidemics
of infectious diseases in certain parts of the world, natural/environmental disasters, terrorist attacks in the United States
and around the world, social and political discord, debt crises (such as the Greek crisis), sovereign debt downgrades, increasingly
strained relations between the United States and a number of foreign countries, including traditional allies, such as certain
European countries, and historical adversaries, such as North Korea, Iran, China and Russia, and the international community generally,
new and continued political unrest in various countries, such as Venezuela, the exit or potential exit of one or more countries
from the EU or the EMU, continued changes in the balance of political power among and within the branches of the U.S. government,
government shutdowns, among others, may result in market volatility, may have long term effects on the U.S. and worldwide financial
markets, and may cause further economic uncertainties in the United States and worldwide.
Due
to a lapse in appropriations, a partial U.S. government shutdown occurred from December 22, 2018 through January 25, 2019. The
current contentious domestic political environment, as well as political and diplomatic events within the United States and abroad,
such as the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, may in the future
result in additional government shutdowns, which could have a material adverse effect on the Fund’s investments and operations.
In addition, the Fund’s ability to raise additional capital in the future through the sale of securities could be materially
affected by a government shutdown. Additional and/or prolonged U.S. government shutdowns may affect investor and consumer confidence
and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree.
As
previously discussed, Brexit has led to volatility in the financial markets of the UK and more broadly across Europe and may also
lead to weakening in consumer, corporate and financial confidence in such markets. The decision made in the British referendum
may also lead to a call for similar referendums in other European jurisdictions which may cause increased economic volatility
in the European and global markets. This mid- to long-term uncertainty may have an adverse effect on the economy generally and
on the ability of the Fund and its investments to execute its respective strategies and to receive attractive returns. In particular,
currency volatility may mean that the returns of the Fund and its investments are adversely affected by market movements and may
make it more difficult, or more expensive, for the Fund to execute prudent currency hedging policies. Potential decline in the
value of the British Pound and/or the Euro against other currencies, along with the potential downgrading of the UK’s sovereign
credit rating, may also have an impact on the performance of portfolio companies or investments located in the UK or Europe. In
light of the above, no definitive assessment can currently be made regarding the impact that Brexit will have on the Fund, its
investments or its organization more generally.
The
occurrence of any of the above events could have a significant adverse impact on the value and risk profile of the Fund’s
portfolio. The Fund does not know how long the securities markets may be impacted by similar events and cannot predict the effects
of similar events in the future on the U.S. economy and securities markets. There can be no assurance that similar events and
other market disruptions will not have other material and adverse implications.
Regulation
and Government Intervention Risk (Principal). The global financial crisis led the U.S. Government and certain foreign
governments to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial
markets that experienced extreme volatility, and in some cases a lack of liquidity, including through direct purchases of equity
and debt securities. Federal, state, and other governments, their regulatory agencies or self-regulatory organizations may take
actions that affect the regulation of the issuers in which the Fund invests. Legislation or regulation may also change the way
in which the Fund is regulated. Such legislation or regulation could limit or preclude the Fund’s ability to achieve its
investment objectives.
The
SEC and its staff are reportedly engaged in various initiatives and reviews that seek to improve and modernize the regulatory
structure governing investment companies. These efforts appear to be focused on risk identification and controls in various areas,
including embedded leverage through the use of derivatives and other trading practices, cybersecurity, liquidity, valuation, enhanced
regulatory and public reporting requirements and the evaluation of systemic risks. Any new rules, guidance or regulatory initiatives
resulting from these efforts could increase the Fund’s expenses and impact its returns to shareholders or, in the extreme
case, impact or limit the Fund’s use of various portfolio management strategies or techniques and adversely impact the Fund.
In
the aftermath of the global financial crisis, there appears to be a renewed popular, political and judicial focus on finance related
consumer protection. Financial institution practices are also subject to greater scrutiny and criticism generally. In the case
of transactions between financial institutions and the general public, there may be a greater tendency toward strict interpretation
of terms and legal rights in favor of the consuming public, particularly where there is a real or perceived disparity in risk
allocation and/or where consumers are perceived as not having had an opportunity to exercise informed consent to the transaction.
In the event of conflicting interests between retail investors holding common shares of a closed-end investment company such as
the Fund and a large financial institution, a court may similarly seek to strictly interpret terms and legal rights in favor of
retail investors.
The
Executive Branch has called for, and in certain instances has begun to implement, significant changes to U.S. trade, healthcare,
immigration, foreign, and government regulatory policy. In this regard, there is significant uncertainty with respect to legislation,
regulation and government policy at the federal level, as well as the state and local levels. Recent events have created a climate
of heightened uncertainty and introduced new and difficult-to-quantify macroeconomic and political risks with potentially far
reaching implications. There has been a corresponding meaningful increase in the uncertainty surrounding interest rates, inflation,
foreign exchange rates, trade volumes
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
and
fiscal and monetary policy. To the extent the U.S. Congress or the Executive Branch implements changes to U.S. policy, those changes
may impact, among other things, the U.S. and global economy, international trade and relations, unemployment, immigration, corporate
taxes, healthcare, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any,
of these changes to our business, they could adversely affect our business, financial condition, operating results and cash flows.
Until we know what policy changes are made and how those changes impact our business and the business of our competitors over
the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.
The
Fund may be affected by governmental action in ways that are not foreseeable, and there is a possibility that such actions could
have a significant adverse effect on the Fund and its ability to achieve its investment objectives.
Legislation
Risk (Non-Principal). At any time after the date of this report, legislation may be enacted that could negatively affect
the assets of the Fund. Legislation or regulation may change the way in which the Fund itself is regulated. The Investment Adviser
cannot predict the effects of any new governmental regulation that may be implemented and there can be no assurance that any new
governmental regulation will not adversely affect the Fund’s ability to achieve its investment objective.
Reliance
on Service Providers Risk (Non-Principal). The Fund must rely upon the performance of service providers to perform certain
functions, which may include functions that are integral to the Fund’s operations and financial performance. Failure by
any service provider to carry out its obligations to the Fund in accordance with the terms of its appointment, to exercise due
care and skill or to perform its obligations to the Fund at all as a result of insolvency, bankruptcy or other causes could have
a material adverse effect on the Fund’s performance and returns to shareholders. The termination of the Fund’s relationship
with any service provider, or any delay in appointing a replacement for such service provider, could materially disrupt the business
of the Fund and could have a material adverse effect on the Fund’s performance and returns to shareholders.
Cyber
Security Risk (Principal). The Fund and its service providers are susceptible to cyber security risks that include, among
other things, theft, unauthorized monitoring, release, misuse, loss, destruction or corruption of confidential and highly restricted
data; denial of service attacks; unauthorized access to relevant systems, compromises to networks or devices that the Fund and
its service providers use to service the Fund’s operations; or operational disruption or failures in the physical infrastructure
or operating systems that support the Fund and its service providers. Cyber attacks against or security breakdowns of the Fund
or its service providers may adversely impact the Fund and its shareholders, potentially resulting in, among other things, financial
losses; the inability of Fund shareholders to transact business and the Fund to process transactions; inability to calculate the
Fund’s NAV; violations of applicable privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement
or other compensation costs; and/or additional compliance costs. The Fund may incur additional costs for cyber security risk management
and remediation purposes. In addition, cyber security risks may also impact issuers of securities in which the Fund invests, which
may cause the Fund’s investment in such issuers to lose value. There can be no assurance that the Fund or its service providers
will not suffer losses relating to cyber attacks or other information security breaches in the future.
Misconduct
of Employees and of Service Providers Risk (Non-Principal). Misconduct or misrepresentations by employees of the Investment
Adviser or the Fund’s service providers could cause significant losses to the Fund. Employee misconduct may include binding
the Fund to transactions that exceed authorized limits or present unacceptable risks and authorized trading activities, concealing
unsuccessful trading activities (which in any case, may result in unknown and unmanaged risks or losses) or making misrepresentations
regarding any of the foregoing. Losses could also result from actions by the Fund’s service providers, including, without
limitation, failing to recognize trades and misappropriating assets. In addition, employees and service providers may improperly
use or disclose confidential information, which could result in litigation or serious financial harm, including limiting the Fund’s
business prospects or future marketing activities. Despite the Investment Adviser’s due diligence efforts, misconduct and
intentional misrepresentations may be undetected or not fully comprehended, thereby potentially undermining the Investment Adviser’s
due diligence efforts. As a result, no assurances can be given that the due diligence performed by the Investment Adviser will
identify or prevent any such misconduct.
Inflation
Risk (Non-Principal). 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’s shares and
distributions thereon can decline. In addition, during any periods of rising inflation, dividend rates of any debt securities
issued by the Fund would likely increase, which would tend to further reduce returns to common shareholders.
Deflation
Risk (Non-Principal). Deflation risk is the risk that prices throughout the economy decline over time, which may have
an adverse effect on the market valuation of companies, their assets and their revenues. In addition, deflation may have an adverse
effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value
of the Fund’s portfolio.
Restricted
and Illiquid Securities Risk (Principal). Unregistered securities are securities that cannot be sold publicly in the United
States without registration under the Securities Act. An illiquid investment is a security or other investment that cannot be
disposed of within seven days in the ordinary course of business at approximately the value at which the Fund has valued the investment.
Unregistered securities often can be resold only in privately negotiated transactions with a limited number of purchasers or in
a public offering registered
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
under
the Securities Act. Considerable delay could be encountered in either event and, unless otherwise contractually provided for,
the Fund’s proceeds upon sale may be reduced by the costs of registration or underwriting discounts. The difficulties and
delays associated with such transactions could result in the Fund’s inability to realize a favorable price upon disposition
of unregistered securities, and at times might make disposition of such securities impossible. The Fund may be unable to sell
illiquid investments when it desires to do so, resulting in the Fund obtaining a lower price or being required to retain the investment.
Illiquid investments generally must be valued at fair value, which is inherently less precise than utilizing market values for
liquid investments, and may lead to differences between the price a security is valued for determining the Fund’s net asset
value and the price the Fund actually receives upon sale.
Investment
Companies (Principal). The Fund may invest in the securities of other investment companies, including exchange traded
funds, to the extent permitted by law. To the extent the Fund invests in the common equity of investment companies, the Fund will
bear its ratable share of any such investment company’s expenses, including management fees. The Fund will also remain obligated
to pay management fees to the Investment Adviser with respect to the assets invested in the securities of other investment companies.
In these circumstances holders of the Fund’s common shares will be in effect subject to duplicative investment expenses.
Investment
Dilution Risk (Principal). The Fund’s investors do not have preemptive rights to any shares the Fund may issue in
the future. The Fund’s Declaration of Trust authorizes it to issue an unlimited number of shares. The Board may make certain
amendments to the Declaration of Trust. After an investor purchases shares, the Fund may sell additional shares or other classes
of shares in the future or issue equity interests in private offerings. To the extent the Fund issues additional equity interests
after an investor purchases its shares, such investor’s percentage ownership interest in the Fund will be diluted.
Legal,
Tax and Regulatory Risks (Principal). Legal, tax and regulatory changes could occur that may have material adverse effects
on the Fund. For example, the regulatory and tax environment for derivative instruments in which the Fund may participate is evolving,
and such changes in the regulation or taxation of derivative instruments may have material adverse effects on the value of derivative
instruments held by the Fund and the ability of the Fund to pursue its investment strategies
We
cannot assure you what percentage of the distributions paid on the Fund’s 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.
To
qualify for the favorable U.S. federal income tax treatment generally accorded to RICs, the Fund must, among other things, derive
in each taxable year at least 90% of its gross income from certain prescribed sources and distribute for each taxable year at
least 90% of its “investment company taxable income.” Statutory limitations on distributions on the common shares
if the Fund fails to satisfy the 1940 Act’s asset coverage requirements could jeopardize the Fund’s ability to meet
such distribution requirements. While the Fund presently intends to purchase or redeem notes or preferred shares, if any, to the
extent necessary in order to maintain compliance with such asset coverage requirements, there can be no assurance that such actions
can be effected in time to meet the Code requirements. If for any taxable year the Fund does not qualify as a RIC, all of its
taxable income for that year (including its net capital gain) would be subject to tax at regular corporate rates without any deduction
for distributions to shareholders, and such distributions would be taxable as ordinary dividends to the extent of the Fund’s
current and accumulated earnings and profits.
Anti-Takeover
Provisions (Principal). The Agreement and Declaration of Trust and By-Laws of the Fund 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 “Anti-Takeover
Provisions of the Fund’s Governing Documents.”
Special
Risks to Holders of Common Shares (Principal)
Dilution
Risk. If the Fund determines to conduct a rights offering to subscribe for common shares, holders of common shares may
experience dilution of the aggregate net asset value of their common shares. Such dilution will depend upon whether (i) such shareholders
participate in the rights offering and (ii) the Fund’s net asset value per common share is above or below the subscription
price on the expiration date of the rights offering.
Shareholders
who do not exercise their subscription rights may, at the completion of such an offering, own a smaller proportional interest
in the Fund than if they exercised their subscription rights. As a result of such an offering, a shareholder may experience dilution
in net asset value per share if the subscription price per share is below the net asset value per share on the expiration date.
If the subscription price per share is below the net asset value per share of the Fund’s shares on the expiration date,
a shareholder will experience an immediate dilution of the aggregate net asset value of such shareholder’s shares if the
shareholder does not participate in such an offering and the shareholder will experience a reduction in the net asset value per
share of such shareholder’s shares whether or not the shareholder participates in such an offering. The Fund cannot state
precisely the extent of this dilution (if any) if the shareholder does not exercise such shareholder’s subscription rights
because the Fund does not know what the net asset value per share will be when the offer expires or what proportion of the subscription
rights will be exercised.
Leverage
Risk. The Fund currently uses financial leverage for investment purposes by issuing preferred shares and is also permitted
to use other types of financial leverage, such as through the issuance of debt securities or additional preferred shares and borrowing
from
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
financial
institutions. As provided in the 1940 Act and subject to certain exceptions, the Fund may issue additional senior securities (which
may be stock, such as preferred shares, and/or securities representing debt) only if immediately after such issuance the value
of the Fund’s total assets, less certain ordinary course liabilities, exceeds 300% of the amount of the debt outstanding
and exceeds 200% of the amount of preferred shares and debt outstanding. As of June 30, 2020, the amount of leverage represented
approximately 20% of the Fund’s net assets.
The
Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having a similar investment
objective and policies. These include the possibility of greater loss and the likelihood of higher volatility of the net asset
value of the Fund and the asset coverage for the preferred shares. Such volatility may increase the likelihood of the Fund having
to sell investments in order to meet its obligations to make distributions on the preferred shares or principal or interest payments
on debt securities, or to redeem preferred shares or repay debt, when it may be disadvantageous to do so. The Fund’s use
of leverage may require it to sell portfolio investments at inopportune times in order to raise cash to redeem preferred shares
or otherwise de-leverage so as to maintain required asset coverage amounts or comply with the mandatory redemption terms of any
outstanding preferred shares. The use of leverage magnifies both the favorable and unfavorable effects of price movements in the
investments made by the Fund. To the extent that the Fund employs leverage in its investment operations, the Fund is subject to
substantial risk of loss. The Fund cannot assure you that borrowings or the issuance of preferred shares or notes will result
in a higher yield or return to the holders of the common shares. Also, since the Fund utilizes leverage, a decline in net asset
value could affect the ability of the Fund to make common share distributions and such a failure to make distributions could result
in the Fund ceasing to qualify as a RIC under the Code.
Any
decline in the net asset value of the Fund’s investments would be borne entirely by the holders of common shares. Therefore,
if the market value of the Fund’s portfolio declines, the leverage will result in a greater decrease in net asset value
to the holders of common shares than if the Fund were not leveraged. This greater net asset value decrease will also tend to cause
a greater decline in the market price for the common shares. The Fund might be in danger of failing to maintain the required asset
coverage of its borrowings, notes or preferred shares or of losing its ratings on its notes or preferred shares or, in an extreme
case, the Fund’s current investment income might not be sufficient to meet the distribution or interest requirements on
the borrowings, preferred shares or notes. In order to counteract such an event, the Fund might need to liquidate investments
in order to fund a redemption or repayment of some or all of the borrowings, preferred shares or notes.
|
●
|
Preferred
Share and Note Risk. The issuance of preferred shares or notes causes the net asset
value and market value of the common shares to become more volatile. If the dividend
rate on the preferred shares or the interest rate on the notes approaches the net rate
of return on the Fund’s investment portfolio, the benefit of leverage to the holders
of the common shares would be reduced. If the dividend rate on the preferred shares or
the interest rate on the notes plus the management fee annual rate of 1.00% exceeds the
net rate of return on the Fund’s portfolio, the leverage will result in a lower
rate of return to the holders of common shares than if the Fund had not issued preferred
shares or notes. If the Fund has insufficient investment income and gains, all or a portion
of the distributions to preferred shareholders or interest payments to note holders would
come from the common shareholders’ capital. Such distributions and interest payments
reduce the net assets attributable to common shareholders. The Prospectus Supplement
relating to any sale of preferred shares will set forth dividend rate on such preferred
shares.
|
In
addition, the Fund would pay (and the holders of common shares will bear) all costs and expenses relating to the issuance and
ongoing maintenance of the preferred shares or notes, including the advisory fees on the incremental assets attributable to the
preferred shares or notes.
Holders
of preferred shares and notes may have different interests than holders of common shares and may at times have disproportionate
influence over the Fund’s affairs. As provided in the 1940 Act and subject to certain exceptions, the Fund may issue senior
securities (which may be stock, such as preferred shares, and/or securities representing debt, such as notes) only if immediately
after such issuance the value of the Fund’s total assets, less certain ordinary course liabilities, exceeds 300% of the
amount of the debt outstanding and exceeds 200% of the amount of preferred shares and debt outstanding, which is referred to as
the “asset coverage” required by the 1940 Act. In the event the Fund fails to maintain an asset coverage of 100% for
any notes outstanding for certain periods of time, the 1940 Act requires that either an event of default be declared or that the
holders of such notes have the right to elect a majority of the Fund’s Trustees until asset coverage recovers to 110%. In
addition, holders of preferred shares, voting separately as a single class, have the right (subject to the rights of noteholders)
to elect two members of the Board at all times and in the event dividends become two full years in arrears would have the right
to elect a majority of the Trustees until such arrearage is completely eliminated. In addition, preferred shareholders have class
voting rights on certain matters, including changes in fundamental investment restrictions and conversion of the Fund to open-end
status, and accordingly can veto any such changes. Further, interest on notes will be payable when due as described in a Prospectus
Supplement and if the Fund does not pay interest when due, it will trigger an event of default and the Fund expects to be restricted
from declaring dividends and making other distributions with respect to common shares and preferred shares. Upon the occurrence
and continuance of an event of default, the holders of a majority in principal amount of a series of outstanding notes or the
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
trustee
will be able to declare the principal amount of that series of notes immediately due and payable upon written notice to the Fund.
The 1940 Act also generally restricts the Fund from declaring distributions on, or repurchasing, common or preferred shares unless
notes have an asset coverage of 300% (200% in the case of declaring distributions on preferred shares). The Fund’s common
shares are structurally subordinated as to income and residual value to any preferred shares or notes in the Fund’s capital
structure, in terms of priority to income and payment in liquidation.
Restrictions
imposed on the declarations and payment of dividends or other distributions to the holders of the Fund’s common shares and
preferred shares, both by the 1940 Act and by requirements imposed by rating agencies, might impair the Fund’s ability to
maintain its qualification as a RIC for U.S. federal income tax purposes. While the Fund intends to redeem its preferred shares
or notes to the extent necessary to enable the Fund to distribute its income as required to maintain its qualification as a RIC
under the Code, there can be no assurance that such actions can be effected in time to meet the Code requirements.
Portfolio
Guidelines of Rating Agencies for Preferred Shares and/or Credit Facility. In order to obtain and maintain attractive credit quality
ratings for preferred shares or notes, the Fund must comply with investment quality, diversification and other guidelines established
by the relevant rating agencies. These guidelines could affect portfolio decisions and may be more stringent than those imposed
by the 1940 Act. In the event that a rating on the Fund’s preferred shares or notes is lowered or withdrawn by the relevant
rating agency, the Fund may also be required to redeem all or part of its outstanding preferred shares or notes, and the common
shares of the Fund will lose the potential benefits associated with a leveraged capital structure.
The
Fund’s leveraged capital structure creates special risks not associated with unleveraged funds having a similar investment
objective and policies. These include the possibility of greater loss and the likelihood of higher volatility of the net asset
value of the Fund and the asset coverage for the preferred shares. Such volatility may increase the likelihood of the Fund having
to sell investments in order to meet its obligations to make distributions on the preferred shares or principal or interest payments
on debt securities, or to redeem preferred shares or repay debt, when it may be disadvantageous to do so. The Fund’s use
of leverage may require it to sell portfolio investments at inopportune times in order to raise cash to redeem preferred shares
or otherwise de-leverage so as to maintain required asset coverage amounts or comply with the mandatory redemption terms of any
outstanding preferred shares. The use of leverage magnifies both the favorable and unfavorable effects of price movements in the
investments made by the Fund. To the extent that the Fund employs leverage in its investment operations, the Fund is subject to
substantial risk of loss. The Fund cannot assure you that borrowings or the issuance of preferred shares or notes will result
in a higher yield or return to the holders of the common shares. Also, since the Fund utilizes leverage, a decline in net asset
value could affect the ability of the Fund to make common share distributions and such a failure to make distributions could result
in the Fund ceasing to qualify as a RIC under the Code.
Any
decline in the net asset value of the Fund’s investments would be borne entirely by the holders of common shares. Therefore,
if the market value of the Fund’s portfolio declines, the leverage will result in a greater decrease in net asset value
to the holders of common shares than if the Fund were not leveraged. This greater net asset value decrease will also tend to cause
a greater decline in the market price for the common shares. The Fund might be in danger of failing to maintain the required asset
coverage of its borrowings, notes or preferred shares or of losing its ratings on its notes or preferred shares or, in an extreme
case, the Fund’s current investment income might not be sufficient to meet the distribution or interest requirements on
the borrowings, preferred shares or notes. In order to counteract such an event, the Fund might need to liquidate investments
in order to fund a redemption or repayment of some or all of the borrowings, preferred shares or notes.
Preferred
Share and Note Risk. The issuance of preferred shares or notes causes the net asset value and market value of the common shares
to become more volatile. If the dividend rate on the preferred shares or the interest rate on the notes approaches the net rate
of return on the Fund’s investment portfolio, the benefit of leverage to the holders of the common shares would be reduced.
If the dividend rate on the preferred shares or the interest rate on the notes plus the management fee annual rate of 1.00% exceeds
the net rate of return on the Fund’s portfolio, the leverage will result in a lower rate of return to the holders of common
shares than if the Fund had not issued preferred shares or notes. If the Fund has insufficient investment income and gains, all
or a portion of the distributions to preferred shareholders or interest payments to note holders would come from the common shareholders’
capital. Such distributions and interest payments reduce the net assets attributable to common shareholders. The Prospectus Supplement
relating to any sale of preferred shares will set forth dividend rate on such preferred shares.
In
addition, the Fund would pay (and the holders of common shares will bear) all costs and expenses relating to the issuance and
ongoing maintenance of the preferred shares or notes, including the advisory fees on the incremental assets attributable to the
preferred shares or notes.
Holders
of preferred shares and notes may have different interests than holders of common shares and may at times have disproportionate
influence over the Fund’s affairs. As provided in the 1940 Act and subject to certain exceptions, the Fund may issue senior
securities (which may be stock, such as preferred shares, and/or securities representing debt, such as notes) only if immediately
after such issuance
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
the
value of the Fund’s total assets, less certain ordinary course liabilities, exceeds 300% of the amount of the debt outstanding
and exceeds 200% of the amount of preferred shares and debt outstanding, which is referred to as the “asset coverage”
required by the 1940 Act. In the event the Fund fails to maintain an asset coverage of 100% for any notes outstanding for certain
periods of time, the 1940 Act requires that either an event of default be declared or that the holders of such notes have the
right to elect a majority of the Fund’s Trustees until asset coverage recovers to 110%. In addition, holders of preferred
shares, voting separately as a single class, have the right (subject to the rights of noteholders) to elect two members of the
Board at all times and in the event dividends become two full years in arrears would have the right to elect a majority of the
Trustees until such arrearage is completely eliminated. In addition, preferred shareholders have class voting rights on certain
matters, including changes in fundamental investment restrictions and conversion of the Fund to open-end status, and accordingly
can veto any such changes. Further, interest on notes will be payable when due as described in a Prospectus Supplement and if
the Fund does not pay interest when due, it will trigger an event of default and the Fund expects to be restricted from declaring
dividends and making other distributions with respect to common shares and preferred shares. Upon the occurrence and continuance
of an event of default, the holders of a majority in principal amount of a series of outstanding notes or the trustee will be
able to declare the principal amount of that series of notes immediately due and payable upon written notice to the Fund. The
1940 Act also generally restricts the Fund from declaring distributions on, or repurchasing, common or preferred shares unless
notes have an asset coverage of 300% (200% in the case of declaring distributions on preferred shares). The Fund’s common
shares are structurally subordinated as to income and residual value to any preferred shares or notes in the Fund’s capital
structure, in terms of priority to income and payment in liquidation.
Restrictions
imposed on the declarations and payment of dividends or other distributions to the holders of the Fund’s common shares and
preferred shares, both by the 1940 Act and by requirements imposed by rating agencies, might impair the Fund’s ability to
maintain its qualification as a RIC for U.S. federal income tax purposes. While the Fund intends to redeem its preferred shares
or notes to the extent necessary to enable the Fund to distribute its income as required to maintain its qualification as a RIC
under the Code, there can be no assurance that such actions can be effected in time to meet the Code requirements.
Portfolio
Guidelines of Rating Agencies for Preferred Shares and/or Credit Facility. In order to obtain and maintain attractive credit
quality ratings for preferred shares or notes, the Fund must comply with investment quality, diversification and other guidelines
established by the relevant rating agencies. These guidelines could affect portfolio decisions and may be more stringent than
those imposed by the 1940 Act. In the event that a rating on the Fund’s preferred shares or notes is lowered or withdrawn
by the relevant rating agency, the Fund may also be required to redeem all or part of its outstanding preferred shares or notes,
and the common shares of the Fund will lose the potential benefits associated with a leveraged capital structure.
Market
Discount Risk. As described above in “ — General Risks — Market Discount Risk,” common shares of closed-end
funds often trade at a discount to their net asset values and the Fund’s common shares may trade at such a discount. This
risk may be greater for investors expecting to sell their common shares of the Fund soon after completion of a 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.
Special
Risks to Holders of Preferred Shares (Principal)
Illiquidity
Prior to Exchange Listing. Prior to an offering, there will be no public market for any series of fixed rate preferred
shares. In the event any series of fixed rate preferred shares are issued, we expect to apply to list such shares on a national
securities exchange, which will likely be the NYSE. However, during an initial period, which is not expected to exceed 30 days
after the date of its initial issuance, such shares may not be listed on any securities exchange. During such period, the underwriters
may make a market in such shares, though they will have no obligation to do so. Consequently, an investment in such shares may
be illiquid during such period.
Market
Price Fluctuation. Fixed rate preferred shares may trade at a premium to or discount from liquidation value for various
reasons, including changes in interest rates, perceived credit quality and other factors.
Special
Risks to Holders of Notes (Principal)
An
investment in our notes is subject to special risks. Our notes are not likely to be listed on an exchange or automated quotation
system. We cannot assure you that any market will exist for our notes or if a market does exist, whether it will provide holders
with liquidity. Broker-dealers that maintain a secondary trading market for the notes are not required to maintain this market,
and the Fund is not required to redeem notes if an attempted secondary market sale fails because of a lack of buyers. To the extent
that our notes trade, they may trade at a price either higher or lower than their principal amount depending on interest rates,
the rating (if any) on such notes and other factors.
Special
Risks of Notes to Holders of Preferred Shares (Principal)
As
provided in the 1940 Act, and subject to compliance with the Fund’s investment limitations, the Fund may issue notes. In
the event the Fund were to issue such securities, the Fund’s obligations to pay dividends or make distributions and, upon
liquidation of the Fund, liquidation payments in respect of its preferred shares would be subordinate to the Fund’s obligations
to make any principal and interest
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
payments
due and owing with respect to its outstanding notes. Accordingly, the Fund’s issuance of notes would have the effect of
creating special risks for the Fund’s preferred shareholders that would not be present in a capital structure that did not
include such securities.
Special
Risks to Holders of Notes and Preferred Shares (Principal)
Common
Share Repurchases. Repurchases of common shares by the Fund may reduce the net asset coverage of the notes and preferred
shares, which could adversely affect their liquidity or market prices.
Common
Share Distribution Policy. In the event the Fund does not generate a total return from dividends and interest received
and net realized capital gains in an amount at least equal to its distributions for a given year, the Fund expects that it would
return capital as part of its distribution. This would decrease the asset coverage per share with respect to the Fund’s
notes or preferred shares, which could adversely affect their liquidity or market prices.
For
the fiscal year ended December 31, 2020, the Fund made distributions of $0.48 per common share, all of which constituted a return
of capital. The composition of each distribution is estimated based on earnings as of the record date for the distribution. The
actual composition of each distribution may change based on the Fund’s investment activity through the end of the calendar
year.
Credit
Quality Ratings. The Fund may obtain credit quality ratings for its preferred shares or notes; however, it is not required
to do so and may issue preferred shares or notes without any rating. If rated, the Fund does not impose any minimum rating necessary
to issue such preferred shares or notes. In order to obtain and maintain attractive credit quality ratings for preferred shares
or notes, if desired, the Fund’s portfolio must satisfy over-collateralization tests established by the relevant rating
agencies. These tests are more difficult to satisfy to the extent the Fund’s portfolio securities are of lower credit quality,
longer maturity or not diversified by issuer and industry.
These
guidelines could affect portfolio decisions and may be more stringent than those imposed by the 1940 Act. A rating (if any) by
a rating agency does not eliminate or necessarily mitigate the risks of investing in our preferred shares or notes, and a rating
may not fully or accurately reflect all of the securities’ credit risks. A rating (if any) does not address liquidity or
any other market risks of the securities being rated. A rating agency could downgrade the rating of our notes or preferred shares,
which may make such securities less liquid in the secondary market. If a rating agency downgrades the rating assigned to notes
or preferred shares, we may alter our portfolio or redeem the preferred securities or notes under certain circumstances.
Special
Risk to Holders of Subscription Rights (Principal)
There
is a risk that changes in market conditions may result in the underlying common or preferred shares purchasable upon exercise
of the subscription rights being less attractive to investors at the conclusion of the subscription period. This may reduce or
eliminate the value of the subscription rights. Investors who receive subscription rights may find that there is no market to
sell rights they do not wish to exercise. If investors exercise only a portion of the rights, the number of common or preferred
shares issued may be reduced, and the common or preferred shares may trade at less favorable prices than larger offerings for
similar securities
Senior
Securities / leverage
As
of December 31, 2020, the Fund uses leverage through the issuance of preferred Shares.
Effects
of Leverage
The
following information is furnished in response to requirements of the SEC. It is designed to, among other things, illustrate the
effects of leverage through the use of senior securities, as that term is defined under Section 18 of the 1940 Act, on Common
Share total return, assuming investment portfolio total returns (consisting of income and changes in the value of investments
held in a Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. The table below reflects the Fund’s continued use of Preferred
Shares, as of December 31, 2020 as a percentage of total managed assets (including assets attributable to such leverage), the
estimated annual effective Preferred Shares dividend rate and interest expense rate payable by the Fund on such instruments (based
on market conditions as of December 31, 2020), and the annual return that the Fund’s portfolio must experience (net of expenses)
in order to cover such costs.
The
information below does not reflect the Fund’s use of certain other forms of economic leverage achieved through the use of
other instruments or transactions not considered to be senior securities under the 1940 Act, such as derivative instruments.
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
The
assumed investment portfolio returns in the table below are hypothetical figures and are not necessarily indicative of the investment
portfolio returns experienced or expected to be experienced by the Fund. Your actual returns may be greater or less than those
appearing below.
Preferred
Shares as a Percentage of Total Managed Assets (Including Assets Attributable to Preferred Shares and Reverse Repurchase Agreements).
|
|
|
19.90
|
%
|
Estimated
Annual Effective Preferred Share Dividend Rate
|
|
|
5.20
|
%
|
Annual
Return Fund Portfolio Must Experience (net of expenses) to Cover Estimated Annual Effective Preferred Share Dividend Rate
|
|
|
1.04
|
%
|
Common
Share Total Return for (10.00)% Assumed Portfolio Total Return
|
|
|
(14.03
|
%)
|
Common
Share Total Return for (5.00)% Assumed Portfolio Total Return
|
|
|
(7.79
|
%)
|
Common
Share Total Return for 0.00% Assumed Portfolio Total Return
|
|
|
(1.54
|
%)
|
Common
Share Total Return for 5.00% Assumed Portfolio Total Return
|
|
|
4.70
|
%
|
Common
Share Total Return for 10.00% Assumed Portfolio Total Return
|
|
|
10.95
|
%
|
Common
Shares total return is composed of two elements — the distributions paid by a Fund to holders of Common Shares (the amount
of which is largely determined by the net investment income of the Fund after paying dividend payments on any preferred Shares
issued by the Fund and expenses on any forms of leverage outstanding) and gains or losses on the value of the securities and other
instruments the Fund owns. As required by SEC rules, the table assumes that a Fund is more likely to suffer capital losses than
to enjoy capital appreciation. For example, to assume a total return of 0%, a Fund must assume that the income it receives on
its investments is entirely offset by losses in the value of those investments. This table reflects hypothetical performance of
the Fund’s portfolio and not the actual performance of the Fund’s Common Shares, the value of which is determined
by market forces and other factors. Should the Fund elect to add additional leverage to its portfolio, any benefits of such additional
leverage cannot be fully achieved until the proceeds resulting from the use of such leverage have been received by the Fund and
invested in accordance with the Fund’s investment objectives and policies. As noted above, the Fund’s willingness
to use additional leverage, and the extent to which leverage is used at any time, will depend on many factors, including, among
other things, the Fund’s assessment of the yield curve environment, interest rate trends, market conditions and other factors.
SUMMARY
OF FUND EXPENSES
The
following table is intended to assist you in understanding the various costs and expenses directly or indirectly associated with
investing in shares of common Shares, as a percentage of net assets attributable to common Shares. All expenses of the Fund will
be borne, directly or indirectly, by the common Shareholders. Amounts are for the current fiscal year.
Annual
Expenses
|
|
Percentages
of Net Assets
Attributable
to Common Shares
|
Management
Fees
|
|
|
1.25
|
%
|
Other
Expenses
|
|
|
0.64
|
%
|
Total
Annual Expenses
|
|
|
1.89
|
%
|
Dividends
on Preferred Shares
|
|
|
1.29
|
%
|
Total
Annual Expenses and Dividends on Preferred Shares
|
|
|
3.18
|
%
|
(1)
The Investment Adviser’s fee is 1.00% annually of the Fund’s average weekly net assets. The Fund’s average weekly
net assets will be deemed to be the average weekly value of the Fund’s total assets minus the sum of the Fund’s liabilities
(such liabilities exclude (i) the aggregate liquidation preference of outstanding shares of preferred Shares and accumulated dividends,
if any, on those shares and (ii) the liabilities for any money borrowed). Consequently, because the Fund has preferred Shares
outstanding, the investment management fees and other expenses as a percentage of net assets attributable to common Shares will
be higher than if the Fund did not utilize a leveraged capital structure.
(2)
Dividends on Preferred Shares represent the estimated annual distributions on the existing preferred Shares outstanding.
The
following example illustrates the expenses you would pay on a $1,000 investment in common Shares, assuming a 5% annual portfolio
total return.*
|
|
1
Year
|
|
|
3
Years
|
|
|
5
Years
|
|
|
10
Years
|
|
Total
Expenses Incurred
|
|
$
|
32
|
|
|
$
|
98
|
|
|
$
|
166
|
|
|
$
|
348
|
|
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
*The
example should not be considered a representation of future expenses. The example is based on Total Annual Expenses and Dividends
on Preferred Shares shown in the table above and assumes that the amounts set forth in the table do not change and that all distributions
are reinvested at net asset value. Actual expenses may be greater or less than those assumed. Moreover, the Fund’s actual
rate of return may be greater or less than the hypothetical 5% return shown in the example.
The
above example includes Dividends on Preferred Shares. If Dividends on Preferred Shares were not included in the example calculation,
the expenses would be as follows (based on the same assumptions as above).
|
|
1
Year
|
|
|
3
Years
|
|
|
5
Years
|
|
|
10
Years
|
|
Total
Expenses Incurred
|
|
$
|
19
|
|
|
$
|
59
|
|
|
$
|
102
|
|
|
$
|
221
|
|
Share
Price Data
The
following table sets forth for the quarters indicated, the high and low closing prices on the NYSE per share of the Fund’s
common Shares and the net asset value and the premium or discount from net asset value at which the common Shares was trading,
expressed as a percentage of net asset value, at each of the high and low NYSE closing prices provided.
|
|
Market
Price
|
|
|
Corresponding
NAV
|
|
|
Premium/(Discount)(a)
|
|
Quarter
End
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
March 31,
2019
|
|
$
|
5.68
|
|
|
$
|
5.10
|
|
|
$
|
6.18
|
|
|
$
|
5.74
|
|
|
|
(8.09
|
)%
|
|
|
(11.15
|
)%
|
June 30, 2019
|
|
$
|
5.82
|
|
|
$
|
5.29
|
|
|
$
|
6.18
|
|
|
$
|
5.83
|
|
|
|
(5.82
|
)%
|
|
|
(9.26
|
)%
|
September 30, 2019
|
|
$
|
5.98
|
|
|
$
|
5.60
|
|
|
$
|
6.08
|
|
|
$
|
6.08
|
|
|
|
(1.64
|
)%
|
|
|
(7.89
|
)%
|
December 31, 2019
|
|
$
|
6.16
|
|
|
$
|
5.68
|
|
|
$
|
5.92
|
|
|
$
|
5.87
|
|
|
|
4.21
|
%
|
|
|
(3.23
|
)%
|
March 31, 2020
|
|
$
|
6.19
|
|
|
$
|
2.49
|
|
|
$
|
6.10
|
|
|
$
|
3.74
|
|
|
|
1.47
|
%
|
|
|
(33.42
|
)%
|
June 30, 2020
|
|
$
|
4.86
|
|
|
$
|
3.75
|
|
|
$
|
5.37
|
|
|
$
|
4.33
|
|
|
|
(9.49
|
)%
|
|
|
(13.39
|
)%
|
September 30, 2020
|
|
$
|
5.30
|
|
|
$
|
4.75
|
|
|
$
|
6.06
|
|
|
$
|
5.64
|
|
|
|
(12.54
|
)%
|
|
|
(15.78
|
)%
|
December 31, 2020
|
|
$
|
5.22
|
|
|
$
|
4.65
|
|
|
$
|
5.94
|
|
|
$
|
5.53
|
|
|
|
(12.12
|
)%
|
|
|
(15.91
|
)%
|
|
(a)
|
Premium
and discount information is shown for the days when the Fund experienced its high and
low closing market prices, respectively, per share during the respective quarter.
|
Unresolved
Staff Comments
The
Fund does not believe that there are any material unresolved written comments, received 180 days or more before September 30,
2020 from the Staff of the SEC regarding any of the Fund’s periodic or current reports under the Securities Exchange Act
or the Investment Company Act, or its registration statement.
GAMCO
Natural Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
Financial
Highlights 2011-2015
|
|
Year
Ended
December 31, 2015
|
|
|
Year
Ended
December 31, 2014
|
|
|
Year
Ended
December 31, 2013
|
|
|
Year
Ended
December 31, 2012
|
|
|
Period
Ended
December 31, 2011(a)
|
|
Operating
Performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
asset value, beginning of year
|
|
$
|
8.75
|
|
|
$
|
10.91
|
|
|
$
|
13.93
|
|
|
$
|
15.06
|
|
|
$
|
19.06
|
(b)
|
Net
investment income
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.06
|
|
|
|
0.11
|
|
|
|
0.02
|
|
Net
realized and unrealized gain/(loss) on investments, written options,and foreign currency transactions
|
|
|
(1.44
|
)
|
|
|
(1.10
|
)
|
|
|
(1.58
|
)
|
|
|
0.44
|
|
|
|
(2.76
|
)
|
Total
from investment operations.
|
|
|
(1.42
|
)
|
|
|
(1.08
|
)
|
|
|
(1.52
|
)
|
|
|
0.55
|
|
|
|
(2.74
|
)
|
Distributions
to Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
|
(0.06
|
)
|
|
|
(0.10
|
)
|
|
|
(0.05
|
)
|
Net
realized short term gains.
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.05
|
)
|
|
|
(0.86
|
)
|
Net
realized long term gains
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.04
|
)
|
|
|
—
|
|
Return
of capital
|
|
|
(0.83
|
)
|
|
|
(1.06
|
)
|
|
|
(1.44
|
)
|
|
|
(0.49
|
)
|
|
|
(0.35
|
)
|
Total
distributions to common shareholders
|
|
|
(0.84
|
)
|
|
|
(1.08
|
)
|
|
|
(1.50
|
)
|
|
|
(1.68
|
)
|
|
|
(1.26
|
)
|
Fund
Share Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease)
in net asset value from common share transactions
|
|
|
0.00
|
(c)
|
|
|
—
|
|
|
|
(0.00
|
)(c)
|
|
|
0.00
|
(c)
|
|
|
0.00
|
(c)
|
Net
Asset Value, End of Year
|
|
$
|
6.49
|
|
|
$
|
8.75
|
|
|
$
|
10.91
|
|
|
$
|
13.93
|
|
|
$
|
15.06
|
|
NAV
total return†
|
|
|
(17.57
|
)%
|
|
|
(11.25
|
)%
|
|
|
(11.22
|
)%
|
|
|
3.90
|
%
|
|
|
(15.00
|
)%
|
Market
value, end of year
|
|
$
|
5.73
|
|
|
$
|
8.07
|
|
|
$
|
10.02
|
|
|
$
|
13.69
|
|
|
$
|
13.44
|
|
Investment
total return††
|
|
|
(19.98
|
)%
|
|
|
(10.48
|
)%
|
|
|
(16.78
|
)%
|
|
|
14.25
|
%
|
|
|
(27.46
|
)%
|
Ratios
to Average Net Assets and Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of year (in 000’s)
|
|
$
|
135,914
|
|
|
$
|
184,118
|
|
|
$
|
229,675
|
|
|
$
|
290,964
|
|
|
$
|
310,777
|
|
Ratio
of net investment income to average net assets
|
|
|
0.21
|
%
|
|
|
0.22
|
%
|
|
|
0.51
|
%
|
|
|
0.75
|
%
|
|
|
0.10
|
%
|
Ratio
of operating expenses to average net assets
|
|
|
1.36
|
%(d)
|
|
|
1.25
|
%
|
|
|
1.22
|
%
|
|
|
1.17
|
%
|
|
|
1.17
|
%
|
Portfolio
turnover rate
|
|
|
58.0
|
%
|
|
|
101.5
|
%
|
|
|
81.5
|
%
|
|
|
51.6
|
%
|
|
|
37.5
|
%
|
|
†
|
Based
on net asset value per share, adjusted for reinvestment of distributions at the net asset
value per share on the ex-dividend dates. Total return for a period of less than one
year is not annualized.
|
|
††
|
Based
on market value per share, adjusted for reinvestment of distributions at prices obtained
under the Fund’s dividend reinvestment plan. Total return for a period of less
than one year is not annualized.
|
|
(a)
|
The
Fund commenced investment operations on January 27, 2011.
|
|
(b)
|
The
beginning of period NAV reflects a $0.04 reduction of costs associated with the initial
public offering.
|
|
(c)
|
Amount
represents less than $0.005 per share.
|
|
(d)
|
The
Fund received credits from a designated broker who agreed to pay certain Fund operating
expenses. For the year ended December 31, 2015, there was no impact on the expense ratios.
|
Portfolio
Managers
There
were no changes to the portfolio management team during the year ended December 31, 2020.
AUTOMATIC
DIVIDEND
REINVESTMENT AND VOLUNTAR
CASH PURCHASE PLANS
Enrollment
in the Plan
It
is the policy of the GAMCO Natural Resources, Gold & Income Trust by Gabelli (the “Fund”) to automatically reinvest
dividends payable to common shareholders. As a “registered” shareholder you automatically become a participant in
the Fund’s Automatic Dividend Reinvestment Plan (the “Plan”). The Plan authorizes the Fund to credit common
shares to participants upon an income dividend or a capital gains distribution regardless of whether the shares are trading at
a discount or a premium to net asset value. All distributions to shareholders whose shares are registered in their own names will
be automatically reinvested pursuant to the Plan in additional shares of the Fund.
GAMCO Natural Resources,
Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
Plan participants may send their share certificates to American
Stock Transfer (“AST”) to be held in their dividend reinvestment account. Registered shareholders wishing to receive
their distributions in cash must submit this request in writing to:
GAMCO Natural Resources,
Gold & Income Trust
c/o American Stock Transfer
6201 15th Avenue
Brooklyn, NY 11219
Shareholders requesting this cash election
must include the shareholder’s name and address as they appear on the share certificate. Shareholders with additional questions
regarding the Plan or requesting a copy of the terms of the Plan, may contact AST at (888) 422-3262.
If your shares are held in the name of a
broker, bank, or nominee, you should contact such institution. If such institution is not participating in the Plan, your account
will be credited with a cash dividend. In order to participate in the Plan through such institution, it may be necessary for you
to have your shares taken out of “street name” and re-registered in your own name. Once registered in your own name
your distributions will be automatically reinvested. Certain brokers participate in the Plan. Shareholders holding shares in ”street
name“ at participating institutions will have dividends automatically reinvested. Shareholders wishing a cash dividend at
such institution must contact their broker to make this change.
The number of common shares distributed
to participants in the Plan in lieu of cash dividends is determined in the following manner. Under the Plan, whenever the market
price of the Fund’s 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 dividends or capital gains distribution, participants are issued common shares valued
at the greater of (i) the net asset value as most recently determined or (ii) 95% of the then current market price of the Fund’s
common shares. The valuation date is the dividend or distribution payment date or, if that date is not a New York Stock Exchange
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 common shares from the Fund valued at market price. If the Fund should declare
a dividend or capital gains distribution payable only in cash, AST will buy common shares in the open market, or on the New York
Stock Exchange, or elsewhere, for the participants’ accounts, except that AST will endeavor to terminate purchases in the
open market and cause the Fund to issue shares at net asset value if, following the commencement of such purchases, the market
value of the common shares exceeds the then current net asset value.
The automatic reinvestment of dividends
and capital gains distributions will not relieve participants of any income tax which may be payable on such distributions. A participant
in the Plan will be treated for federal income tax purposes as having received, on a dividend payment date, a dividend or distribution
in an amount equal to the cash the participant could have received instead of shares.
Voluntary Cash Purchase Plan
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Fund. In order to participate in the Voluntary Cash Purchase Plan, shareholders
must have their shares registered in their own name.
Participants in the Voluntary Cash Purchase
Plan have the option of making additional cash payments to AST for investments in the Fund’s common shares at the then current
market price. Shareholders may send an amount from $250 to $10,000. AST will use these funds to purchase shares in the open market
on or about the 1st and 15th of each month. AST will charge each shareholder who participates 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 any voluntary cash payments be sent to American Stock Transfer, 6201 15th Avenue, Brooklyn, NY 11219 such
that AST receives such payments approximately 10 days before the investment date. Funds not received at least five days before
the investment date shall be held for investment until the next purchase date. A payment may be withdrawn without charge if notice
is received by AST at least 48 hours before such payment is to be invested.
Shareholders wishing to liquidate shares
held at AST must do so in writing or by telephone. Please submit your request to the above mentioned address or telephone number.
Include in your request your name, address, and account number. The cost to liquidate shares is $1.00 per transaction as well as
the brokerage commission incurred. Brokerage charges are expected to be less than the usual brokerage charge for such transactions.
For more information regarding the Automatic Dividend Reinvestment
Plan and Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070 or by writing directly to the Fund.
The Fund reserves the right to amend or
terminate the Plan as applied to any voluntary cash payments made and any dividend or distribution paid subsequent to written notice
of the change sent to the members of the Plan at least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by AST on at least 90 days written notice to participants in the Plan.
GAMCO Natural
Resources, Gold & Income Trust
Additional Fund Information (Continued) (Unaudited)
The business and affairs of the Fund are
managed under the direction of the Fund’s Board of Trustees. Information pertaining to the Trustees and officers of the Fund
is set forth below. The Fund’s Statement of Additional Information includes additional information about the Fund’s
Trustees and is available without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to GAMCO Natural Resources,
Gold & Income Trust at One Corporate Center, Rye, NY 10580-1422.