Strategy. The Equity Income Fund seeks to achieve its investment objective through a combination of capital appreciation and current income by investing, under normal market conditions, at least 80% of its net assets in income producing equity securities of both U.S. and non-U.S. companies. Income producing equity securities include, for example, common stock, preferred stock, and convertible securities. In making stock selections, Gabelli Funds, LLC, the Equity Income Funds adviser (the Adviser), looks for securities of issuers with any capitalization size that have a better yield than the average of the Standard and Poors 500 Index (the S&P 500 Index), as well as capital gains potential. In selecting investments for the Equity Income Fund, the Adviser focuses on issuers that: ? … Show more… The Equity Income Fund seeks to achieve its investment objective through a combination of capital appreciation and current income by investing, under normal market conditions, at least 80% of its net assets in income producing equity securities of both U.S. and non-U.S. companies. Income producing equity securities include, for example, common stock, preferred stock, and convertible securities. In making stock selections, Gabelli Funds, LLC, the Equity Income Funds adviser (the Adviser), looks for securities of issuers with any capitalization size that have a better yield than the average of the Standard and Poors 500 Index (the S&P 500 Index), as well as capital gains potential. In selecting investments for the Equity Income Fund, the Adviser focuses on issuers that: ? have strong free cash flow and pay regular dividends ? have potential for long term earnings per share growth ? may be subject to a value catalyst, such as industry developments, regulatory changes, changes in management, sale or spin-off of a division, or the development of a profitable new business ? are well managed ? will benefit from sustainable long term economic dynamics, such as globalization of an issuers industry or an issuers increased focus on productivity or enhancement of services. The Adviser also believes preferred stock and convertible securities of selected companies offer opportunities for capital appreciation as well as periodic income and may invest a portion of the Equity Income Funds assets in such securities. This is particularly true in the case of companies that have performed below expectations. If a companys performance has been poor enough, its preferred stock and convertible debt securities will trade more like common stock than like a fixed income security and may result in above average appreciation if performance improves. Even if the credit quality of the company is not in question, the market price of the convertible security will reflect little or no element of conversion value if the price of its common stock has fallen substantially below the conversion price. This leads to the possibility of capital appreciation if the price of the common stock recovers. Show less