As filed with the Securities and Exchange Commission on April 28, 1995.
Registration No. 33-1719
Investment Company File No. 811-4494
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT No. / /
POST-EFFECTIVE AMENDMENT No. 12 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT No. 14 /X/
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THE GABELLI ASSET FUND
(Exact Name of Registrant as Specified in Charter)
One Corporate Center, Rye, New York 10580-1434
(Address of Principal Executive Office)
Registrant's Telephone Number (800) 422-3554
Bruce N. Alpert
Gabelli Funds, Inc.
One Corporate Center, Rye, New York 10580-1434
(Name and Address of Agent for Service)
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Copies to:
J. Hamilton Crawford, Jr., Esq. Richard T. Prins, Esq.
Gabelli Funds, Inc. Skadden, Arps, Slate, Meagher & Flom
One Corporate Center 919 Third Avenue
Rye, New York 10580-1434 New York, New York 10022
(212) 735-2000
It is proposed that this filing will become effective (check appropriate box):
/X/ immediately upon filing pursuant to paragraph (b); or
/ / on pursuant to paragraph (b); or
/ / 60 days after filing pursuant to paragraph (a); or
/ / on pursuant to paragraph (a) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.
------------
Registrant has registered an indefinite number of its shares of beneficial
interest pursuant to Rule 24f-2 under the Investment Company Act of 1940, and
has filed a Rule 24f-2 Notice for its most recent fiscal year ended December 31,
1994 on February 28, 1995.
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<PAGE>
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THE GABELLI ASSET FUND
CROSS REFERENCE SHEET
(as required by Rule 481(a))
N-1A Item No.
Part A Prospectus Caption(s) ...............................
Item 1. Cover Page ..........................................
Item 2. Table of Fees and Expenses ..........................
Item 3. Financial Highlights ................................
Item 4. The Fund and Its Investment Policies, Special
Investment Methods ..................................
Item 5. Management of the Fund ..............................
Item 6. General Information .................................
Item 7. Purchase of Shares ..................................
Item 8. Redemption of Shares ................................
Item 9. * ...................................................
Part B Statement of Additional Information
or Prospectus Caption(s) ...........................
Item 10. Cover Page ..........................................
Item 11. Cover Page ..........................................
Item 12. * ...................................................
Item 13. (Prospectus "The Fund and Its Investment
Policies") Investment Policies; Special
Investment Methods; Special Risks; Investment
Restrictions ........................................
Item 14. Trustees and Officers ...............................
Item 15. Trustees and Officers ...............................
Item 16. (Prospectus - "Management of the Fund");
Investment Adviser ..................................
Item 17. (Prospectus - "Management of the Fund");
Portfolio Transactions and Brokerage ................
Item l8. (Prospectus - "General Information"); General
Information .........................................
Item 19. (Prospectus - "Purchase of Shares,"
"Redemption of Shares"); Redemption of Shares;
Net Asset Value .....................................
Item 20. (Prospectus - "Dividends, Distribution and
Taxes") .............................................
Item 21. Distributor .........................................
Item 22. Investment Performance Information ..................
Item 23. Report of Independent Accountants; Financial
Statements ..........................................
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
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* Not applicable or negative answer.
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<PAGE>
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The
Gabelli
Asset
Fund
PROSPECTUS
May 1, 1995
GABELLI FUNDS, INC.
Investment Adviser
GABELLI & COMPANY, INC.
Distributor
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The Gabelli Asset Fund
One Corporate Center, Rye, New York 10580-1434
Telephone: 1-800-GABELLI (1-800-422-3554)
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PROSPECTUS
May 1, 1995
The Gabelli Asset Fund (the "Fund") is an open-end, no-load mutual fund, the
primary investment objective of which is growth of capital. Current income is a
secondary investment objective. See "The Fund and its Investment Policies".
---------
Shares of the Fund may be purchased without sales load at current per share net
asset value (see "Purchase of Shares"). There is no deferred sales or other
charge on the redemption of shares but the Fund may pay up to 0.25% of its
average net assets in any fiscal year for certain promotional and distribution
expenses and shareholder services (see "Distribution Plan"). For further
information, contact Gabelli & Company, Inc. at the address or telephone number
shown above.
---------
This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund. A Statement of Additional Information,
dated May 1, 1995, containing additional and more complete information about the
Fund (the "Additional Statement") has been filed with the Securities and
Exchange Commission and is incorporated in its entirety by reference into this
Prospectus. For a free copy, write or call the Fund at the telephone number or
address set forth above.
---------
This Prospectus should be retained by investors for future reference.
---------
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<PAGE>
TABLE OF FEES AND EXPENSES
Shareholder Transaction Expenses:
Maximum sales load imposed on purchases ............................ None
Contingent deferred sales charge upon redemption of investments .... None*
Annual Fund Operating Expenses:
(Percent of average net assets)
Management Fees .................................................... 1.00%
Distribution (Rule 12b-1) Expenses ................................. .15%
Other Expenses ..................................................... .14%
----
Total Operating Expenses ..................................... 1.29%
====
<TABLE>
<CAPTION>
Example:** 1 year 3 years 5 years 10 years
- ---------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming
a 5% annual return ................................................. $13 $42 $72 $158
</TABLE>
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* Broker-dealers holding a shareholder's shares may charge a fee for
redemptions.
** The amounts listed in this example should not be considered as
representative of past or future expenses and actual expenses may be
greater or less than those indicated. Moreover, while the example assumes a
5% annual return, the Fund's actual performance will vary and may result in
an actual return greater or less than 5%.
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The purpose of the foregoing table is to assist you in understanding the various
costs and expenses that an investor in the Fund would bear directly or
indirectly. The maximum level of distribution expenses which may be borne by the
Fund is 0.25% of its average net assets (see "Distribution Plan"). The expenses
shown are at the levels incurred during the past year and anticipated for the
current year.
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Management's Discussion and Analysis of the Fund's performance during the fiscal
year ended December 31, 1994 is included in the Fund's Annual Report to
Shareholders dated December 31, 1994. The Fund's Annual Report to Shareholders
may be obtained upon request and without charge by writing or calling the Fund
at the address or telephone number listed on the Prospectus cover.
FINANCIAL HIGHLIGHTS
(for a share outstanding throughout the period)
The following information, insofar as it pertains to each of the five years in
the period ended December 31, 1994, has been audited by Price Waterhouse LLP,
independent accountants, whose report appears in the Statement of Additional
Information. This table should be read in conjunction with the Financial
Statements and related notes that are included in the Additional Statement.
<TABLE>
<CAPTION>
Year Ended December, March 3, 1986
----------------------------------------------------------------------------- Commencement of
Operations) to
1994 1993 1992 1991 1990 1989 1988 1987 December 31, 1986
-------- -------- ------- -------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share of beneficial interest
outstanding throughout the period)
Net asset value, beginning of
period .......................... $ 23.30 $ 19.88 $ 17.96 $ 15.63 $ 17.26 $ 14.69 $ 12.61 $ 11.28 $ 10.00
-------- -------- ------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income .......... 0.26 0.17 0.26 0.39 0.76 0.55 0.24 0.14 0.10
Net realized and unrealized gain
on investments ............... (0.30) 4.18 2.41 2.45 (1.62) 3.30 3.45 1.69 1.18
-------- -------- ------- -------- -------- -------- -------- -------- --------
Total from investment
operations ................... (0.04) 4.35 2.67 2.84 (0.86) 3.85 3.69 1.83 1.28
Dividends from net investment
income ...................... (0.25) (0.17) (0.25) (0.39) (0.77) (0.56) (0.38) (0.09) --
Less Distributions:
Distributions from net realized
gains on investments ......... (0.76) (0.76) (0.50) (0.12) -- (0.72) (1.23) (0.41) --
-------- -------- ------- -------- -------- -------- -------- -------- --------
Total distributions ............ (1.05) (0.93) (0.75) (0.51) (0.77) (1.28) (1.61) (0.50) 0.00
Net asset value, end of period . $ 22.21 $ 23.30 $ 19.88 $ 17.96 $ 15.63 $ 17.26 $ 14.69 $ 12.61 $ 11.28
======== ======== ======= ======== ======== ======== ======== ======== ========
Total Return+ .................... (0.1%) 21.8% 14.9% 18.1% (5.0%) 26.2% 31.1% 16.2% 12.8%
Net assets, end of period (000's
omitted) ....................... $982,250 $945,408 632,575 $483,865 $342,710 $359,443 $143,050 $ 76,810 $ 48,911
======== ======== ======= ======== ======== ======== ======== ======== ========
Significant Ratios:
Investment income -- net to
average net assets ........... 1.10% 0.82% 1.42% 2.34% 4.51% 4.17% 2.04% 1.19% 1.87%*
Operating expenses -- net to
average net assets ........... 1.29% 1.31% 1.31% 1.30% 1.20% 1.26% 1.31% 1.26% 1.67%*
Portfolio turnover ............. 18.74% 16.04% 14.39% 20.13% 55.71% 49.34% 47.26% 89.94% 126.61%
- ----------
* Annualized
+ Total return is calculated assuming a purchase of shares at the net asset
value on the first day and a sale on the last day of each year reported and
includes reinvestment of dividends and distributions.
</TABLE>
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2
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THE FUND AND ITS INVESTMENT POLICIES
The Fund is an open-end, no-load, diversified management investment company
organized as a Massachusetts Business Trust on November 25, 1985. The primary
investment objective of the Fund is to seek growth of capital and investments
will be made based on management's perception of their potential for capital
appreciation. Current income, to the extent it may affect potential growth of
capital, is a secondary objective. There is no assurance that the Fund will
achieve its investment objectives. The investment objectives of the Fund
together with the percentage restrictions set forth below under "Special
Investment Methods" and its investment restrictions which are described in the
Additional Statement, are fundamental and may not be changed without shareholder
approval. Its other investment policies indicated below may be changed by the
Board of Trustees without shareholder approval.
The Fund expects that its assets will be invested primarily in a diversified
portfolio of readily marketable equity securities (including common stock,
preferred stocks and securities representing the right to acquire stocks), at
least 80% of which will be listed on a nationally recognized securities exchange
or traded on the NASDAQ National Market System of the National Association of
Securities Dealers. Gabelli Funds, Inc. (the "Adviser") will invest in companies
that, in the public market, are selling at a significant discount to their
private market value ("PMV") or that value the Adviser believes an informed
industrialist would be willing to pay to acquire companies with similar
characteristics. Factors considered by the Adviser include price, earnings
expectations, earnings and price histories, balance sheet characteristics and
perceived management skills. Also considered are changes in economic and
political outlooks as well as individual corporate developments. Fund
investments which lose their perceived value relative to other investment
alternatives are sold.
When deemed appropriate by the Adviser, the Fund may without limit invest
temporarily in defensive securities such as preferred stocks, high grade debt
securities, obligations of the U.S. Government, its agencies or
instrumentalities, or in short-term (maturing less than one year) money market
instruments, including commercial paper rated A-1 or better by Standard & Poor's
Rating Group ("S&P") or P-1 or better by Moody's Investors Service, Inc.
("Moody's").
It is the Adviser's expectation that most Fund investments will be long term in
nature and that the annual turnover of the Fund's portfolio should not exceed
100%. A portfolio turnover rate of 100% would occur if all the stocks in the
portfolio were replaced in a one-year period. High turnover involves
correspondingly greater commission expenses and transaction costs. The Fund's
portfolio turnover rate for its fiscal year ended December 31, 1994 was 18.74%.
Corporate Reorganizations
Subject to the diversification requirements of its investment restrictions, the
Fund may invest not more than 35% of its total assets in securities for which a
tender or exchange offer has been made or announced and in the securities of
companies for which a merger, consolidation, liquidation or similar
reorganization proposal has been announced if, in the judgment of the Adviser,
there is a reasonable prospect of capital appreciation significantly greater
than the added portfolio turnover expenses inherent in the short-term nature of
such transactions. The 35% limitation does not apply to the securities of
companies which may be involved in simply consummating an approved or agreed
upon merger, acquisition, consolidation, liquidation or reorganization. The
principal risk is that such offers or proposals may not be consummated within
the time and under the terms contemplated at the time of the investment in which
case, unless replaced by an equivalent or increased offer or proposal which is
consummated, the Fund may sustain a loss. For further information on such
investments, see "Corporate Reorganizations" in the Additional Statement.
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3
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Convertible Securities
Convertible securities may include corporate notes or preferred stock but are
ordinarily a long- term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with all debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality. However, when the market price of
the common stock underlying a convertible security exceeds the conversion price,
the price of the convertible security tends to reflect the value of the
underlying common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a yield basis,
and thus may not depreciate to the same extent as the underlying common stock.
Convertible securities rank senior to common stocks on an issuer's capital
structure and are consequently of higher quality and entail less risk than the
issuer's common stock, although the extent to which such risk is reduced depends
in large measure upon the degree to which the convertible security sells above
its value as a fixed income security.
The Fund may invest in convertible securities when it appears to the Adviser
that it may not be prudent to be fully invested in common stocks. In evaluating
a convertible security, the Adviser places primary emphasis on the
attractiveness of the underlying common stock and the potential for capital
appreciation through conversion. See "Convertible Securities" in the Additional
Statement.
The Fund will normally purchase only investment grade convertible securities
having a rating of, or equivalent to, at least an S&P rating of BBB (which
rating may have speculative characteristics) or, if unrated, judged by the
Adviser to be of comparable quality. However, the Fund may also invest up to 25%
of its assets in more speculative convertible debt securities which appear to
present an advantageous means of acquiring common stock having potential capital
appreciation provided such securities have a rating of, or equivalent to, at
least an S&P rating of B or, if unrated, judged by the Adviser to be of
comparable quality. Corporate debt obligations having a B rating will likely
have some quality and protective characteristics which, in the judgment of the
rating organization, are outweighed by large uncertainties or major risk
exposures to adverse conditions. Although lower rated debt securities generally
have higher yields, they are also more subject to market price volatility based
on increased sensitivity to changes in interest rates and economic conditions or
the liquidity of their secondary trading market. A description of corporate debt
ratings is contained in the Additional Statement.
Debt Securities
The Fund may invest up to 5% of its assets in low rated and unrated corporate
debt securities (often referred to in the financial press as "junk bonds") which
are perceived by the Adviser to present an opportunity for significant capital
appreciation, if, in the judgement of the Adviser, the ability of the issuer to
repay principal and interest when due is underestimated by the market. See "Debt
Securities" in the Additional Statement.
Investments in Small, Unseasoned
Companies
The Fund may invest up to 5% of its net assets in small, less well known
companies which (including predecessors) have operated less than three years.
The securities of such companies may have limited liquidity.
Warrants and Rights
The Fund may invest up to 5% of its total assets in warrants or rights (other
than those acquired in units or attached to other securities) which entitle the
holder to buy equity securities at a specific price for a specific period of
time but will do so only if such equity securities are deemed appropriate by the
Adviser for inclusion in the Fund's portfolio. The Fund will not invest more
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4
<PAGE>
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than 2% of its total assets in warrants or rights which are not listed on the
New York or American Stock Exchanges.
Foreign Securities
The Fund may invest up to 25% of its total assets in the securities of on-U.S.
issuers. These investments involve certain risks not ordinarily associated with
investments in securities of domestic issuers. These risks include fluctuations
in foreign exchange rates (which the Fund will not seek to hedge), future
political and economic developments, and the possible imposition of exchange
controls or other foreign governmental laws or restrictions. In addition, with
respect to certain countries, there is the possibility of expropriation of
assets, confiscatory taxation, political or social instability or diplomatic
developments which could adversely affect investments in those countries.
There may be less publicly available information about a foreign company than
about a U.S. company, and foreign companies may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to or as
uniform as those of U.S. companies. Non-U.S. securities markets, while growing
in volume, have, for the most part, substantially less volume than U.S. markets,
and securities of many foreign companies are less liquid and their prices more
volatile than securities of comparable U.S. companies. Transaction costs of
investing in non-U.S. securities markets are generally higher than in the U.S.
There is generally less government supervision and regulation of exchanges,
brokers and issuers than there is in the U.S. The Fund might have greater
difficulty taking appropriate legal action in non-U.S. courts. Non-U.S. markets
also have different clearance and settlement procedures which in some markets
have at times failed to keep pace with the volume of transactions, thereby
creating substantial delays and settlement failures that could adversely affect
the Fund's performance.
Dividend and interest income from non-U.S. securities will generally be subject
to withholding taxes by the country in which the issuer is located and may not
be recoverable by the Fund or the investor.
Other Investment Companies
The Fund does not intend to purchase the shares of other open-end investment
companies and reserves the right to invest up to 10% of its total assets in the
securities of closed-end investment companies including small business
investment companies (not more than 5% of its total assets may be invested in
more than 3% of the securities of any investment company). To the extent that
the Fund invests in the securities of other investment companies, shareholders
in the Fund may be subject to duplicative advisory and administrative fees.
SPECIAL INVESTMENT METHODS
The Fund will not in the aggregate, invest more than 10% of its net assets in
small, unseasoned companies, securities which are restricted for public sale,
securities for which market quotations are not readily available, and in
repurchase agreements maturing or terminable in more than seven days. Securities
freely salable among qualified institutional investors under special rules
adopted by the Securities and Exchange Commission may be treated as liquid if
they satisfy liquidity standards established by the Board of Trustees. The
continued liquidity of such securities is not as well assured as that of
publicly traded securities, and accordingly, the Board of Trustees will monitor
their liquidity. Further information on the investment methods and policies of
the Fund are set forth in the Additional Statement.
The Fund may purchase and sell securities on a "when, as and if issued basis"
under which the issuance of the security depends upon the occurrence of a
subsequent event, such as approval of a merger, corporate reorganization or debt
restructuring. For further information, see "When Issued, Delayed Delivery
Securities & Forward Commitments" in the Additional Statement.
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5
<PAGE>
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Repurchase Agreements
The Fund may enter into repurchase agreements with "primary dealers" in U.S.
Government securities and member banks of the Federal Reserve System which
furnish collateral at least equal in value or market price to the amount of
their repurchase obligation. In a repurchase agreement, an investor (e.g., the
Fund) purchases a debt security from a seller which undertakes to repurchase the
security at a specified resale price on an agreed future date (ordinarily a week
or less). The resale price generally exceeds the purchase price by an amount
which reflects an agreed- upon market interest rate for the term of the
repurchase agreement. The principal risk is that, if the seller defaults, the
Fund might suffer a loss to the extent that the proceeds from the sale of the
underlying securities and other collateral held by the Fund are less than the
repurchase price. Except for repurchase agreements for a period of a week or
less in respect to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, not more than 5% of the Fund's total assets may
be so invested.
Borrowing
The Fund may not borrow money except for (i) short-term credits from banks as
may be necessary for the clearance of portfolio transactions, and (ii)
borrowings from banks for temporary or emergency purposes, including the meeting
of redemption requests, which would otherwise require the untimely disposition
of its portfolio securities. Borrowing for any purpose including redemptions may
not, in the aggregate, exceed 15%, and borrowing for purposes other than meeting
redemptions may not exceed 5%, of the value of the Fund's total assets at the
time a borrowing is made. The Fund will not make any additional purchases of
portfolio securities at any time its borrowings exceed 5% of its assets. The
Fund will not mortgage, pledge or hypothecate any of its assets except that, in
connection with the foregoing, not more than 20% of the assets of the Fund may
be used as collateral.
MANAGEMENT OF THE FUND
The Fund's Board of Trustees has overall responsibility for the management of
the Fund. Pursuant to an Investment Advisory Contract with the Fund, the Adviser
provides a continuous investment program for the Fund's portfolio; provides all
facilities and personnel, including officers, required for its administrative
management; and pays the compensation of all officers and trustees of the Fund
who are its affiliates. As compensation for its services and the related
expenses borne by the Adviser, the Fund pays the Adviser a fee, computed daily
and payable monthly, equal, on an annual basis, to 1.00% of the Fund's average
net assets which is higher than that paid by most mutual funds. The advisory fee
paid by the Fund for its fiscal year ended December 31, 1994 was 1.00% of its
average net assets and its total expenses for the same period were 1.29% of its
average net assets.
The Additional Statement contains further information about the Advisory
Contract including a more complete description of the advisory and expense
arrangements, exculpatory and brokerage provisions, as well as information on
the brokerage practices of the Fund.
Gabelli Funds, Inc. ("GFI") acts as Adviser to the Fund. The Adviser was formed
in 1980 and as of March 31, 1995 acts as investment adviser to the following
funds with aggregate assets of $3.7 billion:
Net Assets
03/31/95
Open-end funds: (in millions)
The Gabelli Asset Fund $1,048
The Gabelli Growth Fund 478
The Gabelli Value Fund Inc. 463
The Gabelli Small Cap Growth Fund 212
The Gabelli Equity Income Fund 51
The Gabelli U.S. Treasury Money Market Fund 264
The Gabelli ABC Fund 23
The Gabelli Global Telecommunications Fund 132
The Gabelli Global Convertible Securities Fund 17
The Gabelli Global Interactive Couch Potato(TM)(C) Fund 27
Gabelli Gold Fund, Inc. 16
Closed-end funds: 856
The Gabelli Equity Trust Inc.
The Gabelli Convertible Securities Fund, Inc. 90
The Gabelli Global Multimedia Trust Inc. 66
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6
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GAMCO Investors, Inc. ("GAMCO"), a majority owned subsidiary of the Adviser acts
as investment adviser for individuals, pension trusts, profit-sharing trusts and
endowments, having aggregate assets in excess of $4.5 billion under its
management as of March 31, 1995. Gabelli & Company, Inc. (the "Distributor")
which is the principal distributor of the Fund for the sale of its shares, is an
indirect majority owned subsidiary of the Adviser. Mr. Mario J. Gabelli may be
deemed a "controlling person" of the Adviser and the Distributor on the basis of
his ownership of stock of the Adviser. The Adviser relies to a considerable
extent on the expertise of Mr. Gabelli who may be difficult to replace in the
event of his death, disability or resignation. The Adviser's address is the same
as the Fund as shown on the cover of this prospectus.
Mario J. Gabelli, CFA has been designated by the Adviser to be primarily
responsible for the day to day management of the Fund. Mr. Gabelli has been
Chairman and Chief Investment Officer of the Adviser since its inception in
1980.
Affiliates of the Adviser may, in the ordinary course of their business, acquire
for their own account or for the accounts of their advisory clients, significant
(and possibly controlling) positions in the securities of companies that may
also be suitable for investment by the Fund. The securities in which the Fund
might invest may thereby be limited to some extent. For instance, many companies
in the past several years have adopted so-called "poison pill" or other
defensive measures designed to discourage or prevent the completion of
non-negotiated offers for control of the company. Such defensive measures may
have the effect of limiting the shares of the company which might otherwise be
acquired by the Fund if the affiliates of the Adviser or their advisory accounts
have or acquire a significant position in the same securities. However, the
Adviser does not believe that the investment activities of its affiliates will
have a material adverse effect upon the Fund in seeking to achieve its
investment objectives. Securities purchased or sold pursuant to contemporaneous
orders entered on behalf of the investment company accounts of the Adviser or
the advisory accounts managed by its affiliates for their unaffiliated clients
are allocated pursuant to principles believed to be fair and not disadvantageous
to any such accounts. In addition, all such orders are accorded priority of
execution over orders entered on behalf of accounts in which the Adviser or its
affiliates have a substantial pecuniary interest.
The Advisory Contract contains provisions relating to the selection of
securities brokers to effect the portfolio transactions of the Fund. Under those
provisions, subject to applicable law and procedures adopted by the Trustees,
the Adviser may (i) direct Fund portfolio brokerage to the Distributor, a
broker-dealer affiliate of the Adviser; (ii) pay commissions to brokers other
than the Distributor which are higher than might be charged by another qualified
broker to obtain brokerage and/or research services considered by the Adviser to
be useful or desirable for its investment management of the Fund and/or other
advisory accounts of itself and any investment adviser affiliated with it; and
(iii) consider the sales of shares of the Fund by brokers other than the
Distributor as a factor in its selection of brokers for Fund portfolio
transactions.
The Adviser has entered into a Sub-Administration Contract with The Shareholder
Services Group, Inc. a subsidiary of First Data Corporation (the
"Administrator") pursuant to which the Administrator provides certain
administrative services necessary for each Fund's operations. These services
include the preparation and distribution of materials for meetings of the
Corporation's Board of Directors, compliance testing of Fund activities and
asssistance in the preparation of proxy statements, reports to shareholders and
other documentation. The Adviser pays the Administrator a monthly fee based on
the aggregate average daily net assets of the Funds under its administration
advised by the Adviser as follows: up to $1 billion--0.10%;
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7
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$1 billion to $1.5 billion--0.08%; $1.5 billion to $3 billion--0.03%; over $3
billion--0.02%. The Administrator has its principal office at Exchange Place,
Boston, Massachusetts 02019.
DISTRIBUTION PLAN
On May 11, 1992, the shareholders of the Fund approved a Distribution Plan which
authorizes payments by the Fund in connection with the distribution of its
shares at an annual rate, as determined from time to time by the Board of
Trustees, of up to .25% of the Fund's average daily net assets. Although the
Distribution Plan permits payments to be made in subsequent years for expenses
incurred in prior years if the Fund's independent Trustees specifically
authorize such payments, the Distributor has not requested and the Fund does not
anticipate making any such payments.
Payments may be made by the Fund under the Distribution Plan for the purpose of
financing any activity primarily intended to result in the sales of shares of
the Fund as determined by the Board of Trustees. Such activities typically
include advertising; compensation for sales and sales marketing activities of
the Distributor and other banks, broker-dealers and service providers;
shareholder account servicing; production and dissemination of prospectus and
sales and marketing materials; and capital or other expenses of associated
equipment, rent, salaries, bonuses, interest and other overhead. To the extent
any activity is one which the Fund may finance without a Distribution Plan, the
Fund may also make payments to finance such activity outside of the Plan and not
subject to its limitations.
The Plan has been implemented by written agreements between the Fund and/or the
Distributor and each person (including the Distributor) to which payments may be
made. Administration of the Plan is regulated by Rule 12b-1 under the Investment
Company Act of 1940 (the "Act"), which includes requirements that the Board of
Trustees receive and review at least quarterly reports concerning the nature and
qualification of expenses which are made, that the Board of Trustees approve all
agreements implementing the Plan and that the Plan may be continued from year to
year only if the Board of Trustees concludes at least annually that continuation
of the Plan is likely to benefit shareholders.
To the extent that payments under the Plan are based on allocation by the
Distributor, the Fund may be considered to be participating in joint
distribution activities with other funds distributed by the Distributor. Any
such allocations would be subject to approval by the Fund's non-interested
Trustees and would be based on such factors as the net assets of each Fund, the
number of shareholders, inquiries and similar pertinent criteria.
In approving the Plan, the Trustees determined, in the exercise of their
business judgement and in light of their fiduciary duties, that there is a
reasonable likelihood that the Plan will benefit the Fund and its shareholders.
During 1994, the distribution fees paid to the Distributor totaled $1,491,152 or
.15% of average net assets.
The Staff of the Securities and Exchange Commission (the "SEC") is currently
reviewing the permissibility of various types of distribution plans. In the
event such review results in an amendment of Rule 12b-1, or the interpretation
of that Rule, the Distribution Plan of the Fund may either be discontinued or
administered in a manner consistent with such amendment or interpretation. See
the Additional Statement for additional and more detailed information.
The Glass-Steagall Act and other applicable laws, among other things, prohibit
banks from engaging in the business of underwriting, selling or distributing
securities. Accordingly, the Distributor will enter into agreements with banks
only to provide administrative assistance. However, judicial or administrative
decisions or interpretations of such laws, as well as changes in either Federal
or state statutes or regulations relating to the permissible activities of banks
and their affiliates, could prevent a bank from continuing to act in such
capacity. In that case, its shareholder clients would be permitted to remain
shareholders of the
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Fund, and alternative means for continuing the servicing of such shareholders
would be sought. It is not expected that shareholders would suffer any adverse
financial consequences as a result of any of these occurrences. In addition,
state securities laws may differ from federal law and may require banks and
financial institutions to register as dealers.
PURCHASE OF SHARES
Shares of the Fund are offered without sales load as an investment vehicle for
individuals, institutions, fiduciaries and retirement plans. Prospectuses, sales
material and applications can be obtained from the Distributor. The Fund and the
Distributor are authorized to reject any purchase order.
The initial minimum investment is $1,000 for all accounts. Accounts establishing
n Automatic Investment Plan require no initial minimum investment. There is no
minimum for subsequent investments. Investments through an Individual Retirement
Account ("IRA") or other retirement plans, however, have different requirements
(see "Retirement Plans"). All purchase payments accompanied by a purchase order
in proper form as described below will be effective as of the date received by
the Transfer Agent and will be invested in full and fractional shares at the per
share net asset value of the Fund next determined after such receipt. Although
most shareholders elect not to receive stock certificates, certificates for
whole shares only can be obtained on specific written request to the Transfer
Agent. The Fund may waive or reduce the minimum initial investment for certain
accounts or classes of accounts from time to time.
Shares of the Fund may also be purchased through authorized broker-dealers who
may charge for their services. No such charge is imposed by the Fund or the
Distributor. Such charges may vary among broker-dealers who may impose higher
initial or subsequent minimum investment requirements than those established by
the Fund. Services provided by such broker-dealers may include holding Fund
shares in the name of the broker-dealer for the brokerage accounts of its
customers and allowing investors to borrow on the value of their Fund shares by
establishing a margin account with the broker-dealer. Shares so held may be
redeemed or transferred only by arrangement with the broker-dealer. It is the
responsibility of the shareholder's agent to establish procedures which would
assure that upon receipt of an order to purchase shares of the Fund, the order
will be transmitted so that it will be received by the Distributor before the
time when the price applicable to the buy order expires.
The net asset value per share of the Fund is determined as of the close of the
regular trading session of the New York Stock Exchange currently 4:00 p.m., New
York time, on each day that the New York Stock Exchange is open by dividing the
value of the Fund's net assets (i.e., the value of its securities and other
assets less its liabilities, including expenses payable or accrued but excluding
capital stock and surplus) by the number of shares outstanding at the time the
determination is made. Portfolio securities which are readily marketable are
valued at market value based on reported prices or bid and asked quotations.
Debt instruments having 60 days or less remaining maturity are valued at cost
adjusted for amortization of premiums and accretions of discounts. All other
investments are valued at fair value under procedures established by and under
the general supervision of the Fund's Board of Trustees. See the Additional
Statement for further information.
Mail
To make an initial purchase of shares of the Fund, send a completed subscription
order form with a check for the amount of the investment payable to "The Gabelli
Asset Fund" to:
The Gabelli Funds
P.O. Box 8308
Boston, MA 02266-8308
Subsequent purchases do not require a completed application and can be made by
(i) mailing
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a check to the same address noted above; (ii) bank wire; (iii) personal
delivery; or (iv) by telephone as indicated below. The exact name and number of
the shareholder's account should be clearly indicated.
Checks will be accepted if drawn in U.S. currency on a domestic bank for less
than $100,000. U.S. dollar checks drawn against a non-U.S. bank may be subject
to collection delays and will be accepted only upon actual receipt of funds by
the Transfer Agent. Bank collection fees may apply. Bank or certified checks for
investments of $100,000 or more will be required unless the investor elects to
invest by bank wire as described below.
Bank Wire
To purchase shares of the Fund using the wire system for transmittal of money
among banks, the investor should instruct a Federal Reserve System member bank
to wire funds to:
State Street Bank and Trust Company
ABA # 011-0000-28 REF DDA # 9904-6187
Attn: Shareholder Services
Re: The Gabelli Asset Fund
A/C # __________________________________
(Registered Owner)
Account of_______________________________
SS # / Tax I.D. #_______________________
225 Franklin Street, Boston, MA 02110
For initial purchases, an investor should first telephone the Fund at
1-800-GABELLI (422-3554) to obtain a new account number. The investor should
then mail a completed subscription order form to the Gabelli Funds at the
address shown above for mail purchases. State Street Bank and Trust Company does
not charge investors in the Fund for the receipt of wire transfers but there may
be a charge by your bank for transmitting the money by bank wire. If you are
planning to wire funds, it is suggested that you instruct your bank early in the
day so the wire transfer can be accomplished the same day.
Personal Delivery
Deliver a check made payable to "The Gabelli Asset Fund" (with a completed
subscription order form for an initial purchase) to:
The Gabelli Funds
The BFDS Building, 7th Floor
Two Heritage Drive
North Quincy, MA 02171
Telephone Investment Plan
You may purchase additional shares of the Fund by telephone through the
Automated Clearing House ("ACH") system as long as your bank is a member of the
ACH system and you have a completed, approved Investment Plan application on
file with our Transfer Agent. The funding for your purchase will be
automatically deducted from the ACH eligible account you designate on the
application. Your investment will normally be credited to your Mutual Fund
account on the first business day following your telephone request. Your request
must be received no later than 4:00 p.m., eastern time. There is a minimum of
$100 for each telephone investment. Any subsequent changes in banking
information must be submitted in writing and accompanied by a sample voided
check. To initiate an ACH purchase, please call 1-800-GABELLI (422-3554) or
1-800-872-5365. Fund shares purchased through the Investment Plan will not be
available for redemption for fifteen (15) days following the purchase date.
Automatic Investment Plan
The Fund offers an automatic monthly investment plan through the ACH system,
details of which can be obtained from the Distributor. There is no initial
investment minimum currently required for accounts establishing an automatic
investment plan.
Systematic Withdrawal Plan
Any shareholder who owns shares of the Fund with an aggregate value of $10,000
or more may establish a Systematic Withdrawal Plan under which he offers to sell
to the Fund at net asset
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value the number of full and fractional shares which will produce the monthly,
quarterly or annual payments specified. Systematic withdrawals deplete the
investor's principal and are treated as redemptions, which may be taxable
transactions. Investors contemplating participation in this plan should consult
their tax advisers.
Shareholders wishing to utilize this plan may do so by completing an application
which may be obtained by writing or calling the Distributor. No additional
charge to the shareholder is made for this service.
Other Investors
No minimum initial investment is required for (i) officers or trustees of
the Fund; (ii) officers, directors or full-time employees of the Adviser, the
Distributor or their affiliates, including members of the "immediate family" of
such employees. The term "immediate family" refers to spouses, children and
grandchildren adopted or natural, parents, grandparents, siblings, a spouse's
siblings, a sibling's spouse and a sibling's children; (iii) retirement plans
established for such employees; or (iv) investments made through the Fund's
Automatic Investment Plan.
REDEMPTION OF SHARES
Upon receipt by the Transfer Agent of a redemption request in proper form,
shares of the Fund will be redeemed at their next determined net asset value.
Checks for redemption proceeds will normally be mailed to the shareholder's
address of record within seven days, but will not be mailed until all checks in
payment for the purchase of the shares to be redeemed have been honored, which
may take up to 15 days. There is no charge on the redemption of shares
regardless of when purchased. The proceeds of a redemption may be more or less
than the amount invested and, therefore, a redemption may result in gain or loss
for income tax purposes.
By Letter
Redemption requests may be made by letter to the Transfer Agent, specifying the
name of the Fund, the dollar amount or number of shares to be redeemed, and the
account number. The letter must be signed in exactly the same way the account is
registered (if there is more than one owner of the shares, all must sign) and,
if any certificates for the shares to be redeemed are outstanding, presentation
of such certificates properly endorsed is also required. Signatures on a
redemption request and/or certificates must be guaranteed by an eligible
guarantor institution which includes a domestic bank, a savings and loan
institution, a domestic credit union, a member bank of the Federal Reserve
System or a member firm of a national securities exchange; pursuant to the
Fund's transfer agent's standards and procedures (signature guarantees by
notaries public are not acceptable). Further documentation, such as copies of
corporate resolutions and instruments of authority, are normally requested from
corporations, administrators, executors, personal representatives, trustees or
custodians to evidence the authority of the person or entity making the
redemption request.
Telephone Redemption
By Check
The Fund accepts telephone requests for redemption of unissued shares from
shareholders subject to a $25,000 limitation. By calling either 1-800-GABELLI
(422-3554) or 1-800-872-5365, you may request that a check be mailed to the
address of record on the account provided that the address has not changed
within thirty (30) days prior to your request. The check will be made payable as
the account is registered and mailed within seven (7) days.
By Bank Wire
The Fund accepts telephone requests for wire redemption in excess of $1,000 but
subject to a $25,000 limitation to a predesignated bank either on the
subscription order form or in a subsequent written authorization with the
signature guaranteed. The Fund accepts signature guaranteed written requests for
redemptions by bank wire without limitation. The proceeds are normally wired on
the following business day. Your bank
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must be either a member of the Federal Reserve System or have a correspondent
bank which is a member. Any change to the banking information made at a later
date must be submitted in writing with a signature guarantee.
Requests for telephone redemption must be received between 9:00 a.m. and 4:00
p.m., eastern time. If your telephone call is received after this time or on a
day when the New York Stock Exchange is not open, the request will be processed
the following business day. Shares are processed at the net asset value next
determined following your request. Fund shares purchased by check or through the
automatic purchase plan will not be available for redemption for fifteen (15)
days following the purchase. Shares held in certificate form must be returned to
the transfer agent for redeposit prior to the redemption of shares. Telephone
redemption is not available for Individual Retirement Accounts. The proceeds of
a telephone redemption may be directed to an existing account in another Mutual
Fund and advised by Gabelli Funds, Inc. provided the registration of such
account is the same. Such a purchase will be made at the respective net asset
value plus applicable sales charge, if any.
Shareholders may also redeem Fund shares through registered broker-dealers
holding such shares who have made arrangements with the Fund permitting them to
redeem such shares by telephone or facsimile transmission and who may charge a
fee for this service.
The Fund may suspend the right of redemption during any period when (i) trading
on the New York Stock Exchange is restricted or the Exchange is closed, other
than customary weekend and holiday closings; (ii) the SEC has by order permitted
such suspension or (iii) an emergency, as defined by rules of the SEC, exists
making disposal of portfolio investments or determination of the value of the
net assets of the Fund not reasonably practicable. The Fund may postpone for
more than seven days the date of payment for redemptions during any period the
right to redeem has been suspended.
To minimize expenses, the Fund reserves the right to redeem, upon not less than
30 days' notice, all shares of the Fund in an account (other than an IRA) which
has a value below $500 due to prior shareholder redemptions. However, a
shareholder will be allowed to make additional investments prior to the date
fixed for redemption to avoid liquidation of the account.
The Fund and its transfer agent will not be liable for following telephone
instructions reasonably believed to be genuine. In this regard the Fund and its
transfer agent require personal identification information before accepting a
telephone redemption. If the Fund or its transfer agent fail to use reasonable
procedures, the Fund may be liable for losses due to fraudulent instructions.
RETIREMENT PLANS
The Fund has available a form of IRA for investment in Fund shares which may be
obtained from its Distributor. Self-employed investors may purchase shares of
the Fund through tax-deductible contributions to existing retirement plans for
self- employed persons, known as Keogh or H.R. 10 plans. The Fund does not
currently act as sponsor to such plans. Fund shares are also a suitable
investment for other types of qualified pension or profit-sharing plans which
are employer sponsored, including deferred compensation or salary reduction
plans known as "401(k) Plans" which give participants the right to defer
portions of their compensation for investment on a tax- deferred basis until
distributions are made from the plans.
The minimum initial investment required for all such retirement plans is $1,000
($1,250 for combined spousal IRAs). There is no minimum for all subsequent
investments.
Under the Internal Revenue Code of 1986, individuals may make wholly or partly
tax deductible IRA contributions of up to $2,000 annually, depending on whether
they are active participants in an employer-sponsored retirement plan and on
their income level. However, dividends and
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distributions held in the account are not taxed until withdrawn in accordance
with the provisions of the Code. An individual with a non-working spouse may
establish a separate IRA for the spouse under the same conditions and contribute
a combined maximum of $2,250 annually to either or both IRAs provided that no
more than $2,000 may be contributed to the IRA of either spouse.
Investors should be aware that they may be subject to penalties or additional
tax on contributions to or withdrawals from IRAs or other retirement plans which
are not permitted by the applicable provisions of the Internal Revenue Code and
prior to a withdrawal, shareholders may be required to certify their age and
awareness of such restrictions in writing. Persons desiring information
concerning investments through IRAs or other retirement plans should write or
telephone the Distributor.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each dividend and capital gains distribution, if any, declared by the Fund on
its outstanding shares will, at the election of each shareholder, be paid on the
payment date fixed by the Board of Trustees in additional shares of the Fund
having an aggregate net asset value as of the payment date of such dividend or
distribution equal to the cash amount of such dividend or distribution. An
election to receive dividends and distributions in cash or shares is made at the
time shares are subscribed for and may be changed by notifying the Fund in
writing at any time prior to the record date for a particular dividend or
distribution. There are no sales or other charges in connection with the
reinvestment of dividends and capital gains distributions. There is no fixed
dividend rate, and there can be no assurance that the Fund will pay any
dividends or realize any capital gains.
The Fund qualified and intends to continue to qualify for tax treatment as a
"Regulated Investment Company" under the Internal Revenue Code in order to be
relieved of Federal income tax on that part of its net investment income and
realized capital gains which it pays out to its shareholders. To qualify, the
Fund must meet certain relatively complex tests, including the requirement that
less than 30% of its gross income must be derived from gains from the sale or
other disposition of securities held for less than three months. Because of such
requirements, qualification in any given year may not be feasible.
Dividends out of net investment income and distributions of realized short-term
capital gains are taxable to the recipient shareholders as ordinary income. In
the case of corporate shareholders, all or a portion of such distributions may
be eligible for the dividends-received deduction. Dividends and distributions
declared by the Fund may also be subject to state and local taxes. Distributions
out of long-term capital gains, of which shareholders will be notified, are
taxable to the recipient as long-term capital gains. The foregoing summary of
Federal income tax consequences is intended for general informational purposes
only. Prior to investing in shares of the Fund, prospective shareholders should
consult their tax adviser concerning the Federal, state and local tax
consequences of such an investment.
CALCULATION OF INVESTMENT PERFORMANCE
The investment performance of the Fund quoted in advertising for the sale of its
shares will be calculated on a "total return" basis which assumes the
reinvestment of all dividends and distributions. Total return is generally
quoted as a percentage calculated by combining the income and principal changes
of an assumed investment in shares of the Fund during the period specified and
dividing by the amount of the assumed initial investment. To illustrate the
components of its overall performance, investment performance may be given on a
cumulative basis (for periods greater than one year); for consecutive annual
periods; for consecutive quarterly or semi-annual periods as well as for the
year including such interim periods; or separately for investment
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income results and capital gain or loss. Such performance quotations will
reflect all recurrent charges.
In each case, the average annual total return of the Fund since its inception,
the past five years, and the twelve-month period through the most recent
calendar quarter will also be given. The average annual total return will be
calculated pursuant to a standardized formula to reflect the hypothetical
annually compounded rate of return which would have produced the same cumulative
total return. Investors should recognize that an average annual return tends to
smooth out variations in the Fund's performance level and is therefore not the
same as actual year by year results. The Fund's average annual total return
for the 1-year and 5-year periods ended December 31, 1994 and from inception
through December 31, 1994 were (0.1)%, 9.4% and 14.9%, respectively.
GENERAL INFORMATION
Description of Shares, Voting Rights and Liabilities
As a Massachusetts Business Trust, the Fund is not required, and does not
intend, to hold regular annual shareholder meetings but may hold special
meetings for the consideration of proposals requiring shareholder approval such
as changing fundamental policies or, upon the written request of the
recordholders of 33 1/3% of outstanding shares (10% in the case of removing one
or more trustees) for any other purpose. The Fund will facilitate shareholder
communications in this regard. Shares of the Fund have equal rights with respect
to voting and each share represents an equal proportionate interest in the Fund
with each other share. The Fund may issue an unlimited number of full and
fractional shares of beneficial interest (par value $.01 per share) and the
Trustees may divide or combine the shares into a greater or lesser number of
shares without changing the proportionate beneficial interests in the Fund.
When issued, shares are fully paid and non- assessable (except as described in
the Additional Statement under "General Information") and have no pre-emptive or
conversion rights.
The Fund sends semi-annual unaudited and annual audited reports to all its
shareholders which include a list of portfolio securities. Unless it is clear
that a shareholder holds as nominee for the account of an unrelated person or a
shareholder otherwise specifically requests in writing, the Fund may send a
single copy of semi-annual, annual and other reports to shareholders to all
accounts at the same address and all accounts of any person at that address.
Information for Shareholders
All shareholder inquiries regarding administrative procedures including the
purchase and redemption of shares should be directed to the Distributor, Gabelli
& Company, Inc. For assistance, call 1-800-GABELLI (422-3554). The address of
the Distributor is One Corporate Center, Rye, New York 10580-1435
This Prospectus omits certain information contained in the Registration
Statement filed with the Securities and Exchange Commission. Copies of the
Registration Statement, including items omitted herein, may be obtained from the
Commission by paying the charges prescribed under its rules and regulations. The
Statement of Additional Information included in such Registration Statement may
be obtained without charge from the Fund or the Distributor.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company, ("State Street") 225 Franklin Street,
Boston, MA 02110, is the Custodian for the Fund's cash and securities. Boston
Financial Data Services, located at Two Heritage Drive, North Quincy, MA 02171,
an affiliate of State Street performs the services of Transfer and Dividend
Disbursing Agent for the Fund on behalf of State Street. State Street does not
assist in and is not responsible for investment decisions involving assets of
the Fund.
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TABLE OF CONTENTS
Page
----
Table of Fees and Expenses .......... 2
Financial Highlights ................ 2
The Fund and Its Investment Policies 3
Special Investment Methods .......... 5
Management of the Fund .............. 6
Distribution Plan ................... 7
Purchase of Shares .................. 8
Redemption of Shares ................ 11
Retirement Plans .................... 12
Dividends, Distributions and Taxes .. 13
Calculation of Investment Performance 13
General Information ................. 14
Custodian, Transfer Agent and
Dividend Disbursing Agent ......... 14
----------------------------------------
No dealer, salesman or other person has
been authorized to give any information
or to make any representation other than
those contained in this Prospectus, and
if given or made, such information or
representation may not be relied upon as
authorized by the Fund, its Investment
Adviser, Distributor or any affiliate
thereof. This Prospectus does not
constitute an offer to sell or a
solicitation of any offer to buy any of
the securities offered hereby in any
state to any person to whom it is
unlawful to make such offer in such
state.
----------------------------------------
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THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1434
Telephone 1-800-GABELLI (1-800-422-3554)
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1995
This Statement of Additional Information is not a prospectus and is only
authorized for distribution when preceded or accompanied by the Fund's
prospectus dated May 1, 1995 (the "Prospectus"). This Statement of Additional
Information contains additional and more detailed information than that set
forth in the Prospectus and should be read in conjunction with the Prospectus,
additional copies of which may be obtained without charge by writing or
telephoning the Fund at the address and telephone number set forth above.
TABLE OF CONTENTS
Investment Policies ................................ 2
Special Investment Methods ......................... 2
Convertible Securities ........................... 2
Debt Securities .................................. 3
Investments in Warrants and Rights ............... 3
Investments in Small, Unseasoned Companies ....... 3
Corporate Reorganizations ........................ 3
When Issued, Delayed Delivery Securities & Forward 4
Commitments
Repurchase Agreements ............................ 5
Investment Restrictions ............................ 5
Trustees and Officers .............................. 6
Investment Adviser ................................. 9
Distributor ........................................ 11
Distribution Plan .................................. 11
Portfolio Transactions and Brokerage ............. 11
Redemption of Shares ............................... 13
Net Asset Value .................................... 14
Investment Performance Information ................. 14
Counsel and Independent Accountants ................ 15
General Information ................................ 16
Description of Corporate Debt Ratings .............. 17
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INVESTMENT POLICIES
The Gabelli Asset Fund, (the "Fund") expects that, for most periods, a
substantial portion, if not all, of its assets will be invested in a diversified
portfolio of common stocks judged by Gabelli Funds, Inc. (the "Adviser") to have
favorable value to price characteristics. The Fund may also invest in U.S.
Government or Government Agency obligations, investment grade corporate bonds,
preferred stocks, convertible securities, foreign securities, debt securities
and/or short term money market instruments when deemed appropriate by the
Adviser.
SPECIAL INVESTMENT METHODS
Convertible Securities
The Fund may, as an interim alternative to investment in common stocks,
purchase investment grade convertible debt securities having a rating of, or
equivalent to, at least "BBB" by Standard & Poor's Rating Group ("Standard &
Poor's") or, if unrated, judged by the Adviser to be of comparable quality.
Securities rated less than "A" by Standard & Poor's may have speculative
characteristics. The Fund may also invest up to 25% of its assets in convertible
debt securities which have a lesser rating or are unrated. However, the Adviser
will not purchase securities rated lower than "B" by Standard & Poor's or "Caa"
by Moody's Investors' Services, Inc. ("Moody's"). Unrated convertible securities
which, in the judgement of the Adviser, have equivalent credit worthiness may
also be purchased for the Fund. Although lower rated bonds generally have higher
yields, they are more speculative and subject to a greater risk of default with
respect to the issuer's capacity to pay interest and repay principal than are
higher rated debt securities.
In selecting convertible securities for the Fund, the Adviser relies
primarily on its own evaluation of the issuer and the potential for capital
appreciation through conversion. It does not rely on the rating of the security
or sell because of a change in rating absent a change in its own evaluation of
the underlying common stock and the ability of the issuer to pay principal and
interest or dividends when due without disrupting its business goals. Interest
or dividend yield is a factor only to the extent it is reasonably consistent
with prevailing rates for securities of similar quality and thereby provides a
support level for the market price of the security. The Fund will purchase the
convertible securities of highly leveraged issuers only when, in the judgement
of the Adviser, the risk of default is outweighed by the potential for capital
appreciation.
The issuers of debt obligations having speculative characteristics may
experience difficulty in paying principal and interest when due in the event of
a downturn in the economy or unanticipated corporate developments. The market
prices of such securities may become increasingly volatile in periods of
economic uncertainty. Moreover, adverse publicity or the perceptions of
investors over which the Adviser has no control, whether or not based on
fundamental analysis, may decrease the market price and liquidity of such
investments. Although the adviser will attempt to avoid exposing the Fund to
such risks, there is no assurance that it will be successful or that a liquid
secondary market will continue to be available for the disposition of such
securities.
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Debt Securities
Non-convertible corporate debt securities which are either unrated or have
a predominantly speculative rating (often referred to in the financial press as
"junk bonds") may present opportunities for significant long-term capital
appreciation if the ability of the issuer to repay principal and interest when
due is underestimated by the market or the rating organizations. Because of its
perceived credit weakness, the issuer is generally required to pay a higher
interest rate and/or its debt securities may be selling at a significantly lower
market price than the debt securities of issuers actually having similar
strength. When the inherent value of such securities is recognized, the market
value of such securities may appreciate significantly. The Adviser believes that
its research on the credit and balance sheet strength of certain issuers may
enable it to select a limited number of corporate debt securities, which in
certain markets, will better serve the objective of capital appreciation than
alternative investments in common stocks. Of course, there can be no assurance
that the Adviser will be successful. In its evaluation, the Adviser will not
rely on ratings and the receipt of income is only an incidental consideration.
As in the case of the convertible debt securities discussed above, low
rated and unrated corporate debt securities are generally considered to be more
subject to default and therefore significantly more speculative than those
having an investment grade rating. They also are more subject to market price
volatility based on increased sensitivity to changes in interest rates and
economic conditions or the liquidity of their secondary trading market. The Fund
does not intend to purchase debt securities for which a liquid trading market
does not exist but there can be no assurance that such a market will exist for
the sale of such securities.
Investments in Warrants and Rights
Warrants basically are options to purchase equity securities at a specified
price valid for a specific period of time. Their prices do not necessarily move
parallel to the prices of the underlying securities. Rights are similar to
warrants, but normally have a short duration and are distributed directly by the
issuer to its shareholders. Rights and warrants have no voting rights, receive
no dividends and have no rights with respect to the assets of the issuer.
Investment in Small, Unseasoned Companies
The securities of small, unseasoned companies may have a limited trading
market, which may adversely affect their disposition and can result in their
being priced lower than might otherwise be the case. If other investment
companies and investors who invest in such issuers trade the same securities
when the Fund attempts to dispose of its holdings, the Fund may receive lower
prices than might otherwise be obtained.
Corporate Reorganizations
The Fund may invest up to 35% of its total assets in securities for which a
tender or exchange offer has been made or announced and in securities of
companies for which a merger, consolidation, liquidation or reorganization
proposal has been announced if, in the judgement of the Adviser, there is
reasonable prospect of capital appreciation significantly greater than the
brokerage and other transaction expenses involved. The 35% limitation does not
apply to the securities of companies which may be involved in simply
consummating an approved or agreed upon merger, acquisition, consolidation,
liquidation or reorganization. The primary risk of such investments is that if
the contemplated transaction is abandoned, revised, delayed or becomes subject
to unanticipated uncertainties, the market price of the securities may decline
below the purchase price paid by the Fund.
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In general, securities which are the subject of such an offer or proposal
sell at a premium to their historic market price immediately prior to the
announcement of the offer or proposal. However, the increased market price of
such securities may also discount what the stated or appraised value of the
security would be if the contemplated transaction were approved or consummated.
Such investments may be advantageous when the discount significantly overstates
the risk of the contingencies involved; significantly undervalues the
securities, assets or cash to be received by shareholders of the prospective
portfolio company as a result of the contemplated transaction; or fails
adequately to recognize the possibility that the offer or proposal may be
replaced or superseded by an offer or proposal of greater value. The evaluation
of such contingencies requires unusually broad knowledge and experience on the
part of the Adviser which must appraise not only the value of the issuer and its
component businesses as well as the assets or securities to be received as a
result of the contemplated transaction, but also the financial resources and
business motivation of the offerer as well as the dynamic of the business
climate when the offer or proposal is in process.
In making such investments, the Fund will not violate any of its
diversification requirements or investment restrictions (see below, "Investment
Restrictions") including the requirements that, except for the investment of up
to 25% of its assets in any one company or industry, not more than 5% of its
assets may be invested in the securities of any issuer. Since such investments
are ordinarily short term in nature, they will tend to increase the turnover
ratio of the Fund thereby increasing its brokerage and other transaction
expenses as well as make it more difficult for the Fund to meet the test for
favorable tax treatment as a "Registered Investment Company" specified by the
Internal Revenue Code (see the Prospectus, "Dividends, Distributions and
Taxes"). The Adviser intends to select investments of the type described which,
in its view, have a reasonable prospect of capital appreciation which is
significant in relation to both the risk involved and the potential of available
alternate investments as well as monitor the effect of such investments on the
tax qualification tests of the Internal Revenue Code.
When Issued, Delayed Delivery Securities & Forward Commitments
The Fund is authorized to buy and sell when issued securities as an
additional investment strategy in furtherance of its investment objectives.
In utilizing this strategy, the Fund may enter into forward commitments for
the purchase or sale of securities, including on a "when issued" or "delayed
delivery" basis in excess of customary settlement periods for the type of
security involved. In some cases, a forward commitment may be conditioned upon
the occurrence of a subsequent event, such as approval and consummation of a
merger, corporate reorganization or debt restructuring, i.e., a when, as and if
issued security. When such transactions are negotiated, the price is fixed at
the time of the commitment, with payment and delivery taking place in the
future, generally a month or more after the date of the commitment. While the
Fund will only enter into a forward commitment with the intention of actually
acquiring the security, the Fund may sell the security before the settlement
date if it is deemed advisable.
Securities purchased under a forward commitment are subject to market
fluctuation and no interest (or dividends) accrues to the Fund prior to the
settlement date. The Fund will segregate with its custodian cash or liquid
high-grade debt securities with the Fund's custodian in an aggregate amount at
least equal to the amount of its outstanding forward commitments.
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Repurchase Agreements
The Fund may engage in repurchase agreements as set forth in the
Prospectus. A repurchase agreement is an instrument under which the purchaser
(i.e., the Fund) acquires a debt security and the seller agrees, at the time of
the sale, to repurchase the obligation at a mutually agreed upon time and price,
thereby determining the yield during the purchaser's holding period. This
results in a fixed rate of return insulated from market fluctuations during such
period. The underlying securities are ordinarily U.S. Treasury or other
government obligations or high quality money market instruments. The Fund will
require that the value of such underlying securities, together with any other
collateral held by the Fund, always equals or exceeds the amount of the
repurchase obligations of the vendor. While the maturities of the underlying
securities in repurchase agreement transactions may be more than one year, the
term of each repurchase agreement will always be less than one year. The Fund's
risk is primarily that, if the seller defaults, the proceeds from the
disposition of underlying securities and other collateral for the seller's
obligation are less than the repurchase price. If the seller becomes bankrupt,
the Fund might be delayed in selling the collateral. Under the Investment
Company Act of 1940, repurchase agreements are considered loans. Repurchase
agreements usually are for short periods, such as one week or less, but could be
longer. The Fund will not enter into repurchase agreements of a duration of more
than seven days if, taken together with illiquid securities and other securities
for which there are no readily available quotations, more than 10% of its total
assets would be invested.
INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions which may not be
changed without the approval of the Fund's shareholders. Under such
restrictions, the Fund may not:
(1) Purchase the securities of any one issuer, other than the United
States Government, or any of its agencies or instrumentalities, if
immediately after such purchase more than 5% of the value of its total
assets would be invested in such issuer or the Fund would own more than 10%
of the outstanding voting securities of such issuer, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
such 5% and 10% limitations;
(2) Invest more than 25% of the value of its total assets in any
particular industry;
(3) Purchase securities on margin, but it may obtain such short term
credits from banks as may be necessary for the clearance of purchase and
sales of securities;
(4) Make loans of its assets except for the purchase of debt
securities;
(5) Borrow money except subject to the restrictions set forth in the
prospectus under "Borrowing";
(6) Mortgage, pledge or hypothecate any of its assets except that, in
connection with permissible borrowings mentioned in paragraph 5 above, not
more than 20% of the assets of the Fund (not including amounts borrowed)
may be used as collateral;
(7) Invest more than 5% of its total assets in more than 3% of the
securities of another investment company or invest more than 10% of its
total assets in the securities of other investment companies, nor make any
such investments other than through purchase in the open market where to
the best information of the Fund no commission or profit to a sponsor or
dealer (other than the customary broker's commission) results from such
purchase;
(8) Act as an underwriter of securities of other issuers;
(9) Invest, in the aggregate, more than 10% of the value of its total
assets in securities for which market quotations are not readily available,
securities which are restricted for public sale, or in repurchase
agreements maturing or terminable in more than seven days;
- --------------------------------------------------------------------------------
B-5
<PAGE>
- --------------------------------------------------------------------------------
(10) Purchase or otherwise aequire interests in real estate, real
estate mortgage loans or interests in oil, gas or other mineral exploration
or development programs;
(11) Sell securities short or invest in puts, calls, straddles,
spreads or combination thereof;
(12) Purchase or acquire commodities or commodity contracts;
(13) Issue senior securities, except insofar as the Fund may be deemed
to have issue a senior security in connection with any permitted borrowing;
(14) Participate on a joint, or a joint and several, basis in any
securities trading account; or
(15) Invest in companies for the purpose of exercising control.
TRUSTEES AND OFFICERS
The Trustees and principal officers of the Fund, and their principal
occupations for the past five years, are listed below. Trustees deemed to be
"interested persons" of the Fund for purposes of the Investment Company Act of
1940 (the "Act") are indicated by an asterisk.
Name, Position(s) with
Fund, Address and Age Principal Occupations During Past Five Years
- ---------------------- ---------------------------------------------
Mario J. Gabelli* Mr. Gabelli is Chairian of the Board,
Trustee President, and Chief Executive Officer and
One Chief Investment Officer of Gabelli Funds,
Rye, New York Inc.; Chairman of the Board, Chief Executive
10580-1434 Officer, and Chief Investment Officer of
Age: 52 GAMCO Investors, Inc.; President and Chairman
of The Gabelli Equity Trust Inc., The Gabelli
Global Multimedia Trust, Inc; President,
Director and Chief Investment Officer of
Gabelli Global Corporate Center Series Funds,
Inc.; Gabelli Investor Funds, Inc., The
Gabelli Value Fund Inc.; Gabelli Equity
Series Funds, Inc.; Trustee of The Gabelli
Growth Fund; Chairman of the Board of Gabelli
Gold Fund, Inc. and Lynch Corporation;
Director of Morgan Group, Inc.; Director and
Adviser of Gabelli International Ltd.
Felix J. Christiana Formerly Senior Vice President of Dry Dock
Trustee Savings Bank in White Plains, New York.
45 Pondfield Parkway Director of Gabelli Global Series Funds,
Mt. Vernon, New York 10552 Inc., The Gabelli Equity Trust Inc., The
Age: 70 Gabelli Global Multimedia Trust Inc., Gabelli
Series Funds, Inc.; Gabelli Equity Series
Funds, Inc., The Gabelli Value Fund Inc., and
The Treasurer's Fund, Inc. and a Trustee of
The Gabelli Growth Fund.
Anthony J. Colavita President and Attorney at Law in the law firm
Trustee of Anthony J. Colavita, P.C. since 1961.
575 White Plains Road Director of Gabelli Global Series Funds,
Eastchester, New York 10709 Inc., Gabelli Investor Funds, Inc., The
Age: 59 Gabelli Fund, Inc., Gabelli Gold Fund, Inc.,
Gabelli Equity Series Funds, Inc., The
Gabelli Value Fund Inc. and a Trustee of The
Gabelli Growth Fund and The Gabelli Money
Market Funds.
- --------------------------------------------------------------------------------
B-6
<PAGE>
- --------------------------------------------------------------------------------
Name, Position(s) with
Fund, Address and Age Principal Occupations During Past Five Years
- ---------------------- ---------------------------------------------
James P. Conn Managing Director/Chief Investment Officer,
Trustee Financial Security Assurance; since 1992.
949 Chiltern Road President and Chief Executive Officer of Bay
Hillsborough, California Meadows Operating Company from 1988 through
94010 1992. Trustee of The Gabelli Growth Fund and
Age: 57 Director of The Gabelli Equity Trust Inc. and
Gabelli Global Multimedia Trust Inc.
Anthony C. Pustorino, CPA Certified Public Accountant. Professor of
Trustee Accounting, Pace University, since 1965.
121 Arleigh Road President and shareholder of Pustorino
Douglaston, New York Puglisi & Co., P.C., certified public
11363 accountants, 1961 to 1990. Director, of The
Age: 69 Gabelli Equity Trust Inc., The Gabelli Global
Multimedia Trust Inc., Gabelli Series Funds,
Inc.; Gabelli Equity Series Funds, Inc.; The
Gabelli Value Fund Inc.; and The Treasurer's
Fund, Inc. and a Trustee of The Gabelli
Growth Fund.
Karl Otto Pohl* Managing Partner of Sal Oppenheim Jr. & Cie.
Trustee since 1991; Former President of the Deutsche
c/o Gabelli Funds Inc. Bundesbank and Chairman of its Central Bank
One Corporate Center Council (1980-1991); currently board member
Rye, New York of IBM World Trade Europe/Middle East/Africa
10580-1434 Corp.; Bertlesman AG; Zurich
Age: 65 Versicheruygs-Gesellschaft; the International
Advisory Board of General Electric Company;
the International Council for JP Morgan &
Co.; the Board of Supervisory irectors of
ROBECo/o Group; and the Supervisory Board of
Royal Dutch; German Governor, International
Monetary Fund (1980-1991); Board Member, Bank
for International Settlements (1980-1991).
Director or Trustee of all funds advised by
Gabelli Funds, Inc.
Anthonie C. van Ekris Managing Director; of Balmac International;
Trustee Chairman and Chief Officer of Balfour
Le Columbia MacLaine Corporation and Kay Corporation
11 Avenue Princess Grace (through 1990). Director, Stahel Hardmeyer
Monaco, MC 98000 A.G. (through present); Trustee, Gabelli
Age: 60 Global Series Funds, Inc., The Gabelli Growth
Fund and The Gabelli Money Market Funds;
Director, The Gabelli Series Funds, Inc.,
Gabelli Equity Series Funds, Inc. and Gabelli
Gold Fund, Inc.
Salvatore J. Zizza President and Chief Executive Officer of the
Trustee LeHigh Group, Inc. A Director of The Gabelli
470 Park Avenue South Equity Trust Inc., The Gabelli Global
11th Floor North Wing Multimedia Trust Inc., Gabelli Series Funds,
New York, New York 10016 Inc., Debe Computer Systems Corp. and a
Age: 49 Trustee of The Gabelli Growth Fund.
- --------------------------------------------------------------------------------
B-7
<PAGE>
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Name, Position(s) with
Fund, Address and Age Principal Occupations During Past Five Years
- ---------------------- ---------------------------------------------
Bruce N. Alpert Vice President, Treasurer and Chief Financial
President and Officer and Administrative Officer of the
Treasurer investment advisory division of the Adviser;
One Corporate Center Vice President and Treasurer of The Gabelli
Rye, New York Equity Trust Inc., The Gabelli Global
10580-1434 Multimedia Trust, Inc., The Gabelli Value
Age: 43 Fund Inc., Gabelli Global Series Funds, Inc.,
The Gabelli Investor Funds, Inc., President
and Treasurer, Gabelli Series Funds, Inc.;
Gabelli Equity Series Funds, Inc., and
Gabelli Money Market Funds and The Gabelli
Growth Fund. Vice President of the Westwood
Funds and Manager of Teton Advisers LLC.
J. Hamilton Crawford, Jr. Senior Vice President and General Counsel of
Secretary the investment advisory division of the
One Corporate Center Adviser. Secretary of all funds advised by
Rye, New York Gabelli Funds, Inc., Teton Advisers LLC and
10580-1438 The Westwood Funds. Attorney in private prac-
Age: 65 tice, 1990-1992; and Executive Vice President
and General Counsel of Prudential Mutual Fund
Management, Inc. from 1988-1990.
As a group, the Trustees of the Fund who are not affiliates of its Adviser
received aggregate fees of $58,500 from the Fund during its fisyal year ended
December 31, 1994.
On March 31, 1995, the outstanding voting securities of the Fund consisted
of 43,876,972 shares of beneficial interest. As a group, the officers and
Trustees of the Fund owned beneficially, directly or indirectly, less than 1% of
its outstanding voting shares.
Set forth below is certain information as to persons who owned 5% or more
of the Fund's outstanding shares as oy March 31, 1995.
Name and Address % of Class Nature of Ownership
Charles Schwab & Co. Inc. 12.4% Record (a)
101 Montgomery Street
San Francisco, CA 94104-4122
- ----------
(a) Charles Schwab & Co. disclaims beneficial ownership and no one underlying
shareholder owns beneficially more than 5% of the shares of the Fund.
- --------------------------------------------------------------------------------
B-8
<PAGE>
- --------------------------------------------------------------------------------
COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Name of Aggregate Pension or Estimated Annual Total
Person, Compensation from Retirement Benefits upon Compensation
Position Registrant for Benefits Accrued Retirement from Registrant
Fiscal Year as Part of Fund and Fund Complex
Expenses Paid to Trustees
for Calendar Year*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mario J. Gabelli $ 0 0 0 $ 0
Trustee
Anthony J. Colavita $9,000 0 0 $62,000 (10)
Trustee
Felix J. Christiana $8,000 0 0 $64,500 (9)
Trustee
James P. Conn $8,000 0 0 $30,000 (4)
Trustee
Anthony R. Pustorino $10,000 0 0 $69,000 (8)
Trustee
Karl Otto Pohl $8,000 0 0 $64,750 (14)
Trustee
Anthonie C. van Ekris $8,000 0 0 $41,500 (8)
Trustee
Salvatore J. Zizza $8,000 0 0 $35,000 (5)
Trustee
</TABLE>
- ----------
* The total compensation paid to such persons during the calendar year ending
December 31, 1994 (and, with respect to the Fund, estimated to be paid
during the Full Calendar Year). The Parenthetical number represents the
number of Investment Companies (including the Fund) from which such person
receives compensation that are considered part of the same Fund complex as
the Fund, because, among other things, they have a common investment
adviser.
INVESTMENT ADVISER
The Adviser is a New York corporation with principal offices located at One
Corporate Center, Rye, New York 10580-1434. The Adviser also serves as Adviser
to The Gabelli Growth Fund, The Gabelli Value Fund, The Gabelli Convertible
Securities Fund, Inc., The Gabelli Equity Income Fund, The Gabelli U.S. Treasury
Money Market Fund, The Gabelli Small Cap Growth Fund, Inc., The Gabelli ABC
Fund, The Gabelli Global Telecommunications Fund, The Gabelli Global Convertible
Securities Fund, The Gabelli Global Interactive Couch Potatocae Fund, and
Gabelli Gold Fund Inc., open-end investmen companies, and The Gabelli Equity
Trust, Inc., The Gabelli Convertible Securities Fund, Inc., and The Gabelli
Global Multimedia Trust, Inc., closed-end investment companies.
Pursuant to an Investment Advisory Contract, which was approved by the
shareholders of the Fund at a meeting held on May 11, 1992, the Adviser
furnishes a continuous investment program for the Fund's portfolio, makes the
day-to-day investment decisions for the Fund, arranges the portfolio
transactions of the Fund and generally manages the Fund's investments in
accordance with the stated policies of the Fund, subject to the general
supervision of the Board of Trustees of the Fund.
Under the Investment Advisory Contract, the adviser also (i) provides the
Fund with the services of persons competent to perform such supervisory,
- --------------------------------------------------------------------------------
B-9
<PAGE>
- --------------------------------------------------------------------------------
administrative, and clerical functions as are necessary to provide effective
administration of the Fund, including maintaining certain books and records and
overseeing the activities of the Fund's Custodian and Transfer Agent; (ii)
oversees the performance of administrative and professional services to the Fund
by others, including the Fund's Custodian, Transfer Agent and Dividend
Disbursing Agent, as well as accounting, auditing and other services performed
for the Fund; (iii) provides the Fund with adequate office space and facilities;
(iv) prepares, but does not pay for, the periodic updating of the Fund's
registration statement, Prospectus and Statement of Additional Information,
including the printing of such documents for the purpose of filings with the
Securities and Exchange Commission and state securities administrators, the
Fund's tax returns, and reports to the Fund's shareholders and the Securities
and Exchange Commission; (v) calculates the net asset value of shares in the
Fund; (vi) prepares, but does not pay for, all filings under the securities or
"Blue Sky" laws of such states or countries as are designated by the
Distributor, which may be required to register or qualify, or continue the
registration or qualification, of the Fund and/or its shares under such laws;
and (vii) prepares notices and agendas for meetings of the Fund's Board of
Trustees and minutes of such meetings in all matters required by the Act to be
acted upon by the Board.
Pursuant to a contract with the Adviser, The Shareholder Services Group,
Inc. (TSSG"), a subsidiary of First Data Coroporation (which is located at
Exchange Place, Boston, Massachusetts 02109). administers on behalf of the
Adviser the operations of the Fund which do not concern the investment advisory
and portfolio management services of the Adviser. For such services and the
related expenses borne by TSSG the Adviser pays it a monthly fee based on the
aggregate average daily net assets of the Funds under its administration advised
by the Adviser as follows: up to $1 billion-0.10%; $1 billion to $1.5
billion-0.08%; $1.5 billion to $3 billion-0.03%; over $3 billion-0.02%, which,
together with the services to be rendered, is subject to negotiation between the
parties and both parties retain the right unilaterally to terminate the
arrangement on 60 days notice.
The Investment Advisory Contract provides that absent willful misfeasance,
bad faith, gross negligence or reckless disregard of its duty, the Adviser and
its employees, officers, directors and controlling persons are not liable to the
Fund or any of its investors for any act or omission by the Adviser or for any
error of judgement or for losses sustained by the Fund. However, the Contract
provides that the Fund is not waiving any rights it may have with respect to any
violation of law which cannot be waived. The Contract also provides
indemnification for the Adviser and each of these persons for any conduct for
which they are not liable to the Fund. The Investment Advisory Contract in no
way restricts the Adviser from acting as Adviser to others. The Fund has agreed
by the terms of the Investment Advisory Contract that the word "Gabelli" in its
name is derived from the name of the Adviser which in turn is derived from the
name of Mario J. Gabelli; that such name is the property of the Adviser for
copyright and/or other purposes; and that, therefore, such name may freely be
used by the Adviser for other investment companies, entities or products. The
Fund has further agreed that in the event that for any reason, the Adviser
ceases to be its investment adviser, the Fund will, unless the Adviser otherwise
consents in writing, promptly take all steps necessary to change its name to one
which does not include "Gabelli."
The Investment Advisory Contract is terminable without penalty by the Fund on
sixty days' written notice when authorized either by majority vote of its
outstanding voting shares or by a vote of a majority of its Board of Trustees,
or by the Adviser on sixty days' written notice, and will automatically
terminate in the event of its "assignment" as defined by the Act. The contract
provides that, unless terminated, it will remain in effect until April 28, 1995
and from year to year thereafter as long as such continuance is annually
approved by the Board of Trustees or the shareholders of the Fund and, in either
case, by a majority vote of the Trustees who are not parties to the Agreement or
"interested persons", as defined by the Act, of any such party cast in person at
- --------------------------------------------------------------------------------
B-10
<PAGE>
- --------------------------------------------------------------------------------
a meeting called specifically for the purpose of voting on the continuance of
the Agreement.
The Investment Advisory Contract also provides that the Adviser is
obligated to reimburse to the Fund any amount by which its aggregate expenses
including the advisory fees payable to the Adviser (but excluding interest,
taxes, Rule 12b-1 expenses, brokerage commissions, certain distribution expenses
and extraordinary expenses) exceed the most restrictive expense limitation
imposed by the securities law of any state in which shares of the Fund are
registered or qualified for sale. Such limitation is currently believed to be
2.5% of the first $30 million of average net assets, 2% of the next $70 million
of average net assets, and 1.5% of average net assets in excess of $100 million.
Fund expenses are accrued monthly and the monthly fee otherwise payable to the
Adviser is reduced to the extent that Fund expenses exceed the amount of such
limitation and, to the extent such excess is greater than the monthly fee of the
Adviser, the amount of such excess is reimbursed by the Adviser. The maximum
expenses which may be incurred by the Fund in any fiscal year pursuant to the
Distribution Plan (see "Distribution Plan", below) is .25% of its average net
assets in the same fiscal year.
For the Fund's fiscal years ended December 31, 1992, December 31, 1993 and
December 31, 1994 the fee paid to the Adviser was $5,538,558, $7,863,803 anD
$9,992,690, respectively.
DISTRIBUTOR
To implement the Fund's 12b-1 Plan, the Fund has entered into a
Distribution Agreement with Gabelli & Company, Inc. (the "Distributor"), a New
York corporation which is an indirect subsidiary of the Adviser, having
principal offices located at One Corporate Center, Rye, New York 10580-1434. The
Distributor acts as agent of the Fund for the continuous offering of its shares
on a best efforts basis.
DISTRIBUTION PLAN
During the fiscal year ended December 31, 1994, the Fund paid distribution
expenses under the Plan of $1,491,152. Of this amount paid by the Fund pursuant
to the Plan, $446,597 was spent on advertising, $54,282 on printing, postage and
stationary, $55,909 on overhead support expenses and $934,364 on salaries of
personnel of the Distributor.
Portfolio Transactions and Brokerage
Under the Investment Advisory Agreement, the Adviser is authorized on
behalf of the Fund to employ brokers to effect the purchase or sale of portfolio
securities with the objective of obtaining prompt, efficient and reliable
execution and clearance of such transactions at the most favorable price
obtainable ("best execution") at reasonable expense. Transactions in securities
other than those for which a securities exchange is the principal market are
generally done with a brokerage firm and a commission is paid wherever it
appears that the broker can obtain a more favorable overall price. In general,
there may be no stated commission on principal transactions in over-the counter
securities, but the prices of such securities may usually include undisclosed
commissions or markups.
When consistent with the objective of obtaining best execution, Fund brokerage
may be directed to brokers or dealers which furnish brokerage or research
services to the Fund or the Adviser of the type described in Section 28(e) of
the Securities Exchange Act of 1934. The commissions charged by a broker
furnishing such brokerage or research services may be greater than that which
another qualified broker might charge if the Adviser determines, in good faith,
that the amount of such greater commission is reasonable in relation to the
- --------------------------------------------------------------------------------
B-11
<PAGE>
- --------------------------------------------------------------------------------
value of the additional brokerage or research services provided by the executing
broker, viewed in terms of either the particular transaction or the overall
responsibilities of the Adviser or its advisory affiliates to the accounts over
which they exercise investment discretion. Since it is not feasible to do so,
the Adviser need not attempt to place a specific dollar value on such services
or the portion of the commission which reflects the amount paid for such
services but must be prepared to demonstrate a good faith basis for its
determinations.
Investment research obtained by allocations of Fund brokerage is used to
augment the scope and supplement the internal research and investment strategy
capabilities of the Adviser but does not reduce the overall expenses of the
Adviser to any material extent. Such investment research may be in written form
or through direct contact with individuals and includes information on
particular companies and industries as well as market, economic or institutional
activity areas. Research services furnished by brokers through which the Fund
effects securities transactions are used by the Adviser and its advisory
affiliates in carrying out their responsibilities with respect to all of their
accounts over which they exercise investment discretion. Such investment
information may be useful only to one or more of the other accounts of the
Adviser and its advisory affiliates, and research information received for the
commissions of those particular accounts may be useful both to the Fund and one
or more of such other accounts.
Neither the Fund nor the Adviser has any agreement or legally binding
understanding with any broker regarding any specific amount of brokerage
commissions which will be paid in recognition of such services. However, in
determining the amount of portfolio commissions directed to such brokers, the
Adviser does consider the level of services provided and, based on such
determinations, has allocated brokerage commissions of $355,059 on portfolio
transactions in the principal amounts of $262,970,877 during 1994. The average
commission on these transactions was $.05 per share.
The Adviser may also place orders for the purchase or sale of portfolio
securities with Gabelli and Company, Inc. ("Gabelli"), a broker-dealer member of
the National Association of Securities Dealers which is an affiliate of the
Adviser, when it appears that, as an introducing broker or otherwise, Gabelli
can obtain a price and execution which is at least as favorable as that
obtainable by other qualified brokers. As required by Rule 17e-1 under the Act,
the Board of Trustees has adopted "Procedures" which provide that commissions
paid to Gabelli on stock exchange transactions may not exceed that which would
have been charged by another qualified broker or member firm able to effect the
same or a comparable transaction at an equally favorable price and contains a
schedule setting forth maximum commission charges for such transactions designed
to reflect that standard. Rule 17e-1 and the Procedures contain requirements
that the Board, including its Independent Trustees, conduct periodic compliance
reviews of such brokerage allocations and review such schedule at least annually
for its continuing compliance with the foregoing standard. The Adviser and
Gabelli are also required to furnish reports and maintain records in connection
with such reviews.
To obtain the best execution of portfolio transactions on the New York
Stock Exchange, Gabelli controls and monitors the execution of such transactions
on the floor of the Exchange through independent "floor brokers" or through the
Designated Order Turnaround ("DOT") System of the Exchange. Such transactions
are then cleared, confirmed to the Fund for the account of Gabelli, and settled
directly with the Custodian of the Fund by a clearing house member firm which
remits the commission less its clearance charges to Gabelli. Pursuant to an
agreement with the Fund, Gabelli pays all charges incurred for such services and
reports at least quarterly to the Board the amount of such expenses and
commissions. The net compensation realized by Gabelli for its brokerage services
is subject to the approval of the Board and the Independent Trustees of the
Fund who must approve the continuance of the arrangement at least annually.
- --------------------------------------------------------------------------------
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<PAGE>
- --------------------------------------------------------------------------------
Commissions paid by the Fund pursuant to the arrangement may not exceed the
commission level specified by the Procedures described above. Gabelli may also
effect Fund portfolio transactions in the same manner and pursuant to the same
arrangements on other national securities exchanges which adopt direct order
access rules similar to those of the New York Stock Exchange.
The amount of the commissions paid by the Fund in each of the last three
years, the percentage as well as the amount of such commissions paid to Gabelli,
and the percentage ratio which the aggregate principal amount of such
transactions bears to the aggregate dollar amount of all portfolio transactions
on which commissions were paid are as follows:
Gabelli and Company, Inc. and Affiliates
----------------------------------------
Year Ended Total Comm. Percentage of Percentage of
Paid Amount Total Commissions Principal Amount
- ---------- ----------- ------- ----------------- ----------------
12/31/92 $262,972 $37,190 0.14 0.20
12/31/93 $357,955 $40,480 0.11 0.18
12/31/94 $355,059 $24,043 .06 0.13
The percentage of total Fund commissions paid to Gabelli differs from the
percentage of the principal amounts involved because commissions paid to Gabelli
are computed on a cents per share basis without regard to principal amount.
REDEMPTION OF SHARES
Payment of the redemption price for shares redeemed may be made either in
cash or in portfolio securities (selected in the discretion of the Board of
Trustees of the Fund and taken at their value used in determining the Fund's net
asset value per share as described under "Net Asset Value"), or partly in cash
and partly in portfolio securities. However, payments will be made wholly in
cash unless the Board of Trustees believes that economic conditions exist which
would make such a practice detrimental to the best interests of the Fund. If
payment for shares redeemed is made wholly or partly in portfolio securities,
brokerage costs may be incurred by the investor in converting the securities to
cash. The Fund will not distribute in kind portfolio securities that are not
readily marketable. The Fund has filed a formal election with the Securities and
Exchange Commission pursuant to which the Fund will only effect a redemption in
portfolio securities where the particular shareholder of record is redeeming
more than $250,000 or 1% of the Fund's total net assets, whichever is less,
during any 90 day period. In the opinion of the Fund's management, however, the
amount of a redemption request would have to be significantly greater than
$250,000 before a redemption wholly or partly in portfolio securities would be
made.
Cancellation of purchase orders for Fund shares (as, for example, when
checks submitted to purchase shares are returned unpaid) causes a loss to be
incurred when the net asset value of the Fund shares on the date of cancellation
is less than on the original date of purchase. The investor is responsible for
such loss, and the Fund may reimburse itself or the Distributor for such loss by
automatically redeeming shares from any account registered at any time in that
shareholder's name, or by seeking other redress. In the event shares held in the
account of such shareholder are not sufficient to cover such loss, the
Distributor will promptly reimburse the Fund for the amount of such unrecovered
loss.
- --------------------------------------------------------------------------------
B-13
<PAGE>
- --------------------------------------------------------------------------------
NET ASSET VALUE
For purposes of determining the Fund's net asset value per share, readily
marketable portfolio securities listed on the New York Stock Exchange are
valued, except as indicated below, at the last sale price reflected at the close
of the regular trading session the New York Stock Exchange on the business day
as of which such value is being determined. If there has been no sale on such
day, the securities are valued at the mean of the closing bid and asked prices
on such day. If no bid or asked prices are quoted on such day, then the security
is valued by such method as the Board of Trustees shall determine in good faith
to reflect its fair market value. Readily marketable securities not listed on
The New York Stock Exchange but listed on other national securities exchanges or
admitted to trading on the National Association of Securities Dealers Automated
Quotations, Inc. ("NASDAQ") National List are valued in like manner. Portfolio
securities traded on more than one national securities exchange are valued at
the last sale price on the business day as of which such value is being
determined as reflected on the tape at the close of the exchange representing
the principal market for such securities.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by the Adviser to
be over-the-counter but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ or, in the case of securities not quoted by NASDAQ, the
National Quotation Bureau or such other comparable sources as the Board of
Trustees deems appropriate to reflect their fair value.
United States Government obligations and other debt instruments having
sixty days or less remaining until maturity are stated at amortized cost. Debt
instruments having a greater remaining maturity will be valued at the highest
bid price obtained from a dealer maintaining an active market in that security
or on the basis of prices obtained from pricing service approved as reliable by
the Board of Trustees. All other investment assets, including restricted and not
readily marketable securities, are valued under procedures established by and
under the general supervision and responsibility of the Fund's Board of Trustees
designed to reflect in good faith the fair value of such securities.
As indicated in the Prospectus, the net asset value per share of the Fund's
shares will be determined as of the close of the regular trading session of the
New York Stock Exchange on each day that the New York Stock Exchange is open for
trading. That Exchange annually announces the days on which it will not be open
for trading; the most recent announcement indicates that it will not be open on
the following days: New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. However, that
Exchange may close on days not included in that announcement.
INVESTMENT PERFORMANCE INFORMATION
The investment performance of the Fund quoted in advertising or sales
literature for the sale of its shares will be calculated on a total return basis
which assumes the reinvestment of all dividends and distributions. Total return
is computed by comparing the value of an assumed investment in Fund shares at
the offering price in effect at the beginning of the period shown with the
redemption price of the same investment at the end of the period (including
share(s) accrued thereon by the reinvestment of dividends and distributions).
Performance quotations given as a percentage will be derived by dividing the
amount of such total return by the amount of the assumed investment. When the
period shown is greater than one year, the result is referred to as cumulative
performance or cumulative total return. Performance quotations will ordinarily
be accompanied by the average annual total return of the Fund since its
inception as well as its total return for the past five years and for the twelve
- --------------------------------------------------------------------------------
B-14
<PAGE>
- --------------------------------------------------------------------------------
months as of the end of the most recent quarter of operations. Quotations of
average annual total return for periods greater than one year will be the
compounded annual rate of return which equates to the result of the previously
described calculation of cumulative total return. Computed in the manner
described, the total return of the Fund has been:
Period ended 12/31/86 12.80% (a)
Year ended 12/31/87 16.23%
Year ended 12/31/88 31.12%
Year ended 12/31/89 26.20%
Year ended 12/31/90 [5.00%]
Year ended 12/31/91 18.1%
Year ended 12/31/92 14.9%
Year ended 12/31/93 21.8%
Year ended 12/31/94 (0.1)%
- -----------------------------------------
Average annual rate of total return from inception through
year ended December 31, 1994 14.9% (a)
Average annual return for 5 years through year ended
December 31, 1994 9.4%
- ----------
(a) From inception on 3/3/86.
The formula for computing the foregoing annual rate of total return is:
T = (R/P)^1/n - 1
P = Investment at the beginning of the period.
T = Compounded annual rate of total return.
n = Number of years.
R = Redemption value of the same investment at the end of the period
assuming the reinvestment of all dividends and distributions.
Investors are cautioned that past results are not necessarily representative of
future results; that investment performance is primarily a function of portfolio
management (which is affected by the economic and market environment as well as
the volatility of portfolio investments) and operating expenses; and that
performance information, such as that described above, may not provide a valid
basis of comparison with investments and investment companies using a different
method of computing performance data.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York
10022, is counsel to the Fund.
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York,
10036, independent accountants, have been selected to examine and express their
opinion on the Fund's annual financial statements.
- --------------------------------------------------------------------------------
B-15
<PAGE>
- --------------------------------------------------------------------------------
GENERAL INFORMATION
The Fund's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law, but nothing in the
Declaration of Trust protects a Trustees against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office. Under the Massachusetts law, shareholders of such a trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Fund
itself is unable to meet its obligations since the Declaration of Trust provides
for indemnification and reimbursement of expenses out of the property of the
Fund to any shareholder held personally liable for any obligation of the Fund
and also provides that the Fund shall, if requested, assume the defense of any
claim made against any shareholder for any act or obligation of the Trust and
satisfy any judgment recovered thereon.
The Fund reserves the right to create and issue a number of series of
shares, in which case the shares of each series would participate equally in the
earnings, dividends and assets of the particular series and would vote
separately to approve management agreements or changes in investment policies,
but shares of all series would vote together in the election or selection of
Trustees, principal underwriters and accountants and on any proposed material
amendment to the Fund's Declaration of Trust. Upon liquidation of the Fund,
shareholders of each series would be entitled to share pro rata in the net
assets of their respective series available for distribution to shareholders.
Shareholders are entitled to one vote for each share held (and fractional
votes for fractional shares) and may vote on the election of Trustees and on
other matters submitted to meetings of shareholders. It is not contemplated that
regular annual meetings of shareholders will be held. The Declaration of Trust
provides that the Fund's shareholders have the right, upon the declaration in
writing or vote of more than two thirds of its outstanding shares, to remove a
Trustee. The Trustees will call a meeting of shareholders to vote upon the
written request of the shareholders of 331/[I23% of its shares (10% in the case
of removal of a Trustee). In addition, ten shareholders holding the lesser of
$25,000 worth or one percent of Fund shares may advise the Trustees in writing
that they wish to communicate with other shareholders for the purpose of
requesting a meeting to remove a Trustee. The Trustees will then, if requested
by the applicants, mail at the applicants' expense, the applicants'
communication to all other shareholders. Except for a change in the name of the
Trust, no amendment may be made to the declaration of Trust without the
affirmative vote of the holders of more than 50% of its outstanding shares.
Shareholders have no preemptive or conversion rights. The Fund may be terminated
upon the sare of its assets to another issuer, if such sale is approved by the
vote of the holders of more than 50% of its outstanding shares. If not so
terminated, the Fund will continue indefinitely.
- --------------------------------------------------------------------------------
B-16
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF CORPORATE DEBT RATINGS
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adeqate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Unrated: Where no rating has been assigned or where a rating has been suspended
or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities that are not rated
as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
- --------------------------------------------------------------------------------
B-17
<PAGE>
- --------------------------------------------------------------------------------
4. The issue was privately placed, in which case the rating is not
published in Moody's Investors Services, Inc.'s publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgement to be formed; if a bond is
called for redemption; or for other reasons.
Note: Those bonds in the Aa A, Baa Ba and B groups which Moody's believe
possess the strongest investment attributes are designated by the
symbols Aa-1, A-1, Baa-1 and B-1.
STANDARD & POOR'S RATING GROUP
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's
Corporation ("S&P"). Capacity to pay interest and repay principal is
extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in the highest rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than in higher
rated categories.
BB, B CCC, CC, C: Bonds rated BB, B, CCC, CC and C are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of this obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and
protective characteristics, they are outweighed by large uncertainties
of major risk exposures to adverse conditions.
C1: The rating C1 is reserved for income bonds on which no interest is
being paid.
D: Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
Plus(+) Or Minus(-): The ratings from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major
rating categories
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
- --------------------------------------------------------------------------------
B-18
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
OF THE GABELLI ASSET FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Asset Fund (the "Fund")
at December 31, 1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1994 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 9, 1995
1994 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
On December 30, 1994, the Fund paid to shareholders an ordinary income
dividend (comprised of net investment income and short-term capital gains) of
$0.446 per share and a distribution from long-term capital gains of $0.610 per
share. For 1994, 84.05% of such ordinary income dividends qualifies for the
dividend received deduction available to corporations. The distribution from
long-term capital gains is designated as a "Capital Gain Dividend" and is
taxable to shareholders as a long-term capital gain.
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Fund during 1994
which was derived from U.S. Treasury Securities was 16.01%. Such income is
exempt from state and local income tax in most states. However, many states,
including New York and California, allow a tax exemption for a portion of the
income earned only if a mutual fund has invested at least 50% of its assets at
the end of each quarter of the Fund's fiscal year in U.S. Government Securities.
The Gabelli Asset Fund did not meet this strict requirement in 1994. Due to the
diversity in state and local tax laws it is recommended that you consult your
personal tax adviser for the applicability of the information provided as to
your own situation.
- --------------------------------------------------------------------------------
B-19
<PAGE>
- --------------------------------------------------------------------------------
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS --
87.93%
AIRLINES -- 0.76%
140,000 AMR Corporation*..... $ 8,853,387 $ 7,455,000
------------ ------------
AUTOMOTIVE -- 1.91%
18,000 Chrysler
Corporation........ 725,025 882,000
62,500 Ford Motor Company... 1,493,083 1,750,000
365,000 General Motors
Corporation........ 13,222,875 15,421,250
24,000 Harley-Davidson,
Inc. .............. 236,600 672,000
------------ ------------
15,677,583 18,725,250
------------ ------------
AUTOMOTIVE: PARTS AND
ACCESSORIES --
5.57%
33,500 APS Holding
Corporation*....... 519,250 946,375
25,000 Borg-Warner
Automotive,
Inc. .............. 601,647 628,125
5,000 Detroit Diesel
Corporation*....... 137,465 106,875
340,000 Echlin Inc. ......... 4,718,528 10,200,000
138,000 Federal-Mogul
Corporation........ 2,474,860 2,777,250
680,000 GenCorp Inc. ........ 3,910,013 8,075,000
270,000 Genuine Parts
Company............ 9,107,564 9,720,000
170,000 Handy & Harman....... 2,283,515 2,613,750
120,000 Johnson Controls,
Inc. .............. 3,140,842 5,880,000
145,000 Modine Manufacturing
Company*........... 1,376,219 4,168,750
36,250 Myers Industries,
Inc.*.............. 139,536 507,500
60,000 Pep Boys -- (Manny,
Moe & Jack)*....... 975,775 1,860,000
170,000 Quaker State
Corporation........ 2,329,573 2,380,000
60,000 RB&W Corporation*.... 316,663 480,000
50,000 Republic Automotive
Parts, Inc.*....... 278,125 671,875
15,000 SPX Corporation*..... 292,750 249,375
100,000 Standard Motor
Products, Inc. .... 708,500 1,975,000
13,200 Superior Industries
International,
Inc.*.............. 76,515 348,150
34,500 UAP Inc.*............ 380,566 359,708
34,000 Wynn's International,
Inc. .............. 562,295 748,000
------------ ------------
34,330,201 54,695,733
------------ ------------
AVIATION: PARTS AND
SERVICES -- 0.46%
100,000 Curtiss-Wright
Corporation........ 2,479,222 3,637,500
73,000 Hi-Shear Industries
Inc.*.............. 1,004,317 282,875
21,000 Hudson General
Corporation........ 397,275 330,750
6,000 PS Group, Inc.*...... 76,425 65,250
12,000 Whittaker
Corporation*....... 51,060 243,000
------------ ------------
4,008,299 4,559,375
------------ ------------
BROADCASTING -- 3.97%
45,000 BHC Communications,
Inc. Class A*...... 3,232,072 3,307,500
86,000 Capital Cities/ABC,
Inc. .............. 4,120,694 7,331,500
12,695 CBS Inc. ............ 412,268 702,986
374,405 Chris-Craft
Industries,
Inc. .............. 8,421,876 12,916,972
61,800 Chris-Craft
Industries, Inc.
Class B
Convertible(b)..... 1,132,525 2,132,100
5,000 Grupo Televisa,
S.A................ 164,104 158,750
125,000 Havas, S.A........... 2,446,059 2,437,500
53,000 LIN Television
Corporation*....... 587,796 1,205,750
60,000 Liberty
Corporation........ 1,275,129 1,522,500
24,407 Osborn Communications
Corporation*....... 217,919 183,052
400,000 Television
Broadcasting Ord... 1,816,844 1,597,560
100,000 United Television,
Inc.*.............. 2,880,469 5,450,000
------------ ------------
26,707,755 38,946,170
------------ ------------
BUSINESS SERVICES --
1.40%
9,500 Berlitz
International,
Inc.*.............. 130,475 123,500
150,000 Gerber Scientific,
Inc. .............. 1,448,233 1,950,000
124,000 International
Business Machines
Corporation........ 6,294,720 9,114,000
72,000 Landauer, Inc. ...... 447,792 1,197,000
65,000 Nashua Corporation... 2,187,530 1,332,500
------------ ------------
10,508,750 13,717,000
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
CABLE -- 3.52%
60,000 BET Holdings, Inc.
Class A*........... $ 1,030,738 $ 907,500
10,000 Cablevision Systems
Corporation Class
A*................. 433,875 505,000
60,000 Comcast Corporation
Class A............ 878,120 922,500
30,000 Comcast Corporation
Special Class A.... 627,204 470,625
111 International
CableTel
Incorporated*...... 465 3,080
165,000 International Family
Entertainment, Inc.
Class B*........... 2,217,747 2,083,125
390,000 Media General, Inc.
Class A............ 9,926,407 11,066,250
80,000 Multimedia, Inc. .... 1,906,064 2,280,000
152,900 QVC, Inc.*........... 6,672,099 6,440,912
40,000 Shaw Communications
Inc.*.............. 363,399 285,164
400,250 Tele-Communications,
Inc. Class A*...... 8,709,048 8,705,438
50,000 United International
Holdings Class
A*................. 657,213 875,000
------------ ------------
33,422,379 34,544,594
------------ ------------
COMMERCIAL SERVICES
-- 0.53%
250,000 Ecolab, Inc. ........ 3,954,053 5,250,000
------------ ------------
CONSUMER PRODUCTS
AND SERVICES -- 9.97%
460,000 American Brands,
Inc. .............. 15,805,227 17,250,000
60,000 Black & Decker
Corporation........ 1,102,970 1,425,000
195,000 Brunswick
Corporation........ 2,676,275 3,680,625
262,000 Carter-Wallace,
Inc. .............. 4,966,364 3,406,000
180,000 Church & Dwight Co.,
Inc. .............. 4,304,340 3,240,000
25,000 Duracell
International
Inc. .............. 720,736 1,084,375
50,000 Eastman Kodak
Company............ 2,114,199 2,387,500
145,000 Fieldcrest Cannon,
Inc. .............. 2,024,147 3,697,500
43,000 First Brands
Corporation........ 1,130,275 1,505,000
261,000 General Electric
Company............ 12,749,541 13,311,000
26,500 Gillette Company..... 1,493,550 1,980,875
35,000 Libbey Inc. ......... 453,600 612,500
72,500 Outboard Marine
Corp............... 1,416,638 1,422,813
35,000 Phillip Morris
Companies Inc. .... 1,744,024 2,012,500
100,000 Phillips Electronics
N.V................ 1,529,543 2,937,500
185,000 Procter & Gamble
Company............ 10,047,979 11,470,000
245,000 Ralston Purina
Group.............. 9,242,451 10,933,125
180,000 Rollins, Inc. ....... 2,111,982 4,117,500
50,800 Scotts Company Class
A*................. 799,431 806,450
127,500 Tambrands Inc. ...... 5,281,523 4,924,687
330,000 Whitman
Corporation........ 3,085,163 5,692,500
------------ ------------
84,799,958 97,897,450
------------ ------------
COUNTRY/CLOSED-END
FUNDS -- 0.07%
59,972 Royce Value Trust
Inc. .............. 645,985 659,693
------------ ------------
DIVERSIFIED INDUSTRIAL
-- 4.58%
45,000 GATX Corporation..... 1,039,561 1,980,000
10,000 ITEL Corporation*.... 180,175 346,250
100,000 ITT Corporation...... 5,939,166 8,862,500
150,000 Katy Industries,
Inc. .............. 1,357,500 1,275,000
6,500 Kyocera Corporation
ADR................ 448,063 968,500
375,000 Lamson & Sessions
Co.*............... 2,011,040 2,250,000
80,000 Lawter International,
Inc. .............. 564,000 970,000
135,000 Minnesota Mining and
Manufacturing
Company............ 7,092,138 7,205,625
30,000 Morrison Knudsen
Corporation........ 594,997 382,500
62,000 National Service
Industries,
Inc. .............. 1,327,611 1,588,750
145,000 St. Joe Paper
Company............ 4,974,244 7,866,250
85,000 Tenneco Inc. ........ 3,647,390 3,612,500
60,000 Thomas Industries
Inc. .............. 920,097 862,500
215,000 Trinity Industries,
Inc................ 2,935,405 6,772,500
------------ ------------
33,031,387 44,942,875
------------ ------------
ENERGY -- 3.12%
49,500 Atlantic Richfield
Company............ 5,323,951 5,036,625
35,000 British Petroleum
Company plc........ 1,568,032 2,795,625
135,000 Burlington Resources
Inc. .............. 6,062,139 4,725,000
30,000 Chevron
Corporation........ 1,016,500 1,338,750
170,000 Eastern
Enterprises........ 4,578,075 4,462,500
60,000 Enron Oil & Gas
Company*........... 548,976 1,125,000
110,000 Exxon Corporation.... 6,704,069 6,682,500
330,000 Kaneb Services,
Inc.*.............. 1,624,802 701,250
</TABLE>
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
6,500 McDermott
International,
Inc. .............. $ 162,263 $ 160,875
50,000 PacifiCorp*.......... 971,882 906,250
67,500 Southwest Gas
Corporation........ 1,200,671 953,438
30,000 Texaco Inc. ......... 1,890,875 1,796,250
------------ ------------
31,652,235 30,684,063
------------ ------------
ENTERTAINMENT: GENERAL
-- 3.74%
55,000 Bay Meadows Operating
Company............ 908,525 790,625
15,000 Gaylord Entertainment
Company Class A.... 308,500 341,250
53,000 GC Companies Inc*.... 1,264,497 1,391,250
30,000 GTECH Holdings
Corporation*....... 547,813 611,250
20,000 PolyGram NV.......... 574,275 922,500
20,000 Santa Anita Realty
Enterprises
Inc. .............. 357,975 275,000
7,800 Sony Music
Entertainment
Inc. .............. 334,781 438,774
110,000 THORN EMI plc ADR*... 1,609,000 1,801,250
445,000 Time Warner, Inc. ... 9,709,872 15,630,625
10,480 Todd-AO Corporation
Class A*........... 31,440 49,780
118,000 Viacom Inc. Class
A*................. 1,655,352 4,911,750
236,000 Viacom Inc. Class
B*................. 6,266,717 9,587,500
------------ ------------
23,568,747 36,751,554
------------ ------------
FINANCIAL SERVICES
-- 4.76%
1 Al-Zar Ltd.(b)*...... -0- 350
640,000 American Express
Company............ 15,593,345 18,880,000
220 Berkshire Hathaway
Inc.*.............. 874,549 4,488,000
35,000 Commerzbank AG ADR... 1,366,545 1,483,125
14,000 Deutsche Bank AG
ADR................ 6,094,375 6,482,000
2,000 Financial Security
Assurance.......... 44,100 42,000
3,000 H&R Block, Inc. ..... 104,775 111,375
370,000 Lehman Brothers
Holdings, Inc. .... 4,871,475 5,457,500
15,000 Mellon Bank
Corporation........ 559,141 459,375
82,000 Midland Company...... 2,515,119 3,546,500
58,000 Salomon Inc. ........ 2,064,286 2,175,000
25,000 State Street Boston
Corporation........ 717,713 715,625
10,000 SunTrust Banks,
Inc. .............. 424,879 477,500
11,941 Transamerica
Corporation........ 583,636 594,065
4,000 U.S. Trust
Corporation*....... 189,500 254,000
30,000 Unitrin, Inc. ....... 975,193 1,290,000
9,500 Value Line, Inc. .... 138,000 294,500
------------ ------------
37,116,631 46,750,915
------------ ------------
FOOD AND BEVERAGE --
7.73%
10,000 Brown-Forman
Corporation Class
A.................. 281,475 310,000
15,000 Cadbury Schwepps plc
ADS................ 390,750 405,000
60,000 Campbell Soup
Company............ 1,483,100 2,647,500
72,100 Chock Full o'Nuts
Corporation........ 451,407 414,575
23,000 Coca-Cola Company.... 395,569 1,184,500
200,000 Coca-Cola Enterprises
Inc. .............. 3,334,664 3,575,000
17,000 CPC International
Inc................ 602,088 905,250
47,000 Delchamps, Inc. ..... 1,111,792 716,750
110,000 Dole Food Company,
Inc.*.............. 3,385,250 2,530,000
202,000 Dr. Pepper/Seven-Up
Companies, Inc.*... 3,744,499 5,176,250
2,500 Farmer Brothers
Company............ 200,625 310,000
62,500 General Mills,
Inc.*.............. 1,689,250 3,562,500
15,000 Heinz Co. (H.J.)..... 555,750 551,250
40,000 Hershey Foods
Corporation........ 1,715,563 1,935,000
84,000 Kellogg Company...... 3,173,732 4,882,500
325,000 PepsiCo, Inc. ....... 10,731,153 11,781,250
1,110,000 Pet Incorporated..... 18,242,747 21,922,500
120,000 Quaker Oats
Company............ 3,293,597 3,690,000
69,933 Ralcorp Holdings
Inc.*.............. 1,047,674 1,556,009
88,000 Ralston-Continental
Baking Group*...... 807,887 330,000
25,000 Robert Mondavi Wine
Corporation Class
A*................. 225,237 287,500
150,000 Seagram Company
Ltd................ 3,957,374 4,425,000
58,000 Wrigley (Wm.) Jr.
Company*........... 2,366,931 2,863,750
------------ ------------
63,188,114 75,962,084
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
HEALTH CARE -- 2.38%
10,000 Amgen Inc.*.......... $ 361,229 $ 590,000
10,000 Biogen, Inc.*........ 299,450 417,500
20,000 BioWhittaker,
Inc.*.............. 99,053 127,500
200,000 Johnson & Johnson.... 8,949,835 10,950,000
67,500 Mallinckrodt Group,
Inc. .............. 2,090,282 2,016,562
80,000 Marion Merrell Dow
Inc. .............. 2,763,814 1,630,000
99,999 Merck & Co., Inc. ... 3,387,816 3,812,462
50,000 Pfizer Inc. ......... 3,391,165 3,862,500
------------ ------------
21,342,644 23,406,524
------------ ------------
HOTELS/CASINOS --
2.29%
100,000 Caesars World,
Inc.*.............. 5,024,463 6,675,000
160,000 Hilton Hotels
Corporation........ 7,598,311 10,780,000
140,000 Ladbroke Group plc... 360,373 375,020
112,000 Mirage Resorts
Incorporated*...... 1,151,217 2,296,000
23,500 Promus Companies*.... 300,725 728,500
65,000 United Inns, Inc.*... 249,105 1,608,750
------------ ------------
14,684,194 22,463,270
------------ ------------
INDUSTRIAL EQUIPMENT
AND SUPPLIES --
10.79%
300,000 AMETEK, Inc. ........ 4,074,627 5,062,500
12,000 AMP Incorporated..... 906,350 873,000
25,000 Amphenol Corporation
Class A*........... 286,812 600,000
274,000 AptarGroup, Inc. .... 4,058,733 7,877,500
15,000 CalMat Co. .......... 313,362 260,625
64,000 Caterpillar Inc. .... 1,729,874 3,528,000
65,000 CLARCOR Inc. ........ 1,239,362 1,381,250
130,000 Crane Co. ........... 3,397,840 3,493,750
100,000 CTS Corporation...... 2,084,351 2,775,000
152,500 Deere & Company...... 6,899,735 10,103,125
325,000 Donaldson Company,
Inc. .............. 3,650,551 7,800,000
4,500 Duriron Company,
Inc. .............. 25,600 79,875
8,000 Elcor Corporation*... 53,425 123,000
6,000 Fibreboard
Corporation*....... 172,425 164,250
6,500 Florida Rock
Industries,
Inc. .............. 189,018 177,937
68,000 Greif Brothers
Corporation Class
A.................. 2,427,730 2,941,000
90,000 Guardsman Products,
Inc. .............. 997,358 1,125,000
10,546 Hach Company*........ 116,905 152,917
270,500 IDEX Corporation*.... 4,750,150 11,428,625
201,000 Kollmorgen
Corporation........ 1,875,030 1,155,750
10,000 Lafarge
Corporation........ 182,500 177,500
25,000 Lufkin Industries,
Inc. .............. 455,777 462,500
40,000 M/A-Com, Inc.*....... 197,525 290,000
40,000 Manitowoc Company,
Inc................ 869,205 865,000
270,650 Mark IV Industries,
Inc. .............. 2,176,071 5,345,338
8,200 Martin Marietta
Materials Group.... 182,160 145,550
9,500 Minerals Technologies
Inc. .............. 251,463 277,875
335,000 Navistar
International
Corporation........ 7,520,643 5,066,875
165,000 Nortek, Inc.*........ 659,077 1,959,375
4,333 Nortek, Inc. Special
Convertible*....... 59,049 51,454
10,000 PACCAR Inc.*......... 522,021 442,500
72,000 Pittway
Corporation........ 1,065,236 2,808,000
200,000 Pittway Corporation
Class A............ 2,790,133 8,050,000
44,500 Sequa Corporation
Class A*........... 1,877,670 1,157,000
70,000 Sequa Corporation
Class B*........... 3,685,733 1,863,750
79,200 SPS Technologies,
Inc.*.............. 2,210,879 2,009,700
12,000 Truck Components
Inc.*.............. 120,000 114,000
20,000 Valmont Industries,
Inc. .............. 349,658 340,000
370,000 Varity
Corporation*....... 8,130,425 13,412,500
------------ ------------
72,554,463 105,942,021
------------ ------------
MERCHANDISING: FOOD
-- 0.18%
20,000 Albertson's, Inc. ... 545,500 580,000
50,000 Kroger Co.*.......... 1,156,250 1,206,250
------------ ------------
1,701,750 1,786,250
------------ ------------
MEDICAL EQUIPMENT --
0.03%
15,000 Puritan-Bennett
Corporation........ 288,525 315,000
------------ ------------
MERCHANDISING:
SPECIALTY -- 0.14%
120,000 Burlington Coat
Factory Warehouse
Corporation*....... 1,648,500 1,410,000
------------ ------------
METALS AND MINING
-- 0.58%
34,350 American Barrick
Resources
Corporation........ 733,756 764,288
68 Bucyrus-Erie
Company*........... 3,415 474
30,000 Echo Bay Mines
Ltd................ 411,000 318,750
35,000 Homestake Mining
Company............ 610,562 599,375
</TABLE>
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
100,000 Horsham
Corporation........ $ 1,401,938 $ 1,275,000
28,000 Newmont Gold
Company............ 1,189,303 997,500
90,000 Pegasus Gold Inc..... 1,732,494 1,023,750
17,500 Placer Dome Inc...... 336,400 380,625
100,000 Royal Oak Mines
Inc.*.............. 461,929 325,000
------------ ------------
6,880,797 5,684,762
------------ ------------
PAPER & FOREST
PRODUCTS -- 0.10%
8,000 Plum Creek Timber
Company L.P........ 134,645 160,000
27,500 Rayonier Inc......... 615,664 838,750
------------ ------------
750,309 998,750
------------ ------------
PUBLISHING -- 3.12%
50,000 American Media
Inc................ 820,000 812,500
6,000 Central Newspapers,
Inc................ 152,488 168,750
5,000 E.W. Scripps Company
Class A............ 99,627 151,250
375,000 Harcourt General,
Inc.*.............. 7,892,631 13,218,750
32,000 McClatchy Newspapers,
Inc. Class A....... 640,975 688,000
80,000 McGraw-Hill, Inc..... 4,572,950 5,350,000
164,993 New York Times
Company Class A.... 2,527,863 3,650,470
13,000 News Corporation
Limited ADS........ 207,737 203,125
76,000 Reader's Digest
Association, Inc.
Class B............ 3,018,597 3,401,000
320,000 Western Publishing
Group, Inc.*....... 4,671,913 3,040,000
------------ ------------
24,604,781 30,683,845
------------ ------------
RETAIL -- 1.03%
14,500 Aaron Rents, Inc.
Class A............ 85,734 184,875
13,000 Aaron Rents, Inc.
Class B............ 72,755 156,000
4,000 Crown Books
Corporation*....... 53,700 62,000
120,800 Earl Schelb, Inc.*... 859,814 709,700
60,000 Jostens, Inc......... 1,148,355 1,117,500
12,700 Lillian Vernon
Corporation........ 137,058 193,675
570,000 Neiman Marcus
Group*............. 8,391,412 7,695,000
------------ ------------
10,748,828 10,118,750
------------ ------------
RETAIL: FOOD & DRUG
-- 0.19%
70,000 American Stores
Company............ 1,766,213 1,881,250
------------ ------------
SPECIALTY CHEMICALS
-- 0.61%
25,000 E.I. Du Pont De
Nemours & Co. ..... 1,485,125 1,406,250
158,000 Ferro Corporation.... 3,102,778 3,772,250
45,000 Pratt & Lambert,
Inc. .............. 647,100 843,750
------------ ------------
5,235,003 6,022,250
------------ ------------
TELECOMMUNICATIONS
-- 9.97%
380,000 AT&T Corporation..... 18,158,661 19,095,000
200,000 BCE Inc. ............ 7,001,325 6,425,000
30,000 BC TELECOM Inc.*..... 537,319 515,969
12,500 BellSouth
Corporation........ 649,466 676,563
9,000 British
Telecommunications
plc ADR............ 577,730 541,125
362,600 C-TEC Corporation
Class A*........... 6,713,350 7,206,675
44,000 C-TEC Corporation
Class B
Convertible(b)*.... 653,144 866,250
60,000 Cable & Wireless plc
ADR................ 1,241,955 1,050,000
3,000 Compania de Telefonos
de Chile S.A.*..... 285,150 236,250
318,000 GTE Corporation...... 6,127,042 9,659,250
30,000 Hong Kong
Telecommunications
Ltd. ADR........... 439,196 573,750
130,000 Lincoln
Telecommunications
Company............ 1,818,824 2,210,000
4,000 MFS Communications
Company, Inc.*..... 108,545 131,000
70,000 Motorola, Inc. ...... 1,001,481 4,051,250
65,000 NYNEX Corporation.... 2,634,717 2,388,750
46,000 Outlet
Communications,
Inc. Class A*...... 355,150 770,500
15,000 Pacific Telesis
Group.............. 502,194 427,500
155,000 Rochester Telephone
Corporation*....... 2,441,625 3,274,375
132,500 Royal PTT Nederland
NV 144A(c)*........ 3,544,203 4,405,625
28,000 Southern New England
Telecommunications
Corporation........ 942,025 899,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
100,000 Southwestern Bell
Corporation*....... $ 2,131,081 $ 4,037,500
425,000 Sprint Corporation... 8,922,428 11,740,625
2,500,000 STET-Societa
Finanziaria
Telefonica pa...... 5,705,495 7,367,788
2,200,000 Telecom Italia*...... 4,438,995 5,724,063
42,911 Telecommunicacoes
Brasileiras SA*-
(Telebras) ADR..... 1,378,257 1,925,631
16,000 Telefonica de Espana
SA ADS............. 511,408 562,000
11,000 Telefonos De Mexico,
SA de C.V. ADS..... 505,738 451,000
1,521,945 Telecommunicacoes de
Sao Paulo SA
(Telesp)*.......... 190,267 216,522
15,000 US WEST, Inc.*....... 526,516 534,375
------------ ------------
80,043,287 97,963,836
------------ ------------
TRANSPORTATION --
0.11%
13,500 Florida East Coast
Industries,
Inc. .............. 713,263 891,000
20,000 OMI Corp.*........... 89,994 132,500
500 Stolt Tankers and
Terminals
(Holdings) S.A.*... 5,125 10,313
------------ ------------
808,382 1,033,813
------------ ------------
WIRELESS
COMMUNICATIONS --
4.32%
250,000 AirTouch
Communications
Inc.*.............. 5,767,779 7,281,250
133,000 Allen Group Inc...... 887,158 3,175,375
18,500 Associated
Communications
Corporation Class
A*................. 98,788 434,750
18,500 Associated
Communications
Corporation Class
B*................. 98,787 434,750
667 Cellular
Communications,
Inc. Series A*..... 8,650 35,685
265,000 Century Telephone
Enterprises,
Inc. .............. 4,438,527 7,817,500
120,000 COMSAT Corporation... 2,695,794 2,235,000
106,000 LIN Broadcasting
Corporation........ 6,477,056 14,151,000
22,000 NEXTEL
Communications,
Inc. Class A*...... 334,554 316,250
137,000 Telephone and Data
Systems, Inc. ..... 1,254,666 6,319,125
7,500 Vodafone Group ADR... 171,219 252,187
------------ ------------
22,232,978 42,452,872
------------ ------------
TOTAL COMMON
STOCKS............. 676,756,118 863,704,949
------------ ------------
PREFERRED STOCKS
-- 0.36%
CONSUMER PRODUCTS
-- 0.23%
2,000 Kerr Group, Inc.
Conv. $1.70
Cumulative Conv.
Class B, Series
D.................. 33,975 39,000
45,000 Fieldcrest Cannon,
Inc. 144A(c)*...... 2,486,250 2,250,000
------------ ------------
2,520,225 2,289,000
------------ ------------
INDUSTRIAL EQUIPMENT
& SUPPLIES -- 0.10%
17,500 Sequa Corporation $5
Cumulative
Convertible........ 1,386,708 962,500
------------ ------------
METALS AND MINING
-- 0.02%
10,000 Freeport-McMoRan Inc.
7% Cumulative Conv.
Depositary......... 213,000 207,500
------------ ------------
PUBLISHING -- 0.01%
6,500 News Corporation
Limited Sponsored
ADS................ 87,499 101,563
------------ ------------
TOTAL PREFERRED
STOCKS............. 4,207,432 3,560,563
------------ ------------
COMMON STOCK WARRANTS
AND RIGHTS -- 0.08%
ENTERTAINMENT --
0.08%
Viacom Inc.
130,000 Contingent Value
Rights*.............. 666,250 398,125
70,000 Class C*............. 86,406 231,875
35,000 Class E*............. 124,688 188,125
------------ ------------
877,344 818,125
------------ ------------
TOTAL COMMON STOCK
WARRANTS AND
RIGHTS............. 877,344 818,125
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT COST VALUE
- ----------- ------------ ------------
<C> <S> <C> <C>
CORPORATE BONDS
-- 0.63%
ENTERTAINMENT
-- 0.63%
$ 6,500,000 Time Warner Inc.,
Reset Note, Zero
Coupon through
08/15/1995 due
08/15/2002........ $ 5,317,730 $ 6,142,500
------------ ------------
TOTAL CORPORATE
BONDS............. 5,317,730 6,142,500
------------ ------------
CONVERTIBLE CORPORATE
BONDS -- 3.38%
AUTOMOTIVE PARTS AND
ACCESSORIES --
0.04%
400,000 GenCorp Inc. 8%
Subordinated
Debentures due
08/01/2002........ 395,039 365,000
------------ ------------
BROADCASTING -- 0.01%
343,750 Havas, S.A. 3% Pik
Bond, due
12/31/1997........ 83,923 73,927
------------ ------------
ENTERTAINMENT --
3.33%
32,231,000 Time Warner Inc.
8.750% Debentures,
due 01/01/2015.... 33,886,106 30,377,718
2,750,000 Viacom Inc. 8%, due
07/07/2006........ 1,799,828 2,371,875
------------ ------------
35,685,934 32,749,593
------------ ------------
TOTAL CONVERTIBLE
CORPORATE BONDS... 36,164,896 33,188,520
------------ ------------
U.S. GOVERNMENT
OBLIGATIONS --
8.29%
82,600,000 U.S. Treasury
Bills, 4.030%
to 6.730%, due
01/01/95 to
12/14/95...... 81,538,336 81,458,788
------------- -------------
TOTAL U.S.
GOVERNMENT
OBLIGATIONS... 81,538,336 81,458,788
------------- -------------
TOTAL
INVESTMENTS --
100.67%(A).... $ 804,861,856 988,873,445
===========
LIABILITIES, IN
EXCESS OF CASH
AND OTHER
ASSETS -- (0.67%)... (6,623,734)
-------------
NET ASSETS --
100.00%
(44,230,994
SHARES
OUTSTANDING)... $ 982,249,711
===========
NET ASSET VALUE,
OFFERING AND
REDEMPTION
PRICE PER
SHARE......... $ 22.21
===========
</TABLE>
* Non-income producing.
a) For Federal income tax purposes aggregate cost is $805,346,843. Gross
unrealized appreciation and depreciation are $214,102,109 and $30,575,507,
respectively, resulting in net unrealized appreciation of $183,526,602.
b) Security fair valued under procedures established by the Board of Trustees.
c) Security exempt from registration under Rule 144A of Securities Act of 1933.
These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At December 31, 1994, Rule 144A
Securities amounted to $6,655,625 or 0.68% of net assets.
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
- ----------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(Cost $804,861,856)................. $988,873,445
Receivable for fund shares sold....... 1,713,567
Receivable for securities sold........ 862,637
Dividends receivable.................. 2,006,448
Accrued interest receivable........... 819,919
------------
Total assets........................ 994,276,016
------------
LIABILITIES:
Payable for investments purchased..... 6,274,786
Payable for fund shares redeemed...... 157,602
Payable for advisory fees............. 825,598
Payable for distribution fees......... 112,053
Dividends and distributions payable... 4,062,970
Other payables and accrued expenses... 593,296
------------
Total liabilities................... 12,026,305
------------
Net assets applicable to 44,230,994
shares of beneficial interest
outstanding....................... $982,249,711
=============
Net asset value, offering and
redemption price per share........ $ 22.21
=============
NET ASSETS CONSIST OF:
Shares of beneficial interest at par
value............................... $ 442,310
Additional paid in capital............ 798,647,189
Distributions in excess of net
investment income................... (110,943)
Distributions in excess of net
realized gains...................... (740,434)
Unrealized net appreciation of
investments......................... 184,011,589
------------
Net assets.......................... $982,249,711
=============
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
- ----------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.............................. $ 8,025,327
Dividends............................. 15,827,907
------------
Total income........................ 23,853,234
------------
EXPENSES:
Investment advisory fee............... 9,992,690
Distribution fees..................... 1,491,152
Transfer and shareholder servicing
agent............................... 464,733
Reports to shareholders............... 490,489
Custodian fees and expenses........... 162,724
Legal and auditing.................... 51,008
Registration fees..................... 59,385
Trustees' fees........................ 58,500
Miscellaneous......................... 19,797
------------
Total expenses...................... 12,790,478
------------
Investment income -- net............ 11,062,756
------------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on
investments......................... 33,486,441
Net change in unrealized
appreciation........................ (46,397,512)
------------
Net loss on investments............. (12,911,071)
------------
Net decrease in net assets resulting
from operations................... $ (1,848,315)
=============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1993
------------- -------------
<S> <C> <C>
CHANGE IN NET ASSETS:
Investment income -- net............................................... $ 11,062,756 $ 6,473,540
Realized gain on investments -- net.................................... 33,486,441 29,516,817
Change in unrealized appreciation/depreciation -- net.................. (46,397,512) 116,534,146
------------- -------------
Net decrease in net assets resulting from operations................. (1,848,315) 152,524,503
Dividends to shareholders from net investment income................... (10,988,841) (6,467,726)
Dividends to shareholders in excess of net investment income........... (110,943)
Distributions to shareholders from net realized gains.................. (32,875,775) (29,653,789)
Distributions to shareholders in excess of net realized gains.......... (740,434)
Share transactions -- net.............................................. 83,405,757 196,430,233
------------- -------------
Net increase in net assets........................................... 36,841,449 312,833,221
NET ASSETS:
Beginning of year...................................................... 945,408,262 632,575,041
------------- -------------
End of year (including distributions in excess of net investment income
of $110,943 and $0, respectively).................................... $ 982,249,711 $ 945,408,262
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
THE GABELLI ASSET FUND -- NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. The Gabelli Asset Fund (the "Fund") is an
open-end, diversified management investment company organized as a Massachusetts
business trust and registered under the Investment Company Act of 1940, as
amended. The Fund commenced operations on March 3, 1986. The following is a
summary of significant accounting policies followed by the Fund.
SECURITY VALUATION. Readily marketable securities traded on a national
securities exchange or admitted to trading on the NASDAQ National Market List
are valued at the last reported sales price on the business day as of which such
value is determined. Securities for which no sale was reported on that day and
over-the-counter securities not included in the NASDAQ National Market List are
valued at the mean between the last reported bid and asked prices. United States
Government obligations and other debt instruments having 60 days or less
remaining until maturity are stated at amortized cost (which approximates
value). Debt instruments having a remaining maturity of more than 60 days will
be valued at the highest bid price obtained from a dealer maintaining an active
market in that security or on the basis of prices obtained from a pricing
service approved as reliable by the Board of Trustees. All other investment
assets, including restricted and not readily marketable securities, are valued
under procedures established by and under the general supervision and
responsibility of the Fund's Board of Trustees, designed to reflect in good
faith the fair value of such securities.
SECURITY TRANSACTIONS AND INVESTMENT INCOME. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates) with
realized gain or loss on investments determined by using specific identification
as the cost method. Interest income (including amortization of premium and
discount) is recorded as earned. Dividend income and dividends and distributions
to shareholders are recorded on the ex-dividend date.
Income distributions and capital gain distributions on a Fund level are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund and temporary differences and differing characterization of
distributions made by the Fund as a whole.
FEDERAL INCOME TAXES. The Fund qualifies and intends to continue to qualify as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986 and intends to distribute all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
2. SHARES OF BENEFICIAL INTEREST. The Declaration of Trust, dated November 21,
1985, permits the Fund to issue an unlimited number of shares (par value $0.01).
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold..................................... 13,812,609 319,924,263 14,198,912 314,318,880
Shares issued on reinvestment of dividends and
distributions................................. 1,830,373 40,652,559 1,439,475 33,539,777
Shares redeemed................................. (11,982,003) (277,171,065) (6,887,181) (151,428,424)
------------ ------------- ----------- -------------
Net increase.................................. 3,660,979 83,405,757 8,751,206 196,430,233
========== =========== ========= ===========
</TABLE>
3. PURCHASES AND SALES OF SECURITIES. Purchases and sales of securities, other
than U.S. Government obligations and short-term securities, aggregated
$248,690,376 and $163,130,509, respectively.
THE GABELLI ASSET FUND -- NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
4. INVESTMENT ADVISORY CONTRACT. The Fund employs Gabelli Funds, Inc. (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management and pay the compensation of all officers and Trustees
of the Fund who are its affiliates. As compensation for the services rendered
and related expenses borne by the Advisor, the Fund pays the Advisor a fee,
computed and accrued daily and payable monthly, equal to 1.00% per annum of the
Fund's average daily net assets. The Advisor is obligated to reimburse the Fund
in the event the Fund's expenses exceed the most restrictive expense ratio
limitation imposed by any state. No such reimbursement was required during 1993
or 1994.
5. DISTRIBUTION PLAN. The Fund's Board of Trustees has adopted a distribution
plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and
Rule 12b-1 thereunder. Pursuant to this Plan, Gabelli & Company, Inc. (the
"Distributor") is authorized to purchase advertising, sales literature and other
promotional material and to pay its own salespeople. The Fund will reimburse the
Distributor for these expenditures up to a limit of 0.25% on an annual basis of
the Fund's average daily net assets. In addition, if and to the extent that the
fee that the Fund pays to the Advisor as well as other payments it makes, are
considered as indirectly financing any activity which is primarily intended to
result in the sale of the Fund's shares, such payments are authorized under the
Plan. For the year ended December 31, 1994, the Fund has incurred distribution
costs of $1,491,152, or 0.15% of average net assets under the Plan.
6. TRANSACTIONS WITH AFFILIATES. For the year ended December 31, 1994, the Fund
paid brokerage commissions of $35,693 to Gabelli & Company, Inc. and its
affiliates.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
(for a share of beneficial interest outstanding
throughout each year)
Net asset value, beginning of year............................... $ 23.30 $ 19.88 $ 17.96 $ 15.63 $ 17.26
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income.......................................... $ 0.26 $ 0.16 $ 0.26 $ 0.39 $ 0.76
Net realized and unrealized gain/(loss) on investments......... (0.30) 4.18 2.41 2.45 (1.62)
--------- --------- --------- --------- ---------
Total from investment operations............................. (0.04) 4.34 2.67 2.84 (0.86)
Less distributions:
Dividends from net investment income........................... (0.25) (0.16) (0.25) (0.39) (0.77)
Distributions in excess of net investment income............... (0.01) -- -- -- --
Distributions from net realized gains on investments........... (0.76) (0.76) (0.50) (0.12) --
Distributions in excess of net realized gains on investments... (0.03) -- -- -- --
--------- --------- --------- --------- ---------
Total distributions.......................................... (1.05) (0.92) (0.75) (0.51) (0.77)
--------- --------- --------- --------- ---------
Net asset value, end of year..................................... $ 22.21 $ 23.30 $ 19.88 $ 17.96 $ 15.63
========= ========= ========= ========= =========
Total Return*.................................................... (0.1%) 21.8% 14.9% 18.1% (5.0%)
--------- --------- --------- --------- ---------
Net assets, end of year (000's omitted).......................... $ 982,250 $ 945,408 $ 632,575 $ 483,865 $ 342,710
========= ========= ========= ========= =========
Significant Ratios:
Investment income -- net to average net assets................. 1.10% 0.82% 1.42% 2.34% 4.51%
Operating expenses -- net to average net assets................ 1.28% 1.31% 1.31% 1.30% 1.20%
Portfolio turnover............................................. 18.74% 16.04% 14.39% 20.13% 55.71%
</TABLE>
- ---------------
* Total return is calculated assuming a purchase of shares at the net asset
value on the first day and a sale on the last day of each year reported and
includes reinvestment of dividends and distributions.
<PAGE>
- --------------------------------------------------------------------------------
PART C: OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Prospectus:
Financial Highlights
Included in the Statement of Additional Information
Report of Independent Accountants***
Portfolio of Investments, December 31, 1994***
Statement of Assets & Liabilities, December 31, 1994***
Statement of Operations year ended December 31, 1994***
Statement of Changes in Net Assets, years ended December 31, 1993
and December 31, 1994***
Notes to Financial Statements, December 31, 1994***
Financial Highlights***
(b) Exhibits
(1) Declaration of Trust*
(2) By-laws*
(3) Not applicable
(4) Specimen share certificate*
(5) Amended Investment Advisory Contract**
(6) Amended Distribution Agreement**
(7) Not applicable
(8) Custody Agreement*
(9) Transfer Agency Agreement*
(10) Opinion and consent of Counsel*
(11) Consent of Independent Accountants - Exhibit 24 (b)(11)
(12) Not applicable
(13) Agreement with initial shareholder*
(14) Form of Instructions and Agreement for Individual
Retirement Account (IRA)*
(15) Amended Distribution Plan**
(16) Sample Total Return Computation**
(17) Financial Data Schedule -- Exhibit 24(b)(17)
- ----------
* Previously filed with Registrant's Registration Statement on Form N-1A, as
amended, and incorporated by reference.
** As previously filed with Registrant's Registration Statement on May 3, 1993.
*** Previously filed with the Fund's Annual Report for the year ended
December 31, 1994 filed on March 10, 1995.
- --------------------------------------------------------------------------------
C-1
<PAGE>
- --------------------------------------------------------------------------------
ITEM 25. Persons Controlled by or Under Common Control with Registrant
None
ITEM 26. Number of Holders of Securities
As of March 31, 1995, there were 51,672 holders of shares of Registrant.
ITEM 27. Indemnification
Reference is made to Subdivision (c) of Section 12 of Article Seventh of
Registrant's Declaration of Trust.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee, officer
or controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Registrant hereby undertakes that it will apply the indemnification
provisions of its Declaration of Trust, its By-Laws, the Management Agreement,
the Sub-Advisory Agreement, the Administration Agreement and the Distribution
Agreement in a manner consistent with Release No. 11330 of the Securities and
Exchange Commission under the 1940 Act.
- --------------------------------------------------------------------------------
C-2
<PAGE>
- --------------------------------------------------------------------------------
ITEM 28. Business and Other Connections of Investment Adviser
Gabelli Funds, Inc. is the investment adviser of the Registrant. For information
as to its business, profession, vocation or employment of a substantial nature,
reference is made to Form ADV filed by it under the Investment Advisers Act of
1940.
ITEM 29. Principal Underwriter
(a) The Distributor, Gabelli & Company, Inc., is also the principal underwriter
for The Gabelli ABC Fund, The Gabelli Growth Fund, The Gabelli Value Fund, The
Gabelli Small Cap Growth Fund, Gabelli Equity Income Fund, Gabelli Gold Fund,
The Westwood Funds, The Gabelli U.S. Treasury Money Market Fund, The Gabelli
Global Telecommunications Fund, The Gabelli Global Interactive Couch
Potato(TM)(c) Fund and The Gabelli Global Convertible Securities Fund.
(b) For information as to such principal underwriter, reference is made to the
Form BD filed by it under the Securities Exchange Act of l934
(c) Not applicable
ITEM 30. Location of Accounts and Records
All such accounts, books and other documents are maintained at the office of The
Shareholder Services Group, Inc., Exchange Place, Boston, Massachusetts 02109),
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts,
02110, BFDS, two Heritage Drive, North Quincy, MA 02171 and at the offices of
the Adviser, Gabelli Funds, Inc., One Corporate Center, Rye, New York
10580-1434.
ITEM 31. Management Services
Not applicable
ITEM 32. Undertakings
The Registrant hereby undertakes to furnish to each person to whom a prospectus
is delivered a copy of the Registrant's latest Annual Report to shareholders
upon request and without charge.
- --------------------------------------------------------------------------------
C-3
<PAGE>
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the day of April, 1995.
THE GABELLI ASSET FUND
/s/BRUCE N. ALPERT
-----------------------------------
By: Bruce N. Alpert
Title: Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement or Amendment has been signed below by the following
in the capacity and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ MARIO J. GABELLI President, and Trustee April , 1995
- ---------------------------- --------
Mario J. Gabelli
/s/FELIX J. CHRISTIANA Trustee April , 1995
- ---------------------------- --------
Felix J. Christiana
/s/ANTHONY J. COLAVITA Trustee April , 1995
- ---------------------------- --------
Anthony J. Colavita
/s/ANTHONY R. PUSTORINO Trustee April , 1995
- ---------------------------- --------
Anthony R. Pustorino
/s/SALVATORE J. ZIZZA Trustee April , 1995
- ---------------------------- --------
Salvatore J. Zizza
- --------------------------------------------------------------------------------
C-4
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF EXHIBITS TO FORM N-1A
Exhibit
Number Exhibit Page Number
- ------ ------- -----------
24(b):
(11) Consent of Independent Accountants
Price Waterhouse LLP
(17) Financial data Schedule
- --------------------------------------------------------------------------------
C-5
Consent of Independent Accountants
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 12 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
February 9, 1995, relating to the financial statements and financial highlights
of The Gabelli Asset Fund, which appears in such Statement of Additional
Information, and to the incorporation by reference of our report into the
Prospectus which constitutes part of this Registration Statement. We also
consent to the reference to us under the heading "Counsel and Independent
Accountants" in such Statement of Additional Information and to the reference to
us under the heading "Financial Highlights" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York
April 25, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<NAME> The Gabelli Asset Fund
<CIK> 783898
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-END> Dec-31-1994
<INVESTMENTS-AT-COST> 804,861,856
<INVESTMENTS-AT-VALUE> 988,873,445
<RECEIVABLES> 5,402,571
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 994,276,016
<PAYABLE-FOR-SECURITIES> 6,274,786
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,751,519
<TOTAL-LIABILITIES> 12,026,305
<SENIOR-EQUITY> 442,310
<PAID-IN-CAPITAL-COMMON> 798,647,189
<SHARES-COMMON-STOCK> 44,230,994
<SHARES-COMMON-PRIOR> 40,570,015
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (110,943)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (740,434)
<ACCUM-APPREC-OR-DEPREC> 184,011,589
<NET-ASSETS> 982,249,711
<DIVIDEND-INCOME> 15,827,407
<INTEREST-INCOME> 8,025,327
<OTHER-INCOME> 0
<EXPENSES-NET> 12,790,418
<NET-INVESTMENT-INCOME> 11,062,756
<REALIZED-GAINS-CURRENT> 33,486,441
<APPREC-INCREASE-CURRENT> (46,397,512)
<NET-CHANGE-FROM-OPS> (1,848,315)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (10,988,841)
<DISTRIBUTIONS-OF-GAINS> (32,875,775)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,812,609
<NUMBER-OF-SHARES-REDEEMED> (11,982,003)
<SHARES-REINVESTED> 1,830,373
<NET-CHANGE-IN-ASSETS> 3,660,979
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9,992,690
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,790,478
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 23.30
<PER-SHARE-NII> 0.26
<PER-SHARE-GAIN-APPREC> (0.30)
<PER-SHARE-DIVIDEND> (0.25)
<PER-SHARE-DISTRIBUTIONS> (0.76)
<RETURNS-OF-CAPITAL> (0.04)
<PER-SHARE-NAV-END> 22.21
<EXPENSE-RATIO> .013
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
