<PAGE>
THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1434
SEMI-ANNUAL REPORT - 1995
TO OUR SHAREHOLDERS:
Strong corporate profits and declining long-term interest rates pushed
the stock market to record highs in the second quarter of 1995. Technology
related issues as well as financial stocks were particularly buoyant. With the
appetite for transactions whetted by IBM's hostile offer for Lotus, and with
the market likely to ferret out small and medium capitalization companies, the
performance of our Fund should again return to its historical relationship to
other benchmarks.
<TABLE>
INVESTMENT RESULTS (a)
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Quarter
----------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1995: Net Asset Value........................ $23.84 $25.10 -- -- --
Total Return........................... 7.3% 5.3% -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
1994: Net Asset Value........................ $22.63 $22.36 $23.56 $22.21 $22.21
Total Return........................... (2.9)% (1.2)% 5.4% (1.2)% (0.1)%
- -----------------------------------------------------------------------------------------------------------------------------
1993: Net Asset Value........................ $21.10 $22.10 $23.63 $23.30 $23.30
Total Return........................... 6.1% 4.7% 6.9% 2.5% 21.8%
- -----------------------------------------------------------------------------------------------------------------------------
1992: Net Asset Value........................ $19.04 $18.91 $19.02 $19.88 $19.88
Total Return........................... 6.0% (0.7)% 0.6% 8.5% 14.9%
- -----------------------------------------------------------------------------------------------------------------------------
1991: Net Asset Value........................ $17.36 $17.36 $17.90 $17.96 $17.96
Total Return........................... 11.1% 0.0% 3.1% 3.2% 18.1%
- -----------------------------------------------------------------------------------------------------------------------------
1990: Net Asset Value........................ $16.48 $16.81 $15.21 $15.63 $15.63
Total Return........................... (4.5)% 2.0% (9.5)% 7.8% (5.0)%
- -----------------------------------------------------------------------------------------------------------------------------
1989: Net Asset Value........................ $16.46 $18.01 $18.73 $17.26 $17.26
Total Return........................... 12.0% 9.4% 4.0% (1.0)% 26.2%
- -----------------------------------------------------------------------------------------------------------------------------
1988: Net Asset Value........................ $13.49 $14.62 $14.94 $14.69 $14.69
Total Return........................... 14.4% 8.4% 2.2% 3.5% 31.1%
- -----------------------------------------------------------------------------------------------------------------------------
1987: Net Asset Value........................ $12.97 $13.93 $14.66 $12.61 $12.61
Total Return........................... 19.6% 7.4% 5.2% (14.0)% 16.2%
- -----------------------------------------------------------------------------------------------------------------------------
1986: Net Asset Value........................ $10.44 $11.21 $11.29 $11.28 $11.28
Total Return........................... 4.4%(b) 7.4% 0.7% (0.1)% 12.8%(b)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- ---------------------------------------------------
Average Annual Returns - June 30, 1995 (a)
-------------------------------------------
<S> <C>
1 Year..................................... 17.6%
5 Year..................................... 12.7%
Life of Fund (b)........................... 15.5%
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Dividend History
- ----------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
<S> <C> <C>
December 30, 1994 $1.056 $22.21
December 31, 1993 $0.921 $23.30
December 31, 1992 $0.755 $19.88
December 31, 1991 $0.505 $17.96
December 31, 1990 $0.770 $15.63
December 29, 1989 $1.278 $17.26
December 30, 1988 $0.775 $14.69
January 4, 1988 $0.834 $12.07
March 9, 1987 $0.505 $12.71
<FN>
(a) Total return and average annual returns reflect changes in share
price and reinvestment of dividends and are net of expenses. The net
asset value of the Fund is reduced on the ex-dividend (payment) date by
the amount of the dividend paid. Of course, returns represent past
performance and do not guarantee future results. Investment returns
and the principal value of an investment will fluctuate. When shares
are redeemed they may be worth more or less than their original cost.
(b) From commencement of operations on March 3, 1986.
</TABLE>
<PAGE>
For the three months ended June 30, 1995, The Gabelli Asset Fund's (the
"Fund") net asset value increased 5.3% to $25.10 per share from $23.84 on March
31, 1995. Our performance was solid, but looked pale in comparison to gains of
9.5% for the unmanaged Standard & Poor's 500 Index ("S&P 500"), and increases of
6.5% and 9.4%, respectively, for the Value Line Composite and Russell 2000
Index, each of which are unmanaged indicators of stock market performance. For
the six months ended June 30, 1995, the Fund gained 13.0% versus 20.2% for the
S&P 500, 12.1% for the Value Line Composite, and 14.4% for the Russell 2000
Index.
Since inception on March 3, 1986, through June 30, 1995, the Fund has
achieved a total return of 284.7%, which equates to an average annual return of
15.5%. This compares favorably to gains of 206.0% for the S&P 500, 168.2% for
the Value Line Composite and 138.8% for the Russell 2000 during the same
period. As of June 30, 1995, the Fund's shareholders numbered 51,076 and total
net assets were nearly $1.1 billion.
COMMENTARY
The Market
- ----------
At the beginning of 1995, we opined that due to cost cutting and
productivity gains, corporate profits would remain strong even in a slowing
economy. We did not anticipate fully the 170 basis point decline in long-term
interest rates that has helped to propel the stock market to its present levels.
Despite the current conjecture that the Federal Reserve will cut
short-term interest rates to ensure a "soft landing" for the economy, we suspect
long-term and perhaps short-term rates are near an intermediate-term bottom.
This may restrain stocks over the balance of the year. However, we believe
companies that continue to report positive earnings and cash flow gains will be
adequately rewarded. In short, stock pickers will have an opportunity to excel.
A "Deal-a-Day" Market
- ---------------------
In our first quarter 1995 letter to you we discussed the impact that
accelerating merger and acquisition activity would have on the market in
general, and our portfolio in particular. For the first half of 1995, merger
and acquisition activity was at record levels. The value of announced domestic
deals through the first six months was $164.6 billion, up 20% from 1994's first
half. Merger and acquisition activity overseas was even stronger, as world-wide
deal volume totalled $334.6 billion in the first half, up 38% from the first
half of 1994.
Deal activity has not been limited to a narrow range of industries.
Strategic buyers throughout the business spectrum are taking advantage of
liquidity in the capital markets to add product lines and extend distribution
systems. High equity prices have made stock a more valuable currency in
corporations' efforts to build on their business franchises.
Year-to-date 1995, our portfolio has benefitted from the actual and
impending transactions of RB&W (Park-Ohio Industries, Inc.), M/A Com, Inc. (AMP
Incorporated), and Outlet Communications , Inc. (Renaissance Communications
Corp.). We await further word on Multimedia, Inc. (MMEDC - $38.75 -
2
<PAGE>
NASDAQ) and Hilton Hotels Corporation (HLT - $70.25 - NYSE), whose efforts to
realize value for shareholders may involve a sale of the companies.
In addition, corporate restructurings have helped to surface value in
companies like American Brands, Inc. (AMB - $39.75 - NYSE), American Express
Company (AXP - $35.125 - NYSE) and ITT Corporation (ITT - $117.50 - NYSE).
Finally, A Comprehensive Telecommunications Bill?
- --------------------------------------------------
Over the last several years, telecommunications, cable television and
until recently, broadcast stocks have languished. Uncertainty over regulatory
policy and future competition deserves most of the blame. With the Senate's
recent passage of a comprehensive telecommunications bill and an even more
deregulatory House bill near completion, we will soon have a functioning
blueprint for the telecommunications system of the future.
The clearest winners of the impending legislation appear to be the
broadcasters. The Senate bill enlarges television broadcast companies' total
population "footprint" from 25% to 35%. The House version expands it even
further to 50% of the total population. Restrictions on radio broadcasters are
eliminated entirely in the Senate bill. Assuming some reasonable compromise in
final legislation, group broadcasters will be extending their empires. With
television broadcasters already enjoying a strong cyclical upturn (witness
record "up-front" advertising sales for the networks), deals are likely to be
done at attractive premiums to current market prices. Renaissance
Communications' (RRR - $33.50 - NYSE) bid for Outlet Communications, Inc. (OCOMA
- - $37.50 - NASDAQ) is at approximately 13.5 times trailing cash flow, a heady
appraisal relative to public market prices for small group broadcasters. If a
feeding frenzy follows the passage of this legislation, we could see even higher
valuations.
Cable television companies will also benefit. After two rounds of
mandated price rollbacks in 1993 and 1994, the Senate bill allows cable
companies to price services within a collar of the national averages. The
impending House bill totally eliminates pricing restrictions after five years.
In addition, current restrictions on cable television/telephone cross ownership
are likely to be modified.
The future for telephone and cellular telephone companies remains more
cloudy. Investor uncertainty over how the new Personal Communications Services
(PCS) will impact traditional cellular operators has restrained the stocks of
both cellular providers and PCS licensees. For example, Telephone and Data
Systems, Inc. (TDS - $36.375 - ASE), a telecommunications company with strong
cellular operations and an aggressive, successful bidder for PCS licenses, is
down for the year despite a strategy which we believe has added significant
value to the company.
VO On The Rocks and Caught TWX't a Rock and a Hard Place?
- ---------------------------------------------------------
Judging by the precipitous fall of Seagram Company Ltd.'s (VO - $34.625
- - NYSE) stock immediately following its acquisition of 80% of MCA, investors
appeared to enjoy their whiskey straight with a dash of chemicals. Since then,
however, the market has begun to appreciate what we believe is a much more
exhilarating combination of a solid beverage business and a valuable collection
of entertainment software assets. Seagram's Chairman, Edgar Bronfman Jr., does
have a challenge in front of him: re-energizing MCA. We believe he will
succeed. He also has the financial strength to
3
<PAGE>
augment the existing entertainment businesses by buying distribution. There will
be potholes along the way - overpaying for CBS Inc.(CBS - $67.00 - NYSE) is one
that comes to mind. However, we believe the global demand for entertainment
software will be powerful enough to compensate for any errors management may
make in developing its new business.
Concurrently, Time Warner Inc. (TWX - $41.125 - NYSE) Chairman, Gerald
Levin, is taking a lot of heat from Wall Street for his failure to surface
value. There is no doubt in our mind that Time Warner is pursuing an optimal
strategy. Time Warner's partnerships with US WEST, Inc. (USW - $41.625 - NYSE),
C. Itoh, and Toshiba are making it cumbersome to restructure the company the way
management would like. Ultimately, however, we believe Mr. Levin will succeed in
separating Time Warner's cable television operations from its publishing and
entertainment software businesses. Once this is accomplished, we believe
investors will more fulIy appreciate the value of this unique collection of
consumer brands.
America - First Again
- ---------------------
The much ballyhooed trade war with Japan has, for the time being, been
diffused by yet another promise from Japan to open its markets to U.S. cars and
car parts. Japan's policy of #Just Say Yes# has once again triumphed. We are
neither surprised nor disheartened. We have long promulgated the notion that
free trade and fair trade are joined at the hip. We find it somewhat ironic
that some in our country want to punish the Japanese for the virtues of saving
and investing that we seek to re-instill in Americans.
All this aside, we remain encouraged by the competitive progress
American industry is making against Japan and others. American companies are
making world class products and delivering world class services in many
industries. While we may never crack the Japanese market, we will take "global
profit share" from the Japanese. We reiterate our investment thesis that buying
American in the stock market will be an excellent method of profiting from
economic growth overseas, particularly in companies that sell to Japan.
WHAT WE DO
We do what is described as bottom up research: we read annual reports;
we visit the competition; we talk to customers; we go belly to belly with
management. We structure our portfolio by picking stocks.
In past reports, we have tried to articulate our investment philosophy
and methodology. The following graphic further illustrates the interplay among
the four components of our valuation approach.
Our focus is on free cash flow; earnings before interest, taxes,
depreciation and amortization (EBITDA) minus the capital expenditures necessary
to grow the business. We believe free cash flow is the best barometer of a
business' value. Rising free cash flow often foreshadows net earnings
improvement. We also look at earnings per share trends. Unlike Wall Street's
ubiquitous earnings momentum players, we do not try to forecast earnings with
accounting precision and then trade stocks based on quarterly expectations and
realities. We simply try to position ourselves in front of long-term earnings
uptrends. In addition, we analyze on and off balance sheet assets and
liabilities such as plant and equipment, inventories, receivables, and legal,
environmental and health care issues. We want to
4
<PAGE>
know everything and anything that will add to or detract from our private market
value estimates. Finally, we look for a catalyst; something happening in the
company's industry or indigenous to the company itself that will surface value.
In the case of the independent telephone stocks, the catalyst is a regulatory
change. In the agricultural equipment business, it is the increasing worldwide
demand for American food and feed crops. In other instances, it may be a change
in management, sale or spin-off of a division or the development of a profitable
new business.
[GRAPHIC]
Once we identify stocks that qualify as fundamental and conceptual
bargains, we then become patient investors. This has been a proven long-term
method for preserving and enhancing wealth in the U.S. equities market. At the
margin, our new investments are focused on businesses that are well managed and
will benefit from sustainable long-term economic dynamics. These include macro
trends, such as globalization of the market in filmed entertainment and
telecommunications, and micro trends, such as increased focus on productivity
enhancing goods and services.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund's
investments. Favorable EBITDA prospects do not necessarily translate into
higher stock prices, but they do express a positive trend which we believe will
develop over time.
American Brands, Inc. (AMB - $39.75 - NYSE), based in Old Greenwich,
Connecticut, is a holding company for five separate business units:
international tobacco (Gallaher, the largest tobacco company in the United
Kingdom), distilled spirits (Jim Beam bourbon), hardware (Moen faucets), office
products (Acco) and golf products (Titleist and Pinnacle golf balls). All are
strong cash flow generators and are leaders in their respective fields. A new
management team is transforming American Brands into a focused consumer products
company. The company's shares trade at more than a 30% discount from its
estimated 1995 PMV, which we expect to increase to $100 per share by the year
2000.
American Express Company (AXP - $35.125 - NYSE), founded in 1850, is a
diversified travel and financial services company operating in 160 countries
around the world. The company is best known for its American Express card.
Less well recognized are its other important operations, such as
Minneapolis-based American Express Financial Advisors, Inc. (formerly IDS
Financial Services), which sells financial products ranging from mutual funds to
annuities. In 1994, Harvey Golub, Chairman and CEO, continued his program of
refocusing AXP on its core charge card and travel services businesses by
spinning off Lehman Brothers Holdings Inc. We look for earnings growth at
double digit rates over the balance of this decade.
AT&T Corp. (T - $53.125 - NYSE) is the second-largest telephone company in the
world. AT&T, selling at 7.5 times EBITDA, is attractively valued relative to
its growth potential. The company is well-positioned to benefit from the
above-average long-term growth of the global telecommunications industry. Its
strategy includes a tailored approach in order to take advantage of its strong
global franchise,
5
<PAGE>
including its brand name, broad product offerings and an international customer
base. AT&T will satisfy communication needs by packaging a broad array of
products, including its global wired and wireless telecommunications services,
telecommunications equipment and financial services.
Chris-Craft Industries, Inc. (CCN - $35.00 - NYSE) is primarily engaged in
television broadcasting through its roughly 70% ownership of BHC Communications,
Inc. (BHC - $80.375 - ASE). BHC owns and operates independent TV stations in
Los Angeles (KCOP) and Portland, Oregon (KPTV). BHC also controls 50% of United
Television, Inc. (UTVI - $71.00 - NASDAQ), an operator of a NBC-affiliated TV
station, an ABC affiliate and three independent outlets. BHC has entered into a
partnership agreement with Paramount Communications, Inc. to form and launch
a new, fifth television network called United Paramount Television Network
(UPN). With about $1.5 billion in marketable securities and cash, derived from
the 1993 disposition of Time Warner securities, CCN is strongly positioned to
expand its operations. CCN is the eighth-largest TV station group owner in the
U.S., covering almost 20% of TV households.
General Motors Corporation (GM - $46.875 - NYSE) is positioned to benefit from
a recovery in North American auto sales. Last year, its North American
operations were profitable for the first time in four years and international
profits continue to grow. With Jack Smith at the helm, GM is improving the
style and quality of its cars, rationalizing its production processes and
greatly reducing its costs. With peak earnings power exceeding $10 per share, GM
is a core holding.
LIN Broadcasting Corporation (LINB - $126.50 - NASDAQ) ranks among the largest
and most attractive cellular telephone operators in the U.S. with controlling
interests in the New York, Los Angeles, Dallas and Houston markets. McCaw
Cellular Communications, which was acquired by AT&T in 1994, controls 52% of
LIN. McCaw (AT&T) is buying the 48% balance of LIN for $129.50 per share in
cash. This price reflects AT&T's agreement to settle lawsuits brought by LINB
shareholders by paying an additional $2.00 per share; the initial purchase
price was $127.50 per share. The Fund is holding LIN to earn the difference
between the current market price and the "take out" price of LIN.
Sprint Corporation (FON - $33.625 - NYSE) remains very attractive in light of
its very low valuation and prospects for earnings acceleration. It trades at
approximately 50% of our $67 estimate of private market value. We expect the
telephone and cellular operations to be the main contributors to operations due
to the continuation of strong customer growth. We point out subscriber growth
of 67% in cellular last year. The long distance operations should maintain less
spectacular call volume growth at the industry average of approximately 8%.
Sprint's high cost structure also provides an opportunity for earnings
acceleration through further cost restructuring. An alliance with a
multinational communications partner also appears imminent and will provide
Sprint with the critical mass necessary to position itself strategically as a
dominant player in the multinational telecommunications market.
Tele-Communications Inc. (TCOMA - $23.4375 - NASDAQ) is the largest cable
television multiple system operator (MSO) in the U.S., serving some 12 million
subscribers. Regulation historically has driven the outlook for cable stocks.
With a deregulation-minded Congress in place, the outlook is once again
improving. (Proposed legislation which provides for reduced rate regulation and
higher cross ownership of cable television systems represents a significant,
favorable catalyst for cable. We are tracking this process closely.) TCI is
well-positioned for the future. Last year, in association with Comcast
Corporation (CMCSA - $18.1875 - NASDAQ) and Cox Communications Inc. (COX -
$19.375 - NYSE), TCI established a joint venture and strategic alliance with
Sprint Corporation (FON - $33.625 -
6
<PAGE>
NYSE) to provide both wired and wireless telephone services in competition with
the local telephone industry, utilizing TCI's cable infrastructure and Sprint's
well-recognized national brand name. The joint venture is one of the largest
bidders for new PCS spectrum and looks to emerge as one of the best-positioned
competitors to the cellular telephone duopoly. TCI has recently announced
various financial restructuring moves which we expect will benefit the price of
the stock this year.
Time Warner Inc. (TWX - $41.125- NYSE) is one of the largest diversified media
and publishing companies in the world, with a market capitalization of over $15
billion. Warner Brothers Studios, the company's filmed entertainment
subsidiary, was ranked number one at the box office for the third consecutive
year. Its most recent summer blockbuster, Batman Forever, grossed $150 million
in its first few weeks in theaters. Time Warner is restructuring its business
into copyright and creativity (notably publishing, music and filmed
entertainment) on one side and distribution (mostly cable) on the other. Under
the aegis of Gerald M. Levin, investors can expect significant returns.
Viacom Inc. (VIA - $46.50 - ASE; VIA#B - $46.375 - ASE) has evolved into one
of the world's dominant media companies. Following its recent acquisitions of
Paramount Communications and Blockbuster Entertainment, the company is now
selling non-core assets and focusing on the global expansion of its media
franchises.
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment is $1,000. No initial minimum is
required for those establishing an Automatic Investment Plan.
GABELLI U.S. TREASURY MONEY MARKET FUND
Shareholders of any of the Gabelli Funds may invest in The Gabelli U.S.
Treasury Money Market Fund with an initial investment of $3,000 or more. The
Fund provides check writing and exchange privileges. The Fund's expenses are
capped at .30% of average net assets, making it one of the most attractive U.S.
Treasury-only money market funds. With dividends that are exempt from state and
local income taxes in all states, the Fund is an excellent vehicle in which to
store idle cash. Call us at 1-800-GABELLI (1-800-422-3554) for a prospectus
which gives a more complete description of the Fund, including management fees
and expenses. Read it carefully before you invest or send money.
7
<PAGE>
IN CONCLUSION
The first half of 1995 has been terrific for equity investors. We
believe the market will prove to be a sterner test in the second half, with
stock selection more critical to success.
As always, we have reservations regarding the broad market. At current
levels, investors have made a big bet that the economy will slow down without
stalling and that inflation and interest rates will remain low. If reality does
not conform with expectations, stocks could hit an air pocket.
Regardless of what Mr. Market has in store for us over the balance of
the year, we believe our portfolio offers excellent fundamental long-term
value. We remain confident that if we buy good businesses at opportunistic
prices, we will enhance the value of the assets you have entrusted to us.
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's NASDAQ symbol is GABAX. Please call us during the
day for further information.
Sincerely,
/s/ Mario J. Gabelli
Mario J. Gabelli, CFA
Portfolio Manager and
July 17, 1995 Chief Investment Officer
<TABLE>
--------------------------------------------------------------------
TOP TEN HOLDINGS
JUNE 30, 1995
-------------
<S> <C>
Time Warner Inc. LIN Broadcasting Corporation
AT&T Corp. Viacom Inc.
American Brands, Inc. General Motors Corporation
American Express Company Sprint Corporation
Tele-Communications, Inc. Chris-Craft Industries, Inc.
--------------------------------------------------------------------
8
<PAGE>
THE GABELLI ASSET FUND
</TABLE>
<TABLE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 90.3%
AIRLINES -- 0.9%
127,000 AMR Corporation+...... $ 7,949,974 $ 9,477,375
------------ ------------
AUTOMOTIVE -- 1.6%
360,000 General Motors
Corporation......... 12,998,250 16,875,000
24,000 Harley Davidson,
Inc. ............... 236,600 585,000
------------ ------------
13,234,850 17,460,000
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 5.3%
33,500 APS Holding
Corporation, Class
A+.................. 519,250 883,563
30,000 Borg-Warner
Automotive, Inc. ... 732,660 855,000
340,000 Echlin Inc. .......... 4,718,528 11,815,000
150,000 Federal-Mogul
Corporation......... 2,691,210 2,737,500
675,000 GenCorp Inc. ......... 3,881,263 7,256,250
270,000 Genuine Parts
Company............. 9,107,563 10,226,250
200,000 Handy & Harman........ 2,731,264 3,100,000
110,000 Johnson Controls,
Inc. ............... 2,895,432 6,215,000
140,000 Modine Manufacturing
Company............. 1,346,281 5,145,000
36,250 Myers Industries,
Inc.+............... 139,536 521,094
40,000 Pep Boys - Manny,
Moe & Jack.......... 722,750 1,070,000
170,000 Quaker State
Corporation......... 2,329,573 2,550,000
50,000 Republic Automotive
Parts, Inc.+........ 278,125 743,750
100,000 Standard Motor
Products, Inc. ..... 708,500 2,025,000
13,200 Superior Industries
International,
Inc. ............... 76,515 410,850
45,000 UAP Inc., Class A..... 503,653 528,323
34,000 Wynn's International,
Inc. ............... 562,295 790,500
------------ ------------
33,944,398 56,873,080
------------ ------------
AVIATION: PARTS AND SERVICES -- 0.9%
40,000 Boeing Co............. 2,411,598 2,505,000
100,000 Curtiss-Wright
Corporation......... 2,479,222 4,462,500
35,000 General Motors
Corporation, Class
H................... 1,362,850 1,382,500
70,000 Hi-Shear Industries
Inc.+............... 945,739 516,250
21,000 Hudson General
Corporation......... 397,275 426,563
------------ ------------
7,596,684 9,292,813
------------ ------------
BROADCASTING -- 4.9%
70,000 BHC Communications,
Inc., Class A+...... 5,081,678 5,626,250
86,000 Capital Cities/ABC,
Inc. ............... 4,120,694 9,288,000
12,695 CBS Inc. ............. 412,268 850,565
385,637 Chris-Craft
Industries, Inc. ... 8,421,873 13,497,295
63,651 Chris-Craft
Industries, Inc.,
Class B(a).......... 1,132,474 2,227,802
90,000 Citicasters Inc.+..... 1,779,125 2,475,000
100,000 Grupo Televisa S.A.,
GDR................. 1,892,158 2,037,500
130,000 Havas, Sponsored
ADR................. 2,548,559 2,551,250
65,000 Liberty Corporation... 1,406,292 1,771,250
53,000 LIN Television
Corporation+........ 587,795 1,782,125
20,000 Osborn Communications
Corporation+........ 153,701 125,000
46,000 Outlet Communications,
Inc., Class A+...... 355,150 1,725,000
400,000 Television
Broadcasting Ltd.
ORD................. 1,816,844 1,406,084
100,000 United Television,
Inc. ............... 2,880,469 7,100,000
------------ ------------
32,589,080 52,463,121
------------ ------------
BUSINESS SERVICES -- 2.2%
16,500 Berlitz International,
Inc., New+.......... 225,825 243,375
30,000 Honeywell, Inc. ...... 1,275,675 1,293,750
120,000 International Business
Machines
Corporation......... 6,030,895 11,520,000
72,000 Landauer, Inc. ....... 447,792 1,359,000
125,500 Lotus Development
Corporation+........ 8,002,508 8,000,625
70,000 Nashua Corporation.... 2,287,655 1,330,000
------------ ------------
18,270,350 23,746,750
------------ ------------
CABLE -- 4.4%
60,000 BET Holdings, Inc.,
Class A+............ 1,030,737 1,095,000
10,000 Cablevision Systems
Corporation, Class
A+.................. 433,875 637,500
60,000 Comcast Corporation,
Class A............. 876,722 1,091,250
30,000 Comcast Corporation,
Class A Special..... 626,505 556,875
111 International CableTel
Incorporated+....... 465 3,607
220,000 International Family
Entertainment, Inc.,
Class B+............ 2,936,801 3,465,000
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
THE GABELLI ASSET FUND
<TABLE>
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
CABLE (CONTINUED)
390,000 Media General, Inc.,
Class A............. $ 9,918,157 $ 11,895,000
200,000 Multimedia, Inc.,
New+................ 6,505,841 7,750,000
20,000 Shaw Cable Systems
Ltd., Class B,
Conv. .............. 119,575 121,956
40,000 Shaw Communications Inc.,
Class B, Conv. ....... 363,398 240,480
840,000 Tele-Communications,
Inc., Class A+...... 18,049,304 19,687,500
50,000 United International Holdings,
Inc., Class A+........ 657,213 837,500
------------ ------------
41,518,593 47,381,668
------------ ------------
CONSUMER PRODUCTS -- 10.0%
585,000 American Brands,
Inc. ............... 20,670,018 23,253,750
25,000 Black & Decker
Corporation......... 442,990 771,875
160,000 Brunswick
Corporation......... 2,161,900 2,720,000
380,000 Carter-Wallace,
Inc. ............... 6,394,170 4,322,500
185,000 Church & Dwight
Co., Inc. .......... 4,327,298 3,838,750
4,500 Culbro Corporation+... 129,753 148,500
25,000 Duracell International
Inc. ............... 720,736 1,081,250
30,000 Eastman Kodak
Company............. 1,348,399 1,818,750
145,000 Fieldcrest Cannon,
Inc.+............... 2,024,147 3,135,625
43,000 First Brands
Corporation......... 1,130,276 1,843,625
261,000 General Electric
Company............. 12,749,541 14,713,875
53,000 Gillette Company...... 1,493,550 2,365,125
25,000 Libbey Inc. .......... 323,600 518,750
60,000 Outboard Marine
Corp. .............. 1,159,738 1,177,500
5,000 Park-Ohio Industries,
Inc.+............... 57,500 60,000
25,000 Philip Morris
Companies Inc. ..... 1,255,273 1,859,375
100,000 Philips Electronics
N.V. ............... 1,529,543 4,275,000
160,000 Procter & Gamble
Company............. 8,827,142 11,500,000
255,000 Ralston Purina
Group............... 10,127,321 13,005,000
50,000 Scotts Company,
Class A+............ 798,406 1,093,750
75,000 Syratech
Corporation+........ 1,382,505 1,378,125
130,000 Tambrands Inc. ....... 5,386,648 5,557,500
330,000 Whitman Corporation... 3,085,163 6,393,750
------------ ------------
87,525,617 106,832,375
------------ ------------
CONSUMER SERVICES -- 0.4%
180,000 Rollins, Inc. ........ 2,111,982 4,320,000
------------ ------------
CLOSED-END FUNDS -- 0.1%
59,972 Royce Value Trust,
Inc. ............... 645,984 719,664
------------ ------------
DIVERSIFIED INDUSTRIAL -- 3.9%
45,000 GATX Corporation...... 1,039,561 2,120,625
10,000 ITEL Corporation+..... 180,175 390,000
100,000 ITT Corporation....... 5,939,166 11,750,000
150,000 Katy Industries,
Inc. ............... 1,357,500 1,181,250
6,500 Kyocera Corporation,
ADR................. 448,063 1,062,750
375,000 Lamson & Sessions
Co.+................ 2,011,040 2,156,250
90,000 Lawter International,
Inc. ............... 698,250 1,080,000
160,000 Minnesota Mining and
Manufacturing
Company............. 8,558,263 9,160,000
62,000 National Service
Industries, Inc. ... 1,327,611 1,790,250
75,000 Tenneco Inc. ......... 3,150,680 3,450,000
60,000 Thomas Industries
Inc. ............... 920,097 982,500
200,000 Trinity Industries,
Inc. ............... 2,724,402 6,650,000
------------ ------------
28,354,808 41,773,625
------------ ------------
ENERGY -- 3.1%
49,500 Atlantic Richfield
Company............. 5,323,951 5,432,625
35,000 British Petroleum
Company plc, ADR.... 1,568,032 2,996,875
135,000 Burlington Resources
Inc. ............... 6,062,137 4,978,125
30,000 Chevron Corporation... 1,016,500 1,398,750
170,000 Eastern Enterprises... 4,578,075 5,078,750
60,000 Enron Oil & Gas
Company............. 548,976 1,305,000
110,000 Exxon Corporation..... 6,704,069 7,768,750
350,000 Kaneb Services,
Inc.+............... 1,662,052 743,750
50,000 PacifiCorp............ 971,882 937,500
70,000 Southwest Gas
Corporation......... 1,225,138 997,500
30,000 Texaco Inc. .......... 1,890,875 1,968,750
------------ ------------
31,551,687 33,606,375
------------ ------------
ENTERTAINMENT -- 4.7%
55,000 Bay Meadows Operating
Company............. 908,526 880,000
171,675 Gaylord Entertainment
Company, Class A.... 3,591,609 4,334,794
55,000 GC Companies, Inc.+... 1,328,672 1,801,250
40,000 GTECH Holdings
Corporation+........ 755,188 1,170,000
20,000 PolyGram NV........... 574,275 1,182,500
20,000 Santa Anita Realty
Enterprises, Inc. .. 357,975 290,000
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
ENTERTAINMENT (CONTINUED)
10,000 Sony Music
Entertainment ORD... $ 433,472 $ 423,574
110,000 THORN EMI plc,
Sponsored ADR....... 1,609,000 2,316,875
535,000 Time Warner Inc. ..... 13,219,248 22,001,875
10,480 Todd-AO Corporation,
Class A............. 31,440 60,260
120,000 Viacom Inc., Class
A+.................. 1,750,202 5,580,000
225,000 Viacom Inc., Class
B+.................. 6,165,035 10,434,375
------------ ------------
30,724,642 50,475,503
------------ ------------
FINANCIAL SERVICES -- 5.0%
1 Al-Zar Ltd.+(a)....... 0 350
640,000 American Express
Company............. 15,593,345 22,480,000
220 Berkshire Hathaway
Inc.+............... 874,549 5,159,000
35,000 Commerzbank AG,
Sponsored ADR....... 1,366,544 1,677,812
140,000 Deutsche Bank AG,
Sponsored ADR....... 6,094,375 6,816,250
15,000 Financial Security
Assurance Holdings
Ltd. ............... 320,687 375,000
10,000 H&R Block, Inc. ...... 360,250 411,250
330,000 Lehman Brothers
Holdings Inc. ...... 4,871,475 7,218,750
83,000 Midland Company....... 2,562,632 3,631,250
70,000 Salomon Inc. ......... 2,531,011 2,808,750
25,000 State Street Boston
Corporation......... 717,713 921,875
10,000 SunTrust Banks,
Inc. ............... 424,879 582,500
11,941 Transamerica
Corporation......... 583,636 695,563
9,500 Value Line, Inc. ..... 138,000 311,125
------------ ------------
36,439,096 53,089,475
------------ ------------
FOOD AND BEVERAGE -- 5.4%
53,700 Brown-Forman
Corporation,
Class A............. 1,716,322 1,772,100
60,000 Campbell Soup
Company............. 1,483,100 2,940,000
72,100 Chock Full o'Nuts
Corporation......... 451,407 495,688
23,000 Coca-Cola Company..... 395,569 1,466,250
100,000 Coca-Cola
Enterprises Inc. ... 1,578,771 2,187,500
17,000 CPC International
Inc. ............... 602,088 1,049,750
50,000 Darden Restaurants
Inc. ............... 239,951 543,750
47,000 Delchamps, Inc. ...... 1,111,792 904,750
100,000 Dole Food Company,
Inc. ............... 3,048,300 2,912,500
2,500 Farmer Brothers
Company............. 200,625 306,250
62,500 General Mills,
Inc. ............... 1,396,165 3,210,937
25,000 Heinz (H.J.)
Company............. 972,562 1,109,375
38,000 Hershey Foods
Corporation......... 1,626,712 2,099,500
84,000 Kellogg Company....... 3,173,732 5,995,500
1,000 LVHM Moet Hennessy
Louis Vuitton,
Sponsored ADR....... 37,000 36,250
280,000 PepsiCo, Inc. ........ 9,246,935 12,775,000
145,000 Quaker Oats Company... 4,142,373 4,766,875
69,933 Ralcorp Holdings,
Inc.+............... 1,047,674 1,599,717
25,000 Robert Mondavi Wine
Corporation, Class
A+.................. 225,237 437,500
185,000 Seagram Company
Ltd. ............... 4,935,375 6,405,625
15,000 Tootsie Roll
Industries, Inc. ... 975,010 1,038,750
86,000 Wrigley (Wm.) Jr.
Company............. 3,633,399 3,988,250
------------ ------------
42,240,099 58,041,817
------------ ------------
HEALTH CARE -- 3.2%
10,000 Amgen Inc.+........... 361,229 804,375
10,000 Biogen, Inc.+......... 299,450 445,000
20,000 BioWhittaker, Inc.+... 99,053 150,000
12,000 Chiron Corporation+... 663,895 780,000
85,000 Genentech, Inc.+...... 4,096,099 4,133,125
185,000 Johnson & Johnson..... 8,269,689 12,510,625
70,000 Mallinckrodt Group,
Inc. ............... 2,175,407 2,485,000
135,200 Marion Merrell Dow
Inc. ............... 4,170,168 3,447,600
99,999 Merck & Co., Inc. .... 3,387,816 4,899,951
50,000 Pfizer Inc. .......... 3,391,165 4,618,750
------------ ------------
26,913,971 34,274,426
------------ ------------
HOTELS/CASINOS -- 1.6%
175,000 Hilton Hotels
Corporation......... 8,720,224 12,293,750
175,000 Ladbroke Group plc.... 456,472 470,316
112,000 Mirage Resorts,
Incorporated+....... 1,151,217 3,430,000
23,500 Promus Companies...... 300,725 916,500
------------ ------------
10,628,638 17,110,566
------------ ------------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 12.6%
320,000 AMETEK, Inc. ......... 4,428,042 5,760,000
100,000 AMP Incorporated...... 3,647,267 4,225,000
25,000 Amphenol Corporation,
Class A+............ 286,812 728,125
270,000 AptarGroup, Inc. ..... 3,976,355 8,673,750
64,000 Caterpillar Inc. ..... 1,729,874 4,112,000
65,000 CLARCOR Inc. ......... 1,239,362 1,486,875
150,000 Crane Co. ............ 3,970,482 5,437,500
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
THE GABELLI ASSET FUND
<TABLE>
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
INDUSTRIAL EQUIPMENT AND SUPPLIES (CONTINUED)
100,000 CTS Corporation....... $ 2,084,351 $ 3,050,000
152,500 Deere & Company....... 6,899,735 13,057,813
290,000 Donaldson Company,
Inc. ............... 3,314,495 7,576,250
150,000 Gerber Scientific,
Inc. ............... 1,448,232 2,512,500
140,000 Greif Bros.
Corporation,
Class A............. 2,531,260 3,272,500
120,000 Guardsman Products,
Inc. ............... 1,373,196 1,545,000
10,546 Hach Company.......... 116,905 142,371
395,000 IDEX Corporation...... 4,645,132 13,232,500
200,000 Kollmorgen
Corporation......... 1,861,980 1,750,000
100,000 Lufkin Industries,
Inc. ............... 1,816,709 1,875,000
40,000 M/A Com, Inc.+........ 197,525 470,000
60,000 Manitowoc
Company, Inc. ...... 1,343,957 1,732,500
284,182 Mark IV Industries,
Inc. ............... 2,176,067 6,109,913
295,000 Navistar International
Corporation+........ 6,408,071 4,461,875
165,000 Nortek, Inc.+......... 659,077 1,423,125
4,333 Nortek, Inc., Special
Common+(a).......... 59,049 37,372
10,000 PACCAR Inc. .......... 522,021 467,500
74,000 Pittway Corporation... 1,157,186 3,385,500
200,000 Pittway Corporation,
Class A............. 2,790,133 9,150,000
45,000 Sequa Corporation,
Class A+............ 1,831,730 1,316,250
80,000 Sequa Corporation,
Class B+............ 3,897,715 2,680,000
80,000 SPS Technologies,
Inc.+............... 2,233,594 3,010,000
145,000 St. Joe Paper
Company............. 4,974,244 9,207,500
12,000 Truck Components,
Inc.+............... 120,000 189,000
20,000 Valmont Industries,
Inc. ............... 349,658 432,500
290,000 Varity Corporation,
New+................ 5,988,984 12,760,000
------------ ------------
80,079,200 135,270,219
------------ ------------
METALS AND MINING -- 0.6%
34,350 Barrick Gold
Corporation......... 733,755 867,337
60,000 Echo Bay Mines
Ltd. ............... 682,400 540,000
35,000 Homestake Mining
Company............. 610,562 577,500
100,000 Horsham Corporation... 1,401,937 1,350,000
28,000 Newmont Gold
Company............. 1,189,303 1,127,000
130,000 Pegasus Gold Inc.+.... 2,193,994 1,316,250
17,500 Placer Dome Inc. ..... 336,400 457,188
150,000 Royal Oak Mines
Inc.*............... 630,961 468,750
------------ ------------
7,779,312 6,704,025
------------ ------------
PUBLISHING -- 1.7%
72,000 American Media
Inc. ............... 715,912 495,000
6,000 Central Newspapers,
Inc. ............... 152,488 177,750
5,000 E.W. Scripps Company,
Class A............. 99,627 161,250
32,000 McClatchy Newspapers,
Inc., Class A....... 640,975 708,000
80,000 McGraw-Hill
Companies, Inc. .... 4,572,950 6,070,000
159,993 New York Times
Company, Class A.... 2,461,143 3,759,835
13,000 News Corporation
Limited, ADS........ 207,737 294,125
80,000 Reader's Digest
Association Inc.,
Class B............. 3,170,784 3,270,000
325,000 Western Publishing
Group, Inc.+........ 4,715,094 3,656,250
------------ ------------
16,736,710 18,592,210
------------ ------------
RETAIL -- 1.4%
20,000 Aaron Rents, Inc.,
Class A............. 169,609 317,500
13,000 Aaron Rents, Inc.,
Class B............. 72,755 195,000
149,100 Burlington Coat
Factory Warehouse
Corporation+........ 1,968,480 1,546,912
125,000 Earl Scheib, Inc.+.... 885,924 687,500
50,000 Fingerhut
Companies, Inc. .... 711,335 781,250
60,000 Jostens, Inc. ........ 1,148,355 1,275,000
18,000 Lillian Vernon
Corporation......... 280,898 330,750
672,000 Neiman Marcus
Group, Inc.......... 9,711,887 9,576,000
------------ ------------
14,949,243 14,709,912
------------ ------------
RETAIL: FOOD AND DRUG -- 0.5%
25,000 Albertson's, Inc. .... 706,250 743,750
130,000 American Stores
Company............. 3,286,713 3,656,250
50,000 Kroger Co.+........... 1,156,250 1,343,750
------------ ------------
5,149,213 5,743,750
------------ ------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
THE GABELLI ASSET FUND
<TABLE>
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
SPECIALTY CHEMICAL -- 0.9%
50,000 E.I. du Pont de
Nemours and
Company............. $ 3,122,625 $ 3,437,500
210,000 Ferro Corporation..... 4,351,915 5,565,000
45,000 Pratt & Lambert,
Inc. ............... 647,100 1,051,875
------------ ------------
8,121,640 10,054,375
------------ ------------
TELECOMMUNICATIONS -- 10.5%
450,000 AT&T Corp............. 21,826,241 23,906,250
40,000 BC TELECOM Inc. ...... 710,023 687,552
215,000 BCE Inc. ............. 7,474,075 6,906,875
12,500 BellSouth
Corporation......... 649,466 793,750
9,000 British
Telecommunications
plc, Sponsored
ADR................. 577,730 564,750
60,000 Cable & Wireless plc,
Sponsored ADR....... 1,241,955 1,230,000
354,000 C-TEC Corporation,
Class A+............ 6,573,829 8,894,250
44,000 C-TEC Corporation,
Class B+............ 653,144 1,100,000
111,500 Frontier
Corporation......... 1,754,069 2,676,000
40,000 Globalstar
Telecommunications+... 748,250 530,000
318,000 GTE Corporation....... 6,127,042 10,851,750
35,000 Hong Kong
Telecommunications
Ltd., Sponsored
ADR................. 545,695 695,625
130,000 Lincoln
Telecommunications
Company............. 1,818,824 2,047,500
60,000 Motorola, Inc. ....... 831,606 4,027,500
65,000 NYNEX Corporation..... 2,634,717 2,616,250
40,000 Pacific Telesis
Group............... 1,146,205 1,070,000
90,000 Royal PTT Nederland
NV, Sponsored ADR,
144A(c)............. 2,407,383 3,223,125
100,000 SBC Communications
Inc. ............... 2,131,081 4,762,500
28,000 Southern New England
Telecommunications
Corporation......... 942,025 987,000
440,000 Sprint Corporation.... 9,421,927 14,795,000
2,500,000 STET - Societa
Finanziaria
Telefonica SpA
ORD................. 5,705,495 6,913,675
2,200,000 Telecom Italia SpA,
ORD................. 4,438,995 5,963,025
107,500 Telecomunicacoes
Brasileiras SA
(Telebras),
Sponsored ADR....... 3,223,817 3,547,500
2,153 Telecomunicacoes
Brasileiras SA
(Telebras),
Sponsored ADR,
144A(c)+. .......... 89,889 71,049
1,521,945 Telecomunicacoes de
Sao Paulo SA
(Telesp)+........... 190,267 189,313
16,000 Telefonica de Espana,
Sponsored ADR....... 511,408 620,000
20,000 Telefonos De Mexico
SA, Sponsored ADR... 704,937 592,500
50,000 US WEST, Inc. ........ 1,973,766 2,081,250
------------ ------------
87,053,861 112,343,989
------------ ------------
TRANSPORTATION -- 0.1%
13,500 Florida East Coast
Industries Inc. .... 713,262 995,625
------------ ------------
WIRELESS COMMUNICATIONS -- 4.4%
250,000 AirTouch
Communications
Inc.+............... 5,767,779 7,125,000
133,000 Allen Group Inc. ..... 887,158 3,940,125
18,500 Associated Group,
Inc., Class A+...... 98,788 319,125
18,500 Associated Group,
Inc., Class B+...... 98,787 342,250
667 Cellular
Communications,
Inc., Series A+..... 8,650 30,349
260,000 Century Telephone
Enterprises,
Inc. ............... 4,542,614 7,377,500
140,000 COMSAT Corporation,
Series 1............ 3,086,794 2,747,500
154,200 LIN Broadcasting
Corporation......... 12,443,770 19,506,300
80,000 NEXTEL Communications,
Inc., Class A+...... 1,005,002 1,130,000
137,000 Telephone and Data
Systems, Inc. ...... 1,254,666 4,983,375
------------ ------------
29,194,008 47,501,524
------------ ------------
TOTAL COMMON STOCKS................ 702,016,902 968,854,262
------------ ------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
THE GABELLI ASSET FUND
<TABLE>
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------ -----------
<C> <S> <C> <C>
PREFERRED STOCKS -- 0.5%
CONSUMER PRODUCTS -- 0.2%
45,000 Fieldcrest Cannon,
Inc., 6.00%, Series
A, Conv. Pfd.,
144A(c)............. $ 2,486,250 $ 2,137,500
2,000 Kerr Group, Inc.,
Cumulative Conv.
Pfd., Class B,
Series D, $1.70..... 33,975 40,250
------------ ------------
2,520,225 2,177,750
------------ ------------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 0.2%
20,000 Sequa Corporation,
Cumulative Conv.
Pfd., $5.00......... 1,538,833 1,340,000
------------ ------------
METALS AND MINING -- 0.0%
10,000 Freeport-McMoRan Inc.,
Cumulative Conv.
Pfd., Depository
Shares, 7.00%....... 213,000 216,250
------------ ------------
TELECOMMUNICATIONS -- 0.1%
35,000 Sprint Corporation,
8.25%,
Conv. Pfd........... 1,115,625 1,216,250
------------ ------------
TOTAL PREFERRED STOCKS............. 5,387,683 4,950,250
------------ ------------
COMMON STOCK WARRANTS AND RIGHTS -- 0.0%
ENTERTAINMENT -- 0.0%
60,000 Viacom Inc.,
Contingent Value
Rights, expires
07/07/1995+......... 307,500 86,250
32,000 Viacom Inc.,
Class C, expires
06/06/1997+......... 39,500 118,000
------------ ------------
TOTAL COMMON STOCK
WARRANTS AND RIGHTS.............. 347,000 204,250
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT COST VALUE
- ----------- ------------ ------------
<C> <S> <C> <C>
CORPORATE BONDS -- 4.0%
AUTOMOTIVE PARTS AND ACCESSORIES -- 0.0%
$ 400,000 GenCorp Inc., Conv.
Sub. Deb., 8.00%
due 08/01/2002..... $ 395,273 $ 388,500
------------ ------------
BROADCASTING -- 0.0%
FRF593,750 Havas, Conv. Bond,
Payment-in-kind,
3.00% due
12/31/1997......... 158,703 141,288
------------ ------------
ENTERTAINMENT -- 4.0%
$ 6,500,000 Time Warner Inc.,
Reset Note, Zero
Coupon through
08/15/1995 due
08/15/2002......... 5,387,778 6,402,500
32,000,000 Time Warner Inc.,
Conv. Sub. Deb.,
8.75% due
01/10/2015......... 33,633,484 33,480,000
2,750,000 Viacom Inc., Ex. Sub.
Deb., 8.00% due
07/07/2006......... 1,817,477 2,667,500
------------ ------------
40,838,739 42,550,000
------------ ------------
TOTAL CORPORATE BONDS.............. 41,392,715 43,079,788
------------ ------------
U.S. TREASURY BILLS -- 4.9%
53,462,000 5.00% to 5.59%++ due
07/13/1995-
03/07/1996........ 52,546,090 52,696,900
------------ --------------
TOTAL INVESTMENTS......... 99.7% $801,690,390(b) 1,069,785,450
============
OTHER ASSETS AND
LIABILITIES (NET)....... 0.3 3,269,916
------ --------------
NET ASSETS................ 100.0% $1,073,055,366
===== ==============
<FN>
- ---------------
(a) Security fair valued by the Board of Trustees.
(b) Aggregate cost for Federal tax purposes was $802,175,377. Net unrealized
appreciation for Federal tax purposes was $267,610,073 (gross unrealized
appreciation was $281,359,402 and gross unrealized depreciation was
$13,749,329).
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR -- American Depositary Receipt
ADS -- American Depositary Share
FRF -- French Franc
GDR -- Global Depositary Receipt
ORD -- Ordinary Share
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
THE GABELLI ASSET FUND
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995 (UNAUDITED)
- -------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at value (Cost $801,690,390).... $1,069,785,450
Cash......................................... 252,189
Dividends and interest receivable............ 2,838,537
Receivable for investments sold.............. 2,390,180
Receivable for Fund shares sold.............. 503,927
--------------
Total Assets............................... 1,075,770,283
--------------
LIABILITIES:
Payable for investment advisory fee.......... 878,602
Payable for Fund shares redeemed............. 627,424
Payable for investments purchased............ 506,555
Payable for distribution fees................ 327,573
Payable for transfer agent fees.............. 96,650
Accrued expenses and other payables.......... 278,113
--------------
Total Liabilities.......................... 2,714,917
--------------
Net assets applicable to 42,752,373 shares
of beneficial interest outstanding....... $1,073,055,366
==============
NET ASSETS CONSIST OF:
Shares of beneficial interest at par value... $ 427,524
Additional paid-in capital................... 762,824,454
Accumulated net realized gain on
investments................................ 35,541,017
Undistributed net investment income.......... 6,162,933
Net unrealized appreciation of investments... 268,099,438
--------------
Total Net Assets........................... $1,073,055,366
==============
Net Asset Value, offering and redemption
price per share
($1,073,055,366/42,752,373 shares
outstanding, unlimited number of shares
authorized of $0.01 par value)........... $ 25.10
==============
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
- -------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividend income (net of foreign withholding
taxes of $172,448)........................... $ 9,274,972
Interest income................................ 3,850,510
------------
Total investment income...................... 13,125,482
------------
EXPENSES:
Investment advisory fee........................ 5,155,205
Distribution fees.............................. 992,862
Transfer agent fees............................ 268,496
Trustees' fees................................. 33,447
Legal and audit fees........................... 28,900
Other.......................................... 372,696
------------
Total expenses............................... 6,851,606
------------
NET INVESTMENT INCOME............................ 6,273,876
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on securities sold........... 36,276,772
Net realized gain on foreign currency
transactions................................. 4,679
------------
Net realized gain on investments........... 36,281,451
------------
Net unrealized appreciation of securities,
foreign currency and other assets and
liabilities:
Beginning of period.......................... 184,011,589
End of period................................ 268,099,438
------------
Change in net unrealized appreciation of
securities, foreign currency and other
assets and liabilities................... 84,087,849
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS.................................... 120,369,300
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... $126,643,176
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
6/30/95 YEAR ENDED
(UNAUDITED) 12/31/94
---------------- ------------
<S> <C> <C>
Net investment income......................................................................... $ 6,273,876 $ 11,062,756
Net realized gain on investments.............................................................. 36,281,451 33,486,441
Net change in unrealized appreciation/depreciation of investments............................. 84,087,849 (46,397,512)
-------------- ------------
Net increase/(decrease) in net assets resulting from operations............................. 126,643,176 (1,848,315)
Distributions to shareholders from:
Net investment income....................................................................... -- (10,988,841)
Distributions in excess of net investment income............................................ -- (110,943)
Net realized gain on investments............................................................ -- (32,875,775)
Distributions in excess of net realized gain on investments................................. -- (740,434)
Net increase/(decrease) in net assets from Fund share transactions............................ (35,837,521) 83,405,757
-------------- ------------
Net increase in net assets.................................................................... 90,805,655 36,841,449
NET ASSETS:
Beginning of period......................................................................... 982,249,711 945,408,262
-------------- ------------
End of period (including undistributed net investment income
of $6,162,933 at June 30, 1995)........................................................... $1,073,055,366 $982,249,711
============== ============
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. The Gabelli Asset Fund (the "Fund") was
organized on November 25, 1985 as a Massachusetts business trust. The Fund is a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund commenced
operations on March 3, 1986. The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements.
SECURITY VALUATION. Portfolio securities which are traded only on a
nationally recognized securities exchange or in the over-the-counter market
which are National Market System Securities are valued at the last sale price as
of the close of business on the day the securities are being valued, or lacking
any sales, at the mean between closing bid and asked prices. Other
over-the-counter securities are valued at the mean between current bid and asked
prices as reported by NASDAQ, the National Quotation Bureau or such other
comparable sources as the Board of Trustees deems appropriate to reflect their
fair value. Portfolio securities which are traded both in the over-the-counter
market and on a stock exchange are valued according to the broadest and most
representative market, as determined by Gabelli Funds, Inc. (the "Adviser").
Securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Trustees of the Fund. U.S. government securities and other debt
instruments that mature in more than 60 days are valued at the highest bid price
obtained from a dealer maintaining an active market in that security. Short-term
investments that mature in 60 days or fewer are valued at amortized cost, unless
the Board of Trustees determines that such valuation does not constitute fair
value. Debt instruments having a greater maturity are valued at the highest bid
price obtained from a dealer maintaining an active market in those securities or
on the basis of prices obtained from a pricing service approved as reliable by
the Board of Trustees.
FOREIGN CURRENCY. The books and records of the Fund are maintained in
United States (U.S.) dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated on the respective dates of such
transactions. Unrealized gains and losses, not relating to securities, which
result from changes in foreign currency exchange rates have been included in
unrealized appreciation/depreciation of foreign currency and other assets and
liabilities. Unrealized gains and losses of securities, which result from
changes in foreign exchange rates as well as changes in market prices of
securities, have been included in unrealized appreciation/depreciation of
investment securities. Net realized foreign currency gains and losses resulting
from changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments sold.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined using specific identification as the cost method. Interest income
(including amortization of premium and discount) is recorded as earned.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Income
distributions and capital gain distributions are determined in
16
<PAGE>
THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
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, timing differences and differing characterization of distributions made by
the Fund.
PROVISION FOR INCOME TAXES. The Fund has qualified and intends to continue
to qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
2. AGREEMENTS WITH AFFILIATED PARTIES. The Fund has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Fund will pay the Adviser a fee, computed daily and paid
monthly, at the annual rate of 1.00 percent of the value of the Fund's average
daily net assets. In accordance with the Advisory Agreement, 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. The Adviser 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 the year ended
December 31, 1994 or the six months ended June 30, 1995.
3. DISTRIBUTION PLAN. The Fund has adopted a plan of distribution (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act. Pursuant to this Plan, the
Distributor, Gabelli & Company, Inc. ("Gabelli & Company"), an indirect
majority-owned subsidiary of the Adviser, 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 0.25
percent on an annual basis of the value of the Fund's average daily net assets.
In addition, if and to the extent that the fee the Fund pays to the Adviser 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 six months ended June 30,
1995, the Fund incurred distribution costs under the Plan of $992,862,
representing 0.19 percent of the value of the Fund's average daily net assets.
4. PORTFOLIO SECURITIES. Cost of purchases and proceeds from sales of
securities for the six months ended June 30, 1995, other than U.S. government
and short-term securities, aggregated $141,853,335 and $152,425,537,
respectively.
5. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 1995,
the Fund paid brokerage commissions of $38,298 to Gabelli & Company and its
affiliates.
6. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
6/30/95 12/31/94
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold................................... 4,108,228 $ 97,245,609 13,812,609 $ 319,924,263
Shares issued upon reinvestment of
dividends................................... -- -- 1,830,373 40,652,559
Shares redeemed............................... (5,586,849) (133,083,130) (11,982,003) (277,171,065)
---------- ------------- ----------- -------------
Net increase/(decrease)....................... (1,478,621) $ (35,837,521) 3,660,979 $ 83,405,757
========== ============= =========== =============
</TABLE>
17
<PAGE>
THE GABELLI ASSET FUND -- FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
Per share amounts for a Fund share outstanding throughout each period.
<CAPTION>
SIX MONTHS
ENDED DECEMBER 31,
6/30/95 ----------------------------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990 1989 1988 1987 1986*
----------- -------- -------- -------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING
PERFORMANCE:
Net asset value,
beginning of
period............ $ 22.21 $ 23.30 $ 19.88 $ 17.96 $ 15.63 $ 17.26 $ 14.69 $ 12.61 $ 11.28 $ 10.00
---------- -------- -------- -------- -------- -------- -------- -------- ------- -------
Net investment
income (a)........ 0.15 0.26 0.16 0.26 0.39 0.76 0.55 0.24 0.14 0.10
Net realized and
unrealized
gain/(loss) on
investments....... 2.74 (0.30) 4.18 2.41 2.45 (1.62) 3.30 3.45 1.69 1.18
---------- -------- -------- -------- -------- -------- -------- -------- ------- -------
Total from
investment
operations...... 2.89 (0.04) 4.34 2.67 2.84 (0.86) 3.85 3.69 1.83 1.28
---------- -------- -------- -------- -------- -------- -------- -------- ------- -------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income.......... -- (0.25) (0.16) (0.25) (0.39) (0.77) (0.56) (0.38) (0.09) --
Distributions in
excess of net
investment
income.......... -- (0.01) -- -- -- -- -- -- -- --
Net realized
gains........... -- (0.76) (0.76) (0.50) (0.12) -- (0.72) (1.23) (0.41) --
Distributions in
excess of net
realized
gains........... -- (0.03) -- -- -- -- -- -- -- --
---------- -------- -------- -------- -------- -------- -------- -------- ------- -------
Total
distributions... -- (1.05) (0.92) (0.75) (0.51) (0.77) (1.28) (1.61) (0.50) --
---------- -------- -------- -------- -------- -------- -------- -------- ------- -------
Net asset value,
end of period..... $ 25.10 $ 22.21 $ 23.30 $ 19.88 $ 17.96 $ 15.63 $ 17.26 $ 14.69 $ 12.61 $ 11.28
========== ======== ======== ======== ======== ======== ======== ======== ======= =======
Total return **..... 13.0% (0.1)% 21.8% 14.9% 18.1% (5.0)% 26.2% 31.1% 16.2% 12.8%
========== ======== ======== ======== ======== ======== ======== ======== ======= =======
RATIOS TO AVERAGE
NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of
period
(in 000's)........ $1,073,055 $982,250 $945,408 $632,575 $483,865 $342,710 $359,443 $143,050 $76,810 $48,911
Ratio of net
investment
income to
average net
assets.......... 1.22%+ 1.10% 0.82% 1.42% 2.34% 4.51% 4.17% 2.04% 1.19% 1.87%+
Ratio of operating
expenses to
average net
assets (b)...... 1.33%+ 1.28% 1.31% 1.31% 1.30% 1.20% 1.26% 1.31% 1.26% 1.67%+
Portfolio turnover
rate.............. 14.7% 18.7% 16.0% 14.4% 20.1% 55.7% 49.3% 47.3% 89.9% 126.6%
<FN>
- ---------------
* The Fund commenced operations on March 3, 1986.
** Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
+ Annualized.
(a) Net investment income before expenses reimbursed by Adviser for the years
ended December 31, 1988 and 1987 and the period ended December 31, 1986 was
$0.23, $0.11 and $0.09, respectively.
(b) Operating expense ratios before expenses reimbursed by Adviser for the
years ended December 31, 1988 and 1987 and the period ended December 31,
1986 were 1.38%, 1.52% and 1.83%, respectively.
</TABLE>
18
<PAGE>
GABELLI FAMILY OF FUNDS
Distributed by Gabelli & Company, Inc.
One Corporate Center, Rye, NY 10580-1435
GABELLI ASSET FUND --------------------------------------------------
Invests in a diversified portfolio of companies selling below their
private market value. The Fund's primary objective is to seek growth
of capital. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI GROWTH FUND ------------------------------------------------
Invests in a diversified portfolio of common stocks that have
favorable, yet undervalued, prospects for earnings growth. The
Fund's primary objective is to seek capital appreciation by employing
an earnings-driven investment approach. (No-load)
Portfolio Manager: Howard F. Ward, CFA
GABELLI VALUE FUND --------------------------------------------------
Invests in a concentrated portfolio of securities of companies which
are selling below their private market value. The Fund's primary
objective is long-term capital appreciation. $250 initial minimum for
IRAs.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 5 1/2%
GABELLI SMALL CAP GROWTH FUND ---------------------------------------
Invests primarily in equity securities of smaller companies
(companies with a total market capitalization of less than $500
million) which are believed likely to have rapid growth in revenues
and earnings. The Fund's primary objective is to seek capital
appreciation.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 4 1/2%
GABELLI EQUITY INCOME FUND ------------------------------------------
Invests primarily in a portfolio of income producing equity
securities. Pays quarterly dividends. The Fund's primary objective
is to seek a high level of total return.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 4 1/2%
GABELLI'S WESTWOOD FUNDS --------------------------------------------
Three investment portfolios, designed to pursue a variety of
investment objectives:
Westwood Equity Fund seeks capital appreciation,
Westwood Balanced Fund seeks income and growth, and
Westwood Intermediate Bond Fund seeks current income.
(No-load)
Portfolio Managers: Susan Byrne & Pat Fraze
GABELLI U.S. TREASURY MONEY MARKET FUND -----------------------------
Invests exclusively in short-term U.S. Treasury securities. The
Fund's primary objective is to provide high current income consistent
with the preservation of principal and liquidity. Features low
expenses, free checkwriting, telephone exchange and redemption
privileges. Portfolio Manager: Ronald Eaker
GABELLI GLOBAL SERIES -----------------------------------------------
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Invests in telecommunications companies throughout the
world. Targets undervalued companies with strong earnings
per share and cash flow dynamics. The Fund's primary
objective is to seek capital appreciation. (No-load)
Team Manager: Mario J. Gabelli, CFA
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Invests principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic
companies. The Fund's primary objective is to seek a high
level of total return through a combination of current income
and capital appreciation. (No-load)
Portfolio Manager: Hart Woodson
GABELLI GLOBAL INTERACTIVE COUCH POTATO FUND (TM)(C)
Invests in companies involved in communications, creativity
and copyright throughout the world. The Fund will also invest
in companies participating in emerging technological advances
in interactive services and products. The Fund's primary
objective is to seek capital appreciation. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI GOLD FUND ---------------------------------------------------
Invests in a global portfolio of equity securities of gold mining
and related companies. The Fund's primary objective is to seek
capital appreciation. Investment in gold stocks is considered
speculative and is affected by a variety of worldwide economic,
financial and political factors. (No-load)
Portfolio Manager: Caesar Bryan
GABELLI INTERNATIONAL GROWTH FUND -----------------------------------
Invests in a diversified portfolio of equity securities of companies
outside of the U.S. Seeks to achieve international diversification
and capital appreciation, and to serve as a complement to a domestic
investment portfolio. (No-load)
Portfolio Manager: Caesar Bryan
The five funds above invest in foreign securities which involves
risks not ordinarily associated with investments in domestic issues,
including currency fluctuation, economic and political risks.
To request a prospectus, call
1-800-GABELLI (1-800-422-3554)
Or, visit our Internet homepage at:
HTTP://WWW.GABELLI.COM/GABELLI
The prospectus(es) contain more complete information, including fees
and expenses, and should be read carefully prior to investing.
<PAGE>
THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
<TABLE>
BOARD OF TRUSTEES
<S> <C>
Mario J. Gabelli, CFA Karl Otto Pohl
President and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Funds, Inc.
Felix J. Christiana Anthony R. Pustorino
Former Senior Certified Public Accountant
Vice President Professor, Pace University
Dollar Dry Dock Savings Bank
Anthony J. Colavita Anthonie C. van Ekris
Attorney-at-Law Managing Director
Anthony J. Colavita, P.C. BALMAC International, Inc.
James P. Conn Salvatore J. Zizza
Managing Director and Chairman, Chief
Chief Investment Officer Executive Officer
Financial Security
Assurance The Lehigh Group, Inc.
OFFICERS AND PORTFOLIO MANAGERS
Mario J. Gabelli, CFA Bruce N. Alpert
Portfolio Manager President and Treasurer
James E. McKee
Secretary
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom
</TABLE>
- -------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of
The Gabelli Asset Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- -------------------------------------------------------------------------------
[LOGO]
THE
GABELLI
ASSET
FUND
SEMI-ANNUAL REPORT
JUNE 30, 1995
