<PAGE>
THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1434
THIRD QUARTER REPORT
SEPTEMBER 30, 1995
TO OUR SHAREHOLDERS: During the three months ended September 30, 1995,
increasing investor confidence that the economy was landing with its nose up
resulted in another strong backdrop for U.S. stocks. Consumer non-durables
replaced high technology stocks as market leaders. Bank stocks performed well
as the visible Chase Manhattan/Chemical merger underscored accelerating
consolidation in that industry. The Disney/Capital Cities, Westinghouse/CBS,
and Time Warner/Turner Broadcasting deals focused attention on underlying valu
es in the media marketplace.
<TABLE>
INVESTMENT RESULTS (a)
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
QUARTER
---------------------------------------------
1ST 2ND 3RD 4TH YEAR
--- --- --- --- ----
<S> <C> <C> <C> <C> <C> <C>
1995: Net Asset Value............... $23.84 $25.10 $26.76 - -
Total Return.................. 7.3% 5.3% 6.6% - -
- ----------------------------------------------------------------------------------------------------------------
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>
<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
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL RETURNS - SEPTEMBER 30, 1995(a)
----------------------------------------------
<S> <C>
1 Year................................... 19.0%
5 Year................................... 16.5%
Life of Fund (b)......................... 15.9%
</TABLE>
(a) Total returns 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.
<PAGE>
INVESTMENT PERFORMANCE
For the third quarter ended September 30, 1995, The Gabelli Asset Fund's
(the "Fund") net asset value increased a solid 6.6% to $26.76 per share from
$25.10 on June 30, 1995. This compares to returns of 7.9%, 6.4% and 9.9% over
the same period for the Standard & Poor's 500 Index ("S&P 500"), the Value Line
Composite and Russell 2000 Index, respectively. Each index is an unmanaged
indicator of stock market performance. For the nine months ended September 30,
1995, the Fund gained 20.5% versus 29.8% for the S&P 500, 19.3% for the Value
Line Composite, and 25.7% for the Russell 2000 Index.
Since inception on March 3, 1986, through September 30, 1995, the Fund
has achieved a total return of 310.1%, which equates to an average annual return
of 15.9%. This compares favorably to a total return of 238.5% for the S&P 500
over the same period, which is equivalent to an average annual return of 13.6%.
As of September 30, 1995, the Fund's shareholders numbered 50,223 and total net
assets were over $1.1 billion.
COMMENTARY
THE MARKET
As money managers entrusted with your hard earned financial assets, we
tend to spend less time pondering good news and more time worrying about what
could go wrong. This mindset no doubt colors our opinions on the economy and
market.
Blessed with 20/20 hindsight, 1995's strong stock market is easily
explained. Steady economic growth, better than expected corporate earnings and
declining interest rates, all under the backdrop of investor optimism that
Washington will finally put our government's fiscal house in order, provided a
nearly perfect formula for a big market rally. These fundamentals were fueled
by a favorable flow of funds into U.S. equities through mutual funds and a
record amount being reinvested from torrid merger and acquisition activity.
Looking forward, we ask whether all the components of this bull market
will remain intact. Will the economy accelerate, and thus rekindle inflationary
concerns? Will corporate earnings continue to be good, although perhaps not as
strong as rising consensus expectations? Are stocks running too far ahead of
economic reality on a valuation basis? Will Washington deliver on its promise
to feed the entrepreneur and starve the bureaucrat? We continuously evaluate
these questions.
Over the short term, we expect the domestic economy to continue chugging
along aided by the higher demand for American products and services from the
reviving economies of Europe and the Pacific Rim. On the inflation front, the
outlook for wage costs, a major component of inflation, remains favorable.
However, the supply/demand balance for selected industrial and agricultural
commodities points to somewhat higher prices. Oil prices may also trend upward
with worldwide energy consumption rising and production shifting to the Middle
East. Overall, while we currently see no yellow flags, we are not among those
investors betting that inflation is stone cold dead.
As for corporate profits, our concern is that after two years of
underestimating earnings, Wall Street may have gone too far in the other
direction. During the third quarter, we have seen a number of high
2
<PAGE>
profile corporations trying to constrain analysts' overly optimistic
expectations. Companies releasing even modest earnings disappointments have
been shelled in the market. Fortunately, we expect continued productivity
gains and an uptick in broad economic activity will help fourth quarter
earnings, and results should exceed analysts' cooled off expectations.
On a price/earnings ("P/E") basis, one could argue that the market is
less expensive today than it was at the beginning of 1994. But, remember, P/E
ratios are a function of interest rates and investor expectations. If, as we
anticipate, rates are near an intermediate-term bottom and traders' rosy
earnings expectations are not met, the market could get cheaper despite
reasonably good economic and earnings news.
Washington is another wild card. Will the so-called "Republican
Revolution" result in legislation which promotes long-term fiscal discipline
and prudent economic growth policies? We will get a solid glimpse at this as
the debate over deficit reduction/tax reduction crests in November/December.
Our conclusion from all this conjecture is a simple one: that market
risk has risen. If any of the aforementioned concerns prove to be worth
worrying about, the broad market could hit a rough patch of road. Our response
is consistent with our investment philosophy: to focus on stocks that are
materially underpriced relative to their real world economic value. The
direction of the market will have some short-term impact on stock prices, but
longer term, it will recognize value.
CORPORATE MERGERS AND RESTRUCTURING
HUMPTY--DUMPTY
- --------------
In the familiar nursery rhyme, Humpty Dumpty's fall was a tragedy: "All
the king's horses and all the king's men couldn't put Humpty Dumpty back
together again." Stock market investors are taking a very different attitude to
the breaking of several large corporate eggs. Pending and completed sales and
spin-offs from such companies as American Express Company (AXP - $44.375 -
NYSE), ITT Corporation (ITT - $124.00 - NYSE), Sears, Roebuck and Co. (S -
$36.875 - NYSE), Tenneco Inc. (TEN - $46.25 - NYSE) and most recently, AT&T
Corp. (T - $65.75 - NYSE), have shown that the value of the shell, egg white and
yolk is often greater than that of the whole egg.
Corporate CEOs are under increasing pressure to narrow the spread
between the public price and intrinsic value. We believe this trend will
continue. In many instances, the advantages of dismantling large companies are
clear cut. Parent companies which are able to focus more directly on core
businesses can improve operating performance substantially -- American Express'
progress with its core credit card business is a terrific example of this.
Spin-off companies generally have more focused, incentivized management --
AirTouch Communications Inc. (ATI - $30.625 - NYSE), spun-off by Pacific Telesis
Group Inc. (PAC - $30.75 - NYSE), Allstate Corp. (ALL - $35.375 - NYSE), spun
off by Sears; and Eastman Chemicals Co. (EMN - $64.00 - NYSE), spun off by
Eastman Kodak Company (EK - $59.25 - NYSE) are good examples. By selling
underperforming divisions, companies can raise capital to enhance the growth of
their more profitable existing operations -- see Tenneco as an illustration.
And, by shedding the ugly duckling in an otherwise attractive flock of
businesses, companies like American Brands, Inc. (AMB - $42.25 - NYSE), which
stripped its low multiple life insurance business, receive a better appraisal
from investors.
3
<PAGE>
As we predicted at the outset of 1995, our portfolio has experienced
some of the benefits of egg breaking in portfolio holdings such as AirTouch
Communications, Allen Group Inc. (ALN - $36.25 - NYSE), American Express,
American Brands and Tenneco. In addition, the portfolio has many other
potential Humpty Dumptys. Hilton Hotels Corporation (HLT - $63.875 - NYSE),
whose announced separation of its hotel and gambling businesses has been
delayed, should be split in early 1996, possibly foreshadowing the sale of one
or both of the businesses. General Motors Corporation (GM - $46.875 - NYSE),
whose parts we believe could be worth as much as $100 per share on an
independent basis, is a prime restructuring candidate, as is Ford Motor Co. (F -
$31.125 - NYSE). Johnson Controls, Inc. (JCI - $63.25 - NYSE) has several
parts which are more valuable as stand alone operations. Time Warner Inc. (TWX
- - $39.75 - NYSE) has expressed a desire to separate its cable television
operations from its content and creativity businesses. The proposed combination
with Turner Broadcasting System, Inc. (TBSA - $27.625 - ASE) will delay progress
on this front, but we believe it is a goal that will eventually be accomplished.
Our conclusion is that investors who focus on Humpty Dumptys won't get
egg on their faces.
THE MEDIA MATING GAME
In 1993, we said that Viacom Inc.'s (VIA - $49.75 - ASE; VIA'B - $49.75
ASE) acquisition of Paramount was only the beginning of the media mating game.
With the Disney/Cap Cities, Westinghouse/CBS and Time Warner/Turner Broadcasting
matches, the activity has intensified. Creativity and content companies need to
ensure distribution of their products. Distribution companies need to guarantee
the supply of programming. Everyone is scrambling for a suitable partner.
Who's attending the party? General Electric Company's (GE - $63.75 -
NYSE) NBC and Seagram Company Ltd.'s (VO - $35.875 - NYSE) MCA are standing
alone by the punch bowl. News Corporation Limited's (NWS - $22.00 - NYSE)
Rupert Murdoch is prowling around the dance floor looking for more partners.
Viacom's Sumner Redstone is resting after his torrid tango with Paramount, but
may have a few more dances in him. Tele-Communications, Inc./Liberty Media
Group's (LBTYA - $26.75 - NASDAQ) John Malone is chaperonin g a group of
attractive little cable networks. He appears willing to let Time Warner dance
with his Turner stake. He may be looking for a replacement for his stable or
perhaps encouraging some of his other wallflowers to dance.
The party won't be over for a while and it's hard to predict who will
ultimately be going home together. However, it's fun to be there with
portfolio holdings like Viacom, Time Warner, Seagram, Liberty Media,
International Family Entertainment, Inc. (FAM - $19.00 - NYSE), Gaylord
Entertainment Company (GET - $27.125 - NYSE), BET Holdings, Inc. (BTV - $20.00
- - NYSE), Chris-Craft Industries, Inc. (CCN - $43.50 - NYSE) and CCN's kissing
cousins BHC Communications, Inc. (BHC - $90.75 - ASE) and United Telev ision,
Inc. (UTVI - $89.25 - NASDAQ).
TIME WARNER/TURNER BROADCASTING
At the time of this writing, the proposed merger between Time Warner and
Turner Broadcasting still faces many hurdles. Time Warner partner US WEST, Inc.
(USW - $47.125 - NYSE) is threatening legal action to block the merger. The
government is raising anti-trust issues. Liberty Media's John Malone still
4
<PAGE>
has effective veto power over the deal. Assuming these obstacles can be
overcome, what would the combined companies offer investors? In our opinion --
a global media entity with outstanding long-term growth potential.
Investors' immediate reaction to the deal has been negative, with Time
Warner stock dropping nearly 10% following the bid for Turner. We know the
problems: perceived near-term dilution for Time Warner shareholders; the
potential for internal management strife; and quite possibly a long delay in
Time Warner's plan to separate its cable television and content businesses.
Now, let's look at the positives: an unrivaled film library to feed
into expanding distribution systems here and abroad; the marriage of the most
consistently profitable filmed entertainment producer and market share leader
in recorded music with the most creative cable network package in the world; a
combined company with sufficient financial muscle to take its products to the
far corners of the globe. Ask yourself, "What American products travel well?"
In addition to Coca-Cola and blue jeans, the answer is news, sports, movies,
and music. The combined Time Warner/Turner Broadcasting has it all.
LET'S MAKE A DEAL
We have talked at length in our last several shareholder letters about
increasing merger and acquisition activity and its likely impact on our
portfolio. Indeed, we believe we were the first on Wall Street to proclaim the
beginning of the third wave of takeovers since World War II. We pointed this
out following GE's takeover attempt of Kemper in early 1994. At the beginning
of this year, we opined that investors in the three Bs - banks, brokers, and
broadcasters - would likely get hit with takeovers. We don't own bank stocks
for the simple reason that we don't feel we have a competitive research
advantage. We have been looking carefully at brokerage firms, some of which
may find their way into our portfolio in the quarters ahead.
We have had major and positive direct hits in the broadcast group, with
Multimedia, Inc. (MMEDC - $43.50 - NASDAQ) and Outlet Communications being
taken over at heady premiums to our purchase prices. We have benefited even
more by the mortar fire around us. Media General, Inc. (MEG'A - $35.75 - ASE)
and the Chris-Craft/BHC/United Television troika have been terrific performers.
If the telecommunications bill currently in front of Congress is passed
relatively intact, broadcast companies will be able to expand their empires.
If deals continue to be done at the kind of multiples to cash flow we have
seen, public share prices in these companies will continue to grow.
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.
[GRAPHIC]
5
<PAGE>
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
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.
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 - $42.25 - NYSE), based in Old Greenwich,
Connecticut, is a holding company for five separate business units:
international tobacco (Gallaher, the leading tobacco company in the U.K.),
distilled spirits (Jim Beam bourbon), hardware and home improvement products
(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. Having disposed of American Tobacco and Franklin
Life, a new management team is transforming American Brands into a focused
consumer products company. The company's shares trade at a 30% discount to
their estimated 1995 PMV of $60 which we expect to increase to $100 per share
by the year 2000.
AMERICAN EXPRESS COMPANY (AXP - $44.375 - 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 charge
card and travel-related services. Its other important operation is
Minneapolis-based American Express Financial Advisors, Inc. (formerly IDS
Financial Services) which sells financial products ranging from mutual funds
to annuities. Harvey Golub, Chairman and CEO, has refocused AXP on its core
charge card and investment management businesses. Shearson, Executive Life
and Bankers Life have been sold, while Lehman Brothers has been spun off.
Discussions regarding a possible sale of its international banking
subsidiary, American Express Bank, have been confirmed.
6
<PAGE>
We believe the company has been repositioned to enjoy double digit earnings
growth over the balance of this decade.
AT&T CORP. (T - $65.75 - NYSE), the world's second-largest telephone company,
is a global provider of telecommunications services. AT&T, selling at a
modest 7.5 times EBITDA, has announced that it will split into 3 separate
companies by spinning-off its equipment manufacturer and its computer
division. This will reposition the company to participate more dynamically
in the growth of the telecommunications industry. The strategy involves a
targeted approach to take advantage of a strong global franchise, including
its brand name, broader product offerings and an international customer base.
The restructuring represents an impressive commitment by management to
enhance shareholder values.
CHRIS-CRAFT INDUSTRIES, INC. (CCN - $43.50 - NYSE) is primarily a television
broadcaster through its 72% ownership of BHC Communications. BHC owns and
operates independent TV stations in Los Angeles (KCOP) and Portland (KPTV).
BHC also controls over 50% of United Television, Inc., which operates an NBC
affiliate, an ABC affiliate and three independent stations. BHC has entered
into a partnership agreement with Paramount Communications, Inc. to launch a
new fifth television network called United Paramount Television Network
(UPN). CCN, with about $1.5 billion in marketable securities and cash, is
strongly positioned to expand its operations. CCNis the eighth-largest
TVstation group owner in the U.S. and covers almost 20% of TV households.
Chris-Craft Industries
72%
BHC Communications
56%
United Television
GENERAL ELECTRIC COMPANY (GE - $63.75 - NYSE), having an equity market
valuation of $100 billion, is the largest U.S. company, and the third largest
industrial company in the world. Operating segments include aircraft
engines, appliances, broadcasting (NBC), industrial products, plastic
materials, power generating turbines and a hugely successful financial
services business. Under Jack Welch's prodding, GE has recorded a series of
impressive earnings gains.
GENERAL MOTORS CORPORATION (GM - $46.875 - NYSE), the world's largest auto
manufacturer, is materially undervalued. 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. GM was the only "Big Three" member to report a
gain in the second quarter. Peak earnings power exceeds $10 per share. A
reorganization of Ford and GM along the lines of ITT and AT&T becomes an
increasingly speculative possibility assuming the shares continue at current
levels.
LIN BROADCASTING CORPORATION (LINB - $129.375 - NASDAQ), which we have
recommended since 1969, 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 $129.91 per share in cash. The Fund holds
LIN to earn the difference between the current market price and the final
"take out" price. The acquisition was completed in October 1995.
SPRINT CORPORATION (FON - $35.00 - NYSE) is the third largest long-distance
carrier and the second largest independent local telephone company in the
U.S. The company has announced a spin-off of its
7
<PAGE>
cellular unit, which should take place in the first quarter of 1996. The
estimated trading value of the spin-off is $9 to $10 per FON share. After
the spin-off, the remaining long distance/local telco shares should trade
close to FON's current market price, indicating shareholders are getting the
cellular spin-off for "free". Sprint has positioned itself on a global basis
through a joint venture with France Telecom/Deutsche Telekom, which will
purchase a 20% stake in Sprint (excluding the cellular unit) for $3.5
billion. Our interest in Sprint stems from its promising national
cable/telephony and PCS/wireless joint venture with three major cable
operators: Tele-Communications, Inc., Comcast and Cox. We consider FON an
interesting value with the risks associated with new entrants in the long
distance business offset by the cable/telephony venture.
TIME WARNER INC. (TWX - $39.75 - NYSE), in a bold and brilliant tactic, is
acquiring Turner Broadcasting System Inc. for $7.5 billion. The acquisition
will make TWX the largest diversified media and publishing company in the
world and will add a wealth of programming to a company already rich in
entertainment content. Time Warner is restructuring into two general areas:
copyright and creativity, which includes publishing, music and filmed
entertainment, and distribution, which is mostly cable. Under the aegis of
Gerald M. Levin, investors can expect significant returns over the rest of
the decade.
VIACOM INC. (VIA - $49.75 - ASE; VIA'B - $49.75 - ASE), long a major provider
of entertainment "content", 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 to reduce debt and focusing on the global expansion of its
media franchises. Viacom is well-positioned in music (notably MTV) and cable
networks such as Nickelodeon, USA (50% interest) and the Sci-Fi Channel.
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 checkwriting 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-GA
BELLI (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.
IN CONCLUSION
The kind of broadly rising market we have experienced in the
first three quarters of 1995 has been a tide lifting almost all boats. As is
evidenced by the terrific returns delivered by index funds in every
capitalization sector of the market, one has not needed to be an astute stock
picker to have made very good money.
8
<PAGE>
Going forward, we doubt the market will be as kind to indexers
and other non-selective investors. There are pockets of value which offer
good investment opportunity in a less robust market and places of refuge
should the market tide turn. We believe our focus on value will help us to
move forward even in a less generous, broad market environment.
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.
Thank you for your appreciation of our efforts to preserve and
enhance the assets you have entrusted to us.
Sincerely,
/s/ MARIO J. GABELLI
MARIO J. GABELLI, CFA
Portfolio Manager and
Chief Investment Officer
October 16, 1995
_______________________________________________________________________________
TOP TEN HOLDINGS
SEPTEMBER 30, 1995
------------------
<TABLE>
<S> <C>
Time Warner Inc. General Motors Corporation
American Express Company Viacom Inc.
LIN Broadcasting Corporation Chris-Craft Industries, Inc.
AT&T Corp. General Electric Company
American Brands, Inc. Sprint Corporation
</TABLE>
_______________________________________________________________________________
9
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
COMMON STOCKS -- 94.0%
AGRICULTURE -- 0.0%
25,750 Archer Daniels Midland Co. ..... $ 395,906
--------------
AIRLINES -- 0.8%
125,000 AMR Corporation +............... 9,015,625
--------------
AUTOMOTIVE -- 1.5%
350,000 General Motors Corporation...... 16,406,250
24,000 Harley Davidson, Inc. .......... 585,000
--------------
16,991,250
--------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 5.0%
33,500 APS Holding Corporation, Class
A +........................... 812,375
30,000 Borg-Warner Automotive, Inc. ... 960,000
330,000 Echlin Inc. .................... 11,797,500
150,000 Federal-Mogul Corporation....... 2,868,750
675,000 GenCorp Inc. ................... 7,171,875
270,000 Genuine Parts Company........... 10,833,750
201,200 Handy & Harman.................. 3,018,000
110,000 Johnson Controls, Inc. ......... 6,957,500
135,000 Modine Manufacturing Company.... 3,847,500
39,875 Myers Industries, Inc. +........ 608,094
25,000 Pep Boys -- Manny, Moe & Jack... 678,125
170,000 Quaker State Corporation........ 2,486,250
50,000 Republic Automotive Parts,
Inc. +........................ 721,875
115,000 Standard Motor Products,
Inc. ......................... 2,185,000
13,200 Superior Industries
International, Inc. .......... 354,750
46,000 UAP Inc., Class A............... 556,196
34,000 Wynn's International, Inc. ..... 926,500
--------------
56,784,040
--------------
AVIATION: PARTS AND SERVICES -- 1.2%
65,000 Boeing Co. ..................... 4,436,250
100,000 Curtiss-Wright Corporation...... 4,425,000
90,000 General Motors Corporation,
Class H....................... 3,690,000
70,000 Hi-Shear Industries Inc. +...... 507,500
21,000 Hudson General Corporation...... 504,000
--------------
13,562,750
--------------
BROADCASTING -- 6.0%
70,100 BHC Communications, Inc., Class
A +........................... 6,361,575
90,000 Capital Cities/ABC, Inc. ....... 10,586,250
65,195 CBS Inc. ....................... 5,207,451
385,637 Chris-Craft Industries, Inc. ... 16,775,209
63,651 Chris-Craft Industries, Inc.,
Class B(a).................... 2,768,819
90,000 Citicasters Inc. +.............. 3,003,750
206,000 Grupo Televisa S.A., GDR........ 4,120,000
130,000 Havas, Sponsored ADR............ 2,429,375
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
66,000 Liberty Corporation............. $ 2,145,000
53,000 LIN Television Corporation +.... 1,643,000
20,000 Osborn Communications
Corporation +................. 195,000
46,000 Outlet Communications, Inc.,
Class A +..................... 2,127,500
400,000 Television Broadcasting Ltd.
ORD........................... 1,608,961
100,000 United Television, Inc. ........ 8,925,000
--------------
67,896,890
--------------
BUSINESS SERVICES -- 1.6%
50,000 Berlitz International, Inc.,
New +......................... 743,750
75,000 Honeywell, Inc. ................ 3,215,625
120,000 International Business Machines
Corporation................... 11,325,000
72,000 Landauer, Inc. ................. 1,368,000
70,000 Nashua Corporation.............. 1,076,250
--------------
17,728,625
--------------
CABLE -- 5.4%
60,000 BET Holdings, Inc., Class A +... 1,200,000
25,000 Cablevision Systems Corporation,
Class A +..................... 1,490,625
60,000 Comcast Corporation, Class A.... 1,192,500
30,000 Comcast Corporation, Class A
Special....................... 600,000
148 International CableTel
Incorporated +................ 4,144
260,000 International Family
Entertainment, Inc., Class
B +........................... 4,940,000
380,000 Media General, Inc., Class A.... 13,585,000
340,000 Multimedia, Inc., New +......... 14,790,000
20,000 Shaw Cable Systems Ltd., Class
B, Conv. ..................... 107,891
40,000 Shaw Communications Inc., Class
B, Conv. ..................... 215,782
830,000 Tele-Communications, Inc.,
Class A +..................... 14,525,000
265,000 Tele-Communications,
Inc./Liberty Media Group,
Class A....................... 7,088,750
60,000 United International Holdings,
Inc., Class A +............... 1,110,000
--------------
60,849,692
--------------
CLOSED-END FUNDS -- 0.1%
59,972 Royce Value Trust, Inc. ........ 809,622
--------------
CONSUMER PRODUCTS -- 9.9%
550,000 American Brands, Inc. .......... 23,237,500
100,000 Brunswick Corporation........... 2,025,000
400,000 Carter-Wallace, Inc. ........... 5,000,000
</TABLE>
10
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
CONSUMER PRODUCTS (CONTINUED)
180,000 Church & Dwight Co., Inc. ...... $ 3,915,000
4,500 Culbro Corporation +............ 181,125
22,000 Duracell International Inc. .... 987,250
100,000 Eastman Kodak Company........... 5,925,000
150,000 Fieldcrest Cannon, Inc. +....... 3,281,250
43,000 First Brands Corporation........ 1,935,000
260,000 General Electric Company........ 16,575,000
53,000 Gillette Company................ 2,524,125
20,000 Libbey Inc. .................... 477,500
50,000 Outboard Marine Corp. .......... 1,075,000
5,000 Park-Ohio Industries, Inc. +.... 72,500
100,000 Philips Electronics N.V., New
York.......................... 4,875,000
115,000 Procter & Gamble Company........ 8,855,000
255,000 Ralston Purina Group............ 14,758,125
50,000 Scotts Company, Class A +....... 1,106,250
75,000 Syratech Corporation +.......... 1,537,500
130,000 Tambrands Inc. ................. 5,703,750
325,000 Whitman Corporation............. 6,703,125
--------------
110,750,000
--------------
CONSUMER SERVICES -- 0.4%
180,000 Rollins, Inc. .................. 4,410,000
--------------
DIVERSIFIED INDUSTRIAL -- 3.7%
10,000 Anixter International Inc. ..... 413,750
45,000 GATX Corporation................ 2,328,750
100,000 ITT Corporation................. 12,400,000
150,000 Katy Industries, Inc. .......... 1,425,000
6,500 Kyocera Corporation, ADR........ 1,089,562
375,000 Lamson & Sessions Co. +......... 2,343,750
100,000 Lawter International, Inc. ..... 1,125,000
150,000 Minnesota Mining and
Manufacturing Company......... 8,475,000
80,000 National Service Industries,
Inc. ......................... 2,340,000
60,000 Tenneco Inc. ................... 2,775,000
60,000 Thomas Industries Inc. ......... 1,207,500
200,000 Trinity Industries, Inc. ....... 6,200,000
--------------
42,123,312
--------------
ELECTRONICS -- 0.1%
2,000 Hitachi, Ltd., ADR.............. 220,250
10,000 Sony Corporation................ 530,000
--------------
750,250
--------------
ENERGY -- 3.2%
55,000 Atlantic Richfield Company...... 5,905,625
35,000 British Petroleum Company plc,
ADR........................... 3,145,625
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
135,000 Burlington Resources Inc. ...... $ 5,231,250
30,000 Chevron Corporation............. 1,458,750
170,000 Eastern Enterprises............. 5,461,250
60,000 Enron Oil & Gas Company......... 1,305,000
110,000 Exxon Corporation............... 7,947,500
20,000 Halliburton Company............. 835,000
250,000 Kaneb Services, Inc. +.......... 625,000
50,000 PacifiCorp...................... 950,000
70,000 Southwest Gas Corporation....... 1,093,750
30,000 Texaco Inc. .................... 1,938,750
--------------
35,897,500
--------------
ENTERTAINMENT -- 5.2%
55,000 Bay Meadows Operating Company... 886,875
171,675 Gaylord Entertainment Company,
Class A....................... 4,656,684
66,500 GC Companies, Inc. +............ 2,136,313
40,000 GTECH Holdings Corporation +.... 1,205,000
20,000 PolyGram NV..................... 1,305,000
20,000 Santa Anita Realty Enterprises,
Inc. ......................... 270,000
110,000 THORN EMI plc, Sponsored ADR.... 2,598,750
700,000 Time Warner Inc. ............... 27,825,000
11,528 Todd-AO Corporation, Class A.... 95,106
120,000 Viacom Inc., Class A +.......... 5,970,000
225,000 Viacom Inc., Class B +.......... 11,193,750
--------------
58,142,478
--------------
FINANCIAL SERVICES -- 5.5%
1 Al-Zar Ltd. +(a)................ 350
640,000 American Express Company........ 28,400,000
220 Berkshire Hathaway Inc. +....... 6,468,000
35,000 Commerzbank AG, Sponsored ADR... 1,601,250
140,000 Deutsche Bank AG, Sponsored
ADR........................... 6,720,000
15,000 Financial Security Assurance
Holdings Ltd. ................ 380,625
55,000 H&R Block Inc. ................. 2,090,000
320,000 Lehman Brothers Holdings
Inc. ......................... 7,400,000
83,000 Midland Company................. 3,859,500
70,000 Salomon Inc. ................... 2,677,500
25,000 State Street Boston
Corporation................... 1,000,000
10,000 SunTrust Banks, Inc. ........... 661,250
11,941 Transamerica Corporation........ 850,796
8,000 Value Line, Inc. ............... 264,000
--------------
62,373,271
--------------
FOOD AND BEVERAGE -- 5.9%
57,000 Brown-Forman Corporation,
Class A....................... 2,201,625
60,000 Campbell Soup Company........... 3,015,000
</TABLE>
11
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE (CONTINUED)
74,263 Chock Full o'Nuts Corporation... $ 445,578
23,000 Coca-Cola Company............... 1,587,000
70,000 Coca-Cola Enterprises Inc. ..... 1,723,750
17,000 CPC International Inc. ......... 1,122,000
47,000 Delchamps, Inc. ................ 869,500
100,000 Dole Food Company, Inc. ........ 3,462,500
2,500 Farmer Brothers Company......... 325,000
62,500 General Mills, Inc. ............ 3,484,375
25,000 Heinz Company (H.J.)............ 1,143,750
35,000 Hershey Foods Corporation....... 2,253,125
84,000 Kellogg Company................. 6,079,500
12,000 LVHM Moet Hennessy Louis
Vuitton, Sponsored ADR........ 453,000
270,000 PepsiCo, Inc. .................. 13,770,000
170,000 Quaker Oats Company............. 5,631,250
68,000 Ralcorp Holdings, Inc. +........ 1,606,500
280,000 Seagram Company Ltd. ........... 10,045,000
35,000 Tootsie Roll Industries,
Inc. ......................... 1,395,625
105,000 Wrigley (Wm.) Jr. Company....... 5,302,500
--------------
65,916,578
--------------
HEALTH CARE -- 2.8%
15,000 Amgen Inc. +.................... 748,125
10,000 Biogen, Inc. +.................. 600,000
20,000 BioWhittaker, Inc. +............ 155,000
12,000 Chiron Corporation +............ 1,086,000
100,000 Genentech, Inc. +............... 4,862,500
140,000 Johnson & Johnson............... 10,377,500
70,000 Mallinckrodt Group, Inc. ....... 2,773,750
99,999 Merck & Co., Inc. .............. 5,599,944
100,000 Pfizer Inc. .................... 5,337,500
--------------
31,540,319
--------------
HOTELS/CASINOS -- 1.6%
23,500 Harrah's Entertainment Inc. .... 687,375
200,000 Hilton Hotels Corporation....... 12,775,000
200,000 Ladbroke Group plc.............. 530,914
110,000 Mirage Resorts,
Incorporated +................ 3,616,250
11,750 Promus Companies................ 267,313
--------------
17,876,852
--------------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 11.9%
342,000 AMETEK, Inc. ................... 5,856,750
50,000 AMP Incorporated................ 1,925,000
25,000 Amphenol Corporation, Class
A +........................... 540,625
265,000 AptarGroup, Inc. ............... 8,778,125
64,000 Caterpillar Inc. ............... 3,640,000
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
65,000 CLARCOR Inc. ................... $ 1,527,500
150,000 Crane Co. ...................... 5,175,000
100,000 CTS Corporation................. 3,100,000
145,000 Deere & Company................. 11,799,375
265,000 Donaldson Company, Inc. ........ 6,525,625
150,000 Gerber Scientific, Inc. ........ 2,681,250
140,000 Greif Bros. Corporation, Class
A............................. 3,447,500
120,000 Guardsman Products, Inc. ....... 1,590,000
12,546 Hach Company.................... 191,327
378,000 IDEX Corporation................ 13,513,500
20,000 Ingersoll-Rand Company.......... 750,000
200,000 Kollmorgen Corporation.......... 2,125,000
100,000 Lufkin Industries, Inc. ........ 2,350,000
60,000 Manitowoc Company, Inc. ........ 1,777,500
275,000 Mark IV Industries, Inc. ....... 6,118,750
275,000 Navistar International
Corporation +................. 3,300,000
165,000 Nortek, Inc. +.................. 1,443,750
4,333 Nortek, Inc., Special
Common +(a)................... 37,914
10,000 PACCAR Inc. .................... 467,500
74,000 Pittway Corporation............. 4,588,000
195,000 Pittway Corporation, Class A.... 12,138,750
45,000 Sequa Corporation, Class A +.... 1,203,750
80,000 Sequa Corporation, Class B +.... 2,585,000
80,000 SPS Technologies, Inc. +........ 3,120,000
144,000 St. Joe Paper Company........... 9,162,000
20,000 Valmont Industries, Inc. ....... 485,000
260,000 Varity Corporation, New +....... 11,570,000
--------------
133,514,491
--------------
METALS AND MINING -- 0.7%
34,350 Barrick Gold Corporation........ 888,806
60,000 Echo Bay Mines Ltd. ............ 652,500
35,000 Homestake Mining Company........ 595,000
100,000 Horsham Corporation............. 1,312,500
28,000 Newmont Gold Company............ 1,134,000
150,000 Pegasus Gold Inc. +............. 2,043,750
17,500 Placer Dome Inc. ............... 459,375
150,000 Royal Oak Mines Inc. +.......... 646,875
--------------
7,732,806
--------------
PUBLISHING -- 1.9%
75,000 American Media Inc. ............ 431,250
6,000 Central Newspapers, Inc. ....... 183,000
5,000 E.W. Scripps Company, Class A... 173,125
32,000 McClatchy Newspapers, Inc.,
Class A....................... 700,000
80,000 McGraw-Hill Companies, Inc. .... 6,540,000
</TABLE>
12
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PUBLISHING (CONTINUED)
10,000 Meredith Corporation............ $ 397,500
159,993 New York Times Company, Class
A............................. 4,379,808
15,000 News Corporation Limited, ADS... 330,000
84,000 Reader's Digest Association,
Inc., Class B................. 3,633,000
325,000 Western Publishing Group,
Inc. +........................ 4,143,750
--------------
20,911,433
--------------
RETAIL -- 1.5%
20,000 Aaron Rents, Inc., Class A...... 361,250
13,000 Aaron Rents, Inc., Class B...... 230,750
150,000 Burlington Coat Factory
Warehouse Corporation +....... 1,987,500
125,000 Earl Scheib, Inc. +............. 781,250
50,000 Fingerhut Companies, Inc. ...... 806,250
14,232 Jostens, Inc. .................. 334,452
18,000 Lillian Vernon Corporation...... 240,750
675,000 Neiman Marcus Group, Inc. ...... 12,150,000
--------------
16,892,202
--------------
RETAIL: FOOD AND DRUG -- 0.6%
30,000 Albertson's, Inc. .............. 1,023,750
129,000 American Stores Company......... 3,660,375
50,000 Kroger Co. +.................... 1,706,250
--------------
6,390,375
--------------
SPECIALTY CHEMICAL -- 0.9%
50,000 E.I. du Pont de Nemours and
Company....................... 3,437,500
210,000 Ferro Corporation............... 5,223,750
45,000 Pratt & Lambert, Inc. .......... 1,051,875
--------------
9,713,125
--------------
TELECOMMUNICATIONS -- 10.9%
383,000 AT&T Corp. ..................... 25,182,250
30,000 BC TELECOM Inc. ................ 524,573
335,000 BCE Inc. ....................... 11,180,625
12,500 BellSouth Corporation........... 914,063
9,000 British Telecommunications plc,
Sponsored ADR................. 563,625
60,000 Cable & Wireless plc, Sponsored
ADR........................... 1,177,500
354,000 C-TEC Corporation +............. 8,230,500
44,000 C-TEC Corporation, Class B +.... 1,034,000
70,000 Frontier Corporation............ 1,863,750
40,000 Globalstar
Telecommunications +.......... 855,000
318,000 GTE Corporation................. 12,481,500
35,000 Hong Kong Telecommunications
Ltd., Sponsored ADR........... 638,750
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
70,000 KPN ADR Koninklijke PTT
Nederland (KPN)............... $ 2,467,500
130,000 Lincoln Telecommunications
Company....................... 2,437,500
60,000 Motorola, Inc. ................. 4,582,500
25,000 Northern Telecom Limited........ 890,625
65,000 NYNEX Corporation............... 3,103,750
50,000 Pacific Telesis Group Inc. ..... 1,537,500
100,000 SBC Communications Inc. ........ 5,500,000
28,000 Southern New England
Telecommunications
Corporation................... 990,500
425,000 Sprint Corporation.............. 14,875,000
250,000 STET - Societa Finanziaria
Telefonica SpA, Sponsored
ADR........................... 7,718,750
70,000 TELECOM Inc. ................... 1,224,004
1,500,000 Telecom Italia SpA, ORD......... 2,479,070
112,153 Telecomunicacoes Brasileiras SA
(Telebras), Sponsored ADR..... 5,299,229
1,521,945 Telecomunicacoes de Sao Paulo SA
(Telesp) +.................... 249,598
16,000 Telefonica de Espana, Sponsored
ADR........................... 662,000
20,000 Telefonos De Mexico SA,
Sponsored ADR................. 635,000
60,000 US WEST, Inc. .................. 2,827,500
--------------
122,126,162
--------------
TRANSPORTATION -- 0.1%
13,500 Florida East Coast Industries,
Inc. ......................... 968,625
--------------
WIRELESS COMMUNICATIONS -- 5.6%
250,000 AirTouch Communications
Inc. +........................ 7,656,250
130,000 Allen Group Inc. ............... 4,680,000
18,500 Associated Group, Inc., Class
A +........................... 383,875
18,500 Associated Group, Inc., Class
B +........................... 383,875
667 Cellular Communications, Inc.,
Series A +.................... 36,352
260,000 Century Telephone Enterprises,
Inc. ......................... 7,897,500
140,000 COMSAT Corporation, Series 1.... 3,150,000
214,000 LIN Broadcasting Corporation.... 27,686,250
80,000 NEXTEL Communications, Inc.,
Class A +..................... 1,350,000
2,500,000 Telecom Italia Mobile SpA....... 4,170,542
140,000 Telephone and Data Systems,
Inc. ......................... 5,880,000
--------------
63,274,644
--------------
TOTAL COMMON STOCKS............................ 1,055,338,823
--------------
</TABLE>
13
<PAGE>
THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(C)
- ------------ --------------
<C> <S> <C>
PREFERRED STOCKS -- 0.4%
CONSUMER PRODUCTS -- 0.2%
45,000 Fieldcrest Cannon, Inc., 6.00%,
Series A, Conv. Pfd.,
144A(d)....................... $ 2,272,500
2,000 Kerr Group, Inc., Cumulative
Conv. Pfd., Class B, Series D,
$1.70......................... 39,875
--------------
2,312,375
--------------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 0.1%
20,000 Sequa Corporation, Cumulative
Conv. Pfd., $5.00............. 1,240,000
--------------
METALS AND MINING -- 0.0%
10,000 Freeport-McMoRan Inc.,
Cumulative Conv. Pfd.,
Depository Shares, 7.00%...... 257,500
--------------
TELECOMMUNICATIONS -- 0.1%
33,000 Sprint Corporation, 8.25%, Conv.
Pfd. ......................... 1,175,625
--------------
TOTAL PREFERRED STOCKS......................... 4,985,500
--------------
COMMON STOCK WARRANTS AND RIGHTS -- 0.0%
CLOSED-END FUNDS -- 0.0%
59,972 Royce Value Trust, Inc., Rights,
expires 11/03/1995 +.......... 0
--------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
CORPORATE BONDS -- 1.9%
AUTOMOTIVE PARTS AND ACCESSORIES -- 0.0%
$ 400,000 GenCorp Inc., Conv. Sub. Deb.,
8.00% due 08/01/2002.......... 397,000
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE(C)
- ------------ --------------
<C> <S> <C>
BROADCASTING -- 0.0%
FRF 593,750 Havas, Conv. Bond,
Payment-in-kind, 3.00% due
12/31/1997.................... $ 143,624
--------------
ENTERTAINMENT -- 1.9%
$17,545,950 Time Warner Inc., Conv. Sub.
Deb., 8.75% due 01/10/2015.... 18,379,383
2,750,000 Viacom Inc., Ex. Sub. Deb.,
8.00% due 07/07/2006.......... 2,712,187
--------------
21,091,570
--------------
TOTAL CORPORATE BONDS.......................... 21,632,194
--------------
U.S. TREASURY BILLS -- 3.5%
39,960,000 5.27% to 6.00% ++ due
10/19/1995 - 03/07/1996....... 39,410,289
--------------
TOTAL INVESTMENTS
(COST $795,804,005)(B).............. 99.8% 1,121,366,806
OTHER ASSETS AND LIABILITIES (NET).... 0.2 2,079,847
---- --------------
NET ASSETS APPLICABLE TO 41,983,410
SHARES OF BENEFICIAL INTEREST
OUTSTANDING......................... 100.0% $1,123,446,653
===== ==============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE.......... $ 26.76
==============
</TABLE>
- ---------------
(a) Security fair valued by the Board of Trustees.
(b) Aggregate cost for Federal tax purposes was $796,406,317. Net unrealized
appreciation for Federal tax purposes was $324,960,489 (gross unrealized
appreciation was $334,706,920 and gross unrealized depreciation was
$9,746,431).
(c) Securities traded on a national securities exchange are valued at the last
sale price as of the close of business on the day the securities are being
valued. Securities for which no sale was reported on that day and
over-the-counter securities are valued at the mean between the last reported
bid and asked prices. U.S. Government obligations and other debt instruments
with 60 days or less to maturity are valued at amortized cost which
approximates market value. Short-term investments with greater than 60 days
to maturity are valued at the highest independent bid price as quoted by
market makers.
(d) 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.
<TABLE>
<S> <C>
ADR -- American Depositary Receipt
ADS -- American Depositary Share
FRF -- French Franc
GDR -- Global Depositary Receipt
ORD -- Ordinary Share
</TABLE>
14
<PAGE>
We would like to share with you the following article on the recent
dedication of the Gabelli School of Business at Roger Williams University in
Rhode Island. At Gabelli Funds, we recognize and appreciate the support that
our Chairman, Chief Investment Officer and Founder, Mario J. Gabelli,
provides for enhancing educational opportunities for students.
______________________________________________________________________________
PROVIDENCE JOURNAL-BULLETIN
______________________________________________________________________________
ROGER WILLIAMS
RENAMES SCHOOL
TO HONOR TRUSTEE
BRISTOL -- Roger Williams University's business school is getting a
new name: the Gabelli School of Business.
A dedication ceremony Tuesday, Oct. 17, will mark the renaming of the school
for Mario J. Gabelli, a Wall Street financial analyst and founder of Gabelli
Funds, Inc., in Rye, N.Y., who serves on the university's board of trustees.
Described by Roger Williams officials as a "strong supporter of the
university," Gabelli, of Greenwich Conn., was the principal speaker and a
recipient of an honorary doctor of business degree at the school's 1992
commencement.
The three story building that will soon carry Gabelli's name housed the
university library until 1992. It was then rededicated as the new home of the
School of Business after a $1 million renovation.
"The School of Business is honored to have the Mario Gabelli's name attached to
it because this man serves as an icon--an exemplary role model--to any
student seeking a career in business," said university President Anthony J.
Santoro.
Ralph Papitto, chairman of the board of trustees, said Gabelli's name and
prominence as "a topnotch money manager on Wall Street" would lend added
stature to the School of Business.
Gabelli, a graduate of Fordham University and the Columbia University
Graduate School of Business, began his Wall Street career in 1967
as an analyst.
He is now Chairman and Chief Investment Officer of Gabelli Funds, Inc.,
the holding company for GAMCO Investors, a money management firm,
and the Gabelli family of mutual funds. He is also Chairman and Chief
Executive Officer of the Lynch Corporation and a governor of the
American Stock Exchange.
______________________________________________________________________________
Reprinted with permission September 26, 1995
<PAGE>
THE GABELLI ASSET FUND
One Corporate Center
Rye, NY 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>
<S> <C>
BOARD OF TRUSTEES
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 The Lehigh Group, Inc.
Assurance
Holdings Ltd.
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.
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PHOTO OF MARIO GABELLI
THE
GABELLI
ASSET
FUND
THIRD QUARTER REPORT
SEPTEMBER 30, 1995
