GABELLI ASSET FUND, N-30D, 2000-08-29

GABELLI ASSET FUND
N-30D, 2000-08-29

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THE GABELLI ASSET FUND

SEMI-ANNUAL REPORT
JUNE 30, 2000

[Graphic of 4 stars omitted]

MORNINGSTAR RATED(TM) GABELLI ASSET FUND 4 STARS OVERALL AND
FOR THE THREE-YEAR PERIOD ENDED 06/30/00 AMONG 3642
DOMESTIC EQUITY FUNDS, AND FOR THE FIVE AND TEN-YEAR
PERIODS ENDED 06/30/00 AMONG 2328 AND 783 DOMESTIC EQUITY FUNDS, RESPECTIVELY.

TO OUR SHAREHOLDERS,

At the end of the first quarter of 2000, long-dormant value stocks were
finally attracting attention. The sharp technology stock correction, which began
in the second week of March, revived the antiquated notion that the severely
depressed stocks of high quality companies in out-of-favor industry groups might
be an attractive alternative to the richly priced technology stocks. This
all-but-forgotten concept gained credence as the previous drivers of the NASDAQ
continued to plummet in April. However, investors quickly lost interest in the
merits of value investing when technology stocks began rebounding in late May.
By the end of the second quarter, all eyes were once again focused on technology
stocks, leaving the rest of the market adrift. The Dow Jones Industrial Average
("DJIA") and Standard & Poor's 500 Index materially outperformed the NASDAQ
Composite Index during the second quarter, but momentum had clearly shifted back
to technology stocks at its close.

While public market speculators remain ambivalent about fundamentally
inexpensive, high quality companies in more prosaic businesses, the true
connoisseurs of value--corporate acquirers and leveraged buy out groups--are
aggressively taking advantage of all the attractive merchandise in the market's
discount bin. And, of course, value investors like us call this "our space".

INVESTMENT PERFORMANCE

For the second quarter ended June 30, 2000, The Gabelli Asset Fund's (the
"Fund") net asset value slipped 1.83%. The Standard & Poor's ("S&P") 500, Value
Line Composite and Russell 2000 Indices declined 2.66%, 0.41% and 3.78%,
respectively, over the same period. Each index is an unmanaged indicator of
stock market performance. The Fund was up 8.36% over the trailing twelve-month
period. The S&P 500, Value Line Composite and Russell 2000 Indices rose 7.24%,
1.47% and 14.32%, respectively, over the same twelve-month period.

--------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Morningstar proprietary
ratings reflect historical risk adjusted performance as of June 30, 2000 and are
subject to change every month. Morningstar ratings are calculated from a Fund's
three, five and ten-year average annual returns in excess of 90-day T-Bill
returns with appropriate fee adjustments and a risk factor that reflects fund
performance below 90-day T-Bill returns. The top 10% of the funds in a broad
asset class receive five stars, the next 22.5% receive four stars, the next 35%
receive three stars, the next 22.5% receive two stars and the bottom 10% receive
one star.
<PAGE>

INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Quarter
-----------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
2000: Net Asset Value....................... $40.93 $40.18 -- -- --
Total Return.......................... 0.2% (1.8)% -- -- --
------------------------------------------------------------------------------------------------------------
1999: Net Asset Value....................... $37.18 $41.38 $39.52 $40.84 $40.84
Total Return.......................... 4.8% 11.3% (4.5)% 15.3% 28.5%
------------------------------------------------------------------------------------------------------------
1998: Net Asset Value....................... $36.00 $36.41 $31.24 $35.47 $35.47
Total Return.......................... 13.0% 1.1% (14.2)% 18.2% 15.9%
------------------------------------------------------------------------------------------------------------
1997: Net Asset Value....................... $27.00 $31.45 $34.99 $31.85 $31.85
Total Return.......................... 2.2% 16.5% 11.3% 4.3% 38.1%
------------------------------------------------------------------------------------------------------------
1996: Net Asset Value....................... $27.44 $28.09 $27.92 $26.42 $26.42
Total Return.......................... 6.6% 2.4% (0.6)% 4.5% 13.4%
------------------------------------------------------------------------------------------------------------
1995: Net Asset Value....................... $23.84 $25.10 $26.76 $25.75 $25.75
Total Return.......................... 7.3% 5.3% 6.6% 3.7% 24.9%
------------------------------------------------------------------------------------------------------------
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>

----------------------------------------------------------------
Average Annual Returns - June 30, 2000 (a)
------------------------------------------
1 Year ..................................... 8.36%
5 Year ..................................... 20.46%
10 Year .................................... 16.53%
Life of Fund (b) ........................... 17.22%
----------------------------------------------------------------

Dividend History
-------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
----------------- -------------- ------------------
December 27, 1999 $4.630 $39.92
December 28, 1998 $1.419 $34.60
December 30, 1997 $4.610 $31.73
December 31, 1996 $2.770 $26.42
December 29, 1995 $2.000 $25.75
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

(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 investment operations on March 3, 1986.
--------------------------------------------------------------------------------
2

<PAGE>

For the ten-year period ended June 30, 2000, the Fund's total return
averaged 16.53% annually versus average annual returns of 17.79%, 14.04% and
13.57% for the S&P 500, Value Line Composite and Russell 2000 Indices,
respectively. Since inception on March 3, 1986 through June 30, 2000, the Fund
had a cumulative total return of 875.52%, which equates to an average annual
total return of 17.22%.

[Graphic omitted]
[Pyramid text as follows:]
EPS
PMV
MANAGEMENT
CASHFLOW
RESEARCH

COMMENTARY

"WHAT, ME WORRY?"

The labor market remains tight and the threat of wage-driven inflation is
quite real. Despite six Federal Reserve interest rate hikes over the last
eighteen months, the economy is still growing at a pace that troubles the
monetary authorities. This is also an election year. While the campaign has been
a relatively quiet one, the rhetoric is sure to heat up as we approach November.
Political posturing on economic issues, principally how to re-allocate the
growing budget surplus, may rattle the financial markets. Finally, while there
are large pockets of attractive fundamental values in the equity markets, the
overall market, as measured by the S&P 500 Index, is still rather richly priced
relative to historic norms.

Of concern to us is the soaring trade deficit. Thus far, the world has
been happy to finance this deficit by buying U.S. stocks and bonds. This has
worked out well for all concerned. However, if we see inflation continue to
trend higher and if the U.S. financial markets sputter, international investors
may seek opportunities elsewhere. Reduced global demand for U.S. financial
assets may have a greater impact on stocks and bonds than the aforementioned
economic, political, and market issues. If international demand dries up, the
favorable supply/demand dynamics the U.S. financial markets have enjoyed over
the last decade may be disrupted. In addition, the Federal Reserve may have to
pump up interest rates even further, and at the wrong time, to defend the
dollar.

That is the dark side. The bright side is that we are finally seeing
evidence of economic deceleration. Housing starts and home sales are down
substantially, and with the exception of oil, commodity prices have stabilized.
The most recently released employment numbers were relatively benign and there
are indications that consumer confidence has been dented. For the time being,
the Federal Reserve has spared us an additional rate hike. We just may be
returning to a "Goldilocks" economy--not too hot, not too cool, but just
right--that will help propel stocks higher. We have labeled this rosy economic
scenario "Soft Landing Part II". Ideally, we will see a much broader market
advance in which companies in a wider range of industries participate.

A TUG OF WAR

For brief periods during the second quarter, market activity looked like a
tug-of-war between technology and value stocks. When the tech-heavy NASDAQ
Composite was down, the value-oriented Dow Jones was up, and vice-versa. This
raises the question of whether tech stocks must fall before stocks from value
sectors may rise, and if so, what economic and market phenomena may cause such a
reversal in fortune.

<PAGE>

Let's examine the economic hypothesis being used to glorify technology
stocks and relegate value stocks to investment purgatory. The NASDAQ Composite
and DJIA began to diverge at the end of the second quarter of 1999, when it
became clear the Federal Reserve was determined to raise short-term interest
rates until the economy slowed. Technology company earnings were thought to be
largely immune to higher interest rates and a slower economy--an argument that
had validity due to strong secular growth trends in many tech sectors. Earnings
for economically sensitive companies would trend lower as the economy
decelerated--also a reasonable assumption. Despite the Federal Reserve's best
efforts, the economy continued to barrel along and we saw solid earnings gains
across the industry group spectrum. Tech stocks were grandly rewarded for
meeting or exceeding earnings estimates, but better than expected earnings for
companies in other industries were largely ignored. At the close of this
reporting period, the NASDAQ Composite had a trailing price/earnings ("P/E")
multiple of 128.1, while the Dow Jones Industrials had a trailing P/E of 21.8.

P/Es are a function of earnings growth rates and interest rates. A company
growing earnings at 30% per year deserves a higher P/E than a company growing
earnings at 10% annually. However, P/Es are also a reflection of investor
sentiment. Presently, quality tech stocks are priced as if nothing can go wrong
and quality companies in other industries are priced as if nothing can go right.
This challenges economic reality.

Wall Street analysts are paid to look forward, but their forecasts are
generally strongly biased by the past. Over the last several years, leading
technology companies' earnings have beaten consensus projections. Analysts have
responded by raising the earnings bar, at least in part to justify soaring
valuations. If the economy slows, technology spending may moderate as well, and
tech companies' earnings may fall short of what we believe are overly optimistic
forecasts. High valuations leave little room for even modest earnings
disappointments. Just ask the folks at Qualcomm and Lucent Technologies.

As for the rest of the market, if the economy is slowing, earnings for
economically sensitive companies may have peaked, albeit a year later than many
anticipated. Cyclical stocks have received little tribute for better than
expected earnings. In fact, we believe that significantly lower earnings are
already baked into valuations. So, any pleasant surprises should generate
enthusiasm. Other industry groups such as food and drug stocks suffered more
from investor indifference than any present or potential earnings dislocations.
Media stocks, which stalled in 2000 after exceptionally strong performance in
1998-99, may recapture stock market interest as consolidation in the industry
accelerates. In the last year we have seen AOL combine with Time Warner, Viacom
acquire CBS, and the recently announced Vivendi/Canal Plus/Seagram merger. We
think there are many more deals, big and small, on the horizon as content and
distribution are linked to improve media companies' competitive positions on the
world stage. Telecommunications stocks have also taken a well-deserved rest this
year. However, the three forces driving the industry--technology, deregulation,
and consolidation--remain firmly in place.

We are investment realists. Technology is the pre-eminent growth industry
in the world and over the long term discriminating tech investors should receive
generous rewards. However, the current diet of nothing but super rich technology
stocks is dangerous. The addition of some high protein, low calorie items from
some other investment food groups will help promote healthier long-term results.

<PAGE>

DEALS...DEALS...AND MORE DEALS

A component of our investment methodology is to identify industry and
sector trends and themes ahead of the curve and position ourselves to take
advantage of these developments. Consolidation in a particular industry is one
such dynamic. As we have shared with you in previous quarterly letters, the
continued high level of activity in mergers and acquisitions contributed
significantly to the solid performance of our Asset Fund. The accompanying table
illustrates how deal activity surfaced value in a small sample of the portfolio
holdings.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
2000 COMPLETED DEALS

NUMBER AVERAGE COST CLOSING
FUND HOLDING OF SHARES (a) PER SHARE (b) PRICE (c) CLOSING DATE %RETURN (d)
------------ --------- --------- ----- ------------ -------
FIRST QUARTER 2000 ANNOUNCED DEALS
----------------------------------
<S> <C> <C> <C> <C> <C>
Associated Group Inc., Cl. A 85,000 $19.74 $87.88 01/17/00 345.19%
Associated Group Inc., Cl. B 40,000 5.84 88.06 01/17/00 1,407.88%
Pittway Corp. 291,000 7.42 45.50 02/04/00 513.21%
Pittway Corp., Cl. A 238,000 3.57 45.50 02/04/00 1,174.51%
Ascent Entertainment Group Inc. 230,000 9.63 15.25 03/28/00 58.36%

SECOND QUARTER 2000 ANNOUNCED DEALS
-----------------------------------
Atlantic Richfield Co. 100,000 53.69 77.00 04/17/00 43.42%
WICOR Inc. 200,000 28.93 31.50 04/26/00 8.88%
General Cigar Holdings Inc., Cl. A 251,000 11.33 15.25 05/09/00 34.60%
General Cigar Holdings Inc., Cl. B 93,356 9.83 15.25 05/09/00 55.14%
Celestial Seasonings Inc. 60,000 17.25 38.50 05/30/00 123.19%
Mirage Resorts Inc. 529,600 13.44 20.94 06/01/00 55.80%
Todd AO Corp., Cl. A 11,000 2.73 26.19 06/11/00 859.34%
Hussmann International Inc. 700,000 20.25 29.00 06/14/00 43.21%
Kollmorgen Corp. 200,000 9.31 23.00 06/15/00 147.05%
Wynn's International Inc. 90,000 12.67 22.88 07/21/00 80.58%

SECOND QUARTER 2000 FINANCIAL ENGINEERING
-----------------------------------------
General Motors Corp. 40,407 30.32 86.94 05/19/00 N/A
------------------------------------------------------------------------------------------------------------------
<FN>
(a) Number of shares held by the Fund on the final day of trading for the
issuer.
(b) Average purchase price of issuer's shares held by the Fund on the final
day of trading for the issuer.
(c) Closing price on the final day of trading for the issuer or the tender
price on the closing date of the tender offer.
(d) Represents average estimated return based on average cost per share and
closing price per share.
NOTE: SEE THE PORTFOLIO OF INVESTMENTS FOR A COMPLETE LISTING OF HOLDINGS.
</FN>
------------------------------------------------------------------------------------------------------------------
</TABLE>

INVESTMENT SCOREBOARD

This quarter, Pioneer Group and Wynn's International were boosted by
sizeable takeover premiums. Pioneer Group started the quarter at $23.25. On May
15, UniCredito Groupe agreed to purchase all of the outstanding shares of
Pioneer for $43.50 per share. Wynn's International began the quarter at $13.81,
and on June 13, Parker Hannifin announced that it would purchase all of Wynn's
outstanding shares at a price of $23.00 per share. Two deals that closed during
the quarter were also particularly

<PAGE>

beneficial to Fund performance. On June 13, we tendered all shares of Hussman
International in a deal with Ingersoll Rand that valued our Hussman shares at
$29.00 per share, an 82% premium to our average purchase price. Also, on June
14, we tendered our Kollmorgen shares in a deal with Danaher that valued our
Kollmorgen shares at $23.00 per share, a 100% premium to our average purchase
price.

Additionally, this quarter's Top Twenty list is distinguished by two other
portfolio companies -- Central Newspapers and Bestfoods -- that received
attractive bids from corporate acquirers. Harcourt General and Bush Boake Allen
both hired investment bankers to investigate restructuring options, including
the sale of their respective companies. While nothing has been announced, both
stocks appreciated more than 50%. Deals continue to be the value investor's best
friend.

Other holdings, including Block Drug, IVAX (which we sold), Johnson &
Johnson, and Pfizer also performed well. Food stocks, which we highlighted as
appetizing values in our first quarter report, nourished returns, with stocks
such as Tootsie Roll, Quaker Oats, Pepsi Bottling Group, PepsiCo, Keebler Foods
and H.J. Heinz posting double-digit gains. Aerospace component manufacturers SPS
Technologies and Precision Castparts were bolstered by recognition that earnings
growth prospects were improving with rising defense spending and a recovery in
commercial aircraft backlog.

Among our biggest winners in quarters past, wired and wireless
telecommunications stocks were the subject of profit taking this quarter. Almost
all of our telecommunications holdings declined, with Latin American operators
getting hit particularly hard. Cable television stocks (Cablevision and
Comcast), cable network holdings (Liberty Media Group), small group broadcasters
(Gray Communications, Granite Broadcasting), publishers (Media General and
McGraw-Hill) and media giant Time Warner also weakened. In the case of Granite,
the severity of the decline is directly traceable to management's blunder in a
transaction with NBC.

After a long run of superior performance, stocks in the telecommunications
and media sectors had become somewhat extended and were due for a breather. We
believe they are still long term bargains and expect both earnings growth trends
and ongoing consolidation to help them regain momentum. Going forward, quality
distribution (wired and wireless telecommunications systems and cable television
and broadcast networks) and information and entertainment content (publishers
and film and television production companies) will be among the world's most
prized assets.

THE NEXT BIG MEDIA DEAL

The partnering of Viacom/CBS, AOL/Time Warner, Vivendi/Canal Plus/Seagram,
and Liberty Media Group/UnitedGlobalCom show that media industry mergers
marrying content to distribution are accelerating. There are still plenty of
attractive singles looking to partner up and the band is not ready for a break.
The big multimedia wolves are there, with News Corp.'s Rupert Murdoch circling
the dance hall, Viacom's Sumner Redstone and Mel Karmazin positioned by the
punch bowl, and AOL/Time Warner's Steve Case and Gerald Levin and Liberty
Media's John Malone catching their breath by the bandstand. Look, there's
Chris-Craft's Herb Siegel snapping his fingers and looking like he's finally
ready to cut the rug with somebody. And off in the corner is NBC's Bob Wright
wondering if GE's Jack Welch will set him free to pursue another liaison. USA
Networks' Barry Diller is flirting with everyone while trying to decide on the
appropriate partner. The whole place is a flutter with the rumor that AT&T's
Michael Armstrong may be showing up later.

<PAGE>

CHEMICAL DEPENDENCE

Specialty chemicals companies are economically sensitive, but do not
generally experience the pricing pressure that could wipe out the earnings of
commodity chemical producers during economic downturns. That has not stopped
investors from dumping these stocks, which we feel are now among the most
attractive bargains in the stock market.

Recently, we have been adding a few names to the portfolio and increasing
our positions in existing specialty chemicals stock holdings. We believe
earnings will be better than expected and that the severely wounded specialty
chemicals stocks will attract a few predators. Lilly Industries, a specialty
coatings manufacturer, has just received a premium bid from Valspar. Putting a
comparable Private Market Value on portfolio holdings such as Ferro and H.B.
Fuller indicates exceptional value. Bush Boake Allen, Dexter, and Sybron
Chemicals, three of our specialty chemicals holdings, are up for sale. Great
Lakes Chemical may follow. So, we may soon have another test case of the real
world economic value of specialty chemicals companies.

LET'S TALK STOCKS

The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over
time.

CABLEVISION SYSTEMS CORP. (CVC - $67.875 - NYSE) is one of the nation's leading
communications and entertainment companies, with a portfolio of operations that
spans state-of-the-art, high-speed multimedia delivery, subscription cable
television services, championship professional sports teams and national cable
television networks. Headquartered in Bethpage, N.Y., Cablevision serves nearly
3 million cable customers in the most important cable TV market - New York.
Cablevision is a leader in delivering cutting-edge technological innovation,
such as high-speed cable, to the home. Through its Rainbow Media Holdings
subsidiary, which the company is in the process of spinning-off to shareholders,
Cablevision manages recognized content offerings such as American Movie
Classics, Bravo and The Independent Film Channel. Cablevision owns and operates
New York City's famed Madison Square Garden, which includes the arena complex,
the N.Y. Knicks, the N.Y. Rangers and the MSG network. Cablevision also operates
Radio City Entertainment and holds a long term lease for Radio City Music Hall,
home of the world-famous Rockettes.

CHRIS-CRAFT INDUSTRIES INC. (CCN - $66.0625 - NYSE), through its 80% ownership
of BHC Communications (BHC - $152.00 - AMEX), is primarily a television
broadcaster. BHC owns and operates UPN affiliated stations in New York (WWOR),
Los Angeles (KCOP) and Portland, Oregon (KPTV). BHC also owns 58% of United
Television (UTVI - $128.75 - NASDAQ), which operates an NBC affiliate, an ABC
affiliate and five UPN affiliates. Chris-Craft's television stations constitute
one of the nation's largest television station groups, reaching approximately
22% of U.S. households. Chris-Craft is a major beneficiary of the recent FCC
ruling allowing television duopoly, or ownership of two stations in a single
market. The Chris-Craft complex is debt free, with roughly $1.5 billion in cash
and marketable securities. On August 14, News Corp. (NWS - $54.50 - NYSE)
announced that it would purchase Chris-Craft (along with BHC and United
Television) in a deal worth $5.35 billion. According to the terms of the deal,
CCN shareholders will receive a package of cash and securities having an
"initial" stated value of $85 per share.

<PAGE>

FLOWSERVE CORP. (FLS - $15.0625 - NYSE) manufactures engineered pumps, automated
and manual valves, actuators and mechanical seals that provide a range of flow
management services. During the next quarter, Flowserve is expected to complete
the acquisition of Ingersoll-Dresser Pump from Ingersoll-Rand. The combined
company will be the largest pump company serving the petroleum, chemical and
power industries, and the second largest pump company overall. Of the estimated
$2.2 billion of pro-forma revenues, approximately 35% will come from the
petroleum industry, 20% chemical, 15% power, 7% water and 23% from the other
general industrial markets.

GREAT LAKES CHEMICAL CORP. (GLK - $31.50 - NYSE), based in Indianapolis,
Indiana, is a diversified specialty chemicals manufacturer. It is the market
leader in flame retardants and recreational water treatment chemicals. The
company generates strong cash flow, which management intends to use to grow its
fine chemicals business, make niche acquisitions, and buy back its own stock.

LIBERTY MEDIA GROUP (LMG'A - $24.25 - NYSE) is engaged in businesses which
provide programming services (including production, acquisition and distribution
through all media formats) as well as businesses engaged in electronic
retailing, direct marketing and other services. LMG holds interests in
globally-branded entertainment networks such as Discovery Channel, USA Network,
QVC, Encore and STARZ! Liberty's assets also include interests in international
video distribution businesses, international telephony and domestic wireless,
plant and equipment manufacturers, and other businesses related to broadband
services. Liberty Media Group Class A and Class B common stock are tracking
stocks of AT&T.

NAVISTAR INTERNATIONAL CORP. (NAV - $31.0625 - NYSE), with world headquarters in
Chicago, is a leading North American manufacturer and marketer of medium and
heavy trucks and school buses, and a worldwide leader in the manufacture of
mid-range diesel engines, produced in a range of 160 to 300 horsepower for the
International[REGRISTRATION MARK] brand. The company is also a private label
designer and manufacturer of diesel engines for the full-size pickup truck and
van markets. The company's products, parts and services are sold through a
network of 1,000 International[REGRISTRATION MARK] brand dealer outlets in the
United States, Canada, Brazil and Mexico, and through more than 90 separate
dealers in 75 countries. Navistar provides financing for its customers and
distributors principally through its wholly-owned subsidiary, Navistar Financial
Corporation.

PIONEER GROUP INC. (PIOG - $42.375 - NASDAQ) conducts its business through three
strategic units: Pioneer Investment Management, Pioneer International Financial
Services, and Pioneer Global Investments. Pioneer Investment Management includes
the U.S. registered mutual funds, the offshore funds registered in Ireland and
private institutional accounts. Pioneer International Financial Services
includes investment management and financial services operations in different
parts of the world. Pioneer Global Investments includes the company's
diversified strategic businesses of international venture capital management and
investing, real estate management and advisory services, and timber harvesting
and development. UniCredito Italiano SpA (UC.MI - $4.79 - Milan Stock Exchange)
has entered into a definitive agreement to acquire Pioneer Group for $43.50 per
share in a transaction valued at about $1.2 billion.

8
<PAGE>

SPS TECHNOLOGIES INC. (ST - $41.0625 - NYSE) is a multinational company engaged
in the design, manufacture and marketing of fasteners, specialty metals,
magnetic products, aerospace structures and precision tools. SPS sells directly
to original equipment manufacturers and industrial, commercial and governmental
users, and also sells through independent stocking distributors and dealers. The
Company is organized as seven business groups aggregated into three business
segments: Precision Fasteners and Components, Specialty Materials and Alloys,
and Magnetic Products. We believe earnings, after a lull, are set to rise due to
inventory adjustments at customers Boeing and Airbus. The company is ready for
accelerated growth. Skillfully guided by Charles Grigg, acquisitions will add
substantially. Our estimates for the next few years are promising.

TELECOM ITALIA SPA (TIT.MI - $13.72 - MILAN STOCK EXCHANGE; TI - $137.5625 -
NYSE) is the principal provider of domestic and international telecommunications
services in Italy. Telecom Italia is also the seventh largest fixed
telecommunications operator in Europe, as well as the largest mobile operator in
Europe, through its 60% held subsidiary, Telecom Italia Mobile. In addition,
Telecom Italia also provides leased lines, data communications services,
satellite communications services and the development and manufacture of
telecommunications equipment and networks.

TELEPHONE & DATA SYSTEMS INC. (TDS - $100.25 - AMEX) is a diversified
telecommunications service company with cellular telephone, local telephone and
personal communications services ("PCS") operations. TDS serves 3.7 million
customers in 35 states. TDS conducts the vast majority of its cellular
operations through its 81% owned United States Cellular Corp. (USM - $63.00 -
AMEX) and conducts its telephone operations through its wholly-owned TDS
Telecommunications Corp. ("TDS Telecom") subsidiary, a full-service local
exchange carrier. Having completed a merger of its 82%-owned PCS subsidiary
Aerial Communications with VoiceStream Wireless (VSTR - $116.2967 - NASDAQ), TDS
now owns 35.6 million shares of VSTR valued at over $5.0 billion.

TIME WARNER INC. (TWX - $76.00 - NYSE) is the global leader in media and
entertainment, with interests in filmed entertainment, television production and
broadcasting, recorded music, cable television programming, magazine and book
publishing, direct marketing and cable television systems. Time Warner controls
a host of powerful brands, such as Warner Brothers, CNN, HBO, Cinemax, Time and
People magazines. Under the terms of a definitive agreement approved by the
boards of both companies, Time Warner and America Online (AOL - $52.875 - NYSE)
have agreed to merge in an all-stock combination.

UNITED TELEVISION INC. (UTVI - $128.75 - NASDAQ), headquartered in Beverly
Hills, California, is a television broadcasting group which owns and operates
seven of the stations (one ABC, one NBC and five UPN affiliates) that comprise
Chris-Craft's (CCN - $66.0625 - NYSE) television division. UTVI stations cover
approximately nine percent of the U.S. population. UTVI is 58%-owned by BHC
Communications (BHC - $152.00 - AMEX). United Television is a beneficiary of the
recent FCC ruling allowing television duopoly, or ownership of two stations in a
single market. On August 14, News Corp. (NWS - $54.50 - NYSE) announced it would
purchase United Television (along with Chris-Craft and BHC) in a deal worth
$5.35 billion.

<PAGE>

USA NETWORKS INC. (USAI - $21.625 - NASDAQ), through its subsidiaries, engages
in diversified media and electronic commerce businesses that include electronic
retailing, ticketing operations and television broadcasting. Chairman and CEO
Barry Diller has brought together under one umbrella the USA Network, the Sci-Fi
Channel, USA Networks Studios, USA Broadcasting, The Home Shopping Network and
the Ticketmaster Group. The plan is to integrate these assets, leveraging
programming, production capabilities and electronic commerce across this strong
distribution platform.

VIACOM INC. (VIA'A - $68.375 - NYSE), long a major provider of entertainment
"content", has evolved into one of the world's dominant media companies.
Non-core assets are being divested and debt has been reduced to approximately $8
billion. Viacom is focusing on the global expansion of its media franchises.
Viacom is particularly well-positioned in music (notably MTV) and cable networks
(such as Nickelodeon). On May 3, Viacom closed the merger with CBS in a $49.6
billion transaction.

WHITMAN CORP. (WH - $12.375 - NYSE), through its principal operating company,
Pepsi-Cola General Bottlers Inc., manufactures, packages, sells and distributes
carbonated and non-carbonated Pepsi-Cola beverages as well as a variety of other
non-alcoholic beverages in the United States and Central Europe. Pepsi General
serves a significant portion of a ten state region, primarily in the Midwest,
with a population of approximately 35 million people. In addition, Pepsi General
serves territories in Poland, Hungary, the Czech Republic and the Republic of
Slovakia. Pepsi General's three largest brands in terms of volume are
Pepsi-Cola, Diet Pepsi and Mountain Dew.

WYNN'S INTERNATIONAL INC. (WN - $22.6875 - NYSE), founded in 1939, is a
worldwide supplier of automotive and industrial components and specialty
chemical products. The Automotive and Industrial Components Division includes
Wynn's-Precision Inc. and the Goshen Rubber Companies Inc. These two companies
are leaders in sealing products and technology, serving more than 1,000
customers in 14 industrial markets around the world. Robert Skeels & Company is
a regional wholesale distributor of builders' hardware products. The Specialty
Chemicals Division is comprised of Wynn Oil Company and its subsidiaries, a
worldwide manufacturer and marketer of specialty chemicals, equipment and
related programs for automotive and industrial markets in over 100 countries. On
June 13th, Parker Hannifin and Wynn's International entered into an agreement
for Parker to acquire Wynn's for $23.00 per share cash. The deal closed on July
21.

MINIMUM INITIAL INVESTMENT - $1,000

The Fund's minimum initial investment for regular accounts is $1,000.
There are no subsequent investment minimums. No initial minimum is required for
those establishing an Automatic Investment Plan. Additionally, the Fund and
other Gabelli Funds are available through the no-transaction fee programs at
many major brokerage firms.

WWW.GABELLI.COM

Please visit us on the Internet. Our homepage at http://www.gabelli.com
contains information about Gabelli Asset Management Inc., the Gabelli Mutual
Funds, IRAs, 401(k)s, quarterly reports, closing prices and other current news.
You can send us e-mail at [email protected].

<PAGE>

IN CONCLUSION

It has been a dull market for everything but technology stocks this
quarter. After a breathtaking nosedive that temporarily frightened investors
into more reasonably priced market sectors, technology stocks are once again
soaring and attracting almost all of investors' attention and resources. The
rest of the market remains earthbound.

Value honey is attracting bees. The takeover of portfolio companies,
announced plans for the potential sale of others, and investors' focus on other
potential industry group targets helped propel the Fund to a modest
outperformance of the market averages. We believe merger and acquisition
activity will continue to provide a performance tailwind for the portfolio even
in what may continue to be a lackluster market.

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
business day for further information.

Sincerely,

/S/ SIGNATURE

MARIO J. GABELLI, CFA
Portfolio Manager and
Chief Investment Officer

August 14, 2000

-------------------------------------------------------------------
TOP TEN HOLDINGS
JUNE 30, 2000
-------------
Liberty Media Group Chris-Craft Industries Inc.
Telephone & Data Systems Inc. USA Networks Inc.
Viacom Inc. United Television Inc.
Time Warner Inc. Telecom Italia SpA
Cablevision Systems Corp. Shared Medical Systems Corp.
-------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period stated in this report. The manager's views
are subject to change at any time based on market and other conditions.

<PAGE>

THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 91.1%
AEROSPACE -- 0.8%
150,000 Boeing Co. ................... $ 5,225,593 $ 6,271,875
130,000 Northrop Grumman Corp. ....... 7,909,248 8,612,500
----------- -----------
13,134,841 14,884,375
----------- -----------
AGRICULTURE -- 0.3%
20,000 Agribrands International Inc. 282,787 838,750
535,000 Archer-Daniels-Midland Co. ... 8,854,221 5,249,688
15,000 Delta & Pine Land Co. ........ 260,292 375,937
----------- -----------
9,397,300 6,464,375
----------- -----------
AUTOMOTIVE -- 0.5%
156,593 General Motors Corp. ......... 6,371,254 9,092,181
15,000 Volkswagen AG ................ 598,436 572,850
----------- -----------
6,969,690 9,665,031
----------- -----------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.5%
95,000 Arvin Industries Inc. ........ 3,435,968 1,650,625
38,000 Borg-Warner Automotive Inc. .. 1,415,034 1,334,750
235,000 Dana Corp. ................... 6,331,279 4,979,062
165,000 Federal-Mogul Corp. .......... 3,552,114 1,577,812
630,000 GenCorp Inc. ................. 2,243,331 5,040,000
500,000 Genuine Parts Co. ............ 12,420,884 10,000,000
128,000 Johnson Controls Inc. ........ 3,006,648 6,568,000
85,000 Midas Inc. ................... 1,158,943 1,700,000
300,000 Modine Manufacturing Co. ..... 7,040,244 8,100,000
202,500 Scheib (Earl) Inc.+ .......... 1,446,767 651,797
210,000 Standard Motor Products Inc. . 3,040,436 1,785,000
110,000 Superior Industries
International Inc. .......... 2,629,715 2,832,500
300,000 Tenneco Automotive Inc. ...... 2,884,344 1,575,000
100,000 TransPro Inc. ................ 788,321 506,250
90,000 Wynn's International Inc. .... 1,140,063 2,041,875
----------- -----------
52,534,091 50,342,671
----------- -----------
AVIATION: PARTS AND SERVICES -- 0.5%
60,000 Aviall Inc.+ ................. 672,400 296,250
181,000 Curtiss-Wright Corp. ......... 2,275,020 6,730,937
50,000 Fairchild Corp., Cl. A+ ...... 582,662 243,750
60,000 Hi-Shear Industries Inc. ..... 510,932 153,750
20,000 Kaman Corp., Cl. A ........... 252,138 213,750
65,000 Precision Castparts Corp. .... 2,367,415 2,941,250
----------- -----------
6,660,567 10,579,687
----------- -----------
BROADCASTING -- 5.2%
18,000 BHC Communications
Inc., Cl. A ................. 2,747,838 2,736,000
557,000 Chris-Craft Industries Inc.+ . 15,030,543 36,796,812
73,786 Chris-Craft Industries
Inc., Cl. B+ (a) ............ 1,132,430 4,874,488

MARKET
SHARES COST VALUE
------ ---- -----
23,333 Corus Entertainment
Inc., Cl. B+ ................ $ 77,526 $ 622,739
265,000 Granite Broadcasting Corp.+ .. 2,793,593 1,954,375
20,000 Gray Communications
Systems Inc. ................ 328,061 196,250
190,000 Gray Communications
Systems Inc., Cl. B ......... 2,451,225 1,852,500
125,000 Grupo Televisa SA, GDR+ ...... 2,553,443 8,617,187
170,000 Liberty Corp. ................ 6,268,553 7,140,000
120,000 Paxson Communications
Corp., Cl. A+ ............... 1,268,934 1,020,000
400,000 Television Broadcasting Ltd. 1,815,551 2,668,206
247,000 United Television Inc. ....... 15,808,923 31,801,250
60,000 Young Broadcasting
Inc., Cl. A+ ................ 1,625,071 1,541,250
----------- -----------
53,901,691 101,821,057
----------- -----------
BUILDING AND CONSTRUCTION -- 0.2%
80,111 Huttig Building Products Inc.+ 243,014 330,458
175,000 Nortek Inc.+ ................. 1,046,710 3,456,250
4,333 Nortek Inc., Special Common+ (a) 59,049 84,223
----------- -----------
1,348,773 3,870,931
----------- -----------
BUSINESS SERVICES -- 0.8%
60,000 Berlitz International Inc.+ .. 959,662 540,000
100,000 Burns International
Services Corp. .............. 1,664,738 1,250,000
209,962 Cendant Corp.+ ............... 4,368,597 2,939,468
105,000 Ecolab Inc. .................. 1,955,740 4,101,562
10,000 Imation Corp.+ ............... 203,344 293,750
66,500 Landauer Inc. ................ 412,455 1,034,906
135,000 Nashua Corp.+ ................ 2,035,126 1,113,750
100,000 Primark Corp. ................ 3,739,375 3,725,000
----------- -----------
15,339,037 14,998,436
----------- -----------
CABLE -- 2.6%
635,000 Cablevision Systems
Corp., Cl. A+ ............... 5,495,238 43,100,625
40,000 Comcast Corp., Cl. A ......... 286,651 1,555,000
40,000 Comcast Corp.,
Cl. A, Special .............. 306,462 1,620,000
164 NTL Inc.+ .................... 11,474 9,793
60,000 Shaw Communications
Inc., Cl. B ................. 164,952 1,479,730
80,000 Shaw Communications
Inc., Cl. B, Non-Voting+ .... 312,647 1,975,000
25,000 UnitedGlobalCom Inc., Cl. A+ . 369,741 1,168,750
----------- -----------
6,947,165 50,908,898
----------- -----------

See accompanying notes to financial statements.

<PAGE>

THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
CLOSED-END FUNDS -- 0.1%
84,000 Royce Value Trust Inc. ....... $ 949,972 $ 1,144,500
----------- -----------
COMMUNICATIONS EQUIPMENT -- 1.0%
305,000 Allen Telecom Inc.+ .......... 1,835,859 5,394,688
114,000 Motorola Inc. ................ 493,469 3,313,125
175,000 Nortel Networks Corp. ........ 9,810,958 11,943,750
----------- -----------
12,140,286 20,651,563
----------- -----------
COMPUTER HARDWARE -- 0.1%
55,000 Xerox Corp. .................. 1,282,125 1,141,250
----------- -----------
COMPUTER SOFTWARE AND SERVICES -- 0.1%
100,000 Genuity Inc.+ ................ 982,352 915,625
5,000 Global Sources Ltd.+ ......... 285,873 126,875
24,000 Internet.com Corp.+ .......... 319,750 472,500
----------- -----------
1,587,975 1,515,000
----------- -----------
CONSUMER PRODUCTS -- 3.7%
10,000 Avon Products Inc. ........... 248,000 445,000
675,000 Carter-Wallace Inc. .......... 10,782,924 13,584,375
2,750 Christian Dior SA ............ 307,335 623,571
260,000 Church & Dwight Co. Inc. ..... 2,639,987 4,680,000
70,000 Department 56 Inc.+ .......... 832,332 770,000
270,000 Energizer Holdings Inc.+ ..... 3,804,869 4,927,502
250,000 Fortune Brands Inc. .......... 6,095,712 5,765,625
330,000 Gallaher Group plc, ADR ...... 5,226,111 7,074,375
160,000 Gillette Co. ................. 4,051,786 5,590,000
80,000 Harley Davidson Inc. ......... 198,900 3,080,000
25,000 Maytag Corp. ................. 721,075 921,875
65,000 National Presto Industries Inc. 2,250,827 1,998,750
110,000 Philip Morris Companies Inc. . 4,485,376 2,921,875
20,000 Procter & Gamble Co. ......... 1,115,431 1,145,000
1,030,000 Ralston Purina Group ......... 14,349,449 20,535,625
41,000 Syratech Corp.+ .............. 939,276 322,875
----------- -----------
58,049,390 74,386,448
----------- -----------
CONSUMER SERVICES -- 0.3%
50,000 Ogden Corp. .................. 564,769 450,000
400,000 Rollins Inc. ................. 6,380,114 5,950,000
----------- -----------
6,944,883 6,400,000
----------- -----------
DIVERSIFIED INDUSTRIAL -- 2.7%
5,000 Anixter International Inc.+ .. 45,044 132,500
95,000 Cooper Industries Inc. ....... 3,384,963 3,093,437
260,000 Crane Co. .................... 2,898,182 6,321,250
80,000 Gardner Denver
Machinery Corp.+ ............ 1,165,075 1,430,000
205,000 GATX Corp. ................... 4,329,860 6,970,000
6,000 General Electric Co. ......... 49,373 318,000
150,000 GenTek Inc. .................. 1,515,183 1,678,125
270,000 Honeywell Inc. ............... 9,466,800 9,095,625

MARKET
SHARES COST VALUE
------ ---- -----
315,000 ITT Industries Inc.+ ......... $ 9,984,890 $ 9,568,125
150,000 Katy Industries Inc. ......... 1,369,925 1,762,500
360,000 Lamson & Sessions Co.+ ....... 1,950,533 5,512,500
100,000 Myers Industries Inc. ........ 874,522 1,075,000
125,000 National Service
Industries Inc. ............. 3,206,899 2,437,500
10,000 Pentair Inc. ................. 391,938 355,000
155,000 Thomas Industries Inc. ....... 1,971,325 2,741,562
15,000 TI Group plc ................. 96,816 80,800
80,000 Trinity Industries Inc. ...... 977,970 1,480,000
----------- -----------
43,679,298 54,051,924
----------- -----------
ELECTRONICS -- 1.4%
10,000 Advanced Micro
Devices Inc.+ ............... 189,875 772,500
3,000 Hitachi Ltd., ADR ............ 302,567 432,375
13,000 Kyocera Corp., ADR ........... 448,063 2,233,562
10,000 Molex Inc., Cl. A ............ 385,781 350,000
860,000 Oak Technology Inc.+ ......... 3,196,145 18,543,750
40,000 Sony Corp., ADR .............. 1,816,421 3,772,500
85,000 Thomas & Betts Corp. ......... 1,822,554 1,625,625
----------- -----------
8,161,406 27,730,312
----------- -----------
ENERGY AND UTILITIES -- 5.7%
140,000 AGL Resources Inc. ........... 2,479,425 2,231,250
500 Berkshire Energy
Resources ................... 12,938 18,687
234,000 BP Amoco plc, ADR ............ 6,146,816 13,235,625
38,000 Brown (Tom) Inc. ............. 613,895 876,375
30,000 Chevron Corp. ................ 1,016,500 2,544,375
180,000 Columbia Energy Group ........ 11,267,863 11,812,500
350,000 Conectiv Inc. ................ 5,837,366 5,446,875
50,000 Devon Energy Corp. ........... 1,160,594 2,809,375
39,998 DPL Inc. ..................... 814,440 877,456
35,000 E'Town Corp. ................. 2,261,875 2,325,312
175,000 Eastern Enterprises .......... 5,384,090 11,025,000
150,000 El Paso Electric Co.+ ........ 1,449,137 1,678,125
40,000 Energy East Corp. ............ 863,017 762,500
32,000 EnergyNorth Inc. ............. 1,839,244 1,896,000
60,000 EOG Resources Inc. ........... 548,976 2,010,000
115,000 Exxon Mobil Corp. ............ 3,419,492 9,027,500
100,000 Florida Progress Corp. ....... 4,698,010 4,687,500
25,000 Global Marine Inc.+ .......... 397,750 704,687
40,000 Halliburton Co. .............. 840,758 1,887,500
125,000 MCN Energy Group Inc. ........ 3,032,187 2,671,875
155,000 Niagara Mohawk Holdings Inc. . 2,169,875 2,160,312
100,000 Northeast Utilities .......... 2,148,569 2,175,000
50,000 Pennzoil-Quaker State Co.+ ... 750,966 603,125
11,100 SJW Corp. .................... 1,317,030 1,319,512
325,000 Southwest Gas Corp. .......... 5,939,311 5,687,500
150,000 Texaco Inc. .................. 6,592,375 7,987,500
4,000 United Illuminating Co. ...... 180,331 175,000

See accompanying notes to financial statements.

<PAGE>

THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES (CONTINUED)
180,000 United Water Resources Inc. .. $ 6,103,276 $ 6,277,500
100,000 Vastar Resources Inc. ........ 8,136,406 8,212,500
----------- -----------
87,422,512 113,126,466
----------- -----------
ENTERTAINMENT -- 14.4%
60,000 Disney (Walt) Co. ............ 1,533,474 2,328,750
19,406 EMI Group plc ................ 75,408 176,179
100,000 EMI Group plc, ADR ........... 1,246,297 1,856,030
24,000 Fisher Companies Inc. ........ 1,542,728 1,836,000
40,000 Fox Entertainment
Group Inc. .................. 888,538 1,215,000
185,000 GC Companies Inc.+ ........... 5,997,927 4,139,375
4,400 Liberty Livewire Corp., Cl. A 17,070 309,100
4,360,000 Liberty Media Group, Cl. A+ .. 11,623,325 105,730,000
31,800 Metro-Goldwyn-Mayer Inc.+ .... 811,690 830,775
300,000 Seagram Co. .................. 12,234,082 17,400,000
660,000 Time Warner Inc. ............. 9,782,925 50,160,000
1,725,000 USA Networks Inc.+ ........... 12,714,256 37,303,125
910,000 Viacom Inc., Cl. A+ .......... 20,807,438 62,221,250
----------- -----------
79,275,158 285,505,584
----------- -----------
ENVIRONMENTAL SERVICES -- 0.7%
75,000 EnviroSource Inc.+ ........... 191,662 35,156
280,000 Republic Services Inc.+ ...... 3,164,800 4,480,000
450,000 Waste Management Inc. ........ 8,859,584 8,550,000
----------- -----------
12,216,046 13,065,156
----------- -----------
EQUIPMENT AND SUPPLIES -- 6.0%
310,000 AMETEK Inc. .................. 3,617,532 5,425,000
60,000 Amphenol Corp., Cl. A+ ....... 819,850 3,971,250
72,000 Caterpillar Inc. ............. 955,514 2,439,000
100,000 CIRCOR International Inc.+ ... 834,293 818,750
120,000 CLARCOR Inc. ................. 1,670,981 2,385,000
100,000 CTS Corp. .................... 366,271 4,500,000
10,000 Danaher Corp. ................ 266,009 494,375
380,000 Deere & Co. .................. 5,919,815 14,060,000
240,000 Donaldson Co. Inc. ........... 1,767,021 4,740,000
60,000 Fedders Corp. ................ 333,471 348,750
500,000 Flowserve Corp. .............. 7,962,555 7,531,250
165,000 Gerber Scientific Inc. ....... 1,745,388 1,897,500
462,000 IDEX Corp. ................... 4,138,647 14,581,875
15,000 Ingersoll-Rand Co. ........... 467,479 603,750
90,000 Lufkin Industries Inc. ....... 1,619,261 1,428,750
18,000 Manitowoc Co. Inc. ........... 131,305 481,500
525,000 Mark IV Industries Inc. ...... 8,031,584 10,959,375
35,000 Met-Pro Corp. ................ 451,219 315,000
460,000 Navistar International Corp.+ 8,699,844 14,288,750
20,000 PACCAR Inc. .................. 522,021 793,750
95,000 Sequa Corp., Cl. A+ .......... 4,250,687 3,627,812

MARKET
SHARES COST VALUE
------ ---- -----
104,000 Sequa Corp., Cl. B+ .......... $ 5,351,790 $ 6,012,500
206,700 SPS Technologies Inc.+ ....... 3,853,060 8,487,619
330,000 UCAR International Inc.+ ..... 6,138,944 4,310,625
30,000 Valmont Industries Inc. ...... 242,908 596,250
310,000 Watts Industries Inc., Cl. A . 3,738,973 3,913,750
120,000 Weir Group plc ............... 504,947 337,724
----------- -----------
74,401,369 119,349,905
----------- -----------
FINANCIAL SERVICES -- 4.9%
28,000 Aegon NV, ADR ................ 476,457 997,500
1 Al-Zar Ltd.+ (a) ............. 0 350
7,000 Alleghany Corp. .............. 1,271,871 1,176,000
130,000 Allstate Corp. ............... 3,273,410 2,892,500
200,000 American Express Co. ......... 1,516,277 10,425,000
60,000 Argonaut Group Inc. .......... 1,638,206 1,027,500
68,000 Bank One Corp. ............... 1,948,065 1,806,250
220 Berkshire Hathaway
Inc., Cl. A+ ................ 874,549 11,836,000
160,000 Block (H&R) Inc. ............. 5,430,584 5,180,000
120,000 Commerzbank AG, ADR .......... 3,146,569 4,230,000
150,000 Deutsche Bank AG, ADR ........ 6,596,875 12,375,000
30,000 Dresdner Bank AG, ADR ........ 1,470,925 1,234,492
190,000 First Union Corp. ............ 6,417,094 4,714,375
110,000 Lehman Brothers Holdings Inc. 1,985,485 10,401,875
35,000 Leucadia National Corp. ...... 889,499 798,437
100,000 Mellon Financial Corp. ....... 3,432,807 3,643,750
47,751 Metris Companies Inc. ........ 438,360 1,199,744
247,000 Midland Co. .................. 2,611,596 6,051,500
2,000 MONY Group Inc. .............. 57,225 67,625
60,000 Paine Webber Group Inc. ...... 1,796,576 2,730,000
50,000 Pioneer Group Inc.+ .......... 785,250 2,118,750
55,000 ReliaStar Financial Corp. .... 2,829,469 2,884,062
80,000 St. Paul Companies Inc. ...... 2,444,758 2,730,000
43,000 State Street Corp. ........... 638,075 4,560,687
20,000 SunTrust Banks Inc. .......... 424,879 913,750
8,000 Value Line Inc. .............. 115,500 308,000
38,000 Waddell & Reed Financial
Inc., Cl. A ................. 590,838 1,246,875
----------- -----------
53,101,199 97,550,022
----------- -----------
FOOD AND BEVERAGE -- 7.2%
300,000 Bestfoods Inc. ............... 16,269,552 20,775,000
215,000 Brown-Forman Corp., Cl. A .... 9,647,045 11,341,250
45,000 Coca-Cola Co. ................ 387,203 2,584,687
250,000 Corn Products
International Inc. .......... 6,526,254 6,625,000
250,000 Diageo plc, ADR .............. 9,377,520 8,890,625
7,500 Farmer Brothers Co. .......... 983,619 1,312,500
370,000 General Mills Inc. ........... 9,439,458 14,152,500
70,000 Hain Celestial Group Inc.+ ... 953,399 2,568,125
85,000 Heinz (H.J.) Co. ............. 3,459,757 3,718,750

See accompanying notes to financial statements.

<PAGE>

MARKET
SHARES COST VALUE
------ ---- -----
100,000 Mandalay Resort Group ........ $ 1,626,501 $ 2,000,000
220,000 Park Place
Entertainment Corp.+ ........ 1,231,329 2,681,250
240,000 Starwood Hotels & Resorts
Worldwide Inc. .............. 6,457,118 7,815,000
60,000 Trump Hotels & Casino
Resorts Inc.+ ............... 256,680 168,750
----------- -----------
32,121,362 32,579,123
----------- -----------
METALS AND MINING -- 0.4%
154,000 Alcoa Inc. ................... 4,342,547 4,466,000
30,000 Barrick Gold Corp. ........... 606,857 545,625
250,000 Echo Bay Mines Ltd.+ ......... 348,750 250,000
45,000 Homestake Mining Co. ......... 650,187 309,375
110,000 Newmont Mining Corp. ......... 2,673,833 2,378,750
25,000 Placer Dome Inc. ............. 314,038 239,062
250,000 Royal Oak Mines Inc.+ ........ 654,847 1,250
400,000 TVX Gold Inc.+ ............... 363,038 250,000
----------- -----------
9,954,097 8,440,062
----------- -----------
PAPER AND FOREST PRODUCTS -- 0.9%
220,000 Greif Bros. Corp., Cl. A ..... 4,752,946 6,765,000
312,000 St. Joe Co. .................. 3,601,269 9,360,000
35,000 Willamette Industries Inc. ... 1,101,688 953,750
----------- -----------
9,455,903 17,078,750
----------- -----------
PUBLISHING -- 4.1%
25,000 Central Newspapers
Inc., Cl. A ................. 803,888 1,581,250
20,000 Dow Jones & Co. Inc. ......... 950,078 1,465,000
105,000 Harcourt General Inc. ........ 4,049,106 5,709,375
50,000 Lee Enterprises Inc. ......... 1,152,425 1,165,625
60,000 McClatchy Newspapers
Inc., Cl. A ................. 1,240,718 1,987,500
140,000 McGraw-Hill Companies Inc. ... 2,390,331 7,560,000
412,000 Media General Inc., Cl. A .... 12,158,330 20,007,750
85,000 Meredith Corp. ............... 1,737,591 2,868,750
132,000 New York Times Co., Cl. A .... 1,094,267 5,214,000
15,000 News Corp. Ltd., ADR ......... 255,587 817,500
399,000 Penton Media Inc. ............ 2,939,153 13,965,000
15,000 PRIMEDIA Inc.+ ............... 193,175 341,250
117,000 Pulitzer Inc. ................ 5,113,898 4,935,937
140,000 Reader's Digest
Association Inc., Cl. B ..... 3,609,282 5,118,750
6,000 Scripps (E.W.) Co., Cl. A .... 108,669 295,500
1,650,000 Seat-Pagine Gialle SpA ....... 343,343 5,718,473
115,000 Thomas Nelson Inc. ........... 1,502,571 984,687
28,050 Tribune Co. .................. 1,008,704 981,750
----------- -----------
40,651,116 80,718,097
----------- -----------

See accompanying notes to financial statements.

<PAGE>

THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (Continued)
REAL ESTATE -- 0.4%
400,000 Catellus Development
Corp.+ ...................... $ 3,986,376 $ 6,000,000
48,000 Florida East Coast
Industries Inc. ............. 631,838 1,920,000
71,000 Griffin Land &
Nurseries Inc.+ ............. 901,343 874,188
3,961 HomeFed Corp.+ ............... 709 2,773
----------- -----------
5,520,266 8,796,961
----------- -----------
RETAIL -- 2.4%
41,000 Aaron Rents Inc. ............. 146,083 515,063
20,000 Aaron Rents Inc., Cl. A ...... 83,263 312,500
280,000 Albertson's Inc. ............. 8,007,850 9,310,000
600,000 AutoNation Inc.+ ............. 8,100,114 4,237,500
180,000 Blockbuster Inc., Cl. A ...... 2,391,129 1,743,750
175,000 Burlington Coat Factory
Warehouse Corp. ............. 2,009,204 1,892,188
37,000 Coldwater Creek Inc.+ ........ 679,683 1,114,625
145,000 Gerald Stevens Inc.+ ......... 1,340,000 208,438
59,000 Hannaford Bros. Co. .......... 4,249,870 4,240,625
140,000 Kroger Co.+ .................. 818,000 3,088,750
180,500 Lillian Vernon Corp. ......... 2,618,022 1,895,250
600,000 Neiman Marcus
Group Inc., Cl. B+ .......... 14,295,595 16,650,000
350,000 Rite Aid Corp.+ .............. 2,411,260 2,296,875
----------- -----------
47,150,073 47,505,564
----------- -----------
SATELLITE -- 0.4%
150,000 COMSAT Corp. ................. 3,444,222 3,703,125
34,033 General Motors Corp., Cl. H+ . 2,162,648 2,986,396
90,000 Globalstar
Telecommunications Ltd.+ .... 376,003 810,000
45,000 Loral Space &
Communications Ltd.+ ........ 581,143 312,188
----------- -----------
6,564,016 7,811,709
----------- -----------
SPECIALTY CHEMICALS -- 1.3%
20,000 Bush Boake Allen Inc.+ ....... 578,063 875,000
75,000 Dexter Corp. ................. 2,593,517 3,600,000
3,000 du Pont de Nemours
(E.I.) & Co. ................ 177,357 131,250
440,000 Ferro Corp. .................. 6,980,399 9,240,000
20,000 Fuller (H.B.) Co. ............ 811,107 911,250
110,000 General Chemical Group Inc. .. 358,881 75,625
90,000 Great Lakes Chemical Corp. ... 2,741,654 2,835,000
180,000 Material Sciences Corp.+ ..... 1,608,439 1,800,000
620,000 Omnova Solutions Inc. ........ 1,936,006 3,875,000
95,000 Sybron Chemicals Inc.+ ....... 2,038,204 2,078,125
----------- -----------
19,823,627 25,421,250
----------- -----------
MARKET
SHARES COST VALUE
------ ---- -----
TELECOMMUNICATIONS -- 8.5%
7,500 Allegiance Telecom Inc.+ ..... $ 74,063 $ 480,000
100,000 ALLTEL Corp. ................. 3,046,704 6,193,750
505,000 AT&T Corp. ................... 16,641,896 15,970,625
190,000 BCE Inc. ..................... 4,654,367 4,524,375
30,000 Bell Atlantic Corp. .......... 1,711,480 1,524,375
40,000 BellSouth Corp. .............. 666,894 1,705,000
32,000 Cable & Wireless HKT
Ltd., ADR ................... 502,292 688,000
215,770 Cable & Wireless plc, ADR .... 6,601,774 10,801,986
571,000 CenturyTel Inc. .............. 6,925,466 16,416,250
420,000 Citizens Communications Co. .. 4,374,266 7,245,000
325,665 Commonwealth Telephone
Enterprises Inc.+ ........... 5,594,615 15,326,609
31,500 Commonwealth Telephone
Enterprises Inc., Cl. B+ .... 214,105 1,496,250
60,000 Embratel Participacoes
SA, ADR+ .................... 1,263,631 1,417,500
20,000 Global Crossing Ltd.+ ........ 559,375 526,250
200,000 GTE Corp. .................... 6,792,290 12,450,000
295,000 RCN Corp.+ ................... 2,085,981 7,485,625
10,000 Rogers Communications
Inc., Cl. B+ ................ 77,553 283,446
450,000 Rogers Communications
Inc., Cl. B, ADR+ ........... 4,457,565 12,825,000
140,000 SBC Communications Inc. ...... 5,058,238 6,055,000
170,000 Sprint Corp.+ ................ 1,448,157 8,670,000
13,500 Tele Centro Sul
Participacoes SA, ADR ....... 784,466 986,344
75,403 Tele Norte Leste
Participacoes SA, ADR ....... 1,032,454 1,781,396
500,000 Telecom Italia SpA ........... 1,046,696 6,859,876
119,000 Telecom Italia SpA, ADR ...... 2,650,840 16,369,938
67,500 Telecomunicacoes de Sao
Paulo SA (Telesp), ADR ...... 2,531,873 1,248,750
46,818 Telefonica SA, ADR ........... 586,566 2,999,278
20,000 Telefonos de Mexico SA,
Cl. L, ADR .................. 281,828 1,142,500
37,500 TELUS Corp. .................. 658,391 1,000,845
22,500 TELUS Corp., ADR ............. 402,989 600,507
12,500 TELUS Corp., Non-Voting ...... 219,464 333,193
21,500 TELUS Corp., Non-Voting, ADR . 467,649 573,091
22,000 US West Inc. ................. 1,260,022 1,886,500
----------- -----------
84,673,950 167,867,259
----------- -----------
TRANSPORTATION -- 0.2%
95,000 AMR Corp.+ ................... 1,342,973 2,511,563
8,000 Kansas City Southern
Industries Inc. ............. 253,715 709,500
3,000 Providence & Worcester
Railroad Co. ................ 36,119 22,875

See accompanying notes to financial statements.

<PAGE>

THE GABELLI ASSET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
TRANSPORTATION (CONTINUED)
15,000 Ryder System Inc. $ 316,000 $ 284,063
-------------- --------------
1,948,807 3,528,001
-------------- --------------
WIRELESS COMMUNICATIONS -- 5.6%
10,000 Leap Wireless
International Inc.+ ......... 140,705 470,000
82,000 Nextel Communications
Inc., Cl. A+ ................ 471,935 5,017,375
25,000 Price Communications
Corp.+ ...................... 516,235 589,062
125,000 Rogers Cantel Mobile
Communications Inc., Cl. B+ . 2,134,555 4,203,125
90,000 Sprint Corp. (PCS Group)+ .... 197,463 5,355,000
6,750 Tele Celular Sul
Participacoes SA, ADR ....... 107,916 305,438
22,500 Tele Centro Oeste Celular
Participacoes SA, ADR ....... 67,447 270,000
1,350 Tele Leste Celular
Participacoes SA, ADR ....... 36,110 59,738
3,375 Tele Nordeste Celular
Participacoes SA, ADR ....... 49,807 233,719
1,350 Tele Norte Celular
Participacoes SA, ADR ....... 20,857 68,513
13,500 Tele Sudeste Celular
Participacoes SA, ADR ....... 427,513 411,750
1,800,000 Telecom Italia Mobile SpA .... 1,661,796 18,440,035
3,375 Telemig Celular
Participacoes SA, ADR ....... 97,539 241,313
700,000 Telephone & Data
Systems Inc. ................ 26,211,299 70,175,000
27,000 Telesp Celular
Participacoes SA, ADR ....... 863,327 1,211,625
28,000 Vodafone AirTouch plc, ADR ... 378,212 1,160,250
14,000 VoiceStream Wireless Corp.+ .. 323,643 1,628,156
-------------- --------------
33,706,359 109,840,099
-------------- --------------
TOTAL COMMON STOCKS 1,048,719,741 1,805,093,736
-------------- --------------

PREFERRED STOCKS -- 0.1%
METALS AND MINING -- 0.0%
10,000 Freeport-McMoRan
Copper & Gold Inc.,
7.00% Cv. Pfd. .............. 213,000 133,125
-------------- --------------
TELECOMMUNICATIONS -- 0.1%
13,000 Citizens Communications Co.,
5.00% Cv. Pfd. .............. 696,712 875,875
8,604,119 Telecomunicacoes de Sao
Paulo SA (Telesp), Pfd. ..... 152,310 161,587
-------------- --------------
849,022 1,037,462
-------------- --------------
MARKET
SHARES COST VALUE
------ ---- -----
WIRELESS COMMUNICATIONS -- 0.0%
7,686,101 Telesp Celular
Participacoes SA, Pfd.+ $ 60,929 $ 138,934
-------------- --------------
TOTAL PREFERRED STOCKS 1,122,951 1,309,521
-------------- --------------
PRINCIPAL
AMOUNT
-----------

CORPORATE BONDS -- 0.0%
Automotive: Parts and Accessories -- 0.0%
$ 1,200,000 Standard Motor Products Inc.,
Sub. Deb. Cv.
6.75%, 07/15/09 ............. 1,129,198 621,000
-------------- --------------

U.S. GOVERNMENT OBLIGATIONS -- 7.7%
154,758,000 U.S. Treasury Bills,
5.66% to 6.11%++,
due 07/06/00 to 10/05/00 .... 153,541,480 153,557,485
-------------- --------------
TOTAL
INVESTMENTS -- 98.9% $1,204,513,370 1,960,581,742
==============
OTHER ASSETS AND
LIABILITIES (NET) -- 1.1% ................. 21,024,245
---------------
NET ASSETS -- 100.0%
(49,322,538 shares outstanding) ........... $1,981,605,987
==============
------------------------
For Federal tax purposes:
Aggregate cost ............................. $1,204,513,370
==============
Gross unrealized appreciation .............. $812,216,560
Gross unrealized depreciation .............. (56,148,188)
--------------
Net unrealized appreciation ................ $ 756,068,372
==============
------------------------
SETTLEMENT NET UNREALIZED
DATE DEPRECIATION
---------- --------------
FORWARD FOREIGN EXCHANGE CONTRACTS
19,646,294(b)Deliver Hong Kong Dollars
in exchange for
USD 2,494,134 ................ 08/24/00 $(27,615)
========
------------------------
(a) Security fair valued under procedures established by the Board of Trustees.
(b) Principal amount denoted in Hong Kong Dollars.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
USD - U.S. Dollars.

See accompanying notes to financial statements.

<PAGE>

THE GABELLI ASSET FUND

STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $1,204,513,370) .............. $1,960,581,742
Cash and foreign currency, at value
(Cost $4,145,626) ...................................... 4,087,655
Dividends and interest receivable ........................ 1,780,536
Receivable for investments sold .......................... 36,300,617
Receivable for Fund shares sold .......................... 570,774
--------------
TOTAL ASSETS 2,003,321,324
--------------
LIABILITIES:
Payable for investments purchased ........................ 19,417,548
Payable for Fund shares redeemed ......................... 36,154
Payable for investment advisory fees ..................... 1,638,473
Payable for distribution fees ............................ 409,808
Unrealized depreciation of forward
foreign exchange contracts ............................. 27,615
Payable for shareholder services fees .................... 26,255
Payable to custodian ..................................... 65,056
Other accrued expenses ................................... 94,428
--------------
TOTAL LIABILITIES ........................................ 21,715,337
--------------
NET ASSETS applicable to 49,322,538
shares outstanding ..................................... $1,981,605,987
==============
NET ASSETS CONSIST OF:
Shares of beneficial interest, at par value .............. $ 493,225
Additional paid-in capital ............................... 1,021,117,047
Accumulated net investment income ........................ 13,092,767
Accumulated net realized gain on investments
and foreign currency transactions ...................... 190,927,105
Net unrealized appreciation on investments
and foreign currency transactions ...................... 755,975,843
--------------
TOTAL NET ASSETS ......................................... $1,981,605,987
==============
NET ASSET VALUE, offering and redemption price
per share ($1,981,605,987 / 49,322,538 shares
outstanding; unlimited number of shares authorized
of $0.01 par value) .................................... $40.18
======

STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $71,793) .............. $ 22,256,961
Interest ................................................. 3,912,098
--------------
TOTAL INVESTMENT INCOME .................................. 26,169,059
--------------
EXPENSES:
Investment advisory fees ................................. 9,754,619
Distribution fees ........................................ 2,439,654
Shareholder services fees ................................ 517,763
Custodian fees ........................................... 155,757
Shareholder communications expenses ...................... 109,166
Legal and audit fees ..................................... 40,124
Registration expenses .................................... 27,314
Trustees' fees ........................................... 20,256
Miscellaneous expenses ................................... 11,639
--------------
TOTAL EXPENSES ........................................... 13,076,292
--------------
NET INVESTMENT INCOME .................................... 13,092,767
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain on investments and
foreign currency transactions .......................... 190,723,932
Net change in unrealized appreciation
on investments and foreign
currency transactions .................................. (236,649,258)
--------------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS ........................................... (45,925,326)
--------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................ $ (32,832,559)
==============

STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
--------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................................... $ 13,092,767 $ (1,779,216)
Net realized gain on investments and foreign currency transactions ......... 190,723,932 207,702,430
Net change in unrealized appreciation on investments and
foreign currency transactions ............................................ (236,649,258) 242,987,788
-------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............ (32,832,559) 448,911,002
-------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments ........................................... -- (204,782,027)
-------------- ----------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ........................................ -- (204,782,027)
-------------- ----------------
SHARE TRANSACTIONS:
Net increase in net assets from shares of beneficial interest transactions . 20,563,723 173,769,943
-------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS ...................................... (12,268,836) 417,898,918
NET ASSETS:
Beginning of period ........................................................ 1,993,874,823 1,575,975,905
-------------- ----------------
End of period .............................................................. $1,981,605,987 $1,993,874,823
============== ==============
</TABLE>

See accompanying notes to financial statements.

<PAGE>

THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

1. ORGANIZATION. 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's primary objective is growth of
capital. The Fund commenced investment operations on March 3, 1986.

2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.

SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") or traded on foreign exchanges are
valued at the last sale price on that exchange as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. Portfolio securities traded on more
than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by Gabelli Funds, LLC
(the "Adviser"). Securities and assets for which market quotations are not
readily available are valued at their fair value as determined in good faith
under procedures established by and under the general supervision of the Board
of Trustees. Short term debt securities with remaining maturities of 60 days or
less are valued at amortized cost, unless the Trustees determine such does not
reflect the securities' fair value, in which case these securities will be
valued at their fair value as determined by the Trustees. Debt instruments
having a maturity greater than 60 days are valued at the highest bid price
obtained from a dealer maintaining an active market in those securities.

FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency transactions. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.

The use of forward foreign exchange contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain/(loss) that might result
should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts.

FOREIGN CURRENCY TRANSLATION. 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

<PAGE>

THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
--------------------------------------------------------------------------------

exchange rates prevailing at the end of the period, and purchases and sales of
investment securities, income and expenses are translated at the exchange rate
prevailing on the respective dates of such transactions. Unrealized gains and
losses, which result from changes in foreign exchange rates and/or changes in
market prices of securities, have been included in unrealized
appreciation/depreciation on investments and foreign currency transactions. 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.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.

PROVISION FOR INCOME TAXES. The Fund 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.

Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Fund intends to undertake any procedural steps
required to claim the benefits of such treaties. If the value of more than 50%
of the Fund's total assets at the close of any taxable year consists of stocks
or securities of non-U.S. corporations, the Fund is permitted and may elect to
treat any non-U.S. taxes paid by it as paid by its shareholders.

3. INVESTMENT ADVISORY AGREEMENT. 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% 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, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
Officers and Trustees of the Fund who are its affiliates.

4. DISTRIBUTION PLAN. The Fund's Board of Trustees has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the six months
ended June 30, 2000, the Fund incurred distribution costs payable to Gabelli &
Company, Inc., an affiliate of the Adviser, of $2,439,654 or 0.25% of average
daily net assets, the annual limitation under the Plan. Such payments are
accrued daily and paid monthly.

<PAGE>

--------------------------------------------------------------------------------

THE GABELLI ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
--------------------------------------------------------------------------------

5. PORTFOLIO SECURITIES. Purchases and sales of securities for the six months
ended June 30, 2000, other than short term securities, aggregated $471,571,333
and $500,092,105, respectively.

6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2000, the
Fund paid brokerage commissions of $692,582 to Gabelli & Company, Inc. and its
affiliates.

7. LINE OF CREDIT. The Fund has access to an unsecured line of credit up to
$25,000,000 from the custodian for temporary borrowing purposes. Borrowings
under this arrangement bear interest at 0.75% above the Federal Funds rate on
outstanding balances. There were no borrowings against the line of credit during
the six months ended June 30, 2000.

8. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial interest
were as follows:

SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- ----------------
<S> <C> <C> <C> <C>
Shares sold......................................... 6,359,643 $ 253,453,696 67,482,198 $ 2,639,715,706
Shares issued upon reinvestment of dividends........ -- -- 4,868,830 194,350,061
Shares redeemed..................................... (5,853,553) (232,889,973) (67,963,789) (2,660,295,824)
--------- ------------- ---------- ---------------
Net increase.................................... 506,090 $ 20,563,723 4,387,239 $ 173,769,943
========= ============= ========== ===============
</TABLE>

<PAGE>

THE GABELLI ASSET FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 --------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
---------------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period........ $ 40.84 $ 35.47 $ 31.85 $ 26.42 $ 25.75 $ 22.21
------- ------- ------- ------- ------- -------
Net investment income (loss)................ 0.27 (0.06) 0.02 0.07 0.15 0.26
Net realized and unrealized gain (loss)
on investments............................ (0.93) 10.06 5.02 9.97 3.29 5.28
------- ------- ------- ------- ------- -------
Total from investment operations............ (0.66) 10.00 5.04 10.04 3.44 5.54
------- ------- ------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income....................... -- -- (0.02) (0.07) (0.15) (0.25)
In excess of net investment income ......... -- -- -- (0.00)(a) -- --
Net realized gain on investments ........... -- (4.63) (1.40) (4.54) (2.61) (1.75)
In excess of net realized gain
on investments ........................... -- -- (0.00)(a) (0.00)(a) (0.01) (0.00)(a)
------- ------- ------- ------- ------- -------
Total distributions ........................ -- (4.63) (1.42) (4.61) (2.77) (2.00)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ............. $ 40.18 $ 40.84 $ 35.47 $ 31.85 $ 26.42 $ 25.75
======= ======= ======= ======= ======= =======
Total return+ .............................. (1.6)% 28.5% 15.9% 38.1% 13.4% 24.9%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA:

Net assets, end of period (in 000's) ....... $1,981,606 $1,993,875 $1,575,976 $1,335,052 $1,080,639 $1,091,539
Ratio of net investment income (loss)
to average net assets ................... 1.34%(b) (0.10)% 0.06% 0.22% 0.52% 0.95%
Ratio of operating expenses
to average net assets .................... 1.34%(b) 1.37% 1.36% 1.38% 1.34% 1.33%
Portfolio turnover rate .................... 26% 32% 21% 22% 15% 26%
</TABLE>
-------------------------------
+ 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.
(a) Amount represents less than $0.005 per share.
(b) Annualized.

See accompanying notes to financial statements.

<PAGE>
--------------------------------------------------------------------------------
GABELLI FAMILY OF FUNDS
--------------------------------------------------------------------------------
GABELLI ASSET FUND ________________________
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA

GABELLI GROWTH FUND _______________________
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: HOWARD F. WARD, CFA

GABELLI WESTWOOD EQUITY FUND _____________
Seeks to invest primarily in the common stock of seasoned companies believed to
have proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: SUSAN M. BYRNE

GABELLI SMALL CAP GROWTH FUND ____________
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $500 million) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA

GABELLI BLUE CHIP VALUE FUND ______________
Seeks long-term growth of capital through investment primarily in the common
stocks of well-established, high quality companies that have market
capitalizations of greater than $5 billion.
(NO-LOAD) PORTFOLIO MANAGER: BARBARA MARCIN, CFA

GABELLI WESTWOOD SMALLCAP EQUITY FUND ___
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $1 billion or less. The Fund's primary objective is long-term capital
appreciation. (NO-LOAD)
PORTFOLIO MANAGER: LYNDA CALKIN, CFA

GABELLI WESTWOOD INTERMEDIATE BOND FUND __
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return. (NO-LOAD)
PORTFOLIO MANAGER: PATRICIA FRAZE

GABELLI EQUITY INCOME FUND ________________
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays quarterly dividends and seeks a high level of total return with an
emphasis on income. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA

GABELLI WESTWOOD BALANCED FUND __________
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(NO-LOAD)
PORTFOLIO MANAGERS: SUSAN M. BYRNE & PATRICIA FRAZE

GABELLI WESTWOOD MIGHTY MITES (SERVICE MARK) FUND _____
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(NO-LOAD)
TEAM MANAGED: MARIO J. GABELLI, CFA,
MARC J. GABELLI, LAURA K. LINEHAN AND
WALTER K. WALSH

GABELLI VALUE FUND ________________________
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation.
MAX. SALES CHARGE: 51/2%
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA

GABELLI UTILITIES FUND ______________________
Seeks to provide a high level of total return through a combination of capital
appreciation and current income. (NO-LOAD)
PORTFOLIO MANAGER: TIMOTHY O'BRIEN, CFA

GABELLI ABC FUND _________________________
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA

GABELLI MATHERS FUND _____________________
Seeks long-term capital appreciation in various market conditions without
excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: HENRY VAN DER EB, CFA

GABELLI U.S. TREASURY MONEY MARKET FUND ___
Seeks to invest 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.
(NO-LOAD) PORTFOLIO MANAGER: JUDITH A. RANERI

GABELLI CASH MANAGEMENT SHARES OF
THE TREASURER'S FUND ______________________
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market seeks to invest in
U.S. Treasury bills, notes and bonds. Tax Exempt Money Market seeks to invest in
municipal securities. Domestic Prime Money Market seeks to invest in prime
quality, domestic money market instruments. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI

AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS.

GLOBAL SERIES

GABELLI GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world -
targeting undervalued companies with strong earnings and cash flow dynamics.
The Fund's primary objective is capital appreciation. (NO-LOAD)
TEAM MANAGED: MARIO J. GABELLI, CFA, MARC J. GABELLI AND IVAN ARTEAGA, CFA

GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic companies. The Fund's
primary objective is total return through a combination of current income and
capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: HART WOODSON

GABELLI GLOBAL GROWTH FUND
Seeks capital appreciation through a disciplined investment program focusing
on the globalization and interactivity of the world's marketplace. The Fund
invests in companies at the forefront of accelerated growth. The Fund's
primary objective is capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: MARC J. GABELLI

GABELLI GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in
revenues and earnings and potential for above average capital appreciation or
are undervalued. The Fund's primary objective is capital appreciation.
(NO-LOAD)
PORTFOLIO MANAGERS: MARC J. GABELLI
AND CAESAR BRYAN

GABELLI GOLD FUND _________________________
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial and political factors.(NO-LOAD)
PORTFOLIO MANAGER: CAESAR BRYAN

GABELLI INTERNATIONAL GROWTH FUND __________
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (NO-LOAD) PORTFOLIO MANAGER: CAESAR BRYAN

THE SIX FUNDS ABOVE INVEST IN FOREIGN SECURITIES WHICH INVOLVES RISKS NOT
ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY
FLUCTUATION, ECONOMIC AND POLITICAL RISKS. THE FUNDS LISTED ABOVE ARE
DISTRIBUTED BY GABELLI & COMPANY, INC.
--------------------------------------------------------------------------------
TO RECEIVE A PROSPECTUS, CALL 1-800-GABELLI (422-3554). THE
PROSPECTUS GIVES A MORE COMPLETE DESCRIPTION OF THE FUND,
INCLUDING FEES AND EXPENSES. READ THE PROSPECTUS CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
VISIT OUR WEBSITE AT:
www.gabelli.com
OR, CALL:
1-800-GABELLI
1-800-422-3554 (BULLET) 914-921-5100 (BULLET) FAX: 914-921-5118
(BULLET) [email protected]
ONE CORPORATE CENTER, RYE, NEW YORK 10580

<PAGE>

THE GABELLI ASSET FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
FAX: 1-914-921-5118
HTTP://WWW.GABELLI.COM
E-MAIL: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)

BOARD OF TRUSTEES
Mario J. Gabelli, CFA Karl Otto Pohl
CHAIRMAN AND CHIEF FORMER PRESIDENT
INVESTMENT OFFICER DEUTSCHE BUNDESBANK
GABELLI ASSET MANAGEMENT INC.

Felix J. Christiana Anthony R. Pustorino
FORMER SENIOR VICE PRESIDENT CERTIFIED PUBLIC ACCOUNTANT
DOLLAR DRY DOCK SAVINGS BANK PROFESSOR, PACE UNIVERSITY

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
FORMER CHIEF INVESTMENT OFFICER CHAIRMAN
FINANCIAL SECURITY ASSURANCE THE BETHLEHEM CORP.
HOLDINGS LTD.

John D. Gabelli
SENIOR VICE PRESIDENT
GABELLI & COMPANY, 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 LLP

--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
GAB405Q200SR

[Photo of Mario J. Gabelli omitted]

THE
GABELLI
ASSET
FUND

SEMI-ANNUAL REPORT
JUNE 30, 2000