The
GABELLI
Westwood
Funds
Equity Fund
Balanced Fund
Intermediate Bond Fund
SmallCap Equity Fund
Realty Fund
SEMI-ANNUAL REPORT
MARCH 31, 1998
<PAGE>
The GABELLI Westwood Funds
Semi-Annual Report
March 31, 1998
***** Equity Fund o SmallCap Equity Fund
**** Balanced Fund o Realty Fund
o Intermediate Bond Fund
Morningstar rated the Equity Fund 5 stars overall and for the three and
five year periods and 4 stars for the ten year period ended 3/31/98.
Morningstar rated the Balanced Fund 4 stars overall and for the three and
five year periods ended 3/31/98. The Funds were rated among 2437, 1363 and
698 domestic equity funds for the three, five and ten year periods ended
3/31/98, respectively.
To Our Shareholders,
We are pleased to provide the March 31, 1998 semi-annual report for The
Gabelli Westwood Funds, including the Equity Fund, Balanced Fund, SmallCap
Equity Fund, Realty Fund and Intermediate Bond Fund.
Economic Commentary
Although the equity markets experienced increased levels of volatility
during the previous six months, the end result was double-digit returns for
investors who chose to weather one of the most volatile periods on record. The
closing months of 1997 were particularly frightening for investors as concerns
that the financial crises impacting the Southeast Asian markets might soon begin
impacting the U.S. markets. This perception was relatively short-lived for U.S
investors. Following a one-day, seven percent drop in October for the Dow Jones
Industrial Average, the markets bounced back and continued to trend higher,
ending the year on a strong note. The positive tone in the markets has continued
during the first three months of 1998.
Despite concerns in the Asian markets, the U.S. economy remains vibrant.
The strong economic growth and low inflation have kept the Federal Reserve
policy makers in a neutral stance since March 1997.
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. 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. 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. Morningstar
proprietary ratings reflect historical risk-adjusted performance as of March 31,
1998 and are subject to change every month. Morningstar ratings are calculated
from the Funds' 3, 5 and 10 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 an
investment category receive 5 stars and the next 22.5% receive 4 stars.
<PAGE>
Equity Fund
For the six months ended March 31, 1998, the ***** rated Equity Fund
Retail Class' total return was 10.5% and the Service Class' total return was
10.3%. The Standard & Poor's (S&P) 500 Index had a return of 14.0% over the same
period. The index is an unmanaged indicator of stock market performance. The
Retail Class was up 39.2% and the Service Class was up 38.7% over the trailing
twelve month period. The S&P 500 rose 48.0% over the same twelve month period.
For the ten year period ended March 31, 1998, the Retail Class' return
averaged 17.2% annually, versus an average annual return of 18.9% for the S&P
500. Since their respective inception dates of January 2, 1987 and January 28,
1994 through March 31, 1998, the Retail Class has a total return of 451.5% and
the Service Class has a total return of 141.5%, which equate to average annual
returns of 16.4% and 23.5%, respectively.
We have maintained an overall invested level of approximately 90% but have
moderated the overall risk in the portfolio by increasing our exposure to higher
yielding securities with strong prospects for underlying growth. These new
investments have included selected electric utility companies such as PG&E
Corp., Southern Company and Florida Progress. We also remain invested in REITs
and have made new investments in Vornado and Starwood Lodging Trust.
Throughout the previous six months, our commitment to the utility,
technology and finance sectors and specific stock selection in health care have
contributed to the Fund's performance. Although the market's perception of the
energy sector is less positive, we believe that the longer term outlook for this
group remains attractive; particularly for companies that have direct or related
exposure to the more stable natural gas businesses. Top performing stocks during
the previous six months included: Lucent Technologies, Sterling Software, SBC
Communications, WorldCom and SmithKline Beecham.
The Equity Fund continued to receive favorable press during the previous
six months and was featured in several financial publications including Smart
Money, Money Magazine and remains one of the "top 100 mutual funds" in Louis
Rukeyser's Mutual Fund Newsletter.
Balanced Fund
For the six months ended March 31, 1998, the **** rated Balanced Fund
Retail Class' total return was 8.4% and the Service Class' total return was
8.2%. A blended composite of 60% of the Standard & Poor's (S&P) 500 and 40% of
the Lehman Brothers Government/Corporate Bond (LBG/C) Index had a return of
10.3% over the same period. Each index is an unmanaged indicator of investment
performance. The Retail Class was up 29.1% and the Service Class was up 28.7%
over the trailing twelve month period. The blended composite of 60% of the S&P
500 and 40% of the LBG/C Index rose 33.7% over the same twelve month period.
- --------------------------------------------------------------------------------
As of March 31, 1998, the Equity Fund Retail Class was included in The Rukeyser
100. The Rukeyser 100 ranks mutual funds according to three year returns. The
portfolio manager must be in place for at least three years. The ranking does
not include funds with front or back end loads greater than 3% or funds that are
closed to new investors, have less than $50 million in assets, have minimums of
$100,000 or more, have trust restrictions or are single-state municipal bond
funds. The Rukeyser 100 uses Lipper and Morningstar as sources of information.
2
<PAGE>
For the five year period ended March 31, 1998, the Retail Class' return
averaged 17.8% annually, versus an average annual return of 16.2% for the
blended composite of 60% of the S&P 500 and 40% of the LBG/C Index. Since their
respective inception dates of October 1, 1991 and April 6, 1993 through March
31, 1998, the Retail Class has a total return of 168.4% and the Service Class
has a total return of 124.4%, which equate to average annual returns of 16.4%
and 17.6%, respectively.
As of March 31, 1998, the Balanced Fund had approximately 59% invested in
equities, 37% invested in fixed income and 4% invested in short term securities.
Strategies for the Equity and Intermediate Bond Funds which are discussed in
this letter, also apply to their respective components in the Balanced Fund.
Intermediate Bond Fund
For the six months ended March 31, 1998, the Intermediate Bond Fund's
total return was 4.8%. The Lehman Brothers Government/Corporate Bond (LBG/C)
Index had a return of 4.8% over the same period. The index is an unmanaged
indicator of investment performance. The Fund was up 12.4% over the trailing
twelve month period. The LBG/C Index rose 12.4% over the same twelve month
period.
For the five year period ended March 31, 1998, the Fund's return averaged
6.2% annually, versus an average annual return of 7.0% for the LBG/C Index.
Since inception on October 1, 1991 through March 31, 1998, the Fund has a total
return of 58.0%, which equates to an average annual return of 7.3%.
The bond market's strength in the fourth quarter of 1997 was driven by
concerns in Asia and a traditional flight to quality by many investors. The
strength in the market was further supported by moderate economic growth and a
lack of evidence of inflation. Performance has been bolstered through new
investments in selected high yield corporate bond holdings as well as selected
investments in the stealth performing asset-backed sector. The Intermediate Bond
Fund was ranked among the top 4% of all intermediate bond funds at year end by
Lipper Analytical Services.
SmallCap Equity Fund
For the six months ended March 31, 1998, the SmallCap Equity Fund's total
return was 9.1%. The Russell 2000 Index had a return of 6.4% over the same
period. The index is an unmanaged indicator of stock market performance. Since
inception on April 15, 1997 through March 31, 1998, the Fund has a total return
of 58.0%, versus a return of 42.7% for the Russell 2000.
For the previous six months, commitments to the technology and health care
sectors as well as equity selections in the financial sector contributed to
performance. The Fund was underweighted in the manufacturing and transportation
sectors, which were two areas that underperformed. Top performing holdings for
the previous six months included: Whole Foods Market, Alaska Airgroup, Movado
Group, Hyperion Software and Showbiz Pizza Time.
3
<PAGE>
Realty Fund
For the six months ended March 31, 1998 and since inception on September
30, 1997, the Realty Fund's total return was 5.0%. The National Association of
REITs (NAREIT) Index had a return of 1.3% over the same period. The index is an
unmanaged indicator of investment performance.
During the last three months of 1997, Real Estate Investment Trusts added
to already impressive gains for the year. A strong domestic economy coupled with
low interest rates provided for another solid period of performance. During the
most recent quarter, expected heavy issuance of new securities along with REITs
desire to acquire capital for acquisitions, weighed on the REIT market. Top
performing REITs for the previous six months included: Newhall Land, Excel
Realty, Security Capital Industrial Trust, Colonial Properties and Weingarten
Realty.
Change of Names
On July 27, 1994, Westwood Management Corp. ("Westwood") entered into an
agreement with Gabelli Funds, Inc. to form a new limited liability company,
Teton Advisers LLC ("Teton"). On October 6, 1994, Teton entered into a new
investment advisory agreement with The Westwood Funds ("Funds") and a
sub-advisory agreement with Westwood. The terms of the sub-advisory agreement
with Westwood Management Corp. state that Westwood would continue to manage the
assets of the Funds. On November 7, 1997, the members of Teton approved a change
in name to Gabelli Advisers LLC. Additionally, on November 18, 1997, the Board
of Trustees approved a change in name of The Westwood Funds to The Gabelli
Westwood Funds to reflect the more closely aligned relationship with the Gabelli
family of funds. Effective February 2, 1998, Gabelli Advisers changed its
corporate tax status to a "C" corporation and is now known as Gabelli Advisers,
Inc.
Minimum Initial Investment - $1,000
The Funds' minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
Additionally, the Gabelli Westwood Funds and other Gabelli Funds are available
through the no-transaction fee programs at many major discount brokerage firms.
The Roth IRA
The Taxpayer Relief Act of 1997 included new tax incentives and more
opportunities to save for retirement and other major expenditures. The Roth IRA
is just one of these new opportunities now available. Our investor
representatives are available at 1-800-GABELLI (1-800-422-3554) to speak with
you about establishing a new Roth IRA and to discuss your investment choices.
Gabelli U.S. Treasury Money Market Fund
Shareholders of any of the Gabelli Funds may invest in The Gabelli U.S.
Treasury Money Market Fund with an initial investment of $3,000 or more. The
Fund provides checkwriting and exchange privileges. The Fund's expenses are
capped at 0.30% of average net assets, making it one of the most attractive U.S.
Treasury-only money market funds. With dividends that are exempt from state and
local
4
<PAGE>
income taxes in all states, the Fund is an excellent vehicle in which to store
idle cash. An investment in The Gabelli U.S. Treasury Money Market Fund is
neither insured nor guaranteed by the U.S. Government. There can be no assurance
that the Fund will maintain a stable $1 per share net asset value. Call us at
1-800-GABELLI (1-800-422-3554) for a prospectus which gives a more complete
description of the Fund, including management fees and expenses. Read the
prospectus carefully before you invest or send money.
Internet
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Westwood Funds, IRAs, 401(k)s, quarterly reports, closing prices and
other current news. You can send us e-mail at [email protected].
Gabelli Westwood Mighty Mites(SM) Fund
The Gabelli Westwood Mighty Mites(SM) Fund was launched on May 11, 1998.
Gabelli Advisers, Inc. has assembled a team of experienced portfolio managers,
including Mario J. Gabelli, Marc J. Gabelli, Laura M. Linehan and Walter K.
Walsh, to select stocks with market capitalizations of less than $300 million.
The Mighty Mites(SM) Fund is no load with a $1,000 minimum investment. Please
call 1-800-GABELLI (1-800-422-3554) for a prospectus and application.
Capital Market Outlook
At the beginning of 1998, I had an opportunity to view first hand many
countries in Southeast Asia. Although the situation in the Far East is likely to
remain problematic for some period of time, the effects of this crisis on the
U.S. economy may be less than originally perceived. Despite the concerns in
Asia, we expect the markets at home to continue to pass through new highs. Even
in this environment, we continue to find opportunities for investing
shareholder's assets but are mindful that good fundamental research will be the
best way to ensure that we find the best ideas for the portfolio.
The Funds' 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) or 1-800-WESTWOOD (1-800-937-8966). Please call us during the
business day for further information.
We thank you for your loyalty and as always, pledge our best efforts on
your behalf.
Sincerely,
/s/ Susan M. Byrne
Susan M. Byrne
President and Chief Investment Officer
May 15, 1998
5
<PAGE>
Gabelli Westwood Equity Fund
Portfolio of Investments -- March 31,1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Market
Shares Cost Value
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS -- 93.2%
Aerospace -- 2.5%
43,694 Lockheed Martin Corp. ............... $ 3,989,091 $ 4,915,575
------------ ------------
Automotive -- 5.0%
61,100 Chrysler Corp. ...................... 1,998,392 2,539,469
50,400 Eaton Corp. ......................... 3,817,320 4,797,450
44,800 Lear Corp.+ ......................... 1,745,491 2,525,600
------------ ------------
7,561,203 9,862,519
------------ ------------
Business Services -- 0.1%
8,075 Sodexho Marriott Services Inc. ...... 153,316 214,492
------------ ------------
Communications Equipment -- 3.5%
54,200 Lucent Technologies Inc. ............ 3,814,659 6,930,825
------------ ------------
Computer Equipment -- 2.8%
53,100 International Business Machines Corp. 4,433,406 5,515,763
------------ ------------
Computer Software and Services -- 4.1%
59,977 Sterling Commerce Inc.+ ............. 1,855,566 2,781,433
92,100 Sterling Software Inc.+ ............. 3,660,794 5,203,650
------------ ------------
5,516,360 7,985,083
------------ ------------
Diversified Industrial -- 2.5%
70,800 Aluminum Company of America ......... 4,928,508 4,871,925
------------ ------------
Electronics -- 1.2%
95,300 Berg Electronics Corp.+ ............. 1,851,266 2,448,019
------------ ------------
Energy -- 22.3%
68,500 Apache Corp. ........................ 2,400,956 2,517,375
128,900 Baker Hughes Inc. ................... 4,788,099 5,188,225
52,260 Burlington Resources Inc. ........... 2,354,606 2,505,214
120,900 Florida Progress Corp. .............. 4,509,974 5,040,019
173,500 Houston Industries Inc. ............. 3,809,169 4,988,125
67,000 Mobil Corp. ......................... 4,486,586 5,133,875
72,400 Pennzoil Co. ........................ 4,568,354 4,678,850
154,900 PG&E Corp. .......................... 4,588,148 5,111,700
82,300 Pioneer Natural Resources Co. ....... 2,879,697 2,047,213
57,200 Southern Co. ........................ 1,346,747 1,583,725
86,400 Texaco Inc. ......................... 4,427,246 5,205,600
------------ ------------
40,159,582 43,999,921
------------ ------------
Entertainment -- 1.7%
46,100 Time Warner Inc. .................... 2,237,603 3,319,200
------------ ------------
Equipment and Supplies -- 2.7%
87,100 Deere & Co. ......................... 4,289,033 5,394,756
------------ ------------
Financial Services -- 5.5%
108,100 ABN Amro Holding NV, ADR ............ 2,110,577 2,520,081
28,800 Ahmanson (H.F.) & Co. .............. 1,380,087 2,232,000
225,700 Anthracite Capital Inc.+ ............ 3,406,148 3,385,500
47,300 First Union Corp. ................... 2,332,586 2,684,275
------------ ------------
9,229,398 10,821,856
------------ ------------
Food and Beverage -- 6.1%
103,200 Anheuser Busch Companies Inc. ....... 4,301,877 4,779,450
84,100 Campbell Soup Co. ................... 2,191,955 2,201,150
66,200 International Home Foods Inc.+ ...... 2,191,955 2,201,150
8,410 Vlasic Foods International Inc.+ .... 171,404 214,981
------------ ------------
10,416,114 11,968,256
------------ ------------
Health Care -- 6.4%
78,800 Genzyme Corp. (General Division)+ ... 1,967,336 2,521,600
1,000 Genzyme Corp. (Tissue Repair)+ ...... 0 8,625
81,900 SmithKline Beecham plc, ADR ......... 4,067,159 5,123,869
136,000 Tenet Healthcare Corp.+ ............. 3,589,436 4,938,500
------------ ------------
9,623,931 12,592,594
------------ ------------
Hotels -- 1.2%
32,300 Marriott International Inc.+ ........ 880,621 1,201,156
32,300 Marriott International Inc., Cl. A+ . 854,187 1,156,744
------------ ------------
1,734,808 2,357,900
------------ ------------
Insurance -- 5.6%
25,700 CIGNA Corp. ......................... $ 3,969,426 $ 5,268,500
103,300 Conseco Inc. ........................ 3,971,230 5,849,363
------------ ------------
7,940,656 11,117,863
------------ ------------
Real Estate Investment Trusts -- 6.4%
26,300 Arden Realty Inc. ................... 744,619 749,550
9,100 Brandywine Realty Trust ............. 218,400 216,694
68,100 Crescent Real Estate ................ 1,875,881 2,451,600
38,600 Highwoods Properties Inc. ........... 1,296,863 1,363,063
85,499 Patriot American Hospitality Inc. ... 1,923,251 2,308,473
13,900 Simon Debartolo Group Inc. .......... 461,766 476,075
44,800 Starwood Lodging Trust .............. 2,531,499 2,394,000
59,400 Vornado Realty Trust ................ 2,643,285 2,587,613
------------ ------------
11,695,564 12,547,068
------------ ------------
Retail -- 2.5%
65,300 CVS Corp. ........................... 3,285,000 4,930,150
------------ ------------
Telecommunications -- 11.1%
52,400 Bell Atlantic Corp. ................. 3,710,308 5,371,000
87,400 GTE Corp. ........................... 4,006,089 5,233,075
130,200 SBC Communications Inc. ............. 3,782,982 5,679,975
128,800 WorldCom Inc.+ ...................... 4,585,959 5,546,450
------------ ------------
16,085,338 21,830,500
------------ ------------
TOTAL COMMON STOCKS ................. 148,944,836 183,624,265
------------ ------------
PREFERRED STOCKS -- 1.5%
Energy -- 0.6%
22,000 Houston Industries Inc. 7.00%, Pfd. . 1,014,545 1,425,875
------------ ------------
Real Estate -- 0.3%
20,000 Crescent Real Estate 6.75%, Pfd. .... 500,000 510,000
------------ ------------
Real Estate Investment Trusts -- 0.6%
31,000 Excel Realty Trust 8.50%,
Pfd. Ser. A ....................... 775,000 1,100,500
------------ ------------
TOTAL PREFERRED STOCKS .............. 2,289,545 3,036,375
------------ ------------
WARRANTS -- 0.0%
500 Security Capital Group .............. 0 1,656
------------ ------------
<CAPTION>
Principal
Amount
------
<C> <S> <C> <C>
CORPORATE BONDS -- 0.6%
Real Estate Investment Trusts -- 0.6%
$ 1,150,000 Crescent Real Estate Equities Co.,
6.625%, 09/15/02 .................. 1,145,442 1,137,063
------------ ------------
U.S. TREASURY OBLIGATIONS -- 5.2%
10,500,000 U.S. Treasury Bills, 5.11% to 5.24%,
due 04/09/98 to 01/07/99++ ........ 10,266,061 10,262,001
------------ ------------
TOTAL INVESTMENTS --
100.5% ............................ $162,645,884 198,061,360
============
Other Assets and
Liabilities (Net) -- (0.5)% ....... (1,027,529)
------------
NET ASSETS -- 100.0% ................ $197,033,831
============
For Federal tax purposes:
Aggregate cost ...................... $162,645,884
============
Gross unrealized appreciation ....... $ 37,135,246
Gross unrealized depreciation ....... (1,719,770)
------------
Net unrealized appreciation ......... $ 35,415,476
============
</TABLE>
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
6
<PAGE>
Gabelli Westwood Balanced Fund
Portfolio of Investments -- March 31,1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Market
Shares Cost Value
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS - 58.1%
Aerospace -- 1.6%
18,027 Lockheed Martin Corp. ............... $ 1,452,153 $ 2,028,038
------------ ------------
Automotive -- 3.1%
23,800 Chrysler Corp. ...................... 747,773 989,188
20,200 Eaton Corp. ......................... 1,431,785 1,922,787
19,100 Lear Corp.+ ......................... 716,114 1,076,763
------------ ------------
2,895,672 3,988,738
------------ ------------
Business Services -- 0.1%
3,425 Sodexho Marriott Services Inc. ...... 65,351 90,977
------------ ------------
Communications Equipment -- 2.0%
20,800 Lucent Technologies Inc. ............ 1,390,137 2,659,800
------------ ------------
Computer Equipment -- 1.7%
21,200 International Business Machines Corp. 1,648,267 2,202,150
------------ ------------
Computer Software and Services -- 2.5%
23,718 Sterling Commerce Inc.+ ............. 653,467 1,099,922
39,200 Sterling Software Inc.+ ............. 1,524,578 2,214,800
------------ ------------
2,178,044 3,314,722
------------ ------------
Diversified Industrial -- 1.6%
29,800 Aluminum Company of America ......... 1,979,716 2,050,613
------------ ------------
Electronics -- 0.9%
43,500 Berg Electronics Corp.+ ............. 887,835 1,117,406
------------ ------------
Energy -- 14.4%
30,600 Apache Corp. ........................ 1,067,839 1,124,550
52,700 Baker Hughes Inc. ................... 1,929,432 2,121,175
23,467 Burlington Resources Inc. ........... 1,049,029 1,124,949
51,100 Florida Progress Corp. .............. 1,910,683 2,130,231
77,900 Houston Industries Inc. ............. 1,755,199 2,239,624
26,200 Mobil Corp. ......................... 1,678,048 2,007,575
31,400 Pennzoil Co. ........................ 1,959,467 2,029,225
67,400 PG&E Corp. .......................... 2,002,639 2,224,200
36,200 Pioneer Natural Resources Co. ....... 1,253,472 900,475
35,000 Southern Co. ........................ 820,185 969,063
33,700 Texaco Inc. ......................... 1,619,144 2,030,425
------------ ------------
17,045,138 18,901,492
------------ ------------
Entertainment -- 1.1%
19,800 Time Warner Inc. .................... 985,056 1,425,600
------------ ------------
Equipment and Supplies -- 1.7%
35,600 Deere & Co. ......................... 1,671,509 2,204,975
------------ ------------
Financial Services -- 3.2%
44,500 ABN Amro Holding NV, ADR ............ 873,241 1,037,406
10,700 Ahmanson (H.F.) & Co. ............... 505,967 829,250
86,000 Anthracite Capital Inc. + ........... 1,300,974 1,290,000
18,200 First Union Corp. ................... 897,406 1,032,850
------------ ------------
3,577,587 4,189,506
------------ ------------
Food and Beverage -- 3.8%
42,000 Anheuser Busch Companies Inc. ....... 1,704,967 1,945,125
34,100 Campbell Soup Co. ................... 1,494,417 1,935,175
28,100 International Home Foods Inc.+ ...... 936,859 934,325
3,410 Vlasic Foods International Inc.+ .... 68,290 87,168
------------ ------------
4,204,533 4,901,793
------------ ------------
Health Care -- 4.0%
30,800 Genzyme Corp. (General Division)+ ... 743,273 985,600
33,500 SmithKline Beecham plc, ADR ......... 1,676,433 2,095,844
57,200 Tenet Healthcare Corp.+ ............. 1,477,444 2,077,075
------------ ------------
3,897,150 5,158,519
------------ ------------
Hotels -- 0.8%
13,700 Marriott International Inc.+ ........ 375,368 509,469
13,700 Marriott International Inc., Cl. A+ . 364,101 490,631
------------ ------------
739,469 1,000,100
------------ ------------
Insurance -- 3.3%
10,000 CIGNA Corp. ......................... 1,373,256 2,050,000
40,400 Conseco Inc. ........................ 1,541,220 2,287,650
------------ ------------
2,914,476 4,337,650
------------ ------------
Real Estate Investment Trusts -- 4.0%
31,000 Crescent Real Estate ................ 777,119 1,116,000
15,700 Highwoods Properties Inc. ........... 485,368 554,406
39,726 Patriot American Hospitality Inc. ... 894,068 1,072,602
7,400 Simon Debartolo Group Inc. .......... 246,050 253,450
20,500 Starwood Lodging Trust .............. 1,141,341 1,095,469
24,200 Vornado Realty Trust ................ 1,072,305 1,054,213
------------ ------------
4,616,250 5,146,140
------------ ------------
Retail -- 1.7%
29,900 CVS Corp. ........................... 1,515,707 2,257,450
------------ ------------
Telecommunications -- 6.6%
20,300 Bell Atlantic Corp. ................. 1,416,895 2,080,750
35,600 GTE Corp. ........................... 1,591,025 2,131,550
50,200 SBC Communications Inc. ............. 1,397,077 2,189,975
53,300 WorldCom Inc.+ ...................... 1,891,251 2,295,231
------------ ------------
6,296,249 8,697,506
------------ ------------
TOTAL COMMON STOCKS ................. 59,960,299 75,673,175
------------ ------------
PREFERRED STOCKS -- 0.7%
Energy -- 0.5%
9,500 Houston Industries Inc. 7.00%, Pfd. . 438,086 615,719
------------ ------------
Real Estate -- 0.2%
11,000 Crescent Real Estate 6.75%, Pfd. .... 275,000 280,500
------------ ------------
TOTAL PREFERRED STOCKS .............. 713,086 896,219
------------ ------------
WARRANTS -- 0.0%
500 Security Capital Group .............. 0 1,656
------------ ------------
<CAPTION>
Principal
Amount
------
<C> <S> <C> <C>
ASSET BACKED SECURITIES -- 3.6%
$ 700,000 Contimortgage Home Equity Loan
Trust 97-3 Cl. A7, 7.28%,
05/15/24 .......................... 699,589 718,375
124,569 EQCC Home Equity
96-1 Cl. A2, 5.82%, 09/15/09 ...... 121,515 124,438
13,431 EQCC Home Equity Loan Trust
93-3 Cl. A, 5.15%, 09/15/08 ....... 13,424 13,162
230,000 Ford Motor Credit Auto Loan
Master Trust 95-1 Cl. A,
6.50%, 08/15/02 ................... 228,693 232,806
36,946 GMAC Grantor Trust
95-A Cl. A, 7.15%, 03/15/00 ....... 36,944 37,138
705,297 GMAC Grantor Trust
97-A Cl. A, 6.50%, 04/15/02 ....... 707,036 709,705
516,897 GNMA POOL #344946,
7.00%, 06/15/23 ................... 526,180 524,004
328,663 Green Tree Financial Corp.
96-3 Cl. A2, 6.45%, 05/15/27 ...... 328,663 329,485
1,000,000 GS Mortgage Securities Corp.,
6.94%, 07/13/30 ................... 1,014,293 1,037,501
23,626 Olympic Automobile Receivables
Trust 96-C Cl. A2,
6.30%, 01/15/00 ................... 23,620 23,640
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
Gabelli Westwood Balanced Fund
Portfolio of Investments (Continued) -- March 31,1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Principal Market
Amount Cost Value
------ ---- -----
<C> <S> <C> <C>
ASSET BACKED SECURITIES (Continued)
$ 1,000,000 Premier AutoTrust 1998-1A4,
5.70%, 10/06/02 ................... $ 999,900 $ 993,750
------------ ------------
TOTAL ASSET BACKED
SECURITIES ........................ 4,699,858 4,744,004
------------ ------------
CORPORATE BONDS -- 9.3%
Aerospace -- 0.9%
150,000 Lockheed Martin Corp.,
6.625%, 06/15/98 .................. 149,998 150,188
1,000,000 Raytheon Co., 6.30%, 03/15/05 ....... 997,756 996,000
------------ ------------
1,147,754 1,146,188
------------ ------------
Automotive Finance -- 0.3%
330,000 GMAC, 8.00%, 10/01/99 ............... 335,021 339,900
------------ ------------
Business Services -- 1.4%
1,000,000 USA Waste Services,
7.00%, 10/01/04 ................... 998,094 1,024,000
750,000 WMX Technologies Inc.,
8.25%, 11/15/99 ................... 773,182 772,500
------------ ------------
1,771,276 1,796,500
------------ ------------
Computer Software and Services -- 0.2%
300,000 Oracle Corp., 6.72%, 02/15/04 ....... 300,000 302,700
------------ ------------
Financial Services -- 2.6%
250,000 Amresco Inc., 9.875%, 03/15/05 ...... 250,000 255,000
600,000 Chase Capital II, 6.22%, 02/01/27 ... 599,496 572,400
1,200,000 Donaldson Lufkin & Jenrette,
6.50%, 04/01/08 ................... 1,195,017 1,191,360
1,500,000 Green Tree Financial Corp.,
6.42%, 05/15/29 ................... 1,499,300 1,503,749
------------ ------------
3,543,812 3,522,509
------------ ------------
Health Care -- 0.6%
760,000 Health Care Property Investors Inc.,
6.50%, 02/15/06 ................... 745,676 743,508
------------ ------------
Insurance -- 0.5%
640,000 CIGNA Corp., 8.25%, 01/01/07 ........ 673,538 709,600
------------ ------------
Manufacturing -- 0.2%
250,000 Mark IV Industries Inc.,
7.50%, 09/01/07 ................... 248,279 252,500
------------ ------------
Real Estate Investment Trusts -- 1.5%
930,000 Crescent Real Estate Equities Co.,
6.625%, 09/15/02 .................. 926,886 919,538
450,000 Kimco Realty, 7.46%, 05/29/07 ....... 450,000 469,395
325,000 Simon Debartolo Group Inc.,
6.875%, 11/15/06 .................. 324,011 322,156
200,000 Simon Debartolo Group LP,
6.75%, 07/15/04 ................... 199,218 199,060
------------ ------------
1,900,115 1,910,149
------------ ------------
Retail -- 0.8%
1,000,000 Staples Inc., 7.125%, 08/15/07 ...... 997,965 1,030,500
------------ ------------
Specialty Chemicals -- 0.1%
100,000 E.I. du Pont de Nemours and Co.,
9.15%, 04/15/00 ................... 104,240 106,200
------------ ------------
Transportation -- 0.2%
200,000 Norfolk Southern,
6.95%, 05/01/02 ................... 199,742 205,680
------------ ------------
TOTAL CORPORATE BONDS ............... 11,967,417 12,065,934
------------ ------------
<CAPTION>
Principal Market
Amount Cost Value
------ ---- -----
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 2.3%
$ 600,000 FNMA, 5.25%, 01/15/03 ............... $ 592,008 $ E584,826
1,000,000 FNMA, 5.75%, 02/15/08 ............... 996,628 980,230
130,000 FNMA, 7.20%, 07/25/25 ............... 130,506 130,221
1,320,286 FNMA POOL #344830,
6.00%, 05/01/11 ................... 1,304,639 1,302,132
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ................ 3,023,781 2,997,409
------------ ------------
U.S. TREASURY OBLIGATIONS -- 25.5%
U.S. TREASURY BILLS -- 3.8%
5,000,000 U.S. Treasury Bills, 5.11% to 5.24%,
due 04/02/98 to 01/07/99++ ........ 4,945,057 4,944,460
------------ ------------
U.S. TREASURY NOTES -- 21.7%
405,000 Notes, 6.25%, 06/30/98 .............. 405,288 405,919
1,940,000 Notes, 7.00%, 04/15/99 .............. 1,964,012 1,968,130
500,000 Notes, 6.375% 04/30/99 .............. 500,756 504,180
3,000,000 Notes, 5.875%, 11/15/99 ............. 3,013,600 3,011,880
4,060,000 Notes, 5.875%, 02/15/00 ............. 4,063,192 4,078,513
3,010,000 Notes, 6.375%, 05/15/00 ............. 3,032,162 3,054,578
1,130,000 Notes, 7.75%, 02/15/01 .............. 1,190,296 1,191,675
3,400,000 Notes, 6.25%, 01/31/02 .............. 3,442,169 3,463,206
1,670,000 Notes, 6.25%, 02/28/02 .............. 1,667,371 1,701,647
3,915,000 Notes, 6.50%, 05/31/02 .............. 3,961,734 4,028,261
1,475,000 Notes, 6.25%, 06/30/02 .............. 1,493,451 1,504,692
200,000 Notes, 7.50%, 02/15/05 .............. 220,455 219,968
695,000 Notes, 6.875%, 05/15/06 ............. 697,790 744,665
1,810,000 Notes, 7.00%, 07/15/06 .............. 1,951,659 1,954,909
475,000 Notes, 6.125%, 08/15/07 ............. 488,764 488,124
------------ ------------
28,092,698 28,320,347
------------ ------------
TOTAL U.S. TREASURY
OBLIGATIONS ....................... 33,037,755 33,264,807
------------ ------------
TOTAL INVESTMENTS -- 99.5% .......... $113,402,196 129,643,204
============
Other Assets and
Liabilities (Net) -- 0.5% ......... 590,404
------------
NET ASSETS -- 100.0% ................ $130,233,608
============
For Federal tax purposes:
Aggregate cost $113,402,196
============
Gross unrealized appreciation ....... $ 16,999,961
Gross unrealized depreciation ....... (758,953)
------------
Net unrealized appreciation ......... $ 16,241,008
============
</TABLE>
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
8
<PAGE>
Gabelli Westwood Intermediate Bond Fund
Portfolio of Investments -- March 31,1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Principal Market
Amount Cost Value
------ ---- -----
<C> <S> <C> <C>
ASSET BACKED SECURITIES -- 14.2%
$ 275,000 Contimortgage Home Equity Loan
Trust 97-3 Cl. A7, 7.28%,05/15/24 . $ 274,838 $ 282,219
40,293 EQCC Home Equity Loan Trust
93-3 Cl. A, 5.15%, 09/15/08 ....... 40,273 39,487
100,000 Ford Motor Credit Auto Loan
Master Trust 95-1 Cl. A, 6.50%,
08/15/02 .......................... 99,798 101,220
24,631 GMAC Grantor Trust 95-A Cl. A,
7.15%, 03/15/00 ................... 24,629 24,759
120,564 GMAC Grantor Trust 97-A Cl. A,
6.50%, 04/15/02 ................... 120,768 121,317
109,554 Green Tree Financial Corp.
96-3 Cl. A2, 6.45%, 05/15/27 ...... 109,554 109,828
200,000 GS Mortgage Securities Corp.,
6.94%, 07/13/30 ................... 202,859 207,500
------------ ------------
TOTAL ASSET BACKED
SECURITIES 872,721 886,330
------------ ------------
CORPORATE BONDS -- 44.0%
Aerospace -- 2.4%
50,000 Lockheed Martin Corp.,
6.625%, 06/15/98 .................. 49,999 50,063
100,000 Raytheon Co., 6.30%, 03/15/05 ....... 99,776 99,600
------------ ------------
149,775 149,663
------------ ------------
Building and Construction -- 0.8%
50,000 Kevco Inc., 10.375%, 12/01/07 ....... 50,000 52,125
------------ ------------
Business Services -- 9.1%
150,000 USA Waste Services,
6.50%, 12/15/02 ................... 149,947 150,750
150,000 USA Waste Services,
7.00%, 10/01/04 ................... 149,714 153,600
250,000 WMX Technologies Inc.,
8.25%, 11/15/99 ................... 257,727 257,499
------------ ------------
557,389 561,849
------------ ------------
Computer Software and Services -- 0.8%
50,000 Flag Ltd., 8.25%, 01/30/08 .......... 50,000 51,125
------------ ------------
Diversified Industrial -- 1.6%
50,000 ATC Group Services Inc.,
12.00%, 01/15/08 .................. 50,000 50,688
50,000 Graham Packaging,
8.75%, 01/15/08 ................... 50,000 50,000
------------ ------------
100,000 100,688
------------ ------------
Energy -- 0.8%
50,000 Forman Petroleum Corp.,
13.50%, 06/01/04 .................. 50,723 50,750
------------ ------------
Financial Services -- 4.9%
100,000 Chase Capital II, 6.22%, 02/01/27 ... 99,910 95,400
65,000 DecisionOne Corp.,
9.75%, 08/01/07 ................... 65,000 63,213
150,000 Donaldson Lufkin & Jenrette,
6.50%, 04/01/08 ................... 149,377 148,920
------------ ------------
314,287 307,533
------------ ------------
Health Care -- 2.3%
150,000 Health Care Property Investors Inc.,
6.50%, 02/15/06 ................... 148,910 146,745
------------ ------------
Insurance -- 5.4%
100,000 CIGNA Corp., 8.25%, 01/01/07 ........ 105,240 110,875
200,000 Conseco Finance Trust III Inc.,
8.80%, 04/01/27 ................... 203,432 226,040
------------ ------------
308,672 336,915
------------ ------------
<CAPTION>
Principal Market
Amount Cost Value
------ ---- -----
<C> <S> <C> <C>
Manufacturing -- 0.8%
$ 50,000 Mark IV Industries Inc.,
7.50%, 09/01/07 ................... $ 49,656 $ 50,500
------------ ------------
Real Estate Investment Trusts -- 6.0%
150,000 Crescent Real Estate Equities Co.,
6.625%, 09/15/02 .................. 149,549 148,312
225,000 Simon Debartolo Group LP,
6.75%, 07/15/04 ................... 224,120 223,942
------------ ------------
373,668 372,254
------------ ------------
Retail -- 4.1%
250,000 Staples Inc., 7.125%, 08/15/07 ...... 249,491 257,625
------------ ------------
Specialty Chemicals -- 0.8%
50,000 E.I. du Pont de Nemours and Co.,
9.15%, 04/15/00 ................... 52,120 53,100
------------ ------------
Telecommunications -- 1.9%
50,000 RCN Corp., 10.00%, 10/15/07 ......... 50,000 53,500
65,000 Rogers Communications Inc.,
8.875%, 07/15/07 .................. 64,894 66,138
------------ ------------
114,894 119,638
------------ ------------
Transportation -- 2.3%
150,000 Hvide Marine Inc.,
8.375%, 02/15/08 .................. 150,000 146,250
------------ ------------
TOTAL CORPORATE BONDS 2,719,585 2,756,760
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 5.2%
199,902 FNMA POOL #344800,
6.00%, 05/01/11 ................... 197,533 197,153
125,000 FNMA 95-W4 Class A3,
7.20%, 07/25/25 ................... 125,486 125,213
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ................ 323,019 322,366
------------ ------------
U.S. TREASURY OBLIGATIONS -- 34.9%
U.S. TREASURY BONDS -- 6.8%
100,000 Bonds, 8.75%, 05/15/17 .............. 114,039 130,958
130,000 Bonds, 7.625%, 02/15/25 ............. 142,453 157,721
125,000 Bonds, 6.75%, 08/15/26 .............. 125,854 137,613
------------ ------------
382,346 426,292
------------ ------------
U.S. TREASURY NOTES -- 28.1%
200,000 Notes, 7.00%, 04/15/99 .............. 202,589 202,900
125,000 Notes, 7.75%, 11/30/99 .............. 126,156 129,158
200,000 Notes, 5.75%, 11/15/00 .............. 200,759 200,464
500,000 Notes, 6.25%, 06/30/02 .............. 510,168 510,064
320,000 Notes, 7.00%, 07/15/06 .............. 346,383 345,619
350,000 Notes, 6.375%, 08/15/27 ............. 365,728 369,779
------------ ------------
1,751,783 1,757,984
------------ ------------
TOTAL U.S. TREASURY
OBLIGATIONS ...................... 2,134,129 2,184,276
------------ ------------
<CAPTION>
Shares
------
<C> <S> <C> <C>
WARRANTS -- 0.0%
Energy -- 0.0%
50 Forman Petroleum Corp. .............. 1 1
------------ ------------
TOTAL INVESTMENTS -- 98.3% .......... $ 6,049,455 6,149,732
============
Other Assets and
Liabilities (Net) -- 1.7% ......... 109,408
------------
NET ASSETS -- 100.0% ................ $ 6,259,140
============
For Federal tax purposes:
Aggregate cost ...................... $ 6,046,455
============
Gross unrealized appreciation ....... $ 177,640
Gross unrealized depreciation ....... (17,363)
------------
Net unrealized appreciation ......... $ 160,277
============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
Gabelli Westwood SmallCap Equity Fund
Portfolio of Investments -- March 31,1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Market
Shares Cost Value
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS -- 96.9%
Biotechnology -- 1.0%
8,100 Monarch Dental Corp.+ ............... $ 117,266 $ 138,713
------------ ------------
Building and Construction -- 1.5%
11,900 Willbros Group Inc.+ ................ 221,855 195,606
------------ ------------
Business Services -- 3.2%
8,200 Medallion Financial Corp. ........... 162,732 222,425
4,500 Whittman-Hart Inc.+ ................. 135,623 203,625
------------ ------------
298,355 426,050
------------ ------------
Communications Equipment -- 1.0%
9,500 Anicom Inc.+ ........................ 140,244 135,375
------------ ------------
Computer Software and Services -- 10.9%
3,150 Engineering Animation Inc.+ ......... 117,749 130,725
3,600 Fundtech Ltd.+ ...................... 57,590 64,800
5,200 Harbinger Corp.+ .................... 145,859 196,300
3,200 HNC Software Inc.+ .................. 93,279 120,400
3,200 Hyperion Software Corp.+ ............ 84,420 141,600
5,500 Infinium Software Inc.+ ............. 115,663 109,656
2,000 MindSpring Enterprises Inc.+ ........ 61,675 128,500
8,400 Rogue Wave Software Inc.+ ........... 98,943 126,525
3,500 Saville Systems plc, ADR+ .......... 104,900 179,375
6,700 Wind River Systems+ ................. 236,874 266,324
------------ ------------
1,116,952 1,464,205
------------ ------------
Conglomerates -- 1.6%
12,300 GP Strategies Corp.+ ................ 157,622 212,944
------------ ------------
Consumer Products -- 4.9%
5,600 Central Garden and Pet Co.+ ......... 170,963 218,750
5,800 Movado Group Inc. ................... 123,139 167,475
9,500 Wolverine World Wide Inc. ........... 250,101 268,375
------------ ------------
544,203 654,600
------------ ------------
Education -- 1.0%
4,200 Strayer Education Inc. .............. 138,950 139,650
------------ ------------
Electronics -- 5.4%
15,700 Berg Electronics Corp.+ ............. 338,804 403,293
10,300 OSI Systems Inc.+ ................... 144,515 119,738
17,500 TranSwitch Corp.+ ................... 192,506 202,344
------------ ------------
675,825 725,375
------------ ------------
Energy -- 8.0%
18,300 AGL Resources Inc. .................. 366,736 393,450
6,400 Cliffs Drilling Co.+ ................ 305,069 264,400
15,600 Newfield Exploration Co.+ ........... 355,021 406,574
------------ ------------
1,026,826 1,064,424
------------ ------------
Entertainment -- 3.3%
5,900 Cinar Films Inc.+ ................... 202,966 251,487
6,900 Imax Corp.+ ......................... 171,574 195,788
------------ ------------
374,540 447,275
------------ ------------
Equipment and Supplies -- 1.5%
9,400 Comfort Systems USA Inc.+ ........... 169,552 203,275
------------ ------------
Financial Services -- 7.0%
8,400 Amresco Inc.+ ....................... 228,240 275,100
13,200 Anthracite Capital Inc. + ........... 198,854 198,000
8,200 Downey Financial Corp. .............. 216,066 265,475
9,500 Staten Island Bancorp Inc.+ ......... 187,831 194,750
------------ ------------
830,991 933,325
------------ ------------
Food and Beverage -- 2.1%
8,400 Showbiz Pizza Time Inc.+ ............ 203,685 279,825
------------ ------------
Health Care -- 7.6%
5,500 Agouron Pharmaceuticals Inc.+ ....... 188,703 208,313
6,000 Bindley Western Industries Inc. ..... 179,427 227,625
10,000 Capital Senior Living Corp.+ ........ 133,980 138,750
<CAPTION>
Market
Shares Cost Value
------ ---- -----
<C> <S> <C> <C>
4,000 IDEC Pharmaceuticals Corp.+ ......... $ 107,999 $ 177,000
4,200 NCS Healthcare Inc., Cl. A + ........ 121,297 140,700
2,900 Sunrise Assisted Living Inc.+ ....... 113,221 129,775
------------ ------------
844,627 1,022,163
------------ ------------
Home Furnishings -- 1.6%
6,600 Furniture Brands
International Inc.+ ............... 171,638 212,438
------------ ------------
Insurance -- 2.4%
7,100 ESG Re Ltd. ......................... 160,391 184,600
3,200 Triad Guaranty Inc.+ ................ 67,281 131,200
------------ ------------
227,672 315,800
------------ ------------
Manufacturing -- 5.1%
5,800 Hardinge Inc. ....................... 180,105 197,925
8,200 Metals USA Inc.+ .................... 128,979 156,825
6,500 Mettler-Toledo International Inc.+ .. 101,131 144,219
3,600 Waters Corp.+ ....................... 128,443 179,775
------------ ------------
538,658 678,744
------------ ------------
Medical Equipment and Supplies -- 3.0%
9,200 MiniMed Inc.+ ....................... 295,009 407,100
------------ ------------
Real Estate Investment Trusts -- 5.5%
5,100 Apartment Investment &
Management Co., Cl. A ............. 170,219 196,350
11,200 Eldertrust SBI+ ..................... 203,578 200,200
5,700 Excel Realty Trust Inc. ............. 157,796 203,063
8,800 Western Investment
Real Estate Trust ................. 132,883 131,450
------------ ------------
664,476 731,063
------------ ------------
Retail -- 4.3%
2,800 Brylane Inc.+ ....................... 156,181 156,975
9,400 Dress Barn Inc.+ .................... 240,093 270,250
2,100 Whole Foods Market Inc.+ ............ 72,670 146,475
------------ ------------
468,944 573,700
------------ ------------
Steel -- 4.5%
18,900 AK Steel Holding Corp. .............. 359,488 399,262
9,300 Gibraltar Steel Corp.+ .............. 211,301 198,788
------------ ------------
570,789 598,050
------------ ------------
Telecommunications -- 3.2%
6,650 Davox Corp.+ ........................ 198,846 206,981
6,400 Premiere Technologies Inc.+ ......... 183,500 221,600
------------ ------------
382,346 428,581
------------ ------------
Textiles -- 2.3%
6,300 Pillowtex Corp. ..................... 221,121 305,156
------------ ------------
Transportation -- 5.0%
7,400 Alaska Airgroup Inc.+ ............... 256,380 400,988
9,600 MotivePower Industries Inc.+ ........ 218,740 265,200
------------ ------------
475,120 666,188
------------ ------------
TOTAL COMMON STOCKS ................. 10,877,266 12,959,625
------------ ------------
TOTAL INVESTMENTS -- 96.9% .......... $ 10,877,266 12,959,625
============
Other Assets and
Liabilities (Net) -- 3.1% ......... 416,111
------------
NET ASSETS -- 100.0% ................ $ 13,375,736
============
For Federal tax purposes:
Aggregate cost ...................... $ 10,877,266
============
Gross unrealized appreciation ....... $ 2,250,867
Gross unrealized depreciation ....... (168,508)
------------
Net unrealized appreciation ......... $ 2,082,359
============
</TABLE>
+ Non-income producing security.
See accompanying notes to financial statements.
10
<PAGE>
Gabelli Westwood Realty Fund
Portfolio of Investments -- March 31,1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Market
Shares Cost Value
------ ---- -----
<C> <S> <C> <C>
COMMON STOCKS -- 96.7%
Financial Services -- 1.8%
3,000 Anthracite Capital Inc. + ........... $ 45,000 $ 45,000
--------- ---------
Real Estate Investment Trusts -- 94.9%
1,800 American General
Hospitality Corp. ................. 49,967 49,838
1,300 Apartment Investment &
Management Co., Cl. A ............. 47,407 50,050
2,600 Arden Realty Inc. ................... 75,802 74,100
1,300 Bay Apartment Communities Inc. ...... 51,370 48,263
1,200 Bedford Property Investors Inc. ..... 23,878 23,175
1,400 Boston Properties Inc. .............. 47,406 49,263
2,100 Brandywine Realty Trust ............. 49,942 50,006
900 BRE Properties Inc. ................. 25,048 25,594
2,000 Catellus Development Corp. + ........ 38,985 37,125
1,200 Colonial Properties Trust ........... 36,099 38,175
2,400 Crescent Real Estate ................ 87,750 86,399
1,300 Developers Diversified
Realty Corp. ...................... 52,277 53,138
2,200 Duke Realty Investments Inc. ........ 52,535 53,625
2,984 Equity Office Properties Trust ...... 93,842 91,384
1,500 Equity Residential Properties
Trust SBI ......................... 79,045 75,374
1,500 Excel Realty Trust Inc. ............. 46,795 53,438
1,000 FelCor Suite Hotels Inc. ............ 39,210 37,063
1,400 First Industrial Realty Trust Inc. .. 48,698 50,400
1,800 Health Care REIT Inc. ............... 49,267 49,500
1,100 Highwoods Properties Inc. ........... 38,939 38,844
2,300 Innkeepers USA Trust ................ 35,163 37,663
400 Irvine Apartment
Communities Inc. .................. 12,637 12,600
1,100 JDN Realty Corp. .................... 36,646 37,606
1,400 Kimco Realty Corp. .................. 48,730 49,525
1,200 LTC Properties Inc. ................. 23,467 23,175
900 Macerich Co. ........................ 25,908 26,775
2,000 Manufactured Home
Communities Inc. .................. 52,816 51,750
2,100 Meridian Industrial Trust Inc. ...... 52,110 50,400
1,900 Mills Corp. ......................... 49,926 49,756
800 Newhall Land & Farming Co. .......... 20,587 25,600
2,400 Patriot American Hospitality Inc. ... 71,919 64,800
1,200 Post Properties Inc. ................ 47,368 47,925
2,400 Public Storage Inc. ................. 72,937 74,100
2,000 Rouse Co. ........................... 66,128 63,000
2,000 Security Capital Industrial Trust ... 48,423 51,250
2,000 Security Capital Pacific Trust ...... 47,504 48,125
2,500 Simon Debartolo Group Inc. .......... 81,868 85,624
1,900 SL Green Realty Corp. ............... 50,301 48,569
1,200 Spieker Properties Inc. ............. 49,417 49,500
1,400 Starwood Lodging Trust .............. 73,555 74,813
600 Storage USA Inc. .................... 24,149 23,025
<CAPTION>
Market
Shares Cost Value
------ ---- -----
<C> <S> <C> <C>
1,300 TriNet Corporate Realty Trust Inc. .. $ 49,333 $ 49,806
900 U.S. Restaurant Properties Inc. ..... 23,742 24,638
3,500 United Dominion Realty
Trust Inc. ........................ 51,366 50,750
1,100 Urban Shopping Centers Inc. ......... 36,208 36,300
1,800 Vornado Realty Trust ................ 78,239 78,412
2,000 Walden Residential Properties Inc. .. 51,710 50,500
1,100 Weingarten Realty Investors ......... 45,418 49,225
--------- ---------
2,361,837 2,369,966
--------- ---------
TOTAL COMMON STOCKS ................. 2,406,837 2,414,966
--------- ---------
TOTAL INVESTMENTS -- 96.7% .......... $2,406,837 2,414,966
=========
Other Assets and
Liabilities (Net) -- 3.3% ......... 81,802
---------
NET ASSETS -- 100.0% ................ $2,496,768
=========
For Federal tax purposes:
Aggregate cost ...................... $2,406,837
=========
Gross unrealized appreciation ....... $ 54,090
Gross unrealized depreciation ....... (45,961)
---------
Net unrealized appreciation ......... $ 8,129
=========
</TABLE>
+ Non-income producing security.
See accompanying notes to financial statements.
11
<PAGE>
The Gabelli Westwood Funds
Statement of Assets and Liabilities
March 31, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Equity Balanced Intermediate SmallCap Realty
Fund Fund Bond Fund Equity Fund Fund
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value (Cost $162,645,884,
$113,402,196, $6,049,455, $10,877,266 and
$2,406,837, respectively) ............... $ 198,061,360 $ 129,643,204 $ 6,149,732 $ 12,959,625 $ 2,414,966
Cash ...................................... -- -- 53,752 630,824 60,001
Dividends and interest receivable ......... 250,226 766,288 92,703 3,612 12,547
Receivable for Fund shares sold ........... 345,373 350,001 -- 1,629 --
Receivable for investments sold ........... 1,001,727 560,967 -- 49,742 268,091
Receivable from adviser ................... -- -- 5,476 4,938 18,375
Deferred organizational expenses .......... -- -- -- 10,100 7,956
Prepaid expenses and other assets ......... -- -- -- -- --
------------- ------------- ------------- ------------- -------------
Total Assets ............................ 199,658,686 131,320,460 6,301,663 13,660,470 2,781,936
------------- ------------- ------------- ------------- -------------
Liabilities:
Payable to custodian ...................... 460,632 447,593 -- -- --
Dividends payable ......................... -- -- 29,966 -- --
Payable for Fund shares redeemed .......... 320,657 -- -- -- --
Payable for investments purchased ......... 1,579,106 468,110 -- 274,479 274,177
Payable for investment advisory fees ...... 162,217 77,020 -- 7,533 --
Payable for distribution fees ............. 44,199 48,554 1,380 2,722 514
Other accrued expenses .................... 58,044 45,575 11,177 -- 10,477
------------- ------------- ------------- ------------- -------------
Total Liabilities ....................... 2,624,855 1,086,852 42,523 284,734 285,168
------------- ------------- ------------- ------------- -------------
Net Assets .............................. $ 197,033,831 $ 130,233,608 $ 6,259,140 $ 13,375,736 $ 2,496,768
============= ============= ============= ============= =============
Net Assets consist of:
Shares of beneficial interest, at par value $ 19,551 $ 11,138 $ 597 $ 903 $ 249
Additional paid-in capital ................ 158,895,649 112,223,101 6,555,000 10,974,637 2,487,299
Accumulated (distributions in excess of)
net investment income ................... 388,377 (17,584) 51 (40,887) (873)
Accumulated (distributions in excess of)
net realized gain on investments ........ 2,314,777 1,775,945 (396,785) 358,722 1,959
Net unrealized appreciation on investments 35,415,476 16,241,008 100,277 2,082,361 8,134
------------- ------------- ------------- ------------- -------------
Total Net Assets ........................ $ 197,033,831 $ 130,233,608 $ 6,259,140 $ 13,375,736 $ 2,496,768
============= ============= ============= ============= =============
Shares of Beneficial Interest:
Retail Class:
Shares of beneficial interest outstanding . 19,203,871 9,600,707 596,878 902,711 248,754
============= ============= ============= ============= =============
Net Asset Value, offering and redemption
price per share ......................... $ 10.08 $ 11.70 $ 10.49 $ 14.82 $ 10.04
============= ============= ============= ============= =============
Service Class:
Shares of beneficial interest outstanding . 346,812 1,536,876
============= =============
Net Asset Value and redemption price per
share ................................... $ 10.07 $ 11.67
============= =============
Maximum sales charge ...................... 4.00% 4.00%
============= =============
Maximum offering price per share
(NAV/0.96, based on maximum sales
charge of 4.0% of the offering price at
March 31, 1998) ......................... $ 10.49 $ 12.16
============= =============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
The Gabelli Westwood Funds
Statement of Operations
For the Six Months Ended March 31, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Equity Balanced Intermediate SmallCap Realty
Fund Fund Bond Fund Equity Fund Fund
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends ........................................ $ 1,469,095 $ 593,064 $ 1,359 $ 40,887 $ 53,201
Interest ......................................... 390,850 1,224,890 200,174 -- --
------------ ------------ ------------ ------------ ------------
Total Investment Income ........................ 1,859,945 1,817,954 201,533 40,887 53,201
------------ ------------ ------------ ------------ ------------
Expenses:
Investment advisory fees ......................... 786,723 370,678 18,280 49,257 9,579
Distribution fees - Retail Class ................. 193,723 103,280 7,617 12,314 2,395
Distribution fees - Service Class ................ 5,914 40,558 -- -- --
Legal and audit fees ............................. 28,599 18,859 14,738 5,494 6,500
Custodian fees ................................... 16,520 14,808 4,232 14,217 9,368
Shareholder services fees ........................ 55,584 40,813 3,926 1,949 2,095
Registration fees ................................ 36,770 24,041 5,473 3,122 4,369
Shareholder report expenses ...................... 16,057 9,997 674 726 1,108
Organizational expenses .......................... -- -- -- 1,255 880
Miscellaneous expenses ........................... 4,340 3,643 2,802 1,557 8,220
------------ ------------ ------------ ------------ ------------
Total Expenses ................................. 1,144,230 626,677 57,742 89,891 44,514
------------ ------------ ------------ ------------ ------------
Less:
Expense reimbursements ......................... -- -- (23,756) (5,934) (27,954)
Custodian fee credits .......................... (16,091) (14,808) (3,518) (10,071) (2,191)
------------ ------------ ------------ ------------ ------------
Total Net Expenses ............................. 1,128,139 611,869 30,468 73,886 14,369
------------ ------------ ------------ ------------ ------------
Net Investment Income (Loss) ....................... 731,806 1,206,085 171,065 (32,999) 38,832
------------ ------------ ------------ ------------ ------------
Net Realized and Unrealized Gain on Investments:
Net realized gain on investment transactions ..... 3,134,179 2,318,273 91,394 495,797 41,728
Net change in unrealized appreciation on
investments .................................... 14,783,145 5,470,946 21,878 724,554 8,134
------------ ------------ ------------ ------------ ------------
Net realized and unrealized gain on investments 17,917,324 7,789,219 113,272 1,220,351 49,862
Net increase in net assets resulting from operations $ 18,649,130 $ 8,995,304 $ 284,337 $ 1,187,352 $ 88,694
============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Equity Fund Balanced Fund
For the For the For the For the
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, September 30, March 31, September 30,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ................................ $ 731,806 $ 770,853 $ 1,206,085 $ 1,425,662
Net realized gain on investment transactions ......... 3,134,179 5,123,310 2,318,273 4,225,571
Net change in unrealized appreciation on investments . 14,783,145 17,743,737 5,470,946 8,428,586
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations 18,649,130 23,637,900 8,995,304 14,079,819
------------- ------------- ------------- -------------
Distributions to shareholders from:
Net investment income
Retail Class ....................................... (1,016,825) (298,531) (1,092,749) (1,102,900)
Service Class ...................................... (9,795) (10,884) (177,115) (271,666)
------------- ------------- ------------- -------------
(1,026,620) (309,415) (1,269,864) (1,374,566)
------------- ------------- ------------- -------------
Net realized gain on investment transactions
Retail Class ....................................... (5,772,109) (3,698,285) (3,804,112) (1,720,932)
Service Class ...................................... (63,563) (148,096) (795,071) (687,890)
------------- ------------- ------------- -------------
(5,835,672) (3,846,381) (4,599,183) (2,408,822)
------------- ------------- ------------- -------------
Total distributions to shareholders ................ (6,862,292) (4,155,796) (5,869,047) (3,783,388)
------------- ------------- ------------- -------------
Shares of beneficial interest transactions:
Proceeds from shares issued
Retail Class ....................................... 74,346,666 92,918,827 46,624,351 42,596,591
Service Class ...................................... 1,956,970 1,867,426 3,909,754 3,254,037
------------- ------------- ------------- -------------
76,303,636 94,786,253 50,534,105 45,850,628
------------- ------------- ------------- -------------
Proceeds from reinvestment of dividends
Retail Class ....................................... 6,623,726 3,960,522 4,737,623 2,681,092
Service Class ...................................... 72,059 158,980 863,255 875,303
------------- ------------- ------------- -------------
6,695,785 4,119,502 5,600,878 3,538,395
------------- ------------- ------------- -------------
Cost of shares redeemed
Retail Class ....................................... (27,694,805) (16,427,813) (8,842,550) (9,471,412)
Service Class ...................................... (2,092,160) (488,462) (1,663,125) (3,109,777)
------------- ------------- ------------- -------------
(29,786,965) (16,916,275) (10,505,675) (12,581,189)
------------- ------------- ------------- -------------
Net increase in net assets from shares of
beneficial interest transactions ................. 53,212,456 81,989,480 45,629,308 36,807,834
------------- ------------- ------------- -------------
Net increase in net assets ......................... 64,999,294 101,471,584 48,755,564 47,104,265
Net Assets:
Beginning of period .................................. 132,034,537 30,562,953 81,478,044 34,373,779
------------- ------------- ------------- -------------
End of period ........................................ $ 197,033,831 $ 132,034,537 $ 130,233,608 $ 81,478,044
============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets (Continued) (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Intermediate Bond Fund SmallCap Equity Fund Realty Fund
For the For the For the For the For the
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended
March 31, September 30, March 31, September 30, March 31,
1998 1997 1998 1997(a) 1998
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income ................... $ 171,065 $ 369,956 $ (32,999) $ 47,186 $ 38,832
Net realized gain on investment
transactions .......................... 91,394 107,861 495,797 344,055 41,728
Net change in unrealized appreciation
on investments ........................ 21,878 116,971 724,554 1,357,807 8,134
------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations ..................... 284,337 594,428 1,187,352 1,749,048 88,694
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income ................... (171,065) (370,062) (55,075) -- (39,705)
Net realized gain on investment
transactions .......................... -- -- (481,130) -- (39,769)
------------ ------------ ------------ ------------ ------------
Total distributions to shareholders ... (171,065) (370,062) (536,205) -- (79,474)
------------ ------------ ------------ ------------ ------------
Shares of beneficial interest transactions:
Proceeds from shares issued ............. 1,207,786 1,191,667 5,887,341 10,675,477 3,518,166
Proceeds from reinvestment
of dividends .......................... 103,974 258,261 530,206 -- 71,901
Cost of shares redeemed ................. (1,077,726) (1,258,153) (2,238,937) (3,878,546) (1,102,519)
------------ ------------ ------------ ------------ ------------
Net increase in net assets from
shares of beneficial interest
transactions ........................ 234,034 191,775 4,178,610 6,796,931 2,487,548
------------ ------------ ------------ ------------ ------------
Net increase in net assets ............ 347,306 416,141 4,829,757 8,845,979 2,496,768
Net Assets:
Beginning of period ..................... 5,911,834 5,495,693 8,545,979 -- --
------------ ------------ ------------ ------------ ------------
End of period ........................... $ 6,259,140 $ 5,911,834 $ 13,375,736 $ 8,845,979 $ 2,496,768
============ ============ ============ ============ ============
</TABLE>
- ----------
(a) From commencement of operations on April 15, 1997.
See accompanying notes to financial statements.
15
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Unaudited)
================================================================================
1. Description. The Gabelli Westwood Funds (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as an open-end diversified
management investment company and currently consists of five separate investment
portfolios: Equity Fund, Balanced Fund, Intermediate Bond Fund, SmallCap Equity
Fund and Realty Fund (commencement of operations on September 30, 1997)
(collectively, the "Funds"), each with two classes of shares known as the Retail
Class (formerly the "Institutional Class") and the Service Class, with the
exception of the SmallCap Equity Fund and Realty Fund. Effective November 8,
1994, all shares in the Service Class of the Intermediate Bond Fund were
redeemed. No such shares were outstanding at March 31, 1998, although such
shares are available for sale. Each class of shares outstanding bears the same
voting, dividend, liquidation and other rights and conditions, except that the
expense incurred in the distribution and marketing of such shares are different
for each class.
On July 27, 1994, Westwood Management Corp. entered into an agreement with
Gabelli Funds, Inc. to form a new limited liability company, Teton Advisers LLC
("Teton"). On October 6, 1994, Teton entered into a new investment advisory
agreement with the Funds and a sub-advisory agreement with Westwood Management
Corp. ("Westwood"). The terms of the sub-advisory agreement with Westwood
Management Corp. state that Westwood would continue to manage the assets of the
Funds. Teton became the investment adviser to the Funds and is responsible for
overseeing Westwood's activities. On November 7, 1997, the members of Teton
approved a change in name to Gabelli Advisers LLC. Additionally, on November 18,
1997, the Board of Trustees approved a change in name of The Westwood Funds to
The Gabelli Westwood Funds to reflect the more closely aligned relationship with
the Gabelli family of funds. On February 2, 1998, Gabelli Advisers LLC converted
to a "C" corporation and is now known as Gabelli Advisers, Inc.
On November 18, 1997, the Board of Trustees approved The Gabelli Westwood Mighty
MitesSM Fund, a series of The Gabelli Westwood Funds, to be available for sale
to shareholders at a future date.
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 the significant accounting policies followed by
the Funds.
Security Valuation. Portfolio securities are valued at the last sale price on
the securities exchange on which such securities are primarily traded or, if
there are no trades, at the current bid price as of the end of the trading day.
Over-the-counter securities for which there were no transactions are valued at
the bid price. Bonds and other fixed income securities are valued by using
market quotations, and may be valued on the basis of prices provided by a
pricing service. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or at the
direction of the Board of Trustees. Short term securities which mature in 60
days or less are valued at amortized cost.
Securities Transactions and Investment Income. Securities transactions are
accounted for on the trade date, with realized gain or loss on the sale of
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.
16
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
Dividends and Distributions to Shareholders. Dividends from net investment
income are declared and paid annually for the Equity Fund and SmallCap Equity
Fund, and quarterly for the Balanced Fund and Realty Fund. The Intermediate Bond
Fund declares dividends daily and pays those dividends monthly. Distributions of
net realized gain are normally declared and paid at least annually by each Fund.
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
Funds, timing differences and differing characterization of distributions made
by the Funds.
The Intermediate Bond Fund has a capital loss carryforward for Federal income
tax purposes of $478,655 available through September 2003. This loss
carryforward is available to reduce future distributions of net capital gains to
shareholders.
Under current tax law, capital losses realized after October 31 may be deferred
and treated as occurring on the first day of the following fiscal year. The
Intermediate Bond Fund incurred losses of $9,524 after October 31, 1996. Such
losses will be treated, for tax purposes, as arising on October 1, 1997.
As of September 30, 1997, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to additional
paid-in-capital:
Accumulated Accumulated
Undistributed Net Realized (Loss)
Investment Income (Loss) on Investments
------------------------ --------------
Equity Fund .................... $ 22,688 $(32,815)
Balanced Fund .................. (5,373) (3,443)
Intermediate Bond Fund ......... 51 (51)
Provision for Income Taxes. The Funds have qualified and intend 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 require.d.
Determination of Net Asset Value and Calculation of Expenses. Expenses directly
attributable to a Fund are charged to that Fund. Other expenses are allocated
proportionately among each Fund within the Trust in relation to the net assets
of each Fund or on another reasonable basis. In calculating net asset value per
share of each class, investment income, realized and unrealized gains and losses
and expenses other than class specific expenses, are allocated daily to each
class of shares based upon the proportion of net assets of each class at the
beginning of each day. Distribution expenses are solely borne by the Class
incurring the expense.
17
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
Organizational Expenses. Costs incurred in connection with the organization and
initial registration of the Funds have been deferred and are being amortized on
a straight-line basis over a period of sixty months beginning with the date of
each Fund's commencement of operations.
3. Investment Advisory Agreement. The Funds have entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Funds will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% for the Equity Fund, SmallCap Equity Fund and the
Realty Fund, 0.75% for the Balanced Fund, 0.60% for the Intermediate Bond Fund
of each Fund's average daily net assets. For the six months ended March 31,
1998, the Adviser was entitled to fees of $786,723, $49,257, $9,579, $370,678
and $18,280 for the Equity, SmallCap Equity, Realty, Balanced and Intermediate
Bond Funds, respectively. For the same period, the Adviser has voluntarily
agreed to reimburse the Intermediate Bond Fund, SmallCap Equity Fund and the
Realty Fund in the event annual expenses of such Funds exceed certain prescribed
limits. For the six months ended March 31, 1998, the Adviser reimbursed expenses
in the amount of $5,934, $27,954 and $23,756, respectively.
4. Distribution Plan. The Funds have adopted a distribution plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Gabelli
&Company, Inc. ("Gabelli & Company"), an indirect, wholly-owned subsidiary of
Gabelli Funds, Inc., serves as distributor of the Funds. The Plan authorizes
payment by the Funds to Gabelli & Company in connection with the distribution of
its Retail Class shares at an annual rate of 0.25% of the average daily net
assets of the Retail Class shares each fiscal year. Such payments are accrued
daily and paid monthly. For the six months ended March 31, 1998, the Funds
incurred distribution expenses in the amounts of $193,723, $103,280, $7,617,
$12,314 and $2,395 for the Retail Class of the Equity, Balanced, Intermediate
Bond, SmallCap Equity and Realty Funds, respectively.
Under the Plan for the Service Class, each Fund authorizes payments to Gabelli &
Company in connection with the distribution of its Service Class shares at an
annual rate of 0.50% of the average daily net assets of the Service Class shares
of the Equity and Balanced Funds. Such payments are accrued daily and paid
monthly. For the six months ended March 31, 1998, the Funds incurred
distribution expenses in the amounts of $5,914 for the Equity Fund and $40,558
for the Balanced Fund, respectively.
5. Portfolio Securities. Purchases and sales of securities for the six months
ended March 31, 1998, other than short term securities, are as follows:
Purchases Sales
--------- -----
Equity Fund ........................ $76,314,966 $37,594,434
Balanced Fund ...................... 61,500,691 23,775,295
Intermediate Bond Fund ............. 11,559,832 10,669,245
SmallCap Equity Fund ............... 11,710,407 8,275,039
Realty Fund ........................ 4,283,089 1,917,984
18
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
6. Shares of Beneficial Interest. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
Equity Fund Balanced Fund
----------- -------------
Six Months Year Ended Six Months Year Ended
Ended September 30, Ended September 30,
March 31, 1998 1997 March 31, 1998 1997
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Retail Class
Shares sold ................................ 7,942,574 11,047,947 4,114,003 4,088,896
Shares issued upon reinvestment of dividends 742,570 531,614 434,085 269,893
Shares redeemed ............................ (2,926,396) (1,955,697) (780,743) (910,694)
----------- ----------- ----------- -----------
Net increase in Retail Class ............... 5,758,748 9,623,864 3,767,345 3,448,095
=========== =========== =========== ===========
Service Class
Shares sold ................................ 210,368 222,950 345,740 312,801
Shares issued upon reinvestment of dividends 8,078 21,311 79,454 85,955
Shares redeemed ............................ (220,432) (54,301) (148,541) (296,196)
----------- ----------- ----------- -----------
Net increase (decrease) in Service Class ... (1,986) 189,960 276,653 102,560
=========== =========== =========== ===========
<CAPTION>
Intermediate Bond Fund SmallCap Equity Fund Realty Fund
---------------------- -------------------- -----------
Six Months Year Ended Six Months Period Ended Period Ended
Ended September 30, Ended September 30, March 31,
March 31, 1998 1997 March 31, 1998 1997 (a) 1998 (b)
-------------- ------------ -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Retail Class
Shares sold ................................ 115,679 117,171 430,950 882,585 351,717
Shares issued upon reinvestment of dividends 9,942 25,519 42,932 -- 7,390
Shares redeemed ............................ (103,272) (124,506) (161,372) (292,382) (110,353)
-------- -------- -------- -------- --------
Net increase in Retail Class ............... 22,349 18,184 312,508 590,203 248,754
======== ======== ======== ======== ========
</TABLE>
(a) From commencement of operations on April 15, 1997.
(b) From commencement of operations on September 30, 1997.
19
<PAGE>
The Gabelli Westwood Funds
Financial Highlights
Selected data for a share outstanding throughout each period:
================================================================================
<TABLE>
<CAPTION>
For the Six Months Year Ended September 30,
Ended March 31, 1998 ----------------------------------------------
(Unaudited) 1997 1996
-------------------- --------------------- --------------------
Retail Service Retail Service Retail Service
Equity Fund Class Class Class Class Class Class
-------- ------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ............... $ 9.57 $ 9.57 $ 7.68 $ 7.69 $ 6.59 $ 6.57
-------- ------- --------- ------- -------- -------
Net investment income .............................. 0.05 0.05 0.07 0.06 0.08 0.06
Net realized and unrealized gain (loss) on
investments ...................................... 0.90 0.88 2.72 2.71 1.59 1.58
-------- ------- --------- ------- -------- -------
Total from investment operations ................... 0.95 0.93 2.79 2.77 1.67 1.64
-------- ------- --------- ------- -------- -------
Distributions to shareholders:
Net investment income .............................. (0.07) (0.06) (0.07) (0.06) (0.06) --
Net realized gains ................................. (0.37) (0.37) (0.83) (0.83) (0.52) (0.52)
-------- ------- --------- ------- -------- -------
Total distributions ................................ (0.44) (0.43) (0.90) (0.89) (0.58) (0.52)
-------- ------- --------- ------- -------- -------
Net asset value, end of period ..................... $ 10.08 $ 10.07 $ 9.57 $ 9.57 $ 7.68 $ 7.69
======== ======= ========= ======= ======== =======
Total return(a) .................................... 10.52% 10.30% 39.61% 39.31% 26.88% 26.33%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ............... $193,542 $ 3,492 $ 128,697 $ 3,338 $ 29,342 $ 1,221
Ratio of net investment income to average net
assets ........................................... 0.93%(b) 0.60%(b) 1.11% 0.85% 1.16% 0.92%
Expenses net of waivers/reimbursements(c) .......... 1.41%(b) 1.66%(b) 1.53% 1.78% 1.50% 1.74%
Expenses before waivers/reimbursements ............. 1.41%(b) 1.66%(b) 1.59%(g) 1.84%(g) 1.95%(g) 2.19%(g)
Portfolio turnover rate ............................ 25% 25% 61% 61% 106% 106%
Average commission rate per share .................. $ 0.0581 $0.0581 $ 0.0572 $ 0.0572 $ 0.0540 $0.0540
<CAPTION>
Year Ended September 30,
-----------------------------------------------------------
1995 1994 1993
------------------- ------------------- -------
Retail Service Retail Service Retail
Equity Fund Class Class Class Class(e) Class
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ............... $ 5.50 $ 5.48 $ 9.91 $ 5.53 $ 14.19
------- ------- ------- ------- -------
Net investment income .............................. 0.04 0.04 0.10 0.06 0.05
Net realized and unrealized gain (loss) on
investments ...................................... 1.31 1.29 0.64 (0.11) 2.12
------- ------- ------- ------- -------
Total from investment operations ................... 1.35 1.33 0.74 (0.05) 2.17
------- ------- ------- ------- -------
Distributions to shareholders:
Net investment income .............................. (0.06) (0.04) (0.07) -- (0.55)
Net realized gains ................................. (0.20) (0.20) (5.08) -- (5.90)
------- ------- ------- ------- -------
Total distributions ................................ (0.26) (0.24) (5.15) -- (6.45)
------- ------- ------- ------- -------
Net asset value, end of period ..................... $ 6.59 $ 6.57 $ 5.50 $ 5.48 $ 9.91
======= ======= ======= ======= =======
Total return(a) .................................... 25.85% 25.54% 9.14% (0.90)% 20.16%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ............... $14,903 $ 68 $ 8,637 $ 254 $ 5,172
Ratio of net investment income to average net
assets ........................................... 0.77% 0.64% 1.63% 1.64%(b) 0.40%
Expenses net of waivers/reimbursements(c) .......... 1.61% 1.85% 0.71% 1.04%(b) 1.95%
Expenses before waivers/reimbursements ............. 2.29%(g) 2.63%(g) 1.94%(g) 2.29%(b)(g) 2.32%(g)
Portfolio turnover rate ............................ 107% 107% 137% 137% 102%
Average commission rate per share .................. -- -- -- -- --
========================================================================================================================
<CAPTION>
For the Six Months Year Ended September 30,
Ended March 31, 1998 ----------------------------------------------------
(Unaudited) 1997 1996
--------------------- --------------------- ---------------------
Retail Service Retail Service Retail Service
Balanced Fund Class Class Class Class Class Class
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ........ $ 11.49 $ 11.46 $ 9.71 $ 9.69 $ 8.47 $ 8.45
-------- -------- -------- -------- -------- --------
Net investment income ....................... 0.13 0.13 0.25 0.24 0.22 0.20
Net realized and unrealized gain (loss)
on investments ............................ 0.78 0.76 2.36 2.33 1.37 1.37
-------- -------- -------- -------- -------- --------
Total from investment operations ............ 0.91 0.89 2.61 2.57 1.59 1.57
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
Net investment income ....................... (0.14) (0.12) (0.25) (0.22) (0.22) (0.20)
Net realized gains .......................... (0.56) (0.56) (0.58) (0.58) (0.13) (0.13)
-------- -------- -------- -------- -------- --------
Total distributions ......................... (0.70) (0.68) (0.83) (0.80) (0.35) (0.33)
-------- -------- -------- -------- -------- --------
Net asset value, end of period .............. $ 11.70 $ 11.67 $ 11.49 $ 11.46 $ 9.71 $ 9.69
======== ======== ======== ======== ======== ========
Total return(a) ............................. 8.39% 8.24% 28.32% 27.98% 19.11% 18.85%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ........ $112,304 $ 17,930 $ 67,034 $ 14,444 $ 23,158 $ 11,216
Ratio of net investment income to
average net assets ........................ 2.47%(b) 2.24%(b) 2.60% 2.37% 2.62% 2.34%
Expenses net of
waivers/reimbursements(d) ................... 1.17%(b) 1.42%(b) 1.28% 1.53% 1.32% 1.57%
Expenses before
waivers/reimbursements ...................... 1.17%(b) 1.42%(b) 1.36%(g) 1.61%(g) 1.71%(g) 1.96%(g)
Portfolio turnover rate ..................... 25% 25% 110% 110% 111% 111%
Average commission rate per share ........... $ 0.0566 $ 0.0566 $ 0.0593 $ 0.0593 $ 0.0550 $ 0.0550
<CAPTION>
Year Ended September 30,
--------------------------------------------------------------------
1995 1994 1993
------------------- -------------------- -------------------
Retail Service Retail Service Retail Service
Balanced Fund Class Class Class Class Class Class(f)
------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ........ $ 7.12 $ 7.10 $ 10.89 $ 10.88 $ 10.45 $ 10.24
------- ------- ------- -------- ------- -------
Net investment income ....................... 0.19 0.17 0.12 0.15 0.20 0.19
Net realized and unrealized gain (loss)
on investments ............................ 1.35 1.35 0.42 0.36 1.44 0.52
------- ------- ------- -------- ------- -------
Total from investment operations ............ 1.54 1.52 0.54 0.51 1.64 0.71
------- ------- ------- -------- ------- -------
Distributions to shareholders:
Net investment income ....................... (0.19) (0.17) (0.13) (0.11) (0.24) (0.07)
Net realized gains .......................... -- -- (4.18) (4.18) (0.96) --
------- ------- ------- -------- ------- -------
Total distributions ......................... (0.19) (0.17) (4.31) (4.29) (1.20) (0.07)
------- ------- ------- -------- ------- -------
Net asset value, end of period .............. $ 8.47 $ 8.45 $ 7.12 $ 7.10 $ 10.89 $ 10.88
======= ======= ======== ======== ======= =======
Total return(a) ............................. 21.98% 21.67% 5.30% 4.67% 17.60% 6.96%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ........ $ 6,912 $ 7,212 $ 3,081 $ 10,810 $ 1,583 $ 114
Ratio of net investment income to
average net assets ........................ 2.47% 2.26% 1.55% 2.15% 1.90% 1.76%(b)
Expenses net of
waivers/reimbursements(d) ................... 1.35% 1.62% 1.68% 1.17% 1.82% 2.07%(b)
Expenses before
waivers/reimbursements ...................... 1.86%(g) 2.24%(g) 2.36%(g) 2.11%(g) 2.97%(g) 3.14%(b)(g)
Portfolio turnover rate ..................... 133% 133% 168% 168% 192% 192%
Average commission rate per share ........... -- -- -- -- -- --
=============================================================================================================================
</TABLE>
(a) 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.
(b) Annualized.
(c) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratios would be 1.39% (Retail Class)
and 1.64% (Service Class).
(d) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratios would be 1.14% (Retail Class)
and 1.39% (Service Class).
(e) Prior to January 28, 1994, no shares of the Service Class were issued.
(f) Prior to April 6, 1993, no shares of the Service Class were issued.
(g) During the period, certain fees were voluntarily reduced and/or
reimbursed. If such fee reductions and/or reimbursements had not occurred,
the ratio would have been as shown.
See accompanying notes to financial statements.
20
<PAGE>
The Gabelli Westwood Funds
Financial Highlights (Continued)
Selected data for a share outstanding throughout each period:
================================================================================
<TABLE>
<CAPTION>
For the
Six Months Ended Year Ended September 30,
March 31, 1998 -----------------------------------------------
(Unaudited) 1997 1996 1995
----------- ----- ----- -----------------
Retail Retail Service
Intermediate Bond Fund Class Retail Class Class Class(f)
------ ----------------- ----- -----
<S> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ..................... $10.29 $9.88 $9.98 $9.48 $9.48
------ ----- ----- ----- -----
Net investment income .................................... 0.29 0.68 0.51 0.52 0.05
Net realized and unrealized gain (loss) on investments ... 0.20 0.41 (0.10) 0.50 (0.14)
------ ----- ----- ----- -----
Total from investment operations ......................... 0.49 1.09 0.41 1.02 (0.09)
------ ----- ----- ----- -----
Distributions to shareholders:
Net investment income .................................... (0.29) (0.68) (0.51) (0.52) (0.05)
Net realized gains ....................................... -- -- -- -- --
------ ----- ----- ----- -----
Total distributions ...................................... (0.29) (0.68) (0.51) (0.52) (0.05)
------ ----- ----- ----- -----
Net asset value, end of period ........................... $10.49 $10.29 $9.88 $9.98 $9.34
====== ====== ===== ===== =====
Total return(a) .......................................... 4.82% 11.36% 4.50% 11.13% (0.95)%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ..................... $6,259 $5,912 $5,496 $4,729 $0
Ratio of net investment income to average net assets ..... 5.61%(b) 6.71% 5.43% 5.38% 4.85%
Expenses net of waivers/reimbursements(c) ................ 1.11%(b) 1.11% 1.09% 1.17% 1.45%
Expenses before waivers/reimbursements(e) ................ 1.89%(b) 1.70% 2.46% 2.47% 4.07%
Portfolio turnover rate .................................. 183% 628% 309% 165% 70%
<CAPTION>
Year Ended September 30,
------------------------------
1994 1993
------------------ ------
Retail Service Retail
Intermediate Bond Fund Class Class(g) Class
------ ------ ------
<S> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ..................... $10.73 $10.51 $10.65
------ ------ ------
Net investment income .................................... 0.48 0.41 0.39
Net realized and unrealized gain (loss) on investments ... (1.04) (1.03) 0.62
------ ------ ------
Total from investment operations ......................... (0.56) (0.62) 1.01
------ ------ ------
Distributions to shareholders:
Net investment income .................................... (0.48) (0.41) (0.39)
Net realized gains ....................................... (0.21) -- (0.54)
------ ------ ------
Total distributions ...................................... (0.69) (0.41) (0.93)
------ ------ ------
Net asset value, end of period ........................... $9.48 $9.48 $10.73
===== ===== ======
Total return(a) .......................................... (5.46)% (6.81)% 10.24%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ..................... $7,339 $76 $2,849
Ratio of net investment income to average net assets ..... 4.86% 6.05%(b) 3.74%
Expenses net of waivers/reimbursements(c) ................ 0.92% 1.34%(b) 2.40%
Expenses before waivers/reimbursements(e) ................ 1.75% 2.37%(b) 3.46%
Portfolio turnover rate .................................. 203% 203% 222%
==================================================================================================
<CAPTION>
SmallCap Equity Fund Realty Fund
For the For the
Six Months Ended Six Months Ended
March 31, 1998 March 31, 1998
(Unaudited) 1997(h) (Unaudited)
-------------- ----------- -----------
Operating performance: Retail Class Retail Class Retail Class
-------------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period .................... $14.48 $10.00 $10.00
------ ------ ------
Net investment income ................................... (0.04) 0.08 0.20
Net realized and unrealized gain (loss) on investments .. 1.20 4.40 0.28
------ ------ ------
Total from investment operations ........................ 1.16 4.48 0.48
------ ------ ------
Distributions to shareholders:
Net investment income ................................... (0.08) -- (0.20)
Net realized gains ...................................... (0.74) -- (0.24)
------ ------ ------
Total distributions ..................................... (0.82) -- (0.44)
------ ------ ------
Net asset value, end of period .......................... $14.82 $14.48 $10.04
====== ====== ======
Total return(a) ......................................... 9.14% 44.80% 4.98%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) .................... $13,376 $8,546 $2,497
Ratio of net investment income to average net assets .... (0.67)%(b) 1.89%(b) 4.05%(b)
Expenses net of waivers/reimbursements(d) ............... 1.70%(b) 1.89%(b) 1.73%(b)
Expenses before waivers/reimbursements(e) ............... 1.82%(b) 2.45%(b) 4.64%(b)
Portfolio turnover rate ................................. 86% 146% 105%
Average commision rate per share ........................ $0.0511 $0.0358 $0.0353
===========================================================================================================================
</TABLE>
(a) 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.
(b) Annualized.
(c) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratio would be 0.99%.
(d) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratio would be 1.50%.
(e) During the period, certain fees were voluntarily reduced and/or
reimbursed. If such fee reductions and/or reimbursements had not occurred,
the ratio would have been as shown.
(f) On November 8, 1994, all shares of the Service Class were redeemed and
there have been no further shares issued in this class since that date.
Accordingly, the NAV per share represents the net asset value on November
8, 1994.
(g) Prior to January 28, 1994, no shares of the Service Class were issued.
(h) Period from April 15, 1997 (inception date of fund) to September 30, 1997.
See accompanying notes to financial statements.
21
<PAGE>
[This page intentionally left blank.]
22
<PAGE>
The GABELLI Westwood Funds
Equity Fund
Balanced Fund
Intermediate Bond Fund
SmallCap Equity Fund
Realty Fund
(Unaudited)
Gabelli Westwood Funds -- Retail Class Shares
---------------------------------------------
Average Annual Returns -- March 31, 1998 (a)
<TABLE>
<CAPTION>
Calendar
First Quarter 1 Year 5 Year Life of Fund Inception Date
------------- ------ ------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Equity ................. 10.2% 39.2% 23.4% 16.4% 01/02/87
Balanced ............... 6.9 29.1 17.8 16.4 10/01/91
Intermediate Bond ...... 1.9 12.4 6.2 7.3 10/01/91
SmallCap Equity ........ 13.9 -- -- N/A 04/15/97
Realty ................. 0.6 -- -- N/A 09/30/97
</TABLE>
Gabelli Westwood Funds -- Service Class Shares
----------------------------------------------
Average Annual Returns -- March 31, 1998 (a)(b)
<TABLE>
<CAPTION>
Calendar
First Quarter 1 Year 5 Year Life of Fund Inception Date
------------- ------ ------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Equity ................ 10.1% 33.1% 30.1% 22.3% 01/28/94
Balanced .............. 6.7 23.5 22.2 16.6 04/06/93
</TABLE>
(a) Total returns and average annual returns reflect changes in share price
and reinvestment of dividends and are net of expenses. The net asset value
of the Fund is reduced on the ex-dividend (payment) date by the amount of
the dividend paid. Of course, returns represent past performance and do
not guarantee future results. Investment returns and the principal value
of an investment will fluctuate. When shares are redeemed they may be
worth more or less than their original cost.
(b) Includes the effect of the maximum 4.0% sales charge at the beginning of
the period.
<PAGE>
The GABELLI Westwood Funds
One Corporate Center
Rye, NY 10580
General and Account Information:
1-800 GABELLI (422-3554)
Fax: 1-914-921-5118
http://www.gabelli.com
email: [email protected]
Board of Trustees
SUSAN M. BYRNE JAMES P. CONN
President and Chief Chief Investment Officer
Investment Officer Financial Security Assurance
Holdings Ltd.
KARL OTTO POHL WERNER J. ROEDER, MD
Former President Director of Surgery
Deutsche Bundesbank Lawrence Hospital
ANTHONY J. COLAVITA
Attorney-at-Law
Anthony J. Colavita, P.C.
Officers
SUSAN M. BYRNE BRUCE N. ALPERT
President and Chief Vice President and
Investment Officer Treasurer
LYNDA J. CALKIN, CFA PATRICIA R. FRAZE
Vice President Vice President
JAMES E. McKEE
Secretary
Investment Adviser
Gabelli Advisers, Inc.
Investment Sub-Adviser
Westwood Management Corporation
Distributor
Gabelli & Company, Inc.
Custodian
The Bank of New York
Legal Counsel
Battle Fowler LLP
Independent Accountants
Price Waterhouse LLP
- --------------------------------------------------------------------------------
This report is for the information of the shareholders of The Gabelli Westwood
Funds. It is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
