The
GABELLI
Westwood
Funds
EQUITY FUND
BALANCED FUND
INTERMEDIATE BOND FUND
SMALLCAP EQUITY FUND
REALTY FUND
MIGHTY MITES(SM) FUND
ANNUAL REPORT
SEPTEMBER 30, 1999
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The GABELLI Westwood Funds
==========================
Annual Report
September 30, 1999
**** Equity Fund SmallCap Equity Fund
**** Balanced Fund Realty Fund
*** Intermediate Bond Fund Mighty Mites(SM) Fund
Morningstar Rated(TM) the Equity Fund Retail Class 4 stars overall and for
the three, five and ten-year periods ended 9/30/99. Morningstar Rated(TM)
the Equity Fund Service Class 4 stars overall and for the five-year period
and 3 stars for the three-year period ended 9/30/99. Morningstar Rated(TM)
the Balanced Fund Retail Class 4 stars overall and for the five-year
period and 3 stars for the three-year period ended 9/30/99. Morningstar
Rated(TM) the Balanced Fund Service Class 4 stars overall and for the
five-year period and 3 stars for the three-year period ended 9/30/99. The
Equity and Balanced Funds were rated among 3210, 2010 and 751 domestic
equity funds overall and for the three, five and ten-year periods ended
9/30/99, respectively. Morningstar Rated(TM) the Intermediate Bond Fund 3
stars overall and for the three and five-year periods ended 9/30/99. The
Intermediate Bond Fund was rated among 1585 and 1153 taxable bond funds
overall and for the three and five-year periods ended 9/30/99,
respectively.
To Our Shareholders,
We are pleased to provide the September 30, 1999, annual report for the
Gabelli Westwood Funds, including the Equity Fund, Balanced Fund, Intermediate
Bond Fund, SmallCap Equity Fund, Realty Fund and Mighty Mites(SM) Fund.
Market Commentary
With the exception of the second quarter, stock market performance in 1999
has been dominated by some of the largest companies (in terms of market
capitalization) with some of the highest valuations (as measured by
Price/Earnings ("P/E") ratio). Westwood Management's investment process is
focused on identifying companies whose future growth potential have not been
fully valued in the current market. Therefore, our investments over the previous
twelve months have avoided companies whose valuations were at extreme levels and
whose prices were too high for our comfort level. The Standard & Poor's ("S&P")
500 Index return is calculated on a capitalization-weighted basis, which means
that the returns of the largest companies carry the greatest weight. Given that
the recent strongest performers have also been the largest, the S&P 500 Index
currently does not reflect the performance of the broad market. Over the last
twelve to eighteen months we have been monitoring the S&P 500 Index on an
equally weighted basis as a better indication of overall market performance.
Over the last twelve months, we have seen marked improvements in the
economic environments in Japan and Southeast Asia. During this time period, we
have increased our exposure to companies that will
- --------------------------------------------------------------------------------
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 September
30, 1999 and are subject to change every month. Morningstar ratings are
calculated from the Funds' three, five and ten-year average annual returns in
excess of 90-day T-bill returns with appropriate fee adjustments and a risk
factor that reflects fund performance below 90-day T-bill returns. The top 10%
of the funds in a broad asset class receive five stars, the next 22.5% receive 4
stars, the next 35% receive three stars, the next 22.5% receive two stars and
the bottom 10% receive one star.
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benefit from the resurgence of growth in both areas. Tiffany & Co. is a fine
example of a company that has been benefiting from the Japanese recovery.
Another good example is Citigroup, which has exposure to both Japan and
Southeast Asia.
As we enter the new millennium, we believe the challenge will be to
identify new sources of growth for investors. Technology has been an important
area for growth over the last several years but new opportunities may be found
elsewhere. We believe our challenge will be to uncover these new areas of growth
for our shareholders.
Equity Fund
For the fiscal year ended September 30, 1999, the (****)-rated Equity Fund
Retail Class' total return was 19.77% and the Service Class' total return was
19.51%. The Standard & Poor's ("S&P") 500 Index and the Lipper Multi-Cap Value
Fund Average had total returns of 27.79% and 16.39%, respectively, over the same
twelve-month period. The S&P 500 Index is an unmanaged indicator of stock market
performance, while the Lipper Average reflects the average performance of mutual
funds classified in this particular category.
For the ten-year period ended September 30, 1999, the Retail Class' total
return averaged 14.42% annually versus average annual total returns of 16.80%
and 12.39% for the S&P 500 Index and Lipper Multi-Cap Value Fund Average,
respectively. Since their respective inception dates of January 2, 1987 and
January 28, 1994 through September 30, 1999, the Retail Class had a cumulative
total return of 489.10% and the Service Class had a cumulative total return of
157.09%, which equate to average annual total returns of 14.92% and 18.10%,
respectively.
Over the previous twelve months, the Fund has been defensively postured in
order to manage the increasing volatility in the marketplace. The exposure to
the Energy, Basic Materials and Capital Goods
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
EQUITY FUND RETAIL CLASS AND THE S&P 500 INDEX
- -------------------------------------------------------
Average Annual Total Return*
- -------------------------------------------------------
One Year 5 Year 10 Year Life of Class
- -------------------------------------------------------
19.77% 21.35% 14.42% 14.92%
- -------------------------------------------------------
[The following table was depicted as a line chart in the printed material.]
Westwood Equity Fund
(Retail Class) S&P 500 Index
1/2/87 10,000 10,000
9/87 13,165 13,599
9/88 11,779 11,893
9/89 15,322 15,785
9/90 13,699 14,305
9/91 16,396 18,766
9/92 17,078 20,841
9/93 20,508 23,553
9/94 22,383 24,421
9/95 28,169 31,684
9/96 35,740 38,116
9/97 49,893 53,515
9/98 49,194 58,383
9/99 58,920 74,610
* Past performance is not predictive of future results.
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
EQUITY FUND SERVICE CLASS AND THE S&P 500 INDEX
- -----------------------------------------------
Average Annual Total Return*
- -----------------------------------------------
One Year 5 Year Life of Class
- -----------------------------------------------
14.78% 20.01% 17.25%
- -----------------------------------------------
[The following table was depicted as a line chart in the printed material.]
Westwood Equity Fund
(Service Class) S&P 500 Index
1/28/94 9,600 10,000
9/94 9,514 9,896
9/95 11,944 12,839
9/96 15,090 15,445
9/97 21,020 21,685
9/98 20,642 23,658
9/99 24,669 30,233
* Past performance is not predictive of future results.
Includes effect of maximum sales charge of 4.00%.
sectors has rewarded investors, as they were some of the strongest drivers of
performance in both the Fund and the market at large. Although Technology has
been a strong market performer in an absolute sense, we have been selective in
our investments. The Fund is invested in companies whose upside potential, we
believe, continues to outweigh the downside risk of disappointment. Over the
past twelve months, the top performing portfolio holdings have been: Ann Taylor
Stores, Citigroup, AMFM Inc., IBM, and Alcoa. The Fund's long term performance
record continues to be recognized by well-known publications and is currently
part of SmartMoney's Growth vs. Value contest. The publication is providing a
month to month account of performance along with each manager's investment
strategy.
Balanced Fund
For the fiscal year ended September 30, 1999, the (****)-rated Balanced
Fund Retail Class' total return was 12.56% and the Service Class' total return
was 12.20%. A blended composite of 60% of the Standard & Poor's ("S&P") 500
Index and 40% of the Lehman Brothers Government/Corporate Bond Index ("LBG/C")
and the Lipper Balanced Fund Average had total returns of 16.03% and 12.62%,
respectively, over the same twelve-month period. Each index is an unmanaged
indicator of market performance, while the Lipper Average reflects the average
performance of mutual funds classified in this particular category.
For the five-year period ended September 30, 1999, the Retail Class' total
return averaged 16.61% annually and the Service Class' total return averaged
16.33% annually versus average annual total returns of 18.13% and 14.38% for the
blended composite of 60% of the S&P 500 Index and 40% of the LBG/C Index and the
Lipper Balanced Fund Average, respectively. Since their respective inception
dates of October 1, 1991 and April 6, 1993 through September 30, 1999, the
Retail Class had a cumulative total return of 186.54% and the Service Class had
a cumulative total return of 138.65%, which equate to average annual total
returns of 14.05% and 14.35%, respectively.
The Balanced Fund is designed to give an investor exposure to equities but
reduce overall risk through investments in short-to-intermediate fixed income
securities. Strategies for the Equity and
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
BALANCED FUND RETAIL CLASS AND A COMPOSITE OF 60% -- THE S&P 500 INDEX
AND 40% -- THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
- -----------------------------------------
Average Annual Total Return*
- -----------------------------------------
One Year 5 Year Life of Class
- -----------------------------------------
12.56% 16.61% 14.05%
- -----------------------------------------
[The following table was depicted as a line chart in the printed material.]
60% S&P 500 and
Westwood Balanced Fund 40% Lehman Bros.
(Retail Class) Gov't./Corp. Bond Index
10/1/91 10,000 10,000
9/92 10,797 11,207
9/93 12,621 12,603
9/94 13,291 12,670
9/95 16,203 15,658
9/96 19,300 17,850
9/97 24,762 22,866
9/98 25,455 25,290
9/99 28,652 29,344
* Past performance is not predictive of future results.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
BALANCED FUND SERVICE CLASS AND A COMPOSITE OF 60% -- THE S&P 500 INDEX
AND 40% -- THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
- -----------------------------------------
Average Annual Total Return*
- -----------------------------------------
One Year 5 Year Life of Class
- -----------------------------------------
7.68% 15.37% 13.63%
- -----------------------------------------
[The following table was depicted as a line chart in the printed material.]
60% S&P Index and
Westwood Balanced Fund 40% Lehman Bros.
(Service Class) Gov't. /Corp. Bond Index
4/6/93 9,600 10,000
9/93 9,809 10,443
9/94 10,751 10,499
9/95 13,081 12,975
9/96 15,550 14,792
9/97 19,904 18,949
9/98 20,422 20,958
9/99 22,913 24,318
* Past performance is not predictive of future results.
Includes effect of maximum sales charge of 4.00%.
Intermediate Bond Funds that are discussed in this letter also apply to their
respective components in the Balanced Fund.
Intermediate Bond Fund
For the fiscal year ended September 30, 1999, the (***)-rated Intermediate
Bond Fund's net asset value declined 2.37%. The Lehman Brothers
Government/Corporate Bond ("LBG/C") Index and the Lipper Intermediate Investment
Grade Debt Fund Average declined 1.62% and 0.68%, respectively, over the same
twelve-month period. The LBG/C Index is an unmanaged indicator of market
performance, while the Lipper Average reflects the average performance of mutual
funds classified in this particular category.
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE INTERMEDIATE BOND FUND AND
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
- ----------------------------------------
Average Annual Total Return*
- ----------------------------------------
One Year 5 Year Life of Fund
- ----------------------------------------
(2.37)% 6.82% 6.23%
- ----------------------------------------
[The following table was depicted as a line chart in the printed material.]
Westwood Intermediate Bond Lehman Bros. Gov't.
Fund (Retail Class) /Corp. Bond Index
10/1/91 10,000 10,000
9/92 11,186 11,323
9/93 12,331 12,620
9/94 11,658 12,098
9/95 12,956 13,834
9/96 13,540 14,467
9/97 15,084 15,856
9/98 16,623 17,886
9/99 16,229 17,596
* Past performance is not predictive of future results.
For the five-year period ended September 30, 1999, the Fund's total return
averaged 6.82% annually versus average annual total returns of 7.77% and 7.14%
for the LBG/C Index and the Lipper Intermediate Investment Grade Debt Fund
Average, respectively. Since inception on October 1, 1991 through September 30,
1999, the Fund had a cumulative total return of 62.17%, which equates to an
average annual total return of 6.23%.
Over the past year, the bond market environment has been one of transition
and volatility. Early on, the markets lacked adequate liquidity, leading the
Federal Reserve to ease interest rates three separate times. As the interest
rate cuts took hold, consumer confidence and the manufacturing sector rapidly
recovered. Recently, the Federal Reserve has tightened twice to ward off too
rapid a recovery. The rest of the world is experiencing or expecting positive
growth. The Intermediate Bond Fund has taken advantage of the extremes of
valuation to periodically adjust interest rate sensitivity and commitments to
various sectors of the market. The Fund holds overweighted positions in
asset-backed securities and in short and intermediate maturity corporate notes.
The top five performers for the past twelve months were: asset-backed securities
from GMAC and Ford Motor Credit, corporate notes issued by Niagara Mohawk and du
Pont, and a 15-year Fannie Mae mortgage-backed security.
SmallCap Equity Fund
For the fiscal year ended September 30, 1999, the SmallCap Equity Fund's
total return was 58.94%. The Russell 2000 Index and the Lipper Small Cap Growth
Fund Average had total returns of 19.07% and 43.76%, respectively, over the same
twelve-month period. The Russell 2000 Index is an unmanaged indicator of stock
market performance, while the Lipper Average reflects the average performance of
mutual funds classified in this particular category. Since inception on April
15, 1997 through September 30, 1999, the Fund had a cumulative total return of
89.50%, which equates to an average annual total return of 29.63%.
5
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE SMALLCAP EQUITY FUND AND THE RUSSELL 2000 INDEX
- ------------------------------
Average Annual Total Return*
- ------------------------------
One Year Life of Fund
- ------------------------------
58.94% 29.63%
- ------------------------------
[The following table was depicted as a line chart in the printed material.]
Westwood SmallCap Equity
Fund (Retail Class) Russell 2000 Index
4/15/97 10,000 10,000
9/30/97 14,480 13,410
9/30/98 11,917 10,862
9/30/99 18,941 12,933
* Past performance is not predictive of future results.
The small cap equity asset class has emerged as an area of significant
opportunity for long term investment by shareholders. Strong performance is
attributed to exposure in the Technology and Consumer Staples sectors that have
consistently performed beyond the overall market returns. Technology-related
companies have been strong beneficiaries of improvements in the Asian economies.
Globally, the continued push to manage and access large amounts of available
data has contributed to the health of technology growth. The top performing
holdings in the Fund this past year include TranSwitch, Fundtech, MiniMed,
Whittman-Hart, and CEC Entertainment.
Realty Fund
For the fiscal year ended September 30, 1999, the Realty Fund's net asset
value declined 5.68%. The National Association of REITs ("NAREIT") Index and the
Lipper Real Estate Fund Average declined 8.54% and 2.28%, respectively, over the
same twelve-month period. The NAREIT Index is an unmanaged indicator of market
performance, while the Lipper Average reflects the average performance of mutual
funds classified in this particular category. Since inception on September 30,
1997 through September 30, 1999, the Fund had a cumulative total return of
(15.58)%, which equates to an average annual total return of (8.11)%.
Real Estate Investment Trusts ("REITs") are becoming a major factor in the
capital markets. Assuming no change in relative valuations, REIT returns should
capture the traditional returns of real estate and be very competitive with
other asset classes. U.S. real estate is very strong and the disconnect between
public equity REITs and the private real estate market means that REIT returns
should be even higher. Recent underperformance of REITs in a momentum-driven
market makes it very difficult for investors to allocate money to REITs, but
this is where opportunity lies. We continue to find REITS attractive because
they offer: (1) an attractive income stream resulting from over 95% of dividends
being paid out to shareholders; (2) an attractive vehicle for long term capital
appreciation resulting from the underlying growth of the asset class; and (3) a
source of diversification, due to the low correlation with
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE REALTY FUND, THE RUSSELL 2000 INDEX AND
THE NATIONAL ASSOCIATION OF REITS ALL REIT INDEX
- -----------------------------
Average Annual Total Return*
- -----------------------------
One Year Life of Fund
- -----------------------------
(5.68)% (8.11)%
- -----------------------------
[The following table was depicted as a line chart in the printed material.]
Realty Retail Russell 2000 Index NARIT All REIT Index
9/30/97 10,000 10,000 10,000
9/30/98 8,950 8,100 8,540
9/30/99 8,442 9,645 7,902
* Past performance is not predictive of future results.
equities which increases an investor's overall portfolio return and reduces
portfolio risk. The top performing holdings in the Fund this past year include
Post Properties, Boston Properties, Camden Property Trust, First Industrial
Realty Trust, and Equity Residential Properties Trust.
Mighty Mites(SM) Fund
For the fiscal year ended September 30, 1999, the Mighty Mites Fund's
total return was 34.21%. The Russell 2000 Index and the Lipper Small Cap Value
Fund Average had total returns of 19.07% and 12.33%, respectively, over the same
twelve-month period. The Russell 2000 Index is an unmanaged indicator of stock
market performance, while the Lipper Average reflects the average performance of
mutual funds classified in this particular category. Since inception on May 11,
1998 through September 30, 1999, the Fund had a cumulative total return of
30.18%, which equates to an average annual total return of 20.87%.
In the third quarter of 1999, small/micro cap stocks caught the attention
of investors troubled by the sky-high valuations of large cap growth stocks.
There was a bias toward value in the small company stock market, a further
reflection of investors' increasing sensitivity to risk. Despite the sector's
strong recent performance, we believe selected small company stocks are still
quite inexpensive. Merger and acquisition activity remains strong, share
repurchase programs are accelerating, and insiders are buying. If smart money
continues to pursue small company stock bargains, we believe financial
institutions and the investment public will follow suit.
We still have some "dry powder" to pursue opportunities. At quarter end,
the Fund had approximately 10% of its assets in cash. A significant portion of
this cash came from portfolio holdings that were acquired during the year and
from the sale of other investments that prospered due to announcements of
pending deals and/or the retention of investment bankers "to explore strategic
options"--often the Wall Street equivalent of a "For Sale" sign. Most recently,
North Fork Bancorp announced it would acquire Reliance Bancorp, Inc. in a
stock-for-stock merger.
7
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE MIGHTY MITES FUND AND THE RUSSELL 2000 INDEX
- ------------------------------
Average Annual Total Return*
- ------------------------------
One Year Life of Fund
- ------------------------------
34.21% 20.87%
- ------------------------------
[The following table was depicted as a line chart in the printed material.]
Mighty Mites Fund
(Retail Class) Russell 2000 Index
5/11/98 10,000 10,000
9/30/98 9,700 7,570
9/30/99 13,018 9,014
* Past performance is not predictive of future results.
One of the Fund's goals is to identify small companies, which dominate
rapid growth market niches. LodgeNet Entertainment is a leading provider of
movies, cable and interactive entertainment to the lodging industry. Transaction
Network Services is an innovator in the point of sale processing industry. Leap
Wireless International, the top performer in the portfolio this quarter,
operates domestically and internationally in all aspects of the CDMA
telecommunications arena.
Our investments in the various sub-sectors of the utility industry (water,
electricity and gas) have benefited from accelerating merger activity, with U.S.
based utilities consolidating and European utilities seeking U.S. partners. In
September, SJW Corp., a San Jose, California based water utility, announced that
it had retained an investment banking firm to assist in exploring strategic
alternatives including the possible sale of the company. Artesian Resources and
Pennichuck Corp. are two other water utilities currently held in the portfolio.
In addition to the deal oriented portfolio holdings mentioned above, the
Fund's winners this quarter came from a wide range of industries including
technology (PubliCard), telecommunications (Startec Global Communications, Leap
Wireless International and Hyperion Telecommunications), utilities (Providence
Energy), broadcasting (Granite Broadcasting) and furniture (Mity-Lite). Our
losers were an equally diverse mix including a nutraceutical company (Weider
Nutrition International), a golf club manufacturer (Adams Golf), and an outdoor
advertising and travel company (Bowlin Outdoor Advertising & Travel Centers).
Capital Market Outlook
Westwood Management's capital market outlook continues to be an important
tool for assessing the risk/reward relationship for the varying asset classes in
which we invest. The Capital Markets Model has served us well in the face of
market volatility. We believe the most likely scenario for the next twelve
months will be one of "holding the line," which can be characterized by the
manufacturing sector continuing
8
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to rebound as global demand for exports increases. We believe that consumer
spending will remain healthy, but will moderate to a sustainable pace. Global
economies, including Japan, are expected to show positive growth. Pricing
pressures may increase, but inflation should remain subdued. Lastly, we expect
the Federal Reserve to increase short term interest rates by 25 basis points.
Minimum Initial Investment - $1,000
The Fund's 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.
Internet
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Advisers, Inc., the
Gabelli Westwood Mutual Funds, IRAs, 401(k)s, quarterly reports, closing prices
and other current news. You can send us e-mail at [email protected].
Westwood maintains a website that we encourage you to visit to obtain
further information as well as to share your comments: www.westwoodgroup.com. We
appreciate your confidence in Westwood and our team will continue to work hard
in order to meet your investment objectives.
In Conclusion
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554) or 1-800-WESTWOOD (1-800-937-8966). Please call us during the
business day for further information.
Sincerely,
/s/ Susan M. Byrne
Susan M. Byrne
President and Chief Investment Officer
October 25, 1999
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Nasdaq Symbols Table
- --------------------------------------------------------------------------------
Gabelli Westwood Fund Nasdaq Symbol
--------------------- -------------
Equity - Retail WESWX
Balanced - Retail WEBAX
Intermediate Bond WEIBX
SmallCap Equity WESCX
Realty WESRX
Mighty Mites(SM) WEMMX
Equity - Service WEECX
Balanced - Service WEBCX
9
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The Gabelli Westwood Equity Fund
Portfolio of Investments -- September 30, 1999
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 99.1%
Aerospace - 0.3%
15,888 Lockheed Martin Corp. .......... $ 569,831 $ 519,339
------------ ------------
Automotive - 0.6%
27,800 Lear Corp. + ................... 997,242 978,213
------------ ------------
Broadcasting - 4.3%
110,700 AMFM Inc. + .................... 4,488,624 6,738,863
------------ ------------
Computer Hardware - 6.7%
57,800 Hewlett-Packard Co. ............ 3,996,683 5,317,600
42,600 International Business
Machines Corp. .............. 2,548,282 5,170,575
------------ ------------
6,544,965 10,488,175
------------ ------------
Computer Software & Services - 9.3%
81,500 Electronic Data Systems Corp. .. 4,610,742 4,314,406
161,250 Oracle Corp. + ................. 4,403,629 7,336,875
149,100 Sterling Software Inc. + ....... 2,550,989 2,982,000
------------ ------------
11,565,360 14,633,281
------------ ------------
Diversified Industrial - 3.4%
87,150 Alcoa Inc. ..................... 3,256,431 5,408,747
------------ ------------
Energy & Utilities - 18.6%
138,000 Apache Corp. ................... 3,596,227 5,959,875
74,400 Burlington Resources Inc. ...... 2,651,889 2,734,200
196,500 Conoco Inc., Cl. B ............. 5,167,442 5,379,187
45,606 Devon Energy Corp. ............. 1,568,588 1,889,799
104,400 Florida Progress Corp. ......... 4,224,528 4,828,500
133,700 Reliant Energy Inc. ............ 3,296,771 3,618,256
77,000 Texaco Inc. .................... 4,196,996 4,860,625
------------ ------------
24,702,441 29,270,442
------------ ------------
Entertainment - 5.8%
190,300 Disney (Walt) Co. .............. 5,540,247 4,924,012
70,200 Time Warner Inc. ............... 2,352,569 4,264,650
------------ ------------
7,892,816 9,188,662
------------ ------------
Equipment and Supplies - 0.8%
32,300 Deere & Co. .................... 1,220,857 1,249,606
------------ ------------
Financial Services - 10.8%
108,621 ABN Amro Holding NV, ADR ....... 2,153,047 2,457,550
55,900 CIGNA Corp. .................... 3,279,756 4,346,225
100,275 Citigroup Inc. ................. 2,875,773 4,412,100
67,600 Conseco Inc. ................... 2,122,567 1,305,525
85,100 PNC Bank Corp. ................. 4,271,861 4,483,706
------------ ------------
14,703,004 17,005,106
------------ ------------
Food and Beverage - 4.9%
69,500 Anheuser Busch Companies Inc. .. 3,189,205 4,869,344
158,800 International Home Foods Inc. + 2,788,507 2,779,000
------------ ------------
5,977,712 7,648,344
------------ ------------
Health Care - 5.2%
85,500 Pharmacia & Upjohn Inc. ........ 4,561,642 4,242,937
67,200 SmithKline Beecham plc, ADR .... 3,537,664 3,872,400
------------ ------------
8,099,306 8,115,337
------------ ------------
Hotels and Gaming - 0.9%
59,000 Starwood Hotels & Resorts
Worldwide Inc. .............. 1,525,344 1,316,438
------------ ------------
Real Estate Investment Trusts - 1.6%
35,400 Kimco Realty Corp. ............. 1,367,451 1,265,550
39,600 Vornado Realty Trust ........... 1,494,432 1,287,000
------------ ------------
2,861,883 2,552,550
------------ ------------
Retail - 13.1%
58,000 AnnTaylor Stores Corp. + ....... 1,409,444 2,370,750
90,400 CVS Corp. ...................... 2,943,214 3,689,450
33,500 Federated Department Stores
Inc. + ...................... 1,768,988 1,463,531
130,700 Limited Inc. ................... 4,622,827 4,999,275
71,700 Safeway Inc. + ................. 3,060,734 2,729,081
88,200 Tiffany & Co. .................. 2,630,734 5,286,488
------------ ------------
16,435,941 20,538,575
------------ ------------
Specialty Chemicals - 1.6%
72,700 Monsanto Co. ................... 3,406,827 2,594,481
------------ ------------
Telecommunications - 9.8%
78,500 GTE Corp. ...................... 3,664,608 6,034,688
59,300 MCI Worldcom Inc. + ............ 2,301,925 4,262,187
99,900 SBC Communications Inc. ........ 3,264,539 5,101,144
------------ ------------
9,231,072 15,398,019
------------ ------------
Transportation - 1.4%
58,700 CNF Transportation Inc. ........ 2,238,540 2,186,575
------------ ------------
TOTAL COMMON STOCKS ............ 125,718,196 155,830,753
------------ ------------
TOTAL INVESTMENTS - 99.1% ...... $125,718,196 155,830,753
============
Other Assets and
Liabilities (Net) - 0.9% .... 1,427,470
------------
NET ASSETS - 100.00%
(15,028,115 shares outstanding) $157,258,223
============
- ------------------
For Federal tax purposes:
Aggregate cost ................. $126,072,914
============
Gross unrealized appreciation .. $ 33,904,847
Gross unrealized depreciation .. (4,147,008)
------------
Net unrealized appreciation .... $ 29,757,839
============
+ Non-income producing security.
See accompanying notes to financial statements.
10
<PAGE>
The Gabelli Westwood Balanced Fund
Portfolio of Investments -- September 30, 1999
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 59.9%
Aerospace - 0.8%
41,754 Lockheed Martin Corp. .......... $ 1,809,621 $ 1,364,834
------------ ------------
Automotive - 0.6%
26,000 Lear Corp. + ................... 970,451 914,875
------------ ------------
Broadcasting - 2.1%
59,400 AMFM Inc. + .................... 2,533,272 3,615,975
------------ ------------
Computer Hardware - 3.4%
31,100 Hewlett-Packard Co. ............ 2,153,971 2,861,200
24,400 International Business Machines
Corp. ....................... 1,481,612 2,961,550
------------ ------------
3,635,583 5,822,750
------------ ------------
Computer Software and Services - 5.6%
50,700 Electronic Data Systems Corp. .. 2,858,902 2,683,931
90,500 Oracle Corp. + ................. 2,518,794 4,117,750
133,000 Sterling Software Inc. + ....... 2,860,447 2,660,000
------------ ------------
8,238,143 9,461,681
------------ ------------
Diversified Industrial - 1.8%
50,100 Alcoa Inc. ..................... 1,859,833 3,109,331
------------ ------------
Energy and Utilities - 11.4%
79,200 Apache Corp. ................... 2,051,651 3,420,450
42,400 Burlington Resources Inc. ...... 1,529,680 1,558,200
110,000 Conoco Inc., Cl. B ............. 2,894,954 3,011,250
49,538 Devon Energy Corp. ............. 2,312,288 2,052,731
76,900 Florida Progress Corp. ......... 2,963,900 3,556,625
100,800 Reliant Energy Inc. ............ 2,472,168 2,727,900
46,700 Texaco Inc. .................... 2,600,293 2,947,937
------------ ------------
16,824,934 19,275,093
------------ ------------
Entertainment - 3.2%
106,900 Disney (Walt) Co. .............. 3,094,663 2,766,038
44,100 Time Warner Inc. ............... 1,724,096 2,679,075
------------ ------------
4,818,759 5,445,113
------------ ------------
Equipment and Supplies - 0.9%
37,900 Deere & Co. .................... 1,451,491 1,466,256
------------ ------------
Financial Services - 6.6%
65,644 ABN Amro Holding NV, ADR ....... 1,326,037 1,485,195
31,400 CIGNA Corp. .................... 1,741,516 2,441,350
66,525 Citigroup Inc. ................. 1,968,667 2,927,100
83,100 Conseco Inc. ................... 2,841,345 1,604,869
51,000 PNC Bank Corp. ................. 2,571,242 2,687,063
------------ ------------
10,448,807 11,145,577
------------ ------------
Food and Beverage - 2.8%
42,300 Anheuser Busch Companies Inc. .. 2,060,022 2,963,644
12,700 Great Atlantic & Pacific Tea Co. 460,418 384,969
82,800 International Home Foods Inc. +. 1,453,531 1,449,000
------------ ------------
3,973,971 4,797,613
------------ ------------
Health Care - 3.1%
54,000 Pharmacia & Upjohn Inc. ........ 2,916,908 2,679,750
45,600 SmithKline Beecham plc, ADR .... 2,640,191 2,627,700
------------ ------------
5,557,099 5,307,450
------------ ------------
Hotels and Gaming - 0.7%
55,000 Starwood Hotels & Resorts
Worldwide Inc. .............. 2,045,495 1,227,188
------------ ------------
Real Estate Investment Trust - 1.5%
37,900 Kimco Realty Corp. ............. 1,484,160 1,354,925
36,700 Vornado Realty Trust ........... 1,369,665 1,192,750
------------ ------------
2,853,825 2,547,675
------------ ------------
Retail - 8.0%
36,200 AnnTaylor Stores Corp. + ....... 1,017,793 1,479,675
64,800 CVS Corp. ...................... 2,543,413 2,644,650
28,100 Federated Department Stores
Inc. + 1,547,530 1,227,619
65,200 Limited Inc. ................... 2,319,976 2,493,900
65,600 Safeway Inc. + ................. 2,722,081 2,496,900
50,000 Tiffany & Co. .................. 1,458,872 2,996,875
9,314 Too Inc. + ..................... 135,625 167,070
------------ ------------
11,745,290 13,506,689
------------ ------------
Specialty Chemicals - 1.5%
71,500 Monsanto Co. ................... 3,415,485 2,551,656
------------ ------------
Telecommunications - 5.2%
42,300 GTE Corp. ...................... 2,128,373 3,251,812
36,800 MCI Worldcom Inc. + ............ 1,399,702 2,645,000
57,900 SBC Communications Inc. ........ 1,979,710 2,956,519
------------ ------------
5,507,785 8,853,331
------------ ------------
Transportation - 0.8%
38,200 CNF Transportation Inc. ........ 1,458,145 1,422,950
------------ ------------
TOTAL COMMON STOCKS ............ 89,147,989 101,836,037
------------ ------------
Principal
Amount
------
ASSET BACKED SECURITIES - 3.0%
$ 7,570 EQCC Home Equity Loan Trust
93-3 Cl. A, 5.15%, 09/15/08 .. 7,564 7,362
8,872 EQCC Home Equity 96-1 Cl. A2,
5.82%, 09/15/09 .............. 8,672 8,882
1,680,000 Ford Motor Credit Auto Loan
Master Trust 95-1 Cl. A,
6.50%, 08/15/02 .............. 1,690,172 1,686,972
395,589 GNMA POOL #344946
7.00%, 06/15/23 .............. 402,482 391,210
1,000,000 GS Mortgage Securities Corp. II
97-GL Cl. A2D, 6.94%,
07/13/30 ..................... 1,012,696 984,570
1,000,000 GS Mortgage Securities Corp. II
98-GLII Cl. A2, 6.56%,
04/13/31 ..................... 1,009,820 946,880
1,000,000 Premier Auto Trust 1998-1A4,
5.70%, 10/06/02 .............. 999,925 992,400
------------ ------------
TOTAL ASSET BACKED SECURITIES .. 5,131,331 5,018,276
------------ ------------
CORPORATE BONDS - 10.1%
Automotive - 0.3%
General Motors Acceptance Corp.,
330,000 8.00%, 10/01/99 .............. 330,000 330,000
204,569 6.50%, 04/15/02 .............. 205,056 205,165
------------ ------------
535,056 535,165
------------ ------------
Diversified Industrial - 0.8%
1,455,000 Tyco International Ltd.,
6.38%, 06/15/05 .............. 1,447,159 1,404,119
------------ ------------
Energy and Utilities - 0.5%
785,000 Nipsco Capital Markets Inc.,
7.39%, 04/01/04 .............. 813,887 781,154
------------ ------------
See accompanying notes to financial statements.
11
<PAGE>
The Gabelli Westwood Balanced Fund
Portfolio of Investments (Continued) -- September 30, 1999
================================================================================
Principal
Amount Cost Value
------ ---- -----
CORPORATE BONDS (Continued)
Financial Services - 1.3%
$ 1,445,000 CIGNA Corp.,
8.25%, 01/01/07 .............. $ 1,530,074 $ 1,489,000
850,000 Golden State Holdings,
7.13%, 08/01/05 .............. 842,286 795,030
------------ ------------
2,372,360 2,284,030
------------ ------------
Real Estate Investment Trusts - 2.0%
1,835,000 Archstone Communities Trust,
7.20%, 03/01/13 .............. 1,760,940 1,674,731
Kimco Realty Corp.,
1,500,000 7.46%, 05/29/07 .............. 1,540,331 1,471,980
275,000 6.96%, 07/16/07 .............. 262,157 261,888
------------ ------------
3,563,428 3,408,599
------------ ------------
Retail - 2.4%
1,625,000 Neiman Marcus Group Inc.,
6.65%, 06/01/08 .............. 1,623,257 1,509,706
1,720,000 Staples Inc.,
7.13%, 08/15/07 .............. 1,744,621 1,673,061
870,000 Wal-Mart Stores Inc.,
7.50%, 05/15/04 .............. 934,482 905,148
------------ ------------
4,302,360 4,087,915
------------ ------------
Telecommunications - 2.0%
1,785,000 GTE Corp.,
6.46%, 04/15/08 .............. 1,810,061 1,737,347
1,715,000 MCI Worldcom Inc.,
6.40%, 08/15/05 .............. 1,666,662 1,675,814
------------ ------------
3,476,723 3,413,161
------------ ------------
Transportation - 0.8%
1,400,000 Norfolk Southern Corp.,
6.95%, 05/01/02 .............. 1,424,615 1,405,397
------------ ------------
TOTAL CORPORATE BONDS .......... 17,935,588 17,319,540
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 5.6%
Federal Home Loan Bank - 0.9%
Federal Home Loan Bank,
1,500,000 5.88%, 09/17/01 .............. 1,497,595 1,494,375
------------ ------------
Federal National Mortgage Association - 4.7%
Federal National Mortgage Association,
500,000 4.81%, 12/17/99 .............. 494,405 494,435
2,595,000 5.63%, 05/14/04 .............. 2,512,882 2,519,903
2,000,000 5.75%, 06/15/05 .............. 1,945,552 1,934,280
1,250,000 6.00%, 05/15/08 .............. 1,197,065 1,198,006
1,000,000 6.50%, 04/29/09 .............. 957,590 958,740
896,530 6.00%, 05/01/11 .............. 886,604 865,707
------------ ------------
7,994,098 7,971,071
------------ ------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS ................. 9,491,693 9,465,446
------------ ------------
U.S. GOVERNMENT OBLIGATIONS - 19.4 %
U.S. Treasury Notes,
2,845,000 5.88%, 02/15/00 .............. 2,854,205 2,853,890
4,010,000 6.38%, 05/15/00 .............. 4,025,329 4,037,569
645,000 7.75%, 02/15/01 .............. 662,143 663,342
1,575,000 6.63%, 06/30/01 .............. 1,603,295 1,599,609
1,790,000 5.75%, 06/30/01 .............. 1,798,999 1,792,238
6,300,000 6.63%, 04/30/02 .............. 6,433,178 6,439,784
5,250,000 6.38%, 08/15/02 .............. 5,336,215 5,336,955
3,000,000 6.00%, 08/15/04 .............. 3,001,836 3,030,000
5,000,000 6.13%, 08/15/07 .............. 4,933,985 5,007,814
2,120,000 6.00%, 08/15/09 .............. 2,109,249 2,137,225
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .................. 32,758,434 32,898,426
------------ ------------
TOTAL INVESTMENTS - 98.1% ...... $154,465,035 166,537,725
============
Other Assets and
Liablilities (Net) - 1.9% ... 3,188,292
------------
NET ASSETS - 100.0%
(14,172,501 shares outstanding) $169,726,017
============
- ------------------
For Federal tax purposes:
Aggregate cost ................. $154,805,223
============
Gross unrealized appreciation .. $ 18,115,871
Gross unrealized depreciation .. (6,383,369)
------------
Net unrealized appreciation .... $ 11,732,502
============
+ Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
12
<PAGE>
The Gabelli Westwood Intermediate Bond Fund
Portfolio of Investments -- September 30, 1999
================================================================================
Principal
Amount Cost Value
------ ---- -----
ASSET BACKED SECURITIES - 6.1%
$ 22,709 EQCC Home Equity Loan
Trust 93-3 Cl. A,
5.15%, 09/15/08 ................ $ 22,692 $ 22,086
100,000 Ford Motor Credit Auto Loan
Master Trust 95-1 Cl. A,
6.50%, 08/15/02 ................ 99,901 100,415
34,969 GMAC Grantor Trust 97-A Cl. A,
6.50%, 04/15/02 ................ 35,052 35,071
225,000 GS Mortgage Securities Corp. II
97-GL Cl. A2D,
6.94%, 07/13/30 ................ 231,987 221,528
---------- ----------
TOTAL ASSET BACKED SECURITIES .... 389,632 379,100
---------- ----------
CORPORATE BONDS - 28.9%
Diversified Industrial - 2.3%
150,000 Tyco International Ltd.,
6.38%, 06/15/05 ................ 154,895 144,755
---------- ----------
Energy and Utilities - 1.5%
50,000 Forman Petroleum Corp.,
13.50%, 06/01/04 (a) + ......... 50,551 16,000
75,610 Niagara Mohawk Power Corp.,
7.38%, 07/01/03 ................ 76,996 75,919
---------- ----------
127,547 91,919
---------- ----------
Financial Services - 9.7%
100,000 CIGNA Corp.,
8.25%, 01/01/07 ................ 104,560 103,045
150,000 Conseco Finance Trust III Inc.,
8.80%, 04/01/27 ................ 152,576 132,170
150,000 Golden State Holdings,
7.13%, 08/01/05 ................ 149,493 140,299
200,000 International Bank for
Reconstruction & Development,
8.63%, 10/15/16 ................ 259,771 228,134
---------- ----------
666,400 603,648
---------- ----------
Real Estate Investment Trusts - 3.4%
150,000 Archstone Communities Trust,
7.20%, 03/01/13 ................ 144,354 136,899
75,000 Kimco Realty Corp.,
7.46%, 05/29/07 ................ 77,881 73,599
---------- ----------
222,235 210,498
---------- ----------
Retail - 7.9%
120,000 Neiman Marcus Group Inc.,
6.65%, 06/01/08 ............... 119,871 111,486
175,000 Staples Inc.,
7.13%, 08/15/07 ............... 174,706 170,224
200,000 Wal-Mart Stores Inc.,
7.50%, 05/15/04 ............... 218,619 208,080
---------- ----------
513,196 489,790
---------- ----------
Specialty Chemicals - 0.8%
50,000 du Pont de Nemours (E.I.) and Co.,
9.15%, 04/15/00 ............ 50,592 50,892
---------- ----------
Telecommunications - 3.3%
50,000 GTE Corp.,
6.46%, 04/15/08 ............... 50,702 48,665
160,000 MCI Worldcom Inc.,
6.40%, 08/15/05 ............... 155,490 156,344
---------- ----------
206,192 205,009
---------- ----------
TOTAL CORPORATE BONDS ............ $1,941,057 $1,796,511
---------- ----------
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 15.0%
Federal Home Loan Bank - 4.4%
275,000 Federal Home Loan Bank,
5.88%, 09/17/01 ................ 274,560 273,969
---------- ----------
Freddie Mac - 3.7%
225,000 Federal Home Loan Mortgage Corp.,
7.10%, 04/10/07 ................ 236,918 231,797
---------- ----------
Federal National Mortgage Association - 6.9%
135,686 FNMA, Pool #344800,
6.00%, 05/01/11 ................ 134,184 131,021
300,000 FNMA, Discount Note, 10/15/99 .... 299,410 299,410
---------- ----------
433,594 430,431
---------- ----------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS ................... 945,072 936,197
---------- ----------
U.S. GOVERNMENT OBLIGATIONS - 48.2%
U.S. Treasury Bonds - 18.5%
U.S. Treasury Bonds,
70,000 7.25%, 05/15/16 ................ 78,568 75,687
1,010,000 6.13%, 11/15/27 ................ 1,045,995 981,594
100,000 5.50%, 08/15/28 ................ 100,917 89,531
---------- ----------
1,225,480 1,146,812
---------- ----------
U.S. Treasury Notes - 29.7%
U.S. Treasury Notes,
250,000 5.88%, 02/15/00 ................ 250,688 250,781
175,000 5.75%, 11/15/00 ................ 177,806 175,602
680,000 6.25%, 06/30/02 ................ 698,656 689,138
445,000 6.25%, 02/15/03 ................ 458,737 450,980
100,000 5.50%, 05/31/03 ................ 102,944 99,000
100,000 5.25%, 05/15/04 ................ 98,277 97,750
80,000 6.00%, 08/15/09 ................ 79,690 80,650
---------- ----------
1,866,798 1,843,901
---------- ----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ................... 3,092,278 2,990,713
---------- ----------
Shares
------
WARRANTS - 0.0%
Energy and Utilities - 0.0%
50 Forman Petroleum Corp.,
13.50%, 06/01/04 +(a) .......... 1 1
---------- ----------
TOTAL INVESTMENTS - 98.2% ........ $6,368,040 6,102,522
==========
Other Assets and
Liabilities (Net) - 1.8% ...... 111,446
----------
NET ASSETS - 100.0%
(621,770 shares outstanding) ... $6,213,968
==========
- -------------
For Federal tax purposes:
Aggregate cost ................... $6,370,970
==========
Gross unrealized appreciation .... $ 2,738
Gross unrealized depreciation .... (271,186)
----------
Net unrealized depreciation ...... $ (268,448)
==========
(a) Security fair valued as determined by the Board of Trustees.
+ Non-income producing security.
See accompanying notes to financial statements.
13
<PAGE>
The Gabelli Westwood SmallCap Equity Fund
Portfolio of Investments -- September 30, 1999
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 94.4%
Automotive: Parts and Accessories - 2.0%
16,500 Dura Automotive Systems Inc. + .. $ 452,975 $ 397,031
----------- -----------
Business Services - 9.4%
10,600 NCO Group Inc. + ................ 385,240 498,200
12,900 Profit Recovery Group
International Inc. + .......... 287,778 575,663
21,800 Whittman-Hart Inc. + ............ 516,399 845,431
----------- -----------
1,189,417 1,919,294
----------- -----------
Communications Equipment - 6.2%
13,800 Antec Corp. + ................... 361,407 733,125
12,650 Dycom Industries Inc. + ......... 396,979 533,672
----------- -----------
758,386 1,266,797
----------- -----------
Computer Software and Services - 15.4%
8,400 AppNet Inc. + ................... 154,664 229,950
7,000 Business Objects SA, ADR + ...... 295,746 413,000
12,900 CBT Group plc, ADR + ............ 296,335 317,662
21,000 Deltek Systems Inc. + ........... 286,351 343,875
14,700 Digital River Inc. + ............ 323,827 319,725
12,300 Fundtech Ltd. + ................. 263,950 274,444
7,300 Kronos Inc. + ................... 194,624 267,819
4,900 Micromuse Inc. + ................ 150,958 314,825
5,000 Pegasus Systems Inc. + .......... 175,021 187,500
6,000 Stamps.com Inc. + ............... 198,594 208,500
3,800 Verity Inc. + ................... 65,986 261,487
----------- -----------
2,406,056 3,138,787
----------- -----------
Electronics - 14.3%
4,800 Applied Micro Circuits Corp. + .. 55,494 273,600
10,300 Brooks Automation Inc. + ........ 211,386 180,894
8,700 Credence Systems Corp. + ........ 346,277 390,412
14,200 Galileo Technology Ltd. + ....... 228,302 355,000
7,300 Lam Research Corp. + ............ 190,440 445,300
6,500 PRI Automation Inc. + ........... 219,381 234,812
18,600 S3 Inc. + ....................... 211,970 194,138
9,200 Semtech Corp. + ................. 138,518 336,950
5,950 TranSwitch Corp. + .............. 84,891 339,150
2,600 TriQuint Semiconductor Inc. + ... 54,479 148,688
----------- -----------
1,741,138 2,898,944
----------- -----------
Energy and Utilities - 5.4%
15,276 Devon Energy Corp. .............. 437,484 632,999
18,100 Gulf Indonesia Resources Ltd. + . 166,880 182,131
9,400 Piedmont Natural Gas Co. ........ 311,653 284,938
----------- -----------
916,017 1,100,068
----------- -----------
Entertainment - 3.7%
24,700 Cinar Films Inc. + .............. 530,547 747,175
----------- -----------
Equipment and Supplies - 1.0%
9,700 Mobile Mini Inc. + .............. 134,431 212,187
----------- -----------
Financial Services - 2.3%
7,800 Investment Technology Group Inc. 210,596 179,400
16,400 Southwest Bancorp of Texas Inc. + 294,924 285,975
----------- -----------
505,520 465,375
----------- -----------
Food and Beverage - 5.4%
19,500 CEC Entertainment Inc. + ........ 310,974 699,563
16,300 Foodmaker Inc. + ................ 400,430 406,481
----------- -----------
711,404 1,106,044
----------- -----------
Health Care - 17.7%
5,400 Advance Paradigm Inc. + ......... 276,880 295,650
11,700 Cephalon Inc. + ................. 194,824 210,234
11,900 Cytyc Corp. + ................... 183,846 460,381
11,900 InfoCure Corp. + ................ 255,250 224,613
9,900 King Pharmaceuticals Inc. + ..... 214,026 346,500
9,700 MedQuist Inc. + ................. 314,988 324,344
5,800 MiniMed Inc. + .................. 242,897 569,850
8,000 Protein Design Labs Inc. ........ 214,864 289,000
6,800 Wesley Jessen VisionCare Inc. + . 181,554 212,075
11,750 Xomed Surgical Products Inc. + .. 488,610 669,750
----------- -----------
2,567,739 3,602,397
----------- -----------
Metals and Mining - 0.6%
4,600 Stillwater Mining Co. + ......... 122,161 123,625
----------- -----------
Real Estate Investment Trusts - 1.7%
10,600 Bedford Property Investors Inc. . 186,303 178,875
6,000 Urban Shopping Centers Inc. ..... 193,507 174,000
----------- -----------
379,810 352,875
----------- -----------
Retail - 9.3%
19,700 Ames Department Stores Inc. + ... 537,876 627,938
10,100 AnnTaylor Stores Corp. + ........ 294,430 412,837
9,500 Chico's FAS Inc. + .............. 221,222 258,875
7,600 Children's Place Retail Stores
Inc. + ....................... 223,503 202,350
8,150 Cost Plus Inc. + ................ 216,470 395,275
----------- -----------
1,493,501 1,897,275
----------- -----------
TOTAL COMMON STOCKS ............. 13,909,102 19,227,874
----------- -----------
TOTAL INVESTMENTS - 94.4% ....... $13,909,102 19,227,874
===========
Other Assets and
Liabilities (Net) - 5.6% ..... 1,133,193
-----------
NET ASSETS - 100.0%
(1,145,664 shares outstanding) $20,361,067
===========
- -----------------
For Federal tax purposes:
Aggregate cost .................. $13,915,954
===========
Gross unrealized appreciation ... $ 5,565,876
Gross unrealized depreciation ... (253,956)
-----------
Net unrealized appreciation ..... $ 5,311,920
===========
+ Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
14
<PAGE>
The Gabelli Westwood Realty Fund
Portfolio of Investments -- September 30, 1999
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 98.4%
Real Estate Investment Trusts - 98.4%
Apartments - 19.1%
1,500 Apartment Investment &
Management Co., Cl. A .......... $ 54,854 $ 57,375
2,700 Archstone Communities Trust ...... 59,965 52,144
1,900 Avalon Bay Communities Inc. ...... 71,298 64,362
1,100 BRE Properties Inc., Cl. A ....... 27,827 26,331
700 Camden Property Trust ............ 18,299 18,812
1,700 Equity Residential Properties
Trust .......................... 83,097 72,038
500 Essex Property Trust Inc. ........ 15,241 17,469
800 Post Properties Inc. ............. 29,717 31,450
---------- ----------
360,298 339,981
---------- ----------
Diversified Property - 17.1%
1,400 Bedford Property Investors Inc. .. 26,280 23,625
2,800 Catellus Developement Corp. + .... 46,655 32,900
1,000 Colonial Properties Trust ........ 29,014 26,750
1,900 Crescent Real Estate Equities Co. 54,035 34,200
3,166 Duke Realty Investments Inc. ..... 73,464 61,737
1,300 Liberty Property Trust ........... 30,958 29,494
2,000 Meditrust Corp. .................. 26,146 17,000
800 Spieker Properties Inc. .......... 30,435 27,750
1,600 Vornado Realty Trust ............. 66,926 52,000
---------- ----------
383,913 305,456
---------- ----------
Financial Services - 2.1%
1,600 Franchise Finance Corp. .......... 36,411 37,400
---------- ----------
Health Care - 3.0%
1,700 Health Care REIT Inc. ............ 43,582 34,000
1,000 Healthcare Realty Trust Inc. ..... 22,426 18,688
---------- ----------
66,008 52,688
---------- ----------
Hotels - 6.5%
800 FelCor Lodging Trust Inc. ........ 23,592 14,000
3,700 Host Marriott Corp. .............. 43,563 35,150
2,225 Meristar Hospitality Corp. ....... 56,926 33,931
1,500 Starwood Hotels & Resorts
Worldwide Inc. ................. 52,549 33,469
---------- ----------
176,630 116,550
---------- ----------
Industrial Property - 6.4%
800 CenterPoint Properties Trust ..... 27,494 26,450
1,600 First Industrial Realty Trust Inc. 49,830 39,600
2,600 ProLogis Trust ................... 58,900 49,075
---------- ----------
136,224 115,125
---------- ----------
Manufactured Homes - 1.6%
1,200 Manufactured Home
Communities Inc. ............... 30,794 28,050
---------- ----------
Office Property - 18.4%
500 Alexandria Real Estate Equities
Inc. ........................... 14,340 14,719
1,700 Arden Realty Inc. ................ 44,268 36,975
1,700 Boston Properties Inc. ........... 56,518 52,169
1,400 Brandywine Realty Trust .......... 27,001 22,750
3,784 Equity Office Properties Trust ... 109,064 87,978
1,500 Highwoods Properties Inc. ........ 46,775 38,812
1,400 Mack-Cali Realty Corp. ........... 42,033 37,537
1,800 SL Green Realty Corp. ............ 45,699 36,900
---------- ----------
385,698 327,840
---------- ----------
Public Storage - 4.7%
2,600 Public Storage Inc. .............. 77,961 65,488
800 Sovran Self Storage Inc. ......... 19,484 18,200
---------- ----------
97,445 83,688
---------- ----------
Shopping Centers - 19.5%
1,700 Burnham Pacific Properties Inc. .. 23,009 17,956
2,600 Developers Diversified Realty
Corp. .......................... 50,164 36,400
1,200 General Growth Properties Inc. ... 43,926 37,800
1,750 JDN Realty Corp. ................. 37,695 35,875
1,500 Kimco Realty Corp. ............... 53,945 53,625
800 Macerich Co. ..................... 21,927 18,500
1,900 Mills Corp. ...................... 45,914 33,844
1,500 Regency Realty Corp. ............. 33,665 31,500
2,800 Simon Property Group Inc. ........ 86,492 62,825
700 Urban Shopping Centers Inc. ...... 22,359 20,300
---------- ----------
419,096 348,625
---------- ----------
TOTAL COMMON STOCKS .............. 2,092,517 1,755,403
---------- ----------
TOTAL INVESTMENTS - 98.4% ........ $2,092,517 1,755,403
==========
Other Assets and
Liabilities (Net) - 1.6% ....... 28,458
----------
NET ASSETS - 100.0%
(234,374 shares outstanding) ... $1,783,861
==========
- ----------------
For Federal tax purposes:
Aggregate cost ................... $2,094,626
==========
Gross unrealized appreciation .... $ 8,363
Gross unrealized depreciation .... (347,586)
----------
Net unrealized depreciation ...... $ (339,223)
==========
+ Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
15
<PAGE>
The Gabelli Westwood Mighty Mites(SM) Fund
Portfolio of Investments -- September 30, 1999
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 85.6%
Aviation: Parts and Services - 1.6%
12,000 Aviall Inc. + ................... $ 179,412 $ 123,000
3,500 Kaman Corp., Cl. A .............. 60,690 44,625
----------- -----------
240,102 167,625
----------- -----------
Broadcasting - 4.1%
12,600 Granite Broadcasting Corp. + .... 90,155 140,175
7,200 Gray Communications
Systems Inc., Cl. B ........... 95,972 103,500
7,000 Salem Communications Corp.,
Cl. A + ....................... 163,250 178,500
----------- -----------
349,377 422,175
----------- -----------
Building and Construction - 0.5%
10 Boston Sand & Gravel Co. + ...... 3,600 3,520
7,000 Nobility Homes Inc. ............. 51,625 51,625
----------- -----------
55,225 55,145
----------- -----------
Business Services - 4.1%
4,000 Berlitz International Inc. + .... 73,825 84,250
2,000 Lady Baltimore Foods, Cl. A + ... 122,125 123,500
6,500 Learning Tree International
Inc. + ........................ 78,125 107,656
6,000 Nashua Corp. + .................. 86,958 53,250
2,200 Temco Service Industries Inc. + . 53,450 49,775
----------- -----------
414,483 418,431
----------- -----------
Cable - 1.6%
13,500 Mercom Inc. + ................... 153,360 162,000
----------- -----------
Communications Equipment - 1.7%
15,000 Allen Telecom Inc. + ............ 90,375 146,250
6,000 Telesoft Corp. + ................ 32,287 25,500
1,000 Williams Controls Inc. + ........ 2,625 2,469
----------- -----------
125,287 174,219
----------- -----------
Computer Software and Services - 2.4%
25,000 Oak Technology Inc. + ........... 90,250 111,719
3,500 Transaction Network Services
Inc. + ........................ 102,256 137,375
----------- -----------
192,506 249,094
----------- -----------
Consumer Products - 2.0%
1,000 Acorn Products Inc. + ........... 4,125 3,031
1,000 Adams Golf Inc. + ............... 7,313 3,063
8,000 General Cigar Holdings Inc.,
Cl. A + ....................... 70,525 54,000
2,000 General Housewares Corp. ........ 26,743 56,125
1,000 National Presto Industries Inc. . 39,456 38,625
15,700 Weider Nutrition International
Inc. .......................... 82,385 50,044
----------- -----------
230,547 204,888
----------- -----------
Consumer Services - 0.7%
13,800 Bowlin Outdoor Advertising &
Travel Centers Inc. + ......... 94,628 72,450
----------- -----------
Diversified Industrial - 3.4%
3,600 Kreisler Manufacturing Corp. + .. 17,675 29,700
3,200 Matthews International Corp.,
Cl. A ......................... 89,518 96,400
17,000 PubliCard Inc. + ................ 28,775 144,500
3,200 Vallen Corp. + .................. 58,175 46,400
3,000 WHX Corp. + ..................... 38,406 30,000
----------- -----------
232,549 347,000
----------- -----------
Energy and Utilities - 16.4%
3,000 Artesian Resources Corp. ........ 69,031 75,000
6,000 Bangor Hydro-Electric Co. ....... 90,613 99,000
5,500 Cascade Natural Gas Corp. ....... 97,419 98,312
500 Connecticut Water Services Inc. . 15,500 14,750
3,000 Delta Natural Gas Co. Inc. ...... 53,675 43,875
2,000 Dominguez Services Corp. ........ 61,330 56,125
10,000 El Paso Electric Co. + .......... 83,536 90,000
4,000 Fall River Gas Co. .............. 64,450 83,750
7,500 Florida Public Utilities Co. .... 113,048 137,812
10,000 Home-Stake Oil & Gas Co. ........ 52,531 44,375
5,000 Maine Public Service Co. ........ 90,056 90,000
3,300 Pennichuck Corp. ................ 73,850 80,025
2,500 Petroleum Geo-Services ASA + .... 38,225 47,656
1,000 Piedmont Natural Gas Co. ........ 33,237 30,312
5,000 Providence Energy Corp. ......... 108,781 138,750
4,500 SEMCO Energy Inc. ............... 69,187 62,719
1,900 SJW Corp. ....................... 121,745 171,712
3,500 St. Joseph Light & Power Co. .... 65,244 72,187
4,300 Unitil Corp. .................... 103,521 104,544
9,500 Valley Resources Inc. ........... 122,013 129,437
----------- -----------
1,526,992 1,670,341
----------- -----------
Entertainment - 4.3%
4,000 Bowl America Inc., Cl. A ........ 28,325 27,500
3,506 Fair Grounds Corp. + ............ 100,656 125,559
2,000 Fisher Companies Inc. ........... 136,870 119,000
3,000 GC Companies + .................. 97,650 90,000
6,000 LodgeNet Entertainment Corp. .... 66,151 78,000
----------- -----------
429,652 440,059
----------- -----------
Equipment and Supplies - 3.5%
7,000 Avalon Holdings Corp., Cl. A + .. 46,881 39,375
20,000 Core Materials Corp. ............ 61,000 37,500
4,500 Eastern Co. ..................... 76,419 73,688
6,700 Fiberstars Inc. + ............... 33,800 29,312
11,000 Raytech Corp. + ................. 49,444 44,000
9,000 SL Industries Inc. .............. 113,012 128,250
----------- -----------
380,556 352,125
----------- -----------
Financial Services - 8.0%
600 Berkshire Bancorp Inc. .......... 21,900 22,800
3,000 Boston Private Financial
Holdings Inc. + ............... 24,062 26,813
7,000 Crazy Woman Creek Bancorp Inc. .. 98,212 85,095
3,800 Creditrust Corp. + .............. 97,313 85,263
1,000 Danielson Holding Corp. + ....... 5,050 6,000
5,900 Doral Financial Corp. ........... 99,921 78,912
6,000 East West Bancorp Inc. .......... 61,375 71,250
1,700 First Mariner Bancorp Inc. + .... 19,431 16,787
6,000 NMBT Corp. ...................... 104,513 90,000
3,600 Reliance Bancorp Inc. ........... 98,219 135,450
5,500 Roslyn Bancorp Inc. ............. 98,825 98,313
6,452 State Bancorp Inc. .............. 111,313 97,183
----------- -----------
840,134 813,866
----------- -----------
See accompanying notes to financial statements.
16
<PAGE>
The Gabelli Westwood Mighty Mites(SM) Fund
Portfolio of Investments (Continued) -- September 30, 1999
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS (Continued)
Food and Beverage - 3.8%
7,000 Celestial Seasonings Inc. + ..... $ 131,899 $ 134,750
6,800 Horizon Organic Holding Corp. + . 93,263 75,650
4,500 ICH Corp. + ..................... 62,800 56,531
1,000 Sterling Sugars Inc. + .......... 7,625 7,125
12,500 Twinlab Corp. + ................. 108,668 110,938
----------- -----------
404,255 384,994
----------- -----------
Health Care - 3.5%
7,500 Biosource International Inc. + .. 30,219 30,469
9,500 Hanger Orthopedic Group Inc. + .. 134,406 137,750
1,200 Inamed Corp. + .................. 13,200 35,400
4,000 Matrix Pharmaceutical Inc. + .... 12,125 22,750
11,100 Span-America Medical Systems Inc. 59,175 38,850
6,500 Young Innovations Inc. + ........ 85,313 90,187
----------- -----------
334,438 355,406
----------- -----------
Home and Office Furnishings - 1.3%
7,500 Mity-Lite Inc. + ................ 82,438 135,000
----------- -----------
Publishing - 0.2%
6,000 Individual Investor Group Inc. + 21,290 19,500
----------- -----------
Real Estate - 2.2%
2,500 Blue Ridge Real Estate Co. + .... 28,650 23,750
1,500 Bresler & Reiner Inc. + ......... 43,725 42,000
51 Case Pomeroy & Co. Inc., Cl. B .. 64,525 51,510
5,500 Gyrodyne Company Of America
Inc. + ........................ 95,700 110,344
----------- -----------
232,600 227,604
----------- -----------
Retail - 5.1%
2,000 Barnett Inc. + .................. 18,375 18,375
1,053 Bozzuto's Inc. + ................ 42,120 39,224
3,500 First Cash Financial Services
Inc. + ........................ 36,081 38,500
5,000 Lillian Vernon Corp. ............ 77,750 62,500
4,000 Marsh Supermarkets Inc. ......... 63,662 63,750
42,000 Scheib (Earl) Inc. + ............ 231,225 115,500
5,500 Schultz Sav-O Stores Inc. ....... 87,875 86,625
3,000 Star Struck Ltd. + .............. 11,400 13,875
6,300 Village Super Market Inc.,
Cl. A + ....................... 91,063 85,838
----------- -----------
659,551 524,187
----------- -----------
Specialty Chemicals - 3.5%
14,000 Material Sciences Corp. + ....... 136,481 186,375
5,600 Sybron Chemicals Inc. + ......... 90,674 85,400
8,000 Tetra Technologies Inc. + ....... 76,463 81,500
----------- -----------
303,618 353,275
----------- -----------
Telecommunications - 7.4%
2,000 Conestoga Enterprises Inc. ...... 40,000 40,125
2,250 CoreComm Ltd. + ................. 16,935 74,109
5,500 Electric Lightwave Inc., Cl. A + 82,750 72,875
7,000 GST Telecommunications Inc.+ .... 97,750 49,219
50 Horizon Telecom Inc. + .......... 22,750 22,750
7,000 Hyperion Telecommunications
Inc., Cl. A + ................. 96,812 173,688
500 Lexcom Telephone Co. ............ 20,000 20,000
1,192 New Ulm Telecom Inc. + .......... 38,740 28,608
3,900 Shenandoah Telecommunications
Co. ........................... 90,869 85,800
9,000 Startec Global Communications
Corp. + ....................... 75,685 123,750
2,000 Viatel Inc. + ................... 26,000 59,125
----------- -----------
608,291 750,049
----------- -----------
Textiles - 0.2%
20,000 Carlyle Industries Inc. + ....... 20,350 16,250
----------- -----------
Transportation - 0.6%
5,500 International Shipholding Corp. + 76,725 62,562
----------- -----------
Wireless Communications - 3.5%
15,000 Leap Wireless International
Inc. + ........................ 90,000 352,500
----------- -----------
TOTAL COMMON STOCKS ............. 8,098,954 8,730,745
----------- -----------
Principal
Amount
------
U.S. GOVERNMENT OBLIGATIONS - 10.7%
$ 1,100,000 U.S. Treasury Bills,
4.56% to 4.79% ++,
due 10/07/99 to 12/02/99 ...... 1,094,548 1,094,510
----------- -----------
TOTAL INVESTMENTS - 96.3% ....... $ 9,193,502 9,825,255
===========
Other Assets and
Liabilities (Net) - 3.7% ...... 380,119
-----------
NET ASSETS - 100.0%
(790,520 shares outstanding) .. $10,205,374
===========
- ----------------
For Federal tax purposes:
Aggregate cost .................. $ 9,195,096
===========
Gross unrealized appreciation ... $ 1,329,457
Gross unrealized depreciation ... (699,298)
-----------
Net unrealized appreciation ..... $ 630,159
===========
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
17
<PAGE>
The Gabelli Westwood Funds
Statement of Assets and Liabilities
September 30, 1999
================================================================================
<TABLE>
<CAPTION>
Mighty
Equity Balanced Intermediate SmallCap Realty Mites(SM)
Fund Fund Bond Fund Equity Fund Fund Fund
------------ ------------ ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value
(Cost $125,718,196, $154,465,035,
$6,368,040, $13,909,102, $2,092,517
and $9,193,502, respectively) ........ $155,830,753 $166,537,725 $6,102,522 $19,227,874 $1,755,403 $ 9,825,255
Cash ..................................... 22,667,585 3,108,378 42,053 357,027 -- 515
Dividends and interest receivable ........ 166,035 1,108,543 103,326 7,273 13,330 8,921
Receivable for Fund shares sold .......... 98,298 424,718 -- 146,761 30 54,700
Receivable for investments sold .......... 3,587,009 264,857 -- 804,212 98,866 386,296
Receivable from advisor .................. -- -- -- -- 1,096 --
Deferred organizational expense .......... -- -- -- 6,329 5,303 34,310
------------ ------------ ---------- ----------- ---------- -----------
Total Assets ......................... 182,349,680 171,444,221 6,247,901 20,549,476 1,874,028 10,309,997
------------ ------------ ---------- ----------- ---------- -----------
Liabilities:
Payable to custodian ..................... -- -- -- -- 37,013 --
Dividends payable ........................ -- -- 1,816 -- -- --
Payable for Fund shares redeemed ......... 24,800,904 291,916 -- -- -- --
Payable for investments purchased ........ -- 1,213,666 -- 131,712 35,000 77,330
Payable for investment advisory fees ..... 154,229 106,354 5,003 34,307 -- 2,697
Payable for distribution fees ............ 39,029 37,429 1,272 4,056 389 2,074
Other accrued expenses ................... 97,295 68,839 25,842 18,334 17,765 22,522
------------ ------------ ---------- ----------- ---------- -----------
Total Liabilities .................... 25,091,457 1,718,204 33,933 188,409 90,167 104,623
------------ ------------ ---------- ----------- ---------- -----------
Net Assets ........................... $157,258,223 $169,726,017 $6,213,968 $20,361,067 $1,783,861 $10,205,374
============ ============ ========== =========== ========== ===========
Net Assets consist of:
Share of beneficial interest, at par value $ 15,028 $ 14,173 $ 622 $ 1,146 $ 234 $ 791
Additional paid-in capital ............... 112,302,538 148,232,884 6,850,866 14,394,808 2,345,080 8,343,270
Accumulated net investment income ........ 304,988 28,797 -- -- -- 60,257
Accumulated (distributions in excess of)
net realized gain on investments ..... 14,523,112 9,377,473 (372,002) 646,341 (224,339) 1,169,303
Net unrealized appreciation (depreciation)
on investments ....................... 30,112,557 12,072,690 (265,518) 5,318,772 (337,114) 631,753
------------ ------------ ---------- ----------- ---------- -----------
Total Net Assets ..................... $157,258,223 $169,726,017 $6,213,968 $20,361,067 $1,783,861 $10,205,374
============ ============ ========== =========== ========== ===========
Shares of Beneficial Interest:
Retail Class:
Shares of beneficial interest
outstanding ($0.001 par value) ....... 14,815,730 13,387,989 621,770 1,145,664 234,374 790,520
============ ============ ========== =========== ========== ===========
Net Asset Value, offering and redemption
price per share ...................... $10.46 $11.98 $9.99 $17.77 $7.61 $12.91
====== ====== ===== ====== ===== ======
Service Class:
Shares of beneficial interest
outstanding ($0.001 par value) ...... 212,385 784,512
======= =======
Net Asset Value, offering and redemption
price per share ...................... $10.46 $11.95
====== ======
Maximum sales charge ..................... 4.00% 4.00%
====== ======
Maximum offering price per share
(NAV / 0.96, based on maximum
sales charge of 4.00% of the
offering price at September 30, 1999) $10.90 $12.45
====== ======
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
The Gabelli Westwood Funds
Statement of Operations
For the Year Ended September 30, 1999
================================================================================
<TABLE>
<CAPTION>
Mighty
Equity Balanced Intermediate SmallCap Realty Mites(SM)
Fund Fund Bond Fund Equity Fund Fund Fund
----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends ............................. $ 3,228,944 $ 1,729,222 $ -- $ 98,442 $ 112,015 $ 78,336
Interest .............................. 287,468 3,620,898 415,387 -- -- 70,979
----------- ----------- ---------- ----------- ----------- -----------
Total Investment Income ........... 3,516,412 5,350,120 415,387 98,442 112,015 149,315
----------- ----------- ---------- ----------- ----------- -----------
Expenses:
Investment advisory fees .............. 1,920,350 1,247,960 42,858 159,566 19,298 77,008
Distribution fees -- Retail Class ..... 475,152 388,540 17,817 39,853 4,810 19,261
Distribution fees -- Service Class .... 12,096 54,878 -- -- -- --
Legal and audit fees .................. 48,796 41,604 17,255 20,545 18,888 23,871
Custodian fees ........................ 93,027 82,720 9,140 20,104 8,259 14,852
Shareholder services fees ............. 117,360 67,255 10,166 15,462 3,452 17,340
Registration fees ..................... 30,555 28,644 13,721 10,306 10,281 11,083
Shareholder report expenses ........... 57,161 33,514 1,544 2,475 974 1,903
Organizational expenses ............... -- -- -- 2,515 1,767 9,497
Miscellaneous expenses ................ 119,560 82,103 4,266 4,420 3,071 3,940
----------- ----------- ---------- ----------- ----------- -----------
Total Expenses .................... 2,874,057 2,027,218 116,767 275,246 70,800 178,755
----------- ----------- ---------- ----------- ----------- -----------
Less:
Expense reimbursements ............ -- -- (41,731) (16,004) (39,976) (100,915)
Custodian fee credits ............. (89,306) (81,771) (3,608) (20,104) (1,944) (826)
----------- ----------- ---------- ----------- ----------- -----------
Total Net Expenses ................ 2,784,751 1,945,447 71,428 239,138 28,880 77,014
----------- ----------- ---------- ----------- ----------- -----------
Net Investment Income (Loss) .............. 731,661 3,404,673 343,959 (140,696) 83,135 72,301
----------- ----------- ---------- ----------- ----------- -----------
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized gain (loss) on investments 15,111,162 10,229,060 (12,165) 913,091 (205,910) 1,169,303
Net change in unrealized appreciation
(depreciation) on investments ..... 18,690,261 3,959,648 (504,721) 6,427,992 8,039 891,554
----------- ----------- ---------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments .................... 33,801,423 14,188,708 (516,886) 7,341,083 (197,871) 2,060,857
----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations ............. $34,533,084 $17,593,381 $ (172,927) $ 7,200,387 $ (114,736) $ 2,133,158
=========== =========== ========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Equity Fund Balanced Fund
----------- -------------
For the Year Ended September 30, For the Year Ended September 30,
-------------------------------- --------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ...................................... $ 731,661 $ 1,284,508 $ 3,404,673 $ 2,836,195
Net realized gain on investment transactions ............... 15,111,162 4,550,079 10,229,060 1,192,217
Net change in unrealized appreciation(depreciation)
on investments ......................................... 18,690,261 (9,210,035) 3,959,648 (2,657,020)
------------- ------------- ------------- -------------
Net increase(decrease) in net assets
resulting from operations ............................ 34,533,084 (3,375,448) 17,593,381 1,371,392
------------- ------------- ------------- -------------
Distributions to shareholders:
Net investment income
Retail Class ........................................... (1,202,243) (1,016,825) (3,227,275) (2,450,244)
Service Class .......................................... (6,778) (9,795) (192,481) (321,577)
------------- ------------- ------------- -------------
(1,209,021) (1,026,620) (3,419,756) (2,771,821)
------------- ------------- ------------- -------------
Net realized gain on investment transactions
Retail Class ........................................... (4,421,909) (5,772,109) (1,447,392) (3,804,112)
Service Class .......................................... (55,551) (63,562) (121,230) (795,071)
------------- ------------- ------------- -------------
(4,477,460) (5,835,671) (1,568,622) (4,599,183)
------------- ------------- ------------- -------------
Total distributions to shareholders .................... (5,686,481) (6,862,291) (4,988,378) (7,371,004)
------------- ------------- ------------- -------------
Shares of beneficial interest transactions:
Proceeds from shares issued
Retail Class ........................................... 47,329,910 121,352,169 68,922,349 86,594,633
Service Class .......................................... 419,120 2,561,265 1,028,954 5,665,274
------------- ------------- ------------- -------------
47,749,030 123,913,434 69,951,303 92,259,907
------------- ------------- ------------- -------------
Proceeds from reinvestment of dividends
Retail Class ........................................... 5,409,705 6,623,726 4,487,667 6,031,341
Service Class .......................................... 60,421 72,059 253,939 990,631
------------- ------------- ------------- -------------
5,470,126 6,695,785 4,741,606 7,021,972
------------- ------------- ------------- -------------
Cost of shares redeemed
Retail Class ........................................... (101,553,974) (71,156,328) (52,811,686) (26,091,459)
Service Class .......................................... (1,112,809) (3,390,442) (7,566,829) (5,862,232)
------------- ------------- ------------- -------------
(102,666,783) (74,546,770) (60,378,515) (31,953,691)
------------- ------------- ------------- -------------
Net increase(decrease) in net assets from
shares of beneficial interest transactions ........... (49,447,627) 56,062,449 14,314,394 67,328,188
------------- ------------- ------------- -------------
Net increase (decrease) in net assets .................. (20,601,024) 45,824,710 26,919,397 61,328,576
Net Assets:
Beginning of period ........................................ 177,859,247 132,034,537 142,806,620 81,478,044
------------- ------------- ------------- -------------
End of period .............................................. $ 157,258,223 $ 177,859,247 $ 169,726,017 $ 142,806,620
============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets (Continued)
================================================================================
<TABLE>
<CAPTION>
Intermediate Bond Fund SmallCap Equity Fund
---------------------- --------------------
For the Year Ended September 30, For the Year Ended September 30,
-------------------------------- --------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) ............................... $ 343,959 $ 354,799 $ (140,696) $ (88,215)
Net realized gain (loss) on investment transactions ........ (12,165) 128,342 913,091 3,145
Net change in unrealized appreciation
(depreciation) on investments .......................... (504,721) 160,804 6,427,992 (2,467,027)
------------ ------------ ------------ ------------
Net increase(decrease) in net assets
resulting from operations ............................ (172,927) 643,945 7,200,387 (2,552,097)
------------ ------------ ------------ ------------
Distributions to shareholders:
Net investment income ...................................... (344,010) (354,799) -- --
In excess of net investment income ......................... -- -- -- (55,075)
Net realized gain on investment
transactions ........................................... -- -- -- (347,200)
In excess of net realized gain on
investments ............................................ -- -- -- (133,930)
------------ ------------ ------------ ------------
Total distributions to shareholders .................... (344,010) (354,799) -- (536,205)
------------ ------------ ------------ ------------
Shares of beneficial interest transactions:
Proceeds from shares issued ................................ 2,272,144 3,406,081 8,535,699 22,466,630
Proceeds from reinvestment of dividends .................... 298,379 237,998 -- 530,206
Cost of shares redeemed .................................... (3,457,546) (2,227,131) (7,068,548) (16,760,984)
------------ ------------ ------------ ------------
Net increase(decrease) in net assets from
shares of beneficial interest transactions ........... (887,023) 1,416,948 1,467,151 6,235,852
------------ ------------ ------------ ------------
Net increase (decrease) in net assets .................. (1,403,960) 1,706,094 8,667,538 3,147,550
Net Assets:
Beginning of period ........................................ 7,617,928 5,911,834 11,693,529 8,545,979
------------ ------------ ------------ ------------
End of period .............................................. $ 6,213,968 $ 7,617,928 $ 20,361,067 $ 11,693,529
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets (Continued)
================================================================================
<TABLE>
<CAPTION>
Realty Fund Mighty Mites(SM) Fund
----------- ---------------------
For the Year Ended September 30, For the Year Ended September 30,
-------------------------------- --------------------------------
1999 1998 1999 1998(a)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income .................................. $ 83,135 $ 79,633 $ 72,301 $ 20,172
Net realized gain (loss) on investment
transactions ....................................... (205,910) (3,949) 1,169,303 955
Net change in unrealized appreciation
(depreciation) on investments ...................... 8,039 (345,153) 891,554 (259,801)
------------ ------------ ------------ ------------
Net increase(decrease) in net assets
resulting from operations ........................ (114,736) (269,469) 2,133,158 (238,674)
------------ ------------ ------------ ------------
Distributions to shareholders:
Net investment income .................................. (71,254) (69,760) (46,367) --
In excess of net investment income ..................... (13,527) -- -- --
Net realized gain on investment transactions ........... -- -- (955) --
In excess of net realized gain on
investments ........................................ -- (39,769) -- --
------------ ------------ ------------ ------------
Total distributions to shareholders ................ (84,781) (109,529) (47,322) --
------------ ------------ ------------ ------------
Shares of beneficial interest transactions:
Proceeds from shares issued ............................ 725,155 3,991,590 25,153,091 6,596,508
Proceeds from reinvestment of dividends ................ 55,657 96,235 46,437 --
Cost of shares redeemed ................................ (612,166) (1,894,095) (21,918,377) (1,519,447)
------------ ------------ ------------ ------------
Net increase in net assets from
shares of beneficial interest transactions ....... 168,646 2,193,730 3,281,151 5,077,061
------------ ------------ ------------ ------------
Net increase(decrease) in net assets ............... (30,871) 1,814,732 5,366,987 4,838,387
Net Assets:
Beginning of period .................................... 1,814,732 -- 4,838,387 --
------------ ------------ ------------ ------------
End of period .......................................... $ 1,783,861 $ 1,814,732 $ 10,205,374 $ 4,838,387
============ ============ ============ ============
</TABLE>
(a) From commencement of operations on May 11, 1998.
See accompanying notes to financial statements.
22
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements
================================================================================
1. Organization. The Gabelli Westwood Funds (the "Trust") are registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as a
diversified, open-end management investment company and currently consists of
six active separate investment portfolios: Equity Fund, Balanced Fund,
Intermediate Bond Fund, SmallCap Equity Fund, Realty Fund and Mighty Mites Fund
(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, Realty Fund and Mighty Mites Fund.
Effective November 8, 1994, all shares in the Service Class of the Intermediate
Bond Fund were redeemed. No such shares were outstanding at September 30, 1999,
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. The Gabelli Westwood Cash Management Fund
has not commenced operations.
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 in the preparation of their financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("Nasdaq") or traded on foreign exchanges are
valued at the last sale price on that exchange as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day, except for open short positions, which are
issued at the last asked price). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. Portfolio securities traded on more
than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by the Adviser.
Securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board of Trustees. Short
term debt securities with remaining maturities of 60 days or less are valued at
amortized cost, unless the Trustees determine such does not reflect the
securities' fair value, in which case these securities will be valued at their
fair value as determined by the Trustees. Debt instruments having a greater
maturity are valued at the highest bid price obtained from a dealer maintaining
an active market in those securities. Options are valued at the last sale price
on the exchange on which they are listed. If no sales of such options have taken
place that day, they will be valued at the mean between their closing bid and
asked prices.
Accounting for Real Estate Investment Trusts. The Funds own shares of real
estate investment trusts ("REITS") which report information on the source of
their distributions annually. Distributions received from REITS during the year
which are known to be a return of capital are recorded as a reduction to the
cost of the individual REIT.
Securities Transactions and Investment Income. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
Dividends and Distributions to Shareholders. Dividends from net investment
income are declared and paid annually for the Equity Fund, SmallCap Equity Fund
and Mighty Mites Fund, and quarterly for the Balanced Fund and Realty Fund. The
23
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued)
================================================================================
Intermediate Bond Fund declares dividends daily and pays those dividends
monthly. Distributions of net realized gain on investments 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.
For the year ended September 30, 1999, the following reclassifications were made
to increase (decrease) such accounts with offsetting adjustments to additional
paid-in-capital. These reclassifications related primarily to distributions from
Real Estate Investment Trusts, net operating losses and nondeductible
organizational costs.
Accumulated Accumulated
Undistributed Net Realized Gain (Loss)
Investment Income (Loss) on Investments
------------------------ --------------
Equity Fund $(158,732) $ 158,732
Balanced Fund (61,255) 61,255
SmallCap Equity Fund 134,973 (134,973)
Realty Fund (9,827) 25,122
Mighty Mites Fund 9,497 --
Provision for Income Taxes. The Funds have qualified and intend to continue to
qualify as regulated investment companies under Subchapter M of the Internal
Revenue Code of 1986, as amended. By so qualifying, the Funds will not be
subject to federal income taxes to the extent that they distribute all of their
taxable income for the fiscal year.
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.
Concentration Risk. The Realty Fund invests a substantial portion of its assets
in REITS, therefore it may be more affected by economic developments in the real
estate industry than would a general equity fund.
3. Investment Advisory Agreements. On July 27, 1994, Westwood Management Corp.
("Westwood") entered into an agreement with Gabelli Funds, LLC (formerly Gabelli
Funds, Inc.) to form a new limited liability company, Teton Advisers LLC
("Teton"). On October 6, 1994, Teton entered into a sub-advisory agreement with
Westwood (the "Sub-Adviser"). The terms of the sub-advisory agreement 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. As of March 2, 1998, Gabelli Advisers LLC converted to a "C"
corporation and is now known as Gabelli Advisers, Inc. (the "Adviser").
24
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued)
================================================================================
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, Realty Fund and Mighty Mites Fund, 0.75% for
the Balanced Fund, and 0.60% for the Intermediate Bond Fund of each Fund's
average daily net assets. For the year ended September 30, 1999, the Adviser was
entitled to fees of $1,920,350; $159,566; $19,298; $77,008; $1,247,960 and
$42,858 for the Equity, SmallCap Equity, Realty, Mighty Mites, Balanced and
Intermediate Bond Funds, respectively. For the same period, the Adviser has
voluntarily agreed to reimburse the Intermediate Bond Fund, SmallCap Equity
Fund, Realty Fund and Mighty Mites Fund in the event annual expenses of such
Funds exceed certain prescribed limits. For the year ended September 30, 1999,
the Adviser reimbursed expenses in the amount of $41,731; $16,004; $39,976 and
$100,915, respectively.
The Funds, with the exception of the Mighty Mites Fund, have also entered into a
sub-advisory agreement with the Sub-Adviser whereby the Adviser pays the
Sub-Adviser the greater of $150,000 per year on an aggregate basis for the Funds
or a fee of 35% of net revenues to the Adviser from the Funds. For the year
ended September 30, 1999, the Adviser paid to the Sub-Adviser fees of $504,271;
$41,673; $5,908; $300,261 and $9,350 for the Equity, SmallCap Equity, Realty,
Balanced and Intermediate Bond Funds, respectively.
4. Distribution Plan. The Funds have adopted a distribution plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. ("Gabelli &
Company"), an affiliate of Gabelli Asset Management 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 those Funds each fiscal year. Such
payments are accrued daily and paid monthly. For the year ended September 30,
1999, the Funds incurred distribution expenses in the amounts of $475,152;
$388,540; $17,817; $39,853; $4,810 and $19,261 for the Retail Class of the
Equity, Balanced, Intermediate Bond, SmallCap Equity, Realty and Mighty Mites
Funds, respectively.
Under the Plan for the Service Class, each of the Equity and Balanced Funds
authorize payment 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 those funds each fiscal year. Such payments are accrued daily and paid
monthly. For the year ended September 30, 1999, the Funds incurred distribution
expenses in the amounts of $12,096 for the Equity Fund and $54,878 for the
Balanced Fund.
5. Organizational Expenses. The organizational expenses of the Funds are being
amortized on a straight-line basis over a period of 60 months from the
commencement of the respective Funds' investment operations.
6. Portfolio Securities. Purchases and sales of securities for the year ended
September 30, 1999, other than short term securities, are as follows:
Purchases Sales
--------- -----
Equity Fund .................... $121,341,327 $171,215,473
Balanced Fund .................. 153,365,003 138,338,748
Intermediate Bond Fund ......... 7,095,672 7,305,690
SmallCap Equity Fund ........... 28,212,149 27,692,389
Realty Fund .................... 1,248,575 1,014,176
Mighty Mites Fund .............. 9,477,922 5,280,127
25
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued)
================================================================================
7. Transactions with Affiliates. During the year ended September 30, 1999, the
Mighty Mites Fund paid brokerage commissions of $554 to Gabelli and Company and
its affiliates.
8. Shares of Beneficial Interest. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
Equity Fund Balanced Fund
----------- -------------
Year Ended September 30, Year Ended September 30,
----------------------------- -----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Retail Class
Shares sold ................................................ 4,629,734 12,764,712 5,762,724 7,583,810
Shares issued upon reinvestment of dividends ............... 552,034 742,570 375,455 549,677
Shares redeemed ............................................ (9,884,292) (7,434,151) (4,424,361) (2,292,678)
----------- ----------- ----------- -----------
Net increase (decrease) in Retail Class shares ........... (4,702,524) 6,073,131 1,713,818 5,840,809
=========== =========== =========== ===========
Service Class
Shares sold ................................................ 41,215 272,855 86,912 499,396
Shares issued upon reinvestment of dividends ............... 6,159 8,078 21,391 90,852
Shares redeemed ............................................ (110,209) (354,511) (655,052) (519,210)
----------- ----------- ----------- -----------
Net increase (decrease) in Service Class shares .......... (62,835) (73,578) (546,749) 71,038
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Intermediate Bond Fund SmallCap Equity Fund
---------------------- --------------------
Year Ended September 30, Year Ended September 30,
---------------------------- ----------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Retail Class
Shares sold ................................................ 217,090 323,824 559,530 1,575,803
Shares issued upon reinvestment of dividends ............... 28,905 22,670 -- 42,932
Shares redeemed ............................................ (333,664) (211,584) (459,943) (1,162,861)
---------- ---------- ---------- ----------
Net increase (decrease) in Retail Class shares ........... (87,669) 134,910 99,587 455,874
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Realty Fund Mighty Mites(SM) Fund
----------- ---------------------
Year Ended September 30, Year Ended September 30,
---------------------------- -------------------------------
1999 1998 1999 1998(a)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Retail Class
Shares sold ............................................. 88,324 401,821 2,294,614 649,926
Shares issued upon reinvestment of dividends ............ 6,914 10,176 4,333 --
Shares redeemed ......................................... (76,095) (196,766) (2,007,020) (151,333)
---------- ---------- ---------- ----------
Net increase in Retail Class shares ................... 19,143 215,231 291,927 498,593
========== ========== ========== ==========
</TABLE>
(a) From commencement of operations on May 11, 1998.
9. Federal Income Tax Information. The Intermediate Bond Fund and Realty Fund
have capital loss carryforwards for Federal income tax purposes of $261,089 and
$33,537, respectively, available through September 2003 and September 2007,
respectively. These loss carryforwards are 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, Realty Fund and Mighty Mites Fund incurred losses of
$107,982, $188,693 and $37,646, respectively, after October 31, 1998. Such
losses will be treated, for tax purposes, as arising on October 1, 1999.
26
<PAGE>
The Gabelli Westwood Funds
Financial Highlights
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
------------------ ------------------ ------------------ ------------------
Equity Fund Retail Service Retail Service Retail Service Retail Service
Operating performance: Class Class Class Class Class Class Class Class
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . $8.99 $8.97 $9.57 $9.57 $7.68 $7.69 $6.59 $6.57
----- ----- ----- ----- ----- ----- ----- -----
Net investment income ................ 0.04 0.02 0.07 0.08 0.07 0.06 0.08 0.06
Net realized and unrealized gain(loss)
on investments ..................... 1.72 1.73 (0.22) (0.25) 2.72 2.71 1.59 1.58
----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations ..... 1.76 1.75 (0.15) (0.17) 2.79 2.77 1.67 1.64
----- ----- ----- ----- ----- ----- ----- -----
Distributions to shareholders:
Net investment income ................ (0.06) (0.03) (0.06) (0.06) (0.07) (0.06) (0.06) --
Net realized gain on investments ..... (0.23) (0.23) (0.37) (0.37) (0.83) (0.83) (0.52) (0.52)
----- ----- ----- ----- ----- ----- ----- -----
Total distributions .................. (0.29) (0.26) (0.43) (0.43) (0.90) (0.89) (0.58) (0.52)
----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period ....... $10.46 $10.46 $8.99 $8.97 $9.57 $9.57 $7.68 $7.69
====== ====== ===== ===== ===== ===== ===== =====
Total return + ....................... 19.8% 19.5% (1.4)% (1.8)% 39.6% 39.3% 26.9% 26.3%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) . $155,036 $2,222 $175,391 $2,468 $128,697 $3,338 $29,342 $1,221
Ratio of net investment income to
average net assets ................. 0.38% 0.13% 0.73% 0.46% 1.11% 0.85% 1.16% 0.92%
Expenses net of waivers/
reimbursements (a) ................. 1.49% 1.74% 1.47% 1.72% 1.53% 1.78% 1.50% 1.74%
Expenses before waivers/
reimbursements (c) ................. 1.49% 1.74% 1.47% 1.72% 1.59% 1.84% 1.95% 2.19%
Portfolio turnover rate .............. 67% 67% 77% 77% 61% 61% 106% 106%
<CAPTION>
Year Ended September 30,
------------------------
1995
------------------
Equity Fund Retail Service
Operating performance: Class Class
------- -------
<S> <C> <C>
Net asset value, beginning of period . $5.50 $5.48
----- -----
Net investment income ................ 0.04 0.04
Net realized and unrealized gain(loss)
on investments ..................... 1.31 1.29
----- -----
Total from investment operations ..... 1.35 1.33
----- -----
Distributions to shareholders:
Net investment income ................ (0.06) (0.04)
Net realized gain on investments ..... (0.20) (0.20)
----- -----
Total distributions .................. (0.26) (0.24)
----- -----
Net asset value, end of period ....... $6.59 $6.57
===== =====
Total return + ....................... 25.9% 25.5%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) . $14,903 $68
Ratio of net investment income to
average net assets ................. 0.77% 0.64%
Expenses net of waivers/
reimbursements (a) ................. 1.61% 1.85%
Expenses before waivers/
reimbursements (c) ................. 2.29% 2.63%
Portfolio turnover rate .............. 107% 107%
</TABLE>
================================================================================
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------------------------------------
1999 1998 1997 1996
----------------- ------------------ ----------------- -----------------
Balanced Fund Retail Service Retail Service Retail Service Retail Service
Operating performance: Class Class Class Class Class Class Class Class
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.98 $10.96 $11.49 $11.46 $9.71 $9.69 $8.47 $8.45
------ ------ ------ ------ ------ ------ ----- -----
Net investment income .............. 0.25 0.22 0.26 0.26 0.25 0.24 0.22 0.20
Net realized and unrealized gain
on investments ................... 1.12 1.11 0.05 0.02 2.36 2.33 1.37 1.37
------ ------ ------ ------ ------ ------ ----- -----
Total from investment operations ... 1.37 1.33 0.31 0.28 2.61 2.57 1.59 1.57
------ ------ ------ ------ ------ ------ ----- -----
Distributions to shareholders:
Net investment income .............. (0.25) (0.22) (0.26) (0.22) (0.25) (0.22) (0.22) (0.20)
Net realized gain on investments ... (0.12) (0.12) (0.56) (0.56) (0.58) (0.58) (0.13) (0.13)
------ ------ ------ ------ ------ ------ ----- -----
Total distributions ................ (0.37) (0.34) (0.82) (0.78) (0.83) (0.80) (0.35) (0.33)
------ ------ ------ ------ ------ ------ ----- -----
Net asset value, end of period ..... $11.98 $11.95 $10.98 $10.96 $11.49 $11.46 $9.71 $9.69
====== ====== ====== ====== ====== ====== ===== =====
Total return + ..................... 12.6% 12.2% 2.8% 2.6% 28.3% 28.0% 19.1% 18.9%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) $160,352 $9,374 $128,222 $14,585 $67,034 $14,444 $23,158 $11,216
Ratio of net investment income to
average net assets ............... 2.06% 1.81% 2.37% 2.16% 2.60% 2.37% 2.62% 2.34%
Expenses net of waivers/
reimbursements (b) ............... 1.20% 1.45% 1.20% 1.45% 1.28% 1.53% 1.32% 1.57%
Expenses before waivers/
reimbursements (c) ............... 1.20% 1.45% 1.20% 1.45% 1.36% 1.61% 1.71% 1.96%
Portfolio turnover rate ............ 86% 86% 77% 77% 110% 110% 111% 111%
<CAPTION>
Year Ended September 30,
------------------------
1995
-----------------
Balanced Fund Retail Service
Operating performance: Class Class
------- -------
<S> <C> <C>
Net asset value, beginning of period $7.12 $7.10
----- -----
Net investment income .............. 0.19 0.17
Net realized and unrealized gain
on investments ................... 1.35 1.35
----- -----
Total from investment operations ... 1.54 1.52
----- -----
Distributions to shareholders:
Net investment income .............. (0.19) (0.17)
Net realized gain on investments ... -- --
----- -----
Total distributions ................ (0.19) (0.17)
----- -----
Net asset value, end of period ..... $8.47 $8.45
===== =====
Total return + ..................... 22.0% 21.7%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) $6,912 $7,212
Ratio of net investment income to
average net assets ............... 2.47% 2.26%
Expenses net of waivers/
reimbursements (b) ............... 1.35% 1.62%
Expenses before waivers/
reimbursements (c) ............... 1.86% 2.24%
Portfolio turnover rate ............ 133% 133%
</TABLE>
================================================================================
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(a) 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 1.44% (Retail Class)
and 1.69% (Service Class) for 1999, 1.45% (Retail Class) and 1.70%
(Service Class) for 1998, 1.50% (Retail Class) and 1.75% (Service Class)
for 1997, 1.44% (Retail Class) and 1.68% (Service Class) for 1996 and
1.50% (Retail Class) and 1.72% (Service Class) for 1995.
(b) 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 1.15% (Retail Class)
and 1.40% (Service Class) for 1999, 1.17% (Retail Class) and 1.42%
(Service Class) for 1998, and 1.25% (Retail Class) and 1.50% (Service
Class) for 1997, 1.24% (Retail Class) and 1.49% (Service Class) for 1996
and 1.25% (Retail Class) and 1.50% (Service Class) for 1995.
(c) During the period, certain fees were voluntarily reduced and/or expenses
reimbursed. If such fee reductions and/or reimbursements had not occurred,
the ratio would have been as shown.
See accompanying notes to financial statements.
27
<PAGE>
The Gabelli Westwood Funds
Financial Highlights (Continued)
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
Year Ended September 30,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------------------
Retail Service
Intermediate Bond Fund Retail Class Class Class(c)
------------------------------------------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ................ $10.74 $10.29 $9.88 $9.98 $9.48 $9.48
----- ----- ----- ----- ----- -----
Net investment income ............................... 0.50 0.57 0.68 0.51 0.52 0.05
Net realized and unrealized gain(loss) on investments (0.75) 0.45 0.41 (0.10) 0.50 (0.14)
----- ----- ----- ----- ----- -----
Total from investment operations .................... (0.25) 1.02 1.09 0.41 1.02 (0.09)
----- ----- ----- ----- ----- -----
Distributions to shareholders:
Net investment income ............................... (0.50) (0.57) (0.68) (0.51) (0.52) (0.05)
----- ----- ----- ----- ----- -----
Total distributions ................................. (0.50) (0.57) (0.68) (0.51) (0.52) (0.05)
----- ----- ----- ----- ----- -----
Net asset value, end of period ...................... $9.99 $10.74 $10.29 $9.88 $9.98 $9.34
===== ===== ===== ===== ===== =====
Total return +....................................... (2.4)% 10.2% 11.4% 4.5% 11.1% (1.0)%
Ratios to average net assets and supplemental data:
Net assets, end of period (in 000's) ................ $6,214 $7,618 $5,912 $5,496 $4,729 $0
Ratio of net investment income to average net assets 4.82% 5.45% 6.71% 5.43% 5.38% 4.85%
Expenses net of waivers/reimbursements (a) .......... 1.05% 1.08% 1.11% 1.09% 1.17% 1.45%
Expenses before waivers/reimbursements (b) .......... 1.63% 2.08% 1.70% 2.46% 2.47% 4.07%
Portfolio turnover rate ............................. 108% 232% 628% 309% 165% 70%
</TABLE>
================================================================================
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(a) 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 1.00% for each period.
(b) During the period, certain fees were voluntarily reduced and/or expenses
reimbursed. If such fee reductions and/or reimbursements had not occurred,
the ratio would have been as shown.
(c) On November 8, 1994, all shares of the Service Class were redeemed and
there have been no further shares issued in this class since this date.
Accordingly, the NAV per share at the end of the period represents the net
asset value on November 8, 1994.
See accompanying notes to financial statements.
28
<PAGE>
The Gabelli Westwood Funds
Financial Highlights (Continued)
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
SmallCap Equity Fund Realty Fund Mighty Mites(SM) Fund
Year Ended Year Ended
September 30, Period Ended September 30, Year Ended Period Ended
------------------ September 30, ---------------- September 30, September 30,
1999 1998 1997(c) 1999 1998 1999 1998(e)
-------- -------- -------- -------- ------- ------- -------
Retail Retail Retail Retail Retail Retail Retail
Class Class Class Class Class Class Class
-------- -------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ........ $11.18 $14.48 $10.00 $8.43 $10.00 $9.70 $10.00
------ ------ ------ ------ ------ ------ ------
Net investment income (loss) ................ (0.12) (0.09) 0.08 0.22 0.37 0.10 0.04
Net realized and unrealized gain (loss)
on investments ............................ 6.71 (2.39) 4.40 (0.81) (1.37) 3.20 (0.34)
------ ------ ------ ------ ------ ------ ------
Total from investment operations ............. 6.59 (2.48) 4.48 (0.59) (1.00) 3.30 (0.30)
------ ------ ------ ------ ------ ------ ------
Distributions to shareholders:
Net investment income ........................ -- -- -- (0.23) (0.33) (0.09) --
In excess of net investment income ........... -- (0.08) -- -- -- -- --
Net realized gain on investments ............. -- (0.60) -- -- -- -- --
In excess of net realized gain on investments -- (0.14) -- -- (0.24) -- --
------ ------ ------ ------ ------ ------ ------
Total distributions .......................... -- (0.82) -- (0.23) (0.57) (0.09) --
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ............... $17.77 $11.18 $14.48 $7.61 $8.43 $12.91 $9.70
====== ====== ====== ====== ====== ====== ======
Total return + ............................... 58.9% (17.7)% 44.8% (5.7)% (10.5)% 34.2% (3.0)%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) ......... $20,361 $11,694 $8,546 $1,784 $1,815 $10,205 $4,838
Ratio of net investment income (loss) to
average net assets ......................... (0.88)% (0.74)% 1.89%(d) 4.32% 3.87% 0.94% 1.60%(d)
Expenses net of waivers/reimbursements (a) ... 1.62% 1.72% 1.89%(d) 1.60% 1.70% 1.01% 2.05%(d)
Expenses before waivers/reimbursements (b) ... 1.72% 2.11% 2.45%(d) 3.68% 3.95% 2.32% 4.50%(d)
Portfolio turnover rate ...................... 178% 200% 146% 55% 142% 88% 18%
</TABLE>
================================================================================
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(a) 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 1.50%, 1.50% and 1.00%
for SmallCap Equity, Realty and Mighty Mites for 1999, respectively. For
the year ended September 30, 1998, for SmallCap Equity, Realty and Mighty
Mites Funds would be 1.50%,1.50% and 2.00%, respectively, and for the year
ended September 30, 1997, for SmallCap Equity would be 1.50%.
(b) 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.
(c) Period from April 15, 1997 (inception date of fund) to September 30, 1997.
(d) Annualized.
(e) Period from May 11, 1998 (inception date of fund) to September 30, 1998.
See accompanying notes to financial statements.
29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of the
The Gabelli Westwood Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Westwood Equity Fund,
The Gabelli Westwood Balanced Fund, The Gabelli Westwood Intermediate Bond Fund,
The Gabelli Westwood SmallCap Equity Fund, The Gabelli Westwood Realty Fund and
The Gabelli Westwood Mighty Mites Fund (constituting The Gabelli Westwood Funds,
hereafter referred to as the "Fund") at September 30, 1999, and the results of
each of their operations, the changes in each of their net assets, and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
November 8, 1999
- --------------------------------------------------------------------------------
1999 Tax Notice to Shareholders (Unaudited)
U.S. Government Income:
The percentage of the ordinary income dividend paid by the Equity Fund, Balanced
Fund, Intermediate Bond Fund, SmallCap Equity Fund, Realty Fund and Mighty Mites
Fund (collectively, the "Funds") during fiscal 1999 which was derived from U.S.
Treasury securities was 5.09%, 32.25%, 42.03%, 0.0%, 0.0% and 74.34%,
respectively. Such income is exempt from state and local tax in all states.
However, many states, including New York and California, allow a tax exemption
for a portion of the income earned only if a mutual fund has invested at least
50% of its assets at the end of each quarter of the Fund's fiscal year in U.S.
Government securities. The Funds did not meet this strict requirement in 1999.
Due to the diversity in state and local tax law, it is recommended that you
consult your personal tax advisor for the applicability of the information
provided as to your specific situation.
The Gabelli Westwood Equity Fund
100.00% of the ordinary income dividend qualifies for the dividend received
deduction available to corporations. The Fund paid to shareholders, on December
21, 1998, a long-term capital gain totaling $0.2162 per share.
The Gabelli Westwood Balanced Fund
80.19% of the ordinary income dividend qualifies for the dividend received
deduction available to corporations. The Fund paid to shareholders, on December
21, 1998, a long-term capital gain totaling $0.0951per share.
The Gabelli Westwood Intermediate Bond Fund; The Gabelli Westwood Realty Fund
None of the ordinary income dividend qualifies for the dividend received
deduction available to corporations.
The Gabelli Mighty Mites Fund
100.00% of the ordinary income divided qualifies for the dividend received
deduction available to corporations.
- --------------------------------------------------------------------------------
30
<PAGE>
The GABELLI Westwood Funds
==========================
Equity Fund
Balanced Fund
Intermediate Bond Fund
SmallCap Equity Fund
Realty Fund
Mighty Mites(SM) Fund
(Unaudited)
Gabelli Westwood Funds -- Retail Class Shares
---------------------------------------------
Average Annual Returns -- September 30, 1999 (a)
Life of Inception
1 Year 5 Year Fund Date
----------------------------------------------------
Equity ................. 19.77% 21.35% 14.42% 01/02/87
Balanced ............... 12.56 16.61 14.05 10/01/91
Intermediate Bond ...... (2.37) 6.82 6.23 10/01/91
SmallCap Equity ........ 58.94 -- 29.63 04/15/97
Realty ................. (5.68) -- (8.11) 09/30/97
Mighty Mites(SM) ....... 34.21 -- 20.87 05/11/98
Gabelli Westwood Funds -- Service Class Shares
----------------------------------------------
Average Annual Returns -- September 30, 1999 (a)(b)
Life of Inception
1 Year 5 Year Class Date
----------------------------------------------------
Equity ................. 14.78% 20.01% 17.25% 01/28/94
Balanced ............... 7.68 15.37 13.63 04/06/93
(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 Former Chief Investment Officer
Investment Officer Financial Security Assurance
Holdings Ltd.
KARL OTTO POHL WERNER J. ROEDER, MD
Former President Medical Director
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
-----------------------
PricewaterhouseCoopers 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.
- --------------------------------------------------------------------------------
GABWWQ399SR
