The
Gabelli
Westwood
Funds
EQUITY FUND
BALANCED FUND
INTERMEDIATE BOND FUND
SMALLCAP EQUITY FUND
REALTY FUND
MIGHTY MITES(SM) FUND
SEMI-ANNUAL REPORT
MARCH 31, 1999
<PAGE>
The Gabelli Westwood Funds
Semi-Annual Report
March 31, 1999
**** Equity Fund SmallCap Equity Fund
**** Balanced Fund Realty Fund
*** Intermediate Bond Fund Mighty Mites(SM) Fund
Morningstar Rating(TM) of the Equity Fund Retail Class was 4 stars overall
and for the three, five and ten-year periods ended 3/31/99. Morningstar
Rating(TM) of the Equity Fund Service Class was 4 stars overall and for
the five-year period and 3 stars for the three-year period ended 3/31/99.
Morningstar Rating(TM) the Balanced Fund Retail Class was 4 stars overall
for the five-year period and 3 stars for the three-year period ended
3/31/99. Morningstar Rating(TM) of the Balanced Fund Service Class was 3
stars overall and for the three and five-year periods ended 3/31/99. The
Equity and Balanced Funds were rated among 2947, 1810 and 743 domestic
equity funds overall and for the three, five and ten-year periods ended
3/31/99, respectively. Morningstar Rating(TM) of the Intermediate Bond
Fund was 3 stars overall and for the five-year period and 4 stars for the
three-year period ended 3/31/99. The Bond Fund was rated among 1521 and
1048 taxable bond funds overall and for the three and five-year periods
ended 3/31/99, respectively.
To Our Shareholders,
We are pleased to provide the March 31, 1999 semi-annual report for the
Gabelli Westwood Funds, including the Equity Fund, Balanced Fund, Intermediate
Bond Fund, SmallCap Equity, Realty Fund and Mighty Mites(SM) Fund.
Market Commentary
The positive economic environment of the previous six months rewarded
investors who remained invested in the stock market. However, the market
strength was led by a small group of stocks that are very large in terms of
their market capitalization and that would be considered overpriced by most
risk-averse investment managers. For example, during the first quarter of 1999,
the five top-performing companies in the S&P 500 Index produced an average
return of 30%, whereas the remaining 495 companies were virtually unchanged.
Westwood Management's approach to investing places greatest emphasis on
preservation of shareholder capital. Because our overriding mission is to avoid
situations in which risk outweighs potential return, our investment process
would typically focus on the 495 companies with more reasonable valuations. Our
team commits significant time researching each company and assessing the
potential risk and return. We want a high degree of confidence that our
decisions will yield a portfolio of solid investments that are positioned to
grow for the long term. We have remained committed to this approach for over 16
years, producing strong long term results for our shareholders. It is tempting
for any investor to want to shift to "what's worked in the market" after a
period as challenging as the past twelve months. However, we believe that
remaining committed to our time-tested investment process will serve our
shareholders well over the long haul. Below we discuss several of the companies
we have identified.
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. Total returns and average
annual returns reflect changes in share price and reinvestment of dividends and
are net of expenses. The net asset value of the Fund is reduced on the
ex-dividend (payment) date by the amount of the dividend paid. Investment
returns and the principal value of an investment will fluctuate. When shares are
redeemed they may be worth more or less than their original cost. Morningstar
proprietary ratings reflect historical risk adjusted performance as of March 31,
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.
<PAGE>
Equity Fund
For the six-months ended March 31, 1999, the (****)-rated Equity Fund
Retail Class' total return was 15.4% and the Service Class' total return was
15.3%. The Standard & Poor's ("S&P") 500 Index and the Lipper Capital
Appreciation Fund Average had total returns of 27.3% and 28.0%, respectively,
over the same six-month period. Each index is an unmanaged indicator of
investment performance. The Retail Class was up 2.9% and the Service Class was
up 2.7% over the trailing twelve-month period. The S&P 500 and Lipper Capital
Appreciation Fund Average rose 18.5% and 11.8%, respectively, over the same
twelve-month period.
During the past six months as the S&P 500 (market cap-weighted) returned
27.3%, the S&P 500 equally weighted returned 18.5%. Market cap or "cap-weighted"
means that larger companies exhibit greater influence on performance than do
smaller companies. The comparison of the cap-weighted return versus the equally
weighted return further illustrates the narrowness of the market we have
witnessed over the previous six months.
For the ten-year period ended March 31, 1999, the Retail Class' total
return averaged 16.0% annually versus average annual total returns of 19.0% and
13.6% for the S&P 500 and Lipper Capital Appreciation Fund Average,
respectively. Since their respective inception dates of January 2, 1987 and
January 28, 1994 through March 31, 1999, the Retail Class had a cumulative total
return of 467.7% and the Service Class had a cumulative total return of 148.0%,
which equate to average annual total returns of 15.2% and 19.2%, respectively.
Some of our recent purchases include Tiffany & Co., which we believe will
benefit from Japan's long-awaited recovery; Hewlett-Packard, which should
benefit from demands from Internet-related businesses and The Limited, a women's
apparel company and majority owner of Intimate Brands, which is continuing to
benefit from strength in consumer spending.
Despite the market's high levels, we continue to see opportunities in the
marketplace and, as such, are maintaining a 90% invested level with the balance
in cash and an inflation-indexed bond. The best performing stocks over the
previous six months included Lucent Technologies, MCI/WorldCom, Ann Taylor,
Chancellor Media and CitiGroup. Detractors from performance have been within the
energy sector, which has suffered from low oil prices. REITs were also
disappointing over the previous six months as the perception of slower growth
and the decision by investors to use REITs as a tax loss vehicle exacerbated the
downward pressure on this group.
Balanced Fund
For the six-months ended March 31, 1999, the (****)-rated Balanced Fund
Retail Class' total return was 10.0% and the Service Class' total return was
9.9%. A blended composite of 60% of the Standard & Poor's ("S&P") 500 and 40% of
the Lehman Brothers Government/Corporate Bond ("LBG/C") and the Lipper Balanced
Fund Average had total returns of 16.0% and 13.3%, respectively, over the same
six-month period. Each index is an unmanaged indicator of investment
performance. The Retail Class was up 4.4% and the Service Class was up 4.2% over
the trailing twelve-month period. A blended composite of 60% of the S&P 500 and
40% of the LBG/C and the Lipper Balanced Fund Average rose 13.7% and 6.5%,
respectively, over the same twelve-month period.
For the five-year period ended March 31, 1999, the Retail Class' total
return averaged 16.6% annually and the Service Class' total return averaged
16.3% annually versus average annual total returns of 18.8% and 14.8% for the
blended composite of 60% of the S&P 500 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 March 31, 1999, the Retail
Class had a cumulative total return of 180.1% and the Service Class had a
cumulative total return of 133.8%, which equate to average annual total returns
of 14.7% and 15.2%, respectively.
2
<PAGE>
The Balanced Fund is designed to give an investor exposure to equities but
reduce overall risk through investment in short to intermediate fixed income
securities. Strategies for the Equity and Intermediate Bond Funds that are
discussed in this letter also apply to their respective components in the
Balanced Fund.
Intermediate Bond Fund
For the six-months ended March 31, 1999, the (***)-rated Intermediate Bond
Fund's net asset value declined 1.2%. The Lehman Brothers Government/Corporate
Bond ("LBG/C") Index and the Lipper Intermediate Investment Grade Debt Fund
Average declined 1.1% and 0.3%, respectively, over the same six-month period.
Each index is an unmanaged indicator of investment performance. The Fund was up
3.9% over the trailing twelve-month period. The LBG/C and the Lipper
Intermediate Investment Grade Debt Fund Average rose 6.6% and 5.8%,
respectively, over the same twelve-month period.
For the five-year period ended March 31, 1999, the Fund's total return
averaged 6.7% annually versus average annual total returns of 7.7% and 7.1% for
the LBG/C Index and the Lipper Intermediate Investment Grade Debt Fund Average,
respectively. Since inception on October 1, 1991 through September 30, 1998, the
Fund had a cumulative total return of 64.1%, which equates to an average annual
total return of 6.8%.
The liquidity crisis that had caused downward pressure on the fixed income
market last fall was largely reversed during the first quarter. Early
expectations for further Federal Reserve interest rate easing, as well as fears
of increasing global economic problems, moderated after an unexpectedly strong
fourth quarter Gross Domestic Product ("GDP") report and indications that Latin
America would likely not be another Russia. Although the fixed income market and
the Fund slightly lost value over these periods, the investments in asset-backed
securities and corporate bonds significantly outperformed Treasuries during
1999.
SmallCap Equity Fund
For the six-months ended March 31, 1999, the SmallCap Equity Fund's total
return was 23.7%. The Russell 2000 Index and the Lipper Small Cap Fund Average
had total returns of 10.0% and 12.9%, respectively, over the same six-month
period. Each index is an unmanaged indicator of investment performance. The Fund
declined 6.7% over the trailing twelve-month period. The Russell 2000 and the
Lipper Small Cap Fund Average declined 16.3% and 15.5%, respectively, over the
same twelve-month period. Since inception on April 15, 1997 through March 31,
1999, the Fund had a cumulative total return of 47.5%, which equate to an
average annual total return of 21.9%.
For the most recent quarter, the Fund declined 3.9% versus declines of
5.4% for the Russell 2000 and 6.0% for the Lipper Small Cap Average. Small cap
stocks experienced a brief period of outperformance versus large cap stocks
during January. However, investors have remained preoccupied with the largest
technology stocks, which has resulted in large caps moving back into a
leadership position. We believe that small cap stocks are very attractive. As a
pattern of increased relative earnings growth emerges, small cap stocks should
be well positioned to outperform. For the previous six months, commitments to
the technology, health care and consumer-related sectors contributed to
performance. Top performing stocks for the previous six months included New Era
of Networks (NEON), Verity Inc., Transwitch Corp., Fundtech Ltd. and Concentric
Networks.
Realty Fund
For the six-months ended March 31, 1999, the Realty Fund's net asset value
declined 6.8%. The National Association of REITs ("NAREIT") Index and the Lipper
Real Estate Fund Average declined 8.4% and 5.0%, respectively, over the same
six-month period. Each index is an unmanaged indicator of investment
performance. The Fund declined 20.5% over the trailing twelve-month period. The
NAREIT
3
<PAGE>
Index and the Lipper Real Estate Fund Average declined 27.6% and 20.4%,
respectively, over the same twelve-month period.
Despite continued strong fundamental performance, Real Estate Investment
Trusts remained weak over the previous six months. At the property level,
performance has been strong as the economy continued to perform well above
expectations. Nearly all sectors are seeing continued rent increases.
Development activity, although evident, remains restrained. Indeed, REITs have
produced higher earnings growth rates than the S&P 500 over the previous twelve
months. The declining stock prices along with rising dividends serve to make
REIT valuations more attractive. On a relative basis during the previous six
months, the strongest performers were Boston Properties, Meristar, Vornado
Realty Trust, Amresco Capital and Equity Office Properties.
Mighty Mites(SM) Fund
For the six-months ended March 31, 1999, the Mighty Mites(SM) Fund's total
return was 14.0%. The Russell 2000 Index and the Lipper Micro-Cap Fund Average
had total returns of 10.0% and 7.6%, respectively, over the same six-month
period. Each index is an unmanaged indicator of investment performance. Since
inception on May 11, 1998 through March 31, 1999, the Fund had a total return of
10.6%. The Russell 2000 and the Lipper Micro-Cap Fund Average declined 16.7% and
19.5%, respectively, over the same period.
Building meaningful positions in micro cap companies at opportunistic
prices demands patience and discipline. Consequently, in its first year of
operation, the Fund may have a larger than normal cash position. Once it is
fully invested, portfolio turnover is expected to be well below the equity fund
average, helping to diminish capital gains obligations for shareholders. We
believe this "tax efficient" approach to the micro cap stock market will have a
favorable impact on long term returns for taxable shareholders.
After a strong fourth quarter 1998 rally, micro cap stocks once again
retreated, as investors refocused their attention on large cap stocks. In
general, small companies that met earnings expectations were ignored and those
that disappointed on the earnings front were severely punished. We are pleased
that during this extremely difficult period for micro cap stocks, the Fund
posted a very modest decline during the first quarter of 1999.
Despite micro cap stocks' strong showing in late 1998, we continued to be
cautious. We recognized that despite attractive valuations in our micro cap
universe, prudence demanded testing the waters before plunging in. Accordingly,
we kept approximately 25% of the portfolio in cash and continued to focus on
micro caps trading at very deep discounts to intrinsic value. Caution has been
rewarded. Our cash position provided stability to the portfolio and we earned
very generous returns from two portfolio holdings that received premium takeover
bids--LCS Industries, which was acquired by Onex Corp., and St. Joseph Light &
Power, which is in the process of being purchased by UtiliCorp United. A third
holding, CMP Media, has hired Lazard Freres to "explore strategic
options"--investment shorthand for "Find a buyer for our company".
Looking ahead, we see great investment opportunity in the micro cap arena.
We are now finding "net/nets", micro cap stocks trading below the value of the
cash on the balance sheet. Providing this cash doesn't need to be spent to stay
alive, "net/nets" generally reward patient investors either from attractive
corporate acquirers that like buying businesses for free or financial engineers
who know how to repackage businesses and put cash in their pocket. We are
finding many other micro cap stocks with solid earnings growth and very low
P/Es. When investors eventually tire of paying up for much more modest earnings
growth in bigger companies, these little gems should attract more attention.
There really is not an industry group theme either for the Mighty
Mites(SM) Fund's good performers or disappointments. The previously mentioned
deal stocks were near the top of our performance charts. Other winners came in
the form of a communications company (Corecomm), a biotech (Biosource
International), a billboard company (Bowlin Outdoor Advertising and Travel) and
a racetrack (Fairgrounds Corp.).
4
<PAGE>
Our losers were an equally eclectic mix, including a nutraceutical company
(Natural Alternatives), a food company (Broughton Foods) and a medical
transportation and services firm (Air Methods Corp.). As is generally the case
with micro cap performance disappointments, these companies failed "to make
their numbers" i.e. quarterly earnings or cash flow was below expectations. One
poor quarter rarely changes our investment opinion on what we believe to be very
promising small companies.
Capital Market Outlook
Over the next 12 months, we believe that continued strength in consumer
spending and a recovery in the manufacturing sector will allow the U.S. economy
to expand at a solid pace. Along with our outlook for continuing economic
growth, we are forecasting a modest increase in inflation, which may prompt the
Federal Reserve to raise short term interest rates later in the year. On the
international front, we feel that Japan's economic recovery, which began in late
1998, will continue in 1999. Economic activity in Europe is expected to remain
subdued as a result of weak consumer spending and potential "Y2K" (year 2000)
disruptions, but a recession is not anticipated.
Within the context of our economic outlook, we will be focusing our
research efforts on companies that have the most attractive and sustainable
fundamentals for long term growth. We feel that these companies will offer our
shareholders the best opportunities for long term capital appreciation.
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.
In Conclusion
The Funds' daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554) or 1-800-WESTWOOD (1-800-937-8966). Please call us during the
business day for further information.
Sincerely,
/s/ Susan M. Byrne
Susan M. Byrne
President and Chief Investment Officer
April 30, 1999
- --------------------------------------------------------------------------------
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
5
<PAGE>
The Gabelli Westwood Equity Fund
Portfolio of Investments -- March 31, 1999 (Unaudited)
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 94.6%
Aerospace - 2.5%
124,288 Lockheed Martin Corp. ........... $ 5,489,135 $ 4,684,104
------------ ------------
Agriculture - 2.6%
106,100 Monsanto Co. .................... 5,166,186 4,873,969
------------ ------------
Automotive - 3.8%
53,887 DaimlerChrysler AG+ ............. 4,193,284 4,624,178
58,500 Lear Corp.+ ..................... 2,235,402 2,497,219
------------ ------------
6,428,686 7,121,397
------------ ------------
Broadcasting - 1.6%
64,300 Chancellor Media Corp.+ ......... 1,929,434 3,030,138
------------ ------------
Communications Equipment - 1.4%
24,400 Lucent Technologies Inc. ........ 1,622,340 2,629,100
------------ ------------
Computer Hardware - 5.5%
75,000 Hewlett-Packard Co. ............. 5,180,037 5,085,938
29,200 International Business
Machines Corp. ............... 3,122,496 5,175,700
------------ ------------
8,302,533 10,261,638
------------ ------------
Computer Software and Services - 6.3%
163,750 Oracle Corp.+ ................... 4,724,645 4,318,906
77,077 Sterling Commerce Inc.+ ......... 2,313,204 2,370,118
210,900 Sterling Software Inc.+ ......... 4,250,274 5,008,875
------------ ------------
11,288,123 11,697,899
------------ ------------
Diversified Industrial - 2.8%
127,500 Alcoa Inc. ...................... 4,647,779 5,251,406
------------ ------------
Energy and Utilities - 13.5%
110,200 Apache Corp. .................... 2,497,905 2,872,088
74,400 Burlington Resources Inc. ....... 2,651,889 2,971,350
74,200 Florida Progress Corp. .......... 2,971,083 2,801,050
185,900 PennzEnergy Co. ................. 4,066,544 1,951,950
156,200 PG&E Corp. ...................... 4,798,903 4,851,962
176,700 Reliant Energy Inc. ............. 4,384,977 4,605,244
89,400 Texaco Inc. ..................... 4,829,866 5,073,449
------------ ------------
26,201,167 25,127,093
------------ ------------
Entertainment - 3.1%
80,600 Time Warner Inc. ................ 2,739,203 5,727,638
------------ ------------
Equipment and Supplies - 0.9%
45,100 Deere & Co. ..................... 1,835,641 1,741,988
------------ ------------
Financial Services - 6.4%
113,930 ABN Amro Holding NV, ADR ........ 2,274,727 2,356,927
74,150 CitiGroup Inc. .................. 3,169,586 4,736,331
85,300 PNC Bank Corp. .................. 4,281,991 4,739,481
------------ ------------
9,726,304 11,832,739
------------ ------------
Financial Services: Insurance - 5.4%
59,900 CIGNA Corp. ..................... 3,483,921 5,020,369
162,900 Conseco Inc. .................... 5,990,055 5,029,537
------------ ------------
9,473,976 10,049,906
------------ ------------
Food and Beverage - 3.7%
62,800 Anheuser Busch Companies Inc. ... 2,725,025 4,784,575
132,400 International Home Foods Inc.+ .. 3,082,764 2,126,675
------------ ------------
5,807,789 6,911,250
------------ ------------
Health Care - 7.0%
51,000 Genzyme Corp. (General
Division)+ ................... 1,331,014 2,572,313
82,400 Pharmacia & Upjohn Inc. ......... 4,414,897 5,139,700
73,500 SmithKline Beecham plc, ADR ..... 3,766,720 5,255,250
------------ ------------
9,512,631 12,967,263
------------ ------------
Hotels - 2.5%
136,300 Marriott International Inc.,
Cl. A ........................ 3,916,903 4,583,088
------------ ------------
Real Estate Investment Trusts - 3.6%
62,700 Kimco Realty Corp. .............. 2,425,925 2,312,063
81,400 Starwood Hotels & Resorts
Worldwide Inc. ............... 3,401,918 2,324,987
58,200 Vornado Realty Trust ............ 2,344,310 2,007,900
------------ ------------
8,172,153 6,644,950
------------ ------------
Retail - 12.8%
68,500 AnnTaylor Stores Corp.+ ......... 1,422,691 3,026,844
98,600 CVS Corp. ....................... 3,243,979 4,683,500
136,800 Limited Inc. .................... 5,113,376 5,420,700
89,700 Safeway Inc.+ ................... 3,842,087 4,602,731
80,500 Tiffany & Co. ................... 4,576,017 6,017,374
------------ ------------
18,198,150 23,751,149
------------ ------------
Telecommunications - 7.9%
78,500 GTE Corp. ....................... 3,664,607 4,749,250
59,100 MCI WorldCom Inc.+ .............. 2,287,025 5,234,043
99,000 SBC Communications Inc. ......... 3,221,080 4,665,375
------------ ------------
9,172,712 14,648,668
------------ ------------
Transportation - 1.3%
63,100 CNF Transportation Inc. ......... 2,406,909 2,385,969
------------ ------------
TOTAL COMMON STOCKS ............. 152,037,754 175,921,352
------------ ------------
Principal
Amount
------
U.S. GOVERNMENT OBLIGATIONS - 2.7%
U.S. Treasury Bills - 1.9%
$3,600,000 U.S. Treasury Bills,
4.51%, due 04/15/99 ++ ....... 3,594,232 3,593,254
------------ ------------
U.S. Treasury Notes - 0.8%
1,472,838 TIPS, 3.625%, due 04/15/28 ...... 1,464,314 1,409,321
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .................. 5,058,546 5,002,575
------------ ------------
TOTAL INVESTMENTS - 97.3% ....... $157,096,300 180,923,927
============
Other Assets and
Liabilities (Net) - 2.7% ..... 5,027,217
------------
NET ASSETS - 100.0%
(18,446,484 shares
outstanding) ................. $185,951,144
============
- ----------
For Federal tax purposes:
Aggregate cost .................. $157,096,300
============
Gross unrealized appreciation ... $ 31,323,712
Gross unrealized depreciation ... (7,496,085)
------------
Net unrealized appreciation ..... $ 23,827,627
============
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depositary Receipt.
TIPS- Treasury Inflation Protection Security.
See accompanying notes to financial statements.
6
<PAGE>
The Gabelli Westwood Balanced Fund
Portfolio of Investments -- March 31, 1999 (Unaudited)
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 60.5%
Aerospace - 1.6%
71,254 Lockheed Martin Corp. ........... $ 3,073,928 $ 2,685,385
------------ ------------
Agriculture - 1.7%
60,700 Monsanto Co. .................... 2,955,869 2,788,406
------------ ------------
Automotive - 2.4%
31,131 DaimlerChrysler AG+ ............. 2,301,197 2,671,429
33,500 Lear Corp.+ ..................... 1,298,297 1,430,031
------------ ------------
3,599,494 4,101,460
------------ ------------
Broadcasting - 1.0%
36,800 Chancellor Media Corp.+ ......... 1,244,332 1,734,200
------------ ------------
Communications Equipment - 0.8%
12,000 Lucent Technologies Inc. ........ 762,101 1,293,000
------------ ------------
Computer Hardware - 3.5%
41,900 Hewlett-Packard Co. ............. 2,897,007 2,841,344
17,100 International Business
Machines Corp. ............... 1,905,384 3,030,975
------------ ------------
4,802,391 5,872,319
------------ ------------
Computer Software and Services - 3.9%
92,700 Oracle Corp.+ ................... 2,760,443 2,444,963
42,718 Sterling Commerce Inc.+ ......... 1,311,243 1,313,579
117,500 Sterling Software Inc.+ ......... 2,569,610 2,790,624
------------ ------------
6,641,296 6,549,166
------------ ------------
Diversified Industrial - 1.8%
72,200 Alcoa Inc. ...................... 2,589,278 2,973,738
------------ ------------
Energy and Utilities - 9.1%
67,900 Apache Corp. .................... 1,549,110 1,769,644
42,400 Burlington Resources Inc. ....... 1,529,680 1,693,350
66,900 Florida Progress Corp. .......... 2,592,016 2,525,475
99,400 PennzEnergy Co. ................. 2,184,324 1,043,700
89,500 PG&E Corp. ...................... 2,761,580 2,780,094
100,800 Reliant Energy Inc. ............. 2,472,168 2,627,100
52,000 Texaco Inc. ..................... 2,831,719 2,950,999
------------ ------------
15,920,597 15,390,362
------------ ------------
Entertainment - 2.1%
49,000 Time Warner Inc. ................ 1,832,426 3,482,063
------------ ------------
Equipment and Supplies - 0.8%
35,500 Deere & Co. ..................... 1,359,254 1,371,188
------------ ------------
Financial Services - 4.0%
64,733 ABN Amro Holding NV, ADR ........ 1,307,769 1,339,164
42,050 CitiGroup Inc. .................. 1,820,127 2,685,944
49,600 PNC Bank Corp. .................. 2,490,858 2,755,900
------------ ------------
5,618,754 6,781,008
------------ ------------
Financial Services: Insurance - 3.4%
33,800 CIGNA Corp. ..................... 1,830,083 2,832,863
93,000 Conseco Inc. .................... 3,413,370 2,871,375
------------ ------------
5,243,453 5,704,238
------------ ------------
Food and Beverage - 2.3%
35,100 Anheuser Busch Companies Inc. ... 1,546,615 2,674,181
75,900 International Home Foods Inc.+ .. 1,781,734 1,219,144
------------ ------------
3,328,349 3,893,325
------------ ------------
Health Care - 4.3%
26,800 Genzyme Corp. (General
Division)+ ................... 719,296 1,351,725
47,200 Pharmacia & Upjohn Inc. ......... 2,539,349 2,944,100
41,300 SmithKline Beecham plc, ADR ..... 2,305,842 2,952,949
------------ ------------
5,564,487 7,248,774
------------ ------------
Hotels - 1.6%
78,100 Marriott International Inc.,
Cl. A ........................ 2,308,685 2,626,113
------------ ------------
Real Estate Investment Trusts - 2.2%
36,900 Kimco Realty Corp. .............. 1,444,917 1,360,688
46,500 Starwood Hotels & Resorts
Worldwide Inc. ............... 1,936,517 1,328,156
27,900 Vornado Realty Trust ............ 1,026,024 962,550
------------ ------------
4,407,458 3,651,394
------------ ------------
Retail - 8.1%
39,000 AnnTaylor Stores Corp.+ ......... 899,933 1,723,313
55,900 CVS Corp. ....................... 2,088,727 2,655,250
77,900 Limited Inc. .................... 2,913,514 3,086,787
51,500 Safeway Inc.+ ................... 2,128,993 2,642,594
47,000 Tiffany & Co. ................... 2,671,668 3,513,249
------------ ------------
10,702,835 13,621,193
------------ ------------
Telecommunications - 5.1%
44,900 GTE Corp. ....................... 2,239,442 2,716,450
36,000 MCI WorldCom Inc.+ .............. 1,338,852 3,188,249
56,000 SBC Communications Inc. ......... 1,887,963 2,639,000
------------ ------------
5,466,257 8,543,699
------------ ------------
Transportation - 0.8%
36,300 CNF Transportation Inc. ......... 1,384,661 1,372,594
------------ ------------
TOTAL COMMON STOCKS ............. 88,805,905 101,683,625
------------ ------------
Principal
Amount
------
ASSET BACKED SECURITIES - 3.7%
$ 700,000 Contimortgage Home Equity
Loan Trust 97-3 Cl. A7,
7.28%, 05/15/24 .............. 699,623 720,342
41,952 EQCC Home Equity 96-1 Cl. A2,
5.82%, 09/15/09 .............. 40,988 42,089
9,191 EQCC Home Equity Loan
Trust 93-3 Cl. A,
5.15%, 09/15/08 .............. 9,183 9,041
1,500,000 Ford Motor Credit Auto Loan
Master Trust 95-1 Cl. A,
6.50%, 08/15/02 .............. 1,511,417 1,522,792
334,434 GMAC Grantor Trust 97-A Cl. A,
6.50%, 04/15/02 .............. 335,445 336,963
428,887 GNMA POOL 344946,
7.00%, 06/15/23 .............. 436,470 437,096
43,519 Green Tree Financial Corp.
96-3 Cl. A2,
6.45%, 05/15/27 .............. 43,519 43,593
12,621 Green Tree Home Improvement
Loan Trust 96-F Cl. HIA2,
6.40%, 11/15/27 .............. 12,629 12,636
1,000,000 GS Mortgage Securities Corp.
98-GLII Cl. A2,
6.56%, 04/13/31 .............. 1,009,922 1,006,290
See accompanying notes to financial statements.
7
<PAGE>
The Gabelli Westwood Balanced Fund
Portfolio of Investments (Continued) -- March 31, 1999 (Unaudited)
================================================================================
Principal
Amount Cost Value
------ ---- -----
ASSET BACKED SECURITIES (Continued)
$1,000,000 GS Mortgage Securities Corp. II
97-GL Cl. A2D,
6.94%, 07/13/30 .............. $ 1,013,112 $ 1,035,630
1,000,000 Premier AutoTrust 1998-1A4,
5.70%, 10/06/02 .............. 999,920 1,003,855
------------ ------------
TOTAL ASSET BACKED SECURITIES ... 6,112,228 6,170,327
------------ ------------
CORPORATE BONDS - 8.6%
Automotive Finance - 0.2%
330,000 GMAC,
8.00%, 10/01/99 .............. 331,731 334,388
------------ ------------
Business Services - 1.4%
1,545,000 USA Waste Services,
7.00%, 10/01/04 .............. 1,558,611 1,603,139
750,000 WMX Technologies Inc.,
8.25%, 11/15/99 .............. 759,159 761,615
------------ ------------
2,317,770 2,364,754
------------ ------------
Diversified Industrial - 0.8%
1,355,000 Tyco International Group,
6.38%, 06/15/05 .............. 1,349,979 1,356,141
------------ ------------
Financial Services - 1.7%
250,000 Amresco Inc.,
9.88%, 03/15/05 .............. 250,000 187,500
1,800,000 Green Tree Financial Corp.,
6.42%, 05/15/29 .............. 1,801,963 1,827,207
850,000 GS Escrow Corp.,
7.13%, 08/01/05 (a) .......... 841,787 856,742
------------ ------------
2,893,750 2,871,449
------------ ------------
Financial Services: Insurance - 0.4%
640,000 CIGNA Corp.,
8.25%, 01/01/07 .............. 670,697 691,418
------------ ------------
Real Estate Investment Trusts - 1.3%
450,000 Kimco Realty,
7.46%, 05/29/07 .............. 450,000 464,972
1,710,000 Security Capital Group Inc.,
7.20%, 03/01/13 .............. 1,645,143 1,658,152
------------ ------------
2,095,143 2,123,124
------------ ------------
Retail - 2.1%
1,625,000 Neiman Marcus Group Inc.,
6.65%, 06/01/08 .............. 1,623,109 1,609,509
1,720,000 Staples Inc.,
7.13%, 08/15/07 .............. 1,745,623 1,770,454
------------ ------------
3,368,732 3,379,963
------------ ------------
Transportation - 0.7%
1,205,000 Norfolk Southern,
6.95%, 05/01/02 .............. 1,232,383 1,242,790
------------ ------------
TOTAL CORPORATE BONDS ........... 14,260,185 14,364,027
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 1.8%
Federal Home Loan Bank - 0.4%
600,000 Federal Home Loan Bank,
5.13%, 09/15/03 .............. 609,270 590,462
------------ ------------
Federal National Mortgage Association - 1.4%
1,285,000 FNMA,
6.00%, 05/15/08 .............. 1,298,016 1,301,908
1,067,993 FNMA POOL #344830,
6.00%, 05/01/11 .............. 1,055,987 1,060,692
------------ ------------
2,354,003 2,362,600
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ........... 2,963,273 2,953,062
------------ ------------
U.S. GOVERNMENT OBLIGATIONS - 20.7%
U.S. Treasury Notes - 20.7%
1,574,413 TIPS,
3.63%, due 04/15/28 .......... 1,556,184 1,506,516
U.S. Treasury Notes,
4,060,000 5.88%, due 02/15/00 .......... 4,079,883 4,094,258
4,010,000 6.38%, due 05/15/00 .......... 4,037,055 4,071,405
1,130,000 7.75%, due 02/15/01 .......... 1,170,391 1,184,735
1,575,000 6.63%, due 06/30/01 .......... 1,610,984 1,626,680
6,280,000 6.25%, due 01/31/02 .......... 6,435,769 6,464,476
5,630,000 6.25%, due 06/30/02 .......... 5,815,291 5,809,456
5,080,000 7.00%, due 07/15/06 .......... 5,667,003 5,557,840
3,360,000 6.25%, due 02/15/07 .......... 3,633,367 3,536,400
915,000 6.63%, due 05/15/07 .......... 995,887 986,484
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .................. 35,001,814 34,838,250
------------ ------------
TOTAL INVESTMENTS - 95.3% ....... $147,143,405 160,009,291
============
Other Assets and Liabilities
(Net) - 4.7% ................. 7,854,494
------------
NET ASSETS - 100.0%
(14,186,938 shares
outstanding) ................. $167,863,785
============
- ----------
For Federal tax purposes:
Aggregate cost .................. $147,143,405
============
Gross unrealized appreciation ... $ 17,242,635
Gross unrealized depreciation ... (4,376,749)
------------
Net unrealized appreciation ..... $ 12,865,886
============
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At March
31, 1999, the market value of Rule 144A securities amounted to $856,742 or
0.5% of net assets.
+ Non-income producing security.
ADR - American Depositary Receipt.
TIPS- Treasury Inflation Protection Security.
See accompanying notes to financial statements.
8
<PAGE>
The Gabelli Westwood Intermediate Bond Fund
Portfolio of Investments -- March 31, 1999 (Unaudited)
================================================================================
Principal
Amount Cost Value
------ ---- -----
ASSET BACKED SECURITIES - 11.5%
$ 275,000 Contimortgage Home Equity
Loan Trust 97-3 Cl. A7,
7.28%, 05/15/24 .............. $ 274,852 $ 282,991
27,572 EQCC Home Equity Loan
Trust 93-3 Cl. A,
5.15%, 09/15/08 .............. 27,550 27,123
100,000 Ford Motor Credit Auto Loan
Master Trust 95-1 Cl. A,
6.50%, 08/15/02 .............. 99,879 101,520
57,168 GMAC Grantor Trust 97-A Cl. A,
6.50%, 04/15/02 .............. 57,327 57,601
14,506 Green Tree Financial Corp.
96-3 Cl. A2,
6.45%, 05/15/27 .............. 14,506 14,531
1,424 Green Tree Home Improvement
Loan Trust 96-F Cl. HIA2,
6.40%, 11/15/27 .............. 1,425 1,426
325,000 GS Mortgage Securities Corp. II
97-GL Cl. A2D,
6.94%, 07/13/30 .............. 333,528 336,579
------------ ------------
TOTAL ASSET BACKED SECURITIES ... 809,067 821,771
------------ ------------
CORPORATE BONDS - 33.1%
Business Services - 5.8%
150,000 USA Waste Services,
7.00%, 10/01/04 .............. 149,750 155,645
250,000 WMX Technologies Inc.,
8.25%, 11/15/99 .............. 253,053 253,871
------------ ------------
402,803 409,516
------------ ------------
Diversified Industrial - 2.8%
200,000 Tyco International Group,
6.38%, 06/15/05 .............. 207,004 200,168
------------ ------------
Energy and Utilities - 1.8%
50,000 Forman Petroleum Corp.,
13.50%, 06/01/04 (a)+ ........ 50,593 25,000
100,000 Niagara Mohawk Power Corp.,
7.38%, 07/01/03 .............. 102,047 102,472
------------ ------------
152,640 127,472
------------ ------------
Financial Services - 5.6%
150,000 GS Escrow Corp.,
7.13%, 08/01/05 (b) .......... 149,476 151,190
200,000 International Bank for
Reconstruction & Development,
8.63%, 10/15/16 .............. 260,764 251,388
------------ ------------
410,240 402,578
------------ ------------
Financial Services: Insurance - 4.1%
100,000 CIGNA Corp.,
8.25%, 01/01/07 .............. 104,796 108,034
200,000 Conseco Finance Trust III Inc.,
8.80%, 04/01/27 .............. 203,403 187,800
------------ ------------
308,199 295,834
------------ ------------
Real Estate Investment Trusts - 3.4%
100,000 Kimco Realty Corp.,
6.96%, 07/16/07 .............. 96,494 100,255
150,000 Security Capital Group Inc.,
7.20%, 03/01/13 .............. 144,190 145,452
------------ ------------
240,684 245,707
------------ ------------
Retail - 8.9%
160,000 Neiman Marcus Group Inc.,
6.65%, 06/01/08 .............. 159,814 158,475
250,000 Staples Inc.,
7.13%, 08/15/07 .............. 249,530 257,334
200,000 Wal-Mart Stores Inc.,
7.50%, 05/15/04 .............. 220,369 215,112
------------ ------------
629,713 630,921
------------ ------------
Specialty Chemicals - 0.7%
50,000 du Pont de Nemours
(E.I.) and Co.,
9.15%, 04/15/00 .............. 51,116 51,893
------------ ------------
TOTAL CORPORATE BONDS ........... 2,402,399 2,364,089
------------ ------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 2.2%
155,935 FNMA, POOL #344800,
6.00%, 05/01/11 .............. 154,182 154,869
------------ ------------
U.S. GOVERNMENT OBLIGATIONS - 49.8%
U.S. Treasury Bonds - 15.0%
1,030,000 U.S. Treasury Bonds,
6.13%, due 11/15/27 .......... 1,072,128 1,067,660
------------ ------------
U.S. Treasury Notes - 34.8%
U.S. Treasury Notes,
100,000 7.00%, due 04/15/99 .......... 100,049 100,125
310,000 6.25%, due 05/31/99 .......... 310,781 310,775
175,000 7.75%, due 11/30/99 .......... 176,498 178,391
525,000 5.75%, due 11/15/00 .......... 532,925 530,906
680,000 6.25%, due 06/30/02 .......... 701,814 701,675
265,000 6.25%, due 02/15/03 .......... 274,584 274,689
100,000 5.50%, due 05/31/03 .......... 103,307 101,094
180,000 7.00%, due 07/15/06 .......... 199,950 196,931
100,000 5.50%, due 08/15/28 .......... 100,917 95,656
------------ ------------
2,500,825 2,490,242
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .................. 3,572,953 3,557,902
------------ ------------
Shares
------
WARRANTS - 0.0%
Energy and Utilities - 0.0%
50 Forman Petroleum Corp.,
06/01/04+ .................... 1 1
------------ ------------
TOTAL INVESTMENTS - 96.6% ....... $ 6,938,602 6,898,632
============
Other Assets and
Liabilities (Net) - 3.4% ..... 239,869
------------
NET ASSETS - 100.0%
(688,226 shares
outstanding) ................ $ 7,138,501
============
- ----------
For Federal tax purposes:
Aggregate cost .................. $ 6,938,602
============
Gross unrealized appreciation ... $ 41,583
Gross unrealized depreciation ... (81,553)
------------
Net unrealized depreciation ..... $ (39,970)
============
(a) Security fair valued as determined by the Board of Trustees.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At March
31, 1999, the market value of Rule 144A securities amounted to $151,190 or
2.1% of net assets.
+ Non-income producing security.
See accompanying notes to financial statements.
9
<PAGE>
The Gabelli Westwood SmallCap Equity Fund
Portfolio of Investments -- March 31, 1999 (Unaudited)
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 96.4%
Automotive: Parts and Accessories - 2.1%
11,500 Dura Automotive Systems Inc.+ ... $ 336,523 $ 324,875
------------ ------------
Broadcasting - 0.7%
9,200 Cumulus Media Inc.+ ............. 104,988 108,100
------------ ------------
Business Services - 7.2%
26,100 International Telecommunication
Data Systems Inc.+ ........... 412,832 322,988
7,700 NCO Group Inc.+ ................. 292,572 284,900
7,300 Profit Recovery Group
International Inc.+ .......... 229,077 288,350
10,200 Whittman-Hart Inc.+ ............. 197,105 219,300
------------ ------------
1,131,586 1,115,538
------------ ------------
Communications Equipment - 5.4%
7,600 Antec Corp.+ .................... 133,980 163,400
4,300 Aware Inc.+ ..................... 158,181 202,100
7,150 Dycom Industries Inc.+ .......... 180,598 311,025
1,700 RF Micro Devices Inc.+ .......... 75,756 162,669
------------ ------------
548,515 839,194
------------ ------------
Computer Software and Services - 15.9%
6,500 AXENT Technologies Inc.+ ........ 214,537 156,406
3,500 Concentric Network Corp.+ ....... 119,150 261,624
4,700 Digital River Inc.+ ............. 142,388 188,000
5,700 Fundtech Ltd.+ .................. 78,104 171,713
4,000 Henry (Jack) & Associates ....... 158,234 147,000
8,400 Kronos Inc.+ .................... 180,938 205,800
17,900 Mentor Graphics Corp.+ .......... 244,743 241,650
4,200 Micromuse Inc.+ ................. 111,518 193,200
2,600 New Era of Networks Inc.+ ....... 49,823 176,150
3,500 Pegasus Systems Inc.+ ........... 124,250 139,563
22,900 Saville Systems plc, ADR+ ....... 384,688 280,524
4,200 Verity Inc.+ .................... 71,831 140,700
18,000 VideoServer Inc.+ ............... 247,912 139,500
------------ ------------
2,128,116 2,441,830
------------ ------------
Consumer Products - 1.8%
4,200 Chattem Inc.+ ................... 161,028 131,250
6,000 Movado Group Inc. ............... 123,498 150,000
------------ ------------
284,526 281,250
------------ ------------
Diversified Industrial - 1.4%
9,900 AK Steel Holding Corp. .......... 198,556 223,369
------------ ------------
Electronics - 9.0%
5,300 Applied Micro Circuits Corp.+ ... 111,106 226,575
9,200 Galileo Technology Ltd.+ ........ 207,691 269,100
9,400 Lam Research Corp.+ ............. 195,295 272,599
6,500 Semtech Corp.+ .................. 201,558 207,188
5,700 TranSwitch Corp.+ ............... 106,341 257,925
3,900 Veeco Instruments Inc.+ ......... 189,825 144,056
------------ ------------
1,011,816 1,377,443
------------ ------------
Energy and Utilities - 5.9%
19,300 AGL Resources Inc. .............. 407,353 338,956
6,800 Devon Energy Corp. .............. 187,546 187,425
19,900 Gulf Indonesia Resources Ltd.+ .. 181,748 166,663
21,000 PennzEnergy Co. ................. 298,753 220,500
------------ ------------
1,075,400 913,544
------------ ------------
Entertainment - 3.3%
21,900 Cinar Films Inc.+ ............... 428,063 503,700
------------ ------------
Financial Services - 4.7%
15,385 Downey Financial Corp. .......... 414,100 281,738
1,900 TeleBanc Financial Corp.+ ....... 69,922 151,525
13,500 UST Corp. ....................... 325,806 294,890
------------ ------------
809,828 728,153
------------ ------------
Financial Services: Insurance - 1.3%
13,100 ESG Re Ltd. ..................... 290,645 207,963
------------ ------------
Food and Beverage - 4.6%
13,000 CEC Entertainment Inc.+ ......... 310,974 466,375
9,400 Foodmaker Inc.+ ................. 223,759 239,700
------------ ------------
534,733 706,075
------------ ------------
Health Care - 7.5%
3,100 Alkermes Inc.+ .................. 83,625 84,475
2,900 Biomatrix Inc.+ ................. 139,414 226,200
2,500 D & K Healthcare Resources
Inc.+ ........................ 60,271 61,875
5,600 IDEC Pharmaceuticals Corp.+ ..... 174,861 287,700
5,900 King Pharmaceuticals Inc.+ ...... 93,538 163,725
6,700 MedQuist Inc.+ .................. 197,069 201,000
10,200 SangStat Medical Corp.+ ......... 231,203 126,225
------------ ------------
979,981 1,151,200
------------ ------------
Manufacturing - 2.6%
10,500 Kulicke & Soffa Industries
Inc.+ ........................ 308,080 265,125
5,600 Mettler-Toledo International
Inc.+ ........................ 114,423 138,600
------------ ------------
422,503 403,725
------------ ------------
Medical Equipment and Supplies - 7.4%
5,300 Closure Medical Corp.+ .......... 123,067 201,400
10,000 Cytyc Corp.+ .................... 146,016 138,750
5,100 MiniMed Inc.+ ................... 325,672 518,287
7,350 Xomed Surgical Products Inc.+ ... 202,360 288,488
------------ ------------
797,115 1,146,925
------------ ------------
Real Estate Investment Trusts - 2.7%
9,800 Bedford Property Investors Inc... 171,879 143,325
6,900 U.S. Restaurant Properties Inc... 175,935 133,256
5,000 Urban Shopping Centers Inc. ..... 161,884 143,438
------------ ------------
509,698 420,019
------------ ------------
Retail - 8.2%
12,700 Ames Department Stores Inc.+ .... 296,647 471,488
10,500 AnnTaylor Stores Corp.+ ......... 251,676 463,969
7,500 Chico's FAS Inc.+ ............... 178,588 161,250
5,750 Cost Plus Inc.+ ................. 112,831 168,906
------------ ------------
839,742 1,265,613
------------ ------------
Transportation - 4.7%
8,700 Alaska Airgroup Inc.+ ........... 347,645 413,250
12,200 MotivePower Industries Inc.+ .... 330,662 306,525
------------ ------------
678,307 719,775
------------ ------------
TOTAL COMMON STOCKS ............. 13,110,641 14,878,291
------------ ------------
TOTAL INVESTMENTS - 96.4% ....... $ 13,110,641 14,878,291
============
Other Assets and
Liabilities (Net) - 3.6% ..... 554,323
------------
NET ASSETS - 100.0%
(1,116,268 shares
outstanding) .................. $ 15,432,614
============
- ----------
For Federal tax purposes:
Aggregate cost .................. $ 13,110,641
============
Gross unrealized appreciation ... $ 2,931,565
Gross unrealized depreciation ... (1,163,915)
------------
Net unrealized appreciation ..... $ 1,767,650
============
+ Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
10
<PAGE>
The Gabelli Westwood Realty Fund
Portfolio of Investments -- March 31, 1999 (Unaudited)
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 98.2%
Real Estate Investment Trusts - 98.2%
Apartments - 16.2%
1,300 Apartment Investment &
Management Co., Cl. A ........ $ 47,635 $ 47,125
2,600 Archstone Communities Trust ..... 58,163 52,325
1,600 Avalon Bay Communities Inc. ..... 60,558 50,600
1,000 BRE Properties Inc., Cl. A ...... 25,994 22,625
700 Camden Property Trust ........... 18,302 17,325
1,600 Equity Residential Properties
Trust ........................ 80,857 65,999
300 Essex Property Trust Inc. ....... 9,163 7,838
400 Post Properties Inc. ............ 14,964 14,400
500 Walden Residential Properties
Inc. ......................... 9,238 8,813
------------ ------------
324,874 287,050
------------ ------------
Diversified Property - 17.4%
1,500 Bedford Property Investors
Inc. ......................... 28,310 21,938
2,500 Catellus Development Corp.+ ..... 42,954 33,438
1,100 Colonial Properties Trust ....... 32,453 28,050
2,200 Crescent Real Estate Equities
Co. .......................... 75,673 47,300
2,100 Duke Realty Investments Inc. .... 49,733 45,150
1,500 Liberty Property Trust .......... 35,770 31,125
1,900 Meditrust Corp. ................. 25,433 23,631
1,200 Rouse Co. ....................... 38,295 26,625
1,500 Vornado Realty Trust ............ 64,209 51,749
------------ ------------
392,830 309,006
------------ ------------
Financial Services - 4.2%
2,100 Amresco Capital Trust ........... 27,288 20,475
1,700 Franchise Finance Corp. ......... 38,711 35,806
700 TriNet Corporate Realty Trust
Inc. ......................... 25,697 17,763
------------ ------------
91,696 74,044
------------ ------------
Health Care - 3.6%
1,500 Health Care REIT Inc. ........... 39,313 32,250
900 Healthcare Realty Trust Inc. .... 20,342 17,100
1,200 LTC Properties Inc. ............. 22,461 14,700
------------ ------------
82,116 64,050
------------ ------------
Hotels - 6.9%
1,000 FelCor Lodging Trust Inc. ....... 37,429 23,188
3,300 Host Marriott Corp. ............. 38,578 36,712
1,000 Innkeepers USA Trust ............ 13,484 9,313
2,025 MeriStar Hospitality Corp. ...... 58,568 36,829
600 Starwood Hotels & Resorts
Worldwide Inc. ................ 26,125 17,138
------------ ------------
174,184 123,180
------------ ------------
Industrial Property - 5.3%
1,500 First Industrial Realty Trust
Inc. ......................... 48,212 35,906
1,900 ProLogis Trust .................. 45,552 38,950
700 Weeks Corp. ..................... 21,640 19,994
------------ ------------
115,404 94,850
------------ ------------
Manufactured Homes - 2.2%
1,600 Manufactured Home
Communities Inc. .............. 41,811 38,400
------------ ------------
Office Property - 16.0%
1,600 Arden Realty Inc. ............... 43,093 35,600
1,300 Boston Properties Inc. .......... 42,701 41,113
1,400 Brandywine Realty Trust ......... 27,001 22,750
3,184 Equity Office Properties Trust .. 94,461 80,992
1,400 Highwoods Properties Inc. ....... 44,674 32,988
1,100 Mack-Cali Realty Corp. .......... 32,956 32,313
2,000 SL Green Realty Corp. ........... 50,992 37,625
------------ ------------
335,878 283,381
------------ ------------
Public Storage - 4.1%
2,200 Public Storage Inc. ............. 66,955 55,000
800 Sovran Self Storage Inc. ........ 19,484 18,650
------------ ------------
86,439 73,650
------------ ------------
Restaurants - 2.1%
1,900 U.S. Restaurant Properties
Inc. ......................... 51,001 36,694
------------ ------------
Shopping Centers - 20.2%
2,300 Burnham Pacific Properties
Inc. ......................... 31,682 24,150
2,300 Developers Diversified
Realty Corp. ................. 45,386 32,919
1,200 General Growth Properties Inc. .. 43,916 38,925
1,550 JDN Realty Corp. ................ 33,389 30,806
1,200 Kimco Realty Corp. .............. 42,530 44,250
700 Macerich Co. .................... 19,812 15,881
1,800 Mills Corp. ..................... 45,207 32,288
1,340 New Plan Excel Realty Trust ..... 31,546 25,711
900 Regency Realty Corp. ............ 20,717 16,875
2,800 Simon Property Group Inc. ....... 87,943 76,824
700 Urban Shopping Centers Inc. ..... 22,359 20,081
------------ ------------
424,487 358,710
------------ ------------
TOTAL COMMON STOCKS ............. 2,120,720 1,743,015
------------ ------------
TOTAL INVESTMENTS - 98.2% ....... $ 2,120,720 1,743,015
============
Other Assets and
Liabilities (Net) - 1.8% .... 32,623
------------
NET ASSETS - 100.0%
(229,507 shares outstanding).. $1,775,638
============
- ----------
For Federal tax purposes:
Aggregate cost .................. $ 2,120,720
============
Gross unrealized appreciation ... $ 1,720
Gross unrealized depreciation ... (379,425)
------------
Net unrealized depreciation ..... $ (377,705)
============
+ Non-income producing security.
See accompanying notes to financial statements.
11
<PAGE>
The Gabelli Westwood Mighty Mites(SM) Fund
Portfolio of Investments -- March 31, 1999 (Unaudited)
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS - 72.2%
Aviation: Parts and Services - 2.2%
8,000 Aviall Inc.+ .................... $ 118,462 $ 124,000
3,500 Kaman Corp., Cl. A .............. 60,690 44,844
------------ ------------
179,152 168,844
------------ ------------
Broadcasting - 1.8%
10,300 Granite Broadcasting Corp.+ ..... 72,018 68,238
5,000 Gray Communications
Systems Inc., Cl. B .......... 66,000 66,875
------------ ------------
138,018 135,113
------------ ------------
Business Services - 1.5%
1,500 Hach Co. ........................ 15,770 17,063
6,000 Nashua Corp.+ ................... 86,958 69,000
1,300 Temco Service Industries Inc.+ .. 32,825 30,225
------------ ------------
135,553 116,288
------------ ------------
Cable - 2.1%
13,500 Mercom Inc.+ .................... 153,360 162,000
------------ ------------
Communications Equipment - 4.3%
1,000 Allen Telecom Inc.+ ............. 5,550 6,063
20,000 Aydin Corp.+ .................... 261,938 263,750
1,500 Preformed Line Products Co. ..... 42,825 32,063
6,000 Telesoft Corp.+ ................. 32,288 28,500
------------ ------------
342,601 330,376
------------ ------------
Computer Hardware - 0.2%
6,000 NUR Macroprinters Ltd.+ ......... 17,625 17,250
------------ ------------
Computer Software and Services - 1.0%
25,000 Oak Technology Inc.+ ............ 90,250 76,563
------------ ------------
Consumer Products - 3.9%
1,000 Adams Golf Inc.+ ................ 7,313 4,250
2,500 Day Runner Inc.+ ................ 33,506 30,313
5,000 General Cigar Holdings Inc.,
Cl. A+ ....................... 47,500 46,563
13,000 General Housewares Corp. ........ 148,434 134,874
1,000 National Presto Industries
Inc. ......................... 39,456 35,438
9,700 Weider Nutrition International
Inc. ......................... 56,648 46,075
------------ ------------
332,857 297,513
------------ ------------
Consumer Services - 1.2%
10,800 Bowlin Outdoor Advertising &
Travel Centers Inc.+ ......... 74,602 75,600
4,500 Thousand Trails Inc.+ ........... 17,969 19,688
------------ ------------
92,571 95,288
------------ ------------
Distribution - 0.0%
10 Boston Sand & Gravel Co.+ ....... 3,600 3,500
------------ ------------
Diversified Industrial - 4.2%
1,600 Kreisler Manufacturing Corp.+ ... 9,425 6,800
2,500 Matthews International Corp.,
Cl. A ....................... 70,180 68,438
20,000 PubliCard Inc.+ ................. 33,692 185,000
2,200 Vallen Corp.+ ................... 42,925 37,400
3,000 WHX Corp.+ ...................... 38,406 23,625
------------ ------------
194,628 321,263
------------ ------------
Energy and Utilities - 11.3%
3,000 Delta Natural Gas Co. Inc. ...... 53,675 53,625
8,700 El Paso Electric Co.+ ........... 73,079 66,338
5,800 Energy West Inc. ................ 54,694 50,750
4,000 Fall River Gas Co. .............. 64,450 70,750
7,500 Florida Public Utilities Co. .... 113,047 109,687
5,000 Home-Stake Oil & Gas Co. ........ 30,656 19,688
2,500 Madison Gas & Electric Co. ...... 56,950 48,750
1,000 Pennichuck Corp. ................ 21,000 20,688
2,500 Petroleum Geo-Services ASA+ ..... 38,225 38,125
500 Piedmont Natural Gas Co. ........ 17,306 17,500
3,000 Providence Energy Corp. ......... 61,588 55,125
1,500 SJW Corp. ....................... 92,049 97,124
3,500 St. Joseph Light & Power Co. .... 65,244 71,531
3,800 Unitil Corp. .................... 91,746 87,399
5,100 Valley Resources Inc. ........... 63,574 53,550
------------ ------------
897,283 860,630
------------ ------------
Entertainment - 2.0%
1,306 Fair Grounds Corp.+ ............. 33,156 35,262
2,000 Fisher Companies Inc. ........... 136,870 116,000
------------ ------------
170,026 151,262
------------ ------------
Equipment and Supplies - 4.6%
7,000 Daniel Industries Inc. .......... 98,725 106,749
3,000 Eastern Co. ..................... 76,419 66,375
5,000 Haskel International Inc.,
Cl. A ........................ 59,063 61,875
8,500 Raytech Corp.+ .................. 42,069 24,172
8,200 SL Industries Inc. .............. 102,972 96,350
------------ ------------
379,248 355,521
------------ ------------
Financial Services - 7.4%
5,000 Crazy Woman Creek Bancorp Inc. .. 72,786 65,000
1,000 Creditrust Corp.+ ............... 18,915 19,750
3,400 Doral Financial Corp. ........... 59,640 62,475
4,000 NMBT Corp. ...................... 72,306 64,000
2,500 One Valley Bancorp Inc. ......... 79,093 87,187
2,100 Reliance Bancorp Inc. ........... 54,869 60,375
3,000 Roslyn Bancorp Inc. ............. 55,888 50,625
300 Southwest Securities Group
Inc. ......................... 8,078 8,475
3,700 State Bancorp Inc. .............. 71,188 65,675
4,500 Sun Bancorp Inc.+ ............... 96,187 84,375
------------ ------------
588,950 567,937
------------ ------------
Food and Beverage - 2.4%
3,800 Broughton Foods Co. ............. 64,687 41,800
700 Celestial Seasonings Inc.+ ...... 15,472 15,138
7,500 Hansen Natural Corp.+ ........... 36,347 27,656
4,000 Horizon Organic Holding Corp.+ .. 52,875 58,999
1,000 Kahiki Supper Club Inc.+ ........ 3,375 1,563
4,000 Natural Alternatives
International Inc.+ .......... 39,750 19,500
4,000 Nutraceutical International
Corp.+ ....................... 39,938 17,250
1,000 Sterling Sugars Inc.+ ........... 7,625 5,563
------------ ------------
260,069 187,469
------------ ------------
See accompanying notes to financial statements.
12
<PAGE>
The Gabelli Westwood Mighty Mites(SM) Fund
Portfolio of Investments (Continued) -- March 31, 1999 (Unaudited)
================================================================================
Shares Cost Value
------ ---- -----
COMMON STOCKS (Continued)
Health Care - 0.1%
4,000 Matrix Pharmaceutical Inc.+ ..... $ 12,125 $ 8,375
------------ ------------
Home/ Office Furnishings - 0.1%
500 Mity-Lite Inc.+ ................. 7,625 7,625
------------ ------------
Medical Equipment and Supplies - 1.0%
4,000 BioSource International Inc.+ ... 13,000 17,000
1,200 Inamed Corp.+ ................... 13,200 15,900
8,000 Span-America Medical Systems
Inc. ......................... 46,188 34,000
1,000 Young Innovations Inc.+ ......... 12,125 11,750
------------ ------------
84,513 78,650
------------ ------------
Publishing - 3.7%
8,000 CMP Media Inc., Cl. A+ .......... 163,392 246,000
7,000 Individual Investor Group
Inc.+ ........................ 29,853 39,375
------------ ------------
193,245 285,375
------------ ------------
Real Estate - 2.3%
2,500 Blue Ridge Real Estate Co.+ ..... 28,650 24,375
1,100 Bresler & Reiner Inc.+ .......... 32,125 32,588
51 Case Pomeroy & Co. Inc.,
Cl. B ........................ 64,525 66,427
4,000 Gyrodyne Company of America
Inc.+ ........................ 70,513 57,000
------------ ------------
195,813 180,390
------------ ------------
Retail - 4.6%
800 Bozzuto's Inc.+ ................. 32,000 27,200
5,000 Lillian Vernon Corp. ............ 77,750 60,000
2,000 Marsh Supermarkets Inc. ......... 34,188 22,750
32,000 Scheib (Earl) Inc.+ ............. 175,599 159,999
3,000 Schultz Sav-O Stores Inc. ....... 47,000 49,125
2,200 Village Super Market Inc.,
Cl. A+ ....................... 38,000 31,075
------------ ------------
404,537 350,149
------------ ------------
Specialty Chemicals - 2.1%
15,000 Material Sciences Corp.+ ........ 147,838 95,625
5,000 Sybron Chemicals Inc.+ .......... 82,694 65,625
------------ ------------
230,532 161,250
------------ ------------
Telecommunications - 2.0%
2,000 CoreComm Ltd.+ .................. 21,770 73,500
3,000 Startec Global Communications
Corp.+ ....................... 28,713 23,250
2,000 Viatel Inc.+ .................... 26,000 57,000
------------ ------------
76,483 153,750
------------ ------------
Textiles - 0.4%
20,000 Carlyle Industries Inc.+ ........ 20,350 15,938
3,500 Lakeland Industries Inc.+ ....... 33,712 15,750
------------ ------------
54,062 31,688
------------ ------------
Transportation - 0.1%
6,000 Air Methods Corp.+ .............. 25,578 9,375
------------ ------------
Wireless Communications - 5.7%
2,000 Cellular Communications of
Puerto Rico Inc.+ ............ 27,707 54,000
30,000 Leap Wireless International
Inc.+ ........................ 179,688 386,249
------------ ------------
207,395 440,249
------------ ------------
TOTAL COMMON STOCKS ............. 5,467,699 5,553,693
------------ ------------
Principal
Amount
------
U.S. GOVERNMENT OBLIGATIONS - 30.2%
$2,325,000 U.S. Treasury Bills,
4.44% to 4.71%++,
due 04/15/99 to 05/27/99 ..... 2,317,834 2,317,533
------------ ------------
TOTAL INVESTMENTS - 102.4% ...... $ 7,785,533 7,871,226
============
Other Assets and
Liabilities (Net) - (2.4)% ... (187,946)
------------
NET ASSETS - 100.0%
(700,088 shares outstanding).. $ 7,683,280
============
- ----------
For Federal tax purposes:
Aggregate cost .................. $ 7,785,533
============
Gross unrealized appreciation ... $ 646,191
Gross unrealized depreciation ... (560,498)
------------
Net unrealized appreciation ..... $ 85,693
============
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
13
<PAGE>
The Gabelli Westwood Funds
Statement of Assets and Liabilities
March 31, 1999 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Equity Balanced Intermediate SmallCap Realty Mighty
Fund Fund Bond Fund Equity Fund Fund Mites(SM) Fund
------------ ------------ ------------ ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value
(Cost $157,096,300, $147,143,405,
$6,938,602, $13,110,641, $2,120,720
and $7,785,533, respectively) ......... $180,923,927 $160,009,291 $6,898,632 $14,878,291 $1,743,015 $7,871,226
Cash ...................................... 4,537,857 6,824,330 157,860 635,046 33,810 --
Dividends and interest receivable ......... 244,528 901,166 130,008 5,553 12,390 4,884
Receivable for Fund shares sold ........... 81,072 98,990 -- -- -- --
Receivable for investments sold ........... 1,030,783 1,703,937 -- 157,930 -- --
Receivable from adviser ................... -- -- 808 -- 4,085 6,294
Deferred organizational expenses .......... -- -- -- 7,585 6,188 39,076
Prepaid expenses and other assets ......... -- -- -- 3,770 2,647 8,122
------------ ------------ ---------- ----------- ---------- ----------
Total Assets .......................... 186,818,167 169,537,714 7,187,308 15,688,175 1,802,135 7,929,602
------------ ------------ ---------- ----------- ---------- ----------
Liabilities:
Payable to custodian ...................... -- -- -- -- -- 14,558
Dividends payable ......................... -- -- 28,940 -- -- --
Payable for Fund shares redeemed .......... 93,074 25,066 -- 1,086 -- --
Payable for investments purchased ......... 477,198 1,447,772 -- 222,588 13,465 210,228
Payable for investment advisory fees ...... 160,918 106,795 -- 10,059 -- --
Payable for distribution fees ............. 40,736 37,873 1,541 3,240 388 1,548
Other accrued expenses .................... 95,097 56,423 18,326 18,588 12,644 19,988
------------ ------------ ---------- ----------- ---------- ----------
Total Liabilities ..................... 867,023 1,673,929 48,807 255,561 26,497 246,322
------------ ------------ ---------- ----------- ---------- ----------
Net Assets ............................ $185,951,144 $167,863,785 $7,138,501 $15,432,614 $1,775,638 $7,683,280
============ ============ ========== =========== ========== ==========
Net Assets consist of:
Shares of beneficial interest, at par
value ................................. $ 18,446 $ 14,187 $ 688 $ 1,116 $ 230 $ 700
Additional paid-in capital ................ 148,250,735 148,403,303 7,526,001 13,836,035 2,309,674 7,220,593
Accumulated (distributions in excess of)
net investment income ................. 158,770 28,019 -- (45,868) 32,920 22,609
Accumulated (distributions in excess of)
net realized gain on investments ...... 13,695,566 6,552,390 (348,218) (126,319) (189,481) 353,685
Net unrealized appreciation
(depreciation) on investments ......... 23,827,627 12,865,886 (39,970) 1,767,650 (377,705) 85,693
------------ ------------ ---------- ----------- ---------- ----------
Total Net Assets ...................... $185,951,144 $167,863,785 $7,138,501 $15,432,614 $1,775,638 $7,683,280
============ ============ ========== =========== ========== ==========
Shares of Beneficial Interest:
Retail Class:
Shares of beneficial interest
outstanding ($0.001 par value) ........ 18,216,792 13,308,425 688,226 1,116,268 229,507 700,088
============ ============ ========== =========== ========== ==========
Net Asset Value, offering and redemption
price per share ....................... $ 10.08 $ 11.83 $ 10.37 $ 13.83 $ 7.74 $ 10.97
============ ============ ========== =========== ========== ==========
Service Class:
Shares of beneficial interest
outstanding ($0.001 par value) ........ 229,692 878,513
============ ============
Net Asset Value and redemption
price per share ....................... $ 10.08 $ 11.81
============ ============
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 March 31, 1999) ..... $ 10.50 $ 12.30
============ ============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
The Gabelli Westwood Funds
Statement of Operations
For the Six Months Ended March 31, 1999 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Equity Balanced Intermediate SmallCap Realty Mighty
Fund Fund Bond Fund Equity Fund Fund Mites(SM) Fund
------------ ------------ ------------ ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends ................................. $ 1,612,150 $ 861,401 $ -- $ 54,379 $ 63,429 $ 31,322
Interest .................................. 241,990 1,673,964 213,928 -- -- 43,918
------------ ------------ ---------- ----------- ---------- ----------
Total Investment Income ............... 1,854,140 2,535,365 213,928 54,379 63,429 75,240
------------ ------------ ---------- ----------- ---------- ----------
Expenses:
Investment advisory fees .................. 959,767 592,368 22,664 70,650 9,290 30,098
Distribution fees -- Retail Class ......... 236,836 182,788 9,443 17,663 2,322 7,524
Distribution fees -- Service Class ........ 6,208 29,336 -- -- -- --
Legal and audit fees ...................... 28,653 24,092 12,596 10,762 8,317 9,246
Custodian fees ............................ 16,233 14,125 5,650 9,575 5,823 7,029
Shareholder services fees ................. 73,887 39,732 5,151 10,586 2,432 8,665
Registration fees ......................... 29,662 18,397 6,383 10,247 6,029 7,906
Shareholder report expenses ............... 25,199 12,856 792 1,390 716 928
Organizational expenses ................... -- -- -- 1,255 880 4,732
Miscellaneous expenses .................... 67,217 43,096 2,509 2,987 1,925 2,292
------------ ------------ ---------- ----------- ---------- ----------
Total Expenses ........................ 1,443,662 956,790 65,188 135,115 37,734 78,420
------------ ------------ ---------- ----------- ---------- ----------
Less:
Expense reimbursements ................ -- -- (25,308) (19,564) (22,017) (47,865)
Custodian fee credits ................. (16,233) (14,125) (2,107) (9,575) (1,783) (420)
------------ ------------ ---------- ----------- ---------- ----------
Total Net Expenses .................... 1,427,429 942,665 37,773 105,976 13,934 30,135
------------ ------------ ---------- ----------- ---------- ----------
Net Investment Income (Loss) .................. 426,711 1,592,700 176,155 (51,597) 49,495 45,105
------------ ------------ ---------- ----------- ---------- ----------
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized gain (loss) on investment
transactions .......................... 14,442,348 7,465,232 11,619 5,464 (145,930) 352,730
Net change in unrealized appreciation
(depreciation) on investments ......... 12,405,331 4,752,844 (279,173) 2,876,870 (32,552) 345,494
------------ ------------ ---------- ----------- ---------- ----------
Net realized and unrealized gain (loss)
on investments ........................ 26,847,679 12,218,076 (267,554) 2,882,334 (178,482) 698,224
------------ ------------ ---------- ----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations ................. $ 27,274,390 $ 13,810,776 $ (91,399) $ 2,830,737 $ (128,987) $ 743,329
============ ============ ========== =========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Equity Fund Balanced Fund
For the For the For the For the
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 1999 September 30, March 31, 1999 September 30,
(Unaudited) 1998 (Unaudited) 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ......................... $ 426,711 $ 1,284,508 $ 1,592,700 $ 2,836,195
Net realized gain on investment transactions .. 14,442,348 4,550,079 7,465,232 1,192,217
Net change in unrealized appreciation
on investments ............................ 12,405,331 (9,210,035) 4,752,844 (2,657,020)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets
resulting from operations ............... 27,274,390 (3,375,448) 13,810,776 1,371,392
---------------- ---------------- ---------------- ----------------
Distributions to shareholders:
Net investment income
Retail Class .............................. (1,202,243) (1,016,825) (1,565,439) (2,450,244)
Service Class ............................. (6,778) (9,795) (104,377) (321,577)
---------------- ---------------- ---------------- ----------------
(1,209,021) (1,026,620) (1,669,816) (2,771,821)
---------------- ---------------- ---------------- ----------------
Net realized gain on investment transactions
Retail Class .............................. (4,421,909) (5,772,109) (1,447,391) (3,804,112)
Service Class ............................. (55,551) (63,562) (121,230) (795,071)
---------------- ---------------- ---------------- ----------------
(4,477,460) (5,835,671) (1,568,621) (4,599,183)
---------------- ---------------- ---------------- ----------------
Total distributions to shareholders ....... (5,686,481) (6,862,291) (3,238,437) (7,371,004)
---------------- ---------------- ---------------- ----------------
Shares of beneficial interest transactions:
Proceeds from shares issued
Retail Class .............................. 27,256,476 121,352,169 45,232,658 86,594,633
Service Class ............................. 222,593 2,561,265 763,050 5,665,274
---------------- ---------------- ---------------- ----------------
27,479,069 123,913,434 45,995,708 92,259,907
---------------- ---------------- ---------------- ----------------
Proceeds from reinvestment of dividends
Retail Class .............................. 5,409,705 6,623,726 2,899,148 6,031,341
Service Class ............................. 60,422 72,059 182,452 990,631
---------------- ---------------- ---------------- ----------------
5,470,127 6,695,785 3,081,600 7,021,972
---------------- ---------------- ---------------- ----------------
Cost of shares redeemed
Retail Class .............................. (45,715,193) (71,156,328) (28,517,723) (26,091,459)
Service Class ............................. (730,015) (3,390,442) (6,074,759) (5,862,232)
---------------- ---------------- ---------------- ----------------
(46,445,208) (74,546,770) (34,592,482) (31,953,691)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets
from shares of beneficial interest
transactions ............................ (13,496,012) 56,062,449 14,484,826 67,328,188
---------------- ---------------- ---------------- ----------------
Net increase in net assets ................ 8,091,897 45,824,710 25,057,165 61,328,576
Net Assets:
Beginning of period ........................... 177,859,247 132,034,537 142,806,620 81,478,044
---------------- ---------------- ---------------- ----------------
End of period ................................. $ 185,951,144 $ 177,859,247 $ 167,863,785 $ 142,806,620
================ ================ ================ ================
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets (Continued)
================================================================================
<TABLE>
<CAPTION>
Intermediate Bond Fund SmallCap Equity Fund
For the For the For the For the
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 1999 September 30, March 31, 1999 September 30,
(Unaudited) 1998 (Unaudited) 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) ................... $ 176,155 $ 354,799 $ (51,597) $ (88,215)
Net realized gain on investment transactions ... 11,619 128,342 5,464 3,145
Net change in unrealized appreciation
(depreciation) on investments .............. (279,173) 160,804 2,876,870 (2,467,027)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets
resulting from operations ................ (91,399) 643,945 2,830,737 (2,552,097)
---------------- ---------------- ---------------- ----------------
Distributions to shareholders:
Net investment income .......................... (176,206) (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
investment transactions .................... -- -- -- (133,930)
---------------- ---------------- ---------------- ----------------
Total distributions to shareholders ........ (176,206) (354,799) -- (536,205)
---------------- ---------------- ---------------- ----------------
Shares of beneficial interest transactions:
Proceeds from shares issued .................... 1,643,856 3,406,081 2,760,411 22,466,630
Proceeds from reinvestment of dividends ........ 132,724 237,998 -- 530,206
Cost of shares redeemed ........................ (1,988,402) (2,227,131) (1,852,063) (16,760,984)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets
from shares of beneficial interest
transactions ............................. (211,822) 1,416,948 908,348 6,235,852
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets ...... (479,427) 1,706,094 3,739,085 3,147,550
Net Assets:
Beginning of period ............................ 7,617,928 5,911,834 11,693,529 8,545,979
---------------- ---------------- ---------------- ----------------
End of period .................................. $ 7,138,501 $ 7,617,928 $ 15,432,614 $ 11,693,529
================ ================ ================ ================
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
The Gabelli Westwood Funds
Statement of Changes in Net Assets (Continued)
================================================================================
<TABLE>
<CAPTION>
Realty Fund Mighty Mites(SM) Fund
For the For the For the For the
Six Months Ended Year Ended Six Months Ended Period Ended
March 31, 1999 September 30, March 31, 1999 September 30,
(Unaudited) 1998(a) (Unaudited) 1998(b)
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ...................... $ 49,495 $ 79,633 $ 45,105 $ 20,172
Net realized gain (loss) on investment
transactions ........................... (145,930) (3,949) 352,730 955
Net change in unrealized appreciation
(depreciation) on investments .......... (32,552) (345,153) 345,494 (259,801)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets
resulting from operations ............ (128,987) (269,469) 743,329 (238,674)
---------------- ---------------- ---------------- ----------------
Distributions to shareholders:
Net investment income ...................... (28,048) (69,760) (47,322) --
In excess of net realized gain on
investment transactions ................ -- (39,769) -- --
---------------- ---------------- ---------------- ----------------
Total distributions to shareholders .... (28,048) (109,529) (47,322) --
---------------- ---------------- ---------------- ----------------
Shares of beneficial interest transactions:
Proceeds from shares issued ................ 390,910 3,991,590 23,130,484 6,596,508
Proceeds from reinvestment of dividends .... 19,376 96,235 46,437 --
Cost of shares redeemed .................... (292,345) (1,894,095) (21,028,035) (1,519,447)
---------------- ---------------- ---------------- ----------------
Net increase in net assets from
shares of beneficial interest
transactions ......................... 117,941 2,193,730 2,148,886 5,077,061
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets .. (39,094) 1,814,732 2,844,893 4,838,387
Net Assets:
Beginning of period ........................ 1,814,732 -- 4,838,387 --
---------------- ---------------- ---------------- ----------------
End of period .............................. $ 1,775,638 $ 1,814,732 $ 7,683,280 $ 4,838,387
================ ================ ================ ================
</TABLE>
(a) From commencement of operations on September 30, 1997.
(b) From commencement of operations on May 11, 1998.
See accompanying notes to financial statements.
18
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Unaudited)
================================================================================
1. Description. 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(SM)
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 March 31, 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). 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.
19
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
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
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.
Provision for Income Taxes. The Funds have qualified and intend to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. 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 of Credit Risk. Considering the Realty Fund invests a substantial
portion of its assets in REITS, 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, 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").
20
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
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, 0.60% for the Intermediate Bond Fund of each Fund's average
daily net assets. For the six months ended March 31, 1999, the Adviser was
entitled to fees of $959,767; $70,650; $9,290; $30,098; $592,368 and $22,664 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 six months ended March 31, 1999, the Adviser
reimbursed expenses in the amount of $25,308; $19,564; $22,017 and $47,865,
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 six
months ended March 31, 1999, the Adviser paid to the Sub-Adviser fees of
$245,962; $18,172; $2,379; $139,530 and $4,828 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 Funds, LLC, serves as distributor of the
Funds. The Plan authorizes payment by the Funds to Gabelli & Company in
connection with the distribution of its Retail Class shares at an annual rate of
0.25% of the average daily net assets of the Retail Class shares each fiscal
year. Such payments are accrued daily and paid monthly. For the six months ended
March 31, 1999, the Funds incurred distribution expenses in the amounts of
$236,836; $182,788; $9,443; $17,663; $2,322 and $7,524 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 Fund authorizes 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 the Service Class shares
of the Equity and Balanced Funds each fiscal year. Such payments are accrued
daily and paid monthly. For the six months ended March 31, 1999, the Funds
incurred distribution expenses in the amounts of $6,208 for the Equity Fund and
$29,336 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 six months
ended March 31, 1999, other than short term securities, are as follows:
21
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
Purchases Sales
--------- -----
Equity Fund .................. $74,907,872 $95,045,686
Balanced Fund ................ 71,383,966 56,912,937
Intermediate Bond Fund ....... 4,861,772 4,989,780
SmallCap Equity Fund ......... 12,953,505 12,314,379
Realty Fund .................. 635,358 453,087
Mighty Mites Fund ............ 3,674,567 1,291,271
7. Shares of Beneficial Interest. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
Equity Fund Balanced Fund
----------- -------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, September 30, March 31, September 30,
1999 1998 1999 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Retail Class
Shares sold ........................................ 2,790,093 12,764,712 3,832,140 7,583,810
Shares issued upon reinvestment of dividends ....... 552,034 742,570 247,438 549,677
Shares redeemed .................................... (4,643,589) (7,434,151) (2,445,324) (2,292,678)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in Retail Class shares.... (1,301,462) 6,073,131 1,634,254 5,840,809
================ ================ ================ ================
Service Class
Shares sold ........................................ 22,883 272,855 65,512 499,396
Shares issued upon reinvestment of dividends ....... 6,159 8,078 15,618 90,852
Shares redeemed .................................... (74,570) (354,511) (533,878) (519,210)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in Service Class shares .. (45,528) (73,578) (452,748) 71,038
================ ================ ================ ================
<CAPTION>
Intermediate Bond Fund SmallCap Equity Fund
---------------------- --------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, September 30, March 31, September 30,
1999 1998 1999 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Retail Class
Shares sold ........................................ 155,240 323,824 211,706 1,575,803
Shares issued upon reinvestment of dividends ....... 12,565 22,670 -- 42,932
Shares redeemed .................................... (189,018) (211,584) (141,515) (1,162,861)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in Retail Class shares ... (21,213) 134,910 70,191 455,874
================ ================ ================ ================
<CAPTION>
Realty Fund Mighty Mites(SM) Fund
----------- ---------------------
Six Months Ended Year Ended Six Months Ended Period Ended
March 31, September 30, September 30, March 31,
1999 1998(a) 1999 1998(b)
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Retail Class
Shares sold ........................................ 48,252 401,821 2,134,572 649,926
Shares issued upon reinvestment of dividends ....... 2,476 10,176 4,333 --
Shares redeemed .................................... (36,452) (196,766) (1,937,410) (151,333)
---------------- ---------------- ---------------- ----------------
Net increase in Retail Class shares .............. 14,276 215,231 201,495 498,593
================ ================ ================ ================
</TABLE>
(a) From commencement of operations on September 30, 1997.
(b) From commencement of operations on May 11, 1998.
22
<PAGE>
The Gabelli Westwood Funds
Notes to Financial Statements (Continued)
================================================================================
8. Federal Income Tax Information. The Intermediate Bond Fund has a capital loss
carryforward for Federal income tax purposes of $359,838 available through
September 2003. This loss carryforward is available to reduce future
distributions of net capital gains to shareholders.
Under current tax law, capital losses realized after October 31 may be deferred
and treated as occurring on the first day of the following fiscal year. The
SmallCap Equity Fund and Realty Fund incurred losses of $42,864 and $33,134,
respectively, after October 31, 1997. Such losses will be treated, for tax
purposes, as arising on October 1, 1998.
9. Affiliate Event. On February 9, 1999, Gabelli Funds Inc., an affiliate of the
Adviser reorganized its operations and corporate structure by transferring a
portion of its assets and liabilities to a successor adviser, Gabelli Funds,
LLC, which is wholly owned by Gabelli Asset Management Inc., a newly formed
publicly traded company that is 80% owned by the former Gabelli Funds, Inc.
23
<PAGE>
The Gabelli Westwood Funds
Financial Highlights
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
For the Six Months Year Ended September 30,
Ended March 31, 1999 ------------------------------------------------
(Unaudited) 1998 1997
------------------------ --------------------- ----------------------
Equity Fund Retail Service Retail Service Retail Service
Operating performance Class Class Class Class Class Class
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 8.99 $ 8.97 $ 9.57 $ 9.57 $ 7.68 $ 7.69
-------- -------- -------- -------- -------- --------
Net investment income .................... 0.02 0.03 0.07 0.08 0.07 0.06
Net realized and unrealized gain (loss)
on investments ......................... 1.36 1.34 (0.22) (0.25) 2.72 2.71
-------- -------- -------- -------- -------- --------
Total from investment operations ......... 1.38 1.37 (0.15) (0.17) 2.79 2.77
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
Net investment income .................... (0.06) (0.03) (0.06) (0.06) (0.07) (0.06)
Net realized gain on investments ......... (0.23) (0.23) (0.37) (0.37) (0.83) (0.83)
-------- -------- -------- -------- -------- --------
Total distributions ...................... (0.29) (0.26) (0.43) (0.43) (0.90) (0.89)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 10.08 $ 10.08 $ 8.99 $ 8.97 $ 9.57 $ 9.57
======== ======== ======== ======== ======== ========
Total return (a) ......................... 15.4% 15.3% (1.4)% (1.8)% 39.6% 39.3%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) ..... $183,635 $ 2,316 $175,391 $ 2,468 $128,697 $ 3,338
Ratio of net investment income to
average net assets ..................... 0.45%(e) 0.20%(e) 0.73% 0.46% 1.11% 0.85%
Expenses net of waivers/
reimbursements(b) ...................... 1.50%(e) 1.75%(e) 1.47% 1.72% 1.53% 1.78%
Expenses before waivers/
reimbursements ......................... 1.50%(e) 1.75%(e) 1.47% 1.72% 1.59%(d) 1.84%(d)
Portfolio turnover rate .................. 41% 41% 77% 77% 61% 61%
===================================================================================================================================
<CAPTION>
Year Ended September 30,
------------------------------------------------------------------------------
1996 1995 1994
---------------------- ---------------------- ----------------------
Equity Fund Retail Service Retail Service Retail Service
Operating performance Class Class Class Class Class Class(c)
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 6.59 $ 6.57 $ 5.50 $ 5.48 $ 9.91 $ 5.53
-------- -------- -------- -------- -------- --------
Net investment income .................... 0.08 0.06 0.04 0.04 0.10 0.06
Net realized and unrealized gain (loss)
on investments ........................... 1.59 1.58 1.31 1.29 0.64 (0.11)
-------- -------- -------- -------- -------- --------
Total from investment operations ......... 1.67 1.64 1.35 1.33 0.74 (0.05)
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
Net investment income .................... (0.06) -- (0.06) (0.04) (0.07) --
Net realized gain on investments ......... (0.52) (0.52) (0.20) (0.20) (5.08) --
-------- -------- -------- -------- -------- --------
Total distributions ...................... (0.58) (0.52) (0.26) (0.24) (5.15) --
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 7.68 $ 7.69 $ 6.59 $ 6.57 $ 5.50 $ 5.48
======== ======== ======== ======== ======== ========
Total return (a) ......................... 26.9% 26.3% 25.9% 25.5% 9.1% (0.9)%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) ..... $ 29,342 $ 1,221 $ 14,903 $ 68 $ 8,637 $ 254
Ratio of net investment income to
average net assets ...................... 1.16% 0.92% 0.77% 0.64% 1.63% 1.64%(e)
Expenses net of waivers/
reimbursements(b) ........................ 1.50% 1.74% 1.61% 1.85% 0.71% 1.04%(e)
Expenses before waivers/
reimbursements ......................... 1.95%(d) 2.19%(d) 2.29%(d) 2.63%(d) 1.94%(d) 2.29%(d)(e)
Portfolio turnover rate .................. 106% 106% 107% 107% 137% 137%
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Year Ended September 30,
Ended March 31, 1999 -------------------------------------------------
(Unaudited) 1998 1997
----------------------- --------------------- -----------------------
Balanced Fund Retail Service Retail Service Retail Service
Operating performance: Class Class Class Class Class Class
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 10.98 $ 10.96 $ 11.49 $ 11.46 $ 9.71 $ 9.69
-------- -------- -------- -------- -------- --------
Net investment income .................... 0.12 0.13 0.26 0.26 0.25 0.24
Net realized and unrealized gain (loss)
on investments ......................... 0.98 0.95 0.05 0.02 2.36 2.33
-------- -------- -------- -------- -------- --------
Total from investment operations ......... 1.10 1.08 0.31 0.28 2.61 2.57
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
Net investment income .................... (0.13) (0.11) (0.26) (0.22) (0.25) (0.22)
Net realized gain on investments ......... (0.12) (0.12) (0.56) (0.56) (0.58) (0.58)
-------- -------- -------- -------- -------- --------
Total distributions ...................... (0.25) (0.23) (0.82) (0.78) (0.83) (0.80)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 11.83 $ 11.81 $ 10.98 $ 10.96 $ 11.49 $ 11.46
======== ======== ======== ======== ======== ========
Total return (a) ......................... 10.0% 9.9% 2.8% 2.6% 28.3% 28.0%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) ..... $157,493 $ 10,371 $128,222 $ 14,585 $ 67,034 $ 14,444
Ratio of net investment income to
average net assets ..................... 2.03%(e) 1.79%(e) 2.37% 2.16% 2.60% 2.37%
Expenses net of waivers/
reimbursements (f) ..................... 1.19%(e) 1.44%(e) 1.20% 1.45% 1.28% 1.53%
Expenses before waivers/
reimbursements ......................... 1.19%(e) 1.44%(e) 1.20% 1.45% 1.36%(d) 1.61%(d)
Portfolio turnover rate .................. 37% 37% 77% 77% 110% 110%
===================================================================================================================================
<CAPTION>
Year Ended September 30,
---------------------------------------------------------------------------------
1996 1995 1994
----------------------- ----------------------- ----------------------
Balanced Fund Retail Service Retail Service Retail Service
Operating performance: Class Class Class Class Class Class
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 8.47 $ 8.45 $ 7.12 $ 7.10 $ 10.89 $ 10.88
-------- -------- -------- -------- -------- --------
Net investment income .................... 0.22 0.20 0.19 0.17 0.12 0.15
Net realized and unrealized gain (loss)
on investments ......................... 1.37 1.37 1.35 1.35 0.42 0.36
-------- -------- -------- -------- -------- --------
Total from investment operations ......... 1.59 1.57 1.54 1.52 0.54 0.51
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
Net investment income .................... (0.22) (0.20) (0.19) (0.17) (0.13) (0.11)
Net realized gain on investments ......... (0.13) (0.13) -- -- (4.18) (4.18)
-------- -------- -------- -------- -------- --------
Total distributions ...................... (0.35) (0.33) (0.19) (0.17) (4.31) (4.29)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 9.71 $ 9.69 $ 8.47 $ 8.45 $ 7.12 $ 7.10
======== ======== ======== ======== ======== ========
Total return (a) ......................... 19.1% 18.9% 22.0% 21.7% 5.3% 4.7%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) ..... $ 23,158 $ 11,216 $ 6,912 $ 7,212 $ 3,081 $ 10,810
Ratio of net investment income to
average net assets ..................... 2.62% 2.34% 2.47% 2.26% 1.55% 2.15%
Expenses net of waivers/
reimbursements (f) ..................... 1.32% 1.57% 1.35% 1.62% 1.68% 1.17%
Expenses before waivers/
reimbursements ......................... 1.71%(d) 1.96%(d) 1.86%(d) 2.24%(d) 2.36%(d) 2.11%(d)
Portfolio turnover rate .................. 111% 111% 133% 133% 168% 168%
===================================================================================================================================
</TABLE>
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends and does not reflect any
applicable sales charges.
(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 1.48% (Retail Class)
and 1.73% (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.
(c) Prior to January 28, 1994, no shares of the Service Class were issued.
(d) 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.
(e) Annualized.
(f) 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 1.17% (Retail Class)
and 1.42% (Service Class) for 1999, 1.17% (Retail Class) and 1.42%
(Service Class) for 1998, 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.
See accompanying notes to financial statements.
24
<PAGE>
The Gabelli Westwood Funds
Financial Highlights (Continued)
================================================================================
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
For the
Six Months Ended Year Ended September 30,
March 31, 1999 -------------------------------------
(Unaudited) 1998 1997 1996
----------- -------- -------- --------
Retail
Intermediate Bond Fund Class Retail Class
-------- -------------------------------------
<S> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ..................... $ 10.74 $ 10.29 $ 9.88 $ 9.98
-------- -------- -------- --------
Net investment income .................................... 0.24 0.57 0.68 0.51
Net realized and unrealized gain (loss) on investments ... (0.37) 0.45 0.41 (0.10)
-------- -------- -------- --------
Total from investment operations ......................... (0.13) 1.02 1.09 0.41
-------- -------- -------- --------
Distributions to shareholders:
Net investment income .................................... (0.24) (0.57) (0.68) (0.51)
Net realized gain on investments ......................... -- -- -- --
-------- -------- -------- --------
Total distributions ...................................... (0.24) (0.57) (0.68) (0.51)
-------- -------- -------- --------
Net asset value, end of period ........................... $ 10.37 $ 10.74 $ 10.29 $ 9.88
======== ======== ======== ========
Total return(a) .......................................... (1.2)% 10.2% 11.4% 4.5%
Ratios to average net assets and supplemental data:
Net assets, end of period (in 000's) ..................... $ 7,139 $ 7,618 $ 5,912 $ 5,496
Ratio of net investment income to average net assets ..... 4.67%(f) 5.45%(b) 6.71% 5.43%
Expenses net of waivers/reimbursements(b) ................ 1.06%(f) 1.08%(b) 1.11% 1.09%
Expenses before waivers/reimbursements(c) ................ 1.73%(f) 2.08%(b) 1.70% 2.46%
Portfolio turnover rate .................................. 69% 232% 628% 309%
=======================================================================================================================
<CAPTION>
Year Ended September 30,
-----------------------------------------------
1995 1994
--------------------- ---------------------
Retail Service Retail Service
Class Class(d) Class Class(e)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ..................... $ 9.48 $ 9.48 $ 10.73 $ 10.51
-------- -------- -------- --------
Net investment income .................................... 0.52 0.05 0.48 0.41
Net realized and unrealized gain (loss) on investments ... 0.50 (0.14) (1.04) (1.03)
-------- -------- -------- --------
Total from investment operations ......................... 1.02 (0.09) (0.56) (0.62)
-------- -------- -------- --------
Distributions to shareholders:
Net investment income .................................... (0.52) (0.05) (0.48) (0.41)
Net realized gain on investments ......................... -- -- (0.21) --
-------- -------- -------- --------
Total distributions ...................................... (0.52) (0.05) (0.69) (0.41)
-------- -------- -------- --------
Net asset value, end of period ........................... $ 9.98 $ 9.34 $ 9.48 $ 9.48
======== ======== ======== ========
Total return(a) .......................................... 11.1% (1.0)% (5.5)% (6.8)%
Ratios to average net assets and supplemental data:
Net assets, end of period (in 000's) ..................... $ 4,729 $ 0 $ 7,339 $ 76
Ratio of net investment income to average net assets ..... 5.38% 4.85% 4.86% 6.05%(f)
Expenses net of waivers/reimbursements(b) ................ 1.17% 1.45% 0.92% 1.34%(f)
Expenses before waivers/reimbursements(c) ................ 2.47% 4.07% 1.75% 2.37%(f)
Portfolio turnover rate .................................. 165% 70% 203% 203%
==================================================================================================================
</TABLE>
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(b) 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.
(c) 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.
(d) On November 8, 1994, all shares of the Service Class were redeemed and
there have been no further shares issued in this class since that date.
Accordingly, the NAV per share represents the net asset value on November
8, 1994.
(e) Prior to January 28, 1994, no shares of the Service Class were issued.
(f) Annualized.
See accompanying notes to financial statements.
25
<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
For the
Six Months Year Period
Ended Ended Ended
March 31, September September
1999 30, 30,
(Unaudited) 1998 1997
---------- ---------- ----------
Retail Retail Retail
Class Class Class(d)
---------- ---------- ----------
<S> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ............ $ 11.18 $ 14.48 $ 10.00
-------- -------- --------
Net investment income (loss) .................... (0.05) (0.09) 0.08
Net realized and unrealized gain (loss)
on investments ................................ 2.70 (2.39) 4.40
-------- -------- --------
Total from investment operations ................ 2.65 (2.48) 4.48
-------- -------- --------
Distributions to shareholders:
Net investment income ........................... -- -- --
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) --
-------- -------- --------
Total distributions ............................. -- (0.82) --
-------- -------- --------
Net asset value, end of period .................. $ 13.83 $ 11.18 $ 14.48
======== ======== ========
Total return (a) ................................ 23.7% (17.7)% 44.8%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) ............ $ 15,433 $ 11,694 $ 8,546
Ratio of net investment income to average
net assets .................................... (0.74)%(e) (0.74)% 1.89%(e)
Expenses net of waivers/reimbursements (b) ...... 1.64%(e) 1.72% 1.89%(e)
Expenses before waivers/reimbursements (c) ...... 1.91%(e) 2.11% 2.45%(e)
Portfolio turnover rate ......................... 89% 200% 146%
===============================================================================================
<CAPTION>
Realty Fund Mighty Mites(SM) Fund
For the For the
Six Months Year Six Months Period
Ended Ended Ended Ended
March 31, September March 31, September
1999 30, 1999 30,
(Unaudited) 1998 (Unaudited) 1998
---------- ---------- ---------- ----------
Retail Retail Retail Retail
Class Class(f) Class Class(g)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period ............ $ 8.43 $ 10.00 $ 9.70 $ 10.00
-------- -------- -------- --------
Net investment income (loss) .................... 0.21 0.37 0.07 0.04
Net realized and unrealized gain (loss)
on investments ................................ (0.78) (1.37) 1.29 (0.34)
-------- -------- -------- --------
Total from investment operations ................ (0.57) (1.00) 1.36 (0.30)
-------- -------- -------- --------
Distributions to shareholders:
Net investment income ........................... (0.12) (0.33) (0.09) --
In excess of net investment income .............. -- -- -- --
Net realized gain on investments ................ -- -- -- --
In excess of net realized gain on investments ... -- (0.24) -- --
-------- -------- -------- --------
Total distributions ............................. (0.12) (0.57) (0.09) --
-------- -------- -------- --------
Net asset value, end of period .................. $ 7.74 $ 8.43 $ 10.97 $ 9.70
======== ======== ======== ========
Total return (a) ................................ (6.8)% (10.5)% 14.0% (3.0)%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) ............ $ 1,776 $ 1,815 $ 7,683 $ 4,838
Ratio of net investment income to average
net assets .................................... 5.33%(e) 3.87% 1.49%(e) 1.60%(e)
Expenses net of waivers/reimbursements (b) ...... 1.69%(e) 1.70% 1.01%(e) 2.05%(e)
Expenses before waivers/reimbursements (c) ...... 4.06%(e) 3.95% 2.60%(e) 4.50%(e)
Portfolio turnover rate ......................... 25% 142% 32% 18%
===============================================================================================================
</TABLE>
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of dividends.
(b) 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 for the six months ended March
31, 1999 for SmallCap Equity, Realty and Mighty Mites Funds would be
1.50%, 1.50% and 1.00%, respectively, for the year ended September 30,
1998, 1.50%, 1.50% and 2.00%, respectively, and for the year ended
September 30, 1997 for SmallCap Equity would be 1.50%.
(c) 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.
(d) Period from April 15, 1997 (inception date of fund) to September 30, 1997.
(e) Annualized.
(f) Period from September 30, 1997 (inception date of fund) to September 30,
1998.
(g) Period from May 11, 1998 (inception date of fund) to September 30, 1998.
See accompanying notes to financial statements.
26
<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 -- March 31, 1999 (a)
Life of Inception
1 Year 5 Year Fund Date
------------------------------------------------
Equity .............. 2.9% 21.4% 15.2% 01/02/87
Balanced ............ 4.4 16.6 14.7 10/01/91
Intermediate Bond ... 3.9 6.7 6.8 10/01/91
SmallCap Equity ..... (6.7) -- 21.9 04/15/97
Realty .............. (20.5) -- (11.4) 09/30/97
Mighty Mites(SM) .... -- -- 10.6(c) 05/11/98
Gabelli Westwood Funds -- Service Class Shares
Average Annual Returns -- March 31, 1999 (a)(b)
Life of Inception
1 Year 5 Year Fund Date
------------------------------------------------
Equity .............. (1.4)% 20.1% 18.2% 01/28/94
Balanced ............ 0.0 15.4 14.5 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.
(c) Represents cumulative total return for period of less than one year and is
not annualized.
<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 Director of Surgery
Deutsche Bundesbank Lawrence Hospital
ANTHONY J. COLAVITA
Attorney-at-Law
Anthony J. Colavita, P.C.
Officers
SUSAN M. BYRNE BRUCE N. ALPERT
President and Chief Vice President and
Investment Officer Treasurer
LYNDA J. CALKIN, CFA PATRICIA R. FRAZE
Vice President Vice President
JAMES E. McKEE
Secretary
Investment Adviser
Gabelli Advisers, Inc.
Investment Sub-Adviser
Westwood Management Corporation
Distributor
Gabelli & Company, Inc.
Custodian
The Bank of New York
Legal Counsel
Battle Fowler LLP
Independent Accountants
PricewaterhouseCoopers LLP
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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.
- --------------------------------------------------------------------------------
