THE GABELLI WESTWOOD FUNDS
==========================
ANNUAL REPORT
SEPTEMBER 30, 2000
EQUITY FUND SMALLCAP EQUITY FUND
BALANCED FUND REALTY FUND
INTERMEDIATE BOND FUND MIGHTY MITES(SERVICE MARK) FUND
TO OUR SHAREHOLDERS,
We are pleased to provide the September 30, 2000, annual report for the
Gabelli Westwood Funds, including the Equity Fund, Balanced Fund, Intermediate
Bond Fund, SmallCap Equity Fund, Realty Fund and Mighty Mites(Service Mark)
Fund.
MARKET COMMENTARY
The past twelve months were characterized by notable reversals in the
equity and fixed income markets: (1) After a surge toward the close of 1999 and
early 2000, Technology peaked mid-March at extreme valuations, and subsequently
produced negative returns as fundamentals deteriorated; (2) Utilities and
Financials strengthened over the recent quarter to close the fiscal year at the
top of the S&P 500; (3) interest rates, after rising all along the yield curve
during the fourth quarter of 1999, inverted during 2000, as short-term yields
continued to rise and intermediate- and long-term yields declined.
By the end of September, the markets reflected concerns about the impact of
a weak Euro on earnings, high energy prices, and global Central Bank rate
increases. Data evidencing a moderation in growth and announcements of expected
earnings disappointments by major companies exacerbated the concerns. REITs and
Value stocks out-performed Growth stocks and International equities in 2000. The
mega-cap stocks that had dominated narrow U.S. market performance in 1999
yielded to broader market participation in 2000 that was led by mid- and
smaller-capitalization companies. The Funds benefited from investors' renewed
focus on fundamentals and the accompanying sector rotations.
Toward the close of the fiscal year, volatility was the dominant theme. In
August, the markets swung toward growth stocks, only to turn back to value in
September as earnings pre-announcement news began to make investors nervous. By
quarter-end, the market was focused on the perceived safety of "old economy"
sectors like health care and utilities. Value outperformed growth by the widest
margin in history during the quarter. Based on signs of a slowing economy, the
Federal Reserve Board (the "Fed") did not raise the Fed Funds rate (already at
6.50%) at their August 22 meeting. However, the Fed did maintain their bias
toward higher rates, reflecting their concern over higher oil prices and
potentially higher inflation.
EQUITY FUND
For the twelve months ended September 30, 2000, the Equity Fund Class AAA's
total return was 19.29% and the Class A's total return was 18.97%. The Standard
& Poor's ("S&P") 500 Index and the Lipper Multi-Cap Value Fund Average had total
returns of 13.27% and 11.94%, respectively, over the same twelve-month period.
The S&P 500 Index is an unmanaged indicator of stock market performance, while
the Lipper Average reflects the average performance of mutual funds classified
in this particular category.
--------------------------------------------------------------------------------
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. Performance of
Class A shares does not reflect the effect of the maximum 4% front end sales
charge. (See performance table on page 31.)
<PAGE>
For the ten-year period ended September 30, 2000, the Class AAA's total
return averaged 17.76% annually versus average annual total returns of 19.42%
and 15.33% for the S&P 500 and Lipper Multi-Cap Value Fund Average,
respectively. Since their respective inception dates of January 2, 1987 and
January 28, 1994 through September 30, 2000, the Class AAA had a cumulative
total return of 602.76% and the Class A had a cumulative total return of
205.86%, which equate to average annual total returns of 15.23% and 18.22%,
respectively.
As we pointed out last spring, the Fund had been positioned for a renewal
of interest in companies whose future earnings growth potential had not been
fully priced by the market. Performance for the fiscal year was led by an
over-weighting in energy combined with strong stock selection. The Fund also
benefited from being over-weighted in REITs and from stock selection in Health
Care, Consumer Cyclicals and Consumer Staples. Although selective and
underweighted in Technology, Fund stocks in that sector out performed.
The Fund benefited from merger announcements throughout the fiscal year, as
Pharmacia & Upjohn acquired Monsanto, Bestfoods received a bid from Unilever,
Time Warner from AOL, International Home Foods from Conagra, and Warner-Lambert
from Pfizer. Some of the top performing stocks for the year were Reliant Energy,
Citigroup, The Walt Disney Co., Avon Products, and Hewlett-Packard.
Through the third quarter of 2000, energy prices remained high as
production increases by OPEC were seen as insufficient to offset high levels of
demand. A re-emergence of political tensions also served to offset the effect of
a release of oil from the U.S. Strategic Petroleum Reserve. We continue to find
opportunities in the energy sector, as the market is pricing in earnings using
commodity prices below the levels at which companies can sell oil and natural
gas forward in the futures market.
The deregulation of the electric utility industry is exposing
inefficiencies and creating opportunity. Well-run companies with strong
management teams are capitalizing on these opportunities. As a sector, the
majority of companies are beating consensus earnings estimates and the Fund is
focused on companies capitalizing on the sale of excess electricity generation
in high demand areas and investments in higher growth international markets.
In the coming weeks, companies will begin to report third quarter earnings.
As the number of pre-announcements has risen, so has investor uncertainty;
however, what we are seeing is really a correction based on valuations, not
fundamental changes. Expectations for certain groups may have been too high, but
expectations have been too low for many sectors, and we are now seeing
valuations adjust to the real level of growth. As we write this, we have made it
through the worst part of earnings announcement season and are
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
EQUITY FUND CLASS AAA AND S&P 500 INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
------------------------------------------------
Average Annual Total Return*
------------------------------------------------
One Year 5 Year 10 Year Life of Class
------------------------------------------------
19.29% 20.06% 17.76% 15.23%
------------------------------------------------
Equity Fund
(Class AAA) S&P 500 Index
1/2/87 $10,000 $10,000
9/87 13,165 13,599
9/88 11,779 11,893
9/89 15,322 15,785
9/90 13,699 14,305
9/91 16,396 18,766
9/92 17,078 20,841
9/93 20,508 23,553
9/94 22,383 24,421
9/95 28,169 31,684
9/96 35,740 38,116
9/97 49,893 53,515
9/98 49,194 58,383
9/99 58,920 74,610
9/00 70,286 84,511
* Past performance is predictive of future results.
2
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
EQUITY FUND CLASS A AND S&P 500 INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
------------------------------------------------
Average Annual Total Return*
------------------------------------------------
One Year 5 Year Life of Class
------------------------------------------------
14.16% 18.75% 17.50%
------------------------------------------------
Equity Fund (Class A) S&P 500 Index
1/28/94 $ 9,600 $10,000
9/94 9,514 9,896
9/95 11,944 12,839
9/96 15,090 15,445
9/97 21,020 21,685
9/98 20,642 23,658
9/99 24,669 30,233
9/00 29,349 34,245
* Past performance is not predictive of future results.
Includes effect of maximum sales charge of 4.00%.
expecting company quarterly reports to be largely in line with expectations.
However, companies are likely to keep expectations low as the market continues
to reflect on the effects of a weak Euro, rising interest rates, higher
commodity prices, and a moderating economy. The rotation out of industries with
high growth expectations will favor the value oriented, patient investor.
BALANCED FUND
For the twelve months ended September 30, 2000, the Balanced Fund Class
AAA's total return was 13.39% and the Class A's total return was 13.05%. 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 10.66% and 11.31%, respectively, over the same
twelve-month period. Each index is an unmanaged indicator of investment
performance, while the Lipper Average reflects the average performance of mutual
funds classified in this particular category.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
BALANCED FUND CLASS AAA AND A COMPOSITE OF 60% -- THE S&P 500 INDEX
AND 40% -- THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
------------------------------------------------
Average Annual Total Return*
------------------------------------------------
One Year 5 Year Life of Class
------------------------------------------------
13.39% 14.92% 13.98%
------------------------------------------------
Balanced Fund (Class AAA) 60% S&P 500 and 40% Lehman Bros.
Gov't./Corp. Bond Index
10/1/91 $10,000 $10,000
9/92 10,797 11,207
9/93 12,621 12,603
9/94 13,291 12,670
9/95 16,203 15,658
9/96 19,300 17,850
9/97 24,762 22,866
9/98 25,455 25,290
9/99 28,652 29,344
9/00 32,489 32,472
* Past performance is not predictive of future results.
3
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
BALANCED FUND CLASS A AND A COMPOSITE OF 60% -- THE S&P 500 INDEX
AND 40% -- THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
------------------------------------------------
Average Annual Total Return*
------------------------------------------------
One Year 5 Year Life of Class
------------------------------------------------
8.51% 13.70% 13.54%
------------------------------------------------
Balanced Fund (Class A) 60% S&P Index and 40% Lehman Bros.
Gov't. /Corp. Bond Index
4/6/93 $ 9,600 $10,000
9/93 9,809 10,443
9/94 10,751 10,499
9/95 13,081 12,975
9/96 15,550 14,792
9/97 19,904 18,949
9/98 20,422 20,958
9/99 22,913 24,318
9/00 25,903 26,910
* Past performance is not predictive of future results.
Includes effect of maximum sales charge of 4.00%.
For the five-year period ended September 30, 2000, the Class AAA's total
return averaged 14.92% annually and the Class A's total return averaged 14.63%
annually, versus average annual total returns of 15.53% and 12.74% 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 September 30, 2000, the Class
AAA had a cumulative total return of 224.92% and the Class A had a cumulative
total return of 169.80%, which equate to average annual total returns of 13.98%
and 14.17%, respectively, excluding the effect of the front-end sales charge.
The Balanced Fund is designed to give an investor exposure to equities but
reduce overall risk through investments in short-to intermediate term fixed
income securities. With that maturity proviso, 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 twelve months ended September 30, 2000, the Intermediate Bond
Fund's total return was 6.40%. The Lehman Brothers Government/Corporate Bond
("LBG/C") Index and the Lipper Intermediate Investment Grade Debt Fund Average
returned 6.74% and 6.12%, respectively, over the same twelve month period. The
LBG/C index is an unmanaged indicator of market performance, while the Lipper
Average reflects the average performance of mutual funds classified in this
particular category.
For the five-year period ended September 30, 2000, the Fund's total return
averaged 5.90% annually versus average annual total returns of 6.30% and 5.89%
for the LBG/C Index and the Lipper Intermediate Investment Grade Debt Fund
Average, respectively. Since inception on October 1, 1991 through September 30,
2000, the Fund had a cumulative total return of 72.54%, which equates to an
average annual total return of 6.24%.
Comparing Treasury yields at the beginning and the end of the fiscal year,
all of the apparent action was in shorter maturities, where yields rose along
with rate increases. The yield curve was inverted (short term rates higher than
long term rates) during most of the year, although the degree of inversion
decreased during the last six months amidst signs of a moderating economy. As a
result the corporate sector, particularly lower rated issues, under-performed
other investment grade sectors such as long-term Treasuries and mortgage-backed
securities. The Fund benefited from an under-weighting in corporate bonds with
an emphasis on higher-rated issues (such as Kimco Realty, Tyco International,
and the World Bank) and an over-weighted position in asset-/mortgage-backed
securities and the government sector, where long-term U.S. Treasuries were top
performers.
4
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE INTERMEDIATE BOND FUND AND
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
------------------------------------------------
Average Annual Total Return*
------------------------------------------------
One Year 5 Year Life of Fund
------------------------------------------------
6.40% 5.90% 6.24%
------------------------------------------------
Intermediate Bond Fund Lehman Bros. Gov't./
(Class AAA) Corp. Bond Index
10/1/91 $10,000 $10,000
9/92 11,186 11,323
9/93 12,331 12,620
9/94 11,658 12,098
9/95 12,956 13,834
9/96 13,540 14,467
9/97 15,084 15,856
9/98 16,623 17,886
9/99 16,229 17,596
9/00 17,268 18,782
* Past performance is not predictive of future results.
SMALLCAP EQUITY FUND
For the twelve months ended September 30, 2000, the SmallCap Equity Fund's
total return was 29.35%. The Russell 2000 Index and the Lipper Small Cap Growth
Fund Average had total returns of 23.39% and 56.56%, respectively, over the same
twelve-month period. The Russell 2000 Index is an unmanaged indicator of
investment performance, while the Lipper Average reflects the average
performance of mutual funds classified in this particular category. Since
inception on April 15, 1997 through September 30, 2000, the Fund had a
cumulative total return of 145.12%, which equates to an average annual total
return of 29.52%.
The SmallCap Equity Fund posted strong performance for the fiscal year,
despite the fade in performance in the Technology and Consumer Discretionary
sectors. Technology valuations peaked in March, and consumers decreased retail
spending in the face of rising gasoline and home energy prices. Health Care
drove the strong performance of the Fund, based upon an overweight position of
the top-performing smallcap sector and the quality of stock selection. Some of
the top-performing stocks for the period were Protein Design Labs Inc.,
Molecular Devices, Transwitch Corp., Province Healthcare Co., and Smart Force.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE SMALLCAP EQUITY FUND AND THE RUSSELL 2000 INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
------------------------------------------------
Average Annual Total Return*
------------------------------------------------
One Year 3 Year Life of Fund
------------------------------------------------
29.35% 19.18% 29.52%
------------------------------------------------
SmallCap Equity Fund
(Class AAA) Russell 2000 Index
4/15/97 $10,000 $10,000
9/30/97 14,480 13,410
9/30/98 11,917 10,862
9/30/99 18,941 12,933
9/30/00 24,500 15,958
* Past performance is not predictive of future results.
5
<PAGE>
After the SmallCap market correction during the second quarter of 2000,
third quarter returns appeared relatively flat. Intra quarter volatility
continued, however. After a powerful August rally, technology stocks corrected
in September despite robust second quarter earnings reports. Normal concerns
over summer slowdowns were compounded by fear of slowing economic growth and the
fears that a strong dollar and industry supply constraints would negatively
impact earnings.
The oil, financial, and health care sectors provided leadership in the
quarter. Oil and natural gas stocks traded up as beneficiaries of rising prices
and the prospect of strong near term earnings. Health Care stocks served as a
safe harbor in an uncertain economic environment. Financial stocks benefited
from a moderate inflation environment and steady Federal Reserve policy.
REALTY FUND
For the twelve months ended September 30, 2000, the Realty Fund's total
return was 24.87%. The National Association of REITs ( NAREIT") Index and the
Lipper Real Estate Fund Average rose 19.42% and 22.01%, respectively, over the
same twelve-month period. The NAREIT Index is an unmanaged indicator of
investment performance, while the Lipper Average reflects the average
performance of mutual funds classified in this particular category. Since
inception on September 30, 1997 through September 30, 2000, the Fund had a
cumulative total return of 5.42%, which equates to an average annual total
return of 1.77%.
REIT stocks continued their strong performance during the second half of
the Fund's fiscal year, topping most stock indices. Strong REIT performance has
led to net positive mutual fund inflows and interest from overseas pension
funds, as investors concluded the REIT bear market was over. Real estate
fundamentals remain generally healthy. Since the deceleration in FFO (Funds From
Operations) growth stabilized in the second quarter of 2000, the overall
earnings outlook should begin to improve. Despite the sector's positive
performance over recent months, discounts to NAV remain the norm. Top-performing
Fund sectors during the fiscal year were Hotels, Office Property,
Industrial/Warehouse and Apartments. Some of the leading holdings were Spieker
Properties Inc., Essex Property, Boston Properties Inc., Centerpoint Properties
Trust, and Catellus Development Corp.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE REALTY FUND, THE RUSSELL 2000 INDEX AND THE NATIONAL ASSOCIATION OF REITS
ALL REIT INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
---------------------------------
Average Annual Total Return*
---------------------------------
One Year Life of Fund
---------------------------------
24.87% 1.77%
---------------------------------
Realty Fund
(Class AAA) Russell 2000 Index NARIT All REIT Index
9/30/97 $10,000 $10,000 $10,000
9/30/98 8,950 8,100 8,540
9/30/99 8,442 9,645 7,902
9/30/00 10,542 11,901 9,437
* Past performance is not predictive of future results.
MIGHTY MITES(SERVICE MARK) FUND
For the twelve months ended September 30, 2000, the Mighty Mites Fund's
total return was 22.98%. The Russell 2000 Index and the Lipper Small-Cap Value
Fund Average had total returns of 23.39% and 20.66%, respectively, over the same
twelve-month period. The Russell 2000 Index is an unmanaged indicator of
investment performance, while the Lipper Average reflects the average
performance of mutual funds classified in this particular category. Since
inception on May 11, 1998 through September 30, 2000, the Fund had a total
6
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE MIGHTY MITES FUND AND THE RUSSELL 2000 INDEX
[GRAPH OMITTED - PLOT POINTS ARE AN EDGAR REPRESENTATION OF THAT GRAPH]
---------------------------------
Average Annual Total Return*
---------------------------------
One Year Life of Fund
---------------------------------
22.98% 21.72%
---------------------------------
Mighty Mites Fund
(Class AAA) Russell 2000 Index
5/11/98 $10,000 $10,000
9/30/98 9,700 7,570
9/30/99 13,018 9,014
9/30/00 16,010 11,122
* Past performance is not predictive of future results.
return of 60.10%, which equates to an average annual return of 21.72%. The
Gabelli Westwood Funds began offering Mighty Mites Class A Shares in June 2000.
For the quarter ended September 30, 2000, the Mighty Mites Class A shares
declined 0.50%.
This quarter, our value oriented investments were the most rewarding. The
Fund's performance leader board was dominated by small banks and utilities
companies. The banks (such as Doral Financial Corp., East West Bancorp, Fidelity
National Group, and BKF Capital Group) benefited from declining market interest
rates, solid earnings gains, and ongoing consolidation in the industry--the
neighborhood bank is fast going the way of the corner grocery store. On the
utility side of the equation, Semco Energy, Connecticut Water Service, El Paso
Electric, Delta Natural Gas, and Main Public Service posted good gains. Our
utilities holdings were supported by high yields and respectable earnings, but
the real force driving stock prices is accelerating merger and acquisition
activity in the industry. In the newly deregulated utilities industry, companies
are scrambling to cut costs and improve their competitive positions. One of the
fastest and easiest ways to accomplish this is through buying other utilities to
achieve economies of scale. Electric, natural gas, and water utilities serving
the same markets are merging. Larger utilities are buying smaller companies
operating on the periphery of their markets. This is a business where size now
matters. Bigger fish are going to eat smaller fish. Micro-cap utilities are at
the bottom of this food chain.
For the year, the Fund's energy and utility holdings were the best
performers as well. Bangor Hydro-Electric, Home-Stake Oil &Gas, and El Paso
Electric benefited from the booming utility industry. Electronics stocks Oak
Technology and Allen Organ have enhanced the Fund's performance for the year.
Health Care industry holdings such as Matrix Pharmaceutical, American Service
Group, and Sterile Recoveries were also atop the leaderboard. Our biggest
disappointments came from the Broadcasting industry, where Granite Broadcasting,
Salem Communication, and CTN Media Group dropped considerably.
Higher energy costs are problematic to small electric utilities, many of
which do not have their own generating capacity. Wholesale electricity prices
are up sharply and, in some instances, are now higher than the prices utilities
can charge their customers. This will have a negative impact on near term
earnings. However, it will also help push smaller electric utilities into the
arms of larger ones with their own generating assets or greater purchasing power
leverage in the wholesale market. We believe this will work to the portfolio's
advantage.
CAPITAL MARKETS OUTLOOK
Westwood's capital markets analysis remains an important tool for assessing
the risk and reward relationships among the various asset classes. Overall, we
believe that the outlook for the market is good. As we look ahead to 2001, we
anticipate a downshift in U.S. economic activity, but still steady growth, in
response to
7
<PAGE>
restrained consumer activity and lower capital expenditures by firms. Although
somewhat offset by productivity gains, we expect inflation to drift higher, as
energy prices abate but remain at a high level and the U.S dollar weakens
modestly (especially versus the Euro). Rising labor costs could result in margin
compression, although the weakening dollar could benefit many multinational
firms. We see profits growing at a respectable rate in this environment. With
the economy continuing to post good growth we see many opportunities in stocks,
despite evidence that the largest capitalization stocks are slightly overvalued.
MULTI-CLASS SHARES
The Board of Trustees has authorized The Gabelli Westwood Funds to begin
offering Class B and Class C Shares, which will be available at net asset value
and subject to a contingent deferred sales charge if sold within a designated
time period. Our Class AAA will remain no-load. The Board of Trustees determined
that expanding the types of fund shares available through various distribution
options will enhance the ability of the Funds to attract additional investors.
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment for 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.
WWW.GABELLI.COM
Please visit us on the Internet. Our home page at http://www.gabelli.com
contains information about Gabelli Asset Management Inc., the Gabelli Mutual
Funds, IRAs, 401(k)s, quarterly reports, closing prices and other current news.
You can e-mail us at info gabelli.com.
Westwood maintains a website that we encourage you to visit to obtain
further information as well as to share your comments: www westwoodgroup.com. We
appreciate your confidence in Westwood and our team will continue to work hard
in order to meet your investment objectives.
IN CONCLUSION
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800 GABELLI
(1-800-422-3554) or 1-800-WESTWOOD (1-800-937-8966). Please call us during the
business day for further information.
Sincerely,
/S/ SUSAN M. BYRNE
SUSAN M. BYRNE
President and Chief Investment Officer
October 16, 2000
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NASDAQ SYMBOLS TABLE
---------------------------------------------------
Gabelli Westwood Fund Nasdaq Symbol
--------------------- -------------
Equity - Class AAA WESWX
Balanced - Class AAA WEBAX
Intermediate Bond WEIBX
SmallCap Equity WESCX
Realty WESRX
Mighty Mites(Service Mark) Class AAA WEMMX
Equity - Class A WEECX
Balanced - Class A WEBCX
8
<PAGE>
THE GABELLI WESTWOOD EQUITY FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 98.4%
AUTOMOTIVE -- 0.2%
20,000 Lear Corp.+ .................... $ 428,388 $ 411,250
------------ -----------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.6%
78,500 Visteon Corp. .................. 1,245,450 1,187,312
------------ -----------
BROADCASTING -- 2.9%
83,076 Clear Channel Communications Inc.+ 5,063,546 4,693,794
70,000 Entravision Communications
Corp. Cl. A+ .................. 1,150,138 1,216,250
------------ -----------
6,213,684 5,910,044
------------ -----------
BUSINESS SERVICES -- 0.1%
3,100 United Parcel Service Inc., Cl .B 156,705 174,762
------------ -----------
COMPUTER HARDWARE -- 6.6%
186,500 Compaq Computer Corp. .......... 5,117,749 5,143,670
33,500 Hewlett-Packard Co. ............ 2,125,201 3,249,500
46,000 International Business Machines
Corp. ........................ 4,586,431 5,175,000
------------ -----------
11,829,381 13,568,170
------------ -----------
COMPUTER SOFTWARE AND SERVICES -- 1.4%
50,100 Intuit Inc.+ ................... 2,281,247 2,855,700
------------ -----------
CONSUMER PRODUCTS -- 2.7%
134,700 Avon Products Inc. ............. 4,172,212 5,505,862
------------ -----------
ENERGY AND UTILITIES -- 24.4%
67,100 Anadarko Petroleum Corp. ....... 4,301,477 4,459,466
98,400 Apache Corp. ................... 3,731,857 5,817,900
186,600 Conoco Inc., Cl. B ............. 4,834,551 5,026,537
99,306 Devon Energy Corp. ............. 4,202,394 5,973,256
48,600 Duke Energy Corp. .............. 3,856,813 4,167,450
66,300 Exxon Mobil Corp. .............. 5,247,547 5,908,987
111,600 Florida Progress Corp. ......... 4,600,879 5,907,825
163,600 Reliant Energy Inc. ............ 4,056,898 7,607,400
129,000 Williams Companies Inc. (The) .. 5,253,074 5,450,250
------------ -----------
40,085,490 50,319,071
------------ -----------
ENTERTAINMENT -- 5.2%
131,000 Disney (Walt) Co. .............. 3,982,634 5,010,750
73,800 Time Warner Inc. ............... 4,774,429 5,774,850
------------ -----------
8,757,063 10,785,600
------------ -----------
EQUIPMENT AND SUPPLIES -- 2.5%
157,600 Deere & Co. .................... 6,191,080 5,240,200
------------ -----------
FINANCIAL SERVICES -- 15.1%
113,312 ABN Amro Holding NV, ADR ....... 2,280,875 2,620,340
116,700 Chase Manhattan Corp. .......... 5,638,081 5,390,081
103,033 Citigroup Inc. ................. 2,622,592 5,570,222
78,700 Hartford Financial Services Group
Inc. ......................... 5,249,834 5,740,181
208,000 MetLife Inc.+ .................. 4,992,264 5,447,000
97,700 PNC Financial Services Group ... 4,477,128 6,350,500
------------ -----------
25,260,774 31,118,324
------------ -----------
FOOD AND BEVERAGE -- 5.4%
139,200 Anheuser Busch Companies Inc. .. 3,661,353 5,889,900
149,100 General Mills Inc. ............. 4,931,632 5,293,050
------------ -----------
8,592,985 11,182,950
------------ -----------
SHARES COST VALUE
------ ---- -----
HEALTH CARE -- 9.3%
70,600 Baxter International Inc. ...... $ 4,808,510 $5,634,762
109,973 Pharmacia Corp. ................ 4,919,807 6,619,000
72,100 WellPoint Health Networks Inc.+ 4,476,866 6,921,600
------------ -----------
14,205,183 19,175,362
------------ -----------
HOTELS AND GAMING -- 1.4%
95,100 Starwood Hotels & Resorts
Worldwide Inc. ................. 2,284,988 2,971,875
------------ -----------
METALS AND MINING -- 1.5%
123,600 Alcoa Inc. ..................... 2,643,480 3,128,625
------------ -----------
REAL ESTATE INVESTMENT TRUSTS -- 2.3%
61,800 Kimco Realty Corp. ............... 2,464,522 2,611,050
59,600 Vornado Realty Trust ............. 2,196,463 2,212,650
------------ -----------
4,660,985 4,823,700
------------ -----------
RETAIL -- 4.0%
259,400 Limited Inc. ..................... 4,785,170 5,723,013
64,200 Tiffany & Co. .................... 1,342,039 2,475,713
------------ -----------
6,127,209 8,198,726
------------ -----------
TELECOMMUNICATIONS -- 7.8%
80,500 AT&T Corp. ..................... 2,571,548 2,364,688
26,200 Qwest Communications
International Inc.+ .......... 1,268,211 1,259,238
126,500 SBC Communications Inc. ........ 4,824,154 6,325,000
90,404 Verizon Communications ......... 3,398,117 4,378,944
58,250 WorldCom Inc.+ ................. 1,512,259 1,769,344
------------ -----------
13,574,289 16,097,214
------------ -----------
TRANSPORTATION -- 5.0%
122,800 AMR Corp. ...................... 4,080,429 4,014,025
12,600 Delta Air Lines Inc. ........... 643,358 559,125
128,200 Federal Express Corp.+ ......... 5,174,689 5,684,388
------------ -----------
9,898,476 10,257,538
------------ -----------
TOTAL COMMON STOCKS ............ 168,609,069 202,912,285
------------ -----------
TOTAL INVESTMENTS -- 98.4% ..... $168,609,069 202,912,285
============
OTHER ASSETS AND
LIABILITIES (NET) -- 1.6% .... 3,314,291
------------
NET ASSETS -- 100.0%
(18,542,729 shares outstanding) $206,226,576
============
--------------------
For Federal tax purposes:
Aggregate cost ................ $168,852,479
============
Gross unrealized appreciation . $ 36,070,184
Gross unrealized depreciation . (2,010,378)
------------
Net unrealized appreciation ... $ 34,059,806
============
+ Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
9
<PAGE>
THE GABELLI WESTWOOD BALANCED FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2000
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 60.7%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.5%
47,800 Visteon Corp. .................. $ 758,376 $ 722,975
------------ -----------
BROADCASTING -- 1.3%
34,374 Clear Channel Communications Inc.+ 2,098,531 1,942,131
------------ -----------
BUSINESS SERVICES -- 0.0%
1,000 United Parcel Service Inc., Cl. B 51,550 56,375
------------ -----------
COMPUTER HARDWARE -- 4.2%
82,300 Compaq Computer Corp. .......... 2,263,620 2,269,834
16,800 Hewlett-Packard Co. ............ 1,039,884 1,629,600
19,400 International Business
Machines Corp. .............. 1,924,573 2,182,500
------------ -----------
5,228,077 6,081,934
------------ -----------
COMPUTER SOFTWARE AND SERVICES -- 1.1%
27,100 Intuit Inc.+ ................... 1,254,708 1,544,700
------------ -----------
CONSUMER PRODUCTS -- 1.8%
63,300 Avon Products Inc. ............. 1,946,289 2,587,387
------------ -----------
ENERGY AND UTILITIES -- 14.9%
28,900 Anadarko Petroleum Corp. ....... 1,851,946 1,920,694
42,800 Apache Corp. ................... 1,471,413 2,530,550
79,900 Conoco Inc., Cl. B ............. 2,070,653 2,152,306
43,138 Devon Energy Corp. ............. 1,782,178 2,594,751
20,800 Duke Energy Corp. .............. 1,650,619 1,783,600
29,800 Exxon Mobil Corp. .............. 2,355,780 2,655,925
49,900 Florida Progress Corp. ......... 2,041,764 2,641,581
70,000 Reliant Energy Inc. ............ 1,791,318 3,255,000
56,200 Williams Companies Inc. (The) .. 2,288,467 2,374,450
------------ -----------
17,304,138 21,908,857
------------ -----------
ENTERTAINMENT -- 3.3%
57,800 Disney (Walt) Co. .............. 1,664,095 2,210,850
32,700 Time Warner Inc. ............... 2,141,009 2,558,775
------------ -----------
3,805,104 4,769,625
------------ -----------
EQUIPMENT AND SUPPLIES -- 1.5%
68,000 Deere & Co. .................... 2,594,224 2,261,000
------------ -----------
FINANCIAL SERVICES -- 6.1%
57,687 ABN Amro Holding NV, ADR ....... 1,178,574 1,334,012
53,100 Chase Manhattan Corp. .......... 2,566,062 2,452,556
44,833 Citigroup Inc. ................. 1,061,195 2,423,784
42,600 PNC Financial Services Group ... 1,948,356 2,769,000
------------ -----------
6,754,187 8,979,352
------------ -----------
FINANCIAL SERVICES: INSURANCE -- 3.2%
33,500 Hartford Financial Services
Group Inc. ................... 2,235,856 2,443,406
88,600 MetLife Inc.+ .................. 2,125,771 2,320,212
------------ -----------
4,361,627 4,763,618
------------ -----------
SHARES COST VALUE
------ ---- -----
FOOD AND BEVERAGE -- 3.4%
63,200 Anheuser Busch Companies Inc. .. $ 1,684,784 $ 2,674,150
65,900 General Mills Inc. ............. 2,179,708 2,339,450
------------ -----------
3,864,492 5,013,600
------------ -----------
HEALTH CARE -- 5.8%
30,700 Baxter International Inc. ...... 2,090,365 2,450,244
49,855 Pharmacia Corp. ................ 2,257,526 3,000,648
32,500 WellPoint Health Networks Inc.+ 1,983,250 3,120,000
------------ -----------
6,331,141 8,570,892
------------ -----------
HOTELS AND GAMING -- 1.0%
46,000 Starwood Hotels & Resorts
Worldwide Inc. ............... 1,315,509 1,437,500
------------ -----------
METALS AND MINING -- 1.1%
64,400 Alcoa Inc. .................... 1,316,526 1,630,125
------------ -----------
REAL ESTATE INVESTMENT TRUSTS -- 1.5%
30,400 Kimco Realty Corp. ............. 1,193,102 1,284,400
25,500 Vornado Realty Trust ........... 915,073 946,687
------------ -----------
2,108,175 2,231,087
------------ -----------
RETAIL -- 2.2%
102,200 Limited Inc. ................... 1,841,461 2,254,787
25,400 Tiffany & Co. .................. 531,580 979,487
------------ -----------
2,373,041 3,234,274
------------ -----------
TELECOMMUNICATIONS -- 4.6%
33,300 AT&T Corp. ..................... 1,063,758 978,187
15,400 Qwest Communications
International Inc.+ .......... 745,437 740,163
48,900 SBC Communications Inc. ........ 1,857,409 2,445,000
35,138 Verizon Communications ......... 1,315,070 1,701,997
29,000 WorldCom Inc.+ ................. 1,153,972 880,875
------------ -----------
6,135,646 6,746,222
------------ -----------
TRANSPORTATION -- 3.2%
57,200 AMR Corp. ...................... 1,900,111 1,869,725
5,400 Delta Air Lines Inc. ........... 245,505 239,625
59,800 Federal Express Corp.+ ......... 2,413,777 2,651,532
------------ -----------
4,559,393 4,760,882
------------ -----------
TOTAL COMMON STOCKS ............ 74,160,734 89,242,536
------------ -----------
PRINCIPAL
AMOUNT
---------
ASSET BACKED SECURITIES -- 2.0%
$ 44,371 EQCC Home Equity Loan Trust 93-3
Cl. A, 5.15%, 09/15/08 ....... 42,759 43,076
1,000,000 GS Mortgage Securities Corp. II
97-GL Cl. A2D, 6.94%, 07/13/30 1,012,229 986,870
1,000,000 GS Mortgage Securities Corp. II
98-GLII Cl. A2, 6.56%, 04/13/31 1,009,445 955,580
1,000,000 Premier Auto Trust 1998-1A4,
5.70%, 10/06/02 999,940 994,485
------------ -----------
TOTAL ASSET BACKED SECURITIES 3,064,373 2,980,011
------------ -----------
See accompanying notes to financial statements.
10
<PAGE>
THE GABELLI WESTWOOD BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COST VALUE
--------- ---- -----
CORPORATE BONDS -- 9.9%
COMPUTER HARDWARE -- 0.5%
$ 675,000 International Business Machines Corp.,
7.25%, 11/01/02 .............. $ 677,076 $ 682,162
------------ -----------
DIVERSIFIED INDUSTRIAL -- 0.9%
1,330,000 Tyco International Ltd.
6.38%, 06/15/05 .............. 1,323,381 1,286,735
------------ -----------
ENERGY AND UTILITIES -- 1.0%
1,500,000 Conoco Inc.
5.90%, 04/15/04 .............. 1,426,558 1,453,172
------------ -----------
FINANCIAL SERVICES -- 2.2%
1,500,000 General Electric Capital Corp.
7.50%, 05/15/05 .............. 1,493,139 1,539,867
850,000 Golden State Holdings
7.13%, 08/01/05 .............. 843,361 787,007
920,000 Nipsco Capital Markets Inc.
7.39%, 04/01/04 .............. 939,522 897,745
------------ -----------
3,276,022 3,224,619
------------ -----------
REAL ESTATE INVESTMENT TRUSTS -- 1.6%
1,600,000 Archstone Communities Trust
7.20%, 03/01/13 .............. 1,537,870 1,436,576
1,030,000 Kimco Realty Corp.
7.46%, 05/29/07 ............... 1,059,303 1,004,909
------------ -----------
2,597,173 2,441,485
------------ -----------
RETAIL -- 1.6%
1,625,000 Neiman Marcus Group Inc.
6.65%, 06/01/08 .............. 1,623,484 1,462,256
870,000 Wal-Mart Stores Inc.
7.50%, 05/15/04 .............. 921,902 894,055
------------ -----------
2,545,386 2,356,311
------------ -----------
TELECOMMUNICATIONS -- 2.1%
1,685,000 GTE Corp.
6.46%, 04/15/08 .............. 1,703,121 1,594,735
1,515,000 MCI WorldCom Inc.
6.40%, 08/15/05 ............... 1,478,623 1,469,199
------------ -----------
3,181,744 3,063,934
------------ -----------
TOTAL CORPORATE BONDS .......... 15,027,340 14,508,418
------------ -----------
U.S. GOVERNMENT OBLIGATIONS -- 18.8%
U.S. TREASURY NOTES -- 18.8%
U.S. Treasury Notes
1,750,000 5.75%, 11/15/00 ............... 1,748,169 1,748,906
645,000 7.75%, 02/15/01 ............... 649,768 648,427
1,590,000 5.75%, 06/30/01 ............... 1,590,315 1,583,541
PRINCIPAL
AMOUNT COST VALUE
--------- ---- -----
$1,575,000 6.63%, 06/30/01 ............... $ 1,587,492 $ 1,578,446
1,570,000 6.25%, 01/31/02 ............... 1,563,842 1,571,473
6,300,000 6.63%, 04/30/02 ............... 6,384,172 6,351,188
320,000 6.25%, 06/30/02 ............... 317,182 321,100
1,100,000 6.38%, 08/15/02 ............... 1,112,226 1,106,875
1,800,000 7.25%, 05/15/04 ............... 1,855,788 1,877,063
1,250,000 7.50%, 02/15/05 ............... 1,308,694 1,326,563
1,200,000 7.00%, 07/15/06 ............... 1,249,433 1,262,250
1,445,000 6.63%, 05/15/07 ............... 1,476,628 1,498,284
3,400,000 6.13%, 08/15/07 ............... 3,360,635 3,437,189
3,320,000 6.00%, 08/15/09 ............... 3,284,713 3,334,525
------------ -----------
27,489,057 27,645,830
------------ -----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .................. 27,489,057 27,645,830
------------ -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 7.7%
FEDERAL HOME LOAN BANK -- 1.0%
1,500,000 Federal Home Loan Bank,
5.88%, 09/17/01 ............... 1,498,903 1,491,638
------------ -----------
FEDERAL HOME LOAN MORTGAGE CORP. -- 0.9%
1,425,000 Federal Home Loan Mortgage Corp.,
6.63%, 09/15/09 ............... 1,379,146 1,409,539
------------ -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 5.8%
Federal National Mortgage Association,
1,700,000 6.25%, 11/15/02 ............... 1,692,555 1,692,564
2,600,000 6.50%, 08/15/04 ............... 2,589,519 2,598,799
1,000,000 7.00%, 07/15/05 ............... 1,011,670 1,018,388
1,265,000 6.00%, 05/15/08 ............... 1,209,674 1,209,561
1,325,000 6.50%, 04/29/09 ............... 1,267,366 1,258,207
762,113 6.00%, 05/01/11 ............... 753,964 738,633
------------ -----------
8,524,748 8,516,152
------------ -----------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ........... 11,402,797 11,417,329
------------ -----------
TOTAL INVESTMENTS -- 99.1% ..... $131,144,301 145,794,124
============
OTHER ASSETS AND
LIABILITIES (NET) -- 0.9% ...... 1,275,580
-----------
NET ASSETS -- 100.0%
(11,863,774 shares outstanding) $147,069,704
============
--------------------
For Federal tax purposes:
Aggregate cost ............... $131,365,038
============
Gross unrealized appreciation $ 16,237,218
Gross unrealized depreciation (1,808,132)
------------
Net unrealized appreciation .. $ 14,429,086
============
+ Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
11
<PAGE>
THE GABELLI WESTWOOD INTERMEDIATE BOND FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COST VALUE
--------- ---- -----
ASSET BACKED SECURITIES -- 3.7%
$ 16,638 EQCC Home Equity Loan Trust,
93-3 Cl. A, 5.15%, 09/15/08 .. $ 16,627 $ 16,153
225,000 GS Mortgage Securities Corp. II,
97-GL Cl. A2D, 6.94%, 07/13/30 231,814 222,046
----------- ----------
TOTAL ASSET BACKED SECURITIES .. 248,441 238,199
----------- ----------
CORPORATE BONDS -- 29.9%
COMPUTER HARDWARE -- 1.2%
75,000 International Business Machines Corp.,
7.25%, 11/01/02 .............. 75,231 75,796
----------- ----------
DIVERSIFIED INDUSTRIAL -- 2.2%
150,000 Tyco International Ltd.,
6.38%, 06/15/05 .............. 154,153 145,120
----------- ----------
ENERGY AND UTILITIES -- 3.3%
125,000 Conoco Inc., 5.90%, 04/15/04 118,880 121,098
50,000 Forman Petroleum Corp.,
13.50%, 06/01/04+ (a) ........ 50,498 16,000
75,610 Niagara Mohawk Holdings Inc.,
7.38%, 07/01/03 .............. 76,666 75,790
----------- ----------
246,044 212,888
----------- ----------
FINANCIAL SERVICES -- 9.9%
150,000 General Electric Capital Corp.,
7.50%, 05/15/05 .............. 149,314 153,987
150,000 Golden State Holdings,
7.13%, 08/01/05 .............. 149,543 138,883
125,000 Goldman Sachs Group Inc.,
6.65%, 05/15/09 .............. 115,565 118,430
200,000 International Bank for
Reconstruction & Development,
8.63%, 10/15/16 .............. 257,595 226,632
----------- ----------
672,017 637,932
----------- ----------
HEALTH CARE -- 2.1%
140,000 Lilly (Eli) & Co., 7.13%, 06/01/25 139,045 136,624
----------- ----------
REAL ESTATE INVESTMENT TRUSTS -- 3.2%
150,000 Archstone Communities Trust,
7.20%, 03/01/13 .............. 144,633 134,679
75,000 Kimco Realty Corp., 7.46%, 05/29/07 77,595 73,173
----------- ----------
222,228 207,852
----------- ----------
RETAIL -- 4.9%
120,000 Neiman Marcus Group Inc.,
6.65%, 06/01/08 .............. 119,888 107,982
200,000 Wal-Mart Stores Inc., 7.50%, 05/15/04 214,954 205,530
----------- ----------
334,842 313,512
----------- ----------
TELECOMMUNICATIONS -- 3.1%
50,000 GTE Corp., 6.46%, 04/15/08 ..... 50,642 47,321
160,000 MCI WorldCom Inc.,
6.40%, 08/15/05 .............. 156,158 155,163
----------- ----------
206,800 202,484
----------- ----------
TOTAL CORPORATE BONDS .......... 2,050,360 1,932,208
----------- ----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 22.0%
FEDERAL HOME LOAN BANK -- 4.2%
275,000 Federal Home Loan Bank,
5.88%, 09/17/01 ........... 274,799 273,467
----------- ----------
PRINCIPAL
AMOUNT COST VALUE
--------- ---- -----
FEDERAL HOME LOAN MORTGAGE CORP. -- 3.5%
$225,000 Federal Home Loan Mortgage Corp.,
6.63%, 09/15/09 ................ $ 218,972 $ 222,559
----------- ----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 11.9%
FNMA,
275,000 6.25%, 11/15/02 ................ 271,962 273,797
75,000 6.50%, 08/15/04 ................ 74,155 74,965
80,000 7.00%, 07/15/05 ................ 80,934 81,471
225,000 7.13%, 03/15/07 ................ 224,497 230,974
112,986 FNMA, Pool #344800, 6.00%, 05/01/11 111,764 109,505
----------- ----------
763,312 770,712
----------- ----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.4%
153,465 GNMA, Pool #780977,
7.50%, 12/15/28 ................ 150,693 154,128
----------- ----------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ............. 1,407,776 1,420,866
----------- ----------
U.S. GOVERNMENT OBLIGATIONS -- 42.1%
U.S. TREASURY BONDS -- 14.6%
U.S. Treasury Bonds,
270,000 7.25%, 05/15/16 ................ 286,415 300,544
120,000 7.13%, 02/15/23 ................ 123,875 134,813
500,000 6.13%, 11/15/27 ................ 515,039 504,219
----------- ----------
925,329 939,576
----------- ----------
U.S. TREASURY NOTES -- 27.5%
U.S. Treasury Notes,
175,000 5.75%, 11/15/00 ................ 175,303 174,891
530,000 6.25%, 06/30/02 ................ 540,455 531,822
195,000 6.25%, 02/15/03 ................ 197,147 196,219
175,000 7.50%, 02/15/05 ................ 182,735 185,719
200,000 7.00%, 07/15/06 ................ 207,366 210,375
265,000 6.63%, 05/15/07 ................ 272,501 274,772
200,000 6.00%, 08/15/09 ................ 198,217 200,875
----------- ----------
1,773,724 1,774,673
----------- ----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ...................... 2,699,053 2,714,249
----------- ----------
WARRANTS -- 0.0%
ENERGY AND UTILITIES -- 0.0%
50 Forman Petroleum Corp.,
13.50%, 06/01/04+ (a) .......... 1 1
----------- ----------
TOTAL INVESTMENTS -- 97.7% ........ $ 6,405,631 6,305,523
===========
OTHER ASSETS AND
LIABILITIES (NET) -- 2.3% ...... 145,938
----------
NET ASSETS -- 100.0%
(640,076 shares outstanding) ... $6,451,461
==========
--------------------
For Federal tax purposes:
Aggregate cost ................. $6,408,879
==========
Gross unrealized appreciation .. $ 62,991
Gross unrealized depreciation .. (166,347)
----------
Net unrealized depreciation .... $ (103,356)
==========
(a) Security fair valued under procedures established by Board of Trustees.
+ Non-income producing security.
See accompanying notes to financial statements.
12
<PAGE>
THE GABELLI WESTWOOD SMALLCAP EQUITY FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 94.7%
BUSINESS SERVICES -- 3.0%
16,900 SpeechWorks International Inc.+ $ 944,760 $1,047,800
---------- ----------
COMMUNICATIONS EQUIPMENT -- 7.0%
13,975 Dycom Industries Inc.+ ......... 529,881 581,709
15,700 MCK Communications Inc.+ ....... 513,135 355,212
8,100 MKS Instruments Inc. + ......... 212,765 221,737
12,100 Proxim Inc.+ ................... 601,340 538,450
8,700 Tut Systems Inc.+ .............. 458,118 750,919
---------- ----------
2,315,239 2,448,027
---------- ----------
COMPUTER SOFTWARE AND SERVICES -- 19.4%
18,800 Actuate Corp.+ ................. 528,693 649,481
16,500 Aspen Technology Inc.+ ......... 638,847 744,562
19,100 Data Return Corp.+ ............. 429,542 386,775
6,500 IONA Technologies plc, ADR+ .... 339,293 451,750
15,749 NetIQ Corp.+ ................... 640,927 1,034,512
11,600 Packeteer Inc.+ ................ 342,201 440,075
19,600 PC-Tel Inc.+ ................... 602,618 455,700
18,850 Pegasus Systems Inc.+ .......... 366,064 368,753
9,400 SERENA Software Inc.+ .......... 265,625 432,987
10,600 SmartForce plc, ADR+ ........... 250,794 502,175
26,100 Verity Inc.+ ................... 957,082 931,444
20,300 Witness Systems Inc.+ .......... 384,482 366,669
---------- ----------
5,746,168 6,764,883
---------- ----------
CONSUMER PRODUCTS -- 2.3%
31,000 Concord Camera Corp.+ .......... 734,867 794,375
---------- ----------
ELECTRONICS -- 16.2%
10,000 Benchmark Electronics Inc.+ .... 401,814 520,000
23,500 Brooks Automation Inc.+ ........ 812,905 778,437
16,000 Credence Systems Corp.+ ........ 803,911 480,000
9,900 DuPont Photomasks Inc.+ ........ 663,479 581,625
20,400 ESS Technology Inc.+ ........... 367,128 291,975
5,100 Keithley Instruments Inc. ...... 272,815 357,000
7,300 Merix Corp.+ ................... 384,722 473,131
18,400 Pericom Semiconductor Corp.+ ... 464,240 680,800
10,600 Semtech Corp.+ ................. 261,828 457,125
6,650 TranSwitch Corp.+ .............. 186,430 423,938
12,550 Zoran Corp.+ ................... 623,834 611,813
---------- ----------
5,243,106 5,655,844
---------- ----------
ENERGY AND UTILITIES -- 4.8%
9,900 Spinnaker Exploration Co.+ ..... 289,933 345,263
17,200 Stone Energy Corp.+ ............ 790,844 946,000
14,800 Western Resources Inc. ......... 371,354 370,925
---------- ----------
1,452,131 1,662,188
---------- ----------
FINANCIAL SERVICES -- 3.9%
17,162 Commerce Bancorp Inc. .......... 719,854 998,614
5,400 Greater Bay Bancorp ............ 352,685 374,963
---------- ----------
1,072,539 1,373,577
---------- ----------
SHARES COST VALUE
------ ---- -----
FOOD AND BEVERAGE -- 7.0%
18,900 California Pizza Kitchen Inc.+ . $ 416,370 $ 529,200
36,600 CEC Entertainment Inc.+ ........ 945,312 1,171,200
34,050 Jack in the Box Inc.+ .......... 741,213 729,947
---------- ----------
2,102,895 2,430,347
---------- ----------
HEALTH CARE -- 24.1%
16,000 Accredo Health Inc.+ ........... 488,250 782,000
20,600 Advance Paradigm Inc.+ ......... 348,703 869,063
6,100 Albany Molecular Research Inc.+ 241,553 342,744
4,200 Cell Therapeutics Inc.+ ........ 246,505 280,088
15,800 ILEX Oncology Inc.+ ............ 428,075 475,975
14,700 Medicis Pharmaceutical Corp., Cl. A+ 668,480 904,050
5,600 Molecular Devices Corp.+ ....... 353,009 550,200
15,600 Noven Pharmaceuticals Inc.+ .... 561,914 666,900
13,500 PRAECIS Pharmaceuticals Inc.+ .. 338,543 573,750
7,200 Protein Design Labs Inc.+ ...... 514,852 867,600
19,500 Province Healthcare Co.+ ....... 352,487 778,781
13,000 Tanox Inc.+ .................... 447,486 440,375
12,000 Triad Hospitals Inc.+ .......... 347,784 352,500
12,100 Varian Medical Systems Inc.+ ... 529,384 546,769
---------- ----------
5,867,025 8,430,795
---------- ----------
HOTELS AND GAMING -- 1.5%
25,700 Vail Resorts Inc.+ ............. 446,798 520,425
---------- ----------
PUBLISHING -- 1.4%
17,300 Penton Media Inc. .............. 418,471 475,750
---------- ----------
RETAIL -- 4.1%
29,600 Barnes & Noble Inc.+ ........... 615,774 582,750
8,400 Coldwater Creek Inc.+ .......... 297,825 226,800
10,425 Cost Plus Inc.+ ................ 206,719 314,053
26,400 Guitar Center Inc.+ ............ 390,673 325,050
---------- -----------
1,510,991 1,448,653
---------- -----------
TOTAL COMMON STOCKS ............ 27,854,990 33,052,664
---------- -----------
TOTAL INVESTMENTS -- 94.7% ...... $27,854,990 33,052,664
===========
OTHER ASSETS AND
LIABILITIES (NET) -- 5.3% 1,858,056
-----------
NET ASSETS -- 100.0%
(1,579,520 shares outstanding) $34,910,720
===========
--------------------
For Federal tax purposes:
Aggregate cost ................. $28,151,957
===========
Gross unrealized appreciation .. $ 6,070,541
Gross unrealized depreciation .. (1,169,834)
-----------
Net unrealized appreciation .... $ 4,900,707
===========
+ Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
13
<PAGE>
THE GABELLI WESTWOOD REALTY FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 95.5%
REAL ESTATE INVESTMENT TRUSTS -- 95.5%
APARTMENTS -- 24.8%
2,600 Apartment Investment & Management
Co., CL. A ................... $ 108,773 $ 119,762
3,500 Archstone Communities Trust .... 77,870 85,969
2,600 Avalon Bay Communities Inc. .... 101,900 123,987
1,600 BRE Properties Inc., Cl. A ..... 43,726 51,200
1,000 Camden Property Trust .......... 28,461 31,000
2,800 Equity Residential Properties
Trust ........................ 127,188 134,400
600 Essex Property Trust Inc. ...... 22,551 33,225
1,200 Post Properties Inc. ........... 49,848 52,275
1,600 Smith (Charles E.) Residential
Realty Inc. .................. 60,223 72,600
----------- ----------
620,540 704,418
----------- ----------
COMMERCIAL -- 1.4%
1,100 Mission West Properties Inc. ... 14,294 15,262
900 Prentiss Properties Trust ...... 22,028 23,512
----------- ---------
36,322 38,774
----------- ---------
DIVERSIFIED PROPERTY -- 16.6%
3,200 Catellus Development Corp.+ .... 50,414 56,000
1,300 Colonial Properties Trust ...... 34,853 33,394
4,166 Duke Realty Investments Inc. ... 93,006 100,505
2,400 Liberty Property Trust ......... 60,377 66,000
1,200 Pinnacle Holdings Inc.+ ........ 59,014 31,950
1,900 Spieker Properties Inc. ........ 86,600 109,369
2,000 Vornado Realty Trust ........... 72,095 74,250
----------- ----------
456,359 471,468
----------- ----------
FINANCIAL SERVICES -- 1.8%
2,300 Franchise Finance Corp. ........ 53,206 51,750
----------- ----------
HOTELS -- 6.4%
4,700 Host Marriott Corp. ............ 52,050 52,875
2,925 Meristar Hospitality Corp. ..... 56,087 59,231
2,200 Starwood Hotels & Resorts
Worldwide Inc. ............... 64,185 68,750
----------- ----------
172,322 180,856
----------- ----------
INDUSTRIAL PROPERTY -- 9.2%
2,300 AMB Property Corp. ............. 51,388 56,494
1,100 CenterPoint Properties Trust ... 41,586 50,669
2,000 First Industrial Realty Trust Inc. 56,363 61,500
3,900 ProLogis Trust ................. 82,559 92,625
----------- ----------
231,896 261,288
----------- ----------
SHARES COST VALUE
------ ---- -----
MANUFACTURED HOMES -- 1.2%
1,400 Manufactured Home Communities Inc. $ 34,036 $ 35,000
----------- ----------
OFFICE PROPERTY -- 17.1%
1,400 Alexandria Real Estate Equities Inc. 45,617 48,037
1,100 Arden Realty Inc. .............. 24,852 29,494
2,500 Boston Properties Inc. ......... 88,513 107,344
1,800 Brandywine Realty Trust ........ 33,297 36,450
5,284 Equity Office Properties Trust . 143,784 164,134
1,200 Highwoods Properties Inc. ...... 28,858 28,350
2,600 SL Green Realty Corp. .......... 65,121 72,963
----------- ----------
430,042 486,772
----------- ----------
PUBLIC STORAGE -- 2.8%
3,400 Public Storage Inc. ............ 91,030 81,388
----------- ----------
SHOPPING CENTERS -- 14.2%
3,400 Developers Diversified Realty Corp. 53,790 43,775
1,700 General Growth Properties Inc. . 56,424 54,719
2,000 Kimco Realty Corp. ............. 77,716 84,500
1,000 Macerich Co. ................... 25,321 21,250
2,500 Mills Corp. .................... 45,828 47,344
2,300 Regency Realty Corp. ........... 49,410 52,756
4,300 Simon Property Group Inc. ...... 112,510 100,781
----------- ----------
420,999 405,125
----------- ----------
TOTAL COMMON STOCKS ............ 2,546,752 2,716,839
----------- ----------
TOTAL INVESTMENTS -- 95.5% ...... $2,546,752 2,716,839
==========
OTHER ASSETS AND
LIABILITIES (NET) -- 4.5% ..... 127,904
----------
NET ASSETS -- 100.0%
(312,523 shares outstanding) $2,844,743
==========
--------------------
For Federal tax purposes:
Aggregate cost ................. $2,678,316
==========
Gross unrealized appreciation .. $ 106,172
Gross unrealized depreciation .. (67,649)
----------
Net unrealized appreciation .... $ 38,523
==========
+ Non-income producing security.
See accompanying notes to financial statements.
14
<PAGE>
THE GABELLI WESTWOOD MIGHTY MITES(SERVICE MARK) FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 83.7%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.4%
42,000 Scheib (Earl) Inc.+ ............ $ 231,225 $ 136,500
20,100 TransPro Inc. .................. 116,282 70,350
---------- ----------
347,507 206,850
---------- ----------
AVIATION: PARTS AND SERVICES -- 0.8%
13,000 Aviall Inc.+ ................... 184,791 83,687
3,500 Kaman Corp., Cl. A ............. 60,690 44,187
---------- ----------
245,481 127,874
---------- ----------
BROADCASTING -- 3.3%
24,400 CTN Media Group Inc.+ .......... 206,756 158,600
1,000 Cumulus Media Inc., Cl. A+ ..... 6,000 6,125
5,600 Granite Broadcasting Corp.+ .... 36,413 25,725
1,000 Gray Communications Systems Inc. 11,425 11,313
15,000 Gray Communications
Systems Inc., Cl. B .......... 184,675 156,562
1,000 On Command Corp.+ .............. 13,250 12,281
10,000 Salem Communications Corp., Cl .A+ 192,843 126,875
---------- ----------
651,362 497,481
---------- ----------
BUILDING AND CONSTRUCTION -- 1.4%
13,600 Eagle Supply Group Inc.+ ....... 52,875 52,700
8,357 Homasote Co. ................... 60,269 94,016
3,000 Huttig Building Products Inc.+ . 11,306 13,500
8,000 Nobility Homes Inc. ............ 57,875 46,000
---------- ----------
182,325 206,216
---------- ----------
BUSINESS SERVICES -- 2.3%
4,000 Berlitz International Inc.+ .... 73,825 34,000
2,000 Lady Baltimore Foods, Cl. A+ ... 122,125 105,125
6,000 Nashua Corp.+ .................. 86,958 50,625
654 National Stock Yards Co.+ ...... 63,400 61,476
14,000 PubliCard Inc.+ ................ 23,858 28,875
3,100 Temco Service Industries Inc.+ 69,650 65,100
---------- ----------
439,816 345,201
---------- ----------
CABLE -- 1.1%
13,500 Mercom Inc.+ (a) ............... 153,360 162,000
---------- ----------
COMMUNICATIONS EQUIPMENT -- 1.6%
11,000 Allen Telecom Inc.+ ............ 66,648 186,312
10,000 Digital Recorders Inc.+ ........ 38,656 26,250
21,300 Williams Controls Inc.+ ........ 46,956 34,612
---------- ----------
152,260 247,174
---------- ----------
COMPUTER SOFTWARE AND SERVICES -- 0.2%
3,936 PSINet Inc.+ ................... 92,865 37,884
---------- ----------
CONSUMER PRODUCTS -- 2.6%
2,000 Adams Golf Inc.+ ............... 8,625 2,812
8,600 Benjamin Moore & Co.+ .......... 233,124 194,575
2,000 National Presto Industries Inc. 70,069 59,875
27,000 Weider Nutrition International Inc. 131,130 133,312
---------- ----------
442,948 390,574
---------- ----------
CONSUMER SERVICES -- 1.0%
13,800 Bowlin Outdoor Advertising &
Travel Centers Inc.+ ......... 94,627 91,425
17,800 Carriage Services Inc., Cl. A+ 82,146 41,162
SHARES COST VALUE
------ ---- -----
188 DU Art Film Laboratories Inc.+ $ 26,696 $ 24,440
---------- ----------
203,469 157,027
---------- ----------
DIVERSIFIED INDUSTRIAL -- 1.9%
1,200 Ampco-Pittsburgh Corp. ......... 13,672 12,300
6,000 Lamson & Sessions Co.+ ......... 47,925 71,250
4,728 Quixote Corp. .................. 70,017 79,194
5,250 RWC Inc. ....................... 174,225 115,500
5,000 WHX Corp.+ ..................... 53,881 7,500
---------- ----------
359,720 285,744
---------- ----------
EDUCATIONAL SERVICES -- 1.9%
20,000 ProsoftTraining.com+ ........... 143,844 285,000
---------- ----------
ELECTRONICS -- 1.4%
300 Allen Organ Co., Cl. B ......... 21,650 19,875
7,000 Oak Technology Inc.+ ........... 25,875 191,625
---------- ----------
47,525 211,500
---------- ----------
ENERGY AND UTILITIES: ELECTRIC -- 4.8%
9,900 Bangor Hydro-Electric Co. ...... 153,957 239,456
10,100 El Paso Electric Co.+ .......... 84,803 139,077
7,100 Maine Public Service Co. ....... 135,681 173,950
3,500 St. Joseph Light & Power Co. ... 65,244 67,594
4,300 Unitil Corp. ................... 121,490 112,337
---------- ----------
561,175 732,414
---------- ----------
ENERGY AND UTILITIES: INTEGRATED -- 4.5%
41,300 Esenjay Exploration Inc. ....... 103,713 149,712
7,600 Florida Public Utilities Co. ... 116,317 120,175
13,100 Home-Stake Oil & Gas Co. ....... 74,738 134,275
19,700 Pontotoc Production Inc.+ ...... 149,113 187,150
10,000 Tengasco Inc.+ ................. 92,500 88,125
---------- ----------
536,381 679,437
---------- ----------
ENERGY AND UTILITIES: NATURAL GAS -- 8.7%
6,500 Cascade Natural Gas Corp. ...... 114,656 113,750
7,000 Chesapeake Utilities Corp. ..... 130,719 126,875
2,500 Corning Natural Gas Corp. ...... 63,750 44,375
3,600 Delta Natural Gas Co. Inc. ..... 62,375 63,000
7,000 NUI Corp. ...................... 183,631 211,312
5,500 Penn Virginia Corp. ............ 103,725 143,000
6,600 Piedmont Natural Gas Co. Inc. .. 190,259 202,125
8,500 RGC Resources Inc. ............. 167,731 163,094
5,500 SEMCO Energy Inc. .............. 85,612 84,562
5,500 South Jersey Industries Inc. ... 153,431 160,531
814 Southern Union Co. ............. 11,764 16,127
---------- ----------
1,267,653 1,328,751
---------- ----------
ENERGY AND UTILITIES: SERVICES -- 0.7%
2,500 Petroleum Geo-Services ASA + ... 38,225 43,125
5,000 RPC Inc. ....................... 32,125 58,750
---------- ----------
70,350 101,875
---------- ----------
ENERGY AND UTILITIES: WATER -- 5.2%
7,300 Artesian Resources Corp., Cl. A 176,619 170,638
1,069 Artesian Resources Corp., Cl. B 34,146 21,380
2,000 Birmingham Utilities Inc. ...... 38,531 26,750
2,760 California Water Service Group 61,330 73,830
5,000 Connecticut Water Service Inc. 146,417 161,250
1,000 Consolidated Water Co. Ltd. .... 7,500 7,125
See accompanying notes to financiaL statements.
15
<PAGE>
THE GABELLI WESTWOOD MIGHTY MITES(SERVICE MARK) FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: WATER (CONTINUED)
3,600 Pennichuck Corp. ............... $ 86,462 $ 93,600
1,900 SJW Corp. ...................... 121,745 225,625
300 Torrington Water Co. ........... 12,375 12,375
---------- ----------
685,125 792,573
---------- ----------
ENTERTAINMENT -- 3.9%
1,000 Canterbury Park Holding Corp.+ . 5,125 8,000
5,482 Fair Grounds Corp.+ ............ 165,428 186,388
2,000 Fisher Companies Inc. .......... 136,870 144,000
20,000 GC Companies Inc.+ ............. 151,081 60,000
24,000 Integrity Inc., Cl. A .......... 81,681 82,500
4,000 LodgeNet Entertainment Corp. ... 44,021 115,500
---------- ----------
584,206 596,388
---------- ----------
ENVIRONMENTAL SERVICES -- 1.4%
31,700 Envirogen Inc.+ ................ 73,988 67,363
13,700 Strategic Diagnostics Inc.+ .... 100,137 31,681
29,800 Weston (Roy F.) Inc.+ .......... 76,094 111,750
---------- ----------
250,219 210,794
---------- ----------
EQUIPMENT AND SUPPLIES -- 5.2%
7,000 Avalon Holdings Corp., Cl. A+ .. 46,881 21,438
3,000 Baldwin Technology Co. Inc., Cl A+ 6,713 5,438
24,000 Barringer Technologies Inc. .... 139,269 220,500
20,000 Core Materials Corp. ........... 61,000 36,250
13,500 Docuport Inc.+ ................. 139,313 94,500
4,500 Eastern Co. .................... 76,419 52,313
13,500 Fiberstars Inc.+ ............... 96,503 106,313
10,000 Itron Inc.+ .................... 64,281 61,250
15,500 Raytech Corp.+ ................. 64,800 45,531
14,000 SL Industries Inc. ............. 171,919 156,625
---------- ----------
867,098 800,158
---------- ----------
FINANCIAL SERVICES -- 6.6%
1,600 Berkshire Bancorp Inc. ......... 54,731 48,800
1,000 BKF Capital Group Inc. ......... 13,946 19,500
6,500 Cash America International Inc. 63,450 47,531
10,000 Crazy Woman Creek Bancorp Inc. . 128,362 112,500
1,000 Danielson Holding Corp.+ ....... 5,050 4,125
4,500 Doral Financial Corp. .......... 44,753 72,844
4,400 East West Bancorp Inc. ......... 52,013 86,075
4,000 Fidelity National Corp. ........ 30,375 29,000
9,200 First Mariner Bancorp Inc.+ .... 68,600 46,000
3,100 Long Island Financial Corp. .... 34,350 41,753
2,400 Monroe Title Insurance Corp. ... 30,600 24,000
7,508 State Bancorp Inc. ............. 118,272 99,481
5,701 Summit Bancorp ................. 104,496 196,685
18,100 Vail Banks Inc. ................ 177,313 174,213
---------- ----------
926,311 1,002,507
---------- ----------
FOOD AND BEVERAGE -- 1.2%
7,500 Boston Beer Co. Inc., Cl. A+ ... 59,500 67,500
1 Hain Celestial Group Inc.+ ..... 7 18
3,000 Genesee Corp., Cl. B ........... 87,563 120,750
---------- ----------
147,070 188,268
---------- ----------
SHARES COST VALUE
------ ---- -----
HEALTH CARE -- 3.3%
5,900 America Service Group Inc.+ .... $ 88,500 $ 153,400
700 Boiron SA ...................... 38,460 41,509
6,000 Matrix Pharmaceutical Inc.+ .... 23,313 93,375
16,000 Span-America Medical Systems Inc. 78,575 62,500
8,000 Sterile Recoveries Inc.+ ....... 57,719 99,000
3,700 Young Innovations Inc.+ ........ 59,088 57,813
---------- ----------
345,655 507,597
---------- ----------
HOME FURNISHINGS -- 0.0%
20,000 Carlyle Industries Inc.+ ....... 20,350 6,250
---------- ----------
HOTELS AND GAMING -- 1.1%
17,000 Jackpot Enterprises Inc. ....... 172,302 161,500
1,000 Magna Entertainment Corp., Cl. A+ 7,500 6,750
---------- ----------
179,802 168,250
---------- ----------
REAL ESTATE -- 2.3%
2,508 Biloxi Marsh Lands Corp. ....... 20,624 20,691
2,500 Blue Ridge Real Estate Co.+ .... 28,650 23,125
1,500 Bresler & Reiner Inc.+ ......... 43,725 41,250
12,000 Calcasieu Real Estate & Oil Co.
Inc.+ ........................ 66,250 72,000
82 Case Pomeroy & Co. Inc., Cl. B 98,986 80,852
7,800 Gyrodyne Company of America Inc. 140,463 110,175
---------- ----------
398,698 348,093
---------- ----------
RETAIL -- 3.6%
14,500 Barnett Inc.+ .................. 134,281 189,406
1,413 Bozzuto's Inc.+ ................ 56,430 44,510
5,000 Lillian Vernon Corp. ........... 77,750 48,750
8,750 Schultz Sav-O Stores Inc. ...... 135,075 95,703
3,000 Star Struck Ltd.+ .............. 11,400 5,438
32,700 Tandycrafts Inc.+ .............. 98,479 77,663
6,700 Village Super Market Inc., Cl. A+ 93,131 80,400
5,000 Yogen Fruz World-Wide Inc., Cl .A+ 6,746 4,154
---------- ----------
613,292 546,024
---------- ----------
SPECIALTY CHEMICALS -- 2.4%
14,000 Material Sciences Corp.+ ....... 136,481 159,250
5,800 Sybron Chemicals Inc.+ ......... 93,559 201,188
---------- ----------
230,040 360,438
---------- ----------
TELECOMMUNICATIONS -- 5.4%
4,000 Adelphia Business Solutions Inc. 53,688 47,250
500 Choice One Communications Inc.+ 10,000 6,094
6,795 Community Service
TEL Communications ........... 212,480 173,272
11,000 Conestoga Enterprises Inc. ..... 205,012 211,750
3,375 CoreComm Ltd.+ ................. 16,935 26,789
4,500 Electric Lightwave Inc., Cl. A+ 67,750 38,250
80 Horizon Telecom Inc.+ .......... 9,250 8,750
339 Horizon Telecom Inc., Cl. B+ (a) 39,073 37,078
500 Lexcom Telephone Co. ........... 20,000 23,500
1,892 New Ulm Telecom Inc.+ .......... 58,690 47,773
3,900 Shenandoah Telecommunications Co. 90,869 131,625
9,000 Startec Global Communications Corp.+ 75,685 53,438
2,000 Viatel Inc.+ ................... 26,000 20,500
---------- ----------
885,432 826,069
---------- ----------
See accompanying notes to financial statements.
16
<PAGE>
THE GABELLI WESTWOOD MIGHTY MITES(SERVICE MARK) FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- 0.6%
11,000 International Shipholding Corp.+ $ 137,094 $ 93,500
---------- -----------
WIRELESS COMMUNICATIONS -- 1.9%
4,500 Leap Wireless International Inc. 27,000 281,531
200 Tritel Inc., Cl. A+ ............ 3,600 2,863
---------- -----------
30,600 284,394
---------- -----------
TOTAL COMMON STOCKS ............ 12,199,033 12,734,305
---------- -----------
PREFERRED STOCKS -- 0.4%
BUSINESS SERVICES -- 0.4%
6,000 MindArrow Systems Inc.,
Pfd., Ser. C+ (a) ............ 150,000 65,625
---------- -----------
WARRANTS -- 0.0%
BUILDING AND CONSTRUCTION -- 0.0%
400 Eagle Supply Group Inc.
expire 03/12/04+ ............. 450 231
---------- -----------
BUSINESS SERVICES -- 0.0%
1,200 MindArrow Systems Inc.
expire 04/15/01+ (a) ......... 0 0
---------- -----------
TOTAL WARRANTS ................. 450 231
---------- -----------
PRINCIPAL
AMOUNT
---------
U.S. GOVERNMENT OBLIGATIONS -- 9.5%
$1,458,000 U.S. Treasury Bills,
5.90% to 6.29% ++,
due 10/05/00 to 12/14/00 ..... 1,445,468 1,445,418
---------- -----------
COST VALUE
---- -----
TOTAL INVESTMENTS -- 93.6% ..... $13,794,951 $14,245,579
===========
OTHER ASSETS AND
LIABILITIES (NET) -- 6.4% .... 967,342
-----------
NET ASSETS -- 100.0%
(1,086,314 shares outstanding) $15,213,673
===========
--------------------
For Federal tax purposes:
Aggregate cost ................. $13,796,545
===========
Gross unrealized appreciation .. $ 2,222,460
Gross unrealized depreciation .. (1,773,426)
-----------
Net unrealized appreciation .... $ 449,034
===========
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
(a) Security fair valued under procedures established by the Board of
Trustees.
See accompanying notes to financial statements.
17
<PAGE>
THE GABELLI WESTWOOD FUNDS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY BALANCED INTERMEDIATE SMALLCAP REALTY MIGHTY
FUND FUND BOND FUND EQUITY FUND FUND MITES(SERVICE MARK) FUND
------------ ------------ ------------ ------------ ----------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $168,609,069, $131,144,301,
$6,405,631, $27,854,990,
$2,546,752 and $13,794,951,
respectively) .............. $202,912,285 $145,794,124 $ 6,305,523 $ 33,052,664 $ 2,716,839 $ 14,245,579
Cash ........................... 3,661,567 881,520 70,678 2,442,172 97,406 13,568
Dividends and interest receivable 99,927 991,748 104,915 2,299 18,562 17,623
Receivable for Fund shares sold 562,170 52,335 -- 601,147 -- 132,176
Receivable for investments sold 4,129,312 1,913,929 -- 267,414 -- 897,084
Receivable from advisor ....... -- -- 5,715 -- 13,628 --
Deferred organizational expense -- -- -- 3,803 3,531 24,780
Other assets .................. -- -- -- 13,288 19,858 19,525
------------ ------------ ----------- ------------ ----------- ------------
TOTAL ASSETS .................. 211,365,261 149,633,656 6,486,831 36,382,787 2,869,824 15,350,335
------------ ------------ ----------- ------------ ----------- ------------
LIABILITIES:
Dividends payable ............. -- -- 2,506 -- -- --
Payable for Fund shares redeemed 85,132 236,737 -- 552,928 -- 98,622
Payable for investments purchased 4,734,070 2,140,890 -- 855,601 -- --
Payable for investment advisory
fees ....................... 167,910 90,937 -- 24,997 -- 3,764
Payable for distribution fees 42,414 31,918 1,316 7,327 578 3,178
Payable to custodian .......... -- -- 1,000 -- 1,500 6,500
Other accrued expenses ........ 109,159 63,470 30,548 31,214 23,003 24,598
------------ ------------ ----------- ------------ ----------- ------------
TOTAL LIABILITIES ............ 5,138,685 2,563,952 35,370 1,472,067 25,081 136,662
------------ ------------ ----------- ------------ ----------- ------------
NET ASSETS ................... $206,226,576 $147,069,704 $ 6,451,461 $ 34,910,720 $ 2,844,743 $ 15,213,673
============ ============ =========== ============ =========== ============
NET ASSETS CONSIST OF:
Share of beneficial interest,
at par value .............. $ 18,543 $ 11,864 $ 640 $ 1,580 $ 313 $ 1,086
Additional paid-in capital ... 149,204,163 120,865,438 7,039,159 23,256,258 3,083,447 12,251,719
Accumulated (distributions in
excess of) net investment income -- 34,025 (41) -- -- 38,546
Accumulated (distributions in
excess of) net realized gain on
investments ............... 22,700,654 11,508,554 (488,189) 6,455,208 (409,104) 2,471,694
Net unrealized appreciation
(depreciation) on investments 34,303,216 14,649,823 (100,108) 5,197,674 170,087 450,628
------------ ------------ ----------- ------------ ----------- ------------
TOTAL NET ASSETS ............. $206,226,576 $147,069,704 $ 6,451,461 $ 34,910,720 $ 2,844,743 $ 15,213,673
============ ============ =========== ============ =========== ============
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Shares of beneficial interest
outstanding ($0.001 par value) 18,350,574 11,239,375 640,076 1,579,520 312,523 1,082,854
============ ============ =========== ============ =========== ============
NET ASSET VALUE, offering and
redemption price per share .. $11.12 $12.40 $10.08 $22.10 $9.10 $14.00
====== ====== ====== ====== ===== ======
CLASS A:
Shares of beneficial interest
outstanding ($0.001 par value) 192,155 624,399 3,460
======= ======= ======
NET ASSET VALUE, offering and
redemption price per share .. $11.10 $12.36 $14.00
====== ====== ======
Maximum sales charge ........... 4.00% 4.00% 4.00%
====== ====== ======
Maximum offering price per
Class A share (NAV / 0.96,
based on maximum sales
charge of 4.00% of the
offering price at
September 30, 2000) ......... $11.56 $12.88 $14.58
====== ====== ======
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
THE GABELLI WESTWOOD FUNDS
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY BALANCED INTERMEDIATE SMALLCAP REALTY MIGHTY
FUND FUND BOND FUND EQUITY FUND FUND MITES(SERVICE MARK) FUND
------------ ------------ ------------ ------------ ----------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ................... $ 2,614,000 $ 1,447,885 $ -- $ 32,624 $ 119,997 $ 192,595
Interest .................... -- 3,796,704 374,533 -- -- 71,753
------------ ------------ ----------- ------------ ----------- ------------
TOTAL INVESTMENT INCOME ..... 2,614,000 5,244,589 374,533 32,624 119,997 264,348
------------ ------------ ----------- ------------ ----------- ------------
EXPENSES:
Investment advisory fees .... 1,780,390 1,165,714 36,464 307,131 19,956 140,297
Distribution fees -- Class AAA 439,773 366,589 15,190 76,783 4,989 35,140
Distribution fees -- Class A 10,650 43,964 -- -- -- 55
Legal and audit fees ........ 43,641 42,811 19,370 24,840 14,836 15,826
Custodian fees .............. 66,806 61,949 7,093 32,843 9,350 18,514
Shareholder services fees ... 216,527 102,758 11,447 20,285 4,377 26,644
Registration fees ........... 56,400 52,000 20,000 23,712 22,142 24,375
Shareholder report expenses 10,297 7,474 950 4,166 246 5,959
Organizational expenses ..... -- -- -- 2,522 1,771 9,531
Insurance ................... 5,750 4,600 2,850 2,850 2,850 2,850
Miscellaneous expenses ...... 17,074 16,537 4,651 4,414 2,195 3,025
------------ ------------ ----------- ------------ ----------- ------------
TOTAL EXPENSES .............. 2,647,308 1,864,396 118,015 499,546 82,712 282,216
------------ ------------ ----------- ------------ ----------- ------------
LESS:
Expense reimbursements ... -- -- (53,792) (15,747) (48,250) (71,451)
Custodian fee credits .... (31,153) (29,259) (3,439) (24,032) (4,582) (566)
------------ ------------ ----------- ------------ ----------- ------------
TOTAL NET EXPENSES .......... 2,616,155 1,835,137 60,784 459,767 29,880 210,199
------------ ------------ ----------- ------------ ----------- ------------
NET INVESTMENT INCOME (LOSS) (2,155) 3,409,452 313,749 (427,143) 90,117 54,149
------------ ------------ ----------- ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on
investments .............. 25,882,023 13,222,898 (116,187) 7,258,848 (184,630) 2,668,632
Net change in unrealized
appreciation (depreciation)
on investments ........... 4,190,659 2,577,133 165,410 (121,098) 507,201 (181,125)
------------ ------------ ----------- ------------ ----------- ------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ........... 30,072,682 15,800,031 49,223 7,137,750 322,571 2,487,507
------------ ------------ ----------- ------------ ----------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............. $ 30,070,527 $ 19,209,483 $ 362,972 $ 6,710,607 $ 412,688 $ 2,541,656
============ ============ =========== ============ =========== ============
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
THE GABELLI WESTWOOD FUNDS
STATEMENT OF CHANGES IN NET ASSETS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY FUND BALANCED FUND
----------- -------------
FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (2,155) $ 731,661 $ 3,409,452 $ 3,404,673
Net realized gain on investment
transactions .............. 25,882,023 15,111,162 13,222,898 10,229,060
Net change in unrealized
appreciation on investments 4,190,659 18,690,261 2,577,133 3,959,648
-------------- -------------- -------------- --------------
Net increase in net assets
resulting from operations 30,070,527 34,533,084 19,209,483 17,593,381
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ................ (302,833) (1,202,243) (3,247,703) (3,227,275)
Class A .................. -- (6,778) (172,185) (192,481)
-------------- -------------- -------------- --------------
(302,833) (1,209,021) (3,419,888) (3,419,756)
-------------- -------------- -------------- --------------
In excess of net investment income
Class AAA ................ (22,008) -- -- --
-------------- -------------- -------------- --------------
(22,008) -- -- --
-------------- -------------- -------------- --------------
Net realized gain on investment transactions
Class AAA ................ (17,441,545) (4,421,909) (10,466,471) (1,447,392)
Class A .................. (240,928) (55,551) (609,682) (121,230)
-------------- -------------- -------------- --------------
(17,682,473) (4,477,460) (11,076,153) (1,568,622)
-------------- -------------- -------------- --------------
Total distributions to shareholders (18,007,314) (5,686,481) (14,496,041) (4,988,378)
-------------- -------------- -------------- --------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ................ 81,135,460 47,329,910 30,921,934 68,922,349
Class A .................. 255,688 419,120 412,304 1,028,954
-------------- -------------- -------------- --------------
81,391,148 47,749,030 31,334,238 69,951,303
-------------- -------------- -------------- --------------
Proceeds from reinvestment of
dividends
Class AAA ................ 17,107,065 5,409,705 13,256,283 4,487,667
Class A .................. 235,889 60,421 633,532 253,939
-------------- -------------- -------------- --------------
17,342,954 5,470,126 13,889,815 4,741,606
-------------- -------------- -------------- --------------
Cost of shares redeemed
Class AAA ................ (61,115,587) (101,553,974) (69,596,123) (52,811,686)
Class A .................. (713,375) (1,112,809) (2,997,685) (7,566,829)
-------------- -------------- -------------- --------------
(61,828,962) (102,666,783) (72,593,808) (60,378,515)
-------------- -------------- -------------- --------------
Net increase (decrease) in net
assets from shares of beneficial
interest transactions .... 36,905,140 (49,447,627) (27,369,755) 14,314,394
-------------- -------------- -------------- --------------
Net increase (decrease) in net
assets ................... 48,968,353 (20,601,024) (22,656,313) 26,919,397
NET ASSETS:
Beginning of period ......... 157,258,223 177,859,247 169,726,017 142,806,620
-------------- -------------- -------------- --------------
End of period ............... $ 206,226,576 $ 157,258,223 $ 147,069,704 $ 169,726,017
============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
THE GABELLI WESTWOOD FUNDS
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND SMALLCAP EQUITY FUND
---------------------- --------------------
FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
2000 1999 2000 1999
-------------- -------------- -------------- --------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) .. $ 313,749 $ 343,959 $ (427,143) $ (140,696)
Net realized gain (loss)
on investment transactions (116,187) (12,165) 7,258,848 913,091
Net change in unrealized
appreciation (depreciation)
on investments ............. 165,410 (504,721) (121,098) 6,427,992
-------------- -------------- -------------- --------------
Net increase (decrease) in net
assets resulting from
operations ................ 362,972 (172,927) 6,710,607 7,200,387
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ......... (313,749) (344,010) -- --
In excess of net investment income (41) -- -- --
Net realized gain on investment
transactions .............. -- -- (1,022,838) --
-------------- -------------- -------------- --------------
Total distributions to shareholders (313,790) (344,010) (1,022,838) --
-------------- -------------- -------------- --------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued ... 1,099,707 2,272,144 33,361,801 8,535,699
Proceeds from reinvestment
of dividends .............. 271,492 298,379 1,013,812 --
Cost of shares redeemed ....... (1,182,888) (3,457,546) (25,513,729) (7,068,548)
-------------- -------------- -------------- --------------
Net increase (decrease) in net
assets from shares of
beneficial interest transactions 188,311 (887,023) 8,861,884 1,467,151
-------------- -------------- -------------- --------------
Net increase (decrease) in
net assets ................ 237,493 (1,403,960) 14,549,653 8,667,538
NET ASSETS:
Beginning of period ........... 6,213,968 7,617,928 20,361,067 11,693,529
-------------- -------------- -------------- --------------
End of period ................. $ 6,451,461 $ 6,213,968 $ 34,910,720 $ 20,361,067
============== ============== ============== ==============
<CAPTION>
REALTY FUND MIGHTY MITES(SERVICE MARK) FUND
----------- -------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, FOR THE YEAR ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income ......... $ 90,117 $ 83,135 $ 54,149 $ 72,301
Net realized gain (loss) on
investment transactions ... (184,630) (205,910) 2,668,632 1,169,303
Net change in unrealized
appreciation (depreciation)
on investments ............ 507,201 8,039 (181,125) 891,554
-------------- -------------- -------------- --------------
Net increase (decrease) in net
assets resulting from operations 412,688 (114,736) 2,541,656 2,133,158
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (Class AAA) (76,383) (71,254) (85,390) (46,367)
In excess of net investment income
(Class AAA) ............... (4,237) (13,527) -- --
Net realized gain on investment
transactions (Class AAA) .. -- -- (1,366,241) (955)
-------------- -------------- -------------- --------------
Total distributions to shareholders (80,620) (84,781) (1,451,631) (47,322)
-------------- -------------- -------------- --------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA .................. 3,741,651 725,155 13,287,843 25,153,091
Class A .................... -- -- 47,993 --
-------------- -------------- -------------- --------------
3,741,651 725,155 13,335,836 2 5,153,091
-------------- -------------- -------------- --------------
Proceeds from reinvestment of
dividends (Class AAA) ..... 55,378 55,657 1,430,533 46,437
Cost of shares redeemed (Class AAA) (3,068,215) (612,166) (10,848,095) (21,918,377)
-------------- -------------- -------------- --------------
Net increase in net assets from
shares of beneficial interest
transactions .............. 728,814 168,646 3,918,274 3,281,151
-------------- -------------- -------------- --------------
Net increase (decrease) in
net assets ................ 1,060,882 (30,871) 5,008,299 5,366,987
NET ASSETS:
Beginning of period ........... 1,783,861 1,814,732 10,205,374 4,838,387
-------------- -------------- -------------- --------------
End of period ................. $ 2,844,743 $ 1,783,861 $ 15,213,673 $ 10,205,374
============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
THE GABELLI WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Westwood Funds (the "Trust") are registered under
the Investment Company Act of 1940, as amended the "1940 Act"), as a
diversified, open-end management investment company and currently consists of
six active separate investment portfolios: Equity Fund, Balanced Fund,
Intermediate Bond Fund, SmallCap Equity Fund, Realty Fund and Mighty Mites Fund
collectively, the "Funds"), each with four classes of shares known as the Class
AAA Shares (formerly the "Retail Class"), Class A Shares (formerly the "Service
Class"), Class B Shares and Class C Shares. At September 30, 2000, the Funds had
no Class A, Class B or Class C Shares outstanding, with the exception of Equity
Fund Class A Shares, Balanced Fund Class A Shares and Mighty Mites Fund Class A
Shares. Each class of shares outstanding bears the same voting, dividend,
liquidation and other rights and conditions, except that the expenses incurred
in the distribution and marketing of such shares are different for each class.
The Gabelli Westwood Cash Management Fund has not commenced operations.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of the significant accounting policies followed by
the Funds in the preparation of their financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("Nasdaq") or traded on foreign exchanges are
valued at the last sale price on that exchange as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day, except for open short positions, which are
issued at the last asked price). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. Portfolio securities traded on more
than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by Gabelli Advisers, Inc.
(the "Adviser"). Securities and assets for which market quotations are not
readily available are valued at their fair value as determined in good faith
under procedures established by and under the general supervision of the Board
of Trustees. Short term debt securities with remaining maturities of 60 days or
less are valued at amortized cost, unless the Trustees determine such does not
reflect the securities' fair value, in which case these securities will be
valued at their fair value as determined by the Trustees. Debt instruments
having a maturity greater than 60 days are valued at the highest bid price
obtained from a dealer maintaining an active market in those securities.
ACCOUNTING FOR REAL ESTATE INVESTMENT TRUSTS. The Funds own shares of real
estate investment trusts ("REITS") which report information on the source of
their distributions annually. Distributions received from REITS during the year
which are known to be a return of capital are recorded as a reduction to the
cost of the individual REIT.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment
income are declared and paid annually for the Equity Fund, SmallCap Equity Fund
and Mighty Mites Fund, and quarterly for the Balanced Fund and Realty Fund. The
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
22
<PAGE>
THE GABELLI WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Funds, timing
differences and differing characterization of distributions made by the Funds.
For the year ended September 30, 2000, the following reclassifications were made
to increase (decrease) such accounts with offsetting adjustments to additional
paid-in-capital. These reclassifications related primarily to distributions from
Real Estate Investment Trusts, net operating losses and nondeductible
organizational costs.
<TABLE>
<CAPTION>
ACCUMULATED UNDISTRIBUTED ACCUMULATED REALIZED
NET INVESTMENT INCOME (LOSS) GAIN (LOSS) ON INVESTMENTS
------------------------------- --------------------------
<S> <C> <C>
Equity Fund .......................... $ 22,008 $(22,008)
Balanced Fund ........................ 15,664 (15,664)
SmallCap Equity Fund ................. 427,143 (427,143)
Realty Fund .......................... (9,497) (135)
Mighty Mites Fund .................... 9,530 --
</TABLE>
PROVISION FOR INCOME TAXES. The Funds intend to continue to qualify as regulated
investment companies under Subchapter M of the Internal Revenue Code of 1986, as
amended. By so qualifying, the Funds will not be subject to federal income taxes
to the extent that they distribute all of their taxable income for the fiscal
year.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Expenses directly
attributable to a Fund are charged to that Fund. Other expenses are allocated
proportionately among each Fund within the Trust in relation to the net assets
of each Fund or on another reasonable basis. In calculating net asset value per
share of each class, investment income, realized and unrealized gains and losses
and expenses other than class specific expenses, are allocated daily to each
class of shares based upon the proportion of net assets of each class at the
beginning of each day. Distribution expenses are solely borne by the class
incurring the expense.
CONCENTRATION RISK. The Realty Fund invests a substantial portion of its assets
in REITS; therefore it may be more affected by economic developments in the real
estate industry than would a general equity fund.
3. INVESTMENT ADVISORY AGREEMENTS. The Funds have entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Funds will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% for the Equity Fund, SmallCap Equity Fund, Realty Fund
and Mighty Mites Fund, 0.75% for the Balanced Fund, and 0.60% for the
Intermediate Bond Fund, of each Fund's average daily net assets. The Adviser has
contractually agreed to waive its investment advisory fee and/or reimburse
expenses to 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. Such fee waiver/reimbursement arrangement will continue until
at least September 30, 2001. For the year ended September 30, 2000, the Adviser
was entitled to fees of $1,780,390, $307,131, $19,956, $140,297, $1,165,714 and
$36,464 for the Equity, SmallCap Equity, Realty, Mighty Mites, Balanced and
Intermediate Bond Funds, respectively. For the year ended September 30, 2000,
the Adviser waived fees or reimbursed expenses in the amount of $15,747,
$48,250, $71,451 and $53,792 for the SmallCap Equity, Realty, Mighty Mites and
Intermediate Bond Funds, respectively.
The Funds, with the exception of the Mighty Mites Fund, have also entered into a
sub-advisory agreement with Westwood Management Corp. (the "Sub-Adviser")
whereby the Adviser pays the Sub-Adviser the greater of $150,000 per year on an
aggregate basis for the Funds or a fee of 35% of net revenues to the Adviser
from the Funds. For the year ended
23
<PAGE>
THE GABELLI WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
September 30, 2000, the Adviser paid to the Sub-Adviser fees of $494,111,
$84,208, $5,465, $293,896 and $8,272 for the Equity, SmallCap Equity, Realty,
Balanced and Intermediate Bond Funds, respectively.
4. DISTRIBUTION PLANS. The Funds have adopted distribution plans pursuant to
Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. ("Gabelli & Company"), an
affiliate of Gabelli Asset Management Inc., serves as distributor of the Funds.
The Class AAA Share Plan authorizes payment by the Funds to Gabelli & Company in
connection with the distribution of its Class AAA shares at an annual rate of
0.25% of the average daily net assets of those Funds each fiscal year. Such
payments are accrued daily and paid monthly. For the year ended September 30,
2000, the Funds incurred distribution expenses in the amounts of $439,773,
$366,589, $15,190, $76,783, $4,989 and $35,140 for Class AAA of the Equity,
Balanced, Intermediate Bond, SmallCap Equity, Realty and Mighty Mites Funds,
respectively.
Under the Class A Share Plan for the Equity, Balanced and Mighty Mites Funds,
the Plan authorizes payment to Gabelli & Company in connection with the
distribution of its Class A shares at an annual rate of 0.50% of the average
daily net assets of those Funds each fiscal year. Such payments are accrued
daily and paid monthly. For the year ended September 30, 2000, the Funds
incurred distribution expenses in the amounts of $10,650 for the Equity Fund,
$43,964 for the Balanced Fund, and $55 for the Mighty Mites 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 Fund's investment operations.
6. PORTFOLIO SECURITIES. Purchases and sales of securities for the year ended
September 30, 2000, other than short term securities, are as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ----------
<S> <C> <C>
Equity Fund ........................ $176,045,875 $159,037,025
Balanced Fund ...................... 99,325,529 135,785,646
Intermediate Bond Fund ............. 4,003,205 3,835,928
SmallCap Equity Fund ............... 70,063,248 63,376,207
Realty Fund ........................ 2,085,420 1,428,498
Mighty Mites Fund .................. 9,824,408 8,242,340
</TABLE>
7. TRANSACTIONS WITH AFFILIATES. During the year ended September 30, 2000, the
Mighty Mites Fund paid brokerage commissions of $7,282 to Gabelli & Company and
its affiliates.
8. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
EQUITY FUND BALANCED FUND INTERMEDIATE BOND FUND
------------------------ ------------------------ --------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------ ------------------------ --------------------------
CLASS AAA 2000 1999 2000 1999 2000 1999
---------- ------------ ------------ ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ...................... 7,642,488 4,629,734 2,581,544 5,762,724 110,812 217,090
Shares issued upon
reinvestment of dividends ..... 1,736,758 552,034 1,149,946 375,455 27,362 28,905
Shares redeemed .................. (5,844,402) (9,884,292) (5,880,104) (4,424,361) (119,868) (333,664)
---------- ---------- ---------- ---------- -------- --------
Net increase (decrease) in
Class AAA shares ........... 3,534,844 (4,702,524) (2,148,614) 1,713,818 18,306 87,669
========== ========== ========== ========== ======== ========
</TABLE>
24
<PAGE>
THE GABELLI WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY FUND BALANCED FUND INTERMEDIATE BOND FUND
------------------------ ------------------------- --------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------ ------------------------ --------------------------
CLASS A 2000 1999 2000 1999 2000 1999
---------- ------------ ------------ ---------- -------------- ----------
<S> <C> <C> <C> <C>
Shares sold .................... 24,015 41,215 34,255 86,912
Shares issued upon reinvestment
of dividends ................ 23,972 6,159 55,188 21,391
Shares redeemed ................ (68,217) (110,209) (249,556) (655,052)
-------- -------- -------- --------
Net decrease in Class A shares (20,230) (62,835) (160,113) (546,749)
======== ======== ======== ========
<CAPTION>
SMALLCAP EQUITY FUND REALTY FUND MIGHTY MITES(SERVICE MARK) FUND
------------------------ ------------------------ --------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
------------------------ ------------------------ --------------------------
CLASS AAA 2000 1999 2000 1999 2000 1999
---------- ------------ ------------ ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold .................... 1,565,308 559,530 437,198 88,324 972,257 2,294,614
Shares issued upon reinvestment
of dividends ................ 51,436 -- 6,839 6,914 111,673 4,333
Shares redeemed ................ (1,182,888) (459,943) (365,888) (76,095) (791,596) (2,007,020)
---------- -------- --------- ----------- ---------- ----------
Net increase in Class AAA shares 433,856 99,587 78,149 19,143 292,334 291,927
========== ======== ========= =========== ========== ==========
<CAPTION>
CLASS A
<S> <C>
Shares sold .................... 3,460
Shares issued upon reinvestment
of dividends ................ --
Shares redeemed ................ --
---------
Net increase in Class A shares 3,460
=========
</TABLE>
9. FEDERAL INCOME TAX INFORMATION. The Intermediate Bond Fund has capital loss
carryforwards for Federal income tax purposes of $261,089 and $107,989 available
through September 2003 and 2008, respectively. The Realty Fund has capital loss
carryforwards for Federal income tax purposes of $33,537 and $244,003 available
through September 2007 and 2008, respectively. These loss carryforwards are
available to reduce distributions of net capital gains to shareholders.
Under current tax law, capital losses realized after October 31 may be deferred
and treated as occurring on the first day of the following fiscal year. The
Intermediate Bond Fund incurred losses of $115,863 after October 31, 1999. Such
losses will be treated, for tax purposes, as arising on October 1, 2000.
10. NEW SHARE CLASSES. On November 16, 1999, the Board of Trustees of the Funds
approved an amended and restated Rule 18f-3 Multi Class Plan relating to the
creation of two additional classes of shares of the Funds--Class B Shares and
Class C Shares (the "New Share Classes"). The existing Retail Class was
redesignated as Class AAA, while the existing Service Class was redesignated as
Class A. In addition, the Board also approved an Amended andRestated
Distribution Agreement, Rule 12b-1 plan for each of the New Share Classes and an
Amended and Restated Plan of Distribution for the existing classes of shares
(Class AAA Shares and Class A Shares). The Class B and Class C Shares commenced
being offered to the public on June 15, 2000.
25
<PAGE>
THE GABELLI WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------- -------------------------------------------------------------
NET
REALIZED
NET ASSET NET AND UNREALIZED TOTAL NET NET
VALUE, INVESTMENT GAIN FROM NET REALIZED ASSET VALUE,
YEAR ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL END OF TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(D) INVESTMENTS(D) OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS PERIOD RETURN+
------------ --------- ---------- -------------- ---------- ---------- ----------- ------------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUND
CLASS AAA
2000 $10.46 $(0.00)(c) $1.86 $1.86 $(0.02) $(1.18) $(1.20) $11.12 19.3%
1999 8.99 0.04 1.72 1.76 (0.06) (0.23) (0.29) 10.46 19.8
1998 9.57 0.07 (0.22) (0.15) (0.06) (0.37) (0.43) 8.99 (1.4)
1997 7.68 0.07 2.72 2.79 (0.07) (0.83) (0.90) 9.57 39.6
1996 6.59 0.08 1.59 1.67 (0.06) (0.52) (0.58) 7.68 26.9
CLASS A
2000 $10.46 $(0.03) $1.85 $1.82 -- $(1.18) $(1.18) $11.10 19.0%
1999 8.97 0.02 1.73 1.75 (0.03) (0.23) (0.26) 10.46 19.5
1998 9.57 0.08 (0.25) (0.17) (0.06) (0.37) (0.43) 8.97 (1.8)
1997 7.69 0.06 2.71 2.77 (0.06) (0.83) (0.89) 9.57 39.3
1996 6.57 0.06 1.58 1.64 -- (0.52) (0.52) 7.69 26.3
<CAPTION>
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------
NET
NET ASSETS, INVESTMENT EXPENSES EXPENSES
END OF INCOME (LOSS) NET OF BEFORE PORTFOLIO
YEAR ENDED PERIOD TO AVERAGE WAIVERS/ WAIVERS/ TURNOVER
SEPTEMBER 30 (IN 000'S) NET ASSETS REIMBURSEMENTS(A) REIMBURSEMENTS(B) RATE
------------ ----------- ------------- ----------------- ----------------- ---------
<S> <C> <C> <C> <C> <C>
EQUITY FUND
CLASS AAA
2000 $204,094 (0.00)% 1.48% 1.48% 91%
1999 155,036 0.38 1.49 1.49 67
1998 175,391 0.73 1.47 1.47 77
1997 128,697 1.11 1.53 1.59 61
1996 29,342 1.16 1.50 1.95 106
CLASS A
2000 $2,133 (0.25)% 1.73% 1.73% 91%
1999 2,222 0.13 1.74 1.74 67
1998 2,468 0.46 1.72 1.72 77
1997 3,338 0.85 1.78 1.84 61
1996 1,221 0.92 1.74 2.19 106
-----------------------
<FN>
+ 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. Performance excludes the effect of any
front-end sales charge.
(a) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian
fee credits, the expense ratios would be 1.47% (Class AAA) and 1.72% (Class
A) for 2000, 1.44% (Class AAA) and 1.69% (Class A) for 1999, 1.45% (Class
AAA) and 1.70% (Class A) for 1998, 1.50% (Class AAA) and 1.75% (Class A)
for 1997 and 1.44% (Class AAA) and 1.68% (Class A) for 1996.
(b) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(c) Amount represents less than $0.005 per share.
(d) Per share amounts have been calculated using the monthly average shares
outstanding method.
</FN>
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
THE GABELLI WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------- -------------------------------------------------------------
NET
REALIZED
NET ASSET NET AND UNREALIZED TOTAL NET NET
VALUE, INVESTMENT GAIN FROM NET REALIZED ASSET VALUE,
YEAR ENDED BEGINNING INCOME ON INVESTMENT INVESTMENT GAIN ON TOTAL END OF TOTAL
SEPTEMBER 30 OF PERIOD (C) INVESTMENTS(C) OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS PERIOD RETURN+
------------ --------- ---------- -------------- ---------- ---------- ----------- ------------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCED FUND
CLASS AAA
2000 $11.98 $0.27 $1.23 $1.50 $(0.27) $(0.81) $(1.08) $12.40 13.4%
1999 10.98 0.25 1.12 1.37 (0.25) (0.12) (0.37) 11.98 12.6
1998 11.49 0.26 0.05 0.31 (0.26) (0.56) (0.82) 10.98 2.8
1997 9.71 0.25 2.36 2.61 (0.25) (0.58) (0.83) 11.49 28.3
1996 8.47 0.22 1.37 1.59 (0.22) (0.13) (0.35) 9.71 19.1
CLASS A
2000 $11.95 $0.24 $1.22 $1.46 $(0.24) $(0.81) $(1.05) $12.36 13.1%
1999 10.96 0.22 1.11 1.33 (0.22) (0.12) (0.34) 11.95 12.2
1998 11.46 0.26 0.02 0.28 (0.22) (0.56) (0.78) 10.96 2.6
1997 9.69 0.24 2.33 2.57 (0.22) (0.58) (0.80) 11.46 28.0
1996 8.45 0.20 1.37 1.57 (0.20) (0.13) (0.33) 9.69 18.9
<CAPTION>
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------------------------
NET
NET ASSETS, INVESTMENT EXPENSES EXPENSES
END OF INCOME NET OF BEFORE PORTFOLIO
YEAR ENDED PERIOD TO AVERAGE WAIVERS/ WAIVERS/ TURNOVER
SEPTEMBER 30 (IN 000'S) NET ASSETS REIMBURSEMENTS(A) REIMBURSEMENTS(B) RATE
------------ ----------- ------------- ----------------- ----------------- ---------
<S> <C> <C> <C> <C> <C>
BALANCED FUND
CLASS AAA
2000 $139,350 2.21% 1.19% 1.19% 65%
1999 160,352 2.06 1.20 1.20 86
1998 128,222 2.37 1.20 1.20 77
1997 67,034 2.60 1.28 1.36 110
1996 23,158 2.62 1.32 1.71 111
CLASS A
2000 $7,720 1.96% 1.44% 1.44% 65%
1999 9,374 1.81 1.45 1.45 86
1998 14,585 2.16 1.45 1.45 77
1997 14,444 2.37 1.53 1.61 110
1996 11,216 2.34 1.57 1.96 111
--------------------------
<FN>
+ 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. Performance excludes the effect of any
front-end sales charge.
(a) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian
fee credits, the expense ratios would be 1.17% (Class AAA) and 1.42% (Class
A) for 2000, 1.15% (Class AAA) and 1.40% (Class A) for 1999, 1.17% (Class
AAA) and 1.42% Class A) for 1998, 1.25% (Class AAA) and 1.50% (Class A) for
1997 and 1.24% (Class AAA) and 1.49% (Class A) for 1996.
(b) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(c) Per share amounts have been calculated using the monthly average shares
outstanding method.
</FN>
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
THE GABELLI WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------- -------------------------------------------------------------------
NET
REALIZED IN EXCESS
NET ASSET NET AND UNREALIZED TOTAL IN EXCESS NET NET
VALUE, INVESTMENT GAIN FROM NET OF NET REALIZED REALIZED
YEAR ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT INVESTMENT GAIN ON GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME INVESTMENTS INVESTMENTS DISTRIBUTIONS
------------ --------- ---------- -------------- ---------- ---------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS AAA
2000 $9.99 $0.51 $0.09 $0.60 $(0.51) -- -- -- $(0.51)
1999 10.74 0.50 (0.75) (0.25) (0.50) -- -- -- (0.50)
1998 10.29 0.57 0.45 1.02 (0.57) -- -- -- (0.57)
1997 9.88 0.68 0.41 1.09 (0.68) -- -- -- (0.68)
1996 9.98 0.51 (0.10) 0.41 (0.51) -- -- -- (0.51)
SMALLCAP EQUITY FUND
CLASS AAA
2000 $17.77 $(0.27) $5.39 $5.12 -- -- $(0.79) -- $(0.79)
1999 11.18 (0.12) 6.71 6.59 -- -- -- -- --
1998 14.48 (0.09) (2.39) (2.48) -- (0.08) (0.60) $(0.14) (0.82)
1997 (c) 10.00 0.08 4.40 4.48 -- -- -- -- --
<CAPTION>
DISTRIBUTIONS TO
SHAREHOLDRES RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------- ----------------------------------------------------------------------------
NET
NET NET ASSETS, INVESTMENT EXPENSES EXPENSES
ASSET VALUE, END OF INCOME (LOSS) NET OF BEFORE PORTFOLIO
YEAR ENDED END OF TOTAL PERIOD TO AVERAGE WAIVERS/ WAIVERS/ TURNOVER
SEPTEMBER 30 PERIOD RETURN+ (IN 000'S) NET ASSETS REIMBURSEMENTS(A) REIMBURSEMENTS(B) RATE
------------ ------------ ------- ----------- ------------- ----------------- ----------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INTERMEDIATE BOND FUND
CLASS AAA
2000 $10.08 6.4% $ 6,451 5.16% 1.06% 1.94% 67%
1999 9.99 (2.4) 6,214 4.82 1.05 1.63 108
1998 10.74 10.2 7,618 5.45 1.08 2.08 232
1997 10.29 11.4 5,912 6.71 1.11 1.70 628
1996 9.88 4.5 5,496 5.43 1.09 2.46 309
SMALLCAP EQUITY FUND
CLASS AAA
2000 $22.10 29.4% $34,911 (1.39)% 1.58% 1.63% 218%
1999 17.77 58.9 20,361 (0.88) 1.62 1.72 178
1998 11.18 (17.7) 11,694 (0.74) 1.72 2.11 200
1997 (c) 14.48 44.8 8,546 1.89(d) 1.89(d) 2.45(d) 146
--------------------------
<FN>
+ 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. Performance
excludes the effect of any front-end sales charge.
(a) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits, the expense ratio would be 1.00% (Intermediate
Bond Fund), and 1.50% (SmallCap Equity Fund), respectively, for each
period.
(b) During the period, certain fees were voluntarily reduced and/or
reimbursed. If such fee reductions and/or reimbursements had not
occurred, the ratio would have been as shown.
(c) Period from April 15, 1997 (inception date of Fund) to September 30, 1997.
(d) Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
THE GABELLI WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
<TABLE>
<CAPTION>
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------- -------------------------------------------------------------
NET
REALIZED IN EXCESS
NET ASSET AND UNREALIZED TOTAL NET NET NET
VALUE, NET GAIN FROM NET REALIZED REALIZED ASSET VALUE,
YEAR ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON GAIN ON TOTAL END OF
SEPTEMBER 30 OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS INVESTMENTS DISTRIBUTIONS PERIOD
------------ --------- ---------- -------------- ---------- ---------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REALTY FUND
CLASS AAA
2000 $ 7.61 $0.38 $1.46 $1.84 $(0.35) -- -- $(0.35) $ 9.10
1999 8.43 0.22 (0.81) (0.59) (0.23) -- -- (0.23) 7.61
1998 10.00 0.37 (1.37) (1.00) (0.33) -- $(0.24) (0.57) 8.43
MIGHTY MITES(SERVICE MARK) FUND
CLASS AAA
2000 $12.91 $0.05(g) $2.76(g) $2.81 $(0.10) $(1.62) -- $(1.72) $14.00
1999 9.70 0.10 3.20 3.30 (0.09) -- -- (0.09) 12.91
1998(d) 10.00 0.04 (0.34) (0.30) -- -- -- -- 9.70
CLASS A
2000 (e) $13.48 $0.00(f)(g) $0.52(g) $0.52 -- -- -- -- $14.00
<CAPTION>
DISTRIBUTIONS TO
SHAREHOLDERS RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------- ---------------------------------------------------------------------------
NET
NET ASSETS, INVESTMENT EXPENSES EXPENSES
END OF INCOME (LOSS) NET OF BEFORE PORTFOLIO
YEAR ENDED TOTAL PERIOD TO AVERAGE WAIVERS/ WAIVERS/ TURNOVER
SEPTEMBER 30 RETURN+ (IN 000'S) NET ASSETS REIMBURSEMENTS(A) REIMBURSEMENTS(B) RATE
------------ ------- ----------- -------------- ----------------- ----------------- ---------
<S> <C> <C> <C> <C> <C> <C>
REALTY FUND
CLASS AAA
2000 24.9% $ 2,845 4.52% 1.73% 4.14% 74%
1999 (5.7) 1,784 4.32 1.60 3.68 55
1998 (10.5) 1,815 3.87 1.70 3.95 142
MIGHTY MITES
CLASS AAA
2000 23.0% $15,165 0.38% 1.50% 2.01% 66%
1999 34.2 10,205 0.94 1.01 2.32 88
1998(d) (3.0) 4,838 1.60(c) 2.05(c) 4.50(c) 18
CLASS A
2000 (e) 3.9% $ 49 0.13%(c) 1.75%(c) 2.26%(c) 66%
---------------------------------
<FN>
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized. Performance excludes the effect of any
front-end sales charge.
(a) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian
fee credits, the expense ratios for the Realty Fund, Mighty Mites Fund
Class AAA and Mighty Mites Fund Class A would be 1.50%, 1.50% and 1.75%,
respectively for the period ended September 30, 2000. For the year ended
September 30, 1999, Realty and Mighty Mites Funds would be 1.50% and 1.00%,
respectively, and for the year ended September 30, 1998, for Realty and
Mighty Mites would be 1.50% and 2.00%, respectively.
(b) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(c) Annualized.
(d) Period from May 11, 1998 (inception date of Class AAA) to SeptembeR 30,
1998.
(e) Period from June 15, 2000 (offering date of Class A) to September 30, 2000.
(f) Amount represents less than $0.005 per share.
(g) Per share amounts have been calculated using the monthly average shares
outstanding method.
</FN>
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
The Gabelli Westwood Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Westwood Equity Fund,
The Gabelli Westwood Balanced Fund, The Gabelli Westwood Intermediate Bond Fund,
The Gabelli Westwood SmallCap Equity Fund, The Gabelli Westwood Realty Fund and
The Gabelli Westwood Mighty Mites Fund constituting The Gabelli Westwood Funds,
hereafter referred to as the "Fund") at September 30, 2000, the results of each
of their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods presented, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at September 30, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
November 14, 2000
--------------------------------------------------------------------------------
2000 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Equity Fund,
Balanced Fund, Intermediate Bond Fund, SmallCap Equity Fund, Realty Fund
and Mighty Mites Fund (collectively, the "Funds") during fiscal 2000 which
was derived from U.S. Treasury securities was 0.00%, 19.47%, 51.99%,
0.00%, 0.00% and 1.07%, respectively. Such income is exempt from state and
local tax in all states. However, many states, including New York and
California, allow a tax exemption for a portion of the income earned only
if a mutual fund has invested at least 50% of its assets at the end of
each quarter of the Fund's fiscal year in U.S. Government securities. The
Funds did not meet this strict requirement in 2000. Due to the diversity
in state and local tax law, it is recommended that you consult your
personal tax advisor for the applicability of the information provided as
to your specific situation.
THE GABELLI WESTWOOD EQUITY FUND
33.44% of the ordinary income dividend qualifies for the dividend received
deduction available to corporations. The Fund paid to shareholders, on
December 20, 1999, a long-term capital gain totaling $0.697 per share.
THE GABELLI WESTWOOD BALANCED FUND
20.82% of the ordinary income dividend qualifies for the dividend received
deduction available to corporations. The Fund paid to shareholders, on
December 20, 1999, a long-term capital gain totaling $0.57 per share.
THE GABELLI WESTWOOD INTERMEDIATE BOND FUND; THE GABELLI WESTWOOD REALTY
FUND
None of the ordinary income dividend qualifies for the dividend received
deduction available to corporations.
THE GABELLI MIGHTY MITES FUND
13.26% of the ordinary income dividend qualifies for the dividend received
deduction available to corporations.
THE GABELLI WESTWOOD SMALLCAP EQUITY FUND
7.83% of the ordinary income dividend qualifies for the dividend received
deduction available to corporations. The Fund paid to shareholders, on
December 20, 1999, a long-term capital gain totaling $0.468 per share.
--------------------------------------------------------------------------------
30
<PAGE>
THE GABELLI WESTWOOD FUNDS
==========================
EQUITY FUND
BALANCED FUND
INTERMEDIATE BOND FUND
SMALLCAP EQUITY FUND
REALTY FUND
MIGHTY MITES(SERVICE MARK) FUND
GABELLI WESTWOOD FUNDS -- CLASS AAA SHARES
------------------------------------------------
Average Annual Returns -- September 30, 2000 (a)
<TABLE>
<CAPTION>
Since Inception
1 Year 5 Year 10 Year Inception Date
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity ........................ 19.29% 20.06% 17.76% 15.23% 01/02/87
Balanced ...................... 13.39 14.92 -- 13.98 10/01/91
Intermediate Bond ............. 6.40 5.90 -- 6.24 10/01/91
SmallCap Equity ............... 29.35 -- -- 29.52 04/15/97
Realty ........................ 24.87 -- -- 1.77 09/30/97
Mighty Mites(Service Mark) .... 22.98 -- -- 21.72 05/11/98
<CAPTION>
GABELLI WESTWOOD FUNDS -- CLASS A SHARES
---------------------------------------------------
Average Annual Returns -- September 30, 2000 (a)(b)
Since Inception
1 Year 5 Year Inception Date
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity ........................ 14.16% 18.75% 17.50% 01/28/94
Balanced ...................... 8.51 13.70 13.54 04/06/93
Mighty Mites(Service Mark) .... -- -- 3.86(c) 06/15/00(d)
<FN>
(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) Not annualized.
(d) Offering date.
</FN>
</TABLE>
<PAGE>
THE GABELLI WESTWOOD FUNDS
==========================
One Corporate Center
Rye, New York 10580-1434
GENERAL AND ACCOUNT INFORMATION:
1-800-GABELLI [1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [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
Former President WERNER J. ROEDER, MD
Deutche Bundesbank Medical Director
Lawrence Hospital
ANTHONY J. COLAVITA
Attorney-at-Law
Anthony J. Colavita, P.C.
Officers
SUSAN M. BYRNE BRUCE N. ALPERT
President and Vice President and Treasurer Chief
Investment Officer
PATRICIA R. FRAZE
LYNDA J. CALKIN, CFA 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
-------------
Paul, Hastings, Janofsky & Walker LLP
Independent Accountants
-----------------------
PricewaterhouseCoopers LLP
--------------------------------------------------------------------------------
This report is submitted 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.
--------------------------------------------------------------------------------
GABWWQ300SR
THE
GABELLI
WESTWOOD
FUNDS
EQUITY FUND
BALANCED FUND
INTERMEDIATE BOND FUND
SMALLCAP EQUITY FUND
REALTY FUND
MIGHTY MITES(SERVICE MARK) FUND
ANNUAL REPORT
SEPTEMBER 30, 2000
