<PAGE> 1
THE GABELLI GROWTH FUND
One Corporate Center
Rye, New York 10580-1434
ANNUAL REPORT - 1994
TO OUR SHAREHOLDERS:
In the fourth quarter, The Gabelli Growth Fund's net asset value slipped
0.5% to an adjusted $22.47 per share on December 31, 1994 (adding back the
$2.79 per share distribution paid on December 30, 1994) from $22.58 on
September 30, 1994. This compares to the Standard & Poor's 500 Index, a
widely accepted unmanaged index of stock market performance, which was flat
for the quarter. For the twelve months ended December 31, 1994, the Fund's
total return declined 3.4% versus the 1.3% return in the Standard & Poor's
500 Index over the same period.
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
Quarter
--------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1994: Net Asset Value ...... $21.90 $21.23 $22.58 $19.68 $19.68
Total Return ......... (5.8)% (3.1)% 6.4% (0.5)% ( 3.4)%
- ----------------------------------------------------------------------------------------
1993: Net Asset Value ...... $21.71 $21.84 $23.43 $23.26 $23.26
Total Return ......... 0.6% 0.6% 7.3% 2.5% 11.3%
- ----------------------------------------------------------------------------------------
1992: Net Asset Value ...... $20.27 $19.72 $20.50 $21.59 $21.59
Total Return ......... (4.7)% (2.7)% 4.0% 8.5% 4.5%
- ----------------------------------------------------------------------------------------
1991: Net Asset Value ...... $18.18 $18.02 $19.51 $21.28 $21.28
Total Return ......... 11.7% (0.9)% 8.3% 12.0% 34.3%
- ----------------------------------------------------------------------------------------
1990: Net Asset Value ...... $16.74 $17.80 $15.75 $16.27 $16.27
Total Return ......... (1.9)% 6.3% (11.5)% 6.2% (2.0)%
- ----------------------------------------------------------------------------------------
1989: Net Asset Value ...... $13.99 $15.73 $17.46 $17.07 $17.07
Total Return ......... 10.6% 12.4% 11.0% 1.5% 40.1%
- ----------------------------------------------------------------------------------------
1988: Net Asset Value ...... $10.87 $12.40 $12.71 $12.65 $12.65
Total Return ......... 16.1% 14.1% 2.5% 2.5% 39.2%
- ----------------------------------------------------------------------------------------
1987: Net Asset Value ...... $10.00 $10.84 $11.28 $9.51 $9.51
Total Return ......... -- 8.4%(b) 4.1% (15.7)% (4.9)%(b)
- ----------------------------------------------------------------------------------------
</TABLE>
Average Annual Returns - December 31, 1994 (a)
- ----------------------------------------------
1 Year ............................... (3.4)%
5 Year ............................... 8.1%
Life of Fund (b) ..................... 13.9%
<TABLE>
<CAPTION>
Dividend History
- ------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
<S> <C> <C>
December 30, 1994 $2.790 $19.68
December 31, 1993 $0.760 $23.26
December 31, 1992 $0.646 $21.59
December 31, 1991 $0.573 $21.28
December 31, 1990 $0.460 $16.27
December 29, 1989 $0.654 $17.07
December 30, 1988 $0.377 $12.65
January 4, 1988 $0.152 $9.58
</TABLE>
(a) Average annual and total returns reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. Of course, returns represent past performance and do not guarantee future
results. Investment returns and the principal value of an investment will
fluctuate. When shares are redeemed they may be worth more or less than their
original cost. (b) From commencement of operations on April 10, 1987.
<PAGE> 2
From inception on April 10, 1987 through December 31, 1994, the Fund
achieved a 174.1% total return, which reflects an average annual total return
of 13.9% assuming reinvestment of all dividends and distributions. The five
year total return of the Fund through December 31, 1994 was 47.8%, which
equates to an 8.1% average annual rate of return. Our shareholder base is at
47,939 shareholders and total net assets of the Fund are at $482.5 million on
December 31, 1994.
Comparison of Change in Value of
$10,000 Investment in the Gabelli Growth
Fund and the S&P 500 Index
<TABLE>
<CAPTION>
Measurement Gabelli
Period Growth Fund S&P 500 Index
<S> <C> <C>
4/10/87 $10,000 $10,000
12/31/87 $ 9,510 $ 8,490
12/31/88 $13,238 $ 9,891
12/31/89 $18,546 $13,016
12/31/90 $18,175 $12,612
12/31/91 $24,409 $16,459
12/31/92 $25,507 $17,282
12/31/93 $28,389 $19,027
12/31/94 $27,424* $19,274
</TABLE>
* Past perfomance is not predictive of future performance
NEW PORTFOLIO MANAGER
We are privileged to announce that Howard Frank Ward has joined our firm as
Portfolio Manager of The Gabelli Growth Fund.
Howard joins us from Scudder, Stevens and Clark, where he served as
Managing Director and lead Portfolio Manager for several Scudder mutual funds
including Scudder Quality Growth and Balanced Funds. As Director of the Quality
Growth Equity Management Group, Howard supervised the management of
approximately $3 billion in client assets. Howard is a Chartered Financial
Analyst and member of the New York Society of Security Analysts. He is a 1978
graduate of Northwestern University, where he earned a Bachelor of Arts degree
in Economics.
COMMENTARY
1994 closed the year with little net change as the leading industrial
averages showed advances of about 2%. Moreover, these averages suggested a
third consecutive year of modest interim swings and low volatility. The Dow
Jones Industrial Average's high was 10.7% above its April low. This follows a
1992 high-to-low swing of 11.8% and 1993's 9.8%. Such moderate fluctuations
are roughly half the levels seen in most years and indicate a calmer market
environment than has been experienced by most investors. Annual ranges
typically exceed 20%. 1995 can be anticipated to show "normal" swings
reflecting greater volatility.
The placid, calm waters reflected by the averages masked substantially
greater turbulence, eddies, undertows and tidal shifts which swirled beneath the
surface. The Dow Utilities and Transports were down 17% and 21%, respectively.
By late October and early November, more than 4 out of every 10 NYSE traded
stocks were selling 30% below their 1993 - early 1994 highs. For NASDAQ stocks,
more than 50% were off 40%. Then, by mid-December, almost 550 NYSE stocks
recorded 52 week lows. In the same week, 730 NASDAQ stocks also hit lows.
1994 was a tough year for investment performance, much more so than the
unmanaged averages would suggest. Bonds were not spared. 5-year Treasury
Notes, for example, probably had their worst year ever. 20-year Treasuries had
their second worst year. Purchase of 30-year Treasury Bonds at October 1993's
high price would have shown a 16% loss, even including interest income, if the
bonds had been sold at the end of 1994. Investing last year was like trudging
through knee-deep mud; hard work, with not much progress.
<PAGE> 3
1994 was characterized by a tug-of-war, a wrestling match between the
classic oppositional forces of rising cash flow and improving earnings pitted
against the Federal Reserve Board's strategic moves to establish a significantly
higher level for interest rates. Six bumps - 25 basis points in February, March
and April, then 50 basis points in May and August and finally a larger 75 basis
points in mid-November - forced short-term and long-term interest rates 250
basis points higher. With fourth quarter Gross Domestic Product (GDP) likely to
register a 4% gain, these higher interest rates have yet to "bite." Additional
rate hikes may be coming early in 1995. Eventually, the expansion in domestic
business activity will be slowed and, as 1995 progresses, more will be heard
about the prospect for recessionary forces coming into play, if not becoming
dominant.
For the present, there is no compelling reason to think the Federal Reserve
Board, having decided not to spike the punch, will now proceed to remove the
punch bowl, turn out the lights and lock the door. Corporate cash flow and
earnings gains in 1995 may be less than earlier expectations. But there should
be opportunities for better situated and better managed companies to advance
their shareholders' economic value. If the Federal Reserve Board is successful,
as we anticipate, a low inflation and sustainable, more modest economic advance
will position U.S. industrial companies to show gains in 1996 and perhaps 1997.
Early in 1994 we alerted investors to anticipate a "third - wave" of merger
activity. This activity was initiated convincingly by General Electric's (GE -
$51.00 - NYSE) bid for Kemper Corp. in March. (GE was not successful as its bid
was topped by Conseco). Such strategic moves are likely to continue into 1995
as companies find it more advantageous "to buy" rather than "to build."
Fittingly, GE ended 1994 by raising its dividend in mid-December by 14%. This
increase upped its market yield from 2.8% to over 3.2%. We look for other
industrial companies to follow GE's lead and hike their dividends in 1995 in
reflection of improved 1994 earnings results and a favorable outlook. Such
moves will strengthen the market's under-pinning. GE at the same time also
authorized the repurchase of as much as $5 billion of its stock during the next
two years. This represents another positive trend we anticipate for 1995.
As the markets turned into the new year, adjustments were being made in
response to Mexico's decision to allow its peso "to float," precipitating a
harsh devaluation which initially approached 40%. Global economic activity is a
trend and a market force we expect to add value to the Fund's holdings.
Periodic devaluations are a recurring risk, always occurring at inopportune
times. To capitalize on the move to higher standards of living world-wide we
have elected to place most of our bets with larger U.S. companies with
significant multinational earnings exposure - companies like GE, Coca Cola (KO -
$51.50 - NYSE), Proctor & Gamble (PG - $62.00 - NYSE), Colgate Palmolive (CL -
$63.375 - NYSE) and Gillette (G - $74.75 - NYSE) - which have demonstrated an
ability to prosper in volatile international market places, and to keep our
direct foreign exposure limited to special situations.
1995 may reflect an investment year of many cross currents. Nonetheless,
there are positive forces at work in the marketplace and your portfolio is
positioned to capitalize on them.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund's
investments. Favorable EBITDA prospects do not necessarily translate into
higher stock prices, but they do express a positive trend which we believe
will develop over time.
American International Group (AIG - $98.00 - NYSE), headquartered in New York
City, is one of the world's leading insurance organizations, providing property,
casualty, marine, life and financial guarantee
<PAGE> 4
insurance. American International Group has global exposure with operations in
over 125 countries. International operations accounted for over 50% of sales.
AIG will achieve over $20 billion in revenue in 1994 spurred by increased
premium rates and new written business. Earnings should be greater than $6.50
for 1994 and will grow by 15% this year. We are currently building a position
in AIG.
First Data Corporation (FDC - $47.375 - NYSE) is the primary provider of
information processing and related services. Prior to its initial public
offering in April of 1992, FDC was wholly owned by American Express. First Data
has five divisions with First Data Resources accounting for 40% of revenues.
First Data Resources is a third party processor of Master Card and Visa card
transactions in the U.S. and U.K. After an unsuccessful bid for Western Union
back in September, FDC continues to aggressively p ursue the money transfer
markets leveraging its much larger money order infrastructure. We look for
strong global demand for electronic information processing and expect FDC to
be the leader.
Fluor Corporation (FLR - $43.125 - NYSE) is one of the world's largest
international engineering and full service construction companies. We continue
to anticipate increased revenues and earnings growth due to the robust recovery
in economies overseas. Fluor's CEO, Les McCraw, expects the company's earnings
to grow at a 15-20% rate per year. The company currently has a $14.5 billion
backlog and expects 60% to be international by year end. Fluor also mines coal,
which contributed 9% to earnings and 24% to profits in 1993. Fluor is well
positioned and is an exceptional company.
American Brands, Inc. (AMB - $37.50 - NYSE) is an asset rich company with many
different lines of businesses including Titleist and Pinnacle golf balls, Moen
faucets, Jim Beam bourbon and Acco office products. American Brands also owns
Gallaher, the largest tobacco company in the United Kingdom. American Brands
completed the sale of The Franklin Life Insurance company for $1.17 billion in
January 1995 and sold its domestic tobacco business, American Tobacco, to B.A.T.
for $1 billion in December 1994. We believe these sales are symbolic of
management's commitment to surface shareholder value. American Brands is a
strong cash flow generator and currently pays a healthy $2.00 dividend.
Time Warner Inc. (TWX - $35.125 - NYSE) is one of the largest diversified media
and publishing companies in the world with a market capitalization of over $15
billion. Warner Brothers Studios, the company's filmed entertainment
subsidiary, was ranked number one at the box office for the third consecutive
year. Time Warner is restructuring its business into copyright and creativity
(notably publishing, music and filmed entertainment) on one side and
distribution (mostly cable) on the other.
AT&T Corporation (T - $50.25 - NYSE ) is the second largest telephone company
in the world. AT&T is attractively valued at 7.5 times EBITDA relative to its
growth potential. It is well positioned to benefit from the above average
long-term growth of the global telecommunications industry. Its strategy
includes taking advantage of its strong global franchise, including brand name,
broad product offering and an international customer base. The company expects
to take advantage of the growing demand for a tailored approach to
telecommunications services. AT&T will satisfy communication needs by packaging
its broad array of products including its global wired and wireless
telecommunications services, telecommunications equipment and financial
services. We expect earnings growth in 1995 to be above 15%, with an EPS
estimate of $3.55.
General Electric Company (GE - $51.00 - NYSE), with sales expected to top $40
billion in 1995, stands among the world's largest industrial concerns. As a
company with a global footprint, GE is a primary beneficiary of a developing
European recovery and continued strength in the developing markets of Asia and
Latin America. GE's varied businesses include financial services (through
General Electric Capital Corporation), broadcasting (through the NBC Television
Network) and jet engines. The company is also
<PAGE> 5
a leader in home appliances and industrial power systems. GE's controversial
unit, Kidder Peabody, has been sold to PaineWebber. GE declared a 2-for-1 stock
split in mid-1994 and the dividend was increased by 13.7%. Earnings should hit
a record level in 1995 and the stock should benefit from a recently announced $5
billion share repurchase plan.
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent minimums. No initial minimum is
required for those establishing an Automatic Investment Plan.
GABELLI U.S. TREASURY MONEY MARKET FUND
Shareholders of any of the Gabelli Funds may invest in The Gabelli U.S.
Treasury Money Market Fund with an initial investment of $3,000 or more. The
Fund provides checkwriting and exchange privileges. The Fund's expenses are
capped at .30% of average net assets, making it one of the most attractive U.S.
Treasury-only money market funds. With dividends that are exempt from state and
local income taxes in all states, the Fund is an excellent vehicle in which to
store idle cash. Call us at 1-800-GABELLI (1-800-422-3554) for a prospectus
which gives a more complete description of the Fund, including management fees
and expenses. Read it carefully before you invest or send money.
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). The Fund's NASDAQ symbol is GABGX. Please call us during the
day for further information.
In closing, we thank you for the trust you have shown in our investment
capabilities and express our dedication to achieving our shared financial
goal: to increase the value of the assets you have entrusted to us.
Sincerely,
/s/ HOWARD F. WARD /s/ MARIO J. GABELLI
- ------------------- ---------------------
HOWARD F. WARD, CFA MARIO J. GABELLI, CFA
Portfolio Manager Chief Investment Officer
/s/ KEVIN CORY /s/ DONALD C. JENKINS
- ------------------- ---------------------
KEVIN CORY DONALD C. JENKINS, CFA
Associate Portfolio Manager Associate Portfolio Manager
February 1, 1994
TOP TEN HOLDINGS
DECEMBER 31, 1994
------------------
Genentech, Inc. AT&T Corporation
General Electric Company J.P. Morgan & Company Inc.
Gillette Company Emerson Electric Company
Tele-Communications, Inc. Lubrizol Corporation (The)
CPC International Inc. Illinois Tool Works Inc.
<PAGE> 6
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 97.63%
AUTOMOTIVE -- 0.49%
56,000 General Motors
Corporation........... $ 2,674,005 $ 2,366,000
------------- -------------
AUTOMOTIVE: PARTS AND
ACCESSORIES -- 0.90%
5,000 China Tire Holdings
Limited............... 74,000 62,500
80,000 Cooper Tire & Rubber
Company............... 1,203,150 1,890,000
60,000 OEA, Inc. .............. 1,014,751 1,470,000
100,000 TBC Corporation*........ 745,750 925,000
------------- -------------
3,037,651 4,347,500
------------- -------------
BROADCASTING -- 0.35%
10,000 Capital Cities/ABC,
Inc. ................. 818,000 852,500
15,000 CBS Inc. ............... 860,125 830,625
------------- -------------
1,678,125 1,683,125
------------- -------------
BUILDING AND
CONSTRUCTION -- 0.34%
38,000 Fluor Corporation....... 1,473,415 1,638,750
------------- -------------
CABLE -- 6.24%
20,000 Century Communications
Corporation Class A... 225,275 150,000
130,000 Comcast Corporation
Special Class A....... 2,701,711 2,039,375
360,000 Home Shopping
Network, Inc.*........ 4,524,283 3,600,000
50,500 International Family
Entertainment*........ 713,214 637,562
140,000 Multimedia, Inc.*....... 4,252,633 3,990,000
111,800 QVC, Inc.*.............. 4,766,292 4,709,575
600,000 Tele-Communications,
Inc. Class A*......... 6,176,943 13,050,000
111,000 United International
Holdings Inc. Class
A*.................... 1,259,940 1,942,500
------------- -------------
24,620,291 30,119,012
------------- -------------
CONSUMER PRODUCTS &
SERVICES -- 12.87%
150,000 American Brands,
Inc. ................. 4,949,725 5,625,000
145,000 American Safety Razor
Company*.............. 1,740,000 1,993,750
50,000 Amway Asia Pacific
Ltd. ................. 1,611,075 1,625,000
15,000 Amway Japan Ltd.,
Spons. ADR............ 270,125 243,750
35,000 Church & Dwight Co.,
Inc. ................. 699,175 630,000
150,000 Colgate-Palmolive
Company............... 6,456,640 9,506,250
80,000 DSG International
Ltd. ................. 1,816,125 1,420,000
280,000 General Electric
Company............... 13,917,562 14,280,000
175,000 Gillette Company........ 7,539,769 13,081,250
90,000 Libbey Inc. ............ 1,170,000 1,575,000
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
67,000 Procter & Gamble
Company............... $ 3,806,675 $ 4,154,000
100,000 Ralston Purina Group.... 4,090,863 4,462,500
90,000 Tambrands Inc. ......... 3,428,988 3,476,250
------------- -------------
51,496,722 62,072,750
------------- -------------
COUNTRY/CLOSED-END
FUNDS -- 1.66%
40,000 Asia Pacific Fund,
Inc................... 508,442 550,000
68,000 Emerging Markets
Infrastructure
Fund*................. 993,480 697,000
46,000 Emerging Markets
Telecommunications
Fund, Inc.*........... 657,535 810,750
100,000 France Growth Fund,
Inc.*................. 962,506 912,500
100,000 Irish Investment Fund,
Inc................... 886,594 862,500
30,000 Malaysia Fund, Inc...... 404,525 517,500
29,809 Singapore Fund, Inc..... 248,065 443,409
100,000 Swiss Helvetia Fund
Inc................... 1,296,034 1,887,500
60,000 Thai Fund, Inc.......... 1,651,003 1,342,500
------------- -------------
7,608,184 8,023,659
------------- -------------
DIVERSIFIED
INDUSTRIAL -- 1.88%
170,000 Minnesota Mining and
Manufacturing
Company............... 9,146,303 9,073,750
------------- -------------
ENERGY -- 0.51%
32,500 Mitchell Energy &
Development Class A... 713,363 528,125
120,000 Sithe Energies, Inc.*... 1,537,175 1,260,000
35,000 Stone Energy
Corporation*.......... 420,000 673,750
------------- -------------
2,670,538 2,461,875
------------- -------------
ENTERTAINMENT -- 2.46%
20,000 Autotote Corporation --
Class A*.............. 389,144 227,500
140,000 Gaylord Entertainment
Company............... 3,264,795 3,185,000
21,500 National Gaming
Corp. ................ 381,634 258,000
40,000 PolyGram N.V. .......... 1,675,526 1,845,000
160,000 Time Warner Inc. ....... 6,249,650 5,620,000
18,000 Viacom Inc. -- Class
A*.................... 607,725 749,250
------------- -------------
12,568,474 11,884,750
------------- -------------
FINANCIAL
SERVICES -- 6.47%
190,000 American Express
Company............... 5,529,690 5,605,000
48,000 First Data
Corporation........... 1,514,350 2,274,000
100,000 MBIA Inc. .............. 5,068,569 5,612,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 7
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
225,000 Morgan (J.P.) & Co.
Incorporated.......... $ 14,164,100 $ 12,600,000
80,000 Northern Trust
Company............... 2,369,646 2,800,000
100,000 Norwest Corporation..... 1,993,988 2,337,500
------------- -------------
30,640,343 31,229,000
------------- -------------
FOOD AND
BEVERAGE -- 12.52%
50,000 Back Bay Restaurant
Group, Inc.*.......... 571,359 375,000
32,000 Boston Chicken, Inc.*... 608,175 556,000
70,000 Campbell Soup Company... 2,519,750 3,088,750
78,500 Celestial Seasonings*... 1,458,737 1,148,062
125,000 Coca-Cola Company....... 4,842,677 6,437,500
245,000 CPC International
Inc. ................. 9,928,471 13,046,250
175,000 Hershey Foods
Corporation........... 7,243,287 8,465,625
28,000 Midwest Grain Products,
Inc. ................. 714,533 672,000
158,000 Nestle S.A. ADR*........ 4,765,500 7,505,000
12,000 Nestle S.A. ADR
144A(c)*.............. 318,000 570,000
67,500 Panamerican Beverages... 1,797,272 2,134,687
114,000 Pioneer Hi-Bred
International,
Inc. ................. 4,013,858 3,933,000
36,000 Quaker Oats Company..... 1,259,748 1,107,000
60,000 Seagram Company Ltd..... 1,771,750 1,770,000
40,000 Tootsie Roll Industries,
Inc. ................. 2,531,781 2,460,000
160,000 Tyson Foods, Inc.
Class A............... 3,529,361 3,400,000
76,000 Wrigley (Wm.) Jr.
Company............... 2,250,923 3,752,500
------------- -------------
50,125,182 60,421,374
------------- -------------
HEALTH CARE:
BIOTECHNOLOGY -- 4.44%
95,000 Amgen Inc.*............. 3,627,231 5,605,000
337,500 Genentech, Inc.*........ 12,285,598 15,314,063
35,000 Matrix Pharmaceutical,
Inc.*................. 343,125 481,250
------------- -------------
16,255,954 21,400,313
------------- -------------
HEALTH CARE: DRUGS AND
MEDICAL
PRODUCTS -- 3.22%
140,000 Johnson & Johnson....... 5,595,470 7,665,000
125,000 Roche Holding Ltd.
ADR*.................. 3,711,875 5,992,188
42,000 Scherer (R.P.)
Corporation*.......... 1,195,958 1,905,750
------------- -------------
10,503,303 15,562,938
------------- -------------
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
HEALTH CARE:
SERVICES -- 0.41%
15,000 On Assignment, Inc.*.... $ 166,250 $ 240,000
60,000 WellPoint Health Networks
Inc. Class A *........ 1,692,919 1,747,500
------------- -------------
1,859,169 1,987,500
------------- -------------
HOME/OFFICE
FURNISHINGS -- 0.72%
235,000 Shaw Industries,
Inc. ................. 2,779,380 3,495,625
------------- -------------
HOTELS/CASINOS -- 4.20%
170,000 Circus Circus
Enterprises, Inc.*.... 4,272,519 3,952,500
115,000 Hilton Hotels
Corporation........... 6,594,507 7,748,125
215,000 Hospitality Franchise
Systems, Inc.*........ 4,240,866 5,697,500
140,000 Mirage Resorts,
Incorporated*......... 2,823,475 2,870,000
------------- -------------
17,931,367 20,268,125
------------- -------------
INDUSTRIAL EQUIPMENT AND
SUPPLIES -- 10.75%
105,000 AMP Incorporated........ 6,117,480 7,638,750
135,000 Crane Co. .............. 3,632,083 3,628,125
157,000 Emerson Electric Co. ... 7,489,955 9,812,500
60,000 Hubbell Incorporated
Class B............... 3,145,469 3,195,000
220,000 Illinois Tool Works,
Inc. ................. 6,186,456 9,625,000
260,000 Minerals Technologies
Inc. ................. 4,871,530 7,605,000
50,000 Molex Incorporated...... 1,265,973 1,725,000
51,250 Molex Incorporated Class
A..................... 1,299,250 1,588,750
98,000 Pall Corporation,
Inc. ................. 1,908,596 1,837,500
30,000 Plantronics, Inc.*...... 493,025 900,000
170,000 Roper Industries,
Inc. ................. 2,881,048 4,292,500
------------- -------------
39,290,865 51,848,125
------------- -------------
MERCHANDISING:
DEPARTMENT -- 0.37%
40,000 Penney (J.C.) Company... 1,867,275 1,785,000
------------- -------------
MERCHANDISING:
DRUG STORES -- 1.50%
165,000 Walgreen Co. ........... 5,998,904 7,218,750
------------- -------------
MERCHANDISING:
FOOD -- 2.49%
150,000 Albertson's, Inc. ...... 3,250,450 4,350,000
150,000 American Stores
Company............... 3,810,442 4,031,250
150,000 Kroger Co.*............. 3,110,006 3,618,750
------------- -------------
10,170,898 12,000,000
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 8
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
MERCHANDISING:
SPECIALTY -- 0.96%
130,000 Burlington Coat Factory
Warehouse
Corporation*.......... $ 1,374,037 $ 1,527,500
90,000 Fingerhut Companies,
Inc. ................. 1,617,667 1,395,000
40,000 InaCom Corp. ........... 668,310 280,000
25,000 Talbots, Inc. .......... 626,500 781,250
22,000 Viking Office Products,
Inc.*................. 176,387 673,750
------------- -------------
4,462,901 4,657,500
------------- -------------
METALS & MINING -- 0.63%
55,000 Nucor Corporation....... 2,425,150 3,052,500
------------- -------------
PACKAGING -- 1.05%
90,000 Sealed Air
Corporation*.......... 2,150,586 3,262,500
95,000 U.S. Can Corporation*... 1,130,775 1,805,000
------------- -------------
3,281,361 5,067,500
------------- -------------
PAPER AND FOREST
PRODUCTS -- 0.62%
132,000 Wausau Paper Mills
Company............... 2,416,631 3,003,000
------------- -------------
PUBLISHING -- 1.97%
110,000 Dow Jones & Company
Inc. ................. 3,946,787 3,410,000
35,000 Gannett Co., Inc. ...... 1,860,225 1,863,750
30,000 McGraw-Hill, Inc. ...... 2,180,313 2,006,250
100,000 New York Times Company
(The) Class A......... 2,735,325 2,212,500
------------- -------------
10,722,650 9,492,500
------------- -------------
SPECIALTY
CHEMICALS -- 3.69%
50,000 Ferro Corporation....... 1,233,750 1,193,750
290,000 Lubrizol Corporation.... 8,911,315 9,823,750
30,000 Morton International,
Inc. ................. 728,725 855,000
100,000 Nalco Chemical
Company............... 2,853,520 3,350,000
107,000 OM Group, Inc.*......... 1,507,500 2,568,000
------------- -------------
15,234,810 17,790,500
------------- -------------
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
TECHNOLOGY -- 1.67%
37,000 Intel Corporation*...... $ 2,060,059 $ 2,363,375
105,000 Loral Corporation....... 3,008,964 3,976,875
38,000 Thermo Electron
Corporation*.......... 1,462,780 1,705,250
------------- -------------
6,531,803 8,045,500
------------- -------------
TELECOMMUNICATIONS
-- 9.18%
56,000 ALC Communications
Corporation*.......... 1,467,360 1,743,000
90,000 ALLTEL Corporation...... 2,052,556 2,711,250
230,000 AT&T Corporation........ 9,401,750 11,557,500
20,000 BCE Inc. ............... 681,000 642,500
23,400 C-TEC Corporation
-- Class A*........... 578,436 465,075
26,000 C-TEC Corporation
-- Class B
Convertible*(b)....... 736,207 511,875
42,000 Cable & Wireless
plc ADR............... 863,503 735,000
445,752 LDDS Communications,
Inc.*................. 7,008,848 8,664,304
150,000 MCI Communications
Corporation........... 4,224,431 2,756,250
100,000 MFS Communications
Company, Inc.*........ 4,221,289 3,275,000
145,000 Northern Telecom
Limited............... 4,542,446 4,839,375
50,000 Sprint Corporation...... 1,373,125 1,381,250
53,242 Telecomunicacoes
Brasileiras S.A.
(Telebras) ADR*....... 1,851,511 2,389,235
1,000,000 Telecom Italia*......... 2,501,390 2,601,847
------------- -------------
41,503,852 44,273,461
------------- -------------
TEXTILE/APPAREL -- 0.76%
115,000 Authentic Fitness
Corporation*.......... 1,780,118 1,595,625
80,000 Jones Apparel Group,
Inc.*................. 2,429,854 2,060,000
------------- -------------
4,209,972 3,655,625
------------- -------------
TRANSPORTION -- 0.36%
75,000 Overseas Shipholding
Group, Inc. .......... 1,454,362 1,725,000
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 9
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
WIRELESS
COMMUNICATIONS
-- 1.95%
150,000 AirTouch
Communications..... $ 3,370,531 $ 4,368,750
112,000 Century Telephone
Enterprises,
Inc. .............. 3,224,945 3,304,000
45,000 Comnet Cellular
Inc.*.............. 587,750 1,305,000
25,000 Metrocall, Inc.*..... 436,265 425,000
------------- -------------
7,619,491 9,402,750
------------- -------------
TOTAL COMMON
STOCKS............. 404,259,331 471,053,757
------------- -------------
PREFERRED
STOCKS -- 0.56%
METALS AND
MINING -- 0.56%
130,000 Freeport-McMoRan Inc.
7% Cumulative Conv.
Depositary......... 3,250,000 2,697,500
------------- -------------
TOTAL PREFERRED
STOCKS............. 3,250,000 2,697,500
------------- -------------
PRINCIPAL
AMOUNT
- ----------
CONVERTIBLE
BONDS -- 1.04%
CABLE -- 0.59%
$7,000,000 Comcast Corporation
Step-Up Debentures,
1.125%, due
04/15/2007......... 3,855,337 2,826,250
------------- -------------
RETAIL -- 0.25%
1,000,000 Home Depot, Inc.
Notes 4.500%, due
02/15/1997......... 1,000,000 1,205,000
------------- -------------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ---------- ------------- -------------
TELECOMMUNICATIONS
-- 0.20%
$986,000 IntelCom Group Inc.
Sub. Notes 8.000%,
due 09/17/1998..... $ 985,599 $ 962,940
------------- -------------
TOTAL CONVERTIBLE
BONDS.............. 5,840,936 4,994,190
------------- -------------
U.S. GOVERNMENT
OBLIGATIONS
-- 0.45%
2,200,000 U.S. Treasury Bills,
4.550% to 5.12%,
due 01/12/95 to
02/09/95........... 2,190,847 2,190,847
------------- -------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS........ 2,190,847 2,190,847
------------- -------------
TOTAL INVESTMENTS --
99.68%(A).......... $ 415,541,114 480,936,294
=============
CASH AND OTHER ASSETS
IN EXCESS OF
LIABILITIES -- 0.32%.. 1,534,259
-------------
NET ASSETS--100.00%
(24,514,208 SHARES
OUTSTANDING)....... $ 482,470,553
=============
NET ASSET VALUE,
OFFERING AND
REDEMPTION PRICE
PER SHARE.......... $ 19.68
=============
</TABLE>
* Non-income producing.
(a) For Federal income tax purposes aggregate cost is $416,378,347. Gross
unrealized appreciation and depreciation are $80,134,228 and $15,576,281,
respectively, resulting in net unrealized appreciation of $64,557,947.
(b) Security fair valued under procedures established by the Board of Trustee.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1994, Rule 144A securities amounted to $570,000 or 0.12% of net assets.
The accompanying notes are an integral part of the financial statements.
<PAGE> 10
THE GABELLI GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
- ----------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(Cost $415,541,114)................. $480,936,294
Receivable for investments sold....... 6,020,576
Receivable for fund shares sold....... 552,660
Accrued interest receivable........... 58,784
Dividends receivable.................. 1,476,130
Other receivables..................... 1,514
------------
Total assets........................ 489,045,958
------------
LIABILITIES:
Payable for investments purchased..... 507,500
Payable for fund shares redeemed...... 16,709
Payable for investment advisory
fees................................ 412,036
Payable for distribution fees......... 181,213
Payable to bank....................... 2,382,904
Dividends and distributions payable... 2,823,533
Other payables and accrued expenses... 251,510
------------
Total liabilities................... 6,575,405
------------
Net assets applicable to 24,514,208
shares of beneficial interest
outstanding....................... $482,470,553
=============
Net asset value, offering and
redemption price per share........ $ 19.68
=============
NET ASSETS CONSIST OF:
Shares of beneficial interest at par
value............................... $ 245,142
Additional paid in capital............ 417,888,445
Distributions in excess of net
investment income................... (115,383)
Distributions in excess of net
realized gains...................... (942,831)
Unrealized net appreciation on
investments......................... 65,395,180
------------
Net assets.......................... $482,470,553
=============
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
- ----------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.............................. $ 840,139
Dividends............................. 8,613,831
------------
Total income........................ 9,453,970
------------
EXPENSES:
Investment advisory fee............... 5,651,929
Distribution costs.................... 778,876
Transfer and shareholder servicing
agent............................... 505,711
Printing and mailing.................. 468,120
Custodian fees and expenses........... 115,746
Registration fees..................... 36,674
Legal and auditing.................... 52,067
Trustees' fees........................ 73,500
------------
Total expenses...................... 7,682,623
------------
Investment income -- net............ 1,771,347
------------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on
investments......................... 59,552,832
Net change in unrealized
appreciation........................ (84,422,105)
------------
Net loss on investments............. (24,869,273)
------------
Net decrease in net assets resulting
from operations................... $(23,097,926)
=============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- -----------------
<S> <C> <C>
CHANGE IN NET ASSETS:
Investment income -- net.............................................. $ 1,771,347 $ 1,519,349
Realized gain on investments -- net................................... 59,552,832 18,863,638
Change in unrealized appreciation -- net.............................. (84,422,105) 53,608,385
----------------- -----------------
Net decrease in net assets resulting from operations................ (23,097,926) 73,991,372
Dividends to shareholders from net investment income.................. (1,697,277) (1,519,349)
Dividends in excess of net investment income.......................... (167,272)
Distributions to shareholders from net realized gains................. (58,588,684) (19,428,195)
Distributions in excess of net realized gains......................... (27,643) (1,093,830)
Share transactions -- net............................................. (128,963,907) 18,013,247
----------------- -----------------
Net increase in net assets.......................................... (212,542,709) 69,963,245
NET ASSETS:
Beginning of year..................................................... 695,013,262 625,050,017
----------------- -----------------
End of year (including distributions in excess of net investment
income of
$115,383 and $0, respectively)...................................... $ 482,470,553 $ 695,013,262
================= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 11
THE GABELLI GROWTH FUND -- NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. The Gabelli Growth Fund (the "Fund") is an
open-end, diversified management investment company organized as a Massachusetts
business trust and registered under the Investment Company Act of 1940, as
amended. The Fund commenced operations on April 10, 1987. The following is a
summary of significant accounting policies followed by the Fund.
SECURITY VALUATION. Readily marketable securities traded on a national
securities exchange or admitted to trading on the NASDAQ National Market List
are valued at the last reported sales price on the business day as of which such
value is determined. Securities for which no sale was reported on that date and
over-the-counter securities not included in the NASDAQ National Market List are
valued at the mean between the last reported bid and asked prices. United States
Government obligations and other debt instruments having 60 days or less
remaining until maturity are stated at amortized cost (which approximates
value). Debt instruments having a remaining maturity of more than 60 days will
be valued at the highest bid price obtained from a dealer maintaining an active
market in that security or on the basis of prices obtained from a pricing
service approved as reliable by the Board of Trustees. All other investment
assets, including restricted and not readily marketable securities, are valued
under procedures established by and under the general supervision and
responsibility of the Fund's Board of Trustees, designed to reflect in good
faith the fair value of such securities.
SECURITY TRANSACTIONS AND INVESTMENT INCOME. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates) with
realized gain or loss on investments determined by using specific identification
as the cost method. Interest income (including amortization of premium and
discount) is recorded as earned. Dividend income and dividends and distributions
to shareholders are recorded on the ex-dividend date.
Income distributions and capital gain distributions on a Fund level are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund and temporary differences and differing characterization of
distributions made by the Fund as a whole. To reflect reclassifications arising
from permanent book/tax differences for the year ended December 31, 1994,
distributions in excess of net investment income were credited and distributions
in excess of net realized gains were charged for $915,189.
FEDERAL INCOME TAXES. The Fund qualifies and intends to continue to qualify as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986 and intends to distribute all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
2. SHARES OF BENEFICIAL INTEREST. The Declaration of Trust, dated October 24,
1986, permits the Fund to issue an unlimited number of shares (par value $0.01).
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold.................................... 8,826,361 197,041,813 10,855,380 237,315,027
Shares issued on reinvestment of dividends
and distributions............................ 2,929,789 57,657,339 903,408 21,013,281
Shares redeemed................................ (17,122,413) (383,663,059) (10,822,587) (240,315,061)
------------ ------------- ------------ -------------
Net increase................................. (5,366,263) (128,963,907) 936,201 18,013,247
========== =========== ========== ===========
</TABLE>
3. PURCHASES AND SALES OF SECURITIES. Purchases and sales of securities, other
than U.S. Government obligations and short-term securities, aggregated
$222,708,013 and $388,930,198, respectively.
<PAGE> 12
THE GABELLI GROWTH FUND -- NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
4. INVESTMENT ADVISORY CONTRACT. The Fund employs Gabelli Funds, Inc. (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management and pay the compensation of all officers and Trustees
of the Fund who are its affiliates. As compensation for the services rendered
and related expenses borne by the Advisor, the Fund pays the Advisor a fee,
computed and accrued daily and payable monthly, equal to 1.00% per annum of the
Fund's average daily net assets. The Advisor is obligated to reimburse the Fund
in the event the Fund's expenses exceed the most restrictive expense ratio
limitation imposed by any state. No such reimbursement was required during 1993
or 1994.
5. DISTRIBUTION PLAN. The Fund's Board of Trustees has adopted a distribution
plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and
Rule 12b-1 thereunder. Pursuant to this Plan, the Distributor is authorized to
purchase advertising, sales literature and other promotional material and to pay
its own salespeople. The Fund will reimburse the Distributor (Gabelli &
Company), an affiliate of the Advisor, for these expenditures up to a limit of
0.25% on an annual basis of the Fund's average daily net assets. In addition, if
and to the extent that the fee that the Fund pays to the Advisor as well as
other payments it makes, are considered as indirectly financing any activity
which is primarily intended to result in the sale of the Fund's shares, such
payments are authorized under the Plan. For the year ended December 31, 1994,
the Fund has incurred distribution costs of $778,876 or 0.14% of average net
assets under the Plan.
6. TRANSACTIONS WITH AFFILIATES. For the year ended December 31, 1994, the Fund
paid brokerage commissions of $52,519 to Gabelli & Company, Inc. and its
affiliates.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
(for a share of beneficial interest outstanding throughout
each year)
Net asset value, beginning of year............................... $ 23.26 $ 21.59 $ 21.28 $ 16.27 $ 17.07
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income.......................................... $ 0.07 $ 0.06 $ 0.08 $ 0.16 $ 0.37
Net realized and unrealized gain/(loss) on investments......... (0.86) 2.37 0.88 5.42 (0.71)
--------- --------- --------- --------- ---------
Total from investment operations............................. (0.79) 2.43 0.96 5.58 (0.34)
Less distributions:
Dividends from net investment income........................... (0.08) (0.05) (0.09) (0.15) (0.39)
Distributions in excess of net investment income............... (0.01) -- -- -- --
Distributions from net realized gains on investments........... (2.39) (0.67) (0.56) (0.42) (0.07)
Distributions in excess of net realized gains.................. (0.31) (0.04) -- -- --
--------- --------- --------- --------- ---------
Total distributions.......................................... (2.79) (0.76) (0.65) (0.57) (0.46)
--------- --------- --------- --------- ---------
Net asset value, end of year..................................... $ 19.68 $ 23.26 $ 21.59 $ 21.28 $ 16.27
========= ========= ========= ========= =========
Total Return+.................................................... (3.4%) 11.3% 4.5% 34.3% (2.0%)
--------- --------- --------- --------- ---------
Net assets, end of year (000's omitted).......................... $ 482,471 $ 695,013 $ 625,050 $ 422,589 $ 202,971
========= ========= ========= ========= =========
Significant Ratios:
Investment income -- net to average net assets................. 0.31% 0.22% 0.46% 0.97% 2.67%
Operating expenses -- net to average net assets................ 1.36% 1.41% 1.41% 1.45% 1.50%
Portfolio turnover............................................. 40.34% 80.72% 45.93% 49.88% 74.69%
</TABLE>
- ---------------
+ Total return is calculated assuming a purchase of shares at the net asset
value on the first day and a sale on the last day of each year reported and
includes reinvestment of dividends and distributions.
<PAGE> 13
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
OF THE GABELLI GROWTH FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio 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 Growth Fund (the
"Fund") at December 31, 1994, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1994 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 9, 1995
1994 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
On December 30, 1994, the Fund paid to shareholders an ordinary income
dividend (comprised of net investment income and short-term capital gains) of
$0.290 per share and a distribution from long-term capital gains of $2.500 per
share. For 1994, 100% of ordinary income dividends qualifies for the dividend
received deduction available to corporations. The distribution from long-term
capital gains is designated as a "Capital Gain Dividend" and is taxable to
shareholders as a long-term capital gain.
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Fund during 1994
which was derived from U.S. Treasury Securities was 2.95%. Such income is exempt
from state and local income tax in most 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
Gabelli Growth Fund did not meet this strict requirement in 1994. Due to the
diversity in state and local tax laws it is recommended that you consult your
personal tax adviser for the applicability of the information provided as to
your own situation.
<PAGE> 14
GABELLI FAMILY OF FUNDS
Distributed by Gabelli & Company, Inc.
One Corporate Center, Rye, NY 10580-1435
GABELLI ASSET FUND
Invests in a diversified portfolio of companies selling below
their private market value. The Fund's primary objective is to
seek growth of capital.
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI GROWTH FUND
Invests in a diversified portfolio of common stocks that have
favorable, yet undervalued, prospects for earnings growth. The
Fund's primary objective is to seek capital appreciation by
employing an earnings-driven investment approach.
Portfolio Manager: Howard F. Ward, CFA
GABELLI GLOBAL SERIES
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Invests in telecommunications companies throughout the
world. Targets undervalued companies with strong earnings
per share and cash flow dynamics. The Fund's primary
objective is to seek capital appreciation.
Team Manager: Salvatore Muoio
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Invests principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic
companies. The Fund's primary objective is to seek a high
level of total return through a combination of current
income and capital appreciation.
Portfolio Manager: Hart Woodson
GABELLI GLOBAL INTERACTIVE COUCH POTATO(TM)(C) FUND
Invests in companies involved in communications, creativity
and copyright throughout the world. The Fund will also
invest in companies participating in emerging technological
advances in interactive services and products. The Fund's
primary objective is to seek capital appreciation.
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI GOLD FUND
Invests in a global portfolio of equity securities of gold mining
and related companies. The Fund's primary objective is to seek
capital appreciation. Investment in gold stocks is considered
speculative and is affected by a variety of worldwide economic,
financial and political factors.
Portfolio Manager: Caesar Bryan
Investment in foreign securities involves risks not ordinarily
associated with investments in domestic issuers, including
currency fluctuation, economic and political risks.
GABELLI SMALL CAP GROWTH FUND
Invests primarily in equity securities of smaller companies
(companies with a total market capitalization of less than $500
million) which are believed likely to have rapid growth in
revenues and earnings. The Fund's primary objective is to seek
capital appreciation.
Portfolio Manager: Mario J. Gabelli, CFA
NO-LOAD THROUGH APRIL 30, 1995
GABELLI VALUE FUND
Invests in a concentrated portfolio of securities of companies
which are selling below their private market value. The Fund's
primary objective is long-term capital appreciation.
$250 initial minimum for IRAs.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 5 1/2%
GABELLI EQUITY INCOME FUND
Invests primarily in a portfolio of income producing equity
securities. Pays quarterly dividends. The Fund's primary
objective is to seek a high level of return.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 4 1/2%
GABELLI U.S. TREASURY MONEY MARKET FUND
Invests exclusively in short-term U.S. Treasury securities. The
Fund's primary objective is to provide high current income
consistent with the preservation of principal and liquidity.
Features low expenses, free checkwriting, telephone exchange and
redemption privileges. $10,000 minimum initial investment. $3,000
minimum for Gabelli Fund shareholders. $1,000 for IRAs and
Custodial Accounts.
Portfolio Manger: Ronald Eaker
GABELLI CONVERTIBLE SECURITIES FUND
Invests primarily in bonds and preferred stocks that are
convertible into common stock. The Fund's primary objective is to
seek a high level of total return on assets through a combination
of current income and capital growth.
PRESENTLY CLOSED TO NEW INVESTORS.
Portfolio Manager: Mario J. Gabelli, CFA
To request a prospectus, call
1-800-GABELLI (1-800-422-3554)
Or, visit our Internet homepage at:
http://networth.galt.com/gabelli
The prospectus(es) contain more complete information, including
fees and expenses, and should be read carefully prior to
investing.
<PAGE> 15
THE GABELLI GROWTH FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Karl Otto Pohl
President and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Funds, Inc.
Felix J. Christiana Anthony R. Pustorino
Former Senior Certified Public Accountant
Vice President Professor, Pace University
Dollar Dry Dock Savings Bank
Anthony J. Colavita Anthony Torna
Attorney-at-Law Herzog, Heine & Geduld, Inc.
Anthony J. Colavita, P.C.
James P. Conn Anthonie C. van Ekris
Managing Director and Managing Director
Chief Investment Officer BALMAC International, Inc.
Financial Security
Assurance
Dugald A. Fletcher Salvatore J. Zizza
President Chairman, Chief
Fletcher & Company, Inc. Executive Officer
The Lehigh Group, Inc.
OFFICERS AND PORTFOLIO MANAGERS
Mario J. Gabelli, CFA Bruce N. Alpert
Chief Investment Officer President and Treasurer
Howard F. Ward, CFA J. Hamilton Crawford, Jr.
Portfolio Manager Secretary
Kevin Cory Donald C. Jenkins, CFA
Associate Portfolio Manager Associate Portfolio Manager
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom
- -------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Growth Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
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[MARIO GABELLI'S PHOTO]
THE
GABELLI
GROWTH
FUND
ANNUAL REPORT
DECEMBER 31, 1994
