<PAGE>
THE GABELLI GROWTH FUND
One Corporate Center
Rye, New York 10580-1434
SEMI-ANNUAL REPORT - 1995
TO OUR SHAREHOLDERS:
There is an old saying on Wall Street that 'the trend is your friend.#
Similarly, others will say "don't fight the tape." Since last November 8, both
the trend and the tape have been suggesting and delivering profits to
investors. It has been a good time to own common stocks, particularly the
large capitalization 'Blue Chips# which we favor in your Fund. The second
quarter ended June 30, 1995, was a vintage one for equity investors. Our
policy of avoiding the temptation to 'time# the market worked to our advantage,
<TABLE>
INVESTMENT RESULTS (a)
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Quarter
---------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ---
<S> <C> <C> <C> <C> <C>
1995: Net Asset Value............................................... $20.86 $22.99 --- --- ---
Total Return ................................................. 6.0% 10.2% --- --- ---
- ---------------------------------------------------------------------------------------------------------------------------------
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>
<TABLE>
<CAPTION>
Average Annual Returns - June 30, 1995 (a)
- ------------------------------------------
<S> <C>
1 Year.............................. 23.6%
5 Year.............................. 10.6%
Life of Fund (b).................... 15.2%
<FN>
(a) Total return 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) From commencement of
operations on April 10, 1987.
</TABLE>
<TABLE>
<CAPTION>
Dividend History
- --------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
<S> <C> <C>
December 30, 1994 $ 2.79 $19.68
December 31, 1993 $0.760 $23.2
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>
<PAGE>
allowing the Fund to fully participate in the quarter's advance in share
prices. We encourage you to view The Gabelli Growth Fund as a long-term
investment vehicle in order to reduce the risks inherent in short-term market
timing.
INVESTMENT RESULTS
For the three months ended June 30, 1995, The Gabelli Growth Fund's net asset
value increased 10.2% to $22.99 per share from $20.86 on March 31, 1995. The
unmanaged Standard & Poor's 500 Index (S&P 500), a widely accepted barometer of
stock market performance, returned 9.5% over the same period. For the six-month
period ended June 30, 1995, the Fund increased 16.8%, versus the 20.2% increase
in the S&P 500. For the twelve months ended June 30, 1995, the Fund's total
return was 23.6% versus 26.1% for the S&P 500. The Fund's total return since
inception on April 10, 1987, through June 30, 1995, was 220.2%, which reflects
an average annual total return of 15.2%, assuming reinvestment of all dividends
and distributions. The five-year total return of the Fund ending on June 30,
1995, was 65.6%, which equates to a 10.6% average annual total return. On
June 30, 1995, our shareholder base was at 42,454 shareholders and total net
assets of the Fund were $493.2 million.
ECONOMIC BACKGROUND
Most indicators continue to suggest a slowing in the rate of economic growth.
While exports continue to exhibit strength, the important domestic markets for
autos, housing and other big ticket consumer items are relatively soft. Growth
in Real Gross Domestic Product (GDP) this year will definitely lag last year's
4.0% pace. Additionally, there are early signs of a slowing in growth abroad,
which have negative implications for U.S. exports.
It is conceivable that we could have a quarter or two of negative growth this
year. That said, we don't mean to sound too gloomy. The economy should respond
to this year's substantial decline in interest rates before 1995 ends.
Additionally, many industries are thriving and profits are advancing smartly
although the risk of negative earnings surprises has increased. Inflation
remains subdued. In general, corporate America is in excellent condition and
there is nothing structurally wrong with the economy that lower interest rates
and the passage of time won't cure.
FINANCIAL MARKET OBSERVATIONS
The stock market surge which began last November has been breathtaking. From
November 1994 through June 1995, the Dow Jones Industrial Average registered a
gain of 16.6%. That is almost 650 points on the Average, with the last 400
coming during the second quarter of this year. As for interest rates, the yield
on 30-year Treasuries fell from 7.4% to 6.5% during the quarter, after peaking
at over 8% last November. Like most spikes in share prices, this advance was
not widely predicted or expected. The advance was ignited by a powerful
combination of declining interest rates, exceptional profit growth, numerous
corporate deals and restructurings and the election of a more conservative
Congress. The icing on the cake was the widespread negative market sentiment
which accompanied last year's lackluster market. Fortunately for holders of
stocks, market psychology can change quickly and change it has. We should not
be surprised if the pendulum swings back in the other direction before the year
is out.
2
<PAGE>
COMMENTARY
We believe companies with superior growth in earnings, cash flow or asset values
provide superior investment returns over time. Great growth companies usually
enjoy a competitive advantage taking the form of proprietary products, dominant
brand names or protection from widespread competition due to high barriers to
entry in certain industries. In some cases, the competitive advantage is simply
outstanding management. We search for companies which enjoy such advantages
that are also well positioned to benefit from major long-term trends. Examples
of such trends include the evolution of the world's many economies into a
single, relatively free market, the technology revolution and the aging of our
population.
The globalization of the world's economies is an evolving process that has
already created tremendous new opportunities for both consumer and capital goods
companies as well as companies providing technical services. Major
beneficiaries among consumer goods companies include portfolio holdings such as
Coca-Cola Company (KO - $63.75 - NYSE), PepsiCo, Inc. (PEP - $45.625 - NYSE),
Gillette Company (G - $44.625 - NYSE), Colgate-Palmolive Company (CL - $73.125 -
NYSE) and Procter & Gamble Company (PG - $71.875 - NYSE). Among capital goods
producers, the winners include holdings such as Caterpillar Inc. (CAT - $64.25 -
NYSE), Boeing Co. (BA - $62.625 - NYSE), Deere & Company (DE - $85.625 - NYSE),
Parker Hannifin Corp. (PH - $36.25 - NYSE) and Emerson Electric Co. (EMR -
$71.50 - NYSE).
Among companies providing technical services, we view Fluor Corporation (FLR -
$52.00 - NYSE), Foster Wheeler Corporation (FWC - $35.25 - NYSE) and Electronic
Data Systems Corporation (General Motors Corporation Class E)(GME - $43.50 -
NYSE) as logical beneficiaries. Technology companies, like Intel Corporation
(INTC - $63.3125 - NASDAQ) and Hewlett-Packard Co. (HWP - $74.50 - NYSE), sell
into both consumer and capital goods markets. Indeed, the business of
empowering companies to operate on a global scale feeds the technology
revolution.
Modern technology allows us to build better products faster and to
communicate and manage more effectively. New technologies are improving
productivity and stimulating the creation of new products and services. These
are highly value-added products that improve the quality of life in the factory,
home and office. Your Fund's technology investments include Intel, Texas
Instruments, Inc. (TXN - $133.875 - NYSE), Hewlett-Packard, International
Business Machines Corporation (IBM - $96.00 - NYSE) and Motorola, Inc.
(MOT - $67.125 - NYSE). During the quarter we realized a profit on the sale of
Microsoft Corporation (MSFT - $90.375 - NASDAQ), which reached a price we felt
was too rich, even for a great company.
Increasingly, U.S. based companies are producing their products abroad,
typically in developing economies where labor is abundant. The fact is that
the U.S. Iabor pool, along with those of Europe and Japan, is not getting any
younger. At this point in our population cycle, our work force is essentially
no longer expanding. As we as a nation grow older, our consumption of health
care and financial services increases, as does our consumption of recreational
and entertainment products and services.
Major Fund holdings that serve these markets include Merck & Co., Inc. (MRK -
$49.00 - NYSE), Schering-Plough Corporation (SGP - $44.125 - NYSE), Eli Lilly &
Co. (LLY - $78.50 - NYSE) and Johnson & Johnson (JNJ - $67.625 - NYSE) in health
care; Mellon Bank Corporation (MEL - $41.625 -
3
<PAGE>
NYSE), State Street Boston Corporation (STT - $36.875 - NYSE), Citicorp
(CCI - $57.875 - NYSE) and Norwest Corporation (NOB - $28.75 - NYSE)
among financial service providers; and Capital Cities/ABC, Inc. (CCB -
$108.00 - NYSE), Walt Disney Company (DIS - $55.625 - NYSE), Time
Warner Inc. (TWX - $41.125 - NYSE) and Viacom Inc. (VIA - $46.50 - ASE;
VIA'B - $46.375 - ASE) among entertainment companies.
Your Fund is well diversified by industry weightings. Consumer staples (food,
beverage, tobacco, and household products) represent the largest sector
concentration, accounting for about 16% of portfolio assets. This is followed
by financial services, with approximately a 14% weighting, and technology, which
represents roughly 10% of portfolio assets.
LOOKING AHEAD
As we stated in last quarter's report, "an environment of low inflation and
moderate growth is frequently a positive backdrop for common stocks." While
the environment is little changed, stock prices are generally higher, as are
expectations. Although we are skeptical that the rate of advance in share
prices seen during the second quarter will be repeated this year, we would not
be surprised to see a further increase in prices given the favorable interest
rate environment and healthy profit picture. We expect cash reserves to
continue to represent less than 10% of portfolio assets.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of your Fund's
investments. Favorable earnings prospects do not necessarily translate into
higher stock prices, but they do express a positive trend which we believe will
develop over time.
Boeing Co. (BA - $62.625 - NYSE) is the world's leading vendor of commercial
aircraft with a market share in excess of 50%. We believe we are in the early
stages of a multi-year uplift in the commercial aircraft cycle, stimulated by a
relatively old commercial fleet and availability of new aircraft, such as the
Boeing 777, which offers significant improvements in performance and passenger
comfort. Boeing is the country's top exporter and the Pacific Rim has become
the company's strongest regional market.
Ericsson (L.M.) Telephone Company (ERICY - $20.00 - NASDAQ) is the
Swedish-based supplier of telecommunications equipment. While the company may
be best known for its portable hand held phones, the company derives an even
larger share of earnings from selling telecommunications infrastructure
equipment. Demand for such equipment is strong and is likely to remain so for
a number of years given the large number of cellular and PCS systems scheduled
to be built around the world.
Fluor Corporation (FLR - $52.00 - NYSE) is the largest, most international and
most diversified of the public engineering and construction companies. The
world is awash in mega-engineering projects from power plants, refineries and
factories to roads, bridges and airports. Fluor's reputation as a diversified
global operator with the financial wherewithal to help finance projects makes
them a leading candidate for many of these projects. Earnings growth should
average 15% over the next few years.
Gillette Company (G - $44.625 - NYSE) Along with Coca-Cola, Gillette is
currently the other premier example of a consumer company that is well-situated
to quickly become a true global brand. As such,
4
<PAGE>
the company is aggressively pursuing foreign markets and introducing numerous
new products. Earnings should advance at nearly a 20% rate this year,
reflecting strong results both domestically and abroad.
Home Depot, Inc. (HD - $40.625 - NYSE) is the undisputed leader of the home
improvement warehouse retailers. While poor weather hurt sales in this year's
first quarter, earnings should advance at roughly a 25% rate for the remainder
of the year. New prototype stores are being tested which appeal to different
home improvement market segments, offering additional means to continue growing
earnings at a rate in excess of 20%.
Intel Corporation (INTC - $63.3125 - NASDAQ) is one of the most prominent
beneficiaries of the growing demand for desktop computing in the office and
personal computers for use in the home. With a research effort that far exceeds
those of its competitors, Intel is likely to remain the primary supplier of
microprocessors to the PC industry. The demand for personal computers remains
robust, driven by the availability of more powerful hardware, namely, the new
Intel Pentium chips and more sophisticated, user-friendly software.
Johnson & Johnson (JNJ - &67.625 - NYSE) With over 50% of its profit generated
outside the U.S., the company is truly a leading global supplier to the
healthcare industry. Operations are well-diversified among pharmaceuticals,
diagnostic equipment and supplies. Leading consumer brands include Tylenol,
Band-Aid and Neutrogena. In recent years, the company has significantly
increased productivity, paving the way for earnings growth in the 13% to 15%
range for the immediate future.
McDonald's Corporation (MCD - $39.125 - NYSE) McDonald's is simply the
best-managed restaurant chain in the world. McDonald's has achieved significant
success overseas and foreign earnings now exceed domestic earnings. The company
is accelerating the pace of new restaurant openings which bodes well for
near-term growth. The McDonald's brand name is one of the most widely
recognized in the world and is likely to become even more widely known as
two-thirds of all new restaurants are being opened outside the U.S.
Walt Disney Company (DIS - $55.625 - NYSE) is one of the best, if not the best,
producer of filmed entertainment and related merchandise. Its theme parks
continue to produce exceptional profits. Demand for quality filmed
entertainment is high and rising which is good news for the big studio operators
like Disney. The company's most recently released animated film, Pocahontas,
should do well at the box office. Management has announced plans for a new
attraction at Disney World built around an animal kingdom theme. Additionally,
the company is entering the cruise line business, although their maiden voyage
remains a couple of years away as the ships are presently under construction.
This company does not sit still, as represented by its $19 billion acquisition
of Capital Cities/ABC, Inc. (CCB - $108.00 - NYSE). Capital Cities owns the ABC
television and radio network, publishes numerous newspapers and trade magazines
and has investments in cable programming such as ESPN, Lifetime and the Arts and
Entertainment channel and is well-positioned to exploit new opportunities in the
coming multimedia age.
5
<PAGE>
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/ Donald C. Jenkins
HOWARD F. WARD, CFA DONALD C. JENKINS, CFA
Portfolio Manager Associate Portfolio Manager
July 17, 1995
<TABLE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
JUNE, 30 1995
-------------
<S> <C>
Gillette Company Coca-Cola Company
Home Depot, Inc. Johnson & Johnson
Schering-Plough Corporation Lilly (Eli) & Co.
Merck & Co., Inc. American International Group, Inc.
Mellon Bank Corporation First Data Corporation
Gillette Company Coca-Cola Company
Home Depot, Inc. Johnson & Johnson
Schering-Plough Corporation Lilly (Eli) & Co.
Merck & Co., Inc. American International Group, Inc.
- --------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 95.4%
ADVERTISING -- 0.8%
100,700 Interpublic Group of
Companies................... $ 3,543,086 $ 3,776,250
------------- -------------
AEROSPACE -- 0.7%
55,000 Boeing Co..................... 3,169,001 3,444,375
------------- -------------
BROADCASTING -- 2.0%
90,000 Capital Cities/ABC,
Inc......................... 7,799,797 9,720,000
------------- -------------
BUILDING AND
CONSTRUCTION -- 1.3%
73,000 Fluor Corporation............. 3,068,727 3,796,000
71,000 Foster Wheeler
Corporation................. 2,261,101 2,502,750
------------- -------------
5,329,828 6,298,750
------------- -------------
BUSINESS SERVICES -- 6.1%
74,000 Automatic Data
Processing, Inc............. 4,542,394 4,652,750
102,500 Ceridian
Corporation +............... 3,526,850 3,779,688
175,900 First Data
Corporation................. 8,314,213 10,004,313
197,000 General Motors
Corporation, Class E........ 8,398,488 8,569,500
62,000 Reuters Holdings plc,
Class B, ADR................ 2,722,038 3,107,750
------------- -------------
27,503,983 30,114,001
------------- -------------
CABLE -- 2.8%
130,000 Cox Communications
Inc., Class A,
New +....................... 2,191,309 2,518,750
120,000 Multimedia, Inc.,
New +....................... 3,602,001 4,650,000
285,000 Tele-Communications,
Inc., Class A +............. 1,160,156 6,679,688
------------- -------------
6,953,466 13,848,438
------------- -------------
CONGLOMERATES -- 1.6%
197,000 General Motors
Corporation, Class H........ 7,425,845 7,781,500
------------- -------------
CONSUMER
PRODUCTS -- 7.5%
80,000 Colgate-Palmolive
Company..................... 3,272,590 5,850,000
60,000 Duracell International Inc.... 2,522,588 2,595,000
125,000 General Electric Company...... 6,003,150 7,046,875
314,000 Gillette Company.............. 9,913,012 14,012,250
72,000 Procter & Gamble
Company..................... 4,325,200 5,175,000
50,000 Ralston Purina Group.......... 2,035,801 2,550,000
------------- -------------
28,072,341 37,229,125
------------- -------------
ENERGY -- 3.0%
80,000 Chevron Corporation.... $ 3,669,949 $ 3,730,000
174,000 Enron Corporation...... 5,382,375 6,111,750
35,000 Mobil Corporation...... 2,971,281 3,360,000
30,000 Schlumberger Ltd....... 1,913,750 1,863,750
------------- -------------
13,937,355 15,065,500
------------- -------------
ENTERTAINMENT -- 3.5%
130,500 Time Warner Inc........ 4,712,275 5,366,812
18,000 Viacom Inc., Class
A +.................. 607,725 837,000
82,000 Viacom Inc., Class
B +.................. 3,607,745 3,802,750
127,000 Walt Disney Company.... 6,335,378 7,064,375
------------- -------------
15,263,123 17,070,937
------------- -------------
FINANCIAL SERVICES -- 14.0%
200,000 American Express
Company.............. 5,906,440 7,025,000
88,000 American International
Group, Inc........... 8,700,151 10,032,000
142,000 Barnett Banks Inc...... 6,596,251 7,277,500
144,000 Citicorp............... 6,876,839 8,334,000
60,000 Federal National
Mortgage
Association.......... 4,814,212 5,662,500
36,000 General Re
Corporation.......... 4,698,615 4,819,500
279,000 Mellon Bank
Corporation.......... 9,799,521 11,613,375
250,000 Norwest Corporation.... 5,850,839 7,187,500
200,000 State Street Boston
Corporation.......... 6,202,089 7,375,000
------------- -------------
59,444,957 69,326,375
------------- -------------
FOOD, BEVERAGE AND
TOBACCO -- 8.2%
177,000 Coca-Cola Company...... 7,699,672 11,283,750
225,000 Nabisco Holdings Corp.,
Class A.............. 6,129,576 6,075,000
159,000 PepsiCo, Inc........... 5,783,937 7,254,375
130,000 Philip Morris Companies
Inc.................. 7,840,427 9,668,750
41,200 Tootsie Roll
Industries, Inc...... 2,531,782 2,853,100
76,000 Wrigley (Wm.) Jr.
Company.............. 2,250,923 3,524,500
------------- -------------
32,236,317 40,659,475
------------- -------------
HEALTH CARE -- 11.4%
115,000 Abbott Laboratories.... 4,518,990 4,657,500
60,000 Amgen Inc.+............ 2,179,560 4,826,250
161,000 Johnson & Johnson...... 8,145,916 10,887,625
137,000 Lilly (Eli) & Co....... 9,350,000 10,754,500
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
- ---------- ------------- -------------
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTH CARE (CONTINUED)
252,000 Merck & Co., Inc....... $ 10,991,808 $ 12,348,000
285,000 Schering-Plough
Corporation.......... 10,668,720 12,575,625
------------- -------------
45,854,994 56,049,500
------------- -------------
HOTELS/CASINOS -- 0.6%
41,000 Hilton Hotels
Corporation.......... 2,200,275 2,880,250
------------- -------------
INDUSTRIAL EQUIPMENT AND
SUPPLIES -- 5.6%
66,000 Caterpillar Inc........ 3,672,500 4,240,500
70,000 Crane Co............... 1,813,750 2,537,500
37,000 Deere & Company........ 2,850,362 3,168,125
74,000 Emerson Electric Co.... 3,275,850 5,291,000
135,000 Illinois Tool Works,
Inc.................. 3,447,912 7,425,000
43,000 Minerals Technologies
Inc.................. 688,000 1,548,000
95,000 Parker Hannifin
Corp................. 2,823,229 3,443,750
------------- -------------
18,571,603 27,653,875
------------- -------------
METALS AND MINING -- 0.8%
76,000 Aluminum Company of
America.............. 3,401,960 3,809,500
------------- -------------
PACKAGING -- 0.2%
23,000 Sealed Air
Corporation +........ 516,466 1,012,000
------------- -------------
RESTAURANTS -- 1.2%
147,000 McDonald's
Corporation.......... 4,561,788 5,751,375
------------- -------------
RETAIL -- 6.9%
314,806 Home Depot, Inc........ 13,121,562 12,788,994
135,200 Mattel, Inc............ 3,274,622 3,515,200
160,000 Office Depot Inc.+..... 3,928,113 4,500,000
70,000 Walgreen Co............ 2,673,766 3,508,750
360,000 Wal-Mart Stores,
Inc.................. 8,447,902 9,630,000
------------- -------------
31,445,965 33,942,944
------------- -------------
TECHNOLOGY -- 9.2%
100,000 Hewlett-Packard Co..... 5,258,513 7,450,000
135,000 Intel Corporation +.... 4,155,797 8,547,187
76,500 International Business
Machines
Corporation.......... 6,937,683 7,344,000
110,000 Loral Corporation...... $ 3,225,214 $ 5,692,500
50,000 Molex Incorporated..... 1,265,973 1,937,500
144,250 Molex Incorporated,
Class A.............. 4,537,252 5,265,125
10,000 Silicon Graphics
Inc.+................ 414,000 398,750
25,000 Sun Microsystems
Inc.+................ 1,254,381 1,212,500
55,000 Texas Instruments,
Inc.................. 4,256,613 7,363,125
------------- -------------
31,305,426 45,210,687
------------- -------------
TELECOMMUNICATIONS -- 5.9%
120,000 AT&T Corp.............. 4,507,975 6,375,000
280,000 Ericsson (L.M.)
Telephone Company,
Class B, ADR......... 3,964,028 5,600,000
50,000 Globalstar
Telecommunications +... 1,000,000 662,500
135,000 Motorola, Inc.......... 7,754,876 9,061,875
127,000 Nokia Group AB, Class
A, ADR............... 5,233,726 7,572,375
------------- -------------
22,460,605 29,271,750
------------- -------------
WIRELESS COMMUNICATIONS -- 2.1%
220,000 AirTouch Communications
Inc.+................ 5,296,431 6,270,000
108,000 Vodafone Group plc,
ADR.................. 3,635,406 4,090,500
------------- -------------
8,931,837 10,360,500
------------- -------------
TOTAL COMMON STOCKS................. 379,930,018 470,277,107
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C> <C>
U.S. TREASURY BILLS -- 1.7%
$8,500,000 5.11% to 5.55%++
due 07/06/1995 -
08/24/1995......... 8,447,243 8,447,243
------------ -------------
TOTAL INVESTMENTS.......... 97.1%
$388,377,261(a) 478,724,350
OTHER ASSETS AND ============
LIABILITIES (NET)......... 2.9 14,427,397
----- -------------
NET ASSETS..................100.0% $ 493,151,747
===== =============
- ---------------
<FN>
(a) Aggregate cost for Federal tax purposes was $388,702,895. Net unrealized
appreciation for Federal tax purposes was $90,021,455 (gross unrealized
appreciation was $90,853,230 and gross unrealized depreciation was
$831,775).
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR -- American Depositary Receipt
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
THE GABELLI GROWTH FUND
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995 (UNAUDITED)
- -------------------------------------------------------
<S> <C>
ASSETS:
Investments, at value
(Cost $388,377,261)................. $478,724,350
Cash.................................. 133,528
Receivable for investments sold....... 17,608,019
Dividends receivable.................. 697,563
Receivable for Fund shares sold....... 88,983
------------
Total Assets........................ 497,252,443
------------
LIABILITIES:
Payable for investments purchased..... 2,880,078
Payable for investment advisory fee... 401,599
Payable for distribution fees......... 265,362
Payable for Fund shares redeemed...... 202,666
Payable for transfer agent fees....... 76,900
Accrued expenses and other payables... 274,091
------------
Total Liabilities................... 4,100,696
------------
Net assets applicable to 21,454,473
shares of beneficial interest
outstanding....................... $493,151,747
============
NET ASSETS CONSIST OF:
Shares of beneficial interest at par
value............................... $ 214,545
Additional paid-in capital............ 354,073,370
Accumulated net realized gain on
investments......................... 47,787,680
Undistributed net investment income... 729,063
Net unrealized appreciation of
investments......................... 90,347,089
------------
Total Net Assets.................... $493,151,747
============
Net Asset Value, offering and
redemption price per share
($493,151,747 / 21,454,473 shares
outstanding; unlimited number
of shares authorized of
$0.01 par value).................... $ 22.99
============
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
- -------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividend income (net of foreign
withholding taxes of $7,770)........ $ 4,064,138
Interest income....................... 135,399
------------
Total Investment Income............. 4,199,537
------------
EXPENSES:
Investment advisory fee............... 2,381,597
Distribution fees..................... 483,336
Transfer agent fees................... 230,541
Shareholder communications expense.... 191,799
Trustees' fees........................ 40,538
Legal and audit fees.................. 26,950
Other................................. 330
------------
Total Expenses...................... 3,355,091
------------
NET INVESTMENT INCOME................... 844,446
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments
sold................................ 48,730,511
------------
Net unrealized appreciation of
investments:
Beginning of period................. 65,395,180
End of period....................... 90,347,089
------------
Change in net unrealized
appreciation of investments..... 24,951,909
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS........................... 73,682,420
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $ 74,526,866
============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
<TABLE>
THE GABELLI GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED YEAR
6/30/95 ENDED
(UNAUDITED) 12/31/94
------------- -------------
<S> <C> <C>
Net investment income....................................................................... $ 844,446 $ 1,771,347
Net realized gain on investments............................................................ 48,730,511 59,552,832
Net change in unrealized appreciation of investments........................................ 24,951,909 (84,422,105)
------------ -------------
Net increase/(decrease) in net assets resulting from operations............................. 74,526,866 (23,097,926)
Distributions to shareholders from:
Net investment income................................................................... -- (1,697,277)
Distributions in excess of net investment income........................................ -- (167,272)
Net realized gain on investments........................................................ -- (58,588,684)
Distributions in excess of net realized gain on investments............................. -- (27,643)
Net decrease in net assets from Fund share transactions..................................... (63,845,672) (128,963,907)
------------ -------------
Net increase/(decrease) in net assets....................................................... 10,681,194 (212,542,709)
NET ASSETS:
Beginning of period......................................................................... 482,470,553 695,013,262
------------ -------------
End of period (including undistributed net investment income
of $729,063 at June 30, 1995)............................................................. $493,151,747 $ 482,470,553
============ =============
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. The Gabelli Growth Fund (the "Fund") was
organized on October 24, 1986 as a Massachusetts business trust. The Fund is a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund commenced
operations on April 10, 1987. The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements.
SECURITY VALUATION. Portfolio securities which are traded only on a nationally
recognized securities exchange or in the over-the-counter market which are
National Market System Securities are valued at the last sale price as of the
close of business on the day the securities are being valued or, lacking any
sales, at the mean between closing bid and asked prices. Other over-the-counter
securities are valued at the mean between current bid and asked prices as
reported by NASDAQ, the National Quotation Bureau or such other comparable
sources as the Board of Trustees deems appropriate to reflect their fair value.
Portfolio securities which are traded both in the over-the-counter market and on
a stock exchange are valued according to the broadest and most representative
market, as determined by Gabelli Funds, Inc. (the "Adviser"). Securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Board of
Trustees of the Fund. Short-term investments that mature in more than 60 days
are valued at the highest bid price obtained from a dealer maintaining an active
market in that security. Short-term investments that mature in 60 days or fewer
are valued at amortized cost, unless the Board of Trustees determines that such
valuation does not constitute fair value.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined using specific identification as the cost method. Interest income
(including amortization of premium and discount) is recorded as earned.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividend income and distributions
to shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
PROVISION FOR INCOME TAXES. The Fund has qualified and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
2. AGREEMENTS WITH AFFILIATED PARTIES. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00 percent of the value of the Fund's average daily net
assets, 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. The Adviser 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 the
year ended December 31, 1994 or the six months ended June 30, 1995.
11
<PAGE>
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
3. DISTRIBUTION PLAN. The Fund has adopted a plan of distribution (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. Pursuant to this Plan, the
Distributor ("Gabelli & Company, Inc."), an indirect majority-owned subsidiary
of the Adviser, is authorized to purchase advertising, sales literature and
other promotional material and to pay its own salespeople. The Fund will
reimburse the Distributor for these expenditures up to 0.25 percent on an annual
basis of the value of the Fund's average daily net assets. In addition, if and
to the extent that the fee the Fund pays to the Adviser 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 six months ended June 30, 1995, the Fund
incurred distribution costs under the Plan of $483,336, representing 0.20
percent of the value of the Fund's average daily net assets.
4. PORTFOLIO SECURITIES. Cost of purchases and proceeds from sales of
securities for the six months ended June 30, 1995, other than U.S. government
and short-term securities, aggregated $434,442,187 and $516,633,267,
respectively.
5. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 1995, the
Fund paid brokerage commissions of $57,595 to Gabelli & Company and its
affiliates.
<TABLE>
6. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial interest were as follows:
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
6/30/95 12/31/94
----------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold.................................................. 3,418,011 $ 70,993,129 8,826,361 $ 197,041,813
Shares issued upon reinvestment of dividends................. -- -- 2,929,789 57,657,339
Shares redeemed.............................................. (6,477,746) (134,838,801) (17,122,413) (383,663,059)
---------- ------------- ----------- -------------
Net decrease................................................. (3,059,735) $ (63,845,672) (5,366,263) $(128,963,907)
========== ============= =========== =============
</TABLE>
12
<PAGE>
<TABLE>
THE GABELLI GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Per share amounts for a Fund share outstanding throughout each period.
<CAPTION>
SIX MONTHS
ENDED DECEMBER 31,
6/30/95 --------------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990 1989 1988 1987*
---------- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value,
beginning of period.......... $ 19.68 $ 23.26 $ 21.59 $ 21.28 $ 16.27 $ 17.07 $ 12.65 $ 9.51 $10.00
-------- -------- -------- -------- -------- -------- -------- ------- ------
Net investment income(a).. 0.04 0.07 0.06 0.08 0.16 0.37 0.18 0.05 0.15
Net realized and unrealized
gain/(loss) on investments... 3.27 (0.86) 2.37 0.88 5.42 (0.71) 4.89 3.62 (0.64)
-------- -------- -------- -------- -------- -------- -------- ------- ------
Total from investment
operations.................... 3.31 (0.79) 2.43 0.96 5.58 (0.34) 5.07 3.67 (0.49)
-------- -------- -------- -------- -------- -------- -------- ------- ------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income........ -- (0.08) (0.05) (0.09) (0.15) (0.39) (0.17) (0.20) --
Distributions in excess of
net investment income....... -- (0.01) -- -- -- -- -- -- --
Net realized gains........... -- (2.39) (0.67) (0.56) (0.42) (0.07) (0.48) (0.33) --
Distributions in excess of
net realized gains.......... -- (0.31) (0.04) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- ------- ------
Total distributions............ -- (2.79) (0.76) (0.65) (0.57) (0.46) (0.65) (0.53) --
-------- -------- -------- -------- -------- -------- -------- ------- ------
Net asset value, end
of period.................... $ 22.99 $ 19.68 $ 23.26 $ 21.59 $ 21.28 $ 16.27 $ 17.07 $ 12.65 $ 9.51
======== ======== ======== ======== ======== ======== ======== ======= ======
Total return**................. 16.8% (3.4)% 11.3% 4.5% 34.3% (2.0)% 40.1% 39.2% (4.9)%
======== ======== ======== ======== ======== ======== ======== ======= ======
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period
(in 000's)................... $493,152 $482,471 $695,013 $625,050 $422,589 $202,971 $113,187 $11,968 $3,532
Ratio of net investment
income to average
net assets................. 0.35%+ 0.31% 0.22% 0.46% 0.97% 2.67% 2.24% 0.72% 2.94%+
Ratio of operatin expenses
to average net assets(b)... 1.41%+ 1.36% 1.41% 1.41% 1.45% 1.50% 1.85% 2.30% 2.00%+
Portfolio turnover rate........ 91.7% 40.3% 80.7% 45.9% 49.9% 74.7% 47.8% 81.7% 80.0%
<FN>
- ---------------
* The Fund commenced operations on April 10, 1987.
** 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.
+ Annualized.
(a) Net investment loss before expenses reimbursed by Adviser for the year
ended December 31, 1988 and the period ended December 31, 1987 was $(0.08)
and $(0.11), respectively.
(b) Operating expense ratios before expenses reimbursed by Adviser for the year
ended December 31, 1988 and the period ended December 31, 1987 were 4.38%
and 6.45%, respectively.
</TABLE>
13
<PAGE>
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. (No-load)
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. (No-load)
Portfolio Manager: Howard F. Ward, CFA
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 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
Max. Sales charge: 4 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 total return.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 4 1/2%
GABELLI'S WESTWOOD FUNDS ----------------------------------------------
Three investment portfolios, designed to pursue a variety of investment
objectives:
Westwood Equity Fund seeks capital appreciation,
Westwood Balanced Fund seeks income and growth, and
Westwood Intermediate Bond Fund seeks current income.
(No-load)
Portfolio Managers: Susan Byrne & Pat Fraze
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. Portfolio Manager: Ronald Eaker
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. (No-load)
Team Manager: Mario J. Gabelli, CFA
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. (No-load)
Portfolio Manager: Hart Woodson
GABELLI GLOBAL INTERACTIVE COUCH POTATO [Trademark][Copyright] 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. (No-load)
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. (No-load)
Portfolio Manager: Caesar Bryan
GABELLI INTERNATIONAL GROWTH FUND -------------------------------------
Invests in a diversified portfolio of equity securities of companies
outside of the U.S. Seeks to achieve international diversification and
capital appreciation, and to serve as a complement to a domestic
investment portfolio. (No-load)
Portfolio Manager: Caesar Bryan
The five funds above invest in foreign securities which involves
risks not ordinarily associated with investments in domestic issues,
including currency fluctuation, economic and political risks.
To request a prospectus, call
1-800-GABELLI (1-800-422-3554)
Or, visit our Internet homepage at:
http://www.gabelli.com/gabelli
The prospectus(es) contain more complete information, including fees and
expenses, and should be read carefully prior to investing.
<PAGE>
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 TRUSTEES
Mario J. Gabelli, CFA Karl Otto Pohl
Chairman 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
Bruce N. Alpert Howard F. Ward, CFA
President and Treasurer Portfolio Manager
James E. McKee Donald C. Jenkins, CFA
Secretary 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.
- -------------------------------------------------------------------------------
THE [PICTURE OF MARIO J. GABELLI]
GABELLI
GROWTH
FUND
SEMI-ANNUAL REPORT
JUNE 30, 1995
