<PAGE>
THE GABELLI GROWTH FUND
FIRST QUARTER REPORT - MARCH 31, 1996 [PHOTO]
HOWARD F. WARD
TO OUR SHAREHOLDERS:
The first quarter of 1996 did not fail to provide entertainment. No sooner
had the band finished playing "Auld Lang Syne", than the Republicans and
Democrats resumed their high octane sparring over the budget. This Battle Royale
of our elected heavyweights was predictably unproductive and the stalemate - and
stale it is - continues to this writing.
Making her presence felt, Mother Nature pounded us with record setting
snows to the point where even those who plow snow for profit couldn't take it
anymore. But bad weather can't keep a good economy down - witness the addition
of 705,000 jobs to the non-farm payrolls in February. This news hit the
financial markets like an avalanche as the Dow Jones Industrial Average
snowballed 171 points in a single session (March 8, 1996) while bonds
experienced their largest single-day decline since Iraq invaded Kuwait in August
of 1990. Nevertheless, stocks recovered quickly and posted yet another solid
quarter.
INVESTMENT RESULTS
For the three months ended March 31, 1996, The Gabelli Growth Fund's total
return was 7.2%, outperforming the unmanaged Standard and Poor's 500 Index's
return of 5.4%. For the 12 months ended March 31, 1996 the Fund returned 34.2%,
vs. 32.1% for the S&P 500. Our returns rank in the top quartile of all growth
funds according to Lipper Analytical Services for the 12 month period ended
March 31, 1996.
For the five years ended March 31, 1996, the Fund had an average annual
return of 13.9% which compares to an average annual return of 14.7% for the S&P
500 over the same period. The Fund's total return since inception on April 10,
1987 was 289.9%, which equates to an average annual return of 16.4%. This
compares favorably to a total return of 179.5% for the S&P 500 over the same
period, which is equivalent to an average annual return of 12.1%. Our
shareholders now total 41,008 and total net assets are $576.3 million as of
March 31, 1996.
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT RESULTS (a)
- ----------------------------------------------------------------------------------------------------
QUARTER
------------------------------------------
1ST 2ND 3RD 4TH YEAR
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1996: Net Asset Value ............. $23.75 -- -- -- --
Total Return ................ 7.2% -- -- -- --
- ----------------------------------------------------------------------------------------------------
1995: Net Asset Value ............. $20.86 $22.99 $24.91 $22.16 $22.16
Total Return ................ 6.0% 10.2% 8.4% 4.9% 32.7%
- ----------------------------------------------------------------------------------------------------
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 - March 31, 1996 (a)
1 Year .................................... 34.2%
5 Year .................................... 13.9%
Life of Fund(b) ........................... 16.4%
<TABLE>
<CAPTION>
DIVIDEND HISTORY
- --------------------------------------------------------
Payment (EX) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
<S> <C> <C>
December 29, 1995 $3.960 $22.16
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
<FN>
(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.
</TABLE>
- --------------------------------------------------------------------------------
ECONOMIC BACKGROUND
While the jury remains out, economic growth appeared to slow in the first
quarter compared to 1995, which in turn was slower than 1994. The only issue
left to be determined is by how much. We would not be surprised to see weak
results given the fiscal policy straitjacket, the severe winter weather, the
General Motors strike and a growing list of workers who have been downsized out
of a paycheck. Additionally, Europe is weak, particularly Germany but also
France. As for Japan, there is more hope than substance as far as an improving
economy is concerned. Profit expectations appear to be moderating, especially
among technology companies. Inventory needs to be worked down for the PC
2
<PAGE>
makers, as well as for most semiconductor vendors and cellular phone suppliers.
True, the February payroll data looked strong. It is equally true that averaging
January and February, and comparing this average to last year's same two month
period turns the number into a non-event. As of this writing, the robust
February payroll data has not been confirmed by other series, but it poses a
challenge to the notion of a sluggish economy. The financial markets were
pleased with the reappointment of Alan Greenspan as Chairman of the Federal
Reserve Board given his track record during his first two terms. In the
aggregate, inflation remains unthreatening, running at a sub 3% pace. The
financial markets are concerned, however, about the recent rise in prices for
agricultural commodities and oil.
FINANCIAL MARKET OBSERVATIONS
Equity mutual funds continue to benefit from positive and significant cash
flow, much of it from self-directed retirement plans. This fuel has become
critical to sustaining the Bull market's upward trajectory. So far, investor
interest in equity funds has shown no signs of abating. Both "growth" and
"cyclical" issues performed well during the quarter with "cyclical" issues doing
the best in general. Some of last year's darlings in the technology sector,
particularly the Internet stocks, fell hard when AT&T Corp. (T - $61.25 - NYSE)
gave them a wake-up call, offering to provide similar services at significantly
lower prices. MCI Communications Corp. (MCIC - $30.625 - NASDAQ) followed suit
and the rout was on.
Boeing Co. (BA - $86.625 - NYSE), our nation's largest exporter, made
headlines with large orders for aircraft from a diverse group of customers
including Japan Airlines, Malaysian Airlines, Singapore Airlines and Saudia.
Consequently, Boeing increased its production schedule, confirming our bullish
posture on the commercial aircraft industry.
Citicorp (CCI - $80.00 - NYSE) was also in the news by increasing its
dividend by 50% (to a new record) and adding $1.5 billion to the existing $3.0
billion share buyback authorization. This bank has turned around and its global
consumer brand strategy is delivering good results.
The International Business Machines Corporation (IBM - $111.125 - NYSE)
revival continues. Its share price rose from $91 to $111 during the quarter, an
advance of 22%. The company's diverse business mix is a source of financial
strength and its energy efficient CMOS mainframes are in strong demand. With $8
billion in "free cash flow" and earnings approaching $13 per share this year,
the stock remains undervalued. We are impressed with IBM's improving fortunes
under Lou Gerstner's command.
This was a bad quarter for bond holders, with the 30 year Treasury losing
approximately 8.3% of its value. While we do not invest in bonds, a continuation
of this trend would be a negative for stocks. At this point, we believe
long-term Treasury yields will peak around 7%. However, we will monitor this
trend closely.
3
<PAGE>
Mergers and acquisitions continue to play an important role in shrinking
the equity supply, assisting the market's advance. We can only assume that this
trend will continue.
LOOKING AHEAD
Promises, promises. That's what we'll get a lot of from Washington during
this election year. Some of these promises, especially regarding tax policy,
could influence the stock market. While a reduction in the capital gains tax
rate increases the rate of return on equities and is a long-term positive, it
may be a short-term negative as low cost holdings are sold to take advantage of
a lower rate, should it occur. The stock market has largely ignored foreign
affairs since Operation Desert Storm ended in 1991. It appears it would require
a major foreign development to derail the stock market. While nothing is likely
to surface to disrupt the current calm, we are keeping an eye on China's recent
saber rattling directed at Taiwan. Anything that jeopardizes U.S. business
interests with China is a major foreign development, at least for multinational
corporations currently benefiting from China's tremendous growth. China must be
watched closely.
Our earnings-driven investment approach will continue to favor companies
positioned to capitalize on economic globalization, the technology revolution
and the aging of the developed world's population. We encourage you to view The
Gabelli Growth Fund as a long-term investment in a diversified portfolio of
America's finest established growth companies.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our 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.
First Data Corporation (FDC - $70.50 - NYSE) is a leading information processing
company. The company benefits from the increase in credit card usage, as it
processes credit and debit card transactions for over 1,400 financial
institutions. In fact, the company processes roughly one-third of all domestic
credit card transactions. The company is also a leader in funds transfer
services as well as in processing information for the mutual fund and healthcare
industries. First Data's earnings per share are likely to increase approximately
20% this year.
General Electric Company (GE - $77.875 - NYSE), with sales expected to top $46
billion in 1996, stands among the world's largest industrial concerns. As a
company with a global footprint, GE is a primary beneficiary of higher levels of
trade overall and growth in the emerging markets in particular. 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 a leader in home appliances and industrial power systems.
Earnings and dividends should hit record levels in 1996 and the shares should
continue to benefit from ongoing share buy backs.
4
<PAGE>
Gillette Company (G - $51.75 - NYSE), along with Coca Cola, is the other premier
example of a consumer company that is well-situated to exploit opportunities on
a global basis. The company is aggressively pursuing foreign markets and
developing an impressive number of new products. Earnings should advance by
more than 15% this year, reflecting strong results both domestically and
abroad.
Home Depot, Inc. (HD - $47.875 - NYSE) is the undisputed leader of the home
improvement warehouse retailers. Led by Bernie Marcus, the company's founder,
Home Depot is testing new store formats which appeal to new markets (farming
equipment and upscale furnishings) providing incremental growth to what remains
a terrific franchise in do-it-yourself home hardware and supplies. Geographic
expansion continues to drive square footage growth as the company increases its
presence in the Midwest and continues to penetrate the Northeast. Higher lumber
prices and housing turnover point to a reacceleration of earnings growth this
year.
Mellon Bank Corporation (MEL - $55.125 - NYSE), with acquisitions in recent
years of Dreyfus Corporation and The Boston Company, has become a powerhouse in
money management services. We believe the rising contribution to earnings from
predictable fee sources will enhance the company's valuation. We expect low
double-digit growth in earnings and a continuation of the company's share
repurchase program this year.
Merck & Co., Inc. (MRK - $62.25 - NYSE) is one of the world's largest healthcare
companies and a leader in pharmaceutical research and development. Merck
operates the largest of the Pharmacy Benefit Managers, an area that has produced
exceptional growth. Merck's research effort has produced a potential new
blockbuster drug in Fosamax, for treatment of osteoporosis. Earnings are likely
to rise at a low double-digit rate this year. We expect the company to use some
of its significant free cash flow to buy back stock and increase the dividend.
Nabisco Holdings Corp. (NA - $32.75 - NYSE) is the nation's largest manufacturer
of cookies and crackers and one of the biggest food companies in the world. Some
of its major brands include: Oreo, Chips Ahoy!, Newton, Snackwell, Ritz, Grey
Poupon, Milkbone and Life Savers. While foreign operations currently represent
about 25% of sales, we see a giant opportunity for Nabisco in emerging markets.
Management is moving vigorously to capitalize on these and other global
opportunities.
Procter & Gamble Company (PG - $84.75 - NYSE) needs little introduction. As the
leading producer of soaps, detergents and toiletries, its products are in
virtually every home. The company is aggressively moving to expand into new
markets abroad, including China. Management has successfully battled the private
label competition by cutting prices on such established brands as Tide, Cheer,
Bold, Crest, Ivory, Pampers and others. Business looks bright on all fronts as
the Cincinnati-based marketing machine continues its dominance.
5
<PAGE>
State Street Boston Corporation (STT - $50.00 - NYSE) is the nation's largest
custodian of mutual fund assets. Total assets under custody are approximately
$2.3 trillion. The company is also one of the nation's largest asset managers
with a strong presence in passive management products for institutional
investors. Management is focused on expanding the company's global presence and
continuously updating information systems technology to gain competitive
advantages. We view State Street Boston as an excellent vehicle to gain exposure
to the ongoing growth in institutional funds management and custody.
United Technologies (UTX - $112.25 - NYSE) is a manufacturing conglomerate
primarily serving the aerospace, automotive and construction markets. The
company is best known for its Pratt and Whitney jet engines, Carrier air
conditioners and Otis elevators. The company is benefiting from the upturn in
the commercial aircraft market and good demand for construction-related products
(elevators and air conditioners) domestically and abroad. Earnings per share
should grow at a low double-digit rate this year.
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
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. An investment in The Gabelli U.S. Treasury Money Market Fund is
neither insured nor guaranteed by the U.S. Government. There can be no assurance
that the Fund will maintain a stable $1 per share net asset value. 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.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, quarterly reports, closing prices, IRAs, 401(k)s and other
current news. You can also send us e-mail at [email protected].
6
<PAGE>
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, CFA /s/ DONALD C. JENKINS, CFA
- ----------------------- --------------------------
HOWARD F. WARD, CFA DONALD C. JENKINS, CFA
Portfolio Manager Associate Portfolio Manager
April 19, 1996
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
MARCH 31, 1996
--------------
General Electric Company Rockwell International Corp.
First Data Corporation Coca-Cola Company
Mellon Bank Corporation United Technologies
Molex, Inc. Allied-Signal Inc.
State Street Boston Corp. Gillette Company
- --------------------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
7
<PAGE>
THE GABELLI GROWTH FUND
<TABLE>
PORTFOLIO OF INVESTMENTS -- MARCH 31, 1996 (UNAUDITED)
================================================================================
<CAPTION>
MARKET
SHARES VALUE (b)
- ---------- -----------
<S> <C> <C>
COMMON STOCKS -- 95.8%
ADVERTISING -- 1.1%
127,700 Interpublic Group of
Companies......................................... $ 6,506,325
------------
AEROSPACE -- 10.1%
164,600 Allied-Signal Inc. ................................. 9,731,975
61,000 Boeing Co. ......................................... 5,284,125
31,000 Goodrich (B.F.) Company............................. 2,464,500
100,000 Loral Corporation................................... 4,900,000
65,400 Raytheon Co. ....................................... 3,351,750
163,000 Rockwell International Corp. ....................... 9,596,625
86,000 Sundstrand Corp. ................................... 3,504,500
52,000 Textron Inc. ....................................... 4,160,000
67,000 TRW, Inc. .......................................... 5,971,375
82,000 United Technologies................................. 9,204,500
------------
58,169,350
------------
AIRLINES -- 0.6%
36,000 AMR Corporation +................................... 3,222,000
------------
BROADCASTING -- 2.0%
44,000 American Radio Systems Corporation +................ 1,485,000
106,000 Infinity Broadcasting Corp., Class A +.............. 4,597,750
36,000 U.S. Satellite Broadcasting Co., Inc. +............. 1,179,000
225,000 Westinghouse Electric Corp. ........................ 4,331,250
------------
11,593,000
------------
BUILDING AND CONSTRUCTION -- 1.4%
61,000 Fluor Corporation................................... 4,163,250
86,000 Foster Wheeler Corporation.......................... 3,816,250
------------
7,979,500
------------
BUSINESS SERVICES -- 7.5%
143,000 Automatic Data Processing, Inc. .................... 5,630,625
115,500 Ceridian Corporation +.............................. 4,966,500
183,900 First Data Corporation.............................. 12,964,950
133,000 General Motors Corporation, Class E................. 7,581,000
119,000 Honeywell, Inc. .................................... 6,574,750
90,000 Reuters Holdings plc, Class B, ADR.................. 5,861,250
------------
43,579,075
------------
CABLE -- 1.4%
48,700 Cablevision Systems Corporation, Class A +.......... 2,800,250
120,000 Cox Communications Inc., Class A, New +............. 2,625,000
140,000 Tele-Communications, Inc., Class A +................ 2,598,750
------------
8,024,000
------------
CONGLOMERATES -- 3.9%
191,000 General Electric Company............................ 14,874,125
119,000 General Motors Corporation, Class H................. 7,526,750
------------
22,400,875
------------
<CAPTION>
MARKET
SHARES VALUE (B)
- ---------- -----------
<S> <C> <C>
CONSUMER PRODUCTS -- 12.0%
115,000 Coca-Cola Company................................... $ 9,501,875
80,000 Duracell International Inc. ........................ 3,970,000
18,800 Estee Lauder Companies.............................. 672,100
6,000 First Brands Corporation............................ 168,000
173,000 Gillette Company.................................... 8,952,750
58,000 Kimberly-Clark Corp. ............................... 4,321,000
247,000 Nabisco Holdings Corp., Class A..................... 8,089,250
130,000 PepsiCo, Inc........................................ 8,222,500
77,000 Philip Morris Companies Inc. ....................... 6,756,750
90,000 Procter & Gamble Company............................ 7,627,500
52,000 Ralston Purina Group................................ 3,477,500
84,872 Tootsie Roll Industries, Inc. ...................... 3,097,828
74,000 Wrigley (Wm.) Jr. Company........................... 4,338,250
------------
69,195,303
------------
ENTERTAINMENT -- 2.7%
72,500 Time Warner Inc. ................................... 2,963,438
18,000 Viacom Inc., Class A +.............................. 738,000
119,000 Viacom Inc., Class B +.............................. 5,012,875
112,000 Walt Disney Company................................. 7,154,000
------------
15,868,313
------------
FINANCIAL SERVICES -- 18.2%
129,000 American Express Company............................ 6,369,375
83,000 American International Group, Inc. ................. 7,770,875
23,500 Amerin Corp. +...................................... 640,375
117,000 BankAmerica Corp. .................................. 9,067,500
129,000 Barnett Banks Inc. ................................. 8,030,250
99,000 Citicorp............................................ 7,920,000
80,000 Federal National Mortgage Association............... 2,550,000
33,000 First Interstate Bancorp............................ 5,725,500
101,000 First Tennessee National Corporation................ 3,333,000
46,000 General Re Corporation.............................. 6,704,500
44,800 Hartford Steam Boiler Company....................... 2,268,000
26,000 Household International Inc. ....................... 1,748,500
99,000 H&R Block Inc. ..................................... 3,576,375
47,000 Marsh & McLennan Companies.......................... 4,365,125
187,000 Mellon Bank Corporation............................. 10,308,375
37,000 Morgan (J.P.) & Co.Incorporated..................... 3,071,000
169,000 Norwest Corporation................................. 6,210,750
201,400 State Street Boston Corporation..................... 10,070,000
10,000 SunTrust Banks, Inc. ............................... 700,000
81,000 T. Rowe Price Associates Inc. ...................... 4,293,000
------------
104,722,500
------------
HEALTH CARE -- 11.6%
90,000 Abbott Laboratories................................. 3,667,500
85,000 Amgen Inc. +........................................ 4,940,625
31,000 Astra AB, ADR....................................... 1,441,500
53,000 Baxter International Inc. .......................... 2,398,250
12,000 Biogen, Inc. +...................................... 714,000
56,700 Bristol-Myers Squibb Co. ........................... 4,854,938
125,000 Chirex Inc. +....................................... 1,281,250
1,000 Chiron Corporation +................................ 98,250
64,000 Elan Corp. plc, ADR +............................... 4,112,000
2,000 Genzyme Corp. +..................................... 110,000
88,000 IVAX Corp. ......................................... 2,277,000
71,000 Johnson & Johnson................................... 6,549,750
</TABLE>
8
<PAGE>
THE GABELLI GROWTH FUND
<TABLE>
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 1996 (UNAUDITED)
================================================================================
<CAPTION>
MARKET
SHARES VALUE (b)
- ---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTH CARE (CONTINUED)
113,000 Lilly (Eli) & Co. ............................... $ 7,345,000
135,000 Merck & Co., Inc. ............................... 8,403,750
84,000 Pfizer Inc. ..................................... 5,628,000
116,000 Pharmacia & Upjohn Inc. ......................... 4,625,500
103,000 Schering-Plough Corporation...................... 5,986,875
42,000 SmithKline Beecham plc (units), ADR.............. 2,163,000
------------
66,597,188
------------
HOTELS/CASINOS -- 0.2%
24,200 HFS Inc. +....................................... 1,176,725
------------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 1.7%
73,000 Amphenol Corporation, Class A +.................. 1,706,375
59,000 Harnischfeger Industries Inc. ................... 2,286,250
89,000 Illinois Tool Works, Inc. ....................... 5,751,625
2,000 Sherwin-Williams Company......................... 88,750
------------
9,833,000
------------
METALS AND MINING -- 0.4%
35,800 Newmont Mining Corporation....................... 2,027,175
------------
PUBLISHING -- 1.6%
41,000 Gannett Inc...................................... 2,757,250
50,000 K-III Communications Corp. +..................... 581,250
90,000 Tribune Co. ..................................... 5,928,750
------------
9,267,250
------------
RESTAURANTS -- 0.8%
102,000 McDonald's Corporation........................... 4,896,000
------------
RETAIL -- 4.1%
183,906 Home Depot, Inc. ................................ 8,804,500
190,000 Mattel, Inc. .................................... 5,153,750
285,000 Office Depot Inc. +.............................. 5,593,125
130,000 Walgreen Co. .................................... 4,241,250
------------
23,792,625
------------
TECHNOLOGY -- 11.0
67,000 AVX Corporation.................................. 1,465,625
52,500 Bay Networks Inc. +.............................. 1,614,375
44,000 Cisco Systems +.................................. 2,040,500
80,000 Computer Associates International, Inc. ......... 5,730,000
53,000 Digital Equipment Corp. +........................ 2,921,625
57,000 Hewlett-Packard Co. ............................. 5,358,000
<CAPTION>
MARKET
SHARES VALUE (b)
- ---------- -----------
<S> <C> <C>
5,000 Intel Corporation................................ $ 284,375
76,500 International Business Machines Corporation...... 8,501,062
35,000 Microsoft Corporation +.......................... 3,609,375
49,500 Molex Incorporated............................... 1,726,312
249,062 Molex Incorporated, Class A...................... 7,969,984
45,000 Oracle Systems Corp. +........................... 2,120,625
73,000 Silicon Graphics Inc. +.......................... 1,825,000
1,000 Sterling Commerce Inc. +......................... 30,750
127,600 Sterling Software, Inc. +........................ 8,995,800
126,000 Sun Microsystems Inc. +.......................... 5,512,500
27,500 U.S. Robotics.................................... 3,554,375
------------
63,260,283
------------
TELECOMMUNICATIONS -- 2.8%
54,000 ADC Telecommunications Inc. +.................... 1,863,000
76,900 AirTouch Communications Inc. +................... 2,393,512
112,900 AT&T Corp. ...................................... 6,915,125
170,000 Ericsson (L.M.) Telephone Company, Class B, ADR.. 3,633,750
25,000 Globalstar Telecommunications +.................. 1,325,000
------------
16,130,387
------------
TRANSPORTATION -- 0.7%
23,000 Burlington Northern Santa Fe Corp. .............. 1,888,875
32,000 CSX Corporation.................................. 1,460,000
14,000 Kansas City Southern Industries Inc. ............ 651,000
------------
3,999,875
------------
TOTAL COMMON STOCKS........................................... 552,240,749
------------
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<S> <C> <C>
U.S. TREASURY BILLS -- 5.2%
$29,669,000 5.15% to 5.20% ++ due 04/18/1996-05/02/1996...... 29,570,088
------------
TOTAL INVESTMENTS
(COST $451,367,793)(a).............................. 101.0% 581,810,837
OTHER ASSETS AND LIABILITIES (NET).................... (1.0) (5,548,575)
----- ------------
NET ASSETS APPLICABLE TO 24,262,961
SHARES OF BENEFICIAL INTEREST OUTSTANDING........... 100.0% $576,262,262
===== ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE.......................... $ 23.75
============
<FN>
- ----------------
(a) Aggregate cost for Federal tax purposes was $451,661,433. Net unrealized appreciation for Federal tax purposes was
$130,149,404 (gross unrealized appreciation was $135,739,452 and gross unrealized depreciation was $5,590,048).
(b) Securities traded on a national securities exchange are valued at the last sale price as of the close of business on the day
the securities are being valued. Securities for which no sale was reported on that day and over-the-counter securities are
valued at the mean between the last reported bid and asked prices. U.S. Government obligations and other debt instruments
with 60 days or less to maturity are valued at amortized cost which approximates market value. Short-term investments with
greater than 60 days to maturity are valued at the highest independent bid price as quoted by market makers.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR -- American Depositary Receipt
</TABLE>
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<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/WESTWOOD FUNDS --------------------------------------------------------
Three investment portfolios, designed to pursue a variety of investment
objectives: Equity Fund seeks capital appreciation, Balanced Fund seeks income
and growth, and Intermediate Bond Fund seeks current income. (No-load)
Portfolio Managers: Susan Byrne & Pat Fraze
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[Registered Trademark] 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.
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
To request a prospectus, call 1-800-GABELLI (1-800-422-3554)
Or, visit our Internet homepage at: http://www.gabelli.com
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]
FAX: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(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.
Anthony R. Pustorino
Felix J. Christiana Certified Public Accountant
Former Senior Professor, Pace University
Vice President
Dollar Dry Dock Savings Bank Anthony Torna
Herzog, Heine & Geduld, Inc.
Anthony J. Colavita
Attorney-at-Law Anthonie C. van Ekris
Anthony J. Colavita, P.C. Managing Director
BALMAC International, Inc.
James P. Conn
Managing Director And Salvatore J. Zizza
Chief Investment Officer Chairman, Chief Executive Officer
Financial Security Assurance The Lehigh Group, Inc.
Dugald A. Fletcher
President
Fletcher & Company, 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.
- --------------------------------------------------------------------------------
[PHOTO]
THE
GABELLI
GROWTH
FUND
FIRST QUARTER REPORT
MARCH 31, 1996
