GABELLI GROWTH FUND
N-30B-2, 1996-11-26
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                                                     [Photo of Mario J. Gabelli]


The
Gabelli
Growth
Fund


                                                            THIRD QUARTER REPORT
                                                              SEPTEMBER 30, 1996

<PAGE>

The Gabelli Growth Fund                                [Photo of Howard F. Ward]
Third Quarter Report - September 30, 1996                         

To Our Shareholders:

     While the quarter was ultimately a rewarding one for the stock market and
our shareholders, it did not start that way. The market's bulls seemed to go on
vacation in July. Of course, after rising close to 50% during the previous 18
months, the bulls were deserving of a rest. We suggested such in our June
semi-annual report.

     Nonetheless, while the bulls recharged their batteries in July, the Dow
Jones Industrial Average dropped about 10% and the NASDAQ Composite declined
roughly 20%. In fact, the NASDAQ Composite experienced its worst one day point
loss since October of 1987 and its worst one day percentage drop since 1991. And
then, just when the bears thought it was safe to go short with abandon, the
bulls returned from vacation and buried them in a sea of cash. In retrospect,
July was a classic bear trap. Yes, Mr. Market looks like a prize fighter that
refuses to break. He keeps coming at you, wearing you down, until you throw in
the towel and add to your equity holdings.

     The psychology of investing is such that investors are generally more
comfortable adding to equities when the market is rising and selling when it is
falling. The stock market is one of those rare exceptions to the law of supply
and demand. With stocks, demand seems to rise as prices go up and not the other
way around. Therefore, it was impressive to see how quickly July's tumble was
arrested and reversed. Key to the reversal was news that payroll gains in July
were lower than expected, offsetting June's data which had pointed to an economy
growing too fast to keep interest rates from rising further.

     The debate over the strength of the economy will continue to rage
throughout the autumn and winter. We don't know how it will turn out. It is not
a critical element in our stock selection process. What is critical is paying a
rational price for leading growth companies capable of growing their earnings
regardless of whether the economy is strong or weak. That is what makes growth
companies different. They are not hostage to the business cycle.

<PAGE>

Investment Results (a)
- --------------------------------------------------------------------------------
                                        Quarter
                       ------------------------------------------
                         1st         2nd          3rd       4th       Year
                         ---         ---          ---       ---       ----
1996: Net Asset Value  $23.75      $24.34       $25.35       --          --
      Total Return ..     7.2%        2.5%         4.1%      --          --
  ----------------------------------------------------------------------------
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)
  ----------------------------------------------------------------------------

- -----------------------------------------------
Average Annual Returns - September 30, 1996 (a)
- -----------------------------------------------
  1 Year ......................   20.0%
  5 Year ......................   13.8%
  Life of Fund (b) ............   16.2%
- -----------------------------------------------

                  Dividend History
- ------------------------------------------------------
Payment (ex) Date    Rate Per Share Reinvestment Price
- ------------------- --------------- ------------------
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

(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.

- --------------------------------------------------------------------------------

     For the three months ended September 30, 1996, The Gabelli Growth Fund's
total return was 4.1%. This compares favorably to the unmanaged Standard and
Poor's 500 Index's return of 3.1% over the same period. For the first nine
months of 1996, the Fund's total return was 14.4% versus 13.5% for the S&P 500.
For the 12 months ended September 30, 1996 the Fund returned 20.0% vs. 20.3% for
the S&P 500 Index.

     For the five years ended September 30, 1996, the Fund had an average annual
return of 13.8%, which compares to an average annual return of 15.2% for the S&P
500 over the same period. The Fund's total return since inception on April 10,
1987 was 316.2%, which equates to an average annual return of 16.2%. This
compares favorably to a total return of 201.1% for the S&P 500 over the same
period, which is equivalent to an average annual return of 12.3%. Our
shareholders total 39,898 and net assets are $605.4 million, as of September 30,
1996.


                                       2

<PAGE>

Economic Background

     We believe the rate of real Gross Domestic Product growth peaked in the
second quarter at 4.8%. Growth in the second half of the year is likely to
approximate 3.0%, or less. The rate of growth in corporate profits will
decelerate as the economy cools and the frequency of earnings disappointments
will likely increase.

     Consumer spending has softened as debt levels have risen and employment
gains moderated. The unemployment rate reached a six-year low in August, when it
fell to 5.1%. This should mark the low point in the unemployment rate for this
year. It's too bad no one tracks global unemployment rates. Such a statistic, if
it existed, just might alleviate concerns about growing wage rate pressures. In
a global economy, it is the global rate of unemployment that drives overall wage
rates at the margin. As more production moves offshore, job security becomes
more critical than wage rate increases for U.S. workers.

     Recently we have seen a softening in retail sales as well as a slowdown in
automobile and housing turnover. Companies are finding it difficult to pass
along price increases in this environment. Therefore, we are not lying awake at
night fretting about inflation. We believe Federal Reserve Board Chairman
Greenspan was correct in not tightening monetary policy in September. The
consensus of pundits that the Fed would raise short-term rates was wrong.
Incidentally, as quotable as they are, there is no chance that a Fed Governor
would jeopardize the employment prospects of Jay Leno, David Letterman or Ted
Koppel. How about a Fed Governor Chat Room on the Internet?

     Summer box office receipts at the nation's movie theaters were uninspiring
this year. The collective works of Hollywood's screenwriters and producers fell
short of anything approaching mega-hit status. Of course, theater attendance
(and the economy overall) must have suffered somewhat from couch potato interest
in the Olympics (pageantry, sports and terrorism), the political conventions
(baby fests, apple pie and frightening science fiction) and the tragic mystery
surrounding Paris bound TWA flight 800. Others may have been plugged into Saddam
Hussein's sequel - not as big a hit as the original - or Tiger Woods' coming of
age. Indeed, it was a summer with plenty of reasons for consumers to stay at
home and rein in their spending.

Financial Market Observations

     The public continues to direct investment dollars into equity mutual funds.
While average monthly inflows have slowed from the record setting pace of the
first half of the year, they remain substantial. These flows have been offset
somewhat with new stock issuances.

     Deals continue to surface. During the third quarter, the Fund benefited
from the proposed Gillette acquisition of Duracell (we own shares of both
companies and each stock rose on the news) as well as the proposed Staples
acquisition of Office Depot (we own shares of the latter, not the former). Other
deals where we own shares of the acquirer include Loral's purchase of AT&T's
satellite distribution business, Hughes Electronics' purchase of PanAmSat,
General Re's acquisition of National Re and Time Warner's takeover of Turner
Broadcasting. All of these acquisitions leverage the buyer's primary strengths.

     This was a quarter in which investors backed away from the more
economically sensitive issues in 


                                       3

<PAGE>

favor of companies with good earnings visibility independent of the economic
environment. We benefited from this rotation as well, as such growth companies
represent our core holdings. Top performing holdings included Duracell (+49%),
Intel (+30%), Computer Associates (+26%), IBM (+26%), Wrigley (+19%), Amgen
(+17%) and Norwest (+17%).

Looking Ahead

     With the stock market in record-high territory, we must become increasingly
selective and valuation conscious. Financial services companies continue to
represent our largest sector exposure, accounting for close to 20% of portfolio
assets. We hold positions in banking industry leaders like Wells Fargo, Citicorp
and State Street Boston Corporation and top tier insurance companies such as
American International Group and General Re. We find these stocks fundamentally
undervalued and expect them to do well in a slowing economic environment.

     Additionally, we favor companies with global consumer product brands such
as Gillette, Procter & Gamble, McDonald's, Coca-Cola and PepsiCo. With 95% of
the world's population residing outside the U.S., the foreign market potential
is extraordinary for these companies. Investments in food, beverages, household
products and tobacco represent about 16% of the portfolio's assets.

     Other industries in which we have material investments include aerospace
(Allied-Signal, Honeywell, Sundstrand, United Technologies, Boeing, and General
Electric), health care (Merck, Amgen, Johnson & Johnson, Eli Lilly, Pfizer,
Schering-Plough and Abbott Labs), information technology (First Data, Electronic
Data Systems, Computer Science Corp.), media (Disney, Tribune, Gannett) and
technology (Intel, Microsoft, Sun Microsystems, IBM, Computer Associates and
Hewlett-Packard).

     The stock market is not cheap. It is not a bargain. However, with 3%
inflation, relatively low interest rates and growing profits, the market's
valuation is defensible. Corporate America is in good condition and is, for the
most part, prosperous. New markets are promising and technology is allowing us
to perform at new levels of productivity. Without question, the course of
interest rates will influence stock prices in the months ahead and our
expectation of somewhat lower rates over the balance of this year may not prove
correct. We continue to believe the Fund is well-positioned in a diversified
portfolio of America's finest established growth companies and we once again
encourage you to view The Gabelli Growth Fund as a long-term investment vehicle.

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.

Electronic Data Systems (EDS - $61.375 - NYSE) is the largest provider of
information system outsourcing services. The company is now independent from
General Motors, allowing it to pursue business with companies that compete with
GM. Current business trends are strong. The outsourcing of information system
management is a growth business and EDS is the premier provider of such services
on a global basis.


                                       4

<PAGE>

First Data Corporation (FDC - $81.625 - 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. Credit cards are presently used in one of every five
transactions. We expect credit cards to become even more widely used in the
future. The company is also a leader in funds transfer services as well as in
processing information for the mutual fund and health care industries. First
Data's earnings per share are likely to increase approximately 20% this year.

General Electric Company (GE - $91.00 - 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 its 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 buybacks.

Gillette Company (G - $72.125 - NYSE), along with Coca Cola, is a 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. We
view its pending acquisition of Duracell positively as it should leverage the
company's strengths.

Home Depot, Inc. (HD - $56.875 - 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 re-acceleration of earnings growth this
year.

Mellon Bank Corporation (MEL - $59.25 - NYSE), with the 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 - $70.375 - NYSE) is one of the world's largest health
care 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 its dividend.


                                       5

<PAGE>

Nabisco Holdings Corp. (NA - $31.625 - 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 one-fourth of sales, we see a giant opportunity for
Nabisco in emerging markets. Management is moving vigorously to capitalize on
these and other global opportunities. The company is also moving aggressively to
cut costs.

State Street Boston Corporation (STT - $57.375 - 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.

Wells Fargo & Company (WFC - $260.00 - NYSE) is a holding company for The Wells
Fargo Bank, one of the nation's largest banking organizations. Wells Fargo
acquired First Interstate Bancorp. in April 1996, further extending its market
share in the West. The management of Wells Fargo is among the best in the
business. The company is routinely among the most profitable of banking groups.
We expect the new combined company to undergo significant cost cutting, freeing
up capital that will be used to buy back stock. With much of its business
California-based, the bank should benefit from an improving California economy
over the balance of 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.


                                       6

<PAGE>

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].

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.

                                       Sincerely,


      /s/ Howard F. Ward                    /s/ Donald C. Jenkins
      Howard F. Ward, CFA                   Donald C. Jenkins, CFA
      Portfolio Manager                     Associate Portfolio Manager


 November 1, 1996


- --------------------------------------------------------------------------------

                                Top Ten Holdings
                               September 30, 1996

 Home Depot, Inc.                              State Street Boston Corporation
 First Data Corporation                        Mellon Bank Corp.              
 General Electric Company                      Molex Inc.                     
 Wells Fargo & Company                         Nabisco Holdings Corp.         
 Gillette Company                              Electronic Data Systems Corp.  

- --------------------------------------------------------------------------------

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
Portfolio of Investments -- September 30, 1996 (Unaudited)
================================================================================

                                                                   Market
 Shares                                                          Value (b)
 ------                                                          ---------
          COMMON STOCKS -- 97.5%
          
          Advertising -- 1.0%
132,700   Interpublic Group of Companies                       $ 6,270,075
                                                               -----------
          Aerospace -- 9.2%
143,600   Allied-Signal Inc. ................................    9,459,650
 55,000   Boeing Co. ........................................    5,197,500
113,000   Honeywell, Inc. ...................................    7,133,125
 96,400   Lockheed Martin Corp. .............................    8,688,050
 84,400   Raytheon Co. ......................................    4,694,750
181,200   Sundstrand Corp. ..................................    7,066,800
 62,000   Textron Inc. ......................................    5,270,000
 67,000   United Technologies ...............................    8,048,375
                                                               -----------
                                                                55,558,250
                                                               -----------
          Broadcasting -- 2.1%
 46,000   American Radio Systems Corporation+ ...............    1,713,500
157,000   Infinity Broadcasting Corp., Class A+ .............    4,945,500
 60,000   U.S. Satellite Broadcasting Co., Inc.+ ............    1,395,000
235,000   Westinghouse Electric Corp. .......................    4,376,875
                                                               -----------
                                                                12,430,875
                                                               -----------
          Building and Construction -- 1.5%
 89,000   Fluor Corporation. ................................    5,473,500
 80,000   Foster Wheeler Corporation ........................    3,500,000
                                                               -----------
                                                                 8,973,500
                                                               -----------
          Business Services -- 10.2%
188,000   Automatic Data Processing, Inc. ...................    8,201,500
151,500   Ceridian Corporation+  ............................    7,575,000
 93,000   Computer Sciences Corp.+  .........................    7,149,375
161,000   Electronic Data Systems Corp. .....................    9,881,375
251,900   First Data Corporation  ...........................   20,561,338
 40,000   Reuters Holdings plc, Class B, ADR ................    2,770,000
174,000   Sysco Corporation .................................    5,850,750
                                                               -----------
                                                                61,989,338
                                                               -----------
          Cable -- 1.0%
 43,700   Cablevision Systems Corporation, Class A+ .........    1,900,950
102,000   Cox Communications Inc., Class A, New+ ............    1,874,250
147,300   Tele-Communications, Inc., Class A+ ...............    2,200,294
                                                               -----------
                                                                 5,975,494
                                                               -----------
          Conglomerates -- 4.3%
212,000   General Electric Company ..........................   19,292,000
120,000   General Motors Corporation, Class H ...............    6,930,000
                                                               -----------
                                                                26,222,000
                                                               -----------
          Consumer Products --15.6%
115,000   Coca-Cola Company .................................    5,850,625
119,000   ConAgra, Inc. .....................................    5,860,750
153,000   Duracell International Inc. .......................    9,811,125
 45,800   Estee Lauder Companies ............................    2,055,275
102,000   General Mills, Inc. ...............................    6,158,250
202,000   Gillette Company ..................................   14,569,250
 70,000   Kimberly-Clark Corporation ........................    6,168,750
316,700   Nabisco Holdings Corp., Class A ...................   10,015,638
332,000   PepsiCo, Inc. .....................................    9,379,000
 80,000   Philip Morris Companies Inc. ......................    7,180,000
 80,000   Procter & Gamble Company ..........................    7,800,000
 57,000   Ralston Purina Group ..............................    3,904,500
 80,872   Tootsie Roll Industries, Inc.......................    2,860,847
 51,500   Wrigley (Wm.) Jr. Company .........................    3,102,875
                                                               -----------
                                                                94,716,885
                                                               -----------
          Entertainment -- 2.7%
 87,500   Time Warner Inc. ..................................    3,379,688
 18,000   Viacom Inc., Class A+ .............................      634,500
104,000   Viacom Inc., Class B+ .............................    3,692,000
137,000   Walt Disney Company ...............................    8,682,375
                                                               -----------
                                                                16,388,563
                                                               -----------
          Financial Services -- 19.4%
113,000   American Express Company ..........................    5,226,250
 79,000   American International Group, Inc..................    7,959,250
 45,500   Amerin Corp.+ .....................................    1,023,750
 61,000   Associates First Capital Corporation+. ............    2,501,000
 71,000   Bancorp Hawaii Inc.................................    2,769,000
104,000   BankAmerica Corp...................................    8,541,000
232,000   Barnett Banks Inc..................................    7,830,000
104,000   Citicorp ..........................................    9,425,000
 51,000   General Re Corporation ............................    7,229,250
 50,000   Marsh & McLennan Companies ........................    4,856,250
222,000   Mellon Bank Corporation ...........................   13,153,500
151,000   Norwest Corporation ...............................    6,172,125
250,400   State Street Boston Corporation ...................   14,366,700
229,000   T. Rowe Price Associates Inc. .....................    7,442,500
 73,499   Wells Fargo & Company .............................   19,109,740
                                                               -----------
                                                               117,605,315
                                                               -----------
          Health Care -- 9.3%
156,000   Abbott Laboratories ...............................    7,683,000
 81,000   Amgen Inc.+ .......................................    5,113,125
 50,000   Baxter International Inc. .........................    2,337,500
125,000   Chirex Inc.+ ......................................    1,625,000
132,000   Johnson & Johnson .................................    6,765,000
 71,000   Lilly (Eli) & Co...................................    4,579,500
140,000   Merck & Co., Inc...................................    9,852,500
 71,000   Pfizer Inc. .......................................    5,617,875
 88,000   Schering-Plough Corporation .......................    5,412,000
109,000   Warner-Lambert Company ............................    7,194,000
                                                               -----------
                                                                56,179,500
                                                               -----------
          
          
                                       8

<PAGE>

The Gabelli Growth Fund
Portfolio of Investments (Continued) -- September 30, 1996 (Unaudited)
================================================================================

                                                                   Market
 Shares                                                          Value (b)
 ------                                                          ---------
          Industrial Equipment and Supplies -- 1.3%
 92,000   Amphenol Corporation, Class A+ ....................  $ 2,104,500
 84,000   Illinois Tool Works, Inc. .........................    6,058,500
                                                               -----------
                                                                 8,163,000
                                                               -----------
          Publishing -- 2.5%
 70,000   Gannett Inc. ......................................    4,926,250
 38,000   Harcourt General, Inc. ............................    2,099,500
 57,000   K-III Communications Corp.+ .......................      591,375
 94,000   Tribune Co. .......................................    7,332,000
                                                               -----------
                                                                14,949,125
                                                               -----------
          Restaurants -- 0.9%
111,000   McDonald's Corporation ............................    5,258,625
                                                               -----------
          Retail -- 7.3%
146,000   Albertson's, Inc. . ...............................    6,150,250
 84,500   Borders Group Inc.+ ...............................    3,147,625
361,906   Home Depot, Inc. ..................................   20,583,404
180,000   Mattel, Inc. ......................................    4,657,500
195,000   Office Depot Inc.+ ................................    4,606,875
128,000   Walgreen Co. ......................................    4,736,000
                                                               -----------
                                                                43,881,654
                                                               -----------
          Specialty Chemical -- 0.8%
126,400   IMC Global Inc. ...................................    4,945,400
                                                               -----------
          Technology -- 8.0%
113,000   Computer Associates International, Inc. ...........    6,751,750
101,000   Hewlett-Packard Co. ...............................    4,923,750
 50,000   Intel Corporation .................................    4,771,875
 45,500   International Business Machines Corporation .......    5,664,750
 34,000   Microsoft Corporation+ ............................    4,483,750
 49,500   Molex Incorporated ................................    1,843,875
245,062   Molex Incorporated, Class A .......................    8,270,843
 46,000   Sterling Software, Inc.+ ..........................    3,513,250
114,000   Sun Microsystems Inc.+ ............................    7,082,250
 76,000   TCSI Corp.+ .......................................    1,007,000
                                                               -----------
                                                                48,313,093
                                                               -----------
          Telecommunications -- 0.4%
 25,000   Globalstar Telecommunications+ ....................    1,287,500
 80,000   Loral Space & Communications Ltd.+ ................    1,260,000
                                                               -----------
                                                                 2,547,500
                                                               -----------
       
TOTAL COMMON STOCKS .........................................  590,368,192
                                                               -----------

 Principal                                                        Market
  Amount                                                        Value (b)
  ------                                                        ---------
               U.S. TREASURY BILLS -- 2.5%
$14,998,000    4.780% to 5.130%++
               due 10/03/1996 - 11/21/1996 ................   $ 14,903,982
                                                              ------------

TOTAL INVESTMENTS (Cost $452,979,706) (a) .........  100.0%    605,272,174
                                                              ------------

Other Assets and Liabilities (Net) ................    0.0         137,700
                                                              ------------
Net Assets Applicable to
  23,877,578 Shares of Beneficial
  Interest Outstanding............................. 100.0%    $605,409,874
                                                    =====     ============

Net Asset Value, Offering and Redemption
 Price Per Share.........................................     $      25.35
                                                              ============
- ------------
(a)  Aggregate cost for Federal tax purposes was $453,279,346. Net unrealized
     appreciation for Federal tax purposes was $151,992,828 (gross unrealized
     appreciation was $154,664,863 and gross unrealized depreciation was
     $2,672,035).
(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


                                       9

<PAGE>

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<PAGE>

                             GABELLI FAMILY OF FUNDS

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/Westwood Funds ---------------------------------------------------------
Three investment portfolios designed to pursue a variety of investment 
objectives. Equity Fund seeks growth, Balanced Fund seeks income and growth, 
Intermediate Bond Fund seeks current income. (No-load)
                                                  Portfolio Manager: Susan Byrne

Gabelli Small Cap Growth Fund --------------------------------------------------
Invests primarily in equity securities of smaller companies (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. (No-load)
                                        Portfolio Manager: Mario J. Gabelli, CFA

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. (No-load)
                                        Portfolio Manager: Mario J. Gabelli, 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. Max. Sales charge: 5 1/2%
                                        Portfolio Manager: Mario J. Gabelli, CFA

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. An investment in the Fund is neither insured nor
guaranteed by the U.S. Government and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per share. 
                                                 Portfolio Manager: Ronald Eaker

- --------------------------------------------------------------------------------
       GABELLI FUNDS                                     [MAP OF EARTH]
Searching for Opportunities
         WORLDWIDE
- --------------------------------------------------------------------------------

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(R) 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: Marc J. Gabelli

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. (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.

                                          Distributed by Gabelli & Company, Inc.

<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              
Financial Security Assurance                     Executive Officer            
                                                 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.
- --------------------------------------------------------------------------------




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