<PAGE> 1
THE GABELLI GROWTH FUND
THIRD QUARTER REPORT - SEPTEMBER 30, 1998
****
Morningstar rated The Gabelli Growth Fund 4 stars overall and for the five
and ten year periods ended 9/30/98 among 2678, 1584 and 713 domestic equity
funds, respectively. The Fund received 5 stars for the three year
period ended 9/30/98 among 2678 domestic equity funds.
[HOWARD WARD PHOTO]
TO OUR SHAREHOLDERS,
Please. Someone. Anyone. What is going on? While the President is cavorting
in the Oval Office with an intern from California, a secretive hedge fund run by
Nobel Prize Laureates and Wall Street's alleged brightest traders brings the
world's financial system to the brink of collapse. Meanwhile, investors in
emerging markets are crushed as Russia defaults and Japan's banking system
buckles. What's more, a Middle Eastern terrorist threatens biological warfare
while ethnic terrorism in Eastern Europe brings peril to throngs of innocents.
This is not a review of the latest Paul Erdman or Michael Thomas financial
thriller. These are just some, repeat some, of the nightmarish developments of
the third quarter. It's a mad, mad world.
My Wall Street career began in 1978. I learned long ago that there is no
such thing as a free lunch. There are no market-proof black box formulas that
allow you to leverage your savings and earn excess returns without taking a
dangerous level of risk. Clearly, the managers of Long Term Capital Management
("LTCM") (an oxymoron?) had not learned this lesson. Neither had the many banks
and brokers that loaned them billions of dollars. Of course, it was not just
LTCM that found trouble. Many members of the hedge fund community were hurt
because many were, to a degree, doing the same thing. Many of these hedge fund
(an oxymoron?) managers will need to find a new line of work. Can taxi
medallions be leveraged?
INVESTMENT PERFORMANCE
For the third quarter ended September 30, 1998, The Gabelli Growth Fund's
(the "Fund") net asset value declined 14.5%. The Lipper Analytical Services
Growth Fund Average and Standard and Poor's ("S&P") 500 Index declined 13.4% and
9.9%, respectively, over the same period. Each index is an unmanaged indicator
of investment performance. The Fund was up 2.7% over the trailing twelve month
period. The S&P 500 rose 9.1% while the Lipper Growth Fund Average declined 1.5%
over the same twelve month period.
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Morningstar proprietary
ratings reflect historical risk adjusted performance as of September 30, 1998
and are subject to change every month. Morningstar ratings are calculated from a
Fund's three, five and ten year average annual returns in excess of 90-day
T-Bill returns with appropriate fee adjustments and a risk factor that reflects
fund performance below 90-day T-Bill returns. The top 10% of the funds in an
investment category receive five stars, the next 22.5% receive four stars, the
next 35% receive three stars, the next 22.5% receive two stars and the last 10%
receive one star.
<PAGE> 2
<TABLE>
<CAPTION>
INVESTMENT RESULTS(a)
Quarter
----------------------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1998: Net Asset Value ............ $ 32.32 $ 33.37 $ 28.54 -- --
Total Return ............... 12.9% 3.2% (14.5)% -- --
- ---------------------------------------------------------------------------------------------------------------------
1997: Net Asset Value ............ $ 24.50 $ 29.25 $ 33.41 $ 28.63 $ 28.63
Total Return ............... 1.5% 19.4% 14.2% 3.1% 42.6%
- ---------------------------------------------------------------------------------------------------------------------
1996: Net Asset Value ............ $ 23.75 $ 24.34 $ 25.35 $ 24.14 $ 24.14
Total Return ............... 7.2% 2.5% 4.1% 4.4% 19.4%
- ---------------------------------------------------------------------------------------------------------------------
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>
<TABLE>
<CAPTION>
AVERAGE ANNUAL RETURNS - SEPTEMBER 30, 1998 (a)
-----------------------------------------------
<S> <C>
1 YEAR............................................ 2.7%
5 YEAR............................................ 17.4%
10 YEAR............................................ 16.9%
LIFE OF FUND (b)................................... 17.2%
</TABLE>
<TABLE>
<CAPTION>
Dividend History
- -----------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
<S> <C> <C>
December 30, 1997 $5.790 $28.58
December 31, 1996 $2.324 $24.14
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
</TABLE>
(a) Total returns and average annual returns reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. Of course, returns represent past performance and do not guarantee future
results. Investment returns and the principal value of an investment will
fluctuate. When shares are redeemed they may be worth more or less than their
original cost. (b) From commencement of investment operations on April 10, 1987.
2
<PAGE> 3
For the ten year period ended September 30, 1998, the Fund's return
averaged 16.9% annually, versus average annual returns of 15.0% and 17.3% for
the Lipper Growth Fund Average and S&P 500, respectively. Since inception on
April 10, 1987 through September 30, 1998, the Fund had a total return of
517.7%, which equates to an average annual return of 17.2%. Our shareholders
total 62,061 and net assets are $1.4 billion as of September 30, 1998.
ECONOMIC BACKGROUND
In our December 31, 1997 report we stated "The destruction of wealth in
Asia will dampen economic activity and profits in the U.S. and Europe." In our
June 30, 1998 report we said, "Our economy will be weakened by events that
transpire beyond our borders. The big question, which remains a mystery, is
whether the drama unfolding in Japan and the emerging markets can continue to be
contained." Obviously, it was not contained. The resulting flight to high
quality U.S. Treasury bonds wrecked havoc with traditional quality spreads in
the bond market, decapitated the hedge funds playing that game and body slammed
their lenders.
As a consequence, credit is less available, profits are less plentiful and
confidence has eroded. Consumer confidence surveys showed weakness in September
and new construction contracts dropped in August, despite record low interest
rates. Layoffs on Wall Street have commenced. With Wall Street's capital raising
function in a recession (Initial Public Offerings, high yield debt and emerging
market debt), we must be alert to more widespread economic weakness.
However, it may be premature to throw in the towel. Most of the companies
whose stocks we own are not talking recession. To be sure, some are not meeting
expectations and some have their hands full. Nevertheless, in the vast majority
of cases, profits are growing and expansion plans are on track. At this point,
our best guess is that the Federal Reserve's stepped-up effort to reduce
interest rates will succeed in keeping the business expansion on track. Federal
Reserve Board Chairman Alan Greenspan understands the current variables. His
move to reduce rates twice in little more than two weeks sends a strong and
positive message to investors and the greater business community. Despite
weakness in exports and a deterioration in confidence, we believe our economy
will post positive, if modest, growth in real Gross Domestic Product ("GDP") of
about 2.0% for the balance of this year. Unlike Japan and, to a degree, Germany,
the U.S. economy is not export dependent. Exports account for nearly 12% of GDP,
although their total impact is somewhat greater due to a multiplier impact.
Still, exports are not the lifeblood of the U.S. economy.
FINANCIAL MARKETS
Too much speculation. Back in the 1980s Drexel, Burnham and Lambert hosted
an annual junk bond conference in Beverly Hills which became known as The
Predator's Ball. Junk bonds, and the takeovers they financed, spawned a
speculative era in stocks, which culminated in the arrests of Michael Milken and
Ivan Boesky, among others, for various insider trading and stock manipulation
charges. Drexel went out of business and the junk bond market has never fully
recovered. For a while, the Wall Street bad boys dominated the headlines. Then,
like now, Alan Greenspan chaired the Federal Reserve. Fortunately, the demise of
junk bonds and Drexel did not have significant ramifications for the Wall Street
establishment. The junk bond world was largely a community unto itself.
3
<PAGE> 4
Fast forward to 1998. A new speculative era emerges. Markets are global.
Capital flows freely. Aided by computers, speculators adopt exotic investment
and borrowing strategies encompassing not just stocks but bonds, currencies and
commodities of all persuasions. Speculators attack countries through their
currencies. Central banks fight back but without much success. A "flight to
quality" follows as risk taking diminishes. U.S. Treasury bonds become safe
havens for ravaged investors. Voila! The lost appetite for risk turns around and
bites the speculators whose computer models had not accounted for this dramatic
shift in investor preference away from risk. Their witches' brew turns toxic.
Investors continue to bid up the price of U.S. Treasuries and bid down the price
of everything else. This divergence in yields is exactly what the hedge fund
speculators had bet against. They had bet on convergence and had done so with
buckets of borrowed money. The meltdown was on.
The junk bond affair was "little league" in comparison to the hedge fund
implosion of 1998. This one threatened the establishment. This one was global.
Nearly all of the largest banks and brokers were exposed. The bankers had not
only lent many hedge funds money but had invested along with them as well. The
markets fear a global recession brought about by a good old-fashioned credit
crunch. The good news is that Alan Greenspan is still running the Federal
Reserve. He will most likely succeed at averting a wide-scale credit crunch. The
bad news is it is way too early to know what is the depth of these wounds to the
financial system. It will take time to sort this out. It is a dangerous time to
be making predictions.
LOOKING AHEAD
We view declining stock prices, as we had in the third quarter, as an
opportunity to pick up quality growth stocks at attractive prices. It forces us
to reexamine our holdings as conditions change. We added some great companies to
the Fund during the quarter, such as Wal-Mart, Lucent Technologies, Procter &
Gamble and General Electric. Seven stocks were sold, all of them at a profit.
They were Citicorp, American Express, General Re, United Technologies, Molex,
Allied-Signal and Avon Products.
As we have said before, we make no attempt to time the market. We believe
market timing is a loser's game. As we have said before, stocks are not cheap.
That has been the case for a period of time. As we have said before, you should
invest in stocks with a long term horizon. This increases the likelihood of
being a successful investor. We will continue our mission to deliver a
well-diversified portfolio of America's greatest established growth companies
selling at prices that can be rationalized using fundamental security analysis.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund.
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.
Baxter International Inc. (BAX - $59.50 - NYSE) is a leading healthcare supply
company. Major business lines include renal care, biotechnology, cardiovascular
and intravenous systems. The company has restructured itself in recent years and
improved its cash flow generation and growth prospects.
Clear Channel Communications Inc. (CCU - $47.50 - NYSE) is one of the largest
owner/operators of radio stations and outdoor advertising facilities. In
addition to interests in 190 radio stations, the
4
<PAGE> 5
company operates 18 television stations. Recently, the company acquired foreign
media properties. We believe Clear Channel will benefit from the ongoing
consolidation of the radio industry.
Computer Sciences Corp. (CSC - $53.50 - NYSE) is a leading provider of
technology outsourcing services to industry and government. As such, the company
is well positioned to benefit from the expected growth in demand for outsourcing
services. This growing demand is driven by companies' desire to improve
productivity and simplify the management of increasingly complex technology
systems. Based in El Segundo, California, the company successfully fought off a
takeover attempt by Computer Associates earlier this year.
Gannett Co. Inc. (GCI - $53.5625 - NYSE) is best known for its USA Today
newspaper publication. Gannett publishes an additional 189 newspapers in 38
states. The company also operates 13 radio and 15 network affiliated television
stations. Earnings are strong due to healthy advertising trends and solid
expense control.
The Home Depot Inc. (HD - $39.50 - NYSE) is the undisputed leader of the home
improvement warehouse retailers. Led by Bernie Marcus and Arthur Blank, the
company's founders, Home Depot is testing new store formats which appeal to new
markets (smaller stores 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. Home Depot has substantial international potential over the long
term. The company plans to open its first store in Chile this year.
Marsh & McLennan Companies Inc. (MMC - $49.75 - NYSE), with the recent
acquisition of Johnson and Higgins, holds the number one position in insurance
brokerage. Additionally, the company owns The Putnam Group, the Boston-based
asset manager (assets under management exceed $225 billion), and Mercer Group, a
leader in employee benefits consulting.
Mellon Bank Corp. (MEL - $55.0625 - NYSE), with the acquisitions in recent years
of Dreyfus Corp., The Boston Company and Founders Asset Management, 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 a continuation of Mellon's share repurchase program this year and next.
Current business trends are strong.
Northern Trust Corp. (NTRS - $68.25 - Nasdaq) is one of a few public asset
managers with a strong franchise in the wealth management market. With nearly
$200 billion in assets under management and fees generating 65% of income, the
bank's stock appears undervalued. Northern Trust is a trophy property within the
banking sector.
State Street Corp. (STT - $54.5625 - NYSE) is the nation's largest custodian of
mutual fund assets. Total assets under custody exceed $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 State Street's global presence and continuously updating
information systems technology to gain competitive advantages. We view the
company as an excellent vehicle to gain exposure to the ongoing growth in
institutional funds management and custody.
5
<PAGE> 6
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.
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
business day for further information.
We thank you for your loyalty and as always, pledge our best efforts on
your behalf.
Sincerely,
/s/ HOWARD F. WARD, CFA /s/ DONALD C. JENKINS, CFA
HOWARD F. WARD, CFA DONALD C. JENKINS, CFA
Portfolio Manager Associate Portfolio Manager
October 30, 1998
<TABLE>
<CAPTION>
TOP TEN HOLDINGS
SEPTEMBER 30, 1998
------------------
<S> <C>
The Home Depot Inc. Computer Sciences Corp.
Northern Trust Corp. Gannett Co. Inc.
Marsh & McLennan Companies Clear Channel Communications
Mellon Bank Corp. State Street Corp.
Merck & Co. Inc. Lowe's Companies Inc.
</TABLE>
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.
6
<PAGE> 7
THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
COMMON STOCKS--98.6%
ADVERTISING--1.9%
479,050 Interpublic Group of Companies Inc. ........ $ 25,838,759
20,000 Young & Rubicam Inc. ....................... 567,500
--------------
26,406,259
--------------
BROADCASTING--3.9%
915,600 CBS Corp.+.................................. 22,203,300
674,600 Clear Channel Communications Inc.+.......... 32,043,500
--------------
54,246,800
--------------
BUSINESS SERVICES--7.5%
350,000 Automatic Data Processing Inc. ............. 26,162,500
710,600 Computer Sciences Corp.+.................... 38,017,100
1,177,800 First Data Corp. ........................... 27,678,298
553,000 Sysco Corp. ................................ 13,030,062
--------------
104,887,960
--------------
CABLE--1.6%
495,000 MediaOne Group Inc.+........................ 21,996,563
--------------
CONSUMER PRODUCTS--5.1%
200,000 Coca-Cola Co. .............................. 11,525,000
704,800 Gillette Co. ............................... 26,958,600
337,000 PepsiCo Inc. ............................... 9,920,438
130,000 Procter & Gamble Co. ....................... 9,221,875
471,000 Ralston Purina Group........................ 13,776,750
--------------
71,402,663
--------------
DIVERSIFIED INDUSTRIAL--4.8%
220,000 General Electric Co. ....................... 17,503,750
363,000 Honeywell Inc. ............................. 23,254,688
596,200 Sundstrand Corp. ........................... 27,648,775
--------------
68,407,213
--------------
ENERGY--4.8%
504,000 Baker Hughes Inc. .......................... 10,552,500
450,000 Halliburton Co. ............................ 12,853,124
579,000 Schlumberger Ltd. .......................... 29,130,938
541,800 Smith International Inc.+................... 14,865,638
--------------
67,402,200
--------------
ENTERTAINMENT--0.8%
463,000 Disney (Walt) Co. .......................... 11,719,687
--------------
FINANCIAL SERVICES--8.6%
205,500 American International Group Inc. .......... 15,823,500
1,074,500 Marsh & McLennan Companies Inc. ............ 53,456,375
265,000 Merrill Lynch & Co. ........................ 12,554,375
560,500 Schwab (Charles) Corp. ..................... 22,069,687
573,000 T. Rowe Price Associates Inc. .............. 16,831,875
--------------
120,735,812
--------------
FINANCIAL SERVICES: BANKS--11.1%
850,000 Bank of New York Inc. ...................... 23,268,750
863,000 Mellon Bank Corp. .......................... 47,518,937
800,000 Northern Trust Corp. ....................... 54,600,000
569,400 State Street Corp. ......................... 31,067,888
--------------
156,455,575
--------------
HEALTH CARE--14.6%
282,000 Abbott Laboratories......................... 12,249,375
500,000 Baxter International Inc. .................. 29,750,000
304,000 Becton Dickinson & Co. ..................... 12,502,000
252,000 Bristol-Myers Squibb Co. ................... 26,176,500
277,000 Johnson & Johnson........................... 21,675,250
240,000 Lilly (Eli) & Co. .......................... 18,795,000
321,000 Merck & Co. Inc. ........................... 41,589,563
138,000 Pfizer Inc. ................................ 14,619,375
111,000 Schering-Plough Corp. ...................... 11,495,437
224,000 Warner-Lambert Co. ......................... 16,912,000
--------------
205,764,500
--------------
PUBLISHING--6.6%
620,000 Gannett Co. Inc. ........................... 33,208,750
347,000 McGraw-Hill Companies Inc. ................. 27,499,750
738,000 New York Times Co., Cl. A................... 20,295,000
235,000 Tribune Co. ................................ 11,823,438
--------------
92,826,938
--------------
RETAIL--10.1%
1,517,718 Home Depot Inc. ............................ 59,949,861
941,000 Lowe's Companies Inc. ...................... 29,935,563
220,000 Rite Aid Corp. ............................. 7,810,000
447,100 Tiffany & Co. .............................. 14,027,762
355,000 Wal-Mart Stores Inc. ....................... 19,391,875
246,000 Walgreens Co. .............................. 10,839,375
--------------
141,954,436
--------------
TECHNOLOGY--17.2%
339,000 BMC Software Inc.+.......................... 20,361,188
330,750 Cisco Systems Inc.+......................... 20,444,484
350,500 Computer Associates International Inc. ..... 12,968,500
250,000 Dell Computer Corp.+........................ 16,437,500
425,000 EMC Corp.+.................................. 24,304,688
400,000 Hewlett-Packard Co. ........................ 21,175,000
400,000 Lucent Technologies Inc. ................... 27,625,000
165,000 Intel Corp. ................................ 14,148,750
167,000 Microsoft Corp.+............................ 18,380,438
585,000 Sun Microsystems Inc.+...................... 29,140,312
582,000 SunGard Data Systems Inc.+.................. 18,333,000
475,000 Tellabs Inc.+............................... 18,910,938
--------------
242,229,798
--------------
TOTAL COMMON STOCKS......................... 1,386,436,404
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ---------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS--0.6%
$8,342,000 U.S. Treasury Bills, 4.29% to 5.12%++
due 10/15/98 to 12/31/98................... 8,269,704
--------------
TOTAL INVESTMENTS--99.2%
(Cost $1,260,087,981)...................... 1,394,706,108
OTHER ASSETS AND LIABILITIES (NET)--0.8%.... 10,762,683
--------------
NET ASSETS--100.0%
(49,238,657 shares outstanding)............ $1,405,468,791
==============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE............................ $28.54
======
</TABLE>
- ------------------------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
7
<PAGE> 8
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.)
<TABLE>
<S> <C>
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 Vice President Certified Public Accountant
Dollar Dry Dock Savings Bank Professor, Pace University
Anthony J. Colavita Anthony Torna
Attorney-at-Law Herzog, Heine & Geduld, Inc.
Anthony J. Colavita, P.C.
James P. Conn Anthonie C. van Ekris
Chief Investment Officer Managing Director
Financial Security Assurance BALMAC International, Inc.
Holdings Ltd.
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
</TABLE>
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND
AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom
LLP
- ---------------------------------------
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
THIRD QUARTER REPORT
SEPTEMBER 30, 1998
