<PAGE> 1
[HOWARD WARD PHOTO]
HOWARD WARD
THE GABELLI GROWTH FUND
SEMI-ANNUAL REPORT
JUNE 30, 1999
[FIVESTARS]
Morningstar Rating(TM) of The Gabelli Growth
Fund was 5 stars
overall and for the three-year period ended
6/30/99 among 3043
domestic equity funds, and for the five and
ten-year periods ended
6/30/99 among 1878 and 748 domestic equity
funds, respectively.
TO OUR SHAREHOLDERS,
The stock market continues its one way march. The bears just cannot get it
right. Long term interest rates rise as the Federal Reserve Board tightens
monetary policy and the market actually goes up. At long last, we discover that
the Chinese stole highly confidential nuclear secrets and the market goes up.
The Russians outflank us on the road to the Kosovo airport, take control of the
airport as talk of a crisis within the Russian leadership deepens, and the
market goes up. Robert Rubin, the popular and well-respected Secretary of the
Treasury, resigns and the market goes up. Lou Dobbs, the charismatic and
pioneering host of CNN's Moneyline, resigns and the market goes up. Maria
Bartiromo, the popular and insightful CNBC anchor, gets married and the market
goes up. There is a clear trend here.
At the halfway point of what is sure to be a tumultuous year we are feeling
good about the economic picture. "Mr. Market" may turn sour yet, but right now
we are beginning to think that this year may be better than we would have had
the nerve to suggest previously. This is why we do not engage in market timing
and this is why we do not like giving terribly specific forecasts for the market
overall. As we have discussed before, market timing is a loser's game. Do not
get caught up in it. Dollar cost averaging is a reasonable approach to investing
in the stock market at times like these, when the market's valuation is at the
high end of its historic range. It balances the risk of being in the market with
the risk of not being in the market.
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Morningstar proprietary
ratings reflect historical risk adjusted performance as of June 30, 1999 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 a broad
asset class 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 bottom 10% receive
one star.
<PAGE> 2
<TABLE>
<CAPTION>
Average Annual Returns - June 30, 1999 (a)
------------------------------------------
<S> <C>
1 Year.....................................................................30.2%
5 Year.....................................................................29.4%
10 Year....................................................................19.0%
Life of Fund (b)...........................................................20.1%
</TABLE>
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
Quarter
------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C> <C>
1999: Net Asset Value................ $38.53 $41.38 -- -- --
Total Return................... 8.8% 7.4% -- -- --
- -------------------------------------------------------------------------------------------------------
1998: Net Asset Value................ $32.32 $33.37 $28.54 $35.40 $35.40
Total Return................... 12.9% 3.2% (14.5)% 30.2% 29.8%
- -------------------------------------------------------------------------------------------------------
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................ -- $10.84 $11.28 $9.51 $9.51
Total Return................... -- 8.4%(b) 4.1% (15.7)% .(49)%(b)
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Dividend History
------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
----------------- -------------- ------------------
<S> <C> <C>
December 28, 1998 $1.745 $35.15
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.
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<PAGE> 3
INVESTMENT PERFORMANCE
For the second quarter ended June 30, 1999, The Gabelli Growth Fund's (the
"Fund") total return was 7.4%. The Lipper Growth Fund Average and Standard and
Poor's ("S&P") 500 Index had total returns of 7.1% and 7.1%, respectively, over
the same period. The S&P index is an unmanaged indicator of stock market
performance, while the Lipper Average reflects the average performance of mutual
funds classified in this particular category. The Fund was up 30.2% over the
trailing twelve-month period. The Lipper Growth Fund Average and S&P 500 rose
18.9% and 22.8%, respectively, over the same twelve-month period.
For the ten-year period ended June 30, 1999, the Fund's total return
averaged 19.0% annually versus average annual total returns of 16.2% and 18.8%
for the Lipper Growth Fund Average and S&P 500, respectively. Since inception on
April 10, 1987 through June 30, 1999, the Fund had a cumulative total return of
840.1%, which equates to an average annual total return of 20.1%. Our direct
shareholders total 64,907 and net assets are $2.237 billion as of June 30, 1999.
ECONOMIC BACKGROUND
The economy continues to grow at an inflation-adjusted rate of about 4.0%.
Interest rates rose in the second quarter with the 30-year Treasury bond's yield
moving above 6.0% for the first time since May of 1998. This backup in yields
has reduced housing activity slightly, which is apt to slow economic growth to
around 3.0% for the third quarter. The important automotive industry is doing
well. Ward's Automotive Reports (no relation) predicts record auto production in
the third quarter. Retail sales have exceeded expectations recently, as the
consumer feels relatively good about job security, with unemployment rates
remaining below 5.0%. Importantly, spending on information technology-related
goods and services is robust. This fast growing sector of the economy is where
many of today's new jobs are being created. The manufacturing sector continues
to reduce overall levels of employment.
Globally, we are, perhaps, seeing the first signs that Japan's slumbering
economy may be awakening, although the evidence remains less than overwhelming.
Excess capacity continues to pressure prices with Japan, China and Germany
experiencing a bit of deflation. It now appears as if China's trade surplus is
about to vanish, which may force the Chinese to devalue their currency. This may
trigger a price war within the Asian exporting community and is most likely bad
news for Asian stock prices. Of course, we have seen some commodity prices move
higher lately, led by oil. This is good news for certain emerging markets that
have commodity-based economies. To be sure, most commodities have experienced
bear markets for an extended time, at least 20 years in some cases. Shuttered
capacity will return to market should prices continue to rise. Now is not the
time to panic about commodity-led price inflation. The price of gold,
historically a leading indicator of inflation, is hitting new lows on a regular
basis.
THE STOCK MARKET
The Internet continues to capture the fascination of investors, although
most pure play Internet stocks peaked in April and experienced price declines
point to point during the second quarter. The good news is that the general
market held firm despite the Internet stock declines, which in some cases were
more than 30%. The second quarter brought us "drkoop.com". The third quarter may
bring us
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"marthastewart.com" (I am not joking). In last quarter's report we took issue
with the valuation accorded America Online. Now let's have some fun with Yahoo's
price.
On the day Yahoo reported its second quarter earnings, the stock was at a
price of approximately $170. In April, the stock traded as high as $244. At
$170, the company was valued at roughly $38 billion. Since forecasts call for
earnings of about $80 million this year, the owner of Yahoo would have a return
on investment of $80 million divided by $38 billion which equates to about 0.21%
or 21 basis points. I think that stinks! If it were my $38 billion, I would
spend $32 billion to buy all of McGraw-Hill, Tribune Company and The Interpublic
Group of Companies. These are all tremendously successful media companies with
real earnings and hidden Internet assets to boot. They are growing earnings at
rates between 12% and 15% and have for some time. Anyway, each company would
contribute between $350 million and $370 million in earnings this year for a
combined total of roughly $1.1 billion in earnings. With the remaining $6
billion, I would buy 6.0% Treasury bonds and earn another $360 million in
income. My combined income from these 4 investments would be $1.5 billion. This
is a return on investment of 3.9% or 19 times superior to Yahoo. Yahoo needs to
compound earnings growth of 50% for eight years to earn $1.5 billion. Of course,
my companies are growing too. At a continued growth rate of 12% to 15%, they
would be earning over $3 billion in eight years. Folks, the math for the
Internet stocks, even the biggest and best, does not compute.
That said, as growth investors we do feel the information revolution is the
place to be. You do not need to speculate in Internet stocks to participate in
the revolution. Neither do we recommend putting all of your eggs in this sector
of the market, as it is volatile and continually changing. Our approach is to
own a handful of the leading companies in various information disciplines, be it
telecommunications equipment (Cisco Systems and Lucent), semiconductors (Intel
and Texas Instruments), computer services (IBM, Computer Sciences Corp.),
software (Microsoft), servers (Sun Microsystems) and storage (EMC). We own AT&T,
Time Warner and MCI Worldcom as information pipelines to business and the
consumer. In the more traditional media category, we own CBS, Clear Channel,
Gannett, Tribune, McGraw-Hill and The New York Times, among others. Most of
these traditional media companies have direct Internet assets as well as
customers and content that may hold value for other online businesses.
PORTFOLIO HIGHLIGHTS
In this year's first quarter, the Internet stocks ran fast and furious. As
they declined in the second quarter, traditional technology and media stocks
assumed market leadership within the large cap growth sector of the market. Our
best performing stocks in the second quarter were our two largest holdings, IBM
and Texas Instruments. They each rose by 45%. They were followed by Tribune (up
33%), The New York Times (up 29%), and Tiffany (up 29%). Our top ten performers
were rounded out by Computer Sciences Corp. (up 25%), Lucent (up 25%), Cisco
Systems (up 18%), MediaOne Group (up 17%) and Chancellor Media (up 17%).
It is worth noting that during the quarter we sold our remaining shares in
the consumer staples sector. This included old friends such as Gillette and
Coca-Cola as well as Procter & Gamble, Ralston Purina and PepsiCo. Simply put,
we felt other stocks had better prospects for solid double-digit growth with
valuations that were more compelling. The consumer staples companies are
generally finding growth more difficult than in the past. During the second
quarter, we saw earnings warnings from Coke, Gillette and Campbell Soup (which
we did not own). We saw significant layoffs announced (usually not a sign of
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prosperity) by Procter & Gamble and Kellogg (which we did not own). We do not
want to make a big deal of this at the moment because we will likely own these
companies again at some point.
LOOKING AHEAD
Currently, the earnings outlook for the back half of the year is excellent.
We do not anticipate a major change in portfolio holdings. We cannot help but
think that Internet mania peaked along with their stocks in April. Reality is
slowly setting in. We will not invest in these companies unless the math
computes. At these prices they are just speculative stocks with sex appeal.
The best scenario for us is one where interest rates decline as the economy
cools and earnings continue to move smartly higher. We do not think the market
would easily adjust to another leg up in interest rates, at least not with the
overall market selling at historically high multiples of earnings.
The stock market can be seductive. Do not let it seduce you. We want you to
use the stock market as a long term investment vehicle. We do not want your
short term money. The market can test your appetite for risk with little
warning. These are exciting times and you should be prepared for something less
than the "best of all possible worlds."
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.
Cisco Systems Inc. (CSCO - $64.50 - Nasdaq) is the leading supplier of data
networking equipment such as routers and ATM switches for use in Local Area
Networks, Wide Area Networks and the Internet. As an integral provider of
infrastructure for the Internet, the company is a major beneficiary of the
"Net's" explosive growth. We expect significant growth in earnings to continue
over the next few years.
Home Depot Inc. (HD - $64.4375 - NYSE) continues to take market share in the
home improvement retailing segment, in which it is the leader by a wide margin.
HD does not rest on its laurels. The company is set to begin testing a smaller
format store known as Villager's Hardware, which will compete with small
hardware stores. The company continues to roll out Expo Design Centers and is
expanding into institutional facilities maintenance through the purchase of
Maintenance Warehouse/America Corp. in 1997. Finally, Home Depot is developing
an Internet sales facility that will leverage the company's brand beyond
traditional retail outlets.
International Business Machines Corp. (IBM - $129.25 - NYSE) is a leading
supplier of hardware, software and outsourcing services for the computer
industry. Over 60% of the company's revenues now come from relatively higher
margin software and service businesses. IBM is well positioned as an electronic
commerce solutions provider, which also provides a platform to cross-sell the
company's many products. We expect the company to grow earnings per share going
forward.
Marsh & McLennan Companies Inc. (MMC - $75.50 - NYSE) is the world's largest
insurance broker and one of the leading asset managers through its ownership of
The Putnam Funds. MMC is also a leader in employee benefit consulting with its
ownership of the Mercer Group. The company's growth rate has accelerated in
recent years due primarily to the success of Putnam. We expect overall growth to
continue
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based on sustained strong results at Putnam, albeit slower than last year, and
some modest improvement in the company's traditional insurance brokerage
business.
MediaOne Group Inc. (UMG - $74.375 - NYSE) is being acquired by AT&T
(T - $55.8125 - NYSE) as that company continues to build and enhance its
facilities to offer one stop shopping for telecommunications services. Upon
completion of the merger, AT&T will become the nation's largest provider of
cable television services. Under the leadership of C. Michael Armstrong, AT&T's
growth rate is rising from single digits to double digits. The company wants to
expand beyond being just a long distance provider. They are now a major provider
of wireless telephony (both cellular and personal communications services
("PCS")) and traditional land-line long distance. AT&T is now becoming a major
provider of cable television services and Internet access. Additionally, they
will use the cable plant to offer local telephone service. They also own various
cable programming assets.
Mellon Bank Corp. (MEL - $36.375 - NYSE) is one of the largest asset managers in
the country. In addition to the Bank's asset gathering arm, their Dreyfus and
Boston Company subsidiaries continue to grow and prosper. New management is
shedding non-core assets to focus on the company's highest margin and best
growth opportunities. Fees represent over 60% of revenues and that number will
grow with the divestiture of the company's mortgage and credit card operations.
The bank prefers to remain independent but it is an attractive property to asset
manager "wannabes" that need scale to boost fee income meaningfully.
Northern Trust Corp. (NTRS - $97.00 - Nasdaq) is one of an elite group of
institutions with a major presence in the wealth management market for high net
worth individuals and families. The company has established a network of offices
in the primary wealth markets across the country (Palm Beach, Beverly Hills,
etc) and continues to build its fee income in a methodical way. We believe
earnings will continue to grow, powered by growth in assets under management,
which exceed $200 billion. We regard NTRS as a trophy property within the
banking sector.
State Street Corp. (STT - $85.375 - NYSE) is a leading provider of financial
services to mutual funds and other institutional investors. The company is the
third largest custodian of assets with $5.3 trillion under custody.
Additionally, State Street is a major asset manager itself with $574 billion
under management. The company is focused on these two business lines and
recently exited the corporate lending business altogether. We believe this
enhances the company's growth prospects and valuation. Management believes the
company has strong growth prospects overseas and growing this part of their
business is a strategic priority.
Sun Microsystems Inc. (SUNW - $68.875 - Nasdaq) is a leading provider of
hardware and software for network based distributed computing systems. While
most of the company's revenue is derived from UNIX-based workstations and client
servers, it is becoming best known for its JAVA operating software. Sun
Microsystems has entered into a joint venture with America Online, which
provides SUNW with a platform to enhance its presence in electronic commerce. As
the top supplier of client server computers to Internet Service Providers, SUNW
is a major beneficiary of continued Internet growth.
Texas Instruments Inc. (TXN - $145.00 - NYSE) is the largest provider of digital
signal processors, a critical component for digital communication devices,
including wireless phones and digital signal lines ("DSL"). Having restructured
the company in recent years, its valuation is no longer hostage to the digital
random access memory ("DRAM") chip cycle and defense businesses. We believe the
digital
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signal processor ("DSP") chip business, in which TXN is the leader, will
continue to grow rapidly in the foreseeable future.
Time Warner Inc. (TWX - $73.50 - NYSE) owns one of the finest collections of
media assets in the world. In addition to being the largest operator of cable
television systems, the company is a leading content provider through its
ownership of CNN, Warner Bros., HBO, Turner Broadcasting, The Cartoon Channel
and other premium and basic cable networks. Time Warner's media empire extends
to music and publishing, where it is a leader in both. The company's business
fundamentals are the best they have been in years with double digit growth in
operating cash flow expected to continue for the foreseeable future.
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.
PROPOSALS TO SHAREHOLDERS
The Fund's Board of Trustees has asked shareholders to consider a proposal
to amend the Fund's Declaration of Trust to permit the Fund to offer additional
classes of shares, and a proposal to amend the Fund's investment policy with
respect to options on securities that it holds or has the right to obtain. We
believe that all of these proposals would benefit the shareholders, and we urge
you to give them your careful consideration.
For existing shareholders we intend to remain a no-load fund. At the same
time, mutual fund distributors are increasingly employing a variety of different
types and combinations of sales charge arrangements for different classes of
shares that are targeted to the needs of particular types of investors. Your
Board of Trustees believes that the Fund should be able to provide the
distribution alternatives and investment flexibility provided by other similarly
situated funds that offer multiple classes of shares. We believe that approval
of the proposal to permit the Fund to offer additional classes of shares will
enhance the potential for the Fund to attract additional investors in a manner
that could provide additional benefits for all investors in the Fund. Again, to
repeat, approval of this proposal will not diminish the ability of existing and
future shareholders to purchase and redeem shares at net asset value.
The second proposal relates to the use of options. If approved, the Fund
would be allowed to sell "covered" call options and to purchase put options in
securities, currencies or other assets owned by the Fund. Among other benefits,
this should enable the Fund to generate additional premium income which would
serve to enhance the Fund's total return and to protect against any anticipated
declines in the value of its assets.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Asset Management
Inc., the Gabelli Mutual Funds, IRAs, 401(k)s, quarterly reports, closing
prices and other current news. You can send us e-mail at
[email protected].
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IN CONCLUSION
The Chinese may have our nuclear secrets but they do not have the World
Cup. Our soccer savvy women beat them with an arsenal that included technical
skill, stamina and courage. They played their hearts out and won our hearts in
the process. We cannot say for sure what impact they may have on "Mr. Market"
but their performance sure inspired us. It was a storybook ending to a great
drama.
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.
Sincerely,
[HOWARD F. WARD SIGNATURE]
HOWARD F. WARD, CFA
Portfolio Manager
July 15, 1999
TOP TEN HOLDINGS
JUNE 30, 1999
<TABLE>
<S> <C>
IBM Corp. Time Warner Inc.
Texas Instruments Inc. State Street Corp.
Cisco Systems Inc. Northern Trust Corp.
Home Depot Inc. Marsh & McLennan Companies
MediaOne Group Inc. Mellon Bank Corp.
</TABLE>
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period stated in this report. The manager's views
are subject to change at any time based on market and other conditions.
8
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THE GABELLI GROWTH FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<C> <S> <C> <C>
COMMON STOCKS--99.8%
BROADCASTING--5.5%
950,600 CBS Corp.+...................... $ 27,571,836 $ 41,291,687
395,000 Chancellor Media Corp.+......... 18,182,007 21,774,375
876,600 Clear Channel Communications
Inc.+.......................... 39,902,042 60,430,613
-------------- --------------
85,655,885 123,496,675
-------------- --------------
BUSINESS SERVICES--6.5%
920,000 Automatic Data Processing
Inc. .......................... 26,876,360 40,480,000
440,000 Ceridian Corp. ................. 14,994,775 14,382,500
220,000 First Data Corp. ............... 10,356,585 10,766,250
564,050 Interpublic Group of Companies
Inc. .......................... 27,485,189 48,860,831
312,000 Omnicom Group Inc. ............. 16,453,292 24,960,000
145,000 Young & Rubicam Inc. ........... 4,575,000 6,588,438
-------------- --------------
100,741,201 146,038,019
-------------- --------------
CABLE--3.7%
1,115,000 MediaOne Group Inc.+............ 45,951,355 82,928,125
-------------- --------------
COMMUNICATIONS EQUIPMENT--5.1%
1,461,500 Cisco Systems Inc.+............. 52,727,006 94,266,750
300,000 Lucent Technologies Inc. ....... 10,606,814 20,231,250
-------------- --------------
63,333,820 114,498,000
-------------- --------------
COMPUTER HARDWARE--9.8%
620,000 Dell Computer Corp.+............ 11,766,498 22,940,000
970,000 International Business Machines
Corp. ......................... 82,181,464 125,372,500
1,040,000 Sun Microsystems Inc.+.......... 23,625,139 71,630,000
-------------- --------------
117,573,101 219,942,500
-------------- --------------
COMPUTER SOFTWARE AND SERVICES--9.0%
870,600 Computer Sciences Corp.+........ 40,493,556 60,234,637
460,000 Electronic Data Systems
Corp. ......................... 23,630,517 26,018,750
1,080,000 EMC Corp.+...................... 32,010,009 59,400,000
330,000 Microsoft Corp.+................ 18,117,632 29,761,875
752,000 SunGard Data Systems Inc.+...... 27,426,225 25,944,000
-------------- --------------
141,677,939 201,359,262
-------------- --------------
ELECTRONICS--7.7%
935,000 Intel Corp. .................... 49,575,172 55,632,500
801,000 Texas Instruments Inc. ......... 74,542,641 116,145,000
-------------- --------------
124,117,813 171,777,500
-------------- --------------
ENTERTAINMENT--3.7%
1,095,000 Time Warner Inc. ............... 53,692,334 80,482,500
60,000 Viacom Inc., Cl. B+............. 2,184,119 2,640,000
-------------- --------------
55,876,453 83,122,500
-------------- --------------
FINANCIAL SERVICES--7.3%
175,500 American International Group
Inc. .......................... 5,827,204 20,544,469
5,000 Goldman Sachs Group Inc. ....... 265,000 361,250
964,500 Marsh & McLennan Companies
Inc. .......................... 52,428,942 72,819,750
595,000 Merrill Lynch & Co. ............ 42,237,097 47,562,812
583,500 T. Rowe Price Associates
Inc. .......................... 18,051,557 22,391,813
-------------- --------------
118,809,800 163,680,094
-------------- --------------
FINANCIAL SERVICES: BANKS--12.6%
840,000 Bank of New York Inc. .......... 25,505,619 30,817,500
1,996,000 Mellon Bank Corp. .............. 45,391,432 72,604,500
810,000 Northern Trust Corp. ........... 47,015,743 78,570,000
939,400 State Street Corp. ............. 51,506,172 80,201,275
280,000 SunTrust Banks Inc. ............ 19,884,490 19,442,500
-------------- --------------
189,303,456 281,635,775
-------------- --------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------ ---- ------
<C> <S> <C> <C>
HEALTH CARE--11.1%
272,000 Abbott Laboratories............. $ 6,344,738 $ 12,376,000
659,000 Amgen Inc.+..................... 41,340,546 40,116,625
490,000 Baxter International Inc. ...... 29,181,230 29,706,250
524,000 Bristol-Myers Squibb Co. ....... 29,036,832 36,909,250
147,000 Johnson & Johnson............... 8,634,194 14,406,000
315,000 Lilly (Eli) & Co. .............. 22,624,706 22,561,875
361,000 Merck & Co. Inc. ............... 19,350,244 26,714,000
133,000 Pfizer Inc. .................... 10,345,509 14,596,750
724,000 Warner-Lambert Co. ............. 43,959,573 50,227,500
-------------- --------------
210,817,572 247,614,250
-------------- --------------
PUBLISHING--6.7%
680,000 Gannett Co. Inc. ............... 35,716,699 48,535,000
370,000 Knight-Ridder Inc. ............. 20,253,562 20,326,875
434,000 McGraw-Hill Companies Inc. ..... 11,715,279 23,408,875
938,000 New York Times Co., Cl. A....... 27,055,964 34,530,125
255,000 Tribune Co. .................... 10,548,414 22,216,875
-------------- --------------
105,289,918 149,017,750
-------------- --------------
RETAIL--8.3%
1,417,718 Home Depot Inc. ................ 24,146,127 91,354,204
914,000 Lowe's Companies Inc. .......... 31,973,790 51,812,375
427,100 Tiffany & Co. .................. 18,999,634 41,215,150
-------------- --------------
75,119,551 184,381,729
-------------- --------------
TELECOMMUNICATIONS--2.8%
557,500 AT&T Corp. ..................... 31,626,997 31,115,469
375,000 MCI Worldcom Inc.+.............. 33,623,436 32,273,437
-------------- --------------
65,250,433 63,388,906
-------------- --------------
TOTAL COMMON STOCKS............. 1,499,518,297 2,232,881,085
-------------- --------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--0.8%
$18,791,000 US Treasury Bills, 4.55% to
4.80%++, due 07/29/99 to
09/23/99....................... 18,618,591 18,618,668
-------------- --------------
TOTAL INVESTMENTS--100.6%....... $1,518,136,888* 2,251,499,753
==============
OTHER ASSETS AND LIABILITIES (NET)--(0.6)%...... (14,250,910)
--------------
NET ASSETS--100.0%
(54,069,341 shares outstanding)................ $2,237,248,843
==============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE................................ $41.38
----
----
---------------------
*For Federal tax purposes:
Aggregate cost.................................. $1,518,136,888
==============
Gross unrealized appreciation................... $ 739,048,099
Gross unrealized depreciation................... (5,685,234)
--------------
Net unrealized appreciation..................... $ 733,362,865
==============
</TABLE>
- ------------------------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
9
<PAGE> 10
THE GABELLI GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
- ----------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost
$1,518,136,888)....................... $2,251,499,753
Cash.................................... 2,320
Dividends receivable.................... 1,169,222
Receivable for investments sold......... 360,301
Receivable for Fund shares sold......... 1,618,830
--------------
TOTAL ASSETS............................ 2,254,650,426
--------------
LIABILITIES:
Payable for investments purchased....... 14,768,373
Payable for Fund shares redeemed........ 216,857
Payable for investment advisory fees.... 1,734,578
Payable for distribution fees........... 433,644
Payable for custodian fees.............. 10,857
Other accrued expenses.................. 237,274
--------------
TOTAL LIABILITIES....................... 17,401,583
--------------
NET ASSETS applicable to 54,069,341
shares outstanding.................... $2,237,248,843
==============
NET ASSETS CONSIST OF:
Share of beneficial interest, at par
value................................. $ 540,693
Additional paid-in capital.............. 1,342,183,469
Accumulated net investment loss......... (6,316,827)
Accumulated net realized gain on
investments........................... 167,478,643
Net unrealized appreciation on
investments........................... 733,362,865
--------------
TOTAL NET ASSETS........................ $2,237,248,843
==============
NET ASSET VALUE, offering and redemption
price per share ($2,237,248,843 /
54,069,341 shares outstanding; unlimited
number of shares authorized of $0.01 par
value)................................ $41.38
======
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
- ----------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................. $ 6,695,117
Interest.................................. 679,905
------------
TOTAL INVESTMENT INCOME................... 7,375,022
------------
EXPENSES:
Investment advisory fees.................. 10,044,217
Distribution fees......................... 2,511,054
Shareholder services fees................. 574,447
Custodian fees............................ 130,894
Legal and audit fees...................... 53,279
Trustees' fees............................ 35,200
Miscellaneous expenses.................... 342,758
------------
TOTAL EXPENSES............................ 13,691,849
------------
NET INVESTMENT LOSS....................... (6,316,827)
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments.......... 168,077,614
Net change in unrealized appreciation on
investments............................. 154,918,777
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS............................. 322,996,391
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.............................. $316,679,564
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment loss..................................... $ (6,316,827) $ (4,818,377)
Net realized gain on investments........................ 168,077,614 87,865,238
Net change in unrealized appreciation on investments.... 154,918,777 299,383,776
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.... 316,679,564 382,430,637
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments........................ -- (87,865,238)
In excess of net realized gain on investments........... -- (202,354)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..................... -- (88,067,592)
-------------- --------------
SHARE TRANSACTIONS:
Net increase in net assets from shares of beneficial
interest transactions.................................. 56,013,185 626,207,999
-------------- --------------
NET INCREASE IN NET ASSETS.............................. 372,692,749 920,571,044
NET ASSETS:
Beginning of period..................................... 1,864,556,094 943,985,050
-------------- --------------
End of period........................................... $2,237,248,843 $1,864,556,094
============== ==============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 11
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Growth Fund (the "Fund") was organized on October
24, 1986 as a Massachusetts business trust. The Fund is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is capital
appreciation. The Fund commenced investment operations on April 10, 1987.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("Nasdaq") or traded on foreign exchanges are
valued at the last sale price on that exchange as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. Portfolio securities traded on more
than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by Gabelli Funds, LLC
(the successor to Gabelli Funds, Inc. as investment adviser) (the "Adviser").
Securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board of Trustees. Short
term debt securities with remaining maturities of 60 days or less are valued at
amortized cost, unless the Trustees determine such does not reflect the
securities' fair value, in which case these securities will be valued at their
fair value as determined by the Trustees. Short term debt instruments having a
greater maturity are valued at the highest bid price obtained from a dealer
maintaining an active market in those securities.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Bank of
New York, with member banks of the Federal Reserve System or with other brokers
or dealers that meet credit guidelines established by the Trustees. Under the
terms of a typical repurchase agreement, the Fund takes possession of an
underlying debt obligation subject to an obligation of the seller to repurchase,
and the Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund's holding period. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Fund in each agreement. The Fund will make payment for such securities
only upon physical delivery or upon evidence of book entry transfer of the
collateral to the account of the custodian. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to maintain the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
11
<PAGE> 12
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
PROVISION FOR INCOME TAXES. The Fund has qualified and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% of the value of the Fund's average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
Officers and Trustees of the Fund who are its affiliates.
4. DISTRIBUTION PLAN. The Fund's Board of Trustees has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the six months
ended June 30, 1999, the Fund incurred distribution costs payable to Gabelli &
Company, Inc., an affiliate of the Adviser, of $2,511,054, or 0.25% of average
daily net assets, the annual limitation under the Plan. Such payments are
accrued daily and paid monthly.
The Fund has entered into shareholder servicing agreements with certain service
agents for which the service agents receive an annual fee of up to 0.10% of the
average daily net assets invested into the Fund by the service agent's customers
in an omnibus account. In exchange for these fees, the service agents render to
such customers various administrative services, which the Fund would otherwise
be obligated to provide at its own expense.
5. PORTFOLIO SECURITIES. Purchases and sales of securities for the six months
ended June 30, 1999, other than short term securities, aggregated $713,178,503
and $660,104,019, respectively.
6. LINE OF CREDIT. The Fund has access to an unsecured line of credit up to
$25,000,000 from the custodian for temporary borrowing purposes. Borrowings
under this arrangement bear interest at 0.75% above the Federal Funds rate on
outstanding balances. There were no borrowings against the line of credit during
the six months ended June 30, 1999.
12
<PAGE> 13
THE GABELLI GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
7. SHARES OF BENEFICIAL INTEREST. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold............................................. 10,690,672 $ 404,640,042 31,588,783 $ 992,367,041
Shares issued upon reinvestment of dividends............ 1,528 49,404 2,299,838 80,836,284
Shares redeemed......................................... (9,279,455) (348,676,261) (14,188,364) (446,995,326)
----------- ------------- ----------- -------------
Net increase........................................ 1,412,745 $ 56,013,185 19,700,257 $ 626,207,999
=========== ============= =========== =============
</TABLE>
8. NEW SHARE CLASSES. On March 9, 1999, the Board of Trustees of the Fund
approved (subject to shareholder approval of Amendments to the Fund's
Declaration of Trust to permit the Fund to offer additional classes of shares) a
Rule 18f-3 Multi-Class Plan relating to the creation of three additional classes
of shares of the Fund - Class A Shares, Class B Shares and Class C Shares (the
"New Share Classes"). The existing class of shares was redesignated as Class AAA
Shares. In addition, the Board has also approved an Amended and Restated
Distribution Agreement, Rule 12b-1 plans for each of the New Share Classes and
an Amended and Restated Plan of Distribution for the existing class of shares
(Class AAA Shares) to be effective upon the commencement of the offering of the
New Share Classes. Currently, shareholder approval is pending.
13
<PAGE> 14
THE GABELLI GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 --------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning
of period...................... $ 35.40 $ 28.63 $ 24.14 $ 22.16 $ 19.68 $ 23.26
---------- ---------- -------- -------- -------- --------
Net investment income/(loss)..... (0.12) (0.07) (0.06) 0.03 0.05 0.07
Net realized and unrealized
gain/(loss) on investments..... 6.10 8.58 10.34 4.27 6.39 (0.86)
---------- ---------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS..................... 5.98 8.51 10.28 4.30 6.44 (0.79)
---------- ---------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income............ -- -- (0.00)(a) (0.02) (0.05) (0.08)
In excess of net investment
income......................... -- -- (0.00)(a) -- -- (0.01)
Net realized gain on
investments.................... -- (1.74) (5.79) (2.30) (3.91) (2.39)
In excess of net realized
gains.......................... -- (0.00)(a) (0.00)(a) -- -- (0.31)
---------- ---------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS.............. -- (1.74) (5.79) (2.32) (3.96) (2.79)
---------- ---------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD... $ 41.38 $ 35.40 $ 28.63 $ 24.14 $ 22.16 $ 19.68
========== ========== ======== ======== ======== ========
TOTAL RETURN+.................... 16.9% 29.8% 42.6% 19.4% 32.7% (3.4)%
========== ========== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's)......................... $2,237,249 $1,864,556 $943,985 $609,405 $533,041 $482,471
Ratio of net investment
income/(loss) to average
net assets..................... (0.63)%(b) (0.33)% (0.23)% 0.12% 0.22% 0.31%
Ratio of operating expenses
to average net assets.......... 1.36%(b) 1.41% 1.43% 1.43% 1.44% 1.36%
Portfolio turnover rate.......... 33% 40% 83% 88% 140% 40%
</TABLE>
- ---------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) Amount represents less than $0.005 per share.
(b) Annualized.
See accompanying notes to financial statements.
14
<PAGE> 15
GABELLI FAMILY OF FUNDS
GABELLI ASSET FUND
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI GROWTH FUND
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (No-load)
Portfolio Manager: Howard F. Ward, CFA
GABELLI WESTWOOD EQUITY FUND
Seeks to invest primarily in the common stock of seasoned companies believed to
have proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation. (No-load) Portfolio Manager: Susan
M. Byrne
GABELLI SMALL CAP GROWTH FUND
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $500 million) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI WESTWOOD SMALLCAP EQUITY FUND
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $1 billion or less. The Fund's primary objective is long-term capital
appreciation. (No-load)
Portfolio Manager: Lynda Calkin, CFA
GABELLI WESTWOOD INTERMEDIATE BOND FUND
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return. (No-load)
Portfolio Manager: Patricia Fraze
GABELLI EQUITY INCOME FUND
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays quarterly dividends and seeks a high level of total return with an
emphasis on income. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI WESTWOOD BALANCED FUND
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(No-load)
Portfolio Managers: Susan M. Byrne & Patricia Fraze
GABELLI WESTWOOD MIGHTY MITES(SM) FUND
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(No-load)
Team Managed: Mario J. Gabelli, CFA, Marc J. Gabelli,
Laura K. Linehan and Walter K. Walsh
GABELLI VALUE FUND
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. Max. Sales
charge:5 1/2%
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI ABC FUND
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss. (No-load) Portfolio
Manager: Mario J. Gabelli, CFA
GABELLI U.S. TREASURY MONEY MARKET FUND
Seeks to invest 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. (No-load)
Portfolio Manager: Judith A. Raneri
THE TREASURER'S FUND
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market seeks to invest in
U.S. Treasury bills, notes and bonds. Tax Exempt Money Market seeks to invest in
municipal securities. Domestic Prime Money Market seeks to invest in prime
quality, domestic money market instruments. (No-load)
Portfolio Manager: Judith A. Raneri
An investment in the above Money Market Funds are neither insured nor guaranteed
by the Federal Deposit Insurance Corporation or any government agency. Although
the funds seek to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Funds.
GLOBAL SERIES
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies through-out the
world - targeting undervalued companies with strong earnings and cash flow
dynamics. The Fund's primary objective is capital appreciation. (No-load)
Team Manager: Mario J. Gabelli, CFA
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic companies. The Fund's
primary objective is total return through a combination of current income and
capital appreciation.
(No-load) Portfolio Manager: Hart Woodson
GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
Seeks to invest in securities of companies involved with communications,
creativity and copyright. The Fund also seeks to invest in companies
participating in emerging technological advances in interactive services and
products. The Fund's primary objective is capital appreciation. (No-load)
Portfolio Manager: Marc J. Gabelli
GABELLI GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in
revenues and earnings and potential for above average capital appreciation or
are undervalued. The Fund's primary objective is capital appreciation.
(No-load)
Portfolio Managers: Marc J. Gabelli & Caesar Bryan
GABELLI GOLD FUND
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial and political factors. (No-load) Portfolio
Manager: Caesar Bryan
GABELLI INTERNATIONAL GROWTH FUND
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (No-load) Portfolio Manager: Caesar Bryan
The six funds above invest in foreign securities which involves risks not
ordinarily associated with investments in domestic issues, including currency
fluctuation, economic and political risks. THE FUNDS LISTED ABOVE ARE
DISTRIBUTED BY GABELLI & COMPANY, INC.
- --------------------------------------------------------------------------------
TO RECEIVE A PROSPECTUS, CALL 1-800-GABELLI (422-3554). The prospectus gives a
more complete description of the Fund, including fees and expenses. Read the
prospectus carefully before you invest or send money.
1-800-GABELLI
(1-800-422-3554) -- fax: 1-914-921-5118 -- www.gabelli.com -- [email protected]
One Corporate Center, Rye, New York 10580
<PAGE> 16
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>
<CAPTION>
BOARD OF TRUSTEES
<S> <C>
Mario J. Gabelli, CFA Karl Otto Pohl
Chairman and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Asset Management
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
Former Chief Investment Managing Director
Officer
Financial Security Assurance BALMAC International, Inc.
Holdings Ltd.
John D. Gabelli
Senior Vice President
Gabelli & Company, Inc.
</TABLE>
<TABLE>
<CAPTION>
OFFICERS AND PORTFOLIO MANAGERS
<S> <C>
Bruce N. Alpert Howard F. Ward, CFA
President and Treasurer Portfolio Manager
James E. McKee
Secretary
</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.
- ---------------------------------------
GAB406Q299SR
[PHOTO]
THE
GABELLI
GROWTH
FUND
SEMI-ANNUAL REPORT
JUNE 30, 1999
