SUPPLEMENT dated May 22, 2000 to PROSPECTUS dated August 28, 1999
Gabelli Comstock Funds, Inc.
Gabelli Comstock Strategy Fund
Gabelli Comstock Capital Value Fund
On May 22, 2000, Gabelli Funds, LLC (the "Adviser") became the
investment adviser for the Comstock Partners Strategy Fund and the Comstock
Partners Capital Value Fund, which were renamed the Gabelli Comstock Strategy
Fund (the "Strategy Fund") and the Gabelli Comstock Capital Value Fund (the
"Capital Value Fund"). In addition, Gabelli & Company, Inc. became the principal
underwriter for each of the Funds.
This Supplement to the Funds' Prospectus dated August 28, 1999 (the
"Prospectus") explains the changes occurring as a result of the new investment
advisory agreements (the "New Advisory Agreements") approved by shareholders of
each Fund with the Adviser.
The information under the heading Fees and Expenses on pages 9 and 10 of the
Prospectus is replaced by the following information:
Fees and Expenses
The following information shows the fees and expenses that a shareholder of the
Strategy Fund may pay to buy and hold shares of the Strategy Fund:
<TABLE>
<CAPTION>
<S> <C> <C>
Class A Class C
Shareholder Fees (fees paid directly from the shareholder's investment)
Maximum sales charge (as a percentage of offering price) 4.5% 0%
Maximum deferred sales charge (as a percentage of purchase price) 0%* 1%
- ----------------------------------
* 1% applicable only to purchases in excess
of $1 million without a sales charge.
</TABLE>
The costs of operating the Strategy Fund are deducted from the Strategy
Fund's assets, which means that Strategy Fund shareholders pay them indirectly.
The expense information shown below is based on year-end net assets of the
Strategy Fund for 1999 of approximately $35 million, adjusted for the new
advisory and administrative arrangements and savings in other expenses
anticipated in connection with the Adviser becoming the Strategy Fund's
investment adviser and administrator.
<TABLE>
<CAPTION>
<S> <C> <C>
Class A Class C
Annual Fund Operating Expenses (expenses that are deductible from Strategy Fund assets)
Management Fees 0.85% 0.85%
Service and Distribution (12b-1) Fees 0.25% 1.00%
Other Expenses 1.14% 1.14%
Total Fund Operating Expenses (before fee waiver)* 2.24% 2.99%
----- -----
Fee Waiver* 0 0
--------- -----
Total Fund Operating Expenses (after fee waiver)* 2.24% 2.99%
===== =====
- -----------------------------
* Pursuant to the New Advisory Agreement, the Adviser has agreed to waive a
portion of its management fee for the first two years to the extent
necessary to maintain expense ratios for the Strategy Fund at 1999 levels
(other than extraordinary expenses) with respect to the amount of assets
held by the Strategy Fund at the time the New Advisory Agreement goes into
effect. This waiver will not apply to incremental assets or expense ratio
increases.
** Other Expenses are based on amounts incurred during 1999, with average net
assets of approximately $35 million restated to reflect estimated
reductions in transfer agent, audit, legal and insurance expenses
anticipated to take effect upon the Adviser becoming the investment adviser
and administrator to the Strategy Fund.
</TABLE>
<PAGE>
Example: This example is intended to assist shareholders in comparing the cost
of investing in the Strategy Fund, over various time periods, with the cost of
investing in other mutual funds. The example assumes that a shareholder invests
an initial $10,000 in the Strategy Fund and then redeems all shares at the end
of each holding period as indicated below. The example also assumes that the
shareholder's investment has a 5% return each year and that the Strategy Fund's
operating expenses remain constant. Although a shareholder's actual costs may be
higher or lower, based on these assumptions, these costs would be:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A shares $667 $1,119 $1,596 $2,909
Class C shares Without redemption $302 $1,572 $3,308
$924
With redemption $402 $924 $1,572 $3,308
</TABLE>
The information under the heading Fees and Expenses on pages 17 and 18 of the
Prospectus is replaced by the following information:
Fees and Expenses
The following information shows the fees and expenses that a shareholder of the
Capital Value Fund may pay to buy and hold shares of the Fund:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Class A Class B Class C Class R
Shareholder Fees (fees paid directly from the shareholder's investment)
Maximum sales charge (as a percentage of offering price) 4.5% 0% 0% 0%
Maximum deferred sales charge (as a percentage of purchase price) 0%** 4% 1% 0%
- ---------------------------
** 1% applicable only to purchases in excess of $1 million without a sales charge.
</TABLE>
The costs of operating the Capital Value Fund are deducted from the
Capital Value Fund's assets, which means that Capital Value Fund shareholders
pay them indirectly. The expense information shown below is based on year-end
net assets of the Capital Value Fund for 1999 of approximately $65 million,
adjusted for the new advisory and administrative arrangements and savings in
other expenses anticipated in connection with the Adviser becoming the Capital
Value Fund's investment adviser and administrator:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Class A Class B Class C Class R
Annual Fund Operating Expenses (expenses that are deductible from Fund assets)
Management Fees 1.00% 1.00% 1.00% 1.00%
Service and Distribution (12b-1) Fees 0.25% 1.00% 1.00% 0.00%
Other Expenses 0.57% 0.57% 0.57% 0.57%
Total Fund Operating Expenses (before fee waiver)* 1.82% 2.57% 2.57% 1.57%
----- ----- ----- -----
Fee Waiver* (0.19)% (0.19%) (0.19%) (0.19)%
------- ------- ------- -------
Total Fund Operating Expenses (after fee waiver)* 1.63% 2.38% 2.38% 1.38%
===== ===== ===== =====
- --------------------------------
* Pursuant to the New Advisory Agreement, the Adviser will agree to waive a
portion of its management fee for the first two years to the extent
necessary to maintain expense ratios for the Capital Value Fund at 1999
levels (other than extraordinary expenses) with respect to the amount of
assets held by the Capital Value Fund at the time the New Advisory
Agreement goes into effect. This waiver will not apply to incremental
assets or expense ratio increases.
** Other Expenses are based on amounts incurred during 1999, with an average
net assets of approximately $65 million, restated to reflect estimated
reductions in transfer agent, audit, legal and insurance expenses
anticipated to take effect upon the Adviser becoming the investment adviser
and administrator to the Capital Value Fund.
</TABLE>
<PAGE>
Example: This example is intended to assist shareholders in comparing the cost
of investing in the Capital Value Fund, over various time periods, with the cost
of investing in other mutual funds. The example assumes that a shareholder
invests an initial $10,000 in the Capital Value Fund and then redeems all shares
at the end of each holding period as indicated below. The example also assumes
that the shareholder's investment has a 5% return each year and that the Capital
Value Fund's operating expenses remain constant. Although a shareholder's actual
costs may be higher or lower, based on these assumptions, these costs would be:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A shares $608 $941 $1,297 $2,296
Class B shares Without redemption $241 $742 $1,270 $2,716
With redemption $641 $1,042 $1,470 $2,716
Class C shares Without redemption $241 $742 $1,270 $2,716
With redemption $341 $742 $1,270 $2,716
Class R shares $140 $437 $755 $1,657
</TABLE>
Management
Gabelli Advisers, LLC is the investment adviser to the Funds. The
Adviser is the mutual fund advisory subsidiary of Gabelli Asset Management,
Inc., a widely recognized provider of investment advisory and brokerage services
to open-end and closed-end mutual funds, institutional and high net worth
investors and partnerships, primarily in the United States. As of March 31,
2000, it had total assets under management of approximately $12 billion in
mutual funds and $10 billion in other managed accounts. The Class A Common Stock
of Gabelli Asset Management, Inc. is traded on the NYSE under the symbol GBL and
such company and its subsidiaries, including the Adviser, may be deemed to be
indirectly controlled by Mario J. Gabelli. The address of the Adviser is One
Corporate Center, Rye, New York 10580-1434.
Methods for buying Shares and Methods for Selling by Mail
Buying or selling by mail
Mail to the applicable Fund at P.O. Box 8308, Boston, MA 02266-8308
instead of the address on pages 24 and 28 of the Prospectus. Overnight
mail should be sent to the applicable Fund at 66 Brooks Drive,
Braintree, MA 02184, attention:
Martha Kosonen.
Buying by wire transfer
Wires should be sent to State Street Bank and Trust Company, ABA
#011-000028, referencing DDA #99046187, the Fund name and class of
shares you are purchasing, your account number and your name.
Buying or selling by telephone
Use 1-800-GABELLI rather than the number on page 27 of the Prospectus.
The Teletransfer Privilege and other services for buying and selling shares
described on pages 27 to 29 of the Prospectus are no longer available.
