THE GABELLI VALUE FUND INC.
Class A,B,C Shares
PROSPECTUS
May 1, 1999
The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
==============================================================================
The Gabelli Value Fund Inc.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
(1-800-GABELLI after 6:00 P.M.)
Board of Directors
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Mario J. Gabelli, CFA Robert J. Morrisey
Chairman and Chief Investment Officer Attorney-at-Law
Gabelli Asset Management Inc. Morrissey, Hawkins & Lynch
Bill Callaghan Karl Otto Pohl
President Former President
Bill Callaghan Associates Deutsche Bundesbank
Felix J. Christiana Anthony R. Pustorino
Former Senior Vice President Certified Public Accountant
Dollar Dry Dock Savings Bank Professor, Pace University
Anthony J. Colavita
Attorney-at-Law
Anthony J. Colavita, P.C.
Officers
Mario J. Gabelli, CFA Bruce N. Alpert
President and Chief Chief Operating Officer,
Investment Officer Vice President and Treasurer
James McKee
Secretary
</TABLE>
Questions?
Call 1-800-GABELLI or your investment representative.
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TABLE OF CONTENTS
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INVESTMENT AND PERFORMANCE SUMMARY................................................................................3
INVESTMENT AND RISK INFORMATION...................................................................................6
MANAGEMENT OF THE FUND............................................................................................8
CLASSES OF SHARES.................................................................................................9
PURCHASE OF SHARES...............................................................................................13
REDEMPTION OF SHARES.............................................................................................15
EXCHANGES OF SHARES..............................................................................................16
PRICING OF FUND SHARES...........................................................................................17
DIVIDENDS AND DISTRIBUTIONS......................................................................................18
TAX INFORMATION..................................................................................................18
FINANCIAL HIGHLIGHTS.............................................................................................19
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<PAGE>
INVESTMENT AND PERFORMANCE SUMMARY
Investment Objective:
The Fund seeks to provide long-term capital appreciation. Capital is
the amount of money you invest in the Fund. Capital appreciation is an increase
in the value of your investment.
Principal Investment Strategies:
The Fund will primarily invest in common stocks. The Fund may also
invest in companies that are involved in corporate reorganizations.
Additionally, the Fund may invest in foreign securities. The Fund focuses on
securities of companies which appear underpriced relative to their "private
market value." Private market value is the value the Fund's adviser believes
informed investors would be willing to pay for a company.
Principal Risks:
The Fund's share price will fluctuate with changes in the market value of the
Fund's portfolio securities. Stocks are subject to market, economic and business
risks that cause their prices to fluctuate. Corporate reorganizations involve
the risk that the anticipated transactions may not be completed at the
anticipated time or upon the expected terms, in which case the Fund may suffer a
loss on its investments. Investments in foreign securities involve risks related
to political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and foreign
issuers and markets are subject. When you sell Fund shares, they may be worth
less than what you paid for them. Consequently, you can lose money by investing
in the Fund. The Fund is also subject to the risk that the portfolio securities'
private market values may never be realized by the market, or their prices may
go down. The Fund is a "non-diversified investment company" which means that it
can concentrate its investments in the securities of a single company to a
greater extent than a diversified investment company. Because the Fund may
invest its assets in the securities of a limited number of companies, a decline
in the value of the stock of any one of these issuers could have a greater
impact on the Fund's share price.
Who May Want to Invest:
The Fund may appeal to you if:
you are a long-term investor or saver. you seek growth of capital. you
believe that the market will favor value over growth stocks over the long term.
you wish to include a value strategy as a portion of your overall investments.
you prefer to invest in a more concentrated portfolio.
You may not want to invest in the Fund if:
you are seeking a high level of current income.
you are conservative in your investment approach.
you seek to maintain the value of your original investment
more than potential growth of capital.
An investment in the Fund is not a deposit of a bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
Performance:
The bar chart and table shown below provide an indication of the risks
of investing in the Fund by showing changes in the Fund's performance from year
to year (since 1990 and commencement of operations, respectively), and by
showing how the Fund's average annual returns for one year, five years and the
life of the Fund compared to those of the S&P(R) 500 Stock Index. As with all
mutual funds, the Fund's past performance does not predict how the Fund will
perform in the future. Both the chart and the table assume reinvestment of
dividends and distributions.
BAR CHART* [Graphic Omitted]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Calendar Year Total Returns
1990 (5.6)%
1991 15.3%
1992 12.7%
1993 39.4%
1994 0.0%
1995 22.5%
1996 8.7%
1997 48.2%
1998 23.2%
*The bar chart above shows the total returns for Class A shares (not including
sales load). The Class B and Class C shares of the Fund are new classes for
which performance is not yet available. The returns for the Class B and Class
C shares will be substantially similar to those of the Class A shares shown
here because all shares of the Fund are invested in the same portfolio of
securities. The annual returns of the different classes of shares will differ
only to the extent that the expenses of the classes will differ.
Class A, B and C share sales loads are not reflected in the above
chart. If sales loads were reflected, the Fund's returns would be less than
those shown. During the period shown in the bar chart, the highest return for a
quarter was 21.3% (quarter ended June 30, 1997) and the lowest return for a
quarter was (13.2)% (quarter ended September 30, 1998).
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Average Annual Total Returns Past One Year Past Five Years Since September 29, 1989*
(for the periods ended December 31, 1998)
- ----------------------------------------------- ------------------ ------------------ -------------------------------
- ----------------------------------------------- ------------------ ------------------ -------------------------------
The Gabelli Value Fund Class A shares+ 16.5% 18.1% 16.2%
- ----------------------------------------------- ------------------ ------------------ -------------------------------
- ----------------------------------------------- ------------------ ------------------ -------------------------------
S&P(R)500 Stock Index** 28.7% 24.1% 17.3%
- ----------------------------------------------- ------------------ ------------------ -------------------------------
* From September 29, 1989, the date that the Fund began operations.
** The S&P(R) 500 Composite Stock Price Index is a widely recognized,
unmanaged index of common stock prices. The performance of the Index
does not include expenses or fees.
+ Includes the effect of the 5.5% initial sales charge.
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Fees and Expenses of the Fund:
These tables describe the fees and expenses that you may pay if you buy
and hold shares of the Fund.
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Class A Class B Class C
Shareholder Fees (fees paid directly from your investment): Shares Shares Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)........................................ 5.50%1 None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption price*) .................................... None2 5.00%2 1.00%2
Annual Fund Operating Expenses (expenses that are deducted from Fund
assets): Management
Fees............................................................ 1.00% 1.00%
1.00% Distribution and Service (Rule 12b-1)
Expenses3............................ 0.25% 1.00% 1.00% Other
Expenses............................................................. 0.15%
0.15% 0.15% ---- ---- ---- Total Annual Operating
Expenses............................................ 1.40% 2.15% 2.15% ==== ====
==== .................. 1 The sales charge declines as a percentage of your
investment as the amount invested increases. 2 The Fund imposes a CDSC, which is
a back-end load, upon redemption if you sell your Class B shares within
approximately eighty-four months after purchase. A CDSC of 1% applies to
redemptions of Class C shares within twenty-four months after purchase and a
CDSC of 1% applies to redemptions of certain Class A shares within twelve months
after purchase. 3 As a result of the payment of sales charges and Rule 12b-1
expenses, long term shareholders may pay more than the maximum permitted
front-end sales charge. * "Redemption price" equals the net asset value at the
time of investment or redemption, whichever is lower.
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Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example assumes
that (1) you invest $10,000 in the Fund for the time periods shown, (2) you
redeem your shares at the end of those periods (except as noted), (3) your
investment has a 5% return each year and (4) the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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1 Year 3 Years 5 Years 10 Years
Class A Shares $685 $969 $1,274 $2,137
Class B Shares
-assuming redemption $718 $973 $1,354 $2,483
-assuming no redemption $218 $673 $1,154 $2,483
Class C Shares
-assuming redemption $318 $673 $1,154 $2,483
-assuming no redemption $218 $673 $1,154 $2,483
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INVESTMENT AND RISK INFORMATION
The Fund's investment objective is long-term capital appreciation. The
Fund's investment objective may not be changed without shareholder approval.
The Fund invests primarily in equity securities of companies which the
Fund's adviser, Gabelli Funds, LLC (the "Adviser"), believes are undervalued and
have the potential to achieve significant capital appreciation. The Adviser
invests in companies whose stocks are selling at a significant discount to their
"private market value." Private market value is the value the Adviser believes
informed investors would be willing to pay to acquire the entire company. If
investor attention is focused on the underlying asset value of a company due to
expected or actual developments or other catalysts, an investment opportunity to
realize this private market value may exist.
Undervaluation of a company's stock can result from a variety of
factors, such as a lack of investor recognition of:
the underlying value of a company's fixed assets,
the value of a consumer or commercial franchise,
changes in the economic or financial environment affecting
the company, new, improved or unique products or services,
new or rapidly expanding markets, technological developments
or advancements affecting the company or its products, or
changes in governmental regulations, political climate or
competitive conditions.
The actual events that may lead to a significant increase in the value
of a company's securities include:
a change in the company's management or management policies,
an investor's purchase of a large portion of the company's
stock, a merger or reorganization or recapitalization of the
company, a sale of a division of the company, a tender offer
(an offer to purchase investors' shares), the spin-off to
shareholders of a subsidiary, division or other substantial
assets, or the retirement or death of a senior officer or
substantial shareholder of the company.
In selecting investments, the Adviser also considers the market price
of the issuer's securities, its balance sheet characteristics and the perceived
strength of its management.
The Fund's assets will be invested primarily in common stock. Many of
the common stocks the Fund will buy will not pay dividends; instead, stocks will
be bought for the potential that their prices will increase, providing capital
appreciation for the Fund. The value of equity securities will fluctuate due to
many factors, including the past and predicted earnings of the issuer, the
quality of the issuer's management, general market conditions, the forecasts for
the issuer's industry and the value of the issuer's assets. Holders of equity
securities only have rights to value in the company after all debts have been
paid, and they could lose their entire investment in a company that encounters
financial difficulty. Warrants are rights to purchase securities at a specified
time at a specified price.
The Fund may also use the following investment techniques:
Foreign Securities. The Fund may invest up to 25% of its total assets in
the securities of non-U.S. issuers.
Defensive Investments. When opportunities for capital appreciation do
not appear attractive or when adverse market or economic conditions
occur, the Fund may temporarily invest all or a portion of its assets
in defensive instruments. Such instruments include obligations of the
U.S. Government and its agencies and instrumentalities, and short-term
money market investments maturing in less than one year, including
high-quality commercial paper (rated at least "A-1" by Standard &
Poor's Ratings Service, a division of McGraw-Hill Companies, Inc.
("S&P"), or "P-1" by Moody's Investors Service, Inc. ("Moody's"), bank
certificates of deposit and time deposits, repurchase agreements with
respect to such instruments, and certain money market mutual funds.
When following a defensive strategy, the Fund will be less likely to
achieve its investment goal of capital appreciation.
Corporate Reorganizations. The Fund may invest up to 50% of its total
assets in securities for which a tender or exchange offer has been made
or announced and in securities of companies for which a merger,
consolidation, liquidation or similar reorganization proposal has been
announced ("reorganization securities"). Frequently, the holders of
securities of companies involved in such transactions will receive new
securities ("substituted securities") in exchange therefor. No more
than 30% of the Fund's total assets, however, may be invested in
reorganization securities where the Adviser anticipates selling the
reorganization securities or the substituted securities within six
months or less of the initial purchase of the reorganization
securities. This limitation, however, will not apply to reorganization
securities that have been purchased to supplement a position in such
securities held by the Fund for more than six months.
American Depositary Receipts. The Fund may purchase American
Depositary Receipts ("ADRs") or U.S. dollar-denominated securities of
foreign issuers that are not included in the Fund's 25% limitation on
foreign securities. ADRs are receipts issued by U.S. banks or trust
companies with respect to securities of foreign issuers held on deposit
for use in the U.S. securities markets. While ADRs may not necessarily
be denominated in the same currency as the securities into which they
may be converted, many of the risks associated with foreign securities
may also apply to ADRs.
The Fund may also engage to a limited extent in other investment
practices in order to achieve its investment goal.
Investing in the Fund involves the following risks, listed in the order
of importance:
Market Risk. The principal risk of investing in the Fund is market
risk. Market risk is the risk that the prices of the securities held by
the Fund will change due to general market and economic conditions,
perceptions regarding the industries in which the companies issuing the
securities participate and the issuer company's particular
circumstances. These fluctuations may cause a security to be worth less
than it was worth at an earlier time.
Fund and Management Risk. The Fund invests in stocks issued by
companies believed by the Adviser to be trading at a discount to their
private market value (value stocks). The Fund's price may decline
because the market favors other stocks or small capitalization stocks
over stocks of larger companies. If the Adviser is incorrect in its
assessment of the private market values of the securities it holds,
then the value of the Fund's shares may decline.
Risks of Focusing on Corporate Reorganizations. The Fund may invest a
substantial portion of its assets in securities of companies that are
involved or may become involved in corporate transactions such as
tender offers and corporate reorganizations. The principal risk of this
type of investing is that the anticipated transactions may not be
completed at the anticipated time or upon the expected terms, in which
case the Fund may suffer a loss on its investments. In addition, many
companies in the past several years have adopted so-called "poison
pill" and other defensive measures. This may limit tender offers or
other non-negotiated offers for a company and/or prevent competing
offers. Such measures may also limit the amount of securities in any
one issuer that the Fund may buy.
Foreign Risk. Prices of the Fund's investments in foreign securities
may go down because of unfavorable foreign government actions,
political instability or the absence of accurate information about
foreign issuers. Also, a decline in the value of foreign currencies
relative to the U.S. dollar will reduce the value of securities
denominated in those currencies. Foreign securities are sometimes less
liquid and harder to value than securities of U.S. issuers.
MANAGEMENT OF THE FUND
The Adviser. Gabelli Funds, LLC, with principal offices located at One
Corporate Center, Rye, New York 10580-1434, serves as investment adviser to the
Fund. The Adviser makes investment decisions for the Fund and continuously
reviews and administers the Fund's investment program under the supervision of
the Fund's Board of Directors. The Adviser and its affiliates also manage
several other open-end and closed-end investment companies in the Gabelli family
of funds. The Adviser is a New York limited liability company organized in 1999
as successor to Gabelli Funds, Inc., a New York corporation organized in 1980.
The Adviser is a wholly-owned subsidiary of Gabelli Asset Management Inc.
("GAMI"), a publicly held company listed on the New York Stock Exchange, Inc.
("NYSE").
As compensation for its services and the related expenses borne by the
Adviser, for the fiscal year ended December 31, 1998, the Fund paid the Adviser
an annual fee equal to 1.00% of the value of the Fund's average daily net
assets.
The Portfolio Manager. Mario J. Gabelli, CFA, is responsible for the
day-to-day management of the Fund. Mr. Gabelli has been Chairman, Chief
Executive Officer and Chief Investment Officer of the Adviser and its
predecessor since inception and of its parent company, GAMI, since 1999. Mr.
Gabelli also acts as Chief Executive Officer and Chief Investment Officer of
GAMCO, a wholly-owned subsidiary of GAMI, and is an officer or director of
various other companies affiliated with GAMI. The Adviser relies to a
considerable extent on the expertise of Mr. Gabelli, who may be difficult to
replace in the event of his death, disability or resignation.
Year 2000. As the year 2000 approaches, an issue has emerged regarding
how the software used by the Fund's service providers can accommodate the date
"2000." Failure to adequately address this issue could result in major systems
or process failures which could disrupt the Fund's operations. The Adviser is
working with the Fund's service providers to prepare for the year 2000. Based on
information currently available, the Adviser does not expect that the Fund will
incur significant operating expenses or be required to incur material costs to
be year 2000 compliant. The Fund cannot guarantee, however, that all year 2000
issues will be identified and corrected by January 1, 2000, and any
non-compliant computer system could hurt key Fund operations, such as
shareholder servicing, pricing and trading. In addition, the Year 2000 problem
may adversely affect the companies in which the Fund invests, particularly
companies in foreign countries. For example, these companies may incur
substantial costs to correct the Year 2000 problem, which could lower the value
of such companies' securities and negatively affect the Fund's performance.
CLASSES OF SHARES
Three classes of the Fund's shares are offered in this prospectus -
Class A shares, Class B shares, and Class C shares. Class B and Class C shares
are newly offered. The table below summarizes the differences among the classes
of shares.
a "front-end sales load," or sales charge, is a one-time fee charged
at the time of purchase of shares. a "contingent deferred sales
charge" ("CDSC") is a one-time fee charged at the time of redemption.
a "Rule 12b-1 fee" is a recurring annual fee for distributing shares
and servicing shareholder accounts
based on the Fund's average daily net assets attributable to the
particular class of shares.
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Class A Shares Class B Shares Class C Shares
Front-End Sales Load? Yes. The percentage No. No.
declines as the amount
invested increases.
Contingent Deferred Sales No. Yes, for shares redeemed Yes, for shares redeemed
Charge? within eighty-four within twenty-four
months after purchase. months after purchase.
Declines over time.
Rule 12b-1 Fee 0.25% 1.00% 1.00%
Convertible to Another No. Yes. Automatically No.
Class? converts to Class A
shares approximately
eighty-four months after
purchase.
Fund Expense Levels Lower annual expenses Higher annual expenses Higher annual expenses
than Class B or Class C than Class A shares. than Class A shares.
shares.
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In selecting a class of shares in which to invest, you should consider:
the length of time you plan to hold the shares.
the amount of sales charge and Rule 12b-1 fees.
whether you qualify for a reduction or waiver of the Class A sales
charge. that Class B shares convert to Class A shares approximately
eighty-four months after purchase.
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If you . . . then you should consider . . .
- ------------------------------------------------------ -----------------------------------------------------
- ------------------------------------------------------ -----------------------------------------------------
o intend to hold your shares for less than purchasing Class C shares instead of either Class A
eighty-four months or Class B shares
o do not qualify for a reduced or waived front-
end sales load
- ------------------------------------------------------ -----------------------------------------------------
- ------------------------------------------------------ -----------------------------------------------------
o intend to hold your shares for seven years or purchasing Class B shares
instead of either Class A more shares or Class C shares
o do not qualify for a reduced or waived front-
end sales load
- ------------------------------------------------------ -----------------------------------------------------
- ------------------------------------------------------ -----------------------------------------------------
o qualify for a reduced or waived front-end purchasing Class A shares no
matter how long you sales load intend to hold your shares
- ------------------------------------------------------ -----------------------------------------------------
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Sales Charge - Class A Shares
The sales charge is imposed on Class A shares in accordance with the
following schedule:
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Sales Charge Sales Charge Reallowance
as % of the as % of to Soliciting
Amount of Investment Offering Price* Amount Invested Broker-Dealers
Less than $100,000................................... 5.50% 5.82% 4.50%
$100,000 but under $250,000.......................... 4.50% 4.71% 3.75%
$250,000 but under $500,000.......................... 3.50% 3.63% 3.00%
$500,000 but under $1 million........................ 2.75% 2.83% 2.50%
$1 million or more................................... 2.00% 2.04% 1.75%
*Includes front-end sales load
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Sales Charge Reductions and Waivers - Class A Shares
Reduced sales charges are available to (1) investors who are eligible
to combine their purchases of Class A shares to receive volume discounts and (2)
investors who sign a Letter of Intent and agree to make purchases over time.
Certain types of investors are eligible for sales charge waivers.
Volume Discounts. Investors eligible to receive volume discounts are individuals
and their immediate families, tax-qualified employee benefit plans and a trustee
or other fiduciary purchasing shares for a single trust estate or single
fiduciary account even though more than one beneficiary is involved. You also
may combine the value of Class A shares you already hold in the Fund and other
funds advised by Gabelli Funds, LLC or its affiliates along with the value of
the Class A shares being purchased to qualify for a reduced sales charge. For
example, if you own Class A shares of the Fund that have an aggregate value of
$100,000, and make an additional investment in Class A shares of the Fund of
$4,000, the sales charge applicable to the additional investment would be 4.50%,
rather than the 5.50% normally charged on a $4,000 purchase. If you want more
information on volume discounts, call the Distributor at 1-800-GABELLI
(1-800-422-3554) or your broker.
Letter of Intent. If you initially invest at least $1,000 in Class A shares of
the Fund and submit a Letter of Intent to the Distributor, you may make
purchases of Class A shares of the Fund during a 13-month period at the reduced
sales charge rates applicable to the aggregate amount of the intended purchases
stated in the Letter. The Letter may apply to purchases made up to 90 days
before the date of the Letter. For more information on the Letter of Intent,
call 1-800-GABELLI (1-800-422-3554).
Investors Eligible for Sales Charge Waivers. Class A shares of the Fund may be
offered without a sales charge to (1) employees of Gabelli & Company, Inc.,
Boston Safe Deposit and Trust Company ("Boston Safe"), BFDS, State Street, First
Data Investor Services Group, Inc. and Soliciting Broker-Dealers, employee
benefit plans for those employees and the spouses and minor children of such
employees when orders on their behalf are placed by such employees (the minimum
initial investment for such purchases is $500); (2) the Adviser, GAMCO,
officers, directors, trustees, general partners, directors and employees of
other investment companies managed by the Adviser, employee benefit plans for
such persons and their spouses and minor children when orders on their behalf
are placed by such persons (with no required minimum initial investment), the
term "immediate family" for this purpose refers to a person's spouse, children
and grandchildren (adopted or natural), parents, grandparents, siblings, a
spouse's siblings, a sibling's spouse and a sibling's children; (3) any other
investment company in connection with the combination of such company with the
Fund by merger, acquisition of assets or otherwise; (4) shareholders who have
redeemed shares in the Fund and who wish to reinvest their redemption proceeds
in the Fund, provided the reinvestment is made within 30 days of the redemption;
(5) tax-exempt organizations enumerated in Section 501(c)(3) of the Internal
Revenue Code of 1986 (the "Code") and private, charitable foundations that in
each case make lump-sum purchases of $100,000 or more; (6) qualified employee
benefit plans established pursuant to Section 457 of the Code that have
established omnibus accounts with the Fund; (7) qualified employee benefit plans
having more than one hundred eligible employees and a minimum of $1 million in
plan assets invested in the Fund (plan sponsors are encouraged to notify the
Fund's distributor when they first satisfy these requirements); (8) any unit
investment trusts registered under the Investment Company Act of 1940 (the "1940
Act") which have shares of the Fund as a principal investment; (9) investment
advisory clients of GAMCO and their immediate families; (10) employee
participants of organizations adopting the 401(k) Plan sponsored by the Adviser;
(11) financial institutions purchasing Class A shares of the Fund for clients
participating in a fee based asset allocation program or wrap fee program which
has been approved by the Distributor; and (12) registered investment advisers or
financial planners who place trades for their own accounts or the accounts of
their clients and who charge a management, consulting or other fee for their
services; and clients of such investment advisers or financial planners who
place trades for their own accounts if the accounts are linked to the master
account of such investment adviser or financial planner on the books and records
of a broker or agent.
Investors who qualify under the categories described above should
contact their brokerage firm or the Distributor.
Contingent Deferred Sales Charges
You will pay a CDSC when you redeem:
Class B shares within eighty-four months of buying them.
Class C shares within twenty-four months of buying them.
The CDSC schedule for Class B shares is set forth below. The CDSC
payable upon redemption of Class C shares redeemed within twenty-four months of
purchase is 1%. The CDSC is based on the net asset value at the time of your
investment or the net asset value at the time of redemption, whichever is lower.
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Class B Shares
Years Since Purchase CDSC
- -------------------- ----
First.................................................................. 5.00%
Second................................................................. 4.00%
Third.................................................................. 3.00%
Fourth................................................................. 3.00%
Fifth.................................................................. 2.00%
Sixth.................................................................. 1.00%
Seventh and thereafter................................................. 0.00%
</TABLE>
The Distributor pays sales commissions of 4.00% of the purchase price
of Class B shares of the Fund to brokers at the time of sale that initiate and
are responsible for purchases of such Class B shares of the Fund.
You will not pay a CDSC to the extent that the value of the redeemed
shares represents:
reinvestment of dividends or capital gains distributions.
capital appreciation of shares redeemed.
When you redeem shares, we will assume that you are redeeming first
shares representing reinvestment of dividends and capital gains distributions,
then any appreciation on shares redeemed, and then remaining shares held by you
for the longest period of time. We will calculate the holding period of shares
acquired through an exchange of shares of another fund from the date you
acquired the original shares of the other fund. The time you hold shares in a
money market fund, however, will not count for purposes of calculating the
applicable CDSC.
We will waive the CDSC payable upon redemptions of shares for:
redemptions and distributions from retirement plans made after the death or
disability of a shareholder. minimum required distributions made from an IRA or
other retirement plan account after you reach age 59 1/2. involuntary
redemptions made by the Fund. a distribution from a tax-deferred retirement plan
after your retirement. returns of excess contributions to retirement plans
following the shareholder's death or disability.
Conversion Feature - Class B Shares
Class B shares automatically convert to Class A shares of the Fund on
the first business day of the eighty-fifth month following the
month in which you acquired such shares.
After conversion, your shares will be subject to the lower Rule 12b-1
fees charged on Class A shares, which will increase your
investment return compared to the Class B shares.
You will not pay any sales charge or fees when your shares convert,
nor will the transaction be subject to any tax.
If you exchange Class B shares of one fund for Class B shares of
another fund (See "Exchanges of Shares"), your holding period will
be calculated from the time of your original purchase of Class B
shares. If you exchange shares into a Gabelli money market fund,
however, your holding period will be suspended.
The dollar value of Class A shares you receive will equal the dollar
value of the B shares converted.
The Board of Directors may suspend the automatic conversion of
Class B to Class A shares for legal reasons or due to the exercise
of its fiduciary duty. If the Board determines that such
suspension is likely to continue for a substantial period of time,
it will create another class of shares into which Class B shares
are convertible.
The Fund has adopted a plan under Rule 12b-1 (the "Plan") for each of
its classes of shares. Under the Plan, the Fund may use its assets to finance
activities relating to the sale of its shares and the provision of certain
shareholder services.
Rule 12b-1 Fees
The Rule 12b-1 fees vary by class as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class A Class B Class C
Service Fees None 0.25% 0.25%
Distribution Fees 0.25% 0.75% 0.75%
</TABLE>
These are annual rates based on the value of each Class' average daily net
assets. Because the Rule 12b-1 fees are higher for Class B and Class C shares
than Class A shares, Class B and Class C shares will have higher annual
expenses. Because Rule 12b-1 fees are paid out of the Fund's assets on an
on-going basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
PURCHASE OF SHARES
You can purchase the Fund's shares on any day the NYSE is open for
trading (a "Business Day"). You may purchase shares through Gabelli & Company,
Inc. (the "Distributor"), directly from the Fund through the Fund's transfer
agent or through broker-dealers that have entered into selling agreements with
the Distributor ("Soliciting Broker-Dealers").
From a Soliciting Broker-Dealer. You may purchase shares from
Soliciting Broker-Dealers. The Soliciting Broker-Dealer will transmit a
purchase order and payment to State Street Bank and Trust Company
("State Street") on your behalf. Soliciting Broker-Dealers may send you
confirmations of your transactions and periodic account statements
showing your investments in the Fund.
By Mail or In Person. You may open an account by mailing a completed
subscription order form with a check or money order payable to "The
Gabelli Value Fund" to:
By Mail By Personal Delivery
The Gabelli Funds The Gabelli Funds
P.O. Box 8308 The BFDS Building, 7th Floor
Boston, MA 02266-8308 Two Heritage Drive
Quincy, MA 02171
You can obtain a subscription order form by calling 1-800-422-3554.
Checks made payable to a third party and endorsed by the depositor are
not acceptable. For additional investments, send a check to the above
address with a note stating your exact name and account number, the
name of the Fund and class of shares you wish to purchase.
By Bank Wire. To open an account using the bank wire system, first
telephone the Fund at 1-800-422-3554 to obtain a new account number.
Then instruct a Federal Reserve System member bank to wire funds to:
State Street Bank and Trust Company
ABA #011-0000-28 REF DDA #99046187
Re: The Gabelli Value Fund
Class A, B or C Shares
Account #__________
Account of [Registered Owners]
225 Franklin Street, Boston, MA 02110
If you are making an initial purchase, you should also complete and
mail a subscription order form to the address shown under "By Mail."
Note that banks may charge fees for wiring funds, although State Street
will not charge you for receiving wire transfers.
Minimum Investments. Your minimum initial investment must be at least $1,000.
See "Retirement Plans" and "Automatic Investment Plan" regarding minimum
investment amounts applicable to such plans. There is no minimum for subsequent
investments. Soliciting Broker-Dealers may have different minimum investment
requirements.
Share Price. The Fund sells its shares at the "net asset value" next determined
after the Fund receives your completed subscription order form and your payment
in Federal funds, subject to a sales charge in the case of Class A shares. See
"Pricing of Fund Shares" for a description of the calculation of net asset value
and "Class of Shares -- Sales Charge - Class A Shares" for a description of the
sales charges.
Retirement Plans. The Fund has available a form of IRA for investment in Fund
shares that may be obtained from the Distributor by calling 1-800-GABELLI
(1-800-422-3554). Self-employed investors may purchase shares of the Fund
through tax-deductible contributions to existing retirement plans for
self-employed persons, known as Keogh or H.R. 10 plans. The Fund does not
currently act as sponsor to such plans. Fund shares may also be a suitable
investment for other types of qualified pension or profit-sharing plans which
are employer sponsored, including deferred compensation or salary reduction
plans known as "401(k) Plans" which give participants the right to defer
portions of their compensation for investment on a tax-deferred basis until
distributions are made from the plans. The minimum initial investments for all
such retirement plans is $250. The minimum for all subsequent investments is
$100.
Automatic Investment Plan. The Fund offers an automatic monthly investment plan.
There is no minimum monthly investment for accounts establishing an automatic
investment plan. Call the Distributor at 1-800-GABELLI (1-800-422-3554) for more
details about the plan.
General. State Street will not issue share certificates unless requested by you.
The Fund reserves the right to (i) reject any purchase order if, in the opinion
of Fund management, it is in the Fund's best interest to do so and (ii) suspend
the offering of shares for any period of time.
REDEMPTION OF SHARES
You can redeem shares on any Business Day without a redemption fee. The
Fund may temporarily stop redeeming its shares when the NYSE is closed or
trading on the NYSE is restricted, when an emergency exists and the Fund cannot
sell its shares or accurately determine the value of its assets, or if the
Securities and Exchange Commission ("SEC") orders the Fund to suspend
redemptions.
The Fund redeems its shares at the net asset value next determined
after the Fund receives your redemption request, subject in some cases to a CDSC
as described under "Classes of Shares - Contingent Deferred Sales Charges"
above. See "Pricing of Fund Shares" for a description of the calculation of net
asset value.
You may redeem shares through the Distributor, directly from the Fund
through its transfer agent or through Soliciting Broker-Dealers.
Through a Broker-Dealer. You may redeem shares through a
broker-dealer which will transmit a redemption order to State
Street on your behalf. A redemption request received from a
broker-dealer will be effected at the net asset value next
determined (less any applicable CDSC) after State Street
receives the request. If you hold share certificates, you must
present the certificates to the broker-dealer endorsed for
transfer. A broker-dealer may charge you fees for effecting
redemptions for you.
By Letter. You may mail a letter requesting redemption of
shares to: The Gabelli Funds, P.O. Box 8308, Boston, MA
02266-8308. Your letter should state the name of the Fund and
the share class, the dollar amount or number of shares you are
redeeming and your account number. You must sign the letter in
exactly the same way the account is registered and if there is
more than one owner of shares, all must sign. A signature
guarantee is required for each signature on your redemption
letter. You can obtain a signature guarantee from financial
institutions such as commercial banks, brokers, dealers and
savings associations. A notary public cannot provide a
signature guarantee.
By Telephone. You may redeem your shares in a direct
registered account by calling either 1-800-422-3554 or
1-800-872-5365 (617-328-5000 from outside the United States),
subject to a $25,000 limitation. You may not redeem shares
held through an IRA by telephone. If State Street properly
acts on telephone instructions and follows reasonable
procedures to protect against unauthorized transactions,
neither State Street nor the Fund will be responsible for any
losses due to telephone transactions. You may be responsible
for any fraudulent telephone order as long as State Street or
the Fund takes reasonable measures to verify the order. You
may request that redemption proceeds be mailed to you by check
(if your address has not changed in the prior 30 days),
forwarded to you by bank wire or invested in another mutual
fund advised by the Adviser (see "Exchange of Shares" below).
1. Telephone Redemption By Check. The Fund will make
checks payable to the name in which the account is
registered and normally will mail the check to the
address of record within seven days.
2. Telephone Redemption By Wire. The Fund accepts
telephone requests for wire redemption in amounts of
at least $1,000. The Fund will send a wire to either
a bank designated on your subscription order form or
on a subsequent letter with a guaranteed signature.
The proceeds are normally wired on the next Business
Day.
Through the Automatic Cash Withdrawal Plan. You may
automatically redeem shares on a monthly, quarterly or annual
basis if you have at least $10,000 in your account and if your
account is directly registered with State Street. If you
redeem Class B or Class C shares under this plan, you must pay
the applicable CDSC. Please call the Distributor at
1-800-422-3554 for more information.
Through Involuntary Redemption. The Fund may redeem all
shares in your account (other than an IRA account) if their
value falls below $1,000 as a result of redemptions (but not
as a result of a decline in net asset value). You will be
notified in writing and allowed 30 days to increase the value
of your shares to at least $1,000.
Redemption Proceeds
If you request redemption proceeds by check, the Fund will normally
mail the check to you within seven days after it receives your redemption
request. If you purchased your Fund shares by check, you may not redeem shares
until the check clears, which may take up to 15 days following purchase.
The Fund may pay to you your redemption proceeds wholly or partly in
portfolio securities. Payments would be made in portfolio securities, however,
only in the rare instance that the Fund's Board of Directors believes that it
would be in the Fund's best interest not to pay redemption proceeds in cash.
EXCHANGES OF SHARES
You may exchange shares of the Fund you hold for shares of the same
class of another fund managed by the Adviser or its affiliates based on their
relative net asset values. To obtain a list of the funds whose shares you may
acquire through exchange call 1-800-GABELLI (1-800-422-3554). You may also
exchange your shares for shares of a money market fund managed by the Adviser or
its affiliates. Except for shares exchanged into a money market fund, Class B
and Class C shares will continue to age from the date of the original purchase
of such shares and will assume the CDSC rate they had at the time of exchange.
In effecting an exchange:
you must meet the minimum purchase requirements for the fund whose shares
you purchase through exchange. if you are exchanging into Class A shares of a
fund with a higher sales charge, you must pay the difference at the time of
exchange. you may realize a taxable gain or loss. you should read the prospectus
of the fund whose shares you are purchasing (call 1-800-GABELLI (1-800-422-3554)
to obtain the prospectus). you should be aware that brokers may charge a fee for
handling an exchange for you.
<PAGE>
You may exchange share by telephone, by mail or through a broker.
Exchanges by Telephone. You may give exchange instructions by telephone by
calling 1-800-GABELLI (1-800-422-3554). You may not exchange shares by telephone
if you hold share certificates.
Exchanges by Mail. You may send a written request for exchanges to:
The Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308. State
your name, your account number, the dollar value or number of
shares you wish to exchange, the name and class of the funds whose
shares you wish to exchange, and the name of the fund whose shares
you wish to acquire.
We may modify or terminate the exchange privilege at any time. You will be
given notice 60 days prior to any material change in the exchange privilege.
PRICING OF FUND SHARES
The Fund's net asset value per share is calculated on each Business
Day. The NYSE is currently scheduled to be closed on New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday
or subsequent Monday when a holiday falls on a Saturday or Sunday, respectively.
The Fund's net asset value is calculated separately for each class. It
is determined as of the close of regular trading on the NYSE, normally 4:00
p.m., New York time, and is computed by dividing the value of the Fund's net
assets (i.e. the value of its securities and other assets less its liabilities,
including expenses payable or accrued but excluding capital stock and surplus)
by the total number of its shares outstanding at the time the determination is
made. The Fund uses market quotations in valuing its portfolio securities.
Short-term investments that mature in 60 days or less are valued at amortized
cost, which the Directors of the Fund believe represents fair value.
The Fund may from time to time hold securities that are primarily
listed on foreign exchanges. Such securities may trade on days when the Fund
does not price its shares. Therefore, the Fund's net asset value may change on
days when you are not able to purchase or redeem the Fund's shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions may differ for different classes of shares.
They will be automatically reinvested for your account at net asset value in
additional shares of the Fund, unless you instruct the Fund to pay all dividends
and distributions in cash. If you elect cash distributions, you must instruct
the Fund either to credit the amounts to your brokerage account or to pay the
amounts to you by check. Dividends from net investment income and distributions
of net realized capital gains earned by the Fund, if any, will be paid annually.
There are no sales or other charges in connection with the reinvestment of
dividends and capital gains distributions. There is no fixed dividend rate, and
there can be no assurance that the Fund will pay any dividends or realize any
capital gains.
<PAGE>
TAX INFORMATION
The Fund expects that its distributions will consist primarily of net
investment income and capital gains, which may be taxable at different rates
depending on the length of time the Fund holds its assets. Dividends out of net
investment income and distributions of realized short-term capital gains are
taxable to you as ordinary income. Distributions of net long-term capital gains
are taxable to you at long-term capital gain rates. The Fund's distributions,
whether you receive them in cash or reinvest them in additional shares of the
Fund, may be subject to federal, state or local taxes. An exchange of the Fund's
shares for shares of another fund will be treated for tax purposes as a sale of
the Fund's shares; therefore, any gain you realize on such a transaction may be
taxable.
Foreign shareholders may be subject to special withholding
requirements.
This summary of tax consequences is intended for general information
only. You should consult a tax adviser concerning the tax consequences of your
investment in the Fund.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past five fiscal years of the Fund. The
total returns in the table represent the rate that an investor would have earned
or lost on an investment in the Fund's Class A shares. The Class B and Class C
shares have not previously been offered and therefore do not have a previous
financial history. This information has been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report, along with the Fund's financial
statements and related notes are included in the annual report, which is
available upon request.
Per share amounts for the Fund's Class A shares outstanding throughout each year
ended December 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Operating performance:
Net asset value, beginning of year.... $14.30 $11.52 $11.61 $ 10.49 $ 12.09
----- ------ ------ ------- -------
Net investment income/(loss).......... (0.06) (0.05) (0.02) 0.05 0.09
Net realized and unrealized gain/(loss) on
investments......................... 3.33 5.55 1.04 2.30 (0.09)
------ ---- ---- ----- -------
Total from investment operations..... 3.27 5.50 1.02 2.35 0.00
Distributions to shareholders:
Net investment income............... --- --- --- (0.05) (0.09)
In excess of net investment income--- --- --- --- (0.00)(a)
Net realized gain on investments.... (1.49) (2.72) (1.10) (1.18) (1.50)
In excess of net realized gains....... --- --- --- --- (0.01)
Paid-in capital....................... --- --- (0.01) --- ---
Total distributions................... (1.49) (2.72) (1.11) (1.23) (1.60)
Net asset value, end of year.......... $16.08 $14.30 $11.52 $ 11.61 $ 10.49
===== ====== ====== ======= =======
Total return+ ...................... 23.2% 48.2% 8.7% 22.5% 0.0%
Ratios to average net assets and supplemental data:
Net assets, end of year (in 000's).... $798,812 $596,547 $460,836 $486,144 $436,629
Ratio of net investment income
to average net assets/(loss)...... (0.41)% (0.45)% (0.12)% 0.42% 0.73%
Ratio of operating expenses to
average net assets................ 1.40% 1.42% 1.40% 1.50% 1.50%
Portfolio turnover rate............... 46% 44% 37% 65% 67%
.........
+ 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, and does not reflect any applicable
sales charge.
(a) Amount represents less than $0.005 per share.
</TABLE>
<PAGE>
THE GABELLI VALUE FUND
Class A,B,C Shares
For More Information:
For more information about the Fund, the following documents are
available free upon request:
Annual/Semi-annual Reports:
The Fund's semi-annual and audited annual reports to shareholders
contain detailed information on the Fund's investments. In the annual
report, you will find a discussion of the market conditions and
investment strategies that significantly affected the Fund's
performance during its last fiscal year.
Statement of Additional Information (SAI):
The SAI provides more detailed information about the Fund, including
its operations and investment policies. It is incorporated by
reference, and is legally considered a part of this prospectus.
You can get free copies of these documents and prospectuses of other
Funds in the Gabelli Family, or request other information and discuss
your questions about the Fund by contacting:
The Gabelli Value Fund Inc.
One Corporate Center
Rye, NY 10580
Telephone 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
You can review the Fund's reports and SAIs at the Public Reference Room
of the Securities and Exchange Commission. You can get text-only
copies:
- For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
- Free from the Commission's Website at http://www.sec.gov.
Investment Company Act File Number: 811-05848.
