THE GABELLI SMALL CAP GROWTH FUND
SEMI-ANNUAL REPORT
MARCH 31, 2000(A)
TO OUR SHAREHOLDERS,
In the first quarter of 2000, small cap stocks extended the rally that
began in the fourth quarter of 1999. The advance remained rather narrow, with
technology stocks fueling much of the Russell 2000's rise. Despite limited
technology holdings, the Fund posted competitive gains versus its benchmark.
After years of lagging large cap stocks, small caps appear to have taken
over market leadership. The small cap stock arena is once again attracting
assets from institutions and individual investors. This favorable flow of funds
should provide a performance tailwind for this long neglected market sector.
INVESTMENT PERFORMANCE
For the quarter ended March 31, 2000, The Gabelli Small Cap Growth Fund's
(the "Fund") total return was 3.78%. The Value Line Composite and Russell 2000
Indices had total returns of 4.03% and 7.08%, respectively, over the same
period. Each index is an unmanaged indicator of stock market performance. The
Fund was up 27.13% over the trailing twelve-month period. The Value Line
Composite and Russell 2000 Indices rose 19.47% and 37.29%, respectively, over
the same twelve-month period.
For the five-year period ended March 31, 2000, the Fund's total return
averaged 16.09% annually versus average annual returns of 17.21% and 17.24% for
the Value Line Composite and Russell 2000 Indices, respectively. Since inception
on October 22, 1991 through March 31, 2000, the Fund had a cumulative total
return of 299.19%, which equates to an average annual total return of 17.80%.
-------------------------------------------------------------------------------
(a) The Fund's fiscal year ends September 30.
<PAGE>
INVESTMENT RESULTS (a)(c)
- --------------------------------------------------------------------------------
Calendar Quarter
-------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
2000: Net Asset Value $22.24 -- -- -- --
Total Return 3.8% -- -- -- --
- ---------------------------------------------------------------------------
1999: Net Asset Value $19.59 $22.94 $21.84 $21.43 $21.43
Total Return (6.8)% 17.1% (4.8)% 9.9% 14.2%
- ---------------------------------------------------------------------------
1998: Net Asset Value $23.93 $23.59 $18.81 $21.01 $21.01
Total Return 10.9% (1.4)% (20.3)% 14.7% 0.0%
- ---------------------------------------------------------------------------
1997: Net Asset Value $19.11 $22.23 $25.42 $21.58 $21.58
Total Return 3.1% 16.3% 14.7% (0.8)% 36.5%
- ---------------------------------------------------------------------------
1996: Net Asset Value $19.65 $20.68 $20.02 $18.53 $18.53
Total Return 6.2% 5.2% (3.2)% 3.4% 11.9%
- ---------------------------------------------------------------------------
1995: Net Asset Value $17.03 $17.88 $19.34 $18.50 $18.50
Total Return 7.4% 5.0% 8.2% 2.6% 25.2%
- ---------------------------------------------------------------------------
1994: Net Asset Value $16.76 $16.33 $17.24 $15.85 $15.85
Total Return (3.6)% (2.6)% 5.6% (2.1)% (2.9)%
- ---------------------------------------------------------------------------
1993: Net Asset Value $15.46 $15.74 $16.90 $17.38 $17.38
Total Return 6.6% 1.8% 7.4% 5.3% 22.8%
- ---------------------------------------------------------------------------
1992: Net Asset Value $13.42 $13.41 $13.10 $14.50 $14.50
Total Return 9.9% (0.1)% (2.3)% 12.1% 20.3%
- ---------------------------------------------------------------------------
1991: Net Asset Value __ __ __ $12.21 $12.21
Total Return __ __ __ 22.9%(b) 22.9%(b)
- ---------------------------------------------------------------------------
- ------------------------------------------------------
Average Annual Returns - March 31, 2000 (a)
-------------------------------------------
1 Year ..................................... 27.13%
5 Year ..................................... 16.09%
Life of Fund (b) ........................... 17.80%
- ------------------------------------------------------
Dividend History
- -------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 20, 1999 $2.462 $20.55
December 21, 1998 $0.534 $19.80
December 29, 1997 $3.590 $21.29
September 30, 1997 $0.070 $25.42
December 27, 1996 $2.160 $18.46
December 29, 1995 $1.340 $18.50
December 30, 1994 $1.030 $15.85
December 31, 1993 $0.420 $17.38
December 31, 1992 $0.185 $14.50
December 31, 1991 $0.080 $12.21
(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 October 22,
1991. (c) The Fund's fiscal year ends September 30. Note: Investing in small
capitalization securities involves special challenges because these securities
may trade less frequently and experience more abrupt price movements than large
capitalization securities.
- --------------------------------------------------------------------------------
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WHAT WE DO
We view the small capitalization stock market as a research driven stock
picker's paradise. Unlike the large cap market, where most companies are closely
followed by dozens of Wall Street analysts, the small cap market is largely
unclaimed territory. Our analysts put on their hiking shoes, strap on their
backpacks and hit the trails looking for little companies Wall Street does not
know or care about. They are seeking a particular type of company, which we
would describe generally as having a dominant market share, niche franchise in a
growing and/or consolidating industry.
[Graphic omitted]
Pyramid text as follows:
EPS
PMV
MANAGEMENT
CASH FLOW
RESEARCH
Our analysts are guided by specific investment principles that include:
experienced management, healthy balance sheets and rising free cash flow and
earnings. They also live by certain value parameters--their goal is to find
great companies trading at reasonable valuations relative to "real world"
economic worth. These are the kinds of companies we can feel comfortable owning
long term, rather than trading like so many small cap investors are prone to do.
COMMENTARY
The following was excerpted from an article written by Mario J. Gabelli,
our Chief Investment Officer, which will appear in an upcoming edition of Cigar
Afficionado magazine:
"IN RECENT YEARS, WE HAVE SEEN UNPRECEDENTED MERGER AND ACQUISITION
ACTIVITY--WHAT WE HAVE TERMED THE THIRD GREAT WAVE OF TAKEOVERS. IN 1999, THERE
WAS $3.4 TRILLION WORTH OF CORPORATE TRANSACTIONS WORLDWIDE. IN FIRST QUARTER
2000, M&A ACTIVITY REMAINED TORRID WITH $1.2 TRILLION IN GLOBAL DEALS, ($600
BILLION IN THE U.S), COMPARED TO $1.1 TRILLION IN FOURTH QUARTER 1999. WE COULD
SEE M&A NUMBERS EXCEED LAST YEAR'S IMPRESSIVE TOTALS. IN ADDITION TO ALL THE
CORPORATE MERGER AND ACQUISITION ACTIVITY, THE OLD FINANCIAL
ENGINEERS--LEVERAGED BUYOUT SPECIALISTS--ARE RESURFACING TO TAKE ADVANTAGE OF
EXCEPTIONAL BARGAINS IN DEPRESSED "OLD ECONOMY" STOCKS...
THROUGH THE YEARS, WE HAVE HAD MANY PORTFOLIO COMPANIES STRUCK BY TAKEOVER
AND LEVERAGED BUYOUT LIGHTNING...WE LOOK FOR BUSINESS BARGAINS--STOCKS TRADING
SIGNIFICANTLY BELOW OUR APPRAISAL OF THEIR "REAL WORLD" ECONOMIC VALUE. WE
ANALYZE STOCKS FROM THE VERY SAME PERSPECTIVE AS CORPORATE ACQUIRERS AND LBO
FIRMS, FOCUSING ON CASH FLOW AFTER CAPITAL EXPENDITURES AND ASSET VALUES, RATHER
THAN EARNINGS PER SHARE.
TODAY, I WILL WALK YOU THROUGH THE BASICS OF WHAT WE CALL PRIVATE MARKET
VALUE INVESTING... I'LL ALSO DEMONSTRATE HOW YOU CAN BENEFIT BY INVESTING IN THE
"BACK END" OF DEALS THROUGH RISK ARBITRAGE.
(YEARS AGO) I CAME TO THE REALIZATION THAT THE KEY WAS FREE CASH FLOW,
WHICH WE DEFINED AS EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND
AMORTIZATION (EBITDA) MINUS THE NECESSARY CAPITAL EXPENDITURES TO GROW THE
BUSINESS. WHY FREE CASH FLOW RATHER THAN NET EARNINGS? BECAUSE WHEN VALUING A
BUSINESS
3
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INVESTMENT YOUR PRIMARY INTEREST IS HOW MUCH CASH IT THROWS OFF. IF YOU ARE
FINANCING THE PURCHASE WITH DEBT--CHARACTERISTIC OF THE LEVERAGE BUYOUT--IT
DETERMINES HOW MUCH YOU CAN PAY FOR THE BUSINESS AND COMFORTABLY MEET
OBLIGATIONS ON THE DEBT INCURRED IN THE TRANSACTION. IF YOU ARE FINANCING THE
DEAL WITH CASH, YOU WANT TO KNOW HOW QUICKLY YOUR INVESTMENT WILL PAY FOR
ITSELF. IF YOU ARE USING STOCK, YOU NEED TO KNOW WHETHER THE CASH BEING
GENERATED BY YOUR TARGETED ACQUISITION WILL ADD TO EARNINGS AND HELP PROPEL YOUR
STOCK HIGHER...
USING THIS METHODOLOGY, I WAS ABLE TO IDENTIFY A LOT OF BUSINESS BARGAINS.
BUT BARGAINS OFTEN GATHER DUST ON THE PORTFOLIO SHELF. SO, I LOOKED FOR A
CATALYST--SOME ELEMENT OF CHANGE THAT WOULD MARK UP PORTFOLIO MERCHANDISE. OFTEN
THAT CATALYST WAS A POTENTIAL DEAL. IN ANALYZING COMPANIES WITH SOME TAKEOVER
FLAVOR, I SOUGHT ANSWERS FOR A NUMBER OF QUESTIONS. IS A TARGET COMPANY IN A
FRAGMENTED INDUSTRY THAT IS LIKELY TO BE CONSOLIDATED BY LARGER PLAYERS? WHAT
HAS MANAGEMENT DONE IN THE PAST TO ENHANCE SHAREHOLDER VALUE? DOES MANAGEMENT
OWN ENOUGH STOCK TO FINANCIALLY INCENTIVIZE THEM TO CONSIDER SELLING THE
BUSINESS OR ARE THEY SIMPLY HIRED GUNS THAT WOULD BLOCK A DEAL TO SAVE THEIR
JOBS? ARE THERE ANY ANTI-TAKEOVER DEFENSES (STAGGERED BOARDS, POISON PILLS ETC.)
THAT WOULD PRECLUDE A HOSTILE BID FOR THE COMPANY? HAVE THERE BEEN ANY 13D
FILINGS (SEC FILINGS INDICATING SOMEONE HAS BOUGHT MORE THAN 5% OF THE COMPANY'S
SHARES)? IF SO, DO THE BUSINESSES OF THE TWO COMPANIES COMPLEMENT EACH OTHER?
ARE THERE ANY POTENTIAL REGULATORY OR ANTI-TRUST PROBLEMS THAT COULD PREVENT A
DEAL? IF I CAME UP WITH THE RIGHT ANSWERS TO THESE QUESTIONS, WE WOULD GENERALLY
BUY THE STOCK.
YOU MAY BE THINKING, 'GREAT, MARIO... GIVE US A FEW NAMES THAT MIGHT HELP
US MAKE A BIG SCORE.' FAIR ENOUGH. MARK IV INDUSTRIES (NYSE, IV), WYNN'S
INTERNATIONAL (NYSE, WN), AND SYBRON CHEMICAL (AMEX, SYC) ARE ALL TRADING AT
DEEP DISCOUNTS TO OUR PRIVATE MARKET VALUE APPRAISALS, AND THERE ARE CATALYSTS
IN PLACE THAT LEAD US TO BELIEVE THESE COMPANIES MIGHT RECEIVE SOME INTEREST
FROM A CORPORATE ACQUIRER OR LBO GROUP. I'M NOT SUGGESTING A PROFITABLE "EVENT"
IS JUST AROUND THE CORNER. BUT, THESE STOCKS ARE FAIRLY COMPELLING BASED ON
THEIR OWN MERITS AS INDEPENDENT COMPANIES."
THIS QUARTER'S REPORT CARD
As usual, stocks getting the highest performance grades this quarter come
from a wide variety of industry groups. Our Dean's List includes a nutraceutical
company (Omni Nutraceuticals), a travel agent (Travel Services), a gaming
company (Jackpot Enterprises), a technology company (Oak Technology) and a hotel
company (Bristol Hotels and Resorts).
This quarter's performance dunces include a broadcaster (Young
Broadcasting), the company that made baking soda products famous (Church &
Dwight) and a race track operator (Dover Downs Entertainment).
In general, our technology and telecommunications holdings posted solid
gains, while cyclical companies under-performed. We expect the latter to regain
momentum when investors realize that cyclical company earnings will likely be
better than expected and rock bottom valuations begin attracting small cap
bargain hunters.
4
<PAGE>
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 that we believe will develop over
time.
CARTER-WALLACE INC. (CAR - $18.75 - NYSE), founded in 1880 as the Carter
Medicine Company marketing a single product called Carter Little Liver Pills,
now manufactures and sells a diversified line of consumer health care products
including toiletries, pharmaceuticals, diagnostic specialties, proprietary drugs
and pet supplies. Such brands as Arrid deodorant, Nair hair remover and Pearl
Drops toothpaste are Carter-Wallace products. The company also sells certain
products exclusively in international markets.
CELESTIAL SEASONINGS INC. (CTEA - $34.375 - NASDAQ), based in Boulder, Colorado,
developed and popularized the herb tea category in the U.S. as a flavorful,
non-caffeinated alternative to other hot beverages. With over 60 tea varieties
under the Celestial Seasonings brand, CTEA is the largest manufacturer of herb
teas, with an estimated 50% market share. The company is expected to maintain
its dominant share in the herb tea market and is positioned to leverage its
strong brand name into dietary herbal supplements, green tea and wellness tea.
The Hain Food Group (HAIN - $28.3125 - Nasdaq), the leading natural and organic
food company, and Celestial Seasonings have announced the signing of a
definitive agreement to combine their operations. The name of the combined
company will be The Hain Celestial Group Inc.
CLARCOR INC. (CLC - $17.75 - NYSE), founded in 1904, is a U.S.-based
manufacturer and marketer of engine-mobile filtration products,
industrial/environmental filtration products and consumer packaging products.
CLARCOR markets a full line of oil, air, fuel, coolant and hydraulic fluid
filters that are used in a wide variety of applications, including engines and
industrial equipment. The company markets commercial and industrial air filters
and systems, electrostatic contamination control equipment, and electrostatic
high precision spraying equipment. The air filters and systems remove
contaminants from recirculated indoor air and from processed air that is
exhausted outdoors. Metal, plastic, and paper containers, combination
metal/plastic containers, and plastic closures manufactured by the company are
used in packaging a wide variety of dry and paste form products, such as food
specialties, beverages and juices, cosmetics and toiletries, drugs and
pharmaceuticals and chemical specialties. Last September, CLARCOR agreed to
purchase three filtration businesses, including Purolator Products Air
Filtration Company, for approximately $136 million.
MARK IV INDUSTRIES INC. (IV - $22.0625 - NYSE) is a diversified manufacturer of
a broad range of proprietary and other power and fluid transfer products and
systems that serve primarily industrial and automotive markets. The company
classifies its operations into two business segments. Mark IV Industrial
includes the design, manufacture and distribution of power and fluid management
systems and components for industrial original equipment manufacturers ("OEM")
and distribution markets worldwide. Mark IV Automotive includes the design,
manufacture and distribution of power transmission, fuel, and fluid
5
<PAGE>
handling systems and components, and filters and filtration systems, for the
global automotive aftermarket and OEM market.
PIONEER GROUP INC. (PIOG - $23.25 - NASDAQ) is divided among three strategic
business units: Pioneer Investment Management, Pioneer International Financial
Services and Pioneer Global Investments. Pioneer Investment Management acts as
investment manager to the company's 24 open-end registered investment companies
and one closed-end registered investment company based in the U.S. The company's
International Financial Services businesses include investment management and
financial services operations. Pioneer Global Investments includes the company's
diversified businesses of gold mining, timber, international venture capital,
real estate and mineral exploration.
SYBRON CHEMICALS INC. (SYC - $14.125 - AMEX), headquartered in Birmingham, New
Jersey, is an international specialty chemical company that develops, produces
and markets specialty chemicals. Sybron operates in three main market segments:
textile preparation, dyeing, printing, finishing, and garment processing;
environmental (primarily related to water and waste treatment); and specialty
polymer intermediates for coatings, adhesives and molded products.
WYNN'S INTERNATIONAL INC. (WN - $13.8125 - NYSE), founded in 1939, is a
worldwide supplier of automotive and industrial components and specialty
chemical products. The Automotive and Industrial Components Division includes
Wynn's-Precision Inc. and the Goshen Rubber Companies Inc., acquired on December
17, 1999. These two companies are leaders in sealing products and technology
serving more than 1,000 customers in 14 industrial markets around the world.
Robert Skeels & Company is a regional wholesale distributor of builders'
hardware products. The Specialty Chemicals Division is comprised of Wynn Oil
Company and its subsidiaries, a worldwide manufacturer and marketer of specialty
chemicals, equipment and related programs for automotive and industrial markets
in over 100 countries.
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.
Additionally, The Gabelli Small Cap Growth Fund and other Gabelli Funds are
available through the no-transaction fee programs at many major discount
brokerage firms.
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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<PAGE>
IN CONCLUSION
Small cap stocks have taken a back seat to the large cap market darlings
for nearly five years. Over the last two quarters this has changed, with small
caps taking over market leadership. We believe this is long overdue. Despite the
small cap rally, with the notable exception of the rather richly priced small
technology companies, valuations remain quite reasonable relative to favorable
earnings growth rates. If the broad market encounters serious trouble in the
year ahead, small cap stocks are unlikely to escape unscathed. However, we
believe small caps have much stronger investor support than in recent years, and
are capable of holding up well relative to other capitalization sectors in an
adverse market environment.
Finally, the small cap arena continues to favor research driven stock
pickers. In our research endeavors, we are often one of just a few institutions
interested in the companies we are meeting with. In some instances, we are the
only firm giving any research attention to a great little company. If you get
there first and do your homework, you can uncover outstanding investment
opportunities that can shine in good markets and bad.
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 GABSX. Please call us during the
business day for further information.
Sincerely,
/S/ MARIO J.GABELLI
MARIO J. GABELLI, CFA
Portfolio Manager and
Chief Investment Officer
April 14, 2000
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TOP TEN HOLDINGS
MARCH 31, 2000
--------------
Oak Technology Inc. Pioneer Group Inc.
TV Guide Inc. USA Networks Inc.
United Television Inc. Carter-Wallace Inc.
UnitedGlobalCom Inc. Celestial Seasonings Inc.
Liberty Corp. CLARCOR Inc.
- --------------------------------------------------------------------------------
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.
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THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 96.4%
AEROSPACE -- 1.0%
167,100 Howmet International Inc.+ ... $ 3,294,239 $ 3,373,331
------------ ------------
AGRICULTURE -- 0.0%
7,500 Cadiz Inc.+ .................. 76,434 63,750
5,000 Sylvan Inc. .................. 49,669 38,750
------------ ------------
126,103 102,500
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 4.7%
100,000 Acktion Co.+ ................. 1,273,170 818,995
12,000 Borg-Warner
Automotive Inc. ............. 473,912 472,500
205,000 GenCorp Inc. ................. 1,956,379 1,588,750
8,000 Lund International
Holdings Inc.+ .............. 89,730 38,500
22,000 Meritor Automotive Inc. ...... 514,844 347,875
30,000 Midas Inc. ................... 651,993 720,000
125,000 Modine Manufacturing Co. ..... 3,625,956 3,140,625
5,250 Monro Muffler Brake Inc.+ .... 52,860 43,641
190,000 Scheib (Earl) Inc.+ .......... 1,301,170 712,500
151,000 Standard Motor
Products Inc. ............... 2,457,169 2,246,125
17,000 Strattec Security Corp.+ ..... 427,208 584,375
54,000 Superior Industries
International Inc. .......... 1,448,049 1,711,125
125,000 TransPro Inc. ................ 1,254,392 625,000
200,000 Wynn's International Inc. .... 1,294,233 2,762,500
------------ ------------
16,821,065 15,812,511
------------ ------------
AVIATION: PARTS AND SERVICES -- 2.5%
15,000 AAR Corp. .................... 198,875 250,312
45,000 Aviall Inc.+ ................. 545,020 379,687
18,300 Barnes Group Inc. ............ 363,565 265,350
56,000 Curtiss-Wright Corp. ......... 1,008,638 2,051,000
7,500 Ducommun Inc. ................ 80,125 68,906
120,000 Fairchild Corp., Cl. A+ ...... 2,108,670 817,500
26,500 Hi-Shear Industries Inc. ..... 58,141 66,250
300,000 Kaman Corp., Cl. A ........... 5,429,465 2,925,000
80,000 Moog Inc., Cl. A+ ............ 1,630,172 1,470,000
------------ ------------
11,422,671 8,294,005
------------ ------------
BROADCASTING -- 7.3%
195,000 Ackerley Group Inc. .......... 2,869,412 2,949,375
1,500 Acme Communications Inc.+ .... 46,437 34,312
244,900 Granite Broadcasting Corp.+ .. 2,570,284 1,744,912
35,000 Gray Communications
Systems Inc. ................ 538,963 415,625
50,000 Gray Communications
Systems Inc., Cl. B ......... 664,282 587,500
54,500 Hearst-Argyle
Television Inc.+ ............ 486,898 1,273,937
MARKET
SHARES COST VALUE
------ ---- ------
167,000 Liberty Corp. ................ $ 5,392,917 $ 6,262,500
5,500 On Command Corp. ............. 95,922 82,500
200,000 Paxson Communications
Corp., Cl. A+ ............... 2,091,730 1,550,000
100,000 Price Communications
Corp.+ ...................... 1,049,317 2,300,000
38,000 Salem Communications
Corp., Cl. A+ ............... 869,017 453,625
10,000 Sinclair Broadcast
Group Inc.+ ................. 102,000 89,375
2,000 Spanish Broadcasting
System Inc., Cl. A+ ......... 40,000 46,906
1,500 TiVo Inc.+ ................... 24,000 51,937
48,500 United Television Inc. ....... 1,139,765 6,420,187
1,500 Wink Communications Inc.+ .... 24,000 50,062
15,000 Young Broadcasting
Inc., Cl. A+ ................ 530,708 285,000
------------ ------------
18,535,652 24,597,753
------------ ------------
BUILDING AND CONSTRUCTION -- 1.1%
14,000 Florida Rock Industries Inc. . 231,942 392,000
14,444 Huttig Building
Products Inc.+ .............. 38,176 64,998
94,000 Nortek Inc.+ ................. 1,354,925 2,079,750
75,000 Republic Group Inc. .......... 427,064 806,250
22,000 Universal Forest
Products Inc. ............... 286,625 272,250
------------ ------------
2,338,732 3,615,248
------------ ------------
BUSINESS SERVICES -- 3.1%
70,000 Berlitz International Inc.+ .. 1,241,773 800,625
40,000 Burns International
Services Corp. .............. 515,826 420,000
610,400 Career Blazers Inc. .......... 236,019 396,760
6,000 Carlisle Holdings Ltd.+ ...... 30,250 46,875
1,500 CheckFree Holdings Corp.+ .... 13,560 105,750
20,000 Data Broadcasting Corp.+ ..... 114,002 152,500
3,000 Data Transmission
Network Corp.+ .............. 15,000 85,312
40,000 Donnelley (R.H.) Corp. ....... 547,665 680,000
24,000 Industrial Distribution
Group Inc.+ ................. 257,476 72,000
13,000 Landauer Inc. ................ 233,156 237,250
5,000 MDC Communications
Corp., Cl. A+ ............... 53,950 58,125
37,500 Nashua Corp.+ ................ 534,448 314,062
109,500 National Processing Inc.+ .... 971,933 1,040,250
105,000 Paxar Corp.+ ................. 1,213,161 1,010,625
17,000 Pittson Brink's Group ........ 458,809 289,000
12,000 Princeton Video Image Inc.+ .. 77,250 84,000
10,000 PubliCard Inc.+ .............. 109,405 97,500
87,000 Trans-Lux Corp. (b) .......... 734,323 587,250
See accompanying notes to financial statements.
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THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
BUSINESS SERVICES (CONTINUED)
152,000 U.S. Foodservice+ ............ $ 3,823,933 $ 3,914,000
8,000 Wachenhut Corp., Cl. A ....... 118,092 111,500
6,187 Wackenhut Corp., Cl. B ....... 52,368 62,257
------------ ------------
11,352,399 10,565,641
------------ ------------
CABLE -- 1.9%
85,000 UnitedGlobalCom Inc.,
Cl. A+ ...................... 648,155 6,380,312
------------ ------------
CLOSED-END FUNDS -- 1.6%
45,000 Central European Equity
Fund Inc. ................... 608,109 773,437
78,000 Dresdner RCM Europe
Fund Inc. ................... 611,900 1,368,120
45,000 France Growth Fund Inc. ...... 476,793 736,875
32,000 Germany Fund Inc. ............ 358,820 518,000
40,000 Italy Fund Inc. .............. 354,460 770,000
65,000 New Germany Fund Inc. ........ 764,184 958,750
11,000 Spain Fund Inc. .............. 103,029 161,562
------------ ------------
3,277,295 5,286,744
------------ ------------
COMMUNICATIONS EQUIPMENT -- 1.0%
110,000 Allen Telecom Inc.+ .......... 1,138,364 1,753,125
100,000 Communications
Systems Inc. ................ 556,544 1,750,000
------------ ------------
1,694,908 3,503,125
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 1.6%
1,000 @Home Corp., Ser. A+ ......... 10,375 32,938
3,000 Anacomp Inc. ................. 47,205 46,687
92,500 Bull Run Corp.+ .............. 323,637 370,000
3,000 Cylink Corp. ................. 13,728 43,500
25,000 Internet.com Corp.+ .......... 359,125 1,046,875
200 Macromedia Inc.+ ............. 2,370 18,062
63,000 Phoenix Technologies Ltd.+ ... 455,448 1,330,875
18,000 QuadraMed Corp.+ ............. 149,193 103,500
430,000 Tyler Technologies Inc. ...... 1,754,305 2,553,125
------------ ------------
3,115,386 5,545,562
------------ ------------
CONSUMER PRODUCTS -- 4.4%
3,000 Action Performance
Companies Inc.+ ............. 86,846 39,937
22,000 Adams Golf Inc.+ ............. 107,620 36,437
30,000 Ashworth Inc.+ ............... 128,906 129,375
275,000 Carter-Wallace Inc. .......... 4,124,376 5,156,250
45,000 Church & Dwight Co. Inc. ..... 459,562 773,437
12,000 Coachmen Industries Inc. ..... 80,758 165,750
MARKET
SHARES COST VALUE
------ ---- ------
3,000 Department 56 Inc.+ .......... $ 67,175 $ 44,437
8,000 French Fragrances Inc.+ ...... 78,490 63,000
139,000 General Cigar Holdings Inc.+ . 1,494,875 2,102,375
133,500 General Cigar Holdings Inc.,
Cl. B+ (a) .................. 1,076,798 2,010,844
60,000 Genlyte Group Inc.+ .......... 229,060 1,170,000
2,000 Harley-Davidson Inc. ......... 9,425 158,750
115,000 Hartmarx Corp.+ .............. 716,013 316,250
10,000 Madden (Steven) Ltd. ......... 86,785 190,000
29,000 National Presto
Industries Inc. ............. 1,195,961 946,125
13,000 Nature's Sunshine
Products Inc. ............... 255,865 104,000
3,000 Scotts Co., Cl. A+ ........... 46,027 126,000
8,000 Skyline Corp. ................ 142,678 173,500
14,000 Stewart Enterprises Inc., Cl. A 65,467 69,125
120,000 Weider Nutrition
International Inc. ......... 788,886 427,500
70,000 Wolverine World Wide Inc. .... 834,021 770,000
------------ ------------
12,075,594 14,973,092
------------ ------------
CONSUMER SERVICES -- 1.0%
30,000 Bowlin Outdoor Advertising &
Travel Centers Inc.+ ........ 150,843 155,625
6,000 Collectors Universe Inc. ..... 42,437 39,000
40,000 Loewen Group Inc. ............ 60,400 28,000
1,000 Martha Stewart Living
Inc., Cl. A+ ................ 18,000 27,000
50,000 Ogden Corp ................... 676,001 596,875
20,000 Response USA Inc.+ ........... 78,080 21,250
162,000 Rollins Inc. ................. 3,206,884 2,409,750
------------ ------------
4,232,645 3,277,500
------------ ------------
DIVERSIFIED INDUSTRIAL -- 5.4%
99,500 Ampco-Pittsburgh Corp. ....... 966,406 1,082,062
8,000 Anixter International Inc.+ .. 76,160 223,000
65,000 Crane Co. .................... 774,600 1,531,562
61,000 Gardner Denver
Machinery Corp.+ ............ 512,638 1,147,562
15,000 GATX Corp. ................... 605,000 570,000
94,000 GenTek Inc. .................. 1,033,512 1,316,000
39,000 Katy Industries Inc. ......... 519,481 358,312
455,000 Lamson & Sessions Co.+ ....... 2,606,587 3,384,062
75,000 Lindsay Manufacturing Co. .... 725,857 1,284,375
60,000 MagneTek Inc. ................ 576,807 547,500
1,000 Matthews International
Corp., Cl. A ................ 24,312 22,625
25,000 Myers Industries Inc. ........ 467,583 300,000
610,400 Noel Group Inc.+ ............. 222,822 301,421
See accompanying notes to financial statements.
9
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
DIVERSIFIED INDUSTRIAL (CONTINUED)
40,000 Oil-Dri Corporation of America $ 553,600 $ 302,500
130,000 Park-Ohio Holdings Corp.+ .... 1,786,262 1,381,250
22,000 Standex International Corp. .. 625,875 341,000
2,000 Tech/Ops Sevcon Inc. ......... 21,913 19,750
190,000 Thomas Industries Inc. ....... 1,683,550 3,562,500
60,000 WHX Corp.+ ................... 690,469 412,500
------------ ------------
14,473,434 18,087,981
------------ ------------
EDUCATIONAL SERVICES -- 0.0%
22,000 Whitman Education
Group Inc.+ ................. 109,868 49,500
------------ ------------
ELECTRONICS -- 3.8%
670,001 Oak Technology Inc.+ ......... 3,140,121 12,897,510
------------ ------------
ENERGY AND UTILITIES -- 4.4%
40,000 AGL Resources Inc. ........... 746,290 735,000
6,000 Basin Exploration Inc.+ ...... 93,115 89,625
4,000 Birmingham Utilities Inc. .... 82,594 60,125
20,000 CH Energy Group Inc. ......... 867,400 607,500
10,000 Chesapeake Utilities Corp. ... 187,062 169,375
5,000 Connecticut Water
Service Inc. ................ 148,553 141,875
25,000 E'Town Corp. ................. 1,373,702 1,581,250
25,000 Eastern Enterprises .......... 1,083,108 1,496,875
10,000 Fall River Gas Co. ........... 185,325 215,000
42,000 Florida Public Utilities Co. . 655,350 551,250
130,000 Kaneb Services Inc.+ ......... 436,625 715,000
15,000 Petroleum Geo-Services ASA+ .. 239,369 259,688
300,000 RPC Inc. ..................... 1,200,731 2,831,250
6,000 SJW Corp ..................... 692,727 702,000
110,000 Southwest Gas Corp. .......... 1,915,596 2,096,875
15,000 Tesoro Petroleum Corp. ....... 209,500 172,500
5,000 TransMontaigne Oil Co. ....... 71,188 34,063
49,000 United Water Resources Inc. .. 1,062,895 1,702,750
40,000 Waterlink Inc. ............... 109,000 110,000
15,000 WICOR Inc. ................... 345,521 465,000
------------ ------------
11,705,651 14,737,001
------------ ------------
ENTERTAINMENT -- 5.8%
15,000 Dover Downs
Entertainment Inc.+ ......... 201,863 191,250
45,000 Fisher Companies Inc. ........ 2,918,370 2,812,500
50,000 GC Companies Inc.+ ........... 2,057,500 1,737,500
2,500 International Speedway Corp. . 45,000 112,500
10,000 Liberty Digital Inc.+ ........ 43,671 385,000
MARKET
SHARES COST VALUE
------ ---- ------
9,656 Liberty Media Group, Cl. A+ .. $ 148,014 $ 572,118
2,000 Loews Cineplex
Entertainment Corp.+ ........ 24,350 7,000
3,000 Metromedia International
Group Inc.+ ................. 26,925 16,875
45,000 Topps Co. Inc.+ .............. 213,634 374,063
170,000 TV Guide Inc., Cl. A+ ........ 1,284,657 8,170,625
230,000 USA Networks Inc.+ ........... 1,966,179 5,189,375
1,500 World Wrestling Federation ...
Entertainment Inc.+ ......... 24,250 26,602
------------ ------------
8,954,413 19,595,408
------------ ------------
EQUIPMENT AND SUPPLIES -- 13.5%
14,000 Alltrista Corp.+ ............. 262,292 316,750
145,000 AMETEK Inc. .................. 1,658,858 2,791,250
15,000 Amphenol Corp., Cl. A+ ....... 511,537 1,533,750
320,000 Baldwin Technology Co.
Inc., Cl. A+ ................ 1,529,709 620,000
55,000 Belden Inc. .................. 937,120 1,512,500
6,000 Bway Corp.+ .................. 82,444 45,750
8,000 C&D Technologies Inc. ........ 199,232 472,000
100,000 CIRCOR International Inc.+ ... 1,058,034 1,331,250
260,000 CLARCOR Inc. ................. 3,021,973 4,615,000
5,000 Commercial Intertech Corp. ... 66,438 98,438
65,000 Core Materials Corp. ......... 210,581 105,625
15,000 CTS Corp. .................... 30,540 855,000
76,000 Cuno Inc.+ ................... 1,269,606 2,061,500
9,000 Danaher Corp. ................ 303,554 459,000
257,600 Fedders Corp. ................ 1,536,999 1,432,900
125,000 Flowserve Corp. .............. 2,442,422 1,609,375
54,800 Franklin Electric Co. ........ 1,687,631 3,500,350
40,000 General Magnaplate Corp. ..... 83,763 117,500
70,000 Gerber Scientific Inc. ....... 955,212 1,351,875
17,775 Gorman-Rupp Co. .............. 276,467 279,956
17,000 Graco Inc. ................... 433,361 493,000
145,000 Hussmann International Inc. .. 1,990,678 1,839,688
47,000 IDEX Corp. ................... 438,725 1,280,750
32,000 Johnston Industries Inc. ..... 254,514 88,000
10,000 K-Tron International Inc.+ ... 74,933 161,250
116,000 Kollmorgen Corp. ............. 1,335,247 1,595,000
10,000 Littelfuse Inc.+ ............. 68,313 366,875
22,000 Lufkin Industries Inc. ....... 389,520 319,000
130,000 Mark IV Industries Inc. ...... 2,537,107 2,868,125
20,000 Met-Pro Corp. ................ 262,406 182,500
2,000 Plantronics Inc.+ ............ 15,396 186,375
39,000 Raytech Corp.+ ............... 166,300 148,688
10,000 Robbins & Myers Inc. ......... 98,665 236,250
30,000 Roper Industries Inc. ........ 220,050 1,018,125
3,500 Sames Corp. .................. 61,294 49,438
See accompanying notes to financial statements.
10
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
EQUIPMENT AND SUPPLIES (CONTINUED)
40,000 Sequa Corp., Cl. A+ .......... $ 1,477,615 $ 1,585,000
13,500 Sequa Corp., Cl. B+ .......... 879,802 637,875
60,000 SL Industries Inc. ........... 792,587 555,000
1,000 Smith (A.O.) Corp. ........... 16,550 18,000
9,000 Smith (A.O.) Corp., Cl. A .... 249,550 162,000
74,000 SPS Technologies Inc.+ ....... 2,273,458 2,257,000
5,000 Teleflex Inc. ................ 76,167 177,500
15,000 Tennant Co. .................. 392,120 465,000
150,000 UCAR International Inc.+ ..... 3,008,468 1,978,125
5,000 Valmont Industries Inc. ...... 40,625 86,250
7,875 Watsco Inc., Cl. B ........... 23,627 81,703
145,000 Watts Industries Inc., Cl. A . 1,927,307 1,794,375
------------ ------------
37,628,797 45,740,661
------------ ------------
FINANCIAL SERVICES -- 3.9%
32,000 Argonaut Group Inc. .......... 776,779 642,000
25,001 Baker, Fentress & Co. ........ 668,298 301,571
68,000 Berliner Bank Aktienge-
sellschaft .................. 1,408,705 1,113,439
45,000 Danielson Holding Corp.+ ..... 165,200 286,875
20,000 Duff & Phelps Credit
Rating Co. .................. 1,987,250 1,993,750
3,000 Federal Agricultural
Mortgage Corp., Cl. C+ ...... 24,000 46,500
45,000 Gainsco Inc. ................. 291,025 264,375
18,000 Hibernia Corp., Cl. A ........ 140,063 189,000
3,000 LandAmerica Financial Group .. 41,015 58,125
15,000 Metris Companies Inc. ........ 211,831 583,125
104,100 Midland Co. .................. 1,487,050 2,446,350
1,500 Net.B@nk Inc.+ ............... 6,000 19,500
230,000 Pioneer Group Inc.+ .......... 4,290,873 5,347,500
------------ ------------
11,498,089 13,292,110
------------ ------------
FOOD AND BEVERAGE -- 3.3%
12,000 Advantica Restaurant
Group Inc.+ ................. 124,643 18,000
22,000 Ben & Jerry's
Homemade Inc., Cl. A+ ....... 591,825 738,375
34,863 Buenos Aires
Embotelladora SA (a) ........ 0 0
150,000 Celestial Seasonings Inc.+ ... 1,892,961 5,156,250
6,000 Cheesecake Factory Inc.+ ..... 65,061 249,750
1,700 Farmer Brothers Co. .......... 248,299 304,300
20,000 Genesee Corp., Cl. B ......... 765,067 420,000
10,000 International Multifoods
Corp. ....................... 199,921 133,750
23,000 J & J Snack Foods Corp.+ ..... 329,207 457,125
10,000 Midwest Grain Products Inc. .. 160,371 63,750
MARKET
SHARES COST VALUE
------ ---- ------
4,000 Mondavi (Robert) Corp.+ ...... $ 137,188 $ 139,500
1,000 Northland Cranberries Inc.,
Cl. A ....................... 7,625 5,438
2,000 Omni Nutraceuticals Inc ...... 11,500 14,000
130,000 PepsiAmericas Inc.+ .......... 760,178 438,750
50,000 Ralcorp Holdings Inc.+ ....... 727,509 725,000
32,608 Tootsie Roll Industries Inc. . 556,724 1,027,144
100,000 Twinlab Corp.+ ............... 1,486,745 712,500
48,000 Whitman Corp. ................ 740,400 669,000
------------ ------------
8,805,224 11,272,632
------------ ------------
HEALTH CARE -- 2.6%
10,000 Block Drug Co. Inc., Cl. A ... 312,870 275,625
21,500 Del Global
Technologies Corp.+ ......... 189,088 182,750
92,000 Inamed Corp.+ ................ 2,368,907 4,554,000
20,000 IVAX Corp.+ .................. 119,838 545,000
25,300 Life Technologies Inc. ....... 1,039,874 1,265,000
10,000 Nabi+ ........................ 70,938 67,500
48,000 Penwest Pharmaceuticals Co. .. 327,279 591,000
80,000 Rexall Sundown Inc.+ ......... 1,063,437 1,130,000
3,620 U.S. Physical Therapy Inc.+ .. 22,625 33,938
40,000 Women First Health
Care Inc.+ .................. 290,375 190,000
------------ ------------
5,805,231 8,834,813
------------ ------------
HOME FURNISHINGS -- 0.8%
7,000 Bassett Furniture
Industries Inc. ............. 164,478 98,000
2,000 Bed Bath & Beyond Inc.+ ...... 11,125 78,750
187,550 Carlyle Industries Inc.+ ..... 78,647 143,593
17,000 Foamex International Inc. .... 145,935 160,438
30,000 La-Z-Boy Chair Co. ........... 218,125 461,250
50,000 Mikasa Inc. .................. 698,044 371,875
70,000 Oneida Ltd. .................. 732,976 1,356,250
------------ ------------
2,049,330 2,670,156
------------ ------------
HOTELS AND GAMING -- 4.7%
440,000 Aztar Corp.+ ................. 2,988,411 4,180,000
115,000 Boca Resorts Inc., Cl. A+ .... 1,532,876 984,688
15,000 Boyd Gaming Corp.+ ........... 132,500 74,063
60,000 Bristol Hotels &
Resorts Inc.+ ............... 565,500 570,000
20,000 Churchill Downs Inc. ......... 416,463 527,500
55,000 Extended Stay America Inc.+ .. 629,984 412,500
96,000 Gaylord Entertainment Co. .... 2,894,603 2,604,000
200,000 Jackpot Enterprises Inc. ..... 2,155,619 3,325,000
5,000 Jurys Hotel Group plc ........ 27,762 33,275
30,000 Lakes Gaming Inc.+ ........... 433,680 238,125
69,000 Mirage Resorts Inc.+ ......... 614,568 1,336,875
See accompanying notes to financial statements.
11
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
HOTELS AND GAMING (CONTINUED)
90,000 Park Place Entertainment Corp.+ $ 840,196 $ 1,040,625
25,000 Penn National Gaming Inc.+ ... 248,260 277,734
2,000 Station Casinos Inc.+ ........ 13,350 43,625
90,000 Trump Hotels & Casino
Resorts Inc.+ ............... 838,114 286,875
6,000 Youbet.com Inc.+ ............. 33,000 26,250
------------ ------------
14,364,886 15,961,135
------------ ------------
METALS AND MINING -- 0.6%
250,000 Echo Bay Mines Ltd.+ ......... 935,414 328,125
190,000 Royal Oak Mines Inc.+ ........ 322,487 1,900
28,000 Stillwater Mining Co.+ ....... 379,317 1,120,000
5,000 Toreador Royalty Corp.+ ...... 19,063 27,500
545,000 TVX Gold Inc.+ ............... 925,628 408,750
------------ ------------
2,581,909 1,886,275
------------ ------------
PAPER AND FOREST PRODUCTS -- 1.3%
133,000 Greif Bros. Corp., Cl. A ..... 2,614,791 4,239,375
------------ ------------
PUBLISHING -- 4.3%
121,278 Independent News &
Media plc, Dublin ........... 380,260 1,190,330
10,000 Lee Enterprises Inc. ......... 239,924 261,250
40,000 McClatchy Newspapers
Inc., Cl. A ................. 943,061 1,310,000
62,000 Media General Inc., Cl. A .... 1,449,118 3,247,250
23,000 Meredith Corp. ............... 329,933 636,813
170,000 Penton Media Inc. ............ 1,975,204 4,420,000
45,000 Pulitzer Inc. ................ 737,211 1,839,375
200,000 Thomas Nelson Inc. ........... 2,260,295 1,587,500
12,000 Wiley (John) & Sons Inc., Cl. B 46,500 205,500
------------ ------------
8,361,506 14,698,018
------------ ------------
REAL ESTATE -- 1.2%
160,000 Catellus Development Corp.+ .. 1,884,085 2,220,000
118,000 Griffin Land & Nurseries Inc.+ 1,471,129 1,298,000
9,000 Gyrodyne Company of
America Inc.+ ............... 154,268 189,000
160,000 Meditrust Companies .......... 423,436 290,000
------------ ------------
3,932,918 3,997,000
------------ ------------
RETAIL -- 3.1%
60,000 Aaron Rents Inc. ............. 461,298 903,750
46,000 Aaron Rents Inc., Cl. A ...... 211,041 787,750
5,000 Borders Group Inc.+ .......... 98,063 85,938
105,000 Burlington Coat Factory
Warehouse Corp. ............. 1,120,021 1,804,688
MARKET
SHARES COST VALUE
------ ---- ------
25,000 Coldwater Creek Inc.+ ........ $ 488,166 $ 425,000
8,000 Gerald Stevens Inc.+ ......... 96,000 64,000
120,000 Ingles Markets Inc., Cl. A ... 1,532,344 1,252,500
210,000 Lillian Vernon Corp. ......... 3,383,836 1,995,000
95,000 Neiman Marcus Group Inc.+ .... 1,272,266 2,642,188
120,000 Sports Authority Inc.+ ....... 914,969 307,500
3,000 Weis Markets Inc. ............ 117,431 102,000
------------ ------------
9,695,435 10,370,314
------------ ------------
SATELLITE -- 0.5%
4,000 Pegasus Communications
Corp.+ ...................... 70,830 563,000
60,000 TCI Satellite Entertainment
Inc., Cl. A+ ................ 279,251 1,147,500
------------ ------------
350,081 1,710,500
------------ ------------
SPECIALTY CHEMICALS -- 2.9%
35,000 Airgas Inc. .................. 454,837 290,938
80,000 Bush Boake Allen Inc.+ ....... 2,091,543 2,225,000
45,000 Dexter Corp. ................. 1,526,224 2,385,000
116,000 Ferro Corp. .................. 2,238,674 2,066,250
2,000 Fuller (H.B.) Co. ............ 78,102 79,875
70,000 General Chemical Group Inc. .. 270,982 148,750
600 MacDermid Inc. ............... 2,200 15,900
115,000 Material Sciences Corp.+ ..... 1,100,827 1,552,500
68,000 Omnova Solutions Inc. ........ 487,904 382,500
35,000 Penford Corp ................. 332,776 634,375
11,000 Sybron Chemicals Inc.+ ....... 180,613 155,375
------------ ------------
8,764,682 9,936,463
------------ ------------
TELECOMMUNICATIONS -- 2.8%
23,000 ARC International Corp. ...... 125,555 17,250
9,200 Atlantic Tele-Network Inc. ... 92,644 109,250
79,000 Citizens Utilities Co., Cl. B+ 751,755 1,293,625
47,300 Commonwealth Telephone
Enterprises Inc.+ ........... 875,751 2,220,144
20,000 Commonwealth Telephone
Enterprises Inc., Cl. B+ .... 140,936 930,000
49,500 CoreComm Ltd.+ ............... 148,225 2,178,000
60,000 GST Telecommunications
Inc.+ ....................... 681,753 367,500
6,000 RCN Corp.+ ................... 26,817 323,250
32,000 Rogers Communications Inc.,
Cl. B, ADR+ ................. 270,228 954,000
20,000 Viatel Inc.+ ................. 247,945 1,003,750
------------ ------------
3,361,609 9,396,769
------------ ------------
TRANSPORTATION -- 0.1%
2,000 Irish Continental Group plc .. 18,258 22,981
50,000 OMI Corp. .................... 313,120 190,625
------------ ------------
331,378 213,606
------------ ------------
See accompanying notes to financial statements.
12
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
WIRELESS COMMUNICATIONS -- 0.2%
3,000 Centennial Cellular
Corp., Cl. A+ ............... $ 11,042 $ 72,938
1,500 Rural Cellular Corp., Cl. A+ . 20,310 101,344
7,000 Teligent Inc., Cl. A ......... 150,500 467,688
100 Tritel Inc., Cl. A+ .......... 1,800 3,825
500 Western Wireless Corp., Cl. A+ 5,249 22,906
------------ ------------
188,901 668,701
------------ ------------
TOTAL COMMON STOCKS .......... 247,653,098 325,583,252
------------ ------------
PREFERRED STOCKS -- 0.4%
DIVERSIFIED INDUSTRIAL -- 0.4%
47,000 WHX Corp.,
$3.75 Cv. Pfd., Ser. B ...... 1,316,000 1,081,000
5,000 WHX Corp.,
6.50% Cv. Pfd., Ser. A ...... 160,000 135,000
------------ ------------
1,476,000 1,216,000
------------ ------------
TOTAL PREFERRED STOCKS ....... 1,476,000 1,216,000
------------ ------------
PRINCIPAL
AMOUNT
---------
CONVERTIBLE BONDS -- 0.0%
COMPUTER SOFTWARE AND SERVICES -- 0.0%
$ 500 MSC.Software Corp.,
Sub. Deb. Cv.
7.88%, 08/18/04 ............. 75 503
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 1.7%
5,810,000 U.S. Treasury Bills,
5.35% to 6.06%++,
due 04/06/00 to 06/08/00 .... 5,772,705 5,773,509
------------ ------------
MARKET
COST VALUE
---- ------
TOTAL
INVESTMENTS -- 98.5% ........ $254,901,878 $332,573,264
============
OTHER ASSETS AND
LIABILITIES (NET) -- 1.5% .................. 5,048,037
------------
NET ASSETS -- 100%
(15,182,697 shares outstanding) ............ $337,621,301
============
- ------------------------
For Federal tax purposes:
Aggregate cost .............................. $254,901,878
============
Gross unrealized appreciation ............... $109,158,366
Gross unrealized depreciation ............... (31,486,980)
------------
Net unrealized appreciation ................. $ 77,671,386
============
- ------------------------
(a) Security fair valued under procedures established by the Board of
Directors.
(b) Security considered an affiliated holding because the Fund owns at least
5% of the outstanding shares.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
13
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value
(Cost $254,901,878) ................. $332,573,264
Cash and foreign currency,
at value ($6,900) ................... 6,456
Dividends receivable .................. 321,750
Receivable for investments sold ....... 7,010,643
Receivable for capital shares sold .... 166,901
------------
TOTAL ASSETS .......................... 340,079,014
------------
LIABILITIES:
Payable for investments purchased ..... 1,899,703
Payable for capital shares redeemed ... 37,750
Payable for investment advisory fees .. 283,367
Payable for distribution fees ......... 70,842
Payable for custodian fees ............ 12,800
Other accrued expenses ................ 153,251
------------
TOTAL LIABILITIES ..................... 2,457,713
------------
NET ASSETS applicable to 15,182,697
shares outstanding .................. $337,621,301
============
NET ASSETS CONSIST OF:
Capital stock, at par value ........... $ 15,183
Additional paid-in capital ............ 232,082,697
Accumulated net investment income ..... 259,156
Accumulated net realized gain
on investments and foreign currency
transactions ........................ 27,593,331
Net unrealized appreciation on investments
and foreign currency transactions ... 77,670,934
------------
TOTAL NET ASSETS ...................... $337,621,301
============
NET ASSET VALUE, offering and redemption
price per share ($337,621,301 / 15,182,697
shares outstanding; unlimited number of
shares authorized of $0.001 par value) $22.24
======
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends ............................. $ 2,362,006
Interest .............................. 338,181
-----------
TOTAL INVESTMENT INCOME ............... 2,700,187
-----------
EXPENSES:
Investment advisory fees .............. 1,622,455
Distribution fees ..................... 405,610
Shareholder services fees ............. 221,334
Shareholder report expenses ........... 91,605
Custodian fees ........................ 36,667
Legal and audit fees .................. 20,726
Directors' fees ....................... 18,133
Registration fees ..................... 17,712
Interest expense ...................... 128
Miscellaneous expenses ................ 6,661
-----------
TOTAL EXPENSES ........................ 2,441,031
-----------
NET INVESTMENT INCOME ................. 259,156
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ...... 31,322,490
Net change in unrealized appreciation
on investments and foreign currency
transactions ........................ 11,012,000
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS ........................ 42,334,490
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ..................... $42,593,646
===========
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31, 2000 YEAR ENDED
(UNAUDITED) SEPTEMBER 30, 1999
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) .............................................. $ 259,156 $ (1,018,942)
Net realized gain on investments and foreign currency transactions ........ 31,322,490 32,777,593
Net change in unrealized appreciation on investments
and foreign currency transactions ....................................... 11,012,000 19,961,942
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................ 42,593,646 51,720,593
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments .......................................... (34,529,473) (8,006,838)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ....................................... (34,529,473) (8,006,838)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net increase (decrease) in net assets from capital share transactions ..... 24,154,412 (16,130,819)
------------ ------------
NET INCREASE IN NET ASSETS ................................................ 32,218,585 27,582,936
NET ASSETS:
Beginning of period ....................................................... 305,402,716 277,819,780
------------ ------------
End of period ............................................................. $337,621,301 $305,402,716
============ ============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Small Cap Growth Fund (the "Fund"), a series of
Gabelli Equity Series Funds, Inc. (the "Corporation"), was organized on July 25,
1991 as a Maryland corporation. The Fund is a diversified, open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), and one of two separately managed portfolios
(collectively, the "Portfolios") of the Corporation, each with four separate
classes of shares known as Class AAA, Class A, Class B and Class C. Currently,
only Class AAA Shares are offered to the public. The Fund's primary objective is
capital appreciation. The Fund commenced investment operations on October 22,
1991.
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, except for open short positions, which are
valued at the last asked price). 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 "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 Directors. Short term debt securities with remaining maturities of 60 days or
less are valued at amortized cost, unless the Directors 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 Directors. Debt instruments
having a maturity greater than 60 days are valued at the highest bid price
obtained from a dealer maintaining an active market in those securities. Options
are valued at the last sale price on the exchange on which they are listed. If
no sales of such options have taken place that day, they will be valued at the
mean between their closing bid and asked prices.
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 Directors. 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
15
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
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.
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin". Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuation of the
value of the contract. The daily changes in the contract are included in
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. At March 31, 2000, there were no open futures contracts.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency transactions. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain/(loss) that might result
should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts.
FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained
in United States (U.S.) dollars. Foreign currencies, investments and other
assets and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated at the exchange rate prevailing
on the respective dates of such transactions. Unrealized gains and losses, which
result from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in unrealized appreciation/depreciation on
investments and foreign currency transactions. Net realized foreign currency
gains and losses resulting from changes in exchange rates include foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, foreign currency transactions and the difference
between the amounts of interest and dividends recorded on the books of the Fund
and the amounts actually received. The portion of foreign currency gains and
losses related to fluctuation in exchange rates between the initial trade date
and subsequent sale trade date is included in realized gain/(loss) on
investments.
16
<PAGE>
THE GABELLI SMALL CAP 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.
EXPENSES. Certain administrative expenses are common to, and allocated among,
the Portfolios. Such allocations are made on the basis of each Portfolio's
average net assets or other criteria directly affecting the expenses as
determined by the Adviser.
PROVISION FOR INCOME TAXES. The Fund 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.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Fund intends to undertake any procedural steps
required to claim the benefits of such treaties.
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 Directors of the Fund who are its affiliates.
4. DISTRIBUTION PLAN. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the six months
ended March 31, 2000, the Fund incurred distribution costs payable to Gabelli &
Company, Inc., an affiliate of the Adviser, of $405,610, or 0.25% of average
daily net assets, the annual limitation under the Plan. Such payments are
accrued daily and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and sales of securities for the six months
ended March 31, 2000, other than short term securities, aggregated $55,062,751
and $59,616,112, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2000, the
Fund paid brokerage commissions of $83,953 to Gabelli & Company, Inc. and its
affiliates.
7. LINE OF CREDIT. The Fund has access to an unsecured line of credit 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 outstanding at March 31, 2000.
17
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The average amount of borrowings outstanding daily during the six months ended
March 31, 2000, was $72,678, with a related weighted average interest rate of
6.31%. The maximum amount borrowed at any time during the six months ended March
31, 2000, was $700,000.
8. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2000 SEPTEMBER 30, 1999
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold ...................................... 3,431,171 $74,639,375 7,363,983 $155,723,402
Shares issued upon reinvestment of dividends ..... 1,606,332 33,008,696 386,789 7,658,321
Shares redeemed .................................. (3,841,600) (83,493,659) (8,536,838) (179,512,542)
---------- ----------- ---------- ------------
Net increase ................................ 1,195,903 $24,154,412 (786,066) $(16,130,819)
========== =========== ========== ============
</TABLE>
9. TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS. The 1940 Act defines
affiliated issuers as those in which the Fund's holdings of an issuer represent
5% or more of the outstanding voting securities of the issuer. A summary of the
Fund's transactions in the securities of these issuers during the six months
ended March 31, 2000, is set forth below:
<TABLE>
<CAPTION>
PERCENT
SHARES VALUE AT OWNED
BEGINNING PURCHASED ENDING REALIZED DIVIDEND MARCH OF SHARES
SHARES (SOLD) SHARES (LOSS) INCOME 31, 2000 OUTSTANDING
--------- --------- ------ -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Trans-Lux Corp. ........... 87,000 -- 87,000 $ 0 $9,135 $587,250 9.06%
------ --------- ------ -------- ------ -------- ----
</TABLE>
18
<PAGE>
THE GABELLI SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 2000 -------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period ....... $ 21.84 $ 18.81 $ 25.42 $ 20.02 $ 19.34 $ 17.24
------- ------- ------- ------- ------- -------
Net investment income (loss) ............... 0.02 (0.07) (0.03) (0.07) (0.09) (0.04)
Net realized and unrealized gain (loss)
on investments ........................... 2.84 3.63 (2.99) 7.70 2.11 3.17
------- ------- ------- ------- ------- -------
Total from investment operations ........... 2.86 3.56 (3.02) 7.63 2.02 3.13
------- ------- ------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments ........... (2.46) (0.53) (3.59) (2.23) (1.34) (1.03)
------- ------- ------- ------- ------- -------
Total distributions ........................ (2.46) (0.53) (3.59) (2.23) (1.34) (1.03)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ............. $ 22.24 $ 21.84 $ 18.81 $ 25.42 $ 20.02 $ 19.34
======= ======= ======= ======= ======= =======
Total return+ .............................. 14.00% 19.24% (13.53)% 42.22% 10.97% 19.66%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ....... $337,621 $305,403 $277,820 $296,519 $223,239 $231,156
Ratio of net investment income (loss)
to average net assets .................... 0.16%(b) (0.34)% (0.14)% (0.36)% (0.42)% (0.24)%
Ratio of operating expenses
to average net assets (a) ................ 1.50%(b) 1.56% 1.44% 1.62% 1.58% 1.54%
Portfolio turnover rate .................... 18% 24% 20% 14% 11% 17%
</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) The Fund incurred interest expense during the six months ended March 31,
2000 and the fiscal years ended September 30, 1999 and 1997. If interest
expense had not been incurred, the ratios of operating expenses to average
net assets would have been 1.50%, 1.53% and 1.52%, respectively.
(b) Annualized.
See accompanying notes to financial statements.
19
<PAGE>
Gabelli Equity Series Funds, Inc.
THE GABELLI SMALL CAP GROWTH FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
FAX: 1-914-921-5118
HTTP://WWW.GABELLI.COM
E-MAIL: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Robert J. Morrissey
CHAIRMAN AND CHIEF ATTORNEY-AT-LAW
INVESTMENT OFFICER MORRISSEY, HAWKINS & LYNCH
GABELLI ASSET MANAGEMENT INC.
Felix J. Christiana Karl Otto Pohl
FORMER SENIOR VICE PRESIDENT FORMER PRESIDENT
DOLLAR DRY DOCK SAVINGS BANK DEUTSCHE BUNDESBANK
Anthony J. Colavita Anthony R. Pustorino
ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT
ANTHONY J. COLAVITA, P.C. PROFESSOR, PACE UNIVERSITY
Vincent D. Enright Anthonie C. van Ekris
FORMER SENIOR VICE PRESIDENT MANAGING DIRECTOR
AND CHIEF FINANCIAL OFFICER BALMAC INTERNATIONAL, INC.
KEYSPAN ENERGY CORP.
John D. Gabelli
SENIOR VICE PRESIDENT
GABELLI & COMPANY, INC.
OFFICERS
Mario J. Gabelli, CFA Bruce N. Alpert
PRESIDENT AND CHIEF VICE PRESIDENT AND TREASURER
INVESTMENT OFFICER
James E. McKee
SECRETARY
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 Small Cap Growth Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB443Q100SR
[Photo of Mario J. Gabelli omitted]
THE
GABELLI
SMALL CAP
GROWTH
FUND
SEMI-ANNUAL REPORT
March 31, 2000
