THE GABELLI U.S. TREASURY MONEY MARKET FUND
One Corporate Center
Rye, New York 10580-1434
SEMI-ANNUAL REPORT
MARCH 31, 1998(a)
TO OUR SHAREHOLDERS,
As expected, the Federal Open Market Committee (FOMC) meeting produced a
standard "NO ACTION" statement. The Fed has plenty of reasons to be concerned
about the economic outlook but not enough to do anything about it yet. Most
members of the FOMC probably believe that the next move in the Federal Funds
rate target is more likely to be up than down, but we expect the FOMC to keep a
symmetrical policy directive for at least one more meeting.
There is still reason to expect economic activity to look somewhat weaker
in the spring than it was in the winter. Housing activity has remained
exceptionally strong but consumer spending has declined moderately. Slower
consumer spending combined with a continued widening in the trade deficit should
give the economic data a softer tone until the time of the May meeting. The rise
in the trade deficit with Asia should begin to level out by the summer. Another
healthy release from the National Association of Purchasing Managers signaled
that manufacturers, at least for now, expect a robust domestic demand to more
than offset the loss of customer business from abroad. If domestic financial
conditions remain as strong at mid-year as they are today, the Fed will have to
start thinking seriously about taking action.
We continue to view the market as slightly expensive for the near term,
believing that the Fed will keep policy on hold for the near future. However,
continued slowing of Gross Domestic Product (GDP) (as expected) and the widening
of the trade deficit, concealing the strength of the domestic economy, leads us
to a positive long term outlook on the market, with projected budget surpluses
on the Federal level acting as a real catalyst to lower rates. Our fundamental
view tells us to continue to invest in the short end of this relatively flat
yield curve (four months and in) until value returns to the market.
However, we must be ready to act if, in fact, lower growth begins to show
itself as the second half of the year unfolds. We want to take advantage of any
market volatility, which is a certainty, but we believe that liquidity will soon
be at a premium, and we are willing to hang on to it until any possible
extension has value.
- -----------------------------
(a) The Fund's fiscal year ends September 30, 1998.
<PAGE>
INVESTMENT RESULTS
For the six months ended March 31, 1998, the Gabelli U.S. Treasury Money
Market Fund's total return was 2.84%. The Fund's 7-day annualized yield and
30-day annualized yield on March 31, 1998 were 5.09% and 5.04%, respectively.
Since inception on October 1, 1992 through March 31, 1998, the Fund has an
average annual return of 4.45%. As of March 31, 1998, shareholders total 5,359
and net assets are $308 million. The Fund maintained a stable net asset value of
$1.00 per share throughout the period.
PORTFOLIO MANAGEMENT
On April 14, 1997, Gabelli Funds, Inc., the Fund's Manager, increased its
ownership interest in the Fund's Sub-Advisor, Gabelli-O'Connor Fixed Income
Mutual Funds Management Co. Subsequently, the Sub-Advisor was succeeded by the
newly formed Gabelli Fixed Income LLC, a registered investment advisor
specializing in customized, institutional-based, cash and short-to-intermediate
term fixed income portfolios. Gabelli Fixed Income LLC is an indirect,
majority-owned subsidiary of Gabelli Funds, Inc. Consequently, pursuant to the
Investment Company Act of 1940, as amended, the sub-advisory contract
automatically terminated and Gabelli Funds, Inc. has assumed all of the
sub-advisory responsibilities including managing the portfolio.
MINIMUM INITIAL INVESTMENT - $10,000
The Fund's minimum initial investment is $10,000. However, shareholders of
any of the Gabelli Funds may invest in the Fund with an initial investment of
$3,000. IRAs, retirement accounts and custodial accounts for minors require an
initial investment of only $1,000. The Fund provides check writing and exchange
privileges and continues to offer these services at no charge to shareholders.
The Fund's expenses are voluntarily capped at 0.30% of average net assets,
making it one of the most attractive U.S. Treasury-only money market funds. With
dividends that are exempt from state and local income taxes in all states, the
Fund is an excellent vehicle in which to store idle cash.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, 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].
2
<PAGE>
DAILY DIVIDENDS
The Fund declares daily dividends which are reinvested monthly unless a
cash distribution is requested. The Fund invests exclusively in U.S. Treasury
securities and therefore 100% of the Fund's income dividends are exempt from
state and local income taxes in all states. Please consult your tax advisor for
the applicability to your specific situation.
We thank you for your loyalty and as always, pledge our best efforts on
your behalf as we seek to provide you with competitive returns. Please call us
at 1-800-GABELLI (1-800-422-3554) during the business day for further
information.
Sincerely,
/s/Judith A.Raneri
---------------------
JUDITH A. RANERI
Vice President
and Portfolio Manager
April 30, 1998
An investment in The Gabelli U.S. Treasury Money Market Fund is neither
insured nor guaranteed by the U.S. Government. There can be no assurance that
the Fund will maintain a stable $1 per share net asset value. The Fund's
prospectus contains more complete information, including fees and expenses. The
prospectus should be read carefully before you invest or send money. Yields will
fluctuate. If the Fund's expenses had not been capped, the Fund's 7-day
annualized yield and 30-day annualized yield would have been 4.94% and 4.88%,
respectively.
3
<PAGE>
THE GABELLI U.S. TREASURY MONEY MARKET FUND
STATEMENT OF NET ASSETS -- MARCH 31, 1998 (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD AT DATE MATURITY
AMOUNT OF PURCHASE DATE VALUE
-------- ----------- ------- -----
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 99.4%
U.S. TREASURY BILLS -- 63.2%
$194,595,000 U.S. Treasury Bills ........ 4.400% to 5.096% 04/09/98 - 05/28/98 $194,063,196
------------
INTEREST RATE
-----------
U.S. TREASURY NOTES -- 36.2%
10,000,000 U.S. Treasury Notes ........ 5.125% 04/30/98 9,997,425
81,112,000 U.S. Treasury Notes ........ 5.875% 04/30/98 81,147,652
20,000,000 U.S. Treasury Notes ........ 6.250% 06/30/98 20,043,269
------------
111,188,346
------------
TOTAL INVESTMENTS (Cost $305,251,542)(a) .............................................. 99.4% 305,251,542
PAYABLE FOR FUND SHARES REDEEMED ...................................................... (0.6) (1,906,982)
PAYABLE TO MANAGER .................................................................... (0.0) (34,342)
OTHER ASSETS AND LIABILITIES (NET) .................................................... 1.2 3,767,149
----- -------------
NET ASSETS (307,077,367 shares outstanding, $0.001 par value) ......................... 100.0% $307,077,367
===== =============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE .............................. $1.00
=====
</TABLE>
- ----------------------------------------------
(a) Aggregate cost for Federal tax purposes.
FINANCIAL HIGHLIGHTS
================================================================================
Selected data for a share outstanding throughout each period.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1998 ___________________________________________
(UNAUDITED) 1997 1996 1995 1994 1993+
--------- ------ ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Net investment income (b) ..................... 0.0245 0.0485 0.0492 0.0528 0.0323 0.0271
Net realized gain on investments .............. 0.0005 0.0013 0.0006 0.0002 0.0002 0.0002
------ ------ ------ ------ ------ ------
Total from investment operations .............. 0.0250 0.0498 0.0498 0.0530 0.0325 0.0273
------ ------ ------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ......................... (0.0245) (0.0485) (0.0492) (0.0528) (0.0323) (0.0271)
Net realized gains ............................ (0.0005) (0.0013) (0.0006) (0.0002) (0.0002) (0.0002)
------ ------ ------ ------ ------ ------
Total distributions ........................... (0.0250) (0.0498) (0.0498) (0.0530) (0.0325) (0.0273)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ................ $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ======= ======= ======= =======
================================================================================
Total return++ ................................ 2.8% 5.1% 5.1% 5.4% 3.3% 2.8%
====== ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS / SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......... $307,077 $203,542 $216,038 $218,036 $186,020 $187,709
Ratio of net investment income to average
net assets .................................. 4.91%(d) 4.85% 4.92% 5.30% 3.23% 2.73%
Ratio of operating expenses to average
net assets (c) .............................. 0.30%(d) 0.30% 0.30% 0.27% 0.30% 0.30%
</TABLE>
- ----------------------------------------------
+ From commencement of operations on October 1, 1992.
++ 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.
(b) Net investment income before fees waived by the Manger for the six months
ended March 31, 1998 and the years ended September 30, 1997, 1996, 1995,
1994 and 1993 was $0.0237, $0.0469, $0.0477, $0.0516, $0.0312 and $0.0255,
respectively.
(c) Operating expense ratios before fees waived by the Manager for the six
months ended March 31, 1998 and the years ended September 30, 1997, 1996,
1995, 1994 and 1993 were 0.46%, 0.45%, 0.45%, 0.39%, 0.43% and 0.46%,
respectively.
(d) Annualized
See acccompanying notes to financial statements.
4
<PAGE>
THE GABELLI U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS -- FOR THE SIX MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
================================================================================
INVESTMENT INCOME:
Interest ....................................................... $7,141,062
----------
EXPENSES:
Management fee ................................................. 428,626
Transfer agent fees ............................................ 66,438
Registration fees .............................................. 30,003
Custodian fees ................................................. 21,261
Trustees' fees ................................................. 19,700
Legal and audit fees ........................................... 15,002
Miscellaneous expenses ......................................... 49,372
---------
Total Expenses before fees waived by Manager ................ 630,402
Fees waived by Manager ...................................... (219,286)
---------
TOTAL EXPENSES -- Net ....................................... 411,116
---------
Net Investment Income
NET REALIZED GAIN ON INVESTMENTS .................................. 114,186
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .............. $6,844,132
==========
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR
MARCH 31, ENDED
1998 SEPTEMBER 30,
(UNAUDITED) 1997
---------------- --------------
OPERATIONS:
<S> <C> <C>
Net investment income ................................................. $ 6,729,946 $ 10,272,019
Net realized gain on investments ...................................... 114,186 246,921
-------------- ---------------
Net increase in net assets resulting from operations .................. 6,844,132 10,518,940
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................................................. (6,729,946) (10,272,019)
Net realized gain on investments ...................................... (119,416) (241,691)
SHARE TRANSACTIONS ($1.00 PER SHARE):
Shares sold ........................................................... 864,029,107 2,152,102,612
Shares issued upon reinvestment of dividends and distributions ........ 6,564,260 9,949,097
Shares redeemed ....................................................... (767,052,832) (2,174,552,390)
-------------- ---------------
Net increase (decrease) in net assets ................................. 103,535,305 (12,495,451)
NET ASSETS:
Beginning of period ................................................... 203,542,062 216,037,513
-------------- ---------------
End of period ......................................................... $ 307,077,367 $ 203,542,062
============== ===============
</TABLE>
See acccompanying notes to financial statements.
5
<PAGE>
THE GABELLI U.S. TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES. The Gabelli U.S. Treasury Money Market Fund
(the "Fund"), a series of The Gabelli Money Market Funds (the "Trust"), was
organized on May 21, 1992 as a Delaware business trust. The Fund is a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), whose primary objective
is high current income consistent with the preservation of principal and
liquidity. The Fund commenced operations on October 1, 1992. 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. Investments are valued at amortized cost (which approximates
market value) whereby a portfolio instrument is valued at cost and any discount
or premium is amortized on a constant basis to the maturity of the instrument.
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.
DIVIDENDS AND DISTRIBUTIONS. Dividends from investment income (including
realized capital gains and losses) are declared daily and paid monthly.
Distributions of long term capital gains, if any, are paid annually. PROVISION
FOR INCOME TAXES. The Fund has qualified and intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended. As a result, a Federal income tax provision is not required.
2. AGREEMENTS WITH AFFILIATED PARTIES. The Trust has entered into a management
agreement (the "Management Agreement") with Gabelli Funds, Inc. (the "Manager"),
which provides that the Trust will pay the Manager a fee, computed daily and
paid monthly, at the annual rate of 0.30 percent of the value of the Fund's
average daily net assets. In accordance with the Management Agreement, the
Manager provides a continuous investment program for the Fund's portfolio,
oversees the administration of all aspects of the Fund's business and affairs
and pays the compensation of all Officers and Trustees of the Fund who are its
affiliates. To the extent necessary, the Manager has undertaken to assume
certain expenses of the Trust so that the total expenses do not exceed 0.30
percent of the Fund's average daily net assets. For the six months ended March
31, 1998, the Manager voluntarily waived management fees of $219,286.
6
<PAGE>
Gabelli Family of Funds
GABELLI ASSET FUND ____________________________________________________________
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital.
(No-load) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI GROWTH FUND ____________________________________________________________
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation.
(No-Load) PORTFOLIO MANAGER: HOWARD F. WARD, CFA
GABELLI WESTWOOD EQUITY FUND ___________________________________________________
Seeks to invest primarily in the common stock of seasoned companies believed to
have proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation.
(No-load) PORTFOLIO MANAGER: SUSAN M. BYRNE
GABELLI SMALL CAP GROWTH FUND __________________________________________________
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $500 million) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(No-load) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI WESTWOOD SMALLCAP EQUITY FUND __________________________________________
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $1 billion or less. The Fund's primary objective is long-term capital
appreciation.
(No-load) PORTFOLIO MANAGER: LYNDA CALKIN, CFA
GABELLI WESTWOOD INTERMEDIATE BOND FUND ________________________________________
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return.
(No-load) PORTFOLIO MANAGER: PATRICIA FRAZE
GABELLI EQUITY INCOME FUND _____________________________________________________
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays quarterly dividends and seeks a high level of total return with an
emphasis on income.
(No-load) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI WESTWOOD BALANCED FUND _________________________________________________
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(No-load) PORTFOLIO MANAGERS: SUSAN M. BYRNE & PATRICIA FRAZE
GABELLI WESTWOOD MIGHTY MITES(SM) FUND _________________________________________
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(No-Load) TEAM MANAGER: MARIO J. GABELLI, CFA
GABELLI VALUE FUND _____________________________________________________________
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. Max. Sales charge:
51/2%
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI ABC FUND ______________________________________________________________
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss.
(No-load) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI U.S. TREASURY MONEY MARKET FUND ________________________________________
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. An investment in a Money Market Fund is
neither insured nor guaranteed by the U.S. Government and there can be no
assurance that the Funds will be able to maintain a stable net asset value of
$1.00 per share.
(No-load) PORTFOLIO MANAGER: JUDITH A. RANERI
THE TREASURER'S FUND ___________________________________________________________
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market seeks to invest in
U.S. Treasury bills, notes and bonds. Tax Exempt Money Market seeks to invest in
municipal securities. Domestic Prime Money Market seeks to invest in prime
quality, domestic money market instruments.
(No-Load) PORTFOLIO MANAGER: JUDITH A. RANERI
GLOBAL SERIES
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world - targeting
undervalued companies with strong earnings and cash flow dynamics. The Fund's
primary objective is capital appreciation.
(No-load) TEAM MANAGER: MARIO J. GABELLI, CFA
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are convertible
into common stock of foreign and domestic companies. The Fund's primary
objective is total return through a combination of current income and capital
appreciation.
(No-load) PORTFOLIO MANAGER: HART WOODSON
GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
Seeks to invest in securities of companies involved with communications,
creativity and copyright. The Fund also seeks to invest in companies
participating in emerging technological advances in interactive services and
products.
The Fund's primary objective is capital appreciation.
(No-load) PORTFOLIO MANAGER: MARC J. GABELLI
<PAGE>
GABELLI GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in revenues
and earnings and potential for above average capital appreciation or are
undervalued. The Fund's primary objective is capital appreciation.
(No-load) PORTFOLIO MANAGERS: MARC J. GABELLI AND CAESAR BRYAN
GABELLI GOLD FUND ______________________________________________________________
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial and political factors.
(No-load) PORTFOLIO MANAGER: CAESAR BRYAN
GABELLI INTERNATIONAL GROWTH FUND ______________________________________________
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification.
(No-load) PORTFOLIO MANAGER: CAESAR BRYAN
The five funds above invest in foreign securities which
involves risks not ordinarily associated with investments
in domestic issues, including currency fluctuation,
economic and political risks.
THE FUNDS LISTED ABOVE ARE DISTRIBUTED BY GABELLI & COMPANY, INC.
For more information, call:
1-800-GABELLI
(1-800-422-3554) o fax: 1-914-921-5118 o www.gabelli.com o [email protected]
One Corporate Center, Rye, New York 10580
<PAGE>
THE GABELLI U.S. TREASURY
MONEY MARKET 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 TRUSTEES
Mario J. Gabelli, CFA
CHAIRMAN AND CHIEF
INVESTMENT OFFICER
GABELLI FUNDS, INC.
Anthony J. Colavita
ATTORNEY-AT-LAW
ANTHONY J. COLAVITA, P.C.
Vincent D. Enright
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
KEYSPAN ENERGY CORP.
John J. Parker
ATTORNEY-AT-LAW
MCCARTHY, FINGAR, DONOVAN,
DRAZEN &SMITH
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
Anthonie C. van Ekris
MANAGING DIRECTOR
BALMAC INTERNATIONAL, INC.
OFFICERS
Mario J. Gabelli, CFA
PRESIDENT
Bruce N. Alpert
VICE PRESIDENT AND
TREASURER
James E. McKee
SECRETARY
Ronald S. Eaker
VICE PRESIDENT
Judith A. Raneri
VICE PRESIDENT
AND PORTFOLIO MANAGER
Henley L. Smith
VICE PRESIDENT
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Willkie Farr & Gallagher
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli U.S. Treasury Money Market Fund. It is not authorized for distribution
to prospective investors unless preceded or accompanied by an effective
prospectus.
- --------------------------------------------------------------------------------
[PHOTO]
THE
GABELLI
U.S. TREASURY
MONEY MARKET
FUND
SEMI-ANNUAL REPORT
MARCH 31, 1998
