As filed with the Securities and Exchange Commission
on November 29, 1999
Securities Act File No. 33-48220
Investment Company Act File No. 811-6687
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 10 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 12 X
THE GABELLI MONEY MARKET FUNDS
(Exact Name of Registrant as Specified in Charter)
One Corporate Center, Rye, New York 10580-1434
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 1-800-422-3554
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1434
(Name and Address of Agent for Service)
Copies to:
James E. McKee, Esq. Daniel Schloendorn, Esq.
The Gabelli Money Market Funds Willkie Farr & Gallagher
One Corporate Center 787 Seventh Avenue
Rye, New York 10580-1434 New York, New York 10019-
6099
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b);or
on ________ pursuant to paragraph (b);or
X 60 days after filing pursuant to paragraph (a)(1);or
on ________ pursuant to paragraph (a)(1);or
75 days after filing pursuant to paragraph (a)(2);or
on ________ pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
THE GABELLI U.S. TREASURY MONEY MARKET FUND
PROSPECTUS
February 1, 2000
The Securities and Exchange Commission has not approved or disapproved the
shares described in this prospectus or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
The Gabelli 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 John J. Parker
Chairman and Chief Investment Officer Attorney-at-Law
Gabelli Asset Management Inc. McCarthy, Fingar, Dovovan
Drazen & Smith
Anthony J. Colavita Karl Otto Pohl
Attorney-at-Law Former President
Anthony J. Colavita, P.C. Deutsche Bundesbank
Vincent D. Enright Anthonie C. van Ekris
Former Senior Vice President Managing Director
and Chief Financial Officer BALMAC International,Inc.
KeySpan Energy Corp.
Officers
Mario J. Gabelli, CFA Ronald S. Eaker
President Vice President
Bruce N. Alpert Judith A. Raneri
Vice President and Vice President and
Treasurer Portfolio Manager
James E. McKee Henley L. Smith
Secretary Vice President
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT AND PERFORMANCE SUMMARY 2
INVESTMENT AND RISK INFORMATION...............................................4
MANAGEMENT OF THE FUND........................................................4
PURCHASE OF SHARES............................................................5
REDEMPTION OF SHARES..........................................................6
EXCHANGES OF SHARES...........................................................8
PRICING OF FUND SHARES........................................................9
DIVIDENDS AND DISTRIBUTIONS...................................................9
TAX INFORMATION...............................................................9
FINANCIAL HIGHLIGHTS.........................................................10
<PAGE>
INVESTMENT AND PERFORMANCE SUMMARY
Investment Objective:
The Gabelli U.S. Treasury Money Market Fund (the "Fund"), the only series
of The Gabelli Money Market Funds, seeks to provide high current income
consistent with the preservation of principal and liquidity.
Principal Investment Strategies:
The Fund will invest exclusively in U.S. Treasury obligations, including
U.S. Treasury bills, U.S. Treasury notes, U.S. Treasury bonds and U.S. Treasury
strips, which have remaining maturities of 397 days or less.
Principal Risks:
An investment in the Fund is subject to the risk that the Fund's yield will
decline due to falling interest rates. Other factors may affect the market price
and yield of the Fund's securities, including investor demand and domestic and
worldwide economic conditions. An investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund. There is
no guarantee that the Fund can achieve its investment objective.
Who May Want to Invest:
The Fund may appeal to you if:
- - you are a long-term investor
- - you desire a fund with lower fund expenses than the average U.S. Treasury
money market fund
- - you seek stability of principal more than growth or high current income
- - you seek income free from state and local taxes
- - you intend to exchange into other Gabelli-sponsored mutual funds
You may not want to invest in the Fund if:
- - you are a short-term investor, since the Fund may impose certain
transaction charges
- - you are aggressive in your investment approach or
- - you desire a relatively high rate of return
Performance:
The bar chart and table shown below provide an indication of the risks of
investing in the Fund by showing changes in the Fund's performance from year to
year (since 1992). For current yield information on the Fund, call
1-800-422-3554. The Fund's yield appears in the Wall Street Journal each
Thursday.
As with all mutual funds, the Fund's past performance does not predict how
the Fund will perform in the future.
<PAGE>
Bar chart (graphic omitted). Edgar representation of data points used in
printed graphic.
Calendar Year Total Return
1992 2.78%
1993 3.84%
1994 5.57%
1996 5.13%
1997 4.97%
1998 4.35%
1999 ____%
During the period shown in the bar chart, the highest return for a quarter
was 1.44% (quarter ended 12\31\97) and the lowest return for a quarter was 0.66%
(quarter ended 03\31\93).
Average Annual Total Returns
(for the periods ended Past One Past Five Since October 1,
December 31, 1999) Year Years 1992 (a)
- ------------------ -------- -------- --------
The Gabelli U.S. Treasury
Money Market Fund
(a) Inception of Fund
Fees and Expenses of the Fund:
The tables below describe the fees and expenses that you may pay if you buy
and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment):*
Redemption Fees (1) $5.00
Account Closeout Fee (1) $5.00
Annual Fund Operating Expenses (expenses that are deducted from Fund assets):
Management Fees .30%
Other Expenses .10%
Total Annual Fund Operating Expenses (2) .40%
* No sales load is imposed on purchases, exchanges or redemptions.
(1) The Fund will charge your account $5.00 for each telephone request for bank
wire redemption under $5,000 or telephone request for redemption by check
you make. The Fund will charge a $5.00 account closeout fee when you redeem
all shares in your account, except for Fund exchanges and wire transfers.
See "Redemption of Shares." The charges will be paid to State Street Bank
and Trust Company ("State Street") and will reduce the transfer agency
expenses otherwise payable by the Fund.
(2) Gabelli Funds LLC has agreed to waive its management fee and reimburse
expenses to the extent necessary to maintain the Fund's total fund
operating expenses at .30% of the Fund's average daily net assets. [This
arrangement may be terminated at any time at the option of the Manager.]
<PAGE>
Example
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual Funds. The example assumes that
(1) you invest $10,000 in the Fund for the time periods shown, (2) you redeem
your shares at the end of those periods, (3) your investment has a 5% return
each year and (4) the Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
1 Year* 3 Years* 5 Years* 10 Years*
$41 $128 $224 $505
INVESTMENT AND RISK INFORMATION
The Fund's investment objective is to provide high current income
consistent with preservation of principal and liquidity. The investment
objective of the Fund is fundamental and may not be changed without shareholder
approval.
Under normal market conditions, the Fund invests at least 65% of its assets
in U.S. Treasury obligations, including U.S. Treasury bills, U.S. Treasury
notes, U.S. Treasury bonds and U.S. Treasury strips. The Fund attempts to
maintain a constant net asset value of $1.00 per share by purchasing only
securities with 397 days or less remaining to maturity and limiting the
dollar-weighted average maturity of its portfolio to 90 days. There is no
guarantee that the Fund will achieve its investment objective since there is
uncertainty in every investment.
MANAGEMENT OF THE FUND
The Manager. Gabelli Funds, LLC, with principal offices located at One
Corporate Center, Rye, New York 10580-1434, serves as investment manager to the
Fund. The Manager makes investment decisions for the Fund and continuously
reviews and administers the Fund's investment program under the supervision of
the Fund's Board of Trustees. The Manager also manages several other open-end
and closed-end investment companies in the Gabelli Family of Funds. The Manager
is a New York limited liability company organized in 1999 as successor to
Gabelli Group Capital Partners, Inc. (formerly named Gabelli Funds, Inc.), a New
York corporation organized in 1980. The Manager is a wholly-owned subsidiary of
Gabelli Asset Management Inc. ("GAMI"), a publicly held company listed on the
New York Stock Exchange.
As compensation for its services and the related expenses borne by the
Manager, the Manager is entitled to receive a fee, computed daily and payable
monthly equal on an annual basis, to .30% of the Fund's average daily net assets
(the "Management Fee"). The Manager has agreed to waive voluntarily all or a
portion of its Management Fee and/or to assume voluntarily certain expenses of
the Trust until further notice to the extent necessary to maintain the total
expense ratio of the Fund at .30% of average daily net assets (excluding
interest, taxes and extraordinary expenses). This has the effect of lowering the
overall expense ratio of the Fund and increasing yield to investors in the Fund.
There is no assurance that these fees will be waived or that expenses will be
reimbursed in the future. For the fiscal year ended September 30, 1999, the
Manager received fees after waivers at the effective rate of 0.30% of the value
of the Fund's average daily net assets.
PURCHASE OF SHARES
You can purchase the Fund's shares on any day the New York Stock Exchange
("NYSE") is open for trading (a "Business Day"). You may purchase shares through
Gabelli & Company, Inc. (the "Distributor"), directly from the Fund through the
Fund's transfer agent or through organizations that have special arrangements
with the Fund ("Participating Organizations").
By Mail or In Person. You may open an account by mailing a completed
subscription order form with a check or money order payable to "The Gabelli U.S.
Treasury Money Market Fund" to:
By Mail By Personal Delivery
The Gabelli Funds The Gabelli Funds
c/o BFDS P.O. Box 8308
66 Brooks Drive Boston, MA 02266-8308
Braintree, MA 02184
You can obtain a subscription order form by calling 1-800-GABELLI
(1-800-422-3554). Checks made payable to a third party and endorsed by the
depositor are not acceptable. For additional investments, send a check to the
above address with a note stating your exact name and account number, and the
name of the Fund.
By Bank Wire. To open an account using the bank wire system, first
telephone the Fund at 1-800-422-3554 to obtain a new account number. Then
instruct a Federal Reserve System member bank to wire Funds to:
State Street Bank and Trust Company
ABA #011-0000-28 REF DDA #99046187
Re: The Gabelli U.S. Treasury Money Market Fund
Account #__________
Account of [Registered Owners]
225 Franklin Street, Boston, MA 02110
If you are making an initial purchase, you should also complete and mail a
subscription order form to the address shown under "By Mail." Note that banks
may charge fees for wiring Funds, although State Street will not charge you for
receiving wire transfers. If your wire is received by the Fund before noon,
Eastern Standard Time, you will begin earning dividends on the day of receipt.
Through a Participating Organization. You may purchase shares from a
Participating Organization. The Participating Organization will transmit a
purchase order and payment to State Street on your behalf. Participating
Organizations may send you confirmations of your transactions and periodic
account statements showing your investments in the Fund.
Minimum Investments. Your minimum initial investment must be at least
$10,000 ($3,000 for registered shareholders of other mutual funds managed by the
Manager or its affiliates). See "Retirement Plans" and "Automatic Investment
Plan" regarding minimum investment amounts applicable to such plans. There is no
minimum for subsequent investments. Participating Organizations may have
different minimum investment requirements.
Share Price. The Fund sells its shares at the "net asset value" next
determined after the Fund receives your completed subscription order form and
your payment in Federal Funds. See "Pricing of Fund Shares" for a description of
the calculation of net asset value.
Retirement Plans. The minimum initial investments for all such retirement
plans is $1,000. There is no minimum for subsequent investments. Investors with
IRA plans and self-employed investors may purchase shares of the Fund through
tax-deductible contributions to their existing IRA account or their retirement
plans for self-employed persons, known as Keogh or H.R. 10 plans. Fund shares
may also be a suitable investment for other types of qualified pension or
profit-sharing plans which are employer sponsored, including deferred
compensation or salary reduction plans known as "401(k) Plans" which give
participants the right to defer portions of their compensation for investment on
a tax-deferred basis until distributions are made from the plans.
General. State Street will not issue share certificates. The Fund reserves
the right to (i) reject any purchase order if, in the opinion of Fund
management, it is in the Fund's best interest to do so and (ii) suspend the
offering of shares for any period of time.
REDEMPTION OF SHARES
You can redeem shares on any Business Day. The Fund may temporarily stop
redeeming its shares when the NYSE is closed or trading on the NYSE is
restricted, when an emergency exists and the Fund cannot sell its shares or
accurately determine the value of its assets, or if the Securities and Exchange
Commission ("SEC") orders the Fund to suspend redemptions.
If you request redemption proceeds by check, the Fund will normally mail
the check to you within seven days. You will be charged $5.00 when you redeem
all shares in your account, unless you redeem by wire in excess of $5,000 or you
exchange shares out of the Fund to another Gabelli-sponsored fund.
You may redeem shares through the Distributor, directly from the Fund
through its transfer agent, or through Participating Organizations.
By Letter. You may mail a letter requesting redemption of shares to: The
Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308. Your letter should state
the name of the Fund, the dollar amount or number of shares you are redeeming
and your account number. You must sign the letter in exactly the same way the
account is registered and if there is more than one owner of shares, all must
sign. A signature guarantee is required for each signature on your redemption
letter. You can obtain a signature guarantee from financial institutions such as
commercial banks, brokers, dealers and savings associations. A notary public
cannot provide a signature guarantee.
By Telephone. You may redeem your shares in a direct registered account by
calling either 1-800-422-3554 or 1-800-872-5365 (617-328-5000 from outside the
United States), subject to a $25,000 limitation. You may not redeem shares held
through an IRA by telephone. If State Street properly acts on telephone
instructions and follows reasonable procedures to protect against unauthorized
transactions, neither State Street nor the Fund will be responsible for any
losses due to telephone transactions. You may be responsible for any fraudulent
telephone order in your account as long as State Street or the Fund takes
reasonable measures to verify the order. You may request that redemption
proceeds be mailed to you by check (if your address has not changed in the prior
30 days), forwarded to you by bank wire or invested in another mutual Fund
advised by the Manager (see "Exchanges of Shares" below).
1. Telephone Redemption By Check. The Fund will make checks payable to
the name in which the account is registered and normally will mail the
check to the address of record within seven days and charge you $5.00
for this service.
2. Telephone Redemption By Wire. The Fund accepts telephone requests for
wire redemption in amounts of at least $1,000. The Fund will send a
wire to either a bank designated on your subscription order form or on
a subsequent letter with a guaranteed signature. The Fund will deduct
a wire fee (currently $5.00) from your account if you redeem less than
$5,000. The proceeds are normally wired on the next Business Day. If
you wish your bank to receive a wire on the day you place the
telephone request, you must call the Fund by noon (New York time).
Through a Participating Organization. You may redeem shares through a
Participating Organization which will transmit a redemption order to State
Street on your behalf. A redemption request received from a Participating
Organization will be effected at the net asset value next determined after State
Street receives the request.
Through the Automatic Cash Withdrawal Plan. You may automatically redeem
shares on a monthly, quarterly or annual basis. Please call the Distributor at
1-800-422-3554 for more information.
By Check Draft. You may write checks on your account with the Fund in the
amount of $500 or more. Simply request the checkwriting service on your
subscription order form and the Fund will send you checks. The Fund will not
honor a check if (1) you purchased shares by check and the check has not
cleared, (2) the check would close out your account, (3) the amount of the check
is higher than funds available in your account, (4) the check is written for
less than $500, or (5) the check contains an irregularity in the signature or
otherwise. In the case of (3), (4) and (5), State Street will charge your
account a $15 fee. The Trust may change or terminate the check-writing service
or impose additional charges at any time.
Involuntary Redemption. The Fund may redeem all shares in your account
(other than an IRA account) if their value falls below $1,000 as a result of
redemptions (but not as a result of a decline in net asset value). You will be
notified in writing and allowed 30 days to increase the value of your shares to
at least $1,000.
Redemption Proceeds. If you request redemption proceeds by check, the Fund
will normally mail the check to you within seven days after it receives your
redemption request. If you purchased your Fund shares by check, you may not
redeem shares until the check clears, which may take up to 15 days following
purchase.
EXCHANGES OF SHARES
You may exchange shares of the Fund you hold for shares of any other
open-end Fund managed by the Manager or its affiliates based on their relative
asset values. The Fund also offers an automatic monthly exchange privilege. To
obtain a list of the Funds whose shares you may acquire through exchange or
details on the automatic monthly exchange privilege call 1-800-GABELLI
(1-800-422-3554).
In effecting an exchange:
- you must meet the minimum purchase requirements for the Fund whose
shares you purchase through exchange.
- if you are exchanging into shares of a Fund with a sales charge, you
must pay the sales charge at the time of exchange.
- you may realize a taxable gain or loss.
- you should read the prospectus of the Fund whose shares you are
purchasing (call 1-800-GABELLI (1-800-422-3554) to obtain the
prospectus).
You may exchange shares by telephone, by mail or through a Participating
Organization.
Exchanges by Telephone. You may give exchange instructions by telephone by
calling 1-800-GABELLI (1-800-422-3554). You may not exchange shares by telephone
if you hold share certificates.
Exchanges by Mail. You may send a written request for exchanges to: The
Gabelli Funds, P.O. Box 8308, Boston, MA 02266-8308. State your name, your
account number, the dollar value or number of shares you wish to exchange, the
name and class of the Fund whose shares you wish to exchange, and the name of
the Fund whose shares you wish to acquire.
Exchanges through the Internet. You may also give exchange instructions via
the Internet at www.gabelli.com.
We may modify or terminate the exchange privilege at any time. You will be
given notice 60 days prior to any material change in the exchange privilege.
PRICING OF FUND SHARES
The Fund's net asset value per share is calculated on each Business Day.
The NYSE is currently scheduled to be closed on New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day and on the preceding Friday
or subsequent Monday when a holiday falls on a Saturday or Sunday, respectively.
The Fund's net asset value is determined at noon (New York time) and as of
the close of regular trading on the NYSE, normally 4:00 p.m., New York time, and
is computed by dividing the value of the Fund's net assets (i.e. the value of
its securities and other assets less its liabilities, including expenses payable
or accrued but excluding capital stock and surplus) by the total number of its
shares outstanding at the time the determination is made. The Fund uses the
amortized cost method of valuing its portfolio securities to maintain a constant
net asset value of $1.00 per share. Under this method of valuation, the Fund
values its portfolio securities at their cost at the time of purchase and not at
market value, thus minimizing fluctuations in value due to interest rate changes
or market conditions.
DIVIDENDS AND DISTRIBUTIONS
Dividends of net investment income and short-term capital gains will be
declared daily and paid monthly, and distributions of net long-term capital
gains, if any, will be paid annually. They will be automatically reinvested for
your account at net asset value in additional shares of the Fund unless you
instruct the Fund to pay all dividends and distributions in cash. If you elect
cash distributions, notify the Fund at The Gabelli Funds, P.O. Box 8308, Boston,
MA 02266-8308 or by telephone at 1-800-422-3554.
If you purchase shares prior to 12:00 noon (New York time), you will
receive the full dividend for that day. If you redeem shares prior to 12:00 noon
(New York time) on any Business Day, you will not earn that day's dividend, but
the redemption proceeds are available that day. If you redeem shares between
noon and 4:00 p.m. (New York time), you will earn that day's dividend, but the
redemption proceeds are not available until the next Business Day.
TAX INFORMATION
The Fund expects that its distributions will consist primarily of net
investment income and capital gains, which may be taxable at different rates
depending on the length of time the Fund holds its assets. Dividends out of net
investment income and distributions of realized short-term capital gains are
taxable to you as ordinary income. Distributions of net long-term capital gains
are taxable to you at long-term capital gain rates. The Fund's distributions,
whether you receive them in cash or reinvest them in additional shares of the
Fund, may be subject to federal income tax. An exchange of the Fund's shares for
shares of another fund will be treated for tax purposes as a sale of the Fund's
shares, and any gain you realize on such a transaction generally will be
taxable. Foreign shareholders generally will be subject to a federal withholding
tax.
This summary of tax consequences is intended for general information only.
You should consult a tax adviser concerning the tax consequences of your
investment in the Fund.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past five fiscal years of the Fund. The
total returns in the table represent the rate that an investor would have earned
on an investment in the Fund's shares. This information has been audited by
Ernst & Young LLP, independent auditors, whose report, along with the Fund's
financial statements and related notes are included in the annual report, which
is available upon request. Per share amounts for a Fund share outstanding
throughout each year ended September 30,
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1999 1998 1997(d) 1996 1995
---- ---- ---- ---- ----
Operating performance:
Net asset value, beginning of year.... $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Net investment income (a)............. 0.0422 0.0496 0.0485 0.0492 0.0528
Net realized gain on investments...... 0.0005 0.0005 0.0013 0.0006 0.0002
------ ------ ------ ------ ------
Total from investment operations...... 0.0427 0.0501 0.0498 0.0498 0.0530
------ ------ ------ ------ ------
Distributions to shareholders:
Net investment income................. (0.0422) (0.0496) (0.0485) (0.0492) (0.0528)
Net realized gain on investments.. (0.0005) (0.0005) (0.0013) (0.0006) (0.0002)
------ -------- -------- -------- --------
Total distributions................... (0.0427) (0.0501) (0.0498) (0.0498) (0.0530)
------ -------- -------- -------- --------
Net asset value, end of year.......... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total return (b)...................... 4.4% 5.1% 5.1% 5.1% 5.4%
==== ==== ==== ==== ====
Ratios to average net assets and
supplemental data:
Net assets, end of year (in 000s)... $480,100 $314,394 $203,542 $216,038 $218,036
Ratio of net investment income
to average net assets.............. 4.19% 4.91% 4.85% 4.92% 5.30%
Ratio of operating expenses
to average net assets (c).......... 0.30% 0.30% 0.30% 0.30% 0.27%
- ------------------
(a) Net investment income before fees waived by the Manager for the fiscal
years ended September 30, 1999, 1998, 1997, 1996 and 1995
was $0.0412, $0.0475, $0.0469, $0.0477 and $0.0516, respectively.
(b) 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.
(c) Operating expense ratio before fees waived by the Manager for the fiscal
years ended September 30, 1999, 1998, 1997, 1996 and 1995 were 0.40%,
0.46%, 0.45%, 0.45% and 0.39%, respectively.
(d) Gabelli Funds, LLC (formerly known as Gabelli Funds, Inc.) became the sole
manager of the Fund on April 15, 1997.
</TABLE>
<PAGE>
THE GABELLI U.S. TREASURY MONEY MARKET FUND
For More Information:
For more information about the Fund, the following documents are
available free upon request:
Annual/Semi-annual Reports:
The Fund's semi-annual and audited annual reports to shareholders contain
detailed information on the Fund's investments.
Statement of Additional Information (SAI):
The SAI provides more detailed information about the Fund, including its
operations and investment policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
You can get free copies of these documents and prospectuses of other Funds
in the Gabelli Family, or request other information and discuss your questions
about the Fund by contacting:
The Gabelli U.S. Treasury Money Market Fund
One Corporate Center
Rye, NY 10580
Telephone 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
You can review the Fund's reports and SAI at the Public Reference Room of
the Securities and Exchange Commission. You can get text-only copies:
- For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
- Free from the Commission's Website at http://www.sec.gov.
Investment Company Act File Number: 811-6687.
<PAGE>
The Gabelli U.S. Treasury Money Market Fund
Statement of Additional Information
February 1, 2000
This Statement of Additional Information ("SAI") relates to The Gabelli
U.S. Treasury Money Market Fund (the "Fund"), which is the first series of The
Gabelli Money Market Funds, a Delaware business trust (the "Trust"). This SAI is
not a prospectus and should be read in conjunction with the Fund's Prospectus
dated February 1, 2000, a copy of which may be obtained without charge by
contacting the Fund at the address, telephone number or Internet website printed
below. This SAI is incorporated by reference in its entirety into the
Prospectus.
One Corporate Center
Rye, New York 10580-1434
Telephone 1-800-GABELLI (1-800-422-3554)
http://www.gabelli.com
TABLE OF CONTENTS
General Information...........................................................2
Investment Strategies and Risks...............................................2
U.S. Treasury Obligations............................................2
When-Issued and Delayed Delivery Securities..........................3
Illiquid Securities..................................................3
Repurchase Agreements................................................4
Investment Restrictions.......................................................5
Trustees and Officers.........................................................6
Control Persons and Principal Shareholders....................................9
The Manager .................................................................10
The Sub-Administrator........................................................12
The Distributor..............................................................13
Counsel ....................................................................14
Independent Auditors.........................................................14
Custodian, Transfer Agent, and Dividend Disbursing Agent.....................14
Purchase of Shares...........................................................14
Retirement Plans.............................................................14
Redemption of Shares.........................................................15
Net Asset Value..............................................................15
Portfolio Transactions and Brokerage.........................................17
Taxation.....................................................................17
Investment Performance Information...........................................18
Description of the Fund's Shares.............................................19
Financial Statements.........................................................21
<PAGE>
GENERAL INFORMATION
The Fund is a diversified, open-end, management investment company
which commenced investment operations on October 1, 1992. The Fund was organized
on May 21, 1992 as an unincorporated Delaware business trust.
INVESTMENT STRATEGIES AND RISKS
The Fund's Prospectus discusses the investment objective of the Fund
and the principal strategies to be employed to achieve that objective. This
section contains supplemental information concerning certain types of securities
and other instruments in which the Fund may invest, additional strategies that
the Fund may utilize and certain risks associated with such investments and
strategies. Although the Fund reserves the right to use repurchase agreements,
the Fund will not engage in such activity until further notice. The Fund's
investment objective is fundamental and may be changed only by the affirmative
vote of at least a majority of the Fund's outstanding voting securities as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"). A
majority of the Fund's outstanding securities is defined as the lesser of (i)
67% of the Fund's shares represented at a meeting of shareholders at which the
holders of 50% or more of the Fund's outstanding shares are represented in
person or by proxy or (ii) more than 50% of the Fund's outstanding shares.
U.S. Treasury Obligations
As set forth in the Prospectus, under normal market conditions, the
Fund will invest at least 65% of its assets in the following types of U.S.
Treasury obligations:
U.S. Treasury Securities. The Fund will invest in U.S. Treasury securities,
including bills, notes and bonds. These instruments are direct obligations of
the U.S. Government and, as such, are backed by the "full faith and credit" of
the United States. They differ primarily in their interest rates and the lengths
of their maturities.
Components of U.S. Treasury Securities. The Fund may also invest in
component parts of U.S. Treasury notes or bonds, namely, either the corpus
(principal) of such Treasury obligations or one or more of the interest payments
scheduled to be paid on such obligations. Component parts of U.S. Treasury notes
or bonds are created through the U.S. Treasury Department's STRIPS program.
These obligations may take the form of (i) Treasury obligations from which the
interest coupons have been stripped, (ii) the interest coupons that are
stripped, or (iii) book-entries at a Federal Reserve member bank representing
ownership of Treasury obligation components, and may be acquired by the Fund in
the form of custodial receipts that evidence ownership of future interest
payments, principal payments or both on certain U.S. Treasury notes or bonds.
The underlying U.S. Treasury notes and bonds are held in custody by a bank on
behalf of the owners. These custodial receipts are commonly referred to as
Treasury strips.
When-Issued and Delayed Delivery Securities
The Fund may, in the ordinary course of business, purchase securities on a
"when-issued" or "delayed delivery" basis (i.e., delivery and payment may take
place a month or more after the date of the transaction). The Trust's investment
adviser ("Manager"), however, does not currently intend to employ such
investments. Securities so purchased are subject to market fluctuation, and no
interest would accrue to the Fund during this period. While the Fund would only
purchase securities on a "when-issued" or "delayed delivery" basis with the
intention of actually acquiring the securities, the Fund may sell the securities
before the settlement date if it is deemed advisable. At the time the Fund makes
the commitment to purchase securities on a "when-issued" or "delayed delivery"
basis, the Fund will record the transaction and, in determining its net asset
value, will reflect the value of the security daily. At the time of delivery of
the securities, the value may be more or less than the purchase price. The Fund
would also establish a segregated account with the Trust's Custodian in which it
would continuously maintain cash and U.S. Government securities equal in value
to commitments for such "when-issued" or "delayed delivery" securities; subject
to this requirement, the Fund may purchase securities on such basis without
limit.
Illiquid Securities
The Fund may invest up to 10% of its net assets in repurchase agreements
which have a maturity of longer than seven days or in other illiquid securities,
including securities that are illiquid by virtue of the absence of a readily
available market or subject to legal or contractual restrictions on resale. The
Manager, however, does not currently intend to employ such investments.
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.
In recent years, however, a large institutional market has developed for
certain securities that are not registered under the Securities Act including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.
Rule 144A under the Securities Act allows for a broader institutional
trading market for securities otherwise subject to restriction on resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers. The Trust's Manager anticipates that the market
for certain restricted securities such as institutional commercial paper will
expand further as a result of this new regulation and the development of
automated systems for the trading, clearance and settlement of unregistered
securities of domestic and foreign issuers, such as the PORTAL System sponsored
by the National Association of Securities Dealers, Inc. ("NASD").
Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act are not deemed to be illiquid. The Fund would treat such
securities as illiquid until such time that the Manager determines that they are
readily marketable. In reaching liquidity decisions, the Trust's Manager would
consider, inter alia, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers wishing to purchase or sell
the security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer). Repurchase agreements subject to demand are deemed to have a
maturity equal to the notice period.
Repurchase Agreements
The Fund may enter into repurchase agreements, which are
agreements to purchase securities (the "underlying securities") from a bank
which is a member of the Federal Reserve System, or from a well-established
securities dealer, and the bank or dealer agrees to repurchase the underlying
securities from the Fund, at the original purchase price, plus specified
interest, at a specified future date; however, the Manager does not currently
intend to employ such investments. The Fund will enter into repurchase
agreements only where the underlying securities (1) are of the type (excluding
maturity limitations) which the Fund's investment policies and restrictions
would allow it to purchase directly and (2) are "marked to market" on a daily
basis, so that the market value of the underlying securities, including interest
accrued, is equal to or in excess of the value of the repurchase agreement. The
period of maturity is usually quite short, possibly overnight or a few days,
although it may extend over a number of months. The resale price is in excess of
the purchase price, reflecting an agreed-upon rate of return effective for the
period of time the Fund's money is invested in the security. The U.S. Treasury
obligations held as collateral are valued daily, and as the value of these
instruments declines, the Fund will require additional collateral.
With respect to engaging in repurchase agreements, the Fund's risk would be
primarily that, if the seller defaults, the proceeds from the disposition of the
underlying securities and other collateral for the seller's obligations are less
than the repurchase price. If the seller becomes insolvent, the Fund might be
delayed in or prevented from selling the collateral. In the event of a default
or bankruptcy by a seller, the Fund will promptly seek to liquidate the
collateral. To the extent that the proceeds from any sale of such collateral
upon a default in the obligation to repurchase are less than the repurchase
price, the Fund will experience a loss.
In addition, interest income derived from repurchase agreements is not
considered to be income derived from U.S. Treasury obligations and is not exempt
from state and local income taxes. In addition, some states require that, in
order for the tax exempt character of the Fund's interest from U.S. Treasury
obligations to pass through to its shareholders, the Fund must maintain
specified minimum levels of the Fund's total assets in U.S. Treasury
obligations. If the level of non-U.S. Treasury obligations (including repurchase
agreements) exceeds a state's limit for this pass-through, then none of the
Fund's interest income would be exempt from state or local income tax in the
state for the applicable year. While the Fund does not specifically limit the
amount of repurchase agreements that it can enter into, the Fund will endeavor
to maintain the levels necessary to preserve the pass-through of the Fund's tax
exempt interest income from U.S. Treasury obligations.
INVESTMENT RESTRICTIONS
Unless specified to the contrary, the following restrictions are
fundamental and may not be changed as to the Fund without the approval of the
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act).
As a matter of fundamental policy, the Trust may not, on behalf of the
Fund:
(1) purchase any security other than obligations of the U.S. Government,
including repurchase agreements with respect to such securities;
(2) borrow money, except from banks for temporary, extraordinary or emergency
purposes, including the meeting of redemption requests which might
otherwise require the untimely disposition of securities, or for clearance
of transactions; borrowing in the aggregate may not exceed 30% of the value
of the Fund's total assets (including the amount borrowed), less
liabilities (not including the amount borrowed) at the time the borrowing
is made; investment securities will not be purchased while borrowings
exceed 5% of the Fund's total assets;
(3) issue senior securities as defined in the 1940 Act except insofar as the
Fund may be deemed to have issued a senior security by reason of: (a)
entering into any repurchase agreement; (b) permitted borrowings of money
from banks; or (c) purchasing securities on "when-issued" or "delayed
delivery" basis;
(4) make loans of the Fund's portfolio securities, except through repurchase
agreements;
(5) purchase securities on margin (except that the Fund may obtain such
short-term credits as may be necessary for clearance of transactions);
(6) act as underwriter of securities except to the extent that, in connection
with the disposition of portfolio securities, it may be deemed to be an
underwriter under certain Federal securities laws;
(7) make short sales or maintain a short position;
(8) buy or sell real estate or interests in real estate, including real estate
limited partnerships;
(9) acquire securities of other investment companies, except in connection with
a merger, consolidation, acquisition or reorganization;
(10) make investments for the purpose of exercising control or management;
(11) invest in interests in or leases related to oil, gas or other mineral
exploration or development programs; or
(12) buy or sell commodities or commodity contracts (including futures contracts
and options thereon).
In addition, as a matter of operating policy, the Trust will not on behalf
of the Fund invest more than 25% of the Fund's total assets in any industry
other than the U.S. Government.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of total or net assets will not be considered a
violation of any of the foregoing restrictions.
TRUSTEES AND OFFICERS
Under Delaware law, the Trust's Board of Trustees is responsible for
establishing the Fund's policies and for overseeing management of the Fund. The
Board also elects the Trust's officers who conduct the daily business of the
Fund. The Trustees and principal officers of the Trust, their ages, and their
principal occupations for the past five years, are set forth below. Unless
otherwise specified, the address of each such person is One Corporate Center,
Rye, New York, 10580-1434.
Name, Age, Position(s) Principal Occupations
with Trust and Address During Past Five Years
Mario J. Gabelli,* 57 Chairman of the Board, Chief Executive Officer and
President and Trustee Chief Investment Officer of Gabelli Asset Management
Inc. (since 1999) and Gabelli Funds, LLC;
Director or Trustee and Officer of various other
mutual funds advised by Gabelli Funds, LLC and its
affiliates; Chairman of the Board and Chief
Executive Officer of Lynch Corporation (diversified
manufacturing and communication services company);
and Director of East/West Communications, Inc.
Anthony J. Colavita, 64 President and Attorney at Law in the law firm of
Trustee Anthony J. Colavita, P.C. since 1961; Director or
Trustee of sixteen other mutual funds advised by
Gabelli Funds, LLC and its affiliates.
Vincent D. Enright, 56 Former Senior Vice President and Chief Financial
Trustee Officer of KeySpan Energy Corporation; Director or
Trustee of six other registered investment companies
advised by Gabelli Funds, LLC and its affiliates.
John J. Parker, 67 Attorney at the law firm of McCarthy, Fingar,
Trustee Donovan, Drazen & Smith, since August 1989.
Karl Otto Pohl,+ 69 Member of the Shareholder Committee of Sal Oppenheim
Trustee Jr. & Cie (private investment bank); Director of
Gabelli Asset Management Inc. (investment
management), Zurich Allied (insurance), and
TrizecHahn Corp. (real estate); Former President of
the Deutsche Bundesbank and Chairman of its Central
Bank Council from 1980 through 1991; Director or
Trustee of all other mutual funds advised by Gabelli
Funds, LLC and its affiliates.
Anthonie C. van Ekris, 64 Managing Director of Balmac International; Director,
Trustee Stahel Hardmeyer A.G.; Director or Trustee of ten
other registered investment companies in the
Gabelli family.
Bruce N. Alpert, 47 Executive Vice President and Chief Operating Officer
Vice President and of the Adviser; Director and President of Gabelli
Treasurer Advisers, Inc. and an Officer of all funds advised
by Gabelli Funds, LLC and its affiliates.
Judith A. Raneri, 31 Portfolio Manager, Gabelli Funds, LLC since April
Vice President 1997. Senior Portfolio Manager, Secretary and
Treasurer of The Treasurer's Fund, Inc. A member
of the Investment and Credit Review Committees.
Ronald S. Eaker, 38 Senior Portfolio Manager of Gabelli Fixed Income
Vice President LLC and its predecessors since 1987. President and
Chief Investment Officer of The Treasurer's Fund,
Inc.
Henley L. Smith, 42 Senior Portfolio Manager of Gabelli Fixed Income
Vice President LLC and its predecessors since 1987. Vice President
and Investment Officer of The Treasurer's Fund
Inc.
James E. McKee, 35 Vice President, General Counsel and Secretary of the
Secretary Adviser; Vice President and General Counsel of GAMCO
Investors, Inc. since 1993 and Gabelli Asset
Management Inc. since 1999; Secretary of all funds
advised by Gabelli Funds, LLC and its affiliates
since August 1995.
* "Interested person" of the Fund, as defined in the 1940 Act. Mr. Gabelli is
an affiliated person of the Manager.
+ Mr. Pohl is a director of the parent company of the Manager.
No director, officer or employee of the Manager or any affiliate of the
Manager receives any compensation from the Trust for serving as an officer or
Trustee of the Trust. The Trust pays each of its Trustees who is not a director,
officer or employee of the Manager or any of its affiliates, $3,000 per annum
plus $500 per meeting attended and reimburses each Trustee for related travel
and out-of-pocket expenses. The Trust also pays each Trustee serving as a
member of the Audit, Proxy or Nominating Committees a fee of $500 per committee
meeting, if held on a day other than a regularly scheduled board meeting. For
the year ended September 30, 1999, Trustee fees totaled $24,500.
COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation of the Trust's Trustees. Except as disclosed below, no
executive officer or person affiliated with the Trust received compensation in
excess of $60,000 from the Trust for the fiscal year ended September 30,
1999.
(1) (2) (3)
Name of Person Aggregate Compensation Total Compensation
and Position from the Fund from The Fund and
Fund Complex*
Anthony J. Colavita $5,000 $70,750 (17)
Trustee
Vincent D. Enright $6,000 $18,250 (7)
Trustee
John J. Parker $6,000 $6,000 (1)
Trustee
Karl Otto Pohl $2,500 $7,250 (19)
Trustee
Anthonie C. van Ekris $5,000 $45,000 (11)
Trustee
* Represents the total compensation paid to such persons during the calendar
year ending December 31, 1999. The parenthetical number represents the
number of investment companies (including the Fund) from which such person
receives compensation that are considered part of the same Fund complex as
the Fund because they have a common or affiliated investment adviser.
No compensation was received by Mr. Mario J. Gabelli from the Registrant.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of January ____, 2000, the outstanding voting securities of the Fund
consisted of ____ shares of beneficial interest and the following persons owned
of record or beneficially 5% or more of the Fund's outstanding shares:
Name and Address % of Class Nature of Ownership
[Gabelli Funds, Inc. ____% Beneficially
John Fodera
One Corporate Center
Rye, New York
10580-1442]
[As of January __, 2000, as a group, the Trustees and officers of the Trust
[(other than Mr. Gabelli)] owned less than 1% of the Fund's outstanding shares.]
<PAGE>
THE MANAGER AND OTHER SERVICES
Manager
Gabelli Funds LLC is a New York limited liability company which also
serves as an investment adviser to 15 other open-end investment companies, and 4
closed-end investment companies with aggregate assets in excess of $____ billion
as of December 31, 1999. The Manager is a registered investment adviser under
the Investment Advisers Act of 1940, as amended. Mr. Mario J. Gabelli may be
deemed a "controlling person" of the Manager on the basis of his controlling
interest of the ultimate parent company of the Manager. The Manager has several
affiliates that provide investment advisory services: GAMCO Investors, Inc.
("GAMCO"), acts as investment adviser for individuals, pension trusts,
profit-sharing trusts and endowments, and had assets under management of
approximately $____ billion under its management as of December 31, 1999;
Gabelli Advisers, Inc. acts as investment adviser to the Gabelli Westwood Funds
with assets under management of approximately $____ million as of December 31,
1999; Gabelli Securities, Inc. acts as investment adviser to certain alternative
investments products, consisting primarily of risk arbitrage and merchant
banking limited partnerships and offshore companies, with assets under
management of approximately $____ million as of December 31, 1999; and Gabelli
Fixed Income LLC acts as investment adviser for the Treasurer's Funds and
separate accounts having assets under management of approximately $____ billion
as of December 31, 1999.
The Manager currently serves as investment adviser to the Fund pursuant
to a management agreement with the Trust (the "Management Agreement").
Under the Management Agreement, the Manager, subject to the supervision of the
Trustees and in conformity with the stated policies of the Trust, manages both
the investment operations of the Trust and the composition of the Trust's
portfolio, including the purchase, retention, disposition of securities and
other investments. The Manager is obligated to keep certain books and records of
the Trust in connection therewith. The Manager is also obligated to provide
research and statistical analysis and to pay costs of certain clerical and
administrative services involved in portfolio management. The management
services of the Manager to the Trust are not exclusive under the terms of the
Management Agreement and the Manager is free to, and does, render management
services to others.
The Manager has authorized any of its directors, officers and employees who
have been elected as Trustees or Officers of the Trust to serve in the
capacities in which they have been elected. Services furnished by the Manager
under the Management Agreement may be furnished by any such directors, officers
or employees of the Manager. In connection with the services it renders, the
Manager bears the following expenses:
(a) the salaries and expenses of all personnel of the Trust and the
Manager, except the fees and expenses of Trustees who are not
affiliated persons of the Manager or the Trust's investment adviser;
(b) all expenses incurred by the Manager or by the Trust in connection
with managing the ordinary course of the Trust's business, other than
those assumed by the Trust, as described below; and
(c) the costs and expenses payable to First Data Investor Services Group,
Inc. (the "Sub-Administrator") pursuant to a sub-administration
agreement between the Manager and the Sub-Administrator (the
"Sub-Administration Agreement").
Under the terms of the Management Agreement, the Trust is responsible for
the payment of the following expenses, including (a) the fee payable to the
Manager, (b) the fees and expenses of Trustees who are not affiliated with the
Manager, (c) the fees and certain expenses of the Trust's Custodian and Transfer
and Divided Disbursing Agent, including the cost of providing records to the
Manager in connection with its obligation of maintaining required records of the
Trust and of pricing the Trust's shares, (d) the fees and expenses of the
Trust's legal counsel and independent auditors, (e) brokerage commissions and
any issue or transfer taxes chargeable to the Trust in connection with its
securities transactions, (f) all taxes and business fees payable by the Trust to
governmental agencies, (g) the fees of any trade association of which the Trust
is a member, (h) the cost of share certificates representing shares of the
Trust, if any, (i) the cost of fidelity insurance, and Trustees' and Officers'
and errors and omissions insurance, if any, (j) the fees and expenses involved
in registering and maintaining registration of the Trust and of its shares with
the Securities and Exchange Commission (the "SEC") and registering the Trust as
a broker or dealer and qualifying its shares under state securities laws,
including the preparation and printing of the Trust's registration statement and
prospectuses for such purposes, (k) allocable communications expenses with
respect to investor services and all expenses of shareholders and Trustees'
meetings and of preparing, printing and mailing reports to shareholders, (l)
litigation and indemnification expenses and any other extraordinary expenses not
incurred in the ordinary course of the Trust's business, (m) any expenses
assumed by the Trust pursuant to a plan of distribution adopted in conformity
with Rule 12b-1 under the 1940 Act, if any, and (n) the fees and expenses of
each series of the Trust in connection with the management, investment and
reinvestment of the assets of each such series.
The Management Agreement provides that the Manager shall not be liable to
the Trust for any error of judgment by the Manager or for any loss sustained by
the Trust except in the case of a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages will be
limited as provided in the 1940 Act) or of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty. The Management Agreement in no way
restricts the Manager from acting as adviser to others. The Trust has agreed by
the terms of the Management Agreement that the Trust may use the name "Gabelli"
only for so long as the Management Agreement or any amendment, renewal or
extension thereof remains in effect or for so long as the Manager is responsible
for the portfolio management and administrative services for the Trust. The
Trust has further agreed that in the event that for any reason, the Manager
ceases to be responsible for the portfolio management and administrative
services of the Trust, the Trust will, unless the Manager otherwise consents in
writing, promptly take all steps necessary to change its name to one which does
not include "Gabelli."
The Management Agreement is terminable without penalty by either party upon
not less than sixty (60) days' written notice. The Management Agreement will
automatically terminate in the event of its assignment, as defined in the 1940
Act and rules thereunder, except to the extent otherwise provided by order of
the SEC or any rule under the 1940 Act and except to the extent the 1940 Act no
longer provides for automatic termination, in which case the approval of a
majority of the independent Trustees is required for any "assignment."
By its terms, the Management Agreement, which was last approved by the
Board of Trustees on November 17, 1999, will remain in effect from year
to year, provided each such annual continuance is specifically approved by the
Fund's Board of Trustees or "majority" (as defined in the 1940 Act) vote of its
shareholders and, in either case, by a majority vote of the Trustees who are not
parties to the Management Agreement or interested persons of any such party,
cast in person at a meeting called specifically for the purpose of voting on the
Management Agreement.
As compensation for its services and the related expenses borne by the
Manager, the Trust pays the Manager a fee, computed daily and payable monthly,
equal, on an annual basis, to .30% of the Fund's average daily net assets,
payable out of the Fund's net assets.
To the extent necessary, the Manager has undertaken to waive voluntarily
fees provided for in the Management Agreement and/or voluntarily to assume
certain expenses of the Trust so that total expenses of the Fund do not exceed
.30% of the Fund's average daily net assets.
During the fiscal years ended September 30, 1999, September 30, 1998
and September 30, 1997, the investment advisory fees paid to the Manager were
$1,257,595, $865,180 and $635,419, respectively. During such years, the Manager
waived advisory fees in the amounts of $407,351, $461,367 and $343,237,
respectively.
The Sub-Administrator
First Data Investor Services Group, Inc. (the "Sub-Administrator"), a
subsidiary of First Data Corporation which is located at 101 Federal Street,
Boston, Massachusetts 02110, serves as Sub-Administrator to the Fund pursuant to
a Sub-Administration Agreement with the Adviser (the "Sub-Administration
Agreement"). Under the Sub-Administration Agreement, the Sub-Administrator (a)
assists in supervising all aspects of the Fund's operations except those
performed by the Adviser under its advisory agreement with the Fund; (b)
supplies the Fund with office facilities (which may be in the
Sub-Administrator's own offices), statistical and research data, data processing
services, clerical, accounting and bookkeeping services, including, but not
limited to, the calculation of the net asset value of shares in the Fund,
internal auditing and legal services, internal executive and administrative
services, and stationery and office supplies; (c) prepares and distributes
materials for all Fund Board of Trustees' Meetings including the mailing of all
Board materials and collates the same materials into the Board books and assists
in the drafting of minutes of the Board Meetings; (d) prepares reports to Fund
shareholders, tax returns and reports to and filings with the SEC and state
"Blue Sky" authorities; (e) calculates the Fund's net asset value per share,
provides any equipment or services necessary for the purpose of pricing shares
or valuing the Fund's investment portfolio and, when requested, calculates the
amounts permitted for the payment of distribution expenses under any
distribution plan adopted by the Fund; (f) provides compliance testing of all
Fund activities against applicable requirements of the 1940 Act and the rules
thereunder, the Internal Revenue Code of 1986, as amended (the "Code"), and the
Fund's investment restrictions; (g) furnishes to the Adviser such statistical
and other factual information and information regarding economic factors and
trends as the Adviser from time to time may require; and (h) generally provides
all administrative services that may be required for the ongoing operation of
the Fund in a manner consistent with the requirements of the 1940 Act.
For such services and the related expenses borne by the
Sub-Administrator, the Manager pays an annual fee of .0275% of the average daily
net assets of the Trust and certain other affiliated funds not exceeding $10
billion, .0125% of net assets exceeding $10 billion but not exceeding $15
billion, and .01% of net assets exceeding $15 billion. The Sub-Administrator's
fee is paid by the Manager and will result in no additional expense to the
Trust.
The Distributor
The Trust, on behalf of the Fund, has entered into a Distribution Agreement
with Gabelli & Company, Inc. (the "Distributor"), a New York corporation which
is a subsidiary of Gabelli Funds, Inc., having principal offices located at One
Corporate Center, Rye, New York 10580-1434. The Distributor acts as agent of the
Fund for the continuous offering of its shares on a no-load basis at no cost to
the Fund. In connection with the sale of the Fund's shares, the Trust has
authorized the Distributor to give only such information and to make only such
statements and representations as are contained in the Fund's Prospectus or
Statement of Additional Information. Sales may be made only by Prospectus, which
may be delivered personally or through the mails. The Distributor is the Fund's
"principal underwriter" within the meaning of the 1940 Act, and bears all costs
of preparing, printing and distributing reports and prospectuses used by the
Trust in connection with the sale of the Fund's shares and all sales literature
printed, counsel fees and expenses in connection with the foregoing.
The Distribution Agreement is terminable by the Distributor or the Trust at
any time without penalty on not more than sixty (60) days' nor less than thirty
(30) days' written notice, provided that termination by the Trust must be
directed or approved by the Trustees, by the vote of the holders of a majority
of the outstanding voting securities of the Trust, or by written consent of a
majority of the Trustees who are not interested persons of the Trust or the
Distributor. The Distribution Agreement will automatically terminate in the
event of its assignment, as defined in the 1940 Act. The Distribution Agreement
provides that, unless terminated, it will remain in effect from year to year, so
long as continuance of the Distribution Agreement is approved annually by the
Trustees or by a majority of the outstanding voting securities of the Trust, and
in either case, also by majority of the Trustees who are not "interested"
persons of the Trust, or the Distributor, as defined in the 1940 Act.
Counsel
Willkie Farr & Gallagher, 787 Seventh Avenue, New York, New York
10019-6099, is counsel to the Trust.
Independent Auditors
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019, has been
selected as independent auditors for the Trust.
Custodian, Transfer Agent and Dividend Disbursing Agent
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110 is the custodian for the Fund's cash and securities securities
as well as the transfer and dividend disbursing agent (the "Custodian,"
"Transfer Agent" and "Dividend Disbursing Agent") for its shares. Boston
Financial Data Services, Inc. ("BFDS"), an affiliate of State Street located at
the BFDS Building, Two Heritage Drive, Quincy, Massachusetts 02171, performs the
services of transfer agent and dividend disbursing agent for the Fund.
Neither BFDS nor State Street assists in or is responsible for investment
decisions involving assets of the Fund.
PURCHASE OF SHARES
The procedures for purchasing shares of the Fund are summarized in the
Fund's Prospectus under "Purchase of Shares."
RETIREMENT PLANS
The Trust has available a form of Individual Retirement Account ("IRA") for
investment in Fund shares which may be obtained from the Distributor. The
minimum investment required to open an IRA for investment in shares of the Fund
is $1,000 for an individual. There is no minimum for additional investments in
an IRA.
Under the Code, individuals may make wholly or partly tax-deductible IRA
contributions of up to $2,000 annually, depending on whether they are active
participants in an employer-sponsored retirement plan and/or their income level.
However, dividends and distributions held in the account are not taxed until
withdrawn in accordance with the provisions of the Code. An individual with a
non-working spouse may establish a separate IRA for the spouse under the same
conditions and contribute a maximum of $4,000 annually to both IRAs provided
that no more than $2,000 may be contributed to the IRA of either spouse.
Investors satisfying statutory income levels requirements may make
non-deductible contributions up to $2,000 annually to a Roth IRA, distributions
from which are not subject to tax if a statutory five year holding period
requirement is satisfied.
Investors who are self-employed may purchase shares of the Fund through
tax-deductible contributions to retirement plans for self-employed persons,
known as Keogh or H.R. 10 plans. The Fund does not currently act as sponsor for
such plans. Fund shares may also be a suitable investment for other types of
qualified pension or profit-sharing plans which are employer-sponsored,
including deferred compensation or salary reduction plans known as "401(k)
Plans" which give participants the right to defer portions of their compensation
for investment on a tax-deferred basis until distributions are made from the
plans. The minimum initial investment for such plans is $1,000 and there is no
minimum for additional investments.
Investors should be aware that they may be subject to penalties or
additional tax on contributions or withdrawals from IRAs or other retirement
plans which are not permitted by the applicable provisions of the Code. Persons
desiring information concerning investments through IRAs or other retirement
plans should write or telephone the Distributor.
REDEMPTION OF SHARES
The procedures for redemption of shares of the Fund are summarized in the
Prospectus under "Redemption of Shares." The Trust has elected to be governed by
Rule 18f-1 under the 1940 Act pursuant to which the Trust is obligated to redeem
shares solely in cash up to the lesser of $250,000 or one percent of the net
asset value of the Fund during any 90-day period for any one shareholder.
None of the Manager, the Transfer Agent, the Trust or any of their
affiliates or agents will be liable for any loss, expense, or cost when acting
upon any oral, wired, or electronically transmitted instructions or inquiries
believed by them to be genuine. While precautions will be taken, as more fully
described below, shareholders bear the risk of any loss as the result of
unauthorized telephone redemptions or exchanges believed by the Transfer Agent
to be genuine. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. These procedures include
recording all phone conversations, sending confirmations to shareholders within
72 hours of the telephone transaction, verifying the account name and sending
redemption proceeds only to the address of record or to a previously authorized
bank account. If a shareholder is unable to contact the Trust by telephone, a
shareholder must also mail the redemption request to the Distributor at The
Gabelli Funds, P.O. Box 8308, Boston, Massachusetts 02266-8308.
NET ASSET VALUE
The method for determining the public offering price of the Fund's shares
and the net asset value per share is summarized in the Prospectus under
Pricing of Fund Shares."
The Fund relies on Rule 2a-7 under the 1940 Act to use the amortized cost
valuation method to stabilize the purchase and redemption price of its shares at
$1.00 per share. This method of valuation involves valuing portfolio securities
at their cost at the time of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
interest rate fluctuations on the market value of the securities. While reliance
on Rule 2a-7 should enable the Fund, under most conditions, to maintain a $1.00
share price, there can be no assurance that the Fund will be able to do so, and
investment in the Fund is neither insured nor guaranteed by the U.S. Government.
As required by Rule 2a-7, the Trustees have adopted the following policies
relating to the Fund's use of the amortized cost method:
(a) The Trustees have established procedures which they consider to be
reasonably designed, taking into account current market conditions
affecting the Fund's investment objective, to stabilize its net asset
value at $1.00 per share.
(b) The Trustees (i) have adopted procedures whereby the extent of
deviation between the current net asset value per share calculated
using available market quotations or market-based quotations from the
Fund's amortized cost price per share, will be determined at such
intervals as the Trustees deem appropriate and as are reasonable in
light of current market conditions, (ii) will periodically review the
amount of deviation as well as the methods used to calculate the
deviation, and (iii) will maintain records of the determination of
deviation and the Trustees' review thereof. In the event such
deviation exceeds 3/10 of 1%, the Trustees will promptly consider what
action, if any, should be taken to prevent the deviation from
exceeding 1/2 of 1%. Where the Trustees believe the extent of
deviation may result in material dilution or other unfair results to
investors or exiting shareholders, they shall take such action as they
deem appropriate to eliminate or reduce to the extent reasonably
practicable such dilution or unfair results.
(c) The Fund will seek to maintain a dollar-weighted average portfolio
maturity appropriate to its objective of maintaining a stable net
asset value per share; provided, however, that it will not purchase
any instrument with a remaining maturity (as determined pursuant to
Rule 2a-7) longer than 397 days nor maintain a dollar-weighted average
portfolio maturity which exceeds 90 days.
(d) The Fund will limit its portfolio investments, including repurchase
agreements, to those United States dollar-denominated securities which
the Manager, acting in accordance with procedures and guidelines
approved by the Trustees, determines to be of eligible quality and to
present minimal credit risks. The Fund will invest in U.S. Treasury
obligations and repurchase agreements collateralized by U.S. Treasury
obligations. The types of U.S. Treasury obligations in which the Fund
will invest include (1) bills, notes and bonds issued by the U.S.
Treasury that are direct obligations of the U.S. Government and (2)
component parts of U.S. Treasury notes and bonds, namely, either the
corpus (principal) of such Treasury obligations or one of the interest
payments scheduled to be paid on such obligations. See "Investment
and Risk Information" in the Prospectus.
(e) The Fund will record, maintain and preserve permanently in an easily
accessible place a written copy of the procedures described above and
will record, maintain and preserve for a period of not less than six
years (two years in an easily accessible place) a written record of
the Trustees' considerations and actions taken in connection with the
discharge of their obligations set forth above.
While the procedures adopted by the Trustees have been designed to enable
the Fund to achieve its investment objective of maintaining a $1.00 share price,
there can be no assurance that a constant share price will be maintained. In the
event that market conditions or changes in issuer creditworthiness result in a
substantial deviation between the Fund's $1.00 amortized cost price per share
and its net asset value per share based on the market value of the Fund's
portfolio, the Trustees will take such action as they deem appropriate to
eliminate or reduce to the extent possible any dilution of shareholder interests
or other unfair results to existing shareholders or investors. Such action may
include basing the purchase and redemption price of Fund shares on the Fund's
market-based net asset value, with the result that the Fund's price per share
may be higher or lower than $1.00.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Manager is responsible for decisions to buy and sell securities for the
Fund, arranging the execution of portfolio transactions on the Fund's behalf,
and selection of brokers and dealers to effect the transactions. Purchases of
portfolio securities are made from dealers, underwriters and issuers; sales, if
any, prior to maturity, are made to dealers and issuers. The Fund does not
normally incur any brokerage commission expense on such transactions. There were
no brokerage commissions incurred by the Fund since its commencement of
operations. The instruments purchased by the Fund are generally traded on a
"net" basis with dealers acting as principal for their own accounts without a
stated commission, although the price of the security usually includes a profit
to the dealer. Securities purchased in underwritten offerings include a fixed
amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. When securities are purchased or sold
directly from or to an issuer, no commissions or discounts are paid.
The policy of the Fund regarding purchases and sales of securities is that
primary consideration will be given to obtaining the most favorable price and
efficient execution of transactions.
<PAGE>
TAXATION
The Fund has qualified, and intends to continue to qualify, as a
"Regulated Investment Company" under Subchapter M of the Code. If so qualified,
the Fund will not be subject to federal income tax on its net investment income
and capital gains, if any, realized during any taxable year in which it
distributes such income to its shareholders. However, the Fund may still be
liable for an excise tax on income that is not distributed in accordance with a
calendar year requirement. The Fund intends to avoid the excise tax by making
timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless
of whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains, if any, derived from sales of portfolio securities held by
the Fund will generally be designated as long-term or short-term. Distributions
from the Fund's long-term capital gains are generally taxed at a favorable
long-term capital gains rate regardless of how long you have owned shares in the
Fund. Dividends from other sources are generally taxed as ordinary income.
Distributions from capital gains may be subject to state and local taxes.
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from the Fund a statement
of the amount and nature of the distributions made to you during the year.
INVESTMENT PERFORMANCE INFORMATION
The Fund will prepare a current quotation of yield from time to time. The
yield quoted will be the simple annualized yield for an identified seven (7)
calendar day period. The yield calculation will be based on a hypothetical
account having a balance of exactly one share at the beginning of the seven-day
period. The base period return will be the change in the value of the
hypothetical account during the seven-day period, including dividends declared
on any shares purchased with dividends on the shares but excluding any capital
changes. The yield will vary as interest rates and other conditions affecting
money market instruments change. The yield for the seven-day period ended
September 30, 1999 was 4.46% (4.36% without waivers), which is equivalent to an
effective yield of 4.56% (4.46% without waivers). The yield also depends on
the quality, length of maturity and type of instruments in the Fund's portfolio
and its operating expenses. The Fund may also prepare an effective annual yield
computed by compounding the unannualized seven-day period return as follows: by
adding 1 to the unannualized seven-day period return, raising the sum to a power
equal to 365 divided by 7, and subtracting 1 from the result.
EFFECTIVE YIELD = [(base period return + 1)365/7] -1
The Fund may also calculate the tax equivalent yield over a thirty-day
period. The tax equivalent yield will be determined by first computing the
current yield as discussed above. The Fund will then determine what portion of
the yield is attributable to securities, the income of which is exempt for state
and local income tax purposes. This portion of the yield will then be divided by
one minus the maximum state tax rate of individual taxpayers and then added to
the portion of the yield that is attributable to other securities.
The Fund's yield will fluctuate, and annualized yield quotations are not a
representation by the Fund as to what an investment in the Fund will actually
yield for any given period. Actual yields will depend upon not only changes in
interest rates generally during the period in which the investment in the Fund
is held, but also on any realized or unrealized gains and losses and changes in
the Fund's expenses.
The Fund may advertise certain total return information computed in the
manner described in the Prospectus. An average annual compound rate of return
("T") will be computed by using the redeemable value at the end of a specified
period "ERV" of a hypothetical initial investment of $1,000 ("P") over a period
of time ["n"] according to the formula: P (1 + T)n = ERV.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., IBC Money Fund Report, The Bank Rate Monitor, other
industry publications, business periodicals, rating services and market indices.
DESCRIPTION OF THE FUND'S SHARES
Description of Shares, Voting Rights and Liabilities
The Fund is the initial series of shares of beneficial interest (par value
$.001) of the Trust. The Trustees are authorized to designate one or more
additional series of shares of beneficial interest of the Trust, each series
representing a separate investment portfolio. Shares of all series will have
identical voting rights, except where by law, certain matters must be approved
by a majority of the shares of the affected series. Each share of any series of
shares when issued has equal dividend, liquidation (see "Redemption of Shares")
and voting rights within the series for which it was issued and each fractional
share has those rights in proportion to the percentage that the fractional share
represents of a whole share. Shares will be voted in the aggregate.
Shares have no preference, preemptive, conversion or similar rights. All
shares, when issued in accordance with the terms of the offering, will be fully
paid and nonassessable. Shares will be redeemed at net asset value, at the
option of the shareholder.
The Fund sends semi-annual and annual reports to all of its shareholders
which include a list of the Fund's portfolio securities and the Fund's financial
statements which shall be audited annually. Unless it is clear that a
shareholder holds as nominee for the account of an unrelated person or a
shareholder otherwise specifically requests in writing, the Fund may send a
single copy of semi-annual, annual and other reports to shareholders to all
accounts at the same address and all accounts of any person at that address.
It is the intention of the Trust not to hold annual meetings of
shareholders. The Trustees may call a special meeting of shareholders for action
by shareholder vote as may be required by the 1940 Act, the Declaration of Trust
of the Trust or the By-Laws of the Trust. In addition, the Trust will call a
special meeting of shareholders for the purpose of voting upon the question of
removal of a Trustee or Trustees, if requested to do so by the holders of at
least 10% of the Trust's outstanding shares, and the Trust will assist in
communications with other shareholders as required by Section 16(c) of the 1940
Act.
Shares of the Trust have noncumulative voting rights which means that the
holders of more than 50% of shares can elect 100% of the Trustees if the holders
choose to do so, and, in that event, the holders of the remaining shares will
not be able to elect person or persons as Trustees. The Transfer Agent does not
issue certificates evidencing Fund shares.
<PAGE>
FINANCIAL STATEMENTS
THE GABELLI U.S. TREASURY MONEY MARKET FUND
STATEMENT OF NET ASSETS -- SEPTEMBER 30, 1999
Annualized
Principal Yield at Date Maturity Market
Amount of Purchase Date Value
U.S. TREASURY OBLIGATIONS -- 99.8%
U.S. Treasury Bills -- 72.7%
$350,690,000 U.S. Treasury Bills
4.439% to 4.887% 10/14/99- 348,858,078
11/26/99
Interest Rate
U.S. Treasury Notes -- 27.1%
30,000,000 U.S. Treasury Notes -- 5.625% 11/30/99 30,037,932
40,000,000 U.S. Treasury Notes -- 5.375% 01/31/00 40,034,095
15,000,000 U.S. Treasury Notes -- 5.500% 02/29/00 15,014,305
25,000,000 U.S. Treasury Notes -- 5.500% 03/31/00 25,026,682
40,000,000 U.S. Treasury Notes -- 5.875% 11/15/99 20,022,440
----------
130,135,454
----------
TOTAL INVESTMENTS (Cost $478,993,532)(a) 99.8% 478,993,532
Other Assets and Liabilities (Net) 0.2 1,105,980
----- ----------
NET ASSETS (applicable to 480,099,512 shares outstanding,
$0.001 par value, one billion shares authorized) 100.0% $480,099,512
===== ==========
NET ASSET VALUE, Offering and Redemption Price Per Share $1.00
=====
- ----------------------------------------------
(a) Aggregate cost for Federal tax purposes.
THE GABELLI U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1999 1998 1997(d) 1996 1995
---- ---- ---- ---- ----
Operating performance:
Net asset value, beginning of year.... $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Net investment income (a)............. 0.0422 0.0496 0.0485 0.0492 0.0528
Net realized gain on investments...... 0.0005 0.0005 0.0013 0.0006 0.0002
------ ------ ------ ------ ------
Total from investment operations...... 0.0427 0.0501 0.0498 0.0498 0.0530
------ ------ ------ ------ ------
Distributions to shareholders:
Net investment income................. (0.0422) (0.0496) (0.0485) (0.0492) (0.0528)
Net realized gain on investments.. (0.0005) (0.0005) (0.0013) (0.0006) (0.0002)
------ -------- -------- -------- --------
Total distributions................... (0.0427) (0.0501) (0.0498) (0.0498) (0.0530)
------ -------- -------- -------- --------
Net asset value, end of year.......... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total return (b)...................... 4.4% 5.1% 5.1% 5.1% 5.4%
==== ==== ==== ==== ====
Ratios to average net assets and
supplemental data:
Net assets, end of year (in 000s)... $480,100 $314,394 $203,542 $216,038 $218,036
Ratio of net investment income
to average net assets.............. 4.19% 4.91% 4.85% 4.92% 5.30%
Ratio of operating expenses
to average net assets (c).......... 0.30% 0.30% 0.30% 0.30% 0.27%
.........
- ------------------
+ 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.
(a) Net investment income before fees waived by the Manager for the fiscal
years ended September 30, 1999, 1998, 1997, 1996 and 1995 were $0.0412,
$0.0475, $0.0469, $0.0477 and $0.0516, respectively.
(b) Operating expense ratios before fees waived by the Manager for the fiscal
years ended September 30, 1999, 1998, 1997, 1996 and 1995 were 0.40%,
0.46%, 0.45%, 0.45% and 0.39%, respectively.
(c) Gabelli Funds, LLC (formerly known as Gabelli Funds, Inc.) became the sole
investment adviser of the Fund on April 15, 1997.
</TABLE>
See accompanying notes to financial statements.
THE GABELLI U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED SEPTEMBER 30, 1999
Investment Income:
Interest. $19,227,778
------------
Expenses:
Management fee 1,257,445
Transfer agent fees 169,462
Custodian fees 70,007
Registration fees 49,500
Legal and audit fees 33,700
Trustees' fees 26,163
Shareholder communications expenses 36,631
Miscellaneous expenses 22,038
------------
Total Expenses before fees waived
by Manager 1,664,946
Fees waived by Manager (407,351)
------------
Total Expenses - Net 1,257,595
------------
Net Investment Income 17,970,183
Net realized gain on investments 230,183
-------------
Net Increase in net assets resulting from operations $18,200,366
========
THE GABELLI U.S. TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
September September
30, 1999 30, 1998
---------- ----------
Operations:
Net investment income $17,970,183 $14,145,169
Net realized gain on investments 230,183 240,664
----------- -----------
Net increase in net assets resulting
from operations 18,200,366 14,385,833
----------- -----------
Distribution to shareholders:
Net investment income (17,970,183) (14,145,169)
Net realized gain on investments (230,183) (245,894)
----------- ------------
Total distribution to shareholders (18,200,366) (14,391,063)
----------- ------------
Share transactions ($1.00 per share):
Shares sold.... 2,175,277,133 1,769,620,862
Shares issued upon reinvestment of dividends
and distributions 17,576,389 13,843,721
Shares redeemed (2,027,147,677) (1,672,607,748)
------------ ------------
Net increase in net assets 165,705,845 110,851,605
Net Assets:
Beginning of period 314,393,667 203,542,062
------------ ------------
End of period.. $480,099,512 $314,393,667
========= =========
See accompanying notes to financial statements.
THE GABELLI U.S. TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. 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 "1940 Act"). The Fund's primary objective is high current
income consistent with the preservation of principal and liquidity. The Fund
commenced investment operations on October 1, 1992.
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. 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.
3. AGREEMENTS WITH AFFILIATED PARTIES. The Trust has entered into a
management agreement (the "Management Agreement") with Gabelli Funds, LLC (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 year ended September 30,
1999, the Manager voluntarily waived management fees of $407,351.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
THE GABELLI U.S. TREASURY MONEY MARKET FUND
(a series of The Gabelli Money Market Funds)
We have audited the accompanying statement of net assets of The Gabelli
U.S. Treasury Money Market Fund (the "Fund") (a series of The Gabelli Money
Market Funds) as of September 30, 1999, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1999 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Gabelli U.S. Treasury Money Market Fund as of September 30, 1999, the results of
its operations for the year then ended, the changes in their net assets for each
of the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles.
Ernst & Young LLP
New York, New York
November 1, 1999
1999 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Fund during the
period from October 1, 1998 through September 30, 1999 which was derived from
U.S. Treasury Securities was 100%. Such income is exempt from state and local
income tax in all states. Due to the diversity in state and local tax law, it is
recommended that you consult your personal tax advisor as to the applicability
of the information provided to your specific situation.
<PAGE>
PART C: OTHER INFORMATION
Item 23. Exhibits.
(a) Certificate of Trust is incorporated by reference to
Post-Effective Amendment No. 6 to the Registrant's Registration
Statement on Form N-1A as filed with the SEC via EDGAR on January
31, 1997.
Declaration of Trust is incorporated by reference to
Post-Effective Amendment No. 6 to the Registrant's Registration
Statement on Form N-1A as filed with the SEC via EDGAR on January
31, 1997.
(b) Amended and Restated By-Laws are incorporated by reference to
Post-Effective Amendment No. 6 to the Registrant's Registration
Statement on Form N-1A as filed with the SEC via EDGAR on January
31, 1997.
(c) Not Applicable.
(d) Management Agreement between the Registrant and Gabelli Funds,
Inc. ("Gabelli Funds" or the "Manager") dated December 16, 1994
is incorporated by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form N-1A as filed
with the SEC via EDGAR on January 31, 1996.
Amendment to the Management Agreement between the Registrant and
Gabelli Funds, LLC (formerly known as "Gabelli Funds, Inc.")
dated November 17, 1999 is filed herewith.
Sub-Administration Agreement between the Manager and First Data
Investor Services Group, Inc. (formerly known as "The Shareholder
Services Group, Inc.", "FDISG" or the "Sub-Administrator") dated
May 1, 1995 is incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on
Form N-1A as filed with the SEC via EDGAR on January 31, 1996.
(e) Distribution Agreement between the Registrant and Gabelli &
Company, Inc. ("Gabelli" or the "Distributor") dated August 18,
1992 is incorporated by reference to Post-Effective Amendment No.
5 to the Registrant's Registration Statement on Form N-1A as
filed with the SEC via EDGAR on January 31, 1996.
(f) Not Applicable.
(g) Custodian Agreement between the Registrant and State Street Bank
and Trust Company is incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's Registration Statement on
Form N-1A as filed with the SEC via EDGAR on January 31, 1997.
(h) Transfer Agency Agreement between the Registrant and State Street
Bank and Trust Company is incorporated by reference to
Post-Effective Amendment No. 6 to the Registrant's Registration
Statement on Form N-1A as filed with the SEC via EDGAR on January
31, 1997.
(i) Consent of Counsel is filed herewith.
(j) Consent of Independent Auditors is filed herewith.
Powers of attorney for Anthony Colavita, Vincent E. Enright,
Thomas E. O'Connor, John J. Parker, Karl Otto Pohl and Anthonie
C. van Ekris are incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's Registration Statement on
Form N-1A as filed with the SEC via EDGAR on January 31, 1997.
Power of Attorney for Mario J. Gabelli is incorporated by
reference to Post-Effective Amendment No. 8 to the Registrant's
Registration Statement on Form N-1A as filed with the SEC via
EDGAR on February 2, 1998.
Secretary's Certificate ratifying and approving a power of
attorney for Mario J. Gabelli is filed herewith.
(k) Not Applicable.
(l) Purchase Agreement is incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's Registration Statement on
Form N-1A as filed with the SEC via EDGAR on January 31, 1997.
(m) Not Applicable.
(n) Not Applicable.
(o) Not Applicable.
Item 24. Persons Controlled by or Under Common Control with the Fund.
None.
Item 25. Indemnification.
To the extent consistent with Section 17(h) and (i) of the Investment
Company Act of 1940, as amended (the "1940 Act") and pursuant to
Sections 2 and 3 of Article VII of the Registrant's Declaration of
Trust and Article VI of the Registrant's By-Laws, Trustees, officers
and employees of the Trust will be indemnified to the maximum extent
permitted by Delaware law and the 1940 Act.
Reference is made to Sections 2 and 3 of Article Seven of Registrant's
Declaration of Trust and Article VI of the Registrant's By-Laws.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing
provisions, or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in that Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses
incurred or paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person
in connection with the securities being registered, Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The Registrant hereby undertakes that it will apply the
indemnification provisions of its Declaration of Trust, its By-Laws,
the Management Agreement, the Sub-Administration Agreement and the
Distribution Agreement in a manner consistent with Release No. 11330
of the Securities and Exchange Commission under the 1940 Act.
Item 26. Business and Other Connections of the Investment Adviser
Gabelli Funds, LLC (the "Manager") is a registered investment adviser
providing investment management and administrative services to the
Registrant. The Manager also provides similar services to other mutual
funds.
The information required by this Item 26 with respect to any other
business, profession, vocation or employment of a substantial nature
engaged in by directors and officers of the Manager during the past
two years is incorporated by reference to Form ADV filed by the
Manager pursuant to the Investment Advisers Act of 1940 (SEC File No.
801-37706).
Item 27. Principal Underwriters
(a) Gabelli & Company, Inc. ("Gabelli & Company") currently acts as
distributor for The Gabelli ABC Fund, The Gabelli Asset Fund, The
Gabelli Blue Chip Value Fund, The Gabelli Capital Asset Fund, The
Gabelli Convertible Securities Fund, Inc., The Gabelli Equity
Income Fund, The Gabelli Equity Trust Inc., The Gabelli Global
Convertible Securities Fund, The Gabelli Global Interactive Couch
Potato(R)Fund, The Gabelli Global Multimedia Trust Inc., The
Gabelli Global Telecommunications Fund, Gabelli Gold Fund, Inc.,
The Gabelli Growth Fund, The Gabelli International Growth Fund,
Inc., The Gabelli Global Opportunity Fund, The Gabelli Mathers
Fund, The Gabelli Small Cap Growth Fund, The Gabelli Utilities
Fund, The Gabelli Utility Trust, The Gabelli Value Fund, Inc. and
the Gabelli Westwood Funds.
(b) The information required by this Item 27 with respect to each
director, officer or partner of Gabelli & Company is incorporated
by reference to Schedule A of Form BD filed by Gabelli & Company
pursuant to the Securities Exchange Act of 1934, as amended (SEC
File No. 8-21373).
(c) Not applicable.
Item 28. Location of Accounts and Records.
All such accounts, books and other documents required by Section 31(a)
of the 1940 Act and Rules 31a-1 through 31a-3 thereunder are
maintained at the offices of Gabelli Funds, LLC , One
Corporate Center, Rye, New York 10580-1434 First Data Investor
Services Group, 101 Federal Street, Boston, Massachusetts 02110 ;
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110; and Boston Financial Data Services, Inc., Two
Heritage Drive, North Quincy, Massachusetts 02171.
Item 29. Management Services.
Not Applicable.
Item 30. Undertakings.
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant, THE GABELLI
MONEY MARKET FUNDS, has duly caused this Post-Effective Amendment to its
Registration Statement to be signed on its behalf by the undersigned, duly
authorized, in the City of Rye and State of New York, on the 29th day of
November, 1999
THE GABELLI MONEY MARKET FUNDS
By: Mario J. Gabelli *
Mario J. Gabelli
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 10 to its Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
Signatures Title Date
/s/ Mario J. Gabelli* President and Trustee 11/29/99
Mario J. Gabelli
/s/ Bruce N. Alpert Vice President and 11/29/99
Bruce N. Alpert... Treasurer
/s/ Anthony Colavita* Trustee 11/29/99
Anthony J. Colavita
/s/ Vincent D. Enright* Trustee 11/29/99
Vincent E. Enright
/s/ John J. Parker* Trustee 11/29/99
John J. Parker
/s/ Karl Otto Pohl* Trustee 11/29/99
Karl Otto Pohl
/s/ Anthonie C. van Ekris* Trustee 11/29/99
Anthonie C. van Ekris
*By: /s/ BRUCE N. ALPERT 11/29/99
Bruce N. Alpert
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
23(d) Amendment to Management Agreement
23(i) Consent of Counsel
23(j) Consent of Independent Auditors
Secretary's Certificate
Amendment No. 1
to the
Management Agreement
This Amendment No. 1 dated as of November 17, 1999 is entered into by
Gabelli Funds, LLC (formerly known as Gabelli Funds, Inc.) (the "Manager") and
The Gabelli Money Market Funds (the "Trust").
WHEREAS, the Manager and the Trust entered into a Management Agreement
dated as of December 16, 1994 (the "Management Agreement"); and
WHEREAS, the Manager and the Trust wish to amend the Management Agreement
to reflect the change in the Manager's name;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
hereby agree as follows:
1. The name "Gabelli Funds, Inc." in the Management Agreement is hereby
deleted in all places where it appears and replaced with the name
"Gabelli Funds, LLC."
2. The Management Agreement shall remain in full force and effect in all
other respects.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 as
of the date and year first written above.
THE GABELLI MONEY MARKET FUNDS
By: /s/ BRUCE N. ALPERT
GABELLI FUNDS, LLC
By: /s/ BRUCE N. ALPERT
November 29, 1999
The Gabelli Money Market Funds
One Corporate Center
Rye, New York 10580-1434
Re: Post-Effective Amendment No. 10 to Registration Statement
(Securities Act File No. 33-48220; Investment Company Act
File No. 811-6687) (the "Registration Statement")
Ladies and Gentlemen:
You have requested us, as counsel to The Gabelli Money Market Funds (the
"Trust"), a business trust organized under the laws of the State of Delaware, to
furnish you with this opinion in connection with the Trust's filing of
Post-Effective Amendment No. 10 to its Registration Statement on Form N-1A (the
"Amendment").
We have examined copies of the Trust's Agreement and Declaration of Trust
and By-laws, each as now in effect, and the Amendment. We have also examined
such other records, documents, papers, statutes and authorities as we have
deemed necessary to form a basis for the opinion hereinafter expressed. In our
examination of the above material, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all copies submitted to us. As to
various questions of fact material to our opinion, we have relied upon
statements and certificates of officers and representatives of the Trust and
others. Based upon the foregoing, we are of the opinion that:
1. The Trust is duly organized and validly existing as a business trust
in good standing under the laws of the State of Delaware.
2. The shares of the Trust to be offered for sale pursuant to the
Registration Statement are duly authorized and, when sold, issued and
paid for as contemplated by the Registration Statement, will have been
validly and legally issued and will be fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment, to the reference to our name under the heading "Counsel and
Independent Accountants" in the Statement of Additional Information included as
part of the Amendment, and to the filing of this opinion as an exhibit to any
application made by or on behalf of the Trust or any distributor or dealer in
connection with the registration or qualification of the Trust or the shares
under the securities laws of any state or other jurisdiction.
We do not intend to express any opinion as to any matters governed by any
law other than the law of the State of New York, the General Corporation Law of
the State of Delaware (including the applicable provisions of the Delaware
Constitution and the reported judicial decisions interpreting those laws) and
the federal law of the United States.
Very truly yours,
/s/ Willkie Farr & Gallagher
Willkie Farr & Gallagher
Consent of Independent Auditors
We consent to the reference to our firm under the captions "Financial
Highlights" and "General Information - Counsel and Independent Auditors" and to
the use of our report on The Gabelli U.S. Treasury Money Market Fund dated
November 1, 1999, in this Registration Statement (Form N-1A No. 33-48220) of The
Gabelli Money Market Funds.
/s/ Ernst & Young, LLP
Ernst & Young, LLP
New York, New York
November 23, 1999
SECRETARY'S CERTIFICATE
I, Julie A. Tedesco, Assistant Secretary of The Gabelli Money Market Funds,
a Delaware business trust (the "Fund"), pursuant to the vote adopted by the
Board of Trustees at a meeting held on February 18, 1998 and in accordance with
said vote, do hereby certify that the Board Members ratified and approved a
power of attorney from Mario J. Gabelli authorizing Bruce N. Alpert to execute
and sign on behalf of Mario J. Gabelli, Chief Executive Officer of the Fund, all
amendments and supplements to the Fund's Registration Statement on Form N-1A.
IN WITNESS WHEREOF, I have hereunto set my hand as officer of said Fund
this 18th day of February, 1998.
/s/ JULIE A. TEDESCO
Julie A. Tedesco
Assistant Secretary
