[Photo of Mario J. Gabelli]
The
Gabelli
ABC
Fund
SEMI-ANNUAL REPORT
JUNE 30, 1996
<PAGE>
The Gabelli ABC Fund
One Corporate Center
Rye, New York 10580-1434
Semi-Annual Report
June 30, 1996
To Our Shareholders:
Rebounding from the inventory contraction of the previous two quarters, the
malaise of a snowy winter and political stalemate in Washington, the economy
surged ahead. Domestic profits will likely benefit despite earnings from
continental European sources being hobbled by a weaker economic backdrop and a
stronger dollar. This stronger than expected economy re-awakened long dormant
inflationary fears and a slumping bond market sounded a cautionary note for
stocks. Still, buoyed by favorable flow of funds -- investment in equity mutual
funds remained near record levels -- the Dow Jones Industrial Average and
Standard & Poors' 500 forged ahead.
INVESTMENT RESULTS (a)
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Quarter
----------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
1996: Net Asset Value .. $10.10 $10.16 -- -- --
Total Return ..... 4.1% 0.6% -- -- --
---------------------------------------------------------------------------
1995: Net Asset Value .. $ 9.94 $10.14 $10.41 $ 9.71 $ 9.71
Total Return ..... 3.9% 2.0% 2.7% 2.2% 11.2%
---------------------------------------------------------------------------
1994: Net Asset Value .. $10.12 $10.11 $10.42 $ 9.57 $ 9.57
Total Return ..... 0.9% (0.1)% 3.1% 0.6% 4.5%
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1993: Net Asset Value .. -- $10.10 $10.63 $10.03 $10.03
Total Return ..... -- 1.0%(b) 5.2% 2.6% 9.1%(b)
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Average Annual Returns - June 30, 1996 (a)
------------------------------------------
1 Year........................... 9.8%
.............................. 7.6%(c)
Life of Fund (b)................. 9.4%
.............................. 8.8%(c)
- -----------------------------------------------
Dividend History
- -------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 28, 1995 $0.93 $9.71
December 28, 1994 $0.91 $9.52
December 31, 1993 $0.88 $10.03
(a) Total return and average annual return reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. Of course, returns represent past performance and do not guarantee future
results. Investment returns and the principal value of an investment will
fluctuate. When shares are redeemed they may be worth more or less than their
original cost. (b) From commencement of operations on May 14, 1993. (c) Adjusted
for the maximum 2.0% sales charge applicable to investments not participating in
the Performance Guaranty Program.
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BARRON'S 75th Special Anniversary Issue
BARRON'S asked our Chief Investment Officer, Mario J. Gabelli, to discuss his
investment themes in its 75th Special Anniversary Issue. While these comments
were written in mid-February, we believe they are still valid today. Discussion
of individual companies is not necessarily reflective of the Fund's entire
portfolio.
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BARRON'S
===================================== 75th =====================================
Grand Slam Hitting
The new international middle class will be taking
to the friendly skies, for business and pleasure.
By Mario Gabelli
[Photo]
The ancient Greek dramatist Euripides said, "The best of seers is he who guesses
well." Each year since 1980, Barron's has given me the opportunity to sit down
with a distinguished group of good guessers at the annual Roundtable and divine
what the economy, the markets and some individual stocks would do in the year
ahead. Now, in honor of Barron's 75th Anniversary, I've been invited to stick my
neck out even further and discuss several investment themes that will
theoretically enrich readers over the next five years. Fair enough.
I will begin with the confession that over the past 20 years, our annual
macroeconomic and market forecasts haven't always been right. Fortunately for
our clients and Barron's readers, our investment methodology is not built upon
accurately predicting interest-rate trends or timing the market, but rather on
picking stocks, and many of our picks have fared quite well.
One reason is that we've had a good batting average identifying trends - we
call them catalysts - that have unlocked value in selected industry groups. A
catalyst can be a change in regulatory standards such as the original cable
television deregulation bill of 1984 that led us to lucrative investments in
cable stocks. It can be consolidation within an industry. The scramble for
filmed entertainment assets engendered by expanding distribution systems
throughout the 1980s and early 1990s inspired us to take substantial and
ultimately quite profitable positions in Warner Communications, MCA and
Paramount prior to their acquisitions by Time Inc., Matsushita and Viacom,
respectively.
Catalysts can also be corporate restructurings. The recent trend to heap
realize shareholder value through the sale or spinoff of businesses has helped
us earn good returns from "Humpty Dumpty" companies as all the king's horses and
all the king's men help break conglomerates into pieces again. Among them have
been Tenneco, American Brands, American Express, ITT and, now, AT&T.
Over the next five years, the most powerful trend we see is the explosive
growth of the international marketplace for American goods and services. This
traces its roots to two major catalysts: the rejuvenation of American industry
spawned by a declining cost of capital and enormous productivity gains, and the
victory of global capitalism symbolized best by the crumbling of the Berlin
Wall. Good old-fashioned Yankee ingenuity has made us more than competitive with
Japan and Germany. We are now in a terrific position to conquer new
international economic frontiers.
With free-markets economies evolving in China and the former Soviet bloc,
and the middle classes rapidly expanding in developing nations in Latin America
and the Pacific Rim, there will be 2.5 billion to three billion new consumers by
the turn of the century. How is this emerging international middle class going
to spend its money? If past is prologue - and we can learn something by looking
back at the economic evolution of the great American middle class - the new
international middle class
- ------------------------------------
Mario Gabelli, a regular member of
Barron's Roundtable since 1980, is
chairman and chief investment officer
of Gabelli Funds Inc.
[Drawings]
Photograph: Merry Alpern/Jim Lukoski for Barron's;
Illustration: Jessie Hartland for Barrons
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2
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will upgrade their food consumption habits; if it is made available, they will
buy telephone service; they will spend money on entertainment, and they will
travel.
Investors of our persuasion - stockpickers, if you will - can't talk about
investment trends without naming some names. Unlike the Roundtable, where we are
constantly prodded both by Barron's and our colleagues to fill in the
fundamental blanks on individual stock selections, I won't be providing hard
data on the companies I mention in this article. Nor will I make predictions
about short-term earnings and cash flow. That said, consistent with our
Graham-and-Dodd-oriented value philosophy, we would like to own the businesses
named here for the long term.
It's Not Chickenfeed: Let's start in, of all places, Iowa. The American grains
farmer is the most productive in the world. Iowa is agriculturally
state-of-the-art. Let me give you a hypothetical example. There are seven ounces
of grain needed to produce one ounce of meat at market. If chicken or pork
consumption in China were to increase by one ounce per capita, and Iowa were to
produce all the grain used to fatten these Chinese chickens and hogs, on a gross
national product basis, Iowa would be among the richest countries in the world.
This may be perceived as a silly example. But its purpose is to call attention
to the tremendous upside potential for American grain farmers and vendors to
those farmers. Agricultural equipment manufacturers like John Deere, companies
that move grains to shipping centers, like Archer-Daniels-Midland, and
irrigation-equipment makers like Lindsay Manufacturing should all be long-term
beneficiaries of the increased role the American farmer will play in feeding the
world.
Dialing for Dollars: Once the new international consumer puts some more meat on
the table, what else would make his or her life better? Being able to call
friends and family on the telephone would be a big step forward. In fact, you
could argue that telecommunications is both the engine and the caboose in the
emergence of the international middle class. To compete on the global stage,
businesses in developing countries need healthy stock markets to attract global
capital. Modern telecommunications systems are a prerequisite. As efficient
telecommunications systems further enhance economic growth and expand the middle
class, the demand for more universal telephone service increases. Here, we need
to tip our hat to Craig McCaw's evolutionary theory of time and space, which
effectively jump-started the cellular telephone industry. And when it comes to
developing countries, it is wireless service that will help bring
telecommunications services at reasonable prices.
Arguably, telecommunications is the No. 1 global growth industry for the
next decade or more. Consequently, long-term investors will not have to be
terribly discriminating to earn pretty good returns in this sector. But rather
than take a scattershot approach, investors might maximize their returns by
focusing on those segments of the industry that will grow the fastest and the
dominant players therein. The big three U.S. long distance companies, AT&T, MCI
and Sprint, are rapidly developing the strategic alliances with national and
local carriers around the world that should allow them to dominate the
international long-distance market. Telecommunications equipment manufacturers
like Lucent, the spinoff from AT&T, and Northern Telecom will play a big role in
wiring the world. Suppliers of advanced cable equipment like Scientific Atlanta
also have terrific international growth prospects. On the wireless side,
cellular-phone makers like Motorola and Nokia should thrive. A special mention
should go to AirTouch, which has done a terrific job winning joint-venture
cellular-telephone franchises throughout Europe. Two other cellular investments
worth considering are 360 Communications, which is the domestic cellular spinoff
from Sprint, and Britain's Vodafone.
If you favor a more focused "special situation" approach, the Canadian
telephone giant BCE should benefit when it sells off its substantial investment
in Northern Telecom and as Canadian deregulation catches up to the rest of the
world. On a per-capital basis, the Vancouver metropolitan area has the highest
concentration of expatriate Chinese in North America. This could prove to be a
great "gateway to China."
Global Eyeballs: No American products travel better than filmed entertainment
and pre-recorded music. Several years ago, the investor relations people at Time
Warner were kind enough to give us a tape of Warner cartoon characters providing
a global geography lesson dubbed in a dozen foreign languages. We've used this
tape at our annual client meeting to illustrate the global reach of the American
entertainment industry. There is simply no place you can go in the world without
American film being a staple of cinematics, cable TV or broadcast entertainment.
The same goes for music. Just look at the convergence of the computer, telephone
and cable television industries in the U.S. Overseas opportunities beckon as
well. In the past five years alone, the number of satellite dishes in India has
gone from 400,000 to 10 million. As the distribution channels expand worldwide,
the value of entertainment will continue to increase.
With the consolidation we've already experienced in the filmed
entertainment industry, there are fewer ways to participate. Time Warner is a
dominant global company in both filmed entertainment and pre-recorded music.
Assuming the marriage with Turner Broadcasting is consummated, Time could become
an international cable TV powerhouse as well. The stock price has been
restrained by concerns about Time's debt, the unwinding of what has become an
acrimonious relationship with US West, and the uncertain prospects for Time
Warner's huge cable television operations. Investors are currently blind to the
forest through the trees on this one. In the long run, however, we are confident
the market will recognize Time Warner's pre-eminent global position in
entertainment software.
Other beneficiaries of this favorable long-term trend for entertainment
software producers and packagers also include Viacom - the world wants its MTV;
Seagram, the new owner of MCA, and Liberty Media, John Malone's combination of
Tele-Communications Inc.'s cable network investments.
Up, Up and Away: Air traffic is tremendously sensitive to increases in personal
income. The new international middle class will be taking to the friendly skies.
They will fly for business, and they will fly for pleasure. Over the next five
years, you could probably make a lot of money investing in international airline
stocks. But it will be less complicated and perhaps just as profitable investing
in Boeing, which along with Europe's Airbus consortium will build the foreign
fleets to accommodate increasing air traffic abroad.
We are almost right at the bottom of a five-year down cycle in the aircraft
industry. Industry studies indicate that in the next 20 years, there will be
12,000 new aircraft built to satisfy incremental global demand and 4,000 to
replace aircraft that will be retired because they are too old or
fuel-inefficient or don't meet new noise-control requirements. That's 16,000 new
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3
<PAGE>
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airplanes to be built over the next two decades. Boeing, which is a
technological leader, will get the lion's share of orders.
Another option is to invest in vendors to Boeing. There are very few pure
plays in this arena, but companies deriving a material volume of revenues from
commercial aerospace include Ametek, Precision Castparts, Moog, Crane, SPS
Technologies, Honeywell and Curtiss-Wright. Sequa Corp., whose Chromalloy
division is a leader in jet engine maintenance and repair, would be a good
"aging of the existing fleet" play.
The Deal: Another global dynamic that isn't new, but is far from finished, is
strategic merger-and-acquisition activity. At the 1995 Roundtable, I said there
would be a ton of deals done in the year ahead. It worked out to be $458 billion
in deals in the U.S. and $866 billion globally. I don't know that we will see
that kind of record volume this year, but you will see some big numbers. Why?
The world is awash in liquidity, rising equity markets make stock a more
valuable currency and, most importantly, it is still cheaper to buy businesses
on global stock markets than it is to build them from scratch.
How do you take advantage of this long-term trend? I am going to
unabashedly preach for my own church here. As Benjamin Graham and his successor
at Columbia, Roger Murray, instructed us, and as Warren Buffett has put so
profitably into practice, you approach stocks as if they were pieces of a
business you want to buy at a discount to what Graham called intrinsic value,
others call economic value, and what years ago was termed "private market
value."
How do you go about quantifying value? We believe free cash flow, defined
as earnings before interest, taxes and depreciations (EBITD), or a slight
variation, EBITDA, both minus the capital expenditures necessary to grow the
business, is the best barometer of a company's value. Most corporate
merger-and-acquisition people look at the very same thing. When the informed
industrialist is evaluating a business for purchase, he or she is not going to
put a lot of weight on stated book value. That's for accountants, not for savvy
buyers of business. They probably don't care much about net earnings. Clever
corporate managements can be creative in booking earnings. What that informed
industrialist wants to know is: How much cash is this business throwing off
today and how much is he going to have to invest in this business to sustain or
grow this stream of cash in the future?
There are other factors in determining a stock's private market value. Cost
of capital always affects a company's values. That's why stocks tend to be
valued lower when interest rates rise. Cash flow growth rates will alter values,
too. Just as growth-stock investors will pay a higher price-to-earnings ratio
for higher earnings growth, private-market-value investors will pay a higher
multiple of cash flow for faster cash-flow growth. Finally, sophisticated
business buyers will look beyond the balance sheet for hidden assets - valuable
land on the books at original cost or an overfunded pension plan - as well as
hidden liabilities, like unfunded health-care responsibilities or potentially
costly environmental problems.
By doing this kind of analysis of income statements and balance sheets, and
checking out all those little footnotes attached, and keeping an eye on the
prices businesses are being bought and sold at every day out there in the real
world, you can quantify the value of a business or group of businesses. You can
usually find fundamental bargains - stocks selling at substantial discounts to
private market value. Then you have to ask the subjective questions: Who might
want to own this company? Would management be receptive to a takeover proposal?
Are the target company's assets so unique that someone might pay well above fair
value?
If you can come up with some positive answers to questions like these, you
may well have found yourself a terrific takeover candidate.
Don't Expect Too Much: Lastly, some comments on the longer-term prospects for
equities. I'm not talking about what is going to happen to the market over the
next quarter or even the next several years. However, I do think investors
should have some perspective on what they can expect. The average annualized
return on equities over the last 15 years, as measured by the S&P 500, is 14.8%.
That's almost 50% above the historical return on stocks on an annualized basis.
When you compound this out 10 years, the differential is staggering. Will we see
the same kind of returns from stocks over the next 15 years? I wouldn't bet the
ranch on it. Sooner or later, this roaring bull market will end, either with a
substantial correction or a bear market or, preferably, an extended period of
much more modest returns.
How should today's investor prepare for this? I would start by adjusting
expectations. When making financial planning assumptions, use conservative
return figures for equities, and save and invest accordingly. In other words, if
you are putting a given amount of dollars into equities and assuming that it
will compound at 15% a year over the next 10-20 years, you will likely find your
children's college fund or your retirement nest egg more than a little short.
Secondly, you might want to look at alternative investment strategies.
Market-neutral disciplines like risk arbitrage, which is capable of delivering
low- to mid-double-digit annualized returns regardless of the direction of the
broad equities market, should be considered. This will be particularly rewarding
if what we have characterized as the third great wave of mergers continues as
long as we expect it to.
Finally, although one can play many global trends from the relative comfort
of the New York Stock Exchange, investors should internationalize their
portfolios. Twenty-five years ago, U.S. equities represented 66% of the
capitalization of the total global equities market. Today it is 38%. Twenty
years ago, only the most adventurous Americans would invest in places like Spain
or Italy. Today, there are billions of American dollars in emerging markets in
Latin American and the Pacific Rim. It has always been my inclination to
challenge the conventional wisdom. But I do think there is some legitimacy to
the idea that many foreign economies will grow faster than the U.S., and that
returns from foreign equities markets will trend higher than our own.
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4
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Investment Performance
For the quarter and one year periods ended June 30, 1996, The Gabelli ABC
Fund's net asset value increased 0.6% and 9.8%, respectively. For the six months
ended June 30, 1996, the Fund's return was 4.6%. The Fund, which seeks to
achieve a positive return in various market environments, had a total return
since inception of 32.7% through June 30, 1996, which equates to a 9.4%
annualized rate of return. Year-to-date the Fund has exceeded its objectives of
providing an attractive rate of return without excessive risk of capital.
The 5% Performance Guaranty Program For 1996
On January 2, 1996, Gabelli Funds, Inc. launched its fourth Performance
Guaranty Program, once again guaranteeing that the value of your principal
investment up to $5,000 would return at least 5% for the one year period through
December 31, 1996. Accounts which participated in the 1995 Performance Guaranty
Program are participating in the new program (up to $5,000) if their investment
was added to or remained in the Fund on January 2, 1996 and is held through
December 31, 1996 with distributions reinvested. There is no sales charge for
investments covered by the new program. The portion of any new investment in
excess of $5,000 made after January 2, 1996 and additional investments made
subsequent to that date are subject to a 2% sales charge. From January 2, 1996
through June 30, 1996 participants are up 4.5%. Shareholders will be notified
later this year whether a new Performance Guaranty Program will be available in
1997.
Let's Talk Stocks
The following are company specifics on selected holdings of our Fund's
investments. Favorable EBITDA prospects do not necessarily translate into higher
stock prices, but they do express a positive trend which we believe will develop
over time.
Acme-Cleveland Corp. (AMT - $30.00 - NYSE) is a Cleveland-based manufacturer of
products aimed at two broad markets telecommunications and industrial processes'
sensors. To secure a bigger foothold in the telecommunications test equipment
market, Danaher Corp. (DHR - $43.50 - NYSE) has signed a definitive agreement to
acquire AMT through a $30.00 per share cash tender. Danaher initiated its
acquisition attempt with a $27.00 bid in early March.
Genentech, Inc. (GNE - $52.375 - NYSE) is a leading player in the biotechnology
industry, making and marketing such products as Activase thrombolytic agent,
Nutropin growth hormones and Actimmune. Hoffman-La Roche owns 66% of GNE's
stock. La Roche's option agreement to buy the outstanding 34% has been revised
by extending the option for another four years, to 1999, and by increasing the
purchase price to $82 per share. The new agreement has an attractive feature
permitting GNE's shareholders to "put" their shares to Roche at $60 per share
one month after the expiration date if Roche doesn't elect to buy the remaining
shares then outstanding.
Hudson General Corp. - (HGC - $35.375 - ASE) is one of the major aviation
service companies engaged in providing a broad array of services such as
de-icing, baggage loading and off-loading, passenger ticketing and aircraft
cleaning and maintenance at airports throughout the U.S. and Canada. Hudson
General is also a 50% partner in a joint venture to develop approximately 4,000
contiguous acres on the island of Hawaii.
5
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Katy Industries, Inc. (KT - $15.00 - NYSE) operates its business through three
principal groups: industrial machinery, industrial components and consumer
products. The industrial machinery group manufactures and sells die-cutting
machinery, food packaging machinery and production machinery for the shoe making
industry. The industrial components group manufactures and sells components such
as specialty metals and testing and measuring instruments. The consumer products
group manufactures and sells sanitary maintenance supplies and air filter and
electronic components. Katy also has a substantial investment portfolio, owning
39% of BeeGee Holding Company, 37.5% of Schon & Cie, AG and 135,000 shares of
Union Pacific Corporation. Katy's Syratech holdings were sold at year-end 1995
to Syratech for $50.8 million.
Nortek, Inc. (NTK - $11.625 - NYSE) is a diversified manufacturer of residential
and commercial building products, including kitchen range hoods, bathroom fans,
shower doors, cabinets and central heating and air conditioning systems. Nortek
operates within three principal product groups: Residential Building Products,
Air Conditioning and Heating Products, and Plumbing Products. A primary
beneficiary of the do-it-yourself and professional replacement, remodeling and
renovation markets, sales growth of continuing businesses has been approximately
10% per year over the last few years. The company returned to profitability in
1994 and is expected to be a strong cash flow generator over the next five
years. In this context, the board has authorized a share repurchase program. We
expect earnings per share to increase from $1.45 in 1996 to $2.75 in 2000 and
believe the stock is undervalued with a PMV of $25 for 1996.
Pacific Telecom, Inc. is a Vancouver, WA-based telecommunications company, whose
primary business is delivering local exchange services to rural and suburban
markets across the western and mid-western states. Pacific Telecom also has
cellular telephone interests in 29 rural and metropolitan markets representing
about two million POPS. Effective September 27, 1995, Pacific Telecom's majority
shareholder, PacifiCorp., acquired the remaining shares it did not previously
own at a price of $30.00. We believe the intrinsic value of Pacific Telecom to
be in excess of $50.00 and are seeking dissenters rights to capture this value
for our shareholders. We placed PacifiCorp in our Hall of Shame for the way it
froze out minority shareholders.
Stop & Shop Companies Inc. (SHP - $33.375 - NYSE), headquartered in Boston,
operates the largest supermarket chain in New England with 171 stores in
Massachusetts, Connecticut, Rhode Island and New York. The chain has agreed to a
takeover proposed by the Dutch international food retailer Royal Ahold NV. The
acquisition will create one of the largest supermarket chains in the nation.
Shareholders are to receive $33.50 per share in cash, which was a 25% premium to
the pre-offer stock price. The cash tender price is increased to $34.50 if
anti-trust approvals are not obtained by July 31, 1996.
Gabelli U.S. Treasury Money Market Fund
Many of our shareholders have become acquainted with The Gabelli U.S.
Treasury Money Market Fund. The Fund provides checkwriting and exchange
privileges. The Fund's expenses are capped at .30% of average net assets, making
it one of the most attractive U.S. Treasury-only money market funds. With
dividends that are exempt from state and local income taxes in all states, the
Fund is an excellent vehicle in which to store idle cash. An investment in The
Gabelli U.S. Treasury Money Market Fund is neither insured nor guaranteed by the
U.S. Government. There can be no assurance that the Fund will maintain a stable
$1 per share net asset value. Call us at 1-800-GABELLI (1-800-422-3554) for a
6
<PAGE>
prospectus which gives a more complete description of the Fund, including
management fees and expenses. Read it carefully before you invest or send money.
Internet
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, quarterly reports, closing prices, IRAs, 401(k)s and other
current news. You can also send us E-mail at [email protected].
In Conclusion
At the beginning of 1996, we forecast that higher than expected inflation
and rising long-term interest rates would restrain stock returns. Our economic
forecast has proved remarkably accurate. Thus far, the market has largely
ignored these economic signs and marched steadily forward. Whether it will
continue to do so in the second half is questionable.
As always, we are focusing on the individual stocks in the Fund's
portfolio. By concentrating on niche industry groups and individual companies
that can do well independent of prevailing economic and broad market trends, we
believe we are well positioned to prosper, even in a less generous market
environment. Our investment philosophy is simple and straightforward: buying
good businesses cheap will generate consistently superior returns.
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's NASDAQ symbol is GABCX. Please call us during the
day for further information.
We thank you for your confidence in our investing abilities and wish you a
productive and financially rewarding 1996.
Sincerely,
/s/ Mario J. Gabelli, CFA
Mario J. Gabelli, CFA
President and
Chief Investment Officer
July 30, 1996
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
7
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The Gabelli ABC Fund
Portfolio of Investments (Unaudited) -- June 30, 1996
================================================================================
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS -- 39.75%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.77%
5,000 GenCorp Inc.................... $ 64,000 $ 75,625
4,500 Wynn's International, Inc...... 79,650 127,125
----------- -----------
143,650 202,750
----------- -----------
AVIATION: PARTS AND ACCESSORIES -- 0.37%
6,000 Hi-Shear Industries Inc.+...... 31,300 36,750
1,000 General Motors Corporation,
Class H..................... 61,925 60,125
----------- -----------
93,225 96,875
----------- -----------
BROADCASTING -- 0.87%
5,000 Citicasters Inc................ 144,525 156,250
2,000 U.S. Satellite Broadcasting Co. 54,000 75,500
----------- -----------
198,525 231,750
----------- -----------
CONSUMER PRODUCTS -- 0.63%
10,000 Carter-Wallace, Inc............ 105,228 146,250
5,000 Kerr Group, Inc.+.............. 41,187 21,875
----------- -----------
146,415 168,125
----------- -----------
DIVERSIFIED INDUSTRIAL -- 6.67%
50,000 Acme-Cleveland Corp............ 1,492,250 1,500,000
18,000 Katy Industries, Inc. ......... 448,400 270,000
----------- -----------
1,940,650 1,770,000
----------- -----------
ENERGY -- 0.34%
5,600 Southwest Gas Corporation...... 90,718 89,600
----------- -----------
EQUIPMENT -- 0.71%
5,000 Lucent Technologies Inc........ 135,000 189,375
----------- -----------
FINANCIAL SERVICES -- 3.30%
20,000 AT&T Capital Corporation....... 878,500 875,000
----------- -----------
HEALTH CARE -- 8.99%
40,000 Community Health
Systems, Inc................ 2,073,306 2,070,000
6,000 Genentech, Inc.+............... 287,150 314,250
----------- -----------
2,360,456 2,384,250
----------- -----------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 0.40%
7,000 Ampco-Pittsburgh
Corporation................. 48,500 81,375
2,000 Nortek, Inc.+.................. 21,600 23,250
----------- -----------
70,100 104,625
----------- -----------
RETAIL -- 12.92%
2,000 Burlington Coat Factory
Warehouse Corporation+....... 24,600 21,000
1,000 Giant Food Inc. - Class A...... 32,050 35,875
100,000 Stop & Shop Companies.......... 3,313,898 3,337,500
6,000 Topps Co. ..................... 32,990 33,750
----------- -----------
3,403,538 3,428,125
----------- -----------
Principal
Amount Market
or Shares Cost Value
--------- ---- -----
WIRELESS COMMUNICATIONS -- 3.78%
11,500 Cellular Communications, Inc.+. $577,960 $610,938
3,000 COMSAT Corporation............. 75,056 78,000
500 EchoStar Communications
Corporation................. 16,645 14,125
10,000 Pacific Telecom, Inc. (a)...... 297,400 300,000
----------- -----------
967,061 1,003,063
----------- -----------
TOTAL COMMON STOCKS............ 10,427,838 10,543,538
----------- -----------
CONVERTIBLE CORPORATE BONDS -- 2.96%
AVIATION PARTS -- 2.08%
$500,000 Hudson General Corporation
Sub.Deb. Cv.
7.00%, 7/15/11.............. 504,882 550,000
----------- -----------
BUSINESS SERVICES -- 0.38%
94,000 Trans-Lux Corporation Sub. Deb.
Cv. 9.00%, 12/01/05......... 96,065 101,638
----------- -----------
FOOD AND BEVERAGE -- 0.41%
150,000 Flagstar Companies, Inc. Sub.
Deb. Cv.10.00%, 11/01/14.... 102,589 86,062
20,000 Ingles Markets, Incorporated
Sub. Cv. 10.00%, 10/15/08... 20,894 23,200
----------- -----------
123,483 109,262
----------- -----------
INDUSTRIAL EQUIPMENT AND
SUPPLIES -- 0.09%
30,000 NYCOR, Inc. Sub. Deb. Cv.
8.50%, 6/15/12.............. 26,278 24,750
----------- -----------
TOTAL CONVERTIBLE
CORPORATE BONDS............. 750,708 785,650
----------- -----------
CONVERTIBLE PREFERRED STOCKS -- 0.11%
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 0.11%
500 Navistar International Corporation
$6.00 Cv. Pfd. Ser. G....... 27,275 27,812
----------- -----------
TOTAL CONVERTIBLE
PREFERRED STOCKS............ 27,275 27,812
----------- -----------
CORPORATE BONDS -- 3.13%
FOOD AND BEVERAGE -- 0.25%
100,000 Flagstar Companies, Inc.
11.25%, 11/01/04............ 100,740 66,000
----------- -----------
INDUSTRIAL EQUIPMENT AND
SUPPLIES -- 2.88%
800,000 Nortek, Inc. 9.875%, 03/01/04.. 794,688 764,000
----------- -----------
TOTAL CORPORATE BONDS.......... 895,428 830,000
----------- -----------
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
The Gabelli ABC Fund
Portfolio of Investments (Unaudited) (Continued) -- June 30, 1996
================================================================================
Principal Market
Amount Cost Value
--------- ---- -----
U.S. GOVERNMENT OBLIGATIONS -- 53.57%
$14,300,000 U.S. Treasury Bills,
4.88% to 4.95% Due
08/08/96 to 08/15/96........ $14,212,031 $14,212,031
----------- -----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS................. 14,212,031 14,212,031
----------- -----------
TOTAL INVESTMENTS
-- 99.52%.................... $26,313,280* 26,399,031
-----------
Cash and Other Assets, in
excess of Liabilities -- 0.48% 128,430
-----------
NET ASSETS -- 100.00%
(2,611,202 shares
outstanding)................ $26,527,461
===========
Net Asset Value And
Redemption Price Per Share $10.16
======
MAXIMUM PUBLIC OFFERING
PRICE PER SHARE
($10.16/.980 Based on a
maximum sales charge of 2.0%) $10.37
======
- ----------
+ -- Non-income producing security.
(a) Security fair valued as determined by Board of Directors.
*For Federal Income Tax purposes:
Aggregate cost........................... $ 26,313,280
============
Gross unrealized appreciation............ $ 382,790
Gross unrealized depreciation............ (297,039)
------------
Net unrealized appreciation.............. $ 85,751
============
- --------------------------------------------------------------------------------
Top Ten Holdings
June 30, 1996
Stop & Shop Companies Cellular Communications, Inc.
Community Health Systems Hudson General Corporation
Acme-Cleveland Corp. Genentech, Inc.
AT&T Capital Corporation Pacific Telecom, Inc.
Nortek, Inc. Katy Industries, Inc.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
The Gabelli ABC Fund
Statement of Assets and Liabilities (Unaudited)
June 30, 1996
================================================================================
Assets:
Investments in securities, at value
(Cost $26,313,280) ................................... $26,399,031
Cash ..................................................... 89,086
Accrued interest receivable .............................. 56,038
Dividends receivable ..................................... 1,725
Deferred organizational expenses ......................... 45,502
-----------
Total Assets ......................................... 26,591,382
-----------
Liabilities:
Payable to Advisor ....................................... 21,700
Payable for distribution fees ............................ 5,425
Payable for Fund shares redeemed ......................... 20,668
Other accrued expenses ................................... 16,128
-----------
Total Liabilities .................................... 63,921
-----------
Net Assets (applicable to 2,611,202
shares outstanding) ................................. $26,527,461
===========
Net asset value and redemption
price per share ..................................... $ 10.16
===========
Net Assets Consist of:
Capital Stock, at par value .............................. $ 2,611
Additional paid-in-capital ............................... 25,556,940
Accumulated net investment income ........................ 212,247
Accumulated net realized gain on
investments and foreign currency
transactions ......................................... 670,399
Net unrealized appreciation on investments
and assets and liabilities denominated
in foreign currencies ................................ 85,264
-----------
Net Assets ........................................... $26,527,461
===========
Statement of Operations (Unaudited)
For the Six Months Ended June 30, 1996
================================================================================
Income:
Interest ................................................. $ 491,785
Dividends ................................................ 12,304
----------
Total Income ......................................... 504,089
----------
Expenses:
Investment advisory fees ................................. 127,844
Transfer & shareholder servicing agent ................... 52,969
Distribution expenses .................................... 31,912
Legal and audit fees ..................................... 14,590
Custodian fees and expenses .............................. 13,182
Printing and mailing ..................................... 12,653
Amortization of organization expenses .................... 12,160
Registration fees ........................................ 4,559
Directors' fees and expenses ............................. 3,891
Miscellaneous ............................................ 7,420
----------
Total Expenses ....................................... 281,180
----------
Investment income - net .................................. 222,909
----------
Net Realized and Unrealized Gain
on Investments:
Net realized gain on investments and
foreign currency transactions ........................ 647,312
Net change in unrealized appreciation .................... 294,300
----------
941,612
----------
Net increase in net assets resulting
from operations ..................................... $1,164,521
==========
Statement of Changes in Net Assets
================================================================================
Six Months
Ended June 30, Year Ended
1996 December 31,
(Unaudited) 1995
--------------- ------------
Increase (decrease) in Net Assets:
Net Investment Income ...................... $ 222,909 $ 406,885
Net realized gain on investments and
foreign currency transactions ............ 647,312 1,476,151
Net realized gain (loss) on futures ........ -- (44,165)
Net change in unrealized appreciation ...... 294,300 527,684
------------ ------------
Net increase in net assets
resulting from operations .............. 1,164,521 2,366,555
------------ ------------
Distributions to shareholders from:
Net investment income .................... -- (406,885)
Net realized gain ........................ --
(1,404,069)
Distributions in excess of
net investment income .................... -- (2,698)
------------ ------------
-- (1,813,652)
------------ ------------
Share transactions - net ................... 5,500,726 (5,109,412)
------------ ------------
Net increase (decrease) in net assets .... 6,665,247 (4,556,509)
Net Assets:
Beginning of period ....................... 19,862,214 24,418,723
------------ ------------
End of period ............................. $ 26,527,461 $ 19,862,214
============ ============
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
The Gabelli ABC Fund
Notes to Financial Statements (Unaudited)
================================================================================
1. Significant Accounting Policies. The objective of The Gabelli ABC Fund (the
"Fund") is to achieve total returns that are attractive to investors in various
market conditions without excessive risk of capital loss. The Fund is a series
of Gabelli Investor Funds, Inc. (the "Corporation"), incorporated in Maryland on
October 30, 1992. The Fund is an open-end, non-diversified management investment
company. 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:
Security Valuation. Portfolio securities listed or traded on the New York or
American Stock Exchanges, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") or traded on foreign exchanges are
valued at the last sale price on that exchange (if there were no sales that day,
the security is valued at the average of the bid and asked prices). All other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest average of their bid and asked prices. When
market quotations are not readily available, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Corporation's Directors. Short-term debt
securities with remaining maturities of 60 days or less are valued at amortized
cost, unless the Directors determine such does not reflect the securities' fair
value, in which case these securities will be valued at their fair value as
determined by the Directors. Options are valued at the last sale price on the
exchange on which they are listed, unless no sales of of such options have taken
place that day, in which case they will be valued at the mean between their
closing bid and asked prices.
Foreign Currency Transactions. The books and records of the Fund are maintained
in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities are
recorded at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
recorded at the exchange rate prevailing on the respective date of such
transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Security Transactions and Investment Income. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates), with
realized gain or loss on investments determined by using specific identification
as the cost method. Interest income (including amortization of premium and
discount) is recorded as earned. Dividend income and dividend and capital gain
distributions to shareholders are recorded on the ex-dividend date.
Federal Income Taxes. The Fund intends to continue to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986 and
distribute all of its taxable income to its shareholders. Therefore, no Federal
income tax provision is required.
11
<PAGE>
The Gabelli ABC Fund
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
2. Capital Stock Transactions. The Articles of Incorporation, dated October 30,
1992, permit the Fund to issue 200,000,000 shares (par value $0.001).
Transactions in shares of common stock were as follows:
Six Months Ended Year Ended
June 30, 1996 December 31, 1995
----------------------- -----------------------
Shares Amount Shares Amount
-------- ----------- -------- -----------
Shares sold ............... 847,219 $ 8,321,680 276,536 $ 2,700,619
Shares issued upon
reinvestment of dividends -- -- 181,381 1,761,175
Shares redeemed ........... (282,513) (2,820,953) (963,429) (9,571,206)
-------- ----------- -------- -----------
Net increase (decrease) .. 564,706 $ 5,500,727 (505,512) $(5,109,412)
======== =========== ======== ===========
3. Purchases and Sales of Securities. Purchases and sales of securities for the
six months ended June 30, 1996, other than U.S. government obligations and
short-term securities, aggregated $13,775,081 and $17,267,193, respectively.
Futures Contracts. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Such investments will only be made
if they are, in the opinion of management, economically appropriate to the
reduction of risks involved in the management of the Fund. Upon entering into a
futures contract, the Fund is required to deposit with the broker an amount of
cash or cash equivalents equal to a certain percentage of the contract amount.
This is known as the "initial margin". Subsequent payments ("variation margin")
are made or received by the Fund each day, depending on the daily fluctuation of
the value of the contract. The daily changes in the contract's value are
recorded as unrealized gains or losses. The Fund recognizes a realized gain or
loss when the contract is closed. The net unrealized appreciation/depreciation
is shown in the financial statements. During the six months ended June 30, 1996,
the Fund did not engage in any futures contracts.
Short Selling. The Fund is authorized to engage in short-selling, which
obligates the Fund to replace the security borrowed by purchasing the security
at current market value. The Fund would incur a loss if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. The Fund would realize a gain if the price
of the security declines between those dates. Until the Fund replaces the
borrowed security, the Fund will maintain daily, a segregated account with cash
and/or U.S. Government securities sufficient to cover its short position.
Repurchase Agreements. The Fund may enter into repurchase agreements with
government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with other brokers or dealers that
meet the credit guidelines established by the Directors. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer,
of the collateral to the account of the custodian. To the extent that any
repurchase transaction exceeds one
12
<PAGE>
The Gabelli ABC Fund
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
business day, the value of the collateral is marked-to-market on a daily basis
to maintain the adequacy of the collateral. If the seller defaults and the value
of the collateral declines, or if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of the collateral by the Fund
may be delayed or limited.
4. Investment Advisory Contract. The Fund employs Gabelli Funds, Inc., (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management, and to pay the compensation of all officers and
Directors of the Fund who are its affiliates. As compensation for the services
rendered and related expenses borne by the Advisor, the Fund pays the Advisor a
fee, computed and accrued daily and payable monthly, equal to 1.00% per annum of
the Fund's average daily net assets. The Advisor is obligated to reimburse the
Fund in the event the Fund's expenses exceed the most restrictive expense ratio
limitation imposed by any state, currently believed to be 2.5% of the first $30
million of the Fund's average daily net assets (excluding taxes, interest,
distribution expenses and extraordinary items). No such reimbursement was
required during the six months ended June 30, 1996.
5. Organization Expenses. The organization expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months. The Advisor has
agreed that in the event that any of the initial 10,000 shares it owns are
redeemed during the period of amortization of the Fund's organization and
start-up expenses, the redemption proceeds will be reduced by any such
unamortized organization expenses in the same proportion as the number of
initial shares redeemed to the number of initial shares outstanding at the time
of redemption.
6. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") under Section 12(b) if the Investment Company Act of 1940 and
Rule 12b-1 thereunder. For the six months ended June 30, 1996, the Fund has
incurred distribution costs of $31,912, or 0.25% of average net assets the
annual limitation under the Plan. The Board of Directors has approved that
Distribution costs incurred by Gabelli & Company, Inc., totaling $244,576, which
are in excess of the 0.25% limitation may be recovered from the Fund in future
periods, subject to such limitation.
7. Transactions with Affiliates. The Fund paid brokerage commissions during the
six months ended June 30, 1996 of $2,235 to Gabelli & Company, Inc. and its
affiliates. For the same period, Gabelli & Company, Inc. has informed the Fund
that it received $1,643 from investors in commissions (sales charges and
underwriting fees) on sales of Fund shares.
13
<PAGE>
The Gabelli ABC Fund
Financial Highlights (Unaudited)
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
May 14, 1993
(Commencement
of Operations)
Six Months through
Ended Year Ended December 31, December 31,
June 30, 1996 1995 1994 1993
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operating Performance:
Net asset value, beginning of period .................. $ 9.71 $ 9.57 $ 10.03 $ 10.00
------------ ------------ ------------ ------------
Net investment income ................................. 0.09 0.21 0.33 0.29
Net realized and unrealized gain on investments ....... 0.36 0.86 0.12 0.62
------------ ------------ ------------ ------------
Total from investment operations ...................... 0.45 1.07 0.45 0.91
------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income .................. -- (0.21) (0.33) (0.29)
Distributions from net realized gain on investments ... -- (0.72) (0.58) (0.59)
------------ ------------ ------------ ------------
Total distributions ................................... -- (0.93) (0.91) (0.88)
------------ ------------ ------------ ------------
Net Asset Value, End of Period ........................ $ 10.16 $ 9.71 $ 9.57 $ 10.03
============ ============ ============ ============
Total Return (not reflecting sales load) (a) .......... 4.63% 11.18% 4.49% 9.10%
Ratios to average net assets/supplemental data:
Net assets, end of Period (in thousands) .............. $ 26,527 $ 19,862 $ 24,419 $ 8,847
Ratio of operating expenses to average net assets+ .... 2.20%(b) 2.10% 2.09% 2.75%(b)
Ratio of net investment income to average net assets+ . 1.74%(b) 1.83% 2.95% 2.96%(b)
Portfolio Turnover Rate ............................... 141% 508% 490% 232%
Average commission rate ............................... $ 0.0450 -- -- --
</TABLE>
- ----------
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(b) Annualized.
+ Net of expenses assumed by the Advisor equivalent to 0.00%, 0.00%, 0.14% and
0.82%, respectively.
14
<PAGE>
Gabelli Family of Funds
Distributed by Gabelli & Company, Inc.
One Corporate Center, Rye, NY 10580-1435
Gabelli Asset Fund -------------------------------------------------------------
Invests in a diversified portfolio of companies selling below their private
market value. The Fund's primary objective is to seek growth of capital.
(No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Growth Fund ------------------------------------------------------------
Invests in a diversified portfolio of common stocks that have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is to
seek capital appreciation by employing an earnings-driven investment approach.
(No-load)
Portfolio Manager: Howard F. Ward, CFA
Gabelli Value Fund -------------------------------------------------------------
Invests in a concentrated portfolio of securities of companies which are selling
below their private market value. The Fund's primary objective is long-term
capital appreciation. $250 initial minimum for IRAs.
Portfolio Manager: Mario J. Gabelli, CFA
Max. Sales charge: 5 1/2%
Gabelli Small Cap Growth Fund --------------------------------------------------
Invests primarily in equity securities of smaller companies (companies with a
total market capitalization of less than $500 million) which are believed likely
to have rapid growth in revenues and earnings. The Fund's primary objective is
to seek capital appreciation. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Equity Income Fund -----------------------------------------------------
Invests primarily in a portfolio of income producing equity securities. Pays
quarterly dividends. The Fund's primary objective is to seek a high level of
total return. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli/Westwood Funds ---------------------------------------------------------
Three investment portfolios, designed to pursue a variety of investment
objectives: Equity Fund seeks capital appreciation, Balanced Fund seeks income
and growth, and Intermediate Bond Fund seeks current income. (No-load)
Portfolio Manager: Susan Byrne
Gabelli Global Series ----------------------------------------------------------
Gabelli Global Telecommunications Fund
Invests in telecommunications companies throughout the world. Targets
undervalued companies with strong earnings per share and cash flow dynamics.
The Fund's primary objective is to seek capital appreciation.(No-load)
Team Manager: Mario J. Gabelli, CFA
Gabelli Global Convertible Securities Fund
Invests principally in bonds and preferred stocks which are convertible into
common stock of foreign and domestic companies. The Fund's primary objective
is to seek a high level of total return through a combination of current
income and capital appreciation. (No-load)
Portfolio Manager: Hart Woodson
Gabelli Global Interactive Couch Potato(R) Fund
Invests in companies involved in communications, creativity and copyright
throughout the world. The Fund will also invest in companies participating in
emerging technological advances in interactive services and products. The
Fund's primary objective is to seek capital appreciation. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Gold Fund --------------------------------------------------------------
Invests in a global portfolio of equity securities of gold mining and related
companies. The Fund's primary objective is to seek capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of worldwide economic, financial and political factors. (No-load)
Portfolio Manager: Caesar Bryan
Gabelli International Growth Fund ----------------------------------------------
Invests in a diversified portfolio of equity securities of companies outside of
the U.S. Seeks to achieve international diversification and capital
appreciation, and to serve as a complement to a domestic investment portfolio.
(No-load)
Portfolio Manager: Caesar Bryan
The five funds above invest in foreign securities which involves risks not
ordinarily associated with investments in domestic issues, including currency
fluctuation, economic and political risks.
Gabelli U.S. Treasury Money Market Fund ----------------------------------------
Invests exclusively in short-term U.S. Treasury securities. The Fund's primary
objective is to provide high current income consistent with the preservation of
principal and liquidity. Features low expenses, free checkwriting, telephone
exchange and redemption privileges.
Portfolio Manager: Ronald Eaker
To request a prospectus, call 1-800-GABELLI (1-800-422-3554)
Or, visit our Internet homepage at: http://www.gabelli.com
The prospectus(es) contain more complete information, including fees and
expenses, and should be read carefully prior to investing.
<PAGE>
The Gabelli ABC Fund
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
e-mail: [email protected]
http://www.gabelli.com
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
Board of Directors
Mario J. Gabelli, CFA Karl Otto Pohl
Chairman and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Funds, Inc.
Werner J. Roeder, MD
Anthony J. Colavita Director of Surgery
Attorney-at-Law Lawrence Hospital
Anthony J. Colavita, P.C.
Vincent D. Enright
Senior Vice President
and Chief Financial Officer
The Brooklyn Union Gas
Company
Officers
Mario J. Gabelli, CFA Bruce N. Alpert
President and Vice President
Chief Investment Officer and Treasurer
James E. McKee
Secretary
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli ABC Fund. It is not authorized for distribution to prospective investors
unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
