THE GABELLI ABC FUND
FIRST QUARTER REPORT
MARCH 31, 2000
"GIVE A MAN A FISH AND YOU FEED HIM FOR A DAY.
TEACH HIM HOW TO ARBITRAGE AND YOU FEED HIM FOREVER."
- Warren Buffett
[Graphic omitted of book cover "Deals...Deals...and More Deals]
TO OUR SHAREHOLDERS,
In the first quarter of 2000, we continued to experience a "have and have
not" stock market. Until the last week of the quarter, when we saw a rotation
out of the technology sector and into value sectors, so called "new economy"
stocks flourished, while "old economy" stocks languished or retreated. Despite
the late sell-off, the technology-heavy Nasdaq Composite Index and the small cap
growth-oriented Russell 2000 Index finished with solid gains. However, the
Standard & Poor's 500 Index closed the quarter only modestly higher, while the
Dow Jones Industrial Average declined.
INVESTMENT PERFORMANCE
For the first quarter ended March 31, 2000, the Gabelli ABC Fund's (the
"Fund") total return was 2.44%. The Lipper U.S. Treasury Money Market Average
had a total return of 1.22% over the same period. The Lipper Average reflects
the average performance of mutual funds classified in this particular category.
The Fund was up 10.96% over the trailing twelve-month period. The Lipper U.S.
Treasury Money Market Average rose 4.73% over the same twelve-month period.
For the five-year period ended March 31, 2000, the Fund's total return
averaged 10.05% annually versus an average annual return of 4.80% for the Lipper
U.S. Treasury Money Market Average. Since inception on May 14, 1993 through
March 31, 2000, the Fund had a cumulative total return of 91.24%, which equates
to an average annual total return of 9.87%.
<PAGE>
INVESTMENT RESULTS (a)
- --------------------------------------------------------------------------------
Quarter
----------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
2000: Net Asset Value $9.67 -- -- -- --
Total Return 2.4% -- -- -- --
- --------------------------------------------------------------------------------
1999: Net Asset Value $9.65 $10.20 $10.21 $9.44 $9.44
Total Return 0.6% 5.7% 0.1% 2.4% 9.0%
- --------------------------------------------------------------------------------
1998: Net Asset Value $10.64 $10.68 $10.16 $9.59 $9.59
Total Return 4.0% 0.4% (4.9)% 11.9% 11.1%
- --------------------------------------------------------------------------------
1997: Net Asset Value $9.98 $10.45 $10.74 $10.23 $10.23
Total Return 1.4% 4.7% 2.8% 3.3% 12.8%
- --------------------------------------------------------------------------------
1996: Net Asset Value $10.10 $10.16 $9.77 $9.84 $9.84
Total Return 4.1% 0.6% 0.8% 2.2% 7.8%
- --------------------------------------------------------------------------------
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%
- --------------------------------------------------------------------------------
1993: Net Asset Value -- $10.10 $10.63 $10.03 $10.03
Total Return -- 1.0%(b) 5.2% 2.6% 9.1%(b)
- --------------------------------------------------------------------------------
- --------------------------------------------------------
Average Annual Returns - March 31, 2000 (a)
-------------------------------------------
1 Year .................................... 10.96%
3 Year .................................... 10.05%
Life of Fund (b) .......................... 9.87%
- --------------------------------------------------------
Dividend History
- --------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- -------------------
December 27, 1999 $1.000 $ 9.32
December 28, 1998 $1.763 $ 9.50
December 29, 1997 $0.860 $10.17
December 27, 1996 $0.146 $ 9.83
September 30, 1996 $0.470 $ 9.77
December 28, 1995 $0.930 $ 9.71
December 28, 1994 $0.910 $ 9.52
December 31, 1993 $0.880 $10.03
(a) Total returns and average annual returns reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. Of course, returns represent past performance and do not guarantee future
results. Investment returns and the principal value of an investment will
fluctuate. When shares are redeemed they may be worth more or less than their
original cost. (b) From commencement of investment operations on May 14, 1993.
- --------------------------------------------------------------------------------
[Graphic omitted]
Pyramid text as follows:
EPS
PMV
MANAGEMENT
CASH FLOW
RESEARCH
COMMENTARY
THE PERILS OF PAULINE
In each episode of the old movie serial, "The Perils of Pauline", the
heroine faced certain doom until a hero suddenly appeared to save the day.
Through most of the first quarter of 2000, rising short-term interest rates, as
well as the perception that Federal Reserve Chairman Alan Greenspan was
2
<PAGE>
determined to restrain the stock market as well as the economy, imperiled
equities. With equities dangling from a cliff, a hero in the form of declining
market interest rates (bond yields) rescued stocks from a sharp correction that
appeared ready to turn into a full scale bear market.
Of course, in the old movie shorts, as soon as Pauline escaped from one
life-threatening predicament, she was thrust into another. Over the short term,
we suspect the stock market will also face a series of new dangers. The Federal
Reserve should continue to hike short-term interest rates, eventually killing
the nascent bond market rally and putting pressure back on stocks. Valuations in
the technology sector also present a risk to the market. If some of the
technology "bell weathers" fall short of rather grand earnings expectations, we
could see a sharp correction that would drag down the market indices. There is
also the uncertainty of an election year. Will a Bush victory lead to tax cuts
that will help sustain consumer spending or will a Gore triumph dash the hopes
of consumers and investors counting on tax relief?
There are plenty of potential heroes that could once again rescue the
market. Corporate earnings growth is strong and, with synchronized global
growth, may get stronger. If we see evidence of economic deceleration in the
second half of the year, the Fed may release the monetary brakes and market
interest rates could come down further. We should continue to see deals,
particularly in out-of-favor industries where many great companies have become
irresistible business bargains. Deals may finally prop up the value sector of
the market. Finally, investors love happy endings. Over the last several years,
whenever stocks have stumbled investors have rushed in to lift them to safety.
We are always attuned to the economic and stock market melodrama. However,
we try to keep our ABC Fund shareholders out of harm's way by investing in time
sensitive merger and acquisition deals - risk arbitrage. This may be dull and
periodically not particularly productive. However, over the Fund's history, this
approach has produced steady, low risk, non-market correlated returns.
WHAT IS RISK ARBITRAGE?
Simply stated, risk arbitrage is investing in a merger or acquisition
target after the deal has been announced and pocketing the spread between the
trading price of the target company following the announcement and the deal
price upon closing. This spread is usually relatively narrow, offering a
somewhat modest nominal total return. However, since deals generally close in
much less than a year's time, this modest total return translates into a much
more attractive annualized return.
MERGERS AND ACQUISITIONS
The value of announced mergers and acquisitions in the first quarter of
2000 increased to $1.17 trillion from $835 billion in the first quarter of 1999.
Merger activity continues to surge as companies in industries such as banking,
broadcasting, brokerage, telecommunications, utilities, defense and health care
combine in response to falling regulatory barriers and increased competition.
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<PAGE>
A number of themes continued to surface in the first quarter. Cross border
mergers, minority buy-outs, strategic acquisitions and hostile bids all
highlighted a vibrant arbitrage environment. Arbitrage activity should remain
dynamic during the coming months as strategic mergers and acquisitions continue
to be announced in a variety of industries. We plan to capitalize on those
opportunities that fit our investment philosophy.
WHAT'S NEXT?
So what will happen in the stock market over the next several quarters?
Will robust corporate earnings growth compensate for higher short term interest
rates? Will the bond rally fizzle, halting the stock market's momentum? Will
technology stocks falter, dragging the market lower? Will a rally in the dormant
value sector help buoy the market indices? Will investors remain so confident
that every market dip is viewed as a buying opportunity, or will investors panic
if we see a more prolonged market slide? We do not think anyone has the answers
to all of these questions. We do believe the conservatively constructed ABC Fund
portfolio should make progress in a favorable stock market environment and
provide a safe anchor in any stock market storm.
THIS QUARTER'S SCORECARD
In general, our equity investments performed quite well in the first
quarter of 2000. The small cap stocks in the portfolio led the way, with the
biggest gains coming from small companies such as Shenandoah Telecommunications,
Fisher Scientific, Dynatech and American Tower Systems. Our utility holdings
were mixed, with solid gains for AGL Resources, Citizens Utilities, Florida
Progress and WICOR, and declines for Southwest Gas and Florida Public Utilities.
Industrial cyclicals such as WHX, Federal-Mogul and Fairchild disappointed,
while our arbitrage investments continued to deliver steady returns.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over
time.
CARTER-WALLACE INC. (CAR - $18.75 - NYSE), founded in 1880 as the Carter
Medicine Company marketing a single product called Carter Little Liver Pills,
now manufactures and sells a diversified line of consumer health care products
including toiletries, pharmaceuticals, diagnostic specialties, proprietary drugs
and pet supplies. Such brands as Arrid deodorant, Nair hair remover and Pearl
Drops toothpaste are Carter-Wallace products. The company also sells certain
products exclusively in international markets.
4
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CITIZENS UTILITIES CO. (CZN - $16.375 - NYSE) provides telecommunications
services and public services to approximately 1.9 million customers in 22
states. Citizens owns 83% of Electric Lightwave (ELIX - $23.875 - Nasdaq), a
competitive local exchange carrier ("CLEC") serving primarily the western U.S.
Management has authorized the separation of Citizens' telecommunications
businesses and public services businesses into two stand-alone, publicly traded
companies. Recently, CZN announced agreements to acquire about one million rural
access lines in 11 states for $2.8 billion. CZN intends to finance these
transactions by divesting its public services operations. Its water and waste
water operations have been sold for $835 million. The company has an agreement
to sell all its electric and waste water utility operations to Cap Rock Energy
and Kauai Island Electric Company for an aggregate purchase price of $535
million. The company has sold its 16% stake in Centennial Communications for
approximately $205 million. Citizens monetized its ownership of Century
Communications' (CTYA - $45.625 - Nasdaq) stock and cable operations through a
sale to Adelphia Communications for approximately $220 million.
COLUMBIA ENERGY GROUP (CG - $59.25 - NYSE) ended months of speculation after
finally agreeing to an offer from NiSource Inc. (NI - $16.875 - NYSE). NI will
acquire all of the outstanding shares of CG for a total equity consideration of
$6 billion. NI will also assume about $2.5 billion in CG debt. Under the terms
of the agreement, CG holders will receive $70 in cash plus a $2.60 face value
SAILS (a unit consisting of a zero coupon debt security with a forward equity
contract). Subject to various regulatory approvals, the companies expect to
complete the merger by the end of 2000. The combined entity will have the
largest customer base of any gas company east of the Rocky Mountains.
DUFF & PHELPS CREDIT RATING CO. (DCR - $99.6875 - NYSE) agreed to be bought by
Fitch IBCA (FIM.P - $137.56 - Paris Stock Exchange), the world's third largest
credit rating agency, for $528 million in cash. The deal closed on April 11.
Fitch IBCA is actually a unit of the French holding company Fimalac SA.
Shareholders of DCR were paid $100 per share in cash, a 27% premium to the
stock's pre-deal price. DCR had been an independent company since 1994, when it
was spun off from Phoenix Investment Partners Ltd. Since that time, its shares
rose 550%.
EASTERN ENTERPRISES (EFU - $59.875 - NYSE) owns and operates Boston Gas Company,
Colonial Gas Company, Essex Gas Company, Midland Enterprises, and ServicEdge
Partners. Upon completion of the pending merger with EnergyNorth (EI - $58.25 -
NYSE), Eastern will serve over 800,000 residential, commercial and industrial
natural gas customers in Massachusetts and New Hampshire. Midland Enterprises,
headquartered in Cincinnati, Ohio, is the leading carrier of coal and a major
carrier of other dry bulk cargoes on the nation's inland waterways, with a fleet
of 2,300 barges and 87 towboats. ServicEdge is the largest unregulated provider
of residential heating, ventilation and air conditioning ("HVAC") equipment
installation and service to customers in Massachusetts. In November, Eastern
announced it had entered into an agreement to be acquired by KeySpan Corp. (KSE
- - $27.625 - NYSE) for $64.00 per share in cash.
5
<PAGE>
ESAT TELECOM GROUP PLC (ESAT - $99.875 - NASDAQ), Ireland's second largest phone
company, successfully found a white-knight to fend off the hostile offer it
received from Norwegian phone giant Telenor AS. On January 11, British
Telecommunications plc (BTY - $188.125 - NYSE) agreed to buy Esat for $2.46
billion in cash, valuing Esat at $100 per share. The $100 per share bid trumped
Telenor's $85 per-share hostile offer made in late December. The agreement
between BTY and Esat, which became wholly unconditional on March 30, ends a
sequence of hostile bidding activity that saw Esat trade up from $55 per share.
GENERAL CIGAR HOLDINGS INC. (MPP - $15.125 - NYSE) and Swedish Match AB (SWMA.SS
- - $229.90 - Stockholm Stock Exchange) have agreed to a merger that will result
in ownership of a 64% interest in General Cigar by SWMA. The Cullman family,
which has managed General Cigar since 1961, will sell one third of its General
Cigar holdings to SWMA for $15 a share, but will retain a 36% interest in
General Cigar. In the offer to public shareholders, SWMA will pay $15.25 per
share of MPP. In General Cigar, SWMA will increase its presence in the premium
cigar market through such brands as Macanudo, Partagas, Punch, and Hoyo de
Monterrey. The transaction is expected to close in May.
HANNAFORD BROTHERS CO. (HRD - $73.75 - NYSE) agreed to be acquired by Delhaize
America (DZA - $18.00 - NYSE) for $3.6 billion, expanding DZA's reach into the
Northeastern US. DZA, which recently changed its corporate name from Food Lion
Co., will pay $79 per share in cash and stock. Approximately 85% of the
consideration will be paid in cash and 15% in DZA common stock. DZA wants to
narrow the gap with competitors such as Royal Ahold NV, Albertson's and Kroger,
which have been combining to cut costs and squeeze savings from suppliers as
their competitors expand and low-price retailers such as Wal-Mart and Kmart add
more groceries to their stores. The two companies will need to divest a number
of stores in the Southeast to satisfy antitrust concerns.
KAMAN CORP. (KAMNA - $9.75 - NASDAQ), founded in 1945, is a pioneer in the
helicopter industry. Aircraft manufacturing remains the core of the business.
Kaman serves both commercial and governmental markets with helicopters and
aircraft components. The company also produces specialized, high-value niche
market products and services which tend to be technological leaders in their
markets. Kaman is a major, national distributor of original equipment, repair
and replacement products and value-added services to nearly every sector of
North American industry. The company also manufactures and distributes musical
instruments (Ovation guitars) and accessories to independent retailers.
UNITED WATER RESOURCES INC. (UWR - $34.75 - NYSE) will sell the two-thirds of
the company that Suez Lyonnaise des Eaux SA (LY.P - $171.57 - Paris Stock
Exchange) does not already own to LY for $1.8 billion in cash and assumed debt.
LY offered $35 per share in cash and will assume $800 million in debt and
preferred stock of UWR, the number two U.S. water company. LY also bought Nalco
Chemical Co., the biggest U.S. maker of water-treatment chemicals. LY's
acquisitions in the U.S. water market are part of its effort to keep pace with
its French rival Vivendi, which has also been making advances in the
6
<PAGE>
U.S. water market. UWR provides water and sewer treatment services to 7.5
million people in 19 states. Upon completion of the UWR acquisition, LY will
have worldwide water and wastewater revenues of more than $7.4 billion.
U.S. FOODSERVICE (UFS - $25.75 - NYSE) entered into an agreement to be bought by
Royal Ahold NV (AHLN.NA - $25.97 - Amsterdam Stock Exhange), Europe's
third-largest supermarket company, for $3.6 billion in cash and assumed debt.
AHLN paid $26 per share in cash and assumed about $925 million in debt in the
deal that closed on April 12. AHLN financed the transaction through 50% equity
and 50% debt. The company plans to do an equity or equity-linked security
issuance for about 3 billion euros in the spring of 2000. Because of UFS's
strong management team and leading position as a foodservice company, the
multiple paid was quite rich.
WICOR INC. (WIC - $31.00 - NYSE), the largest gas distributor in Wisconsin, has
agreed to be bought by Wisconsin Energy Corp. (WEC - $19.938 - NYSE), a
Milwaukee electric and natural gas utility, for $1.27 billion in cash and stock.
WIC shareholders will receive $31.50 per share in cash. The merger needs
approval from the Wisconsin Utilities Commission, the SEC and the FTC. Although
WEC had to terminate an agreement to merge three years ago with Northern States
Power because of regulatory concerns in Wisconsin, this deal is not expected to
raise objections because it does not create a dominant presence in the electric
industry. The combined company will have 921,000 gas customers and more than 1
million electric customers in Wisconsin and Michigan. In addition to its gas
distribution business, WICOR obtains about 50% of its revenues from its pumps
business.
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
Additionally, the Fund and other Gabelli Funds are available through the
no-transaction fee programs at many major discount brokerage firms.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Asset Management Inc.,
the Gabelli Mutual Funds, IRAs, 401(k)s, quarterly reports, closing prices and
other current news. You can send us e-mail at [email protected].
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IN CONCLUSION
In the first quarter of the new century and the end of its seventh full
year of operation, the ABC Fund continued to fulfill its mandate to
shareholders. Our portfolio of selective equity investments and arbitrage
holdings produced a respectable return in a very volatile market environment. We
will strive to continue to meet our shared investment objective.
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
business day for further information.
Sincerely,
/S/ Mario J. Gaeblli
MARIO J. GABELLI, CFA
Portfolio Manager and
Chief Investment Officer
April 14, 2000
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
MARCH 31, 2000
--------------
Esat Telecom Group plc United Water Resources Inc.
General Cigar Holdings Inc. WICOR Inc.
U.S. Foodservice Columbia Energy Group
Travelers Property Casualty Corp. Catellus Development Corp.
Duff &Phelps Credit Rating Co. Hannaford Bros. Co.
- --------------------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio
manager, only through the end of the period stated in this report. The
manager's views are subject to change at any time based on market and other
conditions.
8
<PAGE>
THE GABELLI ABC FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS -- 97.0%
AEROSPACE -- 0.3%
100 Cordant Technologies Inc. ..... $ 5,656
2,000 Howmet International Inc.+ .... 40,375
2,000 Northrop Grumman Corp. ........ 105,875
-----------
151,906
-----------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.4%
12,000 Federal-Mogul Corp. ........... 200,250
-----------
AVIATION: PARTS AND SERVICES-- 0.9%
25,000 Aviall Inc.+ .................. 210,937
17,000 Fairchild Corp., Cl. A+ ....... 115,812
7,000 Hi-Shear Industries Inc. ...... 17,500
22,000 Kaman Corp., Cl. A ............ 214,500
-----------
558,749
-----------
BROADCASTING -- 0.2%
3,000 Liberty Corp. ................. 112,500
1,000 Salem Communications Corp., Cl. A+ 11,937
-----------
124,437
-----------
BUILDING AND CONSTRUCTION -- 0.8%
47,000 Robertson-Ceco Corp. .......... 461,187
-----------
BUSINESS SERVICES -- 12.0%
20,000 Cendant Corp.+ ................ 370,000
2,580 Fisher Scientific International Inc.+ 114,810
20,000 National Processing Inc.+ ..... 190,000
2,580 ProcureNet Inc.+ .............. 387
250,000 U.S. Foodservice+ ............. 6,437,500
-----------
7,112,697
-----------
COMMUNICATIONS EQUIPMENT -- 0.1%
5,000 Dynatech Corp.+ ............... 72,188
-----------
COMPUTER SOFTWARE AND SERVICES -- 0.0%
1,938 DecisionOne Holdings Corp.+ ... 233
-----------
CONSUMER PRODUCTS -- 11.9%
12,000 Carter-Wallace Inc. ........... 225,000
435,000 General Cigar Holdings Inc.+ .. 6,579,375
28,442 Syratech Corp.+ ............... 227,536
-----------
7,031,911
-----------
DIVERSIFIED INDUSTRIAL -- 0.3%
6,000 Ampco-Pittsburgh Corp. ........ 65,250
11,000 Katy Industries Inc. .......... 101,063
4,000 WHX Corp.+ .................... 27,500
-----------
193,813
-----------
MARKET
SHARES VALUE
------ ------
ENERGY AND UTILITIES: ELECTRIC -- 1.9%
55,000 El Paso Electric Co.+ ......... $ 570,625
10,000 Florida Progress Corp. ........ 458,750
5,000 St. Joseph Light & Power Co. .. 101,563
-----------
1,130,938
-----------
ENERGY AND UTILITIES: INTEGRATED -- 2.5%
22,000 Florida Public Utilities Co. .. 288,750
25,000 LG&E Energy Corp. ............. 571,875
25,000 MCN Energy Group Inc. ......... 625,000
286 Sierra Pacific Resources ...... 3,575
-----------
1,489,200
-----------
ENERGY AND UTILITIES: NATURAL GAS -- 10.8%
22,000 AGL Resources Inc. ............ 404,250
3,500 Berkshire Energy Resources .... 126,547
20,000 Columbia Energy Group ......... 1,185,000
10,000 Eastern Enterprises ........... 598,750
8,200 EnergyNorth Inc. .............. 478,675
7,000 Piedmont Natural Gas Co. Inc. . 182,438
42,000 Southwest Gas Corp. ........... 800,625
7,000 Valley Resources Inc. ......... 161,000
80,000 WICOR Inc. .................... 2,480,000
-----------
6,417,285
-----------
ENERGY AND UTILITIES: WATER -- 9.3%
15,000 E'Town Corp. .................. 948,750
6,500 SJW Corp. ..................... 760,500
109,400 United Water Resources Inc. ... 3,801,650
-----------
5,510,900
-----------
ENTERTAINMENT -- 0.9%
8,800 Fisher Companies Inc. ......... 550,000
-----------
EQUIPMENT AND SUPPLIES -- 0.4%
8,174 Juno Lighting Inc. ............ 77,653
10,000 UCAR International Inc.+ ...... 131,875
-----------
209,528
-----------
FINANCIAL SERVICES -- 20.5%
1,500 Allstate Corp. ................ 35,719
32,500 Argonaut Group Inc. ........... 652,031
50,000 Duff & Phelps Credit Rating Co. 4,984,375
5,000 Leucadia National Corp. ....... 118,750
562 Markel Corp.+ ................. 81,794
4,000 Pioneer Group Inc.+ ........... 93,000
150,000 Travelers Property Casualty
Corp., Cl. A ................. 6,187,500
-----------
12,153,169
-----------
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THE GABELLI ABC FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE -- 0.4%
30,000 Advantica Restaurant Group Inc.+ $ 45,000
14,000 Whitman Corp. ................. 195,125
-----------
240,125
-----------
HEALTH CARE -- 0.4%
4,500 Life Technologies Inc. ........ 225,000
-----------
HOME FURNISHINGS -- 0.4%
320,000 Carlyle Industries Inc.+ ...... 245,000
8,000 O'Sullivan Industries Holdings Inc.+ 4,640
-----------
249,640
-----------
HOTELS AND GAMING -- 1.6%
2,500 Boca Resorts Inc., Cl. A+ ..... 21,406
100,000 Bristol Hotels & Resorts Inc.+ 950,000
-----------
971,406
-----------
METALS AND MINING -- 0.0%
10,000 Royal Oak Mines Inc.+ ......... 100
-----------
REAL ESTATE -- 2.0%
70,000 Catellus Development Corp.+ ... 971,250
20,000 Griffin Land & Nurseries Inc.+ 220,000
3,169 HomeFed Corp.+ ................ 2,028
-----------
1,193,278
-----------
RETAIL -- 1.8%
120,000 Bruno's Inc.+ ................. 120
13,000 Hannaford Bros. Co. ........... 958,750
8,000 Lillian Vernon Corp. .......... 76,000
-----------
1,034,870
-----------
SATELLITE -- 0.4%
10,000 COMSAT Corp. .................. 206,250
-----------
SPECIALTY CHEMICALS -- 0.5%
9,500 Bush Boake Allen Inc.+ ........ 264,219
-----------
TELECOMMUNICATIONS -- 16.2%
15,000 Citizens Utilities Co., Cl. B+ 245,625
90,000 Esat Telecom Group plc, ADR+ .. 8,988,750
9,500 Shenandoah Telecommunications Co. 383,563
3,000 Telegroup Inc.+ ............... 150
-----------
9,618,088
-----------
WIRELESS COMMUNICATIONS -- 0.1%
1,000 American Tower Corp., Cl. A+ .. 49,375
-----------
TOTAL COMMON STOCKS ........... 57,420,742
-----------
MARKET
SHARES VALUE
------ ------
PREFERRED STOCKS -- 1.1%
DIVERSIFIED INDUSTRIAL -- 0.8%
11,500 WHX Corp.,
6.50% Cv. Pfd., Ser. A ....... $ 310,500
6,500 WHX Corp.,
3.75% Cv. Pfd., Ser. B ....... 149,500
-----------
460,000
-----------
TELECOMMUNICATIONS -- 0.3%
3,000 Citizens Utilities Co.,
5.00% Cv. Pfd. ............... 187,500
-----------
TOTAL PREFERRED STOCKS 647,500
-----------
PRINCIPAL
AMOUNT
---------
CORPORATE BONDS -- 0.2%
HOTELS AND GAMING -- 0.1%
$100,000 Hilton Hotels Corp.,
Sub. Deb. Cv.
5.00%, 05/15/06 .............. 75,750
-----------
RETAIL -- 0.0%
200,000 RDM Sports Group Inc., Cv.
8.00%, 08/15/03 .............. 21,250
-----------
TRANSPORTATION -- 0.1%
850,000 Builders Transport Inc., Cv.
6.50%, 05/01/11 .............. 85
140,000 WorldCorp. Inc.,
Sub. Deb. Cv.
7.00%, 05/15/04 .............. 44,800
-----------
44,885
-----------
TOTAL CORPORATE BONDS ......... 141,885
-----------
SHARES
------
RIGHTS -- 0.0%
FINANCIAL SERVICES -- 0.0%
562 Markel Corp. Rights+ .......... 3,373
-----------
TOTAL INVESTMENTS -- 98.3%
(Cost $59,869,344) .......... 58,213,500
OTHER ASSETS AND
LIABILITIES (NET) -- 1.7% ... 1,014,488
-----------
NET ASSETS -- 100.0%
(6,123,751 shares outstanding) $59,227,988
===========
------------------------
+ Non-income producing security.
ADR - American Depositary Receipt.
10
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GABELLI FAMILY OF FUNDS
- --------------------------------------------------------------------------------
GABELLI ASSET FUND--------------------------------------------------------------
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI GROWTH FUND-------------------------------------------------------------
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: HOWARD F. WARD, CFA
GABELLI WESTWOOD EQUITY FUND----------------------------------------------------
Seeks to invest primarily in the common stock of seasoned companies believed to
have proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: SUSAN M. BYRNE
GABELLI SMALL CAP GROWTH FUND---------------------------------------------------
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $500 million) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI BLUE CHIP VALUE FUND----------------------------------------------------
Seeks long-term growth of capital through investment primarily in the common
stocks of well-established, high quality companies that have market
capitalizations of greater than $5 billion. (NO-LOAD)
PORTFOLIO MANAGER: BARBARA MARCIN, CFA
GABELLI WESTWOOD SMALLCAP EQUITY FUND-------------------------------------------
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $1 billion or less. The Fund's primary objective is long-term capital
appreciation. (NO-LOAD)
PORTFOLIO MANAGER: LYNDA CALKIN, CFA
GABELLI WESTWOOD INTERMEDIATE BOND FUND-----------------------------------------
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return. (NO-LOAD)
PORTFOLIO MANAGER: PATRICIA FRAZE
GABELLI EQUITY INCOME FUND------------------------------------------------------
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays quarterly dividends and seeks a high level of total return with an
emphasis on income. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI WESTWOOD BALANCED FUND--------------------------------------------------
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(NO-LOAD)
PORTFOLIO MANAGERS: SUSAN M. BYRNE & PATRICIA FRAZE
GABELLI WESTWOOD MIGHTY MITES[SERVICE MARK] FUND--------------------------------
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(NO-LOAD)
TEAM MANAGED: MARIO J. GABELLI, CFA,
MARC J. GABELLI, LAURA K. LINEHAN AND
WALTER K. WALSH
GABELLI VALUE FUND--------------------------------------------------------------
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. MAX. SALES CHARGE:
5 1/2%
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI UTILITIES FUND----------------------------------------------------------
Seeks to provide a high level of total return through a combination of capital
appreciation and current income. (NO-LOAD)
PORTFOLIO MANAGER: TIMOTHY O'BRIEN, CFA
GABELLI ABC FUND----------------------------------------------------------------
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI MATHERS FUND------------------------------------------------------------
Seeks long-term capital appreciation in various market conditions without
excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: HENRY VAN DER EB, CFA
GABELLI U.S. TREASURY MONEY MARKET FUND-----------------------------------------
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI
GABELLI CASH MANAGEMENT SHARES OF
THE TREASURER'S FUND------------------------------------------------------------
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market seeks to invest in
U.S. Treasury bills, notes and bonds. Tax Exempt Money Market seeks to invest in
municipal securities. Domestic Prime Money Market seeks to invest in prime
quality, domestic money market instruments. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI
AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS.
GLOBAL SERIES
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world -
targeting undervalued companies with strong earnings and cash flow dynamics.
The Fund's primary objective is capital appreciation. (NO-LOAD)
TEAM MANAGED: MARIO J. GABELLI, CFA,
MARC J. GABELLI AND IVAN ARTEAGA, CFA
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic companies. The Fund's
primary objective is total return through a combination of current income and
capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: HART WOODSON
GABELLI GLOBAL GROWTH FUND
Seeks capital appreciation through a disciplined investment program focusing
on the globalization and interactivity of the world's marketplace. The Fund
invests in companies at the forefront of accelerated growth. The Fund's
primary objective is capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: MARC J. GABELLI
GABELLI GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in
revenues and earnings and potential for above average capital appreciation or
are undervalued. The Fund's primary objective is capital appreciation.
(NO-LOAD)
PORTFOLIO MANAGERS: MARC J. GABELLI
AND CAESAR BRYAN
GABELLI GOLD FUND---------------------------------------------------------------
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial and political factors. (NO-LOAD)
PORTFOLIO MANAGER: CAESAR BRYAN
GABELLI INTERNATIONAL GROWTH FUND-----------------------------------------------
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (NO-LOAD)
PORTFOLIO MANAGER: CAESAR BRYAN
THE SIX FUNDS ABOVE INVEST IN FOREIGN SECURITIES WHICH INVOLVES RISKS NOT
ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY
FLUCTUATION, ECONOMIC AND POLITICAL RISKS. THE FUNDS LISTED ABOVE ARE
DISTRIBUTED BY GABELLI & COMPANY, INC.
- --------------------------------------------------------------------------------
TO RECEIVE A PROSPECTUS, CALL 1-800-GABELLI (422-3554). THE
PROSPECTUS GIVES A MORE COMPLETE DESCRIPTION OF THE FUND,
INCLUDING FEES AND EXPENSES. READ THE PROSPECTUS CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
VISIT OUR WEBSITE AT:
WWW.GABELLI.COM
OR, CALL:
1-800-GABELLI
1-800-422-3554 [BULLET] 914-921-5100 [BULLET]
FAX: 914-921-5118 [BULLET] [email protected]
ONE CORPORATE CENTER, RYE, NEW YORK 10580
<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 ASSET MANAGEMENT INC.
Anthony J. Colavita Werner J. Roeder, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
KEYSPAN ENERGY CORP.
OFFICERS
Mario J. Gabelli, CFA Bruce N. Alpert
PRESIDENT AND CHIEF VICE PRESIDENT
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 LLP
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
GAB408Q100SR
[Photo of Mario J. Gabelli omitted]
THE
GABELLI
ABC
FUND
[Graphic of ABC blocks omitted]
FIRST QUARTER REPORT
MARCH 31, 2000
