GABELLI CAPITAL SERIES FUNDS, INC.
Gabelli Capital Asset Fund
Supplement dated October 31, 1995 to
Prospectus dated May 1, 1995
The table of "Financial Highlights" below supplements information contained
in the Prospectus, dated May 1, 1995, and sets forth certain financial
information regarding the operations of Gabelli Capital Asset Fund for the
period from May 1, 1995 (commencement of operations) to June 30, 1995.
FINANCIAL HIGHLIGHTS
Per share amounts for a Fund share outstanding throughout the period.
Period Ended
6/30/95*
(Unaudited)
-----------
Operating performance:
Net asset value, beginning of period $ 10.00
-------
Net investment income (a) 0.02
Net realized and unrealized gain on investments 0.18
-------
Total from investment operations 0.20
Net asset value, end of period $ 10.20
=======
Total return** 2.0%
=======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $6,925
Ratio of net investment income to average
net assets 3.00%+
Ratio of operating expenses to average
net assets (b) 1.14%+
Portfolio turnover rate 0.0%
- --------------------------------------------------------------------------------
* The Fund commenced operations on May 1, 1995.
** 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. Total return for the period less than one year is not annualized.
+ Annualized.
(a) Net investment loss before expenses assumed by Manager for the period ended
June 30, 1995 was $(0.02). (b) Operating expense ratio before expenses
assumed by Manager for the period ended June 30, 1995 was 4.89%.
(b) Operating expense ratio before expenses assumed by Manager for the period
ended June 30, 1995 was 4.89%.
See notes to financial statements.
<PAGE>
GABELLI CAPITAL SERIES FUNDS, INC.
Gabelli Capital Asset Fund
Supplement dated October 31, 1995 to
Statement of Additional Information dated May 1, 1995
The following unaudited financial statements supplement the Statement of
Additional Information, dated May 1, 1995.
Gabelli Capital Asset Fund
SCHEDULE OF INVESTMENTS
June 30, 1995 (Unaudited)
COMMON STOCKS -- 46.2%
SHARES VALUE
------ -----
Aerospace -- 0.9%
1,000 Boeing Co. $ 62,625
--------
Automotive: Parts and Accessories -- 0.6%
2,000 GenCorp Inc. 21,500
1,000 Wynn's International, Inc. 23,250
--------
44,750
--------
Aviation: Parts and Services -- 1.7%
800 Curtiss-Wright Corporation 35,700
6,000 Hi-Shear Industries Inc. 44,250
1,000 Precision Castparts Corporation 35,125
--------
115,075
--------
Broadcasting -- 6.1%
7,000 Ackerley Communications Inc. 85,750
1,500 BHC Communications, Inc., Class A+ 120,563
1,000 Chris-Craft Industries, Inc. 35,000
2,000 Multi-Market Radio Inc., Class A+ 20,000
500 Outlet Communications, Inc., Class A+ 18,750
2,000 United Television, Inc. 142,000
--------
422,063
--------
Business Services -- 8.2%
2,000 LEGENT Corporation+ 87,500
7,500 Lotus Development Corporation+ 478,125
--------
565,625
--------
Cable -- 2.3%
3,500 Media General, Inc., Class A 106,750
1,000 Multimedia, Inc., New+ 38,750
500 Tele-Communications, Inc., Class A+ 11,719
--------
157,219
--------
See notes to financial statements.
<PAGE>
SHARES VALUE
------ -----
Consumer Products -- 6.5%
5,000 American Brands, Inc. $198,750
2,000 Culbro Corporation+ 66,000
2,500 General Electric Company 140,937
1,000 National Presto Industries Inc. 45,375
--------
451,062
--------
Diversified Industrial -- 1.3%
1,000 Minnesota Mining and
Manufacturing Company 57,250
2,000 Thomas Industries Inc. 32,750
--------
90,000
--------
Electric Equipment -- 1.6%
2,500 Honeywell Inc. 107,813
--------
Entertainment -- 2.5%
3,000 Time Warner Inc. 123,375
1,000 Viacom Inc., Class A+ 46,500
--------
169,875
--------
Food and Beverage -- 3.2%
6,400 Bruno's, Inc. 74,400
2,000 Seagram Company Ltd. 69,250
500 Tootsie Roll Industries, Inc. 34,625
1,000 Wrigley, (Wm.) Jr. Company 46,375
--------
224,650
--------
Health Care -- 1.1%
1,500 Genentech Inc.+ 72,937
--------
Hotels/Casinos -- 2.0%
2,000 Hilton Hotels Corporation 140,500
--------
Industrial Equipment and Supplies -- 2.2%
3,000 AMETEK, Inc. 54,000
2,000 Crane Co. 72,500
1,000 Sequa Corporation, Class A+ 29,250
--------
155,750
--------
Oil and Gas Equipment/Services -- 0.3%
2,600 RPC Inc.+ 23,563
--------
Publishing -- 2.9%
4,500 Pulitzer Publishing 191,812
1,000 Western Publishing Group, Inc.+ 11,250
--------
203,062
--------
See notes to financial statements.
<PAGE>
SHARES VALUE
------ -----
Wireless Communications -- 2.8%
1,500 Cellular Communications, Inc.,
Class A+ $ 68,250
1,000 LIN Broadcasting Corporation 126,500
----------
194,750
----------
TOTAL COMMON STOCKS
(Cost $3,145,658) 3,201,319
----------
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PREFERRED STOCK -- 0.5%
Industrial Equipment and Supplies -- 0.5%
500 Sequa Corporation, $5.00 Conv. Pfd. 33,500
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TOTAL PREFERRED STOCK
(Cost $32,400) 33,500
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U.S. TREASURY BILLS -- 46.9%
PRINCIPAL AMOUNT VALUE
- ---------------- -----
$3,260,000 5.000% to 5.420%++
due 07/06/1995-08/24/1995 3,245,058
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TOTAL U.S. TREASURY BILLS
(Cost $3,245,058) 3,245,058
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TOTAL INVESTMENTS -- 93.6%
(Cost $6,423,116) (a) 6,479,877
----------
========================================================================
OTHER ASSETS AND
LIABILITIES (Net)-- 6.4% 445,152
----------
- -========================================================================
NET ASSETS-- 100.0% $6,925,029
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========================================================================
(a) Aggregate cost for Federal tax purposes was $6,423,116. Net unrealized
appreciation for Federal tax purposes was $56,761 (gross unrealized
appreciation was $83,060 and gross unrealized depreciation was $26,299).
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See notes to financial statements.
<PAGE>
Gabelli Capital Asset Fund
STATEMENT OF ASSETS
AND LIABILITIES
June 30, 1995 (Unaudited)
ASSETS
Investments, at value
(Cost $6,423,116) $6,479,877
Cash 391,270
Receivable for Fund shares sold 456,355
Unamortized organization cost 96,667
Receivable from Manager 14,377
Dividends receivable 1,637
----------
TOTAL ASSETS 7,440,183
----------
LIABILITIES
Payable for investments purchased 400,452
Organization costs payable 100,000
Management fee payable 3,102
Accrued Directors' fees 2,600
Accrued expenses and other payables 9,000
----------
TOTAL LIABILITIES 515,154
----------
Net assets applicable to 678,644 shares of
common stock outstanding $6,925,029
==========
========================================================================
NET ASSETS consist of:
Shares of common stock at par value $ 679
Additional paid-in capital 6,856,338
Accumulated net realized loss on investments (285)
Undistributed net investment income 11,536
Net unrealized appreciation of investments 56,761
----------
TOTAL NET ASSETS $6,925,029
==========
========================================================================
Net Asset Value, offering and redemption
price per share ($6,925,029 4 678,644
shares outstanding; 500,000,000 shares
authorized of $0.001 par value) $ 10.20
==========
========================================================================
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
For the Period Ended June 30, 1995 (Unaudited)*
Investment Income:
Interest income $ 14,298
Dividend income 1,638
--------
Total Investment Income 15,936
--------
Expenses:
Management fee 3,844
Amortization of organization costs 3,333
Legal and audit fees 3,200
Directors' fees 2,600
Registration and filing fees 2,500
Transfer agent fees 1,800
Custodian fees 1,500
Expenses assumed by manager (14,377)
--------
Total Expenses 4,400
--------
Net Investment Income 11,536
--------
Net Realized and Unrealized Gain/(Loss) on Investments:
Net realized loss on investments sold (285)
Net unrealized appreciation of investments
during the period 56,761
--------
Net realized and unrealized gain
on investments 56,476
--------
Net increase in net assets resulting from
operations $ 68,012
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* The Fund commenced operations on May 1, 1995.
See notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Period Ended 6/30/95*
(Unaudited)
---------------------
Net investment income $ 11,536
Net realized loss on investments (285)
Net unrealized appreciation of investment 56,761
-----------
Net increase in net assets resulting
from operations 68,012
Net increase in net assets from Fund
share transactions 6,757,017
-----------
Net increase in Net Assets 6,825,029
NET ASSETS:
Beginning of period 100,000
-----------
End of period
(including undistributed net
investment income of $11,536) $ 6,925,029
===========
========================================================================
* The Fund commenced operations on May 1, 1995.
<PAGE>
Gabelli Capital Asset Fund
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 (Unaudited)
1. Significant Accounting Policies
Gabelli Capital Asset Fund (the "Fund"), a series of The Gabelli Capital
Series Funds, Inc., (the "Company"), was organized on April 8, 1993 as a
Maryland corporation. The Fund is a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). Shares of the Fund are available to the public only through the
purchase of certain variable annuity and variable life insurance contracts
issued by The Guardian Insurance & Annuity Company, Inc. The Fund commenced
operations on May 1, 1995. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
Security Valuation.
Portfolio securities which are traded only on a nationally recognized
securities exchange or in the over-the-counter market, which are National Market
System Securities, are valued at the last sale price as of the close of business
on the day the securities are being valued or, lacking any sales, at the mean
between closing bid and asked prices. Portfolio securities which are traded both
in the over-the-counter market and on a stock exchange are valued according to
the broadest and most representative market, as determined by Gabelli Funds,
Inc. (the "Adviser"). Securities and assets for which market quotations are not
readily available are valued at fair value, as determined in good faith by or
under the direction of the Board of Directors of the Company. Short-term
investments that mature in more than 60 days are valued at the highest bid price
obtained from a dealer maintaining an active market in that security. Short-term
investments that mature in 60 days or less are valued at amortized cost, unless
the Board of Directors determines that such valuation does not constitute fair
value.
Securities Transactions and Investment Income.
Securities transactions are accounted for on the trade date with realized
gain or loss on investments determined using specific identification as the cost
method. Interest income (including amortization of premium and discount) is
recorded as earned.
Dividends and Distributions to Shareholders.
Dividend income and dividends and distributions to shareholders are
recorded on the ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles.
Provision for Income Taxes.
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended. As a result, a
Federal income tax provision is not required.
Deferred Organization Expenses.
A total of $100,000 was incurred in connection with the organization of the
Fund. These costs were deferred and are being amortized on a straight-line basis
over a period of 60 months from the date the Fund commenced investment
operations.
2. Agreements with Affiliated Parties
Pursuant to a management agreement (the "Management Agreement"), Guardian
<PAGE>
Investor Services Corporation (the "Manager") serves as the Fund's Manager. The
Management Agreement provides that the Fund will pay the Manager a fee, computed
daily and paid monthly, at the annual rate of 1.00 percent of the value of the
Fund's average daily net assets. Pursuant to an Investment Advisory Agreement
among the Fund, the Manager and the Adviser, the Adviser, under the supervision
of the Company's Board of Directors and the Manager, manages the Fund's assets
in accordance with the Fund's investment objectives and policies, makes
investment decisions for the Fund, places purchase and sale orders on behalf of
the Fund, provides investment research and provides facilities and personnel
required for the Fund's administrative needs. The Adviser may delegate its
administrative role and currently has done so to the Sub-Administrator. The
Adviser will supervise the performance of administrative and professional
services provided by others and pays the compensation of the Sub-Administrator
and all officers and directors of the Fund who are its affiliates. As
compensation for its services and the related expenses borne by the Adviser, the
Manager pays the Adviser a fee, computed daily and paid monthly, at the annual
rate of 0.75 percent of the value of the Fund's average daily net assets. The
Manager has agreed to assume certain expenses of the Fund if such expenses
exceed a certain annual expense limitation. For the period ended June 30, 1995,
such expenses totaled $14,377.
3. Portfolio Securities
Cost of purchases of investment securities, excluding short-term
investments, aggregated $3,178,058 for the period ended June 30, 1995. For the
same period ended June 30, 1995, there were no sales of long-term investment
securities.
4. Transactions with Affiliates
During the period ended June 30, 1995, the Fund paid brokerage commissions
of $275 to Gabelli & Company, Inc. and its affiliates.
5. Shares of Common Stock
Common stock transactions were as follows:
Period Ended 6/30/95*
Shares Amount
Sold 672,163 $ 6,792,327
Redeemed (3,519) (35,310)
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Net increase 668,644 $ 6,757,017
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* The Fund commenced operations on May 1, 1995.
