As filed with the Securities and Exchange Commission on May 1, 1995.
Securities Act File No. 33-66262
Investment Company Act File No. 811-7896
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Post-Effective Amendment No. 5 [x]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 6 [x]
(Check appropriate box or boxes)
-------------------------
GABELLI GLOBAL SERIES FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
One Corporate Center, Rye, New York 10580-1434
(Address of Principal Executive Office)
Registrant's Telephone Number (800) 422-3554
Bruce N. Alpert
Gabelli Funds, Inc.
One Corporate Center, Rye, New York 10580-1434
(Name and Address of Agent for Service)
-------------------------
Copies to:
J. Hamilton Crawford, Jr., Esq. Richard T. Prins, Esq.
Gabelli Funds, Inc. Skadden, Arps, Slate, Meagher & Flom
One Corporate Center 919 Third Avenue
Rye, New York 10580-1434 New York, New York 10022
(212) 735-2000
-------------------------
It is proposed that this filing will become effective (check appropriate box):
[x] immediately upon filing pursuant to paragraph (b)
[ ] on May 1, 1995 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
-------------------------
Pursuant to Rule 24f-2(a)(1) under the Investment Company Act of 1940,
Registrant has previously filed a declaration of registration of an indefinite
number of securities under the Securities Act of 1933. Registrant's 24f-2 Notice
for the fiscal year ended December 31, 1994 was filed on February 28, 1995.
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<PAGE>
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GABELLI GLOBAL SERIES FUNDS, INC.
CROSS REFERENCE SHEET
(as required by Rule 481(a))
<TABLE>
<CAPTION>
N-1A Item No.
Part A Location in Prospectus
------ ----------------------
<S> <C>
Item 1. Cover Page .................................. Cover Page
Item 2. Synopsis..................................... Table of Fees and Expenses for each of the
Funds
Item 3. Condensed Financial Information ............. Financial Highlights
Item 4. General Description of Registrant............ Cover Page; Investment Objective and
Policies Associated Risk Factors;
General Information
Item 5. Management of the Fund....................... Management of the Fund; Investment
Objective and Policies; General Information
Item 5(a) Management's Discussion of Performance....... Not Applicable
Item 6. Capital Stock and Other Securities........... Dividends, Distributions and Taxes; General
Information
Item 7. Purchase of Securities Being Offered......... Purchase of Shares; Distribution Plan
Item 8. Redemption or Repurchase..................... Redemption of Shares
Item 9. Pending Legal Proceedings ................... Not Applicable
<CAPTION>
Location in Statement of
Part B Additional Information
------------------------
<S> <C>
Item 10. Cover Page................................... Cover Page
Item 11. Table of Contents............................ Cover Page
Item 12. General Information and History.............. Not Applicable
Item 13. Investment Objective and Policies............ Investments; Investment Restrictions
Item 14. Management of the Fund....................... The Adviser
Item 15. Control Persons and Principal Holders
of Securities.............................. Directors and Officers
Item 16. Investment Advisory and Other Services....... The Adviser; The Distributor
Item 17. Brokerage Allocation and Other Practices..... Portfolio Transactions and Brokerage
Item 18. Capital Stock and Other Securities........... Prospectus-General Information; Determination
of Net Asset Value
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered................... Prospectus-Purchase of Shares; Redemption
of Shares
Item 20. Tax Status .................................. Dividends, Distributions and Taxes
Item 21. Underwriters................................. Prospectus-Purchase of Shares; The
Distributor
Item 22. Calculation of Performance Data.............. Investment Performance Information
Item 23. Financial Statements......................... Portfolio of Investments; Statement of Assets
and Liabilities; Statement of Operations;
Statement of Changes in Net Assets; Notes to
Financial Statements; Selected Per Share
Data and Ratios
</TABLE>
Part C
- ------
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
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Gabelli
Global
Series
Funds, Inc.
PROSPECTUS
May 1, 1995
The Gabelli Global
Telecommunications Fund
* The Gabelli Global
Interactive Couch Potatoe (TM)(C) Fund
* The Gabelli Global
Convertible Securities
Fund
* The Gabelli Global Entertainment
and Media Fund
* The Gabelli Global Growth Fund
GABELLI FUNDS, INC.
Investment Adviser
GABELLI & COMPANY, INC.
Distributor
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Gabelli Global Series Funds, Inc.
One Corporate Center
Rye, New York 10580-1434
Telephone: 1-800-GABELLI (1-800-422-3554)
================================================================================
PROSPECTUS May 1, 1995
Gabelli Global Series Funds, Inc., a Maryland corporation (the "Corporation") is
currently comprised of five series:
<TABLE>
<S> <C>
The Gabelli Global Telecommunications Fund The Gabelli Global Interactive Couch Potato (TM)(C) Fund
(the "Global Telecommunications Fund") (the "Global Interactive Couch Potato (TM)(C)Fund")
The Gabelli Global Entertainment and Media Fund The Gabelli Global Convertible Securities Fund
(the "Global Entertainment and Media Fund") (the "Global Convertible Securities Fund")
</TABLE>
The Gabelli Global Growth Fund
(the "Global Growth Fund")
(collectively, the "Funds")
Each of the Funds is open-end and non-diversified. Each of the Global
Telecommunications Fund, the Global Entertainment and Media Fund, the Global
Growth Fund and the Global Interactive Couch Potato Fund seeks capital
appreciation as a primary investment objective and current income as a secondary
objective. These Funds will seek to achieve their investment objectives through
investments primarily in the common stocks and other securities of foreign and
domestic companies. The Global Convertible Securities Fund seeks a high level of
total return as its investment objective. The Global Convertible Securities Fund
will seek to achieve this investment objective through a combination of current
income and capital appreciation by investing in the convertible securities of
foreign and domestic companies. See "Investment Objectives and Policies".
Each of the Funds has a distribution plan which permits it to pay up to .25% per
year of its average daily net assets for marketing and shareholder services and
expenses. A maximum sales load of 4.5% will be imposed on purchases (4.71% of
the amount invested). The minimum initial investment in each of the Funds is
currently $1,000, except for the Global Telecommunications Fund, which is
$25,000. Each of the other Funds will increase its minimum initial investment to
$25,000 when it has either 10,000 shareholders or over $100,000,000 of assets
under management. Additionally, accounts establishing an Automatic Investment
Plan do not require any minimum initial investment. See "Purchase of Shares." As
each of the Funds is non-diversified, each Fund will have the ability to invest
a larger portion of its assets in a single issuer than would be the case if it
were diversified. As a result of this non-diversified status, each Fund may
experience greater fluctuation in net asset value than investment companies
which invest in a broad range of issuers. For further information, contact
Gabelli & Company, Inc. at the address or telephone number shown above.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<PAGE>
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Because many convertible securities are not considerered investment grade, the
Global Convertible Securities Fund may invest without limit in such securities.
Securities of this type, commonly referred to as "junk bonds," are subject to a
greater risk of loss of principal and interest. Investors should carefully
assess these risks before investing in the Global Convertible Securities Fund.
See "Associated Risk Factors."
This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Funds. A Statement of Additional Information
dated May 1, 1995 (the "Additional Statement") containing additional information
about each Fund has been filed with the Securities and Exchange Commission and
is incorporated by reference into this Prospectus. For a free copy, write or
call the Corporation at the telephone number or address set forth above. This
Prospectus should be retained by investors for future reference.
TABLE OF FEES AND EXPENSES FOR EACH OF THE FUNDS
<TABLE>
<CAPTION>
Gabelli Global
Entertainment
Gabelli Global Gabelli Global and Media Fund
Telecom- Interactive Gabelli Global and Gabelli
munications Couch Convertible Global Growth
Shareholder Transaction Expenses: Fund Potato (TM)(C) Fund Securities Fund Fund
- --------------------------------- -------- ------------------- --------------- --------------
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage
of offering price)(a) ................................... 4.50% 4.50% 4.50% 4.50%
Maximum Sales Load Imposed on Reinvested Dividends ........ None None None None
Deferred Sales Load ....................................... None None None None
Redemption Fees ........................................... None None None None
Exchange Fees ............................................. None None None None
Annual Fund Operating Expenses (as a percentage of average daily net assets):
- ------------------------------
Management Fees (b) ....................................... 1.00% 1.00% 1.00% 1.00%
12b-1 Expenses ............................................ .25% (c) .25% .25% .25%
Other Expenses (d) ........................................ .55% 1.22% 1.24% 1.25%
---- ---- ---- ----
Total Operating Expenses for each fund ................. 1.80% 2.47% 2.49% 2.50%
==== ==== ==== ====
Example:
- --------
If you pay the maximum sales load, you would pay the
following expenses on a $1,000 investment assuming a
5% annual return; 1 year 3 years 5 years 10 years
------- ------- ------- --------
Gabelli Global Telecommunications Fund .................... $63 $102 $144 $260
Gabelli Global Interactive Couch Potato (TM)(C) Fund ...... $70 $124 $179 $332
Gabelli Global Convertible Securities Fund ................ $71 $124 $180 $334
Gabelli Global Entertainment and Media Fund and Gabelli
Global Growth Fund ...................................... $71 $124 $181 $335
If you do not pay the maximum sales load, you would pay
the following expenses on a $1,000 investment assuming a
5% annual return; 1 year 3 years 5 years 10 years
------ -------- ------- --------
Gabelli Global Telecommunications Fund ...................... $18 $57 $ 99 $215
Gabelli Global Interactive Couch Potato (TM)(C) Fund ........ $25 $79 $134 $287
Gabelli Global Convertible Securities Fund .................. $26 $79 $135 $289
Gabelli Global Entertainment and Media Fund and Gabelli
Global Growth Fund ....................................... $26 $79 $136 $290
</TABLE>
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The amounts listed in these examples should not be considered as representative
of future expenses, and actual expenses may be greater or less than those
indicated. Moreover, while the example assumes a 5% annual return, each Fund's
actual performance will vary and may result in an actual return greater or less
than 5%.
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2
<PAGE>
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The information contained in the foregoing table relates to each of the Funds
and is provided to assist you in understanding the various direct and indirect
costs and expenses that an investor in any of the Funds would bear.
- --------
(a) See "Purchase of Shares."
(b) Subject to potential reduction as a result of the Adviser's expense
reimbursement obligations.
(c) With respect to the Global Telecommunications Fund, upon approval by
such Fund's shareholders at the Special Meeting of Shareholders on May 17,
1995, the Fund will reinstitute its Rule 12b-1 Distribution Plan which
lapsed on October 1, 1994 and authorizes distribution expenses of .25% of
the Fund's average daily net assets per year.
(d) Such expenses include custodian and transfer agency fees and other
customary Fund expenses.
Management's Discussion and Analysis of the Fund's performance during the
fiscal year ended December 31, 1994 is included in the Fund's Annual Report to
Shareholders dated December 31, 1994. The Fund's Annual Report to Shareholders
may be obtained upon request and without charge by writing or calling the Fund
at the address or telephone number listed on the Prospectus cover.
FINANCIAL HIGHLIGHTS
The following table has been audited by Grant Thornton LLP, independent
accountants, whose unqualified report thereon appears in the Additional
Statement. This information should be read in conjunction with the financial
statements which are included in the Additional Statement of selected data for a
share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
The Gabelli Global
Telecommunications Fund
The Gabelli -----------------------
The Gabelli Global November 1, 1993
Global Interactive (commencement
Convertible Couch Year Ended of operations)
Securities Fund Potato(TM)(C) Fund December 31, through December
1994(a) 1994(b) 1994 31, 1993(c)
-------- -------- ---------- -----------------
<S> <C> <C> <C> <C>
Operating Performance:
Net asset value, beginning of period $10.00 $10.00 $10.20 $10.00
------- ------- -------- -------
Net investment income/(loss) ....... 0.16 (0.01) 0.065 0.01
Net realized and unrealized gain
(loss) on securities ............. (0.07) 0.26 (0.440) 0.29
------- -------- ------- -------
Total from investment operations ... 0.09 0.25 (0.375) 0.30
------- -------- ------- -------
Less Distributions:
Distributions from net investment
income .......................... (0.16) -- (0.065) (0.01)
Distributions from realized gains .. -- -- (0.030) (0.09)
------- -------- ------- -------
Total Distributions ................ (0.16) -- (0.095) (0.10)
------- -------- ------- -------
Net asset value, end of period ..... $ 9.93 $10.25 $ 9.73 $10.20
======= ======== ======= =======
Total Return ....................... 0.90% 2.50% (3.7)% 3.0%
Ratios to average net assets/supplemental data:
Net assets, end of period
(in thousands) ................... $15,574 $24,831 $137,731 $45,290
Ratio of operating expenses to
average net assets ................. 2.49%* 2.47%* 1.80% 2.54%*
Ratio of net investment income
to average net assets .............. 2.80%* (0.13)%* 0.74% 1.28%*
Portfolio turnover rate .............. 329% 14% 14% 3%
</TABLE>
--------
* Annualized.
(a) Fund commenced operations on February 3, 1994.
(b) Fund commenced operations on February 7, 1994.
(c) Fund commenced operations November 1, 1993
- --------------------------------------------------------------------------------
3
<PAGE>
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INVESTMENT OBJECTIVES AND
POLICIES
Each of the Global Telecommunications Fund, Global Entertainment and Media
Fund, Global Growth Fund and Global Interactive Couch Potato Fund seeks capital
appreciation as a primary investment objective and current income as a secondary
objective. These Funds will seek to achieve these objectives through investments
primarily in the common stocks and other securities of the particular types of
foreign and domestic companies described below for each Fund.
The Global Convertible Securities Fund seeks a high level of total return as
its investment objective. The Global Convertible Securities Fund will seek to
achieve this investment objective through a combination of current income and
capital appreciation by investing in the convertible securities of foreign and
domestic companies.
Although these Funds may invest in the securities of any issuer and may use
various special investment techniques, under normal market conditions these
Funds will invest at least 65% of their respective total assets in securities of
the particular types of companies or securities described for that Fund. With
respect to the Global Telecommunications Fund, the Global Entertainment and
Media Fund and the Global Interactive Couch Potato Fund, such companies will
derive at least 50% of either their revenues or earnings from activities in the
particular industry described for each Fund, or will devote at least 50% of
their assets to such activities, based on such companies' most recent fiscal
year for which audited financial information is available.
Under normal circumstances each Fund will invest in securities of issuers
located in at least three countries, which may include the United States. Risks
inherent in each Fund's investment objectives and policies are discussed below.
See "Associated Risk Factors." Each Fund's investment objectives and the
industry concentration policies of the Global Telecommunications Fund, the
Global Entertainment and Media Fund and the Global Interactive Couch Potato Fund
are fundamental and cannot be changed without shareholder approval.
The Adviser believes that at the present time investment by the Funds in the
securities of companies located throughout the world presents great potential
for accomplishing each Fund's respective investment objective. While the Adviser
expects that a substantial portion of each Fund's assets may be invested in the
securities of domestic companies, a significant portion of each Fund's portfolio
may also be comprised of the securities of issuers headquartered outside the
United States.
The Global Telecommunications Fund
Under normal market conditions, the Global Telecommunications Fund will invest
at least 65% of its total assets in the telecommunications industry. The
telecommunications companies in which the Global Telecommunications Fund may
invest are engaged in the following products and services: regular telephone
service throughout the world; wireless communications services and equipment,
including cellular telephone, microwave and satellite communications, paging,
and other emerging wireless technologies; equipment and services for both data
and voice transmission, including computer hardware and software; electronic
components and communications equipment; video conferencing; electronic mail;
local and wide area networking, and linkage of data and word processing systems;
publishing and information systems; video text and teletext; emerging
technologies combining television, telephone and computer systems; broadcasting,
including television and radio via VHF, UHF, satellite and microwave
transmission and cable television.
Mr. Mario J. Gabelli, President, will be primarily responsible for the
day-to-day management of the Global Telecommunications Fund. He will be
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4
<PAGE>
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assisted by a team of Associate Portfolio Managers including Marc J. Gabelli and
Ivan Arteaga. Mr. Gabelli has been Chairman, President and Chief Executive
Officer of the Adviser since its organization in 1980.
The Global Interactive Couch Potato
Fund
Under normal market conditions, the Global Interactive Couch Potato Fund will
invest at least 65% of its total assets in securities of companies involved with
communications, creativity and copyright. Such companies, which are
participating in emerging technological advances in interactive services and
products that are accessible to individuals in their homes or offices through
consumer electronics devices such as telephones, televisions, radios and
personal computers, are typically associated with the communications,
entertainment, media and publishing industries.
The communications companies in which the Global Interactive Couch Potato Fund
may invest are engaged in the development, manufacture or sale of communications
services or equipment throughout the world including the following products or
services: regular telephone service; wireless communications services and
equipment, including cellular telephone, microwave and satellite communications,
paging, and other emerging wireless technologies; equipment and services for
both data and voice transmission, including computer hardware and software;
electronic components and communications equipment; video conferencing;
electronic mail; local and wide area networking, and linkage of data and word
processing systems; publishing and information systems; video text and teletext;
emerging technologies combining television, telephone and computer systems;
broadcasting, including television and radio via VHF, UHF, satellite and
microwave transmission and cable television.
The entertainment, media and publishing companies in which the Global
Interactive Couch Potato Fund may invest are engaged in providing the following
products or services: the creation, packaging, distribution, and ownership of
entertainment programming throughout the world including pre-recorded music,
feature length motion pictures, made for T.V. movies, television series,
documentaries, animation, game shows, sports programming and news programs; live
events such as professional sporting events or concerts, theatrical exhibitions,
television and radio broadcasting via VHF, UHF, satellite and microwave
transmission, cable television systems and programming broadcast and cable
networks, wireless cable television and other emerging distribution
technologies, home video, interactive and multimedia programming including home
shopping and multiplayer games; publishing, including newspapers, magazines and
books, advertising agencies and niche advertising mediums such as in-store or
direct mail, emerging technologies combining television, telephone and computer
systems, computer hardware and software, and equipment used in the creation and
distribution of entertainment programming such as that required in the provision
of broadcast, cable or telecommunications services.
Mr. Mario J. Gabelli, President, will be primarily responsible for the
day-to-day management of the Global Interactive Couch Potato Fund. Mr. Gabelli
has been Chairman, President and Chief Executive Officer of the Adviser since
its organization in 1980.
The Global Convertible Securities Fund
Under normal market conditions, the Global Convertible Securities Fund will
invest at least 65% of its total assets in convertible securities. A convertible
security is a bond, debenture, corporate note, preferred stock or other similar
security that may be converted into or exchanged for a prescribed amount of
common stock or other equity security of the same or a different issuer within
or at a particular period of time at a specified price or formula. Before
conversion, convertible securities have characteristics similar to
nonconvertible debt securities in that they ordinarily provide a stream of
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5
<PAGE>
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income with generally higher yields than those of common stock of the same or
similar issuers. Convertible securities are senior in rank to common stock in a
corporation's capital structure and, therefore, generally entail less risk than
the corporation's common stock, although the extent to which such risk is
reduced depends in large measure upon the credit quality of the issuer. The
Global Convertible Securities Fund may invest without limit in securities that
are not considered investment grade and that accordingly have greater risk of
loss of principal and interest. The characteristics of convertible securities
make them appropriate investments for investors who seek a high level of total
return with additional credit risk. These characteristics include the potential
for capital appreciation if the value of the underlying common stock increases,
the relatively high yield received from dividend or interest payments as
compared to common stock dividends and decreased risks of decline in value,
relative to the underlying common stock due to their fixed income nature. As a
result of the conversion feature, however, the interest rate or dividend
preference on a convertible security is generally less than would be the case if
the securities were not convertible. During periods of rising interest rates, it
is possible that the potential for capital gain on a convertible security may be
less than that of a common stock equivalent if the yield on the convertible
security is at a level which causes it to sell at a discount. Any common stock
or other equity security received by conversion will not be included in the
calculation of the percentage of total assets invested in convertible
securities.
Mr. A. Hartswell Woodson III, Vice-President -- Portfolio Manager, will be
primarily responsible for the day-to-day management of the Global Convertible
Securities Fund. Mr. Woodson joined the Adviser as a portfolio manager in 1993.
Prior to that he was employed by ABN Amro Bank N.V. in Amsterdam for more than
the previous five years with responsibility for equity-linked new issue
securities (including convertible securities) in all currencies.
The Global Entertainment and Media
Fund
Under normal market conditions, the Global Entertainment and Media Fund will
invest at least 65% of its total assets in the entertainment and media
industries. Entertainment and media companies in which the Global Entertainment
and Media Fund may invest are engaged in providing the following products or
services: the creation, packaging, distribution and ownership of entertainment
programming throughout the world including pre-recorded music, feature length
motion pictures, made for T.V. movies, television series, documentaries,
animation, game shows, sports programming and news programs, live events such as
professional sporting events or concerts; theatrical exhibition, television and
radio broadcasting via VHF, UHF, satellite and microwave transmission, cable
television systems and programming, broadcast and cable networks, wireless cable
television and other emerging distribution technologies, home video, interactive
and multimedia programming including home shopping and multiplayer games;
publishing including newspapers, magazines and books, advertising agencies and
niche advertising mediums such as in-store or direct mail, emerging technologies
combining television, telephone and computer systems, computer hardware and
software, and equipment used in the creation and distribution of entertainment
programming such as that required in the provision of broadcast, cable or
telecommunications services.
Mr. Mario J. Gabelli, President, will be primarily responsible for the
day-to-day management of the Global Entertainment and Media Fund. Mr. Gabelli
has been Chairman, President and Chief Executive Officer of the Adviser since
its organization in 1980.
The Global Growth Fund
Under normal market conditions, the Global Growth Fund will invest at least 65%
of its total assets in companies which the Adviser believes are likely to have
rapid growth in revenues and earnings and potential for above average capital
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6
<PAGE>
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appreciation. Although the Global Growth Fund may also invest in any type of
fixed income instrument and may use various hedging techniques, under normal
market conditions the Global Growth Fund will invest at least 65% of its total
assets in equity securities. Equity securities are common stock, preferred stock
and securities convertible into or exchangeable for common or preferred stock.
Mr. Mario J. Gabelli, President, will be primarily responsible for the
day-to-day management of the Global Growth Fund. Mr. Gabelli has been Chairman,
President and Chief Executive Officer of the Adviser since its organization in
1980.
Investment Methodology and Policies
In selecting securities for each of the Funds, the Adviser normally will
consider the following factors, among others: (1) the Adviser's own evaluations
of the private market value, cash flow, earnings per share and other fundamental
aspects of the underlying assets and business of the company; (2) the potential
for capital appreciation of the securities; (3) the interest or dividend income
generated by the securities; (4) the prices of the securities relative to other
comparable securities; (5) whether the securities are entitled to the benefits
of call protection or other protective covenants; (6) the existence of any anti-
dilution protections or guarantees of the security; and (7) the diversification
of each Fund's portfolio as to issuers. The Adviser's investment philosophy with
respect to equity securities seeks to identify assets that are selling in the
public market at a discount to their private market value, which the Adviser
defines as the value informed purchasers are willing to pay to acquire assets
with similar characteristics. The Adviser also normally evaluates the issuers'
free cash flow and long-term earnings trends. Finally, the Adviser looks for a
catalyst - something in the company's industry or indigenous to the company or
country itself that will surface additional value.
Subject to each Fund's policy of investing at least 65% of its total assets in
particular industries or securities, each Fund may invest in common stock,
preferred stock, convertible securities, depository receipts, bonds, notes and
other debt obligations of any maturity, mortgage-backed securities, warrants,
options and futures contracts on securities and securities indices, and
securities of companies in bankruptcy or reorganization. Such securities may be
issued by domestic or foreign corporations or other types of entities,
governments or agencies or instrumentalities of governments or supranational
agencies. There is no minimum rating or credit quality of fixed income
securities in which each Fund may invest. Each Fund may also utilize other
investment strategies such as short selling, buying or selling when-issued
securities, entering into forward commitments, buying securities of unseasoned
companies and engaging in various hedging strategies such as the use of futures
and options and repurchase agreements, and foreign currency transactions.
Common stocks represent the residual ownership interest in an issuer and are
entitled to the income and increase in the value of the assets and business of
the entity after all of its obligations and preferred stock are satisfied.
Common stocks fluctuate in price in response to many factors including
historical and prospective earnings of the issuer, the value of its assets,
general economic conditions, interest rates, investor perceptions and market
liquidity. Preferred stock has a preference over common stock in liquidation
(and generally dividends as well) but is subordinated to the liabilities of the
issuer in all respects. As a general rule the market value of preferred stock
with a fixed dividend rate and no conversion element varies inversely with
interest rates and perceived credit risk, while the market price of convertible
preferred stock generally also reflects some element of conversion value. Bonds,
debentures, notes, asset and morgage-backed securities and money market
instruments such as commercial paper and bankers acceptances represent
obligations of the issuer. Debt securities that are convertible into or
exchangeable for preferred or common stock are liabilities of the issuer
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7
<PAGE>
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but are generally subordinated to more senior elements of the issuer's balance
sheet. Although such securities also generally reflect an element of conversion
value, their market value also varies with the interest rates and perceived
risk. Depository receipts are utilized to make investing in a particular
security (usually foreign) more convenient for investors.
Each of the Funds other than the Global Convertible Securities Fund may invest
up to 25% of its assets in fixed income securities rated, at the time of
investment, lower than BBB by Standard & Poor's Rating Group ("S&P") or Baa by
Moody's Investors Service, Inc. ("Moody's") or unrated but determined by the
investment adviser to be of equivalent quality. These Funds do not expect to
invest in excess of 10% of its assets in such securities. Securities rated below
BBB or Baa are typically referred to as "junk bonds" and have speculative
characteristics that result in a greater risk of loss of principal and interest.
Because many convertible securities are rated below investment grade, the
Global Convertible Securities Fund may invest without limit in securities rated
lower than BBB by S&P and Baa by Moody's. It is expected that not more than 50%
of the Fund's portfolio will consist of securities rated CCC or lower by S&P or
Caa or lower by Moody's or, if unrated, are of comparable quality as determined
by the Adviser. These securities and securities rated BB or lower by S&P or Ba
or lower by Moody's may include securities of issuers in default. Such
securities are considered by the rating agencies to be predominantly speculative
and may involve major risk exposures such as increased sensitivity to interest
rate and economic changes and limited liquidity resulting in the possibility
that prices realized upon the sale of such securities will be less than the
prices used in calculating the Global Convertible Security Fund's net asset
value. See "Associated Risk Factors."
Each Fund's investments in securities of issuers in default will be limited to
not more than 5% of the total assets of the Fund. Further, each Fund will invest
in securities of issuers in default only when the Adviser believes that such
issuers will emerge from bankruptcy and/or the value of such securities will
appreciate. By investing in securities of issuers in default the Funds bear the
risk that such issuers will not emerge from bankruptcy or that the value of such
securities will not appreciate. See Appendix A -- Description of Ratings.
Each Fund may invest in securities for which a tender offer or exchange offer
has been made or announced and in securities of companies for which a merger,
consolidation, liquidation or similar proposal has been announced. Each Fund
also may invest up to 5% of its assets in options and up to 5% of its assets in
warrants to buy securities, with no more than 2% invested in unlisted warrants.
Each Fund may invest up to 10% of its assets in securities issued by real estate
investment trusts. Each Fund may also invest up to 10% of its assets (5% per
issuer) in securities issued by other unaffiliated investment companies.
Each Fund may enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis, in excess
of customary settlement periods for the type of security involved. Securities
purchased under a forward commitment are subject to market fluctuation, and no
interest (or dividends) accrues to the Fund prior to the settlement date.
Each Fund may make short sales of securities. A short sale is a transaction in
which a Fund sells a security it does not own in anticipation that the market
price of that security will decline. The market value of the securities sold
short of any one issuer will not exceed either 5% of any Fund's total assets or
5% of such issuer's voting securities. None of the Funds will make a short sale,
if, after giving effect to such sale, the market value of all securities sold
short exceeds 25% of the value of its assets or that Fund's aggregate short
sales of a particular class of securities exceeds 25% of the outstanding
securities of that class. Each Fund may also make short sales "against the box"
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without respect to such limitations. In this type of short sale, at the time of
the sale, the Fund owns or has the immediate and unconditional right to acquire
at no additional cost the identical security.
Each Fund may invest in repurchase agreements with respect to any securities it
owns. Repurchase agreements are considered loans to the counter party, and will
be fully collateralized at all times with liquid high grade securities and will
only be entered into with financial institutions approved by the Board of
Directors.
Each Fund may also lend securities to dealers or others and invest the
collateral in accordance with the Fund's investment objective and policies. Each
Fund may borrow from banks for temporary or emergency purposes or to satisfy
redemptions requests in amounts not in excess of 15% of each Fund's total
assets, with such borrowing not to exceed 5% of each Fund's total assets for
purposes other than satisfying redemption requests. Each Fund will not purchase
securities when borrowings exceed 5%.
Each Fund may invest up to 15% of its net assets in illiquid securities as to
which market quotations are not readily available. Within this 15% limitation,
each Fund may invest up to 10% of its net assets in restricted securities and up
to 5% of its net assets in the securities of unseasoned issuers.
See the Additional Statement for more information about these securities and
investment practices.
ASSOCIATED RISK FACTORS
All securities investments are subject to risks. The equity securities in which
each Fund may invest are generally subordinated to the claims of creditors and
market prices are subject to the performance of the issuer, its financial health
and market perceptions. The value of securities of an issuer engaged in a tender
offer, restructuring or exchange offer may decline substantially if the
transaction fails to occur.
Industry Risks. Each Fund will invest a significant portion of its assets in
particular types of companies, and, as a result, the value of each Fund's
respective shares will be more susceptible to factors affecting those particular
types of companies. The communications industry is subject to governmental
regulation and the products and services of telecommunications companies may be
subject to rapid obsolescence. Certain companies in the United States, for
example, are subject to both state and federal regulations affecting permitted
rates of return and the kinds of services that may be offered. Such companies
are becoming subject to increasing levels of competition. As a result stocks of
these companies may be subject to greater price volatility.
The risks of investing in the entertainment and media industry and publishing
industry are largely the same as investing in the communications industry,
except that such industries are subject to less federal and state regulation.
Additional risks particular to the entertainment and media industry involve a
greater price volatility for the overall market, rapid obsolescence of
entertainment products and services resulting from changing consumer tastes,
intense competition and strong market reactions to technological developments
throughout the industry.
Various types of ownership restrictions are imposed by the Federal
Communications Commission ("FCC") on investments both in mass media companies,
such as broadcasters and cable operators, as well as in common carrier
companies, such as the providers of local telephone service and cellular radio.
For example, the FCC's broadcast multiple ownership rules, which apply to the
radio and television industries, provide that investment advisers are deemed to
have an "attributable" interest whenever the adviser has the right to determine
how more than five percent of the issued and outstanding voting stock of a
broadcast company may be voted. These same broadcast rules prohibit the holding
of an attributable interest in more than twenty AM and twenty FM radio broadcast
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stations nationally or more than twelve television stations nationally. Similar
types of restrictions apply in the mass media and common carrier industries.
The attributable interests that result from the role of the investment adviser
and its principals vis-a- vis other funds, managed accounts and companies may
limit the investments of the Funds.
Smaller Companies. While the Funds intend to focus on the securities of
established suppliers of accepted products and services, each Fund may invest in
smaller companies which may benefit from the development of new products and
services. These smaller companies may present greater opportunities for capital
appreciation, and may also involve greater investment risk than large,
established issuers. For example, smaller companies may have limited product
lines, market or financial resources, and their securities may trade less
frequently and in lower volume than the securities of larger, more established
companies. As a result, the prices of the securities of such smaller companies
may fluctuate to a greater degree than the prices of securities of other
issuers.
Lower Rated Securities. Securities rated below investment grade are subject to
certain risks that may not be present with higher rated securities. The market
prices and market value adjusted yields of fixed income securities generally
increase as interest rates fall and decrease as interest rates rise. However,
the prices and price adjusted yields of lower rated securities have been found
to be less sensitive to interest rate changes than higher-rated investments and
have been more sensitive to broad economic changes, changes in the equity
markets and individual corporate developments. Thus, periods of economic
uncertainty and change can be expected to result in increased volatility in the
market prices and yields of lower rated securities and thus in each Fund's net
asset value. Similarly, a strong economic downturn or a substantial period of
rising interest rates can be expected to severely affect the market for lower
rated securities in that highly leveraged or weak performing companies would
generally be perceived to encounter difficulties meeting profit goals and their
principal and interest payment obligations or obtaining additional financing and
thus a higher incidence of default can be expected. This would affect the value
of such securities and thus each Fund's net asset value.
Many lower-rated securities are typically traded by a small number of
broker-dealers rather than in a broad secondary market. Trades are primarily on
a principal basis without disclosure of markups and prices are not reported in
any organized manner. As a result of these and other factors, many lower-rated
securities are not as liquid as higher-grade securities of the same maturity and
amount outstanding. The Fund's responsibility to value accurately and its
ability to sell lower-rated securities at the value placed on them by the Fund
will be made more difficult to the extent that such securities are thinly traded
or illiquid. During such periods, there may be less reliable objective
information available and the judgment of the Corporation's Board of Directors
plays a greater role. Further, adverse publicity about either the economy or a
particular issuer may adversely affect investors' perception of the value, and
thus liquidity, of a high yield security, whether or not such perceptions are
based on a fundamental analysis.
The credit ratings issued by credit rating services may not fully reflect the
true risks of an investment. Although the Adviser considers the ratings of
recognized rating services such as Moody's and S&P in determining investments,
the Adviser primarily relies on its own credit analysis, which includes a study
of existing debt, capital structure, ability to service debts and to pay
dividends, the issuer's sensitivity to changes in economic conditions, its
operating history and the current trend of earnings, cash flow and other
factors.
Miscellaneous Investment Techniques. Repurchase agreements have the risk that
collateral may not be able to be disposed of at a desirable price, delays as a
result of bankruptcy of the counter party or encumbrances of collateral or
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restrictions on its disposition. Mortgage-backed securities have the credit
risks of delinquency and default as well as the risk that prepayments of
principal generally may be made at any time without penalty. Lending of
securities can result in a failure to deliver the original security by the
borrower, and similar risks with respect to disposition of the collateral. When
issued and delayed delivery securities transactions and forward commitments
involve potential loss to a Fund if the counterparty to the transaction fails to
perform. Hedging transactions also have certain risks including imperfect market
correlations, dependence on the credit of the counter party, possible inability
to enter into offsetting transactions and market fluctuations that can result in
a Fund being in a worse position than if the hedging had not occurred. Currency
transactions also include the risk securities losses could be magnified by
changes in the value of the currency in which a security is denominated relative
to the U.S. dollar. While the Adviser may try to hedge such risks, entering into
hedging transactions can result in even greater losses.
The purchaser of an option risks a total loss of the premium paid for the option
if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
forgoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the Fund the credit risk that
the counterparty will fail to honor its obligations. If the price of the
security sold short increases between the time of the short sale and the time a
Fund replaces the borrowed security, the Fund will incur a loss; conversely, if
the price declines, a Fund will realize a capital gain. Although a Fund's gain
is limited to the price at which it sold the security short, its potential loss
is theoretically unlimited.
Disposition of illiquid securities often takes more time than for more liquid
securities, may result in higher selling expenses and may not be able to be made
at desirable prices.
Foreign Securities. Investments in foreign securities involve certain risks not
ordinarily associated with investments in securities of domestic issuers,
including fluctuations in foreign exchange rates, future political and economic
developments, and the possible imposition of exchange controls or other foreign
governmental laws or restrictions. In addition, with respect to certain
countries, there is the possibility of expropriation of assets, confiscatory
taxation, political or social instability or diplomatic developments which could
adversely affect investments in those countries.
There may be less publicly available information about a foreign company than
about a U.S. company, and accounting, auditing and financial reporting standards
and requirements may not be comparable. Securities of many foreign companies are
less liquid and their prices more volatile than securities of comparable U.S.
companies. Transaction costs of investing in non-U.S. securities markets are
generally higher than in the U.S. There is generally less government supervision
and regulation of exchanges, brokers and issuers than there is in the U.S. The
Fund might have greater difficulty taking appropriate legal action in non-U.S.
courts. Depository receipts that are not sponsored by the issuer may be less
liquid.
Dividend and interest income from non-U.S. securities will generally be subject
to withholding taxes by the country in which the issuer is located and may not
be recoverable by the Fund or the investor.
The Adviser will attempt to manage these risks so that such strategies and
investments benefit each Fund, but no assurance can be given that they will be
successfully managed.
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MANAGEMENT OF THE FUNDS
The Corporation's Board of Directors (who, with its officers, are described in
the Additional Statement) has overall responsibility for the management of each
Fund. The Board of Directors decides upon matters of general policy and reviews
the actions of Gabelli & Company, Inc. (the "Distributor") and the Adviser.
Pursuant to separate Investment Advisory Contracts with the Corporation on
behalf of each Fund, the Adviser under the supervision of the Corporation's
Board of Directors, provides a continuous investment program for each Fund's
portfolio; provides investment research and makes and executes recommendations
for the purchase and sale of securities; provides facilities and personnel, and
the exercise of all voting and other rights appertaining thereto required for
each Fund's administrative management; supervises the performance of
administrative and professional services provided by others; and pays the
compensation of the Administrator and all officers and directors of each Fund
who are its affiliates. As compensation for its services and the related
expenses borne by the Adviser, each Fund pays the Adviser a fee, computed daily
and payable monthly, equal, on an annual basis, to 1.00% of each Fund's average
daily net assets, which is higher than that paid by most mutual funds. The
Adviser is located at One Corporate Center, Rye, New York 10580-1434.
The Adviser was formed in 1980 and as of March 31, 1995 acts as investment
adviser to the following funds with aggregate assets in excess of $3.7 billion:
Open-end funds: Net Assets
3/31/95
-------
(in millions)
The Gabelli Asset Fund $1,048
The Gabelli Growth Fund 478
Gabelli Gold Fund, Inc. 16
The Gabelli Value Fund Inc. 463
The Gabelli Small Cap Growth Fund 212
The Gabelli Equity Income Fund 51
The Gabelli U.S. Treasury Money Market Fund 264
The Gabelli ABC Fund 23
The Gabelli Global Telecommunications Fund 132
The Gabelli Global Convertible Securities Fund 17
Closed-end funds:
The Gabelli Convertible Securities Fund, Inc. 90
The Gabelli Equity Trust Inc. 856
The Gabelli Global Multimedia Trust Inc. 66
Gabelli & Company, Inc., the Distributor of each open-end Fund's respective
shares, is an indirect majority owned subsidiary of the Adviser. GAMCO
Investors, Inc. ("GAMCO"), a majority owned subsidiary of the Adviser, acts as
investment adviser for individuals, pension trusts, profit sharing trusts and
endowments. As of March 31, 1995, GAMCO had aggregate assets in excess of $4.5
billion under its management. Teton Advisers LLC, an affiliate of the Adviser,
acts as Investment Adviser of the Westwood Funds with assets under management in
excess of $28 million. Mr. Mario J. Gabelli may be deemed a "controlling person"
of the Adviser and the Distributor on the basis of his ownership of stock of the
Adviser.
In addition to the fee of the Adviser, each Fund is responsible for the payment
of all its other operating expenses, which include, among other things, expenses
for legal and independent auditor services, costs of printing all materials sent
to shareholders, charges of State Street Bank and Trust Company (the
"Custodian", "Transfer Agent" and "Dividend Disbursing Agent") and any other
persons hired by each respective Fund, securities registration fees, fees and
expenses of unaffiliated directors, accounting and printing costs for reports
and similar materials sent to shareholders, membership fees in trade
organizations, fidelity bond and liability coverage for the Corporation's
directors, officers and employees, interest, brokerage and other trading costs,
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taxes, expenses of qualifying each Fund for sale in various jurisdictions,
expense of its distribution plan adopted under Rule 12b-1, expenses of personnel
performing shareholder servicing functions, litigation and other extraordinary
or non- recurring expenses and other expenses properly payable by each Fund.
The Additional Statement contains further information about the Investment
Advisory Contract, including a more complete description of the advisory and
expense arrangements and administrative provisions.
Affiliates of the Adviser may, in the ordinary course of their business, acquire
for their own account or for the accounts of their advisory clients, significant
(and possibly controlling) positions in the securities of companies that may
also be suitable for investment by the Funds. The securities in which the Funds
might invest may thereby be limited to some extent. However, the Adviser does
not believe that the investment activities of its affiliates will have a
material adverse effect upon the Funds in seeking to achieve their investment
objectives.
The Adviser has entered into an Administration Contract with Furman Selz
Incorporated (the "Administrator") pursuant to which the Administrator provides
certain administrative services necessary for each Fund's operations. These
services include the preparation and distribution of materials for meetings of
the Corporation's Board of Directors, compliance testing of Fund activities and
assistance in the preparation of proxy statements, reports to shareholders and
other documentation. The Adviser pays the Administrator a monthly fee at the
annual rate of .10% of the average net assets of each Fund, (with a minimum
annual fee of $40,000 and subject to reduction to .075% on assets of the Gabelli
Funds under its administration in excess of $350 million, up to $600 million and
.06% in excess of $600 million) which, together with the services to be
rendered, are subject to negotiation between the parties and both parties retain
the right unilat erally to terminate the arrangement on not less than 60 days'
notice.
The Administrator has its principal office at 237 Park Avenue, New York, New
York 10017.
DISTRIBUTION PLAN
The Board of Directors of the Corporation has approved on behalf of each
respective Fund as being in the best interests of each Fund and its respective
shareholders separate Distribution Plans which authorize payments by each Fund
in connection with the distribution of its shares at an annual rate, as
determined from time to time by the Board of Directors, of up to .25% of each
Fund's average daily net assets. With respect to the Global Telecommunications
Fund, such Fund's Rule 12b-1 Distribution Plan lapsed on October 1, 1994 and
will be reinstituted upon shareholder approval at the Fund's Special Meeting of
Shareholders on May 17, 1995. Payments may be made in subsequent years for
expenses incurred in prior years. The potential for such subsequent payments is
a contingent liability for which no amount is currently being recorded because
the Funds do not have a reasonable basis on which to conclude that the Board of
Directors will approve such payment. Interest, carrying or other financing
charges on unreimbursed amounts could also be considered a distribution expense
if the Board of Directors so determined and would in such event also potentially
be subject to carryover to a future year upon specific approval by the Board of
Directors.
Payments may be made by a Fund under its Distribution Plan for the purpose of
financing any activity primarily intended to result in the sale of its
respective shares as determined by the Board of Directors. Such activities
typically include advertising; compensation for sales and sales marketing
activities of the Distributor, banks, broker-dealers and service providers;
shareholder account servicing; production and dissemination of prospectus and
sales and marketing materials; and capital or other expenses of associated
equipment, rent, salaries, bonuses, interest and other overhead. To the extent
any activity is one which a Fund may finance without its Distribution Plan, such
Fund may also make payments to finance such activity outside of the Plan and not
subject to its limitations.
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Each Plan is to be implemented by written agreements between the Corporation on
behalf of each Fund ande/eor the Distributor and each person (including the
Distributor) to which payments may be made. Administration of the Plan is
regulated by Rule 12b-1 under the Investment Company Act of 1940 (the "Act"),
which includes requirements that the Board of Directors receive and review at
least quarterly reports concerning the nature and qualification of expenses for
which payments are made, that the Board of Directors approve all agreements
implementing the Plan and that the Plan may be continued from year to year only
if the Board of Directors concludes at least annually that continuation of each
Plan is likely to benefit shareholders.
The Board of Directors has initially implemented each Plan by having the
Corporation enter into an agreement with the Distributor authorizing
reimbursement of expenses (including overhead) incurred by the Distributor and
its affiliates up to the .25% rate authorized by the Plan for distribution
activities of the types listed above. To the extent any of these payments are
based on allocations by the Distributor, each Fund may be considered to be
participating in joint distribution activities with other funds distributed by
the Distributor. Any such allocations would be subject to approval by the
Corporation's non-interested Directors and would be based on such factors as the
net assets of each Fund, the number of shareholder inquiries and similar
pertinent criteria. With respect to The Gabelli Global Telecommunications Fund
for the period ended December 31, 1994, the Fund paid a total of $58,812 in
brokerage commissions to Gabelli & Company, Inc. The Gabelli Global Interactive
Couch Potato Fund paid brokerage commissions of $5,040 to Gabelli & Company,
Inc. during the period February 7, 1994 (Commencement of Operations) through
December 31, 1994.
With respect to The Gabelli Global Convertible Securities Fund for the period
February 3, 1994 (Commencement of Operations) through December 31, 1994, the
Fund paid no brokerage commissions to Gabelli & Company, Inc.
PURCHASE OF SHARES
Shares of each Fund are offered with a maximum sales charge of 4.5% (4.71% of
amount invested).
The minimum initial investment in each of the Funds is currently $1,000, except
for the Global Telecommunications Fund, which is $25,000. Each of the other
Funds will increase their minimum initial investment to $25,000 when it has
either 10,000 shareholders or over $100,000,000 of assets under management.
There is no minimum for subsequent investments in any Fund. Investments through
an Individual Retirement Account or other retirement plans, and Automatic
Investment Plans, however, have different requirements. Shares of each Fund are
sold at the net asset value per share next determined after receipt of an order
by that Fund's Distributor or transfer agent in proper form with accompanying
check or bank wire or other payment arrangements satisfactory to the applicable
Fund. Although most shareholders elect not to receive stock certificates,
certificates for whole shares only can be obtained on specific written request
to the Transfer Agent.
Shares of each Fund may also be purchased through shareholder agents that are
not affiliated with the Funds or the Distributor. There is no sales or service
charge imposed by each Fund other than as described, but agents who do not
receive distribution payments or sales charges may impose a charge to the
investor for their services. Such fees may vary among agents, and such agents
may impose higher initial or subsequent investment requirements than those
established by the Funds. Services provided by broker-dealers may include
allowing the investor to establish a margin account and to borrow on the value
of each Fund's shares in that account. It is the responsibility of the
shareholder's agent to establish procedures which would assure that upon receipt
of an order to purchase shares of the Fund the order will be transmitted so that
it will be received by the Distributor before the time when the price applicable
to the buy order expires.
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Prospectuses, sales material and applications may be obtained from the
Distributor. Each Fund and its Distributor reserve the right in their sole
discretion (1) to suspend the offerings of any Fund's shares and (2) to reject
purchase orders when, in the judgment of a Fund's management, such rejection is
in the best interest of such Fund.
The net asset value per share of each Fund is determined as of the close of the
regular session of the New York Stock Exchange, which is generally 4:00 p.m.,
New York City time, on each day that trading is conducted on the New York Stock
Exchange, by dividing the value of each respective Fund's net assets (i.e., the
value of its securities and other assets less its liabilities, including
expenses payable or accrued but excluding capital stock and surplus) by the
number of shares outstanding at the time the determination is made. Foreign
securities are valued as of the close of trading on the primary exchange on
which they trade. Portfolio securities for which market quotations are readily
available are valued at market value as determined by the last quoted sale price
prior to the valuation time on the valuation date in the case of securities
traded on securities exchanges or other markets for which such information is
available. Other readily marketable securities are valued at the average of the
latest bid and asked quotations for such securities prior to the valuation time.
Debt securities with remaining maturities of 60 days or less are valued at
amortized cost, which the Board of Directors believes represents fair value. All
other assets are valued at fair value as determined by or under the supervison
of the Board of Directors. See "Determination of Net Asset Value" in the
Additional Statement.
Mail
To make an initial purchase by mail, send a completed subscription order form
with a check for the amount of the investment payable to the particular fund in
which you wish to invest to:
The Gabelli Funds
P.O. Box 8308
Boston, MA 02266-8308
Subsequent purchases do not require a completed application and can be made by
(1) mailing a check to the same address noted above or by (2) bank wire, as
indicated below. The exact name and number of the shareholder's account should
be clearly indicated.
Checks will be accepted if drawn in U.S. currency on a domestic bank for less
than $100,000. U.S. dollar checks drawn against a non-U.S. bank may be subject
to collection delays and will be accepted only upon actual receipt of funds by
the Transfer Agent. Bank collection fees may apply.
Bank Wire
To initially purchase shares of a Fund using the wire system for transmittal of
money among banks, an investor should first telephone the Fund at 1-800-422-3554
to obtain a new account number. The investor should then instruct a Federal
Reserve System member bank to wire funds to:
State Street Bank and Trust Company
ABA # 011-0000-28 REF DDA # 99046187
Attn: Shareholder Services
Re: [Name of Fund]
A/C #
------------------------------------
Account of (Registered Owner)
------------------------------
225 Franklin Street, Boston, MA 02110
For initial purchases, the investor should promptly complete and mail the
subscription order form to the address shown above for mail purchases. There may
be a charge by your bank for transmitting the money by bank wire but State
Street Bank and Trust Company does not charge investors in the Fund for the
receipt of wire transfers. If you are planning to wire funds, it is suggested
that you instruct your bank early in the day so the wire transfer can be
accomplished the same day.
Overnight Mail or Personal Delivery
Deliver a check made payable to the particular fund in which you wish to invest
along with a completed subscription order form to:
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The Gabelli Funds
The BFDS Building, 6th Floor
Two Heritage Drive
North Quincy, MA 02171
Telephone Investment Plan
You may purchase additional shares of a Fund by telephone through the Automated
Clearinghouse (ACH) system as long as your bank is a member of the ACH system
and you have a completed, approved Investment Plan application on file with our
Transfer Agent. The funding for your purchase will be automatically deducted
from the ACH eligible account you designate on the application. Your investment
will normally be credited to your Mutual Fund account on the first business day
following your telephone request. Your request must be received no later than
4:00 p.m. eastern time. There is a minimum of $100 for each telephone
investment. Any subsequent changes in banking information must be submitted in
writing and accompanied by a sample voided check. To initiate an ACH purchase,
please call 1-800-GABELLI (422-3554) or 1-800-872-5365. Fund shares purchased
through the Telephone or Automatic Investment Plan will not be available for
redemption for up to fifteen (15) days following the purchase date.
Automatic Investment Plan
The Funds offer an automatic monthly investment plan, details of which can be
obtained from the Distributor. There is no minimum initial investment for
accounts establishing an automatic investment plan.
Systematic Withdrawal Plan
The Funds offer a systematic withdrawal program for shareholders whereby they
can authorize an automatic redemption on a monthly, quarterly or annual basis.
Details can be obtained from the Distributor.
Other Investors
No minimum initial investment is required for officers, directors or full-time
employees of the Funds, other investment companies managed by the Adviser, the
Adviser, the Administrator, the Transfer Agent, the Distributor or their
affiliates, including members of the "immediate family" of such individuals and
retirement plans and trusts for their benefit. The term "immediate family"
refers to spouses, children and grandchildren (adopted or natural), parents,
grandparents, siblings, a spouse's siblings, a sibling's spouse and a sibling's
children.
REDEMPTION OF SHARES
Upon receipt by the Distributor or the Transfer Agent of a redemption request in
proper form, shares of a Fund will be redeemed at their next determined net
asset value. Redemption requests received after the time as of which that Fund's
net asset value is determined on a particular day will be redeemed at the net
asset value of that Fund determined on the next day that net asset value is
determined. Checks for redemption proceeds will normally be mailed to the
shareholder's address of record within seven days, but will not be mailed until
all checks in payment for the purchase of the shares to be redeemed have been
honored, which may take up to 15 days. Redemption requests may be made by letter
to the Transfer Agent, specifying the name of the particular Fund, the dollar
amount or number of shares to be redeemed, and the account number. The letter
must be signed in exactly the same way the account is registered (if there is
more than one owner of the shares, all must sign) and, if any certificates for
the shares to be redeemed are outstanding, presentation of such certificates
properly endorsed is also required. Signatures on a redemption request and/or
certificates must be guaranteed by an "eligible guarantor institution" which
includes certain banks, brokers, dealers, credit unions, securities exchanges
and associations, clearing agencies and savings associations (signature
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guarantees by notaries public are not acceptable). Shareholders may also redeem
a Fund's shares through shareholder agents, who have made arrangements with such
Fund permitting them to redeem shares by telephone or facsimile transmission and
who may charge shareholders a fee for this service if they have not received any
payments under the appropriate Distribution Plan. It is the responsibility of
the shareholder's agent to establish procedures which would assure that upon
receipt of a shareholder's order to redeem shares of a Fund the order will be
transmitted so that it will be received by such Fund before the time when the
price applicable to the order expires.
Further documentation, such as copies of corporate resolutions and instruments
of authority, are normally requested from corporations, administrators,
executors, personal representatives, trustees or custodians to evidence the
authority of the person or entity making the redemption request.
Each Fund may suspend the right of redemption or postpone the date of payment
for more than seven days during any period when (1) trading on the New York
Stock Exchange is restricted or the Exchange is closed, other than customary
weekend and holiday closings; (2) the Securities and Exchange Commission has by
order permitted such suspension or (3) an emergency, as defined by rules of the
Securities and Exchange Commission, exists making disposal of portfolio
investments or determination of the value of the net assets of the Fund not
reasonably practicable.
To minimize expenses, each Fund reserves the right to redeem, upon not less than
30 days notice, all shares of a Fund in an account (other than an IRA) which as
a result of shareholder redemption has a value below $500. However, a
shareholder will be allowed to make additional investments prior to the date
fixed for redemption to avoid liquidation of the account.
Telephone Redemption
By Check
Each Fund accepts telephone requests for redemption of unissued shares, subject
to a $25,000 limitation. By calling either 1-800-GABELLI (422-3554) or
1-800-872-5365, you may request that a check be mailed to the address of record
on the account, provided that the address has not changed within thirty (30)
days prior to your request. The check will be made payable to the person in
whose name the account is registered and will normally be mailed within seven
(7) days.
By Bank Wire
Each Fund accepts telephone requests from any investor for wire redemption in
excess of $1,000 (but subject to a $25,000 limitation) to a predesignated bank
either on the subscription order form or in a subsequent written authorization
with the signature guaranteed. Each Fund accepts signature guaranteed written
requests for redemption by bank wire without limitation. The proceeds are
normally wired on the following business day. Your bank must be either a member
of the Federal Reserve System or have a correspondent bank which is a member.
Any change to the banking information made at a later date must be submitted in
writing with a signature guarantee. The Funds will not impose a wire service
fee. A shareholder's agent or the predesignated bank, however, may impose its
own service fee on wire transfers.
Requests for telephone redemption must be received between 9:00 a.m. and 4:00
p.m. eastern time. If your telephone call is received after this time or on a
day when the New York Stock Exchange is not open, a new request will be required
the following business day. Shares are redeemed at the net asset value next
determined following your request. Any Fund's shares purchased by check or
through the automatic purchase plan will not be available for redemption for up
to fifteen (15) days following the purchase. Shares held in certificate form
must be returned to the Transfer Agent for redemption of shares. Telephone
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redemption is not available for IRAs. The proceeds of a telephone redemption may
be directed to an account in another mutual fund advised by Gabelli Funds, Inc.,
provided the account is registered in the redeeming shareholder's name. Such
purchase will be made at the respective net asset value plus applicable sales
charge, if any, with credit for any sales charge previously paid to the
Distributor.
The Funds and their transfer agent will not be liable for following telephone
instructions reasonably believed to be genuine. In this regard, the Funds and
their transfer agent require personal identification information before
accepting a telephone redemption. If the Funds or their transfer agent fail to
use reasonable procedures, the Funds might be liable for losses due to
fraudulent instructions.
SALES CHARGES
Shares of the Funds will be offered to accounts at a price equal to their net
asset value plus a sales charge, as described below, on a continuous basis
through securities brokers that are members of the National Association of
Securities Dealers, Inc. and have entered into selected broker agreements with
the Distributor ("selected brokers") and/or the Distributor.
Shares issued pursuant to the automatic reinvestment of income dividends or
capital gains are not subject to any sales charges. The Funds would receive the
entire net asset value of their shares sold to investors through reinvestment.
The Distributor's commission is the sales charge shown below less any applicable
discount "reallowed" to selected brokers. Normally, the Distributor will reallow
discounts to selected brokers in the amounts indicated in the table below. From
time to time, however, the Distributor may elect to reallow the entire sales
charge to selected brokers for all sales with respect to which orders are placed
with the Distributor during a particular period. A selected broker who receives
reallowance equal to or in excess of such a sales charge may be deemed an
"Underwriter" under the Securities Act of 1933.
Discount Commission
Sales Charge as to Dealers
a Percentage of as a %
------------------------------ of Public
Net Amount Public Offering Offering
Amount Invested Invested Price Price
--------------- ---------- --------------- ----------
$49,999 or less ........... 4.71% 4.50% 4.00%
$50,000 but less than
$200,000 ................ 3.09% 3.00% 2.50%
$200,000 or more .......... 1.52% 1.50% 1.00%
Reduced Sales Charges
A reduction of sales charge rates in the tables above may be obtained as
follows:
Right of Accumulation
A "single purchaser" (as defined below) is entitled to a reduced sales charge
and will be credited with amounts currently and previously paid to purchase
shares (sold subject to a sales charge) of the Funds. The Right of Accumulation
is illustrated by the following example: if a previous purchase currently valued
in the amount of $45,000 had been made subject to a sales charge and the shares
are still held, a current purchase of $6,000 will qualify for a 3.00% sales
charge. The reduced sales charge is applicable only to current purchases.
The term "single purchaser" refers to (1) an individual, (2) an individual and
spouse purchasing shares of a Fund for their own account or for trust or
custodial accounts for their minor children, or (3) a trustee or other fiduciary
purchasing for any one trust, estate, or fiduciary account (including a pension,
profit sharing or other employee benefit trust created pursuant to a plan
qualified under Sections 401 or 403 of the Internal Revenue Code (the "Code")
but not for a group formed to acquire shares). To be entitled to a reduced sales
charge for shares already owned, the investor must notify the Distributor or the
Transfer Agent at the time of the purchase that he wishes to take advantage of
such entitlement, and give the numbers of his accounts, and those accounts held
in the name of his spouse or for minor children, the age of any such child and
the specific relationship of each such person to the investor.
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Letter of Intent
By initially investing at least $1,000 in one of the Funds and submitting a
Letter of Intent to the Distributor, a "single purchaser" may make purchases of
shares of that Fund during a 13-month period at the reduced sales charge rates
applicable to the aggregate amount of the intended purchases stated in the
Letter. The Letter may apply to purchases made up to 90 days before the date of
the Letter.
Other Circumstances
No sales charge is imposed on shares of the Funds issued: (1) to persons
described under "Purchase of Shares - Other Investors" with respect to whom no
minimum investment is required; (2) in plans of reorganization, such as mergers,
asset acquisitions and exchange offers, to which the Corporation is a party; (3)
to those clients of GAMCO participating in its Asset Allocation Program; (4)
employee participants of organizations adopting the 401(k) Plan sponsored by the
Adviser; (5) to employees benefits plans having more than 100 eligible employees
or a minimum of $1 million in Plan assets invested in the Fund (Plan sponsors
are encouraged to notify the Distibutor when they first satisfy either of these
requirements); or (6) to employees of selected brokers. There is also no sales
charge on purchases by charities and endowments and other tax-exempt
organizations enumerated in Section 501(c)(3) of the Code. Additionally, no
sales charge will be imposed on shares sold to accounts existing before the
imposition of each Fund's respective sales charge.
RETIREMENT PLANS
Each Fund has available a form of Individual Retirement Account ("IRA") for
investment in shares which may be obtained from the Distributor. The minimum
investment required to open an IRA for investment in shares of a Fund is $1,000
for an individual except that both the individual and his or her spouse may
establish separate IRAs if their combined investment is $1,250. There is no
minimum for additional investment in an IRA account.
Investors who are self-employed may purchase shares of a Fund through
tax-deductible contributions to retirement plans for self-employed persons,
known as Keogh or H.R. 10 plans. The Funds do not currently act as Sponsors for
such plans. Any Fund's shares may also be a suitable investment for other types
of qualified pension or profit-sharing plans which are employer- sponsored,
including deferred compensation or salary reduction plans known as "401(k)
Plans" which give participants the right to defer portions of their compensation
for investment on a tax- deferred basis until distributions are made from the
plans. The minimum initial investment for an individual under such plans is
$1,000 and there is no minimum for additional investments. Under the Internal
Revenue Code of 1986, (the "Code") individuals may make wholly or partly tax
deductible IRA contributions of up to $2,000 annually, depending on whether they
are active participants in an employer-sponsored retirement plan and on their
income level. However, dividends and distributions held in the account are not
taxed until withdrawn in accordance with the provisions of the Code. An
individual with a non- working spouse may establish a separate IRA for the
spouse under the same conditions and contribute a maximum of $2,250 annually to
either or both IRAs provided that no more than $2,000 may be contributed to the
IRA of either spouse.
Investors should be aware that they may be subject to penalties or additional
tax on contributions or withdrawals from IRAs or other retirement plans which
are not permitted by the applicable provisions of the Internal Revenue Code.
Persons desiring information concerning investments through IRA accounts or
other retirement plans should write or telephone the Distributor.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each dividend and capital gains distribution, if any, declared by a Fund on its
outstanding shares will, unless the shareholder elects otherwise, be paid on the
payment date fixed by the Board of Directors in additional shares of such Fund
having an aggregate net asset value as of the ex-dividend date of such dividend
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or distribution equal to the cash amount of such distribution. An election to
receive dividends and distributions may be changed by notifying the applicable
Fund in writing at any time prior to the record date for a particular dividend
or distribution. There are no sales or other charges in connection with the
reinvestment of dividends and capital gains distributions. There is no fixed
dividend rate, and there can be no assurance that any Fund will pay any
dividends or realize any capital gains. However, each Fund currently intends to
pay dividends and capital gains distributions, if any, on an annual basis.
Each Fund intends to qualify for tax treatment as a "Regulated Investment
Company" under the Internal Revenue Code in order to be relieved of Federal
income tax on that part of its net investment income and realized capital gains
which it pays out to its shareholders.
To qualify, each Fund must meet certain relatively complex tests, including the
requirement that less than 30% of its gross income (exclusive of losses) may be
derived from the sale or other disposition of securities held for less than
three months. The loss of such status by a Fund would result in such Fund being
subject to Federal income tax on its taxable income and gains.
Dividends out of net investment income and distributions of realized short-term
capital gains are taxable to the recipient shareholders as ordinary income. In
the case of corporate shareholders, such distributions are eligible for the
dividends received deduction subject to proportionate reduction if the aggregate
qualifying dividends received by a Fund from domestic corporations in any year
are less than its "gross income" as defined by the Code. Distributions out of
long- term capital gains are taxable to the recipient as long-term capital
gains. Dividends and distributions declared by the Funds may also be subject to
state and local taxes. Prior to investing in shares of any Fund, prospective
shareholders may wish to consult their tax advisers concerning the Federal,
state and local tax consequences of such investment.
GENERAL INFORMATION
Description of Shares, Voting Rights and
Liabilities
Each Fund is a series of Gabelli Global Series Funds, Inc. (the "Corporation"),
which was incorporated in Maryland on July 16, 1993. The authorized capital
stock consists of one billion shares of stock having a par value of one tenth of
one cent ($.001) per share, 200,000,000 shares of which have been classified as
shares for each of the Funds. The Corporation is not required, and does not
intend, to hold regular annual shareholder meetings, but may hold special
meetings for consideration of proposals requiring shareholder approval, such as
changing fundamental policies or upon the written request of 10% of the Fund's
shares to replace its Directors. The Corporation's Board of Directors is
authorized to divide the unissued shares into separate series of stock, each
series representing a separate, additional portfolio.
There are no conversion or preemptive rights in connection with any shares of
the Funds. All shares, when issued in accordance with the terms of the offering,
will be fully paid and nonassessable. Shares will be redeemed at net asset
value, at the option of the shareholder.
Each Fund sends semi-annual and annual reports to all respective shareholders
which include lists of portfolio securities and each Fund's financial statements
which shall be audited annually. Unless it is clear that a shareholder is a
nominee for the account of an unrelated person or a shareholder otherwise
specifically requests in writing, the Funds may send a single copy of
semi-annual, annual and other reports to shareholders to all accounts at the
same address and all accounts of any person at that address.
The shares of the Funds have noncumulative voting rights which means that the
holders of more than 50% of the shares can elect 100% of the directors if the
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holders choose to do so, and, in that event, the holders of the remaining shares
will not be able to elect any person or persons to the Board of Directors.
Unless specifically requested by an investor who is a shareholder of record, the
Funds do not issue certificates evidencing shares.
Portfolio Turnover
The investment policies of the Funds may lead to frequent changes in
investments, particularly in periods of rapidly fluctuating interest or currency
exchange rates. The portfolio turnover may be higher than that of other
investment companies. During the period ended December 31, 1993 and for the year
ended December 31, 1994, the Portfolio turnover rates for The Gabelli Global
Telecommunications Fund were 3% and 14%, respectively. During the period ended
December 1994, the Portfolio turnover rates for The Gabelli Global Convertible
Securities Fund and The Gabelli Global Interactive Couch PotatoTM(C) Fund were
329% and 14%, respectively.
Portfolio turnover generally involves some expense to a Fund, including
brokerage commissions or dealer mark-ups and other transaction costs on the sale
of securities and reinvestment in other securities. Rapid turnover makes it more
difficult to qualify as a passthrough entity for Federal tax purposes in view of
a requirement that the Funds obtain less than 30% of their gross income in any
tax year from gains on the sale of securities held less than three months.
Failure of the Funds to qualify as a passthrough entity would result in Federal
taxation of the Funds at the standard corporate rate of 34% and may adversely
affect returns to shareholders. The portfolio turnover rate is computed by
dividing the lesser of the amount of the securities purchased or securities sold
by the average monthly value of securities owned during the year (excluding
securities whose maturities at acquisition were one year or less). The higher
turnover rate of The Gabelli Global Covertible Securities Fund was attributable
to several investments held for a short term period during the year which, given
the Fund's small size distorted the portfolio turnover rate.
Performance Information
The Funds may furnish data about their investment performance in advertisements,
sales literature and reports to shareholders. "Total return" represents the
annual percentage change in value of $1,000 invested at the maximum public
offering price for the one, five and ten year periods (if applicable) and the
life of a Fund through the most recent calendar quarter, assuming reinvestment
of all dividends and distributions. Quotations of "yield" will be based on the
investment income per share earned during a particular 30 day period, less
expenses accrued during the period, with the remainder being divided by the
maximum offering price per share on the last day of the period. The Funds may
also furnish total return and yield calculations for other periods ande/eor
based on investments at various sales charge levels or net asset values. Any
performance data which is based on a Fund's net asset value per share would be
reduced if a sales charge were taken into account.
Custodian, Transfer Agent and
Dividend Disbursing Agent
State Street Bank and Trust Company is the Custodian for each Fund's cash and
securities as well as the Transfer and Dividend Disbursing Agent for its shares.
Boston Financial Data Services, Inc., an affiliate of State Street Bank and
Trust Company performs the shareholder services on behalf of State Street and is
located at The BFDS Building, Two Heritage Drive, North Quincy, MA 02171. State
Street Bank and Trust Company does not assist in and is not responsible for
investment decisions involving assets of the Fund.
Independent Auditors
Grant Thornton LLP has been appointed independent auditors for each of the
Funds, and is located at 7 Hanover Square, 6th Floor, New York, New York 10004.
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Information for Shareholders
All shareholder inquiries regarding administrative procedures including the
purchase and redemption of shares should be directed to the Distributor, Gabelli
& Company, Inc., One Corporate Center, Rye, New York 10580-1434. For assistance,
call 1-800-GABELLI (1-800-422-3554).
This Prospectus omits certain information contained in the Registration
Statement filed with the Securities and Exchange Commission. Copies of the
Registration Statement including items omitted herein, may be obtained from the
Commission by paying the charges prescribed under its rules and regulations. The
Statement of Additional Information included in such Registration Statement may
be obtained without charge from the Funds or their Distributor.
APPENDIX TO PROSPECTUS
Description of Moody's Investors
Service, Inc.'s ("Moody's") Corporate
Bond Ratings
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues. Aa: Bonds which are rated Aa are
judged to be of high quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which made the long term risks appear
somewhat larger than in Aaa securities. A: Bonds which are rated A possess many
favorable investment attributes and are to be considered as upper medium grade
obligations.
Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment sometime in
the future. Baa: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well. Ba: Bonds
which are rated Ba are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class. B: Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small. Caa: Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest. Ca: Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings. C: Bonds which are rated C are the lowest rated class of
bonds and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Note: Moody's may apply numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
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Description of Standard & Poor's
Rating Group ("S&P's") Corporate
Debt Ratings
AAA: Debt rated AAA has the highest rating assigned by S&P's. Capacity to pay
interest and repay principal is extremely strong. AA: Debt rated AA has a very
strong capacity to pay interest and repay principal and differs from the highest
rated issues only in small degree. A: Debt rated A has a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories. BBB: Debt rated BBB is regarded as having adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than for debt in higher rated categories. BB, B, CCC,
CC, C: Debt rated BB, B, CCC, CC and C is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and C the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions. CI: The rating CI
is reserved for income bonds on which no interest is being paid. D: Debt rated D
is in payment default. The D rating category is used when interest payments or
principal payments are not made on the date due even if the applicable grace
period has not expired, unless S&P's believes that such payments will be made
during such grace period. The D rating also will be used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Description of Moody's Preferred Stock
Ratings
aaa: An issue which is rated aaa is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks. aa: An issue which
is rated aa is considered a high-grade preferred stock. This rating indicates
that there is reasonable assurance that earnings and asset protection will
remain relatively well maintained in the forseeable future. a: An issue which is
rated a is considered to be an upper medium grade preferred stock. While risks
are judged to be somewhat greater than in the aaa and aa classifications,
earnings and asset protection are, nevertheless expected to be maintained at
adequate levels. baa: An issue which is rated baa is considered to be medium
grade, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time. ba: An issue which is rated ba is considered to have speculative
elements and its future cannot be considered well assured. Earnings and asset
protection may be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class. b: An
issue which is rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of the
issue over any long period of time may be small. caa: An issue which is rated
caa is likely to be in arrears on dividend payments. This rating designation
does not purport to indicate the future status of payment. ca: An issue which is
rated ca is speculative in a high degree and is likely to be in arrears on
dividends with little likelihood of eventual payment. c: This is the lowest
rated class of preferred or preference stock. Issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's may apply numerical modifiers 1, 2 and 3 in each rating
classification from "aa" through "b" in its preferred stock rating system.
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The modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.
Description of S&P's Preferred Stock
Ratings
AAA: This is the highest rating that may be assigned by S&P's to a preferred
stock issue and indicates an extremely strong capacity to pay the preferred
stock obligations. AA: A preferred stock issue rated AA also qualifies as a
high-quality fixed income security. The capacity to pay preferred stock
obligations is very strong, although not as overwhelming as for issues rated
AAA. A: An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effect of changes in circumstances and economic conditions. BBB: An issue rated
BBB is regarded as backed by an adequate capacity to pay the preferred stock
obligations. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to make payments for a preferred stock in this category than
for issues in the A category. BB, B, CCC: Preferred stock rated BB, B, and CCC
are regarded, on balance, as predominantly speculative with respect to the
issuer's capacity to pay preferred stock obligations. BB indicates the lowest
degree of speculation and CCC the highest degree of speculation. While such
issues will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
CC: The rating CC is reserved for a preferred stock in arrears on dividends or
sinking fund payments but that is currently paying. C: A preferred stock rated C
is a non-paying issue. D: A preferred stock rated D is a non-paying issue with
the issuer in default on debt instruments.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
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TABLE OF CONTENTS
Page
Table of Fees and Expenses .............. 2
Financial Highlights .................... 3
Investment Objectives and Policies ...... 4
Associated Risk Factors ................. 9
Management of the Funds ................. 12
Distribution Plan ....................... 13
Purchase of Shares ...................... 14
Redemption of Shares .................... 16
Sales Charges ........................... 18
Retirement Plans ........................ 19
Dividends, Distributions and Taxes ...... 19
General Information ..................... 20
Appendix ................................ 22
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No dealer, salesman or other person has been authorized to give any information
or to make any representation other than those contained in this Prospectus, and
if given or made, such information or representation may not be relied upon as
being authorized by the Fund, the Adviser, the Administrator, the Distributor or
any affiliate thereof. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy in any state to any person to whom it is
unlawful to make such offer in such state.
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Gabelli Global Series Funds, Inc.
One Corporate Center
Rye, New York 10580-1434
Telephone 1-800-GABELLI (1-800-422-3554)
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1995
This Statement of Additional Information ("Additional Statement") relates to The
Gabelli Global Telecommunications Fund (the "Global Telecommunications Fund"),
The Gabelli Global Entertainment and Media Fund (the "Global Entertainment and
Media Fund"), The Gabelli Global Growth Fund (the "Global Growth Fund"), The
Gabelli Global Interactive Couch Potato (TM)(C) Fund (the "Global Interactive
Couch Potatocae Fund") and The Gabelli Global Convertible Securities Fund (the
"Global Convertible Fund") (collectively, the "Funds"), each of which is a
series of Gabelli Global Series Funds, Inc., a Maryland corporation (the
"Corporation"), and is not a prospectus and is only authorized for distribution
when preceded or accompanied by the Funds' prospectus dated May 1, 1995, as
supplemented from time to time (the "Prospectus"). This Additional Statement
contains information in addition to that set forth in the Prospectus into which
this document is incorporated by reference and should be read in conjunction
with the Prospectus. Additional copies of this document may be obtained without
charge by writing or telephoning the Funds at the address and telephone number
set forth above.
TABLE OF CONTENTS
Page
----
Investments .................................................... B-2
The Adviser .................................................... B-10
The Distributor ................................................ B-12
Directors and Officers ......................................... B-13
Investment Restrictions ........................................ B-16
Portfolio Transactions and Brokerage ........................... B-17
Purchase and Redemption of Shares .............................. B-19
Dividends, Distributions and Taxes ............................. B-19
Determination of Net Asset Value ............................... B-22
Investment Performance Information ............................. B-23
Financial Statements ........................................... B-25
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The following Information supplements that in the Prospectus
INVESTMENTS
Subject to each Fund's policy of investing at least 65% of its assets in
the appropriate securities of foreign and domestic companies, each Fund may
invest in any of the securities described below.
Equity Securities
Because each Fund in seeking to achieve its respective investment objective
may invest in the common stocks of both domestic and foreign issuers, an
investment in a Fund should be made with an understanding of the risks inherent
in any investment in common stocks including the risk that the financial
condition of the issuers of each Fund's portfolio securities may become impaired
or that the general condition of the stock market may worsen (both of which may
contribute directly to a decrease in the value of the securities and thus in the
value of a Fund's Shares). Additional risks include risks associated with the
right to receive payments from the issuer which is generally inferior to the
rights of creditors of, or holders of debt obligations or preferred stock issued
by, the issuer.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of debt securities. The issuance of debt securities or even preferred
stock by an issuer will create prior claims for payment of principal, interest
and dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the economic interest
of holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Further, unlike debt securities which typically have a stated
principal amount payable at maturity (which value will be subject to market
fluctuations prior thereto), common stocks have neither a fixed principal amount
nor a maturity and have values which are subject to market fluctuations for as
long as the common stocks remain outstanding. Common stocks are especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are basd on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. The value of the common stocks
in the Fund's portfolio thus may be expected to fluctuate.
Preferred stocks are usually entitled to rights on liquidation which are
senior to those of common stocks. For these reasons, preferred stocks generally
entail less risk than common stocks. Such securities may pay cumulative
dividends. Because the dividend rate is pre-established, and they are senior to
common stocks, such securities tend to have less possibility of capital
appreciation.
Some of the securities in the Funds may be in the form of depository
receipts. Depository receipts usually represent common stock or other equity
securities of non-U.S. issuers deposited with a custodian in a depository. The
underlying securities are usually withdrawable at any time by surrendering the
depository receipt. Depository receipts are usually denominated in U.S. dollars
and dividends and other payments from the issuer are converted by the custodian
into U.S. dollars before payment to receipt holders. In other respects
depository receipts for foreign securities have the same characteristics as the
underlying securities. Depository receipts that are not sponsored by the issuer
may be less liquid and there may be less readily available public information
about the issuer.
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Nonconvertible Fixed Income Securities
The category of fixed income securities which are not convertible or
exchangeable for common stock includes preferred stocks, bonds, debentures,
notes, asset and mortgage backed securities and money market instruments such as
commercial paper and bankers acceptances. There is no minimum credit rating for
these securities in which the Funds may invest. Accordingly, each Fund could
invest in securities in default although no Fund will invest more than 5% of its
assets in such securities.
Up to 25% of each Fund's assets may be invested in lower quality debt
securities although each Fund does not expect to invest more than 10% of its
assets in such securities. The foregoing limitations do not apply to the Global
Convertible Securities Fund, which may invest in lower quality securities
without limit. The market values of lower quality fixed income securities tend
to be less sensitive to changes in prevailing interest rates than higher-quality
securities but more sensitive to individual corporate developments than
higher-quality securities. Such lower-quality securities also tend to be more
sensitive to economic conditions than are higher-quality securities.
Accordingly, these lower-quality securities are considered predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation and will generally
involve more credit risk than securities in the higher-quality categories. Even
securities rated Baa or BBB by Moody's and S&P respectively, which ratings are
considered investment grade, possess some speculative characteristics. There are
risks involved in applying credit ratings as a method for evaluating high yield
obligations in that credit ratings evaluate the safety of principal and interest
payments, not market value risk. In addition, credit rating agencies may not
change credit ratings on a timely basis to reflect changes in economic or
company conditions that affect a security's market value. The Funds will rely on
the Adviser's judgment, analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, the Adviser will take into
consideration, among other things, the issuer's financial resources and ability
to cover its interest and fixed charges, factors relating to the issuer's
industry and its sensitivity to economic conditions and trends, its operating
history, the quality of the issuer's management and regulatory matters.
The risk of loss due to default by the issuer is significantly greater for
the holders of lower quality securities because such securities are generally
unsecured and are often subordinated to other obligations of the issuer. During
an economic downturn or a sustained period of rising interest rates, highly
leveraged issuers of lower quality securities may experience financial stress
and may not have sufficient revenues to meet their interest payment obligations.
An issuer's ability to service its debt obligations may also be adversely
affected by specific corporate developments, its inability to meet specific
projected business forecasts, or the unavailability of additional financing.
Factors adversely affecting the market value of high yield and other
securities will adversely affect the Funds' net asset value. In addition, each
Fund may incur additional expenses to the extent it is required to seek recovery
upon a default in the payment of principal of or interest on its portfolio
holdings.
From time to time, proposals have been discussed regarding new legislation
designed to limit the use of certain high yield debt securities by issuers in
connection with leveraged buy-outs, mergers and acquisitions, or to limit the
deductibility of interest payments on such securities. Such proposals, if
enacted into law, could reduce the market for such debt securities generally,
could negatively affect the financial condition of issuers of high yield
securities by removing or reducing a source of future financing, and could
negatively affect the value of specific high yield issues and the high yield
market in general. For example, under a provision of the Internal Revenue Code
enacted in 1989, a corporate issuer may be limited from deducting all of the
original issue discount on high-yield discount obligations (i.e., certain
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types of debt securities issued at a significant discount to their face amount).
The likelihood of passage of any additional legislation or the effect thereof is
uncertain.
The secondary trading market for lower-quality fixed income securities is
generally not as liquid as the secondary market for higher-quality securities
and is very thin for some securities. The relative lack of an active secondary
market may have an adverse impact on market price and each Fund's ability to
dispose of particular issues when necessary to meet liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The relative lack of an active secondary market
for certain securities may also make it more difficult for each Fund to obtain
accurate market quotations for purposes of valuing their repective portfolios.
Market quotations are generally available on many high yield issues only from a
limited number of dealers and may not necessarily represent firm bids of such
dealers or prices for actual sales. During such times, the responsibility of the
Board of Directors to value the securities becomes more difficult and judgment
plays a greater role in valuation because there is less reliable, objective data
available.
Convertible Securities
Each of the Global Telecommunications Fund, the Global Entertainment and
Media Fund, the Global Growth Fund and the Global Interactive Couch
Potato(TM)(C) Fund may invest up to 25% of its assets in convertible securities
rated, at the time of investment, less than BBB by S&P or Baa by Moody's or are
unrated but of equivalent credit quality in the judgment of the Adviser. The
Global Convertible Securities Fund may invest in such securities without limit.
Some of the convertible securities in each Fund's portfolio may be
"Pay-In-Kind" securities. During a designated period from original issuance, the
issuer of such a security may pay dividends or interest to the holder by issuing
additional fully paid and nonassessable shares or units of the same or another
specified security.
Sovereign Debt Securities
Each Fund may invest in securities issued or guaranteed by any country and
denominated in any currency. Each Fund (other than the Global Convertible
Securities Fund) expects that it generally will invest in developed countries
including Australia, Canada, Finland, France, Germany, Japan, Italy, New
Zealand, Norway, Spain, Sweden, the United Kingdom and the United States. The
obligations of governmental entities have various kinds of government support
and include obligations issued or guaranteed by governmental entities with
taxing power. These obligations may or may not be supported by the full faith
and credit of a government. Debt securities issued or guaranteed by foreign
governmental entities have credit characteristics similar to those of domestic
debt securities but include additional risks. These additional risks include
those resulting from devaluation of currencies, future adverse political and
economic developments and other foreign governmental laws. The Global
Convertible Securities Fund may invest in securities issued by undeveloped or
emerging market countries, such as those in Latin America, Eastern Europe and
much of Southeast Asia. These securities are generally not considered investment
grade and have risks similar to those of other debt securities rated less than
investment grade. Such securities are regarded as predominantly speculative with
respect to an issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve risk exposure to
adverse conditions.
Each Fund may also purchase securities issued by semi-governmental or
supranational agencies such as the Asian Development Bank, the International
Bank for Reconstructional Development, the Export-Import Bank and the European
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Investment Bank. The governmental members, or "stockholders," usually make
initial capital contributions to the supranational entity and in many cases are
committed to make additional capital contributions if the supranational entity
is unable to repay its borrowings. Each Fund will not invest more than 25% of
its assets in the securities of such supranational entities.
Each Fund may invest in securities denominated in a multi-national currency
unit. An illustration of a multi-national currency unit is the European Currency
Unit (the "ECU"), which is a "basket" consisting of specified amounts of the
currencies of the member states of the European Community, a Western European
economic cooperative organization that includes France, Germany, The
Netherlands, the United Kingdom and other countries. The specific amounts of
currencies comprising the ECU may be adjusted by the Council of Ministers of the
European Community to reflect changes in relative values of the underlying
currencies. Such investments involve credit risks associated with the issuer and
currency risks associated with the currency in which the obligation is
denominated.
Securities Subject to Reorganization
Each Fund may invest without limit in securities for which a tender or
exchange offer has been made or announced and in securities of companies for
which a merger, consolidation, liquidation or reorganization proposal has been
announced if, in the judgement of Gabelli Funds, Inc. (the "Adviser"), there is
a reasonable prospect of high total return significantly greater than the
brokerage and other transaction expenses involved.
In general, securities which are the subject of such an offer or proposal
sell at a premium to their historic market price immediately prior to the
announcement of the offer or may also discount what the stated or appraised
value of the security would be if the contemplated transaction were approved or
consummated. Such investments may be advantageous when the discount
significantly overstates the risk of the contingencies involved; significantly
undervalues the securities, assets or cash to be received by shareholders of the
prospective portfolio company as a result of the contemplated transaction; or
fails adequately to recognize the possibility that the offer or proposal may be
replaced or superseded by an offer or proposal of greater value. The evaluation
of such contingencies requires unusually broad knowledge and experience on the
part of the Adviser which must appraise not only the value of the issuer and its
component businesses as well as the assets or securities to be received as a
result of the contemplated transaction but also the financial resources and
business motivation of the offeror and the dynamics and business climate when
the offer of proposal is in process. Since such investments are ordinarily
short-term in nature, they will tend to increase the turnover ratio of the Funds
thereby increasing its brokerage and other transaction expenses as well as make
it more difficult for the Fund to meet the tests for favorable tax treatment as
a "Regulated Investment Company" under the Internal Revenue Code of 1986, as
amended (the "Code") (see "Dividends, Distributions and Taxes" in the
Prospectus). The Adviser intends to select investments of the type described
which, in its view, have a reasonable prospect of capital appreciation which is
significant in relation to both risk involved and the potential of available
alternate investments as well as to monitor the effect of such investments on
the tax qualification test of the Code.
Lower Rated Securities
Securities which are not investment grade are viewed by rating agencies as
being predominantly speculative in character and are characterized by
substantial risk concerning payments of interest and principal, sensitivity to
economic conditions and changes in interest rates, as well as by market price
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volatility and/or relative lack of secondary market trading among other risks
and may involve major risk exposure to adverse conditions or be in default.
However, each Fund does not expect to invest more than 5% of its assets in
securities which are in default at the time of investment and will invest in
such securities only when the Adviser expects that the securities will
appreciate in value. There is no minimum rating of securities in which the Funds
may invest. Securities rated less than BBB by S&P or Baa by Moody's or
comparable unrated securities are typically referred to as "junk bonds."
Lower rated securities are less sensitive to interest rate changes than
other fixed income investments but are more sensitive to broad economic changes
and individual corporate developments. The high yield securities market is
relatively new and periods of economic change can be expected to result in
increased market price volatility. As lower rated securities may be traded by a
smaller number of broker-dealers, it may be more difficult for the Corporation's
Board of Directors to value these securities and the Board's judgment will play
a greater role as less reliable, objective data is available.
Options
Each Fund may purchase or sell options on individual securities as well as
on indices of securities as a means of achieving additional return or of hedging
the value of its portfolio.
A call option is a contract that gives the holder of the option the right,
in return for a premium paid, to buy from the seller the security underlying the
option at a specified exercise price at any time during the term of the option
or, in some cases, only at the end of the term of the option. The seller of the
call option has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price. A put option is a
contract that gives the holder of the option the right in return for a premium
to sell to the seller the underlying security at a specified price. The seller
of the put option, on the other hand, has the obligation to buy the underlying
security upon exercise at the exercise price. The Fund's transactions in options
may be subject to specific segregation requirements. See "Hedging Transactions"
below.
If a Fund has sold an option, it may terminate its obligation by effecting
a closing purchase transaction. This is accomplished by purchasing an option of
the same series as the option previously sold. There can be no assurance that a
closing purchase transaction can be effected when the Fund so desires.
The purchaser of an option risks a total loss of the premium paid for the
option if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
foregoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the fund the credit risk that
the counterparty will fail to honor its obligations. A Fund will not purchase
options if, as a result, the aggregate cost of all outstanding options exceeds
5% of such Fund's assets. To the extent that puts, straddles and similar
investment strategies involve instruments regulated by the Commodity Futures
Trading Commission, each Fund is limited to an investment not in excess of 5% of
its total assets.
Warrants and Rights
Each Fund may invest up to 5% of its total assets in warrants or rights
(other than those acquired in units or attached to other securities) which
entitle the holder to buy equity securities at a specific price for or at the
end of a specific period of time. Each Fund will not invest more than 2% of its
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total assets in warrants or rights which are not listed on the New York or
American Stock Exchanges.
When Issued, Delayed Delivery Securities and Forward Commitments
Each Fund may enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis in excess
of customary settlement periods for the type of security involved. In some
cases, a forward commitment may be conditioned upon the occurrence of a
subsequent event, such as approval and consummation of a merger, corporate
reorganization or debt restructuring, i.e., a when, as and if issued security.
When such transactions are negotiated, the price is fixed at the time of the
commitment, with payment and delivery taking place in the future, generally a
month or more after the date of the commitment. While a Fund will only enter
into a forward commitment with the intention of actually acquiring the security,
such Fund may sell the security before the settlement date if it is deemed
advisable.
Securities purchased under a forward commitment are subject to market
fluctuation, and no interest (or dividends) accrues to a Fund prior to the
settlement date. The Funds will segregate with its custodian cash or liquid
high-grade debt securities with the Funds' custodian in an aggregate amount at
least equal to the amount of its outstanding forward commitments.
Short Sales
Each Fund may make short sales of securities. A short sale is a transaction
in which a Fund sells a security it does not own in anticipation that the market
price of that security will decline. The Funds expect to make short sales both
to obtain capital gains from anticipated declines in securities and as a form of
hedging to offset potential declines in long positions in the same or similar
securities. The short sale of a security is considered a speculative investment
technique.
When a Fund makes a short sale, it must borrow the security sold short and
deliver it to the broker- dealer through which it made the short sale in order
to satisfy its obligation to deliver the security upon conclusion of the sale.
The Funds may have to pay a fee to borrow particular securities and is often
obligated to pay over any payments received on such borrowed securities.
The Funds' obligation to replace the borrowed security will be secured by
collateral deposited with the broker-dealer, usually cash, U.S. government
securities or other highly liquid debt securities. The Funds will also be
required to deposit similar collateral with its Custodian to the extent, if any,
necessary so that the value of both collateral deposits in the aggregate is at
all times equal to the greater of the price at which the security is sold short
or 100% of the current market value of the security sold short. Depending on
arrangements made with the broker-dealer from which it borrowed the security
regarding payment over of any payments received by a Fund on such security, such
Fund may not receive any payments (including interest) on its collateral
deposited with such broker-dealer. If the price of the security sold short
increases between the time of the short sale and the time a Fund replaces the
borrowed security, such Fund will incur a loss; conversely, if the price
declines, such Fund will realize a capital gain. Any gain will be decreased, and
any loss increased, by the transaction costs described above. Although a Fund's
gain is limited to the price at which it sold the security short, its potential
loss is theoretically unlimited.
The market value of the securities sold short of any one issuer will not
exceed either 5% of each Fund's total assets or 5% of such issuer's voting
securities. A Fund will not make a short sale, if, after giving effect to such
sale, the market value of all securities sold short exceeds 25% of the value of
its assets or such Fund's aggregate short sales of a particular class
of securities exceeds 25% of the outstanding securities of that class.
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A Fund may also make short sales "against the box" without respect to such
limitations. In this type of short sale, at the time of the sale, such Fund owns
or has the immediate and unconditional right to acquire at no additional cost
the identical security.
Restricted and Illiquid Securities
Each Fund may invest up to a total of 15% of its net assets in securities
that are subject to restrictions on resale and securities the markets for which
are illiquid. Within this 15% limitation, each Fund may invest up to 10% of its
net assets in restricted securities and 5% of its net assets in the securities
of unseasoned issuers. Illiquid securities include most of the securities the
disposition of which is subject to substantial legal or contractual
restrictions. The sale of illiquid securities often requires more time and
results in higher brokerage charges or dealer discounts and other selling
expenses than does the sale of securities eligible for trading on national
securities exchanges or in the over-the-counter markets. Restricted securities
may sell at a price lower than similar securities that are not subject to
restrictions on resale. Securities freely salable among qualified institutional
investors under special rules adopted by the Securities and Exchange Commission
or otherwise determined to be liquid may be treated as liquid if they satisfy
liquidity standards established by the Board of Directors. Unseasoned issuers
are companies (including predecessors) that have operated less than three years.
The continued liquidity of such securities is not as well assured as that of
publicly traded securities, and accordingly the Board of Directors will monitor
their liquidity. The Board will review pertinent factors such as trading
activity, reliability of price information and trading patterns of comparable
securities in determining whether to treat any such security as liquid for
purposes of the foregoing 15% test. To the extent the Board treats such
securities as liquid, temporary impairments to trading patterns of such
securities may adversely affect the Fund's liquidity.
Repurchase Agreements
Each Fund may invest in repurchase agreements, which are agreements
pursuant to which securities are acquired by a Fund from a third party with the
understanding that they will be repurchased by the seller at a fixed price on an
agreed date. These agreements may be made with respect to any of the portfolio
securities in which a Fund is authorized to invest. Repurchase agreements may be
characterized as loans secured by the underlying securities. Each Fund may enter
into repurchase agreements with (i) member banks of the Federal Reserve System
having total assets in excess of $500 million and (ii) securities dealers,
provided that such banks or dealers meet the creditworthiness standards
established by the Fund's board of directors ("Qualified Institutions"). The
Adviser will monitor the continued creditworthiness of Qualified Institutions,
subject to the supervision of the Board of Directors. The resale price reflects
the purchase price plus an agreed upon market rate of interest which is
unrelated to the coupon rate or date of maturity of the purchased security. The
collateral is marked to market daily. Such agreements permit a Fund to keep all
its assets earning interest while retaining "overnight" flexibility in pursuit
of investments of a longer-term nature.
The use of repurchase agreements involves certain risks. For example, if
the seller of securities under a repurchase agreement defaults on its obligation
to repurchase the underlying securities, as a result of its bankruptcy or
otherwise, a Fund will seek to dispose of such securities, which action could
involve costs or delays. If the seller becomes insolvent and subject to
liquidation or reorganization under applicable bankruptcy or other laws, such
Fund's ability to dispose of the underlying securities may be restricted.
Finally, it is possible that a Fund may not be able to substantiate its interest
in the underlying securities. To minimize this risk, the securities
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underlying the repurchase agreement will be held by the Funds' custodian at all
times in an amount at least equal to the repurchase price, including accrued
interest. If the seller fails to repurchase the securities, a Fund may suffer a
loss to the extent proceeds from the sale of the underlying securities are less
than the repurchase price. Each Fund will not enter into repurchase agreements
of a duration of more than seven days if taken together with all other illiquid
securities in the Fund's portfolio, more than 10% of its total assets would be
so invested.
Loans of Portfolio Securities
To increase income, each Fund may lend its portfolio securities to
securities broker-dealers or financial institutions if (1) the loan is
collateralized in accordance with applicable regulatory requirements including
collaterization continuously at no less than 100% by marking to market daily,
(2) the loan is subject to termination by the Fund at any time, (3) the Fund
receives reasonable interest or fee payments on the loan, (4) the Fund is able
to exercise all voting rights with respect to the loaned securities and (5) the
loan will not cause the value of all loaned securities to exceed 33% of the
value of the Fund's assets.
If the borrower fails to maintain the requisite amount of collateral, the
loan automatically terminates and the Fund could use the collateral to replace
the securities while holding the borrower liable for any excess of replacement
cost over the value of the collateral. As with any extension of credit, there
are risks of delay in recovery and in some cases even loss of rights in
collateral should the borrower of the securities fail financially.
Borrowing
Each Fund may not borrow money except for (1) short-term credits from banks
as may be necessary for the clearance of portfolio transactions, and (2)
borrowings from banks for temporary or emergency purposes, including the meeting
of redemption requests, which would otherwise require the untimely disposition
of its portfolio securities. Borrowing may not, in the aggregate, exceed 15% of
assets after giving effect to the borrowing and borrowing for purposes other
than meeting redemptions may not exceed 5% of the value of each Fund's assets
after giving effect to the borrowing. Each Fund will not make additional
investments when borrowings exceed 5% of assets. Each Fund may mortgage, pledge
or hypothecate assets to secure such borrowings.
Hedging Transactions
Futures Contracts. Each Fund may enter into futures contracts only for
certain bona fide hedging, yield enhancement and risk management purposes. Each
Fund may enter into futures contracts for the purchase or sale of debt
securities, debt instruments, or indices of prices thereof, stock index futures,
other financial indices, and U.S. Government Securities.
A "sale" of a futures contract (or a "short" futures position) means the
assumption of a contractual obligation to deliver the securities underlying the
contract at a specified price at a specified future time. A "purchase" of a
futures contract (or a "long" futures position) means the assumption of a
contractual obligation to acquire the securities underlying the contract at a
specified price at a specified future time.
Certain futures contracts are settled on a net cash payment basis rather
than by the sale and delivery of the securities underlying the futures
contracts. U.S. futures contracts have been designed by exchanges that have been
designated as "contract markets" by the Commodity Futures Trading Commission
(the "CFTC"), an agency of the U.S. Government, and must be executed through a
futures commission merchant (i.e., a brokerage firm) which is a member of
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the relevant contract market. Futures contracts trade on these contract markets
and the exchange's affiliated clearing organization guarantees performance of
the contracts as between the clearing members of the exchange.
These contracts entail certain risks, including but not limited to the
following: no assurance that futures contracts transactions can be offset at
favorable prices, possible reduction of the Fund's yield due to the use of
hedging, possible reduction in value of both the securities hedged and the
hedging instrument, possible lack of liquidity due to daily limits on price
fluctuation, imperfect correlation between the contracts and the securities
being hedged, and potential losses in excess of the amount invested in the
futures contracts themselves.
Currency Transactions. Each Fund may enter into various currency
transactions, including forward foreign currency contracts, currency swaps,
foreign currency or currency index futures contracts and put and call options on
such contracts or on currencies. A forward foreign currency contract involves an
obligation to purchase or sell a specific currency for a set price at a future
date. A currency swap is an arrangement whereby each party exchanges one
currency for another on a particular date and agrees to reverse the exchange on
a later date at a specific exchange rate. Forward foreign currency contracts and
currency swaps are established in the interbank market conducted directly
between currency traders (usually large commercial banks or other financial
institutions) on behalf of their customers. Futures contracts are similar to
forward contracts except that they are traded on an organized exchange and the
obligations thereunder may be offset by taking an equal but opposite position to
the original contract, with profit or loss determined by the relative prices
between the opening and offsetting positions. Each Fund expects to enter into
these currency contracts and swaps in primarily the following circumstances: to
"lock in" the U.S. dollar equivalent price of a security the Fund is
contemplating to buy or sell that is denominated in a non-U.S. currency; or to
protect against a decline against the U.S. dollar of the currency of a
particular country to which the Fund's portfolio has exposure. The Fund
anticipates seeking to achieve the same economic result by utilizing from time
to time for such hedging a currency different from the one of the given
portfolio security as long as, in the view of the Adviser, such currency is
essentially correlated to the currency of the relevant portfolio security based
on historic and expected exchange rate patterns.
The Adviser may choose to use such instruments on behalf of the Funds
depending upon market conditions prevailing and the perceived investment needs
of each Fund. Futures contracts, interest rate swaps, and options on securities,
indices and futures contracts and certain currency contracts sold by the Funds
are generally subject to segregation and coverage requirement with the result
that, if the Funds do not hold the security or futures contract underlying the
instrument, the Funds will be required to segregate on an ongoing basis with its
custodian, cash, U.S. government securities, or other high grade liquid debt
obligations in an amount at least equal to the Funds' obligations with respect
to such instruments. Such amounts fluctuate as the obligations increase or
decrease. The segregation requirement can result in the Funds maintaining
securities positions it would otherwise liquidate or segregating assets at a
time when it might be disadvantageous to do so.
THE ADVISER
The Adviser is a New York corporation with principal offices located at One
Corporate Center, Rye, New York 10580-1434.
Pursuant to separate Investment Advisory Contracts which were approved by
each respective Fund's sole shareholder on October 1, 1993 with respect to the
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Global Telecommunications Fund, the Global Entertainment and Media Fund and the
Global Growth Fund, and on January 3, 1994 with respect to the Global
Interactive Couch Potato(TM)(C) Fund and the Global Convertible Securities Fund
the Adviser furnishes a continuous investment program for each Fund's portfolio,
makes the day-to-day investment decisions for the Funds, arranges the portfolio
transactions for the Funds and generally manages each Fund's investments in
accordance with the stated policies of each Fund, subject to the general
supervision of the Board of Directors of the Corporation.
Under the Investment Advisory Contract, the Adviser also (1) provides the
Funds with the services of persons competent to perform such supervisory,
administrative, and clerical functions as are necessary to provide efficient
administration of the Funds, including maintaining certain books and records and
overseeing the activities of the Fund's Custodian and Transfer Agent; (2)
oversees the performance of administrative and professional services provided to
the Funds by others, including the Funds' Custodian, Transfer Agent and Dividend
Disbursing Agent, as well as legal, accounting, auditing and other services
performed for the Funds; (3) provides the Funds, if requested, with adequate
office space and facilities: (4) prepares, but does not pay for, periodic
updating of the Funds' registration statement, Prospectus and Additional
Statement, including the printing of such documents for the purpose of filings
with the Securities and Exchange Commission; (5) supervises the calculation of
the net asset value of shares of the Funds; (6) prepares, but does not pay for,
all filings under state "Blue Sky" laws of such states or countries as are
designated by the Distributor, which may be required to register or qualify, or
continue the registration or qualification, of the Funds and/or its shares under
such laws; and (7) prepares notices and agendas for meetings of the Funds' Board
of Directors and minutes of such meetings in all matters required by the
Investment Company Act of 1940 (the "Act") to be acted upon by the Board.
The Adviser has entered into an Administration Contract with Furman Selz
Incorporated (the "Administrator") pursuant to which the Administrator provides
certain administrative services necessary for the Funds' operations but which do
not concern the investment advisory and portfolio management services provided
by the Adviser. For such services and the related expenses borne by the
Administrator, the Adviser pays a monthly fee at the annual rate of .10% of the
average net assets of each Fund (with a minimum annual fee of $40,000 and
subject to reduction to .075% on assets of the Gabelli Funds under its
administration in excess of $350 million up to $600 million and .06% in excess
of $600 million) which, together with the services to be rendered, is subject to
negotiation between the parties and both parties retain the right unilaterally
to terminate the arrangement on not less than 60 days' notice.
The Investment Advisory Contracts provide that absent willful misfeasance,
bad faith, gross negligence or reckless disregard of its duty, the Adviser and
its employees, officers, directors and controlling persons are not liable to the
Funds or any of their investors for any act or omission by the Adviser or for
any error of judgment or for losses sustained by the Funds. However, the
Contracts provide that the Funds are not waiving any rights it may have with
respect to any violation of law which cannot be waived. The Contracts also
provide indemnification for the Adviser and each of these persons for any
conduct for which they are not liable to the Funds. The Investment Advisory
Contracts in no way restrict the Adviser from acting as adviser to others. Each
Fund has agreed by the terms of its Investment Advisory Contract that the word
"Gabelli" in its name is derived from the name of the Adviser which in turn is
derived from the name of Mario J. Gabelli; that such name is the property of the
Adviser for copyright and/or other purposes; and that therefore, such name may
freely be used by the Adviser for other investment companies, entities or
products. Each Fund has further agreed that in the event that for any reason,
the Adviser ceases to be its investment adviser, it will, unless the Adviser
otherwise consents in writing, promptly take all steps necessary to change its
name to one which does not include "Gabelli."
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Each Investment Advisory Contract is terminable without penalty by the
Corporation on not more than sixty days' written notice when authorized by the
Directors of the Corporation, by the holders of a majority, as defined in the
Act, of the outstanding shares of the Corporation, or by the Adviser. Each
Investment Advisory Contract will automatically terminate in the event of its
assignment, as defined in the Act and rules thereunder except to the extent
otherwise provided by order of the Commission or any rule under the Act and
except to the extent the Act no longer provides for automatic termination, in
which case the approval of a majority of the disinterested directors is required
for any "assignment." Each Investment Advisory Contract provides in effect, that
unless terminated it will remain in effect until October 1, 1995, and from year
to year thereafter, so long as continuance of the Investment Advisory Contract
is approved annually by the Directors, or the shareholders of each Fund and in
either case, by a majority vote of the Directors who are not parties to the
Investment Advisory Contract or "interested persons" as defined in the Act of
any such person cast in person at a meeting called specifically for the purpose
of voting on the continuance of the Investment Advisory Contract.
Each Investment Advisory Contract also provides that the Adviser is
obligated to reimburse to each Fund any amount up to the amount of its advisory
fee by which its aggregate expenses including advisory fees payable to the
Adviser (but excluding interest, taxes, Rule 12b-1 expenses, brokerage
commissions, extraordinary expenses and any other expenses not subject to any
applicable expense limitation) during the portion of any fiscal year in which
the Contract is in effect exceed the most restrictive expense limitation imposed
by the securities law of any jurisdiction in which shares of each Fund are
registered or qualified for sale. Such limitation is currently believed to be
2.5% of the first $30 million of average net assets, 2.0% of the next $70
million of average net assets and 1.5% of average net assets in excess of $100
million. For purposes of this expense limitation each Fund's expenses are
accrued monthly and the monthly fee otherwise payable to the Adviser postponed
to the extent that each Fund's includable expenses to date exceed the
proportionate amount of such limitation to date.
During the period from November 3, 1993 (Commencement of Operations)
through December 31, 1993 and for the fiscal year ended December 31, 1994, the
Adviser received advisory fees of $52,536 and $1,233,454, respectively from The
Gabelli Global Telecommunications Fund.
During the period February 7, 1994 (Commencement of Operations) through
December 31, 1994, the Adviser received advisory fees of $174,399 from The
Gabelli Global Interactive Couch Potato Fund.
During the period February 3, 1994 (Commencement of Operations) through
December 31, 1994, the Adviser received advisory fees $86,233 from The Gabelli
Global Convertible Securities Fund.
THE DISTRIBUTOR
The Corporation on behalf of each Fund has entered into a Distribution
Agreement with Gabelli & Company, Inc. (the "Distributor"), a New York
corporation which is a subsidiary of Gabelli Funds, Inc., having principal
offices located at One Corporate Center, Rye, New York 10580-1434. The
Distributor acts as agent of each Fund for the continuous offering of their
shares on a best efforts basis.
The Distribution Agreement is terminable by the Distributor or the
Corporation at any time without penalty on not more than sixty nor less than
thirty days' written notice, provided, that termination by the Corporation must
be directed or approved by the Board of Directors of the Corporation, by the
vote of the holders of a majority of the outstanding securities of the
Corporation, or by written consent of a majority of the directors who are not
interested persons of the Corporation or the Distributor. The Distribution
Agreement will automatically terminate in the event of its assignment, as
defined in the Act. The Distribution Agreement provides that, unless terminated,
it will remain in effect until October 1, 1995 with respect to the Global
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B-12
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Telecommunications Fund, the Global Entertainment and Media Fund and the
Global Growth Fund, and January 3, 1996 with respect to the Global Interactive
Couch Potato(TM)(C) Fund and the Global Convertible Securities Fund and from
year to year thereafter, so long as continuance of the Distribution Agreement is
approved annually by the Corporation's Board of Directors or by a majority of
the outstanding voting securities of the Corporation, and in either case, also
by a majority of the Directors who are not interested persons of the Corporation
or the Distributor. With respect to the Global Telecommunications Fund, such
Fund's Rule 12b-1 Distribution Plan lapsed on October 1, 1994 and will be
reinstituted upon shareholder approval at the Fund's Special Meeting of
Shareholders on May 17, 1995.
During the fiscal year ended December 31, 1994, The Gabelli Global
Telecommunications Fund paid distribution expenses under the Distribution Plan
of $307,633. Of this amount, $92,914 was spent on advertising, $60,218 on
printing, postage and stationary, $42,499 on overhead support expenses and
$112,002 on salaries of personnel of the Distributor.
During the period February 7, 1994 (Commencement of Operations) through
December 31, 1994, The Gabelli Global Interactive Couch Potato Fund paid
distribution expenses under the Distribution Plan of $43,605. Of this amount,
$10,258 was spent on advertising, $13,981 on printing, postage and stationery,
$4,448 on overhead support expenses and $14,918 on salaries of personnel of the
Distributor.
During the period February 3, 1994 (Commencement of Operations) through
December 31, 1994, The Gabelli Global Convertible Securities Fund paid
distribution expenses under the Distribution Plan of $21,569. Of this amount,
$5,167 was spent on advertising, $8,215 on printing, postage and stationary,
$2,015 on overhead support expenses and $6,172 on salaries of personnel of the
Distributor.
DIRECTORS AND OFFICERS
The Directors and Executive Officers of the Corporation, their principal
business occupations during the last five years and their affiliations, if any,
with the Adviser or the Administrator, are shown below. Directors deemed to be
"interested persons" of any Fund for purposes of the Investment Company Act of
1940 are indicated by an asterisk.
Principal Occupations During Last Five
Years; Affiliations with the Adviser or
Name, Position with Fund and Address Administrator.
- ------------------------------------ ----------------------------------------
Mario J. Gabelli* Chairman, President, Chief Executive
President, Director and Officer and a Director of Gabelli Funds,
Chief Investment Officer Inc., Chairman, Chief Executive Officer,
One Corporate Center Chief Investment Officer and Director of
Rye, New York 10580 GAMCO Investors, Inc.; President and
Age: 52 Chairman of The Gabelli Equity Trust
Inc. and The Gabelli Global Multimedia
Trust Inc.; President, Chief Investment
Officer and Director of Gabelli Investor
Funds, I nc., Gabelli Equity Series
Funds, Inc. and The Gabelli Value Fund
Inc., Chairman of Gabelli Gold Fund,
Inc.; The Gabelli Convertible Securities
Fund, Inc. and Trustee of The Gabelli
Asset Fund; The Gabelli Growth Fund and
The Gabelli Money Market Funds; Chairman
and Director of Lynch Corporation;
Director and Adviser of Gabelli
International Ltd.; Director of Morgan
Group Inc. and Director and Adviser of
Gabelli International Ltd.
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B-13
<PAGE>
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Principal Occupations During Last Five
Years; Affiliations with the Adviser or
Name, Position with Fund and Address Administrator.
- ------------------------------------ ----------------------------------------
Felix J. Christiana Formerly Senior Vice President of Dry
Director Dock Savings Bank. Director of Gabelli
45 Pondfield Parkway Equity Series Funds, Inc., The Gabelli
Mt. Vernon, New York 10552 Value Fund Inc., The Gabelli Convertible
Age: 70 Securities Fund, Inc., The Gabelli
Equity Trust, Inc. and The Gabelli
Global Multimedia Trust Inc.; The
Treasurer's Fund, Inc., and a Trustee of
The Gabelli Asset Fund and The Gabelli
Growth Fund.
Anthony J. Colavita President and Attorney at Law in the law
Director firm of Anthony J. Colavita, P.C.;
575 White Plains Road Director of Gabelli Equity Series Funds,
Eastchester, New York 10709 Inc., Gabelli Gold Fund, Inc., Gabelli
Age: 59 Investor Funds, Inc., The Gabelli Value
Fund Inc. and The Gabelli Convertible
Securities Fund, Inc.; Trustee of The
Gabelli Asset Fund, The Gabelli Growth
Fund, The Gabelli Money Market Funds and
The Westwood Funds.
John D. Gabelli* Vice President of Gabelli & Company,
Director Inc. (1981-1990). Director of Gabelli
P.O. Box 29 Funds, Inc. (1985-1990). Retired police
Granite Springs, detective, city of Mt. Vernon (through
New York 10527 1990). Director of Gabelli Equity Series
Age: 50 Funds, Inc. Manager of
Teton Advisors LLC.
Karl Otto Pohl* Partner of Sal Oppenheim Jr. & Cie.
Director (private investment bank); Former
c/o Gabelli Funds, Inc. President of the Deutsche Bundesbank
One Corporate Center (Germany's Central Bank) and Chairman of
Rye, New York 10580 its Central Bank Council (1980-1991);
Age: 64 Currently board member of IBM World
Trade Europe/Middle East/Africa
Corp.; Bertelesmann AG; Zurich
Versicherungs-Gesellshaft (insurance);
the International Advisory Board of
General Electric Company; the
International Council for JP Morgan &
Co.; the Board of Supervisory Directors
of ROBECo/o Group; and the Supervisory
Board of Royal Dutch (petroleum
company); Advisory Director of Unilever
N.V. and Unilever Deutschland; German
Governor, International Monetary Fund
(1980-1991); Board Member, Bank for
International Settlements (1980-1991);
Chairman, European Economic Community
Central Bank Governors (1990-1991);
Director/Trustee of all Funds managed by
the Adviser.
Werner Roeder, M.D. Director of Surgery, Lawrence Hospital
Director and practicing private physician.
One Corporate Center Director, Gabelli Investor Funds, Inc.,
Rye, New York 10580 Gabelli Gold Fund, Inc. and Trustee of
Age: 54 The Westwood Funds.
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B-14
<PAGE>
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Principal Occupations During Last Five
Years; Affiliations with the Adviser or
Name, Position with Fund and Address Administrator.
- ------------------------------------ ----------------------------------------
Anthonie C. van Ekris Managing Director of Balmac
Director International, Ltd. Formerly Chairman
Le Columbia and Chief Officer of Balfour MacLaine
11 Blvd. Princess Grace Corporation and Kay Corporation (through
MC98000 1990). Director of Stahel Hardmeyer A.Z.
Monaco (through present); Trustee of The
Age: 60 Gabelli Asset Fund, The Gabelli Growth
Fund and The Gabelli Money Market Funds.
Director of The Gabelli Convertible
Securities Fund, Inc., Gabel li Gold
Fund, Inc., Gabelli Investor Funds, Inc.
and Gabelli Equity Series Funds, Inc.
Bruce N. Alpert Vice President, Treasurer and Chief
Vice President and Financial and Administrative Officer of
Treasurer the investment advisory division of the
One Corporate Center Adviser. Vice President and Treasurer of
Rye, New York 10580 The Gabelli Equity Trust Inc., The
Age: 43 Gabelli Global Multimedia Trust Inc.;
Gabelli Equity Series Funds, Inc.,
Gabelli Gold Fund, Inc., The Gabelli
Money Market Funds, The Gabelli Value
Fund Inc., Gabelli Inves tor Funds, Inc.
and the Gabelli Convertible Securities
Fund, Inc.; President and Treasurer of
The Gabelli Asset Fund, The Gabelli
Growth Fund; Vice President of The
Westwood Funds since November 1994;
Manager of Teton Advisers LLC.
J. Hamilton Crawford, Jr. Senior Vice President and General
Secretary Counsel of the investment advisory
One Corporate Center division of the Adviser; Secretary of
Rye, New York 10580 all Funds advised by Gabelli Funds, Inc.
Age: 65 Secretary of the Westwood Funds and
Teton Advisers LLC. since November 1994.
Attorney in private practice, 1990-1992.
Executive Vice President and Gene ral
Counsel of Prudential Mutual Fund
Management, Inc. from 1988-1990.
Mr. A. Hartswell Woodson III Portfolio Manager for the Adviser since
Vice President-Portfolio 1993. Employed by ABN Ambro Bank N.V.
Manager from 1988-1993.
One Corporate Center
Rye, New York 10580
Age: 37
The Corporation pays each Director who is not an employee of the Adviser or
an affiliated company an annual fee of $1,500 and $500 for each meeting of the
Board of Directors attended by the Director, and reimburses Directors for
certain travel and other out-of-pocket expenses incurred by them in connection
with attending such meetings. Directors and officers of each Fund who are
employed by the Adviser or an affiliated company receive no compensation or
expense reimbursement from the Corporation. The following table sets forth
certain information regarding the compensation of the Fund's directors and
officers. Except as disclosed below, no executive officer or person affiliated
with the Fund received compensation from the Fund for the calendar year ended
December 31, 1994 in excess of $60,000.
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<PAGE>
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COMPENSATION TABLE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Name of Person, Aggregate Pension or Retirement Estimated Annual Total Compensation
Position Compensation Benefits Accrued as Benefits Upon from Registrant and
from Registrant Part of Fund Expenses Retirement Fund Complex Paid to
(fiscal year) Directors*
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mario J. Gabelli ........ $ 0 N/A N/A $ 0
President, Director and
Chief Investment Officer
Felix J. Christiana ..... $3,500 $ 0 N/A $64,500 (8)
Director
Anthony J. Colavita ..... $3,500 0 N/A $59,000 (10)
Director
John D. Gabelli ......... 0 0 N/A 0
Director
Karl Otto P`hl .......... $3,000 0 N/A $63,250 (12)
Director
Werner Roeder, M.D ...... $3,500 0 N/A $ 5,000 (3)
Director
Anthonie C. van Ekris ... $3,500 0 N/A $40,000 (8)
Director
</TABLE>
- --------
* Represents the total compensation paid to such persons during the calendar
year ending December 31, 1994 (and, with respect to the Fund, estimated to be
paid during a full calendar year). The parenthetical number represents the
number of investment companies (including the Fund) from which such person
receives compensation that are considered part of the same fund complex as
the Fund, because, among other things, they have a common investment adviser.
As of April 10, 1995 the following were 5% or greater shareholders of the
Fund:
Percentage of Shares
Shareholder Outstanding
----------- --------------------
Charles Schwab & Co., Inc.(1) 6.75%
101 Montgomery Street (The Gabelli Global
San Francisco, CA 94104-4122 Telecommunications Fund)
- --------
(1) Charles Schwab & Co., Inc. disclaims beneficial ownership.
As of the date of this Additional Statement, the Officers and Directors of
the Fund as a group owned less than 1% of the outstanding shares of the Fund.
INVESTMENT RESTRICTIONS
Each Fund's investment objective and the following investment restrictions
are fundamental and cannot be changed without the approval of the holders of a
majority of each Fund's outstanding voting securities (defined in the 1940 Act
as the lesser of (a) more than 50% of the outstanding shares or (b) 67% or more
of the shares represented at a meeting at which more than 50% of the outstanding
shares are represented). All other investment policies or practices are
considered by each Fund not to be fundamental and accordingly may be changed
without stockholder approval. If a percentage restriction on investment or use
of assets set forth below is adhered to at the time a transaction is effected,
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<PAGE>
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later changes in percentage resulting from changing market values or total
assets of each Fund will not be considered a deviation from policy. No Fund may:
(1) issue senior securities, except that each Fund may borrow money,
including on margin if margin securities are owned and enter into reverse
repurchase agreements in an amount up to 33 1/3% of its total assets
(including the amount of such enumerated senior securities issued but
excluding any liabilities and indebtedness not constituting senior
securities) and except that each Fund may borrow up to an additional 5% of
its total assets for temporary purposes; or pledge its assets other than to
secure such issuances or in connection with hedging transactions, short
sales, when-issued and forward commitment transactions and similar
investment strategies. Each Fund's obligations under reverse repurchase
agreements and the foregoing investment strategies are not treated as
senior securities;
(2) make loans of money or property to any person, except through
loans of portfolio securities, the purchase of fixed income securities or
the acquisition of securities subject to repurchase agreements;
(3) underwrite the securities of other issuers, except to the extent
that in connection with the disposition of portfolio securities or the sale
of its own shares a Fund may be deemed to be an underwriter.
(4) invest for the purpose of exercising control over management of
any company;
(5) purchase real estate or interests therein, including limited
partnerships that invest primarily in real estate equity interests, other
than mortgage-backed securities, publicly traded real estate investment
trusts and similar instruments;
or
(6) purchase or sell commodities or commodity contracts except for
certain bona fide hedging, yield enhancement and risk management purposes
or invest in any oil, gas or mineral interests.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser is authorized on behalf of each Fund to employ brokers to
effect the purchase or sale of portfolio securities with the objective of
obtaining prompt, efficient and reliable execution and clearance of such
transactions at the most favorable price obtainable ("best execution") at
reasonable expense. Transactions in securities other than those for which a
securities exchange is the principal market are generally done through a
principal market maker. However, such transactions may be effected through a
brokerage firm and a commission paid whenever it appears that the broker can
obtain a more favorable overall price. In general, there may be no stated
commission in the case of securities traded on the over-the-counter markets, but
the prices of those securities may include undisclosed commissions or markups.
Options transactions will usually be effected through a broker and a commission
will be charged. Each Fund also expects that securities will be purchased at
times in underwritten offerings where the price includes a fixed amount of
compensation generally referred to as the underwriter's concession or discount.
The Adviser currently serves as Adviser to a number of investment company
clients and may in the future act as adviser to others. Affiliates of the
Adviser act as investment adviser to numerous private accounts. It is the
practice of the Adviser and its affiliates to cause purchase and sale
transactions to be allocated among each Fund and others whose assets they manage
in such manner as it deems equitable. In making such allocations among each Fund
and other client accounts, the main factors considered are the respective
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B-17
<PAGE>
- --------------------------------------------------------------------------------
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held and the opinions of the persons
responsible for managing the portfolios of each Fund and other client accounts.
The policy of each Fund regarding purchases and sales of securities and
options for its portfolio is that primary consideration will be given to
obtaining the most favorable prices and efficient execution of transactions. In
seeking to implement each Fund's policies, the Adviser effects transactions with
those brokers and dealers who the Adviser believes provide the most favorable
prices and are capable of providing efficient executions. If the Adviser
believes such price and execution are obtainable from more than one broker or
dealer, it may give consideration to placing portfolio transactions with those
brokers and dealers who also furnish research and other services to each Fund or
the Adviser of the type described in Section 28(e) of the Securities Exchange
Act of 1934. In doing so, each Fund may also pay higher commission rates than
the lowest available when the Adviser believes it is reasonable to do so in
light of the value of the brokerage and research services provided by the broker
effecting the transaction. Such services may include, but are not limited to,
any one or more of the following: information as to the availability of
securities for purchase or sale: statistical or factual information or opinions
pertaining to investment; wire services; and appraisals or evaluations of
portfolio securities.
For the period from November 1, 1993 (Commencement of Operations) through
December 31, 1993 and for the year ended December 31, 1994, the Adviser paid a
total of $50,314 and $180,768, respectively, in brokage commissions on behalf of
The Gabelli Global Telecommunications Fund.
For the period February 7, 1994 (Commencement of Operations) through
December 31, 1994, the Adviser paid a total of $37,312 in brokerage commissions
on behalf of The Gabelli Global Interactive Couch Potato Fund.
For the period February 3, 1994 (Commencement of Operations) through
December 31, 1994, the Adviser paid a total of $22,853 in brokerage commissions
on behalf of The Gabelli Global Convertible Securities Fund.
The Adviser may also place orders for the purchase or sale of portfolio
securities with Gabelli & Company, Inc. ("Gabelli"), a broker-dealer member of
the National Association of Securities Dealers, Inc. and an affiliate of the
Adviser, when it appears that, as an introducing broker or otherwise, Gabelli
can obtain a price and execution which is at least as favorable as that
obtainable by other qualified brokers. The Adviser may also consider sales of
shares of each Fund and any other registered investment companies managed by the
Adviser and its affiliates by brokers and dealers other than the Distributor as
a factor in its selection of brokers and dealers to execute portfolio
transactions for each Fund.
As required by Rule 17e-1 under the Act, the Board of Directors of each
Fund has adopted "Procedures" which provide that the commissions paid to Gabelli
on stock exchange transactions may not exceed that which would have been charged
by another qualified broker or member firm able to effect the same or a
comparable transaction at an equally favorable price. Rule 17e-1 and the
Procedures contain requirements that the Boards, including independent
Directors, conduct periodic compliance reviews of such brokerage allocations and
review such schedule at least annually for its continuing compliance with the
foregoing standard. The Adviser and Gabelli are also required to furnish reports
and maintain records in connection with such reviews.
For the period from November 1, 1993 (Commencement of Operations) through
December 31, 1993 and for the fiscal year ended December 31, 1994, The Gabelli
Global Telecommunications Fund paid a total of $22,150 and $58,812,
respectively, in brokerage commissions to Gabelli & Company, Inc. These amounts
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B-18
<PAGE>
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represent 44.0% and 32.5%, respectively, of The Gabelli Global
Telecommunications Fund's aggregate brokerage commissions and 61.5% and 47.8% of
the principal amount of all transactions involving the payment of commissions
effected through Gabelli & Company, Inc.
For the period February 7, 1994 (Commencement of Operations) through
December 31, 1994, The Gabelli Global Interactive Couch Potato Fund paid a total
of $5,040 in brokerage commissions to Gabelli & Company, Inc. This amount
represents 8.2% of The Gabelli Global Interactive Couch Potato Fund's aggregate
brokerage commissions and 7.4% of the principal amount of all transactions
involving the payment of commissions effected through Gabelli & Company, Inc.
For the period February 3, 1994 (Commencement of Operations) through
December 31, 1994, The Gabelli Global Convertible Securities Fund paid no
brokerage commissions to Gabelli & Company, Inc.
To obtain the best execution of portfolio trades on the New York Stock
Exchange ("Exchange"), Gabelli controls and monitors the execution of such
transactions on the floor of the Exchange through independent "floor brokers" or
through the Designated Order Turnaround ("DOT") System of the Exchange. Such
transactions are then cleared, confirmed to the Fund for the account of Gabelli,
and settled directly with the Custodian of each Fund by a clearing house member
firm which remits the commission less its clearing charges to Gabelli. Gabelli
may also effect portfolio transactions on behalf of each Fund in the same manner
and pursuant to the same arrangements on other national securities exchanges
which adopt direct access rules similar to those of the New York Stock Exchange.
PURCHASE AND REDEMPTION OF SHARES
Cancellation of purchase orders for shares of any Fund (as, for example,
when checks submitted to purchase shares are returned unpaid) cause a loss to be
incurred when the net asset value of that Fund's shares on the date of
cancellation is less than on the original date of purchase. The investor is
responsible for such loss, and that Fund may reimburse shares from any account
registered in that shareholder's name, or by seeking other redress. If that Fund
is unable to recover any loss to itself, it is the position of the SEC that the
Distributor will be immediately obligated to make that Fund whole.
To minimize expenses, the Fund reserves the right to redeem, upon not less
than 30 days notice, all shares of the Fund in an account (other than an IRA)
which as a result of shareholder redemption has a value below $500 and has
reserved the ability to raise this amount to up to $10,000. However, a
shareholder will be allowed to make additional investments prior to the date
fixed for redemption to avoid liquidation of the account.
DIVIDENDS, DISTRIBUTIONS AND TAXES
General
Each Fund will determine either to distribute or to retain all or part of
any net long-term capital gains in any year for reinvestment. If any such gains
are retained by any Fund, that Fund will be subject to a tax of 34% of such
amount. In that event, each Fund expects that it will designate the retained
amount as undistributed capital gains in a notice to its shareholders, each of
whom (1) will be required to include in income for tax purposes as long-term
capital gains, its share of undistributed amount, (2) will be entitled to credit
its proportionate share of the tax paid by that Fund against its Federal income
tax liability and to claim refunds to the extent the credit exceeds such
liability, and (3) will increase its basis in its shares of that Fund by
- --------------------------------------------------------------------------------
B-19
<PAGE>
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an amount equal to 66% of the amount of undistributed capital gains included in
such shareholder's gross income.
Under the Code, amounts not distributed on a timely basis in accordance
with a calendar year distribution requirement are subject to a nondeductible 4%
excise tax. To avoid the tax, each Fund must distribute during each calendar
year, an amount equal to, at the minimum, the sum of (1) 98% of its ordinary
income (not taking into account any capital gains or losses) for the calendar
year year, (2) 98% of its capital gains in excess of its capital losses for the
twelve-month period ending on October 31 of the calendar year, (unless an
election is made by a fund with a November or December year-end to use the
fund's fiscal year) and (3) all ordinary income and net capital gains for
previous years that were not previously distributed. A distribution will be
treated as paid during the calendar year if it is paid during the calendar year
or declared by a Fund in October, November or December of the year, payable to
shareholders of record on a date during such month and paid by that Fund during
January of the following year. Any such distributions paid during January of the
following year will be deemed to be received on December 31 of the year the
distributions are declared, rather than when the distributions are received.
Gains or losses on the sales of securities by each Fund will be long-term
capital gains or losses if the securities have been held by the Fund for more
than twelve months. Gains or losses on the sale of securities held for twelve
months or less will be short-term capital gains or losses.
Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Code. If so qualified, each Fund will not be subject to
Federal income tax on its net investment income and net short-term capital
gains, if any, realized during any fiscal year in which it distributes such
income and capital gains to its shareholders.
Hedging Transactions
Certain options, futures contracts and options on futures contracts are
"section 1256 contracts". Any gains or losses on section 1256 contracts are
generally considered 60% long-term and 40% short-term capital gains or losses
("60/40"). Also, section 1256 contracts held by each Fund at the end of each
taxable year are "marked-to-market" with the result that unrealized gains or
losses are treated as though they were realized and the resulting gain or loss
is treated as 60/40 gain or loss.
Generally, the hedging transactions undertaken by each Fund may result in
"straddles" for U.S. Federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by each Fund. In addition, losses
realized by each Fund on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which such losses are realized.
Further, each Fund may be required to capitalize, rather than deduct
currently, any interest expense on indebtedness incurred or continued to
purchase or carry any positions that are part of a straddle. Because only a few
regulations implementing the straddle rules have been promulgated, the tax
consequences of hedging transactions to each Fund are not entirely clear.
Each Fund may make one or more of the elections available under the Code
which are applicable to straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections
accelerate the recognition of gains or losses from the affected straddle
positions.
Because application of the straddle rules may affect the character of gains
or losses, defer losses and/or accelerate the recognition of gains or losses
from the affected straddle positions, and require the capitalization of interest
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B-20
<PAGE>
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expense, the amount which must be distributed to shareholders, and which will be
taxed to shareholders as ordinary income or long-term capital gain, may be
increased or decreased substantially as compared to a fund that did not engage
in such heding transactions.
The 30% limitation and the diversification requirements applicable to each
Fund's assets may limit the extent to which each Fund will be able to engage in
transactions in options, futures contracts and options on futures contracts.
Distributions
Distributions of investment company taxable income (which includes taxable
interest income and the excess of net short-term capital gains over long-term
capital losses) are taxable to a U.S. shareholder as ordinary income, whether
paid in cash or shares. Dividends paid by each Fund will qualify for the 70%
deduction for dividends received by corporations to the extent each Fund's
income consists of qualified dividends received from U.S. corporations.
Distributions of net capital gains (which consists of the excess of long-term
capital gains over net short-term capital losses), if any, are taxable as
long-term capital gains, whether paid in cash or in shares, and are not eligible
for the dividends received deduction. Shareholders receiving distributions in
the form of newly issued shares will have a basis in such shares of each Fund
equal to the fair market value of such shares on the distribution date. If the
net asset value of shares is reduced below a shareholder's cost as a result of a
distribution by a Fund, such distribution will be taxable even though it
represents a return of invested capital. The price of shares purchased at this
time may reflect the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will receive a distribution which will nevertheless
be taxable to them.
Sales of Shares
Upon a sale or exchange of his or her shares, a shareholder will realize a
taxable gain or loss depending upon his or her basis in the shares. Such gain or
loss will be treated as a long-term capital gain or loss if the shares have been
held for more than one year. Any loss realized on a sale or exchange will be
disallowed to the extent the shares disposed of are replaced within a period of
61 days beginning 30 days before and ending 30 days after the shares are
disposed of. In such case, the basis of the shares acquired will be adjusted to
reflect the disallowed loss.
Any loss realized by a shareholder on the sale of any Fund's shares held by
the shareholder for six months or less will be greated for tax purposes as a
long-term capital loss to the extent of any distributions of net capital gains
received by the shareholder with respect to such shares.
Backup Withholding
The Corporation may be required to withhold Federal income tax at the rate
of 31% of all taxable distributions payable to shareholders who fail to provide
the Fund or Funds in which they invest with their correct taxpayer
identification number or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
may be credited against a shareholder's Federal income tax liability.
Foreign Withholding Taxes
Income received by each Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
- --------------------------------------------------------------------------------
B-21
<PAGE>
- --------------------------------------------------------------------------------
eliminate such taxes. It is impossible to determine the rate of foreign tax in
advance since the amount of each Fund's assets to be invested in various
countries is not known. Because each Fund may have more than 50% of its total
assets invested in securities of foreign governments or corporations, each Fund
may be entitled to "pass-through" to shareholders the amount of foreign taxes
paid by each Fund. Shareholders are urged to consult their attorneys or tax
advisers regarding specific questions as to Federal, state or local taxes.
The Corporation reserves the right to create and issue a number of series
shares, in which case the shares of each series would participate equally in the
earnings, dividends, and assets of the particular series and would vote
separately to approve management agreements or changes in investment policies,
but shares of all series would vote together in the election or selection of
Directors, principal underwriters and auditors and on any proposed material
amendment to the Corporation's Certificate of Incorporation.
Upon liquidation of the Corporation or any series, shareholders of the
affected series would be entitled to share pro rata in the net assets of their
respective series available for distribution to such shareholders.
DETERMINATION OF NET ASSET VALUE
For purposes of determining each Fund's net asset value per share, readily
marketable portfolio securities listed on the New York Stock Exchange are
valued, except as indicated below, at the last sale price reflected at the close
of the regular trading session of the New York Stock Exchange on the business
day as of which such value is being determined. If there has been no sale on
such day, the securities are valued at the mean of the closing bid and asked
prices on such day. If no bid or asked prices are quoted on such day, then the
security is valued by such method as the Board of Directors shall determine in
good faith to reflect its fair market value. Readily marketable securities not
listed on the New York Stock Exchange but listed on other national securities
exchanges or admitted to trading on the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") National List are valued in like
manner. Portfolio securities traded on more than one national securities
exchange are valued at the last sale price on the business day as of which such
value is being determined as reflected on the tape at the close of the exchange
representing the principal market for such securities.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by the Adviser to
be over-the-counter but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ or, in the case of securities not quoted by NASDAQ, the
National Quotation Bureau or such other comparable sources as the Board of
Directors deems appropriate to reflect their fair value.
United States Government obligations and other debt instruments having
sixty days or less remaining until maturity are stated at amortized cost, which
approximates value. Debt instruments having a greater remaining maturity will be
valued at the highest bid price obtained from a dealer maintaining an active
market in that security or on the basis of prices obtained from a pricing
service approved as reliable by the Board of Directors. All other investment
assets, including restricted and not readily marketable securities, are valued
under procedures established by and under the general supervision and
responsibility of the Board of Directors designed to reflect in good faith the
fair value of such securities.
As indicated in the Prospectus, the net asset value per share of each
Fund's shares will be determined on each day that the New York Stock Exchange is
open for trading. That Exchange annually announces the days on which it will not
- --------------------------------------------------------------------------------
B-22
<PAGE>
- --------------------------------------------------------------------------------
be open for trading; the most recent announcement indicates that it will not be
open on the following days: New Year's Day, President's Birthday, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
However, that Exchange may close on days not included in that announcement.
INVESTMENT PERFORMANCE INFORMATION
Each Fund may furnish data about its investment performance in
advertisements, sales literature and reports to shareholders. "Total return"
represents the annual percentage change in value of $1,000 invested at the
maximum public offering price for the one year period and the life of each Fund
through the most recent calendar quarter, assuming reinvestment of all dividends
and distributions. Each Fund may also furnish total return calculations for
these and other periods, based on investments at various sales charge levels or
net asset value. Any performance data which is based on each Fund's net asset
value per share would be reduced if a sales charge were taken into account.
Quotations of yield will be based on the investment income per share earned
during a particular 30 day period, less expenses accrued during the period ("net
investment income") and will be computed by dividing net investment income by
the maximum offering price per share on the last day of the period, according to
the following formula:
YIELD = 2[ ( A-B + 1 ) ^ 6 - 1]
---
CD
where A = dividends and interest earned during the period, B = expenses accrued
for the period (net of any reimbursements), C = the average daily number of
shares outstanding during the period that were entitled to receive dividends,
and D = the maximum offering price per share on the last day of the period. With
respect to The Gabelli Global Convertible Securities Fund for the 30-day period
ended December 30, 1994, the Fund's yield was -1.37%.
Quotations of total return will reflect only the performance of a
hypothetical investment in any Fund during the particular time period shown.
Each Fund's total return and current yield may vary from time to time depending
on market conditions, the compositions of its portfolio and operating expenses.
These factors and possible differences in the methods used in calculating yield
should be considered when comparing each Fund's current yield to yields
published for other investment companies and other investment vehicles. Total
return and yield should also be considered relative to change in the value of
each Fund's shares and the risks associated with each Fund's investment
objectives and policies. At any time in the future, total returns and yield may
be higher or lower than past total returns and yields and there can be no
assurance that any historical return or yield will continue.
From time to time evaluations of performance are made by independent
sources that may be used in advertisements concerning each Fund. These sources
include: Lipper Analytical Services, Weisenberger Investment Company Service,
Barron's, Business Week, Kiplinger's Personal Finance, Financial World, Forbes,
Fortune, Money, Personal Investor, Sylvia Porter's Personal Finance, Bank Rate
Monitor, Morningstar and The Wall Street Journal.
In connection with communicating its yield or total return to current or
prospective shareholders, each Fund may also compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
other unmanaged indexes which may assume reinvestment of dividends but generally
do not reflect deductions for administrative and management costs.
Quotations of each Fund's total return will represent the average annual
compounded rate of return of a hypothetical investment in each Fund over periods
- --------------------------------------------------------------------------------
B-23
<PAGE>
- --------------------------------------------------------------------------------
of 1, 5, and 10 years (up to the life of each Fund), and are calculated pursuant
to the following formula:
T = [ (ERV/P) ^ 1/n ] - 1
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years, and ERV = the redeemable value at the end
of the period of a $1,000 payment made at the beginning of the period). All
total return figures will reflect the deduction of Fund expenses (net of certain
expenses reimbursed by the Adviser) on an annual basis, and will assume that all
dividends and distributions are reinvested and will deduct the maximum sales
charge, if any is imposed. For the period November 1, 1993 (Commencement of
Operations) through December 31, 1994, The Gabelli Global Telecommunications
Fund's cumulative total return was -0.8%. For the period from February 3, 1994
(Commencement of Operations) through December 31, 1994, The Gabelli Global
Convertible Securities Fund's cumulative total return was 0.90%. For the period
from February 7, 1994 (Commencement of Operations) through December 31, 1994,
The Gabelli Global Interactive Couch Potato (TM)(C) Fund's cumulative total
return was 2.5%. Assuming deduction of the maximum 4.5% sales charges the total
return for the periods noted herein would have been -5.23%, -3.64% and -2.11%,
respectively.
- --------------------------------------------------------------------------------
B-24
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
(1) Financial information included in Part A, the Prospectus:
Table of Fees and Expenses
Financial Highlights
(2) Financial Statements included in Part B, the Statement of Additional
Information:
Gabelli Global Series Funds, Inc.:
The Gabelli Telecommunications Fund (GGTF)
The Gabelli Global Convertible Securities Fund (GGCSF)
The Gabelli Global Interactive Couch PotatoTM(C) Fund, Inc. (GGICPF)
-- Portfolio of Investments*
December 31, 1994 (all)
-- Statement of Assets and Liabilities*
December 31, 1994 (all)
-- Statements of Changes in Net Assets for the year ended December 31,
1994 and for the period November 1, 1993 (Commencement of Operations)
through December 31, 1994 (GGTF); February 3, 1994 (Commencement of
Operations) through December 31, 1994 (GGCSF); February 7, 1994
(Commencement of Operations) through December 31, 1994 (GGICPF).*
-- Notes to Financial Statements (all)*
-- Financial Highlights for the year ended December 31, 1994 and for
the period November 1, 1993 (Commencement of Operations) through
December 31, 1994 (GGTF); February 3, 1994 (Commencement of Operations)
through December 31, 1994 (GGCSF); February 7, 1994 (Commencement of
Operations) through December 31, 1994 (GGICPF)*
-- Reports of Grant Thornton LLP Independent Accountants dated
February 5, 1995 (all)*
The Gabelli Global Entertainment and Media Fund
The Gabelli Global Growth Fund
--None
Report of Independent Accountants
Statement of Assets and Liabilities
Notes to Financial Statements
(b) Exhibits:
(1) Articles of Incorporation, as amended, of the Registrant (Previously filed
as an exhibit to Post- Effective Amendment No. 2 to Registration Statement
No. 33-66262 on January 5, 1994.)
(2) Form of By-Laws of the Registrant (Previously filed as an exhibit to
Post-Effective Amendment No. 2 to Registration Statement No. 33-66262 on
January 5, 1994.)
(3) Not Applicable
(4) (a) Specimen Share Certificate for The Gabelli Global Interactive Couch
Potato(TM)(C) Fund (Previously filed as an exhibit to Post-Effective
Amendment No. 2 to Registration Statement No. 33-66262 on January 5, 1994.)
- --------------------------------------------------------------------------------
C-1
<PAGE>
- --------------------------------------------------------------------------------
(b) Specimen Share Certificate for The Gabelli Convertible Securities Fund
(Previously filed as an exhibit to Post-Effective Amendment No. 2 to
Registration Statement No. 33-66262 on January 5, 1994.)
(5) (a) Investment Advisory Agreement with Gabelli Funds, Inc. ("Gabelli
Funds" or the "Adviser") relating to The Gabelli Global
Telecommunications Fund, The Gabelli Global Entertainment and Media Fund
and The Gabelli Growth Fund (Previously filed as an exhibit to
Post-Effective Amendment No. 2 to Registration Statement No. 33-66262 on
January 5, 1994.)
(b) Investment Advisory Agreement with Gabelli Funds, Inc. ("Gabelli Funds"
or the "Adviser") for each of The Gabelli Global Interactive Couch
Potato Fund and The Gabelli Global Convertible Securities Fund
(Previously filed as an exhibit to Post-Effective Amendment No. 2 to
Registration Statement No. 33-66262 on January 5, 1994.)
(6) (a) Distribution Agreement relating to The Gabelli Global Tele-
communications Fund, The Gabelli Global Entertainment and Media Fund
and The Gabelli Growth Fund (Previously filed as an exhibit to
Post-Effective Amendment No. 2 to Registration Statement No. 33-66262 on
January 5, 1994.)
(b) Distribution Agreement relating to The Global Interactive Couch Potato
Fund and The Gabelli Global Convertible Securities Fund (Previously
filed as an exhibit to Post-Effective Amendment No. 2 to Registration
Statement No. 33-66262 on January 5, 1994.)
(7) Not Applicable
(8) Custodian Agreement between the Registrant and State Street Bank and Trust
Company (Previously filed as an exhibit to Post-Effective Amendment No. 2 to
Registration Statement No. 33-66262 on January 5, 1994.)
(9) Transfer Agency Agreement between the Registrant and State Street Bank and
Trust Company (Previously filed as an exhibit to Post-Effective Amendment
No. 2 to Registration Statement No. 33-66262 on January 5, 1994.)
(10)Opinion and consent of counsel for the Registrant. (Previously filed as an
Exhibit to Post-Effective Amendment No. 2 to the Registration Statement No.
33-66262 on January 5, 1994.)
(11)(a) Consent of Independent Accountants.
(12) Not Applicable
(13)(a) Agreements with Initial Shareholder relating to The Gabelli Global
Telecommunications Fund, The Gabelli Global Entertainment and Media Fund
and The Gabelli Growth Fund (Previously filed as an exhibit to
Post-Effective Amendment No. 2 to Registration Statement No. 33-66262 on
January 5, 1994.)
(b) Agreements with Initial Shareholder relating to The Gabelli Global
Interactive Couch Potato Fund and The Gabelli Global Convertible
Securities Fund (Previously filed as an exhibit to Post-Effective
Amendment No. 2 to Registration Statement No. 33-66262 on January 5,
1994.)
(14) Model IRA Plan (Previously filed as an exhibit to Post-Effective Amendment
No. 2 to Registration Statement No. 33-66262 on January 5, 1994.)
(15)(a) Distribution Plan relating to The Gabelli Global Telecommunications
Fund, The Gabelli Global Entertainment and Media Fund and The Gabelli
Global Growth Fund (Previously filed as an exhibit to Post-Effective
Amendment No. 2 to Registration Statement No. 33-66262 on January 5,
1994.)
- --------------------------------------------------------------------------------
C-2
<PAGE>
- --------------------------------------------------------------------------------
(b) Distribution Plan relating to The Gabelli Interactive Couch
Potato(TM)(C) Fund and The Gabelli Global Convertible Securities Fund
(Previously filed as an exhibit to Post-Effective Amendment No. 2 to
Registration Statement No. 33-66262 on January 5, 1994.)
(16) Schedule of Performance Computation.
(17) Financial Data Schedule
- ----------
* Previously filed with the Fund's Annual Report for the year ended December
31, 1994 filed on March 10, 1995.
Item 25. Persons Controlled by or Under Common Control with Registrant.
Insofar as the following have substantially identical boards of directors or
trustees they may be deemed with Registrant to be under common control: The
Gabelli ABC Fund, The Gabelli Asset Fund, Gabelli Gold Fund, Inc., The Gabelli
Growth Fund, The Gabelli Value Fund Inc., The Gabelli Small Cap Growth Fund,
Gabelli Equity Income Fund, The Westwood Funds and The Gabelli U.S. Treasury
Money Market Fund.
Item 26. Number of Holders of Securities.
As of April 10, 1995 the approximate number of record holders were:
(1) (2)
Number of
Record
Title of Class Holders
- ---------------- ---------
The Gabelli Global Telecommunications Fund Stock,
par value $.001 per share .................................... 26,470
The Gabelli Global Interactive Couch Potato Fund Stock,
par value $.001 per share ...................................... 7,834
The Gabelli Global Convertible Securities Fund Stock,
par value $.001 per share ...................................... 4,153
The Gabelli Global Entertainment and Media Fund Stock,
par value $.001 per share ...................................... 2
The Gabelli Global Growth Fund Stock,
par value $.001 per share ...................................... 2
Item 27. Indemnification.
The basic effect of the respective indemnification provisions of the
Registrant's By-Laws, the Investment Advisory Agreement with Gabelli Funds, Inc.
for The Gabelli Convertible Securities Fund, and Section 2-418 of the Maryland
General Corporation Law is to indemnify each officer and director of both the
Registrant and Gabelli Funds, Inc. to the full extent permitted under the
General Laws of the State of Maryland, except that such indemnity shall not
protect any such person against any liability to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant and the investment advisor and distributor
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
- --------------------------------------------------------------------------------
C-3
<PAGE>
- --------------------------------------------------------------------------------
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in and
the principal underwriter in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person or the distributor in connection with the shares
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Advisor.
See "Management of the Funds" in the Prospectus and "Directors and Officers" in
the Statement of Additional Information as well as the Adviser's current Form
ADV which is incorporated herein by reference.
Item 29. Principal Underwriters.
(a) The Distributor, Gabelli & Company, Inc., is also the principal underwriter
for The Gabelli ABC Fund, The Gabelli Growth Fund, The Gabelli Asset Fund,
The Gabelli Value Fund, The Gabelli Small Cap Growth Fund, Gabelli Equity
Income Fund, Gabelli Gold Fund, Inc., The Westwood Funds and The Gabelli
U.S. Treasury Money Market Fund.
(b) The information required with respect to the directors and executive
officers of the Distributor is set forth under the heading "Directors and
Officers" in the Statement of Additional Information as well as in Gabelli
& Company, Inc.'s current Form BD, which are each incorporated herein by
reference.
(c) Not applicable. The Registrant's only principal underwriter is an
affiliated person of an affiliated person of the Registrant.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules thereunder will be
maintained at the offices of the Administrator, Furman Selz Incorporated, at the
offices of the Fund's Custodian, State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts, at the offices of the Fund's Transfer
Agent and Dividend Disbursing Agent, State Street Bank & Trust Company, c/o
Boston Financial Data Services, Two Heritage Drive, North Quincy, MA 02171 or at
the offices of the Adviser, Gabelli Funds, Inc., One Corporate Center, Rye, New
York 10580-1434.
Item 31. Management Services.
The Registrant is not a party to any management-related service contract.
Item 32. Undertakings.
(c) Registrant hereby undertakes to furnish to each person to whom a prospectus
is delivered a copy of Registrant's latest Annual Report to Shareholders
upon request and without charge.
- --------------------------------------------------------------------------------
C-4
<PAGE>
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment No. 5 to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Rye, and State of New York on the 28th day of April, 1995.
THE GABELLI GLOBAL SERIES FUNDS, INC.
--------------------------------------
By: Bruce N. Alpert
Title: Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 5
to the Registration Statement has been signed below by the following in the
capacity and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President (Principal Executive Officer), April , 1995
- ---------------------- and Director
Mario J. Gabelli
- ---------------------- Vice-President and Treasurer April , 1995
Bruce N. Alpert
* Director April , 1995
- ----------------------
Felix J. Christiana
* Director April , 1995
- ----------------------
Anthony J. Colavita
* Director April , 1995
- ----------------------
Anthonie C. van Ekris
* Director April , 1995
- ----------------------
Karl Otto Pohl
* Director April , 1995
- ----------------------
John D. Gabelli
* Director April , 1995
- ----------------------
Werner Roeder, M.D.
*By: ----------------------
Bruce N. Alpert
Attorney-in-Fact
</TABLE>
- --------------------------------------------------------------------------------
C-5
<PAGE>
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Amendment No. 5
to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Rye, and State of New York on the 28th
day of April, 1995.
THE GABELLI GLOBAL SERIES FUNDS, INC.
/s/ BRUCE N. ALPERT
------------------------------------
By: Bruce N. Alpert
Title: Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ MARIO J. GABELLI President (Principal Executive Officer), April , 1995
-------------------------- and Director
Mario J. Gabelli
/s/ BRUCE N. ALPERT Vice-President and Treasurer April , 1995
- --------------------------
Bruce N. Alpert
/s/ FELIX J. CHRISTIANA
- --------------------------- Director April , 1995
Felix J. Christiana
/s/ ANTHONY J. COLAVITA
- --------------------------- Director April , 1995
Anthony J. Colavita
/s/ ANTHONIE C. VAN EKRIS
-------------------------- Director April , 1995
Anthonie C. van Ekris
/s/ KARL OTTO POHL
-------------------------- Director April , 1995
Karl Otto Pohl
/s/ JOHN D. GABELLI
--------------------------- Director April , 1995
John D. Gabelli
/s/ WERNER ROEDER, M.D.
- ---------------------------- Director April , 1995
Werner Roeder, M.D.
</TABLE>
*By:
----------------------------
Bruce N. Alpert
Attorney-in-Fact
- --------------------------------------------------------------------------------
C-6
Exhibit 2(g)
LETTERHEAD OF GRANT THORNTON
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
Shareholder and Board of Directors
Gabelli Global Series Funds, Inc.
We have audited the accompanying statements of assets and liabilities of The
Gabelli Global Entertainment and Media Fund and The Gabelli Global Growth Fund
(constituting two of the five funds in Gabelli Global Series Funds, Inc.), as of
December 31, 1994. These financial statements are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Gabelli Global
Entertainment and Media Fund and The Gabelli Global Growth Fund (constituting
two of the five funds in Gabelli Global Series Funds, Inc.) in conformity with
generally accepted accounting principles.
Grant Thornton LLP
New York, New York
February 5, 1995
<PAGE>
Gabelli Global Series Funds, Inc.
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1994
The Gabelli
Global The Gabelli
Entertainment Global Growth
and Media Fund Fund
-------------- -------------
ASSETS
Cash $ 1,500 $ 1,500
Deferred organization expenses
(Note A) 35,760 35,760
------- -------
37,260 37,760
LIABILITIES
Organization costs payable (Note A) 35,760 35,760
------- -------
NET ASSETS
Applicable to 150 and 150 shares of
common stock issued and outstanding,
respectively, for The Gabelli Global
Entertainment and Media Fund and The
Gabelli Global Growth Fund, $0.001
par value, 1,000,000,000 shares
authorized 1,500 1,500
------- ------
Net asset value and redemption price
per share $10.00 $10.00
====== ======
The accompanying note is an integral part of these statements.
<PAGE>
Gabelli Global Series Funds, Inc.
NOTE TO FINANCIAL STATEMENTS
December 31, 1994
NOTE A -- ORGANIZATION
Gabelli Global Series Funds, Inc. (the "Corporation") was incorporated in
Maryland on July 16, 1993. The Corporation is an open-end management
investment company currently consisting of five nondiversified funds: The
Gabelli Global Telecommunications Fund, The Gabelli Global Entertainment and
Media Fund, The Gabelli Growth Fund, The Gabelli Global Interactive Couch
Potato Fund and The Gabelli Global Convertible Securities Fund. The Gabelli
Global Telecommunications Fund, The Gabelli Global Interactive Couch Potato
Fund and The Gabelli Global Convertible Securities Fund commenced operations
on November 1, 1993, February 3, 1994 and February 7, 1994, respectively, and
are not included in these financial statements. The Funds included in these
financial statements have had no operations other than the sale to Gabelli
Funds, Inc. (the "Adviser") of 100 shares for $1,000 of The Gabelli Global
Entertainment and Media Fund and 100 shares for $1,000 of The Gabelli Global
Growth Fund in September 1993 and the sale to Gabelli & Co., Inc. of 50
shares for $500 of The Gabelli Global Entertainment and Media Fund and 50
shares for $500 of The Gabelli Global Growth Fund in January 1994. Costs
incurred and to be incurred in connection with the Funds' organization and
registration will be deferred and amortized by the Funds over the period of
benefit, not to exceed 60 months from the date each Fund commences
operations. The Adviser has agreed that if any of the initial shares in
Gabelli Global Series Funds, Inc. are redeemed by any holder thereof prior to
amortization of the organization costs, the proceeds of such redemption will
be reduced by any unamortized organizational costs in the same proportion as
the number of initial shares being redeemed bears to the number of initial
shares outstanding at the time of redemption.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Gabelli Global Telecommunications Fund,
The Gabelli Global Entertainment and Media Fund,
The Gabelli Growth Fund,
The Gabelli Interactive Couch Potato Fund,
The Gabelli Global Convertible Securities Fund,
each a Series of Gabelli Global Series Funds, Inc.
We hereby consent to the incorporation in the Statement of Additional
Information constituting part of this Amendment No. 6 to the Registration
Statement on Form N-1A of our reports dated February 5, 1995, accompanying the
financial statements of the above named Funds.
We also consent to the use of our name under the heading "Independent
Auditors" in the prospectus.
/S/ Grant Thornton LLP
- -----------------------------
Grant Thornton LLP
New York, NY
April 28, 1995
Exhibit 16
Gabelli Global Interactive Couch Potato
Incep
T=[365/367(1,025/1000)^1/2]-1
T=[1.116207951(1.025)^1/2]-1
T=.028 or 28%
Gabelli Global Convertible Securities Fund
Incep
T=[365/331(1,009/1,000)^1/2]-1
T=[1.102719033(1.009)^1/2]-1
T=.009 or 9%
Gabelli Global Telecommunications Fund
1 yr
T=[(ERV/P)^1/n]-1
T=[365/365(963/1,000)^1/n]-1
T=[(.963)^1/1]-1
T=-.037 or -3.7%
Incep
T=[365/425(992/1,000)^1/2]-1
T=[.858823529(.992)^1/2}-1
<PAGE>
T=-.007 or -0.7%
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<NAME> THE GABELLI GLOBAL SERIES FUNDS INC
<SERIES>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
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</TABLE>
