As filed with the Securities and Exchange Commission on April 26, 1996.
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. 6 |X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 7 |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 Offices)
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:
James E. McKee, 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):
|_| immediately upon filing pursuant to paragraph (b)
|X| on May 1, 1996 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, 1995 was
filed on February 28, 1996.
================================================================================
<PAGE>
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> <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 Objectives and Policies; Associated
Risk Factors; General Information
Item 5. Management of the Fund................................ Management of the Funds; Investment Objectives 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
Location in Statement
Part B of Additional Information
----- -------------------------
Item 10. Cover................................................. 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.
<PAGE>
Gabelli Global Series Funds, Inc.
One Corporate Center
Rye, New York 10580-1434
Telephone: 1-800-GABELLI (1-800-422-3554)
================================================================================
PROSPECTUS May 1, 1996
Gabelli Global Series Funds, Inc., a Maryland corporation (the "Corporation") is
currently comprised of five series:
The Gabelli Global Telecommunications Fund
(the "Global Telecommunications Fund")
The Gabelli Global Interactive Couch Potato(R) Fund
(the "Global Interactive Couch Potato(R) Fund")
The Gabelli Global Entertainment and Media Fund
(the "Global Entertainment and Media Fund")
The Gabelli Global Convertible Securities Fund
(the "Global Convertible Securities Fund")
The Gabelli Global Growth Fund
(the "Global Growth Fund")
(collectively, the "Funds")
Each Fund is open-end and non-diversified. The Global Telecommunications Fund,
the Global Entertainment and Media Fund, the Global Growth Fund and the Global
Interactive Couch Potato(R) Fund seek 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 Fund 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. The minimum initial investment for each Fund is $1,000 except for the
Gabelli Global Telecommunications Fund which is $25,000. When assets of a Fund
reach $100 million or 10,000 shareholders the minimum will increase to $25,000.
However, the initial minimum of the funds acquired through intermediary
organizations maintaining omnibus accounts with the Fund may establish their own
minimum investment criteria. 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 fluctuations 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.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<PAGE>
Because many convertible securities are not considered 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, 1996 (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(R) Fund Securities Fund Fund
-------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage
of offering price) ...................................... None None None None
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 (a)........................................ 1.00% 1.00% 1.00% 1.00%
12b-1 Expenses (b)......................................... .25% .25% .25% .25%
Other Expenses (c)......................................... .75% 1.22% 1.16% 1.25%
------ ------ ------ ------
Total Operating Expenses for each fund................. 1.75% 2.47% 2.41% 2.50%
</TABLE>
Example:
You would pay the following expenses on a $1,000 investment assuming a 5% annual
return;
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Gabelli Global Telecommunications Fund .......................... $18 $57 $ 99 $226
Gabelli Global Interactive Couch Potato(R)Fund .................. $25 $80 $140 $318
Gabelli Global Convertible Securities Fund ...................... $25 $78 $137 $311
Gabelli Global Entertainment and Media Fund and Gabelli Global
Growth Fund ................................................... $26 $81 $142 $322
</TABLE>
- --------------------------------------------------------------------------------
The amounts listed in 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%.
- --------------------------------------------------------------------------------
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) Subject to potential reduction as a result of the Adviser's expense
reimbursement obligations.
(b) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted by the rules of the National
Association of Securities Dealers.
(c) Such expenses include custodian and transfer agency fees and other
customary Fund expenses.
2
<PAGE>
Management's Discussion and Analysis of each Fund's performance during the
fiscal year ended December 31, 1995 is included in each Fund's Annual Report to
Shareholders dated December 31, 1995. Each 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 The Gabelli
Global Global The Gabelli
Convertible Interactive Couch Global
Securities Fund(c) Potato(R) Fund(d) Telecommunications Fund(e)
------------------ ----------------- --------------------------
1995 1994 1995 1994 1995 1994 1993
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Performance:
Net asset value, beginning of period .. $ 9.93 $ 10.00 $ 10.25 $ 10.00 $ 9.73 $ 10.20 $ 10.00
------- ------- ------- ------- ------- ------- -------
Net investment income ................. 0.39 0.16 (0.008) (0.01) 0.064 0.065 0.01
Net realized and unrealized gain (loss)
on securities ....................... 0.86 (0.07) 1.841 0.26 1.508 (0.440) 0.29
------- ------- ------- ------- ------- ------- -------
Total from investment operations ...... 1.25 0.09 1.833 0.25 1.572 (0.375) 0.30
------- ------- ------- ------- ------- ------- -------
Less Distributions:
Distributions from net investment
income .............................. (0.39) (0.16) (0.363) -- (0.064) (0.065) (0.01)
Distributions from realized gain on
investments ......................... -- -- -- -- (0.118) (0.030) (0.09)
Total distributions ................... -- -- -- -- (0.182) (0.095) (0.10)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ........ $ 10.79 $ 9.93 $ 11.72 $ 10.25 $ 11.12 $ 9.73 $ 10.20
======= ======= ======= ======= ======= ======= =======
Total Return(a) ....................... 12.62% 0.90% 17.88% 2.50% 16.2% (3.7)% 3.0%
Ratios to average net assets/
supplemental data:
Net assets, end of period
(in thousands) ...................... $15,742 $15,574 $31,439 $24,831 $122,845 $137,731 $45,290
Ratio of operating expenses to
average net assets .................. 2.41% 2.49%(b) 2.47% 2.47%(b) 1.75% 1.80% 2.54%(b)
Ratio of net investment income to
average net assets .................. 2.90% 2.80%(b) (0.07)% (0.13)%(b) 0.53% 0.74% 1.28%(b)
Portfolio turnover rate ............... 152% 329% 33% 14% 24% 14% 0%
</TABLE>
- ----------
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(b) Annualized.
(c) Fund commenced operations on February 3, 1994.
(d) Fund commenced operations on February 7, 1994.
(e) Fund commenced operations on November 1, 1993.
3
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Global Telecommunications Fund, Global Entertainment and Media Fund, Global
Growth Fund and Global Interactive Couch Potato(R) Fund each seek 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(R) 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(R)
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, is primarily responsible for the day-to-day
management of
4
<PAGE>
the Global Telecommunications Fund. He is 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(R) Fund
Under normal market conditions, the Global Interactive Couch Potato(R) 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(R)
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(R) 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, is primarily responsible for the day-to-day
management of the Global Interactive Couch Potato(R) Fund. He is assisted by
associate Portfolio Manager Marc J. Gabelli. 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
5
<PAGE>
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 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, is 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.
6
<PAGE>
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
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
7
<PAGE>
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 mortgage-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 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 to Prospectus -- 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
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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"
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
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<PAGE>
overall market, rapid obsolescence of entertain ment 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
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 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-
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<PAGE>
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 Technique.
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 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
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<PAGE>
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.
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, 1996 acts as investment
adviser to the following funds with aggregate assets in excess of $4.3 billion:
Net Assets
3/31/96
-------------
Open-end funds: (in millions)
The Gabelli Asset Fund $1,130
The Gabelli Growth Fund 581
Gabelli Gold Fund, Inc. 20
The Gabelli Value Fund Inc. 512
The Gabelli Small Cap Growth Fund 229
The Gabelli Equity Income Fund 57
The Gabelli U.S. Treasury Money Market Fund 274
The Gabelli ABC Fund 25
The Gabelli Global Telecommunications Fund 124
The Gabelli Global Interactive Couch Potato(R) Fund 37
The Gabelli Global Convertible Securities Fund 16
The Gabelli International Growth Fund, Inc. 4
The Gabelli Capital Asset Fund 35
Closed-end funds:
The Gabelli Convertible Securities Fund, Inc. 91
The Gabelli Equity Trust Inc. 1,054
The Gabelli Global Multimedia Trust Inc. 94
Gabelli & Company, Inc., the Distributor of each open-end Fund's respective
shares, is an indirect majority owned subsidiary of the Adviser.
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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, 1996, GAMCO had aggregate assets in
excess of $5.1 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 $50 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,
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 Contracts, 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 may on occasion give advice or take action with respect
to other clients that differs from the actions taken with respect to the Funds.
The Adviser has entered into an Administration Contract with Furman Selz LLC
(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 unilaterally to terminate the arrangement on not less than 60 days'
notice.
The Administrator has its principal office at 230 Park Avenue, New York, New
York 10169.
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
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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. 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.
Each Plan has been implemented by written agreements between the Corporation on
behalf of each Fund and/or 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.
During the fiscal year ended December 31, 1995 the Gabelli Global
Telecommunications Fund, the Gabelli Interactive Couch Potato Fund and the
Gabelli Global Convertible Securities Fund paid $34,239, $2,514 and $670,
respectively, in brokerage commissions to Gabelli & Company.
PURCHASE OF SHARES
As an investment vehicle, shares of each Fund are offered without a sales load,
for individuals, institutions, fiduciaries and retirement plans.
The minimum initial investment for each Fund is $1,000 except for the Global
Telecommunications Fund which is $25,000. When assets of a Fund reach $100
million or 10,000 shareholders the minimum will increase to $25,000. However,
the initial minimum of the Funds acquired through intermediary organizations
maintaining omnibus accounts with the Fund may establish their own minimum
investment criteria. There is no mini-
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<PAGE>
mum 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 select 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.
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 supervision
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.
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<PAGE>
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:
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
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<PAGE>
(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
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
17
<PAGE>
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
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, theFunds might be liable for losses due to fraudulent
instructions.
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
18
<PAGE>
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
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
19
<PAGE>
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
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 year ended December 1995, the Portfolio
turnover rates for The Gabelli Global Telecommunications Fund, The Gabelli
Global Convertible Securities Fund and The Gabelli Global Interactive Couch
Potato(R) Fund were 24%, 152% and 33%, 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 Convertible Securities Fund was attributable
to several investments held for a short term period during the year.
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
20
<PAGE>
return and yield calculations for other periods and/or 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.
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).
Upon request, Gabelli & Company, Inc. will provide without charge, a paper copy
of this Prospectus to investors or their representatives who received this
Prospectus in an electronic format.
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 charac-
21
<PAGE>
teristics 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.
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
22
<PAGE>
that earnings and asset protection will remain relatively well maintained in the
foreseeable 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. 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.
23
<PAGE>
TABLE OF CONTENTS
Page
----
Table of Fees and Expenses ................. 2
Financial Highlights ....................... 3
Investment Objective and Policies........... 4
Associated Risk Factors .................... 9
Management of the Funds .................... 11
Distribution Plan .......................... 13
Purchase of Shares ......................... 14
Redemption of Shares ....................... 16
Sales Charges .............................. 17
Retirement Plans ........................... 18
Dividends, Distributions and Taxes ......... 19
General Information ........................ 19
Appendix.................................... 21
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Gabelli
Global
Series
Funds, Inc.
PROSPECTUS
May 1, 1995
o The Gabelli Global
Telecommunications Fund
o The Gabelli Global
Interactive Couch Potato(TM)(C)
Fund
o The Gabelli Global
Convertible Securities Fund
o The Gabelli Global Entertainment
and Media Fund
o The Gabelli Global Growth Fund
GABELLI FUNDS, INC.
Investment Adviser
GABELLI & COMPANY, INC.
Distributor
<PAGE>
GABELLI GLOBAL SERIES FUND
One Corporate Center
Rye, New York 10580-1434
Telephone 1-800-GABELLI (1-800-422-3554)
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1996
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(R) Fund (the "Global Interactive Couch
Potato(R) 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, 1996, 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-20
Dividends, Distributions and Taxes...................... B-20
Determination of Net Asset Value........................ B-22
Investment Performance Information...................... B-23
Counsel and Independent Accountants .................... B-24
Financial Statements.................................... B-26
<PAGE>
The following information supplements that in the Prospectus
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 based 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.
B-2
<PAGE>
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 Investor Services, Inc. ("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
B-3
<PAGE>
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 respective 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(R)
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
Investment Bank. The governmental members, or "stockholders,"
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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 offer or 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
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 securi-
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ties 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
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
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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 are 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. 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
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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 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.
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Loans of Portfolio Securities
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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 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.
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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
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 neces-
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sary 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
LLC (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."
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 from year to year so
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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 years ended December 31, 1994 and
December 31, 1995, respectively, the Adviser received advisory fees of $52,536,
$1,233,454 and $1,285,648, respectively from The Gabelli Global
Telecommunications Fund.
During the period February 7, 1994 (Commencement of Operations) through
December 31, 1994 and for the year ended December 31, 1995, the Adviser received
advisory fees of $174,399 and $289,830, respectively, from The Gabelli Global
Interactive Couch Potato(R) Fund.
During the period February 3, 1994 (Commencement of Operations) through
December 31, 1994, and for the year ended December 31, 1995, the Adviser
received advisory fees of $86,233 and $170,164, respectively, 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 from year to year, 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, the Global Entertainment and Media Fund, the
Global
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Growth Fund, the Global Interactive Couch Potato(R) Fund and the Global
Convertible Securities Fund.
During the fiscal year ended December 31, 1995, The Gabelli Global
Telecommunications Fund paid distribution expenses under the Distribution Plan
of $228,840. Of this amount, $25,029 on printing, postage and stationery,
$40,488 on overhead support expenses and $163,323 on salaries of personnel of
the Distributor.
During the year ended December 31, 1995, The Gabelli Global Interactive
Couch Potato Fund paid distribution expenses under the Distribution Plan of
$253,590. Of this amount, $106,442 was spent on advertising, $34,100 on
printing, postage and stationery, $26,087 on overhead support expenses and
$86,961 on salaries of personnel of the Distributor.
During the year ended December 31, 1995, The Gabelli Global Convertible
Securities Fund paid distribution expenses under the Distribution Plan of
$87,663. Of this amount, $10,293 was spent on advertising, $23,823 on printing,
postage and stationery, $11,625 on overhead support expenses and $41,922 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
Name, Position with Fund and Address Adviser or Administrator.
- ------------------------------------ -----------------------------------------
Mario J. Gabelli* Chairman, President, Chief Executive
President, Director and Officer and a Director of Gabelli Funds,
Chief Investment Officer Inc., the Adviser and the indirect
One Corporate Center parent of Gabelli & Company, Inc., the
Rye, New York 10580 Distributor; Chief Investment Officer of
Age: 53 GAMCO Investors, Inc.; President and
Chairman of the Gabelli Equity Trust
Inc.; President, Chief Investment
Officer and Director of Gabelli Equity
Series Funds, Inc., Gabelli Investor
Funds, Inc., The Gabelli Capital Series
Funds, Inc., The Gabelli Value 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 and
The Gabelli Global Governments Fund;
Director of the Morgan Group, Inc. and
Spinnaken Industries, Inc.
Felix J. Christiana Formerly Senior Vice President of Dry
Director Dock Savings Bank. Director of Gabelli
45 Pondfield Parkway Equity Series Fund, Inc., The Gabelli
Mt. Vernon, New York 10552 Value Fund Inc., The Gabelli Convertible
Age: 71 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.
B-13
<PAGE>
Principal Occupations During Last Five
Years; Affiliations with the
Name, Position with Fund and Address Adviser or Administrator.
- ------------------------------------ -----------------------------------------
Anthony J. Colavita President and Attorney at Law in the law
Director firm of Anthony J. Colavita, P.C. since
575 White Plains Road 1961; Director of The Gabelli Value Fund
Eastchester, New York 10709 Inc., Gabelli Investor Funds, Inc., The
Age: 60 Gabelli Convertible Securities Fund,
Inc., The Gabelli Capital Series Funds,
Inc., Gabelli Gold Fund, Inc., The
Gabelli Global Governments Fund and
Gabelli Equity Series Funds, Inc.;
Trustee of the Gabelli Asset Fund, The
Gabelli Money Market Funds, The Gabelli
Growth Fund 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: 51 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: 65 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 of Gabelli Investor Funds,
Rye, New York 10580 Inc., The Gabelli Capital Series Funds,
Age: 55 Inc., The Gabelli Global Governments
Fund, Gabelli International Growth Fund,
Inc. and Gabelli Gold Fund, Inc.
B-14
<PAGE>
Principal Occupations During Last Five
Years; Affiliations with the
Name, Position with Fund and Address Adviser or 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 Monaco 1990). Director of Stahel Hardmeyer A.Z.
Age: 61 (through present); Trustee of The
Gabelli Asset Fund, The Gabelli Growth
Fund and The Gabelli Money Market Funds.
Director of The Gabelli Convertible
Securities Fund, Inc., Gabelli 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 Officer of the investment
Treasurer advisory division of the Adviser, Vice
One Corporate Center President and Treasurer of The Gabelli
Rye, New York 10580 Equity Trust Inc., and The Gabelli
Age: 44 Global Multimedia Trust Inc. Vice
President and Treasurer of The Gabelli
Convertible Securities Fund, Inc.;
Gabelli Equity Series Funds, Inc.;
Gabelli Gold Fund, Inc.; Gabelli Capital
Series Funds; Gabelli Investor Funds,
Inc.; The Gabelli Money Market Funds;
The Gabelli Value Fund Inc.; President
and Treasurer of The Gabelli Asset Fund
and The Gabelli Growth Fund. Vice
President of The Westwood Funds and
Manager of Teton Advisers LLC.
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: 38
James E. McKee Vice President and General Counsel of
Secretary GAMCO Investors, Inc. since 1993 and of
One Corporate Center Gabelli Funds, Inc. since August 1995;
Rye, New York 10580 Secretary of all Funds advised by
Age: 32 Gabelli Funds, Inc. and Teton Advisers
LLC since August 1995. Branch Chief with
the U.S. Securities and Exchange
Commission in New York 1992 through
1993. Staff attorney with the U.S.
Securities and Exchange Commission in
New York from 1989 through 1992.
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, 1995 in excess of $60,000.
B-15
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Person, Aggregate Compensa- Pension or Retirement Estimated Annual Ben- Total Compensation
Position tion from Registrant Benefits Accrued as efits upon Retirement from Registrant and
for Fiscal Year Part of Fund Expenses Fund Complex Paid
to Directors
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mario J. Gabelli $ 0 N/A N/A $ 0
President, Director and
Chief Investment Officer
Felix J. Christiana
Director $ 3,500 $ 0 N/A $71,500 (7)
Anthony J. Colavita
Director $ 3,500 $ 0 N/A $65,753 (9)
John D. Gabelli
Director $ 0 $ 0 N/A $ 0
Karl Otto Pohl
Director $ 3,500 $ 0 N/A $80,253 (10)
Werner Roeder, M.D.
Director $ 8,000 $ 0 N/A $11,253 (6)
Anthonie C. van Ekris
Director $21,000 $ 0 N/A $45,253 (8)
</TABLE>
- ----------
* Represents the total compensation paid to such persons during the calendar
year ending December 31, 1995 (and, with respect to the Fund Complex). The
parenthetical number represents the number of investment companies (including
the Corporation) from which such person receives compensation that are
considered part of the same fund complex as the Corporation, because, among
other things, they have a common investment adviser.
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,
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 331 1/43% 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;
B-16
<PAGE>
(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
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
B-17
<PAGE>
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.
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.
The following chart shows brokerage commissions paid by the Adviser on
behalf of each Fund, the amount and percentage of commissions paid by each Fund
to Gabelli & Company, Inc. and the percentage of all transactions involving the
payment of commissions to Gabelli & Company, Inc.
The Gabelli Global Telecommunications Fund
<TABLE>
<CAPTION>
November 1, 1993
(Commencement of
Operations) through Fiscal year ended Fiscal year ended
December 31, 1993 December 31, 1994 December 31, 1995
----------------- ----------------- ----------------
<S> <C> <C> <C>
Total brokerage commissions $50,314 $10,768 $105,853
paid by the Adviser on behalf
of the Fund
Total brokerage commissions $22,150 $58,812 $34,089
paid by the Fund to Gabelli
& Company, Inc.
% of aggregate brokerage 44.0% 32.5% 32.2%
commissions
% of transactions effected 61.5% 47.8% 36.9%
through Gabelli & Company, Inc.
</TABLE>
B-18
<PAGE>
The Gabelli Global Interactive Couch Potato Fund
February 7, 1994
(Commencement of
Operations) through Fiscal year ended
December 31, 1994 December 31, 1995
----------------- -----------------
Total brokerage commissions $22,853 $42,378
paid by the Adviser on behalf
of the Fund
Total brokerage commissions $5,040 $2,480
paid by the Fund to Gabelli
& Company, Inc.
% of aggregate brokerage 8.2% 8.0%
commissions
% of transactions effected 7.4% 6.3%
through Gabelli & Company, Inc.
The Gabelli Global Convertible Securities Fund
February 3, 1994
(Commencement of
Operations) through Fiscal year ended
December 31, 1994 December 31, 1995
----------------- -----------------
Total brokerage commissions $22,853 $42,378
paid by the Adviser on behalf
of the Fund
Total brokerage commissions -- $6.70
paid by the Fund to Gabelli
& Company, Inc.
% of aggregate brokerage -- 2.0%
commissions
% of transactions effected -- 1.5%
through 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.
B-19
<PAGE>
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 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, (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.
B-20
<PAGE>
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
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 hedging 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.
B-21
<PAGE>
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 greater 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
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
B-22
<PAGE>
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
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)/(CD)+1))^6-1]
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.
B-23
<PAGE>
With respect to The Gabelli Global Convertible Securities Fund for the 30-day
period ended December 30, 1995, the Fund's yield was 1.57%.
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
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 year ended December 31, 1995, The Gabelli
Global Telecommunications Fund's cumulative total return was 16.2%. For the year
ended December 31, 1995, The Gabelli Global Convertible Securities Fund's
cumulative total return was 12.6%. For the year ended December 31, 1995, The
Gabelli Global Interactive Couch Potato(R) Fund's cumulative total return was
17.9%. Assuming deduction of the maximum 4.5% sales charges the total return for
the periods noted herein would have been 10.9%, 7.6% and 12.6%, respectively.
The average annual total returns for each Fund since inception were 6.8%, 6.9%
and 10.5% respectively.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York
10022, serves as counsel to the Fund.
Grant Thornton LLP, 7 Hanover Square, New York, New York 10004-2616, has
been appointed independent accountants for the Fund.
B-24
<PAGE>
SHARES OF BENEFICIAL INTEREST
As of April 12, 1996, the Officers and Directors of the Fund as a group
owned less than 1% of the outstanding shares of the Fund.
As of April 12, 1996, the following persons were 5% or greater shareholders
of the Funds:
Fund Percentage of Shares
Shareholder Outstanding
------------ ---------------------
The Gabelli Global Interactive Couch Potato(R) Fund/
Jupiter & Co. 10.76%(1)
c/o Investors Bank & Trust
P.O. Box 1537
Boston, MA 02205-1537
The Gabelli Global Telecommunications Fund/
Charles Schwab & Co., Inc.(2) 6.54%(1)
Reinvest Account
101 Montgomery Street
San Francisco, CA 94104-4122
- ----------
(1) Represents shares owned of record only.
(2) Charles Schwab & Co., Inc. disclaims beneficial ownership.
B-25
<PAGE>
The Gabelli Global Telecommunications Fund
Portfolio of Investments -- December 31, 1995
================================================================================
Market
Shares Cost Value
------ ---- ------
COMMON STOCKS -- 89.97%
ALTERNATIVE TELECOMMUNICATIONS
SERVICE PROVIDERS -- 1.96%
500 Bouygues Group................. $ 58,707 $ 50,234
14,000 GST Telecommunications, Inc.+.. 83,819 98,000
15,000 Intelcom Group +............... 211,500 185,625
1,000 Intermedia Communications
of Florida, Inc.+........... 11,540 17,500
2,000 Mannesmann AG.................. 642,296 634,910
25,000 MFS Communications
Company, Inc.+............... 666,196 1,331,250
2,000 Veba AG........................ 81,392 85,396
----------- -----------
1,755,450 2,402,915
----------- -----------
AVIATION: PARTS AND ACCESSORIES -- 1.08%
27,000 General Motors Corporation
Cl. H........................ 1,043,162 1,326,375
----------- -----------
CABLE -- 11.11%
55,000 Adelphia Communications
Corporation Cl. A+.......... 619,225 385,000
38,000 Bell Cablemedia plc ADR+....... 643,915 608,000
25,000 Cablevision Systems Corporation
Cl. A+....................... 1,301,259 1,356,250
65,000 Century Communications
Corporation Cl. A+........... 565,505 520,000
135,000 Comcast Corporation Cl. A...... 2,122,173 2,379,375
45,000 Comcast U.K. Cable Partners
Limited+..................... 675,000 562,500
10,000 General Cable Corporation
plc ADR+..................... 146,775 150,000
54,000 International Cable
Tel Incorporated+............ 854,194 1,323,000
20,000 NYNEX CableComms
Group plc ADR+............... 436,200 347,500
100,000 Tele-Communications, Inc.
Cl. A+....................... 1,641,812 1,987,500
31,250 Tele-Communications, Inc. /
Liberty Media Group Cl. A+... 681,358 839,844
3,000 Telewest Communications plc
ADR+......................... 79,875 72,375
90,000 United International
Holdings Inc. Cl. A+......... 1,368,219 1,327,500
90,000 US WEST Media Group, Inc.+..... 1,548,866 1,710,000
6,000 Videotron Holdings plc ADR+.... 99,125 76,500
----------- -----------
12,783,501 13,645,344
----------- -----------
ENTERTAINMENT -- 1.06%
22,000 Lodgenet Entertainment
Corporation+................ 165,087 209,000
7,000 News Corporation Limited
ADR.......................... 163,100 149,625
25,000 Time Warner Inc................ 941,875 946,875
----------- -----------
1,270,062 1,305,500
----------- -----------
LONG DISTANCE TELEPHONE COMPANIES-- 8.56%
38,000 AT&T Corp...................... 1,897,480 2,460,500
25,000 Call-Net Enterprises Inc.+..... 236,025 215,201
25,000 Cam-Net Communications
Network Inc.+................ 139,153 20,313
165 DDI Corporation................ $ 973,198 $ 1,278,946
5,000 Fonorola Inc.+................. 21,782 36,630
156,000 General Communication Inc.
Cl. A+....................... 712,225 799,500
3,000 Kokusai Denshin................ 271,659 261,603
32,000 LCI International Inc.+........ 285,612 656,000
30,000 MCI Communications
Corporation.................. 711,275 783,750
60,000 Petersburg Long Distance Inc.+. 375,000 285,000
10,000 Portugal Telecom S.A. ADR+..... 188,035 190,000
55,000 Sprint Corporation............. 1,782,250 2,193,125
38,000 WorldCom Inc.+................. 710,808 1,339,500
----------- -----------
8,304,502 10,520,068
----------- -----------
PUBLISHING -- 0.74%
30,000 Media General, Inc. Cl.A....... 727,950 911,250
----------- -----------
REGIONAL/LOCAL TELEPHONE SERVICES-- 19.14%
34,000 ALLTEL Corporation............. 956,525 1,003,000
24,000 Ameritech Corporation.......... 997,075 1,416,000
50,000 Atlantic Tele-Network Inc.+.... 475,432 540,625
24,000 Bell Atlantic Corporation...... 1,292,326 1,605,000
40,000 BellSouth Corporation.......... 1,187,988 1,740,000
9,000 Bruncor, Inc................... 160,442 145,055
45,000 Cincinnati Bell Inc............ 777,125 1,563,750
70,000 C-TEC Corporation Cl. B+....... 1,963,004 2,135,000
1,000 First Pacific Company Ltd.
Spons. ADR................... 35,875 55,614
10,000 Frontier Corporation........... 215,262 300,000
48,000 GTE Corporation................ 1,656,775 2,112,000
15,000 Island Telephone Company
Limited ..................... 282,503 236,264
50,000 Lincoln Telecommunications
Company...................... 780,220 1,056,250
19,000 Maritime Telegraph and
Telephone Company Limited.... 330,491 276,648
10,000 NewTel Enterprises Limited..... 177,454 151,099
60,000 NYNEX Corporation.............. 2,222,287 3,240,000
12,000 Pacific Telecom, Inc........... 357,168 360,000
45,000 Pacific Telesis Group Inc...... 1,437,697 1,513,125
3,000 Peoples Telephone
Company Inc.+................ 19,000 6,938
10,000 Quebec-Telephone............... 153,660 152,930
25,000 SBC Communications, Inc........ 995,807 1,437,500
23,000 Southern New England
Telecommunications
Corporation.................. 747,100 914,250
10,000 Telus Corporation.............. 129,540 117,216
40,000 US WEST Communications
Group....................... 953,607 1,430,000
----------- -----------
18,304,363 23,508,264
----------- -----------
TELECOMMUNICATIONS (OTHER) -- 0.18%
2,500 Great Nordic Stores............ 215,022 199,802
2,000 United Communication
Industry.................... 18,341 25,566
----------- -----------
233,363 225,368
----------- -----------
The accompanying notes are an integral part of the financial statements.
B-26
<PAGE>
The Gabelli Global Telecommunications Fund
Portfolio of Investments -- December 31, 1995 (Continued)
================================================================================
Market
Shares Cost Value
------ ---- ------
TELEPHONE EQUIPMENT -- 1.57%
80,000 Champion Technology
Holdings ADR................. $ 133,658 $ 41,904
4,400 Ericsson (L.M.) Telephone
Company ADR.................. 60,972 85,800
2,500 Motorola, Inc.................. 113,969 142,500
25,000 Northern Telecom Limited....... 861,000 1,075,000
1,000 Phillips Electronics N.V....... 30,050 35,875
2,000 Thyssen AG+.................... 367,787 363,978
77,000 Time Engineering Berhad........ 252,516 178,858
----------- -----------
1,819,952 1,923,915
----------- -----------
TELEPHONE NETWORKS -- 26.56%
90,000 BC TELECOM Inc................. 1,621,079 1,648,352
45,000 BCE Inc........................ 1,540,812 1,552,500
3,000 BHI Corporation................ 48,250 47,250
20,000 British Telecommunications
plc ADR...................... 1,382,750 1,130,000
175,000 Cable & Wireless plc ADR....... 3,830,513 3,696,875
20,000 Compania Telefonos
Chile S.A. ADR............... 1,575,797 1,657,500
30,000 CP Pokphand Spons. ADR......... 245,000 300,699
505,100 CPT Telefonica del Peru
Cl. B........................ 705,236 1,070,439
15,000 Hong Kong Telecommunications
Ltd. ADR..................... 294,183 266,250
1,000 Hungarian Telephone &
Cable Corporation+........... 14,882 10,625
22 Japan Telecom Co. Ltd.......... 639,206 422,052
152 Nippon Telegraph & Telephone
Corporation.................. 1,093,863 1,229,725
5,000 Nippon Telegraph & Telephone
Corporation ADR.............. 215,013 205,000
50,000 Nordictel Holdings AB+......... 460,320 510,587
1,500,000 Orient Telecom & Technology
Holdings Limited+............ 908,905 446,140
800 Pakistan Telecommunications
GDR(a)+...................... 98,165 69,600
28,500 Philippine Long Distance
Telephone Company............ 1,994,488 1,542,563
2,000 PT Indonesia Satellite ADR..... 68,225 73,000
8,000 PT Telekomunikasi Indonesia.... 155,960 204,000
38,000 Royal PTT Nederland
NV ADR(a).................... 1,103,064 1,377,500
10,000 Singapore Telecommunications
Limited...................... 22,883 22,207
35,000 STET SpA - Societa Financiaria
Telfonica SpA ADR............ 820,629 990,605
8,000 Tele Danmark A/S............... 216,693 193,477
8,000 Tele Danmark A/S ADR........... 215,400 221,000
20,000 Telecom Argentina Stet - France
Telecom S.A. ADR............. 942,348 952,500
1,000 Telecom Asia ADR+.............. 21,870 28,750
35,500 Telecom Corporation of
New Zealand Ltd. ADR........ 1,715,462 2,462,813
400,000 Telecom Italia SpA+............ 516,740 622,362
44,000 Telecomunicacoes
Brasileiras (Telebras)
S.A. Spons. ADR.............. 1,339,035 2,084,500
3,000,000 Telecomunicacoes de
Rio de Janeiro+.............. $ 203,464 $ 194,444
900,000 Telecomunicacoes de
Sao Paulo SA (Telesp)........ 135,609 130,093
4,000,000 Telecommunications of
Jamaica...................... 406,750 350,480
45,000 Telefonica de
Argentina S.A. ADR........... 1,249,274 1,226,250
60,000 Telefonica de
Espana ADR................... 2,454,474 2,512,500
50,000 Telefonos De Mexico S.A.
Cl. L ADR.................... 1,945,500 1,593,750
190,000 Telekom Malaysia
Berhad....................... 1,457,048 1,481,102
5,800 Thai Telephone &
Telecom GDR+................. 100,462 94,598
----------- -----------
31,759,352 32,622,088
----------- -----------
WIRELESS COMMUNICATIONS -- 18.01%
40,000 ABC Communications
Holdings Ltd................. 20,301 7,241
110,000 AirTouch Communications Inc.+.. 2,534,362 3,107,500
1,000 American Mobile Satellite
Corporation+................. 18,925 30,625
78,000 American Paging,
Incorporated+............... 584,463 497,250
14,200 Associated Group, Inc. Cl. A+.. 308,905 268,025
16,000 Associated Group, Inc. Cl. B+.. 339,440 304,000
14,000 BCE Mobile Communications
Inc.+....................... 461,860 473,077
11,000 Cellular Communications, Inc.
Cl. A+....................... 501,665 547,250
20,000 Cellular Communications
International Inc.+.......... 332,622 855,000
1,000 Cellular Communications of
Puerto Rico, Inc.+........... 21,915 27,750
110,000 Centennial Cellular Corp. Cl. A+ 1,806,170 1,883,750
20,000 Century Telephone
Enterprises, Inc............. 553,750 635,000
1,000 Commnet Cellular Inc.+......... 17,353 28,875
40,000 COMSAT Corporation............. 1,045,313 745,000
5,000 Globalstar Telecommunications
Limited+..................... 72,765 188,750
55,000 Grupo Iusacell S.A.
ADR Ser. D+.................. 712,426 440,000
12,000 Himachal(a)+................... 111,600 75,000
24,000 Jasmine International(a)....... 117,135 122,906
5,300 Matrix Telecommuni-
cations Ltd.+................ 8,992 9,057
1,000 Metrocall, Inc.+............... 16,915 19,126
15,000 Mobile Telecommunication
Technologies Corp.+.......... 263,355 320,625
12,154 NEXTEL Communications, Inc.
Cl. A+....................... 158,252 179,272
7,500 PanAmSat Corporation+.......... 128,700 165,469
8,000 Pittencrieff Communica-
tions, Inc.+................. 41,180 30,500
35,000 PriCellular Corporation+....... 257,875 455,000
B-27
<PAGE>
The Gabelli Global Telecommunications Fund
Portfolio of Investments -- December 31, 1995 (Continued)
================================================================================
Market
Shares Cost Value
------ ---- ------
40,000 Rogers Cantel Mobile
Communications Cl. B+....... $ 947,036 $ 1,060,000
11,000 Securicor Group plc............ 193,311 286,440
224,000 Technology Resources
Industries+.................. 837,129 661,417
1,300,000 Telecom Italia Mobile SpA+..... 1,437,598 2,288,819
17,000 Telecommunications
International, Inc.+......... 289,625 386,750
4,000 Teleglobe Inc.................. 60,486 55,311
80,000 Telephone and Data
Systems, Inc................. 3,460,243 3,160,000
22,000 Total Access Communica-
tions plc+................... 138,875 143,000
3,000 United States Cellular
Corporation+................. 90,900 101,250
1,500 Vanguard Cellular Systems, Inc.
Cl. A+....................... 29,040 30,375
72,000 Vodafone Group plc ADR......... 2,019,769 2,538,000
------------ ------------
19,940,251 22,127,410
------------ ------------
TOTAL
COMMON STOCKS................ 97,941,908 110,518,497
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 2.67%
CABLE -- 1.40%
10,000 Cablevision Systems Corporation
8.50% Cv. Pfd. Seri. I....... 250,000 272,500
20,000 Tele-Communications, Inc.
Cv. Pfd. Ser. E.............. 1,420,021 1,445,000
------------ ------------
1,670,021 1,717,500
------------ ------------
LONG DISTANCE TELEPHONE COMPANIES -- 0.70%
10,000 Philippine Long Distance
Telephone Company
7.00% Cv. Pfd. Ser. III...... 500,000 520,625
9,000 Sprint Corporation
8.25% Cv. Pfd................ 286,875 342,000
------------ ------------
786,875 862,625
------------ ------------
WIRELESS COMMUNICATIONS -- 0.57%
10,000 LCI International, Inc.
5.00% Cv. Pfd................ 287,942 535,000
5,000 Mobile Telecommunication
Technologies Corp.
$2.25 Cv. Pfd.(a)............ 141,250 160,000
------------ ------------
429,192 695,000
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS............. 2,886,088 3,275,125
------------ ------------
CONVERTIBLE CORPORATE BONDS -- 1.54%
TELEPHONE NETWORKS -- 0.79%
$1,000,000 Telekom Malaysia
Sub. Deb. Cv.
4.00%, 10/03/04(a)............ 1,000,482 973,750
WIRELESS COMMUNICATIONS -- 0.75%
------------ ------------
300,000,000(b)Softe SA Unsub. Deb. Cv.
4.25%, 07/30/98.............. 196,074 207,874
Principal
Amount Market
or Shares Cost Value
--------- ---- ------
250,000 Technology Resources
Industries Sub. Deb. Cv.
2.75%, 11/28/04(a)........... $ 250,000 $ 278,125
500,000 Tele 2000 Sub. Deb. Cv.
9.75%, 04/14/97(a)........... 500,000 427,500
------------ ------------
946,074 913,499
------------ ------------
TOTAL CONVERTIBLE
CORPORATE BONDS.............. 1,946,556 1,887,249
------------ ------------
PREFERRED STOCKS -- 0.06%
TELEPHONE EQUIPMENT -- 0.06%
2,000 Nokia Group AB Preference...... 76,675 77,750
------------ ------------
TOTAL PREFERRED
STOCKS....................... 76,675 77,750
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- .4.93%
$6,070,000 U.S. Treasury Bills,
4.66% to 5.30%
Due 01/04/96 to 01/25/96..... 6,063,069 6,063,069
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................. 6,063,069 6,063,069
------------ ------------
TOTAL
INVESTMENTS-- 99.17% $108,914,296* 21,821,690
------------ ------------
Cash and Other Assets, in
excess of Liabilities - 0.83% 1,023,009
------------
NET ASSETS -- 100.00%
(11,046,944 Shares outstanding) $122,844,699
============
Net Asset Value And
Redemption Price Per Share.... $ 11.12
============
- ----------
+ -- Non-income producing security
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
(a) -- Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At December 31, 1995, Rule 144A securities
amounted to $3,484,381 or 2.8% of net assets.
(b) -- Principal amount denoted in Italian Lira.
* For Federal income tax purposes:
Aggregate cost.......................... $108,914,296
============
Gross unrealized appreciation................... $ 17,583,703
Gross unrealized depreciation................... (4,676,309)
------------
Net unrealized appreciation................... $ 12,907,394
============
The accompanying notes are an integral part of the financial statements.
B-28
<PAGE>
The Gabelli Global Telecommunications Fund
Statement of Assets and Liabilities
December 31, 1995
================================================================================
Assets:
Investments in securities, at value
(Cost $108,914,296) ................................... $ 121,821,690
Cash .................................................... 11,774
Receivable for investments sold ......................... 1,400,149
Receivable for Fund shares sold ......................... 8,212
Dividends receivable .................................... 329,130
Accrued interest receivable ............................. 26,077
Deferred organizational expenses ........................ 52,791
-------------
Total assets .......................................... 123,649,823
-------------
Liabilities:
Payable for investments purchased ....................... 361,633
Payable to Advisor ...................................... 102,955
Dividend payable ........................................ 79,333
Payable for distribution fees ........................... 49,646
Payable for Fund shares redeemed ........................ 3,054
Other accrued expenses .................................. 208,503
-------------
Total liabilities ..................................... 805,124
-------------
Net assets (applicable to 11,046,944
shares outstanding) ................................... $ 122,844,699
=============
Net asset value and redemption
price per share ..................................... $ 11.12
=============
Net Assets Consist of:
Capital Stock, at par value ............................. $ 11,047
Additional paid in capital .............................. 110,356,351
Distributions in excess of net realized gains ........... (418,537)
Distributions in excess of net investment
income ................................................ (11,694)
Net unrealized appreciation on investment
and foreign currency transactions ..................... 12,907,532
-------------
Net assets ............................................ $ 122,844,699
=============
Statement of Operations
For The Year Ended December 31, 1995
================================================================================
Investment Income:
Dividends (Net of foreign tax of $175,055) .............. $ 2,530,031
Interest ................................................ 409,676
-------------
Total income .......................................... 2,939,707
-------------
Expenses:
Investment advisory fee ................................. 1,285,648
Transfer and shareholder servicing agent ................ 426,110
Distribution expenses ................................... 321,538
Printing and mailing .................................... 53,693
Custodian fees and expenses ............................. 52,626
Legal and audit fees .................................... 44,400
Registration fees ....................................... 32,530
Amortization of organization expenses ................... 11,399
Directors' fees and expenses ............................ 5,833
Miscellaneous ........................................... 19,261
-------------
Total expenses ........................................ 2,253,038
-------------
Investment income - net ................................. 686,669
-------------
Net Realized and Unrealized Gain
on Investments:
Net realized gain on investments ........................ 914,207
Net change in unrealized appreciation ................... 17,336,566
-------------
Net gain on investments ............................... 18,250,773
-------------
Net increase in net assets resulting from
operations .............................................. $ 18,937,442
=============
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Year Year
Ended Ended
December 31, 1995 December 31, 1994
----------------- -----------------
Increase in Net Assets:
<S> <C> <C>
Investment income - net .............................................. $ 686,669 $ 910,229
Net realized gain on investments ..................................... 914,207 782,413
Change in unrealized appreciation (depreciation)-- net ............... 17,336,566 (5,822,573)
------------- -------------
Net increase (decrease) in net assets resulting from operations .... 18,937,442 (4,129,931)
------------- -------------
Distributions from net investment income ............................. (696,292) (912,300)
Distributions from net realized gains ................................ (1,283,788) (421,173)
------------- -------------
(1,980,080) (1,333,473)
------------- -------------
Share transactions-- net ............................................. (31,843,478) 97,904,548
------------- -------------
Net increase (decrease) in net assets .............................. (14,886,116) 92,441,144
Net Assets:
Beginning of period .................................................. 137,730,815 45,289,671
------------- -------------
End of period ........................................................ $ 122,844,699 $ 137,730,815
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-29
<PAGE>
The Gabelli Global Telecommunications Fund
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies. The primary investment objective of The
Gabelli Global Telecommunications Fund (the "Fund") is capital appreciation. The
Fund is a series of Gabelli Global Series Funds, Inc. (the "Corporation"),
incorporated in Maryland on July 16, 1993. The Fund is a no-load, open-end,
non-diversified management investment company and one of five separately managed
portfolios of the Corporation. The Fund commenced investment operations on
November 1, 1993. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund.
Security Valuation. Portfolio securities listed or traded on the New York or
American Stock Exchanges, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") or traded on foreign exchanges are
valued at the last sale price on that exchange (if there were no sales that day,
the security is valued at the average of the bid and asked prices). All other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest average of the bid and asked prices. When
market quotations are not readily available, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Corporation's Directors. Short-term debt
securities with remaining maturities of 60 days or less are valued at amortized
cost, unless the Directors determine such does not reflect the securities' fair
value, in which case these securities will be valued at their fair value as
determined by the Directors. Options are valued at the last sale price on the
exchange on which they are listed, unless no sales of such options have taken
place that day, in which case they will be valued at the mean between their
closing bid and asked prices.
Foreign Currency Transactions. The books and records of the Fund are maintained
in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities
are recorded at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
recorded at the exchange rate prevailing on the respective date of
such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Forward Foreign Currency Contracts. The Fund may hold currencies to meet
settlement requirements for foreign securities and may engage in currency
exchange transactions to hedge against changes in exchange rates.
Forward foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded by the Fund as an
unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
currency contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts.
B-30
<PAGE>
The Gabelli Global Telecommunications Fund
Notes to Financial Statements (Continued)
================================================================================
At December 31, 1995, the Fund had purchased the following forward foreign
currency contract:
Foreign
Currency Settlement Unrealized
Amount Date Value Gain
-------- ---------- ---------- ----------
28,860 Singapore Dollar 1/2/96 $ 20,410 $ 7
Security Transactions and Investment Income. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates), with
realized gain and loss on investments determined by using specific
identification as the cost method. Interest income (including amortization of
premium and discount) is recorded as earned. Dividend income and dividend and
capital gain distributions to shareholders are recorded on the ex-dividend date.
Federal Income Taxes. The Fund has qualified and intends to continue to qualify
as a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986 and distribute all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging to 30%. Such withholding
taxes may be reduced or eliminated under the terms of applicable U.S. income tax
treaties, and the Fund intends to undertake any procedural steps required to
claim the benefits of such treaties. If the value of more than 50% of the Fund's
total assets at the close of any taxable year consists of stocks or securities
of non-U.S. corporations, the Fund is permitted and may elect to treat any
non-U.S. taxes paid by it as paid by its shareholders.
Net investment income and realized gains differ for financial statement and tax
purposes primarily because of the mark to market provisions on certain
securities. As a result, the Fund made a taxable distribution of realized gains
which was less than the realized gains recorded for financial statement
purposes.
2. Capital Stock Transactions. The Articles of Incorporation, dated July 16,
1993, permit the Fund to issue 200,000,000 shares (par value $0.001).
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1995 December 31, 1994
----------------- -----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold .............................................. 2,039,537 $ 21,055,961 12,248,890 $ 123,216,487
Shares issued upon reinvestment of dividends ............. 170,930 1,900,751 131,277 1,277,326
Shares redeemed .......................................... (5,321,535) (54,800,190) (2,663,406) (26,589,265)
---------- ----------- ---------- -----------
Net increase (decrease) ................................ (3,111,068) $(31,843,478) 9,716,761 $ 97,904,548
========== ============ ========= =============
</TABLE>
3. Purchases and Sales of Securities. Purchases and sales of securities for the
year ended December 31, 1995, other than U.S. government obligations and
short-term securities, aggregated $28,968,852 and $57,551,354, respectively.
Repurchase Agreements. The Fund may enter into repurchase agreements with
government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with other brokers or dealers that
meet the credit guidelines established by the Directors. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least
B-31
<PAGE>
The Gabelli Global Telecommunications Fund
Notes to Financial Statements (Continued)
================================================================================
equal to 100% of the dollar amount invested by the Fund in each agreement, and
the Fund will make payment for such securities only upon physical delivery or
upon evidence of book entry transfer, of the collateral to the account of the
custodian. To the extent that any repurchase transaction exceeds one business
day, the value of the collateral is marked-to-market on a daily basis to
maintain the adequacy of the collateral. If the seller defaults and the value of
the collateral declines, or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund may be
delayed or limited.
4. Investment Advisory Contract. The Fund employs Gabelli Funds, Inc. (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management, and to pay the compensation of all officers and
Directors of the Fund who are affiliated with the Advisor. As compensation for
the services rendered and related expenses borne by the Advisor, the Fund pays
the Advisor a fee, computed and accrued daily and payable monthly, equal to
1.00% per annum of the Fund's average daily net assets. The Advisor is obligated
to reimburse the Fund in the event the Fund's expenses exceed the most
restrictive expense ratio limitation imposed by any state. No such reimbursement
was required during 1995.
5. Organization Expenses. The organization expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months. The Advisor has
agreed that in the event that any of the initial 10,000 shares it acquired on
September 30, 1993 are redeemed during the period of amortization of the Fund's
organization expenses, the redemption proceeds will be reduced by any such
unamortized organization expenses 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.
6. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and
Rule 12b-1 thereunder. For the year ended December 31, 1995, the Fund has
incurred distribution costs of $321,538 or 0.25% of average net assets, the
annual limitation under the Plan, payable to Gabelli & Company, Inc., an
affiliate of the Advisor. The Board of Directors has approved that distribution
costs incurred by Gabelli & Company, Inc., totaling $476,487, which are in
excess of the 0.25% limitation, may be recovered from the Fund in future
periods, subject to such limitation.
7. Transactions with Affiliates. The Fund paid brokerage commissions during the
year ended December 31, 1995 of $34,239 to Gabelli & Company, Inc. and its
affiliates.
B-32
<PAGE>
The Gabelli Global Telecommunications Fund
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
November 1, 1993
Year Ended Year Ended (commencement of operations)
December 31, 1995 December 31, 1994 through December 31, 1993
----------------- ----------------- -------------------------
Operating Performance:
<S> <C> <C> <C>
Net asset value, beginning of period .................... $ 9.73 $ 10.20 $ 10.00
-------- -------- -------
Net investment income ................................... 0.064 0.065 0.01
Net realized and unrealized gain (loss) on securities ... 1.508 (0.440) 0.29
-------- -------- -------
Total from investment operations ........................ 1.572 (0.375) 0.30
-------- -------- -------
Less Distributions:
Distributions from net investment income ................ (0.064) (0.065) (0.01)
Distributions from realized gain on investments ......... (0.118) (0.030) (0.09)
-------- -------- -------
Total Distributions ..................................... (0.182) (0.095) (0.10)
-------- -------- -------
Net asset value, end of period .......................... $ 11.12 $ 9.73 $ 10.20
======== ======== =======
Total Return (not reflecting sales load)(a) ............. 16.2% (3.7)% 3.0%
Ratios to average net assets/supplemental data:
Net assets, end of period (in thousands) ................ $122,845 $137,731 $45,290
Ratio of operating expenses to average net assets ....... 1.75% 1.80% 2.54%(b)
Ratio of net investment income to average net assets .... 0.53% 0.74% 1.28%(b)
Portfolio turnover rate ................................. 24% 14% 0%
</TABLE>
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(b) Annualized.
- --------------------------------------------------------------------------------
Top Ten Holdings
December 31, 1995
-----------------
Tele-Communications, Inc. Vodafone Group plc
Cable & Wireless plc. Sprint Corporation
NYNEX Corporation Telefonica de Espana
Telephone & Data Systems, Inc. Telecom Corp. of New Zealand
AirTouch Communications Inc. AT&T Corp.
- --------------------------------------------------------------------------------
B-33
<PAGE>
The Gabelli Global Telecommunications Fund
Report of Grant Thornton LLP, Independent Auditors
================================================================================
Shareholders and Board of Directors
The Gabelli Global Telecommunications Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of The Gabelli Global Telecommunications Fund (one
of the series constituting Gabelli Global Series Funds, Inc.), as of December
31, 1995, and the related statements of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the two years in the period then
ended and for the period from November 1, 1993 (commencement of operations)
through December 31, 1993. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Gabelli Global Telecommunications Fund of Gabelli Global Series Funds, Inc. at
December 31, 1995, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated above, in
conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
-------------------------------
New York, New York
February 16, 1996
B-34
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments -- December 31, 1995
================================================================================
Market
Shares Cost Value
------ ---- ------
COMMON STOCKS -- 98.53%
COPYRIGHT/CREATIVITY COMPANIES -- 66.52%
ADVERTISING -- 0.04%
100 Euro RSCG Worldwide, S.A ................ $ 9,563 $ 8,146
100 Publicis ................................ 6,985 5,886
---------- ----------
16,548 14,032
---------- ----------
BROADCASTING -- 18.20%
21,500 Ackerley Communications,
Inc.+ ................................... 136,762 327,875
4,000 BHC Communications, Inc. ................
Cl. A+ .................................. 305,375 378,000
1,000 British Sky Broadcasting
Group ADR+ .............................. 24,425 37,625
5,000 Can West Global
Communications Corp. .................... 85,600 90,659
5,000 Capital Cities/ABC Inc. ................. 375,417 616,875
2,500 Carlton Communications plc
ADR ..................................... 72,625 75,937
1,000 Central European Media
Enterprises Ltd.+ ....................... 14,125 20,500
2,640 CEP Communications ...................... 240,367 218,297
1,440 CEP Communications
Warrants Exp: 12/1/97 ................... 4,359 4,680
6,030 Chris-Craft Industries, Inc.+ ........... 209,337 260,798
33,000 Citicasters Inc.+ ....................... 326,598 779,625
1,000 Clear Channel
Communications, Inc.+ ................... 28,244 44,125
500 Emmis Broadcasting
Corporation Cl. A+ ...................... 10,489 15,500
300 Europe 1 Communication .................. 80,245 60,489
500 Evergreen Media Corporation
Cl. A+ .................................. 10,736 16,000
500 EZ Communications, Inc. ................. 7,911 9,000
1,500 Granada Group plc ....................... 15,242 14,996
9,000 Grupo Radio Centro, S.A
de CV ................................... 93,813 66,375
500 Heftel Broadcasting
Corporation Cl. A+ ...................... 6,500 8,750
2,000 Heritage Media Corporation
Cl. A+ .................................. 34,725 51,250
500 Infinity Broadcasting
Corporation Cl. A+ ...................... 13,895 18,625
500 Jacor Communications, Inc.+ ............. 6,958 8,750
300 LaGardere Groupe ........................ 5,519 5,499
1,500 LIN Television Corporation+ ............. 26,657 44,625
200 Metropole TV M6 S.A ..................... $ 17,604 $ 16,782
3,000 Multi-Market Radio, Inc. Cl. A+ ......... 28,875 30,750
2,000 New World Communications
Group, Inc.+ ............................ 23,675 35,000
1,100 Nippon Television Broadcasting .......... 287,828 294,158
12,000 Osborn Communications
Corporation+ ............................ 90,375 102,000
15,000 Outlet Communications, Inc. .............
Cl. A ................................... 152,426 708,750
800 Paxson Communications Corp. ............. 10,540 12,200
5,000 Publishing & Broadcasting Ltd. .......... 15,250 17,423
625 SAGA Communications, Inc. ...............
Cl. A+ .................................. 9,712 10,156
1,200 Scandinavian Broadcasting
System SA+ .............................. 27,161 26,250
2,500 Scottish Television plc ................. 17,800 18,348
500 SFX Broadcasting, Inc.+ ................. 11,270 15,125
4,000 Silver King Communica-
tions, Inc.+ ............................ 41,540 139,000
22,500 Sistem Televisyen Malaysia
Bhd ..................................... 75,448 81,053
1,000 Telemundo Group Inc. Cl. A+ ............. 16,290 14,125
50,000 Television Broadcasting Ltd. ............ 192,049 178,133
1,000 Television Francaise 1 .................. 101,298 106,925
8,000 Tokyo Broadcasting System ............... 134,279 131,770
30,000 United International Holdings
Inc. Cl. A+ ............................. 448,934 442,500
10,000 Westinghouse Electric Corp. ............. 164,000 165,000
---------- ----------
4,002,278 5,720,303
---------- ----------
CABLE TV -- 7.23%
8,500 BET Holdings, Inc.+ ..................... 139,975 194,438
20,000 Cogeco Cable Ltd. ....................... 118,268 106,227
30,000 Flextech plc+ ........................... 178,765 219,480
10,395 Gaylord Entertainment
Company ................................. 235,716 288,461
40,000 Home Shopping Network, Inc.+ ............ 394,797 360,000
14,500 International Family Entertain-
ment, Inc.+.............................. 239,275 237,438
21,000 Tele-Communications, Inc. /
Liberty Media Group Cl. A ............... 536,612 564,375
12,000 Tele-Communications Inter-
national, Inc. Cl. A+.................... 191,600 273,000
80,000 TVE Holdings Limited .................... 35,200 24,311
1,000 Valuevision International, Inc. .........
Cl. A+................................... 5,125 5,563
---------- ----------
2,075,333 2,273,293
---------- ----------
The accompaning notes are an integral part of the financial statements.
B-35
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments -- December 31, 1995 (Continued)
================================================================================
Market
Shares Cost Value
------ ---- ------
ENTERTAINMENT PRODUCTION - 5.80%
5,200 All American Communications,
Inc. .................................... $ 35,008 $ 51,025
22,000 All American Communications,
Inc. Cl. B+.............................. 228,018 192,500
6,000 Ascent Entertainment Group Inc.+......... 89,665 94,500
1,000 Cablemaxx, Inc.+......................... 5,415 7,625
5,000 Canal + Spons. ADR ...................... 148,613 187,716
1,000 Cinar Films Inc. Cl. B+.................. 9,181 15,125
6,000 Cinergi Pictures Entertainment,
Inc.+.................................... 31,059 15,375
2,000 Fisher Companies Inc. ................... 109,500 150,000
1,000 Harvey Entertainment Company+............ 15,843 7,500
10,000 International Cablecasting
Technologies Inc.+....................... 169,290 245,000
3,000 King World Productions, Inc.+............ 117,337 116,625
400 Matsushita Electric Industrial
Co., Ltd. ............................... 57,620 65,800
2,500 People's Choice TV Corporation+.......... 54,452 47,500
2,000 Samuel Goldwyn Company+.................. 14,850 9,250
7,500 Savoy Pictures Entertainment, Inc.+...... 50,105 47,344
145,000 Shaw Brothers (Hong Kong) Ltd. .......... 258,005 159,382
14,000 Spelling Entertainment Inc. ............. 139,525 175,000
10,000 THORN EMI plc ADR ....................... 175,975 235,529
500 Tring International Group ............... 913 333
---------- ----------
1,710,374 1,823,129
---------- ----------
GAMING - 3.16%
1,500 Bay Meadows Operating Company ........... 24,375 21,938
4,000 Churchill Downs Incorporated ............ 175,938 140,000
4,000 GTECH Holdings Corporation .............. 73,387 104,000
1,500 Hilton Hotels Corporation ............... 87,513 92,250
1,200 Hollywood Park Inc.+..................... 13,710 12,075
5,000 International Game Technology ........... 74,313 54,375
2,000 ITT Corporation+......................... 103,388 106,000
100,000 Ladbroke Group plc ...................... 260,292 227,075
4,000 Mirage Resorts, Incorporated+............ 76,362 138,000
500 Nelvana Limited+......................... 5,451 6,960
10,000 Quintel Entertainment Inc.+.............. 50,000 47,500
3,000 Santa Anita Realty Enterprises, Inc. .... 54,738 35,625
2,000 Video Lottery Technologies Inc.+......... $ 17,602 $ 9,500
---------- ----------
1,017,069 995,298
---------- ----------
GLOBAL MEDIA AND ENTERTAINMENT - 9.41%
15,000 Grupo Televisa S.A. GDR ................. 283,828 337,500
13,000 Havas ADR ............................... 270,013 258,185
16,000 News Corporation Limited ADR ............ 308,261 342,000
6,000 News Corporation Limited
Preference Shares ADR ................... 91,228 115,500
1,500 PolyGram NV ADR ......................... 60,313 78,750
3,000 Seagram Company Ltd. .................... 95,119 103,875
1,200 Sony Corporation ADR .................... 66,299 73,650
16,000 Time Warner Inc. ........................ 673,373 606,000
8,500 Turner Broadcasting System,
Inc. Cl. A .............................. 184,588 219,938
2,500 Turner Broadcasting System,
Inc. Cl. B .............................. 46,437 65,000
3,500 Viacom Inc. Cl. A+....................... 125,038 160,563
4,500 Viacom Inc. Cl. B+....................... 152,047 213,195
6,500 Walt Disney Company ..................... 285,675 383,500
---------- ----------
1,642,219 2,957,656
---------- ----------
INFORMATION PUBLISHING - 2.09%
8,000 Berlitz International, Inc.+............. 109,750 132,000
15,000 Data Broadcasting Corporation+........... 73,884 185,625
1,500 Dun & Bradstreet Corp. .................. 86,888 97,125
3,000 Elsevier NV Spons. ADR+.................. 57,250 79,875
2,500 Reuters Holdings plc ADR ................ 115,977 137,813
100 Scholastic Inc. ......................... 6,218 7,775
2,000 Source Media Inc.+....................... 21,000 18,250
---------- ----------
470,967 658,463
---------- ----------
INTERACTIVE CONSUMER - 0.34%
8,000 Lillian Vernon Corporation .............. 120,088 107,000
---------- ----------
PUBLISHING - 14.72%
62,700 American Media Inc. Cl. A+............... 571,947 266,475
10,000 Arnoldo Mondadori Editore SpA+........... 75,064 86,677
4,000 Belo (A.H.) Corporation ................. 127,700 139,000
1,000 Central Newspaper, Inc. Cl. A ........... 28,008 31,375
1,000 Dow Jones & Company Inc. ................ 30,925 39,875
300 Filipacchi Medias ....................... 37,408 47,902
750 Gray Communications Systems Inc. ........ 12,375 13,406
1,000 Harcourt General, Inc. .................. 30,675 41,875
B-36
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments -- December 31, 1995 (Continued)
================================================================================
Market
Shares Cost Value
------ ---- ------
15,000 Harte-Hanks Communications Company ...... $ 316,525 $ 296,250
3,000 Houghton Mifflin Company ................ 130,525 129,000
20,000 Independent Newspapers Ltd. ............. 96,754 123,380
4,000 K-III Corp.+............................. 40,000 48,500
2,000 Knight-Ridder ........................... 113,579 125,000
10,000 Lee Enterprises, Incorporated ........... 171,513 230,000
1,500 McClatchy Newspapers, Inc. Cl. A ........ 35,638 34,313
3,000 McGraw-Hill Companies, Inc. ............. 216,287 261,375
10,000 Media General, Inc. Cl. A ............... 232,621 303,750
12,000 Meredith Corporation .................... 275,713 502,500
9,500 Mirror Group plc ........................ 19,760 25,916
50,000 Nation Publishing Group Company Ltd. .... 77,769 60,540
5,000 New York Times Company Cl. A ............ 118,562 148,125
120,000 Oriental Press Group .................... 85,648 36,467
3,000 Pearson plc ............................. 28,535 29,016
2,500 Playboy Enterprises, Inc.+............... 19,225 21,875
1,000 Post Publishing Company ................. 8,899 5,558
13,000 Pulitzer Publishing Company ............. 525,200 620,750
3,000 Reader's Digest Association, Inc. Cl. B . 119,667 141,750
3,000 Reed International plc ADR .............. 72,250 92,250
200,000 South China Morning Post Holdings ....... 119,442 122,204
1,000 Thomas Nelson Inc. ...................... 12,800 13,000
3,000 Thomson Corporation ..................... 36,566 41,758
3,500 Times Mirror Company Cl. A .............. 68,373 118,562
12,000 United Newspapers plc ADR ............... 197,000 205,500
16,000 Western Publishing Group, Inc.+.......... 170,825 126,000
3,000 Wiley (John) & Sons, Inc. Cl. B ......... 63,800 97,500
---------- ----------
4,287,578 4,627,424
---------- ----------
SOFTWARE - 5.52%
5,000 Acclaim Entertainment, Inc.+............. 76,268 61,875
1,600 America Online, Inc.+.................... 12,008 60,000
1,600 Broderbund Software, Inc.+............... 27,737 97,200
2,000 Electronic Arts Inc.+.................... 46,050 52,250
5,000 H&R Block Inc. .......................... 206,750 202,500
3,500 Intel Corporation ....................... 135,071 198,625
200 Metatec Corporation Cl. A+............... 2,247 2,200
5,500 Microsoft Corporation ................... 405,755 482,625
100 Netscape Communications Corporation ..... 2,800 13,900
8,000 Novell Inc. ............................. $ 141,278 $ 114,000
15,000 NTN Communications, Inc.+................ 96,250 68,438
200 Pixar Inc. .............................. 4,400 5,775
1,000 Sega Enterprises ........................ 54,937 55,227
8,000 Sierra On-Line, Inc.+.................... 72,328 230,000
5,000 Spectrum HoloByte, Inc.+................. 48,856 32,500
12,000 StarSight Telecast, Inc. ................ 59,401 58,500
---------- ----------
1,392,136 1,735,615
---------- ----------
TOTAL COPYRIGHT/
CREATIVITY COMPANIES ................... 17,734,590 20,912,213
---------- ----------
DISTRIBUTION COMPANIES - 32.02%
CABLE TV - 2.98%
1,000 Bell Cablemedia plc ADR+................. 17,165 16,000
6,000 Cablevision Systems Corporation Cl. A+... 296,587 325,500
13,000 Comcast Corporation Cl. A ............... 226,551 229,125
2,114 Cox Communications Inc. Cl. A+........... 33,543 41,223
3,000 General Cable Corporation plc
ADR ..................................... 43,830 45,000
500 NYNEX CableComms Group plc
ADR+ .................................... 10,905 8,688
1,000 Telewest Communications plc
ADR+ .................................... 24,750 24,125
7,350 Tele-Communications, Inc. ...............
Cl. A+ .................................. 122,439 146,081
12,000 Videotron Groupe ........................ 103,452 87,912
1,000 Videotron Holdings plc ADR+ ............. 16,500 12,750
100 Wireless One Inc.+ ...................... 1,330 1,646
---------- ----------
897,052 938,050
---------- ----------
ENTERTAINMENT DISTRIBUTION -- 1.90%
10,000 GC Companies, Inc.+ ..................... 292,795 335,000
5,000 Lodgenet Entertainment
Corporation+ ............................ 43,952 47,500
4,000 Shaw Communications Inc. ................ 28,122 25,275
10,000 US WEST Media Group+ .................... 192,027 190,000
---------- ----------
556,896 597,775
---------- ----------
EQUIPMENT -- 1.88%
1,000 Amphenol Corporation Cl. A+ ............. 17,125 24,250
2,200 Ericsson (L.M.) Telephone
Company ADR ............................. 25,286 42,900
2,000 General Instrument
Corporation+ ............................ 43,625 46,750
1,000 Generale Des Eaux (Cie) ................. 106,250 99,572
1,000 Leitch Technology Corporation+ .......... 12,225 25,092
The accompaning notes are an integral part of the financial statements.
B-37
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments -- December 31, 1995 (Continued)
================================================================================
Market
Shares Cost Value
------ ---- ------
200 Motorola, Inc. .......................... $ 8,985 $ 11,400
2,000 Northern Telecom Limited ................ 64,006 86,000
1,000 Scientific-Atlanta, Inc. ................ 13,188 15,000
500 Siemens AG ADR .......................... 41,650 54,846
23,000 Trans-Lux Corporation ................... 213,025 184,000
---------- ----------
545,365 589,810
---------- ----------
INTERNATIONAL TELEPHONE -- 9.49%
20,000 BC TELECOM Inc. ......................... 356,969 366,300
10,000 BCE Inc.+ ............................... 338,013 345,000
3,000 BHI Corporation ......................... 51,200 47,250
1,000 British Telecommunications plc
ADR ..................................... 56,225 56,500
7,500 Cable & Wireless plc ADR ................ 148,438 158,438
5,000 Compania Telefonos Chile S.A ............
ADR ..................................... 348,674 414,375
5,000 CPT Telefonica del Peru Cl. B ........... 9,722 10,596
2,000 Empresas Telex Chile .................... 17,938 20,750
2,000 Hong Kong Telecommunica-
tions Ltd. ADR .......................... 36,955 35,500
4 Japan Telecom Co. Ltd.+ ................. 104,830 76,737
1,000 PT Telekomunikasi Indonesia+ ............ 20,185 25,500
1,000 Royal PTT Nederland NV
ADR (a) ................................. 26,749 36,250
2,000 Singapore Telecommunications
Limited ................................. 4,700 4,441
6,000 STET SpA - Societa' Finanziaria
Telefonica SpA ADR ...................... 174,438 169,818
1,500 Telecom Argentina Stet - France
Telecom S.A. ADR ........................ 60,216 71,438
500 Telecom Corporation of New
Zealand Limited ......................... 23,900 34,688
25,000 Telecom Italia SpA+ ..................... 34,868 38,898
7,909 Telecomunicacoes Brasileiras
S.A. (Telebras) Spons. ADR+ ............. 241,382 374,689
91 Telecomunicacoes Brasileiras
S.A. (Telebras) Spons.
ADR New ................................. 5,122 4,311
3,000 Telefonica de Argentina SA
ADR ..................................... 64,774 81,750
7,000 Telefonica de Espana ADR ................ 285,002 293,125
10,000 Telefonos De Mexico SA
Cl. L ADR ............................... 361,265 318,750
---------- ----------
2,771,565 2,985,104
---------- ----------
TELECOMMUNICATIONS -- 2.91%
9,000 AT&T Corp. .............................. 480,504 582,750
3,000 Frontier Corporation .................... $ 49,950 $ 90,000
7,500 General Communication, Inc. .............
Cl. A+ .................................. 36,388 38,438
800 Philippine Long Distance Tele-
phone Company ........................... 44,165 43,300
4,000 Tel-Save Holdings, Inc.+ ................ 55,000 55,500
3,000 WorldCom Inc.+ .......................... 56,854 105,750
---------- ----------
722,861 915,738
---------- ----------
US REGIONAL OPERATORS -- 2.20%
2,000 Bell Atlantic Corporation ............... 107,850 133,750
1,000 Cincinnati Bell Inc. .................... 16,375 34,750
7,500 GTE Corporation ......................... 255,438 330,000
1,500 NYNEX Corporation ....................... 54,388 81,000
1,000 Southern New England Tele-
communications Corporation .............. 32,300 39,750
2,000 US WEST Communications
Group ................................... 55,695 71,500
---------- ----------
522,046 690,750
---------- ----------
WIRELESS COMMUNICATIONS -- 10.65%
5,000 Advanced Information
Services Ltd. ........................... 74,683 88,527
5,000 AirTouch Communications, Inc.+ .......... 113,900 141,250
2,900 American Paging, Inc.+ .................. 20,383 18,488
1,000 Associated Group, Inc. Cl. A+ ........... 19,214 18,875
500 Associated Group, Inc. Cl. B+ ........... 10,064 9,500
6,000 BCE Mobile Communications
Inc.+ ................................... 162,665 202,747
8,000 Cellular Communications, Inc. ...........
Cl. A+ .................................. 370,194 398,000
24,000 Centennial Cellular Corp. Cl. A+ ........ 395,745 411,000
5,000 Century Telephone Enterprises,
Inc. Cl. A .............................. 131,975 158,750
15,000 COMSAT Corporation ...................... 344,844 279,375
7,000 General Motors Corporation
Cl. H ................................... 271,613 343,875
5,000 Himachal+ ............................... 46,500 31,250
12,500 NEXTEL Communications, Inc.
Cl. A+ .................................. 159,289 184,375
2,000 PanAmSat Corp.+ ......................... 30,370 44,125
14,000 Pittencrieff Communications,
Inc.+ ................................... 79,634 53,375
600 PT Indonesia Satellite ADR .............. 20,093 21,900
5,000 Rogers Cantel Mobile
Communications Inc. Cl. B+ .............. 115,625 132,500
250,000 Telecom Italia Mobile SpA ............... 294,983 440,157
B-38
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments -- December 31, 1995 (Continued)
================================================================================
Principal
Amount Market
or Shares Cost Value
--------- ---- ------
2,000 Telephone and Data Systems, Inc. ........ $ 78,913 $ 79,000
2,000 United States Cellular Corporation+ ..... 57,725 67,500
750 Vanguard Cellular Systems, Inc. Cl. A+ .. 14,713 15,188
4,000 Vodafone Group plc ADR .................. 110,905 141,000
1,000 WinStar Communications, Inc.+ ........... 5,550 17,125
4,000 United Communication Industry ........... 59,365 51,131
---------- ----------
2,988,945 3,349,013
---------- ----------
TOTAL DISTRIBUTION
COMPANIES 9,004,730 10,066,240
---------- ----------
TOTAL COMMON STOCKS ..................... 26,739,320 30,978,453
---------- ----------
CONVERTIBLE CORPORATE BONDS -- 1.97%
ENTERTAINMENT -- 1.79%
$100,000 All American Communications,
Inc. Sub. Deb. Cv.
6.50%, 10/01/03 (a) ..................... 78,924 88,000
50,000 Savoy Pictures Entertainment,
Inc. Sub. Deb. Cv.
7.00%, 07/01/03 ......................... 39,771 42,500
219,300 Time Warner Inc. Sub. Deb. Cv.
8.75%, 01/10/ ........................... 212,591 227,249
200,000 Viacom Inc. Sub. Deb. Cv.
8.00%, 07/07/06 ......................... 133,213 206,000
---------- ----------
464,499 563,749
---------- ----------
MEDIA -- 0.18%
218,750(b) Havas Sub. Deb. Cv.
3.00%, 12/31/97 ......................... 43,639 54,888
---------- ----------
TOTAL CONVERTIBLE
CORPORATE BONDS ......................... 508,138 618,637
---------- ----------
CONVERTIBLE PREFERRED STOCK -- 0.54%
CABLE -- 0.35%
4,000 Cablevision Systems Corporation
8.50% Cv. Pfd. Ser. I ................... 100,000 109,000
---------- ----------
ENTERTAINMENT -- 0.19%
1,500 AMC Entertainment, Inc.
$1.75 Cv. Pfd. .......................... 37,825 61,125
---------- ----------
TOTAL CONVERTIBLE
PREFERRED STOCK ......................... 137,825 170,125
PREFERRED STOCK -- 0.03%
---------- ----------
EQUIPMENT -- 0.03%
200 Nokia Group AB Preference ............... $ 5,717 $ 7,775
---------- ----------
TOTAL PREFERRED
STOCK ................................... 5,717 7,775
---------- ----------
TOTAL INVESTMENTS --
101.07% ................................. $27,391,000 31,774,990
---------- ----------
Liabilities, in excess of
Other Assets-- (1.07)% .................. (335,955)
----------
NET ASSETS -- 100.00%
(2,681,984 shares outstanding) .......... $31,439,035
===========
Net Asset Value And
Redemption Price
Per Share ............................... $ 11.72
===========
- ----------
+ - Non-income producing security.
ADR -- American Depository Receipt.
GDR -- Global Depository Receipt.
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1995, Rule 144A securities amounted to $124,250, or 0.4% of net assets.
(b) Principal amount denoted in French Francs.
For Federal income tax purposes:
Aggregate cost $27,391,000
===========
Gross unrealized appreciation $ 5,733,395
Gross unrealized depreciation (1,349,405)
-----------
Net unrealized appreciation $ 4,383,990
===========
The accompanying notes are an integral part of the financial statements.
B-39
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Statement of Assets and Liabilities
December 31, 1995
================================================================================
Assets:
Investments in securities, at value
(Cost $27,391,000)...................................... $31,774,990
Cash.................................................. 30,217
Receivable for investments sold....................... 66,844
Receivable for Fund shares sold....................... 10,100
Dividends receivable.................................. 44,036
Accrued interest receivable........................... 15,573
Deferred organizational expenses...................... 40,331
-----------
Total assets........................................ 31,982,091
-----------
Liabilities:
Payable for investments purchased..................... 288,654
Dividend payable...................................... 35,844
Payable to Advisor.................................... 26,643
Payable for distribution fees......................... 12,853
Payable for Fund shares redeemed...................... 3,022
Other accrued expenses................................ 176,040
-----------
Total liabilities................................... 543,056
-----------
Net assets (applicable to 2,681,984
shares outstanding)..................................... $31,439,035
===========
Net asset value and redemption
price per share......................................... $ 11.72
===========
Net Assets Consist of:
Capital Stock, at par value........................... 2,682
Additional paid in capital............................ 27,142,750
Distribution in excess
of net realized gains..................................... (99,090)
Net unrealized appreciation on investment
and foreign currency transactions..................... 4,392,693
-----------
Net assets ......................................... $31,439,035
===========
Statement of Operations
For the Year Ended December 31, 1995
================================================================================
Investment Income:
Dividends (Net of foreign tax $27,355)............... $ 534,163
Interest............................................. 160,649
-----------
Total income....................................... 694,812
-----------
Expenses:
Investment advisory fee.............................. 289,830
Transfer and shareholder servicing agent............. 171,141
Distribution expenses................................ 72,406
Printing and mailing................................. 47,119
Legal and audit fees................................. 38,449
Registration fees.................................... 29,940
Custodian fees and expenses.......................... 30,095
Amortization of organization expenses................ 14,469
Directors' fees and expenses......................... 5,833
Miscellaneous........................................ 17,005
-----------
Total expenses..................................... 716,287
-----------
Investment loss - net................................ (21,475)
-----------
Net Realized and Unrealized Gain
on Investments:
Net realized gain on investments..................... 894,984
Net change in unrealized appreciation ............... 3,763,535
-----------
Net gain on investments............................ 4,658,519
-----------
Net increase in net assets resulting from
operations .......................................... $4,637,044
==========
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
February 7, 1994
Year Ended (Commencement of
December 31, Operations) through
1995 December 31, 1994
------------ -------------------
Increase in Net Assets:
<S> <C> <C>
Investment loss - net ....................................... $ (21,475) $ (23,468)
Net realized gain (loss) on investments ..................... 894,984 (48,116)
Change in unrealized appreciation-- net ..................... 3,763,535 629,150
------------ ------------
Net increase in net assets resulting from operations ...... 4,637,044 557,566
Distributions from net realized gains ....................... (945,951) --
------------ ------------
Share transactions-- net .................................... 2,916,457 24,273,919
------------ ------------
Net increase in net assets ................................ 6,607,550 24,831,485
Net Assets:
Beginning of period ......................................... 24,831,485 --
------------ ------------
End of period ............................................... $ 31,439,035 $ 24,831,485
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
B-40
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies. The primary investment objective of the
Gabelli Global Interactive Couch Potato(R) Fund (the "Fund") is capital
appreciation. The Fund is a series of Gabelli Global Series Funds, Inc. (the
"Corporation"), incorporated in Maryland on July 16, 1993. The Fund is a
no-load, open-end, non-diversified management investment company and one of five
separately managed portfolios of the Corporation. The Fund commenced investment
operations on February 7, 1994. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund:
Security Valuation. Portfolio securities listed or traded on the New York or
American Stock Exchanges, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") or traded on foreign exchanges are
valued at the last sale price on that exchange (if there were no sales that day,
the security is valued at the average of the bid and asked prices). All other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest average of the bid and asked prices. When
market quotations are not readily available, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Corporation's Directors. Short-term debt
securities with remaining maturities of 60 days or less are valued at amortized
cost, unless the Directors determine such does not reflect the securities' fair
value, in which case these securities will be valued at their fair value as
determined by the Directors. Options are valued at the last sale price on the
exchange on which they are listed, unless no sales of such options have taken
place that day, in which case they will be valued at the mean between their
closing bid and asked prices.
Foreign Currency Transactions. The books and records of the Fund are maintained
in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities
are recorded at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
recorded at the exchange rate prevailing on the respective date of such
transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Forward Foreign Currency Contracts. The Fund may hold currencies to meet
settlement requirements for foreign securities and may engage in currency
exchange transactions to hedge against changes in exchange rates. Forward
foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded by the Fund as an
unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
currency contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts.
At December 31, 1995, the Fund had the following forward foreign currency
contracts open:
Foreign Currency Settlement Unrealized
Amount Date Value Loss
------------- --------- ---------- ----------
4,000,000 Sold Hong Kong Dollars 02/09/96 $ 517,205 $ (396)
4,000,584 Bought Japanese Yen 01/03/96 38,761 (156)
---------- -------
$ 555,966 $ (552)
========= =======
B-41
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Notes to Financial Statements (Continued)
================================================================================
Security Transactions and Investment Income. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates), with
realized gain and loss on investments determined by using specific
identification as the cost method. Interest income (including amortization of
premium and discount) is recorded as earned. Dividend income and dividend and
capital gain distributions to shareholders are recorded on the ex-dividend date.
Federal Income Taxes. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986 and distribute
all of its taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Fund intends to undertake any procedural steps
required to claim the benefits of such treaties. If more than 50% in value of
the Fund's total assets at the close of any taxable year consists of stocks or
securities of non-U.S. corporations, the Fund is permitted and may elect to
treat any non-U.S. taxes paid by it as paid by its shareholders.
2. Capital Stock Transactions. The Articles of Incorporation, dated July 16,
1993, permit the Fund to issue 200,000,000 shares (par value $0.001).
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
February 7, 1994
(Commencement of Operations)
Year Ended December 31, 1995 through December 31, 1994
---------------------------- ----------------------------
` Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold ............................................ 781,367 $ 8,799,009 2,700,779 $ 27,120,985
Shares issued upon reinvestment of dividends ........... 77,654 910,107 -- --
Shares redeemed ........................................ (598,521) (6,792,659) (279,295) (2,847,066)
------- ------------ --------- ------------
Net share transactions ................................. 260,500 2,916,457 2,421,484 24,273,919
Reclassification of net investment loss ................ -- (21,475) -- (23,468)
------- ------------ --------- ------------
Net increase ........................................... 260,500 $ 2,894,982 2,421,484 $ 24,250,451
======= ============ ========= ============
</TABLE>
3. Purchases and Sales of Securities. Purchases and sales of securities for the
year ended December 31, 1995, other than U.S. government obligations and
short-term securities, aggregated $13,589,459 and $9,052,022, respectively.
Futures Contracts. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Such investments will only be made
if they are, in the opinion of Fund management, economically appropriate to the
reduction of risks involved in the management of the Fund. Upon entering into a
futures contract, the Fund is required to deposit with the broker an amount of
cash or cash equivalents equal to a certain percentage of the contract amount.
This is known as the "initial margin." Subsequent payments ("variation margin")
are made or received by the Fund each day, depending on the daily fluctuation of
the value of the contract. The daily changes in the contract are recorded as
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. The net unrealized appreciation/depreciation is shown in the
financial statements.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
During the year ended December 31, 1995, the Fund sold short futures contracts
aggregating $4,954,700 and closed short futures contracts aggregating
$6,179,997.
B-42
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Notes to Financial Statements (Continued)
================================================================================
Repurchase Agreements. The Fund may enter into repurchase agreements with
government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with other brokers or dealers that
meet the credit guidelines established by the Directors. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer,
of the collateral to the account of the custodian. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to maintain the adequacy of the collateral. If
the seller defaults and the value of the collateral declines, or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
4. Investment Advisory Contract. The Fund employs Gabelli Funds, Inc. (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management, and pay the compensation of all officers and
Directors of the Fund who are affiliated with the Advisor. As compensation for
the services rendered and related expenses borne by the Advisor, the Fund pays
the Advisor a fee, computed and accrued daily and payable monthly, equal to
1.00% per annum of the Fund's average daily net assets. The Advisor is obligated
to reimburse the Fund in the event the Fund's expenses exceed the most
restrictive expense ratio limitation imposed by any state, currently believed to
be 2.5% of the first $30 million and 2% of the next $70 million of the Fund's
average daily net assets (excluding taxes, interest, distribution expenses and
extraordinary items). No such reimbursement was required during 1995.
5. Organization Expenses. The organization expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months.
6. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and
Rule 12b-1 thereunder. For the year ended December 31, 1995, the Fund has
incurred distribution costs of $72,406, or 0.25% of average net assets, subject
to 0.25% limitation, the annual limitation under the Plan, payable to Gabelli &
Company, Inc., an affiliate of the Advisor. The Board of Directors has approved
that Distribution costs incurred by Gabelli & Company, Inc., totaling $396,123
which are in excess of the .25% limitation may be recovered from the Fund in
future periods, subject to such limitation.
7. Transactions with Affiliates. The Fund paid brokerage commissions during the
year ended December 31, 1995 of $2,514 to Gabelli & Company, Inc. and its
affiliates.
B-43
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
February 7, 1994
Year Ended (Commencement of Operations)
December 31, 1995 through December 31, 1994
---------------- --------------------------
Operating Performance:
<S> <C> <C>
Net asset value, beginning of period .............. $ 10.25 $ 10.00
-------- --------
Net investment loss ............................... (0.008) (0.01)
Net realized and unrealized gain on securities .... 1.841 0.26
-------- --------
Total from investment operations .................. 1.833 0.25
-------- --------
Distributions from net realized gain on investments (0.363) --
-------- --------
Net asset value, end of period ............................... $ 11.72 $ 10.25
======== ========
Total Return(a) ................................... 17.88% 2.50%
Ratios to average net assets/supplemental data:
Net assets, end of period (in thousands) .......... $ 31,439 $ 24,831
Ratio of operating expenses to average net assets . 2.47% 2.47%(b)
Ratio of net investment loss to average net assets (0.07)% (0.13)%(b)
Portfolio turnover rate ........................... 33% 14%
</TABLE>
- ----------
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(b) Annualized.
B-44
<PAGE>
The Gabelli Global Interactive Couch Potato(R) Fund
Report of Grant Thornton LLP, Independent Auditors
================================================================================
Shareholders and Board of Directors
The Gabelli Global Interactive Couch Potato(R) Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of The Gabelli Global Interactive Couch Potato(R)
Fund (one of the series constituting Gabelli Global Series Funds, Inc.), as of
December 31, 1995, and the related statements of operations, changes in net
assets and financial highlights for the year then ended, and the statements of
changes in net assets and financial highlights for the period from February 7,
1994 (commencement of operations) through December 31, 1994. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. 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 and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Gabelli Global Interactive Couch Potato(R) Fund of Gabelli Global Series Funds,
Inc. as of December 31, 1995, and the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated above, in
conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
-------------------------------
New York, New York
February 16, 1996
B-45
<PAGE>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments -- December 31, 1995
================================================================================
Principal Market
Amount Cost Value
------ ---- -----
CONVERTIBLE SECURITIES -- 89.05%
CONVERTIBLE CORPORATE BONDS -- 75.05%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.54%
1,147,500(a) Michelin France Sub. Deb. Cv.
2.50%, 01/01/01.............. $ 225,315 $ 242,184
----------- -----------
BUILDING AND CONSTRUCTION -- 2.71%
$100,000 Bacnotan Consolidated Sub.
Deb. Cv.5.50%, 06/21/04....... 98,842 86,000
200,000 Tata Iron & Steel Co. Ltd.
Sub. Deb. Cv.2.25%, 04/01/99. 196,807 176,500
150,000 YTL Corporation Berhad Sub.
Deb. Cv. Zero Cpn., 08/15/02. 162,750 164,250
----------- -----------
458,399 426,750
----------- -----------
BUSINESS SERVICES -- 2.60%
100,000 International Container Terminal
Services Sub. Deb. Cv.
5.00%, 09/15/01.............. 79,101 79,000
150,000 News American Holdings
Incorporated Sub. Deb. Cv.
Zero Cpn., 03/11/13.......... 64,417 68,250
350,000 Softkey International Inc. Sub.
Deb. Cv. 5.50%, 11/01/00..... 329,166 262,500
----------- -----------
472,684 409,750
----------- -----------
CABLE -- 2.68%
300,000 Comcast Corporation Sub.
Deb. Cv. 1.125%, 04/15/07.... 154,743 151,500
250,000 International CableTel
Incorporated Sub. Deb. Cv....
7.25%, 04/15/05.............. 252,999 270,000
----------- -----------
407,742 421,500
----------- -----------
CONSUMER PRODUCTS -- 7.02%
100,000 Goldstar Co. Ltd. Sub. Deb.
Cv. 3.25%, 12/31/06.......... 102,043 126,000
Matsushita Electric Industrial
Co., Ltd. :
20,000,000(b) Sub. Deb. Cv. 1.30%,
03/29/02..................... 224,423 211,995
20,000,000(b) Sub. Deb. Cv. 2.70%,
05/31/02..................... 245,615 236,799
10,000,000(b) Sony Corporation Sub. Deb.
Cv.1.40%, 09/30/03........... 108,153 115,590
140,000(c) Tate & Lyle Public Limited
Company Sub. Deb. Cv. 5.75%
03/21/01..................... $ 191,609 $ 186,888
$250,000 TheraTx Inc. Sub. Deb. Cv.
8.00%, 02/01/02(g)........... 250,000 228,125
----------- -----------
1,121,843 1,105,397
----------- -----------
DIVERSIFIED INDUSTRIAL -- 19.26%
100,000 Astra International Inc., PT
Sub. Deb. Cv. 6.75%,
05/30/06..................... 87,000 93,000
350,000 Ayala Corp. Sub. Deb. Cv.
Zero Coupon, 12/08/00........ 252,597 252,438
250,000 Ballarpur Industries Ltd. Sub.
Deb. Cv. 4.00%, 04/01/99..... 242,110 226,250
100,000 China Resources Enterprise
Sub. Deb. Cv. 3.00%,
11/24/05..................... 103,484 109,375
200,000(c) Cookson Group plc Sub. Deb.
Cv. 7.00%, 11/02/04.......... 327,220 365,025
1,328,900(a) Finaxa Sub. Deb. Cv. 3.00%,
01/01/01..................... 287,014 307,199
997,500(a) Groupe Saint Louis Sub. Deb.
Cv. 7.00%, 01/01/00.......... 221,294 241,273
20,000,000(b) Kawasaki Heavy Industries
Ltd. Sub. Deb. Cv. 0.80%,
09/28/01..................... 219,358 213,158
10,000,000(b) Kokusai Electric Co. Ltd. Sub.
Deb. Cv. 1.30%, 09/30/02..... 110,072 115,299
100,000 Loxley Co. Ltd. Sub. Deb. Cv.
3.50%, 04/18/05.............. 109,473 114,500
100,000 Nan Ya Plastics Corporation
Sub. Deb. Cv. 1.75%,
07/19/01..................... 93,517 99,000
20,000,000(b) Nissen Co. Ltd. Sub. Deb. Cv.
2.10%, 06/20/02.............. 233,593 204,438
140,000(d) Oce Van Der Grinten NV Sub.
Deb. Cv. 4.75%, 06/15/01..... 94,629 94,406
100,000 President Enterprises Sub.
Deb. Cv. Zero Coupon,
07/22/01..................... 112,750 132,000
100,000 PT Eka Gunatama Mandiri
Sub. Deb. Cv. 4.00%,
10/04/97..................... 96,588 116,500
200,000 Renong Berhad Sub. Deb. Cv.
2.00%, 07/15/05(g)........... 201,497 202,000
B-46
<PAGE>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments (Continued) -- December 31, 1995
================================================================================
Principal Market
Amount Cost Value
------ ---- -----
$ 150,000 Samancor O/S Financing Ltd.
Sub. Deb. Cv. 7.00%,
06/30/04..................... $ 142,779 $ 145,500
----------- -----------
2,934,975 3,031,361
----------- -----------
ENERGY -- 2.65%
150,000 Banpu Coal Sub. Deb. Cv.
3.50%, 08/25/04.............. 156,848 186,000
150,000(c) Elf Enterprise Finances Sub.
Deb. Cv. 8.75%, 06/27/06..... 237,284 231,241
----------- -----------
394,132 417,241
----------- -----------
FINANCIAL SERVICES -- 7.73%
250,000 Bangkok Bank Ltd. Sub.
Deb. Cv. 3.25%, 03/03/04..... 231,546 266,250
140,000 Goldlion Capital Ltd. Sub.
Deb. Cv. 4.875%, 02/01/99.... 140,406 157,500
150,000 Investec O/S Finance BVI Sub.
Deb. Cv. 6.375%, 11/30/02.... 153,598 162,000
50,000 Lend Lease Finance Interna-
tional Ltd. Sub. Deb. Cv.
4.75%, 06/01/03.............. 53,805 61,250
100,000 Metrobank International
Finance Ltd. Sub. Deb. Cv.
2.75%, 09/10/00.............. 100,000 108,000
250,000 Mitsubishi Trust & Banking
Corp. Sub. Deb. Cv. 3.25%,
09/30/03..................... 230,922 226,250
250,000 Sappi BVI Finance Ltd. Sub.
Deb. Cv. 7.50%, 08/01/02..... 237,535 236,250
----------- -----------
1,147,812 1,217,500
----------- -----------
FOOD AND BEVERAGES -- 1.70%
270,000(a) BSN SA Unsub. Deb. Cv.
6.60%, 01/01/00.............. 53,430 67,332
500,000(e) Danisco A/S Sub. Deb. Cv.
5.00%, 02/21/04.............. 95,943 98,105
100,000 Jinro Ltd. Sub. Deb. Cv.
0.25%, 09/30/09.............. 92,262 102,750
----------- -----------
241,635 268,187
----------- -----------
HEALTH CARE -- 1.38%
500,000 Roche Holding Ltd. Sub. Deb.
Cv. Zero Coupon, 04/20/10..... 186,887 216,875
----------- -----------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 3.74%
100,000 Alfa S.A. de C.V. Sub. Deb.
Cv. 8.00%, 09/15/00.......... 100,000 98,375
20,000,000(b) Nippon Electric Glass Co.,
Ltd. Sub. Deb. Cv. 2.00%,
03/29/02..................... $ 222,858 $ 223,428
$250,000 Thermo Electron Corporation
Sub. Deb. Cv. 4.25%,
01/01/03..................... 250,000 267,500
----------- -----------
572,858 589,303
----------- -----------
METALS AND MINING -- 3.54%
100,000 Bema Gold Corporation Sub.
Deb. Cv. 7.50%, 02/28/00..... 100,000 114,000
100,000 Coeur d'Alene Mines Corp-
oration Sub. Deb. Cv.
6.375%, 01/31/04............. 100,897 93,875
150,000 Inco Ltd. Sub. Deb. Cv.
5.75%, 07/01/04.............. 168,189 197,250
100,000(c) Lonrho Finance Public Sub.
Deb. Cv. 6.00%, 02/27/04..... 141,153 152,675
----------- -----------
510,239 557,800
----------- -----------
PAPER AND FOREST PRODUCTS 2.20%
500,000(f) Kymmene Corporation Sub.
Deb. Cv. 8.25%, 11/18/43..... 111,638 120,644
240,000 PT Pabrik Kertas Tjiwi Sub.
Deb. Cv. 7.25%, 04/12/01..... 219,693 226,200
----------- -----------
331,331 346,844
----------- -----------
REAL ESTATE / DEVELOPMENT -- 5.96%
20,000,000(b) Heiwa Real Estate Sub. Deb.
Cv. 2.50%, 03/29/02.......... 231,576 222,847
200,000 Henderson Capital International
Sub. Deb. Cv. 4.50%,
10/27/96..................... 197,379 205,500
250,000 Liberty Property Trust Sub.
Deb. Cv. 8.00%, 07/01/01..... 250,000 257,813
150,000 New World Development Co.
Sub. Deb. Cv. 4.375%,
12/11/00..................... 147,352 154,500
100,000 Rouse Company Sub. Deb.
Cv. 5.75%, 07/23/02........... 82,872 97,500
----------- -----------
909,179 938,160
----------- -----------
RETAIL -- 2.53%
100,000(c) ASDA Finance Ltd. Sub. Deb. Cv.
10.75%, 10/21/05.............. 155,854 195,300
B-47
<PAGE>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments (Continued) -- December 31, 1995
================================================================================
Principal Market
Amount Cost Value
------ ---- -----
$100,000 Federated Department Stores
Sub. Deb. Cv. 5.00%,
10/01/03..................... $ 100,000 $ 101,250
100,000 Robinson Department Store
Sub. Deb. Cv. 3.25%,
07/27/00..................... 102,478 102,500
----------- -----------
358,332 399,050
----------- -----------
TELECOMMUNICATIONS -- 5.32%
250,000 Rogers Communications Inc.
Sub. Deb. Cv. 2.00%,
11/26/05..................... 131,348 134,375
150,000 Scandinavian Broadcasting
System SA Sub. Deb. Cv.
7.25%, 08/01/05.............. 161,728 154,125
357,000 Tele 2000 S.A. Sub. Deb. Cv.
9.75%, 04/14/97(g)........... 326,897 305,235
250,000 Telekom Malaysia Berhad
Sub. Deb. Cv. 4.00%,
0/03/04(g)................... 242,517 243,438
----------- -----------
862,490 837,173
----------- -----------
TRANSPORTATION -- 2.48%
10,000,000(b) Nippon Yusen Kabushiki
Kaisha Sub. Deb. Cv.
2.00%, 09/29/00.............. 113,408 114,330
250,000 Yang Ming Marine Transport
Sub. Deb. Cv. 2.00%,
10/06/01..................... 257,500 275,625
----------- -----------
370,908 389,955
----------- -----------
TOTAL CONVERTIBLE
CORPORATE BONDS.............. 11,506,761 11,815,030
----------- -----------
CONVERTIBLE PREFERRED STOCKS -- 14.01%
BUSINESS SERVICES -- 1.00%
5,000 Browning-Ferris Industries,
Inc. 7.25% "Aces"............ 178,125 $156,875
----------- -----------
ENERGY-- 3.71%
5,000 Atlantic Richfield Company
9.01% Cv. Pfd................ 123,750 117,500
5,000 Enron Corporation Pfd.......... 120,250 120,000
4,000 Unocal Corporation............. 220,250 217,500
2,500 Valero Energy Corp............. 117,963 128,750
----------- -----------
582,213 583,750
----------- -----------
FINANCIAL SERVICES-- 0.94%
2,500 Ahmanson (H.F.) & Co. Pfd. D... 102,650 147,813
----------- -----------
INDUSTRIAL EQUIPMENT & SUPPLIES-- 0.36%
$ 2,000 McDermott International, Inc.
Cv. Pfd...................... $ 62,100 $ 56,750
----------- -----------
METALS AND MINING -- 2.73%
10,000 Kaiser Aluminum Corp. Pfd...... 159,250 128,750
3,000 Magma Copper Company
6.00% Cv. Pfd. Ser. E........ 197,555 301,125
----------- -----------
356,805 429,875
----------- -----------
REAL ESTATE / DEVELOPMENT -- 1.40%
9,000 Security Capital Pacific Trust
Pfd. Ser. A.................. 189,439 220,500
TELECOMMUNICATIONS -- 3.87%
5,500 Cablevision Systems Pfd........ 153,275 149,875
15,000 Ericsson (L.M.) Telephone
Company 4.25% Cv. Pfd......... 26,250 41,250
5,000 MFS Communications
Company, Inc. Pfd............ 167,500 243,438
4,600 Sprint Corporation 8.25%
Cv. Pfd...................... 146,625 174,800
----------- -----------
493,650 609,363
----------- -----------
TOTAL CONVERTIBLE
PREFERRED STOCKS............. 1,964,982 2,204,926
----------- -----------
TOTAL CONVERTIBLE
SECURITIES................... 13,471,743 14,019,956
----------- -----------
PREFERRED STOCKS -- 0.67%
METALS AND MINING -- 0.67%
5,000 Freeport-McMoRan Copper
& Gold Inc................... 95,925 105,625
----------- -----------
TOTAL PREFERRED STOCKS......... 95,925 105,625
----------- -----------
COMMON STOCKS -- 2.24%
ADVERTISING -- 0.35%
700 Havas.......................... 51,063 55,387
----------- -----------
COMMUNICATIONS -- 0.35%
5,000 Rogers Communication........... 51,883 55,861
----------- -----------
ENTERTAINMENT -- 0.24%
1,000 Time Warner Inc................ 40,550 37,875
----------- -----------
METALS & MINING -- 1.30%
5,000 Kaiser Aluminum Corp.+......... 57,400 65,000
10,000 Pegasus Gold Inc.+............. 118,000 138,750
----------- -----------
175,400 203,750
----------- -----------
TOTAL COMMON STOCKS............ 318,896 352,873
----------- -----------
B-48
<PAGE>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments (Continued) -- December 31, 1995
================================================================================
Principal
Amount Market
or Shares Cost Value
--------- ---- ------
WARRANTS -- 2.15%
AUTO RELATED -- 0.30%
50 NGK Spark Plug Co. Ltd.
01/20/98+.................... $ 62,500 $ 47,500
----------- -----------
DIVERSIFIED INDUSTRIAL -- 0.66%
50 Kyocera Corp. 01/23/98+........ 69,375 64,375
50 Nishimatsu Construction
Co., Ltd. 12/03/96+.......... 47,500 40,000
----------- -----------
116,875 104,375
----------- -----------
METAL & MINING -- 0.77%
50 Sumitomo Metal Mining Co.,
Ltd. 12/24/97+............... 80,625 120,625
----------- -----------
RETAIL -- 0.42%
150 Takashimaya Co., Ltd.
07/02/96+.................... 26,250 65,625
----------- -----------
TOTAL WARRANTS................. 286,250 338,125
----------- -----------
U.S. GOVERNMENT OBLIGATIONS-- 10.07%
$1,590,000 U.S. Treasury Bills, 3.60%
to 4.66% Due 01/11/96 to
02/08/96..................... 1,585,270 1,585,270
----------- -----------
TOTAL U.S. GOVERNMENT
OBLIGATIONS.................. 1,585,270 1,585,270
----------- -----------
TOTAL INVESTMENTS
-- 104.19%.................... $15,758,084 16,401,849
=========== ===========
Liabilities, in excess of
Other Assets-- 4.19%......... (659,757)
-----------
NET ASSETS -- (1,458,695
shares outstanding)
100.00%...................... $15,742,092
===========
Net Asset Value and
Redemption Price Per
Share........................ $ 10.79
===========
PUT OPTIONS
50 S & P 500 January 1996
$620.00..................... $ 39,525 $ 42,500
=========== ===========
Premiums
Received Value
-------- -----
PUT OPTIONS WRITTEN
50 S & P 500 January 1996
$600.00..................... $ 20,099 $ 10,625
=========== ===========
- ----------
(a) - Principal amount denoted in French Francs.
(b) - Principal amount denoted in Japanese Yen.
(c) - Principal amount denoted in British Pounds.
(d) - Principal amount denoted in Netherlands Guilders.
(e) - Principal amount denoted in Danish Krone.
(f) - Principal amount denoted in Finnish Markka.
(g) - Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1995, Rule 144A securities amounted to $978,798 or 6.2% of net assets. + -
Non income producing security.
*For Federal Income Tax purposes:
Aggregate cost........................... $15,758,084
===========
Gross unrealized appreciation............ $ 1,006,102
Gross unrealized depreciation............ (362,337)
-----------
Net unrealized appreciation.............. $ 643,765
===========
- --------------------------------------------------------------------------------
Top Ten Holdings
December 31, 1995
Matsushita Electric Industrial Co. Yang Ming Marine Transport
Cookson Group plc International CabelTel Inc.
Finaxa Thermo Electron Corp.
Tele 2000 S.A. Bangkok Bank Ltd.
Magma Copper Company Softkey International Inc.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
B-49
<PAGE>
The Gabelli Global Convertible Securities Fund
Statement of Assets and Liabilities
December 31, 1995
================================================================================
Assets:
Investments in securities, at value
(Cost $15,758,084)...................................... $16,401,849
Unrealized appreciation on forward foreign
currency contracts...................................... 196,129
Options purchased, at value (Cost $39,525)............ 42,500
Cash.................................................. 37,188
Receivable for investments sold....................... 398,726
Dividends and interest receivable..................... 183,020
Deferred organizational expenses...................... 40,154
-----------
Total Assets........................................ 17,299,566
-----------
Liabilities:
Options written, at value
(Premiums received: $20,099)............................ 10,625
Payable to Advisor.................................... 13,438
Payable for distribution fees......................... 6,492
Payable for investments purchased..................... 1,443,220
Payable for Fund shares redeemed...................... 2,523
Dividends payable..................................... 33,960
Other accrued expenses................................ 47,216
-----------
Total Liabilities................................... 1,557,474
-----------
Net Assets (applicable to 1,458,695
shares outstanding)..................................... $15,742,092
===========
Net asset value and redemption
price per share......................................... $ 10.79
===========
Net Assets Consist of:
Capital Stock, at par value........................... $ 1,459
Additional paid-in capital............................ 15,030,130
Distributions in excess of net
investment income....................................... (64,539)
Accumulated net realized loss on
investments............................................. (58,839)
Net unrealized appreciation on investments
and assets and liabilities denominated in
foreign currencies........................................ 833,881
-----------
Net Assets ......................................... $15,742,092
===========
Statement of Operations for the Year Ended
December 31, 1995
================================================================================
Investment Income:
Interest (Net of foreign taxes of $1,460)............ $ 703,239
Dividends............................................ 200,208
----------
Total Income....................................... 903,447
----------
Expenses:
Investment Advisory.................................. 170,164
Shareholder services................................. 72,954
Distribution fees.................................... 42,527
Legal and audit...................................... 31,029
Printing and mailing................................. 28,397
Registration......................................... 20,850
Custodian............................................ 16,205
Amortization of organization expenses................ 14,647
Directors' fees and expenses......................... 5,833
Miscellaneous........................................ 7,213
----------
Total Expenses..................................... 409,819
----------
Net Investment Income................................ 493,628
----------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions:
Net realized loss on investments..................... (28,739)
Net change in unrealized appreciation................ 1,630,775
----------
Net gain on investments............................ 1,602,036
----------
Net increase in net assets resulting from
operations .......................................... $2,095,664
==========
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Year Ended February 3, 1994
December 31, (Commencement of Operations)
Increase (decrease) in Net Assets: 1995 through December 31,1994
------------ ----------------------------
<S> <C> <C>
Net Investment Income ...................................................... $ 493,628 $ 241,857
Net realized loss on investments ........................................... (28,739) (30,100)
Net change in unrealized appreciation ...................................... 1,630,775 (796,894)
------------ ------------
Net increase (decrease) in net assets resulting from operations .......... 2,095,664 (585,137)
------------ ------------
Distributions from net investment income ................................... (493,628) (241,857)
Distributions in excess of net investment income ........................... (62,592) (1,947)
------------ ------------
.......................................................................... (556,220) (243,804)
------------ ------------
Share transactions-- net ................................................... (1,370,857) 16,402,446
------------ ------------
Net increase in net assets ............................................... 168,587 15,573,505
Net Assets:
Beginning of period ........................................................ 15,573,505 --
------------ ------------
End of period .............................................................. $ 15,742,092 $ 15,573,505
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-50
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies. The objective of The Gabelli Global
Convertible Securities Fund (the "Fund") is to obtain a high rate of total
return. The Fund is a series of Gabelli Global Series Funds, Inc. (the
"Corporation"), incorporated in Maryland on July 16, 1993. The Fund is a
no-load, open-end, non-diversified management investment company and one of five
separately managed portfolios of the Corporation. The Fund commenced investment
operations on February 3, 1994. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
Security Valuation. Portfolio securities listed or traded on the New York or
American Stock Exchanges, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") or traded on foreign exchanges are
valued at the last sale price on that exchange (if there were no sales that day,
the security is valued at the average of the bid and asked prices). All other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest average of the bid and asked prices. When
market quotations are not readily available, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Corporation's Directors. Short-term debt
securities with remaining maturities of 60 days or less are valued at amortized
cost, unless the Directors determine such does not reflect the securities' fair
value, in which case these securities will be valued at their fair value as
determined by the Directors. Options are valued at the last sale price on the
exchange on which they are listed, unless no sales of such options have taken
place that day, in which case they will be valued at the mean between their
closing bid and asked prices. Foreign Currency Transactions. The books and
records of the Fund are maintained in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities are
recorded at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
recorded at the exchange rate prevailing on the respective date of such
transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Forward Foreign Currency Contracts. The Fund may hold currencies to meet
settlement requirements for foreign securities and may engage in currency
exchange transactions to hedge against changes in exchange rates. Forward
foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded by the Fund as an
unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed. The use of
forward foreign currency contracts does not eliminate fluctuations in the
underlying prices of the Fund's portfolio securities, but it does establish a
rate of exchange that can be achieved in the future. Although forward foreign
currency contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts.
B-51
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements (Continued)
================================================================================
At December 31, 1995, the Fund had sold short the following forward foreign
currency contracts:
<TABLE>
<CAPTION>
Settlement Unrealized
Amount/Currency Dates Value Gain/(Loss)
--------------- ------------ --------- ------------
<S> <C> <C> <C>
185,297,500 Japanese Yen 5/17/96, 5/31/96 and 8/7/96 $1,836,035 $195,391
479,137 British Pound 5/31/96 739,861 23
2,577,125 French Franc 5/31/96 and 6/11/96 526,850 (5,456)
1,211,750 Finnish Markka 5/31/96 279,551 6,171
---------- --------
$3,382,297 $196,129
========== ========
</TABLE>
Security Transactions and Investment Income. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates), with
realized gain and loss on investments determined by using specific
identification as the cost method. Interest income (including amortization of
premium and discount) is recorded as earned. Dividend income and dividend and
capital gain distributions to shareholders are recorded on the ex-dividend date.
Federal Income Taxes. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986 and distribute
all of its taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Fund intends to undertake any procedural steps
required to claim the benefits of such treaties. If more than 50% in value of
the Fund's total assets at the close of any taxable year consists of stocks or
securities of non-U.S. corporations, the Fund is permitted and may elect to
treat any non-U.S. taxes paid by it as paid by its shareholders.
2. Capital Stock Transactions. The Articles of Incorporation, dated July 16,
1993, permit the Fund to issue 200,000,000 shares (par value $0.001).
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
February 3, 1994
Year Ended (commencement of operations)
December 31, 1995 through December 31, 1994
----------------- -------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold ............................................ 464,817 $ 4,735,331 1,854,279 $ 19,389,838
Shares issued upon reinvestment of dividends ........... 48,399 522,244 22,513 223,559
Shares redeemed ........................................ (623,259) (6,628,432) (308,054) (3,210,951)
------- ------------ --------- ------------
Net increase (decrease) ................................ (110,043) ($ 1,370,857) 1,568,738 $ 16,402,446
======== ============ ========= ============
</TABLE>
3. Purchases and Sales of Securities. Purchases and sales of securities for the
period ended December 31, 1995, other than U.S. government obligations and
short-term securities, aggregated $25,282,651 and $23,894,955, respectively.
Futures Contracts. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Such investments will only be made
if they are, in the opinion of management, economically appropriate to the
reduction of risks involved in the management of the Fund. Upon entering into a
futures contract, the Fund is required to deposit with the broker an amount of
cash or cash equivalents equal to a certain percentage of the contract amount.
This is known as the "initial margin." Subsequent payments ("variation margin")
are made or received by the Fund each day, depending on the daily fluctuation of
the
B-52
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements (Continued)
================================================================================
value of the contract. The daily changes in the contract are recorded as
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. The net unrealized appreciation/depreciation is shown in the
financial statements. During the year ended December 31, 1995, the Fund sold
short futures contracts aggregating $7,654,307, closed short futures contracts
aggregating $9,843,024, opened long futures contracts aggregating $399,065 and
closed long futures contacts aggregating $2,753,793.
Options. The Fund may purchase or write call or put options on securities or
indices. During 1995, the Fund utilized put options to hedge the value of the
Fund's portfolio. As a writer of put options, the Fund receives a premium at the
outset and then bears the market risk of unfavorable changes in the price of the
financial instrument underlying the option. The Fund would incur a loss if the
price of the underlying financial instrument decreases between the date the
option is written and the date on which the option is terminated. The Fund would
realize a gain, to the extent of the premiums, if the price of the financial
instrument increases between those dates.
As a purchaser of put options, the Fund pays a premium for the right to sell to
the seller of the put option the underlying security at a specified price. The
seller of the put has the obligation to purchase the underlying security upon
exercise at the exercise price.
Transactions in written put options and purchased put options for the year ended
December 31, 1995:
<TABLE>
<CAPTION>
Written Put Options Purchased Put Options
------------------- ---------------------
Number Number
of Contracts Premium of Contracts Premium
------------ ------- ------------ -------
<S> <C> <C> <C> <C>
Options outstanding at January 1, 1995 ................. 70 $ 28,135 90 $ 66,049
Options written ........................................ 1,500 470,584 1,405 925,302
Options closed ......................................... (570) (225,735) (260) (195,352)
Options expired ........................................ (945) (248,517) (1,160) (726,279)
Options exercised ...................................... (5) (4,368) (25) (30,195)
--------- --------- --------- ---------
Options outstanding at December 31, 1995 ............... 50 $ 20,099 50 $ 39,525
========= ========= ========= =========
</TABLE>
Repurchase Agreements. The Fund may enter into repurchase agreements with
government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with other brokers or dealers that
meet the credit guidelines established by the Directors. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer,
of the collateral to the account of the custodian. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to maintain the adequacy of the collateral. If
the seller defaults and the value of the collateral declines, or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
4. Investment Advisory Contract. The Fund employs Gabelli Funds, Inc. (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management, and pay the compensation of all officers and
Directors of the Fund who are affiliated with the Advisor. As compensation for
the services rendered and related expenses borne by the Advisor, the Fund pays
the Advisor a fee, computed and accrued daily and payable monthly, equal to
1.00% per annum of the Fund's average daily net assets. The Advisor is obligated
to reimburse the Fund in the event the Fund's expenses exceed the most
restrictive expense
B-53
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements (Continued)
================================================================================
ratio limitation imposed by any state, currently believed to be 2.5% of the
first $30 million of the Fund's average daily net assets (excluding taxes,
interest, distribution expenses and extraordinary items). No such reimbursement
was required during 1995.
5. Organization Expenses. The organization expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months.
6. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and
Rule 12b-1 thereunder. For the period ended December 31, 1995, the Fund has
incurred distribution costs of $42,527, or 0.25% of average net assets, the
annual limitation under the Plan, payable to Gabelli & Company, Inc., an
affiliate of the Advisor. The Board of Directors has approved that Distribution
costs incurred by Gabelli & Company, Inc., totaling $271,178 which are in excess
of the 0.25% limitation may be recovered from the Fund in future periods,
subject to such limitation.
7. Transactions with Affiliates. The Fund paid brokerage commissions during the
year ended December 31, 1995 of $670 to Gabelli & Company, Inc.
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
February 3, 1994
Year (Commencement
Ended of Operations) Through
Operating Performance: December 31, 1995 December 31, 1994
<S> <C> <C>
Net asset value, beginning of period ................... $ 9.93 $ 10.00
-------- --------
Net investment income .................................. 0.39 0.16
Net realized and unrealized gain/(loss) on securities .. 0.86 (0.07)
-------- --------
Total from investment operations ....................... 1.25 0.09
Less Distributions:
Dividends from net investment income ................... (0.39) (0.16)
-------- --------
Net asset value, end of period ........................... $ 10.79 $ 9.93
======== ========
Total Return(a) ........................................ 12.62% 0.90%
Ratios to average net assets/supplemental data:
Net assets, end of period (in thousands) ............... $ 15,742 $ 15,574
Ratio of operating expenses to average net assets ...... 2.41% 2.49%(b)
Ratio of net investment income to average net assets ... 2.90% 2.80%(b)
Portfolio turnover rate ................................ 152% 329%
</TABLE>
- ----------
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less than
one year is not annualized.
(b) Annualized.
B-54
<PAGE>
The Gabelli Global Convertible Securities Fund
Report of Grant Thornton LLP, Independent Auditors
================================================================================
Shareholders and Board of Directors
The Gabelli Global Convertible Securities Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The Gabelli Global Convertible
Securities Fund (one of the series constituting Gabelli Global Series Funds,
Inc.), as of December 31, 1995, and the related statements of operations,
changes in net assets and financial highlights for the year then ended, and the
statement of changes in net assets and financial highlights for the period from
February 3, 1994 (commencement of operations) through December 31, 1994. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Gabelli Global Convertible Securities Fund of Gabelli Global Series Funds, Inc.
as of December 31, 1995, and the results of its operations, the changes in its
net assets and the financial highlights for the periods indicated above, in
conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
-------------------------------
Grant Thornton LLP
New York, New York
February 16, 1996
B-55
<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, 1995 (all)
-- Statement of Assets and Liabilities*
December 31, 1995 (all)
-- Statements of Changes in Net Assets for the fiscal years ended December
31, 1995 and December 31, 1994. (GGTF); February 3, 1994 (Commencement of
Operations) through December 31, 1994 and for the fiscal year ended
December 31, 1995 (GGCSF); February 7, 1994 (Commencement of Operations)
through December 31, 1994 and for the fiscal year ended December 31, 1995
(GGICPF).*
-- Notes to Financial Statements (all)*
-- Financial Highlights for the fiscal years ended December 31, 1995 and
December 31, 1994 and for the period November 1, 1993 (Commencement of
Operations) through December 31, 1993 (GGTF); February 3, 1994
(Commencement of Operations) through December 31, 1994 and for the fiscal
year ended December 31, 1995. (GGCSF); February 7, 1994 (Commencement of
Operations) through December 31, 1994 and for the fiscal year ended
December 31, 1995. (GGICPF)*
-- Reports of Grant Thornton LLP Independent Accountants dated February 16,
1996 (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.)
C-1
<PAGE>
(3) Not Applicable
(4) (a) Specimen Share Certificate for The Gabelli Global Interactive Couch
PotatoTM(C) Fund (Previously filed as an exhibit to Post-Effective
Amendment No. 2 to Registration Statement No. 33-66262 on January 5, 1994.)
(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 PotatoTM(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.)
(6) (a) Distribution Agreement 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) Distribution Agreement relating to The Global Interactive Couch
PotatoTM(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.)
(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 PotatoTM(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.)
(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.)
C-2
<PAGE>
(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.)
(b) Distribution Plan relating to The Gabelli Interactive Couch
PotatoTM(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,
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 Capital Asset Fund, 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 12, 1996 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 ........................................ 20,365
The Gabelli Global Interactive Couch PotatoTM(C)Fund Stock,
par value $.001 per share ........................................ 6,970
The Gabelli Global Convertible Securities Fund Stock,
par value $.001 per share ........................................ 3,149
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.
C-3
<PAGE>
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,
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 Capital Asset 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 LLC, 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. 6 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 26th day of April, 1996.
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. 6
to the Registration Statement has been signed below by the following in the
capacity and on the date indicated.
Signature Title Date
--------- ----- ----
* President (Principal Executive April 26, 1996
- ------------------------- Officer), and Director
Mario J. Gabelli
* Vice President and Treasurer April 26, 1996
- -------------------------
Bruce N. Alpert
* Director April 26, 1996
- -------------------------
Felix J. Christiana
* Director April 26, 1996
- -------------------------
Anthony J. Colavita
* Director April 26, 1996
- -------------------------
Anthonie C. van Ekris
* Director April 26, 1996
- -------------------------
Karl Otto Pohl
* Director April 26, 1996
- -------------------------
John D. Gabelli
* Director April 26, 1996
- -------------------------
Werner Roeder, M.D.
*By
-------------------------------------
Bruce N. Alpert
Attorney-in-Fact
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 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. 6 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 26th day of April, 1996.
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. 6
to the Registration Statement has been signed below by the following in the
capacity and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ MARIO J. GABELLI President (Principal Executive April 26, 1996
- ------------------------- Officer), and Director
Mario J. Gabelli
/s/ BRUCE N. ALPERT Vice President and Treasurer April 26, 1996
- -------------------------
Bruce N. Alpert
/s/ FELIX J. CHRISTIANA Director April 26, 1996
- -------------------------
Felix J. Christiana
/s/ ANTHONY J. COLAVITA Director April 26, 1996
- -------------------------
Anthony J. Colavita
/s/ ANTHONIE C. VAN EKRIS Director April 26, 1996
- -------------------------
Anthonie C. van Ekris
/s/ KARL OTTO POHL Director April 26, 1996
- -------------------------
Karl Otto Pohl
/s/ JOHN D. GABELLI Director April 26, 1996
- -------------------------
John D. Gabelli
/s/ WERNER ROEDER, M.D. Director April 26, 1996
- -------------------------
Werner Roeder, M.D.
*By
-------------------------------------
Bruce N. Alpert
Attorney-in-Fact
C-6
<PAGE>
SCHEDULE OF EXHIBITS TO FORM N-1A
Exhibit
Number Exhibit Page Number
------ ------- -----------
(11) Consent of Independent Accountants
Price Waterhouse LLP
(16) Computation of Performance Quotations
(17) Financial Data Schedule
C-7
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
The Gabelli Global Telecommunications Fund,
The Gabelli Global Entertainment and Media Fund,
The Gabelli Global Growth Fund,
The Gabelli Global 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. 7 to the Registration
Statement on Form N-1A of our reports dated February 16, 1996, 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.
GRANT THORNTON LLP
New York, NY
April 26, 1996
Gabelli Global Telecommunications
---------------------------------
T=((ERV)/P)^(1/n)-1x100
T=((1,215/1,000)^(1/(365/881))-1)x100
T=((1.215)^(1/.4143)-1)x100
T=(1.0840-1)x100
T=8.4%
Global Couch Potato
-------------------
T=((ERV)/P)^(1/n)-1x100
T=((1,296/1,000)^(1/(365/783))-1)x100
T=((1.296)^(1/.4662)-1)x100
T=(1.1285-1)x100
T=12.8%
Global Convertible
------------------
T=((ERV)/P)^(1/n)-1x100
T=((1,194/1,000)^(1/(365/987))-1)x100
T=((1.194)^(1/.4638)-1)x100
T=(1.0857-1)x100
T=8.6%
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> GABELLI GLOBAL SERIES FUNDS, INC., GLOBAL TELECOMMUNICATIONS
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
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<INVESTMENTS-AT-VALUE> 121822
<RECEIVABLES> 1764
<ASSETS-OTHER> 64
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 123650
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<SENIOR-LONG-TERM-DEBT> 443
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 805
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<PAID-IN-CAPITAL-COMMON> 110367
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<EXPENSES-NET> 2253
<NET-INVESTMENT-INCOME> 687
<REALIZED-GAINS-CURRENT> 914
<APPREC-INCREASE-CURRENT> 17336
<NET-CHANGE-FROM-OPS> 18937
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 696
<DISTRIBUTIONS-OF-GAINS> 1284
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2040
<NUMBER-OF-SHARES-REDEEMED> 5322
<SHARES-REINVESTED> 171
<NET-CHANGE-IN-ASSETS> (14886)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 2
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<GROSS-EXPENSE> 2253
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<PER-SHARE-NAV-BEGIN> 9.73
<PER-SHARE-NII> .064
<PER-SHARE-GAIN-APPREC> 1.508
<PER-SHARE-DIVIDEND> .064
<PER-SHARE-DISTRIBUTIONS> .118
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.120
<EXPENSE-RATIO> .018
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
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<SERIES>
<NUMBER> 02
<NAME> GABELLI GLOBAL SERIES FUNDS, INC., GLOBAL CONVERTABLE FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 15777
<INVESTMENTS-AT-VALUE> 16402
<RECEIVABLES> 582
<ASSETS-OTHER> 325
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17309
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<OTHER-ITEMS-LIABILITIES> 124
<TOTAL-LIABILITIES> 1567
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15032
<SHARES-COMMON-STOCK> 1459
<SHARES-COMMON-PRIOR> 1569
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 64
<ACCUMULATED-NET-GAINS> (59)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 833
<NET-ASSETS> 15742
<DIVIDEND-INCOME> 200
<INTEREST-INCOME> 704
<OTHER-INCOME> 0
<EXPENSES-NET> 410
<NET-INVESTMENT-INCOME> 494
<REALIZED-GAINS-CURRENT> (29)
<APPREC-INCREASE-CURRENT> 1631
<NET-CHANGE-FROM-OPS> 2096
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 556
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 465
<NUMBER-OF-SHARES-REDEEMED> 623
<SHARES-REINVESTED> 48
<NET-CHANGE-IN-ASSETS> 169
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (30)
<OVERDISTRIB-NII-PRIOR> 2
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 170
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 410
<AVERAGE-NET-ASSETS> 17012
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> .38
<PER-SHARE-GAIN-APPREC> .87
<PER-SHARE-DIVIDEND> .39
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.79
<EXPENSE-RATIO> .024
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> GABELLI GLOGAL SERIES FUND, INC., GLOBAL INTER. COUCH POTATO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 27392
<INVESTMENTS-AT-VALUE> 31775
<RECEIVABLES> 267
<ASSETS-OTHER> 86
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 32128
<PAYABLE-FOR-SECURITIES> 420
<SENIOR-LONG-TERM-DEBT> 219
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 689
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27145
<SHARES-COMMON-STOCK> 2682
<SHARES-COMMON-PRIOR> 2421
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 99
<ACCUM-APPREC-OR-DEPREC> 4393
<NET-ASSETS> 31439
<DIVIDEND-INCOME> 534
<INTEREST-INCOME> 161
<OTHER-INCOME> 0
<EXPENSES-NET> 716
<NET-INVESTMENT-INCOME> (21)
<REALIZED-GAINS-CURRENT> 895
<APPREC-INCREASE-CURRENT> 3763
<NET-CHANGE-FROM-OPS> 4637
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 946
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 781
<NUMBER-OF-SHARES-REDEEMED> 598
<SHARES-REINVESTED> 78
<NET-CHANGE-IN-ASSETS> 6608
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (48)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 716
<AVERAGE-NET-ASSETS> 28980
<PER-SHARE-NAV-BEGIN> 10.25
<PER-SHARE-NII> (.008)
<PER-SHARE-GAIN-APPREC> 1.841
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .363
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.72
<EXPENSE-RATIO> .025
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
