[PHOTO]
The
Gabelli
Global
Telecommunications
Fund
ANNUAL REPORT
DECEMBER 31, 1995
<PAGE>
Gabelli Global Series Funds, Inc.
One Corporate Center
Rye, New York 10580 - 1434
The Gabelli Global Telecommunications Fund
Annual Report - 1995
To Our Shareholders:
For the fourth quarter, The Gabelli Global Telecommunications Fund's net
asset value increased 1.6% to $11.12 per share on December 31, 1995 after
adjusting for the $0.182 per share distribution paid on December 29, 1995. The
Fund outperformed the Lipper Analytical Services, Inc. Global Fund Index which
was up 0.6% for the same period. This index covers 30 global open-end mutual
funds which may invest in a diversified group of industry sectors. The Salomon
Brothers Global Telecommunications Index, an unmanaged index of 52 equity
security issues of companies in the telecommunications industry, increased 0.5%
over the same period. For the year ended December 31, 1995, the Fund increased
16.2%, versus 14.5% and 13.3% for the Lipper Global Fund Index and the Salomon
Brothers Global Telecommunications Index. The chart on the next page outlines
our outperformance of the Salomon Brothers Global Telecommunications Index.
Since inception on November 1, 1993, through September 30, 1995, the Fund
gained 15.3% which reflects an average annual rate of return of 6.8% assuming
reinvestment of dividends. On December 31, 1995, our shareholder base was 21,573
and net assets were $122.8 million.
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
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Quarter
---------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<C> <C> <C> <C> <C> <C>
1995: Net Asset Value ....... $9.77 $10.29 $11.12 $11.12 $11.12
Total Return .......... 0.4% 5.3% 8.1% 1.6% 16.2%
- ----------------------------------------------------------------------------------------------
1994: Net Asset Value ....... $9.68 $9.62 $10.38 $9.73 $9.73
Total Return .......... (5.1)% (0.6)% 7.9% (5.3)% (3.7)%
- ----------------------------------------------------------------------------------------------
1993: Net Asset Value ....... --- --- --- $10.20 $10.20
Total Return .......... --- --- --- 3.0%(b) 3.0%(b)
- ----------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Return - December 31, 1995 (a)
------------------------------------------------
1 Year ................................. 16.2%
Life of Fund(b) ........................ 6.8%
- --------------------------------------------------------------------------------
Dividend History
- --------------------------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 29, 1995 $0.182 $11.12
December 30, 1994 $0.095 $ 9.73
December 31, 1993 $0.102 $10.20
(a) Average annual and total returns reflect changes in share price and
reinvestment of dividends and are net of expenses. Of course, returns represent
past performance and do not guarantee future results. Investment returns and the
principal value of an investment will fluctuate. When shares are redeemed they
may be worth more or less than their original cost.
(b) From commencement of operations on November 1, 1993.
Note: Investing in foreign securities involves risks not ordinarily associated
with investments in domestic issues, including currency fluctuation, economic
and political risks.
- --------------------------------------------------------------------------------
<PAGE>
Comparison of Change in Value of a $10,000 Investment in The Gabelli Global
Telecommunications Fund, the S&P 500 Index and the Salomon Brothers Global
Telecommunications Index
[The following table was represented by a line graph in the printed material.]
Gabelli Global Salomon Global S&P
Date Telecommunications Telecommunications 500 Index
---- ------------------ ------------------ ---------
11/1/93 $10,000 $10,000 $10,000
12/31/93 $10,300 $10,045 $10,190
12/31/94 $ 9,919 $ 9,555 $10,322
12/31/95 $11,530 $10,794 $14,203
[The following table was represented by a pie chart in the printed material.]
HOLDINGS BY GEOGRAPHIC REGION - 12/31/95
Europe 16.0%
United States 52.8%
Asia/Pacific Rim 8.7%
Latin America 6.3%
Canada 6.2%
Cash 5.8%
Other 4.2%
The Portfolio
Global Allocation
The chart at the right represents the Fund's holdings by geographic region
as of December 31, 1995. The geographic allocation will change based on current
global market conditions. Countries and/or regions or companies represented in
the chart and below may or may not be included in the Fund's portfolio in the
future.
Our Approach
Our approach is multifaceted. We purchase companies that are attractively
valued relative to what we estimate a buyer would be willing to pay for the
entire company in a private transaction. When the gap between a company's
Private Market Value (PMV) and public market value widens, our risk/reward
parameters improve. To maximize returns, our decision process requires the
expectation of a trigger that will promote a reduction in this gap. But we will
not invest in just any "cheap" company. Our selection is based on "bottom up"
fundamental analysis, which requires strong cash flow and earnings power,
positive industry dynamics, and certainly not least, good management with a
track record of growing value for their shareholders.
Investment Environment
In retrospect, the performance of the telecommunications sector globally in
1995 is easily explained. Declining interest rates, low inflation, moderate
economic growth, and most importantly a stronger dollar, resulted in higher
equity prices in most markets. This was all after a difficult start following
the global scare initiated by the December 1994 Mexican peso devaluation.
Domestically, the telecommunications sector was integrally involved in the
restructuring, merger, and acquisition activity that favorably affected U.S.
markets. Progress towards passage of Federal telecom legislation, expected to
benefit the U.S. communications industry, also helped propel prices.
Looking forward, we ask whether the global outlook remains favorable. Will
positive macro fundamentals remain in balance? Will pending telecommunications
issues be resolved in a favorable way? Have telecom stock prices peaked relative
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to economic reality on a valuation basis? Will the peace dividend continue to
provide an attractive yield? We continuously evaluate these questions.
Near term, the performance of the international telecommunications sector
should improve. Valuations in most markets remain attractive relative to their
historical and underlying fundamentals. For example, in Europe, the Italian
telecommunications holding company sells below the value of its holdings in
publicly traded subsidiaries: Telecom Italia SpA (TLECF - $5.21 - MILAN) and
Telecom Italia Mobile SpA (TLEBF - $1.76 - MILAN). In Canada, BCE Inc. (BCE -
$34.50 - NYSE) is selling at less than half our PMV estimate. Finally, in Latin
America, both Argentine regional telephone companies sell at less than six times
EBITDA despite expected long-term double-digit growth.
Domestically, we expect 1996 to be a stock picker's market. While domestic
telecommunication companies remain undervalued relative to their PMVs, several
sectors of the industry are at the high end of their historical stock market
valuations. In this environment proficient, "bottom up" analytical skills are an
asset. In this context, we point out AirTouch Communications Inc. (ATI - $28.25
- - NYSE), selling at less than 10 times forward EBITDA, which is poised to
benefit from the explosive growth of the global wireless industry - an industry
which added subscribers at a 60% rate globally in 1995.
Washington is another wild card. Will Congress get over the current budget
stalemate and swing its attention back towards telecommunications reform? We are
optimistic that the legislation will pass in 1996 and expect significant
feedback in the February/March time frame.
While uncertainties remain in the coming year, we remain true to our
investment philosophy. The direction of the market will have some short-term
impact on stock prices but, longer term it will recognize value.
Corporate Mergers, Alliances and Restructuring
Stock market investors reacted positively to several announced sales and
spin-offs in the telecommunications industry. These announcements have shown
that the value of the parts is often greater than the whole. As we predicted at
the start of 1995, our portfolio has received the benefits of this activity with
holdings such as Sprint Corporation (FON - $39.875 - NYSE), which has announced
its intent to spin-off its cellular operations. In the future, Sprint will use
recently acquired Personal Communication Services (PCS) licenses to provide
wireless service nationwide through an alliance with major cable companies.
Corporate management is under increasing pressure to narrow the spread
between the public price and PMV. We expect this trend to continue and
accelerate on an international scale. The advantages are easily explained.
Parent companies which are able to focus more clearly on core businesses can
operate more effectively in an increasingly competitive market. AT&T's decision
to spin-off its equipment business to eliminate real or perceived conflicts of
interest with the Regional Bells (RBOCs), which are both major customers and
competitors, is a good example. Spun-off companies generally have more focused
and better incentivized management - an example is AirTouch Communications,
spun-off by Pacific Telesis Group (PAC - $33.625 - NYSE).
In the future, we should benefit from further value recognition initiatives
by management. As global integration increases, we expect U.S. valuation
parameters and financial trends, including alliances, acquisitions and financial
reorganizations, to travel globally. European telecommunications carriers (with
low valuations), new revenue and hidden assets highlight our list of potential
beneficiaries from this trend. Portfolio holdings that should benefit include
the RBOC's, Telefonica de Espana (TEF - $41.875 - NYSE), Cable and Wireless plc
(CWP - $21.125 - NYSE), BCE and Nippon Telegraph & Telephone (NTT - $41.00 -
NYSE), to name a few.
Legislative Developments
In 1995, the House and Senate each passed bills which would deregulate the
communications industry. A congressional committee is presently working to
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reconcile the two bills into one. We expect passage of the legislation in 1996.
The "new" bill would open up new markets and create opportunities, as well as
increase the level of competition. Given a total communications pie of about
$200 billion in revenue, we expect individual companies to grow by entering new
markets while defending their existing businesses. The legislation will create a
catalyst to unlock hidden values and spur further consolidation among different
industry segments. Overall, we expect legislation to be positive for investors
and consumers.
Attractive Long-Term Global Dynamics
Internationally, we continue to see the confirmation of our themes. The
agenda continues to be globalization, job creation and economic expansion.
Telecommunications plays an important role in achieving these goals, as
communications is the backbone for efficient economic development. We point out
that only 10% of the world population has access to a telephone. This results in
a large potential untapped market for telecommunications services. Globally, the
trend continues to be liberalization and privatization of the telecommunications
sector resulting in a growing universe of publicly traded telecommunications
companies that operate in competitive markets. This transition to competition
requires restructuring which should result in faster line growth, tremendous
improvements in efficiency, and an increased demand for capital.
Portfolio Structure
While we remain "bottom up" focused, we thought it would be noteworthy to
review the geographic allocation of our Fund's investments. Although more than
half of the Fund's investments are in the U.S., we believe our global universe
increases our ability to find attractive opportunities.
Currently, approximately 16% of the Fund is invested in Europe, much of
that in the UK. In general, investments have been concentrated in companies with
a strong global presence, rapid growth and attractive valuations. Among these is
Vodafone Group plc (VOD - $35.25 - NYSE), the largest UK cellular service
provider with valuable investments in high growth cellular companies in
attractive markets throughout the world. Also included are Telefonica De Espana,
and Cable & Wireless, which sell at significant discounts to their underlying
asset values and have strong telecommunications franchises overseas.
About six percent of the Fund is invested in Latin America, and nine
percent in the Asia/Pacific Region. These regions continue to grow rapidly and
include some of the highest growth telecommunications companies globally.
Fundamentals are now catching up to valuations and appear more reasonable after
very strong stock market performances in 1993 and 1994.
Looking forward, we do not expect the dramatic outperformance of the U.S.
equity market relative to international markets to continue. Of course, a strong
U.S. equity market will support international markets. Regardless, our focus on
bottom up stock selection positions the Fund for the many global events expected
to improve performance over the long term.
Let's Talk Stocks
The following are stock specifics on selected holdings of our Fund's
investments. Favorable EBITDA prospects do not necessarily translate into higher
stock prices, but they do express a positive trend which we believe will develop
over time.
AirTouch Communications Corp. (ATI - $28.25 - NYSE) is one of the premier
players in global wireless communications. Operating in attractive cellular
markets in the U.S. and overseas (including Germany, Japan, Portugal, Sweden,
Belgium, Italy, Spain and South Korea), the company is well-positioned to
participate in the worldwide expansion of wireless communications. There are
currently 70 million cellular customers worldwide, with half of those in the
U.S. Annual growth is 40% to 50%. AirTouch's PMV is estimated at $45 for 1996
and should increase 20% annually through the year 2000.
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AT&T Corp. (T - $64.75 - NYSE), the world's second-largest telephone company, is
a global provider of telecommunications services. AT&T, selling at a modest 7.5
times EBITDA, has announced that it will split into 3 separate companies by
spinning-off its equipment manufacturer and its computer division. This will
reposition the company to participate more dynamically in the growth of the
telecommunications industry. The strategy involves a targeted approach to take
advantage of a strong global franchise, including its brand name, broader
product offerings and an international customer base. The restructuring
represents an impressive commitment by management to enhance shareholder values.
Comcast Corporation (CMCSA - $17.625 - NASDAQ), pro-forma for recently announced
acquisitions, is the third largest cable company in the U.S. serving
approximately 4.3 million subscribers. Comcast's cable cash flow margins
consistently rank among the highest in the industry. The company's cellular
telephone business has 8 million "pops" and serves high volume territory
including New Jersey, Pennsylvania and Delaware. Under Comcast's controlling
ownership, QVC, the cable TV retailer, has modified its product sales mix and
has continued to show strong financial returns. We estimate Comcast's PMV to be
about $29 per share.
C-TEC Corporation (CTEX - $30.50 - NASDAQ), a telecommunications company, was a
"pot hole" in 1995, as an ill-conceived and poorly structured rights offering
was undertaken by the company to raise money for future acquisitions. We were
essentially given little choice but to subscribe fully to maintain the Fund's
economic interest in C-TEC's assets. While we disagreed with the structure of
the rights offer, we believe the company, as a provider of both local telephone
and cable television service, is positioned to grow its per share PMV going
forward. We remain concerned about management's commitments to its public
shareholders, even as CTEX has hired investment bankers to evaluate revamping
its communications businesses and is considering the sale of its cable systems.
We estimate C-TEC's PMV to be about $52 per share.
NYNEX Corporation (NYN - $54.00 - NYSE) is one of the 7 RBOCs (Regional Bell
Operating Companies). Its largest market is in New York State. 90% of its
Northeast service territory is now deregulated. The company has merged its
cellular interests with those of Bell Atlantic to form a larger service "foot
print" which will create economies of scale and accelerate growth.
Internationally, the company is the second largest player in the U.K. cable
market. It has also established a significant presence in Asia, including
Thailand and China.
Sprint Corporation (FON - $39.875 - NYSE) is the third largest long-distance
carrier and the second largest independent local telephone company in the U.S.
The company has announced a spin-off of its cellular unit, which should take
place in the first quarter of 1996. The estimated trading value of the spin-off
is $9 to $10 per FON share. After the spin-off, the remaining long
distance/local telco shares should trade close to FON's current market price,
indicating shareholders are getting the cellular spin-off for "free". Sprint has
positioned itself on a global basis through a joint venture with France Telecom/
Deutsche Telekom, which will purchase a 20% stake in Sprint (excluding the
cellular unit) for $3.5 billion. Our interest in Sprint stems from its promising
national cable/telephony and PCS/wireless joint venture with three major cable
operators: Tele-Communications, Inc., Comcast Corporation and Cox
Communications, Inc. We consider FON an interesting value with the risks
associated with new entrants in the long distance business offset by the
cable/telephony venture.
Telecomunicacoes Brasileiras S.A. (TBL - $47.375 - NYSE) is the Brazilian
government-controlled monopoly telecommunications holding company consisting of
28 subsidiaries serving 10.8 million telephone lines in a country with a
population of over 150 million. The penetration rate is only 7%. The stock is
attractively valued at less than four times our estimate of 1996 cash flow.
Future opportunities include the prospects of privatization, strong line growth
and improvements in efficiency. The company also stands to benefit from an
improved rate structure which will allow the company to recoup inflation related
cost increases on a more consistent basis, as well as from reductions in the
inflation level.
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Telekom Malaysia Berhad (MYTEF - $7.795 - Kuala Lumpur), the second largest
company on the Kuala Lumpur Stock Exchange, is the only provider of domestic and
international fixed wire telecommunication services in Malaysia. The company's
subsidiary, Usha Martin Industries has received licensing from Calcutta, India,
to begin offering its digital-based mobile cellular services. The company has
subsidiaries involved in value-added networks and multimedia communications. We
expect Telekom Malaysia's growth to continue as demand for telecom services in
the ASEAN continues to grow. Vodafone Group plc (VOD - $35.25 - NYSE) is a
U.K.-based global provider of wireless telecommunications services. The
company's major interests in the U.K. include cellular, paging and data
transmission. Vodafone's shares sell at one of the lowest multiples of EBITDA
among the major wireless companies despite a pristine balance sheet and
prospects for 20% annual growth in earnings and cash flow. Management is highly
respected and has positioned the company to share in the exciting and rapidly
growing global market for wireless communications.
Minimum Initial Investment -- $1,000
With increased focus on the telecommunications bill facing Congress, and
more importantly, the potential ramifications of its passage, we think this a
good time for investors to join us in this dynamic industry sector. As a result,
effective November 1, 1995, the minimum initial investment for The Gabelli
Global Telecommunications Fund has been reduced to $1,000 from $25,000 through
April 30, 1996.
In Conclusion
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's NASDAQ symbol is GABTX. Please call us during the
day for further information. We thank you for your confidence in our investing
abilities and wish you a productive and financially rewarding 1996.
Sincerely,
/s/ Mario J. Gabelli /s/ Marc J. Gabelli
Mario J. Gabelli, CFA Marc J. Gabelli
President Associate Portfolio Manager
/s/ Ivan Arteaga
Ivan Arteaga, CPA
Associate Portfolio Manager
January 31, 1996
Note: The views expressed in this report reflect those of the portfolio manager
only through the end of the period as stated on the cover. The manager's views
are subject to change at any time based on market and other conditions.
6
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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.
7
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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 Telecommunications 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 Communications, Inc.+ .......... 41,180 30,500
35,000 PriCellular Corporation+ .................... 257,875 455,000
The accompanying notes are an integral part of the financial statements.
8
<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
or Shares
- ---------
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.
9
<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 & mailing ...................................... 53,693
Custodian fees & 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 (Loss)
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 decrease 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
---------------- -----------------
<S> <C> <C>
Increase in Net Assets:
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.
10
<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.
11
<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 $ 97,904,548z
========== ============= ========= =============
</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 equal to 100% of the dollar amount invested
12
<PAGE>
The Gabelli Global Telecommunications Fund
Notes to Financial Statements (Continued)
================================================================================
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.
13
<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
----------------- ----------------- -------------------------
<S> <C> <C> <C>
Operating Performance: 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.
Cable & Wireless plc.
NYNEX Corporation
Telephone & Data Systems, Inc.
AirTouch Communications Inc.
Vodafone Group plc
Sprint Corporation
Telefonica de Espana
Telecom Corp. of New Zealand
AT&T Corp.
- --------------------------------------------------------------------------------
14
<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.
New York, New York /s/ GRANT THORNTON LLP
February 16, 1996
- --------------------------------------------------------------------------------
1995 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the fiscal year ended December 31, 1995, the Fund paid to shareholders, on
December 29, 1995, ordinary income dividends (comprised of net investment income
and short-term capital gains) totaling $0.136 per share. Additionally, on that
date, the Fund paid $0.046 per share in long-term capital gains. For fiscal year
1995, 100% of the ordinary income dividends qualifies for the dividends received
deduction available to corporations.
U.S. Government Income:
The percentage of the ordinary income dividend paid by the Fund during fiscal
1995 which was derived from U.S. Treasury securities was 5.87%. Such income is
exempt from state and local income tax in all states. However, many states,
including New York and California, allow a tax exemption for a portion of the
income earned only if a mutual fund has invested at least 50% of its assets at
the end of each quarter of the Fund's fiscal year in U.S. Government securities.
The Gabelli Global Telecommunications Fund did not meet this strict requirement
in 1995. Due to the diversity in state and local tax law, it is recommended that
you consult your personal tax advisor for the applicability of the information
provided as to your own situation.
- --------------------------------------------------------------------------------
15
<PAGE>
Gabelli Global Series Funds, Inc.
The Gabelli Global Telecommunications Fund
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
Board of Directors
Mario J. Gabelli, CFA
Chairman and Chief
Investment Officer
Gabelli Funds, Inc.
Felix J. Christiana
Former Senior
Vice President
Dollar Dry Dock Savings Bank
Anthony J. Colavita
Attorney-at-Law
Anthony J. Colavita, P.C.
John D. Gabelli
Vice President
Gabelli & Company,Inc.
Karl Otto Pohl
Former President
Deutsche Bundesbank
Werner J. Roeder, MD
Director of Surgery
Lawrence Hospital
Anthonie C. van Ekris
Managing Director
BALMAC International, Inc.
Officers
Mario J. Gabelli, CFA
President
Bruce N. Alpert
Vice President and Treasurer
James E. McKee
Secretary
Marc J. Gabelli
Associate Portfolio Manager
Ivan Arteaga, CPA
Associate Portfolio Manager
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Global Telecommunications Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
