<PAGE> 1
GABELLI GLOBAL SERIES FUNDS, INC.
One Corporate Center
Rye, New York 10580 - 1434
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
THIRD QUARTER REPORT
SEPTEMBER 30, 1996
TO OUR SHAREHOLDERS:
European equities markets, among overseas markets, performed best during
the quarter, helped by declining interest rates. Emerging markets, with some
exceptions, fared poorly. In the United States, robust second quarter GDP growth
of 4.8%, higher energy and agricultural commodities prices, plus strong
employment numbers rekindled inflationary fears, sparking a 7% correction of the
U.S. market in July. In September, more encouraging economic data, most notably
modest increases in the Producer and Consumer Price Indices, eased inflationary
concerns. Fueled by strong cash flow into equity mutual funds, the DJIA and S&P
500 moved back into record territory.
Despite the performance of the broad markets, the global
telecommunications industry established a disconnection from the averages. In
the third quarter, the Salomon Brothers Telecommunications Index declined 1.9%.
The U.S. telecommunications sector led the decline with a 9% drop. Only the
European and Latin American components of the index appreciated. The Gabelli
Global Telecommunications Fund declined 3.5% in the quarter. The performance of
the U.S. telecommunications industry negatively impacted the performance of the
Fund, which has almost half its assets in the United States. The Fund's 19%
allocation to the stronger European telecommunications sector helped offset this
decline.
INVESTMENT PERFORMANCE (a)
<TABLE>
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Quarter
---------------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<C> <C> <C> <C> <C> <C>
1996: Net Asset Value $11.72 $12.16 $11.73 -- --
Total Return .. 5.4% 3.8% (3.5)% -- --
------ ------ ------ ------ ------
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>
<TABLE>
<CAPTION>
Average Annual Return - September 30, 1996 (a)
----------------------------------------------
<S> <C>
1 Year ....................................................... 7.2%
Life of Fund(b) .............................................. 6.9%
</TABLE>
<TABLE>
<CAPTION>
Dividend History
----------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
<S> <C> <C>
December 29, 1995 $0.182 $11.12
December 30, 1994 $0.095 $ 9.73
December 31, 1993 $0.102 $10.20
</TABLE>
(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. Investing in foreign
securities involves risks not ordinarily associated with investments in domestic
issues, including currency fluctuation, economic and political risks. (b) From
commencement of operations on November 1, 1993.
<PAGE> 2
During the nine months ended September 30, 1996, the Fund's total return
was 5.5%. This compares to returns of 13.5% and 11.6% over the same period for
the Standard & Poor's 500 Index (S&P 500) and the Lipper Global Fund Index,
respectively. The S&P 500 is an unmanaged indicator of stock market performance
and the Lipper Global Fund Index covers 176 global open-end mutual funds which
may invest in a diversified group of industry sectors. For the 12 months ended
September 30, 1996, the Fund posted a total return of 7.2% compared to returns
of 20.3% and 13.0% for the S&P 500 and Lipper Global Fund Index, respectively.
Since its inception on November 3, 1993 through September 30, 1996, the
Fund achieved a 21.6% total return, which equates to an average annual return of
6.9%. As of September 30, 1996, the Fund's total net assets were $114.7 million.
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.
COMMENTARY
While the long-term dynamics of the industry remain strong, there are
several open questions. In the United States, who will be the winners and losers
of telecommunications deregulation? Will rules implemented by the FCC and
overseen by antitrust agencies and the Judicial System favor or disfavor new
entrants at the expense of the established service provider? What will a new
administration mean for the telecommunications regulation rewrite? Similar
questions are being asked overseas as well.
Whatever the answers to these questions are, there are attractive
opportunities in the industry. Sweeping deregulation is being implemented in the
U.S., European telecommunications market liberalization is slated for 1998, new
high growth markets will emerge, emerging nations will invest heavily in
building modern systems, and global distribution-enhancing deals will continue
to occur. Strategic combinations will increasingly benefit value investors in
the year ahead.
REGULATORY LIMBO
In prior quarters, we stated that the U.S. Telecommunications Act of 1996
dissolves "artificial" barriers between the local telephone, long distance and
cable TV industries, and unlocks new opportunities for growth. We maintain this
view, but point out that the implementation process will not necessarily be
straightforward and smooth. In the third quarter we saw the first example. In
August 1996 the FCC released the Interconnection Order. It was designed to set
rules on how new rivals could hook up to local phone company networks under the
Telecommunications Act of 1996. These immediately came under considerable
opposition. In October, the U.S. Court of Appeals for the Eighth circuit in
Kansas City, MO suspended key provisions, including contract and pricing rules
that would have forced local phone companies to extend discounts and other
advantages to rivals entering their
2
<PAGE> 3
local phone markets. A hearing is expected in January of 1997. Despite the
challenges, the trend towards deregulation continues and should translate to
stock multiple expansion and price appreciation in the telecommunications
industry as many of the details are worked through.
COMPETITION: REAL OR PERCEIVED?
New sub-segments are being created in the wireless and cable TV
industries. The government auction of Personal Communications Services licenses
will create at least four new wireless service providers in each market. New
technologies, such as digitized wireless cable and direct broadcast satellite,
are providing new methods of distributing high quality video services. Although
competition is intensifying in these sectors, we are seeing opportunities where
we believe investors have overreacted and created irresistible bargains.
The domestic wireless industry is expected to increase its subscriber base
to approximately 100 million by the year 2003. The international opportunity is
even larger. Despite increasing competition, wireless remains an attractive
growth business. In the wireless sector, we favor service providers such as
Telephone and Data Systems -- a company that serves rural areas where
competition should evolve slower than in urban centers. We are also attracted to
companies like Telecom Italia Mobile SpA, and AirTouch Communications, which
have franchises in international markets with much higher growth rates than the
U.S.
Also, we are not yet ready to proclaim the death of the cable TV sector.
Cable TV, with approximately 63 million subscribers, is in an enviable position
to act as a gatekeeper to the home. Only the local telephone company has more
universal coverage. With digitalization, cable companies will increase their
portfolio of services available to consumers and will offer quality similar to
Direct Broadcast Satellite. We admit that competition will increase, and we
agree that DBS offers an attractive high quality product which is becoming
increasingly affordable. Nevertheless, the valuation being given to cable TV
companies by the market implies that their competitors have already won the war.
We believe that this assumption is premature.
We remain bullish on the wireless and cable TV sectors and are taking
advantage of prevailing pessimism to invest in the sector at increasingly
attractive valuations.
GLOBAL MEGADEALS ARE ACCELERATING
Under the new global paradigm "the customer is king", service providers
are learning that they must be attentive to customer needs or face losing them.
Customers want service providers that offer a full array of high quality and
user-friendly global services. In order to meet these requirements and to
improve their competitive position, global telecommunications carriers are
pushing global liberalization to the limit.
Domestic and cross-border mergers, acquisitions and alliances are
accelerating. In the second quarter, four RBOCs, in two separate transactions,
announced their intentions to merge. In the third quarter, WorldCom, the fourth
largest U.S. long distance carrier, announced its intentions to acquire MFS
Communications, the largest Competitive Local Exchange Carrier. Subsequent to
the third quarter, BCE Inc. of Canada, Cable & Wireless of the UK, NYNEX
Corporation, and Le Groupe Videotron of Canada announced their intentions to
reorganize their investments in the UK into a new company, Cable and Wireless
Communications, which would provide a full array of local, long distance and
video services in the United Kingdom.
3
<PAGE> 4
Looking forward, we ask ourselves: Who are the hunters? Who are the
hunted? We believe global giants AT&T, British Telecom, Deutche Telekom, France
Telecom, and GTE are potential hunters. As for the hunted, we remain attracted
to telecommunications carriers we categorize as global asset plays. These
include Telefonica De Espana, with its blue chip portfolio of controlling
interest in Latin American telecommunications companies; Cable and Wireless plc,
with its diversified global portfolio; and BCE, with a portfolio of telephone
companies in Europe, Latin America, and the United States. The upsurge in deals
and alliances increases the likelihood of value-surfacing transactions.
THE PORTFOLIO
GLOBAL ALLOCATION
The chart at the right represents the Fund's holdings by geographic region
as of September 30, 1996. The geographic allocation will change based on current
global market conditions. Countries and/or regions and companies represented in
the chart and below may or may not be included in the Fund's portfolio in the
future.
HOLDINGS BY GEOGRAPHIC REGION - 9/30/96
---------------------------------------
<TABLE>
<CAPTION>
<S> <C>
UNITED STATES 48.8%
EUROPE 19.1%
ASIA/PACIFIC RIM 10.9%
LATIN AMERICA 8.3%
CANADA 8.0%
OTHER 4.9%
</TABLE>
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 - $27.625 - 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 world-wide expansion of wireless communications. There are
currently 80 million cellular customers world-wide, with half of those in the
U.S. Annual growth is 40% to 50%. To consolidate its cellular position in the
U.S., AirTouch has completed the purchase of the 60% of Cellular Communications
Inc. it didn't own for a total of $1.65 billion.
BCE Inc. (BCE - $42.75 - NYSE) is the holding company for Bell Canada and has
controlling interests in Northern Telecom Limited (NT - $57.75 - NYSE) and
BCE Mobile Communications, Inc. (BCX - $32.67 - TSE). There are excellent values
in BCE. For example, "behind" each share of BCE, there is 0.4 share of NT. This
NT interest, marked to market, is worth about $25 per BCE share. The company is
a possible split-up candidate. In the interim, The Canadian Radio and Television
Commission is providing a more attractive framework for BCE to become more
competitive.
Cable & Wireless, PLC (CWP - $20.875 - NYSE) is a United Kingdom-based company
comprised of broad global telecommunications interests. These include 80% of
Mercury Communications, the
4
<PAGE> 5
second largest provider of telecom services in Britain (after British
Telecommunications), 58% of Hong Kong Telecommunications, the dominant telecom
service provider in Hong Kong, Cable & Wireless USA, a U.S.-based long distance
company and numerous other global wired and wireless investments. Deducting
CWP's interest in Hong Kong Tel at its public market value, we are paying about
three times the EBDIT of CWP's other assets. CWP is attractive based on its high
rate of growth and reasonable stock market valuation.
NYNEX Corporation (NYN - $43.50 - NYSE), the holding company for New York
Telephone Company and New England Telephone Company, has agreed to be acquired
by Bell Atlantic to form a larger service "foot print" which will create
economies of scale. About one-third of all long-distance calls originate and/or
terminate in the combined companies' service region. Moreover, Bell Atlantic has
the best customer service record in the nation. The combined companies should be
able to generate accelerated growth. Internationally, NYNEX is the second
largest player in the U.K. cable market. It has also established a significant
presence in Asia, including Thailand and China.
Telecom Italia (TELI.MA - $2.22 - Milan), formerly SIP (Societa Italiana per L'
Esercizio delle Telecomunicazioni p.a.), completed the first phase of the
restructuring process in the Italian telecommunications sector. The company now
provides basic local telephone service to 25 million access lines, domestic and
international long distance service. Its cellular service to more than four
million subscribers was spun off to shareholders a year ago. Telecom Italia is
currently undervalued, selling at less than three times EBITDA.
Telecomunicacoes Brasileiras SA (Telebras) (TBR - $78.50 - NYSE) is the
Brazilian government-controlled monopoly telecommunications holding company
consisting of 28 subsidiaries serving 13.9 million telephone lines and 2.1
million cellular customers in a country with a population of 160 million. The
penetration rate is less than 9% for telephone and 1% for cellular. 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 is benefiting from an improved rate
structure which allows it to recoup inflation-related cost increases on a more
consistent basis.
Tele-Communications, Inc. (TCOMA - $14.9375 - NASDAQ), the largest cable TV
operator in the U.S., serving about 14 million subscribers, is guided by Dr.
John C. Malone - one of the most shareholder sensitive managers we have found.
Given that regulation has historically played a major role in the valuation of
cable properties, we believe that the passage of The Telecommunications Act of
1996, combined with the current deregulatory climate in Congress, could prove to
be a significant catalyst for cable stocks. Strategically, TCOMA is a
well-positioned industry leader, from its wireless telephony PCS venture with
Sprint, Comcast and Cox, to its innovative Internet access business, dubbed "@
Home", to its 80% ownership of Tele-Communications International, Inc.
Telefonica de Espana (TEF - $55.625 - NYSE) is a diversified telecommunications
service provider offering services to more than 15 million lines. The company
also services a fast growing cellular subscriber base which now exceeds 2.0
million subscribers. We consider TEF an ideal way to invest in Latin America,
with a diversified portfolio of telecommunications operators in the region. Its
portfolio of publicly traded Latin American companies includes: Compania de
Telefonos de Chile, Telefonica de Argentina S.A. and Compania Peruana de
Telefonos. TEF also holds interests in non-public Latin
5
<PAGE> 6
American telecom operators in Mexico, Colombia, Puerto Rico, Uruguay and
Venezuela. The company's long-term strategy is to create a Pan-American network,
leveraging the Spanish-speaking world.
Telekom Malaysia Berhad (MYTEF - $8.815 - 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.
Telephone and Data Systems, Inc (TDS - $40.25 - ASE) TDS's management is
oriented to create substantial shareholder value (as compared to focusing on
near-term earnings per share). TDS is a domestic provider of local telephone
service to about 475,000 mostly rural access lines and is the seventh largest
cellular telephone company in the U.S. with a fast growing paging company.
Consolidated operating cash flow rose 25% in 1995, driven mainly by internal
growth in cellular telephone. Cellular telephone subscribers grew by almost 70%
to 710,000 at year-end 1995. We expect strong growth at TDS to result in a
private market value of $160 per share by 2000 with earnings of $4.30 per share.
TDS has been active in the PCS auctions and was the high bidder in eight markets
with a combined population of 28 million people. TDS's investments in U.S.
Cellular, American Portable Telecom Inc. and American Paging, at their current
market prices, are worth $45 per TDS share.
MINIMUM INITIAL INVESTMENT - $1,000
Effective August 12, 1996 The Gabelli Global Telecommunications Fund's
minimum initial investment is $1,000 for all accounts. There are no subsequent
investment minimums. No initial minimum is required for those establishing an
Automatic Investment Plan. The Gabelli Global Telecommunications Fund and many
of our other Funds are available through the no-transaction fee programs at many
major discount brokerage firms.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, quarterly reports, closing prices, IRAs, 401(k)s and other
current news. You can also send us e-mail at [email protected].
6
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IN CONCLUSION
We are not market momentum investors. Our decisions are a function of the
availability of stocks representing good fundamental value. Our low level of
cash reserves reflects our belief that there are numerous values in the market
place of which we can take advantage.
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 1997.
Sincerely,
/s/ Mario J.Gabelli /s/ Marc J. Gabelli
---------------------------- ----------------------------
MARIO J. GABELLI, CFA MARC J. GABELLI
President and Portfolio Manager Associate Portfolio Manager
/s/ Ivan Arteaga
--------------------------
IVAN ARTEAGA, CPA
Associate Portfolio Manager
November 1, 1996
TOP TEN HOLDINGS
SEPTEMBER 30, 1996
------------------
Telecom Italia Mobile SpA AirTouch Communications Inc.
Telefonica de Espana Tele-Communications, Inc.
Telephone & Data Systems, Inc. Telekom Malaysia Berhad
Cable & Wireless plc NYNEX Corporation
Telecomunicacoes Brasileiras S.A BCE, Inc.
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
7
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THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -------------
<C> <S> <C>
COMMON STOCKS -- 95.74%
ALTERNATIVE TELECOMMUNICATION SERVICE
PROVIDERS -- 3.01%
500 Bouygues Group..................... $ 44,507
20,000 GST Telecommunications, Inc.+ ..... 227,500
15,000 ICG Communications Inc. ........... 315,000
1,000 Intermedia Communications of
Florida, Inc.+................... 29,250
2,500 Mannesmann AG...................... 937,377
40,000 MFS Communications Company,
Inc.+............................ 1,745,000
3,000 Veba AG............................ 157,220
-------------
3,455,854
-------------
AVIATION: PARTS AND ACCESSORIES -- 1.51%
30,000 General Motors Corporation Cl. H... 1,732,500
-------------
BROADCASTING -- 0.11%
1,000 British Sky Broadcasting Group
ADR.............................. 55,000
3,000 U.S. Satellite Broadcasting Co. ... 69,750
-------------
124,750
-------------
CABLE -- 10.61%
54,000 Adelphia Communications Corporation
Cl. A+........................... 546,750
34,000 Bell Cablemedia plc ADR+........... 569,500
25,000 Cablevision Systems Corporation Cl.
A+............................... 1,087,500
65,000 Century Communications Corporation
Cl. A+........................... 487,500
135,000 Comcast Corporation Cl. A.......... 2,075,625
42,000 Comcast U.K. Cable Partners
Limited+......................... 425,250
10,000 General Cable Corporation plc
ADR+............................. 138,750
50,000 International CableTel
Incorporated+.................... 1,281,250
20,000 NYNEX CableComms Group plc ADR+.... 305,000
95,000 Tele-Communications, Inc. Cl. A+... 1,419,063
39,250 Tele-Communications, Inc./Liberty
Media Group Cl. A+............... 1,123,531
6,000 Telewest Communications plc ADR+... 111,750
95,000 United International Holdings Inc.
Cl. A+........................... 1,294,375
70,000 US WEST Media Group+............... 1,181,250
7,500 Videotron Holdings plc ADR+........ 127,500
-------------
12,174,594
-------------
ELECTRICAL EQUIPMENT -- 0.19%
5,000 General Instrument Corporation..... 123,750
400 Omnipoint Corporation.............. 11,650
5,000 Scientific-Atlanta, Inc. .......... 79,375
-------------
214,775
-------------
ENTERTAINMENT -- 1.36%
12,000 Lodgenet Entertainment
Corporation+..................... 147,000
4,000 Metromedia International Group
Inc.............................. 42,500
<CAPTION>
SHARES VALUE
- ---------- -------------
<C> <S> <C>
10,000 News Corporation Limited ADR....... $ 208,750
30,000 Time Warner Inc. .................. 1,158,750
-------------
1,557,000
-------------
LONG DISTANCE TELEPHONE COMPANIES -- 8.01%
25,000 AT&T Corp. ........................ 1,306,250
25,000 Call-Net Enterprises Inc.+......... 275,330
25,000 Cam-Net Communications Network
Inc.+............................ 50,000
165 DDI Corporation.................... 1,334,014
5,000 Fonorola Inc.+..................... 55,066
148,000 General Communication Inc. Cl.
A+............................... 851,000
6,000 Kokusai Denshin.................... 571,018
40,000 LCI International Inc.+............ 1,260,000
27,000 MCI Communications Corporation..... 691,875
61,000 P.D.L. Holdings Limited............ 442,250
2,000 Petersburg Long Distance Inc.+..... 14,500
12,000 Portugal Telecom S.A. ADR+......... 309,000
40,000 Sprint Corporation................. 1,555,000
22,000 WorldCom Inc.+..................... 470,250
-------------
9,185,553
-------------
PUBLISHING -- 0.47%
17,000 Media General, Inc. Cl. A.......... 535,500
-------------
REGIONAL/LOCAL TELEPHONE SERVICES -- 15.79%
44,000 Aliant Communications Inc. ........ 693,000
34,000 ALLTEL Corporation................. 947,750
24,000 Ameritech Corporation.............. 1,263,000
38,000 Atlantic Tele-Network Inc.+........ 769,500
15,000 Bell Atlantic Corporation.......... 898,125
40,000 BellSouth Corporation.............. 1,480,000
9,000 Bruncor, Inc. ..................... 180,066
25,000 Cincinnati Bell Inc. .............. 1,325,000
62,000 C-TEC Corporation Cl. B............ 1,581,000
1,000 First Pacific Company Ltd. Spons.
ADR.............................. 75,650
8,000 Frontier Corporation............... 213,000
50,000 GTE Corporation.................... 1,925,000
15,000 Island Telephone Company Limited... 265,969
19,000 Maritime Telegraph and Telephone
Company Limited.................. 310,389
12,000 NewTel Enterprises Limited......... 201,322
55,000 NYNEX Corporation.................. 2,392,500
12,000 Pacific Telecom, Inc. ............. 360,000
8,000 Pacific Telesis Group Inc. ........ 269,000
3,000 Peoples Telephone Company Inc.+.... 11,625
10,000 Quebec-Telephone................... 162,261
25,000 SBC Communications, Inc. .......... 1,203,125
23,000 Southern New England
Telecommunications Corporation... 848,125
400 Teleport Communications Group Inc.
Cl. A............................ 9,450
10,000 Telus Corporation.................. 136,931
20,000 US WEST Communications Group....... 595,000
-------------
18,116,788
-------------
</TABLE>
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THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SOFTWARE -- 0.01%
1,600 NetCom ASA......................... $ 15,759
-------------
TELECOMMUNICATIONS (OTHER) -- 0.23%
2,500 Great Nordic Stores................ 239,234
2,000 United Communication Industry...... 20,771
-------------
260,005
-------------
TELEPHONE EQUIPMENT -- 2.03%
80,000 Champion Technology Holdings ADR... 50,688
4,400 Ericsson (L.M.) Telephone Company
ADR.............................. 111,650
2,500 Motorola, Inc. .................... 129,063
25,000 Northern Telecom Limited........... 1,443,750
2,000 Thyssen AG+........................ 369,180
115,500 Time Engineering Berhad............ 229,434
-------------
2,333,765
-------------
TELEPHONE NETWORKS -- 32.40%
110,000 BC TELECOM Inc. ................... 2,200,808
50,000 BCE Inc. .......................... 2,137,500
3,000 BHI Corporation.................... 56,250
18,000 British Telecommunications plc
ADR.............................. 1,005,750
160,000 Cable & Wireless plc ADR........... 3,340,000
20,000 Compania Telefonos Chile S.A.
ADR.............................. 1,932,500
30,000 CP Pokphand Spons. ADR............. 237,363
525,100 CPT Telefonica del Peru Cl. B...... 1,181,527
1,000 CPT Telefonica del Peru Cl. B
ADR.............................. 22,875
3,430 Hellenic Telecommunications
Organization S.A. (OTE).......... 57,915
15,000 Hong Kong Telecommunications Ltd.
ADR.............................. 270,000
1,000 Hungarian Telephone & Cable
Corporation+..................... 12,125
40 Japan Telecom Co. Ltd. ............ 987,610
167 Nippon Telegraph & Telephone
Corporation...................... 1,229,485
5,000 Nippon Telegraph & Telephone
Corporation ADR.................. 191,250
50,000 Nordictel Holdings AB.............. 810,220
150,000 Orient Telecom & Technology
Holdings Limited+................ 35,109
800 Pakistan Telecommunications GDR+... 70,000
27,500 Philippine Long Distance Telephone
Company.......................... 1,718,750
2,000 PT Indonesia Satellite ADR......... 66,000
8,000 PT Telekomunikasi Indonesia........ 249,000
33,000 Royal PTT Nederland NV ADR(a)...... 1,138,750
20,000 Singapore Telecommunications
Limited.......................... 46,023
30,000 STET SpA -- Societa Financiaria
Telfonica SpA ADR................ 1,038,750
8,000 Tele Danmark A/S................... 181,818
8,000 Tele Danmark A/S ADR............... 189,000
18,000 Telecom Argentina Stet -- France
Telecom S.A. ADR................. 726,750
<CAPTION>
SHARES VALUE
- ---------- -------------
<C> <S> <C>
325,800 Telecom Asia....................... $ 660,059
2,000 Telecom Asia ADR+.................. 38,200
31,000 Telecom Corporation of New Zealand
Ltd. ADR......................... 2,348,250
350,000 Telecom Italia SpA+................ 778,672
42,000 Telecomunicacoes Brasileiras
(Telebras) S.A. Spons. ADR....... 3,297,000
3,000,000 Telecomunicacoes de Rio de
Janeiro+......................... 325,269
938,570 Telecomunicacoes de Sao Paulo SA
(Telesp)......................... 158,573
4,000,000 Telecommunications of Jamaica...... 376,000
45,000 Telefonica de Argentina S.A. ADR... 1,119,375
65,000 Telefonica de Espana ADR........... 3,615,625
50,000 Telefonos De Mexico S.A. Cl. L
ADR.............................. 1,606,250
190,000 Telekom Malaysia Berhad............ 1,674,910
8,075 Thai Telephone & Telecom GDR+...... 41,425
-------------
37,172,736
-------------
WIRELESS COMMUNICATIONS -- 20.01%
10,000 360 Communications Company......... 235,015
40,000 ABC Communications Holdings
Ltd. ............................ 12,285
100,000 AirTouch Communications Inc.+...... 2,762,500
1,000 American Mobile Satellite
Corporation+..................... 14,500
72,000 American Paging, Incorporated+..... 414,000
20,000 American Portable Telephone
Inc. ............................ 202,500
100 Asia Satellite Telcommunications
Holdings Ltd. ................... 2,688
14,200 Associated Group, Inc. Cl. A+...... 450,850
16,000 Associated Group, Inc. Cl. B+...... 502,000
14,000 BCE Mobile Communications Inc.+.... 457,416
20,000 Cellular Communications
International Inc.+.............. 670,000
2,000 Cellular Communications of Puerto
Rico, Inc.+...................... 51,000
110,000 Centennial Cellular Corp. Cl. A+... 1,498,750
20,000 Century Telephone Enterprises,
Inc. ............................ 687,500
2,000 Commnet Cellular Inc.+............. 57,750
50,000 COMSAT Corporation................. 1,131,250
10,000 Echostar Communications Corporation
Cl. A............................ 272,500
5,000 Globalstar Telecommunications
Limited+......................... 257,500
55,000 Grupo Iusacell S.A. ADR Ser. D+.... 371,250
26,000 Himachal+.......................... 29,250
24,000 Jasmine International(a)........... 76,947
20,000 Loral Space & Communications
Ltd. ............................ 315,000
5,300 Matrix Telecommunications Ltd.+.... 9,391
2,500 Metrocall, Inc.+................... 15,938
15,000 Mobile Telecommunication
Technologies Corp.+.............. 236,250
12,154 NEXTEL Communications, Inc. Cl.
A+............................... 224,849
8,500 PanAmSat Corporation+.............. 236,406
8,000 Pittencrieff Communications,
Inc.+............................ 43,000
37,500 PriCellular Corporation+........... 539,063
</TABLE>
9
<PAGE> 10
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
WIRELESS COMMUNICATIONS (CONTINUED)
45,000 Rogers Cantel Mobile Communications
Cl. B............................ $ 888,750
20,000 Rogers Communications, Inc. Cl.
B................................ 120,000
4,000 Rural Cellular Corp. Cl. A......... 42,000
73,821 Securicor Group plc................ 313,286
224,000 Technology Resources Industries+... 589,708
1,300,000 Telecom Italia Mobile SpA+......... 2,887,940
25,000 Tele-Communications International,
Inc.+............................ 378,125
4,000 Teleglobe Inc. .................... 70,778
85,000 Telephone and Data Systems,
Inc. ............................ 3,421,250
22,000 Total Access Communications plc+... 163,350
3,000 United States Cellular
Corporation+..................... 90,750
1,500 Vanguard Cellular Systems, Inc. Cl.
A+............................... 29,063
64,000 Vodafone Group plc ADR............. 2,184,000
-------------
22,956,348
-------------
TOTAL COMMON STOCKS................ 109,835,927
-------------
CONVERTIBLE PREFERRED STOCKS -- 2.08%
CABLE -- 1.03%
19,500 Tele-Communications, Inc. Cv. Pfd.
Ser. E........................... 1,182,188
-------------
LONG DISTANCE TELEPHONE COMPANIES -- 0.63%
10,000 Philippine Long Distance Telephone
Company 7.00% Cv. Pfd. Ser.
III.............................. 581,250
4,000 Sprint Corporation 8.25% Cv.
Pfd. ............................ 140,000
-------------
721,250
-------------
WIRELESS COMMUNICATIONS -- 0.42%
6,222 AirTouch Communications Inc. 6.00%
Cv. Pfd. Cl. B................... 177,327
3,996 AirTouch Communications Inc. 4.25%
Cv. Pfd. Cl. C................... 189,810
5,000 Mobile Telecommunication
Technologies Corp. $2.25 Cv.
Pfd.(a) ......................... 121,250
-------------
488,387
-------------
TOTAL CONVERTIBLE PREFERRED
STOCKS........................... 2,391,825
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ------------ ------------
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS -- 1.85%
TELEPHONE NETWORKS -- 0.90%
$1,000,000 Telekom Malaysia Berhad Sub.
Deb. Cv. 4.00%, 10/03/04(a)... $ 1,036,000
------------
WIRELESS COMMUNICATIONS -- 0.95%
300,000,000(b) Softe SA Unsub. Deb. Cv. 4.25%,
07/30/98...................... 297,240
250,000 Technology Resources Industries
Sub. Deb. Cv. 2.75%,
11/28/04(a)................... 282,500
500,000 Tele 2000 Sub. Deb. Cv. 9.75%,
04/14/97(a)................... 502,500
------------
1,082,240
------------
TOTAL CONVERTIBLE CORPORATE
BONDS......................... 2,118,240
------------
PREFERRED STOCKS -- 0.08%
TELEPHONE EQUIPMENT -- 0.08%
2,000 Nokia Group AB Preference....... 88,500
------------
TOTAL PREFERRED STOCKS.......... 88,500
------------
TOTAL INVESTMENTS -- 99.75%
(Cost: $99,284,863)........... 114,434,492
CASH AND OTHER ASSETS,
IN EXCESS OF
LIABILITIES -- 0.25%.......... 281,677
------------
NET ASSETS -- 100.00%
(9,780,103 shares
outstanding).................. $114,716,169
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE............... $11.73
-----
-----
</TABLE>
- ---------------
<TABLE>
<C> <C> <S>
+ -- 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
September 30, 1996, Rule 144A securities amounted to
$3,187,197 or 2.8% of net assets.
(b) -- Principal amount denoted in Italian Lira.
</TABLE>
10
<PAGE> 11
GABELLI'S FAMILY OF FUNDS
GABELLI ASSET FUND
Invests in a diversified portfolio of companies selling below their private
market value. The Fund's primary objective is to seek growth of capital.
(No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI GROWTH FUND
Invests in a diversified portfolio of common stocks that have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is to
seek capital appreciation by employing an earnings-driven investment approach.
(No-load)
Portfolio Manager: Howard F. Ward, CFA
GABELLI/WESTWOOD FUNDS
Three investment portfolios designed to pursue a variety of investment
objectives. Equity Fund seeks growth, Balanced Fund seeks income and growth,
Intermediate Bond Fund seeks current income. (No-load)
Portfolio Manager: Susan Byrne
GABELLI SMALL CAP GROWTH FUND
Invests primarily in equity securities of smaller companies (total market
capitalization of less than $500 million) which are believed likely to have
rapid growth in revenues and earnings. The Fund's primary objective is to seek
capital appreciation. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI EQUITY INCOME FUND
Invests primarily in a portfolio of income producing equity securities. Pays
quarterly dividends. The Fund's primary objective is to seek a high level of
total return. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI VALUE FUND
Invests in a concentrated portfolio of securities of companies which are selling
below their private market value. The Fund's primary objective is long-term
capital appreciation. Max. Sales charge: 5 1/2%
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI U.S. TREASURY MONEY MARKET FUND
Invests exclusively in short-term U.S. Treasury securities. The Fund's primary
objective is to provide high current income consistent with the preservation of
principal and liquidity. An investment in the Fund is neither insured nor
guaranteed by the U.S. Government and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per share.
Portfolio Manager: Ronald Eaker
- --------------------------------------------------------------------------------
GABELLI FUNDS
Searching for Opportunities [LOGO]
WORLDWIDE
- --------------------------------------------------------------------------------
GLOBAL SERIES
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Invests in telecommunications companies throughout the world. Targets
undervalued companies with strong earnings per share and cash flow dynamics. The
Fund's primary objective is to seek capital appreciation. (No-load)
Team Manager: Mario J. Gabelli
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Invests principally in bonds and preferred stocks which are convertible into
common stock of foreign and domestic companies. The Fund's primary objective is
to seek a high level of total return through a combination of current income and
capital appreciation. (No-load)
Portfolio Manager: Hart Woodson
GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
Invests in companies involved in communications, creativity and copyright
throughout the world. The Fund will also invest in companies participating in
emerging technological advances in interactive services and products. The Fund's
primary objective is to seek capital appreciation. (No-load)
Portfolio Manager: Marc J. Gabelli
GABELLI GOLD FUND
Invests in a global portfolio of equity securities of gold mining and related
companies. The Fund's primary objective is to seek capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of worldwide economic, financial and political factors. (No-load)
Portfolio Manager: Caesar Bryan
GABELLI INTERNATIONAL GROWTH FUND
Invests in a diversified portfolio of equity securities of companies outside of
the U.S. Seeks to achieve international diversification and capital
appreciation. (No-load)
Portfolio Manager: Caesar Bryan
The five funds above invest in foreign securities which involves risks not
ordinarily associated with investments in domestic issues, including currency
fluctuation, economic and political risks.
Distributed by Gabelli & Company, Inc.
<PAGE> 12
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.)
<TABLE>
<S> <C>
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Karl Otto Pohl
Chairman and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Funds, Inc.
Felix J. Christiana Werner J. Roeder, MD
Former Senior Vice President Director of Surgery
Dollar Dry Dock Savings Bank Lawrence Hospital
Anthony J. Colavita Anthonie C. van Ekris
Attorney-at-Law Managing Director
Anthony J. Colavita, P.C. BALMAC International, Inc.
John D. Gabelli
Vice President
Gabelli & Company, Inc.
OFFICERS
Mario J. Gabelli, CFA Marc J. Gabelli
President Associate Portfolio Manager
Bruce N. Alpert Ivan Arteaga, CPA
Vice President and Treasurer Associate Portfolio Manager
James E. McKee
Secretary
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom
</TABLE>
- ----------------------------------------------------------
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.
- ----------------------------------------------------------
LOGO
THE
GABELLI
GLOBAL
TELECOMMUNICATIONS
FUND
THIRD QUARTER REPORT
SEPTEMBER 30, 1996
