[PHOTOGRAPH]
The
Gabelli
Global
Convertible
Securities
Fund
ANNUAL REPORT
DECEMBER 31, 1995
<PAGE>
Gabelli Global Series Funds, Inc.
One Corporate Center
Rye, New York 10580 - 1434
The Gabelli Global Convertible Securities Fund
Annual Report - 1995
To Our Shareholders:
In the fourth quarter of 1995, The Gabelli Global Convertible Securities
Fund's share price increased 1.2% from $11.05 on September 30, 1995, to an
adjusted net asset value of $11.18 on December 31, 1995 which reflects the $0.39
dividend paid on December 29, 1995. The Fund's total return was 12.6% for the
year ended December 31, 1995. Global convertible markets, measured by the
Jefferies Global Convertible Bond Index, returned 4.0% in the fourth quarter and
10.7% for the year. The Lipper Analytical Services, Inc. Convertible Securities
Index increased 2.4% for the quarter and 20.8% for the year. Given the domestic
scope of the Lipper Convertible Index, it does not reflect the global markets in
which the Fund invests. 1995 was characterized by strong domestic equity and
bond markets while international markets lagged. For 1996, we expect
international markets, particularly ones in Asia, to outperform those in the
U.S.
Our Investment Objective
The Fund's objective is to obtain a high rate of total return by investing
in global convertible securities. We expect to achieve an above-average rate of
return by investing primarily in coupon paying convertible securities which meet
our selective investment criteria.
<TABLE>
<CAPTION>
INVESTMENT RESULTS (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Quarter
------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<C> <C> <C> <C> <C> <C>
1995: Net Asset Value ............................ $10.09 $10.64 $11.05 $10.79 $10.79
Total Return ............................... 1.6% 5.5% 3.9% 1.2% 12.6%
- ------------------------------------------------------------------------------------------------------------------------------------
1994: Net Asset Value ............................ $10.38 $10.37 $10.64 $9.93 $9.93
Total Return ............................... 3.8%(b) (0.1)% 2.6% (5.2)% 0.9%(b)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Returns - December 31, 1995 (a)
----------------------------------------------
1 Year ............................................. 12.6%
Life of Fund (b) ................................... 6.9%
- --------------------------------------------------------------------------------
Dividend History
- --------------------------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 29, 1995 $0.393 $10.79
December 30, 1994 $0.160 $9.93
(a) Average annual and total returns reflect changes in share price,
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 February 3, 1994.
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
Convertible Securities Fund, The Jefferies Global Convertible Index and the
Lipper Analytical Services Convertible Securities Fund Index
[The following table was represented by a line graph in the printed material.]
Lipper
Global Convertible Analytical Jefferies Global
Date Securities Convertible Convertible Index
---- ---------- ----------- -----------------
2/3/94 $10,000 $10,000 $10,000
12/30/94 $10,090 $ 9,324 $ 9,694
12/31/95 $11,360 $11,262 $10,731
**The Fund is now being compared to the Jefferies Global Convertible Index
instead of the 60% Margan Stanley World Index/40% J.P. Morgan Global Government
Bond Index. The Jefferies Index provides a better comparison to global
convertible markets and was not in existence last year. A $10,000 investment in
the 60% Morgan Stanley World Index/40% J.P. Morgan Global Government Bond Index
on February 3, 1994 would be worth $11,800 on December 31, 1995.
- --------------------------------------------------------------------------------
Our Approach
We weigh both country-specific and company-specific factors to make our
investment decisions. Country-specific factors include political stability,
economic growth, inflation and trends in interest rates. With regard to
companies, we seek firms which are undervalued in relation to their long-term
potential value. We then look for some dynamic in the country or company which
can unlock this value. In the case of global telecommunications, the dynamic is
the privatization of state-owned monopolies. In developing countries, it is the
need to provide the infrastructure for growth. In Japan, it is the change from
an industrial to a consumer-oriented economy. In commodities, it is the pick-up
in industrial demand.
[GRAPHIC]
Commentary -- Fourth Quarter 1995
Domestic equity and debt markets rose during the fourth quarter in
anticipation of the 25 basis point cut in the federal funds rate to 5.25%.
International equity markets firmed as lower interest rates in the U.S. paved
the way for rate cuts in Europe. Following the Federal Reserve's move to loosen
credit, Germany's Central Bank cut its key lending rate, the repo rate, by 25
basis points to 3.75%. France's call money rate fell from over 5% to
approximately 4.5% in less than two weeks. As Anglo economies slow, we believe
the recovery in Japan will fuel continued growth throughout Asia. Approximately
45% of the Fund's assets have been committed to this region.
A New Look at Japan
The Bank of Japan has enacted a reflationary policy designed to lift the
stagnant Japanese economy. Average monthly money supply grew by 13% in the
fourth quarter of 1995. Retailers have been the first to respond, with November
department store sales increasing for the first time since February 1992. Rapid
money growth, together with lower interest rates, will stimulate consumer
confidence and economic expansion.
2
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Since the third quarter, the dollar's 21% appreciation over the yen has
improved the competitive advantage of Japanese industry. Since July, the Nikkei
225 Index rose 37%, and its most heavily weighted member, Sony Corporation, was
up over 50%. The market is anticipating strong economic growth and a rebound in
corporate earnings. We feel this is only the beginning.
The Bank of Japan's reflationary policy has other important implications
for investors. The effects of high money growth will inevitably weaken the yen
relative to other major currencies. Consequently, we have either selected dollar
denominated convertible securities or have hedged the currency risk.
Domestic manufacturers stand to gain from a rise in private consumption.
Companies that derive earnings from consumer spending such as Takashimaya Co.
Ltd., the oldest and largest Japanese department store/mail-order retailer
should benefit. Takashimaya has been a top performing holding, gaining almost
145% since its purchase in August 1995.
Foreign manufacturers in countries that have established a favorable trade
relationship with Japan will also benefit. In 1994, Indonesia led the South East
Asian community by selling 27% of its exports to Japan, compared with the 14.6%
of total exports it sold to the U.S. Of the Fund's 30% exposure to non-Japan
Asia, 20% is currently invested in Indonesia.
Export driven companies in other nations with ties to Japan are in a good
position to gain from its recovery. One such example is Nan Ya Plastics
Corporation, a major Taiwanese manufacturer of plastic and chemical fiber
products for industrial uses throughout Asia. Nan Ya is currently expanding the
operating capacity of many of its industrial product lines to meet growing Asian
demand.
THE PORTFOLIO
Global Allocation
The chart at the right represents the Fund's holdings by geographic region
on December 31, 1995. The geographic allocation will change based on current
global market conditions. Countries and/or regions represented in the chart and
below may or may not be included in the Fund's future portfolio.
HOLDINGS BY GEOGRAPHIC REGION 12/31/95
[The following table was represented by a pie chart in the printed material.]
Asia/Pacific Rim 26.3%
Europe 17.6%
Japan 14.1%
Cash 5.8%
South Africa 3.5%
Canada 3.2%
Latin America 2.6%
United States 26.9%
Let's Talk Converts
The following are specifics on selected holdings of our Fund's
investments. Favorable EBITDA (earnings before interest, taxes, depreciation and
amortization) prospects do not necessarily translate into higher prices, but
they do express a positive trend which we believe will develop over time.
Finaxa (Sub Deb. Conv. 3.00% 01/01/01) is the holding company for French insurer
Axa SA. Axa is the second largest insurance company in France, with diversified
interests throughout Europe, North America and Asia. Axa markets life and
non-life insurance products under its own name in Germany, Belgium, Canada,
Spain, the UK and Italy, as well as in France. In the U.S., Axa owns 60.4% of
Equitable Cos. Inc., which is the eighth largest U.S. life insurer and the
parent company of Donaldson Lufkin & Jenrette, a leading integrated investment
3
<PAGE>
bank. Axa's recent 51% acquisition of National Mutual, Australia's second
largest life insurance company complements the aggressive Asian expansion plan
that has been set forth by management.
The French Franc denominated bond is an attractive alternative to the
stock. At a price of $111.60 it sells at a low 7% premium. The current yield of
2.70% is 59 basis points higher than the stock. The bond cannot be called until
January of 1998 at a price of $111.66.
Cookson Group plc (Sub. Deb. Conv. 7.00% 11/02/04) is a major international
supplier of industrial ceramic supplies, plastic additives and electronic
materials. After restructuring in 1989, the company has achieved double digit
operating margins and sales increases. Management's long-term goal is to
concentrate on businesses in which it has established strong market positions
and which demonstrate strong sales growth. In 1995, its electronic materials
division grew its profits by 40%. Its industrial ceramics operations also had a
strong year with a 26% increase in operating profits. Management plans to
enhance shareholder value by acquiring entities that fit its "25% return on
investment" criteria. Sales are global with 65% from the U.S., 30% from Europe,
and the remainder from Asia.
The Cookson convertible ($117.25) has a 10% premium and a 6% current
yield. The stock yields only 3%. The bond cannot be called until November of
1999 at par.
Kawasaki Heavy Industries Ltd. (Sub. Deb. Conv. 0.80% 09/28/01) KHI is a leading
international manufacturer of industrial goods, with a product line ranging from
precision hydraulic components to power plants and bridges. Additionally, it is
the manufacturer of the world-renowned Kawasaki motorcycle and motorized Jetski.
The company also manufactures ships, rolling stock, aircraft and industrial
plants. Management has taken steps to blunt the effect of Japan's five-year
recession by consolidating its operations into four major segments: Transport
Equipment, Aerospace, Industrial Equipment, and International Subsidiary
Mediation. Weakness in the Japanese economy caused non-consolidated sales to
fall 3% although its Ship & Plant Engineering groups posted sales increases. KHI
is a cyclical Japanese company that should benefit from an economic recovery.
The KHI bond ($110) is a close alternative to the equity with a low 7%
premium. Its bond value, which is estimated to be in the low 90s, provides
downside support.
Magma Copper Company (Cv. Pfd. 6.00% Series A) is one of the biggest primary
copper producers in the United States. Magma produces high-quality copper
cathodes and rods for sale to customers worldwide. Its smelting operations
represent 25% of the United States' smelting capacity. On December 1, Broken
Hill Proprietary Co., Australia's largest resources company, agreed to buy the
shares of Magma at $28 per share, almost 30% above its market price. Magma
Copper is a great example of our value style investment philosophy. Over the
last four years, Magma had increased its cash from operations by 115% on average
annual sales growth of approximately 8%. With news of the takeover, the
convertible preferred debt leaped from $73.75 to over $100.
Yang Ming Marine Transport (Sub. Deb. Conv. 2.00% 10/06/01) is an international
"container liner" service, transporting cargo in containers for customers
throughout the world. The company owns a fleet of 25 vessels, making it the
second largest container liner company in the Republic of China (Taiwan). The
trans-Pacific route between Asia and North America accounted for 58.8% of
revenues in the year ended June 1995; the Asia-Europe route, 35.8%; and the
Intra-Asia, Far East/Australia route, 5.5%. The Trans-Pacific Stabilization
Agreement between Asia and the United States increased freight rates for
shipments between Japan and the U.S. The company should continue to benefit from
its exposure to Asian export growth.
The bonds ($110.25) have a yield to maturity of 4.7% on a low 11% premium.
The convertible's put feature at a price of $123.16 in October 1999 offers
4
<PAGE>
excellent downside protection with a bond value of approximately $100.
Takashimaya Co. Ltd. (Warrants 07/02/96) Takashimaya recently reported
better-than-expected profit growth due to successful cost cutting efforts.
Takashimaya stands to benefit from strength in the Japanese retail sector.
Each dollar-denominated warrant entitles the holder to purchase 447 shares
of Takashimaya at 1569 yen per share until July 1996. The common stock currently
trades at 1670 yen. The warrant's low 1% premium provides an efficient way to
gain exposure to the stock with reduced currency risk.
Nan Ya Plastics Corporation (Sub. Deb. Conv. 1.75% 07/19/01) is the world's
largest plastics processor and the third largest producer of both polyester and
copper clad laminates. Profit rose 22% last year as cotton shortages boosted
demand for substitutes. Nan Ya is expanding production both in Taiwan and China.
China's plans to lower import tariffs will increase Nan Ya's export revenues.
The convertible bond ($99.00) enjoys a 7.49% yield based on the July 2001
premium redemption price of $135.67 dollars. The bond provides an attractive
yield advantage over the common and excellent down side protection.
Minimum Initial Investment - $1,000
The minimum initial investment will be $1,000 until the Fund has grown to
over $100,000,000 in assets under management, at which time the minimum will
increase to $25,000 for new investors. There is no initial minimum investment
for accounts established through our Automatic Investment Plan. Shares of the
Fund are offered at no load through April 30, 1996. After such date, the Fund
will impose a 4.5% front end sales charge on all new accounts. Shareholders in
the Fund prior to that date will never be subject to a load, even on subsequent
investments.
In Conclusion
The future for investing in global convertibles promises to be rewarding.
We appreciate your confidence in our investment abilities and promise to
continue working hard to find the best investment opportunities in the world.
We thank you for your investment and will strive to achieve our shared
investment objective of strong risk adjusted returns.
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 GAGCX. Please call us during the
day for further information.
Sincerely,
/s/ Hart Woodson
A. Hartswell Woodson, III
February 1, 1996 Vice President and Portfolio Manager
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.
5
<PAGE>
<TABLE>
<CAPTION>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments -- December 31, 1995
====================================================================================================================================
Principal Market
Amount Cost Value
------ ---- -----
<S> <C> <C>
CONVERTIBLE SECURITIES -- 89.05%
CONVERTIBLE CORPORATE BONDS -- 75.05%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.54%
1,147,500(a) Michelin France Sub. Deb. Cv.
2.50%, 01/01/01 .................................................... $ 225,315 $ 242,184
------------ ------------
BUILDING AND CONSTRUCTION -- 2.71%
$ 100,000 Bacnotan Consolidated Sub.
Deb. Cv.5.50%, 06/21/04 ............................................ 98,842 86,000
200,000 Tata Iron & Steel Co. Ltd.
Sub. Deb. Cv.2.25%, 04/01/99 ....................................... 196,807 176,500
150,000 YTL Corporation Berhad Sub.
Deb. Cv. Zero Cpn., 08/15/02 ....................................... 162,750 164,250
------------ ------------
458,399 426,750
------------ ------------
BUSINESS SERVICES -- 2.60%
100,000 International Container Terminal
Services Sub. Deb. Cv.
5.00%, 09/15/01 .................................................... 79,101 79,000
150,000 News American Holdings
Incorporated Sub. Deb. Cv.
Zero Cpn., 03/11/13 ................................................ 64,417 68,250
350,000 Softkey International Inc. Sub.
Deb. Cv. 5.50%, 11/01/00 ........................................... 329,166 262,500
------------ ------------
472,684 409,750
------------ ------------
CABLE -- 2.68%
300,000 Comcast Corporation Sub.
Deb. Cv. 1.125%, 04/15/07 .......................................... 154,743 151,500
250,000 International CableTel
Incorporated Sub. Deb. Cv.
7.25%, 04/15/05 .................................................... 252,999 270,000
------------ ------------
407,742 421,500
------------ ------------
CONSUMER PRODUCTS -- 7.02%
100,000 Goldstar Co. Ltd. Sub. Deb.
Cv. 3.25%, 12/31/06 ................................................ 102,043 126,000
Matsushita Electric Industrial
Co., Ltd.:
20,000,000(b) Sub. Deb. Cv. 1.30%,
03/29/02 ......................................................... 224,423 211,995
20,000,000(b) Sub. Deb. Cv. 2.70%,
05/31/02 ......................................................... 245,615 236,799
10,000,000(b) Sony Corporation Sub. Deb.
Cv.1.40%, 09/30/03 ................................................. 108,153 115,590
140,000(c) Tate & Lyle Public Limited
Company Sub. Deb. Cv. 5.75%
03/21/01 ........................................................... 191,609 186,888
250,000 TheraTx Inc. Sub. Deb. Cv.
8.00%, 02/01/02(g) ................................................. 250,000 228,125
------------ ------------
1,121,843 1,105,397
------------ ------------
DIVERSIFIED INDUSTRIAL -- 19.26%
100,000 Astra International Inc., PT
Sub. Deb. Cv. 6.75%,
05/30/06 ........................................................... 87,000 93,000
350,000 Ayala Corp. Sub. Deb. Cv.
Zero Coupon, 12/08/00 .............................................. 252,597 252,438
250,000 Ballarpur Industries Ltd. Sub.
Deb. Cv. 4.00%, 04/01/99 ........................................... 242,110 226,250
100,000 China Resources Enterprise
Sub. Deb. Cv. 3.00%,
11/24/05 ........................................................... 103,484 109,375
200,000(c) Cookson Group plc Sub. Deb.
Cv. 7.00%, 11/02/04 ................................................ 327,220 365,025
1,328,900(a) Finaxa Sub. Deb. Cv. 3.00%,
01/01/01 ........................................................... 287,014 307,199
997,500(a) Groupe Saint Louis Sub. Deb.
Cv. 7.00%, 01/01/00 ................................................ 221,294 241,273
20,000,000(b) Kawasaki Heavy Industries
Ltd. Sub. Deb. Cv. 0.80%,
09/28/01 ........................................................... 219,358 213,158
10,000,000(b) Kokusai Electric Co. Ltd. Sub.
Deb. Cv. 1.30%, 09/30/02 ........................................... 110,072 115,299
100,000 Loxley Co. Ltd. Sub. Deb. Cv.
3.50%, 04/18/05 .................................................... 109,473 114,500
100,000 Nan Ya Plastics Corporation
Sub. Deb. Cv. 1.75%,
07/19/01 ........................................................... 93,517 99,000
20,000,000(b) Nissen Co. Ltd. Sub. Deb. Cv.
2.10%, 06/20/02 .................................................... 233,593 204,438
140,000(d) Oce Van Der Grinten NV Sub.
Deb. Cv. 4.75%, 06/15/01 ........................................... 94,629 94,406
100,000 President Enterprises Sub.
Deb. Cv. Zero Coupon,
07/22/01 ........................................................... 112,750 132,000
100,000 PT Eka Gunatama Mandiri
Sub. Deb. Cv. 4.00%,
10/04/97 ........................................................... 96,588 116,500
200,000 Renong Berhad Sub. Deb. Cv.
2.00%, 07/15/05(g) ................................................. 201,497 202,000
The accompanying notes are an integral part of the financial statements.
</TABLE>
6
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<TABLE>
<CAPTION>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments (Continued) -- December 31, 1995
====================================================================================================================================
Principal Market
Amount Cost Value
------ ---- -----
<S> <C> <C>
$ 150,000 Samancor O/S Financing Ltd.
Sub. Deb. Cv. 7.00%,
06/30/04 ........................................................... $ 142,779 $ 145,500
------------ ------------
2,934,975 3,031,361
------------ ------------
ENERGY -- 2.65%
150,000 Banpu Coal Sub. Deb. Cv.
3.50%, 08/25/04 .................................................... 156,848 186,000
150,000(c) Elf Enterprise Finances Sub.
Deb. Cv. 8.75%, 06/27/06 ........................................... 237,284 231,241
------------ ------------
394,132 417,241
------------ ------------
FINANCIAL SERVICES -- 7.73%
250,000 Bangkok Bank Ltd. Sub.
Deb. Cv. 3.25%, 03/03/04 ........................................... 231,546 266,250
140,000 Goldlion Capital Ltd. Sub.
Deb. Cv. 4.875%, 02/01/99 .......................................... 140,406 157,500
150,000 Investec O/S Finance BVI Sub.
Deb. Cv. 6.375%, 11/30/02 .......................................... 153,598 162,000
50,000 Lend Lease Finance Interna-
tional Ltd. Sub. Deb. Cv.
4.75%, 06/01/03 .................................................... 53,805 61,250
100,000 Metrobank International
Finance Ltd. Sub. Deb. Cv.
2.75%, 09/10/00 .................................................... 100,000 108,000
250,000 Mitsubishi Trust & Banking
Corp. Sub. Deb. Cv. 3.25%,
09/30/03 ........................................................... 230,922 226,250
250,000 Sappi BVI Finance Ltd. Sub.
Deb. Cv. 7.50%, 08/01/02 ........................................... 237,535 236,250
------------ ------------
1,147,812 1,217,500
------------ ------------
FOOD AND BEVERAGES -- 1.70%
270,000(a) BSN SA Unsub. Deb. Cv.
6.60%, 01/01/00 .................................................... 53,430 67,332
500,000(e) Danisco A/S Sub. Deb. Cv.
5.00%, 02/21/04 .................................................... 95,943 98,105
100,000 Jinro Ltd. Sub. Deb. Cv.
0.25%, 09/30/09 .................................................... 92,262 102,750
------------ ------------
241,635 268,187
------------ ------------
HEALTH CARE -- 1.38%
500,000 Roche Holding Ltd. Sub. Deb.
Cv. Zero Coupon, 04/20/10 .......................................... 186,887 216,875
------------ ------------
INDUSTRIAL EQUIPMENT AND SUPPLIES -- 3.74%
100,000 Alfa S.A. de C.V. Sub. Deb.
Cv. 8.00%, 09/15/00 ................................................ 100,000 98,375
20,000,000(b) Nippon Electric Glass Co.,
Ltd. Sub. Deb. Cv. 2.00%,
03/29/02 ........................................................... 222,858 223,428
250,000 Thermo Electron Corporation
Sub. Deb. Cv. 4.25%,
01/01/03 ........................................................... 250,000 267,500
------------ ------------
572,858 589,303
------------ ------------
METALS AND MINING -- 3.54%
100,000 Bema Gold Corporation Sub.
Deb. Cv. 7.50%, 02/28/00 ........................................... 100,000 114,000
100,000 Coeur d'Alene Mines Corp-
oration Sub. Deb. Cv.
6.375%, 01/31/04 ................................................... 100,897 93,875
150,000 Inco Ltd. Sub. Deb. Cv.
5.75%, 07/01/04 .................................................... 168,189 197,250
100,000(c) Lonrho Finance Public Sub.
Deb. Cv. 6.00%, 02/27/04 ........................................... 141,153 152,675
------------ ------------
510,239 557,800
------------ ------------
PAPER AND FOREST PRODUCTS -- 2.20%
500,000(f) Kymmene Corporation Sub.
Deb. Cv. 8.25%, 11/18/43 ........................................... 111,638 120,644
240,000 PT Pabrik Kertas Tjiwi Sub.
Deb. Cv. 7.25%, 04/12/01 ........................................... 219,693 226,200
------------ ------------
331,331 346,844
------------ ------------
REAL ESTATE / DEVELOPMENT -- 5.96%
20,000,000(b) Heiwa Real Estate Sub. Deb.
Cv. 2.50%, 03/29/02 ................................................ 231,576 222,847
200,000 Henderson Capital International
Sub. Deb. Cv. 4.50%,
10/27/96 ........................................................... 197,379 205,500
250,000 Liberty Property Trust Sub.
Deb. Cv. 8.00%, 07/01/01 ........................................... 250,000 257,813
150,000 New World Development Co.
Sub. Deb. Cv. 4.375%,
12/11/00 ........................................................... 147,352 154,500
100,000 Rouse Company Sub. Deb.
Cv. 5.75%, 07/23/02 ................................................ 82,872 97,500
------------ ------------
909,179 938,160
------------ ------------
RETAIL -- 2.53%
100,000(c) ASDA Finance Ltd. Sub. Deb. Cv.
10.75%, 10/21/05 ................................................... 155,854 195,300
The accompanying notes are an integral part of the financial statements.
</TABLE>
7
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<TABLE>
<CAPTION>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments (Continued) -- December 31, 1995
====================================================================================================================================
Principal Market
Amount Cost Value
------ ---- -----
<S> <C> <C>
$ 100,000 Federated Department Stores
Sub. Deb. Cv. 5.00%,
10/01/03 ........................................................... $ 100,000 $ 101,250
100,000 Robinson Department Store
Sub. Deb. Cv. 3.25%,
07/27/00 ........................................................... 102,478 102,500
------------ ------------
358,332 399,050
------------ ------------
TELECOMMUNICATIONS -- 5.32%
250,000 Rogers Communications Inc.
Sub. Deb. Cv. 2.00%,
11/26/05 ........................................................... 131,348 134,375
150,000 Scandinavian Broadcasting
System SA Sub. Deb. Cv.
7.25%, 08/01/05 .................................................... 161,728 154,125
357,000 Tele 2000 S.A. Sub. Deb. Cv.
9.75%, 04/14/97(g) ................................................. 326,897 305,235
250,000 Telekom Malaysia Berhad
Sub. Deb. Cv. 4.00%,
0/03/04(g) ......................................................... 242,517 243,438
------------ ------------
862,490 837,173
------------ ------------
TRANSPORTATION -- 2.48%
10,000,000(b) Nippon Yusen Kabushiki
Kaisha Sub. Deb. Cv.
2.00%, 09/29/00 .................................................... 113,408 114,330
250,000 Yang Ming Marine Transport
Sub. Deb. Cv. 2.00%,
10/06/01 ........................................................... 257,500 275,625
------------ ------------
370,908 389,955
------------ ------------
TOTAL CONVERTIBLE
CORPORATE BONDS .................................................... 11,506,761 11,815,030
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 14.01%
BUSINESS SERVICES -- 1.00%
5,000 Browning-Ferris Industries,
Inc. 7.25% "Aces" .................................................. 178,125 156,875
------------ ------------
ENERGY -- 3.71%
5,000 Atlantic Richfield Company
9.01% Cv. Pfd. ..................................................... 123,750 117,500
5,000 Enron Corporation Pfd. ............................................... 120,250 120,000
4,000 Unocal Corporation ................................................... 220,250 217,500
2,500 Valero Energy Corp. .................................................. 117,963 128,750
------------ ------------
582,213 583,750
------------ ------------
FINANCIAL SERVICES -- 0.94%
2,500 Ahmanson (H.F.) & Co. Pfd. D ......................................... 102,650 147,813
------------ ------------
INDUSTRIAL EQUIPMENT & SUPPLIES -- 0.36%
2,000 McDermott International, Inc.
Cv. Pfd. ........................................................... 62,100 56,750
------------ ------------
METALS AND MINING -- 2.73%
10,000 Kaiser Aluminum Corp. Pfd. ........................................... 159,250 128,750
3,000 Magma Copper Company
6.00% Cv. Pfd. Ser. E .............................................. 197,555 301,125
------------ ------------
356,805 429,875
------------ ------------
REAL ESTATE / DEVELOPMENT -- 1.40%
9,000 Security Capital Pacific Trust
Pfd. Ser. A ........................................................ 189,439 220,500
------------ ------------
TELECOMMUNICATIONS -- 3.87%
5,500 Cablevision Systems Pfd. ............................................. 153,275 149,875
15,000 Ericsson (L.M.) Telephone
Company 4.25% Cv. Pfd. ............................................. 26,250 41,250
5,000 MFS Communications
Company, Inc. Pfd. ................................................. 167,500 243,438
4,600 Sprint Corporation 8.25%
Cv. Pfd. ........................................................... 146,625 174,800
------------ ------------
493,650 609,363
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ................................................... 1,964,982 2,204,926
------------ ------------
TOTAL CONVERTIBLE
SECURITIES ......................................................... 13,471,743 14,019,956
------------ ------------
PREFERRED STOCKS -- 0.67%
METALS AND MINING -- 0.67%
5,000 Freeport-McMoRan Copper
& Gold Inc. ........................................................ 95,925 105,625
------------ ------------
TOTAL PREFERRED STOCKS ............................................... 95,925 105,625
------------ ------------
COMMON STOCKS -- 2.24%
ADVERTISING -- 0.35%
700 Havas 51,063 55,387
------------ ------------
COMMUNICATIONS -- 0.35%
5,000 Rogers Communication ................................................. 51,883 55,861
------------ ------------
ENTERTAINMENT -- 0.24%
1,000 Time Warner Inc. ..................................................... 40,550 37,875
------------ ------------
METALS & MINING -- 1.30%
5,000 Kaiser Aluminum Corp.+ ............................................... 57,400 65,000
10,000 Pegasus Gold Inc.+ ................................................... 118,000 138,750
------------ ------------
175,400 203,750
------------ ------------
TOTAL COMMON STOCKS .................................................. 318,896 352,873
------------ ------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
The Gabelli Global Convertible Securities Fund
Portfolio of Investments (Continued) -- December 31, 1995
====================================================================================================================================
Principal
Amount Market
or Shares Cost Value
--------- ---- -----
<S> <C> <C>
WARRANTS -- 2.15%
AUTO RELATED -- 0.30%
50 NGK Spark Plug Co. Ltd.
01/20/98+ .......................................................... $ 62,500 $ 47,500
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.66%
50 Kyocera Corp. 01/23/98+ .............................................. 69,375 64,375
50 Nishimatsu Construction
Co., Ltd. 12/03/96+ ................................................ 47,500 40,000
------------ ------------
116,875 104,375
------------ ------------
METAL & MINING -- 0.77%
50 Sumitomo Metal Mining Co.,
Ltd. 12/24/97+ ..................................................... 80,625 120,625
------------ ------------
RETAIL -- 0.42%
150 Takashimaya Co., Ltd.
07/02/96+ .......................................................... 26,250 65,625
------------ ------------
TOTAL WARRANTS ....................................................... 286,250 338,125
------------ ------------
U.S. GOVERNMENT OBLIGATIONS-- 10.07%
$ 1,590,000 U.S. Treasury Bills, 3.60%
to 4.66% Due 01/11/96 to
02/08/96 ........................................................... 1,585,270 1,585,270
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS ........................................................ 1,585,270 1,585,270
------------ ------------
TOTAL INVESTMENTS
-- 104.19% ......................................................... $ 15,758,084 16,401,849
============
Liabilities, in excess of
Other Assets -- 4.19% .............................................. (659,757)
------------
NET ASSETS -- (1,458,695
shares outstanding)
100.00% ............................................................ $ 15,742,092
============
Net Asset Value and
Redemption Price Per
Share .............................................................. $10.79
======
<CAPTION>
Number of
Contracts
---------
PUT OPTIONS
50 S & P 500 January 1996
$620.00 ............................................................ $ 39,525 $ 42,500
============ ============
<CAPTION>
Premiums
Received
--------
PUT OPTIONS WRITTEN
50 S & P 500 January 1996
$600.00 ............................................................ $ 20,099 $ 10,625
============ ============
</TABLE>
- ----------------
(a) - Principal amount denoted in French Francs.
(b) - Principal amount denoted in Japanese Yen.
(c) - Principal amount denoted in British Pounds.
(d) - Principal amount denoted in Netherlands Guilders.
(e) - Principal amount denoted in Danish Krone.
(f) - Principal amount denoted in Finnish Markka.
(g) - Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1995, Rule 144A securities amounted to $978,798 or 6.2% of net assets.
+ - Non income producing security.
*For Federal Income Tax purposes:
Aggregate cost ........................................ $ 15,758,084
============
Gross unrealized appreciation ......................... $ 1,006,102
Gross unrealized depreciation ......................... (362,337)
------------
Net unrealized appreciation ........................... $ 643,765
============
- --------------------------------------------------------------------------------
Top Ten Holdings
December 31, 1995
-----------------
Matsushita Electric Industrial Co. Yang Ming Marine Transport
Cookson Group plc International CabelTel Inc.
Finaxa Thermo Electron Corp.
Tele 2000 S.A. Bangkok Bank Ltd.
Magma Copper Company Softkey International Inc.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of thefinancial statements.
9
<PAGE>
The Gabelli Global Convertible Securities Fund
Statement of Assets and Liabilities
December 31, 1995
================================================================================
Assets:
Investments in securities, at value
(Cost $15,758,084) ................................... $ 16,401,849
Unrealized appreciation on forward foreign
currency contracts ................................... 196,129
Options purchased, at value (Cost $39,525) ............. 42,500
Cash ................................................... 37,188
Receivable for investments sold ........................ 398,726
Dividends and interest receivable ...................... 183,020
Deferred organizational expenses ....................... 40,154
------------
Total Assets ......................................... 17,299,566
------------
Liabilities:
Options written, at value
(Premiums received: $20,099) ......................... 10,625
Payable to Advisor ..................................... 13,438
Payable for distribution fees .......................... 6,492
Payable for investments purchased ...................... 1,443,220
Payable for Fund shares redeemed ....................... 2,523
Dividends payable ...................................... 33,960
Other accrued expenses ................................. 47,216
------------
Total Liabilities .................................... 1,557,474
------------
Net Assets (applicable to 1,458,695
shares outstanding) ............................... $ 15,742,092
============
Net asset value and redemption
price per share ................................... $ 10.79
============
Net Assets Consist of:
Capital Stock, at par value ............................ $ 1,459
Additional paid-in capital ............................. 15,030,130
Distributions in excess of net
investment income ................................... (64,539)
Accumulated net realized loss on
investments ......................................... (58,839)
Net unrealized appreciation on investments
and assets and liabilities denominated in
foreign currencies .................................. 833,881
------------
Net Assets ........................................... $ 15,742,092
============
Statement of Operations for the Year Ended
December 31, 1995
================================================================================
Investment Income:
Interest (Net of foreign taxes of $1,460) ................ $ 703,239
Dividends ................................................ 200,208
-----------
Total Income ........................................... 903,447
-----------
Expenses:
Investment Advisory ...................................... 170,164
Shareholder services ..................................... 72,954
Distribution fees ........................................ 42,527
Legal and audit .......................................... 31,029
Printing and mailing ..................................... 28,397
Registration ............................................. 20,850
Custodian ................................................ 16,205
Amortization of organization expenses .................... 14,647
Directors' fees and expenses ............................. 5,833
Miscellaneous ............................................ 7,213
-----------
Total Expenses ......................................... 409,819
-----------
Net Investment Income .................................... 493,628
-----------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions:
Net realized loss on investments ......................... (28,739)
Net change in unrealized appreciation .................... 1,630,775
-----------
Net gain on investments ................................ 1,602,036
-----------
Net increase in net assets resulting from
operations ............................................... $ 2,095,664
===========
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
====================================================================================================================================
Year Ended February 3, 1994
December 31, (Commencement of Operations)
1995 through December 31, 1994
------------ ------------
<S> <C> <C>
Increase (decrease) in Net Assets: .............................................
Net Investment Income ....................................................... $ 493,628 $ 241,857
Net realized loss on investments ............................................ (28,739) (30,100)
Net change in unrealized appreciation ....................................... 1,630,775 (796,894)
------------ ------------
Net increase (decrease) in net assets resulting from operations ........... 2,095,664 (585,137)
------------ ------------
Distributions from net investment income .................................... (493,628) (241,857)
Distributions in excess of net investment income ............................ (62,592) (1,947)
------------ ------------
(556,220) (243,804)
------------ ------------
Share transactions-- net .................................................... (1,370,857) 16,402,446
Net increase in net assets ................................................ 168,587 15,573,505
------------
Net Assets:
Beginning of period ......................................................... 15,573,505 --
------------ ------------
End of period ............................................................... $ 15,742,092 $ 15,573,505
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies. The objective of The Gabelli Global
Convertible Securities Fund (the "Fund") is to obtain a high rate of total
return. The Fund is a series of Gabelli Global Series Funds, Inc. (the
"Corporation"), incorporated in Maryland on July 16, 1993. The Fund is a
no-load, open-end, non-diversified management investment company and one of five
separately managed portfolios of the Corporation. The Fund commenced investment
operations on February 3, 1994. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund.
Security Valuation. Portfolio securities listed or traded on the New York or
American Stock Exchanges, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("NASDAQ") or traded on foreign exchanges are
valued at the last sale price on that exchange (if there were no sales that day,
the security is valued at the average of the bid and asked prices). All other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest average of the bid and asked prices. When
market quotations are not readily available, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Corporation's Directors. Short-term debt
securities with remaining maturities of 60 days or less are valued at amortized
cost, unless the Directors determine such does not reflect the securities' fair
value, in which case these securities will be valued at their fair value as
determined by the Directors. Options are valued at the last sale price on the
exchange on which they are listed, unless no sales of such options have taken
place that day, in which case they will be valued at the mean between their
closing bid and asked prices.
Foreign Currency Transactions. The books and records of the Fund are maintained
in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities are
recorded at the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses are
recorded at the exchange rate prevailing on the respective date of such
transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Forward Foreign Currency Contracts. The Fund may hold currencies to meet
settlement requirements for foreign securities and may engage in currency
exchange transactions to hedge against changes in exchange rates. Forward
foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded by the Fund as an
unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
currency contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts. At December 31, 1995, the Fund had sold short the following forward
foreign currency contracts:
11
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements (Continued)
================================================================================
<TABLE>
<CAPTION>
Settlement Unrealized
Amount/Currency Dates Value Gain/(Loss)
--------------- ------------ --------- ------------
<S> <C> <C> <C>
185,297,500 Japanese Yen 5/17/96, 5/31/96 and 8/7/96 $ 1,836,035 $ 195,391
479,137 British Pound 5/31/96 739,861 23
2,577,125 French Franc 5/31/96 and 6/11/96 526,850 (5,456)
1,211,750 Finnish Markka 5/31/96 279,551 6,171
----------- ---------
$ 3,382,297 $ 196,129
=========== =========
</TABLE>
Security Transactions and Investment Income. Security transactions are accounted
for on the dates the securities are purchased or sold (the trade dates), with
realized gain and loss on investments determined by using specific
identification as the cost method. Interest income (including amortization of
premium and discount) is recorded as earned. Dividend income and dividend and
capital gain distributions to shareholders are recorded on the ex-dividend date.
Federal Income Taxes. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986 and distribute
all of its taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Fund intends to undertake any procedural steps
required to claim the benefits of such treaties. If more than 50% in value of
the Fund's total assets at the close of any taxable year consists of stocks or
securities of non-U.S. corporations, the Fund is permitted and may elect to
treat any non-U.S. taxes paid by it as paid by its shareholders.
2. Capital Stock Transactions. The Articles of Incorporation, dated July 16,
1993, permit the Fund to issue 200,000,000 shares (par value $0.001).
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
February 3, 1994
Year Ended (commencement of operations)
December 31, 1995 through December 31, 1994
----------------- -------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold .................................... 464,817 $4,735,331 1,854,279 $19,389,838
Shares issued upon reinvestment of dividends ... 48,399 522,244 22,513 223,559
Shares redeemed ................................ (623,259) (6,628,432) (308,054) (3,210,951)
-------- ----------- --------- -----------
Net increase (decrease) ........................ (110,043) ($1,370,857) 1,568,738 $16,402,446
======== =========== ========= ===========
</TABLE>
3. Purchases and Sales of Securities. Purchases and sales of securities for the
period ended December 31, 1995, other than U.S. government obligations and
short-term securities, aggregated $25,282,651 and $23,894,955, respectively.
Futures Contracts. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Such investments will only be made
if they are, in the opinion of management, economically appropriate to the
reduction of risks involved in the management of the Fund. Upon entering into a
futures contract, the Fund is required to deposit with the broker an amount of
cash or cash equivalents equal to a certain percentage of the contract amount.
This is known as the "initial margin." Subsequent payments ("variation margin")
are made or received by the Fund each day, depending on the daily fluctuation of
the value of the contract. The daily changes in the contract are recorded as
12
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements (Continued)
================================================================================
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. The net unrealized appreciation/depreciation is shown in the
financial statements. During the year ended December 31, 1995, the Fund sold
short futures contracts aggregating $7,654,307, closed short futures contracts
aggregating $9,843,024, opened long futures contracts aggregating $399,065 and
closed long futures contacts aggregating $2,753,793.
Options. The Fund may purchase or write call or put options on securities or
indices. During 1995, the Fund utilized put options to hedge the value of the
Fund's portfolio. As a writer of put options, the Fund receives a premium at the
outset and then bears the market risk of unfavorable changes in the price of the
financial instrument underlying the option. The Fund would incur a loss if the
price of the underlying financial instrument decreases between the date the
option is written and the date on which the option is terminated. The Fund would
realize a gain, to the extent of the premiums, if the price of the financial
instrument increases between those dates.
As a purchaser of put options, the Fund pays a premium for the right to sell to
the seller of the put option the underlying security at a specified price. The
seller of the put has the obligation to purchase the underlying security upon
exercise at the exercise price.
Transactions in written put options and purchased put options for the year ended
December 31, 1995:
<TABLE>
<CAPTION>
Written Put Options Purchased Put Options
------------------- ---------------------
Number Number
of Contracts Premium of Contracts Premium
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Options outstanding at January 1, 1995 .......... 70 $ 28,135 90 $ 66,049
Options written ................................. 1,500 470,584 1,405 925,302
Options closed .................................. (570) (225,735) (260) (195,352)
Options expired ................................. (945) (248,517) (1,160) (726,279)
Options exercised ............................... (5) (4,368) (25) (30,195)
------ -------- ------ --------
Options outstanding at December 31, 1995 ........ 50 $ 20,099 50 $ 39,525
====== ======== ====== ========
</TABLE>
Repurchase Agreements. The Fund may enter into repurchase agreements with
government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with other brokers or dealers that
meet the credit guidelines established by the Directors. The Fund will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer,
of the collateral to the account of the custodian. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to maintain the adequacy of the collateral. If
the seller defaults and the value of the collateral declines, or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
4. Investment Advisory Contract. The Fund employs Gabelli Funds, Inc. (the
"Advisor") to provide a continuous investment program for the Fund's portfolio,
provide all facilities and personnel, including officers, required for its
administrative management, and pay the compensation of all officers and
Directors of the Fund who are affiliated with the Advisor. As compensation for
the services rendered and related expenses borne by the Advisor, the Fund pays
the Advisor a fee, computed and accrued daily and payable monthly, equal to
1.00% per annum of the Fund's average daily net assets. The Advisor is obligated
to reimburse the Fund in the event the Fund's expenses exceed the most
restrictive expense ratio limitation imposed by any state, currently believed to
13
<PAGE>
The Gabelli Global Convertible Securities Fund
Notes to Financial Statements (Continued)
================================================================================
be 2.5% of the first $30 million of the Fund's average daily net assets
(excluding taxes, interest, distribution expenses and extraordinary items). No
such reimbursement was required during 1995.
5. Organization Expenses. The organization expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months.
6. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and
Rule 12b-1 thereunder. For the period ended December 31, 1995, the Fund has
incurred distribution costs of $42,527, or 0.25% of average net assets, the
annual limitation under the Plan, payable to Gabelli & Company, Inc., an
affiliate of the Advisor. The Board of Directors has approved that Distribution
costs incurred by Gabelli & Company, Inc., totaling $271,178 which are in excess
of the 0.25% limitation may be recovered from the Fund in future periods,
subject to such limitation.
7. Transactions with Affiliates. The Fund paid brokerage commissions during the
year ended December 31, 1995 of $670 to Gabelli & Company, Inc.
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
February 3, 1994
Year (Commencement
Ended of Operations) Through
December 31, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C>
Operating Performance:
Net asset value, beginning of period ......................... $9.93 $10.00
------ ------
Net investment income ........................................ 0.39 0.16
Net realized and unrealized gain/(loss) on securities ........ 0.86 (0.07)
------ ------
Total from investment operations ............................. 1.25 0.09
Less Distributions:
Dividends from net investment income ......................... (0.39) (0.16)
------ ------
Net asset value, end of period ....................................... $10.79 $ 9.93
====== ======
Total Return(a) .............................................. 12.62% 0.90%
Ratios to average net assets/supplemental data:
Net assets, end of period (in thousands) ..................... $15,742 $15,574
Ratio of operating expenses to average net assets ............ 2.41% 2.49%(b)
Ratio of net investment income to average net assets ......... 2.90% 2.80%(b)
Portfolio turnover rate ...................................... 152% 329%
</TABLE>
- ----------
(a) Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less than
one year is not annualized.
(b) Annualized.
14
<PAGE>
The Gabelli Global Convertible Securities Fund
Report of Grant Thornton LLP, Independent Auditors
================================================================================
Shareholders and Board of Directors
The Gabelli Global Convertible Securities Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The Gabelli Global Convertible
Securities Fund (one of the series constituting Gabelli Global Series Funds,
Inc.), as of December 31, 1995, and the related statements of operations,
changes in net assets and financial highlights for the year then ended, and the
statement of changes in net assets and financial highlights for the period from
February 3, 1994 (commencement of operations) through December 31, 1994. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Gabelli Global Convertible Securities Fund of Gabelli Global Series Funds, Inc.
as of December 31, 1995, and the results of its operations, the changes in its
net assets and the financial highlights for the periods indicated above, in
conformity with generally accepted accounting principles.
/s/ Grant Thornton LLP
Grant Thornton LLP
New York, New York
February 16, 1996
- --------------------------------------------------------------------------------
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 $0.393 per share. For fiscal year 1995,
40.0% of the ordinary income dividends qualifies for the dividends received
deduction available to corporations.
U.S. Government Income:
The percentage of the ordinary income dividends paid by the Fund during fiscal
1995 which was derived from U.S. Treasury securities was 3.45%. 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 Convertible Securities 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>
The Gabelli Global Series Funds, Inc.
The Gabelli Global Convertible Securities 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 A. Hartswell Woodson, III
President Vice President and
Portfolio Manager
Bruce N. Alpert James E. McKee
Vice President and Secretary
Treasurer
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 Convertible Securities Fund. It is not authorized for
distribution to prospective investors unless preceded or accompanied by an
effective prospectus.
- --------------------------------------------------------------------------------
