[PHOTO]
The
Gabelli
Global
Convertible
Securities
Fund
FIRST QUARTER REPORT
MARCH 31, 1998
<PAGE>
[FLAGS OMITTED]
[PHOTO]
Hart Woodson
Gabelli Global Series Funds, Inc.
The Gabelli Global
Convertible Securities Fund
First Quarter Report - March 31, 1998
To Our Shareholders,
The Gabelli Global Convertible Securities Fund achieved its best quarterly
performance since inception, rising 11.1% in the first quarter ended March 31,
1998. The Fund benefited from its overweight position in financial and
telecom-related stocks in Europe. European markets outperformed the U.S. as
optimism grew that a broad-based European monetary union would be formed on
schedule. The Fund has 36% of its assets invested in Europe versus a neutral
weighting of 24%. Benign interest rates and rising consumer confidence in the
U.S. helped push our holdings in retail, media and entertainment to double-digit
gains. With still no sign of economic recovery in Japan, the Fund remains
underweighted in Asian markets.
Investment Performance
For the first quarter ended March 31, 1998, The Gabelli Global Convertible
Securities Fund's total return was a solid 11.1%. The UBS Global Convertible
Index, Merrill Lynch Global Bond Index and Morgan Stanley Capital International
World Free Index of global equity markets had returns of 9.3%, 1.1% and 13.9%,
respectively, over the same period. Each index is an unmanaged indicator of
investment performance. The Fund was up 13.2% over the trailing twelve month
period. The UBS Global Convertible Index, Merrill Lynch Global Bond Index and
Morgan Stanley Capital International World Free Index rose 12.7%, 7.5% and
29.6%, respectively, over the same twelve month period. Since inception on
February 3, 1994 through March 31, 1998, the Fund has a total return of 36.9%,
which equates to an average annual return of 7.8%.
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<TABLE>
<CAPTION>
INVESTMENT RESULTS (a)
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Quarter
----------------------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1998: Net Asset Value...................... $10.43 -- -- -- --
Total Return......................... 11.1% -- -- -- --
- ------------------------------------------------------------------------------------------------------------
1997: Net Asset Value...................... $10.27 $10.98 $11.15 $9.39 $9.39
Total Return......................... 0.9% 6.9% 1.5% (6.1)% 2.8%
- ------------------------------------------------------------------------------------------------------------
1996: Net Asset Value...................... $11.34 $11.55 $11.41 $10.18 $10.18
Total Return......................... 5.1% 1.9% (1.2)% (0.3)% 5.5%
- ------------------------------------------------------------------------------------------------------------
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 - March 31, 1998 (a)
-------------------------------------------
1 Year....................................... 13.2%
3 Year....................................... 10.1%
Life of Fund (b)............................. 7.8%
- -----------------------------------------------------
Dividend History
- -----------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 30, 1997 $1.070 $9.33
December 31, 1996 $1.200 $10.18
December 29, 1995 $0.393 $10.79
December 30, 1994 $0.160 $9.93
(a) Total returns and average annual returns reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. 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.
- --------------------------------------------------------------------------------
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 a competitive rate of
return by investing primarily in coupon paying convertible securities which meet
our selective investment criteria.
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 commodi ties, it is the
increase in industrial demand.
2
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Global Allocation
The accompanying chart represents the Fund's holdings by geographic region
as of March 31, 1998. The geographic allocation will change based on current
global market con ditions. Countries and/or regions represented in the chart and
below may or may not be included in the Fund's future portfolio.
What are Global Convertible Securities?
Global convertible securities are bonds, preferred shares and warrants of
domestic or foreign issuers which may be converted into a fixed number of shares
of the underlying company. Convertibles are hybrid securities which combine the
capital appreciation potential of equities with the higher yield of fixed income
instruments. They can be thought of as a straight bond together with an embedded
call option (or warrant) on the underlying equity.
What are the Benefits of Global Convertible Securities?
Reduced volatility is foremost. Investing in foreign equity markets can be
rewarding but volatile. Our goal is to earn a high, risk-adjusted rate of
return. Due to its fixed income characteristics, a convertible security will
provide more stability than its underlying common stock. In the current market
environment, in which investors are seeking alternatives to bond funds in favor
of global or international funds, the Gabelli Global Convertible Securities Fund
provides an attractive alternative by combining the capital appreciation
potential of global equity investing with the higher current income usually
associated with bonds.
COMMENTARY
Global View: Focus on Europe
Of the fifteen member nations in the European Union, eleven are likely to
become founding members of the European Monetary Union (EMU). This "United
Europe" will consist of 300 million people, produce 19.4% of the world's Gross
Domestic Product (GDP) and conduct 18.6% of the world's trade. (The comparable
figures in the United States are 270 million, 19.6% and 16.6%, respectively).
Efficiency will be improved. Companies will be under pressure to raise
profitability, as witnessed by the consolidation in the pharmaceutical
(Ciba-Geigy and Sandoz) and financial sectors (Swiss Bank and UBS, AXA and UAP).
This process, together with a strong dollar which benefits exporters and the
rise of an equity culture in Europe, is set to benefit the owners of financial
assets.
During the first quarter, European equity markets rose 19.5% in U.S.
dollar terms as measured by the Dow Jones European Index. The Standard & Poor's
(S&P) 500 gained 13.9%. Europe is benefiting from the convergence process to be
completed in January 1999, when the "euro" will become Europe's
HOLDINGS BY GEOGRAPHIC REGION - 3/31/98
[The following table was depicted as a pie chart in the printed material.]
United States 39.5%
Europe 35.7%
Asia/Pacific Rim 12.1%
Japan 7.7%
Latin America 4.7%
Other 0.3%
3
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sole currency. To meet the requirements set out in the 1991 Maastricht Treaty,
governments have been following a tight fiscal policy. Meanwhile, interest rates
have been falling. This has been particularly true in the "peripheral" markets
of Italy and Spain, where interest rates had further to fall in preparation for
European monetary integration. In 1995, ten year treasury yields were in the low
teens in these countries. Today, they have fallen to just over five percent,
only a few basis points higher than in Germany. As the process is completed,
short term rates are likely to fall further, benefiting both equities and bonds.
Consequently, Italy and Spain have outperformed other European markets this year
rising 35.7% and 36.5%, respectively, in the first quarter.
Although volatility may increase over the balance of the year, the
macroeconomic environment in Europe remains favorable. In the U.S., the market
continues to be supported by solid economic growth, low inflation, strong mutual
fund flows and merger mania. Japan remains the weak link with employment, retail
sales and industrial production falling. We await definitive proof of economic
recovery before increasing our Asian exposure.
Let's Talk Converts
The following are specifics on selected holdings of our Fund. Favorable
earnings prospects do not necessarily translate into higher prices, but they do
express a positive trend which we believe will develop over time. The share
prices of foreign holdings are stated in U.S. dollar equivalent terms as of
March 31, 1998.
Canal + (Sub. Deb. Cv. 3.50%, 04/01/02), a French media company, monetized its
interest in Mediaset last year by issuing a 3.50% French franc denominated
convertible bond due in April 2002 that is exchangeable into Mediaset common
stock at a price of 8,500 lira. With the stock at 11,827 lira, the bonds trade
at 139.375% on a low 1.25% premium and a 2.5% current yield.
Mediaset (MS.MI - $6.35 - Milan Stock Exchange) is the leading commercial
television group in Italy. It is controlled by former Prime Minister Silvio
Berlusconi, who was recently in talks with News Corp's Chairman Rupert Murdoch
to consider a possible sale of the company. Operations include three national
television stations (Canale 5, Italia 1 and Retequattro) which achieved an
aggregate daily audience share of 43% and over 60% of total television
advertising revenues last year.
Central Garden and Pet Co. (6.00%, 11/15/03) is the largest wholesale
distributor of lawn, garden and pet supplies in the U.S. The company sells a
number of brand name products to retailers such as Home Depot and Wal-Mart.
Central's unique, value added distribution system continues to win new accounts.
Internal sales growth is twelve percent and accelerating. Two recent
acquisitions have solidified Central's dominant position in the USD three
billion pet supply market. The stock is cheap, selling on a price/earnings ratio
of only 60% of its long term growth rate. Central's CEO, William Brown, a former
manager for drug distributor McKesson, bought the company in 1980 and has an
eight percent ownership interest.
4
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The USD 115 million 6.00% convertible bond due in November 2003 trades at
154% with the stock at USD 39. The low 10% premium will insure good upside for
the stock with a yield advantage of 3.9%.
Cregem Finance NV (2.75%, 01/06/04), a unit of Dexia Belgium, is the issuer of a
USD 150 million 2.75% convertible bond that is exchangeable into the firm's
holdings of the ING Groep. The bond is guaranteed by Dexia's subsidiary, Credit
Communal de Belgique, which is rated AA+ by S&P. With the stock at 118 Dutch
guilders, the bond trades at 114.875% on a modest 9% premium and 2.4% current
yield.
ING Groep NV (INGB.AS - $56.875 - Amsterdam Stock Exchange) is the Netherlands'
largest insurance company and third largest bank with a total market
capitalization of USD 37 billion and over USD 200 billion in assets. In 1997,
the bank made several important acquisitions including Belgium's third largest
bank, Banque Brussels Lambert, the U.S. investment bank Furman Selz and the U.S.
life insurer Equitable of Iowa. The bank is well-positioned to meet the
challenges of the new single European currency for three reasons. First, it is
efficiently managed. Second, it is already internationally-oriented with about
40% of pre-tax profits earned outside Holland. And third, the threat to its home
market is limited by high barriers to entry resulting from consolidation which
has already occurred.
Houston Industries Inc. (HXT - $64.8125 - NYSE) monetized its holdings in Time
Warner by issuing a USD one billion 7.00% preferred note which automatically
converts into Time Warner stock in 2000. At a price of USD 64.50, the security
yields 5.0% with a 10% premium.
Time Warner Inc. (TWX - $72.00 - NYSE) is the largest media and entertainment
company in the U.S. with a total enterprise value of over USD 50 billion. The
company grew EBITDA (earnings before interest, tax, depreciation and
amortization) 16% in 1997 with all divisions performing well except music.
Roughly 60% of cash flow comes from content businesses with the balance from
distribution assets. Cable networks include TNT, TBS, CNN and the Cartoon
Network. Publications include People, Sports Illustrated, Time and Money. CEO
Gerald Levin has used the company's strong cash flow to reduce debt and buy back
stock.
Nestle Holdings Inc. (3.00%, 06/17/02) is the world's number one food company.
Nestle's brands include Perrier, Nescafe, Carnation, Stouffer's and Alpo. The
company also manufactures pharmaceutical products such as contact lens solution,
Opti-Free. Nestle sells over 8,500 products in more than 100 countries. Sales
are expected to grow by just under ten percent in 1998, of which nearly
two-thirds will come from the existing business and the remainder through
acquisition. Valuations versus its peer group are still compelling. Nestle
trades on a 1998 enterprise value to EBITDA of 10.9 times compared to 13.1 times
for Unilever. The balance sheet is strong with interest coverage at over 7
times.
The USD 300 million Nestle convertible bond has a 3.00% coupon and matures
in June 2002. With the stock at 2,913 Swiss francs, the bonds trade at 126.3% on
a 5% premium and 2.4% current yield, versus a 1.2% dividend yield on the stock.
5
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Quingling Motors Co. Ltd. (3.50%, 01/22/02) manufactures and sells Isuzu trucks
in China. The stock trades in Hong Kong and has an equity market capitalization
of USD 500 million. Sales volumes are up nearly 10% with earnings expected to
rise 20% in 1998. Profitability has been enhanced by the weak yen, which makes
up 40% of costs. Future sales growth will be driven by the new T series pick-up
truck, which is expected to generate strong demand because of its flexibility as
either a passenger or cargo transport vehicle. The valuation is inexpensive,
selling on 12 times 1998 earnings. The balance sheet is solid with net gearing
at 18% of capital.
Quingling issued a 3.50% mandatory convertible due in January 2002. At a
price of USD 80, the convertible trades at parity with a 10.0% current yield.
Downside protection is afforded by a reset feature which permits the conversion
price to be lowered by up to 30% at maturity should the stock fail to perform.
Telefonica de Espana (Sub. Deb. Cv. 2.00%, 07/15/02) is Spain's incumbent
telecom operator offering a full range of fixed line and mobile services. With
940 million shares outstanding, the company has an equity market capitalization
of USD 42 billion. Including net debt of USD 17 billion produces a total
enterprise value of USD 59 billion. With estimated 1998 EBITDA of USD 8.9
billion, Telefonica sells on a 6.6 times multiple of its enterprise value.
Although in line with its peer group, we think the stock should sell at a
premium. Telefonica's Chairman, Juan Villalonga Navarro, is a fine example of
Europe's new breed of shareholder friendly managers. Plans have already been
announced to reorganize the company into its four main divisions: basic
telephone, cellular, media and international. International interests include
stakes in fast growing South American companies such as CTC Chile, Telefonica de
Argentina and Telefonica del Peru. New alliances have been formed with WorldCom
and Portugal Telecom to expand business in the Americas and Europe. A rights
offering will be used to fund expansion plans in Brazil.
Telefonica has a USD 525 million 2.00% convertible bond due in July 2002.
It is rated AA- by S&P. Each bond with a face amount of USD 1,000 is convertible
into 31.43 Telefonica shares at a price of 4,914 Spanish pesetas. With the stock
at 6,920 pesetas, the bond is priced at USD 139.50 with virtually no premium and
a 1.4% current yield. The bond will participate fully in any further stock
appreciation, but will decline more slowly should the stock fall.
United News & Media plc (Sub. Deb. Cv. 6.125%, 12/03/03) is a U.K.-based media
and information group. Lord Hollick, the group's Chief Executive Officer, has
been working to restructure the company and improve profitability. The group's
four main activities include: consumer publishing (newspapers and advertising
periodicals), broadcasting and entertainment (ITV and Channel 5), financial
services and business services. Business services is the largest contributor to
profits with subsidiary Miller Freeman being the world's largest trade-show
organizer. On the broadcasting side, we expect United to be the greatest
beneficiary of the upcoming ITV license renewal process, which could save the
company STG 59 million in 1999.
6
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The United News & Media's 6.125% sterling denominated convertible bonds
due in December 2003 trade at 113.875% with the stock at 815 pence. Each bond
with a face amount of 5,000 pounds sterling is convertible into 621.1 shares at
a price of 805 pence. The bond is well-balanced on a 12% premium and a 5.4%
current yield. The bond enjoys call protection until December 2001.
Minimum Initial Investment - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
Additionally, The Gabelli Global Convertible Securities Fund and other Gabelli
Funds are available through the no-transaction fee programs at many major
discount brokerage firms.
The Roth IRA
The Taxpayer Relief Act of 1997 included new tax incentives and more
opportunities to save for retirement and other major expenditures. The Roth IRA
is just one of these new opportunities now available at Gabelli Funds. Our
investor representatives are available at 1-800-GABELLI (1-800-422-3554) to
speak with you about establishing a new Roth IRA and to discuss your investment
choices.
Gabelli U.S. Treasury Money Market Fund
Shareholders of any of the Gabelli Funds may invest in The Gabelli U.S.
Treasury Money Market Fund with an initial investment of $3,000 or more. The
Fund provides checkwriting and exchange privileges. The Fund's expenses are
capped at 0.30% of average net assets, making it one of the most attractive U.S.
Treasury-only money market funds. With dividends that are exempt from state and
local income taxes in all states, the Fund is an excellent vehicle in which to
store idle cash. An investment in The Gabelli U.S. Treasury Money Market Fund is
neither insured nor guaranteed by the U.S. Government. There can be no assurance
that the Fund will maintain a stable $1 per share net asset value. Call us at
1-800-GABELLI (1-800-422-3554) for a prospectus which gives a more complete
description of the Fund, including management fees and expenses. Read the
prospectus carefully before you invest or send money.
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, IRAs, 401(k)s, quarterly reports, closing prices and other
current news. You can send us e-mail at [email protected].
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In Conclusion
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's Nasdaq symbol is GAGCX. Please call us during the
business day for further information.
Investing in foreign equity markets can be rewarding but volatile.
Investing in global convertible securities offers a risk adverse way to
participate in these markets. We thank you for your loyalty and as always,
pledge our best efforts on your behalf.
Sincerely,
/s/ Hart Woodson
A. Hartswell Woodson, III
Portfolio Manager
April 30, 1998
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Top Ten Holdings
March 31, 1998
Banco Comercial Portugues SA
Telefonica Europe BV
Globalstar Telecommunications
Finaxa
Nortel Inversora SA
United News & Media plc
Cablevision Systems Corp.
Tecnomatix Technologies Ltd.
International CableTel Inc.
Hamburgische Landesbank/Veba
- --------------------------------------------------------------------------------
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.
8
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The Gabelli Global Convertible Securities Fund
Portfolio of Investments -- March 31, 1998 (Unaudited)
================================================================================
Principal Market
Amount Value
------ -----
CONVERTIBLE CORPORATE BONDS -- 62.7%
Automotive -- 1.6%
$ 100,000 Volkswagen International Finance Cv.
3.00%, 01/24/02................................. $ 147,000
----------
Broadcasting -- 4.9%
1,000,000(b) Canal+ / Mediaset Sub. Deb. Cv.
3.50%, 04/01/02................................. 219,992
200,000 Scandinavian Broadcasting System SA
Sub. Deb. Cv. 7.25%, 08/01/05 .................. 236,000
----------
455,992
----------
Building and Construction -- 4.7%
250,000 Bacnotan Consolidated
Industries Inc. Sub. Deb. Cv.
5.50%, 06/21/04................................. 82,500
100,000 New World Infrastructure Ltd.
Sub. Deb. Cv. 5.00%, 07/15/01................... 106,250
200,000 Shanghai Investment Holdings
1.00%, 06/12/02................................. 193,000
50,000 Shanghai Investment Holdings
1.00%, 02/24/03 (a)............................. 55,313
----------
437,063
----------
Business Services -- 1.9%
125,000 Cendant Corp. Sub. Deb. Cv.
4.75%, 03/01/03................................. 178,359
----------
Cable -- 2.7%
200,000 International CableTel Inc.
Sub. Deb. Cv. 7.00%, 06/15/08................... 251,000
----------
Computer Software and Services -- 2.8%
250,000 Tecnomatix Technologies Cv.
5.25%, 08/15/04 (a)............................. 263,750
----------
Consumer Products -- 6.7%
150,000 Central Garden and Pet Co. Cv.
6.00%, 11/15/03 (a)............................. 227,249
150,000 Nestle Holdings Inc. 3.00%, 06/17/02.............. 190,125
20,000,000(d) Sony Corp. Sub. Deb. Cv.
1.40%, 03/31/05................................. 218,971
----------
636,345
----------
Diversified Industrial -- 6.7%
90,000 Alfa SA de CV Sub. Deb. Cv.
8.00%, 09/15/00................................. 111,938
150,000 Beijing Enterprises 0.50%, 03/31/03 (a)........... 149,625
20,000,000(d) Matsushita Electric Works Ltd.
Sub. Deb. Cv. 2.70%, 05/31/02................... 210,121
20,000,000(d) Mitsui and Co. Ltd. Sub. Deb. Cv.
1.50%, 03/31/03................................. 161,228
----------
632,912
----------
Energy -- 6.2%
125,000 Diamond Offshore Drilling Inc. Cv.
3.75%, 02/15/07................................. 157,500
200,000 Hamburgische Landesbank / Veba
Sub. Deb. Cv. 3.25%, 05/08/02................... 240,360
100,000(c) National Grid Co. plc
4.25%, 02/17/08 (a)............................. 174,159
----------
572,019
----------
Equipment and Supplies -- 2.4%
816,000(b) Alcatel Alsthom SA Cv.
6.50%, 01/01/00................................. 220,044
----------
Financial Services -- 5.4%
150,000 Cregem Finance NV Cv. 2.75%, 01/06/04............. 173,910
1,468,000(b) Finaxa Sub. Deb. Cv. 3.00%, 01/01/01.............. 334,837
----------
508,747
----------
Health Care -- 1.8%
100,000 Sandoz Capital Novartis Cv.
2.00%, 10/06/02................................. 166,750
----------
Publishing -- 5.2%
250,000 Medya Holding Sub. Deb. Cv.
10.00%, 06/28/01................................ 193,750
150,000(c) United News & Media plc
Sub. Deb. Cv. 6.125%, 12/03/03.................. 293,893
----------
487,643
----------
Retail -- 4.0%
100,000 Federated Department Stores Inc.
Sub. Deb. Cv. 5.00%, 10/01/03................... 157,375
145,000 Home Depot Inc. Cv. 3.25%, 10/01/01............... 218,950
----------
376,325
----------
Telecommunications -- 3.8%
250,000 Telefoncia Europe BV S*ub. Deb. Cv.
2.00%, 07/15/02 ................................ 355,000
----------
Transportation -- 1.9%
207,000 International Container Terminal
Services Sub. Deb. Cv.
1.75%, 03/13/04................................. 175,950
----------
TOTAL CONVERTIBLE
CORPORATE BONDS................................... 5,864,899
----------
Shares
------
CONVERTIBLE PREFERRED STOCKS -- 32.0%
Automotive -- 1.3%
150,000 Quingling Motors Co. Ltd.
3.50% Cv. Pfd................................... 120,000
----------
Broadcasting -- 3.6%
2,000 Granite Broadcasting Corp.
7.75% Cv. Pfd................................... 113,750
20,000 Triathlon Broadcasting Co.
9.00% Cv. Pfd................................... 220,000
----------
333,750
----------
9
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The Gabelli Global Convertible Securities Fund
Portfolio of Investments (Continued) -- March 31, 1998 (Unaudited)
================================================================================
Market
Shares Value
------ -----
CONVERTIBLE PREFERRED STOCKS (Continued)
Cable -- 5.4%
5,500 Cablevision Systems Corp.
8.50% Cv. Pfd., Ser. I.......................... $ 282,562
3,500 Houston Industries Inc./
Time Warner Inc. 7.00% Cv. Pfd.................. 226,844
----------
509,406
----------
Energy -- 4.5%
3,000 AES Trust Corp. 5.375% Cv. Pfd.................... 239,625
4,000 EVI Inc. 5.00% Cv. Pfd. (a)....................... 181,000
----------
420,625
----------
Financial Services -- 3.9%
3,000 Banco Comercial Portugues SA
8.00% Cv. Pfd. ................................. 361,500
----------
Metals and Mining -- 0.3%
10,000 Durban Roodepoort Deep Ltd.
8.00% Cv. Pfd. ................................. 23,815
----------
Publishing -- 2.3%
4,000 Golden Books Family Entertainment Inc.
8.75% Cv. Pfd................................... 218,500
----------
Telecommunications -- 5.1%
5,000 Nortel Inversora SA 10.00% Cv. Pfd................ 317,500
3,000 Winstar Communications
7.00% Cv. Pfd. (a).............................. 162,375
----------
479,875
----------
Wireless Communications -- 5.6%
2,500 AirTouch Communications Inc.
4.25% Cv. Pfd., Cl. C........................... 177,500
3,000 Globalstar Telecommunications
6.50% Cv. Pfd................................... 351,270
----------
528,770
----------
TOTAL CONVERTIBLE
PREFERRED STOCKS.................................. 2,996,241
COMMON STOCKS -- 3.1%
Aviation: Parts and Services -- 0.9%
10,000 Jamco Corp........................................ 86,239
----------
Food and Beverage -- 1.7%
12,592 Diageo plc........................................ 148,238
1,982 Diageo plc., Cl. B................................ 16,861
----------
165,099
----------
Real Estate and Development -- 0.3%
19,700 Hemaraj Land Development Co....................... 11,293
135,000 Tanayong Co. Ltd.+................................ 13,759
----------
25,052
----------
Wireless Communications -- 0.2%
13,000 Total Access Communications plc................... 15,340
----------
TOTAL COMMON STOCKS............................... 291,730
----------
WARRANTS -- 0.3%
Diversified Industrial -- 0.2%
100 Mori Seiki Warrants+.............................. 25,000
----------
Entertainment -- 0.1%
50 Shochiku Co. Ltd. Warrants+....................... 5,625
----------
Metals and Mining -- 0.0%
5,000 Durban Roodepoort Deep Ltd.+...................... 1,340
----------
TOTAL WARRANTS.................................... 31,965
----------
TOTAL INVESTMENTS -- 98.2%
(Cost $8,549,174)............................... 9,184,840
Other Assets and
Liabilities (Net) -- 1.8%...................... 163,957
----------
NET ASSETS -- 100.0%
(896,313 shares outstanding).................... $9,348,797
==========
NET ASSET VALUE, Offering and
Redemption Price Per Share...................... $10.43
======
FORWARD FOREIGN EXCHANGE CONTRACTS
Net Unrealized
Expiration Appreciation
Date (Depreciation)
------- ------------
89,287,500(d) Sold Japanese Yen
in exchange for
USD 750,000...................... 11/25/98 $57,662
2,045,375(e) Sold Hong Kong Dollars
in exchange for
USD 250,000....................... 11/26/98 $(10,444)
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At March
31, 1998, the market value of Rule 144A securities amounted to $1,213,471
or 13.0% of net assets.
(b) Principal amount denoted in French Francs.
(c) Principal amount denoted in British Pounds.
(d) Principal amount denoted in Japanese Yen.
(e) Principal amount denoted in Hong Kong Dollars.
+ Non-income producing security.
10
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Gabelli Family of Funds
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Gabelli Asset Fund
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Growth Fund
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (No-Load) Portfolio Manager: Howard F. Ward, CFA
Gabelli Westwood Equity Fund
Seeks to invest primarily in the common stock of seasoned companies believed to
have proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation. (No-load)
Portfolio Manager: Susan M. Byrne
Gabelli Small Cap Growth Fund
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $500 million) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(No-load) Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Westwood SmallCap Equity Fund
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $1 billion or less. The Fund's primary objective is long-term capital
appreciation. (No-load) Portfolio Manager: Lynda Calkin, CFA
Gabelli Westwood Intermediate Bond Fund
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return. (No-load)
Portfolio Manager: Patricia Fraze
Gabelli Equity Income Fund
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays quarterly dividends and seeks a high level of total return with an
emphasis on income. (No-load) Portfolio Manager: Mario J. Gabelli, CFA
Gabelli Westwood Balanced Fund
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(No-load) Portfolio Managers: Susan M. Byrne & Patricia Fraze
Gabelli Westwood Mighty Mites(SM) Fund
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(No-Load) Team Manager: Mario J. Gabelli, CFA
Gabelli Value Fund
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. Max. Sales charge:
5 1/2% Portfolio Manager: Mario J. Gabelli, CFA
Gabelli ABC Fund
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
Gabelli U.S. Treasury Money Market Fund
Seeks to invest 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 a Money Market Fund is
neither insured nor guaranteed by the U.S. Government and there can be no
assurance that the Funds will be able to maintain a stable net asset value of
$1.00 per share. (No-load) Portfolio Manager: Judith A. Raneri
The Treasurer's Fund
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market seeks to invest in
U.S. Treasury bills, notes and bonds. Tax Exempt Money Market seeks to invest in
municipal securities. Domestic Prime Money Market seeks to invest in prime
quality, domestic money market instruments. (No-Load)
Portfolio Manager: Judith A. Raneri
Global Series
Gabelli Global Telecommunications Fund
Seeks to invest in telecommunications companies throughout the world -
targeting undervalued companies with strong earnings and cash flow dynamics.
The Fund's primary objective is capital appreciation. (No-load)
Team Manager: Mario J. Gabelli, CFA
Gabelli Global Convertible Securities Fund
Seeks to invest principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic companies. The Fund's
primary objective is total return through a combination of current income and
capital appreciation. (No-load) Portfolio Manager: Hart Woodson
Gabelli Global Interactive Couch Potato(R) Fund
Seeks to invest in securities of companies involved with communications,
creativity and copyright. The Fund also seeks to invest in companies
participating in emerging technological advances in interactive services and
products. The Fund's primary objective is capital appreciation. (No-load)
Portfolio Manager: Marc J. Gabelli
Gabelli Global Opportunity Fund
Seeks to invest in common stock of companies which have rapid growth in
revenues and earnings and potential for above average capital appreciation or
are undervalued. The Fund's primary objective is capital appreciation.
(No-load) Portfolio Managers: Marc J. Gabelli and Caesar Bryan
Gabelli Gold Fund
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial and political factors. (No-load)
Portfolio Manager: Caesar Bryan
Gabelli International Growth Fund
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (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.
The Funds listed above are distributed by Gabelli & Company, Inc.
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For more information, call:
1-800-GABELLI
(1-800-422-3554) o fax: 1-914-921-5118 o www.gabelli.com o [email protected]
One Corporate Center, Rye, New York 10580
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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 Karl Otto Pohl
Chairman and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Funds, Inc.
Werner J. Roeder, MD
Felix J. Christiana Director of Surgery
Former Senior Vice President Lawrence Hospital
Dollar Dry Dock Savings Bank
Anthonie C. van Ekris
Anthony J. Colavita Managing DIrector
Attorney-at-Law BALMAC International, Inc.
Anthony J. Colavita, P.C.
John D. Gabelli
Vice President
Gabelli & Company, Inc.
Officers
Mario J. Gabelli, CFA A. Hartswell Woodson, III
President and Chief Vice President and
Investment Officer 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 LLP
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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 accompa nied by an
effective prospectus.
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