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Global
Entertainment
Media
Gabelli
Global Interactive
Couch Potato(R) Fund
FIRST QUARTER REPORT
MARCH 31, 1998
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Global
Entertainment
Media
[PHOTO OMITTED]
First Quarter Report, March 31, 1998 Marc J. Gabelli
The Gabelli Global Interactive Couch Potato(R) Fund
#1 Global Fund!
(as ranked by Lipper Analytical Services based on one year performance
through 3/31/98 among 191 global funds).
To Our Shareholders,
Driven by low inflation, low interest rates, solid corporate earnings
growth, deals and liquidity (the continuing strong flow of cash into equity
funds), U.S. and European stock market indices posted strong gains in the first
quarter of 1988. Investors continued to favor global multimedia stocks as
evidenced by the Gabelli Global Interactive Couch Potato(R) Fund's strong
absolute and relative performance.
Investment Performance
For the first quarter ended March 31, 1998, The Gabelli Global Interactive
Couch Potato(R) Fund's total return was 15.2%. The Lipper Analytical Services
Global Fund Average had a return of 13.6% over the same period. The average is
an unmanaged indicator of investment performance. The Fund was up 62.7% over the
trailing twelve month period. The Lipper Global Fund Average rose 27.1% over the
same twelve month period. Since inception on February 7, 1994 through March 31,
1998, the Fund has a total return of 121.9%, which equates to an average annual
return of 21.2%.
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Interactive Couch Potato(R)
Interactive (in' ter ak' tiv) Having the capacity for communication
flow in each direction.*
Couch (kouch) An appellation for the heavy user of
television, depicted in the metaphor
Potato (po ta' to) as plopped before the television set
like a vegetable with eyes. The term
(pe ta' to) was coined in the early 1980s by a
group of Baby Boomers in the San
Francisco area who playfully glorified
their addiction to the tube. Calling
themselves The Couch Potatoes, they
formed a national club and published a
hilarious newsletter in the couch
potato lifestyle containing bizarre
recipes for that vital companion to
the TV set, the toaster oven. After a
burst of enlistments, the club quietly
disappeared. All that remains today is
the metaphor, and its current use
tends to be more pejorative than
self-mocking or affectionate.*
* Source: NTC Mass Media Directory.
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Investment Results(a)
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<TABLE>
<CAPTION>
Quarter
-------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C>
1998: Net Asset Value................ $16.45 -- -- -- --
Total Return................... 15.2% -- -- -- --
- -------------------------------------------------------------------------------------------
1997: Net Asset Value................ $11.79 $13.72 $15.02 $14.28 $14.28
Total Return................... 0.3% 16.4% 9.5% 10.9% 41.7%
- -------------------------------------------------------------------------------------------
1996: Net Asset Value................ $12.57 $13.40 $13.22 $11.75 $11.75
Total Return................... 7.3% 6.6% (1.3)% (0.3)% 12.5%
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1995: Net Asset Value................ $10.62 $11.28 $12.30 $11.72 $11.72
Total Return................... 3.6% 6.2% 9.0% (1.8)% 17.9%
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1994: Net Asset Value................ $ 9.90 $ 9.97 $10.54 $10.25 $10.25
Total Return................... (1.0)%(b) 0.7% 5.7% (2.8)% 2.5%(b)
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</TABLE>
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Average Annual Returns - March 31, 1998(a)
- -------------------------------------------
1 Year ........................ 62.7%
3 Year ........................ 27.8%
Life of Fund (b)............... 21.2%
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Dividend History
--------------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
----------------- -------------- ------------------
December 31, 1997 $2.370 $14.28
December 31, 1996 $1.436 $11.75
December 29, 1995 $0.363 $11.72
(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 7, 1994. Note:
Investing in foreign securities involves risks not ordinarily associated with
investments in domestic issues, including currency fluctuation, economic and
political risks.
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Global Allocation
The accompanying chart presents the Fund's holdings by geographic region
as of March 31, 1998. 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.
Portfolio Structure
As we have indicated in past discussions, the Interactive Couch
Potato's(R) investment premise falls within the context of two main investment
universes: 1) companies involved in creativity, as it relates to the development
of intellectual property rights (copyrights); and 2) companies involved in
distribution, as it relates to the delivery of these copyrights. Additionally,
this includes the broad scope of communications-related services such as basic
voice and data.
The accompanying chart depicts our equity mix of the copyright/creativity
and distribution companies in our portfolio as of March 31, 1998.
HOLDINGS BY GEOGRAPHIC REGION - 3/31/98
[PIE CHART OMITTED REPRESENTING THE FOLLOWING DATA]
United States 67.3%
Europe 21.8%
Canada 5.6%
Asia/Pacific Rim 4.9%
South America 0.4%
[PIE CHART OMITTED REPRESENTING THE FOLLOWING DATA]
Distribution 57.7%
Copyright/Creativity 42.3%
COMMENTARY
Ringing Up Profits
Five of the Fund's fifteen best performing stocks this quarter were in the
telecommunications industry (BC Telecom, Telecom Italia, Southern New England
Telecommunications, Telefonica de Espana and Cable & Wireless). Other telephone
holdings (Frontier Corp., BCE Inc. and Bell Atlantic) outperformed the market
averages. The telecommunications group's exceptional performance this quarter
may be partly explained by WorldCom and British Telecom's battle over MCI and to
a lesser extent, SBC Communications' bid for Southern New England
Telecommunications, which helped raise
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the valuation standards in the industry. However, there are more powerful long
term trends that we believe will continue to fuel selected telephone stocks.
You will note that our list of winners has a distinct international
flavor. There are three factors that make international telephone stocks
intriguing. To compete on the global economic stage, a modern telecommunications
system is essential. So, those companies operating in less developed countries
and regions (most notably, Cable & Wireless, which is the majority owner of Hong
Kong Telecommunications, and Telefonica de Espana, which owns significant chunks
of Latin American telephone companies in addition to its domestic operations in
Spain) have exceptional growth potential. The second factor is privatization.
Formerly government-owned telephone companies in Europe and Latin America are
passing into the hands of profit oriented investors and are being run more
efficiently by private sector managements. Finally, international boundaries are
crumbling and companies are jockeying for global market share. This means
continued consolidation throughout the industry and an increased number of joint
venture partnerships that will surface value for shareholders.
Cable television operators, cable television networks and small group
broadcasters were also well represented on our performance list, with United
International Holdings, Cablevision, Viacom, Granite Broadcasting and Paxson
Communications among our top twenty five performers this quarter. These groups
have performed particularly well over the last year or so, but in our opinion,
continue to offer value. We do not think the upside of cable television
operators' participation in the internet transmission business is fully
reflected in stock prices. The value of established cable television networks
continues to grow as global entertainment distribution systems expand. Selected
group broadcasters should continue to perform well as advertising revenues
remain strong in the vibrant U.S. and European economies. All three industry
groups will likely continue to benefit from ongoing consolidation as large media
companies attempt to increase global market share.
Patience Rewarded
Despite the terrific year enjoyed by global media stocks and the Fund in
1997, several prominent U.S. media companies disappointed. We felt we had a good
handle on the values in Seagram's and Viacom and remained patient with our
positions in these two "loaded laggards".
In our 1997 Annual Report, we highlighted Seagram's and Viacom as
relatively large portfolio holdings that did not perform well in 1997 in what
was quite a good year for the Fund. We reviewed our assessment of the values,
talked about some of the positive events happening at each company and
reaffirmed our commitment to these loaded laggards.
Our patience has been rewarded with Seagram's stock gaining 18% and Viacom
stock climbing 30% in the first quarter of 1998. In the case of Seagram's, we
cannot isolate any single event
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responsible for the stock's excellent performance this quarter. We think Wall
Street finally did its homework and came to the conclusion that the rather
complex transaction with Home Shopping Network and the purchase of the
additional 50% of USA Network made good financial and strategic sense.
The move in Viacom was quite literally "Titanic". This blockbuster will
certainly boost parent company Viacom's 1998 earnings. However, in our opinion,
the turnaround in the other Blockbuster (Blockbuster Entertainment, Viacom's
huge video rental business), will provide even greater benefits for the company
going forward. Especially important, the company continues to pare debt, with a
big paydown coming from the sale of Simon & Schuster's publishing operations.
Let's Talk Stocks
The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects do not necessarily translate into higher stock
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.
BCE Inc. (BCE - $41.75 - NYSE), the holding company for Bell Canada, is Canada's
largest telecommunications company. BCE has controlling interests in Northern
Telecom (NT - $64.625 - NYSE) and BCEMobile Communications (BCX - $29.85 - TSE).
There are substantial values in BCE. For example, "behind" each share of BCE
there are 0.4 shares of Northern Telecom. This NT interest, marked to market, is
worth over $25 per BCE share. The company is a possible candidate for break-up.
In the interim, the Canadian Radio and Television Commission is providing a more
attractive operating environment in which BCE is becoming more competitive.
Cable & Wireless plc (CWP - $37.75 - NYSE) is a United Kingdom-based company
comprised of broad global telecommunications interests. CWP has finalized plans
to merge its U.K. operations with Nynex CableComms Group plc and Bell Cable
Media plc, bolstering its presence in the increasingly competitive U.K.
communications market. The company now owns 53% of a new, publicly traded
U.K.-based company, Cable & Wireless Communications plc, which owns 100% of
Mercury Communications, the second largest provider of telecom services in
Britain, and a majority of Bell Cable Media, Nynex CableComms and Videotron
Holdings plc. Hong Kong Telecommunications (HKT - $20.9375 - NYSE), the dominant
telecom service provider in Hong Kong, is 54%-owned by CWP and remains the
"crown jewel" of the CWP portfolio. CWP is attractive based on its high rate of
growth and reasonable market valuation.
Cablevision Systems Corp. (CVC - $65.75 - ASE), based in Woodbury, NY, is a
major cable TV operator serving 2.9 million subscribers, including managed
systems. CVC's revenue per subscriber is the highest in the cable industry. CVC
has exercised its option to purchase ITT's 50% stake in MSG (Madison Square
Garden) Properties, including the NY Knicks and NY Rangers. Cablevision has also
purchased Tele-Communications Inc.'s ten New York area cable properties with
roughly 820,000
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subscribers by issuing over 12.2 million shares (a one-third interest in the
company) and assuming about $670 million of TCI's debt. The company's new,
vigorous activity includes the sale of a 40% stake in Rainbow Sports to a News
Corp./TCI joint venture with the proceeds used to pay down a significant portion
of MSG's debt. With its upgraded cable systems, CVC is well-positioned to offer
telephony, high speed data and enhanced video services.
Havas SA (AGHP.PA - $82.80 - Paris Stock Exchange), the second largest
multimedia company in Europe, is involved in advertising, publishing and
tourism. The company has a good mix of cyclical and non-cyclical businesses.
With investments in Canal+, a pay television channel; EuroRSCG, Europe's leading
advertising consultancy firm; and CLT, one of Europe's largest television and
radio operators, Havas is in a position to build a powerful multimedia group.
Seagram Company Ltd. (VO - $38.1875 - NYSE), with its 1995 purchase of an 80%
interest in MCA from Matsushita Electric Industrial Co. for $5.7 billion,
operates two global businesses: beverages and entertainment. Seagram is a
leading global producer and marketer of distilled spirits, wines, fruit juices
and mixers. Major beverage brands include Chivas Regal, Absolut, Martell, Mumm,
Crown Royal, Seagram's Gin and Tropicana and Dole fruit juices. MCA's film and
entertainment activities feature Universal Studios. MCA also has music and
recreation operations. Seagram owns about 14.7% of Time Warner common stock. We
estimate that Seagram's PMV exceeds $50 per share.
TCI Ventures Group (TCIVA - $17.5625 - Nasdaq) is a portfolio of
telecommunications investments essentially controlled by Dr. John Malone of
Tele-Communications Inc. (TCOMA - $31.0938 - Nasdaq). The company holds an 85%
equity interest in Tele-Communications International (TINTA - $20.125 - Nasdaq)
and has interests in telephony and programming businesses together with a 39%
equity interest in United Video Satellite Group (UVSGA - $42.50 - Nasdaq) and a
39% equity interest in @Home (ATHM - $33.8125 - Nasdaq). As cable companies
compete to provide high bandwidth access to the Internet and interactive
programming, TCI Ventures has investments which promise to eventually reach into
every U.S. home.
Telephone and Data Systems Inc. (TDS - $47.50 - ASE) is a domestic provider of
local telephone service to over 500,000 mostly rural access lines and is the
seventh largest cellular telephone company in the U.S. with a fast growing
paging business. TDS is oriented toward creating substantial shareholder value
(as opposed to focusing on near term earnings per share). Operating cash flow is
increasing, driven mainly by internal growth in cellular telephone. We expect
strong growth at TDS to increase its private market value. The company was
active in the PCS auctions and was the high bidder in eight markets with a
combined population of 27 million. TDS has investments in U.S. Cellular
(81%-owned), Aerial Communications (83%-owned) and American Paging (82%-owned).
TDS has announced a restructuring plan which is designed to unlock the value of
its business units.
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Tele-Communications Inc. (TCOMA - $31.0938 - Nasdaq), one of the largest cable
TV operators in the U.S., is guided by Dr. John Malone - one of the most
shareholder sensitive managers we have found. Regulation has historically played
an important role in the valuation of cable properties. Passage of The
Telecommunications Reform Act of 1996, combined with the current deregulatory
climate in Congress, is providing a significant catalyst for cable stocks. TCOMA
is a well-positioned industry leader, from its wireless telephony PCS venture
with Sprint, Comcast and Cox Communications to its innovative Internet access
business, dubbed "@Home", and its 80% stake in Tele-Communications International
Inc. (TINTA - $20.125 - Nasdaq). An important strategic shift for the company is
underway as some cable properties are being sold or transferred to
allianced-partners, shifting debt and strengthening the company's balance sheet.
Cost reduction programs, including overhead reduction, are showing substantial
progress and increasing operating cash flow.
Tele-Communications Inc./Liberty Media Group (LBTYA - $34.375 - Nasdaq) owns a
collection of interests in some of the most powerful programming entities in the
world. Liberty Media is the second largest investor in Time Warner, the world's
largest media company. Liberty Media, News Corp. and Tele-Communications
International Inc. have created a global sports joint venture, Fox Sports, that
offers an integrated package of sports programming across network broadcast,
national cable, and regional cable channels. Liberty's 49%-owned Discovery
Communications is a major advertiser-supported basic cable network that includes
the flagship Discovery Channel, The Learning Channel and developing businesses
such as Discovery Europe and Animal Planet. We consider Liberty Media to be
ideally positioned to benefit from expanding distribution channels, including
direct broadcast satellite ventures like DirecTV and the Internet.
Telefonica de Espana (TEF - $132.25 - NYSE) is a diversified telecommunications
service provider offering services to more than 15 million lines. The company
also services a fast growing cellular subscriber base with over two million
subscribers. We consider TEF to be an attractive way to invest in Latin America,
with a diversified portfolio of telecommunication operations in the region. Its
portfolio of publicly traded Latin American companies includes: Compania de
Telecomunicaciones de Chile SA, Telefonica de Argentina SA and Compania Peruana
de Telefonos SA. TEF also holds interests in non-public Latin American telecom
operations in Mexico, Puerto Rico, Colombia, Uruguay and Venezuela. The
company's long term strategy is to create a Pan American network, leveraging the
Spanish speaking world. TEF jump started this effort with its decision to form a
global alliance with WorldCom and MCI, which is gaining momentum in the race to
become the dominant provider of one-stop shopping for full-service, global
telecommunications products.
USA Networks Inc. (USAI - $27.25 - Nasdaq) is a diversified entertainment and
electronic commerce company. Chairman and CEO Barry Diller has brought the
following assets together under one umbrella: the USA Network, the Sci-Fi
Channel, USA Networks Studios, USA Broadcasting, Home Shopping
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Network and Ticketmaster. Plans are to integrate these assets, leveraging
programming production capabilities and electronic commerce across its strong
distribution platform.
Viacom Inc. (VIA - $53.125 - ASE; VIA'B - $53.75 - ASE), long a major provider
of entertainment "content", has evolved into one of the world's dominant media
companies. Following its acquisitions of Paramount Communications and
Blockbuster Entertainment, the company is now divesting non-core assets to
reduce its debt of approximately $10 billion and is focusing on the global
expansion of its media franchises. The company divested its cable systems
subsidiary in a transaction with Tele-Communications Inc. which reduced Viacom's
debt by $1.7 billion and the number of common shares outstanding by about four
percent. Its radio group, Evergreen Media, is being sold for $1.1 billion in
cash. Its publishing business, Simon & Schuster, has been put up for sale.
Viacom is well-positioned in music (notably MTV) and cable networks such as
Nickelodeon.
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 Interactive Couch Potato(R) 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.
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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].
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 GICPX. Please call us during the
business day for further information.
In the first quarter of 1998, global telecommunications and media stocks
continued to outperform their respective stock market indices. We do not believe
this will be a short term phenomena. We believe these industries will continue
to play a pivotal role in the further evolution of the global village and that a
portfolio concentrated in the best companies in these industries can deliver
very attractive long term returns. We thank you for your loyalty and as always,
pledge our best efforts on your behalf.
Sincerely,
/s/ Marc J. Gabelli
Marc J. Gabelli
Portfolio Manager
April 30, 1998
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Top Ten Holdings
March 31, 1998
Telephone and Data Systems USA Networks Inc.
Viacom Inc. TCI Ventures Group
TCI/Liberty Media Group Tele-Communications Inc.
Cablevision Systems Corp. Seagram Company Ltd.
Havas SA Pathe SA
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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.
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The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments -- March 31, 1998 (Unaudited)
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Market
Shares Value
------ -----
COMMON STOCKS -- 83.9%
Broadcasting -- 9.4%
35,000 Ackerley Group Inc............................ $ 715,313
20,000 Audiofina..................................... 791,635
5,150 Chris-Craft Industries Inc.+.................. 303,528
100,000 Flextech plc+................................. 904,285
20,000 Granada Group plc............................. 359,537
12,500 Granite Broadcasting Corp.+................... 144,531
125,000 Mediaset SpA.................................. 790,991
10,000 NRJ SA........................................ 1,727,008
10,000 Pathe SA...................................... 2,041,743
100,000 Paxson Communications Corp.+.................. 1,112,500
500 TV Francaise.................................. 62,140
----------
8,953,211
----------
Business Services -- 2.2%
10,000 Berlitz International Inc.+................... 270,625
45,000 Cendant Corp.+................................ 1,783,125
3,000 Trans-Lux Corp................................ 40,875
----------
2,094,625
----------
Cable Distribution -- 12.5%
60,000 Cablevision Systems Corp., Cl. A+............. 3,944,999
25,000 Comcast Corp., Cl. A.......................... 867,188
150,000 TCI Ventures Group+........................... 2,634,374
80,081 Tele-Communications Inc., Cl. A+.............. 2,490,019
20,000 Tele-Communications International Inc.,
Cl. A+...................................... 402,500
86,000 United International Holdings Inc., Cl. A+.... 1,440,500
5,000 US WEST Media Group+.......................... 173,750
----------
11,953,330
----------
Cable Programmers -- 4.9%
4,000 Canal +....................................... 750,199
115,000 Tele-Communications Inc./Liberty Media
Group, Cl. A+............................... 3,953,125
----------
4,703,324
----------
Communications Equipment -- 0.5%
25,000 General Instrument Corp.+..................... 523,438
----------
Computer Software and Services -- 0.6%
6,000 America Online Inc.+.......................... 409,875
5,000 N2K Inc.+..................................... 149,375
----------
559,250
----------
Entertainment -- 4.8%
50,332 Ascent Entertainment Group Inc.+.............. 519,049
12,500 BET Holdings Inc.+............................ 764,063
25,000 EMI Group plc................................. 208,069
4,000 Fisher Companies Inc.......................... 256,000
105,000 USA Networks Inc.+............................ 2,861,249
----------
4,608,430
----------
Entertainment Distribution -- 1.8%
30,000 Carmike Cinemas Inc., Cl. A+.................. $ 963,750
15,000 GC Companies Inc.+............................ 784,688
----------
1,748,438
----------
Global Media and Entertainment -- 12.9%
40,000 Havas SA...................................... 3,311,980
25,000 Havas, ADR.................................... 517,495
15,000 News Corp. Ltd., ADR.......................... 404,063
40,000 News Corp. Ltd., Preference Shares ADR........ 920,000
60,000 Seagram Co. Ltd............................... 2,291,250
12,500 Time Warner Inc............................... 900,000
45,000 Viacom Inc., Cl. A+........................... 2,390,624
30,000 Viacom Inc., Cl. B+........................... 1,612,500
----------
12,347,912
----------
Hotels and Gaming -- 4.8%
200,000 Aztar Corp.+.................................. 1,725,000
50,000 Circus Circus Enterprises Inc.+............... 1,050,000
25,000 Gaylord Entertainment Co...................... 893,750
36,000 Mirage Resorts Inc.+.......................... 875,250
----------
4,544,000
----------
International Telecommunications -- 7.4%
25,000 BC Telecom Inc................................ 968,618
30,000 BCE Inc....................................... 1,252,500
35,000 Cable & Wireless plc, ADR..................... 1,321,250
82,000 Companhia Riograndense de
Telecomunicacoes............................ 103,127
200 DDI Corp...................................... 491,935
225,000 Telecom Italia SpA+........................... 1,378,731
600,000 Telecomunicacoes de Minas Gerais--
Telemig Preferrence Shares, Cl. B........... 98,677
180,000 Telecomunicacoes do Parana SA--
Telepar Preferrence Shares.................. 106,064
10,000 Telefonica de Espana, ADR..................... 1,322,500
----------
7,043,402
----------
Publishing -- 7.5%
100,000 Arnoldo Mondadori Editore SpA+................ 1,152,029
10,000 Dow Jones & Co. Inc........................... 529,375
95,000 Gruppo Editoriale L'Espresso.................. 815,192
37,500 Independent Newspapers Ltd.................... 226,752
27,500 Independent Newspapers plc.................... 166,231
10,000 Knight-Ridder Inc............................. 558,750
5,000 Lagardere Groupe SCA+......................... 201,753
5,000 Meredith Corp................................. 210,625
12,500 New York Times Co., Cl. A..................... 875,000
10,000 Pulitzer Publishing Co........................ 798,750
20,000 Scripps (E.W.) Co............................. 1,106,250
3,500 Times Mirror Co., Cl. A....................... 221,813
10,000 United Newspapers plc, ADR.................... 276,250
----------
7,138,770
----------
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The Gabelli Global Interactive Couch Potato(R) Fund
Portfolio of Investments (Continued) -- March 31, 1998 (Unaudited)
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Market
Shares Value
------ -----
COMMON STOCKS (Continued)
Satellite -- 0.9%
25,000 COMSAT Corp................................... $ 860,938
----------
Telecommunications -- 5.6%
10,000 Bell Atlantic Corp............................ 1,025,000
85,000 Citizens Utilities Co., Cl. B+................ 897,815
25,000 Frontier Corp................................. 814,063
20,000 GTE Corp...................................... 1,197,500
100,000 Rogers Communications Inc., Cl. B+............ 566,052
10,000 Southern New England
Telecommunications Corp..................... 723,125
10,000 Viatel Inc.+.................................. 137,500
----------
5,361,055
----------
Wireless Communications -- 8.1%
20,000 AirTouch Communications Inc.+................. 978,750
5,000 Cellular Communications International Inc..... 340,000
100,000 Telephone and Data Systems Inc................ 4,750,000
35,000 Vanguard Cellular Systems Inc., Cl. A+........ 636,563
10,000 Vodafone Group plc, ADR....................... 1,038,750
----------
7,744,063
----------
TOTAL COMMON STOCKS........................... 80,184,186
----------
CONVERTIBLE PREFERRED STOCKS -- 0.0%
Publishing -- 0.0%
500 Golden Books Family Entertainment Inc.
8.75% Cv. Pfd.(a)........................... 27,313
----------
PREFERRED STOCKS -- 0.4%
Broadcasting -- 0.4%
185,000 Village Roadshow Ltd. Pfd..................... 382,773
----------
Principal Market
Amount Value
------ -----
CONVERTIBLE CORPORATE BONDS -- 0.3%
Entertaiment -- 0.3%
$ 50,000 Savoy Pictures Entertainment Inc.
7.00%, 07/01/03............................. $ 49,188
200,000 Viacom Inc. Sub. Deb. Cv.
8.00%, 07/07/06............................. 204,500
----------
TOTAL CONVERTIBLE
CORPORATE BONDS............................. 253,688
----------
U.S. GOVERNMENT OBLIGATIONS -- 14.0%
13,434,000 U.S. Treasury Bills, 5.28% to 5.43%,
due 04/16/98 to 05/28/98++.................. 13,386,532
----------
TOTAL INVESTMENTS -- 98.6%
(Cost $74,155,871).......................... 94,234,491
Other Assets and
Liabilities (Net) -- 1.4%.................. 1,383,951
----------
NET ASSETS -- 100.0%
(5,812,507 shares outstanding).............. $95,618,442
==========
NET ASSET VALUE, Offering and
Redemption Price Per Share.................. $16.45
======
FORWARD FOREIGN EXCHANGE CONTRACTS
Expiration Net Unrealized
Date Depreciation
---------- --------------
54,378(b) Bought British Pounds
in exchange for
USD 91,238.................. 04/06/98 $(207)
- ----------
(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 $27,313 or
0.03% of net assets.
(b) Principal amount denoted in British Pounds.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR -- American Depositary Receipt.
11
<PAGE>
Gabelli Global Series Funds, Inc.
The Gabelli Global Interactive Couch Potato(R) 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 Interactive Couch Potato(R) Fund. It is not authorized for
distribution to prospective investors unless preceded or accompanied by an
effective prospectus.
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