[PHOTO OMITTED]
The
Gabelli
Global
Telecommunications
Fund
SEMI-ANNUAL REPORT
JUNE 30, 1998
<PAGE>
[FLAGS OMITTED]
Gabelli Global Series Funds, Inc.
One Corporate Center
Rye, New York 10580 - 1434
The Gabelli Global Telecommunications Fund
Semi-Annual Report
June 30, 1998
****
Morningstar rated The Gabelli Global Telecommunications Fund 4 stars
overall and for the three year period ended 6/30/98 among 2545 domestic
equity funds.
To Our Shareholders,
Through most of the second quarter of 1998, global telecommunications
stocks were mixed. In general, our North American and European holdings
continued to perform well but our Asian and Latin American positions were hit
hard as Japan's recession spawned additional concern over Asian economies and
the spector of currency devaluation in Latin America. The quarter ended with a
big bang -- the AT&T announcement that it would acquire Tele-Communications Inc.
- -- a giant step in altering the global telecommunications landscape.
Investment Performance
For the second quarter ended June 30, 1998, The Gabelli Global
Telecommunications Fund's (the "Fund") total return was a meager 1.9%. The
Lipper Analytical Services Telecommunications Fund Average and Salomon Smith
Barney Global Telecommunications Index had returns of 1.0% and 0.4%,
respectively, over the same period. Each index is an unmanaged indicator of
investment performance. The Fund was up 37.4% over the trailing twelve month
period. The Lipper Telecommunications Fund Average and Salomon Smith Barney
Global Telecommunications Index rose 38.2% and 26.6%, respectively, over the
same twelve month period. Since inception on November 1, 1993 through June 30,
1998, the Fund had a total return of 101.7%, which equates to an average annual
return of 16.2%.
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. Morningstar proprietary
ratings reflect historical risk adjusted performance as of June 30, 1998 and are
subject to change every month. Morningstar ratings are calculated from the
Fund's three, five and ten year average annual returns in excess of 90-day
T-bill returns with appropriate fee adjustments and a risk factor that reflects
fund performance below 90-day T-Bill returns. The top 10% of the funds in an
investment category receive five stars and the next 22.5% receive four stars.
- --------------------------------------------------------------------------------
<PAGE>
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Quarter
-----------------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1998: Net Asset Value..................... $15.91 $16.22 -- -- --
Total Return........................ 19.4% 1.9% -- -- --
- -------------------------------------------------------------------------------------------------------------------------
1997: Net Asset Value .................... $11.29 $13.17 $14.22 $13.32 $13.32
Total Return ....................... 0.1% 16.7% 7.9% 4.6% 31.9%
- -------------------------------------------------------------------------------------------------------------------------
1996: Net Asset Value .................... $11.72 $12.16 $11.73 $11.28 $11.28
Total Return ....................... 5.4% 3.8% (3.5)% 3.3% 9.0%
- -------------------------------------------------------------------------------------------------------------------------
1995: Net Asset Value .................... $ 9.77 $10.29 $11.12 $11.12 $11.12
Total Return ....................... 0.4% 5.3% 8.1% 1.6% 16.2%
- -------------------------------------------------------------------------------------------------------------------------
1994: Net Asset Value .................... $ 9.68 $ 9.62 $10.38 $ 9.73 $ 9.73
Total Return ....................... (5.1)% (0.6)% 7.9% (5.3)% (3.7)%
- -------------------------------------------------------------------------------------------------------------------------
1993: Net Asset Value .................... -- -- -- $10.20 $10.20
Total Return ....................... -- -- -- 3.0%(b) 3.0%(b)
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------------------------------
Average Annual Return - June 30, 1998 (a)
- ---------------------------------------------
1 Year............................ 37.4%
3 Year............................ 24.3%
Life of Fund(b)................... 16.2%
- ---------------------------------------------
Dividend History
- ---------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 30, 1997 $1.550 $13.28
December 31, 1996 $0.840 $11.28
December 29, 1995 $0.182 $11.12
December 30, 1994 $0.095 $ 9.73
December 31, 1993 $0.102 $10.20
(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 November 1, 1993. Note:
Investing in foreign securities involves risks not ordinarily associated with
investments in domestic issues, including currency fluctuation, economic and
political risks.
- --------------------------------------------------------------------------------
Global Allocation
The accompanying chart presents the Fund's holdings by geographic region as
of June 30, 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.
[THE FOLLOWING TABLE WAS DEPICTED AS A PIE CHART IN THE PRINTED MATERIAL]
HOLDINGS BY GEOGRAPHIC REGION - 6/30/98
United States 47.0%
Canada 10.7%
Europe 19.6%
Latin America 4.5%
Asia/Pacific Rim 6.1%
Cash 12.1%
2
<PAGE>
COMMENTARY
Dialing Up a Big Deal - "Ma Bell" is Now Riding Motorcycles
Deregulation and technology have been driving change in the global
telecommunications industry. The need for speed is swiftly changing the "dial
tone" into the "web tone" as the telephone, computer and television converge
into one all purpose interactive information and entertainment instrument.
Convergence has just taken a leap forward with the prospective merger of AT&T
and cable television leader Tele-Communications Inc.
Does the proposed AT&T/TCI combination make sense? We think so. The
transaction gives AT&T the digital platform to compete in the local telephone
business. It also allows them to bundle long distance, local telephony, Internet
access and entertainment programming services on one line, passing approximately
one-third of all U.S. homes.
How will this change the global telecommunications/media landscape? It
opens the door for other long distance companies to break into local telephone
monopolies and perhaps for local telephone operators to further their inroads to
the long distance business. It dramatically increases the value of the cable
television industry's millions of coaxial connections into homes worldwide. It
will push the pace in which telephone infrastructure is upgraded to match
cable's digital and high speed capacity. It puts increasing pressure on every
global telecommunications company to create business combinations that will
allow them to compete with the full range of services that AT&T/TCI would be
capable of delivering. Finally, as additional business combinations are formed,
"content and creativity" providers could continue to be viewed as appetizing
targets.
Unearthing the Alternative Service Providers
Investors displayed concerns over the prospects for the satellite industry
during the second quarter. A series of satellite failures caused sporadic
service outages for the wireless services of a small but prominent group of
wireless providers. The problems were quickly fixed and insurance companies will
pick up most of the cost of the service disruptions. Notwithstanding this
temporary glitch, the satellite sector maintains tremendous long term potential
and we are optimistic about the prospects for Iridium and Globalstar, which will
soon activate their worldwide telephony service. Iridium's telephone has been
widely advertised and with this satellite communication device we will soon be
able to call you from anywhere in the world!
The promises of "anytime, anywhere" communication are getting closer to
reality in the cellular world as well. GSM cellular, the world standard with
over 80 million customers, can now be utilized in many European and Asian
countries seamlessly with the same handset and telephone number that you
3
<PAGE>
use in the U.S. thanks to the Bosh "world-phone". Omnipoint is one of the most
aggressive U.S. suppliers of this enhanced cellular service.
The need for speed and bandwith at home and at the office in connection
with tele-commuting and working via the Internet is driving the accelerating
roll-out of Digital Subscriber Lines and empowering many new interactive
applications. Competing for speed in the local markets are the numerous
Competitive Local Exchange Carriers (CLECs) still building the infrastructure of
fiber miles and continuing the battle with the incumbents, the Regional Bell
Operating Companies (RBOCs). Mergers between CLECs and Internet Service
Providers accelerated in the second quarter and many service providers branched
out into foreign markets signifying that the major battles for Internet access
might be fought more at the local level rather than at the backbone level.
The convergence of computers and telephony is driving tremendous
innovation in the handset manufacturing field, where the lines between wireless
handsets and PCs are blurring. Newer handsets offer interactive and online
functionality. As more telecommunications companies offer bundled services, some
are acquiring or starting software divisions in the content and applications
areas and initiating competition with traditional software companies. The most
relevant example is BCE, the Canadian holding company with interests in
wireline, wireless, satellite and now, through Bell Emergis, interactive
software applications.
Deal Activity Surfaces Value
One component of our investment methodology is to identify industry and
sector trends and themes ahead of the curve and position ourselves to benefit
from these developments. Industry consolidation is one such trend. As we have
discussed in previous letters, the continued strong merger and acquisition
activity is providing a tailwind to the excellent performance of the Fund this
year. The accompanying tables illustrate how deal activity surfaced value in a
small sample of the portfolio holdings.
4
<PAGE>
- --------------------------------------------------------------------------------
1998 Completed Deals
Fund Holding Closing Date % Return(a)
------------ ------------ -----------
PriCellular Corp. 6/25 33.5%
LCI International Inc. 6/05 17.7
Percentage Changes through June 30, 1998 for Announced Deals
Second Year-to-Date
Current Fund Holdings Quarter Return(b) Return(b)
--------------------- ----------------- ---------
Cable Michigan Inc. 52.9% 70.5%
360(degree) Communications Co. 6.0 64.1
Tele-Communications Inc. 23.6 37.6
Southern New England Telecommunications
Corp. (9.8) 30.2
Ameritech Corp. (9.2) 11.5
Emerging Communications Inc. 22.3 7.0
- --------------------------------------------------------------------------------
(a) Represents changes in share price and dividends paid from December 31,
1997 through the closing date.
(b) Represents changes in share price and dividends paid from the beginning of
the period through June 30, 1998.
Note: See the Portfolio of Investments for a complete listing of holdings.
- --------------------------------------------------------------------------------
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 June 30, 1998.
AirTouch Communications Inc. (ATI - $58.4375 - NYSE) is the world's largest
multinational company focused on wireless communications. The company offers a
full range of wireless services: cellular, paging and personal communications
services (PCS). In the future, AirTouch will offer global satellite
communications. AirTouch has over 11 million worldwide wireless subscribers.
1997 earnings, before acquisitions, almost doubled those in 1996. Cash flow
should grow by about 25% in 1998. The company has completed the acquisition of
the U.S. cellular and PCS interests of US West Media Group in a deal valued at
almost $6 billion.
BC Telecom Inc. (BCT - $37.39 - TSE), formerly British Columbia Telephone Co.,
is the second largest telecommunications services company in Canada. A
subsidiary of GTE owns 50.8% of the company. Its basic telephone operations
provide service to more than 2.5 million customer access lines and are growing
at rates much higher than the Canadian industry average. BCT's crown jewel is a
rapidly
5
<PAGE>
growing cellular phone company which currently serves over 407,000 subscribers.
We expect BCT to take advantage of the deregulatory trend in Canada by entering
new businesses.
BCE Inc. (BCE - $42.6875 - NYSE), the holding company for Bell Canada, is
Canada's largest telecommunications company. BCE has controlling interests in
Northern Telecom (NT - $56.75 - NYSE) and BCEMobile Communications (BCX - $26.00
- - NYSE). These are substantial values for 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 $22 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.
Cablevision Systems Corp. (CVC - $83.50 - ASE), based in Woodbury, NY, owns and
operates cable television systems in 18 states serving 2,844,000 basic service
subscribers at year end 1997. 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. In
March, Cablevision purchased Tele-Communications Inc.'s New York area cable
properties with 829,000 subscribers by issuing almost 24.5 million shares
(adjusted for the March 30, 1998 two-for-one stock split) and assuming $670
million of TCI's debt. These shares represent a one-third stake in CVC. 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.
Cable & Wireless plc (CWP - $36.8125 - 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 (CWZ - $50.00 - NYSE)
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 -
$18.875 -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.
MediaOne Group Inc. (UMG - $43.9375 - NYSE), recently split-off from US West
Media Group, is a cable distributor committed to providing multiple services
with an emphasis on high speed transmission. Following the sale of its
investment in Dex and the resale of its wireless operations, MediaOne has a
strong financial position which should allow the company to be one of the
leaders in the upgrading of cable infrastructures.
6
<PAGE>
Rogers Communications Inc. (RG - $9.00 - NYSE) is a holding company with
operations in four market segments; wireless, cable systems, telecommunications
and media. This Canadian company has investments in General Cable TV Ltd.,
Astral Communications, Canadian Satellite Communications, Cogeco and @Home Corp.
Southern New England Telecommunications Corp. (SNG - $65.50 - NYSE) is a holding
company for Southern New England Telephone (SNET) which provides telephone
services for most of Connecticut. SNET has had success in expanding into the
long distance market in its home territory, gathering a 40% share of the long
distance market in Connecticut. SBC Communications (SBC - $40.00 - NYSE) has
agreed to acquire SNG for $4.26 billion in stock.
Telecom Italia Mobile SpA (TIM.MI - $4.375 - Milan Stock Exchange), formerly a
subsidiary of Telecom Italia (the provider of wired local and long distance
telephone service in Italy), was spun-off last July and began trading on the
Milan stock exchange as an independent company. Telecom Italia Mobile is the
leading cellular provider in Italy. The company is the largest cellular provider
in Europe with close to eight million GSM subscribers. The competitive
environment in which Telecom Italia Mobile operates remains favorable, with two
new entrants in the market. Licenses have been awarded to Omnitel and Wind.
Telecomunicacoes Brasileiras SA (Telebras) (TBR - $109.1875 - NYSE) is the
Brazilian, government-controlled, monopoly telecommunications holding company
consisting of 28 subsidiaries serving more than 14 million telephone lines and
two million cellular customers in a country with a population of 160 million.
The penetration rate is less than 9% for telephone and 1% for cellular. Future
opportunities include the prospects of privatization, strong line growth and
improvements in efficiency. In October 1997, the Brazilian Ministry of
Communications announced the breakup of the company into three regional, nine
cellular and one long distance company.
Telefonica de Espana (TEF - $31.47 - 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 telecommunications 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.
7
<PAGE>
Telephone and Data Systems Inc. (TDS - $39.375 - ASE) is a diversified
telecommunications company with established cellular, local telephone and radio
paging operations and a developing personal communications services (PCS)
business. TDS provides high-quality telecommunications services to 3.2 million
customers in 37 states and the District of Columbia. The company was active in
the PCS auctions and was the high bidder in markets with a combined population
of 27 million. TDS owns 81.1% of United States Cellular Corporation and 82.5% of
Aerial Communications, Inc., TDS's PCS subsidiary which owns the licenses to
provide PCS service in six major trading areas encompassing approximately 27.6
million population equivalents. TDS also owns American Paging, Inc., a provider
of wireless messaging communications services to 811,100 customers in 21 states
and the District of Columbia.
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 Telecommunications 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.
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].
8
<PAGE>
Conclusion
As always during periods of dramatic change in an industry, there will be
big winners and big losers. We are dedicated to identifying and investing in the
former and doing our best to avoid the latter. Looking farther ahead, we believe
equities will still provide investors with superior risk adjusted returns
relative to other asset classes and that our value discipline will enable us to
provide satisfactory returns over the long term.
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's Nasdaq symbol is GABTX. Please call us during the
business day for further information.
Sincerely,
/s/ Mario J. Gabelli, /s/ Marc J. Gabelli
Mario J. Gabelli, CFA Marc J. Gabelli
Portfolio Manager and Associate Portfolio Manager
Chief Investment Officer
August 1, 1998
- --------------------------------------------------------------------------------
Top Ten Holdings
June 30, 1998
Cable & Wireless plc Telecom Italia Mobile SpA
Telephone and Data Systems Inc. Cablevision Systems Corp.
Telefonica de Espana Rogers Communications Inc.
BC Telecom Inc. Southern New England Telecom
BCE Inc. MediaOne Group Inc.
- --------------------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
9
<PAGE>
The Gabelli Global Telecommunications Fund
Portfolio of Investments -- June 30, 1998 (Unaudited)
================================================================================
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS -- 84.4%
Alternative Telecommunications Providers-- 1.2%
1,000 Colt Telecom Group plc+...... $ 31,875 $ 163,500
50,000 GST Telecommunications
Inc.+...................... 568,363 721,875
18,000 ICG Communications Inc.+..... 238,475 658,125
4,000 Intermedia Communications
Inc.+...................... 27,830 167,750
4,000 McLeodUSA Inc., Cl. A+....... 70,160 155,500
2,000 Startec Global
Communications Corp.+...... 24,000 23,000
25,000 Suncom
Telecommunications Inc.+... 139,154 10,000
400 Teleport Communications
Group Inc., Cl. A+......... 6,400 21,700
500 USN Communications Inc.+..... 7,734 4,438
--------- ---------
1,113,991 1,925,888
--------- ---------
Broadcasting -- 0.4%
2,000 Pathe SA..................... 414,326 391,992
5,000 Telemundo Group Inc., Cl. A+. 208,019 212,813
--------- ---------
622,345 604,805
--------- ---------
Cable -- 13.2%
40,000 Adelphia Communications
Corp., Cl. A+.............. 438,499 1,485,000
15,000 Cable Michigan Inc.+......... 158,285 585,000
36,000 Cablevision Systems Corp.,
Cl. A+..................... 682,806 3,006,000
70,000 Century Communications
Corp., Cl. A+.............. 590,705 1,312,500
50,000 Comcast Corp., Cl. A......... 782,977 1,987,500
40,000 Comcast U.K. Cable
Partners Ltd.+............. 589,750 627,500
10,000 General Cable plc, ADR+...... 146,775 193,750
5,000 Le Groupe Videotron ltee..... 51,939 71,402
64,000 MediaOne Group Inc. +........ 1,105,262 2,812,000
30,000 NTL Inc.+.................... 475,313 1,605,000
140,000 Rogers Communications
Inc., Cl. B+............... 875,723 1,260,000
82,932 TCI Ventures Group+.......... 762,076 1,663,823
40,000 Tele-Communications
Inc., Cl. A+............... 552,314 1,537,500
30,000 Tele-Communications
International Inc., Cl. A+. 514,638 602,813
15,000 Telewest Communications
plc, ADR+.................. 261,550 356,250
80,000 United International
Holdings Inc., Cl. A+...... 1,182,741 1,280,000
--------- ---------
9,171,353 20,386,038
--------- ---------
Communications Equipment -- 2.2%
120,000 Champion Technology
Holdings, ADR.............. 80,658 20,508
8,000 Ericsson (L.M.) Telephone Co.,
ADR........................ 55,422 229,000
5,000 General Instrument Corp.+.... 76,830 135,938
2,500 General Semiconductor Inc.+.. 33,120 24,688
3,500 L- 3 Communications
Holdings Inc. +............ 77,000 114,406
6,000 Lucent Technologies Inc...... 137,806 499,125
2,500 Motorola Inc................. 113,969 131,406
4,000 Nokia Corp., Cl. A, ADR..... 76,675 290,250
30,000 Northern Telecom Ltd......... 540,750 1,702,500
10,000 Scientific - Atlanta Inc..... 169,558 253,750
500 Siemens AG, ADR.............. 23,625 30,512
100,000 Time Engineering Berhad...... 264,575 13,743
--------- ---------
1,649,988 3,445,826
--------- ---------
Computer Software and Services -- 0.0%
1,000 EarthLink Network Inc.+...... 45,250 76,750
--------- ---------
Entertainment -- 0.4%
23,462 Ascent Entertainment Group
Inc.+...................... 177,530 261,015
6,000 Metromedia International
Group Inc.+................ 67,475 71,625
2,000 Time Warner Inc.............. 74,100 170,875
1,000 Viacom Inc., Cl. A+.......... 43,738 58,500
--------- ---------
362,843 562,015
--------- ---------
Long Distance Telephone Providers -- 5.0%
28,000 AT&T Corp.................... 1,312,847 1,599,500
25,000 Call-Net Enterprises Inc.+... 236,026 442,014
250 DDI Corp..................... 1,185,349 870,051
4,000 Esprit Telecom Group plc+.... 34,330 73,500
68,000 General Communication
Inc., Cl. A+............... 300,203 412,250
7,000 Kokusai Denshin Denwa Co.
Ltd........................ 575,695 230,500
5,000 MCI Communications Corp...... 190,938 290,625
8,000 MIDCOM Communications
Inc.+...................... 6,958 160
66,000 PLD Telekom Inc.+............ 420,944 474,375
53,000 Philippine Long Distance
Telephone Co............... 1,772,063 1,199,125
5,830 Qwest Communications
International Inc.+........ 45,262 203,321
20,000 Sprint Corp.................. 546,369 1,410,000
8,000 Teleglobe Inc................ 60,486 213,255
2,000 Telegroup Inc.+.............. 20,000 18,500
5,000 Viatel Inc.+................. 41,871 85,000
4,000 WorldCom Inc.+............... 86,409 193,750
--------- ---------
6,835,751 7,715,926
--------- ---------
Publishing -- 0.2%
1,000 Media General Inc., Cl. A.... 23,050 48,750
8,000 News Corp. Ltd., ADR......... 179,087 257,000
100,000 Seat SpA+.................... 28,390 67,509
--------- ---------
230,527 373,259
--------- ---------
See accompanying notes to financial statements.
10
<PAGE>
The Gabelli Global Telecommunications Fund
Portfolio of Investments (Continued) -- June 30, 1998 (Unaudited)
================================================================================
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS (Continued)
Regional and Local Telephone Providers -- 12.8%
53,200 Aliant Communications Inc.... $ 947,144 $1,459,675
20,000 Alltel Corp.................. 561,875 930,000
44,000 Ameritech Corp............... 913,975 1,974,500
15,200 Atlantic Tele-Network Inc.+.. 129,263 189,050
10,608 Bell Atlantic Corp........... 272,025 483,990
27,000 BellSouth Corp............... 803,645 1,812,375
18,000 Bruncor Inc.................. 160,442 312,130
2,000 Cincinnati Bell Inc.......... 15,800 57,250
40,000 Commonwealth Telephone
Enterprises Inc.+.......... 482,456 1,050,000
7,000 E.Spire Communications Inc.+. 47,813 157,938
1,000 Electric Lightwave Inc., Cl. A+ 15,313 11,063
150,000 First Pacific Co. Ltd.+...... 90,040 62,915
10,000 First Pacific Co. Ltd., ADR.. 35,875 20,971
68,000 Frontier Corp................ 1,677,339 2,142,000
33,000 GTE Corp..................... 1,106,650 1,835,625
30,000 Island Telephone Co.......... 282,503 530,417
19,000 Maritime Telegraph and
Telephone Company Ltd...... 330,491 539,427
300 MetroNet Communications
Corp., Cl. B............... 8,487 8,475
12,000 NewTel Enterprises Ltd....... 207,133 306,826
4,000 Peoples Telephone
Company Inc.+.............. 21,800 12,500
20,000 QuebecTel Group Inc.......... 153,660 261,128
98,000 RCN Corp.+................... 882,901 1,898,750
10,000 SBC Communications Inc....... 204,707 400,000
43,000 Southern New England
Telecommunications Corp.... 1,524,378 2,816,499
10,000 Telus Corp................... 129,540 258,748
4,748 US West Inc.................. 113,779 223,148
---------- ----------
11,119,034 19,755,400
---------- ----------
Satellite -- 3.0%
3,000 American Mobile Satellite
Corp.+..................... 38,340 29,250
500 Asia Satellite
Telecommunications
Holdings Ltd............... 9,753 8,188
1,000 British Sky Broadcasting
Group, ADR................. 36,400 42,625
60,000 COMSAT Corp.................. 1,452,809 1,698,750
6,000 Echostar Communications
Corp., Cl. A+.............. 163,040 144,375
5,000 General Motors Corp.,
Cl. H...................... 182,072 235,625
16,000 Globalstar
Telecommunications+........ 55,725 432,000
21,500 Iridium World
Communications Ltd.+....... 429,563 1,143,531
15,000 Loral Space &
Communications Ltd.+....... 181,875 423,750
4,000 PT Indonesia Satellite, ADR.. 97,765 44,500
50,000 TCI Satellite Entertainment
Inc., Cl. A+............... 421,074 293,750
10,000 U.S. Satellite Broadcasting
Co.+....................... 106,007 116,875
---------- ----------
3,174,423 4,613,219
---------- ----------
Telecommunications -- 0.2%
12,500 Great Nordic Store........... 215,023 381,706
---------- ----------
Telephone Networks -- 24.4%
87,000 BC Telecom Inc............... 1,576,745 3,253,901
75,000 BCE Inc...................... 1,299,563 3,201,563
3,000 BHI Corp. +.................. 48,250 118,500
1,000 British Telecommunications
plc, ADR................... 53,925 123,500
34,000 Cable & Wireless
Communications plc, ADR+... 888,280 1,700,000
8,000,000 Cable & Wireless Jamaica
Ltd........................ 406,750 550,055
120,000 Cable & Wireless plc, ADR.... 2,594,388 4,424,999
100,000 Citizens Utilities Co., Cl. B+ 1,080,000 962,500
65,000 Compania de
Telecomunicaciones de
Chile SA, ADR.............. 1,018,469 1,320,313
500,000 CPT Telefonica del Peru,
Cl. B...................... 722,310 1,001,862
1,000 CPT Telefonica del Peru,
Cl. B, ADR................. 20,500 20,438
16,000 Deutsche Telekom AG.......... 313,538 440,000
38,000 Emerging Communications
Inc.+...................... 227,800 325,375
2,000 France Telecom SA............ 68,975 139,125
4,208 Hellenic
Telecommunications
Organization SA (OTE)...... 62,313 107,863
15,000 Hong Kong
Telecommunications
Ltd., ADR.................. 294,183 283,125
2,000 Hungarian Telephone &
Cable Corp.+............... 24,557 11,625
60 Japan Telecom Co. Ltd........ 1,186,503 471,232
15,000 Koninklijke PTT Nederland
NV, ADR.................... 470,521 954,375
500 Matav, ADR................... 9,650 14,719
167 Nippon Telegraph &
Telephone Corp............. 1,216,226 1,383,795
10,000 Nippon Telegraph &
Telephone Corp., ADR....... 409,638 420,000
800 Pakistan
Telecommunications,
GDR (a).................... 98,166 27,600
See accompanying notes to financial statements.
11
<PAGE>
The Gabelli Global Telecommunications Fund
Portfolio of Investments (Continued) -- June 30, 1998 (Unaudited)
================================================================================
Market
Shares Cost Value
------ ---- -----
COMMON STOCKS (Continued)
Telephone Networks (Continued)
12,000 Portugal Telecom SA, ADR..... $ 233,785 $ 635,250
12,000 PT Telekomunikasi Indonesia.. 188,316 69,750
1,000 Rostelecom, ADR.............. 20,925 13,375
20,000 Singapore
Telecommunications Ltd..... 48,208 28,411
8,000 Tele Danmark A/S, ADR........ 215,400 377,000
36,000 Telecom Argentina Stet --
France Telecom SA, ADR..... 848,848 1,073,250
23,000 Telecom Corporation of
New Zealand Ltd., ADR...... 551,387 753,250
194,444 Telecom Italia SpA........... 457,508 1,431,352
22,000 Telecom Italia SpA, ADR...... 490,102 1,617,000
1,000,000 Telecom Asia Corp. +......... 687,194 289,598
23,000 Telecomunicacoes Brasileiras
SA (Telebras), ADR........ 612,031 2,511,313
938,570 Telecomunicacoes de
Sao Paulo SA (Telesp)+..... 101,286 142,002
41,000 Telefonica de Argentina SA,
ADR........................ 1,142,274 1,329,938
27,000 Telefonica de Espana, ADR.... 1,219,896 3,754,687
36,000 Telefonos de Mexico SA,
Cl. L, ADR................. 1,376,800 1,730,250
300,000 Telekom Malaysia Berhad...... 1,420,412 506,329
600 Telstra Corp. Ltd., ADR (a).. 19,666 30,450
8,075 Thai Telephone & Telecom,
GDR + (a).................. 100,542 2,820
3,000 Veba AG...................... 126,252 204,428
---------- -----------
23,952,082 37,756,918
---------- -----------
Wireless Communications -- 21.4%
70,000 360(degree)Communications Co.+ 2,189,955 2,240,000
40,000 ABC Communications
Holdings Ltd............... 20,301 10,841
125,000 Aerial Communications Inc.+.. 854,790 781,250
40,000 AirTouch Communications Inc.+ 895,083 2,337,500
28,400 Associated Group Inc., Cl. A+ 308,905 1,164,400
32,000 Associated Group Inc., Cl. B+ 339,440 1,272,000
15,000 BCE Mobile Communications
Inc. +..................... 483,485 390,162
500 Bouygues Group............... 58,707 90,803
30,000 Cellular Communications
International Inc.+........ 332,622 1,496,250
70,000 Centennial Cellular Corp.,
Cl. A+..................... 1,166,408 2,611,875
42,000 Century Telephone
Enterprises Inc............ 811,681 1,926,750
2,000 Clearnet Communications
Inc., Cl. A +.............. 25,000 22,000
2,190 CommNet Cellular Inc.+....... 12,538 32,166
10,000 CoreComm Inc.+............... 193,810 262,500
35,000 CP Pokphand, ADR............. 259,575 32,183
5,300 Easycall Group+.............. 8,992 361
36,000 Europolitan Holdings AB...... 330,820 2,527,916
35,000 Grupo Iusacell SA, Ser. D,
ADR+....................... 422,475 323,750
26,000 Himachal Futuristic (a)...... 141,200 10,782
24,000 Jasmine International +...... 117,135 7,660
25,000 Mannesmann AG................ 819,702 2,535,963
1,500 Metrocall Inc.+.............. 11,138 9,094
9,789 NEXTEL Communications
Inc., Cl. A+............... 145,326 243,501
2,000 Omnipoint Corp.+............. 17,750 45,875
19,531 Price Communications
Corp.+..................... 88,769 299,068
125,000 Rogers Cantel Mobile
Communications Inc., Cl. B+ 1,784,341 1,562,500
1,000 Rural Cellular Corp., Cl. A+. 10,000 15,625
70,000 Securicor Group plc.......... 183,666 569,960
5,000 SkyTel Communications
Inc. +..................... 87,075 117,031
100,000 Technology Resources
Industries (a)............. 384,096 68,716
500 Telecel-Comunicacaoes
Pessoais SA................ 67,584 88,783
500,000 Telecom Italia Mobile SpA.... 703,504 3,050,828
105,000 Telephone and Data
Systems Inc................ 4,549,368 4,134,375
938,570 Telesp Celular SA +.......... 2,665 40,169
4,000 Teligent Inc., Cl. A+........ 90,000 117,750
2,000 Thyssen AG................... 367,787 506,362
20,000 Total Access
Communications plc +....... 126,250 21,400
5,000 United States Cellular
Corp.+..................... 144,563 153,750
7,500 Vanguard Cellular
Systems Inc., Cl. A+....... 107,830 141,563
1,500 Vimpel Communications+....... 50,795 67,125
14,000 Vodafone Group plc, ADR...... 364,424 1,764,875
---------- -----------
19,079,555 33,095,462
---------- -----------
TOTAL COMMON STOCKS.......... 77,572,165 130,693,212
---------- -----------
CONVERTIBLE PREFERRED STOCKS -- 2.2%
Cable -- 1.2%
18,000 Tele-Communications Inc.
6.00% Cv. Pfd., Ser. E..... 1,234,246 1,674,000
---------- -----------
Entertainment -- 0.0%
1,000 Metromedia International
Group Inc. 7.25% Cv. Pfd... 51,363 51,500
---------- -----------
Long Distance Telephone Providers-- 0.4%
12,000 Sprint Corp. 8.25% Cv. Pfd... 424,101 693,750
--------- ---------
Telephone Networks -- 0.3%
9,500 Philippine Long Distance
Telephone Co.
7.00% Cv. Pfd., Ser. III... 475,000 437,000
--------- ---------
See accompanying notes to financial statements.
12
<PAGE>
The Gabelli Global Telecommunications Fund
Portfolio of Investments (Continued) -- June 30, 1998 (Unaudited)
================================================================================
Market
Shares Cost Value
------ ---- -----
CONVERTIBLE PREFERRED STOCKS (Continued)
Wireless Communications -- 0.3%
3,000 AirTouch Communications Inc.
4.25% Cv. Pfd., Cl. C...... $ 144,750 $ 247,500
5,000 AirTouch Communications Inc.
6.00% Cv. Pfd., Cl. B...... 146,563 241,250
---------- -----------
291,313 488,750
---------- -----------
TOTAL CONVERTIBLE
PREFERRED STOCKS........... 2,476,023 3,345,000
---------- -----------
PREFERRED STOCKS -- 0.4%
Telephone Networks -- 0.3%
3,355,677 Telecomunicacoes de Rio de
Janeiro SA (Telerj) Pfd.... 148,557 255,316
40,900 Telecomunicacoes de Sao
Paulo SA (Telesp) Pfd...... 9,633 9,760
--------- ---------
158,190 265,076
--------- ---------
Wireless Communications -- 0.1% 3,000
SkyTel Communications Inc.
$2.25 Cv. Pfd.............. 84,750 104,250
3,355,677 Telerj Celular SA Pfd., Cl . B + 118,824 197,869
40,900 Telesp Celular SA Pfd., Cl. B + 40,512 3,391
--------- ---------
244,086 305,510
--------- ---------
TOTAL PREFERRED
STOCKS..................... 402,276 570,586
--------- ---------
RIGHTS -- 0.0%
Regional and Local Telephone Providers -- 0.0%
30,265 Telecomunicacoes de Rio
de Janeiro SA.............. 0 0
--------- ---------
Principal
Amount
------
CONVERTIBLE CORPORATE BONDS -- 0.6%
Telephone Networks -- 0.4%
$1,000,000 Telekom Malaysia Berhad
Sub. Deb. Cv.
4.00%, 10/03/04 (a) ....... 1,000,174 725,000
------------ ------------
Wireless Communications -- 0.2%
250,000 Technology Resources
Industries Sub. Deb. Cv.
2.75%, 11/28/04 (a)........ 250,000 260,000
------------ ------------
TOTAL CONVERTIBLE
CORPORATE BONDS............ 1,250,174 985,000
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 12.1%
6,095,000 U.S. Treasury Bills,
4.81% to 5.14%, due
08/06/98 to 09/17/98 ++.... 18,754,065 18,754,065
------------ ------------
TOTAL INVESTMENTS
-- 99.7%.................... $100,454,703 $154,347,863
============
Other Assets and
Liabilities (Net)-- 0.3%... 485,077
------------
NET ASSETS -- 100.0%
(9,548,321 shares outstanding) $154,832,940
============
NET ASSET VALUE,
Offering and Redemption
Price Per Share............ $16.22
======
FORWARD FOREIGN EXCHANGE CONTRACTS
Expiration Net Unrealized
Date Depreciation
---- ------------
2,300,000 (b) Sold Hong Kong Dollars
in exchange for
USD 292,584 08/26/98 $(2,196)
- -------------
For Federal tax purposes:
Aggregate cost.................................. $100,454,703
===========
Gross unrealized appreciation................... $ 60,521,658
Gross unrealized depreciation................... (6,628,498)
-----------
Net unrealized appreciation..................... $ 53,983,160
===========
(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 June 30,
1998, the market value of Rule 144A securities amounted to $ 1,125,368 or
0.7% of net assets.
(b) Principal amount denoted in Hong Kong Dollars.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR-- American Depositary Receipt.
GDR-- Global Depositary Receipt.
% of
Market Market
Geographic Diversification Value Value
- -------------------------- ----- -----
North America 69.8% $107,709,220
Europe 19.6% 30,314,464
Asia/Pacific Rim 6.1% 9,403,025
Latin America 4.5% 6,921,154
------ ------------
100.0% $154,347,863
====== ============
See accompanying notes to financial statements.
13
<PAGE>
The Gabelli Global Telecommunications Fund
Statement of Assets and Liabilities
June 30, 1998 (Unaudited)
================================================================================
Assets:
Investments, at value (Cost $100,454,703) ............... $154,347,863
Cash and foreign currency, at value
(Cost $226,204) ....................................... 219,931
Dividends and interest receivable ....................... 235,289
Receivable for investments sold ......................... 229,597
Receivable for capital shares sold ...................... 50,056
Deferred organizational expenses ........................ 13,780
------------
Total Assets .......................................... 155,096,516
------------
Liabilities:
Payable for investment advisory fees .................... 122,030
Payable for distribution fees ........................... 30,507
Other accrued expenses .................................. 111,039
------------
Total Liabilities ..................................... 263,576
------------
Net Assets applicable to 9,548,321
shares outstanding ................................... $154,832,940
============
Net Assets consist of:
Capital stock, at par value ............................. $ 9,548
Additional paid-in capital .............................. 95,313,652
Undistributed net investment income ..................... 271,135
Accumulated net realized gain on investments
and foreign currency transactions .................... 5,354,174
Net unrealized appreciation on investments
and foreign currency transactions .................... 53,884,431
------------
Total Net Assets ...................................... $154,832,940
============
Net Asset Value, offering and redemption
price per share ($154,832,940 # 9,548,321
shares outstanding; 1,000,000,000
shares authorized of $0.001 par value) .............. $ 16.22
============
Statement of Operations
For the Six Months Ended June 30, 1998 (Unaudited)
================================================================================
Investment Income:
Dividends (net of foreign taxes of $41,798) .............. $ 936,036
Interest ................................................. 409,114
-----------
Total Investment Income ................................ 1,345,150
-----------
Expenses:
Investment advisory fees ................................. 694,488
Distribution fees ........................................ 173,621
Shareholder services fees ................................ 98,071
Shareholder report expenses .............................. 23,137
Registration fees ........................................ 18,680
Legal and audit fees ..................................... 16,648
Organizational expenses .................................. 7,751
Miscellaneous expenses ................................... 41,550
-----------
Total Expenses ......................................... 1,073,946
-----------
Net Investment Income .................................. 271,204
-----------
Net Realized and Unrealized Gain
on Investments:
Net realized gain on investments, futures
contracts and foreign currency
transactions ........................................... 5,372,739
Net change in unrealized appreciation
on investments and foreign currency
transactions ........................................... 20,851,015
-----------
Net realized and unrealized gain
on investments, futures contracts
and foreign currency transactions ..................... 26,223,754
-----------
Net increase in net assets resulting
from operations .......................................... $26,494,958
===========
Statement of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1998 December 31,
(Unaudited) 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ............................................... $ 271,204 $ 13,283
Net realized gain on investments, futures contracts
and foreign currency transactions ................................. 5,372,739 12,291,080
Net change in unrealized appreciation on investments
and foreign currency transactions ................................. 20,851,015 17,429,948
------------- -------------
Net increase in net assets resulting from operations .............. 26,494,958 29,734,311
------------- -------------
Distributions to shareholders:
Net realized gain on investments .................................... -- (12,322,997)
------------- -------------
Capital share transactions:
Net increase (decrease) in net assets from capital share transactions 10,466,359 (8,083,350)
------------- -------------
Net increase in net assets .......................................... 36,961,317 9,327,964
Net Assets:
Beginning of period ................................................. 117,871,623 108,543,659
------------- -------------
End of period ....................................................... $ 154,832,940 $ 117,871,623
============= =============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
The Gabelli Global Telecommunications Fund
Notes to Financial Statements (Unaudited)
================================================================================
1. Description. The Gabelli Global Telecommunications Fund (the "Fund"), a
series of Gabelli Global Series Funds, Inc. (the "Corporation"), was organized
on July 16, 1993 as a Maryland corporation. The Fund is a non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act") and one of four separately managed
portfolios of the corporation, whose primary objective is capital appreciation.
The Fund commenced investment operations on November 1, 1993.
2. Significant Accounting Policies. 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 in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally
recognized securities exchange, 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 as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day). 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. Portfolio securities traded on more
than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by the Adviser. 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 Board of 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. Debt instruments having a greater maturity are
valued at the highest bid price obtained from a dealer maintaining an active
market in those securities. Options are valued at the last sale price on the
exchange on which they are listed. If no sales of such options have taken place
that day, they will be valued at the mean between their closing bid and asked
prices.
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 credit guidelines established by the Directors. Under the terms of a
typical repurchase agreement, the Fund takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. 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. 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
15
<PAGE>
The Gabelli Global Interactive Couch Potato(TM)(C) Fund
Notes to Financial Statements (unaudited) (continued)
================================================================================
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.
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. 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 included in
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. At June 30, 1998, there were no open futures contracts.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments. 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 exchange 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
exchange 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.
Foreign Currency Translation. The books and records of the Fund are maintained
in United States (U.S.) dollars. Foreign currencies, investments and other
assets and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
ecurities, income and expenses are translated at the exchange rate prevailing on
the respective dates of such transactions. Unrealized gains and losses, which
result from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in unrealized appreciation/depreciation on
investments. Net realized
16
<PAGE>
The Gabelli Global Telecommunications Fund Notes to Financial Statements
(Continued) (Unaudited)
================================================================================
foreign currency gains and losses resulting from changes in exchange rates
include foreign currency gains and losses between trade date and settlement date
on investment securities transactions, foreign currency transactions and the
difference between the amounts of interest and dividends recorded on the books
of the Fund and the amounts actually received. The portion of foreign currency
gains and losses related to fluctuation in exchange rates between the initial
trade date and subsequent sale trade date is included in realized gain/(loss) on
investments.
Securities Transactions and Investment Income. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
For the year ended December 31, 1997, reclassifications were made to increase
distributions in excess of net investment income for $283 and accumulated net
realized loss on investments and foreign currency transactions for $486,839 with
an offsetting adjustment to additional paid-in-capital.
Provision for Income Taxes. The Fund has qualified and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not 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 the value of more than 50%
of the Fund's total net 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.
3. Investment Advisory Agreement. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% of the value of the Fund's average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Fund's portfolio, oversees the administration of all
aspects of the Fund's business and affairs and pays the compensation of all
Officers and Directors of the Fund who are its affiliates.
17
<PAGE>
The Gabelli Global Telecommunications Fund
Notes to Financial Statements (Continued) (Unaudited)
================================================================================
4. Distribution Plan. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the six months
ended June 30, 1998 the Fund incurred distribution costs payable to Gabelli &
Company, Inc., an indirect wholly-owned subsidiary of the Adviser, of $173,621,
or 0.25% of average net assets, the annual limitation under the Plan. Such
payments are accrued daily and paid monthly.
5. Organizational Expenses. The organizational expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months.
6. Portfolio Securities. Purchases and sales of securities for the six months
ended June 30, 1998, other than short term securities, aggregated $12,106,611
and $11,946,100, respectively.
7. Bank Loan. The Fund has access to an unsecured line of credit from the
custodian for temporary purposes. Borrowings under this arrangement bear
interest at 0.75% above the Federal Funds rate on outstanding balances. There
were no borrowings outstanding at June 30, 1998.
8. Transactions with Affiliates. During the six months ended June 30, 1998, the
Fund paid brokerage commissions of $15,215 to Gabelli & Company, Inc. and its
affiliates.
9. Capital Stock Transactions. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
--------------------------- ---------------------------
Shares Amount Shares Amount
----- ------ ------ -------
<S> <C> <C> <C> <C>
Shares sold ................................ 4,540,336 $ 69,211,228 2,019,543 $ 24,786,732
Shares issued upon reinvestment of dividends -- -- 895,899 11,897,535
Shares redeemed ............................ (3,842,452) (58,744,869) (3,688,802) (44,767,617)
------------ ------------ ------------ ------------
Net increase (decrease) .................. 697,884 $(10,466,359) (773,360) $ (8,083,350)
============ ============ ============ ============
</TABLE>
18
<PAGE>
The Gabelli Global Telecommunications Fund
Financial Highlights
================================================================================
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, 1998 --------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993+
------------ ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning of period .. $ 13.32 $ 11.28 $ 11.12 $ 9.73 $ 10.20 $ 10.00
-------- -------- ------- -------- -------- --------
Net investment income ................. 0.03 0.00(a) 0.05 0.06 0.07 0.01
Net realized and unrealized gain (loss)
on investments ...................... 2.87 3.59 0.95 1.51 (0.44) 0.29
-------- -------- ------- -------- -------- --------
Total from investment operations ...... 2.90 3.59 1.00 1.57 (0.37) 0.30
-------- -------- ------- -------- -------- --------
Distributions to shareholders:
Net investment income ................. -- -- (0.05) (0.06) (0.07) (0.01)
Net realized gain on investments ...... -- (1.55) (0.79) (0.12) (0.03) (0.09)
-------- -------- ------- -------- -------- --------
Total distributions ................... -- (1.55) (0.84) (0.18) (0.10) (0.10)
-------- -------- ------- -------- -------- --------
Net asset value, end of period ........ $ 16.22 $ 13.32 $ 11.28 $ 11.12 $ 9.73 $ 10.20
======== ======== ======= ======== ======== ========
Total return++ ........................ 21.8% 31.9% 9.0% 16.2% (3.7)% 3.0%
Ratios to average net assets and
supplemental data:
Net assets, end of period (in 000's) .. $ 154,833 $ 117,872 $ 108,544 $ 122,845 $ 137,731 $ 45,290
Ratio of net investment income
to average net assets .............. 0.39%(b) 0.01% 0.34% 0.53% 0.74% 1.28%(b)
Ratio of operating expenses
to average net assets .............. 1.54%(b) 1.78%(c) 1.72% 1.75% 1.80% 2.54%(b)
Portfolio turnover rate ............... 10% 9% 7% 24% 14% --
</TABLE>
- ----------
+ From commencement of operations on November 1, 1993.
++ 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.
(a) Amount represents less than $0.005 per share.
(b) Annualized.
(c) The Fund incurred interest expense during the year ended December 31,
1997. If interest expense had not been incurred, the ratio of operating
expenses to average net assets would have been 1.74%.
See accompanying notes to financial statements.
19
<PAGE>
Gabelli Global Series Funds, Inc.
The Gabelli Global Telecommunications Fund
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
fax: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
Board of Directors
Mario J. Gabelli, CFA Karl Otto Pohl
Chairman and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Funds, Inc.
Felix J. Christiana Werner J. Roeder, MD
Former Senior Vice President Director of Surgery
Dollar Dry Dock Savings Bank Lawrence Hospital
Anthony J. Colavita Anthonie C. van Ekris
Attorney-at-Law Managing Director
Anthony J. Colavita, P.C. BALMAC International, Inc.
John D. Gabelli
Vice President
Gabelli & Company,Inc.
Officers and Portfolio Managers
Mario J. Gabelli, CFA Marc J. Gabelli
President and Chief Associate Portfolio Manager
Investment Officer
Bruce N. Alpert James E. McKee
Vice President and Treasurer Secretary
Distributor
Gabelli & Company, Inc.
Custodian, Transfer Agent and Dividend Agent
State Street Bank and Trust Company
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Global Telecommunications Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
