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[GRAPHIC]
GABELLI GLOBAL SERIES FUNDS, INC.
One Corporate Center
Rye, New York 10580 - 1434
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
THIRD QUARTER REPORT
SEPTEMBER 30, 1997
TO OUR SHAREHOLDERS,
For the third quarter ended September 30, 1997, The Gabelli Global
Telecommunications Fund's total return was 7.9%. The Lipper Analytical
Services Telecommunications Fund Average and Salomon Brothers Global
Telecommunications Index had returns of 10.4% and 0.9%, respectively, over the
same period. Each index is an unmanaged indicator of investment performance.
The Fund is up 26.1% year-to-date. The Lipper Telecommunications Fund Average
and Salomon Brothers Global Telecommunications Index rose 27.2% and 20.4%,
respectively, over the same nine month period. Since inception on November 1,
1993 through September 30, 1997, the Fund has a total return of 58.4%, which
equates to an average annual return of 12.5%.
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
Quarter
---------------------------------------------------------
1st 2nd 3rd 4th Year
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1997: Net Asset Value $11.29 $13.17 $14.22 __ __
Total Return 0.1% 16.7% 7.9% __ __
- ----------------------------------------------------------------------------------------------------------
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 - September 30, 1997 (a)
<TABLE>
<S> <C>
1 Year . . . . . . . . . . . . . . 30.3%
3 Year . . . . . . . . . . . . . . 14.7%
Life of Fund(b) . . . . . . . . . 12.5%
</TABLE>
<TABLE>
<CAPTION>
Dividend History
- ----------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
<S> <C> <C>
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
</TABLE>
(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.
<PAGE> 2
GATEWAY TO CHINA
This quarter we would like to share with you an evolving story at Cable &
Wireless plc in order to demonstrate the application of our investment
methodology to individual stock selection. Our simplified account will focus
on select aspects of our evaluation to maintain clarity in the demonstration of
our analytical process.
CABLE & WIRELESS PLC (CWP - $25.875 - NYSE)
Cable & Wireless plc is a United Kingdom-based global conglomerate in the
business of providing telecommunications and multimedia communications services
in over 50 countries. Its principal subsidiaries are Hong Kong
Telecommunications Ltd. (HKT - NYSE), which is 53.7% owned and a United Kingdom
cable/telephony company known as Cable & Wireless Communications (CWZ - NYSE),
which is 52.6% owned. Other regions of principal operation include the United
States and the Caribbean.
The company hired Richard Brown as Chief Executive Officer (CEO) in June 1996.
His background includes executive positions at Ameritech and the CEO position
at H&R Block, the parent of CompuServe. Since joining CWP, he has strengthened
the company's position in Europe and Asia by consolidating the UK cable TV and
telephony industries and by establishing a strategic relationship with the
Chinese government.
We continue to believe Cable & Wireless plc provides an attractive investment
opportunity. Its recent transactions should strengthen its market position and
improve its cost structure in key markets. In the future, the focus will
likely be on consolidating its strong regional presence across a global service
offering. Following are key aspects of our investment case.
- - Our Private Market Value estimate is $35 per share. Our abbreviated
model suggests CWP's other operations can be purchased below $7 per
share at current prices.
PRIVATE MARKET VALUE SUMMARY
<TABLE>
<CAPTION>
(in millions of US$) Price # ADSs Owned #/ CWP Share Per Share
----- ------------ ------------ ---------
<S> <C> <C> <C> <C>
Hong Kong Telecom - 53.7% 19 1/2 628 0.8189 $16
Cable & Wireless Comm. - 52.6% 21 3/4 140 0.1822 4
Other 16
Less: Net Debt, ex HKT&CWZ (1)
---
Total CWP Market Capitalization $35
</TABLE>
- - Cable & Wireless is an attractive acquisition target for global
telecommunications companies seeking a hub in the United Kingdom and
Asia. These regions are a gap in the footprint of most of the major
global alliances. The urgency of cross border mergers should
increase as liberalization accelerates global industry change.
- - Cash generation has strengthened and is available for share
repurchase or investment.
<TABLE>
<CAPTION>
(in millions of US$) 1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Net Cash from ops after capex ($105) $13.4 $590
</TABLE>
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- - A preferential position has been secured in China through its
strengthened relationship with the Chinese Government. China could
grow to be the largest telecom market. CWP should benefit through
direct investment and incremental traffic between China and its
subsidiaries as the market develops.
CABLE & WIRELESS: A TRULY GLOBAL OPERATOR
Cable & Wireless' dominant position in Hong Kong, its meaningful position in
the United Kingdom, and to a lesser degree its controlled interests in more
than 55 countries, place it on the radar screens of the largest providers of
global telecommunications services as a potential alliance partner or
acquisition target. The three most visible global alliances, Concert (British
Telecom/MCI), Global One (Deutsche Telekom, France Telecom and Sprint) and
WorldPartners (AT&T and partners), all lack a meaningful presence in Asia.
Global One and WorldPartners lack presence in the United Kingdom. Filling in
these gaps is a necessary component of strategies to provide seamless service
to large multinational corporations and guaranteeing favorable long term cost
structures. Various still uncommitted telecommunications companies, including
the Regional Bells in the United States and ex-telecom monopolies outside the
United States, may also find Cable & Wireless an attractive way to accelerate
their scale of entry into the global telecommunications market. We believe the
current MCI bidding war foreshadows a growing urgency to partner as the pool of
potential candidates is absorbed. This trend supports higher realized
valuations in future merger and acquisition transactions.
CEO RICHARD BROWN HAS IMPROVED CWP'S STRATEGIC IMPORTANCE
Since joining in June 1996, CEO Richard Brown has leveraged his experience as
an executive of Regional Bell Operating Company (RBOC) Ameritech and as CEO of
H&R Block, the parent of CompuServe, to increase the company's dominance in key
strategic regions. The following summarizes key deals.
- - In Europe, Cable & Wireless Communications was formed through the
four way merger of subsidiaries Mercury Communications and Bell
CableMedia with cable/telephony companies Nynex CableComms and
Videotron creating a formidable competitor to British Telecom. It
exited a Germany-based joint venture created to compete with
ex-telecom monopoly Deutsche Telekom due to constraints on its
management influence.
- - In China, CWP has entered into an agreement with the Chinese
government to grant ownership in Hong Kong Telecom in exchange for
the right to participate in mainland China telecommunications
investments. The original agreement included the sale of 5.5% of
Hong Kong Telecom to the Chinese government for approximately US$1.2
billion, with additional transfers in the future leading to equal
ownership with CWP.
- - In Other Asia, CWP raised its stake in Optus (the main competitor to
ex-Australian telecommunications monopolist Telstra) to 49% with an
option to acquire an additional 6% by buying out Bell South.
CABLE & WIRELESS: A GATEWAY TO CHINA
The China telecommunications development project is the jewel of international
"greenfield" projects. Shared ownership of Hong Kong Telecom is an attractive
price for participation in China which has more than 1.2 billion inhabitants
and fewer than 100 million telephone lines. The telecommunications market
should explode as infrastructure is constructed and improved. If only 8% of
the population receives a phone line the market should grow revenues by US$60
billion and EBITDA by US$30 billion (assuming US$50 revenue per subscriber and
50% margins).
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PRIVATE MARKET VALUE OF $35 TODAY
The table below details selected CWP assets and our valuation estimates. We
have marked subsidiary ownership interests to public market value whenever
possible. Otherwise, we have based our valuation estimate on merger and
acquisition valuation data for similar companies. Our model does not provide
for merger premiums, which we believe exceeds 20% of PMV, based on recent
transactions. Nevertheless, it provides a conservative valuation presentation.
Cable & Wireless plc
Estimated 1998E Private Market Value
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
VALUE/
In millions US$ Except Per Share Data Asia CALA(d) Europe USA CWP CWP SHARE
- ------------------------------------------------------------------------------------------------------------------------------------
INCUMBENT TELCO SYSTEMS # SHARES PRICE RATIO/CWP
-------- ----- ---------
<S> <C> <C> <C> <C> <C>
Cable & Wireless Communications - 52.6% 139.6 21 1/2 0.1822 3,001 3,001 $3.92
Hong Kong Telecom-53.7% 627.5 19 1/2 0.8189 12,237 12,237 15.97
Telecom of Jamaica - 79.0% 3,862.0 1/9 111.0464 425 425 0.55
CTM (Macau) - 51.0% 170 170 0.22
Panama Telephone (At Cost) - 49.0% 0 652 0 0 652 0.85
- --- - - --- -----
Total 12,407 1,077 3,001 0 16,485 21.51
NEW COMPETITIVE ENTRANT SYSTEMS
CWE - 100%(g) 306 306 $0.40
Cable & Wireless, Inc. (USA) - 100.0% 1,440 1,440 1.88
Intl. Dig. Comm. Inc. (Japan) - 17.6% 5 5 0.01
Optus (Australia) - 49.0% (f) 1,652 1,652 2.16
PLD Telekom Inc. 10.1 7 4/9 0.0132 75 0 0 0 75 0.10
-- - - - -- ----
Total 1,732 0 306 1,440 3,478 4.54
CELLULAR SERVICE PROVIDERS # POPS (b) $ Per POP
--------- ---------
OCCEL (Colombia) - 22.0% 1.8 50 88 88 $0.11
Mobile One (Singapore) 0.9 100 90 90 0.12
One 2 One (UK) - 50.0% 30.0 100 3,000 3,000 3.92
Other(c) 76.1 50 3,805 0 0 0 3,805 4.97
----- - - - ----- ----
Total 3,983 0 3,000 0 6,983 9.11
OTHER # Shares FMV
-------- ---
Asia Satellite Telecommunications Co. 8.8 22.75 200 200 $0.26
Cable & Wireless Business Networks 100 100 0.13
Cable & Wireless Marine (At BV) 115 115 0.15
Fiber Projects (At Cost) 70 95 0 0 165 0.22
-- -- - - --- ----
Total 270 95 215 0 380 0.76
Total Estimated Asset Value 18,392 1,172 6,523 1,440 27,527 $35.92
Less: Debt -670 -2,976 18 -3,628 -4.73
Add: Cash 1,857 293 801 2,951 3.85
TOTAL PRIVATE MARKET VALUE 19,580 1,172 3,839 2,259 26,850 $35.04
Total Shares Outstanding, f.d. (e) 766.3 766.3 766.3 766.3 766.3
PMV PER SHARE $25.55 $1.53 $5.01 $2.95 $35.04 $35.04
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental Valuation Data C&W USA Optus CTM Macau
1997E Revenue*/EBITDA**/Lines*** 1,200* 421** 167,000 ***
Multiple 1.2 8.0 $2,000
Estimated Asset Value 1,440 3,371 334
Ownership 100.00% 49.00% 51.00%
ESTIMATED ASSET VALUE 1,440 1,652 170
</TABLE>
Notes:
(a) Carribean and Latin America.
(b) Equity adjusted POPS.
(c) UK GDP adjusted equity POPS.
(d) CWP provides some or all the domestic, international, fixed line and mobile
services in Bermuda and 14 countries.
(e) Expressed as ADS equivalents.
(f) We assume the Bell South transaction valuation closed 7/1/97 is appropriate
(CWP has option for ownership up to 55.0%).
(g) We assume the VEBA transaction valuation is appropriate (CWE operates in
France, Belgium, Switzerland, Spain, Italy, Ireland, and the Netherlands).
(h) Balance sheet allocation estimated using the actual balance sheet of HKT
and CWZ at March 31, 1997.
Source: Company documents and Gabelli & Company, Inc. estimates
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CABLE & WIRELESS CAPITALIZATION
The table below provides the capitalization and selected financial information
for CWP. Our analysis dissects CWP into its key components, Hong Kong Telecom,
Cable & Wireless Communications, and remaining assets in order to improve the
visibility of potential pricing discrepancies. We are fortunate to have public
market references for HKT and CWZ, the company's principal subsidiaries. For
purposes of our illustration, we have confined our focus on the capitalization
and EBITDA (earnings before interest, taxes, depreciation and amortization) of
the company.
CABLE & WIRELESS COMMUNICATIONS PLC
Breakdown Among the Companies
<TABLE>
<CAPTION>
CAPITALIZATION HKT CWZ CWP Trio
- -------------- --- --- --- ----
(net of HKT,CWZ) (consolidated CWP)
<S> <C> <C> <C> <C>
Fiscal Year 3/31/97 3/31/97 3/31/97 3/31/97
Balance Sheet As Of: 3/31/97 3/31/97 3/31/97 3/31/97
Foreign Exchange Rate (HK$/US$;US$/UK) 7.8 1.672 1.672 1.672
SHARES OUTSTANDING
Supervoting 0.0 0.0 0.0(a) 0.0(a)
Common 11,693.4 1,500.0 2,197.6 2,197.6
-------- ------- ------- -------
Total Shares Outstanding 11,693.4 1,500.0 2,197.6 2,197.6
+Options/Warrants 0.0 0.0 41.1 2.163218 41.1 2.163218
+ 7% Cv. Unsecured - 2008 0.0 0.0 60.2 (b) 60.2 (b)
--- --- ----- -----
Total Shares Outstanding, f.d. 11,693.4 1,500.0 2,298.8 2,298.8
/ ADR Ratio 10 5 3 3
-------- ------- --------- -------
Total ADR Equivalents Outstanding, f.d. 1,169.3 300.0 766.3 766.3
x Price $18.63 $20.38 $25.19 $25.19
------ ------ ------ ------
MARKET VALUE 21,779 6,113 19,301 19,301
+ Debt 670 2,976 -18 3,628
- - Cash -1,857(c) -293 -801 -2,951(c)
------ ---- ---- ------
Net Debt (Cash) -1,187 2,684 -819 677(d)
TOTAL CAPITALIZATION 20,592 8,796 18,482 19,978
Add: Minority Interest @ Market Value NA NA NA 13,109
Less: Hong Kong Telecom At MV NA NA -11,717 NA
Less: Cable and Wireless Comm. At MV NA NA -2,844 NA
------ ------ ------ -------
TOTAL CAPITALIZATION 20,592 8,796 3,920 33,087
Revenue - 1997 4,177 3,404 4,127 11,707
Multiple - 1997 4.9 2.6 1.0 2.8
EBITDA - 1997 1,845 968 845 3,658
EBITDA Multiple - 1997 11.2 9.1 4.6 9.0
</TABLE>
Notes:
(a) Is held by HM Government and carries no right to particpate in the capital
(beyond 1 Pound) or earnings of the company.
(b) Has a face value of UK124 million and is convertible at the option of the
holder into ordinary shares on August 31 each year through 2008, on the basis
of one share for every 206p of nominal loan stock.
(c) Approximately UK34 million (US$20 million) is held in countries subject to
exchange regulations which may delay repatriation.
(d) Excludes Hong Kong Telecom and Cable & Wireless Balance Sheet.
Source: Company documents and Gabelli & Company, Inc. estimates
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Our analysis highlights an under-valuation of CWP by the market. An evaluation
of the parent company capitalization (CWP on far right column of our model)
indicates a total capitalization of 9.0 times EBITDA and 2.8 times revenues and
provides no compelling reason for investor excitement. To highlight existing
pricing discrepancies and under-valuation, we remove the contribution of Hong
Kong Telecom and Cable Wireless Communications to the total capitalization and
financial results from the remaining CWP operations. This analysis reveals a
very reasonable valuation of 4.6 times EBITDA and 1.0 times revenues for the
remaining assets.
OWNERSHIP ANALYSIS
For informational purposes, we have provided the ownership structure of Cable &
Wireless plc and its largest subsidiary Hong Kong Telecom. We highlight the
Chinese states, with a 17% interest in Hong Kong Telecom, which gives them a
vested interest in promoting a favorable telecom environment for the company.
Cable & Wireless plc Ownership Structure
(in millions of ADR Equivalents)
<TABLE>
<CAPTION>
# Shares % Class
-------- -------
<S> <C> <C>
VEBA 76.915 10.50%
Directors and Company Secretary 0.066 0.01%
Public Float In The Form Of ADRs 23.977 3.27%
Public Float In The Form
of Ordinary Shares 631.563 86.22%
------- ------
Total Shares Outstanding (a) 732.520 100.00%
</TABLE>
Notes: (a) Expressed before dilutive effects of options and convertible
securities. Source: Company documents and Gabelli & Company, Inc. estimates.
Hong Kong Telecom Ownership Structure
(in millions of ADR Equivalents)
<TABLE>
<CAPTION>
# Shares % Class
-------- -------
<S> <C> <C>
Cable & Wireless plc 627.529 10.50%
China State
- -----------
China Everbright Holdings 89.982 7.70% @HK$12.60
China Telecom 58.430 5.00% @HK$14.25
Other 50.250 4.30%
------
Total Chinese State 198.662 16.99%
Public Float 343.149 29.35%
------- ------
Total Shares Outstanding (In ADR Equiv.) 1,169.340 100.00%
</TABLE>
Source: Company documents and Gabelli & Company, Inc. estimates
CONCLUSION
We believe the company is attractive to a number of global telecommunications
companies, primarily those seeking to gain a foothold in key regions including
the United Kingdom and Asia. Cable & Wireless Communications and Hong Kong
Telecom arguably provide the most strategic entry vehicle for each of those
markets. Under the management of new Chief Executive Officer Dick Brown, we
are reasonably comfortable that CWP will continue to improve its strategic
position as a global telecommunications provider.
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OUR APPROACH
Our approach is multifaceted. We purchase companies that are
attractively valued relative to what we estimate a buyer would be willing to pay
for the entire company in a private transaction. When the gap between a
company's private market value (PMV) and public market value widens, our
risk/reward parameters improve. To maximize returns, our decision process
requires the expectation of a catalyst that will promote a reduction in this
gap. However, we will not invest in just any "cheap" company. For most of our
holdings, our selection is based on "bottom up" fundamental analysis, which
requires strong cash flow and earnings power, positive industry dynamics and,
certainly not least, good management with a track record of creating value for
their shareholders.
GLOBAL ALLOCATION
The chart to the right presents the Fund's holdings by geographic region
as of September 30, 1997. The geographic allocation will change based on
current global market conditions. Countries and/or regions represented in the
chart and below may or may not be included in the Fund's future portfolio.
HOLDINGS BY GEOGRAPHIC REGION - 9/30/97
<TABLE>
<S> <C>
United States 49.8%
Europe 18.6%
Asia/Pacific Rim 9.8%
Canada 9.3%
South America 9.0%
Other 3.5%
</TABLE>
PORTFOLIO STRUCTURE
We remain "bottom up" focused, with roughly half the Fund's investment
in the U.S. Internationally, the trend continues to be the liberalization and
privatization of the telecommunications sector. The result is an expanding
universe of publicly traded telecom companies poised for growth. Deutsche
Telekom, the largest telecom company in Europe and the third largest in the
world, successfully completed its initial public offering in November 1996.
Many other major telecom companies are expected to "go public" in the years
ahead.
Nearly 20% of the Fund is invested in Europe, much of that in the U.K.
Key holdings are companies with a strong global presence and attractive
valuations. Included are Cable & Wireless, the U.K.'s second largest telecom
group, and Vodafone, the largest U.K. cellular service provider with attractive
wireless investments on a global basis. Telefonica de Espana is another key
investment in light of its strong telecom franchise and significant discount to
its underlying asset value.
Competition, consolidation and convergence are occurring globally as
companies seek economies of scale. Simply put, "bigger is better."
Telecommunications stocks are selling at large discounts to their estimated
private market values. Moreover, their stock price performances have not kept
pace with the
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<PAGE> 8
growth in values. Major forces -- strong demand, open markets, technology,
consolidation -- should drive telecom stock prices toward their private market
values, thereby enhancing shareholder value.
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.
AirTouch Communications Inc. (ATI - $35.4375 - NYSE) is one of the premier
providers of global wireless communications. Operating in attractive cellular
markets in the U.S. and overseas (including Germany, Japan, Portugal, Sweden,
Belgium, Italy, Spain and South Korea), the company is well-positioned to
participate in the worldwide expansion of wireless communications. Roughly
half of the company's current 8.5 million worldwide cellular customers are
located in the U.S. Annual subscriber growth is estimated at 30% to 40%.
Associated Group Inc. (AGRP'A - $70.50 - NASDAQ, AGRP'B - $69.50 - NASDAQ), one
of the pioneer investors in the cellular industry, owns a diversified portfolio
of public and private communications companies. The jewel of AGRP's existing
wireless portfolio is Teligent, a provider of broadband wireless services.
Teligent will roll out its offering to compete with existing telephone service
providers in 74 U.S. markets over the next five years. This venture is
operated by high profile managers including Alex J. Mandle - formerly COO of
AT&T, Kirby G. Pickle Jr. - a former executive of MFS Communications and
Lawrence E. Harris - the leader of MCI's regulatory arsenal in the early 1980's
during their battle with AT&T. Our valuation estimate for AGRP is $37 per
share. This consists of $17 attributable to marketable securities, primarily
tracking stock of Tele-Communications Inc., $13 per share from Teligent and $7
of other wireless investments in the United States and Mexico (net of debt).
Upside in the stock price should result from a favorable acceptance by the
market of a Teligent Initial Public Offering (IPO) planned for the fourth
quarter of 1998.
BC Telecom Inc. (BCT - $25.83 - TSE), formerly British Columbia Telephone Co.,
is the second largest telecommunications services company in Canada. A
subsidiary of GTE owns 52% of the company. We estimate the private market
value of BCT to be $50 per share. Its basic telephone operations provide
service to more than two million telephone lines and are growing at twice the
Canadian industry average. BCT's crown jewel is a rapidly growing cellular
phone company which currently serves 463,000 subscribers. We expect BCT to
take advantage of the deregulatory trend in Canada by entering new businesses
in which they are now allowed to participate.
Compania de Telecomunicaciones de Chile SA (CTC - $32.375 - NYSE) is a full
service telecommunications provider. It serves 1.4 million access lines in a
country with 13.2 million inhabitants (a penetration rate of only 11%). The
company's growth will continue to be driven by an aggressive line build out
plan. Approximately 400,000 telephone lines are to be installed in 1997.
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<PAGE> 9
Telecom Italia SpA (TELI.MA - $20.04 - Milan Stock Exchange), formerly SIP
(Societa Italiana per L'Esercizio delle Telecomunicazioni pa), completed the
first phase of the restructuring process in the Italian telecommunications
sector. The company now provides basic local telephone service to 25 million
access lines, domestic and international long distance service. Its cellular
service to more than four million subscribers was spun off to shareholders a
year ago. Telecom Italia is currently undervalued, selling at less than three
times EBITDA.
Telecomunicacoes Brasileiras SA (Telebras) (TBR - $128.75 - NYSE) is the
Brazilian, government-controlled, monopoly telecommunications holding company
consisting of 28 subsidiaries serving more than 14.2 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. The stock is attractively priced at less than five times our
estimate of 1997 cash flow. Future opportunities include the prospects of
privatization, strong line growth and improvements in efficiency. In October,
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 - $94.125 - NYSE) is a diversified telecommunications
service provider offering services to more than 15 million lines. The company
also services a fast growing cellular subscriber base which now exceeds two
million subscribers. We consider TEF an ideal 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, Colombia, Puerto Rico, 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 British Telecom and MCI's Concert plc,
which is gaining momentum in the race to become the dominant provider of one
stop shopping for full-service, global telecommunications products.
Telephone and Data Systems Inc (TDS - $45.00 - ASE) is a domestic provider of
local telephone service to about 493,000 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). Consolidated
operating cash flow rose 25% in 1996, driven mainly by internal growth in
cellular telephone. Cellular telephone subscribers grew by almost 55%, to over
one million at year end 1996. We expect strong growth at TDS to result in a
private market value of $160 per share by 2000. The company has been active in
the PCS auctions and was the high bidder in eight markets with a combined
population of 27 million. TDS's investments in U.S. Cellular, American
Portable Telephone and American Paging, at their current market prices, are
worth $52 per TDS share.
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<PAGE> 10
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.
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 .30% of average net assets, making it one of the most attractive
U.S. Treasury-only money market funds. With dividends that are exempt from
state and local income taxes in all states, the Fund is an excellent vehicle in
which to store idle cash. An investment in The Gabelli U.S. Treasury Money
Market Fund is neither insured nor guaranteed by the U.S. Government. There
can be no assurance that the Fund will maintain a stable $1 per share net asset
value. Call us at 1-800-GABELLI (1-800-422-3554) for a prospectus which gives
a more complete description of the Fund, including management fees and
expenses. Read the prospectus carefully before you invest or send money.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, IRAs, 401(k)s, quarterly reports, closing prices and
other current news. You can send us e-mail at [email protected].
IN CONCLUSION
Little has changed in the favorable economic backdrop for stocks.
That does not necessarily mean there are not potential problems that could
upset the market apple cart. Barring any unexpected economic dilemmas, stocks
should continue to deliver respectable returns. More important, in our view,
the market is broadening and investors once again appear to be focusing on
fundamental value. Already, strong deal activity is gaining momentum. The
capital gains tax cut should encourage smaller niche companies' "urge to merge"
in the year ahead.
We close ever mindful of the potholes that will invariably challenge
equities investors, but remain confident the Fund's portfolio is
well-positioned to endure the long investment journey to your financial
success.
10
<PAGE> 11
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.
As always, we thank you for your confidence in our investment
abilities and will strive to preserve the assets you have entrusted to us.
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
/s/ IVAN ARTEAGA
Ivan Arteaga, CFA, CPA
Associate Portfolio Manager
October 25, 1997
TOP TEN HOLDINGS
SEPTEMBER 30, 1997
<TABLE>
<S> <C>
Telecom Italia SpA AirTouch Communications Inc.
Telephone & Data Systems Inc. BCE Mobile Communications
Cable & Wireless plc BC Telecom Inc.
Telefonica de Espana Associated Group Inc.
Telecomunicacoes Brasileiras SA (Telebras) Compania de Telecomunicaciones
de Chile SA
</TABLE>
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.
11
<PAGE> 12
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS -- 91.17%
ALTERNATIVE TELECOMMUNICATION SERVICE
PROVIDERS -- 1.31%
7,000 American Communications Services
Inc.*............................... $ 85,750
7,000 Brooks Fiber Properties Inc.*........ 326,813
20,000 GST Telecommunications Inc.*......... 277,500
20,000 ICG Communications Inc.*............. 490,000
2,000 Intermedia Communications Inc.*...... 93,875
5,000 McLeodUSA Inc., Cl. A*............... 197,188
400 Teleport Communications Group Inc.,
Cl. A*.............................. 17,950
------------
1,489,076
------------
BROADCASTING -- 0.07%
400 Pathe SA............................. 81,055
------------
CABLE -- 11.57%
50,000 Adelphia Communications Corp., Cl.
A*.................................. 606,250
32,000 Cablevision Systems Corp., Cl. A*.... 2,008,000
70,000 Century Communications Corp., Cl.
A*.................................. 533,750
82,000 Comcast Corp., Cl. A*................ 2,101,250
42,000 Comcast U.K. Cable Partners Ltd.*.... 430,500
10,000 General Cable plc, ADR*.............. 92,500
35,000 NTL Inc.*............................ 923,125
20,000 Rogers Communications Inc., Cl. B*... 120,000
35,349 TCI Ventures Group*.................. 729,075
44,651 Tele-Communications Inc., Cl. A*..... 915,343
58,000 Tele-Communications Inc./Liberty
Media Group, Cl. A*................. 1,736,375
30,000 Tele-Communications International
Inc., Cl. A*........................ 491,250
6,000 Telewest Communications plc, ADR*.... 81,000
88,000 United International Holdings Inc.,
Cl. A*.............................. 1,078,000
60,000 US WEST Media Group*................. 1,338,750
------------
13,185,168
------------
COMMUNICATIONS EQUIPMENT -- 2.95%
60,000 Champion Technology Holdings, ADR.... 75,000
3,333 CommScope Inc.*...................... 45,204
4,400 Ericsson (L.M.) Telephone Co., ADR... 210,925
2,500 General Semiconductor Inc.*.......... 32,188
4,000 Lucent Technologies Inc.............. 325,500
2,500 Motorola Inc......................... 179,688
5,000 NextLevel Systems Inc.*.............. 83,750
20,000 Northern Telecom Ltd................. 2,078,749
10,000 Scientific - Atlanta Inc............. 226,250
500 Siemens AG, ADR...................... 33,787
100,000 Time Engineering Berhad.............. 70,570
------------
3,361,611
------------
ENERGY -- 0.15%
3,000 Veba AG.............................. 175,454
------------
ENTERTAINMENT -- 1.02%
23,462 Ascent Entertainment Group Inc.*..... 269,813
6,000 Metromedia International Group
Inc.*............................... 72,750
<CAPTION>
MARKET
SHARES VALUE
- ---------- ------------
<C> <S> <C>
14,000 Time Warner Inc...................... $ 758,625
2,000 Viacom Inc., Cl. A*.................. 62,875
------------
1,164,063
------------
LONG DISTANCE TELEPHONE COMPANIES -- 6.82%
25,000 AT&T Corp............................ 1,107,814
25,000 Call-Net Enterprises Inc.*........... 495,112
25,000 Cam-Net Communications Network
Inc.*............................... 1,250
165 DDI Corp............................. 830,309
4,000 Esprit Telecom Group plc*............ 23,750
5,000 Fonorola Inc......................... 131,245
95,000 General Communication Inc., Cl. A*... 748,125
6,500 Kokusai Denshin...................... 358,743
5,000 LCI International Inc.*.............. 133,125
6,000 MCI Communications Corp.............. 176,250
8,000 MIDCOM Communications Inc.*.......... 55,000
66,000 P.D.L. Holdings Ltd.*................ 610,500
52,000 Philippine Long Distance Telephone
Co.*................................ 1,410,500
20,000 Sprint Corp.......................... 1,000,000
4,000 Teleglobe Inc........................ 143,085
2,000 Telegroup Inc.*...................... 21,000
15,000 WorldCom Inc.*....................... 530,625
------------
7,776,433
------------
PUBLISHING -- 0.35%
5,000 Media General Inc., Cl. A............ 198,125
8,000 News Corporation Ltd., ADR........... 163,500
100,000 Seat SpA*............................ 37,511
------------
399,136
------------
REGIONAL/LOCAL TELEPHONE SERVICES -- 17.56%
44,000 Aliant Communications Inc............ 1,067,000
20,000 ALLTEL Corp.......................... 690,000
22,000 Ameritech Corp....................... 1,463,000
38,000 Atlantic Tele-Network Inc.*.......... 494,000
5,304 Bell Atlantic Corp................... 426,641
27,000 BellSouth Corp....................... 1,248,750
9,000 Bruncor Inc.......................... 234,613
60,000 C-TEC Corp., Cl. B*.................. 2,951,249
28,000 Century Telephone Enterprises Inc.... 1,232,000
2,000 Cincinnati Bell Inc.*................ 56,875
10,000 First Pacific Co. Ltd., Sponsored
ADR*................................ 50,074
35,000 Frontier Corp........................ 805,000
35,000 GTE Corp............................. 1,588,125
15,000 Island Telephone Company Ltd......... 358,436
19,000 Maritime Telegraph and Telephone
Company Ltd......................... 407,241
12,000 NewTel Enterprises Ltd............... 239,392
3,000 Peoples Telephone Company Inc.*...... 9,188
10,000 Quebec-Telephone..................... 195,511
8,000 SBC Communications Inc............... 491,000
40,000 Southern New England
Telecommunications Corp............. 1,637,499
90,000 Telephone & Data Systems Inc......... 4,049,999
</TABLE>
12
<PAGE> 13
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ---------- ------------
COMMON STOCKS (CONTINUED)
REGIONAL/LOCAL TELEPHONE SERVICES (CONTINUED)
<C> <S> <C>
10,000 Telus Corp........................... $ 209,631
3,000 US WEST Communications Group......... 115,500
------------
20,020,724
------------
SATELLITE -- 3.29%
2,000 American Mobile Satellite Corp.*..... 20,500
100 Asia Satellite Telecommunications
Holdings Ltd........................ 2,863
1,000 British Sky Broadcasting Group,
ADR................................. 45,438
48,000 COMSAT Corp.......................... 1,143,000
8,000 Echostar Communications Corp., Cl.
A*.................................. 194,000
5,000 General Motors Corp., Cl. H.......... 331,562
8,000 Globalstar Telecommunications*....... 420,000
24,000 Iridium World Communications Ltd.*... 990,000
15,000 Loral Space & Communications Ltd.*... 309,375
2,000 PT Indonesia Satellite, ADR.......... 52,500
30,000 TCI Satellite Entertainment Inc., Cl.
A*.................................. 226,875
2,000 U.S. Satellite Broadcasting Co.*..... 17,250
------------
3,753,363
------------
TELECOMMUNICATIONS -- 0.20%
12,500 Great Nordic Store................... 223,547
------------
TELEPHONE NETWORKS -- 29.86%
100,000 BC Telecom Inc....................... 2,585,083
77,000 BCE Inc.*............................ 2,300,375
3,000 BHI Corp............................. 61,500
1,000 British Telecommunications plc,
ADR................................. 66,625
155,800 Cable & Wireless plc, ADR*........... 3,803,099
65,000 Compania de Telecomunicaciones de
Chile SA, ADR....................... 2,104,375
500,000 CPT Telefonica del Peru, Cl. B....... 1,182,024
1,000 CPT Telefonica del Peru, Cl. B,
ADR................................. 23,625
9,000 Deutsche Telekom AG.................. 171,563
3,687 Hellenic Telecommunications
Organization SA (OTE) (a)........... 92,576
15,000 Hong Kong Telecommunications Ltd.,
ADR................................. 335,625
2,000 Hungarian Telephone & Cable Corp.*... 25,750
40 Japan Telecom Co. Ltd................ 558,024
15,000 Koninklijke PTT Nederland NV, ADR.... 585,938
167 Nippon Telegraph & Telephone Corp.... 1,538,468
10,000 Nippon Telegraph & Telephone Corp.,
ADR................................. 460,000
800 Pakistan Telecommunications, GDR
(a)*................................ 76,400
12,000 Portugal Telecom SA, ADR............. 521,250
8,000 PT Telekomunikasi Indonesia.......... 179,000
20,000 Singapore Telecommunications Ltd..... 33,878
8,000 Tele Danmark A/S, ADR................ 213,500
36,000 Telecom Argentina Stet - France
Telecom SA, ADR*.................... 1,095,750
301,086 Telecom Asia*........................ 249,726
28,000 Telecom Corporation of New Zealand
Ltd., ADR*.......................... 1,134,000
<CAPTION>
MARKET
SHARES VALUE
- ---------- ------------
<C> <S> <C>
194,444 Telecom Italia SpA................... $ 1,298,439
27,000 Telecom Italia SpA, ADR.............. 1,812,375
4,000,000 Telecommunications of Jamaica........ 428,000
24,000 Telecomunicacoes Brasileiras SA
(Telebras), Sponsored ADR........... 3,090,000
938,570 Telecomunicacoes de Sao Paulo SA
(Telesp)*........................... 246,632
41,000 Telefonica de Argentina SA, ADR...... 1,501,625
37,000 Telefonica de Espana, ADR............ 3,482,624
36,000 Telefonos De Mexico SA, Cl. L, ADR... 1,863,000
300,000 Telekom Malaysia Berhad*............. 910,632
8,075 Thai Telephone & Telecom, GDR (a)*... 9,981
------------
34,041,462
------------
WIRELESS COMMUNICATIONS -- 16.02%
5,000 360 degrees Communications Co.*...... 104,375
40,000 ABC Communications Holdings Ltd...... 15,508
115,000 Aerial Communications Inc.*.......... 1,027,813
70,000 AirTouch Communications Inc.*........ 2,480,624
60,000 American Paging Inc.*................ 123,750
14,200 Associated Group Inc., Cl. A*........ 1,001,100
16,000 Associated Group Inc., Cl. B*........ 1,112,000
14,000 BCE Mobile Communications Inc........ 485,083
500 Bouygues Group....................... 47,068
20,000 Cellular Communications International
Inc.*............................... 830,000
88,000 Centennial Cellular Corp., Cl. A*.... 1,507,000
2,000 CommNet Cellular Inc.*............... 70,125
1,000 CoreComm Inc.*....................... 16,500
30,000 CP Pokphand, Sponsored ADR........... 249,561
50,000 Europolitan Holdings AB*............. 1,386,871
40,000 Grupo Iusacell SA, Ser. D, ADR*...... 500,000
26,000 Himachal Futuristic (a).............. 29,669
24,000 Jasmine International (a)............ 20,072
2,500 Mannesmann AG........................ 1,191,826
5,300 Matrix Telecommunications Ltd........ 2,770
1,500 Metrocall Inc.*...................... 11,063
5,000 Mobile Telecommunications
Technologies Corp.*................. 80,938
8,000 NEXTEL Communications Inc., Cl. A*... 231,000
2,000 Omnipoint Corp.*..................... 43,750
5,000 Palmer Wireless Inc.*................ 87,500
8,000 Pittencrieff Communications Inc.*.... 46,000
15,000 Price Communications Corp.*.......... 130,312
27,000 PriCellular Corp.*................... 268,313
40,000 Rogers Cantel Mobile Communications
Inc., Cl. B*........................ 707,500
1,000 Rural Cellular Corp., Cl. A*......... 11,750
70,000 Securicor Group plc.................. 305,424
100,000 Technology Resources Industries...... 121,418
600,000 Telecom Italia Mobile SpA............ 2,386,551
2,000 Thyssen AG........................... 468,218
20,000 Total Access Communications plc...... 66,000
</TABLE>
13
<PAGE> 14
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
WIRELESS COMMUNICATIONS (CONTINUED)
3,000 United States Cellular Corp.*........ $ 110,625
1,500 Vanguard Cellular Systems Inc., Cl.
A*.................................. 23,625
1,000 Vimpel Communications*............... 41,750
17,000 Vodafone Group plc, ADR.............. 913,750
------------
18,257,202
------------
TOTAL COMMON STOCKS.................. 103,928,294
------------
CONVERTIBLE PREFERRED STOCKS -- 2.67%
CABLE -- 1.43%
19,000 Tele-Communications Inc. Cv. Pfd.,
Ser. E.............................. 1,633,999
------------
ENTERTAINMENT -- 0.05%
1,000 Metromedia International Group
Inc................................. 51,438
------------
LONG DISTANCE TELEPHONE COMPANIES -- 0.40%
12,000 Sprint Corp. 8.25% Cv. Pfd........... 451,500
------------
TELEPHONE NETWORKS -- 0.43%
9,500 Philippine Long Distance Telephone
Co. 7.00% Cv. Pfd., Ser. III........ 490,438
------------
WIRELESS COMMUNICATIONS -- 0.36%
3,000 AirTouch Communications Inc. 4.25%
Cv. Pfd., Cl. C..................... 169,312
5,000 AirTouch Communications Inc. 6.00%
Cv. Pfd., Cl. B..................... 162,813
3,000 Mobile Telecommunication Technologies
Corp. (a)........................... 80,250
------------
412,375
------------
TOTAL CONVERTIBLE PREFERRED STOCKS... 3,039,750
------------
PREFERRED STOCKS -- 0.58%
COMMUNICATIONS EQUIPMENT -- 0.16%
2,000 Nokia Corp.,Cl. A, ADR............... 187,625
------------
TELEPHONE NETWORKS -- 0.42%
3,355,677 Telecomunicacoes de Rio de Janeiro SA
(Telerj) Pfd........................ 462,324
40,900 Telecomunicacoes de Sao Paulo SA
(Telesp) Pfd........................ 12,501
------------
474,825
------------
TOTAL PREFERRED STOCKS............... 662,450
------------
RIGHTS -- 0.00%
WIRELESS COMMUNICATIONS -- 0.00%
2,650 Matrix Telecommunications Ltd........ 58
------------
TOTAL RIGHTS......................... 58
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS -- 0.99%
TELEPHONE NETWORKS -- 0.74%
$1,000,000 Telekom Malaysia Berhad Sub. Deb. Cv.
4.00%, 10/03/04 (a)................. $ 842,500
------------
WIRELESS COMMUNICATIONS -- 0.25%
250,000 Technology Resources Industries Sub.
Deb. Cv. 2.75%, 11/28/04 (a)........ 288,125
------------
TOTAL CONVERTIBLE CORPORATE BONDS.... 1,130,625
------------
U.S. GOVERNMENT OBLIGATIONS -- 4.28%
4,900,000 U.S. Treasury Bills, 4.83% to 5.05%,
due 10/16/97 to 11/28/97............ 4,880,889
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS.... 4,880,889
------------
TOTAL INVESTMENTS -- 99.69%
(Cost $82,500,417).................. 113,642,066
------------
OTHER ASSETS AND LIABILITIES
(NET) -- 0.31%...................... 350,584
------------
NET ASSETS -- 100.00% (8,014,396
shares outstanding)................. $113,992,650
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE.......... $14.22
======
FORWARD FOREIGN CURRENCY EXCHANGE
2,600,000(b) Sold Hong Kong Dollars at Foreign
Exchange Rate 7.8285 due 2/26/98.... ($336,004)
32,395(c) Sold Peruvian Sols at Foreign
Exchange Rate 2.6710 due 10/6/97.... (12,234)
-------
TOTAL FORWARD FOREIGN CURRENCY
EXCHANGE............................ ($348,238)
=========
</TABLE>
- ---------------
(a) -- Security exempt from registration under Rule 144A of
the Securities Act of 1933. These securities may be
resold in transactions exempt from registration,
normally to qualified institutional buyers. At
September 30, 1997, the Rule 144A securities amounted
to $1,439,573 or 1.26% of net assets.
(b) -- Principal amount denoted in Hong Kong Dollars.
(c) -- Principal amount denoted in Peruvian Sols.
* -- Non-income producing security
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
14
<PAGE> 15
GABELLI FAMILY OF FUNDS
GABELLI ASSET FUND
Invests in securities of companies selling below their intrinsic economic
value. The Fund's primary objective is long-term growth of capital.
(No-load) Portfolio Manager: Mario J. Gabelli, CFA
GABELLI GROWTH FUND
Invests primarily in large-cap stocks believed to have superior earnings growth
potential. The Fund's primary objective is long-term capital appreciation.
(No-load) Portfolio Manager: Howard F. Ward, CFA
GABELLI WESTWOOD EQUITY FUND
Invests primarily in the common stock of seasoned companies believed to have
proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation. (No-load)
Portfolio Manager: Susan M. Byrne
GABELLI SMALL CAP GROWTH FUND
Invests primarily in common stock of smaller companies (market capitalizations
less than $500 million) with rapid revenue and earnings growth potential. The
Fund's primary objective is long-term capital appreciation. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI WESTWOOD SMALLCAP EQUITY FUND
Invests primarily in smaller capitalization equity securities (market caps of
$1 billion or less). The Fund's primary objective is long-term capital
appreciation. (No-load) Portfolio Manager: Lynda Calkin, CFA
GABELLI EQUITY INCOME FUND
Invests primarily in equity securities with above market average yields. The
Fund pays quarterly dividends and seeks a high level of total return.
(No-load) Portfolio Manager: Mario J. Gabelli, CFA
GABELLI WESTWOOD BALANCED FUND
Invests in a diversified portfolio of stocks and bonds. The Fund's primary
objective is both capital appreciation and current income. (No-load)
Portfolio Managers: Susan M. Byrne & Patricia Fraze
GABELLI VALUE FUND
Invests in securities of companies selling below their intrinsic economic
value. The Fund's primary objective is long-term growth of capital. Max.
Sales charge: 5 1/2% Portfolio Manager: Mario J. Gabelli, CFA
GABELLI ABC FUND
Invests in securities with capital appreciation potential and above market
average yields. The Fund's primary objective is consistent returns in various
market conditions without excessive risk of capital loss. (No-load)
Portfolio Manager: Mario J. Gabelli, CFA
GABELLI U.S. TREASURY MONEY MARKET FUND
Invests exclusively in short-term U.S. Treasury securities. The Fund's primary
objective is to provide high current income consistent with the preservation of
principal and liquidity. An investment in the Fund is neither insured nor
guaranteed by the U.S. Government and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per share.
Portfolio Manager: Judith A. Raneri
THE TREASURER'S FUND
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market invests in U.S.
Treasury bills, notes and bonds. Tax Exempt Money Market invests in municipal
securities. Domestic Prime Money Market invests in prime quality, domestic
money market instruments. (No-load) Portfolio Manager: Judith A. Raneri
GLOBAL SERIES
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Invests in telecommunications companies throughout the world -
targeting undervalued companies with strong earnings and cash flow
dynamics. The Fund's primary objective is long-term capital
appreciation. (No-load) Team Manager: Mario J. Gabelli, CFA
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Invests principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic companies. The
Fund's primary objective is total return through a combination of
current income and capital appreciation. (No-load)
Portfolio Manager: Hart Woodson
GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
Invests globally in companies creating and/or distributing information
and entertainment products and services. The Fund will also invest in
companies participating in emerging technological advances in
interactive services and products. The Fund's primary objective is
long-term capital appreciation. (No-load)
Portfolio Manager: Marc J. Gabelli
GABELLI GOLD FUND
Invests in a global portfolio of equity securities of gold mining and related
companies. The Fund's objective is capital appreciation. Investment in gold
stocks is considered speculative and is affected by a variety of worldwide
economic, financial and political factors. (No-load)
Portfolio Manager: Caesar Bryan
GABELLI INTERNATIONAL GROWTH FUND
Invests in international equities securities with superior long-term capital
appreciation potential. The Fund offers investors global diversification.
(No-load) Portfolio Manager: Caesar Bryan
The five funds above invest in foreign securities which involves risks not
ordinarily associated with investments in domestic issues, including currency
fluctuation, economic and political risks. Distributed by Gabelli & Company,
Inc.
<PAGE> 16
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 Anthony R. Pustorino
Former Senior Vice President Certified Public Accountant
Dollar Dry Dock Savings Bank Professor, Pace University
Anthony J. Colavita Anthonie C. van Ekris
Attorney-at-Law Managing Director
Anthony J. Colavita, P.C. BALMAC International, Inc.
James P. Conn Salvatore J. Zizza
Managing Director and Chairman and Chief
Chief Investment Officer Executive Officer
Financial Security Assurance The Lehigh Group, Inc.
Holdings Ltd.
OFFICERS AND PORTFOLIO MANAGERS
Mario J. Gabelli, CFA Marc J. Gabelli
President and Chief Associate Portfolio Manager
Investment Officer
Bruce N. Alpert Ivan Arteaga, CFA, CPA
Vice President and Treasurer Associate Portfolio Manager
James E. McKee
Secretary
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom 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.
- --------------------------------------------------------------------------------
GRAPHIC
THE
GABELLI
GLOBAL
TELECOMMUNICATIONS
FUND
THIRD QUARTER REPORT
SEPTEMBER 30, 1997
