<PAGE> 1
GABELLI GLOBAL SERIES FUNDS, INC.
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
<TABLE>
<S> <C>
Mario J. Gabelli, CFA Karl Otto Pohl
Chairman and Chief Former President
Investment Officer Deutsche Bundesbank
Gabelli Asset Management 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.
</TABLE>
QUESTIONS?
Call 1-800-GABELLI
or your investment representative.
GABELLI GLOBAL SERIES
FUNDS, INC.
AAA CLASS
PROSPECTUS
MAY 1, 1999
- THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
- THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
- THE GABELLI GLOBAL OPPORTUNITY FUND
- THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
SHARES DESCRIBED IN THIS PROSPECTUS OR DETERMINED WHETHER THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE> 2
GABELLI GLOBAL SERIES FUNDS, INC. TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
RISK/RETURN SUMMARY AND FUND EXPENSES
Carefully review this important 3-7
section, which summarizes the
Funds' investments, risks, past
performance, and fees.
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
Review this section for 8-13
information on investment
strategies and their risks.
FUND MANAGEMENT
Review this section for details 14 The Investment Adviser
on the people and organizations 14 The Portfolio Managers
who oversee the Funds. 14 The Distributor
SHAREHOLDER INFORMATION
Review this section and the 15 Pricing of Fund Shares
accompanying Owner's Manual for 15 Purchasing, Selling and Exchanging Shares
details on how shares are 15 Distribution Arrangements
valued, how to purchase, sell 16 Dividends, Distributions and Taxes
and exchange shares, related 16 Other Shareholder Services
charges and payments of
dividends and distributions.
FINANCIAL HIGHLIGHTS
17-19
BACK COVER
Where to learn more about this Fund
</TABLE>
2
<PAGE> 3
RISK/RETURN SUMMARY AND FUND EXPENSES
<TABLE>
<S> <C>
RISK/RETURN SUMMARY OF THE: GLOBAL TELECOMMUNICATIONS FUND
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
GLOBAL OPPORTUNITY FUND
Investment Objectives The Funds primarily seek to provide investors with
appreciation of capital. Current income is a secondary
objective of the Funds.
Principal The Funds invest primarily in common stocks of foreign and
Investment Strategy domestic small cap, mid cap and large cap issuers. Each Fund
may invest without limitations in securities of foreign
issuers and each Fund will invest in securities of issuers
located in at least three countries. Each of the Global
Telecommunications Fund, the Global Interactive Couch
Potato(R) Fund and the Global Opportunity Fund will focus
its holdings on companies which the Adviser believes are
likely to have rapid growth in revenues and earnings and
potential for above-average capital appreciation or are
undervalued. The Global Telecommunications Fund will
concentrate on companies in the telecommunications industry
and the Global Interactive Couch Potato(R) Fund will
concentrate on companies in the communications,
entertainment and media and publishing industries.
</TABLE>
<TABLE>
<S> <C>
RISK/RETURN SUMMARY OF THE: GLOBAL CONVERTIBLE SECURITIES FUND
Investment Objective The Fund seeks to provide investors with a high level of
total return through a combination of current income and
appreciation of capital.
Principal The Fund invests primarily in "convertible securities,"
Investment Strategy i.e., securities (bonds, debentures, corporate notes,
preferred stocks and other similar securities) which are
convertible or exchangeable for common stock within a
particular time period at a specified price or formula, of
foreign and domestic companies. The Adviser believes that
certain characteristics of convertible securities make them
appropriate investments for a fund seeking a high level of
total return on its assets. These characteristics include
the potential for capital appreciation if the value of the
underlying common stock increases, the relatively high yield
received from preferred dividend or interest payments as
compared to common stock dividends and the decreased risk of
decline in value relative to common stock due to the fixed
income nature of convertible securities.
PRINCIPAL GLOBAL TELECOMMUNICATIONS FUND
INVESTMENT RISKS GLOBAL INTERACTIVE COUCH POTATO(R) FUND
GLOBAL OPPORTUNITY FUND
GLOBAL CONVERTIBLE SECURITIES FUND
Because the value of the Funds' investments will fluctuate
with market conditions, so will the value of your investment
in the Funds. You could lose money on your investment in the
Funds, or the Funds could underperform other investments.
Some of the Funds' holdings may underperform their other
holdings. The investment policies of the Funds may lead to a
higher portfolio turnover rate and correspondingly higher
expenses which could negatively affect the Funds'
performance. As the Funds are non-diversified, each Fund
will have the ability to invest a larger portion of its
assets in a single issuer than would be the case if it were
diversified. As a result, each Fund may experience greater
fluctuation in net asset value than funds which invest in a
broad range of issuers. In addition, the Global
Telecommunications Fund and the Global Interactive Couch
Potato Fund concentrate their investments in specific
industries which are subject to
</TABLE>
3
<PAGE> 4
RISK/RETURN SUMMARY AND FUND EXPENSES
- -
<TABLE>
<S> <C>
governmental regulation and a greater price volatility than
the overall market and sell products and services that may
be subject to rapid obsolescence resulting from changing
consumer tastes, intense competition and strong market
reactions to technological development. The Global
Convertible Securities Fund may invest in lower credit
quality securities which may involve major risk exposures
such as increased sensitivity to interest rate and economic
changes and limited liquidity.
Moreover, each Fund may invest a substantial portion of its
assets in foreign securities which involve risks relating to
political, social and economic developments abroad, as well
as risks resulting from the differences between the
regulations to which U.S. and foreign issuers and markets
are subject. In addition, the costs of buying, selling and
holding foreign securities may be greater than for U.S.
Securities and foreign securities often trade in currencies
other than the U.S. dollar and an increase in the value of
the U.S. dollar relative to a foreign currency may cause the
value of a Fund's investments in securities denominated in
that currency to decline.
GLOBAL TELECOMMUNICATIONS FUND
The telecommunications industry is subject to governmental
regulation, a greater price volatility than the overall
market and the products and services of telecommunications
companies may be subject to rapid obsolescence.
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
The communications, entertainment and media and publishing
industries are subject to governmental regulation, a greater
volatility than the overall market and their products and
services may be subject to rapid obsolescence and change in
taste.
In addition, many countries impose various types of
ownership restrictions on investments both in mass media
companies, such as broadcasters and cable operators, as well
as in common carrier companies, such as the providers of
local telephone service and cellular radio.
GLOBAL OPPORTUNITY FUND
The Global Opportunity Fund invests generally in a portfolio
of global equity securities. As such, there are no
additional principal risks associated with an investment in
the Fund other than those identified herein as applicable to
all of the Funds.
GLOBAL CONVERTIBLE SECURITIES FUND
The Global Convertible Securities Fund may invest without
limit in securities that are not considered investment
grade. These securities carry a higher risk of failure to
pay principal and interest when due and the market to sell
such securities may be limited. As such, there is a greater
risk of loss of investment.
WHO MAY Consider investing in the Funds if you:
WANT TO INVEST? [ ] ARE SEEKING A LONG-TERM GOAL SUCH AS RETIREMENT
[ ] ARE LOOKING TO ADD A GROWTH COMPONENT TO YOUR PORTFOLIO
[ ] ARE WILLING TO ACCEPT HIGHER RISKS OF INVESTING IN THE
STOCK MARKET IN EXCHANGE FOR LONG TERM RETURNS
[ ] ARE LOOKING TO DIVERSIFY YOUR INVESTMENTS OUTSIDE THE
UNITED STATES
The Funds will not be appropriate for anyone:
[ ] SEEKING MONTHLY INCOME
[ ] PURSUING A SHORT-TERM GOAL OR INVESTING EMERGENCY
RESERVES
[ ] SEEKING SAFETY OF PRINCIPAL
</TABLE>
4
<PAGE> 5
RISK/RETURN SUMMARY AND FUND EXPENSES
- -
These charts show the Funds' annual returns and provides some indication of
the risks of investing in the Funds by showing how their performance has
varied from year to year. The tables that follow compare the Funds'
performance over time to that of their relevant broad-based indices. Morgan
Stanley World Free Index, the Lipper Global Fund Average and the Lipper
Convertible Securities Fund Average represent unmanaged indices composed of
all developed markets in the world, global equity mutual funds and
convertible securities mutual funds, respectively, as tracked by Lipper Inc.
The Salomon Smith Barney Global Telecommunications Index is a widely
recognized, unmanaged index composed of global equity securities of companies
in the telecommunications industry; and the Warburg Dillon Read Global
Convertible Index is composed of global convertible securities. Of course,
past performance does not indicate how the Funds will perform in the future.
Both the charts below and the tables on the following page assume
reinvestment of dividends and distributions.
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31
GLOBAL TELECOMMUNICATIONS FUND
Best
quarter: 4(th) 1998 23.96 %
Worst
quarter: 3(rd) 1998 (10.73)%
Global Telecommunications GRAPH
<TABLE>
<CAPTION>
'94' -3.7
- ---- ----
<S> <C>
'95' 16.20
'96' 9.00
'97' 31.90
'98' 34.80
</TABLE>
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
Best
quarter: 4(th) 1998 21.36 %
Worst
quarter: 3(rd) 1998 (12.77)%
Global Interactive Couch Potato GRAPH
<TABLE>
<CAPTION>
'95' 17.9
- ---- ----
<S> <C>
'96' 12.50
'97' 41.70
'98' 28.90
</TABLE>
GLOBAL CONVERTIBLE SECURITIES FUND
Best
quarter: 4(th) 1998 12.23 %
Worst
quarter: 3(rd) 1998 (12.26)%
Global Convertible Securities GRAPH
<TABLE>
<CAPTION>
'95' 12.6
- ---- ----
<S> <C>
'96' 5.50
'97' 2.80
'98' 8.60
</TABLE>
THE GLOBAL OPPORTUNITY FUND
The Global Opportunity Fund has less than
one full calendar year of operations,
therefore total return information is not
meaningful.
5
<PAGE> 6
RISK/RETURN SUMMARY AND FUND EXPENSES
AVERAGE ANNUAL TOTAL RETURNS (for the periods ending December 31, 1998)
<TABLE>
<CAPTION>
SINCE INCEPTION
INCEPTION DATE PAST YEAR PAST 5 YEARS OF FUND
<S> <C> <C> <C> <C>
GLOBAL TELECOMMUNICATIONS FUND 11/1/93 34.8% 16.7% 16.8%
Salomon Smith Barney Global
Telecommunications Index 43.8% 17.7% 16.1%
Morgan Stanley World Free Index 22.0% 14.8% 14.3%
</TABLE>
<TABLE>
<CAPTION>
SINCE INCEPTION
INCEPTION DATE PAST YEAR OF FUND
<S> <C> <C> <C>
GLOBAL INTERACTIVE COUCH
POTATO(R) FUND 2/7/94 28.9% 20.4%
Morgan Stanley World Free Index 22.0% 13.6%
Lipper Global Fund Average 14.3% 11.2%
</TABLE>
<TABLE>
<CAPTION>
SINCE INCEPTION
INCEPTION DATE PAST YEAR OF FUND
<S> <C> <C> <C>
GLOBAL CONVERTIBLE SECURITIES FUND 2/3/94 8.6% 6.1%
Warburg Dillon Read
Global Convertible Index 20.6% 7.9%
Lipper Convertible Securities
Fund Average 4.5% 9.9%
</TABLE>
6
<PAGE> 7
RISK/RETURN SUMMARY AND FUND EXPENSES
- -
FUND EXPENSES
<TABLE>
<CAPTION>
INTERACTIVE
TELECOM- COUCH
MUNICATIONS POTATO(R) OPPORTUNITY CONVERTIBLE
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY
FROM YOUR INVESTMENT) None None None None
ANNUAL FUND OPERATING
EXPENSES (EXPENSES
THAT ARE DEDUCTED FROM
FUND ASSETS)
Management fees 1.00% 1.00% 1.00% 1.00%
Distribution (12b-1)
fees .25% .25% .25% .25%
Other expenses .30% .39% 1.75% 1.55%
Total annual Fund
operating expenses(1) 1.55% 1.64% 3.00% 2.80%
Fee waivers & expense
reimbursements(2) N/A N/A 2.00% N/A
Net expenses 1.55% 1.64% 1.00% 2.80%
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
GLOBAL
TELECOMMUNICATIONS FUND $158 $490 $845 $1,845
GLOBAL INTERACTIVE
COUCH POTATO(R) FUND 167 517 892 1,944
GLOBAL OPPORTUNITY FUND(3) 102 751 N/A N/A
GLOBAL CONVERTIBLE
SECURITIES FUND 283 868 1,479 3,128
</TABLE>
FEES AND EXPENSES
As an investor in the
Funds, you will pay the
following fees and
expenses when you buy and
hold shares. Annual Fund
operating expenses are
paid out of Fund assets,
and are reflected in the
share price.
EXPENSE EXAMPLE
Use the example shown here
to compare fees and
expenses with those of
other funds. It
illustrates the amount of
fees and expenses you
would pay, assuming the
following:
- $10,000 investment
- 5% annual return
- redemption at the end of
each period
- no changes in the Funds
operating expenses
Because this example is
hypothetical and for
comparison only, your
actual costs may be higher
or lower.
(1) Total annual Fund operating expenses have been restated to reflect
current fees, and may differ from information in the Fund's most recent
Annual Report.
(2) The Adviser is contractually obligated, for the duration of the Fund's
fiscal year, to waive its investment advisory fees and reimburse expenses
to the extent necessary to maintain total annual Fund operating expenses
at 1.00% for the Global Opportunity Fund.
(3) This example assumes that Total Annual Fund Operating Expenses will equal
1.00% until January 1, 2000 and will equal 3.00% thereafter.
7
<PAGE> 8
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
GENERAL
Each Fund invests primarily in common stocks (or, in the case of the Global
Convertible Securities Fund, in Securities convertible into common stock) of
companies which the Funds' adviser, Gabelli Funds, LLC (the "Adviser")
believes are likely to have rapid growth in revenues and earnings and the
potential for above average capital appreciation. The Adviser invests in
companies whose stocks are selling at a significant discount to their
"private market value." Private market value is the value the Adviser
believes informed investors would be willing to pay to acquire the entire
company. If investor attention is focused on the underlying asset value of a
company due to expected or actual developments or other catalysts, an
investment opportunity to realize this private market value may exist.
Undervaluation of a company's stock can result from a variety of factors,
such as a lack of investor recognition of
- the underlying value of a company's fixed assets,
- the value of a consumer or commercial franchise,
- changes in the economic or financial environment affecting the company,
- new, improved or unique products or services,
- new or rapidly expanding markets,
- technological developments or advancements affecting the company or its
products, or
- changes in governmental regulations, political climate or competitive
conditions.
The actual events that may lead to a significant increase in the value of a
company's securities include:
- a change in the company's management policies,
- an investor's purchase of a large portion of the company's stock,
- a merger or reorganization or recapitalization of the company,
- a sale of a division of the company,
- a tender offer (an offer to purchase investors' shares),
- the spin-off to shareholders of a subsidiary, division or other
substantial assets, or
- the retirement or death of a senior officer or substantial shareholder
of the company.
In selecting investments, the Adviser also considers the market price of the
issuer's securities, its balance sheet characteristics and the perceived
strength of its management.
GLOBAL TELECOMMUNICATIONS FUND
INVESTMENT OBJECTIVES AND POLICIES
The Global Telecommunications Fund's primary investment objective is capital
appreciation. Current income is a secondary objective of the Fund. The Fund's
investment objectives may not be changed without shareholder approval.
PRINCIPAL INVESTMENT STRATEGIES
Under normal market conditions, the Global Telecommunications Fund will
invest at least 65% of its total assets in common stocks of companies in the
telecommunications industry which the Adviser believes are likely to have
rapid growth in revenues and earnings and potential for above average capital
8
<PAGE> 9
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
- -
appreciation or are undervalued. In selecting investments, the Adviser also
considers the market price of the issuer's securities, its balance sheet
characteristics and the perceived strength of its management.
The telecommunications companies in which the Global Telecommunications Fund
may invest are engaged in the following products or services: regular
telephone service throughout the world, wireless communications services and
equipment, including cellular telephone, microwave and satellite
communications, paging, and other emerging wireless technologies; equipment
and services for both data and voice transmission, including computer
hardware and software; electronic components and communications equipment;
video conferencing; electronic mail; local and wide area networking, and
linkage of data and word processing systems; publishing and information
systems; video text and teletext; emerging technologies combining television,
telephone and computer systems; broadcasting, including television and radio
via VHF, UHF, satellite and microwave transmission and cable television.
SPECIFIC RISK FACTORS
The telecommunications industry is subject to governmental regulation and a
greater price volatility than the overall market and the products and
services of telecommunications companies may be subject to rapid obsolescence
resulting from changing consumer tastes, intense competition and strong
market reactions to technological developments throughout the industry.
Certain companies in the United States, for example, are subject to both
state and federal regulations affecting permitted rates of return and the
kinds of services that may be offered. Such companies are becoming subject to
increasing levels of competition. As a result stocks of these companies may
be subject to greater price volatility.
GLOBAL INTERACTIVE COUCH POTATO(R) FUND
INVESTMENT OBJECTIVES AND POLICIES
The Global Interactive Couch Potato(R) Fund primarily seeks to provide
investors with appreciation of capital. Current income is a secondary
objective.
PRINCIPAL INVESTMENT STRATEGIES
Under normal market conditions, the Global Interactive Couch Potato(R) Fund
will invest at least 65% of its total assets in common stocks of companies
involved with entertainment and media, publishing and communications. Such
companies participate in emerging technological advances in interactive
services and products (i.e., computer software) that are accessible to
individuals in their homes or offices through consumer electronics content
based devices such as telephones, televisions, radios and personal computers.
The Fund will invest in companies which the Adviser believes are likely to
have rapid growth in revenues and earnings and potential for above average
capital appreciation or are undervalued. In selecting investments, the
Adviser also considers the market price of the issuer's securities, its
balance sheet characteristics and the perceived strength of its management.
The entertainment, media and publishing companies in which the Global
Interactive Couch Potato(R) Fund may invest are engaged in providing the
following products or services: the creation, packaging, distribution, and
ownership of entertainment programming throughout the world including
pre-recorded music, feature length motion pictures, made for T.V. movies,
television series, documentaries, animation, game shows, sports programming
and news programs; live events such as professional sporting events or
9
<PAGE> 10
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
- -
concerts, theatrical exhibitions, television and radio broadcasting via VHF,
UHF, satellite and microwave transmission, cable television systems and
programming, broadcast and cable networks, wireless cable television and
other emerging distribution technologies, home video, interactive and
multimedia programming including home shopping and multiplayer games;
electronic commerce and internet services; publishing, including newspapers,
magazines and books, advertising agencies and niche advertising mediums such
as in-store or direct mail, emerging technologies combining television,
telephone and computer systems, computer hardware and software, and equipment
used in the creation and distribution of entertainment programming such as
that required in the provision of broadcast, cable or telecommunications
services.
The communications companies in which the Global Interactive Couch Potato(R)
Fund may invest are engaged in the development, manufacture or sale of
communications services or equipment throughout the world including the
following products or services: regular telephone service; wireless
communications services and equipment, including cellular telephone,
microwave and satellite communications, paging, and other emerging wireless
technologies; equipment and services for both data and voice transmission,
including computer hardware and software; electronic components and
communications equipment; video conferencing; electronic mail; local and wide
area networking, and linkage of data and word processing systems; publishing
and information systems; video text and teletext; emerging technologies
combining television, telephone and computer systems; broadcasting, including
television and radio via VHF, UHF, satellite and microwave transmission and
A cable television.
SPECIFIC RISK FACTORS
The communications, entertainment and media and publishing industries are
subject to governmental regulation and a greater price volatility than the
overall market, and the products and services of such companies may be
subject to rapid obsolescence resulting from changing consumer tastes,
intense competition and strong market reactions to technological developments
throughout the industry.
Many countries impose various types of ownership restrictions on investments
both in mass media companies, such as broadcasters and cable operators, as
well as in common carrier companies, such as the providers of local telephone
service and cellular radio.
For example, in the United States, the broadcast multiple ownership rules,
which apply to the radio and television industries, provide that investment
advisers are deemed to have an "attributable" interest whenever the adviser
has the right to determine how more than five percent of the issued and
outstanding voting stock of a broadcast company may be voted and limit the
number of such companies in which the Adviser, on behalf of itself and its
clients, may have an "attributable interest." These same broadcast rules
limit the holding of attributable interests in AM and FM radio broadcast
stations and television stations nationally. Similar types of restrictions
apply in other mass media and common carrier industries.
Government actions around the world, specifically in the area of
pre-marketing clearance of products and prices, can be arbitrary and
unpredictable. Changes in world currency values are also unpredictable and
can have a significant short-term impact on revenues, profits and share
valuations.
A
10
<PAGE> 11
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
Certain of the companies in which the Global Interactive Couch Potato(R) Fund
invests may allocate greater than usual financial resources to research and
product development. The securities of such companies may experience
above-average price movements associated with the perceived prospects of
success of the research and development programs. In addition, companies in
which the Fund invests may be adversely affected by lack of commercial
acceptance of a new product or process or by technological change and
obsolescence.
GLOBAL OPPORTUNITY FUND
INVESTMENT OBJECTIVES AND POLICIES
The Global Opportunity Fund primarily seeks to provide investors with capital
appreciation. Current income is a secondary objective.
PRINCIPAL INVESTMENT STRATEGIES
Under normal market conditions, the Global Opportunity Fund will invest at
least 65% of its total assets in common stock of companies which the Adviser
believes are likely to have rapid growth in revenues and earnings and
potential for above average capital appreciation or are undervalued.
GLOBAL CONVERTIBLE SECURITIES FUND
INVESTMENT OBJECTIVES AND POLICIES
The Global Convertible Securities Fund primarily seeks to provide investors
with a high level of total return through a combination of current income and
appreciation of capital.
PRINCIPAL INVESTMENT STRATEGIES
Under normal market conditions, the Global Convertible Securities Fund will
invest at least 65% of its total assets in convertible securities. A
convertible security is a bond, debenture, corporate note, preferred stock or
other similar security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within or
at a particular period of time at a specified price or formula. Before
conversion, convertible securities have characteristics similar to
nonconvertible debt securities in that they ordinarily provide a stream of
income with generally higher yields than those of common stock of the same or
similar issuers. Convertible securities are senior in rank to common stock in
a corporation's capital structure and, therefore, generally entail less risk
than the corporation's common stock, although the extent to which such risk
is reduced depends in large measure upon the credit quality of the issuer.
The Fund may invest without limit in securities that are not considered
investment grade and that accordingly have greater risk of loss of principal
and interest.
11
<PAGE> 12
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
SPECIFIC RISK FACTORS
Because many convertible securities are rated below investment grade, the
Global Convertible Securities Fund may invest without limit in securities
rated lower than BBB by S&P or Caa or lower by Moody's or, if unrated, are of
comparable quality as determined by the Adviser. These securities and
securities rated BB or lower by S&P or Ba or lower by Moody's may include
securities of issuers in default. Such securities are considered by the
rating agencies to be predominantly speculative and may involve major risk
exposures such as increased sensitivity to interest rate and economic changes
and limited liquidity resulting in the possibility that prices realized upon
the sale of such securities will be less than the prices used in calculating
the Fund's net asset value.
The characteristics of convertible securities make them appropriate
investments for investors who seek a high level of total return with the
addition of credit risk. These characteristics include the potential for
capital appreciation if the value of the underlying common stock increases,
the relatively high yield received from dividend or interest payments as
compared to common stock dividends and decreased risks of decline in value,
relative to the underlying common stock due to their fixed income nature. As
a result of the conversion feature, however, the interest rate or dividend
preference on a convertible security is generally less than would be the case
if the securities were not convertible. During periods of rising interest
rates, it is possible that the potential for capital gain on a convertible
security may be less than that of a common stock equivalent if the yield on
the convertible security is at a level which causes it to sell at a discount.
Any common stock or other equity security received by conversion will not be
included in the calculation of the percentage of total assets invested in
A convertible securities.
GENERAL RISK FACTORS
PORTFOLIO TURNOVER. The investment policies of the Funds may lead to frequent
changes in investments, particularly in periods of rapidly fluctuating
interest or currency exchange rates. The portfolio turnover may be higher
than that of other investment companies. Portfolio turnover generally
involves some expense to the Funds, including brokerage commissions or dealer
mark-ups and other transaction costs on the sale of securities and
reinvestment in other securities. As such, a higher portfolio turnover rate
could increase the Funds' expenses which could negatively affect the Funds'
performance.
COMMON STOCKS. Common stocks represent the residual ownership interest in an
issuer and are entitled to the income and increase in the value of the assets
and business of the entity after all of its obligations and preferred stock
are satisfied. Common stocks fluctuate in price in response to many factors
including historical and prospective earnings of the issuer, the value of its
assets, general economic conditions, interest rates, investors perceptions of
the issuer and market liquidity. Preferred stock has preference over common
stock in liquidation (and generally dividends as well) but is subordinated to
the liabilities of the issue in all other respects.
NON-DIVERSIFICATION RISK. Each Fund is a "non-diversified investment company"
which means that it can concentrate its investments in the securities of a
single company to a greater extent than a diversified investment company.
Because each Fund may invest its assets in the securities of a limited number
of companies, a decline in the value of the stock of any one of these issuers
will have a greater impact on the Fund's share price. In addition, many
companies in the past several years have adopted
12
<PAGE> 13
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
so-called "poison pill" and other defensive measures. Such measures may limit
the amount of securities in any one issuer that the Funds may buy.
FOREIGN RISK. Investments in foreign securities involve risks relating to
political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and
foreign issuers and markets are subject:
- These risks may include the seizure by the government of company assets,
excessive taxation, withholding taxes on dividends and interest,
limitations on the use or transfer of portfolio assets and political or
social instability.
- Enforcing legal rights may be difficult, costly and slow in foreign
countries, and there may be special problems enforcing claims against
foreign governments.
- Foreign companies may be not subject to accounting standards or
governmental supervision comparable to U.S. companies, and there may be
less public information about their operations.
- Foreign markets may be less liquid and more volatile than U.S. markets.
- Foreign securities often trade in currencies other than the U.S. dollar,
and the Funds may directly hold foreign currencies and purchase and sell
foreign currencies. Changes in currency exchange rates will affect the
Fund's net asset value, the value of dividends and interest earned, and
gains and losses realized on the sale of securities. An increase in the
strength of the U.S. dollar relative to these other currencies may cause
the value of the Funds to decline. Certain foreign currencies may be
particularly volatile, and foreign governments may intervene in the
currency markets, causing a decline in value or liquidity of the Funds'
foreign currency holdings.
- Costs of buying, selling and holding foreign securities, including
brokerage, tax and custody costs, may be higher than those involved in
domestic transactions.
The Funds' investments in the securities of developing countries involves
exposure to economic structures that are generally less diverse and less
mature, and to political systems that can be expected to have less stability,
than those of developed countries. The markets of developing countries
historically have been more volatile than the markets of the more mature
economies of developed countries, but often have provided higher rates of
return to investors.
13
<PAGE> 14
FUND MANAGEMENT
THE INVESTMENT ADVISER
Gabelli Funds, LLC (the "Adviser"), One Corporate Center, Rye, NY 10580 is a
limited liability company organized in 1999 after a reorganization of the
predecessor, Gabelli Funds, Inc., which was formed in 1980. As of December
31, 1998, Gabelli Funds, LLC and its affiliates manage more than $16.3
billion in assets. Through its portfolio management team, Gabelli Funds, LLC
makes the day-to-day investment decisions and continuously reviews,
supervises and administers each Fund's investment programs.
For these advisory services, the Adviser earned a fee of 1.00% of average net
assets of each Fund during the fiscal year ended December 31, 1998. Any
portion of the total fees received by the Adviser may be used by the Adviser
to provide shareholder and administrative services.
THE PORTFOLIO MANAGERS
Mr. Mario J. Gabelli, President, is the team manager responsible for the
day-to-day management of the Global Telecommunications Fund. Mr. Gabelli has
been Chairman, President and Chief Executive Officer of the Adviser since its
organization in 1980. He is assisted by Associate Portfolio Manager, Marc J.
Gabelli.
Mr. Marc Gabelli is also primarily responsible for the day-to-day management
of the Global Interactive Couch Potato(R) Fund. Mr. Gabelli is a Portfolio
Manager of the Adviser, and has been an analyst with the Adviser since 1993.
Messrs. Marc Gabelli and Caesar Bryan are primarily responsible for the
day-to-day management of the Global Opportunity Fund. Mr. Bryan is President
and Portfolio Manager of the Gabelli Gold Fund and the Gabelli International
Growth Fund and has been a Senior Vice President of GAMCO Investors, Inc., a
wholly owned subsidiary of Gabelli Asset Management Inc., since May 1994. Mr.
Bryan served as Senior Vice President and Portfolio Manager of Lexington
Management Corporation from 1986 until May 1994.
Mr. A. Hartswell Woodson III, Vice President -- Portfolio Manager, is
primarily responsible for the day-to-day management of the Global Convertible
Securities Fund. Mr. Woodson joined the Adviser as a portfolio manager in
1993.
THE DISTRIBUTOR
Gabelli & Company, Inc. is the Funds' distributor. Its address is One
Corporate Center, Rye, NY 10580.
The Statement of Additional Information has more detailed information about
the Adviser and other service providers.
YEAR 2000 As the year 2000 approaches, an issue has emerged regarding how the
software used by the Fund's service providers can accommodate the date
"2000." Failure to adequately address this issue could result in major
systems or process failures which could disrupt the Fund's operations. The
Adviser is in the process of working with the Fund's service providers to
prepare for the year 2000. Based on information currently available, the
Adviser does not expect that the Fund will incur significant operating
expenses or be required to incur material costs to be year 2000 compliant.
The Fund cannot guarantee, however, that all year 2000 issues will be
identified and corrected by January 1, 2000, and any noncompliant computer
system could hurt key Fund operations, such as shareholder servicing, pricing
and trading. In addition, the Year 2000 problem may adversely affect the
companies in which the Fund invests, particularly companies in foreign
countries. For example, these companies may incur substantial costs to
correct the problem. To the extent that the impact on a Fund holding is
negative, it could seriously affect the Fund's performance.
14
<PAGE> 15
SHAREHOLDER INFORMATION
PRICING OF FUND SHARES
HOW NAV IS CALCULATED
The NAV is calculated by
adding the total value of
the Fund's investments and
other assets, subtracting
its liabilities and then
dividing that figure by the
number of outstanding
shares of the Fund:
NAV =
Total Assets - Liabilities
------------------------------------------------------------------------------
Number of Shares
Outstanding
---------------------------
You can find the Fund's NAV
daily in the Wall Street
Journal and other
newspapers or by calling
1-800-GABELLI
(800-422-3554).
The net asset value, or NAV, of each
Fund's Class AAA shares is determined
and such shares are priced at the
close of regular trading on the New
York Stock Exchange, normally at 4:00
p.m., eastern time, on days the New
York Stock Exchange is open. Your
order for purchase, sale or exchange
of shares is priced at the next NAV
calculated after your order is
received by the Funds. This is what is
known as the offering price.
Fund securities are valued as of the
close of trading on the primary
exchange on which they trade. Fund
securities are generally valued at
current market prices. If market
quotations are not available, prices
will be based on the average of the
latest bid and asked quotations, or
the latest bid price if asked prices
are not available for such securities
prior to the valuation time. Debt
securities with remaining maturities
of 60 days or less will be valued at
amortized cost, which the Board of
Directors believes represents fair
value.
Some Fund securities may be listed on
foreign exchanges that are open on
days (such as U.S. holidays) when the
Funds do not compute their NAV. This
could cause the value of the Funds'
portfolio investments to be affected
on days when you cannot buy or sell
A shares.
PURCHASING, SELLING AND EXCHANGING SHARES
Information about purchasing, selling and exchanging your shares is contained
in a separate document called the Owner's Manual. If you have not received
it, please contact your broker or financial consultant or the Funds at the
number listed on the back page of this Prospectus. The Owner's Manual is
A considered an integral part of this Prospectus.
DISTRIBUTION ARRANGEMENTS
The Funds have adopted distribution plans pursuant to Rule 12b-1 under the
1940 Act which authorize payments by the Funds on Class AAA shares of .25% of
the average daily net assets attributable to Class AAA Shares of the Funds to
compensate the Distributor and other dealers and investment representatives
for services and expenses relating to the sale and distribution of the Funds'
shares. Rule 12b-1 fees are paid from the Funds' assets on an ongoing basis,
and increase the cost of your investment and may cost you more than paying
other types of sales charges.
15
<PAGE> 16
SHAREHOLDER INFORMATION
DIVIDENDS, DISTRIBUTION AND TAXES
Any income the Funds receive in the form of interest or dividends is paid
out, less expenses, to its shareholders. The Funds declare and pay dividends
from net investment income and capital gains, if any, on an annual basis.
Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.
The Funds expect that dividends will primarily consist of net investment
income and, if any, short-term and long-term capital gains. The determination
as to whether a gain to be distributed is short-term or long-term depends on
the amount of time the security is held by a Fund prior to disposition and
not on the amount of time a shareholder has been invested in such Fund.
Distributions from net investment income and short-term capital gains are
taxable as ordinary income. Such distributions are taken into account for tax
purposes in the year in which they are declared, even if they appear on your
account statement the following year. Long-term capital gain distributions
are taxable at long-term capital gain tax rates. The exchange of the Funds'
shares for shares of another fund will be treated as a sale of shares, and
any gain on the transaction may be subject to federal income tax.
You will be notified in January each year about the federal tax status of
distributions made by the Funds. Depending on your residence for tax
purposes, distributions also may be subject to state and local taxes,
including withholding taxes.
TAX IDENTIFICATION NUMBER
The Funds are required to withhold 31% of taxable
dividends, capital gains distributions and redemptions
proceeds paid to shareholders who have not provided the
Funds with their Taxpayer Identification Number in
compliance with IRS rules. To avoid this, make sure you
provide your correct Tax Identification Number (Social
Security Number for most investors) on your account
application.
Foreign shareholders may be subject to special withholding requirements.
Consult your tax adviser about the federal, state and local tax consequences
in your particular circumstances.
OTHER SHAREHOLDER SERVICES
As a shareholder of the Funds, you can take advantage of other service
privileges which are described in the Owner's Manual:
- Telephone Investment and Redemption Plan
- Automatic Investment Plan
- Systematic Withdrawal Plan
- Retirement Plans
16
<PAGE> 17
FINANCIAL HIGHLIGHTS
- -
The financial highlights tables are intended to help you understand the
Funds' financial performance for the past 5 years or since inception of the
Fund, if less than 5 years. Certain information reflects financial results
for a single Fund share. The total returns in the tables represent the rate
that you would have earned or lost on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Grant Thornton LLP, whose report, along with the Fund's financial
statements, are included in the Statement of Additional Information, which is
available upon request.
THE GABELLI GLOBAL TELECOMMUNICATIONS FUND
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period $ 13.32 $ 11.28 $ 11.12 $ 9.73 $ 10.20
-------- -------- -------- -------- --------
Net investment income 0.01 0.00(a) 0.05 0.06 0.07
Net realized and unrealized gain (loss)
on investments 4.60 3.59 0.95 1.51 (0.44)
-------- -------- -------- -------- --------
Total from investment operations 4.61 3.59 1.00 1.57 (0.37)
-------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (0.01) -- (0.05) (0.06) (0.07)
Net realized gain on investments (1.30) (1.55) (0.79) (0.12) (0.03)
-------- -------- -------- -------- --------
Total distributions (1.31) (1.55) (0.84) (0.18) (0.10)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 16.62 $ 13.32 $ 11.28 $ 11.12 $ 9.73
======== ======== ======== ======== ========
Total return+ 34.80% 31.90% 9.00% 16.20% (3.70)%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $170,063 $117,872 $108,544 $122,845 $137,731
Ratio of net investment income to
average
net assets 0.08% 0.01% 0.34% 0.53% 0.74%
Ratio of operating expenses to average
net assets(b) 1.60% 1.78% 1.72% 1.75% 1.80%
Portfolio turnover rate 20% 9% 7% 24% 14%
</TABLE>
+ 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.
(a) Amount represents less than $0.005 per share.
(b) The Fund incurred interest expense for 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%.
17
<PAGE> 18
FINANCIAL HIGHLIGHTS
- -
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997 1996 1995 1994+
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period $ 14.28 $ 11.75 $ 11.72 $ 10.25 $ 10.00
-------- -------- -------- -------- ---------
Net investment income (loss) 0.11 (0.07) (0.09) (0.01) (0.01)
Net realized and unrealized gain on investments 3.98 4.97 1.56 1.84 0.26
-------- -------- -------- -------- ---------
Total from investment operations 4.09 4.90 1.47 1.83 0.25
-------- -------- -------- -------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (0.11) -- -- -- --
In excess of net investment income -- -- (1.44) (0.36) --
Net realized gain on investments (1.23) (2.37) -- -- --
In excess of net realized gain on investments (0.04) -- -- -- --
-------- -------- -------- -------- ---------
Total distributions (1.38) (2.37) (1.44) (0.36) --
-------- -------- -------- -------- ---------
NET ASSET VALUE, END OF PERIOD $ 16.99 $ 14.28 $ 11.75 $ 11.72 $ 10.25
======== ======== ======== ======== =========
Total return++ 28.90% 41.70% 12.50% 17.90% 2.50%
======== ======== ======== ======== =========
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL
DATA:
Net assets, end of period (in 000's) $ 73,999 $ 40,558 $ 37,779 $ 31,439 $ 24,831
Ratio of net investment income (loss) to average
net assets 0.66% (0.61)% (0.70)% (0.07)% (0.13)%(a
Ratio of operating expenses to average net
assets(b) 1.66% 1.78% 2.06% 2.47% 2.47%(a)
Portfolio turnover rate 105% 68% 47% 33% 14%
</TABLE>
+ From commencement of operations on February 7, 1994.
++ 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) Annualized.
(b) The Fund incurred interest expense for the years ended December 31, 1998
and 1997. If interest expense had not been incurred, the ratios of
operating expenses to average net assets would have been 1.63% and 1.64%,
respectively.
18
<PAGE> 19
FINANCIAL HIGHLIGHTS
- -
THE GABELLI GLOBAL OPPORTUNITY FUND
THE GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
GABELLI GLOBAL
OPPORTUNITY GABELLI GLOBAL
FUND CONVERTIBLE SECURITIES FUND
-------------- ---------------------------------------------
1998+ 1998 1997 1996 1995 1994++
<S> <C> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.00 $ 9.39 $10.18 $ 10.79 $ 9.93 $ 10.00
------- ------ ------ ------- ------- -------
Net investment income (loss) 0.09 (0.12) 0.11 0.43 0.39 0.16
Net realized and unrealized gain on
investments 0.91 0.93 0.17 0.16 0.86 (0.07)
------- ------ ------ ------- ------- -------
Total from investment operations 1.00 0.81 0.28 0.59 1.25 0.09
------- ------ ------ ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (0.09) -- (0.14) (0.43) (0.39) (0.16)
Net realized gain on investments (0.30) (0.07) (0.90) (0.77) -- --
In excess of net investment income (0.06) (0.01) -- -- -- --
In excess of net realized gain on investments -- -- (0.03) -- -- --
------- ------ ------ ------- ------- -------
Total distributions (0.45) (0.08) (1.07) (1.20) (0.39) (0.16)
------- ------ ------ ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 10.55 $10.12 $ 9.39 $ 10.18 $ 10.79 $ 9.93
======= ====== ====== ======= ======= =======
Total return+++ 10.10% 8.60% 2.80% 5.50% 12.60% 0.90%
======= ====== ====== ======= ======= =======
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL
DATA:
Net assets, end of period (in 000's) $ 5,866 $7,326 $9,375 $13,527 $15,742 $15,574
Ratio of net investment income (loss) to
average
net assets 1.72%(a) (1.00)% 1.17% 2.00% 2.90% 2.80%(a)
Ratio of operating expenses to average net
assets before reimbursement(b) 4.77%(a) -- -- -- -- --
Ratio of operating expenses to average net
assets(c) 1.00%(a) 2.63% 2.48% 2.35% 2.41% 2.49%(a)
Portfolio turnover rate 127% 89% 100% 126% 152% 329%
</TABLE>
<TABLE>
<C> <S>
+ From commencement of operations on May 11, 1998.
++ From commencement of operations on February 3, 1994.
+++ 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) Annualized.
(b) During the period ended December 31, 1998, the Adviser
voluntarily reimbursed certain expenses of the Opportunity
Fund. If such reimbursement had not occurred, the ratio of
operating expenses to average net assets would have been as
shown.
(c) The Convertible Securities Fund incurred interest expense
for 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 2.46%. In addition, the
ratio for the year ended December 31, 1997 does not include
a reduction of expenses for custodian fee credits. Including
such credits, the ratio would have been 2.47%.
</TABLE>
19
<PAGE> 20
GABELLI GLOBAL SERIES FUNDS, INC.
FOR MORE INFORMATION:
For more information about the Funds, the following documents are available free
upon request:
OWNER'S MANUAL:
Information about purchasing, selling and exchanging shares of the Funds is
included in a separate document entitled "Owner's Manual." The Owner's Manual is
incorporated by reference into the Prospectus. If you have not received it,
please contact the Funds at the number listed below.
ANNUAL/SEMI-ANNUAL REPORTS:
The Funds' semi-annual and audited annual reports to shareholders contain
detailed information on the Funds' investments. In the annual report, you will
find a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Funds, including their
operations and investment policies. It is incorporated by reference, and is
legally considered a part of this prospectus.
You can get free copies of these documents and prospectuses of other Funds
in the Gabelli family, or request other information and discuss your
questions about the Fund by contacting:
Gabelli Global Series Funds, Inc.
One Corporate Center
Rye, NY 10580
Telephone: 1-800-GABELLI (1-800-422-3554)
www.gabelli.com
You can review the Funds' reports and SAIs at the Public Reference Room of the
Securities and Exchange Commission. You can get text-only copies:
X For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
X Free from the Commission's Website at http://www.sec.gov.
(Investment Company Act file no. 811-07896)
