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GLOBAL GROWTH
[PHOTO OF MARC GABELLI OMITTED]
MARC J. GABELLI
ANNUAL REPORT - DECEMBER 31, 1999
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
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[GRAPHIC OMITTED--5 STARS]
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Morningstar Rated(TM) Gabelli Global Interactive
Couch Potato(R)Fund #5 stars overall and for the
three-year period ended 12/31/99 among 3469
domestic equity funds, and for the five-year period
ended 12/31/99 among 2180 domestic equity funds.
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#1 Global Fund!
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Lipper Inc. ranked Gabelli Global
Interactive Couch Potato(R) Fund #1 for the
three and five-year periods ended 12/31/99
among 170 and 101 global funds, respectively.
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TO OUR SHAREHOLDERS,
Multimedia stocks excelled in 1999. Virtually all of the sub-sectors of
this broadly defined group--telecommunications, cable television, cable
networks, broadcasting, publishing, and entertainment software--performed
exceptionally well. This was a global phenomenon, with portfolio holdings from
almost every region and nation contributing to the Fund's returns.
INVESTMENT PERFORMANCE
For the fourth quarter ended December 31, 1999, The Gabelli Global
Interactive Couch Potato Fund's (the "Fund") total return was a superb 47.36%.
The Lipper Global Fund Average and Morgan Stanley Capital International World
Free Index of global equity markets had total returns of 23.79% and 17.35%,
respectively, over the same period. The Morgan Stanley World Free Index is an
unmanaged
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PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Morningstar proprietary
ratings reflect historical risk adjusted performance as of December 31, 1999 and
are subject to change every month. Morningstar ratings are calculated from a
Fund's three, five and ten-year average annual returns in excess of 90-day T-
Bill returns with appropriate fee adjustments and a risk factor that reflects
fund performance below 90-day T-Bill returns. The top 10% of the funds in a
broad asset class receive five stars, the next 22.5% receive four stars, the
next 35% receive three stars, the next 22.5% receive two stars and the bottom
10% receive one star. Lipper Inc. ranked The Gabelli Global Interactive Couch
Potato(R) Fund 7 among 256 global funds for the one year period ended December
31, 1999. Lipper rankings are based upon one, three and five-year total returns
at NAV.
<PAGE>
INVESTMENT RESULTS (a)
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<TABLE>
<CAPTION>
Quarter
-------------------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1999: Net Asset Value ......................... $20.33 $23.52 $24.91 $35.17 $35.17
Total Return ............................ 19.7% 15.7% 5.9% 47.4% 116.1%
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1998: Net Asset Value ......................... $16.45 $17.39 $15.17 $16.99 $16.99
Total Return ............................ 15.2% 5.7% (12.8)% 21.4% 28.9%
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1997: Net Asset Value ......................... $11.79 $13.72 $15.02 $14.28 $14.28
Total Return ............................ 0.3% 16.4% 9.5% 10.9% 41.7%
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1996: Net Asset Value ......................... $12.57 $13.40 $13.22 $11.75 $11.75
Total Return ............................ 7.3% 6.6% (1.3)% (0.3)% 12.5%
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1995: Net Asset Value ......................... $10.62 $11.28 $12.30 $11.72 $11.72
Total Return ............................ 3.6% 6.2% 9.0% (1.8)% 17.9%
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1994: Net Asset Value ......................... $9.90 $9.97 $10.54 $10.25 $10.25
Total Return ............................ (1.0)%(b) 0.7% 5.7% (2.8)% 2.5%(b)
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</TABLE>
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Average Annual Returns - December 31, 1999 (a)
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1 Year ................................................................ 116.06%
5 Year ................................................................ 39.25%
Life of Fund (b) ...................................................... 32.94%
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Dividend History
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Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 27, 1999 $1.465 $33.50
December 28, 1998 $1.385 $16.56
December 31, 1997 $2.370 $14.28
December 31, 1996 $1.436 $11.75
December 29, 1995 $0.363 $11.72
(a) Total returns and average annual returns reflect changes in share price and
reinvestment of dividends and are net of expenses. The net asset value of the
Fund is reduced on the ex-dividend (payment) date by the amount of the dividend
paid. Of course, returns represent past performance and do not guarantee future
results. Investment returns and the principal value of an investment will
fluctuate. When shares are redeemed they may be worth more or less than their
original cost. (b) From commencement of investment operations on February 7,
1994. Note: Investing in foreign securities involves risks not ordinarily
associated with investments in domestic issues, including currency fluctuation,
economic and political risks.
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indicator of stock market performance, while the Lipper Average reflects the
average performance of mutual funds classified in this particular category. The
Fund was up an impressive 116.06% for 1999. The Lipper Global Fund Average and
Morgan Stanley World Free Index rose 36.08% and 26.82%, respectively, over the
same twelve-month period.
For the five-year period ended December 31, 1999, the Fund's total return
averaged 39.25% annually versus average annual total returns of 19.24% and
19.19% for the Lipper Global Fund Average and Morgan Stanley World Free Index,
respectively. Since inception on February 7, 1994 through December 31, 1999, the
Fund had a cumulative total return of 436.60%, which equates to an average
annual total return of 32.94%.
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND,
THE LIPPER GLOBAL FUND AVERAGE AND THE MORGAN STANLEY WORLD FREE INDEX
[LINE GRAPH OMITTED--PLOT POINTS AS FOLLOWS]
GABELLI GLOBAL LIPPER GLOBAL MORGAN STANLEY WORLD
GROWTH FUND FUND AVERAGE FREE INDEX
-------------- ------------- --------------------
2/7/94 $10,000 $10,000 $10,000
12/94 10,250 9,835 9,849
12/95 12,080 11,214 11,766
12/96 13,590 13,042 13,319
12/97 19,257 14,743 15,316
12/98 24,828 16,857 18,681
12/99 53,643 21,000 24,000
ACTUAL 22,939 ACTUAL 23,691
*PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
GLOBAL ALLOCATION
The accompanying chart presents the Fund's holdings by geographic region
as of December 31, 1999. 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 - 12/31/99
[The following table was depicted as a pie chart in the printed material.]
Europe 27.8%
Japan 26.1%
Canada 4.1%
Asian/Pacific Rim 3.0%
Latin America 0.2%
United States 38.8%
THE COUCH POTATO SPROUTS TO GLOBAL GROWTH
The Fund's primary objective is capital appreciation achieved through a
disciplined investment program focusing on the globalization and interactivity
of the world's marketplace. The Fund invests in companies at the forefront of
accelerated growth.
We strive to find reasonably valued businesses exhibiting creativity to
adapt to the changing environment. Additionally, we look for solid franchises,
ideally with unique copyrights that can add to overall value creation. And
lastly, we like growth and therefore look to businesses involved in the
ever-evolving communication revolution. Looking forward, we continue to believe
that the dominant companies of tomorrow will be conducting a major portion of
their business via the Internet within the
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next five years. In anticipation of this period of revolutionary change, we have
changed the name of the Fund from The Gabelli Global Interactive Couch Potato(R)
Fund to The Gabelli Global Growth Fund.
Our vision, as well as your vision and commitment as an investor, have
been grandly rewarded. Investors continued to enjoy excellent investment returns
this year, as the interactive revolution maintained its strength. We formed the
Fund in 1994, believing that we were entering a period of accelerated growth
globally. The investment objective of the Fund will remain the same, and while
we are saddened to bid farewell to the original name, keep in mind that it is
only a name.
COMMENTARY
WHAT A YEAR
In 1999, multimedia stocks skyrocketed. Every industry group sector in our
portfolio performed well. Our portfolio batting average, (the number of
portfolio holdings closing the year with positive returns/total portfolio
holdings at year-end), exceeded .800--a new record for the Fund. More than 20%
of the securities held for the full year more than doubled, and nearly 35% had
gains exceeding 50%. We did a solid job picking stocks. However, we must also
credit widespread investor recognition of the exceptional prospects for
multimedia businesses worldwide for our success.
Wireless communications companies stood out during a year in which
virtually every multimedia industry sector contributed to returns. Why did
investors "discover" wireless in 1999? The development of seamless national
networks, better transmission and handset technology, and significantly lower
costs to consumers combined to alert investors to the enormous growth potential
of wireless. We now have Internet access through cellular telephones. In the
future, we will be able to link our personal computers to the Internet via
wireless systems. Ultimately, the "Wireless World" may be even bigger than the
"Wired World" envisioned by Microsoft co-founder and venture capitalist Paul
Allen.
After several relatively disappointing years, broadcast and publishing
stocks were also stellar performers. Ironically, these "old media" companies are
benefiting substantially from a flood of advertising dollars coming from "new
media" Internet companies, which recognize the best way to build brand
recognition is through radio, television, newspaper, and magazine ads.
The Fund was also buoyed by much better performance from its Japanese,
Southeast Asian, and Latin American investments, which in recent years have been
restrained by the economic and stock market malaise in their regions and
individual countries. The realistic potential for synchronized global economic
growth should help our international portfolio holdings contribute more
consistently to performance.
BEST AND WORST
The top of our performance list featured an "Internet Incubator"
(Softbank), a wireless communications company (Omnipoint), a Japanese
telecommunications operator (Japan Telecom), an
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old line publisher with a new wrinkle (TV Guide), a Canadian multimedia group
(Rogers), a cable network programmer (AT&T's Liberty Media Group), a global
consumer electronics giant (Sony) and a Mexican broadcaster (Grupo Televisa). In
short it was a truly international menu of companies from every sector of the
multimedia industry.
Our extremely short list of losers included a film distributor (General
Cinemas), a Japanese video game maker (Sega), a newspaper publisher (E.W.
Scripps) and a multimedia giant (Walt Disney).
WHAT'S NEXT
The year 1999 will be a tough act to follow. Although we are mindful of
rather rich valuations in some of the sectors of the broadly defined multimedia
industry and concerned that the U.S. equities market may be vulnerable, we
believe that multimedia remains an exciting industry with exceptional long term
secular growth prospects. We are entering a period in which technological
innovations, global deregulation and global consolidation will dramatically
alter the multimedia industry landscape. There will be winners and losers, and
it is our job to determine which companies will lead and which will fall behind.
We believe we are up to the task.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund.
Favorable earnings prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over
time. The share prices of foreign holdings are stated in U.S. dollar equivalent
terms as of December 31, 1999.
CABLE & WIRELESS PLC (CWP - $52.9375 - NYSE), a United Kingdom-based company, is
a global telecommunications provider with interests in local telephone
companies. Major subsidiaries include Hong Kong Telecommunications (HKT -
$29.125 - NYSE) (54% owned) and the publicly traded, U.K.-based company, Cable &
Wireless Communications (CWZ - $70.00 - NYSE) (53% owned) which is the largest
cable system operator in the U.K. CWZ owns 100% of Mercury Communications, the
second largest provider of telecommunications services in Britain, and is a
majority stakeholder in Bell Cable Media, Nynex CableComms and Videotron
Holdings plc. In August, the company agreed to sell Cable & Wireless
Communications' consumer business to NTL Inc. for 8 billion pounds, and will
retain its data assets including Mercury Communications. Hong Kong Telecom is
the dominant telecommunications service provider in Hong Kong and remains the
"crown jewel" of the CWP portfolio. Cable & Wireless has dramatically expanded
its global Internet presence with its September 1998 acquisition of Internet MCI
for $1.75 billion and its recently announced acquisition of 8 Internet service
providers in Europe.
CABLEVISION SYSTEMS CORP. (CVC - $75.50 - AMEX) is one of the nation's leading
communications and entertainment companies, with a portfolio of operations that
span state-of-the-art, high-speed multimedia
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delivery, subscription cable television services, championship professional
sports teams and national cable television networks. Headquartered in Bethpage,
N.Y., Cablevision serves more than 3.4 million cable customers primarily in
three core markets: New York, Boston and Cleveland. Cablevision is a leader in
delivering cutting-edge technological innovation, such as Optimum TV, to the
home. Through its Rainbow Media Holdings subsidiary, Cablevision manages and
develops internationally recognized content offerings such as the popular
national television networks American Movie Classics, Bravo and The Independent
Film Channel. Cablevision has a controlling interest in New York City's famed
Madison Square Garden, which includes the arena complex, the N.Y. Knicks, the
N.Y. Rangers and the MSG network. Cablevision operates Radio City Entertainment
and holds a long term lease for Radio City Music Hall, home of the world famous
Rockettes.
CANAL + (CNLP.PA - $145.55 - PARIS STOCK EXCHANGE) is Europe's leading pay
television company, operating throughout Europe with the exception of the U.K.,
Ireland and Germany. Canal + provides premium channels as well as film and
television programming. The company has expanded its businesses to include
digital television service and is a majority owner in Numericable, one of
France's top three cable operators, and Paris St. Germain, the top French soccer
club.
CITIZENS UTILITIES CO. (CZN - $14.1875 - NYSE) provides telecommunications
services and public services to approximately 1.8 million customers in 21
states. Citizens owns 83% of Electric Lightwave (ELIX - $18.75 - Nasdaq), a
competitive local exchange carrier ("CLEC") serving primarily the western U.S.
Last year, management authorized the separation of Citizens' telecommunications
businesses and public services businesses into two stand-alone, publicly traded
companies. Recently, CZN announced agreements to acquire about 900,000 rural
access lines in 11 states for $2.8 billion. CZN intends to finance the
transactions by divesting its public services operations. It has already
announced the sale of its water operations to American Water Resources for $835
million. The company has sold its 16% stake in Centennial Cellular Corp. for
approximately $205 million. Citizens has monetized its ownership of Century
Communications' (CTYA - $45.625 - Nasdaq) stock and cable operations through a
sale to Adelphia Communications for approximately $220 million.
LIBERTY MEDIA GROUP (LMG'A - $56.75 - NYSE) is engaged in businesses which
provide programming services, including production, acquisition and distribution
through all available media formats, as well as businesses engaged in electronic
retailing, direct marketing and other services. LMG holds interests in
globally-branded entertainment networks such as Discovery Channel, USA Network,
QVC, Encore and STARZ!. Liberty's assets also include interests in international
video distribution businesses, international telephony and domestic wireless,
plant and equipment manufacturers, and other businesses related to broadband
services. Liberty Media Group Class A and Class B common stock are tracking
stocks of AT&T Corp. (T - $50.75 - NYSE) and are now traded on the New York
Stock Exchange.
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MANNESMANN AG (MMN - $243.75 - FRANKFURT STOCK EXCHANGE) is a Germany-based
conglomerate with market leading operations in engineering, automotive, and
telecommunications. Mannesmann has focused on its telecommunications activities
in recent years. Today, it holds majority stakes in two of the top three
European mobile operators, Omnitel in Italy and Mannesmann D2 in Germany. It
also has a 15% stake in SFR, the French mobile operator, and recently won the
fourth mobile license in Austria. As of November, it has a majority stake in
Orange plc. Mannesmann is active in fixed network communications as the 1
competitor in Germany, Italy, France and Austria. The company is currently the
target of a hostile takeover attempt by Vodafone AirTouch plc.
SOFTBANK CORP. (9984.T - $957.23 - TOKYO STOCK EXCHANGE) is Japan's number one
software distributor, holding franchises for Microsoft, Novell and Oracle
products. The company also owns Kingston Technology, the number one memory
module maker in the world. Softbank's 71%-ownership of Ziff- Davis (ZD -
$15.8125 - NYSE), the second largest magazine publisher in the U.S., and its 11%
stake in Japan Digital Broadcasting, illustrate its media interests. ZD COMDEX
and Forums, a division of Ziff-Davis, produce computer-related trade shows.
Softbank has direct or indirect investments in over 60 Internet-related
companies including Yahoo! (28%), GeoCities (22%) and E*Trade Group (27%). With
the deregulation of the financial services sector, the company is now poised to
develop its Web-based businesses in Japan.
SONY CORP. (6758.T - $296.56 - TOKYO STOCK EXCHANGE) develops and manufactures
consumer and industrial electronic equipment. The company's products include
audio and video equipment, televisions, displays, semiconductors, electronic
components, computers and computer peripherals, and telecommunication equipment.
Sony will focus on evolving digital network technology in its electronics
business. In July, the Columbia House record and video club subsidiary announced
plans to merge with CDNow. After the merger, Sony will have a 37% stake in the
new company.
TELEPHONE & DATA SYSTEMS INC. (TDS - $126.00 - AMEX) is a diversified
telecommunications company with established cellular and local telephone
operations and a developing personal communications services ("PCS") business.
TDS provides high quality telecommunications services to three million customers
in 35 states. TDS owns 81.1% of United States Cellular Corp. (USM - $100.9375 -
AMEX), the nation's seventh largest cellular telephone company. It also owns
82.4% of Aerial Communications Inc. (AERL - $60.875 - Nasdaq), TDS's PCS
subsidiary which owns the licenses to provide PCS service in six major trading
areas ("MTAs") encompassing approximately 27.6 million population equivalents.
On September 20, 1999, VoiceStream Wireless (VSTR - $142.3125 - Nasdaq)
announced the acquisition of Aerial in a $3.3 billion transaction. Pro-forma for
this acquisition, TDS will own over 36 million shares of VoiceStream.
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TV GUIDE INC. (TVGIA - $43.00 - NASDAQ), formerly United Video Satellite Group,
publishes TV Guide, the best-selling weekly magazine in the U.S. The company's
other operations include the TV Guide Channel (an on-screen programming guide
formerly called the Prevue Channel) and 40% of Superstar/Netlink Group, which
sends programming from such providers as CNN, ESPN, and HBO to home satellite
dishes. Other services include SpaceCom (satellite transmission services for
radio programming, paging, and news services) and UVTV (distribution of
superstations, such as Chicago's WGN, to cable television systems). News Corp.
and AT&T's Liberty Media Group each hold about 49% of TV Guide's voting power
and 44% of its equity.
USA NETWORKS INC. (USAI - $55.25 - NASDAQ), through its subsidiaries, engages in
diversified media and electronic commerce businesses that include: electronic
retailing, ticketing operations and television broadcasting. Chairman and CEO
Barry Diller has brought together under one umbrella: the USA Network, the
Sci-Fi Channel, USA Networks Studios, USA Broadcasting, The Home Shopping
Network and the Ticketmaster Group. The plan is to integrate these assets,
leveraging programming, production capabilities and electronic commerce across
this strong distribution platform.
VIVENDI (EX.PA - $90.30 - PARIS STOCK EXCHANGE) is France's largest
environmental services company, engaged in water purification and distribution,
energy, waste management, construction and communications. The group owns 44% of
Cegetel, France's second largest telecommunications operator. Sales at Cegetel
rose 90% in 1998 to $3.4 billion following the company's launch of long distance
service and the boom in demand for mobile services. Only five percent of sales
are generated in emerging markets.
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent investment minimums. No initial
minimum is required for those establishing an Automatic Investment Plan.
Additionally, The Gabelli Global Interactive Couch Potato(R) Fund and other
Gabelli Funds are available through the no-transaction fee programs at many
major discount brokerage firms.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Asset Management 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].
MULTI-CLASS SHARES
The Gabelli Global Series Funds, Inc. will begin offering additional
classes of Fund shares in March 2000. For existing shareholders, Class AAA
shares remain no-load. At the same time, however, different types and
combinations of sales charge arrangements for Class A, Class B and Class C
shares are
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targeted to the needs of particular types of investors. Your Board of Directors
believes that the Fund should be able to provide the distribution alternatives
and investment flexibility provided by other similarly situated funds that offer
multiple classes of shares. We believe that the institution of multiple classes
of shares will enhance the potential for the Fund to attract additional
investors in a manner that could provide additional benefits for all investors
in the Fund. Again, to repeat, the offering of additional classes of Fund shares
will not diminish the ability of existing and future shareholders to purchase
and redeem Class AAA shares at net asset value.
IN CONCLUSION
The time for celebrating last year's returns is over. We are now hard at
work assessing multimedia industry trends, monitoring existing portfolio
holdings, and evaluating evolving opportunities. We enjoy the work and are
confident that our efforts should continue to produce attractive returns for
shareholders.
The Fund's daily net asset value is available in the financial press and
each evening after 6:00 PM (Eastern Time) by calling 1-800-GABELLI
(1-800-422-3554). The Fund's Nasdaq symbol is GICPX. Please call us during the
business day for further information.
Sincerely,
/s/ Signature /s/ Signature
MARC J. GABELLI IVAN ARTEAGA, CFA
Portfolio Manager Associate Portfolio Manager
January 31, 2000
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TOP TEN HOLDINGS
DECEMBER 31, 1999
-----------------
Kyocera Corp. Cable & Wireless plc
Liberty Media Group KPN NV
Softbank Corp. Sony Corp.
Canal + Audiofina
Vivendi PSINet Inc.
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NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period stated in this report. The manager's views
are subject to change at any time based on market and other conditions.
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THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999
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MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 94.9%
AUTOMOTIVE -- 1.6%
150,000 Toyota Motor Corp. ............ $ 6,930,345 $ 7,267,300
------------- --------------
BROADCASTING -- 9.5%
55,000 Ackerley Group Inc. ........... 528,733 996,875
50,000 AMFM Inc.+ .................... 3,024,000 3,912,500
119,500 Audiofina ..................... 6,619,959 9,027,480
20,000 Chris-Craft Industries Inc.+ .. 1,301,000 1,442,500
100,000 Flextech plc+ ................. 776,459 1,938,360
180,000 Granada Group plc ............. 1,654,444 1,824,481
55,000 Granite Broadcasting Corp.+ ... 533,359 556,875
10,000 Grupo Televisa SA, GDR+ ....... 450,600 682,500
83,000 Nippon Broadcasting System Inc. 6,400,509 7,230,107
10,015 NRJ SA ........................ 2,295,760 6,894,882
200,000 Publishing & Broadcasting Ltd. 1,219,471 1,527,019
600,000 Seven Network Ltd. ............ 1,652,851 2,048,280
40,000 Westwood One Inc.+ ............ 1,691,000 3,040,000
30,000 Young Broadcasting Inc., Cl. A+ 1,075,050 1,530,000
------------- --------------
29,223,195 42,651,859
------------- --------------
BUSINESS SERVICES -- 4.5%
10,000 Havas Advertising SA .......... 2,562,210 4,260,668
10,500 Publicis SA ................... 2,323,971 3,966,048
132,000 Vivendi ....................... 10,006,549 11,919,597
------------- --------------
14,892,730 20,146,313
------------- --------------
CABLE -- 2.5%
60,000 Cablevision Systems Corp.,
Cl. A+ ..................... 483,484 4,530,000
8,500 I-Cable Communications
Ltd., ADR+ ................. 229,500 213,031
30,000 MediaOne Group Inc.+ .......... 1,504,637 2,304,375
33,250 NTL Inc.+ ..................... 1,727,875 4,147,937
------------- --------------
3,945,496 11,195,343
------------- --------------
COMMUNICATIONS EQUIPMENT -- 4.2%
512,000 Furukawa Electric Co. Ltd. .... 3,537,221 7,767,446
70,000 Gemstar International
Group Ltd.+ ................ 2,790,875 4,987,500
25,000 Mannesmann AG ................. 3,442,357 6,093,864
------------- --------------
9,770,453 18,848,810
------------- --------------
COMPUTER SOFTWARE AND SERVICES -- 7.1%
27,000 Capcom Co. Ltd. ............... 1,423,175 1,440,247
40,000 CSK Corp. ..................... 1,712,369 6,498,972
14,000 Konami Co. Ltd. ............... 1,502,157 2,500,734
5,000 Korea Thrunet Co. Ltd., Cl. A+ 205,000 339,375
140,000 PSINet Inc.+ .................. 5,328,881 8,645,000
13,000 Softbank Corp. ................ 1,047,511 12,443,966
------------- --------------
11,219,093 31,868,294
------------- --------------
MARKET
SHARES COST VALUE
------ ---- -----
CONSUMER PRODUCTS -- 2.5%
1,600 Compagnie Financiere
Richemont AG, Cl. A ........ $ 2,912,360 $ 3,818,376
21,000 Nintendo Co. Ltd. ............. 3,289,779 3,490,066
115,000 Sega Enterprises Ltd. ......... 2,296,082 3,658,119
------------- --------------
8,498,221 10,966,561
------------- --------------
ELECTRONICS -- 6.0%
62,500 Kyocera Corp. ................. 6,975,328 16,210,727
35,800 Sony Corp. .................... 4,154,181 10,617,011
------------- --------------
11,129,509 26,827,738
------------- --------------
ENTERTAINMENT -- 13.3%
85,000 Canal Plus .................... 7,265,294 12,371,550
90,000 Disney (Walt) Co. ............. 2,604,214 2,632,500
100,000 EMI Group plc ................. 637,283 981,295
37,500 Fox Kids Europe NV ............ 526,652 472,149
70,000 GC Companies Inc.+ ............ 2,530,407 1,811,250
270,000 Liberty Media Group, Cl. A+ ... 3,788,234 15,322,500
100,000 Seagram Co. ................... 4,236,876 4,493,750
45,000 Time Warner Inc. .............. 2,110,365 3,259,687
120,000 TV Guide Inc., Cl. A+ ......... 2,672,438 5,160,000
100,000 USA Networks Inc.+ ............ 1,774,097 5,525,000
80,000 Viacom Inc., Cl. A+ ........... 1,416,389 4,835,000
40,000 Viacom Inc., Cl. B+ ........... 544,082 2,417,500
------------- --------------
30,106,331 59,282,181
------------- --------------
FINANCIAL SERVICES -- 0.3%
10,910 Invik and Co. AB, Cl. B ....... 1,213,762 1,295,146
------------- --------------
HEALTH CARE -- 0.3%
372,000 Tsumura & Co. ................. 1,526,691 1,456,396
------------- --------------
PUBLISHING -- 7.5%
205,500 Arnoldo Mondadori
Editore SpA ................ 3,815,982 6,520,182
46,000 Dow Jones & Co. Inc. .......... 2,406,795 3,128,000
1,000,000 Gakken Co. Ltd.+ .............. 1,758,454 1,712,832
400,000 Independent News &
Media plc, Dublin .......... 1,870,508 2,622,879
25,000 Independent News &
Media plc, London .......... 121,060 164,559
85,000 New York Times Co., Cl. A ..... 3,354,652 4,175,625
175,000 Primedia Inc.+ ................ 2,051,330 2,887,500
141,000 Schibsted ASA ................. 1,693,364 2,621,047
20,000 Scripps (E.W.) Co., Cl. A ..... 906,366 896,250
30,000 Times Mirror Co., Cl. A ....... 1,793,064 2,010,000
51,000 Tribune Co. ................... 2,246,807 2,808,188
305,000 United News & Media plc ....... 3,229,961 3,887,139
------------- --------------
25,248,343 33,434,201
------------- --------------
SATELLITE -- 1.5%
270,000 Loral Space &
Communications Ltd.+ ....... 4,803,126 6,564,375
See accompanying notes to financial statements.
10
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (Continued)
SATELLITE (Continued)
2,100 Societe Europeenne
des Satellites ............. $ 314,379 $ 298,247
------------- --------------
5,117,505 6,862,622
------------- --------------
TELECOMMUNICATIONS -- 26.3%
48,000 AT&T Canada Inc.+ ............. 917,575 1,928,646
65,000 AT&T Canada Inc., Cl. B+ ...... 1,757,300 2,616,250
50,000 AT&T Corp. .................... 2,435,625 2,537,500
110,000 Bell Atlantic Corp. ........... 6,866,556 6,771,875
95,000 BroadWing Inc.+ ............... 1,861,785 3,503,125
220,000 Cable & Wireless plc, ADR ..... 8,032,935 11,646,250
474,751 Citizens Utilities Co., Cl. B+ 4,702,476 6,735,530
625 DDI Corp. ..................... 4,908,491 8,564,158
200,000 GST Telecommunications Inc.+ .. 1,634,058 1,812,500
165 Japan Telecom Co. Ltd. ........ 1,576,390 6,621,317
55,000 KDD Corp. ..................... 5,833,612 7,622,590
85,000 Korea Telecom Corp., ADR+ ..... 3,134,126 6,353,750
110,000 KPN NV ........................ 5,382,379 10,736,280
293 Nippon Telegraph &
Telephone Corp. ............ 3,696,747 5,018,596
375,000 Portugal Telecom SA ........... 3,276,459 4,113,358
115,000 Rogers Communications
Inc., Cl. B+ ............... 764,686 2,812,262
101,500 Rogers Communications
Inc., Cl. B, ADR+ .......... 1,553,383 2,512,125
50,000 Sprint Corp. .................. 2,515,550 3,365,625
50,000 Tele Danmark A/S .............. 3,444,796 3,715,032
250,000 Telecom Italia SpA ............ 2,218,074 3,525,376
25,000 Telecom Italia SpA, ADR ....... 2,478,556 3,500,000
199,818 Telefonica SA ................. 3,024,281 4,991,405
124,000 Viatel Inc.+ .................. 2,504,152 6,649,500
------------- --------------
74,519,992 117,653,050
------------- --------------
WIRELESS COMMUNICATIONS -- 7.8%
58,700 Centennial Cellular
Corp., Cl. A+ .............. 2,538,825 4,864,762
200 NTT Mobile Communications
Network Inc. ............... 2,355,162 7,693,061
60,000 Omnipoint Corp.+ .............. 2,036,869 7,237,500
97,000 Rogers Cantel Mobile
Communications Inc., Cl. B+ 1,285,951 3,528,375
45,000 Telephone & Data
Systems Inc. ............... 2,122,823 5,670,000
15,700 Telesystem International
Wireless Inc.+ ............. 419,097 577,534
50,000 Vodafone AirTouch plc, ADR .... 654,243 2,475,000
45,000 Western Wireless
Corp., Cl. A+ .............. 685,082 3,003,750
------------- --------------
12,098,052 35,049,982
------------- --------------
TOTAL COMMON STOCKS 245,439,718 424,805,796
------------- --------------
MARKET
SHARES COST VALUE
------ ---- -----
PREFERRED STOCKS -- 0.7%
BROADCASTING -- 0.2%
350,000 Village Roadshow Ltd., Pfd. ... $ 663,999 $ 595,117
------------- --------------
PUBLISHING -- 0.5%
70,000 News Corp. Ltd., Pfd., ADR .... 1,615,522 2,340,625
------------- --------------
TOTAL PREFERRED STOCKS 2,279,521 2,935,742
------------- --------------
PRINCIPAL
AMOUNT
---------
CORPORATE BONDS -- 0.0%
ENTERTAINMENT -- 0.0%
$ 50,000 USA Networks Inc., Cv.,
7.00%, 07/01/03 ............ 44,327 52,000
U.S. GOVERNMENT OBLIGATIONS -- 5.2%
23,594,000 U.S. Treasury Bills,
5.10% to 5.49%++,
due 01/13/00 to 03/23/00 ... 23,404,565 23,413,570
------------- --------------
TOTAL
INVESTMENTS -- 100.8% $ 271,168,131 451,207,108
=============
OTHER ASSETS AND
LIABILITIES (NET) -- (0.8)% (3,438,053)
------------
NET ASSETS -- 100.0%
(12,731,417 shares outstanding) $447,769,055
============
NET ASSET VALUE,
OFFERING AND REDEMPTION
PRICE PER SHARE ............. $35.17
======
- ------------------------
For Federal tax purposes:
Aggregate cost ................................ $271,531,305
============
Gross unrealized appreciation ................. $180,771,660
Gross unrealized depreciation ................. (1,095,857)
------------
Net unrealized appreciation ................... $179,675,803
============
- ------------------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
- -------------------------- --------- ------------
North America ................................ 42.9% $193,613,117
Europe ....................................... 27.8% 125,516,090
Japan ........................................ 26.1% 117,813,644
Asia/Pacific Rim ............................. 3.0% 13,581,757
Latin America ................................ 0.2% 682,500
----- ------------
100.0% $451,207,108
===== ============
See accompanying notes to financial statements.
11
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $271,168,131) .................. $451,207,108
Cash and foreign currency,
at value (Cost $3,372,382) ............................... 3,426,301
Dividends, interest and reclaims receivable ................ 121,675
Receivable for investments sold ............................ 8,017,311
Receivable for Fund shares sold ............................ 1,854,965
Other assets ............................................... 3,493
------------
TOTAL ASSETS ............................................... 464,630,853
------------
LIABILITIES:
Payable for investments purchased .......................... 16,260,056
Payable for Fund shares redeemed ........................... 19,930
Payable for investment advisory fees ....................... 328,352
Payable for distributions fees ............................. 82,088
Payable to custodian ....................................... 18,600
Other accrued expenses ..................................... 152,772
------------
TOTAL LIABILITIES .......................................... 16,861,798
------------
NET ASSETS applicable to 12,731,417
shares outstanding ....................................... $447,769,055
============
NET ASSETS CONSIST OF:
Capital stock, at par value ................................ $ 12,731
Additional paid-in capital ................................. 268,027,169
Distributions in excess of net realized gain
on investments, futures contracts and
foreign currency transactions ............................ (363,174)
Net unrealized appreciation on investments
and foreign currency transactions ........................ 180,092,329
------------
TOTAL NET ASSETS ........................................... $447,769,055
============
NET ASSET VALUE, offering and redemption
price per share ($447,769,055 / 12,731,417
shares outstanding; 200,000,000 shares
authorized of $0.001 par value) .......................... $35.17
======
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $107,011) ............... $ 1,122,008
Interest ................................................... 226,874
------------
TOTAL INVESTMENT INCOME .................................... 1,348,882
------------
EXPENSES:
Investment advisory fees ................................... 1,861,639
Distribution fees .......................................... 465,410
Shareholder services fees .................................. 214,340
Registration fees .......................................... 102,523
Custodian fees ............................................. 89,705
Shareholder communications expenses ........................ 72,069
Legal and audit fees ....................................... 51,152
Directors' fees ............................................ 4,264
Interest expense ........................................... 61,286
Miscellaneous expenses ..................................... 16,973
------------
TOTAL EXPENSES ............................................. 2,939,361
------------
NET INVESTMENT LOSS ........................................ (1,590,479)
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments, futures
contracts and foreign currency
transactions ............................................. 18,790,050
Net change in unrealized appreciation
on investments and foreign
currency transactions .................................... 158,444,360
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS, FUTURES CONTRACTS
AND FOREIGN CURRENCY TRANSACTIONS ........................ 177,234,410
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .......................................... $175,643,931
============
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------ -----------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................................ $ (1,590,479) $ 458,939
Net realized gain on investments, futures contracts
and foreign currency transactions ..................................... 18,790,050 4,964,163
Net change in unrealized appreciation on investments
and foreign currency transactions ..................................... 158,444,360 10,723,070
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... 175,643,931 16,146,172
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ................................................... -- (448,581)
In excess of net investment income ...................................... (35,944) --
Net realized gain on investments ........................................ (17,497,659) (4,950,101)
In excess of net realized gain on investments ........................... -- (196,018)
------------ -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ..................................... (17,533,603) (5,594,700)
------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net increase in net assets from capital share transactions .............. 215,659,383 22,890,207
------------ -----------
Net increase in net assets .............................................. 373,769,711 33,441,679
NET ASSETS:
Beginning of period ..................................................... 73,999,344 40,557,665
------------ -----------
End of period ........................................................... $447,769,055 $73,999,344
============ ===========
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Global Interactive Couch Potato Fund (the "Fund"),
a series of Gabelli Global Series Funds, Inc. (the "Corporation"), was organized
on July 16, 1993 as a Maryland corporation. The Fund is a non-diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), and one of four separately managed
portfolios (collectively, the "Portfolios") of the Corporation. The Fund's
primary objective is capital appreciation. The Fund commenced investment
operations on February 7, 1994.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("Nasdaq") or traded on foreign exchanges are
valued at the last sale price on that exchange as of the close of business on
the day the securities are being valued (if there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day, except for open short positions, which are
valued at the last asked price). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. Portfolio securities traded on more
than one national securities exchange or market are valued according to the
broadest and most representative market, as determined by Gabelli Funds, LLC
(the "Adviser"). Securities and assets for which market quotations are not
readily available are valued at their fair value as determined in good faith
under procedures established by and under the general supervision of the Board
of Directors. Short term debt securities with remaining maturities of 60 days or
less are valued at amortized cost, unless the Directors determine such does not
reflect the securities' fair value, in which case these securities will be
valued at their fair value as determined by the Directors. Debt instruments
having a maturity greater than 60 days are valued at the highest bid price
obtained from a dealer maintaining an active market in those securities. Options
are valued at the last sale price on the exchange on which they are listed. If
no sales of such options have taken place that day, they will be valued at the
mean between their closing bid and asked prices.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System or with other brokers or dealers
that meet credit guidelines established by the Directors. Under the terms of a
typical repurchase agreement, the Fund takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. The Fund will always receive and
maintain securities as collateral whose market value, including accrued
interest, will be at least equal to 100% of the dollar amount invested by the
Fund in each agreement. The Fund will make payment for such securities only upon
physical delivery or upon evidence of book entry transfer of the collateral to
the account of the custodian. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to maintain the adequacy of the collateral. If the seller defaults
and the value of the collateral declines or if bankruptcy proceedings are
commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
13
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
OPTIONS. The Fund may purchase or write call or put options on securities or
indices. As a writer of put options, the Fund receives a premium at the outset
and then bears the risk of unfavorable changes in the price of the financial
instrument underlying the option. The Fund would incur a loss if the price of
the underlying financial instrument decreases between the date the option is
written and the date on which the option is terminated. The Fund would realize a
gain, to the extent of the premium, if the price of the financial instrument
increases between those dates.
As a purchaser of put options, the Fund pays a premium for the right to sell to
the seller of the put option the underlying security at a specified price. The
seller of the put has the obligation to purchase the underlying security upon
exercise at the exercise price. If the price of the underlying security
declines, the Fund would realize a gain upon sale or exercise. If the price of
the underlying security increases, the Fund would realize a loss upon sale or at
expiration date, but only to the extent of the premium paid. For the year ended
December 31, 1999, the Fund did not write options.
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin".Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuation of the
value of the contract. The daily changes in the contract are included in
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed. At December 31, 1999, there were no open futures contracts.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in value of the hedged investments. In addition, there is the risk that
the Fund may not be able to enter into a closing transaction because of an
illiquid secondary market.
SECURITIES SOLD SHORT. A short sale involves selling a security which the Fund
does not own. The proceeds received for short sales are recorded as liabilities
and the Fund records an unrealized gain or loss to the extent of the difference
between the proceeds received and the value of the open short position on the
day of determination. The Fund records a realized gain or loss when the short
position is closed out. By entering into a short sale, the Fund bears the market
risk of an unfavorable change in the price of the security sold short. Dividends
on short sales are recorded as an expense by the Fund on the ex-dividend date
and interest expense is recorded on the accrual basis.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency transactions. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate fluctuations in
the underlying prices of the Fund's portfolio securities, but it does establish
a rate of exchange that can be achieved in the future. Although forward foreign
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain/(loss) that might result
should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts.
14
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained
in United States (U.S.) dollars. Foreign currencies, investments and other
assets and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated at the exchange rate prevailing
on the respective dates of such transactions. Unrealized gains and losses, which
result from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in unrealized appreciation/depreciation on
investments and foreign currency transactions. Net realized foreign currency
gains and losses resulting from changes in exchange rates include foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, foreign currency transactions and the difference
between the amounts of interest and dividends recorded on the books of the Fund
and the amounts actually received. The portion of foreign currency gains and
losses related to fluctuation in exchange rates between the initial trade date
and subsequent sale trade date is included in realized gain/(loss) on
investments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.These
differences are primarily due to differing treatments of income and gains on
various investment securities held by the Fund, timing differences and differing
characterization of distributions made by the Fund.
For the year ended December 31, 1999, reclassifications were made to increase
distributions in excess of net investment income for $1,597,775 and decrease
distributions in excess of net realized gain on investments, futures contracts
and foreign currency transactions for $1,448,665 with an offsetting adjustment
to additional paid-in capital.
EXPENSES. Certain administrative expenses are common to, and allocated among,
the Portfolios. Such allocations are made on the basis of each Portfolio's
average net assets or other criteria directly affecting the expenses as
determined by the Adviser.
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended. As a result, a Federal income tax provision is not required.
Dividends and interest from non-U.S. sources received by the Fund are generally
subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Fund intends to undertake any procedural steps
required to claim the benefits of such treaties. If the value of more than 50%
of the Fund's total assets at the close of any taxable year consists of stocks
or securities of non-U.S. corporations, the Fund is permitted and may elect to
treat any non-U.S. taxes paid by it as paid by its shareholders.
3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed daily and paid monthly,at the
annual rate of 1.00% of the value of the Fund's average daily net assets. In
accordance
15
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
with the Advisory Agreement, the Adviser provides a continuous investment
program for the Fund's portfolio, oversees the administration of all aspects of
the Fund's business and affairs and pays the compensation of all Officers and
Directors of the Fund who are its affiliates.
4. DISTRIBUTION PLAN. The Fund's Board of Directors has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. For the year ended
December 31, 1999, the Fund incurred distribution costs payable to Gabelli &
Company, Inc., an affiliate of the Adviser, of $465,410, or 0.25% of average
daily net assets, the annual limitation under the Plan. Such payments are
accrued daily and paid monthly.
5. PORTFOLIO SECURITIEs. Purchases and sales of securities for the year ended
December 31, 1999, other than short term securities, aggregated $272,616,539 and
$116,602,714, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 1999, the
Fund paid brokerage commissions of $9,650 to Gabelli & Company, Inc. and its
affiliates.
7. LINE OF CREDIT. The Fund has access to an unsecured line of credit up to
$25,000,000 from the custodian for temporary borrowing purposes. Borrowings
under this arrangement bear interest at 0.75% above the Federal Funds rate on
outstanding balances.There were no borrowings outstanding at December 31, 1999.
The average daily amount of borrowings outstanding within the year ended
December 31, 1999 was $12,684,545, with a related weighted average interest rate
of 6.28%. The maximum amount borrowed at any time during the year ended December
31, 1999 was $25,000,000.
8. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold ........................................... 16,435,138 $ 414,468,705 7,109,075 $113,132,679
Shares issued upon reinvestment of dividends .......... 499,066 16,715,218 342,029 5,633,747
Shares redeemed ....................................... (8,558,353) (215,524,540) (5,935,470) (95,876,219)
---------- ------------- ---------- ------------
Net increase .................................... 8,375,851 $ 215,659,383 1,515,634 $ 22,890,207
========== ============= ========== ============
</TABLE>
9. NEW SHARE CLASSES. On December 7, 1998, the Board of Directors of the Fund
approved a Rule 18f-3 Multi-Class Plan relating to the creation of three
additional classes of shares of the Fund -- Class A Shares, Class B Shares and
Class C Shares (the "New Share Classes"). The existing class of shares was
redesignated as Class AAA Shares. In addition, the Board has also approved an
Amended and Restated Distribution Agreement, Rule 12b-1 plans for each of the
New Share Classes and an Amended and Restated Plan of Distribution for the
existing class of shares (Class AAA shares) to be effective upon the
commencement of the offering of the New Share Classes. On July 22, 1999,
shareholder approval permitting the Fund to offer additional classes of shares
was attained. The New Share Classes are currently not being offered to the
public.
10. SUBSEQUENT EVENT. Effective January 13, 2000, The Gabelli Global Interactive
Couch Potato(R)Fund changed its name to The Gabelli Global Growth Fund.
16
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period ............ $ 16.99 $ 14.28 $ 11.75 $ 11.72 $ 10.25
-------- -------- -------- -------- --------
Net investment income (loss) .................... (0.13) 0.11 (0.07) (0.09) (0.01)
Net realized and unrealized gain
on investments ............................... 19.77 3.98 4.97 1.56 1.84
-------- -------- -------- -------- --------
Total from investment operations ................ 19.64 4.09 4.90 1.47 1.83
-------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ........................... -- (0.11) -- -- --
In excess of net investment income .............. (0.00) (a) -- -- (1.44) (0.36)
Net realized gain on investments ................ (1.46) (1.23) (2.37) -- --
In excess of net realized gain
on investments ............................... -- (0.04) -- -- --
-------- -------- -------- -------- --------
Total distributions ............................. (1.46) (1.38) (2.37) (1.44) (0.36)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD .................. $ 35.17 $ 16.99 $ 14.28 $ 11.75 $ 11.72
======== ======== ======== ======== ========
Total return+ ................................... 116.1% 28.9% 41.7% 12.5% 17.9%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............ $447,769 $ 73,999 $ 40,558 $ 37,779 $ 31,439
Ratio of net investment income (loss)
to average net assets ........................ (0.85)% 0.66% (0.61)% (0.70)% (0.07)%
Ratio of operating expenses
to average net assets (b) .................... 1.58% 1.66% 1.78% 2.06% 2.47%
Portfiolio turnover rate ........................ 63% 105% 68% 47% 33%
</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 during the years ended December 31,
1999, 1998 and 1997. If interest expense had not been incurred, the ratios
of operating expenses to average net assets would have been 1.55%, 1.63%
and 1.64%, respectively.
See accompanying notes to financial statements.
17
<PAGE>
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
REPORT OF GRANT THORNTON LLP, INDEPENDENT AUDITORS
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Shareholders and Board of Directors of
The Gabelli Global Interactive Couch Potato Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Gabelli Global Interactive Couch Potato
Fund (one of the series constituting Gabelli Global Series Funds, Inc.) as of
December 31, 1999, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended and financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1999 by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Gabelli Global Interactive Couch Potato Fund of Gabelli Global Series Funds,
Inc. at December 31, 1999, and the results of its operations, the changes in its
net assets and the financial highlights for the respective stated periods, in
conformity with accounting principles generally accepted in the United States.
New York, New York
February 11, 2000 /s/ Grant Thornton LLP
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1999 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the fiscal year ended December 31, 1999, the Fund paid to shareholders, on
December 27, 1999, an ordinary income dividend (comprised of net investment
income and short term capital gains) totaling $0.865 per share and long term
capital gains totaling $0.60 per share. For the fiscal year ended December 31,
1999, 7.54% of the ordinary income dividend qualifies for the dividend received
deduction available to corporations.
U.S. GOVERNMENT INCOME:
The percentage of the ordinary income dividend paid by the Fund during fiscal
year 1999 which was derived from U.S. Treasury securities was 2.32%. Such income
is exempt from state and local tax in all states. However, many states,
including New York and California, allow a tax exemption for a portion of the
income earned only if a mutual fund has invested at least 50% of its assets at
the end of each quarter of the Fund's fiscal year in U.S. Government securities.
The Gabelli Global Interactive Couch Potato Fund did not meet this strict
requirement in 1999. Due to the diversity in state and local tax law, it is
recommended that you consult your personal tax advisor as to the applicability
of the information provided to your specific situation.
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18
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GABELLI FAMILY OF FUNDS
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GABELLI ASSET FUND--------------------------------------------------------------
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI GROWTH FUND-------------------------------------------------------------
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: HOWARD F. WARD, CFA
GABELLI WESTWOOD EQUITY FUND----------------------------------------------------
Seeks to invest primarily in the common stock of seasoned companies believed to
have proven records and above average historical earnings growth. The Fund's
primary objective is capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: SUSAN M. BYRNE
GABELLI SMALL CAP GROWTH FUND---------------------------------------------------
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $500 million) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI BLUE CHIP VALUE FUND----------------------------------------------------
Seeks long-term growth of capital through investment primarily in the common
stocks of well-established, high quality companies that have market
capitalizations of greater than $5 billion. (NO-LOAD)
PORTFOLIO MANAGER: BARBARA MARCIN, CFA
GABELLI WESTWOOD SMALLCAP EQUITY FUND-------------------------------------------
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $1 billion or less. The Fund's primary objective is long-term capital
appreciation. (NO-LOAD)
PORTFOLIO MANAGER: LYNDA CALKIN, CFA
GABELLI WESTWOOD INTERMEDIATE BOND FUND-----------------------------------------
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return. (NO-LOAD)
PORTFOLIO MANAGER: PATRICIA FRAZE
GABELLI EQUITY INCOME FUND------------------------------------------------------
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays quarterly dividends and seeks a high level of total return with an
emphasis on income. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI WESTWOOD BALANCED FUND--------------------------------------------------
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(NO-LOAD)
PORTFOLIO MANAGERS: SUSAN M. BYRNE & PATRICIA FRAZE
GABELLI WESTWOOD MIGHTY MITES[SERVICE MARK] FUND--------------------------------
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(NO-LOAD)
TEAM MANAGED: MARIO J. GABELLI, CFA,
MARC J. GABELLI, LAURA K. LINEHAN AND
WALTER K. WALSH
GABELLI VALUE FUND--------------------------------------------------------------
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. MAX. SALES CHARGE:
5 1/2%
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI UTILITIES FUND----------------------------------------------------------
Seeks to provide a high level of total return through a combination of capital
appreciation and current income. (NO-LOAD)
PORTFOLIO MANAGER: TIMOTHY O'BRIEN, CFA
GABELLI ABC FUND----------------------------------------------------------------
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI MATHERS FUND------------------------------------------------------------
Seeks long-term capital appreciation in various market conditions without
excessive risk of capital loss. (NO-LOAD)
PORTFOLIO MANAGER: HENRY VAN DER EB, CFA
GABELLI U.S. TREASURY MONEY MARKET FUND-----------------------------------------
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI
GABELLI CASH MANAGEMENT SHARES OF
THE TREASURER'S FUND------------------------------------------------------------
Three money market portfolios designed to generate superior returns without
compromising portfolio safety. U.S. Treasury Money Market seeks to invest in
U.S. Treasury bills, notes and bonds. Tax Exempt Money Market seeks to invest in
municipal securities. Domestic Prime Money Market seeks to invest in prime
quality, domestic money market instruments. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI
AN INVESTMENT IN THE ABOVE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS.
GLOBAL SERIES
GABELLI GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world -
targeting undervalued companies with strong earnings and cash flow dynamics.
The Fund's primary objective is capital appreciation. (NO-LOAD)
TEAM MANAGED: MARIO J. GABELLI, CFA,
MARC J. GABELLI AND IVAN ARTEAGA, CFA
GABELLI GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are
convertible into common stock of foreign and domestic companies. The Fund's
primary objective is total return through a combination of current income and
capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: HART WOODSON
GABELLI GLOBAL GROWTH FUND
Seeks capital appreciation through a disciplined investment program focusing
on the globalization and interactivity of the world's marketplace. The Fund
invests in companies at the forefront of accelerated growth. The Fund's
primary objective is capital appreciation. (NO-LOAD)
PORTFOLIO MANAGER: MARC J. GABELLI
GABELLI GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in
revenues and earnings and potential for above average capital appreciation or
are undervalued. The Fund's primary objective is capital appreciation.
(NO-LOAD)
PORTFOLIO MANAGERS: MARC J. GABELLI
AND CAESAR BRYAN
GABELLI GOLD FUND---------------------------------------------------------------
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial and political factors. (NO-LOAD)
PORTFOLIO MANAGER: CAESAR BRYAN
GABELLI INTERNATIONAL GROWTH FUND-----------------------------------------------
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (NO-LOAD)
PORTFOLIO MANAGER: CAESAR BRYAN
THE SIX FUNDS ABOVE INVEST IN FOREIGN SECURITIES WHICH INVOLVES RISKS NOT
ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY
FLUCTUATION, ECONOMIC AND POLITICAL RISKS. THE FUNDS LISTED ABOVE ARE
DISTRIBUTED BY GABELLI & COMPANY, INC.
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TO RECEIVE A PROSPECTUS, CALL 1-800-GABELLI (422-3554). THE
PROSPECTUS GIVES A MORE COMPLETE DESCRIPTION OF THE FUND,
INCLUDING FEES AND EXPENSES. READ THE PROSPECTUS CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
VISIT OUR WEBSITE AT:
WWW.GABELLI.COM
OR, CALL:
1-800-GABELLI
1-800-422-3554 [BULLET] 914-921-5100 [BULLET]
FAX: 914-921-5118 [BULLET] [email protected]
ONE CORPORATE CENTER, RYE, NEW YORK 10580
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Gabelli Global Series Funds, Inc.
THE GABELLI GLOBAL INTERACTIVE COUCH POTATO(R) FUND
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
FAX: 1-914-921-5118
HTTP://www.gabelli.com
E-MAIL: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Karl Otto Pohl
CHAIRMAN AND CHIEF FORMER PRESIDENT
INVESTMENT OFFICER DEUTSCHE BUNDESBANK
GABELLI ASSET MANAGEMENT INC.
Felix J. Christiana Werner J. Roeder, MD
FORMER SENIOR VICE PRESIDENT MEDICAL DIRECTOR
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
SENIOR VICE PRESIDENT
GABELLI & COMPANY, INC.
OFFICERS AND PORTFOLIO MANAGERS
Mario J. Gabelli, CFA Marc J. Gabelli
PRESIDENT AND CHIEF PORTFOLIO MANAGER
INVESTMENT OFFICER
Bruce N. Alpert James E. McKee
VICE PRESIDENT AND TREASURER SECRETARY
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
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This report is submitted for the general information of the shareholders of The
Gabelli Global Interactive Couch Potato(R) Fund. It is not authorized for
distribution to prospective investors unless preceded or accompanied by an
effective prospectus.
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GAB442Q499SR
[PHOTO OF MARIO J. GABELII OMITTED]
GLOBAL
GROWTH
GABELLI
GLOBAL INTERACTIVE
COUCH POTATO(R) FUND
ANNUAL REPORT
DECEMBER 31, 1999
