[FLAG GRAPHICS OMITTED]
GABELLI GLOBAL OPPORTUNITY FUND
ANNUAL REPORT
DECEMBER 31, 1999
[PHOTO OF MARC GABELLI & CAESAR BRYAN OMITTED]
MARC J. GABELLI AND CAESAR BRYAN
PORTFOLIO MANAGERS
TO OUR SHAREHOLDERS,
Worldwide equity markets rode a wave of prosperity through the fourth
quarter of 1999. Following the lead of the American market indicators,
particularly the Nasdaq Index, markets around the world continued their
rebounds. Europe as a whole is in a good position, as companies and countries on
the continent finally appear to be getting the hang of free-market economic
tactics. Japan is in its best position in years. Emerging markets look strong.
The U.S. economy, which may have some investors worried, remains strong. The
Gabelli Global Opportunity Fund profited from all of these positive dynamics in
1999, posting outstanding returns and leaving itself in a strong position
looking ahead to 2000.
INVESTMENT PERFORMANCE
For the fourth quarter ended December 31, 1999, The Gabelli Global
Opportunity Fund's (the "Fund") total return was 38.92%. 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 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 79.21% 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. Since inception on May 11, 1998
through December 31, 1999, the Fund had a cumulative total return of 97.30%,
which equates to an average annual total return of 51.19%.
<PAGE>
INVESTMENT RESULTS (a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quarter
-----------------------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
<C> <S> <C> <C> <C> <C> <C>
1999: Net Asset Value ....... $11.47 $13.00 $13.61 $18.03 $18.03
Total Return .......... 8.7% 13.3% 4.7% 38.9% 79.2%
- ------------------------------------------------------------------------------------------------------------
1998: Net Asset Value ....... -- $10.23 $9.69 $10.55 $10.55
Total Return .......... -- 2.3%(b) (5.3)% 13.7% 10.1%(b)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Returns - December 31, 1999 (a)
----------------------------------------------
1 Year ....................................................... 79.21%
Life of Fund (b) ............................................. 51.19%
- --------------------------------------------------------------------------------
Dividend History
- -------------------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 27, 1999 $0.850 $17.48
December 28, 1998 $0.450 $10.34
(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 May 11, 1998.
Note: Investing in foreign securities involves risks not ordinarily associated
with investments in domestic issues, including currency fluctuation, economic
and political risks.
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI GLOBAL OPPORTUNITY 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
OPPORTUNITY FUND FUND AVERAGE WORLD FREE INDEX
5/11/98 $10,000 $10,000 $10,000
12/31/98 11,009 9,922 10,613
12/31/99 19,729 13,459 13,501
* PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
2
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OUR INVESTMENT OBJECTIVE
The Gabelli Global Opportunity Fund seeks to find investment opportunities
globally. We strive to identify stocks that are attractively priced relative to
their intrinsic value. The economies of the world have entered a period of what
we envision to be a long term sustainable growth never experienced during any
other period of history. With the end of the "Cold War" and the transition from
closed to open market economies, the global arena for market opportunities has
expanded and should continue to grow. The continued development of the free
trade zones of North America and South America, Europe, and the Asia Pacific
region should add to this long term expansion.
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
[Pie chart omitted--plot points as follows]
Europe 38.9%
United States 21.0%
Japan 18.1%
Canada 5.3%
Asia/Pacific Rim 3.0%
South Africa 1.1%
Cash 12.6%
COMMENTARY
In 1999, multimedia stocks skyrocketed. Every industry group sector in our
portfolio performed well. We did a solid job picking stocks. However, we must
also credit widespread investor recognition of the exceptional prospects for
multimedia businesses and global investing 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.
3
<PAGE>
Economic growth is gathering steam in Europe with improvements in various
indicators of both business and consumer confidence. Most pleasing is the
apparent improvement in Germany, the largest European economy and a recent
laggard. The German market was given a shot in the arm at the end of the year
when the Government announced plans to remove the capital gains tax of 50% on
corporate equity holdings. This plan, if it goes into effect, will have a major
impact on the German economy. Following World War II, German banks and insurance
companies financed, and took major stakes in, many large companies. However,
these stakes became static and prevented a reorganization of corporate Germany.
We believe this proposal is a major step forward and will result in an
improvement of the competitive position of the German economy.
The Euro has now been in existence for one year. Its first year of life
has largely been successful, despite its fall from about $1.18 per euro to just
over $1.00 per euro during the year. This fall has helped improve Euroland's
competitive position and we expect some recovery this year. But, more
importantly, the introduction of the Euro is a necessary step to the creation of
a single market. Companies in Europe are now busily consolidating various
sectors. Merger and acquisition activity in Europe was at record levels in 1999,
and we expect more of the same in 2000. Merger and acquisition activity will
provide a solid support for equity markets.
For example, the telecommunications sector is likely to consolidate
further. At year-end, Vodafone's hostile bid for Mannesmann was just warming up.
This combination, should it occur, would create the world's largest mobile phone
company. As a result, we expect many of the smaller players in Europe will be
purchased by a handful of larger companies seeking scale. We also expect further
merger activity in many other industry sectors, particularly pharmaceuticals,
media and broadcasting, and financial services.
Japan is the only major industrialized country that is not experiencing
rising interest rates. This is because their economy remains precariously
positioned despite quite healthy growth earlier in the year. The Bank of Japan
remains concerned that the economy can not withstand higher interest rates and
has therefore committed itself to a near zero percent interest rate policy.
The Tokyo equity market was a profitable place for investors in 1999, but
strong performance was generated by a fairly narrow group of mostly technology
and telecommunications companies. Valuations in these sectors are stretched, and
for the Japanese market to continue to do well we would expect to see some
broadening in the market.
Across the board, equity valuations are extended relative to their history
and to bond yields. Markets have little room for disappointment. Although
interest rates have risen, equity markets appear to believe this reflects a
return to normalcy following the Asian meltdown rather than a reaction to higher
inflation. Inflation must continue to behave or central banks will have to
tighten interest rates further. Free trade, global competition and advances in
technology have kept consumer prices in check and labor shortages have appeared.
Pricing in many industries is still very tight - just ask a product manager at a
consumer products company.
Looking ahead, we will continue to emphasize companies that have some
pricing power, a differential product or franchise and growth potential. With
markets probably experiencing greater
4
<PAGE>
volatility, we believe valuations will become increasingly important. We will
continue to pay close attention to levels of valuation and remain extremely
skeptical of valuations based on multiples of sales closer in number to my age
than my child's. Also, in a more challenging environment, we will remain very
diversified by stock sector and country.
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.
BCE INC. (BCE - $90.1875 - NYSE) is Canada's global communications company. BCE
recently completed a major transaction with Ameritech (AIT - $67.1875 - NYSE).
Under the agreement, BCE sold 20% of Bell Canada, its wholly-owned Canadian
telecommunications subsidiary, to Ameritech. BCE also owns strategic stakes in
Nortel Networks (NT - $101.00 - NYSE), Teleglobe (TGO - $22.6875 - NYSE), BCE
Emergis and CGI Group. One share of BCE provides ownership of 0.84 shares of
Nortel Networks. The company's positions in satellites, network operations,
information technology, media and e-commerce are expected to provide growth for
the company.
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.
KDD CORP. (9431.T - $138.59 - TOKYO STOCK EXCHANGE) provides international
telecommunications services in Japan. The company's services include telephone,
telex, circuit leasing, data communications, and data transfer. KDD completed
the JIH (a nationwide fiber-optic network) in the spring of this year,
augmenting the existing fiber-optic network it inherited from its merger with
TWJ, forming the most extensive fiber-optic network in the country. KDD is
reportedly discussing a joint venture with American providers Qwest
Communications and SBC.
5
<PAGE>
JAPAN TELECOM CO. LTD. (9434.T - $40,129.20 - TOKYO STOCK EXCHANGE) provides
domestic long distance telephone and leased line services through its fiber
optic cable network connected to local telephone exchanges owned by Nippon
Telegraph & Telephone and local common carriers. The company also participates
in other telecommunications-related businesses such as cellular telephone
services. British Telecommunications and AT&T have each recently taken a
significant stake in Japan Telecom and Vodafone AirTouch is a partner in its
cellular operations.
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.
NINTENDO CO. LTD. (7974.T - $166.19 - TOKYO STOCK EXCHANGE) is best known for
its hand-held game machine called Game Boy. Nintendo is expected to soon
introduce its next generation Game Boy, which is likely to have interactive
capabilities. In addition, the company is also expected to introduce a
replacement for the Nintendo 64 system to be called Dolphin. Nintendo is the
leading electronic games company with a very strong balance sheet and a large
amount of net cash.
OMNIPOINT CORP. (OMPT - $120.625 - NASDAQ) is a leading personal communications
services ("PCS") carrier in the U.S., with licenses covering major metropolitan
areas containing nearly 100 million people. On June 23, 1999, Omnipoint agreed
to be acquired by VoiceStream Wireless (VSTR - $142.3125 - Nasdaq) for 0.825
shares of VoiceStream and $8.00 cash per share of OMPT. The combined company
will have PCS licenses covering about 190 million points of presence ("POPs")
and will become a major PCS carrier.
SONY CORP. (6758.T - $296.57 - 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
6
<PAGE>
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.
TOKYO BROADCASTING SYSTEM INC. (9401.T - $33.87 - TOKYO STOCK EXCHANGE) is a
media company, nationally broadcasting television and radio programs. The
company is active in television program production, film production, recorded
music, and both domestic and international cable television programming. Tokyo
Broadcasting also produces and sells software, videotapes, CD-ROMs, and DVDs.
The company is in the process of launching digital satellite broadcasting in a
joint venture with Sumitomo and is also considering spinning off its radio and
other production divisions.
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 Opportunity 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 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.
7
<PAGE>
IN CONCLUSION
Looking back on 1999, it is safe to say that the economy, by all
indicators, was blazing away full speed ahead. Being value investors, however,
we like to point out that although the markets were up, losers outnumbered
winners and the tremendous gains were fueled by a narrow group of outstanding
stocks. There are, therefore, significant numbers of undervalued stocks in the
global markets, and our challenge in 2000 will be to find them. After our
tremendous year in 1999 it would be imprudent if not impossible to predict a
repeat next year. Our investment approach will not change, however, and we feel
confident that we will be able to find stocks with good growth potential selling
at bargain prices. Only time will tell.
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 GABOX. Please call us during the
business day for further information.
Sincerely,
/s/ signature /s/ signature
MARC J. GABELLI CAESAR BRYAN
Portfolio Manager Portfolio Manager
/s/ signature
IVAN ARTEAGA, CFA
Associate Portfolio Manager
January 31, 2000
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TOP TEN HOLDINGS
DECEMBER 31, 1999
-----------------
Invik & Co. AB Kyocera Corp.
Canal + Merrill Lynch & Co.
Omnipoint Corp. Gruppo Editoriale L'Espresso SpA
KDD Corp. BroadWing Inc.
Japan Telecom Co. Ltd. Citizens Utilities Co.
- --------------------------------------------------------------------------------
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.
8
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THE GABELLI GLOBAL OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 83.9%
AEROSPACE -- 0.1%
3,002 British Aerospace plc .......... $ 11,071 $ 19,878
----------- -----------
AUTOMOTIVE -- 0.7%
2,700 General Motors Corp. ........... 184,985 196,256
----------- -----------
BROADCASTING -- 7.3%
3,650 Audiofina ...................... 167,784 275,735
15 Fuji Television Network Inc. ... 87,312 205,540
29,800 Granada Group plc .............. 270,491 302,053
15,000 Mediaset SpA ................... 144,234 233,279
1,000 Nippon Broadcasting
System Inc. ................. 80,854 87,110
500 NRJ SA ......................... 105,633 344,228
30,000 Publishing &
Broadcasting Ltd. ........... 182,322 229,053
1,000 Spanish Broadcasting
System Inc.+ ................ 20,000 40,250
7,000 Tokyo Broadcasting
System Inc. ................. 100,702 237,056
----------- -----------
1,159,332 1,954,304
----------- -----------
BUILDING AND CONSTRUCTION -- 1.1%
10,300 CRH plc ........................ 199,108 221,811
8,000 Sekisui House Ltd. ............. 87,169 70,862
----------- -----------
286,277 292,673
----------- -----------
BUSINESS SERVICES -- 3.7%
5,000 Asatsu-DK Inc. ................. 149,958 337,673
150 PubliGroupe SA ................. 146,142 148,370
3,878 Vivendi ........................ 243,975 350,138
2,200 Young & Rubicam Inc. ........... 67,069 155,650
----------- -----------
607,144 991,831
----------- -----------
CABLE -- 2.7%
2,000 MediaOne Group Inc.+ ........... 110,287 153,625
1,750 NTL Inc.+ ...................... 70,362 218,312
5,000 UnitedGlobalCom Inc., Cl. A+ ... 64,063 353,125
----------- -----------
244,712 725,062
----------- -----------
COMMUNICATIONS EQUIPMENT -- 4.2%
18,000 Furukawa Electric Co. Ltd. ..... 146,739 273,074
4,300 GN Store Nord A/S .............. 156,645 212,413
1,000 Mannesmann AG .................. 154,879 243,755
7,000 Marconi plc .................... 52,374 123,700
4,900 Telelogic AB+ .................. 170,527 260,320
----------- -----------
681,164 1,113,262
----------- -----------
MARKET
SHARES COST VALUE
------ ---- ------
COMPUTER SOFTWARE AND SERVICES -- 0.7%
3,000 Aspiro Information AB .......... $ 106,923 $ 125,176
1,000 Korea Thrunet Co. Ltd., Cl. A+ . 18,000 67,875
----------- -----------
124,923 193,051
----------- -----------
CONSUMER PRODUCTS -- 3.7%
1,220 Christian Dior SA .............. 173,856 302,296
100 Compagnie Financiere
Richemont AG ................ 166,456 238,648
4,000 KAO Corp. ...................... 84,729 114,124
1,000 Nintendo Co. Ltd. .............. 179,962 166,194
5,000 Sega Enterprises Ltd. .......... 107,221 159,049
----------- -----------
712,224 980,311
----------- -----------
CONSUMER SERVICES -- 0.3%
5,000 Rollins Inc. 85,250 75,000
----------- -----------
ELECTRONICS -- 3.6%
1,500 Kyocera Corp. .................. 154,558 389,057
1,000 Sony Corp. ..................... 130,637 296,565
1,000 Sony Corp., ADR ................ 113,113 284,750
----------- -----------
398,308 970,372
----------- -----------
ENERGY AND UTILITIES -- 1.0%
2,000 BP Amoco plc, ADR .............. 93,157 118,625
2,500 Schlumberger Ltd. .............. 123,096 140,625
484 Transocean Sedco Forex Inc. .... 14,726 16,305
----------- -----------
230,979 275,555
----------- -----------
ENTERTAINMENT -- 5.7%
3,700 Canal Plus ..................... 243,995 538,526
6,088 Liberty Media Group, Cl. A+ .... 118,259 345,494
50,000 Rank Group plc ................. 199,840 159,511
4,500 Seagram Co. .................... 194,225 202,219
5,000 USA Networks Inc.+ ............. 166,080 276,250
----------- -----------
922,399 1,522,000
----------- -----------
EQUIPMENT AND SUPPLIES -- 0.8%
4,000 THK Co. Ltd. ................... 85,116 161,691
4,000 Toyo Seikan Kaisha Ltd. ........ 81,824 57,943
----------- -----------
166,940 219,634
----------- -----------
FINANCIAL SERVICES -- 11.7%
800 Allianz AG ..................... 271,239 268,734
2,000 AXA-UAP ........................ 285,927 278,807
2,000 Banque Nationale de Paris ...... 168,626 184,528
3,000 Citigroup Inc. ................. 141,195 166,687
5,000 Invik and Co. AB, Cl. B ........ 359,167 593,559
25,000 Mediolanum SpA ................. 200,323 327,356
See accompanying notes to financial statements.
9
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THE GABELLI GLOBAL OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (Continued)
FINANCIAL SERVICES (Continued)
5,000 Mellon Financial Corp. ......... $ 173,822 $ 170,312
4,500 Merrill Lynch & Co. Inc. ....... 353,912 375,750
900 Morgan (J.P.) & Co. Inc. ....... 91,742 113,962
17,000 Nikko Securities Co. Ltd. ...... 168,537 215,141
10,000 Prudential plc ................. 163,881 197,067
6,500 Schroders plc .................. 144,491 130,823
10,000 Skandinaviska Enskilda
Banken, Cl. A ............... 135,349 101,081
----------- -----------
2,658,211 3,123,807
----------- -----------
FOOD AND BEVERAGE -- 0.5%
25,800 Foster's Brewing Group Ltd. .... 69,207 74,018
5,100 Whitman Corp. .................. 97,736 68,531
----------- -----------
166,943 142,549
----------- -----------
HEALTH CARE -- 3.1%
240 Novartis AG .................... 374,805 352,396
19 Roche Holding AG ............... 226,415 225,523
3,500 Sanofi Synthelabo SA ........... 161,020 145,739
8,000 SmithKline Beecham plc ......... 111,850 102,087
----------- -----------
874,090 825,745
----------- -----------
HOTELS AND GAMING -- 0.7%
13,000 Mirage Resorts Inc.+ ........... 211,425 199,062
----------- -----------
METALS AND MINING -- 3.3%
3,000 Anglogold Ltd., ADR ............ 67,525 77,062
20,000 Antofagasta Holdings plc ....... 109,477 140,047
5,000 Barrick Gold Corp. ............. 98,475 88,437
8,300 Harmony Gold
Mining Co. Ltd. ............. 37,858 53,266
22,800 Harmony Gold
Mining Co. Ltd., ADR ........ 130,000 143,213
3,500 Newmont Mining Corp. ........... 74,706 85,750
6,000 Placer Dome Inc. ............... 75,363 64,500
2,700 Stillwater Mining Co.+ ......... 49,506 86,063
25,000 WMC Ltd. ....................... 115,458 137,865
----------- -----------
758,368 876,203
----------- -----------
PUBLISHING -- 5.5%
10,000 Arnoldo Mondadori
Editore SpA+ ................ 157,737 317,284
32,067 Gruppo Editoriale
L'Espresso SpA .............. 87,079 371,117
34,000 Independent News and
Media plc ................... 160,733 222,945
7,000 News Corp. Ltd., ADR ........... 202,206 267,750
MARKET
SHARES COST VALUE
------ ---- ------
8,000 Schibsted ASA .................. $ 95,193 $ 148,712
12,000 United News & Media plc ........ 122,561 152,937
----------- -----------
825,509 1,480,745
----------- -----------
RETAIL -- 1.1%
2,000 Ito Yokado Co. Ltd. ............ 135,479 217,285
25,000 Sagami Co. Ltd. ................ 68,443 57,502
1,000 Tsutsumi Jewelry Co. Ltd ....... 27,759 27,405
----------- -----------
231,681 302,192
----------- -----------
SATELLITE -- 0.9%
1,600 Societe Europeenne
des Satellites .............. 239,511 227,236
----------- -----------
TELECOMMUNICATIONS -- 16.6%
3,000 BCE Inc. ....................... 147,838 270,563
3,500 Bell Atlantic Corp. ............ 212,725 215,469
10,000 BroadWing Inc.+ ................ 228,313 368,750
6,250 Cable & Wireless plc, ADR ...... 230,134 330,859
25,180 Citizens Utilities Co., Cl. B+ . 262,793 357,241
15 DDI Corp. ...................... 109,860 205,540
12,500 Electric Lightwave Inc., Cl. A+ 138,000 234,375
5,125 Global Crossing Ltd.+ .......... 82,313 256,250
10 Japan Telecom Co. Ltd. ......... 93,228 401,292
2,000 Jazztel plc, ADR+ .............. 34,894 130,250
3,000 KDD Corp. ...................... 206,970 415,778
15,000 Manitoba Telecom
Services Inc. ............... 190,152 223,415
16 Nippon Telegraph &
Telephone Corp. ............. 153,299 274,053
10,500 Rogers Communications
Inc., Cl. B, ADR+ ........... 170,881 259,875
1,500 Telecom Italia SpA, ADR ........ 140,318 210,000
3,714 Telefonica SA, ADR ............. 162,549 292,710
----------- -----------
2,564,267 4,446,420
----------- -----------
WIRELESS COMMUNICATIONS -- 4.9%
3,500 Omnipoint Corp.+ ............... 62,155 422,188
30,000 Telecom Italia Mobile
SpA, ADR .................... 178,389 335,112
2,300 Telephone & Data
Systems Inc. ................ 86,665 289,800
7,000 Telesystem International
Wireless Inc.+ .............. 186,859 257,499
----------- -----------
514,068 1,304,599
----------- -----------
TOTAL COMMON STOCKS ........... 14,859,781 22,457,747
----------- -----------
See accompanying notes to financial statements.
10
<PAGE>
THE GABELLI GLOBAL OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- ------
PREFERRED STOCK -- 0.0%
AEROSPACE -- 0.0%
948 British Aerospace plc, Pfd. .... $ 1,512 $ 1,508
----------- -----------
PRINCIPAL
AMOUNT
---------
U.S. GOVERNMENT OBLIGATIONS -- 12.1%
$3,270,000 U.S. Treasury Bills,
5.04% to 5.42%++,
due 01/13/00 to 03/30/00 .... 3,247,370 3,248,000
----------- -----------
TOTAL
INVESTMENTS -- 96.0% ........ $18,108,663 25,707,255
===========
OTHER ASSETS AND
LIABILITIES (NET) -- 4.0% ................ 1,071,967
-----------
NET ASSETS -- 100.0%
(1,485,599 shares outstanding) ........... $26,779,222
===========
NET ASSET VALUE,
OFFERING AND REDEMPTION
PRICE PER SHARE .......................... $18.03
======
VALUE
-----
- ----------------
For Federal tax purposes:
Aggregate cost .............................. $18,108,853
===========
Gross unrealized appreciation ............... $ 7,898,450
Gross unrealized depreciation ............... (300,048)
-----------
Net unrealized appreciation ................. $ 7,598,402
===========
- ----------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depositary Receipt.
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
- -------------------------- ------ -----------
Europe ................................. 38.9% $10,006,879
North America .......................... 38.9% 9,995,592
Japan .................................. 18.1% 4,654,682
Asia/Pacific Rim ....................... 3.0% 776,561
South Africa ........................... 1.1% 273,541
----- -----------
100.0% $25,707,255
===== ===========
See accompanying notes to financial statements.
11
<PAGE>
THE GABELLI GLOBAL OPPORTUNITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $18,108,663) ................. $25,707,255
Cash and foreign currency,
at value (Cost $1,041,353) ............................. 1,082,051
Dividends, interest and reclaims receivable .............. 10,566
Receivable for investments sold .......................... 216,000
Receivable for Fund shares sold .......................... 9,000
Receivable from adviser .................................. 32,300
Deferred organizational expenses ......................... 26,651
Other assets ............................................. 2,850
-----------
TOTAL ASSETS ............................................. 27,086,673
-----------
LIABILITIES:
Payable for investments purchased ........................ 146,142
Payable for investment advisory fees ..................... 77,621
Payable for distribution fees ............................ 4,886
Payable to custodian ..................................... 2,400
Payable to adviser ....................................... 40,000
Other accrued expenses ................................... 36,402
-----------
TOTAL LIABILITIES ........................................ 307,451
-----------
NET ASSETS applicable to 1,485,599
shares outstanding ..................................... $26,779,222
===========
NET ASSETS CONSIST OF:
Capital stock, at par value .............................. 1,486
Additional paid-in capital ............................... 19,134,213
Accumulated net realized gain on investments
and foreign currency transactions ...................... 4,837
Net unrealized appreciation on investments
and foreign currency transactions ...................... 7,638,686
-----------
TOTAL NET ASSETS ......................................... $26,779,222
===========
NET ASSET VALUE, offering and redemption
price per share ($26,779,222 / 1,485,599
shares outstanding; 200,000,000 shares
authorized of $0.001 par value) ........................ $18.03
======
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $10,901) .............. $ 128,214
Interest ................................................. 34,707
-----------
TOTAL INVESTMENT INCOME .................................. 162,921
-----------
EXPENSES:
Investment advisory fees ................................. 116,948
Distribution fees ........................................ 29,287
Legal and audit fees ..................................... 18,814
Custodian fees ........................................... 15,869
Shareholder communications expenses ...................... 15,093
Registration fees ........................................ 12,219
Organizational expenses .................................. 8,045
Shareholder services fees ................................ 6,716
Directors' fees .......................................... 481
Interest expense ......................................... 3,868
Miscellaneous expenses ................................... 3,838
-----------
TOTAL EXPENSES ........................................... 231,178
-----------
Less: Expense reimbursement .............................. (110,241)
-----------
TOTAL NET EXPENSES ....................................... 120,937
-----------
NET INVESTMENT INCOME .................................... 41,984
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments and
foreign currency transactions ......................... 1,126,064
Net change in unrealized appreciation
on investments and foreign currency
transactions .......................................... 7,506,982
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS ................................. 8,633,046
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ....................................... $ 8,675,030
===========
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998 +
----------------- -------------------
<S> <C> <C>
OPERATIONS:
Net investment income ............................................ $ 41,984 $ 48,310
Net realized gain on investments and foreign currency transactions 1,126,064 190,596
Net change in unrealized appreciation on investments
and foreign currency transactions .............................. 7,506,982 131,704
----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. 8,675,030 370,610
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............................................ -- (48,310)
In excess of net investment income ............................... -- (31,596)
Net realized gain on investments ................................. (1,126,064) (159,812)
In excess of net realized gain on investments .................... (36,335) --
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .............................. (1,162,399) (239,718)
----------- ----------
CAPITAL SHARE TRANSACTIONS:
Net increase in net assets from capital share transactions ....... 13,400,561 5,735,138
----------- ----------
NET INCREASE IN NET ASSETS ....................................... 20,913,192 5,866,030
NET ASSETS:
Beginning of period .............................................. 5,866,030 --
----------- ----------
End of period .................................................... $26,779,222 $5,866,030
=========== ==========
</TABLE>
- ----------
+ From commencement of investment operations on May 11, 1998 through
December 31, 1998.
See accompanying notes to financial statements.
12
<PAGE>
THE GABELLI GLOBAL OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Global Opportunity 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
May 11, 1998.
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 OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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.
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 decrease
accumulated undistributed net investment income for $42,693 with an offsetting
adjustment to accumulated undistributed net realized gain on investments and
foreign currency transactions.
14
<PAGE>
The Gabelli Global Opportunity Fund
Notes to Financial Statements (Continued)
================================================================================
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 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. The Adviser
voluntarily agreed to reimburse expenses of the Fund to the extent necessary to
maintain the annualized total operating expenses of the Fund (exclusive of
interest expense) at 1.00% of the value of the Fund's average daily net assets.
For the year ended December 31, 1999, the Adviser reimbursed the Fund in the
amount of $110,241.
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 $29,287, or 0.25% of average
daily net assets, the annual limitation under the Plan. Such payments are
accrued daily and paid monthly.
5. ORGANIZATIONAL EXPENSES. The organizational expenses of the Fund are being
amortized on a straight-line basis over a period of 60 months.
6. PORTFOLIO SECURITIES. Purchases and sales of securities for the year ended
December 31, 1999, other than short term securities, aggregated $13,775,200 and
$5,243,181, respectively.
7. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 1999, the
Fund paid brokerage commissions of $445 to Gabelli & Company, Inc. and its
affiliates.
15
<PAGE>
THE GABELLI GLOBAL OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
8. 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 $588,953, with a related weighted average interest rate of
5.49%. The maximum amount borrowed at any time during the year ended December
31, 1999 was $720,000.
9. CAPITAL STOCK TRANSACTIONS. Transactions in shares of capital stock were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold ................................ 1,044,063 $14,882,079 2,576,620 $ 26,801,277
Shares issued upon reinvestment of dividends 64,561 1,128,468 22,028 227,773
Shares redeemed ............................ (179,073) (2,609,986) (2,042,600) (21,293,912)
------------ ----------- ------------ ------------
Net increase ......................... 929,551 $13,400,561 556,048 $ 5,735,138
============ =========== ============ ============
</TABLE>
10. 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 had 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.
16
<PAGE>
THE GABELLI GLOBAL OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period.
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998+
----------------- ------------------
<S> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of period ............... $ 10.55 $ 10.00
---------- ----------
Net investment income .............................. 0.03 0.09
Net realized and unrealized gain on investments .... 8.30 0.91
---------- ----------
Total from investment operations ................... 8.33 1.00
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income .............................. -- (0.09)
In excess of net investment income ................. -- (0.06)
Net realized gain on investments ................... (0.82) (0.30)
In excess of net realized gain on investments ...... (0.03) --
---------- ----------
Total distributions ................................ (0.85) (0.45)
---------- ----------
NET ASSET VALUE, END OF PERIOD ..................... $ 18.03 $ 10.55
========== ==========
Total return++ ..................................... 79.2% 10.1%
========== ==========
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............... $ 26,779 $ 5,866
Ratio of net investment income to average net assets 0.36% 1.72%(a)
Ratio of operating expenses
to average net assets before reimbursement (b) 1.97% 4.77%(a)
Ratio of operating expenses
to average net assets net of reimbursement .... 1.03%(c) 1.00%(a)
Portfolio turnover rate ............................ 49% 127%
</TABLE>
- ----------
+ From commencement of investment operations on May 11, 1998 through
December 31, 1998.
++ 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 and 1999, the Adviser
voluntarily reimbursed certain expenses. If such expense reimbursement had
not occurred, the ratio of operating expenses to average net assets would
have been as shown.
(c) The Fund incurred interest expense during the year ended December 31,
1999. If interest expense had not been incurred, the ratio of operating
expenses to average net assets net of reimbursement would have been 1.00%.
See accompanying notes to financial statements.
17
<PAGE>
THE GABELLI GLOBAL OPPORTUNITY FUND
REPORT OF GRANT THORNTON LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
Shareholders and Board of Directors of
The Gabelli Global Opportunity Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Gabelli Global Opportunity 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 the year ended December 31, 1999 and for the period
from May 11, 1998 (commencement of operations) to December 31, 1998 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 audit
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 audit provides 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 Opportunity 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/ Signature
Grant Thornton LLP
- --------------------------------------------------------------------------------
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 short term capital
gains) totaling $0.73 per share and long term capital gains totaling $0.12 per
share. For the fiscal year ended December 31, 1999, 9.48% 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 3.35%. 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 Opportunity 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.
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
GABELLI FAMILY OF FUNDS
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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
<PAGE>
Gabelli Global Series Funds, Inc.
THE GABELLI GLOBAL OPPORTUNITY 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
Caesar Bryan Bruce N. Alpert
PORTFOLIO MANAGER VICE PRESIDENT AND TREASURER
James E. McKee
SECRETARY
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Global Opportunity Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB403Q499SR
[PHOTO OF MARIO GABELLI OMITTED]
THE
GABELLI
GLOBAL
OPPORTUNITY
FUND
ANNUAL REPORT
DECEMBER 31, 1999
