GABELLI INTERNATIONAL GROWTH FUND, INC.
FIRST QUARTER REPORT - MARCH 31, 1997
[Photo of Caesar Bryan]
TO OUR SHAREHOLDERS:
The net asset value of the Gabelli International Growth Fund appreciated
by 0.7% during the first quarter of 1997. This compares with a decline of 1.7%
for the Morgan Stanley EAFE Index of International Markets and a positive return
of 1.3% for the average International Fund monitored by Lipper Analytical
Services Inc.
The robust performance of the U.S. dollar almost entirely erased the good
performance of most equity markets in their local currency. As evidence mounted
that the U.S. economy entered 1997 growing strongly, bond yields rose and the
dollar continued to climb. For example, the dollar rose by 8.7% against the
Deutschemark and by 8.8% in relation to the Japanese yen during the quarter.
Among the developed markets, Europe outperformed Asia. Within Europe,
Germany was the star performer as a weaker currency and better growth prospects
helped the German market rise almost 10%. In contrast, the United Kingdom
declined slightly, due to uncertainty created by the government calling for a
general election to be held on May 1st. In general, the Pacific Rim equity
markets had a poor quarter. Of the larger markets, only Taiwan posted a positive
return while both Japan and Thailand declined by more than 10%. Others were not
far behind including Hong Kong and Singapore with falls of over 5%. Developing
markets, especially in South America and Eastern Europe, performed well during
the first quarter.
INVESTMENT RESULTS (a)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
QUARTER
--------------------------------------------------------------
1ST 2ND 3RD 4TH YEAR
--- --- --- --- ----
<S> <C> <C> <C> <C> <C>
1997: Net Asset Value .................... $13.51 __ __ __ __
Total Return ....................... 0.7% __ __ __ __
- ----------------------------------------------------------------------------------------------------------------
1996: Net Asset Value .................... $11.71 $12.55 $12.53 $13.42 $13.42
Total Return ....................... 6.6% 7.2% (0.2)% 7.1% 22.2%
- ----------------------------------------------------------------------------------------------------------------
1995: Net Asset Value .................... __ __ $10.57 $10.98 $10.98
Total Return ....................... __ __ 5.7%(b) 3.9% 9.8%(b)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------------------------------------
AVERAGE ANNUAL RETURNS - MARCH 31, 1997 (A)
- -------------------------------------------
1 Year .................................... 15.4%
Life of Fund (b) .......................... 18.7%
- ---------------------------------------------------
(a) Total returns reflect changes in share price and are net of expenses. Of
course, returns represent past performance and do not guarantee future results.
Investment returns and the principal value of an investment will fluctuate. When
shares are redeemed they may be worth more or less than their original cost.
(b) From commencement of operations on June 30, 1995.
Note: Investing in foreign securities involves risks not ordinarily associated
with investments in domestic issues, including currency fluctuation, economic
and political risks.
- --------------------------------------------------------------------------------
<PAGE>
OUR APPROACH
We purchase attractively valued companies which we believe have the
opportunity to grow earnings more rapidly than the average in that company's
local market. We pay close attention to a company's market position, management
and balance sheet, with particular emphasis on the ability of the company to
finance its growth. Generally we value a company relative to its local market
but, where appropriate, will attempt to benefit from valuation discrepancies
between markets. Our primary focus is on security selection and not country
allocation, but the Fund will remain well diversified by sector and geography.
Country allocation is likely to reflect broad economic, financial and currency
trends as well as relative size of the market.
MARKET OUTLOOK
After an extended period of unchanged monetary policy, the Federal Reserve
Board voted at the end of March to increase short-term interest rates by 25
basis points to 5.75%. This was largely in response to stronger than expected
economic growth and the recent strength of the U.S. equity market. Inflation,
the usual reason for a tighter monetary policy, remains benign, both in the U.S.
and overseas.
Even though short-term rates were raised at the end of the quarter, the
bond market anticipated the move and U.S. bond yields have been on a rising
trend since the start of December. For the first quarter, the yield on the 10
year U.S. government bond rose by almost 50 basis points to 6.91%.
Economic conditions in the major developed economies outside the U.S. are
not nearly as robust and this has been reflected in recent interest rate
movements. For example, 10 year government bond yields in Germany moved up by 15
basis points to 5.93% and in Japan bond yields actually fell by 20 basis points
during the first three months of 1997 to 2.45%. Even though U.S. short-term
interest rates may be raised further during 1997, it is unlikely that the German
or Japanese authorities will necessarily follow the U.S. as inflation in both
Europe and Japan remains very low. Also, in the case of Japan, the fragility of
the financial system is keeping interest rates lower than they might otherwise
be. As a consequence, bond market yields in most overseas economies should
remain reasonably steady even if U.S. bond yields rise a little from current
levels.
In short, overseas equity markets, particularly in Europe, will not have
the interest rate support that they enjoyed for most of 1996. Instead, we
believe markets will require increased earnings to move higher. There are a
number of precedents that support the contention that European equity markets
can perform well even in a rising bond yield environment so long as profit
growth is robust. During the next year we expect strong profit growth in
mainland Europe as economies come out of recession and companies enjoy some top
line growth.
Japanese exporting companies have benefited from the recent weakness of
the yen and this has been recognized by the market. Although the market remains
50% below its all time high in 1989, a number of leading manufacturing
companies, such as Toyota and Honda, are trading at all time highs. Although
much of the financial system in Japan remains in disarray, the authorities are
continuing to attempt to deregulate various sectors of the economy. We believe
that the large divergence in performance between perceived winners and losers
will continue and that stock picking will become increasingly important in the
Japanese market.
2
<PAGE>
INTERNATIONAL ALLOCATION
The chart at the right presents the Fund's holdings by geographic region
as of March 31, 1997. The geographic allocation will change based on future
global market conditions. Countries and/or regions or companies represented in
the chart and below may or may not be included in the Fund's portfolio in the
future.
[THE FOLLOWING TABLE REPRESENTS A PIE CHART IN THE PRINTED PIECE.]
HOLDINGS BY GEOGRAPHIC REGION--3/31/97
EUROPE ................ 62.6%
SOUTH EAST ASIA ....... 16.6%
JAPAN ................. 9.4%
CANADA ................ 2.1%
OTHER ................. 4.1%
CASH .................. 5.2%
PORTFOLIO STRUCTURE
The geographic emphasis of the portfolio remains in European investments.
We continue to find European companies attractive based on the potential for
sustained improvements in profitability. As a bonus, we expect corporate
activity to remain at a high level as companies strive to achieve critical mass
in their core products and services and shed peripheral operations.
South East Asia has not performed well during the past few months as
investor attention has shifted to Latin America and Eastern Europe. However, we
remain committed to the region and expect strong economic fundamentals to be
reflected in good corporate performance over the longer term.
LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Fund.
Favorable EBITDA (earnings before interest, taxes, depreciation and
amortization) prospects do not necessarily translate into higher stock prices,
but they do express a positive trend which we believe will develop over time.
ASTRA AB (ASTRA.ST - $48.285 - STOCKHOLM STOCK EXCHANGE) Astra is a global
pharmaceutical company founded in 1913 and headquartered in Sweden. Astra's
product line is concentrated in four therapeutic areas, namely;
gastrointestinal, respiratory, cardiovascular and local anesthesia. The
company's rapid growth since the mid 1980s has largely been based upon the
success of Losec, its anti-ulcer drug, and Pulmicort, an asthma treatment. The
success of these products has enabled Astra to improve its global distribution
network and therefore, to benefit fully from future product introductions.
BRITISH PETROLEUM COMPANY PLC (B.P.L. - $11.59 - LONDON STOCK EXCHANGE) British
Petroleum is one of the world's largest integrated oil companies. We believe
that the company will generate considerable free cash flow during the next few
years which will permit management to make significant dividend increases. This
improved financial performance is based on B.P. being able to increase its oil
production by about 7% per year and to continue its downstream rationalization
program to reduce costs.
CHEUNG KONG (HOLDINGS) LIMITED (CHEUY - $8.808 - HONG KONG STOCK EXCHANGE) is
one of Hong Kong's leading conglomerates. The company has holdings in a number
of companies including Hutchinson Whampoa, HK Electric and Cheung Kong
Infrastructure. Cheung Kong's major activities include property development,
infrastructure management and construction, cement and electric generation. The
company is well positioned to take advantage of business opportunities in China
as they present themselves.
3
<PAGE>
CHRISTIAN DIOR SA (DIOR.PA - $152.59 - PARIS STOCK EXCHANGE) Christian Dior is
the parent company and owns 41.7% of LVMH. LVMH is one of the world's leading
luxury goods companies with major market positions in perfumes, luggage, cognac
and champagne. Some of the company's brand names include Moet and Chandon,
Hennessy, Louis Vuitton, Givenchy and Christian Lacroix. Apart from its holding
in LVMH, Christian Dior is developing a range of products under the Dior brand
name. These include clothes and leather goods. Christian Dior provides investors
with exposure to LVMH future growth at a significant price discount.
KSB AG (KSBGPF.F - $200.00 - FRANKFURT STOCK EXCHANGE) KSB is one of the world's
leading pump and valve manufacturers yet has been showing losses over the past
two years. This has resulted in a thorough review of the company's operations.
Like much of the German manufacturing industry the company had become
uncompetitive on a global basis. New management has moved to cut costs, close
surplus manufacturing plants in Europe and open facilities in lower cost
countries such as India. Management's recent moves and the weakening of the
Deutschemark should result in a dramatic recovery in profitability.
NOVARTIS AG (NOVZN.S - $1,234.28 - ZURICH STOCK EXCHANGE) was created by the
merger of two of Europe's largest pharmaceutical companies, namely Ciba Geigy
and Sandoz, both of which were headquartered in Basel, Switzerland. Apart from
pharmaceuticals, the merged company has a strong position in agribusiness and
nutrition. Ciba Specialty Chemicals, with sales of about $5 billion, has
recently been spun off to shareholders as the new company concentrates on its
core divisions. The company has a number of new drugs in development that have
excellent sales potential and we believe management will reduce costs following
the merger. We expect at least 15% annual earnings growth for the next few
years.
SCHIBSTED A/A (SCHX.OL - $20.26 - OSLO STOCK EXCHANGE) is involved in all
aspects of the media business in Norway and is now expanding into the rest of
Scandinavia. The company is organized into three business groups: Print Media,
TV/Film and Multimedia. Cash flows from the original newspaper businesses have
been, during recent years, reinvested in television, TV programming and
multimedia activities. We believe that these new activities will prove
successful.
SCOR SA (SCOR.PA - $40.72 - PARIS STOCK EXCHANGE) SCOR is a medium sized
re-insurance company based in France. The company has undergone significant
ownership changes over the past year with over 80% of the shares now in public
hands compared with only 25% months ago. The re-insurance industry is in the
midst of a period of consolidation which will likely raise the barrier to entry.
This should have a positive impact on profitability. SCOR trades at a meaningful
discount to its competitors which we believe will narrow over time.
SKANDIA FORSAKRINGS SA (SDIA.ST - $31.46 - STOCKHOLM STOCK EXCHANGE) Skandia is
an insurance company with its headquarters in Sweden. The most exciting aspect
of Skandia's operations is its unit linked savings business, commonly known in
the U.S. as variable annuities. Skandia has established leading market positions
in both the U.S. and U.K., as well as in Scandinavia. Their variable annuity
business, known as AFS, has grown very quickly and benefits from world-wide
trends towards self administrated savings plans. We believe that this rapid
growth will continue and that the market has not yet fully recognized the value
of this business. If this persists we expect management to seek a separate
listing for AFS.
SIMINT (SIMI.MI - $4.479 - MILAN STOCK EXCHANGE) produces high end casual wear
under license for Georgio Armani who owns a majority of the company. New
management has concentrated the company's operations on design, distribution and
branding with excellent results. We expect strong earnings growth over the next
two years.
4
<PAGE>
MINIMUM INITIAL INVESTMENT - $1,000
The Fund's minimum initial investment for both regular and retirement
accounts is $1,000. There are no subsequent minimums. No initial minimum is
required for those establishing an Automatic Investment Plan. The Gabelli
International Growth 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 Funds, Inc., the Gabelli Mutual Funds,
quarterly reports, closing prices, IRAs, 401(k)s and other current news. You can
also send us e-mail at [email protected].
IN CONCLUSION
The Fund's daily net asset value is now 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 GIGRX. Please call us during the
day for further information.
We thank you for your confidence in our investing abilities and wish you a
productive and financially rewarding 1997.
Sincerely,
/s/Caesar Bryan
---------------
Caesar Bryan
President and Portfolio Manager
May 1, 1997
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
MARCH 31, 1997
Novartis AG
Simint
SCOR SA
Schibsted A/A
KSB AG
Christian Dior SA
Cheung Kong (Holdings) Limited
Astra AB
Bayerische Vereinsbank AG
Skandia Forsakrings SA
- --------------------------------------------------------------------------------
NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
5
<PAGE>
THE GABELLI INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 1997 (UNAUDITED)
================================================================================
Market
Shares Value
------ -----
COMMON STOCKS - 93.00%
AUTOMOTIVE: MANUFACTURING - 1.00%
7,000 Toyota Motor Corporation........... $ 177,151
-----------
AUTOMOTIVE: PARTS & SERVICES - 1.76%
10,000 Oriential Holdings Berhad.......... 90,359
15,000 Phoenix AG......................... 222,985
-----------
313,344
-----------
BANKS - 9.83%
30,000 Arab Malaysian Corporation Berhad.. 154,901
3,000 Banco Pastor S.A................... 171,308
393,000 Bank Negara Indonesia.............. 225,072
28,000 Bank of Ireland.................... 268,928
40,000 Bank of Scotland................... 210,248
7,000 Bayerische Vereinsbank AG.......... 287,522
10,000 HSBC Holdings plc.................. 232,288
18,000 Skandinaviska Enskilda Banken...... 199,099
-----------
1,749,366
-----------
BROADCASTING - 2.69%
800 NRJ SA............................. 109,581
700 Pathe SA........................... 178,850
35,000 Publishing and Broadcasting Ltd.... 189,269
-----------
477,700
-----------
BUILDING MATERIALS - 0.94%
17,000 CRH plc............................ 167,559
-----------
BUSINESS SERVICES - 1.06%
8,000 Enator AB.......................... 189,694
-----------
CHEMICALS - 1.37%
500 Clariant AG........................ 244,990
-----------
CONGLOMERATES - 4.12%
33,000 Cheung Kong (Holdings) Limited..... 290,650
1,500 Oerklikon-Buehrle Holding AG....... 150,052
35,000 Sime Darby Berhad.................. 127,773
21,000 Swire Pacific Limited.............. 165,312
-----------
733,787
-----------
CONSUMER PRODUCTS - 6.15%
2,000 Christian Dior SA.................. 305,181
210 Compagnie Financiere Richemont AG.. 276,469
2,500 Nintendo Co., Ltd.................. 179,495
2,500 Salomon SA......................... 178,096
2,200 Sony Corporation................... 153,864
-----------
1,093,105
-----------
DIVERSIFIED INDUSTRIAL - 5.90%
21,300 Antofagasta Holdings plc........... 127,502
15,000 Daiki Engineering Co............... 50,333
12,000 Doncasters plc - ADR.............. 232,500
5,100 Invik & Company AB, B Free......... 234,766
1,600 KSB AG............................. 320,000
13,000 Mitsubishi Heavy Industries Ltd.... 84,614
-----------
1,049,715
-----------
ELECTRONICS - 1.40%
9,000 Hitachi, Ltd....................... 80,045
15,000 NEC Corp........................... 169,793
-----------
249,838
-----------
ENERGY - 4.88%
20,000 British Petroleum Company plc...... 231,732
75,000 Hong Kong and China Gas............ 140,825
2,500 Repsol SA.......................... 103,983
4,000 Shaw Industries Ltd................ 85,260
23,000 Van Der Horst Ltd.................. 77,993
4,000 Veba AG............................ 228,776
-----------
868,569
-----------
ENTERTAINMENT - 1.74%
125,000 Southern Star Group Limited........ 171,938
50,845 Village Roadshow Ltd............... 137,477
-----------
309,415
-----------
FINANCIAL SERVICES - 8.84%
100,000 Banca Commerciale Italiana......... 199,451
10,000 Dundee Bancorp, Inc. Cl. A+........ 195,087
320,000 Gemina SpA......................... 130,133
180,000 Holding di Partecipazioni
Industriali SpA ................. 104,285
1,900 ORIX Corp.......................... 83,724
1,000 Safra Republic Holdings............ 191,000
8,000 SCOR SA............................ 325,763
9,000 Skandia Forsakrings AB............. 283,150
1,300 Takefuji Corporation............... 59,072
-----------
1,571,665
-----------
FOOD AND BEVERAGE - 1.85%
3,500 Hartwall Oy AB..................... 182,548
2,500 Nestle SA ADR...................... 146,204
-----------
328,752
-----------
FOREST PRODUCTS - 0.23%
16,000 Jefferson Smurfit Group plc........ 40,600
-----------
GAMING/CASINOS - 0.99%
100,000 Sydney Harbour Casino
Holdings Limited ................ 175,278
-----------
HEALTH CARE - 0.73%
10,000 Bure Investment Aktiebolaget....... 129,819
-----------
INSURANCE - 1.24%
20,000 Commercial Union PLC............... 220,252
-----------
MEDIA - 4.98%
14,000 Granada Group plc.................. 210,658
30,037 News Corporation Limited........... 140,474
3,600 Reuters Holdings plc ADR........... 209,475
16,000 Schibsted A/A...................... 324,210
-----------
884,817
-----------
METALS AND MINING - 3.36%
16,000 Durban Roodepoort Deep Ltd.-Options 47,777
50,000 Emperor Mines Ltd.................. 76,242
167,500 Glencar Explorations plc........... 137,350
5,000 Golden Star Resources Ltd.......... 52,245
6
<PAGE>
THE GABELLI INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- MARCH 31, 1997 (UNAUDITED)
================================================================================
Market
Shares Value
------ -----
METALS AND MINING - CONTINUED
3,000 Hullas de Coto Cortes.............. $ 68,735
15,000 IAM Gold International
African Mining .................. 65,029
14,040 Randgold and Exploration
Company Ltd.+ ................... 110,382
2,000 Stillwater Mining Ltd.+(a)......... 39,250
-----------
597,010
-----------
PHARMACEUTICALS - 7.11%
6,000 Astra AB A......................... 289,707
15,000 Glaxo Wellcome plc................. 274,659
450 Novartis AG........................ 555,425
5,000 Zeneca Group plc................... 144,525
-----------
1,264,316
-----------
PUBLISHING - 4.44%
25,000 Arnoldo Mondadori Editore.......... 156,754
7,000 Grupo Anaya SA..................... 144,343
21,574 Independent Newspapers Ltd......... 115,971
15,000 Independent Newspaper.............. 69,014
15,000 Pearson plc........................ 179,334
30,000 Star Publication Malaysia+......... 123,437
-----------
788,853
-----------
REAL ESTATE AND DEVELOPMENT - 3.79%
155,000 Lai Sun Development Co............. 180,023
31,124 Lai Sun Development Co. (warrants). 2,932
10,000 Mitsubishi Estate Company, Limited. 106,727
30,000 NK Cityfastigheter AB.............. 246,390
13,000 Sun Hung Kai Properties Ltd........ 137,566
-----------
673,638
-----------
RETAIL - 1.57%
4,500 Bulgari SpA ADS+(a)................ 85,751
6,000 Chain Store Okuwa Co., Ltd......... 64,521
55,000 PT Ramayana Lestari Sentosa........ 128,285
-----------
278,557
-----------
SHIPBUILDING - 0.57%
60,000 Mitsui Engineering &
Shipbuilding Co., Ltd. .......... 101,876
-----------
SHIPPING - 1.43%
15,000 MIF Limited........................ 255,179
-----------
TELECOMMUNICATIONS - 3.41%
52,000 CPT Telefonica del Peru Cl. B+..... 115,687
20 DDI Corp........................... 126,228
4,930 Hellenic Telecommunications
Organization S.A. (OTE).......... 106,562
25 Nippon Telegraph and Telephone
Corporation...................... 176,059
1,000 Telecel-Comunicacaoes Pessoais SA.. 81,636
-----------
606,172
-----------
Principal
Amount
or Shares
---------
TEXTILE - 2.33%
8,000 Kyokuichi Corporation.............. 78,913
75,000 Simint............................. 335,901
-----------
414,814
-----------
TOBACCO - 1.01%
50,000 Swedish Match AB................... 178,832
-----------
WIRELESS COMMUNICATIONS - 2.28%
70,000 Telecomm Italia Mobile SpA+........ 200,644
4,650 Vodafone Group plc ADR............. 205,181
-----------
405,825
-----------
TOTAL COMMON STOCKS ............... 16,540,488
-----------
CONVERTIBLE CORPORATE BONDS - 0.29%
FINANCIAL SERVICES - 0.29%
$50,000 Randgold Finance Sub. Deb. Cv.
7.00%, 10/03/01.................. 51,750
-----------
TOTAL CONVERTIBLE CORPORATE BONDS.. 51,750
-----------
PREFERRED STOCK - 1.46%
AUTOMOTIVE: MANUFACTURING - 1.46%
600,000 Volkswagen AG Pfd.................. 259,343
-----------
TOTAL PREFERRED STOCK ............. 259,343
-----------
U.S. GOVERNMENT OBLIGATIONS - 5.06%
$900,000 U.S. Treasury Bills, 4.90% to 5.25%
due 04/03/97 to 04/17/97......... 898,518
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS . 898,518
-----------
TOTAL INVESTMENTS - 99.81% ........ 17,750,099
OTHER ASSETS IN EXCESS OF
LIABILITIES - 0.19% ............. 34,540
-----------
NET ASSETS - 100.00% .............. $17,784,639
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE (SHARES
OUTSTANDING 1,316,305) $13.51
======
(a)Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At March 31, 1997, Rule 144A
securities amounted to $125,001 or 0.7% of net assets.
ADR -- American Depositary Receipt
+ Non-income producing security
7
<PAGE>
GABELLI INTERNATIONAL GROWTH FUND, INC.
One Corporate Center
Rye, New York 10580-1434
1-800-GABELLI
[1-800-422-3554]
FAX: 1-914-921-5118
http://www.gabelli.com
e-mail: [email protected]
(Net Asset Value may be obtained daily by calling
1-800-GABELLI after 6:00 P.M.)
BOARD OF DIRECTORS
Mario J. Gabelli, CFA
CHAIRMAN AND
CHIEF INVESTMENT OFFICER
GABELLI FUNDS, INC.
Anthony J. Colavita
ATTORNEY-AT-LAW
ANTHONY J. COLAVITA, P.C.
Anthonie C. van Ekris
MANAGING DIRECTOR
BALMAC INTERNATIONAL, INC.
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
Werner J. Roeder, MD
DIRECTOR OF SURGERY
LAWRENCE HOSPITAL
OFFICERS AND PORTFOLIO MANAGERS
Caesar Bryan
PRESIDENT AND
PORTFOLIO MANAGER
James E. McKee
SECRETARY
Bruce N. Alpert
VICE PRESIDENT
AND TREASURER
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Willkie Farr & Gallagher
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of
Gabelli International Growth Fund, Inc. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
[PHOTO]
GABELLI
INTERNATIONAL
GROWTH
FUND,
INC.
FIRST QUARTER REPORT
MARCH 31, 1997
