[PHOTO OMITTED]
Gabelli
International
Growth
Fund,
Inc.
FIRST QUARTER REPORT
MARCH 31, 1999
<PAGE>
[GRAPHIC OMITTED]
Gabelli International Growth Fund, Inc.
First Quarter Report - March 31, 1999
****
Morningstar Rating(TM) of The Gabelli International Growth Fund was
4 stars overall and for the three-year period ended 3/31/99 among
918 international equity funds.
[PHOTO OMITTED]
Caesar Bryan
To Our Shareholders,
The performance of the international markets was more muted in the first
quarter of 1999 as compared with the fourth quarter of 1998. The best performers
included Japan, which rose by 11%, as well as other Far Eastern markets such as
Hong Kong and Australia, which both appreciated by more than 5%. Europe was
disappointing with Germany falling by 10%, Spain by 8% and Switzerland by 7%.
Indeed, international markets excluding Japan declined by 2% for the quarter.
Investment Performance
For the first quarter ended March 31, 1999, The Gabelli International
Growth Fund's (the "Fund") total return was 2.0%. The Lipper International Fund
Average and Morgan Stanley Capital International EAFE Index of international
markets had returns of 1.5% and 1.5%, respectively, over the same period. The
Lipper average and Morgan Stanley EAFE index are unmanaged indicators of
investment and stock market performance. The Fund was up 1.2% over the trailing
twelve-month period. The Lipper International Fund Average and Morgan Stanley
EAFE Index rose 0.1% and 6.4%, respectively, over the same twelve-month period.
For the three-year period ended March 31, 1999, the Fund's total return
averaged 13.8% annually versus average annual total returns of 8.9% and 8.8% for
the Lipper International Fund Average and Morgan Stanley EAFE Index,
respectively. Since inception June 30, 1995 through March 31, 1999, the Fund had
a cumulative total return of 72.4%, which equates to an average annual return of
15.6%.
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.
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. Morningstar proprietary
ratings reflect historical risk adjusted performance as of March 31, 1999 and
are subject to change every month. Morningstar ratings are calculated from a
Fund's three, five and ten-year average annual returns in excess of 90-day
T-Bill returns with appropriate fee adjustments and a risk factor that reflects
fund performance below 90-day T-Bill returns. The top 10% of the funds in a
broad asset class receive five stars, the next 22.5% receive four stars, the
next 35% receive three stars, the next 22.5% receive two stars and the bottom
10% receive one star.
<PAGE>
INVESTMENT RESULTS (a)
- --------------------------------------------------------------------------------
Quarter
--------------------------------------
1st 2nd 3rd 4th Year
--- --- --- --- ----
1999: Net Asset Value .. $15.94 -- -- -- --
Total Return ..... 2.0% -- -- -- --
- --------------------------------------------------------------------------------
1998: Net Asset Value .. $17.03 $17.58 $14.74 $15.63 $15.63
Total Return ..... 18.3% 3.2% (16.2)% 14.7% 17.4%
- --------------------------------------------------------------------------------
1997: Net Asset Value .. $13.51 $14.67 $15.31 $14.40 $14.40
Total Return ..... 0.7% 8.6% 4.4% (5.9)% 7.3%
- --------------------------------------------------------------------------------
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)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Returns - March 31, 1999 (a)
-------------------------------------------
1 Year ........................... 1.2%
3 Year ...........................13.8%
Life of Fund (b) .................15.6%
- --------------------------------------------------------------------------------
Dividend History
- --------------------------------------------------------------------------------
Payment (ex) Date Rate Per Share Reinvestment Price
- ----------------- -------------- ------------------
December 28, 1998 $1.260 $15.49
(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 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.
- --------------------------------------------------------------------------------
International Allocation
The accompanying chart presents the Fund's holdings by geographic region
as of March 31, 1999. The geographic allo cation 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 - 3/31/99
[The following data was depicted as a pie chart in the printed material.]
United Kingdom 25.9%
Switzerland 16.3%
Japan 11.3%
France 8.9%
Australia 6.7%
Canada 1.6%
South Africa 0.9%
Other Europe 28.4%
2
<PAGE>
COMMENTARY
On January 1, 1999, the Euro was born. How is it doing three months after
its introduction? The answer is fine. Technically, the launch was a success, but
the Euro skeptics have had the pleasure of watching the Euro slide against the
dollar since the beginning of the year from a high of $1.18 to nearly $1.07 by
the end of March. For reference, the Euro's current exchange rate is only
slightly lower than where it was trading, on a theoretical basis, last spring.
The skeptics claim this is the result of the markets' lack of confidence in the
Euro. This is arguably not the case.
We believe the weakness of the Euro probably reflects economic
fundamentals although the currency has had to contend with the resignation of
the entire European Commission and the conflict in Yugoslavia. European growth,
which has been sluggish, has necessitated interest rate cuts, while the U.S.
economy has powered ahead helped by a strong stock market. Indeed, looking
ahead, the Euro could easily recover as the European economy strengthens
relative to the U.S. The fundamentals of the Euro remain sound. Inflation is
negligible at 1.0% and Euroland had a current account surplus of roughly $100
billion in 1998, or about 1.5% of Gross Domestic Product ("GDP"). By contrast,
the U.S. is running a large current account deficit.
A major success is that the Euro has adopted the interest rate structure
of its strongest currency, the Deutschemark, as opposed to a weighted average of
all the currencies in the system. This has benefited high interest rate
countries such as Italy and Spain. A better measure of the Euro's success will
be whether its introduction will encourage a more efficient, more liquid capital
market in Europe and whether corporate restructuring and cost savings can be
achieved across national borders. The early signs on both of these measures are
reasonably encouraging.
We believe the free movement of capital will be a major catalyst for
reform in Europe. This should result in a shift of power from the politicians to
the market, or if you prefer, the consumer. And how ironic that this is
happening after most of Europe has recently elected left of center governments.
Take Germany as an example. The new S.P.D. government announced a series of tax
increases to be paid by the insurance industry. Allianz, the giant German
insurance company, reacted by threatening to move from Germany. Now the
government appears to be backing down. Government interventionism was dealt a
further blow when Oskar Lafontaine resigned as German Finance Minister. The more
he badgered the European Central Bank ("ECB") to lower rates, the more the ECB
refused to budge. Sure enough, once he was gone, Chairman Duisenberg and his
colleagues lowered rates by 50 basis points, to 2.5%, a larger cut than had been
expected.
We expect M&A transactions will remain strong in industries currently
experiencing robust activity such as health care and financial services. This
indeed has occurred. Two portfolio holdings, Astra and Zeneca, have merged and
Glaxo Wellcome continues to scour the dance floor for a partner. We have
holdings in all of these companies as well as in the two large Swiss
pharmaceutical companies, Novartis and Roche Holdings.
3
<PAGE>
In financial services, the consolidation process continues with France and
Italy currently taking center stage. One of our large holdings, Banca
Commerciale Italiana, is currently being wooed by a variety of Italian suitors.
We continue to believe that European asset managers remain attractive
investments and we still hold Skandia in Sweden, Schroders in the U.K. and Safra
Republic Holdings in Switzerland.
The power of the market and the competition for capital should speed the
pace of reform on both a macro and micro level. National governments will likely
set aside ideological baggage and undertake meaningful tax harmonization and
labor reform. Also, institutional reform is required in areas such as the
hostile takeovers of public companies. The Telecom Italia saga and the LVMH bid
for Gucci have highlighted the problem. In the latter case, Dutch law allows a
target company to issue as many shares as necessary to dilute the acquirer.
In a more competitive environment, European companies will have to
continue in their efforts to improve returns and to better communicate
objectives to investors in order to attract capital. European companies' return
on equity ("ROE"), one corporate measure of performance, continues to lag
significantly behind U.S. corporations. This varies by country but, for example,
the average ROE in Germany is significantly less than that of the S&P 500. Can
this gap be closed? If it can, we believe Europe will remain an attractive
location to invest.
These trends are coinciding with a major shift among savers from bonds to
equities. Europeans are investing nearly $4 billion per month in equity funds.
While this is well down from the inflows seen last spring, it is far greater
than the average of $1 billion per month prior to 1997.
So far this year, European equity markets have lagged both Japan and the
emerging markets, which have rallied sharply from depressed levels.
Japan has experienced six significant rallies since the market peaked in
1989. Each one has stalled after a few months. Is this one any different? Maybe.
Two things have changed. First, a massive bank bailout has been implemented
which will help end the credit crunch. Second, companies have now recognized
that restructuring is necessary for survival. No longer can employees be sent to
majority owned subsidiaries and capacity be increased on an uneconomic basis.
But there is still a long way to go. In the late 1980s era of free capital in
Japan, capital investment as a percent of the economy peaked at well over 20%.
It is now at 14% during the third year of economic contraction and still 2%
above the U.S. level.
The market is rewarding companies that announce restructuring plans, which
totaled 130 in March alone. The difficulty will be in implementing these plans.
The Japanese government, led by Mr. Obouchi, is now encouraging companies
to be more efficient and reduce capacity. This has caused fear among consumers
who have reacted by spending even less. The numbers are startling. Wages are
falling at an annual rate of 4.0%, retail sales declined by 4.3% and
4
<PAGE>
industrial production has fallen by 7.0% in the past year. Consumer weakness has
prompted the government to increase spending which has sent government debt
levels soaring.
Therefore, the investment case for Japan is probably not based on an
economic upturn in the short term but rather on a more bottom up analysis of
corporate restructuring. Indeed, if companies are successful in becoming more
efficient, unemployment will probably rise further in the short term. Therefore,
it is a case of short term pain for long term gain. Actually, an upturn in the
economy could result in company managements collectively wiping their brow and
reverting to business as usual.
The Fund remains heavily weighted in the European market and its largest
holdings are concentrated in the health care, telecommunications, media and
consumer non-durable sectors. Richemont, one of our largest holdings, is an
example of an investment that meets most of our criteria. We believe Richemont
has attractive assets and the management has made value-enhancing moves over the
past two years. First, they swapped their pay television assets for a 15% stake
in Canal +, Europe's largest pay television company, and then they sold Rothmans
for a 25% stake in B.A.T., the world's second largest tobacco company. Both
businesses should perform better as part of larger groups. This leaves
management free to concentrate on their luxury goods businesses, such as
Cartier, which we believe trade at a significant discount to comparable
companies. The market is now beginning to recognize the changes that management
has undertaken.
Other, better known consumer stocks that the Fund holds include Nestle,
Danone (the French food company) and Foster's Brewing ( the Australian beer
company). Less well known is KAO, the Japanese consumer products company. This
holding is a fine example of a successful restructuring. KAO is Japan's largest
detergent manufacturer with a brand called "Attack." In the late 1980s, the
company decided to take its expertise in consumer goods and move into making
floppy disks which, of course, was a disaster. The company has now retreated
from this adventure and has adopted EVA management techniques.
Telecommunications stocks continue to benefit from deregulation and the
explosive growth in data transmission and Internet and wireless traffic. The
Fund's largest telecommunications holdings include Vodafone, Telecom Italia, NTT
and Cable & Wireless.
The introduction of digital television and excitement surrounding the
growth of the Internet has focused investor attention on broadcasting and media
stocks. One of the Fund's largest holdings is Granada Group, a dominant U.K.
commercial television broadcaster. The company has just launched its digital
television offering called On Digital. B Sky B has also recently launched its
own digital pay television offering, Sky Digital, and we continue to hold Pathe,
the French company that owns 17% of B Sky B as well as other media assets in
Europe. Other broadcasters that we believe are attractive include Publishing and
Broadcasting in Australia and Tokyo Broadcasting System.
5
<PAGE>
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 the following holdings are stated in U.S. dollar
equivalent terms as of March 31, 1999.
AstraZeneca plc (AZN.L - $47.18 - London Stock Exchange) is a newly formed
company created from the merger of two medium sized pharmaceutical companies,
Astra in Sweden and Zeneca based in the U.K.. The combined company is one of the
largest pharmaceutical companies in the world with a particularly strong
position in gastrointestinal, oncology and cardiovascular therapeutic areas.
Following the merger, non-core activities such as specialty chemicals will be
divested.
Compagnie Financiere Richemont AG (RIFZ.S - $1,662.00 - Zurich Stock Exchange)
is a Swiss-based holding company which exercises financial and operational
control over companies operating primarily in the fields of tobacco and luxury
goods. Richemont's interests in the tobacco industry are held through Rothmans
International and three of the Group's trademarks: Rothmans, Dunhill and Peter
Stuyvesant are among the top fifteen cigarette brands in the world. Through its
luxury goods subsidiary, Richemont controls a portfolio of leading luxury goods
brands including Cartier, Piaget, Montblanc, Karl Lagerfeld and Alfred Dunhill.
Recently, the company sold its pay television company, Nethold, to Canal + for a
15% stake in Canal +. We believe this was an excellent transaction and shows
management's ability to create value.
CRH plc (CRH.L - $17.26 - London Stock Exchange) is a Dublin, Ireland-based
international building materials company. CRH is a leading producer and
distributor of a wide range of building products and materials. CRH's diversity
in its product line and geographic reach keep this company well protected
against a slow down in any one particular product segment or country. This
global presence will contribute to CRH's continued organic growth.
Glaxo Wellcome plc (GLX.L - $33.46 - London Stock Exchange) is one of the
world's premier health care companies. The company has a five percent share of
the global pharmaceutical market with leadership positions in gastrointestinal,
respiratory and viral infection therapies. The company's best known product,
Zantac, has recently lost patent protection but other drugs are experiencing
rapid growth. One of the company's strengths is the effectiveness of their
research and development effort and Glaxo remains on track to bring three
significant medicines to the market per year from the year 2000 onwards.
Granada Group plc (GAA.L - $20.26 - London Stock Exchange) is a dominant media
and hospitality company in the U.K. Granada is focusing its efforts on building
leading brands that offer a full range of products and services in their
markets. Granada's ITV unit is constantly working to develop innovative
programming and thus a greater audience for its advertisers. The restaurant
group continues to improve both its revenue and profit growth. Granada's
refurbished hotels continue to raise their occupancy rate.
6
<PAGE>
Ito Yokado Co. Ltd (8264.T - $64.34 - Tokyo Stock Exchange) is one of Japan's
leading retailers and operates supermarket stores mainly in Tokyo and Kanagawa,
selling clothing, foodstuffs and household utensils. The company's subsidiaries
include Seven-Eleven Japan. Ito Yokado ranks second in industry sales and is
top-ranked in profits.
Novartis AG (NOVZN.S - $1,622.14 - Zurich Stock Exchange) is one of the world's
largest pharmaceutical companies and was created by the merger of two of
Europe's dominant pharmaceutical companies, 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 nearly $5 billion, was recently spun-off to
shareholders as the new company concentrates on its core divisions. Novartis has
a number of new drugs in development that have excellent sales potential and we
believe management will continue to reduce costs.
Pearson plc (PSON.L - $22.78 - London Stock Exchange) is a leading global
publisher with many strong brands. Pearson has tripled the size of its
educational publishing unit through the Simon & Schuster acquisition as well as
seen its Financial Times Group flourish both in print and electronically.
Pearson will continue to grow as the company positions itself ahead of the
trends that are shaping the industry. The company's television business
continues to grow and its Internet content is strengthening.
Roche Holding AG (ROCZg.S - $12,194.75 - Zurich Stock Exchange) is one of the
world's leading health care companies. Apart from pharmaceuticals, the company
has major positions in vitamins, diagnostics, fragrances and flavors and
orthopedics. The company has recently completed the purchase of Corange for
approximately $11 billion, which we believe will be additive to earnings. This
acquisition will make Roche the largest diagnostic company. We expect Roche to
introduce a number of new drugs during the next few years, which should result
in stronger earnings growth.
Rogers Communications Inc. (RG - $18.125 - NYSE) provides cellular service and
digital personal communications services ("PCS") through its interest in Rogers
Cantel Mobile Communications. The company also offers cable television and video
services through Rogers Cablesystems and radio and television broadcasting,
publishing, and new media businesses through Rogers Multi-media. We believe the
company is likely to participate in the concentration of the North American
cable television industry.
Telecom Italia SpA (TIT.MI - $10.62 - Milan Stock Exchange) is the principal
provider of domestic and international telecommunications services in Italy.
Telecom Italia is also the seventh largest fixed telecommunications operator as
well as the largest mobile operator in Europe through its 60% held subsidiary,
Telecom Italia Mobile. In addition, Telecom Italia also provides leased lines,
data communications services, satellite communications services and the
development and manufacture of telecommunications equipment and networks. The
company is currently the subject of a takeover battle between Deutsche Telekom
and Olivetti.
7
<PAGE>
Telecom Italia Mobile SpA (TIM.MI - $ 6.73 - Milan Stock Exchange), formerly a
subsidiary of Telecom Italia (the provider of wired local and long distance
telephone service in Italy), was spun-off last July and began trading on the
Milan Stock Exchange as an independent company. Telecom Italia Mobile is the
leading cellular provider in Italy. The company is the largest cellular provider
in Europe with close to 15 million GSM subscribers. The competitive environment
in which Telecom Italia Mobile operates remains favorable, with only two
competitors, Omnitel and Wind.
Vivendi (EX.PA - $246.04 - 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. With 159 million shares outstanding, the
company has an equity market capitalization of Euro 35 billion or $40 billion.
Vodafone Group plc (VOD - $187.75 - NYSE) is the dominant mobile communications
provider in the U.K. controlling an estimated 38% of the nine million mobile
customers. In addition, nearly half of Vodafone's subscribers are international
as the company attempts to extend its reach into Western Europe, South Africa,
Egypt, the Pacific Rim and the U.S. through its pending acquisition of AirTouch
Communications (ATI - $96.625 - NYSE) to be completed in the second half of
1999. Vodafone should benefit from the increased usage of wireless networks and
the economies of scale of a larger network.
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 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 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].
8
<PAGE>
In Conclusion
We continue to look for well-established companies that operate in
businesses that are fairly stable and have a high barrier to entry. These
companies should have strong balance sheets, generate or have the potential to
generate free cash flow and have managements that are shareholder sensitive.
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 GIGRX. Please call us during the
business day for further information.
Sincerely,
/s/ Caesar Bryan
Caesar Bryan
President and Portfolio Manager
April 30, 1999
- --------------------------------------------------------------------------------
Top Ten Holdings
March 31, 1999
--------------
Novartis AG Roche Holding AG
Vodafone Group plc Granada Group plc
Compagnie Financiere Richemont Zeneca Group plc
CRH plc Pearson plc
Glaxo Wellcome plc Astra AB
- --------------------------------------------------------------------------------
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.
<PAGE>
Gabelli International Growth Fund, Inc.
Portfolio of Investments -- March 31, 1999 (Unaudited)
================================================================================
Market
Shares Value
------ -----
COMMON STOCKS - 100.7%
Broadcasting - 7.6%
3,700 Audiofina .............................................. $ 147,795
36,000 Granada Group plc ...................................... 729,342
1,650 NRJ SA ................................................. 331,324
1,800 Pathe SA ............................................... 462,494
35,000 Publishing and Broadcasting Ltd. ....................... 198,922
24,000 Tokyo Broadcasting System Inc. ......................... 304,990
----------
2,174,867
----------
Building and Construction - 3.6%
45,000 CRH plc ................................................ 776,814
22,500 Sekisui House Ltd. ..................................... 239,382
----------
1,016,196
----------
Business Services - 3.5%
5,833 Reuters Holdings plc, ADR .............................. 507,107
2,000 Vivendi ................................................ 492,074
----------
999,181
----------
Cable - 1.1%
75,000 Telewest Communications plc+ ........................... 326,896
----------
Computer Software and Services - 1.2%
3,000 Softbank Corp. ......................................... 336,401
----------
Conglomerates - 2.0%
8,800 Invik & Co. AB, B Free ................................. 572,540
----------
Consumer Products - 10.0%
2,500 Christian Dior SA ...................................... 320,906
520 Compagnie Financiere Richemont AG ...................... 864,239
14,000 KAO Corp. .............................................. 309,128
4,000 Nintendo Co. Ltd. ...................................... 345,183
2,000 Sanofi SA .............................................. 336,830
550 Swatch Group AG ........................................ 349,290
34,800 Unilever plc ........................................... 323,303
----------
2,848,879
----------
Diversified Industrial - 2.2%
6,000 Indus Holding AG ....................................... 195,621
3,000 Oerlikon-Buhrle Holding AG ............................. 435,767
----------
631,388
----------
Electronics - 1.4%
20,000 Matsushita Electronic Industrial Co. Ltd. .............. 390,104
----------
Energy and Utilities - 2.4%
23,000 BP Amoco plc ........................................... 392,082
5,500 Veba AG ................................................ 289,166
----------
681,248
----------
Equipment and Supplies - 1.1%
14,000 Toyo Seikan Kaisha Ltd. ................................ 302,035
----------
Financial Services - 4.2%
144,492 Colonial Ltd. .......................................... 572,116
7,000 Safra Republic Holdings SA ............................. 290,500
15,000 Schroders plc .......................................... 347,478
----------
1,210,094
----------
Financial Services: Banks - 5.9%
60,000 Banca Commerciale Italiana ............................. 492,225
75,000 Banca Nazionale Lavoro+ ................................ 262,339
5,000 Banco Pastor SA ........................................ 266,279
16,003 Bank of Ireland ........................................ 332,949
25,000 Bank of Scotland ....................................... 332,143
----------
1,685,935
----------
Financial Services: Insurance - 7.1%
34,000 CGU plc ................................................ 529,652
155,000 Istituto Nazionale delle Assicurazioni ................. 468,539
8,000 SCOR SA ................................................ 402,469
33,000 Skandia Forsakrings AB ................................. 614,009
----------
2,014,669
----------
Food and Beverage - 6.3%
180,000 Foster's Brewing Group Ltd. ............................ 527,542
800 Groupe Danone .......................................... 201,321
800 Moevenpick Holding AG .................................. 421,580
7,000 Nestle SA, ADR ......................................... 635,847
----------
1,786,290
----------
Health Care - 15.4%
28,000 Astra AB, Cl. A ........................................ 641,858
23,000 Glaxo Wellcome plc ..................................... 769,683
600 Novartis AG ............................................ 973,282
60 Roche Holding AG ....................................... 731,685
2,000 Schering AG ............................................ 232,866
20,000 SmithKline Beecham plc ................................. 288,476
15,000 Zeneca Group plc ....................................... 709,001
----------
4,346,851
----------
Metals and Mining - 2.1%
5,000 Anglogold Ltd. ......................................... 100,625
26,081 Antofagasta Holding plc ................................ 107,993
5,000 Barrick Gold Corp. ..................................... 85,313
30,000 Harmony Gold Mining Ltd. ............................... 139,947
75,000 Lihir Gold Ltd.+ ....................................... 64,631
10,000 Placer Dome Inc. ....................................... 111,875
----------
610,384
----------
Publishing - 8.5%
25,000 Arnoldo Mondadori Editore SpA .......................... 373,806
91,573 Independent Newspapers Ltd. ............................ 415,215
1,500 Kadokawa Shoten Publishing Co. Ltd. .................... 200,118
55,037 News Corp. Ltd.+ ....................................... 405,670
30,000 Pearson plc ............................................ 683,333
30,000 Schibsted ASA .......................................... 357,109
----------
2,435,251
----------
10
<PAGE>
Gabelli International Growth Fund, Inc.
Portfolio of Investments (Continued) -- March 31, 1999 (Unaudited)
================================================================================
Market
Shares Value
------ ------
COMMON STOCKS (Continued)
Retail - 1.1%
5,000 Ito Yokado Co. Ltd. ................................... $ 321,709
-----------
Telecommunications - 8.3%
37,000 Cable & Wireless plc .................................. 462,304
50 Nippon Telegraph & Telephone Corp. .................... 489,741
15,000 Rogers Communications Inc., Cl. B+ .................... 271,683
700 Swisscom AG+ .......................................... 273,351
49,300 Telecom Italia SpA .................................... 523,718
4,500 Telefonica de Espana .................................. 190,876
30,000 Telstra Corp. Ltd. .................................... 156,391
-----------
2,368,064
-----------
Transportation - 1.1%
15,637 MIF Ltd.+ ............................................. 303,484
-----------
Wireless Communications - 4.6%
60,000 Telecom Italia Mobile SpA ............................. 403,548
4,835 Vodafone Group plc, ADR ............................... 907,772
-----------
1,311,320
-----------
TOTAL COMMON STOCKS ................................... 28,673,786
-----------
OPTIONS - 0.0%
Metals and Mining - 0.0%
16,000 Durban Roodepoort Deep Ltd.+ .......................... 4,398
-----------
TOTAL INVESTMENTS - 100.7%
(Cost $24,206,782) .............................................. $28,678,184
Other Assets and
Liabilities (Net) - (0.7)% ...................................... (192,408)
-----------
NET ASSETS - 100.0%
(1,787,273 shares outstanding) .................................. $28,485,776
===========
NET ASSET VALUE,
Offering and Redemption
Price Per Share ................................................. $15.94
======
- ----------
+ Non-income producing security.
ADR - American Depositary Receipt.
% of
Market Market
Geographic Diversification Value Value
- -------------------------- ----- -----
Europe .................................. 79.5% $22,800,282
Japan ................................... 11.3% 3,238,790
Asia/Pacific Rim ........................ 6.7% 1,925,271
North America ........................... 1.6% 468,871
South Africa ............................ 0.9% 244,970
----- -----------
100.0% $28,678,184
===== ===========
11
<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 Werner J. Roeder, MD
Chairman and Chief Director of Surgery
Investment Officer Lawrence Hospital
Gabelli Asset Management Inc.
Anthony J. Colavita Anthonie C. van Ekris
Attorney-at-Law Managing Director
Anthony J. Colavita, P.C. BALMAC International, Inc.
Karl Otto Pohl
Former President
Deutsche Bundesbank
Officers and Portfolio Managers
Caesar Bryan Bruce N. Alpert
President and Vice President
Portfolio Manager and Treasurer
James E. McKee
Secretary
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.
- --------------------------------------------------------------------------------
